PARTICIPATION AGREEMENT (BRAC Trust No. 2005-[ ]) dated as of May ___, 2005 among BUDGET RENT A CAR SYSTEM, INC., as Lessee, WILMINGTON TRUST COMPANY,
Exhibit
10.1
(BRAC
Trust No. 2005-[ ])
dated as
of
May ___,
2005
among
BUDGET
RENT A CAR SYSTEM, INC.,
as
Lessee,
WILMINGTON
TRUST COMPANY,
|
|
in its individual capacity only to the extent
expressly stated herein and otherwise solely in its capacity as Owner
Trustee under the Trust Agreement (BRAC Trust No. 2005-[
]), |
|
BRAC
Trust No. 2005-[ ],
as Owner
Trust,
CENDANT
CORPORATION,
as
Guarantor
and
[OWNER
PARTICIPANT]
TABLE
OF CONTENTS
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Page | ||
|
SECTION
1. |
DEFINITIONS |
1 |
|
SECTION
2. |
1 | |
|
2.1
Payment of Total Cost |
1 | |
|
2.2
Time and Place of Fundings. |
1 | |
|
2.3
Funding Notices by Lessee |
2 | |
|
2.4
Application of Funds; Sale and Lease of the Vehicles |
2 | |
|
2.5
Certain Conditions to be Satisfied on the Closing Date |
3 | |
|
2.6
Appraisal |
4 | |
|
2.7
Opinions of Counsel |
4 | |
|
2.8
Owner Participant’s Instructions to Owner Trust |
4 | |
|
2.9
Failure to Fund |
5 | |
|
SECTION
3. |
CONDITIONS
TO FUNDINGS |
5 |
|
3.1
Conditions to the Obligations of Owner Participant |
5 | |
|
3.2
Conditions to the Obligations of Lessee |
7 | |
|
3.3
Conditions to the Obligations of Owner Trust |
8 | |
|
SECTION
4. |
8 | |
|
4.1
Representations, Warranties and Covenants of Lessee and
Guarantor |
8 | |
|
4.2
Representations, Warranties and Covenants of Owner
Participant |
13 | |
|
4.3
Representations, Warranties and Covenants of the Bank and the Owner
Trustee |
14 | |
|
4.4
Brokerage Representation |
15 | |
|
SECTION
5. |
COVENANTS |
15 |
|
5.1
General Non-Tax Indemnification by Lessee |
15 | |
|
5.2
General Tax Indemnity |
18 | |
|
5.3
Further Covenants of Lessee and Guarantor |
26 | |
|
5.4
Merger, Consolidation, Sale |
26 | |
|
SECTION
6. |
SURVIVAL
AND EFFECT OF WARRANTIES, AGREEMENTS AND INDEMNITIES |
28 |
|
6.1
Survival of Agreements, Representations, Warranties and
Indemnities |
28 | |
|
6.2
Effect of Other Indemnities |
28 | |
|
SECTION
7. |
EXPENSES |
28 |
|
7.1
Lessor’s Transaction Costs |
28 | |
|
7.2
Lessee’s Transaction Costs |
29 | |
|
SECTION
8. |
NOTICES |
29 |
|
SECTION
9. |
TRANSFERS |
29 |
|
9.1
Transfers by Owner Participant |
29 | |
|
9.2
Transfers by Owner Trust |
31 | |
|
SECTION
10. |
CERTAIN
COVENANTS OF OWNER TRUST AND OWNER PARTICIPANT |
32 |
|
10.1
Certain Covenants of Owner Participant |
32 | |
|
10.2
No Creation of Owner Trustee’s Liens by the Bank |
32 | |
|
SECTION
11. |
CONFIDENTIALITY |
32 |
|
SECTION
12. |
LESSEE’S
RIGHT OF QUIET ENJOYMENT; OWNERSHIP FOR FEDERAL TAX
PURPOSES |
33 |
|
SECTION
13. |
MISCELLANEOUS |
34 |
|
SCHEDULE
I |
- |
Schedule
of Accounts |
|
SCHEDULE
II |
- |
U.C.C.
Filings Being Made on Closing Date |
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SCHEDULE
III |
- |
Parties |
|
SCHEDULE
IV |
- |
Eligible
Vehicles |
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SCHEDULE
V |
- |
Transaction
Costs |
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SCHEDULE
VI |
- |
Variations |
|
| ||
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EXHIBIT
A |
- |
Form
of Section 3.1(a)(ii) Officer’s Certificate |
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EXHIBIT
X-x |
- |
Form
of Closing Date Opinion of White & Case, Special Counsel for the
Lessee and the Guarantor |
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EXHIBIT
B-2 |
- |
Form
of Closing Date Opinion of Corporate Counsel for Lessee
|
|
EXHIBIT
B-3 |
- |
Form
of Closing Date Opinion of Corporate Counsel for the Guarantor
|
|
EXHIBIT
B-4-A |
- |
Form
of Closing Date Opinion of Xxxxxxxx, Xxxxxx and Finger, P.A., Special
Counsel for the Owner Trust |
|
EXHIBIT
B-4-B |
- |
Form
of Closing Date Opinion of Xxxxxxxx, Xxxxxx and Finger, P.A., Special
Counsel for the Owner Trustee |
|
EXHIBIT
B-5 |
- |
Form
of Closing Date Opinion of Xxxxxx, Xxxx & Priest, Special Counsel for
the Owner Participant |
|
EXHIBIT
B-6 |
- |
Form
of Closing Date Opinion of Corporate Counsel for the Owner
Participant |
|
EXHIBIT
B-7 |
- |
Form
of Closing Date Opinion of Xxxxxxxx, Xxxxxx and Finger, P.A., Special
Counsel for the Nominee |
|
EXHIBIT
B-8 |
- |
Form
of Closing Date Opinion of Oklahoma Counsel |
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EXHIBIT
C-l |
- |
Form
of Power of Attorney of the Nominee re Titling and Registering
Vehicles |
|
EXHIBIT
C-2 |
- |
Form
of Power of Attorney of the Lessor re Perfecting Security
Interests |
|
EXHIBIT
C-3 |
- |
Form
of Power of Attorney re Sale of Vehicles |
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EXHIBIT
C-4 |
- |
Form
of Power of Attorney re Release of Security Interests |
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EXHIBIT
D |
- |
Form
of Funding Request |
|
EXHIBIT
E |
- |
Form
of Xxxx of Sale |
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APPENDIX
A |
- |
Definitions |
PARTICIPATION
AGREEMENT (BRAC Trust No. 2005-[ ])
PARTICIPATION
AGREEMENT (BRAC Trust No. 2005-[ ]), dated as of May ___, 2005, among
(i) BUDGET RENT A CAR SYSTEM, INC., a Delaware corporation, as Lessee; (ii)
WILMINGTON TRUST COMPANY, a Delaware banking corporation, acting in its
individual capacity only to the extent expressly stated herein and otherwise
solely in its capacity as Owner Trustee under the Trust Agreement, (iii) BRAC
TRUST NO. 2005-[ ], a Delaware statutory trust, as Owner Trust, (iv) CENDANT
CORPORATION, a Delaware corporation, as Guarantor; and (v) [OWNER PARTICIPANT],
a [ ], as Owner Participant.
The Owner
Trust desires to purchase, on each Funding Date, certain Eligible Vehicles and
lease such Vehicles to the Lessee and the Lessee desires on each such Funding
Date to lease such Eligible Vehicles from the Owner Trust. In order to finance
the purchase price of such Eligible Vehicles, the Owner Participant will make
investments in the trust created by the Trust Agreement.
In
consideration of the mutual agreements herein contained, the parties hereto,
intending to be legally bound, hereby agree as follows:
|
SECTION
1. |
The
definitions in Appendix A hereto shall apply for all purposes of this
Participation Agreement, except where otherwise specifically provided
herein.
|
SECTION
2. |
2.1
Payment of Total Cost.
(a) Subject to the terms and conditions hereinafter set forth, and in
reliance on the representations and warranties contained herein or made pursuant
hereto, on each Funding Date the Owner Participant shall make available to the
Owner Trust an investment in the trust created by the Trust Agreement in an
amount equal to the aggregate Purchase Price of the Vehicles specified in the
relevant Funding Date Lease Supplement. In no event shall the Owner Participant
be required to provide investments under this Participation Agreement in an
aggregate amount exceeding the Owner Participant’s Commitment.
(b) Remittances
pursuant to this Section 2.1 shall be made in immediately available federal
funds by wire transfer to the account of the Owner Trust set forth in Schedule I
hereto and must be received by the Owner Trustee by 11:00 a.m., New York time,
on the Funding Date.
2.2
Time and Place of Fundings.
(a) The following shall be applicable to Fundings:
(i) no more
than [one (1)] Fundings may occur;
(ii) each
Funding shall occur on a Business Day on or after the Closing Date and on or
before [September 30], 2005; and
(iii) each
Funding shall provide for financing of the Eligible Vehicles having an aggregate
Purchase Price that equals or exceeds $ ________, unless the Owner Participant
shall waive such minimum amount.
(b) The
closing for each Funding shall take place on the Funding Date therefor
commencing at 9:00 a.m., New York City time, at the offices of White & Case
LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
2.3
Funding Notices by Lessee.
With respect to each Funding (unless waived by the parties hereto), the Lessee
shall, not later than 1:00 p.m. New York time, on the third Business Day prior
to the date on which the Funding is proposed to occur, provide an irrevocable
notice to the Owner Trust and the Owner Participant, substantially in the form
of Exhibit D, specifying (a) the Funding Date, (b) with respect to the
Eligible Vehicles to be purchased on such Funding Date, the Specific
Identification, Purchase Price and Scheduled Expiration Date of such Eligible
Vehicles, (c) the aggregate Purchase Price of all such Eligible Vehicles and (d)
in the event such Funding Date is to be the Final Funding Date, that such
Funding Date is to be the Final Funding Date. As promptly as practicable after
the Owner Participant’s receipt of such notice, the Owner Participant shall
provide proposals for the Per Diem Rent Factor (if applicable), the Quarterly
Rent Factor and the percentages to be used in the calculation of Termination
Value pursuant to Section 3.3(a) of the Lease. Such proposed rent factors and
values shall be subject to verification by the Lessee that such proposals have
been prepared in accordance with the pricing assumptions specified on
Schedule III to the Lease. Upon verification, such proposed values shall
be incorporated into the Lease Supplement to be delivered on the proposed
Funding Date. In the
event that the Owner Participant and the Lessee shall not agree on the Per Diem
Rent Factor (if applicable), Quarterly Rent Factor and the percentages to be
used in the calculation of Termination Value, such proposed Funding shall be
postponed until such time as the Owner Participant and the Lessee shall so
agree, provided that the Funding Date shall not be postponed past April 30,
2005.
2.4
Application of Funds; Sale and Lease of the Vehicles.
On each Funding Date, upon (a) receipt by the Owner Trust of the investment
required to be made by the Owner Participant pursuant to Section 2.1 and (b)
satisfaction or waiver of the conditions set forth in Section 3.1, (i) the Owner
Trust shall purchase and assume ownership of the Vehicles to be acquired by the
Owner Trust on such Funding Date, as specified in the notice delivered pursuant
to Section 2.3, the Xxxx or Bills of Sale delivered to the Owner Trust on such
Funding Date and the Funding Date Lease Supplement executed on such Funding
Date, (ii) in consideration therefor, the Owner Trust shall pay, from the funds
made available by the Owner Participant pursuant to Section 2.1, an amount equal
to the aggregate Purchase Price of the Vehicles then being sold and purchased
pursuant hereto, in immediately available federal funds remitted by wire
transfer to the account of the Lessee set forth in Schedule I hereto (or
as otherwise specified by the Lessee to the Owner Trust in writing at least
three Business Days before such Funding Date) and (iii) the Owner Trust shall
lease and deliver to the Lessee and the Lessee shall accept delivery of and
lease from the Owner Trust such Vehicles pursuant to the Lease. Delivery of the
Vehicles to the Owner Trust on each Funding Date shall be effected by the
delivery to the Owner Trust of one or more Bills of Sale specifically
identifying the Vehicles delivered on such Funding Date. Delivery of the
Vehicles to the Lessee on each Funding Date shall be effected by the delivery of
the applicable Lease Supplement.
Participation
Agreement
-2-
2.5
Certain Conditions to be Satisfied on the Closing Date.
On the Closing Date the following conditions shall have been
satisfied:
(a) A fully
executed counterpart of each of the following documents shall have been
delivered to each party hereto (except that the original counterpart of the
Lease bearing the Owner Trust’s signed receipt shall have been delivered only to
the Owner Trust):
(i) this
Participation Agreement;
(ii) the
Lease;
(iii)
the
Guaranty;
(iv) the Trust
Agreement;
(v) the
Nominee Agreement;
(vi) the
Nominee Trust Agreement;
(vii)
the
Nominee Trust Supplement;
(viii) the Tax
Indemnity Agreement; and
(ix) the
Powers of Attorney.
(b) A
certificate of each of the Lessee, the Guarantor, the Nominee, the Owner
Participant and the Owner Trust, signed by an appropriate officer thereof, with
respect to (A) the authority and incumbency and specimen signatures of the
officers executing and delivering the Operative Documents to which such Person
is or will become a party and (B) the pertinent charter and By-Laws shall have
been delivered to each of the parties hereto.
(c) A copy of
resolutions of the Board of Directors or appropriate Committee of the Board of
Directors of each of the Lessee, the Guarantor, the Owner Participant and the
Owner Trustee, certified by the Secretary or an Assistant Secretary of such
Person, duly authorizing the execution, delivery and performance by such Person
of the Operative Documents to which such Person is or will become a party shall
have been delivered to each of the parties hereto to the extent that such
resolutions are required for such execution, delivery and performance.
(d) Evidence
with respect to each of the Lessee and the Guarantor that it is a corporation in
good standing and qualified to do business in the state of Delaware shall have
been delivered to each of the parties hereto.
(e) Certificates
of insurance naming the Owner Trust, the Owner Participant and the Nominee as a
named additional insured or lender loss payee, as applicable, and otherwise
complying with Section 8 of the Lease shall have been delivered to the Owner
Trust, the Owner Participant and the Nominee.
Participation
Agreement
-3-
(f) UCC
financing statements as set forth on Schedule
II hereto
shall have been made available for delivery to the appropriate filing offices
for filing, with copies thereof provided to each of the parties
hereto.
(g) The
statements set forth in paragraphs (e), (f) and (g) of Section 3.1 shall be true
and correct on and as of the Closing Date and the Owner Trust and the Owner
Participant shall have received an Officer’s Certificate of the Lessee and the
Guarantor with respect thereto.
(h) The
Lessor and the Owner Participant shall have received a duly executed TRAC
Certificate in the form of Exhibit
A to the
Lease.
2.6
Appraisal.
On the Closing Date, the Owner Participant shall have received from the
Appraiser an opinion reasonably satisfactory to the Owner Participant with
respect to the fair market value and estimated useful life of the Eligible
Vehicles as of the Closing Date, the estimated fair market value of the Eligible
Vehicles as of the expiration dates of the Base Term and the Renewal Term and
such other matters as the Owner Participant may require.
2.7
Opinions of Counsel.
On the Closing Date (a) White & Case LLP, special counsel for the Lessee and
the Guarantor, shall have delivered its legal opinion, addressed to the Owner
Participant and the Owner Trust, substantially in the form of Exhibit
B-1; (b) Xxxxx X. Xxxxxxxx, corporate counsel for the Lessee, shall have
delivered her legal opinion, addressed to the Owner Participant and the Owner
Trust, substantially in the form of Exhibit B-2; (c) Xxxx X. Xxxx,
corporate counsel for the Guarantor, shall have delivered his legal opinion,
addressed to the Owner Participant and the Owner Trust, substantially in the
form of Exhibit B-3; (d) Xxxxxxxx, Xxxxxx & Finger, P.A., special
counsel for the Owner Trust, shall have delivered its legal opinion, addressed
to the Owner Participant, the Lessee and the Guarantor, substantially in the
form of Exhibit B-4-A; (e) Xxxxxxxx, Xxxxxx & Finger, P.A., special
counsel for the Owner Trustee, shall have delivered its legal opinion, addressed
to the Owner Participant, the Lessee and the Guarantor, substantially in the
form of Exhibit B-4-B; (f) Xxxxxx Xxxx & Priest LLP, special counsel
for the Owner Participant, shall have delivered its legal opinion addressed to
the Owner Trust, the Lessee and the Guarantor, substantially in the form of
Exhibit B-5; (g) in-house counsel for the Owner Participant shall have
delivered his or her legal opinion, addressed to the Lessee and the Guarantor,
substantially in the form of Exhibit B-6; (h) Xxxxxxxx, Xxxxxx &
Finger, P.A., special counsel for the Nominee, shall have delivered its legal
opinion, addressed to the Owner Trust, the Owner Participant, the Lessee and the
Guarantor, substantially in the form of Exhibit B-7; (i) special Oklahoma
counsel for the Lessee shall have delivered its legal opinion, addressed to the
Owner Participant and the Owner Trust, in form and substance reasonably
satisfactory to the Owner Participant; and (j) the Owner Participant shall have
received from Xxxxxx Xxxx & Priest LLP, special counsel for Owner
Participant, a favorable opinion, in form and substance reasonably satisfactory
to the Owner Participant and dated the Closing Date, with respect to certain
federal income tax consequences arising out of its participation in the
transactions contemplated hereby.
2.8
Owner Participant’s Instructions to Owner Trust.
Subject to the terms and conditions set forth herein, the Owner Participant
hereby authorizes and directs the Owner Trust to, and the Owner Trust hereby
declares and agrees that it will, (a) purchase the Vehicles being sold and
purchased pursuant hereto, if and as required hereby; (b) execute and deliver
the
Participation
Agreement
-4-
Operative Documents to which it is intended to be a
party and any other documents, instruments or certificates it is required to
execute and deliver on each Funding Date or otherwise pursuant hereto; and (c)
take all actions required to be taken by the Owner Trust pursuant to the
Operative Documents.
2.9
Failure to Fund.
If the Lessee does not agree on the Per Diem Rent Factor (if applicable), the
Quarterly Rent Factor and the percentages to be used for calculating Termination
Value pursuant to Section 3.3(a) of the Lease and Section 2.3 hereof (the “Rent
Factors”) on or before the proposed Funding Date, then the Funding Date will be
postponed for a period of time, which will not extend beyond [September 30],
2005, during which the parties shall continue to discuss the Rent Factors in
good faith, and/or proceed with the confirmation of calculations as provided in
Section 3.3(a) of the Lease. In the event that Lessee does not agree to the Rent
Factors by [September 30], 2005, this Agreement shall terminate, provided that
the Lessee and Owner Participant shall each remain liable for their respective
obligations under Section 7 hereof.
|
SECTION
3. |
3.1
Conditions to the Obligations of Owner Participant.
The obligations of the Owner Participant to be performed on each Funding Date
shall be subject to the fulfillment or waiver by the Owner Participant of the
conditions set forth in Sections 2.5, 2.6 and 2.7 on the Closing Date and, to
the reasonable satisfaction of the Owner Participant, the conditions precedent
set forth in this Section 3.1 on or before such Funding Date; provided,
however, that
the obligations of the Owner Participant shall not be subject to the Owner
Participant’s own performance or compliance with any agreement or
condition.
(a) Execution
and Delivery of Funding Documents.
The following documents shall have been duly authorized, executed and delivered
by the parties thereto, shall be in form and substance reasonably satisfactory
to the Owner Participant and shall be in full force and effect on such Funding
Date and a fully executed counterpart of each thereof shall have been delivered
to each party (except that (y) the original counterpart of the Funding Date
Lease Supplement bearing the Owner Trust’s signed receipt shall be delivered
only to the Owner Trust, and (z) photocopies of the Xxxx or Bills of Sale shall
be delivered to all parties hereto other than the Owner Trust, which shall
receive such number of original counterparts thereof as it shall reasonably
request):
(i) a Funding
Date Lease Supplement, dated such Funding Date and covering the Vehicles then
being purchased pursuant to this Participation Agreement;
(ii) an
Officer’s Certificate of the Lessee, dated such Funding Date, certifying as to,
among other things, the actions taken with respect to titling and registration
of Funding Date Vehicles, substantially in the form attached as Exhibit
A hereto;
and
(iii)
a Xxxx or
Bills of Sale, dated such Funding Date, and covering the Funding Date
Vehicles.
(b) Compliance
with Representations, Warranties, Etc.
The Operative Documents executed and delivered on the Closing Date shall
continue to be in full force and
Participation
Agreement
-5-
effect;
the respective representations and warranties made by the Budget Parties in the
Operative Documents (other than the Tax Indemnity Agreement) shall be true and
correct in all material respects on such Funding Date as if made on and as of
such date; no Event of Loss, Default or Event of Default shall have occurred and
be continuing or will result from the Funding on such Funding Date; all
transfer, sales, value added and similar Taxes due and payable in connection
with the acquisition and sale/leaseback of the Vehicles shall have been paid;
and each of the agreements, covenants and conditions relating to such Funding
contained in this Participation Agreement and the other Operative Documents
which are required to be performed or complied with by the Lessee, the Guarantor
or the Nominee on or before such Funding Date shall have been performed or
complied with.
(c) Other
Documents to be Delivered.
The following certificates and other documents shall have been duly authorized,
executed and delivered by the respective parties thereto and shall be in form
and substance reasonably acceptable to the Owner Participant, and an executed
counterpart of each thereof shall have been delivered to the Owner
Participant:
(i) A
certificate from each of the Lessee, the Guarantor, the Nominee and the Owner
Trust, signed by an appropriate officer thereof, confirming the accuracy and
completeness as of such Funding Date of the matters dealt with in their
respective certificates referred to in paragraphs (b), (c), (d) and (g) of
Section 2.5;
(ii) An
Officer’s Certificate, dated the Funding Date, from each of the Lessee and the
Guarantor, stating that (x) such party’s representations and warranties
contained in the Operative Documents (other than the Tax Indemnity Agreement) to
which it is a party are true and correct in all material respects on such
Funding Date, as though made on and as of such Funding Date; (y) no Default or
Event of Default has occurred and is continuing or would result from the Funding
to be made on such Funding Date; and (z) all covenants and conditions required
to be performed or fulfilled by such party on or before the Funding Date have
been performed or fulfilled; and
(iii) Either
(A) a copy of the certificate of title relating to each Funding Date Vehicle and
a copy (front and back) of a sample certificate of origin for a vehicle relating
to each Funding Date Vehicle together with the vehicle identification number for
each Funding Date Vehicle or (B) a copy (front and back) of the certificates of
origin for vehicles relating to each Funding Date Vehicle.
(d) Funding
Notice.
The Owner Trust shall have received a notice from the Lessee of such Funding in
accordance with the provisions of Section 2.3.
(e) No
Proceedings.
No action or proceeding shall have been instituted, nor shall governmental
action be overtly threatened, before any court or other Governmental Body, nor
shall any order, judgment or decree have been issued or, to the Lessee’s or
Guarantor’s actual knowledge, proposed to be issued by any court or other
Governmental Body at the time of such Funding Date, to set aside, restrain,
enjoin or prevent the execution, completion and consummation of this
Participation Agreement, the other Operative Documents or the transactions
contemplated hereby or thereby.
Participation
Agreement
-6-
(f) Consents.
On such Funding Date, all approvals and consents, if any, of any trustees or
holders of any indebtedness or obligations of the Lessee and the Guarantor which
are required in connection with the transactions contemplated by this
Participation Agreement and the other Operative Documents shall have been duly
obtained and shall be in full force and effect.
(g) Governmental
Actions.
All actions, if any, required to have been taken on or prior to such Funding
Date by any Governmental Body in connection with the transactions contemplated
by this Participation Agreement shall have been taken and all orders, permits,
waivers, exemptions, authorizations and approvals, if any, of such entities
required to be in effect on such Funding Date in connection with the
transactions contemplated by this Participation Agreement and the other
Operative Documents shall have been issued, and all such orders, permits,
waivers, exemptions, authorizations and approvals shall be in full force and
effect.
(h) Tax
Law Change.
There shall not have occurred a Tax Law Change since the Closing Date, if (x)
the effect of such Tax Law Change could reasonably be expected to adversely
affect the Owner Participant’s Net Economic Return and (y) the Lessee shall not
have agreed to an adjustment to Basic Rent (calculated in the manner
contemplated by Section 3.3(a) of the Lease) that would preserve such Net
Economic Return (computed on the assumption that such Tax Law Change does
adversely affect Net Economic Return).
3.2
Conditions to the Obligations of Lessee.
The obligations of the Lessee to be performed at each Funding shall be subject
to the fulfillment or waiver of the conditions precedent set forth in this
Section 3.2 on or before such Funding Date; provided,
however, that
the obligations of the Lessee shall not be subject to the Lessee’s or the
Guarantor’s own performance or compliance with any agreement or
condition.
(a) Execution
and Delivery of Funding Documents; Payment of Purchase Price.
The Owner Participant and the Owner Trust shall have complied with their
respective obligations set forth in Sections 2.1 and 2.4.
(b) Compliance
with Representations, Warranties, etc.
The Operative Documents executed and delivered at the Closing Date shall
continue to be in full force and effect; the respective representations and
warranties made by the Owner Participant and the Owner Trust pursuant to Section
4 shall be true and correct in all material respects on such Funding Date as if
made on and as of such date; and each of the agreements, covenants and
conditions relating to such Funding contained in this Participation Agreement
and the other Operative Documents which are required to be performed or complied
with by the Owner Participant or the Owner Trust on or before such Funding Date
shall have been performed or complied with. The investment by the Owner
Participant on a Funding Date shall be deemed to be a representation and
warranty by the Owner Participant that the representations and warranties set
forth in Section 4.2 are true and correct in all material respects on and as of
such Funding Date and the execution and delivery by the Owner Trust of the
Funding Date Lease Supplement dated such Funding Date shall be a representation
and warranty by the Bank and the Owner Trustee, that the representations and
warranties set forth in Section 4.3 are true and correct on and as of such
Funding Date.
Participation
Agreement
-7-
(c) Other
Conditions.
Each of the conditions specified in Section 3.1(e), (f) and (g) shall have been
satisfied to the satisfaction of the Lessee.
3.3
Conditions to the Obligations of Owner Trust.
The obligations of the Owner Trust to be performed at each Funding shall be
subject to the provision of notice by the Lessee in accordance with the
requirements set forth in Section 2.3 and the fulfillment or waiver of the
conditions precedent set forth in Section 3.1 (as if each reference to the Owner
Participant in Section 3.1 referred instead to the Owner Trust and each
reference to the Owner Trust referred instead to the Owner Participant);
provided,
however, that
the obligations of the Owner Trust shall not be subject to its own performance
or compliance with any agreement or conditions; and provided
further, however, that a
waiver by the Owner Participant of the conditions set forth in Sections 2.5, 2.6
and 2.7 shall be effective to bind the Owner Trust.
|
SECTION
4. |
4.1
Representations, Warranties and Covenants of Lessee and
Guarantor.
Each of the Lessee and the Guarantor represents, warrants and covenants, to and
for the benefit of the Owner Trust and the Owner Participant, as follows (it
being understood that references in this Section 4.1 to “Operative Documents,”
“Vehicles” and “Lessor’s Estate” mean those Operative Documents delivered on or
prior to, those Vehicles purchased or to be purchased by the Owner Trust on or
prior to, and the Lessor’s Estate as it is constituted on, the date hereof or ,
with respect to each Funding Date, such Funding Date, as
applicable:
(a) Incorporation
and Good Standing.
It is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware. It has all corporate power and corporate
authority to own its properties and assets and to carry on its business as now
conducted and as presently proposed to be conducted. The Lessee is duly
qualified to do business as a foreign corporation and is in good standing in
each state and in each other (and the Guarantor is qualified in each) United
States jurisdiction where failure to be so qualified would reasonably be
expected to have a material adverse effect on its business or properties or on
its ability to enter into and perform its obligations under the Operative
Documents.
(b) Authorization.
It has all requisite corporate power and corporate authority to execute, deliver
and perform the Operative Documents to which it is a party and to carry out the
provisions thereof. The execution, delivery and performance by it of the
Operative Documents to which it is a party have been duly authorized by all
necessary corporate action on its part, and each Operative Document to which it
is a party has been duly executed and delivered by it and constitutes the legal,
valid and binding obligation of it, enforceable against it in accordance with
its terms, except as the same may be limited by (i) applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement of
creditors’ rights and (ii) general principles of equity.
(c) Taxes.
It has filed all tax returns which are required to be filed by it (except where
the requirement to file such return is subject to a valid extension or such
failure would not reasonably be expected to have a material adverse effect on
its business and properties) and has paid or made adequate provision for the
payment of all taxes shown due on such returns (or required to be paid as a
condition to such extension), as well as all other taxes,
assess-
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Agreement
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ments and governmental charges which have become due
(other than tax assessments and charges payable without penalty or which are
being contested in good faith and by appropriate proceedings and for which
adequate reserves are maintained in accordance with GAAP).
(d) No
Litigation or Default.
There are no actions, suits, investigations or proceedings pending or, to its
actual knowledge, overtly threatened against it before any Governmental Body
which question the validity or enforceability of the Operative Documents to
which it is a party or any action taken or to be taken pursuant thereto, or
which, if adversely determined, individually or in the aggregate, would
materially impair its ability to perform its obligations under the Operative
Documents to which it is a party, or which, if adversely determined,
individually or in the aggregate, would reasonably be expected to have a
material adverse effect on its financial condition or operations. It is not in
default with respect to any order of any Governmental Body, the default under
which would materially impair its ability to perform its obligations under the
Operative Documents to which it is a party or would reasonably be expected to
have a material adverse effect on its financial condition or
operations.
(e) No
Conflict.
Neither it nor any of its properties or assets are subject to any contract or
agreement, any provision of its Certificate of Incorporation or its By-Laws, or
other corporate restriction, any law or any order, rule, ruling, certificate,
license, regulation, judgment, injunction or demand of any country, state,
territory or political subdivision thereof or of any court, agency, board,
commission, governmental instrumentality or other tribunal or Governmental Body
which would reasonably be expected to have a material adverse effect on its
ability to carry on its business or perform its obligations under the Operative
Documents to which it is a party. The valid and binding execution and delivery
of, and compliance with, the Operative Documents to which it is a party (i) will
not contravene its Certificate of Incorporation or By-Laws; (ii) will not
contravene any provision of any presently effective law, rule, regulation,
decree, ruling, judgment, order or injunction applicable to or binding upon it,
the contravention of any of which would have a material adverse effect on its
business or properties or would materially impair the valid and binding nature
of, or its ability to perform, any of its obligations under the Operative
Documents to which it is a party, and (iii) will not contravene or result in the
creation or imposition of any Lien (other than any such Lien created by such
Operative Documents) on any property of it pursuant to the provisions of, result
in the acceleration of any obligation of it under, or result in a condition or
event which constitutes a default under any indenture, agreement or instrument
material to its business.
(f) Title;
Insurance.
On each Funding Date:
(i) The Xxxx
or Bills of Sale, when executed and delivered to the Owner Trust, will convey to
the Owner Trust all of the Lessee’s interest in each Vehicle purchased by the
Owner Trust on such Funding Date;
(ii) the
Nominee will have, as agent for and on behalf of the Owner Trust, good title to
each Vehicle purchased on such Funding Date, free and clear of all Liens (other
than Permitted Liens), provided
that the
certificate of title with respect to such Vehicle may not have been
issued;
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(iii) all
actions and all filings with applicable Governmental Bodies necessary to
establish and perfect the Owner Trust’s rights and interest in and to such
Vehicles (including, without limitation, title in the name of the Nominee and
the Owner Trust’s security interest reflected thereon) will have been duly made
(except that this clause (iii) shall not require that a certificate of title
shall have been issued with respect to each Vehicle purchased on the Funding
Date, provided
that all
the aforementioned actions, other than the issuance of such certificate of title
by the applicable governmental entities specified in the Officer’s Certificate
delivered pursuant to Section 3.1(a)(ii), shall otherwise have been
accomplished); and
(iv) such
Vehicles will be covered by effective insurance policies as required by Section
8 of the Lease and all premiums due on or prior to such Funding Date with
respect to such insurance policies will have been paid in full.
The use
and operation of the Vehicles by the Lessee will not, and the Lessee agrees not
to take any action which would, adversely affect the Nominee’s title to the
Vehicles or the Owner Trust’s rights or interests therein or present any
non-de
minimis risk of
forfeiture thereof or create any rights in or claims against the Vehicles (it
being understood that the Nominee’s title or the Owner Trust’s rights or
interests to the Vehicles may be subject to Permitted Liens).
(g) Financial
Statements.
In the case of the Guarantor, its audited consolidated financial statements as
of December 31, 2004
for the fiscal period then ended, a copy of which has been furnished to the
Owner Participant, have been prepared in conformity with generally accepted
accounting principles applied on a basis consistent (except as expressly noted
therein) with that of the preceding fiscal periods and fairly present the
consolidated financial condition of it as of each date thereof, and the
consolidated results of its operations for each period then ended. Since the
date of the Guarantor’s Report on Form 10-K, dated March 1, 2005, a copy of
which has been furnished to the Owner Participant, there has been no material
adverse change in the financial condition of the Guarantor.
(h) Description
of Vehicles.
Each of the Vehicles and the improvements thereon is newly manufactured within
ninety-four (94) days of the relevant Funding Date thereof. On each Funding
Date, the information set forth in the Schedules to each Funding Date Lease
Supplement will be true and correct in all material respects for each Vehicle
covered thereby, including for each Vehicle (i) its Specific Identification and
(ii) the Purchase Price thereof.
(i) Payment
of Purchase Price.
The proceeds from the investments of the Owner Participant will be used solely
for (i) the payment (or reimbursement to the Lessee) of (i) the Purchase Price
for the Vehicles, which in all cases shall be Eligible Vehicles, acquired by the
Owner Trust on the Funding Date or (ii) payment of the Lessor’s Transaction
Costs in accordance with Section 7.1 herein.
(j) Location
of Lessee.
The “location” (as such term is defined in the U.C.C. of the State of Delaware)
of the Lessee is the State of Delaware. It will give prior notice of at least
ten (10) days to the parties hereto of any change in the foregoing or any change
in its legal name.
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(k) ERISA.
Assuming the truth and accuracy of the representations set forth in Section
4.2(d), the execution and delivery of the Operative Documents and consummation
of the transactions contemplated thereby do not involve any “prohibited
transaction” within the meaning of Section 406(a)(1) of ERISA or Section
4975(c)(1)(A)-(D) of the Code.
(l) Investment
Company Act.
It is not an “investment company” or an “affiliated person” of an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.
(m) Margin
Regulation.
None of the proceeds from the investment of the Owner Participant have been or
will be used directly or indirectly (i) for the purpose of purchasing or
carrying any margin security, as such term is used in Regulation U of the Board
of Governors of the Federal Reserve System, (ii) for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or carry any
such margin security, (iii) for any other purpose which might cause this
Participation Agreement or the obligations of the Owner Participant under the
Operative Documents to be considered a “purpose credit” within the meaning of
Regulation T, U or X of such Board of Governors or (iv) for any other purpose in
violation of Regulation T, U or X of such Board of Governors.
(n) Corporate
Existence, etc.
Subject to Section 5.4, it will at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business.
(o) Sale
of Interests.
Neither it nor anyone acting on its behalf has taken or will take any action
which will subject the issue and sale of any interest in the Lessor’s Estate to
the requirements of Section 5 of the Securities Act. Assuming the truth and
accuracy of the representations set forth in Sections 4.2(a) and 4.3(e), the
issuance, sale and delivery of the interests in the Lessor’s Estate under the
circumstances contemplated by this Participation Agreement do not require the
registration of the interests in the Lessor’s Estate under the Securities Act or
the qualification of the Trust Agreement under the Trust Indenture Act of 1939,
as amended.
(p) Consents.
Neither the nature of the Lessee nor the Guarantor, its businesses or
properties, nor any relationship between it and any other Person, is such as to
require a consent, approval or authorization of, or filing, registration,
qualification, giving of notice or the taking of any other action with respect
to any Governmental Body on its part in connection with the execution, delivery
and performance by it of the Operative Documents to which it is a party,
except
such
consents, approvals, authorizations, filings, registrations, qualifications,
notices or actions as have been obtained, filed, registered, qualified, given or
taken, as the case may be, or as to which the failure to obtain, file, register,
qualify, give or take would not (i) materially impair its ability to perform its
obligations under the Operative Documents to which it is a party, (ii) otherwise
materially impair its ability to carry on its business as presently conducted,
and it has no reason to believe that it will be prevented by any Governmental
Body, in any material respect, from so carrying on its business as presently
conducted, or (iii) result in, or increase the risk of, the imposition of any
criminal liability on any Indemnified Person.
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(q) Subjection
to Government Regulation.
Neither the Owner Trust nor the Owner Participant will, solely by reason of
entering into the Operative Documents or the consummation and performance of the
transactions contemplated by the Operative Documents (other than upon the
exercise of remedies under the Lease or upon expiration of the Lease if the
Owner Participant takes legal title to the Vehicles), (x) be required to qualify
to do business in any state, (y) become subject to ongoing regulation by any
Governmental Body as a manufacturer or dealer of motor vehicles in any state or
(z) to the actual knowledge of the Lessee and the Guarantor, become subject to
any other ongoing regulation of its operations by any Governmental
Body.
(r) Default.
No Default or Event of Default has occurred and is continuing.
(s) Disclosure.
Neither the Information Memorandum, the financial statements referred to in
Section 4.1(g) nor any other certificate, document, instrument or other
statement in writing furnished by it or (to its knowledge) on its behalf to the
Owner Participant in connection with the transaction contemplated hereby and by
the other Operative Documents contains any untrue statement of a material fact
or, when taken together with the other documents so furnished, omits a material
fact necessary to make the statements contained therein or herein not
misleading, under the circumstances under which any such statements have been
made.
(t) Holding
Company.
It is not subject to regulation as a “holding company,” an “affiliate” of a
“holding company,” or a “subsidiary company” of a “holding company,” within the
meaning of the Public Utility Holding Company Act of 1935, as
amended.
(u) No
Contravention of Law.
Neither the Owner Trust nor the Owner Participant, solely by reason of its
consummation of the transactions contemplated by the Operative Documents
(including the titling and registration of the Vehicles as contemplated by the
Nominee Agreement and the perfection of the Owner Trust’s security interest in
the Vehicles but excluding any discretionary acts by the Owner Trust), will
contravene, violate or breach any applicable law, rule or regulation relating to
motor vehicles, nor will such consummation of such transactions, in and of
itself, result in the creation or imposition of any Lien (other than Permitted
Liens) upon any of its property or assets under any applicable law, rule or
regulation relating to motor vehicles, or require any consent, approval or
authorization from, registration or filing with, notification to or other action
by or in respect of, any Governmental Body or other Person (except as
contemplated by the Nominee Agreement) pursuant to any applicable law, rule or
regulation relating to motor vehicles.
(v) Stock
Ownership.
The Guarantor is the beneficial owner of all of the issued and outstanding
capital stock of the Lessee, all of which capital stock has been validly issued,
is fully paid and nonassessable.
(w) Title
and Registration.
The Lessee shall take all reasonable efforts to cause each Vehicle to be titled
and registered in the State of Oklahoma, provided
that the
Lessee shall be permitted to change the state of registration of a Vehicle in
accordance with, and subject to, the conditions of Section 7.2 of the
Lease.
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Agreement
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(x) Compliance.
It is not in violation of any term of any charter instrument, by-law or, in any
material respect, any other material agreement or instrument to which it is a
party or by which it may be bound. It is in compliance with all laws,
ordinances, governmental rules and regulations to which it is subject, the
failure to comply with which would materially impair its ability to perform its
obligations under the Operative Documents to which it is a party, and has
obtained all licenses, permits, franchises and other governmental authorizations
material to the conduct of its business.
(y) Payment
of Manufacturers.
Any funds received by the Lessee from the Owner Trust pursuant to Section
2.4(ii) hereof that are not retained by the Lessee as reimbursement for any
prior payment to a Manufacturer by the Lessee shall be remitted to the relevant
Manufacturer as payment for Vehicles purchased therefrom within thirty (30) days
after receipt of such funds.
4.2
Representations, Warranties and Covenants of Owner
Participant. The
Owner Participant hereby represents, warrants and covenants, to and for the
benefit of the Owner Trust, the Lessee and the Guarantor as follows (it being
understood that references in this Section 4.2 to “Operative Documents” and
“Lessor’s Estate” mean those Operative Documents delivered on or prior to, and
the Lessor’s Estate as it is constituted on, the date hereof or any subsequent
Funding Date as of when the following representations and warranties are made
again or are required, as a condition to Funding, to be true and
correct):
(a) Securities
Act.
The interest being acquired or to be acquired by the Owner Participant in the
Lessor’s Estate is being acquired for its own account, without any view to the
distribution thereof or any interest therein, provided that the Owner
Participant shall be entitled to assign, convey or transfer its interest in
accordance with Section 9.1. The Owner Participant is an accredited investor as
that term is defined in Rule 501(a) under the Securities Act.
(b) Due
Incorporation; Execution of Documents.
The Owner Participant is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization. The Owner Participant
has all requisite power and authority to enter into and perform its obligations
under the Operative Documents to which it is a party. The execution, delivery
and performance by the Owner Participant of the Operative Documents to which it
is a party have been duly authorized by all necessary action on the part of the
Owner Participant and each Operative Document to which the Owner Participant is
a party has been duly executed and delivered by the Owner Participant and
constitutes the legal, valid and binding obligation of the Owner Participant,
enforceable against it in accordance with its terms except as enforceability may
be limited by (i) applicable bankruptcy, receivership, conservatorship,
insolvency, reorganization or similar laws affecting the enforcement of
creditors’ rights and (ii) general principles of equity.
(c) No
Liens. There
are no Owner Participant’s Liens on the Vehicles which are subject to the
Lease.
(d) Employee
Benefit Plans.
The Owner Participant is and will be making its investment hereunder, and is
performing its obligations under the Operative Documents, with its
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Agreement
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general
assets and not directly or indirectly with the assets of an “employee benefit
plan” (as defined in Section 3(3) of ERISA) or a “plan” (as defined in Section
4975(e) (1) of the Code).
(e) Trust
Agreement.
While the Lease is in effect, the Owner Participant hereby agrees not to amend
or modify the Trust Agreement without the prior written consent of the Lessee,
such consent not to be unreasonably withheld, provided
that if
an Event of Default shall have occurred and be continuing, the Owner Participant
may agree to amend or modify the Trust Agreement without the consent of the
Lessee, but, in such case, the Lessee shall not be liable for any indemnity
obligation that, absent this proviso, would
arise under Section 5.2 as a result of such amendment or
modification.
(f) Minimum
Liability of Lessor.
The Owner Participant represents, warrants and covenants that neither the Owner
Trust nor it has specifically utilized, directly or indirectly, as a source of
funds for the purchase of the Vehicles any amounts borrowed from (i) any
person who participated in the organization, sale, or management of the
transactions contemplated by the Operative Documents or who has an interest
(other than an interest as a creditor) in the transactions contemplated by the
Operative Documents (a “Participating Person”) or from any person who is related
to a Participating Person, (ii) any lender located outside of the United States
(if the use of such lender’s financing in the purchase of the Vehicles was
communicated by the borrower to any Participating (or related) Person) or (iii)
any lender where such loan is arranged by a Participating (or related) Person,
unless, in each case, the amount is unconditionally required to be repaid by the
Owner Participant or the Owner Trust, as the case may be, before the close of
the year in which such amount was borrowed.
4.3
Representations, Warranties and Covenants of the Bank
and the Owner
Trustee.
The Bank or, to the extent indicated below, the Owner Trustee represents,
warrants and covenants, to and for the benefit of the Lessee, the Guarantor and
the Owner Participant, as follows (it being understood that references in this
Section 4.3 to “Operative Documents” and “Lessor’s Estate” mean those Operative
Documents delivered on or prior to, and the Lessor’s Estate as it is constituted
on, the date hereof or any subsequent Funding Date as of when the following
representations and warranties are made again or are required as a condition to
Funding to be true and correct):
(a) Due
Incorporation.
It is a banking corporation validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
enter into and perform its obligations under the Operative Documents to which it
is a party.
(b) Authorization
and Execution of Documents.
The execution, delivery and performance by it or the Owner Trustee of the
Operative Documents to which it is a party have been duly authorized by all
necessary corporate action on its part. The Operative Documents to which it is,
in its individual capacity or as the Owner Trustee, a party have been duly
executed and delivered by it and constitute the legal, valid and binding
obligations of it, enforceable against it in accordance with their terms except
as enforceability may be limited by (i) applicable bankruptcy, receivership,
conservatorship, insolvency, reorganization or similar laws affecting the
enforcement of creditors’ rights and (ii) general principles of
equity.
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Agreement
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(c) No
Liens.
In the case of each of the Bank, and the Owner Trustee, there are no Owner
Trustee’s Liens on the Vehicles which are subject to the Lease attributable to
it.
(d) No
Litigation.
There are no actions or proceedings pending or, to its knowledge after
reasonable inquiry, threatened against it, or the Owner Trustee, before any
Governmental Body (i) which question the validity or enforceability of the
Operative Documents to which it or the Owner Trustee, is a party; or (ii) which
relate to its banking or trust powers and which, if determined adversely to it,
would materially impair its ability to perform its obligations under the
Operative Documents to which it is a party.
(e) Sale
of Interests.
Neither it, in its individual capacity, nor anyone acting on its behalf has
directly or indirectly offered any interest in the Lessor’s Estate for sale to,
or solicited any offer to acquire any of the same from, any Person other than
the Owner Participant.
(f) No
Conflict or Required Approval.
The execution, delivery and performance by it, or the Owner Trustee, of the
Operative Documents to which it, or the Owner Trustee, is a party (i) do not
conflict with or violate any law of any Governmental Body under the laws of the
State of Delaware or the federal laws of the United States relating to its
banking or trust powers, (ii) do not require any approval of, consent, permit,
license, the giving of notice to, the registration with or the taking of any
other action by or in respect of any Governmental Body, under any law of the
State of Delaware or any federal law of the United States relating to its
banking or trust powers, except for such consents as it has obtained, and (iii)
do not conflict with, or result in any breach of any of the provisions of, or
constitute a default under its By-Laws or charter or any mortgage, indenture or
other agreement or instrument to which it is a party or by which it or its
property is bound.
4.4
Brokerage Representation.
Each party severally represents and warrants that no broker’s or finder’s fees
or commissions or management or advisory fees are, will or may become payable in
connection with the transactions contemplated by the Operative Documents, except
(i) as specifically agreed in writing by the Lessee or the Guarantor (and for
the payment of which the Lessee or the Guarantor is solely responsible); (ii) as
may be specifically provided in Schedule V hereto and (iii) or as specifically
provided in the Operative Documents.
|
SECTION
5. |
5.1
General Non-Tax Indemnification by Lessee.
(a) The Lessee shall pay, and shall indemnify, protect and save harmless each
Indemnified Person from and against all liabilities, governmental charges,
losses, obligations, claims, damages, penalties, causes of action, suits, costs,
expenses (including, without limitation, reasonable attorneys’ fees and
expenses) and judgments of any nature, incurred by, imposed upon or asserted
against any Indemnified Person in any way resulting from, related to or arising
out of (i) the Operative Documents or any transaction contemplated thereby,
including, without limitation, as a result of: (1) any Indemnified Person
failing to qualify to do business in any state or becoming subject to the
ongoing regulation by a Governmental Body if such qualification or regulation
arises solely and exclusively in connection with the transaction contemplated by
the Operative Documents or (2) the contravention, violation or breach by any
Indemnified Person of any law, rule or regulation relating to motor vehicles
that solely and exclusively results from the consummation of the
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transaction contemplated by the Operative
Documents, (ii) the purchase, operation, possession, ownership, use, lease,
sublease, maintenance, overhaul, repair, alteration, storage, testing,
registration, titling or failure to title or register, of any one or more of the
Vehicles, including, but not limited to, damage or claims resulting from the
presence on or under or the escape, seepage, leakage, spillage, discharge,
emission or release from the Vehicles of any Hazardous Waste, including, without
limitation, any claims asserted or arising under any Environmental Law, (iii)
the manufacture, design, sale, purchase, acceptance, revocation of acceptance,
rejection, delivery, return or conditions of the Vehicles, (iv) the Owner
Trust’s ownership or leasing hereunder of Vehicles during the term of the Lease
and thereafter while and to the extent that Vehicles are in the possession or
control or on the premises of the Lessee, any Affiliate thereof, or any
manufacturer or dealer to whom the possession or control of Vehicles has been
granted by the Lessee or the Lessor, (v) the sale of any Vehicle either to the
Lessee or any other Person pursuant to the provisions of the Lease (including
Section 11 thereof) or the Lessee’s activity as sales agent or Remarketing
Agent, or (vi) the Nominee acting as agent pursuant to the Nominee Agreement or
otherwise; provided,
however, that
the foregoing shall not apply to any liability, charge, loss, obligation, claim,
damage, penalty, cause of action, suit, cost, expense or judgment (“Costs or
Expenses”):
(A) to the
extent required to be paid by the Owner Participant pursuant to
Section 7.1;
(B) imposed on or
against an Indemnified Person or any of its Related Indemnitees to the extent
that such Costs or Expenses arise out of or are caused by (1) the gross
negligence or willful misconduct of such Indemnified Person or any of its
Related Indemnitees (other than any such gross negligence or willful misconduct
imputed to such Indemnified Person solely by reason of its interest in the
Lessor’s Estate) or (2) the inaccuracy or breach of any representation,
warranty, covenant or any undertaking contained in this Agreement or any other
Operative Document of such Indemnified Person or any of its Related Indemnitees,
unless caused by or resulting from an inaccuracy or breach by the Lessee of any
of its representations, warranties, covenants or undertakings contained in this
Agreement or any other Operative Document (other than the Tax Indemnity
Agreement);
(C) in the
case of the Owner Participant, the Owner Trust and any of their respective
Related Indemnitees, as a result of (i) a voluntary transfer or other
voluntary disposition by the Owner Participant, the Owner Trust or a Related
Indemnitee of any Vehicle or the Lessor’s Estate or any interest in the
Operative Documents other than any such transfer which occurs following the
occurrence and during the continuance of an Event of Default or (ii) an
involuntary transfer or other involuntary disposition by the Owner Participant,
the Owner Trust or a Related Indemnitee of any Vehicle or the Lessor’s Estate or
any interest in the Operative Documents in connection with any bankruptcy or
other proceeding for the relief of debtors in which such Person is the debtor or
any foreclosure by a creditor of such Person that is in each case unrelated to
the transaction contemplated hereby;
(D) to the
extent attributable to acts or events which occur during any period (except
during the exercise of
remedies pursuant to Section 11 of the Lease following the occurrence of an
Event of Default thereunder) after the expiration or earlier termination of the
Lease Term for all Vehicles and the payment by the Lessee of all amounts due and
owing under the Operative Documents and the satisfaction by the Lessee of all
its obligations under the Lease;
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(E) to the
extent that such Costs or Expenses are Taxes or Costs
or Expenses in contesting
Taxes, it being agreed that the Lessee’s liability with respect to Taxes in all
other respects is set forth in
Section 5.2 and in the Tax Indemnity Agreement;
(F) in
the case of
the Owner Participant, the Owner Trust, the Bank and any of their respective
Related Indemnitees, that would not have arisen but for the substitution of a
successor trustee under the Trust Agreement without the consent of the
Lessee;
(G) in the
case of the Owner Participant, the Owner Trust, the Bank and any of their
respective Related Indemnitees, to the extent that such Costs or Expenses arise
from an Owner Participant’s Lien or an Owner Trust’s Lien attributable to such
Person or, in the case of the Owner Participant, from an Owner Trust’s Lien
attributable to any action or inaction by the Owner Trust or the Bank in
accordance with the written instructions of the Owner Participant, unless the
Owner Participant is required to give such instructions pursuant to the
Operative Documents;
(H) to the
extent that such Costs or Expenses constitute ordinary and usual operating or
overhead expense;
(I) to the
extent such Costs or Expenses are attributable to the authorization or giving,
or withholding, by such Indemnified Person of any future amendments,
supplements, waivers or consents with respect to this Agreement and the other
Operative Documents, other than such as have been requested by the Lessee or
Guarantor or such as are required under the Operative Documents or by applicable
law or such as the Lessee has otherwise agreed to pay hereunder;
(J) with
respect to the Owner Participant and any of its Related Indemnitees, to the
extent that such Costs or Expenses are payable by the Owner Participant or
Related Indemnitee pursuant to any provision of this Agreement or any other
Operative Document expressly without any right of reimbursement from the
Lessee or that are stated not to be paid by or the responsibility of the Lessee
or are stated to be the sole cost and expense of such Person; or
(K) with
respect to the Owner Participant and any of its Related Indemnitees, to the
extent such Costs or Expenses are incurred by the Owner Participant or Related
Indemnitee and arise from or relate to compliance with regulatory requirements
of any United States governmental authority having jurisdiction over the Owner
Participant or Related Indemnitee (i) under applicable law applicable to
its business generally and which neither the Lessee nor any of its Affiliates
has directly or indirectly initiated and in which neither the Lessee nor any of
its Affiliates has participated in any way (except in either case at the
specific request of the Owner Participant or Related Indemnitee) or
(ii) under other applicable law or in other circumstances, in each case
unless such Costs or Expenses have arisen or been imposed solely as a result of
the transactions contemplated by the Operative Documents.
If any
action, suit or proceeding arising from any such Cost or Expense (other than any
such Cost or Expense for which the Lessee is not responsible pursuant to the
terms hereof) is brought against any Indemnified Person, subject to the
provisions of paragraph (b) of this Section 5.1, the Lessee will, at its
expense, assume the defense of such action, suit or
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proceeding
through counsel designated by it, which counsel shall be reasonably acceptable
to the Owner Participant, and shall have full power to litigate, compromise or
settle the same on behalf of such Indemnified Person in its sole discretion;
provided
that (x)
the Lessee shall keep such Indemnified Person fully apprised of the status of
such action, suit or proceeding and shall provide such Indemnified Person with
all information with respect to such action, suit or proceeding as such
Indemnified Person shall reasonably request, (y) such Indemnified Person, at its
own expense, may participate in any action, suit or proceeding controlled by the
Lessee and (z) no such settlement shall include an admission of an omission or
misconduct of an Indemnified Person without the prior written consent of such
Indemnified Person. In connection with any claim for indemnification hereunder
by an Indemnified Person, such Indemnified Person shall cooperate in good faith
with the Lessee. Each Indemnified Person shall be fully indemnified against all
liabilities, costs and expenses, including attorneys’ fees and expenses,
incurred in connection with any such action, suit or proceeding. The obligations
and powers of the Lessee under this Section 5.1, together with all other
indemnification obligations of the Lessee set forth in this Participation
Agreement, shall survive any termination of this Participation Agreement, the
Lease and the other Operative Documents.
(b) Notwithstanding
anything in Section 5.1(a) to the contrary, the Lessee shall not be entitled to
control and assume, or continue, the defense of, or compromise or settle, any
action, suit or proceeding if (i) an Event of Default shall have occurred and be
continuing, and the Indemnified Person notifies the Lessee that it is no longer
permitted to control or continue such defense, (ii) such action, suit or
proceeding will involve any material danger of the sale, forfeiture or loss of,
or creation of any Lien (other than a Permitted Lien) on, a material portion of
the Lessor’s Estate, (iii) in the good faith opinion of such Indemnified Person,
there exists an actual or potential material conflict of interest such that it
is advisable for such Indemnified Person to retain control of such action, suit
or proceeding, or (iv) such claim or liability involves the possibility of
criminal sanctions or liability to such Indemnified Person. In the circumstances
described in clauses (i) through (iv), the Indemnified Person shall be entitled
to control or defend such action, suit or proceeding at the expense of the
Lessee. The Lessee may in any event participate in all such actions, suits or
proceedings at its own expense. Nothing herein contained shall be deemed to
require an Indemnified Person to contest any liability, charge, loss,
obligation, claim, damage, penalty, cause of action, suit, cost, expense or
judgment or assume control of or defend any action, suit or proceeding with
respect thereto.
5.2
General Tax Indemnity.
(a) Agreement to Indemnify. Except as provided in Section 5.2(b), the Lessee
hereby assumes liability for, and agrees to timely pay and defend, indemnify and
hold harmless each Indemnified Person from and against any and all taxes, fees,
levies and assessments, including, without limitation, all license, permit or
registration fees and all income, gross receipts, rental, franchise, excise,
business, occupational, capital, value added, sales, use, ad valorem (real and
personal), property (real and personal), excise, stamp, highway use, ton
mileage, road use, fuel or other taxes, duties, imposts, withholdings of any
nature, and charges, together with any penalties, fines, additions to tax, or
interest, imposed on or with respect to any Indemnified Person, the Lessee, any
sublessee or any other Person in possession of a Vehicle, any Vehicle or any
part thereof or interest therein, by any Governmental Body or any taxing
authority therein or thereof or any foreign government, foreign governmental
subdivision, or other foreign or international taxing authority, in connection
with, upon or in any way relating to:
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(i) the
rentals, receipts or earnings, gains or revenues arising from any Vehicle or
part thereof or any interest therein, proceeds held in Trust by the Owner Trust,
or any applications or dispositions of those rentals, receipts or
revenues;
(ii) the
imposition of any Lien (or the incurrence of any liability to refund or pay over
any amount as a result of any Lien) on any Vehicle or any interest
therein;
(iii) the
Operative Documents or any amount paid or payable under or upon or with respect
to any Operative Document;
(iv) any
Vehicle or any part thereof or any interest in any thereof;
(v) the
manufacture, acquisition, construction, installation, purchase, delivery,
ownership, lease, sublease, possession, repossession, rental, use, repair,
operation, transportation, modification, rebuilding, substitution, mortgaging,
recording, documentation, acceptance, registration, rejection, abandonment,
importation, exportation, modification, maintenance, location, financing,
reoptimization, return, sale, transfer of title, replacement, storage or
disposition of any Vehicle or any part thereof or interest therein;
or
(vi) otherwise
with respect to or in connection with any transaction contemplated by the
Operative Documents (all such items herein referred to collectively as “Taxes”
or separately as a “Tax”).
(b) Taxes
Excluded From Indemnity.
The Lessee shall have no liability for the following Taxes, which are excluded
from the indemnity provided by Section 5.2(a):
(i) any Tax
on, based on, with respect to, or measured by the net or gross income (including
gross receipts) or capital of any Indemnified Person other than the Nominee
(including any franchise or conduct of business Tax or minimum Tax for tax
preferences, but excluding any Tax in the nature of sales, property, ad valorem,
service, rental, value-added, transfer, license, excise or use Taxes) imposed by
the United States or any State or political subdivision thereof; provided, that
there shall not be excluded by this clause any amounts necessary to make any
payment on an after-tax basis;
(ii) any
withholding Tax imposed by the United States federal government;
(iii) any Tax
imposed by a foreign government or a foreign or international taxing authority
(other than any such Tax imposed as a result of (A) the location, operation or
registration of any Vehicle in such jurisdiction, (B) the organization,
activities or presence in such jurisdiction of a permanent establishment or
fixed place of business of any Lessee Person, (C) the residence, nationality or
place of management and control of any Lessee Person, (D) the payment from such
jurisdiction by any Lessee Person of any amount due under the Operative
Documents or (E) any combination of factors (A)-(D); provided that
there shall not be excluded by this clause any amounts necessary to make any
payment on an after-tax basis).
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Agreement
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(iv) any Tax
with respect to any Vehicle or any transaction relating to such Vehicle to the
extent it covers any period beginning after the later of (A) the discharge in
full of the Lessee’s obligation to pay Rent with respect to such Vehicle or (B)
the expiration or other termination of the Lease with respect to such Vehicle to
the extent not relating to events or matters arising or occurring prior to such
discharge, expiration or termination;
(v)
any Tax
to the extent and so long as it is being resisted in accordance with Section
5.2(e), during the pendency of such resistance;
(vi) any
amount of Tax to the extent that such Tax would have been imposed on an
Indemnified Person had it not engaged in activities related to the transactions
contemplated by the Operative Documents;
(vii) any Tax
that is imposed on an Indemnified Person or any of its Affiliates, to the extent
that such Tax results from the willful misconduct or gross negligence of such
Indemnified Person or such Affiliates;
(viii)
any Tax
to the extent that it is imposed as a result of a voluntary sale, transfer,
assignment, or other voluntary disposition of any Vehicle or any part thereof or
interest therein; provided,
however, that
this paragraph shall not apply in the event that such sale, transfer, assignment
or other disposition shall occur while an Event of Default shall have occurred
and be continuing or as the result of the Lessor (or the Nominee, an Owner
Participant or any separate owner trustee or additional owner trustee acting as
agent for the Lessor) exercising any rights pursuant to Section 11 of the Lease
or with respect to the Lessor (or the Nominee, an Owner Participant or any
separate owner trustee or additional owner trustee acting as agent for the
Lessor) purchasing each Vehicle on a Funding Date and entering into the Lease or
acquiring, transferring or disposing of any Vehicle pursuant to Section 11, 12,
13 or 14 of the Lease;
(ix) any Tax
that is imposed on an Indemnified Person as a result of the involuntary transfer
by such Indemnified Person of any interest in the Operative Documents or in any
Vehicle, in any such case in or pursuant to such Indemnified Person’s bankruptcy
(other than a bankruptcy of an Owner Participant or the Lessor’s Estate caused
by an Event of Default or by the failure of the Lessee to make any payment of
Rent);
(x) any Tax
that consists of penalties, fines, additions to tax, or interest resulting from
the failure of such Indemnified Person to file returns which are timely and
proper as to matters unrelated to the transactions contemplated by the Operative
Documents, or as to any return, report or statement of such Indemnified Person
for which the Lessee is neither permitted nor required to take responsibility
under Section 5.2(c), except to the extent that such Tax results from a breach
by the Lessee of its obligations under Section 5.2(c);
(xi) any Tax
that is imposed on an Indemnified Person to the extent resulting from the breach
by such Indemnified Person (or any of its Affiliates) of any of its
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representations,
warranties or covenants in any of the Operative Documents other than this
Section 5.2;
(xii) any Tax
imposed on or with respect to any Indemnified Person that acquired an interest
in the Vehicles, the Operative Documents or the entity created pursuant to the
Trust Agreement from another Indemnified Person to the extent the Lessee
demonstrates that such Tax exceeds the amount of such Tax that would have been
imposed under law in effect on the date of transfer had there been no transfer
of such an interest in the Vehicles, the Operative Documents or the entity
created pursuant to the Trust Agreement (provided,
however, that
the Lessee shall not be required to demonstrate that such Tax is in excess of
the Tax that would have been imposed had there been no transfer unless both the
transferor and transferee agree for the benefit of the Lessee in the transfer
documentation or otherwise to reasonably cooperate with the Lessee in
determining what Taxes would have been imposed absent the transfer);
provided further that
this clause (xii) shall not apply to any amounts necessary to indemnify such
Indemnified Person on an after-tax basis pursuant to Section 5.2(f) below or in
the application of the tax benefit payback provisions thereof;
(xiii)
any Tax
imposed on or with respect to any Indemnified Person as a result of an
amendment, modification, consent or waiver to (A) the Trust Agreement or (B) any
Operative Document to which such Indemnified Person is a party without the
express written consent or written acknowledgment of the Lessee, other than in
connection with an Event of Default that has occurred and is
continuing;
(xiv)
any Tax
that is imposed against an Indemnified Person because of or in connection with
(A) claims against such Indemnified Person that are unrelated to the
transactions contemplated by the Operative Documents or (B) breaches by such
Indemnified Person (or any of its Affiliates) of any of its covenants or
representations under any of the Operative Documents to which it is a
party;
(xv) any Tax
subject to the Tax Indemnity Agreement;
(xvi) any Tax
for which the Lessee has actually and fully (including amounts described in
Section 5.2(f) hereof) paid or reimbursed, in accordance with the terms of any
Operative Document, the Indemnified Person entitled to payment under this
Section 5;
(xvii) Taxes
imposed upon an Indemnified Person by reason of such Indemnified Person not
being a United States Person;
(xviii) intangibles,
stamp or similar Taxes (other than any such Taxes imposed by a state (or any
political subdivision or taxing authority thereof or therein) as a result of
(A) the Lessee being incorporated, having its principal place of business,
or conducting activities in such state, (B) any Vehicle or part thereof being
used, registered, operated or located in such state or (C) the execution or
delivery of any Operative Document in such state);
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(xix)
Taxes
imposed upon an Indemnified Person resulting from, or that would not have been
imposed but for, the existence of Owner Participant’s Liens or Owner Trustee’s
Liens attributable to such Indemnified Person;
(xx)
Taxes
imposed with respect to the requirements of Sections 6011 or 6112 of the Code
and any Regulations thereunder; and
(xxi)
any Tax
imposed on or with respect to any Indemnified Person which results from, arises
out of, or is attributable to (i) a violation of Section 4975(c)(1)(A)-(D) of
the Code or Section 406(a) of ERISA as a result of the incorrectness of any
representation or warranty of such Indemnified Person set forth in the Operative
Documents and/or (ii) a violation of such Indemnified Person of Section
4975(c)(1)(E) or (F) of the Code or Section 406(b) of ERISA.
(c) Tax
Reporting.
As of the Closing Date, the Lessee agrees to annually deliver to the Owner
Participant a report for the Lessee’s fleet of vehicles setting forth the
distribution of rental transactions by state for each year within a reasonable
time after the close of such year for so long as such information is reasonably
available to the Lessee in the ordinary course of its business. Upon written
request of an Indemnified Person, the Lessee shall provide to such Indemnified
Person such other information as may be reasonably available to the Lessee in
the ordinary course of its business to enable such Indemnified Person to fulfill
its tax filing or other information reporting requirements with respect to the
transactions contemplated by the Operative Documents.
If any
report, return, certificate or statement is required to be filed or provided to
the Lessee by an Indemnified Person with respect to any Tax which is either
subject to indemnification under this Section 5.2 or which is the subject of an
information report specific to a Vehicle or Vehicles, then if local law or
custom requires or permits the Lessee to file or provide such report, return,
certificate or statement, in its own name or as agent of an Indemnified Person
(which agency is hereby created), and unless such Tax is required to be reported
on a return in the name of such Indemnified Person or any of its Affiliates
reporting transactions other than those contemplated by the Operative Documents,
the Lessee shall either timely file such report, return, certificate or
statement showing the Lessor as owner in the appropriate capacity or notify such
Indemnified Person of any such requirement and prepare such report, return,
certificate or statement in a timely manner as shall be reasonably satisfactory
to such Indemnified Person who shall then file or provide such report, return,
certificate or statement accordingly; provided,
however, that if
an Indemnified Person has notice that a report, return, statement, or other
information is required with respect to any such Tax other than Taxes required
to be reported on a return in the name of such Indemnified Person or any of its
Affiliates reporting transactions other than those contemplated by the Operative
Documents, or that a taxing authority has made a claim for payment of such Tax,
it shall promptly so notify the Lessee, shall furnish the Lessee with copies of
the relevant portions of all written communications from any taxing authority
relating to such Tax, and shall request such taxing authority to contact the
Lessee regarding such information relating to the transactions contemplated by
the Operative Documents; provided
further,
however, that any Indemnified Person, if requested by the Lessee (or the Lessee
if requested by an Indemnified Person), shall take reasonable steps to provide
information to, consult with, and cooperate with the Lessee
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(or the Indemnified Person, as the case may be)
regarding the manner in which any report, return or statement should be filed.
For the avoidance of doubt, the parties hereto agree that the Lessee shall be
responsible for providing sales and use tax certifications and sales and use tax
registrations required with respect to any Vehicle and that each Indemnified
Person shall cooperate in such certifications and registrations as contemplated
above. The Lessee shall, to the extent permitted by law, and based as
appropriate on information supplied by the Indemnified Person, use its best
efforts to cause all communications with respect to such Taxes (other than Taxes
required to be reported on a return in the name of such Indemnified Person or
any of its Affiliates reporting transactions other than those contemplated by
the Operative Documents) to be made directly to the Lessee, either in its own
name or as agent of the Indemnified Person (which agency is hereby created). On
request, the Lessee shall furnish such proof of payment of such Tax as is
reasonably acceptable to the Indemnified Person making such request, and the
Lessee shall furnish such information as any Indemnified Person may reasonably
require to comply with the requirements of any taxing jurisdiction.
(d) Time
for Payment of Taxes.
Except when the Lessee determines to resist payment in accordance with Section
5.2(e), the Lessee shall pay all Taxes subject to indemnification under Section
5.2(a) for which it files a return under Section 5.2(c) prior to the latest time
permitted by the relevant taxing authority for timely payment. In the case of a
Tax subject to indemnification under Section 5.2(a) for which the Lessee files a
return under Section 5.2(c), when the Lessee resists payment in accordance with
Section 5.2(e), the Lessee shall pay such Tax (in the amount finally determined
to be owing in such contest) prior to the latest time permitted by the relevant
taxing authority for timely payment after a Final Adjudication (as defined
below). In the case of a Tax subject to indemnification under Section 5.2(a) for
which the Lessee does not file a return under Section 5.2(c), the Lessee shall
pay such Tax to the appropriate Indemnified Person within 15 days after a demand
that specifies in reasonable detail the payment and the facts upon which the
right to payment is based, but not prior to the later of (i) 15 days before the
due date (ignoring extensions of time) for payment of such Tax by the
Indemnified Person, and (ii) in the case of a Tax whose payment is resisted in
accordance with Section 5.2(e), a Final Adjudication (which shall mean (A) a
decision, judgment, decree or other order by any court of competent jurisdiction
that resolves the matter, which decision, judgment, decree or other order has
become final (i.e., the
earliest of when all allowable appeals have been exhausted by either party to
the action or the time for filing such appeal has expired or such Indemnified
Person has notified the Lessee in writing that it does not intend to take such
appeal, it being understood that such Indemnified Person shall not be required
to pursue such appeal), (B) a closing agreement entered into under Section 7121
of the Code (or any successor provision) or any other settlement agreement
entered into in connection with administrative or judicial proceedings, in any
case with the Lessee’s consent, or (C) the expiration of the time for
instituting an initial suit with respect to a claimed deficiency or for
instituting a claim for refund, or, if a refund claim was filed, the expiration
of the time for instituting suit with respect thereto).
(e) Resisting
Payment.
(i) Subject
to the terms of this Section 5.2(e), the Lessee may resist payment, and require
the Indemnified Person to resist payment, of Taxes for which it must indemnify
any Indemnified Person pursuant to Section 5.2(a) by appropriate administrative
or judicial proceedings conducted in accord with the Lessee’s good faith
judgment
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Agreement
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and at
the Lessee’s sole expense. In the case of any such Tax that is assessed or
proposed to be assessed directly against such Indemnified Person, such
Indemnified Person shall notify the Lessee promptly of such claim and send
copies of any notice to the Lessee. Failure by an Indemnified Person to provide
such notification shall not affect the obligation of Lessee to indemnify such
Indemnified Person unless the right to pursue a contest of such claim is
effectively precluded. If the Lessee shall so request in writing within 30 days
after the receipt of such notice, such Indemnified Person shall undertake such a
contest or request (where appropriate) the Lessee to undertake such a contest
only if no Event of Default has occurred and is continuing and (A) the Lessee
shall have agreed to indemnify such Indemnified Person for any liability or loss
it might incur as a result of such contest, provided that the Lessee will not be
bound by its acknowledgment of liability if and to the extent the contest is
ultimately resolved on a basis which demonstrates that the Lessee is not
otherwise liable under this Section 5.2 with respect to such Taxes, (B) the
Lessee agrees to pay on demand all reasonable costs and expenses that such
Indemnified Person may incur in connection with such contest, including, without
limitation, attorneys’ and accountants’ fees and expenses), (C) the Indemnified
Person reasonably determines that such contest would not create a material risk
that any Vehicle or part thereof would be sold, forfeited or lost, or that a
Lien other than a Permitted Lien would be placed on such Vehicle or part thereof
or on any other property of the Owner Participant or such Indemnified Person, or
would involve the risk of imposition of a criminal penalty, (D) the Lessee
furnishes the Indemnified Person with the written opinion of counsel, selected
by such Indemnified Person and reasonably acceptable to the Lessee, that
reasonable grounds exist for contesting such Tax (or in the case of an income
tax, that the basis in law and fact in opposition to such Tax exceeds the basis
in law and fact in favor of the Tax) and (E) if such contest is to be conducted
in a manner requiring the payment of the claim, the Lessee shall pay such claim
or advance to the Indemnified Person on an interest-free basis (or on such
interest-bearing basis as the Lessee and Indemnified Person may agree upon),
with no additional after-tax cost, an amount equal to the amount of such claim.
If the Indemnified Person undertakes such contest, such Indemnified Person shall
not be obligated to pursue any appeal from an adverse judicial determination
unless such Indemnified Person shall have received a written opinion of counsel,
selected by such Indemnified Person and reasonably acceptable to the Lessee,
that it is more likely than not that such appeal would be successful and shall
in no event be obligated to appeal to the U.S. Supreme Court.
(ii) At any
time, whether before or after commencing to take the actions set forth in this
Section 5, an Indemnified Person may decline to take action with respect to any
Tax subject to indemnification hereunder by notifying the Lessee in writing that
the Lessee is relieved of its obligation to indemnify such Indemnified Person
with respect to such Tax and by repaying to the Lessee any amounts theretofore
paid or advanced by the Lessee with respect thereto (other than the expenses of
such contest). An Indemnified Person will in good faith consult with the Lessee
and its counsel regarding the conduct of any administrative or judicial contest
and will not enter into any settlement or compromise that would give rise to an
indemnifiable Tax under this Section without the Lessee’s prior written
approval, which approval shall not be unreasonably withheld or
delayed.
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(iii) Upon a
Final Adjudication of any contest in respect of which the Lessee shall have
advanced funds to an Indemnified Person, or, if earlier, upon receipt by an
Indemnified Person of a refund or credit of any amounts paid by such Indemnified
Person based on the proposed claim and in respect of which amounts the Lessee
shall have previously advanced funds to such Indemnified Person, then, to the
extent such Final Adjudication is adverse, the Lessee shall indemnify such
Indemnified Person to the extent provided by this Participation Agreement, and
promptly after such Final Adjudication (but not before the Lessee pays such
Indemnified Person the amount required by this Section 5.2), such Indemnified
Person shall repay to the Lessee the funds advanced by the Lessee, together with
any related interest received (or saved) by such Indemnified Person as a result
of such refund or credit.
(f) After-Tax
Basis.
The indemnity amounts payable under Section 5.2(a) shall be computed on an
“after-tax” basis, so that any such indemnity payment shall be in an amount
which, when reduced by the net increase in the federal, state and local income
tax liability of the Indemnified Person as a result of the receipt of such
payment, shall equal the amount of the Tax in respect of which such indemnity is
payable. Subject to the proviso to this sentence, if an Indemnified Person
actually realizes and utilizes a tax benefit by reason of the payment of a Tax
for which it is indemnified under Section 5.2(a) (including the amount of any
value-added Tax that is recoverable by such Indemnified Person, it being agreed
that each Indemnified Person will take all such actions reasonably requested by
the Lessee to facilitate the recovery or utilization of any value-added Tax
otherwise indemnifiable hereunder), such Indemnified Person shall, unless such
benefit was taken into account in the computation of the net increase, pay the
Lessee an amount equal to the lesser of (i) the sum of (A) an amount equal to
such tax benefit, plus (B) an amount equal to any other tax benefit realized and
actually utilized by such Indemnified Person as the result of any payment made
by such Indemnified Person pursuant to this sentence, and (ii) the amount of
such payment by the Lessee to such Indemnified Person plus any other payment by
the Lessee to such Indemnified Person theretofore made pursuant to this Section
5.2 reduced by other amounts previously paid by such Indemnified Person to the
Lessee pursuant to this Section 5.2; provided,
however, that an
Indemnified Person shall not be obligated to pay any portion of such amount to
the Lessee while an Event of Default shall have occurred and is continuing, and
promptly after such Event of Default shall no longer be continuing, such
Indemnified Person shall make payment to the Lessee as though such Event of
Default had not occurred. Any disallowance of a tax benefit for which the Lessee
has received a payment under this Section 5.2(f) shall be treated as a Tax for
which the Lessee is obligated to indemnify under this Section 5.2, without
regard to Section 5.2(b) (other than clause (vii) thereof).
(g) Reimbursements
by Indemnified Persons Generally.
If, for any reason, the Lessee is required to make any payment with respect to
any Taxes imposed on any Indemnified Person in respect of the transactions
contemplated by the Operative Documents or on the Vehicles, which Taxes are not
the responsibility of the Lessee with respect to such Indemnified Person under
Sections 5.2(a) and 5.2(b) hereof or the Tax Indemnity Agreement, then such
Indemnified Person shall pay to the Lessee within 30 days of the Lessee’s demand
therefor an amount which equals the amount actually paid by the Lessee with
respect to such Taxes.
Participation
Agreement
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5.3
Further Covenants of Lessee and Guarantor. Each of the Lessee and
the Guarantor hereby covenants in favor of the Owner Trust and the Owner
Participant as follows:
(a) Notice
of Default.
It will deliver to the Owner Trust and the Owner Participant promptly upon
acquiring actual knowledge of the occurrence of any Event of Default or Default,
written notice specifying the nature and period of existence thereof and what
action it is taking or proposes to take with respect thereto.
(b) Financial
Information.
The Guarantor will deliver to the Owner Participant and the Owner Trust: (i) to
the extent not readily available on the XXXXX website, xxxx://xxx.xxx.xxx/xxxxx.xxxxx, copies
of all annual and quarterly reports sent by the Guarantor to its stockholders;
(ii) to the extent not readily available on the XXXXX website, xxxx://xxx.xxx.xxx/xxxxx.xxxxx, copies
of all regular and periodic reports required to be filed by the Guarantor with
the Securities and Exchange Commission with respect to its securities
outstanding or to be outstanding; (iii) to the extent not readily available on
the XXXXX website, xxxx://xxx.xxx.xxx/xxxxx.xxxxx, but in
no event less than fifty-five (55) days after the end of each of the first three
fiscal quarters of each fiscal year, the consolidated balance sheets and income
statements of the Guarantor, together with consolidated statements of cash flows
of the Guarantor for that quarter, all prepared by the Guarantor in conformity
with generally accepted accounting principles; (iv) to the extent not readily
available on the XXXXX website, xxxx://xxx.xxx.xxx/xxxxx.xxxxx, but in
no event less than one hundred twenty (120) days after the close of each fiscal
year, a copy of the annual consolidated financial statements of the Guarantor,
consisting of consolidated balance sheets and income statements and consolidated
statements of cash flows of the Guarantor, which shall be prepared in accordance
with GAAP and certified (as to such consolidated financial statements) by any
firm of independent certified public accountants (which shall be of national
standing) regularly retained by the Guarantor; (v) not less than one hundred and
twenty (120) days after the close of each fiscal year, the certification of the
Guarantor’s chief executive officer, chief financial officer or treasurer, that
the consolidated financial statements referred to in clause (iv) above were
prepared in conformity with GAAP and that no Event of Default exists or, if an
Event of Default shall exist, specifying the nature and status thereof; and (vi)
such other information and data with respect to the Guarantor as may reasonably
be requested by the Owner Participant or the Owner Trust for the purpose of
facilitating an evaluation of the credit of the Guarantor or compliance with the
provisions of the Operative Documents.
(c) Further
Information.
Lessee shall deliver to the Owner Participant and the Owner Trust with all
reasonable promptness following request therefor (i) any information regarding
the Vehicles which it or any of its Affiliates either possesses or can acquire
without unreasonable effort or expense and (ii) all information within its
control that may be reasonably requested by such Person to enable such Person to
file any reports required to be filed by it with any Governmental Body as a
result of the transactions contemplated hereby and by the other Operative
Documents.
5.4
Merger,
Consolidation, Sale.
Lessee shall not permit or effect any consolidation of Lessee with, or merger or
liquidation (as part of a business reorganization or restructuring) of Lessee
into, any other corporation or other entity (whether or not affiliated with
Lessee), any other business combination or association involving Lessee, or
successive
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Agreement
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consolidations, mergers, liquidations (as a part of a
business reorganization or restructuring) or other business combinations or
associations to which Lessee or its successor or successors shall be a party or
parties, or any sale or conveyance of the property of Lessee as an entirety or
substantially as an entirety to any other corporation or entity (whether or not
affiliated with Lessee) authorized to acquire and operate the same unless the
following conditions are satisfied: upon any such consolidation, merger,
liquidation, business combination or association, sale or conveyance, (i) the
due and punctual performance of all of the obligations of Lessee under the
Operative Documents to which it is a party shall be assumed in writing by the
corporation or other entity formed by such consolidation, or into which Lessee
shall have been merged or liquidated, or which shall have resulted from such
business combination or association, or which shall have acquired such property
(the “Surviving Entity”); (ii) either (A) the Surviving Entity shall be a
Qualified Entity or shall have all of its obligations under the Operative
Documents guaranteed by a Qualified Entity pursuant to a guaranty substantially
similar to the Guaranty or letter of credit or other form of collateral in
acceptable form to the Owner Participant, or (B) the Guaranty shall remain in
full force and effect with respect to the obligations of the Surviving Entity
under the Lease and each other Operative Document to which the Lessee had been a
party and the Guarantor shall deliver a written confirmation with respect to the
Guaranty; (iii) after giving effect to the transaction, no Event of Default or
Default shall exist; (iv) the Lessee will, if requested by the Owner
Participant, deliver to the Owner Participant an opinion or opinions of White
& Case LLP and, with respect to general corporate matters, internal counsel
to the Surviving Entity and/or successor guarantor, or any other counsel
reasonably acceptable to the Owner Participant (which opinion or opinions shall
be delivered prior to or simultaneously with the consummation of the
transaction), stating that the Surviving Entity and/or successor guarantor is
duly organized under the laws of the state or other jurisdiction of its
organization, that each such assumption agreement, new guarantee and/or
collateral agreement is duly authorized, executed and delivered and is
enforceable in accordance with its terms, that no violation of law applicable to
or binding on the Surviving Entity will result from the Surviving Entity’s
and/or successor guarantor’s being party to such assumption agreement, new
guarantee and/or collateral agreement and the Operative Documents (to the extent
provided in such assumption agreement), and that, to the extent the Guaranty is
to continue in compliance with the terms of clause (ii)(B) above, the Guaranty
has been modified to apply to the obligations of the Surviving Entity under the
Lease and other Operative Documents and that, as modified, the Guaranty is
enforceable in accordance with its terms (subject, in each case, to customary
exceptions and qualifications), and if the Surviving Entity and/or successor
Guarantor is not a United States entity, such opinions of counsel in the country
in which the Surviving Entity and/or successor Guarantor is domiciled as are
customarily required by the Owner Participant; (v) all filings and notices shall
have been made so as to perfect the interests of the Lessor and Owner
Participant in any collateral delivered pursuant to clause (ii) above, together
with satisfactory legal opinions regarding the creation and perfection of any
security interests in such collateral; and (vi) the Owner Participant shall have
received reasonably satisfactory certificates of the Surviving Entity and/or the
new guarantor with respect to incumbency, due organization, due authorization,
the representations and warranties described herein and absence of defaults. The
Lessee shall provide not less than 20 days’ prior written notice of any
transaction of the kind described in this Section 5.4 to the Lessor and the
Owner Participant which notice shall include information with respect to any
Qualified Entity which is proposed to be the Surviving Entity or a guarantor of
the Surviving Entity. Upon any such consolidation, merger or liquidation (as
part
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of a business reorganization or restructuring), or
such other business combination or association, or any sale, conveyance,
transfer or lease of substantially all the assets of the Lessee in accordance
with this Section 5.4, the Surviving Entity shall succeed to, and be substituted
for, and may exercise every right and power of, the Lessee under the Lease, and
the other Operative Documents to which the Lessee is a party.
|
SECTION
6. |
SURVIVAL
AND EFFECT OF WARRANTIES, AGREEMENTS AND
INDEMNITIES |
6.1
Survival of Agreements, Representations, Warranties and
Indemnities.
The agreements, covenants, representations, warranties and indemnities of the
parties hereto contained in this Participation Agreement and in the other
Operative Documents, and the obligations of each party in respect thereof, are
expressly made for the benefit of, and all claims of Indemnified Persons or the
Lessee, whether arising or asserted before or after expiration or termination of
the Lease, shall be enforceable by, the Indemnified Persons or the Lessee, as
the case may be, and shall survive (a) the making of the investments by the
Owner Participant; (b) the taking of title to the Vehicles by the Owner Trust or
the Nominee, acting on the Owner Trust’s behalf, and the leasing thereof to the
Lessee; (c) any investigation, statement as to the results thereof or other
action taken by or on behalf of any Indemnified Person or the Lessee; (d) the
expiration or other termination of this Participation Agreement or any other
Operative Document in accordance with the terms hereof or thereof and any waiver
of compliance with any of the terms, provisions or conditions hereof or thereof;
(e) the exercise of any remedies by the Owner Trust under the Lease or any other
Operative Document, and (f) the transfer of the Owner Participant’s or the Owner
Trust’s interest in the Lessor’s Estate, the Vehicles or the trust established
pursuant to the Trust Agreement.
6.2 Effect
of Other Indemnities.
Each of the Lessee’s obligations under the indemnities provided for in this
Participation Agreement shall be those of a primary obligor whether or not the
Indemnified Person shall also be indemnified with respect to the same matter
under the terms of the Lease or any other Operative Document, or any other
insurance, document or instrument whether or not related to the transactions
contemplated hereby, and the Person so seeking indemnification from the Lessee
may proceed directly against the Lessee without first seeking to enforce any
other right of indemnification and such Person shall thereafter, at the Lessee’s
expense, take whatever reasonable steps as the Lessee may reasonably request to
protect and preserve whatever rights of subrogation the Lessee may
have.
|
SECTION
7. |
7.1
Lessor’s Transaction Costs.
If the Closing Date shall occur as contemplated hereby, the Owner Participant
agrees to pay on each Funding Date, Lessor’s Transaction Costs in an aggregate
amount not to exceed the Transaction Cost Maximum. Such payment shall be made
promptly upon receipt of invoices with respect to such Transaction Costs,
subject to the approval thereof by the Lessee, such approval not to be
unreasonably withheld or delayed; provided, that to
the extent that invoices have been submitted, the Lessor’s Transaction Costs
indicated on Schedule V hereto shall be paid first and, thereafter, any
remaining Lessor’s Transaction Costs shall be paid to invoicing parties on a pro
rata basis with all other invoices in respect of Lessor’s Transaction Costs
which are due and remain unpaid as of such Funding Date.
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Agreement
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7.2
Lessee’s Transaction Costs.
The Lessee agrees to pay all Transaction Costs for which the Owner Participant
is not responsible pursuant to Section 7.1, including Lessor’s Transaction Costs
in excess of the Transaction Cost Maximum, promptly upon receipt of invoices
with respect thereto. The Lessee shall also pay (a) costs and fees incurred in
connection with the organization and incorporation of the Nominee and with the
qualification (and the maintenance of such qualification) of the Nominee to do
business in each jurisdiction in which the Nominee shall be required to perform
its obligations under or as contemplated by the Operative Documents; (b) all
reasonable out-of-pocket costs and expenses of the Owner Trust, the Owner
Trustee and the Owner Participant in connection with the enforcement of this
Participation Agreement and the other Operative Documents and the documents and
instruments referred to herein and therein (including, without limitation, the
reasonable fees and disbursements of their counsel); (c) all reasonable fees and
out-of-pocket costs and expenses incurred by the Owner Trust and the Owner
Trustee in the establishment and maintenance of the trust pursuant to the Trust
Agreement; (d) all reasonable out-of-pocket costs and expenses of the Nominee
Trustee, the Owner Trust, the Owner Trustee and the Nominee (including
reasonable legal fees and expenses) incurred by it in connection with (i) the
entering into, or giving or withholding, of any amendments, supplements, waivers
or consents proposed by the Lessee or the Guarantor with respect to the
Operative Documents and (ii) complying with any further assurances requested
pursuant to the Operative Documents.
|
SECTION
8. |
Unless
otherwise expressly specified or permitted by the terms hereof, all notices,
requests, demands, authorizations, directions, consents, waivers or documents
provided or permitted by this Participation Agreement or any Operative Document
to be made, given, furnished or filed shall be in writing, by overnight courier,
or by confirmed telecopy and addressed to the addresses and for the attention of
the person set forth opposite such party’s name on Schedule III. Whenever any
notice in writing is required to be given by one party to any other party, such
notice shall be deemed given and such requirement satisfied when such notice is
received. Any party hereto may change the address to which notices to such party
will be sent by giving notice of such change to the other parties to this
Participation Agreement.
| SECTION 9. |
9.1
Transfers by Owner Participant.
The Owner Participant shall not assign, convey or otherwise transfer all or any
portion of its right, title or interest in, to or under any of the Operative
Documents or its interest in the trust created by the Trust Agreement without
the prior written consent of the Lessee except as expressly permitted by this
Section 9.1.
(a) Transfers
to Affiliates.
Subject to the satisfaction of the conditions set forth in this Section
9.1, the Owner Participant may make an assignment, conveyance or transfer of its
interest in the trust created by the Trust Agreement to any Affiliate of the
Owner Participant if such transferee shall have a tangible net worth not less
than $75,000,000, or such transferee’s obligations under the Operative Documents
shall have been unconditionally guaranteed by the Owner Participant pursuant to
an instrument in form and substance reasonably satisfactory to the Lessee and
the Owner Trustee; provided, that in
no event shall (1) any transfer result in there being more than the Maximum
Number of Owner Participants hereunder or (2)
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Agreement
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any of the Vehicles subject to a Lease
Supplement become owned, directly or indirectly, by more than one Owner
Participant through the trust created by the Trust Agreement.
(b) Transfers
to Non-Affiliates.
Subject to the satisfaction of the conditions set forth in this Section 9.1, the
Owner Participant may make an assignment, conveyance or transfer of its interest
in the trust created by the Trust Agreement to any corporation or financial
institution which does not qualify as a transferee under the preceding paragraph
(a); provided that (x)
if and so long as no Event of Default shall have occurred and be continuing (i)
such corporation or financial institution has a tangible net worth of at least
$75,000,000 or (ii) such transferee entity’s obligations under the Operative
Documents shall have been unconditionally guaranteed by a corporation or
financial institution having a tangible net worth of at least $75,000,000 by an
instrument in form and substance reasonably satisfactory to the Lessee and the
Owner Trustee and (y) the provisions of Section 9.1(d) through (h) are satisfied
with respect to such transfer; provided, that in
no event shall (1) any transfer result in there being more than the Maximum
Number of Owner Participants hereunder or (2) any of the Vehicles subject to a
Lease Supplement become owned, directly or indirectly, by more than one Owner
Participant through the trust created by the Trust Agreement.
(c) Transfer
With Consent.
Any transfer other than one satisfying the requirements set forth in paragraph
(a) or (b) of this Section 9.1 may only be made with the prior written consent
of the Lessee, which consent may not be unreasonably withheld or
delayed.
(d) Required
Notice and Effective Date.
If the Owner Participant shall propose to make a transfer it shall give written
notice of such proposed transfer to the parties hereto at least fifteen (15)
days in the case of any transfer pursuant to paragraph (b) of this Section 9.1
(or five (5) Business Days in the case of any transfer pursuant to paragraph (a)
of this Section 9.1) prior to such proposed transfer, setting forth the name of
such proposed transferee, the percentage or interest to be retained by the Owner
Participant, if any, and the date on which such transfer is proposed to become
effective. All reasonable out-of-pocket costs incurred by the Lessee, the Owner
Trustee or the Owner Trust in connection with any disposition by the Owner
Participant under this Section 9.1 shall be borne by the Owner Participant. In
the event of a transfer under this Section 9.1, any expenses incurred by the
transferee in connection with its review of the Operative Documents and its
investigation of the transactions contemplated thereby shall be borne by such
transferee or the Owner Participant and shall not be considered costs and
expenses which the Lessee is obligated to pay or reimburse under Section
7.2.
(e) Assumption
of Obligations.
Any transferee pursuant to this Section 9.1 shall assume and agree in writing to
be bound by all obligations (whether or not yet accrued) under and become a
party to this Participation Agreement and all other Operative Documents to which
its transferor was a party, and thereupon the obligations of the Owner
Participant under the Operative Documents shall be released and reduced to the
extent of such transfer, provided
that the
transferor Owner Participant shall not be released from the obligation to remove
all Owner Participant’s Liens attributable to it. Any such transferee will, if
requested by the Lessee, deliver to the Lessee, the Bank and the Guarantor an
opinion or opinions of counsel as may be requested by the Lessee and in form and
substance reasonably satisfactory to the Lessee (which opinion or opinions shall
be delivered prior to or simultaneously with the consummation of the transaction
and be subject to customary qualifications) stating that such transferee and
other
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Agreement
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party to
an assumption instrument is duly organized under the laws of the state or other
jurisdiction of its organization, that each of the assumption instrument and any
guarantee delivered pursuant to this Section 9 is duly authorized, executed and
delivered by the parties thereto and is enforceable in accordance with its
terms, and that no violation of law applicable to or binding on such transferee
or any guarantor will result from such transferee’s or guarantor’s being party
to such assumption instrument or guarantee and the Operative Documents (to the
extent provided in such assumption instrument). Upon any such transfer as above
provided, the transferee shall be deemed the “Owner Participant” for all
purposes of the Operative Documents and shall be deemed to have made the
payments pursuant to Section 2.1 previously made by the transferor represented
by the interest being conveyed; and each reference herein and in the other
Operative Documents to the “Owner Participant” shall thereafter be deemed a
reference to the transferee for all purposes; provided,
however, that in
no event shall the Lessee’s obligations under the Operative Documents be more
burdensome or costly in any material respect than they would have been but for
such transfer. Upon any such transfer, the Owner Participant shall deliver to
the Owner Trust and the Lessee, new Schedules I and III, revised to reflect the
relevant information for such new Owner Participant.
(f) [Reserved].
(g) Representations
and Warranties.
Notwithstanding anything to the contrary set forth above, the Owner Participant
may not assign, convey or transfer its interest to any Person, unless such
Person shall have delivered to the Owner Trust and the Lessee a certificate
confirming the accuracy in all material respects of the representations and
warranties set forth in Section 4.2 with respect to such Person (other than as
such representation or warranty relates to the execution and delivery of
Operative Documents).
(h) Competitors.
Notwithstanding anything in this Participation Agreement to the contrary, except
in connection with a transfer pursuant to Section 9.1(c), under no circumstances
shall the Owner Participant transfer all or any portion of its right, title or
interest in, to or under any of the Operative Documents or its interest in the
trust created by the Trust Agreement to any Person who, in the good faith
judgment of the Lessee or the Guarantor, is a direct competitor of the Lessee or
any Affiliate thereof engaged primarily in the car or truck rental business
(other than any assignee who is engaged in such business solely as lessor,
similar to the position of Owner Trust under the Lease), or has an Adverse
Business Relationship with the Guarantor, the Lessee or any Affiliate thereof or
which is an Affiliate (or any entity of which such Person, or any of its
Affiliates, owns, directly or indirectly, 5% or more of the voting stock) of
such a competitor.
9.2
Transfers by Owner Trust.
The Owner Trust shall not, and the Owner Participant shall not permit the Owner
Trust to, without the prior written consent of the Lessee, assign, convey or
otherwise transfer all or any part of its right, title or interest under the
Operative Documents or its interest in the Lessor’s Estate except as permitted
by the Lease, provided
that,
anything herein to the contrary notwithstanding, a successor or additional Owner
Trustee may be appointed pursuant to Section 9.1 of the Trust Agreement if such
successor Owner Trustee is not a Person with whom, in the good faith judgment of
the Lessee or the Guarantor, the Lessee or the Guarantor has an Adverse Business
Relationship.
Participation
Agreement
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|
SECTION
10. |
CERTAIN
COVENANTS OF OWNER TRUST AND OWNER
PARTICIPANT |
10.1
Certain Covenants of Owner Participant.
The Owner Participant agrees with the Lessee and the Owner Trust that (i) except
as specifically provided in Article VIII of the Trust Agreement, the Owner
Participant will not terminate or revoke the trust created by the Trust
Agreement during the term of the Lease and will not pledge, assign or otherwise
transfer all or any portion of its right, title and interest in, to or under the
Trust Agreement or such trust except in accordance with Section 9; (ii) the
Owner Participant will not, directly or indirectly, create or suffer or permit
to be created or to exist any Owner Participant’s Lien (and it will promptly
remove, discharge or bond or cause to be removed, discharged or bonded, at its
own expense any such Lien); (iii) the Owner Participant will not instruct the
Owner Trustee to take any action, on behalf of the Owner Trust, or make any
omission which would constitute a breach of any of the Owner Trust’s obligations
under the Operative Documents, and the Owner Participant shall provide the Owner
Trustee with such instructions and confirmations as the Owner Trustee may from
time to time request in order to authorize the Owner Trustee (or to confirm its
authority) to take or refrain from taking actions, on behalf of the Owner Trust,
as required under the Operative Documents (it being understood that nothing in
this clause (iii) shall be deemed to condition the Owner Trust’s obligations
under the Operative Documents).
10.2
No Creation of Owner Trustee’s Liens by the
Bank.
The Bank agrees that it will not, directly or indirectly, create or suffer or
permit to be created or to exist and that it will, at its own expense, promptly
remove, discharge or bond or cause to be removed, discharged or bonded any Owner
Trustee’s Liens attributable to it in its individual capacity. The obligations
of the Bank under this Section 10.2 with respect to any Lien resulting from a
claim arising prior to the termination of the Lease shall survive such
termination.
|
SECTION
11. |
(a) The Owner
Participant and the Owner Trust each agrees that it will maintain, and cause its
Affiliates to maintain, the confidentiality of any written information
identified as confidential (provided that any of the pricing information
provided in connection with the transaction contemplated by the Operative
Documents shall be deemed confidential) provided by the Lessee, the Guarantor or
any Affiliate thereof (whether such information is provided in connection with
any provision of this Participation Agreement or any other Operative Document),
including the provisions of the Operative Documents which are specific to the
Lessee’s or the Guarantor’s business and any information contained in any
appraisal conducted pursuant to the Operative Documents (all of the foregoing,
the “Protected Information”), so long as the Protected Information is not or
does not become publicly available and is not otherwise provided to such Person
by or on behalf of the Lessee, the Guarantor or any Affiliate thereof on a
nonconfidential basis or by any other Person; provided,
however, that
the Owner Participant or the Owner Trust may disclose the Protected Information
(a) to any Affiliate or employee, (b) to its lawyers, accountants and financial,
insurance and other independent advisors so long as the individuals principally
responsible for the matter for which such information was disclosed are advised
of the confidential nature of the Protected Information and requested to observe
the provisions of this Section 11, (c) if, in its reasonable opinion, such
disclosure is necessary under applicable law or under any order of a
Governmental Body, or pursuant to a requirement of any
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Agreement
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taxing agency, or under the rules and regulations of
any national securities exchange on which the shares of the Owner Participant or
the Owner Trustee are listed or required by bank regulatory, other
administrative officials or the National Association of Insurance Commissioners
in connection with the exercise of their regulatory or administrative powers,
(d) in connection with the exercise of its rights and remedies hereunder and
under the Lease if an Event of Default shall have occurred and be continuing,
(e) if it has provided ten (10) days prior written notice to the Lessee, to
prospective transferees pursuant to Section 9 if such Persons agree, in a
writing delivered to the Lessee, to be bound by the provisions of this Section
11 (provided that no advance notice to the Lessee shall be required for the
disclosure of pricing information provided in connection with the transaction
contemplated by the Operative Documents otherwise deemed confidential for
purposes of this paragraph so long as the prospective transferee has agreed to
keep such information confidential), (f) in response to any subpoena or other
legal process and (g) as otherwise required by any Operative
Document.
(b) Notwithstanding
anything contained in this Participation Agreement or in any other document,
agreement or understanding relating to the transactions contemplated by this
Participation Agreement, each party (and each employee, representative, or other
agent of such party) is authorized to disclose to any and all persons, beginning
immediately upon commencement of discussions regarding the transactions
contemplated by this Participation Agreement, and without limitation of any
kind, the U.S. federal, state or local tax treatment and tax structure of such
transactions, and all materials of any kind (including opinions or other tax
analyses) that are provided to such party (or any employee, representative, or
other agent of such party) relating to such tax treatment and tax
structure. For
purposes of this authorization, the “tax treatment” of a transaction means the
purported or claimed tax treatment of the transaction, and the “tax structure”
of a transaction means any fact that may be relevant to understanding the
purported or claimed tax treatment of the transaction. None of the parties to
the transactions contemplated by this Participation Agreement provides U.S.
tax
advice, and each party should consult its own advisors regarding its
participation in the transactions
contemplated by this Participation Agreement.
(a) Each
party to this Participation Agreement expressly agrees that, notwithstanding any
other provision of any of the Operative Documents, so long as no Event of
Default shall have occurred and be continuing, it will not take or cause or
authorize any other Person to take any affirmative action to prevent the Lessee
from having quiet and peaceable possession and enjoyment of each Vehicle during
the Lease Term except in accordance with the provisions of the
Lease.
(b) Each of
the Lessee, the Owner Participant and the Owner Trust expressly agree (i) that
for United States federal, state and local income tax purposes, the Owner
Participant is intended to be the owner of all Vehicles and the Lessee is
intended to be the lessee thereof and (ii) that it will not take any position
inconsistent with the foregoing clause (i) in any federal, state or local tax
return, filing or proceeding.
Participation
Agreement
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| SECTION 13. |
(a) Entire
Agreement.
This Participation Agreement and the other Operative Documents express the
entire understanding of the parties relating to the subject matter hereof and
thereof; all prior understandings, written or oral, with respect to such subject
matter are hereby merged herein and superseded.
(b) Severability.
If any provision of an Operative Document, or the application thereof to any
Person or circumstance, shall, for any reason or to any extent, be invalid or
unenforceable, such invalidity or unenforceability shall not in any manner
affect or render invalid or unenforceable the remainder of such or any other
Operative Document, and the application of that provision to other Persons or
circumstances or in other jurisdictions shall not be affected.
(c) Successors
and Assigns.
Subject to Section 9, the terms and provisions of the Operative Documents
shall be binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns except that no party hereto may
assign its rights under this Participation Agreement or any other Operative
Document except as expressly provided herein or therein.
(d) Counterparts.
This Participation Agreement and any amendment, modification, waiver or
supplement hereto may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original
for all purposes, but all such counterparts shall together constitute but one
and the same instrument.
(e) Construction.
The section and paragraph headings in this Participation Agreement and the table
of contents hereof are for convenience of reference only and shall neither be
deemed to be a part of this Participation Agreement nor modify, define, expand
or limit any of the terms or provisions hereof. All references herein to
numbered or lettered sections, appendices, schedules and exhibits, unless
otherwise indicated, are to sections, appendices, schedules and exhibits to this
Participation Agreement. Words and definitions in the singular shall be read and
construed as though in the plural and vice
versa, and
words in the masculine, neuter or feminine gender shall also be read and
construed as though in either of the other genders.
(i) This
Participation Agreement and the other Operative Documents to which the Owner
Trust is a party are, except as expressly provided herein or therein, being
entered into by the Bank not individually but as the Owner Trustee under the
Trust Agreement, in exercise of the power and authority conferred upon and
invested in the Owner Trustee by the Trust Agreement and this Participation
Agreement, and it is expressly understood and agreed that nothing in this
Participation Agreement or such other Operative Documents shall be construed as
creating any liability (other than for willful misconduct or gross negligence)
of the Bank individually to pay any sum or to perform any covenant, either
express or implied, in this Participation Agreement or such other Operative
Documents (all such liability, if any, being expressly waived by
the
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Agreement
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parties
hereto) and that each party hereto, on behalf of itself and its successors and
assigns, agrees in the case of any liability of the Bank hereunder or thereunder
(except for such liability attributable to its willful misconduct or gross
negligence) that it will look solely to the assets of the Lessor’s Estate and of
the trust created by the Trust Agreement; provided,
however, that
the Bank in its individual capacity shall in any event be liable with respect to
(A) the removal of the Lessor’s Liens resulting from claims against or acts or
breaches by the Owner Trustee in each case in its individual capacity or
involving its gross negligence or willful misconduct or (B) breaches of Section
4.3 in its individual capacity and as provided in Section 18.10 of the Lease;
provided
further, that
the foregoing exculpations of the Owner Trustee shall not be deemed to be
exculpations of any other Person.
(ii) The
Lessee and the Owner Participant are entitled to presume, without any inquiry,
and without regard to their knowledge of the contents of the Trust Agreement,
that the Owner Trustee has the authority to take any action purportedly taken in
its capacity as the Owner Trustee, unless and until the Owner Participant
notifies such Person that it has instructed the Owner Trustee not to take such
action (in which case such Persons shall be entitled to presume, without any
inquiry, that the Owner Trustee lacks such authority with respect to such action
unless and until notified to the contrary by the Owner Participant); it being
understood that in the event that the Owner Trustee takes any action as to which
any such Person is entitled to assume the Owner Trustee’s authority, but as to
which the Owner Trustee lacks actual authority, the Owner Participant’s sole
recourse shall be to the Owner Trustee, and such lack of actual authority shall
not affect the rights and interests of the Lessee and the Owner Participant. Any
obligations of the Owner Trustee may be performed on its behalf by the Owner
Participant and such performance shall not be construed as a revocation of the
trust created by the Trust Agreement. Neither the Owner Trustee nor the Owner
Participant shall have any obligation or duty to the Lessee or to others with
respect to the transactions contemplated hereby, except those obligations or
duties expressly set forth in this Participation Agreement and the other
Operative Documents; and (i) the Owner Trustee shall not be liable for
performance by the Owner Participant of its obligations or duties hereunder,
(ii) the Owner Participant shall not be liable for performance by the Owner
Trustee of its obligations or duties hereunder, and (iii) neither the Owner
Trustee nor the Owner Participant shall be liable for performance by the Lessee
or the Guarantor of such party’s obligations or duties hereunder. Without
limiting the generality of the foregoing, under no circumstances whatsoever
shall the Owner Participant be liable to the Lessee for any action or inaction
on the part of the Owner Trustee in connection with the transactions
contemplated herein or in any other Operative Document, whether or not such
action or inaction is caused by willful misconduct or negligence of the Owner
Trustee.
(g) Further
Assurances.
Each of the parties hereto agrees to take all such further action, and to
execute and deliver all such further documents or instruments as any other party
hereto may reasonably request in order to carry out the intent of this
Participation Agreement and the other Operative Documents and to consummate the
transactions contemplated hereby and thereby.
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Agreement
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(h) Governing
Law.
This Participation Agreement shall be governed by, construed and enforced in all
respects in accordance with the law of the State of New York.
(i) Mandatory
Counterclaims. I f the
Lessee or the Guarantor refrains, as required by the Operative Documents, from
asserting a claim against the Owner Trust or the Owner Participant in an action
in which, under applicable law, such claim would have been a mandatory
counterclaim, the other parties to this Participation Agreement agree that the
Lessee or the Guarantor shall not be deemed to have waived such claim (if
asserted in an independent action) by virtue of its not having been asserted as
a counterclaim.
(j) Amendment
or Waiver.
Neither this Participation Agreement nor any other Operative Document nor
any terms hereof or thereof may be changed, waived, discharged or terminated
unless such change, waiver, discharge or termination is in writing signed by the
parties hereto.
(k) Variations
on Schedule.
Each of the parties hereto agree that Schedule
VI hereto
contains certain terms and conditions applicable to this Agreement and the other
Operative Documents which have been agreed by the parties hereto. To the extent
that such terms and conditions are different from, or in conflict with, other
terms and conditions of the Operative Documents, the terms and conditions
indicated on Schedule
VI shall
control.
(l) Forum
Selection and Consent to Jurisdiction.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE PARTIES
HERETO SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF
NEW YORK LOCATED IN NEW YORK COUNTY OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED,
HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY VEHICLE OR OTHER PROPERTY MAY BE
BROUGHT, AT THE OWNER TRUST’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE
SUCH VEHICLE OR OTHER PROPERTY MAY BE FOUND OR REGISTERED OR TITLED. THE LESSEE
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT 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. THE LESSEE 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. THE
LESSEE HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT 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 THE LESSEE HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT
Participation
Agreement
-36-
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, THE LESSEE HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE
OTHER OPERATIVE DOCUMENTS.
(m) Waiver
of Jury Trial.
THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER OPERATIVE DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THE
LESSEE ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER
OPERATIVE DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE OWNER TRUST’S AND THE OWNER PARTICIPANT’S ENTERING INTO THIS
AGREEMENT AND EACH SUCH OTHER OPERATIVE DOCUMENT.
Participation
Agreement
-37-
|
BUDGET
RENT A CAR SYSTEM, INC., as Lessee | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
|
XXXX
XXXXX Xx. 0000-[ ], by Wilmington Trust Company, not in its individual
capacity but solely as trustee under the Trust Agreement (BRAC Trust No.
2005-[ ]) | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
|
WILMINGTON
TRUST COMPANY, in its individual capacity only to the extent expressly
stated herein and otherwise solely in its capacity as Owner Trustee under
the Trust Agreement (BRAC Trust No. 2005-[ ]), | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
|
CENDANT
CORPORATION, as Guarantor | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
|
[OWNER
PARTICIPANT], as Owner Participant | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
Participation
Agreement
-38-
|
SCHEDULE
I | |
|
to | |
|
Participation
Agreement |
SCHEDULE
OF ACCOUNTS
|
Lessee |
|
|
Bank
Name: |
|
|
ABA
Number: |
|
|
Account
Name: |
Budget
Rent A Car System, Inc. |
|
Account
Number: |
|
|
Owner
Trust |
|
|
Bank
Name: |
Wilmington
Trust Company |
|
ABA
Number: |
|
|
Account
Name: |
BRAC
Trust No. 2005-[ ] |
|
Account
Number: |
|
|
Attention:
Xxxx Xxxxxxx | |
|
Owner
Participant |
|
|
Bank
Name: |
|
|
ABA
Number: |
|
|
Acct
Name: |
|
|
Acct
Number: |
|
|
Ref: |
|
Participation
Agreement
|
SCHEDULE
II | |
|
to | |
|
Participation
Agreement |
|
1. |
Uniform
Commercial Code filings naming Lessee as debtor and Owner Trust as secured
party in the following jurisdictions: |
|
a) |
State
of Delaware, Secretary of State |
Participation
Agreement
|
SCHEDULE
III | |
|
to | |
|
Participation
Agreement |
PARTIES
Lessee
Budget
Rent A Car System, Inc.
0 Xxxxxx
Xxx
Xxxxxxxxxx,
XX 00000
Attention:
President
Telecopier
No.: (000) 000-0000
Telephone
No.: (000) 000-0000
Owner
Trust
BRAC
Trust No. 2005-[ ]
c/o
Wilmington Trust Company
Xxxxxx
Square North
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000-0000
Attention:
Corporate Trust Administration
Telecopier
No. (000) 000-0000
Telephone
No. (000) 000-0000
Owner
Trustee
Wilmington
Trust Company
Xxxxxx
Square North
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000-0000
Attention:
Corporate Trust Administration
Telecopier
No. (000) 000-0000
Telephone
No. (000) 000-0000
Nominee
Budget
Truck Trust I
c/o
Wilmington Trust Company
Xxxxxx
Square North
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000-0000
Attention:
Corporate Trust Administration
Telecopier
No. (000) 000-0000
Telephone
No. (000) 000-0000
Participation
Agreement
SCHEDULE
III
Page
2
Guarantor
Cendant
Corporation
0 Xxxxxx
Xxxxx
Xxxxxxxxxx,
XX 00000
Attention:
Treasurer
Telecopier
No.: (000) 000-0000
Telephone
No.: (000) 000-0000
Owner
Participant
Participation
Agreement
|
SCHEDULE
IV | |
|
to | |
|
Participation
Agreement |
ELIGIBLE
VEHICLES
|
Count |
Truck
Completion Date |
Make |
Vehicle
Type |
Model |
VIN
Number |
Unit
Number |
Box
Length |
Chassis
PO Number |
Purchase
Price |
Participation
Agreement
|
SCHEDULE
V |
TRANSACTION
COSTS
Wilmington
Trust Company
Xxxxxxxx,
Xxxxxx & Finger, P.A.
Xxxxxxxx
& Xxxxxxx, Inc.
Xxxxxx
Xxxx & Priest LLP
Participation
Agreement
|
SCHEDULE
VI |
VARIATIONS
Participation
Agreement
|
EXHIBIT
A | |
|
to | |
|
Participation
Agreement |
FORM OF
SECTION 3.1(a)(ii)
OFFICER’S
CERTIFICATE
The
undersigned, ______________, the ______________ of BUDGET RENT A CAR SYSTEM,
INC., a Delaware corporation (the “Company”), hereby refers to Section 3.l
(a)(ii) of the Participation Agreement (BRAC Trust No. 2005-[ ]), dated as of
May [ ], 2005 (the “Participation Agreement”), among the Company, BRAC Trust No.
2005-[ ], as Owner Trust, Wilmington Trust Company, acting in its individual
capacity only to the extent expressly stated therein and otherwise solely in its
capacity as Owner Trustee under the Trust Agreement, as Owner Trustee, Cendant
Corporation, as Guarantor and [OWNER PARTICIPANT], as Owner Participant, and
hereby certifies that as of the date hereof:
1. The
Eligible Vehicles being transferred to the Owner Trust on the date hereof
pursuant to the Xxxx of Sale and being subjected to the Lease (the “Vehicles”)
are identified in Schedule I attached hereto which sets forth, with respect to
each such Vehicle, the information referred to in clause (a) of Section 7.1 of
the Lease;
2. With
respect to the transfer of title to each Vehicle:
(a) the
Company has taken or caused to be taken the steps necessary to complete the
action set forth in Annex A hereto, in the State of Oklahoma;
(b) all
required fees and charges under the relevant state motor vehicle statute have
been remitted or caused to be remitted to the relevant state
agency;
(c) all
applicable taxes required to be paid have been paid or caused to be paid;
and
(d) such
Vehicle has been or is being registered, in the State of Oklahoma, in the name
of either the Lessee or the Nominee and the Lessor is or will be designated as a
secured party on the certificate of title for such Vehicle;
3. Each
Vehicle is free and clear of all Liens other than Permitted Liens;
and
4. All
required odometer mileage disclosures with respect to the transfer of title to
each Vehicle to the Nominee have been properly disclosed to the Nominee on the
form prescribed by the applicable state.
All
capitalized terms used herein not otherwise defined herein shall have the
meanings assigned to such terms in Appendix A to the Participation
Agreement.
Participation
Agreement
EXHIBIT
A
Page
2
IN
WITNESS WHEREOF, the undersigned has executed this Certificate this ____ day of
______________, 2005.
|
BUDGET
RENT A CAR SYSTEM, INC. | |
|
| |
|
Name: | |
|
Title: |
Participation
Agreement
|
SCHEDULE
I | |
|
to | |
|
Officer's
Certificate |
DESCRIPTION
OF VEHICLES
|
Count |
Expected
Truck Completion
Date |
Make |
Model |
V.I.N.
Number |
Unit
Number |
Vehicle
Type |
Chassis
PO Number |
Box
Length |
Purchase
Price |
Participation
Agreement
|
ANNEX
A | |
|
to | |
|
Officer's
Certificate |
Actions
taken with respect to transfer of title for Vehicles
Participation
Agreement
|
EXHIBIT
B-1 | |
|
to | |
|
Participation
Agreement |
[Form of
Opinion of Special Counsel for the Lessee and Guarantor]
Participation
Agreement
|
EXHIBIT
B-2 | |
|
to | |
|
Participation
Agreement |
[Form of
Opinion of Corporate Counsel for Lessee]
Participation
Agreement
|
EXHIBIT
B-3 | |
|
to | |
|
Participation
Agreement |
[Form of
Opinion of Corporate Counsel for Guarantor]
Participation
Agreement
|
EXHIBIT
B-4-A | |
|
to | |
|
Participation
Agreement |
[Form of
Closing Date Opinion of Xxxxxxxx, Xxxxxx and Finger, P.A.,
Special
Counsel for the Owner Trust]
Participation
Agreement
|
EXHIBIT
B-4-B | |
|
to | |
|
Participation
Agreement |
[Form of
Closing Date Opinion of Xxxxxxxx, Xxxxxx and Finger, P.A.,
Special
Counsel for the Owner Trustee]
Participation
Agreement
|
EXHIBIT
B-5 | |
|
to | |
|
Participation
Agreement |
[Form of
Opinion of Special Counsel for the Owner Participant]
Participation
Agreement
|
EXHIBIT
B-6 | |
|
to | |
|
Participation
Agreement |
[Form of
Opinion of Corporate Counsel to the Owner Participant]
Participation
Agreement
|
EXHIBIT
B-7 | |
|
to | |
|
Participation
Agreement |
[Form of
Opinion of Special Counsel for the Nominee]
Participation
Agreement
|
EXHIBIT
B-8 | |
|
to | |
|
Participation
Agreement |
[Form of
Closing Date Opinion of Oklahoma Counsel]
Participation
Agreement
|
EXHIBIT
C-1 | |
|
to | |
|
Participation
Agreement |
[Letterhead
of Nominee]
FORM OF
POWER OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS:
That I,
_________________, ___________________ of Budget Truck Trust I, a Delaware
statutory trust (the “Nominee”) under the Nominee Agreement (BRAC Trust No.
2005-[ ]), dated as of May [ ], 2005 (as amended, modified and supplemented from
time to time, the “Nominee Agreement”), among the Nominee, the Lessor (as such
term is defined in Appendix A to the Participation Agreement (BRAC Trust No.
2005-[ ]), dated as of May [ ], 2005, among BRAC Trust No. 2005-[ ], as Owner
Trust, Wilmington Trust Company, acting in its individual capacity only to the
extent expressly stated therein and otherwise solely in its capacity as Owner
Trustee under the Trust Agreement, as Owner Trustee, Budget Rent A Car System,
Inc., as Lessee, Cendant Corporation, as Guarantor and the Owner Participant
named therein; capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in such Appendix A), duly authorized for the
purpose, acting on behalf of the Nominee, hereby make, constitute and appoint
(so long as no Event of Default shall have occurred and be continuing) as the
Nominee’s attorney-in-fact (i) the Lessee, acting through any of its “District
Managers”, “City Managers”, “Fleet Managers” or “Turn-back Managers” or (ii) the
Guarantor, acting through any of its duly authorized representatives, on behalf
of the Nominee and in its name, place and stead, for the special purpose of (1)
doing all things necessary, including, without limitation, executing any
documents in the name of the Nominee, to (a) properly register or reregister
when necessary under applicable law the Lessor’s Vehicles in the State of
Oklahoma or such other state permitted by Section 7.2 of the Lease, in the name
of the Nominee or of the Lessee (for those states in which, in the Lessee’s
reasonable opinion, Vehicles must be registered in the name of the Lessee for
insurance, tax or other regulatory purposes) and (b) obtain certificates of
title in the name of the Nominee for the Vehicles, (2) recording liens in favor
of the Owner Trust on the certificate of title of any Vehicle (or of any
Eligible Vehicle which will be subjected to the Lease), (3) executing such other
documents as are necessary in order to record liens on such Vehicles (or
Eligible Vehicles) in favor of the Owner Trust, (4) receiving (by mail or in
person) and forwarding to the Nominee or its agent the certificate of title and
other registration documentation relating to such Vehicles (or Eligible
Vehicles), (5) designating the Lessee as the mailing address of the Nominee for
all documentation relating to the title and registration of such Vehicles (or
Eligible Vehicles) and (6) applying for duplicate certificates of title
indicating the lien of the Owner Trust on such Vehicles (or Eligible Vehicles)
where original certificates of title have been lost or destroyed. This power of
attorney shall terminate on such date, after the first Funding Date, that the
Remarketing Termination Date shall have occurred or that no Vehicles shall
remain subject to the Lease, and is irrevocable until such date so long as no
Event of Default shall have occurred and be continuing.
Participation
Agreement
EXHIBIT
C-1
Page
2
IN
WITNESS WHEREOF, I have hereunto set my hand this ___th day of May,
2005.
|
for
and on behalf of | ||
|
Budget
Truck Trust I, by Wilmington Trust Company, not in its individual capacity
but solely as trustee under the Trust Agreement (BRAC Trust No. 2005-[
]) | ||
|
as
Nominee | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
Subscribed
and sworn to before me
this
___th day of May, 2005.
|
|
|
|
Notary
Public |
Participation
Agreement
|
EXHIBIT
C-2 | |
|
to | |
|
Participation
Agreement |
[Letterhead
of Owner Trust]
FORM OF
POWER OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS:
That I,
_________________, ___________________ of BRAC Trust No. 2005-[ ], a Delaware
statutory trust, as Owner Trust (in such capacity, the “Owner Trust”) under the
Trust Agreement (BRAC Trust No. 2005-[ ]), dated as of May [ ], 2005 (as
amended, modified and supplemented from time to time, the “Trust Agreement”)
among Wilmington Trust Company, as Owner Trustee, and the Owner Participant (as
such term is defined in Appendix A to the Participation Agreement (BRAC Trust
No. 2005-[ ]), dated as of May [ ], 2005 (the “Participation Agreement”), among
the Owner Trust, Wilmington Trust Company, acting in its individual capacity
only to the extent expressly stated therein and otherwise solely in its capacity
as Owner Trustee under the Trust Agreement, as Owner Trustee, Budget Rent A Car
System, Inc., as Lessee, Cendant Corporation, as Guarantor and the Owner
Participant named therein; capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in such Appendix A), duly authorized
for the purpose, acting on behalf of the Owner Trust, hereby make, constitute
and appoint (so long as no Event of Default shall have occurred and be
continuing) as the Owner Trust’s attorney-in-fact (i) the Lessee, acting through
any of its “District Managers”, “City Managers”, “Fleet Managers” or “Turn-back
Managers” or (ii) the Guarantor, acting through any of its duly authorized
representatives, on behalf of the Owner Trust and in its name, place and stead,
for the special purpose of (1) recording liens in favor of the Owner Trust on
the certificate of title of any Vehicle (or of any Eligible Vehicle which will
be subjected to the Lease), (2) executing such other documents as are necessary
in order to record liens on such Vehicles (or Eligible Vehicles) in favor of the
Owner Trust, (3) receiving (by mail or in person) and forwarding to the Nominee
or its agent on behalf of the Owner Trust, the certificate of title and other
registration documentation relating to such Vehicles (or Eligible Vehicles) and
(4) designating the Lessee as the mailing address of the Owner Trust for all
documentation relating to the title and registration of such Vehicles (or
Eligible Vehicles). This power of attorney shall terminate on such date, after
the first Funding Date, that the Remarketing Termination Date shall have
occurred or that no Vehicles shall remain subject to the Lease and is
irrevocable until such date so long as no Event of Default shall have occurred
and be continuing.
Participation
Agreement
EXHIBIT
C-2
Page
2
IN
WITNESS WHEREOF, I have hereunto set my hand this ___th day of May,
2005.
|
for
and on behalf of | ||
|
BRAC
Trust No. 2005-[ ], by Wilmington Trust Company, not in its individual
capacity but solely as trustee under the Trust Agreement (BRAC Trust No.
2005-[ ]) | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
Subscribed
and sworn to before me
this
___th day of May, 2005.
|
|
|
|
Notary
Public |
Participation
Agreement
|
EXHIBIT
C-3 | |
|
to | |
|
Participation
Agreement |
[Letterhead
of NOMINEE]
FORM OF
POWER OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS:
That I,
_________________, ___________________ of Budget Truck Trust I, a Delaware
statutory trust (the “Nominee”) under the Nominee Agreement (BRAC Trust No.
2005-[ ]), dated as of May [ ], 2005 (as amended, modified and supplemented from
time to time, the “Nominee Agreement”), among the Nominee, the Lessor (as such
term is defined in Appendix A to the Participation Agreement (BRAC Trust No.
2005-[ ]), dated as of May [ ], 2005, among BRAC Trust No. 2005-[ ], as Owner
Trust, Wilmington Trust Company, acting in its individual capacity only to the
extent expressly stated therein and otherwise solely in its capacity as Owner
Trustee under the Trust Agreement, as Owner Trustee, Budget Rent A Car System,
Inc., as Lessee, Cendant Corporation, as Guarantor and the Owner Participant
named therein; capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in such Appendix A), duly authorized for the
purpose, acting on behalf of the Nominee, hereby make, constitute and appoint
(so long as no Event of Default shall have occurred and be continuing) as the
Nominee’s attorney-in-fact (i) the Lessee, acting through any of its “District
Managers”, “City Managers”, “Fleet Managers” or “Turn-back Managers” or (ii) the
Guarantor, acting through any of its duly authorized representatives, on behalf
of the Nominee and in its name, place and stead, for the special purpose of, (1)
upon the sale of any Vehicle pursuant to Sections 13 or 14 of the Lease (other
than sales to the Lessee) in accordance with the terms and conditions thereof,
doing all things necessary, including, without limitation, executing any
documents in the name of the Nominee, to properly transfer title and
registration of such Vehicle to the purchaser thereof and (2) applying for
duplicate certificates of title indicating the lien of the Owner Trust on such
Vehicles (or Eligible Vehicles) where original certificates of title have been
lost or destroyed. This power of attorney shall become effective on such date,
after the first Funding Date, that the Remarketing Termination Date shall have
occurred or that no Vehicles shall remain subject to the Lease, and is
irrevocable so long as no Event of Default shall have occurred and be
continuing.
Participation
Agreement
EXHIBIT
C-3
Page
2
IN
WITNESS WHEREOF, I have hereunto set my hand this ___th day of May,
2005.
|
for
and on behalf of | ||
|
Budget
Truck Trust I, by Wilmington Trust Company, not in its individual capacity
but solely as trustee under the Trust Agreement (BRAC Trust No. 2005-[
]) | ||
|
as
Nominee | ||
|
By |
||
|
Name: | ||
|
Title: | ||
Subscribed
and sworn to before me
this
___th day of May, 2005.
|
|
|
|
Notary
Public |
Participation
Agreement
|
EXHIBIT
C-4 | |
|
to | |
|
Participation
Agreement |
[Letterhead
of Owner Trust]
FORM OF
POWER OF ATTORNEY
KNOW ALL
MEN BY THESE PRESENTS:
That I,
_________________, ___________________ of BRAC Trust No. 2005-[ ], a Delaware
statutory trust (the “Trust”), acting in its capacity as Owner Trust (in such
capacity, the “Owner Trust”) under the Trust Agreement (BRAC Trust No. 2005-[
]), dated as of May [ ], 2005 (as amended, modified and supplemented from time
to time, the “Trust Agreement”) among Wilmington Trust Company, as Owner
Trustee, and the Owner Participant (as such term is defined in Appendix A to the
Participation Agreement dated as of May [ ], 2005 (the “Participation
Agreement”), among the Owner Trust, Wilmington Trust Company, acting in its
individual capacity only to the extent expressly stated therein and otherwise
solely in its capacity as Owner Trustee under the Trust Agreement, as Owner
Trustee, Budget Rent A Car System, Inc., as Lessee, Cendant Corporation, as
Guarantor and the Owner Participant named therein; capitalized terms used but
not defined herein shall have the meanings ascribed to such terms in such
Appendix A), duly authorized for the purpose, acting on behalf of the Owner
Trust, hereby make, constitute and appoint (so long as no Event of Default shall
have occurred and be continuing) as the Owner Trust’s attorney-in-fact (i) the
Lessee, acting through any of its “District Managers”, “City Managers”, “Fleet
Managers” or “Turn-back Managers” or (ii) the Guarantor, acting through any of
its duly authorized representatives, on behalf of the Owner Trust and in its
name, place and stead, for the special purpose of, upon the sale of any Vehicle
pursuant to Sections 13 or 14 of the Lease in accordance with the terms and
conditions thereof, releasing the Owner Trust’s lien on such Vehicle (including
any Vehicle for which the certificate of title is attached hereto or identified
on the annex attached hereto) by executing any documents required in connection
therewith. This power of attorney shall become effective on such date, after the
first Funding Date, that the Remarketing Termination Date shall have occurred or
that no Vehicles shall remain subject to the Lease, and is irrevocable so long
as no Event of Default shall have occurred and be continuing.
Participation
Agreement
EXHIBIT
C-4
Page
2
IN
WITNESS WHEREOF, I have hereunto set my hand this ___th day of May,
2005.
|
for
and on behalf of | ||
|
BRAC
Trust No. 2005-[ ], by Wilmington Trust Company, not in its individual
capacity but solely as trustee under the Trust Agreement (BRAC Trust No.
2005-[ ]) | ||
|
By |
||
|
Name: | ||
|
Title: | ||
Subscribed
and sworn to before me
this
___th day of May, 2005.
|
|
|
|
Notary
Public |
Participation
Agreement
|
EXHIBIT
D | |
|
to | |
|
Participation
Agreement |
[ON
LESSEE LETTERHEAD]
[FORM OF
FUNDING REQUEST]
________________
__, 2005
Wilmington
Trust Company
Xxxxxx
Square North
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000-0000
Attn:
_______________
Gentlemen:
We refer
to the Participation Agreement (BRAC Trust No. 2005-[ ]), dated as of May [ ],
2005 (as amended from time to time, the “Participation
Agreement”; the
terms defined in Appendix A to the Participation Agreement being used herein as
therein defined) among Budget Rent A Car System, Inc., as Lessee, BRAC Trust No.
2005-[ ], as Owner Trust, Wilmington Trust Company, acting in its individual
capacity only to the extent expressly stated therein and otherwise solely in its
capacity as Owner Trustee under the Trust Agreement, as Owner Trustee, Cendant
Corporation, as Guarantor and [OWNER PARTICIPANT], as Owner Participant, and
hereby give you irrevocable notice pursuant to Section 2.3 of the Participation
Agreement, that we hereby request a Funding under the Participation Agreement,
and in that connection set forth below the information relating to such Funding
as required by Section 2.3 of the Participation Agreement:
(i) The
proposed Funding Date is [_____________.]
(ii) The
Specific Identification, Purchase Price and Scheduled Expiration Date relating
to the Vehicles to be purchased on such proposed Funding Date are set forth on
Annex A hereto.
(iii) The
aggregate Purchase Price of the Vehicles to be purchased on the proposed Funding
Date is $__________.
[(iv) The
proposed Funding Date will be the Final Funding Date.]
__________________________
|
1 |
Insert
if such Funding Date is to be the Final Funding
Date. |
Participation
Agreement
EXHIBIT
D
Page
2
|
Very
truly yours, | ||
|
Budget
Rent A Car System, Inc. | ||
|
By |
| |
|
Name: | ||
|
Title: | ||
Participation
Agreement
|
ANNEX
A | |
|
to | |
|
Notice of
Funding |
INFORMATION
RELATING TO VEHICLES
|
Make |
Model
Vehicle |
V.I.N.
Number |
Unit
Number |
Vehicle
Type |
Chassis
PO Number |
Box
Length |
Purchase
Price |
Scheduled
Expiration
Date |
Participation
Agreement
|
EXHIBIT
E | |
|
to | |
|
Participation
Agreement |
Pursuant
to the provisions of the Participation Agreement (BRAC Trust No. 2005-[ ]) dated
as of May [ ], 2005 (the “Participation Agreement”) among Budget Rent A Car
System, Inc., as Lessee (“BRAC”), BRAC Trust No. 2005-[ ], as Owner Trust,
Wilmington Trust Company, acting in its individual capacity only to the extent
expressly stated therein and otherwise solely in its capacity as Owner Trustee
under the Trust Agreement, as Owner Trustee, Cendant Corporation, as Guarantor
and [OWNER PARTICIPANT] as Owner Participant (all capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to such terms
in Appendix A to the Participation Agreement), and for the consideration of Ten
Dollars ($10.00) and other good and valuable consideration, the receipt of which
is hereby acknowledged, BRAC, (the “Seller”) does hereby (i) confirm all of its
representations and warranties contained in Section 4.1(f) of the Participation
Agreement and (ii) grant, sell, assign, transfer and convey to the Owner Trust
(the “Buyer”), and the Buyer’s successors and assigns, all of the Seller’s
right, title and interest in and to the following assets (collectively, the
“Property”):
|
(1) |
the
light-duty and medium-duty box trucks more fully described on Schedule A
hereto (each individually a “Vehicle” and collectively, the “Vehicles”);
|
|
(2) |
the
rights of the Seller under the Nominee Agreement (BRAC Trust No. 2005-[
]), dated as of May [ ], 2005, among Budget Truck Trust I, BRAC and the
Owner Trust, in respect of the Vehicles; |
|
(3) |
all
Warranties; |
|
(4) |
the
certificates of title issued, or to be issued, by the applicable state
governmental authorities and applications for certificates of title with
respect to each of the Vehicles; and |
|
(5) |
the
certificate of origin with respect to each of the Vehicles for which a
certificate of title, or applications therefor, have been
made. |
TO HAVE
AND TO HOLD the Vehicles hereby conveyed, sold, transferred, assigned and
delivered unto the Buyer, and its successors and assigns, to its own use and
behoof forever.
Participation
Agreement
EXHIBIT
E
Page
2
|
BUDGET
RENT A CAR SYSTEM, INC. | ||
|
By |
| |
|
Name: | ||
|
Title:
| ||
Participation
Agreement
|
SCHEDULE
A | |
|
to | |
|
Xxxx
of Sale |
VEHICLE
DESCRIPTION
|
Count |
Expected
Truck Completion
Date |
Make |
Model |
V.I.N.
Number |
Unit
Number |
VehicleType |
Chassis
PO Number |
Box
Length |
Purchase
Price |
Participation
Agreement
APPENDIX
A
DEFINITIONS
The
following terms shall have the following meanings for all purposes and such
meanings are equally applicable both to the singular and plural forms of the
terms defined. Any agreement defined or referred to in this Appendix A shall
include each amendment, modification and supplement thereto that may (in
accordance with the terms of the Operative Documents) be effective from time to
time, except as otherwise expressly indicated. The definition of any Person
herein shall include its successors and permitted assigns.
“Adverse
Business Relationship” shall mean the existence of (a) overtly threatened or
pending material litigation or arbitral proceedings between a proposed
transferee and the Lessee, the Guarantor or any Affiliate thereof or (b) any
other event which the Lessee reasonably demonstrates constitutes a material
adverse relationship between the proposed transferee and the Lessee, Guarantor
or any Affiliate thereof.
“Affiliate”
shall mean, with respect to any Person, any other Person controlled by, in
control of or under common control with such Person, either directly or
indirectly through other Affiliates.
“Anticipated
Initial Funding Date” shall have the meaning provided on Schedule
I hereto.
“Appraiser”
shall mean Xxxxxxxx & Xxxxxxx, Inc.
“Bank”
shall mean the bank or trust company acting as Owner Trustee, in its individual
capacity.
“Base
Term” shall mean, for each Vehicle, the period beginning on the Funding Date
therefor, and ending (1) as to a Gas Engine Vehicle, 42 months after the date on
which the Funding Date in respect of such Vehicle occurred, and (2) as to a
Diesel Engine Vehicle, 54 months after the date on which the Funding Date in
respect of such Vehicle occurred.
“Basic
Rent” shall mean the rent payable for the Vehicles on each Rent Payment Date
pursuant to Section 3.1 of the Lease.
“Xxxx of
Sale” shall mean, with respect to any Funding Date, the xxxx of sale of the
Lessee, substantially in the form of Exhibit
E to the
Participation Agreement, conveying its owner-ship interest in the Funding Date
Vehicles to the Lessor free and clear of all Liens (other than Permitted
Liens).
“Budget
Parties” shall mean the Lessee and the Guarantor.
APPENDIX
A
Page
2
“Business
Day” shall mean any day except Saturday, Sunday or any other day on which banks
are required or authorized to close in New York, New York or Wilmington,
Delaware.
“Closing
Date” shall have the meaning provided on Schedule
I
hereto.
“Code”
shall mean, except as otherwise provided, the Internal Revenue Code of 1986, as
amended from time to time, unless the context otherwise requires.
“Commitment”
shall have the meaning provided on Schedule
I
hereto.
“Corporate
Trust Office” shall mean the principal corporate trust office of the Owner
Trustee, which office is, on the date of delivery of the Trust Agreement,
located at the address of the Owner Trustee set forth on Schedule
III to the
Participation Agreement.
“Costs or
Expenses” shall have the meaning provided in Section 5.1 of the Participation
Agreement.
“Default”
shall mean an event or condition which, with notice or lapse of time or both,
would become an Event of Default.
“Default
Termination Date” shall mean the date, if any, the Lease is terminated pursuant
to Section 11 thereof as a result of an Event of Default.
“Diesel
Engine Vehicle” shall mean an Eligible Vehicle which is manufactured to operate
on diesel fuel.
“Early
Termination Date” shall have the meaning provided in Section 13 of the
Lease.
“Eligible
Vehicle” shall mean a light or medium duty box truck which is equipped with
either a gas or a diesel engine, and having a chassis of 10, 16 or 24 feet,
manu-factured by a Manufacturer and equipped with a cargo box and other
improvements, which truck is further identified and described on Schedule
IV to the
Participation Agreement.
“Employee
Benefit Plan” shall mean any employee benefit plan (as defined in Section 3(3)
of ERISA) which is subject to Title IV of ERISA and which is maintained by or
contributed to by the Lessee or any Related Person or to which the Lessee or any
Related Person has any liability.
“Environmental
Law” shall mean any and all federal, state, local or municipal laws, rules,
orders, regulations, statutes, ordinances, codes, decrees or requirements of any
govern-mental authority regulating, relating to or imposing liability standards
of conduct concern-ing any Hazardous Waste or environmental protections, as now
or at any time hereafter in effect, including, without limitation, the Clean
Water Act, the Comprehensive Environmental Response, Compensation and Liability
Act, the Superfund Amendments and Reauthorization Act of 1986, the Emergency
Planning and Community Right to Know Act, the Resource Conservation and Recovery
Act, the Safe Drinking Water Act, the Toxic Substances Control Act, together, in
each
2
APPENDIX
A
Page
3
case,
with each amendment, supplement or other modification thereto, and the
regulations promulgated thereunder and all substitutions therefor.
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended, or
any successor statute.
“Event of
Default” shall have the meaning provided in Section 10 of the
Lease.
“Event of
Loss” shall have the meaning provided in Section 12.1 of the Lease.
“Event of
Loss Date” shall have the meaning provided in Section 12.1 of the
Lease.
“Expiration
Date” shall mean, in respect of any Vehicle, the earlier of (i) the Default
Termination Date, (ii) the date on which a Vehicle is sold pursuant to Section
13.2 of the Lease, (iii) the Sale Termination Date (as defined in Section
13.1(b) of the Lease) and (iv) the Termination Date in respect of such Vehicle
(or if such Vehicle shall have not been sold on or before the Termination Date,
the Remarketing Termination Date).
“Fair
Market Sales Value” of any or all of the Vehicles shall mean the open market
wholesale sales value in a cash lump sum that a willing and informed buyer would
pay for such Vehicle or Vehicles to a willing and informed seller in an
arm’s-length purchase (which neither party is under any compulsion to enter
into), “as-is, where-is with all faults” as deter-mined by the Appraiser and if
any Vehicle is not returned to the Lessor in compliance with the return
provisions of the Lease, the Lessor’s cost for transporting such Vehicle to the
closest location designated in Schedule
I to the
Lease shall be subtracted from the Fair Market Sales Value for such
Vehicle.
“Final
Funding” shall mean the Funding identified as the Final Funding in the notice
delivered to the Owner Trustee by the Lessee pursuant to Section 2.3 of the
Participation Agreement with respect to such Funding.
“Final
Funding Date” shall mean the Funding Date on which the Final Funding is
held.
“Fleet”
shall mean, at any time, all Vehicles then subject to the Lease.
“Funding”
shall mean the funding by the Owner Participant to the Owner Trust pursuant to
Section 2.1 of the Participation Agreement on a Funding Date with respect to a
portion of the Fleet.
“Funding
Date” shall mean the date on which a Funding with respect to any portion of the
Fleet is held, which shall fall on the last day of any given month (or, if such
day is not a Business Day, the immediately preceding Business Day), or such
other date as the Lessee and the Owner Participant may agree from time to
time.
“Funding Date Lease Supplement” shall mean a Lease
Supplement dated a Funding Date and entered into by the Lessor and the Lessee on
such Funding Date, substantially
3
APPENDIX
A
Page
4
in the
form of Exhibit
B to the
Lease, in accordance with the provisions of the Participation
Agreement.
“Funding
Date Vehicle” shall mean, with respect to any Funding Date, an Eligible Vehicle
being purchased by the Owner Trust on such Funding Date pursuant to the terms of
the Participation Agreement.
“GAAP”
shall mean the generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect as of the relevant date of
determination.
“Gas
Engine Vehicle” shall mean an Eligible Vehicle which is manufactured to operate
on gasoline.
“Governmental
Body” shall mean any department, commission, board, bureau, court, legislature,
agency, instrumentality or authority of the United States of America or any
political subdivision thereof.
“Guarantor”
shall mean Cendant Corporation, a Delaware corporation.
“Guaranty”
shall have the meaning provided on Schedule
I hereto.
“Hazardous
Waste” means any hazardous materials, hazardous wastes, hazardous or toxic
substances, defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, gasoline and any other petroleum
products (including crude oil or any fraction thereof), and materials exhibiting
the characteristics of ignitability, corrosivity, reactivity or extraction
procedure toxicity, as such terms are defined in connection with hazardous
materials or hazardous wastes or hazardous or toxic substances in any
Environmental Law.
“Indemnified
Person” shall mean each of the Owner Trustee, the Bank, any separate Owner Trust
or additional Owner Trust, the Owner Participant, the Nominee Trustee, the
Nominee, permitted successors and assigns and the respective directors,
employees, servants, agents and Affiliates of such Persons.
“Information
Memorandum” shall mean the Information Memorandum, dated ________, 2005,
relating to a $________TRAC Lease Financing of New Light Duty and Medium-Duty
Box Trucks.
“IRS”
shall mean the Internal Revenue Service.
“Judgment”
shall mean any judgment, decree, order or award of any arbitration board or any
court or other Governmental Body.
“Lease”
shall have the meaning provided on Schedule
I
hereto.
4
APPENDIX
A
Page
5
“Lease
Supplement” shall mean a supplement to the Lease which is either a Funding Date
Lease Supplement or a supplement entered into for the purpose of amending,
modifying or supplementing the Lease or any Lease Supplement.
“Lease
Term” shall mean, for any Vehicle, the period commencing on such Vehicle’s
Funding Date and ending on the earlier to occur of such Vehicle’s Termination
Date or on such Vehicle’s Remarketing Termination Date.
“Lessee”
shall mean Budget Rent A Car System, Inc., a Delaware corporation.
“Lessee
Person” means Lessee, Guarantor, their Affiliates, any agent or employee of
Lessee, any of Lessee’s successors, assigns or transferees, any user of any
Vehicle (or any part thereof) during the Lease Term or any Person having custody
or possession of any Vehicle (or any part thereof) during the Lease Term for
such Vehicle (but not including the Owner Participant or Owner Trust, or any
person claiming through Owner Participant or Owner Trust).
“Lessee
Sale Termination Date” shall have the meaning provided in Section 13.1(b) of the
Lease.
“Lessor”
shall mean the Owner Trust.
“Lessor’s
Estate” shall mean all estate, right, title and interest of the Owner Trust in
and to the Fleet, the Participation Agreement, the Lease, the Warranties, the
Xxxx of Sale and the Nominee Agreement.
“Lessor’s
Liens” shall mean the Owner Trustee’s Liens.
“Lessor’s
Transaction Costs” shall mean those costs and expenses of the Lessor specified
in clauses (ii) through (vii) of the definition of Transaction
Costs.
“Lien”
shall mean any mortgage, lien or charge on, security interest in or condi-tional
sale or other title retention agreement or other encumbrance of any nature
whatsoever.
“Manufacturers”
shall mean General Motors Corporation, International Truck and Engine
Corporation and Ford Motor Company, and “Manufacturer” shall mean any of such
companies.
“Maximum
Number of Owner Participants” shall have the meaning provided on Schedule
I
hereto.
“Merger
Event” shall have the meaning provided in Section 2.8 of the
Guaranty.
“Model
Year” shall mean the model year designated for an Eligible Vehicle by the
manufacturer thereof, which year shall be deemed for purposes hereof to commence
on the day announced by such manufacturer as the first day of such year.
“Moody’s”
shall mean Xxxxx’x Investor Services, Inc.
5
APPENDIX
A
Page
6
“Net
Economic Return” shall have the meaning provided on Schedule
I
hereto.
“Net
Sales Proceeds” shall mean the net amount received upon a sale of any Vehicle
after deducting any costs incurred in connection with such sale and, for
purposes of the sale of a Vehicle to the Lessee pursuant to Sections 13.2 or
14.2(b) of the Lease, shall be not less than the Fair Market Sales Value of such
Vehicle. In determining the Net Sales Proceeds of a Vehicle disposed of by the
Lessor pursuant to Section 11(a) of the Lease upon the occurrence of an Event of
Default (other than Section 11(a)(v) of the Lease), the costs of sale shall
include, without limita-tion, the payment of costs and expenses specified in
Section 11(a)(v)(B) of the Lease.
“Nominee”
shall mean Budget Truck Trust I, a Delaware statutory trust.
“Nominee
Agreement” shall have the meaning provided on Schedule I hereto.
“Nominee
Trust Agreement” shall mean the Trust Agreement (Budget Truck Trust I), dated as
of February 17, 2004, among Budget Rent A Car System, Inc., BRAC Trust No.
2004-1, such parties as may become party thereto from time to time, and
Wilmington Trust Company, as trustee.
“Nominee
Trust Supplement” shall have the meaning provided on Schedule I
hereto.
“Nominee
Trustee” shall mean Wilmington Trust Company, not in its individual capacity,
but solely as trustee of the Nominee.
“Officer’s
Certificate” of any entity shall mean a certificate executed on behalf of such
entity by a Responsible Officer thereof.
“Operative
Documents” shall mean the Participation Agreement, the Lease (including the
Lease Supplements), the Nominee Agreement, the Nominee Trust Agreement, the Xxxx
or Bills of Sale, the Powers of Attorney, the Guaranty, the Trust Agreement and
the Tax Indemnity Agreement.
“Overdue
Payment Rate” shall mean a floating per annum rate equal to the lesser of (i)
two percent (2%) above the Reference Rate in effect from time to time and (ii)
the maximum interest rate permitted by applicable law.
“Owner
Participant” shall have the meaning provided on Schedule
I
hereto.
“Owner
Participant’s Liens” shall mean all Liens against the Fleet, the warranties
related to the Fleet, the insurance policies secured in respect of the Fleet as
contemplated by Section 8 of the Lease and the proceeds of the foregoing which
result from:
(a) claims
against the Owner Participant unrelated to the transactions contemplated by the
Operative Documents,
6
APPENDIX
A
Page
7
(b) acts by
the Owner Participant creating a Lien (unless such Lien is consented to by the
Lessee), or
(c) breaches
by the Owner Participant of any of its duties and obligations under any of the
Operative Documents to which it is a party.
“Owner
Trust” shall have the meaning provided on Schedule
I
hereto.
“Owner
Trustee” shall mean Wilmington Trust Company, acting (except where express
reference is made to the Owner Trustee in its individual capacity) not in its
individual capacity but solely as trustee under the Trust
Agreement.
“Owner
Trustee’s Liens” shall mean all Liens against the Fleet, the warranties related
to the Fleet, the insurance policies secured in respect of the Fleet as
contemplated by Section 8 of the Lease and the proceeds of the foregoing which
result from:
(a) claims
against the Owner Trustee or the Bank unrelated to the transactions contemplated
by the Operative Documents,
(b) acts by
the Owner Trustee (in its individual or trust capacity) creating a Lien (unless
such Lien is consented to by the Lessee or such acts are taken in connection
with an Event of Default),
(c) breaches
by the Owner Trustee or the Bank of any of its duties and obligations under any
of the Operative Documents to which it is a party,
(d) claims of
the Bank (except such claims as are expressly permitted by the Operative
Documents), or
(e) any Tax
on the Lessor’s Estate other than a Tax which is indemnified by the Lessee
pursuant to Section 5.2 of the Participation Agreement.
“Participation
Agreement” shall have the meaning provided on Schedule
I
hereto.
“Per Diem
Rent” shall mean, in respect of any Vehicle , the product of (i) the Per Diem
Rent Factor for such Vehicle and (ii) the Purchase Price for such
Vehicle.
“Per Diem
Rent Factor” shall have the meaning, in respect of any Vehicle Type, specified
with respect thereto on Schedule II to the Lease, as such percentage may be
adjusted pursuant to Section 3.3 of the Lease and set forth in the applicable
Lease Supplement in respect of any Vehicle.
“Permitted
Contest” shall mean a contest permitted by and meeting the require-ments of
Section 5.2 of the Lease.
“Permitted Investments” shall mean (a) investments in
direct obligations of the government of the United States or any instrumentality
thereof, the obligations of which are guaranteed by such government, maturing
within 90 days of the date of acquisition thereof, (b)
7
APPENDIX
A
Page
8
investments
in obligations fully guaranteed by the government of the United States or any
instru-mentality thereof, the obligations of which are guaranteed by such
government, maturing within 90 days of the date of acquisition thereof, (c)
investments in open market commercial paper issued by any corporation rated at
least P-1 by Xxxxx’x Investors Service, Inc. or A-1 by Standard & Poors
Corporation maturing within 90 days from the date of acquisition thereof,
(d) investments in certificates of deposit issued by, or bankers’
acceptances of, or repurchase agreements (fully collateralized by transfer of
any of the other obligations referred to above in this definition) with, or time
deposits or a deposit account issued by, any bank, trust company or national
banking association incorporated or doing business under the laws of the United
States of America or any State thereof having a combined capital and surplus of
at least $500,000,000, in each case maturing within 90 days of the date of
acquisition thereof, and (e) a money market fund registered under the Investment
Company Act of 1940 (15 U.S.C. § 809-1 et seq. as from time to time amended),
the portfolio of which is limited to United States government obligations and
United States agency obligations as described in (a) and (b) above.
“Permitted
Liens” shall mean:
(a) Liens for
Taxes (i) not yet delinquent or (ii) being contested in good faith in a
Permitted Contest;
(b) Liens of
mechanics, laborers, garagemen, garbagekeepers, materialmen, suppliers, vendors,
workmen and carriers and any other statutory or common law possessory Liens
(other than Liens of the Manufacturers and the initial vendor) created in the
ordinary course of business for sums of money (other than borrowed money) which
under the terms of the related contracts are not at the time due, provided that
any reserve or other appropriate provision required by generally accepted
accounting principles shall have been made in respect thereof and provided that
all such Liens permitted by this clause (b) shall not in the aggregate be
material in respect of the condition or operations of the Lessee;
(c) the
respective rights and interests of the Owner Participant, the Owner Trust, the
Lessee, the Nominee and the Guarantor as are permitted by and contemplated under
the Operative Documents;
(d) Liens
arising out of judgments or awards against the party or parties obligated to
keep the subject asset free of Liens with respect to which a timely appeal or
proceeding for review is being prosecuted in good faith in a Permitted
Contest;
(e) Liens
arising out of pre-judgment garnishment, attachment or other similar actions or
proceedings, provided the same are removed within 15 days of the date of
creation thereof or fully bonded and so long as such actions do not involve any
material risk of the sale, forfeiture or loss of the encumbered asset or
material risk of any liability to the party or parties intended as the
beneficiary of the requirement that the subject asset be kept free of Liens;
and
(f) the
Lessor’s Liens and the Owner Participant’s Liens.
“Permitted
Use Agreements” shall have the meaning provided in Section 7.3 of the
Lease.
8
APPENDIX
A
Page
9
“Person”
shall mean and include any individual, firm, corporation, association, trust,
partnership, joint venture, limited liability company, unincorporated
organization or other enterprise or any government or any agency, political
subdivision, department or instrumentality thereof.
“Powers
of Attorney” shall mean the limited powers of attorney granted by the Owner
Trust and the Nominee, respectively, to the Lessee on the Closing Date,
substantially in the forms of Exhibits C-1, C-2, C-3 and C-4 to the
Participation Agreement.
“Purchase
Price” shall mean, in respect of each Vehicle, an amount set forth in the
applicable Lease Supplement equal to the sum of (a) the actual purchase price
paid or payable to the applicable Manufacturer in respect of such Vehicle, (b)
the amount paid or payable to the applicable box manufacturer in respect of such
Vehicle and (c) freight, installation, and point of purchase expenses as are
necessary to place such Vehicle into commercial service.
“Qualified
Entity” shall mean a corporation, partnership, limited liability company or
business trust (1) which, as of the date of determination, has an unsecured debt
rating of not less than Baa1 from Moody’s and BBB from S&P (or, if such
entity is not rated by Moody’s or S&P, a comparable rating from another
nationally recognized rating agency) and (2) to which the Owner Participant has
not objected within thirty (30) days of receipt of the notice referred to in
Section 5.4 of the Participation Agreement and receipt by the Owner Participant
of all relevant information, which objection must be based upon one or more of
the following: (A) legal or regulatory prohibitions or constraints which would
apply to the Owner Participant if the proposed Qualified Entity were the Lessee
or a guarantor thereof and a legal opinion to such effect has been provided; (B)
internal limitations of the Owner Participant with respect to total credit
exposure to the proposed Qualified Entity, the country in which such proposed
Qualified Entity is domiciled or the industry (other than the vehicle rental
industry) of such Qualified Entity, so long as such limitations are based on an
established policy of the Owner Participant or, if no established policy exists,
limitations reasonably determined at the time in good faith by Owner Participant
and presented to the Lessee, together with an explanation as to the reasons for
such limitations; (C) the existence of overtly threatened or pending material
litigation or arbitral proceedings between the proposed Qualified Entity or any
of its Affiliates and the Owner Participant or any of its Affiliates and
evidence to such effect; or (D) any other written, established policy of the
Owner Participant which would preclude a relationship with the proposed
Qualified Entity and evidence to such effect has been provided.
"Qualified
Merger Entity" shall be a corporation, partnership, limited liability company or
business trust which, following such Merger Event, shall have unsecured debt
ratings from S&P or Moody's which are not (i) two (2) full notches or more
lower than the unsecured debt ratings of Guarantor from either of such
rating agencies immediately prior to such Merger Event or (ii) in any case,
lower than BBB- from S&P or Baa3 from Moody's, unless, in the case of clause
(ii), the unsecured debt ratings of Guarantor prior to such Merger Event
were lower than BBB- from S&P or Baa3 from Moody's in which case the
Surviving Entity shall have an unsecured debt rating from each rating agency
which is equal to or greater than Guarantor's ratings.
9
APPENDIX
A
Page
10
“Quarterly
Rent Factor” shall have the meaning, with respect to any Vehicle Type, specified
with respect thereto on Schedule II to the Lease, as such percentage may be
adjusted pursuant to Section 3.3 of the Lease and set forth in the applicable
Lease Supplement in respect of any Vehicle.
“Reference
Rate” shall mean such rate as announced from time to time by Citibank, N.A., as
its prime rate.
“Regulations”
shall mean regulations promulgated by the United States Treasury Department
under the Code.
“Related
Indemnitee” shall mean, with respect to an Indemnified Person, (i) the
Affiliates of such Person and (ii) the agents, shareholders, directors,
employees and officers of such Indemnified Person and its Affiliates.
“Related
Person” shall mean any trade or business, whether or not incorporated, that
(together with the Lessee) is under common control as described in Sections
414(b) and (c) of the Code and with respect to Section 412 of the Code and
Section 302 of ERISA, Sections 414(b), (c), (m) and (o) of the
Code.
“Remarketing
Agent” shall mean any Person acting as a remarketing agent with respect to the
remarketing of the Vehicles.
“Remarketing
Payment Date” shall have the meaning provided in Section 14.2(b) of the
Lease.
“Remarketing
Termination Date” shall have the meaning provided in Section 14.2(d) of the
Lease.
“Remedy
Payment Date” shall have the meaning provided in Section 11 of the
Lease.
“Renewal
Rent” shall mean, in respect of a given Vehicle during the Renewal Term for such
Vehicle, if a payment of Renewal Rent is payable on a Rent Payment Date, the
product of (a) the Purchase Price for such Vehicle and (b) the Quarterly Rent
Factor for such Vehicle and, in cases in which the Renewal Rent is to be paid on
a date other than a Rent Payment Date, Per Diem Rent for such Vehicle multiplied
by the number of days since the date on which Basic Rent or Renewal Rent was
last payable.
“Renewal
Sale Date” shall have the meaning provided in Section 13.1(c) of the
Lease.
“Renewal
Settlement Date” shall have the meaning provided in Section 13.1(c) of the
Lease.
“Renewal
Term” shall have the meaning provided in Section 14.1(b) of the
Lease.
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“Renewal
TRAC Percentage” shall, as of any date of determination, with respect to any
Vehicle Type, equal the percentage applicable to the calculation of Termination
Value for such Vehicle Type as of such date, as set forth on the Lease
Supplement in respect of such Vehicle; provided that in
all cases, the Renewal TRAC Percentage of any Vehicle of a particular Vehicle
Type as of the date which is one year after the commencement of the Renewal
Term, if any, with respect to such Vehicle shall be as indicated on Schedule
IV to the
Lease.
“Rent”
shall mean Basic Rent, Supplemental Rent, and any Renewal Rent, if
applicable.
“Rent
Payment Date” shall mean, during the Lease Term for each Vehicle, for the
initial Rent Payment Date, the 30th day of
the third calendar month after the Funding Date for such Vehicle (or if such day
is not a Business Day, on the immediately preceding Business Day), and
thereafter the 30th day of
the third calendar month after the preceding Rent Payment Date (or if such day
is not a Business Day, on the immediately preceding Business Day).
“Rent
Period” shall mean, as to each Vehicle, each succeeding Rent Period determined
in accordance with Section 3.2 of the Lease.
“Responsible
Officer” shall mean:
(a) with
respect to the Lessee, (i) any of the Lessee’s management or supervisory
personnel in the Lessee’s fleet administration or motor vehicle accounting
departments at its North American headquarters (including their supervisors) or
(ii) any of the Lessee’s management or supervisory personnel who at the time are
responsible for the administration of the Operative Documents (including their
supervisors);
(b) with
respect to the Owner Participant, any of the Owner Participant’s management or
supervisory personnel who at the time are responsible for the administration of
the Operative Documents (including their supervisors); and
(c) with
respect to the Owner Trust, any officer thereof who at the time is authorized to
act in connection with the transactions contemplated by the Operative Documents
or any officer with direct responsibility for administration of the Trust
Estate.
“S&P”
shall mean Standard & Poor’s Corporation.
“Scheduled
Expiration Date” shall mean, in respect of any Vehicle, the last day of the Base
Term for such Vehicle, which date shall be indicated on Schedule A to the
Funding Date Lease Supplement relating to such Vehicle.
“Securities
Act” shall mean the Securities Act of 1933 as in effect from time to
time.
“Specific
Identification”, “Specifically Identify”, “Specifically Identifies” and
“Specifically Identified” shall mean, with respect to any Vehicle,
identification of the make, model, vehicle identification number, unit number
and box length for such Vehicle.
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“Specified
Default” shall mean any Default under Sections 10(a), (b) (e), (f) or (g) of the
Lease or any Event of Default.
“Supplemental
Rent” shall mean (without duplication of Basic Rent): (a) all amounts,
liabilities and obligations which the Lessee expressly assumes or agrees to pay
to or for the benefit of the Owner Trust, the Nominee, the Owner Participant or
any Indemnified Person under the Operative Documents, whether or not designated
as Supplemental Rent, including, without limitation, damages for breach of any
covenant, representation, warranty or agreement therein and payments of
Termination Value, but excluding Basic Rent; and (b) all amounts payable by the
Lessor pursuant to the Nominee Agreement, at the time when such amounts are
payable by the Lessor.
“Surviving
Entity” shall have the meaning provided in Section 5.4 of the Participation
Agreement.
“Tax” and
“Taxes” shall have the meanings provided in Section 5.2 of the Participation
Agreement.
“Tax
Assumptions” shall mean those assumptions set forth in Section 2 of the Tax
Indemnity Agreement.
“Tax
Indemnity Agreement” shall have the meaning provided on Schedule
I hereto.
“Tax Law
Change” shall mean any change (or any change proposed by the chairman of the
House of Representatives Ways and Means Committee or the Senate Finance
Committee or approved by either such committee, or set forth in a budget
proposal by the Department of the Treasury which could have an effective date
applicable to the Vehicles to be purchased on a Funding Date) in the Code or the
United States Treasury Income Tax Regulations that would affect the anticipated
U.S. federal income tax consequences to the Owner Participant of the
transactions contemplated by the Operative Documents.
“Termination
Date” shall mean, for any Vehicle, the date that such Vehicle is sold pursuant
to Section 14.2 of the Lease.
“Termination
Value” shall mean, as of any date of determination of such value in respect of a
Vehicle, (i) if such date of determination is a Rent Payment Date or another
date specified on Schedule B to the Funding Date Lease Supplement for such
Vehicle (a “Specified Date”), the percentage of the Purchase Price for such
Vehicle indicated for such date on Schedule
B to the
Funding Date Lease Supplement relating to such Vehicle (as such percentage may
be adjusted pursuant to Section 3.3 of the Lease and set forth in the applicable
Lease Supplement in respect of any Vehicle); (ii) if such date of determination
is not a Rent Payment Date or another Specified Date, the Purchase Price for
such Vehicle multiplied by the interpolated percentage derived with reference to
the percentage indicated on Schedule
B to the
Funding Date Lease Supplement relating to such Vehicle (as such percentage may
be adjusted pursuant to Section 3.3 of the Lease and set forth in the applicable
Lease Supplement in respect of any Vehicle) for the Rent Payment Dates or the
Specified Dates immediately preceding and
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immediately succeeding such date of determination;
provided,
that, if such
date of determination is not a Rent Payment Date or another date specified on
Schedule B to the Funding Date Lease Supplement and occurs within the month
immediately preceding (but excluding) a Rent Payment Date, such amount shall be
the sum of (x) the percentage of the Purchase Price for such Vehicle indicated
on Schedule B to the applicable Lease Supplement in respect of such Vehicle on
the specified date immediately preceding such date of determination and (y) the
product of the Per Diem Rent for such Vehicle and the number of days elapsed
after such Specified Date.
“TRAC
Amount” shall mean, as of any date of determination and with respect to any
Vehicle sold by or on behalf of the Lessor (whether to the Lessee or a third
party), an amount equal to the TRAC Percentage or Renewal TRAC Percentage, as
applicable, of the Purchase Price for such Vehicle as of such date of
determination with respect to such Vehicle minus the Net Sales Proceeds with
respect to such Vehicle (it being understood that if a Vehicle is unsold, the
Net Sales Proceeds equals zero).
“TRAC
Certificate” shall have the meaning provided in Section 2 of the
Lease.
“TRAC
Percentage” shall have the meaning, with respect to any Vehicle Type, specified
in Schedule IV to the Lease. The TRAC Percentage shall apply to any calculation
of the TRAC Amount on the last day of the Base Term in respect of a
Vehicle.
“Transaction
Costs” means all of the out-of-pocket costs, fees and expenses incurred by the
Lessee, the Guarantor, the Owner Participant, the Owner Trust, the Bank and the
Nominee in connection with the negotiation, preparation, execution, delivery,
filing and recording of the Operative Documents and the transactions
contemplated thereby, including:
(i) (A) the
reasonable fees and disbursements of White & Case LLP, special counsel to
the Lessee and the Guarantor; (B) the reasonable fees and disbursements of
McAfee & Xxxx, special Oklahoma counsel to the Lessee and the Guarantor; and
(C) the reasonable fees of BTM Financial Services, Inc., as the Lessee’s
advisor;
(ii) the
reasonable fees, expenses and disbursements of (A) Xxxxxx Xxxx & Priest LLP,
special counsel for the Owner Participant and any other special local counsel
for the Owner Participant, (B) Xxxxxxxx, Xxxxxx & Finger, P.A., special
counsel for the Owner Trust and the Bank, (C) Xxxxxxxx, Xxxxxx & Finger,
P.A., special counsel for the Nominee and (D) Xxxxxxxx, Xxxxxx & Finger,
P.A., counsel to the Nominee Trustee;
(iii) the
reasonable out-of-pocket costs and expenses of the Owner Participant, the Lessee
and the Guarantor;
(iv) the cost
of preparation and filing of UCC financing statements;
(v) the fees
and out-of-pocket costs and expenses of the Nominee;
(vi) the fees
and expenses of the Appraiser; and
(vii) the
initial but not ongoing fees and expenses of the Owner Trust.
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“Transaction
Cost Maximum” shall have the meaning provided on Schedule
I
hereto.
“Trigger
Event” shall mean that the Lessor shall have obtained, shall have demanded or
shall be seeking to obtain, physical possession of the Fleet pursuant to Section
11 of the Lease by reason of the occurrence of an Event of Default.
“Trust
Agreement” shall have the meaning provided on Schedule
I hereto.
“U.C.C.”
shall mean the Uniform Commercial Code as adopted in any applicable jurisdiction
as may be in effect from time to time.
“United
States Person” shall have the meaning provided in Section 7701(a)(30) of the
Code.
“Unsold
Vehicle” shall have the meaning provided in Section 14.2(d) of the
Lease.
“Vehicle”
shall mean, at any time, an Eligible Vehicle which at any time was purchased by
the Lessor pursuant to the Participation Agreement and made subject to the
Lease.
“Vehicle
Type” shall mean, with respect to any Vehicle, a Vehicle designation of
[“Vehicle Type A” or “Vehicle Type B”]1 , as set
forth in the applicable Lease Supplement in respect of any Vehicle.
“Vehicle
Type A” shall mean Gas Engine Vehicles, specifically it includes E350 10 foot
box trucks and E350 15 foot box trucks manufactured by Ford Motor Company and
Savana 15 foot box trucks manufactured by General Motors Corporation.
“Vehicle
Type B” shall mean Diesel Engine Vehicles, specifically it includes TC 7500 24
foot box trucks manufactured by General Motors Corporation, 4200 24 foot box
trucks and 4300 24 foot box trucks manufactured by International Truck and
Engine Corporation.
“Warranties”
shall have the meaning provided in Section 4.2 of the Lease.
14
Schedule
I to Appendix A
to the
Participation Agreement
Certain
Definitions
“Anticipated
Initial Funding Date” shall mean May [ ], 2005.
“Closing
Date” shall mean May [ ], 2005, or such later date as shall be agreed by the
parties to the Participation Agreement.
“Commitment”
shall mean $[__________].
“Guaranty”
shall mean the Guaranty Agreement (BRAC Trust No. 2005-[ ]), dated as of May [
], 2005, by the Guarantor in favor of the Owner Trust and the Owner
Participant.
“Lease”
shall mean the Lease Agreement (BRAC Trust No. 2005-[ ]), dated as of May [ ],
2005, between the Lessee and the Lessor.
“Maximum
Number of Owner Participants” shall mean one (1).
“Net
Economic Return” shall mean [______________]2 .
“Nominee
Agreement” shall mean the [Nominee Agreement (BRAC Trust No. 2005-[ ]) dated as
of May [ ], 2005 among the Nominee, the Lessee and the Lessor].
“Nominee
Trust Supplement” shall mean the Trust Supplement (BRAC Trust No. 2005-[ ]),
dated as of May [ ], 2005, among the Lessee, the Lessor and the
Bank.
“Owner
Participant” shall mean [OWNER PARTICIPANT].
“Owner
Trust” shall mean BRAC Trust No. 2005-[ ], a Delaware statutory
trust.
“Participation
Agreement” shall mean the Participation Agreement (BRAC Trust No. 2005-[ ]),
dated as of May [ ], 2005, among the Lessee, the Owner Participant, the Owner
Trust, the Guarantor and Wilmington Trust Company, in its individual capacity
only to the extent expressly therein and otherwise as Owner
Trustee.
“Tax
Indemnity Agreement” shall mean the Tax Indemnity Agreement (BRAC Trust No.
2005-[ ]), dated as of May [ ], 2005, between the Lessee and the Owner
Participant.
“Transaction
Cost Maximum” shall mean $[__________].
3
Schedule
I to Appendix A
to the
Participation Agreement
“Trust
Agreement” shall mean the Trust Agreement (BRAC Trust No. 2005-[ ]), dated as of
May [ ], 2005, between the Bank and the Owner Participant.
3