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EXHIBIT 4.8
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
dated as of December __, 1997,
among
RENTAL CAR FINANCE CORP.
as Lessor,
THRIFTY RENT-A-CAR-SYSTEM, INC.,
as Lessee and Servicer,
DOLLAR RENT A CAR SYSTEMS, INC.,
as Lessee and Servicer,
and those subsidiaries and affiliates
of Dollar Thrifty Automotive Group, Inc.
from time to time
becoming Lessees and Servicers hereunder
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
as Guarantor and Master Servicer
AS SET FORTH IN SECTION 21 HEREOF, LESSOR HAS ASSIGNED TO THE TRUSTEE (AS
DEFINED HEREIN) ALL OF LESSOR'S RIGHT, TITLE AND INTEREST IN AND TO THIS LEASE.
TO THE EXTENT, IF ANY, THAT THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM
IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE
JURISDICTION), NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE
TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED
COUNTERPART NO. 1, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE
RECEIPT THEREFOR EXECUTED BY THE TRUSTEE ON THE SIGNATURE PAGE THEREOF.
[THIS IS NOT THE ORIGINAL EXECUTED COUNTERPART NO. 1]
[THIS IS THE ORIGINAL EXECUTED COUNTERPART NO. 1
(IF BEARING ORIGINAL SIGNATURES)]
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MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
This Master Motor Vehicle Lease and Servicing Agreement (the "Base Lease"
and, as supplemented by the Lease Annexes, this "Agreement" or "Lease"), dated
as of December __, 1997, is by and among RENTAL CAR FINANCE CORP., a special
purpose Oklahoma corporation (the "Lessor" or "RCFC"), as lessee and servicer,
and DOLLAR RENT A CAR SYSTEMS, INC., an Oklahoma corporation ("Dollar"), THRIFTY
RENT-A-CAR SYSTEM, INC., an Oklahoma corporation ("Thrifty"), as lessee and
servicer, and those subsidiaries of Dollar Thrifty Automotive Group, Inc. from
time to time becoming Lessees hereunder pursuant to Section 28 hereof (each, an
"Additional Lessee"), as a lessee and a servicer (each of Thrifty and Dollar,
and each of the Additional Lessees, in their respective capacities as lessees, a
"Lessee" and, collectively, the "Lessees", and, in their respective capacities
as servicers, a "Servicer" and, collectively, the "Servicers") and DOLLAR
THRIFTY AUTOMOTIVE GROUP, INC., a Delaware corporation ("DTAG"), as Master
Servicer (in such capacity, the "Master Servicer") and as Guarantor (in such
capacity, the "Guarantor").
W I T N E S S E T H:
WHEREAS, the Lessor (such capitalized term, together with all other
capitalized terms used herein, shall have the meaning assigned thereto in
Section 1) intends to refinance the Existing Fleet and to purchase, and finance
the purchase of, additional Eligible Vehicles from one or more Manufacturers
with the proceeds obtained by the issuance of its Rental Car Asset Backed Notes
included in Group I and with certain other funds; and
WHEREAS, the Lessor desires to lease to the Lessees, and the Lessees
desire to lease from the Lessor, Vehicles for use in the Lessees' respective
businesses, including subleasing Vehicles to Eligible Franchisees;
NOW, THEREFORE, in consideration of the foregoing premises, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
Section 1.1. Certain Definitions. As used in this Agreement and unless the
context requires a different meaning, capitalized terms not otherwise defined
herein shall have the meanings assigned to such terms in (a) the Definitions
List, attached as Schedule 1 to the Base Indenture, dated as of December 13,
1995 (as amended on the date hereof and as such agreement may be further
amended, supplemented, restated or otherwise modified from time to time in
accordance with its terms, the "Base Indenture"), between RCFC and Bankers Trust
Company, as trustee, as in effect on the date hereof and as such Schedule 1 may
be amended, supplemented or modified from time to time in accordance with the
terms of the Base Indenture (the "Definitions List"), or (b) each Supplement to
the Base Indenture relating to a
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Series of Shared Series Notes identified in such Supplement as being part of
Group I. Unless the context otherwise requires, terms defined in both the Base
Indenture and one or more of such Series Supplements shall have the meanings
assigned to such terms in the applicable Series Supplements.
Section 1.2. Accounting and Financial Determinations. Where the character
or amount of any asset or liability or item of income or expense is required to
be determined, or any accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall be made, to
the extent applicable and except as otherwise specified in this Agreement, in
accordance with GAAP. When used herein, the term "financial statement" shall
include the notes and schedules thereto.
Section 1.3. Cross References; Headings. The words "hereof", "herein" and
"hereunder" and words of a similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Annex, Section, Schedule and Exhibit references contained in this
Agreement are references to Annexes, Sections, Schedules and Exhibits in or to
this Agreement unless otherwise specified. Any reference in any Section or
definition to any clause is, unless otherwise specified, to such clause of such
Section or definition. The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
Section 1.4. Interpretation. In this Agreement, unless the context
otherwise requires:
(a) the singular includes the plural and vice versa;
(b) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to any Person in a particular
capacity refers only to such Person in such capacity;
(c) reference to any gender includes the other gender;
(d) reference to any Requirement of Law means such Requirement of
Law as amended, modified, codified or reenacted, in whole or in part, and
in effect from time to time;
(e) "including" (and, with correlative meaning, "include") means
including without limiting the generality of any description preceding
such term;
(f) "or" is not exclusive;
(g) provisions apply to successive events and transactions; and
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(h) with respect to the determination of any period of time, "from"
means "from and including" and "to" and "through" mean "to but excluding".
SECTION 2. GENERAL AGREEMENT. (a) As specified in the Lease Annexes, the
Lessees and the Lessor intend that this Agreement be (i) an operating lease with
respect to the Acquired Vehicles and (ii) a financing arrangement with respect
to the Financed Vehicles.
(b) If, notwithstanding the intent of the parties to this Agreement, this
Agreement is deemed by any court, tribunal, arbitrator or other adjudicative
authority in any proceeding (each, a "Court") to constitute a financing
arrangement or otherwise not to constitute a "true lease" with respect to the
Acquired Vehicles, then it is the intention of the parties that this Agreement
together with the Master Collateral Agency Agreement, as such agreements apply
to the Acquired Vehicles, shall constitute a security agreement under applicable
law, and it is the intention of the parties that this Agreement together with
the Master Collateral Agency Agreement, as such agreements apply to the Financed
Vehicles, shall in all events constitute a security agreement under applicable
law. Each Lessee hereby acknowledges that it has granted to the Master
Collateral Agent, pursuant to the Master Collateral Agency Agreement, for the
benefit of the Trustee, a first priority security interest in all of such
Lessee's right, title and interest in and to the Lessee Master Collateral (as
defined therein) as collateral security for the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of all of the obligations and liabilities of such Lessee to the Lessor and the
Trustee, whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred (including interest accruing after
the Lease Expiration Date and interest accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding), which may arise under, out of, or in connection with, this
Agreement and any other document made, delivered or given in connection
herewith, whether on account of rent, principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees and
disbursements of counsel to the Lessor or the Trustee that are required to be
paid by the Lessee pursuant to the terms hereof).
Section 2.1. Leasing of Vehicles. Subject to the terms and conditions
hereof, the Lessor agrees to lease to each Lessee and each Lessee agrees to
lease from the Lessor (i) on the initial Closing Date, the Existing Fleet of
Dollar, (ii) on the initial Vehicle Funding Date for an Additional Lessee, the
Existing Fleet of such Lessee and (iii) on the initial Closing Date and from
time to time thereafter, each additional Acquired Vehicle or Financed Vehicle
identified in Vehicle order summaries (each, a "Vehicle Order") produced from
time to time by such Lessee, listing Vehicles ordered from Eligible
Manufacturers by the Lessee for itself or as agent for the Lessor, pursuant to
the terms of any applicable Eligible Vehicle Disposition Programs or otherwise.
The Lessor shall, subject to Section 4 and to compliance with the terms of the
Indenture, make available to the Lessees under this Lease financing for Financed
Vehicles (other than Texas Vehicles) in an aggregate amount, and Acquired
Vehicles and Texas Vehicles for lease to the Lessees hereunder in an aggregate
Net Book Value, which collectively shall not exceed the Maximum Lease
Commitment. The applicable Lessee shall
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make available to the Lessor (a) in the case of any lease of Vehicles in the
Existing Fleet, a schedule as set forth in Attachment A-1 hereto containing
information concerning the Existing Fleet of such Lessee of a scope agreed upon
by the Lessor and such Lessee, and (b) if requested by the Lessor, each Vehicle
Order, together with a schedule containing the information with respect to the
Vehicles included within such Vehicle Order as is set forth in Attachment A-2
hereto, or in such form as is otherwise requested by the Lessor (each, a
"Vehicle Acquisition Schedule"). In addition, each Lessee shall provide such
other information regarding such Vehicles as the Lessor may reasonably require
from time to time. The Lessor shall lease to the Lessees, and the Lessees shall
lease from the Lessor, only Vehicles that are Eligible Vehicles. This Agreement,
together with the Vehicle Disposition Programs and other incentive programs
relating to the Vehicles and any other related documents attached to this
Agreement or submitted with a Vehicle Order (collectively, the "Supplemental
Documents"), will constitute the entire agreement regarding the leasing of
Vehicles by the Lessor to the Lessees.
Section 2.2. Right of Lessees to Act as Lessor's Agent. The Lessor agrees
that each Lessee may act as the Lessor's agent in placing Vehicle Orders on
behalf of the Lessor, as well as filing claims on behalf of the Lessor for
damage in transit, and other delivery related claims with respect to the
Vehicles leased hereunder; provided, however, that the Lessor may hold the
applicable Lessee liable for losses due to such Lessee's actions in performing
as the Lessor's agent hereunder. In addition, the Lessor agrees that each Lessee
may make arrangements for delivery of Vehicles to a location selected by such
Lessee at such Lessee's expense. Each Lessee or any Sublessee, as applicable,
may accept or reject Eligible Vehicles upon delivery in accordance with such
Lessee's customary business practices, and any Eligible Vehicle, if rejected,
will be deemed a Casualty hereunder. The applicable Lessee, acting as agent for
the Lessor, shall be responsible for pursuing any rights of the Lessor with
respect to the return of any Eligible Vehicle to the Manufacturer thereof, or
the applicable auction or dealer, as applicable, pursuant to the preceding
sentence. Each Lessee agrees that all vehicles ordered as provided herein shall
be Eligible Vehicles and shall be ordered utilizing the procedures consistent
with the applicable Vehicle Disposition Program or any guidelines of the
Manufacturer, auction or dealer, as applicable, for the ordering or purchasing
of Non-Program Vehicles, in each case as and to the extent applicable.
Section 2.3. Payment of Purchase Price by Lessor. Upon receipt of the
Manufacturer's invoice and certificate of origin in respect of any new Vehicle,
or such other customary documentation in respect of any used Vehicle, the Lessor
or its agent shall pay or cause to be paid to the auction, the dealer or the
related Manufacturer, as applicable, the costs and expenses incurred in
connection with the acquisition of such Vehicle under the applicable Vehicle
Disposition Program (in the case of a Program Vehicle) or otherwise (in the case
of a Non-Program Vehicle) as established by the invoice of the auction, the
dealer or the Manufacturer, as the case may be (the "Initial Acquisition Cost"),
for such Vehicle and the applicable Lessee shall pay all applicable costs and
expenses of freight, packing, handling, storage, shipment and delivery of such
Vehicle to the extent that the same have not been included within the Initial
Acquisition Cost; provided that solely in the case of the Existing
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Fleet of a Lessee, the Lessor shall pay to such party as is specified in the
related Payoff Letter an amount equal to the aggregate Net Book Value as of the
Vehicle Funding Date with respect to the Existing Fleet of such Lessee.
Section 2.4. Non-liability of Lessor. The Lessor shall not be liable to a
Lessee for any failure or delay in obtaining Vehicles or making delivery
thereof. AS BETWEEN THE LESSOR AND THE LESSEES, ACCEPTANCE FOR LEASE OF THE
VEHICLES SHALL CONSTITUTE THE APPLICABLE LESSEE'S ACKNOWLEDGMENT AND AGREEMENT
THAT THE APPLICABLE LESSEE HAS FULLY INSPECTED SUCH VEHICLES, THAT THE VEHICLES
ARE IN GOOD ORDER AND CONDITION AND ARE OF THE MANUFACTURE, DESIGN,
SPECIFICATIONS AND CAPACITY SELECTED BY SUCH LESSEE, THAT SUCH LESSEE IS
SATISFIED THAT THE SAME ARE SUITABLE FOR ITS USE AND THAT THE LESSOR IS NOT A
MANUFACTURER, AN AGENT OF THE MANUFACTURER OR OTHERWISE ENGAGED IN THE SALE OR
DISTRIBUTION OF VEHICLES, AND HAS NOT MADE AND DOES NOT HEREBY MAKE ANY
REPRESENTATION, WARRANTY OR COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO
MERCHANTABILITY, CONDITION, QUALITY, CAPABILITY, WORKMANSHIP, DURABILITY OR
SUITABILITY OF SUCH VEHICLES IN ANY RESPECT OR IN CONNECTION WITH OR FOR THE
PURPOSES OR USES OF SUCH LESSEE, OR ANY WARRANTY THAT THE LEASED VEHICLES WILL
SATISFY THE REQUIREMENTS OF ANY LAW OR ANY CONTRACT SPECIFICATION, OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, WITH RESPECT THERETO, AND AS BETWEEN THE LESSOR AND SUCH LESSEE, SUCH
LESSEE AGREES TO BEAR ALL SUCH RISKS AT ITS SOLE COST AND EXPENSE. EACH LESSEE
SPECIFICALLY WAIVES ALL RIGHTS TO MAKE CLAIMS AGAINST THE LESSOR AND ANY LEASED
VEHICLE FOR BREACH OF ANY WARRANTY OF ANY KIND WHATSOEVER AND, AS TO THE LESSOR,
EACH LESSEE LEASES THE LEASED VEHICLES "AS IS." The Lessor shall not be liable
for any failure or delay in delivering any Vehicle ordered for lease pursuant to
this Agreement, or for any failure to perform any provision hereof, resulting
from fire or other casualty, natural disaster, riot, strike or other labor
difficulty, governmental regulation or restriction, or any cause beyond the
Lessor's direct control. IN NO EVENT SHALL THE LESSOR BE LIABLE FOR ANY
INCONVENIENCES, LOSS OF PROFITS OR ANY OTHER CONSEQUENTIAL, INCIDENTAL OR
SPECIAL DAMAGES, WHATSOEVER OR HOWSOEVER CAUSED, WHETHER RESULTING FROM ANY
DEFECT IN OR ANY THEFT, DAMAGE, LOSS OR FAILURE OF ANY VEHICLE, OR OTHERWISE,
AND THERE SHALL BE NO ABATEMENT OF RENT BECAUSE OF THE SAME.
SECTION 3. TERM.
Section 3.1. Vehicle Lease Commencement Date. The "Vehicle Lease
Commencement Date" shall mean, for each Vehicle, the earlier of (a) the date
referenced in the Vehicle Acquisition Schedule with respect to such Vehicle, and
(b) the date that funds are
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expended by the Lessor to acquire or finance the acquisition of such Vehicle
(such date that funds are expended by the Lessor with respect to a Vehicle, the
"Vehicle Funding Date" for such Vehicle). A vehicle shall be deemed hereunder to
be a Vehicle leased under this Lease on each day during the period (the "Vehicle
Term") from and including the Vehicle Lease Commencement Date to but excluding
the Vehicle Lease Expiration Date.
Section 3.2. Lease Commencement Date. The "Lease Commencement Date" shall
mean the Closing Date for the first Series of Shared Series Notes issued under
the Indenture. The "Lease Expiration Date" shall mean the later of (i) the date
of the payment in full of all Series of Shared Series Notes included in Group I
and all outstanding Carrying Charges related thereto, and (ii) the Vehicle Lease
Expiration Date for the last Vehicle subject to lease by a Lessee hereunder. The
"Term" of this Agreement shall mean the period commencing on the Lease
Commencement Date and ending on the Lease Expiration Date.
SECTION 4. CONDITIONS PRECEDENT. The agreement of the Lessor to make
available any Acquired Vehicle for lease to the applicable Lessee, and to make
available Texas Vehicles or financing for the acquisition of any other Financed
Vehicle for lease to such Lessee upon such Lessee's placement of a Vehicle
Order, for itself or as agent of the Lessor, is subject to the terms and
conditions of the Indenture and subject to the satisfaction of the following
conditions precedent as of the Vehicle Lease Commencement Date for such Vehicle:
Section 4.1. No Default. No Lease Event of Default or Amortization Event
shall have occurred and be continuing on such date.
Section 4.2. Limitations of the Acquisition of Certain Vehicles. After
giving effect to the inclusion of such Vehicle under the Lease, there shall not
be a failure or violation of any conditions, requirements, or restrictions with
respect to the leasing of Eligible Vehicles under this Lease as is specified in
any related Series Supplement.
SECTION 5. RENT AND CHARGES. Each Lessee will pay Rent and certain other
charges on a monthly basis as set forth in this Section 5:
Section 5.1. Payment of Rent. On each Due Date, each Lessee shall pay to
the Lessor the aggregate of all Rent that has accrued during the Related Month
with respect to the Vehicles leased by such Lessee, as provided in the related
Lease Annexes.
Section 5.2. Payment of Availability Payment. On each Due Date, each
Lessee shall pay to the Lessor such Lessee's Pro Rata Share of an amount (the
"Availability Payment") in respect of the unutilized portion of the Maximum
Lease Commitment. "Availability Payment" with respect to each Due Date shall
equal the excess, if any, of (I) the sum of (a) the aggregate interest due on
all Outstanding Shared Series Notes included in Group I as of the Payment Date
next succeeding such Due Date, plus (b) an amount equal to all Carrying Charges
for the Related Month allocable to the Shared Series Notes included in Group I,
over
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(II) the sum of (a) any Monthly Variable Rent due on such Due Date, (b) any
Monthly Finance Rent due on such Due Date, and (c) any earnings on Permitted
Investments allocated to the Shared Series of Notes (less any portion thereof
allocated to the Retained Interestholder) accruing through the Determination
Date occurring prior to such Due Date and not included in the calculation of
Availability Payments with respect to any prior Due Date.
Section 5.3. Payment of Monthly Supplemental Payments. On each Due Date,
each Lessee shall pay to the Lessor the Monthly Supplemental Payments that have
accrued during the Related Month with respect to the Financed Vehicles leased
hereunder by such Lessee, as provided in Sections 6 and 7 of Annex B.
Section 5.4. Payment of Termination Payments, Casualty Payments, and Late
Return Payments. On each Due Date, each Lessee shall pay to the Lessor all
Termination Payments, Casualty Payments and Late Return Payments that have
accrued with respect to the Acquired Vehicles leased hereunder by such Lessee,
as provided in Sections 7, 12.3 and 13, respectively.
Section 5.5. Late Payment. In the event a Lessee fails to remit payment of
any amount due under this Lease on or before the Due Date, the amount not paid
will be considered delinquent and such Lessee will pay a late charge equal to
the product of (a) the VFR plus 1%, times (b) the delinquent amount for the
period from the Due Date to the date on which such delinquent amount is received
by the Trustee, times (c) the actual number of days elapsed during such period
divided by 360.
SECTION 6. INSURANCE.
Section 6.1. Fleet Insurance. Each Lessee shall at all times maintain or
cause to be maintained, with financially sound and reputable insurers, (a)
personal injury and damage insurance with respect to the Vehicles leased by such
Lessee hereunder, and (b) insurance with respect to properties and business
against loss or damage of the kinds customarily insured against by corporations
of established reputation engaged in the same or similar businesses and
similarly situated, of such types and in such amounts as are customarily carried
under similar circumstances by such other corporations. Each Lessee may, in lieu
of maintaining such insurance with insurers, self-insure.
Section 6.2. Information. Each Lessee shall, from time to time upon the
Lessor's or the Trustee's reasonable request, deliver to the Lessor and the
Trustee copies of certificates describing all insurance required by Section 6.1
which is then in effect.
SECTION 7. CASUALTY OBLIGATION. If a Vehicle becomes a Casualty, then the
applicable Lessee shall (a) promptly notify the Lessor of such occurrence, and
(b) in the case of an Acquired Vehicle, on the Due Date next succeeding the last
day of the Related Month in which the Lessee obtains actual knowledge that such
Vehicle has become a Casualty, pay to the Lessor an amount (a "Casualty
Payment") equal to the Net Book Value of such
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Vehicle, calculated as of the earlier of the last day of such Related Month and
the date such vehicle is disposed of or becomes a Casualty, as applicable. Upon
payment by the applicable Lessee to the Lessor in accordance herewith of the
Casualty Payment for any Acquired Vehicle that has become a Casualty, (i) the
Lessor shall cause title to such Vehicle to be transferred to such Lessee to
facilitate liquidation of such Vehicle by the Lessee, (ii) the Lessee shall be
entitled to any physical damage insurance proceeds applicable to such Acquired
Vehicle (if at such time the Lessee carries such insurance coverage), and (iii)
the Lien of the Master Collateral Agent on such Vehicle shall be released
thereby.
SECTION 8. VEHICLE USE. So long as no Lease Event of Default has occurred,
the Lessees may use Vehicles leased hereunder in the regular course of their
respective businesses, including subleasing such Vehicles to Eligible
Franchisees pursuant to Lessee Agreements, including Subleases, used in the
ordinary course of Lessee's business. Notwithstanding any such Lessee Agreement,
the applicable Lessee shall remain fully liable for its obligations under this
Agreement and the other Related Documents (including any obligation hereunder or
thereunder that it may cause any Franchisee to perform or fulfill). Each Lessee
shall cause all payments under the Lessee Agreements, to the extent such
payments relate to vehicles comprising the Master Collateral, to be deposited
directly into the Master Collateral Account, and upon the occurrence and during
the continuance of a Lease Event of Default, Liquidation Event of Default or
Limited Liquidation Event of Default, the Master Servicer shall promptly specify
to the Master Collateral Agent the allocation of such payments among Financing
Sources. Vehicle use shall be confined primarily to the United States, with
limited use outside the United States; provided, however, that the principal
place of business or rental office of the Eligible Franchisee with respect to
any Vehicles used outside the United States shall be located in the United
States. Each Lessee shall promptly and duly execute, deliver, file and record
all such documents, statements, filings and registrations, and take such further
actions as the Lessor, the Master Collateral Agent, the Master Servicer or the
Trustee shall from time to time reasonably request in order to establish,
perfect and maintain the Lessor's title to and interest in the Acquired Vehicles
and the related Certificates of Title as against such Lessee or any third party
in any applicable jurisdiction and to establish, perfect and maintain the Master
Collateral Agent's Lien on the Vehicles and the related Certificates of Title
(other than recordation of liens with respect to the Existing Fleet) as a
perfected lien in any applicable jurisdiction. Each Lessee may, at such Lessee's
sole expense, change the place of principal location of any Vehicles. After any
such change of location, the applicable Lessee shall take all actions necessary
(i) to maintain the Lien of the Master Collateral Agent on such Vehicles and the
Certificates of Title with respect to such Vehicles (other than recordation of
liens with respect to the Existing Fleet), and (ii) to meet or obtain all
material legal requirements applicable to such Vehicles. Following a Lease Event
of Default or Manufacturer Event of Default, and upon the Lessor's request, each
Lessee shall advise the Lessor in writing where all Vehicles leased by such
Lessee hereunder as of such date are principally located. The Lessees shall not
knowingly use any Vehicles, or knowingly permit the same to be used, for any
unlawful purpose. The Lessees shall and shall require the related Franchisees to
use reasonable precautions to prevent loss or damage to Vehicles. The Lessees
shall or shall cause the related Franchisees to comply with all
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applicable statutes, decrees, ordinances and regulations regarding acquiring,
titling, registering, leasing, insuring and disposing of Vehicles and shall or
shall require such related Franchisees to take reasonable steps to ensure that
operators are licensed. The Lessees shall or shall cause the related Franchisees
to perform, at its or their own expense, such vehicle preparation and
conditioning services with respect to Vehicles as are customary. The Lessor, the
Master Collateral Agent or the Trustee or any authorized representative of the
Lessor, the Master Collateral Agent or the Trustee may during reasonable
business hours from time to time, without disruption of the applicable Lessee's
or the related Franchisee's business, subject to applicable law, inspect
Vehicles and registration certificates, Certificates of Title and related
documents covering Vehicles wherever the same be located.
SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES.
Each Lessee, at its expense, shall be responsible for proper registration and
licensing of the Vehicles leased by it hereunder, and the titling of such
Vehicles in the name of the Lessor (in the case of Acquired Vehicles and Texas
Vehicles) or such Lessee (in the case of Vehicles in the Existing Fleet), in
each case (other than with respect to the Existing Fleet) with the Lien of the
Master Collateral Agent noted thereon, and where required, each Lessee shall or
shall cause the related Franchisees to have Vehicles inspected by any
appropriate governmental authority; provided, however, that notwithstanding the
foregoing, unless a Liquidation Event of Default shall have occurred and be
continuing, possession of all Certificates of Title shall remain with the
Servicer of the related Vehicles or the Master Servicer. Each Lessee shall pay
or cause to be paid all registration fees, title fees, license fees, traffic
summonses, penalties, judgments and fines incurred with respect to any Vehicle
leased hereunder by such Lessee during the Vehicle Term for such Vehicle or
imposed during the Vehicle Term for such Vehicle by any governmental authority
or any court of law or equity with respect to Vehicles in connection with the
Lessee's operation of Vehicles, and any such amounts paid by the Lessor, in its
discretion, on such Lessee's behalf will be reimbursed within thirty (30) days
of the Lessor notifying the Lessee of such payment. The Lessor agrees to execute
a power of attorney substantially in the form of Attachment B hereto (a "Power
of Attorney"), and such other documents as may be necessary in order to allow
each Lessee to title, register and dispose of the Acquired Vehicles and Texas
Vehicles leased by such Lessee hereunder; and each Lessee acknowledges and
agrees that with respect to the Acquired Vehicles, it has no right, title or
interest in or with respect to any Certificate of Title. Notwithstanding
anything herein to the contrary, the Lessor may terminate such Power of Attorney
as provided in Section 17.3.
SECTION 10. MAINTENANCE AND REPAIRS. Each Lessee shall or shall cause
the related Franchisees to pay for all maintenance and repairs to keep the
Vehicles leased by such Lessee hereunder in good working order and condition,
and shall or shall cause the related Franchisees to maintain such Vehicles as
required in order to keep the Manufacturer's warranty in force. Each Lessee
shall or shall cause the related Franchisees to return each Vehicle to an
authorized Manufacturer facility or the applicable Manufacturer's authorized
warranty station for warranty work. Each Lessee shall or shall cause the related
Franchisees to comply with any Manufacturer's recall of any Vehicle. Each Lessee
shall or shall cause
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the related Franchisees to pay, or cause to be paid, all usual and routine
expenses incurred in the use and operation of Vehicles including, but not
limited to, fuel, lubricants, and coolants. The Lessor, upon thirty (30) days'
prior written notice to the applicable Lessee, may pay any such expenses that
have not otherwise been paid by, or on behalf of, the Lessee (including any
failure by a related Franchisee to pay any such expenses), and any expenses
incurred by the Lessor on such Lessee's behalf for maintenance, repair,
operation or use by the Lessee of Vehicles will promptly be reimbursed (in any
event no later than the next monthly Due Date following such payment) by the
Lessee to the Lessor in the amount paid by the Lessor. The Lessees shall not
make any material alterations to any Vehicles without the prior consent of the
Lessor. Any improvements or additions to an Acquired Vehicle shall become and
remain the property of the Lessor, except that any addition or improvement to
such a Vehicle made by a Lessee shall remain the property of the Lessee if it
can be disconnected or removed from the Vehicle without impairing the
functioning of or resale value thereof, other than any function or value
provided by such addition or improvement.
SECTION 11. VEHICLE WARRANTIES. If a Vehicle is covered by a
Manufacturer's warranty, the applicable Lessee and each related Franchisee,
during the Vehicle Term, shall have the right to make any claims under such
warranty which the Lessor could make. As provided in Section 2.4, the Lessor
makes no warranty or representation whatsoever, express or implied, with respect
to any Vehicle.
SECTION 12. PROGRAM VEHICLE USAGE REQUIREMENTS AND DISPOSITION.
Section 12.1. Usage. As used herein, the term "vehicle turn-in condition"
with respect to each Program Vehicle leased hereunder by a Lessee means a set of
criteria for evaluating Program Vehicles upon their delivery at the end of the
applicable Vehicle Terms, which criteria will be determined in accordance with
the related Vehicle Disposition Program. Each Program Vehicle leased hereunder
by a Lessee not meeting the applicable Vehicle Disposition Program's vehicle
turn-in condition requirements will, unless redesignated as a Non-Program
Vehicle in accordance with Section 14, be purchased by such Lessee in accordance
with the Casualty procedure set forth in Section 7 or otherwise disposed of in
accordance with the late delivery procedure set forth in Section 13, as
applicable.
Section 12.2. Disposition Procedure. Prior to the end of the Vehicle Term,
each Lessee will or will cause the related Franchisee to deliver each Program
Vehicle leased hereunder by such Lessee (other than a Casualty) to the nearest
related Manufacturer official auction or other facility designated by such
Manufacturer at such Lessee's sole expense and in accordance with the terms of
the applicable Vehicle Disposition Program. Any transportation allowance (for
delivery costs) and any rebates or credits applicable to the unexpired term of
any license plates for a Vehicle shall inure to the benefit of and, upon receipt
thereof by the Lessor, the Trustee or the Master Collateral Agent, shall
promptly be paid over to the applicable Lessee. Each Lessee will comply with the
requirements of law and the requirements of the Vehicle Disposition Programs in
connection with, among other things, the
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delivery of Certificates of Title, documents of transfer signed as necessary,
signed Condition Reports, and signed odometer statements for the Program
Vehicles.
Section 12.3. Termination Payments. On the Due Date next succeeding the
earlier of (a) the last day of the Related Month in which the Repurchase Payment
or the Guaranteed Payment, as the case may be, from a Manufacturer pursuant to
its Vehicle Disposition Program with respect to any Acquired Vehicle that is a
Program Vehicle, is received by the Lessor, the Master Collateral Agent or the
Trustee (including by deposit into the Collection Account or the Master
Collateral Account), and (b) the thirtieth (30th) day after the expiration of
the Maximum Term for such Vehicle, the applicable Lessee shall pay to the Lessor
in respect of such Vehicle any Excess Damage Charges, Excess Mileage Charges,
early turnback surcharges and any other similar charges and penalties
(collectively, a "Program Vehicle Termination Payment") as determined by the
Manufacturer or its agent in accordance with the applicable Vehicle Disposition
Program; and on the Due Date next succeeding the earlier of (i) the last day of
the Related Month in which Disposition Proceeds from the sale or other
disposition of an Acquired Vehicle that is a Non-Program Vehicle, but is not a
Casualty, are received by the Lessor, the Master Collateral Agent or the Trustee
(including by deposit into the Collection Account or the Master Collateral
Account), and (ii) the thirtieth (30th) day after the date which is twenty-four
(24) months after the date of the original new dealer invoice for such Vehicle,
the applicable Lessee shall pay to the Lessor in respect of such Vehicle an
amount (a "Non-Program Vehicle Termination Payment") equal to the quotient of
(x) the sum of all Program Vehicle Termination Payments for the Related Month in
respect of Vehicles leased by such Lessee, divided by (y) the number of Acquired
Vehicles leased by such Lessee in respect of which such Program Vehicle
Termination Payments are payable (Program Vehicle Termination Payments and
Non-Program Vehicle Termination Payments being, collectively, "Termination
Payments"). The provisions of this Section 12.3 will survive the expiration or
earlier termination of the Term.
SECTION 13. LATE RETURN PAYMENTS. If an Acquired Vehicle which is a
Program Vehicle is not returned to the Manufacturer or accepted by the
Manufacturer in accordance with the related Vehicle Disposition Program prior to
the expiration of the Maximum Term for such Vehicle in accordance with Section
12.2, the Lessee of such Vehicle hereunder shall, unless such Vehicle has been
redesignated as a Non-Program Vehicle in accordance with Section 14, (a)
promptly notify the Lessor of its failure to return such Vehicle to the
Manufacturer or to sell such Vehicle in accordance with the applicable Auction
Procedures during the Vehicle Term, (b) use commercially reasonable efforts to
sell or otherwise dispose of such Vehicle in a manner reasonably likely to
maximize proceeds from such disposition and consistent with industry practice,
(c) cause the Disposition Proceeds, if any, from any such sale or disposition to
be paid to the Master Collateral Agent, in accordance with paragraph 10(d) of
Annex A, as applicable, and (d) on the Due Date next succeeding the earlier of
(i) the last day of the Related Month in which such Disposition Proceeds are
received by the Lessor, the Master Collateral Agent or the Trustee (including by
deposit into the Collection Account or the Master Collateral Account), and (ii)
the thirtieth (30th) day after the expiration of the Maximum Term for such
Vehicle, pay to the Lessor an
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amount (a "Late Return Payment") equal to the excess of (x) the Net Book Value
of such Vehicle, calculated as of the first day of the calendar month in which
such Maximum Term expired reduced by the Depreciation Charges accrued with
respect to such Vehicle through the date such Maximum Term expired, over (y) the
dollar amount of such Disposition Proceeds (which Late Return Payment amount may
be equal to, but not less than, zero dollars). The foregoing shall not affect
the applicable Lessee's obligation to pay on the related Due Date all Monthly
Base Rent accrued with respect to a Vehicle through the date the Maximum Term
for such vehicle expires.
SECTION 14. REDESIGNATION OF VEHICLES. (a) Upon a Program Vehicle's
becoming ineligible for repurchase by its Manufacturer or for sale in accordance
with applicable Auction Procedures, due to physical damage, repair charges or
accrued mileage, in each case in excess of that permitted under the related
Vehicle Disposition Program, or due to any failure or inability to return the
Vehicle to the Manufacturer or the designated auction site prior to the
expiration of the Maximum Term, or due to any other event or circumstance, the
applicable Servicer may designate the related Vehicle as a Non-Program Vehicle
if such Vehicle, as a Non-Program Vehicle, will be an Eligible Vehicle and if
either (a) such designation meets the conditions of Section 4.2 or (b) the
Noteholders holding the requisite Invested Amount of each applicable Series of
Notes waive, in each case as and to the extent permitted under the related
Series Supplement, the requirements of Section 4.2 as applied to this Section 14
and all such other conditions, requirements or restrictions with respect to
which a failure or violation has occurred; provided, in each case, that (x) any
additional Monthly Base Rent due with respect to each such Vehicle, relating to
the decrease, if any, of the Net Book Value of such Vehicle under the newly
applicable Depreciation Schedule, shall be paid on the next succeeding Due Date,
and (y) the minimum level of Enhancement required under the applicable Series
Supplement, after giving effect to such designation, shall be satisfied on the
date of designation.
(b) The applicable Servicer may designate a Non-Program Vehicle as a
Program Vehicle; provided, however, that (i) upon such redesignation and through
and including the applicable Vehicle Lease Expiration Date, such Vehicle shall
be an Eligible Vehicle, (ii) such Vehicle qualifies as an Eligible Vehicle under
the applicable Eligible Vehicle Disposition Program and (iii) that the
Capitalized Cost, Net Book Value and Depreciation Charges with respect to such
Vehicle shall be recalculated as of the date of such redesignation as if such
Vehicle was a Program Vehicle at the time of the initial related Vehicle Lease
Commencement Date. Upon any redesignation of a Vehicle pursuant to this Section
14(b), (x) the Lessor shall advance to the applicable Manufacturer the
difference (if any) between the original Capitalized Cost of such Vehicle and
the Capitalized Cost of such Vehicle upon redesignation, which amount shall be
deemed to be part of the Initial Acquisition Cost of such Vehicle and (y) the
applicable Lessee shall be entitled to a credit against the Monthly Base Rent
due on the next succeeding Due Date in an amount equal to the excess (if any) of
the Net Book Value of such Vehicle upon such redesignation over the original Net
Book Value of such Vehicle as of such date.
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SECTION 15. GENERAL INDEMNITY.
Section 15.1. Indemnity of the Lessor. Each Lessee agrees to indemnify and
hold harmless the Lessor and the Lessor's directors, officers, agents and
employees (collectively, together with the Persons subject to indemnity under
Section 15.2, the "Indemnified Persons") against any and all claims, demands and
liabilities of whatsoever nature, and all costs and expenses, relating to or in
any way arising out of:
Section 15.1.1. the ordering, delivery, acquisition, title on
acquisition, rejection, installation, possession, titling, retitling,
registration, re-registration, custody by such Lessee of title and
registration documents, use, non-use, misuse, operation, deficiency,
defect, transportation, repair, control or disposition of any Vehicle
leased hereunder or to be leased hereunder by such Lessee, including,
without limitation, any such Vehicle subleased to a Franchisee of such
Lessee and any of the foregoing actions, events or circumstances occurring
or arising in connection with such subleasing, any related Lessee
Agreement, any related Franchisee or any customer of any such related
Franchisee. The foregoing shall include, without limitation, any liability
(or any alleged liability) of the Lessor to any third party arising out of
any of the foregoing, including, without limitation, all legal fees, costs
and disbursements arising out of such liability (or alleged liability);
Section 15.1.2. all (i) federal, state, county, municipal, foreign
or other fees and taxes of whatsoever nature, including but not limited to
license, qualification, registration, franchise, sales, use, gross
receipts, ad valorem, business, property (real or personal), excise, motor
vehicle, and occupation fees and taxes, and all federal, state, local and
foreign income taxes (including any taxes payable by the Lessor as a
result of its being a member of any group of corporations including such
Lessee that file any tax returns on a consolidated or combined basis), and
penalties and interest thereon, whether assessed, levied against or
payable by the Lessor or otherwise, with respect to any Vehicle leased by
such Lessee hereunder or the acquisition, purchase, sale, lease, sublease,
rental, use, operation, control, ownership or disposition of any such
Vehicle by any Person or measured in any way by the value thereof or by
the business of, investment by, or ownership by the Lessor or such Lessee
with respect thereto, and (ii) documentary, stamp, filing, recording,
mortgage or other taxes, if any, which may be payable by the Lessor or
such Lessee in connection with this Agreement or the other Related
Documents or the related Lessee Agreements and any penalties or interest
with respect thereto;
Section 15.1.3. any violation by such Lessee of this Agreement or of
any Related Documents or Lessee Agreements to which such Lessee is a party
or by which it is bound or any laws, rules, regulations, orders, writs,
injunctions, decrees, consents, approvals, exemptions, authorizations,
licenses and withholdings of objecting of any governmental or public body
or authority and all other requirements having the force
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of law applicable at any time to any Vehicle or any action or transaction
by such Lessee with respect thereto or pursuant to this Agreement;
Section 15.1.4. all out of pocket costs of the Lessor (including, to
the extent not satisfied by the Initial Purchasers, the reasonable fees
and out-of-pocket expenses of counsel for the Lessor) in connection with
the execution, delivery and performance of this Agreement and the other
Related Documents, including, without limitation, overhead expenses and
any and all fees of the Trustee, Paying Agent, Clearing Agencies and
Master Collateral Agent, all fees payable in connection with any
Enhancement, any and all fees of the Servicer under the Indenture, fees
payable to the Rating Agencies and any underwriting or placement agency
fees incurred in connection with the sale of the Notes; and
Section 15.1.5. all out of pocket costs and expenses (including
reasonable attorneys' fees and legal expenses) incurred by the Lessor, the
Master Collateral Agent, the Trustee or the Noteholders in connection with
the administration, enforcement, waiver or amendment of this Agreement and
any other Related Documents, and all indemnification obligations of the
Lessor under the Related Documents.
Notwithstanding the foregoing, no Lessee shall have any duty to indemnify
any Indemnified Person for any consequential or punitive damages or claims,
demands, liabilities, costs, or expenses to the extent such claim, demand,
liability, cost or expense arises out of or is due to such Indemnified Person's
gross negligence or willful misconduct [and a Lessee's indemnification
obligation under Sections 15.1.4 and 15.1.5 shall be limited to such Lessee's
Pro Rata Share of the aggregate amount required to be paid by the Lessees
thereunder].
Section 15.2. Indemnification of the Trustee. Each Lessee agrees to
indemnify and hold harmless the Trustee and the Trustee's officers, directors,
agents and employees against any and all claims, demands and liabilities of
whatsoever nature, and all costs and expenses, relating to or in any way arising
out of: (i) any acts or omissions of such Lessee pursuant to this Agreement and
(ii) the Trustee's appointment under the Indenture and the Trustee's performance
of its obligations thereunder, or any document pertaining to any of the
foregoing to which the Trustee is a signatory, including, but not limited to any
judgment, award, settlement, reasonable attorneys' fees and other costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided, however, the Lessees shall have no duty
to indemnify the Trustee, or any other Indemnified Person pursuant to this
Section 15.2, to the extent such claim, demand, liability, cost or expense
arises out of or is due to the Trustee's or such Indemnified Person's gross
negligence or willful misconduct [and a Lessee's indemnification obligation
under clause (ii) above shall be limited to such Lessee's Pro Rata Share of the
aggregate amount required to be paid by the Lessee's thereunder]. Any such
indemnification shall not be payable from the assets of RCFC. The provisions of
this indemnity shall run directly to and be enforceable by the Trustee or any
other Indemnified Person subject to the limitations hereof. The
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indemnification provided for in this Section 15.2 shall be in addition to any
other indemnities available to the Trustee and shall survive the termination of
the duties of the Lessees hereunder and the termination of this Agreement or a
document to which the Trustee is a signatory or the resignation or removal of
the Trustee.
Section 15.3. Reimbursement Obligation by the Lessees. The applicable
Lessee shall forthwith upon demand reimburse the Lessor or the Trustee, as the
case may be, for any sum or sums expended with respect to any of the foregoing,
or shall pay such amounts directly upon request from the Lessor or the Trustee;
provided, however, that, if so requested by such Lessee, the Lessor or the
Trustee shall submit to such Lessee a statement documenting any such demand for
reimbursement or prepayment. To the extent that such Lessee in fact indemnifies
the Lessor or the Trustee under the indemnity provisions of this Agreement, such
Lessee shall be subrogated to the rights of the Lessor or the Trustee, as the
case may be, in the affected transaction and shall have a right to determine the
settlement of claims therein. The foregoing indemnity as contained in this
Section 15 shall survive the expiration or earlier termination of this Agreement
or any lease of any Vehicle hereunder; provided, however, that the factual or
legal circumstances giving rise to the Lessor's exposure to liability occur
during the period that the Lease is in effect as to the Vehicle for which such
exposure to liability arose.
Section 15.4. Notice to Lessee of Claims. The Lessor or the Trustee, as
the case may be, shall notify the applicable Lessee in writing (a "Notice of
Claim") of the pendency of any such claim, action or facts referred to in this
Section 15 for which indemnity may be required.
Section 15.5. Defense of Claims. Defense of any claim referred to in this
Section 15 for which indemnity may be required shall, at the option and request
of the applicable Lessee, be conducted by such Lessee. Following receipt of any
Notice of Claim, such applicable Lessee will inform the Indemnified Person of
its election to defend such claim. Such Indemnified Person may participate in
any such defense at its own expense, provided such participation does not
interfere with such Lessee's defense. Each Lessee agrees that no Indemnified
Person will be liable to such Lessee for any claim caused directly or indirectly
by the inadequacy of any Vehicle for any purpose or any deficiency or defect
therein or the use or maintenance thereof or any repairs, servicing or
adjustments thereto or any delay in providing or failure to provide such or any
interruption or loss of service or use thereof or any loss of business, all of
which shall be the risk and responsibility of such Lessee, except to the extent
that any of the foregoing is caused by the gross negligence or willful
misconduct of such Indemnified Person. The rights and indemnities of each
Indemnified Person hereunder are expressly made for the benefit of, and will be
enforceable by, each Indemnified Person notwithstanding the fact that such
Indemnified Person is not or is no longer a party to (or entitled to receive the
benefits of) this Agreement. This general indemnity shall not affect any claims
of the type discussed above which a Lessee may have against the Manufacturer.
SECTION 16. ASSIGNMENT. No Lessee shall, except as provided in the
Indenture, without prior written consent of the Lessor and the Trustee, assign
this Agreement or any of
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its rights hereunder to any other party; provided, however, a Lessee may
sublease or rent Vehicles leased by it under the terms of such Lessee's normal
Sublease agreements to Eligible Franchisees, and such Lessee and such Eligible
Franchisees may rent such Vehicles to consumers in the ordinary course of their
daily rental business. Any purported assignment in violation of this Section 16
shall be void and of no force or effect. Nothing contained herein shall be
deemed to restrict the right of a Lessee to acquire or dispose of, by purchase,
lease, financing, or otherwise, motor vehicles that are not subject to the
provisions of this Agreement.
SECTION 17. DEFAULT AND REMEDIES THEREFOR.
Section 17.1. Events of Default. Any one or more of the following will
constitute an event of default (a "Lease Event of Default") as that term is used
herein:
Section 17.1.1. there occurs (i) a default in the payment of any
Monthly Base Rent, Monthly Variable Rent, Monthly Finance Rent,
Termination Payment, Casualty Payment, Late Return Payment, Monthly
Supplemental Payment or Availability Payment, and the continuance thereof
for five (5) Business Days after notice thereof by the Lessor, the Master
Collateral Agent or the Trustee to the applicable Lessee, or (ii) a
default in the payment of any amount payable under this Agreement (other
than amounts described in clause (i) above) and the continuance thereof
for five (5) Business Days after notice thereof by the Lessor, the Master
Collateral Agent or the Trustee to the applicable Lessee and the
Guarantor;
Section 17.1.2. any unauthorized assignment or transfer of this
Agreement by a Lessee or the Guarantor occurs;
Section 17.1.3. the failure of a Lessee or the Guarantor to observe
or perform any other covenant, condition, agreement or provision hereof,
which failure has a Material Adverse Effect on the Lessor, and such
default continues for more than sixty (60) days after the earlier to occur
of (a) the date a Responsible Officer of such Lessee obtains knowledge of
such default or (b) the date written notice thereof is delivered by the
Lessor, the Master Collateral Agent or the Trustee to such Lessee;
provided, however, that if such failure cannot reasonably be cured within
such sixty (60) day period, no Lease Event of Default shall result
therefrom so long as, within such sixty (60) day period, such Lessee (i)
commences to cure same, (ii) delivers written notice to the Lessor, the
Master Collateral Agent and the Trustee notifying the Lessor, the Master
Collateral Agent and the Trustee of such default and setting forth the
steps such Lessee intends to take in order to cure such default and (iii)
thereafter diligently prosecutes such cure to completion and completely
cures such default on or before the ninetieth (90th) day after the earlier
of the dates set forth in clause (a) and clause (b) above;
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Section 17.1.4. if any representation or warranty made by a Lessee
or the Guarantor proves untrue in any respect as of the date of the
issuance or making thereof, which inaccuracy or falsehood has a Material
Adverse Effect on the Lessor, and such inaccuracy or falsehood is not
cured within sixty (60) days after notice thereof from the Lessor, the
Master Collateral Agent or the Trustee to such Lessee; or
Section 17.1.5. an Event of Bankruptcy occurs with respect to a
Lessee or the Guarantor.
Section 17.2. Effect of Lease Event of Default. If (i) a Lease Event of
Default described in Section 17.1.1(i), 17.1.2 or 17.1.5 shall occur, then the
Monthly Base Rent, the Monthly Supplemental Payment and Casualty Payments (in
each case calculated as if all Vehicles had become a Casualty for the Related
Month), the Monthly Variable Rent, the Availability Payment and the Monthly
Finance Rent (in each case calculated as if the full amount of interest,
principal and other charges under all outstanding Series of Notes included in
Group I were then due and payable in full), Monthly Base Rent, Termination
Payments and Late Return Payments shall, automatically, without further action
by the Lessor or the Trustee, become immediately due and payable or (ii) any
other Lease Event of Default shall occur, the Lessor or the Trustee may declare
the Rent and all other charges and payments (calculated as described in clause
(i) above) to be due and payable, whereupon such Rent and such other charges and
payments (as so calculated) shall, subject to Section 17.4, become immediately
due and payable.
Section 17.3. Rights of Lessor Upon Lease Event of Default. If a Lease
Event of Default shall occur, then the Lessor at its option may:
(i) Proceed by appropriate court action or actions, either at law or
in equity, to enforce performance by the Lessees of the applicable
covenants and terms of this Agreement or to recover damages for the breach
hereof calculated in accordance with Section 17.4; or
(ii) Subject to the rights of the Franchisees under the Subleases,
by notice in writing to each Lessee, terminate this Agreement in its
entirety and/or the right of possession hereunder of the Lessees as to the
Vehicles, and the Lessor may direct delivery by the Lessees of documents
of title to the Vehicles, whereupon all rights and interests of the
Lessees to the Vehicles (except as otherwise provided herein) will cease
and terminate (but the Lessees will remain liable hereunder as herein
provided, calculated in accordance with Section 17.4); and thereupon, the
Lessor or its agents may, subject in each case to the rights of the
Franchisees under the applicable Subleases, peaceably enter upon the
premises of the Lessees or other premises where the Vehicles may be
located and take possession of them and thenceforth hold, possess and
enjoy the same free from any right of the Lessees, or their successors or
assigns (other than the Franchisees), to employ the Vehicles for any
purpose whatsoever consistent with the mitigation of losses and damages,
and the Lessor will, nevertheless,
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have a right to recover from the Lessees any and all amounts which under
the terms of Section 17.2 (as limited by Section 17.4) of this Agreement
may be then due. The Lessor will provide the applicable Lessee with
written notice of the place and time of any sale of Financed Vehicles
pursuant to this Section 17.3 at least five (5) days prior to the proposed
sale, which shall be deemed commercially reasonable, and such Lessee may
purchase the Vehicle(s) at the sale. Each and every power and remedy
hereby specifically given to the Lessor will be in addition to every other
power and remedy hereby specifically given or now or hereafter existing at
law, in equity or in bankruptcy and each and every power and remedy may be
exercised from time to time and simultaneously and as often and in such
order as may be deemed expedient by the Lessor; provided, however, that
the measure of damages recoverable against a Lessee will in any case be
calculated in accordance with Section 17.4. All such powers and remedies
will be cumulative, and the exercise of one will not be deemed a waiver of
the right to exercise any other or others. No delay or omission of the
Lessor in the exercise of any such power or remedy and no renewal or
extension of any payments due hereunder will impair any such power or
remedy or will be construed to be a waiver of any default or any
acquiescence therein. Any extension of time for payment hereunder or other
indulgence duly granted to a Lessee will not otherwise alter or affect the
Lessor's rights or the obligations hereunder of such Lessee. The Lessor's
acceptance of any payment after it will have become due hereunder will not
be deemed to alter or affect the Lessor's rights hereunder with respect to
any subsequent payments or defaults therein; or
(iii) By notice in writing to a Lessee, terminate the Power of
Attorney of such Lessee.
Section 17.4. Measure of Damages. If a Lease Event of Default occurs and
the Lessor, the Master Collateral Agent or the Trustee exercises the remedies
granted to the Lessor, the Master Collateral Agent or the Trustee under this
Section 17 or under Section 8.2 of the Base Indenture, the amount that the
Lessor shall be permitted to recover [from the defaulting Lessee] shall be equal
to:
(i) all Rent and payments [due from the defaulting Lessee] under
this Agreement (calculated as provided in Section 17.2); plus
(ii) any damages and expenses (other than punitive and consequential
damages), which the Lessor, the Master Collateral Agent or the Trustee
will have sustained by reason of the Lease Event of Default, together with
reasonable sums for such attorneys' fees and such expenses as will be
expended or incurred in the seizure, storage, rental or sale of the
Vehicles or in the enforcement of any right or privilege hereunder or in
any consultation or action in such connection; plus
(iii) all other amounts due and payable [by the defaulting Lessee]
under this Agreement; plus
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(iv) interest from time to time on amounts due and unpaid under this
Agreement at the VFR plus 1%, computed from the date of the Lease Event of
Default or the date payments were originally due the Lessor under this
Agreement or from the date of each expenditure by the Lessor which is
recoverable from a Lessee pursuant to this Section 17, as applicable, to
and including the date payments are made by the Lessee; minus
(v) an amount equal to all sums realized by the Lessor, the Master
Collateral Agent and the Trustee from the liquidation of the Financed
Vehicles [(other than a Texas Vehicle)] leased hereunder (either by
receipt of payment from the Manufacturers under Vehicle Disposition
Programs, from sales of Vehicles to third parties, or otherwise),
provided, however, that if a Financed Vehicle [(other than a Texas
Vehicle)] is delivered to the Manufacturer or the designated auction site
for repurchase by the Manufacturer under the applicable Vehicle
Disposition Program for sale in accordance with the applicable Auction
Procedures, respectively, and such Vehicle is accepted for repurchase or
sale by such Manufacturer (as evidenced by a Condition Report indicating
that such Vehicle conforms to the requirements for repurchase or sale
under such Vehicle Disposition Program), the Lessor and the Trustee shall
be deemed to have received thirty (30) days after the date of such
acceptance or sale on account of this clause (v) an amount equal to the
Net Book Value of such Vehicle, calculated as of its Disposition Date
(less any Termination Payments payable in respect of such Vehicle).
Section 17.5. Application of Proceeds. The proceeds of any sale or other
disposition of any Financed Vehicles pursuant to Section 17.3 shall be applied
in the following order: (i) to the reasonable costs and expenses incurred by the
Lessor in connection with such sale or disposition, including any reasonable
costs associated with repairing such Vehicles, and reasonable attorneys' fees in
connection with the enforcement of this Agreement, (ii) to the payment of
outstanding Rent owing from the applicable Lessee and payments under the Lease
owing from the applicable Lessee (such proceeds to be applied first, to
outstanding Monthly Variable Rent and Monthly Finance Rent pro rata, second, to
outstanding Availability Payments, third, to outstanding Base Rent and Monthly
Supplemental Payments pro rata, fourth, to outstanding Termination Payments,
Casualty Payments and Late Return Payments pro rata and fifth, to outstanding
late charges pursuant to Sections 5.5 and 17.4(iv)), (iii) to the payment of all
other amounts due hereunder from such Lessee, (iv) to the payment of any amounts
to the Lessor, or such Person(s) as may be lawfully entitled thereto, and (v)
any remaining proceeds to such Lessee.
SECTION 18. MANUFACTURER EVENTS OF DEFAULT. Upon the occurrence of any of
the following events (each, a "Manufacturer Event of Default") with respect to a
Manufacturer, the Lessees on behalf of the Lessor (a) shall no longer place
Vehicle Orders for additional Program Vehicles from such Manufacturer (each, a
"Defaulting Manufacturer") and (b) shall cancel any Vehicle Order with such
Defaulting Manufacturer to which a vehicle
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identification number (a "VIN") has not been assigned as of the date such
Manufacturer Event of Default occurs:
Section 18.1. The failure of such Manufacturer to pay Guaranteed Payments,
Repurchase Payments and/or Incentive Payments due under, respectively, such
Manufacturer's Vehicle Disposition Programs and its incentive programs, in an
aggregate amount in excess of [$ ] (net of amounts that are the subject of
a good faith dispute, as evidenced in writing by either the applicable Lessee or
the Manufacturer questioning the accuracy of the amounts paid or payable in
respect of any such Vehicle Disposition Programs or incentive programs), which
failure, in the case of each such Guaranteed Payment, Repurchase Payment and/or
Incentive Payment included in such amount in excess of [$ ] continues for
more than ninety (90) days following the Disposition Date for the related
Vehicle.
Section 18.2. The occurrence of an Event of Bankruptcy with respect to
such Manufacturer.
SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE. Pursuant to Section
7701 of the Code and as set forth in Attachment C hereto, each Lessee will
warrant and certify that (1) such Lessee intends to use the Acquired Vehicles in
a trade or business of such Lessee, and (2) such Lessee has been advised that it
will not be treated as the owner of the Acquired Vehicles for federal income tax
purposes.
SECTION 20. SURVIVAL. In the event that, during the term of this
Agreement, a Lessee becomes liable for the payment or reimbursement of any
obligations, claims or taxes pursuant to any provision hereof, such liability
will continue, notwithstanding the expiration or termination of this Agreement,
until all such amounts are paid or reimbursed by such Lessee.
SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL AGENT AND
TRUSTEE. Notwithstanding anything to the contrary contained in this Agreement,
each Lessee and the Guarantor acknowledges that each of the Lessees and the
Lessor, pursuant to the Master Collateral Agency Agreement, has granted a
security interest to the Master Collateral Agent, for the benefit of the
Trustee, in all of its right, title and interest in, to and under the Vehicles,
the related Vehicle Disposition Programs, the Master Collateral Account and all
other Master Collateral specified in the Master Collateral Agency Agreement as
being pledged by Thrifty, Dollar and RCFC, and each Lessee and the Guarantor
further acknowledges that the Lessor, pursuant to the Indenture, has granted a
security interest to the Trustee in all of its right, title and interest in, to
and under the RCFC Agreements, the Collection Account and the other Collateral
described in the Indenture. Accordingly, each Lessee and the Guarantor agrees
that:
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(i) Subject to the terms of the Indenture, the Trustee shall have
all the rights, powers, privileges and remedies of the Lessor hereunder.
Specifically, each Lessee and the Guarantor agrees that, upon the
occurrence of an Amortization Event, the Trustee or, with respect to any
Master Collateral, the Master Collateral Agent (for and on behalf of the
Trustee) may exercise any right or remedy against each Lessee or the
Guarantor provided for herein or in the Indenture or the Master Collateral
Agency Agreement and none of the Lessees or the Guarantor will interpose
as a defense that such claim should have been asserted by the Lessor;
(ii) Upon the delivery by the Master Collateral Agent or the Trustee
of any notice to a Lessee or the Guarantor stating that a Lease Event of
Default or an Amortization Event with respect to such Lessee has occurred,
then such Lessee or the Guarantor will, if so requested by the Master
Collateral Agent (with respect to the Master Collateral) or the Trustee
(with respect to the Collateral), treat the Master Collateral Agent or the
Trustee or the Master Collateral Agent's or the Trustee's designee, as the
case may be, for all purposes as the Lessor hereunder and in all respects
comply with all obligations under this Agreement that are asserted by the
Master Collateral Agent or the Trustee as the successor to the Lessor
hereunder, irrespective of whether such Lessee or the Guarantor has
received any such notice from the Lessor;
(iii) Pursuant to the Indenture, the Lessor hereby irrevocably
authorizes and directs each Lessee to, and each Lessee shall, make
payments of Rent hereunder directly to the Trustee for deposit in the
Group I Collection Account established by the Trustee for receipt of such
payments pursuant to the Indenture, and such payments shall discharge the
obligation of such Lessee to the Lessor hereunder with respect to Rent to
the extent of such payments. Each Lessee further acknowledges that
pursuant to the Master Collateral Agency Agreement, the Lessor has
irrevocably authorized and directed such Lessee to, and such Lessee shall,
cause all payments under the related Lessee Agreements, each Vehicle
Disposition Programs, and all other Master Collateral pledged by such
Lessee to the Master Collateral Agent for the benefit of the Trustee (as
Beneficiary on behalf of the holders of each Series of Notes included in
Group I), to be made directly to the Master Collateral Agent for deposit
in the Master Collateral Account established by the Lessor for receipt of
such payments pursuant to the Master Collateral Agency Agreement, and each
such payment (other than any payment that is subject to distribution to
such Lessee or its designee pursuant to Section 2.5(b) of the Master
Collateral Agency Agreement and that is not transferred to the Collection
Account) shall constitute a prepayment in respect of the obligation of
such Lessee to pay the Rent due hereunder on the next succeeding Due Date.
Upon written notice to a Lessee of a sale or assignment by the Trustee or
Master Collateral Agent of its right, title and interest in moneys due
under this Agreement or the Master Collateral Agency Agreement to a
successor Trustee or Master Collateral Agent, such Lessee shall thereafter
make payments of Rent hereunder or payments in respect of the Master
Collateral, as applicable, to the party specified in such notice;
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(iv) Upon request made by the Master Collateral Agent at any time,
each Lessee will take such actions (other than recordation of liens with
respect to the Existing Fleet) as are requested by the Master Collateral
Agent to assist the Master Collateral Agent in maintaining the Master
Collateral Agent's perfected security interest in the Vehicles leased by
such Lessee under this Agreement, the Certificates of Title with respect
thereto and the related Master Collateral pursuant to the Master
Collateral Agency Agreement; and
(v) A security interest in the Lessor's rights under this Agreement
has been granted by the Lessor to the Trustee pursuant to the Indenture as
collateral security only for all Series of Notes included in Group I and,
accordingly, all references herein to "all" Series of Notes shall refer
only to all Series of Notes included in Group I.
SECTION 22. MODIFICATION AND SEVERABILITY. The terms of this Agreement
will not be waived, altered, modified, amended, supplemented or terminated in
any manner whatsoever except by a written instrument signed by the Lessor, each
Lessee and (except as to matters referred to in Section 27.3) the Guarantor, and
consented to in writing by the Master Collateral Agent and the Trustee, the
Required Group I Noteholders and each Enhancement Provider with respect to each
Series of Notes included in Group I. If any part of this Agreement is not valid
or enforceable according to law, all other parts will remain enforceable. The
Lessor shall provide prompt written notice to each Rating Agency of any such
waiver, modification or amendment.
Notwithstanding the foregoing provisions of this Section 22, the Lessor,
the Lessees and the Guarantor may, at any time and from time to time, without
the consent of the Trustee or any Noteholders, enter into any amendment,
supplement or other modification to this Lease to cure any apparent ambiguity or
to correct or supplement any provision in this Lease that may be inconsistent
with any other provision herein; provided, however, that (i) any such action
shall not have a materially adverse effect on the interests of any Enhancement
Provider for a Series of Notes included in Group I, based upon, at the request
of the Trustee, an Opinion of Counsel and an officers' certificate of the Lessor
and each Lessee addressed to the Trustee and (ii) a copy of such amendment,
supplement or other modification is furnished to the Trustee, each Enhancement
Provider with respect to any Series of Notes included in Group I and each Rating
Agency in accordance with the notice provisions hereof not later than ten days
prior to the execution thereof by the Lessor, the Lessees and the Guarantor.
SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES. Each Lessee and
Servicer represents and warrants to the Lessor, as to itself and the Vehicles
leased by it hereunder, and the Guarantor represents and warrants to the Lessor,
as to itself and as to each Lessee and Servicer, that as of the Closing Date
with respect to the first Series of Shared Series Notes:
Section 23.1. Due Organization, Authorization, No Conflicts, Etc. Each of
the Lessees and the Guarantor is a corporation duly organized and validly
existing and in good
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standing under the laws of the jurisdiction of its incorporation and is duly
qualified and in good standing in each jurisdiction where, because of the nature
of its activities or properties, the failure so to qualify would have a Material
Adverse Effect on such Lessee or the Guarantor. The execution, delivery and
performance by each Lessee and the Guarantor of this Agreement and the other
Related Documents to be executed and delivered by it are within its corporate
powers, have been duly authorized by all necessary corporate action (including
shareholder approval, if required), have received all necessary governmental and
other consents, approvals (in each case if any shall be required), and do not
and will not contravene or conflict with, or create a default, breach, Lien or
right of termination or acceleration under, any Requirement of Law or
Contractual Obligation binding upon it, other than such default, breach, Lien or
right of termination or acceleration which does not have a Material Adverse
Effect on such Lessee or the Guarantor, as applicable. This Agreement and each
other Related Document to be executed and delivered by a Lessee or the Guarantor
are (or when executed and delivered will be) the legal, valid, and binding
obligations of such Person, enforceable against such Person in accordance with
their respective terms, subject to bankruptcy, insolvency and other laws
affecting the enforcement of creditors' rights.
Section 23.2. Financial Information; Financial Condition. All balance
sheets, all statements of operations, of shareholders' equity and of cash flow,
and other financial data which have been or shall hereafter be furnished to the
Lessor or the Trustee for the purposes of or in connection with this Agreement
or the Related Documents have been and will be prepared in accordance with GAAP
and do and will present fairly the financial condition of the entities involved
as of the dates thereof and the results of their operations for the periods
covered thereby and that there has been no material change in the financial
condition or results of operation since the respective dates of such balance
sheets, statements and other financial data. Such financial data include the
following financial statements and reports which have been furnished to the
Lessor and the Trustee on or prior to such Closing Date:
(a) the audited balance sheet of the Guarantor and each Lessee as of
December 31, 1996 and the related statements of operations, stockholders'
equity and cash flows for the fiscal year ending on such date; and
(b) the unaudited balance sheets of the Guarantor and each Lessee
and statement of operations, accompanied by an Officer's Certificate
verifying the accuracy and completeness thereof signed by an Authorized
Officer of the Guarantor and the Lessee, for the _______ month period
ending _____________, 1997.
Section 23.3. Litigation. Except for (i) claims set forth in Schedule 1
and (ii) claims which are fully covered by insurance, no claims, litigation
(including, without limitation, derivative actions), arbitration, governmental
investigation or proceeding or inquiry is pending or, to the best of the
Lessees' and the Guarantor's knowledge, threatened against a Lessee or the
Guarantor which would, if adversely determined, have a Material Adverse Effect
on a Lessee or the Guarantor.
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Section 23.4. Liens. As of the date hereof, there is no financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) covering or purporting to cover any interest of any kind in
the Vehicles leased hereunder (other than (x) those created in connection with
the indebtedness of Dollar to Chrysler Financial Corporation (with respect to
which the security interest perfected thereby has been assigned to the Lessor on
or prior to this date), (y) those set forth in Schedule 4, and (z) other
Permitted Liens).
Section 23.5. Necessary Actions. Upon a Servicer causing the Lien of the
Master Collateral Agent to be noted on the Certificates of Title with respect to
the related Vehicles (other than the Vehicles in the Existing Fleet) or as
otherwise provided for by the Master Collateral Agency Agreement or the
Indenture, all filings, registrations and recordings necessary or appropriate to
create, preserve, protect and perfect the security interest granted to the
Master Collateral Agent in respect of the Master Collateral (other than the
Vehicles in the Existing Fleet) have been accomplished and, assuming the
delivery to, and continuing possession by, the Lessor or its agents or assignees
of all instruments and documents (in each case as defined in the UCC as in
effect in New York) a security interest in which is perfected by possession
(except with regard to property constituting fixtures, any reserved rights of
the United States government as required by law, Liens upon patents, patent
licenses, trademarks, service marks and trademark licenses, to the extent that
such Liens cannot be perfected by the filing of financing statements under the
Uniform Commercial Code as in effect in the applicable jurisdiction, Liens on
uncertified securities and security entitlements, Liens on Master Collateral the
perfection of which requires filings in or other actions under the laws of
jurisdictions outside of the United States of America, any State, territory or
dependency thereof or the District of Columbia, and Liens on general intangibles
or accounts (in each case as defined in the UCC as in effect in New York) on
which the United States of America or any department, agency, or instrumentality
thereof is the obligor), and assuming that the applicable Lessee has rights in
the Master Collateral within the meaning of the UCC as in effect in New York,
the security interest granted to the Master Collateral Agent pursuant to the
Master Collateral Agency Agreement in and to the Master Collateral (other than
the Vehicles in the Existing Fleet) constitutes a perfected security interest
therein (but as to the copyrights and copyright licenses and accounts arising
therefrom, only to the extent the UCC of the relevant jurisdiction, from time to
time in effect, is applicable), prior to the rights of all other Persons
(except, with respect to goods (as defined in the UCC), buyers in the ordinary
course of business to the extent provided in Section 9-307(1) of the UCC as from
time to time in effect in the applicable jurisdiction) therein and subject to no
other Liens other than Permitted Liens (and the interests of such buyers in the
ordinary course of business) and is entitled to all rights, priorities and
benefits afforded to perfected security interests by the UCC or other relevant
law as enacted in any relevant jurisdiction.
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Section 23.6. Employee Benefit Plans. (a) During the twelve consecutive
month period prior to the date hereof (or, with respect to each Series of Notes
included in Group I after Series 1997-1, the Closing Date with respect to such
Series of Notes): (i) no steps have been taken to terminate any Pension Plan and
(ii) no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f)(1) of ERISA in connection
with such Pension Plan; (b) no condition exists or event or transaction has
occurred with respect to any Pension Plan which could result in the incurrence
by a Lessee, the Guarantor or any member of the Controlled Group of fines,
penalties or liabilities for ERISA violations, which in the case of any of the
events referred to in clause (a) above or this clause (b) would have a Material
Adverse Effect upon such Lessee or the Guarantor, and (c) such Lessee has no
material contingent liability with respect to any post-retirement benefits under
a Welfare Plan, other than liability for continuation coverage described in
Subtitle B of Part 6 of Title I of ERISA and liabilities which would not have a
Material Adverse Effect upon any Lessee or the Guarantor.
Section 23.7. Investment Company Act. Neither the Guarantor nor any Lessee
is an "investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
Section 23.8. Regulations G, T, U and X. Neither the Guarantor nor any
Lessee is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulations G, T, U and X of the Board of Governors
of the Federal Reserve System).
Section 23.9. Business Locations; Trade Names; Principal Places of
Business Locations. Schedule 3 lists each of the locations where each Lessee and
the Guarantor maintains a chief executive office, principal place of business,
or any records; and Schedule 3 also lists such Person's legal name, each name
under or by which it conducts its business, each state in which it conducts
business and the state in which the it has its principal place of business.
Section 23.10. Taxes. Each Lessee and the Guarantor has filed all material
tax returns that are required to be filed by it, and has paid or provided
adequate reserves for the payment of all taxes, including, without limitation,
all payroll taxes and federal and state withholding taxes, and all assessments
payable by it that have become due, other than those that are not yet delinquent
or are being contested in good faith by appropriate proceedings and with respect
to which adequate reserves have been established, and are being maintained, in
accordance with GAAP. As of such Closing Date, there is no ongoing material
audit (other than routine sales tax audits and other routine audits) or, to each
Lessee's and the Guarantor's knowledge, material tax liability for any period
for which returns have been filed or were due, other than those contested in
good faith by appropriate proceedings and with respect to which (x) adequate
reserves have been established and are being maintained in accordance with GAAP
and (y) the failure to pay such taxes would not, individually or in the
aggregate, have
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a Material Adverse Effect on such Lessee or the Guarantor or a material adverse
effect on the Noteholders.
Section 23.11. Governmental Authorization. Each of the Lessees and the
Guarantor has all licenses, franchises, permits and other governmental
authorizations necessary for all businesses presently carried on by it
(including owning and leasing the real and personal property owned and leased by
it), except where failure to obtain such licenses, franchises, permits and other
governmental authorizations would not have a Material Adverse Effect on such
Person.
Section 23.12. Compliance with Laws. Each Lessee and the Guarantor: (i) is
not in violation of any Requirement of Law, which violation would have a
Material Adverse Effect on such Person, and to the best knowledge of each Lessee
and the Guarantor, no such violation has been alleged; (ii) has filed in a
timely manner all reports, documents and other materials required to be filed by
it with any Governmental Agency (and the information contained in each of such
filings is true, correct and complete in all material respects), except where
failure to make such filings would not have a Material Adverse Effect on such
Person; and (iii) has retained all records and documents required to be retained
by it pursuant to any Requirement of Law, except where failure to retain such
records would not have a Material Adverse Effect on such Person.
Section 23.13. Eligible Vehicles; Eligible Franchisees. Each Vehicle is or
will be, as the case may be, on the Vehicle Lease Commencement Date with respect
to such Vehicle, an Eligible Vehicle, and each Franchisee subleasing an Eligible
Vehicle from a Lessee is or will be, as the case may be, on the sublease
commencement date with respect to such Eligible Vehicle, an Eligible Franchisee.
Section 23.14. Supplemental Documents True and Correct. All information
contained in any Vehicle Order or other Supplemental Document which has been
submitted, or which may hereafter be submitted by a Lessee or the Guarantor to
the Lessor is, or will be, true, correct and complete.
Each of the foregoing representations and warranties will be deemed to be
remade as of the Closing Date with respect to each Series of Notes included in
Group I.
SECTION 24. CERTAIN AFFIRMATIVE COVENANTS. Each Lessee and, as applicable,
each Servicer and the Master Servicer each covenants and agrees that, until the
expiration or termination of this Agreement, and thereafter until the
obligations of such Lessee, such Servicer or the Master Servicer, as applicable,
under this Agreement and the Related Documents are satisfied in full, unless at
any time the Lessor and the Trustee shall otherwise expressly consent in
writing, it will:
Section 24.1. Corporate Existence; Foreign Qualification. Do and cause
to be done at all times all things necessary to (i) maintain and preserve its
corporate existence (except as
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permitted under Section 25.1); (ii) be duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction where the nature of its
business makes such qualification necessary and the failure to so qualify would
have a Material Adverse Effect on it; and (iii) comply with all Contractual
Obligations and Requirements of Law binding upon it, except to the extent that
its failure to comply therewith would not, in the aggregate, have a Material
Adverse Effect on it.
Section 24.2. Books, Records and Inspections. (i) Maintain books and
records that are complete and accurate in all material respects with respect to
the Vehicles leased by it under this Agreement; and (ii) at any time and from
time to time during regular business hours, and with reasonable prior notice
from the Lessor, the Master Collateral Agent or the Trustee, permit the Lessor,
the Master Collateral Agent or the Trustee (or such other person who may be
designated from time to time by the Lessor, the Master Collateral Agent or the
Trustee), or its agents or representatives to examine and make copies of all
books, records and documents in the possession or under the control of such
Person relating to the Vehicles leased under this Agreement, including without
limitation, in connection with the Master Collateral Agent's or the Trustee's
satisfaction of any requests of a Manufacturer performing an audit under its
Vehicle Disposition Program.
Section 24.3. Vehicle Disposition Programs. With respect to each Program
Vehicle leased by a Lessee, comply, or cause the related Franchisee to comply,
as appropriate, with all of its obligations under the applicable Vehicle
Disposition Program relating to such Vehicle.
Section 24.4. Reporting Requirements. Furnish, or cause to be furnished to
the Lessor (or to such other Persons as are specified below):
(a) Daily Reports. Daily reports of the Master Servicer as follows:
On each Business Day commencing on the Lease Commencement Date, the Master
Servicer shall prepare and maintain at the office of the Master Servicer,
a record (each, a "Daily Report") setting forth the aggregate amount of
(i) Guaranteed Payments, Repurchase Payments, Disposition Proceeds and
Incentive Payments received from Manufacturers under Vehicle Disposition
Programs or incentive programs, or from other Persons in connection with
the sale or disposition of Vehicles leased under this Lease, (ii)
insurance proceeds in respect of Vehicles leased under this Lease, (iii)
payments in respect of Lessee Agreements, and (iv) any other Collections
in respect of the Master Collateral allocable to the Trustee as
Beneficiary (on behalf of the holders of Notes included in Group I) and in
each case deposited in the Master Collateral Account and reported to the
Master Servicer by the Master Collateral Agent, in accordance with Section
2.5(b) of the Master Collateral Agreement, not more than the second
Business Day preceding such Daily Report, and setting forth (x) the
aggregate dollar amount of the Collections identified in the foregoing
clauses (i) through (iv), (y) during the continuance of a Lease Event of
Default or a Liquidation Event of Default, and as needed under Section
2.5(c) or (d) of the Master Collateral Agency Agreement or, in the sole
judgment of the Master Collateral Agent, as
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otherwise needed, the portion of such Collections representing proceeds of
the Master Collateral pledged by the Lessor and the portion pledged by
each Lessee, and (z) the aggregate dollar amount of Sublease payments,
insurance payments, warranty payments (if any), and other payments which,
so long as no Lease Event of Default or Liquidation Event of Default has
occurred and is continuing, may be withdrawn from the Master Collateral
Account and distributed to the applicable Lessee, as set forth in Section
2.5(b) of the Master Collateral Agency Agreement. Before 3:00 p.m. (New
York City time) on each such Business Day, the Master Servicer shall
deliver a copy of the Daily Report to the Master Collateral Agent and the
Trustee.
(b) Monthly Certificate. Monthly certificates of the Master Servicer
as follows: On each Reporting Date, the Master Servicer shall forward to
the Lessee, the Lessor, the Trustee, the Paying Agent, the Rating Agencies
and any applicable Enhancement Provider, an Officers' Certificate of the
Master Servicer substantially in the form of Exhibit A (each, a "Monthly
Certificate") setting forth, inter alia, the following information (which,
in the cases of clauses (iii), (iv) and (v) below, will be expressed as a
dollar amount per $1,000 of the original principal amount of such Notes
and as a percentage of the outstanding principal balance of the Notes as
of such date): (i) the aggregate amount of payments received from the
Manufacturers under Vehicle Disposition Programs and deposited in the
Master Collateral Account and the aggregate amount of other Group I
Collections processed for the Related Month with respect to such Reporting
Date; (ii) the Invested Percentage on the last day of the second preceding
Related Month of each Series of Notes included in Group I (or, until the
end of the second Related Month for such Series of Notes, as of the
Closing Date for such Series); (iii) for each Series included in Group I,
the total amount to be distributed to Noteholders on the next succeeding
Payment Date; (iv) for each Series included in Group I, the amount of such
distribution allocable to principal on the Notes of such Series; (v) for
each Series included in Group I, the amount of such distribution allocable
to interest on the Notes; (vi) for each Series included in Group I, the
amount of Enhancement used or drawn (or to be used or drawn) in connection
with the distribution to Noteholders of such Series on the next succeeding
Payment Date, together with the aggregate amount of remaining Enhancement
not theretofore used or drawn; (vii) for each Series included in Group I,
the Series Monthly Servicing Fee for the next succeeding Payment Date;
(viii) for each Series included in Group I, the existing Carryover
Controlled Amortization Amount, if any; (ix) for each Series included in
Group I or Class of Notes, the applicable Pool Factors with respect to
such Related Month; (x) the Group I Aggregate Asset Amount and the amount
of the Group I Asset Amount Deficiency, if any, at the close of business
on the last day of the Related Month; (xi) if Enhancement is provided for
any Series of Notes included in Group I by means of overcollateralization,
the amount of recoveries and losses for the Related Month and the amount
of any excess funds available for such overcollateralization; and (xii)
whether, to the knowledge of the Master Servicer, any Lien exists on any
of the Collateral for any Series of Notes included in Group I (other
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than Permitted Liens). The Trustee shall be under no duty to recalculate,
verify or recompute the information supplied to it under this Section
24.4(b).
(c) Audit Report. As soon as available and in any event within one
hundred ten (110) days after the end of each fiscal year of the Guarantor,
a copy of the consolidated balance sheet of the Guarantor and its
Subsidiaries as at the end of such fiscal year, together with the related
statements of earnings, stockholders' equity and cash flows for such
fiscal year, prepared in reasonable detail and in accordance with GAAP,
and certified by Deloitte & Touche, LLP (or such other independent
certified public accountants of recognized national standing as shall be
selected by the Guarantor) as presenting fairly the financial condition
and results of operations of the Guarantor and its Subsidiaries, with such
exceptions as may be noted in such accountants' report;
(d) Quarterly Statements. As soon as available, but in any event
within forty-five (45) days after the end of each fiscal quarter (except
the fourth fiscal quarter) of the Guarantor, copies of the unaudited
consolidated balance sheet of the Guarantor and its Subsidiaries as at the
end of such fiscal quarter and the related unaudited statements of
earnings, stockholders' equity and cash flows for the portion of the
fiscal year through such fiscal quarter (and as to the statements of
earnings for such fiscal quarter) in each case setting forth in
comparative form the figures for the corresponding periods of the previous
fiscal year, prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and
certified by the chief financial or accounting officer of the Guarantor as
presenting fairly the financial condition and results of operations of the
Guarantor and its Subsidiaries (subject to normal year-end adjustments);
(e) Lease Events of Defaults. Promptly after a Lessee or the
Guarantor has actual knowledge of the occurrence of any Lease Event of
Default, Potential Lease Event of Default, Manufacturer Event of Default,
Potential Manufacturer Event of Default, a written statement of an
Authorized Officer of such Person describing such event and the action
that such Lessee or the Guarantor proposes to take with respect thereto;
(f) Monthly Vehicle Statements. On or before the [third] Reporting
Date following the date hereof, and on each Reporting Date thereafter, a
monthly vehicle statement (each, a "Monthly Vehicle Statement") in a form
acceptable to the Lessor, which shall specify (i) the last eight digits of
the VIN for the Vehicles leased hereunder during the Related Month by each
Lessee, (ii) whether each such Vehicle is leased under Annex A or Annex B
hereto; (iii) the Capitalized Cost for such Vehicles, (iv) the aggregate
Net Book Value of such Vehicles as of the end of the Related Month, (v)
the VINs for those Vehicles leased hereunder during the Related Month that
have been delivered to Manufacturers or designated auction sites pursuant
to the applicable Vehicle Disposition Program, or that have been otherwise
sold, during the
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Related Month, (vi) those Vehicles leased hereunder during the Related
Month that have become a Casualty during the Related Month and their
respective Net Book Values (as of the earlier of the last day of such
Related Month and or the date such vehicle is disposed of or becomes a
Casualty, as applicable), (vii) the total amount of Monthly Base Rents,
Monthly Variable Rents, Monthly Finance Rents, Monthly Supplemental
Payments, Availability Payment, Termination Payments and Late Return
Payments due for the Related Month on such Due Date, (viii) all
prepayments of Rent received during the Related Month from Guaranteed
Payments, Repurchase Payments, Disposition Proceeds and Incentive Payments
received by the Lessor during the Related Month from the Manufacturers,
auctions and other Persons, as the case may be, (ix) the aggregate
Depreciation Charges for all Vehicles leased hereunder during the Related
Month continuing in the possession of each Lessee, (x) information with
respect to each Lessee necessary for the Master Servicer to compute the
Group I Aggregate Asset Amount as of the end of the Related Month, (xi)
information with respect to each Lessee necessary for the Master Servicer
to compute the Availability Payment for each Lessee with respect to the
Related Month, and (xii) any other charges owing from, and credits due to,
each Lessee under this Agreement;
(g) Annual Certificate. Annual Officers' Certificates of the Lessees
as follows: Each Lessee will deliver to RCFC, the Trustee, any applicable
Enhancement Provider under the Indenture, and the Rating Agencies rating
any outstanding Series of Notes, on or before April 15 of each calendar
year, beginning with April 15, 1998, an Officers' Certificate
substantially in the form of Exhibit [ ] (each, an "Annual Certificate")
(a) stating that a review of the activities of the Lessee during the
preceding calendar year (or during the initial period from the initial
Closing Date until April 15, 1998) and of its performance under this
Agreement and the other Related Documents to which each Lessee is a party
was made under the supervision of the officers signing such certificate,
(b) stating that to the best of such officers' knowledge, based on such
review, either there has occurred no event which, with the giving of
notice or passage of time or both, would constitute a Lease Event of
Default or Amortization Event and that such Lessee has fully performed all
its obligations under this Agreement and such other Related Documents
throughout such year, or, if there has occurred such event or a Lease
Event of Default or Amortization Event, specifying each such event known
to such officers and the nature and status thereof, and (c) stating (and
containing an Opinion of Counsel to the effect) that all necessary Uniform
Commercial Code continuation statements and other Uniform Commercial Code
filings have been completed (including, without limitation, any
"precautionary filings" made by each of the Lessees in favor of the
Lessor), all necessary Assignment Agreements have been executed and
delivered pursuant to Section 2.1 of the Master Collateral Agency
Agreement, and all other actions, if any, required to maintain the
perfected security interest of the Trustee or the Master Collateral Agent
on behalf of the Trustee in the Collateral and in the Master Collateral
(except for noting the Lien of the Master Collateral Agent on the
Certificates of Title for the Existing Fleet), have
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been taken and that the Trustee or the Master Collateral Agent continues
to have a perfected security interest in the Collateral and Master
Collateral;
(h) Annual Report. Annual reports of independent public accountants
as follows: On or before April 15 of each calendar year, beginning with
April 15, [1999], the Master Servicer shall cause a firm of nationally
recognized independent public accountants (who may also render other
services to the Master Servicer) to furnish a report to RCFC, the Trustee,
the Rating Agencies and any Enhancement Provider to the effect that (i)
they have compared the mathematical calculations of each amount set forth
in the monthly certificates forwarded by the Master Servicer pursuant to
this Agreement and the Master Collateral Agency Agreement during the
period covered by such report (which shall be the period from January 1 to
and including December 31 of the prior calendar year) with the Master
Servicer's computer reports which were the source of such amounts and that
on the basis of such comparison, such accountants are of the opinion that
such amounts are in agreement, except for such exceptions as they believe
to be immaterial and such other exceptions as shall be set forth in such
statement, and (ii) they have examined certain documents and the records
relating to the servicing of the Vehicles leased by such Lessee under this
Agreement and the other Related Documents to which the Master Servicer is
a party and that, on the basis of such examination, nothing has come to
the attention of such accountants that would cause such accountants to
believe that such servicing (including the allocations of Collections
under the Indenture) has not been completed in compliance with all of the
terms and conditions set forth in the Indenture, any Supplement, this
Agreement and the Master Collateral Agency Agreement, except for (a) such
exceptions as such accountants believe to be immaterial and (b) such other
exceptions as shall be set forth in such report;
(i) Quarterly Non-Program Vehicle Report. Quarterly reports of
independent public accountants as follows: On or before the second
Determination Date immediately following each March 31, June 30, September
30, and December 31, of each year, beginning with March 31, 1998, the
Master Servicer shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Master
Servicer and who is acceptable to the Rating Agencies) to furnish a report
(the "Quarterly Non-Program Vehicle Report") to the Lessor, the Trustee,
the Rating Agencies, and the Master Collateral Agent to the effect that
they have performed certain agreed upon procedures with respect to the
calculation of Disposition Proceeds obtained from the sale or other
disposition of all Non-Program Vehicles (other than Casualties) sold or
otherwise disposed of during each Related Month in such period and
compared such calculations of Disposition Proceeds with the corresponding
amounts set forth in the Daily Reports prepared by the Master Servicer
pursuant to clause (a) above and that on the basis of such comparison such
accountants are of the opinion that such amounts are in agreement, except
for such exceptions as they believe to be immaterial and such other
exceptions as shall be set forth in such report; and
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(j) Other. From time to time, such other information, documents, or
reports regarding the Vehicles or the financial position, the results of
operations or business of the Lessees as the Lessor, the Master Collateral
Agent or the Trustee may from time to time reasonably request in order to
protect the interests of the Lessor, the Master Collateral Agent or the
Trustee under or as contemplated by this Agreement or any other Related
Document.
Section 24.5. Taxes and Liabilities. Pay when due all taxes, assessments
and other material (determined on a consolidated basis) liabilities (including,
without limitation, taxes, titling fees and registration fees payable with
respect to Vehicles), except as contested in good faith and by appropriate
proceedings (but only if and so long as forfeiture of any material part of the
Vehicles leased under this Agreement will not result from the failure to pay any
such taxes, assessments or other material liabilities during the period of any
such contest) and with respect to which (a) adequate reserves have been
established, and are being maintained, in accordance with GAAP, and (b) the
failure to make such payments and the maintaining of such reserves would not
have a Material Adverse Effect on such Person or a material adverse effect on
the Noteholders.
Section 24.6. Compliance with Laws. Comply with all Requirements of Law
related to its businesses if the failure so to comply would have a Material
Adverse Effect on such Person.
Section 24.7. Maintenance of Separate Existence. Maintain certain policies
and procedures relating to its existence as a separate corporation as follows:
Each Lessee acknowledges its receipt of a copy of that certain opinion letter
issued by Xxxxx, Xxxxx & Xxxxx, dated as of the Closing Date for the initial
Series of Notes included in Group I and addressing the issue of substantive
consolidation as it may relate to the Lessees and the Lessor. Each Lessee hereby
agrees to maintain in place all policies and procedures, and take and continue
to take all actions, described in the factual assumptions set forth in such
opinion letter and relating to such Lessee; provided, however, that such Lessee
may cease to maintain any policy or procedure if and to the extent that such
Lessee delivers to the Lessor and the Trustee an Opinion of Counsel providing
that such policy or procedure is no longer necessary, due to a change in law or
otherwise, for the rendering of such earlier opinion relating to the issue of
substantive consolidation.
Section 24.8. Master Collateral Agent as Lienholder. Maintain certain
computer records as follows: Concurrently with each leasing of a Vehicle under
this Agreement, the Master Servicer and the related Servicer each shall indicate
on its computer records that the Master Collateral Agent as assignee of the
Lessor or the Lessees, as the case may be, is the holder of a Lien on such
Vehicle for the benefit of the Trustee pursuant to the terms of the Master
Collateral Agency Agreement.
Section 24.9. Maintenance of Property. Keep, or cause to be kept, all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear
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excepted; provided, that nothing in this Section 24.9 shall require it to
maintain, or to make any renewals, replacements, additions, betterment or
improvements of or to, any tangible property if such property, in its reasonable
opinion, is obsolete or surplus or unfit for use or cannot be used
advantageously in the conduct of its business.
Section 24.10. Access to Certain Documentation and Information Regarding
the Collateral. Provide to the Trustee and the Master Collateral Agent
reasonable access to the documentation regarding the Collateral and the Master
Collateral, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to the
normal security and confidentiality procedures of the applicable Lessee, the
applicable Servicer or the Master Servicer, as the case may be, and (iv) at
offices in the continental United States designated by such Lessee, such
Servicer or the Master Servicer, as the case may be, which, if they are not the
offices where such documentation normally is kept, shall be accessible without
unreasonable effort or expense.
In addition, commencing on the date ten (10) days after the date that a
Lessee or the Master Servicer receives from the Trustee or any Note Owner a
written request therefor, which request shall (x) contain a certification of
such Note Owner that such person is a Note Owner and (y) provide an address for
delivery, then and thereafter, unless and until such Lessee or the Master
Servicer receives from such Note Owner a request to discontinue same, the Lessee
or the Master Servicer, as applicable, shall deliver the information specified
below directly to such Note Owner (and, if requested, to one other person as may
be specified in such Note Owner's written request) substantially concurrently
with the delivery by such Lessee or the Master Servicer, as applicable, of such
information to any of the Trustee, any Noteholder or RCFC, provided, however, if
such Lessee or the Master Servicer, as applicable, is not otherwise obligated
hereunder to deliver such information to the Trustee, any Noteholder or RCFC on
a periodic basis, then, unless otherwise specified below, such Lessee or the
Master Servicer, as applicable, shall deliver the following information to such
Note Owner on a monthly basis on the same date as the date on which the Monthly
Certificate delivered pursuant to Section 24.4(b) is delivered:
(i) the Monthly Certificate delivered pursuant to Section 24.4(b);
(ii) the average age of RCFC's fleet;
(iii) copies of any new Vehicle Disposition Programs entered into by
RCFC during the Related Month;
(iv) a statement as to whether a Manufacturer Event of Default or
Lease Event of Default occurred during the Related Month;
(v) any financial reports required to be delivered under this Lease;
(vi) the Annual Certificate delivered hereunder;
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(vii) the Annual Report delivered hereunder;
(viii) the Quarterly Non-Program Vehicle Report; and
(ix) within ten (10) days after written request, such other
information as is reasonably requested by such Note Owner in order
to satisfy any regulatory requirements of such Note Owner.
SECTION 24.11. Maintenance of Credit Enhancement. The Guarantor agrees to
maintain with respect to each Series of Notes included in Group I (a) a letter
of credit supporting the obligations of the Lessees under this Lease in a stated
amount that, as of any date of determination, together with all cash and
Permitted Investments on deposit in the Excess Funding Account for such Series
of Notes on such date, is at least equal to the Liquidity Amount for such Series
of Notes; (b) Enhancement in the form of overcollateralization in such amount
that the Available Subordinated Amount for such Series of Notes is at all times
at least equal to 0.50% of the then current Invested Amount of such Series of
Notes; and (c) Enhancement in such form as is provided for in the applicable
Supplement in a stated amount at least equal to the Required Enhancement Amount
for such Series of Notes.
SECTION 25. CERTAIN NEGATIVE COVENANTS. Until the expiration or
termination of this Agreement and thereafter until the obligations of the
Lessees are paid in full, each Lessee agrees that, unless at any time the
Lessor, the Master Collateral Agent and the Trustee shall otherwise expressly
consent in writing, it will not:
Section 25.1. Mergers, Consolidations. Be a party to any merger or
consolidation, other than a merger or consolidation of such Lessee into or with
another entity if:
(a) the Person formed by such consolidation or into or with which
such Lessee is merged shall be a Person organized and existing under the
laws of the United States of America or any State or the District of
Columbia, and, if such Lessee is not the surviving entity, shall expressly
assume, by an agreement supplemental hereto executed and delivered to the
Trustee, the performance of every covenant and obligation of such Lessee
hereunder and under all other Related Documents;
(b) such Lessee has delivered to the Trustee an officer's
certificate and an opinion of counsel each stating that such consolidation
or merger and such supplemental agreement comply with this Section 25.1
and that all conditions precedent herein provided for relating to such
transaction have been complied with; and
(c) the Rating Agency Condition shall be met with respect to such
assignment and succession.
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Section 25.2. Other Agreements. Enter into any agreement containing any
provision which would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by it hereunder or in connection herewith.
Section 25.3. Liens. Create or permit to exist any Lien with respect to
any Vehicle leased hereunder now or hereafter existing or acquired, except Liens
in favor of the Lessor, the Master Collateral Agent or the Trustee, the lien on
the Existing Fleet in favor of Chrysler Financial Corporation, and the Liens set
forth in Schedule 4, and the following Liens to the extent such liens in the
aggregate would not have a Material Adverse Effect on the Lessor, the Master
Collateral Agent or the Trustee or the Noteholders under this Agreement or the
Indenture (all the foregoing Liens collectively, the "Permitted Liens"): (i)
Liens for current taxes not delinquent or for taxes being contested in good
faith and by appropriate proceedings, and with respect to which adequate
reserves have been established, and are being maintained, in accordance with
GAAP, (ii) Liens, including judgment liens, arising in the ordinary course of
business being contested in good faith and by appropriate proceedings, and with
respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP, (iii) Liens incurred in the ordinary course
of business in connection with worker's compensation, unemployment insurance or
other forms of governmental insurance or benefits, and (iv) mechanics'
materialmen's, landlords', warehousemen's and carrier's Liens, and other Liens
imposed by law, securing obligations arising in the ordinary course of business
that are being contested in good faith and by appropriate proceedings and with
respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP.
Section 25.4. Use of Vehicles. Knowingly use or allow the Program Vehicles
to be used in any manner that would (i) make any such Program Vehicles
ineligible for repurchase by their respective Manufacturers or for sale in
accordance with applicable Auction Procedures, except with respect to the
permitted redesignation of Program Vehicles as Non-Program Vehicles, pursuant to
Section 14, or (ii) subject the Vehicles to confiscation.
Section 25.5. Acquisition and Financing of Vehicles. Use funds on deposit
in or required to be deposited into the Excess Funding Account (as defined in
the related Supplement) for any Series of Notes included in Group I or the
Retained Distribution Account to acquire or finance Vehicles under this Lease
during any calendar month or series of consecutive calendar months if the
Vehicle Ratio for such month or series of months exceeds the following amounts:
For any month 30%
For any two consecutive months 50%
For any three consecutive months 70%
For any four consecutive months 80%
For any five consecutive months 90%
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SECTION 26. SERVICING COMPENSATION.
Section 26.1. As compensation for its servicing activities hereunder and
reimbursement for its expenses as set forth in Section 26.2, each Servicer shall
be entitled to receive from the Lessor a monthly servicing fee (the "Monthly
Servicing Fee"), payable in arrears on each Payment Date prior to the
termination of this Lease, the Indenture and the Master Collateral Agency
Agreement in an amount equal to the sum of the monthly servicing fees for such
Servicer for all Series of Notes included in Group I. Except as otherwise
specified in the related Supplement, the Monthly Servicing Fee for each Servicer
for each Series of Notes included in Group I (each, a "Series Monthly Servicing
Fee") on each Payment Date shall be equal to (i) the portion of the Supplemental
Servicing Fee allocated to such Group I Series in respect of such Servicer
pursuant to the related Supplement, plus (ii) one-twelfth of the product of (A)
such Servicer's Pro Rata Share of the Servicing Fee Percentage for such Series
and (B) the Invested Amount of such Series as of the preceding Payment Date
(after giving effect to any payments of principal on such date). The Series
Monthly Servicing Fee for each Servicer for each Series of Notes included in
Group I shall be paid to such Servicer pursuant to the procedures set forth in
the applicable Supplement. The supplemental servicing fee (the "Supplemental
Servicing Fee") for any period shall be equal to all Carrying Charges comprising
payments due from the applicable Servicer under Section 26.2 hereof.
Section 26.2. The expenses of each Servicer include, and each Servicer
agrees to pay, its Pro Rata Share of the amounts due to the Trustee pursuant to
Section 9.5 of the Indenture, plus its Pro Rata Share of the reasonable fees and
disbursements of independent accountants in connection with reports furnished
pursuant to Sections 24.4(h) and (i), plus its allocable share of all other
fees, expenses and indemnities incurred by such Servicer or the Lessor in
connection with the Servicer's activities hereunder or under the Related
Documents. The Servicers, however, shall not be liable for any liabilities,
costs or expenses of the Lessor, the Trustee or the Noteholders arising under
any tax law, including without limitation any Federal, state or local income or
franchise taxes or any other tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a failure to comply
therewith), except to the extent incurred as a result of a Servicer's violation
of the provisions of this Lease or of the Related Documents; provided, however,
the foregoing provisions of this sentence shall not affect the indemnification
obligations of the Lessees under Section 15 of this Lease. In the event that a
Servicer fails to pay any amount due to the Trustee pursuant to Section 9.5 of
the Base Indenture, the Trustee will be entitled to receive such amounts due
from the Monthly Servicing Fee prior to payment thereof to such Servicer.
SECTION 27. GUARANTY.
Section 27.1. Guaranty. In order to induce the Lessor to execute and
deliver this Lease and to lease Vehicles hereunder to the Lessees, and in
consideration thereof, the Guarantor hereby (i) unconditionally and irrevocably
guarantees to the Lessor the obligations of the Lessees to make any payments
required to be made by them under this Lease, (ii)
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agrees to cause the Lessees to duly and punctually perform and observe all of
the terms, conditions, covenants, agreements and indemnities of the Lessees
(whether in their respective capacities as Lessees or as Servicers) under this
Lease, and (iii) agrees that, if for any reason whatsoever, any Lessee (whether
in its capacity as a Lessee or as a Servicer) fails to so perform and observe
such terms, conditions, covenants, agreements and indemnities, the Guarantor
will duly and punctually perform and observe the same (the obligations referred
to in clauses (i) through (iii) above are collectively referred to as the
"Guaranteed Obligations"). The liabilities and obligations of the Guarantor
under the guaranty contained in this Section 27 (this "Guaranty") will be
absolute and unconditional under all circumstances. This Guaranty shall be a
guaranty of payment and not of collection, and the Guarantor hereby agrees that
it shall not be required that the Lessor or the Trustee assert or enforce any
rights against any of the Lessees, the Servicers or any other person before or
as a condition to the obligations of the Guarantor pursuant to this Guaranty.
Section 27.2. Scope of Guarantor's Liability. The Guarantor's obligations
hereunder are independent of the obligations of the Lessees (whether as Lessee
or as Servicer), any other guarantor or any other Person, and the Lessor may
enforce any of its rights hereunder independently of any other right or remedy
that the Lessor may at any time hold with respect to this Lease or any security
or other guaranty therefor. Without limiting the generality of the foregoing,
the Lessor may bring a separate action against the Guarantor without first
proceeding against any of the Lessees, any other guarantor or any other Person,
or any security held by the Lessor, and regardless of whether the Lessees or any
other guarantor or any other Person is joined in any such action. The
Guarantor's liability hereunder shall at all times remain effective with respect
to the full amount due from the Lessees hereunder. The Lessor's rights hereunder
shall not be exhausted by any action taken by the Lessor until all Guaranteed
Obligations have been fully paid and performed.
Section 27.3. Lessor's Right to Amend this Lease. The Guarantor authorizes
the Lessor, at any time and from time to time without notice and without
affecting the liability of the Guarantor hereunder, to: (a) alter the terms of
all or any part of the Guaranteed Obligations and any security and guaranties
therefor including without limitation modification of times for payment and
rates of interest; (b) accept new or additional instruments, documents,
agreements, security or guaranties in connection with all or any part of the
Guaranteed Obligations; (c) accept partial payments on the Guaranteed
Obligations; (d) waive, release, reconvey, terminate, abandon, subordinate,
exchange, substitute, transfer, compound, compromise, liquidate and enforce all
or any part of the Guaranteed Obligations and any security or guaranties
therefor, and apply any such security and direct the order or manner of sale
thereof (and bid and purchase at any such sale), as the Lessor in its discretion
may determine; (e) release any Lessee, any guarantor or any other Person from
any personal liability with respect to all or any part of the Guaranteed
Obligations; and (f) assign its rights under this Guaranty in whole or in part.
Section 27.4. Waiver of Certain Rights by Guarantor. The Guarantor hereby
waives each of the following to the fullest extent allowed by law:
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(a) any defense based upon:
(i) the unenforceability or invalidity of any security or other
guaranty for the Guaranteed Obligations or the lack of
perfection or failure of priority of any security for the
Guaranteed Obligations; or
(ii) any act or omission of the Lessor or any other Person that
directly or indirectly results in the discharge or release of
any of the Lessees or any other Person or any of the
Guaranteed Obligations or any security therefor; provided that
the Guarantor's liability in respect of this Guaranty shall be
released to the extent the Lessor expressly releases such
Lessee or other Person, in a writing conforming to the
requirements of Section 22, from any Guaranteed Obligations;
or
(iii) any disability or any other defense of any Lessee or any other
Person with respect to the Guaranteed Obligations, whether
consensual or arising by operation of law or any bankruptcy,
insolvency or debtor-relief proceeding, or from any other
cause;
(b) any right (whether now or hereafter existing) to require the Lessor,
as a condition to the enforcement of this Guaranty, to:
(i) accelerate the Guaranteed Obligations;
(ii) give notice to the Guarantor of the terms, time and place of
any public or private sale of any security for the Guaranteed
Obligations; or
(iii) proceed against any Lessee, any other guarantor or any other
Person, or proceed against or exhaust any security for the
Guaranteed Obligations;
(c) presentment, demand, protest and notice of any kind, including without
limitation notices of default and notice of acceptance of this Guaranty;
(d) all suretyship defenses and rights of every nature otherwise available
under New York law and the laws of any other jurisdiction;
(e) any right that the Guarantor has or may have to set-off with respect
to any right to payment from any Lessee; and
(f) all other rights and defenses the assertion or exercise of which would
in any way diminish the liability of the Guarantor hereunder.
Section 27.5. Lessees' Obligations to Guarantor and Guarantor's
Obligations to Lessees Subordinated. Until all of the Guaranteed Obligations
have been paid in full, the
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Guarantor agrees that all existing and future unsecured debts, obligations and
liabilities of the Lessees to the Guarantor or the Guarantor to any of the
Lessees (hereinafter collectively referred to as "Subordinated Debt") shall be
and hereby are expressly subordinated to the prior payment in full of the
Guaranteed Obligations, on the terms set forth in clauses (a) through (e) below,
and the payment thereof is expressly deferred in right of payment to the prior
payment in full of the Guaranteed Obligations. For purposes of this Section
27.5, to the extent the Guaranteed Obligations consist of the obligation to pay
money, the Guaranteed Obligations shall not be deemed paid in full unless and
until paid in full in cash.
(a) Upon any distribution of assets of the Guarantor or any Lessee upon
any dissolution, winding up, liquidation or reorganization of the Guarantor or
such Lessee, whether in bankruptcy, insolvency, reorganization or receivership
proceedings, or upon an assignment for the benefit of creditors or any other
marshaling of the assets and liabilities of the Guarantor or such Lessee, or
otherwise:
(i) the holders of the Guaranteed Obligations shall be entitled to
receive payment in full of the Guaranteed Obligations before
the Guarantor or any Lessee, as the case may be, is entitled
to receive any payment on account of the Subordinated Debt;
(ii) any payment by, or distribution of assets of, the Guarantor or
such Lessee of any kind or character, whether in cash,
property or securities, to which such Lessee or the Guarantor
would be entitled except for this subordination shall be paid
or delivered by the Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee, or otherwise, directly to the Trustee,
for the benefit of the holders of the Guaranteed Obligations
to be held as additional security for the Guaranteed
Obligations in an interest bearing account until the
Guaranteed Obligations have been paid in full; and
(iii) if, notwithstanding the foregoing, any payment by, or
distribution of assets of, the Guarantor or such Lessee of any
kind or character, whether in cash, property or securities, in
respect of any Subordinated Debt shall be received by such
Lessee or the Guarantor before the Guaranteed Obligations are
paid in full, such payment or distribution shall be held in
trust in an interest bearing account of the Guarantor or such
Lessee, as appropriate, and immediately paid over in kind to
the holders of the Guaranteed Obligations until the Guaranteed
Obligations have been paid in full.
(b) The Guarantor authorizes and directs each Lessee and each Lessee
authorizes and directs the Guarantor to take such action as may be necessary or
appropriate to effectuate and maintain the subordination provided herein.
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(c) No right of any holder of the Guaranteed Obligations to enforce the
subordination herein shall at any time or in any way be prejudiced or impaired
by any act or failure to act on the part of the Guarantor, any Lessee, the
Lessor or any other Person or by any noncompliance by the Guarantor, any Lessee,
the Lessor or any other Person with the terms, provisions and covenants hereof
or of the Related Documents regardless of any knowledge thereof that any such
holder of the Guaranteed Obligations may have or be otherwise charged with.
(d) Except as provided in Section 27.9, nothing express or implied herein
shall give any Person other than the Lessees, the Lessor, the Trustee and the
Guarantor any benefit or any legal or equitable right, remedy or claim
hereunder.
(e) If the Guarantor shall institute or participate in any suit, action or
proceeding against any Lessee or any Lessee shall institute or participate in
any suit, action or proceeding against the Guarantor, in violation of the terms
hereof, such Lessee or the Guarantor, as the case may be, may interpose as a
defense or dilatory plea this subordination, and the holders of the Guaranteed
Obligations are irrevocably authorized to intervene and to interpose such
defense or plea in their name or in the name of such Lessee or the Guarantor, as
the case may be.
Section 27.6. Guarantor to Pay Lessor's Expenses. The Guarantor agrees to
pay to the Lessor (or the Trustee), on demand, all costs and expenses, including
reasonable attorneys' and other professional and paraprofessional fees, incurred
by the Lessor (or the Trustee) in exercising any right, power or remedy
conferred by this Guaranty, or in the enforcement of this Guaranty, whether or
not any action is filed in connection therewith. Until paid to the Lessor, such
amounts shall bear interest, commencing with the Lessor's demand therefor, for
each Interest Period during the period from the date of such demand until paid,
at the VFR for such Interest Period plus 1% (calculated on the basis of a
360-day year).
Section 27.7. Reinstatement. This Guaranty shall continue to be effective
or be reinstated, as the case may be, if at any time payment of any of the
amounts payable by any Lessee under this Lease is rescinded or must otherwise be
restored or returned by the Lessor, upon an event of bankruptcy, dissolution,
liquidation or reorganization of any Lessee or the Guarantor or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, any Lessee, the Guarantor, any other Guarantor
or any other Person, or any substantial part of their respective property, or
otherwise, all as though such payment had not been made.
Section 27.8. Pari Passu Indebtedness. The Guarantor (i) represents and
warrants that, as of the date hereof, the obligations of the Guarantor under
this Guaranty will rank pari passu with any existing unsecured indebtedness of
the Guarantor and (ii) covenants and agrees that from and after the date hereof
the obligations of the Guarantor under this Guaranty will rank pari passu with
any unsecured indebtedness of the Guarantor incurred after the date hereof.
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Section 27.9. Third-Party Beneficiaries. The Guarantor acknowledges that
the Trustee (on behalf of the holders of Group I Shared Series Notes) has
accepted the assignment of the Lessor's rights under this Lease as collateral
for such Notes in reliance on the Guaranty and that the Trustee (for the benefit
of the holders of such Shared Series Notes) shall be a third-party beneficiary
hereunder.
SECTION 28. ADDITIONAL LESSEES.
Section 28.1. Additional Affiliate and Subsidiary Lessees. Any direct or
indirect subsidiary of the Guarantor (each, a "Guarantor Subsidiary") shall have
the right to become a "Lessee" under and pursuant to the terms of this Agreement
by complying with the provisions of this Section 28.1. In the event a Guarantor
Subsidiary desires to become a "Lessee" under this Agreement, then the Guarantor
and such Guarantor Subsidiary shall execute (if appropriate) and deliver to the
Lessor and the Trustee:
(a) a Joinder in Lease Agreement in the form attached hereto as
Attachment D (each, an "Affiliate Joinder in Lease");
(b) the certificate of incorporation for such Guarantor Subsidiary,
duly certified by the Secretary of State of the jurisdiction of such
Guarantor Subsidiary's incorporation, together with a copy of the by-laws
of such Guarantor Subsidiary, duly certified by a Secretary or Assistant
Secretary of such Guarantor Subsidiary;
(c) copies of resolutions of the Board of Directors of such
Guarantor Subsidiary authorizing or ratifying the execution, delivery and
performance, respectively, of those documents and matters required of it
with respect to this Agreement, duly certified by the Secretary or
Assistant Secretary of such Guarantor Subsidiary;
(d) a certificate of the Secretary or Assistant Secretary of such
Guarantor Subsidiary certifying the names of the individual or individuals
authorized to sign the Affiliate Joinder in Lease and the other Related
Documents to be executed by it, together with samples of the true
signatures of each such individual;
(e) a good standing certificate for such Guarantor Subsidiary in the
jurisdiction of its incorporation and the jurisdiction of its principal
place of business;
(f) a written search report from a Person satisfactory to the Lessor
and the Trustee listing all effective financing statements that name such
Guarantor Subsidiary as debtor or assignor, and that are filed in the
jurisdictions in which filings were made pursuant to clause (g) below,
together with copies of such financing statements, and tax and judgment
lien search reports from a Person satisfactory to the Lessor and the
Trustee showing no evidence of liens filed against such Guarantor
Subsidiary that purport to affect any Vehicles leased hereunder or any
Collateral under the Indenture;
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(g) evidence of the filing of proper financing statements on Form
UCC-1 naming such Guarantor Subsidiary, as debtor, and the Lessor as
secured party covering the collateral described in Section 2(b) hereof;
(h) an Officers' Certificate and an opinion of counsel each stating
that such joinder by such Guarantor Subsidiary complies with this Section
29.1 and that all conditions precedent herein provided for relating to
such transaction have been complied with;
(i) a statement from each of the Rating Agencies that such Guarantor
Subsidiary becoming a "Lessee" under this Agreement will not cause a
failure to meet the Rating Agency Condition; and
(j) any additional documentation that the Lessor or the Trustee may
reasonably require to evidence the assumption by such Guarantor Subsidiary
of the obligations and liabilities set forth in this Agreement.
Upon satisfaction of the foregoing conditions and receipt by such Guarantor
Subsidiary of the applicable Affiliate Joinder in Lease executed by the Lessor,
such Guarantor Subsidiary shall for all purposes be deemed to be a "Lessee" for
purposes of this Agreement (including, without limitation, the Guaranty which is
a part of this Agreement) and shall be entitled to the benefits and subject to
the liabilities and obligations of a Lessee hereunder.
SECTION 29. BANKRUPTCY PETITION AGAINST LESSOR. Each Lessee and the
Guarantor hereby covenants and agrees that, prior to the date which is one year
and one day after the payment in full of all Series of Notes issued by the
Lessor, it will not institute against, or join any other Person in instituting
against, the Lessor any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States. In the event that a Lessee (or any
sublessee thereof) or the Guarantor takes action in violation of this Section
29, the Lessor agrees, for the benefit of the Noteholders, that it shall file an
answer with the bankruptcy court or otherwise properly contest the filing of
such a petition by such Lessee or the Guarantor against the Lessor or the
commencement of such action and raise the defense that such Lessee or the
Guarantor, as applicable, has agreed in writing not to take such action and
should be estopped and precluded therefrom and such other defenses, if any, as
its counsel advises that it may assert. The provisions of this Section 29 shall
survive the termination of this Agreement.
SECTION 30. SUBMISSION TO JURISDICTION. THE LESSOR, THE MASTER COLLATERAL
AGENT AND THE TRUSTEE MAY ENFORCE ANY CLAIM ARISING OUT OF THIS AGREEMENT IN ANY
STATE OR FEDERAL COURT HAVING SUBJECT MATTER JURISDICTION, INCLUDING, WITHOUT
LIMITATION, ANY STATE OR FEDERAL COURT LOCATED IN THE STATE OF NEW YORK IN THE
BOROUGH OF MANHATTAN IN NEW YORK CITY. FOR THE PURPOSE OF ANY
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ACTION OR PROCEEDING INSTITUTED WITH RESPECT TO ANY SUCH CLAIM, EACH LESSEE AND
THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS.
EACH LESSEE AND THE GUARANTOR HEREBY IRREVOCABLY DESIGNATES CT CORPORATION
SYSTEM, INC., 0000 XXXXXXXX, XXX XXXX, XXX XXXX 00000, TO RECEIVE FOR AND ON
BEHALF OF SUCH LESSEE AND GUARANTOR SERVICE OF PROCESS IN NEW YORK. EACH LESSEE
AND THE GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF
SAID COURTS BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO
SUCH LESSEE OR THE GUARANTOR, AS APPLICABLE, AND AGREES THAT SUCH SERVICE, TO
THE FULLEST EXTENT PERMITTED BY LAW, (I) SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT, ACTION OR PROCEEDING AND
(II) SHALL BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON AND PERSONAL
DELIVERY TO IT. Nothing herein contained shall affect the right of the Lessor to
serve process in any other manner permitted by law or preclude the Lessor, the
Master Collateral Agent or the Trustee from bringing an action or proceeding in
respect hereof in any other country, state or place having jurisdiction over
such action. EACH LESSEE AND THE GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT LOCATED IN THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN
IN NEW YORK CITY AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 31. GOVERNING LAW. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. All obligations of the
Lessees and the Guarantor and all rights of the Lessor, the Master Collateral
Agent or the Trustee expressed herein shall be in addition to and not in
limitation of those provided by applicable law or in any other written
instrument or agreement.
SECTION 32. JURY TRIAL. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT TO WHICH IT IS A
PARTY, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM ANY
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY
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RELATED TRANSACTION, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 33. NOTICES. All notices, requests and other communications to any
party or signatory hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party or signatory,
addressed to it, at its address or facsimile number set forth on the signature
pages below, or at such other address or facsimile number as such party may
hereafter specify for such purpose by notice (in accordance with this Section
33) to the other parties and signatories hereto. In each case, a copy of all
notices, requests and other communications (other than any such notices,
requests and other communications in the ordinary course of business) that are
sent by any party or signatory hereunder shall be sent to the Trustee. Copies of
notices, requests and other communications delivered to the Trustee pursuant to
the foregoing sentence shall be sent to the following address:
Bankers Trust Company
0 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust and Agency
Group/Structured Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Each such notice, request or communication shall be effective when received at
the address specified below. Copies of all facsimile notices must be sent by
first class mail promptly after such transmission by facsimile.
SECTION 34. HEADINGS. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
SECTION 35. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute one and the same Agreement.
SECTION 36. EFFECTIVENESS. This Agreement shall become effective on the
Lease Commencement Date (subject to (i) the requirement that the representations
and warranties contained in Section 23 shall be true and correct in all respects
(except to the extent any such representation and warranty does not incorporate
a materiality limitation in its terms and the failure of such representation and
warranty to be true and correct in all respects does not materially adversely
affect the interest of the Lessor, the Trustee or the Secured Parties) and (ii)
the prior or concurrent delivery of each of the following documents to the
Lessor (in form and substance satisfactory to the Lessor):
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(a) Certificate of Incorporation. The certificate of incorporation
of each Lessee and the Guarantor, duly certified by the Secretary of State
of the jurisdiction of its incorporation, together with a copy of its
by-laws, duly certified by the Secretary or an Assistant Secretary of such
Lessee or the Guarantor, as applicable;
(b) Resolutions. Copies of resolutions of the Board of Directors of
each Lessee and the Guarantor authorizing or ratifying the execution,
delivery and performance of those documents and matters required of it
with respect to this Agreement, duly certified by the Secretary or
Assistant Secretary of such Lessee or the Guarantor, as applicable;
(c) Consents, etc. Certified copies of all documents evidencing any
necessary corporate action, consents and governmental approvals (if any)
with respect to this Agreement;
(d) Incumbency and Signatures. A certificate of the Secretary or an
Assistant Secretary of each Lessee and the Guarantor certifying the names
of the individual or individuals authorized to sign this Agreement and the
other Related Documents to be executed by it (in such capacity or
otherwise), together with a sample of the true signature of each such
individual (the Lessor, the Master Collateral Agent and the Trustee may
conclusively rely on each such certificate until formally advised by a
like certificate of any changes therein);
(e) Opinions of Counsel. (i) The opinion of Debevoise & Xxxxxxxx,
counsel for the Lessees, the Servicers and the Master Servicer, addressed
to the Lessor, the Trustee, the Master Collateral Agent, the Enhancement
Providers, the Initial Purchaser and the Rating Agencies; (ii) the opinion
of Xxxxx, Xxxxx & Xxxxx, addressed to the Lessees, the Lessor, the
Trustee, the Master Collateral Agent, the Enhancement Providers, the
Initial Purchaser and the Rating Agencies; (iii) the opinion of each
Manufacturer addressed to the Lessees, the Lessor, the Trustee, the Master
Collateral Agent, the Enhancement Providers and the Rating Agencies; (iv)
the opinion of counsel to each Enhancement Provider, addressed to the
Lessees, the Lessor, the Trustee, the Master Collateral Agent, the Initial
Purchaser and the Rating Agencies; (v) the opinion of ____________,
counsel to the Trustee, addressed to the Lessees, the Lessor, the Initial
Purchaser, the Master Collateral Agent and each Enhancement Provider; and
(vi) the opinion of Hall, Estill, Hardwick, Gable, Golden & Xxxxxx,
Oklahoma counsel to the Lessees, addressed to the Lessor, the Trustee, the
Enhancement Providers, the Initial Purchaser and the Rating Agencies, in
each case, satisfactory in form and substance to the addressees thereof;
(f) Good Standing Certificates. Certificates of good standing for
each Lessee and the Guarantor in the jurisdiction of its organization and
the jurisdiction of its principal place of business;
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(g) Search Reports. A written search report dated as of [ ] from a
Person satisfactory to the Lessor and the Trustee listing all effective
financing statements that name a Lessee as debtor or assignor and that are
filed in the jurisdictions in which filings were made pursuant to
subsection (h) below, together with copies of such financing statements,
and tax and judgment lien search reports from a Person satisfactory to the
Lessor and the Trustee showing no evidence of such liens filed against
such Lessee;
(h) Evidence. Evidence of the filing of proper financing statements
on Form UCC-1, (i) naming each Lessee as debtor and the Master Collateral
Agent as secured party or other, similar instruments or documents, as may
be necessary or desirable under the UCC of all applicable jurisdictions to
perfect the Master Collateral Agent's interest in the Master Collateral
with respect to which the Trustee is designated as the Beneficiary and
(ii) naming each Lessee as debtor, the Lessor as secured party and the
Master Collateral Agent as assignee, as may be necessary or desirable
under the UCC of all applicable jurisdictions to perfect the precautionary
security interest of the Lessor hereunder and the assignment of the same
to the Master Collateral Agent;
(i) Master Collateral Agency Agreement. An executed copy of the
Master Collateral Agency Agreement;
(j) Lease. Original counterpart No. 1 of this Lease shall be
delivered to the Trustee with receipt acknowledged thereby;
(k) Vehicle Title Nominee Agreement. An executed copy of the Vehicle
Title Nominee Agreement;
(l) Assignment Agreement. An executed copy of the Assignment
Agreement of each Manufacturer;
(m) Certified Copy of Manufacturer Program. A copy of each
Manufacturer Program relating to Vehicles which will be leased hereunder
and an Officer's Certificate, dated the Closing Date, and duly executed by
an Authorized Officer of the Lessee, certifying that each such copy is
true, correct and complete as of the Closing Date;
(n) Assignment of Chrysler Lien; Evidence of Filing of UCC
Termination Statements.
(i) An executed copy of an assignment agreement, pursuant to
which Chrysler has assigned its interest in the Certificates of
Title with respect to the Existing Fleet to the Master Collateral
Agent; and
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(ii) Evidence of the filing of proper financing statements
(form UCC-3) necessary to release all security interests and other
rights of Chrysler Financial Corporation in the Existing Fleet
previously granted by Dollar to Chrysler Financial Corporation;
(o) The Indenture, dated the Closing Date for the first Series of
Notes, duly executed by the Lessor and the Trustee, and all conditions to
the effectiveness thereof and the issuance of the Notes thereunder shall
have been satisfied or waived in all respects;
(p) A letter of credit, issued by ______________, with an initial
stated amount of $__________; and
(q) Other. Such other documents as the Trustee or the Lessor may
reasonably request.
[Signatures on following pages.]
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused it
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
LESSOR:
RENTAL CAR FINANCE CORP.
By:_______________________________
Name:
Title:
Address: 0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention:
Telephone: (918) ______________
Facsimile: (918) ______________
LESSEES AND SERVICERS:
THRIFTY RENT-A-CAR SYSTEM, INC.
By:_______________________________
Name:
Title:
Address: 0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention:
Telephone: (918) ______________
Facsimile: (918) ______________
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DOLLAR RENT A CAR SYSTEMS, INC.
By:______________________________
Name:
Title:
Address: 0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention:
Telephone: (918) ______________
Facsimile: (918) ______________
GUARANTOR
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
By:_______________________________
Name:
Title:
Address: [5330 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000]
Attention:
Telephone: (918) __________
Facsimile: (918) __________
COUNTERPART NO. ___ OF TEN (10) SERIALLY NUMBERED MANUALLY EXECUTED
COUNTERPARTS. TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER
UNDER THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE
CREATED THROUGH THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN
COUNTERPART NO. 1.
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[The Trustee does hereby acknowledge, by its signature below, receipt of
this Counterpart No. 1.
TRUSTEE:
[ ]
By:_______________________________
Name:
Title:
Address:
Acknowledged by:
MASTER COLLATERAL AGENT
Bankers Trust Company
By:_______________________________
Name:
Title:
Address: 0 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust and Agency
Group/Structured Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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ANNEX A
ANNEX
to the
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
Dated as of December [ ], 1997
among
RENTAL CAR FINANCE CORP.
as Lessor,
THRIFTY RENT-A-CAR-SYSTEM, INC.,
as Lessee and Servicer,
DOLLAR RENT A CAR SYSTEMS, INC.,
as Lessee and Servicer,
and those subsidiaries and affiliates
of Dollar Thrifty Automotive Group, Inc.
from time to time
becoming Lessees and Servicers hereunder
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
as Guarantor and Master Servicer
53
1. Scope of Annex. This Annex A shall apply only to the acquisition,
leasing and servicing of the Acquired Vehicles by RCFC pursuant to the Base
Lease, as supplemented by this Lease Annex (collectively, the "Operating
Lease").
2. General Agreement. With respect to the Acquired Vehicles, each Lessee
and the Lessor each intend that the Base Lease, as supplemented by this Lease
Annex, is an operating lease and that the relationship between the Lessor and
the Lessees pursuant thereto and hereto shall always be only that of lessor and
lessee, and each Lessee hereby declares, acknowledges and agrees that the Lessor
has title to and is the owner of the Acquired Vehicles. The Lessees shall not
acquire by virtue of the Lease any right, equity, title or interest in or to any
Acquired Vehicles, except the right to use the same under the terms of the
Operating Lease hereof. The parties agree that the Operating Lease is a "true
lease" for all legal, accounting, tax and other purposes and agree to treat the
Operating Lease, as it applies to the Acquired Vehicles, as an operating lease
for all purposes, including tax, accounting and otherwise. The parties will file
all federal, state and local tax returns and reports in a manner consistent with
the preceding sentence.
3. Operating Lease Commitment. (a) Upon the execution and delivery of this
Operating Lease, the Lessor shall, subject to the terms and conditions of the
Agreement, purchase from time to time on or after the Lease Commencement Date
and prior to the Lease Expiration Date, all Acquired Vehicles identified in
Vehicle Orders placed by a Lessee for a purchase price equal to the Initial
Acquisition Cost thereof, and simultaneously therewith, the Lessor shall under
the Operating Lease enter into operating leases with such Lessee with respect to
such Vehicles; provided, that the aggregate Net Book Value of Acquired Vehicles
leased hereunder on any date shall not exceed (a) the Maximum Lease Commitment,
less (b) the Base Amount as of such date with respect to the Financing Lease.
4. Lease Procedures. In connection with the Lease of any Acquired Vehicles
to be leased on or after the Lease Commencement Date, to evidence the
acquisition of such Acquired Vehicles by the Lessor, the applicable Lessee shall
deliver to the Lessor the following:
(a) a Vehicle Order (including a Vehicle Acquisition Schedule) with
respect to all Acquired Vehicles to be leased by such Lessee on the Lease
Commencement Date;
(b) UCC termination statements terminating, or UCC partial releases
releasing, any security interests and other liens (other than Permitted
Liens) in favor of any Person with respect to each Acquired Vehicle leased
on the Lease Commencement Date and identified in such Vehicle Order, and
any related Vehicle Disposition Programs;
(c) with respect to the initial lease of Acquired Vehicles by such
Lessee, a fully executed Assignment Agreement covering each Program
Vehicle leased under this Annex A on the Lease Commencement Date or to be
leased under this Annex A
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on any date thereafter, the related Vehicle Disposition Programs, and
any other Master Collateral relating to such Vehicles.
Each Lessee hereby agrees that each such delivery of a Vehicle Order shall
be deemed hereunder to constitute a representation and warranty by the Lessee,
to and in favor of the Lessor and the Trustee, that all the conditions precedent
to the acquisition and leasing of the Vehicles identified in such Vehicle Order
have been satisfied as of the date of such Vehicle Order.
5. Maximum Vehicle Lease Term. The maximum Vehicle lease term of the
Operating Lease as it relates to each Acquired Vehicle leased hereunder shall be
from the Vehicle Lease Commencement Date to the date that is 24 months from the
date of the original new vehicle dealer invoice for such Acquired Vehicle. On
the occurrence of such date for a Vehicle not previously disposed of, the
applicable Lessee shall, (a) on behalf of the Lessor, promptly dispose of such
Vehicle in accordance with the terms hereof and in accordance with any
instructions of the Lessor for such disposition, (b) in each case, provide that
Disposition Proceeds be paid directly to the Master Collateral Account for the
benefit of the Trustee and (c) pay to the Master Collateral Agent or the
Trustee, in accordance with this Operating Lease, any other amounts unpaid and
owing from such Lessee under the Lease in respect of such Vehicle.
6. Lessee's Rights to Purchase Vehicles. Each Lessee will have the option,
exercisable with respect to any Acquired Vehicle during the Vehicle Term with
respect to such Acquired Vehicle, to purchase any Vehicles leased by it under
this Agreement at the Vehicle Purchase Price, in which event such Lessee will
pay the Vehicle Purchase Price to the Master Collateral Agent on or before the
Due Date next succeeding such purchase by the Lessee plus all accrued and unpaid
Monthly Base Rent and Monthly Variable Rent with respect to such Vehicle through
the date of such purchase. The Lessor shall cause title to any such Vehicle to
be transferred to the applicable Lessee, and the Servicer shall cause the Master
Collateral Agent to cause its lien to be removed from the certificate of title
for such Vehicle, concurrently with or promptly after the Vehicle Purchase Price
for such Vehicle (and any unpaid Monthly Base Rent and unpaid Monthly Variable
Rent) is paid by such Lessee to the Master Collateral Agent.
7. Vehicle Disposition. The Lessor and each Lessee agree that, with
respect to Acquired Vehicles, the applicable Lessee shall use its commercially
reasonable efforts to deliver each related Program Vehicle for sale in
accordance with the applicable Auction Procedures or to return such related
Program Vehicle to the related Manufacturer (a) not prior to the end of the
Minimum Term for such Vehicle, and (b) not later than the end of the Maximum
Term for such Vehicle; provided, however, if for any reason, such Lessee fails
to deliver such a Program Vehicle to the applicable Manufacturer for repurchase
by the Manufacturer or in accordance with the applicable Auction Procedures, in
each case in accordance with the applicable Vehicle Disposition Program during
the time period between the expiration of the Minimum Term and the expiration of
the Maximum Term, such Lessee
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shall be obligated to sell or otherwise dispose of such Program Vehicle and pay
a Late Return Payment with respect thereto, in each case as provided in Section
13 of the Base Lease. Each Lessee shall, with respect to Acquired Vehicles
leased by it under this Operating Lease, pay the equivalent of the Rent for the
Minimum Term for Program Vehicles returned before the Minimum Term, regardless
of actual usage, unless such a Program Vehicle is a Casualty, which will be
handled in accordance with Section 7 of the Base Lease. All Disposition
Proceeds, Repurchase Payments and Guaranteed Payments due from the disposition
of Program Vehicles pursuant to this Section shall be due and payable to the
Lessor. The Lessor and each Lessee agree, with respect to Acquired Vehicles,
that such Lessee shall use its commercially reasonable efforts to dispose of
each Non-Program Vehicle leased to it under this Operating Lease (a) in a manner
most likely to maximize proceeds from such disposition and consistent with
industry practice and (b) within twenty-four (24) months after the date of the
original new vehicle dealer invoice for such Vehicle. All Disposition Proceeds
due from the disposition of Non-Program Vehicles pursuant to this Section shall
be due and payable to the Lessor.
8. Lessor's Right to Cause Vehicles to be Sold. Notwithstanding anything
to the contrary contained in the Agreement, the Lessor shall have the right, at
any time after the date thirty (30) days prior to the expiration of the Maximum
Term for any Program Vehicle leased under this Annex A, to require that the
Lessee in respect of such Program Vehicle deliver such Program Vehicle to the
Manufacturer for repurchase or, as applicable, to the designated auction site,
or exercise commercially reasonable efforts to arrange for the sale of such
Program Vehicle to a third party for a price greater than the Net Book Value
thereof, in which event the Lessee shall, prior to the expiration of such
Maximum Term, deliver such Vehicle to its Manufacturer or the designated auction
site or arrange for the sale of such Program Vehicle to a third party for a
price greater than the Net Book Value (or purchase the Program Vehicle itself
from the Lessor for the Vehicle Purchase Price). If a sale of the Program
Vehicle is arranged by a Lessee prior to the expiration of such Maximum Term,
then such Lessee shall deliver the Program Vehicle to the purchaser thereof, the
Lien of the Master Collateral Agent on the Certificate of Title of such Program
Vehicle shall be released, and such Lessee shall cause to be delivered to the
Lessor the funds paid for such Program Vehicle by the purchaser. If a Lessee is
unable to arrange for a sale of the Program Vehicle prior to the expiration of
such Maximum Term, then such Lessee shall cease attempting to arrange for such a
sale and shall return such Program Vehicle to the applicable Manufacturer or
tender such Program Vehicle in accordance with applicable Auction Procedures or
purchase such Vehicle as herein provided. In no event may any Program Vehicle be
sold pursuant to this paragraph 8 (other than pursuant to a Vehicle Disposition
Program) unless the funds to be paid to the Lessor arising out of such sale
exceed the Net Book Value of such Vehicle less reasonably predictable Excess
Mileage charges, Excess Damage Charges and other similar charges imposed by the
Manufacturer.
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9. Calculation of Rent. Rent shall be due and payable on a monthly basis
as set forth in this paragraph 9:
"Monthly Base Rent", with respect to each Due Date and each Acquired
Vehicle leased under the Lease on any day during the Related Month, shall
be the sum of all Depreciation Charges that have accrued with respect to
such Vehicle during the Related Month.
"Monthly Variable Rent", with respect to each Due Date and each
Acquired Vehicle leased under the Lease on any day during the Related
Month, shall equal the sum, without double counting, of (a) the product of
(i) an amount equal to the Net Book Value of such Acquired Vehicle on the
first day contained within both the Related Month and the Vehicle Term
with respect to such Vehicle multiplied by the VFR for the Interest Period
ending on the next succeeding Payment Date and (ii) the quotient obtained
by dividing (A) the number of days contained within both the Related Month
and the Vehicle Term with respect to such Acquired Vehicle by (B) the
total number of days in the Related Month plus (b) the product of (i) an
amount equal to all Carrying Charges for the Related Month, and (ii) the
quotient obtained by dividing the Net Book Value of such Acquired Vehicle
as of the first day of the Related Month by the Net Book Value of all
Vehicles leased under the Lease as of the first day of the Related Month.
"Rent" means Monthly Base Rent plus Monthly Variable Rent.
10. Payment of Rent and Other Payments.
(a) Monthly Base Rent. On each Due Date, each Lessee shall pay to
the Lessor the Monthly Base Rents that have accrued during the Related
Month with respect to all Vehicles that were leased by such Lessee under
the Operating Lease on any day during the Related Month;
(b) Monthly Variable Rent. On each Due Date, each Lessee shall pay
to the Lessor the Monthly Variable Rents that have accrued during the
Related Month with respect to all Vehicles that were leased by such Lessee
under the Operating Lease on any day during the Related Month;
(c) Termination Payments, Casualty Payments and Late Return
Payments. On each Due Date, each Lessee shall pay to the Lessor all
Termination Payments, Casualty Payments and Late Return Payments with
respect to Vehicles leased by such Lessee under the Operating Lease as
provided in Section 5.4 of the Base Lease; and
(d) Certain Other Payments. Each Lessee shall cause all Disposition
Proceeds, Repurchase Payments, Guaranteed Payments and Incentive Payments
payable in respect of Acquired Vehicles leased by it under the Operating
Lease, to be paid
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directly to the Master Collateral Agent for the benefit of the Trustee.
The Servicer and the Lessees each agree that in the event that the
Servicer or a Lessee shall receive directly any such payment, including
cash, securities, obligations or other property, the Servicer or such
Lessee, as the case may be, shall accept the same as the Master
Collateral Agent's agent and shall hold the same in trust on behalf of
and for the benefit of the Master Collateral Agent, and shall deposit the
same, within two (2) Business Days after receipt thereof, into the Master
Collateral Account in the same form received, with the endorsement of the
Servicer or such Lessee, as the case may be, when necessary or
appropriate.
11. Net Lease. THE OPERATING LEASE SHALL BE A NET LEASE, AND EACH LESSEE'S
OBLIGATION TO PAY ALL RENT AND OTHER SUMS HEREUNDER SHALL BE ABSOLUTE AND
UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY ABATEMENT OR REDUCTION FOR ANY
REASON WHATSOEVER. The obligations and liabilities of the Lessees hereunder
shall in no way be released, discharged or otherwise affected (except as may be
expressly provided herein including, without limitation, the right of a Lessee
to reject Vehicles pursuant to Section 2.2 of the Base Lease) for any reason,
including without limitation: (i) any defect in the condition, merchantability,
quality or fitness for use of the Vehicles or any part thereof; (ii) any damage
to, removal, abandonment, salvage, loss, scrapping or destruction of or any
requisition or taking of the Vehicles or any part thereof; (iii) any
restriction, prevention or curtailment of or interference with any use of the
Vehicles or any part thereof; (iv) any defect in or any Lien on title to the
Vehicles or any part thereof; (v) any change, waiver, extension, indulgence or
other action or omission in respect of any obligation or liability of a Lessee
or the Lessor; (vi) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to such
Lessee, the Lessor or any other Person, or any action taken with respect to this
Operating Lease by any trustee or receiver of any Person mentioned above, or by
any court; (vii) any claim that such Lessee has or might have against any
Person, including without limitation the Lessor; (viii) any failure on the part
of the Lessor to perform or comply with any of the terms hereof or of any other
agreement; (ix) any invalidity or unenforceability or disaffirmance of the
Operating Lease or any provision hereof or any of the other Related Documents or
any provision of any thereof, in each case whether against or by such Lessee or
otherwise; (x) any insurance premiums payable by such Lessee with respect to the
Vehicles; or (xi) any other occurrence whatsoever, whether similar or dissimilar
to the foregoing, whether or not such Lessee shall have notice or knowledge of
any of the foregoing and whether or not foreseen or foreseeable. The Operating
Lease shall be noncancelable by any Lessee and, except as expressly provided
herein, each Lessee, to the extent permitted by law, waives all rights now or
hereafter conferred by statute or otherwise to quit, terminate or surrender the
Operating Lease, or to any diminution or reduction of Rent payable by the Lessee
hereunder. All payments by a Lessee made hereunder shall be final (except to the
extent of adjustments provided for herein), absent manifest error and, except as
otherwise provided herein, no Lessee shall seek to recover any such payment or
any part thereof for any reason whatsoever, absent manifest error. If for any
reason whatsoever the Operating Lease shall be terminated in whole or in part by
operation of law or otherwise except as expressly
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58
provided herein, each Lessee shall nonetheless pay an amount equal to each Rent
payment at the time and in the manner that such payment would have become due
and payable under the terms of the Operating Lease as if it had not been
terminated in whole or in part. All covenants and agreements of the Lessees
herein shall be performed at its cost, expense and risk unless expressly
otherwise stated.
12. Liens. Except for Permitted Liens, each Lessee shall keep all Vehicles
leased by it free of all Liens arising during the Term. Upon the Vehicle Lease
Expiration Date for each Vehicle leased hereunder, the Lessor may, in its
discretion, remove any such Lien and any sum of money that may be paid by the
Lessor in release or discharge thereof, including reasonable attorneys' fees and
costs, will be paid by the applicable Lessee upon demand by the Lessor. The
Lessor may grant security interests in the Vehicles without consent of the
applicable Lessee; provided, however, that if any such Liens would interfere
with the rights of such Lessee under the Operating Lease or any sublessee of the
Lessee, the Lessor must obtain the prior written consent of the Lessee. Each
Lessee acknowledges that the granting of Liens and the taking of other actions
pursuant to the Indenture and the Related Documents does not interfere with the
rights of such Lessee under the Operating Lease.
13. Non-Disturbance. So long as a Lessee satisfies its obligations
hereunder, its quiet enjoyment, possession and use of the Vehicles will not be
disturbed during the Term subject, however, to paragraph 8 of this Annex A and
except that the Lessor, the Master Collateral Agent and the Trustee each retains
the right, but not the duty, to inspect the Vehicles without disturbing the
ordinary conduct of such Lessee's business. Upon the request of the Lessor, the
Master Collateral Agent or the Trustee, from time to time, each Lessee will make
reasonable efforts to confirm to the Lessor, the Master Collateral Agent and the
Trustee the location, mileage and condition of each Vehicle and to make
available for the Lessor's, the Master Collateral Agent's or the Trustee's
inspection within a reasonable time period, not to exceed forty-five (45) days,
the Vehicles leased by such Lessee at the location where the Vehicles are
normally domiciled. Further, each Lessee (and each related Franchisee) will,
during normal business hours and with a notice of three (3) Business Days, make
its records pertaining to the Vehicles available to the Lessor, the Master
Collateral Agent or the Trustee for inspection at the location where such
Lessee's (and each such related Franchisee's) records are normally domiciled.
14. Certain Risks of Loss Borne by Lessees. Upon delivery of each Vehicle
to a Lessee, as between the Lessor and such Lessee, such Lessee assumes and
bears the risk of loss, damage, theft, taking, destruction, attachment, seizure,
confiscation or requisition and all other risks and liabilities with respect to
such Vehicle, including personal injury or death and property damage, arising
with respect to any Vehicle due to the manufacturer, purchase, acceptance,
rejection, delivery, leasing, subleasing, possession, use, inspection,
registration, operation, condition, maintenance, repair or storage of such
Vehicle, howsoever arising.
15. Title. This is an agreement to lease only, and title to the Acquired
Vehicles will at all times remain in the Lessor's name. The Lessees will not
have any rights or interest in
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59
such Vehicles whatsoever other than the rights of possession and use and the
right to sublease such Vehicles as provided by this Agreement. In addition, each
Lessee, by its execution hereof, acknowledges and agrees that (i) the Lessor is
the sole owner and holder of all right, title and interest in and to the Vehicle
Disposition Programs as they relate to the Vehicles leased hereunder and (ii)
such Lessee has no right, title or interest in any Vehicle Disposition Program
as it relates to any Vehicle leased hereunder. To confirm the foregoing, each
Lessee, by its execution of the Base Lease of which this Annex A is a part,
hereby assigns and transfers to the Lessor any rights that such Lessee may have
in respect of any Vehicle Disposition Programs as they relate to the Vehicles
leased hereunder.
* * *
-8-
60
ANNEX B
ANNEX
to the
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
Dated as of December [ ], 1997
between
RENTAL CAR FINANCE CORP.
as Lessor,
THRIFTY RENT-A-CAR-SYSTEM, INC.,
as Lessee and Servicer,
DOLLAR RENT A CAR SYSTEMS, INC.,
as Lessee and Servicer,
and those subsidiaries and affiliates
of Dollar Thrifty Automotive Group, Inc.
from time to time
becoming Lessees and Servicers hereunder
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
as Guarantor and Master Servicer
61
1. Scope of Annex. This Annex B shall apply only to the acquisition or
financing, leasing and servicing of the Financed Vehicles by RCFC pursuant to
the Base Lease, as supplemented by this Lease Annex (collectively, the
"Financing Lease").
2. General Agreement. With respect to the Financed Vehicles, each Lessee
and the Lessor each intend that the Base Lease, as supplemented by this Lease
Annex, constitute a financing arrangement and the Lessor hereby declares,
acknowledges and agrees that the ownership of the Financed Vehicles rests solely
with such Lessee subject to the security interest granted hereunder to the
Lessor.
3. Financing Lease Commitment. Subject to the terms and conditions of the
Financing Lease, upon execution and delivery of the Financing Lease, the Lessor
shall (i) on the Lease Commencement Date purchase from Dollar the Existing Fleet
for a purchase price equal to the aggregate Net Book Value thereof, and (ii)
from time to time on or after the Lease Commencement Date and prior to the Lease
Expiration Date purchase all other Financed Vehicles identified in Vehicle
Orders placed by the Lessee for a purchase price equal to the Initial
Acquisition Cost thereof, and in each case simultaneously therewith enter into
this Financing Lease with such Lessee with respect to the Existing Fleet and
other Financed Vehicles, as the case may be; provided, that the aggregate
outstanding Base Amount of the Financing Lease shall not on any date exceed (a)
the Maximum Lease Commitment, less (b) the sum of (x) the sum of the Net Book
Values of Acquired Vehicles leased under the Operating Lease on such date, each
such Net Book Value calculated as of the first day contained within both the
calendar month in which such date of determination occurs and the Vehicle Term
for the related Acquired Vehicle, plus (y) accrued and unpaid Monthly Base Rent
under the Operating Lease as of such date.
4. Lease Procedures.
(a) Initial Lease. In connection with the Lease of the Existing
Fleet and any other Financed Vehicles to be leased on the Lease
Commencement Date, to evidence the refinancing of the Vehicles in the
Existing Fleet and the acquisition and financing of such other Financed
Vehicles by such Lessee on the Lease Commencement Date and the conveyance
on such date of a security interest in such Financed Vehicles to the
Master Collateral Agent, the Lessees shall deliver to the Lessor on or
prior to the Lease Commencement Date in respect of the initial Vehicle
Order of each Additional Lessee the following:
(i) a schedule concerning the Existing Fleet as specified in
Section 2.1 of the Base Lease, in the case of all Vehicles in the
Existing Fleet, or a Vehicle Order (including a Vehicle Acquisition
Schedule) with respect to all other Financed Vehicles to be leased
by such Lessee on the Lease Commencement Date or date of the initial
Vehicle Order of an Additional Lessee, as applicable;
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62
(ii) a report of the results of a search of the appropriate
records of the county and state in which the Existing Fleet are
located and the county and state in which such Lessee's principal
office is located, which shall show no liens or other security
interests (other than Permitted Liens and the lien of Chrysler
Financial Corporation or such other party as has delivered a Payoff
Letter in the Existing Fleet) with respect to such Vehicles or, in
the event that such search reveals any such non-permitted Lien or
security interest, there shall be delivered to the Trustee a
termination of such Lien or security interest as provided below;
(iii) confirmation from any lender holding a security interest
in any Vehicle in the Existing Fleet stating unconditionally (A)
that, if any sums are to be paid to such lender in connection with
the lease of the Existing Fleet, such lender has been paid the full
amount due to it in connection with such refinancing and (B) that
any lien or security interest of such lender in such Vehicle has
been released;
(iv) UCC termination statements terminating, or UCC partial
releases releasing, any security interests and other liens (other
than Permitted Liens and the lien of Chrysler Financial Corporation
in the Existing Fleet) in favor of any Person with respect to each
Vehicle in the Existing Fleet identified in such schedule and any
related Vehicle Disposition Programs;
(v) fully executed Assignment Agreements from such Lessee
covering, as applicable, each Vehicle in the Existing Fleet and each
other Financed Vehicle leased by such Lessee on the Lease
Commencement Date or leased on any date thereafter under the Lease,
the related Vehicle Disposition Programs, and any other Master
Collateral relating to such Vehicles; and
(vi) an Officer's Certificate for such Lessee stating that all
the conditions precedent under the Lease to the leasing by such
Lessee of such Vehicles on the Lease Commencement Date have been
satisfied.
(b) Subsequent Leases. In connection with each Lease of a Financed
Vehicle after the Lease Commencement Date, to evidence the acquisition or
financing of such Financed Vehicle by the Lessor and the conveyance of a
security interest in such Financed Vehicles to the Master Collateral
Agent, each Lessee shall deliver to the Lessor a Vehicle Order (including
a Vehicle Acquisition Schedule) with respect to all Financed Vehicles to
be leased by such Lessee on the date specified therein. Each Lessee hereby
agrees that each such delivery of a Vehicle Order shall be deemed
hereunder to constitute a representation and warranty by such Lessee, to
and in favor of the Lessor and the Trustee, that all the conditions
precedent to the acquisition or financing and leasing of the Vehicles
identified in such Vehicle Order have been satisfied as of the date of
such Vehicle Order.
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63
5. Maximum Vehicle Lease Term. The maximum Vehicle lease term of the
Financing Lease as it relates to each Financed Vehicle leased hereunder shall be
from the Vehicle Lease Commencement Date to the date that is 60 months from the
Vehicle Lease Commencement Date. On the occurrence of such date, the applicable
Lessee shall pay to the Master Collateral Agent or the Trustee, in accordance
with this Financing Lease, any amounts unpaid and owing under the Lease in
respect of such Vehicle.
6. Calculation of Rent and Monthly Supplemental Payment. Rent and the
Monthly Supplemental Payment shall be due and payable on a monthly basis as set
forth in this paragraph 6:
"Monthly Base Rent", with respect to each Due Date and each Financed
Vehicle leased under the Lease on any day during the Related Month, shall
be the sum of all Depreciation Charges that have accrued with respect to
such Vehicle during the Related Month.
"Monthly Finance Rent", with respect to each Due Date and each
Financed Vehicle leased under the Lease on any day during the Related
Month, shall equal the sum, without double counting, of (a) the product of
(i) an amount equal to the Net Book Value of such Financed Vehicle on the
first day contained within both the Related Month and the Vehicle Term
with respect to such Vehicle multiplied by the VFR for the Interest Period
ending on the next succeeding Payment date and (ii) the quotient obtained
by dividing (A) the number of days contained within both the Related Month
and the Vehicle Term with respect to such Financed Vehicle by (B) the
total number of days in the Related Month, plus (b) the product of (i) an
amount equal to all Carrying Charges for the Related Month, and (ii) the
quotient obtained by dividing the Net Book Value of such Financed Vehicle
as of the first day of the Related Month by the Net Book Value of all
Vehicles leased under the Lease as of the first day of the Related Month.
"Monthly Supplemental Payment" with respect to each Due Date and
each Financed Vehicle shall be an amount equal to (a) the sum of, as
applicable, (i) the aggregate amount of any Guaranteed Payment, Repurchase
Payment, Disposition Proceeds and Incentive Payments received by the
Lessor, the Master Collateral Agent or the Trustee (including by deposit
into the Collection Account or the Master Collateral Account) during the
Related Month with respect to such Vehicle, (ii) the amount of any unpaid
Guaranteed Payment or unpaid Repurchase Payment with respect to such
Vehicle becoming a Delinquent Guaranteed Payment or Delinquent Repurchase
Payment, as the case may be, during the Related Month, (iii) the amount of
any Disposition Proceeds with respect to such Vehicle becoming Delinquent
Disposition Proceeds during the Related Month, (iv) the amount of any
unpaid Incentive Payments with respect to such Vehicle becoming Delinquent
Incentive Payments during the Related Month, (v) if such Vehicle becomes a
Casualty or ceases to be an Eligible Vehicle (other than as a result of
the sale or other disposition
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64
thereof), in each case during the Related Month, the Net Book Value of
such Vehicle calculated as of the earlier of the first day of such Related
Month and the date such vehicle is disposed of or becomes a Casualty, as
applicable, and (vi) if such Vehicle was returned to its Manufacturer for
repurchase or sold to any Person or otherwise disposed of, in each case
during the Related Month, the excess, if any, of (A) the Net Book Value of
such Vehicle, calculated as of the applicable Vehicle Lease Expiration
Date, over (B) the sum of all amounts (other than Incentive Payments)
payable in respect of such Vehicle pursuant to clause (i) above, less (b)
the excess, if any, of (i) the aggregate amount of Disposition Proceeds,
Guaranteed Payments or Repurchase Payments, as applicable, from the sale
or other disposition of such Vehicle received by the Lessor, the Master
Collateral Agent or the Trustee (including by deposit into the Collection
Account or the Master Collateral Account) during such Related Month over
(ii) the Net Book Value of such Vehicle, calculated as of the applicable
Vehicle Lease Expiration Date.
"Rent" means Monthly Base Rent plus Monthly Finance Rent.
7. Payment of Rent and Other Payments. (a) On each Due Date:
(i) Monthly Base Rent. Each Lessee shall pay to the Lessor the
Monthly Base Rents that have accrued during the Related Month with respect
to all Vehicles that were leased by such Lessee under the Finance Lease on
any day during the Related Month; provided, however, that in the event
that delinquent payments of Guaranteed Payments, Repurchase Payments,
Disposition Proceeds and/or Incentive Payments are received by the Lessor,
the Master Collateral Agent or the Trustee (including by deposit into the
Collection Account or the Master Collateral Account) during the Related
Month, such payments may be netted against the Monthly Base Rents to be
paid on such Due Date to the extent (but only to the extent) that Monthly
Base Rent has already been received by any of such Persons in respect of
such delinquent payment obligations pursuant to any or all of clauses
(a)(ii), (iii) and (iv) of the definition of Monthly Supplemental Payment
set forth in this Annex B;
(ii) Monthly Finance Rent. Each Lessee shall pay to the Lessor the
Monthly Finance Rents that have accrued during the Related Month with
respect to all Vehicles that were leased by such Lessee under the Finance
Lease on any day during the Related Month.
(iii) Monthly Supplemental Payments. Each Lessee shall pay to the
Lessor the Monthly Supplemental Payments that have accrued during the
Related Month with respect to all Vehicles that were leased by such Lessee
under the Finance Lease on any day during the Related Month; provided,
however, that in the event that the Monthly Supplemental Payment accrued
during a Related Month is a negative dollar amount, such amount may be
netted against other payments to be paid on such Due Date pursuant to this
paragraph 7.
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65
(b) On the expiration of the term of the Lease with respect to a Financed
Vehicle, any remaining Base Amount, plus all other amounts payable by each
Lessee under the Financing Lease with respect to such Vehicle shall be
immediately due and payable.
(c) Each Lessee may from time to time prepay the Base Amount of the
Financing Lease with respect to a Financed Vehicle, in whole or in part, on any
date, provided that such Lessee shall give the Lessor and the Trustee not less
than one (1) Business Day's prior notice of any prepayment, specifying the date
and amount of such prepayment, and the Financed Vehicles to which such
prepayment relates.
8. Risk of Loss Borne by Lessees. Upon delivery of each Vehicle to a
Lessee, as between the Lessor and such Lessee, such Lessee assumes and bears the
risk of loss, damage, theft, taking, destruction, attachment, seizure,
confiscation or requisition with respect to such Vehicle, however caused or
occasioned, and all other risks and liabilities, including personal injury or
death and property damage, arising with respect to any Vehicle or the
manufacture, purchase, acceptance, rejection, ownership, delivery, leasing,
subleasing, possession, use, inspection, registration, operation, condition,
maintenance, repair, storage, sale, return or other disposition of such Vehicle,
howsoever arising.
9. Mandatory Repurchase of Texas Vehicles. Prior to the Vehicle Lease
Expiration Date with respect to each Texas Vehicle leased by a Lessee under the
Finance Lease (other than a Vehicle Lease Expiration Date arising in connection
with the purchase of such Texas Vehicle pursuant to this paragraph 9) and, in
the case of each such Texas Vehicle which is a Program Vehicle, prior to the
expiration of the Maximum Term applicable thereto (unless such Vehicle has been
redesignated as a Non-Program Vehicle in accordance with Section 14 of the Base
Lease), such Lessee shall purchase such Texas Vehicle (including any such
Vehicle which has become a Casualty) at a purchase price equal to the Net Book
Value of such Vehicle calculated as of the date of purchase (or, in the case of
a Casualty, at a purchase price equal to the Monthly Supplemental Payments
accruing in respect of such Casualty during the Related Month in which such
Vehicle became a Casualty), which shall be payable to the Master Collateral
Agent (together with all accrued and unpaid Rent and other payments due and
payable on such Due Date with respect to such Texas Vehicle through the date of
such purchase) on or prior to the Due Date next succeeding such purchase by such
Lessee. The Lessor shall cause title to each Texas Vehicle to be transferred to
the applicable Lessee, and the Servicer shall cause the Master Collateral Agent
to cause its lien to be removed from the Certificate of Title for such Vehicle,
concurrently with or promptly after such purchase price for such Texas Vehicle
(and any such unpaid Rent and payments) is paid by such Lessee to the Master
Collateral Agent. Notwithstanding anything to the contrary in this Agreement, no
Texas Vehicle may be sold or otherwise disposed of (other than pursuant to
Section 17.3 of the Base Lease), including at Auction or by return to its
Manufacturer pursuant to a Vehicle Disposition Program, prior to its purchase by
a Lessee pursuant to and in accordance with this paragraph 9.
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Schedule 1
Litigation Claims
67
Schedule 2
Pension Plans
68
Schedule 3
Business Locations
==============================================================================================================
States in which it
Chief Executive Office State of Principal Conducts Business or
Legal Name and Trade Name Business Location Place of Business Maintains Records
--------------------------------------------------------------------------------------------------------------
Thrifty Rent-A-Car System, Inc.
Trade Name: Thrifty Rent-A-Car
System, Inc.
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Dollar Rent A Car Systems, Inc.
Trade Name: Dollar Rent A Car
Systems, Inc.
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------
Dollar Thrifty Automotive
Group, Inc.
Trade Names: Dollar Thrifty
Automotive Group, Inc.; [DTAG]
==============================================================================================================
69
Schedule 4
Liens (1)
----------
(1) Verify old Citicorp lien.
70
ATTACHMENT A-1
Information on Existing Fleet
71
ATTACHMENT A-2
Vehicle Acquisition Schedule
1 Vehicle Group Number (Vehicle Model)
2 Vehicle Identification Number (last eight digits) (VIN)
3 Vehicle Lease Commencement Date
4 Initial Acquisition Cost
5 Monthly Base Rent
6 Garaging State
72
ATTACHMENT B*
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Rental Car Finance Corp. does
hereby make, constitute and appoint its true and lawful Attorney(s)-in-Fact for
it and in its name, stead and behalf, to execute any and all documents
pertaining to the titling of motor vehicles in the name of Rental Car Finance
Corp., the noting of the lien of Bankers Trust Company, as Master Collateral
Agent, as the first lienholder on certificates of title, the licensing and
registration of motor vehicles and the transfer of title of motor vehicles. This
power is limited to the foregoing and specifically does not authorize the
creation of any other liens or encumbrances on any of said motor vehicles, other
than Permitted Liens (as defined in Schedule 1 to the Base Indenture, dated as
of December 13, 1995 (as such agreement may be amended, supplemented or modified
from time to time in accordance with its terms)).
The powers and authority granted hereunder shall, unless sooner
terminated, revoked or extended, cease five years from the date of execution as
set forth below.
IN WITNESS WHEREOF, Rental Car Finance Corp. has caused this
instrument to be executed on its behalf by its _____________ this ____ day of
_______, 19__.
RENTAL CAR FINANCE CORP.
By: _______________________________
Name:
Title:
----------
* To be updated.
73
State of ___________________ )
: s.s.:
County of _________________ )
Subscribed and sworn before me, a notary public, in and for said county
and state, this ____ day of ____________, 19__.
________________________
Notary Public
My Commission Expires: __________
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74
ATTACHMENT C
FORM OF CERTIFICATION OF TRADE OR BUSINESS USE
The undersigned, ___________ of Rental Car Finance Corp., an Oklahoma
corporation, hereby warrants and certifies, under penalties of perjury, that (1)
each Lessee intends to use the Acquired Vehicles in a trade or business of each
Lessee, and (2) each Lessee has been advised that it will not be treated as the
owner of the Acquired Vehicles for federal income tax purposes.
Defined terms otherwise not defined herein shall have the meanings
assigned to such terms in Schedule 1 to the Base Indenture, dated as of December
13, 1995 (as such agreement may be amended, supplemented or modified from time
to time in accordance with its terms).
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed this ____ day of _________, 199__.
RENTAL CAR FINANCE CORP.
By: __________________________
Name:
Title:
75
ATTACHMENT D
FORM OF AFFILIATE JOINDER IN LEASE
THIS AFFILIATE JOINDER IN LEASE AGREEMENT (this "Joinder") is executed as
of _______________ ___, 19___, by _______________, a
____________________________ ("Joining Party"), and delivered to Rental Car
Finance Corp., an Oklahoma corporation ("RCFC"), as lessor pursuant to the
Master Motor Vehicle Lease and Servicing Agreement dated as of December [ ],
1997 (as amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof, the "Group I Lease"), among RCFC, as Lessor,
Thrifty Rent-A-Car-System, Inc., as Lessee and Servicer, Dollar Rent A Car
Systems, Inc., as Lessee and Servicer, and those subsidiaries and affiliates of
Dollar Thrifty Automotive Group, Inc.("DTAG") from time to time becoming Lessees
thereunder (individually, a "Lessee" and, collectively, the "Lessees"), and
DTAG, as guarantor. Capitalized terms used herein but not defined herein shall
have the meanings provided for in the Group I Lease.
R E C I T A L S:
WHEREAS, the Joining Party is a direct or indirect Subsidiary or other
Affiliate of DTAG; and
WHEREAS, the Joining Party desires to become a "Lessee" under and pursuant
to the Group I Lease.
NOW, THEREFORE, the Joining Party agrees as follows:
A G R E E M E N T:
1. The Joining Party hereby represents and warrants to and in favor of
RCFC and the Trustee that (i) the Joining Party is a direct or indirect
Subsidiary of DTAG, (ii) all of the conditions required to be satisfied pursuant
to Section 28 of the Group I Lease in respect of the Joining Party becoming a
Lessee thereunder have been satisfied, and (iii) all of the representations and
warranties contained in Section 23 of the Group I Lease with respect to the
Lessees are true and correct as applied to the Joining Party as of the date
hereof.
2. The Joining Party hereby agrees to assume all of the obligations of a
"Lessee" under the Group I Lease and agrees to be bound by all of the terms,
covenants and conditions therein.
76
3. By its execution and delivery of this Joinder, the Joining Party hereby
becomes a Lessee for all purposes under the Group I Lease. By its execution and
delivery of this Joinder, RCFC acknowledges that the Joining Party is a Lessee
for all purposes under the Group I Lease.
IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be duly
executed as of the day and year first above written.
[Name of Joining Party]
By: ________________________________
Name:
Title:
Accepted and Acknowledged by:
RENTAL CAR FINANCE CORP.
By: __________________________________________
Name:
Title:
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TABLE OF CONTENTS
Page
----
SECTION 1. CERTAIN DEFINITIONS..............................................1
Section 1.1. Certain Definitions......................................1
Section 1.2. Accounting and Financial Determinations..................2
Section 1.3. Cross References; Headings...............................2
Section 1.4. Interpretation...........................................2
SECTION 2. GENERAL AGREEMENT................................................3
Section 2.1. Leasing of Vehicles......................................3
Section 2.2. Right of Lessees to Act as Lessor's Agent................4
Section 2.3. Payment of Purchase Price by Lessor......................4
Section 2.4. Non-liability of Lessor..................................5
SECTION 3. TERM.............................................................5
Section 3.1. Vehicle Lease Commencement Date..........................5
Section 3.2. Lease Commencement Date..................................6
SECTION 4. CONDITIONS PRECEDENT.............................................6
Section 4.1. No Default...............................................6
Section 4.2. Limitations of the Acquisition of Certain Vehicles.......6
SECTION 5. RENT AND CHARGES.................................................6
Section 5.1. Payment of Rent..........................................6
Section 5.2. Payment of Availability Payment..........................6
Section 5.3. Payment of Monthly Supplemental Payments.................7
Section 5.4. Payment of Termination Payments, Casualty Payments,
and Late Return Payments.................................7
Section 5.5. Late Payment.............................................7
SECTION 6. INSURANCE........................................................7
Section 6.1. Fleet Insurance..........................................7
Section 6.2. Information..............................................7
SECTION 7. CASUALTY OBLIGATION..............................................7
SECTION 8. VEHICLE USE......................................................8
SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES
AND FINES........................................................9
SECTION 10. MAINTENANCE AND REPAIRS..........................................9
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Page
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SECTION 11. VEHICLE WARRANTIES..............................................10
SECTION 12. PROGRAM VEHICLE USAGE REQUIREMENTS AND
DISPOSITION.....................................................10
Section 12.1. Usage..................................................10
Section 12.2. Disposition Procedure..................................10
Section 12.3. Termination Payments...................................11
SECTION 13. LATE RETURN PAYMENTS............................................11
SECTION 14. REDESIGNATION OF VEHICLES.......................................12
SECTION 15. GENERAL INDEMNITY...............................................13
Section 15.1. Indemnity of the Lessor................................13
Section 15.2. Indemnification of the Trustee.........................14
Section 15.3. Reimbursement Obligation by the Lessees................15
Section 15.4. Notice to Lessee of Claims.............................15
Section 15.5. Defense of Claims......................................15
SECTION 16. ASSIGNMENT......................................................15
SECTION 17. DEFAULT AND REMEDIES THEREFOR...................................16
Section 17.1. Events of Default......................................16
Section 17.2. Effect of Lease Event of Default.......................17
Section 17.3. Rights of Lessor Upon Lease Event of Default...........17
Section 17.4. Measure of Damages.....................................18
Section 17.5. Application of Proceeds................................19
SECTION 18. MANUFACTURER EVENTS OF DEFAULT..................................19
SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE..........................20
SECTION 20. SURVIVAL........................................................20
SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL AGENT
AND TRUSTEE.....................................................20
SECTION 22. MODIFICATION AND SEVERABILITY...................................22
SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES..........................22
Section 23.1. Due Organization, Authorization, No Conflicts, Etc.....22
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Section 23.2. Financial Information; Financial Condition.............23
Section 23.3. Litigation.............................................23
Section 23.4. Liens..................................................23
Section 23.5. Necessary Actions......................................24
Section 23.6. Employee Benefit Plans.................................24
Section 23.7. Investment Company Act.................................25
Section 23.8. Regulations G, T, U and X..............................25
Section 23.9. Business Locations; Trade Names; Principal Places
of Business Locations..................................25
Section 23.10. Taxes..................................................25
Section 23.11. Governmental Authorization.............................25
Section 23.12. Compliance with Laws...................................25
Section 23.13. Eligible Vehicles; Eligible Franchisees................26
Section 23.14. Supplemental Documents True and Correct................26
SECTION 24. CERTAIN AFFIRMATIVE COVENANTS...................................26
Section 24.1. Corporate Existence; Foreign Qualification.............26
Section 24.2. Books, Records and Inspections.........................26
Section 24.3. Vehicle Disposition Programs...........................27
Section 24.4. Reporting Requirements.................................27
Section 24.5. Taxes and Liabilities..................................31
Section 24.6. Compliance with Laws...................................32
Section 24.7. Maintenance of Separate Existence......................32
Section 24.8. Master Collateral Agent as Lienholder..................32
Section 24.9. Maintenance of Property................................32
Section 24.10. Access to Certain Documentation and Information
Regarding the Collateral...............................32
Section 24.11. Maintenance of Credit Enhancement......................33
SECTION 25. CERTAIN NEGATIVE COVENANTS......................................34
Section 25.1. Mergers, Consolidations................................34
Section 25.2. Other Agreements.......................................34
Section 25.3. Liens..................................................34
Section 25.4. Use of Vehicles........................................35
Section 25.5. Acquisition and Financing of Vehicles..................35
SECTION 26. SERVICING COMPENSATION..........................................35
SECTION 27. GUARANTY........................................................36
Section 27.1. Guaranty...............................................36
Section 27.2. Scope of Guarantor's Liability.........................37
Section 27.3. Lessor's Right to Amend this Lease.....................37
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Section 27.4. Waiver of Certain Rights by Guarantor..................37
Section 27.5. Lessees' Obligations to Guarantor and Guarantor's
Obligations to Lessees Subordinated....................38
Section 27.6. Guarantor to Pay Lessor's Expenses.....................40
Section 27.7. Reinstatement..........................................40
Section 27.8. Pari Passu Indebtedness................................40
Section 27.9. Third-Party Beneficiaries..............................40
SECTION 28. ADDITIONAL LESSEES..............................................40
Section 28.1. Additional Affiliate and Subsidiary Lessees............40
SECTION 29. BANKRUPTCY PETITION AGAINST LESSOR..............................42
SECTION 30. SUBMISSION TO JURISDICTION......................................42
SECTION 31. GOVERNING LAW...................................................43
SECTION 32. JURY TRIAL......................................................43
SECTION 33. NOTICES.........................................................43
SECTION 34. HEADINGS........................................................44
SECTION 35. EXECUTION IN COUNTERPARTS.......................................44
SECTION 36. EFFECTIVENESS...................................................44
SCHEDULES AND ATTACHMENTS
Annex A Operating Lease
Annex B Financing Lease
Schedule 1 Litigation Claims
Schedule 2 Pension Plans
Schedule 3 Business Locations
Schedule 4 Liens
ATTACHMENT A-1 Information on Existing Fleet
ATTACHMENT A-2 Vehicle Acquisition Schedule
ATTACHMENT B Form of Power of Attorney
ATTACHMENT C Form of Certification of Trade or Business Use
ATTACHMENT D Form of Affiliate Joinder in Lease
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