EXHIBIT 4.46
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Execution Copy
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MASTER EXCHANGE AND TRUST AGREEMENT
among
RENTAL CAR FINANCE CORP.,
DOLLAR RENT A CAR SYSTEMS, INC.,
THRIFTY RENT-A-CAR SYSTEM, INC.,
CHICAGO DEFERRED EXCHANGE CORPORATION,
VEXCO, LLC,
AND
THE CHICAGO TRUST COMPANY
Dated as of July 23, 2001
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.........................................................3
ARTICLE II TRANSFER OF EXCHANGE VEHICLES.......................................8
2.1 Transfer of Exchanged Vehicle................................8
2.2 Assignment of Relinquished Property Agreement................9
2.3 Notification................................................10
2.4 Tax Treatment...............................................11
2.5 Direct Transfer.............................................11
ARTICLE III IDENTIFICATION....................................................11
3.1 Identification of Replacement Vehicles......................11
ARTICLE IV ACQUISITION OF REPLACEMENT VEHICLES................................12
4.1 Transfer of Replacement Vehicles............................12
4.2 Assignment of Replacement Property Agreements...............13
4.3 Notification................................................14
4.4 Tax Treatment...............................................14
4.5 Direct Transfer.............................................15
ARTICLE V EXCHANGE PROCEEDS...................................................15
5.1 Master Collateral Account...................................15
5.2 Establishment of Escrow Accounts............................15
5.3 Proceeds from Transfer of Exchanged Vehicles................16
5.4 Procedures With Respect to Dollar Exchanged Vehicles
and Thrifty Exchanged Vehicles Transferred Subject To
Liabilities.................................................16
5.5 Payment for Replacement Vehicles............................18
5.6 Other Distributions.........................................18
5.7 Shortfall of Funds..........................................19
5.8 Use of Exchange Proceeds....................................19
5.9 Investment of Funds in the Escrow Account...................20
5.10 Limitation on Rights to Exchange Proceeds...................20
5.11 Release of Escrow Funds.....................................21
ARTICLE VI TERM, COMPENSATION, TAXES AND LEGAL COMPLIANCE.....................23
6.1 Term........................................................23
6.2 Compensation................................................23
6.3 Taxes.......................................................23
6.4 Legal Compliance and Consents...............................23
ARTICLE VII REPRESENTATIONS AND WARRANTIES...................................24
7.1 Representations and Warranties of Qualified
Intermediary, CDEC and CTC..................................24
7.2 Representations and Warranties of RCFC, Dollar and
Thrifty.....................................................26
7.3 Exclusivity.................................................27
7.4 Records.....................................................27
7.5 Indemnity...................................................27
ARTICLE VIII MISCELLANEOUS...................................................28
8.1 Modifications...............................................28
8.2 Successors, Assigns and Assignment..........................28
8.3 Entire Agreement and Integration............................28
8.4 Survival....................................................28
8.5 Further Assurance...........................................28
8.6 Relationship of the Parties.................................28
8.7 Governing Law: Jurisdiction................................29
8.8 Notices.....................................................29
8.9 Counterparts................................................29
8.10 Remedies Cumulative; Waiver.................................29
8.11 Third Party Beneficiary.....................................29
MASTER EXCHANGE AND TRUST AGREEMENT
This Master Exchange and Trust Agreement (the "Agreement") is entered into
as of July 23, 2001 by and among Rental Car Finance Corp., a special purpose
Oklahoma corporation ("RCFC"), Dollar Rent A Car Systems, Inc., an Oklahoma
corporation ("Dollar"), Thrifty Rent-A-Car System, Inc., an Oklahoma corporation
("Thrifty"), Chicago Deferred Exchange Corporation, an Illinois corporation,
solely in its capacity as a member of VEXCO, LLC ("CDEC"), VEXCO, LLC, a
Delaware limited liability company wholly owned by CDEC (the "Qualified
Intermediary") and The Chicago Trust Company, an Illinois trust company ("CTC").
RECITALS
WHEREAS, each of RCFC, Dollar and Thrifty as part of its business
operations, desires to exchange pursuant to one or more exchanges certain
vehicles that are held for productive use in its trade or business (the "RCFC
Exchanged Vehicles," the "Dollar Exchanged Vehicles" and the "Thrifty Exchanged
Vehicles," respectively) for other vehicles that are like-kind within the
meaning of Section 1031 of the Internal Revenue Code of 1986, as amended (the
"Code") to the RCFC Exchanged Vehicles, the Dollar Exchanged Vehicles and the
Thrifty Exchanged Vehicles, respectively, to be held by each for productive use
in connection with its trade or business (the "RCFC Replacement Vehicles," the
"Dollar Replacement Vehicles," and the "Thrifty Replacement Vehicles");
WHEREAS, the RCFC Exchanged Vehicles, as they are sold from time to time
will be sold to various buyers (each a "RCFC Buyer"), the Dollar Exchanged
Vehicles, as they are sold from time to time will be sold to various buyers
(each a "Dollar Buyer") and the Thrifty Exchanged Vehicles, as they are sold
from time to time will be sold to various buyers (each a "Thrifty Buyer");
WHEREAS, the RCFC Replacement Vehicles as they are purchased from time to
time will be purchased from various sellers (each a "RCFC Seller"), the Dollar
Replacement Vehicles as they are purchased from time to time will be purchased
from various sellers (each a "Dollar Seller") and the Thrifty Replacement
Vehicles, as they are purchased from time to time will be purchased from various
sellers (each a "Thrifty Seller");
WHEREAS, the parties desire (i) RCFC to effectuate each deferred exchange
of RCFC Exchanged Vehicles for RCFC Replacement Vehicles, (ii) Dollar to
effectuate each deferred exchange of Dollar Exchanged Vehicles for Dollar
Replacement Vehicles and (iii) Thrifty to effectuate each deferred exchange of
Thrifty Exchanged Vehicles for Thrifty Replacement Vehicles in a manner that
will qualify as a like-kind exchange within the meaning of Section 1031 of the
Code and the Treasury Regulations promulgated thereunder (and any applicable
corresponding provision of state or local law) pursuant to one or more of the
"safe harbors" described in Treasury Regulation ss. 1.1031(k)-1(g), for the
Qualified Intermediary to constitute a "qualified intermediary" as such term is
defined in Treasury Regulation ss. 1.1031(k)-1(g)(4), for the Escrow Account (as
defined herein) to constitute a "qualified trust" account as defined in Treasury
Regulation ss. 1.1031(k)-1(g)(3)(iii) and for CTC to constitute a "trustee" as
defined in Treasury Regulation ss. 1.1031(k)-1(g)(3)(iii);
WHEREAS, it is the intention of the parties that, subject to the terms and
provisions of this Agreement, RCFC assign to the Qualified Intermediary all of
RCFC's rights, but not its obligations, under (i) each RCFC Relinquished
Property Agreement (as defined herein) with respect to each RCFC Exchanged
Vehicle and (ii) each RCFC Replacement Property Agreement (as defined herein)
with respect to each RCFC Replacement Vehicle;
WHEREAS, it is the intention of the parties that, as provided in Treasury
Regulation ss. 1.1031(k)-1(g)(4)(iii),(iv) and (v), the Qualified Intermediary
be considered to have (i) acquired each RCFC Exchanged Vehicle from RCFC and
transferred it to the RCFC Buyer of such vehicle and (ii) acquired each RCFC
Replacement Vehicle from the RCFC Seller of such vehicle and transferred it to
RCFC;
WHEREAS, it is the intention of the parties that, subject to the terms and
provisions of this Agreement, Dollar assign to the Qualified Intermediary all of
Dollar's rights, but not its obligations, under (i) each Dollar Relinquished
Property Agreement (as defined herein) with respect to each Dollar Exchanged
Vehicle and (ii) each Dollar Replacement Property Agreement (as defined herein)
with respect to each Dollar Replacement Vehicle;
WHEREAS, it is the intention of the parties that, as provided in Treasury
Regulation ss. 1.1031(k)-1(g)(4)(iii),(iv) and (v), the Qualified Intermediary
be considered to have (i) acquired each Dollar Exchanged Vehicle from Dollar and
transferred it to the Dollar Buyer of such vehicle and (ii) acquired each Dollar
Replacement Vehicle from the Dollar Seller of such vehicle and transferred it to
Dollar;
WHEREAS, it is the intention of the parties that, subject to the terms and
provisions of this Agreement, Thrifty assign to the Qualified Intermediary all
of Thrifty's rights, but not its obligations, under (i) each Thrifty
Relinquished Property Agreement (as defined herein) with respect to each Thrifty
Exchanged Vehicle and (ii) each Thrifty Replacement Property Agreement (as
defined herein) with respect to each Thrifty Replacement Vehicle;
WHEREAS, it is the intention of the parties that, as provided in Treasury
Regulation ss. 1.1031(k)-1(g)(4)(iii),(iv) and (v), the Qualified Intermediary
be considered to have (i) acquired each Thrifty Exchanged Vehicle from Thrifty
and transferred it to the Thrifty Buyer of such vehicle and (ii) acquired each
Thrifty Replacement Vehicle from the Thrifty Seller of such vehicle and
transferred it to Thrifty;
WHEREAS, it is the intention of the parties that, as provided in Treasury
Regulation ss. 1.1031(b)-1(c), consideration given by Dollar or Thrifty in the
form of an assumption of liabilities (or a receipt of property subject to a
liability) shall be offset against consideration received by Dollar or Thrifty,
respectively, in the form of an assumption of liabilities (or a transfer subject
to a liability);
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WHEREAS, it is the intention of the parties that each of RCFC, Dollar and
Thrifty direct the Qualified Intermediary to appoint CTC to establish with
respect to each of them segregated trust accounts pursuant to the terms of this
Agreement and the Bank Account Agreements (as defined herein) to keep the
property of each such party separate and identifiable and to facilitate the
exchange of (i) RCFC Exchanged Vehicles for RCFC Replacement Vehicles, (ii)
Dollar Exchanged Vehicles for Dollar Replacement Vehicles and (iii) Thrifty
Exchanged Vehicles for Thrifty Replacement Vehicles;
WHEREAS, it is the intention of the parties that RCFC, Dollar and Thrifty
direct the Qualified Intermediary to appoint CTC, to receive, sort, hold and
disburse the Exchange Proceeds (as defined herein) and such other funds
according to the interests of RCFC, Dollar and Thrifty in such Exchange Proceeds
and such other funds and as may be necessary or helpful in the efficient
execution of the exchange of Exchanged Vehicles; and
WHEREAS, the parties desire and intend that this Agreement satisfies the
requirement of a written agreement referred to in Treasury Regulation ss.
1.1031(k)-1(g)(4)(iii)(B) with respect to each Exchanged Vehicle (as defined
herein) and Replacement Vehicle (as defined herein).
NOW THEREFORE, for and in consideration of the premises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms used in this Agreement shall have the following
meanings, unless otherwise expressly provided herein:
"Addendum to the Amended and Restated Master Collateral Agency Agreement"
shall mean that certain Addendum, dated as of March 6, 2001, to the Amended and
Restated Master Collateral Agency Agreement.
"Amended and Restated Master Collateral Agency Agreement" shall mean that
certain Amended and Restated Master Collateral Agency Agreement, dated as of
December 23, 1997, among Dollar Thrifty Automotive Group, Inc., RCFC, Thrifty,
Dollar, various financing sources parties thereto, various beneficiaries parties
thereto and Bankers Trust Company.
"Bank Account Agreements" shall mean the agreements executed between CTC
and one or more depository banks that establish the Escrow Account.
"Business Day" shall mean the part of the day in which the Qualified
Intermediary's and CTC's offices are open for the conduct of substantially all
of their banking functions.
"CDEC" shall have the meaning set forth in the preamble to this Agreement.
"Code" shall have the meaning set forth in the preamble to this Agreement.
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"CTC" shall have the meaning set forth in the preamble to this Agreement.
"Daily Transaction Reports" shall mean the reports provided to the
Qualified Intermediary on each Business Day in accordance with Sections 5.3,
5.4(a), 5.5(a) and 5.6(a) of this Agreement.
"Dollar" shall have the meaning set forth in the preamble to this
Agreement.
"Dollar Additional Subsidies" shall mean the additional amount, if any,
which Dollar deposits in the Dollar Escrow Accounts for the acquisition of
Dollar Replacement Vehicles.
"Dollar Buyer" shall have the meaning set forth in the preamble to this
Agreement.
"Dollar Disbursement Accounts" shall have the meaning set forth in Section
5.2 of this Agreement.
"Dollar Escrow Accounts" shall mean the Dollar Exchange Accounts, the
Dollar Disbursement Accounts and any other Escrow Account established for the
benefit of Dollar.
"Dollar Exchange Accounts" shall have the meaning set forth in Section 5.2
of this Agreement.
"Dollar Exchange Period" shall mean, with respect to each Dollar Exchanged
Vehicle transferred, the period beginning on the date Dollar transfers such
property and ending at midnight on the earlier of (i) 180 days thereafter,
irrespective of whether such day is a weekend day or a holiday or (ii) the due
date (including extensions) for Dollar's U.S. federal income tax return for the
year in which such Dollar Exchanged Vehicle is transferred.
"Dollar Exchange Proceeds" shall mean the proceeds from the sale of Dollar
Exchanged Vehicles.
"Dollar Exchanged Vehicles" shall have the meaning set forth in the
preamble to this Agreement, provided such property shall qualify as
"relinquished property" within the meaning of Treasury Regulation ss.
1.1031(k)-1(a).
"Dollar Identification Period" shall mean with respect to each Dollar
Exchanged Vehicle transferred, the period beginning on the date Dollar transfers
such property and ending at midnight on the 45th day thereafter, irrespective of
whether such day is a weekend day or a holiday.
"Dollar Relinquished Property Agreement" shall mean each agreement relating
to the sale or other disposition of a Dollar Exchanged Vehicle, including but
not limited to all such agreements with Manufacturers.
"Dollar Replacement Property Agreement" shall mean each agreement relating
to the acquisition of a Dollar Replacement Vehicle.
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"Dollar Replacement Vehicles" shall have the meaning set forth in the
preamble to this Agreement, provided such property shall qualify as "replacement
property" within the meaning of Treasury Regulation ss. 1.1031(k)-1(a).
"Dollar Seller" shall have the meaning set forth in the preamble to this
Agreement.
"Exchanged Vehicles" shall mean the Dollar Exchanged Vehicles, the RCFC
Exchanged Vehicles and the Thrifty Exchanged Vehicles.
"Exchanged Vehicles Subject to Liabilities" shall mean a Dollar Exchanged
Vehicle or a Thrifty Exchanged Vehicle that is subject to a requirement or
obligation that debt secured by such Exchanged Vehicle must be repaid as a
result of it being transferred or a requirement that the sale proceeds from the
disposition of such Exchanged Vehicle be applied to satisfy the financing of
such Exchanged Vehicle.
"Exchange Proceeds" shall mean the sum of (i) the money or other property
from the sale of any Exchanged Vehicle that is held in the Escrow Account, (ii)
any interest or other amounts earned on the money or other property from the
sale of any Exchanged Vehicle that is held in the Escrow Account, (iii) any
receivable from the sale of an Exchanged Vehicle, (iv) the money or other
property from the sale of any Exchanged Vehicle that is held in the Master
Collateral Account for the benefit of the Qualified Intermediary and (v) any
interest or other amounts earned on the money or other property from the sale of
any Exchanged Vehicle held in the Master Collateral Account for the benefit of
the Qualified Intermediary.
"Escrow Account" shall mean one or more segregated trust accounts that are
established under the Bank Account Agreements and shall initially include the
RCFC Exchange Accounts, the Dollar Exchange Accounts, the Thrifty Exchange
Accounts, the RCFC Disbursement Accounts, the Dollar Disbursement Accounts, the
Thrifty Disbursement Accounts and such other accounts and sub-accounts
established pursuant to the terms of this Agreement and the Bank Account
Agreements.
"Escrow Funds" shall mean the funds held in the Escrow Account.
"Financing Source and Beneficiary Agreement" shall mean the Financing
Source and Beneficiary Supplement, dated as of July 23, 2001, to the Amended and
Restated Master Collateral Agency Agreement.
"Identification Reports" shall mean the notices provided to the Qualified
Intermediary in accordance with Sections 3.1(a), (b) and (c) of this Agreement.
"Manufacturers" shall mean any motor vehicle manufacturer, importer,
distributor or other supplier of vehicles.
"Master Collateral Account" shall have the meaning set forth in the Amended
and Restated Master Collateral Agency Agreement.
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"Qualified Intermediary" shall have the meaning set forth in the preamble
to this Agreement provided that the term "qualified intermediary" when placed in
quotes shall have the meaning set forth in Treasury Regulation ss.
1.1031(k)-1(g)(4).
"RCFC" shall have the meaning set forth in the preamble to this Agreement.
"RCFC Additional Subsidies" shall mean the additional amount, if any, that
RCFC deposits in the RCFC Escrow Accounts for the acquisition of RCFC
Replacement Vehicles.
"RCFC Buyer" shall have the meaning set forth in the preamble to this
Agreement.
"RCFC Disbursement Accounts" shall have the meaning set forth in Section
5.2 of this Agreement.
"RCFC Exchange Accounts" shall have the meaning set forth in Section 5.2 of
this Agreement.
"RCFC Escrow Accounts" shall mean the RCFC Exchange Accounts, the RCFC
Disbursement Accounts and any other Escrow Account established for the benefit
of RCFC.
"RCFC Exchange Period" shall mean, with respect to each RCFC Exchanged
Vehicle transferred, the period beginning on the date RCFC transfers such
property and ending at midnight on the earlier of (i) 180 days thereafter,
irrespective of whether such day is a weekend day or a holiday or (ii) the due
date (including extensions) for RCFC's U.S. federal income tax return for the
year in which such RCFC Exchanged Vehicle is transferred.
"RCFC Exchange Proceeds" shall mean the proceeds from the disposition of
RCFC Exchanged Vehicles.
"RCFC Exchanged Vehicles" shall have the meaning set forth in the preamble
to this Agreement, provided such property shall qualify as "relinquished
property" within the meaning of Treasury Regulation ss. 1.1031(k)-1(a).
"RCFC Identification Period" shall mean with respect to each RCFC Exchanged
Vehicle transferred, the period beginning on the date RCFC transfers such
property and ending at midnight on the 45th day thereafter, irrespective of
whether such day is a weekend day or a holiday.
"RCFC Relinquished Property Agreement" shall mean each agreement relating
to the sale or other disposition of a RCFC Exchanged Vehicle, including but not
limited to all such agreements with Manufacturers.
"RCFC Replacement Property Agreement" shall mean each agreement relating to
the acquisition of a RCFC Replacement Vehicle.
"RCFC Replacement Vehicles" shall have the meaning set forth in the
preamble to this Agreement, provided such property shall qualify as "replacement
property" within the meaning of Treasury Regulation ss. 1.1031(k)-1(a).
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"RCFC Seller" shall have the meaning set forth in the preamble to this
Agreement.
"Replacement Vehicles" shall mean RCFC Replacement Vehicles, Dollar
Replacement Vehicles and Thrifty Replacement Vehicles.
"Shortfall Account" shall have the meaning set forth in Section 5.7 of this
Agreement.
"Shortfall Recipient Account" shall have the meaning set forth in Section
5.7 of this Agreement.
"Thrifty" shall have the meaning set forth in the preamble to this
Agreement.
"Thrifty Additional Subsidies" shall mean the additional amount, if any,
which Thrifty deposits in the Thrifty Escrow Accounts for the acquisition of
Thrifty Replacement Vehicles.
"Thrifty Buyer" shall have the meaning set forth in the preamble to this
Agreement.
"Thrifty Disbursement Accounts" shall have the meaning set forth in Section
5.2 of this Agreement.
"Thrifty Escrow Accounts" shall mean the Thrifty Exchange Accounts, the
Thrifty Disbursement Accounts and any other Escrow Account established for the
benefit of Thrifty.
"Thrifty Exchange Accounts" shall have the meaning set forth in Section 5.2
of this Agreement.
"Thrifty Exchange Period" shall mean, with respect to each Thrifty
Exchanged Vehicle transferred, the period beginning on the date Thrifty
transfers such property and ending at midnight on the earlier of (i) 180 days
thereafter, irrespective of whether such day is a weekend day or a holiday or
(ii) the due date (including extensions) for Thrifty's U.S. federal income tax
return for the year in which such Thrifty Exchanged Vehicle is transferred.
"Thrifty Exchange Proceeds" shall mean the proceeds from the disposition of
Thrifty Exchanged Vehicles.
"Thrifty Exchanged Vehicles" shall have the meaning set forth in the
preamble to this Agreement, provided such property shall qualify as
"relinquished property" within the meaning of Treasury Regulation ss.
1.1031(k)-1(a).
"Thrifty Identification Period" shall mean with respect to each Thrifty
Exchanged Vehicle transferred, the period beginning on the date Thrifty
transfers such property and ending at midnight on the 45th day thereafter,
irrespective of whether such day is a weekend day or a holiday.
"Thrifty Relinquished Property Agreement" shall mean each agreement
relating to the sale or other disposition of a Thrifty Exchanged Vehicle,
including but not limited to all such agreements with Manufacturers.
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"Thrifty Replacement Property Agreement" shall mean each agreement relating
to the acquisition of a Thrifty Replacement Vehicle.
"Thrifty Replacement Vehicles" shall have the meaning set forth in the
preamble to this Agreement, provided such property shall qualify as "replacement
property" within the meaning of Treasury Regulation ss. 1.1031(k)-1(a).
"Thrifty Seller" shall have the meaning set forth in the preamble to this
Agreement.
ARTICLE II
TRANSFER OF EXCHANGED VEHICLES
2.1 Transfer of Exchanged Vehicle.
(a) RCFC Exchanged Vehicles. At or before the closing of the transfer
to a RCFC Buyer of a RCFC Exchanged Vehicle, RCFC will (i) enter into a RCFC
Relinquished Property Agreement with respect to each RCFC Exchanged Vehicle,
(ii) assign all of its rights, but not its obligations, under such RCFC
Relinquished Property Agreement with respect to such RCFC Exchanged Vehicle to
Qualified Intermediary in accordance with Section 2.2(a) of this Agreement,
(iii) notify all parties to each such RCFC Relinquished Property Agreement of
such assignment prior to or concurrent with the date of the transfer of title to
the RCFC Exchanged Vehicle to the RCFC Buyer thereof and (iv) transfer title to
the RCFC Exchanged Vehicle to the RCFC Buyer thereof pursuant to such RCFC
Relinquished Property Agreement.
(b) Dollar Exchanged Vehicles. At or before the closing of the
transfer to a Dollar Buyer of a Dollar Exchanged Vehicle, Dollar will (i) enter
into a Dollar Relinquished Property Agreement with respect to each Dollar
Exchanged Vehicle, (ii) assign all of its rights, but not its obligations, under
such Dollar Relinquished Property Agreement with respect to such Dollar
Exchanged Vehicle to Qualified Intermediary in accordance with Section 2.2(b) of
this Agreement, (iii) notify all parties to each such Dollar Relinquished
Property Agreement of such assignment prior to or concurrent with the date of
the transfer of title to the Dollar Exchanged Vehicle to the Dollar Buyer
thereof and (iv) transfer title to the Dollar Exchanged Vehicle to the Dollar
Buyer thereof pursuant to such Dollar Relinquished Property Agreement.
(c) Thrifty Exchanged Vehicles. At or before the closing of the
transfer to a Thrifty Buyer of a Thrifty Exchanged Vehicle, Thrifty will (i)
enter into a Thrifty Relinquished Property Agreement with respect to each
Thrifty Exchanged Vehicle, (ii) assign all of its rights, but not its
obligations, under such Thrifty Relinquished Property Agreement with respect to
such Thrifty Exchanged Vehicle to Qualified Intermediary in accordance with
Section 2.2(c) of this Agreement, (iii) notify all parties to each such Thrifty
Relinquished Property Agreement of such assignment prior to or concurrent with
the date of the transfer of title to the Thrifty Exchanged Vehicle to the
Thrifty Buyer thereof and (iv) transfer title to the Thrifty Exchanged Vehicle
to the Thrifty Buyer thereof pursuant to such Thrifty Relinquished Property
Agreement.
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(d) Transfer of Exchanged Vehicles Subject To Liabilities.
Notwithstanding Sections 2.2(b) and 2.2(c) of this Agreement, the parties to
this Agreement acknowledge and agree that each of Dollar and Thrifty shall be
permitted to transfer to the Qualified Intermediary Exchanged Vehicles Subject
to Liabilities. If Dollar or Thrifty transfers to the Qualified Intermediary an
Exchanged Vehicle Subject to Liabilities, then the Qualified Intermediary shall
follow the procedures set forth in Section 5.4 of this Agreement with respect to
the repayment of such liability, provided that Dollar and Thrifty shall provide
Dollar Additional Subsidies or Thrifty Additional Subsidies, as the case may be,
if the amount required to be paid in connection with the disposition of an
Exchanged Vehicle Subject to Liabilities is greater than the proceeds received
from the sale of such Exchanged Vehicle Subject to Liabilities.
2.2 Assignment of Relinquished Property Agreement.
(a) RCFC Assignment. RCFC hereby assigns to Qualified Intermediary,
solely in the Qualified Intermediary's capacity as a "qualified intermediary,"
RCFC's rights, but not its obligations, under each RCFC Relinquished Property
Agreement with respect to each vehicle that is owned by RCFC or that RCFC
acquires after the date hereof and the Qualified Intermediary hereby accepts
such assignment. Said assignment shall be given effect upon execution by RCFC of
a RCFC Relinquished Property Agreement, such assignment being hereby accepted by
the Qualified Intermediary, without any further action on the part of RCFC or
the Qualified Intermediary.
(b) Dollar Assignment. Dollar hereby assigns to Qualified
Intermediary, solely in the Qualified Intermediary's capacity as a "qualified
intermediary", Dollar's rights, but not its obligations, under each Dollar
Relinquished Property Agreement with respect to each vehicle that is owned by
Dollar or that Dollar acquires after the date hereof and the Qualified
Intermediary hereby accepts such assignment. Said assignment shall be given
effect upon execution by Dollar of a Dollar Relinquished Property Agreement,
such assignment being hereby accepted by the Qualified Intermediary, without any
further action on the part of Dollar or the Qualified Intermediary.
(c) Thrifty Assignment. Thrifty hereby assigns to Qualified
Intermediary, solely in the Qualified Intermediary's capacity as a "qualified
intermediary", Thrifty's rights, but not its obligations, under each Thrifty
Relinquished Property Agreement with respect to each vehicle that is owned by
Thrifty or that Thrifty acquires after the date hereof and the Qualified
Intermediary hereby accepts such assignment. Said assignment shall be given
effect upon execution by Thrifty of a Thrifty Relinquished Property Agreement,
such assignment being hereby accepted by the Qualified Intermediary, without any
further action on the part of Thrifty or the Qualified Intermediary.
(d) Revocation. By notice to the Qualified Intermediary, (i) RCFC
may revoke its assignment to the Qualified Intermediary of its rights with
respect to any RCFC Relinquished Property Agreement identified in such notice
and the Qualified Intermediary hereby agrees to such revocation, (ii) Dollar may
revoke its assignment to the Qualified Intermediary of its rights with respect
to any Dollar Relinquished Property Agreement identified in such notice and the
Qualified Intermediary hereby agrees to such revocation and (iii) Thrifty may
revoke its assignment to the Qualified Intermediary of its rights with respect
to any Thrifty Relinquished Property Agreement identified in such notice and the
Qualified Intermediary agrees to such revocation. Any notice of revocation
received by the Qualified Intermediary pursuant to this Section 2.2(d) or any
other Section of this Agreement shall be effective upon the Qualified
Intermediary's receipt of such notice. In addition, each of RCFC, Dollar and
Thrifty shall be deemed to revoke its assignment to the Qualified Intermediary
of its rights with respect to vehicles under any RCFC Relinquished Property
Agreement, Dollar Relinquished Property Agreement and Thrifty Relinquished
Property Agreement, respectively, of the vehicles or agreements that are
described on Exhibit 2.2(d) of this Agreement and the Qualified Intermediary
hereby agrees to such revocation. The parties to this Agreement acknowledge and
agree that each of RCFC, Dollar and Thrifty may only revoke its rights with
respect to a RCFC Relinquished Property Agreement, Dollar Relinquished Property
Agreement and Thrifty Relinquished Property Agreement, respectively, with
respect to vehicles to be transferred after the effective date of such
revocation and that the revocation shall specify if such revocation is for a
limited amount of time (and if so, the time period of such revocation) or if
such revocation is for a certain group of vehicles (and if so, a description of
such group).
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(e) Limitations. Qualified Intermediary will be acting in relation to
each Exchanged Vehicle as an assignee of rights only. Any RCFC Buyer, Dollar
Buyer or Thrifty Buyer shall look solely to RCFC, Dollar or Thrifty,
respectively, in respect of any breach, claim, demand or complaint made with
respect to a RCFC Exchanged Vehicle, Dollar Exchanged Vehicle or Thrifty
Exchanged Vehicle or the subject matters thereof. Qualified Intermediary shall
not take title to or possession of all or any part of an Exchanged Vehicle, and
all responsibility for the custody and transfer of the same, including all
rights and obligations in relation to any lease payments, insurance, assessments
and general risk of loss shall be borne by RCFC, Dollar or Thrifty, as the case
may be, or by the purchaser of such Exchanged Vehicle, but in no event by the
Qualified Intermediary.
2.3 Notification.
(a) RCFC Notification. RCFC represents and agrees that it will provide
notice, on or before the date of the sale of a RCFC Exchanged Vehicle, to the
RCFC Buyer of such RCFC Exchanged Vehicle and to all other parties to the
applicable RCFC Relinquished Property Agreement, that RCFC's rights, but not its
obligations, under the relevant RCFC Relinquished Property Agreement with
respect to the applicable RCFC Exchanged Vehicle have been assigned to the
Qualified Intermediary, as its "qualified intermediary."
(b) Dollar Notification. Dollar represents and agrees that it will
provide notice, on or before the date of the sale of a Dollar Exchanged Vehicle,
to the Dollar Buyer of such Dollar Exchanged Vehicle and to all other parties to
the applicable Dollar Relinquished Property Agreement, that Dollar's rights, but
not its obligations, under the relevant Dollar Relinquished Property Agreement
with respect to the applicable Dollar Exchanged Vehicle have been assigned to
the Qualified Intermediary, as its "qualified intermediary."
(c) Thrifty Notification. Thrifty represents and agrees that it will
provide notice, on or before the date of the sale of a Thrifty Exchanged
Vehicle, to the Thrifty Buyer of such Thrifty Exchanged Vehicle and to all other
parties to the applicable Thrifty Relinquished Property Agreement, that
Thrifty's rights, but not its obligations, under the relevant Thrifty
Relinquished Property Agreement with respect to the applicable Thrifty Exchanged
Vehicle have been assigned to the Qualified Intermediary, as its "qualified
intermediary."
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2.4 Tax Treatment. Solely for income tax purposes and for purposes of this
Agreement, Qualified Intermediary, pursuant to Treasury Regulation xx.xx.
1.1031(k)-1(g)(4)(iii),(iv) and (v), shall be treated as having acquired (a)
each RCFC Exchanged Vehicle from RCFC and having transferred each RCFC Exchanged
Vehicle to the RCFC Buyer thereof (b) each Dollar Exchanged Vehicle from Dollar
and having transferred each Dollar Exchanged Vehicle to the Dollar Buyer thereof
and (c) each Thrifty Exchanged Vehicle from Thrifty and having transferred each
Thrifty Exchanged Vehicle to the Thrifty Buyer thereof.
2.5 Direct Transfer. The parties to this Agreement agree that, each and
every (a) RCFC Exchanged Vehicle shall be transferred directly from RCFC to the
RCFC Buyer thereof, (b) Dollar Exchanged Vehicle shall be transferred directly
from Dollar to the Dollar Buyer thereof, (c) Thrifty Exchanged Vehicle shall be
transferred directly from Thrifty to the Thrifty Buyer thereof. The parties to
this Agreement agree that the Qualified Intermediary shall not take actual or
constructive possession of, hold legal title to, or be the registered owner of
any Exchanged Vehicle.
ARTICLE III
IDENTIFICATION
3.1 Identification of Replacement Vehicles.
(a) RCFC Identification. RCFC may, at any time during the RCFC
Identification Period with respect to each exchange of RCFC Exchanged Vehicles,
identify potential RCFC Replacement Vehicles to be acquired with the RCFC
Exchange Proceeds by providing the Qualified Intermediary in any manner
prescribed by Treasury Regulation ss. 1.1031(k)-1(c)(2) a notification in the
form of Exhibit 3.1 attached hereto or any other notification that complies with
the requirements of Treasury Regulation ss. 1.1031(k)-1(c)(3) and (4). Any such
identification may be revoked by providing written notice from RCFC to Qualified
Intermediary prior to the end of the Identification Period.
(b) Dollar Identification. Dollar may, at any time during the Dollar
Identification Period with respect to each exchange of Dollar Exchanged
Vehicles, identify potential Dollar Replacement Vehicles to be acquired with the
Dollar Exchange Proceeds by providing the Qualified Intermediary in any manner
prescribed by Treasury Regulation ss. 1.1031(k)-1(c)(2) a notification in the
form of Exhibit 3.1 attached hereto or any other notification that complies with
the requirements of Treasury Regulation ss. 1.1031(k)-1(c)(3) and (4). Any such
identification may be revoked by providing written notice from Dollar to
Qualified Intermediary prior to the end of the Identification Period.
(c) Thrifty Identification. Thrifty may, at any time during the
Thrifty Identification Period with respect to each exchange of Thrifty Exchanged
Vehicles, identify potential Thrifty Replacement Vehicles to be acquired with
the Thrifty Exchange Proceeds by providing the Qualified Intermediary in any
manner prescribed by Treasury Regulation ss. 1.1031(k)-1(c)(2) a notification in
the form of Exhibit 3.1 attached hereto or any other notification that complies
with the requirements of Treasury Regulation ss. 1.1031(k)-1(c)(3) and (4). Any
such identification may be revoked by providing written notice from Thrifty to
Qualified Intermediary prior to the end of the Identification Period.
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ARTICLE IV
ACQUISITION OF REPLACEMENT VEHICLES
4.1 Transfer of Replacement Vehicles.
(a) RCFC Replacement Vehicles. At or before the closing of the
acquisition from a RCFC Seller of a RCFC Replacement Vehicle, RCFC will (i)
enter into a RCFC Replacement Property Agreement with respect to each RCFC
Replacement Vehicle, (ii) assign all of its rights, but not its obligations,
under such RCFC Replacement Property Agreement with respect to such RCFC
Replacement Vehicle to Qualified Intermediary in accordance with Section 4.2(a)
of this Agreement, (iii) notify all parties to each such RCFC Replacement
Property Agreement of such assignment prior to or concurrent with the date of
the transfer of title from the applicable RCFC Seller to RCFC of such RCFC
Replacement Vehicle and (iv) acquire title to the RCFC Replacement Vehicle from
the RCFC Seller thereof pursuant to such RCFC Replacement Property Agreement.
(b) Dollar Replacement Vehicles. At or before the closing of the
acquisition from a Dollar Seller of a Dollar Replacement Vehicle, Dollar will
(i) enter into a Dollar Replacement Property Agreement with respect to each
Dollar Replacement Vehicle, (ii) assign all of its rights, but not its
obligations, under such Dollar Replacement Property Agreement with respect to
such Dollar Replacement Vehicle to Qualified Intermediary in accordance with
Section 4.2(b) of this Agreement, (iii) notify all parties to such Dollar
Replacement Property Agreement of such assignment prior to or concurrent with
the date of the transfer of title from such Dollar Seller to Dollar of such
Dollar Replacement Vehicle and (iv) acquire title to the Dollar Replacement
Vehicle from the Dollar Seller thereof pursuant to such Dollar Replacement
Property Agreement.
(c) Thrifty Replacement Vehicles. At or before the closing of the
acquisition from a Thrifty Seller of a Thrifty Replacement Vehicle, Thrifty will
(i) enter into a Thrifty Replacement Property Agreement with respect to each
Thrifty Replacement Vehicle, (ii) assign all of its rights, but not its
obligations, under such Thrifty Replacement Property Agreement with respect to
each Thrifty Replacement Vehicle to Qualified Intermediary in accordance with
Section 4.2(c) of this Agreement, (iii) notify all parties to such Thrifty
Replacement Property Agreement of such assignment prior to or concurrent with
the date of the transfer of title from such Thrifty Seller to Thrifty of such
Thrifty Replacement Vehicle and (iv) acquire title to the Thrifty Replacement
Vehicle from the Thrifty Seller thereof pursuant to the applicable Thrifty
Replacement Property Agreement.
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(d) Acquisition of Replacement Vehicles Subject To Liabilities.
The parties to this Agreement acknowledge and agree that Dollar and Thrifty
shall be permitted to acquire Replacement Vehicles subject to liabilities. If
Dollar or Thrifty acquires a Replacement Vehicle subject to a liability, then
the Qualified Intermediary shall follow the procedures set forth in Section 5.5
of this Agreement with respect to the acquisition of such Replacement Vehicle.
4.2 Assignment of Replacement Property Agreements.
(a) RCFC Assignment. RCFC hereby assigns to Qualified Intermediary,
solely in the Qualified Intermediary's capacity as "qualified intermediary",
RCFC's rights, but not its obligations, under each RCFC Replacement Property
Agreement with respect to each vehicle to be acquired by RCFC under such
agreement and the Qualified Intermediary accepts such assignment. Said
assignment shall be given effect upon execution by RCFC of a RCFC Replacement
Property Agreement, such assignment being hereby accepted by the Qualified
Intermediary, without any further action on the part of RCFC or the Qualified
Intermediary.
(b) Dollar Assignment. Dollar hereby assigns to Qualified
Intermediary, solely in the Qualified Intermediary's capacity as "qualified
intermediary", Dollar's rights, but not its obligations, under each Dollar
Replacement Property Agreement with respect to each vehicle to be acquired by
Dollar under such agreement and the Qualified Intermediary accepts such
assignment. Said assignment shall be given effect upon execution by Dollar of a
Dollar Replacement Property Agreement, such assignment being hereby accepted by
the Qualified Intermediary, without any further action on the part of Dollar or
the Qualified Intermediary.
(c) Thrifty Assignment. Thrifty hereby assigns to Qualified
Intermediary, solely in the Qualified Intermediary's capacity as "qualified
intermediary", Thrifty's rights, but not its obligations, under each Thrifty
Replacement Property Agreement with respect to each vehicle to be acquired by
Thrifty under such agreement and the Qualified Intermediary accepts such
assignment. Said assignment shall be given effect upon execution by Thrifty of a
Thrifty Replacement Property Agreement, such assignment being hereby accepted by
the Qualified Intermediary, without any further action on the part of Thrifty or
the Qualified Intermediary.
(d) Revocation. By notice to the Qualified Intermediary, (i) RCFC may
revoke its assignment to the Qualified Intermediary of its rights with respect
to any RCFC Replacement Property Agreement identified in such notice and the
Qualified Intermediary agrees to such revocation, (ii) Dollar may revoke its
assignment to the Qualified Intermediary of its rights with respect to any
Dollar Replacement Property Agreement identified in such notice and the
Qualified Intermediary agrees to such revocation and (iii) Thrifty may revoke
its assignment to the Qualified Intermediary of its rights with respect to any
Thrifty Replacement Property Agreement identified in such notice and the
Qualified Intermediary agrees to such revocation. Any notice of revocation
received by the Qualified Intermediary pursuant to this Section 4.2(d) or any
other Section of this Agreement shall be effective upon the Qualified
Intermediary's receipt of such notice. In addition, each of RCFC, Dollar and
Thrifty shall be deemed to revoke its assignment to the Qualified Intermediary
of its rights with respect to vehicles under any RCFC Replacement Property
Agreement, Dollar Replacement Property Agreement and Thrifty Replacement
Property Agreement, respectively, of the vehicles or agreements that are
described on Exhibit 4.2(d) of this Agreement and the Qualified Intermediary
hereby agrees to such revocation. The parties to this Agreement acknowledge and
agree that each of RCFC, Dollar and Thrifty may only revoke its rights with
respect to a RCFC Replacement Property Agreement, Dollar Replacement Property
Agreement and Thrifty Replacement Property Agreement, respectively, with respect
to vehicles to be acquired after the effective date of such revocation and that
the revocation shall specify if such revocation is for a limited amount of time
(and if so, the time period of such revocation) or if such revocation is for a
certain group of vehicles (and if so, a description of such group).
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(e) Limitations. Qualified Intermediary will be acting in relation to
each Replacement Vehicle as an assignee of rights only. Any RCFC Seller, Dollar
Seller or Thrifty Seller shall look solely to RCFC, Dollar or Thrifty,
respectively, in respect of any breach, claim, demand or complaint made with
respect to a RCFC Replacement Vehicle, Dollar Replacement Vehicle or Thrifty
Replacement Vehicle or the subject matters thereof. Qualified Intermediary shall
not take title to or possession of all or any part of any Replacement Vehicle,
and all responsibility for the custody and transfer of the same, including all
rights and obligations in relation to any lease payments, insurance, assessments
and general risk of loss shall be borne by RCFC, Dollar or Thrifty, as the case
may be, or by the seller of such Replacement Vehicle, but in no event by the
Qualified Intermediary.
4.3 Notification.
(a) RCFC Notification. RCFC represents and agrees that it will provide
notice, on or before the date of the acquisition of a RCFC Replacement Vehicle,
to the RCFC Seller of such RCFC Replacement Vehicle and to all other parties to
the applicable RCFC Replacement Property Agreement, that RCFC's rights, but not
its obligations, under the applicable RCFC Replacement Property Agreement with
respect to such RCFC Replacement Vehicle have been assigned to the Qualified
Intermediary, as its "qualified intermediary."
(b) Dollar Notification. Dollar represents and agrees that it will
provide notice, on or before the date of the acquisition of a Dollar Replacement
Vehicle, to the Dollar Seller of such Dollar Replacement Vehicle and to all
other parties to the applicable Dollar Replacement Property Agreement, that
Dollar's rights, but not its obligations, under the applicable Dollar
Replacement Property Agreement with respect to such Dollar Replacement Vehicle
have been assigned to the Qualified Intermediary, as its "qualified
intermediary."
(c) Thrifty Notification. Thrifty represents and agrees that it will
provide notice, on or before the date of the acquisition of a Thrifty
Replacement Vehicle, to the Thrifty Seller of such Thrifty Replacement Vehicle
and to all other parties to the applicable Thrifty Replacement Property
Agreement, that Thrifty's rights, but not its obligations, under the applicable
Thrifty Replacement Property Agreement with respect to such Thrifty Replacement
Vehicle have been assigned to the Qualified Intermediary, as its "qualified
intermediary."
4.4 Tax Treatment. Solely for income tax purposes and for purposes of this
Agreement, Qualified Intermediary, pursuant to Treasury Regulation xx.xx.
1.1031(k)-1(g)(4)(iii),(iv) and (v), shall be treated as having acquired (a)
each RCFC Replacement Vehicle from the RCFC Seller thereof and having
transferred each RCFC Replacement Vehicle to RCFC, (b) each Dollar Replacement
Vehicle from the Dollar Seller thereof and having transferred each Dollar
Replacement Vehicle to Dollar, and (c) each Thrifty Replacement Vehicle from the
Thrifty Seller thereof and having transferred each Thrifty Replacement Vehicle
to Thrifty.
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4.5 Direct Transfer. The parties to this Agreement agree that, each and
every (a) RCFC Replacement Vehicle shall be transferred directly from the RCFC
Seller thereof to RCFC, (b) Dollar Replacement Vehicle shall be transferred
directly for the Dollar Seller thereof to Dollar, (c) Thrifty Replacement
Vehicle shall be transferred directly from the Thrifty Seller thereof to
Thrifty. The parties to this Agreement agree that the Qualified Intermediary
shall not take actual or constructive possession of, hold legal title to, or be
the registered owner of any Replacement Vehicle.
ARTICLE V
EXCHANGE PROCEEDS
5.1 Master Collateral Account.
(a) Financing Source and Beneficiary Agreement. Qualified Intermediary
represents that it has entered into or will simultaneously with the execution of
this Agreement enter into the Financing Source and Beneficiary Agreement.
Pursuant to the Financing Source and Beneficiary Agreement and the Addendum to
the Amended and Restated Master Collateral Agency Agreement, the funds from the
sale of all RCFC Exchanged Vehicles, Dollar Exchanged Vehicles and Thrifty
Exchanged Vehicles will be deposited into the Master Collateral Account for the
benefit of the Qualified Intermediary in its capacity as the "qualified
intermediary" for RCFC, Dollar and Thrifty, respectively.
(b) Master Collateral Account. The parties to this Agreement
acknowledge that the funds received from the sale of each Exchanged Vehicle will
initially be deposited into the Master Collateral Account for the benefit of the
Qualified Intermediary as set forth in Section 5.1(a) of this Agreement, and
that in accordance with the Amended and Restated Master Collateral Agency
Agreement, the funds from the sale of each Exchanged Vehicle that are deposited
in the Master Collateral Account for the benefit of the Qualified Intermediary
and any interest earned on such amounts shall be transferred, in accordance with
the terms of the Amended and Restated Master Collateral Agency Agreement, to an
account established by CTC as provided in Section 5.2 of this Agreement.
5.2 Establishment of Escrow Account. CTC shall establish with respect to
each of RCFC, Dollar and Thrifty, one or more segregated trust accounts and
shall establish pursuant to the terms of this Agreement and the Bank Account
Agreements the following accounts, or such other accounts and sub-accounts as
are set forth on Exhibit 5.2 of this Agreement, as such Exhibit may be modified
from time to time by RCFC, Dollar or Thrifty, to keep the property and proceeds
thereof of each of RCFC, Dollar and Thrifty separate and identifiable and to
facilitate the exchange of (i) RCFC Exchanged Vehicles for RCFC Replacement
Vehicles, (ii) Dollar Exchanged Vehicles for Dollar Replacement Vehicles and
(iii) Thrifty Exchanged Vehicles for Thrifty Replacement Vehicles. The parties
acknowledge and agree that the funds held in any of the following accounts, or
any other account or sub-account established pursuant to the terms of this
Agreement, shall only be distributed in accordance with the terms of this
Agreement. CTC shall act solely as a trustee and shall have no equitable
interest in any proceeds deposited in any of the segregated trust accounts
referred to herein. The parties acknowledge and agree that each Escrow Account
is intended to qualify as a "qualified trust" account and that CTC is
establishing such accounts on behalf of the Qualified Intermediary in its
capacity as a "trustee," each within the meaning of Treasury Regulation ss.
1.1031(k)-1(g)(3)(iii).
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(a) RCFC Exchange Accounts. The RCFC Exchange Accounts are intended to
receive all funds which relate to the disposition of a RCFC Exchanged Vehicle.
(b) Dollar Exchange Accounts. The Dollar Exchange Accounts are
intended to receive all funds which relate to the disposition of a Dollar
Exchanged Vehicle.
(c) Thrifty Exchange Accounts. The Thrifty Exchange Accounts are
intended to receive all funds which relate to the disposition of a Thrifty
Exchanged Vehicle.
(d) RCFC Disbursement Accounts. The RCFC Disbursement Accounts are
intended to facilitate the orderly and efficient disbursement of funds to
dealers and auctions with respect to the acquisition of RCFC Replacement
Vehicles.
(e) Dollar Disbursement Accounts. The Dollar Disbursement Accounts are
intended to facilitate the orderly and efficient disbursement of funds (i) to
dealers and auctions with respect to the acquisition of Dollar Replacement
Vehicles and (ii) to repay liabilities that must be repaid upon the disposition
by Dollar of an Exchanged Vehicle Subject to Liabilities.
(f) Thrifty Disbursement Accounts. The Thrifty Disbursement Accounts
are intended to facilitate the orderly and efficient disbursement of funds (i)
to dealers and auctions with respect to the acquisition of Thrifty Replacement
Vehicles and (ii) to repay liabilities that must be repaid upon the disposition
by Thrifty of an Exchanged Vehicle Subject to Liabilities.
5.3 Proceeds from Transfer of Exchanged Vehicles. Each Business Day, RCFC,
Dollar and Thrifty shall provide the Qualified Intermediary with a report
setting forth for such day the (i) aggregate amount to be deposited into the
RCFC Exchange Accounts, (ii) the aggregate amount to be deposited into the
Dollar Exchange Accounts and (iii) the aggregate amount to be deposited into the
Thrifty Exchange Accounts. The funds to be deposited into the RCFC Exchange
Accounts, the Dollar Exchange Accounts and the Thrifty Exchange Accounts
pursuant to this Section 5.3 shall be funds transferred from the Master
Collateral Account.
5.4 Procedures With Respect to Dollar Exchanged Vehicles and Thrifty
Exchanged Vehicles Transferred Subject To Liabilities.
(a) Reports. Each Business Day, Dollar and Thrifty shall provide
the following information to the Qualified Intermediary: (i) the amount that
Dollar is to deposit into the Dollar Escrow Accounts as a loan to the Qualified
Intermediary to permit the Qualified Intermediary to repay liabilities that must
be repaid upon the disposition by Dollar of an Exchanged Vehicle Subject to
Liabilities; (ii) the amount that Thrifty is to deposit into the Thrifty Escrow
Accounts as a loan to the Qualified Intermediary to permit the Qualified
Intermediary to repay liabilities that must be repaid upon the disposition by
Thrifty of an Exchanged Vehicle Subject to Liabilities; (iii) the amount to be
transferred from the Dollar Exchange Accounts to the Dollar Disbursement
Accounts to repay liabilities that must be repaid upon the disposition by Dollar
of an Exchanged Vehicle Subject to Liabilities, (iv) the amount to be
transferred from the Thrifty Exchange Accounts to the Thrifty Disbursement
Accounts to repay liabilities that must be repaid upon disposition by Thrifty of
an Exchanged Vehicle Subject to Liabilities, (v) the amount to be transferred
from the Dollar Exchange Accounts to the Master Collateral Account to satisfy
the Qualified Intermediary's obligation under Section 5.4(c) of this Agreement,
(vi) the amount to be transferred from the Thrifty Exchange Accounts to the
Master Collateral Account to satisfy the Qualified Intermediary's obligation
under Section 5.4(c) of this Agreement, (vii) the amount that Dollar is to
deposit into the Dollar Escrow Accounts to permit the Qualified Intermediary to
repay liabilities that must be repaid upon the disposition by Dollar of an
Exchanged Vehicle Subject to Liabilities where the amount to be received from
the disposition of such vehicle is less than the amount of liabilities that must
be repaid upon the disposition of such vehicle; and (viii) the amount that
Thrifty is to deposit into the Thrifty Escrow Accounts to permit the Qualified
Intermediary to repay liabilities that must be repaid upon the disposition by
Thrifty of an Exchanged Vehicle Subject to Liabilities where the amount to be
received from the disposition of such vehicle is less than the amount of
liabilities that must be repaid upon the disposition of such vehicle.
16
(b) Purpose of Funds. The funds that are deposited into the Dollar
Escrow Accounts pursuant to Sections 5.4(a)(i), 5.4(a)(iii) and 5.4(a)(vii) of
this Agreement shall be used by the Qualified Intermediary to repay the
liabilities that must be repaid upon the disposition by Dollar of Exchanged
Vehicles Subject to Liabilities. The funds that are deposited into the Thrifty
Escrow Accounts pursuant to Sections 5.4(a)(ii), 5.4(a)(iv) and 5.4(a)(viii) of
this Agreement shall be used to repay the liabilities that must be repaid upon
the disposition by Thrifty of Exchanged Vehicles Subject to Liabilities.
(c) Loans. The parties agree that the amounts transferred to the
Qualified Intermediary pursuant to Sections 5.4(a)(i) and 5.4(a)(ii) of this
Agreement are being advanced from Dollar and Thrifty, respectively, as loans to
the Qualified Intermediary. Upon the Qualified Intermediary's receipt of a
report pursuant to Section 5.4(a)(v) of this Agreement, the Qualified
Intermediary shall repay Dollar the amount set forth in such report. Upon the
Qualified Intermediary's receipt of a report pursuant to Section 5.4(a)(vi) of
this Agreement, the Qualified Intermediary shall repay Thrifty the amount set
forth in such report. The Qualified Intermediary may satisfy this obligation by
transferring the amount set forth in such report from the Dollar Exchange
Accounts, in the case of a loan from Dollar, or the Thrifty Exchange Accounts,
in the case of a loan from Thrifty, to the Master Collateral Account.
Notwithstanding the foregoing, amounts deposited into the Dollar Escrow Accounts
or Thrifty Escrow Accounts pursuant to Sections 5.4(a)(i) and 5.4(a)(ii),
respectively, shall be treated as being deposited into such accounts pursuant to
Sections 5.4(a)(vii) and 5.4(a)(viii), respectively, to the extent the amount
actually received by the Qualified Intermediary from the disposition of an
Exchanged Vehicle Subject to Liabilities is less than the amount of liabilities
that must be repaid by Dollar or Thrifty, respectively, upon the disposition of
such vehicle. In addition, notwithstanding the foregoing, the Qualified
Intermediary shall at no time be required to repay any amount set forth in any
report that, either taken alone or when added to amounts set forth in prior
reports, would exceed the aggregate amount previously transferred to the
Qualified Intermediary pursuant to Section 5.4(a)(i) or 5.4(a)(ii), as
applicable.
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5.5 Payment for Replacement Vehicles.
(a) Reports. Each Business Day, RCFC, Dollar and Thrifty shall provide
the following information to the Qualified Intermediary: (i) the amount to be
transferred from the RCFC Exchange Accounts to the RCFC Disbursement Accounts;
(ii) the amount of RCFC Additional Subsidies to be deposited by RCFC into the
RCFC Escrow Accounts; (iii) the amount to be transferred from the Dollar
Exchange Accounts to the Dollar Disbursement Accounts; (iv) the amount of Dollar
Additional Subsidies to be deposited by Dollar into the Dollar Escrow Accounts;
(v) the amount to be deposited into the Dollar Escrow Accounts to acquire Dollar
Replacement Vehicles subject to liabilities; (vi) the amount to be transferred
from the Thrifty Exchange Accounts to the Thrifty Disbursement Accounts; (vii)
the amount of Thrifty Additional Subsidies to be deposited by Thrifty into the
Thrifty Escrow Accounts and (viii) the amount to be deposited into the Thrifty
Escrow Accounts to acquire Thrifty Replacement Vehicles subject to liabilities.
(b) Transfers of Funds. Each Business Day, CTC will initiate transfers
from: (i) the RCFC Exchange Accounts to the RCFC Disbursement Accounts; (ii) the
Dollar Exchange Accounts to the Dollar Disbursement Accounts and (iii) the
Thrifty Exchange Accounts to the Thrifty Disbursement Accounts, in each case
based on the information provided to the Qualified Intermediary pursuant to
Section 5.5(a) of this Agreement.
(c) Purpose of Funds. The parties intend and agree that (i) the
funds deposited into the RCFC Escrow Accounts pursuant to Sections 5.5(a)(i) and
5.5(a)(ii) of this Agreement will be used to acquire RCFC Replacement Vehicles,
(ii) the funds deposited into the Dollar Escrow Accounts pursuant to Sections
5.5(a)(iii), 5.5(a)(iv) and 5.5(a)(v) of this Agreement will be used to acquire
Dollar Replacement Vehicles and (iii) the funds deposited into the Thrifty
Escrow Accounts pursuant to Sections 5.5(a)(vi), 5.5(a)(vii) and 5.5(a)(viii) of
this Agreement will be used to acquire Thrifty Replacement Vehicles.
5.6 Other Distributions.
(a) Reports. Each Business Day, RCFC, Dollar and Thrifty shall provide
the Qualified Intermediary with a report setting forth for such day the (i)
aggregate amount to be transferred from the RCFC Exchange Accounts to the Master
Collateral Account for the benefit of RCFC, which funds shall only be
transferred to such account if RCFC provides the Qualified Intermediary a
written notice that one of the events set forth in Sections 5.11(a)(ii), (iii)
or (iv) of this Agreement have occurred, (ii) aggregate amount to be transferred
from the Dollar Exchange Accounts to the Master Collateral Account for the
benefit of Dollar, which funds shall only be transferred to such account if
Dollar provides the Qualified Intermediary with a written notice that one of the
events set forth in Sections 5.11(b)(ii), (iii) or (iv) of this Agreement have
occurred and (iii) aggregate amount to be transferred from the Thrifty Exchange
Accounts to the Master Collateral Account for the benefit of Thrifty, which
funds shall only be transferred to such account if Thrifty provides the
Qualified Intermediary with a written notice that one of the events set forth in
Section 5.11(c)(ii), (iii) or (iv) of this Agreement have occurred.
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(b) Transfers of Funds. Each Business Day, if the written notices
referred to in Section 5.6(a) of this Agreement concerning the events set forth
in Section 5.11(a) (with respect to RCFC), Section 5.11(b) (with respect to
Dollar) and/or Section 5.11(c) (with respect to Thrifty) have been provided to
the Qualified Intermediary, CTC will initiate transfers from the (i) RCFC
Exchange Accounts to the Master Collateral Account for the benefit of RCFC, (ii)
Dollar Exchange Accounts to the Master Collateral Account for the benefit of
Dollar and (iii) Thrifty Exchange Accounts to the Master Collateral Account for
the benefit of Thrifty based, in each case, on the information provided pursuant
to Section 5.6(a) of this Agreement.
5.7 Shortfall of Funds. If, for any reason, the amount reported as
being deposited into an Escrow Account is less than the amount actually received
in such Escrow Account, then the Qualified Intermediary shall notify the person
set forth on Exhibit 5.7 of this Agreement, as such Exhibit may be modified from
time to time by RCFC, Dollar or Thrifty (via e-mail, phone and fax) within two
hours of notification that an additional amount is required to be deposited in
such Escrow Account. Such notification shall set forth the amount that was to be
deposited into such account and the amount that was actually received and such
other information as is reasonably requested by RCFC, Dollar or Thrifty, as
applicable based upon whose account is experiencing the shortfall. If for any
reason, the amount reported as being required to be transferred from any Escrow
Account exceeds the total amount of funds in such account, as the case may be,
(a "Shortfall Account"), including any funds earned from the investment of funds
held in the applicable account, the amounts required to be transferred shall be
reduced by the amount of such shortfall. The Qualified Intermediary shall notify
the person set forth on Exhibit 5.7 of this Agreement, as such Exhibit may be
modified from time to time by RCFC, Dollar or Thrifty (via e-mail, phone and
fax) within one hour if there is a Shortfall Account. Such notification shall
set forth the amount that was requested to be transferred from the Shortfall
Account, the account to which the funds were to be transferred (the "Shortfall
Recipient Account") and the amount that was actually transferred from the
Shortfall Account. In the event that the amounts to be transferred from any
Escrow Account held for the benefit of RCFC exceeds the total amount of funds in
such account, then RCFC, may, at its option, transfer the amounts of funds that
were to be transferred from the Shortfall Account to the Shortfall Recipient
Account. In the event that the amounts to be transferred from any Escrow Account
held for the benefit of Dollar exceeds the total amount of funds in such
account, then Dollar, may, at its option, transfer the amounts of funds that
were to be transferred from the Shortfall Account to the Shortfall Recipient
Account. In the event that the amounts to be transferred from any Escrow Account
held for the benefit of Thrifty exceeds the total amount of funds in such
account, then Thrifty, may, at its option, transfer the amounts of funds that
were to be transferred from the Shortfall Account to the Shortfall Recipient
Account.
5.8 Use of Exchange Proceeds. It is the intent of the parties hereto that
the Exchange Proceeds, including the Escrow Funds, shall be used solely to
enable each of the Qualified Intermediary and CTC to perform its obligations
under this Agreement in accordance with the terms of this Agreement. The
Exchange Proceeds, including the Escrow Funds, shall not be considered part of
Qualified Intermediary's, CDEC's or CTC's general assets nor subject to claims
by Qualified Intermediary's, CDEC's or CTC's creditors, nor, except as
specifically provided in this Agreement, shall the Qualified Intermediary, CDEC
or CTC have any right, title and interest in and to the Exchange Proceeds. The
Exchange Proceeds, including the Escrow Funds, shall be held in trust for the
separate and not joint benefit of each of RCFC, Dollar and Thrifty, as their
interests may appear, subject to the terms of this Agreement and the limitations
contained in the "safe harbor" provisions of Treasury Regulation xx.xx.
1.1031(k)-1(g)(3)(iii), (g)(4)(ii) and (g)(6). All Exchange Proceeds and other
money or property received by CTC from or on behalf of RCFC constitutes a grant
and settlement in trust for or on behalf of RCFC, which funds and property CTC
shall hold and administer in trust for the uses and purposes and subject to all
of the terms, conditions and provisions of this Agreement. All Exchange Proceeds
and other money or property received by CTC from or on behalf of Dollar
constitutes a grant and settlement in trust for or on behalf of Dollar, which
funds and property CTC shall hold and administer in trust for the uses and
purposes and subject to all of the terms, conditions and provisions of this
Agreement. All Exchange Proceeds and other money or property received by CTC
from or on behalf of Thrifty constitutes a grant and settlement in trust for or
on behalf of Thrifty, which funds and property CTC shall hold and administer in
trust for the uses and purposes and subject to all of the terms, conditions and
provisions of this Agreement. CTC agrees to act only in accordance with the
terms of this Agreement and with additional instructions given by the Qualified
Intermediary from time to time, provided such instructions are not inconsistent
with the terms of this Agreement.
19
5.9 Investment of Funds in the Escrow Account. During the term of this
Agreement, CTC shall invest and reinvest all funds held in each Escrow Account
in any investments listed on Exhibit 5.9 attached hereto with respect to each
such account, as such may be amended or modified by (i) Dollar, in the case of
Escrow Accounts held for the benefit of Dollar, (ii) RCFC, in the case of Escrow
Accounts held for the benefit of RCFC and (iii) Thrifty, in the case of Escrow
Accounts held for the benefit of Thrifty, provided, however, in no event may any
such investments, directly or indirectly, be in any security of RCFC, Dollar or
Thrifty or any of their affiliates.
5.10 Limitation on Rights to Exchange Proceeds.
(a) The parties intend that at all times the rights of each of RCFC,
Dollar and Thrifty to receive, pledge, borrow or otherwise obtain the benefits
of the Exchange Proceeds shall be consistent with the limitations contained in
the "safe harbor" provisions of Treasury Regulation xx.xx.
1.1031(k)-1(g)(3)(iii), (g)(4)(ii) and (g)(6). Without limitation of the
foregoing, RCFC, Dollar and Thrifty shall have no right to receive, pledge,
borrow, or otherwise obtain the benefits of the Exchange Proceeds or earnings
thereon except as set forth in Treasury Regulation ss. 1.1031(k)-1(g)(6). In
addition, neither Dollar nor Thrifty shall have any right to receive, pledge,
borrow or otherwise obtain the benefits of the RCFC Exchange Proceeds or
earnings thereon or any right to or interest in the RCFC Exchanged Vehicles, the
RCFC Replacement Vehicles or any other property of RCFC. This provision shall
apply notwithstanding any inconsistent instruction given by RCFC, Dollar or
Thrifty and notwithstanding any decision by RCFC, Dollar or Thrifty not to
pursue a deferred exchange or to abandon the transactions contemplated by this
Agreement.
20
(b) Notwithstanding anything else contained herein, it is
specifically understood and agreed that CTC's role with respect to the Escrow
Accounts, the Escrow Funds and the transactions contemplated hereby is and shall
be solely that of a trustee, and that CTC shall at no time have any legal or
equitable interest in any Exchanged Vehicles, Replacement Vehicles, Exchange
Proceeds or any other proceeds.
5.11 Release of Escrow Funds. The Escrow Funds and all other amounts that
comprise Exchange Proceeds shall only be used as follows:
(a) Use of Funds from the disposition of RCFC Exchanged Vehicles. All
RCFC Exchange Proceeds, and all interest and other amounts earned on such funds,
shall only be used as follows:
(i) to acquire RCFC Replacement Vehicles;
(ii) In the event that RCFC has not acquired RCFC Replacement
Vehicles within the RCFC Exchange Period, then RCFC shall provide the Qualified
Intermediary with a written notice to such effect and Qualified Intermediary
shall transfer the amount of funds set forth in such notice to the Master
Collateral Account in accordance with the terms of Section 5.6(b) of this
Agreement.
(iii) In the event that RCFC has not identified RCFC Replacement
Vehicles within the RCFC Identification Period, then RCFC shall provide the
Qualified Intermediary with a written notice to such effect and the Qualified
Intermediary shall transfer the amount of funds set forth in such notice to the
Master Collateral Account in accordance with the terms of Section 5.6(b) of this
Agreement.
(iv) In the event that after identification and after the
RCFC Identification Period has expired, RCFC has received all of the identified
RCFC Replacement Vehicles to which RCFC is entitled, then RCFC shall provide the
Qualified Intermediary with a written notice of such effect and the Qualified
Intermediary shall transfer the amount of funds set forth in such notice to the
Master Collateral Account in accordance with the terms of Section 5.6(b) of this
Agreement.
(b) Use of Funds from the disposition of Dollar Exchanged Vehicles.
All Dollar Exchange Proceeds, and all interest and other amounts earned on such
funds, shall only be used as follows:
(i) to acquire Dollar Replacement Vehicles;
(ii) In the event that Dollar has not acquired Dollar
Replacement Vehicles within the Dollar Exchange Period, then Dollar shall
provide the Qualified Intermediary with a written notice to such effect and
Qualified Intermediary shall transfer the amount of funds set forth in such
notice to the Master Collateral Account in accordance with the terms of Section
5.6(b) of this Agreement.
21
(iii) In the event that Dollar has not identified Dollar
Replacement Vehicles within the Dollar Identification Period, then Dollar shall
provide the Qualified Intermediary with a written notice to such effect and the
Qualified Intermediary shall transfer the amount of funds set forth in such
notice to the Master Collateral Account in accordance with the terms of Section
5.6(b) of this Agreement.
(iv) In the event that after identification and after the
Dollar Identification Period has expired, Dollar has received all of the
identified Dollar Replacement Vehicles to which Dollar is entitled, then Dollar
shall provide the Qualified Intermediary with a written notice of such effect
and the Qualified Intermediary shall transfer the amount of funds set forth in
such notice to the Master Collateral Account in accordance with the terms of
Section 5.6(b) of this Agreement.
(v) to repay liabilities that must be repaid upon the
disposition by Dollar of an Exchanged Vehicle Subject to Liabilities in
accordance with the terms of Section 5.4 of this Agreement.
(c) Use of Funds from the disposition of Thrifty Exchanged Vehicles.
All Thrifty Exchange Proceeds, and any interest or other amounts earned on such
funds, shall only be used as follows:
(i) to acquire Thrifty Replacement Vehicles;
(ii) In the event that Thrifty has not acquired Thrifty
Replacement Vehicles within the Thrifty Exchange Period, then Thrifty shall
provide the Qualified Intermediary with a written notice to such effect and
Qualified Intermediary shall transfer the amount of funds set forth in such
notice to the Master Collateral Account in accordance with the terms of Section
5.6(b) of this Agreement.
(iii) In the event that Thrifty has not identified Thrifty
Replacement Vehicles within the Thrifty Identification Period, then Thrifty
shall provide the Qualified Intermediary with a written notice to such effect
and the Qualified Intermediary shall transfer the amount of funds set forth in
such notice to the Master Collateral Account in accordance with the terms of
Section 5.6(b) of this Agreement.
(iv) In the event that after identification and after the
Thrifty Identification Period has expired, Thrifty has received all of the
identified Thrifty Replacement Vehicles to which Thrifty is entitled, then
Thrifty shall provide the Qualified Intermediary with a written notice of such
effect and the Qualified Intermediary shall transfer the amount of funds set
forth in such notice to the Master Collateral Account in accordance with the
terms of Section 5.6(b) of this Agreement.
(v) to repay liabilities that must be repaid upon the
disposition by Thrifty of Exchanged Vehicles Subject to Liabilities in
accordance with the terms of Section 5.4 of this Agreement.
22
(d) Limitation of Liability of Qualified Intermediary.
Notwithstanding anything contained in Sections 5.11(a)(ii), (iii) and (iv),
5.11(b)(ii), (iii) and (iv), and 5.11(c)(ii), (iii) and (iv), the Qualified
Intermediary shall not be required to transfer to the Master Collateral Account
any amount set forth in any notice that is in excess of the amount of funds held
by the Qualified Intermediary in Escrow Funds or other amounts comprising
Exchange Proceeds that are available to the Qualified Intermediary to effect
such transfer.
ARTICLE VI
TERM, COMPENSATION, TAXES AND LEGAL COMPLIANCE
6.1 Term. This Agreement shall begin on the date first written above and
end on the earlier of (i) five (5) Business Days after notice of termination is
given by RCFC, Dollar and Thrifty to Qualified Intermediary, unless a longer
termination period is specified in the notice in which case termination shall be
effective as of the date stated in the notice or (2) sixty (60) days after
notice of termination is given by Qualified Intermediary to RCFC, Dollar and
Thrifty, provided, however, that in either case this Agreement may not terminate
if the termination would, in the good-faith judgment of tax counsel to RCFC,
Dollar and Thrifty, jeopardize the like-kind exchange treatment under Section
1031 of the Code of the deferred exchange of Exchanged Vehicles for Replacement
Vehicles or violate the "safe harbor" provisions of Treasury Regulation xx.xx.
1.1031(k)-1(g)(3)(iii), (g)(4)(ii) or (g)(6). The Qualified Intermediary shall
cooperate with RCFC, Dollar and Thrifty in promptly transferring its
responsibilities hereunder to any successor "qualified intermediary." Any notice
provided by RCFC, Dollar or Thrifty to the Qualified Intermediary pursuant to
this Section 6.1 shall state if each of RCFC, Dollar and Thrifty is revoking the
rights it each assigned to the Qualified Intermediary pursuant to Sections
2.2(a), 2.2(b), 2.2(c), 4.2(a), 4.2(b) and 4.2(c) of this Agreement.
6.2 Compensation. For their services under this Agreement, Qualified
Intermediary and CTC shall receive the sum set forth in a separate fee letter
dated July 18, 2001.
6.3 Taxes. The parties hereto acknowledge and agree that Qualified
Intermediary will report to the Internal Revenue Service the income accumulated,
and that such amount will be attributed to RCFC, Dollar or Thrifty for federal
income tax purposes. Simultaneously with entering into this agreement, RCFC,
Dollar and Thrifty have executed a Form W-9 or substitute Form W-9, the receipt
of which the Qualified Intermediary hereby acknowledges.
6.4 Legal Compliance and Consents. RCFC, Dollar and Thrifty s hall be
solely responsible for obtaining or making any consent, approval, clearance,
release, filing or tax payment and satisfying any other condition, in connection
with the transfer of Exchanged Vehicles and Replacement Vehicles.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1 Representations and Warranties of Qualified Intermediary, CDEC and
CTC. Qualified Intermediary, CDEC and CTC hereby jointly and severally represent
and warrant to RCFC, Dollar and Thrifty as of the date hereof and on the date of
the transactions described in Articles II, IV and V and covenants, where
applicable, with RCFC, Dollar and Thrifty as follows:
(a) Organization, Power, Standing and Qualification. Qualified
Intermediary is a limited liability company, duly organized, validly existing
and in good standing under the laws of the State of Delaware. CDEC is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Illinois. CTC is a trust company duly organized, validly
existing and in good standing under the laws of the State of Illinois. Each of
Qualified Intermediary, CDEC and CTC has the requisite corporate power and
authority to carry on its business as it has been conducted in the past, as it
is presently being conducted, and as it is contemplated to be conducted under
this Agreement. Each of Qualified Intermediary, CDEC and CTC is duly qualified
to transact business and is in good standing as a foreign corporation in each
and every jurisdiction required by law.
(b) Corporate Power and Authority. Each of Qualified Intermediary,
CDEC and CTC has the power and authority to execute, deliver and perform this
Agreement, its obligations under this Agreement and the transactions
contemplated hereby. The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Qualified
Intermediary, CDEC and CTC. This Agreement is a valid and binding obligation of
Qualified Intermediary, CDEC and CTC, enforceable in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
moratorium, or similar laws affecting the enforcement of creditors' rights
generally.
(c) Validity of Contemplated Transactions. The execution, delivery,
and performance of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) contravene any provisions of the
Articles of Organization or bylaws of Qualified Intermediary, CDEC or CTC (ii)
violate, conflict with, constitute a default under, cause the acceleration of
any payments pursuant to, or otherwise impair the good standing, validity, or
effectiveness of any agreement, contract, indenture, lease, or mortgage to which
Qualified Intermediary, CDEC or CTC is a party, or subject any of the assets of
Qualified Intermediary, CDEC, CTC to any indenture mortgage, contract,
commitment, lien (including without limitations any tax lien) or agreement to
which Qualified Intermediary, CDEC or CTC is a party or by which Qualified
Intermediary, CDEC, or CTC is bound; or (iii) violate any provision of any law,
rule, regulation, order, permit or license to which Qualified Intermediary, CDEC
or CTC is subject. The execution, delivery, and performance of this Agreement
and the consummation of the transactions contemplated hereby will not require
Qualified Intermediary, CDEC or CTC to file or register with, or obtain any
permit, authorization, consent or approval of, any governmental or regulatory
authority or any other third party, that is not already filed, registered or
obtained.
24
(d) Indebtedness. Neither Qualified Intermediary, CDEC nor CTC, nor
any person acting on behalf of or as an agent for Qualified Intermediary, CDEC
or CTC, has incurred or will incur any indebtedness for borrowed money or
pledge, assign, transfer, or otherwise encumber (or permit any of the foregoing
encumbrances with respect to) any of Qualified Intermediary's, CDEC's or CTC's
rights in this Agreement or rights, if any, in the Exchanged Vehicles, the
Replacement Vehicles, the Exchange Proceeds, the Escrow Funds or the Escrow
Account.
(e) Litigation and Compliance. There is no material suit, action,
claim, arbitration, administrative, legal, or other proceeding or governmental
investigation pending or, to the knowledge of Qualified Intermediary, CDEC or
CTC (each after due inquiry), threatened against Qualified Intermediary, CDEC or
CTC or their respective officers, or directors nor has there been any failure by
Qualified Intermediary, CDEC or CTC or their respective officers, or directors
to comply with nor has there been any violation of, or default with respect to
any order, writ, injunction, judgment or decree of any court or federal, state,
or local department, official, commission, authority, board, bureau, agency, or
other instrumentality issued or pending against Qualified Intermediary, CDEC,
CTC or their respective officers or directors.
(f) Agency. Neither Qualified Intermediary, CDEC, CTC nor an
affiliate of any of the foregoing is or has been during the last two years, an
attorney, accountant, attorney-in-fact, broker, investment banker, real estate
agent, real estate broker or agent (within the meaning of Treasury Regulation
ss. 1.1031(k)-1(k)(2)) of RCFC, Dollar or Thrifty or an affiliate of the
foregoing, other than in connection with the type of transactions contemplated
by this Agreement. For purposes of this section an affiliate shall mean a person
that bears a relationship described in either section 267(b) or 707(b) of the
Code (determined by substituting "10 percent" for "50 percent" each place it
appears).
(g) Disqualified Person. As of the date this Agreement is executed,
neither Qualified Intermediary, CDEC or CTC is a "disqualified person" as
defined in Treasury Regulation ss. 1.1031(k)-1(k)(1) with respect to RCFC,
Dollar or Thrifty.
(h) Bonding. Qualified Intermediary is insured for any losses
suffered due to the implementation of the transactions contemplated by this
Agreement to the limit of $500 million dollars and will be responsible for
renewing the coverage annually. The Qualified Intermediary will obtain a
certificate of insurance naming RCFC, Dollar and Thrifty as beneficiary under a
fidelity bond in the amount of $500 million dollars.
(i) Title. Each of Qualified Intermediary, CDEC and CTC will act,
in connection with any transaction governed by this Agreement, solely as
fiduciary, and under New York law or the law of the applicable jurisdiction will
at no time have any equitable interest in or with respect to any proceeds or
other property that may come into its possession or under its dominion and
control.
(j) Covenants. Qualified Intermediary, CDEC and CTC will file its
tax returns on a timely basis and pay its tax liability on a timely basis.
Qualified Intermediary and CTC shall make all necessary filings and pay all fees
required by any governmental or regulatory authority, or any third party in
order to conduct its business and the transactions contemplated hereby.
25
(k) Compliance. CDEC shall cause VEXCO, LLC, as the Qualified
Intermediary to comply with its obligations under this Agreement.
7.2 Representations and Warranties of RCFC, Dollar and Thrifty. RCFC,
Dollar and Thrifty each severally (and not jointly) represents and warrants as
to the themselves to Qualified Intermediary as of the date hereof and on the
date of the transactions described in Articles II, IV and V and covenants, where
applicable, with Qualified Intermediary as follows:
(a) Organization, Power, Standing and Qualification. RCFC is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Oklahoma and has the requisite corporate power and
authority to carry on its business as it has been conducted in the past and is
presently being conducted. Dollar is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Oklahoma and has
the requisite corporate power and authority to carry on its business as it has
been conducted in the past and is presently being conducted. Thrifty is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Oklahoma and has the requisite corporate power and
authority to carry on its business as it has been conducted in the past and is
presently being conducted. RCFC, Dollar and Thrifty are duly qualified to
transact business and are in good standing as a foreign corporations in each and
every jurisdiction where required by law.
(b) Corporate Power and Authority. Each of RCFC, Dollar and Thrifty
has the power and authority to execute, deliver and perform this Agreement, its
obligations under this Agreement and the transactions contemplated hereby. The
execution, delivery, and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of each of RCFC, Dollar and Thrifty, as the case
may be. This Agreement is a valid and binding obligation of each of RCFC, Dollar
and Thrifty enforceable in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, moratorium, or similar laws
affecting the enforcement of creditors' rights generally.
(c) Validity of Contemplated Transactions. The execution, delivery,
and performance of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) contravene any provisions of the
Articles of Organization or bylaws of each of RCFC, Dollar or Thrifty (ii)
violate, conflict with, constitute a default under, cause the acceleration of
any payments pursuant to, or otherwise impair the good standing, validity, or
effectiveness of any agreement, contract, indenture, lease, or mortgage to which
any of RCFC, Dollar or Thrifty is a party, or subject any of the assets of RCFC,
Dollar or Thrifty to any indenture mortgage, contract, commitment, lien
(including without limitations any tax lien) or agreement to which any of RCFC,
Dollar or Thrifty is a party or by which any of RCFC, Dollar or Thrifty is
bound; or (iii) violate any provision of any law, rule, regulation, order,
permit or license to which RCFC, Dollar or Thrifty is subject. The execution,
delivery, and performance of this Agreement and the consummation of the
transactions contemplated hereby will not require RCFC, Dollar or Thrifty to
file or register with, or obtain any permit, authorization, consent or approval
of, any governmental or regulatory authority or any other third party, that is
not already filed, registered or obtained.
26
(d) Litigation and Compliance. There is no material suit, action,
claim, arbitration, administrative or legal or other proceeding, or governmental
investigation pending or, to the knowledge of RCFC, Dollar or Thrifty (after due
inquiry with respect to themselves), threatened against any of RCFC, Dollar or
Thrifty that is related to this Agreement, nor has there been any failure by
RCFC, Dollar or Thrifty to comply with, nor has there been any violation of, or
default with respect to, any order, writ, injunction, judgment, or decree of any
court or federal, state, or local department, official, commission, authority,
board, bureau, agency, or other instrumentality issued or pending against any of
RCFC, Dollar or Thrifty that is related to this Agreement which has not been
disclosed to Qualified Intermediary.
(e) Tax Advice. Each of RCFC, Dollar and Thrifty represents that
it has received no tax advice or representations from Qualified Intermediary
regarding the transactions contemplated herein.
7.3 Exclusivity. Except as permitted under this Agreement, Qualified
Intermediary agrees that it will not enter into any agreement or conduct any
transactions or other business with RCFC, Dollar, Thrifty or any of their
affiliates other than agreements, transactions or business with RCFC, Dollar,
Thrifty or their affiliates in its capacity as a "qualified intermediary" under
this Agreement. Except as permitted under this Agreement, CTC agrees that it
will not enter into any agreement or conduct any transactions or other business
with RCFC, Dollar, Thrifty or any of their affiliates other than agreements,
transactions or business with RCFC, Dollar, Thrifty or their affiliates in its
capacity as a "qualified trustee" under this Agreement.
7.4 Records. Qualified Intermediary agrees that it will monitor and keep
detailed and accurate records of the transactions carried out pursuant to this
Agreement. Such records shall include, but shall not be limited to, copies of
the Daily Transaction Reports, Identification Reports and any other information
provided to the Qualified Intermediary pursuant to this Agreement. All such
records will be available for inspection by RCFC, Dollar, Thrifty or its
designated representatives, upon such parties request, at reasonable, mutually
agreeable times, while this Agreement remains in force. After expiration,
termination or cancellation of this Agreement, Qualified Intermediary shall
promptly provide either paper copies or electronic copies of all such records to
each of RCFC, Dollar and Thrifty unless any such entity provides Qualified
Intermediary with a written notice stating that it does not want to receive
copies of such records.
7.5 Indemnity. Dollar and Thrifty jointly and severally agree to indemnify
CTC against any loss, claim, damage or liability arising from or by reason of
CTC's obligations contained in the Bank Account Agreement.
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ARTICLE VIII
MISCELLANEOUS
8.1 Modifications. The provisions of this Agreement may not be modified,
amended or waived without the prior written consent of all the parties hereto,
it being understood and agreed that if an agreement between RCFC, Dollar or
Thrifty, on the one hand, and a third party, on the other hand, requires third
party approval before modifying this Agreement, then RCFC's, Dollar's or
Thrifty's approval, as the case may be, shall be conditioned upon receipt of
such third party's approval.
8.2 Successors, Assigns and Assignment. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors, and except as otherwise provided herein, their assigns. The
Qualified Intermediary shall not be permitted to transfer or assign this
Agreement without the prior written consent of RCFC, Dollar and Thrifty, it
being understood and agreed that if an agreement between RCFC, Dollar or
Thrifty, on the one hand, and a third party, on the other hand, requires third
party approval before modifying this Agreement, then RCFC's, Dollar's or
Thrifty's approval, as the case may be, shall be conditioned upon receipt of
such third party's approval. In addition, it is understood and agreed that if
the assignment of this Agreement would, in the good-faith judgment of tax
counsel to RCFC, Dollar and Thrifty, jeopardize the like-kind exchange treatment
under Section 1031 of the Code of the deferred exchange of Exchanged Vehicles
for Replacement Vehicles or violate the "safeharbor" provisions of Treasury
Regulation xx.xx. 1.1031(k)-1(g)(3)(iii), (g)(4)(ii) or (g)(6), RCFC, Dollar or
Thrifty may withhold consent to such assignment.
8.3 Entire Agreement and Integration. This Agreement shall constitute the
entire agreement and understanding of the parties, and there are no other prior
or contemporary written or oral agreements, undertakings, promises, warranties
or covenants not contained herein. This Agreement constitutes the entire
agreement between the parties in that it is not subject to any prior agreement
whether oral or written.
8.4 Survival. The covenants and agreements contained in this Agreement,
including, without limitation, any indemnities contained herein, shall survive
the termination of this Agreement and the consummation of the transaction
contemplated hereby. All representations, warranties, covenants and agreements
made herein or in any certificate or other document furnished to a party hereto
pursuant to or in anticipation of this Agreement shall be deemed to have been
relied upon by the party to whom such certificate or other document is furnished
notwithstanding any investigation heretofore or hereafter made, and shall
continue in full force and effect as long as there remains unperformed any
obligation hereunder.
8.5 Further Assurance. Each of the parties hereto shall hereafter execute
and deliver such further instruments and do such further act and things as may
be required or necessary to carry out the intent and purposes of this Agreement
and which are not otherwise inconsistent with any of the terms of this
Agreement.
8.6 Relationship of the Parties. Nothing herein contained shall be
construed or is intended to make Qualified Intermediary, RCFC, Dollar or Thrifty
partners or joint venturers of one another and this Agreement is not intended
to, and does not constitute or result in a partnership agreement. This Agreement
does not render Qualified Intermediary liable for the debts or obligations of
RCFC, Dollar or Thrifty, and it is intended that Qualified Intermediary act
solely as a "qualified intermediary." RCFC's, Dollar's and Thrifty's
authorization of Qualified Intermediary to act on its behalf as set forth herein
is intended to conform to, and shall be construed in a manner consistent with,
Section 1031 of the Code and the applicable Treasury Regulations.
28
8.7 Governing Law: Jurisdiction. This Agreement and the rights and
obligations of the parties hereto shall be deemed to be contracts under the laws
of the State of New York and for all purposes shall be governed by and construed
and enforced in accordance with the laws of such state, except for its rules
relating to the conflict of laws.
8.8 Notices. All notices, requests, demands, and other communications
pertaining to this Agreement (but specifically excluding Daily Transaction
Reports which may be sent via electronic delivery to the address set forth on
Exhibit 8.8 hereof and Identification Reports which shall be given and received
in accordance with Treasury Regulation ss. 1.1031(k)-1(c)) shall be in writing
to the respective parties hereto to the address shown on Exhibit 8.8 attached
hereto and shall be deemed duly given (i) when delivered personally (which shall
include delivery by Federal Express or other nationally recognized, reputable
overnight courier service that issues a receipt or other confirmation of
delivery) to the party for whom such communication is intended, (ii) three (3)
Business Days after the date mailed by certified or registered U.S. mail, return
receipt requested, postage prepaid, addressed as set forth below or (iii) if
transmitted by facsimile, with a copy mailed on the same day in the manner
provided in clause (ii), when receipt is confirmed by telephone.
8.9 Counterparts. This Agreement and related instruments may be executed
in any number of counterparts, but all such counterparts shall together
constitute one and the same instrument. Signatures transmitted via facsimile
shall be considered authentic and binding.
8.10 Remedies Cumulative; Waiver. All rights, privileges and remedies
afforded each of the parties hereto shall be deemed cumulative and not exclusive
and the exercise of any one of such remedies shall not be deemed to be a waiver
of any other right, remedy or privilege provided for herein or available at law
or in equity. No failure by any of the parties hereto to exercise, or delay in
exercising any right, remedy or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof, or the exercise of
any other right, remedy or privilege. No notice to or demand on a party to this
Agreement shall, in itself, entitle such party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
the parties under this Agreement.
8.11 Third Party Beneficiary. None of the provisions of this Agreement
shall be for the benefit of or enforceable by any creditor of the parties hereto
or for the benefit of or enforceable by any third party.
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IN WITNESS WHEREOF, each party hereto has executed this Agreement as
of the day and year first above written.
RENTAL CAR FINANCE CORP.
By:
-------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President and Treasurer
DOLLAR RENT A CAR SYSTEMS, INC.,
By:
-------------------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: Treasurer
THRIFTY RENT-A-CAR SYSTEM, INC.,
By:
-------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Treasurer
30
VEXCO, LLC, as Qualified Intermediary
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
CHICAGO DEFERRED EXCHANGE CORPORATION,
as Member of VEXCO LLC
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
THE CHICAGO TRUST COMPANY
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
31
EXHIBIT 2.2(d)
Until further notice to the contrary, each of RCFC, Dollar, and
Thrifty revokes any assignment to the Qualified Intermediary of its rights with
respect to any agreement relating to the sale or other disposition of:
Any vehicle categorized as a "shuttle bus" in the records of RCFC, Dollar, or
Thrifty.
Any vehicle transferred prior to August 1, 2001.
EXHIBIT 3.1
Dollar Thrifty Automotive Group
QI Identification Report
For the Period Ended mm/dd/yyyy DRAFT / EXAMPLE
Process Date: mm/dd/yyyy
Printed: mm/dd/yyyy hh:mm xm
Identification
Legal Entity Asset Type Group # Description Asset Number Asset Year Manufacturer Model Sale Date Proceeds
------------ ---------- -------------- ----------- ------------ ---------- ------------ ----- --------- --------
DRAC Autos IDyyyy-nnnnn Relinquished
nnnnnnnnn yyyyMfrName0 Model0 mm/dd/yyyy $ nn,nnn.
Identified
Replacements
yyyyMfrName1 Model1
yyyyMfrName2 Model2
yyyyMfrName3 Model3
IDyyyy-nnnnn Relinquished
nnnnnnnnn yyyyMfrName0 Model0 mm/dd/yyyy $ nn,nnn.
Identified
Replacements
yyyyMfrName1 Model1
yyyyMfrName2 Model2
yyyyMfrName3 Model3
Signature Section
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxx /s/ Xxxxx X. Xxxx
------------------------------- ----------------------------------- -------------------------------
For Dollar Rent A Car For Thrifty Rent A Car For RCFC
Exhibit 4.2(d)
Until further notice to the contrary, each of RCFC, Dollar, and
Thrifty revokes any assignment to the Qualified Intermediary of its rights with
respect to any agreement relating to the acquisition of:
Any vehicle categorized as a "shuttle bus" in the records of RCFC, Dollar, or
Thrifty.
Any vehicle acquired prior to August 1, 2001.
EXHIBIT 5.2
Exchange Accounts
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Rental Car Finance Corp. (DOL THR ACQ)
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Rental Car Finance Corp. (DOL FIN)
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Rental Car Finance Corp. (THR FIN)
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Dollar Rent A Car Systems, Inc. (DOL NS)
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Thrifty Rent-A-Car System, Inc. (THR NS)
Disbursement Accounts
Disbursement Clearing Accounts:
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Rental Car Finance Corp. (ACQ)
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Rental Car Finance Corp. (DOL FIN)
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Rental Car Finance Corp. (THR FIN)
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Dollar Rent A Car Systems, Inc. (DOL NS)
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Thrifty Rent-A-Car System, Inc. (THR NS)
Disbursement Checking Accounts:
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Rental Car Finance Corp. (DOL ACQ)
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Rental Car Finance Corp. (THR ACQ)
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Rental Car Finance Corp. (DOL FIN)
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Rental Car Finance Corp. (THR FIN)
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Dollar Rent A Car Systems, Inc. (DOL NS)
VEXCO, LLC Exchange Acct., Chicago Trust Company, Trustee FBO
Thrifty Rent-A-Car System, Inc. (THR NS)
EXHIBIT 5.7
Contact information for person to be notified if there is a Shortfall Account:
Rental Car Finance Corp.
Xxxxxx X. Xxxx, Vice President and Treasurer
0000 Xxxx 00xx Xxxxxx
Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxx@xxxx.xxx
Dollar Rent A Car Systems, Inc.
Xxxxxxx X. XxXxxxx, Treasurer
0000 Xxxx 00xx Xxxxxx
Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxxxx@xxxx.xxx
Thrifty Rent-A-Car System, Inc.
Xxxxxx X. Xxxx, Treasurer
0000 Xxxx 00xx Xxxxxx
Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxx@xxxx.xxx
EXHIBIT 5.9
Negotiable instruments or securities maturing on or before the Payment
Date (as defined below) next occurring after the investment therein, represented
by instruments in bearer, registered or book-entry form which evidence (i)
obligations the full and timely payment of which are to be made by or are fully
guaranteed by the United States of America; (ii) demand deposits of, time
deposits in, or certificates of deposit issued by, any depositary institution or
trust company incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by Federal or state
banking or depositary institution authorities; provided, however, that at the
earlier of (x) the time of the investment and (y) the time of the contractual
commitment to invest therein, the certificates of deposit or short-term
deposits, if any, or long-term unsecured debt obligations (other than such
obligations whose rating is based on collateral or on the credit of a person
other than such institution or trust company) of such depositary institution or
trust company shall have a credit rating from Standard & Poor's, a division of
the XxXxxx-Xxxx Companies ("Standard & Poor") of "A-1+", from Xxxxx'x Investor
Services ("Moody's") of "P-1", and from Fitch, Inc. ("Fitch") of "F1+" (if rated
by Fitch), in the case of certificates of deposit or short-term deposits, or a
rating from Standard & Poor's of at least "AAA", from Moody's of at least "Aaa",
and from Fitch of at least "AAA" (if rated by Fitch), in the case of long-term
unsecured debt obligations; (iii) commercial paper having, at the earlier of (x)
the time of the investment and (y) the time of contractual commitment to invest
therein, a rating from Standard & Poor's of "A-1+", from Moody's of "P-1" and
from Fitch of "F1+" (if rated by Fitch); (iv) demand deposits or time deposits
which are fully insured by the Federal Deposit Insurance Company; (v) bankers'
acceptances which are U.S. Dollar denominated issued by any depositary
institution or trust company described in clause (ii) above; (vi) investments in
money market funds having a rating from Standard & Poor's of at least "AAAm" or
otherwise approved in writing by Standard & Poor's, at least "Aaa" by Moody's or
otherwise approved in writing by Moody's and rated at least "AA" by Fitch (if
rated by Fitch); and (vii) Eurodollar time deposits having a credit rating from
Standard & Poor's of "A-1+", from Moody's of "P-1" and from Fitch of at least
"F1+" (if rated by Fitch).
For purposes of this Exhibit 5.9, "Payment Date" shall mean the 25th
day of each calendar month, or, if such day is not a Business Day, the next
succeeding Business Day, commencing April 25, 2001.
EXHIBIT 8.8
Rental Car Finance Corp.
Xxxxxx X. Xxxx, Vice President and Treasurer
0000 Xxxx 00xx Xxxxxx
Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxx@xxxx.xxx
Dollar Rent A Car Systems, Inc.
Xxxxxxx X. XxXxxxx, Treasurer
0000 Xxxx 00xx Xxxxxx
Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxxxxx@xxxx.xxx
Thrifty Rent-A-Car System, Inc.
Xxxxxx X. Xxxx, Treasurer
0000 Xxxx 00xx Xxxxxx
Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Email: xxxxx@xxxx.xxx
VEXCO, LLC and Chicago Deferred Exchange Corporation
Xxxx Xxxxxxxxxx
Chicago Deferred Exchange Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Email: Xxxxxxxxxxx@XxxxxxxXxxxxxxx.xxx
The Chicago Trust Company
B. Xxxxxxxxx Xxxxxxxxxx, Xx., Executive Vice President
The Chicago Trust Company
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Email: Xxxxxxxxxxx@XxxxxxxXxxxxxxx.xxx
