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EXHIBIT 4.13
[EXECUTION COPY]
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
dated as of March 4, 1998
among
RENTAL CAR FINANCE CORP.
as Lessor,
THRIFTY RENT-A-CAR-SYSTEM, INC.,
as Lessee and Servicer,
DOLLAR RENT A CAR SYSTEMS, INC.,
as Lessee and Servicer,
and those Subsidiaries of
Dollar Thrifty Automotive Group, Inc.
from time to time
becoming Lessees and Servicers hereunder
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
as Guarantor and Master Servicer
AS SET FORTH IN SECTION 21 HEREOF, LESSOR HAS ASSIGNED TO THE TRUSTEE (AS
DEFINED HEREIN) ALL OF LESSOR'S RIGHT, TITLE AND INTEREST IN AND TO THIS LEASE.
TO THE EXTENT, IF ANY, THAT THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM
IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE
JURISDICTION), NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE
TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED
COUNTERPART NO. 1, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE
RECEIPT THEREFOR EXECUTED BY THE TRUSTEE ON THE SIGNATURE PAGE THEREOF.
[THIS IS NOT THE ORIGINAL EXECUTED COUNTERPART NO. 1]
[THIS IS THE ORIGINAL EXECUTED COUNTERPART NO. 1
(IF BEARING ORIGINAL SIGNATURES)]
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TABLE OF CONTENTS
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SECTION 1. CERTAIN DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Accounting and Financial Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3. Cross References; Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2. GENERAL AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.1. Leasing of Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.2. Right of Lessees to Act as Lessor's Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.3. Payment of Purchase Price by Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.4. Non-liability of Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.1. Vehicle Lease Commencement Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.2. Lease Commencement Date; Lease Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.1. Conditions to Each Lease of Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.1.1 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.1.2 Limitations of the Acquisition of Certain Vehicles . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5. RENT AND CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.1. Payment of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.2. Payment of Availability Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.3. Payment of Monthly Supplemental Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.4. Payment of Termination Payments, Casualty Payments, and Late Return Payments . . . . . . . . . 9
Section 5.5. Late Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 6. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.1. Fleet Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.2. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 7. CASUALTY OBLIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 8. VEHICLE USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 10. MAINTENANCE AND REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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SECTION 11. VEHICLE WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 12. VEHICLE USAGE REQUIREMENTS AND DISPOSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 12.1. Usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 12.2. Disposition Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 12.3. Termination Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 13. LATE RETURN PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 14. REDESIGNATION OF VEHICLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 15. GENERAL INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 15.1. Indemnity of the Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 15.2. Indemnification of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 15.3. Reimbursement Obligation by the Lessees . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 15.4. Notice to Lessee of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 15.5. Defense of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 16. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 17. DEFAULT AND REMEDIES THEREFOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 17.1. Lease Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 17.2. Effect of Lease Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 17.3. Rights of Lessor Upon Lease Event of Default, Liquidation Event of Default or Limited
Liquidation Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 17.4. Rights of Trustee Upon Liquidation Event of Default, Limited Liquidation Event of Default,
Manufacturer Event of Default and Non-Performance of Certain Covenants . . . . . . . . . 20
Section 17.5. Measure of Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 17.6. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 18. MANUFACTURER EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 20. SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL AGENT AND TRUSTEE . . . . . . . . . . . . . . . . . . . . 24
SECTION 22. MODIFICATION AND SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 23.1. Due Organization, Authorization, No Conflicts, Etc. . . . . . . . . . . . . . . . . . . . . . 26
Section 23.2. Financial Information; Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 23.3. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 23.4. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 23.5. Necessary Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 23.6. Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 23.7. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 23.8. Regulations G, T, U and X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 23.9. Business Locations; Trade Names; Principal Places of Business Locations . . . . . . . . . . . 28
Section 23.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 23.11. Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 23.12. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 23.13. Eligible Vehicles; Eligible Franchisees . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 23.14. Supplemental Documents True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 24. CERTAIN AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 24.1. Corporate Existence; Foreign Qualification . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 24.2. Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 24.3. Vehicle Disposition Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 24.4. Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 24.5. Taxes and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 24.6. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 24.7. Maintenance of Separate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 24.8. Master Collateral Agent as Lienholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 24.9. Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 24.10. Access to Certain Documentation and Information Regarding the Collateral . . . . . . . . . . 36
SECTION 24.11. Maintenance of Credit Enhancement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 24.12. Certain Additional Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 24.13. Minimum Depreciation Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 25. CERTAIN NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 25.1. Mergers, Consolidations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 25.2. Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 25.3. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 25.4. Use of Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 26. SERVICING COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 27. GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 27.1. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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Section 27.2. Scope of Guarantor's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 27.3. Lessor's Right to Amend this Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 27.4. Waiver of Certain Rights by Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 27.5. Lessees' Obligations to Guarantor and Guarantor's Obligations to Lessees Subordinated . . . . 43
Section 27.6. Guarantor to Pay Lessor's Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 27.7. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 27.8. Pari Passu Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 27.9. Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 28. ADDITIONAL LESSEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 28.1. Additional Lessees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 29. BANKRUPTCY PETITION AGAINST LESSOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 30. SUBMISSION TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 31. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 32. JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 33. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 34. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 35. EXECUTION IN COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 36. EFFECTIVENESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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SCHEDULES AND ATTACHMENTS
Annex A Operating Lease
Annex B Financing Lease
Schedule 1 Litigation Claims
Schedule 2 [Reserved]
Schedule 3 Business Locations
Schedule 4 Liens
ATTACHMENT A-1 Information on Refinanced Vehicles and Eligible Receivables
ATTACHMENT A-2 Vehicle Acquisition Schedule
ATTACHMENT B Form of Power of Attorney
ATTACHMENT C Form of Certification of Trade or Business Use
ATTACHMENT D Form of Affiliate Joinder in Lease
ATTACHMENT E Form of Annual Certificate
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MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
This Master Motor Vehicle Lease and Servicing Agreement (the "Base Lease"
and, as supplemented by the Lease Annexes, this "Agreement" or "Lease"), dated
as of March 4, 1998, is by and among RENTAL CAR FINANCE CORP., a special
purpose Oklahoma corporation (the "Lessor" or "RCFC"), DOLLAR RENT A CAR
SYSTEMS, INC., an Oklahoma corporation ("Dollar"), as lessee and servicer,
THRIFTY RENT-A-CAR SYSTEM, INC., an Oklahoma corporation ("Thrifty"), as lessee
and servicer, and those Subsidiaries of DTAG (as defined below) from time to
time becoming Lessees hereunder pursuant to Section 28 hereof (each, an
"Additional Lessee"), as lessee and servicer (Thrifty, Dollar, and the
Additional Lessees, in their respective capacities as lessees, each a "Lessee"
and, collectively, the "Lessees", and, in their respective capacities as
servicers, each a "Servicer" and, collectively, the "Servicers"), and DOLLAR
THRIFTY AUTOMOTIVE GROUP, INC., a Delaware corporation ("DTAG"), as Master
Servicer (in such capacity, the "Master Servicer") and as Guarantor (in such
capacity, the "Guarantor").
W I T N E S S E T H:
WHEREAS, the Lessor (such capitalized term, together with all other
capitalized terms used herein, shall have the meaning assigned thereto in
Section 1) intends to purchase, finance and refinance the purchase of, Eligible
Vehicles from one or more Manufacturers with the proceeds obtained from the
issuance by the Lessor of its Rental Car Asset Backed Variable Funding Notes,
Series 1998-1, pursuant to the Base Indenture and the Series 1998-1 Supplement
thereto referred to below and any additional Series of Notes identified in the
related Series Supplement as a Group II Series of Notes; and
WHEREAS, the Lessor desires to lease to the Lessees, and the Lessees desire
to lease from the Lessor, Eligible Vehicles for use in the Lessees' respective
businesses, including subleasing Vehicles to Eligible Franchisees;
NOW, THEREFORE, in consideration of the foregoing premises, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties hereto hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
Section 1.1. Certain Definitions. As used in this Lease and unless the
context requires a different meaning, capitalized terms not otherwise defined
herein shall have the meanings assigned to such terms in (a) the Series 1998-1
Supplement, dated as of March 4, 1998, between RCFC, as issuer, and Bankers
Trust Company, a New York banking corporation, as trustee (in such capacity,
the "Trustee") (as such Series 1998-1 Supplement may be amended, amended and
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restated, supplemented or otherwise modified from time to time in accordance
with the terms thereof, the "Series 1998-1 Supplement"), to the Base Indenture,
dated as of December 13, 1995, between RCFC and the Trustee, as amended by
Amendment to Base Indenture, dated as of December 23, 1997, between RCFC and
the Trustee (as amended by such amendment and as the same may be further
amended, amended and restated, supplemented or otherwise modified from time to
time in accordance with the terms thereof, the "Base Indenture") and any
additional Series Supplement to the Base Indenture relating to a Series of
Notes identified in such Series Supplement as a Group II Series of Notes and
(b) the Definitions List attached as Schedule 1 to the Base Indenture as in
effect as of the date hereof (as such Definitions List may be amended, amended
and restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof, the "Definitions List"), provided, that any
capitalized term used but not defined herein and defined in each of the Series
1998-1 Supplement and the Definitions List shall have the meaning set forth in
the Series 1998-1 Supplement.
Section 1.2. Accounting and Financial Determinations. Where the character
or amount of any asset or liability or item of income or expense is required to
be determined, or any accounting computation is required to be made, for the
purpose of this Lease, such determination or calculation shall be made, to the
extent applicable and except as otherwise specified in this Lease, in
accordance with GAAP. When used herein, the term "financial statement" shall
include the notes and schedules thereto.
Section 1.3. Cross References; Headings. The words "hereof", "herein" and
"hereunder" and words of a similar import when used in this Lease shall refer
to this Lease as a whole and not to any particular provision of this Lease.
Annex, Section, Schedule and Exhibit references contained in this Lease are
references to Annexes, Sections, Schedules and Exhibits in or to this Lease
unless otherwise specified. Any reference in any Section or definition to any
clause is, unless otherwise specified, to such clause of such Section or
definition. The various headings in this Lease are inserted for convenience
only and shall not affect the meaning or interpretation of this Lease or any
provision hereof.
Section 1.4. Interpretation. In this Lease, unless the context otherwise
requires:
(a) the singular includes the plural and vice versa;
(b) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Lease, and reference to any Person in a particular
capacity refers only to such Person in such capacity;
(c) reference to any gender includes the other gender;
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(d) reference to any Requirement of Law means such Requirement of Law
as amended, modified, codified or reenacted, in whole or in part, and in
effect from time to time;
(e) "including" (and, with correlative meaning, "include") means
including without limiting the generality of any description preceding such
term;
(f) "or" is not exclusive;
(g) provisions apply to successive events and transactions; and
(h) with respect to the determination of any period of time, "from"
means "from and including" and "to" and "through" mean "to but excluding".
SECTION 2. GENERAL AGREEMENT. (a) As specified in the Lease Annexes, the
Lessees and the Lessor intend that this Lease be (i) an operating lease with
respect to the Acquired Vehicles and (ii) a financing arrangement with respect
to the Financed Vehicles.
(b) If, notwithstanding the intent of the parties to this Lease, this
Lease is deemed by any court, tribunal, arbitrator or other adjudicative
authority in any proceeding (each, a "Court") to constitute a financing
arrangement or otherwise not to constitute a "true lease" with respect to the
Acquired Vehicles, then it is the intention of the parties that this Lease
together with the Master Collateral Agency Agreement, as such agreements apply
to the Acquired Vehicles, shall constitute a security agreement under
applicable law, and it is the intention of the parties that this Lease together
with the Master Collateral Agency Agreement, as such agreements apply to the
Financed Vehicles, shall in all events constitute a security agreement under
applicable law. Each Lessee hereby acknowledges that it has granted to the
Master Collateral Agent, pursuant to the Master Collateral Agency Agreement,
for the benefit of the Trustee, a first priority security interest in all of
such Lessee's right, title and interest in and to the Lessee Grantor Master
Collateral (as defined therein) as collateral security for the prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of all of the obligations and liabilities of such
Lessee to the Lessor and the Trustee, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred
(including interest accruing after the Lease Expiration Date and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding), which may arise under, out
of, or in connection with, this Lease and any other document made, delivered or
given in connection herewith, whether on account of rent, principal, interest,
reimbursement obligations, fees, indemnities, costs, or expenses (including all
fees and disbursements of counsel to the Lessor or the Trustee that are
required to be paid by such Lessee pursuant to the terms hereof).
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Section 2.1. Leasing of Vehicles. Subject to the terms and conditions
hereof, the Lessor agrees to lease to each Lessee and each Lessee agrees to
lease from the Lessor Vehicles in the Existing Fleet, as applicable, and each
additional Acquired Vehicle or Financed Vehicle identified in Vehicle order
summaries (each, a "Vehicle Order") produced from time to time by such Lessee,
listing Eligible Vehicles ordered by the Lessee for itself or as agent for the
Lessor, pursuant to the terms of any applicable Eligible Vehicle Disposition
Programs or otherwise. The Lessor shall, subject to Section 4 and to
compliance with the terms of the Indenture, make available to the Lessees under
this Lease financing for Financed Vehicles (other than Texas Vehicles) in an
aggregate amount, and Acquired Vehicles and Texas Vehicles for lease to the
Lessees hereunder in an aggregate Net Book Value, which collectively shall not
exceed the Maximum Lease Commitment. The applicable Lessee shall make
available to the Lessor (a) in the case of (i) any lease of Vehicles in the
Existing Fleet, (ii) the refinancing of any other Eligible Vehicle pursuant to
Section 2.3 of the Master Collateral Agency Agreement (collectively, together
with any Vehicles in the Existing Fleet to be leased under the Master Lease
(including, without limitation, any Vehicles previously subject to any other
Master Lease and refinanced pursuant to the Master Lease), "Refinanced
Vehicles"), and/or (iii) the refinancing of Eligible Receivables, a schedule as
set forth in Attachment A-1 hereto containing information concerning the
Refinanced Vehicles and the Eligible Receivables of a scope agreed upon by the
Lessor and such Lessee (a "Refinancing Schedule") , and (b) in the case of all
other Vehicles, a schedule containing the information with respect to the
Vehicles included within the Vehicle Order for such Vehicle as is set forth in
Attachment A-2 hereto, or in such form as is otherwise requested by the Lessor
(each, a "Vehicle Acquisition Schedule"). In addition, each Lessee shall
provide such other information regarding such Vehicles as the Lessor may
reasonably require from time to time. The Lessor shall lease to the Lessees,
and the Lessees shall lease from the Lessor, only Vehicles that are Eligible
Vehicles. This Lease, together with the Vehicle Disposition Programs and other
incentive programs relating to the Vehicles and any other related documents
attached to this Lease or submitted with a Vehicle Order or Refinancing
Schedule (collectively, the "Supplemental Documents"), will constitute the
entire agreement regarding the leasing of Vehicles by the Lessor to the
Lessees.
Section 2.2. Right of Lessees to Act as Lessor's Agent. The Lessor agrees
that each Lessee may act as the Lessor's agent in placing Vehicle Orders on
behalf of the Lessor, as well as filing claims on behalf of the Lessor for
damage in transit, and other delivery related claims with respect to the
Vehicles leased hereunder; provided, however, that the Lessor may hold the
applicable Lessee liable for such Lessee's actions in performing as the
Lessor's agent hereunder. In addition, the Lessor agrees that each Lessee may
make arrangements for delivery of Vehicles to a location selected by such
Lessee at such Lessee's expense. Each Lessee or any related Sublessee, as
applicable, may accept or reject Eligible Vehicles upon delivery in accordance
with such Lessee's customary business practices, and any Eligible Vehicle, if
rejected, will be deemed a Casualty hereunder. The applicable Lessee, acting
as agent for the Lessor, shall be responsible for pursuing any rights of the
Lessor with respect to the return of any Eligible Vehicle to the Manufacturer
thereof, or the applicable auction or dealer, as applicable, pursuant to the
preceding
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sentence. Each Lessee agrees that all vehicles ordered as provided herein
shall be Eligible Vehicles and shall be ordered utilizing the procedures
consistent with the applicable Vehicle Disposition Program or any guidelines of
the Manufacturer, auction or dealer, as applicable, for the ordering or
purchasing of Non-Program Vehicles, in each case as and to the extent
applicable.
Section 2.3. Payment of Purchase Price by Lessor. Upon receipt of the
Manufacturer's invoice and certificate of origin in respect of any new Vehicle,
or such other customary documentation in respect of any used Vehicle, the
Lessor or its agent shall pay or cause to be paid to the auction, the dealer or
the related Manufacturer, as applicable, the costs and expenses incurred in
connection with the acquisition of such Vehicle under the applicable Vehicle
Disposition Program (in the case of a Program Vehicle) or otherwise (in the
case of a Non-Program Vehicle) as established by the invoice of the auction,
the dealer or the Manufacturer, as the case may be (the "Initial Acquisition
Cost"), for such Vehicle and the applicable Lessee shall pay all applicable
costs and expenses of freight, packing, handling, storage, shipment and
delivery of such Vehicle to the extent that the same have not been included
within the Initial Acquisition Cost; provided that solely in the case of any
Vehicle in the Existing Fleet, any other Refinanced Vehicle, and any Eligible
Receivable, the Lessor shall pay to the Master Collateral Agent (x) the
aggregate Net Book Value as of the Vehicle Lease Commencement Date of the
Existing Fleet Vehicles, and/or the Refinanced Vehicles, as applicable, and
(y) the face amount of the Eligible Receivables being refinanced on the Vehicle
Lease Commencement Date.
Section 2.4. Non-liability of Lessor. The Lessor shall not be liable to a
Lessee for any failure or delay in obtaining Vehicles or making delivery
thereof. AS BETWEEN THE LESSOR AND THE LESSEES, ACCEPTANCE FOR LEASE OF THE
VEHICLES SHALL CONSTITUTE THE APPLICABLE LESSEE'S ACKNOWLEDGMENT AND AGREEMENT
THAT THE APPLICABLE LESSEE HAS FULLY INSPECTED SUCH VEHICLES, THAT THE VEHICLES
ARE IN GOOD ORDER AND CONDITION AND ARE OF THE MANUFACTURE, DESIGN,
SPECIFICATIONS AND CAPACITY SELECTED BY SUCH LESSEE, THAT SUCH LESSEE IS
SATISFIED THAT THE SAME ARE SUITABLE FOR ITS USE AND THAT THE LESSOR IS NOT A
MANUFACTURER, AN AGENT OF THE MANUFACTURER OR OTHERWISE ENGAGED IN THE SALE OR
DISTRIBUTION OF VEHICLES, AND HAS NOT MADE AND DOES NOT HEREBY MAKE ANY
REPRESENTATION, WARRANTY OR COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO
MERCHANTABILITY, CONDITION, QUALITY, CAPABILITY, WORKMANSHIP, DURABILITY OR
SUITABILITY OF SUCH VEHICLES IN ANY RESPECT OR IN CONNECTION WITH OR FOR THE
PURPOSES OR USES OF SUCH LESSEE, OR ANY WARRANTY THAT THE LEASED VEHICLES WILL
SATISFY THE REQUIREMENTS OF ANY LAW OR ANY CONTRACT SPECIFICATION, OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, WITH RESPECT THERETO, AND AS BETWEEN THE LESSOR AND SUCH LESSEE, SUCH
LESSEE AGREES TO BEAR ALL SUCH RISKS AT ITS SOLE COST AND EXPENSE. EACH LESSEE
SPECIFICALLY WAIVES ALL
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RIGHTS TO MAKE CLAIMS AGAINST THE LESSOR AND ANY LEASED VEHICLE FOR BREACH OF
ANY WARRANTY OF ANY KIND WHATSOEVER AND, AS TO THE LESSOR, AND EACH LESSEE
LEASES THE LEASED VEHICLES "AS IS." The Lessor shall not be liable for any
failure or delay in delivering any Vehicle ordered for lease pursuant to this
Lease, or for any failure to perform any provision hereof, resulting from fire
or other casualty, natural disaster, riot, strike or other labor difficulty,
governmental regulation or restriction, or any cause beyond the Lessor's direct
control. IN NO EVENT SHALL THE LESSOR BE LIABLE FOR ANY INCONVENIENCES, LOSS
OF PROFITS OR ANY OTHER CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES,
WHATSOEVER OR HOWSOEVER CAUSED, WHETHER RESULTING FROM ANY DEFECT IN OR ANY
THEFT, DAMAGE, LOSS OR FAILURE OF ANY VEHICLE, OR OTHERWISE, AND THERE SHALL BE
NO ABATEMENT OF RENT BECAUSE OF THE SAME.
SECTION 3. TERM.
Section 3.1. Vehicle Lease Commencement Date. The "Vehicle Lease
Commencement Date" shall mean, for each Vehicle, the earlier of (a) the date
referenced in the Vehicle Acquisition Schedule or Refinancing Schedule with
respect to such Vehicle, and (b) the date that funds are expended by the Lessor
to acquire or finance the acquisition of such Vehicle (with respect to such
Vehicle, the "Vehicle Funding Date"). A vehicle shall be deemed hereunder to
be a Vehicle leased under this Lease on each day during the period (the
"Vehicle Term") from and including the Vehicle Lease Commencement Date to but
excluding the Vehicle Lease Expiration Date.
Section 3.2. Lease Commencement Date; Lease Expiration Date. The "Lease
Commencement Date" shall mean the Closing Date for the Series 1998-1 Notes as
the first Group II Series of Notes issued under the Indenture. The "Lease
Expiration Date" shall mean the later of (i) the date of the payment in full of
all Series of Notes included in the Group II Series of Notes and all
outstanding Carrying Charges related thereto, and (ii) the Vehicle Lease
Expiration Date for the last Vehicle subject to lease by a Lessee hereunder.
The "Term" of this Lease shall mean the period commencing on the Lease
Commencement Date and ending on the Lease Expiration Date.
SECTION 4. CONDITIONS PRECEDENT
Section 4.1. Conditions to Each Lease of Vehicles. The agreement of the
Lessor to make available (a) any Acquired Vehicle for lease to the applicable
Lessee, (b) Texas Vehicles and (c) financing for the acquisition of or
refinancing of any other Financed Vehicle for lease to such Lessee upon such
Lessee's placement of a Vehicle Order, for itself or as agent of the Lessor, or
its delivery of a Refinancing Schedule, as applicable, is subject to the terms
and conditions of the Indenture and subject to the satisfaction of the
following conditions precedent as of the Vehicle Lease Commencement Date for
such Vehicle:
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Section 4.1.1 No Default. No Lease Event of Default or Amortization Event
shall have occurred and be continuing on such date or would result from the
leasing of such Vehicle or Vehicles.
Section 4.1.2 Limitations of the Acquisition of Certain Vehicles. After
giving effect to the inclusion of such Vehicle under this Lease, there shall
not be a failure or violation of any of the conditions, requirements, or
restrictions specified in any related Series Supplement with respect to the
leasing of Eligible Vehicles under this Lease.
Section 4.1.3 Vehicle Order. The applicable Lessee shall have complied
with the applicable provisions of Section 2.1 of this Lease.
Section 4.1.4 Funding. The aggregate amount of funds to be expended by
the Lessor on any one date to acquire or finance the acquisition of any
Vehicles shall not exceed the sum of (a) the aggregate Net Book Value of all
such Vehicles plus (b) the aggregate face amount of any related Eligible
Receivables being refinanced on such date.
Section 4.1.5 Maximum Non-Program Percentage. The leasing of such
Vehicles will not cause the aggregate Net Book Value of Non-Program Vehicles
then being leased under this Lease to exceed the Maximum Non-Program Percentage
and will not cause any of the Lease commitments expressed in Section 3 of each
of Annex A and B to be exceeded.
Section 4.1.6 Eligible Vehicle. Each Vehicle to be leased hereunder on
such date shall be an Eligible Vehicle.
Section 4.2 Additional Conditions to Leases of Refinanced Vehicles. In
addition to the conditions set forth in Section 4.1 above, in connection with
the leasing of Refinanced Vehicles and related Eligible Receivables, to
evidence the refinancing of such Refinanced Vehicles and related Eligible
Receivables on the applicable Vehicle Lease Commencement Date and the
conveyance on such date of a security interest in such Refinanced Vehicles and
related Eligible Receivables to the Master Collateral Agent, the applicable
Lessees shall have made available to the Lessor on or prior to the applicable
Vehicle Lease Commencement Date the following:
(a) a Refinancing Schedule concerning such Refinanced Vehicles and
related Eligible Receivables being refinanced on such Vehicle Lease
Commencement Date;
(b) a report of the results of a search of the appropriate records of
the principal place in which each Lessee of such Refinanced Vehicles does
business and the county and state in which each Lessee's principal office
is located, which shall show no liens or other security interests (other
than Permitted Liens) with respect to such Vehicles and the related Vehicle
Disposition Programs (to the extent not already liened and assigned to the
Master Collateral Agent) or, in the event that such search reveals any such
non-permitted
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Lien or security interest, there shall be delivered to the Trustee a
termination of such Lien or security interest together with appropriate UCC
termination statements or UCC partial releases thereof;
(c) confirmation from each lender holding a security interest in any
Refinanced Vehicle and Eligible Receivable stating unconditionally (A)
that, if any sums are to be paid to such lender in connection with the
lease of such Refinanced Vehicle and the refinancing of the related
Eligible Receivables, such lender has been paid the full amount due to it
in connection with such refinancing and (B) that any lien or security
interest of such lender in such Refinanced Vehicle and related Eligible
Receivable has been released;
(d) a fully executed assignment agreement granting and assigning to
the Master Collateral Agent (to the extent not already granted and
assigned) a first priority security interest in each such Refinanced
Vehicle and any Eligible Receivables, the related Vehicle Disposition
Programs, if any, and any other Master Lease Collateral relating to such
Refinanced Vehicles and Eligible Receivables;
(e) with respect to any of such Refinanced Vehicles which are in the
Existing Fleet, each Lessee thereof shall have delivered to the Master
Collateral Agent a duly executed Assignment Agreement satisfactory in form
to the Lessor and the Trustee;
(f) delivery to the Lessor for filing in the appropriate filing
office fully executed UCC-1 Financing Statements necessary to perfect (if
not already perfected) the interests of the Master Collateral Agent in the
Eligible Receivables;
(g) an Officer's Certificate stating that all the conditions
precedent under this Lease to the leasing of such Refinanced Vehicles and
financing of the Eligible Receivables under this Lease have been satisfied,
including a representation that each such receivable is an Eligible
Receivable.
SECTION 5. RENT AND CHARGES. Each Lessee will pay Rent and certain other
charges on a monthly basis as set forth in this Section 5:
Section 5.1. Payment of Rent. On each Due Date, each Lessee shall pay to
the Lessor the aggregate of all Rent that has accrued during the Related Month
with respect to the Vehicles leased by such Lessee, as provided in the related
Lease Annexes.
Section 5.2. Payment of Availability Payment. On each Due Date, each
Lessee shall pay to the Lessor its allocable share of the Availability Payment
in respect of the unutilized portion of the Maximum Lease Commitment.
"Availability Payment" with respect to each Due Date
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shall equal the excess, if any, of (I) the sum of (a) the aggregate interest
due on all Outstanding Notes included in the Group II Series of Notes as of the
Payment Date next succeeding such Due Date, plus (b) an amount equal to all
Carrying Charges for the Related Month allocable to any Group II Series of
Notes, over (II) the sum of (a) any Monthly Variable Rent due on such Due Date,
(b) any Monthly Finance Rent due on such Due Date, and (c) any earnings on
Permitted Investments allocated to any Group II Series of Notes (less any
portion thereof allocated to the Retained Interestholder) accruing through the
Determination Date occurring prior to such Due Date and not included in the
calculation of Availability Payments with respect to any prior Due Date.
Section 5.3. Payment of Monthly Supplemental Payments. On each Due Date,
each Lessee shall pay to the Lessor the Monthly Supplemental Payments that have
accrued during the Related Month with respect to the Financed Vehicles leased
hereunder by such Lessee, as provided in Sections 6 and 7 of Annex B.
Section 5.4. Payment of Termination Payments, Casualty Payments, and Late
Return Payments. On each Due Date, each Lessee shall pay to the Lessor all
Termination Payments, Casualty Payments and Late Return Payments that have
accrued with respect to the Acquired Vehicles leased hereunder by such Lessee,
as provided in Sections 7, 12.3 and 13, respectively.
Section 5.5. Late Payment. In the event a Lessee fails to remit payment
of any amount due under this Lease on or before the Due Date, the amount not
paid will be considered delinquent and such Lessee will pay a late charge equal
to the product of (a) the VFR plus 1%, times (b) the delinquent amount for the
period from the Due Date to the date on which such delinquent amount is
received by the Trustee, times (c) the actual number of days elapsed during
such period divided by 360.
SECTION 6. INSURANCE.
Section 6.1. Fleet Insurance. Each Lessee shall at all times maintain or
cause to be maintained, with financially sound and reputable insurers, (a)
personal injury and damage insurance with respect to the Vehicles leased by
such Lessee hereunder, and (b) insurance with respect to properties and
business against loss or damage of the kinds customarily insured against by
corporations of established reputation engaged in the same or similar
businesses and similarly situated, of such types and in such amounts as are
customarily carried under similar circumstances by such other corporations.
Each Lessee may, in lieu of maintaining such insurance with insurers,
self-insure.
Section 6.2. Information. Each Lessee shall, from time to time upon the
Lessor's or the Trustee's reasonable request, deliver to the Lessor and the
Trustee copies of certificates describing all insurance required by Section 6.1
which is then in effect.
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SECTION 7. CASUALTY OBLIGATION. If a Vehicle becomes a Casualty, then the
applicable Lessee shall (a) promptly notify the Lessor of such occurrence, and
(b) in the case of an Acquired Vehicle, on the Due Date next succeeding the
last day of the Related Month in which the Lessee obtains actual knowledge that
such Vehicle has become a Casualty, pay to the Lessor an amount (a "Casualty
Payment") equal to the Net Book Value of such Vehicle, calculated as of the
earlier of the last day of such Related Month and the date such vehicle is
disposed of or becomes a Casualty, as applicable. Upon payment by the
applicable Lessee to the Lessor in accordance herewith of the Casualty Payment
for any Acquired Vehicle that has become a Casualty, (i) the Lessor shall cause
title to such Vehicle to be transferred to such Lessee to facilitate
liquidation of such Vehicle by such Lessee, (ii) such Lessee shall be entitled
to any physical damage insurance proceeds applicable to such Acquired Vehicle
(if at such time such Lessee carries such insurance coverage), and (iii) the
Lien of the Master Collateral Agent on such Vehicle shall be released thereby.
SECTION 8. VEHICLE USE. So long as no Lease Event of Default, Liquidation
Event of Default or Series 1998-1 Limited Liquidation Event of Default has
occurred, the Lessees may use Vehicles leased hereunder in the regular course
of their respective businesses, including subleasing such Vehicles to Eligible
Franchisees pursuant to Lessee Agreements, including Subleases, used in the
ordinary course of Lessees' businesses. Notwithstanding any such Lessee
Agreement, the applicable Lessee shall remain fully liable for its obligations
under this Lease and the other Related Documents (including any obligation
hereunder or thereunder that it may cause any Franchisee to perform or
fulfill). Each Lessee shall cause all payments under the Lessee Agreements, to
the extent such payments relate to vehicles comprising the Master Collateral,
to be deposited directly into the Master Collateral Account, and upon the
occurrence and during the continuance of a Lease Event of Default, Liquidation
Event of Default or Series 1998-1 Limited Liquidation Event of Default, the
Master Servicer shall promptly specify to the Master Collateral Agent the
allocation of such payments among Financing Sources. Vehicle use shall be
confined primarily to the United States, with limited use outside the United
States; provided, however, that the principal place of business or rental
office of the Eligible Franchisee with respect to any Vehicles used outside the
United States shall be located in the United States. Each Lessee shall
promptly and duly execute, deliver, file and record all such documents,
statements, filings and registrations, and take such further actions as the
Lessor, the Master Collateral Agent, the Master Servicer or the Trustee shall
from time to time reasonably request in order to establish, perfect and
maintain the Lessor's title to and interest in the Acquired Vehicles and the
related Certificates of Title as against such Lessee or any third party in any
applicable jurisdiction and to establish, perfect and maintain the Master
Collateral Agent's Lien on the Vehicles and the related Certificates of Title
(other than recordation of liens with respect to the Existing Fleet) as a
perfected lien in any applicable jurisdiction. Each Lessee may, at such
Lessee's sole expense, change the place of principal location of any Vehicles.
After any such change of location, the applicable Lessee shall take all actions
necessary (i) to maintain the Lien of the Master Collateral Agent on such
Vehicles and the Certificates of Title with respect to such Vehicles (other
than recordation of liens with respect to the Existing Fleet), and (ii) to meet
or
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obtain all material legal requirements applicable to such Vehicles. Following
a Lease Event of Default or Manufacturer Event of Default, and upon the
Lessor's request, each Lessee shall advise the Lessor in writing where all
Vehicles leased by such Lessee hereunder as of such date are principally
located. The Lessees shall not knowingly use any Vehicles, or knowingly permit
the same to be used, for any unlawful purpose. The Lessees shall and shall
require the related Franchisees to use reasonable precautions to prevent loss
or damage to Vehicles. The Lessees shall or shall cause the related
Franchisees to comply with all applicable statutes, decrees, ordinances and
regulations regarding acquiring, titling, registering, leasing, insuring and
disposing of Vehicles and shall or shall require such related Franchisees to
take reasonable steps to ensure that operators are licensed. The Lessees shall
or shall cause the related Franchisees to perform, at its or their own expense,
such vehicle preparation and conditioning services with respect to Vehicles as
are customary. The Lessor, the Master Collateral Agent or the Trustee or any
authorized representative of the Lessor, the Master Collateral Agent or the
Trustee may during reasonable business hours from time to time, without
disruption of the applicable Lessee's or the related Franchisee's business,
subject to applicable law, inspect Vehicles and registration certificates,
Certificates of Title and related documents covering Vehicles wherever the same
be located.
SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES.
Each Lessee, at its expense, shall be responsible for proper registration and
licensing of the Vehicles leased by it hereunder, and the titling of such
Vehicles in the name of the Lessor (in the case of Acquired Vehicles and Texas
Vehicles) or the Lessor or such Lessee, as applicable (in the case of Financed
Vehicles and Vehicles in the Existing Fleet), in each case with the Lien of the
Master Collateral Agent noted thereon (other than with respect to the Existing
Fleet), and where required, each Lessee shall or shall cause the related
Franchisees to have Vehicles inspected by any appropriate governmental
authority; provided, however, that notwithstanding the foregoing, unless a
Liquidation Event of Default shall have occurred and be continuing, possession
of all Certificates of Title shall remain with each Servicer of the related
Vehicles or the Master Servicer with such Certificates of Title to be held in
trust, as agent of and custodian for the Master Collateral Agent. Each Lessee
shall pay or cause to be paid all registration fees, title fees, license fees,
traffic summonses, penalties, judgments and fines incurred with respect to any
Vehicle leased hereunder by such Lessee during the Vehicle Term for such
Vehicle or imposed during the Vehicle Term for such Vehicle by any governmental
authority or any court of law or equity with respect to Vehicles in connection
with the Lessee's operation of Vehicles, and any such amounts paid by the
Lessor, in its discretion, on such Lessee's behalf will be reimbursed within
thirty (30) days of the Lessor notifying the Lessee of such payment. The
Lessor agrees to execute a power of attorney substantially in the form of
Attachment B hereto (a "Power of Attorney"), and such other documents as may be
necessary in order to allow each Lessee to title, register and dispose of the
Acquired Vehicles and Texas Vehicles leased by such Lessee hereunder; and each
Lessee acknowledges and agrees that with respect to the Acquired Vehicles, it
has no right, title or interest in or with respect to any
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Certificate of Title. Notwithstanding anything herein to the contrary, the
Lessor may terminate such Power of Attorney as provided in Section 17.3.
SECTION 10. MAINTENANCE AND REPAIRS. Each Lessee shall or shall cause the
related Franchisees, as applicable, to pay for all maintenance and repairs to
keep the Vehicles leased by such Lessee hereunder in good working order and
condition, and shall or shall cause such Franchisees to maintain such Vehicles
as required in order to keep the Manufacturer's warranty in force. Each Lessee
shall or shall cause the related Franchisees to return each Vehicle to an
authorized Manufacturer facility or the applicable Manufacturer's authorized
warranty station for warranty work. Each Lessee shall or shall cause the
related Franchisees to comply with any Manufacturer's recall of any Vehicle.
Each Lessee shall or shall cause the related Franchisees to pay, or cause to be
paid, all usual and routine expenses incurred in the use and operation of
Vehicles including, but not limited to, fuel, lubricants, and coolants. The
Lessor, upon thirty (30) days' prior written notice to the applicable Lessee,
may pay any such expenses that have not otherwise been paid by, or on behalf
of, such Lessee (including any failure by a related Franchisee to pay any such
expenses), and any expenses incurred by the Lessor on such Lessee's behalf for
maintenance, repair, operation or use of Vehicles by such Lessee will be
promptly reimbursed (in any event no later than the next monthly Due Date
following such payment) by such Lessee to the Lessor in the amount paid by the
Lessor. Each Lessee shall not make any material alterations to any Vehicles
without the prior consent of the Lessor. Any improvements or additions to any
Acquired Vehicle shall become and remain the property of the Lessor, except
that any addition or improvement to such a Vehicle made by a Lessee shall
remain the property of such Lessee if it can be disconnected or removed from
the Vehicle without impairing the functioning of or resale value thereof, other
than any function or value provided by such addition or improvement.
SECTION 11. VEHICLE WARRANTIES. If a Vehicle is covered by a
Manufacturer's warranty, the applicable Lessee and each related Franchisee,
during the Vehicle Term, shall have the right to make any claims under such
warranty which the Lessor could make. As provided in Section 2.4, the Lessor
makes no warranty or representation whatsoever, express or implied, with
respect to any Vehicle.
SECTION 12. VEHICLE USAGE REQUIREMENTS AND DISPOSITION.
Section 12.1. Usage. As used herein, the term "vehicle turn-in condition"
with respect to each Program Vehicle leased hereunder by a Lessee means a set
of criteria for evaluating Program Vehicles upon their delivery at the end of
the applicable Vehicle Terms, which criteria will be determined in accordance
with the related Vehicle Disposition Program. Each Program Vehicle leased
hereunder by a Lessee not meeting the applicable Vehicle Disposition Program's
vehicle turn-in condition requirements will, unless redesignated as a
Non-Program Vehicle in accordance with Section 14, be purchased by such Lessee
in accordance with the Casualty
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procedure set forth in Section 7 or otherwise disposed of in accordance with
the late delivery procedure set forth in Section 13, as applicable.
Section 12.2. Disposition Procedure. Prior to the end of the Vehicle
Term, each Lessee will or will cause the related Franchisee to deliver each
Program Vehicle leased hereunder by such Lessee (other than a Casualty) to the
nearest related Manufacturer official auction or other facility designated by
such Manufacturer at such Lessee's sole expense and in accordance with the
terms of the applicable Vehicle Disposition Program. Any transportation
allowance (for delivery costs) and any rebates or credits applicable to the
unexpired term of any license plates for a Vehicle shall inure to the benefit
of and, upon receipt thereof by the Lessor, the Trustee or the Master
Collateral Agent, shall promptly be paid over to the applicable Lessee. Each
Lessee will comply with the requirements of law and the requirements of the
Vehicle Disposition Programs in connection with, among other things, the
delivery of Certificates of Title, documents of transfer signed as necessary,
signed Condition Reports, and signed odometer statements for the Program
Vehicles.
Section 12.3. Termination Payments. On the Due Date next succeeding the
earlier of (a) the last day of the Related Month in which the Repurchase
Payment or the Guaranteed Payment, as the case may be, from a Manufacturer
pursuant to its Vehicle Disposition Program with respect to any Acquired
Vehicle that is a Program Vehicle, is received by the Lessor, the Master
Collateral Agent or the Trustee (including by deposit into the Collection
Account or the Master Collateral Account), and (b) the thirtieth (30th) day
after the expiration of the Maximum Term for such Vehicle, the Lessee that
leases such Vehicle hereunder shall pay to the Lessor in respect of such
Vehicle any Excess Damage Charges, Excess Mileage Charges, early turnback
surcharges and any other similar charges and penalties (collectively, a
"Program Vehicle Termination Payment") as determined by the Manufacturer or its
agent in accordance with the applicable Vehicle Disposition Program; and on the
Due Date next succeeding the earlier of (i) the last day of the Related Month
in which Disposition Proceeds from the sale or other disposition of an Acquired
Vehicle that is a Non-Program Vehicle, but is not a Casualty, are received by
the Lessor, the Master Collateral Agent or the Trustee (including by deposit
into the Collection Account or the Master Collateral Account), and (ii) the
thirtieth (30th) day after the date which is twenty- four (24) months after the
date of the original new dealer invoice for such Vehicle, the applicable Lessee
shall pay to the Lessor in respect of such Vehicle an amount (a "Non-Program
Vehicle Termination Payment") equal to the quotient of (x) the sum of all
Program Vehicle Termination Payments for the Related Month in respect of
Vehicles leased by such Lessee, divided by (y) the number of Acquired Vehicles
leased by such Lessee in respect of which such Program Vehicle Termination
Payments are payable (Program Vehicle Termination Payments and Non-Program
Vehicle Termination Payments being, collectively, "Termination Payments"). The
provisions of this Section 12.3 will survive the expiration or earlier
termination of the Term.
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SECTION 13. LATE RETURN PAYMENTS. If an Acquired Vehicle which is a
Program Vehicle is not returned to the Manufacturer or accepted by the
Manufacturer in accordance with the related Vehicle Disposition Program prior
to the expiration of the Maximum Term for such Vehicle in accordance with
Section 12.2, the Lessee of such Vehicle hereunder shall, unless such Vehicle
has been redesignated as a Non-Program Vehicle in accordance with Section 14,
(a) promptly notify the Lessor of its failure to return such Vehicle to the
Manufacturer or to sell such Vehicle in accordance with the applicable Auction
Procedures during the Vehicle Term, (b) use commercially reasonable efforts to
sell or otherwise dispose of such Vehicle in a manner reasonably likely to
maximize proceeds from such disposition and consistent with industry practice,
(c) cause the Disposition Proceeds, if any, from any such sale or disposition
to be paid to the Master Collateral Agent, in accordance with paragraph 10(d)
of Annex A, and (d) on the Due Date next succeeding the earlier of (i) the last
day of the Related Month in which such Disposition Proceeds are received by the
Lessor, the Master Collateral Agent or the Trustee (including by deposit into
the Collection Account or the Master Collateral Account), and (ii) the
thirtieth (30th) day after the expiration of the Maximum Term for such Vehicle,
pay to the Lessor an amount (a "Late Return Payment") equal to the excess of
(x) the Net Book Value of such Vehicle, calculated as of the first day of the
calendar month in which such Maximum Term expired reduced by the Depreciation
Charges accrued with respect to such Vehicle through the date such Maximum Term
expired, over (y) the dollar amount of such Disposition Proceeds (which Late
Return Payment amount may be equal to, but not less than, zero dollars). The
foregoing shall not affect the applicable Lessee's obligation to pay on the
related Due Date all Monthly Base Rent accrued with respect to each such
Vehicle through the date on which the Maximum Term for such Vehicle expires.
SECTION 14. REDESIGNATION OF VEHICLES. (a) Upon a Program Vehicle's
becoming ineligible for repurchase by its Manufacturer or for sale in
accordance with applicable Auction Procedures, due to physical damage, repair
charges or accrued mileage, in each case in excess of that permitted under the
related Vehicle Disposition Program, or due to any failure or inability to
return such Vehicle to the Manufacturer or the designated auction site prior to
the expiration of the Maximum Term, or due to any other event or circumstance,
the applicable Servicer may designate such Vehicle as a Non-Program Vehicle if
such Vehicle, as a Non-Program Vehicle, will be an Eligible Vehicle and if
either (a) such designation meets the conditions of Section 4.2 or (b) the
Noteholders holding the requisite Invested Amount of each applicable Series of
Notes included in the Group II Series of Notes waive, in each case as and to
the extent permitted under the related Series Supplement, the requirements of
Section 4.2 as applied to this Section 14 and all such other conditions,
requirements or restrictions with respect to which a failure or violation has
occurred; provided, in each case, that (x) any additional Monthly Base Rent due
with respect to each such Vehicle, relating to the decrease, if any, of the Net
Book Value of such Vehicle under the newly applicable Depreciation Schedule,
shall be paid by the applicable Lessee on the next succeeding Due Date, and (y)
the minimum level of Enhancement required under the applicable Series
Supplement, after giving effect to such designation, shall be satisfied on the
date of designation.
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(b) The applicable Servicer may designate a Non-Program Vehicle as a
Program Vehicle; provided, however, that (i) upon such redesignation and
through and including the applicable Vehicle Lease Expiration Date, such
Vehicle shall be an Eligible Vehicle, (ii) such Vehicle qualifies as an
Eligible Vehicle under the applicable Eligible Vehicle Disposition Program,
(iii) the Capitalized Cost, Net Book Value and Depreciation Charges with
respect to such Vehicle shall be recalculated as of the date of such
redesignation as if such Vehicle was a Program Vehicle at the time of the
initial related Vehicle Lease Commencement Date, and (iv) the related
Manufacturer has acknowledged such designation. Upon any redesignation of a
Vehicle pursuant to this Section 14(b), (x) the Lessor shall advance to the
applicable Manufacturer the difference (if any) between the original
Capitalized Cost of such Vehicle and the Capitalized Cost of such Vehicle upon
redesignation, which amount shall be deemed to be part of the Initial
Acquisition Cost of such Vehicle and (y) the applicable Lessee shall be
entitled to a credit against the Monthly Base Rent due on the next succeeding
Due Date in an amount equal to the excess (if any) of the Net Book Value of
such Vehicle upon such redesignation over the original Net Book Value of such
Vehicle immediately prior to such redesignation.
(c) Any Financed Vehicle shall be redesignated as an Acquired Vehicle for
all purposes of this Lease, the Indenture and the Master Collateral Agency
Agreement, and shall become subject to the Operating Lease and shall cease to
be subject to the Financing Lease, upon the completion of the transfer
(including the re-registration of title ownership) of such Financed Vehicle to
the Lessor pursuant to the Limited Guarantee and Reimbursement Agreement.
SECTION 15. GENERAL INDEMNITY.
Section 15.1. Indemnity of the Lessor. Each Lessee agrees to indemnify
and hold harmless the Lessor and the Lessor's directors, officers, agents and
employees (collectively, together with the Persons subject to indemnity under
Section 15.2, the "Indemnified Persons") against any and all claims, demands
and liabilities of whatsoever nature, and all costs and expenses, relating to
or in any way arising out of:
Section 15.1.1. the ordering, delivery, acquisition, title on
acquisition, rejection, installation, possession, titling, retitling,
registration, re-registration, custody by such Lessee of title and
registration documents, use, non-use, misuse, operation, deficiency,
defect, transportation, repair, control or disposition of any Vehicle
leased hereunder or to be leased hereunder by such Lessee, including,
without limitation, any such Vehicle subleased to a Franchisee of such
Lessee and any of the foregoing actions, events or circumstances occurring
or arising in connection with such subleasing, any related Lessee
Agreement, any related Franchisee or any customer of any such related
Franchisee. The foregoing shall include, without limitation, any claim by
any third party against the Lessee for personal injury, property or other
damages arising out of any of the foregoing with respect to any such
Vehicles;
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Section 15.1.2. all (i) federal, state, county, municipal, foreign or
other fees and taxes of any nature, including but not limited to license,
qualification, registration, franchise, sales, use, gross receipts, ad
valorem, business, property (real or personal), excise, motor vehicle, and
occupation fees and taxes, and all federal, state, local and foreign income
taxes (including any taxes payable by the Lessor as a result of its being a
member of any group of corporations, including such Lessee, that file any
tax returns on a consolidated or combined basis), and penalties and
interest thereon, whether assessed, levied against or payable by the Lessor
or otherwise, with respect to any Vehicle leased by such Lessee hereunder
or the acquisition, purchase, sale, lease, sublease, rental, use,
operation, control, ownership or disposition of any such Vehicle by any
Person or measured in any way by the value thereof or by the business of,
investment by, or ownership by the Lessor or such Lessee with respect
thereto, and (ii) documentary, stamp, filing, recording, mortgage or other
taxes, if any, which may be payable by the Lessor or such Lessee in
connection with this Lease or the other Related Documents or the related
Lessee Agreements and any penalties or interest with respect thereto;
Section 15.1.3. any violation by such Lessee of this Lease or of any
Related Documents or Lessee Agreements to which such Lessee is a party or
by which it is bound or any laws, rules, regulations, orders, writs,
injunctions, decrees, consents, approvals, exemptions, authorizations,
licenses and withholdings of objecting of any governmental or public body
or authority and all other requirements having the force of law applicable
at any time to any Vehicle Leased by such Lessee hereunder or any action or
transaction by such Lessee with respect thereto or pursuant to this Lease;
Section 15.1.4. such Lessee's Pro Rata Share of all out-of-pocket
costs of the Lessor (including the reasonable fees and out-of-pocket
expenses of counsel for the Lessor) in connection with the execution,
delivery and performance of this Lease and the other Related Documents,
including, without limitation, overhead expenses and any and all fees of
the Trustee, Paying Agent, Clearing Agencies and Master Collateral Agent,
all fees payable in connection with any Enhancement, any and all fees of
the Master Servicer or any Servicer under the Indenture, fees payable to
the Rating Agencies in connection with their rating of the Commercial Paper
Notes and any underwriting or placement agency fees incurred in connection
with the sale of any Notes included in the Group II Series of Notes or
Commercial Paper Notes, in each case to the extent allocable to this Lease;
and
Section 15.1.5. such Lessee's Pro Rata Share of all out-of-pocket
costs and expenses (including reasonable attorneys' fees and legal
expenses) incurred by the Lessor, the Master Collateral Agent, the Trustee
or the Holders of Notes included in the Group II Series of Notes in
connection with the administration, enforcement, waiver or amendment of
this Lease and any other Related Documents, and all indemnification
obligations of the Lessor under the Related Documents.
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Notwithstanding the foregoing, no Lessee shall have any duty to indemnify
any Indemnified Person for any consequential or punitive damages or claims,
demands, liabilities, costs, or expenses to the extent such claim, demand,
liability, cost or expense arises out of or is due to such Indemnified Person's
gross negligence or willful misconduct.
Section 15.2. Indemnification of the Trustee. Each Lessee agrees to
indemnify and hold harmless the Trustee and the Trustee's officers, directors,
agents and employees against any and all or, in the case of clause (ii) below,
such Lessee's Pro Rata Share of all claims, demands and liabilities of
whatsoever nature, and all or, in the case of clause (ii) below, such Lessee's
Pro Rata Share of all costs and expenses, relating to or in any way arising out
of: (i) any acts or omissions of such Lessee pursuant to this Lease and (ii)
the Trustee's appointment under the Base Indenture and the Trustee's
performance of its obligations thereunder, or any document pertaining to any of
the foregoing to which the Trustee is a signatory, including, but not limited
to any judgment, award, settlement, reasonable attorneys' fees and other costs
or expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided, however, the Lessees shall have no duty
to indemnify the Trustee, or any other Indemnified Person pursuant to this
Section 15.2, to the extent such claim, demand, liability, cost or expense
arises out of or is due to the Trustee's or such Indemnified Person's gross
negligence or willful misconduct. Any such indemnification shall not be
payable from the assets of the Lessor. The provisions of this indemnity shall
run directly to and be enforceable by the Trustee or any other Indemnified
Person subject to the limitations hereof. The indemnification provided for in
this Section 15.2 shall be in addition to any other indemnities available to
the Trustee and shall survive the termination of the duties of the Lessees
hereunder and the termination of this Lease or a document to which the Trustee
is a signatory or the resignation or removal of the Trustee.
Section 15.3. Reimbursement Obligation by the Lessees. The applicable
Lessee shall forthwith upon demand reimburse the Lessor or the Trustee, as the
case may be, for any sum or sums expended with respect to any of the foregoing,
or shall pay such amounts directly upon request from the Lessor or the Trustee;
provided, however, that, if so requested by such Lessee, the Lessor or the
Trustee shall submit to such Lessee a statement documenting any such demand for
reimbursement or prepayment. To the extent that such Lessee in fact
indemnifies the Lessor or the Trustee under the indemnity provisions of this
Lease, such Lessee shall be subrogated to the rights of the Lessor or the
Trustee, as the case may be, in the affected transaction and shall have a right
to determine the settlement of claims therein. The foregoing indemnity as
contained in this Section 15 shall survive the expiration or earlier
termination of this Lease or any lease of any Vehicle hereunder; provided,
however, that the factual or legal circumstances giving rise to the Lessor's
exposure to liability occur during the period that the Lease is in effect as to
the Vehicle for which such exposure to liability arose.
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Section 15.4. Notice to Lessee of Claims. The Lessor or the Trustee, as
the case may be, shall notify the applicable Lessee in writing (a "Notice of
Claim") of the pendency of any such claim, action or facts referred to in this
Section 15 for which indemnity may be required.
Section 15.5. Defense of Claims. Defense of any claim referred to in this
Section 15 for which indemnity may be required shall, at the option and request
of the applicable Lessee, be conducted by such Lessee. Following receipt of
any Notice of Claim, such applicable Lessee will inform the Indemnified Person
of its election to defend such claim. Such Indemnified Person may participate
in any such defense at its own expense, provided such participation does not
interfere with such Lessee's defense. Each Lessee agrees that no Indemnified
Person will be liable to such Lessee for any claim caused directly or
indirectly by the inadequacy of any Vehicle for any purpose or any deficiency
or defect therein or the use or maintenance thereof or any repairs, servicing
or adjustments thereto or any delay in providing or failure to provide such or
any interruption or loss of service or use thereof or any loss of business, all
of which shall be the risk and responsibility of such Lessee, except to the
extent that any of the foregoing is caused by the gross negligence or willful
misconduct of such Indemnified Person. The rights and indemnities of each
Indemnified Person hereunder are expressly made for the benefit of, and will be
enforceable by, each Indemnified Person notwithstanding the fact that such
Indemnified Person is not or is no longer a party to (or entitled to receive
the benefits of) this Lease. This general indemnity shall not affect any
claims of the type discussed above which a Lessee may have against the
Manufacturer.
SECTION 16. ASSIGNMENT. No Lessee shall, except as provided in the Base
Indenture, without prior written consent of the Lessor and the Trustee, assign
this Lease or any of its rights hereunder to any other party; provided,
however, a Lessee may sublease or rent Vehicles leased by it under the terms of
such Lessee's normal Sublease agreements to Eligible Franchisees, and such
Lessee and such Eligible Franchisees may rent such Vehicles to consumers in the
ordinary course of their daily rental business. Any purported assignment in
violation of this Section 16 shall be void and of no force or effect. Nothing
contained herein shall be deemed to restrict the right of a Lessee to acquire
or dispose of, by purchase, lease, financing, or otherwise, motor vehicles that
are not subject to the provisions of this Lease.
SECTION 17. DEFAULT AND REMEDIES THEREFOR.
Section 17.1. Lease Events of Default. Any one or more of the following
will constitute an event of default (a "Lease Event of Default") as that term
is used herein:
Section 17.1.1. there occurs a default in the payment of any Monthly
Base Rent, Monthly Variable Rent, Monthly Finance Rent, Termination
Payment, Casualty Payment, Late Return Payment, Monthly Supplemental
Payment, Availability Payment or other amount payable under this Lease, and
the continuance thereof for three (3) Business Days with respect to any
payment of Monthly Base Rent or five (5) Business Days with respect
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to any other amounts, in each case after notice thereof by the Lessor, the
Master Collateral Agent or the Trustee to the applicable Lessee and the
Guarantor;
Section 17.1.2. any unauthorized assignment or transfer of this Lease
by a Lessee or the Guarantor occurs;
Section 17.1.3. the failure of a Lessee or the Guarantor to observe
or perform any other covenant, condition, agreement or provision hereof,
which failure has a Material Adverse Effect on the Lessor, and such default
continues for more than sixty (60) days after the earlier to occur of (a)
the date a Responsible Officer of such Lessee obtains knowledge of such
default or (b) the date written notice thereof is delivered by the Lessor,
the Master Collateral Agent or the Trustee to such Lessee; provided,
however, that if such failure cannot reasonably be cured within such sixty
(60) day period, no Lease Event of Default shall result therefrom so long
as, within such sixty (60) day period, such Lessee (i) commences to cure
same, (ii) delivers written notice to the Lessor, the Master Collateral
Agent and the Trustee notifying the Lessor, the Master Collateral Agent and
the Trustee of such default and setting forth the steps such Lessee intends
to take in order to cure such default and (iii) thereafter diligently
prosecutes such cure to completion and completely cures such default on or
before the ninetieth (90th) day after the earlier of the dates set forth in
clause (a) and clause (b) above;
Section 17.1.4. if any representation or warranty made by a Lessee or
the Guarantor proves untrue in any respect as of the date of the issuance
or making thereof, which inaccuracy or falsehood has a Material Adverse
Effect on the Lessor, and such inaccuracy or falsehood is not cured within
sixty (60) days after notice thereof from the Lessor, the Master Collateral
Agent or the Trustee to such Lessee;
Section 17.1.5. an Event of Bankruptcy occurs with respect to a
Lessee or the Guarantor; or
Section 17.1.6. a Series 1998-1 Enhancement Deficiency shall occur
and continue for at least one (1) Business Day after the Master Servicer
obtains actual knowledge thereof; provided, however, that such event or
condition shall not be a Lease Event of Default if within such one (1)
Business Day period DTAG shall have taken any of the actions described in
the proviso to Section 5.1(a) of the Series 1998-1 Supplement such that the
Series 1998-1 Enhancement Deficiency no longer exists and such action is in
accordance with the terms of Section 4.7(d)(v) of the Series 1998-1
Supplement.
Section 17.2. Effect of Lease Event of Default. If (i) a Lease Event of
Default described in Section 17.1.1(i), 17.1.2 or 17.1.5 shall occur, then the
Monthly Base Rent, the Monthly Supplemental Payment and Casualty Payments (in
each case calculated as if all Vehicles had become a Casualty for the Related
Month), the Monthly Variable Rent, the Availability Payment
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and the Monthly Finance Rent (in each case calculated as if the full amount of
interest, principal and other charges under all Outstanding Series of Notes
included in the Group II Series of Notes were then due and payable in full),
Termination Payments and Late Return Payments shall, automatically, without
further action by the Lessor or the Trustee, become immediately due and payable
or (ii) any other Lease Event of Default or any Liquidation Event of Default
shall occur, the Lessor or the Trustee may declare the Rent and all other
charges and payments (calculated as described in clause (i) above) to be due
and payable, whereupon such Rent and such other charges and payments (as so
calculated) shall, subject to Section 17.5, become immediately due and payable.
Section 17.3. Rights of Lessor Upon Lease Event of Default, Liquidation
Event of Default or Limited Liquidation Event of Default. If a Lease Event of
Default, Liquidation Event of Default or Limited Liquidation Event of Default
shall occur, then the Lessor at its option may:
(i) Proceed by appropriate court action or actions, either at law or
in equity, to enforce performance by the Lessees of the applicable
covenants and terms of this Lease or to recover damages for the breach
hereof calculated in accordance with Section 17.5; or
(ii) By notice in writing to each Lessee, terminate this Lease in its
entirety and/or the right of possession hereunder of the Lessees as to the
Vehicles, and the Lessor may direct delivery by the Lessees of documents of
title to the Vehicles, whereupon all rights and interests of the Lessees to
the Vehicles (except as otherwise provided herein) will cease and terminate
(but the Lessees will remain liable hereunder as herein provided,
calculated in accordance with Section 17.5); and thereupon, the Lessor or
its agents may, subject in each case to the rights of the Franchisees under
the applicable Subleases, peaceably enter upon the premises of the Lessees
or other premises where the Vehicles may be located and take possession of
them and thenceforth hold, possess and enjoy the same free from any right
of the Lessees, or their successors or assigns (other than the
Franchisees), to employ the Vehicles for any purpose whatsoever consistent
with the mitigation of losses and damages, and the Lessor will,
nevertheless, have a right to recover from the Lessees any and all amounts
which under the terms of Section 17.2 (as limited by Section 17.5) of this
Lease may be then due. The Lessor will provide the applicable Lessee with
written notice of the place and time of any sale of Financed Vehicles
pursuant to this Section 17.3 at least five (5) days prior to the proposed
sale, which shall be deemed commercially reasonable, and such Lessee or the
Lessor may purchase the Vehicle(s) at the sale. Each and every power and
remedy hereby specifically given to the Lessor will be in addition to every
other power and remedy hereby specifically given or now or hereafter
existing at law, in equity or in bankruptcy and each and every power and
remedy may be exercised from time to time and simultaneously and as often
and in such order as may be deemed expedient by the Lessor; provided,
however, that the measure of damages recoverable against a Lessee will in
any
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case be calculated in accordance with Section 17.5. All such powers and
remedies will be cumulative, and the exercise of one will not be deemed a
waiver of the right to exercise any other or others. No delay or omission
of the Lessor in the exercise of any such power or remedy and no renewal or
extension of any payments due hereunder will impair any such power or
remedy or will be construed to be a waiver of any default or any
acquiescence therein. Any extension of time for payment hereunder or other
indulgence duly granted to a Lessee will not otherwise alter or affect the
Lessor's rights or the obligations hereunder of such Lessee. The Lessor's
acceptance of any payment after it will have become due hereunder will not
be deemed to alter or affect the Lessor's rights hereunder with respect to
any subsequent payments or defaults therein; or
(iii) By notice in writing to a Lessee, terminate the Power of
Attorney of such Lessee.
Section 17.4. Rights of Trustee Upon Liquidation Event of Default, Limited
Liquidation Event of Default, Manufacturer Event of Default and Non-Performance
of Certain Covenants.
(i) If a Liquidation Event of Default or a Limited Liquidation Event
of Default or, with respect to Program Vehicles, a Manufacturer Event of
Default, shall have occurred and be continuing, the Lessor and the Trustee,
to the extent provided in the Indenture, shall have the rights against the
Guarantor, each Lessee, each Manufacturer in connection with any
Manufacturer Event of Default and the Master Lease Collateral provided in
the Indenture (including, without limitation, in connection with a
Manufacturer Event of Default, the rights granted under Section 8.2 of the
Indenture) upon a Liquidation Event of Default or Limited Liquidation Event
of Default, including the right to take possession of all Group II Vehicles
immediately from the Lessees.
(ii) With respect to Program Vehicles, if the Guarantor or any Lessee
shall default in the due performance and observance of any of its
obligations under Section 6.1, 23.4, 24.3, 24.4 (f), 24.7 or 25.4 hereof,
and such default shall continue unremedied for a period of 30 days after
notice thereof shall have been given to the Guarantor or the applicable
Lessee, as the case may be, by the Lessor, the Lessor or the Trustee, as
assignee of the Lessor's rights hereunder, shall have the ability to
exercise all rights, remedies, powers, privileges and claims of the
Guarantor or any Lessee against the Manufacturers under or in connection
with the Eligible Vehicle Disposition Programs with respect to (i) Group II
Vehicles that are Program Vehicles which the Guarantor or any Lessee has
determined to turn back to the Manufacturers under such Eligible Vehicle
Disposition Programs and (ii) whether or not the Guarantor or any Lessee
shall then have determined to turn back such Group II Vehicles that are
Program Vehicles, any such Program Vehicles for which the applicable
Maximum Term will expire within one week or less.
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(iii) Upon a default in the performance (after giving effect to any
grace periods provided herein) by the Guarantor or any Lessee of its
obligations hereunder to keep the Group II Vehicles free of Liens and to
maintain the Trustee's Lien perfected on the Master Lease Collateral, the
Trustee shall have the right to take actions reasonably necessary to
correct such default with respect to the subject Vehicles including the
execution of UCC financing statements with respect to Eligible Vehicle
Disposition Program and other general intangibles, and the completion of
Vehicle Perfection and Documentation Requirements on behalf of the
Guarantor or any Lessee, as applicable.
(iv) Upon the occurrence of a Liquidation Event of Default or Limited
Liquidation Event of Default, the Guarantor and each Lessee will return any
Group II Vehicles that are Program Vehicles to the related Manufacturer in
accordance with the instructions of the Lessor.
(v) Upon the occurrence of a Liquidation Event of Default or Limited
Liquidation Event of Default, the Lessor shall have the right to dispose of
(x) those Group II Vehicles that are Program Vehicles not accepted by the
related Manufacturer under the applicable Eligible Program pursuant to
clause (iv) above and (y) the Group II Vehicles that are Non-Program
Vehicles and to direct the Guarantor or the applicable Lessee to dispose of
such Vehicles in accordance with its instructions. In addition, the Lessor
shall have all of the rights, remedies, powers, privileges and claims
vis-a-vis the Guarantor or any Lessee, necessary or desirable to allow the
Trustee to exercise the rights, remedies, powers, privileges and claims
given to the Trustee pursuant to Section 8.1 and, with respect to Program
Vehicles, Section 8.2 of the Base Indenture and the Guarantor and each
Lessee acknowledges that it has hereby granted to the Lessor all of the
rights, remedies, powers, privileges and claims granted to the Trustee
pursuant to Article 8 of the Base Indenture and that, under certain
circumstances set forth in the Base Indenture, the Trustee may act in lieu
of the Lessor in the exercise of such rights, remedies, powers, privileges
and claims.
Section 17.5. Measure of Damages. If a Lease Event of Default,
Liquidation Event of Default or Limited Liquidation Event of Default occurs and
the Lessor, the Master Collateral Agent or the Trustee exercises the remedies
granted to the Lessor, the Master Collateral Agent or the Trustee under this
Section 17 or under Section 8.2 of the Base Indenture, the amount that the
Lessor shall be permitted to recover shall be equal to:
(i) all Rent and payments under this Lease (calculated as provided in
Section 17.2); plus
(ii) any damages and expenses (other than punitive and consequential
damages), which the Lessor, the Master Collateral Agent or the Trustee will
have sustained by reason of the Lease Event of Default, Liquidation Event
of Default or Limited
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Liquidation Event of Default, together with reasonable sums for such
attorneys' fees and such expenses as will be expended or incurred in the
seizure, storage, rental or sale of the Vehicles or in the enforcement of
any right or privilege hereunder or in any consultation or action in such
connection; plus
(iii) all other amounts due and payable under this Lease; plus
(iv) interest from time to time on amounts due and unpaid under this
Lease at the VFR plus 1%, computed from the date of the Lease Event of
Default, Liquidation Event of Default or Limited Liquidation Event of
Default or the date payments were originally due the Lessor under this
Lease or from the date of each expenditure by the Lessor which is
recoverable from a Lessee pursuant to this Section 17, as applicable, to
and including the date payments are made by the Lessee; minus
(v) an amount equal to all sums realized by the Lessor, the Master
Collateral Agent and the Trustee from the liquidation of the Financed
Vehicles (other than a Texas Vehicle) leased hereunder (either by receipt
of payment from the Manufacturers under Vehicle Disposition Programs, from
sales of Vehicles to third parties, or otherwise), provided, however, that
if a Financed Vehicle (other than a Texas Vehicle) is delivered to the
Manufacturer or the designated auction site for repurchase by the
Manufacturer under the applicable Vehicle Disposition Program or for sale
in accordance with the applicable Auction Procedures, respectively, and
such Vehicle is accepted for repurchase or sale by such Manufacturer (as
evidenced by a Condition Report indicating that such Vehicle conforms to
the requirements for repurchase or sale under such Vehicle Disposition
Program), the Lessor and the Trustee shall be deemed to have received
thirty (30) days after the date of such acceptance or sale on account of
this clause (v) an amount equal to the Net Book Value of such Vehicle,
calculated as of its Disposition Date (less any Termination Payments
payable in respect of such Vehicle).
Section 17.6. Application of Proceeds. The proceeds of any sale or other
disposition of any Financed Vehicles pursuant to Section 17.3 shall be applied
in the following order: (i) to the reasonable costs and expenses incurred by
the Lessor in connection with such sale or disposition, including any
reasonable costs associated with repairing such Vehicles, and reasonable
attorneys' fees in connection with the enforcement of this Lease, (ii) to the
payment of outstanding Rent owing from the applicable Lessee and payments under
the Lease owing from such Lessee (such proceeds to be applied first, to
outstanding Monthly Variable Rent and Monthly Finance Rent pro rata, second, to
outstanding Availability Payments, third, to outstanding Base Rent and Monthly
Supplemental Payments pro rata, fourth, to outstanding Termination Payments,
Casualty Payments and Late Return Payments pro rata and fifth, to outstanding
late charges pursuant to Sections 5.5 and 17.5(iv)), (iii) to the payment of
all other amounts due hereunder from such Lessee, (iv) to the payment of any
amounts to the Lessor, or such Person(s) as may be lawfully entitled thereto,
and (v) any remaining proceeds to such Lessee.
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SECTION 18. MANUFACTURER EVENTS OF DEFAULT. Upon the occurrence of any of
the following events (each, a "Manufacturer Event of Default") with respect to
a Manufacturer, the Lessees on behalf of the Lessor (a) shall no longer place
Vehicle Orders for additional Program Vehicles from such Manufacturer (each, a
"Defaulting Manufacturer") and (b) shall cancel any Vehicle Order with such
Defaulting Manufacturer to which a vehicle identification number (a "VIN") has
not been assigned as of the date such Manufacturer Event of Default occurs:
Section 18.1. The failure of such Manufacturer to pay Guaranteed Payments,
Repurchase Payments and/or Incentive Payments due under, respectively, such
Manufacturer's Vehicle Disposition Programs and its incentive programs, in an
aggregate amount in excess of $40,000,000 (net of amounts that are the subject
of a good faith dispute, as evidenced in writing by either the applicable
Lessee or the Manufacturer questioning the accuracy of the amounts paid or
payable in respect of any such Vehicle Disposition Programs or incentive
programs), which failure, in the case of each such Guaranteed Payment,
Repurchase Payment and/or Incentive Payment included in such amount in excess
of $40,000,000 continues for more than ninety (90) days following the
Disposition Date for the related Vehicle.
Section 18.2. The occurrence of an Event of Bankruptcy with respect to
such Manufacturer.
SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE. Pursuant to Section
7701 of the Code and as set forth in Attachment C hereto, each Lessee will
warrant and certify that (1) such Lessee intends to use the Acquired Vehicles
in a trade or business of such Lessee, and (2) such Lessee has been advised
that it will not be treated as the owner of the Acquired Vehicles for federal
income tax purposes.
SECTION 20. SURVIVAL. In the event that, during the term of this Lease, a
Lessee becomes liable for the payment or reimbursement of any obligations,
claims or taxes pursuant to any provision hereof, such liability will continue,
notwithstanding the expiration or termination of this Lease, until all such
amounts are paid or reimbursed by such Lessee.
SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL AGENT AND
TRUSTEE. Notwithstanding anything to the contrary contained in this Lease,
each Lessee and the Guarantor acknowledges that each of the Lessees and the
Lessor, pursuant to the Master Collateral Agency Agreement, has granted a
security interest to the Master Collateral Agent, for the benefit of the
Beneficiaries specified therein, in all of its right, title and interest in, to
and under the Vehicles, the related Vehicle Disposition Programs, the Master
Collateral Account and all other Master Collateral specified in the Master
Collateral Agency Agreement as being pledged by Thrifty, Dollar and RCFC, and
each Lessee and the Guarantor further acknowledges that the Lessor, pursuant to
the Indenture, has granted a security interest to the Trustee in all of its
right, title and interest in, to and under the RCFC Agreements, the Collection
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Account and the other Collateral described in the Indenture. Accordingly, each
Lessee and the Guarantor agrees that:
(i) Subject to the terms of the Indenture, the Trustee shall have all
the rights, powers, privileges and remedies of the Lessor hereunder.
Specifically, each Lessee and the Guarantor agrees that, upon the
occurrence of an Amortization Event, the Trustee or, with respect to any
Master Collateral, the Master Collateral Agent (for and on behalf of the
Trustee) may exercise any right or remedy against each Lessee or the
Guarantor provided for herein or in the Indenture or the Master Collateral
Agency Agreement and none of the Lessees or the Guarantor will interpose as
a defense that such claim should have been asserted by the Lessor;
(ii) Upon the delivery by the Master Collateral Agent or the Trustee
of any notice to a Lessee or the Guarantor stating that a Lease Event of
Default or an Amortization Event with respect to such Lessee has occurred,
then such Lessee or the Guarantor will, if so requested by the Master
Collateral Agent (with respect to the Master Collateral) or the Trustee
(with respect to the Collateral), treat the Master Collateral Agent or the
Trustee or the Master Collateral Agent's or the Trustee's designee, as the
case may be, for all purposes as the Lessor hereunder and in all respects
comply with all obligations under this Lease that are asserted by the
Master Collateral Agent or the Trustee as the successor to the Lessor
hereunder, irrespective of whether such Lessee or the Guarantor has
received any such notice from the Lessor;
(iii) Pursuant to the Indenture, the Lessor hereby irrevocably
authorizes and directs each Lessee to, and each Lessee shall, make payments
of Rent hereunder directly to the Trustee for deposit in the Group II
Collection Account established by the Trustee for receipt of such payments
pursuant to the Indenture, and such payments shall discharge the obligation
of such Lessee to the Lessor hereunder with respect to Rent to the extent
of such payments. Each Lessee further acknowledges that pursuant to the
Master Collateral Agency Agreement, the Lessor has irrevocably authorized
and directed such Lessee to, and such Lessee shall, cause all payments
under the related Lessee Agreements, each Vehicle Disposition Programs, and
all other Master Collateral pledged by such Lessee to the Master Collateral
Agent for the benefit of the Trustee (as Beneficiary on behalf of the
holders of each Series of Notes included in the Group II Series of Notes),
to be made directly to the Master Collateral Agent for deposit in the
Master Collateral Account established by the Lessor for receipt of such
payments pursuant to the Master Collateral Agency Agreement, and each such
payment (other than any payment that is subject to distribution to such
Lessee or its designee pursuant to Section 2.5(b) of the Master Collateral
Agency Agreement and that is not transferred to the Collection Account)
shall constitute a prepayment in respect of the obligation of such Lessee
to pay the Rent due hereunder on the next succeeding Due Date. Upon
written notice to a Lessee of a sale or assignment by the Trustee or Master
Collateral Agent of its right, title and interest in
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moneys due under this Lease or the Master Collateral Agency Agreement to a
successor Trustee or Master Collateral Agent, such Lessee shall thereafter
make payments of Rent hereunder or payments in respect of the Master
Collateral, as applicable, to the party specified in such notice;
(iv) Upon request made by the Master Collateral Agent at any time,
each Lessee will take such actions (other than recordation of liens with
respect to the Existing Fleet) as are requested by the Master Collateral
Agent to assist the Master Collateral Agent in maintaining the Master
Collateral Agent's perfected security interest in the Vehicles leased by
such Lessee under this Lease, the Certificates of Title with respect
thereto and the related Master Collateral pursuant to the Master Collateral
Agency Agreement; and
(v) A security interest in the Lessor's rights under this Lease has
been granted by the Lessor to the Trustee pursuant to the Indenture as
collateral security only for all Series of Notes included in Group II and,
accordingly, all references herein to "all" Series of Notes shall refer
only to all Series of Notes included in Group II.
SECTION 22. MODIFICATION AND SEVERABILITY. The terms of this Lease will
not be waived, altered, modified, amended, supplemented or terminated in any
manner whatsoever except by a written instrument signed by the Lessor, each
Lessee and (except as to matters referred to in Section 27.3) the Guarantor,
and consented to in writing by the Master Collateral Agent and the Trustee, the
Required Group II Noteholders and each Enhancement Provider with respect to
each Series of Notes included in Group II. If any part of this Lease is not
valid or enforceable according to law, all other parts will remain enforceable.
The Lessor shall provide prompt written notice to each Rating Agency of any
such waiver, modification or amendment.
Notwithstanding the foregoing provisions of this Section 22, the Lessor,
the Lessees and the Guarantor may, at any time and from time to time, without
the consent of the Master Collateral Agent, the Trustee, any Noteholders or
any Enhancement Provider, enter into any amendment, supplement or other
modification to this Lease to cure any apparent ambiguity or to correct or
supplement any provision in this Lease that may be inconsistent with any other
provision herein; provided, however, that (i) any such action shall not have a
Material Adverse Effect on the interests of any Enhancement Provider for a
Series of Notes included in the Group II Series of Notes, based upon, at the
request of the Trustee, an Opinion of Counsel and an officers' certificate of
the Lessor and each Lessee addressed to the Trustee and (ii) a copy of such
amendment, supplement or other modification is furnished to the Trustee, each
Enhancement Provider with respect to any Series of Notes included in the Group
II Series of Notes and each Rating Agency in accordance with the notice
provisions hereof not later than ten days prior to the execution thereof by the
Lessor, the Lessees and the Guarantor.
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SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES. Each Lessee and
Servicer represents and warrants to the Lessor, as to itself and the Vehicles
leased by it hereunder, and the Guarantor represents and warrants to the
Lessor, as to itself and as to each Lessee and Servicer, that as of the Closing
Date with respect to the Series 1998-1 Notes as the first Group II Series of
Notes:
Section 23.1. Due Organization, Authorization, No Conflicts, Etc. Each of
the Lessees and the Guarantor is a corporation duly organized and validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified and in good standing in each jurisdiction
where, because of the nature of its activities or properties, the failure so to
qualify would have a Material Adverse Effect on such Lessee or the Guarantor.
The execution, delivery and performance by each Lessee and the Guarantor of
this Lease and the other Related Documents to be executed and delivered by it
are within its corporate powers, have been duly authorized by all necessary
corporate action (including shareholder approval, if required), have received
all necessary governmental and other consents, approvals (in each case if any
shall be required), and do not and will not contravene or conflict with, or
create a default, breach, Lien or right of termination or acceleration under,
any Requirement of Law or Contractual Obligation binding upon it, other than
such default, breach, Lien or right of termination or acceleration which does
not have a Material Adverse Effect on such Lessee or the Guarantor, as
applicable. This Lease and each other Related Document to be executed and
delivered by a Lessee or the Guarantor are (or when executed and delivered will
be) the legal, valid, and binding obligations of such Person, enforceable
against such Person in accordance with their respective terms, subject to
bankruptcy, insolvency and other laws affecting the enforcement of creditors'
rights.
Section 23.2. Financial Information; Financial Condition. All balance
sheets, all statements of operations, of shareholders' equity and of cash flow,
and other financial data which have been or shall hereafter be furnished to the
Lessor or the Trustee for the purposes of or in connection with this Lease or
the Related Documents have been and will be prepared in accordance with GAAP
and do and will present fairly the financial condition of the entities involved
as of the dates thereof and the results of their operations for the periods
covered thereby. Such financial data include the following financial statements
and reports which have been furnished to the Lessor and the Trustee on or prior
to such Closing Date:
(1) the audited balance sheet of the Guarantor and each Lessee as of
December 31, 1996 and the related statements of operations,
stockholders' equity and cash flows for the fiscal year ended on
such date; and
(2) the unaudited balance sheets of the Guarantor and each Lessee
and statement of operations, accompanied by an Officer's
Certificate verifying the accuracy and completeness thereof signed
by an Authorized Officer of the Guarantor and the Lessee, for the
9-month period ended September 30, 1997.
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Section 23.3. Litigation. Except for (i) claims set forth in Schedule 1
and (ii) claims which are fully covered by insurance, no claims, litigation
(including, without limitation, derivative actions), arbitration, governmental
investigation or proceeding or inquiry is pending or, to the best of the
Lessees' and the Guarantor's knowledge, threatened against a Lessee or the
Guarantor which would, if adversely determined, have a Material Adverse Effect
on a Lessee or the Guarantor.
Section 23.4. Liens. As of the date hereof, there is no Lien on, or no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of
any kind in, the Vehicles leased hereunder (other than those set forth in
Schedule 4, and other Permitted Liens).
Section 23.5. Necessary Actions. Upon the Servicers causing the Lien of
the Master Collateral Agent to be noted on the Certificates of Title with
respect to the Vehicles (other than the Vehicles in the Existing Fleet) or as
otherwise provided for by the Master Collateral Agency Agreement or the
Indenture, all filings, registrations and recordings necessary or appropriate
to create, preserve, protect and perfect the security interest granted to the
Master Collateral Agent in respect of the Master Collateral (other than the
Vehicles in the Existing Fleet) have been accomplished and, assuming the
delivery to, and continuing possession by, the Lessor or its agents or
assignees of all instruments and documents (in each case as defined in the UCC
as in effect in New York) a security interest in which is perfected by
possession (except with regard to property constituting fixtures, any reserved
rights of the United States government as required by law, Liens upon patents,
patent licenses, trademarks, service marks and trademark licenses, to the
extent that such Liens cannot be perfected by the filing of financing
statements under the Uniform Commercial Code as in effect in the applicable
jurisdiction, Liens on uncertified securities and security entitlements, Liens
on Master Collateral the perfection of which requires filings in or other
actions under the laws of jurisdictions outside of the United States of
America, any State, territory or dependency thereof or the District of
Columbia, and Liens on general intangibles or accounts (in each case as defined
in the UCC as in effect in New York) on which the United States of America or
any department, agency, or instrumentality thereof is the obligor), and
assuming that the applicable Lessee has rights in the Master Collateral within
the meaning of the UCC as in effect in New York, the security interest granted
to the Master Collateral Agent pursuant to the Master Collateral Agency
Agreement in and to the Master Collateral (other than the Vehicles in the
Existing Fleet) constitutes a perfected security interest therein (but as to
the copyrights and copyright licenses and accounts arising therefrom, only to
the extent the UCC of the relevant jurisdiction, from time to time in effect,
is applicable), prior to the rights of all other Persons (except, with respect
to goods (as defined in the UCC), buyers in the ordinary course of business to
the extent provided in Section 9-307(1) of the UCC as from time to time in
effect in the applicable jurisdiction) therein and subject to no other Liens
other than Permitted Liens (and the interests of such buyers in the ordinary
course of business) and is entitled to all rights, priorities and benefits
afforded to perfected security interests by the UCC or other relevant law as
enacted in any relevant jurisdiction.
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Section 23.6. Employee Benefit Plans. (a) During the twelve consecutive
month period prior to the date hereof (or, with respect to each Series of Notes
included in the Group II Series of Notes after the Closing Date for the Series
1998-1 Notes, the Closing Date with respect to such Series of Notes): (i) no
steps have been taken to terminate any Pension Plan and (ii) no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise
to a Lien under Section 302(f)(1) of ERISA in connection with such Pension
Plan; (b) no condition exists or event or transaction has occurred with respect
to any Pension Plan which could result in the incurrence by a Lessee, the
Guarantor or any member of the Controlled Group of fines, penalties or
liabilities for ERISA violations, which in the case of any of the events
referred to in clause (a) above or this clause (b) would have a Material
Adverse Effect upon such Lessee or the Guarantor, and (c) none of the Lessees
and the Guarantor has any material contingent liability with respect to any
post-retirement benefits under a Welfare Plan, other than liability for
continuation coverage described in Subtitle B of Part 6 of Title I of ERISA and
liabilities which would not have a Material Adverse Effect upon any Lessee or
the Guarantor.
Section 23.7. Investment Company Act. Neither the Guarantor nor any
Lessee is an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
Section 23.8. Regulations G, T, U and X. Neither the Guarantor nor any
Lessee is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System).
Section 23.9. Business Locations; Trade Names; Principal Places of
Business Locations. Schedule 3 lists each of the locations where each Lessee
and the Guarantor maintains a chief executive office, principal place of
business, or any records; and Schedule 3 also lists such Person's legal name,
each name under or by which it conducts its business, each state in which it
conducts business and the state in which the it has its principal place of
business.
Section 23.10. Taxes. Each Lessee and the Guarantor has filed all
material tax returns that are required to be filed by it, and has paid or
provided adequate reserves for the payment of all taxes, including, without
limitation, all payroll taxes and federal and state withholding taxes, and all
assessments payable by it that have become due, other than those that are not
yet delinquent or are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been established, and are
being maintained, in accordance with GAAP. As of such Closing Date, there is
no ongoing material audit (other than routine sales tax audits and other
routine audits) or, to each Lessee's and the Guarantor's knowledge, material
tax liability for any period for which returns have been filed or were due,
other than those contested in good faith by appropriate proceedings and with
respect to which (x) adequate reserves have been established and are being
maintained in accordance with GAAP and (y) the failure to pay
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such taxes would not, individually or in the aggregate, have a Material Adverse
Effect on such Lessee or the Guarantor or a material adverse effect on the
Noteholders.
Section 23.11. Governmental Authorization. Each of the Lessees and the
Guarantor has all licenses, franchises, permits and other governmental
authorizations necessary for all businesses presently carried on by it
(including owning and leasing the real and personal property owned and leased
by it), except where failure to obtain such licenses, franchises, permits and
other governmental authorizations would not have a Material Adverse Effect on
such Person.
Section 23.12. Compliance with Laws. Each Lessee and the Guarantor: (i)
is not in violation of any Requirement of Law, which violation would have a
Material Adverse Effect on such Person, and to the best knowledge of each
Lessee and the Guarantor, no such violation has been alleged; (ii) has filed in
a timely manner all reports, documents and other materials required to be filed
by it with any Governmental Agency (and the information contained in each of
such filings is true, correct and complete in all material respects), except
where failure to make such filings would not have a Material Adverse Effect on
such Person; and (iii) has retained all records and documents required to be
retained by it pursuant to any Requirement of Law, except where failure to
retain such records would not have a Material Adverse Effect on such Person.
Section 23.13. Eligible Vehicles; Eligible Franchisees. Each Vehicle is
or will be, as the case may be, on the Vehicle Lease Commencement Date with
respect to such Vehicle, an Eligible Vehicle, and each Franchisee subleasing an
Eligible Vehicle from a Lessee is or will be, as the case may be, on the
sublease commencement date with respect to such Eligible Vehicle, an Eligible
Franchisee.
Section 23.14. Supplemental Documents True and Correct. All information
contained in any Vehicle Order, Refinancing Schedule or other Supplemental
Document which has been submitted, or which may hereafter be submitted by a
Lessee or the Guarantor to the Lessor is, or will be, true, correct and
complete.
Section 23.15. Accuracy of Information. All certificates, reports,
statements, documents and other information furnished to the Lessor, the
Trustee or the Master Collateral Agent by the Guarantor or any Lessee pursuant
to any provision of any Related Document, or in connection with or pursuant to
any amendment or modification of, or waiver under, any Related Document, shall,
at the time the same are so furnished, be complete and correct in all material
respects to the extent necessary to give the Lessor, the Trustee or the Master
Collateral Agent, as the case may be, true and accurate knowledge of the
subject matter thereof, and the furnishing of the same to the Lessor, the
Trustee or the Master Collateral Agent, as the case may be, shall constitute a
representation and warranty by the Guarantor and such Lessee made on the date
the same are furnished to the Lessor, the Trustee or the Master Collateral
Agent, as the case may be, to the effect specified herein.
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Each of the foregoing representations and warranties will be deemed to be
remade as of the Closing Date with respect to each Series of Notes included in
Group II.
SECTION 24. CERTAIN AFFIRMATIVE COVENANTS. Each Lessee and, as
applicable, each Servicer, the Master Servicer and DTAG in its capacity as
Guarantor each covenants and agrees that, until the expiration or termination
of this Lease, and thereafter until the obligations of such Lessee, such
Servicer, the Master Servicer or the Guarantor, as applicable, under this Lease
and the Related Documents are satisfied in full, unless at any time the Lessor
and the Trustee shall otherwise expressly consent in writing, it will:
Section 24.1. Corporate Existence; Foreign Qualification. Do and cause to
be done at all times all things necessary to (i) maintain and preserve its
corporate existence (except as permitted under Section 25.1); (ii) be duly
qualified to do business and in good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such qualification
necessary and the failure to so qualify would have a Material Adverse Effect on
it; and (iii) comply with all Contractual Obligations and Requirements of Law
binding upon it, except to the extent that its failure to comply therewith
would not, in the aggregate, have a Material Adverse Effect on it.
Section 24.2. Books, Records and Inspections. (i) Maintain books and
records that are complete and accurate in all material respects with respect to
the Vehicles leased by it under this Lease; and (ii) at any time and from time
to time during regular business hours, and with reasonable prior notice from
the Lessor, the Master Collateral Agent or the Trustee, permit the Lessor, the
Master Collateral Agent or the Trustee (or such other Person who may be
designated from time to time by the Lessor, the Master Collateral Agent or the
Trustee), or its agents or representatives to examine and make copies of all
books, records and documents in the possession or under the control of such
Person relating to the Vehicles leased under this Lease, including without
limitation, in connection with the Master Collateral Agent's or the Trustee's
satisfaction of any requests of a Manufacturer performing an audit under its
Vehicle Disposition Program.
Section 24.3. Vehicle Disposition Programs. With respect to each Program
Vehicle leased by a Lessee, comply, or cause the related Franchisee to comply,
as appropriate, with all of its obligations under the applicable Vehicle
Disposition Program relating to such Vehicle.
Section 24.4. Reporting Requirements. Furnish, or cause to be furnished
to the Lessor (or to such other Persons as are specified below):
(a) Daily Reports. Daily reports of the Master Servicer as follows:
On each Business Day commencing on the Lease Commencement Date, the Master
Servicer shall prepare and maintain at the office of the Master Servicer, a
record (each, a "Daily Report") setting forth the aggregate amount of (i)
Guaranteed Payments, Repurchase
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Payments, Disposition Proceeds and Incentive Payments received from
Manufacturers under Vehicle Disposition Programs or incentive programs, or
from other Persons in connection with the sale or disposition of Vehicles
leased under this Lease, (ii) insurance proceeds in respect of Vehicles
leased under this Lease, (iii) payments in respect of Lessee Agreements,
and (iv) any other Collections in respect of the Master Collateral
allocable to the Trustee as Beneficiary (on behalf of the Holders of a
Series of Notes included in the Group II Series of Notes) and in each case
deposited in the Master Collateral Account and reported to the Master
Servicer by the Master Collateral Agent, in accordance with Section 2.5(b)
of the Master Collateral Agreement, not more than the second Business Day
preceding such Daily Report, and setting forth (x) the aggregate dollar
amount of the Collections identified in the foregoing clauses (i) through
(iv), (y) during the continuance of a Lease Event of Default or a
Liquidation Event of Default, and as needed under Section 2.5(c) or (d) of
the Master Collateral Agency Agreement or, in the sole judgment of the
Master Collateral Agent, as otherwise needed, the portion of such
Collections representing proceeds of the Master Collateral pledged by the
Lessor and the portion pledged by each Lessee, and (z) the aggregate dollar
amount of Sublease payments, insurance payments, warranty payments (if
any), and other payments which, so long as no Lease Event of Default or
Liquidation Event of Default has occurred and is continuing, may be
withdrawn from the Master Collateral Account and distributed to the
applicable Lessee, as set forth in Section 2.5(b) of the Master Collateral
Agency Agreement. Before 3:00 p.m. (New York City time) on each such
Business Day, the Master Servicer shall deliver a copy of the Daily Report
to the Master Collateral Agent and the Trustee.
(b) Monthly Certificate. Monthly certificates of the Master Servicer
as follows: On each Reporting Date, the Master Servicer shall forward to
the Lessee, the Lessor, the Trustee, the Paying Agent, the Rating Agencies
and any applicable Enhancement Provider, an Officers' Certificate of the
Master Servicer substantially in the form of Exhibit A (each, a "Monthly
Certificate") setting forth, inter alia, the following information (which,
in the cases of clauses (iii), (iv) and (v) below, will be expressed as a
dollar amount per $1,000 of the original principal amount of such Notes and
as a percentage of the outstanding principal balance of the Notes as of
such date): (i) the aggregate amount of payments received from the
Manufacturers under Vehicle Disposition Programs and deposited in the
Master Collateral Account and the aggregate amount of other Group II
Collections processed for the Related Month with respect to such Reporting
Date; (ii) the Invested Percentage on the last day of the second preceding
Related Month of each Series of Notes included in the Group II Series of
Notes (or, until the end of the second Related Month for such Series of
Notes, as of the Closing Date for such Series); (iii) for each Series
included in the Group II Series of Notes, the total amount to be
distributed to Noteholders on the next succeeding Payment Date; (iv) for
each Series included in the Group II Series of Notes, the amount of such
distribution allocable to principal on the Notes of such Series; (v) for
each Series included in the
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Group II Series of Notes, the amount of such distribution allocable to
interest on the Notes; (vi) for each Series included in the Group II Series
of Notes, the amount of Enhancement used or drawn (or to be used or drawn)
in connection with the distribution to Noteholders of such Series on the
next succeeding Payment Date, together with the aggregate amount of
remaining Enhancement not theretofore used or drawn; (vii) for each Series
included in the Group II Series of Notes, the Series Monthly Servicing Fee
for the next succeeding Payment Date; (viii) for each Series included in
the Group II Series of Notes, the existing Carryover Controlled
Amortization Amount, if any; (ix) for each Series included in the Group II
Series of Notes, the applicable Pool Factors with respect to such Related
Month; (x) the Aggregate Asset Amount of all Group II Series of Notes and
the amount of the Asset Amount Deficiency of all Group II Series of Notes,
if any, at the close of business on the last day of the Related Month; (xi)
if Enhancement is provided for any Series of Notes included in the Group II
Series of Notes by means of overcollateralization, the amount of recoveries
and losses for the Related Month and the amount of any excess funds
available for such overcollateralization, (xii) whether, to the knowledge
of the Master Servicer, any Lien exists on any of the Collateral for any
Series of Notes included in the Group II Series of Notes (other than
Permitted Liens) and (xiii) the percentage of Vehicles leased under this
Lease constituting Program Vehicles, the percentage of Vehicles leased
under this Lease constituting Non-Program Vehicles, and the percentage of
Vehicles leased under this Lease constituting Program Vehicles of each
Manufacturer and Non-Program Vehicles of each Manufacturer. The Trustee
shall be under no duty to recalculate, verify or recompute the information
supplied to it under this Section 24.4(b).
(c) Audit Report. As soon as available and in any event within one
hundred ten (110) days after the end of each fiscal year of the Guarantor,
a copy of the consolidated balance sheet of the Guarantor and its
Subsidiaries as at the end of such fiscal year, together with the related
statements of earnings, stockholders' equity and cash flows for such fiscal
year, prepared in reasonable detail and in accordance with GAAP, and
certified by Deloitte & Touche, LLP (or such other independent certified
public accountants of recognized national standing as shall be selected by
the Guarantor) as presenting fairly in all material respects the financial
condition and results of operations of the Guarantor and its Subsidiaries,
with such exceptions as may be noted in such accountants' report;
(d) Quarterly Statements. As soon as available, but in any event
within forty-five (45) days after the end of each fiscal quarter (except
the fourth fiscal quarter) of the Guarantor, copies of the unaudited
consolidated balance sheet of the Guarantor and its Subsidiaries as at the
end of such fiscal quarter and the related unaudited statements of
earnings, stockholders' equity and cash flows for the portion of the fiscal
year through such fiscal quarter (and as to the statements of earnings for
such fiscal quarter) in each case setting forth in comparative form the
figures for the corresponding periods of the
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previous fiscal year, prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected therein and
certified by the chief financial or accounting officer of the Guarantor as
presenting fairly in all material respects the financial condition and
results of operations of the Guarantor and its Subsidiaries (subject to
normal year-end adjustments);
(e) Lease Events of Defaults. Promptly after a Lessee or the
Guarantor has actual knowledge of the occurrence of any Lease Event of
Default, Potential Lease Event of Default, Manufacturer Event of Default,
Potential Manufacturer Event of Default, a written statement of an
Authorized Officer of such Person describing such event and the action that
such Lessee or the Guarantor proposes to take with respect thereto;
(f) Monthly Vehicle Statements. On or before the third Reporting
Date following the date hereof, and on each Reporting Date thereafter, a
monthly vehicle statement (each, a "Monthly Vehicle Statement") in a form
acceptable to the Lessor, which shall specify (i) the last eight digits of
the VIN for the Vehicles leased hereunder during the Related Month by each
Lessee, (ii) whether each such Vehicle is leased under Annex A or Annex B
hereto; (iii) the Capitalized Cost for such Vehicles, (iv) the aggregate
Net Book Value of such Vehicles as of the end of the Related Month, (v) the
VINs for those Vehicles leased hereunder during the Related Month that have
been delivered to Manufacturers or designated auction sites pursuant to the
applicable Vehicle Disposition Program, or that have been otherwise sold,
during the Related Month, (vi) those Vehicles leased hereunder during the
Related Month that have become a Casualty during the Related Month and
their respective Net Book Values (as of the earlier of the last day of such
Related Month and the date such Vehicle is disposed of or becomes a
Casualty, as applicable), (vii) the total amount of Monthly Base Rents,
Monthly Variable Rents, Monthly Finance Rents, Monthly Supplemental
Payments, Availability Payment, Termination Payments and Late Return
Payments due for the Related Month on such Due Date, (viii) all prepayments
of Rent received during the Related Month from Guaranteed Payments,
Repurchase Payments, Disposition Proceeds and Incentive Payments received
by the Lessor during the Related Month from the Manufacturers, auctions and
other Persons, as the case may be, (ix) the aggregate Depreciation Charges
for all Vehicles leased hereunder during the Related Month continuing in
the possession of each Lessee, (x) information with respect to each Lessee
necessary for the Master Servicer to compute the Aggregate Asset Amount of
the Group II Series of Notes as of the end of the Related Month, (xi)
information with respect to each Lessee necessary for the Master Servicer
to compute the Availability Payment for each Lessee with respect to the
Related Month, and (xii) any other charges owing from, and credits due to,
each Lessee under this Lease;
(g) Annual Certificate. Each Lessee will deliver to RCFC, the
Trustee, any applicable Enhancement Provider under the Indenture, and the
Rating Agencies rating any outstanding Series of Notes, on or before April
15 of each calendar year, beginning
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with April 15, 1998, an Officers' Certificate substantially in the form of
Attachment E (each, an "Annual Certificate") (a) stating that a review of
the activities of the Lessee during the preceding calendar year (or during
the initial period from the initial Closing Date until April 15, 1998) and
of its performance under this Lease and the other Related Documents to
which each Lessee is a party was made under the supervision of the officers
signing such certificate, (b) stating that to the best of such officers'
knowledge, based on such review, either there has occurred no event which,
with the giving of notice or passage of time or both, would constitute a
Lease Event of Default or Amortization Event and that such Lessee has fully
performed all its obligations under this Lease and such other Related
Documents throughout such year, or, if there has occurred such event or a
Lease Event of Default or Amortization Event, specifying each such event
known to such officers and the nature and status thereof, and (c) stating
(and containing an Opinion of Counsel to the effect) that all necessary
Uniform Commercial Code continuation statements and other Uniform
Commercial Code filings have been completed (including, without limitation,
any "precautionary filings" made by each of the Lessees in favor of the
Lessor), all necessary Assignment Agreements have been executed and
delivered pursuant to Section 2.1 of the Master Collateral Agency
Agreement, and all other actions, if any, required to maintain the
perfected security interest of the Trustee or the Master Collateral Agent
on behalf of the Trustee in the Collateral and in the Master Collateral
(except for noting the Lien of the Master Collateral Agent on the
Certificates of Title for the Existing Fleet), have been taken and that the
Trustee or the Master Collateral Agent continues to have a perfected
security interest in the Collateral and Master Collateral;
(h) Initial Report; Annual Reports. An initial report and annual
reports of independent public accountants as follows: On or before October
15, 1998 and on or before April 15 of each calendar year thereafter, the
Master Servicer shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Master
Servicer) to furnish a report to RCFC, the Trustee, the Rating Agencies and
any Enhancement Provider to the effect that (i) they have compared the
mathematical calculations of each amount set forth in the monthly
certificates forwarded by the Master Servicer pursuant to this Lease and
the Master Collateral Agency Agreement during the period covered by such
report (which with respect to the initial report shall be the period from
the closing date to April 30, 1998, and which with respect to each annual
report shall be the period from January 1 to and including December 31 of
the prior calendar year) with the Master Servicer's computer reports which
were the source of such amounts and that on the basis of such comparison,
such accountants are of the opinion that such amounts are in agreement,
except for such exceptions as they believe to be immaterial and such other
exceptions as shall be set forth in such statement, and (ii) they have
examined certain documents and the records relating to the servicing of the
Vehicles leased by such Lessee under this Lease and the other Related
Documents to which the Master Servicer or such Lessee is a party and that,
on the basis of such examination, nothing has come to the attention of such
accountants that would cause such
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accountants to believe that such servicing (including the allocations of
Collections under the Indenture) has not been completed in compliance with
all of the terms and conditions set forth in the Base Indenture, any Series
Supplement, this Lease and the Master Collateral Agency Agreement, except
for (a) such exceptions as such accountants believe to be immaterial and
(b) such other exceptions as shall be set forth in such report, the Master
Servicer shall serve as agent for the users of the report in determining
the sufficiency of such procedure;
(i) Quarterly Non-Program Vehicle Report. Quarterly reports of
independent public accountants as follows: On or before the second
Determination Date immediately following each March 31, June 30, September
30, and December 31 of each year, beginning with March 31, 1998, the Master
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Master Servicer and
who is acceptable to the Rating Agencies) to furnish a report (the
"Quarterly Non-Program Vehicle Report") to the Lessor, the Trustee, the
Rating Agencies and the Master Collateral Agent to the effect that they
have performed certain agreed upon procedures with respect to the
calculation of Disposition Proceeds obtained from the sale or other
disposition of all Non-Program Vehicles (other than Casualties) sold or
otherwise disposed of during each Related Month in such period and compared
such calculations of Disposition Proceeds with the corresponding amounts
set forth in the Daily Reports prepared by the Master Servicer pursuant to
clause (a) above and that on the basis of such comparison such accountants
are of the opinion that such amounts are in agreement, except for such
exceptions as they believe to be immaterial and such other exceptions as
shall be set forth in such report, the Master Servicer shall serve as agent
for the users of the report in determining the sufficiency of such
procedure;
(j) Notice of Final Judgment. Promptly, provide to ▇▇▇▇▇'▇ notice of
any final judgment rendered against the Lessor; and
(k) Other. From time to time, such other information, documents, or
reports regarding the Vehicles or the financial position, the results of
operations or business of the Lessees as the Lessor, the Master Collateral
Agent or the Trustee may from time to time reasonably request in order to
protect the interests of the Lessor, the Master Collateral Agent or the
Trustee under or as contemplated by this Lease or any other Related
Document.
Section 24.5. Taxes and Liabilities. Pay when due all taxes, assessments
and other material (determined on a consolidated basis) liabilities (including,
without limitation, taxes, titling fees and registration fees payable with
respect to Vehicles), except as contested in good faith and by appropriate
proceedings (but only if and so long as forfeiture of any material part of the
Vehicles leased under this Lease will not result from the failure to pay any
such taxes, assessments or other material liabilities during the period of any
such contest) and with respect to
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which (a) adequate reserves have been established, and are being maintained, in
accordance with GAAP, and (b) the failure to make such payments and the
maintaining of such reserves would not have a Material Adverse Effect on such
Person or a Material Adverse Effect on the Noteholders.
Section 24.6. Compliance with Laws. Comply with all Requirements of Law
related to its businesses if the failure so to comply would have a Material
Adverse Effect on such Person.
Section 24.7. Maintenance of Separate Existence. Maintain certain
policies and procedures relating to its existence as a separate corporation as
follows: Each Lessee acknowledges its receipt of a copy of that certain opinion
letter issued by ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, dated as of the Closing Date for the
Series 1998-1 Notes as the initial Series of Notes included in the Group II
Series of Notes and addressing the issue of substantive consolidation as it may
relate to the Lessees and the Lessor. Each Lessee hereby agrees to maintain in
place all policies and procedures, and take and continue to take all actions,
described in the factual assumptions set forth in such opinion letter and
relating to such Lessee; provided, however, that such Lessee may cease to
maintain any policy or procedure if and to the extent that such Lessee delivers
to the Lessor and the Trustee an Opinion of Counsel providing that such policy
or procedure is no longer necessary, due to a change in law or otherwise, for
the rendering of such earlier opinion relating to the issue of substantive
consolidation.
Section 24.8. Master Collateral Agent as Lienholder. Maintain certain
computer records as follows: Concurrently with each leasing of a Vehicle under
this Lease, the Master Servicer and the related Servicer each shall indicate on
its computer records that the Master Collateral Agent as assignee of the Lessor
or the Lessees, as the case may be, is the holder of a Lien on such Vehicle for
the benefit of the Trustee pursuant to the terms of the Master Collateral
Agency Agreement.
Section 24.9. Maintenance of Property. Keep, or cause to be kept, all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted; provided, that nothing in this
Section 24.9 shall require it to maintain, or to make any renewals,
replacements, additions, betterment or improvements of or to, any tangible
property if such property, in its reasonable opinion, is obsolete or surplus or
unfit for use or cannot be used advantageously in the conduct of its business.
Section 24.10. Access to Certain Documentation and Information Regarding
the Collateral. Provide to the Trustee and the Master Collateral Agent
reasonable access to the documentation regarding the Collateral and the Master
Collateral, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to the
normal security and confidentiality procedures of the applicable Lessee, the
applicable Servicer or the Master Servicer, as the case may be, and (iv) at
offices in the continental United States designated by such Lessee, such
Servicer or the Master Servicer, as the
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case may be, which, if they are not the offices where such documentation
normally is kept, shall be accessible without unreasonable effort or expense.
In addition, commencing on the date ten (10) days after the date that a
Lessee or the Master Servicer receives from the Trustee or any Note Owner of
any Note included in the Group II Series of Notes a written request therefor,
which request shall (x) contain a certification of such Note Owner that such
person is a Note Owner and (y) provide an address for delivery, then and
thereafter, unless and until such Lessee or the Master Servicer receives from
such Note Owner a request to discontinue same, the Lessee or the Master
Servicer, as applicable, shall deliver the information specified below directly
to such Note Owner (and, if requested, to one other person as may be specified
in such Note Owner's written request) substantially concurrently with the
delivery by such Lessee or the Master Servicer, as applicable, of such
information to any of the Trustee, any Holder of any Note included in the Group
II Series of Notes or RCFC, provided, however, if such Lessee or the Master
Servicer, as applicable, is not otherwise obligated hereunder to deliver such
information to the Trustee, any Holder of any Note included in the Group II
Series of Notes or RCFC on a periodic basis, then, unless otherwise specified
below, such Lessee or the Master Servicer, as applicable, shall deliver the
following information to such Note Owner on a monthly basis on the same date as
the date on which the Monthly Certificate delivered pursuant to Section 24.4(b)
is delivered:
(i) the Monthly Certificate delivered pursuant to Section
24.4(b);
(ii) the average age of the Lessor's fleet (with respect to
the Vehicles in the Lessor's Fleet that are Group II Vehicles
as of such date);
(iii) copies of any new Vehicle Disposition Programs entered
into by RCFC during the Related Month;
(iv) a statement as to whether a Manufacturer Event of
Default or Lease Event of Default occurred during the Related
Month;
(v) any financial reports required to be delivered under this
Lease;
(vi) the Annual Certificate delivered hereunder;
(vii) the Annual Report delivered hereunder;
(viii) the Quarterly Non-Program Vehicle Report; and
(ix) within ten (10) days after written request, such other
information as is reasonably requested by such Note Owner in
order to satisfy any regulatory requirements of such Note
Owner.
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SECTION 24.11. Maintenance of Credit Enhancement. The Guarantor
agrees to maintain with respect to each Series of Notes included in the Group
II Series of Notes a letter of credit supporting the obligations of the Lessees
under this Lease in a stated amount that is at least equal to the Minimum
Letter of Credit Amount, if any, for such Series of Notes.
SECTION 24.12. Certain Additional Actions. The Master Servicer and
each Servicer shall from time to time, as and when specified in the applicable
Series Supplement for any Series of Notes included in the Group II Series of
Notes, provide such notices to the Trustee and to such other Persons specified
in such Series Supplement, and perform such other actions, as are in each case
specified therein, including without limitation any notices relating to any
letters of credit or other Enhancement provided for under such Series
Supplement, and the establishment of any cash collateral accounts relating
thereto. Without limiting the foregoing, the Master Servicer hereby agrees, in
connection with the Series 1998-1 Supplement, to
(a) provide timely notice to the Trustee as described in
Sections 4.16(a) and 4.16(b) of the Series 1998-1 Supplement upon
satisfaction of the conditions for such notice set forth therein;
(b) establish a new Series 1998-1 Cash Collateral Account
which complies with the terms of Section 4.18(a)of the Series 1998-1
Supplement if the existing Series 1998-1 Cash Collateral Account is
not maintained in accordance with such terms, and instruct the Trustee
to transfer into the new Series 1998-1 Cash Collateral Account all
cash and investments from the non-qualifying Series 1998-1 Cash
Collateral Account, in each case as specified in Section 4.18(a) of
the Series 1998-1 Supplement;
(c) direct (or designate in writing, with notice thereof to
the Trustee, a Person to direct) the investment in Permitted
Investments of funds held in the Series 1998-1 Cash Collateral Account
as specified in Section 4.18(c) of the Series 1998-1 Supplement; and
(d) give such other notices and instructions to the Trustee
as are specified in the Series 1998-1 Supplement.
Section 24.13. Minimum Depreciation Rate. Each Servicer and the
Master Servicer agree that the scheduled daily depreciation charge with respect
to Non-Program Vehicles leased under this Lease shall be established such that
the weighted average Depreciation Charges accruing with respect to each
Non-Program Vehicle during each Related Month shall be at least equal to 1.0%.
Section 24.14. Minimum Fixed Charge Coverage and Interest Coverage
Ratios. On and after the Lease Commencement Date, the Guarantor will not
permit (a) the Interest Coverage Ratio, as of the last day of each Fiscal
Quarter, commencing with the second Fiscal Quarter of the 1998 Fiscal Year of
DTAG, to be less than the ratio of 1.1:1.0, and (b) the Fixed Charge
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Coverage Ratio, commencing with the fourth Fiscal Quarter of the 1998 Fiscal
Year, to be less than the ratio of 1.0:1.0.
Section 24.15. Dividends or other Distributions by Guarantor. On and
after the Lease Commencement Date, DTAG will not declare, pay or make any
Distribution with respect to any shares of its Capital Stock (now or hereafter
outstanding) or on any warrants, options or other rights with respect to any
such shares of Capital Stock (now or hereafter outstanding) or apply, or permit
any of its Subsidiaries to apply, any of its funds, property or assets to the
purchase, redemption, sinking fund or other retirement of, or agree or permit
any of its Subsidiaries to purchase or redeem, any shares of any class of
Capital Stock (now or hereafter outstanding) of the DTAG, or warrants, options
or other rights with respect to any such shares of Capital Stock (now or
hereafter outstanding) of DTAG; provided, however, that the DTAG may declare,
pay and make cash Distributions to its stockholders in any Fiscal Year, so long
as
(i) both before and after giving effect to any such payment, no Lease
Event of Default, Amortization Event, Liquidation Event of Default or
Series 1998-1 Limited Liquidation Event of Default shall have occurred
and be continuing,
(ii) the aggregate amount of such Distribution to be made by DTAG
pursuant to this Section 24.15, when added to the aggregate amount of
all such Distributions during the Fiscal Year in which such
Distribution would be made, does not exceed the amount set forth below
opposite such Fiscal Year
FISCAL YEAR AMOUNT
----------- ------
1998 Fiscal Year $1,000,000
1999 Fiscal Year The lesser of (i) 25% of
Excess Cash Flow for the
1998 Fiscal Year and
(ii) $2,000,000
2000 Fiscal Year The lesser of (i) 25% of
Excess Cash Flow for the
1999 Fiscal Year and
(ii) $4,000,000
2001 Fiscal Year The lesser of (i) 25% of
Excess Cash Flow for the
2000 Fiscal Year and
(ii) $6,000,000
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FISCAL YEAR AMOUNT
----------- ------
2002 Fiscal Year The lesser of (i) 25% of
Excess Cash Flow for the
2001 Fiscal Year and
(ii) $8,000,000
SECTION 25. CERTAIN NEGATIVE COVENANTS. Until the expiration or
termination of this Lease and thereafter until the obligations of the Lessees
are paid in full, each Lessee agrees that, unless at any time the Lessor, the
Master Collateral Agent and the Trustee shall otherwise expressly consent in
writing, it will not:
Section 25.1. Mergers, Consolidations. Be a party to any merger or
consolidation, other than a merger or consolidation of such Lessee into or with
another entity if:
(a) the Person formed by such consolidation or into or with
which such Lessee is merged shall be a Person organized and existing under
the laws of the United States of America or any State or the District of
Columbia, and, if such Lessee is not the surviving entity, shall expressly
assume, by an agreement supplemental hereto executed and delivered to the
Trustee, the performance of every covenant and obligation of such Lessee
hereunder and under all other Related Documents;
(b) such Lessee has delivered to the Trustee an officer's
certificate and an opinion of counsel each stating that such consolidation
or merger and such supplemental agreement comply with this Section 25.1 and
that all conditions precedent herein provided for relating to such
transaction have been complied with; and
(c) the Rating Agency Condition shall be met with respect to
such assignment and succession.
Section 25.2. Other Agreements. Enter into any agreement containing any
provision which would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by it hereunder or in connection herewith.
Section 25.3. Liens. Create or permit to exist any Lien with respect to
any Vehicle leased hereunder now or hereafter existing or acquired, except
Liens in favor of the Lessor, the Master Collateral Agent or the Trustee, the
lien on the Financed Vehicles in favor of the Series 1998-1 Letter of Credit
Provider, and the Liens set forth in Schedule 4, if any, and the following
Liens to the extent such liens in the aggregate would not have a Material
Adverse Effect on the Lessor, the Master Collateral Agent or the Trustee or the
Noteholders under this Lease or the Indenture
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(all the foregoing Liens collectively, the "Permitted Liens"): (i) Liens for
current taxes not delinquent or for taxes being contested in good faith and by
appropriate proceedings, and with respect to which adequate reserves have been
established, and are being maintained, in accordance with GAAP, (ii) Liens,
including judgment liens, arising in the ordinary course of business being
contested in good faith and by appropriate proceedings, and with respect to
which adequate reserves have been established, and are being maintained, in
accordance with GAAP, (iii) Liens incurred in the ordinary course of business
in connection with worker's compensation, unemployment insurance or other forms
of governmental insurance or benefits, and (iv) mechanics' materialmen's,
landlords', warehousemen's and carrier's Liens, and other Liens imposed by law,
securing obligations arising in the ordinary course of business that are being
contested in good faith and by appropriate proceedings and with respect to
which adequate reserves have been established, and are being maintained, in
accordance with GAAP.
Section 25.4. Use of Vehicles. Knowingly use or allow the Program
Vehicles to be used in any manner that would (i) make any such Program Vehicles
ineligible for repurchase by their respective Manufacturers or for sale in
accordance with applicable Auction Procedures, except with respect to the
permitted redesignation of Program Vehicles as Non- Program Vehicles, pursuant
to Section 14, or (ii) subject the Vehicles to confiscation.
SECTION 26. SERVICING COMPENSATION.
Section 26.1. As compensation for its servicing activities hereunder and
reimbursement for its expenses as set forth in Section 26.2, each Servicer and
the Master Servicer shall be entitled to receive from the Lessor a monthly
servicing fee (the "Monthly Servicing Fee"), payable in arrears on each Payment
Date prior to the termination of this Lease, the Indenture and the Master
Collateral Agency Agreement in an amount equal to the sum of the monthly
servicing fees for all Series of Notes included in the Group II Series of
Notes. Except as otherwise specified in the related Series Supplement, the
Monthly Servicing Fee for each Series of Notes included in the Group II Series
of Notes (each, a "Series Monthly Servicing Fee") on each Payment Date shall be
equal to (i) the portion of the Group II Supplemental Servicing Fee allocated
to such Group II Series of Notes pursuant to the related Series Supplement,
plus (ii) one- twelfth of the product of (A) the Servicing Fee Percentage for
such Series and (B) the Invested Amount of such Series as of the preceding
Payment Date (after giving effect to any payments of principal on such date).
The Series Monthly Servicing Fee for each Series of Notes included in the Group
II Series of Notes shall be paid to the Master Servicer (for allocation among
the Master Servicer and the Servicers) pursuant to the procedures set forth in
the applicable Supplement. The supplemental servicing fee (the "Group II
Supplemental Servicing Fee") for any period shall be equal to all Carrying
Charges comprising payments due from the Servicers under Section 26.2 hereof.
Section 26.2. The expenses of each Servicer include, and each Servicer
agrees to pay, its Pro Rata Share of the amounts due to the Trustee pursuant to
Section 9.5 of the Base Indenture and allocable to the Group II Series of
Notes, plus its Pro Rata Share of the reasonable fees and
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disbursements of independent accountants in connection with reports furnished
pursuant to Sections 24.4(h) and (i), plus its allocable share of all other
fees, expenses and indemnities incurred by such Servicer or the Lessor in
connection with the Servicer's activities hereunder or under the Related
Documents. The Servicers, however, shall not be liable for any liabilities,
costs or expenses of the Lessor, the Trustee or the Holders of Notes included
in the Group II Series of Notes arising under any tax law, including without
limitation any Federal, state or local income or franchise taxes or any other
tax imposed on or measured by income (or any interest or penalties with respect
thereto or arising from a failure to comply therewith), except to the extent
incurred as a result of a Servicer's violation of the provisions of this Lease
or of the Related Documents; provided, however, the foregoing provisions of
this sentence shall not affect the indemnification obligations of the Lessees
under Section 15 of this Lease. In the event that a Servicer fails to pay any
amount due to the Trustee pursuant to Section 9.5 of the Base Indenture, the
Trustee will be entitled to receive such amounts due from the Monthly Servicing
Fee prior to payment thereof to such Servicer.
SECTION 27. GUARANTY.
Section 27.1. Guaranty. In order to induce the Lessor to execute and
deliver this Lease and to lease Vehicles hereunder to the Lessees, and in
consideration thereof, the Guarantor hereby (i) unconditionally and irrevocably
guarantees to the Lessor the obligations of each of the Lessees to make any
payments required to be made by them under this Lease, (ii) agrees to cause
each Lessee to duly and punctually perform and observe all of the terms,
conditions, covenants, agreements and indemnities applicable to such Lessee
(whether in its capacity as a Lessee or as a Servicer) under this Lease, and
(iii) agrees that, if for any reason whatsoever, any Lessee (whether in its
capacity as a Lessee or as a Servicer) fails to so perform and observe such
terms, conditions, covenants, agreements and indemnities, the Guarantor will
duly and punctually perform and observe the same (the obligations referred to
in clauses (i) through (iii) above are collectively referred to as the
"Guaranteed Obligations"). The liabilities and obligations of the Guarantor
under the guaranty contained in this Section 27 (this "Guaranty") will be
absolute and unconditional under all circumstances. This Guaranty shall be a
guaranty of payment and not of collection, and the Guarantor hereby agrees that
it shall not be required that the Lessor or the Trustee assert or enforce any
rights against any of the Lessees, the Servicers or any other person before or
as a condition to the obligations of the Guarantor pursuant to this Guaranty.
Section 27.2. Scope of Guarantor's Liability. The Guarantor's obligations
hereunder are independent of the obligations of the Lessees (whether as Lessee
or as Servicer), any other guarantor or any other Person, and the Lessor may
enforce any of its rights hereunder independently of any other right or remedy
that the Lessor may at any time hold with respect to this Lease or any security
or other guaranty therefor. Without limiting the generality of the foregoing,
the Lessor may bring a separate action against the Guarantor without first
proceeding against any of the Lessees, any other guarantor or any other Person,
or any security held by the Lessor, and regardless of whether the Lessees or
any other guarantor or any other Person is
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joined in any such action. The Guarantor's liability hereunder shall at all
times remain effective with respect to the full amount due from the Lessees
hereunder. The Lessor's rights hereunder shall not be exhausted by any action
taken by the Lessor until all Guaranteed Obligations have been fully paid and
performed.
Section 27.3. Lessor's Right to Amend this Lease. The Guarantor
authorizes the Lessor, at any time and from time to time without notice and
without affecting the liability of the Guarantor hereunder, to: (a) alter the
terms of all or any part of the Guaranteed Obligations and any security and
guaranties therefor including without limitation modification of times for
payment and rates of interest; (b) accept new or additional instruments,
documents, agreements, security or guaranties in connection with all or any
part of the Guaranteed Obligations; (c) accept partial payments on the
Guaranteed Obligations; (d) waive, release, reconvey, terminate, abandon,
subordinate, exchange, substitute, transfer, compound, compromise, liquidate
and enforce all or any part of the Guaranteed Obligations and any security or
guaranties therefor, and apply any such security and direct the order or manner
of sale thereof (and bid and purchase at any such sale), as the Lessor in its
discretion may determine; (e) release any Lessee, any guarantor or any other
Person from any personal liability with respect to all or any part of the
Guaranteed Obligations; and (f) assign its rights under this Guaranty in whole
or in part.
Section 27.4. Waiver of Certain Rights by Guarantor. The Guarantor hereby
waives each of the following to the fullest extent allowed by law:
(a) any defense based upon:
(i) the unenforceability or invalidity of any security or
other guaranty for the Guaranteed Obligations or the
lack of perfection or failure of priority of any
security for the Guaranteed Obligations; or
(ii) any act or omission of the Lessor or any other Person
that directly or indirectly results in the discharge
or release of any of the Lessees or any other Person
or any of the Guaranteed Obligations or any security
therefor; provided that the Guarantor's liability in
respect of this Guaranty shall be released to the
extent the Lessor expressly releases such Lessee or
other Person, in a writing conforming to the
requirements of Section 22, from any Guaranteed
Obligations; or
(iii) any disability or any other defense of any Lessee or
any other Person with respect to the Guaranteed
Obligations, whether consensual or arising by
operation of law or any bankruptcy, insolvency or
debtor-relief proceeding, or from any other cause;
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(b) any right (whether now or hereafter existing) to require the
Lessor, as a condition to the enforcement of this Guaranty, to:
(i) accelerate the Guaranteed Obligations;
(ii) give notice to the Guarantor of the terms, time and
place of any public or private sale of any security
for the Guaranteed Obligations; or
(iii) proceed against any Lessee, any other guarantor or
any other Person, or proceed against or exhaust any
security for the Guaranteed Obligations;
(c) presentment, demand, protest and notice of any kind, including
without limitation notices of default and notice of acceptance of this
Guaranty;
(d) all suretyship defenses and rights of every nature otherwise
available under New York law and the laws of any other jurisdiction;
(e) any right that the Guarantor has or may have to set-off with
respect to any right to payment from any Lessee; and
(f) all other rights and defenses the assertion or exercise of which
would in any way diminish the liability of the Guarantor hereunder.
Section 27.5. Lessees' Obligations to Guarantor and Guarantor's
Obligations to Lessees Subordinated. Until all of the Guaranteed Obligations
have been paid in full, the Guarantor agrees that all existing and future
unsecured debts, obligations and liabilities of the Lessees to the Guarantor or
the Guarantor to any of the Lessees (hereinafter collectively referred to as
"Subordinated Debt") shall be and hereby are expressly subordinated to the
prior payment in full of the Guaranteed Obligations, on the terms set forth in
clauses (a) through (e) below, and the payment thereof is expressly deferred in
right of payment to the prior payment in full of the Guaranteed Obligations.
For purposes of this Section 27.5, to the extent the Guaranteed Obligations
consist of the obligation to pay money, the Guaranteed Obligations shall not be
deemed paid in full unless and until paid in full in cash.
(a) Upon any distribution of assets of the Guarantor or any Lessee
upon any dissolution, winding up, liquidation or reorganization of the
Guarantor or such Lessee, whether in bankruptcy, insolvency, reorganization or
receivership proceedings, or upon an assignment for the benefit of creditors or
any other marshaling of the assets and liabilities of the Guarantor or such
Lessee, or otherwise:
(i) the holders of the Guaranteed Obligations shall be
entitled to receive payment in full of the Guaranteed
Obligations before the Guarantor or any
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Lessee, as the case may be, is entitled to receive
any payment on account of the Subordinated Debt;
(ii) any payment by, or distribution of assets of, the
Guarantor or such Lessee of any kind or character,
whether in cash, property or securities, to which
such Lessee or the Guarantor would be entitled except
for this subordination shall be paid or delivered by
the Person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or
liquidating trustee, or otherwise, directly to the
Trustee, for the benefit of the holders of the
Guaranteed Obligations to be held as additional
security for the Guaranteed Obligations in an
interest bearing account until the Guaranteed
Obligations have been paid in full; and
(iii) if, notwithstanding the foregoing, any payment by, or
distribution of assets of, the Guarantor or such
Lessee of any kind or character, whether in cash,
property or securities, in respect of any
Subordinated Debt shall be received by such Lessee or
the Guarantor before the Guaranteed Obligations are
paid in full, such payment or distribution shall be
held in trust in an interest bearing account of the
Guarantor or such Lessee, as appropriate, and
immediately paid over in kind to the holders of the
Guaranteed Obligations until the Guaranteed
Obligations have been paid in full.
(b) The Guarantor authorizes and directs each Lessee and each Lessee
authorizes and directs the Guarantor to take such action as may be necessary or
appropriate to effectuate and maintain the subordination provided herein.
(c) No right of any holder of the Guaranteed Obligations to enforce
the subordination herein shall at any time or in any way be prejudiced or
impaired by any act or failure to act on the part of the Guarantor, any Lessee,
the Lessor or any other Person or by any noncompliance by the Guarantor, any
Lessee, the Lessor or any other Person with the terms, provisions and covenants
hereof or of the Related Documents regardless of any knowledge thereof that any
such holder of the Guaranteed Obligations may have or be otherwise charged
with.
(d) Except as provided in Section 27.9, nothing express or implied
herein shall give any Person other than the Lessees, the Lessor, the Trustee
and the Guarantor any benefit or any legal or equitable right, remedy or claim
hereunder.
(e) If the Guarantor shall institute or participate in any suit,
action or proceeding against any Lessee or any Lessee shall institute or
participate in any suit, action or proceeding against the Guarantor, in
violation of the terms hereof, such Lessee or the Guarantor, as the case may
be, may interpose as a defense or dilatory plea this subordination, and the
holders of the Guaranteed
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Obligations are irrevocably authorized to intervene and to interpose such
defense or plea in their name or in the name of such Lessee or the Guarantor,
as the case may be.
Section 27.6. Guarantor to Pay Lessor's Expenses. The Guarantor
agrees to pay to the Lessor (or the Trustee), on demand, all costs and
expenses, including reasonable attorneys' and other professional and
paraprofessional fees, incurred by the Lessor (or the Trustee) in exercising
any right, power or remedy conferred by this Guaranty, or in the enforcement of
this Guaranty, whether or not any action is filed in connection therewith.
Until paid to the Lessor, such amounts shall bear interest, commencing with the
Lessor's demand therefor, for each Interest Period during the period from the
date of such demand until paid, at the VFR for such Interest Period plus 1%
(calculated on the basis of a 360-day year).
Section 27.7. Reinstatement. This Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time payment of any
of the amounts payable by any Lessee under this Lease is rescinded or must
otherwise be restored or returned by the Lessor, upon an event of bankruptcy,
dissolution, liquidation or reorganization of any Lessee or the Guarantor or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, any Lessee, the Guarantor, any other
Guarantor or any other Person, or any substantial part of their respective
property, or otherwise, all as though such payment had not been made.
Section 27.8. Pari Passu Indebtedness. The Guarantor (i) represents
and warrants that, as of the date hereof, the obligations of the Guarantor
under this Guaranty will rank pari passu with any existing unsecured
indebtedness of the Guarantor and (ii) covenants and agrees that from and after
the date hereof the obligations of the Guarantor under this Guaranty will rank
pari passu with any unsecured indebtedness of the Guarantor incurred after the
date hereof.
Section 27.9. Third-Party Beneficiaries. The Guarantor acknowledges
that the Trustee (on behalf of the Holders of Notes included in the Group II
Series of Notes) has accepted the assignment of the Lessor's rights under this
Lease as collateral for such Notes in reliance on the Guaranty and that the
Trustee (for the benefit of the Holders of such Notes) shall be a third-party
beneficiary hereunder.
SECTION 28. ADDITIONAL LESSEES.
Section 28.1. Additional Lessees. Any direct or indirect Subsidiary
of the Guarantor (each, a "Guarantor Subsidiary") shall have the right to
become a "Lessee" under and pursuant to the terms of this Lease by complying
with the provisions of this Section 28.1. In the event a Guarantor Subsidiary
desires to become a "Lessee" under this Lease, then the Guarantor and such
Guarantor Subsidiary shall execute (if appropriate) and deliver to the Lessor
and the Trustee:
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(a) a Joinder in Lease Agreement in the form attached hereto
as Attachment D (each, an "Affiliate Joinder in Lease");
(b) the certificate of incorporation for such Guarantor
Subsidiary, duly certified by the Secretary of State of the
jurisdiction of such Guarantor Subsidiary's incorporation, together
with a copy of the by-laws of such Guarantor Subsidiary, duly
certified by a Secretary or Assistant Secretary of such Guarantor
Subsidiary;
(c) copies of resolutions of the Board of Directors of such
Guarantor Subsidiary authorizing or ratifying the execution, delivery
and performance, respectively, of those documents and matters required
of it with respect to this Lease, duly certified by the Secretary or
Assistant Secretary of such Guarantor Subsidiary;
(d) a certificate of the Secretary or Assistant Secretary of
such Guarantor Subsidiary certifying the names of the individual or
individuals authorized to sign the Affiliate Joinder in Lease and the
other Related Documents to be executed by it, together with samples of
the true signatures of each such individual;
(e) a good standing certificate for such Guarantor
Subsidiary in the jurisdiction of its incorporation and the
jurisdiction of its principal place of business;
(f) a written search report from a Person satisfactory to
the Lessor and the Trustee listing all effective financing statements
that name such Guarantor Subsidiary as debtor or assignor, and that
are filed in the jurisdictions in which filings were made pursuant to
clause (g) below, together with copies of such financing statements,
and tax and judgment lien search reports from a Person satisfactory to
the Lessor and the Trustee showing no evidence of liens filed against
such Guarantor Subsidiary that purport to affect any Vehicles leased
hereunder or any Collateral under the Indenture;
(g) evidence of the filing of proper financing statements on
Form UCC-1 naming such Guarantor Subsidiary, as debtor, and the Lessor
as secured party covering the collateral described in Section 2(b)
hereof;
(h) an Officers' Certificate and an opinion of counsel each
stating that such joinder by such Guarantor Subsidiary complies with
this Section 28.1 and that all conditions precedent herein provided
for relating to such transaction have been complied with;
(i) a statement from each of the Rating Agencies that such
Guarantor Subsidiary becoming a "Lessee" under this Lease will not
cause a failure to meet the Rating Agency Condition; and
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55
(j) any additional documentation that the Lessor or the
Trustee may reasonably require to evidence the assumption by such
Guarantor Subsidiary of the obligations and liabilities set forth in
this Lease.
Upon satisfaction of the foregoing conditions and receipt by such Guarantor
Subsidiary of the applicable Affiliate Joinder in Lease executed by the Lessor,
such Guarantor Subsidiary shall for all purposes be deemed to be a "Lessee" for
purposes of this Lease (including, without limitation, the Guaranty which is a
part of this Lease) and shall be entitled to the benefits and subject to the
liabilities and obligations of a Lessee hereunder.
SECTION 29. BANKRUPTCY PETITION AGAINST LESSOR. Each Lessee and the
Guarantor hereby covenants and agrees that, prior to the date which is one year
and one day after the payment in full of all Series of Notes issued by the
Lessor, it will not institute against, or join any other Person in instituting
against, the Lessor any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the
United States or any state of the United States. In the event that a Lessee
(or any sublessee thereof) or the Guarantor takes action in violation of this
Section 29, the Lessor agrees, for the benefit of the Noteholders, that it
shall file an answer with the bankruptcy court or otherwise properly contest
the filing of such a petition by such Lessee or the Guarantor against the
Lessor or the commencement of such action and raise the defense that such
Lessee or the Guarantor, as applicable, has agreed in writing not to take such
action and should be estopped and precluded therefrom and such other defenses,
if any, as its counsel advises that it may assert. The provisions of this
Section 29 shall survive the termination of this Lease.
SECTION 30. SUBMISSION TO JURISDICTION. THE LESSOR, THE MASTER
COLLATERAL AGENT AND THE TRUSTEE MAY ENFORCE ANY CLAIM ARISING OUT OF THIS
LEASE IN ANY STATE OR FEDERAL COURT HAVING SUBJECT MATTER JURISDICTION,
INCLUDING, WITHOUT LIMITATION, ANY STATE OR FEDERAL COURT LOCATED IN THE STATE
OF NEW YORK IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY. FOR THE PURPOSE OF
ANY ACTION OR PROCEEDING INSTITUTED WITH RESPECT TO ANY SUCH CLAIM, EACH LESSEE
AND THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH
COURTS. EACH LESSEE AND THE GUARANTOR HEREBY IRREVOCABLY DESIGNATES CT
CORPORATION SYSTEM, INC., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, TO RECEIVE
FOR AND ON BEHALF OF SUCH LESSEE AND GUARANTOR SERVICE OF PROCESS IN NEW YORK.
EACH LESSEE AND THE GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF SAID COURTS BY MAILING A COPY THEREOF, BY REGISTERED MAIL,
POSTAGE PREPAID, TO SUCH LESSEE OR THE GUARANTOR, AS APPLICABLE, AND AGREES
THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW, (I) SHALL BE DEEMED
IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT, ACTION
OR PROCEEDING AND (II) SHALL BE TAKEN AND
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HELD TO BE VALID PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO IT. Nothing
herein contained shall affect the right of the Lessor to serve process in any
other manner permitted by law or preclude the Lessor, the Master Collateral
Agent or the Trustee from bringing an action or proceeding in respect hereof in
any other country, state or place having jurisdiction over such action. EACH
LESSEE AND THE GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT LOCATED IN THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN IN NEW YORK
CITY AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 31. GOVERNING LAW. THIS LEASE SHALL BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES. Whenever possible each provision of this Lease
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Lease shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Lease. All obligations of the
Lessees and the Guarantor and all rights of the Lessor, the Master Collateral
Agent or the Trustee expressed herein shall be in addition to and not in
limitation of those provided by applicable law or in any other written
instrument or agreement.
SECTION 32. JURY TRIAL. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS LEASE OR ANY OTHER RELATED DOCUMENT TO WHICH IT IS A
PARTY, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM
ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS LEASE OR ANY RELATED
TRANSACTION, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 33. NOTICES. All notices, requests and other communications
to any party or signatory hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party or signatory,
addressed to it, at its address or facsimile number set forth on the signature
pages below, or at such other address or facsimile number as such party may
hereafter specify for such purpose by notice (in accordance with this Section
33) to the other parties and signatories hereto. In each case, a copy of all
notices, requests and other communications (other than any such notices,
requests and other communications in the ordinary course of business) that are
sent by any party or signatory hereunder shall be sent to the Trustee.
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Copies of notices, requests and other communications delivered to the Trustee
pursuant to the foregoing sentence shall be sent to the following address:
Bankers Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency
Group/Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Each such notice, request or communication shall be effective when received at
the address specified below. Copies of all facsimile notices must be sent by
first class mail promptly after such transmission by facsimile.
SECTION 34. HEADINGS. Section headings used in this Lease are for
convenience of reference only and shall not affect the construction of this
Lease.
SECTION 35. EXECUTION IN COUNTERPARTS. This Lease may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together,
shall constitute one and the same Agreement.
SECTION 36. EFFECTIVENESS. This Lease shall become effective on the
Lease Commencement Date, subject to (i) the requirement that the
representations and warranties contained in Section 23 shall be true and
correct in all respects (except to the extent any such representation and
warranty does not incorporate a materiality limitation in its terms and the
failure of such representation and warranty to be true and correct in all
respects does not have a Material Adverse Effect on the interest of the Lessor,
the Trustee or the Secured Parties) and (ii) the prior or concurrent delivery
of each of the following documents to the Lessor (in form and substance
satisfactory to the Lessor):
(a) Certificate of Incorporation. The certificate of
incorporation of each Lessee (other than the Additional Lessees) and
the Guarantor, duly certified by the Secretary of State of the
jurisdiction of its incorporation, together with a copy of its
by-laws, duly certified by the Secretary or an Assistant Secretary of
such Lessee or the Guarantor, as applicable;
(b) Resolutions. Copies of resolutions of the Board of
Directors of each Lessee (other than the Additional Lessees) and the
Guarantor authorizing or ratifying the execution, delivery and
performance of those documents and matters required of it with
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respect to this Lease, duly certified by the Secretary or Assistant
Secretary of such Lessee or the Guarantor, as applicable;
(c) Consents, etc. Certified copies of all documents
evidencing any necessary corporate action, consents and governmental
approvals (if any) with respect to this Lease;
(d) Incumbency and Signatures. A certificate of the
Secretary or an Assistant Secretary of each Lessee (other than the
Additional Lessees) and the Guarantor certifying the names of the
individual or individuals authorized to sign this Lease and the other
Related Documents to be executed by it (in such capacity or
otherwise), together with a sample of the true signature of each such
individual (the Lessor, the Master Collateral Agent and the Trustee
may conclusively rely on each such certificate until formally advised
by a like certificate of any changes therein);
(e) Opinions of Counsel. (i) The opinion of ▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇, addressed to the Lessees (other than the Additional Lessees),
the Lessor, the Trustee, the Master Collateral Agent, the Enhancement
Providers and the Rating Agencies; (ii) the opinion of each
Manufacturer, as required by the Rating Agencies, addressed to the
Lessees, the Lessor, the Trustee, the Master Collateral Agent, the
Enhancement Providers and the Rating Agencies; (iii) the opinion of
counsel to each Enhancement Provider, addressed to the Lessees, the
Lessor, the Trustee, the Master Collateral Agent and the Rating
Agencies; (iv) the opinion of White & Case, counsel to the Trustee,
addressed to the Lessees, the Lessor, the Master Collateral Agent and
each Enhancement Provider; and (v) the opinion of Hall, Estill,
Hardwick, Gable, Golden & ▇▇▇▇▇▇, Oklahoma counsel to the Lessees, the
Servicers and the Master Servicer addressed to the Lessor, the
Trustee, the Master Collateral Agent, the Enhancement Providers and
the Rating Agencies, in each case, satisfactory in form and substance
to the addressees thereof;
(f) Good Standing Certificates. Certificates of good
standing for each Lessee (other than the Additional Lessees) and the
Guarantor in the jurisdiction of its organization and the jurisdiction
of its principal place of business;
(g) Search Reports. Search reports satisfactory to the
Lessor and the Trustee listing all effective financing statements that
name a Lessee as debtor or assignor and that are filed in the
jurisdictions in which filings were made pursuant to subsection (h)
below, together with copies of such financing statements, and tax and
judgment lien search reports from a Person satisfactory to the Lessor
and the Trustee showing no evidence of such liens filed against such
Lessee;
(h) Evidence. Evidence of the filing of proper financing
statements on Form UCC-1, (i) naming each Lessee (other than the
Additional Lessees) as debtor and the Master Collateral Agent as
secured party or other, similar instruments or documents, as
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may be necessary or desirable under the UCC of all applicable
jurisdictions to perfect the Master Collateral Agent's interest in the
Master Collateral with respect to which the Trustee is designated as
the Beneficiary on behalf of the Holders of any Series of Notes
included in the Group II Series of Notes and (ii) naming each Lessee
(other than the Additional Lessees) as debtor, the Lessor as secured
party and the Master Collateral Agent as assignee, as may be necessary
or desirable under the UCC of all applicable jurisdictions to perfect
the security interest (with respect the Financing Lease) and the
precautionary security interest (with respect to the Operating Lease)
of the Lessor hereunder and the assignment of the same to the Master
Collateral Agent;
(i) Master Collateral Agency Agreement. An executed copy of
the Master Collateral Agency Agreement;
(j) Lease. Original counterpart No. 1 of this Lease shall be
delivered to the Trustee with receipt acknowledged thereby;
(k) Vehicle Title Nominee Agreement. An executed copy of the
Vehicle Title Nominee Agreement;
(l) Assignment Agreement. An executed copy of the Assignment
Agreement of each Manufacturer of Program Vehicles (including Existing
Vehicles) which will be leased under this Lease on the Closing Date
for the Series 1998-1 Notes;
(m) Certified Copy of Manufacturer Program. A copy of each
Manufacturer Program relating to Vehicles which will be leased
hereunder and an Officer's Certificate, dated the Closing Date for the
Series 1998-1 Notes, and duly executed by an Authorized Officer of the
Lessee, certifying that each such copy is true, correct and complete
as of the Closing Date for the Series 1998-1 Notes;
(n) The Indenture Supplement. Copies of the Series 1998-1
Supplement, dated as of the Series 1998-1 Closing Date, and the Base
Indenture, in each case duly executed by the Lessor and the Trustee,
and all conditions to the effectiveness thereof and the issuance of
the Notes thereunder shall have been satisfied or waived in all
respects;
(o) Series 1998-1 Letter of Credit. The Series 1998-1 Letter
of Credit, issued by Credit Suisse First Boston, with an initial
stated amount of $5,000,000; and
(p) Other. Such other documents as the Trustee or the Lessor
may reasonably request.
[Signatures on following pages.]
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IN WITNESS WHEREOF, the parties have executed this Lease or caused it
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
LESSOR:
RENTAL CAR FINANCE CORP.
By:
---------------------------------
Name:
Title:
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LESSEES AND SERVICERS:
THRIFTY RENT-A-CAR SYSTEM, INC.
By:
---------------------------------
Name:
Title:
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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DOLLAR RENT A CAR SYSTEMS, INC.
By:
---------------------------------
Name:
Title:
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
GUARANTOR
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
By:
---------------------------------
Name:
Title:
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
COUNTERPART NO. ___ OF TEN (10) SERIALLY NUMBERED MANUALLY EXECUTED
COUNTERPARTS. TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL
PAPER UNDER THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT
MAY BE CREATED THROUGH THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER
THAN MANUALLY EXECUTED COUNTERPART NO. 1.
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The Trustee does hereby acknowledge, by its signature below, receipt
of this Counterpart No. 1.
TRUSTEE
BANKERS TRUST COMPANY
By:
---------------------------------
Name:
Title:
Address: ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency
Group/Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Acknowledged by:
MASTER COLLATERAL AGENT
BANKERS TRUST COMPANY
By:
----------------------------
Name:
Title:
Address: ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency
Group/Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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ANNEX A
ANNEX
TO THE
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
Dated as of March 4, 1998
among
RENTAL CAR FINANCE CORP.
as Lessor,
THRIFTY RENT-A-CAR-SYSTEM, INC.,
as Lessee and Servicer,
DOLLAR RENT A CAR SYSTEMS, INC.,
as Lessee and Servicer,
and those Subsidiaries
of Dollar Thrifty Automotive Group, Inc.
from time to time
becoming Lessees and Servicers under such Master Motor
Vehicle Lease and Servicing Agreement
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
as Guarantor and Master Servicer
64
1. Scope of Annex. This Annex A shall apply only to the acquisition,
leasing and servicing of the Acquired Vehicles by the Lessor pursuant to the
Base Lease, as supplemented by this Lease Annex (collectively, the "Operating
Lease").
2. General Agreement. With respect to the Acquired Vehicles, each
Lessee and the Lessor each intend that the Base Lease, as supplemented by this
Lease Annex, is an operating lease and that the relationship between the Lessor
and the Lessees pursuant thereto and hereto shall always be only that of lessor
and lessee, and each Lessee hereby declares, acknowledges and agrees that the
Lessor has title to and is the owner of the Acquired Vehicles. The Lessees
shall not acquire by virtue of the Lease any right, equity, title or interest
in or to any Acquired Vehicles, except the right to use the same under the
terms of the Operating Lease hereof. The parties agree that this Operating
Lease is a "true lease" for all legal, accounting, tax and other purposes and
agree to treat this Operating Lease, as it applies to the Acquired Vehicles, as
an operating lease for all purposes, including tax, accounting and otherwise.
The parties will file all federal, state and local tax returns and reports in a
manner consistent with the preceding sentence.
3. Operating Lease Commitment. (a) Upon the execution and delivery
of this Operating Lease, the Lessor shall, subject to the terms and conditions
of the Agreement, purchase from time to time on or after the Lease Commencement
Date and prior to the Lease Expiration Date, all Acquired Vehicles identified
in Vehicle Orders placed by a Lessee for a purchase price equal to the Initial
Acquisition Cost thereof, and simultaneously therewith, the Lessor shall under
the Operating Lease enter into operating leases with such Lessee with respect
to such Vehicles; provided, that the aggregate Net Book Value of Acquired
Vehicles leased hereunder on any date shall not exceed (a) the Maximum Lease
Commitment, less (b) the Base Amount as of such date with respect to the
Financing Lease.
4. Lease Procedures. In connection with the Lease of any Acquired
Vehicles to be leased on or after the Lease Commencement Date, to evidence the
acquisition of such Acquired Vehicles by the Lessor, the applicable Lessee
shall deliver to the Lessor the following:
(a) a Vehicle Order (including a Vehicle Acquisition
Schedule) with respect to all Acquired Vehicles to be leased by such
Lessee on the Lease Commencement Date;
(b) UCC termination statements terminating, or UCC partial
releases releasing, any security interests and other liens (other than
Permitted Liens) in favor of any Person with respect to each Acquired
Vehicle leased on the Lease Commencement Date and identified in such
Vehicle Order, and any related Vehicle Disposition Programs;
(c) with respect to the initial lease of Acquired Vehicles by
such Lessee, a fully executed Assignment Agreement covering each
Program Vehicle leased under this Annex A on the Lease Commencement
Date or to be leased under this Annex A on any date
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thereafter, the related Vehicle Disposition Programs, and any other
Master Collateral relating to such Vehicles.
Each Lessee hereby agrees that each such delivery of a Vehicle Order
shall be deemed hereunder to constitute a representation and warranty by the
Lessee, to and in favor of the Lessor and the Trustee, that all the conditions
precedent to the acquisition and leasing of the Vehicles identified in such
Vehicle Order have been satisfied as of the date of such Vehicle Order.
5. Maximum Vehicle Lease Term. The maximum Vehicle lease term of the
Operating Lease as it relates to each Acquired Vehicle leased hereunder shall
be from the Vehicle Lease Commencement Date to the date that is 24 months from
the date of the original new vehicle dealer invoice for such Acquired Vehicle.
On the occurrence of such date for a Vehicle not previously disposed of, the
applicable Lessee shall, (a) on behalf of the Lessor, promptly dispose of such
Vehicle in accordance with the terms hereof and in accordance with any
instructions of the Lessor for such disposition, (b) in each case, provide that
Disposition Proceeds be paid directly to the Master Collateral Account for the
benefit of the Trustee and (c) pay to the Master Collateral Agent or the
Trustee, in accordance with this Operating Lease, any other amounts unpaid and
owing from such Lessee under the Lease in respect of such Vehicle.
6. Lessee's Rights to Purchase Vehicles. Each Lessee will have the
option, exercisable with respect to any Acquired Vehicle during the Vehicle
Term with respect to such Acquired Vehicle, to purchase any Vehicles leased by
it under the Lease at the Vehicle Purchase Price, in which event such Lessee
will pay the Vehicle Purchase Price to the Master Collateral Agent on or before
the Due Date next succeeding such purchase by the Lessee plus all accrued and
unpaid Monthly Base Rent and Monthly Variable Rent with respect to such Vehicle
through the date of such purchase. In addition, each Lessee will have the
option, exercisable with respect to any Manufacturer Receivable related to an
Acquired Vehicle which was leased by such Lessee under this Lease, to purchase
such Manufacturer Receivable for a price equal to the amount due from the
Manufacturer under such Manufacturer Receivable, in which event the Lessee will
pay such amount to the Master Collateral Agent on or before the Payment Date
next succeeding such purchase by the Lessee. Upon receipt of such funds by the
Master Collateral Agent, the Lessor, at the request of the Lessee, shall cause
title to any such Vehicle or Manufacturer Receivable, as applicable, to be
transferred to the applicable Lessee, and the lien of the Master Collateral
Agent on such Vehicle shall be released thereby.
7. Vehicle Disposition. The Lessor and each Lessee agree that, with
respect to Acquired Vehicles, the applicable Lessee shall use its commercially
reasonable efforts to deliver each Program Vehicle leased by it under the Lease
for sale in accordance with the applicable Auction Procedures or to return such
related Program Vehicle to the related Manufacturer (a) not prior to the end of
the Minimum Term for such Vehicle, and (b) not later than the end of the
Maximum Term for such Vehicle; provided, however, if for any reason, such
Lessee fails to deliver such a Program Vehicle to the applicable Manufacturer
for repurchase by the Manufacturer or in
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accordance with the applicable Auction Procedures, in each case in accordance
with the applicable Vehicle Disposition Program during the time period between
the expiration of the Minimum Term and the expiration of the Maximum Term, such
Lessee shall be obligated to sell or otherwise dispose of such Program Vehicle
and pay a Late Return Payment with respect thereto, in each case as provided in
Section 13 of the Base Lease. Each Lessee shall, with respect to Acquired
Vehicles leased by it under this Operating Lease, pay the equivalent of the
Rent for the Minimum Term for Program Vehicles returned before the Minimum
Term, regardless of actual usage, unless such a Program Vehicle is a Casualty,
which will be handled in accordance with Section 7 of the Base Lease. All
Disposition Proceeds, Repurchase Payments and Guaranteed Payments due from the
disposition of Program Vehicles pursuant to this Section shall be due and
payable to the Lessor. The Lessor and each Lessee agree, with respect to
Acquired Vehicles, that such Lessee shall use its commercially reasonable
efforts to dispose of each Non-Program Vehicle leased to it under this
Operating Lease (a) in a manner most likely to maximize proceeds from such
disposition and consistent with industry practice and (b) within twenty-four
(24) months after the date of the original new vehicle dealer invoice for such
Vehicle. All Disposition Proceeds due from the disposition of Non-Program
Vehicles pursuant to this Section shall be due and payable to the Lessor.
8. Lessor's Right to Cause Vehicles to be Sold. Notwithstanding
anything to the contrary contained in the Lease, the Lessor shall have the
right, at any time after the date thirty (30) days prior to the expiration of
the Maximum Term for any Program Vehicle leased under this Annex A, to require
that the Lessee in respect of such Program Vehicle deliver such Program Vehicle
to the Manufacturer for repurchase or, as applicable, to the designated auction
site, or exercise commercially reasonable efforts to arrange for the sale of
such Program Vehicle to a third party for a price greater than the Net Book
Value thereof, in which event the Lessee shall, prior to the expiration of such
Maximum Term, deliver such Vehicle to its Manufacturer or the designated
auction site or arrange for the sale of such Program Vehicle to a third party
for a price greater than the Net Book Value (or purchase the Program Vehicle
itself from the Lessor for the Vehicle Purchase Price). If a sale of the
Program Vehicle is arranged by a Lessee prior to the expiration of such Maximum
Term, then such Lessee shall deliver the Program Vehicle to the purchaser
thereof, the Lien of the Master Collateral Agent on the Certificate of Title of
such Program Vehicle shall be released, and such Lessee shall cause to be
delivered to the Lessor the funds paid for such Program Vehicle by the
purchaser. If a Lessee is unable to arrange for a sale of the Program Vehicle
prior to the expiration of such Maximum Term, then such Lessee shall cease
attempting to arrange for such a sale and shall return such Program Vehicle to
the applicable Manufacturer or tender such Program Vehicle in accordance with
applicable Auction Procedures or purchase such Vehicle as herein provided. In
no event may any Program Vehicle be sold pursuant to this paragraph 8 (other
than pursuant to a Vehicle Disposition Program) unless the funds to be paid to
the Lessor arising out of such sale exceed the Net Book Value of such Vehicle
less reasonably predictable Excess Mileage charges, Excess Damage Charges and
other similar charges imposed by the Manufacturer.
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9. Calculation of Rent. Rent shall be due and payable on a monthly
basis as set forth in this paragraph 9:
"Monthly Base Rent", with respect to each Due Date and each
Acquired Vehicle leased under the Lease on any day during the Related
Month, shall be the sum of all Depreciation Charges that have accrued
with respect to such Vehicle during the Related Month.
"Monthly Variable Rent", with respect to each Due Date and
each Acquired Vehicle leased under the Lease on any day during the
Related Month, shall equal the sum, without double counting, of (a)
the product of (i) an amount equal to the Net Book Value of such
Acquired Vehicle on the first day contained within both the Related
Month and the Vehicle Term with respect to such Vehicle multiplied by
the VFR for the Interest Period ending on the next succeeding Payment
Date and (ii) the quotient obtained by dividing (A) the number of days
contained within both the Related Month and the Vehicle Term with
respect to such Acquired Vehicle by (B) the total number of days in
the Related Month plus (b) the product of (i) an amount equal to all
Carrying Charges for the Related Month, and (ii) the quotient obtained
by dividing the Net Book Value of such Acquired Vehicle as of the
first day of the Related Month by the Net Book Value of all Vehicles
leased under the Lease as of the first day of the Related Month.
"VFR", for any Interest Period with respect to any Group II
Series of Notes, is an interest rate equal to the quotient, expressed
as a percentage, of (i) the amount of interest accrued during such
Interest Period with respect to all Group II Series of Notes divided
by (ii) the average daily Aggregate Principal Balance of all such
Group II Series of Notes during such period.
"Rent" means Monthly Base Rent plus Monthly Variable Rent.
10. Payment of Rent and Other Payments.
(a) Monthly Base Rent. On each Due Date, each Lessee shall
pay to the Lessor the Monthly Base Rents that have accrued during the
Related Month with respect to all Vehicles that were leased by such
Lessee under this Operating Lease on any day during the Related Month;
(b) Monthly Variable Rent. On each Due Date, each Lessee
shall pay to the Lessor the Monthly Variable Rents that have accrued
during the Related Month with respect to all Vehicles that were leased
by such Lessee under this Operating Lease on any day during the
Related Month;
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(c) Termination Payments, Casualty Payments and Late Return
Payments. On each Due Date, each Lessee shall pay to the Lessor all
Termination Payments, Casualty Payments and Late Return Payments with
respect to Vehicles leased by such Lessee under this Operating Lease
as provided in Section 5.4 of the Base Lease; and
(d) Certain Other Payments. Each Lessee shall cause all
Disposition Proceeds, Repurchase Payments, Guaranteed Payments and
Incentive Payments payable in respect of Acquired Vehicles leased by
it under this Operating Lease, to be paid directly to the Master
Collateral Agent for the benefit of the Trustee. The Servicer and the
Lessees each agree that in the event that the Servicer or a Lessee
shall receive directly any such payment, including cash, securities,
obligations or other property, the Servicer or such Lessee, as the
case may be, shall accept the same as the Master Collateral Agent's
agent and shall hold the same in trust on behalf of and for the
benefit of the Master Collateral Agent, and shall deposit the same,
within two (2) Business Days after receipt thereof, into the Master
Collateral Account in the same form received, with the endorsement of
the Servicer or such Lessee, as the case may be, when necessary or
appropriate.
11. Net Lease. THE OPERATING LEASE SHALL BE A NET LEASE, AND EACH
LESSEE'S OBLIGATION TO PAY ALL RENT AND OTHER SUMS HEREUNDER SHALL BE ABSOLUTE
AND UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY ABATEMENT OR REDUCTION FOR
ANY REASON WHATSOEVER. The obligations and liabilities of the Lessees
hereunder shall in no way be released, discharged or otherwise affected (except
as may be expressly provided herein including, without limitation, the right of
a Lessee to reject Vehicles pursuant to Section 2.2 of the Base Lease) for any
reason, including without limitation: (i) any defect in the condition,
merchantability, quality or fitness for use of the Vehicles or any part
thereof; (ii) any damage to, removal, abandonment, salvage, loss, scrapping or
destruction of or any requisition or taking of the Vehicles or any part
thereof; (iii) any restriction, prevention or curtailment of or interference
with any use of the Vehicles or any part thereof; (iv) any defect in or any
Lien on title to the Vehicles or any part thereof; (v) any change, waiver,
extension, indulgence or other action or omission in respect of any obligation
or liability of a Lessee or the Lessor; (vi) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceeding relating to such Lessee, the Lessor or any other Person, or any
action taken with respect to this Operating Lease by any trustee or receiver of
any Person mentioned above, or by any court; (vii) any claim that such Lessee
has or might have against any Person, including without limitation the Lessor;
(viii) any failure on the part of the Lessor to perform or comply with any of
the terms hereof or of any other agreement; (ix) any invalidity or
unenforceability or disaffirmance of this Operating Lease or any provision
hereof or any of the other Related Documents or any provision of any thereof,
in each case whether against or by such Lessee or otherwise; (x) any insurance
premiums payable by such Lessee with respect to the Vehicles; or (xi) any other
occurrence whatsoever, whether similar or dissimilar to the foregoing, whether
or not such Lessee shall have notice or knowledge of any of the foregoing and
whether or not foreseen or foreseeable. This Operating Lease shall be
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noncancelable by any Lessee and, except as expressly provided herein, each
Lessee, to the extent permitted by law, waives all rights now or hereafter
conferred by statute or otherwise to quit, terminate or surrender this
Operating Lease, or to any diminution or reduction of Rent payable by the
Lessee hereunder. All payments by a Lessee made hereunder shall be final
(except to the extent of adjustments provided for herein), absent manifest
error and, except as otherwise provided herein, no Lessee shall seek to recover
any such payment or any part thereof for any reason whatsoever, absent manifest
error. If for any reason whatsoever this Operating Lease shall be terminated
in whole or in part by operation of law or otherwise except as expressly
provided herein, each Lessee shall nonetheless pay an amount equal to each Rent
payment at the time and in the manner that such payment would have become due
and payable under the terms of this Operating Lease as if it had not been
terminated in whole or in part. All covenants and agreements of the Lessees
herein shall be performed at its cost, expense and risk unless expressly
otherwise stated.
12. Liens. Except for Permitted Liens, each Lessee shall keep all
Acquired Vehicles leased by it free of all Liens arising during the Term. Upon
the Vehicle Lease Expiration Date for each Acquired Vehicle leased hereunder,
the Lessor may, in its discretion, remove any such Lien and any sum of money
that may be paid by the Lessor in release or discharge thereof, including
reasonable attorneys' fees and costs, will be paid by the applicable Lessee
upon demand by the Lessor. The Lessor may grant security interests in the
Acquired Vehicles without consent of the applicable Lessee; provided, however,
that if any such Liens would interfere with the rights of such Lessee under
this Operating Lease or any sublessee of such Lessee, the Lessor must obtain
the prior written consent of such Lessee. Each Lessee acknowledges that the
granting of Liens and the taking of other actions pursuant to the Indenture and
the Related Documents does not interfere with the rights of such Lessee under
this Operating Lease.
13. Non-Disturbance. So long as a Lessee satisfies its obligations
hereunder, its quiet enjoyment, possession and use of the Acquired Vehicles
will not be disturbed during the Term subject, however, to paragraph 8 of this
Annex A and except that the Lessor, the Master Collateral Agent and the Trustee
each retains the right, but not the duty, to inspect the Acquired Vehicles
without disturbing the ordinary conduct of such Lessee's business and except as
may be required as a consequence of a Liquidation Event of Default or Series
1998-1 Limited Liquidation Event of Default or certain optional prepayments of
a Series of Notes. Upon the request of the Lessor, the Master Collateral Agent
or the Trustee, from time to time, each Lessee will make reasonable efforts to
confirm to the Lessor, the Master Collateral Agent and the Trustee the
location, mileage and condition of each Acquired Vehicle and to make available
for the Lessor's, the Master Collateral Agent's or the Trustee's inspection
within a reasonable time period, not to exceed forty-five (45) days, the
Acquired Vehicles leased by such Lessee at the location where the Acquired
Vehicles are normally located. Further, each Lessee (and each related
Franchisee) will, during normal business hours and with a notice of three (3)
Business Days, make its records pertaining to such Acquired Vehicles available
to the Lessor, the Master
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Collateral Agent or the Trustee for inspection at the location where such
Lessee's (and each such related Franchisee's) records are normally domiciled.
14. Certain Risks of Loss Borne by Lessees. Upon delivery of each
Vehicle to a Lessee, as between the Lessor and such Lessee, such Lessee assumes
and bears the risk of loss, damage, theft, taking, destruction, attachment,
seizure, confiscation or requisition and all other risks and liabilities with
respect to such Vehicle, including personal injury or death and property
damage, arising with respect to any Vehicle due to the manufacturer, purchase,
acceptance, rejection, delivery, leasing, subleasing, possession, use,
inspection, registration, operation, condition, maintenance, repair or storage
of such Vehicle, howsoever arising.
15. Title. This is an agreement to lease only, and title to the
Acquired Vehicles will at all times remain in the Lessor's name. The Lessees
will not have any rights or interest in such Vehicles whatsoever other than the
rights of possession and use and the right to sublease such Vehicles as
provided by the Lease. In addition, each Lessee, by its execution hereof,
acknowledges and agrees that (i) the Lessor is the sole owner and holder of all
right, title and interest in and to the Vehicle Disposition Programs as they
relate to the Vehicles leased hereunder and (ii) such Lessee has no right,
title or interest in any Vehicle Disposition Program as it relates to any
Vehicle leased hereunder. To confirm the foregoing, each Lessee, by its
execution of the Base Lease of which this Annex A is a part, hereby assigns and
transfers to the Lessor any rights that such Lessee may have in respect of any
Vehicle Disposition Programs as they relate to the Vehicles leased hereunder.
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ANNEX B
ANNEX
TO THE
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
Dated as of March 4, 1998
between
RENTAL CAR FINANCE CORP.
as Lessor,
THRIFTY RENT-A-CAR-SYSTEM, INC.,
as Lessee and Servicer,
DOLLAR RENT A CAR SYSTEMS, INC.,
as Lessee and Servicer,
and those Subsidiaries
of Dollar Thrifty Automotive Group, Inc.
from time to time
becoming Lessees and Servicers under such
Master Motor Vehicle Lease and
Servicing Agreement
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
as Guarantor and Master Servicer
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1. Scope of Annex. This Annex B shall apply only to the acquisition
or financing, leasing and servicing of the Financed Vehicles by RCFC pursuant
to the Base Lease, as supplemented by this Lease Annex (collectively, the
"Financing Lease").
2. General Agreement. With respect to the Financed Vehicles, each
Lessee and the Lessor each intend that the Base Lease, as supplemented by this
Lease Annex, constitute a financing arrangement and the Lessor hereby declares,
acknowledges and agrees that the ownership of the Financed Vehicles rests
solely with such Lessee subject to the security interest granted hereunder to
the Lessor.
3. Financing Lease Commitment. Subject to the terms and conditions
of this Financing Lease, upon execution and delivery of this Financing Lease,
the Lessor shall (i) on or after the Lease Commencement Date purchase, finance
or refinance Vehicles in the Existing Fleet and other Refinanced Vehicles
identified in Refinancing Schedules for a purchase price equal to the aggregate
Net Book Value thereof, and (ii) from time to time on or after the Lease
Commencement Date and prior to the Lease Expiration Date finance all Financed
Vehicles identified in Vehicle Orders placed by a Lessee for an amount equal to
the Initial Acquisition Cost thereof, and in each case simultaneously therewith
enter into this Financing Lease with such Lessee with respect to the Existing
Fleet and other Financed Vehicles, as the case may be; provided, that the
aggregate outstanding Base Amount of the Financing Lease shall not on any date
exceed (a) the Maximum Lease Commitment, less (b) the sum of (x) the sum of the
Net Book Values of Acquired Vehicles leased under the Operating Lease on such
date, each such Net Book Value calculated as of the first day contained within
both the calendar month in which such date of determination occurs and the
Vehicle Term for the related Acquired Vehicle, plus (y) accrued and unpaid
Monthly Base Rent under the Operating Lease as of such date.
4. Lease Procedures.
(a) Initial Lease. In connection with the lease of any
Financed Vehicles to be leased on the Lease Commencement Date (or, in
the case of an Additional Lessee, the date of the initial Vehicle
Order or Refinancing Schedule thereof), to evidence the refinancing of
Vehicles in the Existing Fleet and any other Refinanced Vehicles and
the acquisition and financing of any other Financed Vehicles by each
Lessee on the Lease Commencement Date (or the date of such initial
Vehicle Order) and the conveyance on such date of a security interest
in such Financed Vehicles to the Master Collateral Agent, such Lessee
shall deliver to the Lessor on or prior to the Lease Commencement Date
(or the date of such initial Vehicle Order or Refinancing Schedule)
the following:
(i) a Refinancing Schedule concerning any Vehicles in
the Existing Fleet and any other Refinanced Vehicles
refinanced on such date, or a Vehicle Order (including a
Vehicle Acquisition Schedule) with respect to all other
Financed
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Vehicles to be leased by such Lessee on the Lease Commencement
Date (or date of the initial Vehicle Order of such Additional
Lessee, as applicable);
(ii) a report of the results of a search of the
appropriate records of the county and state in which the
Refinanced Vehicles are located and the county and state in
which such Lessee's principal office is located, which shall
show no liens or other security interests (other than
Permitted Liens and the lien of Chrysler Financial Corporation
in the Existing Fleet) with respect to such Vehicles or, in
the event that such search reveals any such non-permitted Lien
or security interest, there shall be delivered to the Trustee
a termination of such Lien or security interest as provided
below;
(iii) confirmation from any lender holding a security
interest in any Refinanced Vehicle stating unconditionally (A)
that, if any sums are to be paid to such lender in connection
with the lease of the Refinanced Vehicle, such lender has been
paid the full amount due to it in connection with such
refinancing and (B) that any lien or security interest of such
lender in such Vehicle has been released;
(iv) UCC termination statements terminating, or UCC
partial releases releasing, any security interests and other
liens (other than Permitted Liens and the lien of Chrysler
Financial Corporation in the Existing Fleet) in favor of any
Person with respect to each Vehicle in the Existing Fleet
identified in such schedule and any related Vehicle
Disposition Programs;
(v) fully executed Assignment Agreements from such
Lessee covering, as applicable, each Vehicle in the Existing
Fleet and each other Financed Vehicle leased by such Lessee on
the Lease Commencement Date or leased on any date thereafter
under the Lease, the related Vehicle Disposition Programs, and
any other Master Collateral relating to such Vehicles; and
(vi) an Officer's Certificate for such Lessee stating
that all the conditions precedent under the Lease to the
leasing by such Lessee of such Vehicles on the Lease
Commencement Date have been satisfied.
(b) Subsequent Leases. In connection with each Lease of a
Financed Vehicle after the Lease Commencement Date, to evidence the
acquisition, financing or refinancing of such Financed Vehicle by the
Lessor and the conveyance of a security interest in such Financed
Vehicles to the Master Collateral Agent, each Lessee shall deliver to
the Lessor a Vehicle Order (including a Vehicle Acquisition Schedule)
or Refinancing Schedule with respect to all Financed Vehicles to be
leased by such Lessee on the date specified therein. Each Lessee
hereby agrees that each such delivery of a
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Vehicle Order or Refinancing Schedule, as applicable, shall be deemed
hereunder to constitute a representation and warranty by such Lessee,
to and in favor of the Lessor and the Trustee, that all the conditions
precedent to the acquisition or financing or refinancing and leasing
of the Vehicles identified in such Vehicle Order or Refinancing
Schedule, as applicable, have been satisfied as of the date of such
Vehicle Order or Refinancing Schedule.
5. Maximum Vehicle Lease Term. The maximum Vehicle lease term of
this Financing Lease as it relates to each Financed Vehicle leased hereunder
shall be from the Vehicle Lease Commencement Date to the date that is 60 months
from the Vehicle Lease Commencement Date. On the occurrence of such date, the
applicable Lessee shall pay to the Master Collateral Agent or the Trustee, in
accordance with this Financing Lease, any amounts unpaid and owing under the
Lease in respect of such Vehicle.
6. Calculation of Rent and Monthly Supplemental Payment. Rent and
the Monthly Supplemental Payment shall be due and payable on a monthly basis as
set forth in this paragraph 6:
"Monthly Base Rent", with respect to each Due Date and each
Financed Vehicle leased under the Lease on any day during the Related
Month, shall be the sum of all Depreciation Charges that have accrued
with respect to such Vehicle during the Related Month.
"Monthly Finance Rent", with respect to each Due Date and each
Financed Vehicle leased under the Lease on any day during the Related
Month, shall equal the sum, without double counting, of (a) the
product of (i) an amount equal to the Net Book Value of such Financed
Vehicle on the first day contained within both the Related Month and
the Vehicle Term with respect to such Vehicle multiplied by the VFR
for the Interest Period ending on the next succeeding Payment date and
(ii) the quotient obtained by dividing (A) the number of days
contained within both the Related Month and the Vehicle Term with
respect to such Financed Vehicle by (B) the total number of days in
the Related Month, plus (b) the product of (i) an amount equal to all
Carrying Charges for the Related Month, and (ii) the quotient obtained
by dividing the Net Book Value of such Financed Vehicle as of the
first day of the Related Month by the Net Book Value of all Vehicles
leased under the Lease as of the first day of the Related Month.
"Monthly Supplemental Payment" with respect to each Due Date
and each Financed Vehicle shall be an amount equal to (a) the sum of,
as applicable, (i) the aggregate amount of any Guaranteed Payment,
Repurchase Payment, Disposition Proceeds and Incentive Payments
received by the Lessor, the Master Collateral Agent or the Trustee
(including by deposit into the Collection Account or the Master
Collateral Account) during the Related Month with respect to such
Vehicle, (ii) the amount of any
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unpaid Guaranteed Payment or unpaid Repurchase Payment with respect to
such Vehicle becoming a Delinquent Guaranteed Payment or Delinquent
Repurchase Payment, as the case may be, during the Related Month,
(iii) the amount of any Disposition Proceeds with respect to such
Vehicle becoming Delinquent Disposition Proceeds during the Related
Month, (iv) the amount of any unpaid Incentive Payments with respect
to such Vehicle becoming Delinquent Incentive Payments during the
Related Month, (v) if such Vehicle becomes a Casualty or ceases to be
an Eligible Vehicle (other than as a result of the sale or other
disposition thereof), in each case during the Related Month, the Net
Book Value of such Vehicle calculated as of the earlier of the last
day of such Related Month and the date such Vehicle is disposed of or
becomes a Casualty, as applicable, and (vi) if such Vehicle was
returned to its Manufacturer for repurchase or sold to any Person or
otherwise disposed of, in each case during the Related Month, the
excess, if any, of (A) the Net Book Value of such Vehicle, calculated
as of the applicable Vehicle Lease Expiration Date, over (B) the sum
of all amounts (other than Incentive Payments) payable in respect of
such Vehicle pursuant to clause (i) above, less (b) the excess, if
any, of (i) the aggregate amount of Disposition Proceeds, Guaranteed
Payments or Repurchase Payments, as applicable, from the sale or other
disposition of such Vehicle received by the Lessor, the Master
Collateral Agent or the Trustee (including by deposit into the
Collection Account or the Master Collateral Account) during such
Related Month over (ii) the Net Book Value of such Vehicle, calculated
as of the applicable Vehicle Lease Expiration Date.
"Rent" means Monthly Base Rent plus Monthly Finance Rent.
"VFR", for any Interest Period with respect to any Group II
Series of Notes, is an interest rate equal to the quotient, expressed
as a percentage, of (i) the amount of interest accrued during such
Interest Period with respect to all Group II Series of Notes, divided
by (ii) the average daily Aggregate Principal Balance of all such
Group II Series of Notes during such period.
7. Payment of Rent and Other Payments. (a) On each Due Date:
(i) Monthly Base Rent. Each Lessee shall pay to the Lessor
the Monthly Base Rents that have accrued during the Related Month with
respect to all Vehicles that were leased by such Lessee under this
Finance Lease on any day during the Related Month; provided, however,
that in the event that delinquent payments of Guaranteed Payments,
Repurchase Payments, Disposition Proceeds and/or Incentive Payments
are received by the Lessor, the Master Collateral Agent or the Trustee
(including by deposit into the Collection Account or the Master
Collateral Account) during the Related Month, such payments may be
netted against the Monthly Base Rents to be paid on such Due Date to
the extent (but only to the extent) that Monthly Base Rent has already
been received by any of such Persons in respect of such delinquent
payment obligations pursuant to any or
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all of clauses (a)(ii), (iii) and (iv) of the definition of Monthly
Supplemental Payment set forth in this Annex B;
(ii) Monthly Finance Rent. Each Lessee shall pay to the
Lessor the Monthly Finance Rents that have accrued during the Related
Month with respect to all Vehicles that were leased by such Lessee
under this Finance Lease on any day during the Related Month.
(iii) Monthly Supplemental Payments. Each Lessee shall pay
to the Lessor the Monthly Supplemental Payments that have accrued
during the Related Month with respect to all Vehicles that were leased
by such Lessee under this Finance Lease on any day during the Related
Month; provided, however, that in the event that the Monthly
Supplemental Payment accrued during a Related Month is a negative
dollar amount, such amount may be netted against other payments to be
paid on such Due Date pursuant to this paragraph 7.
(b) On the expiration of the term of the Lease with respect to a
Financed Vehicle, any remaining Base Amount, plus all other amounts payable by
each Lessee under this Financing Lease with respect to such Vehicle shall be
immediately due and payable.
(c) Each Lessee may from time to time prepay the Base Amount of the
Financing Lease with respect to a Financed Vehicle, in whole or in part, on any
date, provided that such Lessee shall give the Lessor and the Trustee not less
than one (1) Business Day's prior notice of any prepayment, specifying the date
and amount of such prepayment, and the Financed Vehicles to which such
prepayment relates.
8. Risk of Loss Borne by Lessees. Upon delivery of each Vehicle to a
Lessee, as between the Lessor and such Lessee, such Lessee assumes and bears
the risk of loss, damage, theft, taking, destruction, attachment, seizure,
confiscation or requisition with respect to such Vehicle, however caused or
occasioned, and all other risks and liabilities, including personal injury or
death and property damage, arising with respect to any Vehicle or the
manufacture, purchase, acceptance, rejection, ownership, delivery, leasing,
subleasing, possession, use, inspection, registration, operation, condition,
maintenance, repair, storage, sale, return or other disposition of such
Vehicle, howsoever arising.
9. Mandatory Purchase of Texas Vehicles. Prior to the Vehicle Lease
Expiration Date with respect to each Texas Vehicle leased by a Lessee under
this Finance Lease (other than a Vehicle Lease Expiration Date arising in
connection with the purchase of such Texas Vehicle pursuant to this paragraph
9) and, in the case of each such Texas Vehicle which is a Program Vehicle,
prior to the expiration of the Maximum Term applicable thereto (unless such
Vehicle has been redesignated as a Non-Program Vehicle in accordance with
Section 14 of the Base Lease), such Lessee shall purchase such Texas Vehicle,
(including any such Vehicle which has
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77
become a Casualty) at a purchase price equal to the Net Book Value of such
Vehicle calculated as of the date of purchase (or, in the case of a Casualty,
at a purchase price equal to the Monthly Supplemental Payments accruing in
respect of such Casualty during the Related Month in which such Vehicle became
a Casualty), which shall be payable to the Master Collateral Agent (together
with all accrued and unpaid Rent and other payments due and payable on such Due
Date with respect to such Texas Vehicle through the date of such purchase) on
or prior to the Due Date next succeeding such purchase by such Lessee. The
Lessor shall cause title to each Texas Vehicle to be transferred to the
applicable Lessee, and the Servicer shall cause the Master Collateral Agent to
cause its Lien to be removed from the Certificate of Title for such Vehicle,
concurrently with or promptly after such purchase price for such Texas Vehicle
(and any such unpaid Rent and payments) is paid by such Lessee to the Master
Collateral Agent. Notwithstanding anything to the contrary in the Lease, no
Texas Vehicle may be sold or otherwise disposed of (other than pursuant to
Section 17.3 of the Base Lease), including at Auction or by return to its
Manufacturer pursuant to a Vehicle Disposition Program, prior to its purchase
by a Lessee pursuant to and in accordance with this paragraph 9.
10. Lessee's Rights to Purchase Manufacturer Receivables. In
addition, each Lessee will have the option, exercisable with respect to any
Manufacturer Receivable related to a Financed Vehicle which was leased by such
Lessee under this Lease, to purchase such Manufacturer Receivable for a price
equal to the amount due from the Manufacturer under such Manufacturer
Receivable, in which event the Lessee will pay such amount to the Master
Collateral Agent on or before the Payment Date next succeeding such purchase by
the Lessee. Upon receipt of such funds by the Master Collateral Agent, the
Lessor, at the request of the Lessee, shall cause title to any such
Manufacturer Receivable to be transferred to the Lessee, the lien of the Master
Collateral Agent in such Manufacturer Receivable will automatically be released
concurrently with or promptly after the purchase price for such Manufacturer
Receivable (and any unpaid Monthly Base Rent, unpaid Monthly Variable Rent and
other unpaid charges, payments and amounts) is paid by the Lessee to the Master
Collateral Agent or the Trustee.
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SCHEDULE 1
Litigation Claims
1. Dollar Thrifty Automotive Group, Inc. - None
2. Dollar Rent A Car Systems, Inc. - See Attached Schedule 1-A
3. Thrifty Rent -A- Car System, Inc. - See Attached Schedule 1-B
79
SCHEDULE 2
[Reserved]
80
SCHEDULE 3
Business Locations
==================================================================================================================================
STATES IN WHICH IT
CHIEF EXECUTIVE OFFICE STATE OF PRINCIPAL CONDUCTS BUSINESS OR
LEGAL NAME AND TRADE NAME BUSINESS LOCATION PLACE OF BUSINESS MAINTAINS RECORDS
----------------------------------------------------------------------------------------------------------------------------------
THRIFTY: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Each of the 50 States from
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ time to time
Legal Name:
Thrifty Rent-A-Car System, Inc.
Trade Names:
Thrifty Rent-A-Car
Thrifty Car Rental
Thrifty (also used w/ subtitles, i.e.;
car rental, truck rental, parking,
airport parking, used car sales and
leasing)
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Car Rental
----------------------------------------------------------------------------------------------------------------------------------
DOLLAR: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Each of the 50 States from
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ time to time
Legal Name:
Dollar Rent A Car Systems, Inc.
Trade Names:
Dollar
Dollar Rent A Car
----------------------------------------------------------------------------------------------------------------------------------
DTAG: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Each of the 50 States
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ from time to time
Legal Name:
Dollar Thrifty Automotive Group, Inc.
Trade Name:
None
==================================================================================================================================
81
SCHEDULE 4
Liens
NONE
82
ATTACHMENT A-1
Information on Refinanced Vehicles and Eligible Receivables
Refinanced Vehicles
1 Vehicle Group Number (Vehicle Model)
2 Vehicle Identification Number (last eight digits) (VIN)
3 Vehicle Lease Commencement Date
4 Capitalized Cost
5 Monthly Base Rent
6 Garaging State
7 Designated Period
8 Lienholder
9 Amount to pay off existing indebtedness
Eligible Receivables
1 identity of obligor
2 amount of receivable
3 date of origination of receivable
4 vehicle identification number (VIN) of vehicles to which receivable
relates (grouped by obligor)
83
ATTACHMENT A-2
Vehicle Acquisition Schedule
The attached "Vehicle Acquisition Schedule" is a sample listing of
vehicles to be financed on the A/P Due Date (the date payment is made to the
Dealer).
84
ATTACHMENT B
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Rental Car Finance Corp.,
an Oklahoma corporation, does hereby make, constitute and appoint
_______________________________ its true and lawful Attorney(s)-in-Fact for it
and in its name, stead and behalf, to execute any and all documents pertaining
to the titling of motor vehicles in the name of Rental Car Finance Corp., the
noting of the lien of Bankers Trust Company, a New York banking corporation, as
Master Collateral Agent, as the first lienholder on certificates of title, the
licensing and registration of motor vehicles and the transfer of title of motor
vehicles. This power is limited to the foregoing and specifically does not
authorize the creation of any other liens or encumbrances on any of said motor
vehicles, other than Permitted Liens (as defined in Schedule 1 to the Base
Indenture, dated as of December 13, 1995, between Rental Car Finance Corp., as
Issuer, and Bankers Trust Company, as Trustee, as amended by Amendment to Base
Indenture, dated as of December 23, 1997 (as amended by such amendment and as
such agreement may be further amended, supplemented or modified from time to
time in accordance with its terms)).
The powers and authority granted hereunder shall, unless
sooner terminated, revoked or extended, cease five years from the date of
execution as set forth below.
IN WITNESS WHEREOF, Rental Car Finance Corp. has caused this
instrument to be executed on its behalf by its _____________ this ____ day of
_______, 19__.
RENTAL CAR FINANCE CORP.
By:
------------------------------------
Name:
Title:
State of ___________________ )
:ss.:
County of __________________ )
Subscribed and sworn before me, a notary public, in and for said
county and state, this ____ day of ____________, 19__.
---------------------------------
Notary Public
My Commission Expires: __________
85
ATTACHMENT C
FORM OF CERTIFICATION OF TRADE OR BUSINESS USE
The undersigned, ___________ of Rental Car Finance Corp., an Oklahoma
corporation, hereby warrants and certifies, under penalties of perjury, that
(1) each Lessee intends to use the Acquired Vehicles in a trade or business of
each Lessee, and (2) each Lessee has been advised that it will not be treated
as the owner of the Acquired Vehicles for federal income tax purposes.
Defined terms otherwise not defined herein shall have the meanings
assigned to such terms in Schedule 1 to the Base Indenture, dated as of
December 13, 1995, between Rental Car Finance Corp., as Issuer, and Bankers
Trust Company, a New York banking corporation, as Trustee, as amended by
Amendment to Base Indenture, dated as of December 23, 1997 (as amended by such
amendment and as such agreement may be further amended, supplemented or
modified from time to time in accordance with its terms).
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed this ____ day of _________, 199__.
RENTAL CAR FINANCE CORP.
By:
------------------------------------
Name:
Title:
86
ATTACHMENT D
FORM OF AFFILIATE JOINDER IN LEASE
THIS AFFILIATE JOINDER IN LEASE AGREEMENT (this "Joinder") is executed
as of _______________ ___, 19___, by _______________, a
____________________________ ("Joining Party"), and delivered to Rental Car
Finance Corp., an Oklahoma corporation ("RCFC"), as lessor pursuant to the
Master Motor Vehicle Lease and Servicing Agreement, dated as of March 4, 1998
(as amended, supplemented or otherwise modified from time to time in accordance
with the terms thereof, the "Lease"), among RCFC, as Lessor, Thrifty
Rent-A-Car-System, Inc., an Oklahoma corporation as Lessee and Servicer, Dollar
Rent A Car Systems, Inc., an Oklahoma corporation as Lessee and Servicer, and
those Subsidiaries of Dollar Thrifty Automotive Group, Inc., a Delaware
corporation ("DTAG"), from time to time becoming Lessees thereunder
(individually, a "Lessee" and, collectively, the "Lessees"), and DTAG, as
Guarantor. Capitalized terms used herein but not defined herein shall have the
meanings provided for in the Lease.
R E C I T A L S:
WHEREAS, the Joining Party is a direct or indirect Subsidiary of DTAG;
and
WHEREAS, the Joining Party desires to become a "Lessee" under and
pursuant to the Group II Lease.
NOW, THEREFORE, the Joining Party agrees as follows:
A G R E E M E N T:
1. The Joining Party hereby represents and warrants to and in favor
of RCFC and the Trustee that (i) the Joining Party is a direct or indirect
Subsidiary of DTAG, (ii) all of the conditions required to be satisfied
pursuant to Section 28 of the Lease in respect of the Joining Party becoming a
Lessee thereunder have been satisfied, and (iii) all of the representations and
warranties contained in Section 23 of the Lease with respect to the Lessees are
true and correct as applied to the Joining Party as of the date hereof.
2. The Joining Party hereby agrees to assume all of the obligations
of a "Lessee" under the Lease and agrees to be bound by all of the terms,
covenants and conditions therein.
87
3. By its execution and delivery of this Joinder, the Joining Party
hereby becomes a Lessee for all purposes under the Lease. By its execution and
delivery of this Joinder, RCFC acknowledges that the Joining Party is a Lessee
for all purposes under the Lease.
IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be
duly executed as of the day and year first above written.
[Name of Joining Party]
By:
-------------------------------
Name:
Title:
Accepted and Acknowledged by:
RENTAL CAR FINANCE CORP.
By:
-------------------------------
Name:
Title:
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88
ATTACHMENT E
Form of Annual Certificate