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EXHIBIT 4.4
[EXECUTION COPY]
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
dated as of December 13, 1995,
between
THRIFTY CAR RENTAL FINANCE CORPORATION,
as Lessor, and
THRIFTY RENT-A-CAR SYSTEM, INC.,
as Lessee and Servicer
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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............... 1
Section 1.3. Cross References; Headings............................ 2
Section 1.4. Interpretation........................................ 2
SECTION 2. GENERAL AGREEMENT................................................ 2
Section 2.1. Leasing of Vehicles................................... 3
Section 2.2. Right of Lessee 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............................... 6
SECTION 4. CONDITIONS PRECEDENT............................................. 6
Section 4.1. No Default............................................ 6
Section 4.2. Limitations of the Acquisition of Certain
Vehicles.............................................. 6
SECTION 5. RENT AND CHARGES................................................. 7
Section 5.1. Payment of Rent....................................... 7
Section 5.2. Payment of Availability Payment....................... 7
Section 5.3. Payment of Monthly Supplemental Payments.............. 7
Section 5.4. Payment of Termination Payments, Casualty
Payments, and Late Return Payments.................... 8
Section 5.5. Late Payment.......................................... 8
SECTION 6. INSURANCE........................................................ 8
Section 6.1. Fleet Insurance....................................... 8
Section 6.2. Information........................................... 8
SECTION 7. CASUALTY OBLIGATION.............................................. 8
SECTION 8. VEHICLE USE...................................................... 9
SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES;
PENALTIES AND FINES............................................. 10
SECTION 10. MAINTENANCE AND REPAIRS.......................................... 11
SECTION 11. VEHICLE WARRANTIES............................................... 11
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SECTION 12. PROGRAM VEHICLE USAGE REQUIREMENTS AND
DISPOSITION.................................................... 12
Section 12.1. Usage................................................ 12
Section 12.2. Disposition Procedure................................ 12
Section 12.3. Termination Payments................................. 12
SECTION 13. LATE RETURN PAYMENTS............................................ 13
SECTION 14. REDESIGNATION OF VEHICLES....................................... 13
SECTION 15. GENERAL INDEMNITY............................................... 14
Section 15.1. Indemnity of the Lessor.............................. 14
Section 15.2. Indemnification of the Trustee....................... 16
Section 15.3. Reimbursement Obligation by the Lessee............... 16
Section 15.4. Notice to Lessee of Claims........................... 17
Section 15.5. Defense of Claims.................................... 17
SECTION 16. ASSIGNMENT...................................................... 17
SECTION 17. DEFAULT AND REMEDIES THEREFOR................................... 18
Section 17.1. 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............................................ 19
Section 17.4. Measure of Damages................................... 20
Section 17.5. Application of Proceeds.............................. 21
SECTION 18. MANUFACTURER EVENTS OF DEFAULT.................................. 22
SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE.......................... 22
SECTION 20. SURVIVAL........................................................ 23
SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL
AGENT AND TRUSTEE.............................................. 23
SECTION 22. MODIFICATION AND SEVERABILITY................................... 25
SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES.......................... 25
Section 23.1. Due Organization, Authorization, No
Conflicts, Etc..................................... 25
Section 23.2. Financial Information; Financial Condition........... 25
Section 23.3. Litigation........................................... 26
Section 23.4. Liens................................................ 26
Section 23.5. Necessary Actions.................................... 26
Section 23.6. Employee Benefit Plans............................... 27
Section 23.7. Investment Company Act............................... 27
Section 23.8. Regulations G, T, U and X............................ 28
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Section 23.9. Business Locations; Trade Names; Principal
Places of Business Locations....................... 28
Section 23.10. Taxes................................................ 28
Section 23.11. Governmental Authorization........................... 28
Section 23.12. Compliance with Laws................................. 28
Section 23.13. Eligible Vehicles; Eligible Franchisees.............. 29
Section 23.14. Supplemental Documents True and Correct.............. 29
SECTION 24. CERTAIN AFFIRMATIVE COVENANTS................................... 29
Section 24.1. Corporate Existence; Foreign Qualification........... 29
Section 24.2. Books, Records and Inspections....................... 29
Section 24.3. Vehicle Disposition Programs......................... 30
Section 24.4. Reporting Requirements............................... 30
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 25. CERTAIN NEGATIVE COVENANTS...................................... 38
Section 25.1. Mergers, Consolidations.............................. 38
Section 25.2. Other Agreements..................................... 38
Section 25.3. Liens................................................ 38
Section 25.4. Use of Vehicles...................................... 39
Section 25.5. Acquisition and Financing of Vehicles................ 39
SECTION 26. SERVICING COMPENSATION.......................................... 39
SECTION 27. BANKRUPTCY PETITION AGAINST LESSOR.............................. 40
SECTION 28. SUBMISSION TO JURISDICTION...................................... 41
SECTION 29. GOVERNING LAW................................................... 41
SECTION 30. JURY TRIAL...................................................... 42
SECTION 31. NOTICES......................................................... 42
SECTION 32. HEADINGS........................................................ 42
SECTION 33. EXECUTION IN COUNTERPARTS....................................... 42
SECTION 34. EFFECTIVENESS................................................... 43
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SCHEDULES AND ATTACHMENTS
Schedule 1 Litigation Claims
Schedule 2 Pension Plans
Schedule 3 Business Locations
Schedule 4 Liens
ATTACHMENT A-1 Information on Existing Fleet
ATTACHMENT A-2 Vehicle Acquisition Schedule
ATTACHMENT B Form of Power of Attorney
ATTACHMENT C Form of Certification of Trade or Business Use
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MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
This Master Motor Vehicle Lease and Servicing Agreement (the "Base Lease"
and, as supplemented by the Lease Annexes, this "Agreement" or "Lease"), dated
as of December 13, 1995, by and between THRIFTY CAR RENTAL FINANCE CORPORATION,
an Oklahoma corporation (the "Lessor"), and THRIFTY RENT-A-CAR SYSTEM, INC., an
Oklahoma corporation ("Thrifty"), in its capacity as lessee (the "Lessee") and
as servicer (the "Servicer").
W I T N E S S E T H:
WHEREAS, the Lessor (such capitalized term, together with all other
capitalized terms used herein, shall have the meaning assigned thereto in
Section 1) intends to refinance the Existing Fleet and to purchase, and finance
the purchase of, additional Eligible Vehicles from one or more Manufacturers
with the proceeds obtained by the issuance of its Rental Car Asset Backed Notes
and with certain other funds; and
WHEREAS, the Lessor desires to lease to the Lessee, and the Lessee desires
to lease from the Lessor, Vehicles for use in the Lessee's business of
subleasing Vehicles to Eligible Franchisees;
NOW, THEREFORE, in consideration of the foregoing premises, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
Section 1.1. Certain Definitions. As used in this Agreement and unless the
context requires a different meaning, capitalized terms not otherwise defined
herein shall have the meanings assigned to such terms in the Definitions List,
attached as Schedule 1 to the Base Indenture, dated as of December 13, 1995 (as
such agreement may be amended, supplemented, restated or otherwise modified from
time to time in accordance with its terms, the "Base Indenture"), between
Thrifty Finance and Bankers Trust Company, as trustee, as in effect on the date
hereof and as such Schedule 1 may be amended, supplemented or modified from time
to time in accordance with the terms of the Base Indenture (the "Definitions
List").
Section 1.2. Accounting and Financial Determinations. Where the character
or amount of any asset or liability or item of income or expense is required to
be determined, or any accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall be made, to
the extent applicable and except as otherwise specified in
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this Agreement, in accordance with GAAP. When used herein, the term "financial
statement" shall include the notes and schedules thereto.
Section 1.3. Cross References; Headings. The words "hereof", "herein" and
"hereunder" and words of a similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Annex, Section, Schedule and Exhibit references contained in this
Agreement are references to Annexes, Sections, Schedules and Exhibits in or to
this Agreement unless otherwise specified. Any reference in any Section or
definition to any clause is, unless otherwise specified, to such clause of such
Section or definition. The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
Section 1.4. Interpretation. In this Agreement, unless the context
otherwise requires:
(a) the singular includes the plural and vice versa;
(b) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to any Person in a particular
capacity only refers to such Person in such capacity;
(c) reference to any gender includes the other gender;
(d) reference to any Requirement of Law means such Requirement of
Law as amended, modified, codified or reenacted, in whole or in part, and
in effect from time to time;
(e) "including" (and, with correlative meaning, "include") means
including without limiting the generality of any description preceding
such term;
(f) "or" is not exclusive;
(g) provisions apply to successive events and transactions; and
(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
Lessee and the Lessor intend that this Agreement be (i) an operating lease with
respect to the Acquired
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Vehicles and (ii) a financing arrangement with respect to the Financed Vehicles.
(b) If, notwithstanding the intent of the parties to this Agreement, this
Agreement is deemed by any court, tribunal, arbitrator or other adjudicative
authority in any proceeding (each, a "Court") to constitute a financing
arrangement or otherwise not to constitute a "true lease" with respect to the
Acquired Vehicles, then it is the intention of the parties that this Agreement
together with the Master Collateral Agency Agreement, as such agreements apply
to the Acquired Vehicles, shall constitute a security agreement under applicable
law, and it is the intention of the parties that this Agreement together with
the Master Collateral Agency Agreement, as such agreements apply to the Financed
Vehicles, shall in all events constitute a security agreement under applicable
law. The 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 Thrifty's right, title
and interest in and to the Thrifty 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 the Lessee to the Lessor and the Trustee, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred (including interest accruing after the Lease
Expiration Date and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding), which may arise under, out of, or in connection with, this
Agreement and any other document made, delivered or given in connection
herewith, whether on account of rent, principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees and
disbursements of counsel to the Lessor or the Trustee that are required to be
paid by the Lessee pursuant to the terms hereof).
Section 2.1. Leasing of Vehicles. From time to time, subject to the terms
and conditions hereof, the Lessor agrees to lease to the Lessee and the Lessee
agrees to lease from the Lessor the Existing Fleet and each additional Acquired
Vehicle or Financed Vehicle identified in Vehicle order summaries (each, a
"Vehicle Order") produced from time to time by the Lessee, listing Vehicles
ordered by the Lessee from Eligible Manufacturers, 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 Lessee 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 Lessee
hereunder in
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an aggregate Net Book Value, which collectively shall not exceed the Maximum
Lease Commitment. The Lessee shall make available to the Lessor (a) a schedule
as set forth in Attachment A-1 hereto containing information concerning the
Existing Fleet of a scope agreed upon by the Lessor and the Lessee, and (b) if
requested by the Lessor, each Vehicle Order, together with a schedule containing
the information with respect to the Vehicles included within such Vehicle Order
as is set forth in Attachment A-2 hereto, or in such form as is otherwise
requested by the Lessor (each, a "Vehicle Acquisition Schedule"). In addition,
the 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
Lessee, and the Lessee shall lease from the Lessor, only Vehicles that are
Eligible Vehicles. This Agreement, together with the Vehicle Disposition
Programs and other incentive programs relating to the Vehicles and any other
related documents attached to this Agreement or submitted with a Vehicle Order
(collectively, the "Supplemental Documents"), will constitute the entire
agreement regarding the leasing of Vehicles by the Lessor to the Lessee.
Section 2.2. Right of Lessee to Act as Lessor's Agent. The Lessor agrees
that the 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 Manufacturer delivery claims related to the
Vehicles leased hereunder; provided, however, that the Lessor may hold the
Lessee liable for losses due to the Lessee's actions in performing as the
Lessor's agent hereunder. In addition, the Lessor agrees that the Lessee may
make arrangements for delivery of Vehicles to a location selected by the Lessee
at the Lessee's expense. The Lessee or any Sublessee, as applicable, may accept
or reject Eligible Vehicles upon delivery in accordance with the Lessee's
customary business practices, and any Eligible Vehicle, if rejected, will be
deemed a Casualty hereunder. The 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 pursuant to the preceding
sentence. The 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 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 Vehicle, the
Lessor or its agent shall pay or cause to be paid to 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
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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 dealer or the
Manufacturer, as the case may be (the "Initial Acquisition Cost"), for such
Vehicle and the Lessee shall pay all applicable costs and expenses of freight,
packing, handling, storage, shipment and delivery of such Vehicle to the extent
that the same have not been included within the Initial Acquisition Cost;
provided that solely in the case of the Existing Fleet, the Lessor shall pay to
Chrysler Credit Corporation on the Lease Commencement Date an amount equal to
the aggregate Net Book Value as of the Lease Commencement Date of the Existing
Fleet.
Section 2.4. Non-liability of Lessor. The Lessor shall not be liable to
the Lessee for any failure or delay in obtaining Vehicles or making delivery
thereof. AS BETWEEN THE LESSOR AND THE LESSEE, ACCEPTANCE FOR LEASE OF THE
VEHICLES SHALL CONSTITUTE THE LESSEE'S ACKNOWLEDGMENT AND AGREEMENT THAT THE
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 THE LESSEE, THAT THE LESSEE IS SATISFIED THAT THE SAME ARE SUITABLE
FOR THIS 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 THE VEHICLE IN ANY RESPECT
OR IN CONNECTION WITH OR FOR THE PURPOSES OR USES OF THE 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 THE LESSEE, THE LESSEE AGREES TO BEAR ALL SUCH RISKS AT ITS SOLE COST
AND EXPENSE. THE LESSEE SPECIFICALLY WAIVES ALL RIGHTS TO MAKE CLAIMS AGAINST
THE LESSOR AND ANY LEASED VEHICLE FOR BREACH OF ANY WARRANTY OF ANY KIND
WHATSOEVER AND, AS TO THE LESSOR, THE LESSEE LEASES THE LEASED VEHICLES "AS IS."
The Lessor shall not be liable for any failure or delay in delivering any
Vehicle ordered for lease pursuant to this Agreement, or for any failure to
perform any provision hereof, resulting from fire or other casualty, natural
disaster, riot, strike or other labor difficulty, governmental regulation or
restriction, or any cause beyond the Lessor's direct control. IN NO EVENT SHALL
THE LESSOR BE LIABLE FOR ANY INCONVENIENCES, LOSS OF PROFITS OR ANY OTHER
CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES, WHATSOEVER OR HOWSOEVER CAUSED,
WHETHER RESULTING FROM ANY DEFECT IN OR ANY THEFT, DAMAGE, LOSS OR FAILURE OF
ANY VEHICLE, OR OTHERWISE, AND THERE SHALL BE NO ABATEMENT OF RENT BECAUSE OF
THE SAME.
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SECTION 3. TERM.
Section 3.1. Vehicle Lease Commencement Date. The "Vehicle Lease
Commencement Date" shall mean, (i) for each Vehicle in the Existing Fleet, the
Closing Date for the first Series of Notes issued under the Indenture, and (ii)
for each other Vehicle, the date referenced in the Vehicle Acquisition Schedule
with respect to such Vehicle, which in no event shall be later than the date
that funds are expended by the Lessor to acquire or finance the acquisition of
such Vehicle. A vehicle shall be deemed hereunder to be a Vehicle leased under
the Lease on each day during the period (the "Vehicle Term") from and including
the Vehicle Lease Commencement Date to but excluding the Vehicle Lease
Expiration Date.
Section 3.2. Lease Commencement Date. The "Lease Commencement Date" shall
mean the Closing Date for the first Series of 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 and all outstanding Carrying Charges and (ii) the
Vehicle Lease Expiration Date for the last Vehicle subject to lease by the
Lessee hereunder. The "Term" of this Agreement shall mean the period commencing
on the Lease Commencement Date and ending on the Lease Expiration Date.
SECTION 4. CONDITIONS PRECEDENT. The agreement of the Lessor to make
available any Acquired Vehicle for lease to the Lessee, and to make available
Texas Vehicles or financing for the acquisition of any other Financed Vehicle
(other than Vehicles in the Existing Fleet) for lease to the Lessee upon the
Lessee's placement of a Vehicle Order, for itself or as agent of the Lessor, is
subject to the terms and conditions of the Indenture and subject to the
satisfaction of the following conditions precedent as of the Vehicle Lease
Commencement Date for such Vehicle:
Section 4.1. No Default. No Lease Event of Default or Amortization Event
shall have occurred and be continuing on such date.
Section 4.2. Limitations of the Acquisition of Certain Vehicles. Unless
otherwise specified in the related Series Supplement or unless waived by the
Required Noteholders as specified in the related Series Supplement, (a) the
quotient (expressed as a percentage) obtained by dividing (x) the aggregate Net
Book Value of all Non-Program Vehicles (or such portion thereof as is specified
in the related Series Supplement) leased under this Lease as of such date (after
giving effect to the inclusion of such Vehicle under the Lease) by (y) the
Aggregate Asset Amount (or such portion thereof as is specified in the related
Series Supplement) as of such date (after giving
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effect to the inclusion of such Vehicle under the Lease), shall not exceed any
applicable Maximum Non-Program Percentage, (b) the quotient (expressed as a
percentage) obtained by dividing (x) the aggregate Net Book Value of all Program
Vehicles or Non-Program Vehicles, as the case may be (or such portion thereof as
is specified in the related Series Supplement), manufactured by any Manufacturer
and leased under this Lease as of such date (after giving effect to the
inclusion of such Vehicle under the Lease) by (y) the Aggregate Asset Amount (or
such portion thereof as is specified in the related Series Supplement) as of
such date (after giving effect to the inclusion of such Vehicle under the Lease)
shall not exceed any applicable Maximum Manufacturer Percentage, (c) any excess
of such quotients over any applicable Maximum Non-Program Percentage or Maximum
Manufacturer Percentage, as described in clauses (a) and (b) above, shall not
increase after giving effect to the inclusion of such Vehicle, if such an excess
has occurred and is continuing on such date prior to giving effect to the
inclusion of such Vehicle, and (d) after giving effect to the inclusion of such
Vehicle under the Lease, there shall not be a failure or violation of any other
conditions, requirements, or restrictions with respect to the leasing of
Eligible Vehicles under the Lease as is specified in any related Series
Supplement.
SECTION 5. RENT AND CHARGES. The 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, the Lessee shall pay to
the Lessor the aggregate of all Rent that has accrued during the Related Month
with respect to the Vehicles, as provided in the related Lease Annexes.
Section 5.2. Payment of Availability Payment. On each Due Date, the Lessee
shall pay to the Lessor an amount (the "Availability Payment") in respect of the
unutilized portion of the Maximum Lease Commitment. "Availability Payment" with
respect to each Due Date shall equal (a) the aggregate interest due on the
Outstanding Notes of all Series as of the Payment Date next succeeding such Due
Date, plus (b) an amount equal to all Carrying Charges for the Related Month,
less (c) the sum of (i) any Monthly Variable Rent due on such Due Date, (ii) any
Monthly Finance Rent due on such Due Date, and (iii) any earnings on Permitted
Investments (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,
the Lessee shall pay to the Lessor the Monthly
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Supplemental Payments that have accrued during the Related Month with respect to
the Financed Vehicles, 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, the Lessee shall pay to the Lessor all
Termination Payments, Casualty Payments and Late Return Payments that have
accrued with respect to the Acquired Vehicles, as provided in, respectively,
Sections 7, 12.3 and 13.
Section 5.5. Late Payment. In the event the Lessee fails to remit payment
of any amount due under the Lease on or before the Due Date, the amount not paid
will be considered delinquent and the 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. The 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, 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. The Lessee may, in lieu of maintaining such insurance
with insurers, self-insure.
Section 6.2. Information. The Lessee shall, from time to time upon the
Lessor's or the Trustee's reasonable request, deliver to the Lessor and the
Trustee copies of certificates describing all insurance required by Section 6.1
which is then in effect.
SECTION 7. CASUALTY OBLIGATION. If a Vehicle becomes a Casualty, then the
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 first day of such
Related Month. Upon payment by the 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
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transferred to the Lessee to facilitate liquidation of such Vehicle by the
Lessee, (ii) the Lessee shall be entitled to any physical damage insurance
proceeds applicable to such Acquired Vehicle (if at such time the Lessee carries
such insurance coverage), and (iii) the Lien of the Master Collateral Agent on
such Vehicle shall be released thereby.
SECTION 8. VEHICLE USE. So long as no Lease Event of Default has occurred,
the Lessee may use Vehicles leased hereunder in the regular course of business
of the Lessee, including, from time to time, subleasing such Vehicles to
Eligible Franchisees pursuant to Lessee Agreements, including Subleases, used in
the ordinary course of Lessee's business. Notwithstanding any such Lessee
Agreement, the Lessee shall remain fully liable for its obligations under this
Agreement and the other Related Documents (including any obligation hereunder or
thereunder that it may cause any Franchisee to perform or fulfill). The Lessee
shall cause all payments under the Lessee Agreements, to the extent such
payments relate to vehicles comprising the Master Collateral, to be deposited
directly into the Master Collateral Account, and upon the occurrence and during
the continuance of a Lease Event of Default, Liquidation Event of Default or
Limited Liquidation Event of Default, the 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.
The 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 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 the 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. The Lessee may, at the Lessee's sole expense,
change the place of principal location of any Vehicles. After any such change of
location, the Lessee shall take all actions necessary (i) to maintain the Lien
of the Master Collateral Agent on such Vehicles and the Certificates of Title
with respect to such Vehicles (other than recordation of liens with respect to
the Existing Fleet), and (ii) to meet or obtain all material legal requirements
applicable to such Vehicles. Following a Lease Event of Default or Manufacturer
Event of Default, and upon the Lessor's request, the Lessee shall advise
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the Lessor in writing where all Vehicles leased hereunder as of such date are
principally located. The Lessee shall not knowingly use any Vehicles, or
knowingly permit the same to be used, for any unlawful purpose. The Lessee shall
and shall require the Franchisees to use reasonable precautions to prevent loss
or damage to Vehicles. The Lessee shall or shall cause the 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 the Franchisees to take reasonable steps to ensure that
operators are licensed. The Lessee shall or shall cause the 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 Lessee's or the 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.
The Lessee, at its expense, shall be responsible for proper registration and
licensing of Vehicles, and titling of Vehicles in the name of the Lessor (in the
case of Acquired Vehicles and Texas Vehicles) or the Lessee (in the case of all
other Financed Vehicles), in each case (other than with respect to the Existing
Fleet) with the Lien of the Master Collateral Agent noted thereon, and where
required, the Lessee shall or shall cause the Franchisees to have Vehicles
inspected by any appropriate governmental authority; provided, however, that
notwithstanding the foregoing, unless a Liquidation Event of Default shall have
occurred and be continuing, possession of all Certificates of Title shall remain
with the Servicer. The 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 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 the 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 the Lessee to title, register and dispose of the Acquired
Vehicles and the Texas Vehicles; and the Lessee acknowledges and agrees that
with respect to the Acquired Vehicles, it has no right, title or interest in or
with respect
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to any Certificate of Title. Notwithstanding anything herein to the contrary,
the Lessor may terminate such Power of Attorney as provided in Section 17.3.
SECTION 10. MAINTENANCE AND REPAIRS. The Lessee shall or shall cause the
Franchisees to pay for all maintenance and repairs to keep Vehicles in good
working order and condition, and shall or shall cause the Franchisees to
maintain Vehicles as required in order to keep the Manufacturer's warranty in
force. The Lessee shall or shall cause the Franchisees to return each Vehicle to
an authorized Manufacturer facility or the applicable Manufacturer's authorized
warranty station for warranty work. The Lessee shall or shall cause the
Franchisees to comply with any Manufacturer's recall of any Vehicle. The Lessee
shall or shall cause the 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 notice to the Lessee, may pay any such expenses that have not
otherwise been paid by, or on behalf of, the Lessee (including any failure by a
Franchisee to pay any such expenses), and any expenses incurred by the Lessor on
the Lessee's behalf for maintenance, repair, operation or use by the Lessee of
Vehicles will promptly be reimbursed (in any event no later than the next
monthly Due Date following such payment) by the Lessee to the Lessor in the
amount paid by the Lessor. The Lessee shall not make any material alterations to
any Vehicles without the prior consent of the Lessor. Any improvements or
additions to an Acquired Vehicle shall become and remain the property of the
Lessor, except that any addition or improvement to such a Vehicle made by the
Lessee shall remain the property of the Lessee if it can be disconnected or
removed from the Vehicle without impairing the functioning of or resale value
thereof, other than any function or value provided by such addition or
improvement.
SECTION 11. VEHICLE WARRANTIES. If a Vehicle is covered by a
Manufacturer's warranty, the Lessee, during the Vehicle Term, shall have the
right to make any claims under such warranty which the Lessor could make and
shall direct any payment thereunder to be made to the Master Collateral Account,
for distribution to the Lessee in accordance with the Master Collateral Agency
Agreement. As provided in Section 2.4, the Lessor makes no warranty or
representation whatsoever, express or implied, with respect to any Vehicle.
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SECTION 12. PROGRAM VEHICLE USAGE REQUIREMENTS AND DISPOSITION.
Section 12.1. Usage. As used herein, the term "vehicle turn-in condition"
with respect to each Program Vehicle 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. Program Vehicles 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 the Lessee in accordance with the Casualty procedure set forth in
Section 7 or otherwise disposed of in accordance with the late delivery
procedure set forth in Section 13, as applicable.
Section 12.2. Disposition Procedure. Prior to the end of the Vehicle Term,
the Lessee will or will cause the related Franchisee to deliver each Program
Vehicle (other than a Casualty) to the nearest related Manufacturer official
auction or other facility designated by such Manufacturer at the 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
Lessee. The 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 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
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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 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, divided by
(y) the number of Acquired Vehicles in respect of which such Program Vehicle
Termination Payments are payable (Program Vehicle Termination Payments and
Non-Program Vehicle Termination Payments collectively, "Termination Payments").
The provisions of this Section 12.3 will survive the expiration or earlier
termination of the Term.
SECTION 13. LATE RETURN PAYMENTS. If an Acquired Vehicle which is a
Program Vehicle is not returned to the Manufacturer or sold at Auction prior to
the expiration of the Maximum Term for such Vehicle in accordance with Section
12.2, the Lessee 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 at Auction 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, over (y) the dollar
amount of such Disposition Proceeds (which dollar amount may be equal to, but
not less than, zero dollars).
SECTION 14. REDESIGNATION OF VEHICLES. Upon a Program Vehicle's becoming
ineligible for repurchase by its Manufacturer or for sale at Auction under the
applicable Vehicle Disposition Program, due to physical damage, repair charges
or accrued mileage, in each case in excess of that permitted under the related
Vehicle Disposition Program, or due to any failure or inability to return the
Vehicle to the Manufacturer or the
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designated Auction prior to the expiration of the Maximum Term, or due to any
other event or circumstance, the Servicer may designate the related Vehicle as a
Non-Program Vehicle if such Vehicle, as a Non-Program Vehicle, will be an
Eligible Vehicle and if either (a) such designation meets the conditions of, as
applicable, Sections 4.2(a) and (c) (as Section 4.2(c) relates to the Maximum
Non-Program Percentage), or (b) the Noteholders holding the requisite Invested
Amount of each applicable Series of Notes waive, in each case as and to the
extent permitted under the related Series Supplement, the requirements of
Sections 4.2(a) or (c) (as Section 4.2(c) relates to the Maximum Non-Program
Percentage), in each case as applied to this Section 14 and all such other
conditions, requirements or restrictions with respect to which a failure or
violation has occurred; provided, in each case, that (x) any additional Monthly
Base Rent due with respect to each such Vehicle, relating to the decrease, if
any, of the Net Book Value of such Vehicle under the newly applicable
Depreciation Schedule, shall be paid on the next succeeding Due Date, and (y)
the minimum level of Enhancement required under the applicable Series
Supplement, after giving effect to such designation, shall be satisfied on the
date of designation.
SECTION 15. GENERAL INDEMNITY.
Section 15.1. Indemnity of the Lessor. The 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 the 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, including, without limitation,
any such Vehicle subleased to a Franchisee and any of the foregoing
actions, events or circumstances occurring or arising in connection with
such subleasing, any Lessee Agreement, any Franchisee or any customer of
any Franchisee. The foregoing shall include, without limitation, any
liability (or any alleged liability) of the Lessor to any third party
arising out of any of the foregoing, including, without limitation, all
legal fees, costs and disbursements arising out of such liability (or
alleged liability);
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Section 15.1.2. all (i) federal, state, county, municipal, foreign
or other fees and taxes of whatsoever nature, including but not limited to
license, qualification, registration, franchise, sales, use, gross
receipts, ad valorem, business, property (real or personal), excise, motor
vehicle, and occupation fees and taxes, and all federal, state, local and
foreign income taxes (including any taxes payable by the Lessor as a
result of its being a member of any group of corporations including the
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 or the
acquisition, purchase, sale, lease, sublease, rental, use, operation,
control, ownership or disposition of any 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 the Lessee with respect thereto, and (ii)
documentary, stamp, filing, recording, mortgage or other taxes, if any,
which may be payable by the Lessor or the Lessee in connection with this
Agreement or the other Related Documents or the Lessee Agreements and any
penalties or interest with respect thereto;
Section 15.1.3. any violation by the Lessee of this Agreement or of
any Related Documents or Lessee Agreements to which the 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 or any action or transaction by the Lessee with
respect thereto or pursuant to this Agreement;
Section 15.1.4. all out of pocket costs of the Lessor (including, to
the extent not satisfied by the Initial Purchasers, the fees and out of
pocket expenses of counsel for the Lessor) in connection with the
execution, delivery and performance of this Agreement and the other
Related Documents, including, without limitation, overhead expenses and
any and all fees of the Trustee, Paying Agent, Clearing Agencies and
Master Collateral Agent, all fees payable in connection with any
Enhancement, any and all fees of the Servicer under the Indenture, fees
payable to the Rating Agencies and any underwriting or placement agency
fees incurred in connection with the sale of the Notes;
Section 15.1.5. all out of pocket costs and expenses (including
reasonable attorneys' fees and legal expenses) incurred by the Lessor, the
Master Collateral Agent, the
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Trustee or the Noteholders in connection with the administration,
enforcement, waiver or amendment of this Agreement and any other Related
Documents, and all indemnification obligations of the Lessor under the
Related Documents; and
Notwithstanding the foregoing, the Lessee shall have no 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 Person's gross
negligence or willful misconduct.
Section 15.2. Indemnification of the Trustee. The Lessee agrees to
indemnify and hold harmless the Trustee and the Trustee's officers, directors,
agents and employees against any and all claims, demands and liabilities of
whatsoever nature, and all costs and expenses, relating to or in any way arising
out of: (i) any acts or omissions of the Lessee pursuant to this Agreement and
(ii) the Trustee's appointment under the Indenture and the Trustee's performance
of its obligations thereunder, or any document pertaining to any of the
foregoing to which the Trustee is a signatory, including, but not limited to any
judgment, award, settlement, reasonable attorneys' fees and other costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided, however, the Lessee 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 solely 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 Thrifty Finance. 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 Lessee hereunder and the
termination of this Agreement or a document to which the Trustee is a signatory
or the resignation or removal of the Trustee.
Section 15.3. Reimbursement Obligation by the Lessee. The 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 the Lessee, the Lessor or the Trustee shall
submit to the Lessee a statement documenting any such demand for reimbursement
or prepayment. To the extent that the Lessee in fact indemnifies the Lessor or
the Trustee under the indemnity provisions of this Agreement, the Lessee shall
be
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subrogated to the rights of the Lessor or the Trustee, as the case may be, in
the affected transaction and shall have a right to determine the settlement of
claims therein. The foregoing indemnity as contained in this Section 15 shall
survive the expiration or earlier termination of this Agreement or any lease of
any Vehicle hereunder; provided, however, that the factual or legal
circumstances giving rise to the Lessor's exposure to liability occur during the
period that the Lease is in effect as to the Vehicle for which such exposure to
liability arose.
Section 15.4. Notice to Lessee of Claims. The Lessor or the Trustee, as
the case may be, shall notify the 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 Lessee, be conducted by the Lessee. Following receipt of any Notice of
Claim, the 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 the Lessee's
defense. The Lessee agrees that no Indemnified Person will be liable to the
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 the Lessee, except to the extent that any of the foregoing
is caused by the gross negligence or willful misconduct of such Indemnified
Person. The rights and indemnities of each Indemnified Person hereunder are
expressly made for the benefit of, and will be enforceable by, each Indemnified
Person notwithstanding the fact that such Indemnified Person is not or is no
longer a party to (or entitled to receive the benefits of) this Agreement. This
general indemnity shall not affect any claims of the type discussed above which
the Lessee may have against the Manufacturer.
SECTION 16. ASSIGNMENT. The Lessee shall not, except as provided in the
Indenture, without prior written consent of the Lessor and the Trustee, assign
this Agreement or any of its rights hereunder to any other party; provided,
however, the Lessee may sublease or rent the Vehicles under the terms of the
Lessee's normal Sublease agreements to Eligible Franchisees, and the Lessee and
such Eligible Franchisees may rent such Vehicles to consumers in the ordinary
course of their daily rental programs. Any purported assignment in violation of
this
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Section 16 shall be void and of no force or effect. Nothing contained herein
shall be deemed to restrict the right of the Lessee to acquire or dispose of, by
purchase, lease, financing, or otherwise, motor vehicles that are not subject to
the provisions of this Agreement.
SECTION 17. DEFAULT AND REMEDIES THEREFOR.
Section 17.1. Events of Default. Any one or more of the following will
constitute an event of default (a "Lease Event of Default") as that term is used
herein:
Section 17.1.1. there occurs (i) a default in the payment of any
Monthly Base Rent, Monthly Variable Rent, Monthly Finance Rent,
Termination Payment, Casualty Payment, Late Return Payment, Monthly
Supplemental Payment or Availability Payment, and the continuance thereof
for five (5) Business Days after notice thereof by the Lessor, the Master
Collateral Agent or the Trustee to the Lessee, or (ii) a default in the
payment of any amount payable under this Agreement (other than amounts
described in clause (i) above) and the continuance thereof for five (5)
Business Days after notice thereof by the Lessor, the Master Collateral
Agent or the Trustee to the Lessee;
Section 17.1.2. any unauthorized assignment or transfer of this
Agreement by the Lessee occurs;
Section 17.1.3. the failure of the Lessee 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 the 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 the 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, the 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 the Lessee intends to take in
order to cure such default and (iii) thereafter diligently prosecutes such
cure to completion and completely cures such default on or before the
ninetieth (90th) day after the earlier of the dates set forth in clause
(a) and clause (b) above;
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Section 17.1.4. if any representation or warranty made by the Lessee
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 the Lessee; or
Section 17.1.5. an Event of Bankruptcy occurs with respect to the
Lessee.
Section 17.2. Effect of Lease Event of Default. If (i) a Lease Event of
Default described in Section 17.1.1(i), 17.1.2 or 17.1.5 shall occur, then the
Monthly Base Rent, the Monthly Supplemental Payment and Casualty Payments (in
each case calculated as if all Vehicles had become a Casualty for the Related
Month), the Monthly Variable Rent, the Availability Payment and the Monthly
Finance Rent (in each case calculated as if the full amount of interest,
principal and other charges under all outstanding Series of Notes 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 shall
occur, the Lessor or the Trustee may declare the Rent and all other charges and
payments (calculated as described in clause (i) above) to be due and payable,
whereupon such Rent and such other charges and payments (as so calculated)
shall, subject to Section 17.4, become immediately due and payable.
Section 17.3. Rights of Lessor Upon Lease Event of Default. If a Lease
Event of Default shall occur, then the Lessor at its option may:
(i) Proceed by appropriate court action or actions, either at law or
in equity, to enforce performance by the Lessee of the applicable
covenants and terms of this Agreement or to recover damages for the breach
hereof calculated in accordance with Section 17.4; or
(ii) Subject to the rights of the Franchisees under the Subleases,
by notice in writing to the Lessee, terminate this Agreement in its
entirety and/or the right of possession hereunder of the Lessee as to the
Vehicles, and the Lessor may direct delivery by the Lessee of documents of
title to the Vehicles, whereupon all rights and interests of the Lessee to
the Vehicles (except as otherwise provided herein) will cease and
terminate (but the Lessee will remain liable hereunder as herein provided,
calculated in accordance with Section 17.4); and thereupon, the Lessor or
its agents may, subject in each case to the rights of the
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Franchisees under the applicable Subleases, peaceably enter upon the
premises of the Lessee 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 Lessee, 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 Lessee any and
all amounts which under the terms of Section 17.2 (as limited by Section
17.4) of this Agreement may be then due. The Lessor will provide the
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 the
Lessee may purchase the Vehicle(s) at the sale. Each and every power and
remedy hereby specifically given to the Lessor will be in addition to
every other power and remedy hereby specifically given or now or hereafter
existing at law, in equity or in bankruptcy and each and every power and
remedy may be exercised from time to time and simultaneously and as often
and in such order as may be deemed expedient by the Lessor; provided,
however, that the measure of damages recoverable against the Lessee will
in any case be calculated in accordance with Section 17.4. All such powers
and remedies will be cumulative, and the exercise of one will not be
deemed a waiver of the right to exercise any other or others. No delay or
omission of the Lessor in the exercise of any such power or remedy and no
renewal or extension of any payments due hereunder will impair any such
power or remedy or will be construed to be a waiver of any default or any
acquiescence therein. Any extension of time for payment hereunder or other
indulgence duly granted to the Lessee will not otherwise alter or affect
the Lessor's rights or the obligations hereunder of the 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 the Lessee, terminate the Power of
Attorney.
Section 17.4. Measure of Damages. If a Lease Event of Default occurs and
the Lessor, the Master Collateral Agent or the Trustee exercises the remedies
granted to the Lessor, the Master Collateral Agent or the Trustee under this
Section 17 or under Section 8.2 of the Indenture, the amount that the Lessor
shall be permitted to recover shall be equal to:
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(i) all Rent and payments under this Agreement (calculated as
provided in Section 17.2); plus
(ii) any damages and expenses (other than punitive and consequential
damages), which the Lessor, the Master Collateral Agent or the Trustee
will have sustained by reason of the Lease Event of Default, together with
reasonable sums for such attorneys' fees and such expenses as will be
expended or incurred in the seizure, storage, rental or sale of the
Vehicles or in the enforcement of any right or privilege hereunder or in
any consultation or action in such connection; plus
(iii) all other amounts due and payable under this Agreement; plus
(iv) interest from time to time on amounts due and unpaid under this
Agreement at the VFR plus 1%, computed from the date of the Lease Event of
Default or the date payments were originally due the Lessor under this
Agreement or from the date of each expenditure by the Lessor which is
recoverable from the 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 the Texas Vehicles) 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 for repurchase
by the Manufacturer or sale at Auction under the applicable Vehicle
Disposition Program, and such Vehicle is accepted for repurchase by such
Manufacturer (as evidenced by a Condition Report indicating that such
Vehicle conforms to the requirements for repurchase under such Vehicle
Disposition Program) or is sold by such Auction, the Lessor and the
Trustee shall be deemed to have received thirty (30) days after the date
of such acceptance or sale on account of this clause (v) an amount equal
to the Net Book Value of such Vehicle, calculated as of its Disposition
Date (less any Termination Payments payable in respect of such Vehicle).
Section 17.5. Application of Proceeds. The proceeds of any sale or other
disposition of any Financed Vehicles pursuant to Section 17.3 shall be applied
in the following order: (i) to the reasonable costs and expenses incurred by the
Lessor in connection with such sale or disposition, including any
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reasonable costs associated with repairing such Vehicles, and reasonable
attorneys' fees in connection with the enforcement of this Agreement, (ii) to
the payment of outstanding Rent and payments under the Lease (such proceeds to
be applied first, to outstanding Monthly Variable Rent and Monthly Finance Rent
pro rata, second, to outstanding Availability Payments, third, to outstanding
Base Rent and Monthly Supplemental Payments pro rata, fourth, to outstanding
Termination Payments, Casualty Payments and Late Return Payments pro rata and
fifth, to outstanding late charges pursuant to Sections 5.5 and 17.4(iv)), (iii)
to the payment of all other amounts due hereunder, (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 the Lessee.
SECTION 18. MANUFACTURER EVENTS OF DEFAULT. Upon the occurrence of any of
the following events (each, a "Manufacturer Event of Default") with respect to a
Manufacturer, the Lessee 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 $15,000,000 (net of amounts that are the subject
of a good faith dispute, as evidenced in writing by either the 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 $15,000,000, continues for more
than ninety (90) days following the Disposition Date of 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, the Lessee will
warrant and certify that (1) the Lessee intends to use the Acquired Vehicles in
a trade or business of the Lessee, and (2) the Lessee has been advised that it
will not be treated as the owner of the Acquired Vehicles for federal income tax
purposes.
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SECTION 20. SURVIVAL. In the event that, during the term of this
Agreement, the Lessee becomes liable for the payment or reimbursement of any
obligations, claims or taxes pursuant to any provision hereof, such liability
will continue, notwithstanding the expiration or termination of this Agreement,
until all such amounts are paid or reimbursed by the Lessee.
SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL AGENT AND
TRUSTEE. Notwithstanding anything to the contrary contained in this Agreement,
the Lessee acknowledges that each of the Lessee and the Lessor, pursuant to the
Master Collateral Agency Agreement, has granted a security interest to the
Master Collateral Agent, for the benefit of the Trustee, in all of its right,
title and interest in, to and under the Vehicles, the related Vehicle
Disposition Programs, the Master Collateral Account and all other Master
Collateral specified in the Master Collateral Agency Agreement as being pledged
by Thrifty and Thrifty Finance, and 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 Thrifty Finance
Agreements, the Collection Account and the other Collateral described in the
Indenture. Accordingly, the Lessee 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, the Lessee 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 the Lessee provided for herein or in
the Indenture or the Master Collateral Agency Agreement and the Lessee
will not 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 the Lessee stating that a Lease Event of Default or an
Amortization Event with respect to the Lessee has occurred, then the
Lessee, will, if so requested by the Master Collateral Agent (with respect
to the Master Collateral) or the Trustee (with respect to the Collateral),
treat the Master Collateral Agent or the Trustee or the Master Collateral
Agent's or the Trustee's designee, as the case may be, for all purposes as
the Lessor hereunder and in all respects comply with all obligations under
this Agreement that are asserted by the Master Collateral Agent or the
Trustee as the successor to the Lessor hereunder, irrespective of whether
the Lessee has received any such notice from the Lessor;
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(iii) The Lessee acknowledges that pursuant to the Indenture, the
Lessor has irrevocably authorized and directed the Lessee to, and the
Lessee shall, make payments of Rent hereunder directly to the Trustee for
deposit in the Collection Account established by the Trustee for receipt
of such payments pursuant to the Indenture, and such payments shall
discharge the obligation of the Lessee to the Lessor hereunder with
respect to Rent to the extent of such payments. The Lessee further
acknowledges that pursuant to the Master Collateral Agency Agreement, the
Lessor has irrevocably authorized and directed the Lessee to, and the
Lessee shall, cause all payments under the Lessee Agreements, the Vehicle
Disposition Programs, and all other Master Collateral pledged by the
Lessee for the benefit of the Trustee, 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 the 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 the Lessee to pay the Rent due hereunder on
the next succeeding Due Date. Upon written notice to the Lessee of a sale
or assignment by the Trustee or Master Collateral Agent of its right,
title and interest in moneys due under this Agreement or the Master
Collateral Agency Agreement to a successor Trustee or Master Collateral
Agent, the 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,
the 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
under this Agreement, the Certificates of Title with respect thereto and
the Master Collateral pursuant to the Master Collateral Agency Agreement;
and
(v) A security interest in the Lessor's rights under this Agreement
has been granted by the Lessor to the Trustee pursuant to the Indenture as
collateral security only for all Series of Notes that do not provide for
wholly segregated collateral and, accordingly, all references herein to
"all" Series of Notes shall refer only to all Series of Notes that do not
provide for wholly segregated collateral.
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SECTION 22. MODIFICATION AND SEVERABILITY. The terms of this Agreement
will not be waived, altered, modified, amended, supplemented or terminated in
any manner whatsoever except by a written instrument signed by the Lessor and
the Lessee and consented to in writing by the Master Collateral Agent and the
Trustee. If any part of this Agreement is not valid or enforceable according to
law, all other parts will remain enforceable. The Lessor shall provide prompt
written notice to each Rating Agency of any such waiver, modification or
amendment.
SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES. The Lessee represents
and warrants to the Lessor that as of the Closing Date with respect to the first
Series of Notes:
Section 23.1. Due Organization, Authorization, No Conflicts, Etc. The
Lessee 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 the Lessee. The execution, delivery and performance by the
Lessee of this Agreement and the other Related Documents to be executed and
delivered by it are within its corporate powers, have been duly authorized by
all necessary corporate action (including shareholder approval, if required),
have received all necessary governmental and other consents, approvals (in each
case if any shall be required), and do not and will not contravene or conflict
with, or create a default, breach, Lien or right of termination or acceleration
under, any Requirement of Law or Contractual Obligation binding upon it, other
than such default, breach, Lien or right of termination or acceleration which
does not have a Material Adverse Effect on the Lessee, as applicable. This
Agreement and each other Related Document to be executed and delivered by the
Lessee are (or when executed and delivered will be) the legal, valid, and
binding obligations of the Lessee, enforceable against the Lessee in accordance
with their respective terms, subject to bankruptcy, insolvency and other laws
affecting the enforcement of creditors' rights.
Section 23.2. Financial Information; Financial Condition. All balance
sheets, all statements of operations, of shareholders' equity and of cash flow,
and other financial data which have been or shall hereafter be furnished to the
Lessor or the Trustee for the purposes of or in connection with this Agreement
or the Related Documents have been and will be prepared in accordance with GAAP
and do and will present fairly the financial condition of the entities involved
as of the dates thereof and the results of their operations for the periods
covered thereby and that there has been no material change in the financial
condition or results of operation since the respective
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dates of such balance sheets, statements and other financial data. Such
financial data include the following financial statements and reports which have
been furnished to the Lessor and the Trustee on or prior to such Closing Date:
(a) the audited balance sheet of the Lessee as of December 31, 1994
and the related statements of operations, stockholders' equity and cash
flows for the fiscal year ending on such date; and
(b) the unaudited balance sheets of the Lessee and statement of
operations, accompanied by an Officer's Certificate verifying the accuracy
and completeness thereof signed by an Authorized Officer of the Lessee,
for the nine (9) month period ending September 30, 1995.
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
Lessee's knowledge, threatened against the Lessee which would, if adversely
determined, have a Material Adverse Effect on the Lessee.
Section 23.4. Liens. As of the date hereof, there is no financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) covering or purporting to cover any interest of any kind in
the Vehicles (other than (x) those created in connection with the indebtedness
of the Lessee to Chrysler Credit Corporation (with respect to which the security
interest perfected thereby has been assigned to the Lessor on or prior to this
date), (y) those set forth in Schedule 4, and (z) other Permitted Liens).
Section 23.5. Necessary Actions. Upon the Servicer 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,
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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, 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 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 therein and subject to no other Liens other than
Permitted Liens (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) 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.
Section 23.6. Employee Benefit Plans. (a) During the twelve consecutive
month period prior to the Closing Date: (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 the Lessee 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 the Lessee, and (c) the Lessee has no
material contingent liability with respect to any post-retirement benefits under
a Welfare Plan, other than liability for continuation coverage described in
Subtitle B of Part 6 of Title I of ERISA and liabilities which would not have a
Material Adverse Effect upon the Lessee.
Section 23.7. Investment Company Act. The Lessee is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
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Section 23.8. Regulations G, T, U and X. The Lessee is not 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 the Lessee
maintains a chief executive office, principal place of business, or any records;
and Schedule 3 also lists the Lessee's legal name, each name under or by which
the Lessee conducts its business, each state in which the Lessee conducts
business and the state in which the Lessee has its principal place of business.
Section 23.10. Taxes. The Lessee 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 the Lessee's
knowledge, material tax liability for any period for which returns have been
filed or were due, other than those contested in good faith by appropriate
proceedings and with respect to which (x) adequate reserves have been
established and are being maintained in accordance with GAAP and (y) the failure
to pay such taxes would not, individually or in the aggregate, have a Material
Adverse Effect on the Lessee or a material adverse effect on the Noteholders.
Section 23.11. Governmental Authorization. The Lessee 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 authorizes would not have a
Material Adverse Effect on the Lessee.
Section 23.12. Compliance with Laws. The Lessee: (i) is not in violation
of any Requirement of Law, which violation would have a Material Adverse Effect
on the Lessee, and to the best knowledge of the Lessee, 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
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true, correct and complete in all material respects), except where failure to
make such filings would not have a Material Adverse Effect on the Lessee, as
applicable; 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 the Lessee, as
applicable.
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 leasing an Eligible
Vehicle from the Lessor is or will be, as the case may be, on the sublease
commencement date with respect to such Eligible Vehicle, an Eligible Franchisee.
Section 23.14. Supplemental Documents True and Correct. All information
contained in any Vehicle Order or other Supplemental Document which has been
submitted, or which may hereafter be submitted by the Lessee to the Lessor is,
or will be, true, correct and complete.
Each of the foregoing representations and warranties will be deemed to be
remade as of the Closing Date with respect to each Series of Notes.
SECTION 24. CERTAIN AFFIRMATIVE COVENANTS. The Lessee and, as applicable,
the Servicer each covenants and agrees that, until the expiration or termination
of this Agreement, and thereafter until the obligations of the Lessee and the
Servicer under this Agreement and the Related Documents are satisfied in full,
unless at any time the Lessor, 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 the
corporate existence of the Lessee (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
the Lessee; and (iii) comply with all Contractual Obligations and Requirements
of Law binding upon it, except to the extent that the failure to comply
therewith would not, in the aggregate, have a Material Adverse Effect on the
Lessee.
Section 24.2. Books, Records and Inspections. (i) Maintain books and
records that are complete and accurate in all material respects with respect to
the Vehicles leased by it under this Agreement; and (ii) at any time and from
time to time during
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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 the Lessee relating to the
Vehicles leased under this Agreement, including without limitation, in
connection with the Master Collateral Agent's or the Trustee's satisfaction of
any requests of a Manufacturer performing an audit under its Vehicle Disposition
Program.
Section 24.3. Vehicle Disposition Programs. With respect to each Program
Vehicle leased by the 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 Servicer as follows: On each
Business Day commencing on the Lease Commencement Date, the Servicer shall
prepare and maintain at the office of the Servicer, a record (each, a
"Daily Report") setting forth the aggregate amount of (i) Guaranteed
Payments, Repurchase Payments, Disposition Proceeds and Incentive Payments
received from Manufacturers under Vehicle Disposition Programs or
incentive programs, or from other Persons in connection with the sale or
disposition of Vehicles, (ii) insurance proceeds, (iii) payments in
respect of Lessee Agreements, and (iv) any other Collections in respect of
the Master Collateral, and in each case deposited in the Master Collateral
Account and reported to the 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 such
Daily Report shall set forth additionally (x) the aggregate dollar amount
of such Collections allocable to each Beneficiary and to the Master
Collateral pledged thereto, (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 derived from the Master Collateral pledged by the
Lessor and the portion pledged by the Lessee, and (z) the aggregate dollar
amount of Sublease payments, insurance payments, warranty payments, and
other payments
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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 Lessee, as set forth in Section
2.5(b) of the Master Collateral Agency Agreement. Before 3:00 p.m. on each
such Business Day, the Servicer shall deliver a copy of the Daily Report
to the Master Collateral Agent and the Trustee.
(b) Monthly Certificate. Monthly certificates of the Servicer as
follows: On each Reporting Date, the Servicer shall forward to the Lessee,
the Lessor, the Trustee, the Paying Agent, the Rating Agencies and any
applicable Credit Enhancement Provider, an Officers' Certificate of the
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 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 (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, the total amount to be distributed to Noteholders
on the next succeeding Payment Date; (iv) for each Series, the amount of
such distribution allocable to principal on the Notes; (v) for each
Series, the amount of such distribution allocable to interest on the
Notes; (vi) for each Series, 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, the Series Monthly Servicing Fee for the next
succeeding Payment Date; (viii) for each Series, the existing Carryover
Controlled Amortization Amount, if any; (ix) for each Series or Class of
Notes, the applicable Pool Factors with respect to such Related Month; (x)
the Aggregate Asset Amount and the amount of the Asset Amount Deficiency,
if any, at the close of business on the last day of the Related Month;
(xi) if Enhancement is provided for any Series of Notes by means of
overcollateralization, the amount of recoveries and losses for the Related
Month and the amount of any excess funds available for such
overcollateralization; and (xii) whether, to the knowledge of the
Servicer, any Lien exists on any of the Collateral
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(other than Permitted Liens). The Trustee shall be under no duty to
recalculate, verify or recompute the information supplied to it under this
Section 24.4(b).
(c) Audit Report. As soon as available and in any event within one
hundred ten (110) days after the end of each fiscal year of the Lessee, a
copy of the consolidated balance sheet of the Lessee 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 (or such other independent certified public
accountants of recognized national standing as shall be selected by the
Lessee) as presenting fairly the financial condition and results of
operations of the Lessor, 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 Lessee, copies of the unaudited
consolidated balance sheet of the Lessee and its Subsidiaries as at the
end of such fiscal quarter and the related unaudited statements of
earnings, stockholders' equity and cash flows for the portion of the
fiscal year through such fiscal quarter (and as to the statements of
earnings for such fiscal quarter) in each case setting forth in
comparative form the figures for the corresponding periods of the previous
fiscal year, prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and
certified by the chief financial or accounting officer of the Lessee as
presenting fairly the financial condition and results of operations of the
Lessee and its Subsidiaries (subject to normal year-end adjustments);
(e) Lease Events of Defaults. Promptly after the Lessee 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 describing
such event and the action that the Lessee proposes to take with respect
thereto;
(f) Monthly Vehicle Statements. On or before the third Reporting
Date, 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 the Lessee, (ii) whether such
Vehicle is leased under Annex A or
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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 that have been delivered to
Manufacturers or designated Auctions pursuant to the applicable Vehicle
Disposition Program, or that have been otherwise sold, during the Related
Month, (vi) those Vehicles that have become a Casualty during the Related
Month and their respective Net Book Values (as of the first day of the
calendar month in which such Vehicle becomes a Casualty), (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 continuing in the
possession of the Lessee, (x) information with respect to the Lessee
necessary for the Servicer to compute the Aggregate Asset Amount as of the
end of the Related Month, (xi) information with respect to the Lessee
necessary for the Servicer to compute the Availability Payment for the
Lessee with respect to the Related Month, and (xii) any other charges
owing from, and credits due to, the Lessee under this Agreement;
(g) Annual Certificate. Annual Officers' Certificates of the Lessee
as follows: The Lessee will deliver to Thrifty Finance, the Trustee, any
applicable Enhancement Provider under the Indenture, and the Rating
Agencies rating any outstanding Series of Notes, on or before April 15 of
each calendar year, beginning with April 15, 1996, an Officers'
Certificate substantially in the form of Exhibit B (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, 1996) and of its performance under
this Agreement and the other Related Documents to which the 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 the Lessee has fully
performed all its obligations under this Agreement and such other Related
Documents throughout such year, or, if there has occurred such event or a
Lease Event of Default or Amortization Event, specifying each such event
known to
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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 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) Annual Report. Annual reports of independent public accountants
as follows: On or before April 15 of each calendar year, beginning with
April 15, 1996, the Lessee shall cause a firm of nationally recognized
independent public accountants (who may also render other services to the
Servicer) to furnish a report to Thrifty Finance, 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 Lessee pursuant to this Agreement
and the Master Collateral Agency Agreement during the period covered by
such report (which shall be the period from January 1 to and including
December 31 of the prior calendar year or for the calendar year ending
December 31, 1995 from the initial Closing Date to December 31, 1995) with
the Lessee'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 under this Agreement and
the other Related Documents to which the 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 accountants to believe that such
servicing (including the allocations of Collections under the Indenture)
has not been completed in compliance with all of the terms and conditions
set forth in the Indenture, any Supplement, this Agreement and the Master
Collateral Agency Agreement, except for (a) such exceptions as such
accountants believe to be
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immaterial and (b) such other exceptions as shall be set forth in such
report; and
(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, 1995, the
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the 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 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
material and such other exceptions as shall be set forth in such report.
(j) Other. From time to time, such other information, documents, or
reports regarding the Vehicles or the financial position, the results of
operations or business of the Lessee as the Lessor, the Master Collateral
Agent or the Trustee may from time to time reasonably request in order to
protect the interests of the Lessor, the Master Collateral Agent or the
Trustee under or as contemplated by this Agreement or any other Related
Document.
Section 24.5. Taxes and Liabilities. Pay when due all taxes, assessments
and other material (determined on a consolidated basis) liabilities (including,
without limitation, taxes, titling fees and registration fees payable with
respect to Vehicles), except as contested in good faith and by appropriate
proceedings (but only if and so long as forfeiture of any material part of the
Vehicles leased under this Agreement will not result from the failure to pay any
such taxes, assessments or other material liabilities during the period of any
such contest) and with respect to which (a) adequate reserves have been
established, and are being maintained, in accordance with GAAP and (b) the
failure to make such payments and the maintaining of such reserves would not
have a Material Adverse Effect on the Lessee or a material adverse effect on the
Noteholders.
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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 the Lessee.
Section 24.7. Maintenance of Separate Existence. Maintain certain policies
and procedures relating to its existence as a separate corporation as follows:
The Lessee acknowledges its receipt of a copy of that certain opinion letter
issued by ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, dated as of the Closing Date and addressing the
issue of substantive consolidation as it may relate to the Lessee and the
Lessor. The 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 the Lessee;
provided, however, that the Lessee may cease to maintain any policy or procedure
if and to the extent that the Lessee delivers to the Lessor and the Trustee an
Opinion of Counsel providing that such policy or procedure is no longer
necessary, due to a change in law or otherwise, for the rendering of such
earlier opinion relating to the issue of substantive consolidation.
Section 24.8. Master Collateral Agent as Lienholder. Maintain certain
computer records as follows: Concurrently with each leasing of a Vehicle under
this Agreement, the Servicer shall indicate on its computer records that the
Master Collateral Agent as assignee of the Lessor or the Lessee, 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 Lessee or the Servicer, as
the case may be, and (iv) at offices in the continental United States designated
by the Lessee or the Servicer, as the case may be, which, if they
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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 the
Lessee receives from the Trustee or any Note Owner a written request therefor,
which request shall (x) contain a certification of such Note Owner that such
person is a Note Owner and (y) provide an address for delivery, then and
thereafter, unless and until the Lessee receives from such Note Owner a request
to discontinue same, the Lessee 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 the Lessee of such information to any of the Trustee, any
Noteholder or Thrifty Finance, provided, however, if the Lessee is not otherwise
obligated hereunder to deliver such information to the Trustee, any Noteholder
or Thrifty Finance on a periodic basis, then, unless otherwise specified below,
the Lessee 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 Thrifty Finance's fleet;
(iii) copies of any new Vehicle Disposition Programs entered into by
Thrifty Finance 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 the 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 25. CERTAIN NEGATIVE COVENANTS. Until the expiration or
termination of this Agreement and thereafter until the obligations of the Lessee
are paid in full, the 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 the Lessee into or with
another entity if:
(a) the Person formed by such consolidation or into or with which
the 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 the 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 the Lessee
hereunder and under all other Related Documents;
(b) the 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 Existing Fleet in favor of Chrysler Credit Corporation, and the Liens set
forth in Schedule 4, and the following Liens to the extent such liens in the
aggregate would not have a Material Adverse Effect on the Lessor, the Master
Collateral Agent or the Trustee or the Noteholders under this Agreement or the
Indenture (all the foregoing Liens collectively, the "Permitted Liens"): (i)
Liens for current taxes not delinquent or for taxes being contested in good
faith and by appropriate proceedings, and with respect to which adequate
reserves have been established, and are being maintained, in accordance with
GAAP, (ii) Liens, including judgment liens, arising in the ordinary course of
business being
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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 at
Auction under an Eligible Vehicle Disposition Program, except with respect to
the permitted redesignation of Program Vehicles as Non-Program Vehicles,
pursuant to Section 14, or (ii) subject the Vehicles to confiscation.
Section 25.5. Acquisition and Financing of Vehicles. Use funds on deposit
in or required to be deposited into the Excess Funding Account (as defined in
the related Supplement) or the Retained Distribution Account to acquire or
finance Vehicles during any calendar month or series of consecutive calendar
months if the Vehicle Ratio for such month or series of months exceeds the
following amounts:
For any month 30%
For any two consecutive months 50%
For any three consecutive months 70%
For any four consecutive months 80%
For any five consecutive months 90%
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, the 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. Except as otherwise specified in the related Supplement, the
Monthly Servicing Fee for each Series of Notes (each, a "Series Monthly
Servicing Fee") on each Payment Date shall be equal to (i) the portion of the
Supplemental Servicing Fee allocated to such Series of Notes pursuant to the
related Supplement, plus (ii) one-twelfth of the product of
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(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 shall be paid to the Servicer pursuant to the procedures set forth in the
applicable Supplement. The supplemental servicing fee (the "Supplemental
Servicing Fee") for any period shall be equal to all Carrying Charges comprising
payments due from the Servicer under Section 26.2 hereof.
Section 26.2. The Servicer's expenses include, and the Servicer agrees to
pay, the amounts due to the Trustee pursuant to Section 9.5 of the Indenture,
plus the reasonable fees and disbursements of independent accountants in
connection with reports furnished pursuant to Sections 24.4(h) and (i), plus all
other fees, expenses and indemnities incurred by the Servicer or the Lessor in
connection with the Servicer's activities hereunder or under the Related
Documents. The Servicer, however, shall not be liable for any liabilities, costs
or expenses of the Lessor, the Trustee or the Noteholders arising under any tax
law, including without limitation any Federal, state or local income or
franchise taxes or any other tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a failure to comply
therewith), except to the extent incurred as a result of the 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 Lessee under Section 15 of the Lease. In the
event that the 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 the
Servicer.
SECTION 27. BANKRUPTCY PETITION AGAINST LESSOR. The Lessee 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, 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 the Lessee (or any sublessee thereof) takes
action in violation of this Section 27, 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 the Lessee against
the Lessor or the commencement of such action and raise the defense that the
Lessee has agreed in writing not to take such action and should be estopped and
precluded therefrom and such other defenses, if any, as its
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counsel advises that it may assert. The provisions of this Section 27 shall
survive the termination of this Agreement.
SECTION 28. SUBMISSION TO JURISDICTION. THE LESSOR, THE MASTER COLLATERAL
AGENT AND THE TRUSTEE MAY ENFORCE ANY CLAIM ARISING OUT OF THIS AGREEMENT IN ANY
STATE OR FEDERAL COURT HAVING SUBJECT MATTER JURISDICTION, INCLUDING, WITHOUT
LIMITATION, ANY STATE OR FEDERAL COURT LOCATED IN THE STATE OF NEW YORK IN THE
BOROUGH OF MANHATTAN IN NEW YORK CITY. FOR THE PURPOSE OF ANY ACTION OR
PROCEEDING INSTITUTED WITH RESPECT TO ANY SUCH CLAIM, THE LESSEE HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS. THE LESSEE HEREBY
IRREVOCABLY DESIGNATES CT CORPORATION SYSTEM, INC., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, TO RECEIVE FOR AND ON BEHALF OF THE LESSEE SERVICE OF PROCESS IN NEW
YORK. THE LESSEE FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF
SAID COURTS BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO
THE LESSEE AND AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW,
(I) SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY
SUCH SUIT, ACTION OR PROCEEDING AND (II) SHALL BE TAKEN AND HELD TO BE VALID
PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO IT. Nothing herein contained
shall affect the right of the Lessor to serve process in any other manner
permitted by law or preclude the Lessor, the Master Collateral Agent or the
Trustee from bringing an action or proceeding in respect hereof in any other
country, state or place having jurisdiction over such action. THE LESSEE 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 29. GOVERNING LAW. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. All obligations of the
Lessee 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.
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SECTION 30. JURY TRIAL. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT TO WHICH IT IS A
PARTY, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM ANY
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED
TRANSACTION, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE
A COURT AND NOT BEFORE A JURY.
SECTION 31. 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
31) to the other parties and signatories hereto. In each case, a copy of all
notices, requests and other communications (other than any such notices,
requests and other communications in the ordinary course of business) that are
sent by any party or signatory hereunder shall be sent to the Trustee. Copies of
notices, requests and other communications delivered to the Trustee pursuant to
the foregoing sentence shall be sent to the following address:
BANKERS TRUST COMPANY
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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 32. HEADINGS. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
SECTION 33. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute one and the same Agreement.
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SECTION 34. EFFECTIVENESS. This Agreement shall become effective on the
Lease Commencement Date.
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused it
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
LESSOR:
THRIFTY CAR RENTAL FINANCE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LESSEE AND SERVICER:
THRIFTY RENT-A-CAR SYSTEM, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
50
Acknowledged by:
MASTER COLLATERAL AGENT
Bankers Trust Company
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Treasurer
Address: ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Agency Group/
Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
51
ANNEX A
ANNEX
to the
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
Dated as of December 13, 1995
between
THRIFTY CAR RENTAL FINANCE CORPORATION,
as Lessor,
and
THRIFTY RENT-A-CAR SYSTEM, INC.,
as Lessee and Servicer
52
1. Scope of Annex. This Annex A shall apply only to the acquisition,
leasing and servicing of the Acquired Vehicles by Thrifty Finance pursuant to
the Base Lease, as supplemented by this Lease Annex (collectively, the
"Operating Lease").
2. General Agreement. With respect to the Acquired Vehicles, the 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 Lessee pursuant thereto and hereto shall always be only that of lessor and
lessee, and the Lessee hereby declares, acknowledges and agrees that the Lessor
has title to and is the owner of the Acquired Vehicles. The Lessee shall not
acquire by virtue of the Lease any right, equity, title or interest in or to any
Acquired Vehicles, except the right to use the same under the terms of the
Operating Lease hereof. The parties agree that the Operating Lease is a "true
lease" for all legal, accounting, tax and other purposes and agree to treat the
Operating Lease, as it applies to the Acquired Vehicles, as an operating lease
for all purposes, including tax, accounting and otherwise. The parties will file
all federal, state and local tax returns and reports in a manner consistent with
the preceding sentence.
3. Operating Lease Commitment. (a) Upon the execution and delivery of this
Operating Lease, the Lessor shall, subject to the terms and conditions of the
Agreement, purchase from time to time on or after the Lease Commencement Date
and prior to the Lease Expiration Date, all Acquired Vehicles identified in
Vehicle Orders placed by the 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 the 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 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 the Lessor 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
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Commencement Date and identified in such Vehicle Order, and any related
Vehicle Disposition Programs;
(c) with respect to the initial lease of Acquired Vehicles, a fully
executed Assignment Agreement covering each Acquired Vehicle leased on the
Lease Commencement Date or to be leased on any date thereafter, the
related Vehicle Disposition Programs, and any other Master Collateral
relating to such Vehicles.
The 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
Vehicle Lease Commencement Date. On the occurrence of such date for a Vehicle
not previously disposed of, the 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 the Lessee under the Lease in respect of
such Vehicle.
6. Lessee's Rights to Purchase Vehicles. The 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 under this
Agreement at the Vehicle Purchase Price, in which event the Lessee will pay the
Vehicle Purchase Price to the Master Collateral Agent on or before the Due Date
next succeeding such purchase by the Lessee plus all accrued and unpaid Monthly
Base Rent and Monthly Variable Rent with respect to such Vehicle through the
date of such purchase. The Lessor shall cause title to any such Vehicle to be
transferred to the Lessee, and the Servicer shall cause the Master Collateral
Agent to cause its lien to be removed from the certificate of title for such
Vehicle, concurrently with or promptly after the Vehicle Purchase Price for such
Vehicle (and any unpaid Monthly Base Rent and unpaid Monthly Variable Rent) is
paid by the Lessee to the Master Collateral Agent.
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7. Vehicle Disposition. The Lessor and the Lessee agree that, with respect
to Acquired Vehicles, the Lessee shall use its commercially reasonable efforts
to deliver each Program Vehicle for sale at Auction or to return each 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, the Lessee fails to deliver such
a Program Vehicle to the applicable Manufacturer for repurchase by the
Manufacturer or to an Auction for sale, 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, the
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. The Lessee shall, with respect to Acquired
Vehicles, 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 the Lessee
agree, with respect to Acquired Vehicles, that the Lessee shall use its
commercially reasonable efforts to dispose of each Non-Program Vehicle (a) in a
manner most likely to maximize proceeds from such disposition and consistent
with industry practice and (b) within twenty-four (24) months after the date of
the original new vehicle dealer invoice for such Vehicle. All Disposition
Proceeds due from the disposition of Non-Program Vehicles pursuant to this
Section shall be due and payable to the Lessor.
8. Lessor's Right to Cause Vehicles to be Sold. Notwithstanding anything
to the contrary contained in the Agreement, the Lessor shall have the right, at
any time after the date thirty (30) days prior to the expiration of the Maximum
Term for any Program Vehicle leased under this Annex A, to require that the
Lessee deliver such Program Vehicle to the Manufacturer for repurchase or, as
applicable, to the designated Auction for sale, 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 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 the Lessee prior to the
expiration of such Maximum Term, then the Lessee shall deliver the Program
Vehicle to the
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purchaser thereof, the Lien of the Master Collateral Agent on the Certificate of
Title of such Program Vehicle shall be released, and the Lessee shall cause to
be delivered to the Lessor the funds paid for such Program Vehicle by the
purchaser. If the Lessee is unable to arrange for a sale of the Program Vehicle
prior to the expiration of such Maximum Term, then the 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 for Auction 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.
9. Calculation of Rent. Rent shall be due and payable on a monthly basis
as set forth in this paragraph 9:
"Monthly Base Rent", with respect to each Due Date and each Acquired
Vehicle leased under the Lease on any day during the Related Month, shall
be the sum of all Depreciation Charges that have accrued with respect to
such Vehicle during the Related Month.
"Monthly Variable Rent", with respect to each Due Date and each
Acquired Vehicle leased under the Lease on any day during the Related
Month, shall equal the sum, without double counting, of (a) the product of
(i) an amount equal to the Net Book Value of such Acquired Vehicle on the
first day contained within both the Related Month and the Vehicle Term
with respect to such Vehicle multiplied by the VFR for the Interest Period
ending on the next succeeding Payment Date and (ii) the quotient obtained
by dividing (A) the number of days contained within both the Related Month
and the Vehicle Term with respect to such Acquired Vehicle by (B) the
total number of days in the Related Month, plus (b) the product of (i) an
amount equal to all Carrying Charges for the Related Month, and (ii) the
quotient obtained by dividing the Net Book Value of such Acquired Vehicle
as of the first day of the Related Month by the Net Book Value of all
Vehicles leased under the Lease as of the first day of the Related Month.
"Rent" means Monthly Base Rent plus Monthly Variable Rent.
10. Payment of Rent and Other Payments.
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(a) Monthly Base Rent. On each Due Date, the 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 under the Operating Lease on
any day during the Related Month;
(b) Monthly Variable Rent. On each Due Date, the 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 under the Operating
Lease on any day during the Related Month;
(c) Termination Payments, Casualty Payments and Late Return
Payments. On each Due Date, the Lessee shall pay to the Lessor all
Termination Payments, Casualty Payments and Late Return Payments as
provided in Section 5.4 of the Base Lease; and
(d) Certain Other Payments. The Lessee shall cause all Disposition
Proceeds, Repurchase Payments, Guaranteed Payments and Incentive Payments
payable in respect of Acquired Vehicles to be paid directly to the Master
Collateral Agent for the benefit of the Trustee. The Servicer and the
Lessee each agree that in the event that the Servicer or the Lessee shall
receive directly any such payment, including cash, securities, obligations
or other property, the Servicer or the 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 the Lessee, as the case
may be, when necessary or appropriate.
11. Net Lease. THE OPERATING LEASE SHALL BE A NET LEASE, AND THE 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 Lessee hereunder shall
in no way be released, discharged or otherwise affected (except as may be
expressly provided herein including, without limitation, the right of the 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
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Vehicles or any part thereof; (v) any change, waiver, extension, indulgence or
other action or omission in respect of any obligation or liability of the Lessee
or the Lessor; (vi) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to the
Lessee, the Lessor or any other Person, or any action taken with respect to the
Operating Lease by any trustee or receiver of any Person mentioned above, or by
any court; (vii) any claim that the Lessee has or might have against any Person,
including without limitation the Lessor; (viii) any failure on the part of the
Lessor to perform or comply with any of the terms hereof or of any other
agreement; (ix) any invalidity or unenforceability or disaffirmance of the
Operating Lease or any provision hereof or any of the other Related Documents or
any provision of any thereof, in each case whether against or by the Lessee or
otherwise; (x) any insurance premiums payable by the Lessee with respect to the
Vehicles; or (xi) any other occurrence whatsoever, whether similar or dissimilar
to the foregoing, whether or not the Lessee shall have notice or knowledge of
any of the foregoing and whether or not foreseen or foreseeable. The Operating
Lease shall be noncancelable by the Lessee and, except as expressly provided
herein, the Lessee, to the extent permitted by law, waives all rights now or
hereafter conferred by statute or otherwise to quit, terminate or surrender the
Operating Lease, or to any diminution or reduction of Rent payable by the Lessee
hereunder. All payments by the Lessee made hereunder shall be final (except to
the extent of adjustments provided for herein), absent manifest error and,
except as otherwise provided herein, the Lessee shall not seek to recover any
such payment or any part thereof for any reason whatsoever, absent manifest
error. If for any reason whatsoever the Operating Lease shall be terminated in
whole or in part by operation of law or otherwise except as expressly provided
herein, the Lessee shall nonetheless pay an amount equal to each Rent payment at
the time and in the manner that such payment would have become due and payable
under the terms of the Operating Lease as if it had not been terminated in whole
or in part. All covenants and agreements of the Lessee herein shall be performed
at its cost, expense and risk unless expressly otherwise stated.
12. Liens. Except for Permitted Liens, the Lessee shall keep all Vehicles
leased by it free of all Liens arising during the Term. Upon the Vehicle Lease
Expiration Date for each Vehicle leased hereunder, the Lessor may, in its
discretion, remove any such Lien and any sum of money that may be paid by the
Lessor in release or discharge thereof, including attorneys' fees and costs,
will be paid by the Lessee upon demand by the Lessor. The Lessor may grant
security interests in the Vehicles without consent of the Lessee; provided,
however, that if any such Liens would interfere with the rights of the Lessee
under the Operating Lease or any sublessee of the Lessee, the Lessor must obtain
the
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prior written consent of the Lessee. The 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 the Lessee under the
Operating Lease.
13. Non-Disturbance. So long as the Lessee satisfies its obligations
hereunder, its quiet enjoyment, possession and use of the Vehicles will not be
disturbed during the Term subject, however, to paragraph 8 of Annex A to the
Lease and except that the Lessor, the Master Collateral Agent and the Trustee
each retains the right, but not the duty, to inspect the Vehicles without
disturbing the ordinary conduct of the Lessee's business. Upon the request of
the Lessor, the Master Collateral Agent or the Trustee, from time to time, the
Lessee will make reasonable efforts to confirm to the Lessor, the Master
Collateral Agent and the Trustee the location, mileage and condition of each
Vehicle and to make available for the Lessor's, the Master Collateral Agent's or
the Trustee's inspection within a reasonable time period, not to exceed
forty-five (45) days, the Vehicles at the location where the Vehicles are
normally domiciled. Further, the Lessee (and each Franchisee) will, during
normal business hours and with a notice of three (3) Business Days, make its
records pertaining to the Vehicles available to the Lessor, the Master
Collateral Agent or the Trustee for inspection at the location where the
Lessee's (and each Franchisee's) records are normally domiciled.
14. Certain Risks of Loss Borne by Lessee. Upon delivery of each Vehicle
to the Lessee, as between the Lessor and the Lessee, the 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 Lessee 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 this
Agreement. In addition, the 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) the Lessee has no right, title or interest in
any Vehicle Disposition Program as it relates to any Vehicle
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leased hereunder. To confirm the foregoing, the Lessee, by its execution hereof,
hereby assigns and transfers to the Lessor any rights that the 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 December 13, 1995
between
THRIFTY CAR RENTAL FINANCE CORPORATION,
as Lessor,
and
THRIFTY RENT-A-CAR SYSTEM, INC.,
as Lessee and Servicer
61
1. Scope of Annex. This Annex B shall apply only to the acquisition or
financing, leasing and servicing of the Financed Vehicles by Thrifty Finance
pursuant to the Base Lease, as supplemented by this Lease Annex (collectively,
the "Financing Lease").
2. General Agreement. With respect to the Financed Vehicles, the Lessee
and the Lessor each intend that the Base Lease, as supplemented by this Lease
Annex, constitute a financing arrangement and that the relationship between the
Lessor and the Lessee pursuant thereto and hereto shall always be only that of
lessor and lessee, and the Lessor hereby declares, acknowledges and agrees that
the ownership of the Financed Vehicles rests solely with the Lessee subject to
the security interest granted hereunder to the Lessor.
3. Financing Lease Commitment. Subject to the terms and conditions of the
Financing Lease, upon execution and delivery of the Financing Lease, the Lessor
shall (i) on the Lease Commencement Date purchase from the Lessee the Existing
Fleet for a purchase price equal to the aggregate Net Book Value thereof, and
(ii) from time to time on or after the Lease Commencement Date and prior to the
Lease Expiration Date purchase all other Financed Vehicles identified in Vehicle
Orders placed by the Lessee for a purchase price equal to the Initial
Acquisition Cost thereof, and in each case simultaneously therewith enter into
this Financing Lease with the Lessee with respect to the Existing Fleet and
other Financed Vehicles, as the case may be; provided, that the aggregate
outstanding Base Amount of the Financing Lease shall not on any date exceed (a)
the Maximum Lease Commitment, less (b) the sum of (x) the sum of the Net Book
Values of Acquired Vehicles leased under the Operating Lease on such date, each
such Net Book Value calculated as of the first day contained within both the
calendar month in which such date of determination occurs and the Vehicle Term
for the related Acquired Vehicle, plus (y) accrued and unpaid Monthly Base Rent
under the Operating Lease as of such date.
4. Lease Procedures.
(a) Initial Lease. In connection with the Lease of the Existing
Fleet and any other Financed Vehicles to be leased on the Lease
Commencement Date, to evidence the refinancing of the Vehicles in the
Existing Fleet and the acquisition and financing of such other Financed
Vehicles by the Lessor on the Lease Commencement Date and the conveyance
on such date of a security interest in such Financed Vehicles to the
Master Collateral Agent, the Lessee shall deliver to the Lessor on or
prior to the Lease Commencement Date the following:
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(i) a schedule concerning the Existing Fleet as specified in
Section 2.1 of the Base Lease, in the case of all Vehicles in the
Existing Fleet, or a Vehicle Order (including a Vehicle Acquisition
Schedule) with respect to all other Financed Vehicles to be leased
by the Lessor on the Lease Commencement Date;
(ii) a report of the results of a search of the appropriate
records of the county and state in which the Existing Fleet are
located and the county and state in which the Lessee's principal
office is located, which shall show no liens or other security
interests (other than Permitted Liens and the lien of Chrysler
Credit 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 each lender holding a security
interest in any Vehicle in the Existing Fleet stating
unconditionally (A) that, if any sums are to be paid to such lender
in connection with the lease of the Existing Fleet, such lender has
been paid the full amount due to it in connection with such
refinancing and (B) that any lien or security interest of such
lender in such Vehicle has been released;
(iv) UCC termination statements terminating, or UCC partial
releases releasing, any security interests and other liens (other
than Permitted Liens and the lien of Chrysler Credit 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) a fully executed Assignment Agreement covering each
Vehicle in the Existing Fleet and each other Financed Vehicle leased
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 stating that all the conditions
precedent under the Lease to the leasing of such Vehicles on the
Lease Commencement Date have been satisfied.
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(b) Subsequent Leases. In connection with each Lease of a Financed
Vehicle after the Lease Commencement Date, to evidence the acquisition or
financing of such Financed Vehicle by the Lessor and the conveyance of a
security interest in such Financed Vehicles to the Master Collateral
Agent, the Lessee shall deliver to the Lessor a Vehicle Order (including a
Vehicle Acquisition Schedule) with respect to all Financed Vehicles to be
leased by the Lessor on the date specified therein. The 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 or financing 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
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 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
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Book Value of all Vehicles leased under the Lease as of the first day of
the Related Month.
"Monthly Supplemental Payment" with respect to each Due Date and
each Financed Vehicle shall be an amount equal to (a) the sum of, as
applicable, (i) the aggregate amount of any Guaranteed Payment, Repurchase
Payment, Disposition Proceeds and Incentive Payments received by the
Lessor, the Master Collateral Agent or the Trustee (including by deposit
into the Collection Account or the Master Collateral Account) during the
Related Month with respect to such Vehicle, (ii) the amount of any unpaid
Guaranteed Payment or unpaid Repurchase Payment with respect to such
Vehicle becoming a Delinquent Guaranteed Payment or Delinquent Repurchase
Payment, as the case may be, during the Related Month, (iii) the amount of
any Disposition Proceeds with respect to such Vehicle becoming Delinquent
Disposition Proceeds during the Related Month, (iv) the amount of any
unpaid Incentive Payments with respect to such Vehicle becoming Delinquent
Incentive Payments during the Related Month, (v) if such Vehicle becomes a
Casualty or ceases to be an Eligible Vehicle (other than as a result of
the sale or other disposition thereof), in each case during the Related
Month, the Net Book Value of such Vehicle calculated as of the first day
of the Related Month, 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 from the sale or other disposition of such Vehicle
(other than pursuant to an Eligible Vehicle Disposition Program) received
by the Lessor, the Master Collateral Agent or the Trustee (including by
deposit into the Collection Account or the Master Collateral Account)
during such Related Month over (ii) the Net Book Value of such Vehicle,
calculated as of the applicable Vehicle Lease Expiration Date.
"Rent" means Monthly Base Rent plus Monthly Finance Rent.
7. Payment of Rent and Other Payments. (a) On each Due Date:
(i) Monthly Base Rent. The 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
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under the Finance Lease on any day during the Related Month; provided,
however, that in the event that delinquent payments of Guaranteed
Payments, Repurchase Payments, Disposition Proceeds and/or Incentive
Payments are received by the Lessor, the Master Collateral Agent or the
Trustee (including by deposit into the Collection Account or the Master
Collateral Account) during the Related Month, such payments may be netted
against the Monthly Base Rents to be paid on such Due Date to the extent
(but only to the extent) that Monthly Base Rent has already been received
by any of such Persons in respect of such delinquent payment obligations
pursuant to any or all of clauses (a)(ii), (iii) and (iv) of the
definition of Monthly Supplemental Payment set forth in this Annex B;
(ii) Monthly Finance Rent. The 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 under the Finance Lease on any
day during the Related Month.
(iii) Monthly Supplemental Payments. The 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 under the
Finance Lease on any day during the Related Month; provided, however, that
in the event that the Monthly Supplemental Payment accrued during a
Related Month is a negative dollar amount, such amount may be netted
against other payments to be paid on such Due Date pursuant to this
paragraph 7.
(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 the Lessee
under the Financing Lease with respect to such Vehicle shall be immediately due
and payable.
(c) The 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 the 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 Lessee. Upon delivery of each Vehicle to the
Lessee, as between the Lessor and the Lessee, the 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
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66
the manufacture, purchase, acceptance, rejection, ownership, delivery, leasing,
subleasing, possession, use, inspection, registration, operation, condition,
maintenance, repair, storage, sale, return or other disposition of such Vehicle,
howsoever arising.
9. Mandatory Repurchase of Texas Vehicles. Prior to the Vehicle Lease
Expiration Date with respect to each Texas Vehicle (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 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), the Lessee shall purchase such
Texas Vehicle (including any such Vehicle which has become a Casualty) at a
purchase price equal to the Net Book Value of such Vehicle calculated as of the
date of purchase (or, in the case of a Casualty, at a purchase price equal to
the Monthly Supplemental Payments accruing in respect of such Casualty during
the Related Month in which such Vehicle became a Casualty), which shall be
payable to the Master Collateral Agent (together with all accrued and unpaid
Rent and other payments due and payable on such Due Date with respect to such
Texas Vehicle through the date of such purchase) on or prior to the Due Date
next succeeding such purchase by the Lessee. The Lessor shall cause title to
each Texas Vehicle to be transferred to the 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
the Lessee to the Master Collateral Agent. Notwithstanding anything to the
contrary in this Agreement, no Texas Vehicle may be sold or otherwise disposed
of (other than pursuant to Section 17.3 of the Base Lease), including at Auction
or by return to its Manufacturer pursuant to a Vehicle Disposition Program,
prior to its purchase by the Lessee pursuant to and in accordance with this
paragraph 9.
* * *
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused it
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
LESSOR:
THRIFTY CAR RENTAL FINANCE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
LESSEE AND SERVICER:
THRIFTY RENT-A-CAR SYSTEM, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
68
Schedule 1
Litigation Claims
69
SCHEDULE 1
to Master Motor Vehicle Lease and Services Agreement
1. APCO Enterprises, Inc. v. Thrifty Rent-A-Car System, Inc., Case No.
95-C-691-E, U.S. District Court for the Northern District of Oklahoma
2. ▇▇▇▇▇ ▇▇▇▇▇▇▇, et al. v. Alamo, et al, Case No. 94-S-2148, U.S. District
Court for the District of Colorado
3. ▇▇▇▇▇▇▇ v. Exxon Corporation, Thrifty Rent-A-Car System, Inc., et al, ▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ of California
4. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇ Cars dba Thrifty Car Rental, Case No. 95-0228, U.S.
District Court, Southern District of Florida
5. Thrifty Rent-A-Car System, Inc. ▇. ▇▇▇▇▇▇ Enterprises, Inc., ▇▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Case ▇▇. ▇▇ ▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇▇ Court for
the Northern District of Oklahoma
6. Thrifty Rent-A-Car System, Inc., et al. and AFL-CIO, Case No. 6-CA-26998,
Before the Nation Labor Relations Board, Region Six
7. Thrifty Canada, Ltd. v. Lakeside Management Group Limited, Lakeside
Management Holdings Ltd., ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇, in
Winnipeg, Manitoba, Canada
8. MCAIC in Receivership
9. All matters which are recorded as accrual, reserve or obligation on the
books of Thrifty Rent-A-Car System, Inc. and its subsidiaries
10. Thrifty Rent-A-Car System, Inc., v. CRS Leasing, Inc., et al, Case ▇▇. ▇▇
▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ for the Northern District of Oklahoma
11. CRS Leasing v. Thrifty Rent-A-Car System, Inc., Case No. 95 CVS 7331,
General Court of Justice Superior Court Division
12. Thrifty Rent-A-Car System, Inc., v. ▇▇▇▇ ▇▇▇▇▇▇ Company, et al, ▇▇▇▇ ▇▇.
▇▇-▇▇-▇▇▇▇-▇, ▇.▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Oklahoma
70
13. Thrifty Rent-A-Car System, Inc., v. Newco Corporation and ▇▇▇▇▇ ▇. ▇▇▇▇▇,
Case No. 95 C 265H, U.S. District Court for the Northern District of
Oklahoma
14. Thrifty Rent-A-Car System, Inc. v. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Inc., et al, Case
No. 95-C-233-K, U.S. District Court for the Northern District of Oklahoma
15. Gateway Rentals, Inc. matter
71
Schedule 2
Pension Plans
72
SCHEDULE 2
to Master Motor Vehicle lease and Services Agreement
1. Deferred Contribution Plan pursuant to Section 401(k) of the Internal
Revenue code
2. Non-qualified Deferred Compensation Plan
73
SCHEDULE 3
to Master Motor Vehicle Lease and Services Agreement
1. Chief Executive Office and Principal Place of Business:
Thrifty Rent-A-Car System, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
2. Records Locations:
Space Center III (Records Center Warehouse)
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Storage Plus by 5R, Inc. (Records Storage Third Party)
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
BMI Media Storage Security (Computer Tape Back-up Storage)
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
3. Legal Name:
Thrifty Rent-A-Car System, Inc.
4. Names under which business is conducted:
Thrifty Rent-A-Car
Thrifty Car Rental
Thrifty (used also with subtitles; i.e., car rental, truck rental,
parking, airport parking, used car sales and leasing)
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ Car Rental
5. States in which business is conducted:
Each of the 50 states from time to time
74
Schedule 4
Liens
