1
EXHIBIT 4.18
TEAM FLEET FINANCING CORPORATION
AS LESSOR
TEAM RENTAL GROUP, INC.
AS GUARANTOR
Those Subsidiaries, Affiliates
and Non-Affiliates of Team Rental Group, Inc.
named on Schedule 1 hereto
as Lessees
MOTOR VEHICLE LEASE AGREEMENT
SERIES 1996-1
Dated as of December 1, 1996
2
TABLE OF CONTENTS
Page
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. GENERAL AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1. Acquisition of Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2. Right of Lessees to Act as Lessor's Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3. Payment of Capitalized Cost by Lessor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4. Non-liability of Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.5. Lessees' Rights to Purchase Vehicles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6. Disposition of Vehicles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.7. Limitations of the Acquisition of Certain
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3. TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.1. Vehicle Term: Repurchase Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.2. Vehicle Term: Non-Repurchase Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.3. The "Lease Commencement Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4. RENT AND CHARGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2. Payment of Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.3. Late Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.4. Net Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1. Personal Injury and Damage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.2. Delivery of Certificate of Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.3. Changes in Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6. RISK OF LOSS AND CASUALTY OBLIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.1. Risk of Loss Borne by Lessee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2. Casualty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7. VEHICLE USE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8. LIENS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9. NON-DISTURBANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10. REGISTRATION; LICENSE; TRAFFIC SUMMONSES;
PENALTIES AND FINES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11. MAINTENANCE AND REPAIRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
12. VEHICLE WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
12.1. No Lessor Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
12.2. Manufacturer's Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3
13. REPURCHASE VEHICLE USAGE GUIDELINES AND RETURN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.1. Usage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.2. Return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.3. Termination Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.4. Repurchase Price Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
14. DISPOSITION PROCEDURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
15. ODOMETER DISCLOSURE REQUIREMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16. GENERAL INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16.1. Indemnity by the Lessee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16.2. Reimbursement Obligation by
the Lessee Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
16.3. Defense of Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
17. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
17.1. Right of the Lessor to Assign
this Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
17.2. Limitations on the Right of the
Lessee to Assign this Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
18. DEFAULT AND REMEDIES THEREFOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
18.1. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
18.2. Effect of Lease Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
18.3. Rights of Lessor Upon Lease Event of Default,
Liquidation Event of Default or Limited
Liquidation Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
18.4. Rights of Trustee Upon Liquidation
Event of Default, Limited Liquidation
Event of Default and Non-Performance of
Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
18.5. Measure of Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
18.6. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
19. MANUFACTURER EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
20. LESSEE PARTIAL WIND-DOWN EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
21. ELIGIBILITY WAIVER EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
22. CERTIFICATION OF TRADE OR BUSINESS USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
23. SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
24. ADDITIONAL LESSEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
24.1. Additional Affiliate and Subsidiary Lessees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
24.2. Additional Non-Affiliate Lessees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
25. TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
26. GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
26.1. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
26.2. Scope of Guarantor's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
- ii -
4
26.3. Lessor's Right to Amend this Agreement, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
26.4. Waiver of Certain Rights by Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
26.5. Lessees' Obligations to Guarantor and
Guarantor's Obligations to Lessees
Subordinated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
26.6. Guarantor to Pay Lessor's Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
26.7. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
26.8. Pari Passu Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
27. RIGHTS OF LESSOR ASSIGNED TO TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
28. RIGHT OF LESSEE TO DELEGATE RIGHTS AND
OBLIGATIONS HEREUNDER TO GUARANTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
29. MODIFICATION AND SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
30. CERTAIN REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
30.1. Due Organization, Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
30.2. Financial Information; Financial
Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
30.3. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
30.4. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
30.5. Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
30.6. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
30.7. Regulations G, T, U and X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
30.8. Business Locations; Trade Names;
Principal Places of Business
Locations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
30.9. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
30.10. Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
30.11. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
30.12. Eligible Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
30.13. Supplemental Documents True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
31. CERTAIN AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
31.1. Corporate Existence;
Foreign Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
31.2. Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
31.3. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
31.4. Repurchase Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
31.5. Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
31.6. Taxes and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
31.7. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
31.8. Maintenance of Separate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
31.9. Trustee as Lienholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
31.10. Retitling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
32. CERTAIN NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
32.1. Mergers, Consolidations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
32.2. Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
32.3. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
32.4. Use of Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
33. BANKRUPTCY PETITION AGAINST LESSOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
- iii -
5
34. SUBMISSION TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
35. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
36. JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
37. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
38. LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
39. TITLE TO REPURCHASE PROGRAMS IN LESSOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
40. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
41. EXECUTION IN COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
42. EFFECTIVENESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Schedule 1 Lessees on Date of Execution of Lease
Schedule 2 Lessees Selling Team Acquired Vehicles
on Date of Execution of Lease
Schedule 30.8 Business Locations
ATTACHMENT A VEHICLE ACQUISITION SCHEDULE
ATTACHMENT B FORM OF POWER OF ATTORNEY
ATTACHMENT C-1 FORM OF AFFILIATE JOINDER IN LEASE
ATTACHMENT C-2 FORM OF NON-AFFILIATE JOINDER IN LEASE
ATTACHMENT D FORM OF ▇▇▇▇ OF SALE
- iv -
6
MOTOR VEHICLE LEASE AGREEMENT
This Motor Vehicle Lease Agreement - Series 1996-1 (this "Agreement"),
dated as of December 1, 1996, by and among TEAM FLEET FINANCING CORPORATION, a
Delaware corporation ("Lessor"), those direct or indirect Subsidiaries (the
"Team Lessees") of Team Rental Group, Inc., a Delaware corporation ("Team"),
those Affiliates (other than the Team Lessees) and non-Affiliates of Team (such
Affiliates and non-Affiliates, the "Non-Team Lessees") that are listed on
Schedule 1 hereto and those that become party to this Agreement pursuant to the
provisions of Section 24 hereof (individually, each Team Lessee and each
Non-Team Lessee, a "Lessee" and, collectively, the "Lessees"), and TEAM RENTAL
GROUP, INC., as guarantor (Team, in such capacity, is referred to as the
"Guarantor"; the Guarantor, together with the Lessees is from time to time
referred to as the "Lessee Group").
W I T N E S S E T H:
WHEREAS, the Lessor has purchased or will purchase Repurchase Vehicles
and Non-Repurchase Vehicles from Manufacturers through dealers authorized by
such Manufacturers, at auctions conducted by automobile dealers not affiliated
with Team or from Affiliates of Team;
WHEREAS, the Lessor desires to lease to the Lessees and the Lessees
desire to lease from the Lessor Repurchase Vehicles and Non-Repurchase Vehicles
so acquired by the Lessor for use in the daily rental car businesses of the
Lessees; and
WHEREAS, the Guarantor has, pursuant to Section 26 hereof, guaranteed
the obligations of the Lessees under this Agreement.
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:
1. DEFINITIONS. Certain capitalized terms used herein (including the
preamble and the recitals hereto) shall have the meanings ascribed to such
terms in the Definitions List (the "Definitions List") attached as Schedule 1
to the Amended and Restated Base Indenture, dated as of December 1, 1996, among
the Lessor, the Guarantor and Bankers Trust Company, a New York
7
banking corporation, as trustee, as such Definitions List may be amended or
modified from time to time in accordance with the provisions of the Indenture,
and in the Series 1996-1 Supplement thereto.
2. GENERAL AGREEMENT. (a) Each Lessee and the Lessor intend that
this Agreement is a lease and that the relationship between the Lessor and the
Lessees pursuant hereto shall always be only that of lessor and lessee and each
Lessee hereby declares, acknowledges and agrees that the Lessor has title to
and is the owner of the Vehicles. No Lessee shall acquire by virtue of this
Agreement any right, equity, title or interest in or to any Vehicles, except
the right to use the same under the terms hereof. The parties agree that this
Agreement is a "true lease," and agree to treat this Agreement as a lease for
all purposes, including tax, accounting and otherwise.
(b) If, notwithstanding the intent of the parties to this Agreement,
this Agreement is characterized by any third party as a financing arrangement
or as otherwise not constituting a "true lease," then it is the intention of
the parties that this Agreement shall constitute a security agreement under
applicable law, and each Lessee hereby grants to the Lessor a first priority
security interest in all of such Lessee's right, title and interest, if any, in
and to all of the following assets, property and interests in property, whether
now owned or hereafter acquired or created:
(i) the rights of such Lessee under this Agreement, as the
same may be amended, modified or supplemented from time to time in
accordance with its terms, and any other agreements related to or in
connection with this Agreement to which such Lessee is a party (the
"Lessee Agreements"), including, without limitation, (a) all monies
due and to become due to such Lessee from the Guarantor and the
Lessees under or in connection with the Lessee Agreements, whether
payable as rent, guaranty payments, fees, expenses, costs,
indemnities, insurance recoveries, damages for the breach of any of
the Lessee Agreements or otherwise, (b) all rights, remedies, powers,
privileges and claims of such Lessee against any other party under or
with respect to the Lessee Agreements (whether arising pursuant to the
terms of such Agreements or otherwise available to such Lessee at law
or in equity), including the right to enforce any of the Lessee
Agreements and to give or withhold any and all consents, requests,
notices, directions, approvals, extensions or waivers under or with
respect to the Lessee Agreements or the obligations of any party
thereunder, (c) all liens and property from time to time purporting to
secure payment arising under or in connection with the Lessee
Agreements, or assigned to, such Lessee describing any collateral
- 3 -
8
securing such obligations or liabilities and (d) all guarantees,
insurance and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such obligations
and liabilities of such Lessee pursuant to the Lessee Agreements;
(ii) all Vehicles leased by such Lessee from the Lessor
pursuant to this Agreement which, notwithstanding that this Agreement
is intended to convey only a leasehold interest, are determined to be
owned by such Lessee, and all Certificates of Title with respect to
such Vehicles;
(iii) all right, title and interest of such Lessee in, to and
under any Repurchase Programs and all monies due and to become due
thereunder in respect of Repurchase Vehicles leased under this
Agreement which, notwithstanding that this Agreement is intended to
convey only a leasehold interest, are determined to be owned by such
Lessee, whether payable as Vehicle repurchase prices, fees, expenses,
costs, indemnities, insurance recoveries, damages for breach of the
Repurchase Programs or otherwise;
(iv) the Series 1996-1 Collection Account; (a) all funds on
deposit therein from time to time; (b) all certificates and
instruments, if any, representing or evidencing any or all of the
Series 1996-1 Collection Account or the funds on deposit therein from
time to time; and (c) all investments made at any time and from time
to time with the moneys in the Series 1996-1 Collection Account
(including income thereon);
(v) all additional property that may from time to time
hereafter be subjected to the grant and pledge under this Agreement,
as the same may be modified or supplemented from time to time, by such
Lessee or by anyone on its behalf; and
(vi) all proceeds of any and all of the foregoing including,
without limitation, payments under insurance (whether or not the
Lessor is the loss payee thereof) and cash.
2.1. Acquisition of Vehicles. (a) From time to time, at the
discretion of the Lessor and the Lessees, subject to the terms and provisions
hereof, the Lessor agrees to lease to each Lessee and each Lessee agrees to
lease from the Lessor, subject to the terms hereof, the Repurchase Vehicles and
Non-Repurchase Vehicles that are Manufacturer Acquired Vehicles identified in
certain vehicle orders (each, a "Series 1996-1 Vehicle Order") and purchased by
the Lessor in accordance with Section 2.3 hereof. If requested by the Lessor,
each Lessee shall make each Series 1996-1 Vehicle Order available to the
Lessor, together
- 4 -
9
with a schedule containing the information with respect to the Vehicles
included within such Series 1996-1 Vehicle Order as is set forth in Attachment
A hereto (each, a "Series 1996-1 Vehicle Acquisition Schedule"), or in such
form as is otherwise requested by the Lessor. In addition, each Lessee leasing
Vehicles pursuant to such Series 1996-1 Vehicle Order agrees to provide such
other information regarding such Vehicles as the Lessor may require from time
to time. The Lessees and the Lessor acknowledge that concurrently with the
execution and delivery of this Agreement, the Lessees specified on Schedule 1
hereto have made available to the Lessor Series 1996-1 Vehicle Orders to lease
Vehicles currently owned by the Lessor pursuant to this Agreement, together
with the required Series 1996-1 Vehicle Acquisition Schedules in respect of
such Series 1996-1 Vehicle Orders. This Agreement, together with any other
related documents attached to this Agreement or submitted with a Series 1996-1
Vehicle Order, including without limitation any documents in connection with an
Eligible Repurchase Program (collectively, the "Supplemental Documents"), will
constitute the entire agreement regarding the leasing of Vehicles that are
Manufacturer Acquired Vehicles by the Lessor to the Lessees.
(b) The Lessor and the Lessees each acknowledge that either
concurrently with the execution and delivery of this Agreement or after the
date of this Agreement on not less than thirty (30) days written notice to the
Lessor and the Trustee, any Lessee may request that the Lessor purchase a
Vehicle from an Affiliate or Subsidiary of Team (the "Team Acquired Vehicles")
for a purchase price equal to (i) with respect to Repurchase Vehicles, the Net
Book Value of such Repurchase Vehicle and (ii) with respect to Non-Repurchase
Vehicles, the lesser of (A) the Net Book Value of such Vehicle and (B) the Fair
Market Value of such Vehicle (such amount, the "Non-Repurchase Vehicle
Acquisition Price"), in which event such Lessee shall, immediately upon the
consummation of such sale, lease such Team Acquired Vehicles from the Lessor
pursuant to this Agreement (each such transaction is referred to as an
"Affiliate Sale Transaction"). Concurrently with the execution and delivery of
this Agreement, the Affiliates and/or Subsidiaries listed on Schedule 2 hereto
are selling to the Lessor certain Team Acquired Vehicles (such Affiliates and
Subsidiaries, the "Selling Affiliates"). In connection with each Affiliate
Sale Transaction, to evidence the conveyance of the Team Acquired Vehicles from
the Selling Affiliate to the Lessor, the applicable Lessee shall deliver to the
Lessor the following:
(i) a Series 1996-1 Vehicle Order (including a Series 1996-1
Vehicle Acquisition Schedule) with respect to all Team Acquired
Vehicles covered by such Affiliate Sale Transaction;
- 5 -
10
(ii) a report of the results of a search of the appropriate
records of the county and state in which the Team Acquired Vehicles
covered by such Affiliate Sale Transaction are located and the county
and state in which the Selling Affiliate's principal office is
located, which shall show no liens or other security interests (other
than Permitted Liens) with respect to the Team Acquired Vehicles
covered by such Affiliate Sale Transaction or, in the event that such
search reveals any such Lien or security interest, there shall be
delivered to the Trustee a termination of such Lien or security
interest in form acceptable for filing;
(iii) confirmation from each lender holding a security
interest in any Team Acquired Vehicle covered by such Affiliate Sale
Transaction stating unconditionally (A) that, if any sums are to be
paid to such lender in connection with such Affiliate Sale
Transaction, such lender has been paid the full amount due to it in
connection with such Affiliate Sale Transaction and (B) that any lien
or security interest of such lender in any such Team Acquired Vehicle
has been released;
(iv) the original Certificate of Title for each Team Acquired
Vehicle together with a completed application to retitle such Team
Acquired Vehicle in the name of the Lessor and to have noted thereon
the Trustee's security interest in such Team Acquired Vehicle pursuant
to the Indenture;
(v) Uniform Commercial Code termination statements
terminating, or Uniform Commercial Code partial releases releasing,
any security interests and other liens (other than Permitted Liens) in
favor of any Person with respect to each Team Acquired Vehicle covered
by such Affiliate Sale Transaction and, with respect to any Repurchase
Vehicles, any related Repurchase Program rights;
(vi) a ▇▇▇▇ of sale, substantially in the form attached
hereto as Attachment D (each, an "Affiliate ▇▇▇▇ of Sale"), conveying
title to the Team Acquired Vehicles from the Selling Affiliate to the
Lessor and, with respect to any Repurchase Vehicles, all right, title
and interest of the Selling Affiliate to any applicable Repurchase
Program from the Selling Affiliate to the Lessor; and
(vii) with respect to Repurchase Vehicles, written
confirmation from the applicable Manufacturer that the Lessor will be
authorized to return such Repurchase Vehicles to the Manufacturer
under the Lessor's Repurchase Program.
- 6 -
11
In addition, the applicable Lessee shall deliver to the Trustee the
items required to be delivered to the Trustee pursuant to the provisions of
Section 13.21 of the Base Indenture.
(c) In order to induce the Lessor to purchase Team Acquired Vehicles,
the applicable Lessee shall require the Selling Affiliate to deliver to the
Lessor a certificate of an authorized officer of the Selling Affiliate in which
the Selling Affiliate shall represent and warrant to and in favor of the Lessor
and the Trustee, as of the date hereof or, with respect to an Affiliate Sale
Transaction that takes place after the date of this Agreement, as of the date
of such Affiliate Sale Transaction, as follows:
(i) The Selling Affiliate is, immediately prior to the
consummation of the sale thereof, the true and lawful owner of all
Team Acquired Vehicles listed on Schedule 1 to the applicable ▇▇▇▇ of
sale as being owned by such Selling Affiliate;
(ii) The Team Acquired Vehicles listed on Schedule 1 to the
applicable ▇▇▇▇ of sale as being owned by such Selling Affiliate are
not subject to any lien, security interest or rights of any other
party, other than Permitted Liens;
(iii) The Team Acquired Vehicles listed on Schedule 1 to the
applicable ▇▇▇▇ of Sale as being owned by such Selling Affiliate are
either Eligible Repurchase Vehicles or Eligible Non-Repurchase
Vehicles and, with respect to the Eligible Repurchase Vehicles, such
Repurchase Vehicles have not been held beyond the Maximum Term
applicable thereto;
(iv) All representations and warranties contained in this
Agreement with respect to Non-Repurchase Vehicles and Repurchase
Vehicles owned by Affiliates of Team are true and correct as applied
to the Team Acquired Vehicles listed on Schedule 1 to the applicable
▇▇▇▇ of Sale as being owned by such Selling Affiliate; and
(v) The purchase price being paid by the Lessor for the Team
Acquired Vehicles is listed on Schedule 1 to the applicable ▇▇▇▇ of
Sale and such price constitutes, with respect to each Repurchase
Vehicle, the Net Book Value of such Repurchase Vehicle, and with
respect to each Non-Repurchase Vehicle, the Non-Repurchase Vehicle
Acquisition Price of such Non-Repurchase Vehicle.
Other than Affiliate Sale Transactions complying with the provisions of this
Section 2.1, the Lessor shall not purchase any
- 7 -
12
Vehicles from any Affiliate or Subsidiary of Team. After any purchase of
Vehicles from an Affiliate or Subsidiary of Team by the Lessor, such Vehicles
will be subject to all the terms and conditions of this Agreement.
(d) The Lessor and the Lessees each acknowledge that either
concurrently with the execution and delivery of this Agreement or after the
date of this Agreement on not less than five (5) days written notice to the
Lessor and the Trustee, any Lessee may request that the Lessor purchase a
Non-Repurchase Vehicle from an independent dealer through an auction (the
"Auction Acquired Vehicles") for a purchase price equal to the Capitalized Cost
of such Auction Acquired Vehicle, in which event such Lessee shall, immediately
upon the consummation of such sale, lease such Auction Acquired Vehicle from
the Lessor pursuant to this Agreement (each such transaction is referred to as
an "Auction Sale Transaction"). In connection with each Auction Sale
Transaction, to evidence the conveyance of the Auction Acquired Vehicles from
the applicable dealer to the Lessor, the applicable Lessee shall deliver to the
Lessor the following:
(i) a Series 1996-1 Vehicle Order (including a Series 1996-1
Vehicle Acquisition Schedule) with respect to all Auction Acquired
Vehicles covered by such Auction Sale Transaction;
(ii) a report of the results of a search of the appropriate
records of the county and state in which the Auction Acquired Vehicles
covered by such Lessee Sale Transaction are located and the county and
state in which the selling dealer's principal office is located, which
shall show no liens or other security interests (other than Permitted
Liens) with respect to the Auction Acquired Vehicles covered by such
Auction Sale Transaction or, in the event that such search reveals any
such Lien or security interest, there shall be delivered to the
Trustee a termination of such Lien or security interest in form
acceptable for filing;
(iii) the original Certificate of Title for each Auction
Acquired Vehicle together with a completed application to retitle such
Auction Acquired Vehicle in the name of the Lessor and to have noted
thereon the Trustee's security interest in such Auction Acquired
Vehicle pursuant to the Indenture; and
(iv) a ▇▇▇▇ of sale, substantially in the form attached
hereto as Attachment D-1 (each, an "Auction ▇▇▇▇ of Sale"), conveying
title to the Auction Acquired Vehicles, and copies of any certificate
given by the related auction
- 8 -
13
house regarding the absence of liens and/or the ownership of each such
Vehicle.
Other than Auction Sale Transactions complying with the provisions of this
Section 2.1, the Lessor shall not purchase any Non-Repurchase Vehicles from any
independent dealer at an auction. After any purchase of Vehicles by the Lessor
at auction, such Vehicles will be subject to all the terms and conditions of
this Agreement.
2.2. Right of Lessees to Act as Lessor's Agent. The Lessor agrees
that any member of the Lessee Group may act as the Lessor's agent in placing
Series 1996-1 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 Group liable for losses due to such member of the
Lessee Group's actions in performing as the Lessor's agent hereunder. In
addition, the Lessor agrees that each Lessee may make arrangements for delivery
of Vehicles to a location selected by the relevant Lessee at such Lessee's
expense. Each Lessee agrees to accept Non-Repurchase Vehicles as produced and
delivered, subject to the right of such Lessee to reject any such
Non-Repurchase Vehicles damaged in transit or not conforming to the related
Vehicle Order. Each Lessee agrees to accept Repurchase Vehicles as produced
and delivered except each Lessee will have the option to reject any Repurchase
Vehicle that may be rejected pursuant to the terms of the applicable Repurchase
Program. The relevant Lessee, acting as agent for the Lessor, shall be
responsible for pursuing any rights of the Lessor with respect to the return of
any Repurchase Vehicle to the Manufacturer pursuant to the preceding sentence.
Subject to the provisions of Section 21 hereof (regarding Eligibility Waiver
Events), any member of the Lessee Group that places a Vehicle Order for a
Repurchase Vehicle pursuant to this Agreement agrees that all Repurchase
Vehicles ordered as provided herein shall be ordered utilizing the procedures
consistent with the applicable Eligible Repurchase Program.
2.3. Payment of Capitalized Cost by Lessor. Upon delivery of any
Manufacturer Acquired Vehicle, the Lessor shall pay to the dealer selling the
Manufacturer Acquired Vehicle the costs and expenses incurred by it in
connection with the acquisition of such Vehicle as established by the invoice
delivered in connection with such Vehicle (the "Capitalized Cost") and the
relevant 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 Capitalized Cost.
- 9 -
14
2.4. Non-liability of Lessor. The Lessor shall not be liable to any
of the Lessees for any failure or delay in obtaining Vehicles or making
delivery thereof. AS BETWEEN THE LESSOR AND EACH LESSEE, ACCEPTANCE FOR LEASE
OF THE VEHICLES SHALL CONSTITUTE SUCH LESSEE'S ACKNOWLEDGMENT AND AGREEMENT
THAT SUCH 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 SUCH LESSEE IS SATISFIED THAT THE SAME
ARE SUITABLE FOR THIS USE AND THAT THE LESSOR IS NOT A MANUFACTURER OR ENGAGED
IN THE SALE OR DISTRIBUTION OF VEHICLES, AND HAS NOT MADE AND DOES NOT HEREBY
MAKE ANY REPRESENTATION, WARRANTY OR COVENANT WITH RESPECT TO MERCHANTABILITY,
CONDITION, QUALITY, DURABILITY OR SUITABILITY OF THE VEHICLE IN ANY RESPECT OR
IN CONNECTION WITH OR FOR THE PURPOSES OR USES OF SUCH LESSEE, OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, WITH RESPECT THERETO. 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 RESULTING FROM ANY DEFECT IN OR ANY THEFT, DAMAGE, LOSS OR
FAILURE OF ANY VEHICLE, AND THERE SHALL BE NO ABATEMENT OF RENT BECAUSE OF THE
SAME.
2.5. Lessees' Rights to Purchase Vehicles. Each Lessee will have the
option, exercisable with respect to any Vehicle during the Vehicle Term with
respect to such Vehicle, to purchase any Vehicles leased under this Agreement
at the greater of (i) the applicable Net Book Value or (ii) the Fair Market
Value of the Vehicle (the greater of such amounts being referred to as the
"Vehicle Purchase Price", with respect to Repurchase Vehicles, and the
"Non-Repurchase Vehicle Value", with respect to Non-Repurchase Vehicles), in
which event such Lessee will pay the Vehicle Purchase Price or the
Non-Repurchase Vehicle Value, as applicable, to the Lessor on or before the Due
Date next succeeding such purchase by the relevant 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 relevant Lessee, and the Servicer shall cause
the Trustee to cause its lien to be removed from the certificate of title for
such Vehicle, concurrently with or promptly after the Vehicle Purchase Price or
the Non-Repurchase Vehicle Value, as applicable, for such Vehicle (and any such
unpaid Monthly Base Rent and Monthly Variable Rent) is paid by such Lessee to
the Trustee.
- 10 -
15
2.6. Disposition of Vehicles. Notwithstanding anything to the
contrary contained herein, the Lessor shall have the right, at any time prior
to the date thirty (30) days prior to the expiration of the Maximum Term for
any Repurchase Vehicle, or at any time, with respect to Non-Repurchase
Vehicles, to require that the Lessee leasing such Vehicle from the Lessor
hereunder exercise commercially reasonable efforts to arrange for the sale of
such Vehicle to a third party, in which event such Lessee shall (i) until not
later than the date thirty (30) days prior to the expiration of such Maximum
Term, with respect to Repurchase Vehicles, or promptly thereafter, with respect
to Non-Repurchase Vehicles, exercise commercially reasonable efforts to arrange
for the sale of such Vehicle to a third party for a price greater than the Net
Book Value, with respect to Repurchase Vehicles, or for the Non-Repurchase
Vehicle Value, with respect to Non-Repurchase Vehicles, or (ii) purchase such
Vehicle from the Lessor for the Vehicle Purchase Price, with respect to
Repurchase Vehicles, or the Non-Repurchase Vehicle Value, with respect to
Non-Repurchase Vehicles. If a sale of the Vehicle is arranged by the Lessee,
then the Lessee shall deliver the Vehicle to the purchaser thereof, the Lien of
the Trustee on the Certificate of Title of such Vehicle shall be released, and
the Lessee shall cause to be delivered to the Lessor the funds paid for such
Vehicle by the purchaser. If the Lessee is unable to arrange for a sale of a
Repurchase Vehicle prior to such date thirty (30) days prior to the expiration
of the Maximum Term of such Repurchase Vehicle, then the Lessee shall cease
attempting to arrange for such a sale and shall return such Repurchase Vehicle
to the applicable Manufacturer as herein provided. If the Lessee is unable to
arrange for a sale of a Non-Repurchase Vehicle for an amount in excess of the
Non-Repurchase Vehicle Value thereof prior to the end of the twenty-four month
period referred to in the proviso clause contained in Section 3.2 hereof, or
such longer period as may be approved by the Rating Agencies, then the Lessee
shall cease attempting to arrange for such sale and shall arrange for the sale
of such Vehicle at auction with commercially reasonable efforts to maximize the
sale price. If any period for which a Vehicle's age is unknown, such period
shall be determined by dividing the number of miles on the odometer of such
Vehicle at the time of its purchase by the Issuer by 1500. Notwithstanding the
foregoing, the age for any Vehicle shall in no event start earlier than
September 1 of the year prior to the model year of such Vehicle.
2.7. 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-Repurchase Vehicles (or such portion thereof as is
specified in the related Series Supplement) leased under this
- 11 -
16
Lease as of such date (after giving effect to the inclusion of such Vehicle
under this Lease) by (y) the Series 1996-1 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 this Lease),
shall not exceed any applicable Maximum Non-Repurchase Percentage, (b) the
quotient (expressed as a percentage) obtained by dividing (x) the aggregate Net
Book Value of all Repurchase Vehicles or Non-Repurchase 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 this
Lease) by (y) the Series 1996-1 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 this Lease) shall not exceed any
applicable Maximum Manufacturer Percentage, (c) any excess Maximum
Non-Repurchase 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 this 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 this Lease
as is specified in any related Series Supplement.
3. TERM.
3.1. Vehicle Term: Repurchase Vehicles. The "Vehicle Lease
Commencement Date" for each Repurchase Vehicle shall mean the day referenced as
such in the Series 1996-1 Acquisition Schedule with respect to such Repurchase
Vehicle but in no event beyond the date that funds are expended by the Lessor
to acquire such Repurchase Vehicle. The "Vehicle Term" with respect to each
Repurchase Vehicle shall extend from the Vehicle Lease Commencement Date
through the earliest of (i) the Turnback Date for such Repurchase Vehicle, (ii)
the date the Vehicle is sold to a third party through any means other than an
auction conducted by or through or arranged by the Manufacturer pursuant to its
Repurchase Program and the funds in respect of such sale are received by the
Trustee (from such third party or from any member of the Lessee Group on behalf
of such third party), (iii) if the Vehicle becomes a Casualty, the date funds
in the amount of the Net Book Value thereof are received by the Trustee from
the applicable Lessee, or (iv) the date that the Vehicle is purchased by the
applicable Lessee pursuant to Section 2.5 or 2.6 hereof and the Vehicle
Purchase Price with respect to such purchase (and any unpaid Monthly Base Rent
and Monthly Variable Rent with respect to such Vehicle) is received by the
Trustee (the earliest
- 12 -
17
of such four dates being referred to as the "Vehicle Lease Expiration Date").
The Lessor and each Lessee agree that each Lessee shall use its commercially
reasonable efforts to deliver each Repurchase Vehicle to the related
Manufacturer or the designated auction site, as applicable, (a) not prior to
the end of the minimum holding period specified in the related Repurchase
Program (prior to which the Lessor may not deliver such Repurchase Vehicle
without penalty (the "Minimum Term")) and (b) not later than the end of the
maximum holding period (after which the Lessor may not return such Repurchase
Vehicle without penalty (the "Maximum Term")); provided, however, if for any
reason, a Lessee fails to deliver a Repurchase Vehicle to the applicable
Manufacturer or designated auction site during the time period between the
expiration of the Minimum Term and the expiration of the Maximum Term, such
Lessee shall be obligated to purchase such Repurchase Vehicle from the Lessor
on the first Due Date after the expiration of the Maximum Term for an amount
equal to the Vehicle Purchase Price with respect to such Repurchase Vehicle.
Each Lessee will pay the equivalent of the Rent for the Minimum Term for
Repurchase Vehicles returned before the Minimum Term, regardless of actual
usage, unless a Vehicle is a Casualty which will be handled in accordance with
Section 6 hereof.
3.2. Vehicle Term: Non-Repurchase Vehicles. The "Vehicle Lease
Commencement Date" for each Non-Repurchase Vehicle shall mean the day
referenced as such in the Series 1996-1 Vehicle Acquisition Schedule with
respect to such Non-Repurchase Vehicle but in no event beyond the date that
funds are expended by the Lessor to acquire such Non- Repurchase Vehicle. The
"Vehicle Term" with respect to each Non-Repurchase Vehicle shall extend from
the Vehicle Lease Commencement Date through the earliest of (i) if the
Non-Repurchase Vehicle is sold to a third party, the date such Vehicle is sold
to such third party and funds in respect of such sale are received by the
Trustee (from such third party or from any member of the Lessee Group on behalf
of such third party) and such funds equal or exceed the Non-Repurchase Vehicle
Value of such Non-Repurchase Vehicle, (ii) if the Non-Repurchase Vehicle
becomes a Casualty, the date funds in the amount of the Non-Repurchase Vehicle
Value thereof are received by the Trustee from the applicable Lessee, or (iii)
the date that the Non-Repurchase Vehicle is purchased by the applicable Lessee
pursuant to Section 2.5 hereof and the Non-Repurchase Vehicle Value with
respect to such purchase (and any unpaid Monthly Base Rent and Monthly Variable
Rent with respect to such Non-Repurchase Vehicle) is received by the Trustee
(the earliest of such four dates being referred to as the "Vehicle Lease
Expiration Date"); provided, however, that the Lessees shall use commercially
reasonable efforts to dispose of each Non-Repurchase Vehicle within twenty-four
(24) months after the date of the original new dealer invoice for such Vehicle
or where no such
- 13 -
18
invoice exists, the date such Vehicle was first put into service, or such
longer period as may be approved by the Rating Agencies.
3.3. The "Lease Commencement Date" shall mean the earlier of (i) the
date of the issuance of the Series 1996-1 Notes or (ii) the date of the Vehicle
Lease Commencement Date for the first Vehicle leased by a Lessee hereunder.
The "Lease Expiration Date" shall mean the later of (i) the date of the payment
in full of all Series 1996-1 Notes and all outstanding Carrying Charges and
(ii) the Vehicle Lease Expiration Date for the last Vehicle leased by a Lessee
hereunder. The "Term" of this Agreement shall mean the period commencing on
the Lease Commencement Date and ending on the Lease Expiration Date.
4. RENT AND CHARGES. Each Lessee will pay Rent on a monthly basis as
set forth in this Section 4:
4.1. Certain Definitions. As used herein the following terms have
the following meanings:
"Additional Base Rent" with respect to the Non-Repurchase
Vehicles leased hereunder, with respect to each Due Date shall equal
the amount, if any, by which (a) 100% of the aggregate Net Book Value
of such Non- Repurchase Vehicles owned by the Lessor exceeds (b) the
three (3) month rolling average of the Fair Market Value of such
Non-Repurchase Vehicles for the preceding three (3) calendar months.
"Monthly Base Rent" with respect to each Due Date and each
Vehicle subject to this Agreement shall equal the sum, without double
counting, of (a) the Depreciation Charge for the Related Month for
such Vehicle plus (b) the Net Book Value of such Vehicle, with respect
to each Repurchase Vehicle, or the Non-Repurchase Vehicle Value of
such Vehicle, with respect to each Non-Repurchase Vehicle, in the
event such Vehicle either (x) in the case of a Repurchase Vehicle, was
returned to the applicable Manufacturer and such Manufacturer paid the
Repurchase Price during the Related Month, (y) became a Casualty
during the Related Month or (z) was sold to any Person (other than to
a Manufacturer pursuant to such Manufacturer's Repurchase Program or
to a third party pursuant to an auction conducted through a
Manufacturer's Repurchase Program) during the Related Month plus (c)
the aggregate amount of any Guaranteed Payments received pursuant to a
Repurchase Program during the Related Month, plus (d) the aggregate
amount of any Disposition Proceeds received during the Related Month,
plus (e) in the case of any Vehicle, the aggregate amount of
Termination Payments that became due during the Related Month with
respect to such Vehicle, plus
- 14 -
19
(f) in the case of a Repurchase Vehicle, the aggregate amount of
Repurchase Price Interest that became due during the Related Month
with respect to such Vehicle, minus (g) any amount received by the
Lessor or the Trustee, and deposited into the Collection Account
during the Related Month from the applicable Manufacturer as the
Repurchase Price or Guaranteed Payment for such Repurchase Vehicle or
from a third party other than a Manufacturer for the purchase of such
Vehicle plus (h) any Repurchase Price Interest which may be owed under
Section 13.4.
"Monthly Supplemental Rent" with respect to each Due Date
shall equal (x) the accrued interest on all Series 1996-1 Notes for
the Related Month, plus (y) the Carrying Charges for the Related
Month, minus (z) the aggregate of all Monthly Variable Rent accrued
with respect to the Related Month for all Vehicles leased hereunder.
"Monthly Variable Rent" with respect to each Due Date and each
Vehicle subject to this Agreement shall equal the sum of (a) an amount
equal to the Net Book Value of such Vehicle, with respect to each
Repurchase Vehicle, or the Non-Repurchase Vehicle Value of such
Vehicle, with respect to each Non-Repurchase Vehicle, during the
Related Month multiplied by the VFR for a one year interest period,
multiplied by a fraction, the numerator of which shall be 30 and the
denominator of which shall be 360 and (b) the product of (i) an
amount equal to (x) all Carrying Charges for the Related Month less
(y) any accrued earnings on Permitted Investments in the Series 1996-1
Collection Account which are accrued through the last Business Day of
the Related Month and maturing by the next Distribution Date and (ii)
a fraction, the numerator of which is the Net Book Value of such
Vehicle, with respect to each Repurchase Vehicle, or the
Non-Repurchase Vehicle Value of such Vehicle, with respect to each
Non-Repurchase Vehicle, and the denominator of which is the sum of the
Net Book Values and Non-Repurchase Vehicle Values of all Vehicles. In
the event the Vehicle Lease Commencement Date occurs with respect to
such Vehicle on a day other than the last day of a Related Month, the
Monthly Variable Rent for such Vehicle shall be equal to the product
of (a) the Monthly Variable Rent otherwise payable with respect to
such Vehicle, multiplied by (b) a fraction the numerator of which is
12 and the denominator of which is 360, multiplied by (c) the number
of days in such Related Month from, after and including such Vehicle
Lease Commencement Date through and including the last day of such
Related Month. In the event the Vehicle Lease Expiration Date occurs
with respect to such Vehicle on a day other than the last day of the
Related Month, the Monthly Variable Rent for such Vehicle shall be
- 15 -
20
equal to the product of (a) the Monthly Variable Rent otherwise
payable with respect to such Vehicle for the Related Month, multiplied
by (b) a fraction the numerator of which is 12 and the denominator of
which is 360, multiplied by (c) the number of days in such Related
Month from, after and including the first day of such Related Month
through and including the Vehicle Lease Expiration Date.
"Non-Repurchase Fleet Market Value" means, with respect to all
Non-Repurchase Vehicles, as of any date of determination, the sum of
the respective Fair Market Values of each Non-Repurchase Vehicle
subject to this Agreement.
"Rent" means Monthly Base Rent, Monthly Variable Rent, Monthly
Supplemental Rent and Additional Base Rent.
"VFR" for any period, is an interest rate equal to (i) the
amount of interest accrued during such period with respect to all
Series 1996-1 Notes divided by (ii) the average daily Invested Amounts
of all Series 1996-1 Notes during such period.
4.2. Payment of Rent. On each Due Date:
4.2.1. Monthly Base Rent. Each Lessee shall pay to the Lessor all
Monthly Base Rent that has accrued during the Related Month with respect to
each Vehicle leased hereunder by such Lessee;
4.2.2. Monthly Variable Rent. Each Lessee shall pay to the Lessor
all Monthly Variable Rent that has accrued during the Related Month with
respect to each Vehicle leased hereunder by such Lessee;
4.2.3. Monthly Supplemental Rent. Each Lessee shall pay such
Lessee's Share of an amount equal to the Monthly Supplemental Rent that has
accrued during the Related Month less any earnings on Permitted Investments not
taken into account in the calculation of Monthly Variable Rent; and
4.2.4. Additional Base Rent. Each Lessee shall pay to the Lessor
such Lessee's Share of an amount equal to the monthly Additional Base Rent that
has accrued during the Related Month with respect to the Non-Repurchase
Vehicles leased hereunder by such Lessee.
4.3. Late Payment. In the event the relevant Lessee fails to remit
payment of any amount due on or before the Due Date, the amount not paid will
be considered delinquent and such Lessee
- 16 -
21
will pay a late charge equal to the VFR plus 1%, times the delinquent amount
for the period from the Due Date until such delinquent amount is received by
the Trustee.
4.4. Net Lease. THIS AGREEMENT SHALL BE A NET LEASE, AND EACH
LESSEE'S OBLIGATION TO PAY ALL RENT AND OTHER SUMS HEREUNDER SHALL BE ABSOLUTE
AND UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY ABATEMENT OR REDUCTION FOR
ANY REASON WHATSOEVER. The obligations and liabilities of each 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
each Lessee to reject vehicles pursuant to Section 2.2 hereof) for any reason,
including without limitation: (i) any defect in the condition,
merchantability, quality or fitness for use of the Vehicles or any part
thereof; (ii) any damage to, removal, abandonment, salvage, loss, scrapping or
destruction of or any requisition or taking of the Vehicles or any part
thereof; (iii) any restriction, prevention or curtailment of or interference
with any use of the Vehicles or any part thereof; (iv) any defect in or any
Lien on title to the Vehicles or any part thereof; (v) any change, waiver,
extension, indulgence or other action or omission in respect of any obligation
or liability of the relevant Lessee or the Lessor; (vi) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation
or other like proceeding relating to the relevant Lessee, the Lessor or any
other Person, or any action taken with respect to this Agreement by any trustee
or receiver of any Person mentioned above, or by any court; (vii) any claim
that the relevant Lessee has or might have against any Person, including
without limitation the Lessor; (viii) any failure on the part of the Lessor to
perform or comply with any of the terms hereof or of any other agreement; (ix)
any invalidity or unenforceability or disaffirmance of this Agreement 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 relevant Lessee or otherwise;
(x) any insurance premiums payable by the relevant Lessee with respect to the
Vehicles; or (xi) any other occurrence whatsoever, whether similar or
dissimilar to the foregoing, whether or not the relevant Lessee shall have
notice or knowledge of any of the foregoing and whether or not foreseen or
foreseeable. This Agreement shall be noncancelable by the Lessees and, except
as expressly provided herein, each Lessee, to the extent permitted by law,
waives all rights now or hereafter conferred by statute or otherwise to quit,
terminate or surrender this Agreement, or to any diminution or reduction of
Rent payable by each Lessee hereunder. All payments by each Lessee made
hereunder shall be final (except to the extent of adjustments provided for
herein), absent manifest error and, except as otherwise provided herein, each
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 this
- 17 -
22
Agreement shall be terminated in whole or in part by operation of law or
otherwise except as expressly provided herein, each Lessee shall nonetheless
pay an amount equal to each Rent payment at the time and in the manner that
such payment would have become due and payable under the terms of this
Agreement as if it had not been terminated in whole or in part. All covenants
and agreements of each Lessee herein shall be performed at its cost, expense
and risk unless expressly otherwise stated.
5. INSURANCE. Team represents that it shall at all times maintain
insurance coverage for each Team Lessee in accordance with the appropriate
states' requirements and other requirements as set forth below. Each Non-Team
Lessee represents that it shall at all times maintain insurance coverage for
itself in full force and effect in accordance with the appropriate states'
requirements and other requirements as set forth below.
5.1. Personal Injury and Damage. Subject to applicable state and
other requirements, Team and/or each Non- Team Lessee may self-insure against
personal injury and damage claims arising from the use of the Vehicles. In
addition, Team, or the Non-Team Lessees, as appropriate, will maintain with
respect to each Lessee's properties and businesses insurance against loss or
damage of the kind customarily insured against by corporations engaged in the
same or similar businesses, of such types and in such amounts as are
customarily carried by such similarly situated corporations.
5.2. Delivery of Certificate of Insurance. Within 10 days after the
date the Series 1996-1 Notes are issued (or, with respect to any additional
party becoming a "Lessee" hereunder pursuant to the provisions of Section 24
hereof, within 10 days after such party becomes a "Lessee," hereunder), Team,
on behalf of the Team Lessees, and each Non-Team Lessee shall deliver to the
Lessor a certificate(s) of insurance naming the Lessor and the Trustee as
additional insureds as to the items required by Section 5.1 hereinabove. Such
insurance shall not be changed or canceled except as provided below in Section
5.3.
5.3. Changes in Insurance Coverage. No changes shall be made in any
of the foregoing insurance unless the prior written consent of the Lessor and
the Trustee are first obtained. The Lessor may grant or withhold its consent
to any proposed change in such insurance in its sole discretion. The Trustee
shall be required to grant its consent to any proposed change in such insurance
upon compliance with the following conditions:
(i) Team and/or the Non-Team Lessee or Lessees, as applicable,
shall deliver not less than 30 days' prior written notice of any
proposed change in such insurance to the Trustee, which notice shall
contain a certification of a
- 18 -
23
reputable insurance broker that is not affiliated with any member of
the Lessee Group that the insurance program maintained by Team, on
behalf of the Team Lessees, and by each Non-Team Lessee (after the
taking effect of such proposed change) comports with industry
standards for persons engaged in the rental car business and having
net worth and operating income similar to that of such member of the
Lessee Group; and
(ii) Team and/or the Non-Team Lessee or Lessees, as
applicable, shall furnish to the Trustee a letter from each Rating
Agency with respect to the outstanding Series 1996-1 Notes to the
effect that such proposed change will not cause a reduction in or a
withdrawal of such rating.
6. RISK OF LOSS AND CASUALTY OBLIGATION.
6.1. Risk of Loss Borne by Lessee. Upon delivery of each Vehicle to
the relevant Lessee, as between the Lessor and such Lessee, such Lessee assumes
and bears the risk of loss, damage, theft, taking, destruction, attachment,
seizure, confiscation or requisition with respect to such Vehicle, however
caused or occasioned, and all other risks and liabilities, including personal
injury or death and property damage, arising with respect to any Vehicle or the
manufacture, purchase, acceptance, rejection, ownership, delivery, leasing,
subleasing, possession, use, inspection, registration, operation, condition,
maintenance, repair, storage, sale, return or other disposition of such
Vehicle, howsoever arising.
6.2. Casualty. If a Vehicle becomes a Casualty, then the Lessee that
is leasing such Vehicle will (i) promptly notify the Lessor thereof and (ii)
promptly, but in no event more than fifteen (15) days after such Vehicle
becomes a Casualty, pay to the Lessor the Net Book Value of each such Vehicle
that is a Repurchase Vehicle or the Non- Repurchase Vehicle Value of each such
Vehicle that is a Non-Repurchase Vehicle. Upon payment by the Lessee to the
Lessor of the Net Book Value or the Non-Repurchase Vehicle Value, as
applicable, of any Vehicle that has become a Casualty (i) the Lessor shall
cause title to such Vehicle to be transferred to the relevant Lessee to
facilitate liquidation of such Vehicle by the Lessee, (ii) such Lessee shall be
entitled to any physical damage insurance proceeds applicable to such vehicle,
and (iii) the Lien of the Trustee on such Vehicle shall be released by the
Servicer.
7. VEHICLE USE. So long as no Lease Event of Default, Liquidation
Event or Limited Liquidation Event of Default has occurred and so long as no
Lessee Partial Wind-Down Event has occurred with respect to the relevant Lessee
(subject, however, to Section 2.6 hereof), such Lessee may use Vehicles leased
- 19 -
24
hereunder in the regular course of business of such Lessee. Such use shall be
confined primarily to the United States, with limited use in Canada and Mexico;
provided, however, that the principal place of business or rental office of
such Lessee with respect to the Vehicles is located in the United States. The
relevant 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 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 Vehicles and the Certificates of Title as against
such Lessee or any third party in any applicable jurisdiction and to establish,
perfect and maintain the Trustee's lien on the Vehicles and the Certificates of
Title as a perfected first lien in any applicable jurisdiction. Each Lessee
may, at the relevant Lessee's sole expense, change the place of principal
location of any Vehicles. Notwithstanding the foregoing, no change of location
shall be undertaken unless and until (i) all actions necessary to maintain the
Lien of the Trustee on such Vehicles and the Certificates of Title with respect
to such Vehicles shall have been taken and (ii) all legal requirements
applicable to such Vehicles shall have been met or obtained. Following a Lease
Event of Default, Lessee Partial Wind-Down Event, or, with respect to the
Repurchase Vehicles, a Manufacturer Event of Default, and upon the Lessor's
request, the relevant Lessee shall advise 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. Each Lessee shall use reasonable precautions to
prevent loss or damage to Vehicles. Each Lessee shall comply with all
applicable statutes, decrees, ordinances and regulations regarding acquiring,
titling, registering, leasing, insuring and disposing of Vehicles and shall
take reasonable steps to ensure that operators are licensed. Each Lessee and
the Lessor agree that each Lessee shall perform, at its own expense, such
Vehicle preparation and conditioning services with respect to Vehicles
purchased by the Lessor from the Manufacturers as are customary. The Lessor or
the Trustee or any authorized representative of the Lessor or the Trustee may
during reasonable business hours from time to time, without disruption of each
Lessee's business, subject to applicable law, inspect Vehicles and registration
certificates, Certificates of Title and related documents covering Vehicles
wherever the same shall be located. Each Lessee shall not sublease any
Vehicles, nor shall such Lessee assign any right or interest herein or in any
Vehicles; provided, however, that the foregoing shall not be deemed to prohibit
the Lessees from renting Vehicles to third party customers in the ordinary
course of their car rental businesses.
- 20 -
25
8. LIENS. Except for Permitted Liens, each Lessee shall keep all
Vehicles leased by it free of all Liens arising during the Term. Upon the
Vehicle Lease Termination Date for each Vehicle leased hereunder should any
such Lien exist the Lessor may, in its discretion, remove 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 relevant Lessee; provided, however, that if any such Liens would
interfere with the rights of such Lessee under this Agreement, the Lessor must
obtain the prior written consent of such Lessee. Each Lessee acknowledges that
the granting of Liens and the taking of other actions pursuant to the Indenture
and the Related Documents does not interfere with the rights of such Lessee
under this Agreement.
9. NON-DISTURBANCE. So long as each Lessee satisfies its obligations
hereunder and no Lease Event of Default, Liquidation Event or of Limited
Liquidation Event of Default has occurred and is continuing, its quiet
enjoyment, possession and use of the Vehicles will not be disturbed during the
Term subject, however, to Section 2.6 hereof and except that the Lessor and the
Trustee each retains the right, but not the duty, to inspect the Vehicles
without disturbing the ordinary conduct of such Lessee's business. Upon the
request of the Lessor or the Trustee from time to time, each Lessee will make
reasonable efforts to confirm to the Lessor and the Trustee the location,
mileage and condition of each Vehicle and to make available for the Lessor's or
the Trustee's inspection within a reasonable time period, not to exceed 45
days, the Vehicles at the location where the Vehicles are normally domiciled.
Further, each Lessee will, during normal business hours and with a notice of 3
Business Days, make its records pertaining to the Vehicles available to the
Lessor or the Trustee for inspection at the location where the Lessee's records
are normally domiciled.
10. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES.
The Lessee Group, at its expense, shall be responsible for proper registration
and licensing of Vehicles, and titling of Vehicles in the name of the Lessor
(with the Lien of the Trustee noted thereon) and, where required, shall have
Vehicles inspected by any appropriate Governmental Authority; provided,
however, that notwithstanding the foregoing, all Certificates of Title shall at
all times remain in the custody of the Servicer in accordance with the
provisions of the Indenture. The Lessee leasing such Vehicle shall be
responsible for the payment of 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
- 21 -
26
Authority or any court of law or equity with respect to Vehicles in connection
with the relevant Lessee's operation of Vehicles, and any such amounts paid by
the Lessor, in its discretion, on the relevant Lessee's behalf will be
reimbursed within 30 days of the Lessor notifying such Lessee of such payment.
The Lessor agrees to execute a power of attorney in the form of Attachment B
hereto (each, a "Power of Attorney"), and such other documents as may be
necessary in order to allow the Lessees to title, register and dispose of the
Vehicles; provided, however, that possession of all Certificates of Title shall
at all times remain with the Servicer in accordance with the provisions of the
Indenture and each Lessee acknowledges and agrees that it has no right, title
or interest in or with respect to any Certificate of Title. Notwithstanding
anything herein to the contrary, the Lessor may terminate such Power of
Attorney as provided in Section 18 hereof.
11. MAINTENANCE AND REPAIRS. Each Lessee shall pay for all
maintenance and repairs to keep Vehicles in good working order and condition,
and will maintain Vehicles as required in order to keep the Manufacturer's
warranty in force, and in the case of Repurchase Vehicles, shall comply with
all requirements of the related Repurchase Program to the extent necessary to
maintain the eligibility of such Vehicles. Each Lessee will return Vehicles to
an authorized Manufacturer facility or the relevant Lessee's Manufacturer
authorized warranty station for warranty work. Each Lessee will comply with
any Manufacturer's recall of any Vehicle. Each Lessee will 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. Any
such expenses not paid by, or on behalf of, the relevant Lessee may, after 30
days notice to such Lessee, be paid by the Lessor and any expenses incurred by
the Lessor on such Lessee's behalf for maintenance, repair, operation or use of
Vehicles by such Lessee will be promptly reimbursed (in any event no later than
the next monthly Due Date following such notice) by such Lessee to the Lessor
in the amount paid by the Lessor. Each Lessee shall not make any material
alterations to any vehicles without the prior consent of the Lessor. Any
improvements or additions to any Vehicles shall become and remain the property
of the Lessor, except that any addition to Vehicles made by the relevant Lessee
shall remain the property of such Lessee if it can be disconnected from
Vehicles without impairing the functioning of such Vehicles or its resale
value, excluding such addition.
12. VEHICLE WARRANTIES.
12.1. No Lessor Warranties. EACH LESSEE ACKNOWLEDGES THAT THE LESSOR
IS NOT THE MANUFACTURER, THE AGENT OF THE MANUFACTURER, OR THE DISTRIBUTOR OF
THE VEHICLES LEASED
- 22 -
27
HEREUNDER. THE LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED,
AS TO THE FITNESS, SAFENESS, DESIGN, MERCHANTABILITY, CONDITION, QUALITY,
CAPACITY OR WORKMANSHIP OF THE LEASED VEHICLES NOR ANY WARRANTY THAT THE LEASED
VEHICLES WILL SATISFY THE REQUIREMENTS OF ANY LAW OR ANY CONTRACT
SPECIFICATION, AND AS BETWEEN THE LESSOR AND EACH LESSEE, EACH LESSEE AGREES TO
BEAR ALL SUCH RISKS AT ITS SOLE COST AND EXPENSE. EACH LESSEE SPECIFICALLY
WAIVES ALL RIGHTS TO MAKE CLAIMS AGAINST THE LESSOR AND ANY LEASED VEHICLE FOR
BREACH OF ANY WARRANTY OF ANY KIND WHATSOEVER AND, AS TO THE LESSOR, EACH
LESSEE LEASES THE LEASED VEHICLES "AS IS." IN NO EVENT SHALL THE LESSOR BE
LIABLE FOR SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, WHATSOEVER OR
HOWSOEVER CAUSED.
12.2. Manufacturer's Warranties. If a Vehicle is covered by a
Manufacturer's warranty, each Lessee, during the Vehicle Term, shall have the
right to make any claims under such warranty which the Lessor could make.
13. REPURCHASE VEHICLE USAGE GUIDELINES AND RETURN.
13.1. Usage. As used herein "vehicle turn-in condition" with respect
to each Repurchase Vehicle will be determined in accordance with the related
Repurchase Program. Repurchase Vehicles not meeting the applicable Repurchase
Program's vehicle turn-in condition guidelines will be purchased by the
relevant Lessee in accordance with the Casualty procedure set forth in Section
6.2.
13.2. Return. Each Lessee will return each Repurchase Vehicle (other
than a Casualty) to the nearest related Manufacturer official auction or other
facility designated by such Manufacturer at the relevant Lessee's sole expense.
Each Lessee agrees that the Repurchase Vehicles will be in vehicle turn-in
condition as specified in the applicable Repurchase Program. Any rebates or
credits applicable to the unexpired term of any license plates for a Repurchase
Vehicle shall inure to the benefit of the relevant Lessee.
13.3. Termination Payments. (i) Upon receipt of payment of the
Repurchase Price of each Repurchase Vehicle from the Manufacturer (or the
receipt of payment of the Repurchase Price of each Repurchase Vehicle through
an auction conducted by or through a Manufacturer), the Lessor will charge the
relevant Lessee for any Excess Damage Charges, Excess Mileage Charges or early
turnback surcharges as determined by the Manufacturer or its agent in
accordance with the applicable Repurchase Program or (ii) upon receipt of the
net proceeds from the sale of any Non-Repurchase Vehicle, the Lessor will
charge the relevant Lessee for any damage charges or mileage charges as
determined by the Lessor in its reasonable judgment (any such charges in (i) or
- 23 -
28
(ii) are referred to as a "Termination Payment"). The provisions of this
Section 13.3 will survive the expiration or earlier termination of the Term.
13.4. Repurchase Price Interest. The applicable Lessee shall pay to
the Lessor, as part of the Monthly Base Rent, interest accrued at a rate equal
to the VFR on the Repurchase Price of each Repurchase Vehicle for the period
between the Turnback Date for such Vehicle and receipt of such Repurchase Price
by the Lessor from the Manufacturer ("Repurchase Price Interest"). The
provisions of this Section 13.4 will survive the expiration or earlier
termination of the Term.
14. DISPOSITION PROCEDURE. Each Lessee will comply with the
requirements of law and the requirements of the Repurchase Programs, with
respect to Repurchase Vehicles, in connection with, among other things, the
delivery of Certificates of Title and documents of transfer signed as necessary
in connection with the sale of any Vehicle to a third party or return of such
Vehicle in accordance with an Eligible Repurchase Program. In addition, with
respect to the return of Repurchase Vehicles to a Manufacturer or the delivery
of a Repurchase Vehicle to an authorized auction site, each Lessee shall also
deliver a signed Condition Report and signed odometer statement to be submitted
with the Repurchase Vehicles and accepted by the Manufacturer or its agent at
the time of Repurchase Vehicle return or delivery, as applicable. If a
Repurchase Vehicle is not returned to the Manufacturer and accepted by the
Manufacturer, or delivered to an authorized auction site, prior to the Maximum
Term with respect to such Repurchase Vehicle, the relevant Lessee shall
purchase such Repurchase Vehicle for the appropriate Vehicle Purchase Price and
pay the Lessor such amount within fifteen (15) days after the end of the
Maximum Term (together with any Repurchase Price Interest accrued from the last
day of the Maximum Term to the date that such payment is received by the
Lessor).
15. ODOMETER DISCLOSURE REQUIREMENT. Each Lessee agrees to comply
with all requirements of law and, with respect to Repurchase Vehicles, all
Repurchase Program requirements in connection with the transfer of ownership of
any Vehicle by the Lessor, including, without limitation, the submission of any
required odometer disclosure statement at the time of any such transfer of
ownership.
16. GENERAL INDEMNITY.
16.1. Indemnity by the Lessee. Each member of the Lessee Group
agrees jointly and severally to indemnify and hold harmless the Lessor and the
Lessor's directors, officers, agents and employees (collectively, the
"Indemnified Persons"), against any
- 24 -
29
and all claims, demands and liabilities of whatsoever nature and all costs and
expenses relating to or in any way arising out of:
16.1.1. the ordering, delivery, acquisition, title on
acquisition, rejection, installation, possession, titling, retitling,
registration, re-registration, custody by the Lessee Group of title
and registration documents, use, nonuse, misuse, operation,
deficiency, defect, transportation, repair, control or disposition of
any Vehicle leased hereunder or to be leased hereunder pursuant to a
request by the relevant Lessee. 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);
16.1.2. 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
and local income taxes (including any taxes which are payable by the
Lessor as a result of it being a member of the consolidated Lessee
Group), 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, rental, use, operation,
control, ownership or disposition of any Vehicle or measured in any
way by the value thereof or by the business of, investment in, or
ownership by the Lessor with respect thereto and (ii) documentary,
stamp, filing, recording, mortgage or other taxes, if any, which may
be payable by the Lessor in connection with this Agreement or the
other Related Documents;
16.1.3. any violation by the relevant member of the Lessee
Group of this Agreement or of any Related Documents to which such
member of the Lessee Group is a party or by which it is bound or any
laws, rules, regulations, orders, writs, injunctions, decrees,
consents, approvals, exemptions, authorizations or licenses 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 such member of the Lessee Group with respect
thereto or pursuant to this Agreement;
16.1.4. all-out-of-pocket costs of the Lessor (including the
fees and out-of-pocket expenses of counsel
- 25 -
30
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, 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;
16.1.5. all out-of-pocket costs and expenses (including
reasonable attorneys' fees and legal expenses) incurred by the Lessor,
the Trustee or the Noteholders in connection with the administration,
enforcement, waiver or amendment of this Agreement and any other
Related Documents and all indemnification obligations of the Lessor
under the Related Documents; and
16.1.6. all costs, fees, expenses, damages and liabilities
(including, without limitation, the fees and out-of-pocket expenses of
counsel) in connection with, or arising out of, any claim made by any
third party against the Lessor for any reason (including, without
limitation, with respect to Repurchase Vehicles in connection with any
audit or investigation conducted by a Manufacturer under its
Repurchase Program).
16.2. Reimbursement Obligation by the Lessee Group. Each member of
the Lessee Group shall forthwith upon demand reimburse the Lessor for any sum
or sums expended with respect to any of the foregoing, or shall pay such
amounts directly upon request from the Lessor; provided, however, that, if so
requested by the relevant member of the Lessee Group, the Lessor shall submit
to such member of the Lessee Group a statement documenting any such demand for
reimbursement or prepayment. To the extent that the relevant member of the
Lessee Group in fact indemnifies the Lessor under the indemnity provisions of
this Agreement, such member of the Lessee Group shall be subrogated to the
Lessor's rights in the affected transaction and shall have a right to determine
the settlement of claims therein. The foregoing indemnity as contained in this
Section 16 shall survive the expiration or earlier termination of this
Agreement or any lease of any Vehicle hereunder.
16.3. Defense of Claims. Defense of any claim referred to in this
Section 16 for which indemnity may be required shall, at the option and request
of the Indemnified Person, be conducted by the relevant member of the Lessee
Group. The relevant member of the Lessee Group will inform the Indemnified
Person of any such claim and of the defense thereof and will provide copies of
material documents relating to any such claim or defense to such Indemnified
Person upon request. Such Indemnified Person may
- 26 -
31
participate in any such defense at its own expense provided such participation
does not interfere with the relevant member of the Lessee Group's assertion of
such claim or defense. The relevant member of the Lessee Group agrees that no
Indemnified Person will be liable to such member of the Lessee Group for any
claim caused directly or indirectly by the inadequacy of any Vehicle for any
purpose or any deficiency or defect therein or the use or maintenance thereof
or any repairs, servicing or adjustments thereto or any delay in providing or
failure to provide such or any interruption or loss of service or use thereof
or any loss of business, all of which shall be the risk and responsibility of
such member of the Lessee Group. 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 either no longer a party to (or entitled to receive the
benefits of) this Agreement, or was not a party to (or entitled to receive the
benefits of) this Agreement at its outset. Except as otherwise set forth
herein, nothing herein shall be deemed to require the relevant member of the
Lessee Group to indemnify the Lessor for any of the Lessor's acts or omissions
which constitute gross negligence or willful misconduct. This general
indemnity shall not affect any claims of the type discussed above which the
relevant member of the Lessee Group may have against the Manufacturer.
17. ASSIGNMENT
17.1. Right of the Lessor to Assign this Agreement. The Lessor shall
have the right to finance the acquisition and ownership of Vehicles by selling
or assigning its right, title and interest in moneys due from each Lessee and
any third party under this Agreement; provided, however, that any such sale or
assignment shall be subject to the rights and interest of the relevant Lessee
in such Vehicles, including but not limited to such Lessee's right of quiet and
peaceful possession of the Vehicles as set forth in Section 9 hereof, and under
this Agreement.
17.2. Limitations on the Right of the Lessee to Assign this
Agreement. Each 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 relevant
Lessee may rent such vehicles under the terms of such Lessee's normal daily
rental programs. Any purported assignment in violation of this Section 17.2
shall be void and of no force or effect. Nothing contained herein shall be
deemed to restrict the right of any Lessee to acquire or dispose of, by
purchase, lease, financing, or otherwise, motor vehicles that are not subject
to the provisions of this Agreement.
- 27 -
32
18. DEFAULT AND REMEDIES THEREFOR.
18.1. 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:
18.1.1. there occurs (i) a default in the payment of any
Monthly Base Rent and the continuance thereof for a period of five
days, (ii) a default in the payment of any Monthly Variable Rent,
Monthly Supplemental Rent or, with respect to Non-Repurchase Vehicles,
Additional Base Rent and the continuance thereof for five days or
(iii) a default and continuance thereof for five Business Days after
notice thereof by the Lessor or the Trustee to the Lessee Group in the
payment of any amount payable under this Agreement (other than amounts
described in clause (i) or (ii) above);
18.1.2. any unauthorized assignment or transfer of this
Agreement by any member of the Lessee Group occurs;
18.1.3. the failure, in any material respect, of the Lessee
Group to maintain, or cause to be maintained, insurance as required in
Section 5 or Section 31.3;
18.1.4. subject to the provisions of Section 20 hereof
regarding Lessee Partial Wind-Down Events, the failure of the Lessee
Group to observe or perform any other material covenant, condition,
agreement or provision hereof, including, but not limited to, usage
and maintenance, and such default continues for more than thirty (30)
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 or the Trustee to
such Lessee; provided, however, that if such failure cannot reasonably
be cured within such thirty (30) day period, no Lease Event of Default
shall result therefrom so long as, within such thirty (30) day period,
such Lessee (i) commences to cure same, (ii) delivers written notice
to the Lessor and the Trustee notifying the Lessor and the Trustee of
such default and setting forth the steps such Lessee intends to take
in order to cure such default and (iii) thereafter diligently
prosecutes such cure to completion and completely cures such default
on or before the fiftieth (50th) day after the earlier of the dates
set forth in clause (a) and clause (b) above;
18.1.5. subject to the provisions of Section 20 hereof
regarding Lessee Partial Wind-Down Events, if any representation or
warranty made by the Lessee Group herein proves untrue in any material
respect as of the date of the issuance or making thereof and is not
cured within 30 days
- 28 -
33
after notice thereof from the Lessor or the Trustee to the Lessee
Group;
18.1.6. subject to the provisions of Section 20 hereof
regarding Lessee Partial Wind-Down Events, an Event of Bankruptcy
occurs with respect to any member of the Lessee Group; or
18.1.7. a Lease Event of Default occurs under the Amended and
Restated Motor Vehicle Lease Agreement, dated as of December 1, 1996,
or any other Non-Repurchase Vehicle Lease.
18.2. Effect of Lease Event of Default. If (i) a Lease Event of
Default described in Section 18.1.1, 18.1.2 or 18.1.6 shall occur, then the
Monthly Base Rent (calculated as if all Vehicles had become a Casualty for the
Related Month), the Monthly Variable Rent (calculated as if the full amount of
interest, principal and other charges under the outstanding Series 1996-1 Notes
were then due and payable in full), the Monthly Supplemental Rent (calculated
as if the full amount of interest, principal and other charges under the
outstanding Series 1996-1 Notes were then due and payable in full) and, with
respect to Non-Repurchase Vehicles, the Additional Base Rent, if any, shall,
automatically, without further action by the Lessor or the Trustee, become
immediately due and payable or (ii) any other Lease Event of Default or any
Liquidation Event of Default shall occur, the Lessor or the Trustee may declare
the Rent (calculated as described in clause (i) above) to be due and payable,
whereupon such Rent (as so calculated) shall, subject to Section 18.5, become
immediately due and payable.
18.3. Rights of Lessor Upon Lease Event of Default, Liquidation Event
of Default or Limited Liquidation Event of Default. If a Lease Event of
Default, Limited Liquidation Event of Default or Liquidation Event of Default
shall occur, then the Lessor at its option may:
(i) Proceed by appropriate court action or actions, either at
law or in equity, to enforce performance by the Lessee Group (or such
member(s) thereof against which the Lessor determines to exercise its
remedies hereunder) of the applicable covenants and terms of this
Agreement or to recover damages for the breach hereof calculated in
accordance with Section 18.5; or
(ii) By notice in writing to the Lessee Group (or such
member(s) thereof against which the Lessor determines to exercise its
remedies hereunder) following the occurrence of a Lease Event of
Default, terminate this Agreement in its entirety (or in respect only
of the applicable member(s)
- 29 -
34
thereof) and/or the right of possession hereunder of the Lessee Group
(or the applicable member(s) thereof) as to the Vehicles, and the
Lessor may direct delivery by the Lessee Group (or the applicable
member(s) thereof) of documents of title to the Vehicles, whereupon
all rights and interests of the Lessee Group (or the applicable
member(s) thereof) to the Vehicles will cease and terminate (but the
Lessee Group (or the applicable member(s) thereof) will remain liable
hereunder as herein; provided, however, the Lessee Group's liability
will be calculated in accordance with Section 18.5); and thereupon,
the Lessor or its agents may peaceably enter upon the premises of the
applicable Lessee(s) 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 Group (or the
applicable member(s) thereof), or their successors or assigns, to use
the Vehicles for any purpose whatsoever, and the Lessor will,
nevertheless, have a right to recover from the Lessee Group (or the
applicable member(s) thereof) any and all amounts which under the
terms of Section 18.2 (as limited by Section 18.5) of this Agreement
may be then due. The Lessor will provide the Lessee Group (or the
applicable member(s) thereof) with written notice of the place and
time of the sale at least five days prior to the proposed sale, which
shall be deemed commercially reasonable, and any 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
Lessees will in any case be calculated in accordance with Section
18.5. All such powers and remedies will be cumulative, and the
exercise of one will not be deemed a waiver of the right to exercise
any other or others. No delay or omission of the Lessor in the
exercise of any such power or remedy and no renewal or extension of
any payments due hereunder will impair any such power or remedy or
will be construed to be a waiver of any default or any acquiescence
therein. Any extension of time for payment hereunder or other
indulgence duly granted to the Lessee Group (or the applicable
member(s) thereof) will not otherwise alter or affect the Lessor's
rights or the obligations hereunder of the Lessee Group (or the
applicable member(s) thereof). 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 herein; or
- 30 -
35
(iii) By notice in writing to the Lessee Group (or such
member(s) thereof against which the Lessor determines to exercise its
remedies hereunder), terminate the Power of Attorney.
18.4. Rights of Trustee Upon Liquidation Event of Default, Limited
Liquidation Event of Default and Non-Performance of Certain Covenants.
(i) If a Liquidation Event of Default or a Limited
Liquidation Event of Default or, with respect to Repurchase Vehicles,
a Manufacturer Event of Default, shall have occurred and be
continuing, the Lessor and the Trustee, to the extent provided in the
Indenture, shall have the rights against the Guarantor, each Lessee,
each Manufacturer in connection with any Manufacturer Event of Default
and the Collateral provided in the Indenture (including, without
limitation, in connection with a Manufacturer Event of Default, the
rights granted under Section 9.3 of the Indenture) upon a Liquidation
Event of Default or Limited Liquidation Event of Default, including
the right to take possession of all Vehicles immediately from the
Lessees.
(ii) With respect to Repurchase Vehicles, if the Guarantor or
any Lessee shall default in the due performance and observance of any
of its obligations under Section 31.3, 31.4, 31.5(iv), 31.8, 32.3 or
32.4 hereof, and such default shall continue unremedied for a period
of 30 days after notice thereof shall have been given to the Guarantor
by the Lessor, the Lessor or the Trustee, as assignee of the Lessor's
rights hereunder, shall have the ability to exercise all rights,
remedies, powers, privileges and claims of the Guarantor or any Lessee
against the Manufacturers under or in connection with the Repurchase
Programs with respect to (i) Repurchase Vehicles the Guarantor or any
Lessee has determined to turn back to the Manufacturers under such
Repurchase Programs and (ii) whether or not the Guarantor or any
Lessee shall then have determined to turn back such Repurchase
Vehicles, any Repurchase Vehicles for which the applicable Repurchase
Period will end within one week or less.
(iii) Upon a default in the performance (after giving effect
to any grace periods provided herein) by the Guarantor or any Lessee
of its obligations hereunder to keep the Vehicles free of Liens and to
maintain the Trustee's Lien perfected on the Collateral, the Trustee
shall have the right to take actions reasonably necessary to correct
such default with respect to the subject Vehicles including the
execution of UCC financing statements with respect to Repurchase
Programs and other general intangibles, and the
- 31 -
36
completion of Vehicle Perfection and Documentation Requirements on
behalf of the Guarantor or the Lessee as applicable.
(iv) Upon the occurrence of a Liquidation Event of Default or
Limited Liquidation Event of Default, the Guarantor and each Lessee
will return any Repurchase Vehicles to the related Manufacturer in
accordance with the instructions of the Lessor.
(v) Upon the occurrence of a Liquidation Event of Default or
Limited Liquidation Event of Default, the Lessor shall have the right
to dispose of (x) those Repurchase Vehicles not accepted by the
related Manufacturer under the applicable Repurchase Program pursuant
to clause (iv) above and (y) the Non-Repurchase Vehicles and to direct
the Guarantor or the applicable Lessee to dispose of such Vehicles in
accordance with its instructions. In addition, the Lessor shall have
all of the rights, remedies, powers, privileges and claims vis-a-vis
the Guarantor or any Lessee, necessary or desirable to allow the
Trustee to exercise the rights, remedies, powers, privileges and
claims given to the Trustee pursuant to Section 9.2 and, with respect
to Repurchase Vehicles, Section 9.3 of the Base Indenture and the
Guarantor and each Lessee acknowledges that it has hereby granted to
the Lessor all of the rights, remedies, powers, privileges and claims
granted to the Trustee pursuant to Article 9 of the Base Indenture and
that, under certain circumstances set forth in the Base Indenture, the
Trustee may act in lieu of the Lessor in the exercise of such rights,
remedies, powers, privileges and claims.
18.5. Measure of Damages. If a Lease Event of Default, Liquidation
Event of Default or Limited Liquidation Event of Default occurs and the Lessor
or the Trustee exercises the remedies granted to the Lessor or the Trustee
under this Article 18, the amount that the Lessor shall be permitted to recover
shall be equal to:
(i) all Rent under this Agreement (calculated as provided in
Section 18.2); plus
(ii) any damages and expenses, including reasonable
attorneys' fees and expenses (and including net after-tax losses of
federal and state income tax benefits to which the Lessor would
otherwise be entitled under this Agreement), which the Lessor or the
Trustee will have sustained by reason of the Lease Event of Default,
Liquidation Event of Default or Limited Liquidation Event of Default,
together with reasonable sums for such attorneys' fees and such
expenses as will be expended or incurred in the seizure,
- 32 -
37
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 on amounts due and unpaid under this Agreement
at the VFR plus 1% from time to time computed from the date of the
Lease Event of Default, Liquidation Event of Default or Limited
Liquidation Event of Default or the date payments were originally due
the Lessor under this Agreement or from the date of each expenditure
by the Lessor which is recoverable from the Lessees pursuant to this
Section 18, as applicable, to and including the date payments are made
by the Lessees; minus
(v) an amount equal to all sums realized by the Lessor or the
Trustee from the liquidation of the Vehicles leased hereunder (either
by receipt of payment from the Manufacturers under Repurchase
Programs, from sales of Vehicles to third parties, or otherwise);
provided, however, if an Eligible Repurchase Vehicle is turned back to
the Manufacturer under the applicable Repurchase Program and accepted
for repurchase by such Manufacturer (as evidenced by a Condition
Report indicating that such Repurchase Vehicle conforms to the
requirements for repurchase under such Repurchase Program) the Lessor
and the Trustee shall be deemed to have received on account of this
clause (y) an amount equal to the Net Book Value of such Repurchase
Vehicle (less (a) any Termination Payments and (b) Repurchase Price
Interest (calculated assuming that payment of the Repurchase Price
will be received on the 60th day after the Turnback Date)) payable in
respect of such Repurchase Vehicle).
18.6. Application of Proceeds. The proceeds of any sale or other
disposition pursuant to Section 18.3 or 18.4 shall be applied in the following
order: (i) to the reasonable costs and expenses incurred by the Lessor in
connection with such sale or disposition, including any reasonable costs
associated with repairing any Vehicles, and reasonable attorneys' fees in
connection with the enforcement of this Agreement, (ii) to the payment of
outstanding Rent (such payments to be applied first to outstanding Monthly
Variable Rent, then to outstanding Monthly Supplemental Rent, then to
outstanding Monthly Base Rent, and then, with respect to proceeds related to
any Non-Repurchase Vehicles, to outstanding Additional Base Rent), (iii) to the
payment of all other amounts due hereunder, and (iv) any remaining amounts to
the Lessor, or such Person(s) as may be lawfully entitled thereto.
- 33 -
38
19. MANUFACTURER EVENTS OF DEFAULT. Upon the occurrence of any of
the following events (each, a "Manufacturer Event of Default") with respect to
any Manufacturer (subject to the provisions of Section 21 hereof regarding
Eligibility Waiver Events), the relevant Lessee on behalf of the Lessor (a)
shall no longer place Vehicle Orders for (x) any additional Vehicles in the
event of any Manufacturer Event of Default arising under Section 19.1, 19.3 or
19.4 or (y) any additional Repurchase Vehicles in the event of any Manufacturer
Event of Default arising under Section 19.2 or 19.5, from such Manufacturer
(each, a "Defaulting Manufacturer") and (b) shall cancel any Vehicle Order with
such Defaulting Manufacturer to which a VIN has not been assigned as of the
date such Manufacturer Event of Default occurs:
19.1. The failure of such Manufacturer to pay any amount when due
pursuant to the related Repurchase Program with respect to a Repurchase Vehicle
turned in to such Manufacturer or delivered to an authorized auction site
pursuant to the related Repurchase Program; provided, however, that such
failure continues for more than ninety (90) days following the Turnback Date
such that the aggregate of any such amounts not paid for more than 90 days are
in the aggregate in excess of $2,000,000 net of amounts that are the subject of
a good faith dispute as evidenced in writing by either a member of the Lessee
Group or the Manufacturer questioning the accuracy of the amounts paid or
payable in respect of certain Repurchase Vehicles tendered for repurchase, or
delivered to an authorized auction site, under a Repurchase Program.
19.2. The termination of such Manufacturer's Repurchase Program
(subject to the provisions of Section 21 hereof regarding Eligibility Waiver
Events).
19.3. The occurrence of an Event of Bankruptcy with respect to such
Manufacturer.
19.4. Such Manufacturer is no longer an Eligible Manufacturer in the
case of Repurchase Vehicles, or Eligible Non-Repurchase Manufacturer, in the
case of Non-Repurchase Vehicles.
19.5. The Repurchase Program of a Manufacturer shall no longer be an
Eligible Repurchase Program (subject, in each case, to the provisions of
Section 21 hereof regarding Eligibility Waiver Events).
20. LESSEE PARTIAL WIND-DOWN EVENTS. Upon the occurrence of any of
the events described in Sections 18.1.4, 18.1.5, or 18.1.6 with respect to any
member (such member, the "Defaulting Lessee") of the Lessee Group other than
the Guarantor (a "Lessee Partial Wind-Down Event"), then such Defaulting Lessee
shall (a)
- 34 -
39
no longer place Series 1996-1 Vehicle Orders for additional Vehicles and (b)
shall cancel Series 1996-1 Vehicle Orders for Vehicles; provided, however, that
if a Series 1996-1 Vehicle Order has been placed for a Manufacturer Acquired
Vehicle and the related Manufacturer has assigned a VIN as of the date such
Lessee Partial Wind-Down Event occurs, then such Series 1996-1 Vehicle Order
will not be canceled. In the case of a Lessee Partial Wind-Down Event, the
Lessor may (i) exercise any right or remedy in respect only of such Defaulting
Lessee provided for pursuant to the provisions of Section 18.3 or 18.4 hereof
and (ii) terminate the Power of Attorney with respect to such Defaulting
Lessee.
21. ELIGIBILITY WAIVER EVENTS. In the event that a Manufacturer
Event of Default occurs by reason of an event stated in Section 19.2 or 19.5 (a
"Manufacturer Wind-Down Event"), then if (i) the Series Supplement for any
Series of Notes outstanding under the Indenture provides for the right of all
or less than all of the Noteholders to waive such Manufacturer Wind-Down Event
and (ii) the Requisite Noteholders in respect of any Series of Notes waives
such Manufacturer Wind-Down Event, the Lessees may continue to place Vehicle
Orders for the purchase of Repurchase Vehicles or Non-Repurchase Vehicles from
such Defaulting Manufacturer through this Agreement; provided, however, the
total Net Book Value of all Repurchase Vehicles or Non-Repurchase Vehicles
leased hereunder through any Defaulting Manufacturer shall not exceed the
Maximum Defaulting Manufacturer Percentage of the Net Book Value of all
Repurchase Vehicles or Non- Repurchase Vehicles leased under this Agreement;
and, provided, further, that in the event a Lessee seeks any such waiver of a
Manufacturer Wind-Down Event such Lessee shall in connection therewith propose
a Maximum Defaulting Manufacturer Percentage for such Defaulting Manufacturer
and the resulting Maximum Defaulting Manufacturer Percentage shall equal that
percentage of the proposed Maximum Defaulting Manufacturer Percentage which
corresponds to the percentage of Noteholders which consent to such waiver. Any
such waiver by any such Requisite Noteholders shall be referred to as an
"Eligibility Waiver Event".
22. CERTIFICATION OF TRADE OR BUSINESS USE. Each Lessee hereby
warrants and certifies, under penalties of perjury, that (1) such Lessee
intends that more than 50 percent of the use of the Vehicles listed on the
Supplemental Document(s), attached hereto and made a part hereof, which are
subject to this Agreement, are to be used in a trade or business of such
Lessee, and (2) such Lessee has been advised that it will not be treated as the
owner of the Vehicle(s) for federal income tax purposes.
23. SURVIVAL. In the event that, during the term of this Agreement,
any member of the Lessee Group becomes liable for the payment or reimbursement
of any obligations, claims or taxes
- 35 -
40
pursuant to any provision hereof, such liability will continue, notwithstanding
the expiration or termination of this Agreement, until all such amounts are
paid or reimbursed by such Lessee.
24. ADDITIONAL LESSEES.
24.1. Additional Affiliate and Subsidiary Lessees. Any Affiliate of
or direct or indirect Subsidiary of the Guarantor (each, a "Guarantor
Subsidiary") shall have the right to become a "Lessee" under and pursuant to
the terms of this Agreement by complying with the provisions of this Section
24.1. In the event a Guarantor Subsidiary desires to become a "Lessee" under
this Agreement, then the Guarantor and such Guarantor Subsidiary shall execute
(if appropriate) and deliver to the Lessor and the Trustee:
(i) a Joinder in Lease Agreement in the form attached hereto
as Attachment C-1 (each, an "Affiliate Joinder in Lease");
(ii) the certificate of incorporation for such Guarantor
Subsidiary, duly certified by the Secretary of State of the
jurisdiction of such Guarantor Subsidiary's incorporation, together
with a copy of the by-laws of such Guarantor Subsidiary, duly
certified by a Secretary or Assistant Secretary of such Guarantor
Subsidiary;
(iii) copies of resolutions of the Board of Directors of such
Guarantor Subsidiary authorizing or ratifying the execution, delivery
and performance, respectively, of those documents and matters required
of it with respect to this Agreement, duly certified by the Secretary
or Assistant Secretary of such Guarantor Subsidiary;
(iv) a certificate of the Secretary or Assistant Secretary of
such Guarantor Subsidiary certifying the names of the individual or
individuals authorized to sign the Affiliate Joinder in Lease
Agreement and the other Related Documents to be executed by it,
together with samples of the true signatures of each such individual;
(v) a good standing certificate for such Guarantor Subsidiary
in the jurisdiction of its incorporation and the jurisdiction of its
principal place of business;
(vi) a written search report from a Person satisfactory to
the Lessor and the Trustee listing all effective financing statements
that name such Guarantor Subsidiary as debtor or assignor, and that
are filed in the jurisdictions in which filings were made pursuant to
clause (vii) below, together with copies of such financing
- 36 -
41
statements, and tax and judgment lien search reports from a Person
satisfactory to the Lessor and the Trustee showing no evidence of
liens filed against such Guarantor Subsidiary that purport to affect
any Vehicles leased hereunder or any Collateral under the Indenture;
(vii) evidence of the filing of proper financing statements
on Form UCC-1 naming such Guarantor Subsidiary, as debtor, and the
Lessor as secured party covering the collateral described in Section
2(b) hereof;
(viii) an Officers' Certificate and an opinion of counsel
each stating that such joinder by such Guarantor Subsidiary complies
with this Section 24.1 and that all conditions precedent herein
provided for relating to such transaction have been complied with;
(ix) a statement from each of the Rating Agencies that such
Guarantor Subsidiary becoming a "Lessee" under this Agreement will not
cause a failure to meet the Rating Agency Condition; and
(x) any additional documentation that the Lessor or the
Trustee may require to evidence the assumption by such Guarantor
Subsidiary of the obligations and liabilities set forth in this
Agreement.
Upon satisfaction of the foregoing conditions and receipt by such Guarantor
Subsidiary of the applicable Affiliate Joinder in Lease executed by the Lessor,
such Guarantor Subsidiary shall for all purposes be deemed to be a "Lessee" for
purposes of this Agreement and shall be entitled to the benefits and subject to
the liabilities and obligations of a Lessee hereunder.
24.2. Additional Non-Affiliate Lessees. Any party which is not an
Affiliate of the Guarantor (each, a "Non- Affiliate") shall have the right to
become a "Lessee" under and pursuant to the terms of this Agreement by
complying with the provisions of this Section 24.2. In the event a
Non-Affiliate desires to become a "Lessee" under this Agreement, then the
Guarantor and such Non-Affiliate shall execute (if appropriate) and deliver to
the Lessor and the Trustee:
(i) a Joinder in Lease Agreement in the form attached hereto
as Attachment C-2 (each, a "Non-Affiliate Joinder in Lease");
(ii) the certificate of incorporation for such Non-Affiliate,
duly certified by the Secretary of State of the jurisdiction of such
Non-Affiliate's incorporation, together with a copy of the by-laws of
such Non- Affiliate, duly
- 37 -
42
certified by a Secretary or Assistant Secretary of such Non-Affiliate;
(iii) copies of resolutions of the Board of Directors of such
Non-Affiliate authorizing or ratifying the execution, delivery and
performance, respectively, of those documents and matters required of
it with respect to this Agreement, duly certified by the Secretary or
Assistant Secretary of such Non-Affiliate;
(iv) a certificate of the Secretary or Assistant Secretary of
such Non-Affiliate certifying the names of the individual or
individuals authorized to sign the Non-Affiliate Joinder in Lease and
the other Related Documents to be executed by it, together with
samples of the true signatures of each such individual;
(v) a good standing certificate for such Non-Affiliate in the
jurisdiction of its incorporation and the jurisdiction of its
principal place of business;
(vi) a written search report from a Person satisfactory to
the Lessor and the Trustee listing all effective financing statements
that name such Non-Affiliate as debtor or assignor, and that are filed
in the jurisdictions in which filings were made pursuant to clause
(vii) below, together with copies of such financing statements, and
tax and judgment lien search reports from a Person satisfactory to the
Lessor and the Trustee showing no evidence of liens filed against such
Non-Affiliate that purport to affect any Vehicles leased hereunder or
any Collateral under the Indenture;
(vii) evidence of the filing of proper financing statements
on Form UCC-1 naming such Non-Affiliate, as debtor, and the Lessor as
secured party covering the collateral described in Section 2(b)
hereof;
(viii) an Officers' Certificate and an opinion of counsel
each stating that such joinder by such Non- Affiliate complies with
this Section 24.2 and that all conditions precedent herein provided
for relating to such transaction have been complied with;
(ix) a statement from each of the Rating Agencies that such
Non-Affiliate becoming a "Lessee" under this Agreement will not cause
a failure to meet the Rating Agency Condition; and
(x) any additional documentation that the Lessor or the
Trustee may require to evidence the assumption by such
- 38 -
43
Non-Affiliate of the obligations and liabilities set forth in this
Agreement.
Upon satisfaction of the foregoing conditions and receipt by such Non-Affiliate
of the applicable Non-Affiliate Joinder in Lease executed by the Lessor, such
Non-Affiliate shall for all purposes be deemed to be a "Lessee" for purposes of
this Agreement and shall be entitled to the benefits and subject to the
liabilities and obligations of a Lessee hereunder.
25. TITLE. This is an agreement to lease only and title to Vehicles
will at all times remain in the Lessor's name. No member of the Lessee Group
will have any rights or interest in Vehicles whatsoever other than the right of
possession and use as provided by this Agreement.
26. GUARANTY.
26.1. Guaranty. In order to induce the Lessor to execute and deliver
this Agreement and to lease Vehicles to the Lessees, and in consideration
thereof, the Guarantor hereby (i) unconditionally and irrevocably guarantees to
the Lessor the obligations of the Lessees to make any payments required to be
made by them under this Agreement, (ii) agrees to cause the Lessees to duly and
punctually perform and observe all of the terms, conditions, covenants,
agreements and indemnities of the Lessees under this Agreement, and (iii)
agrees that, if for any reason whatsoever, any Lessee fails to so perform and
observe such terms, conditions, covenants, agreements and indemnities, the
Guarantor will duly and punctually perform and observe the same (the
obligations referred to in clauses (i) through (iii) above are collectively
referred to as the "Guaranteed Obligations"). The liabilities and obligations
of the Guarantor under the guaranty contained in this Section 26 (this
"Guaranty") will be absolute and unconditional under all circumstances. This
Guaranty shall be a guaranty of payment and not of collection, and the
Guarantor hereby agrees that it shall not be required that the Lessor or the
Trustee assert or enforce any rights against any of the Lessees or any other
person before or as a condition to the obligations of the Guarantor pursuant to
this Guaranty.
26.2. Scope of Guarantor's Liability. The Guarantor's obligations
hereunder are independent of the obligations of the Lessees, any other
guarantor or any other Person, and the Lessor may enforce any of its rights
hereunder independently of any other right or remedy that the Lessor may at any
time hold with respect to this Agreement or any security or other guaranty
therefor. Without limiting the generality of the foregoing, the Lessor may
bring a separate action against the Guarantor without first proceeding against
any of the Lessees, any other guarantor
- 39 -
44
or any other Person, or any security held by the Lessor, and regardless of
whether the Lessees or any other guarantor or any other Person is joined in any
such action. The Guarantor's liability hereunder shall at all times remain
effective with respect to the full amount due from the Lessees hereunder,
notwithstanding any limitations on the liability of the Lessees to the Lessor
contained in any of the Related Documents or elsewhere. The Lessor's rights
hereunder shall not be exhausted by any action taken by the Lessor until all
Guaranteed obligations have been fully paid and performed. The liability of
the Guarantor hereunder shall be reinstated and revived, and the rights of the
Lessor shall continue, with respect to any amount at any time paid on account
of the Guaranteed Obligations which shall thereafter be required to be restored
or returned by the Lessor upon the bankruptcy, insolvency or reorganization of
any of the Lessees, any other guarantor or any other Person, or otherwise, all
as though such amount had not been paid.
26.3. Lessor's Right to Amend this Agreement, Etc. The Guarantor
authorizes the Lessor, at any time and from time to time without notice and
without affecting the liability of the Guarantor hereunder, to: (a) alter the
terms of all or any part of the Guaranteed Obligations and any security and
guaranties therefor including without limitation modification of times for
payment and rates of interest; (b) accept new or additional instruments,
documents, agreements, security or guaranties in connection with all or any
part of the Guaranteed Obligations; (c) accept partial payments on the
Guaranteed Obligations; (d) waive, release, reconvey, terminate, abandon,
subordinate, exchange, substitute, transfer, compound, compromise, liquidate
and enforce all or any part of the Guaranteed Obligations and any security or
guaranties therefor, and apply any such security and direct the order or manner
of sale thereof (and bid and purchase at any such sale), as the Lessor in its
discretion may determine; (e) release any Lessee, any guarantor or any other
Person from any personal liability with respect to all or any part of the
Guaranteed Obligations; and (f) assign its rights under this Guaranty in whole
or in part.
26.4. Waiver of Certain Rights by Guarantor. The Guarantor hereby
waives each of the following to the fullest extent allowed by law:
(a) all statutes of limitation as a defense to any action
brought by the Lessor against the Guarantor;
(b) any defense based upon:
(i) the unenforceability or invalidity of all or
any part of the Guaranteed Obligations or any security or
other guaranty for the Guaranteed Obligations or the
- 40 -
45
lack of perfection or failure of priority of any security for
the Guaranteed Obligations; or
(ii) any act or omission of the Lessor or any other
Person that directly or indirectly results in the discharge or
release of any of the Lessees or any other Person or any of
the Guaranteed Obligations or any security therefor; or
(iii) any disability or any other defense of any
Lessee or any other Person with respect to the Guaranteed
Obligations, whether consensual or arising by operation of law
or any bankruptcy, insolvency or debtor-relief proceeding, or
from any other cause;
(c) any right (whether now or hereafter existing) to
require the Lessor, as a condition to the enforcement of this
Guaranty, to:
(i) accelerate the Guaranteed Obligations;
(ii) give notice to the Guarantor of the terms,
time and place of any public or private sale of any security
for the Guaranteed Obligations; or
(iii) proceed against any Lessee, any other
guarantor or any other Person, or proceed against or exhaust
any security for the Guaranteed Obligations;
(d) all rights of subrogation, all rights to enforce any
remedy that the Lessor now or hereafter has against any Lessee or any
other Person, and any benefit of, and right to participate in, any
security now or hereafter held by the Lessor with respect to the
Guaranteed Obligations;
(e) presentment, demand, protest and notice of any kind,
including without limitation notices of default and notice of
acceptance of this Guaranty;
(f) all suretyship defenses and rights of every nature
otherwise available under New York law and the laws of any other
jurisdiction; and
(g) all other rights and defenses the assertion or exercise
of which would in any way diminish the liability of the Guarantor
hereunder.
26.5. Lessees' Obligations to Guarantor and Guarantor's Obligations
to Lessees Subordinated. Until all of the Guaranteed Obligations have been
paid in full, the Guarantor agrees that all existing and future debts,
obligations and liabilities of the
- 41 -
46
Lessees to the Guarantor or the Guarantor to any of the Lessees (hereinafter
collectively referred to as "Subordinated Debt") shall be and hereby are
expressly subordinated to the Guaranteed Obligations on the terms set forth in
clauses (a) through (e) below, and the payment thereof is expressly deferred in
right of payment to the prior payment in full of the Guaranteed Obligations.
For purposes of this Section 26.5, to the extent the Guaranteed Obligations
consist of the obligation to pay money, the Guaranteed Obligations shall not be
deemed paid in full unless and until paid in full in cash.
(a) Upon any distribution of assets of the Guarantor or any
Lessee upon any dissolution, winding up, liquidation or reorganization
of such Lessee, whether in bankruptcy, insolvency, reorganization or
receivership proceedings, or upon an assignment for the benefit of
creditors or any other marshalling of the assets and liabilities of
the Guarantor or such Lessee, or otherwise:
(i) the holders of the Guaranteed Obligations
shall be entitled to receive payment in full of the Guaranteed
Obligations before the Guarantor or the Lessee, as the case
may be, is entitled to receive any payment on account of the
Subordinated Debt;
(ii) any payment by, or distribution of assets of,
the Guarantor or such Lessee of any kind or character, whether
in cash, property or securities, to which such Lessee or the
Guarantor would be entitled except for this subordination
shall be paid or delivered by the Person making such payment
or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee, or otherwise, directly to the holders
of the Guaranteed Obligations to be held as additional
security for the Guaranteed Obligations in an interest bearing
account until the Guaranteed Obligations have been paid in
full; and
(iii) if, notwithstanding the foregoing, any payment
by, or distribution of assets of, the Guarantor or such Lessee
of any kind or character, whether in cash, property or
securities, in respect of any Subordinated Debt shall be
received by such Lessee or the Guarantor before the Guaranteed
Obligations are paid in full, such payment or distribution
shall be held in trust in an interest bearing account of the
Guarantor or such Lessee, as appropriate, and immediately paid
over in kind to the holders of the Guaranteed Obligations
until the Guaranteed Obligations have been paid in full.
- 42 -
47
(b) The Guarantor authorizes and directs each Lessee and each
Lessee authorizes and directs the Guarantor to take such action as may
be necessary or appropriate to effectuate and maintain the
subordination provided herein.
(c) No right of any holder of the Guaranteed Obligations to
enforce the subordination herein shall at any time or in any way be
prejudiced or impaired by any act or failure to act on the part of the
Guarantor, any Lessee, the Lessor or any other Person or by any
noncompliance by the Guarantor, any Lessee, the Lessor or any other
Person with the terms, provisions and covenants hereof or of the
Related Documents regardless of any knowledge thereof that any such
holder of the Guaranteed Obligations may have or be otherwise charged
with.
(d) Nothing express or implied herein shall give any Person
other than the Lessees, the Lessor, the Trustee and the Guarantor any
benefit or any legal or equitable right, remedy or claim hereunder.
(e) If the Guarantor shall institute or participate in any
suit, action or proceeding against any Lessee or any Lessee shall
institute or participate in any suit, action or proceeding against the
Guarantor, in violation of the terms hereof, such Lessee or the
Guarantor, as the case may be, may interpose as a defense or dilatory
plea this subordination, and the holders of the Guaranteed Obligations
are irrevocably authorized to intervene and to interpose such defense
or plea in their name or in such Lessee's or the Guarantor's, as the
case may be, name.
26.6. Guarantor to Pay Lessor's Expenses. The Guarantor agrees to
pay to the Lessor, on demand, all costs and expenses, including attorneys' and
other professional and paraprofessional fees, incurred by the Lessor in
exercising any right, power or remedy conferred by this Guaranty, or in the
enforcement of this Guaranty, whether or not any action is filed in connection
therewith. Until paid to the Lessor, such amounts shall bear interest,
commencing with the Lessor's demand therefor, at the VFR plus 1%.
26.7. Reinstatement. This Guaranty shall continue to be effective or
be reinstated, as the case may be, if at any time payment of any of the amounts
payable by any Lessee under this Agreement is rescinded or must otherwise be
restored or returned by the Lessor, upon an event of bankruptcy, dissolution,
liquidation or reorganization of any member of the Lessee Group or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, any member of the Lessee Group or any
substantial part of their
- 43 -
48
respective property, or otherwise, all as though such payment had not been
made.
26.8. Pari Passu Indebtedness. The Guarantor (i) represents and
warrants that, as of the date hereof, the obligations of the Guarantor under
this Guaranty will rank pari passu with any existing unsecured indebtedness of
the Guarantor and (ii) covenants and agrees that from and after the date hereof
the obligations of the Guarantor under this Guaranty will rank pari passu with
any unsecured indebtedness of the Guarantor incurred after the date hereof.
27. RIGHTS OF LESSOR ASSIGNED TO TRUSTEE. Notwithstanding anything
to the contrary contained in this Agreement, each member of the Lessee Group
acknowledges that the Lessor has assigned all of its rights under this
Agreement to the Trustee. Accordingly, each member of the Lessee Group 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 and the Guarantor's and the relevant Lessee's obligations
hereunder shall not be subject to any claim or defense which the
Guarantor or such Lessee may have against the Lessor (other than the
defense of payment actually made). Specifically, each member of the
Lessee Group agrees that, upon the occurrence of an Amortization Event
or, subject to the provisions of Section 20 hereof, a Lessee Partial
Wind-Down Event or, with respect to Repurchase Vehicles, subject to
the provisions of Section 19, a Manufacturer Event of Default, the
Trustee may exercise (for and on behalf of the Lessor) any right or
remedy against any member of the Lessee Group provided for herein and
no member of the Lessee Group will interpose as a defense that such
claim should have been asserted by the Lessor;
(ii) Upon the delivery by the Trustee of any notice to any
member of the Lessee Group stating that a Manufacturer Event of
Default, an Amortization Event or Lessee Partial Wind-Down Event with
respect to such Lessee has occurred, then such member of the Lessee
Group, will, if so requested by the Trustee, treat the Trustee or the
Trustee's designee for all purposes as the Lessor hereunder and in all
respects comply with all obligations under this Agreement that are
asserted by the Trustee as the successor to the Lessor hereunder,
irrespective of whether such member of the Lessee Group has received
any such notice from the Lessor; provided, however, the Trustee, shall
in no event be liable to any Lessee for any action taken by it in its
capacity as successor to the Lessor other than actions that constitute
negligence or willful misconduct;
- 44 -
49
(iii) Each member of the Lessee Group acknowledges that
pursuant to the Indenture the Lessor has irrevocably authorized and
directed such member of the Lessee Group to, and each such member of
the Lessee Group shall, make payments of Rent hereunder (and any other
payments 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 such member of the Lessee Group to the Lessor
hereunder to the extent of such payments. Upon written notice to the
relevant member of the Lessee Group of a sale or assignment by the
Trustee of its right, title and interest in moneys due under this
Agreement to a successor Trustee, such member of the Lessee Group
shall thereafter make payments of all Rent (and any other payments
hereunder) to the party specified in such notice; and
(iv) Upon request made by the Trustee at any time, each
member of the Lessee Group will take such actions as are requested by
the Trustee to assist the Trustee in maintaining the Trustee's
perfected security interest in the Vehicles leased under this
Agreement, the Certificates of Title with respect thereto, the
Collateral pursuant to the Indenture and the collateral granted to the
Lessor pursuant to Section 2(b) (such grant of collateral to be
effective as of the date of this Agreement, but only in the event that
this Agreement is recharacterized as described in such Section 2(b)).
28. RIGHT OF LESSEE TO DELEGATE RIGHTS AND OBLIGATIONS HEREUNDER TO
GUARANTOR. If and for so long as the Guarantor is acting as the Servicer under
the Indenture, any Lessee shall be permitted to delegate to the Guarantor
(acting in such capacity) its rights and obligations under this Agreement,
including, without limitation, its rights and obligations under Sections 10 and
11 hereof. No such delegation of rights or obligations shall, however, operate
in any manner to release any such delegating Lessee from any of its obligations
under this Agreement.
29. MODIFICATION AND SEVERABILITY. The terms of this Agreement will
not be waived, altered, modified, amended, supplemented or terminated in any
manner whatsoever except by written instrument signed by the Lessor and each
Lessee and consented to in writing by 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.
- 45 -
50
30. CERTAIN REPRESENTATIONS AND WARRANTIES. Each Lessee represents
and warrants to the Lessor and the Trustee as to itself and as to each other
Lessee, and the Guarantor represents and warrants to the Lessor and the Trustee
as to itself and as to each Lessee, that as of the Closing Date with respect to
the Series 1996-1 Notes:
30.1. Due Organization, Authorization, Etc. The Guarantor and each
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 such Lessee or the Guarantor, as applicable. The
execution, delivery and performance by the Guarantor and each 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, without limitation, shareholder approval, if
required), have received all necessary governmental and other consents and
approvals (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 Guarantor or
such Lessee, as applicable. This Agreement and each other Related Document to
be executed and delivered by it are (or when executed and delivered will be)
the legal, valid, and binding obligations of the Guarantor or such Lessee,
enforceable against the Guarantor or such Lessee, as the case may be, in
accordance with their respective terms, subject to bankruptcy, insolvency and
other laws affecting the enforcement of creditors' rights. Each Lessee is a
direct or indirect Subsidiary of the Guarantor.
30.2. Financial Information; Financial Condition. All balance
sheets, all statements of operations, of stockholders' equity and of cash flow,
and other financial data (other than projections and the financial statements
referred to in clause (b) below) 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. 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:
- 46 -
51
(a) the audited consolidated balance sheets of "Team Rental
Group" and each Non-Team Lessee as of December 31, 1995 and the
related statements of operations, stockholders' deficit and cash flows
for the fiscal year ending on such date; and
(b) (i) the unaudited pro forma consolidated balance sheets
of the Guarantor and the Team Lessees and statement of operations,
accompanied by an Officers' Certificate verifying the accuracy and
completeness thereof signed by an Authorized Officer of the Guarantor,
for the nine-month period ending September 30, 1996, and (ii) the
unaudited pro forma consolidated balance sheets of each Non-Team
Lessee and statement of operations, accompanied by an Officers'
Certificate verifying the accuracy and completeness thereof signed by
an Authorized Officer of such Non-Team Lessee, for the nine-month
period ending September 30, 1996.
30.3. Litigation. Except for claims which are fully covered by
insurance provided by a Person who is not an Affiliate of Team, no claims,
litigation (including, without limitation, derivative actions), arbitration,
governmental investigation or proceeding or inquiry is pending or, to the best
of the Guarantor's or such Lessee's knowledge, threatened against the Guarantor
or any Lessee which would, if adversely determined, have a Material Adverse
Effect on the Guarantor or such Lessee, as applicable.
30.4. Liens. The Vehicles leased under this Agreement are free and
clear of all Liens other than (i) Permitted Liens and (ii) Liens in favor of
the Trustee. The Trustee has obtained, and will continue to obtain, as
security for the liabilities under the Indenture and the Notes, a first
priority perfected Lien on all Vehicles leased under this Agreement. Except as
otherwise permitted under the Indenture, all Vehicle Perfection and
Documentation Requirements with respect to all Vehicles leased under this
Agreement on or after the date hereof have and will continue to be satisfied.
30.5. Employee Benefit Plans. (a) During the twelve consecutive
month period prior to such Closing Date: (i) except for any termination of a
Pension Plan in connection with an acquisition or merger by the Guarantor,
which termination is made in conjunction with the offering by the Guarantor of
a successor Pension Plan, no steps have been taken by the Guarantor or any
Lessee 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 Guarantor or any
- 47 -
52
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 Guarantor or such Lessee, as applicable, and (c) neither the Guarantor nor
any Lessee has any material contingent liability with respect to any
post-retirement benefits under a Welfare Plan, other than liability for
continuation coverage described in Subtitle B of Part 6 of Title I of ERISA and
liabilities which would not have a Material Adverse Effect upon the Guarantor
or such Lessee, as applicable.
30.6. Investment Company Act. Neither the Guarantor nor any Lessee
is an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
30.7. Regulations G, T, U and X. Neither the Guarantor nor any
Lessee is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System).
30.8. Business Locations; Trade Names; Principal Places of Business
Locations. Schedule 30.8 lists each of the locations where each Lessee and the
Guarantor maintains a chief executive office, principal place of business, or
any records; and Schedule 30.8 also lists each Lessee's and the Guarantor's
legal name, each name under or by which each Lessee and the Guarantor conducts
its business, each state in which each Lessee and the Guarantor conducts
business and each state in which each Lessee and the Guarantor has its
principal place of business.
30.9. Taxes. Each of the Guarantor and each Lessee has filed all 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 the Closing Date, there is no
ongoing material audit (other than routine sales tax audits and other routine
audits) or, to the Guarantor's or any 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 adequate reserves have been established and are being maintained in
accordance with GAAP.
- 48 -
53
30.10. Governmental Authorization. The Guarantor and each 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
authorizations would not have a Material Adverse Effect on the Guarantor or
such Lessee, as applicable.
30.11. Compliance with Laws. The Guarantor and each Lessee: (i) is
not in violation of any Requirement of Law, which violation would have a
Material Adverse Effect on the Guarantor or such Lessee, as applicable, and to
the best knowledge of the Guarantor and the Lessees, no such violation has been
alleged, (ii) has filed in a timely manner all reports, documents and other
materials required to be filed by it with any Governmental Agency (and the
information contained in each of such filings is true, correct and complete in
all material respects), except where failure to make such filings would not
have a Material Adverse Effect on the Guarantor or such 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 Guarantor or such Lessee, as
applicable.
30.12. Eligible Vehicles. Each Repurchase Vehicle is or will be, as
the case may be, on the Vehicle Lease Commencement Date with respect to such
Repurchase Vehicle, an Eligible Repurchase Vehicle. Each Non-Repurchase
Vehicle is or will be, as the case may be, on the Vehicle Lease Commencement
Date with respect to such Vehicle, an Eligible Non- Repurchase Vehicle.
30.13. Supplemental Documents True and Correct. All information
contained in any Series 1996-1 Vehicle Order or other Supplemental Document
which has been submitted, or which may hereafter be submitted by a 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 the Series 1996-1 Notes.
31. CERTAIN AFFIRMATIVE COVENANTS. Each Lessee covenants and agrees
as to itself and as to each other Lessee, and the Guarantor covenants and
agrees as to itself and as to each Lessee that, until the expiration or
termination of this Agreement, and thereafter until the obligations of such
Lessee or the Guarantor under this Agreement and the Related Documents are
satisfied in full, unless at any time the Lessor and the Trustee shall
otherwise expressly consent in writing, it will (and, in the case of the
Guarantor, will cause each Lessee to):
- 49 -
54
31.1. 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 Guarantor and each Lessee (it being understood that
subject to Section 32.1(i) each Team Lessee shall remain a direct or indirect
wholly-owned Subsidiary of the Guarantor); (ii) be, and ensure that each Lessee
is, 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 Guarantor or such Lessee, as applicable; 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 Guarantor or such Lessee, as applicable.
31.2. Books, Records and Inspections. (i) Maintain complete and
accurate books and records with respect to the Vehicles leased by it under this
Agreement; (ii) at any time and from time to time during regular business
hours, and with reasonable prior notice from the Lessor or the Trustee, permit
the Lessor or the Trustee (or such other person who may be designated from time
to time by the Lessor 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 Guarantor or such Lessee relating to the Vehicles
leased under this Agreement including, without limitation, with respect to
Repurchase Vehicles leased hereunder, in connection with the Trustee's
satisfaction of any requests of a Manufacturer performing an audit under its
Repurchase Program; and (iii) permit the Lessor or the Trustee (or such other
person who may be designated from time to time by the Lessor or the Trustee),
or its agents or representatives to visit the office and properties of the
Guarantor or such Lessee for the purpose of examining such materials, and to
discuss matters relating to the Vehicles leased hereunder or the Guarantor's or
such Lessee's performance under this Agreement with any of the officers or
employees of the Guarantor or such Lessee having knowledge of such matters.
31.3. Insurance. In addition to the obligations set forth in Section
5 hereof, the Guarantor, on behalf of each Team Lessee, and each Non-Team
Lessee, on its own behalf, shall maintain or cause to be maintained, with
financially sound and reputable insurers satisfactory to the Lessor, insurance
with respect to their respective properties and businesses 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, and the Guarantor, on behalf of each
Team Lessee, and each Non-Team Lessee, on its own
- 50 -
55
behalf, shall, from time to time upon the Lessor's or the Trustee's reasonable
request, deliver to the Lessor and Trustee, copies of certificates describing
all insurance then in effect. All self-insurance maintained by any member of
the Lessee Group shall be maintained in a financially prudent manner.
31.4. Repurchase Programs. With respect to each Repurchase Vehicle
leased by each Lessee (a) unless previously purchased by such Lessee pursuant
to this Agreement, turn in such Repurchase Vehicle to the relevant Manufacturer
within the Repurchase Period therefor, (b) dispose of such Repurchase Vehicle
under the applicable Repurchase Program according to its historical practice
and in accordance with the requirements of such Repurchase Program, and (c)
comply with all of its (and the Lessor's) obligations under the applicable
Repurchase Program.
31.5. Reporting Requirements. Furnish, or cause to be furnished to
the Lessor:
(i) Audit Report. (a) As soon as available and in any event
within one hundred ten days after the end of each fiscal year of the
Guarantor, a copy of the consolidated balance sheet of the Guarantor
and its Subsidiaries as at the end of such fiscal year, together with
the related statements of earnings, stockholders' equity and cash
flows for such fiscal year, prepared in reasonable detail and in
accordance with GAAP certified by independent certified public
accountants of recognized national standing as shall be selected by
the Guarantor; and (b) as soon as available and in any event within
one hundred ten days after the end of each fiscal year of any Non-Team
Lessee, a copy of the consolidated balance sheet of such Non-Team
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 certified by independent certified public
accountants of recognized national standing as shall be selected by
such Non- Team Lessee.
(ii) Quarterly Statements. (a) As soon as available, but in
any event within 45 days after the end of each fiscal quarter (except
the fourth fiscal quarter) of the Guarantor, copies of the unaudited
consolidated balance sheet of the Guarantor and its Subsidiaries as at
the end of such fiscal quarter and the related unaudited statements of
earnings, stockholders equity and cash flows for the portion of the
fiscal year through such fiscal quarter (and as to the statements of
earnings for such fiscal quarter) in each case setting forth in
comparative form the figures for the corresponding periods of the
previous fiscal year, prepared
- 51 -
56
in reasonable detail and in accordance with GAAP applied consistently
throughout the periods reflected therein and certified by the chief
financial or accounting officer of the Guarantor as presenting fairly
the financial condition and results of operations of the Guarantor and
its Subsidiaries (subject to normal year-end adjustments); and (b) as
soon as available, but in any event within 45 days after the end of
each fiscal quarter (except the fourth fiscal quarter) of any Non-Team
Lessee, copies of the unaudited consolidated balance sheet of such
Non-Team 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 such Non-Team Lessee as presenting
fairly the financial condition and results of operations of such
Non-Team Lessee and its Subsidiaries (subject to normal year-end
adjustments).
(iii) Lease Events of Default; Wind-Down Events. As soon as
possible but in any event within two Business Days after the Guarantor
or any Lessee has knowledge of the occurrence of any Lease Event of
Default, Potential Lease Event of Default, Manufacturer Event of
Default, Potential Manufacturer Event of Default, Lessee Partial
Wind-Down Event or Potential Lessee Partial Wind-Down Event, a written
statement of an authorized Officer describing such event and the
action that the Guarantor or a Lessee, as the case may be, proposes to
take with respect thereto;
(iv) Monthly Vehicle Statements. On or before the third
Business Day prior to each Due Date, a monthly vehicle statement
(each, a "Monthly Vehicle Statement") in a form acceptable to the
Lessor, which shall specify (i) the vehicle identification numbers
(the "VIN") for the Vehicles leased hereunder during the Related Month
by such Lessee, (ii) the Capitalized Cost for Vehicles that are
Manufacturer Acquired Vehicles or Auction Acquired Vehicles, the Net
Book Value at the time of acquisition of each Repurchase Vehicle that
is a Team Acquired Vehicle and the Non-Repurchase Vehicle Acquisition
Price for Non-Repurchase Vehicles that are Team Acquired Vehicles,
(iii) the Net Book Value of Repurchase Vehicles as of the end of the
Related Month, (iv) the Non-Repurchase Vehicle Value of Non-Repurchase
Vehicles as of the end of the Related Month, (v) the VINs for those
- 52 -
57
Vehicles that have been turned back to Manufacturers pursuant to the
applicable Repurchase Program during the Related Month and the
Repurchase Prices therefor and those Vehicles that have been delivered
to a designated auction site pursuant to the applicable Repurchase
Program and the Guaranteed Payments therefor, or that have been
otherwise sold during the Related Month, (vi) those Vehicles that have
become Casualties during the Related Month and their respective Net
Book Values or Non-Repurchase Vehicle Values, as applicable (as
calculated immediately prior to the event causing such Vehicles to
become Casualties), (vii) the amount of Disposition Proceeds in
respect of Repurchase Vehicles or Non-Repurchase Vehicles sold during
the Related Month, (viii) the Repurchase Prices received during the
Related Month and any Guaranteed Payments received pursuant to a
Repurchase Program during the Related Month, (ix) the aggregate
Depreciation Charges for all Vehicles continuing in the possession of
the Lessee, (x) the total amount of Monthly Base Rent, Monthly
Variable Rent, Monthly Supplemental Rent, Additional Base Rent and
Termination Payments being paid on such date, (xi) information with
respect to such Lessee necessary for the Servicer to compute the
Aggregate Non- Repurchase Asset Amount, the Aggregate Asset Amount and
the Aggregate Segregated Repurchase Asset Amount with respect to the
Series 1996-1 Notes as of the end of the Related Month, (xii)
information with respect to such Lessee necessary for the Servicer to
compute the Monthly Supplemental Rent for such Lessee with respect to
the Related Month, (xiii) any other charges owing from, and credits
due to, the Lessee submitting such Statement under this Agreement, and
(xiv) all prepayments of Rent received during the Related Month from
Guaranteed Payments, Repurchase Prices and Disposition Proceeds
received by the Lessor during the Related Month from the
Manufacturers, auctions and other Persons, as the case may be;
(v) 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, 1997, 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 to the Lessor, the Trustee and the Rating Agencies
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-Repurchase Vehicles (other
than Casualties) sold or otherwise disposed of during each Related
Month in such period and compared such calculations
- 53 -
58
of Disposition Proceeds with the corresponding amounts set forth in
the Daily Reports prepared by the Servicer pursuant to Section 4.4(a)
of the Indenture 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; and
(vi) Other. Promptly, from time to time, such other
information, documents, or reports respecting the Vehicles leased
under this Agreement or the condition or operations, financial or
otherwise, of the Guarantor or the Lessees as the Lessor or the
Trustee may from time to time reasonably request in order to protect
the interests of the Lessor or the Trustee under or as contemplated by
this Agreement or any other Related Document.
31.6. 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 with respect to which adequate reserves have been established, and
are being maintained, in accordance with GAAP if and so long as forfeiture of
any 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.
31.7. 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 Guarantor or such Lessee, as applicable.
31.8. Maintenance of Separate Existence. The Guarantor and each
Lessee acknowledges its receipt of a copy of that certain opinion letter issued
by Dechert Price & ▇▇▇▇▇▇, dated December __, 1996 and addressing the issue of
substantive consolidation as it may relate to the Guarantor, each Lessee and
the Lessor. The Guarantor and each Lessee hereby agrees to maintain in place
all policies and procedures, and take and continue to take all action,
described in the factual assumptions set forth in such opinion letter and
relating to such Person.
31.9. Trustee as Lienholder. Concurrently with each leasing of a
Vehicle under this Agreement, the Servicer shall indicate on its computer
records that the Trustee as assignee of the Lessor is the holder of a Lien on
such Vehicle pursuant to the terms of the Indenture.
- 54 -
59
31.10. Retitling. In connection with the acquisition by the Lessor
of Vehicles pursuant to Sections 2.1(b) and 2.1(d), the Lessee requesting the
acquisition of such Vehicle shall, within thirty (30) days of such acquisition,
complete the retitling process with respect to such Vehicle, naming the Lessor
as the owner of such Vehicle on the related Certificate of Title and noting
thereon the Trustee's security interest in such Vehicle; provided, however,
that such Lessee shall provide the Trustee with written notice of the
completion of such retitling process.
32. CERTAIN NEGATIVE COVENANTS. Until the expiration or termination
of this Agreement and thereafter until the obligations of each Lessee and the
Guarantor are paid in full, the Guarantor and each Lessee agrees that, unless
at any time the Lessor and the Trustee shall otherwise expressly consent in
writing, it will not (and, in the case of the Guarantor, will not permit any
Lessee to):
32.1. Mergers, Consolidations. Be a party to any merger or
consolidation, other than: (i) a merger or consolidation of any Subsidiary of
the Guarantor into or with the Guarantor (provided, however, that the Guarantor
is the surviving corporation) or any merger or consolidation of any Subsidiary
of the Guarantor with or into another Subsidiary of the Guarantor, and (ii) a
merger or consolidation of the Guarantor or any Subsidiary into or with another
entity if:
(a) the corporation formed by such consolidation or into or
with which the Guarantor or such Subsidiary is merged shall be a
corporation organized and existing under the laws of the United States
of America or any State or the District of Columbia, and, if the
Guarantor or such Subsidiary is not the surviving entity, shall
expressly assume, by an agreement supplement hereto executed and
delivered to the Trustee, the performance of every covenant and
obligation of the Guarantor or such Subsidiary hereunder and under
all other Related Documents;
(b) the Guarantor or such Subsidiary 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 32.1 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.
32.2. Other Agreements. Enter into any agreement containing any
provision which would be violated or breached by
- 55 -
60
the performance of its obligations hereunder or under any instrument or
document delivered or to be delivered by it hereunder or in connection
herewith.
32.3. 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 or the Trustee or the Secured Parties and the following
Liens to the extent such liens in the aggregate would not materially adversely
affect the interests of the Lessor or the Trustee or the Secured Parties under
this Agreement or the Indenture or the likelihood of payment of Rent hereunder
or the Notes thereunder (herein collectively called the "Permitted Liens"):
(i) Liens for current taxes not delinquent or for taxes being contested in good
faith and by appropriate proceedings, and with respect to which adequate
reserves have been established, and are being maintained, in accordance with
GAAP, (ii) Liens, including judgment liens, arising in the ordinary course of
business being contested in good faith and by appropriate proceedings, and with
respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP, (iii) Liens incurred in the ordinary
course of business in connection with worker's compensation, unemployment
insurance or other forms of governmental insurance or benefits, and (iv)
mechanics', materialmen's, landlords', warehousemen's and carriers' 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.
32.4. Use of Vehicles. Knowingly use or allow the Vehicles to be
used in any manner that would (i) make any Repurchase Vehicle ineligible for
repurchase, or for the guarantee by the related Manufacturer of the resale
price thereof, under an Eligible Repurchase Program (subject to the provisions
of Section 21 regarding Eligibility Waiver Events) or (ii) subject Vehicles to
confiscation.
33. BANKRUPTCY PETITION AGAINST LESSOR. The Guarantor and each
Lessee hereby covenants and agrees that, prior to the date which is one year
and one day after the payment in full of the Series 1996-1 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 Guarantor or any Lessee
takes action in violation of this Section 33, 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
- 56 -
61
by the Guarantor or any such Lessee against the Lessor or the commencement of
such action and raise the defense that the Guarantor or any such 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 counsel advises that it may
assert. The provisions of this Section 33 shall survive the termination of
this Agreement.
34. SUBMISSION TO JURISDICTION. The Lessor 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. For the purpose of any action
or proceeding instituted with respect to any such claim, the Guarantor and each
Lessee hereby irrevocably submits to the jurisdiction of such courts. Each
Lessee hereby irrevocably designates the Guarantor to receive for and on behalf
of such Lessee service of process in New York. The Guarantor and each 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 Guarantor
or such Lessee, as the case may be, 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 Trustee and the
Lessor to serve process in any other manner permitted by law or preclude the
Lessor 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
Guarantor and each Lessee hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may have 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 and any claim that any such suit, action
or proceeding brought in such a court has been brought in an inconvenient
forum.
35. 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 Guarantor and each Lessee and all
rights of the Lessor or the Trustee expressed herein
- 57 -
62
shall be in addition to and not in limitation of those provided by applicable
law or in any other written instrument or agreement.
36. 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.
37. NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission or
similar writing) and shall be given to such party, addressed to it, at its
address or telephone number set forth on the signature pages below, or at such
other address or telephone number as such party may hereafter specify for the
purpose by notice to the other party. In each case, a copy of all notices,
requests and other communications that are sent by any party hereunder shall be
sent to the Trustee and a copy of all notices, requests and other
communications that are sent by any Lessee or the Guarantor to the Guarantor or
any other Lessee that pertain to this Agreement shall be sent to the Lessor and
the Trustee. Copies of notices, requests and other communications delivered to
the Trustee and/or the Lessor pursuant to the foregoing sentence shall be sent
to the following addresses:
TRUSTEE: Bankers Trust Company
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust and Agency
Group/Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
LESSOR: Team Fleet Financing Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Norwalk
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Each such notice, request or communication shall be effective when received at
the address specified below. Copies of all notices must be sent by first class
mail promptly after transmission by facsimile.
- 58 -
63
38. LIABILITY. Each member of the Lessee Group shall be held jointly
and severally liable for all of the obligations of each other member of the
Lessee Group hereunder.
39. TITLE TO REPURCHASE PROGRAMS IN LESSOR. Each Lessee, by its
execution hereof, acknowledges and agrees that (i) the Lessor is the sole owner
and holder of all right, title and interest in and to the Repurchase Programs
and (ii) such Lessee has no right, title or interest in any Repurchase Program.
To confirm the foregoing, each Lessee, by its execution hereof, hereby assigns
and transfers to the Lessor any rights that such Lessee may have in respect of
any Repurchase Programs.
40. HEADINGS. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
41. 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.
42. EFFECTIVENESS. This Agreement shall become effective
concurrently with the issuance of the Series 1996-1 Notes.
- 59 -
64
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:
TEAM FLEET FINANCING CORPORATION
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman and Chief
Executive Officer
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Norwalk
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
LESSEES:
TRANEX RENTALS OF NEW YORK, INC.
By: ▇▇▇▇▇▇ ▇. Norwalk
---------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
CAPITAL CITY LEASING, INC.
By: ▇▇▇▇▇▇ ▇. Norwalk
----------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
- 60 -
65
▇▇▇-AL, INC.
By: ▇▇▇▇▇▇ ▇. Norwalk
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
WESTEAM ENTERPRISES, INC.
By: ▇▇▇▇▇▇ ▇. Norwalk
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
TEAM RENTAL OF PHILADELPHIA, INC.
By: ▇▇▇▇▇▇ ▇. Norwalk
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: Arrivals Road
Philadelphia Int'l Airport
Philadelphia, PA 19153
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
- 61 -
66
TEAM RENTAL OF PITTSBURGH, INC.
By: ▇▇▇▇▇▇ ▇. Norwalk
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: Car rental ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ #▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
TEAM RENTAL OF CINCINNATI, INC.
By: ▇▇▇▇▇▇ ▇. Norwalk
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
MacKAY CAR & TRUCK RENTAL, INC.
By: ▇▇▇▇▇▇ ▇. Norwalk
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telephone:
Telefax:
- 62 -
67
▇▇▇ ▇▇▇▇▇▇, INC.
By: ▇▇▇▇▇▇ ▇. Norwalk
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telephone:
Telefax:
TEAM RENTAL OF FT. ▇▇▇▇▇, INC.
By: ▇▇▇▇▇▇ ▇. Norwalk
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telephone:
Telefax:
RENTAL CAR RESOURCES, INC
By: ▇▇▇▇▇▇ ▇. Norwalk
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: ▇▇▇▇▇▇▇ Int'l APO
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telephone:
Telefax:
- 63 -
68
BRAC-OPCO, INC.
By: ▇▇▇▇▇▇ ▇. Norwalk
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telephone:
Telefax:
ARIZONA RENT-a-CAR SYSTEMS, INC.
By: ▇▇▇▇▇▇ ▇. Norwalk
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: 2114 East Mohave
Sky Harbor Int'l. ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telephone:
Telefax:
TEAM RENTAL OF ROCHESTER
By: ▇▇▇▇▇▇ ▇. Norwalk
--------------------------------
Name: ▇▇▇▇▇▇ ▇. Norwalk
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telephone:
Telefax:
- 64 -
69
GUARANTOR:
TEAM RENTAL GROUP, INC.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Financial Officer
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
- 65 -