1
EXHIBIT 10.23
U.S. $300,000,000
CREDIT AGREEMENT,
dated as of April 29, 1997,
among
BUDGET RENT A CAR CORPORATION,
as the Borrower,
BUDGET GROUP, INC.
(formerly known as TEAM RENTAL GROUP, INC.),
as a Guarantor,
and
CERTAIN FINANCIAL INSTITUTIONS,
as the Lenders,
CREDIT SUISSE FIRST BOSTON,
as a Co-Syndication Agent and the Administrative Agent,
and
NATIONSBANC CAPITAL MARKETS, INC.,
as a Co-Syndication Agent and the Documentation Agent.
Arranged By
CREDIT SUISSE FIRST BOSTON
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms.....................................................................3
1.2. Use of Defined Terms.............................................................41
1.3. Cross-References.................................................................41
1.4. Accounting and Financial Determinations..........................................42
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
2.1. Commitments......................................................................42
2.1.1. Loan Commitment..................................................................42
2.1.2. Commitment to Issue Letters of Credit............................................42
2.1.3. Lenders Not Permitted or Required To Make Loans or Issue Letters of
Credit Under Certain Circumstances............................................42
2.2. Reduction of Commitment Amounts..................................................43
2.2.1. Optional.........................................................................43
2.2.2. Mandatory........................................................................44
2.2.3. Corresponding Reductions.........................................................44
2.3. Borrowing Procedure..............................................................44
2.4. Continuation and Conversion Elections............................................45
2.5. Funding..........................................................................46
2.6. Loan Accounts....................................................................46
2.7. Special Provisions for Loans Denominated in Foreign Currencies...................47
2.7.1. Notification of Request..........................................................47
2.7.2. Availability.....................................................................47
2.7.3. Notification of Availability.....................................................47
2.7.4. Consequences of Non-Availability.................................................47
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments.......................................................47
3.2. Interest Provisions..............................................................50
3.2.1. Rates............................................................................50
3.2.2. Post-Maturity Rates..............................................................50
3.2.3. Payment Dates....................................................................51
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3.2.4. Interest Rate Determination......................................................51
3.3. Fees.............................................................................51
3.3.1. Commitment Fees..................................................................51
3.3.2. Arrangement Fees.................................................................52
3.3.3. Administrative Agent's Fee.......................................................52
3.3.4. Letter of Credit Face Amount Fee.................................................52
3.3.5. Letter of Credit Issuing Fee.....................................................52
3.3.6. Letter of Credit Administrative Fee..............................................52
ARTICLE IV
LETTERS OF CREDIT
4.1. Issuance Requests................................................................53
4.2. Issuances and Extensions.........................................................54
4.3. Expenses.........................................................................55
4.4. Other Lenders' Participation.....................................................55
4.5. Disbursements....................................................................56
4.6. Reimbursement....................................................................56
4.7. Deemed Disbursements.............................................................57
4.8. Nature of Reimbursement Obligations..............................................57
4.9. Indemnity........................................................................58
4.10. Borrower's Guaranty of Reimbursement Obligations of its Subsidiaries.............58
4.10.1. Guaranty.........................................................................58
4.10.2. Acceleration of Guaranty.........................................................59
4.10.3. Guaranty Absolute, etc...........................................................59
4.10.4. Reinstatement, etc...............................................................60
4.10.5. Waiver, etc......................................................................61
4.10.6. Postponement of Subrogation, etc.................................................61
4.10.7. Successors, Transferees and Assigns; Transfers of Notes, etc.....................62
4.11. No Bankruptcy Petition Against TFFC..............................................62
ARTICLE V
CERTAIN EUROCURRENCY RATE AND OTHER PROVISIONS
5.1. Eurocurrency Rate Lending Unlawful...............................................63
5.2. Deposits Unavailable.............................................................63
5.3. Increased Eurocurrency Loan Costs, etc...........................................63
5.4. Funding Losses...................................................................64
5.5. Increased Capital Costs..........................................................64
5.6. Taxes............................................................................65
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5.7. Payments, Computations, etc......................................................66
5.8. Sharing of Payments..............................................................66
5.9. Setoff...........................................................................67
5.10. Substitution of Lender...........................................................67
ARTICLE VI
CONDITIONS PRECEDENT
6.1. Initial Credit Extension.........................................................68
6.1.1. Resolutions, etc.................................................................68
6.1.2. Delivery of Notes................................................................69
6.1.3. Acquisition and Transaction Consummated..........................................69
6.1.4. Payment of Outstanding Indebtedness, etc.........................................69
6.1.5. Delivery of Financial Statements.................................................69
6.1.6. Consents, etc....................................................................70
6.1.7. No Material Adverse Change.......................................................70
6.1.8. Availability Under the Borrowing Base............................................70
6.1.9. Fees and Expenses of the Transaction.............................................70
6.1.10. Business Plan....................................................................70
6.1.11. Closing Date Certificates........................................................71
6.1.12. Guaranty.........................................................................71
6.1.13. Pledge Agreements................................................................71
6.1.14. Security Agreements..............................................................71
6.1.15. Borrowing Base Certificate.......................................................72
6.1.16. Issuance Request.................................................................72
6.1.17. Opinions of Counsel..............................................................72
6.1.18. Closing Fees, Expenses, etc......................................................73
6.2. All Credit Extensions............................................................73
6.2.1. Compliance with Warranties, No Default, etc......................................73
6.2.2. Credit Request...................................................................73
6.2.3. Satisfactory Legal Form..........................................................74
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1. Organization, etc................................................................74
7.2. Due Authorization, Non-Contravention, etc........................................75
7.3. Government Approval, Regulation, etc.............................................75
7.4. Validity, etc....................................................................75
7.5. Financial Information; Absence of Undisclosed Liabilities........................76
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Section Page
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7.6. No Material Adverse Change; Absence of Undisclosed Liabilities...................76
7.7. Litigation, Labor Controversies, etc.............................................76
7.8. Subsidiaries.....................................................................77
7.9. Ownership of Properties..........................................................77
7.10. Taxes............................................................................77
7.11. Pension and Welfare Plans........................................................77
7.12. Environmental Warranties.........................................................77
7.13. Intellectual Property............................................................79
7.14. Regulations G, U and X...........................................................80
7.15. Accuracy of Information..........................................................80
7.16. Stock Purchase Agreements and Senior Note Purchase Agreements....................80
7.17. Senior Indebtedness, etc.........................................................80
ARTICLE VIII
COVENANTS
8.1. Affirmative Covenants............................................................81
8.1.1. Financial Information, Reports, Notices, etc.....................................81
8.1.2. Compliance with Laws, Material Agreements, etc...................................83
8.1.3. Maintenance of Properties........................................................84
8.1.4. Insurance........................................................................84
8.1.5. Books and Records................................................................84
8.1.6. Environmental Covenant...........................................................85
8.1.7. Use of Proceeds..................................................................85
8.1.8. Foreign Subsidiaries as of the Closing Date......................................86
8.1.9. Future Subsidiaries..............................................................87
8.2. Negative Covenants...............................................................88
8.2.1. Business Activities..............................................................88
8.2.2. Indebtedness.....................................................................88
8.2.3. Liens............................................................................91
8.2.4. Financial Condition..............................................................92
8.2.5. Investments......................................................................94
8.2.6. Restricted Payments, etc.........................................................95
8.2.7. Capital Expenditures, etc........................................................98
8.2.8. Take or Pay Contracts............................................................98
8.2.9. Consolidation, Merger, etc.......................................................98
8.2.10. Asset Dispositions, etc..........................................................98
8.2.11. Modification of Certain Agreements...............................................99
8.2.12. Transactions with Affiliates.....................................................99
8.2.13. Negative Pledges, Restrictive Agreements, etc...................................100
8.2.14. Ability to Amend; Restrictive Agreements........................................100
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8.2.15. Accounting Changes..............................................................101
8.2.16. Tax Sharing Arrangements........................................................101
8.2.17. Activities of the Parent........................................................101
ARTICLE IX
EVENTS OF DEFAULT
9.1. Listing of Events of Default....................................................101
9.1.1. Non-Payment of Obligations......................................................101
9.1.2. Breach of Warranty..............................................................102
9.1.3. Non-Performance of Certain Covenants and Obligations............................102
9.1.4. Non-Performance of Other Covenants and Obligations..............................102
9.1.5. Default on Other Indebtedness...................................................102
9.1.6. Judgments.......................................................................102
9.1.7. Pension Plans...................................................................103
9.1.8. Change in Control...............................................................103
9.1.9. Bankruptcy, Insolvency, etc.....................................................103
9.1.10. Impairment of Security, etc.....................................................104
9.2. Action if Bankruptcy............................................................104
9.3. Action if Other Event of Default................................................104
ARTICLE X
PARENT GUARANTY
10.1. Guaranty........................................................................105
10.2. Acceleration of Parent Guaranty.................................................105
10.3. Guaranty Absolute, etc..........................................................105
10.4. Reinstatement, etc..............................................................107
10.5. Waiver, etc.....................................................................107
10.6. Postponement of Subrogation, etc................................................107
10.7. Successors, Transferees and Assigns; Transfers of Notes, etc....................108
ARTICLE XI
THE AGENTS
11.1. Actions.........................................................................108
11.2. Funding Reliance, etc...........................................................109
11.3. Exculpation.....................................................................109
11.4. Successor.......................................................................109
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Section Page
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11.5. Credit Extensions by Agents.....................................................110
11.6. Credit Decisions................................................................110
11.7. Copies, etc.....................................................................110
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1. Waivers, Amendments, etc........................................................111
12.2. Notices.........................................................................112
12.3. Payment of Costs and Expenses...................................................112
12.4. Indemnification.................................................................113
12.5. Survival........................................................................114
12.6. Severability....................................................................114
12.7. Headings........................................................................114
12.8. Execution in Counterparts, Effectiveness, etc...................................114
12.9. Governing Law; Entire Agreement.................................................114
12.10. Successors and Assigns..........................................................114
12.11. Sale and Transfer of Loans and Notes; Participations in Loans and Notes.........115
12.11.1. Assignments.....................................................................115
12.11.2. Participations..................................................................116
12.12. Other Transactions..............................................................117
12.13. Independence of Covenants.......................................................117
12.14. Judgment Currency...............................................................117
12.15. Forum Selection and Consent to Jurisdiction.....................................118
12.16. Waiver of Jury Trial............................................................119
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SCHEDULE I - Disclosure Schedule
SCHEDULE II - Lender Information
SCHEDULE III - Deposit Banks
SCHEDULE IV - Subordinated Intercompany Note Terms
SCHEDULE V - Scheduled Letters of Credit
EXHIBIT A - Form of Revolving Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Compliance Certificate
EXHIBIT E - Form of Borrowing Base Certificate
EXHIBIT F-1 - Form of Parent Pledge Agreement
EXHIBIT F-2 - Form of Borrower Pledge Agreement
EXHIBIT F-3 - Form of Subsidiary Pledge Agreement
EXHIBIT G-1 - Form of Borrower Security Agreement
EXHIBIT G-2 - Form of Subsidiary Security Agreement
EXHIBIT G-3 - Form of Parent Security Agreement
EXHIBIT H - Form of Subsidiary Guaranty
EXHIBIT I-1 - Form of Borrower Closing Date Certificate
EXHIBIT I-2 - Form of Parent Closing Date Certificate
EXHIBIT J - Form of Lender Assignment Agreement
EXHIBIT K-1 - Form of Opinion of Special Counsel to the Obligors
EXHIBIT K-2 - Form of Opinion of Counsel to the Borrower
EXHIBIT K-3 - Form of Opinion of Counsel to the Parent
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of April 29, 1997, among BUDGET RENT A
CAR CORPORATION, a Delaware corporation (the "Borrower"), BUDGET GROUP, INC.
(formerly known as Team Rental Group, Inc.), a Delaware corporation (the
"Parent"), the various financial institutions as are or may become parties
hereto (collectively, the "Lenders"), NATIONSBANC CAPITAL MARKETS, INC.
("NationsBanc"), as a co-syndication agent (in such capacity, a "Co-Syndication
Agent") for the Lenders and as the documentation agent (in such capacity, the
"Documentation Agent") for the Lenders, and CREDIT SUISSE FIRST BOSTON ("Credit
Suisse First Boston"), as a co-syndication agent (in such capacity, a "Co-
Syndication Agent" and, together with NationsBanc, collectively, the
"Co-Syndication Agents") for the Lenders, as administrative agent (in such
capacity, the "Administrative Agent") for the Lenders and as the arranger (in
such capacity, the "Arranger").
W I T N E S S E T H:
WHEREAS, the Borrower and the Parent are engaged directly and through
their various Subsidiaries (capitalized terms used in these recitals to have the
meanings set forth in Section 1.1 below) in the business of (a) renting
worldwide for general use passenger automobiles, vans and light trucks, (b)
selling in the United States late model automobiles and (c) franchising the
foregoing business to other Persons;
WHEREAS, pursuant to (a) the Stock Purchase Agreement, dated as of
January 13, 1997, between the Borrower and the Parent (as so originally executed
and delivered, the "Budget Stock Purchase Agreement"), (b) the Preferred Stock
Purchase Agreement, dated as of January 13, 1997, between Ford Motor Company and
the Parent (as so originally executed and delivered, the "Preferred Stock
Purchase Agreement") and (c) the Stock Purchase Agreement, dated as of January
13, 1997, between ▇▇▇▇ ▇. ▇▇▇▇▇ and the Parent (as so originally executed and
delivered, the "Common Stock Purchase Agreement", and, together with the Budget
Stock Purchase Agreement and the Preferred Stock Purchase Agreement, the "Stock
Purchase Agreements"), the Parent intends to acquire the Capital Stock of the
Borrower and purchase certain Indebtedness of the Borrower for approximately
$275,000,000 in cash and the issuance of shares of a new series of non-dividend
paying, non-voting convertible preferred stock of the Parent (the
"Acquisition");
WHEREAS, in connection with the Acquisition, (a) the Parent intends to
issue shares of its Class A Common Stock pursuant to a registered public
offering for gross cash proceeds of at least $150,000,000, which proceeds it
intends to use to fund, in part, the Acquisition (the "Equity Offering"), (b)
the Parent intends to issue its Series B Notes pursuant to a private offering
for gross cash proceeds of not greater than $50,000,000, which proceeds it
intends to use to fund, in part, the Acquisition (the "Convertible Subordinated
Debt Offering"), (c) the Borrower intends to issue its Senior Notes pursuant to
a private offering for gross cash proceeds of not greater than $170,000,000 (the
"Senior Debt Offering", and, together with the Convertible Subordinated Debt
Offering, the "Debt Offerings"), (d) the Parent intends to arrange for the
refinancing of approximately $850,500,000 of indebtedness under various vehicle
financing facilities of the Borrower and its Subsidiaries pursuant to, among
other things, a rental car asset-backed
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commercial paper program (the "CP Program") through a special purpose,
bankruptcy remote, Wholly Owned Subsidiary of the Borrower ("Budget Funding
Corporation") and (e) the Parent intends, pursuant to capital contributions,
stock transfers, mergers or otherwise, to cause its existing businesses to be
conducted after the Acquisition by the Borrower or through Subsidiaries of the
Borrower (including existing Subsidiaries of the Parent that become Subsidiaries
of the Borrower) (the "Corporate Restructuring", and, together with the Equity
Offering, the Debt Offerings, the CP Program and the transactions relating
thereto (including transactions relating to the Corporate Restructuring), the
"Transaction");
WHEREAS, in connection with the Transaction, the Borrower desires to
obtain Commitments from the Lenders pursuant to which
(a) Loans will be made to the Borrower from time to time prior
to the Loan Commitment Termination Date; and
(b) Letters of Credit will be issued by the Issuer for the
account of the Borrower and under the several responsibilities of the
Lenders from time to time prior to the Letter of Credit Commitment
Termination Date;
in maximum aggregate principal amount for Loans (after converting all Foreign
Currency Loans to the Equivalent thereof in Dollars) at any one time outstanding
not to exceed in the aggregate $100,000,000 (provided, however, that the maximum
aggregate principal amount for Loans denominated in Foreign Currencies at any
one time outstanding shall not exceed in the aggregate the Equivalent of
$40,000,000) and in a maximum aggregate Stated Amount for Letters of Credit
outstanding, together with the aggregate of all Loans (after converting all
Foreign Currency Loans to the Equivalent thereof in Dollars) outstanding at any
one time not to exceed in the aggregate $300,000,000;
WHEREAS, the Lenders and the Issuer are willing, on the terms and
subject to the conditions hereinafter set forth (including Article VI), to
extend such Commitments, make such Loans to the Borrower and issue and
participate in such Letters of Credit; and
WHEREAS, the proceeds
(a) of such Loans will be used for general corporate purposes
of the Borrower and its Subsidiaries; and
(b) of such Letters of Credit will be used by the Borrower and
its Subsidiaries
(i) as credit and/or liquidity enhancement for
commercial paper or similar fleet financing programs
(including the CP Program), so long as the aggregate Stated
Amount of all Letters of Credit issued for such purpose (the
"Enhancement Letters of Credit") and outstanding at one time
does not exceed $225,000,000 and
(ii) for other general corporate purposes (the
"General Letters of Credit");
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NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"ABR Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Account Debtor" is defined in clause (d) of the definition of
"Eligible Receivable".
"Account Party" means (a) the Borrower, (b) in the case of the CP
Enhancement Letter of Credit, Budget Funding Corporation, and (c) any Subsidiary
Guarantor or SPC for the account of which a Letter of Credit is issued in
accordance with Article IV.
"Acquisition" is defined in the second recital.
"Acquisition Date" means the date that the Acquisition is consummated.
"Adjusted Debt" means, at any time, the sum of (a) Non-Vehicle Debt at
such time plus (b) the maximum amount available for drawing under each letter of
credit constituting Indebtedness of the Parent or any of its Subsidiaries and
which provides credit enhancement or liquidity enhancement to a commercial paper
or other fleet financing program (including Enhancement Letters of Credit),
whether or not drawn and whether or not any conditions to drawing can then be
met at such time.
"Adjusted EBITDA" means, for any applicable period, the excess of
(a) EBITDA for such period over
(b) to the extent added in arriving at such EBITDA, the sum of
(i) the aggregate amount of depreciation in respect of Vehicles during
such period plus (ii) Vehicle Interest Expense during such period;
provided, however, that, in the event any such period would include a
Pre-Acquisition Period, Adjusted EBITDA for such Pre-Acquisition Period would
equal the sum of (i) in the event such Pre-Acquisition Period would include the
Fiscal Quarter ending December 31, 1996, $13,164,000 plus (ii) Adjusted EBITDA
for the remainder of such Pre-Acquisition Period (or, if
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the preceding clause (i) is not applicable, for the entirety of such
Pre-Acquisition Period) determined on a pro forma basis after giving effect to
consummation of the Transaction in a manner consistent with the pro forma
financial statements set forth in the Registration Statement.
"Adjusted Leverage Ratio" means, at the end of any Fiscal Quarter, the
ratio of
(a) Net Adjusted Debt as at the last day of such Fiscal
Quarter;
to
(b) Adjusted EBITDA for the four consecutive Fiscal Quarters
ending on the last day of such Fiscal Quarter.
"Administrative Agent" is defined in the preamble and includes each
other Person as shall have subsequently been appointed as the successor
Administrative Agent pursuant to Section 11.4.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or
managing general partners; or
(b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agents" means the Co-Syndication Agents, the Documentation Agent and
the Administrative Agent.
"Aggregate Interest Expense" is defined in clause (a) of the definition
of "Non-Vehicle Interest Expense".
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"Alternate Base Rate" means, on any date and with respect to all ABR
Loans, a fluctuating rate of interest per annum equal to the higher of
(a) the rate of interest most recently established by Credit
Suisse First Boston at its principal office in New York, New York as
its prime rate for Dollar loans; and
(b) the Federal Funds Rate most recently determined by the
Administrative Agent plus 1/2%.
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If for any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Rate for any reason, including the inability of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition of "Federal Funds Rate", the Alternate Base Rate shall
be determined without regard to clause (b) of the first sentence of this
definition until the circumstances giving rise to such inability no longer
exist. The Alternate Base Rate is not necessarily intended to be the lowest rate
of interest determined by the Credit Suisse First Boston in connection with
extensions of credit. Changes in the rate of interest on that portion of any
Loans maintained as ABR Loans will take effect simultaneously with each change
in the Alternate Base Rate. The Administrative Agent will give notice promptly
to the Borrower and the Lenders of changes in the Alternate Base Rate.
"Alternate Currency" means, collectively, Australian Dollars and New
Zealand Dollars; provided, however, that neither Australian Dollars nor New
Zealand Dollars shall constitute an Alternate Currency if any Lender is unable
to make Foreign Currency Loans in such currency without suffering any economic,
legal or regulatory burden in its sole and absolute discretion.
"Applicable Commitment Fee" means, as of any date, a per annum fee on
the average daily unused portion of the Commitment Amount determined pursuant to
the following pricing grid (expressed in basis points), subject to the
provisions of this definition set forth below:
PRICING GRID
APPLICABLE
ADJUSTED LEVERAGE RATIO COMMITMENT FEE
----------------------- --------------
X >= 2.0 37.5
X >= 1.0, but < 2.0 30.0
X < 1.0 25.0
The Applicable Commitment Fee on the average daily unused portion of
the Commitment Amount, at any time from and including the Effective Date to (but
not including) the date which is 180 days after the Effective Date, shall be
37.5 basis points per annum at such time.
The Applicable Commitment Fee, at any time from and after the date
which is 180 days after the Effective Date, on the average daily unused portion
of the Commitment Amount, shall be determined pursuant to the Pricing Grid above
at such time. At all times that the Applicable Commitment Fee is determined by
reference to the Pricing Grid, "X" refers to the Adjusted Leverage Ratio, which
ratio shall be determined based upon the Compliance Certificate delivered
pursuant to clause (c) of Section 8.1.1 and shall remain in effect until such
time as the next Compliance Certificate shall be delivered (and, at such time,
the Applicable Commitment Fee shall change based on such next Compliance
Certificate); provided, however, that, if any such Compliance Certificate is not
delivered to the Administrative Agent on or prior to the date required pursuant
to clause (c) of Section 8.1.1, the Applicable Commitment Fee from and
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including the date on which such Compliance Certificate was required to be
delivered to but not including the actual date of delivery of such Compliance
Certificate shall conclusively equal the highest Applicable Commitment Fee.
"Applicable Margin" means, with respect to any Loan of any type, as of
any date, the rate per annum determined pursuant to the following pricing grid
(expressed in basis points), subject to the provisions of this definition set
forth below:
PRICING GRID
EUROCURRENCY LOAN ABR LOAN
ADJUSTED LEVERAGE RATIO APPLICABLE MARGIN APPLICABLE MARGIN
----------------------- ----------------- -----------------
X >= 3.5 225 125
X >= 3.0, but < 3.5 200 100
X >= 2.0, but < 3.0 175 75
X >= 1.0, but < 2.0 150 50
X < 1.0 125 25
The Applicable Margin, at any time from and including the Effective
Date until the date which is 180 days after the Effective Date, for the Loans
shall be 175 basis points as to Eurocurrency Loans and 75 basis points as to ABR
Loans at such time.
The Applicable Margin, at any time from and after the date which is 180
days after the Effective Date, for Loans, shall be determined pursuant to the
Pricing Grid above at such time. At all times that the Applicable Margin is
determined by reference to the Pricing Grid, "X" refers to the Adjusted Leverage
Ratio, which ratio shall be determined based upon the Compliance Certificate
delivered pursuant to clause (c) of Section 8.1.1 and shall remain in effect
until such time as the next Compliance Certificate shall be delivered (and, at
such time, the Applicable Margin shall change based on such next Compliance
Certificate); provided, however, that, if any such Compliance Certificate is not
delivered to the Administrative Agent on or prior to the date required pursuant
to clause (c) of Section 8.1.1, the Applicable Margin for Loans from and
including the date on which such Compliance Certificate was required to be
delivered to but not including the actual date of delivery of such Compliance
Certificate shall conclusively equal the highest Applicable Margin for Loans set
forth above.
"Arranger" is defined in the preamble.
"Assignee Lender" is defined in Section 12.11.1.
"Australian Dollars" and the symbol "A$" means the lawful currency of
Australia.
"Authorized Officer" means, relative to the Borrower and any other
Obligor, those of its officers or managing members (in the case of a limited
liability company) whose signatures and
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incumbency shall have been certified to the Administrative Agent and the Lenders
pursuant to Section 6.1.1.
"Available" means, in respect of any Foreign Currency and any Lender,
that such Foreign Currency is, at the relevant time, readily available to such
Lender as deposits in the London or other applicable interbank market in the
relevant amount and for the relevant term, is freely convertible into Dollars
and is freely transferable for the purposes of this Agreement, but if,
notwithstanding that each of the foregoing tests is satisfied
(a) such Foreign Currency is, under the then current
legislation or regulations of the country of such Foreign Currency (or
under the policy of the central bank of such country) or of the Bank of
England or the F.R.S. Board, not permitted to be used for the purposes
of this Agreement; or
(b) there is no, or only insignificant, investor demand for
the making of advances having an interest period equivalent to that for
the Eurocurrency Loan denominated in an Foreign Currency which the
Borrower has requested be made; or
(c) there are no policy or other reasons which make it
undesirable or impractical for a Lender to make a Eurocurrency Loan
denominated in such Foreign Currency available as determined by such
Lender in its reasonable discretion;
then such Foreign Currency may be treated by any Lender as not being Available.
"Available Currency" means, collectively, Dollars, French Francs,
Sterling, Swiss Francs and each Alternate Currency.
"Base Indenture" means the Amended and Restated Base Indenture, dated
as of December 1, 1996, among TFFC, the Parent and Bankers Trust Company, as in
effect on the date hereof, subject to such modifications thereto as may be
agreed to in the Base Indenture Supplement or by the Required Lenders.
"Base Indenture Supplement" means any supplement to the Base Indenture,
which supplement is (a) entered into for the purpose of providing Vehicle
financing to TFFC pursuant to the issuance by TFFC of a series of Variable
Funding Rental Car Asset Backed Notes to the Borrower, which series of notes the
Borrower would purchase with proceeds of Loans under this Agreement and which
would constitute a "Segregated Series of Notes" (as more fully described
in the Base Indenture) and would be pledged (together with all security
therefor) to the Administrative Agent for the benefit of the Lenders and (b)
together with such documents as the Administrative Agent and the Supermajority
Lenders deem appropriate, approved in writing by the Supermajority Lenders.
"Borrower" is defined in the preamble.
-7-
16
"Borrower Closing Date Certificate" means the closing date certificate
executed and delivered by the Borrower pursuant to Section 6.1.11, substantially
in the form of Exhibit I-1 hereto.
"Borrower Pledge Agreement" means the Pledge Agreement executed and
delivered by the Borrower pursuant to Section 6.1.13, substantially in the form
of Exhibit F-2 hereto, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Borrower Security Agreement" means the Security Agreement executed and
delivered by the Borrower pursuant to Section 6.1.14, substantially in the form
of Exhibit G-1 hereto, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Borrowing" means the Loans of the same type and, in the case of
Eurocurrency Loans, denominated in the same Available Currency and having the
same Interest Period made by all Lenders on the same Business Day and pursuant
to the same Borrowing Request in accordance with Section 2.1.
"Borrowing Base Amount" means, at any time, an amount equal to the sum
of:
(a) 85% of Eligible Receivables at such time;
plus
(b) 100% of Eligible Cash and Cash Equivalent Investments at
such time;
plus
(c) 100% of Eligible Repurchase Vehicles at such time;
plus
(d) 85% of Eligible Non-Repurchase Vehicles at such time.
"Borrowing Base Certificate" means a certificate duly completed and
executed by an Authorized Signatory of the Borrower, substantially in the form
of Exhibit E hereto; provided, however, that the Administrative Agent may
(a) at any time specify changes to such form for the purpose
of monitoring or clarifying the Borrower's compliance with the
Borrowing Base Amount; and
(b) from time to time review computations of the Borrowing
Base Amount submitted by the Borrower pursuant to Section 6.1.15 and
clause (f) of Section 8.1.1 and, if in the Administrative Agent's
reasonable opinion, the computation in any Borrowing Base Certificate
of the Borrowing Base Amount shall not have been computed in accordance
with its definition, the Administrative Agent shall have the right to
adjust
-8-
17
such computation so long as written notice of such adjustment is
provided to the Borrower.
"Borrowing Request" means a Loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit
B-1 hereto.
"Budget Funding Corporation" is defined in the third recital.
"Business Acquisition" means the acquisition, by purchase or otherwise,
of all or substantially all of the assets (or any part of the assets
constituting all or substantially all of a business or line of business) of any
Person, whether such acquisition is direct or indirect, including through the
acquisition of the business of, or Capital Stock of, such Person.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in New
York, New York; and
(b) relative to the making, continuing, converting, prepaying
or repaying of any Eurocurrency Loans, any day (i) on which dealings in
the relevant currency are carried on in the London interbank market and
(ii) in the case of Eurocurrency Loans denominated in an Available
Currency other than Dollars or Sterling, on which banks in the country
for which such Available Currency is the lawful currency are not
authorized or required to be closed.
"Canadian Dollars" and the symbol "Cdn$" means the lawful currency of
Canada.
"Capital Expenditures" means, for any period, the sum of
(a) the aggregate amount of all expenditures of the Borrower
and its Subsidiaries for fixed or capital assets made during such
period which, in accordance with GAAP, would be classified as capital
expenditures; and
(b) the aggregate amount of all Capitalized Lease Liabilities
incurred during such period.
"Capital Stock" means with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock or equity, whether now outstanding or issued after the
date hereof, including all common stock, preferred stock, partnership interests
and member interests.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrower or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and, with respect to any such leasing or similar
-9-
18
arrangement, the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a premium or
a penalty.
"Cash Equivalent Investment" means, at any time, High Quality
Investments maturing not more than 270 days after such time.
"Casualty Event" means the damage, destruction or condemnation, as the
case may be, of property of the Borrower, the Parent or any of their respective
Subsidiaries.
"Casualty Proceeds" means, with respect to any Casualty Event, the
amount of any insurance proceeds or condemnation awards received by or on behalf
of the Borrower, the Parent or any of their respective Subsidiaries in
connection with such Casualty Event, but excluding any proceeds or awards
required to be paid to a creditor (other than the Lenders) which holds a first-
priority Lien permitted by Section 8.2.3 on the property which is the subject of
such Casualty Event (including Vehicles securing Vehicle Debt).
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means
(a) any Person other than the Parent shall own any Capital
Stock of the Borrower or otherwise have the ability to elect any
members of the board of directors of the Borrower;
(b) a "person" or "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Exchange Act), excluding ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or any Wholly Owned Subsidiary or
Related Person of any one or more of them or Ford Motor Company or any
Wholly Owned Subsidiary of Ford Motor Company, (i) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
more than 30% of the total then outstanding voting power of the Voting
Stock of the Parent or (ii) has the right or the ability by voting
right, contract or otherwise to elect or designate for election a
majority of the board of directors of the Parent;
(c) during any period of twenty-four months, individuals who
at the beginning of such period constituted the board of directors of
the Parent (together with any new directors whose election by such
board of directors, or whose nomination for election by the
shareholders of the Parent, as the case may be, was approved by a vote
of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute 50% or more of the board of directors then in
office;
-10-
19
(d) any Person or two or more Persons acting in concert (in
any such case, excluding ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ or any Wholly Owned Subsidiary of any one or more of them)
shall have acquired by contract or otherwise, or shall have entered
into a contract or arrangement that, upon consummation thereof, will
result in its or their acquisition of the power to direct or control,
directly or indirectly, the management or policies of the Borrower or
the Parent; or
(e) a "Change of Control" under the Senior Notes, the Series A
Notes or the Series B Notes shall have occurred.
"Closing Date" means the date on which Credit Extensions are first made
hereunder.
"Code" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
"Commitment" means, as the context may require, a Lender's Loan
Commitment and/or Letter of Credit Commitment.
"Commitment Amount" means, on any date, $300,000,000, as such amount
may be reduced from time to time pursuant to Section 2.2.
"Commitment Termination Event" means
(a) the occurrence of any Default described in clauses (a)
through (d) of Section 9.1.9; or
(b) the occurrence and continuance of any other Event of
Default and either
(i) the declaration of all or any portion of the
Loans to be due and payable pursuant to Section 9.3, or
(ii) the giving of notice by the Administrative
Agent, acting at the direction of the Required Lenders, to the
Borrower that the Commitments have been terminated.
"Compliance Certificate" means, as the context may require, a
certificate duly completed and executed by an Authorized Officer of the Parent
or the Borrower, as the case may be, substantially in the form of Exhibit D
hereto, together with such changes thereto as the Administrative Agent may from
time to time reasonably request for the purpose of monitoring the Borrower's
compliance with the financial covenants contained herein.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments
-11-
20
in the course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of any Person's
obligation under any Contingent Liability shall (subject to any limitation set
forth therein) be deemed to be the outstanding principal amount (or maximum
principal amount, if larger) of the debt, obligation or other liability
guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Parent, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"Convertible Subordinated Debt Offering" is defined in the third
recital.
"Corporate Restructuring" is defined in the third recital.
"Co-Syndication Agent" and "Co-Syndication Agents" are defined in the
preamble and includes each other Person as shall have subsequently been
appointed as a successor Co- Syndication Agent pursuant to Section 11.4.
"CP Enhancement Letter of Credit" means the Letter of Credit, dated as
of the date hereof, of Credit Suisse First Boston, issued pursuant to the terms
hereof and of the CP Enhancement Letter of Credit Application and Agreement.
"CP Enhancement Letter of Credit Application and Agreement" means the
Letter of Credit Reimbursement Agreement, dated as of the date hereof, among the
Borrower, Budget Funding Corporation, the Issuer and the Lessees from time to
time designated thereunder.
"CP Program" is defined in the third recital.
"Credit Extension" means and includes
(a) the advancing of any Loans by the Lenders in connection
with a Borrowing, and
(b) any issuance or extension by the Issuer of a Letter of
Credit.
"Credit Extension Request" means, as the context may require, any
Borrowing Request or Issuance Request.
"Credit Suisse First Boston" is defined in the preamble.
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21
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Demand Capitalization Note" means the promissory note dated as of the
date hereof, issued by the Borrower to TFFC.
"Disbursement Date" is defined in Section 4.5.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Administrative Agent and
the Required Lenders.
"Distribution" means, with respect to any Person, any dividend or
distribution (in cash, property or obligations) on any shares of any class of
Capital Stock (now or hereafter outstanding) of such Person or on any warrants,
options or other rights with respect to any shares of any class of Capital Stock
(now or hereafter outstanding) of such Person, other than dividends or
distributions payable in the common stock (other than Redeemable Capital Stock)
of such Person or warrants or options to purchase such common stock or split-ups
or reclassifications of its Capital Stock into additional or other shares of
such common stock.
"Dollar" and the symbol "$" mean the lawful currency of the United
States.
"Domestic Office" means, relative to any Lender, the office of such
Lender designated as such opposite its name in Schedule II hereto or designated
in the Lender Assignment Agreement or such other office of a Lender (or any
successor or assign of such Lender) within the United States as may be
designated from time to time by notice from such Lender, as the case may be, to
each other Person party hereto. A Lender may have separate Domestic Offices for
purposes of making, maintaining or continuing ABR Loans.
"EBITDA" means, for any applicable period, the sum for such period of
(a) Net Income (excluding therefrom (i) the effect of any
non-cash gains (or non-cash losses), (ii) any write-up in the value of
any asset, (iii) the income (or losses) of any Person (other than the
Borrower or any other Subsidiary of the Borrower) in which the
Borrower, the Parent or any of their respective Subsidiaries has an
ownership interest, except to the extent of the amount of dividends or
other distributions actually paid in cash to (or the amount of
contributions to capital actually made in cash by) the Borrower, the
Parent or any of their respective Subsidiaries by (or in) such Person
during such period, (iv) except where the provisions hereof expressly
require a pro forma determination, the income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary of the Parent or is
merged into or consolidated with the Parent or any of its Subsidiaries
or the date that such other Person's assets are acquired by the Parent
or any of its Subsidiaries and (v) the income of any Subsidiary of the
Parent to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary of that income is not at the
time permitted by operation of the terms of its charter or any
agreement, instrument,
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22
judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary)
plus
(b) to the extent deducted in arriving at such Net Income, the
sum, without duplication, of (i) Aggregate Interest Expense, plus (ii)
taxes computed on the basis of income plus (iii) the aggregate amount
of depreciation and amortization of tangible and intangible assets;
provided, however, that in the event any such period would include a
Pre-Acquisition Period, EBITDA for such Pre-Acquisition Period would equal the
sum of (i) in the event such Pre-Acquisition Period would include the Fiscal
Quarter ending December 31, 1996, $120,617,000 plus (ii) EBITDA for the
remainder of such Pre-Acquisition Period (or, if the preceding clause (i) is not
applicable, for the entirety of such Pre-Acquisition Period) determined on a pro
forma basis after giving effect to consummation of the Transaction in a manner
consistent with the pro forma financial statements set forth in the Registration
Statement.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 12.8.
"Eligible Assignee" means a lending institution at the time of any
proposed assignment having total assets in excess of $1,000,000,000 which is
organized under the laws of the United States, or any state thereof or any other
country which is a member of the OECD, or a political subdivision of any such
country (provided that such bank is acting through a branch or agency located in
the country in which it is organized, another country which is also a member of
the OECD or in the Cayman Islands) and long-term unsecured debt ratings of BBB-
(or better) from S&P and Baa3 (or better) from ▇▇▇▇▇'▇; provided, however, that
neither the Borrower, the Parent nor any of their respective Affiliates shall
qualify as an Eligible Assignee.
"Eligible Cash and Cash Equivalent Investments" means, at any time of
determination thereof, cash or Cash Equivalent Investments of the Borrower or
any Subsidiary of the Borrower that is a Subsidiary Guarantor as to which each
of the following requirements has been fulfilled to the reasonable satisfaction
of the Administrative Agent (which requirements shall be deemed to have been
fulfilled to the reasonable satisfaction of the Administrative Agent unless the
Administrative Agent shall have otherwise notified the Borrower in writing):
(a) such cash or Cash Equivalent Investments are held free and
clear of all Liens, other than the Liens in favor of the Administrative
Agent for the benefit of the Lenders, by the Administrative Agent or a
third party acting solely as agent for the Administrative Agent
pursuant to a written agreement (provided that such third party is (i)
a Federal Reserve bank, (ii) a bank which is a member of the Federal
Deposit Insurance Corporation and which has combined capital, surplus
and undivided profits of not less than $250,000,000 or (iii) a bank
approved in writing for such purposes by the Required Lenders);
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23
(b) the Administrative Agent has a security interest in such
cash or Cash Equivalent Investments, which security interest is, under
applicable law, (i) legal, valid and binding and (ii) perfected and
first priority (or, if such applicable law would not characterize
security interests in any deposit account in which the holder of such
security interest has rights senior to any other Person that obtains a
judicial lien on, or execution against, such deposit account or obtains
a lien thereon granted by the holder of such deposit account as
"perfected" or "first priority", the Administrative Agent has rights
with respect to such cash or Cash Equivalent Investments that is senior
to any such Person);
(c) the Borrower or such Subsidiary has the full and
unqualified right to assign and ▇▇▇▇▇ ▇ ▇▇▇▇ in such cash or Cash
Equivalent Investments to the Administrative Agent;
(d) such cash or Cash Equivalent Investment is in Dollars (or
in Canadian Dollars, to the extent such cash or Cash Equivalent
Investments in Canadian Dollars does not exceed Cdn $3,000,000);
(e) such cash or Cash Equivalent Investments is held in an
account subject to a Deposit Account Agreement (as defined in the
Borrower Security Agreement); and
(f) if such cash or Cash Equivalent Investment is subject to
any dispute, setoff, counterclaim or other claim or defense on the part
of the obligor thereunder or the party holding such asset, the portion
of such cash or Cash Equivalent Investment so subject shall be excluded
from Eligible Cash and Cash Equivalent Investments;
provided, however, that cash or Cash Equivalent Investments that would otherwise
be Eligible Cash and Cash Equivalent Investments but for the requirement in
clause (b)(ii) above or the requirement in clause (e) above shall be deemed to
be Eligible Cash and Cash Equivalent Investments to the extent such cash or Cash
Equivalent Investments does not exceed in the aggregate $10,000,000; provided
further, however, an additional $3,000,000 of such cash or Cash Equivalent
Investments shall be deemed to be Eligible Cash and Cash Equivalent Investments
until May 30, 1997, to the extent such cash or Cash Equivalent Investments are
held in a bank listed in Schedule III hereto and such bank and the Borrower (or
the applicable Subsidiary) are exercising their best efforts to provide the
Administrative Agent with such perfected and first priority security interest.
"Eligible Non-Repurchase Vehicles" means the aggregate Non-Repurchase
Vehicle Value (as defined in the Base Indenture) of Non-Repurchase Vehicles (as
defined in the Base Indenture) that are financed pursuant to the Base Indenture
Supplement.
"Eligible Receivable" means, at any time of determination thereof, any
Receivable of the Borrower or any Subsidiary of the Borrower that is a
Subsidiary Guarantor (other than an Excluded Receivable) as to which each of the
following requirements has been fulfilled to the reasonable satisfaction of the
Administrative Agent (which requirements shall be deemed to have been fulfilled
to the reasonable satisfaction of the Administrative Agent unless the
Administrative Agent shall have otherwise notified the Borrower in writing):
-15-
24
(a) the Borrower or such Subsidiary has lawful and absolute
title to such Receivable, free and clear of all Liens other than the
Liens in favor of the Administrative Agent for the benefit of the
Lenders;
(b) the Administrative Agent has a security interest in such
Receivable, which security interest is legal, valid, binding, perfected
and first priority under the U.C.C. or under the analogous secured
transactions law of any Canadian province; provided, however, that
(i) the aggregate amount of such Receivables as to
which the Administrative Agent has a security interest under
Canadian law may not exceed 3% of the total amount of all
Eligible Receivables at the time of such determination (such
Receivables that do not exceed such 3% threshold being herein
referred to as "Canadian Eligible Receivables");
(ii) no Receivable as to which any United States
federal or state governmental agency or instrumentality is the
Account Debtor may be an Eligible Receivable, except (A) to
the extent the Borrower or such Subsidiary has complied with
the Assignment of Claims Act of 1940, as amended (31 U.S.C.
ss. 3727; 41 U.S.C. ss. 15), by delivering to the
Administrative Agent a notice of assignment in favor of the
Administrative Agent under such Act and in compliance with
applicable provisions of 31 C.F.R. ss. 7-103.8 and 41 C.F.R.
ss. 1-30.7, or with similar state law (collectively, for
purposes of this definition, the "Registration Requirements")
or (B) unless the Administrative Agent requests the Borrower
or such Subsidiary to comply with the Registration
Requirements with respect to the Receivables described in this
subclause (B) and the Borrower or such Subsidiary does not
exercise their best efforts to so comply, to the extent the
aggregate amount of such Receivables would not exceed 3% of
the total amount of all Eligible Receivables at the time of
such determination; and
(iii) no Receivable as to which any other government
or agency of such government (including any foreign
governmental authority or agency) is the Account Debtor may be
an Eligible Receivable;
(c) the Borrower or such Subsidiary has the full and
unqualified right to assign and ▇▇▇▇▇ ▇ ▇▇▇▇ in such Receivable to the
Administrative Agent for the benefit of the Lenders;
(d) such Receivable is payable in Dollars (or, in the case of
Canadian Eligible Receivables, Dollars or Canadian Dollars) and is a
legal, valid, binding and enforceable obligation of the Person who is
obligated under such Receivable (the "Account Debtor");
(e) without limiting the effect of the preceding clause (d),
such Receivable complies with all requirements of applicable law,
including the Federal Consumer Credit Protection Act, the Federal Truth
in Lending Act and Regulation Z of the F.R.S. Board;
-16-
25
(f) if such Account is subject to any dispute, setoff,
counterclaim or other claim or defense on the part of the Account
Debtor denying liability under such Receivable, the portion of such
Account so subject shall be excluded from Eligible Receivables;
(g) such Receivable (i) evidences monetary obligations and
(ii) is evidenced by (A) an invoice or statement rendered to the
Account Debtor or (B) an obligation of the Account Debtor to make
royalty payments to the Borrower or such Subsidiary pursuant to a
franchise agreement that is in full force and effect;
(h) such Receivable is a bona fide Receivable which arose in
the ordinary course of business, and with respect to which,
(i) in the case of a Receivable arising from the
sale of goods, such goods have been shipped or delivered to
and not rejected by the Account Debtor, such Receivable was
created as a result of a sale on an absolute basis and not on
a consignment, approval or sale-and-return basis and all other
actions necessary to create a binding obligation on the part
of the Account Debtor for such Receivable have been taken, and
(ii) in the case of a Receivable relating to the
rental of a Vehicle or the sale of services, such rental or
services have been completed or performed and not rejected by
the Account Debtor and all other actions necessary to create a
binding obligation on the part of the Account Debtor have been
taken;
(i) with respect to such Receivable, the Account Debtor is not
(i) an Affiliate of the Borrower, the Parent or any
of their respective Subsidiaries,
(ii) organized or located in a jurisdiction other
than the United States (except to the extent an Account Debtor
with respect to a Canadian Eligible Receivable is located in
Canada), or
(iii) the subject of any reorganization, bankruptcy,
receivership, custodianship or insolvency or any other
condition of the type described in clauses (b) through (d) of
Section 9.1.9;
(j) such Receivable is not outstanding more than 90 days past
the due date with respect thereto;
(k) no payment with respect to such Receivable made by check
has been returned for insufficient funds;
(l) such Receivable has not been placed with a lawyer or other
agent for collection;
-17-
26
(m) if the Borrower, the Parent or any of their respective
Subsidiaries is indebted to such Account Debtor and such Account Debtor
has a contractual right of setoff with respect to such indebtedness,
unless the Borrower, the Parent or the relevant Subsidiary (as the case
may be), on the one hand, and such Account Debtor, on the other hand,
have entered into an agreement whereby the Account Debtor is prohibited
from exercising any right of setoff with respect to the Receivables of
the Borrower and its Subsidiaries, Eligible Receivables shall exclude
an amount equal to the amount of such indebtedness; and
(n) such Receivable has such other characteristics or criteria
as the Administrative Agent, in its reasonable discretion, may specify
in writing to the Borrower from time to time.
Notwithstanding the foregoing, (i) all Receivables of any single Account Debtor
(unless otherwise agreed to by the Required Lenders) and its Affiliates which,
in the aggregate, exceed 5% of the total amount of all Eligible Receivables at
the time of such determination, shall be deemed not to be Eligible Receivables
to the extent of such excess, (ii) the total amount of Eligible Receivables
shall be reduced by an amount equal to the excess, if any, of (x) the aggregate
amount payable by the Borrower, the Parent and their respective Subsidiaries to
Account Debtors that are franchisees of the Borrower, the Parent or any of their
respective Subsidiaries at the time of such determination over (y) 5% of such
total amount of Eligible Receivables, and (iii) in determining the amount of
Receivables to be included as Eligible Receivables, the face amount of
Receivables shall be reduced by (A) the amount of all accrued and actual
returns, discounts, claims, credits or credits pending, charges, price
adjustments, commissions or other amounts due to any Person engaged by the
Borrower or the applicable Subsidiary of the Borrower in the rental or sale of
Vehicles, freight or finance charges or other allowances (including any amount
that the Borrower or such Subsidiary, as applicable, may be obligated to rebate
to a customer pursuant to the terms of any agreement or understanding (written
or oral) or that the Borrower or such Subsidiary, as applicable, established as
a reserve therefor (and the Borrower agrees that any such reserve will in no
event be less than the reserve that would be so established consistent with past
practice or in accordance with GAAP)) and (B) the aggregate amount of all cash
received in respect of Receivables but not yet applied by the Borrower or such
Subsidiary to reduce the amount of the Receivables.
"Eligible Repurchase Vehicles" means the Net Book Value (as defined in
the Base Indenture) of Repurchase Vehicles (as defined in the Base Indenture)
that are financed pursuant to the Base Indenture Supplement.
"Enhancement Letter of Credit Application and Agreement" means, with
respect to each Enhancement Letter of Credit, the application and agreement
therefor completed by the account party or parties in respect of such
Enhancement Letter of Credit and accepted by the Issuer.
"Enhancement Letters of Credit" is defined in clause (b)(i) of the
sixth recital.
"Enhancement Letters of Credit Commitment Amount" means, on any date,
$225,000,000, as such amount may be reduced from time to time pursuant to
Section 2.2.
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"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"Equity Offering" is defined in the third recital.
"Equivalent" means, on any date of determination, (a) in Dollars of any
currency, the equivalent in Dollars of such currency determined by using the
quoted spot rate at which Credit Suisse First Boston's principal office in New
York City, New York, offers to exchange Dollars for such currency in New York
City, New York, at the open of business on such date and (b) in any currency of
Dollars, the equivalent in such currency of Dollars determined by using the
quoted spot rate at which Credit Suisse First Boston's principal office in New
York City, New York, offers to exchange such currency for Dollars in New York
City, New York, at the open of business on such date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections thereto.
"Eurocurrency Loan" means a Loan bearing interest, at all times during
an Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to the Eurocurrency Rate (Reserve Adjusted).
"Eurocurrency Office" means, relative to any Lender, the office of such
Lender designated as such opposite its name in Schedule II hereto or designated
in the Lender Assignment Agreement or such other office of a Lender (or any
successor or assign of such Lender) as designated from time to time by notice
from such Lender to the Borrower and the Administrative Agent, whether or not
outside the United States, which shall be making or maintaining Eurocurrency
Loans of such Lender hereunder.
"Eurocurrency Rate" means, relative to any Interest Period, with
respect to Eurocurrency Loans denominated in any Available Currency, an interest
rate per annum equal to:
(a) the rate determined by the Administrative Agent at
approximately 11:00 a.m. (London, England time) two Business Days prior
to the beginning of such Interest Period for delivery on the first day
of such Interest Period by reference to the British Bankers'
Association Interest Settlement Rates for deposits in such Available
Currency (as set forth by any service selected by the Administrative
Agent which has been nominated by the British Bankers' Association as
an authorized information vendor for the purpose of displaying such
rates) for a period equal to such Interest Period; or
(b) if such rate cannot be determined by the Administrative
Agent in accordance with clause (a) above, the average (rounded upward
to the nearest whole multiple of 1/100 of 1% per annum, if such average
is not such a multiple) of the rates per annum at which deposits in
such Available Currency are offered by the Eurocurrency Office of
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each of the Reference Lenders in London, England to prime banks in the
London interbank market at or about 11:00 a.m. (London, England time)
two Business Days before the first day of such Interest Period in an
amount substantially equal to such Reference Lender's Eurocurrency Loan
comprising part of such Borrowing to be outstanding during such
Interest Period and for a period equal to such Interest Period;
provided that any determination of the Eurocurrency Rate for any
Interest Period pursuant to this clause (b) shall be determined by the
Administrative Agent on the basis of applicable rates furnished to and
received by the Administrative Agent from the Reference Lenders two
Business Days before the first day of such Interest Period, subject,
however, to the provisions of Section 3.2.4.
"Eurocurrency Rate (Reserve Adjusted)" means, relative to any Loan to
be made, continued or maintained as, or converted into, a Eurocurrency Loan for
any Interest Period, arate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined pursuant to the following formula:
Eurocurrency Rate = Eurocurrency Rate
(Reserve Adjusted) 1.00 - Eurocurrency Reserve Percentage
The Eurocurrency Rate (Reserve Adjusted) for any Interest Period for
Eurocurrency Loans will be determined by the Administrative Agent on the basis
of the Eurocurrency Reserve Percentage in effect two Business Days before the
first day of such Interest Period.
"Eurocurrency Reserve Percentage" means, relative to any Interest
Period for Eurocurrency Loans, the reserve percentage (expressed as a decimal)
equal to the maximum aggregate reserve requirements (including all basic,
emergency, supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of and including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
"Event of Default" is defined in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Receivable" means any Receivable of the Borrower or any
Subsidiary of the Borrower that is (a) subject to a Lien which is not a Lien in
favor of the Administrative Agent for the benefit of the Lenders and (b) (i) an
obligation payable to TFFC in respect of Vehicles leased or financed pursuant to
a Lease (as defined in the Base Indenture), (ii) an obligation of a manufacturer
of a Vehicle securing Vehicle Debt pursuant to a Repurchase Program (as defined
in the Base Indenture), (iii) an obligation of an insurer or governmental entity
with respect to a Casualty Event in respect of a Vehicle securing Vehicle Debt
or (iv) an obligation of a Person in respect of the purchase price of a Vehicle
securing Vehicle Debt.
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"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by Credit Suisse First Boston from three federal
funds brokers of recognized standing selected by it.
"Fee Letter" is defined in Section 3.3.2.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on December 31; references to a Fiscal Year with a number corresponding
to any calendar year (e.g., the "1997 Fiscal Year") refer to the Fiscal Year
ending on the December 31 occurring during such calendar year.
"Foreign Currency" means, collectively, French Francs, Sterling, Swiss
Francs and each Alternate Currency.
"Foreign Currency Loan" means any Loan made in a Foreign Currency.
"Foreign Currency Loan Commitment Amount" means, on any date,
$40,000,000, as such amount may be reduced from time to time pursuant to Section
2.2.
"Foreign Pledge Agreement" means any supplemental pledge agreement
governed by the laws of a jurisdiction other than the United States or a state
thereof executed and delivered by the Borrower or any of its Subsidiaries
pursuant to the terms of this Agreement, in form and substance satisfactory to
the Administrative Agent, as may be necessary or desirable under the laws of
organization or incorporation of a Subsidiary to further protect or perfect the
Lien on and security interest in any Pledged Shares and/or Pledged Notes (as
such terms are defined in the Pledge Agreements).
"Foreign Subsidiary" means any Subsidiary of the Borrower (a) which is
organized under the laws of any jurisdiction outside of the United States of
America, (b) which conducts the major portion of its business outside of the
United States of America and (c) all or substantially all of the property and
assets of which are located outside of the United States of America.
"Franchisee Acquisition" means any Business Acquisition in respect of a
Person that was a franchisee of the Borrower, the Parent or any of their
respective Subsidiaries on the Effective Date, so long as the consideration paid
in connection with such Business Acquisition consisted
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solely of Capital Stock of the Parent issued in connection therewith and the
assumption of Vehicle Debt (if any).
"French Franc" and the symbol "Fr" means the lawful currency of the
Republic of France.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in Section 1.4.
"General Letters of Credit" is defined in clause (b)(ii) of the sixth
recital.
"Guarantor" means, collectively, the Parent and each Subsidiary
Guarantor.
"Guaranty" means, as the context may require, the Parent Guaranty or
the Subsidiary Guaranty.
"Guaranteed Obligations" is defined in Section 4.10.1.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended; or
(c) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material or substance (including any petroleum product)
within the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards
of conduct concerning any hazardous, toxic or dangerous waste,
substance or material, all as amended.
"Hedging Agreements" means, collectively, currency exchange agreements,
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements, and all other agreements or arrangements designed to protect
a Person against fluctuations in interest rates or currency exchange rates.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under Hedging Agreements.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
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"High Quality Investments" means
(a) U.S. Government Obligations;
(b) participation certificates (excluding strip mortgage
securities that are purchased at prices exceeding their principal
amounts) and senior debt obligations of the Federal Home Loan Mortgage
Corporation, consolidated system wide bonds and notes of the Farm
Credit System, senior debt obligations and mortgage-backed securities
(excluding stripped mortgage securities which are purchased at prices
exceeding their principal amounts) of the Federal Mortgage Association
which, in the case of mortgage-backed securities, are rated at least AA
by S&P and Aa by Moody's, senior debt obligations (excluding securities
that have no fixed value and/or whose terms do not promise a fixed
dollar amount at maturity or call date) of the Student Loan Marketing
Association and debt obligations of the Resolution Funding Corp.
(collectively, "Agency Obligations");
(c) direct obligations of any state of the United States or
any subdivision or agency thereof whose short-term unsecured general
obligation debt has ratings from S&P of at least A-1 and Moody's of at
least P-1 or any obligation that has ratings from S&P and Moody's at
least equivalent to A-1 and P-1, respectively, and which is fully and
unconditionally guaranteed by any state, subdivision or agency whose
short term, unsecured general obligation debt has ratings from S&P and
Moody's at least equivalent to A-1 and P-1, respectively;
(d) commercial paper maturing in not more than 270 days which
is issued by a corporation (other than an Affiliate of any Obligor) and
having ratings from S&P and Moody's at least equivalent to A-1 and P-1,
respectively;
(e) deposits, federal funds or bankers acceptances (maturing
in not more than 365 days) of any domestic bank (including a branch
office of a foreign bank which branch office is located in the United
States, provided that the Administrative Agent shall have received a
legal opinion or opinions to the effect that full and timely payment of
such deposit or similar obligation is enforceable against the principal
office or any branch of such bank), which:
(i) has an unsecured, uninsured and unguaranteed
obligation which has ratings from S&P and Moody's at least
equivalent to A-1 and P-1, respectively, or
(ii) is the lead bank of a parent bank holding
company with an uninsured, unsecured and unguaranteed
obligation meeting the rating requirements in the preceding
clause (i);
(f) deposits of any bank or savings and loan association which
has combined capital, surplus and undivided profits of not less than
$100 million, provided such deposits are fully insured by the Federal
Deposit Insurance Corporation, the Banking Insurance Fund or the
Savings Association Insurance Fund;
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(g) investments in a money-market fund which may be a 12b-1
fund as registered under the Investment Company Act of 1940 and is
rated at least the equivalent of AAm or AAm-G by S&P and P-1 by
Moody's;
(h) repurchase agreements with a term of six months or less
with any institution having short-term, unsecured debt rated at least
the equivalent of A-1 by S&P and P-1 by Moody's;
(i) repurchase agreements collateralized by U.S. Government
Obligations or Agency Obligations (the "Collateral Securities") with
any registered broker-dealer which is under the jurisdiction of the
Securities Investors Protection Corp. or any commercial bank, if such
broker-dealer or bank has uninsured, unsecured and unguaranteed debt
rated at least the equivalent of A-1 by S&P and P-1 by Moody's,
provided that:
(A) a master repurchase agreement or other specific
written repurchase agreement governs the transaction;
(B) the Collateral Securities are held free and clear
of any other Lien by the Administrative Agent or an
independent third party acting solely as agent for the
Administrative Agent, provided that any such third party (1)
is (x) a Federal Reserve bank, (y) a bank which is a member of
the Federal Deposit Insurance Corporation and which has
combined capital, surplus and undivided profits of not less
that $250 million, or (z) a bank approved in writing for such
purpose by the Required Lenders, and (2) certifies in writing
to the Administrative Agent (or delivers to the Administrative
Agent a written opinion of counsel to such third party) that
such third party holds the Collateral Securities free and
clear of any Lien, as agent for the Administrative Agent;
(C) a perfected first security interest under the
Uniform Commercial Code is created in, or book entry
procedures prescribed at 31 C.F.R. 306.1 et seq. or 31 C.F.R.
350.0 et seq. are followed with respect to, the Collateral
Securities for the benefit of the Administrative Agent;
(D) such repurchase agreement has a term of 30 days
or less;
(E) such repurchase agreement matures (or permits the
Administrative Agent to withdraw all or any portion of the
invested funds) at least ten (10) days (or other appropriate
liquidation period) prior to each Quarterly Payment Date;
(F) the fair market value of the Collateral
Securities in relation to the amount of the repurchase
obligation, including principal and interest, is equal to at
least one hundred and three percent (103%) (as determined by
the Borrower and certified by the chief financial or
accounting Authorized Officer of the Borrower to the
Administrative Agent in a certificate in form and substance
satisfactory to the Administrative Agent); and
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(G) the Administrative Agent obtains an opinion of
counsel to such broker-dealer or bank to the effect that such
repurchase agreement is a legal, valid, binding and
enforceable agreement of such broker-dealer or bank (and, in
the case of a bank which is a branch of a foreign bank, of
such foreign bank) in accordance with its terms; and
(j) any other similar investments that are requested by the
Borrower to be classified as "High Quality Investments" and consented
to by the Administrative Agent in its sole and absolute discretion.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of the Borrower, the Parent or any other Obligor, any qualification or exception
to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause the Borrower, the Parent or such other Obligor to be
in default of any of its obligations under Section 8.2.4.
"including" and "include" means including without limiting the
generality of any description preceding such term, and, for purposes of this
Agreement and each other Loan Document, the parties hereto agree that the rule
of ejusdem generis shall not be applicable to limit a general statement, which
is followed by or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP, recorded as
Capitalized Lease Liabilities;
(d) all other items which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of
such Person as of the date at which Indebtedness is to be determined;
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(e) net liabilities of such Person under all Hedging
Obligations;
(f) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services, and indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being
purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited
in recourse;
(g) Redeemable Capital Stock; and
(h) all Contingent Liabilities of such Person in respect of
any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer to the extent there is recourse to such
Person with respect to such Indebtedness.
"Indemnified Liabilities" is defined in Section 12.4.
"Indemnified Parties" is defined in Section 12.4.
"Interest Coverage Ratio" means, at the end of any Fiscal Quarter, the
ratio of
(a) Adjusted EBITDA for the four consecutive Fiscal Quarters
ending on the last day of such Fiscal Quarter
to
(b) Non-Vehicle Interest Expense for the four consecutive
Fiscal Quarters ending on the last day of such Fiscal Quarter.
"Interest Period" means, relative to any Eurocurrency Loan, the period
beginning on (and including) the date on which such Eurocurrency Loan is made or
continued as, or converted into, a Eurocurrency Loan pursuant to Section 2.3 or
2.4 and ending on (but excluding) the day which numerically corresponds to such
date one, two, three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month) as the
Borrower may select in its relevant notice pursuant to Section 2.3 or 2.4;
provided, however, that
(a) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than seven different dates;
(b) Interest Periods commencing on the same date for Loans
comprising part of the same Borrowing shall be of the same duration;
(c) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
following Business Day (unless, if such
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Interest Period applies to Eurocurrency Loans, such next following
Business Day is the first Business Day of a calendar month, in which
case such Interest Period shall end on the Business Day next preceding
such numerically corresponding day); and
(d) no Interest Period may end later than the Stated Maturity
Date.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other
Person (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business);
(b) any Contingent Liability of such Person; and
(c) any ownership or similar interest held by such Person in
any other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
"Issuance Request" means a request and certificate duly executed by the
chief executive, accounting or financial Authorized Officer of the Borrower, in
substantially the form of Exhibit B-2 attached hereto (with such changes thereto
as may be agreed upon from time to time by the Administrative Agent and the
Borrower).
"Issuer" means Credit Suisse First Boston or any of its affiliates,
and/or any other Lender having short-term credit ratings of A-1 (or better) from
S&P and P-1 from Moody's which has agreed to issue one or more Letters of Credit
at the request of the Administrative Agent (which shall, at the Borrower's
request, notify the Borrower from time to time of the identity of such other
Lender).
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit J hereto.
"Lenders" is defined in the preamble and, in addition, shall include
any commercial bank or other financial institution that becomes a Lender
pursuant to Section 12.11.1.
"Letter of Credit" means, collectively, Enhancement Letters of Credit
and General Letters of Credit, which letters of credit, in each case, shall be
irrevocable standby letters of credit in such form as may be requested by the
Borrower and approved by the Issuer.
"Letter of Credit Commitment" means, relative to any Lender, such
Lender's obligation to issue (in the case of the Issuer) or participate in (in
the case of all Lenders) Letters of Credit pursuant to Section 2.1.2.
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"Letter of Credit Commitment Termination Date" means the earliest of
(a) May 30, 1997 (if the initial Credit Extension has not
occurred on or prior to such date);
(b) the first Business Day prior to the Stated Maturity Date;
(c) the date on which the Commitment Amount is terminated in
full or reduced to zero pursuant to Section 2.2; and
(d) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (c) or (d) above, the
Letter of Credit Commitments shall terminate automatically and without any
further action.
"Letter of Credit Outstandings" means, at any time, an amount equal to
the sum of
(a) the aggregate Stated Amount at such time of all Letters of
Credit then outstanding and undrawn (as such aggregate Stated Amount
shall be adjusted, from time to time, as a result of drawings, the
issuance of Letters of Credit, or otherwise);
plus
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"Leverage Ratio" means, at the end of any Fiscal Quarter, the ratio of
(a) Adjusted Debt as at the last day of such Fiscal Quarter
to
(b) Adjusted EBITDA for the four consecutive Fiscal Quarters
ending on the last day of such Fiscal Quarter.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever, to secure payment of a debt or
performance of an obligation.
"Liquidity Facility" means the Liquidity Agreement, dated as of the
date hereof, among Budget Funding Corporation, the lenders party thereto and
Credit Suisse First Boston, as the Liquidity Agent for such lenders, as the same
may be amended, supplemented, amended and restated, replaced or otherwise
modified from time to time in accordance with the terms hereof.
"Liquidity Obligation" is defined in Section 4.5.
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"Loan" is defined in Section 2.1.1.
"Loan Commitment" means, relative to any Lender, such Lender's
obligation to make Loans pursuant to Section 2.1.1.
"Loan Commitment Amount" means, on any date, $100,000,000, as such
amount may be reduced from time to time pursuant to Section 2.2.
"Loan Commitment Termination Date" means the earliest of
(a) May 30, 1997 (if the initial Credit Extension has not
occurred on or prior to such date);
(b) the Stated Maturity Date;
(c) the date on which the Loan Commitment Amount is terminated
in full or reduced to zero pursuant to Section 2.2; and
(d) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (c) or (d) above, the Loan
Commitments shall terminate automatically and without any further action.
"Loan Document" means this Agreement, the Notes, the Pledge Agreements,
the Security Agreements, the Subsidiary Guaranty, the Letters of Credit, the
Enhancement Letter of Credit Application and Agreements, the Foreign Pledge
Agreements, Deposit Account Agreements (as defined in the Security Agreements)
and each other agreement, certificate, document or instrument delivered in
connection with this Agreement and such other agreements, whether or not
specifically mentioned herein or therein.
"LOC Liquidity Disbursement" means, with respect to any Enhancement
Letter of Credit, any drawing thereunder to the extent such drawing is for the
purpose of providing liquidity support to Budget Funding Corporation or another
SPC which has issued highly-rated commercial paper in connection with the
financing of Vehicles, including any LOC Liquidity Disbursement (as defined in
the CP Enhancement Letter of Credit Application and Agreement) under the CP
Enhancement Letter of Credit and the portion of any LOC Termination Disbursement
(as defined in the CP Enhancement Letter of Credit Application and Agreement)
allocable to Budget Funding Corporation.
"local time" means
(a) relative to matters in respect of Foreign Currency Loans
denominated in Australian Dollars, Sydney, Australia time;
(b) relative to matters in respect of Foreign Currency Loans
denominated in New Zealand Dollars, Wellington, New Zealand time;
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(c) relative to matters in respect of Foreign Currency Loans
denominated in French Francs, Paris, France time;
(d) relative to matters in respect of Foreign Currency Loans
denominated in Swiss Francs, Zurich, Switzerland time;
(e) relative to matters in respect of Foreign Currency Loans
denominated in Sterling, London, England time; and
(f) relative to any matter not set forth in clauses (a)
through (e) above, New York City, New York time.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"NationsBanc" is defined in the preamble.
"Net Adjusted Debt" means, at any time, the excess of
(a) Adjusted Debt at such time
over
(b) the amount obtained by taking the average of unrestricted
cash of the Borrower at such time (including the aggregate amount of
Eligible Cash and Cash Equivalents of the Borrower that is included in
the Borrowing Base Amount at such time) and the amount of such
unrestricted cash as of the last Business Day of each of the preceding
two calendar months.
"Net Disposition Proceeds" means the excess of
(a) the gross cash proceeds received by the Borrower, the
Parent or any of their respective Subsidiaries from any sale, transfer
or conveyance of assets permitted pursuant to clause (c) of Section
8.2.10 excluding any such sale, transfer or conveyance permitted
pursuant to clause (a) of Section 8.2.10 (collectively referred to
herein for purposes of this definition as a "permitted disposition")
and any cash payments received in respect of promissory notes or other
non-cash consideration delivered to the Borrower, the Parent or such
Subsidiary in respect of any permitted disposition.
over
(b) the sum of
(i) all reasonable and customary fees and expenses
with respect to legal, investment banking, brokerage and
accounting and other professional fees, sales commissions and
disbursements actually incurred in connection with such
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permitted disposition which have not been paid (other than in
the case of reasonable out-of-pocket expenses) to Affiliates
of the Borrower or the Parent;
plus
(ii) all taxes and other governmental costs and
expenses actually paid or estimated by the Borrower, the
Parent or such Subsidiary (in good faith) to be payable in
cash in connection with such permitted disposition;
plus
(iii) payments made by the Borrower, the Parent or
such Subsidiary to retire Indebtedness (other than the Loans)
of the Borrower, the Parent or such Subsidiary where payment
of such Indebtedness is required in connection with such
permitted disposition;
provided, however, that if, after the payment of all taxes with respect to such
permitted disposition, the amount of estimated taxes, if any, pursuant to clause
(b)(ii) above exceeded the tax amount actually paid in respect of such permitted
disposition, the Commitment Amount shall be immediately and automatically
reduced by an amount equal to the aggregate amount of such excess.
"Net Equity Proceeds" means, with respect to the sale or issuance by
the Borrower, the Parent or any of their respective Subsidiaries to any Person
(other than the Parent, the Borrower or any of their respective Subsidiaries) of
any Capital Stock, other than pursuant to the Equity Offering, or any warrants
or options with respect to such Capital Stock or the exercise of any such
warrants or options, the excess of:
(a) the gross cash proceeds received by the Borrower, the
Parent or such Subsidiary from such sale, exercise or issuance (other
than proceeds received with respect to employee incentive stock options
or deferred stock purchase plans),
over
(b) all reasonable and customary fees and expenses with
respect to underwriting commissions and legal, investment banking,
brokerage and accounting and other professional fees, sales commissions
and disbursements actually incurred in connection with such sale or
issuance or exercise which have not (other than in the case of
reasonable out-of-pocket expenses) been paid to Affiliates of the
Borrower or the Parent in connection therewith.
"Net Income" means, for any applicable period, the aggregate of all
amounts which, in accordance with GAAP, would be included as net income (or net
loss) on a consolidated statement of income of the Parent and its Subsidiaries
for such period; provided, however, that, in the event any such period would
include a Pre-Acquisition Period, Net Income for such Pre-Acquisition Period
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would equal the sum of (i) in the event such Pre-Acquisition Period would
include the Fiscal Quarter ending December 31, 1996, ($1,682,000) plus (ii) Net
Income for the remainder of such Pre-Acquisition Period (or, if the preceding
clause (i) is not applicable, for the entirety of such Pre-Acquisition Period)
determined on a pro forma basis after giving effect to consummation of the
Transaction in a manner consistent with the pro forma financial statements set
forth in the Registration Statement.
"Net Issuance Proceeds" means, as to any issuance of indebtedness for
borrowed money by the Borrower, the Parent or any of their respective
Subsidiaries, the excess of:
(a) the gross cash proceeds received by the Borrower, the
Parent or such Subsidiary from such issuance,
over
(b) all reasonable and customary fees and expenses with
respect to underwriting commissions and legal, investment banking,
brokerage and accounting and other professional fees, sales commissions
and disbursements actually incurred in connection with such issuance
which have not (other than in the case of reasonable out-of-pocket
expenses) been paid to Affiliates of the Borrower or the Parent in
connection therewith.
"Net Worth" means, with respect to any Person at any date, on a
consolidated basis for such Person and its Subsidiaries, the excess of:
(a) the sum of capital stock taken at par value, capital
surplus and retained earnings (or accumulated deficit) of such Person
at such date;
over
(b) treasury stock of such Person and, to the extent included
in the preceding clause (a), minority interests in Subsidiaries of such
Person at such date.
"New Zealand Dollars" and the symbol "NZ$" mean the lawful currency of
New Zealand.
"Non-Material Subsidiary" means any Subsidiary of the Borrower that
(a) accounted for no more than 1/2 of 1% of consolidated
revenues of the Parent and its Subsidiaries or 1/2 of 1% of
consolidated earnings of the Parent and its Subsidiaries before
interest and taxes, in each case for the four consecutive Fiscal
Quarters of the Parent ending on the last day of the most recently
completed Fiscal Quarter with respect to which, pursuant to Section
8.1.1, financial statements have been, or are required to have been,
delivered by the Borrower or the Parent to the Administrative Agent,
and
(b) has assets which represent no more than 1/2 of 1% of the
consolidated assets of the Parent and its Subsidiaries as of the last
day of the last Fiscal Quarter of the most recently completed Fiscal
Quarter with respect to which, pursuant to Section 8.1.1,
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financial statements have been, or are required to have been, delivered
by the Borrower or the Parent to the Administrative Agent,
to the extent that Non-Material Subsidiaries do not
(i) account in the aggregate for more than 2 1/2% of
consolidated revenues of the Parent and its Subsidiaries or 2 1/2% of
consolidated earnings of the Parent and its Subsidiaries before
interest and taxes, in each case for the four consecutive Fiscal
Quarters of the Parent ending on the last day of the most recently
completed Fiscal Quarter with respect to which, pursuant to Section
8.1.1, financial statements have been, or are required to have been,
delivered by the Borrower or the Parent to the Administrative Agent, or
(ii) have assets which represent more than 2 1/2% of the
consolidated assets of the Parent and its Subsidiaries as of the last
day of the last Fiscal Quarter of the most recently completed Fiscal
Quarter with respect to which, pursuant to Section 8.1.1, financial
statements have been, or are required to have been, delivered by the
Borrower or the Parent to the Administrative Agent.
"Non-Vehicle Debt" means
(a) Total Debt
minus
(b) to the extent included in such Total Debt, Vehicle Debt
plus
(c) to the extent included in such Vehicle Debt, the sum of
(i) with respect to Vehicles owned by TFFC or any other SPC and leased
to the Borrower or any Subsidiary of the Borrower, any obligation of
the Borrower or such Subsidiary with respect to such Vehicles which,
when added to all rental payments previously made by the Borrower or
such Subsidiary and the next regularly scheduled rental payment to be
made by the Borrower or such Subsidiary with respect to such Vehicles,
exceeds the sum of the aggregate Depreciation Charges (as defined in
the Base Indenture) with respect to such Vehicles plus any fair market
value adjustment with respect to such Vehicles provided for in the
documents relating to the lease applicable to such Vehicles plus (ii)
with respect to Vehicles owned by the Borrower or any Subsidiary of the
Borrower (other than TFFC or another SPC), any obligation of the
Borrower or such Subsidiary with respect to such Vehicles which exceeds
the excess of (x) the aggregate Capitalized Cost (as defined in the
Base Indenture) of such Vehicles over (y) the sum of the aggregate
Depreciation Charges (as defined in the Base Indenture) accrued with
respect to such Vehicles plus any fair market value adjustment with
respect to such Vehicles provided for in the documents relating to the
financing arrangements applicable to such Vehicles.
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"Non-Vehicle Interest Expense" means, for any applicable period, the
excess of
(a) the aggregate consolidated gross interest expense of the
Parent and its Subsidiaries for such period, as determined in
accordance with GAAP ("Aggregate Interest Expense"), including (i)
commitment fees paid or owed with respect to the then unutilized
portion of the Loan Commitment Amount, (ii) all other fees paid or owed
with respect to the issuance or maintenance of Contingent Liabilities
(including letters of credit), which, in accordance with GAAP, would be
included as interest expense, (iii) net costs or benefits under Hedging
Arrangements and (iv) the portion of any payments made in respect of
Capitalized Lease Liabilities of the Parent and its Subsidiaries
allocable to interest expense, but excluding the amortization of debt
issuance costs and other financing expenses incurred in connection with
the Transaction (provided that, in the event any such period would
include a Pre-Acquisition Period, such gross interest expense for such
Pre-Acquisition Period would equal the sum of (A) in the event such
Pre-Acquisition Period would include the Fiscal Quarter ending December
31, 1996, $31,053,000 (of which $24,753,000 is on account of Vehicle
Debt) plus (B) gross interest expense for the remainder of such
Pre-Acquisition Period (or, if the preceding clause (A) is not
applicable, for the entirety of such Pre-Acquisition Period) determined
on a pro forma basis after giving effect to consummation of the
Transaction in a manner consistent with the pro forma financial
statements set forth in the Registration Statement)
over
(b) to the extent included in the preceding clause (a), gross
interest expense in respect of Vehicle Debt.
"Note" means a promissory note of the Borrower payable to the order of
any Lender, in the form of Exhibit A hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Loans, and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Obligations" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured, direct or indirect, ▇▇▇▇▇▇ or
inchoate, sole, joint, several or joint and several, due or to become due,
heretofore or hereafter contracted or acquired) of the Borrower and each other
Obligor arising under or in connection with this Agreement, the Notes, the
Letters of Credit and each other Loan Document.
"Obligor" means, as the context may require, the Borrower, the Parent
and any other Person (other than any Agent, the Issuer or any Lender) to the
extent such Person is obligated under, or otherwise a party to, this Agreement
or any other Loan Document.
"OECD" means the Organization for Economic Cooperation and Development.
"Organic Document" means, relative to any Obligor, as applicable, its
certificate of incorporation, by-laws, certificate of partnership, partnership
agreement, certificate of formation,
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limited liability agreement and all shareholder agreements, voting trusts and
similar arrangements applicable to any of such Obligor's partnership interests,
limited liability company interests or authorized shares of capital stock.
"Parent" is defined in the preamble.
"Parent Closing Date Certificate" means the closing date certificate
executed and delivered by the Parent pursuant to Section 6.1.11, substantially
in the form of Exhibit I-2 hereto.
"Parent Guaranty" means the Obligations of the Parent undertaken
pursuant to Article X.
"Parent Pledge Agreement" means the Pledge Agreement executed and
delivered by the Parent pursuant to Section 6.1.13, substantially in the form of
Exhibit F-1 hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Parent Security Agreement" means the Security Agreement executed and
delivered by the Parent pursuant to Section 6.1.14, substantially in the form of
Exhibit G-3 hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Participant" is defined in Section 12.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the Borrower,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.
"Percentage" means, relative to any Lender, the percentage set forth
opposite its name in Schedule II hereto or set forth in the Lender Assignment
Agreement, as such percentage may be adjusted from time to time pursuant to
Lender Assignment Agreement(s) executed by such Lender and its Assignee
Lender(s) and delivered pursuant to Section 12.11.1.
"Permitted Business Acquisition" means any Business Acquisition, so
long as
(a) (i) such Business Acquisition is a Franchisee Acquisition;
or
(ii) in the case of a Business Acquisition other than a
Franchisee Acquisition, the aggregate amount of expenditures of the
Borrower and its Subsidiaries (excluding Vehicle Debt but including the
aggregate amount of any and all other Indebtedness assumed in
connection therewith and including the fair market value of any shares
of Capital Stock of the Parent issued in connection therewith) in
respect of such Business Acquisition (such amount, the "Subject
Amount"), when added to the aggregate amount of all such expenditures
of the Borrower and its Subsidiaries in respect of Business
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Acquisitions (other than Franchisee Acquisitions) during the Fiscal
Year in which such Subject Amount would be expended, does not exceed
$150,000,000 (provided that the portion thereof payable in cash does
not exceed $50,000,000), and
(b) in the event the Subject Amount (which amount shall
include, in the event such Business Acquisition is to be consummated in
a series of related transactions, the aggregate amount of all such
expenditures of the Borrower and its Subsidiaries in respect of such
related transactions) would exceed $10,000,000 or in the event any
portion of the consideration in respect of such Business Acquisition is
in Capital Stock of the Parent, the Administrative Agent shall have
received a Compliance Certificate executed by the chief financial or
accounting Authorized Officer of the Parent certifying and, if
reasonably requested by the Administrative Agent, showing (in
reasonable detail and with appropriate calculations and computations in
all respects reasonably satisfactory to the Administrative Agent) that
on a historical pro forma basis (after giving effect to such Business
Acquisition and all transactions related thereto (including all
Indebtedness that would be assumed or incurred as a result of such
acquisition) and all Business Acquisitions consummated prior thereto
during the applicable periods thereunder) as of the last day of the
most recently completed Fiscal Quarter with respect to which, pursuant
to Section 8.1.1, financial statements have been, or are required to
have been, delivered by the Borrower or the Parent and the Borrower
would be in compliance with Section 8.2.4 as of the last day of such
Fiscal Quarter and would not suffer an increase in the Leverage Ratio
as of such date.
"Person" means any natural person, corporation, limited liability
company, partnership, joint venture, joint stock company, firm, association,
trust or unincorporated organization, government, governmental agency, court or
any other legal entity, whether acting in an individual, fiduciary or other
capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Pledge Agreement" means, as the context may require, the Parent Pledge
Agreement, the Borrower Pledge Agreement or the Subsidiary Pledge Agreement.
"Pre-Acquisition Period" means the period prior to the Acquisition
Date.
"Quarterly Payment Date" means the last Business Day of each March,
June, September, and December.
"Rating Agencies" means S&P and ▇▇▇▇▇'▇.
"Receivable" means any right to payment for goods sold or leased or for
services rendered, whether or not earned by performance, including any right to
payment under any franchise agreement.
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"Redeemable Capital Stock" means Capital Stock of the Borrower, the
Parent or any of their respective Subsidiaries that, either by its terms, by the
terms of any security into which it is convertible or exchangeable or otherwise,
(i) is or upon the happening of an event or passage of time would be required to
be redeemed (for consideration other than shares of common stock of the Parent)
on or prior to ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) is redeemable at the option of the holder
thereof (for consideration other than shares of common stock of the Parent) at
any time prior to such date or (iii) is convertible into or exchangeable for
debt securities of the Parent, the Borrower or any of their respective
Subsidiaries at any time prior to such anniversary.
"Reference Lenders" means Credit Suisse First Boston, NationsBanc and
Caisse Nationale de Credit Agricole or, in the event that any one of such banks
ceases to be a Lender hereunder at any time, any other commercial bank
designated by the Borrower and approved by the Administrative Agent as
constituting a "Reference Lender" hereunder.
"Registration Statement" means the Registration Statement of the Parent
on Form S-1, filed with the SEC under the Securities Act on February 12, 1997
(File No. 333-21691), as last amended on April 18, 1997.
"Reimbursement Obligation" is defined in Section 4.6.
"Related Person" means, with respect to any natural person, (a) any
lineal descendant or antecedent, father, mother, spouse, brother, sister or
executor of such person or (b) a partnership, corporation, limited liability
company, trust or other entity formed solely for the benefit of any of the
foregoing.
"Release" means a "release", as such term is defined in CERCLA.
"Required Lenders" means, at any time, Lenders holding at least 51% of
the sum of the aggregate principal amount of the Loans then outstanding plus the
Letter of Credit Outstandings, or if no Loans and Letters of Credit are then
outstanding, Lenders having at least 51% of the Commitment Amount; provided,
however, that, in the event that at any such time the Co- Syndication Agents
(and their Affiliates) hold at least 40% of the sum of the aggregate principal
amount of the Loans then outstanding plus the Letter of Credit Outstandings, or
if no Loans and Letters of Credit are then outstanding, have at least 40% of the
Commitment Amount, then "Required Lenders" shall mean (other than for purposes
of determining the Lenders necessary to declare all or any portion of the Loans
to be due and payable, to terminate any Commitment or to demand compliance with
Section 4.7) Lenders holding at least 662/3% of the sum of the aggregate
principal amount of the Loans then outstanding plus the Letter of Credit
Outstandings, or if no Loans and Letters of Credit are then outstanding, Lenders
having at least 662/3% of the Commitment Amount.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
"S&P" means Standard & Poor's Rating Services.
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"SEC" means the Securities and Exchange Commission.
"Secured Parties" means the Lenders, the Issuer, the Agents and each of
their respective successors, transferees and assigns.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means, as the context may require, the Borrower
Security Agreement, the Subsidiary Security Agreement or the Parent Security
Agreement.
"Senior Debt Offering" is defined in the third recital.
"Senior Note Purchase Agreements" means the several Note Purchase
Agreements, dated as of April 25, 1997, in each case between the Borrower and
the purchaser named therein, as the same may be amended, supplemented, amended
and restated or otherwise modified from time to time in accordance with the
terms hereof.
"Senior Notes" means the 9.57% Guaranteed Senior Notes due 2007 of the
Borrower, issued pursuant to the Senior Note Purchase Agreements, as the same
may be amended, supplemented, amended and restated or otherwise modified from
time to time in accordance with the terms hereof.
"Series A Note Purchase Agreements" means the several Note Purchase
Agreements, dated as of December 1, 1996, in each case between the Parent and
the purchaser named therein, as supplemented and amended by the Series B Note
Purchase Agreements and as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time in accordance with the terms
hereof.
"Series B Note Purchase Agreements" means the several Note Purchase
Agreements, dated as of April 25, 1997, in each case between the Parent and the
purchaser named therein, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time in accordance with the terms
hereof.
"Series A Notes" means the 7.0% Convertible Subordinated Notes, Series
A, due 2007 of the Parent, issued pursuant to the Series A Note Purchase
Agreements, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time in accordance with the terms hereof.
"Series B Notes" means the 6.85% Convertible Subordinated Notes, Series
B, due 2007 of the Parent, issued pursuant to the Series B Note Purchase
Agreements, as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with the terms hereof.
"SPC" means Budget Funding Corporation, TFFC and any other
bankruptcy-remote Subsidiary of the Borrower formed for the specific purpose of
issuing highly-rated commercial paper, medium-term notes or other securities in
connection with the financing of Vehicles or for
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the specific purpose of owning such Vehicles and leasing such Vehicles to the
Borrower and its other Subsidiaries, in each case pursuant to a structured
financing or securitization program.
"Stated Amount" of each Letter of Credit means the maximum amount
available for drawing thereunder (whether or not any conditions to drawing can
then be met).
"Stated Expiry Date" is defined in Section 4.1.
"Stated Maturity Date" means April 29, 2002.
"Sterling" and the symbol "(pound)" mean the lawful currency of the
United Kingdom of Great Britain and Northern Ireland.
"Stock Purchase Agreements" is defined in the second recital.
"Subordinated Debt" means all unsecured Indebtedness of the Parent, the
Borrower or any Subsidiary Guarantor for money borrowed which is subordinated,
upon terms satisfactory to the Administrative Agent, in right of payment to the
payment in full in cash of all Obligations of the Parent, the Borrower or such
Subsidiary Guarantor, as the case may be, including the Series A Notes and the
Series B Notes.
"Subordinated Intercompany Debt" means unsecured Indebtedness (a)
subordinated to the Obligations by provisions substantially in the form set
forth in Schedule IV hereto and (b) the terms of which (including interest rate)
are not more burdensome to the obligor or obligors thereunder than those terms
generally available from independent third parties to obligors similarly
situated as such obligor or obligors.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other business entity of which more than 50% of the outstanding
capital stock (or other ownership interest) having ordinary voting power to
elect a majority of the board of directors, managers or other voting members of
the governing body of such entity (irrespective of whether at the time capital
stock (or other ownership interest) of any other class or classes of such entity
shall or might have voting power upon the occurrence of any contingency) is at
the time directly or indirectly owned by such Person, by such Person and one or
more other Subsidiaries of such Person, or by one or more other Subsidiaries of
such Person.
"Subsidiary Guarantor" means any Subsidiary of the Borrower that is a
party to the Subsidiary Guaranty.
"Subsidiary Guaranty" means the Guaranty executed and delivered by each
Subsidiary that is a party thereto pursuant to Section 6.1.12, substantially in
the form of Exhibit H hereto, as amended, supplemented, restated or otherwise
modified from time to time.
"Subsidiary Pledge Agreement" means, collectively, the Pledge Agreement
executed and delivered by each Subsidiary party thereto pursuant to Section
6.1.13, substantially in the form
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of Exhibit F-3 hereto, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Subsidiary Security Agreement" means, collectively, the Security
Agreement executed and delivered by each Subsidiary pursuant to Section 6.1.14,
substantially in the form of Exhibit G-2 hereto, as amended, supplemented,
amended and restated or otherwise modified from time to time.
"Supermajority Lenders" means, at any time, Lenders holding at least
66 2/3% of the sum of the aggregate principal amount of the Loans then
outstanding plus the Letter of Credit Outstandings, or if no Loans and Letters
of Credit are then outstanding, Lenders having at least 66 2/3% of the
Commitment Amount; provided, however, that, in the event that at any such time
the Co-Syndication Agents (and their Affiliates) hold at least 40% of the sum of
the aggregate principal amount of the Loans then outstanding plus the Letter of
Credit Outstandings, or if no Loans and Letters of Credit are then outstanding,
have at least 40% of the Commitment Amount, then "Supermajority Lenders" shall
mean Lenders holding at least 75% of the sum of the aggregate principal amount
of the Loans then outstanding plus the Letter of Credit Outstandings, or if no
Loans and Letters of Credit are then outstanding, Lenders having at least 75% of
the Commitment Amount.
"Swiss Francs" and the symbol "SFr" mean the lawful currency of The
Swiss Confederation.
"Taxes" is defined in Section 5.6.
"TFFC" means Team Fleet Financing Corporation, a Delaware corporation
and Wholly Owned Subsidiary of the Borrower.
"Total Debt" means, without duplication, the aggregate amount of all
Indebtedness of the Parent and its Subsidiaries, other than Indebtedness of the
type described in clause (b) (except to the extent such Indebtedness consists of
unreimbursed drawings under letters of credit), (d) or (e) of the definition of
"Indebtedness" or, to the extent in respect of such Indebtedness, clause (h) of
the definition of "Indebtedness".
"Transaction" is defined in the third recital.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as an ABR Loan or a Eurocurrency Loan.
"U.C.C." means the Uniform Commercial Code as from time to time in
effect in the State of New York.
"United States" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
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"U.S. Government Obligations" means direct obligations of, or
obligations the timely payment of principal of and interest on which is fully
and unconditionally guaranteed by, the United States.
"Vehicle Debt" means Indebtedness relating solely to the financing of
any Vehicle and secured thereby (and by related collateral), other than any such
Vehicle financed hereunder pursuant to the Base Indenture Supplement; provided
that any obligation included as Non-Vehicle Debt pursuant to clause (iii) of
the definition thereof shall not be deemed to be Vehicle Debt.
"Vehicle Interest Expense" is defined in clause (b) of the definition
of "Non-Vehicle Interest Expense".
"Vehicles" means all existing and hereafter acquired motor vehicle
inventory of the Borrower and the Borrower's Subsidiaries, consisting of
passenger automobiles, light trucks and vans, whether held for sale, lease or
rental purposes.
"Voting Stock" means, with respect to any Person, Capital Stock in
respect of the class or classes pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect at least a majority
of the board of directors, managers, trustees or other similar governing body of
such Person (irrespective of whether or not at the time the Capital Stock of any
other class or classes shall have or might have voting power by reason of the
occurrence of any contingency).
"Welfare Plan" means a "welfare plan", as such term is defined in
Section 3(1) of ERISA.
"Wholly Owned Subsidiary" means, with respect to any Person, a
Subsidiary all the Capital Stock (other than directors' qualifying shares that
are required under applicable law) of which is owned by such Person or another
Wholly Owned Subsidiary of such Person.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each Note, Borrowing Request, Continuation/Conversion Notice, Issuance Request,
Loan Document, notice and other communication delivered from time to time in
connection with this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references
in this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
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SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under Section 8.2.4) shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be prepared in
accordance with, those generally accepted accounting principles ("GAAP") applied
in the preparation of the financial statements referred to in Section 7.5.
Unless otherwise expressly provided, all financial covenants and defined
financial terms shall be computed on a consolidated basis for the Parent and its
Subsidiaries, in each case without duplication.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. Commitments. On the terms and subject to the conditions of
this Agreement (including Article VI), each Lender severally agrees as follows:
SECTION 2.1.1. Loan Commitment. From time to time on any Business Day
occurring prior to the Loan Commitment Termination Date, each Lender will make
Loans (relative to such Lender, its "Loans") denominated in any Available
Currency to the Borrower equal to such Lender's Percentage of the aggregate
amount of the Borrowing of Loans requested by the Borrower to be made on such
day. On the terms and subject to the conditions hereof, the Borrower may from
time to time borrow, prepay and reborrow Loans.
SECTION 2.1.2. Commitment to Issue Letters of Credit. From time to time
on any Business Day, the Issuer will issue, and each Lender will participate in,
the Letters of Credit, in accordance with Article IV.
SECTION 2.1.3. Lenders Not Permitted or Required To Make Loans or Issue
Letters of Credit Under Certain Circumstances. No Lender shall be permitted or
required to
(a) make any Loan if, after giving effect thereto, the
aggregate outstanding principal amount of all Loans (after converting
all Foreign Currency Loans to the Equivalent thereof in Dollars)
(i) denominated in Foreign Currencies of all
Lenders would exceed the Foreign Currency Loan Commitment
Amount,
(ii) of all Lenders would exceed the Loan Commitment
Amount,
(iii) of all Lenders, together with all Letter of
Credit Outstandings, would exceed the lesser of the Commitment
Amount and the then existing Borrowing Base Amount,
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(iv) denominated in Foreign Currencies of such
Lender would exceed such Lender's Percentage of the Foreign
Currency Loan Commitment Amount,
(v) of such Lender would exceed such Lender's
Percentage of the Loan Commitment Amount, or
(vi) of such Lender, together with its Percentage of
all Letter of Credit Outstandings, would exceed such Lender's
Percentage of the lesser of the Commitment Amount and the then
existing Borrowing Base Amount; or
(b) issue (in the case of the Issuer) any Letter of Credit if,
after giving effect thereto
(i) all Letter of Credit Outstandings in respect of
Enhancement Letters of Credit would exceed the Enhancement
Letters of Credit Commitment Amount,
(ii) all Letter of Credit Outstandings, together
with the aggregate outstanding principal amount of all Loans
(after converting all Foreign Currency Loans to the Equivalent
thereof in Dollars) of all Lenders would exceed the lesser of
the Commitment Amount and the then existing Borrowing Base
Amount,
(iii) such Lender's Percentage of all Letter of
Credit Outstandings in respect of Enhancement Letters of
Credit would exceed such Lender's Percentage of the
Enhancement Letters of Credit Commitment Amount, or
(iv) such Lender's Percentage of all Letter of
Credit Outstandings, together with the aggregate outstanding
principal amount of all Loans (after converting all Foreign
Currency Loans to the Equivalent thereof in Dollars) of such
Lender would exceed such Lender's Percentage of the lesser of
the Commitment Amount and the then existing Borrowing Base
Amount.
SECTION 2.2. Reduction of Commitment Amounts. The Commitment Amount,
the Enhancement Letters of Credit Commitment Amount, the Loan Commitment Amount
and the Foreign Currency Loan Commitment Amount are subject to reduction from
time to time pursuant to this Section 2.2.
SECTION 2.2.1. Optional. The Borrower may, from time to time on any
Business Day occurring after the Closing Date, voluntarily reduce the unused
amount of the Commitment Amount; provided, however, that all such reductions
shall require at least three Business Days' prior notice to the Administrative
Agent and be permanent, and any partial reduction of the Commitment Amount shall
be in a minimum amount of $5,000,000 and in an integral multiple of $1,000,000.
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SECTION 2.2.2. Mandatory. The Commitment Amount shall,
(a) on the first Business Day prior to the Stated Maturity
Date, be reduced to the then existing Loan Commitment Amount; and
(b) to the extent not applied to the permanent repayment of
other Indebtedness that is not Subordinated Debt or Subordinated
Intercompany Debt, concurrently with the receipt by the Borrower, the
Parent or any of their respective Subsidiaries of any Net Disposition
Proceeds, Net Equity Proceeds, Net Issuance Proceeds or Casualty
Proceeds, as the case may be, be reduced by an aggregate amount equal
to 100% of such Net Disposition Proceeds, 50% of such Net Equity
Proceeds, 100% of such Net Issuance Proceeds or 100% of such Casualty
Proceeds, as the case may be; provided, however, that the Commitment
Amount shall not be reduced by the amount of any Casualty Proceeds
received by the Borrower, the Parent or such Subsidiary under this
clause (b) so long as (i) (A) the Borrower informs the Administrative
Agent no later than 30 days following the occurrence of the Casualty
Event resulting in such Casualty Proceeds of its, the Parent's or such
Subsidiary's good faith intention to apply such Casualty Proceeds to
the rebuilding or replacement of the property which was the subject of
such Casualty Event, and (B) such Casualty Proceeds are in fact applied
to rebuild or replace such damaged, destroyed or condemned property
within 180 days following the receipt of such Casualty Proceeds, and
(ii) no Default shall have occurred and be continuing.
Each such reduction in the Commitment Amount shall be permanent and automatic.
SECTION 2.2.3. Corresponding Reductions. Any reduction of the
Commitment Amount which reduces the Commitment Amount below the then current
amount of the Enhancement Letters of Credit Commitment Amount, the Loan
Commitment Amount or the Foreign Currency Loan Commitment Amount, as the case
may be, shall result in an automatic and corresponding reduction of the
Enhancement Letters of Credit Commitment Amount, the Loan Commitment Amount or
the Foreign Currency Commitment Amount, as the case may be, to the amount of the
Commitment Amount, as so reduced, without any further action on the part of the
Administrative Agent, the Lenders or otherwise.
SECTION 2.3. Borrowing Procedure. By delivering a Borrowing Request
to the Administrative Agent on or before 11:00 a.m. (New York City, New York
time) on a Business Day, the Borrower may from time to time irrevocably request,
(a) on such Business Day (but in any event not more than five
Business Days' notice) in the case of ABR Loans denominated in Dollars,
(b) on not less than three (but in any event not more than
five) Business Days' notice in the case of Eurocurrency Loans
denominated in Dollars, or
(c) on not less than four (but in any event not more than six)
Business Days' notice in the case of Eurocurrency Loans denominated in
any Foreign Currency,
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that a Borrowing be made, in the case of ABR Loans, in a minimum amount of
$3,000,000 and an integral multiple of $100,000, in the case of Eurocurrency
Loans, in a minimum amount of $5,000,000 (or the Equivalent thereof in any
Foreign Currency) and an integral multiple of $100,000 (or the Equivalent
thereof in such Foreign Currency) or, in either case, in the unused amount of
the Commitment (subject to the Foreign Currency Loan Commitment Amount if such
Loan is a Eurocurrency Loan denominated in a Foreign Currency) and rounded to
the nearest one hundred thousand units of such Foreign Currency in the case of
Eurocurrency Loans denominated in a Foreign Currency. On the terms and subject
to the conditions of this Agreement, each Borrowing shall be comprised of the
type of Loans, and shall be made on the Business Day, in the Available Currency
specified in such Borrowing Request. On or before 1:00 p.m. (local time) on such
Business Day, each Lender shall deposit with the Administrative Agent same day
funds in the applicable Available Currency an amount equal to such Lender's
Percentage of the requested Borrowing. Such deposit will be made to an account
which the Administrative Agent shall specify from time to time by notice to the
Lenders. To the extent funds are received from the Lenders, the Administrative
Agent shall make such funds available to the Borrower by wire transfer to the
accounts the Borrower shall have specified in its Borrowing Request. No Lender's
obligation to make any Loan shall be affected by any other Lender's failure to
make any Loan.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 11:00
a.m. (New York City, New York time) on a Business Day, the Borrower may from
time to time irrevocably elect,
(a) on such Business Day in the case of ABR Loans,
(b) on not less than three (but in any event not more than
five) Business Days' notice in the case of Eurocurrency Loans
denominated in Dollars, or
(c) on not less than four (but in any event not more than six)
Business Days' notice in the case of Eurocurrency Loans denominated in
any Foreign Currency,
that all, or any portion in an aggregate minimum amount of $3,000,000 (or the
Equivalent thereof in any Foreign Currency) and an integral multiple of $100,000
(or the Equivalent thereof in such Foreign Currency), in the case of any
Eurocurrency Loan, be converted into an ABR Loan denominated in Dollars, or an
aggregate minimum amount of $5,000,000 (or the Equivalent thereof in any Foreign
Currency) and an integral multiple of $100,000 (or the Equivalent thereof in
such Foreign Currency), in the case of any ABR Loan or Eurocurrency Loan, as the
case may be, be converted into or continued as, as the case may be, a
Eurocurrency Loan (in the absence of delivery of a Continuation/ Conversion
Notice with respect to any Eurocurrency Loan at least three Business Days (but
not more than five Business Days) before the last day of the then current
Interest Period with respect thereto, such Eurocurrency Loan shall, on such last
day, automatically convert to an ABR Loan); provided, however, that (i) each
such conversion or continuation shall be pro rated among the applicable
outstanding Loans of all Lenders, (ii) no portion of the outstanding principal
amount of any Loans may be continued as, or be converted into, Eurocurrency
Loans when any Default has occurred and is continuing and
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(iii) no Loan or portion of the outstanding principal amount of any Loan may be
continued as or converted into a Loan denominated in an Available Currency other
than the one in which it was originally issued, except that Eurocurrency Loans
denominated in a Foreign Currency that are to be converted into ABR Loans shall
only be converted into ABR Loans denominated in Dollars.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert Eurocurrency Loans hereunder by causing
one of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such Eurocurrency Loan; provided,
however, that such Eurocurrency Loan shall nonetheless be deemed to have been
made and to be held by such Lender, and the obligation of the Borrower to repay
such Eurocurrency Loan shall nevertheless be to such Lender for the account of
such foreign branch, Affiliate or international banking facility. In addition,
the Borrower hereby consents and agrees that, for purposes of any determination
to be made for purposes of Section 5.1, 5.2, 5.3 or 5.4, it shall be
conclusively assumed that each Lender elected to fund all Eurocurrency Loans in
an Available Currency by purchasing deposits in such Available Currency in its
Eurocurrency Office's interbank eurodollar market.
SECTION 2.6. Loan Accounts. (a) The Loans and participations in the
Letter of Credit Outstandings made by each Lender and the Letters of Credit
issued by the Issuer shall be evidenced by one or more loan accounts or records
maintained by such Lender or the Issuer, as the case may be, in the ordinary
course of business. The loan accounts or records maintained by the
Administrative Agent, the Issuer and each Lender shall be conclusive absent
manifest error of the amount of the Loans, the participations in Letter of
Credit Outstandings and the Letters of Credit made by the Lenders and the
Issuer, as the case may be, and the interest and payments thereon. Any failure
so to record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrower hereunder to pay any amount owing with
respect to the Loans and Letters of Credit, as the case may be, or of the
Lenders with respect to participations in Letter of Credit Outstandings.
(b) If requested by any Lender, such Lender's Loans under the Loan
Commitment shall be evidenced by a Note payable to the order of such Lender in a
maximum principal amount equal to such Lender's Percentage of the sum of (a) the
difference of the original Loan Commitment Amount minus the original Foreign
Currency Loan Commitment Amount plus (b) 103% of the original Foreign Currency
Loan Commitment Amount. The Borrower hereby irrevocably authorizes each Lender
having a Note to make (or cause to be made) appropriate notations on the grid
attached to such Lender's Note (or on any continuation of such grid), which
notations, if made, shall evidence, inter alia, the date of, the outstanding
principal of, and the interest rate and Interest Period applicable to the Loans
evidenced thereby, and whether such Loans are denominated in Dollars or a
Foreign Currency. Such notations shall be conclusive and binding on the Borrower
absent manifest error; provided, however, that the failure of any Lender having
a Note to make any such notations shall not limit or otherwise affect any
Obligations of the Borrower or any other Obligor.
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SECTION 2.7. Special Provisions for Loans Denominated in Foreign
Currencies.
SECTION 2.7.1. Notification of Request. If any Borrowing Request
requests a Borrowing in a Foreign Currency, or if pursuant to any
Continuation/Conversion Notice the Borrower elects to continue any Eurocurrency
Loan denominated in a Foreign Currency, the Administrative Agent shall in the
notice given to the Lenders pursuant to Section 2.3 or Section 2.4, as the case
may be, give details of such request or election including, as the case may be,
the aggregate principal amount of the Borrowing in such Foreign Currency to be
made by each Lender pursuant to the terms of this Agreement or the aggregate
principal amount of such Eurocurrency Loans to be continued by each Lender
pursuant to the terms of this Agreement.
SECTION 2.7.2. Availability. Each Lender shall be treated as having
confirmed that the Foreign Currency requested, or elected by the Borrower to be
continued, is Available to it unless no later than 10:00 a.m. (New York City,
New York time) two Business Days prior to the day of the requested Borrowing, or
the proposed continuation, it shall have notified the Administrative Agent that
such Foreign Currency is not Available.
SECTION 2.7.3. Notification of Availability. In the event the
Administrative Agent has received notification from any of the Lenders that the
Foreign Currency requested or elected by the Borrower to be continued is not
available, then the Administrative Agent shall notify the Borrower and the
Lenders no later than 12:00 noon (New York City, New York time) two Business
Days prior to the day of the proposed Borrowing or proposed continuation.
SECTION 2.7.4. Consequences of Non-Availability. If the Administrative
Agent notifies the Borrower pursuant to Section 2.7.3 that any of the Lenders
has notified the Administrative Agent that the Foreign Currency requested or
elected by the Borrower to be continued is not Available, such notification
shall (a) in the case of any Borrowing Request, revoke such Borrowing Request
and (b) in the case of any Continuation/Conversion Notice, result in the
Eurocurrency Loans denominated in such Foreign Currency being automatically
converted into Eurocurrency Loans denominated in Dollars for a one month
Interest Period on the last day of the then current Interest Period with respect
to such Eurocurrency Loans denominated in such Foreign Currency.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the Stated Maturity Date.
Prior thereto, the Borrower
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(a) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding principal
amount of any Loans; provided, however, that
(i) any such prepayment shall be made pro rata
among Loans of the same type and denominated in the same
Available Currency, and, if applicable, having the same
Interest Period of all Lenders;
(ii) all such voluntary prepayments shall require
prior irrevocable written notice to the Administrative Agent
received by the Administrative Agent no later than 11:00 a.m.
(New York City, New York)
(A) on such Business Day in the case of ABR
Loans,
(B) on not less than three (but in any event
not more than five) Business Days' notice in the case
of Eurocurrency Loans denominated in Dollars, or
(C) on not less than four (but in any event
not more than six) Business Days' notice in the case
of Eurocurrency Loans denominated in any Foreign
Currency; and
(iii) all such voluntary partial prepayments shall
be, in the case of ABR Loans, in an aggregate minimum amount
of $3,000,000 and an integral multiple of $100,000 and, in the
case of Eurocurrency Loans, in an aggregate minimum amount of
$5,000,000 (or the Equivalent thereof in any Foreign Currency)
and an integral multiple of $100,000 (or the Equivalent
thereof in such Foreign Currency), in the case of Eurocurrency
Loans denominated in a Foreign Currency, rounded to the
nearest one hundred thousand unit of such Foreign Currency;
(b) shall, on each date when
(i) any reduction in the Commitment Amount shall
become effective (including pursuant to Section 2.2), make a
mandatory prepayment equal to the excess, if any, of the
aggregate, outstanding principal amount of all Loans (after
converting all Foreign Currency Loans to the Equivalent
thereof in Dollars) and Letter of Credit Outstandings over the
Commitment Amount in effect on such date (following such
reduction);
(ii) the aggregate unpaid principal amount of all
Foreign Currency Loans (after converting all such Foreign
Currency Loans to the Equivalent thereof in Dollars and
multiplying such resulting amount by 97.08737864%) then
outstanding exceeds the Foreign Currency Loan Commitment
Amount in effect on such date, make a mandatory prepayment
equal to the excess, if any, of the aggregate, outstanding
principal amount of all Foreign Currency Loans (after
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converting all such Foreign Currency Loans to the Equivalent
thereof in Dollars) over the Foreign Loan Commitment Amount
in effect on such date; or
(iii) the aggregate unpaid principal amount of all
Loans (after converting all Foreign Currency Loans to the
Equivalent thereof in Dollars and multiplying such resulting
amount by 97.08737864%) and Letter of Credit Outstandings
exceeds the lesser of the Commitment Amount in effect on such
date and the Borrowing Base Amount in effect on such date,
make a mandatory prepayment equal to the excess, if any, of
the aggregate, outstanding principal amount of all Loans
(after converting all Foreign Currency Loans to the Equivalent
thereof in Dollars) and Letter of Credit Outstandings over the
lesser of the Commitment Amount in effect on such date and the
Borrowing Base Amount in effect on such date,
which mandatory prepayment shall be applied (or held for application,
as the case may be) by the Lenders
(A) first, to the payment of the aggregate unpaid
principal amount of those Foreign Currency Loans then
outstanding equal to the excess, if any, of the aggregate,
outstanding principal amount of all Foreign Currency Loans
(after converting all such Foreign Currency Loans to the
Equivalent thereof in Dollars) over the Foreign Currency Loan
Commitment Amount in effect on such date (following such
reduction, if applicable);
(B) second, to the payment of the aggregate unpaid
principal amount of those Loans then outstanding equal to the
excess, if any, of the aggregate, outstanding principal amount
of all Loans (after converting all Foreign Currency Loans to
the Equivalent thereof in Dollars) over the Loan Commitment
Amount in effect on such date (following such reduction, if
applicable);
(C) third, to the payment and/or cash
collateralization of the then outstanding Letter of Credit
Outstandings in respect of Enhancement Letters of Credit equal
to the excess, if any, of the Letter of Credit Outstandings in
respect of the Enhancement Letters of Credit over the
Enhancement Letters of Credit Commitment Amount in effect on
such date (following such reduction, if applicable);
(D) fourth, to the payment and/or cash
collateralization of the then outstanding Letter of Credit
Outstandings equal to the excess, if any, of the Letter of
Credit Outstandings over the lesser of the Commitment Amount
in effect on such date (following such reduction, if
applicable) and the Borrowing Base Amount in effect on such
date; and
(E) fifth, to the payment of the aggregate unpaid
principal amount of the Loans denominated in Dollars then
outstanding, then to the payment of the
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aggregate unpaid principal amount of all Foreign Currency
Loans then outstanding, and then to the payment and/or cash
collateralization of the then outstanding Letter of Credit
Outstandings equal to the excess, if any, of the aggregate,
outstanding principal amount of all Loans (after converting
all Foreign Currency Loans to the Equivalent thereof in
Dollars) and Letter of Credit Outstandings over the lesser of
the Commitment Amount in effect on such date (following such
reduction, if applicable) and the Borrowing Base Amount in
effect on such date; and
(c) shall, immediately upon any acceleration of the Stated
Maturity Date of any Loans pursuant to Section 9.2 or Section 9.3,
repay all Loans, unless, pursuant to Section 9.3, only a portion of all
Loans is so accelerated.
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty (except as may be required by Section 5.4).
SECTION 3.2. Interest Provisions. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
SECTION 3.2.1. Rates. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as an ABR
Loan, equal to the sum of the Alternate Base Rate from time to time in
effect plus the Applicable Margin for such Loan; and
(b) on that portion maintained as a Eurocurrency Loan, during
each Interest Period applicable thereto, equal to the sum of the
Eurocurrency Rate (Reserve Adjusted) for such Interest Period plus the
Applicable Margin for such Loan.
All Eurocurrency Loans shall bear interest from and including the first
day of the applicable Interest Period to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such
Eurocurrency Loan.
SECTION 3.2.2. Post-Maturity Rates. After the date any principal amount
of any Loan is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise), or after any other monetary Obligation of the
Borrower or any other Obligor, as the case may be, shall have become due and
payable, the Borrower or such other Obligor, as the case may be, shall pay, but
only to the extent permitted by law and not otherwise provided for in any
Enhancement Letter of Credit in respect of a Liquidity Obligation, interest
(after as well as before judgment) on such amounts at a rate per annum equal
(a) in the case of such amounts that are comprised of the
principal amount of any Loan, to 2.0% above the rate otherwise
applicable thereto; and
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(b) in the case of such amounts that are comprised of any
monetary obligation of the Borrower or such other Obligor (other than
such obligations comprised of the principal amount of any Loan), to the
Alternate Base Rate from time to time in effect plus a margin of 2.0%.
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any optional or required payment or
prepayment, in whole or in part, of principal outstanding on such Loan;
(c) with respect to ABR Loans, on each Quarterly Payment Date
occurring after the Closing Date;
(d) with respect to Eurocurrency Loans, on the last day of
each applicable Interest Period (and, if such Interest Period shall
exceed three months, on the same calendar day of every third month of
such Interest Period as the day on which such Interest Period
commenced);
(e) with respect to any ABR Loans converted into Eurocurrency
Loans on a day when interest would not otherwise have been payable
pursuant to clause (c), on the date of such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to Section 9.2 or Section 9.3,
immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
SECTION 3.2.4. Interest Rate Determination. Each Reference Lender
agrees to furnish to the Administrative Agent timely information for the purpose
of determining each Eurocurrency Rate. If any one or more of the Reference
Lenders shall fail timely to furnish such information to the Administrative
Agent for any such interest rate, the Administrative Agent shall determine such
interest rate on the basis of the information furnished by the remaining
Reference Lenders.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth in
this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fees. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender, for the period (including
any portion thereof when any of its Commitment is suspended by reason of the
Borrower's inability to satisfy any condition of
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Article VI) commencing on the Effective Date and continuing through the Loan
Commitment Termination Date, a commitment fee equal to the Applicable Commitment
Fee on such Lender's Percentage of the sum of the average daily unused portion
of the Commitment Amount. Such commitment fee shall be payable by the Borrower
in arrears on each Quarterly Payment Date, commencing with the first such day
following the Effective Date, and on the Loan Commitment Termination Date.
SECTION 3.3.2. Arrangement Fees. In accordance with the letter
agreement (the "Fee Letter") among the Borrower and Credit Suisse First Boston
dated March 24, 1997, the Borrower shall pay on the Closing Date an arrangement
fee to the Arranger for the account of the Lenders in such proportion as the
Arranger shall determine in its sole discretion.
SECTION 3.3.3. Administrative Agent's Fee. The Borrower agrees to pay
to the Administrative Agent for its own account, a non-refundable initial fee in
the amount set forth in the Fee Letter, payable on the Closing Date and,
thereafter, a non-refundable annual fee in the amount set forth in the Fee
Letter, payable in advance on each anniversary of the Closing Date.
SECTION 3.3.4. Letter of Credit Face Amount Fee. The Borrower agrees to
pay to the Administrative Agent, for the account of the Lenders, a fee for each
Letter of Credit for the period from and including the date of the issuance of
such Letter of Credit to (but not including) the date upon which such Letter of
Credit expires, calculated at a per annum rate equal to the Applicable Margin
with respect to Eurocurrency Loans on the Stated Amount of such Letter of
Credit. Such fee shall be payable by the Borrower in arrears each Quarterly
Payment Date, and on the Letter of Credit Commitment Termination Date for any
period then ending for which such fee shall not theretofore have been paid,
commencing on the first such date after the issuance of such Letter of Credit.
SECTION 3.3.5. Letter of Credit Issuing Fee. The Borrower agrees to pay
to the Administrative Agent, for the account of the Issuer, an issuing fee for
each Letter of Credit for the period from and including the date of issuance of
such Letter of Credit to (but not including) the date upon which such Letter of
Credit expires, of 1/8% per annum on the Stated Amount of such Letter of Credit.
Such fee shall be payable by the Borrower in arrears on each Quarterly Payment
Date and on the Letter of Credit Commitment Termination Date for any period then
ending for which such fee shall not theretofore have been paid, commencing on
the first such date after the issuance of such Letter of Credit.
SECTION 3.3.6. Letter of Credit Administrative Fee. The Borrower agrees
to pay to the Administrative Agent, for the account of the Issuer, the amounts
set forth in Section 4.3.
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ARTICLE IV
LETTERS OF CREDIT
SECTION 4.1. Issuance Requests. By delivering to the Administrative
Agent and the Issuer an Issuance Request, together with an Enhancement Letter of
Credit Application and Agreement if such Issuance Request is in respect of an
Enhancement Letter of Credit on or before 1:00 p.m. (New York City, New York
time), the Borrower may request, from time to time prior to the Loan Commitment
Termination Date and, except in the case of the Letters of Credit which are
described in the Issuance Request and applicable Enhancement Letter of Credit
Application and Agreement(s) delivered by the Borrower to the Administrative
Agent pursuant to Section 6.1.16, on not less than two nor more than ten
Business Days' notice, in the case of General Letters of Credit, and on not less
than 15 nor more than 21 Business Days' notice, in the case of Enhancement
Letters of Credit, that the Issuer issue Letters of Credit in support of
financial obligations of the Borrower or any other Account Party incurred in the
ordinary course of business of the Borrower or such Account Party, as the case
may be, and which are described in such Issuance Request; provided that, in the
case of an Issuance Request that requests an increase in the Stated Amount of an
Enhancement Letter of Credit then outstanding, such Issuance Request shall be so
delivered on not less than five nor more than ten Business Days notice. Upon
receipt of an Issuance Request and, if applicable, an Enhancement Letter of
Credit Application and Agreement, the Administrative Agent shall promptly notify
the Lenders thereof. Each Letter of Credit shall by its terms:
(a) be issued in a Stated Amount denominated in Dollars which
(i) is at least $100,000;
(ii) does not exceed (or would not exceed)
(A) in the case of General Letters of
Credit, an amount equal to the excess, if any, of the
lesser of the Commitment Amount and the then existing
Borrowing Base Amount over all Letter of Credit
Outstandings, together with the aggregate outstanding
principal amount of all Loans (after converting all
Foreign Currency Loans to the Equivalent thereof in
Dollars), and
(B) in the case of the Enhancement Letters
of Credit, an amount equal to the lesser of
(1) the excess, if any, of the
lesser of the Enhancement Letters of Credit
Commitment Amount over all Letter of Credit
Outstandings in respect of Enhancement
Letters of Credit and
(2) the excess, if any, of the
lesser of the Commitment Amount and the then
existing Borrowing Base Amount over all
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Letter of Credit Outstandings, together with
the aggregate outstanding principal amount
of all Loans (after converting all Foreign
Currency Loans to the Equivalent thereof in
Dollars); and
(b) except in the case of the Letters of Credit set forth on
Schedule V hereto, be stated to expire on a date (its "Stated Expiry
Date") no later than the earlier of (i) (A) one year from its date of
issuance, in the case of a General Letter of Credit, and (B) three
years from its date of issuance, in the case of an Enhancement Letter
of Credit, and (ii) the Letter of Credit Commitment Termination Date in
effect at the time of such issuance.
So long as no Default has occurred and is continuing, by delivery to the Issuer
and the Administrative Agent of an Issuance Request, at least two but not more
than ten Business Days prior to the Stated Expiry Date of any issued General
Letter of Credit or prior to the date any issued General Letter of Credit
containing an "evergreen" or similar automatic extension feature is scheduled to
automatically be extended unless the beneficiary thereof shall have received
notice to the contrary from the Issuer, the Borrower may request the Issuer to
extend the Stated Expiry Date of such issued General Letter of Credit for an
additional period not to exceed the earlier of (A) one year from its date of
extension and (B) the Letter of Credit Commitment Termination Date in effect at
the time of such extension. So long as no Default has occurred and is
continuing, the Borrower (or the applicable Account Party) may request the
Issuer to extend the Stated Expiry Date of any issued Enhancement Letter of
Credit for an additional period not to exceed the earlier of (A) one year from
its date of extension and (B) the Letter of Credit Commitment Termination Date
in effect at the time of such extension; provided such request is made in
accordance with the terms of the Enhancement Letter of Credit Application and
Agreement relating thereto and is accompanied by delivery to the Issuer and the
Administrative Agent of an Issuance Request.
Notwithstanding any provision to the contrary, the Issuer may not issue
any Enhancement Letter of Credit or enter into any Enhancement Letter of Credit
Application and Agreement that provides for LOC Liquidity Disbursements (other
than the CP Enhancement Letter of Credit or the CP Enhancement Letter of Credit
Application and Agreement), unless each Lender has consented to the terms
thereof.
SECTION 4.2. Issuances and Extensions. On the terms and subject to the
conditions of this Agreement (including Article VI), the Issuer shall issue
Letters of Credit, and extend the Stated Expiry Dates of outstanding Letters of
Credit, in accordance with the Issuance Requests made therefor and, if
applicable, the Enhancement Letter of Credit Application and Agreement relating
thereto. The Issuer shall promptly confirm any such issuance or extension
(including the date of such issuance or extension), as the case may be, to the
Administrative Agent. The Issuer will make available the original of each Letter
of Credit which it issues in accordance with the Issuance Request and the
Enhancement Letter of Credit Application and Agreement, if applicable, therefor
to the beneficiary thereof (and will promptly provide each of the Lenders with a
copy of such Letter of Credit) and will notify the beneficiary under any Letter
of Credit of any extension of the Stated Expiry Date thereof.
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SECTION 4.3. Expenses. The Borrower agrees to pay to the Administrative
Agent for the account of the Issuer all administrative expenses of the Issuer in
connection with the issuance, maintenance, modification (if any) and
administration of each Letter of Credit issued by the Issuer upon demand from
time to time.
SECTION 4.4. Other Lenders' Participation. Each Letter of Credit issued
pursuant to Section 4.2 shall, effective upon its issuance and without further
action, be issued on behalf of all Lenders (including the Issuer thereof) pro
rata according to their respective Percentages. Each Lender shall, to the extent
of its Percentage, be deemed irrevocably to have participated in the issuance of
such Letter of Credit and (x) shall be responsible to reimburse promptly the
Issuer thereof for Reimbursement Obligations which have not been reimbursed by
the Borrower in accordance with Section 4.5, or which have been reimbursed by
the Borrower but must be returned, restored or disgorged by the Issuer for any
reason, or (y) in the case of an LOC Liquidity Disbursement, shall participate
in such LOC Liquidity Disbursement in accordance with the terms of the
Enhancement Letter of Credit Application and Agreement relating thereto. Each
Lender shall, to the extent of its Percentage, be entitled to receive from the
Administrative Agent a ratable portion of the letter of credit fees received by
the Administrative Agent pursuant to Section 3.3.4 with respect to each Letter
of Credit. In the event that (a) the Borrower shall fail to reimburse the
Issuer, or if for any reason Loans shall not be made to fund any Reimbursement
Obligation, all as provided in Section 4.5 and in an amount equal to the amount
of any drawing honored by the Issuer under a Letter of Credit issued by it, (b)
the Issuer must for any reason return or disgorge such reimbursement or (c) an
LOC Liquidity Disbursement has occurred, the Issuer shall promptly notify the
Administrative Agent of the unreimbursed amount of such drawing and of such
Lender's respective participation therein. Each Lender shall make available to
the Administrative Agent for the account of the Issuer, whether or not any
Default shall have occurred and be continuing, an amount equal to its respective
participation in same day or immediately available funds at the office of the
Issuer specified in such notice not later than 11:00 a.m. (New York City, New
York time) on the Business Day (under the laws of the jurisdiction of the
Issuer) after the date notified by the Issuer. In the event that any Lender
fails to make available to the Administrative Agent for the account of the
Issuer the amount of such Lender's participation in such Letter of Credit as
provided herein, the Issuer shall be entitled to recover such amount on demand
from such Lender together with interest at the daily average Federal Funds Rate
for three Business Days (together with such other compensatory amounts as may be
required to be paid by such Lender to the Administrative Agent and/or the
Issuer, as the case may be, pursuant to the Rules for Interbank Compensation of
the council on International Banking or the Clearinghouse Compensation
Committee, as the case may be, as in effect from time to time) and thereafter at
the Alternate Base Rate plus 2.0%. Nothing in this Section shall be deemed to
prejudice the right of any Lender to recover from the Issuer any amounts made
available by such Lender to the Issuer pursuant to this Section in the event
that it is determined by a court of competent jurisdiction that the payment with
respect to a Letter of Credit by the Issuer in respect of which payment was made
by such Lender constituted gross negligence or wilful misconduct on the part of
the Issuer. The Issuer shall distribute to the Administrative Agent for the
account of each other Lender which has paid all amounts payable by it under this
Section with respect to any Letter of Credit issued by the Issuer such other
Lender's Percentage
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of all payments received by the Issuer from the Borrower in reimbursement of
drawings honored by the Issuer under such Letter of Credit when such payments
are received.
SECTION 4.5. Disbursements. The Issuer will notify the Borrower and the
Administrative Agent promptly of the presentment for payment of any Letter of
Credit, together with notice of the date (a "Disbursement Date") such payment
shall be made. Subject to the terms and provisions of such Letter of Credit, the
Issuer shall make such payment to the beneficiary (or its designee) of such
Letter of Credit. Prior to 11:00 a.m. (New York City, New York time) on the
Disbursement Date, the Borrower will reimburse the Issuer for all amounts which
it has disbursed under such Letter of Credit, except to the extent such amounts
are in respect of an LOC Liquidity Disbursement (in which case such amounts
shall be reimbursed to the Issuer or the Lenders by the applicable SPC in
accordance with the provisions of the Enhancement Letter of Credit Application
and Agreement relating thereto (the obligation of such SPC to reimburse the
Issuer or the Lenders for such amounts in accordance with such terms being
herein referred to as a "Liquidity Obligation")). To the extent the Issuer is
not reimbursed in full in respect of any Reimbursement Obligation payable by the
Borrower in accordance with the immediately preceding sentence, such
Reimbursement Obligation shall accrue interest at a fluctuating rate determined
by reference to the Alternate Base Rate, plus a margin of 2.0% per annum,
payable on demand. In the event the Issuer is not reimbursed by the Borrower on
the Disbursement Date for any Reimbursement Obligation in respect of any General
Letter of Credit due and owing on such Disbursement Date, or if the Issuer must
for any reason return or disgorge such reimbursement, the Lenders (including the
Issuer) shall, on the terms and subject to the conditions of this Agreement
(including the conditions set forth in Article VI), fund such Reimbursement
Obligation by making, on the next Business Day, Loans which are ABR Loans as
provided in Section 2.3 (the Borrower being deemed to have given a timely
Borrowing Request therefor for such amount); provided, however, for the purpose
of determining the availability of the Commitments to make Loans immediately
prior to giving effect to the application of the proceeds of such Loans, such
Reimbursement Obligation shall be deemed not to be outstanding at such time.
SECTION 4.6. Reimbursement. The obligation (a "Reimbursement
Obligation") of an Obligor under Section 4.5 or under the applicable Enhancement
Letter of Credit Application and Agreement to reimburse the Issuer with respect
to each disbursement (including interest thereon), and each Lender's obligation
to make participation payments in each drawing which has not been reimbursed by
the Borrower or the applicable Account Party, shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim, or defense to payment which the Borrower may have or have had
against any Lender or any beneficiary of a Letter of Credit, including any
defense based upon the occurrence of any Default, any draft, demand or
certificate or other document presented under a Letter of Credit proving to be
forged, fraudulent, invalid or insufficient, the failure of any disbursement to
conform to the terms of the applicable Letter of Credit (if, in the Issuer's
good faith opinion, such disbursement is determined to be appropriate) or any
non-application or misapplication by the beneficiary of the proceeds of such
disbursement, or the legality, validity, form, regularity, or enforceability of
such Letter of Credit; provided, however, that nothing herein shall adversely
affect the right of the Borrower to commence any proceeding against the Issuer
for any wrongful
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disbursement made by the Issuer under a Letter of Credit as a result of acts or
omissions constituting gross negligence or wilful misconduct on the part of the
Issuer.
SECTION 4.7. Deemed Disbursements. Upon the occurrence and during the
continuation of any Event of Default or the occurrence of the Letter of Credit
Commitment Termination Date, an amount equal to that portion of Letter of Credit
Outstandings attributable to outstanding and undrawn Letters of Credit shall, at
the election of the Issuer acting on instructions from the Required Lenders, and
without demand upon or notice to the Borrower, be deemed to have been paid or
disbursed by the Issuer under such Letters of Credit (notwithstanding that such
amount may not in fact have been so paid or disbursed), and, upon notification
by the Issuer to the Administrative Agent and the Borrower of its obligations
under this Section, the Borrower shall be immediately obligated to reimburse the
Issuer the amount deemed to have been so paid or disbursed by the Issuer. Any
amounts so received by the Issuer from the Borrower pursuant to this Section
shall be held as collateral security for the repayment of the Borrower's
obligations in connection with the Letters of Credit issued by the Issuer. At
any time when such Letters of Credit shall terminate and all Obligations of the
Issuer are either terminated or paid or reimbursed to the Issuer in full, the
Obligations of the Borrower under this Section shall be reduced accordingly
(subject, however, to reinstatement in the event any payment in respect of such
Letters of Credit is recovered in any manner from the Issuer), and the Issuer
will return to the Borrower the excess, if any, of
(a) the aggregate amount deposited by the Borrower with the
Issuer and not theretofore applied by the Issuer to any Reimbursement
Obligation
over
(b) the aggregate amount of all Reimbursement Obligations to
the Issuer pursuant to this Section, as so adjusted.
At such time when all Events of Default shall have been cured or waived, the
Issuer shall return to the Borrower all amounts then on deposit with the Issuer
pursuant to this Section. All amounts on deposit pursuant to this Section shall,
until their application to any Reimbursement Obligation or their return to the
Borrower, as the case may be, bear interest at the daily average Federal Funds
Rate from time to time in effect (net of the costs of any reserve requirements,
in respect of amounts on deposit pursuant to this Section, pursuant to F.R.S.
Board Regulation D), which interest shall be held by the Issuer as additional
collateral security for the repayment of the Borrower's Obligations in
connection with the Letters of Credit issued by the Issuer.
SECTION 4.8. Nature of Reimbursement Obligations. The Borrower shall
assume all risks of the acts, omissions, or misuse of any Letter of Credit by
the beneficiary thereof. Neither the Issuer nor any Lender (except to the extent
of its own gross negligence or wilful misconduct) shall be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any Letter of Credit or any document submitted by any
party in connection with the
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application for and issuance of a Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent, or forged;
(b) the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof in whole or in part, which may prove to
be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex, or otherwise; or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a disbursement under a
Letter of Credit or of the proceeds thereof.
None of the foregoing shall affect, impair, or prevent the vesting of any of the
rights or powers granted the Issuer or any Lender hereunder. In furtherance and
extension, and not in limitation or derogation, of any of the foregoing, any
action taken or omitted to be taken by the Issuer in good faith shall be binding
upon the Borrower and shall not put the Issuer under any resulting liability to
the Borrower.
SECTION 4.9. Indemnity. In addition to amounts payable as elsewhere
provided herein, the Borrower hereby agrees to protect, indemnify, pay and save
the Issuer harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable attorneys'
fees and allocated costs of internal counsel) which the Issuer may incur or be
subject to as a consequence, direct or indirect, of
(a) the issuance of the Letters of Credit, other than as a
result of the gross negligence or wilful misconduct of the Issuer as
determined by a court of competent jurisdiction, or
(b) the failure of the Issuer to honor a drawing under any
Letter of Credit as a result of any act or omission, whether rightful
or wrongful, of any present or future de jure or de facto government or
governmental authority.
SECTION 4.10. Borrower's Guaranty of Reimbursement Obligations of its
Subsidiaries. The Borrower agrees as follows in respect of the Reimbursement
Obligations of its Subsidiaries (other than SPCs):
SECTION 4.10.1. Guaranty. The Borrower hereby absolutely,
unconditionally and irrevocably
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(a) guarantees the full and punctual payment when due, whether
at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise, of all Reimbursement Obligations (other than
Liquidity Obligations) now or hereafter existing, of each of its
Subsidiaries that is an Account Party which arise out of, or are
incurred in connection with, such Letters of Credit, whether for
principal, interest, fees, expenses or otherwise (including all such
amounts which would become due but for the operation of the automatic
stay under Section 362(a) of the United States Bankruptcy Code, 11
U.S.C. ss.362(a), and the operation of Sections 502(b) and 506(b) of
the United States Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506(b)),
and
(b) indemnifies and holds harmless each Secured Party and each
holder of a Note for any and all costs and expenses (including
reasonable attorney's fees and expenses) incurred by such Secured Party
or such holder, as the case may be, in enforcing any rights under the
guaranty contained in this Section 4.10.
The guaranty contained in this Section 4.10 constitutes a guaranty of payment
when due and not of collection, and the Borrower specifically agrees that it
shall not be necessary or required that any Secured Party or any holder of any
Note exercise any right, assert any claim or demand or enforce any remedy
whatsoever against any Account Party or any other Obligor (or any other
Person) before or as a condition to the obligations of the Borrower under the
guaranty contained in this Section 4.10 (such obligations hereinafter referred
to as the "Guaranteed Obligations").
SECTION 4.10.2. Acceleration of Guaranty. The Borrower agrees that, in
the event of the dissolution or insolvency of any Account Party, any other
Obligor or the Borrower, or the inability or failure of any Account Party, any
other Obligor or the Borrower to pay debts as they become due, or an assignment
by any Account Party, any other Obligor or the Borrower for the benefit of
creditors, or the commencement of any case or proceeding in respect of any
Account Party, any other Obligor or the Borrower under any bankruptcy,
insolvency or similar laws, and if such event shall occur at a time when any of
the Guaranteed Obligations of any Account Party may not then be due and payable,
the Borrower agrees that it will pay to the Administrative Agent for the account
of the Secured Parties forthwith the full amount which would be payable under
the guaranty contained in this Section 4.10 by the Borrower if all such
Guaranteed Obligations were then due and payable.
SECTION 4.10.3. Guaranty Absolute, etc. The guaranty contained in this
Section 4.10 shall in all respects be a continuing, absolute, unconditional and
irrevocable guaranty of payment, and shall remain in full force and effect until
all Guaranteed Obligations of the Account Parties have been paid in full in
cash, all Obligations of the Borrower and each other Obligor hereunder have been
paid in full in cash, all Letters of Credit have been terminated or expired and
all Commitments shall have terminated. The Borrower guarantees that the
Guaranteed Obligations of the Account Parties will be paid strictly in
accordance with the terms of this Agreement and each other Loan Document under
which they arise, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Secured Party or any holder of any Note with respect thereto. The liability of
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the Borrower under the guaranty contained in this Section 4.10 shall be
absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of this
Agreement, any Note or any other Loan Document;
(b) the failure of any Secured Party or any holder of any Note
(i) to assert any claim or demand or to enforce any
right or remedy against any Account Party, any other Obligor
or any other Person (including any other guarantor (including
the Borrower)) under the provisions of this Agreement, any
Note, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor (including the Borrower) of, or collateral
securing, any Guaranteed Obligations of any Account Party;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations of any
Account Party, or any other extension, compromise or renewal of any
Guaranteed Obligation of any Account Party;
(d) any reduction, limitation, impairment or termination of
any Guaranteed Obligations of any Account Party for any reason,
including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to (and the Borrower hereby waives
any right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, unenforceability
of, or any other event or occurrence affecting, any Guaranteed
Obligations of any Account Party or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
this Agreement, any Note or any other Loan Document;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or
release or addition of, or consent to departure from, any other
guaranty, held by any Secured Party or any holder of any Note securing
any of the Guaranteed Obligations of any Account Party; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any Account
Party any surety or any guarantor.
SECTION 4.10.4. Reinstatement, etc. The Borrower agrees that the
guaranty contained in this Section 4.10 shall continue to be effective or be
reinstated, as the case may be, if at any time any payment (in whole or in part)
of any of the Guaranteed Obligations is rescinded or must otherwise be restored
by any Secured Party or any holder of any Note, upon the insolvency,
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bankruptcy or reorganization of any Account Party or otherwise, all as though
such payment had not been made.
SECTION 4.10.5. Waiver, etc. The Borrower hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations of any Account Party or any other Obligor and the
guaranty contained in this Section 4.10 and any requirement that the
Administrative Agent, any other Secured Party or any holder of any Note protect,
secure, perfect or insure any security interest or Lien, or any property subject
thereto, or exhaust any right or take any action against any Account Party, any
other Obligor or any other Person (including any other guarantor) or entity or
any collateral securing the Guaranteed Obligations of any Account Party.
SECTION 4.10.6. Postponement of Subrogation, etc. The Borrower agrees
that it will not exercise any rights which it may acquire by way of rights of
subrogation under the guaranty contained in this Section 4.10, by any payment
made under the guaranty contained in this Section 4.10 or otherwise, until the
prior payment in full in cash of all Guaranteed Obligations of each Account
Party, the prior payment in full in cash of all Obligations of the Borrower, the
termination or expiration of all Letters of Credit and the termination of all
Commitments. Any amount paid to the Borrower on account of any such subrogation
rights prior to the payment in full in cash of all Guaranteed Obligations of
each Account Party shall be held in trust for the benefit of the Secured Parties
and each holder of a Note and shall immediately be paid to the Administrative
Agent for the benefit of the Secured Parties and each holder of a Note and
credited and applied against the Guaranteed Obligations of each Account Party,
whether matured or unmatured, in accordance with the terms of this Agreement;
provided, however, that if
(a) the Borrower has made payment to the Secured Parties and
each holder of a Note of all or any part of the Guaranteed Obligations
of any Account Party, and
(b) all Guaranteed Obligations of each Account Party have been
paid in full in cash, all Obligations of the Borrower have been paid in
full in cash, all Letters of Credit have been terminated or expired and
all Commitments have been permanently terminated,
each Secured Party and each holder of a Note agrees that, at the Borrower's
request, the Administrative Agent, on behalf of the Secured Parties and the
holders of the Notes, will execute and deliver to the Borrower appropriate
documents (without recourse and without representation or warranty) necessary to
evidence the transfer by subrogation to the Borrower of an interest in the
Guaranteed Obligations of each Account Party resulting from such payment by the
Borrower. In furtherance of the foregoing, for so long as any Obligations
(including Guaranteed Obligations) or Commitments remain outstanding, the
Borrower shall refrain from taking any action or commencing any proceeding
against any Account Party(or its successors or assigns, whether in connection
with a bankruptcy proceeding or otherwise) to recover any amounts in the respect
of payments made under the guaranty contained in this Section 4.10 to any
Secured Party or any holder of a Note.
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SECTION 4.10.7. Successors, Transferees and Assigns; Transfers of
Notes, etc. The guaranty contained in this Section 4.10 shall:
(a) be binding upon the Borrower, and its successors,
transferees and assigns; and
(b) inure to the benefit of and be enforceable by the
Administrative Agent and each other Secured Party.
Without limiting the generality of the foregoing clause (b), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all rights and benefits in respect thereof granted
to such Lender under any Loan Document (including the guaranty contained in this
Section 4.10) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 12.11 and Article XI.
SECTION 4.11. No Bankruptcy Petition Against TFFC and Budget Funding
Corporation. With respect to each Enhancement Letter of Credit issued hereunder
relating to TFFC or Budget Funding Corporation, each of the Lenders hereby
covenants and agrees that,
(a) prior to the date which is one year and one day after the
payment in full of the latest maturing note issued under the Base
Indenture, it will not institute against, or join with any other Person
in instituting against, TFFC, and
(b) prior to the date which is one year and one day after the
payment in full of the latest maturing commercial paper note issued by
Budget Funding Corporation, it will not institute against, or join with
any other Person in instituting against, Budget Funding Corporation,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy or
similar law; provided, however, that nothing in this Section 4.11 shall
constitute a waiver of any right to indemnification, reimbursement or other
payment from any Obligor pursuant to this Agreement or any other Loan Document.
In the event that any Lender takes action in violation of this Section 4.11, the
Borrower agrees, for the benefit of the holders of the notes issued under the
Base Indenture and the commercial paper notes issued by Budget Funding
Corporation, that it shall cause TFFC or Budget Funding Corporation, as the case
may be, to file an answer with the bankruptcy court or otherwise properly
contest the filing of such a petition by such Lender against TFFC or Budget
Funding Corporation, as the case may be, or the commencement of such action and
raise the defense that such Lender 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; and such Lender shall be liable for
and pay any costs and expenses incurred by TFFC or Budget Funding Corporation,
as the case may be, in connection therewith. The provisions of this Section 4.11
shall survive the termination of the Agreement.
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ARTICLE V
CERTAIN EUROCURRENCY RATE AND OTHER PROVISIONS
SECTION 5.1. Eurocurrency Rate Lending Unlawful. If any Lender shall
determine (which determination shall, upon notice thereof to the Borrower, the
Administrative Agent and the Lenders, be conclusive and binding on the Borrower)
that the introduction of or any change in or in the interpretation of any law
makes it unlawful, or any central bank or other governmental authority asserts
that it is unlawful, for such Lender to make, continue or maintain any Loan as,
or to convert any Loan into, a Eurocurrency Loan of a certain type, the
obligations of such Lender to make, continue, maintain or convert into any such
Loans shall, upon such determination, forthwith be suspended until such Lender
shall notify the Administrative Agent that the circumstances causing such
suspension no longer exist, and all outstanding Eurocurrency Loans of such type
of such Lender shall automatically convert into ABR Loans denominated in
Dollars at the end of the then current Interest Periods with respect thereto or
sooner, if required by such law or assertion, and all Loans of such Lender that
would otherwise have been made or continued as, or converted into, Eurocurrency
Loans shall instead be made as or converted into, or continued as, ABR Loans
denominated in Dollars upon which interest shall be payable at the same time as
the related Eurocurrency Loans.
SECTION 5.2. Deposits Unavailable. If the Administrative Agent shall
have determined that by reason of circumstances affecting the Reference Lenders'
relevant market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to Eurocurrency Loans of such type, then, upon notice from
the Administrative Agent to the Borrower and the Lenders, the obligations of all
Lenders under Section 2.3 and Section 2.4 to make or continue any Loans as, or
to convert any Loans into, Eurocurrency Loans of such type shall forthwith be
suspended until the Administrative Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.
SECTION 5.3. Increased Eurocurrency Loan Costs, etc. The Borrower
agrees to reimburse each Lender for any increase in the cost to such Lender of,
or any reduction in the amount of any sum receivable by such Lender in respect
of, making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, Eurocurrency Loans that arise in connection with any change in, or
the introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in after the date hereof of, any law or regulation, directive, guideline,
decision or request (whether or not having the force of law) of any court,
central bank, regulator or other governmental authority, except for such changes
with respect to increased capital costs and taxes which are governed by Sections
5.5 and 5.6, respectively; provided, however, that the Borrower shall have no
obligation to pay any such additional amount under this Section 5.3 with respect
to any day or days unless such Lender shall have notified the Borrower of its
demand therefor within 45 days of the date upon which such Lender has obtained
audited information with respect to the fiscal year of such lender in which such
day or days occurred. Each such demand shall be provided to the Administrative
Agent and the Borrower in writing and shall state, in reasonable detail, the
reasons therefor and the additional amount required fully to compensate such
Lender on an after-
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tax basis for such increased cost or reduced amount. Such additional amounts
shall be payable by the Borrower directly to such Lender within five Business
Days of its receipt of such notice, and such notice shall, in the absence of
manifest error, be conclusive and binding on the Borrower.
SECTION 5.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a
Eurocurrency Loan) as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any Eurocurrency Loans on a date other than the scheduled
last day of the Interest Period applicable thereto, whether pursuant to
Section 3.1 or otherwise;
(b) any Loans not being made as Eurocurrency Loans in
accordance with the Borrowing Request therefor, whether pursuant to
Section 2.7.4 or otherwise; or
(c) any Loans not being continued as, or converted into,
Eurocurrency Loans in accordance with the Continuation/ Conversion
Notice therefor,
then, upon the written notice of such Lender to the Borrower (with a copy to the
Administrative Agent), the Borrower shall, within five Business Days of its
receipt thereof, pay directly to such Lender such amount as will (in the
reasonable determination of such Lender) reimburse such Lender for such loss or
expense. Such written notice (which shall include calculations in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower.
SECTION 5.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by any Lender or any Person controlling
such Lender, and such Lender determines (in its sole and absolute discretion)
that the rate of return on its or such controlling Person's capital as a
consequence of its Commitments, issuance of or participation in Letters of
Credit or the Loans made by such Lender is reduced to a level below that which
such Lender or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by such Lender to the Borrower, the Borrower shall pay directly to
such Lender within five Business Days additional amounts sufficient to
compensate such Lender or such controlling Person on an after-tax basis for such
reduction in rate of return; provided, however, that the Borrower shall have no
obligation to pay any such additional amount under this Section 5.5 with respect
to any day or days unless such Lender shall have notified the Borrower of its
demand therefor within 45 days of the date upon which such Lender has obtained
audited information with respect to the fiscal year of such lender in which such
day or days occurred. A statement of such Lender as to any
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such additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower. In determining such amount, such Lender may use any method of
averaging and attribution that it (in its sole and absolute discretion) shall
deem applicable.
SECTION 5.6. Taxes. All payments by the Borrower of principal of, and
interest on, the Credit Extensions and all other amounts payable hereunder
(including fees) shall be made free and clear of and without deduction for any
present or future income, excise, stamp or franchise taxes and other taxes,
fees, duties, withholdings or other charges of any nature whatsoever imposed by
any taxing authority, but excluding in the case of each Lender and the
Administrative Agent, taxes imposed on or measured by its overall net income,
overall receipts or overall assets and franchise taxes imposed on it by the
jurisdiction under the laws of which such Lender or the Administrative Agent, as
the case may be, is organized or any political subdivision thereof and, in the
case of each Lender, taxes imposed on or measured by its overall net income,
overall receipts and overall assets and franchise taxes imposed on it by the
jurisdiction of such Lender's Domestic Office or Eurocurrency Office, as the
case may be, or any political subdivision thereof (such non-excluded items being
called "Taxes"). In the event that any withholding or deduction from any payment
to be made by the Borrower hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then the Borrower will
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Administrative Agent an official
receipt or other documentation satisfactory to the Administrative Agent
evidencing such payment to such authority; and
(c) pay to the Administrative Agent for the account of the
Lenders such additional amount or amounts as is necessary to ensure
that the net amount actually received by each Lender will equal the
full amount such Lender would have received had no such withholding or
deduction been required.
Moreover, if any Taxes are directly asserted against the Administrative Agent or
any Lender with respect to any payment received by the Administrative Agent or
such Lender hereunder, the Administrative Agent or such Lender may pay such
Taxes and the Borrower will promptly pay such additional amounts (including any
penalties, interest or expenses) as is necessary in order that the net amount
received by such person after the payment of such Taxes (including any Taxes on
such additional amount) shall equal the amount such person would have received
had no such Taxes been asserted.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent, for the account
of the respective Lenders, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result
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of any such failure. For purposes of this Section 5.6, a distribution hereunder
by the Administrative Agent or any Lender to or for the account of any Lender
shall be deemed a payment by the Borrower.
Upon the request of the Borrower or the Administrative Agent, each
Lender that is organized under the laws of a jurisdiction other than the United
States shall, prior to the due date of any payments under the Notes, execute and
deliver to the Borrower and the Administrative Agent, on or about the first
scheduled payment date in each Fiscal Year, one or more (as the Borrower or the
Administrative Agent may reasonably request) United States Internal Revenue
Service Forms 4224 or Forms 1001 or such other forms or documents (or successor
forms or documents), appropriately completed, as may be applicable to establish
the extent, if any, to which a payment to such Lender is exempt from withholding
or deduction of Taxes.
SECTION 5.7. Payments, Computations, etc. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes,
each Letter of Credit or any other Loan Document shall be made by the Borrower
to the Administrative Agent for the pro rata account of the Lenders entitled to
receive such payment. All such payments required to be made to the
Administrative Agent shall be made, without setoff, deduction or counterclaim,
not later than 12:00 noon (local time) on the date due, in same day or
immediately available funds, to such account as the Administrative Agent shall
specify from time to time by notice to the Borrower. Funds received after that
time shall be deemed to have been received by the Administrative Agent on the
next succeeding Business Day. The Administrative Agent shall promptly remit in
same day funds to each Lender its share, if any, of such payments received by
the Administrative Agent for the account of such Lender. All interest (including
interest on Eurocurrency Loans) and fees shall be computed on the basis of the
actual number of days (including the first day but excluding the last day)
occurring during the period for which such interest or fee is payable over a
year comprised of 360 days (or, in the case of interest on an ABR Loan (other
than when calculated with respect to the Federal Funds Rate), 365 days or, if
appropriate, 366 days). Whenever any payment to be made shall otherwise be due
on a day which is not a Business Day, such payment shall (except as otherwise
required by clause (c) of the definition of the term "Interest Period" with
respect to Eurocurrency Loans) be made on the next succeeding Business Day and
such extension of time shall be included in computing interest and fees, if any,
in connection with such payment.
SECTION 5.8. Sharing of Payments. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Loan (other than pursuant to the terms of
Sections 5.3, 5.4, 5.5 and 5.6) or Letter of Credit in excess of its pro rata
share of payments then or therewith obtained by all Lenders, such Lender shall
purchase from the other Lenders such participations in Loans made by them and/or
Letters of Credit as shall be necessary to cause such purchasing Lender to share
the excess payment or other recovery ratably with each of them; provided,
however, that if all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and each Lender which has sold a participation to the purchasing
Lender shall repay to the purchasing Lender the purchase price to the ratable
extent of such
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recovery together with an amount equal to such selling Lender's ratable share
(according to the proportion of
(a) the amount of such selling Lender's required repayment to
the purchasing Lender
to
(b) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section may, to
the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 5.9) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.
SECTION 5.9. Setoff. Each Lender shall, upon the occurrence of any
Default described in clauses (a) through (d) of Section 9.1.9 or, with the
consent of the Required Lenders, upon the occurrence of any other Event of
Default, have the right to appropriate and apply to the payment of the
Obligations (other than Liquidity Obligations) owing to it (whether or not then
due), and (as security for such Obligations) the Borrower hereby grants to each
Lender a continuing security interest in, any and all balances, credits,
deposits, accounts or moneys of the Borrower then or thereafter maintained with
or otherwise held by such Lender; provided, however, that any such appropriation
and application shall be subject to the provisions of Section 5.8. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such setoff and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff under applicable law
or otherwise) which such Lender may have.
SECTION 5.10. Substitution of Lender. If any Lender has demanded to be
paid additional amounts pursuant to Section 5.3, 5.5 or 5.6 and the payment of
such additional amounts are, and are likely to continue to be, more onerous in
the reasonable judgment of the Borrower than with respect to the other Lenders,
the Borrower shall have the right to seek one or more Eligible Assignees (each,
a "Substitute Lender") to purchase the outstanding Loans of such Lender (the
"Affected Lender"), and if the Borrower locates a Substitute Lender, the
Affected Lender shall, upon
(a) prior written notice to the ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
-▇▇-
▇▇
(▇) payment to the Affected Lender of the purchase price
agreed between it and the Substitute Lender (or, failing such
agreement, a purchase price in the amount of the outstanding principal
amount of the Affected Lender's Loans and accrued interest thereon to
the date of payment) plus any amount (other than principal and
interest) then due to it or accrued for its account hereunder or under
any other Loan Document,
(c) satisfaction of the provisions set forth in Section
12.11.1, and
(d) payment by the Borrower to the Affected Lender and the
Administrative Agent of all reasonable out-of-pocket expenses in
connection with such assignment and assumption (including the
processing fees described in Section 12.11.1),
assign and delegate all its rights and obligations under this Agreement and any
other Loan Document to which it is a party (including its outstanding Loans and
participations in Letter of Credit Outstandings) to the Substitute Lender, and
the Substitute Lender shall assume such rights and obligations, whereupon the
Substitute Lender shall in accordance with Section 12.11.1 become a party to
each Loan Document to which the Affected Lender is a party and shall have the
rights and obligations of a Lender thereunder and the Affected Lender shall be
released from its obligations hereunder and each other Loan Document to the
extent of such assignment and delegation.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Initial Credit Extension. The obligations of the Lenders
and the Issuer to make the initial Credit Extension shall be subject to the
prior or concurrent satisfaction of each of the conditions precedent set forth
in this Section 6.1.
SECTION 6.1.1. Resolutions, etc. The Administrative Agent shall have
received from each of the Borrower, the Parent and each other Obligor a
certificate, dated the Closing Date, of the Secretary or Assistant Secretary of
such Person as to
(a) resolutions of its Board of Directors then in full force
and effect authorizing the execution, delivery and performance of this
Agreement, the Notes and each other Loan Document to be executed by it;
(b) the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement, the Notes and each
other Loan Document executed by it; and
(c) the full force and validity of each Organic Document of
such Person and true and complete copies thereof,
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upon which certificate each Lender, the Issuer and each Agent may conclusively
rely until it shall have received a further certificate of the Secretary of the
Borrower, the Parent or such other Obligor canceling or amending such prior
certificate.
SECTION 6.1.2. Delivery of Notes. The Administrative Agent shall have
received, for the account of each Lender that requests that its Loans be
evidenced by a Note, its Note duly executed and delivered by the Borrower.
SECTION 6.1.3. Acquisition and Transaction Consummated. (a) The
conditions set forth in each of the Stock Purchase Agreements to the obligations
of the Parent to consummate the Acquisition shall have been satisfied in full
(without amendment or waiver of, or other forbearance to exercise any rights
with respect to, any of the terms or provisions thereof by the Parent), and the
Acquisition shall have been consummated in accordance with the terms thereof.
(b) The Parent shall have received gross cash proceeds of at least
$150,000,000 pursuant to the Equity Offering and such proceeds shall have been
used to fund, in part, the Acquisition.
(c) The Parent shall have received gross cash proceeds of not greater
than $50,000,000 pursuant to the Convertible Subordinated Debt Offering and such
proceeds shall have been used to fund, in part, the Acquisition, and the
Borrower shall have received gross cash proceeds of not greater than
$170,000,000 pursuant to the Senior Debt Offering. The terms of the Series B
Notes and the Senior Notes shall be satisfactory in all respects to the
Administrative Agent.
(d) The CP Program shall have been established, and the Liquidity
Facility shall have become effective.
(e) The Administrative Agent shall have received satisfactory evidence
that the Corporate Restructuring shall have occurred on terms and conditions
satisfactory in all respects to the Administrative Agent.
SECTION 6.1.4. Payment of Outstanding Indebtedness, etc. All
Indebtedness identified in Item 8.2.2(b) ("Indebtedness to be Paid") of the
Disclosure Schedule, together with all interest, all prepayment premiums and
other amounts due and payable with respect thereto, shall have been paid in full
(including, to the extent necessary, from proceeds of the initial Credit
Extensions); and all Liens securing payment of any such Indebtedness have been
released and the Administrative Agent shall have received all Uniform Commercial
Code Form UCC-3 termination statements or other instruments as may be suitable
or appropriate in connection therewith.
SECTION 6.1.5. Delivery of Financial Statements. The Administrative
Agent shall have received
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(a) audited consolidated financial statements for the 1995
Fiscal Year and the 1996 Fiscal Year of the Borrower and its
Subsidiaries and Parent and its Subsidiaries; and
(b) unaudited pro forma consolidated balance sheet of the
Parent as at the date of the most recent consolidated balance sheet
delivered pursuant to clause (a) above after giving effect to the
Transaction (including the initial Credit Extension), in each case
satisfactory to the Administrative Agent and the Lenders.
SECTION 6.1.6. Consents, etc. The Administrative Agent shall have
received true and correct copies of all governmental and third party approvals
and consents necessary or advisable in connection with the Transaction
(including the execution and delivery of this Agreement and each other Loan
Document by each Obligor or party hereto and thereto and their performance of
their respective Obligations hereunder and thereunder) and continuing operations
of the Parent and its Subsidiaries (after giving effect to the consummation of
the Transaction) shall have been obtained and be in full force and effect and
all applicable waiting periods shall have expired without any action being taken
or threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the Acquisition or the financing thereof.
SECTION 6.1.7. No Material Adverse Change. There shall not have
occurred a material adverse change in the business, property, operations,
assets, liabilities, condition (financial or otherwise) or prospects of the
Parent and its Subsidiaries, taken as a whole, or the Borrower and its
Subsidiaries, taken as a whole, since December 31, 1996.
SECTION 6.1.8. Availability Under the Borrowing Base. The
Administrative Agent shall have received, with counterparts for each Lender, a
certificate of the chief financial or accounting Authorized Officer of the
Borrower or the Parent, in form and substance satisfactory to the Administrative
Agent, certifying that as of the Closing Date, after giving effect to the
Transaction, the sum of (a) the excess of (i) the Borrowing Base Amount over
(ii) the sum of (A) all Letter of Credit Outstandings plus (B) the aggregate
principal amount of all outstanding Loans (if any) plus (b) unrestricted cash
and Cash Equivalent Investment of the Borrower and its Subsidiaries (exclusive
of any Eligible Cash and Cash Equivalents included in the Borrowing Base Amount)
is not less than $35,000,000.
SECTION 6.1.9. Fees and Expenses of the Transaction. The
Administrative Agent shall have received evidence satisfactory to it that the
fees and expenses to be incurred in connection with the Transaction and the
financing thereof will not exceed $25,000,000 in the aggregate.
SECTION 6.1.10. Business Plan. The Administrative Agent and the Lenders
shall have received a business plan for the 1997 Fiscal Year satisfactory to the
Administrative Agent and the Lenders, financial projections for the period from
the Effective Date to the Stated Maturity Date satisfactory to the
Administrative Agent and the Lenders and a written analysis of the business and
prospects of the Parent and its Subsidiaries (including the Borrower and its
Subsidiaries) for the period from the Effective Date to the Stated Maturity Date
satisfactory to the Administrative Agent and the Lenders.
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SECTION 6.1.11. Closing Date Certificates. The Administrative Agent
shall have received, with counterparts for each Lender, the Borrower Closing
Date Certificate and the Parent Closing Date Certificate, in each case dated the
date of the Closing Date and duly executed and delivered by an Authorized
Officer of the Borrower and Parent, as the case may be, in which certificates
the Borrower and Parent, as the case may be, shall agree and acknowledge that
the statements made therein shall be deemed to be true and correct
representations and warranties of the Borrower and Parent, as the case may be,
made as of such date, and, at the time each such certificate is delivered, such
statements shall in fact be true and correct. All documents and agreements
required to be appended to the Borrower Closing Date Certificate and Parent
Closing Date Certificate, in each case shall be in form and substance
satisfactory to the Administrative Agent.
SECTION 6.1.12. Guaranty. The Administrative Agent shall have received
the Subsidiary Guaranty, dated the Closing Date, duly executed by each
Subsidiary of the Borrower that is a party thereto.
SECTION 6.1.13. Pledge Agreements. The Administrative Agent shall have
received executed counterparts of the Borrower Pledge Agreement, the Parent
Pledge Agreement and the Subsidiary Pledge Agreement, in each case dated as of
the Closing Date and duly executed and delivered by the Borrower, the Parent and
each Subsidiary that is a party to the Subsidiary Pledge Agreement, as the case
may be, together with the certificates, evidencing all of the issued and
outstanding shares of Capital Stock pledged pursuant to each Pledge Agreement,
which certificates shall in each case be accompanied by undated stock powers
duly executed in blank, or, if any securities pledged pursuant to any Pledge
Agreement are uncertificated securities, confirmation and evidence satisfactory
to the Administrative Agent that the security interest in such uncertificated
securities has been transferred to and perfected by the Administrative Agent for
the benefit of the Lenders in accordance with Section 8-313 and Section 8-321 of
the U.C.C. or any similar or local law which may be applicable.
SECTION 6.1.14. Security Agreements. The Administrative Agent shall
have received executed counterparts of the Borrower Security Agreement, the
Subsidiary Security Agreement and the Parent Security Agreement, in each case
dated as of the Closing Date and duly executed and delivered by the Borrower,
each Subsidiary of the Borrower that is a party to the Subsidiary Security
Agreement and the Parent, as the case may be, together with
(a) acknowledgment copies of properly filed Uniform Commercial
Code financing statements (Form UCC-1) or such other evidence of filing
as may be acceptable to the Administrative Agent, or in the discretion
of the Administrative Agent copies suitable for filing, naming in each
case the Borrower, such Subsidiary or the Parent, as the case may be,
as the debtor and the Administrative Agent as the secured party, or
other similar instruments or documents, filed or suitable for filing
under the Uniform Commercial Code of all jurisdictions as may be
necessary or, in the opinion of the Administrative Agent, desirable to
perfect the security interest of the Administrative Agent pursuant to
each Security Agreement;
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(b) executed copies of proper Uniform Commercial Code Form
UCC-3 termination statements, if any, necessary to release all Liens
and other rights of any Person (other than Liens permitted under
Section 8.2.3)
(i) in any collateral described in each Security
Agreement previously granted by any Person, and
(ii) securing any of the Indebtedness identified in
Item 8.2.2(b) ("Indebtedness to be Paid") of the Disclosure
Schedule,
together with such other Uniform Commercial Code Form UCC-3 termination
statements as the Administrative Agent may reasonably request from such
Obligors; and
(c) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report
certified by a party acceptable to the Administrative Agent, dated a
date reasonably near to the Closing Date, listing all effective
financing statements, tax liens and judgment liens which name the
Borrower, such Subsidiaries and the Parent (under their respective
present names and any previous names thereof) as the debtor and which
are filed in the jurisdictions in which filings were made pursuant to
clause (a) above, together with copies of such financing statements
(none of which (other than those described in clause (a), if such Form
UCC-11 or search report, as the case may be, is current enough to list
such financing statements described in clause (a)) shall cover any
collateral described in each Security Agreement).
SECTION 6.1.15. Borrowing Base Certificate. The Administrative Agent
shall have received an initial Borrowing Base Certificate, executed and
delivered by an Authorized Officer of the Borrower, setting forth, as of the
Closing Date, computations of the Borrowing Base Amount in respect of Eligible
Cash and Eligible Cash Equivalents on such date, and, as of March 31, 1997,
computations of the Borrowing Base Amount in respect of Eligible Receivables on
such date.
SECTION 6.1.16. Issuance Request. The Administrative Agent and the
Issuer shall have received an Issuance Request for each Letter of Credit to be
issued on the Closing Date and an Enhancement Letter of Credit Application and
Agreement for each Enhancement Letter of Credit to be issued on the Closing
Date.
SECTION 6.1.17. Opinions of Counsel. The Administrative Agent shall
have received (a) opinions, dated the Closing Date and addressed to the
Administrative Agent and the Lenders, from King & Spalding, counsel to the
Obligors, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, General Counsel of the Borrower, and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, counsel to the Parent, substantially in the form of Exhibits K-1, K-2
and K-3 hereto, respectively, and (b) such reliance letters as it may reasonably
request with respect to opinions delivered in connection with the Transaction
dated the Closing Date and addressed to the Agents, the Issuer and all of the
Lenders.
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SECTION 6.1.18. Closing Fees, Expenses, etc. The Administrative Agent
shall have received for its own account or for the account of each Lender, as
the case may be, all fees, costs and expenses due and payable pursuant to
Sections 3.3 and 12.3, if then invoiced.
SECTION 6.2. All Credit Extensions. The obligation of each Lender
and the Issuer to make any Credit Extension (including the initial Credit
Extension) shall be subject to the satisfaction of each of the conditions
precedent set forth in this Section 6.2.
SECTION 6.2.1. Compliance with Warranties, No Default, etc. Both
before and after giving effect to any Credit Extension (but, if any Default of
the nature referred to in Section 9.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds of any Credit Extension) the following statements
shall be true and correct
(a) the representations and warranties set forth in Article
VII (excluding, however, those contained in Section 7.7) and in each
other Loan Document shall, in each case, be true and correct with the
same effect as if then made (unless stated to relate solely to an early
date, in which case such representations and warranties shall be true
and correct as of such earlier date);
(b) except as disclosed by the Borrower or the Parent to the
Agents, the Issuer and the Lenders pursuant to Section 7.7
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or,
to the best knowledge of the Borrower, threatened against the
Borrower, the Parent or any of their respective Subsidiaries
which might materially adversely affect the Parent's
consolidated business, operations, assets, revenues,
properties or prospects or which purports to affect the
legality, validity or enforceability of this Agreement, the
Notes or any other Loan Document; and
(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to Section 7.7
which might materially adversely affect the consolidated
businesses, operations, assets, revenues, properties or
prospects of the Borrower, the Parent and their respective
Subsidiaries; and
(c) no Default shall have then occurred and be continuing, and
neither the Borrower, the Parent nor any of their respective
Subsidiaries nor any other Obligor is in material violation of any law
or governmental regulation or court order or decree.
SECTION 6.2.2. Credit Request. The Administrative Agent shall have
received a Borrowing Request or Issuance Request, as the case may be, for such
Credit Extension. Each of the delivery of a Borrowing Request or an Issuance
Request and the acceptance by the Borrower of the proceeds of the Borrowing or
the issuance of the Letter of Credit, as applicable, shall
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constitute a representation and warranty by the Borrower that on the date of
such Borrowing (both immediately before and after giving effect to such
Borrowing and the application of the proceeds thereof) or the issuance of the
Letter of Credit, as applicable, the statements made in Section 6.2.1 are true
and correct.
SECTION 6.2.3. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower, the Parent or any of
their respective Subsidiaries or any other Obligor shall be satisfactory in form
and substance to the Administrative Agent and its counsel; the Administrative
Agent and its counsel shall have received all information, approvals, opinions,
documents or instruments as the Administrative Agent or its counsel may
reasonably request.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders, the Issuer and the Agents to enter into
this Agreement and to make Loans and issue Letters of Credit hereunder, each of
the Borrower and the Parent represents and warrants unto each Agent, the Issuer
and each Lender as set forth in this Article VII.
SECTION 7.1. Organization, etc. Each of the Borrower, the Parent and
each of their respective Subsidiaries
(a) is a corporation validly organized and existing and in
good standing under the laws of the jurisdiction of its incorporation,
(b) is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where the nature of its
business requires such qualification, except to the extent that the
failure to so qualify has not had, and could not reasonably be expected
to have, a material adverse effect on the business, property,
operations, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries, taken as a whole, or
the Parent and its Subsidiaries, taken as a whole,
(c) has full power and authority and holds all requisite
governmental licenses, permits and other approvals to enter into and
perform its Obligations under this Agreement, the Notes and each other
Loan Document to which it is a party and to own and hold under lease
its property and to conduct its business substantially as currently
conducted by it, and
(d) subject to Section 7.12, has complied in all material
respects with all laws, rules, regulations and orders applicable to it.
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SECTION 7.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by the Borrower of this Agreement, the Notes and each
other Loan Document executed or to be executed by it, and the execution,
delivery and performance by each of the Parent and each other Obligor of each
Loan Document executed or to be executed by it and the Borrower's, the Parent's
and each such other Obligor's participation in the consummation of the
Transaction are within the Borrower's, the Parent's and each such Obligor's
corporate powers, have been duly authorized by all necessary corporate action,
and do not
(a) contravene the Borrower's, the Parent's or such other
Obligor's Organic Documents;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on or
affecting the Borrower, the Parent or such other Obligor; or
(c) result in, or require the creation or imposition of, any
Lien (other than the Liens created under the Loan Documents in favor of
the Administrative Agent for the benefit of the Secured Parties) on any
of the Borrower's, the Parent's or such other Obligor's properties.
SECTION 7.3. Government Approval, Regulation, etc. Other than those
authorizations, approvals or other actions by, and notices to or filings with,
any governmental authority or regulatory body, if any, which have been duly
obtained or made and are in full force and effect, no additional authorization
or approval or other action by, and no additional notice to or filing with, any
governmental authority or regulatory body or other Person is required for the
due execution, delivery or performance by the Borrower, the Parent or any other
Obligor of this Agreement, the Notes or any other Loan Document to which it is a
party, or for the Borrower's, the Parent's and each such other Obligor's
participation in the consummation of the Transaction. Neither the Borrower, the
Parent nor any of their respective Subsidiaries is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION 7.4. Validity, etc. This Agreement constitutes, and the Notes
and each other Loan Document executed by the Borrower will, on the due execution
and delivery thereof, constitute, the legal, valid and binding obligations of
the Borrower, enforceable against the Borrower in accordance with their
respective terms, except to the extent the enforceability thereof may be limited
by (i) the effect of bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting the rights and
remedies of creditors generally and (ii) the effect of general principles of
equity, whether enforcement is considered in a proceeding in equity or at law;
and each Loan Document executed pursuant hereto by the Parent and each other
Obligor will, on the due execution and delivery thereof by the Parent or such
Obligor, as the case may be, be the legal, valid and binding obligation of the
Parent or such Obligor, as the case may be, enforceable in accordance with its
terms, except to
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the extent the enforceability thereof may be limited by (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights and remedies of
creditors generally and (ii) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law. Each of the Loan
Documents which purports to create a security interest creates a valid first
priority security interest in the Collateral (as defined in such Loan Document)
subject thereto, subject only to Liens permitted by Section 8.2.3, securing the
payment of the Obligations described therein.
SECTION 7.5. Financial Information; Absence of Undisclosed Liabilities.
The financial statements of the Borrower and its Subsidiaries and the Parent and
its Subsidiaries furnished to each Agent and each Lender pursuant to clause (a)
of Section 6.1.5 have been prepared in accordance with GAAP consistently
applied, and present fairly the consolidated financial condition of the
corporations covered thereby as at the dates thereof and the results of their
operations for the periods then ended. To the best knowledge of the Parent and
the Borrower, neither the Parent and its Subsidiaries nor the Borrower and its
Subsidiaries had any material liabilities (matured or unmatured, fixed or
contingent) that were not fully reflected or provided for on the financial
statements delivered pursuant to clause (a) of Section 6.1.5, whether or not
required by GAAP to be shown on such financial statements. The pro forma balance
sheet delivered pursuant to clause (b) of Section 6.1.5 have been prepared in
accordance with the requirements of GAAP for the preparation of pro forma
financial statements. All balance sheets, all statements of operations,
shareholders' equity and cash flow and all other financial information of each
of the Borrower and its Subsidiaries and the Parent and its Subsidiaries
furnished pursuant to Section 8.1.1 have been and will for periods following the
Effective Date be prepared in accordance with GAAP consistently applied, and do
or will present fairly the consolidated financial condition of the corporations
covered thereby as at the dates thereof and the results of their operations for
the periods then ended.
SECTION 7.6. No Material Adverse Change; Absence of Undisclosed
Liabilities. There has been no material adverse change in the business,
property, operations, assets, liabilities, condition (financial or otherwise) or
prospects of the Parent and its Subsidiaries, taken as a whole, or the Borrower
and its Subsidiaries, taken as a whole, since December 31, 1996.
SECTION 7.7. Litigation, Labor Controversies, etc. There is no pending
or, to the best knowledge of the Borrower or the Parent, threatened litigation,
action, proceeding, or labor controversy affecting the Borrower, the Parent or
any of their respective Subsidiaries, or any of their respective properties,
businesses, assets or revenues, which may materially adversely affect the
business, property, operations, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries, taken as a whole,
or the Parent and its Subsidiaries, taken as a whole, or which purports to
affect the legality, validity or enforceability of this Agreement, the Notes or
any other Loan Document, except as disclosed in Item 7.7 ("Litigation") of the
Disclosure Schedule.
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SECTION 7.8. Subsidiaries. (a) The Parent has no direct Subsidiaries,
except for the Borrower.
(b) The Borrower has no Subsidiaries, except those Subsidiaries (i)
which are identified in Item 7.8(b) ("Existing Subsidiaries of the Borrower") of
the Disclosure Schedule by their correct legal name, their jurisdiction of
organization and the holders (and their respective percentage ownership of) the
Capital Stock thereof or (ii) which are permitted to have been acquired in
accordance with Section 8.2.5 or 8.2.10.
SECTION 7.9. Ownership of Properties. Except as permitted pursuant to
Section 7.13 or Section 8.2.3, the Borrower, the Parent and each of their
respective Subsidiaries owns (i) in the case of owned real property, good and
marketable fee title to, and (ii) in the case of owned personal property, good
and valid title to, or, in the case of leased real or personal property, valid
and enforceable leasehold interests (as the case may be) in, all of its
properties and assets, real and personal, tangible and intangible, of any nature
whatsoever, free and clear in each case of all Liens or claims, except for Liens
permitted pursuant to Section 8.2.3.
SECTION 7.10. Taxes. The Borrower, the Parent and each of their
respective Subsidiaries has filed all tax returns and reports required by law to
have been filed by it and has paid all taxes and governmental charges thereby
shown to be due and owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.
SECTION 7.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the date of any Credit Extension hereunder, no
steps have been taken to terminate any Pension Plan, and no contribution failure
has occurred with respect to any Pension Plan sufficient to give rise to a Lien
under section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which might result in the incurrence
by the Borrower, the Parent or any member of the Controlled Group of any
material liability, fine or penalty. Except as disclosed in Item 7.11 ("Employee
Benefit Plans") of the Disclosure Schedule, neither the Borrower, the Parent nor
any member of the Controlled Group has any contingent liability with respect to
any post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
SECTION 7.12. Environmental Warranties. Except as set forth in Item
7.12 ("Environmental Matters") of the Disclosure Schedule (none of which items
disclosed therein, singly or in the aggregate, have, or may reasonably be
expected to have, a material adverse effect on the business, property,
operations, assets, liabilities, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries, taken as a whole, or the Parent and its
Subsidiaries, taken as a whole) and to the best knowledge of the Borrower, the
Parent and their respective Subsidiaries,
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(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrower, the Parent or any of
their respective Subsidiaries have been, and continue to be, owned or
leased and operated by the Borrower, the Parent and such Subsidiary, as
the case may be, in compliance with all Environmental Laws and in
accordance with industry practices, except to the extent any such
failure to comply would, singly or in the aggregate, have, or may
reasonably be expected to have, a material adverse effect on the
business, property, operations, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower and its
Subsidiaries, taken as a whole, or the Parent and its Subsidiaries,
taken as a whole;
(b) there are no pending or threatened
(i) claims, complaints, notices or requests for
information received by the Borrower, the Parent or any of
their respective Subsidiaries with respect to any alleged
violation of any Environmental Law, which, if true, would,
singly or in the aggregate, have, or would reasonably be
expected to have, a material adverse effect on the business,
property, operations, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower and its
Subsidiaries, taken as a whole, or the Parent and its
Subsidiaries, taken as a whole, or
(ii) complaints, notices or inquiries to the
Borrower, the Parent or any of their respective Subsidiaries
regarding potential liability under any Environmental Law,
which, if true, would, singly or in the aggregate, have, or
would reasonably be expected to have, a material adverse
effect on the business, property, operations, assets,
liabilities, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries, taken as a whole, or the
Parent and its Subsidiaries, taken as a whole;
(c) there have been no Releases of Hazardous Materials at, on
or under any property now or previously owned or leased by the
Borrower, the Parent or any of their respective Subsidiaries that,
singly or in the aggregate, have, or may reasonably be expected to
have, a material adverse effect on the business, property, operations,
assets, liabilities, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries, taken as a whole, or the Parent and
its Subsidiaries, taken as a whole;
(d) the Borrower, the Parent and each of their respective
Subsidiaries have been issued and are in material compliance with all
permits, certificates, approvals, licenses and other authorizations
relating to environmental matters and necessary or desirable for their
businesses;
(e) no property now or previously owned or leased by the
Borrower, the Parent or any of their respective Subsidiaries is listed
or proposed for listing (with respect to owned property only) on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list of sites requiring investigation or clean-up;
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(f) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property
now or previously owned or leased by the Borrower, the Parent or any of
their respective Subsidiaries that, singly or in the aggregate, have,
or may reasonably be expected to have, a material adverse effect on the
business, property, operations, assets, liabilities, condition
(financial or otherwise) or prospects of the Borrower and its
Subsidiaries, taken as a whole, or the Parent and its Subsidiaries,
taken as a whole;
(g) neither the Borrower, the Parent nor any of their
respective Subsidiaries has directly transported or directly arranged
for the transportation of any Hazardous Material to any location which
is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list or
which is the subject of federal, state or local enforcement actions or
other investigations which may lead to material claims against the
Borrower, the Parent or such Subsidiary thereof for any remedial work,
damage to natural resources or personal injury, including claims under
CERCLA;
(h) neither the Borrower, the Parent nor any of their
respective Subsidiaries has entered into any agreements or engaged in
any activities that, singly or in the aggregate, would give rise to
liability under any Environmental Law with regard to acts, omissions or
conditions of property of any third party, including any franchisee of
the Borrower, the Parent or any of their respective Subsidiaries, which
liability, singly or in the aggregate, has, or may reasonably be
expected to have, a material adverse effect on the business, property,
operations, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries, taken as a whole, or
the Parent and its Subsidiaries, taken as a whole;
(i) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the
Borrower, the Parent or any of their respective Subsidiaries that,
singly or in the aggregate, have, or may reasonably be expected to
have, a material adverse effect on the business, property, operations,
assets, liabilities, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries, taken as a whole, or the Parent and
its Subsidiaries, taken as a whole; and
(j) no conditions exist at, on or under any property now or
previously owned or leased by the Borrower and its Subsidiaries, which,
with the passage of time, or the giving of notice or both, would give
rise to liability under any Environmental Law that, singly or in the
aggregate, has, or may reasonably be expected to have, a material
adverse effect on the business, property, operations, assets,
liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries, taken as a whole, or the Parent and its
Subsidiaries, taken as a whole.
SECTION 7.13. Intellectual Property. Each of the Borrower, the Parent
and their respective Subsidiaries owns and possesses or licenses (as the case
may be) all such patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, service marks,
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service ▇▇▇▇ rights and copyrights as the Borrower and the Parent considers
necessary for the conduct of the businesses of the Borrower, the Parent and
their respective Subsidiaries as now conducted without, individually or in the
aggregate, any infringement upon rights of other Persons, in each case except as
could not reasonably be expected to result in a material adverse effect on the
business, property, operations, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries, taken as a whole,
or the Parent and its Subsidiaries, taken as a whole, and there is no individual
patent, patent right, trademark, trademark right, trade name, trade name right,
service ▇▇▇▇, service ▇▇▇▇ right or copyright the loss of which would result in
a material adverse change in the business, property, operations, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries, taken as a whole, or the Parent and its Subsidiaries, taken as
a whole, except as may be disclosed in Item 7.13 ("Intellectual Property") of
the Disclosure Schedule.
SECTION 7.14. Regulations G, U and X. Neither the Borrower, the Parent
nor any of their respective Subsidiaries is engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock, and no proceeds
of any Credit Extensions will be used to purchase or carry margin stock or
otherwise for a purpose which violates, or would be inconsistent with, F.R.S.
Board Regulation G, U or X. Terms for which meanings are provided in F.R.S.
Board Regulation G, U or X or any regulations substituted therefor, as from time
to time in effect, are used in this Section with such meanings.
SECTION 7.15. Accuracy of Information. All factual information
heretofore or contemporaneously furnished by the Borrower or the Parent in
writing to any Agent, the Issuer or any Lender for purposes of or in connection
with this Agreement or any transaction contemplated hereby (including the
Transaction, true and complete copies of which were furnished to the each Agent,
the Issuer and each Lender in connection with its execution and delivery hereof)
was true and accurate in every material respect on the date as of which such
information was dated or certified and was not incomplete by omitting to state
any material fact necessary to make such information not misleading. All other
such factual information hereafter furnished by or on behalf of the Borrower or
the Parent to any Agent, the Issuer or any Lender will be true and accurate in
every material respect on the date as of which it is dated or certified and such
information will not be incomplete by omitting to state any material fact
necessary to make such information not misleading.
SECTION 7.16. Stock Purchase Agreements and Senior Note Purchase
Agreements. Each of the representations and warranties made in each of the Stock
Purchase Agreements and the Senior Note Purchase Agreements is true and correct
in all material respects. Each of the Stock Purchase Agreements and the Senior
Note Purchase Agreements constitutes the legal, valid and binding obligations of
each of the parties thereto enforceable in accordance with its terms.
SECTION 7.17. Senior Indebtedness, etc. The subordination provisions
applicable to the Series A Notes and the Series B Notes will be enforceable
against the holders of the Series A Notes and Series B Notes by the holder of
any Senior Indebtedness (as defined in the Series A Note Purchase Agreements and
the Series B Note Purchase Agreements) which has not
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effectively waived the benefits thereof. All Obligations, including those to pay
principal of and interest (including post-petition interest) on the Loans and
Reimbursement Obligations, and fees and expenses in connection therewith,
constitute Senior Indebtedness (as defined in the Series A Note Purchase
Agreements and the Series B Note Purchase Agreements) and all such Obligations
are entitled to the benefits of the subordination created by the Series A Notes
and Series B Notes.
SECTION 7.18. No Burdensome Restrictions. Except as disclosed in the
prospectus filed pursuant to Rule 424(b) under the Securities Act in connection
with the Registration Statement, neither the Borrower or the Parent, nor any of
their respective Subsidiaries, is subject to any law, rule, regulation, order or
agreement which could reasonably be expected to have a material adverse effect
on the currently existing business, property, operations, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries, taken as a whole, or the Parent and its Subsidiaries, taken as a
whole.
ARTICLE VIII
COVENANTS
SECTION 8.1. Affirmative Covenants. The Borrower and the Parent agree
with each Agent, the Issuer and each Lender that, until all Commitments have
terminated and all Obligations have been paid and performed in full, the
Borrower and the Parent will perform the obligations set forth in this Section
8.1.
SECTION 8.1.1. Financial Information, Reports, Notices, etc. The
Borrower and the Parent will furnish, or will cause to be furnished, to each
Lender, the Issuer and each Agent copies of the following financial statements,
reports, notices and information:
(a) as soon as available and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year
of the Parent, consolidated and consolidating balance sheets of the
Parent and its Subsidiaries as of the end of such Fiscal Quarter and
consolidated and consolidating statements of earnings and consolidated
statements of cash flow of the Parent and its Subsidiaries, in each
case other than the consolidated statements of cash flow, for such
Fiscal Quarter and, in each case (including the consolidated statements
of cash flow), for the period commencing at the end of the previous
Fiscal Year and ending with the end of such Fiscal Quarter, certified
by the chief financial or accounting Authorized Officer of the Parent;
(b) as soon as available and in any event within 90 days after
the end of each Fiscal Year of the Parent, a copy of the annual audited
report for such Fiscal Year for the Parent and its Subsidiaries,
including therein consolidated balance sheets of the Parent and its
Subsidiaries as of the end of such Fiscal Year and consolidated
statements of earnings and cash flow of the Parent and its Subsidiaries
for such Fiscal Year, in each case certified (without any Impermissible
Qualification) in a manner acceptable to the Administrative Agent and
the Required Lenders by independent public accountants acceptable to
the
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Administrative Agent and the Required Lenders, together with a report
from such accountants containing a computation of, and showing
compliance with, each of the financial ratios and restrictions
contained in Section 8.2.4 and to the effect that, in making the
examination necessary for the signing of such annual report by such
accountants, they have not become aware of any Default that has
occurred and is continuing, or, if they have become aware of such
Default, describing such Default and the steps, if any, being taken to
cure it;
(c) concurrently with the delivery of the financial statements
referred to in clauses (a) and (b) above, a Compliance Certificate,
executed by the chief financial or accounting Authorized Officer of the
Parent, showing (in reasonable detail and with appropriate calculations
and computations in all respects satisfactory to the Administrative
Agent) compliance with the financial covenants set forth in Section
8.2.4;
(d) as soon as possible and in any event within three days
after the occurrence of each Default, a statement of the chief
financial or accounting Authorized Officer of the Parent or the
Borrower setting forth details of such Default and the action which the
Parent or the Borrower has taken and proposes to take with respect
thereto;
(e) as soon as possible and in any event within five days
after (x) the occurrence of any adverse development with respect to any
litigation, action, proceeding or labor controversy described in
Section 7.7 or (y) the commencement of any labor controversy,
litigation, action or proceeding of the type described in Section 7.7,
notice thereof and copies of all documentation relating thereto;
(f) (i) within 12 Business Days following the last day of each
calendar month, a Borrowing Base Certificate for the preceding calendar
month that is calculated as of the last day of such preceding calendar
month, certified by the chief financial or accounting Authorized
Officer of the Borrower or the Parent and (ii) as soon as possible
following the presentment for payment under any Enhancement Letter of
Credit, a Borrowing Base Certificate for the date of such presentment
that is calculated as of the last day of the calendar month immediately
preceding the month in which such presentment is made, in the case of
the calculation of clauses (a), (c) and (d) of the definition of
"Borrowing Base Amount", and as of the date of such presentment (after
giving effect to any reimbursement made in connection therewith), in
the case of the calculation of clause (b) of the definition of
"Borrowing Base Amount", certified by the chief financial or accounting
Authorized Officer of the Borrower or the Parent;
(g) promptly after the sending or filing thereof, copies of
all reports which the Borrower sends to any of its securityholders, and
all reports and registration statements which the Borrower, the Parent
or any of their respective Subsidiaries files with the Securities and
Exchange Commission or any national securities exchange;
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(h) immediately upon becoming aware of the institution of any
steps by the Borrower or any other Person to terminate any Pension
Plan, or the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under section
302(f) of ERISA, or the taking of any action with respect to a Pension
Plan which could result in the requirement that the Borrower, the
Parent or any of their respective Subsidiaries furnish a bond or other
security to the PBGC or such Pension Plan, or the occurrence of any
event with respect to any Pension Plan which could result in the
incurrence by the Borrower or the Parent of any material liability,
fine or penalty, or any material increase in the contingent liability
of the Borrower with respect to any post-retirement Welfare Plan
benefit, notice thereof and copies of all documentation relating
thereto;
(i) as soon as available and in any event no later than 31
days after the first day of each Fiscal Year of the Parent, an annual
budget, prepared on a monthly basis for such Fiscal Year of the Parent
containing consolidated and consolidating projected statements of
earnings and cash flow of the Parent and its Subsidiaries and the
Borrower and its Subsidiaries;
(j) concurrently with the delivery of the financial statements
described in clause (b) of this Section 8.1.1, a narrative explanation,
in the form customarily provided to the Board of Directors of the
Parent, of any material variance from the budget of the Parent for such
Fiscal Year that is reflected in such financial statements; provided,
however, if the foregoing is not provided to the Board of Directors of
the Parent the same shall, at the request of the Administrative Agent,
be delivered to the Administrative Agent;
(k) as soon as possible and in any event within three days
after the delivery thereof, copies of all notices, agreements or
documents delivered pursuant to the Senior Note Purchase Agreements and
each other agreement for borrowed money to which the Parent or any
Subsidiary of the Parent (other than Vehicle Debt) is a party and with
a commitment or outstandings exceeding $10,000,000, except for such
notices, agreements or documents (i) delivered pursuant to the terms
hereof or (ii) which are delivered in the ordinary course of each such
agreement (such as borrowing requests, letter of credit requests and
the like); and
(l) such other information respecting the condition or
operations, financial or otherwise, of the Borrower, the Parent or any
of their respective Subsidiaries as any Lender through the
Administrative Agent may from time to time reasonably request.
SECTION 8.1.2. Compliance with Laws, Material Agreements, etc. The
Borrower and the Parent will, and will cause each of their respective
Subsidiaries to, comply in all material respects with all applicable laws,
rules, regulations, orders and material agreements, such compliance to include:
(a) the maintenance and preservation of its corporate
existence and qualification as a foreign corporation;
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(b) the maintenance and preservation of all governmental
licenses, permits and other approvals necessary for it to perform its
obligations under this Agreement, the Notes and each other Loan
Document to which it is a party and to own and hold under lease its
property and to conduct its business substantially as currently
conducted by it;
(c) the maintenance, preservation and renewal of all material
agreements necessary to conduct its business substantially as currently
conducted by it (or the substitution for any such material agreement
with a similar agreement), including the Supply Agreement dated as of
the date hereof, between Ford Motor Company and the Borrower, and the
Advertising Agreement dated as of the date hereof, between Ford Motor
Company and the Borrower; and
(d) the payment, before the same become delinquent, of all
taxes, assessments and governmental charges imposed upon it or upon its
property except to the extent being diligently contested in good faith
by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.
SECTION 8.1.3. Maintenance of Properties. The Borrower and the Parent
will, and will cause each of their respective Subsidiaries to, maintain,
preserve, protect and keep its properties in good repair, working order and
condition, and make necessary and proper repairs, renewals and replacements so
that its business carried on in connection therewith may be properly conducted
at all times unless the Borrower determines in good faith that the continued
maintenance of any of its properties is no longer economically desirable.
SECTION 8.1.4. Insurance. The Borrower and the Parent will, and will
cause each of their respective Subsidiaries to, maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
properties and business (including business interruption insurance) against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of similar businesses of established reputation and will,
upon request of the Administrative Agent, furnish to each Lender at reasonable
intervals a certificate of an Authorized Officer of the Borrower or the Parent
setting forth the nature and extent of all insurance maintained by the Borrower,
the Parent and their respective Subsidiaries in accordance with this Section.
SECTION 8.1.5. Books and Records. The Borrower and the Parent will, and
will cause each of their respective Subsidiaries to, keep books and records
which accurately reflect all of their respective business affairs and
transactions and permit each Agent and each Lender or any of their respective
representatives, at reasonable times and intervals, to visit all of their
respective offices, to discuss their respective financial matters with their
respective officers and independent public accountant (and the Borrower and the
Parent each hereby authorizes such independent public accountants to discuss
such financial matters with each Lender or its representatives whether or not
any representative of the Borrower, the Parent or such Subsidiary is present)
and to examine (and, at the expense of the Borrower, photocopy extracts from)
any of their respective books or other corporate records. The Borrower shall pay
any fees of such
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independent public accountant incurred in connection with the either Agent's or
any Lender's exercise of its rights pursuant to this Section.
SECTION 8.1.6. Environmental Covenant. The Borrower and the Parent
will, and will cause each of their respective Subsidiaries to,
(a) use and operate all of their respective facilities and
properties in material compliance with all Environmental Laws, keep all
necessary permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain
in material compliance therewith, and handle all Hazardous Materials in
material compliance with all applicable Environmental Laws;
(b) follow practices that are at least as effective as
industry practices to minimize and respond to spills and overfills of
petroleum products;
(c) respond to past and ongoing releases of
petroleum-containing materials in a manner that, as prudent, minimizes
potential liability to third parties for off-site contamination from
facilities owned or leased or otherwise operated by the Borrower, the
Parent or any of their respective Subsidiaries;
(d) respond to past and ongoing releases of
petroleum-containing materials in a manner that, as prudent, minimizes
any likelihood that the Borrower, the Parent or any of their respective
Subsidiaries would incur costs or damages that, singly or in the
aggregate, have, or may reasonably be expected to have, a material
adverse effect on the business, property, operations, assets,
liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries, taken as a whole or the Parent and its
Subsidiaries, taken as a whole;
(e) manage the disposition of residuals such as spent
petroleum-containing material in a manner that, as prudent, minimizes
any likelihood that the Borrower, the Parent or any of their respective
Subsidiaries would incur costs or damages that, singly or in the
aggregate, have, or may reasonably be expected to have, a material
adverse effect on the business, property, operations, assets,
liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries, taken as a whole or the Parent and its
Subsidiaries, taken as a whole;
(f) immediately notify the Administrative Agent and provide
copies upon receipt of all written claims, complaints, notices or
inquiries relating to the condition of their facilities and properties
or compliance with Environmental Laws; and
(g) provide such information and certifications which the
Administrative Agent may reasonably request from time to time to
evidence compliance with this Section 8.1.6.
SECTION 8.1.7. Use of Proceeds. The Borrower shall apply the proceeds
of each Credit Extension in accordance with the sixth recital; without limiting
the foregoing, no proceeds of any
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Loan will be used to acquire any equity security of a class which is registered
pursuant to Section 12 of the Exchange Act or any "margin stock", as defined in
F.R.S. Board Regulation U.
SECTION 8.1.8. Foreign Subsidiaries as of the Closing Date. Unless
otherwise agreed to by the Required Lenders, the Borrower or its applicable
Subsidiary (which Subsidiary, if not theretofore a party to the Subsidiary
Pledge Agreement, shall execute and deliver to the Administrative Agent a
supplement to the Subsidiary Pledge Agreement for the purpose of becoming a
pledgor thereunder, which supplement shall be in form and substance reasonably
satisfactory to the Administrative Agent) shall no later than 180 days following
the Closing Date, pursuant to a Pledge Agreement (as further supplemented, if
necessary, by a Foreign Pledge Agreement) to which the Borrower or such pledgor
Subsidiary is a party,
(a) pledge to the Administrative Agent all of the outstanding
shares of the Capital Stock of each Foreign Subsidiary owned by the
Borrower or such pledgor Subsidiary on the Closing Date, together with
undated stock powers or equivalent instruments of transfer satisfactory
to the Administrative Agent for such certificates or such other
evidence of beneficial ownership, executed in blank or otherwise, so as
to perfect the security interest of the Administrative Agent therein in
accordance with applicable law (or, if any such shares of Capital Stock
are uncertificated, confirmation and evidence satisfactory to the
Administrative Agent that the security interest in such uncertificated
securities has been perfected by the Administrative Agent in accordance
with applicable law); provided, however, that the Borrower or such
Subsidiary shall not be required to pledge the shares of Capital Stock
of a Foreign Subsidiary required to be pledged hereunder to the extent
such pledge would (x) constitute an investment in earnings in United
States property under Section 956 (or any successor provision thereto)
of the Code that would increase the amount of income of the applicable
pledgor that would otherwise be subject to United States income tax and
(y) subject the Borrower, the Parent or the Person the Capital Stock of
which is being pledged to a significant adverse tax consequence, as
determined by the Parent and evidenced by a certificate of the chief
financial or accounting Authorized Officer of the Parent that is
accepted in writing by the Administrative Agent (such acceptance not to
be unreasonably withheld); and
(b) the Borrower or such pledgor Subsidiary shall take all
such actions and execute any such documents, certificates or
instruments as may be necessary or, in the reasonable opinion of the
Administrative Agent, desirable to perfect the first priority security
interest of the Administrative Agent in the interests of the Borrower
or such Subsidiary in such Foreign Subsidiary pledged pursuant to such
Pledge Agreement (and such Foreign Pledge Agreement, if applicable);
together with such opinions of legal counsel as the Administrative Agent may
reasonably request, which legal opinions shall be in form and substance
reasonably satisfactory to the Administrative Agent.
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SECTION 8.1.9. Future Subsidiaries. Without limiting the effect of any
provision contained herein (including Section 8.2.5), upon any Person becoming
either a direct or indirect Subsidiary of the Borrower (other than an SPC or a
Non-Material Subsidiary),
(a) in the event such Person is a Subsidiary which is not a
Foreign Subsidiary, such Person (i) if not theretofore a party to the
Subsidiary Guaranty, shall execute and deliver to the Administrative
Agent a supplement to the Subsidiary Guaranty for the purpose of
becoming a guarantor thereunder, which supplement shall be
substantially in the form attached to the Subsidiary Guaranty, and (ii)
if not theretofore a party to the Subsidiary Security Agreement, shall
execute and deliver to the Administrative Agent a supplement to the
Subsidiary Security Agreement for the purpose of becoming a grantor
thereunder, which supplement shall be substantially in the form
attached to the Subsidiary Security Agreement;
(b) the Borrower or such Subsidiary (which Subsidiary, if not
theretofore a party to the Subsidiary Pledge Agreement, shall execute
and deliver to the Administrative Agent a supplement to the Subsidiary
Pledge Agreement for the purpose of becoming a pledgor thereunder,
which supplement shall be substantially in the form attached to the
Subsidiary Pledge Agreement) shall, pursuant to the Pledge Agreement
(as further supplemented, if necessary, by a Foreign Pledge Agreement)
to which the Borrower or such Subsidiary is a party, pledge to the
Administrative Agent all of the outstanding shares of the Capital Stock
of such Person owned by the Borrower or such Subsidiary, together with
(A) undated stock powers or equivalent instruments of transfer
satisfactory to the Administrative Agent for such certificates or such
other evidence of beneficial ownership, executed in blank (or, if any
such shares of Capital Stock are uncertificated, confirmation and
evidence satisfactory to the Administrative Agent that the security
interest in such uncertificated securities has been perfected by the
Administrative Agent in accordance with Section 8-313 and Section 8-321
of the U.C.C. or any similar or local law which may be applicable) and
(B) executed copies of Uniform Commercial Code financing statements
naming the Borrower or such Subsidiary as the debtor and the
Administrative Agent as the secured party, suitable for filing under
the Uniform Commercial Code of all jurisdictions as may be necessary
or, in the reasonable opinion of the Administrative Agent, desirable to
perfect the first priority security interest of the Administrative
Agent in the interests of the Borrower or such Subsidiary in such
Person pledged pursuant to such Pledge Agreement (and such Foreign
Pledge Agreement, if applicable); provided, however, that the Borrower
or such Subsidiary shall not be required to pledge the shares of
Capital Stock of a Foreign Subsidiary required to be pledged hereunder
(1) if the Required Lenders have otherwise agreed or (2) to the extent
such pledge would (x) constitute an investment in earnings in United
States property under Section 956 (or any successor provision thereto)
of the Code that would increase the amount of income of the applicable
pledgor that would otherwise be subject to United States income tax and
(y) subject the Borrower, the Parent or the Person the Capital Stock of
which is being pledged to a significant adverse tax consequence, as
determined by the Parent and evidenced by a certificate of the chief
financial or accounting
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Authorized Officer of the Parent that is accepted in writing by the
Administrative Agent (such acceptance not to be unreasonably withheld);
(c) the Administrative Agent shall have received from each
such Subsidiary certified copies of Uniform Commercial Code Requests
for Information or Copies (Form UCC-11), or a similar search report
certified by a party acceptable to the Administrative Agent, dated a
date reasonably near (but prior to) the date of any such Person
becoming a direct or indirect Subsidiary of the Borrower, listing all
effective financing statements, tax liens and judgment liens which name
such Person as the debtor and which are filed in the jurisdictions in
which filings are to be made pursuant to this Agreement and the other
Loan Documents, and in such other jurisdictions as the Administrative
Agent may reasonably request, together with copies of such financing
statements (none of which (other than financing statements (i) filed
pursuant to the terms hereof in favor of the Administrative Agent, if
such Form UCC-11 or search report, as the case may be, is current
enough to list such financing statements, (ii) being terminated
pursuant to termination statements that are to be delivered on or prior
to the date such Person becomes such Subsidiary or (iii) in respect of
Liens permitted under Section 8.2.3) shall cover any of the collateral
described in the Subsidiary Security Agreement); and
(d) the Administrative Agent shall have received from each
such Subsidiary executed copies of U.C.C. financing statements naming
each such Subsidiary as the debtor and the Administrative Agent as the
secured party, suitable for filing under the U.C.C. of all
jurisdictions as may be necessary or, in the reasonable opinion of the
Administrative Agent, desirable to perfect the first priority security
interest of the Administrative Agent pursuant to the Subsidiary
Security Agreement entered into by such Subsidiary,
together, in each case, with such opinions of legal counsel as the
Administrative Agent may reasonably request, which legal opinions shall be in
form and substance reasonably satisfactory to the Administrative Agent.
SECTION 8.2. Negative Covenants. The Borrower and the Parent agree
with each Agent, the Issuer and each Lender that, until all Commitments have
terminated and all Obligations have been paid and performed in full, the
Borrower will perform the obligations set forth in this Section 8.2.
SECTION 8.2.1. Business Activities. The Borrower and the Parent will
not, and will not permit any of their respective Subsidiaries to, engage in any
business activity, except those described in the first recital and such
activities as may be incidental or related thereto, including, the ownership and
operation of parking lots, the ownership and rental of recreation vehicles and
the ownership and operation of limousine services, taxi fleets or car
dealerships.
SECTION 8.2.2. Indebtedness. The Borrower and the Parent will not, and
will not permit any of their respective Subsidiaries to, create, incur, assume
or suffer to exist or otherwise
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become or be liable in respect of any Indebtedness, other than, without
duplication, the following:
(a) Indebtedness in respect of the Loans and other
Obligations;
(b) until the Closing Date, Indebtedness and identified in
Item 8.2.2(b) ("Indebtedness to be Paid") of the Disclosure Schedule;
(c) Indebtedness existing as of a date not more than 30 days
prior to the Effective Date which is identified in Item 8.2.2(c)
("Ongoing Indebtedness") of the Disclosure Schedule (provided that any
item of Indebtedness existing as of the Effective Date having a
principal amount not exceeding $500,000 that is not identified in such
Item 8.2.2(c) shall be permitted hereunder to the extent the aggregate
principal amount of all such Indebtedness does not exceed $2,500,000);
(d) Indebtedness of the Borrower in respect of the Senior
Notes in an aggregate principal amount not to exceed $170,000,000 less
the portion thereof repaid or prepaid, and guaranties thereof of the
Subsidiary Guarantors;
(e) Indebtedness of the Parent in respect of the Series A
Notes in an aggregate principal amount not to exceed $80,000,000 less
the portion thereof represented by Series A Notes which have been
exchanged for common stock of the Parent;
(f) Indebtedness of the Parent in respect of the Series B
Notes in an aggregate principal amount not to exceed $50,000,000 less
the portion thereof represented by Series B Notes which have been
exchanged for common stock of the Parent;
(g) Vehicle Debt;
(h) Indebtedness in respect of the Demand Capitalization Note
to the extent the obligations of the Borrower thereunder (whether
contingent or otherwise) do not exceed at any time $31,500,000;
(i) Indebtedness of Foreign Subsidiaries incurred for working
capital purposes to the extent the aggregate principal amount thereof
does not exceed at any time outstanding $30,000,000;
(j) Indebtedness in an aggregate principal amount not to
exceed $40,000,000 at any time outstanding which is incurred by the
Borrower or any of its Subsidiaries to a vendor of any assets permitted
to be acquired pursuant to Section 8.2.7 to finance its acquisition of
such assets;
(k) unsecured Indebtedness incurred in the ordinary course of
business (including open accounts extended by suppliers on normal trade
terms in connection with purchases
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of goods and services, but excluding Indebtedness incurred through the
borrowing of money or Contingent Liabilities);
(l) Indebtedness in respect of Capitalized Lease Liabilities
to the extent permitted by Section 8.2.7;
(m) Hedging Obligations of the Parent or any of its
Subsidiaries pursuant to agreements designed to protect the Parent or
any of its Subsidiaries against fluctuations in interest rates in
respect of Indebtedness of the Parent or such Subsidiary and not
entered into for purposes of speculation;
(n) Hedging Obligations of the Parent or any of its
Subsidiaries pursuant to agreements designed to protect the Parent or
any of its Subsidiaries against fluctuations in currency values and
entered into in the ordinary course of business and not for purposes of
speculation;
(o) Indebtedness of the Parent owing to the Borrower pursuant
to an Investment of the Borrower permitted pursuant to clause (e) of
Section 8.2.5;
(p) Indebtedness of the Borrower or any Subsidiary Guarantor
owing to the Parent;
(q) Indebtedness of the Borrower or any Subsidiary of the
Borrower owing to a Subsidiary of the Borrower (other than a Subsidiary
Guarantor); provided that any such Indebtedness of the Borrower (other
than Indebtedness of the Borrower owing to TFFC in respect of amounts
advanced by TFFC to the Borrower based upon TFFC's Profits (as defined
in the Base Indenture or any supplement thereto)) constitutes
Subordinated Intercompany Debt;
(r) Indebtedness of Subsidiary Guarantors that are Wholly
Owned Subsidiaries of the Borrower owing to the Borrower or a
Subsidiary Guarantor;
(s) Indebtedness of Subsidiaries of the Borrower owing to the
Borrower or a Subsidiary Guarantor to the extent permitted by clause
(g) of Section 8.2.5;
(t) Contingent Liabilities of the Parent in respect of
guarantees of the Parent in respect of Indebtedness of a Foreign
Subsidiary of the type permitted and described in clause (g) or (i)
above;
(u) Indebtedness which refinances Indebtedness permitted by
clauses (d), (e) and (f) above; provided, however, that after giving
effect to such refinancing, (i) the principal amount of outstanding
Indebtedness is not increased, (ii) neither the tenor nor the average
life thereof is reduced, (iii) the respective obligor or obligors shall
be the same on the refinancing Indebtedness as on the Indebtedness
being refinanced, (iv) the security, if any, for the refinancing
Indebtedness shall be the same as that for the Indebtedness being
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refinanced (except to the extent that less security is granted to
holders of refinancing Indebtedness), (v) the holders of refinancing
Indebtedness are not afforded covenants, defaults, rights or remedies
more burdensome to the obligor or obligors than those contained in the
Indebtedness being refinanced and (vi) the refinancing Indebtedness is
subordinated to the same degree, if any, as the Indebtedness being
refinanced; and
(v) other Indebtedness of the Borrower and its Subsidiaries in
an aggregate amount not to exceed (i) during the 1997 Fiscal Year or
the 1998 Fiscal Year, $25,000,000 and (ii) during the 1999 Fiscal Year
or any Fiscal Year thereafter, $35,000,000;
provided, however, that no Indebtedness otherwise permitted by clauses (i), (j),
(l), (m), (n), (s) or (v) shall be permitted if, after giving effect to the
incurrence thereof, any Default shall have occurred and be continuing.
SECTION 8.2.3. Liens. The Borrower and the Parent will not, and will
not permit any of their respective Subsidiaries to, create, incur, assume or
suffer to exist any Lien upon any of its property, revenues or assets, whether
now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations, granted
pursuant to any Loan Document;
(b) Liens securing payment of Indebtedness of the type
permitted and described in clause (b) of Section 8.2.2;
(c) Liens granted prior to the Effective Date to secure
payment of Indebtedness of the type permitted and described in clause
(c) of Section 8.2.2;
(d) Liens granted to secure payment of Vehicle Debt and
covering only Vehicles financed by such Vehicle Debt, Excluded
Receivables relating to such Vehicles, rights under the Demand
Capitalization Note, cash (and investments thereof in High Quality
Investments) of an SPC arising from the operations of such SPC and all
proceeds of the foregoing;
(e) Liens granted to secure payment of Indebtedness of the
type permitted and described in clause (i) of Section 8.2.2 and
covering only assets of the Foreign Subsidiary obligated under such
Indebtedness;
(f) Liens granted to secure payment of Indebtedness of the
type permitted and described in clause (j) of Section 8.2.2 and
covering only those assets acquired with the proceeds of such
Indebtedness;
(g) Liens granted to secure payment of Indebtedness (other
than Subordinated Intercompany Debt) of the type permitted and
described in clause (q), (r) or (s) of Section 8.2.2;
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(h) Liens for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(i) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for sums not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(j) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance
of tenders, statutory obligations, leases and contracts (other than for
borrowed money) entered into in the ordinary course of business or to
secure obligations on surety or appeal bonds;
(k) judgment Liens in existence less than 30 days after the
entry thereof or with respect to which execution has been stayed or the
payment of which is covered in full (subject to a customary deductible)
by insurance maintained with responsible insurance companies; and
(l) other Liens securing Indebtedness in an aggregate amount
not to exceed $25,000,000 at any time outstanding (it being
acknowledged that any such Liens shall not cover any property, revenues
or assets constituting Collateral (as such term is defined in any Loan
Document)).
Notwithstanding the foregoing clauses (b) through (l), the Borrower and
the Parent will not, and will not permit any of their respective Subsidiaries
to, create, incur, assume or suffer to exist any Lien upon or with respect to
any trademarks, software systems, reservations systems or other intellectual
property (or rights in respect of any thereof), whether now owned or hereafter
acquired.
SECTION 8.2.4. Financial Condition. The Borrower and the Parent will
not permit:
(a) the Net Worth of the Parent to be at any time less than
the sum, at such time, of (i) $294,500,000, plus (ii) 50% of the Net
Income of the Parent for each Fiscal Year, commencing with the 1997
Fiscal Year, as shall have been completed on or prior to such time (in
each case with no reduction for net losses) plus 50% of Net Equity
Proceeds;
(b) the Leverage Ratio, as of the last day of each Fiscal
Quarter, commencing with the third Fiscal Quarter of the 1997 Fiscal
Year, to be greater than the ratio set forth opposite such Fiscal
Quarter below:
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FISCAL QUARTER RATIO
-------------- -----
The third Fiscal Quarter of the
1997 Fiscal Year 5.60:1.00
The fourth Fiscal Quarter of
the 1997 Fiscal Year 5.60:1.00
The first Fiscal Quarter of the
1998 Fiscal Year 5.25:1.00
The second Fiscal Quarter of
the 1998 Fiscal Year 5.00:1.00
The third Fiscal Quarter of the
1998 Fiscal Year 4.75:1.00
The fourth Fiscal Quarter of
the 1998 Fiscal Year 4.25:1.00
The first Fiscal Quarter of the
1999 Fiscal Year 4.00:1.00
The second Fiscal Quarter of
the 1999 Fiscal Year 3.75:1.00
The third Fiscal Quarter of the
1999 Fiscal Year 3.50:1.00
The fourth Fiscal Quarter of 3.25:1.00
the 1999 Fiscal Year and
each Fiscal Quarter
thereafter
(c) the Interest Coverage Ratio, as of the last day of each Fiscal
Quarter, commencing with the third Fiscal Quarter of the 1997 Fiscal Year,
to be less than the ratio set forth opposite such Fiscal Quarter below:
FISCAL QUARTER RATIO
-------------- -----
The third Fiscal Quarter of the
1997 Fiscal Year 2.50:1.00
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The fourth Fiscal Quarter of the
1997 Fiscal Year 2.50:1.00
The first Fiscal Quarter of the
1998 Fiscal Year 2.50:1.00
The second Fiscal Quarter of
the 1998 Fiscal Year 2.75:1.00
The third Fiscal Quarter of the
1998 Fiscal Year 2.75:1.00
The fourth Fiscal Quarter of the
1998 Fiscal Year 3.00:1.00
The first Fiscal Quarter of the
1999 Fiscal Year 3.00:1.00
The second Fiscal Quarter of
the 1999 Fiscal Year 3.00:1.00
The third Fiscal Quarter of the
1999 Fiscal Year and each
Fiscal Quarter thereafter 3.25:1.00
SECTION 8.2.5. Investments. The Borrower and the Parent will not, and
will not permit any of their respective Subsidiaries to, make, incur, assume or
suffer to exist any Investment in any other Person, except:
(a) Investments existing on the Effective Date and identified
in Item 8.2.5(a) ("Ongoing Investments") of the Disclosure Schedule;
(b) Cash Equivalent Investments and High Quality Investments;
(c) Investments which are Permitted Business Acquisitions;
(d) without duplication, Investments permitted as Capital
Expenditures pursuant to Section 8.2.7;
(e) Investments by the Borrower in the Parent, by way of
contributions to capital or the making of loans or advances, to the
extent the amount of such Investment would be permitted as a dividend
pursuant to clause (a) of Section 8.2.6 at the time of such Investment;
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(f) Investments by the Borrower and Subsidiary Guarantors in
Subsidiary Guarantors that are Wholly Owned Subsidiaries of the
Borrower;
(g) Investments by the Borrower and Subsidiary Guarantors in
Subsidiaries of the Borrower that are not permitted by the preceding
clause (f), by way of contributions to capital, the making of loans or
advances or the incurrence of Contingent Liabilities, to the extent the
aggregate amount of such Investments in any Fiscal Year does not exceed
$15,000,000 and the aggregate amount of such Investments at any time
outstanding does not exceed $50,000,000;
(h) Investments by the Parent in the Borrower or any
Subsidiary Guarantor;
(i) Investments by a Subsidiary of the Borrower (other than a
Subsidiary Guarantor) in the Borrower or a Subsidiary of the Borrower;
(j) without duplication, Investments permitted as Contingent
Liabilities pursuant to Section 8.2.2; and
(k) other Investments in an aggregate amount at any one time
not to exceed $25,000,000;
provided, however, that
(i) any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent Investment"
or "High Quality Investment" may continue to be held notwithstanding
that such Investment if made thereafter would not comply with such
requirements; and
(ii) no Investment otherwise permitted by clause (c), (e), (g)
or (k) shall be permitted to be made if, immediately before or after
giving effect thereto, any Default shall have occurred and be
continuing.
SECTION 8.2.6. Restricted Payments, etc. On and at all times after the
Effective Date:
(a) the Borrower will not declare, pay or make any
Distribution with respect to any shares of its Capital Stock (now or
hereafter outstanding) or on any warrants, options or other rights with
respect to any such shares of Capital Stock (now or hereafter
outstanding) or apply, or permit any of its Subsidiaries to apply, any
of its funds, property or assets to the purchase, redemption, sinking
fund or other retirement of, or agree or permit any of its Subsidiaries
to purchase or redeem, any shares of any class of Capital Stock (now or
hereafter outstanding) of the Borrower, or warrants, options or other
rights with respect to any such shares of Capital Stock (now or
hereafter outstanding) of the Borrower; provided, however, that the
Borrower may
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(i) make Distributions to the Parent to the extent
that it is necessary to permit the Parent to pay taxes based
on income and franchise taxes and other similar licensure
expenses and other actual and reasonable general
administrative costs and expenses attributable to the
operations of the Parent;
(ii) make Distributions to the Parent to the extent
it is necessary to make payments of interest on the Series A
Notes and Series B Notes on the regular scheduled dates
therefor, so long as, immediately before and after giving
effect thereto, no Default shall have occurred and be
continuing; and
(iii) make a Distribution to the Parent to the extent
necessary to make a Distribution declared by the Parent (but
in no event exceeding the amount of such Distribution
permitted to be made by the Parent pursuant to the succeeding
clause (b)) , so long as, immediately before and after giving
effect thereto, no Default shall have occurred and be
continuing and the Distribution by the Parent is so made at
such time;
(b) the Parent will not declare, pay or make any Distribution
with respect to any shares of its Capital Stock (now or hereafter
outstanding) or on any warrants, options or other rights with respect
to any such shares of Capital Stock (now or hereafter outstanding) or
apply, or permit any of its Subsidiaries to apply, any of its funds,
property or assets to the purchase, redemption, sinking fund or other
retirement of, or agree or permit any of its Subsidiaries to purchase
or redeem, any shares of any class of Capital Stock (now or hereafter
outstanding) of the Parent, or warrants, options or other rights with
respect to any such shares of Capital Stock (now or hereafter
outstanding) of the Parent; provided, however, that the Parent may
declare, pay and make cash Distributions to its stockholders in any
Fiscal Year, so long as
(i) both before and after giving effect to any such
payment, no Default shall have occurred and be continuing,
(ii) the Parent shall have delivered to the
Administrative Agent (A) financial statements prepared on a
pro forma basis to give effect to such Distribution for the
period of four consecutive Fiscal Quarters ending with the
Fiscal Quarter then last ended for which financial statements
and the Compliance Certificate relating thereto have been
delivered to the Administrative Agent pursuant to Sections
8.1.1 and (B) a certificate of the Parent executed by its
chief financial or accounting Authorized Officer demonstrating
that the financial results reflected in such financial
statements would comply with the requirements of Section 8.2.4
for the Fiscal Quarter in which such Distribution is to be
made, and
(iii) the aggregate amount of such Distribution to be
made by the Parent pursuant to this clause (b), when added to
the aggregate amount of all such Distributions during the
Fiscal Year in which such Distribution would be made, does not
exceed the amount set forth below opposite such Fiscal Year
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FISCAL YEAR AMOUNT
----------- ------
1997 Fiscal Year $3,000,000
1998 Fiscal Year The lesser of (i) 15% of
Net Income of the
Parent for the 1997
Fiscal Year and
(ii) $6,000,000
1999 Fiscal Year 15% of Net Income of the
Parent for the 1998
Fiscal Year
2000 Fiscal Year and each 20% of Net Income of the
Fiscal Year thereafter Parent for the
immediately prior
Fiscal Year
(c) the Borrower will not permit any of its Subsidiaries to
declare, pay or make any Distribution with respect to any shares of
Capital Stock (now or hereafter outstanding) of any such Subsidiary
(other than (x) with respect to any such shares held by the Borrower or
any of its Wholly Owned Subsidiaries and (y) with respect to such
shares which are shares of common stock, so long as such Distribution
is made on a pro rata basis, consistent with the ownership interests in
such shares of common stock, to the owners of such shares of common
stock) or apply any of its funds, property or assets to the purchase,
redemption, sinking fund or other retirement of, or agree to purchase
or redeem, any shares of any class of Capital Stock (now or hereafter
outstanding) of any such Subsidiary, or warrants, options or other
rights with respect to any such shares of Capital Stock (now or
hereafter outstanding) of any such Subsidiary (other than any such
shares, warrants, options or other rights held by the Borrower or any
of its Wholly Owned Subsidiaries);
(d) the Borrower and the Parent will not, and will not permit
any of their respective Subsidiaries to
(i) make any payment or prepayment of principal of,
or make any payment of interest on, any Subordinated Debt on
any day other than the stated, scheduled date for such payment
or prepayment set forth in the documents and instruments
memorializing such Subordinated Debt, or which would violate
the subordination provisions of such Subordinated Debt; or
(ii) redeem, purchase or defease, any Subordinated
Debt; and
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(e) the Borrower and the Parent will not, and will not permit
any of their respective Subsidiaries to, make any deposit for any of
the foregoing purposes.
SECTION 8.2.7. Capital Expenditures, etc. The Borrower and the Parent
will not, and will not permit any of their respective Subsidiaries to, make or
commit to make Capital Expenditures in any Fiscal Year, except (a) Capital
Expenditures for the acquisition of Vehicles and (b) other Capital Expenditures
which do not aggregate in excess of the amount set forth below opposite such
Fiscal Year:
1997 $35,000,000
1998 $37,000,000
1999 $40,000,000
2000 $42,000,000
2001 $43,000,000
2002 $44,000,000
SECTION 8.2.8. Take or Pay Contracts. The Borrower and the Parent
will not, and will not permit any of their respective Subsidiaries to, enter
into or be a party to any arrangement for the purchase of materials, supplies,
other property or services if such arrangement by its express terms requires
that payment be made by the Borrower, the Parent or such Subsidiary regardless
of whether such materials, supplies, other property or services are delivered or
furnished to it (it being understood and agreed that motor vehicle supply
agreements containing customary and reasonable provisions that provide price and
other incentives to purchase motor vehicles from the manufacturer thereunder
shall not violate this Section 8.2.8).
SECTION 8.2.9. Consolidation, Merger, etc. The Borrower and the
Parent will not, and will not permit any of their respective Subsidiaries to,
liquidate or dissolve, consolidate with, or merge into or with, any other
Person, or otherwise enter into or consummate any Business Acquisition not
constituting an Investment, except
(a) any Subsidiary of the Borrower may liquidate or dissolve
voluntarily into, and may merge with and into, the Borrower or any
Wholly Owned Subsidiary of the Borrower, and the assets or stock of
any Subsidiary of the Borrower may be purchased or otherwise acquired
by the Borrower or any Wholly Owned Subsidiary of the Borrower; and
(b) so long as no Default has occurred and is continuing or
would occur after giving effect thereto, the Borrower or any of its
Subsidiaries may enter into or consummate any Permitted Business
Acquisition.
SECTION 8.2.10. Asset Dispositions, etc. The Borrower and the Parent
will not, and will not permit any of their respective Subsidiaries to, sell,
issue, transfer, lease, contribute or otherwise convey, or grant options,
warrants or other rights with respect to, any property, business or assets of
the Parent, the Borrower or any of their respective Subsidiaries (including
accounts receivable and Capital Stock) to any Person, unless
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(a) any such sale, transfer, lease, contribution or conveyance
is in the ordinary course of its business or is permitted by Section
8.2.9;
(b) any such issuance is an issuance of Capital Stock of the
Parent;
(c) (i) any such sale, transfer or conveyance is for not less
than the fair market value of the assets so sold, transferred or
conveyed (as determined in good faith by the Board of Directors of the
Parent or a committee thereof, whose determination shall be evidenced
by a certified written resolution of such Board or committee) and the
consideration received by the Borrower or the relevant Subsidiary of
the Borrower in respect thereof consists of at least 80% cash or Cash
Equivalent Investments and (ii) the fair market value of such assets,
together with the aggregate fair market value of all other assets sold,
transferred or conveyed pursuant to this clause (c) in the Fiscal Year
such assets are sold, transferred or conveyed, does not exceed
$35,000,000; provided, however, that no such sale, transfer or
conveyance shall be permitted to be made if immediately before or after
giving effect thereto, any Default shall have occurred and be
continuing; or
(d) without limiting the effect in any manner of the
provisions of Article IX, any such sale, transfer or conveyance of
Vehicles is in connection with a Liquidation Event of Default (as
defined in the Liquidity Facility) or similar event of default with
respect to Budget Funding Corporation, TFFC or any other SPC under any
other agreement relating to Vehicle Debt.
SECTION 8.2.11. Modification of Certain Agreements. The Borrower will
not consent to any amendment, supplement or other modification of (a) any of the
terms or provisions contained in, or applicable to, a Stock Purchase Agreement,
other than any amendment, supplement or other modification which would not have
an adverse effect on the Lenders or (b) the Liquidity Facility, the Senior Note
Purchase Agreements, the Senior Notes, the Series A Note Purchase Agreements,
the Series A Notes, the Series B Note Purchase Agreements, the Series B Notes or
any document or instrument evidencing or applicable to any Subordinated Debt,
other than any amendment, supplement or other modification which satisfies each
of the requirements set forth in the proviso to clause (u) of Section 8.2.2 or
which would not have an adverse effect on the Lenders.
SECTION 8.2.12. Transactions with Affiliates. The Borrower and the
Parent will not, and will not permit any of their respective Subsidiaries to,
enter into, or cause, suffer or permit to exist any arrangement or contract with
any of its other Affiliates unless such arrangement or contract is fair and
equitable to the Borrower, the Parent or such Subsidiary and is an arrangement
or contract of the kind which would be entered into by a prudent Person in the
position of the Borrower, the Parent or such Subsidiary with a Person which is
not one of its Affiliates; provided, however, that the foregoing restriction
shall not apply to (a) any agreement or arrangement between or among the
Borrower and any Subsidiary Guarantor that is a Wholly Owned Subsidiary of the
Borrower that is not otherwise prohibited hereunder, (b) any agreement or
arrangement that provides for the sale of Vehicles from TFFC to the Borrower or
any other
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Subsidiary of the Borrower at the higher of the fair market value thereof and
the book value thereof, to the extent such agreement or arrangement is entered
into in connection with a structured financing or securitization program and (c)
the rate of interest on any Indebtedness permitted pursuant to clause (s) of
Section 8.2.2.
SECTION 8.2.13. Negative Pledges, Restrictive Agreements, etc. The
Borrower and the Parent will not, and will not permit any of their respective
Subsidiaries to, enter into any agreement (excluding this Agreement and any
other Loan Document) prohibiting
(a) the creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter
acquired; or
(b) the ability of any Subsidiary of the Borrower to make any
payments, directly or indirectly, to the Borrower by way of dividends,
advances, repayments of loans or advances, reimbursements of management
and other intercompany charges, expenses and accruals or other returns
on investments, or any other agreement or arrangement which restricts
the ability of any such Subsidiary to make any payment, directly or
indirectly, to the Borrower;
except
(i) any indenture or agreement governing Indebtedness
permitted by clause (d) of Section 8.2.2 as in effect on the Closing
Date and any refinancings thereof permitted by clause (u) of Section
8.2.2;
(ii) any agreement governing any Indebtedness permitted by
clause (g), (j) or (l) of Section 8.2.2 as to the assets financed with
the proceeds of such Indebtedness;
(iii) as to any SPC, usual and customary restrictions pursuant
to the Organic Documents of such SPC; or
(iv) usual and customary restrictions pursuant to any
agreement relating to any Indebtedness of any Foreign Subsidiary
permitted pursuant to clause (i) of Section 8.2.2, such as maintenance
of net worth or other balance sheet conditions, provided that such
restrictions are agreed to in good faith and, where applicable, based
upon reasonable assumptions.
SECTION 8.2.14. Ability to Amend; Restrictive Agreements. The Borrower
and the Parent will not, and will not permit any of their respective
Subsidiaries to, enter into, or accept obligations under, any agreement (a)
prohibiting (including subjecting to any condition) the ability of the Borrower,
the Parent or any of their respective Subsidiaries to amend, supplement or
otherwise modify this Agreement or any other Loan Document or (b) containing any
provision that would contravene any provision of this Agreement or any other
Loan Document.
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SECTION 8.2.15. Accounting Changes. The Parent will not, and will not
permit any of its Subsidiaries to, change its Fiscal Year from twelve
consecutive calendar months ending on December 31.
SECTION 8.2.16. Tax Sharing Arrangements. The Borrower and the Parent
will not, and will not permit any of their respective Subsidiaries to, enter
into or permit to exist any tax sharing agreement or similar arrangement unless
the same shall have been reviewed by, and consented to, by the Administrative
Agent.
SECTION 8.2.17. Activities of the Parent. Without limiting the effect
of any provision contained in this Article VIII, the Parent will not engage in
any business activity other than its continuing ownership of all the shares of
Capital Stock of the Borrower and its compliance with the obligations applicable
to it under the Loan Documents and the Base Indenture. Without limiting the
generality of the immediately preceding sentence, the Parent will not (a)
create, incur, assume or suffer to exist any Indebtedness (other than (i)
Indebtedness in respect of the guaranty contained in Article X, (ii)
Indebtedness evidenced by the Series A Notes or the Series B Notes and (iii)
Indebtedness of the Parent consisting of the Contingent Liabilities described in
clause (t) of Section 8.2.2), (b) create, assume, or suffer to exist any Lien
upon, or grant any options or other rights with respect to, any of its revenues,
property or other assets, whether now owned or hereafter acquired (other than
pursuant to the Loan Documents), (c) wind-up, liquidate or dissolve itself (or
suffer to exist any of the foregoing), consolidate or amalgamate with or merge
into or with any other Person, or convey, sell, transfer, lease or otherwise
dispose of all or any part of its assets, in one transaction or a series of
transactions, to any Person or Persons, (d) create, incur, assume or suffer to
exist any Investment in any Person other than (i) as provided in clause (a) of
Section 8.2.5 and (ii) in respect of any additional equity Investments in the
Borrower or any Subsidiary Guarantor or (e) permit to be taken any action that
would result in a Change in Control. The Parent agrees not to commence or cause
the commencement of any of the actions described in clause (b), (c) or (d) of
Section 9.1.9 of this Agreement with respect to any of its Subsidiaries.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1. Listing of Events of Default. Each of the following events
or occurrences described in this Section 9.1 shall constitute an "Event of
Default".
SECTION 9.1.1. Non-Payment of Obligations. The Borrower or any other
Obligor shall (a) default in the payment or prepayment when due of any principal
of any Loan, (b) default in the payment when due of any Reimbursement
Obligation, or (c) default (and such default shall continue unremedied for a
period of three Business Days) in the payment when due of any interest on any
Loan, any fee or of any other Obligation.
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SECTION 9.1.2. Breach of Warranty. Any representation or warranty of
the Borrower or any other Obligor made or deemed to be made hereunder or in any
other Loan Document executed by it or any other writing or certificate furnished
by or on behalf of the Borrower or any other Obligor to either Agent or any
Lender for the purposes of or in connection with this Agreement or any such
other Loan Document (including any certificates delivered pursuant to Article
VI) is or shall be incorrect when made in any material respect.
SECTION 9.1.3. Non-Performance of Certain Covenants and Obligations.
The Borrower or the Parent shall default in the due performance and observance
of any of its obligations under Section 8.2 or Section 8.1.1, 8.1.2 (except to
the extent such Section relates to a Non-Material Subsidiary), 8.1.8, or 8.1.9.
SECTION 9.1.4. Non-Performance of Other Covenants and Obligations. Any
Obligor shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Borrower by the Administrative Agent or any
Lender.
SECTION 9.1.5. Default on Other Indebtedness. (a) A default shall occur
in the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 9.1.1) of the Borrower, the Parent or any of their
respective Subsidiaries or any other Obligor having a principal amount,
individually or in the aggregate, in excess of $10,000,000, or a default shall
occur in the performance or observance of any obligation or condition with
respect to such Indebtedness if the effect of such default is to accelerate the
maturity of any such Indebtedness or such default shall continue unremedied for
any applicable period of time sufficient to permit the holder or holders of such
Indebtedness, or any trustee or agent for such holders, to cause such
Indebtedness to become due and payable prior to its expressed maturity.
(b) A Liquidity Agreement Amortization Event (as defined in the
Liquidity Facility) shall have occurred or TFFC is unable to finance the
purchase of Vehicles pursuant to the CP Program or any similar event shall have
occurred with respect to TFFC or any other SPC.
SECTION 9.1.6. Judgments. Any judgment or order for the payment of
money in excess of $10,000,000 shall be rendered against the Borrower, the
Parent or any of their respective Subsidiaries or any other Obligor and either
(a) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order; or
(b) there shall be any period of 30 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect.
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SECTION 9.1.7. Pension Plans. Any of the following events shall occur
with respect to any Pension Plan
(a) the institution of any steps by the Borrower, the Parent,
any member of its Controlled Group or any other Person to terminate a
Pension Plan if, as a result of such termination, the Borrower, the
Parent or any such member could be required to make a contribution to
such Pension Plan, or could reasonably expect to incur a liability or
obligation to such Pension Plan, in excess of $1,000,000 (provided,
however, that the Borrower may terminate its domestic defined benefit
pension plan which it suspended effective December 31, 1991, so long as
such termination does not result in the Borrower, the Parent or any
member of its Controlled Group incurring a liability in respect of such
Pension Plan in excess of $10,000,000); or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA.
SECTION 9.1.8. Change in Control. Any Change in Control shall occur.
SECTION 9.1.9. Bankruptcy, Insolvency, etc. The Borrower, the Parent or
any of their respective Subsidiaries (other than a Non-Material Subsidiary) or
any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness to pay, debts as they become
due;
(b) apply for, consent to, or acquiesce in, the appointment of
a trustee, receiver, sequestrator or other custodian for the Borrower,
the Parent or any of their respective Subsidiaries or any other Obligor
or any property of any thereof, or make a general assignment for the
benefit of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a trustee,
receiver, sequestrator or other custodian for the Borrower, the Parent
or any of their respective Subsidiaries or any other Obligor or for a
substantial part of the property of any thereof, and such trustee,
receiver, sequestrator or other custodian shall not be discharged
within 60 days, provided that the Borrower, the Parent, each of their
respective Subsidiaries and each other Obligor hereby expressly
authorizes the Administrative Agent and each Lender to appear in any
court conducting any relevant proceeding during such 60- day period to
preserve, protect and defend their rights under the Loan Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, in respect of the Borrower, the
Parent or any of their respective Subsidiaries or any other Obligor,
and, if any such case or proceeding is not commenced by the Borrower,
the Parent or such Subsidiary or such other Obligor, such case or
proceeding shall be consented to or
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acquiesced in by the Borrower, the Parent or such Subsidiary or such
other Obligor or shall result in the entry of an order for relief or
shall remain for 60 days undismissed, provided that the Borrower, the
Parent, such Subsidiary and each other Obligor hereby expressly
authorizes each Agent and each Lender to appear in any court conducting
any such case or proceeding during such 60-day period to preserve,
protect and defend their rights under the Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of
the foregoing.
SECTION 9.1.10. Impairment of Security, etc. (a) Any Loan Document, or
any Lien granted thereunder, shall (except in accordance with its terms), in
whole or in part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of any Obligor party thereto; the
Borrower, the Parent, any other Obligor or any other party shall, directly or
indirectly, contest in any manner such effectiveness, validity, binding nature
or enforceability; or any Lien securing any Obligation shall, in whole or in
part, cease to be a perfected first priority Lien, subject only to those
exceptions expressly permitted by such Loan Document.
(b) The subordination provisions contained in the Series A
Note Purchase Agreements and the Series B Note Purchase Agreements shall, in
whole or in part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of any holder of Series A Notes or
Series B Notes or of any party to the Series A Note Purchase Agreements or the
Series B Note Purchase Agreements.
SECTION 9.2. Action if Bankruptcy. If any Event of Default described in
clauses (a) through (d) of Section 9.1.9 shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable and the Borrower shall
immediately comply with its obligations under Section 4.7, in each case, without
notice or demand.
SECTION 9.3. Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in clauses (a) through (d) of Section
9.1.9) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Borrower declare all or any portion of the
outstanding principal amount of the Loans and other Obligations to be due and
payable and/or the Commitments (if not theretofore terminated) to be terminated
and/or demand immediate compliance of the Borrower with its obligations under
Section 4.7, whereupon the full unpaid amount of such Loans and other
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment, the
Commitments shall terminate and/or, as the case may be, the Borrower shall be
obligated to comply immediately with its obligations under Section 4.7.
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ARTICLE X
PARENT GUARANTY
SECTION 10.1. Guaranty. The Parent hereby absolutely,
unconditionally and irrevocably
(a) guarantees the full and punctual payment when due,
whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all Obligations of the Borrower
now or hereafter existing, whether for principal, interest, fees,
expenses or otherwise (including all such amounts which would become
due but for the operation of the automatic stay under Section 362(a)
of the United States Bankruptcy Code, 11 U.S.C. ss.362(a), and the
operation of Sections 502(b) and 506(b) of the United States
Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506(b)), and
(b) indemnifies and holds harmless each Secured Party and
each holder of a Note for any and all costs and expenses (including
reasonable attorney's fees and expenses) incurred by such Secured
Party or such holder, as the case may be, in enforcing any rights
under the guaranty set forth in this Article X.
The guaranty set forth in this Article X constitutes a guaranty of payment when
due and not of collection, and the Parent specifically agrees that it shall not
be necessary or required that any Secured Party or any holder of any Note
exercise any right, assert any claim or demand or enforce any remedy whatsoever
against the Borrower or any other Obligor (or any other Person) before or as a
condition to the obligations of the Parent under the guaranty set forth in this
Article X.
SECTION 10.2. Acceleration of Parent Guaranty. The Parent agrees
that, in the event of the dissolution or insolvency of the Borrower, any other
Obligor or the Parent, or the inability or failure of the Borrower, any other
Obligor or the Parent to pay debts as they become due, or an assignment by the
Borrower, any other Obligor or the Parent for the benefit of creditors, or the
commencement of any case or proceeding in respect of the Borrower, any other
Obligor or the Parent under any bankruptcy, insolvency or similar laws, and if
such event shall occur at a time when any of the Obligations of the Borrower and
each other Obligor may not then be due and payable, the Parent agrees that it
will pay to the Administrative Agent for the account of the Secured Parties
forthwith the full amount which would be payable under the guaranty set forth in
this Article X by the Parent if all such Obligations were then due and payable.
SECTION 10.3. Guaranty Absolute, etc. The guaranty set forth in this
Article X shall in all respects be a continuing, absolute, unconditional and
irrevocable guaranty of payment, and shall remain in full force and effect until
all Obligations of the Borrower and each other Obligor have been paid in full in
cash, all obligations of the Parent under the guaranty set forth in this Article
X shall have been paid in full in cash, all Letters of Credit have been
terminated or expired and all Commitments shall have terminated. The Parent
guarantees that the Obligations of the Borrower will be paid strictly in
accordance with the terms of this Agreement and each
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other Loan Document under which they arise, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of any Secured Party or any holder of any Note with respect
thereto. The liability of the Parent under the guaranty set forth in this
Article X shall be absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of this
Agreement, any Note or any other Loan Document;
(b) the failure of any Secured Party or any holder of any
Note
(i) to assert any claim or demand or to enforce any
right or remedy against the Borrower, any other Obligor or any
other Person (including any other guarantor (including the
Parent)) under the provisions of this Agreement, any Note, any
other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor (including the Parent) of, or collateral
securing, any Obligations of the Borrower;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Borrower, or
any other extension, compromise or renewal of any Obligation of the
Borrower;
(d) any reduction, limitation, impairment or termination of
any Obligations of the Borrower for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be
subject to (and the Parent hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Obligations of the Borrower or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
this Agreement, any Note or any other Loan Document;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or
release or addition of, or consent to departure from, any other
guaranty, held by any Secured Party or any holder of any Note securing
any of the Obligations of the Borrower; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the
Borrower, any surety or any guarantor.
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SECTION 10.4. Reinstatement, etc. The Parent agrees that the guaranty
set forth in this Article X shall continue to be effective or be reinstated, as
the case may be, if at any time any payment (in whole or in part) of any of the
Obligations is rescinded or must otherwise be restored by any Secured Party or
any holder of any Note, upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, all as though such payment had not been made.
SECTION 10.5. Waiver, etc. The Parent hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations of the Borrower and the guaranty set forth in this Article X and any
requirement that the Administrative Agent, any other Secured Party or any holder
of any Note protect, secure, perfect or insure any security interest or Lien, or
any property subject thereto, or exhaust any right or take any action against
the Borrower, any other Obligor or any other Person (including any other
guarantor) or entity or any collateral securing the Obligations of the Borrower.
SECTION 10.6. Postponement of Subrogation, etc. The Parent agrees
that it will not exercise any rights which it may acquire by way of rights of
subrogation under the guaranty set forth in this Article X, by any payment made
under the guaranty set forth in this Article X or otherwise, until the prior
payment in full in cash of all Obligations of the Borrower and each other
Obligor, the termination or expiration of all Letters of Credit and the
termination of all Commitments. Any amount paid to the Parent on account of any
such subrogation rights prior to the payment in full in cash of all Obligations
of the Borrower and each other Obligor shall be held in trust for the benefit of
the Secured Parties and each holder of a Note and shall immediately be paid to
the Administrative Agent for the benefit of the Secured Parties and each holder
of a Note and credited and applied against the Obligations of the Borrower and
each other Obligor, whether matured or unmatured, in accordance with the terms
of this Agreement; provided, however, that if
(a) the Parent has made payment to the Secured Parties and
each holder of a Note of all or any part of the Obligations of the
Borrower, and
(b) all Obligations of the Borrower and each other Obligor
have been paid in full in cash, all Letters of Credit have been
terminated or expired and all Commitments have been permanently
terminated,
each Secured Party and each holder of a Note agrees that, at the Parent's
request, the Administrative Agent, on behalf of the Secured Parties and the
holders of the Notes, will execute and deliver to the Parent appropriate
documents (without recourse and without representation or warranty) necessary to
evidence the transfer by subrogation to the Parent of an interest in the
Obligations of the Borrower resulting from such payment by the Parent. In
furtherance of the foregoing, for so long as any Obligations or Commitments
remain outstanding, the Parent shall refrain from taking any action or
commencing any proceeding against the Borrower (or its successors or assigns,
whether in connection with a bankruptcy proceeding or otherwise) to recover any
amounts in the respect of payments made under the guaranty set forth in this
Article X to any Secured Party or any holder of a Note.
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SECTION 10.7. Successors, Transferees and Assigns; Transfers of
Notes, etc. The guaranty set forth in this Article X shall:
(a) be binding upon the Parent, and its successors,
transferees and assigns; and
(b) inure to the benefit of and be enforceable by the
Administrative Agent and each other Secured Party.
Without limiting the generality of the foregoing clause (b), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all rights and benefits in respect thereof granted
to such Lender under any Loan Document (including the guaranty set forth in this
Article X) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 12.11 and Article XI.
ARTICLE XI
THE AGENTS
SECTION 11.1. Actions. Each Lender hereby appoints Credit Suisse
First Boston as its Administrative Agent and NationsBanc as its Documentation
Agent under and for purposes of this Agreement, the Notes and each other Loan
Document. Each Lender authorizes the Administrative Agent to act on behalf of
such Lender under this Agreement, the Notes and each other Loan Document and, in
the absence of other written instructions from the Required Lenders received
from time to time by the Administrative Agent (with respect to which the
Administrative Agent agrees that it will comply, except as otherwise provided in
this Section or as otherwise advised by counsel in order to avoid contravention
of applicable law), to exercise such powers hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent by the terms
hereof and thereof, together with such powers as may be reasonably incidental
thereto. Each Lender hereby indemnifies (which indemnity shall survive any
termination of this Agreement) each Agent pro rata according to such Lender's
Percentage, from and against any and all liabilities, obligations, losses,
damages, claims, costs or expenses of any kind or nature whatsoever which may at
any time be imposed on, incurred by, or asserted against, such Agent in any way
relating to or arising out of this Agreement, the Notes and any other Loan
Document, including reasonable attorneys' fees, and as to which such Agent is
not reimbursed by the Borrower; provided, however, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, claims, costs or expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted solely from such Agent's
gross negligence or wilful misconduct. No Agent shall be required to take any
action hereunder, under the Notes or under any other Loan Document, or to
prosecute or defend any suit in respect of this Agreement, the Notes or any
other Loan Document, unless such Agent is indemnified hereunder to its
satisfaction. If any indemnity in favor of either Agent shall be or become, in
such Agent's determination, inadequate, such Agent may call for
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additional indemnification from the Lenders and cease to do the acts indemnified
against hereunder until such additional indemnity is given.
SECTION 11.2. Funding Reliance, etc. Unless the Administrative Agent
shall have been notified by telephone, confirmed in writing, by any Lender by
12:00 noon (New York City, New York time) on the Business Day of a Borrowing,
with respect to ABR Loans, and by 5:00 p.m. (local time) on the Business Day
prior to a Borrowing, with respect to Eurocurrency Loans, that such Lender will
not make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent and,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If and to the extent that such Lender shall not have made such amount
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay the Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date the
Administrative Agent made such amount available to the Borrower to the date such
amount is repaid to the Administrative Agent, at the interest rate applicable at
the time to Loans comprising such Borrowing (in the case of the Borrower) and
(in the case of the Lender), at the Federal Funds Rate for the first two
Business Days after which such amount has not been repaid, and thereafter at the
interest rate applicable to Loans comprising such Borrowing.
SECTION 11.3. Exculpation. Neither Agent nor any of their respective
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by it under this Agreement or any other Loan
Document, or in connection herewith or therewith, except for its own wilful
misconduct or gross negligence, nor responsible for any recitals or warranties
herein or therein, nor for the effectiveness, enforceability, validity or due
execution of this Agreement or any other Loan Document, nor for the creation,
perfection or priority of any Liens purported to be created by any of the Loan
Documents, or the validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, nor to make any inquiry respecting the
performance by the Borrower of its obligations hereunder or under any other Loan
Document. Any such inquiry which may be made by either Agent shall not obligate
it to make any further inquiry or to take any action. Each Agent shall be
entitled to rely upon advice of counsel concerning legal matters and upon any
notice, consent, certificate, statement or writing which such Agent believes to
be genuine and to have been presented by a proper Person.
SECTION 11.4. Successor. Each Agent may resign as such at any time
upon at least 30 days' prior notice to the Borrower and all Lenders. If either
Agent at any time shall resign, the Required Lenders may appoint another Lender
as a successor Agent which shall thereupon become an Agent hereunder in such
capacity as held by the resigning Agent. If no successor Agent shall have been
so appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be one of the Lenders or a commercial banking institution organized under
the laws of the U.S. (or any State thereof) or a U.S. branch or agency of a
commercial banking institution, and, in the case where the successor Agent is to
be the Administrative Agent, having a combined capital and
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surplus of at least $500,000,000. Upon the acceptance of any appointment as an
Agent hereunder by a successor Agent, such successor Agent shall be entitled to
receive from the retiring Agent such documents of transfer and assignment as
such successor Agent may reasonably request, and shall thereupon succeed to and
become vested with all rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation
hereunder as an Agent, the provisions of
(a) this Article XI shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was an Agent
under this Agreement; and
(b) Section 11.3 and Section 11.4 shall continue to inure
to its benefit.
SECTION 11.5. Credit Extensions by Agents. Each Agent shall have the
same rights and powers with respect to (x) the Loans made by it in its capacity
as a Lender or any of its Affiliates, (y) the Notes held by it or any of its
Affiliates, and (z) its participating interests in the Letters of Credit as any
other Lender and may exercise the same as if it were not an Agent. Each Agent
and its Affiliates may accept deposits from, lend money to, and generally engage
in any kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if Credit Suisse First Boston and NationsBanc were not Agents
hereunder.
SECTION 11.6. Credit Decisions. Each Lender acknowledges that it has,
independently of each Agent and each other Lender, and based on such Lender's
review of the financial information of the Borrower, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such Lender
has deemed appropriate, made its own credit decision to extend its Commitments.
Each Lender also acknowledges that it will, independently of each Agent and each
other Lender, and based on such other documents, information and investigations
as it shall deem appropriate at any time, continue to make its own credit
decisions as to exercising or not exercising from time to time any rights and
privileges available to it under this Agreement or any other Loan Document.
SECTION 11.7. Copies, etc. The Administrative Agent shall give prompt
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by the Borrower pursuant to the terms of this
Agreement (unless concurrently delivered to the Lenders by the Borrower). The
Administrative Agent will distribute to each Lender each document or instrument
received for its account and copies of all other communications received by the
Administrative Agent from the Borrower for distribution to the Lenders by the
Administrative Agent in accordance with the terms of this Agreement or any other
Loan Document.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and the Required Lenders; provided, however, that
no such amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular
action be taken by all the Lenders, by the Required Lenders or by the
Supermajority Lenders shall be effective unless consented to by each
Lender;
(b) modify this Section 12.1, change the definition of
"Required Lenders" or "Supermajority Lenders", increase the Commitment
Amount, the Enhancement Letters of Credit Commitment Amount, the
Foreign Loan Commitment Amount, the Loan Commitment Amount or the
Percentage of any Lender, reduce any fees described in Article III,
release all or substantially all collateral security which is a
component in the Borrowing Base Amount, except as otherwise
specifically provided in any Loan Document, release any Guarantor from
its obligations under its Guaranty, or extend the Loan Commitment
Termination Date or the Letter of Credit Commitment Termination Date
shall be made without the consent of each Lender;
(c) release all or substantially all collateral security which
is not a component in the Borrowing Base Amount, except as otherwise
specifically provided in any Loan Document shall be made without the
consent of the Supermajority Lenders;
(d) extend the due date for, or reduce the amount of, (i) any
scheduled repayment or prepayment of principal of or interest on any
Loan (or reduce the principal amount of or rate of interest on any
Loan) or (ii) any repayment of a Reimbursement Obligation (or reduce
the amount of or rate of interest on any Reimbursement Obligation)
shall be made without the consent of each Lender;
(e) modify the definition of Borrowing Base Amount or any
definition related thereto shall be made without the consent of the
Supermajority Lenders;
(f) affect adversely the interests, rights or obligations of
the Issuer qua the Issuer shall be made without the consent of the
Issuer; or
(g) affect adversely the interests, rights or obligations of
the Administrative Agent qua the Administrative Agent shall be made
without consent of the Administrative Agent.
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No failure or delay on the part of either Agent, the Issuer, any Lender or the
holder of any Note in exercising any power or right under this Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Borrower in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by either Agent, the
Issuer, any Lender or the holder of any Note under this Agreement or any other
Loan Document shall, except as may be otherwise stated in such waiver or
approval, be applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
SECTION 12.2. Notices. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth in the case of the Borrower, the
Parent or any Agent, below its signature hereto or in the case of any Lender, in
Schedule II hereto or in a Lender Assignment Agreement or at such other address
or facsimile number as may be designated by such party in a notice to the other
parties. Any notice, if mailed and properly addressed with postage prepaid or if
properly addressed and sent by pre-paid courier service, shall be deemed given
when received; any notice, if transmitted by facsimile, shall be deemed given
when the confirmation thereof is received by the transmitter.
SECTION 12.3. Payment of Costs and Expenses. The Borrower agrees to pay
on demand all expenses of each Agent (including the fees and out-of-pocket
expenses of counsel to the Agents and of local counsel, if any, who may be
retained by counsel to the Agents) in connection with
(a) the negotiation, preparation, execution and delivery of
this Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from
time to time hereafter be required, whether or not the transactions
contemplated hereby are consummated (other than the fees and expenses
of the Agents in the event that the transactions contemplated hereby
are not consummated and such non-consummation results from the failure
of the Agents to negotiate and deal with the Borrower in good faith);
(b) the filing, recording, refiling or rerecording of any Loan
Document and/or any Uniform Commercial Code financing statements
relating thereto and all amendments, supplements, amendments and
restatements and other modifications to any thereof and any and all
other documents or instruments of further assurance required to be
filed or recorded or refiled or rerecorded by the terms hereof or the
terms of any Loan Document; and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
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The Borrower further agrees to pay, and to save the Agents, the Issuer and the
Lenders harmless from all liability for, any stamp or other taxes which may be
payable in connection with the execution or delivery of this Agreement, the
Credit Extensions hereunder, the issuance of the Notes, Letters of Credit or any
other Loan Documents. The Borrower also agrees to reimburse each Agent, the
Issuer and each Lender upon demand for all reasonable out-of-pocket expenses
(including attorneys' fees and legal expenses) incurred by such Agent or such
Lender in connection with (x) the negotiation of any restructuring or
"work-out", whether or not consummated, of any Obligations and (y) the
enforcement of any Obligations.
SECTION 12.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
the Borrower hereby indemnifies, exonerates and holds each Agent, the Issuer and
each Lender and each of their respective officers, directors, employees and
agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith (irrespective of
whether any such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable attorneys' fees and
disbursements whether incurred in connection with actions between or among the
parties hereto or the parties hereto and third parties (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any of them
as a result of, or arising out of,
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Credit
Extension, including all Indemnified Liabilities arising in connection
with the Transaction or the use of any Letter of Credit;
(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties (including
any action brought by or on behalf of the Borrower as the result of any
determination by the Required Lenders pursuant to Article VI not to
fund any Credit Extension) provided that any such action is resolved in
favor of such Indemnified Party;
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any
Person, whether or not such Agent, the Issuer or such Lender is party
thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to
the protection of the environment or the Release by the Borrower or any
of its Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under
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any Environmental Law), regardless of whether caused by, or within the control
of, the Borrower or such Subsidiary, except for any such Indemnified Liabilities
arising for the account of a particular Indemnified Party by reason of the
relevant Indemnified Party's gross negligence or wilful misconduct. If and to
the extent that the foregoing undertaking may be unenforceable for any reason,
the Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
SECTION 12.5. Survival. The obligations of the Borrower under Sections
4.9, 5.3, 5.4, 5.5, 5.6, 12.3 and 12.4, and the obligations of the Lenders under
Section 11.1, shall in each case survive any assignment from one Lender to
another (in the case of Sections 11.3 and 11.4) and any termination of this
Agreement, the payment in full of all Obligations and the termination of all
Commitments. The representations and warranties made by each Obligor in this
Agreement and in each other Loan Document shall survive the execution and
delivery of this Agreement and each such other Loan Document.
SECTION 12.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 12.7. Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 12.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall constitute together but one and the same agreement. This Agreement
shall become effective when counterparts hereof executed on behalf of the
Borrower, each Lender and the Adminsitrative Agent (or notice thereof
satisfactory to the Administrative Agent) shall have been received by the
Administrative Agent.
SECTION 12.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE
NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. This Agreement, the Fee
Letter, the Notes and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersede any prior agreements, written or oral, with respect thereto.
SECTION 12.10. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
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(a) each of the Borrower and the Parent may not assign or
transfer either of their respective rights or obligations hereunder
without the prior written consent of the Administrative Agent and all
of the Lenders; and
(b) the rights of sale, assignment and transfer of the Lenders
are subject to Section 12.11.
SECTION 12.11. Sale and Transfer of Loans and Notes; Participations in
Loans and Notes. Each Lender may assign, or sell participations in, its Loans,
Letters of Credit and Commitments to one or more other Persons in accordance
with this Section 12.11.
SECTION 12.11.1. Assignments. Any Lender,
(a) with the written consents of the Borrower, the Issuer and
the Administrative Agent (which consents shall not be unreasonably
delayed or withheld and which consent, in the case of the Borrower,
shall be deemed to have been given in the absence of a written notice
delivered by the Borrower to the Administrative Agent, on or before the
fifth Business Day after receipt by the Borrower of such Lender's
request for consent, stating, in reasonable detail, the reasons why the
Borrower proposes to withhold such consent) may at any time assign and
delegate to one or more Eligible Assignees, and
(b) with notice to the Borrower, the Issuer and the
Administrative Agent, but without the consent of the Borrower, the
Issuer or the Administrative Agent, may assign and delegate to any of
its Affiliates which is an Eligible Assignee or to any other Lender
(each Eligible Assignee to whom such assignment and delegation is to be made,
being hereinafter referred to as an "Assignee Lender"), all or any fraction of
such Lender's total Loans and Commitments (which assignment and delegation shall
be of a constant, and not a varying, percentage of all the assigning Lender's
Loans and Commitments) in a minimum aggregate amount of $5,000,000; provided,
however, that the assigning Lender shall have Commitments, participations in
Letter of Credit Outstandings and Loans aggregating at least $5,000,000;
provided further, however, that any such Assignee Lender will comply, if
applicable, with the provisions contained in the last sentence of Section 5.6;
provided further, however, that, the Borrower, the Issuer and the Administrative
Agent shall be entitled to continue to deal solely and directly with such Lender
in connection with the interests so assigned and delegated to an Assignee Lender
until
(i) written notice of such assignment and delegation, together
with payment instructions, addresses and related information with
respect to such Assignee Lender, shall have been given to the Borrower,
the Issuer and the Administrative Agent by such assigning Lender and
such Assignee Lender,
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(ii) such Assignee Lender shall have executed and delivered
to the Borrower, the Issuer and the Administrative Agent a Lender
Assignment Agreement, accepted by the Administrative Agent, and
(iii) the processing fees described below shall have been
paid.
From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and
(y) the assigning Lender, to the extent that rights and obligations hereunder
have been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within five Business Days after its receipt of notice that the
Administrative Agent has received an executed Lender Assignment Agreement, the
Borrower shall, to the extent requested, execute and deliver to the
Administrative Agent (for delivery to the relevant Assignee Lender) new Notes
evidencing such Assignee Lender's assigned Loans and Commitments and, if the
assigning Lender has retained Loans and Commitments hereunder which are
evidenced by any Notes, replacement Notes in the principal amount of the Loans
and Commitments retained by the assignor Lender hereunder (such Notes to be in
exchange for, but not in payment of, those Notes then held by such assignor
Lender). Each such Note shall be dated the date of the predecessor Notes. The
assignor Lender shall ▇▇▇▇ the predecessor Notes "exchanged" and deliver them to
the Borrower. Accrued interest on that part of the principal comprising any
assigned Loans, and accrued fees, shall be paid as provided in the Lender
Assignment Agreement. Accrued interest on that part of the principal of any
Loans not assigned shall be paid to the assignor Lender. Accrued interest and
accrued fees shall be paid at the same time or times provided in this Agreement.
Such assigning Lender must also pay a processing fee to the Administrative Agent
upon delivery of any Lender Assignment Agreement in the amount of $3,500. Any
attempted assignment and delegation not made in accordance with this Section
12.11.1 shall be null and void.
Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time create a security interest in all or any portion of its
rights under this Agreement (including the Loans owing to it and the Notes held
by it) in favor of any Federal Reserve Bank in accordance with Regulation A of
the F.R.S. Board.
SECTION 12.11.2. Participations. Upon prior written notice to the
Borrower and the Administrative Agent, any Lender may at any time sell to one or
more commercial banks or other financial institutions (each of such commercial
banks and other financial institutions being herein called a "Participant")
participating interests (or a sub-participating interest, in the case of a
Lender's participating interest in a Letter of Credit) in any of the Loans,
Commitments, or other interests of such Lender hereunder; provided, however,
that
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(a) no participation or sub-participation contemplated in
this Section 12.11 shall relieve such Lender from its Commitments or
its other obligations hereunder or under any other Loan Document,
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations,
(c) the Borrower and each other Obligor and the
Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations
under this Agreement and each of the other Loan Documents,
(d) no Participant, unless such Participant is an Affiliate
of such Lender, or is itself a Lender, shall be entitled to require
such Lender to take or refrain from taking any action hereunder or
under any other Loan Document, except that such Lender may agree with
any Participant that such Lender will not, without such Participant's
consent, take any actions of the type described in clause (b), (c) or
(d) of Section 12.1, and
(e) the Borrower shall not be required to pay any amount
under Section 5.6 that is greater than the amount which it would have
been required to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 5.3, 5.4, 5.5, 5.6, 5.8, 5.9, 12.3 and 12.4, shall be considered a
Lender.
SECTION 12.12. Other Transactions. Nothing contained herein shall
preclude either Agent or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Affiliates in which the Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.
SECTION 12.13. Independence of Covenants. All covenants contained in
this Agreement and each other Loan Document shall be given independent effect
such that, in the event a particular action or condition is not permitted by any
of such covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not, unless
expressly so provided in such first covenant, avoid the occurrence of a Default
or an Event of Default if such action is taken or such condition exists.
SECTION 12.14. Judgment Currency. (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum due hereunder
(including under Section 10.1), under any Note or under any other Loan Document
in another currency into Dollars or into a Foreign Currency, as the case may be,
the parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which, in accordance with normal
banking procedures, the applicable Secured Party could purchase such other
currency with Dollars or with such Foreign Currency, as the case may be, in New
York City, New York at the close of business on the Business Day immediately
preceding the day on which final
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judgment is given, together with any premiums and costs of exchange payable in
connection with such purchase.
(b) The obligation of each of the Borrower and the Parent in respect of
any sum due from it to either Agent, any Lender or any other Secured Party
hereunder, under any Note or under any other Loan Document shall,
notwithstanding any judgment in a currency other than Dollars or a Foreign
Currency, as the case may be, be discharged only to the extent that on the
Business Day next succeeding receipt by such Agent, such Lender or such other
Secured Party of any sum adjudged to be so due in such other currency, such
Agent, such Lender or such other Secured Party may, in accordance with normal
banking procedures, purchase Dollars or such Foreign Currency, as the case may
be, with such other currency. If the Dollars or such Foreign Currency so
purchased are less than the sum originally due to such Agent, such Lender or
such other Secured Party in Dollars or in such Foreign Currency, each of the
Borrower and the Parent agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify such Agent, such Lender or such other Secured Party
against such loss.
SECTION 12.15. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, THE LENDERS, THE BORROWER OR THE PARENT SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH OF THE BORROWER AND
THE PARENT HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH SUCH LITIGATION. EACH OF THE BORROWER AND THE PARENT FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH OF
THE BORROWER AND THE PARENT HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH SUCH PERSON MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER OR THE PARENT,
AS THE CASE MAY BE, HAS OR HEREAFTER MAY ACQUIRE ANY
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IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO SUCH PERSON OR THE PROPERTY OF SUCH
PERSON, EACH OF THE BORROWER AND THE PARENT HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF THE OBLIGATIONS OF SUCH PERSON UNDER THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS.
SECTION 12.16. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT, THE
LENDERS, THE BORROWER AND THE PARENT HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, THE LENDERS, THE BORROWER OR THE PARENT. EACH OF THE BORROWER AND THE
PARENT ACKNOWLEDGES AND AGREES THAT EACH SUCH PERSON HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER LOAN DOCUMENT TO WHICH SUCH PERSON IS A PARTY) AND THAT THIS PROVISION IS
A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT AND THE LENDERS ENTERING INTO
THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
-119-
128
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the day
and year first above written.
BUDGET RENT A CAR CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President/Treasurer
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and
General Counsel
BUDGET GROUP INC. (formerly known as Team
Rental Group, Inc.), as a Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
-
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President
-120-
129
CREDIT SUISSE FIRST BOSTON, as a Co-
Syndication Agent and the Administrative
Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Associate
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Associate
Address: Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
CREDIT SUISSE FIRST BOSTON, as Issuer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Associate
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Associate
-121-
130
NATIONSBANC CAPITAL MARKETS, INC., as
a Co-Syndication Agent and the
Documentation Agent
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: M.D.
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-122-
131
LENDERS:
CREDIT SUISSE FIRST BOSTON
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Associate
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Associate
NATIONSBANK, N.A. (SOUTH)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
CAISSE NATIONALE DE CREDIT AGRICOLE
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
Branch Manager
BHF BANK AKTIENGESELLSCHAFT
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
-123-
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
CREDIT LYONNAIS CHICAGO BRANCH
By: /s/ Michel Buysschaert
-----------------------------------
Name: Michel Buysschaert
Title: Vice President
PNC BANK, KENTUCKY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
ROYAL BANK OF CANADA
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Manager
THE TORONTO-DOMINION BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Mgr. Cr. Admin.
-124-
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
-125-
134
SCHEDULE I
to Credit Agreement
$300,000,000 Credit Agreement
DISCLOSURE SCHEDULES
ITEM 7.7.
Litigation.
None.
135
$300,000,000 Credit Agreement
DISCLOSURE SCHEDULES
ITEM 7.8.(b)
Existing Subsidiaries.
See list beginning next page.
136
Existing Subsidiaries of the. Borrower
Name Jurisdiction of Incorporation
---- -----------------------------
Budget Car Sales, Inc. (formerly "Team Car Sales") Indiana
Team Car Sales of Charlotte, Inc. Delaware
Team Car Sales of Dayton, Inc. Delaware
Team Car Sales of Philadelphia, Inc. Delaware
Team Car Sales of Richmond, Inc. Delaware
Team Car Sales of San Diego, Inc. Delaware
Team Car Sales of Southern California, Inc. Delaware
ValCar Rental Car Sales, Inc. Indiana
IN Motors VI, LLC (1) Indiana
TCS Properties, LLC Indiana
Budget Rent a Car Systems, Inc. Delaware
Budget Funding Corporation Delaware
Budget Fleet Finance Corporation Delaware
BRAC of New York, Inc. Delaware
Long Island Car & Truck Rental, Inc. (2) Delaware
NYRAC, Inc. New York
Rebound Services, Inc. Delaware
Diversified Services, Inc. Delaware
Automated Transportation, Inc. California
Expert Leasing, Inc. Florida
Rapid Rentals, Inc. District of Columbia
▇▇▇▇▇▇▇ Car Sales, Inc. Louisiana
Budget Rent a Car of New Orleans, Inc. Louisiana
Westeam Enterprises, Inc. California
137
Existing Subsidiaries of the. Borrower
Name Jurisdiction of Incorporation
---- -----------------------------
MacKay Car & Truck Rentals, Inc. North Carolina
Metro West, Inc. Delaware
▇▇▇-Al, Inc. California
Dayton Auto Lease Company, Inc. Ohio
▇▇▇ ▇▇▇▇▇▇, Inc. Ohio
Arizona Rent a Car Systems, Inc, Delaware
Capital City Leasing, Inc. Florida
Team Rental of Connecticut, Inc. Delaware
Team Rental of Cincinnati, Inc. Delaware
Team Rental of Ft. ▇▇▇▇▇, Inc. Delaware
Fort ▇▇▇▇▇ Rental Group, Inc. Delaware
Team Rental of Philadelphia, Inc. Delaware
Team Rental of Pittsburgh, Inc, Delaware
Team Rental of Rochester, Inc. Delaware
Team Rental of Southern California, Inc. Delaware
BRAC SOCAL Funding Corporation Delaware
Tranex Rentals of New York, Inc. New York
VPSI, Inc. Delaware
Team Claims Services, Inc. Florida
Budget Rent a Car International, Inc. Delaware
Budget Rent a Car Espana, S.A. Spain
Budget Rent a Car Ltd., Ireland London, England
BRACRENT, S.A. Spain
138
Existing Subsidiaries of the Borrower
Name Jurisdiction of Incorporation
---- -----------------------------
Societe Financiere et de Participation Tours, France
Budget France, S.A. Tours, France
BTI (U.K.) pie London, England
BTI (Gatwick) Limited London, England
BTI (Stansted) Limited London, England
BTI (London) Limited London, England
BTI (Marble Arch) Limited London, England
BTI (Slough) Limited London, England
BTI (Heathrow) Limited London, England
Budget Rent a Car Australia Pty. Ltd. Victoria, Australia
Budget Rent a Car Pty. Limited Victoria, Australia
Budget Rent a Car Limited Auckland, New Zealand
Budget Rent a Car Operations Pty. Ltd. Victoria, Australia
Target Rent a Car Limited Wellington New Zealand
Budget Lease Mgmt (Car Sales) Limited Auckland, New Zealand
Budget Locacao de Veiculos Ltda. Sao Paulo, Brazil
Budget Rent a Car Asia-Pacific, Inc. Delaware
Budget Rent a Car of Japan, Inc. Delaware
Budget Rent a Car of Canada Limited Ottawa, Ontario
Control Risk Corporation Illinois
▇▇▇▇▇▇ ▇▇▇▇▇▇ Insurance Agency, Inc. California
Reservation Services, Inc. Texas
200-214 N. Michigan Avenue, Inc. Illinois
BRAC Reinsurance Company, Ltd. Bermuda
139
Existing Subsidiaries of the Borrower (Cont'd)
Name Jurisdiction of Incorporation
---- -----------------------------
BRAC Credit Corporation Delaware
Compass Computer Services, Inc. (3) Delaware
Budget Sales Corporation Delaware
Team Fleet Financing Corporation Delaware
Team Realty Services, Inc. Delaware
Team Fleet Services Corporation Delaware
--------------------------
(1) 1% owned by Budget Car Sales, Inc.; 1% owned by the Borrower, and 98% owned
by ValCar Rental Car Sales, Inc.
(2) A 72% owned subsidiary of BRAC of New York, Inc.
(3) A 50% owned subsidiary of the Borrower.
140
$300,000,000 Credit Agreement
Disclosure Schedules
ITEM 7.11.
Emplovee Benefit Plans
None.
141
$300,000,000 Credit Agreement
Disclosure Schedules
ITEM 7.12.
Environmental Matters
None.
142
$300,000,000 Credit Agreement
Disclosure Schedules
ITEM 7.13.
Intellectual Property
Each service ▇▇▇▇/trade name including the name "Budget" in the following
countries:
Argentina
Australia
Austria
Belgium
Brazil
Canada
Chile
China
Colombia
Denmark
Finland
France
Germany
Italy
Israel
Japan
Luxembourg
Mexico
Netherlands
New Zealand
Norway
Russia
South Africa
Spain
Sweden
Switzerland
United Kingdom
United States
Venezuela
143
$300,000,000 Credit Agreement
Disclosure Schedules
ITEM 8.2.2(b)
Indebtedness to be Paid
See attachment.
144
$300,000,000 Credit Agreement
Budget Group, Inc.
Indebtedness to be Paid
[as of 4/28/97]
Payee BUDGET Payee TEAM
-------------------------- --------------- ----------- -----------
Budget Funding Corporation 260,190,000 NationsBank $37,948,000
▇▇▇▇ - ▇▇▇▇ Vehicles 220,806,617
Ford - Non-Ford Vehicles 390,469,902
Ford - Working Capital 443,517,915
-------------- -----------
TOTAL BUDGET 1,314,984,434 TOTAL TEAM $37,948,000
============== ===========
TOTAL TEAM & BUDGET $1,352,932,434
==============
145
$300,000,000 Credit Agreement
Disclosure Schedules
ITEM 8.2.2(c)
Ongoing Indebtedness
See attachment.
146
S300,000,000 Credit Agreement
Budget Group, Inc.
Existing Debt
[as of 4/19/97]
Payee BUDGET Maturity Payee TEAM Maturity
----- ---------- -------- -------------------------------------- ------------ --------
EAST REGION: (B)
(1)Truckers Bank 456,303 1997 (1)TFFC Class A (B) $100,000,000 1999
(9)LT Note Payable - Secured 613,407 2002 (1)TFFC Class B (B) 5,682,000 2000
(1)So. Cal. Class A (B) 38,500,000 1998
FLORIDA:(B) (1)So. Cal. Class B(B) 1,500,000 1998
(4)▇▇▇▇▇▇▇ ▇▇▇▇ 400,042 1998 (1)TFFC Series 1996-1 Class A (B) 166,000,000 2002
(1)TFFC Series 1996-1 Class B (B) 10,000,000 2002
RESERVATIONS:(B) (2)Convertible Subordinated (C) 80,000,000 2007
(3)Wizcom Note 29,874,995 1998 (10)Bank One (B) 8,054,000 1998**
(1) Truckers Bank (B) 3,355,000 Demand Note
CORPORATE: (A) (10) World Omni (B) 17,079,000 Demand Note
(1)Budget Fleet Finance (B) 500,000,000 1999 (1) National City Bank of Dayton (B) 3,618,000 ▇▇▇▇
(▇)▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Note 42,476 1997 (4) Core States - Meridian Bank (B) 1,892,000 1997
(6)▇▇▇▇▇▇▇▇▇ - Charleston A 176,161 1999 (8) Other Dcbt - Secured & Unsecured (B) 1,891,000
(6)Rodcnburg - Charleston B 483,976 1998 ------------
(6)▇▇▇▇▇▇▇▇▇ - Charleston C 334,615 1999 $437,571,000
(5)IRBS - Orlando 550,000 1998 ============
(5)IRBS - Fort Lauderdale 389,772 1998
(4)Sea First Mortgage 400,000 1998
(7)AFCO Primary 279,445 1997
(7)AFCO Property 2,387,863 1997
(7)AFCO Umbrella 914,098 1997
(7)AFCO Exec 189,154 ▇▇▇▇
▇▇▇▇▇▇: (B)
(1)Credit Ford 3,398,000 1997
(1)Foum Imobilization 2,470,000 1997
(1)Disc 1,227,000 1997
(2)Credit Lyonnais 1,520,000 2001
(2)Credit Lyonnais 618,000 2000
(2)Societe Generale 266,000 1999
(2)UFB 1,000 1997
(2)Overdrafts 3,536,000
BTI: (B)
(1)Forward Trust 25,114,000 1997
(1)UDT 17,521,000 1997
(4)Notingham 104,000 2002
(2)Overdrafts 17,294,538
AUSTRALIA: (B)
(1)Societe Generale 14,329,491 1997
(2)Westpac - Commercial Bills 393,000 1997
(1)Westpac - Fleet 5,179,037 1997
--------------
TOTAL BUDGET $ 630,463,373*
==============
TOTAL TEAM & BUDGET $1,068,034,373
==============
* Not including other items of indebtedness having an unpaid principal amount
not exceeding $1,000,000
**Debt carried for 90 days and is not subject to refinance provision
(1)Fleet Debt - secured by vehicles
(2)Working Capital Debt - unsecured
(3)Reservation - Wizcom Debt - unsecured
(4)Mortgages with Liens on Property - secured by property
(5)Industrial Revenue Bonds - unsecured
(6)Franchise Acquisition Notes @ unsecured
(7)Insurance Notes - unsecured
(8)Other Debt
(9)Note payable to Corporate secured by franchise
(10)Fleet Debt - secured by vehicles and related receivables
(A)Obligor is BRACC
(B)Obligor is a Subsidiary
(C)Obligor is Team
147
$300,000,000 Credit Agreement
Disclosure Schedules
ITEM 8.2.5(a)
Ongoing Investments
See attachment.
148
Budget Rent a Car Corporation
Investment Accounts
As of 4/28/97
Description Account 1997 Balance
------------------------------------- ------- -------------
Invest-Systems 25100 * 786,040.17
Invest-Budget Leasing 25130 * 10,000.00
Invest-BRAC Reinsurance 25140 * 1,613,938.00
Invest-Control Risk Group 25170 * 940,061.00
Invest-BRAC International 25180 * 35,634,479.43
▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ * 3,375,203.00
Invest-Budget Funding Corp 25220 * 25,000.00
Invest-▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ * 225,000.00
Invest-Budget Fleet Financing 25240 * 25,000.00
Invest-Thailand 25999 801,055.85
Invest-Oth 25999 580,739.35
Balance per General Ledger 44,016,516.60
* Investment Account Eliminated 634,721.60
Balance Per Consideration 1,381,795.00
149
SCHEDULE II
to Credit Agreement
LENDER INFORMATION
LENDER PERCENTAGE DOMESTIC OFFICE EUROCURRENCY OFFICE
------ ---------- --------------- -------------------
CREDIT SUISSE FIRST BOSTON 33.3333333333% Credit Suisse First Boston Credit Suisse First Boston
Eleven Madison Avenue Eleven Madison Avenue
New York, NY 10010-3629 ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
NATIONSBANK, N.A. (SOUTH) 25.0000000000% NationsBank, N.A. (South) NationsBank, N.A. (South)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
N01-001-15-06 N01-001-15-06
Charlotte, NC 28255 ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
CAISSE NATIONALE DE CREDIT 8.3333333333% Caisse Nationale de Credit Caisse Nationale de Credit
Agricole Agricole
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BHF BANK 5.0000000000% BHF Bank Aktiengesellschaft BHF Bank Aktiengesellschaft
AKTIENGESELLSCHAFT New York Branch New York Branch
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
150
LENDER PERCENTAGE DOMESTIC OFFICE EUROCURRENCY OFFICE
------ ---------- --------------- -------------------
CANADIAN IMPERIAL BANK OF 5.▇▇▇▇▇▇▇▇▇▇% Canadian Imperial Bank of Canadian Imperial Bank of
COMMERCE Commerce Commerce
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ 2 Paces Ferry Road
Suite 1200 Suite 1200
Atlanta, GA 30339 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
CREDIT LYONNAIS CHICAGO 5.0000000000% Credit Lyonnais Chicago Branch Credit Lyonnais Chicago Branch
BRANCH ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PNC BANK, KENTUCKY, INC. 5.0000000000% PNC Bank, Kentucky, Inc. PNC Bank, Kentucky, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ROYAL BANK OF CANADA 5.▇▇▇▇▇▇▇▇▇▇% Royal Bank of Canada Royal Bank of Canada
Grand Cayman Branch Grand Cayman Branch
32 Old Slip, One Financial Square 32 Old Slip, One Financial Square
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Attn: ▇▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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LENDER PERCENTAGE DOMESTIC OFFICE EUROCURRENCY OFFICE
------ ---------- --------------- -------------------
THE TORONTO- DOMINION BANK 5.▇▇▇▇▇▇▇▇▇▇% The Toronto-Dominion Bank The Toronto-Dominion Bank
909 Fannin, Suite 1700 909 ▇▇▇▇▇▇, Suite 1700
Houston, TX 77010 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF HAWAII 3.3333333333% Bank of Hawaii Bank of Hawaii
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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SCHEDULE III
to Credit Agreement
DEPOSIT BANKS
NBD Bank, N.A.
Indianapolis, Indiana
Norwest Bank Colorado, N.A.
Denver, Colorado
Texas Commerce Bank
Arlington, Texas
153
SCHEDULE IV
to the Credit Agreement
SUBORDINATION PROVISIONS TO BE CONTAINED IN
SUBORDINATED INTERCOMPANY DEBT
The following provisions and conditions shall be made a part of each
instrument evidencing or pursuant to which Subordinated Intercompany Debt may be
incurred by any Person (a "Debtor") to another Person (a "Subordinated
Creditor") in accordance with the Credit Agreement referred to below.
SECTION 1. Definitions. Terms used but not defined herein have the
meanings given to them in the Credit Agreement. As used in these provisions, the
following terms shall have the meanings specified below:
"Administrative Agent" means Credit Suisse First Boston, in its
capacity as Administrative Agent under the Credit Agreement.
"Credit Agreement" means the Credit Agreement, dated as of April 29,
1997, among Budget Rent a Car Corporation, Budget Group, Inc. (formerly known as
Team Rental Group, Inc.), the various financial institutions as are, or may from
time to time become, parties thereto (each individually a "Lender" and
collectively the "Lenders") and the Administrative Agent, including all
amendments, renewals, extensions, restructurings, supplements or modifications
thereto and all refundings, refinancings and replacements thereof (and of any
such refunding, refinancing or replacement), including any agreement (i)
extending or shortening the maturity of any indebtedness incurred thereunder or
contemplated thereby, (ii) adding or deleting borrowers or guarantors thereunder
or (iii) increasing the amount of indebtedness incurred thereunder or available
to be borrowed thereunder.
"Hedging Arrangements" means any and all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and currency
exchange agreements, and all other agreements or arrangements designed to
protect against fluctuations in interest rates or currency values, entered into
by the Debtor with any Secured Party (or any Affiliate of a Secured Party).
"Intercompany Subordinated Debt" means all indebtedness and other
obligations of the Debtor from time to time owing to the Subordinated Creditor
in respect of indebtedness related to or resulting from intercompany loans,
advances or other indebtedness from a Subordinated Creditor (whether created
directly or acquired by assignment or otherwise), and interest, premiums and
fees, if any, thereon and other amounts payable in respect thereof and all
rights and remedies of the Subordinated Creditor with respect thereto.
"Secured Parties" is defined in the Credit Agreement.
154
"Senior Indebtedness" is defined in clause (a) of Section 2.
SECTION 2. Agreement to Subordinate.
(a) The Debtor and the Subordinated Creditor agree that the
Intercompany Subordinated Debt is and shall be subject, subordinate and rendered
junior, to the extent and in the manner hereinafter set forth, in right of
payment, to the prior payment in cash in full of all obligations of the Debtor
now existing or hereafter arising in connection with the Credit Agreement or any
Hedging Arrangement, whether for (i) principal, (ii) reimbursement obligations
in respect of letters of credit, (iii) interest (including, without limitation,
interest accruing after the filing of a petition initiating any proceeding
referred to in clause (a) of Section 3, whether or not allowed as a claim in
such proceeding), (iv) costs, fees (including, without limitation, attorneys'
fees and disbursements) and reasonable expenses or (v) otherwise (the
obligations specified in clauses(a)(i) through (a)(v) above are referred to
collectively as the "Senior Indebtedness"). For purposes of these provisions,
the Senior Indebtedness shall not be deemed to have been paid in cash in full
until the Secured Parties shall have received full payment of the Senior
Indebtedness in cash and all letters of credit issued under the Credit Agreement
have expired or been terminated or have been cash collateralized in full, which
payment and/or cash collateralization shall have been retained by the Secured
Parties for a period of time in excess of all applicable preference or other
similar periods under applicable bankruptcy, insolvency or creditors' rights
laws. Each of the Debtor and the Subordinated Creditor waives notice of
acceptance of these provisions by the Secured Parties, and the Subordinated
Creditor waives notice of and consent to the making, amount and terms of the
Senior Indebtedness which may exist or be created from time to time and any
renewal, extension, amendment or modification thereof, and any other lawful
action which any Secured Party in its and their sole and absolute discretion may
take or omit to take with respect thereto. The provisions of this Section shall
constitute a continuing offer made for the benefit of and to all Secured Parties
and each Secured Party is hereby irrevocably authorized to enforce such
provisions.
(b) In the event that the Debtor shall make, and/or any Subordinated
Creditor shall receive, any payment on Intercompany Subordinated Debt in
contravention of these provisions or the terms of the Credit Agreement, then and
in any such event such payment shall be deemed to be the property of,
segregated, received and held in trust for the benefit of, and shall be promptly
paid over and delivered to, the Administrative Agent for the pro rata benefit of
the Secured Parties.
(c) The Debtor shall not make, and the Subordinated Creditor shall
receive or accept, any payment in respect of any Intercompany Subordinated Debt
if a Default of the nature set forth in Section 9.1.9 of the Credit Agreement or
any Event of Default has occurred and is continuing or would result therefrom,
unless and until (i) the Senior Indebtedness has been paid in cash in full, (ii)
in the case of an Event of
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Default referred to above other than a Default of the nature set forth in
Section 8.1.9 of the Credit Agreement, such Event of Default has been cured or
waived or (iii) the Administrative Agent has otherwise consented in writing. For
purposes of these provisions, "payment" in respect of any Intercompany
Subordinated Debt shall include any direct or indirect payment or distribution
from any source, whether in cash, property or securities, by set-off or
otherwise, in respect of principal, premium, interest or otherwise, including in
connection with any redemption or purchase of such Intercompany Debt or any
recovery on any claim for rescission or damages.
SECTION 3. In Furtherance of Subordination.
(a) Upon any distribution of all or any of the assets of the Debtor or
the Subordinated Creditor in the event of
(i) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Debtor or the Subordinated Creditor, or to
its creditors, as such, or to its assets,
(ii) any liquidation, dissolution or other winding up of the
Debtor or the Subordinated Creditor, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or
(iii) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Debtor or the Subordinated
Creditor,
then, and in any such event, unless the Administrative Agent shall otherwise
agree in writing, the Secured Parties shall receive payment in cash in full of
all amounts due or to become due (whether or not the Senior Indebtedness has
been declared due and payable prior to the date on which the Senior Indebtedness
would otherwise have become due and payable) on or in respect of all Senior
Indebtedness (including postpetition interest) before the Subordinated Creditor
or anyone claiming through or on its behalf (including any receiver, trustee, or
otherwise) is entitled to receive any payment on account of principal of (or
premium, if any) or interest on or other amounts payable in respect of the
Intercompany Subordinated Debt, and to that end, any payment or distribution
which may be payable or deliverable in respect of the Intercompany Subordinated
Debt in any such case, proceeding, dissolution, liquidation or other winding up
or event, shall be paid or delivered directly to the Administrative Agent for
the application (in the case of cash) to, or as collateral (in the case of
noncash property or securities) for, the payment or prepayment of the Senior
Indebtedness until the Senior Indebtedness shall have been paid in cash in full.
(b) If any proceedings, liquidation, dissolution or winding up referred
to in clause (a) above is commenced by or against the Debtor or the Subordinated
Creditor,
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(i) the Administrative Agent is hereby irrevocably authorized and
empowered (in its own name or in the name of the Debtor, the
Subordinated Creditor or otherwise), but shall have no obligation, to
demand, ▇▇▇ for, collect and receive every payment or distribution in
respect of the Intercompany Subordinated Debt above and give
acquittance therefor and to file claims and proofs of claim and take
such other action (including, without limitation, voting the
Intercompany Subordinated Debt or enforcing any security interest or
other lien securing payment of the Intercompany Subordinated Debt) as
the Administrative Agent may reasonably deem necessary or advisable for
the exercise or enforcement of any of the rights or interests of the
Secured Parties or the Administrative Agent hereunder; provided that in
the event the Administrative Agent takes such action, the
Administrative Agent shall apply all proceeds first, to the payment of
the costs of enforcement of these provisions, and second, to the pro
rata payment of the Senior Indebtedness; and
(ii) the Subordinated Creditor shall duly and promptly take such
action as the Administrative Agent may request (A) to collect the
Intercompany Subordinated Debt for the account of the Secured Parties
and the Administrative Agent and to file appropriate claims or proofs
of claim in respect of the Intercompany Subordinated Debt, (B) to
execute and deliver to the Administrative Agent such powers of
attorney, assignments, or other instruments as the Administrative Agent
may reasonably request in order to enable it to enforce any and all
claims with respect to, and any security interests and other liens
securing payment of, the Intercompany Subordinated Debt and (C) to
collect and receive any and all payments or distributions which may be
payable or deliverable upon or with respect to the Intercompany
Subordinated Debt.
(c) All payments or distributions of assets of the Debtor, whether in
cash, property or securities upon or with respect to the Intercompany
Subordinated Debt which are received by the Subordinated Creditor contrary to
these provisions shall be received in trust for the pro rata benefit of the
Secured Parties, shall be segregated from other funds and property held by the
Subordinated Creditor and shall be forthwith paid over to the Administrative
Agent in the same form as so received (with any necessary indorsement) to be
applied, pro rata (in the case of cash) to, or held as collateral (in the case
of noncash property or securities) for, the payment or prepayment of the Senior
Indebtedness, whether matured or unmatured, in accordance with the terms of
these provisions.
(d) The Secured Parties and the Administrative Agent are hereby
authorized to demand specific performance of these provisions, whether or not
the Debtor or the Subordinated Creditor shall have complied with any of the
provisions hereof applicable to it, at any time when the Subordinated Creditor
shall have failed
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to comply with any of these provisions applicable to it. The
Subordinated Creditor hereby irrevocably waives any defense (other than
the defense of payment in full of the Senior Indebtedness) based on the
adequacy of a remedy at law which might be asserted as a bar to such
remedy of specific performance.
SECTION 4. No Enforcement or Commencement of Any Proceedings. The
Subordinated Creditor agrees that, so long as any Senior Indebtedness shall
remain unpaid (including any Letter of Credit remaining outstanding), or any
Commitment shall be in effect, it will not accelerate the maturity of the
Intercompany Subordinated Debt or commence, or join with any creditor other than
the Secured Parties in commencing any proceeding referred to in clause (a) of
Section 3.
SECTION 5. Rights of Subordination. The Subordinated Creditor agrees
that no payment or distribution to the Secured Parties or the Administrative
Agent pursuant to these provisions shall entitle the Subordinated Creditor to
exercise any rights of subrogation in respect thereof until all Senior
Indebtedness has been paid in cash in full and the Commitments have been
terminated. The Subordinated Creditor agrees that these provisions shall not be
affected by any action, or failure to act, by the Administrative Agent or the
Secured Parties which results, or may result, in affecting, impairing or
extinguishing any right of reimbursement or subrogation or other right or remedy
of the Subordinated Creditor against the Debtor.
SECTION 6. Subordination Legend: Further Assurances. The Subordinated
Creditor and the Debtor will cause each note and instrument (if any) evidencing
the Intercompany Subordinated Debt to be endorsed with the following legend:
"The indebtedness evidenced by this instrument is subordinated to
the prior payment in cash in full of the Senior Indebtedness (as
defined in the Intercompany Subordination Agreement, dated as of__ ,__)
pursuant to, and to the extent provided in, the Intercompany
Subordination Agreement by the maker hereof and payee named herein in
favor of the Secured Parties referred to therein and any person now or
hereafter designated as their agent."
Each of the Subordinated Creditor and the Debtor hereby agrees to ▇▇▇▇ its books
of account in such a manner as shall be effective to give proper notice of the
effect of these provisions and will, in the case of any Intercompany
Subordinated Debt which is not evidenced by any note or instrument, following
the occurrence and subject to the continuation of an Event of Default, upon the
Administrative Agent's request, cause such Intercompany Subordinated Debt to be
evidenced by an appropriate note or instrument or instruments endorsed with the
above legend. Each of the Subordinated Creditor and the Debtor will at its
expense and at any time and from time to time promptly execute and deliver all
further instruments and documents and take all further action that may be
necessary or that the Secured Parties or the Administrative Agent may reasonably
request in order to protect any right or interest granted
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or purported to be granted hereunder or to enable the Secured Parties or the
Administrative Agent to exercise and enforce their rights and remedies
hereunder.
SECTION 7. No Disposition of Intercompany Subordinated Debt. The
Subordinated Creditor will not, without the prior written consent of the
Administrative Agent, upon the occurrence and during the continuation of any
Default of the nature set forth in Section 9.1.9 of the Credit Agreement or an
Event of Default, take, or permit to be taken, any action to assert, collect or
enforce the Intercompany Subordinated Debt or any part thereof.
SECTION 8. Agreement by the Debtor. The Debtor agrees that it will not
make any payment on any of the Intercompany Subordinated Debt, or take any other
action, in contravention of these provisions.
SECTION 9. Obligations Hereunder Not Affected. All rights and interest
of the Secured Parties and the Administrative Agent hereunder, and all
agreements and obligations of the Subordinated Creditor and the Debtor
hereunder, shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any document
evidencing Senior Indebtedness;
(b) any change in the time, manner or place of payment of, or
any other term of, all or any of the Senior Indebtedness, or any other
amendment or waiver of or any consent to departure from any of the
documents evidencing or relating to the Senior Indebtedness;
(c) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure from
any guaranty or Loan Document, for all or any of the Senior
Indebtedness;
(d) any failure of any Secured Party or the Administrative Agent
to assert any claim or to enforce any right or remedy against any other
party hereto under these provisions, the Credit Agreement or any other
Loan Document;
(e) any reduction, limitation, impairment or termination of the
Senior Indebtedness for any reason (other than the defense of payment
in full of the Senior Indebtedness), including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and the Debtor and the Subordinated Creditor hereby waive any right
to or claim of) any defense (other than the defense of payment in full
of the Senior Indebtedness) or setoff, counterclaim, recoupment or
termination whatsoever by reason of invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any
other event or occurrence affecting, any Senior Indebtedness; and
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(f) any other circumstance which might otherwise constitute a
defense (other than the defense of payment in full of the Senior
Indebtedness) available to, or a discharge of, the Debtor in respect of
the Senior Indebtedness or the Subordinated Creditor in respect of
these provisions.
These provisions shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Senior Indebtedness is
rescinded or must otherwise be returned by any Secured Party or the
Administrative Agent upon the insolvency, bankruptcy or reorganization of the
Debtor or otherwise, all as though such payment had not been made. The
Subordinated Creditor acknowledges and agrees that the Secured Parties and the
Administrative Agent may in accordance with the terms of the Credit Agreement,
without notice or demand and without affecting or impairing the Subordinated
Creditor's obligations hereunder, from time to time (i) renew, compromise,
extend, increase, accelerate or otherwise change the time for payment of, or
otherwise change the terms of the Senior Indebtedness or any part thereof,
including, without limitation, to increase or decrease the rate of interest
thereon or the principal amount thereof; (ii) take or hold security for the
payment of the Senior Indebtedness and exchange, enforce, foreclose upon, waive
and release any such security; (iii) apply such security and direct the order or
manner of sale thereof as the Administrative Agent and the Secured Parties, in
their sole discretion, may determine; (iv) release and substitute one or more
endorsers, warrantors, borrowers or other obligers; and (v) exercise or refrain
from exercising any rights against the Debtor or any other Person.
SECTION 10. Representations and Warranties. The Subordinated Creditor, in
respect of itself and the Intercompany Subordinated Debt owing to it, as the
Debtor, as the case may be, hereby represents and warrants as follows:
(a) the Subordinated Creditor owns the Intercompany Subordinated
Debt now outstanding free and clear of any Lien;
(b) these provisions constitute a legal, valid and binding
obligation of the Subordinated Creditor and the Debtor, enforceable in
accordance with its terms.
SECTION 11. Amendments. Waivers. No amendment or waiver of these
provisions nor consent or any departure by the Subordinated Creditor or the
Debtor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Administrative Agent, and then such waiver, amendment
or consent shall be effective only in the specific instance and for the specific
purpose for which given. Any waiver, forbearance, failure or delay by the
Administrative Agent or the Secured Parties in exercising, or the exercise or
beginning of exercise by the Administrative Agent or the Secured Parties of, any
right, power or remedy, simultaneous or later shall not preclude the further,
simultaneous or later exercise thereof, and every right, power or remedy of the
Administrative Agent and the Secured Parties shall continue in full force and
effect until such right, power or remedy is specifically waived in a writing
executed or authorized by such Secured Parties.
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SECTION 12. Expenses. The Subordinated Creditor and the Debtor jointly
and severally agree to pay, upon demand, to the Administrative Agent or the
Secured Parties, as applicable, any and all reasonable costs and expenses,
including, without limitation, reasonable attorneys' fees and disbursements
which the Secured Parties or the Administrative Agent may incur in connection
with the exercise or enforcement of any of the rights or interest of the Secured
Parties or the Administrative Agent hereunder.
SECTION 13. Severability. If any of these provisions shall be held
invalid or unenforceable, these provisions shall be construed as if not
containing those provisions, and the rights and obligations of the parties
hereto shall be construed and enforced accordingly.
SECTION 14. Cumulative Rights. The rights, powers and remedies of the
Secured Parties and the Administrative Agent under these provisions shall be in
addition to all rights, powers and remedies given to the Secured Parties and the
Administrative Agent by virtue of any contract, statute or rule of law, all of
which rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently. The parties hereto expressly acknowledge and agree
that the Secured Parties and the Administrative Agent are intended, and by this
reference expressly made, third party beneficiaries of these provisions.
SECTION 15. Governing Law. THESE PROVISIONS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 18. Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THESE PROVISIONS,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY OF THE SECURED PARTIES OR
THE SUBORDINATED CREDITOR OR THE DEBTOR SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE DEBTOR AND THE
SUBORDINATED CREDITOR EACH HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL,
NON-APPEALABLE JUDGEMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION OR
BY A FINAL, NON-APPEALABLE JUDGMENT OF ANY APPLICABLE APPELLATE COURT. THE
DEBTOR AND THE SUBORDINATED CREDITOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK. THE DEBTOR AND THE SUBORDINATED CREDITOR EACH
HEREBY EXPRESSLY AND IRREVOCABLY
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161
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE DEBTOR OR THE
SUBORDINATED CREDITOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH OF THE DEBTOR AND THE
SUBORDINATED CREDITOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THESE PROVISIONS.
SECTION 19. Waiver of Jury Trial. THE DEBTOR AND THE SUBORDINATED
CREDITOR AND, BY ACCEPTING THESE PROVISIONS AND THE BENEFITS THEREOF, THE
ADMINISTRATIVE AGENT, ANY ISSUER AND ANY LENDER HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THESE PROVISIONS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE DEBTOR OR THE SUBORDINATED CREDITOR
AND EACH SUCH PERSON ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE SECURED PARTIES CONTINUING TO MAKE CREDIT EXTENSIONS
UNDER THE CREDIT AGREEMENT.
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SCHEDULE V
to Credit Agreement
SCHEDULED LETTERS OF CREDIT
1. Applicant: Budget Rent A Car Corporation
Beneficiary: Ford Motor Credit Company
Amount: $24,750,000.00
L/C No.: TS-06000863
Issuance Date: April 29, 1997
Stated Expiry Date: August 2, 1998
2. Applicant: Budget Rent A Car Corporation
Beneficiary: Ford Motor Credit Company
Amount: $7,400,000.00
L/C No.: TS-06000865
Issuance Date: April 29, 1997
Stated Expiry Date: October 16, 1999
3 Applicant: Budget Rent A Car Corporation
Beneficiary: Ford Motor Credit Company
Amount: $25,000,000.00
L/C No.: TS-06000866
Issuance Date: April 29, 1997
Stated Expiry Date: August 24, 2000
163
FIRST AMENDMENT
TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of October 24,
1997 (this "Amendment"), is made by and among BUDGET RENT A CAR CORPORATION, a
Delaware corporation (the "Borrower"), BUDGET GROUP, INC. (formerly known as
Team Rental Group, Inc.), a Delaware corporation (the "Parent"), the various
financial institutions parties hereto (collectively, the "Lenders"),
NATIONSBANC CAPITAL MARKETS, INC., as a Co-Syndication Agent and as the
Documentation Agent, and CREDIT SUISSE FIRST BOSTON, as a Co-Syndication Agent,
as administrative agent (in such capacity, the "Administrative Agent") for the
Lenders and as the arranger.
W I T N E S S E T H:
WHEREAS, the Borrower, the Parent, the Lenders and the Agents have
heretofore entered into that certain Credit Agreement, dated as of April 29,
1997 (the "Credit Agreement");
WHEREAS, the Credit Agreement provides for the pledge to the
Administrative Agent of all (subject to certain limitations) of the outstanding
shares of the Capital Stock of each existing Foreign Subsidiary of the Borrower
within 180 days of the Closing Date, together with undated stock powers or
equivalent instruments of transfer satisfactory to the Administrative Agent for
such certificates or such other evidence of beneficial ownership, executed in
blank or otherwise, so as to perfect the security interest of the
Administrative Agent therein in accordance with applicable law;
WHEREAS, the Borrower desires to limit such pledge to all (subject
to certain limitations) of the outstanding shares of the Capital Stock of each
Foreign Subsidiary that is not a Non-Material Subsidiary of the Borrower; and
WHEREAS, the Lenders and the Agents are willing, on and subject to
the terms and conditions set forth below, to amend the Credit Agreement as
provided below (the Credit Agreement, as amended pursuant to the terms of this
Amendment, being referred to as the "Amended Credit Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Borrower, the Parent, the Lenders and the
Agents hereby agree as follows:
164
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Definitions. The following terms (whether or
not underscored) when used in this Amendment shall have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Administrative Agent" is defined in the preamble.
"Amended Credit Agreement" is defined in the fourth recital.
"Amendment" is defined in the preamble.
"Borrower" is defined in the preamble.
"Credit Agreement" is defined in the first recital.
"First Amendment to Borrower Pledge Agreement" means the First
Amendment to Borrower Pledge Agreement, substantially in the form of Annex I
hereto, to be entered into by and between the Borrower and the Administrative
Agent.
"First Amendment to Subsidiary Pledge Agreement" means the First
Amendment to Subsidiary Pledge Agreement, substantially in the form of Annex II
hereto, to be entered into by and among the Subsidiaries of the Borrower
parties thereto and the Administrative Agent.
"Lenders" is defined in the preamble.
"Parent" is defined in the preamble.
SECTION 1.2. Other Definitions. Terms for which meanings are
provided in the Amended Credit Agreement are, unless otherwise defined herein
or the context otherwise requires, used in this Amendment with such meanings.
ARTICLE II
AMENDMENTS TO CREDIT AGREEMENT
Subject to the satisfaction of the conditions set forth in Article
III, effective as of the date hereof, the Credit Agreement is hereby amended in
accordance with this Article II; except expressly as so amended by this
Amendment, the Credit Agreement shall continue in full force and effect in
accordance with its terms.
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SECTION 2.1. Amendment to Section 1.1 of the Credit Agreement.
Section 1.1 of the Credit Agreement ("Defined Terms") is hereby amended by
inserting in such Section the following definition in the appropriate
alphabetical order:
"First Amendment" means the First Amendment to Credit
Agreement, dated as of October 24, 1997, among the Borrower, the
Parent, the Lenders parties thereto and the Agents.
SECTION 2.2. Amendment to Section 8.1.8 of the Credit Agreement.
Section 8.1.8 of the Credit Agreement ("Foreign Subsidiaries as of the Closing
Date") is hereby amended by (a) deleting the number "180" from the sixth line
of such Section and inserting the number "210" in lieu thereof and (b)
inserting in the second line of clause (a) of such Section, the words "(other
than a Non-Material Subsidiary)" immediately following the words "Stock of each
Foreign Subsidiary" and immediately preceding the words "owned by the Borrower"
in such line.
ARTICLE III
CONDITIONS TO EFFECTIVENESS
This Amendment, and the amendments and modifications contained
herein, shall be and become effective as of the date hereof subject to the
satisfaction of each of the conditions set forth in this Article III to the
satisfaction of the Administrative Agent.
SECTION 3.1. Execution of Counterparts. The Administrative Agent
shall have received counterparts of this Amendment, duly executed and delivered
on behalf of the Borrower, the Parent and each of the Required Lenders.
SECTION 3.2. Execution of Amendments to Pledge Agreements. The
Administrative Agent shall have received counterparts of each of the First
Amendment to Borrower Pledge Agreement, duly executed and delivered on behalf
of the Borrower, and the First Amendment to Subsidiary Pledge Agreement, duly
executed and delivered on behalf of each Subsidiary of the Borrower that is a
party thereto.
SECTION 3.3. Fees and Expenses. The Administrative Agent shall have
received all fees and expenses due and payable pursuant to Section 5.4 (to the
extent then invoiced) and pursuant to the Credit Agreement (including all
previously invoiced fees and expenses).
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties. In order to induce the
Lenders and the Agents to enter into this Amendment, each of the Borrower and
the Parent hereby represents and warrants to each Agent and each Lender, as of
the date hereof, as follows:
(a) the representations and warranties set forth in
Article VII of the Credit Agreement (excluding, however, those
contained in Section 7.7 of the Credit Agreement) and in each other
Loan Document are, in each case, true and correct (unless stated to
relate solely to an early date, in which case such representations
and warranties are true and correct as of such earlier date);
(b) except as disclosed by the Borrower or the Parent to
the Agents, the Issuer and the Lenders pursuant to Section 7.7 of
the Credit Agreement
(i) no labor controversy, litigation,
arbitration or governmental investigation or proceeding is
pending or, to the best knowledge of the Borrower,
threatened against the Borrower, the Parent or any of
their respective Subsidiaries which might materially
adversely affect the Parent's consolidated business,
operations, assets, revenues, properties or prospects or
which purports to affect the legality, validity or
enforceability of this Agreement, the Notes or any other
Loan Document; and
(ii) no development has occurred in any labor
controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to Section
7.7 of the Credit Agreement which might materially
adversely affect the consolidated businesses, operations,
assets, revenues, properties or prospects of the Borrower,
the Parent and their respective Subsidiaries;
(c) all of the Foreign Subsidiaries (other than those that
are Non-Material Subsidiaries) of the Borrower are set forth on
Schedule I hereto;
(d) no Default has occurred and is continuing, and neither
the Borrower, the Parent nor any of their respective Subsidiaries
nor any other Obligor is in material violation of any law or
governmental regulation or court order or decree; and
(e) this Amendment has been duly authorized, executed and
delivered by each of the Borrower and the Parent and constitutes a
legal, valid and binding obligation of each such Person, enforceable
against it in accordance with its terms, except to the extent the
enforceability hereof may be limited by (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights
and remedies of creditors generally and (ii) the effect of general
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principles of equity, whether enforcement is considered in a
proceeding in equity or at law.
SECTION 4.2. Full Disclosure. Except as corrected by written
information delivered to the Agents and the Lenders reasonably prior to the
date on which this representation is made, all factual information heretofore
or contemporaneously furnished by the Borrower or the Parent in writing to any
Agent, the Issuer or any Lender for purposes of or in connection with this
Amendment or any transaction contemplated hereby is true and accurate in every
material respect and such information is not incomplete by omitting to state
any material fact necessary to make such information not misleading. All
projections delivered to any Agent or any Lender by or on behalf of any
Borrower have been prepared in good faith by the Borrowers and represent the
best estimates of the Borrowers, as of the date hereof, of the reasonably
expected future performance of the businesses reflected in such projections.
SECTION 4.3. Compliance with Credit Agreement. As of the execution
and delivery of this Amendment, each Obligor is in compliance with all the
terms and conditions of the Credit Agreement and the other Loan Documents to be
observed or performed by it thereunder, and no Default has occurred and is
continuing.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Full Force and Effect; Limited Amendment. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants, conditions and other provisions of the Credit Agreement and the
other Loan Documents shall remain unamended and unwaived and shall continue to
be, and shall remain, in full force and effect in accordance with their
respective terms. The amendments set forth herein shall be limited precisely as
provided for herein to the provisions expressly amended herein and shall not be
deemed to be an amendment to, consent to or modification of any other term or
provision of the Credit Agreement, any other Loan Document referred to therein
or herein or of any transaction or further or future action on the part of the
Borrower, the Parent or any other Obligor which would require the consent of
the Lenders under the Credit Agreement or any of the other Loan Documents.
SECTION 5.2. Loan Document Pursuant to Credit Agreement. This
Amendment is a Loan Document executed pursuant to the Credit Agreement and
shall be construed, administered and applied in accordance with all of the
terms and provisions of the Credit Agreement (and, following the date hereof,
the Amended Credit Agreement). Any breach of any representation or warranty or
covenant or agreement contained in this Amendment shall be deemed to be an
Event of Default for all purposes of the Credit Agreement and the other Loan
Documents.
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SECTION 5.3. Further Assurances. Each of the Borrower and the
Parent hereby agrees that it will take any action that from time to time may be
reasonably necessary to effectuate the amendments contemplated herein.
SECTION 5.4. Fees and Expenses. The Borrower shall pay all
reasonable out-of-pocket expenses incurred by the Administrative Agent in
connection with the preparation, negotiation, execution and delivery of this
Amendment and the documents and transactions contemplated hereby, including the
reasonable fees and disbursements of Mayer, Brown, and ▇▇▇▇▇, as counsel for
the Administrative Agent.
SECTION 5.5. Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or
interpretation of this Amendment or any provisions hereof.
SECTION 5.6. Execution of Amendments to Pledge Agreements. By their
signatures below, the Required Lenders acknowledge that the Administrative
Agent will be executing each of the First Amendment to Borrower Pledge
Agreement and the First Amendment to Subsidiary Pledge Agreement.
SECTION 5.7. Execution in Counterparts. This Amendment may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.
SECTION 5.8. Cross-References. References in this Amendment to any
Article or Section are, unless otherwise specified or otherwise required by the
context, to such Article or Section of this Amendment.
SECTION 5.9. Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
SECTION 5.10. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers or general partners (or their
respective officers) thereunto duly authorized as of the day and year first
above written.
BUDGET RENT A CAR CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
BUDGET GROUP INC. (formerly known as Team
Rental Group, Inc.), as a Guarantor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
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CREDIT SUISSE FIRST BOSTON, as a Lender, a
Co-Syndication Agent and the Administrative
Agent
By:
--------------------------------------------
Name:
Title:
By:
--------------------------------------------
Name:
Title:
NATIONSBANC CAPITAL MARKETS, INC., as
a Co-Syndication Agent and the Documentation
Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: V.P.
CREDIT SUISSE FIRST BOSTON, as the Issuer
By:
--------------------------------------------
Name:
Title:
BANK OF HAWAII, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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THE BANK OF NEW YORK, as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
BANK POLSKA KASA OPIEKI, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
BANK UNITED, as a Lender
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director
BHF BANK AKTIENGESELLSCHAFT, as a
Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: V.P.
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
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172
CAISSE NATIONALE DE CREDIT AGRICOLE,
as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: First Vice President
CANADIAN IMPERIAL BANK OF
COMMERCE, as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director, CIB Wood Gundy Securities
Corp., as Agent
CREDIT LYONNAIS CHICAGO BRANCH, as a
Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
IMPERIAL BANK, as a Lender
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
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LONG TERM CREDIT BANK OF JAPAN, as a
Lender
By:
-------------------------------------------
Name:
Title:
NATIONSBANK, N.A. (SOUTH), as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PNC BANK, KENTUCKY, INC., as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ROYAL BANK OF CANADA, as a Lender
By:
-------------------------------------------
Name:
Title:
THE TORONTO-DOMINION BANK, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Mgr. Cr. Admin.
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SCHEDULE I
LIST OF FOREIGN SUBSIDIARIES OF THE BORROWER
THAT ARE NOT NON-MATERIAL SUBSIDIARIES
Name Jurisdiction of Incorporation
---- -----------------------------
Budget Rent a Car Canada Limited Ottawa, Ontario
Budget Rent a Car Limited Auckland, New Zealand
Budget Rent a Car Operations Pty. Ltd. Victoria, Australia
Budget Rent a Car Australia Pty. Ltd. Victoria, Australia
BTI (U.K.) plc London, England
Societe Financiere et de Participation Tours, France
Budget France, S.A. Tours, France
175
ANNEX I
to First Amendment
to Credit Agreement
FIRST AMENDMENT
TO BORROWER PLEDGE AGREEMENT
THIS FIRST AMENDMENT TO BORROWER PLEDGE AGREEMENT, dated as of
October 24, 1997 (this "Amendment"), is made by and between BUDGET RENT A CAR
CORPORATION, a Delaware corporation (the "Borrower"), and CREDIT SUISSE FIRST
BOSTON, as administrative agent (in such capacity, the "Administrative Agent")
for the Secured Parties.
W I T N E S S E T H:
WHEREAS, the Borrower, Budget Group, Inc. (formerly known as Team
Rental Group, Inc.), a Delaware corporation (the "Parent"), various financial
institutions (collectively, the "Lenders"), Nationsbanc Capital Markets, Inc.,
as a Co-Syndication Agent and as the Documentation Agent, and the
Administrative Agent have heretofore entered into that certain First Amendment
to Credit Agreement, dated as of the date hereof (the "First Amendment to
Credit Agreement"), which amends that certain Credit Agreement, dated as of
April 29, 1997 (the "Credit Agreement"), among the Borrower, the Parent, the
Lenders parties thereto, Nationsbanc Capital Markets, Inc., as a Co-Syndication
Agent and as the Documentation Agent, and the Administrative Agent;
WHEREAS, the Borrower and the Administrative Agent have heretofore
entered into that certain Borrower Pledge Agreement, dated as of April 29, 1997
(the "Borrower Pledge Agreement");
WHEREAS, the Credit Agreement provides for the pledge to the
Administrative Agent of, among other things, all (subject to certain
limitations) of the outstanding shares of the Capital Stock of each Foreign
Subsidiary owned, directly or indirectly, by the Borrower on, and subsequent
to, the Closing Date, together with undated stock powers or equivalent
instruments of transfer satisfactory to the Administrative Agent for such
certificates or such other evidence of beneficial ownership, executed in blank
or otherwise, so as to perfect the security interest of the Administrative
Agent therein in accordance with applicable law;
WHEREAS, the Borrower desires to limit such pledge to all (subject
to certain limitations) of the outstanding shares of the Capital Stock of each
Foreign Subsidiary that is not a Non-Material Subsidiary of the Borrower on,
and subsequent to, the Closing Date and to amend the Borrower Pledge Agreement
as set forth below; and
176
WHEREAS, the Administrative Agent is willing, on and subject to the
terms and conditions set forth below, to amend the Borrower Pledge Agreement,
in each case as provided below (the Borrower Pledge Agreement, as amended
pursuant to the terms of this Amendment, being referred to as the "Amended
Borrower Pledge Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Borrower and the Administrative Agent hereby
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Definitions. The following terms (whether or
not underscored) when used in this Amendment shall have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Amended Borrower Pledge Agreement" is defined in the fifth recital.
"Amendment" is defined in the preamble.
"Borrower" is defined in the preamble.
"Borrower Pledge Agreement" is defined in the second recital.
"Credit Agreement" is defined in the first recital.
"First Amendment to Credit Agreement" is defined in the first
recital.
"Lenders" is defined in the first recital.
"Parent" is defined in the first recital.
SECTION 1.2. Other Definitions. Terms for which meanings are
provided for, or incorporated by reference, in the First Amendment to Credit
Agreement are, unless otherwise defined herein or the context otherwise
requires, used in this Amendment with such meanings.
ARTICLE II
AMENDMENTS TO BORROWER PLEDGE AGREEMENT
Subject to the satisfaction of the conditions set forth in Article
III of the First Amendment to Credit Agreement, effective as of the date
hereof, the Borrower Pledge
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177
Agreement is hereby amended in accordance with this Article II; except
expressly as so amended by this Amendment, the Borrower Pledge Agreement shall
continue in full force and effect in accordance with its terms.
SECTION 2.1. Amendment to Section 2.1 of the Borrower Pledge
Agreement. Clause (a) of Section 2.1 of the Borrower Pledge Agreement ("Grant
of Security Interest") is hereby amended by inserting the words "provided,
that, in the case of each Pledged Share Issuer that is a Foreign Subsidiary of
the Borrower, the pledge of the shares of Capital Stock of such Pledged Share
Issuer shall be limited to the extent such pledge would not (x) constitute an
investment in earnings in United States property under Section 956 (or any
successor provision thereto) of the Code that would increase the amount of
income of the applicable pledgor that would otherwise be subject to United
States income tax and (y) subject the Borrower, the Parent or such Pledged
Share Issuer to a significant adverse tax consequence;" after the semicolon
(";") at the end thereof.
SECTION 2.2. Amendments to Article III of the Borrower Pledge
Agreement. Article III of the Borrower Pledge Agreement ("Representations and
Warranties") is hereby amended in accordance with Sections 2.2.1 and 2.2.2
below.
SECTION 2.2.1. Amendment to Section 3.1 of the Borrower Pledge
Agreement. Section 3.1 of the Borrower Pledge Agreement ("Representations and
Warranties, etc.") is hereby amended by inserting the words ", and except as
set forth or may be otherwise provided in the applicable Foreign Pledge
Agreement with respect to a Pledged Share Issuer that is a Foreign Subsidiary
of the Borrower" immediately prior to the period (".") at the end thereof.
SECTION 2.2.2. Amendment to Section 3.4 of the Borrower Pledge
Agreement. Section 3.4 of the Borrower Pledge Agreement ("As to Pledged
Shares") is hereby amended in its entirety to read as follows:
SECTION 3.4. As to Pledged Shares. In the case of any
Pledged Shares constituting such Collateral, all of such Pledged
Shares are duly authorized and validly issued, fully paid, and
non-assessable, and constitute all of the issued and outstanding
shares of Capital Stock of each Pledged Share Issuer (except in the
case of each Pledged Share Issuer that is a Foreign Subsidiary of
the Borrower, in which case, such Pledged Shares constitute all of
the shares of Capital Stock of such Pledged Share Issuer that may be
pledged such that after giving effect to such pledge, such pledge
would not (a) constitute an investment in earnings in United States
property under Section 956 (or any successor provision thereto) of
the Code that would increase the amount of income of the applicable
pledgor that would otherwise be subject to United States income tax
and (b) subject the Borrower, the Parent or such Pledged Share
Issuer to a significant adverse tax consequence). The Pledgor has no
direct Subsidiaries other than (i) the Pledged Share Issuers and
(ii) Subsidiaries of the Borrower that are Non-Material Subsidiaries
or SPCs, except as set forth in Item C of Attachment 1 hereto.
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178
SECTION 2.3. Amendment to Section 4.1 of the Borrower Pledge
Agreement. Section 4.1 of the Borrower Pledge Agreement ("Protect Collateral;
Further Assurances, etc.") is hereby amended by inserting the parenthetical
"(including in the event that the Pledged Share Issuer is a Foreign Subsidiary
of the Borrower, by entering into a Foreign Pledge Agreement)" between the
words "all further instruments" on the seventh line thereof and the comma (",")
following such words.
SECTION 2.4. Amendment to Article VII of the Borrower Pledge
Agreement. Article VII of the Borrower Pledge Agreement ("Miscellaneous
Provisions") is hereby amended by inserting a new Section 7.9 at the end
thereof to read in its entirety as follows:
SECTION 7.9 Foreign Pledge Agreements. Without limiting
any of the rights, remedies, privileges or benefits provided
hereunder to the Administrative Agent for its benefit and the
ratable benefit of the other Secured Parties, the Pledgor and the
Administrative Agent hereby agree that the terms and provisions of
this Pledge Agreement in respect of any Collateral subject to the
pledge or other lien of a Foreign Pledge Agreement are, and shall be
deemed to be, supplemental and in addition to the rights, remedies,
privileges and benefits provided to the Administrative Agent and the
other Secured Parties under such Foreign Pledge Agreement and under
applicable law to the extent consistent with applicable law;
provided, that, in the event that the terms of this Pledge Agreement
conflict or are inconsistent with the applicable Foreign Pledge
Agreement or applicable law governing such Foreign Pledge Agreement,
the terms of such Foreign Pledge Agreement or such applicable law
shall be controlling.
SECTION 2.5. Amendment to Attachment 1 to the Borrower Pledge
Agreement. Attachment 1 to the Borrower Pledge Agreement is hereby amended to
read in its entirety as Attachment 1 hereto.
ARTICLE III
MISCELLANEOUS
SECTION 3.1. Full Force and Effect; Limited Amendment. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants, conditions and other provisions of the Borrower Pledge Agreement
shall remain unamended and unwaived and shall continue to be, and shall remain,
in full force and effect in accordance with their respective terms. The
amendments set forth herein shall be limited precisely as provided for herein
to the provisions expressly amended herein and shall not be deemed to be an
amendment to, consent to or modification of any other term or provision of the
Credit Agreement, any other Loan Document referred to therein or herein or of
any transaction or further or future action on the part of any Borrower, the
Parent or any other Obligor which would require the consent of the Lenders
under the Credit Agreement or any of the other Loan Documents.
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179
SECTION 3.2. Loan Document Pursuant to Credit Agreement. This
Amendment is a Loan Document executed pursuant to the Credit Agreement and
shall be construed, administered and applied in accordance with all of the
terms and provisions of the Credit Agreement (and, following the date hereof,
the Amended Credit Agreement). Any breach of any representation or warranty or
covenant or agreement contained in this Amendment shall be deemed to be an
Event of Default for all purposes of the Credit Agreement and the other Loan
Documents.
SECTION 3.3. Further Assurances. The Borrower agrees that it will
take any action that from time to time may be reasonably necessary to
effectuate the amendments contemplated herein.
SECTION 3.4. Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or
interpretation of this Amendment or any provisions hereof.
SECTION 3.5. Execution in Counterparts. This Amendment may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.
SECTION 3.6. Cross-References. References in this Amendment to any
Article or Section are, unless otherwise specified or otherwise required by the
context, to such Article or Section of this Amendment.
SECTION 3.7. Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SECTION 3.8. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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180
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers or general partners (or their
respective officers) thereunto duly authorized as of the day and year first
above written.
BUDGET RENT A CAR CORPORATION
By:
-----------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON, as the
Administrative Agent
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
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181
ANNEX II
to First Amendment
to Credit Agreement
FIRST AMENDMENT
TO SUBSIDIARY PLEDGE AGREEMENT
THIS FIRST AMENDMENT TO SUBSIDIARY PLEDGE AGREEMENT, dated as of
October 24, 1997 (this "Amendment"), is made by and among each Subsidiary of
Budget Rent A Car Corporation, a Delaware corporation (the "Borrower") a
signatory hereto (each a "Pledgor") and CREDIT SUISSE FIRST BOSTON, as
administrative agent (in such capacity, the "Administrative Agent") for the
Secured Parties.
W I T N E S S E T H:
WHEREAS, the Borrower, Budget Group, Inc. (formerly known as Team
Rental Group, Inc.), a Delaware corporation (the "Parent"), various financial
institutions (collectively, the "Lenders"), Nationsbanc Capital Markets, Inc.,
as a Co-Syndication Agent and as the Documentation Agent, and the
Administrative Agent have heretofore entered into that certain First Amendment
to Credit Agreement, dated as of the date hereof (the "First Amendment to
Credit Agreement"), which amends that certain Credit Agreement, dated as of
April 29, 1997 (the "Credit Agreement"), among the Borrower, the Parent, the
Lenders parties thereto, Nationsbanc Capital Markets, Inc., as a Co-Syndication
Agent and as the Documentation Agent, and the Administrative Agent;
WHEREAS, the Pledgors and the Administrative Agent have heretofore
entered into that certain Subsidiary Pledge Agreement, dated as of April 29,
1997 (the "Subsidiary Pledge Agreement");
WHEREAS, the Pledgors desire to amend the Subsidiary Pledge
Agreement as set forth below; and
WHEREAS, the Administrative Agent is willing, on and subject to the
terms and conditions set forth below, to amend the Subsidiary Pledge Agreement,
in each case as provided below (the Subsidiary Pledge Agreement, as amended
pursuant to the terms of this Amendment, being referred to as the "Amended
Subsidiary Pledge Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, each Pledgor and the Administrative Agent hereby
agree as follows:
182
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Definitions. The following terms (whether or
not underscored) when used in this Amendment shall have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Administrative Agent" is defined in the preamble.
"Amendment" is defined in the preamble.
"Amended Subsidiary Pledge Agreement" is defined in the fourth
recital.
"Borrower" is defined in the preamble.
"Credit Agreement" is defined in the first recital.
"First Amendment to Credit Agreement" is defined in the first
recital.
"Lenders" is defined in the first recital.
"Parent" is defined in the first recital.
"Pledgor" is defined in the preamble.
"Subsidiary Pledge Agreement" is defined in the second recital.
SECTION 1.2. Other Definitions. Terms for which meanings are
provided for, or incorporated by reference, in the First Amendment to Credit
Agreement are, unless otherwise defined herein or the context otherwise
requires, used in this Amendment with such meanings.
ARTICLE II
AMENDMENTS TO SUBSIDIARY PLEDGE AGREEMENT
Subject to the satisfaction of the conditions set forth in Article
III of the First Amendment to Credit Agreement, effective as of the date
hereof, the Subsidiary Pledge Agreement is hereby amended in accordance with
this Article II; except expressly as so amended by this Amendment, the
Subsidiary Pledge Agreement shall continue in full force and effect in
accordance with its terms.
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SECTION 2.1. Amendment to Section 2.1 of the Subsidiary Pledge
Agreement. Clause (a) of Section 2.1 of the Subsidiary Pledge Agreement ("Grant
of Security Interest") is hereby amended by inserting the words "provided,
that, in the case of each Pledged Share Issuer that is a Foreign Subsidiary of
such Pledgor, the pledge of the shares of Capital Stock of such Pledged Share
Issuer shall be limited to the extent such pledge would not (x) constitute an
investment in earnings in United States property under Section 956 (or any
successor provision thereto) of the Code that would increase the amount of
income of the applicable pledgor that would otherwise be subject to United
States income tax and (y) subject the Borrower, the Parent or such Pledged
Share Issuer to a significant adverse tax consequence;" after the semicolon
(";") at the end thereof.
SECTION 2.2. Amendments to Article III of the Subsidiary Pledge
Agreement. Article III of the Subsidiary Pledge Agreement ("Representations and
Warranties") is hereby amended in accordance with Sections 2.2.1 and 2.2.2
below.
SECTION 2.2.1. Amendment to Section 3.1 of the Subsidiary Pledge
Agreement. Section 3.1 of the Subsidiary Pledge Agreement ("Representations and
Warranties, etc.") is hereby amended by inserting the words ", and except as
set forth or may be otherwise provided in the applicable Foreign Pledge
Agreement with respect to a Pledged Share Issuer that is a Foreign Subsidiary
of such Pledgor" immediately prior to the period (".") at the end thereof.
SECTION 2.2.2. Amendment to Section 3.4 of the Subsidiary Pledge
Agreement. Section 3.4 of the Subsidiary Pledge Agreement ("As to Pledged
Shares") is hereby amended in its entirety to read as follows:
SECTION 3.4. As to Pledged Shares. In the case of any
Pledged Shares constituting such Collateral, all of such Pledged
Shares are duly authorized and validly issued, fully paid, and
non-assessable, and constitute all of the issued and outstanding
shares of Capital Stock of each Pledged Share Issuer (except in the
case of each Pledged Share Issuer that is a Foreign Subsidiary of
such Pledgor, in which case, such Pledged Shares constitute all of
the shares of Capital Stock of such Pledged Share Issuer that may be
pledged such that after giving effect to such pledge, such pledge
would not (a) constitute an investment in earnings in United States
property under Section 956 (or any successor provision thereto) of
the Code that would increase the amount of income of the applicable
pledgor that would otherwise be subject to United States income tax
and (b) subject the Borrower, the Parent or such Pledged Share
Issuer to a significant adverse tax consequence). Such Pledgor has
no direct Subsidiaries other than (i) the Pledged Share Issuers and
(ii) Subsidiaries of such Pledgor that are Non-Material Subsidiaries
or SPCs, except as set forth in Item C of Attachment 1 hereto.
SECTION 2.3. Amendment to Section 4.1 of the Subsidiary Pledge
Agreement. Section 4.1 of the Subsidiary Pledge Agreement ("Protect Collateral;
Further Assurances, etc.") is hereby amended by inserting the parenthetical
"(including in the event that the Pledged Share Issuer is a Foreign Subsidiary
of the Borrower, by entering into a Foreign Pledge Agreement)"
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between the words "all further instruments" on the seventh line thereof and the
comma (",") following such words.
SECTION 2.4. Amendment to Article VII of the Subsidiary Pledge
Agreement. Article VII of the Subsidiary Pledge Agreement ("Miscellaneous
Provisions") is hereby amended by inserting a new Section 7.9 at the end
thereof to read in its entirety as follows:
SECTION 7.9 Foreign Pledge Agreements. Without limiting
any of the rights, remedies, privileges or benefits provided
hereunder to the Administrative Agent for its benefit and the
ratable benefit of the other Secured Parties, each Pledgor and the
Administrative Agent hereby agree that the terms and provisions of
this Pledge Agreement in respect of any Collateral subject to the
pledge or other lien of a Foreign Pledge Agreement are, and shall be
deemed to be, supplemental and in addition to the rights, remedies,
privileges and benefits provided to the Administrative Agent and the
other Secured Parties under such Foreign Pledge Agreement and under
applicable law to the extent consistent with applicable law;
provided, that, in the event that the terms of this Pledge Agreement
conflict or are inconsistent with the applicable Foreign Pledge
Agreement or applicable law governing such Foreign Pledge Agreement,
the terms of such Foreign Pledge Agreement or such applicable law
shall be controlling.
SECTION 2.5. Amendment to Attachment 1 to the Subsidiary Pledge
Agreement. Attachment 1 to the Subsidiary Pledge Agreement relating to each
Pledgor for whom a corresponding Attachment 1 is attached hereto shall be
amended in its entirety to read as set forth in such corresponding Attachment 1
hereto.
ARTICLE III
MISCELLANEOUS
SECTION 3.1. Full Force and Effect; Limited Amendment. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants, conditions and other provisions of the Subsidiary Pledge Agreement
shall remain unamended and unwaived and shall continue to be, and shall remain,
in full force and effect in accordance with their respective terms. The
amendments set forth herein shall be limited precisely as provided for herein
to the provisions expressly amended herein and shall not be deemed to be an
amendment to, consent to or modification of any other term or provision of the
Credit Agreement, any other Loan Document referred to therein or herein or of
any transaction or further or future action on the part of any Pledgor, the
Borrower, the Parent or any other Obligor which would require the consent of
the Lenders under the Credit Agreement or any of the other Loan Documents.
SECTION 3.2. Loan Document Pursuant to Credit Agreement. This
Amendment is a Loan Document executed pursuant to the Credit Agreement and
shall be construed, administered and applied in accordance with all of the
terms and provisions of the Credit Agreement (and,
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following the date hereof, the Amended Credit Agreement). Any breach of any
representation or warranty or covenant or agreement contained in this Amendment
shall be deemed to be an Event of Default for all purposes of the Credit
Agreement and the other Loan Documents.
SECTION 3.3. Further Assurances. Each Pledgor agrees that it will
take any action that from time to time may be reasonably necessary to
effectuate the amendments contemplated herein.
SECTION 3.4. Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or
interpretation of this Amendment or any provisions hereof.
SECTION 3.5. Execution in Counterparts. This Amendment may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.
SECTION 3.6. Cross-References. References in this Amendment to any
Article or Section are, unless otherwise specified or otherwise required by the
context, to such Article or Section of this Amendment.
SECTION 3.7. Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SECTION 3.8. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers or general partners (or their
respective officers) thereunto duly authorized as of the day and year first
above written.
BUDGET RENT-A-CAR SYSTEMS, INC.
NYRAC, INC.
DIVERSIFIED SERVICES, INC.
RAPID RENTALS, INC.
BUDGET RENT-A-CAR OF NEW
ORLEANS, INC.
BUDGET RENT-A-CAR
INTERNATIONAL, INC.
CONTROL RISK CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇ INSURANCE AGENCY,
INC.
RESERVATION SERVICES, INC.
BRAC CREDIT CORPORATION
BRAC OF NEW YORK, INC.
AUTOMATED TRANSPORTATION, INC.
▇▇▇▇▇▇▇ CAR SALES, INC.
BUDGET SALES CORPORATION
BUDGET RENT-A-CAR OF CANADA
LIMITED
By
-------------------------------
Name:
Title:
FT. ▇▇▇▇▇ RENTAL GROUP, INC.
▇▇▇-AL, INC.
METRO WEST, INC.
WESTEAM ENTERPRISES, INC.
TEAM CAR SALES OF SAN DIEGO,
INC.
VAN POOL SERVICES, INC.
By
-------------------------------
Name:
Title:
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187
CAPITAL CITY LEASING, INC.
▇▇▇ ▇▇▇▇▇▇, INC.
MACKAY CAR & TRUCK RENTALS,
INC.
TEAM REALTY SERVICES, INC.
TEAM RENTAL OF CINCINNATI, INC.
TEAM RENTAL OF CONNECTICUT,
INC.
TEAM RENTAL OF PHILADELPHIA,
INC.
TEAM RENTAL OF PITTSBURGH, INC.
TEAM RENTAL OF SOUTHERN
CALIFORNIA, INC.
TRANEX RENTALS OF NEW YORK,
INC.
TEAM RENTAL OF FT. ▇▇▇▇▇, INC.
TEAM RENTAL OF ROCHESTER, INC.
By
---------------------------------
Name:
Title:
DAYTON AUTO LEASE COMPANY,
INC.
By
---------------------------------
Name:
Title:
TEAM FLEET SERVICES
CORPORATION
By
---------------------------------
Name:
Title:
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TEAM CAR SALES OF CHARLOTTE,
INC.
TEAM CAR SALES OF DAYTON, INC.
TEAM CAR SALES OF RICHMOND,
INC.
BUDGET CAR SALES, INC. (formerly
known as Team Car Sales, Inc.)
VALCAR RENTAL CAR SALES, INC.
TEAM CAR SALES OF PHILADELPHIA,
INC.
ARIZONA RENT-A-CAR SYSTEMS, INC.
By
------------------------------------
Name:
Title:
TEAM CAR SALES OF SOUTHERN
CALIFORNIA, INC.
By
------------------------------------
Name:
Title:
IN MOTORS VI, LLC
By ValCar Rental Car Sales, Inc., as a
Member
By
------------------------------------
Name:
Title:
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TCS PROPERTIES, LLC
By Budget Car Sales, Inc. (formerly known
as Team Car Sales, Inc.), as a Member
By
---------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON, as
Administrative Agent
By
------------------------------------------
Name:
Title:
By
------------------------------------------
Name:
Title:
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AMENDMENT AND WAIVER NO. 2
TO CREDIT AGREEMENT
THIS AMENDMENT AND WAIVER NO. 2 TO CREDIT AGREEMENT, dated as of
January 28, 1998 (this "Amendment"), is made by and among BUDGET RENT A CAR
CORPORATION, a Delaware corporation (the "Borrower"), BUDGET GROUP, INC., a
Delaware corporation (the "Parent"), the Lenders (as defined below) parties
hereto and the Administrative Agent (as defined below).
W I T N E S S E T H:
WHEREAS, the Borrower, the Parent, the various financial
institutions parties thereto (collectively, the "Lenders"), Nationsbanc Capital
Markets, Inc., ("NationsBanc"), as a co-syndication agent (in such capacity, a
"Co-Syndication Agent") for the Lenders and as the documentation agent (in such
capacity, the "Documentation Agent") for the Lenders, and Credit Suisse First
Boston, as a co-syndication agent (in such capacity, a "Co-Syndication Agent"
and, together with NationsBanc, collectively, the "Co-Syndication Agents") for
the Lenders, as administrative agent (in such capacity, the "Administrative
Agent", and together with, the Co-Syndication Agents and the Documentation
Agent, the "Agents") for the Lenders and as the arranger have heretofore entered
into that certain Credit Agreement, dated as of April 29, 1997 (as amended by
the First Amendment to Credit Agreement, dated as of October 24, 1997, the
"Credit Agreement");
WHEREAS, the Parent desires to acquire all of the Capital Stock of
Cruise America, Inc., a Florida corporation ("Cruise America"), by merging CA
Acquisition Corporation, a Florida corporation and a Wholly Owned Subsidiary of
the Parent ("Acquisition Corp."), with and into Cruise America (the "Merger"),
as a result of which Cruise America will become a Wholly Owned Subsidiary of
the Parent, as more fully described in the Proxy Statement/Prospectus of Cruise
America and the Parent, dated December 29, 1997 (the "Proxy Statement");
WHEREAS, the Parent has requested that the Lenders and the
Administrative Agent (a) grant a limited waiver and consent with respect to
Sections 8.2.1, 8.2.9 and 8.2.17 of the Credit Agreement in order to permit, on
the terms and subject to the conditions hereof, the Merger and (b) in
connection with the Merger, amend the definitions of "Non-Vehicle Debt" and
"Vehicles"; and
WHEREAS, the Lenders and the Administrative Agent are willing, on
and subject to the terms and conditions set forth below, to grant such limited
waiver and consent to permit the Merger and amend the Credit Agreement as
provided below (the Credit Agreement, as amended
191
pursuant to the terms of this Amendment, being referred to as the "Amended
Credit Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Borrower, the Parent, the Lenders and the
Administrative Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Definitions. The following terms (whether or
not underscored) when used in this Amendment shall have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Acquisition Corp." is defined in the second recital.
"Administrative Agent" is defined in the first recital.
"Agents" is defined in the first recital.
"Amended Credit Agreement" is defined in the fourth recital.
"Amendment" is defined in the preamble.
"Borrower" is defined in the preamble.
"Amendment Effective Date Certificate" means the amendment effective
date certificate executed and delivered by the Borrower and the Parent pursuant
to Section 3.7, substantially in the form of Annex I hereto.
"Credit Agreement" is defined in the first recital.
"Cruise America" is defined in the second recital.
"First Amendment to Subsidiary Security Agreement" means the First
Amendment to Subsidiary Security Agreement, substantially in the form of Annex
II hereto, to be entered into by the Subsidiaries of the Borrower parties
thereto and the Administrative Agent.
"Lenders" is defined in the first recital.
"Merger" is defined in the second recital.
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"Merger Agreement" is defined in Section 3.4.
"Parent" is defined in the preamble.
"Proxy Statement" is defined in the second recital.
"Second Amendment Effective Date" is defined in Section 3.1.
"Supplement to Parent Pledge Agreement" means Supplement No. 1 to
Parent Pledge Agreement, substantially in the form of Annex III hereto, to be
made by the Parent and consented to by the Administrative Agent.
"Third Amendment to Subsidiary Pledge Agreement" means the Third
Amendment to Subsidiary Pledge Agreement, substantially in the form of Annex IV
hereto, to be entered into by the Subsidiaries of the Borrower parties thereto
and the Administrative Agent.
SECTION 1.2. Other Definitions. Terms for which meanings are
provided in the Amended Credit Agreement are, unless otherwise defined herein
or the context otherwise requires, used in this Amendment with such meanings.
ARTICLE II
AMENDMENTS AND LIMITED WAIVER
Effective on (and subject to the occurrence of) the Second Amendment
Effective Date, certain provisions of the Credit Agreement are hereby amended
or waived in accordance with this Article II; except expressly as so amended or
waived by this Amendment, the Credit Agreement shall continue in full force and
effect in accordance with its terms.
SECTION 2.1. Amendments to Credit Agreement. Section 1.1 of the
Credit Agreement ("Defined Terms") is amended in accordance with Sections 2.1.1
and 2.1.2.
SECTION 2.1.1. Section 1.1 of the Credit Agreement is amended by
inserting in such Section the following definition in the appropriate
alphabetical order:
"Second Amendment" means the Amendment and Waiver No. 2 to
Credit Agreement, dated as of January __, 1998, among the Borrower,
the Parent, the Lenders parties thereto and the Administrative
Agent.
SECTION 2.1.2. The following definitions in Section 1.1 of the
Credit Agreement are amended as follows:
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(a) "Non-Vehicle Debt" is amended by inserting immediately
prior to the period (".") at the end thereof the following:
"plus (iii) with respect to any Vehicle not financed
pursuant to the Series 1994-1 Supplement to the Base
Indenture, the Series 1996-1 Supplement to the Base
Indenture, the Series 1997-1 Supplement to the Base
Indenture, the Series 1997-2 Supplement to the Base
Indenture or the Series 1994-A Supplement to the Base
Indenture dated as of June 1, 1994, among Budget Fleet
Finance Corporation, the Borrower and The Bank of New York
(as Trustee), any obligation of the Borrower, the Parent
or any of their respective Subsidiaries (other than TFFC
or another SPC) payable to the source of such financing to
the extent such obligation exceeds the fair market value
of such Vehicle"; and
(b) "Vehicles" is amended in its entirety to read as
follows:
"'Vehicles' means all existing and hereafter
acquired motor vehicle inventory of the Borrower and the
Borrower's Subsidiaries, consisting of (i) passenger
automobiles, light-duty and medium-duty trucks and vans
and (ii) motorcycles, sport utility vehicles, buses, truck
campers and motor homes, in each case, whether held for
sale, lease or rental purposes.".
SECTION 2.2. Limited Waiver. On the terms and subject to the
conditions set forth herein and in reliance on the representations and
warranties of each of the Borrower and the Parent herein contained, the
Required Lenders (a) waive the restrictions set forth in Sections 8.2.9 and
8.2.17 of the Credit Agreement to the extent necessary to permit the Merger and
(b) waive the restrictions set forth in Section 8.2.1 of the Credit Agreement
to the extent necessary to permit Cruise America to engage in the businesses
conducted by it on the date hereof and described in the Proxy Statement and
such activities as may be incidental or related thereto. The foregoing waiver
shall be limited precisely as written and in no event shall be deemed to
constitute a waiver of compliance by the Parent or the Borrower with respect to
any other term, provision or condition of the Credit Agreement or any other
Loan Document or prejudice any right or remedy that any Agent or any Lender may
now have or may have in the future under or in connection with the Credit
Agreement, any other Loan Document or any other instrument or agreement
referred to therein.
ARTICLE III
CONDITIONS TO EFFECTIVENESS
SECTION 3.1. Second Amendment Effective Date. This Amendment, and
the amendments and modifications and limited waiver contained herein, shall be
and become effective on the date (the "Second Amendment Effective Date") when
each of the conditions set forth in this Article III shall have been fulfilled
to the satisfaction of the Administrative Agent.
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SECTION 3.2. Execution of Counterparts. The Administrative Agent
shall have received counterparts of this Amendment, duly executed and delivered
on behalf of the Borrower, the Parent and each of the Required Lenders.
SECTION 3.3. Resolutions, etc. The Administrative Agent shall have
received from Cruise America and each of its Subsidiaries (other than a Foreign
Subsidiary, an SPC or a Non-Material Subsidiary) a certificate, dated the Second
Amendment Effective Date, of the Secretary or Assistant Secretary of such Person
as to
(a) resolutions of its Board of Directors then in full
force and effect authorizing the execution, delivery and performance
of Supplement No. 1 to Subsidiary Guaranty, Supplement No. 1 to
Subsidiary Security Agreement and each other Loan Document to be
executed by it;
(b) the incumbency and signatures of those of its officers
authorized to act with respect to Supplement No. 1 to Subsidiary
Guaranty, Supplement No. 1 to Subsidiary Security Agreement and each
other Loan Document to be executed by it; and
(c) the full force and validity of each Organic Document
of such Person and true and complete copies thereof,
upon which certificate each Lender, the Issuer and each Agent may conclusively
rely until it shall have received a further certificate of the Secretary of
such Person canceling or amending such prior certificate.
SECTION 3.4. Merger Consummated. The conditions to the obligations
of the Parent and Acquisition Corp. to consummate the Merger set forth in the
Plan and Agreement of Merger, dated as of November 25, 1997 (the "Merger
Agreement"), among Cruise America, the Parent and Acquisition Corp. shall have
been satisfied in all material respects (without amendment or waiver of, or
other forbearance to exercise any rights with respect to, any of the material
terms or provisions thereof by the Parent or Acquisition Corp.), and the Merger
shall have been consummated in accordance with the terms thereof.
SECTION 3.5. Consents, etc. The Administrative Agent shall have
received true and correct copies of all governmental and third party approvals
and consents necessary or advisable in connection with the Merger (including
this Amendment and each other amendment/waiver relating to any material
agreement for borrowed money to which the Parent or any Subsidiary of the
Parent is a party) and continuing operations of the Parent and its Subsidiaries
(after giving effect to the consummation of the Merger) shall have been
obtained and be in full force and effect and all applicable waiting periods
shall have expired without any action being taken or threatened by any
competent authority which would restrain, prevent or otherwise impose adverse
conditions on the Merger or the financing thereof.
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195
SECTION 3.6. No Material Adverse Change. There shall not have
occurred a material adverse change in the business, property, operations,
assets, liabilities, condition (financial or otherwise) or prospects of the
Parent and its Subsidiaries, taken as a whole, or the Borrower and its
Subsidiaries, taken as a whole, since December 31, 1996.
SECTION 3.7. Amendment Effective Date Certificate. The
Administrative Agent shall have received, with counterparts for each Lender,
the Amendment Effective Date Certificate, dated the Second Amendment Effective
Date and duly executed and delivered by an Authorized Officer of each of the
Borrower and Parent, in which certificate each of the Borrower and Parent shall
agree and acknowledge that the statements made therein shall be deemed to be
true and correct representations and warranties of each of the Borrower and
Parent made as of such date, and, at the time each such certificate is
delivered, such statements shall in fact be true and correct.
SECTION 3.8. Supplement to Parent Pledge Agreement. The
Administrative Agent shall have received a Supplement to Parent Pledge
Agreement, dated the Second Amendment Effective Date, duly executed and
delivered by the Parent, together with the certificate(s), evidencing all of
the issued and outstanding shares of Capital Stock of Cruise America pledged
pursuant to the Parent Pledge Agreement, which certificate(s) shall be
accompanied by undated stock powers duly executed in blank.
SECTION 3.9. Supplement to Subsidiary Guaranty. The Administrative
Agent shall have received a Supplement to Subsidiary Guaranty, substantially in
the form of Annex I to the Subsidiary Guaranty and dated the Second Amendment
Effective Date, duly executed and delivered by each of Cruise America and each
of its Subsidiaries (other than a Foreign Subsidiary, an SPC or a Non-Material
Subsidiary).
SECTION 3.10. Amendment to Subsidiary Pledge Agreement. The
Administrative Agent shall have received counterparts of the Third Amendment to
Subsidiary Pledge Agreement, dated as of the Second Amendment Effective Date
and duly executed and delivered on behalf of each Subsidiary of the Borrower
that is a party thereto.
SECTION 3.11. Supplement to Subsidiary Pledge Agreement. The
Administrative Agent shall have received a Supplement to Subsidiary Pledge
Agreement, substantially in the form of Annex I to the Subsidiary Pledge
Agreement (after giving effect to the amendments set forth in the Third
Amendment to Subsidiary Pledge Agreement), dated as of the Second Amendment
Effective Date and duly executed and delivered by Cruise America, together with
the certificate(s), evidencing all of the issued and outstanding shares of
Capital Stock of each Subsidiary of Cruise America (other than an SPC or a
Non-Material Subsidiary) pledged pursuant to the Subsidiary Pledge Agreement,
which certificate(s) shall be accompanied by undated stock powers duly executed
in blank.
SECTION 3.12. Amendment to Subsidiary Security Agreement. The
Administrative Agent shall have received a counterpart of the First Amendment
to Subsidiary Security
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Agreement, dated as of the Second Amendment Effective Date and duly executed
and delivered on behalf of each Subsidiary of the Borrower that is a party
thereto.
SECTION 3.13. Supplement to Subsidiary Security Agreement. The
Administrative Agent shall have received a Supplement to Subsidiary Security
Agreement, substantially in the form of Annex I to the Subsidiary Security
Agreement (after giving effect to the amendments set forth in the First
Amendment to Subsidiary Security Agreement), dated as of the Second Amendment
Effective Date and duly executed and delivered by each of Cruise America and
each of its Subsidiaries (other than a Foreign Subsidiary, an SPC or a
Non-Material Subsidiary), together with
(a) acknowledgment copies of properly filed Uniform
Commercial Code financing statements (Form UCC-1) or such other
evidence of filing as may be acceptable to the Administrative Agent,
or in the discretion of the Administrative Agent copies suitable for
filing, naming such Obligor, as the debtor and the Administrative
Agent as the secured party, or other similar instruments or
documents, filed or suitable for filing under the Uniform Commercial
Code of all jurisdictions as may be necessary or, in the opinion of
the Administrative Agent, desirable to perfect the security interest
of the Administrative Agent pursuant to the Subsidiary Security
Agreement;
(b) executed copies of proper Uniform Commercial Code Form
UCC-3 termination statements, if any, necessary to release all Liens
and other rights of any Person (other than Liens permitted under
Section 8.2.3 of the Credit Agreement) in any collateral described
in the Subsidiary Security Agreement previously granted by such
Obligor, together with such other Uniform Commercial Code Form UCC-3
termination statements as the Administrative Agent may reasonably
request from such Obligor; and
(c) certified copies of Uniform Commercial Code Requests
for Information or Copies (Form UCC-11), or a similar search report
certified by a party acceptable to the Administrative Agent, dated a
date reasonably near to the Second Amendment Effective Date, listing
all effective financing statements, tax liens and judgment liens
which name such Obligor (under its present names and any previous
names thereof) as the debtor and which are filed in the
jurisdictions in which filings were made pursuant to clause (a)
above, together with copies of such financing statements (none of
which (other than those described in clause (a), if such Form UCC-11
or search report, as the case may be, is current enough to list such
financing statements described in clause (a)) shall cover any
collateral described in the Subsidiary Security Agreement).
SECTION 3.14. Pro Forma Compliance Certificate. The Administrative
Agent shall have received, with counterparts for each Lender, a Compliance
Certificate executed by the chief financial or accounting Authorized Officer of
the Parent certifying and showing (in reasonable detail and with appropriate
calculations and computations in all respects reasonably satisfactory to the
Administrative Agent) that on a historical pro forma basis (after giving effect
to the Merger and all transactions related thereto (including all Indebtedness
that would be assumed or
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incurred as a result of such acquisition) and all Business Acquisitions
consummated prior thereto during the applicable periods thereunder) as of the
last day of the most recently completed Fiscal Quarter with respect to which,
pursuant to Section 8.1.1 of the Credit Agreement, financial statements have
been, or are required to have been, delivered by the Borrower or the Parent and
the Borrower would be in compliance with Section 8.2.4 of the Credit Agreement
as of the last day of such Fiscal Quarter and would not suffer an increase in
the Leverage Ratio as of such date.
SECTION 3.15. Opinions of Counsel. The Administrative Agent shall
have received (a) opinions, dated the Second Amendment Effective Date and
addressed to the Administrative Agent and the Lenders, from counsel to the
Obligors, in form and substance satisfactory to the Administrative Agent, and
(b) such reliance letters as it may reasonably request with respect to opinions
delivered in connection with the Merger dated the Second Amendment Effective
Date and addressed to the Agents and all of the Lenders.
SECTION 3.16. Fees and Expenses. The Administrative Agent shall have
received all fees and expenses due and payable pursuant to Section 5.4 (to the
extent then invoiced) and pursuant to the Credit Agreement (including all
previously invoiced fees and expenses).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties. In order to induce the
Lenders and the Administrative Agent to enter into this Amendment, each of the
Borrower and the Parent hereby represents and warrants to each Agent and each
Lender, as of the date hereof, as follows:
(a) the representations and warranties set forth in
Article VII of the Credit Agreement (excluding, however, those
contained in (i) Section 7.7 of the Credit Agreement and (ii)
Section 7.8 of the Credit Agreement as such Section relates to the
ownership by the Parent of Acquisition Corp. prior to the Merger and
Cruise America immediately following the Merger) and in each other
Loan Document are, in each case, true and correct (unless stated to
relate solely to an earlier date, in which case such representations
and warranties are true and correct as of such earlier date);
(b) except as disclosed by the Borrower or the Parent to
the Agents, the Issuer and the Lenders pursuant to Section 7.7 of
the Credit Agreement
(i) no labor controversy, litigation,
arbitration or governmental investigation or proceeding is
pending or, to the best knowledge of the Borrower,
threatened against the Borrower, the Parent or any of
their respective Subsidiaries which might materially
adversely affect the Parent's consolidated business,
operations, assets, revenues, properties or prospects or
which purports to affect
-8-
198
the legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document; and
(ii) no development has occurred in any labor
controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to Section
7.7 of the Credit Agreement which might materially
adversely affect the consolidated businesses, operations,
assets, revenues, properties or prospects of the Borrower,
the Parent and their respective Subsidiaries;
(c) no Default has occurred and is continuing, and neither
the Borrower, the Parent nor any of their respective Subsidiaries
nor any other Obligor is in material violation of any law or
governmental regulation or court order or decree; and
(d) this Amendment has been duly authorized, executed and
delivered by each of the Borrower and the Parent and constitutes a
legal, valid and binding obligation of each such Person, enforceable
against it in accordance with its terms, except to the extent the
enforceability hereof may be limited by (i) the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights
and remedies of creditors generally and (ii) the effect of general
principles of equity, whether enforcement is considered in a
proceeding in equity or at law.
SECTION 4.2. Full Disclosure. Except as corrected by written
information delivered to the Agents and the Lenders reasonably prior to the
date on which this representation is made, all factual information heretofore
or contemporaneously furnished by the Borrower or the Parent in writing to any
Agent, the Issuer or any Lender for purposes of or in connection with this
Amendment or any transaction contemplated hereby is true and accurate in every
material respect and such information is not incomplete by omitting to state
any material fact necessary to make such information not misleading. All
projections delivered to any Agent or any Lender by or on behalf of any
Borrower have been prepared in good faith by the Borrowers and represent the
best estimates of the Borrowers, as of the date hereof, of the reasonably
expected future performance of the businesses reflected in such projections.
SECTION 4.3. Compliance with Credit Agreement. As of the execution
and delivery of this Amendment, each Obligor is in compliance with all the
terms and conditions of the Credit Agreement and the other Loan Documents to be
observed or performed by it thereunder, and no Default has occurred and is
continuing.
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199
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Full Force and Effect; Limited Amendment. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants, conditions and other provisions of the Credit Agreement and the
other Loan Documents shall remain unamended and unwaived and shall continue to
be, and shall remain, in full force and effect in accordance with their
respective terms. The amendments set forth herein shall be limited precisely as
provided for herein to the provisions expressly amended herein and shall not be
deemed to be an amendment to, consent to or modification of any other term or
provision of the Credit Agreement, any other Loan Document referred to therein
or herein or of any transaction or further or future action on the part of the
Borrower, the Parent or any other Obligor which would require the consent of
the Lenders under the Credit Agreement or any of the other Loan Documents.
SECTION 5.2. Loan Document Pursuant to Credit Agreement. This
Amendment is a Loan Document executed pursuant to the Credit Agreement and
shall be construed, administered and applied in accordance with all of the
terms and provisions of the Credit Agreement (and, following the date hereof,
the Amended Credit Agreement). Any breach of any representation or warranty or
covenant or agreement contained in this Amendment shall be deemed to be an
Event of Default for all purposes of the Credit Agreement and the other Loan
Documents.
SECTION 5.3. Further Assurances. Each of the Borrower and the Parent
hereby agrees that it will take any action that from time to time may be
reasonably necessary to effectuate the amendments contemplated herein.
SECTION 5.4. Fees and Expenses. The Borrower shall pay all
reasonable out-of-pocket expenses incurred by the Administrative Agent in
connection with the preparation, negotiation, execution and delivery of this
Amendment and the documents and transactions contemplated hereby, including the
reasonable fees and disbursements of Mayer, Brown, and ▇▇▇▇▇, as counsel for
the Administrative Agent.
SECTION 5.5. Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or
interpretation of this Amendment or any provisions hereof.
SECTION 5.6. Execution of Amendment to Subsidiary Security Agreement
and Amendment to Subsidiary Pledge Agreement. By their signatures below, the
Required Lenders acknowledge that the Administrative Agent will be executing
each of the First Amendment to Subsidiary Security Agreement and the Third
Amendment to the Subsidiary Pledge Agreement.
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200
SECTION 5.7. Execution in Counterparts. This Amendment may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.
SECTION 5.8. Cross-References. References in this Amendment to any
Article or Section are, unless otherwise specified or otherwise required by the
context, to such Article or Section of this Amendment.
SECTION 5.9. Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
SECTION 5.10. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE
A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.]
-11-
201
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
BUDGET RENT A CAR CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name:
Title:
BUDGET GROUP INC., as a Guarantor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name:
Title:
-12-
202
CREDIT SUISSE FIRST BOSTON, as a Lender,
and the Administrative Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Associate
CREDIT SUISSE FIRST BOSTON, as the Issuer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Associate
BANK OF HAWAII, as a Lender
By:
----------------------------------------
Name:
Title:
-13-
▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
BANK POLSKA KASA OPIEKI, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
BANK UNITED, as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director
BHF BANK AKTIENGESELLSCHAFT, as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: V.P.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
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204
CREDIT AGRICOLE INDOSUEZ, as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: First Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇, F.V.P.
Title: Head of Corporate Banking Chicago
CANADIAN IMPERIAL BANK OF COMMERCE,
as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇
Title: Executive Director
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp., As Agent
CREDIT LYONNAIS CHICAGO BRANCH, as a Lender
By:
----------------------------------------
Name:
Title:
IMPERIAL BANK, as a Lender
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
-15-
205
LONG TERM CREDIT BANK OF JAPAN, as a Lender
By:
----------------------------------------
Name:
Title:
NATIONSBANK, N.A. (SOUTH), as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PNC BANK, KENTUCKY, INC., as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
ROYAL BANK OF CANADA, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Manager - Automotive Group
THE TORONTO-DOMINION BANK, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Mgr. Cr. Admin.
-16-
206
ANNEX I
to Second Amendment
to Credit Agreement
AMENDMENT EFFECTIVE DATE CERTIFICATE
BUDGET GROUP, INC.
BUDGET RENT A CAR CORPORATION
This Amendment Effective Date Certificate (this "Certificate") is
delivered pursuant to Section 3.8 of the Amendment and Waiver No. 2 to Credit
Agreement, dated as of January 28, 1998 (the "Second Amendment"), among Budget
Rent a Car Corporation, a Delaware corporation (the "Borrower"), Budget Group,
Inc. (formerly known as Team Rental Group, Inc.), a Delaware corporation (the
"Parent"), the various financial institutions as are, or may from time to time
become, parties thereto (each, individually, a "Lender", and collectively, the
"Lenders"), and Credit Suisse First Boston, as the administrative agent (in such
capacity, the "Administrative Agent"). Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings provided for, or
incorporated by reference, in the Credit Agreement.
Each of the undersigned hereby certifies, represents and warrants, for
and on behalf of the Parent and the Borrower, as the case may be, as of the
Second Amendment Effective Date, as follows:
1. Merger Consummated. The conditions to the obligations of the Parent
and CA Acquisition Corporation, a Florida corporation and a Wholly Owned
Subsidiary of the Parent ("Acquisition Corp."), to consummate the Merger set
forth in the Plan and Agreement of Merger, dated as of November 25, 1997 (the
"Merger Agreement", a true and complete copy of which, together with all
agreements delivered in connection therewith, is attached hereto as Annex I),
among Cruise America, the Parent and Acquisition Corp. have been satisfied in
all material respects (without amendment or waiver of, or other forbearance to
exercise any rights with respect to, any of the material terms or provisions
thereof by the Parent or Acquisition Corp.), and the Merger has been consummated
in accordance with the terms thereof.
2. Consents, etc. All governmental and third party approvals and
consents necessary or advisable in connection with the Merger (including this
Amendment and each other amendment/waiver relating to any material agreement for
borrowed money to which the Parent or any Subsidiary of the Parent is a party)
and continuing operations of the Parent and its Subsidiaries (after giving
effect to the consummation of the Merger) have been obtained and are in full
force and effect and all applicable waiting periods have expired without any
action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on the Merger or the
financing thereof. True and complete copies of all such governmental and third
party approvals and consents are attached hereto as Annex II.
207
3. No Material Adverse Change. There has not occurred a material
adverse change in the business, property, operations, assets, liabilities,
condition (financial or otherwise) or prospects of the Parent and its
Subsidiaries, taken as a whole, or the Borrower and its Subsidiaries, taken as a
whole, since December 31, 1996.
4. Warranties, No Default, etc. Both before and after giving effect to
the Second Amendment Effective Date, the following statements are true and
correct
(a) the representations and warranties set forth in Article
VII of the Credit Agreement (excluding, however, those contained in (i)
Section 7.7 thereof and (ii) Section 7.8 thereof as such Section
relates to the ownership by the Parent of Acquisition Corp. prior to
the Merger and Cruise America immediately following the Merger) and in
each other Loan Document are, in each case, true and correct with the
same effect as if then made (unless stated to relate solely to an early
date, in which case such representations and warranties are true and
correct as of such earlier date);
(b) except as disclosed by the Borrower to the Agents, the
Issuer and the Lenders pursuant to Section 7.7 of the Credit Agreement
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding is pending or, to the
best knowledge of the Borrower, threatened against the
Borrower, the Parent or any of their respective Subsidiaries
which might materially adversely affect the Parent's
consolidated business, operations, assets, revenues,
properties or prospects or which purports to affect the
legality, validity or enforceability of this Agreement, the
Notes or any other Loan Document; and
(ii) no development has occurred in any labor
controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to Section 7.7
of the Credit Agreement which might materially adversely
affect the consolidated businesses, operations, assets,
revenues, properties or prospects of the Borrower, the Parent
and their respective Subsidiaries; and
(c) no Default has occurred and be continuing, and neither the
Borrower, the Parent nor any of their respective Subsidiaries nor any
other Obligor is in material violation of any law or governmental
regulation or court order or degree.
5. Material Subsidiaries. As of the Second Amendment Effective Date,
all of the Subsidiaries of the Borrower which are not Non-material Subsidiaries
or SPCs are, collectively, parties to the First Amendment to Subsidiary Security
Agreement and the Third Amendment to Subsidiary Pledge Agreement and attached
hereto as Annex III is a summary of such mergers.
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208
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed and delivered, and the certification, representations and warranties
contained herein to be duly made, by an Authorized Officer this ____ day of
_________, 1998.
BUDGET GROUP, INC.
By
----------------------------------------
Title:
BUDGET RENT A CAR CORPORATION
By
----------------------------------------
Title:
-3-
209
ANNEX I
[MERGER AGREEMENT]
210
ANNEX II
[APPROVALS AND CONSENTS]
211
ANNEX III
SUBSIDIARY MERGERS
212
ANNEX II
to Second Amendment to
Credit Agreement
FIRST AMENDMENT
TO SUBSIDIARY SECURITY AGREEMENT
THIS FIRST AMENDMENT TO SUBSIDIARY SECURITY AGREEMENT, dated as of
January 28, 1998 (this "Amendment"), is made by and among each Subsidiary (as
defined in the Credit Agreement referred to below) of Budget Rent A Car
Corporation, a Delaware corporation (the "Borrower"), a signatory hereto (each a
"Grantor" and collectively, the "Grantors") and the Administrative Agent (as
defined below).
W I T N E S S E T H:
WHEREAS, the Borrower, Budget Group, Inc. (formerly known as Team
Rental Group, Inc.), a Delaware corporation (the "Parent"), the various
financial institutions parties thereto (collectively, the "Lenders"),
Nationsbanc Capital Markets, Inc., ("NationsBanc"), as a co-syndication agent
(in such capacity, a "Co-Syndication Agent") for the Lenders and as the
documentation agent (in such capacity, the "Documentation Agent") for the
Lenders, and Credit Suisse First Boston, as a co-syndication agent (in such
capacity, a "Co-Syndication Agent" and, together with NationsBanc, collectively,
the "Co-Syndication Agents") for the Lenders, as administrative agent (in such
capacity, the "Administrative Agent", and together with, the Co-Syndication
Agents and the Documentation Agent, the "Agents") for the Lenders and as the
arranger have heretofore entered into that certain Second Amendment to Credit
Agreement, dated as of the date hereof (the "Second Amendment to Credit
Agreement"), which amends that certain Credit Agreement, dated as of April 29,
1997 (as amended by the First Amendment to Credit Agreement, dated as of October
24, 1997, the "Credit Agreement") among such parties;
WHEREAS, the Grantors and the Administrative Agent have heretofore
entered into that certain Subsidiary Security Agreement, dated as of April 29,
1997 (the "Subsidiary Security Agreement");
WHEREAS, the Grantors desire to amend the Subsidiary Security Agreement
as set forth below; and
WHEREAS, the Administrative Agent is willing, on and subject to the
terms and conditions set forth below, to amend the Subsidiary Security
Agreement, in each case as provided below (the Subsidiary Security Agreement, as
amended pursuant to the terms of this Amendment, being referred to as the
"Amended Subsidiary Security Agreement");
213
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, each Grantor and the Administrative Agent hereby
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Definitions. The following terms (whether or not
underscored) when used in this Amendment shall have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the first recital.
"Amendment" is defined in the preamble.
"Amended Subsidiary Security Agreement" is defined in the fourth
recital.
"Borrower" is defined in the preamble.
"Credit Agreement" is defined in the first recital.
"Grantor" and "Grantors" are defined in the preamble.
"Lenders" is defined in the first recital.
"Parent" is defined in the first recital.
"Second Amendment to Credit Agreement" is defined in the first recital.
"Subsidiary Security Agreement" is defined in the second recital.
SECTION 1.2. Other Definitions. Terms for which meanings are provided
for, or incorporated by reference, in the Second Amendment to Credit Agreement
are, unless otherwise defined herein or the context otherwise requires, used in
this Amendment with such meanings.
ARTICLE II
AMENDMENTS TO SUBSIDIARY SECURITY AGREEMENT
SECTION 2.1. Amendment to Article I of the Subsidiary Security
Agreement. Section 1.1 of the Subsidiary Security Agreement ("Defined Terms") is
hereby amended by inserting in such Section the following definition in the
appropriate alphabetical order:
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214
"Grantor" and "Grantors" are defined in the preamble and shall
include each other Person which may from time to time hereafter become
a party hereto pursuant to Section 7.8.
SECTION 2.2. Amendment to Article VII of the Subsidiary Security
Agreement. Article VII of the Subsidiary Security Agreement ("Miscellaneous
Provisions") is hereby amended by inserting a new Section 7.8 at the end thereof
to read in its entirety as follows:
SECTION 7.8 Additional Grantors. Upon the execution and
delivery by any other Person of an instrument in the form of Annex I
hereto, such Person shall become a "Grantor" hereunder with the same
force and effect as if originally named as a Grantor herein. The
execution and delivery of any such instrument shall not require the
consent of any other Grantor hereunder. The rights and obligations of
each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this
Security Agreement.
SECTION 2.3. Amendment to Schedules to the Subsidiary Security
Agreement. The Schedules to the Subsidiary Security Agreement relating to each
Grantor for whom corresponding Schedules are attached hereto shall be amended in
their entirety to read as set forth in such corresponding Schedules hereto.
SECTION 2.4. Addition of Annex I. The Subsidiary Security Agreement is
hereby amended by inserting a new Annex I at the end thereof in the form of
Annex I hereto.
ARTICLE III
MISCELLANEOUS
SECTION 3.1. Full Force and Effect; Limited Amendment. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants, conditions and other provisions of the Subsidiary Security Agreement
shall remain unamended and unwaived and shall continue to be, and shall remain,
in full force and effect in accordance with their respective terms. The
amendments set forth herein shall be limited precisely as provided for herein to
the provisions expressly amended herein and shall not be deemed to be an
amendment to, consent to or modification of any other term or provision of the
Credit Agreement, any other Loan Document referred to therein or herein or of
any transaction or further or future action on the part of any Grantor, the
Borrower, the Parent or any other Obligor which would require the consent of the
Lenders under the Credit Agreement or any of the other Loan Documents.
SECTION 3.2. Loan Document Pursuant to Credit Agreement. This Amendment
is a Loan Document executed pursuant to the Credit Agreement and shall be
construed, administered and applied in accordance with all of the terms and
provisions of the Credit Agreement. Any breach of any representation or warranty
or covenant or agreement contained in this Amendment
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215
shall be deemed to be an Event of Default for all purposes of the Credit
Agreement and the other Loan Documents.
SECTION 3.3. Further Assurances. Each Grantor agrees that it will take
any action that from time to time may be reasonably necessary to effectuate the
amendments contemplated herein.
SECTION 3.4. Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or interpretation
of this Amendment or any provisions hereof.
SECTION 3.5. Execution in Counterparts. This Amendment may be executed
by the parties hereto in several counterparts, each of which shall be deemed to
be an original and all of which shall constitute together but one and the same
agreement.
SECTION 3.6. Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SECTION 3.7. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-4-
216
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers or general partners (or their respective
officers) thereunto duly authorized as of the day and year first above written.
BUDGET RENT-A-CAR SYSTEMS, INC.
NYRAC, INC.
BUDGET RENT-A-CAR
INTERNATIONAL, INC.
CONTROL RISK CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇ INSURANCE AGENCY,
INC.
RESERVATION SERVICES, INC.
BRAC CREDIT CORPORATION
AUTOMATED TRANSPORTATION, INC.
▇▇▇▇▇▇▇ CAR SALES, INC.
BUDGET SALES CORPORATION
By
---------------------------------------
Name:
Title:
TEAM CAR SALES OF SAN DIEGO,
INC.
VAN POOL SERVICES, INC.
By
---------------------------------------
Name:
Title:
TEAM REALTY SERVICES, INC.
By
---------------------------------------
Name:
Title:
-5-
217
DAYTON AUTO LEASE COMPANY,
INC.
By
---------------------------------------
Name:
Title:
TEAM FLEET SERVICES
CORPORATION
By
---------------------------------------
Name:
Title:
TEAM CAR SALES OF CHARLOTTE,
INC.
TEAM CAR SALES OF DAYTON, INC.
TEAM CAR SALES OF RICHMOND,
INC.
BUDGET CAR SALES, INC. (formerly
known as Team Car Sales, Inc.)
VALCAR RENTAL CAR SALES, INC.
TEAM CAR SALES OF PHILADELPHIA,
INC.
By
---------------------------------------
Name:
Title:
-6-
218
TEAM CAR SALES OF SOUTHERN
CALIFORNIA, INC.
By
---------------------------------------
Name:
Title:
IN MOTORS VI, LLC
By ValCar Rental Car Sales, Inc., as a
Member
By
---------------------------------------
Name:
Title:
TCS PROPERTIES, LLC
By Budget Car Sales, Inc. (formerly known
as Team Car Sales, Inc.), as a Member
By
---------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON, as
Administrative Agent
By
---------------------------------------
Name:
Title:
By
---------------------------------------
Name:
Title:
-7-
219
ANNEX I
to First Amendment to
Subsidiary Security Agreement
SUPPLEMENT TO SUBSIDIARY SECURITY AGREEMENT
This SUPPLEMENT NO. ___, dated as of ___________ __, ____ (this
"Supplement"), to the Subsidiary Security Agreement, dated as of April 29, 1997
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Security Agreement"), among the initial signatories thereto and
each other Person which from time to time thereafter became a party thereto
pursuant to Section 7.8 thereof (each, individually, a "Grantor", and,
collectively, the "Grantors"), in favor of the Administrative Agent (as defined
below) for the benefit of the Secured Parties (such and other capitalized terms
being used herein with the meanings provided, or incorporated by reference, in
the Security Agreement), is made by the undersigned.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement, dated as of April
29, 1997 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Credit Agreement") among Budget Rent A Car Corporation,
a Delaware corporation (the "Borrower"), Budget Group, Inc. (formerly known as
Team Rental Group, Inc.), a Delaware corporation (the "Parent"), the various
financial institutions parties thereto (collectively, the "Lenders"),
Nationsbanc Capital Markets, Inc., ("NationsBanc"), as a co-syndication agent
(in such capacity, a "Co-Syndication Agent") for the Lenders and as the
documentation agent (in such capacity, the "Documentation Agent") for the
Lenders, and Credit Suisse First Boston, as a co-syndication agent (in such
capacity, a "Co-Syndication Agent" and, together with NationsBanc, collectively,
the "Co-Syndication Agents") for the Lenders, as administrative agent (in such
capacity, the "Administrative Agent", and together with, the Co-Syndication
Agents and the Documentation Agent, the "Agents") for the Lenders and as the
arranger, the Lenders and the Issuer have extended Commitments to make, and have
made, Credit Extensions to the Borrower;
WHEREAS, as a condition precedent to the continued making and
maintenance of the Credit Extensions under the Credit Agreement, the undersigned
is required to execute and deliver this Supplement;
WHEREAS, the undersigned has duly authorized the execution, delivery
and performance of this Supplement and the Security Agreement;
220
WHEREAS, the Security Agreement provides that additional parties may
become Grantors under the Security Agreement by execution and delivery of an
instrument in the form of this Supplement;
WHEREAS, pursuant to the provisions of Section 7.8 of the Security
Agreement, the undersigned is becoming a Grantor under the Security Agreement;
and
WHEREAS, the undersigned desires to become a Grantor under the Security
Agreement in order to induce the Secured Parties to continue to make and
maintain Credit Extensions under the Credit Agreement as consideration therefor;
NOW, THEREFORE, the undersigned agrees, for the benefit of each Secured
Party, as follows:
SECTION 1. In accordance with the Security Agreement, the undersigned
by its signature below becomes a Grantor under the Security Agreement with the
same force and effect as if it were an original signatory thereto as a Grantor
and the undersigned hereby:
(a) agrees to all the terms and provisions of the Security
Agreement applicable to it as a Grantor thereunder;
(b) assigns and pledges to the Administrative Agent for its
benefit and the ratable benefit of each of the Secured Parties, and
hereby grants to the Administrative Agent for its benefit and the
ratable benefit of each of the Secured Parties, a security interest in
all of the following, whether now or hereafter existing or acquired by
the undersigned (the "Collateral"):
(i) all Subject Assets and Related Contracts of the
undersigned;
(ii) all Deposit Accounts of such Grantor and all
cash, checks, drafts, notes, bills of exchange, money orders,
and other like instruments, if any, now owned or hereafter
acquired, held therein (or in sub-accounts thereof) and all
certificates and instruments, if any, from time to time
representing or evidencing such investments, and all interest,
earnings and proceeds in respect thereof;
(iii) all certificates of deposit, securities, and
other investments, if any, now owned or hereafter acquired, of
the Grantor and all certificates and instruments, if any;
(iv) all books, records, writings, data bases,
information and other property relating to, used or useful in
connection with, evidencing, embodying, incorporating or
referring to, any of the foregoing in this clause (b); and
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221
(v) all products, offspring, rents, issues, profits,
returns, income and proceeds of and from any and all of the
foregoing Collateral (including proceeds which constitute
property of the types described in subclauses (i) through
(iv), proceeds deposited from time to time in any Deposit
Account of such Grantor, and to the extent not otherwise
included, all payments under insurance (whether or not the
Administrative Agent is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing
Collateral);
(c) agrees that the Schedule attached hereto shall be deemed
to be a Schedule thereto; and
(d) represents and warrants that the representations and
warranties made by it as a Grantor thereunder are true and correct on
and as of the date hereof.
In furtherance of the foregoing, each reference to a "Grantor" in the
Security Agreement shall be deemed to include the undersigned.
SECTION 2. The undersigned hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by the undersigned
and constitutes a legal, valid and binding obligation of the undersigned,
enforceable against it in accordance with its terms.
SECTION 3. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect in accordance with its terms.
SECTION 4. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired.
SECTION 5. Without limiting the provisions of the Credit Agreement (or
any other Loan Document, including the Security Agreement), the undersigned
agrees to reimburse the Administrative Agent for its reasonable out-of-pocket
expenses in connection with this Supplement, including reasonable attorneys'
fees and expenses of the Administrative Agent.
SECTION 6. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THIS SUPPLEMENT, THE SECURITY
AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG
THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND
SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
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222
SECTION 7. This Supplement hereby incorporates by reference the
provisions of the Security Agreement, which provisions are deemed to be a part
hereof, and this Supplement shall be deemed to be a part of the Security
Agreement.
SECTION 8. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
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223
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
[NAME OF ADDITIONAL GRANTOR]
By
---------------------------------------
Name:
Title:
ACKNOWLEDGED AND ACCEPTED BY:
CREDIT SUISSE FIRST BOSTON, as
Administrative Agent
By
-------------------------------
Name:
Title:
By
-------------------------------
Name:
Title:
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224
SCHEDULE I
to Supplement No. __
Subsidiary Security Agreement
([NAME OF ADDITIONAL GRANTOR])
Item A. Location of Deposit Accounts
Contact
Bank Name and Address Account Number Person
--------------------- -------------- ------
1.
2.
3.
Item B. Place(s) of Business and Chief Executive Office
Item C. Trade Names
Item D. Merger or Other Corporate Reorganization
Item E. Government Contracts
225
ANNEX III
to Second Amendment to
Credit Agreement
SUPPLEMENT TO PARENT PLEDGE AGREEMENT
This SUPPLEMENT NO. 1, dated as of January 28, 1998 (this
"Supplement"), to the Parent Pledge Agreement, dated as of April 29, 1997 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Pledge Agreement"), made by Budget Group, Inc. (formerly known as
Team Rental Group, Inc.), a Delaware corporation (the "Parent"), in favor of the
Administrative Agent (as defined below) for the benefit of the Secured Parties
(such and other capitalized terms being used herein with the meanings provided,
or incorporated by reference, in the Pledge Agreement), is made by the Parent.
W I T N E S S E T H:
WHEREAS, Budget Rent A Car Corporation, a Delaware corporation (the
"Borrower"),Budget Group, Inc. (formerly known as Team Rental Group, Inc.), a
Delaware corporation (the "Parent"), the various financial institutions parties
thereto (collectively, the "Lenders"), Nationsbanc Capital Markets, Inc.,
("NationsBanc"), as a co-syndication agent (in such capacity, a "Co-Syndication
Agent") for the Lenders and as the documentation agent (in such capacity, the
"Documentation Agent") for the Lenders, and Credit Suisse First Boston, as a
co-syndication agent (in such capacity, a "Co-Syndication Agent" and, together
with NationsBanc, collectively, the "Co-Syndication Agents") for the Lenders, as
administrative agent (in such capacity, the "Administrative Agent", and together
with, the Co-Syndication Agents and the Documentation Agent, the "Agents") for
the Lenders and as the arranger have heretofore entered into that certain Second
Amendment to Credit Agreement, dated as of the date hereof (the "Second
Amendment to Credit Agreement"), which amends that certain Credit Agreement,
dated as of April 29, 1997 (as amended by the First Amendment to Credit
Agreement, dated as of October 24, 1997, the "Credit Agreement") among such
parties; and
WHEREAS, in connection with the Second Amendment, the Parent desires to
Supplement the Attachment to the Pledge Agreement;
NOW, THEREFORE, the Parent agrees, for the benefit of each Secured
Party, as follows:
SECTION 1. In accordance with the Pledge Agreement, the Parent by its
signature desires to assign and pledge its shares of Cruise America, Inc., a
Florida corporation to the Administrative Agent for the benefit of the Secured
Parties and the Pledgor hereby:
226
(a) acknowledes and reaffirms all of the terms and provisions
of the Pledge Agreement applicable to it as a Pledgor thereunder
(including as such terms and provisions relate to its pledge and
assignment of its shares of the Borrower);
(b) not in limitation of clause (a) but in furtherance
thereof, pledges, hypothecates, assigns, charges, mortgages, delivers,
and transfers to the Administrative Agent, for its benefit and the
ratable benefit of each of the Secured Parties, and hereby grants to
the Administrative Agent, for its benefit and the ratable benefit of
the Secured Parties, a continuing security interest in, all of the
following property of the Pledgor (the "Collateral"):
(i) all issued and outstanding shares of Capital
Stock of each Pledged Share Issuer identified in Item A of
Attachment 1 hereto (as such Attachment may be further
supplemented by the Pledgor and accepted by the Administrative
Agent);
(ii) all other Pledged Shares issued from time to
time;
(iii) all promissory notes of each Pledged Note
Issuer identified in Item B of Attachment 1 hereto (as such
Attachment may be further supplemented by the Pledgor and
accepted by the Administrative Agent);
(iv) all other Pledged Notes issued from time to
time;
(v) all other Pledged Property, whether now or
hereafter delivered to the Administrative Agent in connection
with this Pledge Agreement;
(vi) all Dividends, Distributions, interest, and
other payments and rights with respect to any Pledged
Property; and
(vii) all proceeds of any of the foregoing;
(c) agrees that the Attachment attached hereto shall be deemed
to be an Attachment thereto; and
(d) represents and warrants that the representations and
warranties made by it as a Pledgor thereunder are true and correct on
and as of the date hereof.
In furtherance of the foregoing, each reference to a "Pledgor" in the
Pledge Agreement shall be deemed to include the Pledgor.
SECTION 2. The Pledgor hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by the Pledgor and
constitutes a legal, valid and binding obligation of the Pledgor, enforceable
against it in accordance with its terms.
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227
SECTION 3. Except as expressly supplemented hereby, the Pledge
Agreement shall remain in full force and effect in accordance with its terms.
SECTION 4. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge Agreement shall not in any way be affected or impaired.
SECTION 5. Without limiting the provisions of the Credit Agreement (or
any other Loan Document, including the Pledge Agreement), the Pledgor agrees to
reimburse the Administrative Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including reasonable attorneys' fees and
expenses of the Administrative Agent.
SECTION 6. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THIS SUPPLEMENT, THE PLEDGE
AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG
THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND
SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7. This Supplement hereby incorporates by reference the
provisions of the Pledge Agreement, which provisions are deemed to be a part
hereof, and this Supplement shall be deemed to be a part of the Pledge
Agreement.
SECTION 8. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the Pledgor has caused this Supplement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
BUDGET GROUP INC.
By:
--------------------------------------
Name:
Title:
ACKNOWLEDGED AND ACCEPTED BY:
CREDIT SUISSE FIRST BOSTON, as
Administrative Agent
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
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SCHEDULE I
to Supplement No. __
Parent Pledge Agreement
(Budget Group, Inc.)
Item A. Pledged Shares
Capital Stock
-------------
Authorized Outstanding % of Shares
Pledged Share Issuer Shares Shares Pledged
-------------------- ---------- ----------- -----------
Budget Rent A Car Corporation 4,250,000 2,740,000 100%
Cruise America, Inc.
Item B. Pledged Notes
Pledged Note Issuer Description
------------------- -----------
None.
Item C. Additional Subsidiaries
None.
230
ANNEX IV
to Second Amendment to
Credit Agreement
THIRD AMENDMENT
TO SUBSIDIARY PLEDGE AGREEMENT
THIS THIRD AMENDMENT TO SUBSIDIARY PLEDGE AGREEMENT, dated as of
January 28, 1998 (this "Amendment"), is made by and among each Subsidiary (as
defined in the Credit Agreement referred to below) of Budget Rent A Car
Corporation, a Delaware corporation (the "Borrower"), a signatory hereto (each a
"Pledgor" and collectively, the "Pledgors") and the Administrative Agent (as
defined below).
W I T N E S S E T H:
WHEREAS, the Borrower, Budget Group, Inc. (formerly known as Team
Rental Group, Inc.), a Delaware corporation (the "Parent"), the various
financial institutions parties thereto (collectively, the "Lenders"),
Nationsbanc Capital Markets, Inc., ("NationsBanc"), as a co-syndication agent
(in such capacity, a "Co-Syndication Agent") for the Lenders and as the
documentation agent (in such capacity, the "Documentation Agent") for the
Lenders, and Credit Suisse First Boston, as a co-syndication agent (in such
capacity, a "Co-Syndication Agent" and, together with NationsBanc, collectively,
the "Co-Syndication Agents") for the Lenders, as administrative agent (in such
capacity, the "Administrative Agent", and together with, the Co-Syndication
Agents and the Documentation Agent, the "Agents") for the Lenders and as the
arranger have heretofore entered into that certain Second Amendment to Credit
Agreement, dated as of the date hereof (the "Second Amendment to Credit
Agreement"), which amends that certain Credit Agreement, dated as of April 29,
1997 (as amended by the First Amendment to Credit Agreement, dated as of October
24, 1997, the "Credit Agreement") among such parties;
WHEREAS, the Pledgors and the Administrative Agent have heretofore
entered into that certain Subsidiary Pledge Agreement, dated as of April 29,
1997 (as amended by the First Amendment to Subsidiary Pledge Agreement, dated as
of October 24, 1997 and the Second Amendment to Subsidiary Pledge Agreement,
dated as of November 26, 1997, the "Subsidiary Pledge Agreement");
WHEREAS, the Pledgors desire to amend the Subsidiary Pledge Agreement
as set forth below; and
WHEREAS, the Administrative Agent is willing, on and subject to the
terms and conditions set forth below, to amend the Subsidiary Pledge Agreement,
in each case as provided below (the Subsidiary Pledge Agreement, as amended
pursuant to the terms of this Amendment, being referred to as the "Amended
Subsidiary Pledge Agreement");
231
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, each Pledgor and the Administrative Agent hereby
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Definitions. The following terms (whether or not
underscored) when used in this Amendment shall have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the first recital.
"Amendment" is defined in the preamble.
"Amended Subsidiary Pledge Agreement" is defined in the fourth recital.
"Borrower" is defined in the preamble.
"Credit Agreement" is defined in the first recital.
"Lenders" is defined in the first recital.
"Parent" is defined in the first recital.
"Pledgor" and "Pledgors" are defined in the preamble.
"Second Amendment to Credit Agreement" is defined in the first recital.
"Subsidiary Pledge Agreement" is defined in the second recital.
SECTION 1.2. Other Definitions. Terms for which meanings are provided
for, or incorporated by reference, in the Second Amendment to Credit Agreement
are, unless otherwise defined herein or the context otherwise requires, used in
this Amendment with such meanings.
ARTICLE II
AMENDMENTS TO SUBSIDIARY PLEDGE AGREEMENT
SECTION 2.1. Amendment to Article I of the Subsidiary Pledge Agreement.
Section 1.1 of the Subsidiary Pledge Agreement ("Defined Terms") is hereby
amended by inserting in such Section the following definition in the appropriate
alphabetical order:
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232
"Pledgor" and "Pledgors" are defined in the preamble and shall
include each other Person which may from time to time hereafter become
a party hereto pursuant to Section 7.9.
SECTION 2.2. Amendment to Article VII of the Subsidiary Pledge
Agreement. Article VII of the Subsidiary Pledge Agreement ("Miscellaneous
Provisions") is hereby amended by inserting a new Section 7.9 at the end thereof
to read in its entirety as follows:
SECTION 7.9 Additional Pledgors. Upon the execution and
delivery by any other Person of an instrument in the form of Annex I
hereto, such Person shall become a "Pledgor" hereunder with the same
force and effect as if originally named as a Pledgor herein. The
execution and delivery of any such instrument shall not require the
consent of any other Pledgor hereunder. The rights and obligations of
each Pledgor hereunder shall remain in full force and effect
notwithstanding the addition of any new Pledgor as a party to this
Pledge Agreement.
SECTION 2.3. Amendment to Attachment 1 to the Subsidiary Pledge
Agreement. Attachment 1 to the Subsidiary Pledge Agreement relating to each
Pledgor for whom a corresponding Attachment 1 is attached hereto shall be
amended in its entirety to read as set forth in such corresponding Attachment 1
hereto.
SECTION 2.4. Addition of Annex I. The Subsidiary Pledge Agreement is
hereby amended by inserting a new Annex I at the end thereof in the form of
Annex I hereto.
ARTICLE III
MISCELLANEOUS
SECTION 3.1. Full Force and Effect; Limited Amendment. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants, conditions and other provisions of the Subsidiary Pledge Agreement
shall remain unamended and unwaived and shall continue to be, and shall remain,
in full force and effect in accordance with their respective terms. The
amendments set forth herein shall be limited precisely as provided for herein to
the provisions expressly amended herein and shall not be deemed to be an
amendment to, consent to or modification of any other term or provision of the
Credit Agreement, any other Loan Document referred to therein or herein or of
any transaction or further or future action on the part of any Pledgor, the
Borrower, the Parent or any other Obligor which would require the consent of the
Lenders under the Credit Agreement or any of the other Loan Documents.
SECTION 3.2. Loan Document Pursuant to Credit Agreement. This Amendment
is a Loan Document executed pursuant to the Credit Agreement and shall be
construed, administered and applied in accordance with all of the terms and
provisions of the Credit Agreement. Any breach of any representation or warranty
or covenant or agreement contained in this Amendment
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233
shall be deemed to be an Event of Default for all purposes of the Credit
Agreement and the other Loan Documents.
SECTION 3.3. Further Assurances. Each Pledgor agrees that it will take
any action that from time to time may be reasonably necessary to effectuate the
amendments contemplated herein.
SECTION 3.4. Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or interpretation
of this Amendment or any provisions hereof.
SECTION 3.5. Execution in Counterparts. This Amendment may be executed
by the parties hereto in several counterparts, each of which shall be deemed to
be an original and all of which shall constitute together but one and the same
agreement.
SECTION 3.6. Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SECTION 3.7. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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234
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers or general partners (or their respective
officers) thereunto duly authorized as of the day and year first above written.
BUDGET RENT-A-CAR SYSTEMS, INC.
NYRAC, INC.
BUDGET RENT-A-CAR
INTERNATIONAL, INC.
CONTROL RISK CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇ INSURANCE AGENCY,
INC.
RESERVATION SERVICES, INC.
BRAC CREDIT CORPORATION
AUTOMATED TRANSPORTATION, INC.
▇▇▇▇▇▇▇ CAR SALES, INC.
BUDGET SALES CORPORATION
By
----------------------------------------
Name:
Title:
▇▇▇-AL, INC.
WESTEAM ENTERPRISES, INC.
TEAM CAR SALES OF SAN DIEGO,
INC.
VAN POOL SERVICES, INC.
By
----------------------------------------
Name:
Title:
TEAM REALTY SERVICES, INC.
By
----------------------------------------
Name:
Title:
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235
DAYTON AUTO LEASE COMPANY,
INC.
By
----------------------------------------
Name:
Title:
TEAM FLEET SERVICES
CORPORATION
By
----------------------------------------
Name:
Title:
TEAM CAR SALES OF CHARLOTTE,
INC.
TEAM CAR SALES OF DAYTON, INC.
TEAM CAR SALES OF RICHMOND,
INC.
BUDGET CAR SALES, INC. (formerly
known as Team Car Sales, Inc.)
VALCAR RENTAL CAR SALES, INC.
TEAM CAR SALES OF PHILADELPHIA,
INC.
By
----------------------------------------
Name:
Title:
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236
TEAM CAR SALES OF SOUTHERN
CALIFORNIA, INC.
By
----------------------------------------
Name:
Title:
IN MOTORS VI, LLC
By ValCar Rental Car Sales, Inc., as a
Member
By
----------------------------------------
Name:
Title:
TCS PROPERTIES, LLC
By Budget Car Sales, Inc. (formerly known
as Team Car Sales, Inc.), as a Member
By
----------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON, as
Administrative Agent
By
----------------------------------------
Name:
Title:
By
----------------------------------------
Name:
Title:
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237
ANNEX I
to Third Amendment to
Subsidiary Pledge Agreement
SUPPLEMENT TO SUBSIDIARY PLEDGE AGREEMENT
This SUPPLEMENT NO. ___, dated as of ___________ __, ____ (this
"Supplement"), to the Subsidiary Pledge Agreement, dated as of April 29, 1997
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Pledge Agreement"), among the initial signatories thereto and each
other Person which from time to time thereafter became a party thereto pursuant
to Section 7.9 thereof (each, individually, a "Pledgor", and, collectively, the
"Pledgors"), in favor of the Administrative Agent (as defined below) for the
benefit of the Secured Parties (such and other capitalized terms being used
herein with the meanings provided, or incorporated by reference, in the Pledge
Agreement), is made by the undersigned.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement, dated as of April
29, 1997 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Credit Agreement") among Budget Rent A Car Corporation,
a Delaware corporation (the "Borrower"), Budget Group, Inc. (formerly known as
Team Rental Group, Inc.), a Delaware corporation (the "Parent"), the various
financial institutions parties thereto (collectively, the "Lenders"),
Nationsbanc Capital Markets, Inc., ("NationsBanc"), as a co-syndication agent
(in such capacity, a "Co-Syndication Agent") for the Lenders and as the
documentation agent (in such capacity, the "Documentation Agent") for the
Lenders, and Credit Suisse First Boston, as a co-syndication agent (in such
capacity, a "Co-Syndication Agent" and, together with NationsBanc, collectively,
the "Co-Syndication Agents") for the Lenders, as administrative agent (in such
capacity, the "Administrative Agent", and together with, the Co-Syndication
Agents and the Documentation Agent, the "Agents") for the Lenders and as the
arranger, the Lenders and the Issuer have extended Commitments to make, and have
made, Credit Extensions to the Borrower;
WHEREAS, as a condition precedent to the continued making and
maintenance of the Credit Extensions under the Credit Agreement, the undersigned
is required to execute and deliver this Supplement;
WHEREAS, the undersigned has duly authorized the execution, delivery
and performance of this Supplement and the Pledge Agreement;
WHEREAS, the Pledge Agreement provides that additional parties may
become Pledgors under the Pledge Agreement by execution and delivery of an
instrument in the form of this Supplement;
238
WHEREAS, pursuant to the provisions of Section 7.9 of the Pledge
Agreement, the undersigned is becoming a Pledgor under the Pledge Agreement; and
WHEREAS, the undersigned desires to become a Pledgor under the Pledge
Agreement in order to induce the Secured Parties to continue to make and
maintain Credit Extensions under the Credit Agreement as consideration therefor;
NOW, THEREFORE, the undersigned agrees, for the benefit of each Secured
Party, as follows:
SECTION 1. In accordance with the Pledge Agreement, the undersigned by
its signature below becomes a Pledgor under the Pledge Agreement with the same
force and effect as if it were an original signatory thereto as a Pledgor and
the undersigned hereby:
(a) agrees to all the terms and provisions of the Pledge
Agreement applicable to it as a Pledgor thereunder;
(b) pledges, hypothecates, assigns, charges, mortgages,
delivers, and transfers to the Administrative Agent, for its benefit
and the ratable benefit of each of the Secured Parties, and hereby
grants to the Administrative Agent, for its benefit and the ratable
benefit of the Secured Parties, a continuing security interest in, all
of the following property of the undersigned (the "Collateral"):
(i) all issued and outstanding shares of Capital
Stock of each Pledged Share Issuer identified in Item A of
Attachment 1 hereto (as such Attachment may be further
supplemented by the undersigned and accepted by the
Administrative Agent);
(ii) all other Pledged Shares issued from time to
time;
(iii) all promissory notes of each Pledged Note
Issuer identified in Item B of Attachment 1 hereto (as such
Attachment may be further supplemented by the undersigned and
accepted by the Administrative Agent);
(iv) all other Pledged Notes issued from time to
time;
(v) all other Pledged Property, whether now or
hereafter delivered to the Administrative Agent in connection
with this Pledge Agreement;
(vi) all Dividends, Distributions, interest, and
other payments and rights with respect to any Pledged
Property; and
(vii) all proceeds of any of the foregoing;
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239
(c) agrees that the Attachment attached hereto shall be deemed
to be an Attachment thereto; and
(d) represents and warrants that the representations and
warranties made by it as a Pledgor thereunder are true and correct on
and as of the date hereof.
In furtherance of the foregoing, each reference to a "Pledgor" in the
Pledge Agreement shall be deemed to include the undersigned.
SECTION 2. The undersigned hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by the undersigned
and constitutes a legal, valid and binding obligation of the undersigned,
enforceable against it in accordance with its terms.
SECTION 3. Except as expressly supplemented hereby, the Pledge
Agreement shall remain in full force and effect in accordance with its terms.
SECTION 4. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge Agreement shall not in any way be affected or impaired.
SECTION 5. Without limiting the provisions of the Credit Agreement (or
any other Loan Document, including the Pledge Agreement), the undersigned agrees
to reimburse the Administrative Agent for its reasonable out-of-pocket expenses
in connection with this Supplement, including reasonable attorneys' fees and
expenses of the Administrative Agent.
SECTION 6. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THIS SUPPLEMENT, THE PLEDGE
AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG
THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND
SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7. This Supplement hereby incorporates by reference the
provisions of the Pledge Agreement, which provisions are deemed to be a part
hereof, and this Supplement shall be deemed to be a part of the Pledge
Agreement.
SECTION 8. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
[NAME OF ADDITIONAL PLEDGOR]
By:
----------------------------------------
Name:
Title:
ACKNOWLEDGED AND ACCEPTED BY:
CREDIT SUISSE FIRST BOSTON, as
Administrative Agent
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
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SCHEDULE I
to Supplement No. __
Subsidiary Pledge Agreement
([NAME OF ADDITIONAL PLEDGOR])
Item A. Pledged Shares
Capital Stock
-------------
Authorized Outstanding % of Shares
Pledged Share Issuer Shares Shares Pledged
-------------------- ---------- ----------- -----------
Item B. Pledged Notes
Pledged Note Issuer Description
------------------- -----------
Item C. Additional Subsidiaries
242
AMENDMENT NO. 3
TO CREDIT AGREEMENT
THIS AMENDMENT NO. 3 TO CREDIT AGREEMENT, dated as of March 13, 1998
(this "Amendment"), is made by and among BUDGET RENT A CAR CORPORATION, a
Delaware corporation (the "Borrower"), BUDGET GROUP, INC., a Delaware
corporation (the "Parent"), the Lenders (as defined below) parties hereto and
the Administrative Agent (as defined below).
W I T N E S S E T H:
WHEREAS, the Borrower, the Parent, the various financial institutions
parties thereto (collectively, the "Lenders"), Credit Suisse First Boston, as a
co-syndication agent (in such capacity, a "Co-Syndication Agent") for the
Lenders ("CSFB"), as administrative agent (in such capacity, the "Administrative
Agent") for the Lenders and as the arranger, and Nationsbanc Capital Markets,
Inc., ("NationsBanc"), as a co-syndication agent (in such capacity, a
"Co-Syndication Agent" and, together with CSFB, collectively, the
"Co-Syndication Agents") for the Lenders and as the documentation agent (in such
capacity, the "Documentation Agent", and, together with the Co-Syndication
Agents and the Administrative Agent, the "Agents") for the Lenders, have
heretofore entered into that certain Credit Agreement, dated as of April 29,
1997 (as amended by the First Amendment to Credit Agreement, dated as of October
24, 1997, and Amendment and Waiver No. 2 to Credit Agreement, dated as of
January 28, 1998, the "Credit Agreement");
WHEREAS, the Borrower has requested that the Lenders and the
Administrative Agent amend the Credit Agreement, on the terms and subject to the
conditions hereof, in order to provide, among other things, the specific
provisions pursuant to which the Borrower may pledge Eligible Repurchase
Vehicles and Eligible Non-Repurchase Vehicles as collateral under the Credit
Agreement; and
WHEREAS, the Lenders and the Administrative Agent are willing, on the
terms and subject to the conditions set forth below, to amend the Credit
Agreement as provided below (the Credit Agreement, as amended pursuant to the
terms of this Amendment, being referred to as the "Amended Credit Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Borrower, the Parent, the Lenders and the
Administrative Agent hereby agree as follows:
243
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Definitions. The following terms (whether or not
underscored) when used in this Amendment shall have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the first recital.
"Agents" is defined in the first recital.
"Amended Credit Agreement" is defined in the third recital.
"Amendment" is defined in the preamble.
"Amendment Effective Date Certificate" means the certificate executed
and delivered by the Borrower and the Parent pursuant to Section 3.6,
substantially in the form of Annex I hereto.
"Borrower" is defined in the preamble.
"Consent" means a consent under the Letter of Credit Reimbursement
Agreement substantially in the form attached hereto as Exhibit A.
"Credit Agreement" is defined in the first recital.
"Lenders" is defined in the first recital.
"Letter of Credit Reimbursement Agreement" means the Letter of Credit
Reimbursement Agreement dated as of April 29, 1997, among Budget Funding
Corporation, Budget Systems, certain subsidiaries, affiliates and non-affiliates
of Budget Group, Inc., TFFC, the Borrower and Credit Suisse First Boston, as
credit enhancer, as heretofore or hereafter amended or otherwise modified in
accordance with its terms.
"Parent" is defined in the preamble.
"Third Amendment Effective Date" is defined in Section 3.1.
SECTION 1.2. Other Definitions. Terms for which meanings are provided
in the Amended Credit Agreement are, unless otherwise defined herein or the
context otherwise requires, used in this Amendment with such meanings.
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ARTICLE II
AMENDMENTS
Effective on (and subject to the occurrence of) the Third Amendment
Effective Date, certain provisions of the Credit Agreement are hereby amended in
accordance with this Article II; except expressly as so amended by this
Amendment, the Credit Agreement shall continue in full force and effect in
accordance with its terms.
SECTION 2.1. Amendments to Section 1.1 of the Credit Agreement. Section
1.1 of the Credit Agreement ("Defined Terms") is amended in accordance with
Sections 2.1.1 and 2.1.2.
SECTION 2.1.1. Section 1.1 of the Credit Agreement is amended by
inserting in such Section the following definitions in the appropriate
alphabetical order:
"Amended Borrower Security Agreement" means the Amended and Restated
Borrower Security Agreement dated as of March 13, 1998 by the Borrower in favor
of the Administrative Agent.
"Capitalized Cost" of a Pledged Vehicle means the costs and expenses
incurred by the Borrower in connection with the acquisition of such Pledged
Vehicle as established by the invoice delivered in connection with such Pledged
Vehicle.
"Collateral Agency Agreement" means the Collateral Agency Agreement,
dated as of March 13, 1998 among the Borrower, as grantor, TFFC, as nominee
titleholder, the Collateral Agent, not in its individual capacity but solely as
collateral agent for the Administrative Agent, and the Administrative Agent
under the Credit Agreement, substantially in the form attached to the Third
Amendment as Exhibit B, as heretofore or hereafter amended or otherwise modified
in accordance with its terms.
"Collateral Agent" means Bankers Trust Company, in its capacity as
collateral agent under the Collateral Agency Agreement, and its successors
thereunder.
"Depreciation Charges" means, (a) with respect to any Pledged Vehicle
that is an Eligible Repurchase Vehicle, the scheduled monthly depreciation
charge set forth by the Manufacturer in its Repurchase Program for such Pledged
Vehicle calculated on a daily basis and (b) with respect to any Pledged Vehicle
that is a Non-Repurchase Vehicle, the monthly depreciation charge set forth in
the related Depreciation Schedule. If such charge is expressed as a percentage,
the Depreciation Charges for such Pledged Vehicle shall be such percentage
multiplied by the Capitalized Cost for such Vehicle, calculated on a daily
basis. For any Pledged Vehicle not held for a full Related Month in the month of
acquisition or disposition, the Depreciation Charges shall be prorated by
multiplying the otherwise applicable Depreciation Charges by a fraction, the
numerator of which is the number of days from the date depreciation commences
(in accordance with the applicable Repurchase Program, if such Pledged Vehicle
is an Eligible Repurchase
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Vehicle) with respect to such Pledged Vehicle to the first day of the
next month and the denominator of which is the number of days in such month. For
the month in which an Eligible Repurchase Vehicle is turned back to the
applicable Manufacturer, the Depreciation Charges shall be prorated by
multiplying the otherwise applicable Depreciation Charges by a fraction, the
numerator of which is the number of days from the first day of such month to the
Turnback Date for such Pledged Vehicle and the denominator of which is the
number of days in such month. In the event a Pledged Vehicle is sold to a third
party, the Depreciation Charges shall be prorated by multiplying the otherwise
applicable Depreciation Charges by a fraction, the numerator of which is the
number of days from the first day of such month to the date proceeds were
received on the sale of such Pledged Vehicle and the denominator of which is the
number of days in such month.
"Depreciation Schedule" means, with respect to a Non-Repurchase
Vehicle, a schedule of estimated monthly depreciation prepared by the Servicer
in accordance with GAAP and revised from time to time in the Servicer's sole
discretion.
"Determination Date" means the second Business Day prior to each
Reference Date.
"Eligible Manufacturer" means any of the following: Chrysler
Corporation, Ford Motor Company/Jaguar, General Motors Corporation, Mazda Motors
of America, Inc., Nissan Motors Corporation in U.S.A., Inc., Toyota Motor Sales,
U.S.A., Inc., Volkswagen of America, Honda Motor Company, Hyundai Motor Company
Ltd., Subaru of America, SAAB Automobile, Navistar International, and Isuzu
Motors Ltd.; provided that no Manufacturer will be deemed an Eligible
Manufacturer if a Manufacturer Event of Default has occurred and is continuing
with respect to such Manufacturer.
"Eligible Repurchase Program" means a repurchase program or guaranteed
depreciation program (a) of an Eligible Manufacturer, (b) pursuant to which the
repurchase price (or the price guaranteed to be received at auction) is at least
equal to the Capitalized Cost of each vehicle, minus all Depreciation Charges
accrued with respect to such vehicle prior to the date that the vehicle is
submitted for repurchase or auction, minus Excess Mileage Charges, Excess Damage
Charges and any other charges specified in such program, (c) that cannot be
amended or terminated with respect to any vehicle after the purchase of that
vehicle, (d) with respect to which a Manufacturer Event of Default has not
occurred which is continuing, (e) the terms of which are otherwise acceptable to
the Administrative Agent, and (f) the benefits of which have been collaterally
assigned to the Collateral Agent by an agreement acknowledged in writing by the
related Manufacturer and TFFC and the Collateral Agent have been provided with
an opinion of counsel or, if agreed by the Administrative Agent, a certificate
of an officer of the Manufacturer, in form and substance reasonably satisfactory
to such parties, that TFFC and the Collateral Agent can enforce the applicable
Manufacturer's obligations thereunder.
"Excess Damage Charges" means, with respect to any Repurchase Vehicle,
the amount charged to the Borrower or the Nominee, or deducted from the
Repurchase Price (as defined in the Amended Borrower Security Agreement), by the
Manufacturer of such Repurchase Vehicle
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due to damage over a prescribed limit to the Repurchase Vehicle at the time that
the Repurchase Vehicle is turned in to such Manufacturer or its agent for
repurchase pursuant to the applicable Repurchase Program.
"Excess Mileage Charges" means, with respect to any Repurchase Vehicle,
the amount charged to the Grantor or the Nominee, or deducted from the
Repurchase Price, by the Manufacturer of such Repurchase Vehicle due to the fact
that such Vehicle has mileage over a prescribed limit at the time that such
Vehicle is turned in to such Manufacturer or its agent for repurchase pursuant
to the applicable Repurchase Program.
"Fair Market Value" means with respect to a Pledged Vehicle that is a
Non-Repurchase Vehicle on any date of determination, the market value of such
Pledged Vehicle as specified in the most recently published NADA Guide for the
model class and model year of such Pledged Vehicle based on the average
equipment and the average mileage of each Non-Repurchase Vehicle of such model
class and model year then currently pledged under the Credit Agreement. If such
Non-Repurchase Vehicle is not listed in the most recently published NADA Guide,
then the Black Book Official Finance/Lease Guide (the "Lease Guide") shall be
used to estimate the wholesale price of the Non-Repurchase Vehicle, based on the
Non-Repurchase Vehicle's model class and model year for which the wholesale
price of such vehicle is not so published in the NADA Guide; provided, however,
that if the Lease Guide is unavailable, the Fair Market Value of such
Non-Repurchase Vehicle shall be based on an independent third-party data source
approved by the Supermajority Lenders based on the average mileage of each
Non-Repurchase Vehicle of such model class and model year then pledged under the
Credit Agreement or based upon such other methodology approved by the
Supermajority Lenders.
"Independent Accountant's Report" means the report of a firm of
nationally recognized independent public accountants (who may also render other
services to the Servicer) to the effect that they have performed certain agreed
upon procedures with respect to (a) 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 of disposition proceeds with the
corresponding amounts set forth in the Monthly Reports prepared by the Borrower
and the Servicer, (b) the calculation of the Net Book Value of all Pledged
Vehicles and the Non-Repurchase Value of all Non-Repurchase Vehicles for the
Related Month and compared such amounts with the corresponding amounts set forth
in the Monthly Reports, 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 do not believe to be material and such other exceptions
as shall be set forth in such report and acceptable to the Administrative Agent.
"Manufacturer" means a manufacturer of Pledged Vehicles.
"Manufacturer Event of Default" means, with respect to any
Manufacturer, (a) the failure of such Manufacturer to pay any amount when due
pursuant to the related Repurchase Program with respect to a Pledged Vehicle
turned in to such Manufacturer or delivered to an authorized
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auction site pursuant to the related Repurchase Program; provided, however, that
such failure continues for more than sixty (60) days following the Turnback Date
such that the aggregate of any such amounts not paid for more than sixty (60)
days are in the aggregate in excess of $3,500,000 net of amounts that are the
subject of a good faith dispute as evidenced in writing by either the Borrower
or the Manufacturer questioning the accuracy of the amounts paid or payable in
respect of certain Pledged Vehicles tendered for repurchase, or delivered to an
authorized auction site, under a Repurchase Program, (b) the termination of such
Manufacturer's Repurchase Program, (c) the occurrence of an event described in
any of clauses (a) through (e) of Section 9.1.9 with respect to such
Manufacturer, (d) such Manufacturer is no longer an Eligible Manufacturer or (e)
the Repurchase Program of a Manufacturer shall no longer be an Eligible
Repurchase Program.
"Monthly Report" means a report specifying (a) the vehicle
identification numbers for all Pledged Vehicles pledged under the Credit
Agreement during the Related Month, (b) the Net Book Value of all Eligible
Repurchase Vehicles as of the end of the Related Month, (c) the Non-Repurchase
Value of all Eligible Non-Repurchase Vehicles as of the end of the Related
Month, (d) the vehicle identification numbers for all Eligible Repurchase
Vehicles that have been turned back to the Manufacturer for repurchase or
auction during the Related Month and the repurchase prices therefor, (e) the
vehicle identification numbers and Net Book Value or Non-Repurchase Value, as
applicable, of all Pledged Vehicles that became casualties during the Related
Month, (f) the aggregate disposition proceeds received in respect of Pledged
Vehicles during the Related Month and (g) the aggregate Depreciation Charges
with respect to all Pledged Vehicles during the Related Month.
"Net Book Value" means, with respect to a Pledged Vehicle, (a) as of
any date of determination during the period from the Pledge Date for such
Pledged Vehicle to but excluding the Determination Date with respect to the
Related Month in which such Pledge Date occurs (such Determination Date, the
"Initial Determination Date" for such Pledged Vehicle), the Starting Net Book
Value of such Pledged Vehicle, (b) as of the Initial Determination Date for such
Pledged Vehicle, (i) the Starting Net Book Value for such Pledged Vehicle minus
(ii) the aggregate Depreciation Charges accrued with respect to such Pledged
Vehicle through the last day of the Related Month in which the Pledge Date for
such Pledged Vehicle occurred, (c) as of any Determination Date after the
Initial Determination Date, (i) the Net Book Value of such Pledged Vehicle as
calculated on the immediately preceding Determination Date minus (ii) the
aggregate Depreciation Charges accrued with respect to such Pledged Vehicle
during the Related Month (through the last day thereof). After the Initial
Determination Date, on any day which is not a Determination Date, the Net Book
Value of a Pledged Vehicle shall be the Net Book Value calculated for such
Pledged Vehicle on the most recent Determination Date.
"Nominee Agreement" means a Vehicle Title Nominee Agreement dated as of
March 13, 1998 between the Borrower and TFFC or another Affiliate of the
Borrower, substantially in the form attached to the Third Amendment as Exhibit
C, as any such Vehicle Title Nominee Agreement may heretofore or hereafter be
amended or otherwise modified in accordance with its terms.
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"Non-Repurchase Value" means, with respect to any Pledged Vehicle that
is a Non-Repurchase Vehicle, the lesser of (a) the Net Book Value of such
Pledged Vehicle and (b) the Fair Market Value of such Pledged Vehicle.
"Non-Repurchase Vehicle" means a passenger automobile, van or light
duty truck that is not an Eligible Repurchase Vehicle.
"Pledge Date" means, with respect to a Pledged Vehicle, the date such
Pledged Vehicle is pledged as collateral under the Credit Agreement.
"Pledged Vehicle" has the meaning specified in the Amended Borrower
Security Agreement.
"Reference Date" means the 22nd day of each calendar month or, if such
day is not a Business Day, the next succeeding Business Day.
"Related Month" means, with respect to any date of determination, the
period from and including the 26th day of the calendar month second preceding
such date of determination to an including the 25th day of the calendar month
immediately preceding such date.
"Repurchase Program" means a program pursuant to which a Manufacturer
has agreed with the Borrower or the Nominee to repurchase or guarantee the
auction sale price of Vehicles manufactured by it or one of its Affiliates.
"Servicer" means Budget Group, Inc., a Delaware corporation, or such
other party as is appointed as Servicer under the Amended Borrower Security
Agreement, and its permitted successors as Servicer thereunder.
"Starting Net Book Value" means, with respect to any Pledged Vehicle,
an amount equal to the lesser of (a) the Capitalized Cost of such Pledged
Vehicle reduced by the aggregate Depreciation Charges accrued with respect to
such Pledged Vehicle prior to the Pledge Date for such Pledged Vehicle and (b)
the Fair Market Value of such Pledged Vehicle as of the Pledge Date for such
Pledged Vehicle.
"Third Amendment" means Amendment No. 3 to Credit Agreement, dated as
of March 13, 1998, among the Borrower, the Parent, the Lenders parties thereto
and the Administrative Agent.
"Turnback Date" means, with respect to a Pledged Vehicle that is an
Eligible Repurchase Vehicle, the date on which such Pledged Vehicle is accepted
for return by a Manufacturer or its agent pursuant to its Repurchase Program and
the Depreciation Charges with respect to such Vehicle cease to accrue pursuant
to its Repurchase Program.
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"Vehicle Borrowing Base Amount" means on any date of determination the
lesser of (a) $100,000,000 and (b) an amount equal to the sum of (i) 90% of the
Net Book Value of all Eligible Repurchase Vehicles on such date and (ii) 85% of
the Non-Repurchase Value of all Eligible Non-Repurchase Vehicles on such date.
"Vehicle Schedule" has the meaning specified in the Amended Borrower
Security Agreement.
SECTION 2.1.2. The following definitions in Section 1.1 of the Credit
Agreement are amended as follows:
(a) "Base Indenture" is amended by deleting the phrase ", subject to
such modifications thereto as may be agreed to in the Base Indenture Supplement
or by the Required Lenders".
(b) "Base Indenture Supplement" is deleted in its entirety.
(c) "Borrowing Base Amount" is amended by deleting clauses (c) and (d)
of such definition and replacing them with the following:
"(c) the Vehicle Borrowing Base Amount at such time."
(d) "Eligible Non-Repurchase Vehicle" is amended to read in its
entirety as follows:
"'Eligible Non-Repurchase Vehicle' means any Non-Repurchase
Vehicle (a) that is a Pledged Vehicle, (b) the Manufacturer of which is
an Eligible Manufacturer and (b) with respect to which (i) the
Collateral Agent is noted as the first priority lienholder on the
certificate of title therefor or (ii) the certificate of title has been
submitted to the appropriate state authorities for such notation;
provided, however, if the actions provided in clause (i) or (ii) are
not sufficient in any state to cause the lien of the Collateral Agent
upon such vehicle to be a perfected first priority lien, then in order
for a Non-Repurchase Vehicle titled in such state to be an "Eligible
Non-Repurchase Vehicle", such action as is required to cause the lien
or the Collateral Agent to be a perfected first priority lien shall
have been taken by the Borrower."
(e) "Eligible Repurchase Vehicle" is amended to read in its entirety as
follows:
"'Eligible Repurchase Vehicle' means any Pledged Vehicle (a)
which is eligible under an Eligible Repurchase Program, and (b) with
respect to which (i) the Collateral Agent is noted as the first
lienholder on the certificate of title therefor or (ii) the certificate
of title has been submitted to the appropriate state authorities for
such notation; provided, however, if the actions provided in clause (i)
or (ii) are not sufficient in any state to cause the lien of the
Collateral Agent upon such vehicle to be a perfected first priority
lien, then in order for a vehicle titled in such state to be an
"Eligible
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Repurchase Vehicle", such action as is required to cause the lien of
the Collateral Agent to be a perfected first priority lien shall have
been taken by the Borrower."
(f) "Enhancement Letters of Credit Commitment Amount" is amended by
deleting the amount "$225,000,000" and substituting therefor the amount
"$260,000,000".
(g) "Permitted Business Acquisition" is amended by adding the following
proviso at the end thereof:
"provided that the Parent may consummate any such Business Acquisition,
so long as (x) the Parent acquires all of the Capital Stock of the
Person being acquired, whether directly or pursuant to a merger between
such Person and a Wholly Owned Subsidiary of the Parent, (y) the
consideration in respect of such Business Acquisition is comprised
entirely of Capital Stock of the Parent and (z) concurrently with the
consummation of such Business Acquisition, the Capital Stock of such
Person (which Person may be the surviving entity of the merger referred
to in the preceding clause (x)) is contributed to the Borrower such
that such Person becomes a Wholly Owned Subsidiary of the Borrower
subject to the terms of the Credit Agreement, including Section 8.1.9".
(h) "Vehicle Debt" is amended by deleting the phrase "other than any
such Vehicle financed hereunder pursuant to the Base Indenture Supplement;"
appearing therein and replacing it with the following: "other than any Pledged
Vehicle financed hereunder;".
SECTION 2.2. Amendment to Section 8.1.1. Section 8.1.1 of the Credit
Agreement ("Financial Information, Reports, Notices, etc.") is amended by:
(a) deleting clause (f) thereof in its entirety and replacing it with
the following:
"(f) (i) within 12 Business Days following the last day of each
calendar month, (x) a Borrowing Base Certificate for the preceding
calendar month that is calculated as of the last day of such preceding
calendar month, certified by the chief financial or accounting
Authorized Officer of the Borrower or the Parent and (y) the Monthly
Report (with a copy to the Collateral Agent) and (ii) as soon as
possible following the presentment for payment under any Enhancement
Letter of Credit, a Borrowing Base Certificate for the date of such
presentment that is calculated as of the last day of the calendar month
immediately preceding the month in which such presentment is made, in
the case of the calculation of clauses (a) and (c) of the definition of
"Borrowing Base Amount", and as of the date of such presentment (after
giving effect to any reimbursement made in connection therewith), in
the case of the calculation of clause (b) of the definition of
"Borrowing Base Amount", certified by the chief financial or accounting
Authorized Officer of the Borrower or the Parent;"
(b) deleting the word "and" at the end of clause (k) thereof;
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(c) redesignating clause (l) thereof as clause (m); and
(d) adding the following new clause (l):
"(l) on or before the second Determination Date immediately
following March 31, June 30, September 30 and December 31 of each year,
an Independent Accountant's Report (with a copy to the Collateral
Agent); and"
SECTION 2.3. Amendment to Section 8.2.9. Section 8.2.9 of the Credit
Agreement ("Consolidation, Merger, etc.") is amended by deleting the reference
to "Borrower" in clause (b) thereof and substituting therefor a reference to
"Parent".
SECTION 2.4. Amendment to Section 8.2.17. Section 8.2.17 of the Credit
Agreement ("Activities of the Parent") is amended by (a) adding the phrase ",
the consummation of Permitted Business Acquisitions" in the first sentence
thereof after the word "Borrower" and (b) deleting the word "equity" in clause
(d)(ii) of the second sentence thereof.
SECTION 2.5. Amendment to Exhibit E to the Credit Agreements. Exhibit E
to the Credit Agreement ("Form of Borrowing Base Certificate") shall be deemed
to have been amended in a manner consistent with the amendments set forth in
this Article II, and, in preparing the Compliance Certificate, the Parent shall
make such changes (which shall be subject to the approval of the Administrative
Agent) to such Exhibit E as may be necessary to give effect to such amendments.
ARTICLE III
CONDITIONS TO EFFECTIVENESS
SECTION 3.1. Third Amendment Effective Date. This Amendment, and the
amendments and modifications contained herein, shall be and become effective on
the date (the "Third Amendment Effective Date") when each of the conditions set
forth in this Article III shall have been fulfilled to the satisfaction of the
Administrative Agent.
SECTION 3.2. Execution of Counterparts. The Administrative Agent shall
have received counterparts of this Amendment, duly executed and delivered by the
Borrower, the Parent, the Servicer and the Supermajority Lenders; provided that
the amendment set forth in clause (f) of Section 2.1.2 with respect to the
Enhancement Letters of Credit Commitment Amount shall not become effective
unless the Administrative Agent shall have received counterparts of this
Amendment duly executed and delivered by each of the Lenders.
SECTION 3.3. Resolutions, etc. The Administrative Agent shall have
received from the Borrower and the Parent a certificate, dated the Third
Amendment Effective Date, of the Secretary or Assistant Secretary of such Person
as to
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(a) resolutions of its Board of Directors then in full force
and effect authorizing the execution, delivery and performance of this
Amendment, the Amended Borrower Security Agreement, the Collateral
Agency Agreement and each other Loan Document to be executed by it;
(b) the incumbency and signatures of those of its officers
authorized to act with respect to this Amendment, the Amended Borrower
Security Agreement, the Collateral Agency Agreement and each other Loan
Document to be executed by it; and
(c) the full force and validity of each Organic Document of
such Person and true and complete copies thereof,
upon which certificate each Lender, each Issuer and each Agent may conclusively
rely until it shall have received a further certificate of the Secretary of such
Person canceling or amending such prior certificate.
SECTION 3.4. Consents, etc. The Administrative Agent shall have
received true and correct copies of all governmental and third party approvals
and consents necessary or advisable in connection with this Amendment and each
other document to be delivered in connection with this Amendment.
SECTION 3.5. No Material Adverse Change. There shall not have occurred
a material adverse change in the business, property, operations, assets,
liabilities, condition (financial or otherwise) or prospects of the Parent and
its Subsidiaries, taken as a whole, or the Borrower and its Subsidiaries, taken
as a whole, since December 31, 1996.
SECTION 3.6. Amendment Effective Date Certificate. The Administrative
Agent shall have received, with counterparts for each Lender, the Amendment
Effective Date Certificate, dated the Third Amendment Effective Date and duly
executed and delivered by an Authorized Officer of each of the Borrower and
Parent, in which certificate each of the Borrower and Parent shall agree and
acknowledge that the statements made therein shall be deemed to be true and
correct representations and warranties of each of the Borrower and Parent made
as of such date, and, at the time each such certificate is delivered, such
statements shall in fact be true and correct.
SECTION 3.7. Financing Statements. The Borrower shall have filed an
executed, proper financing statement on Form UCC-1 naming the Borrower as debtor
and the Administrative Agent as secured party for filing with the Illinois
Secretary of State, or other similar instruments or documents as may be
necessary or, in the reasonable opinion of the Administrative Agent or the
Collateral Agent, desirable under the UCC of all applicable jurisdictions to
perfect the interest of the Collateral Agent in the Collateral (as defined in
the Borrower Security Agreement) as agent for the Administrative Agent (on
behalf of the Lenders).
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SECTION 3.8. Other Agreements. The Administrative Agent shall have
received executed copies of each of the following documents and all conditions
to the effectiveness of each such agreement or document shall have been
satisfied in all respects:
(i) the Collateral Agency Agreement;
(ii) the Amended Borrower Security Agreement;
(iii) the Nominee Agreement;
(iv) the Consent; and
(v) such other documents as the Administrative Agent or the
Collateral Agent may reasonably request.
SECTION 3.9. No Event of Default. No Event of Default or Default shall
have occurred and be continuing on such date or would result from the entry into
this Amendment.
SECTION 3.10. Opinions of Counsel. The Administrative Agent shall have
received opinions, dated the Third Amendment Effective Date and addressed to the
Administrative Agent and the Lenders, from counsel to the Obligors, in form and
substance satisfactory to the Administrative Agent.
SECTION 3.11. Fees and Expenses. The Administrative Agent shall have
received all fees and expenses due and payable pursuant to Section 5.4 (to the
extent then invoiced) and pursuant to the Credit Agreement (including all
previously invoiced fees and expenses).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties. In order to induce the
Lenders and the Administrative Agent to enter into this Amendment, each of the
Borrower and the Parent hereby represents and warrants to each Agent and each
Lender, as of the date hereof, as follows:
(a) the representations and warranties set forth in Article
VII of the Credit Agreement and in each other Loan Document are, in
each case, true and correct (unless stated to relate solely to an
earlier date, in which case such representations and warranties are
true and correct as of such earlier date);
(b) no Default has occurred and is continuing, and neither the
Borrower, the Parent nor any of their respective Subsidiaries nor any
other Obligor is in material violation of any law or governmental
regulation or court order or decree; and
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254
(c) this Amendment has been duly authorized, executed and
delivered by each of the Borrower and the Parent and constitutes a
legal, valid and binding obligation of each such Person, enforceable
against it in accordance with its terms, except to the extent the
enforceability hereof may be limited by (i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights and remedies of
creditors generally and (ii) the effect of general principles of
equity, whether enforcement is considered in a proceeding in equity or
at law.
SECTION 4.2. Full Disclosure. Except as corrected by written
information delivered to the Agents and the Lenders reasonably prior to the date
on which this representation is made, all factual information heretofore or
contemporaneously furnished by the Borrower or the Parent in writing to any
Agent, the Issuer or any Lender for purposes of or in connection with this
Amendment or any transaction contemplated hereby is true and accurate in every
material respect and such information is not incomplete by omitting to state any
material fact necessary to make such information not misleading. All projections
delivered to any Agent or any Lender by or on behalf of the Borrower have been
prepared in good faith by the Borrower and represent the best estimate of the
Borrower, as of the date hereof, of the reasonably expected future performance
of the businesses reflected in such projections.
SECTION 4.3. Compliance with Credit Agreement. As of the execution and
delivery of this Amendment, each Obligor is in compliance with all the terms and
conditions of the Credit Agreement and the other Loan Documents to be observed
or performed by it thereunder, and no Default or Event of Default has occurred
and is continuing.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Full Force and Effect; Limited Amendment. Except as
expressly amended hereby, all of the representations, warranties, terms,
covenants, conditions and other provisions of the Credit Agreement and the other
Loan Documents shall remain unamended and unwaived and shall continue to be, and
shall remain, in full force and effect in accordance with their respective
terms. The amendments set forth herein shall be limited precisely as provided
for herein to the provisions expressly amended herein and shall not be deemed to
be an amendment to, consent to or modification of any other term or provision of
the Credit Agreement, any other Loan Document referred to therein or herein or
of any transaction or further or future action on the part of the Borrower, the
Parent or any other Obligor which would require the consent of the Lenders under
the Credit Agreement or any of the other Loan Documents.
SECTION 5.2. Loan Document Pursuant to Credit Agreement. This Amendment
is a Loan Document executed pursuant to the Credit Agreement and shall be
construed, administered
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255
and applied in accordance with all of the terms and provisions of the Credit
Agreement (and, following the date hereof, the Amended Credit Agreement). Any
breach of any representation or warranty or covenant or agreement contained in
this Amendment shall be deemed to be an Event of Default for all purposes of the
Credit Agreement and the other Loan Documents.
SECTION 5.3. Further Assurances. Each of the Borrower and the Parent
hereby agrees that it will take any action that from time to time may be
reasonably necessary to effectuate the amendments contemplated herein.
SECTION 5.4. Fees and Expenses. The Borrower shall pay all reasonable
out-of-pocket expenses incurred by the Administrative Agent in connection with
the preparation, negotiation, execution and delivery of this Amendment and the
documents and transactions contemplated hereby, including the reasonable fees
and disbursements of Mayer, Brown, and ▇▇▇▇▇, as counsel for the Administrative
Agent.
SECTION 5.5. Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or interpretation
of this Amendment or any provisions hereof.
SECTION 5.6. Execution of Additional Agreements. By their signatures
below, the Supermajority Lenders acknowledge that (i) the Administrative Agent
will be executing the Amended Borrower Security Agreement and the Collateral
Agency Agreement and (ii) the Issuer will be executing the Consent.
SECTION 5.7. Execution in Counterparts. This Amendment may be executed
by the parties hereto in several counterparts, each of which shall be deemed to
be an original and all of which shall constitute together but one and the same
agreement.
SECTION 5.8. Cross-References. References in this Amendment to any
Article or Section are, unless otherwise specified or otherwise required by the
context, to such Article or Section of this Amendment.
SECTION 5.9. Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SECTION 5.10. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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256
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
BUDGET RENT A CAR CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
BUDGET GROUP INC., as a Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇.▇▇▇▇▇▇▇▇
Title: Vice President
CREDIT SUISSE FIRST BOSTON, as a Lender,
and the Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Associate
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CREDIT SUISSE FIRST BOSTON, as the Issuer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Associate
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
257
BANK OF HAWAII, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
THE BANK OF NEW YORK, as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
BANK POLSKA KASA OPIEKI, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
BANK UNITED, as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director
BHF BANK AKTIENGESELLSCHAFT,
as a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
258
CREDIT AGRICOLE INDOSUEZ, as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
Branch Manager
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇ F.V.P.
Title: Head of Corporate Banking
Chicago
CANADIAN IMPERIAL BANK OF
COMMERCE, as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Director
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp, As Agent
CREDIT LYONNAIS CHICAGO BRANCH,
as a Lender
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: First Vice President
IMPERIAL BANK, as a Lender
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
LONG TERM CREDIT BANK OF JAPAN,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
259
NATIONSBANK, N.A. (SOUTH), as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: SVP
PNC BANK, KENTUCKY, INC., as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
ROYAL BANK OF CANADA, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Manager - Automotive Group
THE TORONTO-DOMINION BANK, as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Mgr. Cr. Admin.
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
260
ANNEX I
[Amendment Effective Date Certificate]
261
ANNEX I
to Amendment No. 3
to Credit Agreement
AMENDMENT EFFECTIVE DATE CERTIFICATE
BUDGET GROUP, INC.
BUDGET RENT A CAR CORPORATION
This Amendment Effective Date Certificate (this "Certificate") is
delivered pursuant to Section 3.8 of the Amendment No. 3 to Credit Agreement,
dated as of March 13, 1998 (the "Third Amendment"), among Budget Rent a Car
Corporation, a Delaware corporation (the "Borrower"), Budget Group, Inc.
(formerly known as Team Rental Group, Inc.), a Delaware corporation (the
"Parent"), the various financial institutions as are, or may from time to time
become, parties thereto (each, individually, a "Lender", and collectively, the
"Lenders"), and Credit Suisse First Boston, as the administrative agent (in such
capacity, the "Administrative Agent"). Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings provided for, or
incorporated by reference, in the Credit Agreement.
Each of the undersigned hereby certifies, represents and warrants, for
and on behalf of the Parent and the Borrower, as the case may be, as of the
Third Amendment Effective Date, as follows:
1. Consents, etc. All governmental and third party approvals and
consents necessary or advisable in connection with the Third Amendment and each
other amendment/waiver relating to any material agreement for borrowed money to
which the Parent or any Subsidiary of the Parent is a party and continuing
operations of the Parent and its Subsidiaries (after giving effect to the
consummation of the Third Amendment) have been obtained and are in full force
and effect. True and complete copies of all such governmental and third party
approvals and consents are attached hereto as Annex I.
2. No Material Adverse Change. There has not occurred a material
adverse change in the business, property, operations, assets, liabilities,
condition (financial or otherwise) or prospects of the Parent and its
Subsidiaries, taken as a whole, or the Borrower and its Subsidiaries, taken as a
whole, since December 31, 1996.
3. Warranties, No Default, etc. Both before and after giving effect to
the Third Amendment, no Default has occurred which is continuing, and neither
the Borrower, the Parent nor any of their respective Subsidiaries nor any other
Obligor is in material violation of any law or governmental regulation or court
order or decree.
262
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed and delivered, and the certification, representations and warranties
contained herein to be duly made, by an Authorized Officer as of the 13th day of
March, 1998.
BUDGET GROUP, INC.
By
----------------------------------------
Title:
BUDGET RENT A CAR CORPORATION
By
----------------------------------------
Title:
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263
ANNEX I
[APPROVALS AND CONSENTS]
-3-
264
EXHIBIT A
[Form of Consent]
265
ACKNOWLEDGMENT AND CONSENT UNDER
LETTER OF CREDIT REIMBURSEMENT AGREEMENT
THIS ACKNOWLEDGMENT AND CONSENT UNDER LETTER OF CREDIT REIMBURSEMENT
AGREEMENT (this "Acknowledgment") is dated as of March 13, 1998 among BUDGET
RENT A CAR SYSTEMS, INC., a Delaware corporation ("BRACS"), and those direct or
indirect Subsidiaries and other Affiliates and certain non-Affiliates of Budget
Group, Inc., a Delaware corporation formerly known as Team Rental Group, Inc.
("Budget Group"), identified on the signature pages hereto (BRACS and such
additional parties hereto each a "Lessee" and, collectively, the "Lessees"),
TEAM FLEET FINANCING CORPORATION, a Delaware corporation ("TFFC"), BUDGET RENT A
CAR CORPORATION, a Delaware corporation ("BRACC" or the "Guarantor"),and CREDIT
SUISSE FIRST BOSTON, a Swiss banking corporation (the "Credit Enhancer").
W I T N E S S E T H :
WHEREAS, the parties hereto have previously entered into that certain
Letter of Credit Reimbursement Agreement, dated as of April 29, 1997 (the
"Letter of Credit Reimbursement Agreement");
WHEREAS, the parties desire to correct the provisions relating to the
Credit Enhancer's waiver of set-off rights set forth in Section 4.17 of the
Letter of Credit Reimbursement Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereby agree as follows:
Section 1. Defined Terms. All capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth for such terms in the
Letter of Credit Reimbursement Agreement, as such agreement may be further
amended, supplemented, restated or otherwise modified from time to time.
Section 2. Set-off Rights Under the Letter of Credit Reimbursement
Agreement. Each Lessee and the Credit Enhancer hereby confirm and agree that,
notwithstanding anything to the contrary set forth in Section 4.17 of the Letter
of Credit Reimbursement Agreement, it was their mutual intent, and it is their
mutual intent, that:
266
(a) the Credit Enhancer may exercise any right that it has or
may have to set-off or to exercise any banker's lien or any right of
attachment or garnishment with respect to any funds at any time and
from time to time on deposit in, or otherwise to the credit of, any
account and any claims of a Lessee therein or with respect to any right
to payment from such Lessee; and
(b) the Credit Enhancer waives and relinquishes any right that
it has or may have to set-off or to exercise any banker's lien or any
right of attachment or garnishment with respect to any funds at any
time and from time to time on deposit in, or otherwise to the credit
of, any account and any claims of TFFC therein or with respect to any
right to payment from TFFC, it being understood, however, that nothing
contained herein shall, or is intended to, derogate from the assignment
and security interest granted to the Trustee or to impair any rights of
the Credit Enhancer with respect to such assignment and security
interest.
Section 3. Reference to and Effect on the Related Documents;
Ratification.
(a) Except as specifically corrected above, the Letter of Credit
Reimbursement Agreement is and shall continue to be in full force and effect and
is hereby ratified and confirmed in all respects.
(b) The execution, delivery and effectiveness of this Acknowledgment
and Consent shall not operate as a waiver of any right, power or remedy of any
party hereto under the Letter of Credit Reimbursement Agreement, nor constitute
a waiver of any provision of any of the Related Documents.
Section 4. Execution in Counterparts. This Acknowledgment and Consent
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Acknowledgment and Consent by facsimile transmission shall be as
effective as delivery of a manually executed counterpart of this Acknowledgment
and Consent.
Section 5. Governing Law. THIS ACKNOWLEDGMENT AND CONSENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
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267
IN WITNESS WHEREOF, the parties hereto have caused this Acknowledgment
and Consent to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
BUDGET RENT A CAR CORPORATION
By:
----------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
TEAM FLEET FINANCING CORPORATION
By:
----------------------------------------
Name:
Title:
LESSEES:
BUDGET RENT A CAR SYSTEMS, INC.
By:
----------------------------------------
Name:
Title:
268
TRANEX RENTALS OF NEW YORK, INC.
By:
----------------------------------------
Name:
Title:
CAPITAL CITY LEASING, INC.
By:
----------------------------------------
Name:
Title:
▇▇▇-AL, INC.
By:
----------------------------------------
Name:
Title:
WESTEAM ENTERPRISES, INC.
By:
----------------------------------------
Name:
Title:
TEAM RENTAL OF PHILADELPHIA, INC.
By:
----------------------------------------
Name:
Title:
269
TEAM RENTAL OF PITTSBURGH, INC.
By:
----------------------------------------
Name:
Title:
TEAM RENTAL OF CINCINNATI, INC.
By:
----------------------------------------
Name:
Title:
MacKAY CAR AND TRUCK RENTALS, INC.
By:
----------------------------------------
Name:
Title:
▇▇▇ ▇▇▇▇▇▇, INC.
By:
----------------------------------------
Name:
Title:
TEAM RENTAL OF FT. ▇▇▇▇▇, INC.
By:
----------------------------------------
Name:
Title:
270
TEAM RENTAL OF CONNECTICUT, INC.
By:
----------------------------------------
Name:
Title:
TEAM RENTAL OF SOUTHERN
CALIFORNIA, INC.
By:
----------------------------------------
Name:
Title:
ARIZONA RENT-A-CAR SYSTEMS, INC.
By:
----------------------------------------
Name:
Title:
TEAM RENTAL OF ROCHESTER, INC.
By:
----------------------------------------
Name:
Title:
NYRAC, INC.
By:
----------------------------------------
Name:
Title:
271
AUTOMATED TRANSPORTATION, INC.
By:
----------------------------------------
Name:
Title:
RAPID RENTALS, INC.
By:
----------------------------------------
Name:
Title:
BUDGET RENT-A-CAR OF NEW ORLEANS,
INC.
By:
----------------------------------------
Name:
Title:
TEAM RENTAL OF SOUTHERN
CALIFORNIA, INC.
By:
----------------------------------------
Name:
Title:
272
EXHIBIT B
[Form of Collateral Agency Agreement]
273
EXHIBIT C
[Form of Nominee Agreement]
274
VEHICLE TITLE NOMINEE AGREEMENT
THIS VEHICLE TITLE NOMINEE AGREEMENT (this "Nominee Agreement") is made
as of March 13, 1998, by and between BUDGET RENT A CAR CORPORATION, a Delaware
corporation ("Owner"), and TEAM FLEET FINANCING CORPORATION, a Delaware
corporation ("Nominee").
WHEREAS, Owner has acquired, and from time to time in the future will
acquire, certain vehicles identified in a schedule to this Nominee Agreement
from time to time (such vehicles, the "Vehicles");
WHEREAS, for administrative convenience in the management of the rental
fleet financing programs of Owner and its affiliates, the certificates of title
for the Vehicles will list Nominee as the titleholder rather than Owner;
WHEREAS, notwithstanding that the certificates of title to the Vehicles
show Nominee as the titleholder, Owner and Nominee intend that Owner shall be
entitled to all incidents, benefits and risks of ownership of the Vehicles and
that Nominee shall have no ownership interest in the Vehicles but shall act
solely as Owner's nominee owner of the Vehicles pursuant to the terms hereof;
and
WHEREAS, Nominee and Owner desire to confirm their respective interests
in and obligations with respect to the Vehicles and to provide for certain other
matters relating to the use and disposition of the Vehicles;
NOW THEREFORE, in consideration of the mutual promises herein contained
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Nominee and Owner, intending to be legally bound,
hereby agree as follows:
1. Definitions.
(a) Capitalized terms used herein and not otherwise defined
herein shall have the meanings specified therefor in the Credit
Agreement.
(b) In addition, the following capitalized terms shall have
following meanings when used in this Nominee Agreement:
"Administrative Agent" means Credit Suisse First Boston, as
syndication and administrative agent under the Credit
Agreement.
275
"Collateral Agent" means Bankers Trust Company, as collateral
agent under the Collateral Agreement, and any successor
Collateral Agent thereunder.
"Collateral Agreement" means the Collateral Agency Agreement
dated as of March 13, 1998, among the Collateral Agent, Owner
and the Administrative Agent (on behalf the Lenders), as
heretofore or hereafter amended or otherwise modified in
accordance with its terms.
"Credit Agreement" means the Revolving Credit Agreement dated
as of April 29, 1997 among Owner, as borrower, Budget Group,
Inc., as guarantor, the Administrative Agent, as syndication
and administrative agent, and the Lenders, as heretofore or
hereafter amended or otherwise modified in accordance with its
terms.
"Lenders" means the institutions parties to the Credit
Agreement and identified as such therein.
2. Appointment of Nominee as Nominee Owner; Power of Attorney;
Compensation.
(a) Owner hereby appoints Nominee as nominee owner of the
Vehicles and Nominee hereby agrees to serve as Owner's designated agent
in such capacity as described herein.
(b) Nominee hereby grants Owner a power of attorney
substantially in the form of Exhibit A attached hereto to (i) transfer
the title to any Vehicle from the name of Nominee to the name of Owner
or the name of a third party, (ii) reflect on the certificate of title
of any Vehicle the interest of any lienholder and (iii) execute such
other documents and instruments as may be necessary to effect any such
transfer or reflect any such interest.
(c) In consideration of Nominee's agreement to act as Nominee
hereunder, Owner will pay to Nominee an annual fee as agreed by Owner
and Nominee
3. Identification of Vehicles. The Vehicles as of the date hereof are
identified on the schedule attached hereto as Exhibit B (the "Nominee Vehicle
Schedule"). Owner shall at all times maintain a listing (which may be
electronic) of the Vehicles, which listing shall be deemed conclusive in
identifying the Vehicles. From time to time, upon request by the Collateral
Agent, the Administrative Agent or Nominee, Owner shall deliver to the
Collateral Agent, the Administrative Agent and Nominee an updated Nominee
Vehicle Schedule listing the Vehicles as of the date of delivery of such revised
Nominee Vehicle Schedule.
4. Interests in the Vehicles. Notwithstanding the fact that title to
the Vehicles will remain in the name of Nominee, Nominee and Owner hereby
acknowledge that:
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276
(a) except as set forth in subsection (b) below, Owner is
entitled to all incidents, benefits and risks of ownership of the
Vehicles, including, without limitation, the sole right to operate,
rent, sell and otherwise transfer and dispose of the Vehicles; and
(b) Nominee has no direct or indirect ownership or other
interest in the Vehicles, except such rights and obligations with
respect to the Vehicles as are required by Owner's appointment of
Nominee as nominee owner of the Vehicles as set forth herein.
5. Transfer of Vehicle Titles.
(a) General. Nominee and Owner agree that Owner may (i) change
the titleholder's name on the Certificate of title for any Vehicle from
the name of Nominee to the name of Owner or a third party or (ii)
reflect on the certificate of title of any Vehicle the interest in such
Vehicle of any lienholder. Nominee may require Owner to change the
titleholder's name on the Certificate of Title for any Vehicle(s) from
the name of Nominee to the name of Owner by delivering written notice
of such request to Owner. Within 15 business days of receipt of such
written notice, Owner agrees to use its reasonable efforts to transfer
title to any such Vehicle from the name of Nominee to the name of
Owner.
(b) Expenses. Owner will be responsible for the payment of any
transfer fees, taxes, license fees, registration fees or other similar
governmental fees and taxes (including the cost of any recording or
registration fees or other similar governmental charges payable with
respect to the notation on the certificate of title of the interest of
a lienholder) and all costs and expenses in connection with the
transfer of title of, or reflection of the interest of any lienholder
interest in, any Vehicle (collectively, "Title Fees and Costs").
6. Indemnification.
(a) Owner hereby agrees to indemnify and hold harmless Nominee
from and against any damage, loss, liability, expense and tax
(including, without limitation, reasonable costs of investigation and
attorney's fees and expenses) (collectively, "Losses") (other than any
expense incurred by Nominee pursuant to Section 6(b)) arising out of or
related to the Vehicles, whether due to Nominee's holding legal title
to any Vehicle, Nominee's appointment as nominee owner of the Vehicles
or Nominee's performance under this Nominee Agreement, including,
without limitation, Losses arising out of or related to (i) Nominee's
grant of power of attorney to Owner pursuant to Section 2(b), (ii)
Owner's failure to pay all Title Fees and Costs pursuant to Section
5(b), (iii) claims for personal injury or property damage involving any
Vehicle, (iv) any personal property taxes payable with respect to the
Vehicles.
(b) Nominee hereby agrees to indemnify and hold harmless Owner
from and against any Losses arising out of or relating to any claim
made on a Vehicle or any proceeds thereof by a creditor of or purchaser
from Nominee as a result of Nominee's retention of legal title to any
Vehicle, Nominee's appointment as nominee owner of the Vehicles or
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Nominee's performance under this Nominee Agreement, whether direct or
indirect, and whether any such Losses are incurred by the Owner, the
Collateral Agent or the Master Collateral Agent; provided, however,
that such indemnity shall not extend to any Losses arising out of or
relating to any claim made on a Vehicle by a purchaser purchasing such
Vehicle from or at the direction of Owner, the Collateral Agent or the
Master Collateral Agent; provided, further, that such indemnity shall
not extend to any Title Fees and Costs incurred.
7. Acknowledgments by Nominee. Nominee hereby acknowledges and
consents to the following:
(a) pursuant to the Collateral Agreement, Owner will assign,
pledge and grant to the Collateral Agent, for the benefit of the
Lenders, a first priority, perfected security interest in all of
Owner's right, title and interest in and to, among other things, (i)
the Vehicles, (ii) any manufacturer repurchase program or guaranteed
depreciation program (collectively, "Manufacturer Programs") associated
with the Vehicles and (iii) this Nominee Agreement.
(b) the Collateral Agent, as assignee of Owner's rights
hereunder, shall be entitled to enforce the indemnity set forth in
Section 6(b) above against Nominee and Nominee agrees to pay any
amounts due with respect to such indemnity directly to the Collateral
Agent.
8. Further Assurances. Each of Nominee and Owner will, from time to
time, execute and deliver such further instruments and render such further
assistance as the other party may reasonably request in order to carry out the
transactions contemplated herein; provided, however, that such instruments will
be prepared by Owner, and all costs and expenses in connection with such
execution and delivery or other assistance will be allocated in accordance with
Section 5.
9. Remittance of Proceeds. In the event that Nominee receives any (a)
payments in respect of Vehicles representing repurchase prices from vehicle
manufacturers or auction dealers under Manufacturer Programs, (b) proceeds from
the sale of Vehicles (other than pursuant to a Manufacturer Programs), (c)
insurance proceeds in respect of Vehicles, or (d) any other payments or proceeds
in respect of Vehicles, in each case, other than any payments received pursuant
to Section 6(a), it shall, promptly upon receipt, but in no event later than 2
business days from receipt, deposit such payments or proceeds into the
Collateral Account (as defined in the Collateral Agreement).
10. No Third Party Beneficiaries. This Agreement will not confer any
rights or remedies upon any Person other than Nominee, Owner, the Collateral
Agent and their respective successors and permitted assigns.
11. Entire Agreement. This Agreement and the other agreements
specifically referenced herein constitute the entire agreement between Nominee
and Owner and supersede any prior
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understandings, agreements, or representations by or among Nominee and Owner,
written or oral, to the extent they related in any way to the subject matter
hereof.
12. Succession and Assignment. This Agreement will be binding upon and
inure to the benefit of Nominee, Owner and their respective successors and
permitted assigns. Except as otherwise provided in Section 7 hereof, neither
Nominee nor Owner may assign either this Nominee Agreement or any of its rights,
interests, or obligations hereunder without the prior written approval of the
other.
13. Counterparts. This Agreement may be executed in separate
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same instrument.
14. Headings. The section headings contained in this Nominee Agreement
are inserted for convenience only and will not affect in any way the meaning or
interpretation of this Nominee Agreement.
15. Notices. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder will be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to Nominee:
Team Fleet Financing Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Norwalk
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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If to Owner:
Budget Rent A Car Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior V.P. and General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Any party hereto may give any notice, request, demand, claim, or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication will be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any party hereto may change the
address to which notices, requests, demands, claims and other communications
hereunder are to be delivered by giving the other party notice in the manner
herein set forth.
16. Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW
YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF
ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
17. Amendments and Waivers. No amendment of any provision of this
Nominee Agreement will be valid unless the same will be in writing and signed by
each of Nominee and Owner. No waiver by either Nominee or Owner of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, will be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent such occurrence.
18. Severability. Any term or provision of this Nominee Agreement that
is invalid or unenforceable in any situation in any jurisdiction will not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
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19. Construction.
(a) General. The language used in this Nominee Agreement will
be deemed to be the language chosen by Nominee and Owner to express
their mutual intent, and no rule of strict construction will be applied
against either Nominee or Owner.
(b) Title; Titling. As used in this Nominee Agreement, the
term "title" refers to a certificate of title or other similar form of
vehicle title and is intended by Nominee and Owner to include the terms
"vehicle registration" and "vehicle license plate," unless specified
otherwise. Similarly, unless specified otherwise, "titling" will be
deemed to include the acts of registering a vehicle, including the
registering of the license plates of a vehicle.
20. No Petition. Owner hereby covenants and agrees that, prior to the
date which is one year and one day after the payment in full of the latest
maturing rental car asset backed note issued by Nominee under the Amended and
Restated Base Indenture dated as of December 1, 1996 among Nominee, as issuer,
Budget Group, Inc. (formerly known as Team Rental Group, Inc.), as servicer, and
Bankers Trust Company, as trustee, it will not institute against, or join with
any other party in instituting against, Nominee, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any Federal or state bankruptcy or similar law; provided, however, that nothing
in this Section 19 shall constitute a waiver of any right to indemnification,
reimbursement or other payment from Nominee pursuant to this Nominee Agreement.
In the event that Owner takes action in violation of this Section 19, Nominee
agrees that it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such a petition by Owner or the commencement of
such action and raise the defense that Owner 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 19 shall survive the termination of this Nominee Agreement, and the
resignation or removal of Nominee hereunder. Nothing contained herein shall
preclude participation by Owner in assertion or defense of its claims in any
such proceeding involving Nominee.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have duly executed this Vehicle
Title Nominee Agreement as of the date first above written.
BUDGET RENT A CAR CORPORATION
By:
----------------------------------
Name:
Title:
TEAM FLEET FINANCING CORPORATION
By:
----------------------------------
Name:
Title:
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EXHIBIT A
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Team Fleet Financing Corporation
does hereby make, constitute and appoint _________________________ its true and
lawful Attorney(s)-in-fact for it and in its name, stead and behalf, to execute
any and all documents pertaining to the titling of motor vehicles in the name of
Team Fleet Financing Corporation, the noting of the lien of Bankers Trust
Company, as collateral agent, as the first lienholder on certificates of title,
the correction of any such certificate of title, the licensing and registration
of motor vehicles and the transfer of title to the manufacturer pursuant to its
repurchase program, to a third party through an auction conducted by or through
or arranged by the manufacturer pursuant to its guaranteed depreciation program
or repurchase program or to any affiliate of Team Fleet Financing Corporation.
This power is limited to the foregoing and specifically does not authorize the
creation of any liens or encumbrances on any of said motor vehicles.
The powers and authority granted hereunder shall, unless sooner
terminated, revoked or extended, cease five years from the date of execution as
set forth below.
IN WITNESS WHEREOF, Team Fleet Financing Corporation has caused this
instrument to be executed on its behalf by its [ ] this _____ day of
March, 1998.
TEAM FLEET FINANCING CORPORATION
By:
----------------------------------
Name:
Title:
State of ___________________ )
)
County of __________________ )
Subscribed and sworn before me, a notary public, in and for said county
and state, this __________ day of March, 1998.
------------------------------------------
Notary Public
My Commission Expires:____________________
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EXHIBIT B
NOMINEE VEHICLE SCHEDULE
