<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 7, 1997
RYDER TRS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
---------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF INCORPORATION)
333-20397 38-331-3542
----------------------------- -----------------------------
(COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
1560 BROADWAY, SUITE 1800 80202
DENVER, COLORADO
-----------------------------
----------------------------- (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
(303) 376-0040
---------------------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
N/A
---------------------------------------------------------------
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired: None
(b) Pro Forma Financial Information: None
(c) Exhibits: See index immediately following the signature page. The sole
purpose of this Form 8-K is to submit exhibits that were listed in the
Company's Form 10-Q, which was filed on August 14, 1997.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Ryder TRS, Inc.
/s/ Gerald R. Riordan
By: _________________________________
Gerald R. Riordan
President
/s/ Michael A. Zawalski
By: _________________________________
Michael A. Zawalski
Chief Financial Officer
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DOCUMENT
----------- --------
<C> <S>
10.1 Loan Agreement, dated as of August 7, 1997, between RCTR, Inc., as
borrower, and FCTR, Inc., as lender.
10.2 Liquidity Agreement, dated as of August 7, 1997, among FCTR, Inc.,
as borrower, certain financial institutions, as liquidity lenders,
and Citibank N.A., as liquidity agent.
10.3 Collateral Agreement, dated as of August 7, 1997, among FCTR,
Inc., RCTR, Inc., Citibank, N.A., as liquidity agent and
depositary, Citicorp USA, Inc., as agent, and Citicorp Securities,
Inc. and Lehman Brothers Inc., as dealers.
10.4 Depositary Agreement, dated August 7, 1997, between FCTR, Inc. and
Citibank, N.A., as depositary.
10.5 Dealer Agreement, dated as of August 7, 1997, between FCTR, Inc.,
RCTR, Inc., Citicorp Securities, Inc. and Lehman Brothers Inc.
</TABLE>
4
<PAGE>
EXHIBIT 10.1
EXECUTION COPY
===============================================================================
LOAN AGREEMENT
dated as of August 7, 1997
between
RCTR, INC.,
as Borrower
and
FCTR, INC.,
as Lender
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
Page
----
<S> <C>
ARTICLE I. Certain Definitions..........................................................1
SECTION 1.1. Certain Definitions................................................1
SECTION 1.2. Accounting and Financial Determinations............................1
SECTION 1.3. Cross References; Headings.........................................2
SECTION 1.4. Interpretation.....................................................2
ARTICLE II. Loan Commitment of Finco....................................................2
SECTION 2.1. Loan Commitment....................................................2
SECTION 2.2. Certain Waivers....................................................3
SECTION 2.3. Conditions.........................................................3
SECTION 2.4. Use of Proceeds....................................................3
ARTICLE III. Loan Notes; Loan Procedure; Recordkeeping..................................3
SECTION 3.1. Loan Notes.........................................................3
SECTION 3.2. Loan Procedure.....................................................3
SECTION 3.3. Recordkeeping......................................................4
ARTICLE IV. Interest....................................................................4
SECTION 4.1. Interest Rate on Loans.............................................4
SECTION 4.2. Interest Payment Dates.............................................4
SECTION 4.3. Setting of Rates...................................................4
SECTION 4.4. Supplemental Interest..............................................4
ARTICLE V. Repayment....................................................................4
SECTION 5.1. Mandatory Payment of Loans.........................................4
SECTION 5.2. Voluntary Prepayments..............................................5
ARTICLE VI. Making of Payments..........................................................5
SECTION 6.1. Making of Payments.................................................5
SECTION 6.2. Due Date Extension.................................................5
SECTION 6.3. Application of Sale Proceeds.......................................5
ARTICLE VII. Loan Collateral Security...................................................6
SECTION 7.1. Grant of Security Interest.........................................6
SECTION 7.2. Certificates of Title..............................................6
SECTION 7.3. Release of Loan Collateral.........................................6
SECTION 7.4. Change of Location or Name.........................................7
SECTION 7.5. Deliveries; Further Assurances.....................................7
ARTICLE VIII. Representations and Warranties............................................7
SECTION 8.1. Organization; Power................................................7
SECTION 8.2. Authorization......................................................7
SECTION 8.3. Enforceability.....................................................8
SECTION 8.4. Governmental Approvals.............................................8
SECTION 8.5. Financial Information; Financial Condition.........................8
SECTION 8.6. Litigation; Compliance with Laws...................................8
SECTION 8.7. Liens..............................................................8
SECTION 8.8. Employee Benefit Plans.............................................9
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
SECTION 8.9. Investment Company Act; Public Utility Holding Company Act........9
SECTION 8.10. Regulations G, T, U and X.........................................9
SECTION 8.11. Proceeds..........................................................9
SECTION 8.12. Business Locations; Trade Names...................................9
SECTION 8.13. Taxes.............................................................9
SECTION 8.14. No Consent; Governmental Authorizations...........................10
SECTION 8.15. Eligible Vehicles.................................................10
SECTION 8.16. Title to Assets; Security Interests...............................10
SECTION 8.17. No Material Misstatements........................................10
SECTION 8.18. Insurance.........................................................10
SECTION 8.19. Collateral Agreement..............................................11
SECTION 8.20. No Property.......................................................11
SECTION 8.21. Burdensome Provisions.............................................11
SECTION 8.22. Solvency..........................................................11
SECTION 8.23. Ownership; Subsidiaries...........................................11
SECTION 8.24. No Material Adverse Change........................................11
SECTION 8.25. Other Representations.............................................11
SECTION 8.26. Capitalization....................................................11
ARTICLE IX. Affirmative Covenants.......................................................12
SECTION 9.1. Corporate Existence; Foreign Qualification........................12
SECTION 9.2. Books, Records and Inspections....................................12
SECTION 9.3. Maintenance of Properties.........................................12
SECTION 9.4. Insurance.........................................................13
SECTION 9.5. Reporting Requirements............................................14
SECTION 9.6. Taxes and Obligations.............................................16
SECTION 9.7. Protection from Liens.............................................16
SECTION 9.8. Maintenance of the Vehicles.......................................17
SECTION 9.9. Maintenance of Separate Existence.................................17
SECTION 9.10. Proceeds..........................................................17
SECTION 9.11. Vehicle Titles Check..............................................17
SECTION 9.12. Collateral Agreement..............................................17
SECTION 9.13. Compliance with Laws..............................................18
SECTION 9.14. Delivery of Information...........................................18
SECTION 9.15. Restrictions......................................................18
SECTION 9.16. Cash Audit........................................................18
SECTION 9.17. Compliance with Covenants.........................................18
SECTION 9.18. Payment of Obligations............................................18
SECTION 9.19. Employee Benefits.................................................18
SECTION 9.20. Certificates of Title.............................................19
ARTICLE X. Negative Covenants...........................................................19
SECTION 10.1. Mergers, Consolidations...........................................19
SECTION 10.2. Regulations G, T, U and X.........................................19
SECTION 10.3. Liens.............................................................19
SECTION 10.4. Use of Vehicles...................................................19
SECTION 10.5. Other Indebtedness................................................19
SECTION 10.6. Restrictions on Distributions; Affiliated Transactions............20
SECTION 10.7. Sales of Assets...................................................20
SECTION 10.8. Acquisition of Assets.............................................20
SECTION 10.9. Name; Chief Executive Office......................................20
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
SECTION 10.10. Organic Documents................................................20
SECTION 10.11. Investments......................................................20
SECTION 10.12. No Other Agreements; Amendments to Related Documents.............20
SECTION 10.13. Obligations of Leasco............................................21
SECTION 10.14. Manufacturer Bankruptcy..........................................21
SECTION 10.15. Business.........................................................21
ARTICLE XI. Conditions..................................................................21
SECTION 11.1. Initial Loans.....................................................21
SECTION 11.2. All Loans.........................................................22
ARTICLE XII. Loan Events of Default and Their Effect....................................22
SECTION 12.1. Loan Events of Default............................................23
SECTION 12.2. Effect of Loan Event of Default or Liquidation Event of Default...24
SECTION 12.3. Rights of Agent Upon Liquidation Event of Default and
Non-Performance of Certain Covenants............................24
SECTION 12.4. Application of Proceeds...........................................24
ARTICLE XIII. General...................................................................25
SECTION 13.1. Waiver; Amendments................................................25
SECTION 13.2. Confirmations.....................................................25
SECTION 13.3. Notices...........................................................25
SECTION 13.4. Costs, Expenses and Taxes.........................................25
SECTION 13.5. Indemnification...................................................26
SECTION 13.6. No Petition.......................................................26
SECTION 13.7. No Recourse.......................................................27
SECTION 13.8. Waiver of Set-Off.................................................27
SECTION 13.9. Forum Selection and Consent to Jurisdiction.......................27
SECTION 13.10. Governing Law....................................................28
SECTION 13.11. Jury Trial.......................................................28
SECTION 13.12. Successors and Assigns...........................................28
</TABLE>
Schedules
- ---------
SCHEDULE 8.18 Insurance
SCHEDULE 8.19 UCC Filing Offices
SCHEDULE 10.06 Employees to be Compensated by Leasco
Exhibits
- --------
EXHIBIT A Form of Loan Note
EXHIBIT B-1 Form of Loan Request
EXHIBIT B-2 Form of Loan Request Response
EXHIBIT C Form of Monthly Report
EXHIBIT D Form of WF&G Opinion
EXHIBIT E Vehicle Title Nominee Agreement
EXHIBIT F Form of Monthly Vehicle Statement
iii
<PAGE>
THIS LOAN AGREEMENT (this "Agreement"), dated as of August 7,
---------
1997, is entered into between RCTR, INC., a Delaware corporation ("Leasco") and
------
FCTR, INC., a Delaware corporation ("Finco").
-----
BACKGROUND
WHEREAS Leasco intends to purchase or finance Vehicles (such
capitalized term, together with all other capitalized terms used herein, shall
have the meaning assigned thereto in Section 1.01) and to make the Repayment
Distribution, and desires to obtain financing therefor from Finco.
WHEREAS Finco is willing to make Loans to Leasco on the terms and
conditions set forth herein.
WHEREAS Finco will utilize the proceeds of the issuance and sale
of Commercial Paper Notes and certain Liquidity Advances made pursuant to the
Liquidity Agreement to make Loans to Leasco hereunder, and in connection
therewith will assign its rights hereunder to the Agent to secure its
obligations to the Secured Parties.
WHEREAS the Loans made to Leasco hereunder will be secured by all
of Leasco's right, title and interest in and to, among other things, (a) the
Vehicles owned by it, (b) the Vehicle Title Nominee Agreement and (c) the Lease.
WHEREAS Leasco has entered into the Collateral Agreement under
which it grants to the Agent a first priority security interest in, among other
things, the Vehicles owned by it, its rights under the Vehicle Title Nominee
Agreement as it relates to such Vehicles and the Lease.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to the terms and
conditions hereof, the parties hereto agree as follows:
ARTICLE I.
Certain Definitions
-------------------
SECTION 1.1. Certain Definitions. As used in this Agreement and
-------------------
unless the context requires a different meaning, capitalized terms not otherwise
defined herein shall have the meanings assigned to such terms in the Definitions
List attached as Annex A to the Liquidity Agreement, dated as of the Closing
Date (as such agreement may be amended, supplemented, restated or otherwise
modified from time to time in accordance with its terms, the "Liquidity
Agreement"), among Finco, the liquidity lenders set forth therein, and Citibank,
N.A., as liquidity agent, as in effect on the date hereof and as such Annex A
may be amended or modified from time to time in accordance with the terms of the
Liquidity Agreement (the "Definitions List").
SECTION 1.2. Accounting and Financial Determinations. Where the
---------------------------------------
character or amount of any asset or liability or item of income or expense is
required to be determined, or any accounting computation is required to be made,
for the purpose of this Agreement, such determination or calculation shall be
made, to the extent applicable and except as otherwise specified in this
Agreement, in accordance with GAAP; provided, however, that if any change in
-----------------
GAAP in itself
-1-
<PAGE>
materially affects any such calculation or determination, Leasco may by notice
to Finco and the Agent, or alternatively Finco or the Agent may by notice to
Leasco, require that any such determination or calculation thereafter be made in
accordance with GAAP as in effect, and applied by Leasco, immediately before
such change in GAAP occurs. Each of Leasco, Finco and the Agent agrees to enter
into negotiations in good faith to modify the financial representations and
covenants and other applicable provisions contained herein in a manner which
reflects any such change in GAAP without adversely affecting the rights of Finco
and the Agent. When used herein, the term "financial statement" shall include
the notes and schedules thereto.
SECTION 1.3. Cross References; Headings. The words "hereof",
--------------------------
"herein" and "hereunder" and words of a similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. Section, Schedule and Exhibit references contained
in this Agreement are references to Sections, Schedules and Exhibits in or to
this Agreement unless otherwise specified. Any reference in any Section or
definition to any clause is, unless otherwise specified, to such clause of such
Section or definition. The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
SECTION 1.4. Interpretation. In this Agreement, unless the
--------------
context otherwise requires:
(i) the singular includes the plural and vice versa;
(ii) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to any Person in a particular
capacity only refers to such Person in such capacity;
(iii) reference to any gender includes the other gender;
(iv) reference to any Requirement of Law means such Requirement
of Law as amended, modified, codified or reenacted, in whole or in part,
and in effect from time to time;
(v) "including" (and with correlative meaning "include") shall be
deemed to be followed by the words "without limitation" and means
including without limiting the generality of any description preceding
such term; and
(vi) with respect to the determination of any period of time,
"from" means "from and including" and "to" and "through" mean "to but
excluding".
ARTICLE II.
Loan Commitment of Finco
------------------------
SECTION 2.1. Loan Commitment. Subject to the terms and conditions
---------------
of this Agreement, Finco agrees to make loans (the "Loans") from time to time on
-----
or after the Loan Closing Date and prior to the Loan Commitment Termination Date
to Leasco; provided, however, that (a) the aggregate principal amount of all
-----------------
Loans outstanding shall not at any time exceed the Loan Commitment Amount and
(b) the principal amount of Loans made to Leasco on any one date shall not
exceed the sum of (i) the Capitalized Cost of new Eligible Vehicles the
purchases of which are being financed by such Loans to Leasco under this
Agreement on such date and (ii) the Net Book Value of
-2-
<PAGE>
other Eligible Vehicles (other than new Vehicles) being newly financed by such
Loans to Leasco on such date. The foregoing commitment of Finco is called the
"Loan Commitment".
---------------
SECTION 2.2. Certain Waivers. Leasco waives presentment, demand
---------------
for payment, notice of dishonor and protest, notice of the creation of any of
the Liabilities and all other notices whatsoever to Leasco with respect to the
Liabilities except notices required under Section 12.01. The obligations of
Leasco under this Agreement and the Loan Note shall not be affected by (i) the
failure of the Agent or Finco or the holder of the Loan Note or any of the
Liabilities to assert any claim or demand or to exercise or enforce any right,
power or remedy against Leasco or the Loan Collateral or otherwise, (ii) any
extension or renewal for any period (whether or not longer than the original
period) or exchange of any of the Liabilities or the release or compromise of
any obligation of any nature of any Person with respect thereto, (iii) the
surrender, release or exchange of all or any part of any property (including the
Loan Collateral) securing payment and performance of any of the Liabilities or
the compromise or extension or renewal for any period (whether or not longer
than the original period) of any obligations of any nature of any Person with
respect to any such property, and (iv) any other act, matter or thing which
would or might, in the absence of this provision, operate to release, discharge
or otherwise prejudicially affect the obligations of Leasco.
SECTION 2.3. Conditions. The making of each Loan is subject to
----------
the satisfaction of the applicable conditions set forth in Article XI.
SECTION 2.4. Use of Proceeds. Leasco shall apply the proceeds of
---------------
the Loans solely to purchase or finance Eligible Vehicles and, on the Closing
Date, to make the Repayment Distribution.
ARTICLE III.
Loan Notes; Loan Procedure; Recordkeeping
-----------------------------------------
SECTION 3.1. Loan Notes. The Loans shall be evidenced by a
----------
promissory note issued by Leasco (herein, as from time to time supplemented,
extended or replaced, the "Loan Note"), substantially in the form set forth in
---------
Exhibit A, with appropriate insertions, dated as of the Closing Date, payable to
the order of Finco and assigned to the Agent pursuant to the Collateral
Agreement.
SECTION 3.2. Loan Procedure. Leasco shall deliver a Loan Request
--------------
to Finco not later than 4:00 p.m., New York City time, on a day that is not less
than one, nor more than five, Business Days prior to the proposed Borrowing Date
(which shall be a Business Day), but in any event after the date of
effectiveness of the Liquidity Agreement. Each Loan Request shall be
irrevocable, and shall specify (i) the amount of the proposed Loan, (ii) the
date of the proposed Loan and (iii) a summary of the Vehicles being financed
with such Loan and, (A) in the case of Vehicles acquired from Manufacturers, the
total Capitalized Cost thereof as of the Borrowing Date and, (B) in the case of
any other Vehicles, the Net Book Value of such Vehicles, in each case (such
summary to include all of the information otherwise included in the Vehicle
Acquisition Schedule with respect to Vehicles subject thereto) as of the end of
the Related Month. The aggregate requested borrowings hereunder on any Business
Day shall be for an initial aggregate principal amount of at least $100,000. On
the terms and subject to the conditions of this Agreement, not later than 2:00
p.m., New York City time, on the Borrowing Date specified in the Loan Request,
Finco shall transfer same day or immediately available funds to Leasco's account
specified in such Loan Request in the amount specified in such Loan Request.
Each Loan Request made pursuant to this Section 3.02. shall constitute Leasco's
representation and warranty that all of the applicable conditions contained in
Article XI will, after giving effect to such Loan, be satisfied.
-3-
<PAGE>
SECTION 3.3. Recordkeeping. Finco shall record in its records, or
-------------
at its option on the schedule attached to the Loan Note, the date and amount of
each Loan made hereunder, each repayment thereof, and the other information
provided for thereon. The aggregate unpaid principal amount so recorded shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on the
Loan Note. The failure so to record any such information or any error in so
recording any such information shall not, however, limit or otherwise affect the
actual obligations of Leasco hereunder or under the Loan Note to repay the
principal amount of all Loans made to it, together with all interest accruing
thereon.
ARTICLE IV.
Interest
--------
SECTION 4.1. Interest Rate on Loans. Leasco hereby promises to
----------------------
pay interest on the aggregate unpaid principal amount of each Loan, for the
period commencing on the date such Loan is made to Leasco until such Loan is
paid in full at a rate not less than Finco's Carrying Cost Interest Rate for the
Related Month. The minimum rate of interest on each Loan shall be specified in a
Loan Request Response in the form of Exhibit B-2 hereto provided by Finco to
Leasco on the date a Loan Request is delivered; provided, however, that if
-----------------
Finco's Carrying Cost Interest Rate for the Related Month is higher than the
rate of interest specified in the Loan Request Response, interest payable shall
be determined using the higher rate; provided, further, that if Finco's Carrying
-----------------
Cost Interest Rate for the period beginning on the first day after the Related
Month up to the date that one or more Loans mature is higher than both of (i)
Finco's Carrying Cost Interest Rate for the Related Month and (ii) the rate of
interest specified in the Loan Request Response, interest payable shall be
determined using such higher rate.
SECTION 4.2. Interest Payment Dates. Accrued interest on each
----------------------
Loan shall be payable on each Payment Date (with respect to the Related Month),
upon any prepayment and at maturity, commencing with the first of such dates to
occur after the date such Loan is made. After maturity (whether by acceleration
or otherwise) accrued interest on all Loans shall be payable on demand.
SECTION 4.3. Setting of Rates. Finco's Carrying Cost Interest
----------------
Rate shall be calculated from time to time by the Agent in accordance with this
Agreement, which calculation shall be conclusive, absent demonstrable error.
SECTION 4.4. Supplemental Interest. The parties hereto
---------------------
acknowledge that it is the intention of each of them that the payments due from
Leasco to Finco under this Loan Agreement shall at all times be sufficient to,
independent of any other funds available to Finco, cover all of Finco's
obligations and costs relating to any of the Related Documents or otherwise, and
such parties agree that, if at any future time the payments hereunder are
insufficient to cover such obligations and costs, an additional amount shall be
payable by Leasco to Finco pursuant to this Section 4.04, which amount shall be
referred to as "Supplemental Interest" and shall be payable upon the same terms
as other interest payments due under this Agreement.
ARTICLE V.
Repayment
---------
SECTION 5.1. Mandatory Payment of Loans. Leasco shall pay to
--------------------------
Finco, as a repayment of principal of its Loans, an amount equal to:
-4-
<PAGE>
(a) on each Payment Date at which time an Amortization Event has
occurred and is continuing, the sum of:
(i) the accrued Depreciation Charges for the Related Month for
all Vehicles owned by Leasco at any time during such Related Month and
(A) financed by Finco under this Agreement as of the end of the Related
Month or, (B) without duplication, financed by Finco under this
Agreement that are no longer Eligible Vehicles, have suffered a Casualty
or have been sold or otherwise disposed of during the Related Month; and
(ii) the aggregate Net Book Values (each determined as of the
date on which each Vehicle was no longer an Eligible Vehicle, became a
Casualty or was sold or otherwise disposed of, as applicable) of all
Vehicles owned by Leasco at any time during such Related Month that,
without double counting the amounts in clause (a)(i) of this Section
5.01, are no longer Eligible Vehicles, suffered a Casualty or were sold
or otherwise disposed of in accordance with this Agreement;
(b) on any other date, an amount such that, after giving effect
to the repayment of such amount, the Enhancement Test Percentage is equal to or
greater than the Required Enhancement Percentage;
provided, however, that unless otherwise required to be paid sooner pursuant to
- -----------------
the terms of this Agreement, the entire unpaid balance of all Loans shall be
payable on the date that is 18 months from the Amortization Commencement Date.
All Loans shall be due on the maturity date therefor, whether by acceleration or
otherwise.
SECTION 5.2. Voluntary Prepayments. Leasco may from time to time
---------------------
prepay the Loans, in whole or in part, on any date; provided that Leasco shall
--------
give Finco and the Agent not less than one Business Day's prior notice of any
such prepayment, specifying the date and amount of such prepayment, and, if
Leasco is requesting a release of Vehicles from the Lien hereof pursuant to
Section 7.03, the Vehicles to which such prepayment relates.
ARTICLE VI.
Making of Payments
------------------
SECTION 6.1. Making of Payments. All payments of principal of, or
------------------
interest on, the Loan Note and of all other Liabilities shall be made by Leasco
to, or for the account of, Finco in immediately available Dollars, without
setoff, counterclaim or deduction of any kind. All such payments shall be made
to the Collateral Account (or such other account as Finco may from time to time
specify with the consent of the Agent), not later than 12:00 noon, New York City
time, on the date due; and funds received after that hour shall be deemed to
have been received by Finco on the next following Business Day. Finco hereby
specifies that all (i) amounts representing Disposition Proceeds and (ii)
payments with respect to any other Loan Collateral (including insurance proceeds
with respect to Vehicles and warranty payments) shall be deposited in the
Collateral Account.
SECTION 6.2. Due Date Extension. If any payment of principal or
------------------
interest with respect to any of the Loans falls due on a day which is not a
Business Day, then such due date shall be extended to the next following
Business Day and interest shall accrue to, but not including, such Business Day.
SECTION 6.3. Application of Sale Proceeds. Leasco agrees that all
----------------------------
Disposition Proceeds deposited in the Collateral Account shall be applied, upon
receipt thereof in the Collateral Account, to prepay Loans and pay accrued
interest on such prepaid amount.
-5-
<PAGE>
ARTICLE VII.
Loan Collateral Security
------------------------
SECTION 7.1. Grant of Security Interest. As security for the
--------------------------
prompt and complete payment and performance of the Liabilities, Leasco hereby
confirms the pledge, hypothecation, assignment, transfer and delivery to the
Agent under the Collateral Agreement for the benefit of Finco, and hereby
confirms the grant to the Agent under the Collateral Agreement for the benefit
of Finco, of a continuing, first priority security interest in, all of the
following, whether now owned or hereafter acquired: all of Leasco's right, title
and interest in and to (i) all Vehicles owned by Leasco, and all Certificates of
Title with respect thereto; (ii) the Vehicle Title Nominee Agreement; (iii) all
payments under insurance policies (whether or not the Agent is named as the loss
payee thereof) or any warranty payable by reason of loss or damage to, or
otherwise with respect to, any of the Vehicles; (iv) the Lease; (v) the Lease
File; and (vi) all products and proceeds of all of the foregoing.
SECTION 7.2. Certificates of Title. Leasco shall take, or shall
---------------------
cause to be taken, such action as shall be necessary to submit all of the
Certificates of Title to the appropriate state authority for notation thereon of
the Lien of the Agent. Pursuant to the Collateral Agreement, the original
Certificates of Title relating to the Vehicles shall be held by Leasco, in trust
for the benefit of the Agent as assignee of Finco. The Certificates of Title
shall be subject to all of the provisions of the Collateral Agreement.
SECTION 7.3. Release of Loan Collateral. (a) The parties agree
--------------------------
that pursuant to the provisions of this Section 7.03. and Section 9.07 of the
Collateral Agreement, any and all of the Liens for the benefit of Finco
(including the Lien of the Agent as assignee of Finco under the Collateral
Agreement) on the Vehicles and the Certificates of Title therefor shall be
released or deemed to be released, as provided in this Section 7.03. As to any
Vehicle, so long as no Amortization Event or Potential Amortization Event has
occurred and is continuing, and after the:
(i) deposit of the Disposition Proceeds with respect to such
Vehicle if it is sold or otherwise disposed of in accordance with this
Agreement; and
(ii) Agent has determined that, excluding the Vehicles with
respect to which the Lien of the Agent would be released pursuant to
this Section 7.03, the Enhancement Test Percentage will be equal to or
greater than the Required Enhancement Percentage;
any and all Liens for the benefit of Finco (including the Lien of the Agent as
assignee of Finco under the Collateral Agreement) on such Vehicle and the
Certificate of Title therefor shall be deemed to be released.
(b) Leasco may direct TRS to sell any Vehicle in an ordinary
course sale, provided, that such sale is made in accordance with this Section
7.03. Finco shall and shall cause the Agent to execute such documents and
instruments as Leasco may reasonably request (including a power of attorney of
the Agent appointing Leasco to act as the agent of the Agent in releasing the
Lien of the Agent on Vehicles sold pursuant to the provisions of this Section
7.03, which power of attorney shall be revocable at any time following a
Liquidation Event of Default). The parties hereto agree, however, that until
such time that no Commercial Paper Notes are Outstanding, the number of Vehicles
sold or disposed of during any month shall not exceed the Fleet Disposition
Limit unless the aggregate Disposition Proceeds from such sales or dispositions
exceed the aggregate Net Book Value of all Vehicles sold or disposed of during
such month (such Net Book Value to be measured for each Vehicle as of the date
such Vehicle was sold or disposed of).
-6-
<PAGE>
SECTION 7.4. Change of Location or Name. So long as any of the
--------------------------
Liabilities shall remain outstanding or Finco shall continue to have any Loan
Commitment, and except as acknowledged by the parties hereto in the last
sentence of Section 8.12, Leasco will not change (a) the location of its
principal place of business, chief executive office or its consolidated records
concerning its business and financial affairs, or (b) its legal name or the name
under or by which it conducts its business, in each case without first giving
the Agent and Finco at least 60 days' advance written notice thereof and having
taken any and all action required to maintain and preserve the first priority
perfected Lien of the Agent on the Loan Collateral; provided, however, that
-----------------
notwithstanding the foregoing, Leasco shall not change the location of its
principal place of business, chief executive office or its consolidated records
concerning its business and financial affairs to any place outside the United
States of America.
SECTION 7.5. Deliveries; Further Assurances. Leasco agrees that
------------------------------
it will, at its sole expense, (i) immediately deliver or cause to be delivered
to Finco (or the Agent on Finco's behalf), in due form for transfer (i.e.,
----
endorsed in blank), all securities, chattel paper, instruments and documents, if
any, at any time representing all or any of the Loan Collateral (it being
understood that the Certificates of Title shall be held by Leasco pursuant to
the provisions of the Collateral Agreement) and (ii) execute and deliver, or
cause to be executed and delivered, to Finco or the Agent, as the case may be,
in due form for filing or recording (and pay the cost of filing or recording the
same in all public offices reasonably deemed necessary or advisable by Finco or
the Agent, as the case may be), such assignments, security agreements,
mortgages, consents, waivers, financing statements, and other documents, and do
such other acts and things, all as may from time to time be reasonably necessary
or desirable to establish and maintain to the satisfaction of Finco and the
Agent a valid perfected Lien on and security interest in all of the Loan
Collateral now or hereafter existing or acquired to secure payment and
performance of the Liabilities.
ARTICLE VIII.
Representations and Warranties
------------------------------
To induce Finco to enter into this Agreement and to make Loans
hereunder, Leasco represents and warrants to Finco that:
SECTION 8.1. Organization; Power. Leasco (a) is a corporation
-------------------
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
own its property and assets and to carry on its business as now conducted and as
proposed to be conducted, (c) is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required, except
where the failure so to qualify could not reasonably be expected to result in a
Material Adverse Effect, and (d) has the corporate power and authority to
execute, deliver and perform its obligations under each of the Related Documents
and each other agreement or instrument contemplated hereby to which it is or
will be a party and to borrow hereunder.
(b) There have been no amendments to the Organic Documents of
Leasco since the respective dates of the certified copies furnished to Finco
pursuant to Section 11.01, other than amendments, if any, not prohibited by this
Agreement (copies of which have been furnished to Finco).
SECTION 8.2. Authorization. The execution, delivery and
-------------
performance by Leasco of each of the Related Documents, the borrowings hereunder
and the Transactions (a) have been duly authorized by all requisite corporate
and, if required, stockholder action, (b) will not violate any provision of the
certificate or articles of incorporation or other constitutive documents or
by-laws of
-7-
<PAGE>
Leasco and (c) will not (i) violate (A) any material provision of any
law, statute, rule or regulation, (B) any order of any Governmental Authority or
(C) any material provision of any indenture, agreement or other instrument to
which Leasco is a party or by which Leasco or any of its property is or may be
bound, (ii) be in conflict with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under, or give rise to any right
to accelerate or to require the prepayment, repurchase or redemption of any
obligation under, any such indenture, agreement or other instrument or (iii)
result in the creation or imposition of any Lien upon or with respect to any
property or assets now owned or hereafter acquired by Leasco (other than any
Lien created hereunder, under the Collateral Agreement or Permitted Liens).
SECTION 8.3. Enforceability. This Agreement has been duly
--------------
executed and delivered by Leasco and constitutes, and each other Related
Document when executed and delivered by each party thereto will constitute, a
legal, valid and binding obligation of Leasco enforceable against Leasco in
accordance with its terms.
SECTION 8.4. Governmental Approvals. No action, consent or
----------------------
approval of, registration or filing with or any other action by any Governmental
Authority is or will be required by or on the part of Leasco in connection with
the Transactions, except for the filing of Uniform Commercial Code financing
statements.
SECTION 8.5. Financial Information; Financial Condition. Leasco
------------------------------------------
has heretofore furnished to Finco (i) the consolidated and combined balance
sheets and related statements of income and cash flow for the Consumer Truck
Rental business unit of Old Ryder ("CTR") at and for the year ended December 31,
1995, together with the notes and schedules thereto, which include statements of
divisional equity, such financial statements having been audited by and
accompanied by the opinion of KPMG Peat Marwick LLP, independent public
accountants, (ii) the consolidated and combined balance sheets and related
statements of income and cash flow for TRS at and for the year ended December
31, 1996, and the 3 months ended March 31, 1997, together with the notes and
schedules thereto, which include statements of equity, such financial statements
(except for the financial statements for the 3 months ended March 31, 1997)
having been audited by and accompanied by the opinion of Coopers & Lybrand LLP,
independent public accountants, and (iii) the internal unaudited consolidated
and combined statements of income for TRS for the month ended April 30, 1997.
SECTION 8.6. Litigation; Compliance with Laws. (a) There are no
--------------------------------
actions, suits or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of Leasco, threatened
against or affecting Leasco or any business, property or rights of Leasco (i)
that involve any Related Document or the Transactions or (ii) as to which there
is a reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.
(b) Neither Leasco nor any of its respective material
properties or assets is in violation of, nor will the continued operation of
their material properties and assets as currently conducted violate, any law,
rule or regulation, or is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where such violation
or default could reasonably be expected to result in a Material Adverse Effect.
SECTION 8.7. Liens. The Loan Collateral is free and clear of all
-----
Liens other than Permitted Liens. Finco (or the Agent on behalf of Finco) has
obtained, as security for the Liabilities, a first priority perfected Lien on
all Loan Collateral. All Vehicle Perfection and Documentation Requirements with
respect to all Vehicles on or after the date hereof have and will continue to be
-8-
<PAGE>
satisfied; except to the extent that the failure to comply with such
requirements does not, in the aggregate, materially adversely affect either the
interests of Finco, the Agent or the Secured Parties under this Agreement or the
Collateral Agreement or the likelihood of repayment of the Loans hereunder.
SECTION 8.8. Employee Benefit Plans. Each of Leasco and its ERISA
----------------------
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA, the Code and the regulations and published interpretations
thereunder with respect to Plans and Multiemployer Plans. Neither Leasco nor any
of its ERISA Affiliates (a) maintains or contributes to or is or has within the
past five years been required to maintain or contribute to a Plan or a
Multiemployer Plan or (b) will be required to maintain or contribute to, or has
any obligation with respect to, a Plan or a Multiemployer Plan prior to the
termination of this Agreement or during such period that Leasco has any
obligations to Finco under this Agreement. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with other such ERISA
Events, could be reasonably expected to result in a Material Adverse Effect.
SECTION 8.9. Investment Company Act; Public Utility Holding
----------------------------------------------
Company Act. Leasco is not (a) an "investment company" as defined in, or subject
- -----------
to regulation under, the Investment Company Act or (b) a "holding company" as
defined in, or subject to regulation under, the Public Utility Holding Company
Act of 1935.
SECTION 8.10. Regulations G, T, U and X. (a) Leasco is not
-------------------------
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan hereunder will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation G, T,
U or X.
SECTION 8.11. Proceeds. The proceeds of the Loans will be used
--------
solely to purchase or finance Eligible Vehicles or make the Repayment
Distribution.
SECTION 8.12. Business Locations; Trade Names. (a) Leasco
-------------------------------
maintains its chief executive office, principal place of business and
consolidated business and financial records at 8669 N.W. 36th Street, Miami,
Florida, 33166, (b) Leasco's legal name is RCTR, Inc. and (c) Leasco does not
conduct its business under any other name. The parties hereto acknowledge that,
as of the date hereof, Leasco plans to change the location of its chief
executive office, principal place of business and consolidated business and
financial records to 1560 Broadway, Suite 1800, Denver, Colorado, 80202.
SECTION 8.13. Taxes. Leasco and each consolidated, combined or
-----
affiliated group of which Leasco is a member (a "consolidated group") have filed
all tax returns which have been required to be filed by them and have paid all
taxes, including all payroll taxes and Federal and state withholding taxes, and
all assessments payable by them that have become due, other than those taxes and
assessments that are not yet delinquent or that are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been established, and are being maintained, in accordance with GAAP. As of
the date hereof, there is no ongoing audit (other than routine sales tax audits
and other routine audits) or, to Leasco's knowledge, other governmental
investigation of the tax liability of Leasco or any such consolidated group and
there is no unresolved claim by a taxing authority concerning Leasco's or such
consolidated group's tax liability for any
-9-
<PAGE>
period for which returns have been filed or were due other than those being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been established, and are being maintained, in accordance
with GAAP.
SECTION 8.14. No Consent; Governmental Authorizations. (a) No
---------------------------------------
consent, action by or in respect of, approval or other authorization of, or
registration, declaration or filing with, any Governmental Authority or other
Person is required for the valid execution and delivery and performance of this
Agreement or any other Related Document by Leasco for the payment of any amounts
by Leasco hereunder or thereunder other than such consents, approvals,
authorizations, registrations, declarations or filings as shall have been
obtained by Leasco prior to the Closing Date.
(b) Leasco has all licenses, franchises, permits and other
governmental authorizations necessary for all businesses presently carried on by
it (including owning and leasing the real and personal property owned and leased
by it).
SECTION 8.15. Eligible Vehicles. Each Vehicle was, on the date of
-----------------
purchase thereof by Leasco and on the date of the making of the Loan for the
financing thereof hereunder, an Eligible Vehicle.
SECTION 8.16. Title to Assets; Security Interests. Leasco has
----------------------------------
good and marketable title to all its material properties and assets, except (a)
for minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties and assets for
their intended purposes and (b) that Vehicles covered by the Vehicle Title
Nominee Agreement are titled in the name of Old Ryder. Leasco enjoys beneficial
ownership of all such Vehicles titled in the name of Old Ryder pursuant to the
Vehicle Title Nominee Agreement. All material properties and assets of Leasco
are free and clear of Liens, other than Permitted Liens.
SECTION 8.17. No Material Misstatements. None of the Offering
-------------------------
Memorandum or any other information, report, financial statement, exhibit or
schedule furnished in writing by or on behalf of Leasco to Finco or the Agent in
connection with the negotiation of any Related Document or included therein or
delivered pursuant thereto (collectively, "information") contained, contains or
-----------
will contain any material misstatement of fact or omitted, omits or will omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were, are or will be made, not misleading,
provided that (a) the statements therein describing documents and agreements are
- --------
summaries only and as such are qualified in their entirety by reference to such
documents and agreements, (b) as to information therein that is specified as
having been supplied by persons other than Leasco or an Affiliate of Leasco, the
foregoing representation is limited to the knowledge of Leasco, (c) to the
extent any such information was based upon or constitutes a forecast or
projection, Leasco represents only that it acted in good faith and utilized
reasonable assumptions and due care in the preparation of such information and
(d) to the extent any such information was subsequently replaced, prior to the
date hereof, by other information expressly correcting such earlier information
(and either Finco or the Agent was expressly informed by or on behalf of Leasco
that such other information was correcting such earlier information), the
foregoing representation does not apply to such earlier information.
SECTION 8.18. Insurance. Schedule 8.18 sets forth a true,
---------
complete and correct description of all insurance maintained by or for Leasco as
of the date hereof and the Closing Date. As of each such date, such insurance is
in full force and effect and all premiums due and payable on the Closing Date
have been duly paid. Leasco has insurance in such amounts and covering such
risks and liabilities as are in accordance with normal industry practice.
-10-
<PAGE>
SECTION 8.19. Collateral Agreement. The Collateral Agreement is
--------------------
effective to create in favor of the Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest in the Loan
Collateral and, when financing statements in appropriate form are filed in the
offices specified in Schedule 8.19 hereto, the Collateral Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the grantors thereunder in such Loan Collateral, in each case
prior and superior in right to any other Person, other than with respect to any
Permitted Liens.
SECTION 8.20. No Property. Except as set forth on Schedule 8.20,
-----------
Leasco does not (a) own or lease any real property or (b) own or lease any
personal property (except for the Vehicles), in each case as of the Closing
Date.
SECTION 8.21. Burdensome Provisions. (a) Leasco is not a party to
---------------------
any agreement or instrument or subject to any corporate restriction that has
resulted or could reasonably be expected to result in a Material Adverse Effect.
(b) Leasco is not in default in any manner under any provision
of any indenture or other agreement or instrument evidencing Indebtedness, or
any other material agreement or instrument to which it is a party or by which it
or any of its properties or assets are or may be bound, where such default could
reasonably be expected to result in a Material Adverse Effect.
SECTION 8.22. Solvency. Immediately after the consummation of the
--------
Transactions to occur on the Closing Date and immediately following the making
of each Loan made on the Closing Date and after giving effect to the application
of the proceeds of such Loans, (i) the fair value of the assets of Leasco will
exceed its debts and liabilities, subordinated, contingent or otherwise; (ii)
the present fair saleable value of the property of Leasco will be greater than
the amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (iii) Leasco will be able to pay
its debts and liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured; and (iv) Leasco will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
SECTION 8.23. Ownership; Subsidiaries. (a) 100% of the common
-----------------------
stock of Leasco is owned by TRS and (b) Leasco has no Subsidiaries and owns no
capital stock of, or other interest in, any other Person.
SECTION 8.24. No Material Adverse Change. There has been no
--------------------------
material adverse change in the business, assets, operations, prospects,
condition, financial or otherwise, or material agreements of Leasco since March
31, 1997.
SECTION 8.25. Other Representations. All representations and
---------------------
warranties of Leasco made in each Related Document to which it is a party are
true and correct (in all material respects to the extent such representations
and warranties do not incorporate a materiality limitation in their terms) and
are repeated herein as though fully set forth herein.
SECTION 8.26. Capitalization. Leasco is capitalized with equity
--------------
or cash equal to or greater than $10,000,000.
-11-
<PAGE>
ARTICLE IX.
Affirmative Covenants
---------------------
Until the expiration or termination of the Loan Commitment and
thereafter until the Loan Note and all other Liabilities are paid in full,
Leasco agrees that, unless at any time Finco shall otherwise expressly consent
in writing, it will perform and comply with each of the following covenants.
SECTION 9.1. Corporate Existence; Foreign Qualification. (a)
------------------------------------------
Leasco will do and cause to be done at all times all things necessary to (i)
maintain and preserve its corporate existence and (ii) be duly qualified to do
business and in good standing as a foreign corporation in each jurisdiction
where the nature of its business makes such qualification necessary and the
failure to so qualify is reasonably likely to have a Material Adverse Effect and
(iii) comply with all Contractual Obligations and Requirements of Law binding
upon it, except to the extent that the failure to comply therewith is not
reasonably likely to, in the aggregate, have a Material Adverse Effect.
(b) Leasco will do or cause to be done all things necessary to
obtain, preserve, renew, extend and keep in full force and effect the rights,
licenses, permits, franchises, authorizations, contracts, patents, copyrights,
trademarks and trade names material to the conduct of its business; maintain and
operate such business in substantially the manner in which it is presently
conducted and operated (or in any manner reasonably incidental thereto); comply
in all material respects with all applicable laws, rules, regulations and
decrees and orders of any Governmental Authority, whether now in effect or
hereafter enacted; and at all times maintain and preserve all property material
to the conduct of such business and keep such property in good repair, working
order and condition and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.
SECTION 9.2. Books, Records and Inspections. Leasco will and will
------------------------------
cause its Subsidiaries to (a) keep proper books of record and account in which
full, true and correct entries in conformity with GAAP and all requirements of
law are made of all dealings and transactions in relation to its business
activities; (b) maintain complete and accurate books and records with respect to
the Loan Collateral; (c) at any time and from time to time during regular
business hours, upon reasonable prior notice from Finco or the Agent, permit
Finco or the Agent (or such other Person who may be designated from time to time
by Finco or the Agent), their agents and representatives to examine and make
copies of such books, records and documents in the possession or under the
control of Leasco relating to the Loan Collateral as Finco, the Agent or such
Person may reasonably request; and (d) permit Finco or the Agent to visit the
offices and properties of Leasco for the purpose of examining such materials,
and to discuss matters relating to the Loan Collateral or Leasco's performance
under this Agreement with Leasco's independent public accountants or with any of
the officers or employees of Leasco having knowledge of such matters; provided,
---------
however, that the business of Leasco and such Subsidiaries shall not be
- -------
unreasonably disrupted by any such visit, inspection or verification.
SECTION 9.3. Maintenance of Properties. (a) Leasco will maintain
-------------------------
or cause to be maintained in the ordinary course of business in good repair,
working order and condition (reasonable wear and tear excepted) all properties,
including vehicles necessary for the operation of its businesses, and from time
to time make or cause to be made all needed and appropriate repairs, renewals,
replacements, additions, betterments, and improvements thereto, except to the
extent no Material
-12-
<PAGE>
Adverse Effect is reasonably likely to result from the failure to do so and
good, legal and marketable title to all of its assets.
(b) Finco and the Agent, and such Persons as Finco and the
Agent may reasonably designate, shall have the right, at Leasco's own cost and
expense, to inspect the Vehicles and the premises upon which any of the Vehicles
are located (including Ryder Dealer locations), to verify under reasonable
procedures the validity, amount, quality, quantity, value, condition and status
of, or any other matter relating to, the Vehicles, including, in the case of
Vehicles in the possession of any third person (including Ryder Dealers), by
contacting such third person possessing such Vehicle or Vehicles for the purpose
of making such a verification; provided, however, that (i) so long as no Loan
-----------------
Event of Default shall have occurred and be continuing, there shall be no more
than one such inspection and verification by Finco or the Agent or such other
Persons in any fiscal quarter of Leasco and (ii) the business of Leasco and its
Subsidiaries shall not be unreasonably disrupted by any such inspection and
verification. Finco and the Agent shall have the absolute right to share any
information it gains from such inspection with any Secured Party.
SECTION 9.4. Insurance. Leasco will:
---------
(a) Keep the Vehicles adequately insured at all times by
financially sound and reputable insurers; maintain such other insurance, to such
extent and against such risks, including fire and other risks insured against by
extended coverage, as is customary with companies in the same or similar
businesses operating in the same or similar locations, including public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by it; and maintain such other insurance as may be
required by law; provided, however, that in the case of the Vehicles, Leasco may
-----------------
cause TRS to satisfy Leasco's obligations under this paragraph; provided,
--------
further, that notwithstanding anything to the contrary contained herein, Leasco
- -------
may cause TRS to satisfy its obligations hereunder through its current practices
of self insurance.
(b) Cause all such policies relating to the Vehicles to be
endorsed or otherwise amended to include a "standard" or "New York" lender's
loss payable endorsement, in form and substance satisfactory to Finco and the
Agent, which endorsement shall provide that, from and after the Closing Date, if
the insurance carrier shall have received written notice from Finco or the Agent
of the occurrence of a Lease Event of Default, the insurance carrier shall pay
all proceeds otherwise payable to Leasco under such policies directly to the
Collateral Account; cause all such policies to provide that, other than Leasco
or Finco, no other party shall be a coinsurer thereunder and to contain a
"Replacement Cost Endorsement", without any deduction for depreciation, and such
other provisions as Finco or the Agent may reasonably require from time to time
to protect their interests; deliver original or certified copies of all such
certificates of insurance to Finco and the Agent; cause each such policy to
provide that it shall not be canceled, modified or not renewed (i) by reason of
nonpayment of premium upon not less than 10 days' prior written notice thereof
by the insurer to Finco and the Agent (giving Finco and the Agent the right to
cure defaults in the payment of premiums) or (ii) for any other reason upon not
less than 30 days' prior written notice thereof by the insurer to Finco and the
Agent; deliver to Finco and the Agent, prior to the cancelation, modification or
nonrenewal of any such policy of insurance, a copy of a renewal or replacement
policy (or other evidence of renewal of a policy previously delivered to Finco
and the Agent) together with evidence satisfactory to Finco and the Agent of
payment of the premium therefor.
(c) Notify Finco and the Agent immediately whenever any separate
insurance concurrent in form or contributing in the event of loss with that
required to be maintained under this
-13-
<PAGE>
Section 9.04 is taken out by Leasco; and promptly deliver to Finco and the Agent
a duplicate original copy of such policy or policies.
(d) In connection with the covenants set forth in this Section
9.04, it is understood and agreed that:
(i) neither Finco nor the Agent or their respective agents or
employees shall be liable for any loss or damage insured by the
insurance policies required to be maintained under this Section 9.04, it
being understood that (A) Leasco shall look solely to its insurance
companies or any other parties other than the aforesaid parties for the
recovery of such loss or damage and (B) such insurance companies shall
have no rights of subrogation against Finco or the Agent or their agents
or employees. If, however, the insurance policies do not provide waiver
of subrogation rights against such parties, as required above, then
Leasco hereby agrees, to the extent permitted by law, to waive its right
of recovery, if any, against Finco and the Agent and their agents and
employees; and
(ii) the designation of any form, type or amount of insurance
coverage by Finco or the Agent under this Section 9.04 shall in no event
be deemed a representation, warranty or advice by Finco or the Agent
that such insurance is adequate for the purposes of the business of
Leasco or the protection of its properties and Finco and the Agent shall
have the right from time to time to require Leasco to keep other
insurance in such form and amount as Finco and the Agent or the Majority
Banks may reasonably request, provided that such insurance shall be
obtainable on commercially reasonable terms.
(iii) Leasco irrevocably makes, constitutes and appoints the
Agent (and all officers, employees or agents designated by the Agent) as
Leasco's true and lawful agent (and attorney-in-fact) for the purpose,
during the continuance of a Lease Event of Default, of making, settling
and adjusting claims in respect of the Vehicles under policies of
insurance, endorsing the name of Leasco on any check, draft, instrument
or other item of payment for the proceeds of such policies of insurance
and for making all determinations and decisions with respect thereto. In
the event that Leasco at any time or times shall fail to obtain or
maintain any of the policies of insurance required hereby or to pay any
premium in whole or part relating thereto, Finco or the Agent may,
without waiving or releasing any obligation or liability of Leasco
hereunder or any Lease Event of Default, in its sole discretion, obtain
and maintain such policies of insurance and pay such premium and take
any other actions with respect thereto as the Agent deems advisable. All
sums disbursed by the Agent in connection with this Section 9.04,
including reasonable attorneys' fees, court costs, expenses and other
charges relating thereto, shall be payable, upon demand, by Leasco to
the Agent and shall be additional payment obligations under this
Agreement.
SECTION 9.5. Reporting Requirements. Leasco will furnish, or,
----------------------
under and in accordance with the Lease with respect to information regarding
TRS, cause TRS to furnish, Finco, the Agent and each Rating Agency:
(a) within 90 days after the end of each fiscal year of TRS, the
consolidated and combined balance sheet and related statements of income,
stockholders' equity and cash flows showing the financial condition of TRS and
its consolidated Subsidiaries as of the close of such fiscal year and the
results of its operations and the operations of such Subsidiaries during such
year, all audited by Coopers & Lybrand LLP or other independent public
accountants of recognized national standing and accompanied by an opinion of
such accountants (which shall not be qualified in any material respect) to
-14-
<PAGE>
the effect that such consolidated financial statements fairly present the
financial condition and results of operations of TRS and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied; provided, however, that such financial statements will contain
footnotes or other information to the effect that: (i) Leasco's business
consists of the purchase and lease of vehicles; (ii) Finco's business consists
of the issuance of commercial paper notes and the making of loans to Leasco;
(iii) each of Leasco and Finco is a separate corporate entity with its own
separate creditors which, upon its liquidation, will be entitled to be satisfied
out of Leasco's or Finco's assets, as the case may be, prior to any value in
Leasco or Finco, as the case may be, becoming available to Leasco's or Finco's
equity holders, as the case may be.
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of TRS, the consolidated and combined
balance sheet and related statements of income, stockholders' equity and cash
flows showing the financial condition of TRS and its consolidated Subsidiaries
as of the close of such fiscal quarter and the results of its operations and the
operations of such Subsidiaries during such fiscal quarter and the then elapsed
portion of the fiscal year, all certified by one of its Financial Officers as
fairly presenting the financial condition and results of operations of TRS and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments;
(c) within 30 days after the end of each of the first two months
of each fiscal quarter, the consolidated and combined balance sheet and related
statements of income, stockholders' equity and cash flows showing the financial
condition of TRS and its consolidated Subsidiaries as of the close of such month
and the results of its operations and the operations of such Subsidiaries during
such month and the then elapsed portion of the fiscal year, all certified by one
of its Financial Officers as fairly presenting the financial condition and
results of operations of TRS and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments;
(d) concurrently with any delivery of financial statements under
sub-paragraph (a), (b) or (c) above, a certificate of the accounting firm or
Financial Officer opining on or certifying such statements (which certificate,
when furnished by an accounting firm, may be limited to accounting matters and
disclaim responsibility for legal interpretations) (i) certifying that no Loan
Event of Default has occurred or, if such a Loan Event of Default has occurred,
specifying the nature and extent thereof and any corrective action taken or
proposed to be taken with respect thereto and (ii) with respect to the financial
statements delivered under sub-paragraph (a) or (b) above, setting forth
computations in reasonable detail satisfactory to the Agent demonstrating
whether or not there has been compliance with the covenants contained in Section
23.4 of the Lease;
(e) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials filed by
TRS or any of its Subsidiaries with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed to its
shareholders, as the case may be;
(f) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of TRS or any of its
Subsidiaries, as Finco or the Agent may reasonably request.
(g) promptly after becoming aware thereof, (i) notice of the
occurrence of any Potential Loan Event of Default or Loan Event of Default,
together with a written statement of an
-15-
<PAGE>
Authorized Officer of TRS describing such event and the action Leasco proposes
to take with respect thereto, and (ii) notice of any Potential Lease Event of
Default or Lease Event of Default;
(h) on or before each Determination Date, a monthly statement
(each, a "Monthly Vehicle Statement") in the form attached as Exhibit F hereto
and a Monthly Report in the Form attached as Exhibit C hereto;
(i) promptly after obtaining actual knowledge thereof, notice of
any Manufacturer Ineligibility Event;
(j) promptly after becoming aware thereof, prompt written notice
of (i) any Lease Event of Default, specifying the nature and extent thereof and
the corrective action (if any) taken or proposed to be taken with respect
thereto, (ii) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or proceeding,
whether at law or in equity or by or before any Governmental Authority, against
TRS or any of its Affiliates that could reasonably be expected to result in a
Material Adverse Effect, and (iii) any development that has resulted in, or
could reasonably be expected to result in, a Material Adverse Effect;
(k) for each fiscal quarter of TRS, (i) by the first date
following the end of such fiscal quarter by which TRS is required to deliver the
information described in item (a) or (b) above, an Officer's Certificate
addressed to Leasco from a duly authorized financial officer of TRS certifying
that TRS is in compliance with its covenants set forth in Section 23.4 of the
Lease with respect to the period ending on the last day of such fiscal quarter
and specifying the method of calculation used in determining such compliance and
(ii) those reports required to be delivered by TRS to Leasco pursuant to Section
12.5 of the Lease; and
(l) promptly, from time to time, such other information,
documents, or reports respecting the Vehicles or the other Loan Collateral or
the condition, financial or otherwise, or operations of TRS as Finco or the
Agent may from time to time reasonably request in order to protect the interests
of Finco or the Agent under or as contemplated by this Loan Agreement or any
other Related Document.
SECTION 9.6. Taxes and Obligations. Leasco will pay its
---------------------
Indebtedness and other obligations promptly and in accordance with their terms
and pay and discharge promptly when due all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or in respect of
its property, before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise that, if
unpaid, might give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required with
- -------- -------
respect to any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and Leasco shall have set aside on its books adequate reserves with
respect thereto in accordance with GAAP and such contest operates to suspend
collection of the contested obligation, tax, assessment or charge and
enforcement of a Lien.
SECTION 9.7. Protection from Liens. Leasco will, at its own cost
---------------------
and expense and as Finco's Agent, take or cause to be taken any and all actions
necessary to defend title to each of the Vehicles against all Persons and, at
Finco's request and as Finco's agent, defend the Security Interest of the Agent
in the Vehicles and the priority thereof against any Lien other than Permitted
Liens.
-16-
<PAGE>
SECTION 9.8. Maintenance of the Vehicles. Leasco will maintain
---------------------------
and cause all of the Vehicles to be maintained in good repair, working order,
and condition.
SECTION 9.9. Maintenance of Separate Existence. Leasco will do
---------------------------------
all things necessary to maintain its corporate existence separate and apart from
that of TRS and Affiliates of TRS as described in that certain opinion letter
issued by Willkie Farr & Gallagher in the form of Exhibit D attached hereto and
dated as of the Closing Date addressing the issue of substantive consolidation
as it may relate to Leasco and TRS. Leasco acknowledges its receipt of such copy
of that certain opinion letter issued by Willkie Farr & Gallagher and hereby
agrees to maintain in place all policies and procedures, and take and continue
to take all action, described in the factual assumptions set forth in such
opinion letter and relating to Leasco.
SECTION 9.10. Proceeds. Leasco will (a) cause all payments with
--------
respect to any Loan Collateral to be made directly to the Collateral Account (or
as otherwise directed by Leasco, with the prior written consent of the Agent);
and (b) in the case of any such payments with respect to any Loan Collateral
received directly by Leasco, deposit all such payments in the Collateral Account
by the second Business Day following (i) in the case of a sale by a corporation
on behalf of Leasco whose short-term debt has been assigned a rating of at least
A-1 and Prime-1 by S&P and Moody's, respectively, receipt of such payments by
Leasco; provided, however, that under all circumstances all such payments shall
-------- -------
be deposited into the Collateral Account prior to the expiration of 30 days
after the date on which such corporation receives such funds, and (ii) in the
case of a sale by any other Person on behalf of Leasco, the date upon which the
Certificate of Title with respect to such Vehicle is transferred by Leasco or
TRS (as Leasco's agent) to such Person.
SECTION 9.11. Vehicle Titles Check. (a) Leasco will take all
--------------------
actions necessary to ensure that TRS has filed and recorded all documents, and
taken all actions necessary to title, register and maintain the title and
registration of each Vehicle pursuant to Section 12 of the Lease.
(b) No more than once semi-annually, upon the request of Finco
or the Agent, Leasco will cause a title check of a representative or random
sample of titles (such random sample to be compiled taking into account the
multiple locations at which the Certificates of Title with respect to the
Vehicles are held by the Custodian) by a Person acceptable to the Agent on a
reasonable number (but in no event less than 2%) of the Vehicles (other than
Initial Vehicles subject to the Vehicle Title Nominee Agreement), including
verification that the titles reflect the pledge to the Agent, and shall prepare
a report of exceptions with the results of such title check and cause such
report to be furnished to the Agent, with a copy for Finco, and the Rating
Agencies.
(c) If (i) any such title check reveals that 5% of such sample
does not comply with the requirement that (A) the Agent be noted as the first
lienholder on such titles or (B) Leasco be listed as the registered owner on
such titles or (ii) a Potential Loan Event of Default has occurred and is
continuing, then upon the request of Finco or the Agent, Leasco will cause
additional title checks to be performed (at Leasco's expense) on a reasonable
number of the Vehicles (other than Initial Vehicles subject to the Vehicle Title
Nominee Agreement).
SECTION 9.12. Collateral Agreement. Concurrently with each
--------------------
financing of a Vehicle under this Agreement, Leasco shall indicate on its
computer records that the Agent as assignee of Finco is the holder of a Lien on
such Vehicle for the benefit of the Secured Parties pursuant to the terms of the
Collateral Agreement.
-17-
<PAGE>
SECTION 9.13. Compliance with Laws. Leasco (a) shall not violate
--------------------
any law, ordinance, rule, regulation (including ERISA and the rules and
regulations thereunder) or order of any Governmental Authority applicable to it
or its property, which violation is reasonably likely to have a Material Adverse
Effect, (b) shall file in a timely manner all reports, documents and other
materials required to be filed by it with any governmental bureau, agency or
instrumentality, except where failure to make such filings is not reasonably
likely to have a Material Adverse Effect and (c) shall retain all records and
documents required to be retained by it pursuant to any Requirement of Law,
except where failure to retain such records is not reasonably likely to have a
Material Adverse Effect.
SECTION 9.14. Delivery of Information. Leasco shall provide Finco
-----------------------
with any information or materials necessary for Finco to comply with its
obligations under the Liquidity Agreement.
SECTION 9.15. Restrictions. Leasco agrees that, except as
------------
otherwise approved by the Majority Banks and upon receipt of written
confirmation by each of the Rating Agencies that such action will not result in
the downgrading or withdrawal of the then current ratings of the Commercial
Paper Notes, (a) Vehicles representing at least 70% of the Net Book Value of the
Fleet will have been, at any time, manufactured (to the extent of the chassis)
by either GM or Ford, (b) Vehicles representing not more than 30% of the Net
Book Values of the Fleet will have been, at any time, manufactured (to the
extent of the chassis) by any of Navistar International Transportation Company,
Isuzu Motors Limited, Chrysler Corporation or Freightliner Corporation and (c)
Vehicles representing not more than 10% of the Net Book Value of the Fleet will
have been, at any time, manufactured (to the extent of the chassis) by Isuzu
Motors Limited.
SECTION 9.16. Cash Audit. At the request of Finco, or the Agent,
----------
Leasco shall cause a semi-annual retroactive cash analysis to be performed by
nationally recognized independent auditors with respect to at least fifty
Vehicles (each such fifty Vehicles to be a random sample compiled taking into
account the multiple locations at which Vehicles are located) sold in each month
during such semi-annual period, verifying that proceeds from such sales have
been deposited into the Collateral Account in accordance with Section 9.10
hereof, and shall cause such auditors to prepare a report of exceptions to be
delivered to the Agent with a copy for Finco, and the Rating Agencies.
SECTION 9.17. Compliance with Covenants. Leasco will comply with
-------------------------
each covenant made by it and contained in any Related Document to which it is a
party (subject to the applicable materiality provisions and grace periods set
forth therein).
SECTION 9.18. Payment of Obligations. Leasco will (a) pay its
---------------------
Indebtedness and other obligations in accordance with their terms and (b) pay
and discharge when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property, in
each case before the same shall become delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise that, if unpaid,
might give rise to a Lien upon such properties or any part thereof; provided,
--------
however, that such payment and discharge shall not be required with respect to
- -------
any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings and
Leasco shall have set aside on its books adequate reserves with respect thereto
in accordance with GAAP and such contest operates to suspend collection of the
contested obligation, tax, assessment or charge and enforcement of a Lien.
SECTION 9.19. Employee Benefits. Leasco will (a) comply in all
-----------------
material respects with the applicable provisions of ERISA, the Code and the
regulations and published interpretations
-18-
<PAGE>
thereunder with respect to Plans and Multiemployer Plans and (b) furnish to the
Agent as soon as possible after, and in any event within 10 days after any
Responsible Officer of the Leasco or any of its ERISA Affiliates knows or has
reason to know that, any ERISA Event has occurred that, alone or together with
any other ERISA Event could reasonably be expected to result in a Material
Adverse Effect, a statement of an Authorized Officer of Leasco setting forth
details as to such ERISA Event and the action, if any, that Leasco proposes to
take with respect thereto.
SECTION 9.20. Certificates of Title. Leasco will take or cause to
---------------------
be taken, such action as shall be necessary to submit all of the Certificates of
Title to the appropriate state authority for notation of the Agent's lien
thereon.
ARTICLE X.
Negative Covenants
------------------
Until the expiration or termination of the Loan Commitment and
thereafter until the Loan Note and all other Liabilities are paid in full,
Leasco agrees that, unless at any time Finco shall otherwise expressly consent
in writing, it will comply with the following covenants.
SECTION 10.1. Mergers, Consolidations. Leasco will not, except as
-----------------------
may be permitted by the express written approval of Finco and the Agent and upon
the receipt of written confirmation of the Rating Agencies that such action will
not result in the downgrading or withdrawal of the then current ratings on the
Commercial Paper Notes, merge with or into or consolidate with, any other
Person.
SECTION 10.2. Regulations G, T, U and X. Leasco will not use or
-------------------------
permit any proceeds of the Loans to be used, either directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of "purchasing or
carrying margin stock" within the meaning of Regulations G, T, U and X of the
Board of Governors of the Federal Reserve System, as amended from time to time.
SECTION 10.3. Liens. Leasco will not create, incur, assume or
-----
permit to exist any Lien with respect to any Loan Collateral now or hereafter
existing or acquired, except for Liens created by or permitted under the Related
Documents.
SECTION 10.4. Use of Vehicles. Leasco will not use or
---------------
contractually permit the Vehicles to be used in any manner (i) for any illegal
purposes or (ii) that could subject the vehicles to confiscation.
SECTION 10.5. Other Indebtedness. Leasco will not create, assume,
------------------
incur, suffer to exist or otherwise become or remain liable in respect of any
Indebtedness, other than (i) Indebtedness incurred under the Related Documents
and (ii) other Indebtedness incurred in connection with which, in each case, (a)
each Ratings Agency shall have notified Leasco, Finco and the Liquidity Bank in
writing that such action will not result in the downgrading or withdrawal of the
then current ratings of the Commercial Paper Notes by such Rating Agencies, (b)
each party to which Leasco will have any obligation in connection with such
Indebtedness covenants in writing for the benefit of Leasco, Finco and the
Agent, that, prior to the date which is one year and one day after the payment
in full of all obligations of Leasco in connection with such Indebtedness, it
will not institute against, or join any other Person in instituting against,
Leasco or any of its Affiliates any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of any jurisdiction, (c) Leasco has obtained the written consent of Finco and
(d) each party to which Leasco
-19-
<PAGE>
will have any obligation in connection with such Indebtedness covenants in
writing for the benefit of Leasco, Finco and the Agent, that such Indebtedness
is without recourse to the Loan Collateral.
SECTION 10.6. Restrictions on Distributions; Affiliated
-----------------------------------------
Transactions. Leasco will not (a), if any Loan Event of Default or Potential
- ------------
Loan Event of Default has occurred and is continuing, declare or pay any
dividends on any shares of its capital stock or make any other distribution on,
or any purchase, redemption or other acquisition of, any shares of its capital
stock, (b) except in the ordinary course of business, pay any wages or salaries
or other compensation to officers, directors, employees or others or (c) except
as contemplated by the Related Documents, sell or transfer property to, or
purchase or acquire property from or otherwise engage in any transactions with,
any of its Affiliates, except that Leasco engage in any of the foregoing
transactions in the ordinary course of business at prices and on terms and
conditions no less favorable to Leasco than could be obtained on an arm's-length
basis from unrelated third parties.
SECTION 10.7. Sales of Assets. Leasco will not sell, lease,
---------------
transfer, liquidate or otherwise dispose of any Assets, except as contemplated
by the Related Documents and provided that the proceeds thereof are paid
directly to the Collateral Account.
SECTION 10.8. Acquisition of Assets. Leasco will not acquire, by
---------------------
long-term or operating lease or otherwise, any Assets, except as contemplated by
the Related Documents.
SECTION 10.9. Name; Chief Executive Office. Leasco will neither
----------------------------
(i) change the location of its chief executive office (within the meaning of the
UCC) without 60 days' prior notice to Finco, the Agent and each Rating Agency
nor (ii) change its name without prior notice to Finco, the Agent and each
Rating Agency sufficient to allow the Agent to make all filings (including
filings of financing statements on form UCC-1) and recordings necessary to
perfect the interest of the Agent in the Loan Collateral pursuant to the
Collateral Agreement.
SECTION 10.10. Organic Documents. Leasco will not amend any of
-----------------
its Organic Documents without the written consent of Finco, the Agent and the
Majority Banks, which shall not be unreasonably withheld, and without having
received written confirmation of the then current ratings of the Commercial
Paper Notes from each of the Rating Agencies.
SECTION 10.11. Investments. Leasco will not make, incur, or
-----------
suffer to exist any loan, advance, extension of credit to, guarantee on behalf
of or other investment in, any Person other than (i) pursuant to or as permitted
by the Related Documents or (ii) in connection with Eligible Investments.
SECTION 10.12. No Other Agreements; Amendments to Related
------------------------------------------
Documents. Leasco will not, without the prior written consent of Finco, the
- ---------
Agent and the Ratings Agencies, (i) enter into or be a party to any material
agreement or instrument other than any Related Document or documents and
agreements incidental thereto or (ii) amend, modify, waive or give any approval,
consent or permission under, any provision of any Related Document to which it
is a party other than such amendments that relate to minor administrative
matters that do not amend or modify (A) the amount or timing of any payments (or
priorities for payments) to be made under the Related Documents, (B) any rights
in the Loan Collateral (or any priorities or rights or restrictions on
encumbrances with respect thereto), or (C) any prohibition or restriction on the
incurrence of any Indebtedness under the Related Documents.
-20-
<PAGE>
SECTION 10.13. Obligations of Leasco. Leasco will (a) not take
---------------------
any action which would reasonably be expected to result in TRS or any Affiliate
of TRS having a right to refuse to perform any of its obligations under any of
the Related Documents and (b) promptly notify Finco upon learning of the
occurrence of a Lease Event of Default or Potential Lease Event of Default.
SECTION 10.14. Manufacturer Bankruptcy. Following an Event of
-----------------------
Bankruptcy with respect to an Eligible Chassis Manufacturer, Leasco will refrain
from placing any Vehicle Order with such Manufacturer.
SECTION 10.15. Business. Leasco will not engage in any business
--------
or enterprise or enter into any transaction other than the acquisition,
ownership, leasing and sale of Vehicles.
ARTICLE XI.
Conditions
----------
SECTION 11.1. Initial Loans. The effectiveness of this Agreement
-------------
and the obligation of Finco to make the initial Loans shall be subject to the
prior or concurrent delivery of each of the following documents (in form and
substance satisfactory to Finco):
(a) Loan Note. A Loan Note duly executed by Leasco.
---------
(b) Certificate of Incorporation. The certificate of
----------------------------
incorporation of Leasco, duly certified by the Secretary of State of the
jurisdiction of its incorporation, together with a copy of its By-laws, duly
certified by the Secretary of Leasco.
(c) Resolutions. Copies of resolutions of the Board of Directors
-----------
of Leasco authorizing or ratifying the execution, delivery and performance of
those documents and matters required of it with respect to this Agreement, duly
certified by the Secretary of Leasco.
(d) Consents, etc. Certified copies of all documents evidencing
-------------
any necessary corporate action, consents and governmental approvals (if any)
with respect to this Agreement.
(e) Incumbency and Signatures. A certificate of the Secretary of
-------------------------
Leasco certifying the names of the individual or individuals authorized to sign
this Agreement and the other Related Documents to be executed by it, together
with a sample of the true signature of each such individual (Finco and the Agent
may conclusively rely on each such certificate until formally advised by a like
certificate of any changes therein).
(f) Opinions of Counsel. The opinion of Willkie, Farr and
-------------------
Gallagher, counsel for Leasco, addressed to Finco, the Agent, the Liquidity
Agent, the Depositary, the Dealers and the Rating Agencies substantially in the
form of Exhibit D hereto.
(g) Good Standing Certificates. Certificates of good standing for
--------------------------
Leasco in the jurisdiction of its organization and the jurisdiction of its
principal place of business.
(h) Search Reports. A written search report from a Person
--------------
satisfactory to Finco and the Agent listing all effective financing statements
that name Leasco as debtor or assignor and that are filed in the jurisdictions
in which filings were made pursuant to subsection (i) below, together with
copies of such financing statements, and tax and judgment lien search reports
from a Person satisfactory to Finco and the Agent showing no evidence of such
Liens filed against Leasco.
-21-
<PAGE>
(i) Evidence. Evidence (which may be telephonic) of the filing of
--------
proper financing statements on Form UCC-1, naming Leasco as debtor, the Agent as
secured party and assignee or other, similar instruments or documents, as may be
necessary or, in the reasonable opinion of Finco and the Agent, desirable under
the UCC of all applicable jurisdictions to perfect the Agent's interest in the
Loan Collateral.
(j) Collateral Agreement. An executed copy of the Collateral
--------------------
Agreement substantially in the form of Exhibit D hereto.
(k) No Material Adverse Change. A certificate of the Chief
--------------------------
Financial Officer of Leasco certifying that (i) since December 31, 1996, there
has been no material adverse change in the financial condition, business or
results of operations of Leasco and (ii) as of the Closing Date, the
representations and warranties contained in Article VIII are true and correct in
all material respects, to the extent any such representations and warranties do
not incorporate a materiality limitation in their terms, and to the extent that
such representations and warranties do incorporate a materiality limitation in
their terms, are true and correct in all respects.
(l) Vehicle Title Nominee Agreement. An executed copy of the
-------------------------------
Vehicle Title Nominee Agreement substantially in the form of Exhibit E hereto.
(m) Capitalization of Leasco. Evidence, in form and substance
------------------------
reasonably satisfactory to the Liquidity Agent and the Agent, that as of the
Loan Closing Date, Leasco has been capitalized with equity in cash equal to or
greater than $10,000,000.
(n) Vehicle Acquisition Schedule. The Vehicle Acquisition
----------------------------
Schedule with respect to the Initial Vehicles.
(o) Other. Such other documents as the Agent or Finco may
-----
reasonably request.
SECTION 11.2. All Loans. All Loans (including the initial Loan)
---------
shall be subject to the further conditions precedent that Finco or the Agent
shall have received a completed Loan Request therefor and on the date of such
Loan, the following statements shall be true (and Leasco, by accepting the
amount of such Loan, shall be deemed to have represented and warranted that):
(a) the representations and warranties contained in Article VIII
are true and correct (in all material respects to the extent any such
representations and warranties do not incorporate a materiality limitation in
their terms) on and as of such date with the same effect as though made on and
as of such date and shall be deemed to have made on such date; and
(b) no Potential Loan Event of Default or Loan Event of Default
has occurred and is continuing nor would result from the making of such Loan or
from the application of the proceeds of such Loan.
(c) the Enhancement Test Percentage shall be equal to or greater
than the Required Enhancement Percentage.
ARTICLE XII.
Loan Events of Default and Their Effect
---------------------------------------
-22-
<PAGE>
SECTION 12.1. Loan Events of Default. Each of the following shall
----------------------
constitute a Loan Event of Default under this Agreement:
(a) Non-Payment of Loans. Failure by Leasco to (i) make a payment
--------------------
or prepayment of any principal amount of any Loan within two Business Days of
the date on which such payment or prepayment is due or (ii) make a payment of
any interest on any Loan, any fees or any other amount payable hereunder within
five Business Days after the earlier of (x) the date Finco delivers written
notice thereof to Leasco or (y) the date a Responsible Officer of Leasco has
knowledge thereof.
(b) Bankruptcy, Insolvency, etc. The occurrence of an Event of
---------------------------
Bankruptcy with respect to Leasco.
(c) Non-Compliance With Provisions. Failure by Leasco to comply
------------------------------
with any provision of or perform any obligation on its part to be performed or
observed under this Agreement (and not constituting a Loan Event of Default
under any of the other provisions of this Section 12.01) other than Section
10.05 hereof and the continuance of such failure for 10 days after written
notice thereof from Finco to Leasco or after actual knowledge thereof by Leasco.
(d) Warranties and Representations. (i) Any warranty or
------------------------------
representation made by Leasco in this Agreement is incorrect in any material
respect (to the extent that any such warranty or representation does not
incorporate a materiality limitation in its terms) as of the date such warranty
or representation is made and continues to be incorrect in any material respect
(to the extent that any such warranty or representation does not incorporate a
materiality limitation in its terms) for a period of 30 days after the earlier
of (A) the date on which written notice thereof shall have been given to Leasco
by Finco and (B) the date on which Leasco obtains actual knowledge thereof; or
(ii) any schedule, certificate, financial statement, report, notice, or other
material writing furnished by Leasco to Finco is false or misleading in any
material respect on the date as of which the facts therein set forth are stated
or certified and continues to be incorrect in any material respect for a period
of 10 days after the earlier of (A) the date on which written notice thereof
shall have been given to Leasco by Finco and (B) the date on which Leasco
obtains actual knowledge thereof.
(e) [Reserved].
-----------
(f) Change in Control. The occurrence of a Change in Control.
------------------
(g) Judgments Against Leasco. If one or more final judgments
------------------------
shall be entered by any court or courts against Leasco for the payment of money
which exceed $1,000,000 in the aggregate which are not fully covered by
insurance or by reserves shown on the financial statements of Leasco and its
Consolidated Subsidiaries which have been delivered to Finco and the Agent in
accordance herewith; or a warrant of attachment or execution or similar process
shall be issued or levied against property of Leasco which, together with all
other such property of Leasco subject to other such process, exceeds in value
$1,000,000 in the aggregate, and if, within 30 days after the entry, issue or
levy thereof, such judgment, warrant or process shall not have been paid or
discharged or stayed pending appeal, or if, after the expiration of any such
stay, such judgment, warrant or process shall not have been paid or discharged.
(h) Defaults on Other Indebtedness. If there shall occur any
------------------------------
default under any indenture, agreement or instrument evidencing or securing
Indebtedness of Leasco in an aggregate principal amount of $1,000,000 or more as
a result of which payment of such Indebtedness shall have become due prior to
its stated maturity.
-23-
<PAGE>
(i) Invalidity of Related Documents. If all or any portion of any
-------------------------------
Related Document (other than the Dealer Agreement) shall at any time and for any
reason be declared to be null and void, or a proceeding shall be commenced by
Leasco, or by any governmental authority having jurisdiction over Leasco,
seeking to establish the invalidity or unenforceability thereof (exclusive of
questions of interpretation of any provision thereof).
(j) Lease Event of Default. The occurrence of a Lease Event
-----------------------
of Default.
SECTION 12.2. Effect of Loan Event of Default or Liquidation
----------------------------------------------
Event of Default. If any Loan Event of Default described in Section 12.01(b) or
- ----------------
any Liquidation Event of Default shall occur, the Loan Commitment (if not
theretofore terminated) shall immediately terminate and in the case of any other
Loan Event of Default, Amortization Event, Limited Amortization Event, Potential
Amortization Event or Potential Limited Amortization Event, Finco may declare
its Loan Commitment (if not theretofore terminated) to be terminated, whereupon
it shall immediately terminate and, if no Commercial Paper Notes are
Outstanding, may declare the Loan Note and all other Liabilities to be due and
payable, whereupon the Loan Note shall become immediately due and payable.
SECTION 12.3. Rights of Agent Upon Liquidation Event of Default
-------------------------------------------------
and Non-Performance of Certain Covenants. (a) If a Liquidation Event of Default
- ----------------------------------------
shall have occurred and be continuing, Finco and the Agent, to the extent
provided in the Collateral Agreement, shall have all the rights against Leasco
and the Loan Collateral provided in the Collateral Agreement, including the
right to take (under the specified circumstances) possession of all Vehicles (in
accordance with the provisions of the Lease) immediately. Upon a default in the
performance (after giving effect to any grace periods provided herein) by Leasco
of its obligations under Section 7.05 or 9.12 hereof with respect to certain
Vehicles, Finco and the Agent shall have the right to take actions reasonably
necessary to correct such default with respect to the subject Vehicles including
the execution of UCC financing statements and other general intangibles and the
completion of Vehicle Perfection and Documentation Requirements on behalf of
Leasco or Finco, as applicable.
(b) Upon the occurrence of a Liquidation Event of Default,
Finco and the Agent shall have all of the rights, remedies, powers, privileges
and claims vis-a-vis Leasco, necessary or desirable to allow the Agent to
exercise the rights, remedies, powers, privileges and claims given to the Agent
pursuant to Sections 4.03, 6.01 and 6.02 of the Collateral Agreement and Leasco
acknowledges that it has hereby granted Finco and the Agent all of the rights,
remedies, powers, privileges and claims granted to the Agent pursuant to Article
VI of the Collateral Agreement and that, under certain circumstances set forth
in the Collateral Agreement, the Agent may act in lieu of Finco in the exercise
of such rights, remedies, powers, privileges and claims.
(c) If a Liquidation Event of Default shall occur, Leasco shall
sell all Vehicles, to generate proceeds sufficient to pay all interest on and
principal of the Loans, in accordance with the instructions of the Agent on
behalf of the Secured Parties; provided, however, that until such time that no
----------------
Commercial Paper Notes are Outstanding, the number of Vehicles sold or disposed
of during any month shall not exceed the Fleet Disposition Limit unless the
aggregate Disposition Proceeds from such sales or dispositions exceeds the
aggregate Net Book Value of all Vehicles sold or disposed of during such month
(such Net Book Value to be measured for each Vehicle as of the date such Vehicle
was sold or disposed of).
SECTION 12.4. Application of Proceeds. The proceeds of any sale
-----------------------
or other disposition pursuant to Section 12.03 shall be applied in the following
order: (a) to the reasonable costs and expenses incurred by Finco or its agent
in connection with such sale or disposition, including
-24-
<PAGE>
any reasonable costs associated with repairing any Vehicles, and reasonable
attorneys' fees in connection with the enforcement of this Agreement; (b) to the
payment of accrued interest and outstanding principal of the Loans, and all
other amounts due hereunder; and (c) any remaining amounts to Leasco or such
Person as may be lawfully entitled thereto.
ARTICLE XIII.
General
-------
SECTION 13.1. Waiver; Amendments. (a) No delay on the part of
------------------
Finco or the holder of the Loan Note or other Liabilities in the exercise of any
right, power or remedy shall operate as a waiver thereof, nor shall any single
or partial exercise by any of them of any right, power or remedy preclude other
or further exercise thereof, or the exercise of any other right, power or
remedy. No amendment, modification or waiver of, or consent with respect to, any
provision of this Agreement or the Loan Note shall in any event be effective
unless (i) the same shall be in writing and signed and delivered by Finco and
Leasco and consented to in writing by the Agent and (ii) Finco shall have
received in writing confirmation from each of the Rating Agencies that its then
current rating of the Commercial Paper Notes will not be reduced or withdrawn as
a result thereof; provided, however, that any amendment or modification of the
-----------------
Loan Note need only be signed by Leasco.
(b) Notwithstanding the foregoing paragraph (a) of this
Section 13.01, Finco and Leasco may, at any time and from time to time, without
the consent of the Agent, enter into any amendment, supplement or other
modification to this Agreement to cure any apparent ambiguity or to correct or
supplement any provision in this Agreement that may be inconsistent with any
other provision herein; provided, however, that (i) any such action shall not
-----------------
have a material adverse effect on the interest of the Liquidity Lenders and (ii)
a copy of any such amendment, supplement or other modification is furnished to
the Agent in accordance with the notice provisions hereof not later than ten
days prior to the execution thereof by Finco and Leasco.
SECTION 13.2. Confirmations. Leasco and Finco (or the holder of
-------------
the Loan Note) agree from time to time, upon written request received by it from
the other, to confirm to the other in writing the aggregate unpaid principal
amount of the Loans then outstanding under the Loan Note.
SECTION 13.3. Notices. All notices, amendments, waivers, consents
-------
and other communications provided to any party hereto under this Agreement shall
be in writing and addressed, delivered or transmitted to such party at its
address or facsimile number set forth below its signature hereto 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 transmitted upon receipt of electronic confirmation of
transmission.
SECTION 13.4. Costs, Expenses and Taxes. (a) Leasco agrees to pay
-------------------------
within five Business Days of demand all, out-of-pocket costs, fees and expenses
of Finco (including the reasonable fees and out-of-pocket expenses of counsel
for Finco) in connection with the preparation, execution, delivery and
performance of this Agreement and all other Related Documents, including costs
and expenses payable by Finco (i) pursuant to Sections 4.02(a), 4.05, 5.03,
5.04, 5.05, 5.06, 8.01(c) and 11.03 of the Liquidity Agreement, (ii) pursuant to
Section 9.05 of the Collateral Agreement, (iii) pursuant to Section 10 of the
Dealer Agreement, (iv) pursuant to Section 8 of the Depositary Agreement and (v)
pursuant to Section 6 of the Custody Agreement.
-25-
<PAGE>
(b) Leasco further agrees to pay all out-of-pocket costs and
expenses (including reasonable attorneys' fees and legal expenses) incurred by
Finco in connection with the administration, enforcement, waiver or amendment of
this Agreement, and any other Related Document. Leasco further agrees to pay
within five Business Days of demand, and to save Finco harmless from any
indemnities payable by Finco under any of the Related Documents, including those
indemnities payable pursuant to (i) Section 11.04 of the Liquidity Agreement,
(ii) Section 9.05 of the Collateral Agreement, (iii) Section 9 of the Dealer
Agreement and (iv) Section 8 of the Depositary Agreement.
(c) In addition, Leasco agrees to pay within five Business Days
of demand, and to save the Agent and Finco harmless from all liability for, any
document, stamp, filing, recording, mortgage or other taxes (other than net
income taxes of Finco) which may be payable in connection with the borrowings
hereunder or the execution, delivery, recording or filing of this Agreement or
of any other instruments or documents provided for herein or delivered or to be
delivered hereunder or in connection herewith.
All obligations provided for in this Section 13.04 shall survive
any termination of this Agreement.
SECTION 13.5. Indemnification. In consideration of Finco's
---------------
execution and delivery of this Agreement and Finco's extension of the Loan
Commitment, Leasco hereby agrees to indemnify, exonerate and hold Finco and its
officers, directors, stockholders and employees (herein collectively called
"Finco Parties" and individually called a "Finco Party") free and harmless from
and against any and all claims, demands, actions, causes of action, suits,
losses, costs (including all documentary, recording, filing, or other stamp
taxes or duties), charges, liabilities, damages, and expenses in connection
therewith (irrespective of whether such Finco Party is a party to the action for
which indemnification hereunder is sought), and including reasonable attorneys'
fees and disbursements (called in this paragraph the "Indemnified Liabilities"),
incurred by the Finco Parties or any of them as a result of, or arising out of,
or relating to (a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan or involving any
Loan, or (b) the execution, delivery, performance or enforcement of this
Agreement and any instrument, document or agreement executed pursuant hereto by
any of the Finco Parties, or (c) the ownership, operation, maintenance, leasing,
or titling of the Vehicles, except in each case, for any such Indemnified
Liabilities arising on account of the relevant Finco Party's gross negligence or
wilful misconduct and, to the extent that the foregoing undertaking may be
unenforceable for any reason, Leasco agrees to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under applicable law.
SECTION 13.6. No Petition. Leasco hereby covenants and agrees
------------
that, prior to the date which is one year and one day after the payment in full
of all Commercial Paper Notes Outstanding and all other obligations of Finco
under the Related Documents, it will not institute against, or join any other
Person in instituting against, Finco any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States. In the
event that Leasco takes action in violation of this Section 13.06, Finco agrees,
for the benefit of the Holders, that it shall file an answer with the bankruptcy
court or otherwise properly contest the filing of such a petition by Leasco
against Finco or the commencement of such action and raise the defense that
Leasco 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 13.06 shall survive the
termination of this Agreement.
-26-
<PAGE>
SECTION 13.7. No Recourse. (a) Finco agrees that the obligations
-----------
of Leasco to Finco hereunder shall be due and payable only to the extent that
Leasco's assets are sufficient to pay such obligations. No claims of Finco
arising under or in connection with the Collateral Agreement are intended to be
impaired or waived by this Section 13.07.
(b) Without limitation to the obligations of Leasco hereunder,
no recourse shall be had for the payment of any amount owing in respect of Loans
or for the payment of any fee hereunder or any other obligation or claim arising
out of or based upon this Agreement or any other Related Document against any
stockholder, employee, officer, director, affiliate or incorporator of Leasco
based on their status as such or their actions in connection therewith. The
provisions of this Section 13.07 shall survive the termination of this
Agreement.
SECTION 13.8. Waiver of Set-Off. Finco hereby 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 Leasco therein or with respect to any
right to payment from Leasco, it being understood, however, that nothing
contained in this Section 13.08 shall, or is intended to, derogate from the
assignment and security interest granted to the Agent under the Collateral
Agreement or impair any rights of Finco or the Agent thereunder.
SECTION 13.9. Forum Selection and Consent to Jurisdiction. ANY
-------------------------------------------
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR THE LOAN NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT, FINCO OR LEASCO
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 LOAN
-------- -------
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT FINCO'S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH LOAN COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
LEASCO HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ALL FEDERAL AND STATE COURTS OF THE STATE 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.
LEASCO 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. LEASCO AND FINCO HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY 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 LEASCO 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, IT HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE LOAN NOTE.
-27-
<PAGE>
SECTION 13.10. Governing Law. THIS AGREEMENT AND THE LOAN NOTE
-------------
SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. Whenever possible each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of Leasco and rights of Finco and the holder of the
Loan Note or Liability expressed herein shall be in addition to and not in
limitation of those provided by applicable law or in any other written
instrument or agreement relating to any of the Liabilities.
SECTION 13.11. Jury Trial. EACH PARTY HERETO HEREBY EXPRESSLY
----------
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT TO WHICH IT
IS A PARTY, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED
OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM
ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED
TRANSACTION, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE
A COURT AND NOT BEFORE A JURY.
SECTION 13.12. Successors and Assigns. (a) This Agreement shall
----------------------
be binding upon Leasco, Finco and their respective successors and assigns, and
shall inure to the benefit of Leasco, Finco and the Agent as a third party
beneficiary and their respective successors and assigns; provided, however, that
Leasco shall not have the right to assign its rights or delegate its duties
under this Agreement without (i) Finco's and the Agent's prior written consent
and (ii) receipt of written confirmation from each of the Rating Agencies that
its then current rating of the Commercial Paper Notes will not be reduced or
withdrawn as a result thereof.
(b) Leasco acknowledges that this Agreement and the Loan Note
will be assigned by Finco to the Agent pursuant to the Collateral Agreement, and
hereby agrees that the Agent may exercise all of Finco's rights hereunder.
(c) This Agreement and the other Related Documents contain the
entire agreement of the parties hereto with respect to the matters covered
hereby.
IN WITNESS WHEREOF, Leasco and Finco have caused this Loan
Agreement to be duly executed by their respective officers all as of the day and
year first above written.
RCTR, INC.,
1560 Broadway
Suite 1800
Denver, CO 80202
Attention of: General Counsel
Telephone: (303) 376-0040
Facsimile: (303) 376-7050
-28-
<PAGE>
by
/s/ Steven R. Davison
---------------------------------------
Name: Steven R. Davison
Title: Vice President and Treasurer
FCTR, INC.,
1560 Broadway
Suite 1800
Denver, CO 80202
Attention of: General Counsel
Telephone: (303) 376-0040
Facsimile: (303) 376-7050
by
/s/ Steven R. Davison
--------------------------------------
Name: Steven R. Davison
Title: Vice President and Treasurer
-29-
<PAGE>
EXHIBIT 10.2
EXECUTION COPY
================================================================================
LIQUIDITY AGREEMENT
Among
FCTR, INC.,
as Borrower
CERTAIN FINANCIAL INSTITUTIONS
as the Liquidity Lenders
and
CITIBANK, N.A.
as the Liquidity Agent for
the Liquidity Lenders
Dated as of August 7, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. Definitions and Accounting Terms
--------------------------------
SECTION 1.1. Definitions.................................................................... 1
-----------
SECTION 1.2. Cross-References............................................................... 1
----------------
SECTION 1.3. Accounting and Financial Determinations; No Duplication........................ 2
-------------------------------------------------------
ARTICLE II. Commercial Paper Operations
---------------------------
SECTION 2.1. Issuance of Commercial Paper Notes............................................. 2
----------------------------------
SECTION 2.2. Conditions to the Issuance of Commercial Paper Notes........................... 3
----------------------------------------------------
SECTION 2.3. Commercial Paper Notes......................................................... 4
----------------------
SECTION 2.4. Commercial Paper Account; Payment of Commercial Paper Notes.................... 4
-----------------------------------------------------------
SECTION 2.5. Cash Reserve Account........................................................... 5
--------------------
ARTICLE III. Liquidity Commitments, Borrowing Procedures, Liquidity Advances and Notes
-------------------------------------------------------------------------
SECTION 3.1. Liquidity Commitments.......................................................... 5
---------------------
SECTION 3.2. Liquidity Lenders Not Required To Make Certain Liquidity Advances.............. 6
-----------------------------------------------------------------
SECTION 3.3. Termination and Reduction of the Liquidity Commitments......................... 7
------------------------------------------------------
SECTION 3.4. Increase of the Aggregate Liquidity Commitment................................. 7
---------------------------------------------
SECTION 3.5. Extensions of Scheduled Liquidity Commitment Termination Date.................. 7
-------------------------------------------------------------
SECTION 3.6. Borrowing Procedures........................................................... 8
--------------------
SECTION 3.7. Disbursement of Funds.......................................................... 10
---------------------
SECTION 3.8. Continuation and Conversion Elections.......................................... 11
-------------------------------------
SECTION 3.9. LIBOR Funding.................................................................. 11
-------------
SECTION 3.10. Liquidity Advance Notes........................................................ 11
-----------------------
ARTICLE IV. Repayments, Prepayments, Interest and Fees, etc.
-----------------------------------------------
SECTION 4.1. Repayments and Prepayments..................................................... 12
--------------------------
SECTION 4.2. Interest Provisions............................................................ 13
-------------------
SECTION 4.3. Payments of Interest........................................................... 14
--------------------
SECTION 4.4. Computation Basis.............................................................. 14
-----------------
SECTION 4.5. Fees........................................................................... 15
----
ARTICLE V. Certain LIBOR and Other Provisions
----------------------------------
SECTION 5.1. LIBOR Lending Unlawful......................................................... 15
----------------------
SECTION 5.2. Deposits Unavailable........................................................... 15
--------------------
SECTION 5.3. Increased Costs, etc........................................................... 16
--------------------
SECTION 5.4. Funding Losses................................................................. 16
--------------
SECTION 5.5. Increased Capital Costs........................................................ 17
-----------------------
SECTION 5.6. Taxes.......................................................................... 17
-----
SECTION 5.7. Payments, Computations, etc.................................................... 19
---------------------------
SECTION 5.8. Sharing of Payments............................................................ 19
-------------------
</TABLE>
(i)
<PAGE>
<TABLE>
<S> <C>
SECTION 5.9. Replacement of Liquidity Lenders............................................ 20
--------------------------------
SECTION 5.10. Order and Priority.......................................................... 21
------------------
ARTICLE VI. Conditions Precedent
--------------------
SECTION 6.1. Conditions to Effectiveness................................................. 21
---------------------------
SECTION 6.2. Conditions to the Making of Each Revolving Advance.......................... 24
--------------------------------------------------
SECTION 6.3. Conditions Precedent to the Making of Each Refunding Advance................ 25
------------------------------------------------------------
ARTICLE VII. Representations and Warranties
------------------------------
SECTION 7.1. Organization; Ownership; Power; Qualification............................... 26
---------------------------------------------
SECTION 7.2. Authorization............................................................... 26
-------------
SECTION 7.3. Enforceability.............................................................. 26
--------------
SECTION 7.4. Approvals................................................................... 26
---------
SECTION 7.5. Financial Information; Financial Condition.................................. 26
------------------------------------------
SECTION 7.6. Litigation; Compliance with Laws............................................ 27
--------------------------------
SECTION 7.7. Employee Benefit Plans...................................................... 27
----------------------
SECTION 7.8. Tax Filings................................................................. 27
-----------
SECTION 7.9. No Material Misstatements................................................... 28
-------------------------
SECTION 7.10. Investment Company Act; Public Utility Holding Company Act; Securities
----------------------------------------------------------------------
Act.................................................................. 28
---
SECTION 7.11. Margin Regulations.......................................................... 28
------------------
SECTION 7.12. Ownership; Subsidiaries..................................................... 28
-----------------------
SECTION 7.13. Solvency.................................................................... 29
--------
SECTION 7.14. Title to Assets; Security Interests......................................... 29
-----------------------------------
SECTION 7.15. Burdensome Provisions....................................................... 29
---------------------
SECTION 7.16. Proceeds.................................................................... 29
--------
SECTION 7.17. Business Location; Trade Names.............................................. 29
------------------------------
SECTION 7.18. Collateral Agreement........................................................ 29
--------------------
SECTION 7.19. No Material Adverse Change.................................................. 30
--------------------------
SECTION 7.20. Other Representations....................................................... 30
---------------------
ARTICLE VIII. Covenants
---------
SECTION 8.1. Affirmative Covenants....................................................... 30
---------------------
SECTION 8.2. Negative Covenants.......................................................... 32
------------------
ARTICLE IX. Amortization Events
-------------------
SECTION 9.1. Amortization Event.......................................................... 35
------------------
SECTION 9.2. Action upon Amortization Event.............................................. 37
------------------------------
SECTION 9.3. Limited Amortization Events................................................. 37
---------------------------
SECTION 9.4. Action upon Limited Amortization Event...................................... 38
--------------------------------------
ARTICLE X. The Liquidity Agent
-------------------
SECTION 10.1. Actions..................................................................... 38
-------
SECTION 10.2. Collateral Agreement........................................................ 39
--------------------
SECTION 10.3. Exculpation................................................................. 39
-----------
</TABLE>
(ii)
<PAGE>
<TABLE>
<S> <C>
SECTION 10.4. Successor.................................................................. 39
--------
SECTION 10.5. Liquidity Advances by Citibank............................................. 40
------------------------------
SECTION 10.6. Credit Decisions........................................................... 40
----------------
SECTION 10.7. Copies, etc................................................................ 40
-----------
ARTICLE XI. Miscellaneous Provisions
------------------------
SECTION 11.1. Waivers, Amendments, etc................................................... 41
------------------------
SECTION 11.2. Notices.................................................................... 42
-------
SECTION 11.3. Payment of Costs and Expenses.............................................. 42
-----------------------------
SECTION 11.4. Indemnification............................................................ 43
---------------
SECTION 11.5. Survival................................................................... 44
--------
SECTION 11.6. Severability............................................................... 44
------------
SECTION 11.7. Headings................................................................... 44
--------
SECTION 11.8. Execution in Counterparts.................................................. 44
-------------------------
SECTION 11.9. Governing Law; Entire Agreement............................................ 44
-------------------------------
SECTION 11.10. Successors and Assigns..................................................... 44
----------------------
SECTION 11.11. Assignments and Participations............................................. 44
------------------------------
SECTION 11.12. Other Transactions......................................................... 47
------------------
SECTION 11.13. Bankruptcy Petition Against Finco.......................................... 48
---------------------------------
SECTION 11.14. No Recourse................................................................ 48
-----------
SECTION 11.15. Survival of Representations and Warranties................................. 48
------------------------------------------
SECTION 11.16. Confidentiality............................................................ 48
---------------
SECTION 11.17. Jurisdiction; Consent to Service of Process................................ 49
-------------------------------------------
SECTION 11.18. Waiver of Jury Trial....................................................... 49
--------------------
SECTION 11.19. Waiver of Set-Off.......................................................... 49
-----------------
</TABLE>
Exhibits
- --------
EXHIBIT A - Form of Revolving Liquidity Advance Note
EXHIBIT B - Form of Refunding Liquidity Advance Note
EXHIBIT C - Form of Borrowing Request
EXHIBIT D - Form of Continuation/Conversion Notice
EXHIBIT E-1 - Form of Assignment and Acceptance Agreement
EXHIBIT E-2 - Form of Administrative Questionnaire
EXHIBIT F - Form of Closing Date Certificate
EXHIBIT G - Form of Loan Agreement
EXHIBIT H - Form of Collateral Agreement
EXHIBIT I - Form of Depositary Agreement
EXHIBIT J - Form of Dealer Agreement
EXHIBIT K - Form of Liquidity Commitment Agreement
EXHIBIT L - Form of Lease
EXHIBIT M-1 - Form of WF&G General Corporate Opinion
EXHIBIT M-2 - Form of WF&G Substantive Consolidation and
True Lease Opinion
EXHIBIT N - Form of Perfection Opinion
EXHIBIT O - Form of Issuance Certificate
EXHIBIT P - Form of Custody Agreement
Annexes
- -------
(iii)
<PAGE>
ANNEX A - Definitions
ANNEX B - Disclosure Materials
Schedules
- ---------
Schedule 7.14 - Leased Properties
Schedule 7.18 - Financing Statement Filings
Schedule 11.11 - Non-Participating Banks
(iv)
<PAGE>
LIQUIDITY AGREEMENT, dated as of August 7, 1997 (as
amended, supplemented, restated or otherwise modified from
time to time, this "Agreement"), among FCTR, INC., a
Delaware corporation ("Finco"), the financial institutions
listed on the signature pages hereof under the heading
"Liquidity Lenders" (each such financial institution,
together with each of the financial institutions that has
become party hereto pursuant to Section 11.11 being a
"Liquidity Lender" and, collectively, the "Liquidity
Lenders") and CITIBANK, N.A., a national banking
association ("Citibank"), as liquidity agent (in such
capacity, together with any successors and assigns
thereto, the "Liquidity Agent") for the Liquidity Lenders.
W I T N E S S E T H :
WHEREAS Finco proposes to make Loans (such capitalized term,
together with all other capitalized terms used herein, shall have the meaning
assigned thereto in Section 1.01) to Leasco pursuant to the Loan Agreement, the
proceeds of which are to be used by Leasco to make Repayment Distributions to
TRS and to purchase Vehicles from authorized dealers of Manufacturers or to
finance Vehicles previously purchased by Leasco;
WHEREAS Finco proposes to issue and sell its Commercial Paper
Notes in the commercial paper market and use the net proceeds thereof to, among
other things, make Loans;
WHEREAS Finco desires to obtain Liquidity Commitments from the
Liquidity Lenders to make Liquidity Advances in an aggregate principal amount
not to exceed the Aggregate Liquidity Commitment at any one time outstanding to
Finco from time to time prior to the Liquidity Commitment Termination Date; and
WHEREAS the Liquidity Lenders are willing, on the terms and
subject to the conditions hereinafter set forth (including Article VI), to
provide such Liquidity Commitments and make such Liquidity Advances to Finco.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
Definitions and Accounting Terms
--------------------------------
SECTION 1.1. Definitions. Capitalized terms used but not defined
-----------
herein (including the preamble and the recitals hereto) shall have the meanings
assigned to such terms in the Definitions List, dated as of the Closing Date and
annexed hereto as Annex A, as such Definitions List may be amended or modified
from time to time in accordance with the provisions hereof (the "Definitions
List").
SECTION 1.2. Cross-References. Unless otherwise specified,
----------------
references in this Agreement and in each other Related Document to any Article
or Section are references to such Article or Section of this Agreement or such
other Related Document, as the case may be, and, unless
<PAGE>
otherwise specified, references in any Article, Section or definition to any
clause are references to such clause of such Article, Section or definition.
SECTION 1.3. Accounting and Financial Determinations; No
-------------------------------------------
Duplication. Unless otherwise specified, (i) all accounting terms used herein
- -----------
shall be interpreted, all accounting determinations and computations hereunder
shall be made, and all financial statements required to be delivered hereunder
shall be prepared in conformity with GAAP, and (ii) all accounting
determinations and computations hereunder or under any other Related Documents
shall be made without duplication; provided that if any change in GAAP itself
materially affects any such determination, computation or financial statement,
Finco may by notice to the Liquidity Agent and the Agent, or alternatively the
Liquidity Agent or the Agent may by notice to Finco, require that any such
determination, computation or financial statement thereafter be made in
accordance with GAAP as in effect, and applied by Finco, immediately before such
change in GAAP occurs. Each of the Liquidity Agent, Finco and the Agent agrees
to enter into negotiations in good faith to modify the financial representations
and covenants and other applicable provisions contained herein in a manner which
reflects any such change in GAAP without adversely affecting the rights of the
Liquidity Agent, the Liquidity Lenders and the Agent.
ARTICLE II.
Commercial Paper Operations
---------------------------
SECTION 2.1. Issuance of Commercial Paper Notes. On the terms and
----------------------------------
subject to the provisions of this Agreement and the other Related Documents,
Finco may from time to time on or after the Closing Date and prior to the
Liquidity Commitment Termination Date, issue and sell Commercial Paper Notes;
provided, however, that Finco shall not issue and sell Commercial Paper Notes
- -------- -------
if:
(a) Finco and the Depositary have received instructions then in
effect from the Liquidity Agent (copies of which will also be sent to
the Dealers), given in accordance with this Section 2.01, not to issue
or deliver Commercial Paper Notes because (i) the Liquidity Commitment
Termination Date shall have occurred, or (ii) the Commercial Paper
Account or any funds on deposit in, or otherwise to the credit of, the
Commercial Paper Account shall be subject to any stay, writ, judgment,
warrant of attachment, execution or similar process; provided, however,
-------- -------
that if any such stay, writ, judgment, warrant of attachment, execution
or similar process is removed or dismissed, Finco may recommence the
issuance and sale of Commercial Paper Notes;
(b) the issuance of Commercial Paper Notes is prohibited by any
of Sections 2.02, 9.02 or 9.04 hereof, Sections 3(b) or 10(c) of the
Depositary Agreement or Section 5.01 of the Collateral Agreement;
(c) after giving effect to such issuance and the use of
proceeds thereof, a Borrowing Base Deficiency would exist;
(d) after giving effect to such issuance and the use of proceeds
thereof, the weighted average interest rate of the Outstanding
Commercial Paper Notes and Liquidity Advances would be in excess of 12%
per annum, unless (i) Finco and the Liquidity Agent shall have given
their written consent to a weighted average interest
-2-
<PAGE>
rate in excess of 12% per annum and (ii) the Rating Agencies shall have
confirmed that such weighted average interest rate will not result in the
downgrading or withdrawal of the then current ratings of the Commercial
Paper Notes; provided, however, that if the ratings of the Commercial Paper
-------- -------
Notes by S&P and Moody's will be less than A-1 and Prime-1, respectively,
after giving effect to such weighted average interest rate in excess of 12%
per annum, such Commercial Paper Notes will not be issued unless the
Majority Banks shall have given their written consent thereto. Finco shall
notify the Liquidity Agent and the Agent in writing no later than 11:00
a.m., New York City time, on any Business Day on which the weighted average
interest rate of the Outstanding Commercial Paper Notes and Liquidity
Advances exceeds 12% per annum.
Finco further agrees that it will not issue Commercial Paper Notes if Finco and
the Depositary shall have received instructions then in effect from the
Liquidity Agent that any of the conditions set forth in clauses (b) through (d)
of this Section 2.01 shall be true. Further, the Liquidity Agent shall have no
obligation to deliver any such instructions or any instructions set forth in
clause (a) of this Section 2.01 except upon the instructions of the Majority
Banks and any delivery by the Liquidity Agent of any such instructions shall be
subject to the provisions of Section 10.03 and the rights of the Liquidity Agent
thereunder and shall not relieve Finco, the Agent or the Depositary of any of
their respective obligations under any Related Document or with respect to the
issuance of Commercial Paper Notes. Any instructions from the Liquidity Agent to
Finco and the Depositary in accordance with this Section 2.01 shall specify the
reason(s) to cease issuing and delivering Commercial Paper Notes. Without prior
instruction as set forth above, the Liquidity Agent agrees that it shall only
instruct Finco and the Depositary not to issue and sell Commercial Paper Notes
if there shall have occurred an event described in subclause (i) of clause (a)
of this Section 2.01. Concurrently with the giving of any such instructions to
Finco and the Depositary, the Liquidity Agent shall give notice thereof to the
Liquidity Lenders, the Agent, the Dealers, and the rating agency or agencies
known to it to have provided investment ratings with respect to the Commercial
Paper Notes, but failure to do so shall not impair the effect of such
instructions and the giving of such notice shall be subject to Section 10.03.
SECTION 2.2. Conditions to the Issuance of Commercial Paper
----------------------------------------------
Notes. The right of Finco to issue Commercial Paper Notes (whether such
- -----
Commercial Paper Notes are to be issued to refinance Commercial Paper Notes
maturing on the day such Commercial Paper Notes are to be issued or to increase
the Aggregate Face Amount over that of the preceding day) is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties. On the date of the issuance
------------------------------
of any Commercial Paper Note and after giving effect thereto, the
representations and warranties of Finco set forth in Article VII hereof,
and in all other Related Documents to which Finco is a party, shall be true
and correct (in all material respects to the extent any such
representations and warranties do not incorporate a materiality limitation
in their terms) with the same effect as if then made (unless stated to
relate solely to an earlier date, in which case such representations and
warranties shall be true and correct (in all material respects to the
extent any such representations and warranties do not incorporate a
materiality limitation in their terms) as of such earlier date).
(b) No Amortization Event. (i) No Amortization Event shall have
---------------------
occurred and be continuing; and
(ii) such issuance of Commercial Paper Notes shall not be
prohibited by Section 9.04 relating to Limited Amortization
Events.
-3-
<PAGE>
(c) Available Liquidity Commitment. At the time of the issuance
------------------------------
of each Commercial Paper Note and after giving effect thereto and to the
use of proceeds thereof on such day, the Aggregate Liquidity Commitment
shall be equal to or greater than the sum of the Aggregate Outstanding
CP and the aggregate principal amount of Liquidity Advances Outstanding
---
net of any amounts on deposit at such time in the Collateral Account set
aside for the repayment of the principal of Liquidity Advances.
(d) No Borrowing Base Deficiency. With respect to the issuance of
----------------------------
any Commercial Paper Note, a Borrowing Base Deficiency shall not exist
and the issuance of such Commercial Paper Note, after giving effect to
the repayment of any Commercial Paper Notes and Liquidity Advances made
with the proceeds thereof, would not result in a Borrowing Base
Deficiency.
(e) Issuance Certificate. The Liquidity Agent shall have received
--------------------
an Officer's Certificate in the form of Exhibit O hereto, dated the date
of such issuance and duly executed and delivered by an Authorized
Officer of Finco.
(f) Attachment. At the time of such issuance, Finco shall not
----------
have received notice that any of the Accounts or the Commercial Paper
Account or any funds on deposit in, or otherwise to the credit of any
thereof have become subject to any stay, writ, judgment, warrant of
attachment, execution or similar process; provided, however, that if any
-------- -------
such stay, writ, judgment, warrant of attachment, execution or similar
process is removed or dismissed, Finco may recommence the issuing of
Commercial Paper Notes.
(g) Cash Reserve. At the time of and after giving effect to such
------------
issuance, the amount of cash in the Cash Reserve Account shall be equal
to or greater than 2.00% of Aggregate Outstandings.
SECTION 2.3. Commercial Paper Notes. Finco agrees that each
----------------------
promissory note constituting Commercial Paper Notes shall (a) be substantially
in the form of Exhibit A to the Depositary Agreement or in the form of the
Master Note attached as Exhibit E to the Depositary Agreement, and be completed
in accordance with this Agreement and the Depositary Agreement (including any
provisions for book-entry securities contained therein), (b) be dated the date
of issuance thereof, (c) be made payable to the order of a named payee, (d) have
a maturity date which shall not be later than the earlier of (i) three Business
Days prior to the earliest of the Scheduled Liquidity Commitment Termination
Date and (ii) the date which is 58 days after the date of issuance thereof, (e)
be in a face amount of at least $100,000 and an integral multiple of $1,000, and
(f) be exempt from the registration requirements of the Act pursuant to Section
4(2) thereof. Subject to the provisions of the Depositary Agreement, all
Commercial Paper Notes shall be delivered and issued against payment therefor in
immediately available funds on the date of issuance, and otherwise in accordance
with the terms of this Agreement and the Depositary Agreement.
SECTION 2.4 Commercial Paper Account; Payment of Commercial
-----------------------------------------------
Paper Notes. (a) Contemporaneously with the execution and delivery by
- -----------
Finco of the Depositary Agreement, and for the purposes of this Agreement and
the Depositary Agreement, Finco shall cause the Depositary to establish at its
office at 120 Wall Street, New York, New York, 10043, a segregated trust account
in its corporate trust department for the exclusive benefit of the Holders (the
"Commercial Paper Account"), over which the Depositary shall have exclusive
control and sole right of withdrawal.
-4-
<PAGE>
(b) Proceeds of the sale of Commercial Paper Notes shall be
deposited in the Commercial Paper Account only to the extent necessary
to pay matured and concurrently maturing Commercial Paper Notes, whether
or not presented to the Depositary for payment; otherwise proceeds of
the sale of Commercial Paper Notes shall be applied according to the
terms of the Collateral Agreement.
SECTION 2.5. Cash Reserve Account. (a) Contemporaneously with
--------------------
the execution and delivery by Finco of this Agreement, and for the purposes of
this Agreement, Finco shall cause the Agent to establish at its office at 399
Park Avenue, 13th Floor, New York, New York, 10043, an interest bearing account
for the exclusive benefit of the Holders, over which the Agent shall have
exclusive control and sole right of withdrawal.
(b) Money deposited in the Cash Reserve Account shall be
applied and distributed in accordance with the Collateral Agreement.
ARTICLE III.
Liquidity Commitments, Borrowing Procedures,
--------------------------------------------
Liquidity Advances and Notes
----------------------------
SECTION 3.1. Liquidity Commitments. Subject to and in
---------------------
accordance with the terms and the conditions of this Agreement (including
Article VI), each Liquidity Lender severally and not jointly agrees to make
Revolving Advances and Refunding Advances (relative to such Liquidity Lender,
together with its Commitment Termination Date Liquidity Advance, its "Liquidity
Advances"), to Finco pursuant to this Section 3.01.
(a) Revolving Advance Commitment. Subject to and in accordance
----------------------------
with the terms and conditions hereof (including the terms and conditions
set forth in Section 6.02), each Liquidity Lender severally and not
jointly agrees to make, from time to time, on or before the earlier to
occur of (i) such Liquidity Lender's Scheduled Liquidity Commitment
Termination Date and (ii) the Revolving Advance Commitment Termination
Date, advances for the purposes set forth in Section 3.01(c)(i)
(relative to such Liquidity Lender, its "Revolving Advances") to Finco
equal to such Liquidity Lender's Percentage of the aggregate amount of
the Borrowing of Revolving Advances requested by Finco to be made on
such day. On the terms and subject to the conditions hereof, Finco may
from time to time borrow, prepay and reborrow Revolving Advances.
(b) Refunding Advance Commitment. Subject to and in accordance
----------------------------
with the terms and conditions hereof (including the terms and conditions
set forth in Section 6.03), each Liquidity Lender severally and not
jointly agrees to make, from time to time, on or before such Liquidity
Lender's Liquidity Commitment Termination Date, advances for the
purposes set forth in Section 3.01(c)(ii) (relative to such Liquidity
Lender (including its Commitment Termination Date Liquidity Advance),
its "Refunding Advances") to Finco equal to (i) in the case of Refunding
Advances (other than any Commitment Termination Date Liquidity Advance),
such Liquidity Lender's Percentage of the aggregate amount of the
Borrowing of Refunding Advances requested by Finco or the Agent, as
attorney-in-fact for Finco, to be made on such day, and (ii) in the case
of Commitment Termination Date Liquidity Advances, such Liquidity
Lender's Percentage of the aggregate amount of the Commitment
Termination Date Liquidity Advance on the date of such Commitment
Termination Date Liquidity Advance. On
-5-
<PAGE>
the terms and subject to the conditions hereof, Finco may from time to
time borrow, prepay and reborrow Refunding Advances (other than
Commitment Termination Date Liquidity Advances).
(c) Use of Proceeds. Proceeds from the Liquidity Advances
---------------
shall be applied by Finco as follows:
(i) Proceeds from each Revolving Advance shall be used by
Finco to: (A) make Loans pursuant to the Loan Agreement or (B)
repay matured Liquidity Advances (other than any Commitment
Termination Date Liquidity Advance).
(ii) Proceeds of each Refunding Advance shall be deposited
by Finco into the Commercial Paper Account and proceeds of each
Commitment Termination Date Liquidity Advance shall be deposited
by Finco into the Termination Advance Account, in each case, for
the repayment of maturing Commercial Paper Notes.
Finco shall not use the proceeds of any Liquidity Advance for any other
purpose.
SECTION 3.2. Liquidity Lenders Not Required To Make Certain
----------------------------------------------
Liquidity Advances. (a) Revolving Advances. No Liquidity Lender shall be
- ------------------ ------------------
required to make a Revolving Advance to the extent that if after giving effect
to such Revolving Advance, (i) the aggregate principal amount of all Liquidity
Advances Outstanding would exceed the Aggregate Liquidity Commitment, or (ii)
the aggregate principal amount of such Liquidity Lender's Liquidity Advances
Outstanding would exceed such Liquidity Lender's Liquidity Commitment.
(b) Refunding Advances. No Liquidity Lender shall be required
------------------
to make a Refunding Advance to the extent that if after giving effect to
such Refunding Advance (i) the aggregate principal amount of all
Liquidity Advances Outstanding would exceed the Aggregate Liquidity
Commitment or (ii) the aggregate principal amount of such Liquidity
Lender's Liquidity Advances Outstanding would exceed such Liquidity
Lender's Liquidity Commitment.
(c) Failure To Fund. The provisions of this Section 3.02(c) shall
---------------
only be operative at any time when the number of Liquidity Lenders whose
respective Liquidity Commitments have not expired or been terminated
shall exceed ten in the aggregate. Subject to Sections 3.02(a) and (b),
in the event that one or more Liquidity Lenders fails to fund its or
their Percentage of the Liquidity Advances to be provided by the
Liquidity Lenders by 2:00 p.m., New York City time, on any Business Day
(other than a Commitment Termination Date Liquidity Advance or a
Revolving Advance the proceeds of which are to be used to repay maturing
Liquidity Advances), the Liquidity Agent shall notify each of the other
Liquidity Lenders not later than 3:00 p.m., New York City time, on such
Business Day and each of the other Liquidity Lenders shall, before 5:00
p.m., New York City time, on such Business Day, make available to the
Liquidity Agent at the Liquidity Agent's address specified for such
purpose, in immediately available funds, a Liquidity Advance in a
principal amount equal to such unfunded amount multiplied by a fraction,
the numerator of which is the Liquidity Commitment of such Liquidity
Lender and the denominator of which is the Aggregate Liquidity
Commitment (less the Liquidity Commitments of the defaulting Liquidity
Lenders); provided, however, that no Liquidity Lender will be required
-------- -------
to make any Liquidity Advance to the extent that such Liquidity Advance
would result in the aggregate principal amount of such Liquidity
Lender's Liquidity Advances Outstanding exceeding such Liquidity
Lender's Liquidity Commitment. After the Liquidity Agent's receipt of
such funds and upon fulfillment
-6-
<PAGE>
of the applicable conditions set forth in Article VI, the Liquidity
Agent will make such funds available to Finco by 5:45 p.m., New York
City time. Any Liquidity Advance made pursuant to this Section 3.02(c)
shall be a Base Rate Advance subject to conversion in accordance with
the provisions of Section 3.08 hereof.
SECTION 3.3. Termination and Reduction of the Liquidity
------------------------------------------
Commitments. (a) Finco may, upon at least three Business Days' prior written
- -----------
notice to the Liquidity Agent (who shall give prompt written notice thereof to
each Liquidity Lender, the Dealers and the Depositary), irrevocably terminate or
reduce ratably in part the Aggregate Liquidity Commitment; provided, however,
-------- -------
that the Aggregate Liquidity Commitment shall not be reduced on any day in an
amount such that the Aggregate Liquidity Commitment would be less than the
Aggregate Outstandings on such day; and provided, further, that any partial
-------- -------
reduction shall be at least $5,000,000 and in an integral multiple of
$1,000,000. Any such reduction of the Aggregate Liquidity Commitment shall
reduce ratably the Liquidity Commitment of each Liquidity Lender.
(b) The Liquidity Agent shall give notice to the Dealers as to
any change in the Aggregate Liquidity Commitment promptly after any
reduction thereof.
(c) No termination or reduction of the Aggregate Liquidity
Commitment by Finco pursuant to this Section 3.03 shall be effective
unless the Liquidity Agent or Finco shall have given notice to S&P and
Moody's of such termination or reduction.
SECTION 3.4. Increase of the Aggregate Liquidity Commitment. The
----------------------------------------------
Aggregate Liquidity Commitment may be increased from time to time to an amount
greater than the amount of the Aggregate Liquidity Commitment on the Closing
Date through the increase of a Liquidity Lender's Liquidity Commitment or the
addition of one or more Eligible Liquidity Lenders as a party to this Agreement;
provided, however, that no such increase shall become effective unless all of
- -------- -------
following conditions shall have been satisfied:
(a) Finco and the Liquidity Agent shall have given their
written consent thereto;
(b) such Liquidity Lender or Eligible Liquidity Lender, as the
case may be, and Finco shall have executed and delivered to the
Liquidity Agent a Liquidity Commitment Agreement; and
(c) the Rating Agencies shall have confirmed in writing that
such increase in the Aggregate Liquidity Commitment will not result in
the downgrading below A-1 by S&P and Prime-1 by Moody's or withdrawal of
the ratings of the Commercial Paper Notes.
SECTION 3.5. Extensions of Scheduled Liquidity Commitment
--------------------------------------------
Termination Date. (a) Finco may, no earlier than 60 days prior to each Liquidity
- ----------------
Lender's ate Scheduled Liquidity Commitment Termination Date, request that one
or more Liquidity Lenders renew their respective Liquidity Commitments for an
additional 364-day period. If a Liquidity Lender agrees, in its individual and
sole discretion, to renew its Liquidity Commitment, it will notify Finco of such
decision to do so no earlier than 30 days prior to such Liquidity Lender's
Scheduled Liquidity Commitment Termination Date and no later than 10 days prior
to such Liquidity Lender's Scheduled Liquidity Commitment Termination Date and,
provided that Liquidity Lenders holding at least 51% of the Aggregate Liquidity
Commitments at such time agree to renew their Liquidity Commitments, each
renewing Liquidity Lender's Liquidity Commitment shall be renewed for an
additional 364-day period commencing on the Scheduled Liquidity Commitment
Termination Date and the new Scheduled
-7-
<PAGE>
Liquidity Commitment Termination Date shall be the date which is 364 days after
the then existing Scheduled Liquidity Commitment Termination Date.
(b) Any Liquidity Lender that declines to renew its Liquidity
Commitment or fails to respond to Finco's request pursuant to paragraph
(a) of this Section 3.05 will have its Liquidity Commitment terminated
on the Scheduled Liquidity Commitment Termination Date then in effect.
SECTION 3.6. Borrowing Procedures. Borrowings of Revolving
--------------------
Advances, Refunding Advances and Commitment Termination Date Liquidity Advances
shall be made in accordance with this Section 3.06.
(a) Revolving Advances. By delivering a Borrowing Request to the
------------------
Liquidity Agent for a Borrowing consisting of Revolving Advances, which
will be accompanied by telephonic notification, Finco may irrevocably
request (i) in the case of LIBOR Advances, not later than 11:15 a.m.,
New York City time, on not less than three nor more than five Business
Days' prior notice, that a Borrowing be made in a minimum amount of
$5,000,000 and an integral multiple of $1,000,000, or (ii) in the case
of Base Rate Advances, not later than 12:00 noon, New York City time, on
the date of such Borrowing and, in any case, on not more than five
Business Days' prior notice (which notice shall be given in writing),
that a Borrowing be made in a minimum amount of $5,000,000 and an
integral multiple of $1,000,000. On the terms and subject to the
conditions of this Agreement, each such Borrowing shall be comprised of
Liquidity Advances of the same type (and, in the case of LIBOR Advances,
shall have the same Interest Period), and shall be made on the Business
Day specified in such Borrowing Request.
(b) Refunding Advances. (i) Upon receipt from the Depositary of
------------------
notice (not later than 11:15 a.m., New York City time) pursuant to
Section 5(b) of the Depositary Agreement that, on any Business Day that
any Commercial Paper Notes mature, the amount required to pay in full
all Commercial Paper Notes maturing on such Business Day will be more
than the net amount obtained or to be obtained by the issuance of
Commercial Paper Notes on such day plus the amount available for payment
----
of such Commercial Paper Notes in the Commercial Paper Account (the
amount of such excess, the "Commercial Paper Deficit"), the Agent shall
irrevocably request, if such notice contains an instruction from the
Depositary to the Agent to deliver a Borrowing Request, by delivering a
Borrowing Request to the Liquidity Agent (who will notify the other
Liquidity Lenders of such Borrowing Request not later than 12:00 noon,
New York City time) for a Borrowing consisting of Refunding Advances not
later than 12:00 noon, New York City time, on the date of a proposed
Borrowing, that a Borrowing be made in an aggregate principal amount
equal to the excess of (i) the Commercial Paper Deficit over (ii) the
sum of the aggregate amount, if any, applied or to be applied on such
Business Day to the Commercial Paper Deficit from amounts available
therefor in the Collateral Account and the Termination Advance Account
that are allocated to the payment of maturing Commercial Paper Notes. On
the terms and subject to the conditions of this Agreement, each such
Borrowing under this Section 3.06(b) shall be initially comprised of
Base Rate Advances (subject to conversion in accordance with the
provisions of Section 3.08) and shall be made on the Business Day
specified in such Borrowing Request. For the purposes of this Section,
Commercial Paper Notes maturing on any day which have been paid from an
advance made by the Depositary shall nonetheless be deemed to be unpaid.
-8-
<PAGE>
(ii) Upon the occurrence of a Scheduled Liquidity
Commitment Termination Date with respect to any Liquidity
Lender's Liquidity Commitment and the receipt of a Borrowing
Request pursuant to Section 5.06(b) of the Collateral Agreement,
and subject to the terms and conditions of this Agreement, the
Liquidity Agent shall notify each Liquidity Lender not later than
3:00 p.m., New York City time, on such Business Day and such
Liquidity Lender shall, before 5:00 p.m., New York City time, on
such Business Day, make available to the Liquidity Agent at the
Liquidity Agent's address specified for such purpose, in
immediately available funds, a Liquidity Advance in a principal
amount equal to such Liquidity Lenders Percentage multiplied by
the aggregate Commercial Paper Notes Outstanding; provided,
--------
however, that no Liquidity Lender will be required to make any
-------
Liquidity Advance to the extent that such Liquidity Advance would
result in the aggregate principal amount of such Liquidity
Lender's Liquidity Advances Outstanding exceeding such Liquidity
Lenders Liquidity Commitment. After the Liquidity Agent's receipt
of such funds and upon fulfillment of the applicable conditions
set forth in Article VI, the Liquidity Agent will make such funds
available to Finco by 5:45 p.m., New York City time. Any
Liquidity Advance made pursuant to this Section 3.06(b) (ii)
shall be a Base Rate Advance subject to conversion in accordance
with the provisions of Section 3.08 hereof.
(iii) If at any time Finco's weighted average interest
rate on the Outstanding Commercial Paper Notes and Liquidity
Advances shall be in excess of 12% per annum, then, unless the
requirements for the continued issuance of Commercial Paper Notes
set forth in Section 2.01 shall have been complied with not later
than 11:00 a.m., New York City time, within 10 Business Days of
such determination, the Agent shall irrevocably request (provided
that Finco shall have delivered the notice required pursuant to
the last sentence of Section 2.01(d)), by delivering a Borrowing
Request to the Liquidity Agent (who will notify the other
Liquidity Lenders of such Borrowing Request not later than 12:00
noon, New York City time), a Borrowing consisting of Refunding
Advances not later than 11:15 a.m., New York City time, on such
tenth Business Day, that such Borrowing be made. In such case,
each Liquidity Lender shall make a Liquidity Advance in an
aggregate principal amount equal to such Liquidity Lender's
Percentage of the lesser of (i) the Aggregate Liquidity
Commitment as of such date minus the aggregate principal amount
of all Liquidity Advances Outstanding on such date as determined
immediately prior to such Borrowing Request and (ii) the
Outstanding Commercial Paper Notes on such date.
(c) Nature of Funding Obligations. The obligations of the
-----------------------------
Liquidity Lenders hereunder are several and not joint. All Liquidity
Advances under this Agreement shall be made by the Liquidity Lenders
simultaneously and proportionately to their respective Percentages, it
being understood that no Liquidity Lender shall be responsible for any
failure by any other Liquidity Lender to perform its obligation to make
a Liquidity Advance hereunder and that the Liquidity Commitment of any
Liquidity Lender shall not be increased or decreased as a result of the
failure by any other Liquidity Lender to perform its obligation to make
a Liquidity Advance. The failure of any Liquidity Lender to make
available to the Liquidity Agent its ratable share of any Borrowing
shall not relieve any other Liquidity Lender of its obligation hereunder
to make available to the Liquidity Agent such other Liquidity Lender's
pro rata share of such Borrowing on the date such funds are to be made
available pursuant to the terms of this Agreement. Notwithstanding the
foregoing, each Liquidity Lender shall continue to be obligated to make
Liquidity Advances upon a default by a Liquidity Lender as required by
Section 3.02(c); provided, however, that no Liquidity Lender
-------- -------
-9-
<PAGE>
shall be required to make any Liquidity Advance to the extent that such
Liquidity Advance would result in the aggregate principal amount of such
Liquidity Lender's Liquidity Advances Outstanding exceeding such
Liquidity Lender's Liquidity Commitment.
(d) Failure To Fund by Lender. Unless the Liquidity Agent shall
-------------------------
have been notified by any Liquidity Lender prior to 1:00 p.m., New York
City time, on the date of any Borrowing in respect of any Liquidity
Advances that such Liquidity Lender does not intend to make available to
the Liquidity Agent such Liquidity Lender's Liquidity Advances on such
date of Borrowing, the Liquidity Agent may assume that such Liquidity
Lender has made such amount available to the Liquidity Agent on such
date of Borrowing and the Liquidity Agent in its sole discretion may,
but shall not be obligated to, make available to Finco a corresponding
amount on such date of Borrowing. If such corresponding amount is not in
fact made available to the Liquidity Agent by such Liquidity Lender on
or prior to a date of Borrowing, such Liquidity Lender agrees to pay to
the Liquidity Agent forthwith on demand such corresponding amount
together with interest thereon, and Finco agrees to repay to the
Liquidity Agent forthwith on the Business Day immediately following the
date of demand therefor such corresponding amount together with interest
thereon, for each day from the date such amount is made available to
Finco until the date such amount is paid or repaid to the Liquidity
Agent, at, (i) in the case of such Liquidity Lender, the Federal Funds
Rate for the first Business Day and thereafter at the Base Rate, and
(ii) in the case of Finco, the interest rate that would be applicable at
the time to a Borrowing of Base Rate Advances made on such date of
Borrowing. If such Liquidity Lender shall pay to the Liquidity Agent
such corresponding amount, such amount so paid shall constitute such
Liquidity Lender's Liquidity Advance, and if both such Liquidity Lender
and Finco shall have paid and repaid, respectively, such corresponding
amount, the Liquidity Agent shall promptly pay over to Finco such
corresponding amount in same day funds, but Finco shall remain obligated
for all interest thereon. To the extent any such amount due to the
Liquidity Agent under this Section 3.06(d) has not been paid in full,
the Liquidity Agent may make a demand on the Agent to pay such amount in
accordance with Sections 2.01 and 5.02(b) of the Collateral Agreement.
SECTION 3.7. Disbursement of Funds. (a) Upon receipt of each
---------------------
Borrowing Request for Refunding Advances or for Revolving Advances, the
Liquidity Agent shall give to each Liquidity Lender prompt notice thereof and of
such Liquidity Lender's share of the Borrowing requested thereby. On or before
2:00 p.m., New York City time, on the proposed Borrowing Date, each Liquidity
Lender shall deposit with the Liquidity Agent same day funds in an amount equal
to such Liquidity Lender's Percentage of the requested Borrowing. Such deposit
will be made to a segregated trust account (Account No. 102884, the "Liquidity
Lender Account"), established by the Liquidity Agent or such other account,
which the Liquidity Agent shall specify from time to time by notice to the
Liquidity Lenders. No Liquidity Lender's obligation to make any Revolving
Advances or Refunding Advances, as the case may be, shall be diminished by any
other Liquidity Lender's failure to make any Revolving Advances or Refunding
Advances, as the case may be.
(b) Unless the Liquidity Agent determines that any condition
specified in Section 6.02, in the case of Revolving Advances, or Section
6.03, in the case of Refunding Advances, has not been satisfied, the
Liquidity Agent will remit the aggregate of the amounts of (i) Refunding
Advances so made available by the Liquidity Lenders to the Commercial
Paper Account, (ii) Commitment Termination Date Liquidity Advances so
made available by the Liquidity Lenders to the Termination Advance
Account and (iii) Revolving Advances so made available by the Liquidity
Lenders to the Collateral Account, in each case not later than 3:00
p.m., New York City time.
-10-
<PAGE>
SECTION 3.8. Continuation and Conversion Elections. By
-------------------------------------
delivering a Continuation/Conversion Notice to the Liquidity Agent (which will
give prompt notice to the Liquidity Lenders) on or before 11:15 a.m., New York
City time, on a Business Day, Finco may from time to time irrevocably elect that
all or any portion in an aggregate minimum amount of $5,000,000 and an integral
multiple of $1,000,000 of any Liquidity Advances be:
(a) in the case of Base Rate Advances, (i) on not less than three
nor more than five Business Days' prior notice, converted into LIBOR
Advances, or (ii) continued as Base Rate Advances; or
(b) in the case of LIBOR Advances, (i) on prior notice given not
less than three nor more than five Business Days prior to the end of the
related Interest Period, continued as LIBOR Advances or (ii) converted
into Base Rate Advances.
In the absence of delivery of a Continuation/Conversion Notice at least three
Business Days prior to the last day of the related Interest Period, in the case
of any LIBOR Advance, such LIBOR Advance shall, on such last day, automatically
convert to a Base Rate Advance. In the absence of delivery of a
Continuation/Conversion Notice at least three Business Days prior to the last
day of the related Interest Period, in the case of any Base Rate Advance, such
Base Rate Advance shall automatically continue as a Base Rate Advance. No
portion of the principal amount of any Liquidity Advances Outstanding may be
continued as, or be converted into, LIBOR Advances when any Amortization Event
has occurred and is continuing.
SECTION 3.9. LIBOR Funding. (a) Each Liquidity Lender may, if it
-------------
so elects, fulfill its obligation to make, continue or convert LIBOR Advances
hereunder by causing one of its foreign branches or Affiliates (or an
international banking facility created by such Liquidity Lender) to make or
maintain such LIBOR Advance; provided, however, that such LIBOR Advance shall
-------- -------
nonetheless be deemed to have been made and to be held by such Liquidity Lender,
and the obligation of Finco to repay such LIBOR Advance shall nevertheless be to
such Liquidity Lender for the account of such foreign branch, Affiliate or
international banking facility.
(b) Finco shall not be permitted to request, and the Liquidity
Lenders shall not be required to maintain, any number of Interest
Periods with respect to LIBOR Advances in effect at any time hereunder
in excess of 10.
SECTION 3.10. Liquidity Advance Notes. Each Liquidity Lender's
-----------------------
Revolving Advances and Refunding Advances (including its Commitment Termination
Date Liquidity Advance) under its Liquidity Commitment shall be evidenced by a
Revolving Note and a Refunding Note, respectively, each duly executed on behalf
of Finco, and each payable to the order of such Liquidity Lender in a maximum
principal amount equal in each case to such Liquidity Lender's original
Liquidity Commitment. Finco hereby irrevocably authorizes each Liquidity Lender
to make (or cause to be made) appropriate notations on the grid attached to such
Liquidity Lender's Liquidity Advance Notes (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 Liquidity Advances evidenced thereby. Such notations shall be conclusive
and binding on Finco absent manifest error; provided, however, that the failure
-------- -------
of any Liquidity Lender to make any such notation or any error in any such
notation shall not limit or otherwise affect any Obligations of Finco.
-11-
<PAGE>
ARTICLE IV.
Repayments, Prepayments, Interest and Fees, etc.
------------------------------------------------
SECTION 4.1. Repayments and Prepayments. Finco shall repay in
--------------------------
full the unpaid principal amount of each Liquidity Advance on the earlier to
occur of (i) the Scheduled Maturity Date and (ii) the date all Obligations are
declared or otherwise become due and payable under Section 9.02. Prior thereto,
Finco shall make repayments and prepayments in accordance with this Section
4.01.
(a) Voluntary Prepayments. From time to time on any Business Day,
---------------------
Finco may make a voluntary prepayment, in whole or in part, of the
outstanding principal amount of any Liquidity Advance; provided,
--------
however, that:
-------
(i) Finco shall, in the case of the voluntary prepayment
of any LIBOR Advance, give the Liquidity Agent at least three but
no more than five Business Days' prior written notice of its
intent to prepay such LIBOR Advance and Finco shall specify in
such prior written notice the amount of such prepayment;
(ii) all such voluntary prepayments which are partial
prepayments shall be in a minimum aggregate principal amount
equal to $5,000,000 and in an integral multiple of $1,000,000;
(iii) all such voluntary prepayments shall be applied,
unless otherwise specified by Finco, to the payment of, first,
pro rata among Base Rate Advances and then, pro rata among LIBOR
Advances having the same Interest Period in the inverse order of
their maturities; and
(iv) no such voluntary prepayment of any LIBOR Advance
may be made on any day other than the last day of the Interest
Period for such LIBOR Advance unless, as required by Section
5.04, breakage fees are paid in connection with such prepayment.
(b) Mandatory Prepayments. (i) Concurrently with any partial
---------------------
reduction or termination of the Aggregate Liquidity Commitment pursuant
to Section 3.03, all funds available on such day in the Collateral
Account for the payment of Liquidity Advances, as provided in Section
2.01 or 5.02, as applicable, of the Collateral Agreement, shall be
applied to repay as much of the Liquidity Advances (and interest accrued
thereon) as shall be necessary so that the sum of the aggregate
principal amount of Liquidity Advances Outstanding (other than
Commitment Termination Date Liquidity Advances) plus the Aggregate Face
Amount will not exceed the Aggregate Liquidity Commitment after giving
effect to such termination or reduction and, to the extent such funds
are not sufficient to pay such excess (and interest accrued thereon),
all funds subsequently deposited in the Collateral Account and available
for the payment of Liquidity Advances in accordance with the priorities
set forth in Section 2.01 or 5.02, as applicable, of the Collateral
Agreement shall be applied to pay such excess (and interest accrued
thereon) until so paid.
(ii) If, on any Business Day, a Borrowing Base Deficiency
exists or a Limited Amortization Event has occurred and is
continuing, all funds available for the payment of Commercial
Paper Notes or Liquidity Advances on such day in the Collateral
Account, as provided in Section 2.01 or 5.02, as applicable, of
the
-12-
<PAGE>
Collateral Agreement, shall be (A) first, deposited in the
-----
Commercial Paper Account for application to the payment of
maturing Commercial Paper Notes (and, in the case of deposits
made pursuant to Section 2.01 of the Collateral Agreement,
unmatured Commercial Paper Notes), and (B) second, applied to
------
repay Liquidity Advances (and accrued interest thereon) pro rata
--------
in accordance with their outstanding principal amounts as shall
be necessary so that after giving effect to such application
there shall be no such Borrowing Base Deficiency or such Limited
Amortization Event shall not be continuing and, to the extent
such funds or other amounts are not sufficient therefor, all
funds subsequently deposited in the Collateral Account and
allocated to the payment of Liquidity Advances in accordance with
the priorities set forth in Section 2.01 or 5.02 of the
Collateral Agreement shall be applied or set aside for such
applications to Liquidity Advances Outstanding until there shall
be no such Borrowing Base Deficiency or such Limited Amortization
Event shall not be continuing.
(iii) Each mandatory payment required by clause (i) (in
the case of a reduction or termination pursuant to Section 3.03)
or clause (ii) above shall, for purposes of Section 9.01(a) and
all other provisions of this Agreement, be due and payable in
full on the Business Day on which such reduction or termination
or such Borrowing Base Deficiency exists, whether or not
sufficient funds are then available to make such payment.
SECTION 4.2. Interest Provisions. Interest on the principal
-------------------
amount of Liquidity Advances Outstanding shall accrue and be payable in
accordance with this Section 4.02 and Section 4.03 hereof.
(a) Rates. (i) Pursuant to an appropriately delivered
-----
Borrowing Request or Continuation/Conversion Notice, Finco may elect
that Liquidity Advances comprising a Borrowing accrue interest at a rate
per annum:
(A) on that portion maintained from time to time as a Base
Rate Advance, equal to the Base Rate from time to time in effect
plus a margin of 1.00% per annum; or
(B) on that portion maintained as a LIBOR Advance, during
each Interest Period applicable thereto, equal to the sum of the
LIBOR for such Interest Period plus a margin of 2.00% per annum.
(ii) If any Liquidity Lender shall determine in good faith
that reserves under Regulation D of the Board ("Regulation D")
are required to be maintained by it in respect of, or that a
portion of its costs of maintaining reserves under Regulation D
is properly attributable to, one or more of its LIBOR Advances,
Finco shall pay to such Liquidity Lender additional interest on
the unpaid principal amount of each such LIBOR Advance from the
date such reserves were required to be maintained until such
principal amount is paid in full or converted into a Base Rate
Advance, at an interest rate per annum equal at all times to the
remainder obtained by subtracting (A) LIBOR for the Interest
Period for such LIBOR Advance from (B) the rate obtained by
dividing such LIBOR by an amount equal to one minus the LIBOR
Reserve Percentage (expressed as a decimal) of such Liquidity
Lender for such LIBOR Interest Period. Any Liquidity Lender
claiming any additional interest payable pursuant to this clause
(ii) shall provide a written certificate to the Liquidity Agent,
Finco and the Rating
-13-
<PAGE>
Agencies setting forth the amount of such additional interest and
reasonable detail as to the calculation thereof. Finco shall pay
such Liquidity Lender the amount shown as due on any such
certificate within 30 days following the date on which such
certificate was delivered to Finco.
(b) Post Default Rates. Without giving effect to Section 5.10
------------------
hereof, after the date on which any amount of any Liquidity Advance is
due and payable (whether on the last day of an Interest Period, on the
Scheduled Maturity Date, when a mandatory prepayment initially becomes
due or upon acceleration or otherwise), or after any other monetary
Obligation of Finco shall have become due and payable, Finco shall pay,
but only to the extent permitted by law, interest (after as well as
before judgment) on the principal amount of Liquidity Advances then
outstanding (whether or not the same shall then be due and payable) and
each other monetary Obligation hereunder (but only if the same shall
then be due and payable in accordance with the terms of this Agreement)
at a rate per annum equal to a margin of 2.00% per annum plus (i) in the
case of any Liquidity Advances then Outstanding and in respect of which
Interest Periods remain in effect, the respective interest rates then
applicable to such Liquidity Advances, and (ii) in all other cases, a
rate per annum equal to the rate per annum that would then be in effect
with respect to a Base Rate Advance.
SECTION 4.3. Payments of Interest. Accrued interest in respect
--------------------
of each Liquidity Advance shall be payable in arrears (whether by acceleration,
demand or otherwise) on each payment date set forth below:
(a) with respect to any Base Rate Advance, on the last day of
each applicable Interest Period (and, if such Interest Period shall
exceed three months, on the three-month anniversary of the commencement
of such Interest Period);
(b) with respect to any LIBOR Advance, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, on the three-month anniversary of the commencement of such
Interest Period);
(c) in the case of any payment or prepayment, in whole or in
part, of principal outstanding on any Liquidity Advance, on the date of
such payment or prepayment;
(d) with respect to any Base Rate Advance converted into a LIBOR
Advance on a day when interest would not otherwise have been payable
pursuant to clause (a), on the date of such conversion; and
(e) on that portion of any Liquidity Advance which is accelerated
pursuant to Section 9.02, immediately upon such acceleration.
Interest accrued on Liquidity Advances or other monetary Obligations arising
under this Agreement or any other Related Document after the date such amount is
due and payable shall be payable upon demand.
SECTION 4.4. Computation Basis. Interest accruing based on the
-----------------
Base Rate shall be computed on the basis of the actual number of days elapsed
and a 365 (or, if applicable, 366) day year. Interest accruing based on LIBOR
shall be computed on the basis of the actual number of days elapsed and a 360
day year.
-14-
<PAGE>
SECTION 4.5. Fees. (a) Commitment Fee. Finco agrees to pay to
---- --------------
the Liquidity Agent for the account of each Liquidity Lender an ongoing
commitment fee (the "Commitment Fee") equal to 0.225% per annum of the average
daily unused portion of each such Liquidity Lender's Liquidity Commitment, such
fee to accrue from the Closing Date until the Liquidity Commitment Termination
Date. The Commitment Fee shall be computed based on the actual number of days
elapsed and a year of 365 days. The Commitment Fee shall be payable in arrears
on the last Business Day of each calendar quarter occurring after the Closing
Date and on the Liquidity Commitment Termination Date.
(b) Upfront Fee. Finco agrees to pay to the Liquidity Agent
-----------
for the account of each Liquidity Lender, as applicable, an upfront fee
(the "Upfront Fee") equal to the sum of (i) .075% of the allocated
Liquidity Commitment of such Liquidity Lender if such Liquidity Lender's
initial liquidity commitment was equal to or greater than $50,000,000
and (ii) .050% of the allocated Liquidity Commitment of such Liquidity
Lender if such Liquidity Lender's initial liquidity commitment was equal
to or greater than $25,000,000 and less than $50,000,000, which sum
shall be payable immediately upon the Closing Date.
ARTICLE V.
Certain LIBOR and Other Provisions
----------------------------------
SECTION 5.1. LIBOR Lending Unlawful. If any Liquidity Lender
----------------------
shall reasonably determine (which determination shall, upon notice thereof to
Finco and the other Liquidity Lenders, be conclusive and binding on Finco) that
the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other Governmental
Authority asserts that it is unlawful, for such Liquidity Lender to make,
continue or maintain any Liquidity Advance as, or to convert any Liquidity
Advance into, a LIBOR Advance, the obligation of such Liquidity Lender to make,
continue or maintain or convert any such Liquidity Advance as a LIBOR Advance
shall, upon such determination, forthwith be suspended until such Liquidity
Lender shall notify the Liquidity Agent and Finco that the circumstances causing
such suspension no longer exist, and Finco shall immediately convert (in the
manner provided for in Section 3.08) all LIBOR Advances of such Liquidity Lender
into Base Rate Advances at the end of the then current Interest Periods with
respect thereto or sooner, if required by such law or assertion.
SECTION 5.2. Deposits Unavailable. If the Liquidity Agent shall
--------------------
have reasonably determined that:
(a) dollar deposits in the relevant amount and for the
relevant Interest Period are not available to all Reference Lenders in
the relevant market; or
(b) by reason of circumstances affecting all Reference
Lenders' relevant market, adequate means do not exist for ascertaining
the interest rate applicable hereunder to LIBOR Advances; or
(c) the Majority Banks have notified the Liquidity Agent that,
with respect to any interest rate otherwise applicable hereunder to any
LIBOR Advances the Interest Period for which has not then commenced,
such interest rate will not adequately reflect the cost to such Majority
Banks of making, funding or maintaining their respective LIBOR Advances
for such Interest Period;
-15-
<PAGE>
then, upon notice from the Liquidity Agent to Finco and the Liquidity Lenders,
the obligations of all Liquidity Lenders under Section 3.06 and Section 3.08 to
make or continue any Liquidity Advance as, or to convert any Liquidity Advances
into, LIBOR Advances shall forthwith be suspended until the Liquidity Agent
shall notify Finco and the Liquidity Lenders that the circumstances causing such
suspension no longer exist.
SECTION 5.3. Increased Costs, etc. Finco agrees to reimburse
--------------------
each Liquidity Lender if any change in, or the introduction, adoption,
interpretation or 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 of
competent jurisdiction increases or would increase the cost to such Liquidity
Lender of, or reduces or would reduce the amount of any sum receivable by such
Liquidity Lender in respect of, making, continuing or maintaining (or its
obligation to make, continue or maintain) any Liquidity Advance as, or of
converting (or of its obligation to convert) any Liquidity Advance into, a LIBOR
Advance and such amount is not otherwise recoverable by such Liquidity Lender
under Section 4.02(a)(ii) hereof. Such Liquidity Lender shall promptly notify
the Liquidity Agent, Finco and the Rating Agencies in writing of the occurrence
of any such event, such notice to state, in reasonable detail, the reasons
therefor and the additional amount required fully to compensate such Liquidity
Lender for such increased costs or reduced amount. Such additional amounts shall
be payable by Finco directly to such Liquidity Lender within five days of its
receipt of such notice and such notice shall, in the absence of demonstrable
error, be conclusive and binding on Finco. Finco will not be obligated, however,
to reimburse any Liquidity Lender for any increased cost pursuant to this
Section 5.03 unless such Liquidity Lender notifies Finco of such increased cost
within 180 days of such Liquidity Lender's actual knowledge of such increased
cost.
SECTION 5.4. Funding Losses. In the event any Liquidity 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
Liquidity Lender to make, continue or maintain any portion of the principal
amount of any Liquidity Advance as, or to convert any portion of the principal
amount of any Liquidity Advance into, a LIBOR Advance) as a result of:
(a) any conversion or repayment or prepayment (for any reason,
including as a result of the acceleration of the maturity of a LIBOR
Advance or the assignment of a LIBOR Advance pursuant to Section 5.09
hereof) of the principal amount of any LIBOR Advance on a date other
than the scheduled last day of the Interest Period applicable thereto;
(b) any Liquidity Advance not being made as a LIBOR Advance in
accordance with the Borrowing Request therefor; or
(c) any Liquidity Advance not being continued as, or converted
into, a LIBOR Advance in accordance with the Continuation/Conversion
Notice therefor;
then, after notice by such Liquidity Lender of such loss or expense to Finco
(with a copy to the Liquidity Agent and the Rating Agencies), Finco shall,
within five Business Days of its receipt thereof, pay directly to such Liquidity
Lender such amount as will (in the reasonable determination of such Liquidity
Lender) reimburse such Liquidity Lender for such loss or expense. Such written
notice (which shall include calculations in reasonable detail) shall, in the
absence of demonstrable error, be conclusive and binding on Finco.
-16-
<PAGE>
SECTION 5.5. Increased Capital Costs. If any change in, or the
-----------------------
introduction, adoption, interpretation or 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 of competent jurisdiction affects or would affect the
amount of capital required or reasonably expected to be maintained by any
Liquidity Lender or any Person directly or indirectly controlling such Liquidity
Lender, and such Liquidity Lender reasonably 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 Liquidity Commitment or the Liquidity Advances
made by such Liquidity Lender is reduced to a level below that which such
Liquidity Lender or such controlling Person would have achieved but for the
occurrence of any such circumstance, then, in any such case after notice from
time to time by such Liquidity Lender to Finco and the Rating Agencies, Finco
shall pay within five Business Days of demand directly to such Liquidity Lender
or to such controlling Person additional amounts sufficient to compensate such
Liquidity Lender or such controlling Person for such reduction in rate of
return. A statement of such Liquidity Lender as to any such additional amount or
amounts (including calculations thereof in reasonable detail), shall, in the
absence of demonstrable error, be conclusive and binding on Finco. In
determining such amount, such Liquidity Lender may use any method of averaging
and attribution that it (in its reasonable discretion) shall deem applicable.
SECTION 5.6. Taxes. (a) All payments by Finco of principal of,
-----
and interest on, the Liquidity Advances and all other amounts payable hereunder
shall (except as required by law) be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
other taxes, levies, imposts, deductions, fees, duties, withholdings or other
charges of any nature whatsoever imposed by any taxing authority, and all
liabilities with respect thereto ("Taxes"), but excluding income, franchise and
other similar taxes imposed on or measured by any Liquidity Lender's net income
(or similar taxes imposed in lieu of such taxes) by the United States of America
or any jurisdiction under the laws of which such Liquidity Lender is organized
or maintains an office (such excluded taxes being called "Excluded Taxes" and
--------------
taxes other than Excluded Taxes being called "Included Taxes"). In the event
--------------
that any withholding or deduction from any payment to be made by Finco hereunder
is required in respect of any Taxes pursuant to any applicable law, rule or
regulation, Finco will:
(i) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(ii) promptly forward to the Liquidity Agent an official
receipt or other documentation satisfactory to the Liquidity
Agent evidencing such payment to such authority; and
(iii) in the case of Included Taxes, pay to the Liquidity
Agent for the account of the Liquidity Lenders such additional
amount or amounts as is necessary to ensure that the net amount
actually received by each Liquidity Lender will equal the full
amount such Liquidity Lender would have received had no such
withholding or deduction been required.
Moreover, if any Included Taxes are directly asserted against the Liquidity
Agent or any Liquidity Lender with respect to any payment received by the
Liquidity Agent or such Liquidity Lender hereunder, the Liquidity Agent or such
Liquidity Lender, after taking into account such required withholdings or
deductions (including withholdings or deductions applicable to additional sums
payable under this Section 5.06) may pay such Included Taxes and Finco will
promptly pay such additional amounts (including any penalties, interest or
expenses) (other than any such amounts to the extent
-17-
<PAGE>
resulting from the gross negligence or wilful misconduct of the Liquidity Agent
or Liquidity Lender) as is necessary in order that the net amount received by
such person after the payment of such Included Taxes (including any Included
Taxes on such additional amount) shall equal the amount such person would have
received had such Included Taxes not been asserted.
(b) In addition, Finco shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies imposed on the Liquidity Agent or any Liquidity Lender
that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement and not constituting Excluded Taxes (such taxes being called
"Other Taxes").
(c) Within 10 days after written demand therefor, Finco shall
indemnify the Liquidity Agent and each Liquidity Lender for and hold it
harmless against the full amount of Included Taxes or Other Taxes
(including Included Taxes or Other Taxes of any kind payable in any
jurisdiction on amounts payable under this Section 5.06) imposed on or
paid by the Liquidity Agent or any Liquidity Lender and any liability
(including penalties, interest and expenses) (other than any liability
to the extent resulting from the gross negligence or wilful misconduct
of the Liquidity Agent or such Liquidity Lender) arising therefrom or
with respect thereto. A certificate as to the amount of any such payment
delivered to Finco by the Liquidity Agent or such Liquidity Lender, or
the Liquidity Agent on its behalf, shall be conclusive absent manifest
error.
(d) Each Liquidity Lender that is organized under the laws of a
jurisdiction other than the United States shall, prior to the initial
due date of any payments hereunder, or in the case of an Assignee
Lender, prior to the date on which it becomes a party to this Agreement,
and (to the extent permissible under then current law) from time to time
thereafter as reasonably requested by Finco or as required by law,
execute and deliver to Finco and the Liquidity Agent, one or more (as
Finco or the Liquidity 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 Person is exempt from withholding or deduction of Taxes. If the
form provided by a Liquidity Lender prior to the initial date of any
payments hereunder, or, in the case of an Assignee Lender, prior to the
date on which it becomes a party to this Agreement, or in either case at
the time of a change in funding office, indicates a United States
withholding tax in excess of zero, then withholding tax at such rate
shall be considered Excluded Taxes unless and until such Liquidity
Lender or Assignee Lender provides the appropriate forms certifying that
a lesser rate applies, whereupon withholding tax at such lesser rate
only shall be considered Excluded Taxes; provided, however, that, if at
-------- -------
the date an Assignee Lender first becomes a party to this Agreement the
applicable assignor was entitled to payments under Section 5.06(a) with
respect to United States withholding taxes, then, to such extent, the
term Included Taxes shall include (in addition to amounts otherwise
included in Included Taxes) United States withholding taxes other than
Excluded Taxes, if any, applicable with respect to the Assignee Lender
on such date. Notwithstanding the foregoing, Finco shall not be required
to pay any increased amount under this Section 5.06 to any Liquidity
Lender that is organized under the laws of a jurisdiction other than the
United States if such Liquidity Lender fails to comply with the
requirements set forth in this paragraph; provided, however, that should
-------- -------
a Liquidity Lender become subject to Taxes because of its failure to
deliver a form required hereunder, Finco shall take such steps at the
Liquidity Lender's expense as such Liquidity Lender shall reasonably
request to assist such Liquidity Lender to recover such Taxes.
-18-
<PAGE>
(e) Each Liquidity Participant acquiring participating interests
of a Liquidity Lender pursuant to Section 11.11(b) shall be entitled to
the benefits of this Section 5.06 to the same extent as if it were a
Liquidity Lender and had acquired its interest by assignment pursuant to
Section 11.11(a). A Liquidity Participant that is organized under the
laws of a jurisdiction other than the United States shall comply with
the requirements set forth in Section 5.06(d) as though it were a
Liquidity Lender.
SECTION 5.7. Payments, Computations, etc. Unless otherwise
---------------------------
expressly provided, all payments by Finco pursuant to this Agreement, the
Liquidity Advance Notes and any other Liquidity Document shall be made by Finco
to the Liquidity Agent for the pro rata account, on the basis of Liquidity
Advances Outstanding, or if no Liquidity Advances are outstanding, on the basis
of Liquidity Commitments, of the Liquidity Lenders entitled to receive such
payment. All such payments required to be made to the Liquidity Agent by Finco
shall be made, without setoff, deduction or counterclaim prior to 3:00 p.m, New
York City time (and, to the extent that payments from Finco are received after
such time, such payments will be deemed to have been made on the next Business
Day) on the date due, in same day or immediately available funds, to the account
established pursuant to Section 3.07(a) or such other account as the Liquidity
Agent shall specify from time to time by notice to Finco. The Liquidity Agent
shall promptly upon receipt thereof remit in same day funds to each Liquidity
Lender its share, if any, of such funds received by the Liquidity Agent for the
account of such Liquidity Lender. 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 the second proviso of the definition of the
term "Interest Period" with respect to LIBOR Advances) be made on the next
succeeding Business Day and such extension of time shall be included in
computing interest in connection with such payment.
SECTION 5.8. Sharing of Payments. If any Liquidity Lender shall
-------------------
obtain any payment or other recovery (whether voluntary or involuntary) on
account of any Liquidity Advance (other than pursuant to the terms of Sections
5.03, 5.04, 5.05 and 5.06) in excess of its pro rata share of payments, on the
basis of Liquidity Advances Outstanding, or if no Liquidity Advances are
outstanding, on the basis of Liquidity Commitments, then or therewith obtained
by all Liquidity Lenders, such Liquidity Lender shall purchase from the other
Liquidity Lenders such participation in Liquidity Advances made by them as shall
be necessary to cause such purchasing Liquidity Lender to share the excess
payment or other recovery with each of them on a pro rata basis, computed on the
basis of each Liquidity Lender's Liquidity Advances Outstanding or Liquidity
Commitment, as the case may be, on the date of such computation; provided,
--------
however, that if all or any portion of the excess payment or other recovery is
- -------
thereafter recovered from such purchasing Liquidity Lender, the purchase shall
be rescinded and each Liquidity Lender which has sold a participation to the
purchasing Liquidity Lender shall repay to the purchasing Liquidity Lender the
purchase price to the ratable extent of such recovery together with an amount
equal to such selling Liquidity Lender's ratable share (according to the
proportion of (a) the amount of such selling Liquidity Lender's required
repayment to the purchasing Liquidity Lender to (b) the total amount so
recovered from the purchasing Liquidity Lender) of any interest or other amount
paid or payable by the purchasing Liquidity Lender in respect of the total
amount so recovered. Finco agrees that any Liquidity Lender so purchasing a
participation from another Liquidity Lender pursuant to this Section may, to the
fullest extent permitted by law, exercise all its rights of payment with respect
to such participation as fully as if such Liquidity Lender were the direct
creditor of Finco in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law, any Liquidity Lender receives a
secured claim to which this Section applies, such Liquidity Lender shall, to the
extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Liquidity Lenders entitled under this
Section to share in the benefits of any recovery on such secured claim.
-19-
<PAGE>
SECTION 5.9. Replacement of Liquidity Lenders. (a) If at any
--------------------------------
time the credit rating assigned to the short-term obligations of any Liquidity
Lender (an "Affected Liquidity Lender") is withdrawn or downgraded below the
rating then assigned by S&P or Moody's, respectively, to the Commercial Paper
Notes, Finco may, upon five Business Days' prior written notice given to the
Liquidity Agent and such Affected Liquidity Lender, replace such Affected
Liquidity Lender with an Eligible Liquidity Lender or a Liquidity Lender already
party to this Agreement and such replacement shall be made in accordance with
clause (a) of Section 11.11 and the proviso of clause (b) of this Section 5.09;
provided, however, that no such replacement pursuant to this clause (a) shall be
- -------- -------
effective unless S&P and Moody's shall have confirmed in writing to Finco and
the Liquidity Agent that such replacement (i) if the Commercial Paper Notes are
rated at least A-1 by S&P or Prime-1 by Moody's, would not result in a
withdrawal or reduction of such rating by such Rating Agency to the Commercial
Paper Notes or (ii) if the Commercial Paper Notes are then rated less than A-1
by S&P or Prime-1 by Moody's, would result in a confirmation or upgrade of such
rating by such Rating Agency.
(b) In the event that (i) any Liquidity Lender shall have
notified the Liquidity Agent or Finco (and shall not have retracted such
notification) that its compliance with any of its obligations hereunder
would be unlawful, (ii) any Liquidity Lender fails to extend its
Liquidity Commitment upon request, (iii) Finco is required pursuant to
Section 4.02(a)(ii) or Sections 5.03 through 5.06 to make any payment to
or on behalf of any Liquidity Lender (or would be so required on or
prior to the next following date on which a payment hereunder (other
than pursuant to Section 5.06) is required to be made to or for any such
Liquidity Lender) or (iv) any Liquidity Lender shall have failed to fund
any Liquidity Advance when required hereunder, then Finco shall have the
right, at its own expense, upon notice to such Liquidity Lender and the
Liquidity Agent, to require such Liquidity Lender, and such Liquidity
Lender hereby agrees, to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in Section
11.11) all the interests, rights and obligations of such Liquidity
Lender to an Eligible Liquidity Lender provided by Finco; provided,
--------
however, that (w) no such assignment shall conflict with any law, rule,
-------
regulation or order of any Governmental Authority, (x) such assignment
shall be without recourse, representation and warranty and shall be on
terms and conditions reasonably satisfactory to such replaced Liquidity
Lender and such replacement Eligible Liquidity Lender, (y) the purchase
price paid by such replacement Eligible Liquidity Lender shall be in an
amount equal to the aggregate amount of all Liquidity Advances owed to
such replaced Liquidity Lender, and (z) Finco or such Eligible Liquidity
Lender, as the case may be, shall pay to such replaced Liquidity Lender
in same day funds on the date of such assignment the principal of and
interest accrued to the date of payment on the Liquidity Advances made
by such replaced Liquidity Lender hereunder and all other amounts
accrued for such replaced Liquidity Lender's account or owed to it
hereunder, including those amounts owed pursuant to Section 4.02(a)(ii)
and Sections 5.03 through 5.06.
(c) In the event that an Affected Liquidity Lender has not been
replaced pursuant to this Section 5.09:
(i) Finco may request such Affected Liquidity Lender to,
and, upon such request, such Affected Liquidity Lender shall,
subject to the provisions of Section 3.01(b) hereof, make a
Refunding Advance to Finco in an amount equal to the lesser of
(A) such Affected Liquidity Lender's Commitment reduced by
Liquidity Advances previously made by such Affected Liquidity
Lender and (B) such Affected Liquidity Lender's Percentage of the
Aggregate Face Amount on the date of such Refunding Advance; and
-20-
<PAGE>
(ii) the aggregate amount of any previously made Liquidity
Advances of such Affected Liquidity Lender that are Outstanding
on such date shall be converted into, and for all purposes of
this Agreement shall be treated as Refunding Advances.
SECTION 5.10. Order and Priority. Notwithstanding any other
------------------
provision of this Agreement (other than Section 4.02(b)), the Liquidity Agent
and the Liquidity Lenders agree that the Obligations of Finco to the Liquidity
Agent and the Liquidity Lenders hereunder shall be payable in the order and
priority set forth in Sections 2.01 and 5.02(b), as applicable, of the
Collateral Agreement. The Liquidity Agent and the Liquidity Lenders agree that,
during any period prior to the 18-month anniversary of the Amortization
Commencement Date that Commercial Paper Notes shall be outstanding (any such
period, the "Specified Period"), the Obligations of Finco shall be due and
----------------
payable only to the extent that Finco's assets are sufficient to pay the same.
If, during any such Specified Period, the Liquidity Lenders shall exercise their
rights, pursuant to Section 9.02(d), to accelerate the Obligations, such
acceleration shall have the limited effect of (i) causing the interest rates
contemplated in Section 4.02(b) to become effective with respect to the
outstanding Obligations and (ii) allowing the Liquidity Lenders, in any
determination of the Liquidity Lenders' allocative share of any disbursement to
be made to Secured Parties under the Collateral Agreement or otherwise among
creditors of Finco, to treat all of the Obligations as then being due and
payable. No claims of the Liquidity Lenders arising under or in connection with
this Agreement are intended to be impaired or waived by this Section 5.10.
ARTICLE VI.
Conditions Precedent
--------------------
SECTION 6.1. Conditions to Effectiveness. This Agreement shall
---------------------------
become effective on the date (the "Closing Date") when all of the conditions set
forth in this Section 6.01 have been satisfied (and each Liquidity Lender's
signature hereto evidences that such conditions have been satisfied with respect
to such Liquidity Lender).
(a) Organic Documents, Resolutions. The Liquidity Agent shall
------------------------------
have received: (i) a copy of Finco's certificate of incorporation,
including all amendments thereto, certified as of a recent date by the
Secretary of State of the State of Delaware, and a certified copy of all
other Organic Documents of Finco, and a certificate as to the good
standing of Finco as of a recent date, from such Secretary of State;
(ii) a certificate of the Secretary of Finco dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
By-laws of Finco as in effect on the Closing Date and at all times since
a date prior to the date of the resolutions described in clause (B)
below, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of Finco authorizing
the execution, delivery and performance of this Agreement and each of
the other Related Documents to which Finco is a party and the
transactions contemplated hereby and thereby, and that such resolutions
have not been modified, rescinded or amended and are in full force and
effect, (C) that the certificate of incorporation of Finco has not been
amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above and
(D) as to the incumbency and specimen signature of each officer
executing this Agreement and each of the other Related Documents to
which Finco is a party or any other document delivered in connection
herewith or therewith on behalf of Finco; and (iii) a certificate of
another officer as to the incumbency and specimen signature of the
Secretary executing the certificate pursuant to clause (ii) above.
-21-
<PAGE>
(b) Liquidity Agreement. The Liquidity Agent shall have received
-------------------
executed counterparts of this Agreement, dated as of the Closing Date
and duly executed by Finco, the Liquidity Agent, and each Liquidity
Lender.
(c) Liquidity Advance Notes. The Liquidity Agent shall have
-----------------------
received, for the account of each Liquidity Lender, such Liquidity
Lender's LiquidityAdvance Notes duly executed and delivered by Finco.
(d) Collateral Agreement. The Liquidity Agent shall have
--------------------
received executed counterparts of the Collateral Agreement, dated as
of the Closing Date, duly executed by Finco, Leasco, the Agent, the
Liquidity Agent, the Depositary and the Dealer.
(e) Loan Agreement. The Liquidity Agent shall have received
--------------
executed counterparts of the Loan Agreement, dated as of the Closing
Date, duly executed by Finco and Leasco, and copies of all documents
and opinions required to be delivered to Finco thereunder, and all
conditions to the effectiveness thereof set forth therein shall have
been satisfied in all respects.
(f) Depositary Agreement. The Liquidity Agent shall have
--------------------
received executed counterparts of the Depositary Agreement, dated as
of the Closing Date, duly executed by Finco and the Depositary, and
all of the conditions to the effectiveness thereof set forth therein
shall have been satisfied in all respects.
(g) Dealer Agreement. The Liquidity Agent shall have received
----------------
executed counterparts of the Dealer Agreement, dated as of the Closing
Date, duly executed by Finco and each Dealer, and all of the
conditions to the effectiveness thereof set forth therein shall have
been satisfied in all respects.
(h) Closing Date Certificate. The Liquidity Agent shall have
------------------------
received a Closing Date Certificate, dated the Closing Date, duly
executed and delivered by an Authorized Officer of Finco, in which
Finco shall have represented and warranted that (i) the
representations and warranties of Finco in the Related Documents are
true and correct (in all material respects to the extent any such
representations and warranties do not incorporate a materiality
limitation in their terms) as of the Closing Date, except to the
extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties shall
be true and correct (in all material respects to the extent any such
representations and warranties do not incorporate a materiality
limitation in their terms) as of such earlier date), (ii) that no
Amortization Event, Limited Amortization Event or, to the best of such
Authorized Officer's knowledge, Potential Amortization Event or
Potential Limited Amortization Event has occurred and is continuing,
(iii) the information contained in the Offering Memorandum is true and
correct in all material respects and does not omit to state any
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading (iv)
$7,000,000 is on deposit in the Cash Reserve Account (and such amount
will be equal to or greater than 2.00% of the Aggregate Outstanding CP
expected to be issued hereunder on the first date upon which
Commercial Paper Notes are issued).
(i) Accounts. The Commercial Paper Account, the Termination
--------
Advance Account, the Cash Reserve Account, the Collateral Account and
the Liquidity Lender Account shall have been established and shall be
in full force and effect.
-22-
<PAGE>
(j) Rating Letters. The Liquidity Agent shall have received as
--------------
of the Closing Date a confirmation letter from each of S&P and Moody's
to the effect that the Commercial Paper Notes shall have been given a
rating of at least A-1 by S&P and Prime-1 by Moody's, which ratings
shall be in full force and effect.
(k) Vehicles. Leasco shall have good and marketable title to
--------
each Vehicle purchased or financed by it with the proceeds of the
Loans, free and clear of all Liens and encumbrances, except for
Permitted Liens and except for those Initial Vehicles subject to the
Vehicle Title Nominee Agreement.
(l) Assignment and Security Interest. (i) Leasco shall have
--------------------------------
granted to the Agent, for the benefit of Finco and the Agent on behalf
of the Secured Parties, a first priority security interest in the Loan
Collateral (including all Vehicles), the obligations with respect to
which will be retired by Leasco through the Repayment Distribution, or
hereafter purchased by, Leasco with the proceeds of Loans and (ii)
Finco shall have granted to the Agent a first priority security
interest in its right, title and interest in and to the Assigned
Collateral.
(m) [Reserved].
(n) Solvency Certificate. The Liquidity Agent shall have
--------------------
received a certificate, dated as of the Closing Date, and duly
executed by a Financial Officer of Finco to the effect that Finco will
be solvent after giving effect to the transactions contemplated by
this Agreement, each of the other Related Documents and the issuance
and sale of the Commercial Paper Notes.
(o) Closing Fees and Expenses. The Liquidity Agent shall have
-------------------------
received for its own account and for the account of the Liquidity
Lenders any fees and expenses due and payable pursuant to Section 4.05
and Section 11.03 and any fees and expenses due and payable pursuant
to any fee letters or commitment letters entered into with any
Liquidity Lender and/or the Liquidity Agent.
(p) Opinions. The Liquidity Agent shall have received (i)
--------
opinions of Willkie Farr & Gallagher, special counsel to Finco,
substantially in the form of Exhibits M-1and M-2 hereto addressed to
the Liquidity Agent and the Liquidity Lenders hereto and (ii) opinions
of counsel to Finco relating to the perfection of the security
interest created pursuant hereto on behalf of the Secured Parties in
the form of Exhibit N hereto.
(q) Notation of Liens. The Liquidity Agent shall have received
-----------------
evidence (which, in the case of the filing of financing statements on
form UCC-1, may be telephonic confirmation of such filing) that all
filings (including filings of financing statements on form UCC-1) and
recordings have been accomplished (or, in the case of Certificates of
Title subject to the provisions of the Vehicle Title Nominee Agreement
as of the Closing Date are in the process of being finalized) as may
be required by law to establish, perfect, protect and preserve the
rights, titles, interests, remedies, powers, privileges, licenses and
security interest of (a) the Agent in the Loan Collateral and (b) the
Agent in the Assigned Collateral, in each case for the benefit of the
Secured Parties.
(r) Offering Materials. Each offering circular, offering
------------------
memorandum (including the Offering Memorandum) or information circular
to be used by Finco or the Dealers in
-23-
<PAGE>
connection with the offer or sale of Commercial Paper Notes, insofar
as it describes or refers to any Liquidity Lender, shall be reasonably
satisfactory to such Liquidity Lender.
(s) Satisfactory Legal Form. This Agreement, each of the other
-----------------------
Related Documents and all other documents executed or submitted
pursuant hereto or thereto by or on behalf of Finco shall have been
received by the Liquidity Agent and its counsel.
(t) Credit Rating of Initial Liquidity Lenders. As of the
------------------------------------------
Closing Date each initial Liquidity Lender shall have a credit rating
assigned to its short-term obligations of at least A-1 by S&P and
Prime-1 by Moody's.
(u) Vehicle Title Nominee Agreement. The Liquidity Agent shall
-------------------------------
have received an executed copy of the Vehicle Title Nominee Agreement
substantially in the form of Exhibit E to the Loan Agreement.
(v) Lease. The Liquidity Agent shall have received an executed
-----
copy of the Lease dated the Closing Date, substantially in the form of
Exhibit L hereto.
(w) Fee Letter. The Liquidity Agent shall have received an
----------
executed copy of the Fee Letter.
SECTION 6.2. Conditions to the Making of Each Revolving
------------------------------------------
Advance. The obligation of any Liquidity Lender to make any Revolving Advance
- -------
((including any continuation or conversion thereof pursuant to Section 3.08)
except as otherwise specified below) hereunder is subject to the satisfaction of
the following conditions:
(a) Representations and Warranties. On the date of the making of
------------------------------
such Revolving Advance (other than any continuation or conversion
thereof pursuant to Section 3.08) and after giving effect thereto, the
representations and warranties of Finco set forth in Article VII
hereof, or in any other Related Document to which Finco is a party,
shall be true and correct (in all material respects to the extent any
such representations and warranties do not incorporate a materiality
limitation in their terms) with the same effect as if then made
(unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct (in all
material respects to the extent any such representations and
warranties do not incorporate a materiality limitation in their terms)
as of such earlier date).
(b) No Amortization Event. On the date of the making of such
---------------------
Revolving Advance, continuation or conversion, and after giving effect
thereto, no Amortization Event shall have occurred and be continuing
and Finco's right to issue Commercial Paper Notes shall not have been
terminated pursuant to this Agreement.
(c) No Borrowing Base Deficiency. A Borrowing Base Deficiency
----------------------------
shall not exist after giving effect to the application of funds in
accordance with Section 5.02 of the Collateral Agreement and the
making of such Revolving Advance, continuation or conversion would not
result in a Borrowing Base Deficiency.
(d) Attachments. Anything herein to the contrary
-----------
notwithstanding, Finco shall not request (and the Agent on its behalf
shall not be permitted to request) Revolving Advances after Finco has
received notice that any of the Accounts or the Commercial Paper
Account or any funds on deposit in, or otherwise to the credit of any
thereof are or have become subject to
-24-
<PAGE>
any stay, writ, judgment, warrant of attachment, execution or similar
process; provided, however, that if any such stay, writ, judgment,
-------- -------
warrant of attachment, execution or similar process is removed or
dismissed, Finco may recommence the requesting of Revolving Advances.
(e) Receipt of Monthly Vehicle Statement. The Liquidity Agent
------------------------------------
shall have received, on or prior to the twentieth day of each month (or
if not a Business Day, on the next succeeding Business Day), a Monthly
Vehicle Statement relating to the Collateral as of the last Business Day
of the immediately preceding month occurring on or immediately preceding
such date.
(f) Borrowing Request. The Liquidity Agent shall have received
-----------------
a Borrowing Request for such Borrowing.
(g) Issuance Certificate. The Liquidity Agent shall have
-------------------
received an Officer's Certificate in the form of Exhibit O hereto, dated
the date of the making of such Revolving Advance and duly executed and
delivered by an Authorized Officer of Finco.
(h) Cash Reserve. The amount of cash in the Cash Reserve Account
------------
will be equal to or greater than 2.00% of Aggregate Outstandings.
SECTION 6.3 Conditions Precedent to the Making of Each
------------------------------------------
Refunding Advance. The obligation of any Liquidity Lender to make any Refunding
- -----------------
Advance (including any Commitment Termination Date Liquidity Advance) shall be
subject to the satisfaction of the following conditions at the time of making of
such Refunding Advance:
(a) No Bankruptcy. No Event of Bankruptcy of the type described
-------------
in clauses (a) or (b) of the definition thereof with respect to Finco
shall have occurred and be continuing.
(b) No Borrowing Base Deficiency. A Borrowing Base Deficiency
----------------------------
shall not exist after giving effect to the application of such Refunding
Advance; provided, however, that this provision shall not release the
-------- -------
Liquidity Lenders from the obligation (upon receipt of a Borrowing
Request in the appropriate amount) to make Refunding Advances up to the
amount of the then current Borrowing Base that would not cause a
Borrowing Base Deficiency to exist.
(c) Borrowing Request. The Liquidity Agent shall have received a
-----------------
Borrowing Request for such Borrowing.
(d) Issuance Certificate. The Liquidity Agent shall have
--------------------
received an Officer's Certificate in the form of Exhibit O hereto, dated
the date of the making of such Refunding Advance and duly executed and
delivered by an Authorized Officer of Finco.
(e) Enhancement. The Enhancement Test Percentage shall be
-----------
greater than zero.
-25-
<PAGE>
ARTICLE VII.
Representations and Warranties
------------------------------
To induce the Liquidity Lenders and the Liquidity Agent to enter
into this Agreement and to make Liquidity Advances hereunder, Finco represents
and warrants to the Liquidity Agent and each Liquidity Lender as set forth in
this Article VII.
SECTION 7.1. Organization; Ownership; Power; Qualification.
---------------------------------------------
Finco (a) is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has all requisite
power and authority to own its property and assets and to carry on its business
as now conducted and as proposed to be conducted, (c) is qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect, and (d) has the
corporate power and authority to execute, deliver and perform its obligations
under each of the Related Documents and each other agreement or instrument
contemplated hereby to which it is or will be a party and to borrow hereunder.
(b) There have been no amendments to the Organic Documents of
Finco since the respective dates of the certified copies furnished to
the Liquidity Agent pursuant to Section 6.01(a), other than amendments,
if any, not prohibited by this Agreement (copies of which have been
furnished to the Liquidity Agent).
SECTION 7.2. Authorization. The execution, delivery and
-------------
performance by Finco of each of the Related Documents, the borrowings hereunder
and the other transactions contemplated hereby and by the other Related
Documents (collectively, the "Transactions") (a) have been duly authorized by
------------
all requisite corporate and, if required, stockholder action, (b) will not
violate any provision of the certificate or articles of incorporation or other
constitutive documents or by-laws of Finco and (c) will not (i) violate (A) any
material provision of any law, statute, rule or regulation, (B) any order of any
Governmental Authority or (C) any material provision of any indenture, agreement
or other instrument to which Finco is a party or by which Finco or any of its
property is or may be bound, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under, or
give rise to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under, any such indenture, agreement or other
instrument or (iii) result in the creation or imposition of any Lien upon or
with respect to any property or assets now owned or hereafter acquired by Finco
(other than any Lien created hereunder, under the Collateral Agreement or
Permitted Liens).
SECTION 7.3. Enforceability. This Agreement has been duly
--------------
executed and delivered by Finco and constitutes, and each other Related Document
when executed and delivered by each party thereto will constitute, a legal,
valid and binding obligation of such party enforceable against such party in
accordance with its terms.
SECTION 7.4. Approvals. No action, consent or approval of,
---------
registration or filing with or any other action by any Governmental Authority or
any other Person is or will be required in connection with the Transactions,
except for the filing of Uniform Commercial Code financing statements.
SECTION 7.5. Financial Information; Financial Condition. All
------------------------------------------
balance sheets, all statements of operations, of shareholders' equity and of
cash flow, and other financial data (other than
-26-
<PAGE>
projections) which have been or shall hereafter be furnished by Finco to
Liquidity Lenders pursuant to Section 8.01(a), have been and will be prepared in
accordance with GAAP (to the extent applicable) and do and will present fairly
the financial condition of the parties which are the subject thereof as of the
dates thereof and the results of their operations for the periods covered
thereby, subject, in the case of all unaudited statements, to normal year-end
adjustments and lack of footnotes and presentation items.
SECTION 7.6. Litigation; Compliance with Laws. (a) There are
--------------------------------
no actions, suits or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of Finco, threatened
against or affecting Finco or any business, property or rights of Finco (i) that
involve any Related Document or the Transactions or (ii) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.
(b) Neither Finco nor any of its respective material properties
or assets is in violation of, nor will the continued operation of its
material properties and assets as currently conducted violate, any law,
rule or regulation, nor is in default with respect to any judgment,
writ, injunction, decree or order of any Governmental Authority, where
such violation or default could reasonably be expected to result in a
Material Adverse Effect.
SECTION 7.7. Employee Benefit Plans. Each of Finco and its
----------------------
ERISA Affiliates is in compliance in all material respects with the applicable
provisions of ERISA, the Code and the regulations and published interpretations
thereunder with respect to Plans and Multiemployer Plans. Neither Finco nor any
of its ERISA Affiliates (a) maintains or contributes to or is or has within the
past five years been required to maintain or contribute to, or has any
obligation with respect to, a Plan or a Multiemployer Plan nor (b) will be
required to maintain or contribute to a Plan or a Multiemployer Plan prior to
the termination of this Agreement or during such period that Leasco has any
obligations to Finco under this Agreement. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with other such ERISA
Events, could reasonably be expected to result in a Material Adverse Effect.
SECTION 7.8. Tax Filings. Finco and each consolidated,
-----------
combined or affiliated group of which Finco is a member (a "consolidated group")
have filed all tax returns which have been required to be filed by them and have
paid all taxes, including all payroll taxes and Federal and state withholding
taxes, and all assessments payable by them that have become due, other than
those taxes and assessments that are not yet delinquent or that are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been established, and are being maintained, in accordance
with GAAP. As of the date hereof, there is no ongoing audit (other than routine
sales tax audits and other routine audits) or, to Finco's knowledge, other
governmental investigation of the tax liability of Finco or any such
consolidated group and there is no unresolved claim by a taxing authority
concerning Finco's or such consolidated group's tax liability for any period for
which returns have been filed or were due other than those being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves have been established, and are being maintained, in accordance with
GAAP. Finco has paid all fees and expenses required to be paid by it in
connection with the conduct of its business, the maintenance of its corporate
existence and its qualification as a foreign corporation authorized to do
business in each State in which it is required to so qualify, except where the
failure to pay any such fees and expenses is not reasonably likely to have a
Material Adverse Effect.
-27-
<PAGE>
SECTION 7.9. No Material Misstatements. None of the Offering
-------------------------
Memorandum nor any other information, report, financial statement, exhibit or
schedule furnished in writing by or on behalf of Finco to the Liquidity Agent,
the Agent or any Liquidity Lender in connection with the negotiation of any
Related Document or included therein or delivered pursuant thereto
(collectively, "information") contained, contains or will contain any material
-----------
misstatement of fact or omitted, omits or will omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were, are or will be made, not misleading, provided, that (a)
--------
the statements therein describing documents and agreements are summaries only
and as such are qualified in their entirety by reference to such documents and
agreements, (b) as to information therein that is specified as having been
supplied by Persons other than Finco or an Affiliate of Finco, the foregoing
representation is limited to the knowledge of Finco, (c) to the extent any such
information was based upon or constitutes a forecast or projection, Finco
represents only that it acted in good faith and utilized reasonable assumptions
and due care in the preparation of such information and (d) to the extent any
such information was subsequently replaced, prior to the date hereof, by other
information expressly correcting such earlier information (and either the
Liquidity Agent or the Collateral Agent was expressly informed by or on behalf
of Finco that such other information was correcting such earlier information),
the foregoing representation does not apply to such earlier information.
SECTION 7.10. Investment Company Act; Public Utility Holding
----------------------------------------------
Company Act; Securities Act. Finco is not (a) an "investment company" as
- ---------------------------
defined in, or subject to regulation under, the Investment Company Act or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
(b) Neither the entering into or performance by Finco of this
Agreement nor the issuance of the Commercial Paper Notes under the
circumstances contemplated by the Related Documents violates any
provision of the Act or requires any consent, approval or authorization
of, or registration with, the Securities Exchange Commission or any
other governmental or public body or authority. It is not necessary in
connection with the issuance of the Commercial Paper Notes under the
circumstances contemplated by this Agreement and the other Related
Documents to register the Commercial Paper Notes under the Act. It is
not necessary in connection with the issuance of the Commercial Paper
Notes under the circumstances contemplated by this Agreement and the
other Related Documents to qualify any indenture under the Trust
Indenture Act of 1939, as amended.
SECTION 7.11. Margin Regulations. (a) Finco is not engaged
------------------
principally, or as one of its important activities, in the business of extending
credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Liquidity Advance hereunder
will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a violation of,
or that is inconsistent with, the provisions of the Regulations of the
Board, including Regulation G, T, U or X.
SECTION 7.12. Ownership; Subsidiaries. (a) 100% of the common
-----------------------
stock of Finco is owned by TRS; and
(b) Finco has no Subsidiaries and owns no capital stock of, or
other interest in, any other Person.
-28-
<PAGE>
SECTION 7.13. Solvency. Immediately after the consummation of
--------
the Transactions to occur on or after the Closing Date and immediately following
the making of each Loan made on the Closing Date and after giving effect to the
application of the proceeds of such Loans, (i) the fair value of the assets of
Finco, at a fair valuation, will exceed its debts and liabilities, subordinated,
contingent or otherwise; (ii) the present fair saleable value of the property of
Finco will be greater than the amount that will be required to pay the probable
liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured;
(iii) Finco will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (iv) Finco will not have unreasonably small capital with which to
conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted following the Closing Date.
SECTION 7.14. Title to Assets; Security Interests. (a) Finco
-----------------------------------
has good and marketable title to all its material properties and assets, except
for minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties and assets for
their intended purposes.
(b) All material properties and assets of Finco are free and
clear of Liens, other than Permitted Liens.
(c) Except as set forth on Schedule 7.14, Finco does not own or
lease any property of any kind.
(d) No financing statement has been filed by any Person in any
jurisdiction, other than those filed pursuant to the Related Documents,
which names Finco as the debtor.
SECTION 7.15. Burdensome Provisions. (a) Finco is not a party
---------------------
to any agreement or instrument or subject to any corporate restriction that has
resulted or could reasonably be expected to result in a Material Adverse Effect.
(b) Finco is not in default in any manner under any provision of
any indenture or other agreement or instrument evidencing Indebtedness,
or any other material agreement or instrument to which it is a party or
by which it or any of its properties or assets are or may be bound,
where such default could reasonably be expected to result in a Material
Adverse Effect.
SECTION 7.16. Proceeds. The proceeds from the Liquidity
--------
Advances will only be used for the purposes set forth in Section 3.01(c).
SECTION 7.17. Business Location; Trade Names. (a) Finco
------------------------------
maintains its chief executive office, has its principal place of business, and
keeps its consolidated business and financial records at 8669 N.W. 36th Street,
Miami, Florida, 33166. The parties hereto acknowledge that, as of the date
hereof, Finco plans to change the location of its chief executive office,
principal place of business and consolidated business and financial records to
1560 Broadway, Suite 1800, Denver, Colorado, 80202.
(b) Finco's legal name is FCTR, Inc., and Finco does not conduct
business under any other name.
SECTION 7.18 Collateral Agreement. The Collateral Agreement is
--------------------
effective to create in favor of the Agent, for the ratable benefit of the
Secured Parties, a legal, valid and
-29-
<PAGE>
enforceable security interest in the Assigned Collateral and, when financing
statements in appropriate form are filed in the offices specified on Schedule
7.18 hereto, the Collateral Agreement shall constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the grantors
thereunder in such Assigned Collateral, in each case prior and superior in right
to any other person, other than with respect to any Permitted Liens.
SECTION 7.19. No Material Adverse Change. There has been no
--------------------------
material adverse change in the business, assets, operations, prospects,
condition, financial or otherwise, or material agreements of Finco since
December 31, 1996.
SECTION 7.20. Other Representations. All representations and
---------------------
warranties of Finco made in each Related Document to which it is a party are
true and correct (in all material respects to the extent any such
representations and warranties do not incorporate a materiality limitation in
their terms) as of the date hereof, or if stated to be as of an earlier date, as
of such date, and are repeated herein as though fully set forth herein.
ARTICLE VIII.
Covenants
---------
SECTION 8.1. Affirmative Covenants. Finco covenants and agrees
---------------------
with the Liquidity Agent and each Liquidity Lender that, until all Liquidity
Commitments have terminated and all Obligations have been paid or performed in
full, unless the Majority Banks shall otherwise consent in writing, Finco will
perform the covenants set forth in this Section 8.01.
(a) Information. Finco will deliver to the Liquidity Agent, each
-----------
Rating Agency and the Dealers:
(i) promptly upon the delivery by Leasco to Finco, a copy
of the financial information and other materials required to be
delivered by Leasco to Finco and the Agent pursuant to Section
9.05(a) of the Loan Agreement;
(ii) promptly upon the delivery by Leasco to Finco, copies
of the financial information and other materials required to be
delivered by Leasco to Finco and the Agent pursuant to Section
9.05(b) of the Loan Agreement;
(iii) from time to time such additional information
regarding the financial position, results of operations or
business of TRS and its Subsidiaries as the Liquidity Agent may
reasonably request to the extent that Leasco delivers such
information to Finco pursuant to Section 9.05(c) of the Loan
Agreement;
(iv) at the time of delivery of the items described in
clauses (i) and (ii) above, a certificate of an officer of Finco
that, except as provided in any certificate delivered in
accordance with Section 8.01(a), no Amortization Event or
Potential Amortization Event has occurred or is continuing during
such fiscal quarter;
(v) on or prior to June 30 of each year, a certificate of
the chief financial officer of Finco (A) certifying that the
ratings assigned by the Rating Agencies in respect of the
Commercial Paper Notes have not been withdrawn or downgraded
below A-1 by S&P or P-1 by Moody's since the date of this
Agreement, (B) certifying the
-30-
<PAGE>
ratings assigned by the Ratings Agencies as of the date of such
certificate or (C) certifying that the ratings assigned by the
Ratings Agencies have, as of the date of such certificate, been
withdrawn;
(vi) on or prior to the twentieth day of each month (or if
such day is not a Business Day, on the next succeeding Business
Day), a copy of the Monthly Report and the Monthly Vehicle
Statement, each relating to the Collateral as of the last
Business Day of the immediately preceding month received by Finco
from Leasco pursuant to Section 9.05(h) of the Loan Agreement;
and
(vii) on each Business Day when any Liquidity Advance is
outstanding, a statement setting forth (A) the maturity date and
face amount of each outstanding Commercial Paper Note and (B) the
aggregate principal amount of outstanding Liquidity Advances (or,
at Finco's option, a statement updating any statement previously
provided by Finco to the Liquidity Agent which contained such
information as of a prior date).
(b) Compliance with Covenants. Finco will comply with each
-------------------------
covenant made by it and contained in any Related Document to which it is
a party (subject to the grace periods and materiality provisions set
forth therein).
(c) Payment of Obligations. Finco will pay its Indebtedness and
----------------------
other obligations promptly and in accordance with their terms and pay
and discharge promptly when due all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or in
respect of its property, before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and supplies
or otherwise that, if unpaid, might give rise to a Lien upon such
properties or any part thereof; provided, however, that such payment and
-------- -------
discharge shall not be required with respect to any such tax,
assessment, charge, levy or claim so long as the validity or amount
thereof shall be contested in good faith by appropriate proceedings and
Finco shall have set aside on its books adequate reserves with respect
thereto in accordance with GAAP and such contest operates to suspend
collection of the contested obligation, tax, assessment or charge and
enforcement of a Lien.
(d) Maintenance of Existence. Finco will maintain its existence
------------------------
as a corporation validly existing and in good standing under the laws of
the State of Delaware and duly qualified as a foreign corporation
licensed under the laws of each state in which the failure to so qualify
would have a material adverse effect on the business and operations of
Finco.
(e) Compliance with Laws. Finco will comply with all applicable
--------------------
laws, ordinances, rules, regulations, and requirements of Governmental
Authorities (including ERISA and the rules and regulations thereunder)
except where the failure to comply therewith is not reasonably likely to
have a material adverse effect on the business and operations of Finco.
(f) Inspection of Property, Books and Records. Finco will keep
-----------------------------------------
proper books of record and account in which full, true and correct
entries shall be made of all dealings and transactions in relation to
its Assets, business and activities in accordance with GAAP; and will
permit representatives of the Liquidity Agent and, if an Amortization
Event shall have occurred and is continuing, representatives of any
Liquidity Lender, at Finco's expense, to visit and inspect any of its
properties, to examine and make abstracts from any of its books and
-31-
<PAGE>
records and to discuss its affairs, finances and accounts with its
officers, directors, employees and independent public accountants, all
at such reasonable times and as often as the Liquidity Agent or such
Liquidity Lender may reasonably deem appropriate (but not more often
than once a month in the case (i) of any Liquidity Lender and (ii) of
the Liquidity Agent prior to the occurrence of an Amortization Event).
(g) Notice of Default. Promptly upon becoming aware of any
-----------------
Potential Amortization Event or Amortization Event, Finco shall give the
Liquidity Agent, the Dealers and each Rating Agency notice thereof,
together with a certificate of the President, Vice President or the
principal financial officer of Finco setting forth the details thereof
and any action with respect thereto taken or contemplated to be taken by
Finco.
(h) Notice of Material Proceedings. Promptly upon becoming aware
------------------------------
thereof, Finco shall give the Liquidity Agent, the Dealers and each
Rating Agency written notice of the commencement or existence of any
proceeding by or before any Governmental Authority against or affecting
Finco which is reasonably likely to have a material adverse effect on
the business, condition (financial or otherwise), results of operations,
properties or performance of Finco or the ability of Finco to perform
its obligations under this Agreement or under any other Related Document
to which it is a party.
(i) Further Requests. Finco will promptly furnish to the
----------------
Liquidity Agent and each Rating Agency such other information as, and in
such form as, the Liquidity Agent or any Rating Agency may reasonably
request; provided, however, that such Liquidity Agent or Rating Agency
-------- -------
shall adhere to any reasonable requirements or restrictions relating to
the confidentiality of such information.
(j) Further Assurances. Finco agrees to do such further acts and
------------------
things, and to execute and deliver to the Liquidity Agent such
additional assignments, agreements, powers and instruments, as the
Liquidity Agent reasonably determines to be necessary to carry into
effect the purposes of this Agreement or to better assure and confirm
unto the Liquidity Agent its rights, powers and remedies hereunder.
(k) Use of Proceeds of Commercial Paper Notes. (i) Finco shall
-----------------------------------------
use the proceeds of the Commercial Paper Notes solely for one or more of
the following purposes: (A) to pay matured Commercial Paper Notes when
due, in accordance with the Depositary Agreement; (B) to fund Loans; and
(C) to pay principal of, or interest on, any Liquidity Advance or any
other amount payable by Finco under this Agreement or other Related
Document and any interest thereon.
(ii) Notwithstanding any provision of this Agreement, on
any day when any Liquidity Advance is outstanding, Finco shall
not use the net proceeds of the issuance of Commercial Paper
Notes to fund Loans.
(l) Vehicles. Finco shall use commercially reasonable efforts to
--------
cause Leasco to maintain good, legal and marketable title to the
Vehicles, free and clear of all Liens (i) except for Permitted Liens and
(ii) except for those Initial Vehicles subject to the Vehicle Title
Nominee Agreement for so long as such Initial Vehicles remain subject
thereto.
SECTION 8.2. Negative Covenants. Finco covenants and agrees with
------------------
the Liquidity Agent and each Liquidity Lender that until all Liquidity
Commitments have been terminated
-32-
<PAGE>
and all Obligations have been paid or performed in full, unless the Majority
Banks otherwise consent in writing, Finco will perform the obligations set forth
in this Section 8.02.
(a) Liens. Finco will not create, incur, assume or permit to
-----
exist any Lien upon any of its Assets (including the Assigned
Collateral), the Accounts, the Commercial Paper Account or the Deposited
Funds, other than Liens created by or permitted under the Related
Documents.
(b) Other Indebtedness. Without (i) the prior written consent of
------------------
the Majority Banks and (ii) the prior receipt of written confirmation of
the Rating Agencies that any such action will not result in the
downgrading or withdrawal of the then current ratings of the Commercial
Paper Notes by the Rating Agencies, Finco will not create, assume,
incur, suffer to exist or otherwise become or remain liable in respect
of any Indebtedness other than Indebtedness under this Agreement,
Indebtedness evidenced by the Commercial Paper Notes and Indebtedness
under or permitted under any other Related Document.
(c) Consolidations and Mergers. Finco will not, except as may be
--------------------------
permitted by the express written approval of the Majority Banks and upon
the receipt of written confirmation of the Rating Agencies that such
action will not result in the downgrading or withdrawal of the then
current ratings on the Commercial Paper Notes of the Rating Agencies,
merge with or into, enter into any joint venture or other association
with, or consolidate with, any other Person.
(d) Sales of Assets. Finco will not sell, lease, transfer,
---------------
liquidate or otherwise dispose of any Assets, except as contemplated by
the Related Documents and provided that the proceeds thereof are paid
directly to the Collateral Account.
(e) Acquisition of Assets. Finco will not acquire, by long-term
---------------------
or operating lease or otherwise, any Assets, except pursuant to the
terms of the Related Documents.
(f) Dividends, Officers' Compensation, etc. Except as
--------------------------------------
contemplated by the Related Documents, Finco will not (i) declare or pay
any dividends on any shares of its capital stock or make any other
distribution on, or any purchase, redemption or other acquisition of,
any shares of its capital stock; provided, however, that Finco may pay
-------- -------
dividends to TRS out of funds held in the Cash Reserve Account to the
extent that, after giving effect to such dividend, the Actual Cash
Reserve Percentage will be equal to or greater than 2.00% of Aggregate
Outstandings, (ii) other than in the ordinary course of business pay any
wages or salaries or other compensation to officers, directors,
employees or others except out of earnings computed in accordance with
GAAP or (iii) sell or transfer property to, or purchase or acquire
property from, or otherwise engage in any transaction with, any of its
Affiliates.
(g) Name; Chief Executive Office. Except in connection with the
----------------------------
change described in the last sentence of Section 7.17(a) hereof, Finco
will neither (i) change the location of its chief executive office
(within the meaning of the UCC) without 60 days' prior notice to the
Agent, the Liquidity Agent and each Rating Agency nor (ii) change its
name without prior notice to the Agent, the Liquidity Agent and each
Rating Agency sufficient to allow the Agent to make all filings
(including filings of financing statements on form UCC-1) and recordings
necessary to perfect the interest of the Agent in the Assigned
Collateral pursuant to the Collateral Agreement.
-33-
<PAGE>
(h) Organic Documents. Finco will not amend any of its Organic
-----------------
Documents without the written consent of the Majority Banks and each of
the Rating Agencies.
(i) Investments. Finco will not make, incur, or suffer to exist
-----------
any loan, advance, extension of credit to, guarantee on behalf of or
other investment in, any Person other than pursuant to the Loan
Agreement and with respect to Eligible Investments.
(j) No Other Agreements; Amendments to Related Documents. Finco
----------------------------------------------------
will not, without the prior written consent of the Majority Banks, (i)
enter into or be a party to any material agreement or instrument other
than any Related Document or documents and agreements incidental thereto
or (ii) amend, modify, waive or give any approval, consent or permission
under, any provision of any Related Document to which it is a party
other than such amendments that relate to minor administrative matters
that do not, among other things, amend or modify (A) the amount or
timing of any payments (or priorities for payments) to be made under the
Related Documents, (B) any rights in the Assigned Collateral (or any
priorities or rights or restrictions on encumbrances with respect
thereto), or (C) any prohibition or restriction on the incurrence of any
Indebtedness under the Related Documents. Notwithstanding the foregoing
provisions of this Section 8.02(j), Finco may, at any time and from time
to time, without the consent of the Majority Banks, enter into any
amendment, supplement or other modification to any Related Document, in
form and substance satisfactory to the Liquidity Agent, to cure any
apparent ambiguity or to correct or supplement any inconsistent
provisions therein; provided, however, that (i) any such action shall
-------- -------
not have a materially adverse effect on the interests of the Liquidity
Lenders and (ii) a copy of such amendment, supplement or other
modification is furnished to the Liquidity Lenders and each of the
Rating Agencies in accordance with the notice provisions hereof not
later than 10 days prior to the execution thereof.
(k) Other Business. Finco will not engage in any business or
--------------
enterprise or enter into any transaction other than the making of Loans
to Leasco under the Loan Agreement, the related exercise of its rights
as a secured creditor, the issuance of Commercial Paper Notes, the
incurrence of Indebtedness under this Agreement, the incurrence and
payment of ordinary course operating expenses and as otherwise
contemplated by the Related Documents.
(l) Maintenance of Separate Existence. (i) Finco will do all
---------------------------------
things necessary to maintain its corporate existence separate and apart
from that of TRS and Affiliates of TRS including as described in that
certain opinion letter issued by Willkie Farr & Gallagher in the form
attached as Exhibit M-2 hereto dated as of the Closing Date addressing
the issue of substantive consolidation as it may relate to Finco and
TRS. Finco acknowledges its receipt of a copy of such opinion letter
issued by Willkie Farr & Gallagher. Finco hereby agrees to maintain in
place all policies and procedures, and to take and continue to take all
action, described in the factual assumptions set forth in such opinion
letter and relating to Finco.
(m) Offering Document. Finco will not include in any offering
-----------------
document, including the Offering Memorandum, for the Commercial Paper
Notes any information regarding any Liquidity Lender which was not
approved or furnished by such Liquidity Lender.
(n) [Reserved].
-34-
<PAGE>
(o) Leasco Obligations. Finco will not take any action which
------------------
would result in Leasco or any Affiliate of Finco having a right to
refuse to perform any of its obligations under any of the Related
Documents.
(p) Employee Benefits. Finco will (i) comply in all material
-----------------
respects with the applicable provisions of ERISA, the Code and the
regulations and published interpretations thereunder with respect to
Plans and Multiemployer Plans and (ii) furnish to the Liquidity Agent,
as soon as possible after, and in any event within 10 days after any
Authorized Officer of Finco or any of its ERISA Affiliates knows or has
reason to know that, any ERISA Event has occurred that, alone or
together with any other ERISA Event could reasonably be expected to
result in a Material Adverse Effect, a statement of an Authorized
Officer of Finco setting forth details as to such ERISA Event and the
action, if any, that Finco proposes to take with respect thereto.
(q) Eligible Chassis Manufacturer Insolvency. In the event that
----------------------------------------
an Event of Bankruptcy with respect to an Eligible Chassis Manufacturer
shall have occurred and be continuing, Finco shall cause Leasco,
pursuant to Section 12.03(b) and in accordance with Section 10.14 of the
Loan Agreement, to refrain from placing any Vehicle Order with such
Manufacturer.
ARTICLE IX.
Amortization Events
-------------------
SECTION 9.1 Amortization Event. Each of the following events or
------------------
occurrences described in this Section 9.01 shall constitute an "Amortization
Event":
(a) Nonpayment of Obligations. Finco shall (i) fail to repay
-------------------------
maturing Commercial Paper Notes when due; (ii) fail to make a payment
within two Business Days of the Scheduled Maturity Date or prepayment
(as a result of a mandatory prepayment requirement under Section
4.01(b)) of principal of any Liquidity Advance within two Business Days
of the date on which such payment is due; (iii) fail to make a payment
of any interest on any Liquidity Advance within five Business Days of
the date on which such payment is due; or (iv) fail to make a payment of
any fees or any other amounts payable hereunder within three Business
Days after the earlier of (x) the date the Liquidity Agent delivers
written notice thereof to Finco and (y) the date a Responsible Officer
of Finco has knowledge thereof.
(b) Breach of Warranty. Any representation or warranty made by
------------------
Finco herein or in any other Related Document to which it is a party
shall have been incorrect in any material respect (to the extent that
any such representation or warranty does not incorporate a materiality
limitation in its terms) as of the date such representation or warranty
is made and continues to be incorrect in any material respect (to the
extent that any such representation or warranty does not incorporate a
materiality limitation in its terms) for a period of 30 days after the
earlier of (i) the date on which written notice thereof shall have been
given to Finco by the Liquidity Agent or any Liquidity Lender and (ii)
the date on which Finco obtains actual knowledge thereof, or any
certificate, financial statement or any other material writing furnished
by Finco pursuant to this Agreement or any such other Related Document
shall have been incorrect in any material respect when made (or deemed
made) and continues to be incorrect in any material respect for a period
of 10 days (other than with respect to any
-35-
<PAGE>
Officer's Certificate delivered with respect to the Borrowing Base, for
which such period is one Business Day) after the earlier of (A) the date
on which written notice thereof shall have been given to Finco by the
Liquidity Agent or any Liquidity Lender and (B) the date on which Finco
has knowledge thereof.
(c) Nonperformance of Certain Covenants and Obligations. Finco
---------------------------------------------------
shall default in the due performance and observance of any of its
obligations under Section 8.02 and such default shall continue
unremedied for a period of ten days after the earlier of (i) the date on
which written notice thereof shall have been given to Finco by the
Liquidity Agent or any Liquidity Lender and (ii) the date on which Finco
has knowledge thereof.
(d) Nonperformance of Other Covenants and Obligations. Finco
-------------------------------------------------
shall default in the due performance and observance of any covenant or
agreement contained herein or in any other Related Document to which it
is a party (other than those specified in paragraphs (a), (b) and (c) of
this Section 9.01), and, in the case of defaults other than with respect
to paragraphs (g) or (h) of Section 8.01, such default shall continue
unremedied for a period of 30 days after notice thereof shall have been
given to Finco by the Liquidity Agent or any Liquidity Lender or, in the
case of paragraphs (g) or (h) of Section 8.01, such default shall
continue unremedied for a period of 30 days after Finco initially
becomes aware of such failure to perform or comply with such covenant.
(e) Judgments. Any final and unappealable (or, if capable of
---------
appeal, such appeal is not being diligently pursued or enforcement
thereof has not been stayed) judgment or order for the payment of money
in excess of $100,000, shall be rendered against Finco and such judgment
or order shall continue unsatisfied and unstayed for a period of 60
days.
(f) Bankruptcy, Insolvency, etc. The occurrence of any Event of
---------------------------
Bankruptcy with respect to TRS, Finco or Leasco.
(g) Independent Directors. Finco shall fail to have two or more
---------------------
Independent Directors on its board and such failure shall have continued
for a period of 30 days.
(h) Enforceability of or Default under Related Documents. (i) Any
----------------------------------------------------
of the Related Documents or any portion thereof shall not be in full
force and effect, enforceable in accordance with its terms or Finco or
Leasco shall so assert in writing or (ii) any Loan Event of Default
shall occur.
(i) Investment Company. Finco shall have become an "investment
------------------
company" or shall have become under the "control" of an "investment
company" under the Investment Company Act.
(j) Termination of Loan Commitment. The Loan Commitment
------------------------------
Termination Date shall have occurred.
(k) Program Downgrade. The rating on the Commercial Paper Notes
-----------------
shall have been downgraded to A-2 by S&P or P-2 by Moody's, or less, or
withdrawn, and all Liquidity Lenders shall have a rating of A-1, or
better, by S&P and Prime-1 by Moody's.
(l) Termination of Liquidity Commitments or Reduction of
----------------------------------------------------
Aggregate Liquidity Commitment. The Liquidity Commitment Termination
------------------------------
Date with respect to all Liquidity
-36-
<PAGE>
Lenders shall have occurred or the Aggregate Liquidity Commitment is
reduced due to the failure of certain Liquidity Lenders to renew their
Liquidity Commitments on any date to 50% or less than the Aggregate
Liquidity Commitment in effect immediately prior to such reduction.
(m) Enhancement Amount. The (i) Enhancement Test Percentage is,
------------------
for a period of 10 days, less than the Required Enhancement Percentage
or (ii) Required Enhancement Percentage exceeds 27%.
SECTION 9.2. Action upon Amortization Event. (a) If any
------------------------------
Amortization Event (i) set forth in paragraph (a), (e), (g), (i), (j), (k), (l)
or (m) of Section 9.01 shall have occurred and be continuing, (A) the Agent
shall upon having actual knowledge thereof (1) notify the Depositary and the
Dealers of the occurrence of such Amortization Event and (2) instruct Finco and
the Depositary to cease issuing Commercial Paper Notes and (B) the right of
Finco to issue Commercial Paper Notes shall automatically terminate or (ii) set
forth in any other paragraph of Section 9.01 shall have occurred, (A) the Agent
shall, at the request or with the consent of the Majority Banks (1) notify the
Depositary and the Dealers of the occurrence of such Amortization Event and (2)
instruct Finco and the Depositary to cease issuing Commercial Paper Notes and
(B) the right of Finco to issue Commercial Paper Notes shall automatically
terminate.
(b) If any Amortization Event occurs under Section 9.01(f),
without giving effect to any grace periods included in the definition of
Event of Bankruptcy, the Liquidity Agent will instruct the Depositary
and Finco to cease issuing Commercial Paper Notes.
(c) Upon the occurrence of any Amortization Event pursuant to
paragraph 9.01(f) with respect to Finco (i) the Liquidity Commitment of
each Liquidity Lender shall automatically be terminated and (ii) all
such principal, accrued interest, fees and other Obligations hereunder
shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby
expressly waived by Finco.
(d) Upon the occurrence of any event specified in paragraph (a)
through (i) or (k) of Section 9.01 the Liquidity Agent may, at the
request, or with the consent, of Liquidity Lenders then holding, in the
aggregate, Liquidity Commitments in excess of 50% of the Aggregate
Liquidity Commitment (or, if the Aggregate Liquidity Commitment shall
have been terminated, Liquidity Lenders then holding, in the aggregate
in excess of 50% of the principal amount of Liquidity Advances then
outstanding), by notice to Finco, declare the aggregate principal amount
of any Liquidity Advances then outstanding, together with accrued
interest and all fees and other Obligations hereunder, immediately due
and payable, whereupon all such principal, accrued interest, fees and
other Obligations hereunder shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by Finco.
(e) Upon the occurrence of any Amortization Event, the Liquidity
Agent may (i) instruct Finco to terminate the Loan Commitment and cease
funding the purchase or financing of Vehicles under the Loan Agreement;
and (ii) pursue any other right or remedy under this Agreement and the
other Related Documents or under applicable law or otherwise.
SECTION 9.3. Limited Amortization Events. Each of the following
---------------------------
events or occurrences described in this Section 9.03 shall constitute a "Limited
Amortization Event".
-37-
<PAGE>
(a) Termination of Liquidity Commitment. The Liquidity Commitment
-----------------------------------
of any Liquidity Lender shall have been terminated and Finco shall have
failed to replace any such Liquidity Lender.
(b) Rating Downgrade of Liquidity Lender. A Rating Downgrade
------------------------------------
below A-2 by S&P or P-2 by Moody's shall occur and be continuing for 60
days (or such other period permitted by the Rating Agencies) with
respect to any Liquidity Lender and such Liquidity Lender shall not have
been replaced pursuant to Section 5.09 hereof.
(c) Enhancement Amount. The Enhancement Test Percentage is, for
------------------
a period of one Business Day, less than the Required Enhancement
Percentage.
SECTION 9.4. Action upon Limited Amortization Event. (a) If any
--------------------------------------
Limited Amortization Event set forth in Section 9.03(a) shall have occurred and
be continuing, then Finco shall not issue Commercial Paper Notes or request
Revolving Advances to the extent that after giving effect to such issuance or
Revolving Advance (and the use of proceeds thereof), the Aggregate Outstandings
shall exceed the Aggregate Liquidity Commitment (reduced by the aggregate
Liquidity Commitments of the Liquidity Lenders that have been terminated).
(b) If any Limited Amortization Event set forth in Section
9.03(b) shall have occurred and be continuing, then Finco shall not
issue Commercial Paper Notes or request Revolving Advances to the extent
that after giving effect to such issuance or Revolving Advance (and the
use of proceeds thereof), the Aggregate Face Amount shall exceed the
Aggregate Liquidity Commitment (reduced by the aggregate Liquidity
Commitments of the Affected Liquidity Lenders).
(c) If any Limited Amortization Event set forth in Section
9.03(c) shall have occurred and be continuing, then Finco shall not
issue Commercial Paper Notes or request Revolving Advances to the extent
that, after giving effect to such issuance or Revolving Advance, the
Enhancement Test Percentage would be less than the Required Enhancement
Percentage.
ARTICLE X.
The Liquidity Agent
-------------------
SECTION 10.1. Actions. Each Liquidity Lender hereby appoints
-------
Citibank as its Liquidity Agent under and for purposes of this Agreement, the
Liquidity Advance Notes and each other Related Document. Each Liquidity Lender
hereby authorizes the Liquidity Agent to act on behalf of such Liquidity Lender
under this Agreement, the Liquidity Advance Notes and each other Related
Document and, in the absence of other written instructions from the Majority
Banks received from time to time by the Liquidity Agent (with respect to which
the Liquidity Agent agrees that it will comply, except as otherwise provided in
this Section or as otherwise advised by counsel), to exercise such powers
hereunder and thereunder as are specifically delegated to or required of the
Liquidity Agent by the terms hereof and thereof, together with such powers as
may be reasonably incidental thereto. Each Liquidity Lender hereby indemnifies
(which indemnity shall survive any termination of this Agreement) the Liquidity
Agent, pro rata according to such Liquidity 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, the Liquidity Agent in any way relating to or
arising out of this Agreement, the Liquidity Advance Notes
-38-
<PAGE>
and any other Related Document, including reasonable attorneys' fees (including
the allocated costs of in-house counsel), and as to which the Liquidity Agent is
not reimbursed by Finco; provided, however, that no Liquidity 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 the Liquidity
Agent's gross negligence or wilful misconduct. The Liquidity Agent shall not be
required to take any action hereunder, under the Liquidity Advance Notes or
under any other Related Document, or to prosecute or defend any suit in respect
of this Agreement, the Liquidity Advance Notes or any other Related Document,
unless it is indemnified hereunder to its satisfaction. If any indemnity in
favor of the Liquidity Agent shall be or become, in the Liquidity Agent's
determination, inadequate, the Liquidity Agent may call for additional
indemnification from the Liquidity Lenders and cease to do the acts indemnified
against hereunder until such additional indemnity is given. The Liquidity Agent
shall not be required to advance, expend or risk its own funds or otherwise
incur or become exposed to financial liability in the performance of its duties
hereunder except as specifically required by the terms and conditions of this
Agreement, notwithstanding any course of conduct or practice that the Liquidity
Agent may have engaged in, and no party or any Holder may rely on the continued
existence of such practice.
SECTION 10.2 Collateral Agreement. Without limiting the
--------------------
authorizations otherwise set forth in this Article X, each Liquidity Lender
hereby authorizes the Liquidity Agent to execute and deliver the Collateral
Agreement and each of the other Related Documents as Liquidity Agent and on
behalf of such Liquidity Lender, with the same effect as if such Liquidity
Lender had executed the Collateral Agreement or such Related Document in its own
name. Each Liquidity Lender acknowledges that the Collateral Agreement contains
certain provisions, including Section 7.02 thereof, which give rise to
indemnification obligations in respect of the Agent on the part of such
Liquidity Lender and such Liquidity Lender hereby agrees to be bound by such
provisions, as the same may from time to time be modified in accordance with the
terms of the Collateral Agreement and this Agreement.
SECTION 10.3. Exculpation. Neither the Liquidity Agent nor any
-----------
of its directors, officers, employees or agents shall be liable to any Liquidity
Lender for any action taken or omitted to be taken by it under this Agreement or
any other Related 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 Related Document, nor
for the creation, perfection or priority of any Liens purported to be created by
any of the Related Documents, or the validity, genuineness, enforceability,
existence, value or sufficiency of any collateral security, nor to make any
inquiry respecting the performance by Finco of its obligations hereunder or
under any other Related Document. Any such inquiry which may be made by the
Liquidity Agent shall not obligate it to make any further inquiry or to take any
action. The Liquidity Agent shall be entitled to rely upon advice of counsel
concerning legal matters and upon any notice, consent, certificate, statement or
writing which the Liquidity Agent believes to be genuine and to have been
presented by a proper Person. As to any matters not expressly provided for in
this Agreement or any other Related Document, the Liquidity Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Banks.
SECTION 10.4. Successor. The Liquidity Agent may resign as such
---------
at any time upon at least 30 days' prior written notice to Finco and all
Liquidity Lenders, and the Liquidity Agent may be removed at any time with cause
by the Majority Banks. If the Liquidity Agent at any time shall resign or be
removed, the Majority Banks may appoint (with, if no Potential Amortization
Event
-39-
<PAGE>
or Amortization Event (other than a Scheduled Amortization Event) then exists,
the consent of Finco, which consent shall not be unreasonably withheld or
delayed) another Liquidity Lender as a successor Liquidity Agent which shall
thereupon become the Liquidity Agent hereunder. If no successor Liquidity Agent
shall have been so appointed by the Majority Banks, and shall have accepted such
appointment, within 30 days after the retiring Liquidity Agent's giving notice
of resignation or the Majority Banks' removal of the retiring Liquidity Agent,
then the retiring Liquidity Agent may, on behalf of the Liquidity Lenders,
appoint a successor Liquidity Agent, which shall be one of the Liquidity Lenders
or an Eligible Liquidity Lender. The resignation or removal of the Liquidity
Agent shall not become effective until a successor Liquidity Agent has been
appointed and shall have accepted such appointment. Upon the acceptance of any
appointment as Liquidity Agent hereunder by a successor Liquidity Agent, such
successor Liquidity Agent shall be entitled to receive from the retiring
Liquidity Agent such documents of transfer and assignment as such successor
Liquidity Agent may reasonably request, and shall thereupon succeed to and
become vested with all rights, powers, privileges and duties of the retiring
Liquidity Agent, and the retiring Liquidity Agent shall be discharged from its
duties and obligations under this Agreement and all other Related Documents.
After any retiring Liquidity Agent's resignation or removal hereunder as the
Liquidity Agent, the provisions of (a) this Article X shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was the Liquidity
Agent under this Agreement; and (b) Section 11.03 and Section 11.04 shall
continue to inure to its benefit.
SECTION 10.5. Liquidity Advances by Citibank. Citibank (and any
------------------------------
successor thereto in its capacity as Liquidity Agent, that is also a Liquidity
Lender) shall have the same rights and powers with respect to (x) the Liquidity
Advances made by it or any of its Affiliates, and (y) the Liquidity Advance
Notes held by it or any of its Affiliates as any other Liquidity Lender and may
exercise the same as if it were not the Liquidity Agent. Citibank (and such
successor) and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with Finco or any Affiliate of Finco as
if Citibank (and such successor) were not the Liquidity Agent hereunder.
SECTION 10.6. Credit Decisions. Each Liquidity Lender
----------------
acknowledges that it has, independently of the Liquidity Agent and each other
Liquidity Lender, and based on such Liquidity Lender's review of the financial
information of Finco and Leasco, this Agreement, the other Related Documents
(the terms and provisions of which being satisfactory to such Liquidity Lender)
and such other documents, information and investigations as such Liquidity
Lender has deemed appropriate, made its own credit decision to extend its
Liquidity Commitment. Each Liquidity Lender also acknowledges that it will,
independently of the Liquidity Agent and each other Liquidity 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 Related Document.
SECTION 10.7. Copies, etc. The Liquidity Agent shall give prompt
-----------
notice to each Liquidity Lender of each notice or request required or permitted
to be given to the Liquidity Agent by Finco pursuant to the terms of this
Agreement (unless concurrently delivered to the Liquidity Lenders by Finco). The
Liquidity Agent will distribute to each Liquidity Lender each document or
instrument received for its account and copies of all other communications
received by the Liquidity Agent from Finco for distribution to the Liquidity
Lenders by the Liquidity Agent in accordance with the terms of this Agreement.
-40-
<PAGE>
ARTICLE XI.
Miscellaneous Provisions
------------------------
SECTION 11.1. Waivers, Amendments, etc. The provisions of this
------------------------
Agreement and each other Related Document to which Finco is a party may from
time to time be amended, modified or waived, if (i) prior written notice of such
amendment, modification or waiver is given to each of the Rating Agencies and
the Dealers, (ii) subject to Section 8.02(j) hereof as it relates to amendments
of the Related Documents other than the Liquidity Agreement, such amendment,
modification or waiver is in writing and consented to in writing by Finco and
the Majority Banks and (iii) such amendment, modification or waiver shall not,
as evidenced by written confirmation of the Rating Agencies, result in the
downgrading or withdrawal of the then current ratings of the Commercial Paper
Notes by the Rating Agencies; provided, however, that any modification of
-------- -------
Section 6.03 or this Section 11.01, any requirement hereunder that any
particular action be taken by all the Liquidity Lenders or by the Majority Banks
or any change in the definition of the term "Borrowing Base Deficiency",
"Manufacturer", "Event of Bankruptcy" or "Majority Banks" or any defined term
used for the purpose of any such definition shall require the consent of each
Liquidity Lender; and provided, further, that any amendment, waiver or other
-------- -------
modification that would:
(a) increase the Liquidity Commitment or the Percentage of any
Liquidity Lender or reduce any fees described in Article IV payable to
any Liquidity Lender shall require the consent of such Liquidity Lender;
(b) amend the definition of the Scheduled Maturity Date, the
Scheduled Liquidity Commitment Termination Date, or the Liquidity
Commitment Termination Date shall require the consent of each Liquidity
Lender affected thereby;
(c) extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or interest on any
Liquidity Advance of any Liquidity Lender (or reduce the principal
amount of or rate of interest on any Liquidity Advance of any Liquidity
Lender) shall require the consent of each Liquidity Lender affected
thereby;
(d) modify or waive the conditions precedent to the effectiveness
of this Agreement set forth in Article VI shall require the consent of
each Liquidity Lender;
(e) approve the assignment or transfer by Finco of any of its
rights or obligations hereunder or under any other Related Document to
which it is a party except pursuant to the express terms hereof or
thereof shall require the consent of each Liquidity Lender;
(f) release any of the Collateral from the Lien under the
Collateral Agreement or release any obligor under any Related Document
to which it is a party except pursuant to the express terms of such
Related Document shall require the consent of each Liquidity Lender;
provided, however, that the Agent may release liens on Vehicles in
-------- -------
accordance with the Collateral Agreement;
(g) affect adversely the interests, rights or obligations of any
Liquidity Lender individually in comparison to other Liquidity Lenders
shall require the consent of such Liquidity Lender;
-41-
<PAGE>
(h) affect adversely the interests, rights or obligations of either
the Liquidity Agent or the Agent in its capacity as such shall require
the consent of the Liquidity Agent or the Agent, as the case may be;
(i) amend or otherwise modify or waive any Amortization Event shall
require the consent of each Liquidity Lender; and
(j) amend or waive any condition precedent to the issuance of the
Commercial Paper Notes set forth in Section 2.02 shall require written
confirmation from each of S&P and Moody's that such amendment or waiver
will not result in the downgrading or withdrawal of the then current
ratings of the Commercial Paper Notes by each of S&P and Moody's.
Notwithstanding the foregoing provisions of this Section 11.01, Finco
and the Liquidity Agent may, at any time and from time to time, without the
consent of the Liquidity Lenders, enter into any amendment, supplement or other
modification to this Agreement to cure any apparent ambiguity or to correct or
supplement any provision in this Agreement that may be inconsistent with any
other provision herein; provided, however, that (i) any such action shall not
-------- -------
have a materially adverse effect on the interests of the Liquidity Lenders and
(ii) a copy of such amendment, supplement or other modification is furnished to
each Liquidity Lender and each Rating Agency in accordance with the notice
provisions hereof not later than ten days prior to the execution thereof by
Finco and the Liquidity Agent.
No failure or delay on the part of the Liquidity Agent, any Liquidity
Lender or the holder of any Liquidity Advance Note in exercising any power or
right under this Agreement or any other Related 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 Finco in any case shall entitle
it to any notice or demand in similar or other circumstances. No waiver or
approval by the Liquidity Agent, any Liquidity Lender or the holder of any
Liquidity Advance Note under this Agreement or any other Related 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 11.2 Notices. All notices, amendments, waivers, consents and
-------
other communications provided to any party hereto under this Agreement or any
other Related Document shall be in writing and addressed, delivered or
transmitted to such party at its address or facsimile number set forth below its
signature hereto or set forth in the Assignment and Acceptance 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 transmitted upon receipt of electronic confirmation
of transmission.
SECTION 11.3 Payment of Costs and Expenses. Finco agrees to pay on
-----------------------------
demand all reasonable expenses of the Liquidity Agent (including the reasonable
fees and out-of-pocket expenses of counsel to the Liquidity Agent and of local
counsel, if any, who may be retained by counsel to the Liquidity Agent) in
connection with:
(a) the negotiation, preparation, execution, delivery and
administration of this Agreement and of each other Related Document,
including schedules and exhibits, and any
-42-
<PAGE>
amendments, waivers, consents, supplements or other modifications to
this Agreement or any other Related Document as may from time to time
hereafter be required, whether or not the transactions contemplated
hereby or thereby are consummated;
(b) if applicable, the filing, recording, refiling or rerecording of
the Collateral Agreement and/or any UCC financing statements relating
thereto and all amendments, supplements and 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 of the Collateral Agreement;
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Related Document;
(d) the transactions contemplated by this Agreement and any of
the other Related Documents; and
(e) the preparation and negotiation of the legal opinions of
counsel to each Liquidity Lender.
Finco further agrees to pay, and to save the Liquidity Agent and the Liquidity
Lenders harmless from all liability for, (i) any breach by Finco of any of its
obligations under this Agreement, (ii) all reasonable costs incurred by the
Liquidity Agent or the Liquidity Lenders in enforcing this Agreement and (iii)
any stamp, documentary or other similar taxes which may be payable in connection
with the execution or delivery of this Agreement, any Borrowing hereunder, or
the issuance of the Liquidity Advance Notes or any other Related Documents.
Finco also agrees to reimburse the Liquidity Agent or such Liquidity Lender upon
demand for all reasonable out-of-pocket expenses incurred by the Liquidity Agent
or such Liquidity 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 11.4. Indemnification. In consideration of the execution
---------------
and delivery of this Agreement by each Liquidity Lender and the extension of the
Liquidity Commitments, Finco hereby indemnifies and holds the Liquidity Agent
and each Liquidity Lender and each of their respective officers, directors,
employees and agents (collectively, the "Indemnified Parties") harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and reasonable expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought and including any liability in
connection with the offering and sale of the Commercial Paper Notes), including
reasonable attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to:
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Liquidity Advance; or
(b) the entering into and performance of this Agreement and any
other Related Document by any of the Indemnified Parties, 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; provided that Finco hereby indemnifies
--------
the Indemnified Parties, in connection with prosecuting or defending any
such claims, for reasonable attorneys' fees and expenses. If and to the
extent that the foregoing undertaking
-43-
<PAGE>
may be unenforceable for any reason, Finco hereby agrees to make the
maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. The
indemnity set forth in this Section 11.04 shall in no event include
indemnification for any Taxes (which indemnification is provided in
Section 5.06). Finco shall give notice to the Rating Agencies of any
claim for Indemnified Liabilities made under this Section.
SECTION 11.5. Survival. The obligations of Finco under Sections 5.03,
--------
5.04, 5.05, 5.06, 11.03 and 11.04, and the obligations of the Liquidity Lenders
under Sections 10.01 and 10.02, shall in each case survive any termination of
this Agreement, the payment in full of all the Obligations and the termination
of all Liquidity Commitments.
SECTION 11.6. Severability. Any provision of this Agreement or any
------------
other Related 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 Related Document or affecting the validity
or enforceability of such provision in any other jurisdiction.
SECTION 11.7. Headings. The various headings of this Agreement and of
--------
each other Related Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such other Related
Document or any provisions hereof or thereof.
SECTION 11.8. Execution in Counterparts. This Agreement may be
-------------------------
executed by the parties hereto in several counterparts, each of which shall be
executed by Finco and the Liquidity Agent and be deemed to be an original and
all of which shall constitute together but one and the same agreement.
SECTION 11.9. Governing Law; Entire Agreement. THIS AGREEMENT AND EACH
-------------------------------
OTHER RELATED DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER, AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK. This Agreement, the Liquidity Advance Notes and the other
Related 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 11.10. 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:
-------- -------
(a) Finco may not assign or transfer its rights or obligations
hereunder, other than pursuant to the Collateral Agreement, without (i)
the prior written consent of the Liquidity Agent and all Liquidity
Lenders and (ii) written confirmation from each of the Rating Agencies
that its then current rating of the Commercial Paper Notes will not be
reduced or withdrawn as a result thereof; and
(b) the rights of sale, assignment and transfer of the Liquidity
Lenders are subject to Section 11.11.
SECTION 11.11. Assignments and Participations. (a) Whenever in this
------------------------------
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted
-44-
<PAGE>
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of Finco, the Liquidity Agent, the Agent or the Liquidity
Lenders that are contained in this Agreement shall bind and inure to the benefit
of their respective successors and assigns.
(b) Each Liquidity Lender may assign to one or more assignees
all or a portion of its interests, rights and obligations under this
Agreement to any Eligible Liquidity Lender (such Liquidity Lender, an
"Assignee Lender" or "Liquidity Participant") (including all or a
---------------
portion of its Liquidity Commitment and the Liquidity Advances at the
time owing to it); provided, however, that (i) except in the case of an
-------- -------
assignment to a Liquidity Lender or an Affiliate of such Liquidity
Lender, (x) Finco (unless an Event of Amortization shall have occurred
and be continuing) and the Liquidity Agent must give their prior written
consent to such assignment (which consent shall not be unreasonably
withheld or delayed) and (y) the amount of the Liquidity Commitment of
the assigning Liquidity Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to
such assignment is delivered to the Liquidity Agent) shall not, unless
otherwise agreed to by Finco and the Liquidity Agent, be less than
$5,000,000 (or, if less, the entire remaining amount of such Liquidity
Commitment), (ii) the parties to each such assignment shall execute and
deliver to the Liquidity Agent an Assignment and Acceptance, together
with a processing and recordation fee of $3,500, (iii) the Assignee
Lender, if it shall not be a Liquidity Lender, shall deliver to the
Liquidity Agent an Administrative Questionnaire and (iv) notwithstanding
the foregoing, no such assignment may be made to any of the persons
identified on Schedule 11.11 hereto without the prior written consent of
Finco. Upon acceptance and recording pursuant to paragraph (e) of this
Section 11.11, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof, (A) the Assignee Lender
thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and
obligations of a Liquidity Lender under this Agreement and (B) the
assigning Liquidity Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning
Liquidity Lender's rights and obligations under this Agreement, such
Liquidity Lender shall cease to be a party hereto but shall continue to
be entitled to the benefits of Sections 5.03, 5.04, 5.05, 5.06, 5.08,
11.03, 11.04, 11.13, and 11.16, as well as to any Fees accrued for its
account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Liquidity Lender thereunder and the Assignee Lender thereunder
shall be deemed to confirm to and agree with each other and the other
parties hereto as follows: (i) such assigning Liquidity Lender warrants
that it is the legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim and that its Liquidity
Commitment, and the outstanding balances of its Liquidity Advances, in
each case without giving effect to assignments thereof which have not
become effective, are as set forth in such Assignment and Acceptance;
(ii) except as set forth in (i) above, such assigning Liquidity Lender
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any
other Related Document or any other instrument or document furnished
pursuant hereto, or the financial condition of Finco or any Subsidiary
or the performance or observance by Finco or any Subsidiary of any of
its obligations under this Agreement, any other Related Document or any
other instrument or document furnished pursuant hereto; (iii) such
Assignee Lender represents and warrants that it is legally authorized to
enter into such Assignment and Acceptance;
-45-
<PAGE>
(iv) such Assignee Lender confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
referred to in Section 7.05 or delivered pursuant to Section 8.01(a) and
such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment
and Acceptance; (v) such Assignee Lender will independently and without
reliance upon the Liquidity Agent, the Agent, such assigning Liquidity
Lender or any other Liquidity Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this
Agreement; (vi) such Assignee Lender appoints and authorizes the
Liquidity Agent and the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Liquidity Agent and the Agent, respectively, by the terms hereof,
together with such powers as are reasonably incidental thereto; and
(vii) such Assignee Lender agrees that it will perform in accordance
with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Liquidity Lender.
(d) The Liquidity Agent, acting for this purpose as an agent of
Finco, shall maintain at one of its offices in New York City a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Liquidity Lenders, and the
Liquidity Commitment of, and principal amount of the Liquidity Advances
owing to, each Liquidity Lender pursuant to the terms hereof from time
to time (the "Register"). The entries in the Register shall be
--------
conclusive and Finco, the Liquidity Agent, the Agent and the Liquidity
Lenders may treat each person whose name is recorded in the Register
pursuant to the terms hereof as a Liquidity Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by Finco, the Agent and any
Liquidity Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Liquidity Lender and an Assignee
Lender, an Administrative Questionnaire completed in respect of the
Assignee Lender (unless the Assignee Lender shall already be a Liquidity
Lender hereunder), the processing and recordation fee referred to in
paragraph (b) above and, if required, the written consent of Finco and
the Liquidity Agent to such assignment, the Liquidity Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof
to the Liquidity Lenders. No assignment shall be effective unless it has
been recorded in the Register as provided in this paragraph (e).
(f) Each Liquidity Lender may, without the consent of Finco or
the Liquidity Agent, sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Liquidity Commitment and
the Liquidity Advances owing to it); provided, however, that (i) such
-------- -------
Liquidity Lender's obligations under this Agreement shall remain
unchanged, (ii) such Liquidity Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii)
the participating banks or other entities shall be entitled to the
benefit of the cost protection provisions contained in Sections
4.02(a)(ii), 5.01, 5.02, 5.03, 5.04, 5.05 and 5.06 to the same extent as
if they were the Liquidity Lender from which the participation was
received (provided that such participating banks or other entities shall
have no greater rights than those of such Liquidity Lender), (iv) except
in the case of a participation sold to a Liquidity Lender or an
Affiliate of such Liquidity
-46-
<PAGE>
Lender or unless otherwise agreed to by Finco and the Liquidity Agent,
the amount of the Liquidity Commitment of such Liquidity Lender subject
to each such participation (determined as of the date such participation
is sold) shall be not less than $5,000,000 (or, if less, the entire
remaining amount of such Liquidity Commitment), (v) no such
participation may be sold to any of the persons identified on Schedule
11.11 without the prior written consent of Finco and (vi) Finco, the
Liquidity Agent, the Agent and the Liquidity Lenders shall continue to
deal solely and directly with such Liquidity Lender in connection with
such Liquidity Lender's rights and obligations under this Agreement, and
such Liquidity Lender shall retain the sole right to enforce the
obligations of Finco relating to the Liquidity Advances and to approve
any amendment, modification or waiver of any provision of this Agreement
(other than amendments, modifications or waivers decreasing any fees
payable hereunder or the amount of principal of or the rate at which
interest is payable on the Liquidity Advances, extending any scheduled
principal payment date or date fixed for the payment of interest on the
Liquidity Advances, increasing or extending the Liquidity Commitments or
releasing all or any substantial part of the Collateral (except for any
such release expressly permitted by the Related Documents)).
(g) Any Liquidity Lender or participant may, in connection with
any assignment or participation or proposed assignment or participation
pursuant to this Section 11.11, disclose to the Assignee Lender or
participant or proposed Assignee Lender or participant any information
relating to Finco furnished to such Liquidity Lender by or on behalf of
Finco; provided that each such Assignee Lender or participant or
--------
proposed Assignee Lender or participant shall execute an agreement
whereby such Assignee Lender or participant shall agree (subject to
customary exceptions) to preserve the confidentiality of such
confidential information on terms no less restrictive than those
applicable to the Liquidity Lenders pursuant to Section 11.16.
(h) Any Liquidity Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this
Agreement to secure obligations of such Liquidity Lender, including any
such pledge or assignment to a Federal Reserve Bank, and this Section
shall not apply to any such pledge or assignment of a security interest,
provided that no such pledge or assignment of a security interest shall
--------
release a Liquidity Lender from any of its obligations hereunder or
substitute any such pledgee or Assignee Lender for such Liquidity Lender
as a party hereto.
(i) In order to facilitate any assignment, pledge or
participation made pursuant to this Section 11.11, Finco shall, at the
request of the assigning, pledging or participating Liquidity Lender,
duly execute and deliver to such Liquidity Lender a promissory note or
notes evidencing the Liquidity Advances made to Finco by such Liquidity
Lender hereunder.
(j) Finco shall not assign or delegate any of its rights or
duties hereunder without the prior written consent of the Liquidity
Agent and each Liquidity Lender, and any attempted assignment without
such consent shall be null and void.
(k) No Liquidity Participant shall have direct rights against
Finco.
SECTION 11.12. Other Transactions. Nothing contained herein shall
------------------
preclude the Liquidity Agent or any other Liquidity Lender from engaging in any
transaction, in addition to those contemplated by this Agreement or any other
Related Document, with Finco or any of its Affiliates in which Finco or such
Affiliate is not restricted hereby from engaging with any other Person.
-47-
<PAGE>
SECTION 11.13. Bankruptcy Petition Against Finco. The Liquidity Agent
---------------------------------
and each Liquidity Lender hereby covenants and agrees that, prior to the date
which is one year and one day after the payment in full of all Commercial Paper
Notes Outstanding, it will not institute against, or join any other Person in
instituting against, Finco, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States. In the event that any
Liquidity Lender takes action in violation of this Section ll.13, Finco agrees,
for the benefit of the Holders, that it shall file an answer with the bankruptcy
court or otherwise properly contest the filing of such a petition by the
Liquidity Lender against Finco or the commencement of such action and raise the
defense that such Liquidity 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 Liquidity Lender acting in
violation of this Section 11.13 shall be liable for and pay the costs and
expenses of Finco incurred in connection therewith. The provisions of this
Section 11.13 shall survive the termination of this Agreement, and, with respect
to the Liquidity Agent, the resignation or removal of the Liquidity Agent and,
with respect to any Liquidity Lender, the replacement of such Liquidity Lender.
SECTION 11.14. No Recourse. (a) The Liquidity Agent and each Liquidity
-----------
Lender agree that the obligations of Finco to the Liquidity Agent and such
Liquidity Lender hereunder shall be payable in the order and priority set forth
in Section 2.01 and 5.02(b), as applicable, of the Collateral Agreement. Such
obligations shall be due and payable only to the extent that Finco's assets are
sufficient to pay such obligations. No claims of the Liquidity Agent or any
Liquidity Lender arising under or in connection with the Collateral Agreement
are intended to be impaired or waived by this Section 11.14(a).
(b) Without limitation to the obligations of Finco hereunder, no
recourse shall be had for the payment of any amount owing in respect of
Liquidity Advances or for the payment of any fee hereunder or any other
obligation or claim arising out of or based upon this Agreement, the
Liquidity Advance Notes or any other Related Document against any
stockholder, employee, officer, director, affiliate or incorporator of
Finco based on their status as such or their actions in connection
therewith. The provisions of this Section 11.14 shall survive the
termination of this Agreement, and with respect to the Liquidity Agent
the resignation or removal of the Liquidity Agent and with respect to
any Liquidity Lender the replacement of such Liquidity Lender.
SECTION 11.15. Survival of Representations And Warranties. All
------------------------------------------
covenants, agreements, representations and warranties made by Finco herein and
in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Related Document shall be
considered to have been relied upon by the Liquidity Lenders and shall survive
the execution and delivery of this Agreement and the making by the Liquidity
Lenders of the Liquidity Advances, and the execution and delivery to the
Liquidity Lenders of the Liquidity Advance Notes evidencing such Liquidity
Advances, regardless of any investigation made by the Liquidity Lenders or on
their behalf and shall continue so long as and until such time as all
Obligations hereunder and all Indebtedness under the Commercial Paper Notes
shall have been paid in full and the Liquidity Lenders no longer have any
Liquidity Commitments hereunder.
SECTION 11.16. Confidentiality. Each Liquidity Lender agrees that it
---------------
shall not disclose any Confidential Information to any Person without the prior
written consent of Finco or Leasco, other than (a) to the Liquidity Lender's
Affiliates and their officers, directors, employees, agents and advisors and to
actual or prospective Assignee Lenders and participants, and then only on a
confidential basis, (b) as required by any law, rule or regulation or judicial
process of which Finco or
-48-
<PAGE>
Leasco, as the case may be, has knowledge; provided that a Liquidity Lender may
--------
disclose Confidential Information as required by any law, rule or regulation or
judicial process of which Finco or Leasco, as the case may be, does not have
knowledge if such Liquidity Lender is prohibited by law from disclosing such
requirement to Finco or Leasco, as the case may be, or (c) in the course of
litigation with Finco or Leasco, the Liquidity Agent or any other Liquidity
Lender.
SECTION 11.17. Jurisdiction; Consent to Service of Process. ALL
-------------------------------------------
JUDICIAL PROCEEDINGS BROUGHT AGAINST FINCO OR ANY LIQUIDITY LENDER WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT MAY BE BROUGHT IN ANY STATE OR
(TO THE EXTENT PERMITTED BY LAW) FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT FINCO AND EACH
LIQUIDITY LENDER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT. FINCO AND EACH LIQUIDITY LENDER CONSENTS TO
SERVICE OF ALL PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02, SUCH
SERVICE BEING HEREBY ACKNOWLEDGED BY FINCO AND EACH LIQUIDITY LENDER TO BE
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF ANY LIQUIDITY LENDER OR THE AGENT TO BRING PROCEEDINGS AGAINST FINCO IN
THE COURTS OF ANY OTHER JURISDICTION.
SECTION 11.18. Waiver of Jury Trial. THE LIQUIDITY AGENT, THE
--------------------
LIQUIDITY LENDERS AND FINCO 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 RELATED DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LIQUIDITY
LENDERS OR FINCO IN CONNECTION HEREWITH OR THEREWITH. FINCO ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER RELATED DOCUMENT TO WHICH IT IS A
PARTY). THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LIQUIDITY AGENT AND THE
LIQUIDITY LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER RELATED
DOCUMENT.
SECTION 11.19. Waiver of Set-Off. Each Liquidity Lender hereby 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 Finco therein or with respect to any
right to payment from Finco, it being understood, however, that nothing
contained in this Section 11.19 shall, or is intended to, derogate from the
assignment and security interest granted to the Agent under the Collateral
Agreement or impair any rights of the Liquidity Lenders, the Liquidity Agent or
the Agent thereunder.
-49-
<PAGE>
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.
FCTR, INC.,
by /s/ Steven R. Davison
-----------------------------
Name: Steven R. Davison
Title: Vice President and Treasurer
Address: 1560 Broadway
Suite 1800
Denver, CO 80202
Attention of: General Counsel
Facsimile No.: (303) 376-7050
Telephone No.: (303) 376-0040
CITIBANK, N.A.,
as Liquidity Agent,
by /s/ Jenny Cheng
-----------------------------
Name: Jenny Cheng
Title: Assistant Vice President
Address: 120 Wall Street
13th Floor
New York, NY 10043
Attention of:
Facsimile No.:
Telephone No.:
-50-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$41,000,000 Citibank, N.A.
by
/s/ Shapleigh B. Smith
-------------------------
Name: Shapleigh B. Smith
Title:
Domestic
Office: 399 Park Avenue
New York, NY 10043
Attention of:
Facsimile No.: (212) 480-1615
Telephone No.: (212) 412-6226
LIBOR
Office: 399 Park Avenue
New York, NY 10043
Attention of:
Facsimile No.: (212) 480-1615
Telephone No.: (212) 412-6226
-51-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$38,000,000 BHF-BANK Aktiengesellschaft
by
/s/ Linda Pace
--------------------------
Name: Linda Pace
Title: Vice President
/s/ Dan Dobrjanskyj
--------------------------
Name: Dan Dobrjanskyj
Title: Assistant Vice President
Domestic
Office: 590 Madison Avenue
30th Floor
New York, NY 10022-2540
Attention of: Renate Boston
Facsimile No.: (212) 756-5536
Telephone No.: (212) 756-5543
LIBOR
Office: Grand Cayman Branch
c/o New York Branch
590 Madison Avenue
New York, NY 10022-2540
Attention of: Renate Boston
Facsimile No.: (212) 756-5536
Telephone No.: (212) 756-5543
-52-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$38,000,000 The Chase Manhattan Bank
by
/s/ Andris G. Kalnins
-------------------------
Name: Andris G. Kalnins
Title: Vice President
Domestic
Office: 1 Chase Manhattan Plaza
8th Floor
New York, NY 10081
Attention of: Mahin Gandomi
Facsimile No.: (212) 552-5650
Telephone No.: (212) 552-4567
LIBOR
Office: Same as Domestic Office
Attention of: Mahin Gandomi
Facsimile No.: Same as above
Telephone No.: Same as above
-53-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$38,000,000 CoreStates Bank, N.A.
by
/s/ John P. Brady
--------------------------
Name: John P. Brady
Title: Vice President
Domestic
Office: 1339 Chestnut Street; FC
1-8-4-18 Philadelphia,
PA 1910 7
Attention of: Chris Calabrese
Facsimile No.: (215) 973-6680
Telephone No.: (215) 973-8160
LIBOR
Office: Same as Domestic Office
Attention of: Sheila Sistrunk
Facsimile No.: (215) 973-6680
Telephone No.: (215) 973-3976
-54-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$38,000,000 Credit Agricole
by
/s/ Katherine L. Abbott
----------------------------
Name: Katherine L. Abbott
Title: First Vice President
Domestic
Office: 55 E. Monroe
Suite 4700
Chicago, IL 60603
Attention of: Tom Gillis
Facsimile No.: (312) 372-3455
Telephone No.: (312) 917-7523
LIBOR
Office: Same as Domestic Office
Attention of: Wilma Persenaire/Kimberly Wilp
Facsimile No. (312) 372-4421
Telephone No.: (312) 917-7424/7450
-55-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$38,000,000 Fleet National Bank
by
/s/ Felix Herrera
----------------------------
Name: Felix Herrera
Title: Vice President
Domestic
Office: 592 Fifth Avenue
2nd Floor
New York, NY 10036
Attention of: Steve Groth
Facsimile No.: (212) 819-6515
Telephone No.: (212) 819-6651
LIBOR
Office: Same as Domestic Office
Attention of: Steve Groth
Facsimile No.: Same as above
Telephone No.: Same as above
-56-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$38,000,000 Nationsbank
by
/s/ Melba B. Quizon
----------------------------
Name: Melba B. Quizon
Title: Vice President
Domestic
Office: 100 S. Charles
4th Floor
(MD4-325-04-14)
Baltimore, MD 21201-2725
Attention of: Vanessa Ames
Facsimile No.: (410) 576-2959
Telephone No.: (410) 547-5880
LIBOR
Office: Same as Domestic Office
Attention of: Melissa Warmkessel
Facsimile No.: (410) 576-2961
Telephone No.: (410) 547-4967
-57-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$38,000,000 COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
Rabobank Nederland, New York Branch
by
/s/ Dana W. Hemenway
--------------------------------
Name: Dana W. Hemenway
Title: Vice President
by
/s/ W. Pieter C. Kodd
--------------------------------
Name: W. Pieter C. Kodd
Vice President
Domestic
Office: 245 Park Avenue
New York, NY 10167
Attention of: Corporate Services Department
Facsimile No.: (212) 916-7930
Telephone No.: (212) 916-7928
LIBOR
Office: Same as Domestic Office
Attention of: Corporate Services Department
Facsimile No.: Same as above
Telephone No.: Same as above
With a copy to: One Atlantic Center
Suite 3450
1201 W. Peachtree Street
Atlanta, GA 30309-3400
-58-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$38,000,000 Societe Generale
by
/s/ Ralph Saheb
---------------------------------
Name: Ralph Saheb
Title: Vice President & Manager
Domestic
Office: 303 Peachtree Street NE
Suite 3840
Atlanta, GA 30308
Attention of: Ed Forsberg
Facsimile No.: (404) 865-7419
Telephone No.: (404) 865-7413
LIBOR
Office: Trammell Crow Center
2001 Ross Boulevard
Suite 4800
Dallas, TX 75201
Attention of: Ralph Saheb
Facsimile No.: (214) 979-1104
Telephone No.: (214) 979-2777
-59-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$21,000,000 The Bank of Nova Scotia
by
/s/ Jon A. Burckin
----------------------------
Name: Jon A. Burckin
Title: Relationship Manager
Domestic
Office: 580 California Street
Suite 2100
San Francisco, CA 94104
Attention of: Jon Burckin
Facsimile No.: (415) 397-0791
Telephone No.: (415) 616-4156
LIBOR
Office: Scotiabanc Inc
600 Peachtree St. N.E.
Atlanta, GA 30308
Attention of: Kathy Clark
Facsimile No.: (404) 888-8998
Telephone No.: (404) 877-1542
-60-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$21,000,000 The Bank of Tokyo-Mitsubishi, Ltd.
New York Branch
by
/s/ Joseph P. Devoe
-----------------------------
Name: Joseph P. Devoe
Title: Attorney-in-Fact
Domestic
Office: Bank of Tokyo - Mitsubishi Trust
Company
1251 Avenue of the Americas
New York, NY 10020-1104
Attention of: Joseph Devoe
Facsimile No.: (212) 782-4981
Telephone No.: (212) 782-4318
LIBOR
Office: Same as Domestic Office
Attention of: Joseph Devoe
Facsimile No.: Same as above
Telephone No.: Same as above
-61-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$21,000,000 Barnett Bank, N.A.
by
/s/ Guillermo G. Castillo
-----------------------------
Name: Guillermo G. Castillo
Title: Vice President
Domestic
Office: 701 Brickell Avenue
6th Floor
Miami, FL 33131
Attention of: Guillermo Castillo
Facsimile No.: (305) 350-7005
Telephone No.: (305) 789-3058
LIBOR
Office: Same as Domestic Office
Attention of: Guillermo Castillo
Facsimile No.: Same as above
Telephone No.: Same as above
-62-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$21,000,000 Comerica Bank
by
/s/ Reginald M. Goldsmith III
-------------------------------
Name: Reginald M. Goldsmith III
Title: Vice President
Domestic
Office: 4100 Spring Valley
Suite 900
Dallas, TX 75244
Attention of: Reggie Goldsmith
Facsimile No.: (214) 818-2550
Telephone No.: (214) 818-2548
LIBOR
Office: 500 Woodward Ave., MC3268
Detroit, MI 48226-3268
Attention of: Donna Pierzynowski
Facsimile No.: (313) 222-9514
Telephone No.: (313) 222-4515
-63-
<PAGE>
LIQUIDITY COMMITMENT LIQUIDITY LENDER
$21,000,000 PNC Bank, N.A.
by
/s/ Philip K. Liebscher
-----------------------
Name: Philip K. Liebscher
Title: Vice President
Domestic
Office: 249 Fifth Avenue
Pittsburgh, PA 15222-2707
Attention of: Phil Liebscher
Facsimile No.: (412) 762-6484
Telephone No.: (412) 762-3202
LIBOR
Office: Same as Domestic Office
Attention of: Phil Liebscher
Facsimile No.: Same as above
Telephone No.: Same as above
-64-
<PAGE>
ANNEX A TO THE
LIQUIDITY AGREEMENT
Definitions List
----------------
Dated as of August 7 , 1997
"Accounts" is defined in Section 5.01(a) of the Collateral
--------
Agreement.
"Acquisition" is defined in the recitals to the Lease.
-----------
"Act" means the Securities Act of 1933, as amended.
---
"Actual Cash Reserve Percentage" as of any date shall be equal to
------------------------------
the amount of cash held in the Cash Reserve Account divided by Aggregate
Outstandings as of such date.
"Adjustment Factor" means, with respect to each Truck Category,
-----------------
as calculated annually on or before the last Business Day of June of each year
by the Agent or an independent third-party appraiser appointed by the Agent,
such calculation to reflect the Agent's or such appraiser's review of market
conditions, recent Fleet sales data and differences in specifications which
results in added value to the Fleet as compared to the specifications set forth
in the Third-Party Data Source; provided, however, that such adjustment factor
-------- -------
shall never be less than 1.0.
"Administrative Questionnaire" means an Administrative
----------------------------
Questionnaire substantially in the form of Exhibit E-2 to the Liquidity
Agreement.
"Affected Lender Liquidity Advance" means a Liquidity Advance
---------------------------------
made pursuant to Section 5.09(c) of the Liquidity Agreement and, for all
purposes of the Related Documents, shall be treated as a Commitment Termination
Date Liquidity Advance.
"Affected Liquidity Lender" is defined in clause (a) of Section
-------------------------
5.09 of the Liquidity Agreement.
"Affiliate" means, with respect to any specified Person, another
---------
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person specified. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and "controlled" and "controlling"
have meanings correlative to the foregoing.
"Agent" means Citicorp USA, Inc., in its capacity as collateral
-----
agent under the Collateral Agreement, and any successor thereto.
"Aggregate Face Amount" means, on any date, with respect to
---------------------
Commercial Paper Notes issued at a discount, the aggregate face amount of all
such Commercial Paper Notes Outstanding on such date and, with respect to
interest bearing Commercial Paper Notes, the aggregate face amount of all such
Commercial Paper Notes Outstanding on such date plus the accrued and unpaid
interest thereon and interest that will accrue prior to maturity.
"Aggregate Liquidity Commitment" means, as of any date of
------------------------------
determination, the sum of the Liquidity Lenders' Liquidity Commitments on such
date.
<PAGE>
"Aggregate Outstanding CP" means, as of any date, the Aggregate
------------------------
Face Amount of Commercial Paper Notes Outstanding on such date, net of any
amounts on deposit on such date in the Collateral Account and/or the Commercial
Paper Account and/or the Termination Advance Account, set aside for the
repayment of the principal of, or interest on, Commercial Paper Notes.
"Aggregate Outstandings" means, as of any date, the sum of (a)
----------------------
the aggregate principal amount of and accrued interest on all Liquidity Advances
Outstanding on such date and (b) the Aggregate Outstanding CP on such date, net
of any amounts on deposit on such date in the Collateral Account set aside for
the repayment of the principal of, or interest on, Liquidity Advances.
"Amortization Commencement Date" means the earlier to occur of
------------------------------
(a) the occurrence of an Amortization Event described in Section 9.01(f) with
respect to TRS, Finco or Leasco, or Section 9.01(k) or 9.01(l), in each case, of
the Liquidity Agreement, (b) the date on which Finco's right to issue Commercial
Paper Notes terminates under Section 9.02 of the Liquidity Agreement or (c) the
date of declaration of the commencement of the Amortization Period by written
notice to Finco pursuant to Section 9.02 of the Liquidity Agreement.
"Amortization Event" is defined in Section 9.01 of the Liquidity
------------------
Agreement.
"Amortization Period" means the period commencing on the
-------------------
Amortization Commencement Date and ending on the date Liquidity Commitments have
been terminated and all amounts due and payable to the Liquidity Agent, the
Liquidity Lenders and the Holders with respect to the Commercial Paper Notes
have been paid in full.
"Applicable Law" means all applicable provisions of all (a)
--------------
constitutions, statutes, treaties, rules, regulations and orders of governmental
bodies, (b) governmental approvals and (c) orders, decisions, judgments and
decrees of all courts and arbitrators.
"ASPA" means the Asset and Stock Purchase Agreement dated as of
----
September 19, 1996, by and between Old Ryder and TRS.
"Assets" means, with respect to any Person, any interest of any
kind in any assets or property of any kind (including the Vehicles), tangible or
intangible, real, personal or mixed, now owned or hereafter acquired by such
Person as the context may require.
"Assigned Collateral" is defined in Section 4.01(b) of the
-------------------
Collateral Agreement.
"Assignee Lender" is defined in Section 11.11(a) of the Liquidity
---------------
Agreement.
"Assignment and Acceptance" means an Assignment and Acceptance
-------------------------
Agreement substantially in the form of Exhibit E-1 to the Liquidity Agreement.
"Authenticating Representatives" is defined in Section 2 of the
------------------------------
Depositary Agreement.
"Authorized Officer" means (a) those officers, employees and
------------------
agents of Finco whose signatures and incumbency shall have been certified to the
Liquidity Agent and the Liquidity Lenders pursuant to Section 6.01(a) of the
Liquidity Agreement or in such other certificates as may be delivered by Finco
to the Liquidity Agent from time to time as duly authorized to execute and
deliver the Liquidity Agreement, any other Liquidity Document and any other
Related Document to which Finco is a party and any instruments or documents in
connection therewith on behalf of Finco and to
<PAGE>
take, from time to time, all other actions on behalf of Finco in connection
therewith; (b) those officers, employees and agents of Leasco whose signatures
and incumbency shall have been certified to the Lender pursuant to clause (e) of
Section 11.01 of the Loan Agreement or in such other certificates as may be
delivered by Leasco to the Lender from time to time as duly authorized to
execute and deliver the Loan Agreement and any instruments, certificates,
notices and other documents in connection therewith on behalf of Leasco and to
take, from time to time, all other actions on behalf of Leasco in connection
therewith; and (c) those officers, employees and agents of TRS whose signatures
and incumbency shall have been certified to the Liquidity Agent and the
Liquidity Lenders pursuant to Section 32(d) of the Lease or in such other
certificates as may be delivered by TRS to Leasco from time to time as duly
authorized to execute and deliver the Lease and any instruments, certificates,
notices and other documents in connection therewith on behalf of TRS and to
take, from time to time, all other actions on behalf of TRS in connection
therewith.
"Authorized Employee" is defined is Section 12.3 of the Lease.
-------------------
"Authorized Representatives" is defined in Section 2 of the
--------------------------
Depositary Agreement.
"Authorized Signatories" is defined in Section 2 of the
----------------------
Depositary Agreement.
"Bankruptcy Code" means The Bankruptcy Reform Act of 1978, as
---------------
amended from time to time, and as codified as 11 U.S.C. Section 101 et seq.
-- ---
"Base Lease" means the Amended and Restated Master Motor Vehicle
----------
Lease Agreement, dated as of the Closing Date, between the Lessor and the
Lessee, as the same may be amended, modified or supplemented from time to time
in accordance with its terms, exclusive of any Lease Annex.
"Base Rate" means, on any date and with respect to any Base Rate
---------
Advance, a fluctuating rate of interest per annum equal to the higher of
(a) the Prime Rate for such day; and
(b) the Federal Funds Rate plus 0.50% per annum.
Changes in the rate of interest on that portion of any Liquidity Advance
maintained as Base Rate Advances will take effect simultaneously with each
change in the Base Rate. The Liquidity Agent will give notice promptly to Finco
and the Liquidity Lenders of changes in the Base Rate.
"Base Rate Advance" means a Liquidity Advance under the Liquidity
-----------------
Agreement bearing interest at a fluctuating rate determined by reference to the
Base Rate.
"Board" means the Board of Governors of the Federal Reserve
-----
System or any successor there to.
"Board of Directors" means the Board of Directors of the Lessee
------------------
or any authorized committee of the Board of Directors.
"Book Entry CP Holder" is defined in Section 6(e) of the
--------------------
Depositary Agreement.
"Book Entry CP Notes" is defined in Section 6(a) of the
-------------------
Depositary Agreement.
-3-
<PAGE>
"Book Entry Issuance Instruction" is defined in Section 3(b) of
-------------------------------
the Depositary Agreement.
"Book Entry Procedures" is defined in Section 6(a) of the
---------------------
Depositary Agreement.
"Borrowing" means the Liquidity Advances of the same type and, in
---------
the case of LIBOR Advances, having the same Interest Period, and made by all
Liquidity Lenders on the same Business Day pursuant to the same Borrowing
Request in accordance with Sections 3.01(a) or 3.01(b) of the Liquidity
Agreement.
"Borrowing Base" means, as of any date of determination, an
--------------
amount equal to the sum of (without duplication): (a) the aggregate principal
amount of all Loans outstanding on such date under the Loan Agreement, (b) in
the case of all such Loans funded by Commercial Paper Notes, interest accrued on
such Loans as of such date and interest that will accrue on such Loans through
the maturity date of the Commercial Paper Notes issued to fund such Loans, (c)
in the case of all such other Loans, interest accrued on such Loans as of such
date and (d) the outstanding principal amount (together with accrued interest on
and accreted discounts with respect to such principal) of Eligible Investments
and cash (other than any amounts on deposit on such date in the Collateral
Account and set aside for the repayment of the principal of, or interest on,
Liquidity Advances, or Commercial Paper Notes) then held by the Agent in the
Collateral Account, minus any Borrowing Base Decline.
"Borrowing Base Decline" means the amount of all payments of
----------------------
interest then or previously due but not paid with respect to the Liquidity
Advances.
"Borrowing Base Deficiency" means, with respect to any date of
-------------------------
determination, the amount by which the Aggregate Outstandings on such date
exceeds the Borrowing Base on such date.
"Borrowing Date" means the date a Loan is made to Leasco under
--------------
the Loan Agreement.
"Borrowing Request" means a request and certificate for Liquidity
-----------------
Advances, substantially in the form of Exhibit C to the Liquidity Agreement.
"Business Day" means
-------------
(a) any day other than a Saturday, Sunday or other day on which
banks are authorized or required by law to be closed in New York City, New York;
and
(b) relative to the making, continuing, prepaying or repaying of
LIBOR Advances, any day on which dealings in Dollars are carried on in the
London interbank market.
"Capitalized Cost" means, with respect to each Vehicle, the
----------------
aggregate amount paid in connection with the purchase of such Vehicle by Leasco,
such aggregate amount to include amounts paid (i) to the Eligible Box
Manufacturer of such Vehicle, (ii) to the Eligible Chassis Manufacturer of the
chassis of such Vehicle, (iii) in connection with the transportation or shipping
of such Vehicle and (iv) as dealer profit and delivery charges, (v) in
connection with the appropriate painting and labeling of such Vehicle and (vi)
as miscellaneous and servicing costs as determined in good faith by the Lessee,
but excluding any registration or titling fees.
-4-
<PAGE>
"Capitalized Lease Obligations" means Indebtedness represented by
-----------------------------
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such debt shall be
the capitalized amount of such obligations determined in accordance with such
principles.
"Cash" means cash and cash equivalents (including marketable
----
securities and short-term investments).
"Cash Equivalents" means units of money market funds rated in the
----------------
highest credit rating category by S&P or Moody's.
"Cash Reserve Account" is defined in Section 5.01(a) of the
--------------------
Collateral Agreement.
"Casualty" means, with respect to any Vehicle, that (a) such
--------
Vehicle is lost, converted or stolen for a period of at least 90 days or (b)
such vehicle is destroyed, seized or otherwise rendered permanently unfit or
unavailable for use.
"Casualty Payment" is defined in Section 6 of the Lease.
----------------
"Certificate of Title" means, with respect to each Vehicle, the
--------------------
certificate of title applicable to such Vehicle duly issued in accordance with
the certificate of title act or statute of the jurisdiction applicable to such
Vehicle.
"Certificated Notes" is defined in Section 2 of the Depositary
------------------
Agreement.
"Change in Control" is deemed to have occurred if (a) any person
-----------------
or group (within the meaning of Rule 13d-5 of the Securities Exchange Act of
1934 as in effect on the date hereof) shall own or control at any time directly
or indirectly, beneficially or of record, shares representing a greater
percentage of either (i) the outstanding common stock of TRS or (ii) the
aggregate ordinary voting power represented by all the outstanding capital stock
of TRS, than the percentage of such shares directly owned and controlled,
beneficially and of record, collectively by the Permitted Holders; (b) the
Permitted Holders shall cease to directly own and control at any time,
beneficially and of record, collectively at least 51% (or, at any time after an
IPO, at least 35%) of (i) the outstanding common stock of TRS or (ii) the
aggregate ordinary voting power represented by all the outstanding capital stock
of TRS (excluding, at any time prior to an IPO, up to 10% of such common stock
or voting power to the extent such common stock or the capital stock
representing such voting power is beneficially owned by the Management
Investors); (c) a majority of the voting seats (other than vacant seats) on the
board of directors of TRS shall at any time be occupied by persons who were
neither (i) nominated by a Permitted Holder or by a majority of the board of
directors of TRS nor (ii) appointed by directors so nominated; (d) any change in
control (or similar event, however denominated) with respect to TRS or any
Subsidiary shall occur under and as defined in the agreement or indenture in
respect of the Subordinated Notes or in any other agreement, indenture or other
instrument in respect of Indebtedness to which TRS or any Subsidiary is a party;
(e) any person or group, other than one or more Permitted Holders, shall
otherwise directly or indirectly, Control TRS; or (f) TRS shall (i) cease to own
and control, directly or indirectly, beneficially and of record, 100% of each
class of outstanding capital stock of each Subsidiary of TRS free and clear of
all Liens (other than any Lien under the Collateral Agreement or under the
Security Documents (as such term is defined in the Credit Agreement)) or (ii)
cease to have the power (regardless of whether such power is exercised) to elect
100% of the board of directors of each Subsidiary.
-5-
<PAGE>
"Citibank" means Citibank, N.A., a national banking association.
--------
"Closing Date" is defined in Section 6.01 of the Liquidity
------------
Agreement.
"Closing Date Certificate" means a certificate, substantially in
------------------------
the form of Exhibit F to the Liquidity Agreement, duly completed and executed by
an Authorized Officer of Finco, addressed to the Liquidity Lenders and the
Liquidity Agent.
"Code" means the Internal Revenue Code of 1986, as amended,
----
reformed or otherwise modified from time to time, and any successor statute of
similar import, in each case as in effect from time to time. References to
sections of the Code also refer to any successor sections.
"Collateral" shall have the meaning set forth in Section 4.01(b)
----------
of the Collateral Agreement.
"Collateral Account" is defined in Section 5.01(a) of the
------------------
Collateral Agreement.
"Collateral Agreement" means the Collateral Agreement, dated as
--------------------
of August 7 , 1997, among Finco, Leasco, the Agent, the Liquidity Agent, the
Depositary and the Dealers, substantially in the form of Exhibit H to the
Liquidity Agreement, as such agreement may be amended, supplemented, restated or
otherwise modified from time to time in accordance with the terms thereof and of
the Liquidity Agreement.
"Commercial Paper Account" is defined in clause (a) of Section
------------------------
2.04 of the Liquidity Agreement.
"Commercial Paper Deficit" is defined in Section 3.06(b) of the
------------------------
Liquidity Agreement.
"Commercial Paper Notes" means the promissory notes of Finco
----------------------
issued by Finco in the commercial paper market pursuant to the Depositary
Agreement.
"Commitment Fee" is defined in Section 4.05(a) of the Liquidity
--------------
Agreement.
"Commitment Termination Date Liquidity Advance" means a Liquidity
---------------------------------------------
Advance made by a Liquidity Lender pursuant to Section 3.06(b)(ii) or 5.09(c) of
the Liquidity Agreement.
"Confidential Information" means information that TRS, Finco or
------------------------
Leasco furnishes to a Liquidity Lender on a confidential basis, but does not
include any such information that is or becomes generally available to the
public other than as a result of a disclosure by any Liquidity Lender or other
Person to which a Liquidity Lender delivered such information or that is or
becomes available to such Liquidity Lender from a source other than Finco or
Leasco; provided that such source is not (1) known to such Liquidity Lender to
--------
be bound by a confidentiality agreement with TRS, Finco or Leasco, as the case
may be, or (2) known to such Liquidity Lender to be otherwise prohibited from
transmitting the information by a contractual, legal or fiduciary obligation.
"Confidentiality Agreement" is defined in Section 3(b)(ix) of the
-------------------------
Dealer Agreement.
"Contingent Obligation" as applied to any Person means any
---------------------
obligation, contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any Indebtedness of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation of such Person, direct or indirect, (a) to purchase or pay (or
advance or
-6-
<PAGE>
supply funds for the purchase or payment of) such Indebtedness, (b) to purchase
or lease property, securities or services for the purpose of assuring the owner
of such Indebtedness of the payment of such Indebtedness or (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness; provided however, that the term "Contingent Obligation" shall not
include endorsements for collection or deposit in the ordinary course of
business.
"Continuation/Conversion Notice" means a notice of continuation
------------------------------
or conversion and certificate, duly executed by an Authorized Officer of Finco,
substantially in the form of Exhibit D to the Liquidity Agreement.
"Contractual Obligation" means, with respect to any Person, any
----------------------
provision of any security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"Control" shall mean the possession, directly or indirectly, of
-------
the power to direct or cause direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Court" means any court, tribunal, arbitrator or other
-----
adjudicative authority in any proceeding.
"Credit Agreement" means the Credit Agreement dated as of October
----------------
17, 1996, among Lessee, the lenders named therein, Citibank, N.A. as
Administrative Agent, Citicorp USA, Inc. as Collateral Agent, as amended and
restated as of the Closing Date and as further amended, supplemented, restated
or otherwise modified from time to time in accordance with its terms.
"CTR" means the Consumer Truck Rental business unit of Old Ryder.
---
"Custodian" shall mean that party acting in such capacity at any
---------
time under the Custody Agreement.
"Custody Agreement" shall mean the Custody Agreement in the form
-----------------
of Exhibit P to the Liquidity Agreement, among Leasco, TRS and the Custodian.
"Dealer Agreement" means the Dealer Agreement, dated as of the
----------------
Closing Date, among the Dealers, Leasco and Finco, substantially in the form of
Exhibit L to the Liquidity Agreement, as amended, supplemented, restated or
otherwise modified from time to time in accordance with its terms.
"Dealers" means Citicorp Securities, Inc., or any other dealer of
-------
Commercial Paper Notes engaged by Finco from time to time and who becomes a
party to the Collateral Agreement, for so long as such Person is so engaged by
Finco.
"Definitions List" means this Definitions List.
----------------
"Depositary" means Citibank, or such other banking institution as
----------
Finco shall appoint, with the prior written consent of the Majority Banks (which
consent shall not be unreasonably withheld
-7-
<PAGE>
or delayed), as issuing and paying agent for Commercial Paper Notes under the
Depositary Agreement and as agent for the Holders.
"Depositary Agents" means those officers, employees and agents of
-----------------
the Depositary whose signatures and incumbency shall have been certified to the
Agent pursuant to clause (b) of Section 3.01 of the Collateral Agreement or in
such other certificates as may be delivered by the Depositary to the Agent from
time to time as duly authorized to act, and to give instructions and notices, on
behalf of the Depositary, under the Collateral Agreement.
"Depositary Agreement" means the Depositary Agreement, dated as
--------------------
of the Closing Date, between Finco and the Depositary, substantially in the form
of Exhibit K to the Liquidity Agreement, as amended, supplemented, restated or
otherwise modified from time to time in accordance with its terms.
"Depositary Authorization Letter" is defined in Section 2 of the
-------------------------------
Depositary Agreement.
"Depositary Incumbency Certificate" is defined in Section 3.01(b)
---------------------------------
of the Collateral Agreement.
"Deposited Funds" means all moneys, instruments, cash and
---------------
proceeds deposited at any time in any and all of the Accounts.
"Depreciation Charges" means, with respect to each Vehicle for
--------------------
any single month, the product of (i) the Depreciation Rate for such Vehicle
multiplied by (ii) the Capitalized Cost of such Vehicle, and if such
Depreciation Charge is to be calculated for any period shorter than one month,
such product (x) multiplied by the number of days in such period and (y) divided
by 30.
"Depreciation Rate" means, with respect to any (a) Initial
-----------------
Vehicle, the applicable depreciation rate set forth in Attachment E to the Base
Lease and (b) Subsequently Acquired Vehicle, the applicable depreciation rate
set forth in the related Monthly Vehicle Statement for such Vehicle calculated
on a monthly basis and, equal to: (i) .91% of the Capitalized Cost per month for
10-foot trucks, 15-foot trucks and parcel vans; (ii) 1.07% of the Capitalized
Cost per month for 20-foot trucks and 24-foot gasoline powered trucks; and (iii)
0.76% of the Capitalized Cost per month for 24-foot diesel-powered trucks; and
provided, further, that such Depreciation Rates may not be changed without the
- -------- -------
prior written consent of the Agent.
"Designated Location" is defined in Section 2(b)(vi) of the
-------------------
Custody Agreement.
"Designated Persons" is defined in Section 2 of the Depositary
------------------
Agreement.
"Determination Date" means the twentieth day of each month,
------------------
beginning on August 20, 1997.
"Disposition Date" means if such Vehicle (i) was returned to the
----------------
Lessor, the date that such Vehicle was accepted for return by the Lessor, (ii)
was disposed of by the Lessee in accordance with any instructions of the Lessor,
the date on which such Vehicle was delivered to the location designated by the
Lessor in accordance with the Lessor's instructions, or (iii) was sold to any
Person, the date on which the proceeds of such sale are received by the Lessor.
-8-
<PAGE>
"Disposition Proceeds" means the net proceeds from the sale or
--------------------
disposition of a Vehicle.
"Disposition Shortfall Percentage" means the greater of (a) zero
--------------------------------
and (b) as of any Determination Date, if the aggregate Disposition Proceeds
resulting from sales or other dispositions of Vehicles during the three-month
period immediately preceding such Determination Date are less than the aggregate
Net Book Value of such Vehicles (for each Vehicle, measured as of such Vehicle's
Disposition Date), that percentage represented by one minus (i) the aggregate
Disposition Proceeds of such Vehicles sold or disposed of during such
three-month period divided by (ii) the aggregate Net Book Value (for each
Vehicle, measured as of such Vehicle's Disposition Date) of such Vehicles sold
or otherwise disposed of during such three-month period; provided, however, that
-------- -------
if on any such Determination Date clause (b) is found to be greater than clause
(a) of this definition, the percentage calculated pursuant to clause (b) hereof
shall be the Disposition Shortfall Percentage until the earlier of (x) the
anniversary of such Determination Date and (y) the next Determination Date upon
which clause (b) is calculated so as to be greater than the then-current
Disposition Shortfall Percentage.
"Dollar" and the symbol "$" mean the lawful currency of the
------ -
United States.
"Domestic Office" shall mean, relative to any Liquidity Lender,
---------------
the office of such Liquidity Lender in the United States designated as such
below its signature to the Liquidity Agreement or such other office of such
Liquidity Lender within the United States as may be designated from time to time
by notice from such Liquidity Lender to each other Person party to the Liquidity
Agreement.
"DTC" means The Depository Trust Company.
---
"Eligible Box Manufacturer" shall mean each of Morgan
-------------------------
Corporation, Utilimaster, Grumman Allied Industries, Inc., Supreme Corporation
and Union City Body Co.
"Eligible Chassis Manufacturer" shall mean each of Ford, GMC,
-----------------------------
Navistar International Transportation Company, Chrysler Corporation, Isuzu
Motors Limited and Freightliner Corporation.
"Eligible Investments" means
--------------------
(a) Government Obligations;
(b) participation certificates (excluding strip mortgage
securities which 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 National 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 of
America 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
Prime-1 or any obligation that has ratings from S&P and Moody's at least
-9-
<PAGE>
equivalent to A-1 and Prime-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 Prime-1, respectively;
(d) commercial paper maturing in not more than 365 days 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 Agent shall have received a legal opinion or opinions to the effect that
full 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 Prime-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 (i) above;
(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;
(g) investments in a money-market fund which may be a 12b-1
fund as registered under the Investment Company Act and is rated at least the
equivalent of AAm or AAm-G by S&P and Prime-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 Prime-1 by Moody's;
(i) repurchase agreements collateralized by 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 Prime-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 Agent or an independent third party acting solely as agent for
the Agent, provided that any such third party (A) is (1) a Federal Reserve bank,
(2) 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 $25
million, or (3) a bank approved in writing for such purpose by the Majority
Banks, and (B) certifies in writing to the Agent (or delivers to the 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 Agent;
-10-
<PAGE>
(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 Agent;
(D) such repurchase agreement has a term of 30 days or less, or
the Agent will value the Collateral Securities no less frequently than monthly
and will liquidate the Collateral Securities if any deficiency in the required
collateral percentage is not restored within two business days of such
valuation;
(E) such repurchase agreement matures (or permits the Agent to
withdraw all or any portion of the invested funds) at least 10 days (or other
appropriate liquidation period) prior to each 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 103%; and
(G) the 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) other investment instruments approved in writing by the
Majority Banks and offered by financial institutions that have a combined
capital and surplus and undivided profits of not less than $250,000,000 and with
respect to which the Agent shall have received written confirmation of the
Rating Agencies that inclusion of any such investment instrument as an Eligible
Investment will not result in the downgrading or withdrawal of the then current
ratings of the Commercial Paper Notes by the Rating Agencies.
"Eligible Liquidity Lender" means (a) a commercial bank having
-------------------------
total assets in excess of $500,000,000, (b) a finance company, insurance company
or other financial institution that in the ordinary course of business enters
into transactions of a type similar to that entered into by the Liquidity
Lenders under the Liquidity Agreement and has total assets in excess of
$200,000,000, and whose becoming an assignee would not constitute a prohibited
transaction under Section 4975 of ERISA and (c) any other financial institution
satisfactory to Finco and the Liquidity Agent, in each case having a short-term
rating or an equivalent long-term debt rating from S&P and Moody's at least
equal to the then current rating of the Commercial Paper Notes, but in any event
not less than a rating of A-2 by S&P and P-2 by Moody's; provided, however, that
-------- -------
any Person who does not have either a short-term rating from S&P or Moody's
shall be deemed to have the required rating set forth above if such Rating
Agency confirms in writing that such Person, if its short-term debt obligations
were rated, would be assigned such required rating.
"Eligible Vehicle" means a truck that is (i) manufactured by
----------------
Manufacturers and (ii) owned by Leasco free and clear of all Liens other than
Permitted Liens.
"Enhancement Test Percentage" shall be, as of any date, equal to
---------------------------
the sum of (a) the lesser of (i) the Required Enhancement Percentage minus 2%
and (ii) one minus the quotient (expressed as a percentage) of Aggregate
Outstandings divided by the sum of (A) the Net Book Value of the Fleet and (B)
amounts held in the Collateral Account not set aside for the repayment of
principal or interest on either Liquidity Advances or Commercial Paper Notes and
the Termination Advance Account minus (C) any fees, expenses and interest due
pursuant to Section 4.01 of the Loan
-11-
<PAGE>
Agreement and, as of the date of such determination, unpaid, and (b) the Actual
Cash Reserve Percentage.
"Environmental Claim" shall mean any written accusation,
-------------------
allegation, notice of violation, claim, demand, order, directive, cost recovery
action or other cause of action by, or on behalf of, any Governmental Authority
or any person for damages, injunctive or equitable relief, personal injury
(including sickness, disease or death), Remedial Action costs, tangible or
intangible property damage, natural resource damages, nuisance, pollution or any
adverse effect on the environment caused by any Hazardous Material, or for
fines, penalties or restrictions, resulting from or based upon (a) the
existence, or the continuation of the existence, of a Release (including sudden
or non-sudden, accidental or non-accidental Releases), (b) exposure to any
Hazardous Material, (c) the presence, use, handling, transportation, storage,
treatment or disposal of any Hazardous Material or (d) the violation or alleged
violation of any Environmental Law or Environmental Permit.
"Environmental Laws" means any and all applicable present and
------------------
future treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions or binding agreements issued, promulgated or entered into
by any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, the management, Release or
threatened Release of any Hazardous Material or to public health and safety
matters, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. (S)(S) 9601 et seq. (collectively
"CERCLA"), the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42
U.S.C. (S)(S) 6901 et seq., the Federal Water Pollution Control Act, as amended
by the Clean Water Act of 1977, 33 U.S.C. (S)(S) 1251 et seq., the Clean Air Act
of 1970, as amended 42 U.S.C. (S)(S) 7401 et seq., the Toxic Substances Control
Act of 1976, 15 U.S.C. (S)(S) 2601 et seq., the Occupational Safety and Health
Act of 1970, as amended, 29 U.S.C. (S)(S) 651 et seq., the Emergency Planning
and Community Right-to-Know Act of 1986, 42 U.S.C. (S)(S) 11001 et seq., the
Safe Drinking Water Act of 1974, as amended, 42 U.S.C. (S)(S) 300(f) et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. (S)(S) 5101 et seq., and
any similar or implementing state or local law, and all amendments or
regulations promulgated under any of the foregoing.
"Environmental Permit" means any permit, approval, authorization,
--------------------
certificate, license, or variance required by or from any Governmental Authority
pursuant to any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
-----
1974, as amended, and any successor statute of similar import, as in effect from
time to time. References to sections of ERISA also refer to any successor
sections.
"ERISA Affiliate" means, with respect to any Person, any
---------------
corporation, trade or business that is, along with such Person, treated as a
single employer under Section 414(b) or (c) of the Code or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined
-----------
in Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan and with respect to which the PBGC has neither waived the reporting
requirements nor publicly announced that it will not impose monetary penalties
for failure to meet the reporting requirements; (b) the adoption of any
amendment to a Plan that would require the provision of security pursuant to
Section 401(a)(29) of the Code or
-12-
<PAGE>
Section 307 of ERISA; (c) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (d) the filing pursuant to Section
412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Plan; (e) the incurrence of any
liability under Title IV of ERISA with respect to the termination of any Plan or
the withdrawal or partial withdrawal of TRS, Finco, Leasco or any of their
respective ERISA Affiliates from any Plan or Multiemployer Plan; (f) the receipt
by TRS, Finco, Leasco or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to the intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (g) the receipt by any of
TRS, Finco, Leasco or any ERISA Affiliate of any notice concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA; (h) the occurrence of a "prohibited transaction" with respect
----------------------
to a Plan pursuant to which Finco, Leasco, the Lessee or any of their respective
Subsidiaries is a "disqualified person" (within the meaning of Section 4975 of
the Code) or with respect to which TRS, Finco, Leasco or any of their respective
Subsidiaries could otherwise be liable; and (i) any other event or condition
with respect to a Plan or Multiemployer Plan that could reasonably be expected
to result in liability of TRS, Finco or Leasco (other than for the payment of
premiums to the PBGC or the payment of contributions to any such Plan or
Multiemployer Plan made in the ordinary course of business).
"Event of Bankruptcy" shall be deemed to have occurred with
-------------------
respect to a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or all
or any substantial part of its assets, or any similar action with respect to
such Person under any law relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, and such case or proceeding
shall continue undismissed, or unstayed and in effect, for a period of 60
consecutive days; or an order for relief in respect of such Person shall be
entered in an involuntary case under the Federal bankruptcy laws or other
similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect, or
shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for such Person or for any substantial part of its property, or shall
make any general assignment for the benefit of creditors; or
(c) if such Person is a corporation or similar entity, its board
of directors shall vote to implement any of the actions set forth in clause (b)
above.
"Excluded Taxes" is defined in Section 5.06(a) of the Liquidity
--------------
Agreement.
"Federal Funds Rate" means, with respect to any day, an interest
------------------
rate per annum equal 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
-13-
<PAGE>
(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 for such transactions
received by the Liquidity Agent from three federal funds brokers of recognized
standing selected by it.
"Fee Letter" means, collectively (i) the fee letter dated August
----------
7, 1997, among Citicorp Securities, Inc., the Liquidity Agent, the Agent and
Finco and (ii) the fee letter dated May 9, 1997, between Finco and the
Depositary .
"Financial Officer" means, with respect to any corporation, the
-----------------
chief financial officer, vice-president-finance, principal accounting officer,
controller or treasurer of such corporation.
"Finco" means FCTR, Inc., a Delaware corporation.
-----
"Finco Agent" means those officers, employees and agents of Finco
-----------
whose signatures and incumbency shall have been certified to the Agent pursuant
to clause (a) of Section 3.01 of the Collateral Agreement or in such other
certificates as may be delivered by Finco to the Agent from time to time as duly
authorized to act, and to give instructions and notices, on behalf of Finco,
under the Collateral Agreement.
"Finco Agreements" means the Loan Agreement, the Loan Note, the
----------------
Liquidity Agreement and any other Related Document to which Finco is a party.
"Finco Incumbency Certificate" is defined in Section 3.01(a) of
----------------------------
the Collateral Agreement.
"Finco Obligations" is defined in Section 2.01 of the Collateral
-----------------
Agreement.
"Finco's Carrying Cost Interest Rate" means for any period, the
-----------------------------------
interest rate equal to the percentage equivalent of a fraction, the numerator of
which is the sum of (a) interest payable (including the portion of such interest
representing dealer fees) by Finco during such period on the outstanding
Commercial Paper Notes (based on the weighted-average commercial paper rate),
Liquidity Advances and other Obligations (including, in each case, any post-
default interest with respect to such Obligations), (b) the monthly portion of
the quarterly fees payable by Finco pursuant to Section 4.05(a) of the Liquidity
Agreement and (c) all operating expenses and other liabilities payably by Finco
during such period (other than amounts payable by Leasco pursuant to Section
13.04 of the Loan Agreement) and the denominator of which is the average daily
outstanding principal amount of all Loans outstanding at any time during such
period.
"Fleet" means all Eligible Vehicles owned by Leasco from time to
-----
time, considered as a group.
"Fleet Disposition Limit" means that number of Vehicles equal to
-----------------------
the lesser of (i) one-twelfth of the Vehicles in the Fleet by absolute count or
(ii) the number of Vehicles in the Fleet representing an aggregate Net Book
Value (measured as of the dates of the respective sales of such Vehicles) of
one-twelfth of the Net Book Value of the Fleet, in each case measured
immediately prior to the first day of the applicable month.
-14-
<PAGE>
"Ford" means Ford Motor Company, an Eligible Chassis
----
Manufacturer.
"GAAP" means the generally accepted accounting principles
----
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors and successors from time to time.
"GMC" means General Motors Corporation, an Eligible Chassis
---
Manufacturer.
"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 of America and U.S.
Treasury REFCORPS.
"Governmental Authority" means any Federal, state, local or
----------------------
foreign court or governmental department, commission, board, bureau, agency,
authority, instrumentality or other administrative or regulatory body.
"Hazardous Substance" or "Hazardous Material" means all explosive
------------------- ------------------
or radioactive substances or wastes, hazardous or toxic substances or wastes,
pollutants, including petroleum or petroleum distillates, asbestos or
asbestos-containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"herein", "hereof", "hereto", "hereunder" and similar terms
------ ------ ------ ---------
contained in any Related Document refer to such Related Document as a whole and
not to any particular Section, paragraph or provision of such Related Document.
"Holder" means the holder from time to time of any Commercial
------
Paper Note.
"Included Taxes" is defined in Section 5.06 of the Liquidity
--------------
Agreement.
"including" shall be deemed to be followed by the words "without
---------
limitation" and means including without limiting the generality of any
description preceding such term, and, for purposes of each Related Document, the
parties thereto 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.
"Incumbency Certificate" is defined in Section 2 of the
----------------------
Depositary Agreement.
"Indebtedness", as applied to any Person, means, without
------------
duplication, (a) all obligations of such Person for borrowed money, (b) that
portion of obligations with respect to any lease of any property (whether real,
personal or mixed) that is properly classified as a liability on a balance sheet
in conformity with GAAP, (c) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(d) any obligation owed for all or any part of the deferred purchase price for
property or services (excluding trade accounts payable and accrued obligations
incurred in the ordinary course of business), which purchase price is due more
than six months after the date of placing such property in final service or
taking final delivery and title thereto or the completion of such services, (e)
all indebtedness of others secured by any Lien on any property or asset owned by
that Person regardless of whether the indebtedness secured thereby shall have
been assumed by that Person (provided that if the obligations so secured have
not been assumed by such Person, such obligations shall be deemed to be in an
amount equal to the fair market value of
-15-
<PAGE>
such property as determined in good faith by the board of directors of such
Person and (f) all Contingent Obligations of such Person in respect of any of
the foregoing.
"Indemnified Liabilities" is defined for purposes of (a) the Loan
-----------------------
Agreement in Section 13.05 thereof and (b) the Liquidity Agreement in Section
11.04 thereof.
"Indemnified Parties" is defined in Section 11.04 of the
-------------------
Liquidity Agreement.
"Independent Director" means a director who is not, and never
--------------------
was, (a) a stockholder, director, officer, employee, affiliate, associate,
customer or supplier of, or any Person that has received any benefit (excluding,
however, any compensation received by the directors, in such Person's capacity
as such director) in any form whatsoever from, or any Person that has provided
any service (excluding, however, any service provided by such director, in such
Person's capacity as such director) in any form whatsoever to, TRS or Leasco or
any of their Affiliates or associates, or (b) any Person owning beneficially,
directly or indirectly, any outstanding shares of common stock of TRS or Leasco
or any of their Affiliates, or a stockholder, director, officer, employee,
affiliate, associate, customer or supplier of, or any Person that has received
any benefit (excluding, however, any compensation received by such director, in
such Person's capacity as such director) in any form whatsoever from, or any
Person that has provided any service (excluding, however, any service provided
by such director, in such Person's capacity as such director) in any form
whatsoever to, such beneficial owner or any of such beneficial owner's
Affiliates or associates; provided that the ownership of up to 5% of any class
--------
of stock (other than stock of Finco) listed on a national securities exchange
shall not prevent an individual from meeting the foregoing requirements.
Further, if any individual who would otherwise satisfy the requirements set
forth in clauses (a) and (b) above was at one time an Independent Director of
TRS or a Subsidiary of TRS, such individual shall be considered to satisfy
clause (a) above despite such prior affiliation.
"Initial Vehicles" means those trucks leased pursuant to the
----------------
Original Lease Agreement immediately prior to the Closing Date.
"Interest Period" means (a) with respect to any LIBOR Advance (i)
---------------
made at such a time when Commercial Paper Notes are Outstanding, a 30-day or
60-day period commencing on the date of such LIBOR Advance and (ii) made at such
a time when no Commercial Paper Notes are Outstanding, a 30-day, 60-day, 90-day
or 180-day period commencing on the date of such LIBOR Advance, in each case, as
selected by Finco in its Borrowing Request; and (b), with respect to any Base
Rate Advance (i) made at such a time when Commercial Paper Notes are
Outstanding,, a period commencing on the date of such Base Rate Advance and
ending on a Business Day no later than 60 days after such date and (ii) made at
such time when no Commercial Paper Notes are Outstanding, no later than 180 days
after such date, in each case, as selected by Finco in its Borrowing Request;
provided, however, that any Liquidity Advance occurring after the occurrence of
- -------- -------
an Amortization Event and during such period that Commercial Paper Notes are
Outstanding shall not have an Interest Period shorter than the lesser of (x) 58
days and (y) that number of days elapsing between the date of such Liquidity
Advance and the date upon which no Commercial Paper Note will be Outstanding;
provided, further, that if any such period would otherwise end on a day which is
- -------- -------
not a Business Day, the Interest Period shall instead end on the next succeeding
Business Day; and provided, further that in the case of the Interest Period for
-------- ------
a LIBOR Advance, if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day.
"Investment Company Act" means the Investment Company Act of
----------------------
1940, as amended.
-16-
<PAGE>
"IPO" shall mean a fully distributed initial public offering of
---
common stock of TRS pursuant to an effective registration statement under the
Securities Act of 1933.
"Issuance Certificate" is defined in Section 5.02(d) of the
--------------------
Collateral Agreement.
"L.A. Agents" means those officers, employees and agents of the
-----------
Liquidity Agent whose signatures and incumbency shall have been certified to the
Agent pursuant to clause (c) of Section 3.01 of the Collateral Agreement or in
such other certificates as may be delivered by the Liquidity Agent to the Agent
from time to time as duly authorized to act, and to give instructions and
notices, on behalf of the Liquidity Agent, under the Collateral Agreement.
"Leasco" means RCTR, Inc., a Delaware corporation.
------
"Leasco Agents" means those officers, employees and agents of
-------------
Leasco whose signatures and incumbency shall have been certified to the Agent
pursuant to clause (d) of Section 3.01 of the Collateral Agreement or in such
other certificates as may be delivered by Leasco to the Agent from time to time
as duly authorized to act, and to give instructions and notices, on behalf of
Leasco, under the Collateral Agreement.
"Leasco Incumbency Certificate" is defined in Section 3.01(d) of
-----------------------------
the Collateral Agreement.
"Leasco Liability" means any liability (whether known or unknown,
----------------
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due), obligation or commitment of Leasco and its Subsidiaries, including any
liability for taxes.
"Lease" means the Base Lease, together with all Lease Annexes, as
-----
the same may be amended, modified or supplemented from time to time in
accordance with its terms.
"Lease Annex" means the Annex to the Base Lease, as the same may
-----------
be amended, supplemented or modified from time to time in accordance with its
terms.
"Lease Commencement Date" is defined in Section 3.2 of the Lease.
----------------------- -----------
"Lease Event of Default" is defined in Section 15.1 of the Lease.
---------------------- ------------
"Lease Expiration Date" is defined in Section 3.2 of the Lease.
--------------------- -----------
"Lease File" means, the information relating to the Lease held by
----------
the Agent which shall include: (i) an executed original counterpart of the Lease
that constitutes "chattel paper" for purposes of the applicable UCC; (ii) an
appropriate form of acknowledgment (such acknowledgment to be satisfied by the
delivery of the Monthly Vehicle Statement) evidencing delivery and acceptance of
the Vehicles subject to the Lease; (iii) Lessee's corporate resolutions and
secretary's certificate, as appropriate for the Transactions; (iv) copies of any
documentation relating to the purchase or Lease of the Vehicles subject to the
Lease; and (v) documentation evidencing insurance policies related to the
Vehicles, if any.
"Lease Payments" is defined in Section 4.01(a) of the Collateral
--------------
Agreement.
-17-
<PAGE>
"Lessee" means Ryder TRS, Inc., in its capacity as lessee under
------
the Lease, or any successor by merger to Ryder TRS, Inc. in accordance with
Section 23.1 of the Lease, or any other permitted successor or assignee of Ryder
- ------------
TRS, Inc., in its capacity as Lessee, pursuant to Section 14 of the Lease.
----------
"Lessor" means RCTR, Inc. in its capacity as the lessor under
------
the Lease.
"Lender Party" is defined in Section 13.05 of the Loan Agreement.
------------
"Letter" is defined in Section 6(a) of the Depositary Agreement.
------
"Liabilities" means all obligations to Finco of Leasco arising
-----------
under or in connection with the Loan Agreement or the Loan Note, in each case
howsoever created, arising or evidenced, whether direct or indirect, joint or
several, absolute or contingent, or now or hereafter existing, or due or to
become due including interest accruing after the filing of a bankruptcy petition
whether or not allowed as a claim.
"LIBOR" means, relative to any Interest Period for any LIBOR
-----
Advance: (a) the rate for deposits in U.S. dollars for a period equal to such
Interest Period which appears on Telerate Page 3750 as of 11:00 a.m., London
time, on the day that is two Business Days preceding the first day of such
Interest Period, or (b) if such rate does not appear on Telerate Page 3750, the
rate of interest equal to the average (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to each Reference Lender's LIBOR Office
in the London interbank market by first class banks as at or about 11:00 a.m.,
London time, two Business Days prior to the beginning of such Interest Period
for delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of each such LIBOR Advance and for a period
equal to such Interest Period. If any Reference Lender fails to provide its
offered quotation to the Liquidity Agent, LIBOR shall be determined on the basis
of the offered quotations) by the other Reference Lender(s). The Liquidity Agent
will give notice promptly to Finco and the Agent of changes in LIBOR.
"LIBOR Advance" means a Liquidity Advance under the Liquidity
-------------
Agreement bearing interest, at all times during the Interest Period applicable
thereto at a fixed rate of interest determined by reference to LIBOR.
"LIBOR Office" means, relative to any Reference Lender, Liquidity
------------
Lender or the Agent, as the case may be, the office of such Reference Lender,
Liquidity Lender or the Agent, as the case may be, designated as such below its
signature to the Liquidity Agreement or such other office of such Reference
Lender, Liquidity Lender or the Agent, as the case may be, as designated from
time to time by notice from such Reference Lender, Liquidity Lender or the
Agent, as the case may be, to Finco and the Liquidity Agent, whether or not
outside the United States, which shall be making or maintaining LIBOR Advances
of such Reference Lender or Liquidity Lender, as the case may be, under the
Liquidity Agreement.
"LIBOR Reserve Percentage" means, relative to any Interest Period
------------------------
for LIBOR Advances of any Liquidity Lender, the reserve percentage (expressed as
a decimal) equal to the aggregate reserve requirements of such Liquidity Lender
(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 Board and then applicable to assets or liabilities consisting of and
including "Eurocurrency Liabilities",
-18-
<PAGE>
as then currently defined in Regulation D of the Board, having a term
approximately equal or comparable to such Interest Period.
"Lien" means, when used with respect to any Person, any interest
----
in any real or personal property, asset or other right held, owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation, and shall include any mortgage, lien, pledge, encumbrance, charge,
retained security title of a conditional vendor or lessor, or other security
interest of any kind, whether arising under a security agreement, mortgage,
lease, deed of trust, chattel mortgage, assignment, pledge, retention or
security title, financing or similar statement, or notice or arising as a matter
of law, judicial process or otherwise.
"Limited Amortization Event" is defined in Section 9.03 of the
--------------------------
Liquidity Agreement.
"Liquidation Event of Default" means any event or condition with
----------------------------
respect to TRS, Leasco or Finco of the type described in Section 9.01(f) of the
Liquidity Agreement.
"Liquidation Servicer" means the entity selected by the Agent
--------------------
upon a Liquidation Event of Default to conduct a liquidation of the Vehicles
with the consent of the Majority Banks, in its capacity as Liquidation Servicer.
"Liquidity Advance" means any Revolving Advance, any Refunding
-----------------
Advance, any Commitment Termination Date Liquidity Advance, or any combination
thereof, as the context may require.
"Liquidity Advance Interest Payment Deficit" means, with respect
------------------------------------------
to a Payment Date, any shortfall in the amounts paid on such Payment Date by
Finco to the Liquidity Agent (on behalf of the Liquidity Lenders) in respect of
any payments of interest due on such Payment Date from Finco under the Liquidity
Agreement.
"Liquidity Advance Notes" means, with respect to any Liquidity
-----------------------
Lender, the Revolving Note and the Refunding Note issued to such Liquidity
Lender by Finco.
"Liquidity Agent" means Citibank, as agent for the Liquidity
---------------
Lenders, or such other Person as shall have subsequently been appointed as the
successor Liquidity Agent pursuant to Section 10.04 of the Liquidity Agreement.
"Liquidity Agent Incumbency Certificate" is defined in Section
--------------------------------------
3.01(c) of the Collateral Agreement.
"Liquidity Agreement" means the Liquidity Agreement, dated as of
-------------------
the Closing Date among Finco, the Liquidity Lenders and the Liquidity Agent, as
such agreement may be amended, supplemented, restated or otherwise modified from
time to time in accordance with the terms thereof.
"Liquidity Commitment" means, as to any Liquidity Lender, the
--------------------
amount set forth on the signature pages of the Liquidity Agreement for such
Liquidity Lender as its Liquidity Commitment or set forth in its Assignment and
Acceptance, as such amount may be increased or decreased from time to time
pursuant to Section 3.03, 3.04, 5.09 or 11.11(b) of the Liquidity Agreement.
"Liquidity Commitment Agreement" means a Liquidity Commitment
------------------------------
Agreement substantially in the form of Exhibit K to the Liquidity Agreement.
-19-
<PAGE>
"Liquidity Commitment Termination Date" means the earlier to
-------------------------------------
occur of
(a) the date on which the Aggregate Liquidity Commitment has
been terminated in full or reduced to zero pursuant to Section 3.03 or 9.02 of
the Liquidity Agreement; and
(b) the Scheduled Liquidity Commitment Termination Date.
"Liquidity Documents" means the Liquidity Agreement, the
-------------------
Liquidity Advance Notes, any Borrowing Request, any Continuation/ Conversion
Notice, any Liquidity Commitment Agreement, any Assignment and Acceptance, the
Closing Date Certificate, and each other agreement, instrument, certificate or
other document delivered in connection therewith.
"Liquidity Lender Account" means the account established pursuant
------------------------
to Section 3.07(a) of the Liquidity Agreement.
"Liquidity Lenders" is defined in the preamble of the Liquidity
-----------------
Agreement.
"Liquidity Participant" is defined in Section 11.11(b) of the
---------------------
Liquidity Agreement.
"Loan Agreement" means the Loan Agreement, dated as of the
--------------
Closing Date, between Finco, as the lender thereunder, and Leasco, as the
borrower thereunder, substantially in the form of Exhibit G to the Liquidity
Agreement, as amended, supplemented, restated or otherwise modified from time to
time in accordance with its terms.
"Loan Closing Date" means the date on which the initial Loans are
-----------------
made by the Lender under the Loan Agreement.
"Loan Collateral" shall have the meaning set forth in Section
---------------
4.01(a) of the Collateral Agreement.
"Loan Commitment" is defined in Section 2.01 of the Loan
---------------
Agreement.
"Loan Commitment Amount" shall mean, as of any date, the Program
----------------------
Size less the aggregate discount on Commercial Paper Notes outstanding on such
date.
"Loan Commitment Termination Date" means the earliest to occur of
--------------------------------
(a) a Loan Event of Default described in Section 12.01(b) of the Loan Agreement;
(b) a Loan Event of Default other than the one referred to in the foregoing
clause (a) and the declaration of a Loan Event of Default by the Lender pursuant
to Section 12.02 of the Loan Agreement; and (c) an Amortization Event under the
Liquidity Agreement.
"Loan Event of Default" means any of the events described in
---------------------
Section 12.01 of the Loan Agreement.
"Loan Note" is defined in Section 3.01 of the Loan Agreement.
---------
"Loan Request" means a loan request, substantially in the form of
------------
Exhibit B-1 to the Loan Agreement, executed by an Authorized Officer of Leasco.
"Loan Request Response" means a loan request response,
---------------------
substantially in the form of Exhibit B-2 to the Loan Agreement, signed by an
Authorized Officer of the Lender.
-20-
<PAGE>
"Loans" is defined in Section 2.01 of the Loan Agreement.
-----
"Majority Banks" means, at any time, Liquidity Lenders holding,
--------------
in the aggregate, Liquidity Commitments equaling or exceeding 66-2/3% of the
Aggregate Liquidity Commitment; provided, however, that any Liquidity Lender
-------- -------
that has defaulted in making a Liquidity Advance shall (if such default is then
continuing) be considered to have a Liquidity Commitment equal to its
Outstanding Liquidity Advances; and provided further that the Liquidity
----------------
Commitment of any Liquidity Lender whose Liquidity Commitment has been drawn,
terminated and not repaid shall equal the unpaid or unreimbursed balance of its
Liquidity Advances.
"Management Investors" means management and other employees of
--------------------
TRS and its Subsidiaries who are as of the Closing Date or become in the future
purchasers of common stock of TRS pursuant to any Option Plan.
"Manufacturer" means each of the Eligible Box Manufacturers and
------------
Eligible Chassis Manufacturers.
"Manufacturer Ineligibility Event" shall mean, with respect to
--------------------------------
any Eligible Chassis Manufacturer an Event of Bankruptcy with respect to such
Eligible Chassis Manufacturer.
"Margin Stock" shall have the meaning assigned to such term in
------------
Regulation U of the Board.
"Market Adjustment Percentage" means the greater of (a) zero and
----------------------------
(b) on any Determination Date occurring in March, June, September or December,
that percentage represented by one minus the quotient of (i) the aggregate
Market Value of the Fleet as of such Determination Date divided by (ii) the
product of (A) the Net Book Value of the Fleet multiplied by (B) the Market Test
Percentage, in each case as of such Determination Date; provided, however, that
-------- -------
if on any Determination Date clause (b) is found to be greater than clause (a)
of this definition, the percentage calculated pursuant to clause (b) hereof
shall be the Market Adjustment Percentage until the earliest of (x) the
anniversary of such Determination Date and (y) the next Determination Date upon
which clause (b) above is calculated as being greater than the then-current
Market Adjustment Percentage.
"Market Test Percentage" means, with respect to each of the full
----------------------
years ending on July 31 of 1998, 1999, 2000, 2001 and each year thereafter,
100%, 98.5%, 97%, 95.5% and 94%, respectively.
"Market Value" means, as of any date of determination, with
------------
respect to the Vehicles in the Fleet, the aggregate Resale Value of such
Vehicles as calculated by reference to the applicable Resale Value Table for the
Truck Category to which each Vehicle in the Fleet relates.
"Master Note" means the form of Commercial Paper Note attached to
-----------
the Depositary Agreement as Exhibit E thereto.
"Material Adverse Effect" means, with respect to any occurrence,
-----------------------
event or condition:
(a) a materially adverse effect on the financial condition,
business, assets, operations or business prospects of TRS and its Subsidiaries
taken as a whole, other than a materially adverse effect on the business
prospects of TRS and its Subsidiaries taken as a whole that have similarly
affected TRS's major competitors;
-21-
<PAGE>
(b) a materially adverse effect on the ability of (i) TRS to
perform its material obligations under any of the Related Documents to which it
is a party, (ii) Leasco to perform its material obligations under any of the
Related Documents to which it is a party or (iii) Finco to perform its material
obligations under any of the Related Documents to which it is a party; or
(c) an adverse effect on (i) the enforceability of any of the
Related Documents (ii) on the priority or perfection of Finco's or the Agent's
Lien on a material portion of the Loan Collateral or Assigned Collateral.
"Maximum Vehicle Lease Term" is defined in paragraph 5 of the
-------------------------- -----------
Lease Annex.
"Monthly Base Rent" with respect to the Vehicles is defined in
-----------------
the Lease Annex.
"Monthly Report" means a report, substantially in the form of
--------------
Attachment C to the Loan Agreement, duly completed and certified by a
Responsible Officer of Finco.
"Monthly Vehicle Statement" means a statement, substantially in
-------------------------
the form of Attachment F to the Loan Agreement.
"Moody's" means Moody's Investors Service, Inc.
-------
"Multiemployer Plan" shall mean a multiemployer plan as defined
------------------
in Section 4001(a)(3) of ERISA.
"Net Book Value" means (a), with respect to each Vehicle, such
--------------
Vehicle's Capitalized Cost minus the aggregate Depreciation Charges accrued with
-----
respect to such Vehicle through the last day of the Related Month and (b), with
respect to the Fleet, the sum of the Capitalized Costs of each Vehicle included
in the Fleet minus the aggregate Depreciation Charges accrued with respect to
such Vehicles through the last day of the Related Month.
"Obligations" means, with respect to any person, all obligations
-----------
(monetary or otherwise, including fixed and contingent obligations) arising
under or in connection with the Liquidity Agreement, the Liquidity Advance Notes
and each other Liquidity Document.
"Offering Memorandum" means the offering memorandum of Finco used
-------------------
by Finco or the Dealers from time to time in connection with the offering and
sale of the Commercial Paper Notes, as the same may be amended, supplemented or
modified.
"Officer's Certificate" means a certificate signed by an
---------------------
Authorized Officer of TRS, Finco or Leasco, as appropriate.
"Old Ryder" shall mean Ryder Truck Rental, Inc., a Florida
---------
corporation.
"Option Plan" shall mean any employee stock option or stock
-----------
purchase plan or other employee benefit plan of TRS or any of its Subsidiaries
in existence from time to time.
"Organic Document" means, with respect to any Person, its
----------------
certificate or articles of incorporation, its by-laws and all shareholder
agreements, voting trusts and similar arrangements applicable to any of its
authorized shares of capital stock.
"Original Lease Agreement" is defined in the introductory
------------------------
paragraph of the Lease.
-22-
<PAGE>
"Other Taxes" is defined in Section 5.06(c) of the Liquidity
-----------
Agreement.
"Outstanding" means (a) with respect to Commercial Paper Notes,
-----------
all Commercial Paper Notes issued at any time under the Depositary Agreement,
except (i) Commercial Paper Notes which have been paid through the Depositary,
- ------
(ii) matured Commercial Paper Notes which have not been presented for payment
but funds for the payment of which are on deposit in the Commercial Paper
Account established with respect thereto and are available for payment of such
Commercial Paper Notes, (iii) matured Commercial Paper Notes with respect to
which a Borrowing Request has been honored but funds for the payment of which
have not yet been deposited in the Commercial Paper Account or (iv) Commercial
Paper Notes which have been sold, but with respect to which funds have not yet
been received in connection with such sale; and (b) with respect to Liquidity
Advances, all Liquidity Advances made by the Liquidity Lenders, pursuant to the
Liquidity Agreement, and not repaid by Finco, except Liquidity Advances to be
------
repaid from the proceeds of Commercial Paper Notes being issued on the date of
such repayment.
"Payment Date" means the 25th day of each month, or, if such day
------------
is not a Business Day, the next succeeding Business Day.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
----
and defined in ERISA.
"Percentage" means, relative to any Liquidity Lender, a fraction
----------
(expressed as a percentage) obtained by dividing (a) the Liquidity Commitment of
such Liquidity Lender by (b) the Aggregate Liquidity Commitment.
"Permitted Holder" means Questor and any Affiliate thereof that
----------------
is reasonably satisfactory to the Liquidity Agent.
"Permitted Liens" means mechanics', materialmen's, landlords',
---------------
warehousemen's and carriers' Liens, and other Liens imposed by law, securing
obligations arising in the ordinary course of business that are not yet due or
are being contested in good faith.
"Person" means any natural person, corporation, business trust,
------
joint venture, association, company, limited liability company, partnership,
joint stock company, trust, unincorporated organization or Governmental
Authority.
"Plan" means any "employee pension benefit plan", as such term is
----
defined in ERISA, which is subject to Title IV of ERISA or Section 412 of the
Code or Section 307 of ERISA and in respect of which Finco, Leasco, TRS or any
of their ERISA Affiliates is (or, if such plan is terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Potential Amortization Event" means any occurrence or event
----------------------------
which, after notice or lapse of time or both, would constitute an Amortization
Event.
"Potential Lease Event of Default" means an event which with the
--------------------------------
giving of notice or lapse of time or both would constitute a Lease Event of
Default.
"Potential Loan Event of Default" means an event which, with the
-------------------------------
giving of notice or lapse of time or both, would constitute a Loan Event of
Default.
-23-
<PAGE>
"Potential Limited Amortization Event" means an event which, with
------------------------------------
the giving of notice or lapse of time or both, would constitute a Limited
Amortization Event.
"Potential Liquidation Event of Default" means an event which,
--------------------------------------
with the giving of notice or lapse of time or both, would constitute a
Liquidation Event of Default.
"Prime Rate" means the rate of interest most recently announced
----------
by Citibank at its Domestic Office as its corporate base rate; provided,
--------
however, that the Prime Rate is not necessarily intended to be the lowest rate
- -------
of interest determined by Citibank in connection with extensions of credit.
"Program Size" means, as of any date of determination the
------------
Aggregate Liquidity Commitment on such date (or, if the Liquidity Commitments of
the Liquidity Lenders shall have been terminated pursuant to Section 9.02 of the
Liquidity Agreement, the Aggregate Liquidity Commitment in effect immediately
prior to such termination).
"Properties" shall mean the properties owned and operated by TRS
----------
and its subsidiaries.
"Qualifying Rentals" shall mean, with respect to any Vehicle, the
------------------
bona fide rental of such Vehicle by any person, other than an Affiliate of TRS
or any Subsidiary, for a period of no more than 90 days, provided that such
initial period of no more than 90 days may be extended or renewed for successive
periods of no more than 90 days if (a) the aggregate length of such initial
rental period and all extensions and renewals thereof does not exceed one year,
(b) there is no significant penalty or purchase obligation for any failure to
extend or renew such rental and (c) such Vehicle is not identified with such
person's name, color or logo (other than any legally required placard indicating
the identity of such person).
"Questor" means collectively Questor Partners Fund, L.P., a
-------
Delaware limited partnership and Questor Side-by-Side Partners, L.P., a Delaware
limited partnership.
"Rating Agencies" means, collectively, S&P, Moody's and any other
---------------
nationally recognized rating agency approved by the Liquidity Agent, Finco and
the Majority Banks.
"Rating Downgrade" means, with respect to any Person, that the
----------------
rating assigned to such Person's short-term unsecured debt securities or
short-term deposits by any Rating Agency shall be (a) withdrawn, (b) lower than
the rating then assigned by such Rating Agency to the Commercial Paper Notes as
of the Closing Date, or (c) lower than A-2 by S&P or P-2 by Moody's.
"Reference Lenders" means Citibank, N.A. and The Chase Manhattan
-----------------
Bank.
"Refunding Advance" is defined in Section 3.01(b) of the
-----------------
Liquidity Agreement.
"Refunding Note" means, with respect to any Liquidity Lender, a
--------------
promissory note issued to such Liquidity Lender by Finco, substantially in the
form of Exhibit B to the Liquidity Agreement, evidencing the Refunding Advances
by such Liquidity Lender to Finco, and all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.
"Register" is defined in Section 11.11 of the Liquidity
--------
Agreement.
-24-
<PAGE>
"Regulation D" is defined in Section 4.02(a)(ii) of the Liquidity
------------
Agreement.
"Regulatory Change" means any Applicable Law, interpretation,
-----------------
directive, request or guideline (whether or not having the force of law), or any
change therein or in the administration or enforcement hereof, that becomes
effective or is implemented or first required or expected to be complied with
after the Closing Date, whether the same is the result of an enactment by a
government or any agency or political subdivision thereof, a determination of a
court, regulatory authority or monetary authority, or any other action.
"Related Documents" means, collectively, the Lease, the Liquidity
-----------------
Documents, the Loan Agreement, the Collateral Agreement, the Depositary
Agreement, the Dealer Agreement, the Loan Note, the Custody Agreement, the Fee
Letter and the Vehicle Title Nominee Agreement.
"Related Month" means, with respect to any Payment Date or other
-------------
date, the most recently ended calendar month and, with respect to any date on
which there is a payment or a prepayment of principal under the Loan Agreement,
at maturity or otherwise, the calendar month during which such payment or
prepayment of principal occurs; provided, however, that the initial Related
-------- -------
Month shall be the period from and including the Closing Date to and including
the last day of the calendar month in which such closing occurs.
"Release" shall mean any spilling, leaking, pumping, pouring,
-------
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing, depositing, dispersing, emanating or migrating of any Hazardous
Material in, into, onto or through the environment.
"Remedial Action" shall mean (a) "remedial action" as such term
---------------
is defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions
required by any Governmental Authority or voluntarily undertaken to: (i) clean
up, remove, treat, abate or in any other way address any Hazardous Material in
the environment; (ii) prevent the Release or threat of Release, or minimize the
further Release of any Hazardous Material so it does not migrate or endanger or
threaten to endanger public health, welfare or the environment; or (iii) perform
studies and investigations in connection with, or as a precondition to, (i) or
(ii) above.
"Rent" is defined in paragraph 9 of the Lease Annex.
---- -----------
"Repayment Distribution" shall mean the distribution by Leasco to
----------------------
TRS on the Closing Date of the proceeds from Loans made by Finco to Leasco for
the purpose of retiring all existing obligations with respect to the Fleet.
"Representative Model" means the truck model which represents at
--------------------
least 50% of the applicable Truck Category; provided that if no truck model
-------------
represents at least 50% of the applicable Truck Category, then the
Representative Model for such Truck Category shall be determined by averaging
the Resale Value for the Truck Models representing at least 50% of such Truck
Category.
"Required Enhancement Percentage" means the sum of (a) 19.5% (or
-------------------------------
such other percentage as shall then be required by the Rating Agencies to
maintain the then current rating (but not less than A-1 by S&P and not less than
Prime-1 by Moody's) on the Commercial Paper Notes); (b) the Disposition
Shortfall Percentage as of the most recent Determination Date and (c) the Market
Adjustment Percentage as of the most recent Determination Date.
-25-
<PAGE>
"Requirements of Law" means, with respect to any Person or any of
-------------------
its property, the certificate of incorporation or articles of association and
by-laws, certificate of limited partnership, limited partnership agreement or
other organizational or governing documents of such Person, and any law,
ordinance, treaty, rule or regulation, requirement or determination of any
arbitrator or Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of its
property is subject, whether Federal, state or local (including usury laws, the
Federal Truth in Lending Act and retail installment sales acts).
"Resale Value Table" means, with respect to each Truck Category,
------------------
as of any date of determination, the table constructed by plotting the Resale
Value of the Representative Model of such Truck Category at all applicable
periods from zero to 120 months.
"Resale Value" means, with respect to any Vehicle, as of any date
------------
of determination, the product of (i) the Adjustment Factor multiplied by (ii)
the value determined by reference to the Third-Party Data Source.
"Responsible Officer" of any corporation means, with respect to
-------------------
any of the Related Documents, any executive officer or Financial Officer of such
corporation and any other officer or similar official thereof responsible for
the administration of the obligations of such corporation in respect of such
Related Document.
"Revolving Advance" is defined in Section 3.01(a) of the
-----------------
Liquidity Agreement.
"Revolving Advance Commitment Termination Date" means the earlier
---------------------------------------------
to occur of
(a) the Liquidity Commitment Termination Date; and
(b) the Amortization Commencement Date.
"Revolving Note" means, with respect to any Liquidity Lender, a
--------------
promissory note issued to such Liquidity Lender by Finco, substantially in the
form of Exhibit A to the Liquidity Agreement, evidencing the Revolving Advances
by such Liquidity Lender to Finco, and all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.
"S&P" means Standard & Poor's Ratings Group, a division of the
---
McGraw-Hill Companies, Inc.
"Scheduled Amortization Event" means any Amortization Event set
----------------------------
forth in Section 9.01(1) of the Liquidity Agreement.
"Scheduled Liquidity Commitment Termination Date" means, for any
-----------------------------------------------
Liquidity Lender, the day which is 364 days after the Closing Date, as such date
may be extended from time to time pursuant to Section 3.05 of the Liquidity
Agreement.
"Scheduled Maturity Date" means,
-----------------------
(a) except in the case of any Commitment Termination Date
Liquidity Advance, with respect to any Liquidity Advances, the last day of the
relevant Interest Period, but in any event not later than the date 18 months
after the applicable Scheduled Liquidity Commitment Termination Date;
-26-
<PAGE>
provided, however, that after the occurrence of an Amortization Event, the
- -------- -------
Scheduled Maturity Date shall mean the date 18 months after the Amortization
Commencement Date, if any; and
(b) with respect to any Commitment Termination Date Liquidity
Advance the date 18 months after the date on which such advance is made;
provided, however, that after the occurrence of an Amortization Event, the
Scheduled Maturity Date shall mean the date 18 months after the Amortization
Commencement Date, if any.
"Secured Parties" is defined in Section 4.01(b) of the
---------------
Collateral Agreement.
"Servicer" means TRS, in its capacity as servicer of Vehicles.
--------
"Specified Period" is defined in Section 5.10 of the Liquidity
----------------
Agreement.
"Subordinated Notes" means the 10% Senior Subordinated Notes due
------------------
2006 of TRS in the original aggregate principal amount of 175,000,000.
"Subsequently Acquired Vehicles" means all trucks acquired by the
------------------------------
Lessor after the Closing Date pursuant to a Vehicle Order delivered to the
Lessor by the Lessee.
"Subsidiary" means, with respect to any Person (herein referred
----------
to as the "parent"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held by the parent or (b) that is, at the
time any determination is made, otherwise controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.
"Taxes" is defined in Section 5.06 of the Liquidity Agreement.
-----
"Term" is defined in Section 3.2 of the Lease.
---- -----------
"Termination Advance Account" is defined in Section 5.01(a) of
---------------------------
the Collateral Agreement.
"Third-Party Data Source" means the Truck Blue Book Official Used
-----------------------
Truck Valuations published by National Reports, Inc.; provided, however, that if
-------- -------
such publication ceases to be published, the Third-Party Data Source will be an
independent third-party selected by the Agent and approved by each Rating
Agency.
"Title Documentation" is defined in Section 12.3 of the Lease.
-------------------
"Transactions" is defined in Section 7.02 of the Liquidity
------------
Agreement.
"TRS" means Ryder TRS, Inc., a Delaware corporation.
---
"Truck Category" means, as applicable, 10-foot, 15-foot, 20-foot
--------------
gas, 20-foot diesel, 24-foot gas, 24-foot diesel and any other category of
Vehicles owned by Lessor from time to time.
"type" means, relative to any Liquidity Advance under the
----
Liquidity Agreement the portion thereof, if any, being maintained as a Base Rate
Advance or a LIBOR Advance.
-27-
<PAGE>
"UCC" means the Uniform Commercial Code as in effect from time to
---
time in the specified jurisdiction.
"United States" or "U.S." means the United States of America, its
------------- ----
fifty States and the District of Columbia.
"Upfront Fee" is defined in Section 4.05(b) of the Liquidity
-----------
Agreement.
"Vehicle" means each Initial Vehicle and each Subsequently
-------
Acquired Vehicle owned by Leasco as of the Closing Date or purchased by Leasco
after the Closing Date.
"Vehicle Acquisition Schedule" is defined in Section 2.2 of the
---------------------------- -----------
Lease.
"Vehicle Lease Commencement Date" is defined in Section 3.1 of
------------------------------- -----------
the Lease.
"Vehicle Lease Expiration Date", with respect to each Vehicle,
-----------------------------
means the earliest of (i) the Disposition Date for such Vehicle, (ii) if such
Vehicle becomes a Casualty, the date funds in the amount of the Net Book Value
thereof are received by the Lessor from the Lessee in accordance with the Lease,
and (iii) the last day of the Maximum Vehicle Lease Term.
"Vehicle Order" is defined in Section 2.2 of the Lease.
-------------
"Vehicle Perfection and Documentation Requirements" means, with
-------------------------------------------------
respect to a Vehicle, submission of an application for the issuance of a
Certificate of Title for such Vehicle with the department of registry of motor
vehicles of the applicable state in which such Vehicle is to be registered,
which such application shall reflect the following: Leasco, as the registered
owner and the Agent as the first lienholder.
"Vehicle Term" is defined in Section 3.1 of the Lease.
------------
"Vehicle Title Nominee Agreement" means the Vehicle Title Nominee
-------------------------------
Agreement, dated as of October 17, 1996, between Old Ryder and Leasco, as
amended.
"VIN" means vehicle identification number.
---
"Withdrawal Liability" means liability to a Multiemployer Plan as
--------------------
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in part I of Subtitle E of Title IV of ERISA.
"written" or "in writing" means any form of written
------- ----------
communication, including by means of telex, telecopier device, telegraph or
cable.
-28-
<PAGE>
Exhibit 10.3
EXECUTION COPY
===============================================================================
COLLATERAL AGREEMENT
among
FCTR, INC.,
RCTR, INC.,
CITIBANK, N.A.,
as Liquidity Agent and Depositary,
CITICORP USA, INC.,
as Agent,
and
CITICORP SECURITIES, INC.
and
LEHMAN BROTHERS INC.,
as Dealers
Dated as of August 7, 1997
===============================================================================
<PAGE>
TABLE OF CONTENTS Page
----------------- ----
ARTICLE I. Definitions 2
ARTICLE II. Obligations Collateralized 2
SECTION 2.1. Obligations Collateralized Hereby..........................2
ARTICLE III. Agents; Representations, Warranties and Covenants 3
SECTION 3.1. Finco and Other Agents....................................3
SECTION 3.2. Representations and Warranties of Finco...................4
SECTION 3.3. Additional Representations, Warranties and Covenants of
Finco and of Leasco.....................................4
SECTION 3.4. Representations and Warranties of the Agent................6
ARTICLE IV. Assignment 6
SECTION 4.1. Assignment.................................................6
SECTION 4.2. Application of Collateral and Deposited Funds..............7
SECTION 4.3. Performance of Agreement...................................8
SECTION 4.4. Amendments; Waivers; Declaration of Default................9
SECTION 4.5. Notice of Default..........................................9
ARTICLE V. Collateral Account, Termination Advance Account and Cash
Reserve Account 10
SECTION 5.1. Establishment of Collateral Account, etc..................10
SECTION 5.2. Assignment of Accounts, etc...............................11
SECTION 5.3. Application of Deposited Funds and Collateral.............14
SECTION 5.4. Eligible Investments......................................15
SECTION 5.5. [Reserved]................................................15
SECTION 5.6. Liquidity Demand; Commitment Termination Demand;
Reductions..............................................15
ARTICLE VI. Default 16
SECTION 6.1. Rights of the Agent upon Amortization Event...............16
SECTION 6.2. Special Provisions Concerning Remedies and Sale of
Collateral..............................................17
ARTICLE VII. The Agent, The Liquidity Lenders and the Holders of
Commercial Paper Notes 18
SECTION 7.1. Appointment and Powers of Agent...........................18
SECTION 7.2. Agents and Employees of the Agent.........................19
SECTION 7.3. Waiver of Jury Trial......................................21
SECTION 7.4. Successor Agent...........................................21
SECTION 7.5. Qualifications of Agent...................................22
SECTION 7.6. Instructions of the Majority Banks and Other Parties......22
(i)
<PAGE>
ARTICLE VIII. Amendments, Modifications, Waivers and Consents 22
SECTION 8.1. Execution of Amendments, etc..............................22
ARTICLE IX. Miscellaneous 23
SECTION 9.1. Further Assurances.......................................23
SECTION 9.2. No Waiver, Cumulative Remedies...........................23
SECTION 9.3. Notice of Amendments; Waivers............................23
SECTION 9.4. Notices, etc.............................................23
SECTION 9.5. Fee; Costs and Expenses, etc.............................25
SECTION 9.6. Agent Appointed Attorney-in-Fact.........................26
SECTION 9.7. Termination; Collateral..................................26
SECTION 9.8. Governing Law; Binding Character; Assignment.............27
SECTION 9.9. Severability of Provisions...............................27
SECTION 9.10. No Bankruptcy Petition Against Finco or Leasco...........27
SECTION 9.11. No Recourse..............................................27
SECTION 9.12. Confidentiality..........................................27
SECTION 9.13. Headings.................................................28
SECTION 9.14. Execution in Counterparts................................28
SECTION 9.15. Limited Recourse to Finco and Leasco.....................28
SECTION 9.16. Waiver of Set-Off With Respect to Finco and Leasco.......28
(ii)
<PAGE>
THIS COLLATERAL AGREEMENT (referred to herein as this
"Agreement"), dated as of August 7, 1997, is entered into by and
among FCTR, INC., a Delaware corporation ("Finco"), RCTR, INC., a
Delaware corporation ("Leasco"), CITIBANK, N.A., as liquidity
agent (the "Liquidity Agent") for the banks party to the
Liquidity Agreement (the "Liquidity Lenders") and as depositary
(the "Depositary") under the Depositary Agreement, acting on its
own behalf and on behalf of the Holders of Commercial Paper
Notes, CITICORP USA, INC., as collateral agent (the "Agent") for
itself and the Liquidity Lenders, the Liquidity Agent, the
Depositary on behalf of the Holders of Commercial Paper Notes,
CITICORP SECURITIES, INC., and LEHMAN BROTHERS INC. (Citicorp
Securities, Inc. and Lehman Brothers, Inc., together with any
other dealers for Commercial Paper Notes engaged by Finco from
time to time that agree to become parties to this Agreement, the
"Dealers").
W I T N E S S E T H :
WHEREAS Finco proposes to issue and sell its promissory notes (the
"Commercial Paper Notes") in the commercial paper market and proposes to obtain
the Liquidity Commitments (such capitalized term, together with all other
capitalized terms used herein, shall have the meaning assigned thereto in
Article I) of the Liquidity Lenders to make Liquidity Advances to Finco;
WHEREAS contemporaneously with the execution and delivery of this
Agreement, Finco and Leasco are entering into the Loan Agreement providing for
the making of Loans by Finco to Leasco, for the purpose of making the Repayment
Distribution and purchasing and financing Vehicles;
WHEREAS contemporaneously with the execution and delivery of this
Agreement, Leasco and TRS are entering into the Lease pursuant to which Leasco
will continue to lease to TRS Vehicles owned by Leasco;
WHEREAS contemporaneously with the execution and delivery of this
Agreement, Finco, the Liquidity Agent and the Liquidity Lenders are entering
into the Liquidity Agreement dated as of August 7, 1997 (as it may be amended or
otherwise modified from time to time, the "Liquidity Agreement") among Finco,
certain financial institutions party thereto and Citibank, N.A., as Liquidity
Agent, providing for, among other things, the Liquidity Commitments of the
Liquidity Lenders to make Liquidity Advances on behalf of Finco from time to
time;
WHEREAS contemporaneously with the execution and delivery of this
Agreement, Finco and the Depositary are entering into the Depositary Agreement
providing for the issuance of Commercial Paper Notes; and
WHEREAS Finco is entering into this Agreement with Leasco, the
Liquidity Agent, the Depositary, the Agent, and the Dealers for the purpose of,
among other things, providing for the repayment or payment of all amounts at any
time and from time to time owing by Finco to the Liquidity Lenders or the
Liquidity Agent under or in connection with the Liquidity Agreement or this
Agreement and all amounts owing at any time and from time to time by Finco to
the Holders of the Commercial Paper Notes or the Depositary or owing to the
Agent hereunder or owing to the Dealers under the Dealer Agreement.
<PAGE>
NOW, THEREFORE, in consideration of the premises and agreements herein
contained, each of Finco, Leasco, the Liquidity Agent, the Depositary, the Agent
and the Dealers agrees as follows:
ARTICLE I.
Definitions
-----------
As used in this Agreement and unless the context requires a different
meaning, capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the Definitions List, dated as of the Closing Date
(the "Definitions List"), attached as Annex A to the Liquidity Agreement, as
such Definitions List may be amended or modified in accordance with the terms
thereof.
ARTICLE II.
Obligations Collateralized
--------------------------
SECTION 2.1. Obligations Collateralized Hereby. This Agreement is
---------------------------------
made to provide for repayment and payment of the Indebtedness and liabilities of
Finco set forth in clauses first through ninth below (such Indebtedness and
liabilities being herein called the "Finco Obligations"). Upon the occurrence
of an Amortization Event, and during the continuance of an Amortization Period,
(a) until the satisfaction of all amounts due pursuant to clause (b) of this
Section 2.01, Deposited Funds held in the Cash Reserve Account shall be used
solely to pay interest due on Liquidity Advances and (b) all other Deposited
Funds shall be applied to pay the Finco Obligations in the order of priority
indicated below:
first, (i) the repayment of all amounts advanced or expended by the
-----
Agent, in its capacity as Agent, for the account of Finco hereunder and the
payment of all out-of-pocket costs and expenses at any time and from time
to time payable hereunder to the Agent, in its capacity as such, in
connection with the administration or enforcement of this Agreement or any
Related Document (including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel employed by the Agent in connection
therewith) and the payment of all indemnities at any time and from time to
time due by Finco hereunder to the Agent in its capacity as such up to an
aggregate amount equal to $50,000 per annum and (ii) after the occurrence
of a Liquidation Event of Default, the payment of any out of pocket
expenses due to compensate the Liquidation Servicer for services rendered
in connection with a liquidation of Vehicles;
second, in accordance with Section 5.02(g) of this Agreement, the
------
payment of all Indebtedness, at any time and from time to time, of Finco
on the Outstanding Commercial Paper Notes (whether or not then due) issued
pursuant to and in accordance with the Depositary Agreement;
third, the payment of all (a) operating and ordinary course expenses
-----
of Finco up to an aggregate amount equal to $250,000 per calendar year and
(b) fees and expenses at any time and from time to time due to the
Depositary pursuant to Section 8(a) of the Depositary Agreement;
2
<PAGE>
fourth, the payment of all amounts at any time and from time to time
------
due to the Liquidity Agent as notified to the Agent pursuant to Section
4.05 of the Liquidity Agreement;
fifth, the payment, pro rata, of all amounts payable in respect of
-----
interest on Indebtedness and, after such payments with respect to interest
have been made, the payment of all principal on such Indebtedness
(including Commitment Termination Date Liquidity Advances), in each case,
at any time and from time to time, due (in the case of a Commitment
Termination Date Liquidity Advance, such Advance will be deemed to be due
for purposes of this clause fifth on the date such Advance is made) from
------------
Finco to the Liquidity Lenders in connection with the Liquidity Advances
made pursuant to the Liquidity Agreement;
sixth, the payment, pro rata, of all Indebtedness (including, but not
-----
limited to fees, reimbursements, funding indemnities, taxes and increased
costs, but excluding amounts referenced in clause eighth below), at any
-------------
time and from time to time, due to the Liquidity Lenders or the Liquidity
Agent under or in respect of the Liquidity Agreement or under or in respect
of any indemnity obligations at any time and from time to time due from
Finco hereunder to the Liquidity Lenders and the Liquidity Agent, it being
understood that amounts payable under this clause sixth shall relate
------------
exclusively to costs and expenses incurred in or in connection with the
procurement and handling of funds and the making of such funds available to
or for the account or benefit of Finco and shall not include amounts
payable in connection with general indemnity claims relating to the use by
Finco of the proceeds of such financial accommodations (other than, in the
event such actions give rise to breakage costs, any action in the nature of
a prepayment by Finco) or actions taken or omitted to be taken by Finco
under the Related Documents and not directly related to the procurement of
funds, all of which shall be covered by clause eighth below;
-------------
seventh, the repayment of reasonable amounts owing to the Agent
-------
referred to in clause first above in excess of $50,000 per calendar year;
------------
eighth, the repayment, pro rata, of all reasonable amounts advanced or
------
expended by any Liquidity Lender under this Agreement or under the
Liquidity Agreement, as the case may be, and any indemnification
obligations, other amounts and reasonable out-of-pocket costs and expenses
due from Finco to any party under or in connection with the Liquidity
Agreement, the Depositary Agreement, the Dealer Agreement or any other
Related Document, whether in respect of indemnities thereunder or
otherwise; and
ninth, the payment of all other expenses of Finco referred to in
-----
clause third above in excess of $250,000 per annum.
------------
ARTICLE III.
Agents; Representations, Warranties and Covenants
-------------------------------------------------
SECTION 3.1. Finco and Other Agents. (a) With the delivery of this
----------------------
Agreement, Finco is furnishing to the Agent, and from time to time thereafter
may furnish to the Agent, a certificate (the "Finco Incumbency Certificate")
certifying the incumbency and specimen signatures of officers, employees, agents
or representatives of Finco (the "Finco Agents") authorized to act, and to give
instructions and notices, on behalf of Finco hereunder. Until the Agent
receives a subsequent Finco Incumbency Certificate, the Agent shall be entitled
to rely on the last such Finco Incumbency Certificate delivered to it for
purposes of determining the authorized Finco Agents.
3
<PAGE>
(b) With the delivery of this Collateral Agreement, Finco shall cause
the Depositary to furnish to the Agent, and from time to time thereafter may
cause the Depositary to furnish to the Agent, a certificate (the "Depositary
Incumbency Certificate") certifying as to the incumbency and specimen signatures
of officers of the Depositary (the "Depositary Agents") authorized to act, and
to give instructions and notices, on behalf of the Depositary hereunder. Until
the Agent receives a subsequent Depositary Incumbency Certificate, the Agent
shall be entitled to rely on the last such Depositary Incumbency Certificate
delivered to it for purposes of determining the authorized Depositary Agents.
(c) With the delivery of this Collateral Agreement and from time to
time thereafter, the Liquidity Agent shall furnish to the Agent a certificate
(the "Liquidity Agent Incumbency Certificate") certifying as to the incumbency
and specimen signatures of officers of the Liquidity Agent (the "L.A. Agent")
authorized to act, and to give instructions and notices, on behalf of the
Liquidity Agent hereunder. Until the Agent receives a subsequent Liquidity
Agent Incumbency Certificate, the Agent shall be entitled to rely on the last
such Liquidity Agent Incumbency Certificate delivered to it for purposes of
determining the authorized L.A. Agents.
(d) With the delivery of this Agreement, Leasco is furnishing to the
Agent, and from time to time thereafter may furnish to the Agent, a certificate
(the "Leasco Incumbency Certificate") certifying the incumbency and specimen
signatures of officers, employees, agents or representatives of Leasco (the
"Leasco Agents") authorized to act, and to give instructions and notices, on
behalf of Leasco hereunder. Until the Agent receives a subsequent Leasco
Incumbency Certificate, the Agent shall be entitled to rely on the last such
Leasco Incumbency Certificate delivered to it for purposes of determining the
authorized Leasco Agents.
SECTION 3.2. Representations and Warranties of Finco. (a) Finco
-----------------------------------------
reaffirms and repeats its representations and warranties contained in the
Liquidity Agreement and agrees that the Secured Parties may rely on such
representations and warranties as though set forth herein in full.
(b) Leasco reaffirms and repeats its representations and warranties
contained in the Loan Agreement and agrees that the Secured Parties may rely on
such representations and warranties as though set forth herein in full.
SECTION 3.3. Additional Representations, Warranties and Covenants of
-------------------------------------------------------
Finco and of Leasco. Each of Finco and Leasco hereby makes the following
- -------------------
representations, warranties and covenants to the Agent, the Depositary, the
Liquidity Agent, the Holders of Commercial Paper Notes, the Liquidity Lenders
and the Dealers:
(a) Each of Finco and Leasco have duly and effectively taken all
action necessary (including the filing of UCC-1 financing statements, the
assignment of certain rights under the Vehicle Title Nominee Agreement and the
notation on the Vehicle Certificates of Title of the Agent's lien or the
assignment of an existing lien) to protect and perfect the Agent's security
interest on behalf of the Secured Parties in the Assigned Collateral and the
Loan Collateral, as the case may be, now in existence and hereafter acquired or
created, and the Deposited Funds.
(b) No security agreement, financing statement, equivalent security or
lien instrument or continuation statement listing Finco or Leasco as debtor
covering all or any part of the Assigned Collateral and the Loan Collateral,
respectively, is on file or of record in any jurisdiction, except such as may
have been filed, recorded or made by Finco or Leasco in favor of the Agent for
the benefit of the Secured Parties pursuant to this Agreement.
4
<PAGE>
(c) This Agreement creates a valid and continuing Lien on the Assigned
Collateral and the Loan Collateral in favor of the Agent on behalf of the
Secured Parties, which Lien is prior to all other Liens, except for Permitted
Liens, and is enforceable as such as against creditors of and purchasers from
Finco and Leasco, respectively. All action necessary or desirable to protect
and perfect such prior security interest has been duly taken.
(d) In the case of (i) Finco, its principal place of business, chief
executive office and place where its records concerning the Assigned Collateral
are kept is 8669 N.W. 36th Street, Miami, Florida, 33166 and (ii) Leasco, its
principal place of business, chief executive office, the place where its records
concerning the Loan Collateral are kept is 8669 N.W. 36th Street, Miami,
Florida, 33166. Neither Finco nor Leasco will change its respective name,
principal place of business or chief executive office or remove such records
without 60 days prior written notice to the Agent. The parties hereto
acknowledge that, as of the date hereof, each of Finco and Leasco plans to
change the location of its chief executive office, principal place of business
and place where its records concerning the Assigned Collateral and the Loan
Collateral, respectively, are kept to 1560 Broadway, Suite 1800, Denver,
Colorado, 80202.
(e) At any time and from time to time, upon the written request of the
Agent, and at the sole expense of Finco or Leasco, Finco or Leasco, as the case
may be, will promptly and duly execute and deliver any and all such further
instruments and documents and take such further action as the Agent may
reasonably deem necessary in obtaining the full benefits of this Agreement and
of the rights and powers herein granted, including the filing of any financing
or continuation statements under the UCC in effect in any jurisdiction with
respect to the liens and security interests granted hereby. Finco and Leasco
also hereby authorize the Agent to file any such financing or continuation
statement without the signature of Finco or Leasco, as the case may be, to the
extent permitted by applicable law. If any amount payable under or in
connection with any of the Assigned Collateral or Loan Collateral, as the case
may be, shall be or become evidenced by any promissory note, chattel paper or
other instrument, such note, chattel paper or instrument shall be deemed to be
held in trust and immediately pledged to the Agent hereunder, and shall, subject
to the rights of any Person in whose favor a prior Lien has been perfected, be
duly endorsed in a manner satisfactory to the Agent and delivered to the Agent
promptly.
(f) Each of Finco and Leasco will warrant and defend the Agent's
right, title and interest in and to the Assigned Collateral and the Loan
Collateral, respectively, and the income, distributions and proceeds thereof,
for the benefit of the Secured Parties against the claims and demands of all
Persons whomsoever.
(g) All authorizations in this Agreement for the Agent to endorse
checks, instruments and securities and to execute financing statements,
continuation statements, security agreements and other instruments with respect
to the Assigned Collateral and the Loan Collateral are powers coupled with an
interest and are irrevocable.
(h) Each of Finco and Leasco (i) will use its respective best efforts
to appoint a Custodian prior to February 9, 1998 and execute the Custody
Agreement, together with such Custodian and TRS prior to such date, (ii) agree
that if at any time prior to February 9, 1998, the Enhancement Test Percentage
(as calculated using a Required Enhancement Percentage of 25.00%,
notwithstanding the definition in Annex A to the Liquidity Agreement) is not
equal to or greater than 25.00%, the Agent shall, in its sole discretion and at
the expense of Finco, appoint a Custodian and Finco, Leasco, TRS, the Agent and
such Custodian shall execute the Custody Agreement as soon as practicable under
the circumstances and (iii) agree that during the period from the date hereof
until the
5
<PAGE>
earlier of (A) February 9, 1998 and (B) the date of the execution of the Custody
Agreement, Leasco shall continue to use Old Ryder as its agent to perform
certain maintenance and administrative functions with respect to the
Certificates of Title in accordance with the business practices and subject to
the controls currently observed under such cooperative arrangement.
SECTION 3.4. Representations and Warranties of the Agent. The Agent
-------------------------------------------
hereby represents, warrants and convenants to the Secured Parties that this
Agreement has duly authorized, executed and delivered by the Agent and
consitutes a legal, valid and binding obligation of the Agent, enforceable
against the Agent in accordance with its terms, except as such enforceability
may be subject to bankruptcy or insolvency laws, creditors' rights generally and
general principles of equity.
ARTICLE IV
Assignment
----------
SECTION 4.1. Assignment. (a) In order to secure and provide for
----------
the payment and repayment of the Loans by Leasco and the satisfaction of all
obligations of Leasco under the Loan Agreement, and in consideration of Finco
making the Loans to Leasco, Leasco hereby pledges, hypothecates, assigns,
transfers and delivers to the Agent for the benefit of Finco, and hereby grants
to the Agent for the benefit of Finco, a continuing, first priority security
interest in, all of the following, whether now owned or hereafter acquired: (i)
all Vehicles owned by Leasco, and all Certificates of Title with respect
thereto; (ii) all of Leasco's right, title and interest in and to the Vehicle
Title Nominee Agreement; (iii) all payments under insurance policies (whether or
not the Agent is named as the loss payee thereof) or any warranty payable by
reason of loss or damage to, or otherwise with respect to, any of the Vehicles;
(iv) all of Leasco's rights under the Lease and all payments of rent,
indemnities, damages, expenses and other amounts under or with respect thereto
("Lease Payments"), (v) the Lease File and (vi) all products and proceeds of all
of the foregoing (all of the foregoing being referred to as the "Loan
Collateral").
(b) In order to secure and provide for the payment and repayment of
the Finco Obligations, Finco hereby pledges, assigns, conveys, delivers,
transfers and sets over to the Agent, for the ratable benefit of the Agent, the
Liquidity Lenders, the Liquidity Agent, the Depositary, the Dealers and the
Holders of the Commercial Paper Notes (the foregoing being referred to as the
"Secured Parties") as their respective interests appear, and hereby grants to
the Agent, for the benefit of the Secured Parties, a security interest in all of
Finco's right, title and interest in and to all assets, property and interests
in property (other than as specified below) whether now owned by Finco or
hereafter acquired or created by Finco (all of the foregoing being referred to
as the "Assigned Collateral" and, together with the Loan Collateral, the
"Collateral"), including all of the following property and interests in
property:
(i) the Finco Agreements, other than the Liquidity Agreement, including
all moneys due and to become due to Finco from Leasco under or in connection
with such Finco Agreements, whether payable as principal, interest, fees,
expenses, costs, indemnities, insurance recoveries, damages for the breach of
any of such Finco Agreements or otherwise, and all rights, remedies, powers,
privileges and claims of Finco against any other party under or with respect
to such Finco Agreements (whether arising pursuant to the terms of such Finco
Agreements or otherwise available to Finco at law or in equity), the right to
enforce any of such Finco Agreements as provided herein and to give or
withhold any and all consents,
6
<PAGE>
requests, notices, directions, approvals, extensions or waivers under or with
respect to such Finco Agreements or the obligations of any party thereunder;
(ii) all right, title and interest of Finco in, to and under the Loan
Collateral and all rights, remedies, powers, privileges and claims of Finco
against any other party under or with respect to such Loan Collateral;
(iii) all additional property that may from time to time hereafter be
subjected to the grant and pledge hereof by Finco or by anyone on its
behalf;
(iv) all property assigned to the Agent pursuant to Section 5.02 hereof,
including the Accounts and the Deposited Funds; and
(v) all proceeds of any and all of the foregoing including, without
limitation, payments under insurance (whether or not the Agent is the loss
payee thereof) or Vehicle warranties and cash.
Notwithstanding the foregoing, upon the disbursement by the Agent of any amount
distributable to Finco in accordance with the terms of Section 2.01 or 5.02(b)
of this Agreement for the payment of Finco's operating and ordinary course
expenses or to Leasco pursuant to clause (ix) of Section 5.02(b), the security
interest in such amount granted in favor of the Agent shall be released.
(c) Notwithstanding the assignment and security interest so granted to
the Agent, the assignment of the Assigned Collateral to the Agent shall not (i)
relieve Finco from the performance of any term, covenant, condition or agreement
on Finco's part to be performed or observed under or in connection with any of
the Finco Agreements or from any liability to Leasco or (ii) impose any
obligation on any of the Secured Parties to perform or observe any such term,
covenant, condition or agreement on Finco's part to be so performed or observed
or impose any liability on any of the Secured Parties for any act or omission on
the part of Finco or from any breach of any representation or warranty on the
part of Finco. Finco hereby agrees to indemnify and hold harmless each Secured
Party from and against any and all losses, liabilities (including liabilities
for penalties), claims, demands, actions, suits, judgments, reasonable out-of-
pocket costs and expenses arising out of or resulting from the assignment
granted hereby by virtue of any act or omission on the part of Finco including,
without limitation, the out-of-pocket costs, expenses, and disbursements
(including reasonable attorneys' fees and expenses) incurred by any of the
Secured Parties in enforcing this Agreement or preserving any of their
respective rights to, or realizing upon, any of the Assigned Collateral.
(d) Notwithstanding the assignment of, and security interest granted
in, all of Leasco's right, title and interest in and to the Vehicles to the
Agent for the benefit of Finco and, in turn, of all Finco's right, title and
interest in and to the Vehicles to the Agent for the benefit of the Secured
Parties, the Agent shall release such security interest of the Secured Parties
and of Finco in and to Vehicles in connection with any disposition of such
Vehicles (i) by TRS, as Leasco's gent, in accordance with the terms of the Lease
or (ii) by Leasco in accordance with the terms of the Loan Agreement.
SECTION 4.2 Application of Collateral and Deposited Funds. Finco
---------------------------------------------
and Leasco hereby acknowledge and agree that, until this Agreement is
terminated, Finco and Leasco shall, and the Agent is authorized to, cause (i)
all moneys, instruments, cash and other proceeds due and to become due to Finco,
Leasco or the Agent under or in connection with this Agreement to be paid
7
<PAGE>
directly to the Agent for deposit into the Collateral Account; (ii) amounts
representing the proceeds from sales or other dispositions of Vehicles by Leasco
to be deposited by Leasco within two Business Days of its receipt thereof into
the Collateral Account; (iii) all Loan payments made by Leasco under the Loan
Agreement to be made directly to the Agent for deposit into the Collateral
Account (and, in each case, Finco represents to the Secured Parties that it has
instructed Leasco to so remit such amounts); and (iv) all Lease Payments made by
TRS under the Lease to be made directly to the Agent for deposit into the
Collateral Account (and Leasco represents to the Secured Parties that it has
instructed TRS to so remit such amounts). Finco and Leasco agree that if any
such moneys, instruments, cash or other proceeds shall be received by Finco or
Leasco, respectively, in an account other than the Collateral Account or in any
other manner, such moneys, instruments, cash and other proceeds will not be
commingled by Finco or Leasco, respectively, with any of its other funds or
property, if any, but will be held separate and apart therefrom and shall be
held in trust by Finco or Leasco, respectively, for, and immediately paid over
to, but in any event within two Business Days from receipt, the Agent, with any
necessary endorsement. Provided that the Collateral Account or any funds on
deposit in, or otherwise to the credit of, the Collateral Account are not then
subject to any writ, order, judgment, warrant of attachment, execution or
similar process, all moneys, instruments, cash and other proceeds received by
the Agent pursuant to this Article IV shall be immediately deposited in the
Collateral Account, and, unless and until an Amortization Event or Loan Event of
Default shall have occurred and be continuing, shall be applied as provided in
Section 5.02(b) hereof. All moneys, instruments, cash and other proceeds held
or deposited in the Collateral Account after the occurrence and during the
continuance of an Amortization Event or during an Amortization Period, and all
moneys, instruments, cash and other proceeds received by the Agent pursuant to
this Article IV while the Collateral Account or any funds on deposit in, or
otherwise to the credit of, the Collateral Account subject to any writ, order,
judgment, warrant of attachment, execution or similar process, shall be applied
by the Agent (to the extent permitted by law) to the payment or repayment in
full of all outstanding Finco Obligations, in the appropriate order of priority
specified in Section 2.01 of this Agreement.
SECTION 4.3 Performance of Agreement. (a) Upon the occurrence of
--------------------------
an Amortization Event, promptly following a request from the Agent to do so and
at the expense of Finco or Leasco, as the case may be, Finco and Leasco agree to
take all such lawful action and, as permitted under this Agreement as the Agent
may reasonably request, to compel or secure the performance and observance by
each party to any Finco Agreement or any other Related Document of its
obligations to Finco or Leasco, respectively, in accordance with the applicable
terms thereof, and to exercise any and all rights, remedies, powers and
privileges lawfully available to Finco or Leasco to the extent and in the manner
reasonably directed by the Agent, including the transmission of notices of
default and the giving of directions, or the institution of legal or
administrative actions or proceedings to compel or secure performance by such
party, of their respective obligations thereunder; provided, however, that if
-------- -------
Finco or Leasco, as the case may be, shall have failed, within 2 Business Days
of receiving the direction by the Agent, to accomplish such directions of the
Agent, the Agent may, but shall not be obligated to, take such previously
directed action (and any related action as permitted under this Agreement
thereafter determined by the Agent to be appropriate without the need under this
provision or any other provision hereunder to direct each of Finco and Leasco to
take such action) on behalf of Finco or Leasco, as the case may be, and the
Secured Parties. Upon the occurrence of a Liquidation Event of Default, the
Agent may, and upon written direction from the Majority Banks shall, take all
lawful action at the expense of Finco or Leasco, as the case may be (for
reasonable costs and expenses), to exercise any and all rights, remedies, powers
and privileges lawfully available to the Agent to the extent and in the manner
directed by the Majority Banks or, in the absence of such direction, by the
Agent itself, including, without limitation, the transmission of notices of
default and the institution of legal or administrative actions or proceedings to
compel or secure performance by
8
<PAGE>
Leasco, Finco, TRS or any obligor with respect to the Collateral and to exercise
any other remedies available to a secured party.
(b) Subject to Section 4.01(b), Finco and Leasco each further agree
that it will not, without the prior written consent of the Agent, exercise any
right, remedy, power or privilege available to it with respect to any obligor
under the Collateral, take any action to compel or secure performance or
observance by any obligor of its obligations to Finco or Leasco, respectively,
or give any consent, request, notice, direction, approval, extension or waiver
with respect to any obligor.
SECTION 4.4 Amendments; Waivers; Declaration of Default. (a)
---------------------------------------------
Without intending in any manner to derogate from the absolute nature of the
assignment granted to the Agent by this Agreement or the rights of the Agent
hereunder, each of Finco and Leasco agrees that it will not, without giving
prior written notice to the Rating Agencies and the Dealers and without the
prior written consent of the Majority Banks and the Agent (to the extent the
rights or duties of the Agent are affected thereby), amend, modify, supplement,
terminate or surrender, or agree to any amendment, modification, supplement,
termination or surrender of, the terms of any Assigned Collateral or Loan
Collateral, respectively, or waive timely performance or observance by any
obligor of its obligations under the Assigned Collateral or Loan Collateral,
respectively, or any default on the part of any obligor under the Assigned
Collateral or Loan Collateral, respectively; provided, however, that each of
-------- -------
Finco and Leasco may amend the terms of any Assigned Collateral or Loan
Collateral, respectively, if such amendment is effected only to cure any
ambiguity, to correct or supplement any provision therein which may be
inconsistent with any other provision therein or which is otherwise defective,
or to make any other provisions with respect to matters or questions arising
under such Assigned Collateral or Loan Collateral, respectively, which shall not
be inconsistent with the provisions of such Assigned Collateral or Loan
Collateral, respectively; provided, such action pursuant to this clause shall
--------
not adversely affect the interests of a Secured Party in any material respect.
Each of Finco and Leasco will not agree to any such amendment, waiver or other
change, (i) if such amendment, waiver or other change would materially adversely
affect the rights of the Holders of the Commercial Paper Notes or (ii) if the
Agent shall not have received written confirmation of the Rating Agencies that
such amendment, waiver or other change will not result in the downgrading or
withdrawal of the then current ratings of the Commercial Paper Notes by the
Rating Agencies. If any such amendment, modification, supplement or waiver
shall be so consented to by the Agent (to the extent required) and the Majority
Banks (to the extent required), each of Finco and Leasco agrees, promptly
following a request by the Agent or the Liquidity Agent to do so, to execute and
deliver, in its own name and at its own expense, such agreements, instruments,
consents and other documents as any of them may deem necessary or appropriate in
the circumstances. No consent by the Agent or any other Secured Party to any
such amendment, modification, supplement or waiver shall be deemed to be a
determination by the Agent that such amendment, modification, supplement or
waiver will not adversely affect the rights of any Holder of Commercial Paper
Notes.
(b) Upon the occurrence of a Loan Event of Default, the Agent, upon
direction by the Majority Banks, shall direct Finco to declare that the Loan
Commitments are terminated and, if no Commercial Paper Notes are then
Outstanding, the Loan Note is immediately due and payable.
SECTION 4.5. Notice of Default. Promptly upon becoming aware
-----------------
thereof, each of Finco and Leasco agrees to give the Liquidity Agent, the
Liquidity Lenders, the Depositary, the Dealers, the Agent and each Rating Agency
prompt written notice (and in no case more than two Business Days after Finco or
Leasco, as the case may be, has actual knowledge thereof) of each (a) default on
the part of Leasco of its obligations under the Loan Agreement or (b) Lease
Event of
9
<PAGE>
Default under the Lease Agreement, in each case, that comes to Finco's or
Leasco's, as the case may be, attention.
ARTICLE V.
Collateral Account, Termination Advance Account and Cash Reserve Account
------------------------------------------------------------------------
SECTION 5.1 Establishment of Collateral Account, etc. (a) The
---------------------------------------- - ---
Accounts. For purposes of the Liquidity Agreement and the Depositary Agreement,
- --------
the Agent shall at all times during the term of this Agreement maintain (i) a
demand deposit account for the benefit of the Secured Parties (said account
being herein called the "Collateral Account" and being identified as Account No.
40735909), (ii) a demand deposit account for the benefit of the Secured Parties
(said account being herein called the "Termination Advance Account" and being
identified as Account No. 40735386) and (iii) an interest bearing account for
the benefit of the Liquidity Lenders and the Liquidity Agent (said account being
herein called the "Cash Reserve Account" and being identified as Account No.
), the operation of each of which shall be governed by this Article V (the
Collateral Account, the Termination Advance Account and the Cash Reserve Account
are collectively referred to herein as the "Accounts"); provided, however, that
-------- -------
if at any time the short-term credit rating of the Agent from S&P and Moody's
shall be reduced below A-1 or P-1, respectively, the Agent shall, within 30 days
of such reduction, convert each of the Accounts to a segregated trust account in
the corporate trust department of a financial institution satisfying the
qualifications set forth in Section 7.05 hereof.
(b) Collateral Account. It is understood and agreed by Finco, Leasco
------------------
and the Secured Parties that on any Business Day there shall be deposited in the
Collateral Account the following moneys, instruments, cash and proceeds received
by the Agent, Leasco or Finco at any time and from time to time: (i) from the
Depositary from the sale of Commercial Paper Notes not required to be deposited
in the Commercial Paper Account, (ii) from Leasco under the Loan Agreement,
(iii) from the sale or other disposition of Vehicles in accordance with Article
VI hereof, (iv) from TRS under the Lease, (v) any other proceeds of the
Collateral and (vi) any and all moneys at any time and from time to time
received on behalf of Finco or Leasco, and required by the terms of this
Agreement, the Loan Agreement, the Lease or any other Related Document to be
deposited in the Collateral Account.
(c) Cash Reserve Account. It is further understood and agreed by
--------------------
Finco and the Secured Parties that there shall be deposited in the Cash Reserve
Account the moneys, investments, cash and proceeds received by the Agent at any
time and from time to time pursuant to the Liquidity Agreement, or other amounts
designated by Finco to be deposited into such account in accordance with the
Liquidity Agreement.
(d) Commercial Paper Account. It is further understood and agreed by
------------------------
Finco, Leasco and the Secured Parties that there shall be deposited in the
Commercial Paper Account the following moneys, instruments, cash and proceeds
received by the Agent or Finco at any time and from time to time: (i) from any
Liquidity Lender pursuant to Section 3.06(a), 3.06(b)(i) or 3.06(b)(iii) of the
Liquidity Agreement and (ii) any and all moneys at any time and from time to
time received on behalf of Finco, and required by the terms of this Agreement,
the Liquidity Agreement or any other Related Document to be deposited in the
Commercial Paper Account.
(e) Termination Advance Account. It is further understood and agreed
---------------------------
by Finco, Leasco and the Secured Parties that there shall be deposited in the
Termination Advance Account moneys (i) received from any Liquidity Lender
pursuant to Section 3.06(b)(ii) or Section 5.09(c) of the
10
<PAGE>
Liquidity Agreement and (ii) any and all moneys at any time and from time to
time received on behalf of Finco, and required by the terms of this Agreement,
the Liquidity Agreement or any other Related Document to be deposited in the
Termination Advance Account.
(f) Restriction on Issuing Commercial Paper. In addition, Finco
---------------------------------------
agrees that it will not, and will not permit any Person on behalf of Finco to,
issue Commercial Paper Notes after Finco has received notice that any of the
Accounts or the Commercial Paper Account is subject to any stay, writ, judgment,
warrant of attachment, execution or other similar process; provided that if any
--------
such write, order, judgment, warrant of attachment, execution or other similar
process is removed or dismissed, Finco may recommence issuing, and permitting
any Person on behalf of Finco to issue, Commercial Paper Notes.
SECTION 5.2 Assignment of Accounts, etc. (a) In order to secure
--------------------------
and provide for the repayment and payment of the Finco Obligations and the
Leasco Liabilities under the Loan Agreement, each of Finco and Leasco, as the
case may be, hereby assigns, pledges, grants, transfers and sets over to the
Agent, for the benefit of the Secured Parties, all of Finco's and Leasco's
right, title and interest in and to the following (whether now or hereafter
existing and whether now owned or hereafter acquired): (i) the Accounts and all
claims of Finco and Leasco, respectively, in and to the Accounts, (ii) the
Deposited Funds and all claims of Finco and Leasco, respectively, in and to the
Deposited Funds, (iii) all certificates and instruments, if any, representing or
evidencing any or all of the Accounts, (iv) all interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Accounts, the Deposited Funds or the Eligible Investments and all claims of
Finco and Leasco, respectively, therein and thereto, (v) all Eligible
Investments made at any time and from time to time with the moneys in any and
all of the Accounts and all claims of Finco and Leasco, respectively, therein
and thereto and (vi) all proceeds of any and all of the foregoing, including,
without limitation, cash. Throughout the term of this Agreement, the Agent
shall be a pledgee in possession of the Deposited Funds and shall have the sole
and exclusive right to withdraw or order a transfer of Deposited Funds from the
Accounts subject to the provisions of the next succeeding paragraph, and each of
Finco and Leasco, as the case may be, hereby appoints the Agent the true and
lawful attorney of Finco and Leasco, respectively, with full power of
substitution, for the purpose of making any such withdrawal or ordering any such
transfer of Deposited Funds from any of the Accounts, which appointment is
coupled with an interest and is irrevocable.
(b) So long as no Amortization Event shall have occurred and then be
continuing, the Agent may rely on the instruction of (A) Finco, with respect to
clauses (ii) and (iv) through (viii) below, (B) the Depositary, with respect to
clause (i) below, (C) the Liquidity Agent (on behalf of the Liquidity Lenders)
with respect to clause (iii) below, and (D) Leasco, with respect to clause (ix)
below, and shall order the transfer of, Deposited Funds (upon the receipt of
instructions by Finco, the Depositary or the Liquidity Agent pursuant to Section
5.02(c) hereof) in the order and priority set forth below:
(i) the payment of all Indebtedness, at any time and from time to time
due from Finco to the Holders of the Outstanding Commercial Paper Notes
issued pursuant to and in accordance with the Depositary Agreement;
(ii) the payment of all (A) operating and ordinary course expenses of
Finco up to an aggregate amount equal to $250,000 per calendar year and (B)
fees and expenses at any time and from time to time due to the Depositary
pursuant to Section 8(a) of the Depositary Agreement or due to the Agent
hereunder to the extent no Borrowing Base Deficiency results;
11
<PAGE>
(iii) the payment of all amounts at any time and from time to time
notified by the Liquidity Agent to the Agent pursuant to Section 4.05 of
the Liquidity Agreement;
(iv) the payment, pro rata, of all amounts payable in respect of
interest on Indebtedness and, after such payments with respect to interest
have been made, the payment of all principal amounts with respect to such
Indebtedness (including Commitment Termination Date Liquidity Advances) at
any time and from time to time due (in the case of a Commitment Termination
Date Liquidity Advance, such Advance will be deemed to be due for purposes of
this clause (iv) on the date such Advance is made) from Finco to the
Liquidity Lenders in connection with the Liquidity Advances made pursuant to
the Liquidity Agreement;
(v) to the extent no Borrowing Base Deficiency results therefrom, the
payment, pro rata, of all other Indebtedness (including, but not limited to,
fees, reimbursements, indemnities, taxes and increased costs, but excluding
amounts referenced in clause (vi) below) at any time and from time to time
due and owing to the Liquidity Lenders, the Liquidity Agent and the Agent and
for the payment, pro rata, of any other amounts (excluding those referenced
in clause (vi) below) at any time and from time to time due from Finco to any
of them under or in respect of the Liquidity Agreement and this Agreement,
together with all amounts due from Finco in respect of interest thereon, and
the payment, pro rata, of all indemnities at any time and from time to time
due from Finco hereunder to the Liquidity Lenders or the Liquidity Agent, it
being understood that amounts payable under this clause (v) shall relate
exclusively to costs and expenses incurred in or in connection with this
Agreement, the procurement and handling of funds and the making of such funds
available to or for the account or benefit of Finco and shall not include
amounts payable in connection with general indemnity claims relating to the
use by Finco of the proceeds of such financial accommodations (other than, in
the event such actions give rise to breakage costs, any action in the nature
of a prepayment by Finco) or actions taken or omitted to be taken by Finco
under the Related Documents and not directly related to the procurement of
funds, all of which shall be covered by clause (vi) below;
(vi) to the extent no Borrowing Base Deficiency results therefrom, the
repayment, pro rata, of all reasonable amounts advanced or expended by the
Agent, the Liquidity Agent or any Liquidity Lender hereunder or in connection
with the Liquidity Agreement and any indemnification obligations, other
amounts and reasonable out-of-pocket costs and expenses due from Finco to any
Secured Party under or in connection with this Agreement or the Liquidity
Agreement, whether in respect of indemnities thereunder or otherwise;
(vii) to the extent no Borrowing Base Deficiency results therefrom, the
payment of all other expenses of Finco in excess of the amounts paid under
clause (ii) above;
(viii) the making of new Loans by Finco under the Loan Agreement for the
purchase or financing by Leasco of additional Vehicles (such amounts to be
distributed directly to Leasco upon instruction by Finco);
(ix) to the extent that the Enhancement Test Percentage will not, after
giving effect thereto, be less than the Required Enhancement Percentage as
a result thereof, a payment to Leasco; and
(x) the balance of such Deposited Funds shall be retained in the
appropriate Account and invested pursuant to Section 5.04 in Eligible
Investments.
12
<PAGE>
(c) The Agent shall apply Deposited Funds as provided in the order and
priority set forth in Section 5.02(b) promptly upon receipt of written or
telephonic instructions from any of (i) Finco, (ii) with respect to clause
(b)(i), above, the Depositary or (iii) with respect to clause (b)(iii) above,
the Liquidity Agent. Any telephonic instructions shall be promptly confirmed in
writing; provided, however, that the Agent shall not distribute any
-------- --------
Deposited Funds from the Cash Reserve Account except to the extent that, after
such distribution, the amount of Deposited Funds in the Cash Reserve Account
shall be equal to or greater than 2.00% of Aggregate Outstandings. The Agent
shall make the required withdrawals and transfers on the same day provided that
it shall have received instructions prior to 3:00 p.m. (New York City time) on
such day. Absent manifest error, the Agent shall have no responsibility for
verifying that moneys being transferred pursuant to this Section 5.02 are in the
proper amounts or that any conditions to such transfers are complied with. All
instructions furnished to the Agent pursuant to this Section 5.02(c) or 5.03
shall specify the account to which moneys are to be transferred; provided that
--------
moneys payable to any Liquidity Lender shall be transferred to the Liquidity
Agent for distribution to such Liquidity Lender.
(d) The Agent shall, with the cooperation of the Depositary and the
Liquidity Agent monitor the amount of Commercial Paper Notes Outstanding,
Liquidity Advances Outstanding and the current Borrowing Base, and determine
whether or not a Borrowing Base Deficiency exists on any Business Day that a
form of Loan Request is received by Finco. In this regard, Finco hereby agrees
to provide the Agent, on the twentieth day of each month, a statement reflecting
the Borrowing Base (as of the close of business on the last day of the
immediately preceding Related Month), which statement shall be certified by the
chief financial officer of Finco and shall be in the form of Exhibit O to the
Liquidity Agreement (an "Issuance Certificate"). Finco shall provide copies of
such monthly statement to each Rating Agency and the Dealers. Upon each
occasion that Finco delivers an Issuance Certificate to the Liquidity Agent in
accordance with the Liquidity Agreement, Finco shall provide a copy of such
Borrowing Base Certificate to the Agent hereunder. The Agent may conclusively
rely on such Issuance Certificate at all times from and after the issuance
thereof until issuance of a new such Issuance Certificate, without any
obligation on the part of the Agent to confirm the truth, accuracy or
completeness of such certified statement or certificate and without any
obligation on the part of the Agent to undertake any other inquiry with respect
thereto. Upon each occasion that Finco delivers information relating to the
Borrowing Base to the Depositary in accordance with Section 3(b) of the
Depositary Agreement, Finco shall provide a copy of the notice containing such
information to the Agent hereunder. Finco agrees to notify the Agent and each
Rating Agency promptly, and in any event within one Business Day, upon its
obtaining knowledge of the existence of any Borrowing Base Deficiency.
(e) The Agent shall from time to time, but at least monthly, provide
Finco with statements of account relating to the Accounts in accordance with the
Agent's customary practices and in a form reasonably satisfactory to the Agent
and Finco.
(f) Upon the occurrence and during the continuance of an Amortization
Event, all rights of Finco to request the Agent to withdraw or order the
transfer of Deposited Funds from the Accounts shall cease and the Agent, at the
direction (which direction shall be in writing or by telephone (confirmed in
writing promptly thereafter)) of the Majority Banks, shall (subject to Section
7.01 hereof), at any time and from time to time, appropriate and apply the
Deposited Funds then, or at any time thereafter, on deposit in the Accounts to
the payment or prepayment in full of all outstanding Finco Obligations, whether
or not then due, in the order of priority specified in Section 2.0l hereof.
13
<PAGE>
(g) The Agent shall make all payments with respect to Commercial Paper
Notes Outstanding pursuant to clause Second of Section 2.01(b) to the Depositary
for application to the pro rata payment, in accordance with their terms and
subject to the provisions of the Depositary Agreement, of the face amount of
matured and unmatured Commercial Paper Notes, whether or not such Commercial
Paper Notes have been presented to the Depositary for payment.
SECTION 5.3. Application of Deposited Funds and Collateral. (a) For
---------------------------------------------
purposes of determining the payment to be made to any Person of any Collateral
and Deposited Funds pursuant to Sections 2.01 and 5.02 hereof, the Agent may
rely on certificates or statements furnished to or by it in accordance with the
provisions of this Section 5.03; provided, however, to the extent that the Agent
-------- -------
has previously received telephonic or written instructions with respect to
determining the payment to be made to any Person of any Collateral and Deposited
Funds pursuant to Section 5.02(c), the Agent may conclusively rely on such
previously received instructions.
(b) For purposes of determining the application to be made of
Deposited Funds and any Collateral to any Holder pursuant to clause Second of
Section 2.01(b) and clause (i) of Section 5.02(b) or to the Depositary pursuant
to subclause (b) of clause Third or clause Eighth of Section 2.01(b) or Section
5.02(b)(ii)(B), the Agent may rely exclusively upon a certificate or other
statement (a copy of which shall at the same time also be provided to Finco) of
the Depositary as to the amount then owing to such Holder.
(c) For purposes of determining the application to be made of
Deposited Funds and any Collateral to any Liquidity Lender or the Liquidity
Agent, as the case may be, pursuant to clause Fourth, Fifth or Sixth of Section
2.01(b) hereof (and the corresponding provisions under Section 5.02(b)), the
Agent may rely exclusively upon a certificate or other statement (a copy of
which shall at the same time also be provided to Finco) of the Liquidity Agent
(with respect to amounts owing to it or any Liquidity Lender) as to the amount
then owing to any such Liquidity Lender or the Liquidity Agent, as the case may
be.
(d) Any application to be made of Deposited Funds and Collateral to the
Agent pursuant to clause First or Seventh of Section 2.01(b) hereof (and the
corresponding provisions under Section 5.02(b)) may be made upon the Agent's own
certificate or statement delivered to Finco and the Liquidity Agent, setting
forth in reasonable detail the nature of the Agent's claim and the amount owing
to the Agent on account thereof.
(e) For purposes of determining the application to be made of Deposited
Funds and Assigned Collateral to Finco pursuant to clause Third or Ninth of
Section 2.01(b) (or the corresponding provisions under Section 5.02(b)) hereof
or to any Dealer or any other Person (other than any party hereto or any
Liquidity Lender) pursuant to clause Eighth of Section 2.01(b) (or the
corresponding provisions under Section 5.02(b)) hereof, the Agent may rely
conclusively upon a certificate or other statement of Finco as to the amount
then owing to Finco or such other party.
(f) For purposes of determining the application to be made of Deposited
Funds to any Liquidity Lender pursuant to Section 2.01(a), the Agent may rely
exclusively upon a certificate or other statement of the Liquidity Agent as to
the amount then owing to any such Liquidity Lender.
The Agent shall not be liable for any application of the Deposited Funds in
accordance with any certificate or direction delivered pursuant to this Section
5.03 or 5.02(c); provided, however, that no application of the Deposited
-------- -------
Funds and Collateral in accordance with any certificate or statement delivered
pursuant to this Section 5.03 or 5.02(c) shall be deemed to restrict or limit
the right of the
14
<PAGE>
Agent, Finco, the Liquidity Agent, the Depositary, any Liquidity Lender or any
Dealer to contest with the purported obligee its respective rights in respect of
the amount set forth in such certificate or statement.
SECTION 5.4 Eligible Investments. Moneys held in the Accounts
--------------------
shall be invested, and the proceeds of investments shall be reinvested, by the
Agent in overnight Eligible Investments pursuant to the written direction of
Finco. The Agent shall not be responsible or liable for any loss resulting from
the investment performance of any investment or reinvestment of moneys held in
the Accounts or any other account maintained by the Agent for the purposes of
this Agreement or in Eligible Investments or from the sale or liquidation of any
Eligible Investments in accordance with this Agreement. All Eligible
Investments shall be made in the name of, and shall be payable to, the Agent,
and all investment costs and expenses shall be reimbursed to the Agent by Finco.
SECTION 5.5 [Reserved].
SECTION 5.6. Liquidity Demand; Commitment Termination Demand;
------------------------------------------------
Reductions. (a) Upon receipt by the Agent not later than 11:15 a.m. (New York
- ----------
City time) of a written notice from the Depositary notifying the Agent of the
existence and amount of a Commercial Paper Deficit and instructing the Agent to
deliver a Borrowing Request, the Agent shall, by 12:00 noon (New York City
time) on the date of such notice (or, in the case of any notice given to the
Agent after 11:15 a.m. (New York City time), by 12:00 noon (New York City time)
on the next following Business Day, deliver a Borrowing Request to the Liquidity
Agent for a Borrowing in the aggregate in the amount of such Commercial Paper
Deficit; provided that if on the date any Borrowing Request is to be delivered
--------
by the Agent, Deposited Funds are available in the Termination Advance Account,
the Agent shall immediately transfer to the Commercial Paper Account such
Deposited Funds (up to the amount of the relevant Commercial Paper Deficit) and
reduce the amount demanded in the Borrowing Request by the amount of the
Deposited Funds so transferred.
(b) Upon receipt by the Agent not later than 12:00 noon (New York
City time) of a written notice from Finco directing the Agent to request a
Commitment Termination Date Liquidity Advance pursuant to Section 3.06(b)(ii) of
the Liquidity Agreement, the Agent shall by 12:00 noon (New York City time) on
the date of such notice (or, in the case of any notice given to the Agent after
11:15 a.m. (New York City time), by 12:00 noon (New York City time) on the next
following Business Day), deliver a Borrowing Request to the Liquidity Agent for
a Borrowing in the aggregate in the amount of such Commitment Termination Date
Liquidity Advance. Finco agrees to give the Agent notice of such direction so
the Agent's Borrowing Request will be delivered to the Liquidity Agent not less
than three nor more than five Business Days before any Liquidity Lender's
Scheduled Liquidity Commitment Termination Date.
(c) Upon receipt by the Agent not later than 12:00 noon (New York City
time) of a written notice from Finco directing the Agent to request a Commitment
Termination Date Liquidity Advance pursuant to Section 5.09(c) of the Liquidity
Agreement, the Agent shall by 12:00 noon (New York City time) on the date of
such notice (or, in the case of any notice given to the Agent after 11:15 a.m.
(New York City time), by 12:00 noon (New York City time) on the next following
Business Day), deliver a Borrowing Request to the Liquidity Agent for a
Borrowing in the aggregate in the amount of such Commitment Termination Date
Liquidity Advance. Finco agrees to give the Agent notice of such direction so
the Agent's Borrowing Request will be delivered to the Liquidity Agent not less
than three nor more than five Business Days before such Liquidity Lender's
Scheduled Liquidity Commitment Termination Date.
15
<PAGE>
ARTICLE VI.
Default
-------
SECTION 6.1. Rights of the Agent upon Amortization Event. (a)(i)
---------------------------------------------
Only if and whenever an Amortization Event or Loan Event of Default shall have
occurred and be continuing, the Agent, at the direction (which direction shall
be in writing or by telephone (confirmed in writing promptly thereafter)
specifying the action to be taken) of the Majority Banks shall, from time to
time, withdraw amounts in the Accounts for application as provided in Section
5.02(f) and (ii) only if and whenever an Amortization Event (other than a
Scheduled Amortization Event) shall have occurred and be continuing, the Agent,
at the direction (which direction shall be in writing or by telephone (confirmed
in writing promptly thereafter) specifying the action to be taken) of the
Majority Banks may also exercise from time to time any rights and remedies
available to it under applicable law or any Related Document. Each of Finco and
Leasco agrees to enforce any rights it may have under the Related Documents at
the direction of the Agent. Any amounts obtained by the Agent on account of or
as a result of the exercise by the Agent of any right with respect to any funds
at any time and from time to time on deposit in, or otherwise to the credit of,
any of the Accounts, shall be held by the Agent as additional collateral for the
repayment of the Finco Obligations and shall be applied as provided in Section
2.01 hereof. The Agent agrees to undertake the actions set forth with respect
to the Agent in Section 9.02 of the Liquidity Agreement.
(b) If a Liquidation Event of Default shall have occurred and be
continuing, the Agent, at the direction (which direction shall be in writing or
by telephone (confirmed in writing promptly thereafter) specifying the actions
to be taken) of the Majority Banks, and upon receipt of indemnity from the
Liquidity Lenders reasonably satisfactory to it, shall direct:
(i) Finco to exercise all rights, remedies, powers, privileges and
claims of Finco against Leasco under or in connection with the Loan
Agreement, and against any party to any of the Related Documents, including
the right or power to take any action to compel performance or observance by
Leasco or any such party of its obligations to Finco, the right, if any, to
take possession of any of the Vehicles, and to give any consent, request,
notice, direction, approval, extension or waiver in respect of the Loan
Agreement or any of the Related Documents, and any right of Finco to take
such action shall be suspended; and
(ii) Leasco to exercise all rights, remedies, powers, privileges and
claims of Leasco against TRS under, in connection and in accordance with the
Lease and against any party to any of the Related Documents, including the
right or power to take any action to compel performance or observance by TRS
or any such party of its obligations to Leasco, the right, if any, to take
possession of any of the Vehicles, and to give any consent, request, notice,
direction, approval, extension or waiver in respect of the Lease or any of
the Related Documents, and any right of Leasco to take such action shall be
suspended.
If Finco or Leasco, as the case may be, shall have failed, within 2 Business
Days of receiving the directions of the Agent, to accomplish such directed
actions, the Agent may, but shall not be obligated to, take such previously
directed actions (and any related action, as it would be permitted to direct
Finco or Leasco, as the case may be, to take, pursuant to paragraphs (i) and
(ii) of this Section 6.01(b), thereafter determined by the Agent to be
appropriate without the need under this provision or any other provision
hereunder to direct Finco or Leasco, as the case may be, to take such action) on
behalf of Finco, Leasco and the Secured Parties. The parties hereto agree,
however, that, until such time that no Commercial Paper Notes are Outstanding,
the number of Vehicles sold or disposed of
16
<PAGE>
during any month shall not exceed the Fleet Disposition Limit unless the
aggregate Disposition Proceeds from such sales and dispositions exceeds the
aggregate Net Book Value of all Vehicles sold or disposed of during such month
(such Net Book Value to be measured for each Vehicle as of the date such Vehicle
was sold or disposed of).
SECTION 6.2. Special Provisions Concerning Remedies and Sale of
--------------------------------------------------
Collateral. (a) Upon any sale of any of the Collateral directly by the
- ----------
Agent, whether made by the power of sale given hereunder, or under judgment,
order or decree in any judicial proceeding for the foreclosure or involving the
enforcement of this Agreement:
(i) the Agent and/or any Liquidity Lender may bid for and purchase the
property being sold, and upon compliance with the terms of sale may hold,
retain, possess and dispose of such property in its own absolute right
without further accountability; provided, however, that neither the Agent nor
-------- --------
any Liquidity Lender may bid on or purchase any such property if such action
could in any way prejudice the rights of the Secured Parties;
(ii) the Agent may make and deliver to the purchaser or purchasers a
good and sufficient deed, bill of sale and instrument of assignment and
transfer of the property sold;
(iii) the Agent is hereby irrevocably appointed the true and lawful
attorney-in-fact of Finco and Leasco in its name and stead, to make all
necessary deeds, bills of sale and instruments of assignment and transfer of
the property thus sold and for such other purposes as are necessary or
desirable to effectuate the provisions (including, without limitation, this
Section 6.02) of this Agreement, and for that purpose it may execute and
-------------
deliver all necessary deeds, bills of sale and instruments of assignment and
transfer, and may substitute one or more Persons with like power, and each of
Finco and Leasco hereby ratify and confirm all that its said attorney, or
such substitute or substitutes, shall lawfully do by virtue hereof; but if so
requested by the Finco Agent or the Leasco Agent, as the case may be, or by
any purchaser, Finco or Leasco, as the case may be, shall ratify and confirm
any such sale or transfer by executing and delivering to the Agent or to such
purchaser all property, deeds, bills of sale, instruments of assignment and
transfer and releases as may be designated in any such request;
(iv) all right, title, interest, claim and demand whatsoever, either at
law or in equity or otherwise, of Finco or Leasco, as the case may be, in and
to the property so sold shall be divested; and such sale shall be a perpetual
bar both at law and in equity against, its successors and assigns, and
against any and all Persons claiming or who may claim the property sold or
any part thereof from, through or under Finco or Leasco, as the case may be,
its successors or assigns;
(v) the receipt of the Agent or of the officer thereof making such sale
shall be a sufficient discharge to the purchaser or purchasers at such sale
for his or their purchase money, and such purchaser or purchasers, and his or
their assigns or personal representatives shall not, after paying such
purchase money and receiving such receipt of the Agent or of such officer
therefor, be obliged to see to the application of such purchase money or be
in any way answerable for any loss, misapplication or non-application
thereof; and
(vi) to the extent that it may lawfully do so, each of Finco and Leasco
agrees that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any appraisal,
valuation, stay, extension or redemption laws, or any law permitting it to
direct the order in which the Vehicles shall be sold, now or at any time
17
<PAGE>
hereafter in force, which may delay, prevent or otherwise affect the
performance or enforcement of this Agreement;
provided, however, that the parties hereto agree that, until such time that no
- -------- -------
Commercial Paper Notes are Outstanding, the number of Vehicles sold or disposed
of during any month shall not exceed the Fleet Disposition Limit unless the
aggregate Disposition Proceeds from such sales and dispositions exceeds the
aggregate Net Book Value of all Vehicles sold or disposed of during such month
(such Net Book Value to be measured for each Vehicle as of the date such Vehicle
was sold or disposed of).
(b) In addition to any rights and remedies now or hereafter
granted hereunder or under applicable law with respect to the Assigned
Collateral and the Loan Collateral, the Agent shall have all of the rights and
remedies of a secured party under the Uniform Commercial Code as enacted in any
applicable jurisdiction.
(c) After termination of this Agreement and the payment in full
of the Finco Obligations, any proceeds of all the Assigned Collateral and Loan
Collateral received or held by the Agent shall be turned over to Finco and
Leasco, respectively, and the Assigned Collateral or Loan Collateral shall be
reassigned to Finco or Leasco by the Agent without recourse to the Agent and
without any representations, warranties or agreements of any kind.
ARTICLE VII.
The Agent, The Liquidity Lenders and
------------------------------------
the Holders of Commercial Paper Notes
-------------------------------------
SECTION 7.1 Appointment and Powers of Agent. (a) The Secured
-------------------------------
Parties hereby appoint the Agent their agent hereunder, and hereby authorize the
Agent to take such action on their behalf and to exercise such rights, remedies,
powers and privileges hereunder as are specifically authorized to be exercised
by the Agent by the terms hereof, together with such rights, remedies, powers
and privileges as are reasonably incidental thereto. The parties hereto agree
that the Agent shall not be required to exercise any discretion or take any
action or refrain from taking any action in its capacity hereunder, but shall
only be required to act or refrain from acting in such capacity (and shall be
fully protected in so acting or refraining from acting) upon the instruction of
the Majority Banks, Finco or Leasco as the case may be, as provided herein.
The Agent may execute any of its duties as agent hereunder by or through agents
or employees and shall be entitled to retain experts and to act in reliance upon
the advice of such experts concerning all matters pertaining to the agencies
hereby created and its duties hereunder, and shall not be liable for any action
taken or omitted to be taken by it in good faith in accordance with the advice
of such experts selected by it. The relationship between the Agent, and each of
the Secured Parties is that of agent and principal only, and nothing herein
shall be deemed to constitute the Agent a trustee for any of the Secured Parties
or impose on the Agent any obligations other than those for which express
provision is made herein.
(b) If the Agent receives unclear or conflicting instructions, it
shall be entitled to refrain from taking action until clear or non-conflicting
instructions are received, but shall inform the instructing party or parties
promptly of its decision to refrain from taking such action. Except as required
by the specific terms of this Agreement, the Agent shall have no duty to
exercise any rights, power, remedy or privilege granted to it hereby, or to take
any affirmative action hereunder or thereunder, unless directed to do so by the
Majority Banks (and shall be fully protected in acting or refraining from acting
pursuant to such directions which shall be binding on the Secured Parties), and
shall not, without the prior approval of the Majority Banks, waive any default
on the part of Finco or
18
<PAGE>
Leasco with respect to the Collateral or amend, modify, supplement or terminate,
or agree to any surrender of, this Agreement or the Collateral. Notwithstanding
anything herein to the contrary, the Agent shall not be required to take any
action which the Agent has reasonably determined that a reasonable likelihood
exists that such action will expose the Agent to personal or financial
liability, unless indemnified to its satisfaction, or which is contrary to this
Agreement, or any other agreement or instrument relating to the Collateral or
applicable law.
(c) None of the Secured Parties nor any of its or their respective
directors, officers, employees or agents, shall be liable to any Secured Party
or any other Person for any action taken or omitted to be taken by it or them
hereunder, or in connection herewith, except for its or their own gross
negligence or wilful misconduct; nor (except for its own due execution and
delivery thereof) shall the Agent be responsible to any Secured Party for the
validity, effectiveness, value, sufficiency or enforceability against Leasco or
Finco of this Agreement or any other document furnished pursuant hereto or in
connection herewith , or of the Collateral (or any part thereof), the Eligible
investments (or any part thereof) or the Deposited Funds (or any part thereof)
except to the extent arising out of its own gross negligence or wilful
misconduct. Without limiting the generality of the foregoing, the Agent: (i)
makes no warranty or representation to any Secured Party and shall not be
responsible to any Secured Party for any statements, warranties or
representations made by any other Person in or in connection with this
Agreement, the Loan Agreement, the Liquidity Agreement or any other document
relating to the Collateral; and (ii) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement, the Loan Agreement, or any other agreements or
instruments relating to the Collateral on the part of any party hereto or
thereto or to inspect any books or records relating to the Collateral other than
as it determines necessary in the fulfillment of its own obligations hereunder.
(d) The Agent shall be entitled to rely on any communication,
instrument, paper or other document reasonably believed by it to be genuine and
correct and to have been given, signed or sent by the proper Person or Persons.
The Agent shall be entitled to assume (unless it has actual knowledge to the
contrary) that no Amortization Event or Loan Event of Default shall have
occurred and be continuing and that the Accounts, and any funds on deposit in or
to the credit of such Accounts, are not subject to any writ, order, judgment,
warrant of attachment, execution or similar process (collectively a "write"),
unless (i) in the case of any writ, an officer in the asset finance department
of the Agent has actual knowledge thereof or (ii) the Agent has received written
notice from the Liquidity Agent or Leasco under the Loan Agreement that the
Majority Banks consider that such an Amortization Event or Loan Event of Default
has occurred or such writ has been issued and continues to be in effect, which
notice specifies the nature thereof. The Agent may accept deposits from, lend
money to and generally engage in any kind of business with Finco, Leasco, TRS
and their respective affiliates as if it were not the agent of the Liquidity
Lenders and the Holders of Commercial Paper Notes. The Agent shall have the
right to refrain from taking any action under Article VI hereof unless it has
received written directions from the appropriate parties to take such action.
SECTION 7.2 Agents and Employees of the Agent. (a) Each Liquidity
---------------------------------
Lender hereby agrees, in accordance with its pro rata percentage of the sum of
the Aggregate Liquidity Commitment under the Liquidity Agreement, subject to the
limitations set forth in this clause (a), to indemnify and hold harmless the
Agent (to the extent not reimbursed by Finco), from and against any and all
losses (other than the Agent's loss of profit), liabilities (including,
liabilities for penalties), actions, suits, judgments, demands, damages, out-of-
pocket costs and expenses of any kind whatsoever (including, without limitation,
reasonable fees and expenses of counsel and other experts) incurred or suffered
by the Agent in its capacity as agent hereunder as a result of any action taken
or omitted to be taken by the Agent in such capacity or otherwise incurred or
suffered by, made upon, or assessed
19
<PAGE>
against the Agent in such capacity to the extent not reimbursed by Finco or by
application of the Collateral; provided that no Liquidity Lender shall be liable
for any portion of any such losses, liabilities, actions, suits, judgments,
demands, costs or expenses resulting from or attributable to gross negligence or
wilful misconduct on the part of the Agent or its agents or employees. Without
limiting the generality of the foregoing, each Liquidity Lender hereby agrees,
in the ratio aforesaid, to reimburse the Agent promptly following its demand for
any out-of-pocket expenses (including, without limitation, reasonable fees and
expenses of counsel) incurred by the Agent hereunder and not promptly reimbursed
to the Agent by Finco or by application of the Collateral. The obligations of
each Liquidity Lender under this paragraph shall survive the termination of this
Agreement, and the Liquidity Agreement respectively, and the discharge of
Finco's obligations thereunder. The aggregate liability of the Liquidity Lenders
hereunder for any claim shall be limited to a percentage of the indemnity owing
equal to the percentage that the Aggregate Liquidity Commitments are of the
Program Size. If at any time, following its demand therefor, the Agent shall not
be reimbursed by Finco or by the Liquidity Lenders, the Agent is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all amounts at any time held by the Agent for
the benefit of the Liquidity Lenders, including without limitation any such
amounts designated for disbursement to the Liquidity Lenders in accordance with
Section 2.01 or Section 5.02(b), against any and all of the obligations of the
Liquidity Lenders to the Agent now or hereafter existing under this Agreement.
The Agent agrees promptly to notify each Liquidity Lender after any such set-off
and application made by the Agent, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the
Agent under this Section are in addition to other rights and remedies which the
Agent may have. Any such set-off against amounts owed to Liquidity Lenders by
the Agent shall not cause a payment default of Finco on amounts due to such
Liquidity Lenders to the extent funds are available in the Accounts to be
allocated to the payment of all amounts due to the Liquidity Lenders in
accordance with Section 2.01 or 5.02(b), as applicable.
(b) No provision of this Agreement shall require the Agent to expend
or risk its own funds or otherwise incur any financial or other liability in the
performance of any duties hereunder or in the exercise of any rights and powers
hereunder.
(c) Any action or proceeding alleging any breach by the Agent of duties
under this Agreement shall be prosecuted only in the courts of the State of New
York or in the United States District Court for the Southern District of New
York. The Agent shall have the right at any time to seek instructions from any
court of competent jurisdiction. The Agent may rely on the advice of counsel and
shall be held harmless for actions taken in reliance thereon.
(d) Subject to Section 3.04 hereof, the Agent makes no representation
as to, and shall have no responsibility for, the correctness of any statement
contained in, or the validity or sufficiency of, this Agreement or any documents
or instruments referred to in this Agreement or the sufficiency or effectiveness
of any collateral assigned by this Agreement or as to or for the validity or
collectibility of any obligation contemplated by this Agreement. The Agent
shall not be accountable for the use or application by any, person of
disbursements properly made by the Agent in conformity with the provisions of
this Agreement.
(e) The Agent may exercise any of its duties hereunder by or through
agents or employees. The possession of the Collateral by such agents or
employees shall be deemed to be the possession of the Agent.
(f) The provisions of this Section 7.02 shall survive the termination
of this Agreement or the resignation of the Agent hereunder.
20
<PAGE>
SECTION 7.3. Waiver of Jury Trial. EACH OF THE PARTIES HERETO
--------------------
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT 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 RELATED DOCUMENT, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS
OF THE PARTIES HERETO IN CONNECTION HEREWITH OR THEREWITH. EACH OF THE PARTIES
HERETO ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER RELATED
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES HERETO ENTERING INTO THIS AGREEMENT AND EACH SUCH
OTHER RELATED DOCUMENT.
SECTION 7.4. Successor Agent. The Agent acting hereunder at any
---------------
time may resign by an instrument in writing addressed and delivered, 60 days
prior to the effectiveness of such resignation, to each Liquidity Lender, the
Liquidity Agent, the Dealers, Finco, Leasco, each Rating Agency and the
Depositary, and may be removed at any time with or without cause by an
instrument in writing duly executed by or on behalf of the Majority Banks with
written notice to each of the Rating Agencies. Subject to the provisions
hereof, the Majority Banks shall appoint, subject to the written consent of
Finco (which consent shall not be unreasonably withheld), a successor to the
Agent upon any such resignation or removal, by an instrument of substitution
complying with the requirements of applicable law, or, in the absence of any
such requirements, without any formality other than appointment and designation
in writing. Upon the making and acceptance of such appointment, the execution
and delivery by such successor Agent of a ratifying instrument pursuant to which
such successor Agent agrees to assume the duties and obligations imposed on the
Agent by the terms of this Agreement, and the delivery to such successor Agent
of the Collateral, the Deposited Funds and documents and instruments then held
by the retiring Agent, such successor Agent shall thereupon succeed to and
become vested with all the estate, rights, powers, remedies, privileges,
immunities, indemnities, duties and obligations hereby granted to or conferred
or imposed upon the retiring Agent named herein, and one such appointment and
designation shall not exhaust the right to appoint and designate further
successor Agents hereunder. No removal or resignation of the Agent shall be
effective unless and until a successor Agent has been duly appointed, and the
appointment of such successor Agent has been accepted by such successor Agent.
No Agent shall be discharged from its duties or obligations hereunder until the
Collateral, the Deposited Funds and documents and instruments then held by such
retiring Agent shall have been transferred or delivered to the successor Agent
in its capacity as bank or trust company, until all Deposited Funds held in the
Accounts maintained with or in the name of the retiring Agent shall have been
transferred to the new Collateral Account and until such retiring Agent shall
have executed and delivered to the successor Agent appropriate instruments
assigning the retiring Agent's interest in the Collateral, the Accounts, the
Deposited Funds and Eligible Investments to the successor Agent. If no
successor Agent shall be appointed, as aforesaid, or, if appointed, shall not
have accepted its appointment, within 30 days after notice of resignation or
removal of the retiring Agent, then, subject to the provisions hereof, the
retiring Agent may appoint a successor Agent with the written consent of the
Liquidity Agent and (so long as no Amortization Event (other than a Scheduled
Amortization Event) or Loan Event of Default then exists) Finco, which consent
shall not be unreasonably withheld. Each such successor Agent shall provide
Finco, Leasco, each Liquidity Lender, the Liquidity Agent and the Depositary
with its address, and telephone, telecopy, telex, E-Mail (if applicable) and TWX
numbers, to be used for purposes of Section 9.04 hereof, in a notice complying
with the terms of said Section. Notwithstanding the resignation or removal of
any Agent hereunder, the provisions of this Article VII
21
<PAGE>
shall continue to inure to the benefit of such retiring Agent in respect of any
action taken or omitted to be taken by such retiring Agent in its capacity as
such while it was Agent under this Agreement. Finco shall provide prompt notice
to each Rating Agency of the appointment of a successor Agent. Upon the
appointment of a successor Agent hereunder, the predecessor Agent shall be
discharged of and from any and all further obligations arising in connection
with this Agreement.
SECTION 7.5. Qualifications of Agent. Any Agent at any time acting
-----------------------
hereunder must at all times be (i) the corporate trust department of a bank or
trust company having its principal office in the District of Columbia or one of
the states located in the United States, or (ii) a bank or trust company having
its principal office in the District of Columbia or one of the states located in
the United States, authorized to accept deposits, or a branch office or agency
of a foreign bank located in the District of Columbia or one of the states of
the United States, in each case (x) having short-term ratings from Moody's and
S&P at least equal to the rating such Rating Agency then assigns to the
Commercial Paper Notes and (y) having total assets in excess of $50,000,000.
SECTION 7.6 Instructions of the Majority Banks and Other Parties.
------------------------------------------------------
In any instance in which the Agent is permitted to take action hereunder, the
Agent shall, except as expressly provided herein or in the Liquidity Agreement,
act in accordance with the written instructions received, if any, from the
Majority Banks.
ARTICLE VIII
Amendments, Modifications, Waivers and Consents
-----------------------------------------------
SECTION 8.1. Execution of Amendments, etc. (a) No amendment,
----------------------------
modification, supplement, termination or waiver of or to any provision of this
Agreement or the defined terms used herein and set forth in the Definitions
List, nor any consent to any departure by Finco from any provision of this
Agreement, shall be effective unless the same shall be in writing and signed on
behalf of the Agent, the Liquidity Agent on behalf of the Majority Banks, the
Depositary, Finco and Leasco; provided, however, that (i) the written consent of
-------- -------
all Liquidity Lenders shall be necessary to the extent that any such amendment,
modification, supplement, termination, waiver or consent (a) releases the
assignment given hereunder in respect of any of the Assigned Collateral or (b)
affects this Section 8.01 or Section 2.01 or 5.02 and (ii) such amendment,
modification, supplement, termination or waiver shall not result in the
downgrading or the withdrawal of the then current ratings of the Commercial
Paper Notes provided by the Rating Agencies as evidenced by written confirmation
from the Rating Agencies. Any waiver of any provision of this Agreement, and
any consent to any departure by Finco from the terms of any provision of this
Agreement, shall be effective only in the specific instance and for the specific
purpose for which given. No notice to or demand upon Finco or Leasco,
respectively, in any instance hereunder shall entitle Finco or Leasco,
respectively, to any other or further notice or demand in similar or other
circumstances.
(b) Notwithstanding the foregoing provisions of this Section 8.01,
Finco, the Liquidity Agent and the Agent may, at any time and from time to time,
without the consent of the other Secured Parties, enter into any amendment,
supplement or other modification to this Agreement to cure any apparent
ambiguity or to correct or supplement any provision in this Agreement that may
be inconsistent with any other provision herein; provided, however, that (i) any
-------- -------
such action shall not have a materially adverse effect on the interests of the
Liquidity Lenders and (ii) a copy of any such amendment, supplement or other
modification is furnished the other Secured Parties and the Rating Agencies, in
accordance with the notice provisions hereof, not later than ten days prior to
the execution thereof.
22
<PAGE>
ARTICLE IX.
Miscellaneous
-------------
SECTION 9.1. Further Assurances. Each of Finco and Leasco (i) from
------------------
time to time, at its expense, will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary,
as reasonably requested by the Agent, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Agent to exercise and enforce its rights and remedies hereunder with respect to
any Assigned Collateral or Loan Collateral, respectively, including without
limitation, the execution of financing or continuation statements, or amendments
thereto and (ii) hereby authorizes the Agent to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Assigned Collateral or Loan Collateral, respectively, without the signature
of Finco or Leasco, as the case may be, where permitted by law. A carbon
photographic or other reproduction of this Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law.
SECTION 9.2. No Waiver, Cumulative Remedies. No failure on the part
------------------------------
of the Agent to exercise, and no delay on the part of the Agent in exercising
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or remedy by the
Agent preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies that may be available to the Agent, whether at
law, in equity or otherwise.
SECTION 9.3. Notice of Amendments; Waivers. Notice of any amendment,
-----------------------------
waiver or other change of the terms of the Collateral shall be sent by Finco,
promptly upon becoming aware thereof, to each Rating Agency which shall be
required to confirm their ratings on the Commercial Paper Notes prior to the
effectiveness thereof.
SECTION 9.4. Notices, etc. Except where telephonic instructions or
------------
notices are authorized herein to be given, all notices, demands, directions,
instructions and other communications required or permitted to be given to any
party hereto shall be in writing and addressed, delivered or transmitted to such
party at its address or facsimile number set forth below, or at any other
address or facsimile number, as the case may be, as such party may notify to the
other parties hereto in accordance with the provisions of this Section 9.04;
provided, however, all monthly statements provided for in Section 5.02(d) hereof
- -------- -------
shall be sent by first class mail. 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 transmitted upon receipt of electronic
confirmation of transmission.
If to Finco:
FCTR, INC.
1560 Broadway
Suite 1800
Denver, CO 80202
Attention of: General Counsel
Tel. No.: (303) 376-0040
Telecopy No.: (303) 376-7050
23
<PAGE>
If to Leasco:
RCTR, INC.
1560 Broadway
Suite 1800
Denver, CO 80202
Attention of: General Counsel
Tel. No.: (303) 376-0040
Telecopy No.: (303) 376-7050
If to the Agent:
CITICORP USA, INC.
399 Park Avenue
New York, NY 10043
Attention of:
Tel. No.:
Telecopy No.:
If to the Liquidity Agent:
CITIBANK, N.A.
120 Wall Street
13th Floor
New York, NY 10043
Attention of : Jenny Cheng
Tel. No.: (212) 412-6185
Telecopy No.: (212) 480-1615
If to the Depositary:
CITIBANK, N.A.
120 Wall Street
13th Floor
New York, NY 10043
Attention of : Jenny Cheng
Tel. No.: (212) 412-6185
Telecopy No.: (212) 480-1615
If to the Dealers:
CITICORP SECURITIES, INC.
399 Park Avenue
New York, NY 10043
Attention of : Don Donahue
Tel. No.: (212) 291-7845
24
<PAGE>
Telecopy No.: (212) 291-3910
and
LEHMAN BROTHERS INC.
3 World Financial Center
12th Floor
New York, NY 10285
Attention of : Commercial Paper Product Management
Tel. No.: (212) 526-2069
Telecopy No.: (212) 528-6925
If to Moody's:
Moody's Investors Service, Inc.
99 Church Street
New York, NY 10001
Attention of: ABS Monitoring Department
Tel. No.: (212) 553-0300
Telecopy No.: (212) 553-4773
If to S&P:
Standard & Poor's Ratings Group
25 Broadway
New York, NY 10001
Attention of: Asset-Backed Surveillance Group
If to the other Liquidity Lenders, at the addresses set forth below their
signatures on the signature pages of the Liquidity Agreement, as such addresses
may be revised from time to time by written notice from such Liquidity Lenders.
SECTION 9.5. Fee; Costs and Expenses, etc. Finco shall pay to the
----------------------------
Agent as its fee for its services the amounts as set forth in the Fee Letter.
Finco hereby agrees to reimburse the Agent for all reasonable out-of-pocket
costs and expenses (including counsel fees and expenses, but excluding costs and
expenses solely attributable to administrative overhead) incurred by the Agent
in connection with the administration and enforcement of this Agreement and
agrees to indemnify and hold harmless the Agent, the Depositary, the Liquidity
Agent and the Liquidity Lenders from and against any and all losses (other than
loss of profit), liabilities (including liabilities for penalties), actions,
suits, judgments, demands, reasonable out-of-pocket costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses but
excluding costs and expenses attributable solely to administrative overhead)
incurred by the Agent (in its capacity as Agent), the Depositary, the Liquidity
Lenders or the Liquidity Agent in connection with the administration or
enforcement of this Agreement and also agrees to pay, indemnify, and to hold
each Liquidity Lender, the Agent, the Liquidity Agent and the Depositary
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp and other taxes,
if any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation of any
25
<PAGE>
of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement; provided, however, that Finco shall not be required to indemnify any
-------- --------
Secured Party for any such loss, liability, action, suit, judgment, demand, cost
or expense due to wilful misconduct or gross negligence on the part of such
Secured Party or its respective agents or employees. If Finco shall fail to do
any act or thing which it has covenanted to do hereunder or any representation
or warranty on the part of Finco contained herein or repeated and reaffirmed
herein shall be breached, the Agent may, with the consent of the Majority Banks,
but shall not be required to, do the same or cause it to be done or remedy any
such breach, and may expend its funds for such purpose. Any and all amounts so
expended by the Agent shall be repayable to it by Finco upon the Agent's demand
therefor. The obligations of Finco under this Section 9.05 shall survive the
termination of this Agreement and the discharge of the other obligations of
Finco hereunder and shall also survive the termination of the Aggregate
Liquidity Commitment of the Liquidity Lenders in accordance with the provisions
of the Liquidity Agreement. Finco's obligations with respect to Taxes, Excluded
Taxes and Other Taxes are set forth in the Liquidity Agreement.
SECTION 9.6 Agent Appointed Attorney-in-Fact. Each of Finco and
--------------------------------
Leasco hereby appoints the Agent its attorney-in-fact with full power of
substitution, for the purpose of taking such action (including any action
pursuant to Section 4.03 hereof) and executing agreements, instruments and other
documents, in the name of Finco, as the Agent or the Majority Banks may deem
necessary or advisable to accomplish the purposes hereof, which appointment is
coupled with an interest and is irrevocable.
SECTION 9.7 Termination; Collateral. (a) This Agreement, and any
-----------------------
grants, pledges and assignments hereunder, shall terminate (i) with respect to
any Vehicle if such Vehicle is sold, disposed of or becomes a Casualty in
accordance with the Lease and the (A) Disposition Proceeds or (B) Casualty
Payments in each case with respect to such Vehicle is received into the
Collateral Account, and (ii) in its entirety when (A) all Finco Obligations
shall have been fully paid and satisfied and (B) the Aggregate Liquidity
Commitment of the Liquidity Lenders under the Liquidity Agreement and related
documents have terminated, at which time the Agent, at the request of Finco and
upon receipt of a certificate from Finco to the effect that the conditions in
clauses (ii)(A) and (ii)(B) above have been complied with and upon receipt of a
certificate from the Liquidity Agent and the Depositary, to the effect that the
conditions in clauses (a) and (b) relating to Finco Obligations to the Liquidity
Lenders and the Holders of Commercial Paper Notes have been complied with, shall
reassign (without recourse upon, or any warranty whatsoever by, the Agent) and
deliver at Finco's and Leasco's expense all Assigned Collateral and Loan
Collateral, respectively, and documents then in the custody or possession of the
Agent promptly to Finco and Leasco, respectively, and execute such documents and
instruments as Finco and Leasco, respectively, may reasonably request in
connection with such reassignment.
(b) Finco, Leasco and the Secured Parties hereby agree that, if any
Deposited Funds remain on deposit in the Collateral Account after the
termination of this Agreement, such amounts shall be released by the Agent and
paid to Finco.
(c) The Agent will, at the request of Leasco and upon the satisfaction
of the condition set forth in clauses (i) and (ii) of paragraph 9.07(a) above,
execute a power of attorney appointing Leasco to act as the agent of the Agent
in releasing the Lien of the Agent on the Vehicles for which the Certificate of
Title is to be released pursuant hereto (which power of attorney shall be
revocable at any time following the occurrence of an Amortization Event or
Limited Amortization Event).
26
<PAGE>
SECTION 9.8. Governing Law; Binding Character; Assignment. THIS
--------------------------------------------
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW. This Agreement shall be binding upon and shall inure to the benefit of
Finco, the Liquidity Lenders, the Liquidity Agent, the Depositary, the Holders
of Commercial Paper Notes and the Agent, and their respective successors and
assigns; provided, however, that Finco may not assign any of its right hereunder
-------- -------
or in connection herewith or any interest herein (voluntarily, by operation of
law or otherwise) without the prior written consent of all of the Liquidity
Lenders. This Agreement shall not be construed so as to confer any right or
benefit upon any Person other than the parties to this Agreement, the Liquidity
Lenders and the Holders of the Commercial Paper Notes and each of their
respective successors and assigns.
SECTION 9.9. Severability of Provisions. Any provision of this
--------------------------
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 9.10. No Bankruptcy Petition Against Finco or Leasco. Each of
----------------------------------------------
the Secured Parties 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 Commercial
Paper Note, it will not institute against, or join with any other Person in
instituting against, Finco or Leasco, 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 9.10 shall constitute a waiver of any right to indemnification,
reimbursement or other payment from Finco or Leasco pursuant to this Agreement.
In the event that any such Secured Party takes action in violation of this
Section 9.10, Finco or Leasco agrees that it shall file an answer with the
bankruptcy court or otherwise properly contest the filing of such a petition by
any such Secured Party against Finco or Leasco or the commencement of such
action and raise the defense that such Secured Party 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.
Notwithstanding any provision contained herein, the provisions of this Section
9.10 shall survive the termination of this Agreement, and the resignation or
removal of the Agent, the Liquidity Agent or the Depositary. Nothing contained
herein shall preclude participation by any Secured Party in assertion or defense
of its claims in any such proceeding involving Finco or Leasco.
SECTION 9.11. No Recourse. The obligations of Finco and Leasco,
-----------
respectively, under this Agreement are solely the corporate obligations of Finco
and Leasco, respectively. No recourse shall be had for the payment of any
amount owing in respect of Section 9.05 hereof or for the payment of any fee
hereunder or any other obligation or claim arising out of or based upon this
Agreement against any stockholder, employee, officer, director, affiliate or
incorporator of Finco or Leasco, respectively; provided, however, that nothing
-------- -------
in this Section 9.11 shall relieve any of the foregoing Persons from any
liability which such Person may otherwise have for its gross negligence or
wilful misconduct. The provisions of this Section 9.11 shall survive the
termination of this Agreement.
SECTION 9.12. Confidentiality. Each party hereto agrees that it
---------------
shall not disclose any Confidential Information to any Person without the prior
written consent of Leasco and Finco, other than (a) to any Secured Party, and
then only on a confidential basis, (b) as required by any law, rule or
regulation or any judicial process of which Finco or Leasco, as the case may be,
has knowledge; provided that any party hereto may disclose Confidential
--------
Information as required by law,
27
<PAGE>
rule or regulation or any judicial process of which Finco or Leasco, as the case
may be, does not have knowledge if such party is prohibited by law from
disclosing such requirement to Finco or Leasco, as the case may be, and (c) in
the course of litigation with Finco or Leasco, or any Secured Party.
SECTION 9.13. Headings. Article and Section headings used in this
--------
Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.
SECTION 9.14. Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute one and the same Agreement.
SECTION 9.15. Limited Recourse to Finco and Leasco. The Agent agrees
------------------------------------
that the obligations of Finco and Leasco to the Agent hereunder shall be payable
in the order and priority set forth in Section 2.01 and 5.02(b), as applicable,
of this Agreement. Such obligations shall be due and payable only to the extent
that Finco's and Leasco's assets are sufficient to pay such obligations. No
claims of the Agent arising under or in connection with this Agreement are
intended to be impaired or waived by this Section 9.15.
SECTION 9.16. Waiver of Set-Off With Respect to Finco and Leasco.
--------------------------------------------------
Each of the Agent, the Depositary, and the Liquidity Agent hereby 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 Finco or Leasco therein or with respect
to any right to payment from Finco or Leasco.
28
<PAGE>
IN WITNESS WHEREOF, Finco, Leasco, the Depositary, the Agent, the
Liquidity Agent and the Dealers have caused this Agreement to be duly executed
by their respective officers all as of the day and year first above written.
FCTR, INC.,
By: /s/ Steven R. Davison
---------------------------------------------
Name: Steven R. Davison
Title: Vice President and Treasurer
RCTR, INC.,
By: /s/ Steven R. Davison
----------------------------------------------
Name: Steven R. Davison
Title: Vice President and Treasurer
CITICORP USA, INC., as Agent
By: /s/ Shapleigh B. Smith
----------------------------------------------
Name: Shapleigh B. Smith
Title:
CITIBANK, N.A.,
as Liquidity Agent and Depositary
By: /s/ Jenny Cheng
----------------------------------------------
Name: Jenny Cheng
Title:
CITICORP SECURITIES, INC.,
as Dealer
By: /s/ Brendan T. Miles
----------------------------------------------
Name: Brendan T. Miles
Title:
LEHMAN BROTHERS INC.,
as Dealer,
By: /s/ Robert Krugel
-----------------------------------------------
Name: Robert Krugel
Title:
29
<PAGE>
Exhibit 10.4
EXECUTION COPY
DEPOSITARY AGREEMENT
August 7, 1997
Citibank, N.A.
120 Wall Street
13th Floor
New York, NY 10043
Attention of Issuer Services
FCTR, Inc. - Commercial Paper
-----------------------------
Ladies and Gentlemen:
This will confirm the arrangements made with you (the "Depositary") by
----------
the undersigned, FCTR, Inc. ("Finco"), whereby you have agreed to act as
depositary for safekeeping of certain short-term promissory notes of Finco (the
"Commercial Paper Notes") and as issuing and paying agent on behalf of Finco in
----------------------
connection with the issuance and payment of the Commercial Paper Notes, and to
undertake certain obligations as described below on behalf of holders, from time
to time (the "Holders"), of the Commercial Paper Notes. The Depositary has
advised the undersigned that it has arranged for The Depository Trust Company
("DTC") to act as its sub-agent for certain purposes of this Agreement.
---
The Commercial Paper Notes will be issued on the terms and subject to
the conditions set forth herein and pursuant to the Liquidity Agreement dated as
of the date hereof among Finco, as Borrower, certain financial institutions as
Liquidity Lenders and Citibank, N.A., as the Liquidity Agent for the Liquidity
Lenders (as such agreement may be amended, supplemented, restated or otherwise
modified from time to time in accordance with its terms, the "Liquidity
---------
Agreement"). All capitalized terms used herein and not otherwise defined herein
- ---------
shall have the meanings set forth for such terms in Annex A to the Liquidity
Agreement.
The Holders of Commercial Paper Notes will be entitled to the benefits
of this Agreement, the Liquidity Agreement and the Collateral Agreement
This Agreement will govern your rights, powers and duties as such
Depositary, issuing and paying agent and, in certain circumstances, as agent
with respect to the Commercial Paper Notes issued pursuant to this Agreement.
No implied covenants shall be read into this Agreement against you. You shall
have no liability to Finco, Leasco, TRS, any Liquidity Lender or any Holder for
the performance of any of the terms of the Liquidity Agreement except as
expressly provided herein.
SECTION 1. Establishment of Accounts; Proceeds of Commercial Paper
-------------------------------------------------------
Notes. For the purposes of this Agreement and the Liquidity Agreement you have
- -----
established, in the name of Finco for the exclusive benefit of the Holders, from
time to time, of the outstanding Commercial Paper Notes, a segregated trust
account at Citibank, N.A. in its corporate trust department, Account No. 102876
(being referred to herein and in the Liquidity Agreement as the
<PAGE>
"Commercial Paper Account") over which you shall have exclusive dominion and
control and the sole right of withdrawal. All proceeds of the sale on any day of
Commercial Paper Notes issued hereunder shall be deposited by you in the
Commercial Paper Account to the extent necessary to provide for the payment of
unpaid matured Commercial Paper Notes or Commercial Paper Notes maturing on such
day, whether or not presented to the Depositary for payment. Provided that no
Amortization Event has occurred, the proceeds in excess of the amount required
to pay unpaid matured Commercial Paper Notes or Commercial Paper Notes maturing
on such day, whether or not presented to the Depositary for payment, shall be
remitted to the Agent on such day. All funds at any time on deposit in the
Commercial Paper Account shall be held in trust by you for the exclusive benefit
of the Holders in accordance with the terms of this Agreement; and no
application shall be made of such funds except to repay advances by you made
pursuant to Section 5 hereof or to pay matured Commercial Paper Notes in
accordance with the terms hereof. Finco shall have no legal, equitable or
beneficial interest in the Commercial Paper Account. You agree to give Finco,
the Liquidity Agent, the Rating Agencies and the Dealers immediate notice if you
receive written notice that the Commercial Paper Account or any funds on deposit
in the Commercial Paper Account have become subject to any stay, writ, judgment,
warrant of attachment, execution or similar process.
SECTION 2. Commercial Paper Notes Delivered for Safekeeping. (a) At
-------------------------------------------------
any time and from time to time during the term of this Agreement Finco may
deliver to your Commercial Paper Unit, Commercial Paper Notes in substantially
the form of Exhibit A to this Agreement (the "Certificated Notes") which shall
------------------
be consecutively numbered and bear such other identification as Finco may deem
appropriate and shall be manually signed or signed in facsimile in such manner
as is acceptable to you on behalf of Finco by an Authorized Representative (as
defined below) of Finco (notwithstanding whether such person shall thereafter
cease to be an Authorized Representative), but shall otherwise be incomplete.
The Depositary shall not have any responsibility to Finco to determine by what
means a facsimile signature may have been affixed to the Commercial Paper Notes
or to determine whether any facsimile signature or manual signature is genuine
or if such facsimile signature or manual signature resembles the specimen
signature on file with the Depositary. Each Commercial Paper Note (including
any Master Note (as defined below)), or group of Commercial Paper Notes at one
time, delivered to you shall be accompanied by a letter from Finco identifying
the Commercial Paper Note or Commercial Paper Notes transmitted therewith, and
you shall acknowledge receipt of such Commercial Paper Note or Commercial Paper
Notes on the copy of such letter or some other form of written receipt deemed
appropriate by you and Finco at the time of delivery to you of such Commercial
Paper Note or Commercial Paper Notes. Pending the issuance of Commercial Paper
Notes as provided in Section 3 hereof, all Commercial Paper Notes delivered to
---------
you shall be held by you for the account of Finco for safekeeping in accordance
with the Depositary's customary practices. Finco shall bear the sole risk of
wastage of Certificated Notes as a result of administrative or operational
errors during the process of their completion pursuant to this Agreement, other
than errors attributable to the Depositary's gross negligence or wilful
misconduct. Finco shall maintain with the Depositary at all times a supply of
Certificated Notes sufficient to enable the Depositary to perform the operations
contemplated by this Agreement. The Depositary shall forward to Finco the
original and all copies of any spoiled, mutilated, or incorrectly completed
Certificated Note, properly canceled.
(b) Prior to the issuance of any Commercial Paper Notes, Finco will
furnish to you, and from time to time hereafter may furnish to you a certificate
substantially in the form of Exhibit B hereto (hereinafter called an "Incumbency
----------
Certificate") of the Secretary or an Assistant Secretary of Finco, identifying
- -----------
and certifying the incumbency and specimen signatures of (i) the officers or
agents ("Authorized Signatories") of Finco authorized to execute Commercial
----------------------
Paper
-2-
<PAGE>
Notes (including the Master Notes) on behalf of Finco, and (ii) the
officers or agents ("Authorized Representatives") of Finco who are otherwise
--------------------------
authorized to act and give instructions and notices on behalf of Finco
hereunder. Until you receive a subsequent Incumbency Certificate, or unless a
Designated Person (as defined below) shall have actual knowledge of the lack of
authority of any individual, you shall be entitled to rely on the last such
Incumbency Certificate delivered to you for purposes of determining Authorized
Signatories and Authorized Representatives.
(c) Prior to the issuance of any Commercial Paper Notes, and from
time to time thereafter as you choose, you shall deliver to Finco a certificate,
substantially in the form of Exhibit C hereto (a "Depositary Authorization
Letter"), of an officer of the Depositary, identifying and certifying the
incumbency and specimen signatures of (i) persons ("Authenticating
Representatives") who are authorized to give receipt for and, in the case of
Certificated Notes, complete, authenticate and deliver Commercial Paper Notes
and (ii) persons ("Designated Persons") who are otherwise authorized to act on
------------------
behalf of the Depositary hereunder and to give and receive notices and
instructions on its behalf hereunder. Until Finco receives a subsequent
Depositary Authorization Letter or written notice from the Depositary to the
contrary, Finco shall be entitled to rely on the last such Depositary
Authorization Letter delivered to Finco for purposes of determining
Authenticating Representatives and Designated Persons.
SECTION 3. Issuance of Commercial Paper Notes. (a) From time to
-----------------------------------
time during the term of this Agreement, and upon your timely receipt of written
(including electronically transmitted writings) or telephonic instructions
(subject to written confirmation, in the case of telephonic instructions, as
provided in paragraph (b) of this Section 3) in respect of any Commercial Paper
-------------
Note, not later than 1:00 p.m. (New York City time) on the date of issuance
thereof from an Authorized Representative, you shall: (i) in the case of
Certificated Notes, withdraw designated Commercial Paper Notes from safekeeping
and, in accordance with the instructions received, take the following action
with respect to each such Certificated Note:
(A) date each such Certificated Note the date of issuance thereof
(which shall be on a Business Day) and insert (x) the maturity date thereof
(which shall be a Business Day and which shall not be later than (1) three
Business Days prior to the earlier of the Scheduled Liquidity Commitment
Termination Date in effect on the date of issuance thereof and (2) the 58th
day following the date of issuance thereof), and (y) the face amount (which
shall be at least $100,000 and an integral multiple of $1,000 thereafter)
thereof in figures, strike the word "Bearer" and insert the name, address
and taxpayer identification number of the payee thereof;
(B) authenticate each such Certificated Note by countersigning it for
authentication in the space provided thereon;
(C) deliver each such Certificated Note to the Dealer specified in
such instructions, or to the applicable Holder if any, designated by such
Dealer for the account of such Dealer against receipt of payment of the
amount set forth in the instructions of Finco delivered in respect thereof
as provided in Section 4 hereof; and
---------
(D) send a copy of each such Certificated Note to Finco, and upon
request therefor, to the Liquidity Agent and the Agent on or promptly
following the date of issuance thereof; and
-3-
<PAGE>
(ii) in the case of Book Entry CP Notes (as defined below), enter an
issuance instruction (a "Book Entry Issuance Instruction") in the Book
-------------------------------
Entry System of DTC in accordance with the Book Entry Procedures (as
defined in Section 6 hereof), which instruction shall provide the issuance
information set forth in clause (i) above with respect to such Book Entry
CP Notes and specify the party to whom such Book Entry CP Notes shall be
issued.
(b) Notwithstanding the foregoing, no Commercial Paper Note shall be
issued hereunder if,
(i) Finco and the Depositary have received instructions then in
effect from the Liquidity Agent (copies of which will also be sent to the
Dealers), given in accordance with Section 2.01 of the Liquidity Agreement
not to issue or deliver Commercial Paper Notes because (1) Finco shall have
terminated the Aggregate Liquidity Commitment pursuant to Section 3.03 of
the Liquidity Agreement, (2) the Aggregate Liquidity Commitment is
otherwise terminated in whole for any reason in accordance with the
Liquidity Agreement, (3) the Commercial Paper Account or any funds on
deposit in, or otherwise to the credit of, the Commercial Paper Account are
or have become subject to any stay, writ, judgment, warrant or attachment,
execution or similar process; provided, however, that if any such stay,
-------- -------
writ, judgment, warrant of attachment, execution or similar process is
removed or dismissed, Finco may recommence the issuance and sale of
Commercial Paper Notes, or (4) any other condition precedent to issuance in
Section 2.02 of the Liquidity Agreement shall not have been met,
(ii) after giving effect to such issuance and the use of the proceeds
thereof, the sum of Aggregate Outstanding CP and the aggregate principal
amount of Liquidity Advances Outstanding (less any amounts on deposit at
such time in the Collateral Account set aside for the repayment of the
principal of Liquidity Advances) would exceed the Aggregate Liquidity
Commitment,
(iii) after giving effect to such issuance and the use of proceeds
thereof, the sum of Aggregate Outstanding CP and the aggregate principal
amount of Liquidity Advances Outstanding (less any amounts on deposit at
such time in the Collateral Account set aside for the repayment of the
principal of Liquidity Advances) would exceed the Borrowing Base,
(iv) such issuance is otherwise prohibited by the Liquidity Agreement
or any other Related Document, or
(v) you shall have received notice that any condition precedent
specified in Section 2.02 of the Liquidity Agreement with respect to such
issuance has not been satisfied.
In this connection the Agent will provide you at the opening of business on each
such day of issuance with a report as to the aggregate principal amount of all
Liquidity Advances Outstanding and interest accrued thereon and the Borrowing
Base or any change in any of such amounts, and satisfaction of the conditions
precedent referred to in clause (v) above, and at the time of delivering or
issuing Commercial Paper Notes you may rely on the last such report so received
in determining the amount of Commercial Paper Notes that may then be issued. In
addition, if the Agent is unable to obtain such information electronically from
the Depositary or the Dealer and the Agent has
-4-
<PAGE>
requested such notification, you shall notify the Agent on each day of the
Outstanding amount of Commercial Paper Notes as reflected by your records. The
Depositary shall make such information electronically or otherwise available to
the Agent and the Liquidity Agent. If any information required to be provided by
the Agent hereunder is not available to the Agent, Finco agrees to provide such
information to the Agent to the extent Finco possesses such information.
(c) No Commercial Paper Note will be authenticated and delivered, and
no Book Entry Issuance Instruction shall be given, by you unless you shall have
received, in your reasonable judgment, complete instructions from an Authorized
Representative as to the matters specified above in clause (i)(A) and, in the
case of Certificated Notes as specified above in clause (i)(C) of paragraph (a)
of this Section 3. Any instructions given to you by an Authorized
Representative to authenticate and deliver Certificated Notes or to enter a Book
Entry Issuance Instruction hereunder shall constitute a representation and
warranty on the part of Finco that the issuance of such Commercial Paper Notes
will not violate or contravene any applicable law, rule, regulation, order or
contractual agreement binding upon Finco (including, as appropriate and without
limitation, any securities law or law pertaining to investment companies or any
other of any court, governmental agency or regulatory authority) and will be in
conformity with the terms of the Liquidity Agreement.
(d) Notwithstanding any instructions received by you from an
Authorized Representative, you shall not deliver Commercial Paper Notes or enter
any Book Entry Issuance Instruction on any date pursuant to such instructions if
a Designated Person shall receive by 9:00 a.m. (New York City time) on such date
instructions from the Liquidity Agent pursuant to Section 2.01(a) of the
Liquidity Agreement instructing the Depositary not to deliver Commercial Paper
Notes or to enter Book Entry Issuance Instructions, which instructions may be
specific with respect to a particular issue of Commercial Paper Notes or may be
general and applicable to all Commercial Paper Notes issued or to be issued
after receipt of such instructions, until such instructions from the Liquidity
Agent are revoked or superseded by further instructions from the party
originally giving the same.
(e) Any telephonic or electronic instructions given to you by an
Authorized Representative shall be confirmed in writing or electronically by
such Authorized Representative within twenty-four hours after the same are
received by you, and you shall incur no liability for acting in accordance with
any such telephonic instructions reasonably believed by you in good faith to
have been given by an Authorized Representative.
SECTION 4. Delivery of Commercial Paper Notes. (a) No Certificated
-----------------------------------
Note shall be delivered by you to any Dealer or the applicable investor except
against payment therefore. A Certificated Note shall be deemed delivered
against payment for purposes of this Section 4 if the net proceeds of such
Certificated Note are received by you in immediately available funds at the time
of your delivery of such Certificated Note to any Dealer or the applicable
Holder or if, at the time you deliver such Certificated Note to such Dealer or
such Holder you receive such Dealer's receipt for the delivery in customary
form. In accordance with the custom in the commercial paper market, delivery of
such receipt shall obligate such Dealer to deliver or cause to be delivered to
you the purchase price of such Certificated Notes in immediately available funds
prior to your close of business on such day. Should you deliver any
Certificated Notes against receipt as provided in the second sentence of this
Section 4 you shall have no responsibility or liability for the credit risks
involved in your delivery of such Certificated Notes to those persons who shall
be designated by an Authorized Representative or for the failure of such persons
to effectuate payment therefore as herein contemplated. It is understood that,
as a matter of bookkeeping convenience, the Depositary
-5-
<PAGE>
may credit the Commercial Paper Account with the proceeds of Commercial Paper
Notes prior to its actual receipt of final payment therefore and that such
bookkeeping credits may be reflected on the Depositary's books, and otherwise,
as "immediately available funds" or "same day funds" or by some other similar
characterization. Notwithstanding any such credit or characterization, all such
credits shall be conditional upon the Depositary's receipt of final payment and
may be reversed by the Depositary to the extent that such final payment is not
received. Finco agrees to indemnify and hold the Depositary harmless from any
loss which the Depositary may incur as a result of the failure of any purchaser
to remit payment in full for any Commercial Paper Notes (other than any loss or
expense resulting from the gross negligence or wilful misconduct of the
Depositary) and, without limiting the generality of the foregoing, Finco agrees
that, immediately upon notification from the Depositary of failure of a
purchaser to remit payment, Finco shall reimburse the Depositary in immediately
available funds any amount credited to Finco in anticipation of receipt of such
payment plus any applicable overdraft fees and interest thereon for each day
such proceeds remain unreimbursed. The overdraft charges and rate of interest
payable by Finco to the Depositary shall be that provided for either (i) under
arrangements with respect to overdraft advances in effect at the time between
Finco and the Depositary or (ii) if no such arrangements are then in effect, in
the Depositary's standard fee schedule for overdrafts.
(b) For purposes of this Section 4, payment for any Commercial Paper
Notes shall not be irrevocable and final until the Depositary shall have
received from or on behalf of the account of the purchaser of such Commercial
Paper Notes immediately available funds which under applicable law and rule are
irreversible, which are not subject to any security interest, levy or other
encumbrance enforceable against the Depositary or Finco, and which are
specifically applicable or determined by the Depositary to be applicable to the
payment of such Commercial Paper Notes. A debit by the Depositary to any
account of a person to whom or for whose account such Commercial Paper Notes
shall have been delivered shall not constitute final payment to the extent that
such debit creates an overdraft or does not otherwise result in the receipt by
the Depositary of immediately available, irreversible and unencumbered funds.
(c) At the close of business on each Business Day on which Commercial
Paper Notes are issued or mature, you shall prepare a written statement
containing, or otherwise make electronically available, the following
information: (i) the aggregate face amount and issue price of all discount
Commercial Paper Notes issued on that Business Day and the principal amount of
and the interest on interest bearing Commercial Paper Notes issued on that
Business Day, which statement shall include the serial number, in the case of
Certificated Notes, or the CUSIP number, in the case of Book Entry CP Notes,
issue date, maturity date and face amount thereof; and (ii) the aggregate face
amount and issue price of all Commercial Paper Notes outstanding and the
aggregate principal amount and the interest rate of all Commercial Paper Notes
outstanding at the close of business on such day. You shall furnish such
information electronically or otherwise to Finco, the Liquidity Agent and the
Agent on that day and at such other times as Finco, the Liquidity Agent or the
Agent may from time to time reasonably request. To the extent that a written
statement is the method of providing information, a copy of each statement
referred to above and each Certificated Note issued shall be sent by you by
either telecopy or overnight delivery service to Finco, the Liquidity Agent and
the Agent at their address specified herein, no later than the following
Business Day.
SECTION 5. Payment of Commercial Paper Notes at Maturity. (a) Each
----------------------------------------------
matured Commercial Paper Note presented to you for payment on any Business Day
prior to the standard window closing time (as established by the rules of the
New York Clearing House Association in effect from time to time) on such
Business Day, shall be paid on the same day in accordance with
-6-
<PAGE>
the provisions of paragraph (b) of this Section 5. Each matured Commercial Paper
Note presented to you for payment on any Business Day after such time shall be
paid on the next succeeding Business Day in accordance with the provisions of
paragraphs (b) and (c) of this Section 5.
(b) You shall pay each matured Commercial Paper Note presented to you
for payment prior to the close of business on any Business Day from funds
available for such payment in the Commercial Paper Account (including funds from
Commercial Paper Notes issued or to be issued on that day). If a Commercial
Paper Deficit exists on any given day on which a Commercial Paper Note is
scheduled to mature by its terms, you shall give notice thereof to the Agent,
not later than 11:15 a.m. (New York City time) on such date, and you shall, and
Finco hereby irrevocably authorizes you to, as attorney-in-fact of Finco, by
delivering a Borrowing Request to the Liquidity Agent or instructing the Agent
to deliver a Borrowing Request to the Liquidity Agent (with a copy to Finco) for
a Borrowing consisting of Refunding Advances, irrevocably request, not later
than 12:00 noon (New York City time) on the date of a proposed Borrowing, that a
Borrowing be made in an aggregate principal amount (subject to the immediately
following sentence) equal to the sum of (i) the excess of (A) the Commercial
Paper Deficit over (B) the sum of the aggregate amount, if any, applied or to be
applied on such Business Day to the Commercial Paper Deficit from amounts
available therefore in the Collateral Account that are designated for payment of
maturing Commercial Paper Notes and (ii) all amounts required to reimburse
yourself for any advances made by you on any matured Commercial Paper Note
pursuant to paragraph (d) of this Section 5. In accordance with and subject to
the terms of the Liquidity Agreement, the proceeds of any Refunding Advance
shall be remitted to the Commercial Paper Account not later than 2:00 p.m. (New
York City time) on the date of the requested Borrowing. You shall apply the
proceeds of any Refunding Advance obtained by you first to reimburse yourself
-----
for any advances made by you on any matured Commercial Paper Note pursuant to
paragraph (d) of this Section 5 and second to the payment of the Commercial
------
Paper Notes in respect of which the Refunding Advances were obtained.
(c) If a Commercial Paper Deficit continues to exist you shall cease
paying matured and maturing Commercial Paper Notes until such time as the Agent
shall instruct you otherwise; it being understood that the purpose of such delay
is to permit an equitable distribution of funds allocated to the Holders
pursuant to the Collateral Agreement to be made pro rata according to the face
amount of all outstanding Commercial Paper Notes (as may be adjusted as
determined by the Agent to compensate Holders for accrued interest to reflect
delay in payment) rather than first to the earliest maturing Commercial Paper
Notes.
(d) If at the time any Commercial Paper Note is presented to you for
payment there are insufficient funds on deposit and available in the Commercial
Paper Account (after giving effect to transfers thereto, if any, from the
Collateral Account and from the Liquidity Banks in the form of Refunding
Advances in accordance with paragraph (b) or (c) of this Section 5) to pay such
Commercial Paper Note in full, you shall be entitled, but not required, to pay
such Commercial Paper Note out of your personal assets before your close of
business that day and you shall thereupon be deemed and treated as the holder of
such Commercial Paper Note and shall be entitled to receive payment for such
Commercial Paper Note (from the proceeds of Refunding Advances or from any other
source available in accordance with the Collateral Agreement for the payment of
Commercial Paper Notes). Finco shall pay you interest, upon your demand, on the
amount paid by you to the holder of such Commercial Paper Note at a rate per
annum equal to your corporate base rate in effect from time to time during the
period from but excluding the date of payment made by you to and including the
day you are reimbursed for such amount. Unless you are reimbursed for
-7-
<PAGE>
such amount by Finco prior to your making demand for payment of such Commercial
Paper Note, you shall promptly make demand for payment of such Commercial Paper
Note.
(e) Certificated Notes paid in full by you shall be canceled and held
by you in safekeeping for disposition in accordance with written instructions to
you by Finco. Unless Finco instructs you otherwise, you shall dispose of such
Certificated Notes in accordance with your usual procedure.
SECTION 6. Book Entry Commercial Paper Notes. (a) Finco may elect
---------------------------------
to make the Commercial Paper Notes eligible for the book entry commercial paper
program of DTC, in which case:
(i) Finco will instruct the Depositary in writing to issue book entry
Commercial Paper Notes ("Book Entry CP Notes") through DTC instead of, or
-------------------
in addition to, issuing certificated Commercial Paper Notes as herein
provided;
(ii) the Depositary will prepare for execution by Finco and the
Depositary DTC's current form Letter of Representations (the "Letter"), a
------
copy of which is attached hereto as Exhibit D;
(iii) Finco will provide to the Depositary for submission with the
Letter a copy of the information memorandum for Finco's commercial paper
program under which the Commercial Paper Notes are issued by the Depositary
pursuant to this Agreement; and
(iv) the Depositary will deliver the Letter to DTC's Legal Department
and will return to Finco a copy of the Letter after it has been received
and accepted by DTC.
The Depositary is authorized and directed to issue and settle through DTC Book
Entry CP Notes in accordance with the applicable rules and procedures
established by DTC and the Depositary for the issuance and settlement of book
entry notes upon receipt by the Depositary of written instructions pursuant to
clause (i) of the immediately preceding sentence. DTC's procedures with respect
- ----------
to the issuance of book entry notes (the "Book Entry Procedures"), among other
---------------------
things, currently provide that issuance of Book Entry CP Notes with a maturity
date on a holiday on which DTC is scheduled to be closed for settlement services
is not acceptable for deposit into DTC's CP Program. In the event there is any
delay in the issuance of Book Entry CP Notes resulting from Finco's instructions
to the Depositary providing for the issuance of Book Entry CP Notes to mature on
DTC holidays, the Depositary shall not be liable to Finco or any beneficial
owner of a Book Entry CP Note. Each Book Entry CP Note issued and distributed
through DTC upon the instruction of a Designated Person from an Authorized
Representative shall constitute Finco's representation and warranty that such
Book Entry CP Note is a legal, valid and binding obligation of Finco.
(b) Once the Commercial Paper Notes have been accepted by DTC for
DTC's commercial paper program and prior to the issuance and distribution of any
Book Entry CP Notes, Finco will deliver (i) the Depositary, as custodian for
DTC, the Master Note certificate (the "Master Note") with respect to Book Entry
-----------
CP Notes issued at a discount from face value to be paid at maturity and with
respect to Book Entry CP Notes issued in interest bearing form (in the form of
Exhibit E hereto), duly executed on behalf of Finco by the manual or facsimile
signature of an Authorized Representative to evidence Book Entry CP Notes to be
issued and distributed through DTC by the Depositary on behalf of Finco (and the
obligation of Finco to provide for provide for payment of such Book Entry CP
Notes at their respective maturities) and (ii) to the
-8-
<PAGE>
Depositary, copies of all agreements entered into by Finco required by DTC for
participation in DTC's book entry commercial paper program. The Depositary shall
record on the schedule attached to the Master Note each change in the face
amount of outstanding Book Entry CP Notes or, in the case of interest bearing
Book Entry CP Notes the principal amount and the interest rate thereon
represented thereby and the maturity dates thereof.
(c) In accordance with DTC's book entry commercial paper program, the
Depositary shall obtain from the CUSIP Service Bureau a written list of CUSIP
numbers for the Book Entry CP Notes that will be issued through DTC as provided
in the Letter, and the Depositary shall deliver such list to DTC. The
Depositary shall instruct the CUSIP Service Bureau to bill Finco for the fee or
fees payable to CUSIP Service Bureau for such list of CUSIP numbers for book
entry Commercial Paper Notes. The CUSIP numbers, as required by DTC's
commercial paper program, will be assigned to Finco's Book Entry CP Notes upon
issuance and used to identify Finco's outstanding Book Entry CP Notes in DTC's
book entry system.
(d) On and after the date when the Commercial Paper Notes become
eligible for DTC's book entry commercial paper program, the Depositary shall
execute all instructions from Finco to issue Commercial Paper Notes by, subject
to the provisions of Section 3 of this Agreement, issuing and delivering only
---------
Book Entry CP Notes through DTC, except where the Depositary has been
specifically instructed in writing by Finco to complete and deliver one or more
Certificated Notes.
(e) In the event and on each occasion that Finco agrees with a Holder
that holds Book Entry CP Notes (a "Book Entry Holder") to prepay such Book Entry
-----------------
Holder's Book Entry CP Notes on deposit with DTC prior to the scheduled maturity
of such Book Entry CP Notes, Finco shall make arrangements with such Book Entry
Holder and the Depositary for the delivery through the DTC system by the DTC
participant holding such Commercial Paper Notes to the Depositary's designated
account at DTC for payment.
(f) Finco may for any reason discontinue its participation in DTC's
book entry commercial paper program with respect to the Commercial Paper Notes
at any time upon not less than ten days' prior written notice to the Depositary
(with copies of such notice to the Dealers). In the event Finco shall
discontinue its participation in DTC's book entry commercial paper program, or
DTC shall discontinue its services with respect to the Book Entry CP Notes,
Finco and the Depositary shall cooperate in taking appropriate action, including
without limitation, if necessary, delivery of one or more Certificated Notes to
any DTC participant having Book Entry CP Notes credited to its DTC account. In
the event of such discontinuance of Finco's participation in DTC's commercial
paper program as herein described, and upon delivery of Certificated Notes in
respect of all Book Entry CP Notes represented by the Master Note, the
Depositary shall destroy such Master Note and provide Finco with a duly executed
certificate of destruction with respect to such Master Note. Upon notice by
Finco to the Depositary of the discontinuance of Finco's participation in DTC's
book entry program with respect to the Commercial Paper Notes in respect of all
Book Entry CP Notes represented by the Master Note, the Depositary shall destroy
such Master Note and provide Finco with a duly executed certificate of
destruction with respect to such Master Note. Notice by Finco to the Depositary
of the discontinuance of Finco's participation in DTC's book entry program with
respect to the Commercial Paper Notes shall not constitute notice of termination
of the Depositary's duties as issuing and paying agent for Certificated Notes
under this Agreement.
(g) All references in this Agreement to "Commercial Paper Notes"
shall apply to and shall include any Book Entry CP Notes issued hereunder by
Finco. Any reference in this
-9-
<PAGE>
Agreement to authentication, completion and delivery of the Commercial Paper
Notes shall, in the context of Book Entry CP Notes, be deemed to mean issuance
of Commercial Paper Notes in accordance with DTC's and the Depositary's rules
and procedures with respect to the Book Entry CP Notes and any reference to
presentation of Commercial Paper Notes for payment shall, in the context of Book
Entry CP Notes, be deemed to mean the procedure undertaken by DTC to make a
demand for payment from Finco (through the Depositary) of matured Book Entry CP
Notes. References in this Agreement to "Holders" of the Commercial Paper Notes
shall, in the context of Book Entry CP Notes, refer to the beneficial owners of
such Book Entry CP Notes, except that in the case of payment of Book Entry CP
Notes by the Depositary, the term "Holder" shall be deemed to refer to Cede &
Co. Upon payment of all outstanding Book Entry CP Notes represented by a Master
Note, and upon request by Finco, the Depositary shall destroy such Master Note,
and provide Finco with a duly executed certificate of destruction with respect
to such Master Note.
SECTION 7. Inspection of Documents by Holders of Commercial Paper
------------------------------------------------------
Notes. You shall keep a fully executed or conformed copy of the Liquidity
- ------
Agreement, the Collateral Agreement and this Agreement (together with all
amendments, modifications, supplements, waivers and consents made or given with
respect thereto), on file at your Corporate Trust Department at Citibank, N.A.,
120 Wall Street, New York, New York 10043. Finco agrees to provide to you a
copy of all such documents promptly following their execution. You shall permit
reasonable inspection to be made of such documents during normal business hours
by any Holder or by any officer, employee or agent of such Holder, provided that
the person purporting to be such Holder establishes to your satisfaction that he
is in fact such Holder and, in cases where inspection is sought to be made by a
person purporting to be an officer, employee or agent of such Holder, that such
person submits evidence satisfactory to you of his authority to make such
inspection on behalf of such Holder.
SECTION 8. Expenses and Indemnity. Finco agrees:
-----------------------
(a) to pay to you from time to time reasonable compensation for all
services rendered by you hereunder, including for the issuance of Book Entry CP
Notes through DTC, and to reimburse you for expenses, disbursements and
advances, in each case as mutually agreed upon;
(b) to indemnify you for, and hold you harmless from and against, any
and all losses (except your loss of profit), liabilities (including liabilities
for penalties), actions, suits, judgments, demands, damages, reasonable out-of-
pocket costs and expenses (including, without limitation, interest and
reasonable attorneys' fees, but excluding costs and expenses attributable solely
to administrative overhead) arising out of, in connection with, or resulting
from, the exercise of your rights and/or the performance of your duties, by you
or by your agents and employees, hereunder; provided, however, that Finco shall
-------- -------
not be liable to indemnify you for, or hold you harmless from, damage, cost and
expense resulting from or attributable to your gross negligence or wilful
misconduct or that of your officers, employees or agents. The foregoing
indemnity includes, but is not limited to, any action taken or omitted to be
taken by you upon telephonic instructions (authorized herein) received by you
from, or believed by you in good faith to have been given by, the proper person
or persons; provided further that any claims arising hereunder shall be limited
by the provisions of Section 20 hereof.
SECTION 9. Representations and Warranties. In addition to any other
-------------------------------
representations and warranties on the part of Finco contained herein, Finco
hereby represents and warrants to you that its entry into this Agreement, and
your appointment by Finco as Depositary and issuing and paying agent and, in
certain circumstances, as agent with respect to the Commercial
-10-
<PAGE>
Paper Notes, have been duly authorized by all necessary corporate action on the
part of Finco and will not violate, breach or contravene any law, rule,
regulation, order, contract or agreement binding upon Finco. In addition, Finco
represents and warrants, and each instruction to issue Commercial Paper Notes
will constitute a representation and warranty, that the issuance of the
Commercial Paper Notes, including, if the Commercial Paper Notes become eligible
for deposit as book entry only in DTC's commercial paper program, the issuance
of Book Entry CP Notes and the execution of any instruments or documents
required by DTC in connection therewith, has been duly and validly authorized by
all necessary corporate action, and that the Commercial Paper Notes, when
completed, countersigned and delivered pursuant hereto, will constitute Finco's
legal, valid and binding obligation and will be in conformity with the terms of
the Liquidity Agreement. You hereby represent and warrant that your acceptance
of your appointment as issuing and paying agent and depositary have been duly
authorized by all necessary action on your part.
SECTION 10. Term and Termination. (a) The term of this Agreement
---------------------
(except for the provisions of Sections 8, 19 and 20 which shall survive
indefinitely and the provisions of Section 17, which shall survive for the
period set forth therein) shall extend from the date hereof and shall end on the
earliest of:
(i) the date on which all Commercial Paper Notes and Liquidity
Advances have been repaid and the Aggregate Liquidity Commitment has
terminated subject to the conditions set forth in paragraph (d) of this
Section 10; and
(ii) the date of termination specified in any termination notice given
pursuant to paragraph (b) of this Section 10.
Any Commercial Paper Notes outstanding on the date of any termination
of this Agreement pursuant to paragraphs (a) or (b) of this Section 10 shall
nevertheless remain valid obligations of Finco, and the provisions of this
Agreement shall continue to be applicable with respect to the payment of such
Commercial Paper Notes to the same extent as if this Agreement had not
terminated.
(b) Either you or Finco may terminate this Agreement and the
authority granted to you herein, at any time upon not less than thirty Business
Days' prior written notice given to the other parties specifying the
termination date hereof (which shall not occur on the date of maturity of any
Commercial Paper Notes nor the Business Day next preceding any such date).
Notwithstanding the preceding sentence, no termination of this Agreement shall
take effect until a successor Depositary has been duly appointed, unless all
outstanding Commercial Paper Notes have been paid in full and no amounts are due
to Holders of Commercial Paper Notes. If no successor Depositary has been
appointed within thirty days of the resignation of the Depositary, the
Depositary may petition a court of competent jurisdiction to appoint a successor
Depositary. No successor Depositary may be appointed, however, if such
appointment shall result in the withdrawal or reduction of any rating assigned
to the Commercial Paper Notes. Upon the termination of this Agreement under
paragraph (a) of this Section or this paragraph (b), you shall promptly deliver
to Finco or your successor, if one is appointed, all Commercial Paper Notes
(including any Master Note) then held by you hereunder for Finco's account for
safekeeping, against receipt by Finco or such successor, and shall cause to be
deposited in the Collateral Account, upon advice to Finco, the Liquidity Agent
and the Agent, all funds, if any, then on deposit in, or otherwise to the credit
of, the Commercial Paper Account.
-11-
<PAGE>
(c) No Commercial Paper Notes shall be delivered to you by Finco for
safekeeping or issuance hereunder nor shall any Certificated Notes be
authenticated or delivered to any Dealer or any holder or any Book Entry
Issuance Instruction be issued by you upon the termination of this Agreement and
the authority granted to you herein.
(d) Notwithstanding any termination of this Agreement, the Depositary
(or the successor Depositary if one has been appointed) shall maintain the
Commercial Paper Account until the earlier of the first anniversary of the date
of termination of this Agreement and the date on which the Commercial Paper
Notes have been paid in full and apply any amounts in the Commercial Paper
Account to repay Commercial Paper Notes as they mature. Pending disbursement of
such amounts to repay maturing Commercial Paper Notes, the Depositary or the
Agent, as the case may be, shall invest such amounts in Eligible Investments
designated in writing by Finco which mature not later than the anticipated date
or dates on which Commercial Paper Notes mature, such written designation to
certify that the requested investment constitutes an Eligible Investment and
matures at the time required by this sentence. Any investment earnings on
Eligible Investments shall be released to Finco after payment in full of all
Commercial Paper Notes Outstanding.
-12-
<PAGE>
SECTION 11. Amendments and Modifications. (a) No amendment,
-----------------------------
modification, termination or waiver of any provision of this Agreement shall be
effective unless (i) the same shall be in writing and signed by all of the
parties hereto and consented to in writing by the Dealers, the Liquidity Agent
and the Agent, and (ii) S&P and Moody's have confirmed in writing that their
respective ratings on the Commercial Paper Notes will not be lowered or
withdrawn as a result of any such amendment, modification, termination or
waiver. No such amendment, modification, termination or waiver shall, as
evidenced by opinion of counsel delivered to the Depositary upon which it may
conclusively rely, adversely affect the rights of the Holder or Holders of any
Commercial Paper Notes outstanding at the time of such amendment, modification,
termination or waiver unless consented to in writing by such Holder or Holders.
(b) Contemporaneously with any amendment, modification, termination
or waiver of any provision of the Liquidity Agreement, the Collateral Agreement
or any other Related Document, Finco shall give notice to you summarizing such
action and shall furnish you with a fully executed and conformed copy of such
amendment, modification, waiver or consent. No amendment of any of the
foregoing agreements which could reasonably be expected to materially adversely
affect your rights, duties or powers hereunder shall be effective against you
without your prior consent.
SECTION 12. Notices. Except where telephonic instructions or notices
--------
are authorized herein to be given, all notices, demands, instructions and other
communications required or permitted to be given to any party hereunder shall be
in writing and addressed, delivered or transmitted to such party at its address
or facsimile number set forth below, or at any other address or facsimile
number, as the case may be, as such party may notify to the other parties hereto
in accordance with the provisions of this Section 12. 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 transmitted upon receipt of
electronic confirmation of transmission.
If to the Depositary:
CITIBANK, N.A.
120 Wall Street
13th Floor
New York, NY 10043
Attention of: Jenny Cheng
Telephone: (212) 412-6185
Telecopier: (212) 480-1615
If to Finco:
FCTR, INC.
1560 Broadway
Suite 1800
Denver, CO 80202
Attention of: General Counsel
Telephone:
Telecopier:
-13-
<PAGE>
If to the Agent:
CITICORP USA, INC.
399 Park Avenue
10th Floor
New York, NY 10043
Attention of:
Telephone:
Telecopier:
If to the Liquidity Agent:
CITIBANK, N.A.
120 Wall Street
13th Floor
New York, NY 10043
Attention of: Jenny Cheng
Telephone: (212) 412-6185
Telecopier: (212) 480-1615
If to the Dealers:
CITICORP SECURITIES, INC.
399 Park Avenue
7th Floor
New York, NY 10043
Attention of: Don Donahue
Telephone:(212) 291-7845
Telecopier:(212) 291-3910
and
LEHMAN BROTHERS INC.
3 World Financial Center
12th Floor
New York, NY 10285
Attention of: Commercial Paper Product Management
Telephone: (212) 526-2069
Telecopier: (212) 528-6925
If to S&P:
STANDARD & POOR'S RATINGS GROUP
26 Broadway, 15th Floor
New York, NY 10004
Attention of Asset Backed Surveillance Department
-14-
<PAGE>
Telephone: (212) 208-8000
Telecopier: (212) 412-0225
If to Moody's:
MOODY'S INVESTORS SERVICE, INC.
99 Church Street
New York, NY 10007
Attention of ABS Monitoring Department
Telephone: (212) 553-0300
Telecopier: (212) 553-4600
SECTION 13. Binding Effect; Assignment. This Agreement shall be
---------------------------
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. No party hereto may assign any of its rights
or obligations hereunder (other than in connection with the appointment of a
successor Depositary under Section 10) except with (i) the prior written consent
of all parties hereto and (ii) the prior written confirmation of S&P and Moody's
that their respective rating of the Commercial Paper Notes will not be lowered
or withdrawn.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
--------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. Execution in Counterparts. This Agreement may be
--------------------------
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute one and the same Agreement. Delivery of an
executed counterpart of a signature page to this Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
of this Agreement.
SECTION 16. Headings. Section headings used in this Agreement are
---------
for convenience only and shall not affect the construction of this Agreement.
SECTION 17. No Petition. You, in your capacity as Depositary hereby
------------
covenant and agree that, prior to the date which is one year and one day after
the payment in full of all outstanding Commercial Paper Notes, you will not
institute against, or join any other Person in instituting against, Finco or
Leasco, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States or
any state of the United States. In the event that you take action in violation
of this Section 17, Finco agrees, for the benefit of the Holders, that it shall
file, or cause Leasco to file, an answer with the bankruptcy court or otherwise
properly contest the filing of such a petition by you against Finco or Leasco or
the commencement of such action and raise the defense that you have 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 17 shall survive the termination of this Agreement,
and your resignation or removal as Depositary and issuing and paying agent.
SECTION 18. Duties and Responsibilities. (a) It is understood that
----------------------------
you are acting as agent of the Holders solely to the extent that you are holding
and applying funds in the
-15-
<PAGE>
Commercial Paper Account, as provided in this Agreement on behalf of the holders
from time to time of the Commercial Paper Notes. Neither you nor any of your
officers, directors, employees or agents shall be liable for any action taken or
omitted to be taken by you or them hereunder except for acts of gross negligence
or wilful misconduct by your officers, employees or agents. Neither the
Depositary nor its officers or employees shall be required to ascertain whether
any issuance or sale of Commercial Paper Notes (or any amendment or termination
of this Agreement) has been duly authorized or is in compliance with any other
agreement to which Finco is a party (whether or not the Depositary is a party to
such other agreement). You undertake to perform such duties and only such duties
as are set forth in this Agreement and no implied covenants shall be read into
this Agreement against you. The Depositary shall also not be liable for any
action taken, or any failure to take any action in connection with this
Agreement or the services provided hereunder or otherwise to fulfill its
obligations in connection with this Agreement, in the event and to the extent
that the taking of such action or such failure arises out of or is caused by
mechanical breakdown, computer or system failure or other failure of equipment,
failure or malfunctioning of any communications media, or any cause outside of
the control of the Depositary, provided that the Depositary undertakes to use
reasonable efforts to cure any such failure or breakdown of the Depositary's
equipment. It is understood by Finco that provision of services under this
Agreement is dependent upon the availability to the Depositary and Finco of
telecommunication facilities provided by third party vendors and that the
Depositary cannot warrant such availability.
(b) You shall incur no liability in acting within the scope of this
Agreement on any notice or instruction, telephonic or written, given hereunder
which a Designated Person believes in good faith to have been given by an
Authorized Representative or by the Liquidity Agent or the Agent; nor shall you
in so acting assume or be deemed to have assumed any responsibility for the
propriety of any transaction effected by you under, or the compliance of any
such transaction with the Liquidity Agreement or any Related Document. Your
countersignature of any Commercial Paper Note shall be for authentication
purposes only and neither you nor any person countersigning on your behalf shall
have any liability on any Commercial Paper Note.
(c) You may rely and shall be protected in acting or refraining from
acting upon any communication authorized by this Agreement and upon any written
instruction, notice, request, direction, consent, report, certificate,
Commercial Paper Note or other instrument, paper or document reasonably believed
by you to be genuine. You shall not be liable for acting upon any telephone
communication authorized by this Agreement which you believe in good faith to
have been given by Finco. You may record telephone communications with Finco.
(d) Anything in this Agreement to the contrary notwithstanding in no
event shall you, or any of your directors, officers, employees or agents, be
liable under this Agreement to Finco or any third party for indirect, special,
punitive, incidental or consequential loss or damage of any kind whatsoever,
including lost profits, whether or not the likelihood of such loss or damage was
known to you, or any such director, officer, employee or agent.
(e) You may consult with counsel and the written advice of such
counsel shall be full and complete authorization and protection in respect of
any action taken, offered or omitted by you hereunder in good faith and in
reliance thereon.
(f) You shall not be required to advance, expend or risk your own
funds or otherwise incur or become exposed to financial liability in the
performance of your duties hereunder, notwithstanding any course of conduct or
practice that you may have engaged in, and no
-16-
<PAGE>
party or any holder of Commercial Paper Notes may rely on the continued
existence of such course of conduct or practice.
(g) You in your individual or any other capacity, may become the
owner or pledgee of Commercial Paper Notes or a participant in the credit
provided under the Liquidity Agreement and may otherwise transact banking or
trust business with any of the parties with the same rights as you would have if
you were not acting hereunder.
(h) Except as otherwise expressly provided herein, whenever, in the
administration of this Agreement, you shall deem it necessary that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate of an Authorized Representative, and such certificate shall be
full warranty to you for any action taken, suffered or omitted under the
provisions of this Agreement to the extent you have in reasonable good faith
relied thereon.
(i) Except as otherwise provided herein, the Depositary may execute
any of the powers hereunder or perform any duties hereunder either directly or
by or through agents, including, without limitation, DTC, or attorneys;
provided, however, that the Depositary shall not be responsible for the acts
- -------- -------
of DTC but shall be responsible for other agents and attorneys selected or
appointed by the Depositary. Finco hereby acknowledges the interest of DTC in
the Commercial Paper Notes and Certificated Notes. The Depositary shall be under
no liability for interest on any moneys received by the depositary hereunder
except as the Depositary may agree with Finco to pay thereon.
SECTION 19. No Recourse. Notwithstanding any other provision of this
------------
Agreement, the obligations of Finco under this Agreement (a) are solely the
corporate obligations of Finco and (b) shall be payable in the order and
priority set forth in Sections 2.01 and 5.02(b), as applicable, of the
Collateral Agreement. Such obligations shall be due and payable to the extent
that Finco's assets are sufficient to pay such obligations, and no recourse
shall be had for the payment of any amount owing in respect to Section 8 hereof
or for the payment of any fee hereunder or any other obligation or claim arising
out of or based upon this Agreement against any Dealer or, except as otherwise
provided under the Related Documents, against any shareholder, employee,
officer, director or incorporator of Finco. For purposes of this Section 19,
the term "Dealer" shall mean and include all Affiliates thereof; provided,
--------
however, that neither the Depositary nor Finco shall be considered to be an
- -------
Affiliate of any Dealer for purposes of this Section 19; provided, further, that
-------- -------
the foregoing shall not relieve any such person or entity from any liability
they might otherwise have as a result of fraudulent action or omissions taken by
them. No claims of the Depositary (whether under the cited provision or
otherwise) arising under or in connection with this Depositary Agreement are
intended to be impaired or waived by this Section 19.
SECTION 20. Merger or Consolidation. Any corporation or other entity
------------------------
into which the Depositary may be merged or consolidated, or any corporation or
other entity resulting from any merger, conversion or consolidation to which the
Depositary shall be a party, or any Person or entity succeeding to the corporate
trust or agency business of the Depositary, shall be the successor of the
Depositary hereunder (without relieving the Depositary of its responsibilities
hereunder if it survives such merger, conversion, consolidation or succession)
without the execution or filing of any paper or any further act on the part of
any party hereto, anything to the contrary notwithstanding; provided, however,
-------- -------
that (a) upon the request of Finco, the Agent or the Liquidity
-17-
<PAGE>
Agent, such corporation, entity or successor shall execute an assumption
agreement providing for the assumption by such corporation, entity or successor
of the rights and obligations of the Depositary in a form reasonably
satisfactory to Finco, the Agent and the Liquidity Agent and (b) the Depositary
shall give the Rating Agencies written notice of such merger, conversion,
consolidation or succession.
SECTION 21. Amortization Event. If the Depositary shall have been
-------------------
notified by Finco, the Liquidity Agent, any Liquidity Lender or the Agent that
an Amortization Event shall have occurred, the Depositary shall notify the
Liquidity Agent and the Agent in writing as soon as possible upon payment in
full of all Outstanding Commercial Paper Notes or the receipt of funds in the
amount required to pay all Outstanding Commercial Paper Notes upon maturity.
SECTION 22. Entire Agreement. This Agreement constitutes the entire
-----------------
understanding among the parties hereto with respect to the Depositary.
SECTION 23. Waiver of Set-Off. The Depositary hereby waives and
------------------
relinquishes any right 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 Finco therein or with respect to any right to payment
from Finco, it being understood, however, that nothing contained in this Section
23 shall, or is intended to, derogate from the assignment and security interest
granted to the Agent under the Collateral Agreement or impair any rights of the
Holders, the Depositary or the Agent thereunder.
SECTION 24. Additional Notice. Finco shall give prompt written
------------------
notice to each Rating Agency if it is required to make a payment hereunder to
the Depositary with respect to increased costs of the Depositary or
indemnification obligations to the Depositary.
SECTION 25. Collateral Agreement. Without limiting the
---------------------
authorizations otherwise set forth in this Agreement, each Holder, by its
purchase of a Commercial Paper Note, hereby authorizes you in your capacity as
Depositary hereunder to execute and deliver the Collateral Agreement, as
Depositary and on behalf of each such Holder.
If the foregoing is acceptable to you, please indicate your agreement
therewith by signing this or a duplicate counterpart of this Agreement in the
space provided below, and returning
-18-
<PAGE>
this or such duplicate signed counterpart to Finco, whereupon this letter will
become a binding agreement between us and you.
FCTR, INC.,
by
/s/ Steven R. Davison
------------------------------------
Name: Steven R. Davison
Title: Vice President and Treasurer
Consented to:
CITIBANK, N.A., as
Depositary
by
/s/ Jenny Cheng
--------------------------------
Name: Jenny Cheng
Title: Assistant Vice President
-19-
<PAGE>
EXHIBIT 10.5
EXECUTION COPY
================================================================================
DEALER AGREEMENT
dated as of August 7, 1997
between
FCTR, INC.,
RCTR, INC.,
CITICORP SECURITIES, INC.
and
LEHMAN BROTHERS INC.
================================================================================
<PAGE>
TABLE OF CONTENTS
1. Certain Definitions .................................................... 1
-------------------
2. Appointed as Dealer .................................................... 1
-------------------
3. Offers, Sales and Resales of the Notes ................................. 2
--------------------------------------
4. Representations and Warranties ......................................... 4
------------------------------
5. Additional Representation and Warranty ................................. 6
--------------------------------------
6. Covenants .............................................................. 6
---------
7. Conditions Precedent to Sale of the Notes .............................. 8
-----------------------------------------
8. Delivery of and Payment for the Notes .................................. 8
-------------------------------------
9. Indemnification ........................................................ 9
---------------
10. Fees and Expenses .................................................... 10
-----------------
11. Notices .............................................................. 10
-------
12. Governing Law......................................................... 12
-------------
13. Jurisdiction.......................................................... 12
------------
14. Choice of Forum....................................................... 12
---------------
15. Amendment and Termination; Successors; Counterparts................... 12
---------------------------------------------------
16. Captions.............................................................. 12
--------
17. Effective Date........................................................ 13
--------------
18. Severability of Provisions............................................ 13
--------------------------
19. Bankruptcy............................................................ 13
----------
20. Limited Recourse...................................................... 13
----------------
21. Entire Agreement...................................................... 13
----------------
22. Assignment............................................................ 13
----------
23. Several Obligations................................................... 13
-------------------
Exhibits
- --------
EXHIBIT A Form of Confidentiality Agreement
<PAGE>
DEALER AGREEMENT, dated as of August 7, 1997 (this
"Agreement"), among FCTR, INC., a Delaware corporation
----------
("Finco"), RCTR, INC., a Delaware corporation ("Leasco"),
CITICORP SECURITIES, INC., a Delaware corporation ("CSI"),
and LEHMAN BROTHERS INC., a Delaware corporation ("LBI", and
together with CSI and any other dealers for Commercial Paper
Notes engaged by Finco from time to time that agree to
become parties to the Collateral Agreement, the "Dealers").
-------
W I T N E S S E T H:
WHEREAS, Finco has requested each Dealer to act as a commercial paper
dealer for Finco's secured notes with maturities of up to 58 days from date of
issue (collectively, the "Notes").
WHEREAS, Notes will be represented by either individual note
certificates in physical form ("Certificated Notes") or a master note (the
------------------
"Master Note") of Finco. Notes represented by a master note shall be referred
- ------------
to herein as "Book-Entry Notes." Certificated Notes shall be issued
substantially in the form of Exhibit A to that certain Depositary Agreement,
dated as of August 7, 1997, between Finco and Citibank, N.A. (as the same may be
from time to time amended, supplemented or otherwise modified and in effect, the
"Depositary Agreement"), while the Master Note shall be issued substantially in
--------------------
the form included in Exhibit E to the Depositary Agreement.
WHEREAS, each Dealer has indicated its willingness to act as dealer
for the Notes, subject to the satisfactory completion of such investigation and
inquiry into Finco's business as each Dealer deems appropriate under the
circumstances.
NOW, THEREFORE, in consideration of the premises, the parties agree as
follows:
1. Certain Definitions. For all purposes of this Agreement, except as
--------------------
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in, or incorporated by reference into, Annex A to that certain
Liquidity Agreement dated as of August 7, 1997 among Finco, certain financial
institutions as Liquidity Lenders and Citibank, N.A., as the Liquidity Agent for
the Liquidity Lenders (as the same may from time to time be amended,
supplemented, or otherwise modified and in effect, the "Liquidity Agreement").
-------------------
2. Appointed as Dealer. (a) Finco hereby appoints the Dealers as
--------------------
dealers for the Notes and acknowledges that the Dealers shall have the right to
assist Finco in the sale or placement of the Notes during the term of this
Agreement. Finco agrees that during the period the Dealers are acting as
Finco's dealers hereunder, Finco shall not directly contact or solicit potential
investors to purchase the Notes. Finco further agrees during such period that
it will not engage any person or party other than the Dealers to assist in the
sale or placement of the Notes unless any such dealer enters into an agreement
with Finco that is in form and substance substantially similar to this
Agreement. Finco further agrees to provide the Dealers with a copy of any such
other agreement immediately following the execution thereof. While the Dealers
shall not have any obligation to purchase, as principal, Notes from Finco, or to
offer or sell any Notes, under any circumstances, and while Finco shall have no
obligation to sell Notes to, or to arrange sales of Notes through, the Dealers,
each Dealer may, from time to time, purchase in its sole discretion Notes, as
principal, from Finco.
<PAGE>
(b) Finco and each Dealer respectively agree that any Notes, the placement
of which a Dealer arranges or which are purchased by a Dealer, shall be placed
or purchased by such Dealer in reliance on the representations, warranties,
covenants and agreements of Finco contained herein or made pursuant hereto and
on the terms and conditions and in the manner provided herein. All transactions
involving the Notes between a Dealer and Finco shall be in accordance with the
generally accepted custom and practice prevailing in the commercial paper market
at such times.
(c) Upon receipt of instructions from Finco, each Dealer will solicit
purchases of such principal amount of the Notes and with such discounts,
interest rates and maturities as Finco and such Dealer shall agree upon from
time to time during the term of this Agreement. Such Dealer shall have no
liability to Finco in the event any such purchase is not consummated for any
reason. Unless otherwise instructed by Finco, each Dealer will communicate to
Finco, orally or in writing, each offer to purchase Notes, other than offers
rejected by such Dealer. Each Dealer shall have the right, in its discretion
reasonably exercised, to reject any proposed purchase of Notes, in whole or in
part.
(d) Finco may instruct any Dealer to suspend solicitation of purchases of
Notes at any time (other than Notes held by any Dealer as principal). Upon
receipt of such instruction, such Dealer will forthwith suspend solicitation
until such time as Finco has advised it that solicitation of purchases may be
resumed.
3. Offers, Sales and Resales of the Notes. (a) All offers and sales
------------------------------------------
of the Notes by Finco shall be effected pursuant to the exemption from the
registration requirements of the Act provided by Section 4(2) thereof, which
exempts transactions by an issuer not involving any public offering. Offers and
sales of the Notes by Finco through the Dealer acting as agent for Finco will be
made in accordance with Rule 506 under the Act. Notes may be resold or
otherwise transferred by the holders thereof only if they are registered under
the Act or if an exemption (including the exemption afforded by Rule 144A) from
the registration requirements of the Act is available; provided, however, that
-------- -------
Finco shall have no obligation under this Agreement to register the Commercial
Paper Notes under the Act and has no intention of doing so at any time in the
future.
(b) The Dealer (only with respect to offers and sales made by it as agent
for Finco and reoffers and subsequent resales or other transfers made by or
through it), and Finco (with respect to subsequent resales or other transfers
made with its approval and not to or through the Dealer or any other dealer for
the Notes or made pursuant to Rule 144A) hereby establish and agree to observe
the following procedures in connection with offers, sales and subsequent resales
or other transfers of the Notes:
(i) Offers and sales of the Notes will be made only to institutional
investors that are reasonably believed to qualify as "accredited investors"
as defined in Rule 501(a)(1), (2) or (3) under the Act (each, an
"Institutional Accredited Investor").
(ii) Resales and other transfers of the Notes will be permitted to be
made only to institutional investors that the Dealer or Finco, as
applicable, reasonably believes to be Institutional Accredited Investors
or, in the case of Notes resold or otherwise transferred pursuant to Rule
144A, to institutional investors that the Dealer or Finco, as applicable,
reasonably believes to qualify as "qualified institutional buyers" as
defined in Rule 144A (each, a "Qualified Institutional Buyer"). Neither
the Dealer nor Finco will be liable to any person or entity for any resales
or other transfers made in violation of the foregoing conditions that are
not made (i) by or through it in the case of a Dealer or (ii) with its
approval in the case of Finco.
<PAGE>
(iii) No general solicitation or general advertising will be used in
connection with the offering of the Notes.
(iv) Each Commercial Paper Note shall contain a legend in
substantially the form set forth on the forms of the Notes attached as
Exhibits A and E to the Depositary Agreement stating that such Note has not
been registered under the Act or any other applicable securities law, that
by its acceptance of the Note the purchaser acknowledges that it is aware
that the seller may rely on an exemption from the provisions of Section 5
of the Act pursuant to Rule 144A, represents that it is an Institutional
Accredited Investor or a Qualified Institutional Buyer and agrees that the
Note is not being acquired with a view to distribution and any resale of
such Note will be made only (i) to or through the Dealer or another person
designated by Finco as a dealer for the Notes to an institutional investor
approved by the Dealer or another such dealer as an Accredited
Institutional Investor or a Qualified Institutional Buyer or (ii) to a
Qualified Institutional Buyer in a transaction made pursuant to Rule 144A
and only in a transaction exempt from registration under the Act.
(v) For so long as any of the Notes are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the Act,
(i) Finco will cause to be provided to any holder of Notes and any
prospective purchaser of the Notes designated by a holder of such Notes,
upon the request of such holder or prospective purchaser, the information
required to be provided to such holder or prospective purchaser by Rule
144A(d)(4) under the Act and (ii) Finco shall update such information from
time to time in order to prevent such information from becoming false or
misleading and Finco will take such other actions as are necessary to
ensure that the safe harbor exemption from the registration requirements of
the Act under Rule 144A is and will be available for resale of the Notes
conducted in accordance with Rule 144A.
(vi) No sale of Notes to any one purchaser will be for less than
$100,000 face amount and no Note will be issued in a smaller face amount.
If the purchaser is a non-bank fiduciary acting on behalf of others, each
person for whom it is acting must purchase at least $100,000 face amount of
the Notes.
(vii) The Notes will bear such interest rates (if interest-bearing), or
will be sold at such discounts from their face amounts, as shall be
mutually agreed to by Finco and the Dealers at the time of each proposed
purchase or placement.
(viii)The Notes will be issued by Finco in the ordinary course of its
business and financial affairs, will have a maturity at the time of
issuance of not more than 58 days (exclusive of days of grace) and will not
contain any provision for automatic "rollover".
(ix) In connection with the offer and sale of the Notes a commercial
paper offering memorandum (as amended or supplemented from time to time and
including the information incorporated therein by reference, the "Offering
Memorandum") relating to Finco and the transactions contemplated by the
Related Documents will be prepared by Finco. Each Dealer shall make a copy
of such Offering Memorandum available to each purchaser or prospective
purchaser of the Notes. The Offering Memorandum will describe, among other
things, (i) the Notes, (ii) the proposed use of proceeds of sales of the
Notes, (iii) the business of Finco, and (iv) the terms of and parties to
the Related Documents. All documents incorporated by reference into the
Offering Memorandum (if any) will be offered to each prospective purchaser
of Notes at no charge. In connection with such Offering Memorandum and to
assist the normal credit review procedures of each Dealer, Finco agrees to
furnish such Dealer with the
<PAGE>
information and reports set forth in Section 8.01 of the Liquidity
Agreement and such other information and reports concerning the business of
Finco, the offering and sale of the Notes and the related transactions as
such Dealer reasonably requests; provided that such Dealer enters into a
--------
confidentiality agreement substantially in the form of Exhibit A attached
hereto (the "Confidentiality Agreement"). Any such information may only be
disclosed by any of the Dealers (i) pursuant to the terms of the
Confidentiality Agreement or (ii) if (A) the party to whom such information
is being disclosed signs a confidentiality agreement substantially similar
to the Confidentiality Agreement, and (B) such disclosure is approved by
Finco.
(x) The Offering Memorandum will not be distributed by any Dealer
unless it is in a form satisfactory to such Dealer and Finco. No Dealer
shall be responsible for any inaccuracy in the Offering Memorandum.
4. Representations and Warranties. (a) Finco represents and warrants
----------------------------------
to each Dealer as of the date hereof and as of each date contemplated by Section
5 hereof that:
(i) Finco (A) has been duly formed and is validly existing as a
corporation in good standing under the laws of the State of Delaware
and (B) has the requisite corporate power and authority to execute and
deliver this Agreement, the Notes, the Depositary Agreement, the Loan
Agreement, the Liquidity Agreement, the Collateral Agreement and any
other Related Documents to which Finco is a party and perform its
obligations hereunder and thereunder and to own its properties and
conduct its business as described in the Offering Memorandum.
(ii) Finco is not in violation of its organic documents and no
Amortization Event, Limited Amortization Event, Loan Event of Default,
Liquidation Event of Default or, to Finco's knowledge, Potential
Amortization Event, Potential Loan Event of Default or Potential
Liquidation Event of Default, has occurred and is continuing. The
execution and delivery of this Agreement and the other Related Documents
and the incurrence of the obligations and consummation of the transactions
herein contemplated will not conflict with, or constitute a breach of or
default under, the certificate of incorporation or by-laws of Finco or
constitute a breach of or default under any contract, indenture, mortgage,
loan agreement or lease, to which Finco is a party or by which Finco may be
bound (which breach or default may reasonably be expected to materially
adversely affect the Noteholders or Finco's ability to perform its
obligations under the Notes and the Related Documents), or any law,
administrative regulation or court decree applicable to Finco.
(iii) Each of this Agreement, the Depositary Agreement and the other
Related Documents to which Finco is a party has been duly authorized,
executed and delivered by Finco and constitutes the legal, valid and
binding obligation of Finco enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency or
other similar laws relating to or affecting generally the enforcement of
creditors' rights or by general equitable principles.
(iv) The Notes have been duly authorized for issuance, offer and sale
as contemplated by this Agreement and, when issued and delivered against
payment of the purchase price therefor, will constitute legal, valid and
binding obligations of Finco enforceable in accordance with their terms,
except as enforcement thereof may be limited by bankruptcy, insolvency, or
other similar laws relating to or affecting generally the enforcement of
creditors' rights or by general equitable principles.
<PAGE>
(v) No consent, approval, authorization, order, registration or
qualification of or with any court or any regulatory authority or other
governmental agency or body (including the SEC) is required for the
issuance, offer or sale of the Notes by Finco in accordance with the terms
of this Agreement and the Depositary Agreement or for the consummation of
the transactions contemplated by this Agreement and the other Related
Documents.
(vi) There are no legal or governmental proceedings pending to which
Finco is a party or of which any property of Finco is the subject, other
than as set forth in the Offering Memorandum or otherwise disclosed in
writing to the Dealers by Finco and other than legal or governmental
proceedings which, in each case, will not have a material adverse effect on
Finco's ability to perform its obligations under the Related Documents; and
to the best of its knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(vii) Finco is not an "investment company", or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(viii)The Notes, when issued in accordance with the terms of this
Agreement and the Depositary Agreement, will be exempt from registration
under the Act pursuant to Section 4(2) thereof.
(ix) When issued in accordance with the Depositary Agreement, the
Notes will rank at least pari passu with all other senior secured
---- -----
indebtedness of Finco.
(x) All representations and warranties of Finco made in the Liquidity
Agreement and any other Related Document to which Finco is a party are true
and correct in all material respects and are repeated herein as though
fully set forth herein.
(xi) The Offering Memorandum does not, and the Offering Memorandum as
supplemented or revised from time to time in accordance with this Agreement
shall not, contain any untrue statement of a material fact, or omit to
state a material fact necessary to make the statements contained therein in
the light of the circumstances under which they were made, not misleading;
provided, however, that this paragraph (xi) shall not apply to any
-------- -------
information contained in the Offering Memorandum relating to any Liquidity
Lender.
(b) Leasco represents and warrants to each Dealer as of the date hereof
and as of each date contemplated by Section 5 hereof that:
(i) Leasco (A) has been duly formed and is validly existing as a
corporation in good standing under the laws of the State of Delaware
and (B) has the requisite corporate power and authority to execute and
deliver this Agreement and each other Related Document to which Leasco
is a party and perform its obligations hereunder and thereunder.
(ii) Each of this Agreement and the other Related Documents to which
Leasco is a party has been duly authorized, executed and delivered by
Leasco and constitutes the legal, valid and binding obligation of Leasco
enforceable in accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency or other similar laws relating to or
affecting generally the enforcement of creditors's rights or by general
equitable principles.
<PAGE>
(iii) All representations and warranties of Leasco made in the Loan
Agreement and any other Related Document to which Leasco is a party are
true and correct in all material respects and are repeated herein as though
fully set forth herein.
5. Additional Representation and Warranty. Each acceptance by Finco
------------------------------------------
of an offer for the purchase of Notes shall be deemed an affirmation by each of
Finco and Leasco that:
(i) the representations and warranties of Finco and Leasco, as the
case may be, set forth in Section 4 hereof are true and correct at the time
of such acceptance in all material respects (except to the extent such
representations and warranties related solely to an earlier date, in which
case such representations and warranties were true and correct as of such
earlier date), and an undertaking that such representations and warranties
will be true and correct in all material respects at the time of delivery,
to the purchaser or its agent of the Note or Notes relating to such
acceptance, as though made at and as of such time (it being understood that
insofar as such representations and warranties relate to the Offering
Memorandum, such representations and warranties shall relate to the
Offering Memorandum delivered to prospective purchasers of Notes at the
time of such acceptance and at the time of such delivery of the Note or
Notes relating to such acceptance, respectively);
(ii) the conditions precedent to the issuance of the Notes set forth
in the Related Documents have been fulfilled and such Notes are entitled to
the benefits of the Liquidity Agreement and the Collateral Agreement;
(iii)the representations and warranties of Finco, Leasco and, to the
best knowledge of Finco and Leasco, TRS, as the case may be, set forth in
the Related Documents are true and correct in all material respects on and
as of such date as if made on and as of such date (except to the extent
such representations and warranties relate solely to an earlier date, in
which case such representations and warranties were true and correct as of
such earlier date); and
(iv) each of Finco, Leasco and, to the best knowledge of Finco and
Leasco, TRS has performed all covenants and agreements contained in this
Agreement and the Related Documents required to be performed by it on or
prior to such date.
6. Covenants. (a) Finco will supply to each Dealer, on a continuing
-------------
basis, copies of all correspondence with, and information that Finco makes
available to, Standard & Poor's Ratings Group, a division of McGraw Hill, Inc.
("S&P) and Moody's Investors Service, Inc. ("Moody's"), in connection with the
transactions contemplated hereby and by the Related Documents.
(b) Finco will supply to each Dealer, on a continuing basis, three (3)
copies of all audited annual reports and all unaudited interim reports required
to be supplied to Finco by Leasco pursuant to the Loan Agreement.
(c) Pursuant to the Depositary Agreement, Finco will maintain a segregated
trust account in the corporate trust department at the Depositary into which all
of the proceeds of the sale of the Notes (net of commissions) will be deposited
by the Depositary. Only (i) the net proceeds of the sale of the Notes and (ii)
such funds as, together with the proceeds of the Notes, shall be necessary to
make all payments in respect of the Notes, shall be deposited in such account,
which shall be maintained at the Depositary separate and apart from any other
account, but which may be subdivided into separate sub-accounts for bookkeeping
purposes.
<PAGE>
(d) Finco will not use the proceeds of Notes purchased and held by a
Dealer, as principal, for the purchase or carrying of securities to the extent
that such use would result in a violation of Regulations G, T, U or X
promulgated by the Board.
(e) Without the prior written consent of each Dealer, Finco will not
permit to become effective (i) any amendment, supplement, rider, waiver,
termination, or consent to or under any Note, the Depositary Agreement or any
other Related Document to which it is a party which might adversely affect the
interests of the holder of any Notes then outstanding (provided that an
--------
amendment, supplement, rider, waiver, termination, or consent relating to a
change in the rating to "A-2" by S&P and "Prime-2" by Moody's shall become
effective without the prior written consent of each Dealer; provided, further,
-------- -------
that each Dealer is given 60 days prior written notice), or (ii) the assignment
of Finco's, Leasco's or TRS's rights under any Related Document. Finco will
give the Dealers written notice of any such proposed amendment, supplement,
rider, waiver, termination, consent or assignment at least ten days prior to the
effective date thereof, and will furnish prior notice to the Dealers of any
proposed resignation, termination or replacement of the Depositary. Finco
agrees promptly to provide each of the Dealers with copies of any amendment,
supplement, rider, waiver, termination, or consent to or under any Note, the
Depositary Agreement or any other Related Document.
(f) Finco will immediately notify each Dealer of any downgrade of which it
has knowledge, or notice received by Finco of a potential downgrade, in the
rating of the Notes, in any event prior to any subsequent issuance of Notes, and
will promptly send to each Dealer a copy of any notice or letter to that effect
from S&P or Moody's.
(g) Finco will use good faith efforts to arrange for the qualification of
the Notes for sale under the State securities or "blue sky" laws of such
jurisdictions in the United states as any Dealer may reasonably request and will
maintain such qualification in effect as long as required for the distribution
of the Notes; provided, however, that Finco shall not be required to so qualify
-------- -------
to the extent that, as a result of such qualification, Finco would become
subject to service of process or franchise taxation as a foreign corporation in
any jurisdiction where it was not theretofore so subject.
(h) (i) Other than with respect to information therein relating the
Liquidity Lenders Finco agrees to update the Offering Memorandum as necessary so
that at the time of each sale of Notes, the Offering Memorandum, as so updated,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, (ii) each of Finco and
Leasco shall promptly inform the Dealers if any event occurs or condition exists
which makes it necessary to revise, amend or supplement the Offering Memorandum
in order that the Offering Memorandum will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, (iii) Finco will not at any time amend the Offering Memorandum
so as to include any information with respect to any Liquidity Lender except for
such Liquidity Lender's name and related ratings and (iv) Finco will not at any
time amend the Offering Memorandum so as to include "financial statements" of
Finco as a part of such Offering Memorandum; provided, however, that prior to
-------- -------
any offer or sale of Notes, each Dealer shall, with the cooperation and consent
of Finco, have the right to make such reasonable due diligence investigation of
the business of Finco, Leasco and TRS as is usual in the course of continuous
offerings of debt instruments.
<PAGE>
(i) Finco will, promptly upon receiving notice thereof or obtaining actual
knowledge thereof, notify the Dealers upon the occurrence of any Amortization
Event, Potential Amortization Event, Limited Amortization Event or Potential
Limited Amortization Event.
(j) Finco will provide each Dealer with each notice or copy of notice
required to be provided by Finco to the Dealers under this Agreement or any
other Related Document.
(k) For the period commencing on the date hereof and ending the date that
is one year and one day after the date upon which all Notes are paid in full,
Finco agrees that each of the Related Documents and each contract to which Finco
is or will be a party (other than contracts for trade payables or contracts
arising in connection with other ordinary operating expenditures) shall include
a provision pursuant to which each party thereto shall agree that, prior to the
close of such period, it will not institute against, or join any other person in
instituting against, Finco any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or other proceeding under any bankruptcy
or similar law.
(l) Finco will not, without the prior written consent of the Dealers
(which consent shall not be unreasonably withheld), amend the Offering
Memorandum to include any information with respect to any Liquidity Lender.
(m) Finco will, promptly upon receiving notice thereof or obtaining actual
knowledge thereof, notify the Dealers if at any time the Notes are no longer
eligible for transfer pursuant to Rule 144A of the Act.
7. Conditions Precedent to Sale of the Notes. (a) Prior to the initial
-------------------------------------------
sale of Notes hereunder, Finco shall cause to be delivered to each Dealer (i)
written opinions of counsel to Finco, Leasco and TRS substantially in the form
of Exhibits M-1, M-2 and N to the Liquidity Agreement, (ii) a certificate of the
Secretary or other appropriate officer of each of Finco, Leasco and TRS
certifying true copies of the resolutions of Finco, Leasco and TRS,
respectively, approving this Agreement and each other Related Document and the
transactions contemplated hereby and thereby and certifying the incumbency,
authority and true signatures of the officers of Finco, respectively, authorized
to sign this Agreement and each other Related Document to which Finco, Leasco or
TRS is a party, (iii) an original executed copy, photocopy or conformed copy of
each Related Document, which shall be in form and substance reasonably
acceptable to each Dealer, (iv) the letters from the Rating Agencies regarding
the ratings described in paragraph (b) and (v) a certified copy of Finco's
certificate of incorporation and its by-laws.
(b) Prior to the initial sale of any Notes hereunder, such Notes have been
rated at least "A-1" by S&P and "Prime-1" by Moody's and the Notes shall be
rated so by each of S&P and Moody's upon each subsequent sale of Notes hereunder
or shall be rated such other rating as may be acceptable to the Dealers;
provided that the Dealers hereby agree that a rating of A-2 by S&P and Prime-2
- --------
by Moody's is acceptable if such rating results solely from a downgrading of any
Liquidity Lender.
(c) It will be a condition precedent to the initial issuance of any Notes
and each subsequent issuance of Notes that the issuance of such Notes will not
cause Finco to have a negative net worth.
8. Delivery of and Payment for the Notes. (a) On the date of a
---------------------------------------
proposed issuance of Notes, Finco shall confer with one or more Dealers as to
the face or principal amount, maturities and
<PAGE>
denominations thereof, the applicable interest rates or the discounts from the
face amounts, at which the Notes are to be issued.
(b) When agreement is reached on the foregoing, (i) if the Notes are
evidenced by Certificated Notes, Finco will instruct the Depositary to deliver
executed and countersigned Certificated Notes to (ii) if such Notes are to be
placed by CSI, to Citicorp, N.A., 30 Exchange Place, Level C, New York New York
10043, Attention: Anton, and (b) if such Notes are to be placed by LBI, to The
Chase Manhattan Bank (for the account of LBI), Four New York Plaza, Ground
Floor, New York, New York 10004, in each case, prior to 2:15 p.m., New York City
time, on the date of issuance and (iii) if the Notes are Book-Entry Notes, the
issuance of and payment for such Notes will be governed by a letter agreement
among Finco, the Depositary and The Depository Trust Company, dated as of the
Closing Date (as amended, supplemented or otherwise modified and in effect, the
"DTC Representation Letter").
(c) Following a Dealer's receipt of duly and properly completed
Certificated Notes, such Dealer or its agent will transfer by the close of
business on such day immediately available funds to the Depositary or to such
other bank as may be designated in writing by Finco to such Dealer in an amount
equal to the net proceeds of the Certificated Notes.
(d) On any date on which Notes are to be sold hereunder, each Dealer shall
notify the Depositary by 11:00 a.m. (New York City time) on such day of the
amount of Notes placed by such Dealer by that time on such day.
(e) On any date on which Notes are to be issued hereunder, each Dealer
shall inform the Depositary as soon as practicable but not later than 11:00
a.m., New York City time on any day on which such Dealer believes it will be
unable to place Notes.
9. Indemnification. Finco agrees to assume liability for and to
-----------------
indemnify, protect, save and hold harmless each Dealer, each Person controlling
such Dealer within the meaning of the Act, or any affiliate of any such Person
or a Dealer and their respective officers, directors, shareholders, partners,
servants, trustees, employees and agents (all of such indemnified entities
hereinafter the "Indemnitees") from and against any and all losses, liabilities,
claims, damages, penalties, causes of action, suits, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) or
judgments of whatever kind and nature, imposed upon, incurred by or asserted
against the Indemnitees, which are (x) based upon or arising under the
securities laws of the United States of America or of any state and any
regulation, rule or interpretation thereunder or thereof to the extent arising
from the transactions contemplated hereby, (y) based upon the inaccuracy of any
material representation or warranty made or reaffirmed by Finco or Leasco or the
breach of any material agreement or material covenant of Finco or Leasco
contained herein or (z) based upon any untrue statement or alleged untrue
statement of a material fact in the Offering Memorandum, or the omission or
alleged omission (except with respect to omitted information regarding Liquidity
Lenders) from the Offering Memorandum of a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. In the case that any claim, suit, action, investigation,
litigation or other proceeding is brought against any Indemnitee and such
Indemnitee notifies Finco of the commencement thereof, Finco will be entitled to
participate therein, and, to the extent that Finco may elect by written notice
delivered to the Indemnitee, to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnitee; provided that if the defendants in
--------
any such claim, suit, action, investigation, litigation or other proceeding
include both the Indemnitee and Finco and the Indemnitee shall have concluded
that there may be legal defenses available to it which are different from or
additional to those available to Finco, the Indemnitee shall
<PAGE>
have the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such Proceeding on behalf of such
Indemnitee. Upon receipt of notice from Finco to such Indemnitee of Finco's
election so to assume the defense of such claim, suit, action, investigation,
litigation or other proceeding and approval by the Indemnitee, Finco will not be
liable to such Indemnitee for expenses incurred by the Indemnitee in connection
with the defense thereof (other than reasonable costs of investigation) unless
(i) the Indemnitee shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that Finco shall not be liable for the
expenses of more than one separate counsel representing the Indemnitees who are
parties to such claim, suit, action, investigation, litigation or other
proceeding), (ii) Finco shall not have employed counsel reasonably satisfactory
to the Indemnitee to represent the Indemnitee within a reasonable time after
notice of commencement of the claim, suit, action, investigation, litigation or
other proceeding or (iii) Finco has authorized in writing the employment of
counsel for the Indemnitee or (iv) a conflict or potential conflict exists
(based upon written advice of counsel to the Indemnitee) between the Indemnitee
and the Company (in which case the Company will not have the right to direct the
defense of such action on behalf to the Indemnitee), in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the Company. Finco agrees that, without any Indemnitee's prior
written consent, it will not settle, compromise or consent to the entry of any
judgment in any claim, suit, action, investigation, litigation or other
proceeding in respect of which indemnification may be sought under the
indemnification provision of this Agreement (whether or not such Indemnitee is
an actual or potential party to such claim, suit, action, investigation,
litigation or other proceeding), unless such settlement, compromise or consent
includes an unconditional release of each Indemnitee from all liability arising
out of such claim, suit, action, investigation, litigation or other proceeding.
The foregoing indemnities will also extend to any supplemental
material subsequently furnished in writing to any Dealer by Finco, Leasco or TRS
for distribution to purchasers or prospective purchasers during the term of this
Agreement.
In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 9 is for
any reason held unavailable (otherwise than in accordance with the terms of this
Section 9), Finco and Leasco on the one hand, and any Indemnitee, on the other
hand, sought to be charged with any liability shall contribute to the aggregate
costs of satisfying such liability in the proportion of their respective
economic interests. For purposes of this Section 9, the "economic interests" of
Finco and Leasco shall be equal to the aggregate proceeds of the Notes issued in
connection with this Agreement received by Finco and the "economic interest" of
any Indemnitee shall be equal to the aggregate commissions and fees earned
hereunder by the Dealer affiliated with such Indemnitee.
The obligations of Finco under this Section 9 shall survive any
termination of this Agreement, in whole or in part.
10. Fees and Expenses. The Dealers shall be entitled to compensation in
-------------------
the amounts mutually agreed upon (orally or in writing) between Finco and each
of the Dealers from time to time. Finco shall reimburse each Dealer for all of
such Dealer's reasonable out-of-pocket expenses related to the printing and
distribution of any Offering Memorandum and any advertising expenses and the
reasonable fees and disbursements of its counsel in connection with the review
and negotiation of this Agreement and the Related Documents.
11. Notices. Unless otherwise indicated, all notices required under the
---------
terms and provisions hereof shall be in writing, either delivered by hand, by
mail (postage prepaid), or by telex,
<PAGE>
telecopier or telegram, and any such notice shall be effective when received at
the address specified below.
If to Finco:
FCTR, INC.
1560 Broadway
Suite 1800
Denver, CO 80202
Attention of: General Counsel
Telephone No.: (303) 376-0040
Facsimile No.: (303) 376-7050
If to Leasco:
RCTR, INC.
1560 Broadway
Suite 1800
Denver, CO 80202
Attention of: General Counsel
Telephone No.: (303) 376-0040
Facsimile No.: (303) 376-7050
If to the Dealers:
CITICORP SECURITIES, INC.
399 Park Avenue
New York, New York 10043
Attention of: Don Donahue
Telephone No.: (212) 291-7845
Facsimile No.: (212) 291-3910
and
LEHMAN BROTHERS INC.
3 World Financial Center
12th Floor
New York, New York 10285
Attention of: Commercial Paper Product Management
Telephone No.: (212) 526-2069
Facsimile No.: (212) 528-6925
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 11 to the other party
hereto.
<PAGE>
12. Governing Law. THIS AGREEMENT AND EACH NOTE SHALL BE GOVERNED BY,
---------------
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
13. Jurisdiction. Each of Finco and Leasco irrevocably agrees, for the
--------------
benefit of the holders of Notes and each Dealer, that any legal action, suit or
proceeding against it arising out of this Agreement may be brought in the United
States District Court for the Southern District of New York or in the courts of
the State of New York and hereby irrevocably accepts and submits to the
nonexclusive jurisdiction of each of the aforesaid courts in personam, generally
and unconditionally with respect to any action, suit or proceeding for itself
and in respect of its properties, assets and revenues. Each of Finco and Leasco
designates CT Corporation System with offices at 1633 Broadway, New York, NY
10019 as its agent to receive, accept and acknowledge on its behalf, service of
any legal process, summons, notices and documents which may be served in any
such action, suit or proceeding brought in the United States District Court for
the Southern District of New York or in the courts of the State of New York
which may be made on such agent in accordance with legal procedures prescribed
for such courts. If for any reason such agent shall cease to be available to
act as such, Finco and Leasco agree to designate a new agent in The City of New
York satisfactory to each Dealer. Each of Finco and Leasco further irrevocably
agrees to the service of any legal process, summons, notices and documents out
of any of the aforesaid courts by mailing copies thereof by registered or
certified air mail, postage prepaid, to it at its address designated pursuant to
this Agreement. Nothing herein shall in any way be deemed to limit the ability
of the holder of any Notes or any Dealer, to serve any such legal process,
summons, notices and documents in any other manner, as may be permitted by
applicable law or to obtain jurisdiction over Finco or Leasco, or bring actions,
suits or proceedings against Finco or Leasco in such other jurisdictions, and in
such manner, as may be permitted by applicable law.
14. Choice of Forum. Each of Finco and Leasco agrees that any suit,
-----------------
action or proceeding brought by Finco or Leasco against any Dealer in connection
with or arising out of this Agreement, any agreement, instrument or document
entered into in connection with this Agreement or the offer and sale of Notes
shall be brought solely in either the United States Federal courts located in
the Borough of Manhattan, The City of New York or in the courts of the State of
New York located in the Borough of Manhattan, The City of New York.
15. Amendment and Termination; Successors; Counterparts. (a) The terms
-----------------------------------------------------
of this Agreement shall not be waived, altered, modified, amended or
supplemented in any manner whatsoever except by written instrument signed by all
parties hereto. Finco may terminate this Agreement as to all parties or as to
one or more Dealers, or a Dealer may terminate this Agreement as to itself only
upon 30 days prior written notice to each other party hereto; provided that such
--------
termination shall not affect the obligations of the parties hereunder with
respect to Notes outstanding at the time of such termination and actions or
events occurring prior to such termination or with respect to Section 9, 10, 19,
20 or 22 hereof.
(b) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
(c) This Agreement may be executed in several counterparts, each of which
shall be deemed an original hereof.
16. Captions. The captions in this Agreement are for convenience of
----------
reference only and shall not define or limit any of the terms or provisions
hereof.
<PAGE>
17. Effective Date. This Agreement shall be effective as of the date
----------------
and year first above written.
18. Severability of Provisions. Any provision of this Agreement which is
----------------------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability, without
invalidating the remaining provisions hereof or affecting the validity or
enforceability, of such provision in any other jurisdiction.
19. Bankruptcy. Each Dealer agrees that it will not institute against,
------------
or join any person in instituting against, Finco, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or other
similar proceeding under the laws of any jurisdiction, for one year and a day
after the latest maturing Note of Finco is paid in full. The agreement of each
Dealer under this Section 19 shall survive termination of this Agreement.
20. Limited Recourse. Notwithstanding anything to the contrary contained
------------------
in this Agreement, and to the extent of funds available therefor pursuant to
Section 2.01 or 5.02(b), as applicable, of the Collateral Agreement, the
obligations of Finco under this Agreement shall be payable solely to the extent
of funds received by Finco in accordance with the Loan Agreement and such
obligations shall constitute a claim upon Finco only to the extent of such funds
actually received by Finco and available to satisfy such claim. No recourse
shall be had for the payment of any amount owing hereunder or for the payment of
any fee hereunder or any other obligation or claim arising out of or based upon
this Agreement against any stockholder, employee, officer, director or
incorporator of Finco; provided, however, that the foregoing shall not relieve
-------- -------
any such person or entity from any liability they might otherwise have as a
result of fraudulent actions or omissions taken by them. The agreement of each
Dealer under this Section 20 shall survive termination of this Agreement.
21. Entire Agreement. This Agreement constitutes the entire agreement
------------------
among the parties hereto with respect to the matters covered hereby and
supersedes all prior agreements and understandings among the parties.
22. Assignment. This Agreement may not be assigned by Finco or Leasco
------------
without the prior consent of the Dealers and any such assignment without such
consent shall be null and void. This Agreement may be assigned or transferred
by any of the Dealers to any affiliate of such Dealer upon at least 30 days
prior written notice to Finco; provided that the Dealer shall remain liable and
--------
responsible for its duties and obligations hereunder not theretofor fulfilled.
23. Several Obligations. Each of Finco and Leasco acknowledges that the
---------------------
Dealers are acting severally under this Agreement, and not jointly, and no
Dealer shall have any responsibility whatsoever for any purchase commitment or
other undertaking made by any other Dealer hereunder.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
FCTR, INC.,
by /s/ Steven R. Davison
----------------------
Name: Steven R. Davison
Title: Vice President and Treasurer
RCTR, INC.,
by /s/ Steven R. Davison
----------------------
Name: Steven R. Davison
Title: Vice President and Treasurer
CITICORP SECURITIES, INC.,
as dealer
by /s/ Donald J. Donahue, Jr.
---------------------------
Name: Donald J. Donahue, Jr.
Title: Vice President
LEHMAN BROTHERS INC.,
as dealer
by /s/ Robert Krugel
------------------
Name: Robert Krugel
Title:
