<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 1997
REGISTRATION NO. 333-39661
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 7514 73-1356520
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
5330 EAST 31ST STREET
TULSA, OKLAHOMA 74135
(918) 660-7700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
STEVEN B. HILDEBRAND
VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
5330 EAST 31ST STREET
TULSA, OKLAHOMA 74135
(918) 660-7700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
WITH COPIES TO:
<TABLE>
<S> <C> <C>
PAUL H. WILSON, JR., ESQ. STEPHEN W. RAY, ESQ. STEPHEN H. SHALEN, ESQ.
DEBEVOISE & PLIMPTON HALL, ESTILL, HARDWICK, GABLE, CLEARY, GOTTLIEB, STEEN &
875 THIRD AVENUE GOLDEN & NELSON HAMILTON
NEW YORK, NEW YORK 10022 320 SOUTH BOSTON AVENUE ONE LIBERTY PLAZA
(212) 909-6000 SUITE 400 NEW YORK, NEW YORK 10006
TULSA, OKLAHOMA 74103 (212) 225-2000
(918) 594-0400
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses expected to be incurred in
connection with the issuance and distribution of the common stock registered
hereby, all of which expenses, except for the Commission registration fee, the
New York Stock Exchange listing fee and the NASD filing fee, are estimates:
<TABLE>
<CAPTION>
DESCRIPTION AMOUNT
- -------------------------------------------------------------------------------- ----------
<S> <C>
SEC registration fee............................................................ $ 172,500
New York Stock Exchange listing fee and expenses................................ 157,653
NASD filing fee................................................................. 30,500
Blue Sky fees and expenses (including legal fees)............................... 5,000
Printing and engraving expenses................................................. 275,000
Legal fees and expenses (other than Blue Sky)................................... 850,000
Accounting fees and expenses.................................................... 800,000
Transfer Agent and Registrar's fee.............................................. 20,000
Miscellaneous................................................................... 189,347
----------
Total...................................................................... $2,500,000
=========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware ("GCL")
provides that a corporation has the power to indemnify any director or officer,
or former director or officer, who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) against expenses (including attorney's
fees), judgments, fines or amounts paid in settlement actually and reasonably
incurred by them in connection with the defense of any action by reason of being
or having been directors or officers, if such person shall have acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceedings, provided that such person had no reasonable cause to believe his
conduct was unlawful, except that, if such action shall be in the right of the
corporation, no such indemnification shall be provided as to any claim, issue or
matter as to which such person shall have been judged to have been liable to the
corporation unless and to the extent that the Court of Chancery of the State of
Delaware, or any court in which such suit or action was brought, shall determine
upon application that, in view of all of the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as such
court shall deem proper.
As permitted by Section 102(b)(7) of the GCL, the Certificate of
Incorporation of the Company (filed herewith as Exhibit 3.1) (the "Certificate
of Incorporation") contains a provision to limit the personal liability of
directors of the Company for violations of their fiduciary duty. This provision
eliminates each director's liability for monetary damages for breach of
fiduciary duty as a director, except to the extent such exemption from liability
or limitation thereof is not permitted by the GCL as in effect from time to
time.
The Certificate of Incorporation requires the Company to indemnify its
directors and officers to the fullest extent permitted by the GCL, and requires
the Company, in the case of officers and directors, to advance or reimburse
litigation expenses upon submission by the director or officer of an undertaking
to repay such advances or reimbursements if it is ultimately determined that
indemnification is not available to such director or officer pursuant to the
Certificate of Incorporation. The Company also has insurance policies against
certain liabilities asserted against its directors and officers in their
capacities as such.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
None.
II-1
<PAGE> 3
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits. See Exhibit Index following the Appendix to this registration
statement.
(b) Financial Statement Schedules. See Schedule II, Valuation and
Qualifying Accounts, and related Independent Auditors' Report, following the
Exhibit Index. All other schedules are omitted because the information is not
required or because the information is included in the Consolidated Financial
Statements or Notes thereto.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) To provide to the underwriters at the closing specified in the
underwriting agreements, certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery to each
purchaser.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions described under
Item 14 above, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(c) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Act shall be deemed to be part of this registration statement as of
the time it was declared effective.
(d) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-2
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused Amendment No. 2 to the registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, New York, on December 15, 1997.
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
By: /s/ STEVEN B. HILDEBRAND
------------------------------------
Name: Steven B. Hildebrand
Title: Vice President, Chief
Financial Officer and
Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ----------------------------------- ------------------------------------- ------------------
<C> <S> <C>
/s/ JOSEPH E. CAPPY Chairman of the Board, Chief December 15, 1997
- ----------------------------------- Executive Officer, President and
Joseph E. Cappy Director (Principal Executive
Officer)
/s/ DONALD M. HIMELFARB Executive Vice President and Director December 15, 1997
- -----------------------------------
Donald M. Himelfarb
/s/ GARY L. PAXTON Executive Vice President and Director December 15, 1997
- -----------------------------------
Gary L. Paxton
/s/ STEVEN B. HILDEBRAND Vice President, Chief Financial December 15, 1997
- ----------------------------------- Officer and Treasurer (Principal
Steven B. Hildebrand Financial Officer and Principal
Accounting Officer)
/s/ THOMAS P. CAPO Director December 15, 1997
- -----------------------------------
Thomas P. Capo
/s/ EDWARD J. HOGAN Director December 15, 1997
- -----------------------------------
Edward J. Hogan
/s/ EDWARD C. LUMLEY Director December 15, 1997
- -----------------------------------
Edward C. Lumley
/s/ JOHN C. POPE Director December 15, 1997
- -----------------------------------
John C. Pope
/s/ JOHN P. TIENEY Director December 15, 1997
- -----------------------------------
John P. Tieney
/s/ EDWARD L. WAX Director December 15, 1997
- -----------------------------------
Edward L. Wax
*By: /s/ STEVEN B. HILDEBRAND Attorney-In-Fact
- -----------------------------------
Steven B. Hildebrand
</TABLE>
<PAGE> 5
APPENDIX DESCRIBING GRAPHIC MATERIAL
PURSUANT TO RULE 304 OF REGULATION S-T
INSIDE FRONT COVER
Photo at top: Dollar advertisement depicting actor Chevy Chase.
Photo at bottom left: Thrifty advertisement depicting vacation destinations and
Thrifty location.
Photo at bottom right: Thrifty advertisement depicting Chrysler vehicles.
INSIDE BACK COVER
Photo at top left: Dollar counter at Orlando Sanford International Airport.
Photo at top right: Dollar location at Newark International Airport.
Photo at bottom left: Thrifty counter at Tulsa International Airport.
Photo at bottom right: Thrifty location at Memphis International Airport.
II-4
<PAGE> 6
EXHIBIT INDEX
The Company agrees to furnish a copy of all agreements relating to
long-term debt upon request of the Commission.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -------------------------------------------------------------------------------
<C> <S>
1.1 Form of U.S. Underwriting Agreement*
1.2 Form of Subscription Agreement*
3.1 Certificate of Incorporation of the Company***
3.2 By-Laws of the Company***
4.1 Form of Certificate of Common Stock*
4.2 Base Indenture dated as of December 13, 1995 between Thrifty Car Rental Finance
Corporation and Bankers Trust Company***
4.3 Series 1995-1 Supplement to Base Indenture dated as of December 13, 1995
between Thrifty Car Rental Finance Corporation and Bankers Trust Company***
4.4 Master Motor Vehicle Lease and Servicing Agreement dated as of December 13,
1995 between Thrifty Car Rental Finance Corporation and Thrifty***
4.5 Master Collateral Agency Agreement dated as of December 13, 1995 between
Thrifty Car Rental Finance Corporation and Bankers Trust Company***
4.6 Form of Revolving Credit Agreement among the Company, Dollar, Thrifty and the
Institutions named therein**
4.7 Form of Series 1997-1 Supplement to Base Indenture between Rental Car Finance
Corp. and Bankers Trust Company**
4.8 Form of Master Motor Vehicle Lease and Servicing Agreement among the Company,
Dollar, Thrifty and Rental Car Finance Corp.**
4.9 Commitment Letter, dated November 19, 1997, among Credit Suisse First Boston,
The Chase Manhattan Bank, Chase Securities Inc., Dollar, Thrifty and the
Company, regarding a $230,000,000 Revolving Credit Facility and a $545,000,000
Commercial Paper Liquidity Facility and related Term Sheet**
4.10 Form of Chrysler Support Letter of Credit and Reimbursement Agreement, among
Chrysler, Dollar, Thrifty, and the Company*
5 Opinion of Debevoise & Plimpton regarding legality of the Common Stock*
10.1 Vehicle Supply Agreement between Chrysler and Dollar***+
10.2 Amended and Restated Vehicle Supply Agreement between Chrysler and Thrifty***+
10.3 [Reserved]
10.4 [Reserved]
10.5 [Reserved]
10.6 [Reserved]
10.7 [Reserved]
10.8 Pentastar Transportation Group, Inc. Deferred Compensation Plan***
10.9 Pentastar Transportation Group, Inc. Executive Retention Plan***
10.10 Dollar Thrifty Automotive Group, Inc. Long-Term Incentive Plan**
10.11 Tax Sharing and Disaffiliation Agreement between Chrysler Corporation and
Dollar Thrifty Automotive Group, Inc.***
10.12 Form of Indemnification Agreement between the Company and Chrysler*
21 Subsidiaries of the Company**
23.1 Consent of Deloitte & Touche LLP, Independent Auditors of the Company**
23.2 Consent of Debevoise & Plimpton (included in Exhibit 5)*
23.3 Consent of Donovan Leisure Newton & Irvine LLP***
24 Powers of Attorney***
27.1 Financial Data Schedule***
</TABLE>
- -------------------------
* To be filed by amendment
** Filed herewith
*** Previously filed
+ The Company has applied for confidential treatment of portions of this
Exhibit. Accordingly, portions thereof have been omitted and filed
separately.
II-5
<PAGE> 1
EXHIBIT 4.6
U.S. $215,000,000
CREDIT AGREEMENT,
dated as of December __, 1997,
among
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.,
DOLLAR RENT A CAR SYSTEMS, INC.
and
THRIFTY RENT-A-CAR SYSTEM, INC.,
as the Borrowers,
and
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
CREDIT SUISSE FIRST BOSTON,
as the Administrative Agent,
and
THE CHASE MANHATTAN BANK,
as the Syndication Agent.
Arranged By
CREDIT SUISSE FIRST BOSTON
CHASE SECURITIES INC.
<PAGE> 2
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms.......................................................3
1.2. Use of Defined Terms...............................................35
1.3. Cross-References...................................................36
1.4. Accounting and Financial Determinations............................36
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
2.1. Commitments........................................................36
2.1.1. Loan Commitment....................................................36
2.1.2. Commitment to Issue Letters of Credit..............................36
2.1.3. Lenders Not Permitted or Required to Make Loans or Issue
Letters of Credit Under Certain Circumstances....................36
2.2. Reduction of Commitment Amounts....................................37
2.2.1. Optional...........................................................37
2.2.2. Mandatory..........................................................37
2.2.3. Corresponding Reductions...........................................38
2.3. Borrowing Procedure................................................38
2.4. Continuation and Conversion Elections..............................39
2.5. Funding............................................................39
2.6. Loan Accounts......................................................40
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments.........................................40
3.2. Interest Provisions................................................42
3.2.1. Rates..............................................................42
3.2.2. Post-Maturity Rates................................................42
3.2.3. Payment Dates......................................................42
3.3. Fees...............................................................43
3.3.1. Commitment Fees....................................................43
3.3.2. Arrangement Fees...................................................43
3.3.3. Administrative Agent's Fee.........................................43
3.3.4. Letter of Credit Face Amount Fee...................................44
<PAGE> 3
Section Page
- ------- ----
3.3.5. Letter of Credit Issuing Fee.......................................44
3.3.6. Letter of Credit Administrative Fee................................44
ARTICLE IV
LETTERS OF CREDIT
4.1. Issuance Requests..................................................44
4.2. Issuances and Extensions...........................................46
4.3. Expenses...........................................................46
4.4. Other Lenders' Participation.......................................46
4.5. Disbursements......................................................47
4.6. Reimbursement......................................................48
4.7. Deemed Disbursements...............................................48
4.8. Nature of Reimbursement Obligations................................49
4.9. Indemnity..........................................................50
4.10. Borrowers' Guaranty of Reimbursement Obligations of
its Subsidiaries.................................................50
4.10.1. Guaranty...........................................................50
4.10.2. Acceleration of Guaranty...........................................51
4.10.3. Guaranty Absolute, etc.............................................51
4.10.4. Reinstatement, etc.................................................52
4.10.5. Waiver, etc........................................................52
4.10.6. Postponement of Subrogation, etc...................................53
4.10.7. Right of Contribution..............................................53
4.10.8. Successors, Transferees and Assigns; Transfers of Notes, etc.......54
4.11. No Bankruptcy Petition Against RCFC or Dollar Thrifty Funding......54
ARTICLE V
CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS
5.1. Eurodollar Rate Lending Unlawful...................................55
5.2. Deposits Unavailable...............................................55
5.3. Increased Eurodollar Loan Costs, etc...............................55
5.4. Funding Losses.....................................................56
5.5. Increased Capital Costs............................................56
5.6. Taxes..............................................................57
5.7. Payments, Computations, etc........................................60
5.8. Sharing of Payments................................................60
5.9. Setoff.............................................................61
5.10. Replacement of Lender..............................................61
-ii-
<PAGE> 4
Section Page
- ------- ----
ARTICLE VI
CONDITIONS PRECEDENT
6.1. Initial Credit Extension...........................................62
6.1.1. Resolutions, etc...................................................63
6.1.2. Delivery of Notes..................................................63
6.1.3. Transaction Consummated............................................63
6.1.4. Payment of Outstanding Indebtedness, etc...........................64
6.1.5. Delivery of Financial Statements...................................64
6.1.6. Consents, etc......................................................64
6.1.7. No Material Adverse Change.........................................65
6.1.8. Availability Under Credit Facility.................................65
6.1.9. Business Plan......................................................65
6.1.10. Closing Date Certificate...........................................65
6.1.11. Guaranty...........................................................65
6.1.12. Pledge Agreement...................................................65
6.1.13. Security Agreement.................................................66
6.1.14. Mortgages..........................................................66
6.1.15. Intercreditor Agreement............................................67
6.1.16. Insurance..........................................................67
6.1.17. Issuance Request...................................................67
6.1.18. Opinions of Counsel................................................67
6.1.19. Closing Fees, Expenses, etc........................................68
6.2. All Credit Extensions..............................................68
6.2.1. Compliance with Warranties, No Default, etc........................68
6.2.2. Credit Request.....................................................69
6.2.3. Enhancement Letters of Credit......................................69
6.2.4. Satisfactory Legal Form............................................69
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1. Organization, etc..................................................70
7.2. Due Authorization, Non-Contravention, etc..........................70
7.3. Government Approval, Regulation, etc...............................71
7.4. Validity, etc......................................................71
7.5. Financial Information; Absence of Undisclosed Liabilities..........71
7.6. No Material Adverse Change.........................................72
7.7. Litigation, Labor Controversies, etc...............................72
7.8. Subsidiaries.......................................................72
-iii-
<PAGE> 5
Section Page
- ------- ----
7.9. Ownership of Properties............................................72
7.10. Taxes..............................................................73
7.11. Pension and Welfare Plans..........................................73
7.12. Environmental Warranties...........................................73
7.13. Intellectual Property..............................................75
7.14. Regulations G, U and X.............................................75
7.15. Accuracy of Information............................................75
7.16. Transaction Documents..............................................76
7.17. Non-Guarantor Subsidiaries.........................................76
ARTICLE VIII
COVENANTS
8.1. Affirmative Covenants..............................................77
8.1.1. Financial Information, Reports, Notices, etc.......................77
8.1.2. Compliance with Laws, Material Agreements, etc.....................80
8.1.3. Maintenance of Properties..........................................80
8.1.4. Insurance..........................................................80
8.1.5. Books and Records..................................................81
8.1.6. Environmental Covenant.............................................81
8.1.7. Use of Proceeds....................................................82
8.1.8. Additional Real Property...........................................82
8.1.9. Future Subsidiaries................................................83
8.2. Negative Covenants.................................................86
8.2.1. Business Activities................................................86
8.2.2. Indebtedness.......................................................86
8.2.3. Liens..............................................................89
8.2.4. Financial Condition................................................91
8.2.5. Investments........................................................94
8.2.6. Restricted Payments, etc...........................................96
8.2.7. Capital Expenditures, etc..........................................98
8.2.8. Take or Pay Contracts..............................................98
8.2.9. Consolidation, Merger, etc.........................................98
8.2.10. Asset Dispositions, etc............................................98
8.2.11. Modification of Certain Agreements.................................99
8.2.12. Transactions with Affiliates......................................100
8.2.13. Negative Pledges, Restrictive Agreements, etc.....................100
8.2.14. Ability to Amend; Restrictive ....................................101
8.2.15. Accounting Changes................................................101
8.2.16. Activities of the Parent..........................................101
-iv-
<PAGE> 6
Section Page
- ------- ----
ARTICLE IX
EVENTS OF DEFAULT
9.1. Listing of Events of Default......................................102
9.1.1. Non-Payment of Obligations........................................102
9.1.2. Breach of Warranty................................................102
9.1.3. Non-Performance of Certain Covenants and Obligations..............102
9.1.4. Non-Performance of Other Covenants and Obligations................102
9.1.5. Default on Other Indebtedness.....................................102
9.1.6. Judgments.........................................................103
9.1.7. Pension Plans.....................................................103
9.1.8. Change in Control.................................................103
9.1.9. Bankruptcy, Insolvency, etc.......................................103
9.1.10. Impairment of Security, ..........................................104
9.2. Action if Bankruptcy..............................................104
9.3. Action if Other Event of Default..................................104
ARTICLE X
BORROWERS GUARANTY
10.1. Guaranty..........................................................105
10.2. Acceleration of Borrowers Guaranty................................105
10.3. Guaranty Absolute, etc............................................106
10.4. Reinstatement, etc................................................107
10.5. Waiver, etc.......................................................107
10.6. Postponement of Subrogation, etc..................................107
10.8. Successors, Transferees and Assigns; Transfers of Notes, etc......108
ARTICLE XI
THE AGENTS
11.1. Actions...........................................................109
11.2. Funding Reliance, etc.............................................109
11.3. Exculpation.......................................................110
11.4. Successor.........................................................110
11.5. Credit Extensions by Agents.......................................111
11.6. Credit Decisions..................................................111
11.7. Collateral Agent..................................................111
11.8. Copies, etc.......................................................111
-v-
<PAGE> 7
Section Page
- ------- ----
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1. Waivers, Amendments, etc..........................................111
12.2. Notices...........................................................113
12.3. Payment of Costs and Expenses.....................................113
12.4. Indemnification...................................................114
12.5. Survival..........................................................115
12.6. Severability......................................................115
12.7. Headings..........................................................115
12.8. Execution in Counterparts, Effectiveness, etc.....................115
12.9. Governing Law; Entire Agreement...................................115
12.10. Successors and Assigns............................................115
12.11. Sale and Transfer of Loans and Notes; Participations
in Loans and Notes..............................................116
12.11.1. Assignments.......................................................116
12.11.2. Participations....................................................118
12.12. Other Transactions................................................119
12.13. Independence of Covenants.........................................119
12.14. Confidentiality...................................................119
12.15. Forum Selection and Consent to Jurisdiction.......................120
12.16. Waiver of Jury Trial..............................................121
-vi-
<PAGE> 8
SCHEDULE I - Lender Information
SCHEDULE II - Subordinated Intercompany Note Terms
SCHEDULE III - Existing Material Property
SCHEDULE IV - Excluded Property
SCHEDULE V - Certain Existing Rental Sites
EXHIBIT A - Form of Revolving Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Compliance Certificate
EXHIBIT E - Form of Pledge Agreement
EXHIBIT F - Form of Security Agreement
EXHIBIT G - Form of Subsidiary Guaranty
EXHIBIT H-1 - Form of Mortgage
EXHIBIT H-2 - Form of Deed of Trust
EXHIBIT I - Form of Intercreditor Agreement
[EXHIBIT J - Form of CP Enhancement Letter of Credit]
EXHIBIT K - Form of Closing Date Certificate
EXHIBIT L - Form of Lender Assignment Agreement
EXHIBIT M - Form of U.S. Tax Compliance Certificate
-vii-
<PAGE> 9
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December __, 1997, among DOLLAR THRIFTY
AUTOMOTIVE GROUP, INC., a Delaware corporation (the "Parent"), DOLLAR RENT A CAR
SYSTEMS, INC., an Oklahoma corporation ("Dollar"), THRIFTY RENT-A-CAR SYSTEM,
INC., an Oklahoma corporation ("Thrifty," and, together with Dollar, the
"Subsidiary Borrowers"; the Parent and the Subsidiary Borrowers being
collectively referred to herein as the "Borrowers"), various financial
institutions as are or may become parties hereto (collectively, the "Lenders"),
CREDIT SUISSE FIRST BOSTON ("Credit Suisse First Boston"), as the administrative
agent (in such capacity, the "Administrative Agent") for the Lenders, THE CHASE
MANHATTAN BANK ("Chase"), as the syndication agent (in such capacity, the
"Syndication Agent") and, together with the Administrative Agent, the "Agents")
for the Lenders and CREDIT SUISSE FIRST BOSTON and CHASE SECURITIES INC. as the
co-arrangers (in such capacities, the "Arrangers").
W I T N E S S E T H:
WHEREAS, the Subsidiary Borrowers are engaged directly and through their
various Subsidiaries (capitalized terms used in these recitals to have the
meanings set forth in Section 1.1 below) in the business of (a) renting
worldwide for general use passenger automobiles, light and medium duty trucks
and vans, (b) selling in the United States and Canada late model automobiles,
(c) franchising the foregoing business to other Persons and (d) providing
support and services to franchisees, including fleet leasing of vehicles;
WHEREAS (a) the Parent intends to issue shares of its common stock, par
value $0.01 per share (the "Common Stock"), pursuant to a registered public
offering for net cash proceeds of at least $45,000,000, which proceeds will be
used to provide collateral for the financing of vehicles by the Parent and its
subsidiaries (the "Primary Equity Offering"), and (b) Chrysler Corporation, a
Delaware corporation ("Chrysler"), intends to sell 20,000,000 shares of the
Common Stock of the Parent owned by it pursuant to a registered public offering
which, following the consummation thereof, will result in the Parent no longer
being a subsidiary of Chrysler (the "Secondary Equity Offering," and, together
with the Primary Equity Offering, the "Equity Offerings");
WHEREAS, concurrently with the initial extension of credit hereunder, the
Parent (a) intends to implement through a special purpose, bankruptcy remote,
Wholly Owned Subsidiary, Rental Car Finance Corp., formerly known as Thrifty Car
Rental Finance Corporation ("RCFC"), a $900,000,000 medium-term note program
secured by vehicles and related assets to replace existing financing
arrangements with Chrysler Financial Corporation and provide funds for the
purchase of additional vehicles (the "MTN Program");
WHEREAS, after the initial extension of credit hereunder, (a) the Parent
intends to implement through a to-be-formed special purpose, bankruptcy remote,
Wholly Owned Subsidiary ("Dollar Thrifty Funding"), a commercial paper program
of up to $615,000,000
<PAGE> 10
secured by vehicles and related assets, the proceeds of which will be used to
finance vehicle fleet growth and to refinance existing vehicle fleet
indebtedness (the "CP Program"), and (b) in connection with the CP Program,
Dollar Thrifty Funding would enter into a 364-day revolving liquidity facility
in an amount of up to $545,000,000 to provide backup liquidity for the
commercial paper issued pursuant to the CP Program (the "Liquidity Facility");
WHEREAS, in connection with the foregoing, the Parent and its Subsidiaries
will enter into certain agreements with Chrysler and its subsidiaries relating
to the separation of the Parent from Chrysler, including (i) credit support
arrangements for the MTN Program (and, possibly, the CP Program) and (ii) other
matters with respect to taxes and insurance (collectively, the "Continuing
Chrysler Arrangements," and, together with the Equity Offerings, the MTN Program
and the CP Program, the "Transaction");
WHEREAS, in connection with the Transaction, the Borrowers desire to
obtain Commitments from the Lenders pursuant to which
(a) Loans will be made to the Borrowers from time to time prior to
the Commitment Termination Date; and
(b) Letters of Credit will be issued by the Issuer for the account
of the Borrowers and under the several responsibilities of the Lenders
from time to time prior to the Commitment Termination Date;
in maximum aggregate principal amount for Loans at any one time outstanding not
to exceed in the aggregate $70,000,000 and in a maximum aggregate Stated Amount
for Letters of Credit outstanding at any one time not to exceed in the aggregate
$190,000,000;
WHEREAS, the Lenders and the Issuer are willing, on the terms and subject
to the conditions hereinafter set forth (including Article VI), to extend such
Commitments, make such Loans to the Borrowers and issue, and participate in,
such Letters of Credit; and
WHEREAS,
(a) the proceeds of such Loans will be used for general corporate
purposes of Dollar, Thrifty and the other operating Subsidiaries of the
Parent; and
(b) such Letters of Credit will be used by the Borrowers and their
respective operating Subsidiaries
(i) as credit and/or liquidity enhancement for the CP Program
and the MTN Program (the "Enhancement Letters of Credit"), and
(ii) for other general corporate purposes (including
performance and insurance bonds) (the "General Letters of Credit");
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<PAGE> 11
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"ABR Loan" means a Loan bearing interest at a fluctuating rate determined
by reference to the Alternate Base Rate.
"Account Party" means (a) any Borrower, (b) in any case of the CP
Enhancement Letter of Credit, Dollar Thrifty Funding, (c) any Subsidiary
Guarantor or SPC for the account of which a Letter of Credit is issued in
accordance with Article IV and (d) to the extent permitted by clause (k) of
Section 8.2.5, any franchisee of a Subsidiary Borrower for the account of which
a Letter of Credit is issued in accordance with Article IV.
"Additional Material Property" means any property with respect to which a
Mortgage is required to be delivered pursuant to Section 8.1.8 hereof.
"Adjusted Debt" means, at any time, the sum of (a) Non-Vehicle Debt at
such time plus (b) the maximum amount available for drawing under each letter of
credit, bond or similar obligation (including Letters of Credit and Surety
Bonds, but excluding any Letter of Credit to the extent it may be drawn upon to
reimburse a payment made by the issuer of a Surety Bond under such Surety Bond),
whether or not drawn and whether or not any conditions to drawing can then be
met at such time.
"Adjusted EBITDA" means, for any applicable period, the excess of
(a) EBITDA for such period
over
(b) to the extent added in arriving at such EBITDA, the sum of (i)
the aggregate amount of depreciation in respect of Vehicles during such
period plus (ii) Vehicle Interest Expense during such period.
"Administrative Agent" is defined in the preamble and includes each other
Person as shall have subsequently been appointed as the successor Administrative
Agent pursuant to Section 11.4.
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<PAGE> 12
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing
general partners; or
(b) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
Neither Chrysler nor any of its Subsidiaries shall be deemed to be an Affiliate
of the Parent solely as a result of its execution and delivery of the
Chrysler-Dollar Supply Agreement, the Chrysler-Thrifty Supply Agreement or any
agreement evidencing a Continuing Chrysler Arrangement or solely because of its
rights thereunder.
"Agents" is defined in the preamble.
"Aggregate Interest Expense" is defined in clause (a) of the definition of
"Non-Vehicle Interest Expense".
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"Alternate Base Rate" means, on any date and with respect to all ABR
Loans, a fluctuating rate of interest per annum equal to the higher of
(a) the rate of interest most recently established by Credit Suisse
First Boston at its principal office in New York, New York as its base or
prime rate for U.S. Dollar loans; and
(b) the Federal Funds Rate most recently determined by the
Administrative Agent plus 50 basis points.
If for any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Rate for any reason, including the inability of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition of "Federal Funds Rate", the Alternate Base Rate shall
be determined without regard to clause (b) of the first sentence of this
definition until the circumstances giving rise to such inability no longer
exist. The Alternate Base Rate is not necessarily intended to be the lowest rate
of interest determined by Credit Suisse First Boston in connection with
extensions of credit. Changes in the rate of interest on that portion of any
Loans maintained as ABR Loans will take effect simultaneously with each change
in the Alternate Base
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<PAGE> 13
Rate. The Administrative Agent will give notice promptly to the Borrowers and
the Lenders of changes in the Alternate Base Rate.
"Applicable Commitment Fee" means, as of any date, a per annum fee on the
average daily unused portion of the Commitment Amount determined pursuant to the
following pricing grid (expressed in basis points), subject to the provisions of
this definition set forth below:
PRICING GRID
Applicable
Leverage Ratio Commitment Fee
-------------- --------------
X > 2.0 37.5
-
X > 1.0, but < 2.0 30.0
- X < 1.0 25.0
The Applicable Commitment Fee on the average daily unused portion of the
Commitment Amount, at any time from and including the Effective Date to (but not
including) the date which is 180 days after the Effective Date, shall be 37.5
basis points per annum at such time.
The Applicable Commitment Fee, at any time from and after the date which
is 180 days after the Effective Date, on the average daily unused portion of the
Commitment Amount, shall be determined pursuant to the Pricing Grid above at
such time. At all times that the Applicable Commitment Fee is determined by
reference to the Pricing Grid, "X" refers to the Leverage Ratio, which ratio
shall be determined based upon the Compliance Certificate delivered pursuant to
clause (c) of Section 8.1.1 and shall remain in effect until such time as the
next Compliance Certificate shall be delivered (and, at such time, the
Applicable Commitment Fee shall change based on such next Compliance
Certificate); provided, however, that, if any such Compliance Certificate is not
delivered to the Administrative Agent on or prior to the date required pursuant
to clause (c) of Section 8.1.1, the Applicable Commitment Fee from and including
the date on which such Compliance Certificate was required to be delivered to
but not including the actual date of delivery of such Compliance Certificate
shall conclusively equal the highest Applicable Commitment Fee.
"Applicable Margin" means, with respect to any Loan of any type, as of any
date, the rate per annum determined pursuant to the following pricing grid
(expressed in basis points), subject to the provisions of this definition set
forth below:
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<PAGE> 14
PRICING GRID
Eurodollar Loan ABR Loan
Leverage Ratio Applicable Margin Applicable Margin
-------------- ----------------- -----------------
X > 3.5 250 150
-
X > 3.0, but < 3.5 225 125
-
X > 2.0, but < 3.0 200 100
-
X > 1.0, but < 2.0 175 75
- X < 1.0 150 50
The Applicable Margin, at any time from and including the Effective Date
until the date which is 180 days after the Effective Date, for the Loans shall
be 250 basis points as to Eurodollar Loans and 150 basis points as to ABR Loans
at such time.
The Applicable Margin, at any time from and after the date which is 180
days after the Effective Date, for Loans, shall be determined pursuant to the
Pricing Grid above at such time. At all times that the Applicable Margin is
determined by reference to the Pricing Grid, "X" refers to the Leverage Ratio,
which ratio shall be determined based upon the Compliance Certificate delivered
pursuant to clause (c) of Section 8.1.1 and shall remain in effect until such
time as the next Compliance Certificate shall be delivered (and, at such time,
the Applicable Margin shall change based on such next Compliance Certificate);
provided, however, that, if any such Compliance Certificate is not delivered to
the Administrative Agent on or prior to the date required pursuant to clause (c)
of Section 8.1.1, the Applicable Margin for Loans from and including the date on
which such Compliance Certificate was required to be delivered to but not
including the actual date of delivery of such Compliance Certificate shall
conclusively equal the highest Applicable Margin for Loans set forth above.
"Arrangers" is defined in the preamble.
"Assignee Lender" is defined in Section 12.11.1.
"Authorized Officer" means, relative to any Borrower and any other
Obligor, those of its officers or managing members (in the case of a limited
liability company) whose signatures and incumbency shall have been certified to
the Administrative Agent and the Lenders pursuant to Section 6.1.1.
"Base Indenture" means the Base Indenture, dated as of December 13, 1995,
between RCFC and Bankers Trust Company, as Trustee, as in effect on the date
hereof, together with the Base Indenture Supplements thereto, as amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with the terms hereof and thereof.
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<PAGE> 15
"Base Indenture Supplement" means any supplement to the Base Indenture,
including (i) the Series 1997-1 Supplement dated as of December __, 1997 (which
supplement was entered into in connection with the MTN Program) and (ii) the
supplement to the Base Indenture to be entered into in connection with the CP
Program.
"Borrower Debtor" is defined in clause (a) of Section 10.1.
"Borrower Guarantor" is defined in clause (a) of Section 10.1.
"Borrowers" is defined in the preamble.
"Borrower Guaranty" means the Obligations of a Borrower Guarantor
undertaken pursuant to Article X.
"Borrowing" means the Loans of the same type and, in the case of
Eurodollar Loans, having the same Interest Period made by all Lenders on the
same Business Day and pursuant to the same Borrowing Request in accordance with
Section 2.1.
"Borrowing Request" means a Loan request and certificate duly executed by
an Authorized Officer of any Borrower, substantially in the form of Exhibit B-1
hereto.
"Business Acquisition" means the acquisition, by purchase or otherwise, of
all or substantially all of the assets and, if applicable, assumption of all or
substantially all of the liabilities (or any part of the assets and, if
applicable, the liabilities, constituting all or substantially all of a business
or line of business) of any Person, whether such acquisition is direct or
indirect, including through the acquisition of the business of, or Capital Stock
of, such Person.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in New
York, New York; and
(b) relative to the making, continuing, converting, prepaying or
repaying of any Eurodollar Loan, any day described in clause (a) above on
which dealings in U.S. Dollars are carried on in the London interbank
market.
"Capital Expenditures" means, for any period, the sum of
(a) the aggregate amount of all expenditures of the Parent and its
Subsidiaries for fixed or capital assets made during such period which, in
accordance with GAAP, would be classified as capital expenditures; and
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<PAGE> 16
(b) the aggregate amount of all Capitalized Lease Liabilities
incurred during such period.
"Capital Stock" means with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock or equity, whether now outstanding or issued after the
date hereof, including all common stock, preferred stock, partnership interests
and member interests.
"Capitalized Lease Liabilities" means all monetary obligations of the
Parent or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and, with respect to any such leasing or similar arrangement, the
stated maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a premium or a penalty.
"Cash Equivalent Investments" means
(a) U.S. Government Obligations maturing in not more than 270 days;
(b) participation certificates (excluding strip mortgage securities
that are purchased at prices exceeding their principal amounts) and senior
debt obligations of the Federal Home Loan Mortgage Corporation,
consolidated system wide bonds and notes of the Farm Credit System, senior
debt obligations and mortgage-backed securities (excluding stripped
mortgage securities which are purchased at prices exceeding their
principal amounts) of the Federal Mortgage Association which, in the case
of mortgage-backed securities, are rated at least AA by S&P and Aa by
Moody's, senior debt obligations (excluding securities that have no fixed
value and/or whose terms do not promise a fixed dollar amount at maturity
or call date) of the Student Loan Marketing Association and debt
obligations of the Resolution Funding Corp., in each case, maturing not
more than 270 days (collectively, "Agency Obligations");
(c) direct obligations of any state of the United States or any
subdivision or agency thereof whose short-term unsecured general
obligation debt has ratings from S&P of at least A-1 and Moody's of at
least P-1 or any obligation that has ratings from S&P and Moody's at least
equivalent to A-1 and P-1, respectively, and which is fully and
unconditionally guaranteed by any state, subdivision or agency whose short
term, unsecured general obligation debt has ratings from S&P and Moody's
at least equivalent to A-1 and P-1, respectively;
(d) commercial paper maturing in not more than 270 days which is
issued by a corporation (other than an Affiliate of any Obligor) and
having ratings from S&P and Moody's at least equivalent to A-1 and P-1,
respectively;
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<PAGE> 17
(e) deposits (including Eurodollar time 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), which:
(i) has an unsecured, uninsured and unguaranteed obligation
which has ratings from S&P and Moody's at least equivalent to A-1
and P-1, respectively, or
(ii) is the lead bank of a parent bank holding company with an
uninsured, unsecured and unguaranteed obligation meeting the rating
requirements in the preceding clause (i);
(f) deposits of any bank or savings and loan association which has
combined capital, surplus and undivided profits of not less than $100
million and deposits, not to exceed $100,000, at any bank or savings and
loan association that serves the local and non-centralized corporate
operations of a Subsidiary Borrower, provided such deposits are in each
case 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 of 1940 and is rated at least
the equivalent of AAm or AAm-G by S&P and P-1 by Moody's;
(h) repurchase agreements with a term of six months or less with any
institution having short-term, unsecured debt rated at least the
equivalent of A-1 by S&P and P-1 by Moody's; and
(i) repurchase agreements collateralized by U.S. Government
Obligations or Agency Obligations (the "Collateral Securities") with any
registered broker-dealer which is under the jurisdiction of the Securities
Investors Protection Corp. or any commercial bank, if such broker-dealer
or bank has uninsured, unsecured and unguaranteed debt rated at least the
equivalent of A-1 by S&P and P-1 by Moody's, provided that:
(A) a master repurchase agreement or other specific written
repurchase agreement governs the transaction;
(B) the Collateral Securities are held free and clear of any
other Lien by the Administrative Agent or an independent third party
acting solely as agent for the Administrative Agent, provided that
any such third party (1) is (x) a Federal Reserve bank, (y) a bank
which is a member of the Federal Deposit Insurance Corporation and
which has combined capital, surplus and undivided profits of not
less that $250 million, or (z) a bank approved in writing for such
purpose by the Required Lenders, and (2) certifies in writing to the
Administrative Agent (or delivers to the Administrative Agent a
written opinion of counsel to such third
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<PAGE> 18
party) that such third party holds the Collateral Securities free
and clear of any Lien, as agent for the Administrative Agent;
(C) a perfected first security interest under the Uniform
Commercial Code is created in, or book entry procedures prescribed
at 31 C.F.R. 306.1 et seq. or 31 C.F.R. 350.0 et seq. are followed
with respect to, the Collateral Securities for the benefit of the
Administrative Agent;
(D) such repurchase agreement has a term of 30 days or less;
(E) such repurchase agreement matures (or permits the
Administrative Agent to withdraw all or any portion of the invested
funds) at least ten (10) days (or other appropriate liquidation
period) prior to each Quarterly Payment Date;
(F) the fair market value of the Collateral Securities in
relation to the amount of the repurchase obligation, including
principal and interest, is equal to at least one hundred and three
percent (103%) (as determined by the Parent and certified by the
chief financial Authorized Officer of the Parent to the
Administrative Agent in a certificate in form and substance
satisfactory to the Administrative Agent); and
(G) the Administrative Agent obtains an opinion of counsel to
such broker-dealer or bank to the effect that such repurchase
agreement is a legal, valid, binding and enforceable agreement of
such broker-dealer or bank (and, in the case of a bank which is a
branch of a foreign bank, of such foreign bank) in accordance with
its terms.
"Cash Rental Expense" is defined in the definition of "Fixed Charge
Coverage Ratio".
"Casualty Event" means the damage, destruction or condemnation, as the
case may be, of property of the Parent or any of its Subsidiaries.
"Casualty Proceeds" means, with respect to any Casualty Event, the amount
of any insurance proceeds or condemnation awards received by or on behalf of the
Parent or any of its Subsidiaries in connection with such Casualty Event
(provided that, in the event the aggregate amount of such proceeds or awards
resulting from such Casualty Event do not exceed $100,000, such proceeds or
awards shall not constitute Casualty Proceeds), but excluding (i) any proceeds
or awards required to be paid to a creditor (other than the Lenders) which holds
a first-priority Lien permitted by Section 8.2.3 on the property which is the
subject of such Casualty Event (including Vehicles securing Vehicle Debt) and
(ii) reasonable and customary expenses incurred in obtaining such proceeds or
awards.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
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<PAGE> 19
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means
(a) any Person other than the Parent shall own any Capital Stock of
either of Dollar or Thrifty or otherwise have the ability to elect any
members of the board of directors of Dollar or Thrifty;
(b) a "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act) (i) becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of more than 30% of the
total then outstanding voting power of the Voting Stock of the Parent or
(ii) has the right or the ability by voting right, contract or otherwise
to elect or designate for election a majority of the board of directors of
the Parent;
(c) during any period of twenty-four months, individuals who at the
beginning of such period constituted the board of directors of the Parent
(together with any new directors whose election by such board of
directors, or whose nomination for election by the shareholders of the
Parent, as the case may be, was approved by a vote of 66 2/3% of the
directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute 50% or more of the board
of directors then in office; or
(d) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract
or arrangement that, upon consummation thereof, will result in its or
their acquisition of the power to direct or control, directly or
indirectly, the management or policies of any Borrower.
"Chase" is defined in the preamble.
"Chrysler" is defined in the second recital.
"Chrysler Credit Support Agreement" means the Agreement, dated as of
December , 1997, among Chrysler and the Borrowers, as amended, supplemented,
amended and restated or otherwise modified from time to time in accordance with
the terms hereof and thereof.
"Chrysler Credit Support Documents" means the Chrysler Credit Support
Agreement and each agreement, instrument or document delivered in connection
therewith.
"Chrysler-Dollar Supply Agreement" means the Vehicle Supply Agreement,
dated as of July, 1, 1996, between Chrysler and Dollar, as amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with the terms hereof and thereof.
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<PAGE> 20
"Chrysler Letter of Credit" means a letter of credit issued pursuant to
the Chrysler Credit Support Agreement.
"Chrysler-Thrifty Supply Agreement" means the Amended and Restated Vehicle
Supply Agreement dated as of July 1, 1997, between Chrysler and Thrifty, as
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with the terms hereof and thereof.
"Closing Date" means the date on which Credit Extensions are first made
hereunder.
"Closing Date Certificate" means the closing date certificate executed and
delivered by the Borrowers pursuant to Section 6.1.10, substantially in the form
of Exhibit K hereto.
"Code" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
"Commitment" means, as the context may require, a Lender's Loan Commitment
and/or Letter of Credit Commitment.
"Commitment Amount" means, on any date, $215,000,000, as such amount may
be reduced from time to time pursuant to Section 2.2.
"Commitment Termination Date" means the earliest of
(a) January 30, 1998 (if the initial Credit Extension has not
occurred on or prior to such date);
(b) the Business Day immediately preceding the Stated Maturity Date;
(c) the date on which the Loan Commitment Amount is terminated in
full or reduced to zero pursuant to Section 2.2; and
(d) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (c) or (d) above, the
Commitments shall terminate automatically and without any further action.
"Commitment Termination Event" means
(a) the occurrence of any Event of Default described in clauses (a)
through (d) of Section 9.1.9; or
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<PAGE> 21
(b) the occurrence and continuance of any other Event of Default and
either
(i) the declaration of all or any portion of the Loans to be
due and payable pursuant to Section 9.3, or
(ii) the giving of notice by the Administrative Agent, acting
at the direction of the Required Lenders, to the Borrowers that the
Commitments have been terminated.
"Common Stock" is defined in the second recital.
"Compliance Certificate" means a certificate duly completed and executed
by the chief financial Authorized Officer of the Parent, substantially in the
form of Exhibit D hereto, together with such changes thereto as the
Administrative Agent may from time to time reasonably request in writing for the
purpose of monitoring the Parent's compliance with the financial covenants
contained herein.
"Consolidated Working Capital" means, with respect to the Parent, at any
date, the excess (or the deficit) of (a) the sum of the amounts that, in
accordance with GAAP, are set forth opposite the captions "accounts and notes
receivable, net", "prepaid expenses and other assets" and "income taxes
receivable", or any like captions, at such date over (b) the sum of the amounts
that, in accordance with GAAP, are set forth opposite the captions "accounts
payable", "accrued liabilities" and "income taxes payable", or any like
captions, at such date.
"Contingent Liability" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount (or maximum principal amount, if larger) of the debt,
obligation or other liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
applicable Borrower, substantially in the form of Exhibit C hereto.
"Continuing Chrysler Arrangements" is defined in the fifth recital.
"Controlled Group" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with any Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
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<PAGE> 22
"CP Enhancement Letter of Credit" means a Letter of Credit issued pursuant
to the terms hereof and of a CP Enhancement Letter of Credit Application and
Agreement.
"CP Enhancement Letter of Credit Application and Agreement" is defined in
Section 4.1.
"CP Program" is defined in the fourth recital.
"CP Program Documents" means the Base Indenture, the supplement thereto
relating to the CP Program, the Master Collateral Agency Agreement, the master
lease and servicing agreement relating to the CP Program, any note purchase
agreement between RCFC and Dollar Thrifty Funding, the Liquidity Facility and
any collateral agency agreement pursuant to which Dollar Thrifty Funding grants
a security interest in its assets to, among others, the lenders under the
Liquidity Facility and each other material agreement, instrument and document
delivered in connection with the CP Program, in each case as amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with the terms hereof and thereof.
"Credit Extension" means and includes
(a) the advancing of any Loans by the Lenders in connection with a
Borrowing, and
(b) any issuance or extension by the Issuer of a Letter of Credit.
"Credit Extension Request" means, as the context may require, any
Borrowing Request or Issuance Request.
"Credit Suisse First Boston" is defined in the preamble.
"Default" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.
"Demand Capitalization Notes" means promissory notes, issued by the Parent
to RCFC for the purpose of capitalizing RCFC in connection with the MTN Program
and the CP Program.
"Disbursement Date" is defined in Section 4.5.
"Disclosure Schedule" means the Disclosure Schedule dated the date hereof
and delivered by the Borrowers to the Agents and the Lenders on or prior to the
date hereof in form and substance satisfactory to the Agents and the Lenders, as
amended, supplemented or otherwise modified from time to time by the Borrowers
with the written consent of the Administrative Agent and the Required Lenders.
"Distribution" means, with respect to any Person, any dividend or
distribution (in cash, property or obligations) on any shares of any class of
Capital Stock (now or hereafter outstanding) of such Person or on any warrants,
options or other rights with respect to any shares
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<PAGE> 23
of any class of Capital Stock (now or hereafter outstanding) of such Person,
other than dividends or distributions payable in the common stock (other than
Redeemable Capital Stock) of such Person or warrants or options to purchase such
common stock or split-ups or reclassifications of its Capital Stock into
additional or other shares of such common stock.
"Dollar" is defined in the preamble.
"Dollar Thrifty Funding" is defined in the fourth recital.
"Domestic Office" means, relative to any Lender, the office of such Lender
designated as such opposite its name in Schedule II hereto or designated in the
Lender Assignment Agreement or such other office of a Lender (or any successor
or assign of such Lender) within the United States as may be designated from
time to time by written notice from such Lender, as the case may be, to each
other Person party hereto. A Lender may have separate Domestic Offices for
purposes of making, maintaining or continuing ABR Loans.
"Domestic Subsidiary" means any Subsidiary of the Parent which is not a
Foreign Subsidiary.
"EBITDA" means, for any applicable period, the sum for such period of
(a) Net Income (excluding therefrom (i) the effect of any
extraordinary or other non-recurring gain outside the ordinary course of
business, (ii) any write-up (or write-down) in the value of any asset,
(iii) the earnings (or loss) of any Person (other than the Parent or any
other Subsidiary of the Parent) in which the Parent or any of its
Subsidiaries has an ownership interest, except to the extent of the amount
of dividends or other distributions actually paid in cash to the Parent or
any of its Subsidiaries by such Person during such period, (iv) except
where the provisions hereof expressly require a pro forma determination,
the earnings (or loss) of any Person accrued prior to the date it becomes
a Subsidiary of the Parent or is merged into or consolidated with any of
its Subsidiaries or the date that such other Person's assets are acquired
by any Subsidiary of the Parent and (v) the earnings of any Subsidiary of
the Parent that is neither a Subsidiary Borrower nor a Subsidiary
Guarantor to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary of such earnings is not at the
time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Subsidiary)
plus
(b) to the extent deducted in arriving at such Net Income, the sum,
without duplication, of (i) Aggregate Interest Expense, plus (ii) taxes
computed on the basis of income plus (iii) the aggregate amount of
depreciation and amortization of tangible and intangible assets, plus (iv)
non-cash charges in respect of non-cash awards under the Parent's
incentive compensation programs.
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<PAGE> 24
"Effective Date" means the date this Agreement becomes effective pursuant
to Section 12.8.
"Eligible Assignee" means a lending institution at the time of any
proposed assignment having total assets in excess of $1,000,000,000 which is
organized under the laws of the United States, or any state thereof or any other
country which is a member of the OECD, or a political subdivision of any such
country (provided that such bank is acting through a branch or agency located in
the country in which it is organized, another country which is also a member of
the OECD or in the Cayman Islands) and has long-term unsecured debt ratings of
BBB- (or better) from S&P and Baa3 (or better) from Moody's; provided, however,
that neither the Parent nor any of its Affiliates shall qualify as an Eligible
Assignee.
"Enhancement Letter of Credit Application and Agreement" means, with
respect to each Enhancement Letter of Credit, the application and agreement
therefor completed by the account party or parties in respect of such
Enhancement Letter of Credit and accepted by the Issuer.
"Enhancement Letters of Credit" is defined in clause (b)(i) of the eighth
recital.
"Environmental Laws" means all applicable federal, foreign, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"Equity Offerings" is defined in the second recital.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections thereto.
"Eurodollar Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the Eurodollar Rate (Reserve Adjusted).
"Eurodollar Office" means, relative to any Lender, the office of such
Lender designated as such opposite its name in Schedule II hereto or designated
in the Lender Assignment Agreement or such other office of a Lender (or any
successor or assign of such Lender) as designated from time to time by written
notice from such Lender to the Borrowers and the Administrative Agent, whether
or not outside the United States, which shall be making or maintaining
Eurodollar Loans of such Lender hereunder.
"Eurodollar Rate" means, relative to any Interest Period, with respect to
Eurodollar Loans, an interest rate per annum equal to the average (rounded
upward to the nearest whole multiple of 1/100 of 1% per annum, if such average
is not such a multiple) of the rates per annum at which deposits in U.S. Dollars
in immediately available funds are offered by the Eurodollar Office of Credit
Suisse First Boston in London, England to prime banks in the
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<PAGE> 25
London interbank market at or about 11:00 a.m. (London, England time) two
Business Days before the first day of such Interest Period in an amount
substantially equal to Credit Suisse First Boston's Eurodollar Loan comprising
part of such Borrowing to be outstanding during such Interest Period and for a
period equal to such Interest Period.
"Eurodollar Rate (Reserve Adjusted)" means, relative to any Loan to be
made, continued or maintained as, or converted into, a Eurodollar Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) ------------------------------------
1.00 - Eurodollar Reserve Percentage
The Eurodollar Rate (Reserve Adjusted) for any Interest Period for Eurodollar
Loans will be determined by the Administrative Agent on the basis of the
Eurodollar Reserve Percentage in effect two Business Days before the first day
of such Interest Period.
"Eurodollar Reserve Percentage" means, relative to any Interest Period for
Eurodollar Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of and including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
"Event of Default" is defined in Section 9.1.
"Excess Cash Flow" means, for any Fiscal Year of the Parent, an amount
equal to the excess of (a) the sum, without duplication, of (i) EBITDA for such
Fiscal Year and (ii) decreases in Consolidated Working Capital for such Fiscal
Year over (b) the sum, without duplication, of (i) the aggregate amount paid by
the Parent and its Subsidiaries in cash during such Fiscal Year on account of
taxes computed on the basis of income, (ii) the portion of Aggregate Interest
Expense for such Fiscal Year paid by the Parent and its Subsidiaries in cash
during such Fiscal Year, (iii) the aggregate amount paid by the Parent and its
Subsidiaries in cash during such Fiscal Year on account of Capital Expenditures
(excluding the principal amount of Indebtedness incurred in connection with such
Capital Expenditures, whether incurred in such Fiscal Year or in a subsequent
Fiscal Year), (iv) the aggregate amount of all prepayments of any amounts
outstanding under any revolving credit facility or agreement (including this
Agreement) to which the Parent or any of its Subsidiaries is a borrower to the
extent accompanied by permanent reductions of the commitments to extend credit
thereunder, (v) the aggregate amount of all principal payments of Indebtedness
of the Parent or its Subsidiaries (including any term loans and the principal
component of payments in respect of capitalized lease liabilities) made during
such Fiscal Year (other than in respect of any revolving credit facility or
agreement (including this Agreement) to the extent there is not an equivalent
permanent reduction in commitments to
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<PAGE> 26
extend credit thereunder), (vi) increases in Consolidated Working Capital for
such Fiscal Year, (vii) the amount of cash payments by the Parent and its
Subsidiaries during such Fiscal Year in respect of long-term liabilities of the
Parent and its Subsidiaries other than Indebtedness, (viii) the amount of
Investments made during such Fiscal Year in cash to the extent that such
Investments were financed with internally generated cash flow of the Parent and
its Subsidiaries, (ix) the amount of Distributions made during such Fiscal Year
by the Parent in cash and (x) the aggregate amount of expenditures made by the
Parent and its Subsidiaries in cash during such Fiscal Year (including
expenditures for the payment of financing fees) to the extent that such
expenditures are not expensed during such Fiscal Year.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Property" means the real property described in Schedule IV,
except to the extent such real property is owned by a Borrower or any of its
Subsidiaries after June 30, 1998.
"Excluded Receivable" means any receivable or other right of the Parent, a
Subsidiary Borrower or any Subsidiary of a Subsidiary Borrower that is (a)
subject to a Lien which is not a Lien in favor of the Administrative Agent for
the benefit of the Lenders and (b) (i) an obligation payable to RCFC in respect
of Vehicles leased or financed pursuant to the Lease or the Master Lease (as
defined in the Base Indenture), (ii) an obligation of a manufacturer of a
Vehicle securing Vehicle Debt pursuant to a Vehicle Disposition Program (as
defined in the Base Indenture) including any right to receive incentive
payments in respect of any transportation allowance, return allowance, retention
bonus or otherwise, (iii) an obligation of an insurer or governmental entity
with respect to a Casualty Event in respect of a Vehicle securing Vehicle Debt,
(iv) an obligation of a Person in respect of the purchase price of a Vehicle
securing Vehicle Debt, (v) an obligation of a Person, as sublessee, to a
Subsidiary Borrower, as sublessor, in respect of any sublease of a Vehicle
securing Vehicle Debt or (vi) an obligation of any Person under an insurance
contract in respect of any Vehicle securing Vehicle Debt.
"Existing Material Property" means each property listed on Schedule III
attached hereto.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York; or
(b) if such rate is not so published for any day which is a Business
Day, the average of the quotations for such day on such transactions
received by Credit Suisse First Boston from three federal funds brokers of
recognized standing selected by it.
"Fee Letter" is defined in Section 3.3.2.
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<PAGE> 27
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on December 31 or such other date permitted pursuant to Section 8.2.15;
references to a Fiscal Year with a number corresponding to any calendar year
(e.g., the "1997 Fiscal Year") refer to the Fiscal Year ending on the December
31 (or such other date permitted pursuant to Section 8.2.15) occurring during
such calendar year.
"Fixed Charge Coverage Ratio" means, at the end of any Fiscal Quarter, the
ratio of
(a) the sum of (i) Adjusted EBITDA for the four consecutive Fiscal
Quarters ending on the last day of such Fiscal Quarter plus (ii) rental
expense of the Parent and its Subsidiaries during such period under all
leases of real property exclusive of any portion of such expense
determined on the basis of the revenues generated by the operations
conducted on the real property subject to such leases ("Rental Expense")
to
(b) the sum of (i) Non-Vehicle Interest Expense for the four
consecutive Fiscal Quarters ending on the last day of such Fiscal Quarter
(subject to the proviso set forth in clause (a) of the definition of
"Non-Vehicle Interest Expense"), plus (ii) taxes computed on the basis of
income and paid in cash during such period (net of cash received during
such period in respect of such taxes), plus (iii) scheduled repayments of
principal made by the Parent and its Subsidiaries during such period of
Indebtedness (other than Vehicle Debt) of the type described in clause
(a), (c), (f) or (g) of the definition of "Indebtedness" or, to the extent
in respect of such type of Indebtedness, clause (h) of the definition of
"Indebtedness," plus (iv) Capital Expenditures made by the Parent and its
Subsidiaries during such period in cash (excluding Capital Expenditures
for the acquisition of Vehicles), plus (v) Rental Expense during such
period, plus (vi) Distributions made by the Parent during such period.
"Foreign Pledge Agreement" means any supplemental pledge agreement
governed by the laws of a jurisdiction other than the United States or a state
thereof executed and delivered by the Parent or any of its Subsidiaries pursuant
to the terms of this Agreement, in form and substance reasonably satisfactory to
the Administrative Agent, as may be necessary or desirable under the laws of
organization or incorporation of a Subsidiary to further protect or perfect the
Lien on and security interest in any Pledged Shares and/or Pledged Notes (as
such terms are defined in the Pledge Agreement).
"Foreign Subsidiary" means any Subsidiary of the Parent (a) which is
organized under the laws of any jurisdiction outside of the United States of
America, (b) which conducts the major portion of its business outside of the
United States of America and (c) all or substantially all of the property and
assets of which are located outside of the United States of America.
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<PAGE> 28
"F.R.S. Board" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"GAAP" is defined in Section 1.4.
"General Letters of Credit" is defined in clause (b)(ii) of the eighth
recital.
"Guarantor" means, collectively, each Borrower and each Subsidiary
Guarantor.
"Guaranty" means, as the context may require, the Borrower Guaranty or the
Subsidiary Guaranty.
"Guaranteed Obligations" is defined in Section 4.10.1.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation
and Recovery Act, as amended; or
(c) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance (including any petroleum product) within
the meaning of any other applicable federal, foreign, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or
material, all as amended.
"Hedging Agreements" means, collectively, currency exchange agreements,
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements, and all other agreements or arrangements designed to protect
a Person against fluctuations in interest rates or currency exchange rates.
"Hedging Obligations" means, with respect to any Person, all liabilities
of such Person under Hedging Agreements.
"herein," "hereof," "hereto," "hereunder" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of the Parent or any other Obligor, any qualification or exception to such
opinion or certification
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<PAGE> 29
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
the Parent or such other Obligor to be in default of any of its
obligations under Section 8.2.4.
"including" and "include" means including without limiting the generality
of any description preceding such term, and, for purposes of this Agreement and
each other Loan Document, the parties hereto agree that the rule of ejusdem
generis shall not be applicable to limit a general statement, which is followed
by or referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, bonds (including Surety Bonds) and
similar obligations, whether or not drawn, and banker's acceptances issued
for the account of such Person;
(c) all obligations of such Person as lessee under leases which have
been or should be, in accordance with GAAP, recorded as Capitalized Lease
Liabilities;
(d) all obligations of such Person in the nature of overdrafts;
(e) net liabilities of such Person under all Hedging Obligations;
(f) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price of
property or services (excluding open accounts extended by suppliers on
normal trade terms in connection with purchases of goods and services),
and indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements),
whether or not such indebtedness shall have been assumed by such Person or
is limited in recourse;
(g) Redeemable Capital Stock; and
(h) all Contingent Liabilities of such Person in respect of any of
the foregoing.
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For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Liabilities" is defined in Section 12.4.
"Indemnified Parties" is defined in Section 12.4.
"Intercompany Note" means, with respect to the Parent or any of its
Subsidiaries, as the maker thereof, a promissory note substantially in the form
of Exhibit A to the Pledge Agreement (with such modifications as the
Administrative Agent may consent to, such consent not to be unreasonably
withheld), which promissory note shall evidence all intercompany loans which may
be made from time to time by the payee thereunder to such maker and shall be
duly endorsed and pledged by the payee in favor of the Administrative Agent.
"Intercreditor Agreement" means the Intercreditor Agreement executed and
delivered by the Borrowers, Chrysler and the Administrative Agent pursuant to
Section 6.1.15, substantially in the form of Exhibit I, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Interest Coverage Ratio" means, at the end of any Fiscal Quarter, the
ratio of
(a) EBITDA for the four consecutive Fiscal Quarters ending on the
last day of such Fiscal Quarter
to
(b) Aggregate Interest Expense for the four consecutive Fiscal
Quarters ending on the last day of such Fiscal Quarter (subject to the
proviso set forth in clause (a) of the definition of "Non-Vehicle Interest
Expense"), net of interest income for such four-Fiscal-Quarter period.
"Interest Period" means, relative to any Eurodollar Loan, the period
beginning on (and including) the date on which such Eurodollar Loan is made or
continued as, or converted into, a Eurodollar Loan pursuant to Section 2.3 or
2.4 and ending on (but excluding) the day which numerically corresponds to such
date one, two, three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month) as any
Borrower may select in its relevant written notice pursuant to Section 2.3 or
2.4; provided, however, that
(a) such Borrower shall not be permitted to select Interest Periods
to be in effect at any one time which have expiration dates occurring on
more than five different dates;
(b) Interest Periods commencing on the same date for Loans
comprising part of the same Borrowing shall be of the same duration;
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(c) if such Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first
Business Day of a calendar month, in which case such Interest Period shall
end on the Business Day next preceding such numerically corresponding
day); and
(d) no Interest Period may end later than the Stated Maturity Date.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other Person
(excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business);
(b) any Contingent Liability of such Person; and
(c) any ownership or similar interest held by such Person in any
other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
"Issuance Request" means a request and certificate duly executed by the
chief executive, accounting or financial Authorized Officer of any Borrower, in
substantially the form of Exhibit B-2 attached hereto (with such changes thereto
as may be agreed upon from time to time by the Administrative Agent and such
Borrower).
"Issuer" means Credit Suisse First Boston or any of its affiliates, and/or
any other Lender having short-term credit ratings of A-1 (or better) from S&P
and P-1 from Moody's which has agreed to issue one or more Letters of Credit at
the request of the Administrative Agent with the consent of each Borrower (which
consents shall not be unreasonably withheld or delayed).
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit L hereto.
"Lenders" is defined in the preamble and, in addition, shall include any
commercial bank or other financial institution that becomes a Lender pursuant to
Section 12.11.1.
"Letter of Credit" means, collectively, Enhancement Letters of Credit and
General Letters of Credit, which letters of credit, in each case, shall be
irrevocable standby letters of credit in such form as may be requested by any
Borrower and approved by the Issuer.
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"Letter of Credit Commitment" means, relative to any Lender, such Lender's
obligation to issue (in the case of the Issuer) or participate in (in the case
of all Lenders) Letters of Credit pursuant to Section 2.1.2.
"Letter of Credit Commitment Amount" means, on any date, $190,000,000, as
such amount may be reduced from time to time pursuant to Section 2.2.3.
"Letter of Credit Outstandings" means, at any time, an amount equal to the
sum of
(a) the aggregate Stated Amount at such time of all Letters of
Credit then outstanding and undrawn (as such aggregate Stated Amount shall
be adjusted, from time to time, as a result of drawings, the issuance of
Letters of Credit, or otherwise);
plus
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"Leverage Ratio" means, at any time, the ratio of
(a) Adjusted Debt at such time;
to
(b) Adjusted EBITDA for the four consecutive Fiscal Quarters ending
on the last day of the Fiscal Quarter most recently completed prior to or
at such time.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever, to secure payment of a debt or
performance of an obligation.
"Liquidity Facility" is defined in the fourth recital.
"Liquidity Obligation" is defined in Section 4.5.
"Loans" is defined in Section 2.1.1.
"Loan Commitment" means, relative to any Lender, such Lender's obligation
to make Loans pursuant to Section 2.1.1.
"Loan Commitment Amount" means, on any date, $70,000,000, as such amount
may be reduced from time to time pursuant to Section 2.2.3.
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"Loan Document" means this Agreement, the Notes, the Security Documents,
the Subsidiary Guaranty, the Letters of Credit, the Enhancement Letter of Credit
Application and Agreements, and each other agreement, certificate, document or
instrument delivered in connection with this Agreement and such other
agreements, whether or not specifically mentioned herein or therein.
"LOC Liquidity Disbursement" means, with respect to any Enhancement Letter
of Credit, (i) any drawing thereunder to the extent such drawing is for the
purpose of providing liquidity support to Dollar Thrifty Funding or another SPC
which has issued highly rated commercial paper in connection with the financing
of Vehicles, including any LOC Liquidity Disbursement (as defined in a CP
Enhancement Letter of Credit Application and Agreement) under a CP Enhancement
Letter of Credit and (ii) the portion of any LOC Termination Disbursement (as
defined in a CP Enhancement Letter of Credit Application and Agreement)
allocable to Dollar Thrifty Funding as a result of a ratings downgrade of the
Issuer of such CP Enhancement Letter of Credit, the failure to extend such CP
Enhancement Letter of Credit or otherwise.
"Master Collateral Agency Agreement" means the Amended and Restated Master
Collateral Agency Agreement dated as of _________ __, ____, among RCFC, Dollar
and Thrifty, as grantors, the various financing sources and beneficiaries
parties thereto, and Bankers Trust Company, as master collateral agent, as
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with the terms hereof and thereof.
"Moody's" means Moody's Investors Service Inc.
"Mortgage" means each mortgage or deed of trust, as the case may be,
executed and delivered pursuant to Section 6.1.14 and Section 8.1.8,
substantially in the form of Exhibits H-1 and H-2 respectively, attached hereto,
as amended, supplemented, restated or otherwise modified from time to time.
"MTN Program" is defined in the third recital.
"MTN Program Documents" means the Base Indenture, the Series 1997-1
Supplement thereto, the Master Collateral Agency Agreement, the master lease and
servicing agreement relating to the MTN Program, and each other material
agreement, instrument and document delivered in connection with the MTN Program,
in each case as amended, supplemented, amended and restated or otherwise
modified from time to time in accordance with the terms hereof and thereof.
"Net Disposition Proceeds" means the excess of
(a) the gross cash proceeds received by the Parent or any of its
Subsidiaries from any sale, transfer or conveyance of assets permitted
pursuant to clause (c) of Section 8.2.10 (collectively referred to herein
for purposes of this definition as a "permitted disposition"), including
and together with any amounts collected by the vendor of such assets in
respect of the taxes described in clause (b)(ii) below, and any cash
payments
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<PAGE> 34
received in respect of promissory notes or other non-cash consideration
delivered to the Parent or such Subsidiary in respect of any permitted
disposition (provided that, in the event the aggregate amount of such
proceeds resulting from such permitted disposition do not exceed $100,000,
such proceeds shall not constitute Net Disposition Proceeds),.
over
(b) the sum of
(i) all fees and expenses with respect to legal, investment
banking, brokerage and accounting and other professional fees, sales
commissions and disbursements actually incurred in connection with
such permitted disposition which have not been paid (other than in
the case of reasonable out-of-pocket expenses) to Affiliates of the
Parent;
plus
(ii) all taxes and other governmental costs and expenses
actually paid or estimated by the Parent or such Subsidiary (in good
faith) to be payable in cash in connection with such permitted
disposition;
plus
(iii) payments made by the Parent or such Subsidiary to retire
Indebtedness (other than the Loans) of the Parent or such Subsidiary
where payment of such Indebtedness is required in connection with
such permitted disposition;
provided, however, that if, after the payment of all taxes with respect to such
permitted disposition, the amount of estimated taxes, if any, pursuant to clause
(b)(ii) above exceeded the tax amount actually paid in respect of such permitted
disposition, the aggregate amount of such excess shall, at such time, constitute
Net Disposition Proceeds.
"Net Equity Proceeds" means, with respect to the sale or issuance by the
Parent or any of its Subsidiaries to any Person (other than the Parent, any
Subsidiary Borrower or any of its Subsidiaries) of any Capital Stock, other than
pursuant to the Equity Offerings, or any warrants or options with respect to
such Capital Stock or the exercise of any such warrants or options, the excess
of:
(a) the gross cash proceeds received by the Parent or such
Subsidiary from such sale, exercise or issuance (other than proceeds
received with respect to (i) employee incentive compensation plans
(including incentive stock options), (ii) employee stock purchase plans
(including deferred stock purchase plans) and (iii) direct purchase plans
(other than the plans described in the preceding clauses (i) and (ii)) to
the extent such proceeds do not exceed $1,000,000 in any Fiscal Year),
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over
(b) all fees and expenses with respect to underwriting commissions
and legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements actually incurred
in connection with such sale or issuance or exercise which have not (other
than in the case of reasonable out-of-pocket expenses) been paid to
Affiliates of the Parent in connection therewith.
"Net Income" means, for any applicable period, the aggregate of all
amounts which, in accordance with GAAP, would be included as net earnings (or
net loss) on a consolidated statement of operations of the Parent and its
Subsidiaries for such period.
"Net Issuance Proceeds" means, as to any issuance of indebtedness for
borrowed money by the Parent or any of its Subsidiaries (other than Indebtedness
permitted by Section 8.2.2 (except clause (u) thereof)), the excess of:
(a) the gross cash proceeds received by the Parent or such
Subsidiary from such issuance,
over
(b) all fees and expenses with respect to underwriting commissions
and legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements actually incurred
in connection with such issuance and any prepayment premiums or penalties
paid in respect of any indebtedness refinanced with such proceeds in
accordance with the terms of this Agreement, which in each case have not
(other than in the case of reasonable out-of-pocket expenses) been paid to
Affiliates of the Parent in connection therewith.
"Net Worth" means, with respect to any Person at any date, on a
consolidated basis for such Person and its Subsidiaries, the excess of:
(a) the sum of capital stock (other than Redeemable Capital Stock)
taken at par value, capital surplus (other than in respect of Redeemable
Capital Stock) and retained earnings (or accumulated deficit) of such
Person at such date;
over
(b) treasury stock of such Person and, to the extent included in the
preceding clause (a), minority interests in Subsidiaries of such Person at
such date.
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"Non-Material Subsidiary" means any Subsidiary of the Parent that
(a) accounted for no more than 1 1/2% of consolidated revenues of
the Parent and its Subsidiaries or 1 1/2% of consolidated net earnings of
the Parent and its Subsidiaries, in each case for the four consecutive
Fiscal Quarters of the Parent ending on September 30, 1997, or if later,
the last day of the most recently completed Fiscal Quarter with respect to
which, pursuant to Section 8.1.1, financial statements have been, or are
required to have been, delivered by the Parent to the Administrative
Agent, and
(b) has assets which represent no more than 1 1/2% of the
consolidated assets of the Parent and its Subsidiaries as of September 30,
1997, or if later, the last day of the last Fiscal Quarter of the most
recently completed Fiscal Quarter with respect to which, pursuant to
Section 8.1.1, financial statements have been, or are required to have
been, delivered by the Parent to the Administrative Agent,
to the extent that Non-Material Subsidiaries do not
(i) account in the aggregate for more than 2 1/2% of consolidated
revenues of the Parent and its Subsidiaries or 2 1/2% of consolidated net
earnings of the Parent and its Subsidiaries in each case for the four
consecutive Fiscal Quarters of the Parent ending on September 30, 1997, or
if later, the last day of the most recently completed Fiscal Quarter with
respect to which, pursuant to Section 8.1.1, financial statements have
been, or are required to have been, delivered by the Parent, to the
Administrative Agent, or
(ii) have assets which represent more than 2 1/2% of the
consolidated assets of the Parent and its Subsidiaries as of September 30,
1997, or if later, the last day of the last Fiscal Quarter of the most
recently completed Fiscal Quarter with respect to which, pursuant to
Section 8.1.1, financial statements have been, or are required to have
been, delivered by the Parent to the Administrative Agent.
"Non-Vehicle Debt" means
(a) Total Debt
minus
(b) to the extent included in such Total Debt, Vehicle Debt
plus
(c) any obligation of a Subsidiary Borrower or any Subsidiary of
such Subsidiary Borrower (other than RCFC or another SPC) with respect to
Vehicles owned by such Subsidiary Borrower or such Subsidiary (i) which
exceeds the excess of (x) the aggregate Capitalized Cost (as defined in
the Base Indenture) of such Vehicles over (y) the greater of the sum of
the aggregate Depreciation Charges (as defined in the Base Indenture)
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accrued with respect to such Vehicles and the difference between such
aggregate Capitalized Cost and the fair market value of such Vehicles and
(ii) which has become due and payable and remains unpaid as of the end of
any calendar month.
"Non-Vehicle Interest Expense" means, for any applicable period, the
excess of
(a) the aggregate consolidated gross interest expense of the Parent
and its Subsidiaries for such period, as determined in accordance with
GAAP ("Aggregate Interest Expense"), including (i) commitment fees paid or
owed with respect to the then unutilized portion of the Commitment Amount,
(ii) all other fees paid or owed with respect to the issuance or
maintenance of Contingent Liabilities (including letters of credit),
which, in accordance with GAAP, would be included as interest expense,
(iii) net costs or benefits under Hedging Arrangements and (iv) the
portion of any payments made in respect of Capitalized Lease Liabilities
of the Parent and its Subsidiaries allocable to interest expense, but
excluding the amortization of debt issuance costs and other financing
expenses incurred in connection with the Transaction (provided that in the
event such gross interest expense (or any component thereof) is being
determined (x) for the four consecutive Fiscal Quarters ending on the last
day of the first Fiscal Quarter of the 1998 Fiscal Year, gross interest
expense (or the applicable component thereof) for such period shall equal
the gross interest expense (or the applicable component thereof) for the
first Fiscal Quarter of the 1998 Fiscal Year multiplied by 4.0, (y) for
the four consecutive Fiscal Quarters ending on the last day of the second
Fiscal Quarter of the 1998 Fiscal Year, gross interest expense (or the
applicable component thereof) for such period shall equal the gross
interest expense (or the applicable component thereof) for the two
consecutive Fiscal Quarters of the 1998 Fiscal Year ending on such last
day multiplied by 2.0 and (z) for the four consecutive Fiscal Quarters
ending on the last day of the third Fiscal Quarter of the 1998 Fiscal
Year, gross interest expense (or the applicable component thereof) for
such period shall equal the gross interest expense (or the applicable
component thereof) for the three consecutive Fiscal Quarters of the 1998
Fiscal Year ending on such last day multiplied by 1.33)
over
(b) to the extent included in the preceding clause (a), gross
interest expense in respect of Vehicle Debt ("Vehicle Interest Expense").
"Note" means a promissory note of any Borrower payable to the order of any
Lender, in the form of Exhibit A hereto (as such promissory note may be amended,
endorsed or otherwise modified from time to time), evidencing the aggregate
Indebtedness of such Borrower to such Lender resulting from outstanding Loans,
and also means all other promissory notes accepted from time to time in
substitution therefor or renewal thereof.
"Obligations" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured, direct or indirect, choate or
inchoate, sole, joint, several or joint and several, due or to become due,
heretofore or hereafter contracted or acquired) of each
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Borrower and each other Obligor arising under or in connection with this
Agreement, the Notes, the Letters of Credit and each other Loan Document.
"Obligor" means, as the context may require, any Borrower and any other
Person (other than any Agent, the Issuer or any Lender) to the extent such
Person is obligated under, or otherwise a party to, this Agreement or any other
Loan Document.
"OECD" means the Organization for Economic Cooperation and Development.
"Organic Document" means, relative to any Obligor, as applicable, its
certificate of incorporation, by-laws, certificate of partnership, partnership
agreement, certificate of formation, limited liability agreement and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of such Obligor's partnership interests, limited liability company interests or
authorized shares of capital stock.
"Outstanding Enhancement Letter of Credit" is defined in Section 4.2.
"Parent" is defined in the preamble.
"Participant" is defined in Section 12.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in Section 4001(a)(3) of ERISA), and to which a Borrower or any
corporation, trade or business that is, along with any Borrower, a member of a
Controlled Group, may have liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of ERISA
at any time during the preceding five years, or by reason of being deemed to be
a contributing sponsor under Section 4069 of ERISA.
"Percentage" means, relative to any Lender, the percentage set forth
opposite its name in Schedule I hereto or set forth in the Lender Assignment
Agreement, as such percentage may be adjusted from time to time pursuant to
Lender Assignment Agreement(s) executed by such Lender and its Assignee
Lender(s) and delivered pursuant to Section 12.11.1.
"Permitted Business Acquisition" means any Business Acquisition, so long
as
(a) (i) such Business Acquisition is a Permitted Stock Acquisition;
or
(ii) in the case of a Business Acquisition other than a Permitted
Stock Acquisition, the aggregate amount of expenditures of the Parent and
its Subsidiaries (excluding Vehicle Debt but including the aggregate
amount of any and all other Indebtedness assumed in connection therewith
and including the fair market value of any
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<PAGE> 39
shares of Capital Stock of the Parent issued in connection therewith) in
respect of such Business Acquisition (such amount, the "Subject Amount"),
when added to the aggregate amount of all such expenditures of the Parent
and its Subsidiaries in respect of Business Acquisitions (other than
Permitted Stock Acquisitions) during the Fiscal Year in which such Subject
Amount would be expended and from the Effective Date, does not exceed
$15,000,000 (provided that the portion thereof payable in cash does not
exceed $5,000,000) and $40,000,000, respectively, and
(b) in the event the Subject Amount (which amount shall include, in
the event such Business Acquisition is to be consummated in a series of
related transactions, the aggregate amount of all such expenditures of the
Parent and its Subsidiaries in respect of such related transactions) would
exceed $5,000,000 or in the event any portion of the consideration in
respect of such Business Acquisition is in Capital Stock of the Parent,
the Administrative Agent shall have received a Compliance Certificate
executed by the chief financial Authorized Officer of the Parent
certifying and, if reasonably requested by the Administrative Agent,
showing (in reasonable detail and with appropriate calculations and
computations in all respects reasonably satisfactory to the Administrative
Agent) that on a historical pro forma basis (after giving effect to such
Business Acquisition and all transactions related thereto (including all
Indebtedness that would be assumed or incurred as a result of such
acquisition) and all Business Acquisitions consummated prior thereto
during the applicable periods thereunder) as of the last day of the most
recently completed Fiscal Quarter with respect to which, pursuant to
Section 8.1.1, financial statements have been, or are required to have
been, delivered by the Parent and the Parent would be in compliance with
Section 8.2.4 as of the last day of such Fiscal Quarter.
"Permitted Stock Acquisition" means any Business Acquisition in respect of
a Person that was a franchisee of Dollar or Thrifty or any of their respective
Subsidiaries or that is actively engaged in the business of renting for general
use passenger automobiles, light and medium duty trucks and vans, so long as the
consideration paid in connection with such Business Acquisition consists solely
of Capital Stock of the Parent issued in connection therewith and the assumption
of Vehicle Debt (if any).
"Person" means any natural person, corporation, limited liability company,
partnership, joint venture, joint stock company, firm, association, trust or
unincorporated organization, government, governmental agency, court or any other
legal entity, whether acting in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Pledge Agreement" means the Pledge Agreement executed and delivered by
the Borrowers pursuant to Section 6.1.13, substantially in the form of Exhibit E
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.
"Primary Equity Offering" is defined in the second recital.
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"Quarterly Payment Date" means the last Business Day of each March, June,
September, and December.
"Rating Agencies" means S&P and Moody's.
"RCFC" is defined in the third recital.
"Redeemable Capital Stock" means Capital Stock of the Parent or any of its
Subsidiaries that, either by its terms, by the terms of any security into which
it is convertible or exchangeable or otherwise, (i) is or upon the happening of
an event or passage of time would be required to be redeemed (for consideration
other than shares of common stock of the Parent) on or prior to December 31,
2003, (ii) is redeemable at the option of the holder thereof (for consideration
other than shares of common stock of the Parent) at any time prior to such date
or (iii) is convertible into or exchangeable for debt securities of the Parent
or any of its Subsidiaries at any time prior to such anniversary.
"Register" is defined in Section 12.11.1.
"Regulation S-X" means the rules promulgated by the SEC and codified under
17 CFR ss.ss.210, et. seq.
"Reimbursement Due Date" is defined in Section 4.5.
"Reimbursement Obligation" is defined in Section 4.6.
"Release" means a "release," as such term is defined in CERCLA.
"Rental Expense" is defined in the definition of "Fixed Coverage Ratio".
"Replacement Letter of Credit" is defined in Section 4.2.
"Required Lenders" means, at any time, Lenders holding more than 50% of
the sum of the aggregate principal amount of the Loans then outstanding plus the
Letter of Credit Outstandings, or if no Loans and Letters of Credit are then
outstanding, Lenders having more than 50% of the Commitment Amount.
"Resource Conservation and Recovery Act" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
"S&P" means Standard & Poor's Rating Services.
"SEC" means the Securities and Exchange Commission.
"Secondary Equity Offering" is defined in the second recital.
"Secured Parties" means the Lenders, the Issuer, the Agents and each of
their respective successors, transferees and assigns.
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"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreement executed and delivered
by the Borrowers and the Subsidiary Guarantors pursuant to Section 6.1.13,
substantially in the form of Exhibit F hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Security Documents" means (i) each Mortgage, (ii) the Security Agreement,
(iii) the Pledge Agreement, (iv) the Foreign Pledge Agreements (if any), (v) the
Intercreditor Agreement and (vi) all security agreements, mortgages, deeds of
trust, pledges, collateral assignments or any other instrument evidencing or
creating any security interest in favor of the Administrative Agent in any asset
or property of the Parent or any of its Subsidiaries, in each case as amended,
supplemented or otherwise modified from time to time.
"SPC" means RCFC, Dollar Thrifty Funding, Thrifty Trust, a trust organized
under the laws of Canada, each successor entity thereto, and any other special
purpose entity formed for the sole purpose of financing the acquisition of
Vehicles.
"Stated Amount" of any letter of credit (including each Letter of Credit)
means the maximum amount available for drawing thereunder (whether or not any
conditions to drawing can then be met).
"Stated Expiry Date" is defined in Section 4.1.
"Stated Maturity Date" means December 23, 2002.
"Subordinated Debt" means all unsecured Indebtedness of the Parent, any
Subsidiary Borrower or any Subsidiary Guarantor for money borrowed which is
subordinated, upon terms satisfactory to the Administrative Agent, in right of
payment to the payment in full in cash of all Obligations of the Parent, such
Subsidiary Borrower or such Subsidiary Guarantor, as the case may be.
"Subordinated Intercompany Debt" means unsecured Indebtedness (a)
subordinated to the Obligations by provisions substantially in the form set
forth in Schedule III hereto and (b) the terms of which (including interest
rate) are not more burdensome to the obligor or obligors thereunder than those
terms generally available from independent third parties to obligors similarly
situated as such obligor or obligors.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other business entity of which more than 50% of the outstanding
capital stock (or other ownership interest) having ordinary voting power to
elect a majority of the board of directors, managers or other voting members of
the governing body of such entity (irrespective of whether at the time capital
stock (or other ownership interest) of any other class or classes of such entity
shall or might have voting power upon the occurrence of any contingency) is at
the time directly or
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indirectly owned by such Person, by such Person and one or more other
Subsidiaries of such Person, or by one or more other Subsidiaries of such
Person.
"Subsidiary Borrowers" is defined in the preamble.
"Subsidiary Guarantor" means any Subsidiary of the Parent that is a party
to the Subsidiary Guaranty.
"Subsidiary Guaranty" means the Guaranty executed and delivered by each
Subsidiary of the Parent that is a party thereto pursuant to Section 6.1.11,
substantially in the form of Exhibit G hereto, as amended, supplemented,
restated or otherwise modified from time to time.
"Surety Bond" means any instrument pursuant to which the issuer thereof
agrees to pay on behalf of a Borrower or any of its Subsidiaries an amount then
due and payable by such Borrower or such Subsidiary to another Person (including
an insurer of such Borrower or such Subsidiary).
"Syndication Agent" is defined in the preamble.
"Tax Sharing Agreement" means the Tax Sharing and Disaffiliation Agreement
dated as of November 24, 1997, between Chrysler and the Parent, as amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with the terms hereof and thereof.
"Taxes" is defined in Section 5.6.
"Thrifty" is defined in the preamble.
"Total Debt" means, without duplication, the aggregate amount of all
Indebtedness of the Parent and its Subsidiaries, other than Indebtedness of the
type described in clause (d) or (e) of the definition of "Indebtedness" or, to
the extent in respect of such type of Indebtedness, clause (h) of the definition
of "Indebtedness."
"Transaction" is defined in the fifth recital.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as an ABR Loan or a Eurodollar Loan.
"U.C.C." means the Uniform Commercial Code as from time to time in effect
in the State of New York.
"United States" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
"U.S. Dollar" and the symbol "$" mean the lawful currency of the United
States.
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"U.S. Government Obligations" means direct obligations of, or obligations
the timely payment of principal of and interest on which is fully and
unconditionally guaranteed by, the United States.
"U.S. Tax Compliance Certificate" is defined in clause (b)(Y) of Section
5.6.
"Vehicle Debt" means Indebtedness relating solely to the financing or
leasing of any Vehicle and secured thereby (and by related collateral); provided
that any obligation included as Non-Vehicle Debt pursuant to clause (c) of the
definition thereof shall not be deemed to be Vehicle Debt.
"Vehicle Interest Expense" is defined in clause (b) of the definition of
"Non-Vehicle Interest Expense."
"Vehicles" means all existing and hereafter acquired motor vehicle
inventory of either Dollar or Thrifty and their respective Subsidiaries
(including such inventory owned by other Subsidiaries of the Parent, including
RCFC, that is leased to Dollar or Thrifty or their respective Subsidiaries),
consisting of passenger automobiles, vans and light and medium duty trucks,
whether owned or leased and whether held for purposes of sale, lease, rental or
internal management use.
"Voting Stock" means, with respect to any Person, Capital Stock in respect
of the class or classes pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers, trustees or other similar governing body of such
Person (irrespective of whether or not at the time the Capital Stock of any
other class or classes shall have or might have voting power by reason of the
occurrence of any contingency).
"Walden Agreement" means the ______________ dated as of _____________,
1997, between Walden Fleet Services, Inc. and Dollar, with respect to
approximately 3,000 1998 model year vehicles manufactured by Kia Motors
Corporation.
"Welfare Plan" means a "welfare plan", as such term is defined in Section
3(1) of ERISA.
"Wholly Owned Subsidiary" means, with respect to any Person, a Subsidiary
all the Capital Stock (other than directors' qualifying shares that are required
under applicable law) of which is owned by such Person or another Wholly Owned
Subsidiary of such Person.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in the Disclosure Schedule and in each Note,
Borrowing Request, Continuation/Conversion Notice, Issuance Request, Loan
Document, notice and other communication delivered from time to time in
connection with this Agreement or any other Loan Document.
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SECTION 1.3. Cross-References. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under Section 8.2.4) shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be prepared in
accordance with, those generally accepted accounting principles ("GAAP") applied
in the preparation of the financial statements referred to in Section 7.5.
Unless otherwise expressly provided, all financial covenants and defined
financial terms shall be computed on a consolidated basis for the Parent and its
Subsidiaries, in each case without duplication.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. Commitments. On the terms and subject to the conditions of
this Agreement (including Article VI), each Lender severally agrees as follows:
SECTION 2.1.1. Loan Commitment. From time to time on any Business Day
occurring prior to the Commitment Termination Date, each Lender will make Loans
(relative to such Lender, its "Loans") to the Borrower so requesting such Loans
equal to such Lender's Percentage of the aggregate amount of the Borrowing of
Loans requested by such Borrower to be made on such day. On the terms and
subject to the conditions hereof, each Borrower may from time to time borrow,
prepay and reborrow Loans.
SECTION 2.1.2. Commitment to Issue Letters of Credit. From time to time on
any Business Day prior to the Stated Maturity Date, the Issuer will issue, and
each Lender will participate in, the Letters of Credit, in accordance with
Article IV.
SECTION 2.1.3. Lenders Not Permitted or Required to Make Loans or Issue
Letters of Credit Under Certain Circumstances. No Lender shall be permitted or
required to
(a) make any Loan if, after giving effect thereto, the aggregate
outstanding principal amount of all Loans
(i) of all Lenders would exceed the Loan Commitment Amount,
(ii) of all Lenders, together with all Letter of Credit
Outstandings, would exceed the Commitment Amount,
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(iii) of such Lender would exceed such Lender's Percentage of
the Loan Commitment Amount, or
(iv) of such Lender, together with its Percentage of all
Letter of Credit Outstandings, would exceed such Lender's Percentage
of the Commitment Amount; or
(b) issue (in the case of the Issuer) any Letter of Credit if, after
giving effect thereto
(i) all Letter of Credit Outstandings would exceed the Letter
of Credit Commitment Amount,
(ii) all Letter of Credit Outstandings, together with the
aggregate outstanding principal amount of all Loans of all Lenders
would exceed the Commitment Amount,
(iii) such Lender's Percentage of all Letter of Credit
Outstandings (after giving effect to Section 4.4) would exceed such
Lender's Percentage of the Letter of Credit Commitment Amount, or
(iv) such Lender's Percentage of all Letter of Credit
Outstandings (after giving effect to Section 4.4), together with the
aggregate outstanding principal amount of all Loans of such Lender
would exceed such Lender's Percentage of the Commitment Amount.
SECTION 2.2. Reduction of Commitment Amounts. The Commitment Amount, the
Letter of Credit Commitment Amount and the Loan Commitment Amount are subject to
reduction from time to time pursuant to this Section 2.2.
SECTION 2.2.1. Optional. The Borrowers may, from time to time on any
Business Day occurring after the Closing Date, voluntarily reduce the unused
amount of the Commitment Amount; provided, however, that all such reductions
shall require at least three Business Days' prior written notice to the
Administrative Agent and be permanent, and any partial reduction of the
Commitment Amount shall be in a minimum amount of $5,000,000 and in an integral
multiple of $1,000,000.
SECTION 2.2.2. Mandatory. The Commitment Amount shall, on the second
Business Day following the receipt by the Parent or any of its Subsidiaries of
any Net Disposition Proceeds, Net Equity Proceeds, Net Issuance Proceeds or
Casualty Proceeds, as the case may be, be reduced by an aggregate amount equal
to 100% of such Net Disposition Proceeds, 50% of such Net Equity Proceeds, 100%
of such Net Issuance Proceeds or 100% of such Casualty Proceeds, as the case may
be; provided, however, that, so long as a Default has not occurred and is not
then continuing, the Commitment Amount shall not be reduced by
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(a) the amount of Net Disposition Proceeds received by the Parent or
such Subsidiary in any Fiscal Year (commencing with the 1998 Fiscal Year)
that does not exceed $5,000,000 to the extent such proceeds are applied to
the acquisition or construction of property or assets to be used in the
business of the Borrowers and their Subsidiaries within 180 days following
the receipt thereof; provided further, however, that Net Disposition
Proceeds exceeding $2,500,000 from a single transaction shall not be
required to be applied to the reduction of the Commitment Amount if (i)
the Parent notifies the Administrative Agent in writing no later than the
thirtieth day following the receipt of such Net Disposition Proceeds of
the Parent's or such Subsidiary's good faith intention to apply such Net
Disposition Proceeds to such replacement, acquisition or construction (and
describes in reasonable written detail such proposed application no later
than the sixtieth day following the receipt of such Net Disposition
Proceeds) within 360 days following the receipt of such Net Disposition
Proceeds and (ii) the Parent or such Subsidiary in fact uses such Net
Disposition Proceeds as specified in such notice to the Administrative
Agent within 360 days following the receipt of such Net Disposition
Proceeds; and
(b) the amount of any Casualty Proceeds received by the Parent or
such Subsidiary that are applied to the rebuilding or replacement of the
property or assets which were the source of such Casualty Proceeds within
180 days following the occurrence of such Casualty Event or such longer
period as may otherwise be provided in any Mortgage with respect to such
property or assets.
Each such reduction in the Commitment Amount shall be permanent and automatic.
SECTION 2.2.3. Corresponding Reductions. Any reduction of the Commitment
Amount which reduces the Commitment Amount below the then current amount of the
Letter of Credit Commitment Amount or the Loan Commitment Amount, as the case
may be, shall result in an automatic and corresponding reduction of the Letter
of Credit Commitment Amount or the Loan Commitment Amount, as the case may be,
to the amount of the Commitment Amount, as so reduced, without any further
action on the part of the Administrative Agent, the Lenders or otherwise.
SECTION 2.3. Borrowing Procedure. By delivering a Borrowing Request to the
Administrative Agent on or before 11:00 a.m. (New York City, New York time) on a
Business Day, any Borrower may from time to time irrevocably request,
(a) on such Business Day (but in any event not more than five
Business Days' notice) in the case of ABR Loans, or
(b) on not less than three (but in any event not more than five)
Business Days' notice in the case of Eurodollar Loans,
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(c) that a Borrowing be made, in the case of ABR Loans, in a minimum
amount of $1,000,000 and an integral multiple of $100,000, in the case of
Eurodollar Loans, in a minimum amount of $5,000,000 and an integral
multiple of $100,000 or, in either case, in the unused amount of the
Commitment. On the terms and subject to the conditions of this Agreement,
each Borrowing shall be comprised of the type of Loans, and shall be made
on the Business Day specified in such Borrowing Request. On or before 1:00
p.m. (New York City, New York time) on such Business Day, each Lender
shall deposit with the Administrative Agent same day funds in an amount
equal to such Lender's Percentage of the requested Borrowing. Such deposit
will be made to an account which the Administrative Agent shall specify
from time to time by notice to the Lenders. To the extent funds are
received from the Lenders, the Administrative Agent shall make such funds
available to such Borrower by wire transfer to the accounts such Borrower
shall have specified in its Borrowing Request. No Lender's obligation to
make any Loan shall be affected by any other Lender's failure to make any
Loan.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 11:00
a.m. (New York City, New York time) on a Business Day, any Borrower may from
time to time irrevocably elect with respect to Loans borrowed by it,
(a) on such Business Day in the case of ABR Loans, or
(b) on not less than three (but in any event not more than five)
Business Days' notice in the case of Eurodollar Loans,
that all, or any portion in an aggregate minimum amount of $5,000,000 and an
integral multiple of $100,000, in the case of any Eurodollar Loan, be converted
into an ABR Loan, or an aggregate minimum amount of $5,000,000 and an integral
multiple of $100,000, in the case of any ABR Loan or Eurodollar Loan, as the
case may be, be converted into or continued as, as the case may be, a Eurodollar
Loan (in the absence of delivery of a Continuation/ Conversion Notice with
respect to any Eurodollar Loan at least three Business Days (but not more than
five Business Days) before the last day of the then current Interest Period with
respect thereto, such Eurodollar Loan shall, on such last day, automatically
convert to an ABR Loan); provided, however, that (i) each such conversion or
continuation shall be pro rated among the applicable outstanding Loans of all
Lenders and (ii) no portion of the outstanding principal amount of any Loans may
be continued as, or be converted into, Eurodollar Loans when any Default has
occurred and is continuing.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert Eurodollar Loans hereunder by causing
one of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such Eurodollar Loan; provided,
however, that such Eurodollar Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the applicable Borrower to
repay such Eurodollar Loan shall nevertheless be to such Lender for the account
of such foreign branch, Affiliate or international banking facility. In
addition, each Borrower hereby consents
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and agrees that, for purposes of any determination to be made for purposes of
Section 5.1, 5.2, 5.3 or 5.4, it shall be conclusively assumed that each Lender
elected to fund all Eurodollar Loans by purchasing deposits in U.S. Dollars in
its Eurodollar Office's interbank eurodollar market.
SECTION 2.6. Loan Accounts. (a) The Loans and participations in the Letter
of Credit Outstandings made by each Lender and the Letters of Credit issued by
the Issuer shall be evidenced by one or more loan accounts or records maintained
by such Lender or the Issuer, as the case may be, in the ordinary course of
business. The loan accounts or records maintained by the Administrative Agent,
the Issuer and each Lender shall be conclusive absent manifest error of the
amount of the Loans, the participations in Letter of Credit Outstandings and the
Letters of Credit made by the Lenders and the Issuer, as the case may be, and
the interest and payments thereon. Any failure so to record or any error in
doing so shall not, however, limit or otherwise affect the obligation of any
Borrower hereunder to pay any amount owing with respect to the Loans and Letters
of Credit, as the case may be, or of the Lenders with respect to participations
in Letter of Credit Outstandings.
(b) If requested by any Lender, such Lender's Loans under the Loan
Commitment shall be evidenced by a Note payable to the order of such Lender in a
maximum principal amount equal to such Lender's Percentage of the original Loan
Commitment Amount. Each Borrower hereby irrevocably authorizes each Lender
having a Note to make (or cause to be made) appropriate notations on the grid
attached to such Lender's Note (or on any continuation of such grid), which
notations, if made, shall evidence, inter alia, the date of, the outstanding
principal of, and the interest rate and Interest Period applicable to the Loans
evidenced thereby. Such notations shall be conclusive and binding on applicable
Borrower absent manifest error; provided, however, that the failure of any
Lender having a Note to make any such notations shall not limit or otherwise
affect any Obligations of any Borrower or any other Obligor.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. Each Borrower shall repay in full
the unpaid principal amount of each of its Loans upon the Stated Maturity Date.
Prior thereto, such Borrower
(a) may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of
any Loans borrowed by it; provided, however, that
(i) any such prepayment shall be made pro rata among Loans of
the same type, and, if applicable, having the same Interest Period
of all Lenders;
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(ii) all such voluntary prepayments shall require prior
irrevocable written notice to the Administrative Agent received by
the Administrative Agent no later than 11:00 a.m. (New York City,
New York)
(A) on such Business Day in the case of ABR Loans, or
(B) on not less than three (but in any event not more
than five) Business Days' notice in the case of Eurodollar
Loans, and
(iii) all such voluntary partial prepayments shall be, in the
case of ABR Loans, in an aggregate minimum amount of $1,000,000 and
an integral multiple of $100,000 and, in the case of Eurodollar
Loans, in an aggregate minimum amount of $5,000,000 and an integral
multiple of $100,000;
(b) shall, on each date when any reduction in the Commitment Amount
shall become effective (including pursuant to Section 2.2), make a
mandatory prepayment equal to the excess, if any, of the aggregate,
outstanding principal amount of all Loans and Letter of Credit
Outstandings over the Commitment Amount in effect on such date (following
such reduction), which mandatory prepayment shall be applied (or held for
application, as the case may be) by the Lenders
(i) first, to the payment of the aggregate unpaid principal
amount of those Loans then outstanding equal to the excess, if any,
of the aggregate, outstanding principal amount of all Loans over the
Loan Commitment Amount in effect on such date (following such
reduction, if applicable);
(ii) second, to the payment and/or cash collateralization of
the then outstanding Letter of Credit Outstandings equal to the
excess, if any, of the Letter of Credit Outstandings over the Letter
of Credit Commitment Amount in effect on such date (following such
reduction, if applicable); and
(iii) third, to the payment of the aggregate unpaid principal
amount of the Loans, and then to the payment and/or cash
collateralization of the then outstanding Letter of Credit
Outstandings equal to the excess, if any, of the aggregate,
outstanding principal amount of all Loans and Letter of Credit
Outstandings over the Commitment Amount in effect on such date; and
(c) shall, immediately upon any acceleration of the Stated Maturity
Date of any Loans pursuant to Section 9.2 or Section 9.3, repay all Loans,
unless, pursuant to Section 9.3, only a portion of all Loans is so
accelerated.
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty (except as may be required by Section 5.4).
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SECTION 3.2. Interest Provisions. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
SECTION 3.2.1. Rates. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, any Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as an ABR Loan,
equal to the sum of the Alternate Base Rate from time to time in effect
plus the Applicable Margin for such Loan; and
(b) on that portion maintained as a Eurodollar Loan, during each
Interest Period applicable thereto, equal to the sum of the Eurodollar
Rate (Reserve Adjusted) for such Interest Period plus the Applicable
Margin for such Loan.
All Eurodollar Loans shall bear interest from and including the first day
of the applicable Interest Period to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such Eurodollar
Loan.
SECTION 3.2.2. Post-Maturity Rates. After the date any principal amount of
any Loan is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) and not paid on such date, or after any other
monetary Obligation of any Borrower or any other Obligor, as the case may be,
shall have become due and payable and not be paid on such date, such Borrower or
such other Obligor, as the case may be, shall pay, but only to the extent
permitted by law and not otherwise provided for in any Enhancement Letter of
Credit in respect of a Liquidity Obligation, interest (after as well as before
judgment) on the aggregate principal amount of all Loans then outstanding and on
such other monetary Obligations at a rate per annum equal
(a) in the case of the aggregate principal amount of all Loans then
outstanding, to the interest rate otherwise applicable thereto plus an
additional margin of 200 basis points; and
(b) in the case of such other monetary Obligations of such Borrower
or such other Obligor (other than such obligations comprised of the
principal amount of any Loan), to the Alternate Base Rate from time to
time in effect plus a margin of 200 basis points.
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
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(b) on the date of any optional or required payment or prepayment,
in whole or in part, of principal outstanding on such Loan (to the extent
of the amount prepaid or required to be prepaid);
(c) with respect to ABR Loans, on each Quarterly Payment Date
occurring on or after March 31, 1998;
(d) with respect to Eurodollar Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, on the same calendar day of every third month of such
Interest Period as the day on which such Interest Period commenced);
(e) with respect to any ABR Loans converted into Eurodollar Loans on
a day when interest would not otherwise have been payable pursuant to
clause (c), on the date of such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of which
is accelerated pursuant to Section 9.2 or Section 9.3, immediately upon
such acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
SECTION 3.3. Fees. The Borrowers, jointly and severally, agree to pay the
fees set forth in this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fees. The Borrowers, jointly and severally,
agree to pay to the Administrative Agent for the account of each Lender, for the
period (including any portion thereof when any of its Commitment is suspended by
reason of any Borrower's inability to satisfy any condition of Article VI)
commencing on the Effective Date and continuing through the Commitment
Termination Date, a commitment fee equal to the Applicable Commitment Fee on
such Lender's Percentage of the sum of the average daily unused portion of the
Commitment Amount. Such commitment fee shall be payable by the Borrowers,
jointly and severally, in arrears on each Quarterly Payment Date, on or after
March 31, 1998, and on the Commitment Termination Date.
SECTION 3.3.2. Arrangement Fees. In accordance with the letter agreement
(the "Fee Letter") among the Borrowers, Credit Suisse First Boston, Chase and
Chase Securities Inc. dated November 19, 1997, the Borrowers, jointly and
severally, shall pay on the Closing Date an arrangement fee to the Arrangers for
the account of the Lenders in such proportion as the Arrangers shall determine
in their sole discretion.
SECTION 3.3.3. Administrative Agent's Fee. The Borrowers, jointly and
severally, agree to pay to the Administrative Agent for its own account, a
non-refundable initial fee in the amount set forth in the Fee Letter, payable on
the Closing Date and, thereafter, a non-refundable
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annual fee in the amount set forth in the Fee Letter, payable in advance on each
anniversary of the Closing Date.
SECTION 3.3.4. Letter of Credit Face Amount Fee. The Borrower or Borrowers
requesting a Letter of Credit agree to pay to the Administrative Agent, for the
account of the Lenders, a fee for such Letter of Credit for the period from and
including the date of the issuance of such Letter of Credit to (but not
including) the date upon which such Letter of Credit expires or is terminated,
calculated at a per annum rate equal to the Applicable Margin with respect to
Eurodollar Loans on the Stated Amount of such Letter of Credit. Such fee shall
be payable by such Borrower or Borrowers in arrears each Quarterly Payment Date,
on or after March 31, 1998, commencing on the first such date after the issuance
of such Letter of Credit.
SECTION 3.3.5. Letter of Credit Issuing Fee. The Borrower or Borrowers
requesting a Letter of Credit agree to pay to the Administrative Agent, for the
account of the Issuer, an issuing fee for such Letter of Credit for the period
from and including the date of issuance of such Letter of Credit to (but not
including) the date upon which such Letter of Credit expires or is terminated of
1/8% per annum on the Stated Amount of such Letter of Credit. Such fee shall be
payable by such Borrower or Borrowers in arrears on each Quarterly Payment Date
on or after March 31, 1998, and on the Commitment Termination Date for any
period then ending for which such fee shall not theretofore have been paid,
commencing on the first such date after the issuance of such Letter of Credit.
SECTION 3.3.6. Letter of Credit Administrative Fee. Each Borrower agrees
to pay to the Administrative Agent, for the account of the Issuer, the amounts
set forth in Section 4.3.
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.1. Issuance Requests. By delivering to the Administrative Agent
and the Issuer an Issuance Request, together with an Enhancement Letter of
Credit Application and Agreement if such Issuance Request is in respect of an
Enhancement Letter of Credit on or before 11:00 a.m. (New York City, New York
time), a Subsidiary Borrower may request, from time to time prior to the
Commitment Termination Date and on not less than three nor more than 30 Business
Days' notice, in the case of General Letters of Credit, and on not less than 15
nor more than 30 Business Days' notice, in the case of Enhancement Letters of
Credit, that the Issuer issue Letters of Credit in support of financial
obligations of such Subsidiary Borrower or any other Account Party incurred (in
the case of General Letters of Credit) in the ordinary course of business of
such Borrower or such Account Party, as the case may be, and which are described
in such Issuance Request; provided that, in the case of an Issuance Request that
requests an increase in the Stated Amount of an Enhancement Letter of Credit
then outstanding, such Issuance Request shall be so delivered on not less than
five nor more than fifteen Business Days notice. Upon receipt of an Issuance
Request and, if applicable, an Enhancement Letter of Credit
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Application and Agreement, the Administrative Agent shall promptly notify the
Lenders thereof. Each Letter of Credit shall by its terms:
(a) be issued in a Stated Amount denominated in U.S. Dollars which
(i) is at least $25,000;
(ii) does not exceed (or would not exceed)
(A) an amount equal to the excess, if any, of (x) the
Commitment Amount over (y) the sum of all Letter of Credit
Outstandings plus the aggregate outstanding principal amount
of all Loans, or
(B) an amount equal to the excess, if any, of the Letter
of Credit Commitment Amount over all Letter of Credit
Outstandings; and
(b) be stated to expire on a date (its "Stated Expiry Date") no
later than the earlier of (i) (A) one year from its date of issuance, in
the case of a General Letter of Credit, and (B) three years from its date
of issuance, in the case of an Enhancement Letter of Credit, and (ii) the
Commitment Termination Date in effect at the time of such issuance.
So long as no Default has occurred and is continuing, by delivery to the Issuer
and the Administrative Agent of an Issuance Request, at least three but not more
than ten Business Days prior to the Stated Expiry Date of any issued General
Letter of Credit or prior to the date any issued General Letter of Credit
containing an "evergreen" or similar automatic extension feature is scheduled to
automatically be extended (unless the beneficiary thereof shall have received
notice to the contrary from the Issuer), the applicable Subsidiary Borrower may
request the Issuer to extend the Stated Expiry Date of such issued General
Letter of Credit for an additional period not to exceed the earlier of (A) one
year from its date of extension and (B) the Commitment Termination Date in
effect at the time of such extension. So long as no Default has occurred and is
continuing, the applicable Subsidiary Borrower (or the applicable Account Party)
may request the Issuer to extend the Stated Expiry Date of any issued
Enhancement Letter of Credit for an additional period not to exceed the earlier
of (A) two years from its date of extension and (B) the Commitment Termination
Date in effect at the time of such extension; provided such request is made in
accordance with the terms of the Enhancement Letter of Credit Application and
Agreement relating thereto and is accompanied by delivery to the Issuer and the
Administrative Agent of an Issuance Request. Each Enhancement Letter of Credit
that provides for LOC Liquidity Disbursements shall be issued pursuant to an
Enhancement Letter of Credit Application and Agreement substantially in the form
of Exhibit J, with such modifications thereto as the Administrative Agent and
the Issuer may consent (a "CP Enhancement Letter of Credit Application and
Agreement"). Notwithstanding any provision contained in the foregoing to the
contrary, no Borrower may request the issuance of, and the Issuer shall not have
any obligation to issue, any Letter of Credit at any time when, and so long as,
there shall be
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outstanding in the aggregate 50 Letters of Credit, unless otherwise consented to
by the Issuer and the Administrative Agent.
SECTION 4.2. Issuances and Extensions. On the terms and subject to the
conditions of this Agreement (including Article VI), the Issuer shall issue
Letters of Credit, and extend the Stated Expiry Dates of outstanding Letters of
Credit, in accordance with the Issuance Requests made therefor and, if
applicable, the Enhancement Letter of Credit Application and Agreement relating
thereto; provided, however, that the issuance of an Enhancement Letter of Credit
(a "Replacement Enhancement Letter of Credit") to replace another outstanding
Enhancement Letter of Credit (an "Outstanding Enhancement Letter of Credit")
shall not require the satisfaction of the terms and conditions set forth in
Section 6.2.1 so long as (a) the issuance of the Replacement Enhancement Letter
of Credit is required under the Enhancement Letter of Credit Application and
Agreement relating to the Outstanding Enhancement Letter of Credit, (b) the
Replacement Letter of Credit has terms substantially identical to those of the
Outstanding Enhancement Letter of Credit, and (c) the Outstanding Enhancement
Letter of Credit is terminated contemporaneously with the issuance of the
Replacement Enhancement Letter of Credit. The Issuer shall promptly confirm any
such issuance or extension (including the date of such issuance or extension),
as the case may be, to the Administrative Agent. The Issuer will make available
the original of each Letter of Credit which it issues in accordance with the
Issuance Request and the Enhancement Letter of Credit Application and Agreement,
if applicable, therefor to the beneficiary thereof (and will promptly provide
each of the Lenders with a copy of such Letter of Credit) and will notify the
beneficiary under any Letter of Credit of any extension of the Stated Expiry
Date thereof.
SECTION 4.3. Expenses. Each Borrower agrees to pay to the Administrative
Agent for the account of the Issuer all reasonable and customary administrative
expenses of the Issuer in connection with the issuance, maintenance,
modification (if any) and administration of each Letter of Credit requested by
such Borrower promptly upon demand from time to time.
SECTION 4.4. Other Lenders' Participation. Each Letter of Credit issued
pursuant to Section 4.2 shall, effective upon its issuance and without further
action, be issued on behalf of all Lenders (including the Issuer thereof) pro
rata according to their respective Percentages. Each Lender shall, to the extent
of its Percentage, be deemed irrevocably to have participated in the issuance of
such Letter of Credit and (x) shall be responsible to reimburse promptly the
Issuer thereof for Reimbursement Obligations which have not been reimbursed by
the applicable Borrower in accordance with Section 4.5, or which have been
reimbursed by such Borrower but must be returned, restored or disgorged by the
Issuer for any reason, or (y) in the case of an LOC Liquidity Disbursement,
shall participate in such LOC Liquidity Disbursement in accordance with the
terms of the Enhancement Letter of Credit Application and Agreement relating
thereto. Each Lender shall, to the extent of its Percentage, be entitled to
receive from the Administrative Agent a ratable portion of the letter of credit
fees received by the Administrative Agent pursuant to Section 3.3.4 with respect
to each Letter of Credit. In the event that (a) the applicable Borrower or
Borrowers shall fail to reimburse the Issuer, or if for any reason Loans shall
not be made to fund any Reimbursement Obligation, all as provided in Section 4.5
and in an amount equal to the amount of any drawing honored by the Issuer under
a Letter of Credit issued by it,
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(b) the Issuer must for any reason return or disgorge such reimbursement or (c)
an LOC Liquidity Disbursement has occurred, the Issuer shall promptly notify the
Administrative Agent of the unreimbursed amount of such drawing and of such
Lender's respective participation therein. Each Lender shall make available to
the Administrative Agent for the account of the Issuer, whether or not any
Default shall have occurred and be continuing, an amount equal to its respective
participation in same day or immediately available funds at the office of the
Issuer specified in such notice not later than 11:00 a.m. (New York City, New
York time) on the Business Day (under the laws of the jurisdiction of the
Issuer) after the date notified by the Issuer. In the event that any Lender
fails to make available to the Administrative Agent for the account of the
Issuer the amount of such Lender's participation in such Letter of Credit as
provided herein, the Issuer shall be entitled to recover such amount on demand
from such Lender together with interest at the daily average Federal Funds Rate
for three Business Days (together with such other compensatory amounts as may be
required to be paid by such Lender to the Administrative Agent and/or the
Issuer, as the case may be, pursuant to the Rules for Interbank Compensation of
the Council on International Banking or the Clearinghouse Compensation
Committee, as the case may be, as in effect from time to time) and thereafter at
the Alternate Base Rate plus 200 basis points. Nothing in this Section shall be
deemed to prejudice the right of any Lender to recover from the Issuer any
amounts made available by such Lender to the Issuer pursuant to this Section in
the event that it is determined by a court of competent jurisdiction that the
payment with respect to a Letter of Credit by the Issuer in respect of which
payment was made by such Lender constituted gross negligence or wilful
misconduct on the part of the Issuer. The Issuer shall distribute to the
Administrative Agent for the account of each other Lender which has paid all
amounts payable by it under this Section with respect to any Letter of Credit
issued by the Issuer such other Lender's Percentage of all payments received by
the Issuer from any Borrower in reimbursement of drawings honored by the Issuer
under such Letter of Credit when such payments are received.
SECTION 4.5. Disbursements. The Issuer will notify the applicable Borrower
or Borrowers and the Administrative Agent promptly of the presentment for
payment of any Letter of Credit, together with notice of the date (a
"Disbursement Date") such payment shall be made. Subject to the terms and
provisions of such Letter of Credit, the Issuer shall make such payment to the
beneficiary (or its designee) of such Letter of Credit. The applicable Borrower
or Borrowers will reimburse the Issuer for all amounts which it has disbursed
under such Letter of Credit, except to the extent such amounts are in respect of
an LOC Liquidity Disbursement (in which case such amounts shall be reimbursed to
the Issuer or the Lenders by the applicable SPC in accordance with the
provisions of the Enhancement Letter of Credit Application and Agreement
relating thereto (the obligation of such SPC to reimburse the Issuer or the
Lenders for such amounts in accordance with such terms being herein referred to
as a "Liquidity Obligation")), on the Disbursement Date, if such Borrower or
Borrowers are notified of such disbursement prior to 12:00 noon (New York, New
York, time) on the Disbursement Date, or on the Business Day immediately
succeeding the Disbursement Date, if such Borrower or Borrowers are not so
notified (the "Reimbursement Due Date"). To the extent the Issuer is not
reimbursed in full in respect of any Reimbursement Obligation payable by such
Borrower or Borrowers on the Disbursement Date, such Reimbursement Obligation
shall accrue interest from (and including) the Disbursement Date at a
fluctuating rate per annum equal to the sum of the
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Alternate Base Rate from time to time in effect, plus the Applicable Margin for
ABR Loans from time to time in effect, plus from (and including) the
Reimbursement Due Date, a margin of 200 basis points, payable on demand. In the
event the Issuer is not reimbursed by such Borrower or Borrowers on the
Disbursement Date for any Reimbursement Obligation in respect of any Letter of
Credit due and owing on such Disbursement Date, or if the Issuer must for any
reason return or disgorge such reimbursement, the Lenders (including the Issuer)
shall, on the terms and subject to the conditions of this Agreement (including
the conditions set forth in Article VI), fund such Reimbursement Obligation by
making, on the next Business Day, Loans which are ABR Loans as provided in
Section 2.3 (such Borrower or Borrowers being deemed to have given a timely
Borrowing Request therefor for such amount); provided, however, for the purpose
of determining the availability of the Commitments to make Loans immediately
prior to giving effect to the application of the proceeds of such Loans, such
Reimbursement Obligation shall be deemed not to be outstanding at such time.
SECTION 4.6. Reimbursement. The obligation (a "Reimbursement Obligation")
of an Obligor under Section 4.5 or under the applicable Enhancement Letter of
Credit Application and Agreement to reimburse the Issuer with respect to each
disbursement (including interest thereon), and each Lender's obligation to make
participation payments in each drawing which has not been reimbursed by the
applicable Borrower or Borrowers or the applicable Account Party, shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim, or defense to payment which such Borrower or Borrowers
may have or have had against any Lender or any beneficiary of a Letter of
Credit, including any defense based upon the occurrence of any Default, any
draft, demand or certificate or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient, the failure of
any disbursement to conform to the terms of the applicable Letter of Credit (if,
in the Issuer's good faith opinion, such disbursement is determined to be
appropriate) or any non-application or misapplication by the beneficiary of the
proceeds of such disbursement, or the legality, validity, form, regularity, or
enforceability of such Letter of Credit; provided, however, that nothing herein
shall adversely affect the right of such Borrower or Borrowers to commence any
proceeding against the Issuer for any wrongful disbursement made by the Issuer
under a Letter of Credit as a result of acts or omissions constituting gross
negligence or willful misconduct on the part of the Issuer.
SECTION 4.7. Deemed Disbursements. Upon the occurrence and during the
continuation of any Event of Default or the occurrence of the Commitment
Termination Date, an amount equal to that portion of Letter of Credit
Outstandings attributable to outstanding and undrawn Letters of Credit shall, at
the election of the Issuer acting on instructions from the Required Lenders, and
without demand upon or notice to any Borrower, be deemed to have been paid or
disbursed by the Issuer under such Letters of Credit (notwithstanding that such
amount may not in fact have been so paid or disbursed), and, upon notification
by the Issuer to the Administrative Agent and the applicable Borrower or
Borrowers of its obligations under this Section, such Borrower or Borrowers
shall be immediately obligated to reimburse the Issuer the amount deemed to have
been so paid or disbursed by the Issuer. Any amounts so received by the Issuer
from such Borrower or Borrowers pursuant to this Section shall be held as
collateral security for the repayment of such Borrower's or Borrowers'
obligations in connection with the
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Letters of Credit issued by the Issuer. At any time when such Letters of Credit
shall terminate and all Obligations of the Issuer are either terminated or paid
or reimbursed to the Issuer in full, the Obligations of such Borrower or
Borrowers under this Section shall be reduced accordingly (subject, however, to
reinstatement in the event any payment in respect of such Letters of Credit is
recovered in any manner from the Issuer), and the Issuer will return to such
Borrower or Borrowers the excess, if any, of
(a) the aggregate amount deposited by such Borrower or Borrowers
with the Issuer and not theretofore applied by the Issuer to any
Reimbursement Obligation
over
(b) the aggregate amount of all Reimbursement Obligations to the
Issuer pursuant to this Section, as so adjusted.
At such time when all Events of Default shall have been cured or waived, the
Issuer shall return to such Borrower or Borrowers all amounts then on deposit
with the Issuer pursuant to this Section. All amounts on deposit pursuant to
this Section shall, until their application to any Reimbursement Obligation or
their return to such Borrower or Borrowers, as the case may be, bear interest at
the daily average Federal Funds Rate from time to time in effect (net of the
costs of any reserve requirements, in respect of amounts on deposit pursuant to
this Section, pursuant to F.R.S. Board Regulation D), which interest shall be
held by the Issuer as additional collateral security for the repayment of such
Borrower's or Borrowers' Obligations in connection with the Letters of Credit
issued by the Issuer.
SECTION 4.8. Nature of Reimbursement Obligations. Each Borrower shall
assume all risks of the acts, omissions, or misuse of any Letter of Credit
requested by it by the beneficiary thereof. Neither the Issuer nor any Lender
shall be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness, or legal
effect of any Letter of Credit or any document submitted by any party in
connection with the application for and issuance of a Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent, or forged;
(b) the form, validity, sufficiency, accuracy, genuineness, or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder
or proceeds thereof in whole or in part, which may prove to be invalid or
ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions, or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, or otherwise;
or
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(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a disbursement under a Letter
of Credit or of the proceeds thereof.
None of the foregoing shall affect, impair, or prevent the vesting of any of the
rights or powers granted the Issuer or any Lender hereunder. In furtherance and
extension, and not in limitation or derogation, of any of the foregoing, any
action taken or omitted to be taken by the Issuer in good faith shall be binding
upon each Borrower and, in the absence of gross negligence or willful misconduct
as determined by a final judgment of a court of competent jurisdiction, shall
not put the Issuer under any resulting liability to such Borrower.
SECTION 4.9. Indemnity. In addition to amounts payable as elsewhere
provided herein, the Borrowers hereby, jointly and severally, agree to protect,
indemnify, pay and save the Issuer harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees and allocated costs of internal counsel) which the
Issuer may incur or be subject to as a consequence, direct or indirect, of
(a) the issuance of any Letter of Credit, other than as a result of
the gross negligence or willful misconduct of the Issuer or a breach by
the Issuer (or its agents or employees or any other Person under its
control) of any obligation of the Issuer under such Letter of Credit to
the Borrower which is the account party thereof, as determined by a final
judgment of a court of competent jurisdiction, or
(b) the failure of the Issuer to honor a drawing under any Letter of
Credit as a result of any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto government or governmental
authority.
SECTION 4.10. Borrowers' Guaranty of Reimbursement Obligations of its
Subsidiaries. Each Borrower agrees as follows in respect of the Reimbursement
Obligations of their respective Subsidiaries (other than SPCs):
SECTION 4.10.1. Guaranty. Each Borrower hereby, absolutely,
unconditionally and irrevocably
(a) guarantees the full and punctual payment when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand
or otherwise, of all Reimbursement Obligations (other than Liquidity
Obligations) now or hereafter existing, of each Subsidiary Guarantor that
is an Account Party which arise out of, or are incurred in connection
with, such Letters of Credit, whether for principal, interest, fees,
expenses or otherwise (including all such amounts which would become due
but for the operation of the automatic stay under Section 362(a) of the
United States Bankruptcy Code, 11 U.S.C. ss.362(a), and the operation of
Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C.
ss.502(b) and ss.506(b)), and
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(b) indemnifies and holds harmless each Secured Party and each
holder of a Note for any and all costs and expenses (including reasonable
attorneys' fees and expenses) incurred by such Secured Party or such
holder, as the case may be, in enforcing any rights under the guaranty
contained in this Section 4.10;
provided, however, that in the case of the guaranty made by each of Dollar and
Thrifty in respect of a Subsidiary Guarantor that is not its Subsidiary, Dollar
or Thrifty, as the case may be, shall be liable under the guaranty set forth in
this Section 4.10 for the maximum amount of such liability that can be hereby
incurred without rendering the guaranty set forth in this Section 4.10, as it
relates to Dollar or Thrifty, as the case may be, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount. The guaranty contained in this Section 4.10 constitutes a
guaranty of payment when due and not of collection, and each Borrower
specifically agrees that it shall not be necessary or required that any Secured
Party exercise any right, assert any claim or demand or enforce any remedy
whatsoever against any Account Party or any other Obligor (or any other Person)
before or as a condition to the obligations of such Borrower under the guaranty
contained in this Section 4.10 (such obligations hereinafter referred to as the
"Guaranteed Obligations").
SECTION 4.10.2. Acceleration of Guaranty. Each Borrower agrees that, if an
Event of Default of the nature set forth in Section 9.1.9 shall occur at a time
when any of the Guaranteed Obligations of any Account Party may not then be due
and payable, such Borrower agrees that it will pay to the Administrative Agent
for the account of the Secured Parties forthwith the full amount which would be
payable under the guaranty contained in this Section 4.10 by such Borrower if
all such Guaranteed Obligations were then due and payable.
SECTION 4.10.3. Guaranty Absolute, etc. The guaranty contained in this
Section 4.10 shall in all respects be a continuing, absolute, unconditional and
irrevocable guaranty of payment, and shall remain in full force and effect until
all Guaranteed Obligations of the Account Parties have been paid in full in
cash, all Obligations of each Borrower and each other Obligor hereunder have
been paid in full in cash, all Letters of Credit have been terminated or expired
and all Commitments shall have terminated. Each Borrower guarantees that the
Guaranteed Obligations of the Account Parties will be paid strictly in
accordance with the terms of this Agreement and each other Loan Document under
which they arise, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Secured Party or any holder of any Note with respect thereto. The liability of
each Borrower under the guaranty contained in this Section 4.10 shall be
absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of this
Agreement, any Note or any other Loan Document;
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(b) the failure of any Secured Party or any holder of any Note
(i) to assert any claim or demand or to enforce any right or
remedy against any Account Party, any other Obligor or any other
Person (including any other guarantor (including such Borrower))
under the provisions of this Agreement, any Note, any other Loan
Document or otherwise, or
(ii) to exercise any right or remedy against any other
guarantor (including such Borrower) of, or collateral securing, any
Guaranteed Obligations of any Account Party;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations of any Account
Party, or any other extension, compromise or renewal of any Guaranteed
Obligation of any Account Party;
(d) any reduction, limitation, impairment or termination of any
Guaranteed Obligations of any Account Party for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall
not be subject to (and such Borrower hereby waives any right to or claim
of) any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or
occurrence affecting, any Guaranteed Obligations of any Account Party or
otherwise;
(e) any amendment to, rescission, waiver, or other modification of,
or any consent to departure from, any of the terms of this Agreement, any
Note or any other Loan Document;
(f) any addition, exchange, release, surrender or non-perfection of
any collateral, or any amendment to or waiver or release or addition of,
or consent to departure from, any other guaranty, held by any Secured
Party or any holder of any Note securing any of the Guaranteed Obligations
of any Account Party; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any Account
Party any surety or any guarantor.
SECTION 4.10.4. Reinstatement, etc. Each Borrower agrees that the guaranty
contained in this Section 4.10 shall continue to be effective or be reinstated,
as the case may be, if at any time any payment (in whole or in part) of any of
the Guaranteed Obligations is rescinded or must otherwise be restored by any
Secured Party or any holder of any Note, upon the insolvency, bankruptcy or
reorganization of any Account Party or otherwise, all as though such payment had
not been made.
SECTION 4.10.5. Waiver, etc. Each Borrower hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations of any Account Party or any other Obligor and the
guaranty contained in this Section 4.10 and any
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requirement that the Administrative Agent, any other Secured Party or any holder
of any Note protect, secure, perfect or insure any security interest or Lien, or
any property subject thereto, or exhaust any right or take any action against
any Account Party, any other Obligor or any other Person (including any other
guarantor) or entity or any collateral securing the Guaranteed Obligations of
any Account Party.
SECTION 4.10.6. Postponement of Subrogation, etc. Each Borrower agrees
that it will not exercise any rights which it may acquire by way of rights of
subrogation under the guaranty contained in this Section 4.10, by any payment
made under the guaranty contained in this Section 4.10 or otherwise, until the
prior payment in full in cash of all Guaranteed Obligations of each Account
Party, the prior payment in full in cash of all Obligations of each Borrower,
the termination or expiration of all Letters of Credit and the termination of
all Commitments. Any amount paid to any Borrower on account of any such
subrogation rights prior to the payment in full in cash of all Guaranteed
Obligations of each Account Party shall be held in trust for the benefit of the
Secured Parties and each holder of a Note and shall immediately be paid to the
Administrative Agent for the benefit of the Secured Parties and each holder of a
Note and credited and applied against the Guaranteed Obligations of each Account
Party, whether matured or unmatured, in accordance with the terms of this
Agreement; provided, however, that if
(a) such Borrower has made payment to the Secured Parties and each
holder of a Note of all or any part of the Guaranteed Obligations of any
Account Party, and
(b) all Guaranteed Obligations of each Account Party have been paid
in full in cash, all Obligations of each Borrower have been paid in full
in cash, all Letters of Credit have been terminated or expired and all
Commitments have been permanently terminated,
each Secured Party and each holder of a Note agrees that, at such Borrower's
request, the Administrative Agent, on behalf of the Secured Parties and the
holders of the Notes, will execute and deliver to such Borrower appropriate
documents (without recourse and without representation or warranty) necessary to
evidence the transfer by subrogation to such Borrower of an interest in the
Guaranteed Obligations of each Account Party resulting from such payment by such
Borrower. In furtherance of the foregoing, for so long as any Obligations
(including Guaranteed Obligations) or Commitments remain outstanding, each
Borrower shall refrain from taking any action or commencing any proceeding
against any Account Party (or its successors or assigns, whether in connection
with a bankruptcy proceeding or otherwise) to recover any amounts in the respect
of payments made under the guaranty contained in this Section 4.10 to any
Secured Party or any holder of a Note.
SECTION 4.10.7. Right of Contribution. Each Borrower hereby agrees that to
the extent that a Borrower shall have paid more than its proportionate share of
any payment made hereunder, such Borrower shall be entitled to seek and receive
contribution from and against any other Borrower hereunder who has not paid its
proportionate share of such payment. Each Borrower's right of contribution shall
be subject to the terms and conditions of Section 4.10.6. The provisions of this
Section 4.10.7 shall in no respect limit the obligations and liabilities of
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any Borrower to the Administrative Agent and each other Secured Party, and each
Borrower shall remain liable to the Administrative Agent and each other Secured
Party for the full amount guaranteed by such Borrower hereunder.
SECTION 4.10.8. Successors, Transferees and Assigns; Transfers of Notes,
etc. The guaranty contained in this Section 4.10 shall:
(a) be binding upon each Borrower, and its successors, transferees
and assigns; and
(b) inure to the benefit of and be enforceable by the Administrative
Agent and each other Secured Party.
Without limiting the generality of the foregoing clause (b), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all rights and benefits in respect thereof granted
to such Lender under any Loan Document (including the guaranty contained in this
Section 4.10) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 12.11 and Article XI.
SECTION 4.11. No Bankruptcy Petition Against RCFC or Dollar Thrifty
Funding. With respect to each Enhancement Letter of Credit issued hereunder
relating to RCFC or Dollar Thrifty Funding, each of the Lenders hereby covenants
and agrees that,
(a) prior to the date which is one year and one day after the
payment in full of the latest maturing note issued under the Base
Indenture, it will not institute against, or join with any other Person in
instituting against, RCFC, and
(b) prior to the date which is one year and one day after the
payment in full of the latest maturing commercial paper note issued by
Dollar Thrifty Funding, it will not institute against, or join with any
other Person in instituting against Dollar Thrifty Funding,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy or
similar law; provided, however, that nothing in this Section 4.11 shall
constitute a waiver of any right to indemnification, reimbursement or other
payment from any Obligor pursuant to this Agreement or any other Loan Document.
In the event that any Lender takes action in violation of this Section 4.11,
each Borrower agrees, for the benefit of the holders of the notes issued under
the Base Indenture and the commercial paper notes issued by Dollar Thrifty
Funding, that it shall cause RCFC or Dollar Thrifty Funding, as the case may be,
to file an answer with the bankruptcy court or otherwise properly contest the
filing of such a petition by such Lender against RCFC or Dollar Thrifty Funding,
as the case may be, or the commencement of such action and raise the defense
that such Lender has agreed in writing not to take such action and should be
estopped and precluded therefrom and such other defenses, if any, as its counsel
advises that it may assert; and such
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Lender shall be liable for and pay any costs and expenses incurred by RCFC or
Dollar Thrifty Funding, as the case may be, in connection therewith. The
provisions of this Section 4.11 shall survive the termination of the Agreement.
ARTICLE V
CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS
SECTION 5.1. Eurodollar Rate Lending Unlawful. If any Lender shall
determine (which determination shall, upon notice thereof to the Borrowers, the
Administrative Agent and the Lenders, be conclusive and binding on each
Borrower) that the introduction of or any change in or in the interpretation of
any law makes it unlawful, or any central bank or other governmental authority
asserts that it is unlawful, for such Lender to make, continue or maintain any
Loan as, or to convert any Loan into, a Eurodollar Loan of a certain type, the
obligations of such Lender to make, continue, maintain or convert into any such
Loans shall, upon such determination, forthwith be suspended until such Lender
shall notify the Administrative Agent that the circumstances causing such
suspension no longer exist, and all outstanding Eurodollar Loans of such type of
such Lender shall automatically convert into ABR Loans at the end of the then
current Interest Periods with respect thereto or sooner, if required by such law
or assertion, and all Loans of such Lender that would otherwise have been made
or continued as, or converted into, Eurodollar Loans shall instead be made as or
converted into, or continued as, ABR Loans upon which interest shall be payable
at the same time as the related Eurodollar Loans.
SECTION 5.2. Deposits Unavailable. If the Administrative Agent shall have
determined that by reason of circumstances affecting the London interbank
market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to Eurodollar Loans of any type, then, upon notice from the
Administrative Agent to the Borrowers and the Lenders, the obligations of all
Lenders under Section 2.3 and Section 2.4 to make or continue any Loans as, or
to convert any Loans into, Eurodollar Loans of such type shall forthwith be
suspended until the Administrative Agent shall notify the Borrowers and the
Lenders that the circumstances causing such suspension no longer exist.
SECTION 5.3. Increased Eurodollar Loan Costs, etc. The Borrowers, jointly
and severally, agree to reimburse each Lender for any increase in the cost to
such Lender of, or any reduction in the amount of any sum receivable by such
Lender in respect of, making, continuing or maintaining (or of its obligation to
make, continue or maintain) any Loans as, or of converting (or of its obligation
to convert) any Loans into, Eurodollar Loans that arise in connection with any
change in, or the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in after the date hereof of, any law or regulation,
directive, guideline, decision or request (whether or not having the force of
law) of any court, central bank, regulator or other governmental authority,
except for such changes with respect to (i) increased capital costs which are
governed by Section 5.5 and (ii) taxes which are described and governed by
Section 5.6 (including taxes imposed by reason of any failure of such Lender to
comply with its obligations under clause (b) of Section 5.6, including taxes
imposed by a taxing authority on or measured by
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the net income, overall receipts or capital of such Lender or any lending
office, branch or any affiliate thereof and any franchise taxes or branch taxes
imposed by a taxing authority on such Lender or any lending office, branch or
any affiliate thereof); provided, however, that no Borrower shall have any
obligation to pay any such additional amount under this Section 5.3 with respect
to any such change unless such Lender shall have notified the applicable
Borrower of its demand within 90 days after the date upon which such Lender has
obtained audited financial statements with respect to the fiscal year of such
Lender in which such change occurred. Such Lender shall promptly notify the
Administrative Agent and the Borrowers in writing of the occurrence of any such
reduction or increase (but in no event later than the date by which such Lender
may demand reimbursement therefor pursuant to the immediately preceding
sentence), such notice to state, in reasonable detail, the reasons therefor and
the additional amount required fully to compensate such Lender on an after-tax
basis for such increased cost or reduced amount. Such additional amounts shall
be payable by the Borrowers directly to such Lender within five Business Days of
its receipt of such notice, and such notice shall, in the absence of manifest
error, be conclusive and binding on each Borrower.
SECTION 5.4. Funding Losses. In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make,
continue or maintain any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a Eurodollar Loan)
as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any Eurodollar Loans on a date other than the scheduled last day
of the Interest Period applicable thereto, whether pursuant to Section 3.1
or otherwise;
(b) any Loans not being made as Eurodollar Loans in accordance with
the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, Eurodollar
Loans in accordance with the Continuation/ Conversion Notice therefor,
then, upon the written notice of such Lender to the Borrowers (with a copy to
the Administrative Agent), the Borrowers shall, within five Business Days of
their receipt thereof, jointly and severally, pay directly to such Lender such
amount as will (in the reasonable determination of such Lender) reimburse such
Lender for such loss or expense. Such written notice (which shall include
calculations in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on each Borrower.
SECTION 5.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority after the Effective Date affects or would affect
the amount of capital required or expected to be maintained by any Lender or any
Person controlling such Lender, and such Lender determines (in its sole and
absolute discretion) that the rate of
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return on its or such controlling Person's capital as a consequence of its
Commitments, issuance of or participation in Letters of Credit or the Loans made
by such Lender is reduced to a level below that which such Lender or such
controlling Person could have achieved but for the occurrence of any such
circumstance, then, in any such case upon notice from time to time by such
Lender to the Borrowers, the Borrowers shall, jointly and severally, pay
directly to such Lender within five Business Days additional amounts sufficient
to compensate such Lender or such controlling Person on an after-tax basis for
such reduction in rate of return; provided, however, that no Borrower shall have
any obligation to pay any such additional amount under this Section 5.5 with
respect to any such change unless such Lender shall have notified the applicable
Borrower of its demand within 90 days after the date upon which such Lender or
such controlling Person has obtained audited financial statements with respect
to the fiscal year of such Lender or such controlling Person in which such
change occurred. Such Lender or controlling Person shall promptly notify the
Administrative Agent and the Borrowers in writing of the occurrence of any such
reduction (but in no event later than the date by which such Lender or
controlling Person may demand payment therefor pursuant to the immediately
preceding sentence). A statement of such Lender as to any such additional amount
or amounts (including calculations thereof in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on each Borrower. In
determining such amount, such Lender may use any method of averaging and
attribution that it (in its sole and absolute discretion) shall deem applicable.
SECTION 5.6. Taxes. (a) Except to the extent otherwise provided in the
proviso to clause (iii) of this Section 5.6(a) and the proviso to the sentence
immediately succeeding such clause (iii), all payments by any Borrower of
principal of, and interest on, the Credit Extensions and all other amounts
payable hereunder (including fees) shall be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding (A) in the case of
each Lender and the Administrative Agent, taxes imposed on or measured by the
net income, overall receipts or capital of such Lender (or any Lending office,
branch or affiliate of such Lender) or the Administrative Agent and franchise
taxes or branch taxes imposed on such Lender (or any lending office, branch or
affiliate of such Lender) or the Administrative Agent, as the case may be, (x)
by the jurisdiction under the laws of which it is organized or any political
subdivision thereof or (y) by reason of any connection between the jurisdiction
imposing such tax and such Lender (or any lending office, branch or affiliate
thereof) or the Administrative Agent, as the case may be, other than a
connection arising solely from such Lender (or such lending office, branch or
affiliate) or the Administrative Agent, as the case may be, having executed,
delivered, or performed its obligations under, or received payment under or
enforced, this Agreement, any Note or any other Loan Document and, (B) in the
case of each Lender, taxes imposed on or measured by the net income, overall
receipts or capital of such Lender (or any lending office, branch or affiliate
of such Lender) and franchise taxes or branch taxes imposed on such Lender (or
any lending office, branch or affiliate of such Lender) by the jurisdiction in
which such Lender's Domestic Office or Eurodollar Office, as the case may be, is
located or any political subdivision thereof (such non-excluded items being
called "Taxes"). In the event that any withholding or deduction from any payment
to be made by any Borrower hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then such Borrower will
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(i) pay directly to the relevant authority the full amount required
to be so withheld or deducted;
(ii) promptly forward to the Administrative Agent an official
receipt or other documentation satisfactory to the Administrative Agent
evidencing such payment to such authority; and
(iii) pay to the Administrative Agent for the account of the Lenders
(or, if applicable, for its own account) such additional amount or amounts
as is necessary to ensure that the net amount actually received by each
Lender and the Administrative Agent will equal the full amount such Lender
or the Administrative Agent, as the case may be would have received had no
such withholding or deduction been required; provided, however, that the
Borrowers shall be entitled to deduct and withhold any Taxes and shall not
be required to increase any such amounts payable pursuant to this clause
(iii) to the Administrative Agent for the account of any Lender that is
not incorporated under the laws of the United States (or any State thereof
or the District of Columbia) to the extent such Taxes are imposed as a
result of the failure of such Lender to comply with the requirements of
clause (b) of this Section 5.6.
Moreover, if any Taxes are directly asserted against the Administrative Agent or
any Lender with respect to any payment received by the Administrative Agent or
such Lender hereunder, the Administrative Agent or such Lender may pay such
Taxes and promptly notify the Borrower of the nature and amount of such payment
and such Borrower will promptly pay such additional amounts (including any
penalties, interest or expenses) as is necessary in order that the net amount
received by such person after the payment of such Taxes (including any Taxes on
such additional amount) shall equal the amount such person would have received
had no such Taxes been asserted, provided, however, that the Borrowers shall not
be required to pay any additional amounts pursuant to this sentence to the
Administrative Agent for the account of any Lender or to any Lender that is not
incorporated under the laws of the United States (or any State thereof or the
District of Columbia) to the extent such Taxes are imposed as a result of the
failure of such Lender to comply with the requirements of clause (b) of this
Section 5.6.
If any Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent, for the account of the
respective Lenders, the required receipts or other required documentary
evidence, such Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure. For purposes of this Section 5.6, a distribution hereunder by the
Administrative Agent or any Lender to or for the account of any Lender shall be
deemed a payment by such Borrower.
(b) Each Lender that is not incorporated under the laws of the
United States (or any State thereof or the District of Columbia) shall:
(X)(i) on or before the date of any payment by any Borrower under
this Agreement, any Notes or any other Loan Document for the account of
such Lender,
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deliver to the Borrowers and the Administrative Agent (A) two duly
completed copies of United States Internal Revenue Service Form 1001 or
4224, or successor applicable form, as the case may be, and such other
forms and certifications as may reasonably be required under applicable
law, in order to establish that as of the date thereof such Lender is
entitled to receive all payments under this Agreement, any Notes or any
other Loan Document without deduction or withholding of any United States
federal income taxes and (B) an Internal Revenue Service Form W-8 or W-9,
or successor applicable form, as the case may be, certifying that such
Lender is entitled to an exemption from United States backup withholding
taxes;
(ii) deliver to the Borrowers and the Administrative Agent two
further copies of any such form on or before the date that any such form
expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously delivered by it to
the Borrowers and Administrative Agent; and
(iii) if necessary, obtain, at the expense of the Borrowers, such
extensions of time for delivery of such forms as may reasonably be
requested by the Borrowers; or
(Y) in the case of any such Lender that is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, (i) furnish to the Borrowers
on or before the date of any payment by any Borrower, with a copy to the
Administrative Agent, (A) a certificate substantially in the form of
Exhibit M (any such certificate a "U.S. Tax Compliance Certificate"), and
(B) two accurate and complete original signed copies of Internal Revenue
Service Form W-8, or successor applicable form certifying to such Lender's
entitlement as of the date of such form to the exemption under Section
881(c) of the Code from U.S. withholding tax on payments of interest (and
deliver to the Borrowers and the Administrative Agent two further copies
of such form on or before the date the most recently delivered form
expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recently delivered form and, if necessary,
obtain, at the expense of the Borrowers, any extensions of time reasonably
requested by the Borrowers for the delivery of such forms); and (ii) agree
upon reasonable request of the Borrowers, to provide to the Borrowers and
the Administrative Agent (for the benefit of the Borrowers and the
Administrative Agent), such other forms as may be reasonably required
under applicable law in order to establish the legal entitlement of such
Lender to an exemption from withholding of Taxes with respect to any
payments under this Agreement, any Notes and any other Loan Document;
unless in any such case any change in treaty, law or regulation or any change in
any previously published ruling, notice or other similar official Internal
Revenue Service interpretation of a treaty, law or regulation has occurred after
the date such Person becomes a Lender hereunder which renders all such forms
inapplicable to such Lender or which would prevent such Lender from duly
completing and delivering any such form with respect to it and such Lender
promptly so advises the Borrower and the Administrative Agent in writing. Each
Person that shall become a Lender or a Participant pursuant to Section 12.11
shall, upon the effectiveness of the related transfer, be required to provide
all of the forms, certifications and statements required pursuant to this
Section, provided that in the case of a Participant the obligations of such
Participant, pursuant to this clause (b) shall be determined as if such
Participant were a Lender except that such Participant shall furnish all such
required forms, certifications and statements to the Lender from which the
related participation shall have been purchased.
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SECTION 5.7. Payments, Computations, etc. Unless otherwise expressly
provided, all payments by each Borrower pursuant to this Agreement, the Notes,
each Letter of Credit or any other Loan Document shall be made by such Borrower
to the Administrative Agent for the pro rata account of the Lenders entitled to
receive such payment. All such payments required to be made to the
Administrative Agent shall be made, without setoff, deduction or counterclaim,
not later than 1:00 p.m. (New York City, New York time) on the date due, in same
day or immediately available funds, to such account as the Administrative Agent
shall specify from time to time by notice to the Borrowers. Funds received after
that time shall be deemed to have been received by the Administrative Agent on
the next succeeding Business Day. The Administrative Agent shall promptly remit
in same day funds to each Lender its share, if any, of such payments received by
the Administrative Agent for the account of such Lender. All interest (including
interest on Eurodollar Loans) and fees shall be computed on the basis of the
actual number of days (including the first day but excluding the last day)
occurring during the period for which such interest or fee is payable over a
year comprised of 360 days (or, in the case of interest on an ABR Loan (other
than when calculated with respect to the Federal Funds Rate), 365 days or, if
appropriate, 366 days). Whenever any payment to be made shall otherwise be due
on a day which is not a Business Day, such payment shall (except as otherwise
required by clause (c) of the definition of the term "Interest Period" with
respect to Eurodollar Loans) be made on the next succeeding Business Day and
such extension of time shall be included in computing interest and fees, if any,
in connection with such payment.
SECTION 5.8. Sharing of Payments. If any Lender shall obtain any payment
or other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Sections
5.3, 5.4, 5.5 and 5.6) or Letter of Credit in excess of its pro rata share of
payments then or therewith obtained by all Lenders, such Lender shall purchase
from the other Lenders such participations in Loans made by them and/or Letters
of Credit as shall be necessary to cause such purchasing Lender to share the
excess payment or other recovery ratably with each of them; provided, however,
that if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share (according
to the proportion of
(a) the amount of such selling Lender's required repayment to the
purchasing Lender
to
(b) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. Each Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section may,
to the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 5.9) with respect to such participation as
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fully as if such Lender were the direct creditor of such Borrower in the amount
of such participation. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.
SECTION 5.9. Setoff. Each Lender shall, upon the occurrence of any Event
of Default described in clauses (a) through (d) of Section 9.1.9 or, with the
consent of the Required Lenders, upon the occurrence of any other Event of
Default, have the right to appropriate and apply to the payment of the
Obligations (other than Liquidity Obligations) owing to it (whether or not then
due), and (as security for such Obligations) each Borrower hereby grants to each
Lender a continuing security interest in, any and all balances, credits,
deposits, accounts or moneys of such Borrower then or thereafter maintained with
or otherwise held by such Lender; provided, however, that any such appropriation
and application shall be subject to the provisions of Section 5.8. Each Lender
agrees promptly to notify such Borrower and the Administrative Agent after any
such setoff and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section are in addition to
other rights and remedies (including other rights of setoff under applicable law
or otherwise) which such Lender may have.
SECTION 5.10. Replacement of Lender. Each Lender agrees that, upon the
occurrence of any event set forth in Section 5.1, 5.3, or 5.5, or in the event
any Borrower is required to pay additional amounts in respect of amounts payable
hereunder to such Lender pursuant to Section 5.6, such Lender will use
reasonable efforts to book and maintain its Loans through a different lending
office or to transfer its Loans to an Affiliate which is an Eligible Assignee
with the objective of avoiding or minimizing the consequences of such event;
provided that such booking or transfer is not otherwise disadvantageous to such
Lender as determined by such Lender in its sole and absolute discretion. If any
Lender
(a) notifies the Borrowers pursuant to Section 5.1 that it is unable
to make, continue or maintain Eurodollar Loans or convert any Base Rate
Loan into a Eurodollar Loan when a majority of the other Lenders have not
given any such notice,
(b) has demanded to be paid additional amounts pursuant to Section
5.3, 5.5 or 5.6 and the payment of such additional amounts are, and are
likely to continue to be, more onerous in the reasonable judgment of the
Borrowers than with respect to the other Lenders, or
(c) has wrongfully failed to fund any Loan on the date specified for
the making thereof and all of the other Lenders funded their portion of
such Loan on such date,
then the Borrowers shall have the right at any time when no Default shall have
occurred and be continuing to seek one or more Eligible Assignees (each, a
"Replacement Lender") to purchase
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the outstanding Loans of such Lender (the "Affected Lender"), and if the
Borrowers locate a Replacement Lender, the Affected Lender shall, upon
(i) prior written notice to the Administrative Agent,
(ii) (A) payment to the Affected Lender of the purchase price agreed
between it and the Replacement Lender (or, failing such agreement, a
purchase price in the amount of the outstanding principal amount of the
Affected Lender's Loans and accrued interest thereon to the date of
payment) by the Replacement Lender plus (B) payment by the Borrowers of
all amounts (other than principal and interest) then due to the Affected
Lender or accrued for its account hereunder or under any other Loan
Document,
(iii) satisfaction of the provisions set forth in Section 12.11.1,
and
(iv) payment by the Borrower to the Affected Lender and the
Administrative Agent of all reasonable out-of-pocket expenses in
connection with such assignment and assumption (including the processing
fees described in Section 12.11.1),
assign and delegate all its rights and obligations under this Agreement and any
other Loan Document to which it is a party (including its outstanding Loans and
participations in Letter of Credit Outstandings) to the Replacement Lender, and
the Replacement Lender shall assume such rights and obligations, whereupon the
Replacement Lender shall in accordance with Section 12.11.1 become a party to
each Loan Document to which the Affected Lender is a party and shall have the
rights and obligations of a Lender thereunder and the Affected Lender shall be
released from its obligations hereunder and each other Loan Document to the
extent of such assignment and delegation.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Initial Credit Extension. The obligations of the Lenders and
the Issuer to make the initial Credit Extension shall be subject to the prior or
concurrent satisfaction of each of the conditions precedent set forth in this
Section 6.1.
SECTION 6.1.1. Resolutions, etc. The Administrative Agent shall have
received from each Borrower and each other Obligor a certificate, dated the
Closing Date, of the Secretary or Assistant Secretary of such Person as to
(a) resolutions of its Board of Directors then in full force and
effect authorizing the execution, delivery and performance of this
Agreement, the Notes and each other Loan Document to be executed by it;
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(b) the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement, the Notes and each other
Loan Document executed by it; and
(c) the full force and validity of each Organic Document of such
Person and true and complete copies thereof,
upon which certificate each Lender, the Issuer and the Administrative Agent may
conclusively rely until it shall have received a further certificate of the
Secretary of such Borrower or such other Obligor canceling or amending such
prior certificate.
SECTION 6.1.2. Delivery of Notes. The Administrative Agent shall have
received, for the account of each Lender that requests in writing three Business
Days prior to the Closing Date that its Loans be evidenced by Notes, its Notes
duly executed and delivered by each Borrower.
SECTION 6.1.3. Transaction Consummated. (a) The Equity Offerings shall
have resulted in gross cash proceeds of at least $350,000,000, and the Parent
shall have received net cash proceeds of at least $45,000,000 pursuant to the
Equity Offerings, such proceeds (up to $50,000,000) shall have been used to
collateralize the MTN Program and in the event such proceeds exceed
$55,000,000, such proceeds in excess of $55,000,000 (up to $50,000,000 of such
excess proceeds) shall also have been used to collateralize the MTN Program.
(b) The MTN Program shall have been established and medium term notes
shall have been issued thereunder in an aggregate face amount of not less than
$900,000,000, the proceeds of which shall have been applied to repay the
existing Vehicle financing arrangements between the Parent and its Subsidiaries,
on the one hand, and Chrysler and its Subsidiaries, on the other hand, and to
provide funds for the purchasing of additional Vehicles.
(c) The Chrysler-Dollar Supply Agreement, the Chrysler-Thrifty Supply
Agreement and the Continuing Chrysler Arrangements (including the Chrysler
Credit Support Documents and the Tax Sharing Agreement) shall have been entered
into by the parties thereto on terms and conditions reasonably satisfactory in
all respects to the Agents (including the terms and conditions relating to the
furnishing by Chrysler to the Borrowers of advertising and promotional support).
The Walden Agreement shall have been entered into by the parties thereto on
terms and conditions reasonably satisfactory in all respects to the Agents.
(d) All intercompany accounts in respect of intercompany advances (other
than with respect to vehicle supply arrangements or any shuttle bus financing
set forth in Item 8.2.2(c) ("Ongoing Indebtedness") of the Disclosure Schedule)
between the Parent and its Subsidiaries, on the one hand, and Chrysler and its
Subsidiaries (excluding the Parent and its Subsidiaries), on the other hand,
shall have been settled, and the Borrowers shall have received any balance
payable to them or their Subsidiaries in cash. All Surety Bonds necessary for
the Borrowers to conduct their businesses in accordance with the terms of this
Agreement (including Section 8.1.4) and otherwise consistent with past practice
shall have been issued on terms and conditions reasonably satisfactory in all
respects to the Agents [, including the absence of any requirement that the
Parent and its Subsidiaries provide any collateral security therefor (other than
Letters of Credit in an aggregate Stated Amount not exceeding $[19,000,000])].
All other aspects of the
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capital structure of each Borrower and Subsidiary Guarantor shall be reasonably
satisfactory in all respects to the Agents.
SECTION 6.1.4. Payment of Outstanding Indebtedness, etc. All Indebtedness,
if any, identified in Item 8.2.2(b) ("Indebtedness to be Paid") of the
Disclosure Schedule, together with all interest, all prepayment premiums and
other amounts due and payable with respect thereto, shall have been paid in full
(including, to the extent necessary, from proceeds of the initial Credit
Extensions); and all Liens securing payment of any such Indebtedness shall have
been released and the Administrative Agent shall have received all Uniform
Commercial Code Form UCC-3 termination statements or other instruments as may be
suitable or appropriate in connection therewith.
SECTION 6.1.5. Delivery of Financial Statements. The Administrative Agent
shall have received
(a) audited consolidated financial statements for each of the three
Fiscal Years in the three-Fiscal-Year period ending December 31, 1996 of
each of (i) the Parent and its Subsidiaries, (ii) Dollar and its
Subsidiaries and (iii) Thrifty and its Subsidiaries;
(b) unaudited interim consolidated financial statements for the
three-Fiscal-Quarter period ending September 30, 1997 of each of the
Parent and its Subsidiaries; and
(c) unaudited pro forma consolidated balance sheet of the Parent and
its Subsidiaries as at the date of the most recent consolidated balance
sheet delivered pursuant to clause (b) above (the "Pro Forma Balance
Sheet"), certified by the chief financial Authorized Officer of the
Parent, giving effect to the consummation of the Transaction (including
the initial Credit Extension) and reflecting the proposed capital
structure of the Parent and its Subsidiaries as at the Closing Date.
SECTION 6.1.6. Consents, etc. All governmental and third party approvals
and consents necessary in connection with the Transaction (including the
execution and delivery of this Agreement and each other Loan Document by each
Obligor or party hereto and thereto and their performance of their respective
Obligations hereunder and thereunder) and continuing operations of the Parent
and its Subsidiaries (after giving effect to the consummation of the
Transaction) shall have been obtained and be in full force and effect (and, to
the extent requested by the Administrative Agent, the Administrative Agent shall
have received true and correct copies of such approvals and consents) and all
applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or otherwise
impose adverse conditions on any aspect of the Transaction.
SECTION 6.1.7. No Material Adverse Change. There shall not have occurred a
material adverse change in the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Parent and
its Subsidiaries, taken as a whole, since September 30, 1997.
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SECTION 6.1.8. Availability Under Credit Facility. After the making of all
Credit Extensions under this Agreement on the Closing Date, (i) at least
$125,000,000 of the Commitment Amount shall remain unused and available and (ii)
at least $40,000,000 of the Loan Commitment Amount shall remain unused and
available.
SECTION 6.1.9. Business Plan. The Administrative Agent and the Lenders
shall have received (a) a business plan for the 1998 Fiscal Year for the Parent
and its Subsidiaries in form and scope reasonably satisfactory to the Agents and
(b) financial projections for the period from January 1, 1998 to the Stated
Maturity Date for the Parent and its Subsidiaries in form and scope reasonably
satisfactory to the Agents.
SECTION 6.1.10. Closing Date Certificate. The Administrative Agent shall
have received, with counterparts for each Lender, the Closing Date Certificate,
dated the date of the Closing Date and duly executed and delivered by an
Authorized Officer of each Borrower, in which certificate each Borrower shall
agree and acknowledge that the statements made therein shall be deemed to be
true and correct representations and warranties of such Borrower made as of such
date, and, at the time such certificate is delivered, such statements shall in
fact be true and correct. All documents and agreements required to be appended
to the Closing Date Certificate shall be in form and substance reasonably
satisfactory to the Agents.
SECTION 6.1.11. Guaranty. The Administrative Agent shall have received the
Subsidiary Guaranty, dated the Closing Date, duly executed by each Subsidiary of
each of the Borrowers that is a party thereto.
SECTION 6.1.12. Pledge Agreement. The Administrative Agent shall have
received executed counterparts of the Pledge Agreement, dated as of the Closing
Date and duly executed and delivered by each Borrower and each of their
respective Subsidiaries that is a party thereto together with the Pledged Notes
(as defined therein), if any, and the certificates evidencing all of the issued
and outstanding shares of Capital Stock pledged pursuant thereto, which
certificates shall in each case be accompanied by undated stock powers duly
executed in blank, or, if any securities pledged pursuant to the Pledge
Agreement are uncertificated securities, confirmation and evidence satisfactory
to the Administrative Agent that the security interest in such uncertificated
securities has been transferred to and perfected by the Administrative Agent for
the benefit of the Lenders in accordance with the U.C.C. or any similar or local
law which may be applicable.
SECTION 6.1.13. Security Agreement. The Administrative Agent shall have
received executed counterparts of the Security Agreement, dated as of the
Closing Date and duly executed and delivered by each Borrower and each of their
respective Subsidiaries that is a party thereto, together with
(a) properly completed Uniform Commercial Code financing statements
(Form UCC-1) suitable for filing, naming in each case such Borrower or
such Subsidiary, as the case may be, as the debtor and the Administrative
Agent as the secured party, or other similar instruments or documents,
suitable for filing under the applicable laws of all
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jurisdictions as may be necessary or, in the opinion of the Administrative
Agent, desirable to perfect the security interest of the Administrative
Agent pursuant to the Security Agreement;
(b) executed copies of proper Uniform Commercial Code Form UCC-3
termination statements, if any, necessary to release all Liens and other
rights of any Person (other than Liens permitted under Section 8.2.3) (i)
in any collateral described in the Security Agreement and (ii) securing
any of the Indebtedness identified in Item 8.2.2(b) ("Indebtedness to be
Paid") of the Disclosure Schedule, together with such other Uniform
Commercial Code Form UCC-3 termination statements as the Administrative
Agent may reasonably request from such Obligors; and
(c) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report certified
by a party acceptable to the Administrative Agent, dated a date reasonably
near to the Closing Date, listing all effective financing statements, tax
liens and judgment liens which name such Borrower and such Subsidiaries,
as the case may be (under their respective present names and any previous
names thereof), as the debtor and which are filed in the jurisdictions in
which filings were made pursuant to clause (a) above, together with copies
of such financing statements (none of which shall cover any collateral
described in each Security Agreement, except to the extent permitted by
Section 8.2.3).
SECTION 6.1.14. Mortgages. The Administrative Agent shall have received
counterparts of a Mortgage for each Existing Material Property, dated as of the
Closing Date, duly executed by the Borrower (or applicable Subsidiary) having
rights in the property described therein, together with
(a) evidence of the completion (or satisfactory arrangements for the
completion) of all recordings and filings of each such Mortgage as may be
necessary or, in the reasonable opinion of the Administrative Agent,
desirable to create a valid, perfected first priority Lien against the
land and improvements purported to be covered thereby;
(b) mortgagee's title insurance policies in favor of the
Administrative Agent and the Lenders issued by insurers reasonably
satisfactory to the Administrative Agent, in amounts and in form and
substance reasonably satisfactory to the Administrative Agent, with
respect to each Existing Material Property purported to be covered by each
such Mortgage, insuring that title to such property is marketable and that
the interests created by the Mortgage constitute valid first Liens thereon
free and clear of all defects and encumbrances other than as approved by
the Administrative Agent, and including a revolving credit endorsement and
such other endorsements as the Administrative Agent shall reasonably
request and shall be accompanied by evidence of the payment in full of all
premiums thereon;
(c) to the extent requested by the Administrative Agent, surveys for
each Existing Material Property made in accordance with the Minimum
Standard Detail Requirements
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for Land Title Surveys jointly established and adopted by the American
Land Title Association and the American Congress of Surveying and Mapping
in 1992, which surveys shall be certified to the Administrative Agent and
in form and substance reasonably satisfactory to the Administrative Agent;
(d) Uniform Commercial Code financing statements related to the
security interests created by each Mortgage, together with evidence of the
completion (or satisfactory arrangements for the completion) of all
recordings and filings of such financing statements in the appropriate
offices and records as may be necessary or, in the reasonable opinion of
the Administrative Agent, desirable to create valid, perfected first
priority Liens against the improvements purported to be covered thereby;
and
(e) such other certifications (including flood hazard
certifications), certificates (including insurance certificates),
approvals, opinions or documents as the Administrative Agent may
reasonably request.
SECTION 6.1.15. Intercreditor Agreement. The Administrative Agent shall
have received executed counterparts of the Intercreditor Agreement, dated as of
the Closing Date, duly executed and delivered by Chrysler, each Borrower and
each Subsidiary of a Borrower that is a party to the Pledge Agreement, the
Security Agreement or a Mortgage.
SECTION 6.1.16. Insurance. The Administrative Agent shall have received
evidence reasonably satisfactory to it (which evidence shall include a
certificate from an authorized insurance representative of the Borrowers) that
all insurance required by Section 8.1.4 is in full force and effect with no
default by any Borrower or any of their respective Subsidiaries, is fully paid
and is not subject to cancellation without 30 days' prior written notice to the
Administrative Agent.
SECTION 6.1.17. Issuance Request. The Administrative Agent and the Issuer
shall have received an Issuance Request for each Letter of Credit to be issued
on the Closing Date and an Enhancement Letter of Credit Application and
Agreement for each Enhancement Letter of Credit to be issued on the Closing Date
(if any).
SECTION 6.1.18. Opinions of Counsel. (a) The Administrative Agent shall
have received opinions, dated the Closing Date and addressed to the Agents, the
Issuer and the Lenders, from
(i) Debevoise & Plimpton, New York counsel for the Obligors and
Chrysler, in form and substance reasonably satisfactory to the
Administrative Agent;
(ii) Hall, Estill, Hardwick, Gable, Golden & Nelson, Oklahoma
counsel for the Obligors, in form and substance reasonably satisfactory to
the Administrative Agent;
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(iii) ___________________________, special California counsel for
____________, in form and substance reasonably satisfactory to the
Administrative Agent;
(iv) ___________________________, special Arizona counsel for
_____________, in form and substance reasonably satisfactory to the
Administrative Agent;
(v) ___________________________, special Florida counsel for
_____________, in form and substance reasonably satisfactory to the
Administrative Agent;
(vi) __________________________, special Texas counsel for
_____________, in form and substance reasonably satisfactory to the
Administrative Agent; [and]
(vii) __________________________, special Utah counsel for
______________, in form and substance reasonably satisfactory to the
Administrative Agent.
(b) The Administrative Agent shall have received such reliance letters as
it may reasonably request with respect to opinions delivered in connection with
the Transaction, in each case dated the Closing Date and addressed to the
Agents, the Issuer and all of the Lenders.
SECTION 6.1.19. Closing Fees, Expenses, etc. The Administrative Agent
shall have received for its own account or for the account of each Arranger or
each Lender, as the case may be, all fees, costs and expenses due and payable
pursuant to Sections 3.3 and 12.3, if then invoiced.
SECTION 6.2. All Credit Extensions. The obligation of each Lender and the
Issuer to make any Credit Extension (including the initial Credit Extension)
shall be subject to the satisfaction of each of the conditions precedent set
forth in this Section 6.2.
SECTION 6.2.1. Compliance with Warranties, No Default, etc. Both before
and after giving effect to any Credit Extension (but, if any Default of the
nature referred to in Section 9.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds of any Credit Extension), the following statements
shall be true and correct
(a) the representations and warranties set forth in Article VII
(excluding, however, those contained in Section 7.7) and in each other
Loan Document shall, in each case, be true and correct with the same
effect as if then made (unless stated to relate solely to an earlier date,
in which case such representations and warranties shall be true and
correct as of such earlier date);
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(b) except as disclosed by any Borrower to the Administrative Agent,
the Issuer and the Lenders pursuant to Section 7.7
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or
threatened against such Borrower or any of its Subsidiaries which
could reasonably be expected to materially adversely affect the
consolidated business, property, operations, assets, liabilities,
condition (financial or otherwise) or prospects of the Parent and
its Subsidiaries taken as a whole or which purports to affect the
legality, validity or enforceability of this Agreement, the Notes or
any other Loan Document; and
(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or governmental investigation
or proceeding disclosed pursuant to Section 7.7 which could
reasonably be expected to materially adversely affect the
consolidated business, property, operations, assets, liabilities,
condition (financial or otherwise) or prospects of the Parent and
its Subsidiaries taken as a whole; and
(c) no Default shall have then occurred and be continuing.
SECTION 6.2.2. Credit Request. The Administrative Agent shall have
received a Borrowing Request or Issuance Request, as the case may be, for such
Credit Extension. Each of the delivery of a Borrowing Request or an Issuance
Request and the acceptance by any Borrower of the proceeds of the Borrowing or
the issuance of the Letter of Credit, as applicable, shall constitute a
representation and warranty by such Borrower that on the date of such Borrowing
(both immediately before and after giving effect to such Borrowing and the
application of the proceeds thereof) or the issuance of the Letter of Credit, as
applicable, the statements made in Section 6.2.1 are true and correct.
SECTION 6.2.3. Enhancement Letters of Credit. In the event such Credit
Extension is in respect of an Enhancement Letter of Credit, the conditions to
such Credit Extension set forth in the Enhancement Letter of Credit Application
and Agreement with respect to such Enhancement Letter of Credit shall have been
satisfied.
SECTION 6.2.4. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of any Borrower or any of its
Subsidiaries or any other Obligor shall be reasonably satisfactory in form and
substance to the Administrative Agent and its counsel; the Administrative Agent
and its counsel shall have received all information, approvals, opinions,
documents or instruments as the Administrative Agent or its counsel may
reasonably request.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders, the Issuer and the Administrative Agent to
enter into this Agreement and to make Loans and issue Letters of Credit
hereunder, each Borrower represents and warrants unto the Administrative Agent,
the Issuer and each Lender as set forth in this Article VII.
SECTION 7.1. Organization, etc. Each Borrower and each of its Subsidiaries
(a) is a corporation validly organized and existing and in good
standing under the laws of the jurisdiction of its incorporation,
(b) is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the nature of its business
requires such qualification, except to the extent that the failure to so
qualify has not had, and could not reasonably be expected to have, a
material adverse effect on the business, property, operations, assets,
liabilities, condition (financial or otherwise) or prospects of the Parent
and its Subsidiaries taken as a whole,
(c) has full power and authority and holds all requisite
governmental licenses, permits and other approvals to enter into and
perform its Obligations under this Agreement, the Notes and each other
Loan Document to which it is a party and to own and hold under lease its
property and to conduct its business substantially as currently conducted
by it, and
(d) subject to Section 7.12, has complied in all material respects
with all material laws, rules, regulations and orders applicable to it.
SECTION 7.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by each Borrower of this Agreement, the Notes and each
other Loan Document executed or to be executed by it, and the execution,
delivery and performance by each other Obligor of each Loan Document executed or
to be executed by it and each such Borrower's and each such other Obligor's
participation in the consummation of the Transaction are or, in the case of the
CP Program, will be within each such Borrower's and each such Obligor's
corporate powers, have been or, in the case of the CP Program, will be duly
authorized by all necessary corporate action, and do not
(a) contravene such Borrower's or such other Obligor's Organic
Documents;
(b) contravene any material contractual restriction, law or
governmental regulation or court decree or order binding on or affecting
such Borrower or such other Obligor; or
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(c) result in, or require the creation or imposition of, any Lien
(other than the Liens created under the Loan Documents in favor of the
Administrative Agent for the benefit of the Secured Parties and the Liens
created under the Chrysler Credit Support Documents for the benefit of
Chrysler) on any of such Borrower or such other Obligor's properties.
SECTION 7.3. Government Approval, Regulation, etc. Other than those
authorizations, approvals or other actions by, and notices to or filings with,
any governmental authority or regulatory body, if any, which have been or, in
the case of the CP Program, will be duly obtained or made and are in full force
and effect, no additional authorization or approval or other action by, and no
additional notice to or filing with, any governmental authority or regulatory
body or other Person is required for the due execution, delivery or performance
by any Borrower or any other Obligor of this Agreement, the Notes or any other
Loan Document to which it is a party, or, except to the extent such failure to
so obtain or make such authorizations, approvals or other actions could not
reasonably be expected to have an adverse effect on the interests of the Lenders
hereunder and under the other Loan Documents or a material adverse effect on the
business, property, operations, assets, liabilities, condition (financial or
otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole,
for such Borrower's and each such other Obligor's participation in the
consummation of the Transaction. No Borrower nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
SECTION 7.4. Validity, etc. This Agreement constitutes, and the Notes and
each other Loan Document executed by each Borrower will, on the due execution
and delivery thereof, constitute, the legal, valid and binding obligations of
such Borrower, enforceable against such Borrower in accordance with their
respective terms; and each Loan Document executed pursuant hereto by each other
Obligor will, on the due execution and delivery thereof by such Obligor, be the
legal, valid and binding obligation of such Obligor be the legal, valid and
binding obligation of such Obligor, as the case may be, enforceable in
accordance with its terms. Each of the Loan Documents which purports to create a
security interest creates a valid first priority security interest in the
Collateral (as defined in such Loan Document) subject thereto, subject only to
Liens permitted by Section 8.2.3, securing the payment of the Obligations
described therein.
SECTION 7.5. Financial Information; Absence of Undisclosed Liabilities.
The financial statements of each Borrower and its Subsidiaries furnished to each
Agent and each Lender pursuant to clauses (a) and (b) of Section 6.1.5 have been
prepared in accordance with GAAP consistently applied, and present fairly, in
all material respects, the consolidated financial condition of the entities
covered thereby as at the dates thereof and the results of their operations for
the periods then ended. Neither the Parent nor any of its Subsidiaries had any
material liabilities (matured or unmatured, fixed or contingent) that were not
fully reflected or provided for on the financial statements delivered pursuant
to clause (a) and (b) of Section 6.1.5, whether or not required by GAAP to be
shown in such financial statements, except as set forth in Item 7.5
("Liabilities") of the Disclosure Schedule. The Pro Forma Balance Sheet
delivered pursuant to clause (c) of Section 6.1.5 has been prepared in
accordance with the
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requirements of Regulation S-X and utilizing accounting principles that when
applied to the Transaction provide a reasonable basis on which to present
unaudited pro forma financial data. All balance sheets, all statements of
operations, shareholders' equity and cash flow and all other financial
information of each of the Parent and its Subsidiaries furnished pursuant to
Section 8.1.1 have been and will for periods following the Effective Date be
prepared in accordance with GAAP consistently applied, and do or will present
fairly, in all material respects, the consolidated financial condition of the
entities covered thereby as at the dates thereof and the results of their
operations for the periods then ended.
SECTION 7.6. No Material Adverse Change. There has been no material
adverse change in the business, property, operations, assets, liabilities,
condition (financial or otherwise) or prospects of the Parent and its
Subsidiaries, taken as a whole, since September 30, 1997.
SECTION 7.7. Litigation, Labor Controversies, etc. There is no pending or,
to the best knowledge of any Borrower, threatened litigation, action,
proceeding, or labor controversy affecting any Borrower or any of its
Subsidiaries, or any of their respective properties, businesses, assets or
revenues, which may materially adversely affect the business, property,
operations, assets, liabilities, condition (financial or otherwise) or prospects
of the Parent and its Subsidiaries, taken as a whole, or which purports to
affect the legality, validity or enforceability of this Agreement, the Notes or
any other Loan Document, except as disclosed in Item 7.7 ("Litigation") of the
Disclosure Schedule.
The consummation of the Transaction will not give rise to a right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which any Obligor (or any predecessor) is a
party or by which the Parent or any of its Subsidiaries (or any predecessor) is
bound.
SECTION 7.8. Subsidiaries. (a) The Parent has no direct Subsidiaries,
except as set forth in Item 7.8(a) ("Existing Subsidiaries of the Parent") of
the Disclosure Schedule.
(b) Dollar has no Subsidiaries, except those Subsidiaries (i) which are
identified in Item 7.8(b) ("Existing Subsidiaries of Dollar") of the Disclosure
Schedule by their correct legal name, their jurisdiction of organization and the
holders (and their respective percentage ownership) of the Capital Stock thereof
or (ii) which are permitted to have been acquired in accordance with Section
8.2.5 or 8.2.10.
(c) Thrifty has no Subsidiaries, except those Subsidiaries (i) which are
identified in Item 7.8(c) ("Existing Subsidiaries of Thrifty") of the Disclosure
Schedule by their correct legal name, their jurisdiction of organization and the
holders (and their respective percentage ownership of) the Capital Stock thereof
or (ii) which are permitted to have been acquired in accordance with Section
8.2.5 or 8.2.10.
SECTION 7.9. Ownership of Properties. Except as permitted pursuant to
Section 7.13 or Section 8.2.3, each Borrower and each of its Subsidiaries owns
(i) in the case of owned real property, good and marketable fee title to, and
(ii) in the case of owned personal property, good
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and valid title to, or, in the case of leased real or personal property, valid
and enforceable leasehold interests (as the case may be) in, all of its
properties and assets, real and personal, tangible and intangible, of any nature
whatsoever, to the extent reflected on the financial statements dated as of
September 30, 1997, or if later, the last day of the most recently completed
Fiscal Quarter with respect to which, pursuant to Section 8.1.1, financial
statements have been, or are required to have been, delivered by the Parent to
the Administrative Agent, free and clear in each case of all Liens or claims,
except for Liens permitted pursuant to Section 8.2.3. The real property
described in Schedule IV constitutes each of the real estate owned in fee by a
Borrower or any of its Subsidiaries on the date hereof (other than the Excluded
Property) having a net book value of at least $500,000. All other real property
owned in fee by a Borrower or any of its Subsidiaries on the date hereof (other
than the Excluded Property) which is not set forth on such Schedule IV does not
in the aggregate have a net book value exceeding $2,500,000.
SECTION 7.10. Taxes. Each Borrower and each of its Subsidiaries has filed
all material tax returns and reports required by law to have been filed by it
and has paid all taxes and governmental charges thereby shown to be due and
owing, except any such taxes or charges which are being diligently contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.
SECTION 7.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the date of any Credit Extension hereunder, (i)
no steps have been taken to terminate any Pension Plan, and (ii) no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise to
a Lien under section 302(f) of ERISA, which in the case of any of the events
described in clause (i) or (ii) above could reasonably be expected to result in
a liability of the Parent and its Subsidiaries in excess of $1,000,000. No
condition exists or event or transaction has occurred with respect to any
Pension Plan which might result in the incurrence by any Borrower or any member
of the Controlled Group of any liability, fine or penalty that, in the
aggregate, exceeds $1,000,000. Except as disclosed in Item 7.11 ("Employee
Benefit Plans") of the Disclosure Schedule, no Borrower nor any member of the
Controlled Group has any contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
SECTION 7.12. Environmental Warranties. Except as set forth in Item 7.12
("Environmental Matters") of the Disclosure Schedule (none of which items
disclosed therein, singly or in the aggregate, have, or may reasonably be
expected to have, a material adverse effect on the business, property,
operations, assets, liabilities, condition (financial or otherwise) or prospects
of the Parent and its Subsidiaries, taken as a whole),
(a) all facilities and property (including underlying groundwater)
owned or leased by any Borrower or any of its Subsidiaries have been, and
continue to be, owned or leased by such Borrower and such Subsidiary, as
the case may be, in material compliance with all Environmental Laws and in
accordance with industry practices;
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(b) there have been no past, and there are no pending or threatened
(i) claims, complaints, notices or requests for information
received by any Borrower or any of its Subsidiaries with respect to
any alleged violation of any Environmental Law, which, if true
would, singly or in the aggregate, result in a liability of more
than $2,500,000 to the Parent and/or any of its Subsidiaries, or
(ii) complaints, notices or inquiries to any Borrower or any
of its respective Subsidiaries regarding potential liability under
any Environmental Law, which, if true would, singly or in the
aggregate, result in a liability of more than $2,500,000 to the
Parent and/or any of its Subsidiaries;
(c) there have been no Releases of Hazardous Materials at, on or
under any property now or previously owned or leased by any Borrower or
any of its Subsidiaries that, singly or in the aggregate, have, or may
reasonably be expected to have, a material adverse effect on the business,
property, operations, assets, liabilities, condition (financial or
otherwise) or prospects of the Parent and its Subsidiaries, taken as a
whole;
(d) each Borrower and each of its Subsidiaries have been issued and
are in material compliance with all permits, certificates, approvals,
licenses and other authorizations relating to environmental matters and
necessary or desirable for their businesses;
(e) no property now or previously owned or leased by any Borrower or
any of its Subsidiaries is listed or proposed for listing (with respect to
owned property only) on the National Priorities List pursuant to CERCLA,
on the CERCLIS or on any similar state list of sites requiring
investigation or clean-up;
(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by any Borrower or any of its Subsidiaries
that, singly or in the aggregate, have, or may reasonably be expected to
have, a material adverse effect on the business, property, operations,
assets, liabilities, condition (financial or otherwise) or prospects of
the Parent and its Subsidiaries, taken as a whole;
(g) Borrower nor any of its Subsidiaries has directly transported or
directly arranged for the transportation of any Hazardous Material to any
location which is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state
list or which is the subject of federal, state or local enforcement
actions or other investigations which may lead to material claims against
such Borrower or such Subsidiary thereof for any remedial work, damage to
natural resources or personal injury, including claims under CERCLA;
(h) no Borrower nor any of its Subsidiaries has entered into any
agreements or engaged in any activities that, singly or in the aggregate,
would give rise to liability under
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any Environmental Law with regard to acts, omissions or conditions of
property of any third party, including any franchisee of any Borrower or
any of its Subsidiaries or that, singly or in the aggregate, have, or may
reasonably be expected to have, a material adverse effect on the business,
property, operations, assets, liabilities, condition (financial or
otherwise) or prospects of the Parent and its Subsidiaries, taken as a
whole;
(i) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by any Borrower
or any of its Subsidiaries that, singly or in the aggregate, have, or may
reasonably be expected to have, a material adverse effect on the business,
property, operations, assets, liabilities, condition (financial or
otherwise) or prospects of the Parent and its Subsidiaries, taken as a
whole; and
(j) no conditions exist at, on or under any property now or
previously owned or leased by the Parent or any of its Subsidiaries,
which, with the passage of time, or the giving of notice or both, would
give rise to liability under any Environmental Law that, singly or in the
aggregate, has, or may reasonably be expected to have, a material adverse
effect on the business, property, operations, assets, liabilities,
condition (financial or otherwise) or prospects of the Parent and its
Subsidiaries, taken as a whole.
SECTION 7.13. Intellectual Property. Each Borrower and each of its
Subsidiaries owns and possesses or licenses (as the case may be) all such
patents, patent rights, trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights and copyrights as such Borrower
considers necessary for the conduct of the businesses of such Borrower and its
Subsidiaries as now conducted without, individually or in the aggregate, any
infringement upon rights of other Persons, in each case except as could not
reasonably be expected to result in a material adverse effect on the business,
property, operations, assets, liabilities, condition (financial or otherwise) or
prospects of the Parent and its Subsidiaries, taken as a whole, and there is no
individual patent, patent right, trademark, trademark right, trade name, trade
name right, service mark, service mark right or copyright the loss of which
could reasonably be expected to result in a material adverse change in the
business, property, operations, assets, liabilities, condition (financial or
otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole,
except as may be disclosed in Item 7.13 ("Intellectual Property") of the
Disclosure Schedule.
SECTION 7.14. Regulations G, U and X. No Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Credit Extensions
will be used to purchase or carry margin stock or otherwise for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation G, U or X.
Terms for which meanings are provided in F.R.S. Board Regulation G, U or X or
any regulations substituted therefor, as from time to time in effect, are used
in this Section with such meanings.
SECTION 7.15. Accuracy of Information. All information (other than
financial statements and financial and business projections and forecasts)
heretofore or contemporaneously furnished by or on behalf of any Borrower or any
of their respective
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Subsidiaries in writing to any Agent, the Issuer or any Lender for purposes of
or in connection with this Agreement or any transaction contemplated hereby
(including the Transaction), is, and all of other such information hereafter
furnished by or on behalf of any Borrower or any of their respective
Subsidiaries to any Agent, the Issuer or any Lender will be, true and accurate
in every material respect on the date as of which such information is dated or
certified and as of the date of execution and delivery of this Agreement by such
Agent, the Issuer and such Lender, and such information is not, or shall not be,
as the case may be, incomplete by omitting to state any material fact necessary
to make such information not materially misleading in light of the circumstances
under which such information was furnished. All financial and business
projections and forecasts heretofore or contemporaneously furnished by or on
behalf of any Borrower or any of its Subsidiaries in writing to any Agent, the
Issuer or any Lender for purposes of or in connection with this Agreement or any
transaction contemplated hereby (including the Transaction) have been, and all
of the financial and business projections and forecasts hereafter furnished by
or on behalf of any Borrower or any of its Subsidiaries in writing to any Agent,
the Issuer or any Lender will be prepared in good faith based upon assumptions
which the Borrowers believe to be reasonable.
SECTION 7.16. Transaction Documents. As of the Closing Date, each of the
Chrysler-Dollar Supply Agreement, the Chrysler-Thrifty Supply Agreement, the
Continuing Chrysler Arrangements (including the Chrysler Credit Support
Agreement and the Tax Sharing Agreement) and the Walden Agreement has been duly
executed and delivered by each of the parties thereto and is in full force and
effect without the existence of any material default thereunder.
SECTION 7.17. Non-Guarantor Subsidiaries. (a) Each Domestic Subsidiary of
the Parent (other than Dollar, Thrifty and any SPC) that
(i) accounted for more than 1 1/2% of consolidated revenues of the
Parent and its Subsidiaries or 1 1/2% of consolidated net earnings of the
Parent and its Subsidiaries, in each case for the four consecutive Fiscal
Quarters of the Parent ending on September 30, 1997, or, if later, the
last day of the most recently completed Fiscal Quarter with respect to
which, pursuant to Section 8.1.1, financial statements have been, or are
required to have been, delivered by the Parent to the Administrative
Agent, or
(ii) has assets which represent more than 1 1/2% of the consolidated
assets of the Parent and its Subsidiaries as of September 30, 1997, or, if
later, the last day of the last Fiscal Quarter of the most recently
completed Fiscal Quarter with respect to which, pursuant to Section 8.1.1,
financial statements have been, or are required to have been, delivered by
the Parent to the Administrative Agent,
is a party to the Subsidiary Guaranty.
(b) There are no Domestic Subsidiaries of the Parent that are not
Subsidiary Borrowers or Subsidiary Guarantors and that, when taken together with
all other Subsidiaries of the Parent that are not Subsidiary Borrowers or
Subsidiary Guarantors,
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(i) account in the aggregate for more than 2 1/2% of consolidated
revenues of the Parent and its Subsidiaries or 2 1/2% of consolidated net
earnings of the Parent and its Subsidiaries, in each case for the four
consecutive Fiscal Quarters of the Parent ending on September 30, 1997,
or, if later, the last day of the most recently completed Fiscal Quarter
with respect to which, pursuant to Section 8.1.1, financial statements
have been, or are required to have been, delivered by the Parent to the
Administrative Agent, or
(ii) have assets which represent more than 2 1/2% of the
consolidated assets of the Parent and its Subsidiaries as of September 30,
1997, or, if later, the last day of the last Fiscal Quarter of the most
recently completed Fiscal Quarter with respect to which, pursuant to
Section 8.1.1, financial statements have been, or are required to have
been, delivered by the Parent to the Administrative Agent.
ARTICLE VIII
COVENANTS
SECTION 8.1. Affirmative Covenants. Each Borrower agrees with each Agent,
the Issuer and each Lender that, until all Commitments have terminated, all
Letters of Credit shall have terminated or expired and all Obligations have been
paid and performed in full, such Borrower will perform the obligations set forth
in this Section 8.1.
SECTION 8.1.1. Financial Information, Reports, Notices, etc. Each Borrower
will furnish, or will cause to be furnished, to each Lender, the Issuer and the
Administrative Agent copies of the following financial statements, reports,
notices and information:
(a) as soon as available and in any event within 45 days after the
end of each of the first three Fiscal Quarters of each Fiscal Year of the
Parent, (i) a consolidated balance sheet of the Parent and its
Subsidiaries and a consolidating balance sheet of the Parent and its
direct Subsidiaries, in each case, as of the end of such Fiscal Quarter
and (ii) consolidated statements of operations and cash flow of the Parent
and its Subsidiaries and consolidating statements of operations and cash
flow of the Parent and its direct Subsidiaries, in each case for such
Fiscal Quarter and for the period commencing at the end of the previous
Fiscal Year and ending with the end of such Fiscal Quarter, and, in each
case, certified by the chief financial Authorized Officer of the Parent;
(b) as soon as available and in any event within 90 days after the
end of each Fiscal Year of the Parent, (i) a copy of the annual audit
report for such Fiscal Year for the Parent and its Subsidiaries, including
therein a consolidated balance sheet of the Parent and its Subsidiaries
and a consolidating balance sheet of the Parent and its direct
Subsidiaries, in each case as of the end of such Fiscal Year and
consolidated statements of operations and cash flow of the Parent and its
Subsidiaries and consolidating statements of operations and cash flow of
the Parent and its direct Subsidiaries, in each
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case for such Fiscal Year, in each case certified (without any
Impermissible Qualification) in a manner acceptable to the Administrative
Agent and the Required Lenders by Deloitte & Touche or other nationally
recognized independent public accountants acceptable to the Administrative
Agent and the Required Lenders, together with a report from such
accountants containing a computation of each of the financial ratios and
restrictions contained in Section 8.2.4 and to the effect that, in making
the examination necessary for the signing of such annual report by such
accountants, they have not become aware of any Default that has occurred
and is continuing, or, if they have become aware of such Default,
describing such Default and the steps, if any, being taken to cure it; and
(ii) to the extent prepared for any other Person, (A) a copy of the annual
audit report for such Fiscal Year for Dollar and its Subsidiaries,
including therein a consolidated balance sheet of Dollar and its
Subsidiaries, as of the end of such Fiscal Year and consolidated
statements of operations and cash flow of Dollar and its Subsidiaries for
such Fiscal Year, and (B) a copy of the annual audit report for such
Fiscal Year for Thrifty and its Subsidiaries including therein a
consolidated balance sheet of Thrifty and its Subsidiaries as of the end
of such Fiscal Year and consolidated statements of operations and cash
flow of Thrifty and its Subsidiaries for such Fiscal Year, in each case
certified (without any Impermissible Qualification) in a manner acceptable
to the Administrative Agent and the Required Lenders by Deloitte & Touche
or other nationally recognized independent public accountants acceptable
to the Administrative Agent and the Required Lenders;
(c) as soon as available and in any event within 45 days after the
end of each Fiscal Quarter, a Compliance Certificate, executed by the
chief financial Authorized Officer of the Parent, showing, among other
things, (in reasonable detail and with appropriate calculations and
computations in all respects satisfactory to the Administrative Agent)
compliance with the financial covenants set forth in Section 8.2.4;
(d) as soon as possible and in any event within three Business Days
after the occurrence of each Default, a statement of the chief financial
Authorized Officer of the Parent setting forth details of such Default and
the action which the Parent or any other Borrower has taken and proposes
to take with respect thereto;
(e) as soon as possible and in any event within three Business Days
after (x) the occurrence of any adverse development with respect to any
litigation, action, proceeding or labor controversy of the type that would
be required to be described in Item 7.7 of the Disclosure Schedule or (y)
the commencement of any labor controversy, litigation, action or
proceeding of the type required to be described in Section 7.7, notice
thereof and copies of all documentation relating thereto;
(f) promptly after the sending or filing thereof, copies of all
reports which the Parent sends to any of its securityholders, and all
reports and registration statements which the Parent or any of its
Subsidiaries files with the SEC or any national securities exchange;
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(g) as soon as possible and in any event within three Business Days
after becoming aware of the institution of any steps by a Borrower or any
other Person to terminate any Pension Plan, or the failure to make a
required contribution to any Pension Plan if such failure is sufficient to
give rise to a Lien under section 302(f) of ERISA, or the taking of any
action with respect to a Pension Plan which could reasonably be expected
to result in the requirement that such Borrower or any of their respective
Subsidiaries furnish a bond or other security to the PBGC or such Pension
Plan, or the occurrence of any event with respect to any Pension Plan
which could reasonably be expected to result in the incurrence by a
Borrower of any material liability, fine or penalty, or any material
increase in the contingent liability of such Borrower with respect to any
post-retirement Welfare Plan benefit, notice thereof and copies of all
documentation relating thereto;
(h) as soon as available and in any event no later than 30 days
after the first day of each Fiscal Year of the Parent, an annual budget,
prepared on a monthly basis for such Fiscal Year of the Parent containing
(i)(A) a consolidated projected balance sheet of each of the Parent and
its Subsidiaries, Dollar and its Subsidiaries, and Thrifty and its
Subsidiaries, and (B) a consolidating projected balance sheet of the
Parent and its direct Subsidiaries and (ii)(A) consolidated statements of
operations and cash flow of each of the Parent and its Subsidiaries,
Dollar and its Subsidiaries and Thrifty and its Subsidiaries, and (B)
consolidating statements of operations and cash flow of the Parent and its
direct Subsidiaries;
(i) concurrently with the delivery of the financial statements
described in clause (b) of this Section 8.1.1, a narrative explanation, in
the form customarily provided to the Board of Directors of the Parent, of
any material variance from the budget of the Parent for such Fiscal Year
that is reflected in such financial statements, unless the Parent has
timely filed with the SEC an annual report on Form 10-K, in which case
delivery of such annual report to each Lender, the Issuer and the
Administrative Agent shall satisfy the requirements of this clause (i);
(j) as soon as possible and in any event within ten days after the
delivery thereof, copies of all notices, agreements or documents delivered
pursuant to any agreement for borrowed money to which the Parent or any
Subsidiary of the Parent is a party and with a commitment or outstandings
exceeding $2,500,000, except for such notices, agreements or documents (i)
delivered pursuant to the terms hereof or (ii) which are delivered in the
ordinary course of each such agreement (such as borrowing requests, letter
of credit requests and the like); and
(k) such other information respecting the condition or operations,
financial or otherwise, of any Borrower or any of their respective
Subsidiaries as any Lender through the Administrative Agent may from time
to time reasonably request.
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SECTION 8.1.2. Compliance with Laws, Material Agreements, etc. Each
Borrower will, and will cause each of its Subsidiaries to, comply in all
material respects with all material laws, rules, regulations, orders and
agreements applicable to it, such compliance to include:
(a) the maintenance and preservation of its corporate existence and
qualification as a foreign corporation;
(b) the maintenance and preservation of all governmental licenses,
permits and other approvals necessary for it to perform its obligations
under this Agreement, the Notes and each other Loan Document to which it
is a party and to own and hold under lease its property and to conduct its
business substantially as currently conducted by it;
(c) the maintenance, preservation and renewal of all material
agreements necessary to conduct its business substantially as currently
conducted by it (or the substitution for any such material agreement with
a similar agreement), including the Chrysler-Dollar Supply Agreement and
the Chrysler-Thrifty Supply Agreement; and
(d) the payment, before the same become delinquent, of all taxes,
assessments and governmental charges imposed upon it or upon its property
except to the extent being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on its books.
SECTION 8.1.3. Maintenance of Properties. Each Borrower will, and will
cause each of its Subsidiaries to, maintain, preserve, protect and keep its
properties in good repair, working order and condition, and make necessary and
proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times unless the such
Person determines in good faith that the continued maintenance of any of its
properties is no longer economically desirable.
SECTION 8.1.4. Insurance. Each Borrower will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained with responsible insurance
companies (a) insurance with respect to its properties and business (including
business interruption insurance), against loss or damage by casualties and
contingencies, in amounts not less than the then full replacement value of such
properties, (b) general public liability insurance (including umbrella excess
liability insurance) against liability on account of damage to persons and
property in an amount not less than $7,500,000 per occurrence and $75,000,000
in the aggregate (provided that (i) Thrifty may self-insure up to $1,000,000
per occurrence through a combination of self-insurance, deductibles and/or
quota-sharing arrangements and may maintain a quota sharing arrangement with an
unaffiliated carrier under which it pays up to 15% of the portion of any such
loss between $1,000,000 and $2,000,000, and (ii) Dollar may self-insure up
to $1,000,000 per occurrence through a combination of self-insurance,
deductibles and/or quota-sharing arrangements), (c) insurance required under all
applicable workers' compensation laws in amounts which comply with relevant
statutory requirements, (d) environmental impairment liability insurance of such
types and in such amounts as may now or hereafter be required by applicable law
and (e) each other type of insurance in such amount as is customary in the case
of
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similar businesses of established reputation. All insurance policies described
under this Section shall be in form reasonably satisfactory to the
Administrative Agent. Upon request of the Administrative Agent, each Borrower
will, and will cause each of its Subsidiaries to, furnish (or cause to be
furnished) to each Lender at reasonable intervals a certificate of an Authorized
Officer of such Borrower setting forth the nature and extent of all insurance
maintenance by such Borrower and its Subsidiaries in accordance with this
Section.
SECTION 8.1.5. Books and Records. Each Borrower will, and will cause each
of its Subsidiaries to, keep books and records which accurately reflect all of
their respective business affairs and transactions and permit the Administrative
Agent and each Lender or any of their respective representatives, at reasonable
times and intervals, to visit all of their respective offices, to discuss their
respective financial matters with their respective officers and independent
public accountant (and each Borrower hereby authorizes such independent public
accountants to discuss such financial matters with each Lender or its
representatives whether or not any representative of such Borrower or such
Subsidiary is present, provided such Borrower has been given prior notice of
such discussion and an opportunity to be present during such discussion through
one or more of its representatives) and to examine (and, at the expense of such
Borrower, photocopy extracts from) any of their respective books or other
corporate records. The Borrowers shall, jointly and severally, pay any fees of
such independent public accountant incurred in connection with the
Administrative Agent's or any Lender's exercise of its rights pursuant to this
Section.
SECTION 8.1.6. Environmental Covenant. Each Borrower will, and will cause
each of its Subsidiaries to,
(a) use and operate all of their respective facilities and
properties in material compliance with all Environmental Laws, keep all
necessary permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain in
material compliance therewith, and handle all Hazardous Materials in
material compliance with all applicable Environmental Laws;
(b) follow practices that are at least as effective as industry
practices to minimize and respond to spills and overfills of petroleum
products;
(c) respond to past and ongoing releases of petroleum-containing
materials in a manner that minimizes potential liability to third parties
for off-site contamination from facilities owned or leased or otherwise
operated by such Borrower or any of its Subsidiaries;
(d) respond to past and ongoing releases of petroleum-containing
materials in a manner that minimizes any likelihood that such Borrower or
any of its Subsidiaries would incur costs or damages that, singly or in
the aggregate, have, or may reasonably be expected to have, a material
adverse effect on the business, property, operations, assets, liabilities,
condition (financial or otherwise) or prospects of the Parent and its
Subsidiaries, taken as a whole;
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(e) manage the disposition of residuals such as spent
petroleum-containing material in a manner that minimizes any likelihood
that such Borrower or any of its Subsidiaries would incur costs or damages
that, singly or in the aggregate, have, or may reasonably be expected to
have, a material adverse effect on the business, property, operations,
assets, liabilities, condition (financial or otherwise) or prospects of
the Parent and its Subsidiaries, taken as a whole;
(f) immediately notify the Administrative Agent and provide copies
upon receipt of all written claims, complaints, notices or inquiries
relating to the condition of their facilities and properties or compliance
with Environmental Laws, other than any claim, complaint, notice or
inquiry that alleges or makes reference to a violation of any
Environmental Law which, if true, could result in payments not in excess
of $2,500,000; and
(g) provide such information and certifications which the
Administrative Agent may reasonably request from time to time to evidence
compliance with this Section 8.1.6.
SECTION 8.1.7. Use of Proceeds. Each Borrower shall apply the proceeds of
each Credit Extension in accordance with the eighth recital; without limiting
the foregoing, no proceeds of any Loan will be used to acquire any equity
security of a class which is registered pursuant to Section 12 of the Exchange
Act or any "margin stock", as defined in F.R.S. Board Regulation U.
SECTION 8.1.8. Additional Real Property. Each Borrower shall, and shall
cause each of its Subsidiaries to, cause the Administrative Agent and the
Lenders to have at all times a first priority perfected security interest
(subject only to Liens and encumbrances permitted under Section 8.2.3) in all of
the real property owned from time to time by such Borrower and its Subsidiaries
(other than any such real property that has a net book value of less than
$500,000 and that, when added to the net book value of all other real property
owned by the Borrowers and their Subsidiaries that is not subject to a first
priority perfected security interest in favor of the Administrative Agent and
the Lenders, does not exceed $2,500,000, in either case). Without limiting the
generality of the foregoing, each such Borrower shall, and shall cause each such
Subsidiary to, execute and deliver or cause to be executed and delivered
Mortgages, that may be necessary or, in the opinion of the Administrative Agent,
desirable to create a valid, perfected Lien against such real property, together
with
(a) evidence of the completion (or satisfactory arrangements for the
completion) of all recordings and filings of each such Mortgage;
(b) mortgagee's title insurance policies in favor of the
Administrative Agent and the Lenders and issued by insurers reasonably
satisfactory to the Administrative Agent, in amounts and in form and
substance reasonably satisfactory to the Administrative Agent, with
respect to each Additional Material Property purported to be covered by
each such Mortgage, insuring that title to such property is marketable and
that the interests created by the Mortgage constitute valid first Liens
thereon free and clear of all defects
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and encumbrances other than as approved by the Administrative Agent, such
policies shall also include a revolving credit endorsement and such other
endorsements as the Administrative Agent shall request and shall be
accompanied by evidence of the payment in full of all premiums thereon;
(c) surveys for each Additional Material Property made in accordance
with the Minimum Standard Detail Requirements for Land Title Surveys
jointly established and adopted by the American Land Title Association and
the American Congress of Surveying and Mapping in 1992, which surveys
shall be certified to the Administrative Agent and in form and substance
reasonably satisfactory to the Administrative Agent;
(d) Uniform Commercial Code financing statements related to the
security interests created by each Mortgage, together with evidence of the
completion (or satisfactory arrangements for the completion) of all
recordings and filings of such financing statements in the appropriate
offices and records as may be necessary or, in the reasonable opinion of
the Administrative Agent, desirable to create valid, perfected first
priority Liens against the improvements purported to be covered thereby;
and
(e) such other certifications (including flood hazard
certifications), approvals, opinions or documents as the Administrative
Agent may reasonably request.
SECTION 8.1.9. Future Subsidiaries. Without limiting the effect of any
provision contained herein (including Section 8.2.5), upon any Person becoming
either a direct or indirect Subsidiary of the Parent (other than an SPC or a
Non-Material Subsidiary),
(a) in the event such Person is a Subsidiary which is not a Foreign
Subsidiary, such Person (i) if not theretofore a party to the Security
Agreement, shall execute and deliver to the Administrative Agent a
supplement to the Security Agreement for the purpose of becoming a grantor
thereunder, which supplement shall be substantially in the form attached
to the Security Agreement and (ii) to the extent required under Section
8.2.2, shall execute and deliver to the Parent or any of its applicable
Subsidiaries an Intercompany Note in a principal amount not less than the
aggregate amount such Person may borrow from the Parent or such Subsidiary
(which Intercompany Note shall be endorsed and pledged to the
Administrative Agent pursuant to the Pledge Agreement (in accordance with
the succeeding paragraph));
(b) the Parent or, if not the Parent, the Subsidiary of the Parent
(provided such Subsidiary is not a Foreign Subsidiary exempted from the
requirement of becoming a Subsidiary Guarantor as a result of the proviso
to the succeeding clause (c)) that will own shares of the Capital Stock of
such Person (which Subsidiary, if not theretofore a party to the Pledge
Agreement, shall execute and deliver to the Administrative Agent a
supplement to the Pledge Agreement for the purpose of becoming a pledgor
thereunder, which supplement shall be substantially in the form attached
to the Pledge Agreement) shall, pursuant to the Pledge Agreement (as
further supplemented, if necessary, by a Foreign Pledge Agreement), pledge
to the Administrative Agent (i) all of the outstanding
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shares of the Capital Stock of such Person owned by the Parent or such
Subsidiary, together with (A) undated stock powers or equivalent
instruments of transfer satisfactory to the Administrative Agent for such
certificates or such other evidence of beneficial ownership, executed in
blank (or, if any such shares of Capital Stock are uncertificated,
confirmation and evidence satisfactory to the Administrative Agent that
the security interest in such uncertificated securities has been perfected
by the Administrative Agent in accordance with the U.C.C. or any similar
or local law which may be applicable) and (B) executed copies of Uniform
Commercial Code financing statements naming the Parent or such Subsidiary
as the debtor and the Administrative Agent as the secured party, suitable
for filing under the Uniform Commercial Code of all jurisdictions as may
be necessary or, in the reasonable opinion of the Administrative Agent,
desirable to perfect the security interest of the Administrative Agent in
the interests of the Parent or such Subsidiary in such Person pledged
pursuant to such Pledge Agreement (and such Foreign Pledge Agreement, if
applicable); provided, however, that the Parent or such Subsidiary shall
not be required to pledge the shares of Capital Stock of a Foreign
Subsidiary required to be pledged hereunder (1) if the Required Lenders
have otherwise agreed or (2) to the extent such pledge could reasonably be
expected to constitute at any time an investment of earnings in United
States property under Section 956 (or any successor provision thereto) of
the Code that would increase by a material amount the amount of United
States federal income tax that would otherwise be payable by the Parent
and the other members of the affiliated group of corporations filing a
consolidated federal income tax return with the Parent in the absence of
such pledge, as determined by the Parent based on existing financial
statements and on financial projections prepared in good faith based upon
assumptions which the Parent believes to be reasonable and as evidenced by
a certificate of the chief financial Authorized Officer of the Parent that
is accepted in writing by the Administrative Agent (such acceptance not to
be unreasonably withheld and which acceptance shall be deemed to have
occurred in the absence of a written notice from the Administrative Agent
that is given to the Parent within five Business Days of the
Administrative Agent's receipt of such certificate, indicating the reasons
for not accepting such certificate); provided further, however, that, in
the event of any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any law or regulation,
directive or guideline of any governmental authority (a "Law Change") that
could reasonably be expected to alter the conclusion set forth in such
certificate, the Administrative Agent or the Required Lenders may request
the Parent to deliver another such certificate in light of such event and,
in the absence of the delivery and acceptance of such certificate as
provided above, require the pledge of such shares of Capital Stock but
provided further, however, that, in the event that any Law Change occurs
subsequent to the date that any such pledge of such shares of Capital
Stock and is granted, and as a result thereof, such pledge could then
reasonably be expected to increase by a material amount the amount of
United States federal income tax that would otherwise be payable by the
Parent and the other members of the affiliated group of corporations
filing a consolidated federal income tax return with the Parent in the
absence of such pledge, then, such pledge shall be released upon the
written acceptance by the Administrative Agent of a certificate of the
chief financial Authorized Officer of the Parent detailing the adverse
effect of such subsequent Law Change (such
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acceptance not to be unreasonably withheld and which acceptance shall be
deemed to have occurred in the absence of a written notice from the
Administrative Agent that is given to the Parent within five Business Days
of the Administrative Agent's receipt of such certificate, indicating the
reasons for not accepting such certificate).
(c) if not theretofore a party to the Subsidiary Guaranty, such
Person shall execute and deliver to the Administrative Agent a supplement
to the Subsidiary Guaranty for the purpose of becoming a guarantor
thereunder, which supplement shall be substantially in the form attached
to the Subsidiary Guaranty; provided, however, that, in the event such
Subsidiary is a Foreign Subsidiary, such Subsidiary shall not be required
to become a guarantor under the Subsidiary Guaranty (1) if the Required
Lenders have otherwise agreed or (2) to the extent such guaranty could
reasonably be expected increase the amount of United States federal income
tax that would otherwise be payable by the Parent and the other members of
the affiliated group of corporations filing a consolidated federal income
tax return with the Parent in the absence of such guaranty, as determined
by the Parent based on existing financial statements and on financial
projections prepared in good faith based upon assumptions which the Parent
believes to be reasonable and as evidenced by a certificate of the chief
financial Authorized Officer of the Parent that is accepted in writing by
the Administrative Agent (such acceptance not to be unreasonably withheld
and which acceptance shall be deemed to have occurred in the absence of a
written notice from the Administrative Agent that is given to the Parent
within five Business Days of the Administrative Agent's receipt of such
certificate, indicating the reasons for not accepting such certificate);
provided further, however, that, in the event of any Law Change that could
reasonably be expected to alter the conclusion set forth in such
certificate, the Administrative Agent or the Required Lenders may request
the Parent to deliver another such certificate in light of such event and,
in the absence of the delivery and acceptance of such certificate as
provided above, require the execution and delivery by such Person of such
supplement to the Subsidiary Guaranty; but provided further, however,
that, in the event that any Law Change occurs subsequent to the date that
any such supplement to the Subsidiary Guaranty becomes effective, and as a
result thereof, such guaranty could then reasonably be expected to
increase by a material amount the amount of United States federal income
tax that would otherwise be payable by the Parent and the other members of
the affiliated group of corporations filing a consolidated federal income
tax return with the Parent in the absence of such guaranty, then, such
guarantee shall cease to be effective following the written acceptance by
the Administrative Agent of a certificate of the chief financial
Authorized Officer of the Parent detailing the adverse effect of such
subsequent Law Change (such acceptance not to be unreasonably withheld and
which acceptance shall be deemed to have occurred in the absence of a
written notice from the Administrative Agent that is given to the Parent
within five Business Days of the Administrative Agent's receipt of such
certificate, indicating the reasons for not accepting such certificate);
(d) the Administrative Agent shall have received from each such
Person certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report certified
by a party acceptable to the
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Administrative Agent, dated a date reasonably near (but prior to) the date
of any such Person becoming a direct or indirect Subsidiary of the Person,
listing all effective financing statements, tax liens and judgment liens
which name such Person as the debtor and which are filed in the
jurisdictions in which filings are to be made pursuant to this Agreement
and the other Loan Documents, and in such other jurisdictions as the
Administrative Agent may reasonably request, together with copies of such
financing statements (none of which (other than financing statements (i)
filed pursuant to the terms hereof in favor of the Administrative Agent,
if such Form UCC-11 or search report, as the case may be, is current
enough to list such financing statements, (ii) being terminated pursuant
to termination statements that are to be delivered on or prior to the date
such Person becomes such Subsidiary or (iii) in respect of Liens permitted
under Section 8.2.3) shall cover any of the collateral described in the
Security Agreement); and
(e) the Administrative Agent shall have received from each such
Person executed copies of U.C.C. financing statements naming each such
Person as the debtor and the Administrative Agent as the secured party,
suitable for filing under the U.C.C. of all jurisdictions as may be
necessary or, in the reasonable opinion of the Administrative Agent,
desirable to perfect the security interest of the Administrative Agent
pursuant to the Security Agreement entered into by such Person,
together, in each case, with such opinions of legal counsel as the
Administrative Agent may reasonably request, which legal opinions shall be in
form and substance reasonably satisfactory to the Administrative Agent.
SECTION 8.2. Negative Covenants. Each Borrower agrees with the
Administrative Agent, the Issuer and each Lender that, until all Commitments
have terminated, all Letters of Credit shall have terminated or expired and all
Obligations have been paid and performed in full, each Borrower will perform the
obligations set forth in this Section 8.2.
SECTION 8.2.1. Business Activities. Each Borrower will not, and will not
permit any of its Subsidiaries to, engage in any business activity, except (i)
those described in the first recital (and such activities as may be incidental
or related thereto) and (ii) the providing of telemarketing services.
SECTION 8.2.2. Indebtedness. Each Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:
(a) Indebtedness in respect of this Agreement, including the Loans
and other Obligations;
(b) until the Closing Date, Indebtedness identified in Item 8.2.2(b)
("Indebtedness to be Paid") of the Disclosure Schedule;
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(c) Indebtedness existing as of the Effective Date which is
identified in Item 8.2.2(c) ("Ongoing Indebtedness") of the Disclosure
Schedule;
(d) Indebtedness in respect of Surety Bonds in an aggregate amount
not to exceed (i) from the date hereof to (and including) the last day of
the 1998 Fiscal Year, $130,000,000, (ii) during the 1999 Fiscal Year,
$140,000,000, (iii) during the 2000 Fiscal Year, $150,000,000, (iv) during
the 2001 Fiscal Year, $160,000,000 and (v) during the 2002 Fiscal Year,
$170,000,000;
(e) Indebtedness of the Borrowers in respect of the Chrysler Letters
of Credit in an aggregate amount not to exceed $50,000,000;
(f) Indebtedness of the Subsidiary Borrowers and their respective
Subsidiaries in an aggregate principal amount not to exceed $15,000,000 at
any time outstanding which is incurred to finance buses that shuttle
vehicle rental customers to and from Dollar and Thrifty vehicle rental
sites;
(g) Vehicle Debt;
(h) Indebtedness in respect of Demand Capitalization Notes to the
extent the obligations of the Parent thereunder (whether contingent or
otherwise) do not exceed at any time $__________;
(i) Indebtedness of Foreign Subsidiaries incurred for working
capital purposes to the extent the aggregate principal amount thereof does
not exceed at any time outstanding $1,000,000;
(j) Indebtedness in an aggregate principal amount not to exceed
$2,500,000 at any time outstanding which is incurred by any Borrower or
any of its Subsidiaries to a vendor of any assets permitted to be acquired
pursuant to Section 8.2.7 to finance its acquisition of such assets;
(k) unsecured Indebtedness incurred in the ordinary course of
business (excluding Indebtedness incurred through the borrowing of money
or Contingent Liabilities);
(l) Indebtedness in respect of Capitalized Lease Liabilities to the
extent permitted by Section 8.2.7;
(m) Hedging Obligations of the Parent or any of its Subsidiaries
pursuant to agreements designed to protect the Parent or any of its
Subsidiaries against fluctuations in interest rates in respect of
Indebtedness of the Parent or such Subsidiary and not entered into for
purposes of speculation;
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(n) Hedging Obligations of a Subsidiary Borrower or any of its
Subsidiaries pursuant to agreements designed to protect such Subsidiary
Borrower or any of its Subsidiaries against fluctuations in currency
values and entered into in the ordinary course of business and not for
purposes of speculation;
(o) Indebtedness of the Parent owing to a Subsidiary Borrower or a
Subsidiary Guarantor pursuant to an Investment of such Subsidiary Borrower
or such Subsidiary Guarantor permitted pursuant to clause (e) of Section
8.2.5 or to any other Subsidiary of the Parent pursuant to clause (i) of
Section 8.2.5;
(p) Indebtedness of any Subsidiary Borrower or any Subsidiary
Guarantor owing to the Parent; provided that such Indebtedness is
evidenced by an Intercompany Note pledged to the Administrative Agent
pursuant to the terms of the Pledge Agreement;
(q) Indebtedness of a Borrower or any Subsidiary of a Borrower owing
to a Subsidiary of a Borrower that is not a Subsidiary Borrower or a
Subsidiary Guarantor; provided that such Indebtedness (other than
Indebtedness of a Subsidiary Borrower owing to RCFC in respect of amounts
advanced by RCFC to a Subsidiary Borrower) constitutes Subordinated
Intercompany Debt;
(r) Indebtedness of Subsidiary Borrowers or Subsidiary Guarantors
that are Wholly Owned Subsidiaries of the Parent owing to a Subsidiary
Borrower or a Subsidiary Guarantor; provided, however, that, in the event
the obligor in respect of such Indebtedness is a Subsidiary of the Parent
that is neither a Subsidiary Borrower nor a Subsidiary of a Subsidiary
Borrower, such Indebtedness shall not be subordinated to any other
liabilities of such obligor and shall be evidenced by an Intercompany Note
pledged to the Administrative Agent pursuant to the terms of the Pledge
Agreement;
(s) Indebtedness of Subsidiaries of the Parent owing to a Borrower
or a Subsidiary Guarantor to the extent permitted by clause (g) of Section
8.2.5;
(t) Indebtedness of a Person that becomes a Subsidiary of a
Subsidiary Borrower pursuant to a Permitted Business Acquisition or
Indebtedness that is assumed pursuant to an acquisition of assets
constituting a Permitted Business Acquisition by the acquiror of such
assets, to the extent (i) such Indebtedness existed at the time of such
Permitted Business Acquisition and was not created in contemplation
thereof, (ii) such Indebtedness is not guaranteed by any other Obligor and
(iii) the aggregate principal amount of all such Indebtedness outstanding
at any time does not exceed $5,000,000;
(u) Subordinated Debt of the Parent, to the extent (i) the terms of
such Indebtedness are consented to by the Administrative Agent (provided
such terms shall not include any scheduled principal payment (including
any sinking fund requirement) prior to December 31, 2003, any financial
covenants and any cross-default (other than cross-acceleration) to other
Indebtedness) and (ii) the aggregate principal amount of all such
Indebtedness outstanding at any time does not exceed $10,000,000;
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(v) Indebtedness which refinances Indebtedness permitted by clauses
(d), (e), (f), (g) and (u) above; provided, however, that after giving
effect to such refinancing, (i) the principal amount of outstanding
Indebtedness is not increased, (ii) neither the tenor nor the average life
thereof is reduced, (iii) the respective obligor or obligors shall be the
same on the refinancing Indebtedness as on the Indebtedness being
refinanced, (iv) the security, if any, for the refinancing Indebtedness
shall be the same as that for the Indebtedness being refinanced (except to
the extent that less security is granted to holders of refinancing
Indebtedness), (v) the holders of refinancing Indebtedness are not
afforded covenants, defaults, rights or remedies more burdensome to the
obligor or obligors than those contained in the Indebtedness being
refinanced and (vi) the refinancing Indebtedness is subordinated to the
same degree, if any, as the Indebtedness being refinanced; and
(w) other Indebtedness of the Subsidiary Borrowers and their
respective Subsidiaries in an aggregate amount not to exceed (i) during
the 1997 Fiscal Year, the 1998 Fiscal Year or the 1999 Fiscal Year,
$5,000,000 and (ii) during the 2000 Fiscal Year or any Fiscal Year
thereafter, $10,000,000;
provided, however, that no Indebtedness otherwise permitted by clauses (i), (j),
(l), (m), (n), (s), (t), (u) or (w) shall be permitted if, after giving effect
to the incurrence thereof, any Default shall have occurred and be continuing.
SECTION 8.2.3. Liens. Each Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any
of its property, revenues or assets, whether now owned or hereafter acquired,
except:
(a) Liens securing payment of the Obligations, granted pursuant to
any Loan Document;
(b) Liens securing payment of Indebtedness of the type permitted and
described in clause (b) of Section 8.2.2;
(c) Liens granted prior to the Effective Date to secure payment of
Indebtedness of the type permitted and described in clause (c) of Section
8.2.2;
(d) Liens granted to secure payment of Vehicle Debt and covering
only Vehicles financed by such Vehicle Debt, Excluded Receivables relating
to such Vehicles, rights under the Demand Capitalization Notes, cash (and
investments thereof in Cash Equivalent Investments) of an SPC arising from
the operations of such SPC, deposit accounts with respect to such cash and
Cash Equivalent Investments and all proceeds of the foregoing;
(e) Liens securing payment of reimbursement obligations of the
Borrowers in respect of the Chrysler Letters of Credit, granted pursuant
to the Chrysler Credit Support Documents and subject to the terms of the
Intercreditor Agreement;
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(f) Liens granted to secure payment of Indebtedness of the type
permitted and described in clause (f) of Section 8.2.2 and covering only
those buses financed with the proceeds of such Indebtedness;
(g) Liens granted to secure payment of Indebtedness of the type
permitted and described in clause (i) of Section 8.2.2 and covering only
assets of the Foreign Subsidiary obligated under such Indebtedness;
(h) Liens granted to secure payment of Indebtedness of the type
permitted and described in clause (j) of Section 8.2.2 and covering only
those assets acquired with the proceeds of such Indebtedness;
(i) Liens granted to secure payment of Indebtedness (other than
Subordinated Intercompany Debt) of the type permitted and described in
clause (o) (to the extent payable to a Subsidiary Borrower), (q), (r) or
(s) of Section 8.2.2;
(j) Liens existing on specific assets at the time acquired by a
Subsidiary Borrower or any of its Subsidiaries pursuant to a Permitted
Business Acquisition, to the extent (i) such Liens existed at the time of
such acquisition and were not created in contemplation thereof, (ii) such
Liens do not encumber any other asset of any Borrower or any of its
Subsidiaries and (iii) the Indebtedness secured thereby is of the type
permitted and described in clause (t) of Section 8.2.2;
(k) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set
aside on its books;
(l) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not overdue
or being diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set
aside on its books;
(m) Liens incurred in the ordinary course of business in connection
with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed
money) entered into in the ordinary course of business or to secure
obligations on surety or appeal bonds;
(n) judgment Liens in existence less than 30 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies; and
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(o) Liens with respect to minor imperfections of title and
easements, rights-of-way, restrictions, reservations, permits, servitudes
and other similar encumbrances on real property and fixtures which do not
detract in any material respect from the value thereof or impair in any
material respect the use thereof by the Parent and its Subsidiaries in the
ordinary course of their operation;
(p) Liens consisting of any encumbrance or restriction on any
Capital Stock of a joint venture that is not a Subsidiary of any Borrower
(including any Subsidiary of any Borrower), to the extent (i) such Lien is
in favor of, or for the benefit of, such joint venture or any Person or
Persons owning more than 25% of the Capital Stock of such joint venture
and (ii) such Lien secures obligations to such joint venture of the
Subsidiary Borrower or the Subsidiary of a Subsidiary Borrower owning
Capital Stock of such joint venture;
(q) other Liens securing Indebtedness in an aggregate amount not to
exceed $1,000,000 at any time outstanding (it being acknowledged that any
such Liens shall not cover any property, revenues or assets constituting
Collateral (as such term is defined in the Pledge Agreement) or
Intellectual Property Collateral (as such term is defined in the Security
Agreement)).
SECTION 8.2.4. Financial Condition. No Borrower will permit:
(a) the Net Worth of the Parent to be at any time less than the sum,
at such time, of (i) $225,000,000, plus (ii) 100% of the net cash proceeds
received by the Parent in excess of $45,000,000 pursuant to the Equity
Offerings, plus (iii) 50% of the Net Income of the Parent for each Fiscal
Year, commencing with the 1998 Fiscal Year, as shall have been completed
on or prior to such time (in each case with no reduction for net losses),
plus (iv) 100% of Net Equity Proceeds;
(b) Adjusted EBITDA for the four consecutive Fiscal Quarters ending
on the last day of each Fiscal Quarter, commencing with the second Fiscal
Quarter of the 1998 Fiscal Year, to be less than the amount set forth
opposite such Fiscal Quarter below:
Fiscal Quarter Amount
-------------- ------
The second Fiscal Quarter of
the 1998 Fiscal Year $50,000,000
The third Fiscal Quarter of
the 1998 Fiscal Year $50,000,000
The fourth Fiscal Quarter of
the 1998 Fiscal Year $70,000,000
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Fiscal Quarter Amount
-------------- ------
The first, second and third
Fiscal Quarters of the 1999
Fiscal Year $70,000,000
The fourth Fiscal Quarter of
the 1999 Fiscal Year $75,000,000
The first, second and third
Fiscal Quarters of the 2000
Fiscal Year $75,000,000
The fourth Fiscal Quarter of
the 2000 Fiscal Year $85,000,000
The first, second and third
Fiscal Quarters of the 2001
Fiscal Year $85,000,000
The fourth Fiscal Quarter of
the 2001 Fiscal Year and
each Fiscal Quarter
thereafter $90,000,000
(c) the Leverage Ratio, at any time, to be greater than the ratio
set forth opposite the applicable period set forth below:
Fiscal Quarter Ratio
-------------- -----
From (and including) the
Closing Date to (but
excluding) the last day of
the fourth Fiscal Quarter of
the 1998 Fiscal Year 4.95:1.00
From (and including) the last
day of the fourth Fiscal
Quarter of the 1998 Fiscal
Year to (but excluding) the
last day of the fourth Fiscal
Quarter of the 1999 Fiscal
Year 4.50:1.00
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Fiscal Quarter Ratio
-------------- -----
From (and including) the last
day of the fourth Fiscal
Quarter of the 1999 Fiscal
Year to (but excluding) the
last day of the fourth Fiscal
Quarter of the 2000 Fiscal
Year 4.25:1.00
From (and including) the last
day of the fourth Fiscal
Quarter of the 2000 Fiscal
Year (but excluding) the
last day of the fourth Fiscal
Quarter of the 2001 Fiscal
Year 4.00:1.00
From (and including) the last
day of the fourth Fiscal
Quarter of the 2001 Fiscal
year (and at all times
thereafter) 3.50:1.00
(d) the Interest Coverage Ratio, as of the last day of each Fiscal
Quarter, commencing with the second Fiscal Quarter of the 1998 Fiscal
Year, to be less than the ratio set forth opposite such Fiscal Quarter
below:
Fiscal Quarter Ratio
-------------- -----
The second Fiscal Quarter of
the 1998 Fiscal Year 3.75:1.00
The third Fiscal Quarter of
the 1998 Fiscal Year 3.75:1.00
The fourth Fiscal Quarter of
the 1998 Fiscal Year
and each Fiscal Quarter
thereafter 4.00:1.00
(e) the Fixed Charge Coverage Ratio, as of the last day of
each Fiscal Quarter, commencing with the fourth Fiscal Quarter of
the 1998 Fiscal Year, to be less than the ratio set forth opposite
such Fiscal Quarter below:
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Fiscal Quarter Ratio
-------------- -----
The second Fiscal Quarter of
the 1998 Fiscal Year 1.00:1.00
The third Fiscal Quarter of
the 1998 Fiscal Year 1.00:1.00
The fourth Fiscal Quarter of
the 1998 Fiscal Year 1.00:1.00
The first Fiscal Quarter of the
1999 Fiscal Year and
each Fiscal Quarter
thereafter 1.10:1.00
SECTION 8.2.5. Investments. Each Borrower will not, and will not permit
any of its Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except:
(a) Investments existing on the Effective Date and identified in
Item 8.2.5(a) ("Ongoing Investments") of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) Investments which are Permitted Business Acquisitions;
(d) without duplication, Investments permitted as Capital
Expenditures pursuant to Section 8.2.7;
(e) (i) Investments by a Subsidiary Borrower in the Parent (A) by
way of contributions to capital or the making of loans or advances, to the
extent the amount of such Investment would be permitted as a dividend
pursuant to clause (a) of Section 8.2.6 at the time of such Investment and
(B) by way of advances that are pursuant to the Parent's cash management
system for it and its Subsidiaries and (ii) Investments by a direct
Subsidiary of the Parent (other than a Subsidiary Borrower) in the Parent;
(f) Investments by a Subsidiary Borrower or a Subsidiary Guarantor
in Subsidiary Borrowers and Subsidiary Guarantors that are Wholly Owned
Subsidiaries of a Subsidiary Borrower or, to the extent permitted by
clause (r) of Section 8.2.2, in a Subsidiary Guarantor that is neither a
Subsidiary Borrower nor a Subsidiary of a Subsidiary Borrower;
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(g) Investments by a Borrower or a Subsidiary Guarantor in
Subsidiaries of the Parent that are not permitted by the preceding clause
(f) or succeeding clause (h), by way of contributions to capital, the
making of loans or advances or the incurrence of Contingent Liabilities,
to the extent the aggregate amount of such Investments that are made in
any Fiscal Year (commencing with the 1998 Fiscal Year) does not exceed
$5,000,000 and the aggregate amount of such Investments at any time
outstanding does not exceed $15,000,000 (exclusive of such Investment
existing as of the date hereof and identified in Item 8.2.5(a) ("Ongoing
Investments") of the Disclosure Schedule);
(h) Investments by the Parent in a Subsidiary Borrower or any
Subsidiary Guarantor;
(i) Investments by a Subsidiary of the Parent that is neither a
Subsidiary Borrower (nor a Subsidiary Guarantor in the Parent or any
Subsidiary of the Parent;
(j) Investments evidenced by the Demand Capitalization Notes;
(k) Investments in franchisees of Dollar or Thrifty (i) by way of
guaranties of obligations of such franchisees in respect of the leasing by
such franchisees of real or personal property under arrangements which
would not, under GAAP, be classified as capitalized leases, to the extent
such obligations (other than any portion of rental payments that are
determined on the basis of revenues generated by the property subject to
such leases or by the operations conducted on the property subject to such
leases) do not exceed $1,000,000 during any Fiscal Year, and (ii) by way
of the making of loans or advances to such franchisees or otherwise
(including by obtaining a letter of credit for the benefit of a
beneficiary selected by any such franchisee and with respect to which such
franchisee is the account party and the Parent or any of its Subsidiaries
is obligated to reimburse the issuer thereof for drawings thereunder), to
the extent such Investments (which, in the case of any such letter of
credit, would be accounted for at the Stated Amount thereof) do not exceed
in the aggregate at any time $10,000,000; provided, however, that the
aggregate amount of such Investments that were funded in cash and that are
outstanding at any time does not exceed $3,000,000;
(l) other Investments in an aggregate amount at any time not to
exceed $3,500,000;
provided, however, that
(i) any Investment which when made complies with the requirements of
the definition of the term "Cash Equivalent Investment" may continue to be
held notwithstanding that such Investment if made thereafter would not
comply with such requirements; and
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(ii) no Investment otherwise permitted by clause (c), (e), (g), (k)
or (l) shall be permitted to be made if, immediately before or after
giving effect thereto, any Default shall have occurred and be continuing.
SECTION 8.2.6. Restricted Payments, etc. On and at all times after the
Effective Date:
(a) neither Subsidiary Borrower will declare, pay or make any
Distribution with respect to any shares of its Capital Stock (now or
hereafter outstanding) or on any warrants, options or other rights with
respect to any such shares of Capital Stock (now or hereafter outstanding)
or apply, or permit any of its Subsidiaries to apply, any of its funds,
property or assets to the purchase, redemption, sinking fund or other
retirement of, or agree or permit any of its Subsidiaries to purchase or
redeem, any shares of any class of Capital Stock (now or hereafter
outstanding) of such Subsidiary Borrower, or warrants, options or other
rights with respect to any such shares of Capital Stock (now or hereafter
outstanding) of such Subsidiary Borrower; provided, however, that the
Subsidiary Borrowers may (i) make Distributions to the Parent to the
extent that it is necessary to permit the Parent to pay taxes based on
income and franchise taxes and other similar licensure expenses and other
actual and reasonable general administrative costs and expenses
attributable to the operations of the Parent (including indemnity
obligations payable to directors and officers of the Parent who have acted
in good faith), (ii) make Distributions to the Parent to the extent it is
necessary to permit the Parent to satisfy a payment demand in respect of a
Demand Capitalization Note and (iii) make a Distribution to the Parent to
the extent necessary to make a Distribution declared by the Parent (but in
no event exceeding the amount of such Distribution permitted to be made by
the Parent pursuant to the succeeding clause (b)), so long as,
immediately before and after giving effect thereto, no Default shall have
occurred and be continuing and the Distribution by the Parent is made at
the time the Subsidiary Borrowers make their Distribution;
(b) the Parent will not declare, pay or make any Distribution with
respect to any shares of its Capital Stock (now or hereafter outstanding)
or on any warrants, options or other rights with respect to any such
shares of Capital Stock (now or hereafter outstanding) or apply, or permit
any of its Subsidiaries to apply, any of its funds, property or assets to
the purchase, redemption, sinking fund or other retirement of, or agree or
permit any of its Subsidiaries to purchase or redeem, any shares of any
class of Capital Stock (now or hereafter outstanding) of the Parent, or
warrants, options or other rights with respect to any such shares of
Capital Stock (now or hereafter outstanding) of the Parent; provided,
however, that the Parent may declare, pay and make cash Distributions to
its stockholders in any Fiscal Year, so long as
(i) both before and after giving effect to any such payment,
no Default shall have occurred and be continuing,
(ii) the Parent shall have delivered to the Administrative
Agent (A) financial statements prepared on a pro forma basis to give
effect to such
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Distribution for the period of four consecutive Fiscal Quarters
ending with the Fiscal Quarter then last ended for which financial
statements and the Compliance Certificate relating thereto have been
delivered to the Administrative Agent pursuant to Sections 8.1.1 and
(B) a certificate of the Parent executed by its chief financial
Authorized Officer demonstrating that the financial results
reflected in such financial statements would comply with the
requirements of Section 8.2.4 for the Fiscal Quarter in which such
Distribution is to be made, and
(iii) the aggregate amount of such Distribution to be made by
the Parent pursuant to this clause (b), when added to the aggregate
amount of all such Distributions during the Fiscal Year in which
such Distribution would be made, does not exceed the amount set
forth below opposite such Fiscal Year
Fiscal Year Amount
----------- ------
1998 Fiscal Year $1,000,000
1999 Fiscal Year and each The lesser of (i) 25% of
Fiscal Year thereafter Excess Cash Flow for
the 1998 Fiscal Year
and (ii) $2,000,000
2000 Fiscal Year The lesser of (i) 25% of
Excess Cash Flow for
the 1999 Fiscal Year
and (ii) $4,000,000
2001 Fiscal Year The lesser of (i) 25% of
Excess Cash Flow for
the 2000 Fiscal Year
and (ii) $6,000,000
2002 Fiscal Year The lesser of (i) 25% of
Excess Cash Flow for
the 2001 Fiscal Year
and (ii) $8,000,000
(c) neither Subsidiary Borrower will permit any of its Subsidiaries
to declare, pay or make any Distribution with respect to any shares of
Capital Stock (now or hereafter outstanding) of any such Subsidiary (other
than (x) with respect to any such shares held by such Subsidiary Borrower
or any of its Wholly Owned Subsidiaries and (y) with respect to such
shares which are shares of common stock, so long as such Distribution is
made on a pro rata basis, consistent with the ownership interests in such
shares of common stock, to the owners of such shares of common stock) or
apply any of its funds, property or assets to the purchase, redemption,
sinking fund or other retirement of, or agree to purchase or redeem, any
shares of any class of Capital Stock (now or hereafter outstanding) of any
such Subsidiary, or warrants, options or other rights with respect to any
such shares of Capital Stock (now or hereafter outstanding) of any such
Subsidiary (other than any such shares, warrants, options or other rights
held by such Subsidiary Borrower or any of its Wholly Owned Subsidiaries);
(d) each Borrower will not, and will not permit any of its
Subsidiaries to
(i) make any payment or prepayment of principal of any
Subordinated Debt (including any reimbursement obligation in respect
of a letter of credit) or make any payment of interest on any
Subordinated Debt on any day other than the stated, scheduled date
for such payment or prepayment set forth in the documents and
instruments memorializing such Subordinated Debt, or which would
violate the subordination provisions applicable such Subordinated
Debt; or
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(ii) redeem, purchase or defease, any Subordinated Debt; and
(e) each Borrower will not, and will not permit any of its
Subsidiaries to, make any deposit for any of the foregoing purposes.
SECTION 8.2.7. Capital Expenditures, etc. Each Borrower will not, and will
not permit any of its Subsidiaries to, make or commit to make Capital
Expenditures in any Fiscal Year, except (a) Capital Expenditures for the
acquisition of Vehicles and (b) other Capital Expenditures which do not
aggregate in excess of $35,000,000 for such Fiscal Year.
SECTION 8.2.8. Take or Pay Contracts. Each Borrower will not, and will not
permit any of its Subsidiaries to, enter into or be a party to any arrangement
for the purchase of materials, supplies, other property or services if such
arrangement by its express terms requires that payment be made by such Borrower
or such Subsidiary regardless of whether such materials, supplies, other
property or services are delivered or furnished to it.
SECTION 8.2.9. Consolidation, Merger, etc. Each Borrower will not, and
will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate
with, or merge into or with, any other Person, or otherwise enter into or
consummate any Business Acquisition not constituting an Investment, except
(a) any Subsidiary of the Parent may liquidate or dissolve
voluntarily into, and may merge with and into, the Parent or any Wholly
Owned Subsidiary of the Parent, and the assets or stock of any Subsidiary
of the Parent may be purchased or otherwise acquired by the Parent or any
Wholly Owned Subsidiary of the Parent; and
(b) so long as no Default has occurred and is continuing or would
occur after giving effect thereto, a Subsidiary Borrower or any of its
Subsidiaries may enter into or consummate any Permitted Business
Acquisition.
SECTION 8.2.10. Asset Dispositions, etc. Each Borrower will not, and will
not permit any of its Subsidiaries to, sell, issue, transfer, lease, contribute
or otherwise convey, or grant options, warrants or other rights with respect to,
any property, business or assets of the Parent, any Subsidiary Borrower or any
of their respective Subsidiaries (including accounts receivable and Capital
Stock) to any Person, unless
(a) any such sale, transfer, lease, contribution or conveyance is in
the ordinary course of its business (including sales of used Vehicles and
the customary franchising activities of the Borrowers) or is permitted by
Section 8.2.9;
(b) any such issuance is an issuance of Capital Stock of the Parent
or of options or warrants in respect of such Capital Stock;
(c) (i) (A) any such sale, transfer or conveyance is for not less
than the fair market value of the assets so sold, transferred or conveyed
(as determined in good faith
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by the Board of Directors of the Parent or a committee thereof) and (B) in
the event the fair market value of such assets exceeds $2,500,000, the
determination of such Board or committee is evidenced by a certified
written resolution of such Board or committee) and, except in the case of
Non-Counted Assets, the consideration received by the relevant Subsidiary
Borrower or the relevant Subsidiary of such Subsidiary Borrower in respect
thereof consists of at least 80% cash or Cash Equivalent Investments, (ii)
any such consideration not consisting of cash or Cash Equivalent
Investments (including consideration received in the sale, transfer or
conveyance of Non-Counted Assets) shall be an Investment permitted by
Section 8.2.5 and (iii) the fair market value of such assets (other than
Non-Counted Assets), together with the aggregate fair market value of all
other assets (other than Non-Counted Assets) sold, transferred or conveyed
pursuant to this clause (c) in the Fiscal Year such assets are sold,
transferred or conveyed, does not exceed $5,000,000; provided, however,
that no such sale, transfer or conveyance shall be permitted to be made if
immediately before or after giving effect thereto, any Default shall have
occurred and be continuing; or
(d) without limiting the effect in any manner of the provisions of
Article IX, any such sale, transfer or conveyance of Vehicles is as a
result of an Amortization Event (as defined in the Base Indenture).
For purposes hereof, "Non-Counted Assets" means assets sold, transferred or
conveyed as part of the sale of the operations conducted on the sites set forth
on Schedule V hereto or as part of the sale of the operations conducted at a
site previously operated by a franchisee of Dollar or Thrifty or any of their
respective Subsidiaries and acquired by any of them pursuant to a Permitted
Business Acquisition after the date hereof.
SECTION 8.2.11. Modification of Certain Agreements. Each Borrower will
not, and will not permit any of its Subsidiaries to, consent to any amendment,
supplement or other modification of (a) any of the terms or provisions contained
in, or applicable to, the Chrysler Credit Support Documents, other than any
amendment, supplement or other modification which would not have an adverse
effect on the interests of the Lenders hereunder and under the other Loan
Documents (unless otherwise consented to by the Required Lenders) or the
business, property, operations, assets, liabilities, condition (financial or
otherwise) or prospects of the Parent and its Subsidiaries taken as a whole
(unless otherwise consented to by the Required Lenders) or (b) any of the terms
or provisions contained in, or applicable to, the Chrysler-Dollar Supply
Agreement, the Chrysler-Thrifty Supply Agreement, the Tax Sharing Agreement, the
MTN Program Documents and, upon the execution and delivery thereof, the CP
Program Documents, or any document or instrument evidencing or applicable to any
Subordinated Debt, other than any amendment, supplement or other modification
which would not have an adverse effect on the Lenders (unless otherwise
consented to by the Administrative Agent), a material adverse effect on the
interests of the Lenders hereunder and under the other Loan Documents (unless
otherwise consented to by the Required Lenders) or a material adverse effect on
the business, property, operations, assets, liabilities, condition (financial or
otherwise) or prospects of the Parent and its Subsidiaries taken as whole
(unless otherwise consented to by the Required Lenders).
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SECTION 8.2.12. Transactions with Affiliates. Each Borrower will not, and
will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its other Affiliates
unless such arrangement or contract is fair and equitable to such Borrower or
such Subsidiary and is an arrangement or contract of the kind which would be
entered into by a prudent Person in the position of such Borrower or such
Subsidiary with a Person which is not one of its Affiliates; provided, however,
that the foregoing restriction shall not apply to (i) any agreement or
arrangement between or among a Borrower and a Wholly Owned Subsidiary of a
Borrower that is not otherwise prohibited hereunder and (ii) any agreement or
arrangement that provides for the sale of Vehicles from RCFC to a Subsidiary
Borrower or any Subsidiary of a Subsidiary Borrower at the higher of the fair
market value thereof and the net book value thereof, to the extent such
agreement or arrangement is entered into in connection with a structured
financing or securitization program.
SECTION 8.2.13. Negative Pledges, Restrictive Agreements, etc. Each
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any agreement (excluding this Agreement and any other Loan Document) prohibiting
(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired; or
(b) the ability of any Subsidiary of any Borrower to make any
payments, directly or indirectly, to such Borrower by way of dividends,
advances, repayments of loans or advances, reimbursements of management
and other intercompany charges, expenses and accruals or other returns on
investments, or any other agreement or arrangement which restricts the
ability of any such Subsidiary to make any payment, directly or
indirectly, to such Borrower;
except
(i) any indenture or agreement governing Indebtedness permitted by
clause (c) of Section 8.2.2 as in effect on the Closing Date and any
refinancings thereof permitted by clause (w) of Section 8.2.2;
(ii) any agreement governing any Indebtedness permitted by clause
(f) (g), (j), (l) or (t) of Section 8.2.2 as to the assets financed with
the proceeds of such Indebtedness;
(iii) as to any SPC, usual and customary restrictions pursuant to
the Organic Documents of such SPC or pursuant to the MTN Program Documents
or CP Program Documents; or
(iv) usual and customary restrictions pursuant to any agreement
relating to any Indebtedness of any Foreign Subsidiary permitted pursuant
to clause (i) of Section 8.2.2, such as maintenance of net worth or other
balance sheet conditions, provided that such restrictions are agreed to in
good faith and, where applicable, based upon reasonable assumptions.
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SECTION 8.2.14. Ability to Amend; Restrictive Agreements. Each Borrower
will not, and will not permit any of its Subsidiaries to, enter into, or accept
obligations under, any agreement (a) prohibiting (including subjecting to any
condition) the ability of such Borrower or any of its Subsidiaries to amend,
supplement or otherwise modify this Agreement or any other Loan Document or (b)
containing any provision that would contravene any provision of this Agreement
or any other Loan Document.
SECTION 8.2.15. Accounting Changes. The Parent will not, and will not
permit any of its Subsidiaries to, change its Fiscal Year from twelve
consecutive calendar months ending on December 31, except with the consent of
the Administrative Agent (which consent shall not be unreasonably withheld, but
which consent may be conditioned upon the effectuation of such amendments and
other modifications to this Agreement, the other Loan Documents and the Chrysler
Credit Support Documents as the Administrative Agent may reasonably request.
SECTION 8.2.16. Activities of the Parent. Without limiting the effect of
any provision contained in this Article VIII and notwithstanding any implication
to the contrary hereunder, the Parent will not engage in any business activity
other than (i) its ownership of all the shares of Capital Stock of the
Subsidiary Borrowers, RCFC, Dollar Thrifty Funding and any other Person that may
become a direct Subsidiary of the Parent in accordance with the provisions
hereof to the extent such Person does not conduct a business activity which is
one of the principal business activities conducted by Dollar or Thrifty on the
date hereof, (ii) its compliance with the obligations applicable to it under the
Loan Documents, the Chrysler Credit Support Documents, the MTN Program Documents
and the CP Program Documents and (iii) the execution and delivery of guaranties
of (A) obligations of Subsidiary Borrowers or Subsidiary Guarantors in respect
of the leasing by such Obligors of real or personal property under arrangements
which would not, under GAAP, be classified as capitalized leases and (B) other
obligations of such Obligors in an aggregate amount not exceeding $20,000,000 at
any time. Without limiting the generality of the immediately preceding sentence,
the Parent will not (a) create, incur, assume or suffer to exist any
Indebtedness (other than Indebtedness under this Agreement or any other Loan
Document, any Chrysler Credit Support Document, any such guaranty any Demand
Capitalization Note, any intercompany Indebtedness pursuant to clause (o) of
Section 8.2.2 or any Subordinated Debt pursuant to clause (u) of Section 8.2.2),
(b) create, assume, or suffer to exist any Lien upon, or grant any options or
other rights with respect to, any of its revenues, property or other assets,
whether now owned or hereafter acquired (other than pursuant to the Loan
Documents, the Chrysler Credit Support Documents or any intercompany
Indebtedness described in clause (i) of Section 8.2.3), (c) wind-up, liquidate
or dissolve itself (or suffer to exist any of the foregoing), or consolidate or
amalgamate with or merge into or with any other Person, or convey, sell,
transfer, lease or otherwise dispose of all or any part of its assets, in one
transaction or a series of transactions, to any Person or Persons, (d) create,
incur, assume or suffer to exist any Investment in any Person other than (i) as
provided in clause (a), (b), (g) or (j) of Section 8.2.5 and (ii) in respect of
any additional equity Investments in a Subsidiary Borrower or any Subsidiary
Guarantor or (e) permit to be taken any action that would result in a Change in
Control. The Parent agrees not to commence or cause the commencement of any of
the actions described in clause (b), (c) or (d) of Section 9.1.9 of this
Agreement with respect to any of its Subsidiaries.
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ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1. Listing of Events of Default. Each of the following events or
occurrences described in this Section 9.1 shall constitute an "Event of
Default".
SECTION 9.1.1. Non-Payment of Obligations. Any Borrower or any other
Obligor shall (a) default in the payment or prepayment when due of any principal
of any Loan, (b) default in the payment when due of any Reimbursement
Obligation, or (c) default (and such default shall continue unremedied for a
period of three Business Days) in the payment when due of any interest on any
Loan, any fee or of any other Obligation.
SECTION 9.1.2. Breach of Warranty. Any representation or warranty of any
Borrower or any other Obligor made or deemed to be made hereunder or in any
other Loan Document executed by it or any other writing or certificate furnished
by or on behalf of any Borrower or any other Obligor to either Agent or any
Lender for the purposes of or in connection with this Agreement or any such
other Loan Document (including any certificates delivered pursuant to Article
VI) is or shall be incorrect when made in any material respect.
SECTION 9.1.3. Non-Performance of Certain Covenants and Obligations. (a)
Any Borrower shall default in the due performance and observance of any of its
obligations under Section 8.2, clause (d), (e) or (g) of Section 8.1.1, or
Section 8.1.2, 8.1.8 or 8.1.9.
(b) Any Borrower shall default in the due performance and observance of
any of its obligations under clause (a), (b), (c), (h) or (i) of Section 8.1.1,
and such default shall continue unremedied for a period of ten days.
SECTION 9.1.4. Non-Performance of Other Covenants and Obligations. Any
Obligor shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Borrowers by the Administrative Agent or
any Lender.
SECTION 9.1.5. Default on Other Indebtedness. (a) A default shall occur in
the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 9.1.1) of the Parent or any of its Subsidiaries having a
principal amount, individually or in the aggregate, in excess of $2,500,000, or
a default shall occur in the performance or observance of any obligation or
condition with respect to such Indebtedness if the effect of such default is to
accelerate the maturity of any such Indebtedness or such default shall continue
unremedied for any applicable period of time sufficient to permit the holder or
holders of such Indebtedness, or any trustee or agent for such holders, to cause
such Indebtedness to become due and payable prior to its expressed maturity
(including pursuant to any right of such holder, holders, trustee or agent to
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require the redemption, repurchase or other acquisition of such Indebtedness
prior to its expressed maturity).
(b) An Amortization Event (as defined in the Base Indenture) shall have
occurred or, following the closing of the CP Program, RCFC shall become unable
to finance the purchase of Vehicles pursuant to the CP Program or any similar
event shall have occurred with respect to RCFC or any other SPC that would
result in such Person being unable to finance the purchase of Vehicles and the
Borrowers shall have failed to replace the MTN Program or CP Program, as the
case may be, with an alternative source of financing having terms acceptable to
the Required Lenders within 30 days of such occurrence.
SECTION 9.1.6. Judgments. Any judgment or order for the payment of money
in excess of $2,500,000 (to the extent not covered by insurance provided by a
carrier that has not disputed coverage) shall be rendered against the Parent or
any of its Subsidiaries and either
(a) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order; or
(b) there shall be any period of 20 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
SECTION 9.1.7. Pension Plans. Any of the following events shall occur with
respect to any Pension Plan
(a) the institution of any steps by any Borrower, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, any Borrower or any such member could be
required to make a contribution to such Pension Plan, or could reasonably
expect to incur a liability or obligation to such Pension Plan, in excess
of $1,000,000; or
(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA.
SECTION 9.1.8. Change in Control. Any Change in Control shall occur.
SECTION 9.1.9. Bankruptcy, Insolvency, etc. The Parent or any of its
Subsidiaries or any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in writing
its inability or unwillingness to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for the Parent or any
of its Subsidiaries or any other
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Obligor or any property of any thereof, or make a general assignment for
the benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for the Parent or any of its Subsidiaries
or any other Obligor or for a substantial part of the property of any
thereof, and such trustee, receiver, sequestrator or other custodian shall
not be discharged within 60 days, provided that each of its Subsidiaries
and each other Obligor hereby expressly authorizes the Administrative
Agent and each Lender to appear in any court conducting any relevant
proceeding during such 60-day period to preserve, protect and defend
their rights under the Loan Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or
liquidation proceeding, in respect of the Parent or any of its
Subsidiaries or any other Obligor, and, if any such case or proceeding is
not commenced by the Parent or such Subsidiary or such other Obligor, such
case or proceeding shall be consented to or acquiesced in by the Parent or
such Subsidiary or such other Obligor or shall result in the entry of an
order for relief or shall remain for 60 days undismissed, provided that
the Parent, such Subsidiary and each other Obligor hereby expressly
authorizes each Agent and each Lender to appear in any court conducting
any such case or proceeding during such 60-day period to preserve, protect
and defend their rights under the Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION 9.1.10. Impairment of Security, etc. Any Loan Document, or any
Lien granted thereunder, shall (except in accordance with its terms), in whole
or in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Obligor party thereto; any Borrower or
any other Obligor shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability; or any Lien securing
any Obligation shall, in whole or in part, cease to be a perfected first
priority Lien, subject only to those exceptions expressly permitted by such Loan
Document.
SECTION 9.2. Action if Bankruptcy. If any Event of Default described in
clauses (a) through (d) of Section 9.1.9 shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable and each Borrower shall
immediately comply with its obligations under Section 4.7, in each case, without
notice or demand.
SECTION 9.3. Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in clauses (a) through (d) of Section
9.1.9) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Borrowers declare all or any portion of
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the outstanding principal amount of the Loans and other Obligations to be due
and payable and/or the Commitments (if not theretofore terminated) to be
terminated and/or demand immediate compliance of each Borrower with its
obligations under Section 4.7, whereupon the full unpaid amount of such Loans
and other Obligations which shall be so declared due and payable shall be and
become immediately due and payable, without further notice, demand or
presentment, the Commitments shall terminate and/or, as the case may be, each
Borrower shall be obligated to comply immediately with its obligations under
Section 4.7.
ARTICLE X
BORROWERS GUARANTY
SECTION 10.1. Guaranty. Each Borrower hereby absolutely, unconditionally
and irrevocably
(a) guarantees (in such capacity, a "Borrower Guarantor") the full
and punctual payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise, of all
Obligations of each other Borrower (in such capacity, a "Borrower Debtor")
now or hereafter existing, whether for principal, interest, fees, expenses
or otherwise (including all such amounts which would become due but for
the operation of the automatic stay under Section 362(a) of the United
States Bankruptcy Code, 11 U.S.C. ss.362(a), and the operation of Sections
502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C.
ss.502(b) and ss.506(b)), and
(b) indemnifies and holds harmless each Secured Party and each
holder of a Note for any and all costs and expenses (including reasonable
attorneys' fees and expenses) incurred by such Secured Party or such
holder, as the case may be, in enforcing any rights under the guaranty set
forth in this Article X;
provided, however, that in the case of the guaranty made by each of Dollar and
Thrifty, Dollar or Thrifty, as the case may be, shall be liable under the
guaranty set forth in this Article X for the maximum amount of such liability
that can be hereby incurred without rendering the guaranty set forth in this
Article X, as it relates to Dollar or Thrifty, as the case may be, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer,
and not for any greater amount. The guaranty set forth in this Article X
constitutes a guaranty of payment when due and not of collection, and each
Borrower Guarantor specifically agrees that it shall not be necessary or
required that any Secured Party or any holder of any Note exercise any right,
assert any claim or demand or enforce any remedy whatsoever against any Borrower
Debtor or any other Obligor (or any other Person) before or as a condition to
the obligations of such Borrower Guarantor under the guaranty set forth in this
Article X.
SECTION 10.2. Acceleration of Borrowers Guaranty. Each Borrower Guarantor
agrees that, if an Event of Default of the nature set forth in Section 9.1.9
shall occur at a time when any of the Obligations of a Borrower Debtor may not
then be due and payable, such Borrower
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Guarantor agrees that it will pay to the Administrative Agent for the account of
the Secured Parties forthwith the full amount which would be payable under the
guaranty set forth in this Article X by such Borrower Guarantor if all such
Obligations were then due and payable.
SECTION 10.3. Guaranty Absolute, etc. The guaranty set forth in this
Article X shall in all respects be a continuing, absolute, unconditional and
irrevocable guaranty of payment, and shall remain in full force and effect until
all Obligations of each Borrower and each other Obligor have been paid in full
in cash, all obligations of each Borrower Guarantor under the guaranty set forth
in this Article X shall have been paid in full in cash, all Letters of Credit
have been terminated or expired and all Commitments shall have terminated. Each
Borrower Guarantor guarantees that the Obligations of each Borrower Debtor will
be paid strictly in accordance with the terms of this Agreement and each other
Loan Document under which they arise, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of any Secured Party or any holder of any Note with respect thereto.
The liability of each Borrower Guarantor under the guaranty set forth in this
Article X shall be absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of this
Agreement, any Note or any other Loan Document;
(b) the failure of any Secured Party or any holder of any Note
(i) to assert any claim or demand or to enforce any right or
remedy against any Borrower Debtor, any other Obligor or any other
Person (including any other guarantor (including such Borrower
Guarantor)) under the provisions of this Agreement, any Note, any
other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other
guarantor (including such Borrower Guarantor) of, or collateral
securing, any Obligations of any Borrower Debtor;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of any Borrower Debtor, or
any other extension, compromise or renewal of any Obligation of the any
Borrower Debtor;
(d) any reduction, limitation, impairment or termination of any
Obligations of any Borrower Debtor for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be
subject to (and such Borrower Guarantor hereby waives any right to or
claim of) any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or
occurrence affecting, any Obligations of any Borrower Debtor or otherwise;
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(e) any amendment to, rescission, waiver, or other modification of,
or any consent to departure from, any of the terms of this Agreement, any
Note or any other Loan Document;
(f) any addition, exchange, release, surrender or non-perfection of
any collateral, or any amendment to or waiver or release or addition of,
or consent to departure from, any other guaranty, held by any Secured
Party or any holder of any Note securing any of the Obligations of any
Borrower Debtor; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any Borrower
Debtor, any surety or any guarantor.
SECTION 10.4. Reinstatement, etc. Each Borrower Guarantor agrees that the
guaranty set forth in this Article X shall continue to be effective or be
reinstated, as the case may be, if at any time any payment (in whole or in part)
of any of the Obligations is rescinded or must otherwise be restored by any
Secured Party or any holder of any Note, upon the insolvency, bankruptcy or
reorganization of any Borrower Debtor or otherwise, all as though such payment
had not been made.
SECTION 10.5. Waiver, etc. Each Borrower Guarantor hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Obligations of any Borrower Debtor and the guaranty set forth in this
Article X and any requirement that the Administrative Agent, any other Secured
Party or any holder of any Note protect, secure, perfect or insure any security
interest or Lien, or any property subject thereto, or exhaust any right or take
any action against any Borrower Debtor, any other Obligor or any other Person
(including any other guarantor) or entity or any collateral securing the
Obligations of any Borrower Debtor.
SECTION 10.6. Postponement of Subrogation, etc. Each Borrower Guarantor
agrees that it will not exercise any rights which it may acquire by way of
rights of subrogation under the guaranty set forth in this Article X, by any
payment made under the guaranty set forth in this Article X or otherwise, until
the prior payment in full in cash of all Obligations of each Borrower Debtor and
each other Obligor, the termination or expiration of all Letters of Credit and
the termination of all Commitments. Any amount paid to any Borrower Guarantor on
account of any such subrogation rights prior to the payment in full in cash of
all Obligations of each Borrower Debtor and each other Obligor shall be held in
trust for the benefit of the Secured Parties and each holder of a Note and shall
immediately be paid to the Administrative Agent for the benefit of the Secured
Parties and each holder of a Note and credited and applied against the
Obligations of each Borrower Debtor and each other Obligor, whether matured or
unmatured, in accordance with the terms of this Agreement; provided, however,
that if
(a) such Borrower Guarantor has made payment to the Secured Parties
and each holder of a Note of all or any part of the Obligations of each
Borrower Debtor, and
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(b) all Obligations of each Borrower and each other Obligor have
been paid in full in cash, all Letters of Credit have been terminated or
expired and all Commitments have been permanently terminated,
each Secured Party and each holder of a Note agrees that, at such Borrower
Guarantor's request, the Administrative Agent, on behalf of the Secured Parties
and the holders of the Notes, will execute and deliver to the Parent appropriate
documents (without recourse and without representation or warranty) necessary to
evidence the transfer by subrogation to such Borrower Guarantor of an interest
in the Obligations of the applicable Borrower Debtor resulting from such payment
by such Borrower Guarantor. In furtherance of the foregoing, for so long as any
Obligations or Commitments remain outstanding, such Borrower Guarantor shall
refrain from taking any action or commencing any proceeding against such Borrow
Debtor (or its successors or assigns, whether in connection with a bankruptcy
proceeding or otherwise) to recover any amounts in the respect of payments made
under the guaranty set forth in this Article X to any Secured Party or any
holder of a Note.
SECTION 10.7. Right of Contribution. Each Borrower Guarantor hereby agrees
that to the extent that a Borrower Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Borrower Guarantor shall
be entitled to seek and receive contribution from and against any other Borrower
Guarantor hereunder who has not paid its proportionate share of such payment.
Each Borrower Guarantor's right of contribution shall be subject to the terms
and conditions of Section 10.6. The provisions of this Section 10.7 shall in no
respect limit the obligations and liabilities of any Borrower Guarantor to the
Administrative Agent and each other Secured Party, and each Borrower Guarantor
shall remain liable to the Administrative Agent and each other Secured Party for
the full amount guaranteed by such Borrower Guarantor hereunder.
SECTION 10.8. Successors, Transferees and Assigns; Transfers of Notes,
etc. The guaranty set forth in this Article X shall:
(a) be binding upon each Borrower Guarantor, and its successors,
transferees and assigns; and
(b) inure to the benefit of and be enforceable by the Administrative
Agent and each other Secured Party.
Without limiting the generality of the foregoing clause (b), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all rights and benefits in respect thereof granted
to such Lender under any Loan Document (including the guaranty set forth in this
Article X) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 12.11 and Article XI.
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ARTICLE XI
THE AGENTS
SECTION 11.1. Actions. Each Lender hereby appoints Credit Suisse First
Boston as its Administrative Agent under and for purposes of this Agreement, the
Notes and each other Loan Document. Each Lender authorizes the Administrative
Agent to act on behalf of such Lender under this Agreement, the Notes and each
other Loan Document and, in the absence of other written instructions from the
Required Lenders received from time to time by the Administrative Agent (with
respect to which the Administrative Agent agrees that it will comply, except as
otherwise provided in this Section or as otherwise advised by counsel in order
to avoid contravention of applicable law), to exercise such powers hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent by the terms hereof and thereof, together with such powers as may be
reasonably incidental thereto. Each Lender hereby indemnifies (which indemnity
shall survive any termination of this Agreement) each Agent pro rata according
to such Lender's Percentage, from and against any and all liabilities,
obligations, losses, damages, claims, costs or expenses of any kind or nature
whatsoever which may at any time be imposed on, incurred by, or asserted
against, such Agent in any way relating to or arising out of this Agreement, the
Notes and any other Loan Document, including reasonable attorneys' fees, and as
to which such Agent is not reimbursed by the Borrowers; provided, however, that
no Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, claims, costs or expenses which are determined by
a court of competent jurisdiction in a final proceeding to have resulted solely
from such Agent's gross negligence or willful misconduct. No Agent shall be
required to take any action hereunder, under the Notes or under any other Loan
Document, or to prosecute or defend any suit in respect of this Agreement, the
Notes or any other Loan Document, unless such Agent is indemnified hereunder to
its satisfaction. If any indemnity in favor of either Agent shall be or become,
in such Agent's determination, inadequate, such Agent may call for additional
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.
SECTION 11.2. Funding Reliance, etc. Unless the Administrative Agent shall
have been notified by telephone, confirmed in writing, by any Lender by 12:00
noon (New York City, New York time) on the Business Day of a Borrowing, with
respect to ABR Loans, and by 5:00 p.m. (New York City, New York time) on the
Business Day prior to a Borrowing, with respect to Eurodollar Loans, that such
Lender will not make available the amount which would constitute its Percentage
of such Borrowing on the date specified therefor, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent and, in reliance upon such assumption, make available to the applicable
Borrower a corresponding amount. If and to the extent that such Lender shall not
have made such amount available to the Administrative Agent, such Lender and the
applicable Borrower severally agree to repay the Administrative Agent forthwith
on demand such corresponding amount together with interest thereon, for each day
from the date the Administrative Agent made such amount available to such
Borrower to the date such amount is repaid to the Administrative Agent, at the
interest rate applicable at the time to Loans comprising such Borrowing (in the
case of such Borrower) and (in the case of the Lender), at the Federal Funds
Rate for the first two Business
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Days after which such amount has not been repaid, and thereafter at the interest
rate applicable to Loans comprising such Borrowing.
SECTION 11.3. Exculpation. Neither Agent nor any of their respective
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by it under this Agreement or any other Loan
Document, or in connection herewith or therewith, except for its own willful
misconduct or gross negligence, nor responsible for any recitals or warranties
herein or therein, nor for the effectiveness, enforceability, validity or due
execution of this Agreement or any other Loan Document, nor for the creation,
perfection or priority of any Liens purported to be created by any of the Loan
Documents, or the validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, nor to make any inquiry respecting the
performance by any Borrower of its obligations hereunder or under any other Loan
Document. Any such inquiry which may be made by either Agent shall not obligate
it to make any further inquiry or to take any action. Each Agent shall be
entitled to rely upon advice of counsel concerning legal matters and upon any
notice, consent, certificate, statement or writing which such Agent believes to
be genuine and to have been presented by a proper Person.
SECTION 11.4. Successor. The Administrative Agent may resign as such at
any time upon at least 30 days' prior written notice to the Borrowers and all
Lenders. If the Administrative Agent at any time shall resign, the Required
Lenders may (with the consent of the Borrowers so long as a Default has not
occurred and is not then continuing, such consent not to be unreasonably
withheld or delayed) appoint another Lender as a successor Administrative Agent
which shall thereupon become the Administrative Agent hereunder. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's giving written notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the U.S. (or any State thereof) or a
U.S. branch or agency of a commercial banking institution, and having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as the Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall be entitled to receive from the
retiring Administrative Agent such documents of transfer and assignment as such
successor Administrative Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from its duties and obligations under this Agreement. After any
retiring Administrative Agent's resignation hereunder as the Administrative
Agent, the provisions of
(a) this Article XI shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Administrative Agent
under this Agreement; and
(b) Section 11.3 and Section 11.4 shall continue to inure to its
benefit.
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SECTION 11.5. Credit Extensions by Agents. Each Agent shall have the same
rights and powers with respect to (x) the Loans made by it in its capacity as a
Lender or any of its Affiliates, (y) the Notes held by it or any of its
Affiliates, and (z) its participating interests in the Letters of Credit as any
other Lender and may exercise the same as if it were not an Agent. Each Agent
and its Affiliates may accept deposits from, lend money to, and generally engage
in any kind of business with any Borrower or any Subsidiary or Affiliate of any
Borrower as if Credit Suisse First Boston and Chase were not Agents hereunder.
SECTION 11.6. Credit Decisions. Each Lender acknowledges that it has,
independently of each Agent and each other Lender, and based on such Lender's
review of the financial information of the Borrowers, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such Lender
has deemed appropriate, made its own credit decision to extend its Commitments.
Each Lender also acknowledges that it will, independently of each Agent and each
other Lender, and based on such other documents, information and investigations
as it shall deem appropriate at any time, continue to make its own credit
decisions as to exercising or not exercising from time to time any rights and
privileges available to it under this Agreement or any other Loan Document.
SECTION 11.7. Collateral Agent. Each Lender consents and agrees to all of
the terms and provisions of the Intercreditor Agreement and the other Security
Documents, as the same may be in effect from time to time or may be amended,
supplemented or otherwise modified from time to time in accordance with the
provisions of the Security Documents and this Agreement, and authorizes and
directs the Collateral Agent (as defined in the Intercreditor Agreement) to act
as collateral agent pursuant to the Intercreditor Agreement (including pursuant
to the appointment thereof under Section ___ of the Intercreditor Agreement).
SECTION 11.8. Copies, etc. The Administrative Agent shall give prompt
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by any Borrower pursuant to the terms of this
Agreement (unless concurrently delivered to the Lenders by such Borrower). The
Administrative Agent will distribute to each Lender each document or instrument
received for its account and copies of all other communications received by the
Administrative Agent from any Borrower for distribution to the Lenders by the
Administrative Agent in accordance with the terms of this Agreement or any other
Loan Document.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.1. Waivers, Amendments, etc. The provisions of this Agreement
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented to
by each Borrower and the
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Required Lenders; provided, however, that no such amendment, modification or
waiver which would:
(a) modify any requirement hereunder that any particular action be
taken by all the Lenders or by the Required Lenders shall be effective
unless consented to by each Lender;
(b) modify this Section 12.1, change the definition of "Required
Lenders", increase the Commitment Amount or the Percentage of any Lender,
reduce any fees described in Article III (other than any fee payable to
the Administrative Agent solely for its own account or the Issuer solely
for its own account), release all or substantially all of the collateral,
except as otherwise specifically provided in any Loan Document, release
any Guarantor from its obligations under its Guaranty, or extend the
Commitment Termination Date shall be made without the consent of each
Lender;
(c) extend the due date for, or reduce the amount of, (i) any
scheduled repayment or prepayment of principal of or interest on any Loan
(or reduce the principal amount of or rate of interest on any Loan) or
(ii) any repayment of a Reimbursement Obligation (or reduce the amount of
or rate of interest on any Reimbursement Obligation) shall be made without
the consent of each Lender;
(d) affect adversely the rights or obligations of the Issuer qua the
Issuer shall be made without the consent of the Issuer; or
(e) affect adversely the rights or obligations of the Administrative
Agent qua the Administrative Agent shall be made without the consent of
the Administrative Agent.
Notwithstanding the foregoing provisions of this Section 12.1, the
Administrative Agent and the Borrowers may, in connection with implementation of
the CP Program, without the consent of any Lender, enter into any amendment,
supplement or other modification to this Agreement or any other Loan Document,
in form and substance satisfactory to the Administrative Agent, to cure any
ambiguity or to correct or supplement any provision in this Agreement or any
other Loan Document that may be inconsistent with any provision applicable to
the CP Program as described in that certain Confidential Memorandum dated
November 1997 of the Borrowers; provided, however, that (i) any such action
shall not have an adverse effect on the interests of the Lenders and (ii) a copy
of any such amendment, supplement or other modification shall be furnished to
the Lenders or the Issuer in accordance with the notice provisions hereof not
later than five days prior to the execution thereof by the Administrative Agent.
No failure or delay on the part of either Agent, the Issuer, any Lender or the
holder of any Note in exercising any power or right under this Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on any Borrower in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by either Agent, the
Issuer, any Lender or the holder of any Note under this Agreement or any other
Loan Document shall, except as may be otherwise
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stated in such waiver or approval, be applicable to subsequent transactions. No
waiver or approval hereunder shall require any similar or dissimilar waiver or
approval thereafter to be granted hereunder.
SECTION 12.2. Notices. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth in the case of any Borrower or any
Agent, below its signature hereto or in the case of any Lender, in Schedule II
hereto or in a Lender Assignment Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other parties. Each
notice shall be deemed to have been duly given or made when delivered, or five
Business Days after being deposited in the mail, postage prepaid and return
receipt requested, or, in the case of facsimile notice, when electronic
confirmation thereof is received by the transmitter, except that notices
pursuant to Article II, III, IV or XI to the Administrative Agent shall not be
effective until actually received by the Administrative Agent, and notices
pursuant to Article IV to the Issuer shall not be effective until actually
received by the Issuer.
SECTION 12.3. Payment of Costs and Expenses. The Borrowers, jointly and
severally, agree to pay on demand all expenses of each Agent and each Arranger
(including the reasonable fees and out-of-pocket expenses of counsel to the
Agents and of local counsel, if any, who may be retained by counsel to the
Agents) in connection with
(a) the negotiation, preparation, execution and delivery of this
Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from
time to time hereafter be required, whether or not the transactions
contemplated hereby are consummated;
(b) the filing, recording, refiling or rerecording of any Loan
Document and/or any Uniform Commercial Code financing statements relating
thereto and all amendments, supplements, amendments and restatements and
other modifications to any thereof and any and all other documents or
instruments of further assurance required to be filed or recorded or
refiled or rerecorded by the terms hereof or the terms of any Loan
Document; and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrowers further, jointly and severally, agree to pay, and to save the
Agents, the Arrangers, the Issuer and the Lenders harmless from all liability
for, any stamp, issuance, excise or other similar taxes which may be payable in
connection with the execution or delivery of this Agreement, the Credit
Extensions hereunder, the issuance of the Notes, Letters of Credit or any other
Loan Documents. The Borrowers also, jointly and severally, agree to reimburse
each Agent, the Issuer and each Lender upon demand for all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and legal expenses)
incurred by such Agent or such Lender
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<PAGE> 122
in connection with (x) the negotiation of any restructuring or "work-out",
whether or not consummated, of any Obligations and (y) the enforcement of any
Obligations.
SECTION 12.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Agent, each Arranger, the Issuer and each
Lender and the extension of the Commitments, the Borrowers hereby, jointly and
severally, indemnify, exonerate and hold each Agent, each Arranger, the Issuer
and each Lender and each of their respective officers, directors, employees and
agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith (irrespective of
whether any such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable attorneys' fees and
disbursements whether incurred in connection with actions between or among the
parties hereto or the parties hereto and third parties (collectively, the
"Indemnified Liabilities"), incurred by the Indemnified Parties or any of them
as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Credit Extension,
including all Indemnified Liabilities arising in connection with the
Transaction or the use of any Letter of Credit;
(b) the entering into and performance of this Agreement and any
other Loan Document by any of the Indemnified Parties (including any
action brought by or on behalf of any Borrower as the result of any
determination by the Required Lenders pursuant to Article VI not to fund
any Credit Extension; provided that any such action is resolved by final
judgment of a court of competent jurisdiction in favor of such Indemnified
Party);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Parent or any of its
Subsidiaries of all or any portion of the stock or assets of any Person,
whether or not such Agent, such Arranger, the Issuer or such Lender is
party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Parent or any of its
Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Parent or any Subsidiary thereof of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental
Law), regardless of whether caused by, or within the control of, the
Parent or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or willful misconduct or a
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<PAGE> 123
breach by such Indemnified Party (or its agents or employees or any other Person
under its control) of any of its obligations under this Agreement, as determined
by a final judgment of a court of competent jurisdiction. If and to the extent
that the foregoing undertaking may be unenforceable for any reason, each
Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
SECTION 12.5. Survival. The obligations of each Borrower under Sections
4.9, 5.3, 5.4, 5.5, 5.6, 12.3 and 12.4, and the obligations of the Lenders under
Section 11.1, shall in each case survive any assignment from one Lender to
another and any termination of this Agreement, the payment in full of all
Obligations and the termination of all Commitments. The representations and
warranties made by each Obligor in this Agreement and in each other Loan
Document shall survive the execution and delivery of this Agreement and each
such other Loan Document.
SECTION 12.6. Severability. Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall, as
to such provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Agreement or such Loan Document or affecting the validity or enforceability
of such provision in any other jurisdiction.
SECTION 12.7. Headings. The various headings of this Agreement and of each
other Loan Document are inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement or such other Loan Document or any
provisions hereof or thereof.
SECTION 12.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall constitute together but one and the same agreement. This Agreement
shall become effective when counterparts hereof executed on behalf of each
Borrower, each Lender and the Administrative Agent (or notice thereof
satisfactory to the Administrative Agent) shall have been received by the
Administrative Agent.
SECTION 12.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE NOTES
AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. This Agreement, the Fee
Letter, the Notes and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersede any prior agreements, written or oral, with respect thereto.
SECTION 12.10. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
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(a) no Borrower may assign or transfer either of their respective
rights or obligations hereunder without the prior written consent of the
Administrative Agent and all of the Lenders, except permitted pursuant to
clause (a) of Section 8.2.9 provided that, in the event of any such
transaction, the Administrative Agent shall have received such supplements
or other modifications to this Agreement and the other Loan Documents as
it may reasonably request to confirm the Obligations of such Borrower and
the other Obligors); and
(b) the rights of sale, assignment and transfer of the Lenders are
subject to Section 12.11.
SECTION 12.11. Sale and Transfer of Loans and Notes; Participations in
Loans and Notes. Each Lender may assign, or sell participations in, its Loans,
Letters of Credit and Commitments to one or more other Persons in accordance
with this Section 12.11.
SECTION 12.11.1. Assignments. Any Lender,
(a) with the written consents of each Borrower, the Issuer and the
Administrative Agent (which consents shall not be unreasonably delayed or
withheld and which consent, in the case of such Borrower, (i) shall be
deemed to have been given in the absence of a written notice delivered by
such Borrower to the Administrative Agent, on or before the fifth Business
Day after receipt by such Borrower of such Lender's request for consent,
stating, in reasonable detail, the reasons why such Borrower proposes to
withhold such consent and (ii) shall not be required if an Event of
Default has occurred and is then continuing) may at any time assign and
delegate to one or more Eligible Assignees, and
(b) with notice to the Borrowers, the Issuer and the Administrative
Agent, but without the consent of any Borrower, the Issuer or the
Administrative Agent, may assign and delegate to any of its Affiliates
which is an Eligible Assignee or to any other Lender
(each assignee to whom such assignment and delegation is to be made, being
hereinafter referred to as an "Assignee Lender"), all or any fraction of such
Lender's total Loans, participations in Letter of Credit Outstandings and
Commitments (which assignment and delegation shall be of a constant, and not a
varying, percentage of all the assigning Lender's Loans and Commitments) in a
minimum aggregate amount equal to the lesser of $5,000,000 and the aggregate
amount of such assigning Lender's Loans, participation in Letter of Credit
Outstanding and Commitments; provided, however, that, after giving effect to
such assignment, the assigning Lender shall have Commitments, participations in
Letter of Credit Outstandings and Loans aggregating at least $5,000,000 or no
such Commitments, participations and Loans; provided further, however, that any
such Assignee Lender will comply, if applicable, with the provisions contained
in the last sentence of Section 5.6; provided further, however, that, each
Borrower, the Issuer and the Administrative Agent shall be entitled to continue
to deal solely and directly with such Lender in connection with the interests so
assigned and delegated to an Assignee Lender until
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<PAGE> 125
(i) written notice of such assignment and delegation, together with
payment instructions, addresses and related information with respect to
such Assignee Lender, shall have been given to the Borrowers, the Issuer
and the Administrative Agent by such assigning Lender and such Assignee
Lender,
(ii) such Assignee Lender shall have executed and delivered to the
Borrowers, the Issuer and the Administrative Agent a Lender Assignment
Agreement, accepted by the Administrative Agent, and
(iii) the processing fees described below shall have been paid.
From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the assigning Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within five Business Days after its receipt of notice that the
Administrative Agent has received an executed Lender Assignment Agreement, each
Borrower shall, to the extent requested, execute and deliver to the
Administrative Agent (for delivery to the relevant Assignee Lender) new Notes
evidencing such Assignee Lender's assigned Loans and Commitments and, if the
assigning Lender has retained Loans and Commitments hereunder which are
evidenced by any Notes, replacement Notes in the principal amount of the Loans
and Commitments retained by the assignor Lender hereunder (such Notes to be in
exchange for, but not in payment of, those Notes then held by such assignor
Lender). Each such Note shall be dated the date of the predecessor Notes. The
assignor Lender shall mark the predecessor Notes "exchanged" and deliver them to
each applicable Borrower. Accrued interest on that part of the principal
comprising any assigned Loans, and accrued fees, shall be paid as provided in
the Lender Assignment Agreement. Accrued interest on that part of the principal
of any Loans not assigned shall be paid to the assignor Lender. Accrued interest
and accrued fees shall be paid at the same time or times provided in this
Agreement. Such assigning Lender must also pay a processing fee to the
Administrative Agent upon delivery of any Lender Assignment Agreement in the
amount of $3,500. Any attempted assignment and delegation not made in accordance
with this Section 12.11.1 shall be null and void.
Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time create a security interest in all or any portion of its
rights under this Agreement (including the Loans owing to it and the Notes held
by it) in favor of any Federal Reserve Bank in accordance with Regulation A of
the F.R.S. Board; provided, however, the obligations of such Lender under this
Agreement or under any other Loan Document shall not be delegated or assigned
pursuant to any foreclosure under such pledge without the consents of each
Borrower, the Administrative Agent and the Issuer.
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<PAGE> 126
The Borrowers hereby designate the Administrative Agent to serve as the
Borrowers' agent, solely for the purpose of this paragraph, to maintain a
register (the "Register") on which the Administrative Agent will record each
Lender's Loan Commitment, the Loans made by each Lender, and each repayment in
respect of the principal amount of the Loans of each Lender and annexed to which
the Administrative Agent shall retain a copy of each Lender Assignment Agreement
delivered to the Administrative Agent pursuant to this Section 12.11.1. Failure
to make any recordation, or any error in such recordation, shall not affect the
Borrowers obligations in respect of such Loans. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agent and the Lenders shall treat each Person in whose name a
Loan is registered as the owner thereof for all purposes of this Agreement,
notwithstanding notice or any provision herein to the contrary. A Lender's Loan
Commitment and the Loans made pursuant thereto may be assigned or otherwise
transferred in whole or in part only by registration of such assignment or
transfer in the Register. Any assignment or transfer of a Lender's Loan
Commitment or the Loans made pursuant thereto shall be registered in the
Register only upon delivery to the Administrative Agent of a Lender Assignment
Agreement duly executed by the assignor thereof. No assignment or transfer of a
Lender's Loan Commitment or the Loans made pursuant thereto shall be effective
unless such assignment or transfer shall have been recorded in the Register by
the Administrative Agent as provided in this Section.
SECTION 12.11.2. Participations. Any Lender may at any time sell to one or
more commercial banks or other financial institutions (each of such commercial
banks and other financial institutions being herein called a "Participant")
participating interests (or a sub-participating interest, in the case of a
Lender's participating interest in a Letter of Credit) in any of the Loans,
Commitments, or other interests of such Lender hereunder; provided, however,
that
(a) no participation or sub-participation contemplated in this
Section 12.11 shall relieve such Lender from its Commitments or its other
obligations hereunder or under any other Loan Document,
(b) such Lender shall remain solely responsible for the performance
of its Commitments and such other obligations,
(c) each Borrower and each other Obligor and the Administrative
Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement
and each of the other Loan Documents,
(d) no Participant, unless such Participant is an Affiliate of such
Lender, or is itself a Lender, shall be entitled to require such Lender to
take or refrain from taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any Participant that such
Lender will not, without such Participant's consent, take any actions of
the type described in clause (b) or (c) of Section 12.1,
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<PAGE> 127
(e) no Borrower shall be required to pay any amount under Section
5.6 that is greater than the amount which it would have been required to
pay had no participating interest been sold, and
(f) such Lender shall comply with any obligation to withhold taxes
or any filing or reporting requirements imposed under applicable law
relating to such Participant and the Borrowers and the Administrative
Agent shall continue to deal solely and directly with such Lender in
connection with such matters.
Each Borrower acknowledges and agrees that each Participant, for purposes of
Sections 5.3, 5.4, 5.5, 5.6 (subject to clause (e) above) 5.8, 5.9, 12.3 and
12.4, shall be considered a Lender; provided, that no Participant shall be
entitled to receive any greater payment under Section 5.3, 5.4 or 5.5 than the
Lender that transferred such rights to such Participant would have been entitled
to receive with respect to such rights, unless such transfer is made with a
Borrower's prior written consent.
SECTION 12.12. Other Transactions. Nothing contained herein shall preclude
either Agent or any other Lender from engaging in any transaction, in addition
to those contemplated by this Agreement or any other Loan Document, with any
Borrower or any of its Affiliates in which such Borrower or such Affiliate is
not restricted hereby from engaging with any other Person.
SECTION 12.13. Independence of Covenants. All covenants contained in this
Agreement and each other Loan Document shall be given independent effect such
that, in the event a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not, unless
expressly so provided in such first covenant, avoid the occurrence of a Default
or an Event of Default if such action is taken or such condition exists.
SECTION 12.14. Confidentiality. The Agents, the Issuer and the Lenders
shall hold all non-public information provided to them by the Parent or any of
its Subsidiaries pursuant to or in connection with this Agreement in accordance
with their customary procedures for handling confidential information of this
nature, but may make disclosure to any of their examiners, regulators (including
the National Association of Insurance Commissioners), Affiliates, outside
auditors, counsel and other professional advisors in connection with this
Agreement or any other Loan Document or as reasonably required by any potential
bona fide transferee, participant or assignee, or in connection with the
exercise of remedies under a Loan Document, or as requested by any governmental
agency or representative thereof or pursuant to legal process; provided,
however, that (a) unless specifically prohibited by applicable law or court
order, each Agent, the Issuer and each Lender shall promptly notify the
Borrowers of any request by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Agent, the Issuer or such Lender by such governmental agency)
for disclosure of any such non-public information and, where practicable, prior
to disclosure of such information; (b) prior to any such disclosure pursuant to
this Section 12.14, each Agent, the Issuer and each Lender shall require any
such bona fide transferee, participant and assignee receiving a disclosure of
non-public information to agree, for the benefit of the Parent and its
Subsidiaries, in writing (i) to be bound by this Section 12.14; and (ii) to
require such Person to require any other Person to whom such Person discloses
such non-public information to be similarly bound by this Section 12.14; and (c)
except as may be required by an
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<PAGE> 128
order of a court of competent jurisdiction and to the extent set forth therein,
no Lender shall be obligated or required to return any materials furnished by
the Parent or any of its Subsidiary.
SECTION 12.15. Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS OR
ANY BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE
STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH BORROWER FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH
BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH SUCH PERSON MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT ANY BORROWER 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 SUCH PERSON OR THE PROPERTY OF SUCH
PERSON, EACH BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF THE
OBLIGATIONS OF SUCH PERSON UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 12.16. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT, THE LENDERS
AND EACH BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE
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<PAGE> 129
ADMINISTRATIVE AGENT, THE LENDERS OR ANY BORROWER. EACH BORROWER ACKNOWLEDGES
AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A
PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE
AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN
DOCUMENT.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
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<PAGE> 130
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.
DOLLAR THRIFTY AUTOMOTIVE GROUP,
INC.
By:
---------------------------------
Name:
Title:
Address: 5330 East 31st Street
Tulsa, OK 74135
Facsimile No.: (918) 669-2934
Attention:
DOLLAR RENT A CAR SYSTEMS, INC.
By:
---------------------------------
Name:
Title:
Address: 5330 East 31st Street
Tulsa, OK 74135
Facsimile No.: (918) 669-3001
Attention:
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<PAGE> 131
THRIFTY RENT-A-CAR SYSTEM, INC.
By:
---------------------------------
Name:
Title:
Address: 5330 East 31st Street
Tulsa, OK 74135
Facsimile No.: (918) 669-2596
Attention:
CREDIT SUISSE FIRST BOSTON, as the
Administrative Agent and as an Arranger
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
Address: Eleven Madison Avenue
20th Floor
New York, NY 10010-3629
Facsimile No.:
Attention:
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<PAGE> 132
CREDIT SUISSE FIRST BOSTON, as Issuer
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as the
Syndication Agent
By:
---------------------------------
Name:
Title:
Address:
Facsimile No.:
Attention:
CHASE SECURITIES INC., as
an Arranger
By:
---------------------------------
Name:
Title:
Address:
Facsimile No.:
Attention:
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<PAGE> 133
LENDERS:
--------
CREDIT SUISSE FIRST BOSTON
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK
By:
---------------------------------
Name:
Title:
[NAME OF LENDER]
By:
---------------------------------
Name:
Title:
[NAME OF LENDER]
By:
---------------------------------
Name:
Title:
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<PAGE> 134
SCHEDULE I
LENDER INFORMATION
------------------
<TABLE>
<CAPTION>
LENDER PERCENTAGE DOMESTIC OFFICE EUROCURRENCY OFFICE
- ------ ---------- --------------- -------------------
<S> <C> <C> <C>
Credit Suisse First Boston _______% ________________________ ________________________
________________________ ________________________
________________________ ________________________
Telecopier: ____________ Telecopier: ____________
Attn: ________________ Attn: ________________
The Chase Manhattan Bank _______% ________________________ ________________________
________________________ ________________________
________________________ ________________________
Telecopier: ____________ Telecopier: ____________
Attn: ________________ Attn: ________________
[Name of Lender] _______% ________________________ ________________________
________________________ ________________________
________________________ ________________________
Telecopier: ____________ Telecopier: ____________
Attn: ________________ Attn: ________________
</TABLE>
<PAGE> 135
<TABLE>
<CAPTION>
LENDER PERCENTAGE DOMESTIC OFFICE EUROCURRENCY OFFICE
- ------ ---------- --------------- -------------------
<S> <C> <C> <C>
[Name of Lender] _______% ________________________ ________________________
________________________ ________________________
________________________ ________________________
Telecopier: ____________ Telecopier: ____________
Attn: ________________ Attn: ________________
</TABLE>
-2-
<PAGE> 136
SCHEDULE II
SUBORDINATED INTERCOMPANY NOTE TERMS
<PAGE> 137
SCHEDULE III
EXISTING MATERIAL PROPERTY
- --------------------------------------------------------------------------------
Owner Site
- ----- ----
- --------------------------------------------------------------------------------
Pentastar Services Headquarters, Tulsa, Oklahoma
- --------------------------------------------------------------------------------
Dollar 1120 Laurel Street West
San Diego, California
- --------------------------------------------------------------------------------
Dollar 4720 W. Spruce Street
Tampa Bay, Florida
- --------------------------------------------------------------------------------
Thrifty 4114 E. Washington
Phoenix, Arizona
- --------------------------------------------------------------------------------
Thrifty 2400 SE Miami Road
Ft. Lauderdale, Florida
- --------------------------------------------------------------------------------
Thrifty 5757 S. Samoran Boulevard
Orlando, Florida
- --------------------------------------------------------------------------------
Thrifty 4405 Reese Drive
7700 Esters Blvd.
Dallas, Texas
- --------------------------------------------------------------------------------
Thrifty 15845 JFK Boulevard
Houston, Texas
- --------------------------------------------------------------------------------
Thrifty 15 South 2400 West
Salt Lake City, Utah
- --------------------------------------------------------------------------------
<PAGE> 138
SCHEDULE IV
EXCLUDED PROPERTY
- --------------------------------------------------------------------------------
Owner Site
- ----- ----
- --------------------------------------------------------------------------------
Dollar 4775 S. Swenson Road
Las Vegas, Nevada
- --------------------------------------------------------------------------------
Thrifty 4708 Riverdale Road
Atlanta, Georgia
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
-5-
<PAGE> 1
EXHIBIT 4.7
================================================================================
RENTAL CAR FINANCE CORP.,
as Issuer
and
BANKERS TRUST COMPANY,
as Trustee
----------------------
SERIES 1997 1/N1 SUPPLEMENT
dated as of December __, 1997
to
BASE INDENTURE
dated as of December 13, 1995,
as amended by
AMENDMENT TO BASE INDENTURE,
dated as of December __, 1997
Rental Car Asset Backed Notes
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE 1
DESIGNATION
ARTICLE 2
DEFINITIONS AND CONSTRUCTION
ARTICLE 3
[RESERVED]
ARTICLE 4
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.6 Establishment of Group I Collection Account,
Series 1997 1/N1 Collection Account, Series
1997 1/N1 Excess Funding Account, and Series
1997 1/N1 Accrued Interest Account...................... 49
Section 4.7 Allocations with Respect to the Series 1997 1/N1
Notes................................................... 50
Section 4.8 Monthly Payments.......................................... 63
Section 4.9 Payment of Note Interest.................................. 67
Section 4.10 Payment of Note Principal................................. 70
Section 4.11 Retained Distribution Account............................. 92
Section 4.12 Class A Distribution Account.............................. 92
Section 4.13 Class B Distribution Account.............................. 94
Section 4.14 Class B Notes Subordinate to Class A Notes................ 95
Section 4.15 Class C Distribution Account.............................. 96
Section 4.16 Class C Notes Subordinate to Class A Notes
and Class B Notes....................................... 97
Section 4.17 The Servicer's Failure to Instruct the
Trustee to Make a Deposit or Payment.................... 98
Section 4.18 Lease Payment Deficit Draw on Series 1997 1/N1
Letter of Credit........................................ 98
Section 4.19 Claim Under on the Demand Note............................ 99
Section 4.20 Series 1997 1/N1 Letter of Credit Termination
Demand.................................................. 100
Section 4.21 The Series 1997 1/N1 Cash Collateral Account.............. 101
<PAGE> 3
ARTICLE 5
AMORTIZATION EVENTS
Section 5.1 Series 1997 1/N1 Amortization Events..................... 104
Section 5.2 Waiver of Past Events.................................... 106
ARTICLE 6
[RESERVED]
ARTICLE 7
FORM OF SERIES 1997 1/N1 NOTES
Section 7.1 Class A Notes............................................ 107
Section 7.2 Class B Notes............................................ 108
Section 7.3 Class C Notes............................................ 108
ARTICLE 8
GENERAL
Section 8.1 Repurchase of Notes...................................... 109
Section 8.2 Payment of Rating Agencies' Fees......................... 111
Section 8.3 Exhibits................................................. 111
Section 8.4 Ratification of Base Indenture........................... 112
Section 8.5 Counterparts............................................. 112
Section 8.6 Governing Law............................................ 112
Section 8.7 Amendments............................................... 112
Schedule 1 - Maximum Manufacturer Percentages
Exhibit A-1 - Form of Restricted Global Class A 1/N1 Note
Exhibit A-2 - Form of Restricted Global Class A 1/N2 Note
Exhibit A-3 - Form of Restricted Global Class A 1/N3 Note
Exhibit A-4 - Form of Temporary Global Class A 1/N1 Note
Exhibit A-5 - Form of Temporary Global Class A 1/N2 Note
Exhibit A-6 - Form of Temporary Global Class A 1/N3 Note
Exhibit A-7 - Form of PermaNeNt Global Class A 1/N1 Note
Exhibit A-8 - Form of PermaNeNt Global Class A 1/N2 Note
Exhibit A-9 - Form of PermaNeNt Global Class A 1/N3 Note
Exhibit B-1 - Form of Restricted Global Class B 1/N1 Note
Exhibit B-2 - Form of Restricted Global Class B 1/N2 Note
Exhibit B-3 - Form of Restricted Global Class B 1/N3 Note
Exhibit B-4 - Form of Temporary Global Class B 1/N1 Note
Exhibit B-5 - Form of Temporary Global Class B 1/N2 Note
Exhibit B-6 - Form of Temporary Global Class B 1/N3 Note
Exhibit B-7 - Form of PermaNeNt Global Class B 1/N1 Note
Exhibit B-8 - Form of PermaNeNt Global Class B 1/N2 Note
Exhibit B-9 - Form of PermaNeNt Global Class B 1/N3 Note
ii
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Exhibit C 1/N1 Form of Restricted Global Class C 1/N1 Note
Exhibit C 1/N2 Form of Restricted Global Class C 1/N2 Note
Exhibit C 1/N3 Form of Restricted Global Class C 1/N3 Note
Exhibit C 1/N4 Form of Temporary Global Class C 1/N1 Note
Exhibit C 1/N5 Form of Temporary Global Class C 1/N2 Note
Exhibit C 1/N6 Form of Temporary Global Class C 1/N3 Note
Exhibit C 1/N7 Form of Permanent Global Class C 1/N1 Note
Exhibit C 1/N8 Form of Permanent Global Class C 1/N2 Note
Exhibit C 1/N9 Form of Permanent Global Class C 1/N3 Note
Exhibit D Form of Consent
Exhibit E Form of Demand Note
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THIS SERIES 1997 1/N1 SUPPLEMENT, dated as of December [__], 1997
(as the same may be amended, supplemented, restated or otherwise modified from
time to time in accordance with the terms hereof and of the Base Indenture
referred to below, this "Supplement") between RENTAL CAR FINANCE CORP.,
formerly known as Thrifty Car Rental Finance Corporation, a special purpose
Oklahoma corporation ("RCFC" or the "Issuer"), and BANKERS TRUST COMPANY, a New
York banking corporation (together with its successors in trust thereunder as
provided in the Base Indenture referred to below, the "Trustee"), to the Base
Indenture, dated as of December 13, 1995, between RCFC and the Trustee, as
amended by an amendment of even date herewith (as amended by such amendment and
as the same may be further amended, supplemented, restated or otherwise
modified from time to time in accordance with its terms, exclusive of
Supplements creating a new Series of Notes, the "Base Indenture").
W I T N E S S E T H:
WHEREAS, Sections 2.2, 2.3, 11.1 and 11.3 of the Base Indenture
provide, among other things, that RCFC and the Trustee may at any time and from
time to time enter into a supplement to the Base Indenture for the purpose of
authorizing the issuance of one or more Series of Notes;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DESIGNATION
(a) There is hereby created a Series of Notes to be issued pursuant
to the Base Indenture and this Supplement and such Series of Notes shall be
designated generally as Rental Car Asset Backed Notes, Series 1997 1/N1. The
Series 1997 1/N1 Notes shall be issued in three classes of Class A Notes, the
Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, three
classes of Class B Notes, the Class B-1 Notes, the Class B-2 Notes and the
Class B-3 Notes, and three classes of Class C Notes, the Class C-1 Notes, the
Class C-2 Notes and the Class C-3 Notes. The Class A-1 Rental Car Asset Backed
Notes, the Class A-2 Rental Car Asset Backed Notes and the Class A-3 Rental Car
Asset Backed Notes are designated generally herein as the "Class A Notes", the
Class B-1 Rental Car Asset Backed Notes, the Class B-2 Rental Car Asset Backed
Notes and the Class B-3 Rental Car Asset Backed Notes are designated generally
herein as the "Class B Notes", and the Class C-1 Rental Car Asset Backed Notes,
the Class C-2 Rental Car Asset Backed Notes and the Class C-3 Rental Car Asset
Backed Notes are designated generally herein as the "Class C Notes". The Class
A Notes, the Class B Notes and the Class C Notes are referred to collectively
as the "Series 1997 1/N1 Notes".
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(b) The Class C Notes are subordinated in right of payment to the
Class A Notes and Class B Notes as set forth herein. The Class B Notes are
subordinated in right of payment to the Class A Notes as set forth herein.
(c) The net proceeds from the sale of the Series 1997 1/N1 Notes
shall be deposited into the Collection Account, and shall be used (i) on the
Series 1997 1/N1 Closing Date, to refinance the Existing Fleet, (ii) on and
after the Series 1997 1/N1 Closing Date, to finance the acquisition by
Thrifty and Dollar of Texas Vehicles for leasing in the State of Texas, (iii)
on and after the Series 1997 1/N1 Closing Date, to acquire Acquired Vehicles
from certain Eligible Manufacturers, and (iv) in certain circumstances, to pay
principal of and interest on the Series 1997 1/N1 Notes or principal on
amortizing Group I Series of Notes other than the Series 1997 1/N1 Notes.
(d) The Series 1997 1/N1 Notes are a Segregated Series of Notes (as
more fully described in the Base Indenture) and are hereby designated as a
"Group I" Series of Notes. The Issuer may from time to time issue additional
Segregated Series of Notes that the related Series Supplements will indicate
are entitled to share, together with the Series 1997 1/N1 Notes, the Group I
Collateral and any other Collateral and Master Collateral designated as
security for the Series 1997 1/N1 Notes under this Supplement and the Master
Collateral Agency Agreement (the Series 1997 1/N1 Notes and any such additional
Segregated Series, each, a "Group I Series of Notes" and, collectively, the
"Group I Series of Notes"). Accordingly, all references in this Supplement to
"all" Series of Notes (and all references in this Supplement to terms defined
in the Base Indenture that contain references to "all" Series of Notes) shall
refer to all Group I Series of Notes.
ARTICLE 2
DEFINITIONS AND CONSTRUCTION
(a) All capitalized terms not otherwise defined in this Supplement
are defined in the Definitions List attached to the Base Indenture as Schedule 1
thereto, as the same may be amended, supplemented, restated or otherwise
modified from time to time in accordance with the terms of the Base Indenture.
All capitalized terms defined in this Supplement that are also defined in the
Definitions List to the Base Indenture shall, unless context otherwise requires,
have the meanings set forth in this Supplement. All references to "Articles",
"Sections" or "Subsections" herein shall refer to Articles, Sections or
Subsections of the Base Indenture, except as otherwise provided herein. Unless
otherwise stated herein, as the context otherwise requires or if such term is
otherwise defined in the Base
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Indenture, each capitalized term used or defined herein shall relate only to the
Series 1997 1/N1 Notes and not to any other Series of Notes issued by RCFC. In
addition, with respect to the Series 1997 1/N1 Notes, references in the Base
Indenture to (i) the "Lease" shall be deemed to refer to the Master Lease, (ii)
"Thrifty Finance" shall be deemed to refer to RCFC, (iii) "Lessee" shall be
deemed to refer to either or both of the Lessees, as the context requires, and
(iv) "Servicer" shall be deemed to refer to the Master Servicer, except in each
case as otherwise specified in this Supplement or as the context may otherwise
require.
(b) The following words and phrases shall have the following
meanings with respect to the Series 1997 1/N1 Notes, and the definitions of such
terms are applicable to the singular as well as the plural form of such terms
and to the masculine as well as the feminine and neuter genders of such terms:
"Accrued Amounts" means, with respect to any Group I Series of Notes
(or any class (or portion thereof)), on any date of determination, the sum of
(i) accrued and unpaid interest on the Notes of such Series (or the applicable
class thereof) as of such date, (ii) the portion of the accrued and unpaid
Monthly Servicing Fee and any Supplemental Monthly Servicing Fee allocated to
such Series of Notes (or the applicable class thereof) pursuant to the related
lease or leases (which with respect to the Series 1997 1/N1 Notes is pursuant to
Section 26.1 of the Master Lease), and (iii) the product of (A) all other
accrued and unpaid fees and expenses of RCFC on such date, times (B) a fraction,
the numerator of which is the Invested Amount of such Group I Series of Notes
(or the applicable class thereof) on such date and the denominator of which is
the Aggregate Invested Amount for all outstanding Series of Notes on such date.
"Acquired Vehicles" means any Eligible Vehicles acquired by RCFC,
Dollar or Thrifty, as the case may be, on and after the Series 1997 1/N1 Closing
Date and leased by RCFC to any of the Lessees under the Master Lease.
"Additional Depreciation Charge" means, with respect to each
Non-Program Vehicle leased under the Master Lease on any Due Date, the quotient
of (a) the amount, if any, by which (i) the aggregate Net Book Value of all such
Non-Program Vehicles exceeds (ii) the three (3) month rolling average of the
aggregate Fair Market Value of such Non-Program Vehicles determined as of the
first day of the month in which such Due Date occurs and the first day of each
of the two (2) calendar months preceding such Due Date, divided by (b) the
number of Non-Program Vehicles leased under the Master Lease on such Due Date.
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"Additional Lessee" has the meaning specified in Section 28 of the
Master Lease.
"Additional Overcollateralization Amount" means, as of any date of
determination, an amount equal to (a) the Overcollateralization Portion on such
date divided by the Series 1997 1/N1 Enhancement Factor as of such date minus
(b) the Overcollateralization Portion as of such date.
"Aggregate Asset Amount" means, on any date of determination,
without duplication, the sum of (i) the Net Book Value of all Group I Vehicles
with respect to which the applicable Vehicle Lease Expiration Date has not
occurred, plus (ii) all amounts receivable, as of such date, by RCFC, Thrifty or
Dollar from Eligible Manufacturers under and in accordance with their respective
Eligible Vehicle Disposition Programs, or from Eligible Manufacturers as
incentive payments, allowances, premiums, supplemental payments or otherwise, in
each case with respect to Group I Vehicles at any time owned, financed or
refinanced by RCFC, plus (iii) all amounts (other than amounts specified in
clause (ii) above) receivable, as of such date, by RCFC, Thrifty or Dollar from
any Person in connection with the auction, sale or other disposition of Eligible
Vehicles at any time leased under the Master Lease, plus (iv) all accrued and
unpaid Monthly Base Rent and Monthly Supplemental Payments (other than amounts
specified in clauses (ii) and (iii) above) payable in respect of the Group I
Vehicles, plus (v) cash and Permitted Investments on deposit in the Collection
Account allocable to the Group I Series of Notes and, to the extent cash and
Permitted Investments in the Master Collateral Account are allocable to the
Trustee as Beneficiary pursuant to the Master Collateral Agency Agreement and
are not distributable to or at the direction of DTAG, Thrifty or Dollar, as the
case may be, in their respective capacities as Master Servicer or Servicers
pursuant thereto, cash and Permitted Investments in the Master Collateral
Account (less any portion thereof allocated to the Retained Interestholder)
allocable to the Group I Series of Notes.
"Aggregate Invested Amount" means the sum of the Invested Amounts
with respect to all Group I Series of Notes then outstanding.
"Annual Certificate" is defined in Section 24.4(g) of the Master
Lease.
"Asset Amount Deficiency" means, as of any date of determination,
the amount, if any, by which the Required Asset Amount exceeds the Aggregate
Asset Amount, as of such date of determination.
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"Assignment Agreement" means a Vehicle Disposition Program
Assignment Agreement, in the form attached as Exhibit E to the Master Collateral
Agency Agreement, or in such other form as is acceptable to each Rating Agency,
between a Lessee and/or RCFC as the case may be, as assignor, and the Master
Collateral Agent, as assignee, and acknowledged by the applicable Manufacturer,
pursuant to which such Lessee and/or RCFC, as the case may be, assigns as
collateral to the Master Collateral Agent all of such Lessee's and/or RCFC's, as
the case may be, right, title and interest in, to and under a Vehicle
Disposition Program.
"Authorized Officer" means (a) as to RCFC, any of its President, any
Vice President, the Secretary or any Assistant Secretary and (b) as to DTAG
(including in its capacity as the Master Servicer), Thrifty (including in its
capacities as a Lessee and as a Servicer), Dollar (including in its capacities
as a Lessee and a Servicer), any Additional Lessee or additional Servicer, those
officers, employees and agents of DTAG, Thrifty, Dollar, such other Lessee or
such other Servicer, as the case may be, in each case whose signatures and
incumbency shall have been certified as the authentic signatures of duly
qualified and elected persons authorized to act on behalf of such entities.
"Availability Payment" is defined in Section 5.2 of the Master
Lease.
"Base Indenture" has the meaning set forth in the preamble hereto.
"Board of Directors" means the Board of Directors of DTAG, RCFC,
Thrifty or Dollar, as applicable, or any authorized committee of the Board of
Directors.
"Carrying Charges" means, as of any day, without duplication, the
aggregate of all Trustee fees, servicing fees (other than supplemental servicing
fees) and other fees and expenses and indemnity amounts, if any, payable by the
Lessor, the Master Servicer or any Servicer under the Indenture or the other
Related Documents which have accrued during the Related Month.
"Carryover Controlled Amortization Amount" (as such term is used in
Section 24.4(b) of the Lease) means each of the Class A-1 Carryover Controlled
Amortization Amount, the Class A-2 Carryover Controlled Amortization Amount, the
Class A-3 Carryover Controlled Amortization Amount, the Class B-1 Carryover
Controlled Amortization Amount, the Class B-2 Carryover Controlled Amortization
Amount, the Class B-3 Carryover Controlled Amortization Amount, the Class C-1
Carryover Controlled Amortization, the Class C-2 Carryover Amortization
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Controlled Amount and the Class C-3 Carryover Amortization Amount.
"Casualty" means, with respect to any Vehicle, that (i) such Vehicle
is lost, stolen (and not recovered within 60 days of being reported stolen),
destroyed, seized or otherwise rendered permanently unfit or unavailable for
use, (including vehicles that are rejected pursuant to Section 2.2 of the Master
Lease), or (ii) such Vehicle is not accepted for Auction or repurchase for any
reason within thirty (30) days of initial submission and is not designated a
Non-Program Vehicle pursuant to Section 14 of the Master Lease (other than, in
the case of clause (ii) above, the applicable Manufacturer's willful refusal or
inability to comply with its obligations under its Vehicle Disposition Program)
"Casualty Payment" is defined in Section 7 of the Master Lease.
"Certificate of Credit Demand" means a certificate in the form of
Annex A to the Series 1997 1/N1 Letter of Credit.
"Certificate of Termination Demand" means a certificate in the form
of Annex B to the Series 1997 1/N1 Letter of Credit.
"Chrysler" means Chrysler Corporation, a [ ] corporation.
"Chrysler Vehicle Lien Nominee Agreement" means that certain Vehicle
Lien Nominee Agreement, dated as of December [___], 1997, between Chrysler and
RCFC.
"Class A Controlled Distribution Amount Deficiency" has the meaning
specified in Section 4.10(a)(i) of this Supplement.
"Class A Deficiency Amount" has the meaning specified in Section
4.8(a) of this Supplement.
"Class A Distribution Account" has the meaning specified in Section
4.12(a) of this Supplement.
"Class A Distribution Account Collateral" has the meaning specified
in Section 4.12(d) of this Supplement.
"Class A Enhancement Amount" means the sum of (a) the Class C
Invested Amount, plus (b) the Class B Invested Amount plus (c) the Series 1997
1/N1 Available Subordinated Amount, plus (d) the Series 1997 1/N1 Letter of
Credit Amount.
"Class A Interest Amount" has the meaning specified in Section
4.8(a) of this Supplement.
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"Class A Invested Amount" means, on any date of determination, the
sum of the Class A-1 Invested Amount, the Class A-2 Invested Amount and the
Class A-3 Invested Amount for such date of determination.
"Class A Monthly Interest Shortfall" means as of any Payment Date
and with respect to any or all of the classes of Class A Notes, as the context
requires, the excess, if any, of the Class A Interest Amount for the Class A-1
Notes, the Class A-2 Notes or the Class A-3 Notes (as applicable) and any unpaid
Class A Deficiency Amounts for the Class A-1 Notes, the Class A-2 Notes or the
Class A-3 Notes(as applicable) (together with accrued interest on such unpaid
Class A Deficiency Amounts) over the amount withdrawn from the Series 1997 1/N1
Accrued Interest Account and deposited in the Class A Distribution Account on
such Payment Date pursuant to Section 4.7(a) of this Supplement.
"Class A Non-Program Enhancement Percentage" means, with respect to
any date of determination, the greatest of (a) an amount equal to (i) 32% minus
(ii) the sum of the Class B Percentage and the Class C Percentage as of such
date, (b) an amount equal to (i) 100% minus (ii) an amount equal to (x) the
Market Value Adjustment Percentage, minus (y) 32%, minus (iii) the sum of the
Class B Percentage and the Class C Percentage as of such date, and (c) 15.25%.
"Class A Note Rate" means, for any Series 1997 1/N1 Interest Period,
the Class A-1 Rate, the Class A-2 Rate or the Class A-3 Rate, as applicable.
"Class A Noteholder" means the Person in whose name a Class A Note
is registered in the Note Register.
"Class A Notes" means the Class A-1 Notes, the Class A- 2 Notes and
the Class A-3 Notes.
"Class A Program Enhancement Percentage" means, with respect to any
date of determination, the greater of (a) an amount equal to (i) 32% minus (ii)
the sum of the Class B Percentage and the Class C Percentage as of such date,
and (b) 10.0%.
"Class A-1 Carryover Controlled Amortization Amount" means, with
respect to the Class A-1 Notes for any Related Month during the Class A-1
Controlled Amortization Period, (i) the excess, if any, of the Class A-1
Controlled Distribution Amount payable on the Payment Date occurring in the
Related Month over the principal amount distributed on such Payment Date with
respect to the Class A-1 Notes pursuant to Section 4.10(a) of this Supplement,
plus (ii) the unpaid amount, if any, of the Class A-1 Carryover Controlled
Amortization Amount for the
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previous Related Month; provided, however, that for the first Related Month in
the Class A-1 Controlled Amortization Period, the Class A-1 Carryover Controlled
Amortization Amount shall be zero.
"Class A-1 Controlled Amortization Amount" means an amount equal to
$38,336,834.
"Class A-1 Controlled Amortization Period" means the period
commencing on July 31, 2000(or, if such day is not a Business Day, the Business
Day last preceding such day), and continuing to the earliest of (i) the
commencement of the Series 1997 1/N1 Rapid Amortization Period, (ii) the date on
which the Class A-1 Notes are fully paid, (iii) the Series 1997 1/N1 Termination
Date, and (iv) the termination of the Indenture.
"Class A-1 Controlled Distribution Amount" means, with respect to
any Related Month during the Class A-1 Controlled Amortization Period, an amount
equal to the sum of the Class A-1 Controlled Amortization Amount and any Class
A-1 Carryover Controlled Amortization Amount for such Related Month.
"Class A-1 Controlled Distribution Amount Deficiency" has the
meaning specified in Section 4.10(a)(i) of this Supplement.
"Class A-1 Expected Final Payment Date" means the February 2001
Payment Date.
"Class A-1 Initial Invested Amount" means the aggregate initial
principal amount of Class A-1 Notes, which is $230,021,000.
"Class A-1 Invested Amount" means, on any date of determination, an
amount equal to (a) the Class A-1 Initial Invested Amount, minus (b) the amount
of principal payments made to Class A-1 Noteholders on or prior to such date,
minus (c) all Losses and Lease Payment Losses allocated to the Class A-1
Noteholders on or prior to such date, plus (d) all Recoveries and Lease Payment
Recoveries allocated to the Class A-1 Noteholders on or prior to such date.
"Class A-1 Noteholder" means the Person in whose name a Class A-1
Note is registered in the Note Register.
"Class A-1 Notes" means any one of the [_____]% Rental Car Asset
Backed Notes, Class A-1, executed by RCFC and authenticated and delivered by or
on behalf of the Trustee, substantially in the form of Exhibit A-1, Exhibit A-4
or Exhibit A-7. Definitive Class A-1 Notes shall have such insertions and
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deletions as are necessary to give effect to the provisions of Section 2.18 of
the Base Indenture.
"Class A-1 Rate" means, for any Series 1997 1/N1 Interest Period,
[__]% per annum; provided, however, that the Class A-1 Rate shall in no event be
higher than the maximum rate permitted by applicable law.
"Class A-2 Carryover Controlled Amortization Amount" means, with
respect to the Class A-2 Notes for any Related Month during the Class A-2
Controlled Amortization Period, (i) the excess, if any, of the Class A-2
Controlled Distribution Amount payable on the Payment Date occurring in the
Related Month over the principal amount distributed on such Payment Date with
respect to the Class A-2 Notes pursuant to Section 4.10(a) of this Supplement,
plus (ii) the unpaid amount, if any, of the Class A-2 Carryover Controlled
Amortization Amount for the previous Related Month; provided, however, that for
the first Related Month in the Class A-2 Controlled Amortization Period, the
Class A-2 Carryover Controlled Amortization Amount shall be zero.
"Class A-2 Controlled Amortization Amount" means an amount equal to
$34,077,222.
"Class A-2 Controlled Amortization Period" means the period
commencing on June 30, 2002, (or, if such day is not a Business Day, the
Business Day last preceding such day), and continuing to the earliest of (i) the
commencement of the Series 1997 1/N1 Rapid Amortization Period, (ii) the date on
which the Class A-2 Notes are fully paid, (iii) the Series 1997 1/N1 Termination
Date, and (iv) the termination of the Indenture.
"Class A-2 Controlled Distribution Amount" means, with respect to
any Related Month during the Class A-2 Controlled Amortization Period, an amount
equal to the sum of the Class A-2 Controlled Amortization Amount and any Class
A-2 Carryover Controlled Amortization Amount for such Related Month.
"Class A-2 Controlled Distribution Amount Deficiency" has the
meaning specified in Section 4.10(a)(i) of this Supplement.
"Class A-2 Expected Final Payment Date" means the April 2003 Payment
Date.
"Class A-2 Initial Invested Amount" means the aggregate initial
principal amount of Class A-2 Notes, which is $306,695,000.
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"Class A-2 Invested Amount" means, when used with respect to any
date of determination, an amount equal to (a) the Class A-2 Initial Invested
Amount, minus (b) the amount of principal payments made to Class A-2 Noteholders
on or prior to such date, minus (c) all Losses and Lease Payment Losses
allocated to the Class A-2 Noteholders on or prior to such date, plus (d) all
Recoveries and Lease Payment Recoveries allocated to the Class A-2 Noteholders
on or prior to such date.
"Class A-2 Noteholder" means the Person in whose name a Class A-2
Note is registered in the Note Register.
"Class A-2 Notes" means any one of the [____]% Rental Car Asset
Backed Notes, Class A-2, executed by RCFC and authenticated and delivered by or
on behalf of the Trustee, substantially in the form of Exhibit A-2, Exhibit A-5
or Exhibit A-8. Definitive Class A-2 Notes shall have such insertions and
deletions as are necessary to give effect to the provisions of Section 2.18 of
the Base Indenture.
"Class A-2 Rate" means, for any Series 1997 1/N1 Interest Period,
[____]% per annum; provided, however, that the Class A-2 Rate shall in no event
be higher than the maximum rate permitted by applicable law.
"Class A-3 Carryover Controlled Amortization Amount" means, with
respect to the Class A-3 Notes for any Related Month during the Class A-3
Controlled Amortization Period, (i) the excess, if any, of the Class A-3
Controlled Distribution Amount payable on the Payment Date occurring in the
Related Month over the principal amount distributed on such Payment Date with
respect to the Class A-3 Notes pursuant to Section 4.10(a) of this Supplement,
plus (ii) the unpaid amount, if any, of the Class A-3 Carryover Controlled
Amortization Amount for the previous Related Month; provided, however, that for
the first Related Month in the Class A-3 Controlled Amortization Period, the
Class A-3 Carryover Controlled Amortization Amount shall be zero.
"Class A-3 Controlled Amortization Amount" means an amount equal to
$12,778,917.
"Class A-3 Controlled Amortization Period" means the period
commencing on April 30, 2004, (or, if such day is not a Business Day, the
Business Day last preceding such day), and continuing to the earliest of (i) the
commencement of the Series 1997 1/N1 Rapid Amortization Period, (ii) the date on
which the Class A-3 Notes are fully paid, (iii) the Series 1997 1/N1 Termination
Date, and (iv) the termination of the Indenture.
"Class A-3 Controlled Distribution Amount" means, with respect to
any Related Month during the Class A-3 Controlled Amortization Period, an amount
equal to the sum of the Class A-3
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Controlled Amortization Amount and any Class A-3 Carryover Controlled
Amortization Amount for such Related Month.
"Class A-3 Controlled Distribution Amount Deficiency" has the
meaning specified in Section 4.10(a)(i) of this Supplement.
"Class A-3 Expected Final Payment Date" means the May, 2005 Payment
Date.
"Class A-3 Initial Invested Amount" means the aggregate initial
principal amount of Class A-3 Notes, which is $153,347,000.
"Class A-3 Invested Amount" means, on any date of determination, an
amount equal to (a) the Class A-3 Initial Invested Amount, minus (b) the amount
of principal payments made to Class A-3 Noteholders on or prior to such date,
minus (c) all Losses and Lease Payment Losses allocated to the Class A-3
Noteholders on or prior to such date, plus (d) all Recoveries and Lease Payment
Recoveries allocated to the Class A-3 Noteholders on or prior to such date.
"Class A-3 Noteholder" means the Person in whose name a Class A-3
Note is registered in the Note Register.
"Class A-3 Notes" means any one of the [____]% Rental Car Asset
Backed Notes, Class A-3, executed by RCFC and authenticated and delivered by or
on behalf of the Trustee, substantially in the form of Exhibit A-3, Exhibit A-6
or Exhibit A-9. Definitive Class A-3 Notes shall have such insertions and
deletions as are necessary to give effect to the provisions of Section 2.18 of
the Base Indenture.
"Class A-3 Rate" means, for any Series 1997 1/N1 Interest Period,
[___]% per annum; provided, however, that the Class A-3 Rate shall in no event
be higher than the maximum rate permitted by applicable law.
"Class B Controlled Distribution Amount Deficiency" has the meaning
specified in Section 4.10(b)(i) of this Supplement.
"Class B Deficiency Amount" has the meaning specified in Section 4.8
of this Supplement.
"Class B Distribution Account" has the meaning specified in Section
4.13(a) of this Supplement.
"Class B Distribution Account Collateral" has the meaning specified
in Section 4.13(d) of this Supplement.
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<PAGE> 16
"Class B Enhancement Amount" means the sum of (a) the Series 1997
1/N1 Available Subordinated Amount, plus (b) the Class C Invested Amount, plus
(c) Series 1997 1/N1 Letter of Credit Amount.
"Class B Interest Amount" has the meaning specified in Section
4.8(b) of this Supplement.
"Class B Invested Amount" means, on any date of determination, the
sum of the Class B-1 Invested Amount, the Class B-2 Invested Amount and the
Class B-3 Invested Amount for such date of determination.
"Class B Monthly Interest Shortfall" means as of any Payment Date
and with respect to any or all of the classes of Class B Notes, as the context
requires, the excess, if any, of the Class B Interest Amount for the Class B-1
Notes, the Class B-2 Notes or the Class B-3 Notes (as applicable) and any unpaid
Class B Deficiency Amounts for the Class B-1 Notes, the Class B-2 Notes or the
Class B-3 Notes (as applicable) (together with accrued interest on such unpaid
Class B Deficiency Amounts) over the amount withdrawn from the Series 1997 1/N1
Accrued Interest Account and deposited in the Class B Distribution Account on
such Payment Date pursuant to Section 4.7(b) of this Supplement.
"Class B Non-Program Enhancement Percentage" means, with respect to
any date of determination, the greatest of (a) an amount equal to (i) 21.5%
minus (ii) the Class C Percentage as of such date, (b) an amount equal to (i)
100% minus (ii) an amount equal to (x) the Market Value Adjustment Percentage
minus (y) 21.5%, minus (iii) the Class C Percentage as of such date, and (c)
15.25%.
"Class B Note Rate" means, for any Series 1997 1/N1 Interest Period,
the Class B-1 Rate, the Class B-2 Rate or the Class B-3 Rate, as applicable.
"Class B Noteholder" means the Person in whose name a Class B Note
is registered in the Note Register.
"Class B Notes" means the Class B-1 Notes, the Class B-2 Notes and
the Class B-3 Notes.
"Class B Percentage" means, with respect to any date of
determination, the percentage equivalent of a fraction, the numerator of which
is (1) the Class B Invested Amount on such date and the denominator of which is
(2) an amount equal to the sum of (x) the Invested Amount for the Series 1997
1/N1 Notes on such date (y) the Series 1997 1/N1 Available Subordinated Amount
on such date.
"Class B Program Enhancement Percentage" means, with respect to any
date of determination, the greater of (a) an
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<PAGE> 17
amount equal to (i) 14.5% minus (ii) the Class C Percentage as of such date,
and (b) 10.0%.
"Class B-1 Carryover Controlled Amortization Amount" means, with
respect to the Class B-1 Notes for any Related Month during the Class B-1
Controlled Amortization Period, (i) the excess, if any, of the Class B-1
Controlled Distribution Amount payable on the Payment Date occurring in the
Related Month over the principal amount distributed on such Payment Date with
respect to the Class B-1 Notes pursuant to Section 4.10(b) of this Supplement
plus (ii) the unpaid amount, if any, of the Class B-1 Carryover Controlled
Amortization Amount for the previous Related Month; provided, however, that for
the first Related Month in the Class B-1 Controlled Amortization Period, the
Class B-1 Carryover Controlled Amortization Amount shall be zero.
"Class B-1 Controlled Amortization Amount" means an amount equal to
$17,759,000.
"Class B-1 Controlled Amortization Period" means the period
commencing on January 31, 2001 (or, if such day is not a Business Day, the
Business Day last preceding such day) and continuing to the earliest of (i) the
commencement of the Series 1997 1/N1 Rapid Amortization Period, (ii) the date on
which the Class B-1 Notes are fully paid, (iii) the Series 1997 1/N1 Termination
Date, and (iv) the termination of the Indenture.
"Class B-1 Controlled Distribution Amount" means, with respect to
any Related Month during the B-1 Controlled Amortization Period, an amount equal
to the sum of the Class B-1 Controlled Amortization Amount and any Class B-1
Carryover Controlled Amortization Amount for such Related Month.
"Class B-1 Controlled Distribution Amount Deficiency" has the
meaning specified in Section 4.10(b)(i) of this Supplement.
"Class B-1 Expected Final Payment Date" means the May 2001 Payment
Date.
"Class B-1 Initial Invested Amount" means the aggregate initial
principal amount of the Class B-1 Notes, which is $53,277,000.
"Class B-1 Invested Amount" means, when used with respect to any
date of determination, an amount equal to (a) the Class B-1 Initial Invested
Amount minus (b) the amount of principal payments made to Class B-1 Noteholders
on or prior to such date, minus (c) all Losses and Lease Payment Losses
allocated to the Class B-1 Noteholders on or prior to such date, plus (d) all
Recoveries and Lease Payment Recoveries allocated to the Class B-1 Noteholders
on or prior to such date.
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<PAGE> 18
"Class B-1 Noteholder" means the Person in whose name a Class B-1
Note is registered in the Note Register.
"Class B-1 Notes" means any one of the [_____]% Rental Car Asset
Backed Notes, Class B-1, executed by RCFC and authenticated and delivered by or
on behalf of the Trustee, substantially in the form of Exhibit B-1, Exhibit B-4
or Exhibit B-7. Definitive Class B-1 Notes shall have such insertions and
deletions as are necessary to give effect to the provisions of Section 2.18 of
the Base Indenture.
"Class B-1 Rate" means, for any Series 1997 1/N1 Interest Period,
____% per annum; provided, however, that the Class B-1 Rate shall in no event be
higher than the maximum rate permitted by applicable law.
"Class B-2 Carryover Controlled Amortization Amount" means, with
respect to the Class B-2 Notes for any Related Month during the Class B-2
Controlled Amortization Period, (i) the excess, if any, of the Class B-2
Controlled Distribution Amount payable on the Payment Date occurring in the
Related Month over the principal amount distributed on such Payment Date with
respect to the Class B-2 Notes pursuant to the Indenture plus (ii) the unpaid
amount, if any, of the Class B-2 Carryover Controlled Amortization Amount for
the previous Related Month; provided, however, that for the first Related Month
in the Class B-2 Controlled Amortization Period, the Class B-2 Carryover
Controlled Amortization Amount shall be zero.
"Class B-2 Controlled Amortization Amount" means an amount equal
$23,678,667.
"Class B-2 Controlled Amortization Period" means the period
commencing on March 31, 2003 (or, if such day is not a Business Day, the
Business Day last preceding such day) and continuing to the earliest of (i) the
commencement of the Series 1997 1/N1 Rapid Amortization Period, (ii) the date on
which the Class B-2 Notes are fully paid, (iii) the Series 1997 1/N1 Termination
Date, and (iv) the termination of the Indenture.
"Class B-2 Controlled Distribution Amount" means, with respect to
any Related Month during the B-2 Controlled Amortization Period, an amount equal
to the sum of the Class B-2 Controlled Amortization Amount and any Class B-2
Carryover Controlled Amortization Amount for such Related Month.
"Class B-2 Controlled Distribution Amount Deficiency" has the
meaning specified on Section 4.10(b)(i) of this Supplement.
"Class B-2 Expected Final Payment Date" means the July 2003 Payment
Date.
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<PAGE> 19
"Class B-2 Initial Invested Amount" means the aggregate initial
principal amount of the Class B-2 Notes, which is $71,036,000.
"Class B-2 Invested Amount" means, when used with respect to any
date of determination, an amount equal to (a) the Class B-2 Initial Invested
Amount minus (b) the amount of principal payments made to Class B-2 Noteholders
on or prior to such date, minus (c) all Losses and Lease Payment Losses
allocated to the Class B-2 Noteholders on or prior to such date, plus (d) all
Recoveries and Lease Payment Recoveries allocated to the Class B-2 Noteholders
on or prior to such date.
"Class B-2 Noteholder" means the Person on whose name a Class B-2
Note is registered in the Note Register.
"Class B-2 Notes" means any one of the [___]% Rental Car Asset
Backed Notes, Class B-2, executed by RCFC and authenticated and delivered by or
on behalf of the Trustee, substantially in the form of Exhibit B-2, Exhibit B-5
or Exhibit B-8. Definitive Class B-2 Notes shall have such insertions and
deletions as are necessary to give effect to the provisions of Section 2.18 of
the Base Indenture.
"Class B-2 Rate" means, for any Series 1997 1/N1 Interest Period,
____% per annum; provided, however, that the Class B-2 Rate shall in no event be
higher than the maximum rate permitted by applicable law.
"Class B-3 Carryover Controlled Amortization Amount" means, with
respect to the Class B-3 Notes for any Related Month during the Class B-3
Controlled Amortization Period, (i) the excess, if any, of the Class B-3
Controlled Distribution Amount payable on the Payment Date occurring in the
Related Month over the principal amount distributed on such Payment Date with
respect to the Class B-3 Notes pursuant to this Supplement plus (ii) the unpaid
amount, if any, of the Class B-3 Carryover Controlled Amortization Amount for
the previous Related Month; provided, however, that for the first Related Month
in the Class B-3 Controlled Amortization Period, the Class B-3 Carryover
Controlled Amortization Amount shall be zero.
"Class B-3 Controlled Amortization Amount" means an amount equal
$11,839,333.
"Class B-3 Controlled Amortization Period" means the period
commencing on April 30, 2005 (or, if such day is not a Business Day, the
Business Day last preceding such day) and continuing to the earliest of (i) the
commencement of the Series 1997 1/N1 Rapid Amortization Period, (ii) the date on
which the Class B-3 Notes are fully paid, (iii) the Series 1997 1/N1 Termination
Date, and (iv) the termination of the Indenture.
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<PAGE> 20
"Class B-3 Controlled Distribution Amount" means, with respect to
any Related Month during the B-3 Controlled Amortization Period, an amount equal
to the sum of the Class B-3 Controlled Amortization Amount and any Class B-3
Carryover Controlled Amortization Amount for such Related Month.
"Class B-3 Controlled Distribution Amount Deficiency" has the
meaning specified on Section 4.10(b)(i) of this Supplement.
"Class B-3 Expected Final Payment Date" means the August 2005
Payment Date.
"Class B-3 Initial Invested Amount" means the aggregate initial
principal amount of the Class B-3 Notes, which is $35,518,000.
"Class B-3 Invested Amount" means, when used with respect to any
date of determination, an amount equal to (a) the Class B-3 Initial Invested
Amount minus (b) the amount of principal payments made to Class B-3 Noteholders
on or prior to such date, minus (c) all Losses and Lease Payment Losses
allocated to the Class B-3 Noteholders on or prior to such date, plus (d) all
Recoveries and Lease Payment Recoveries allocated to the Class B-3 Noteholders
on or prior to such date.
"Class B-3 Noteholder" means the Person in whose name a Class B-3
Note as registered on the Note Register.
"Class B-3 Notes" means any one of the [_____]% Rental Car Asset
Backed Notes, Class B-3, executed by RCFC and authenticated and delivered by or
on behalf of the Trustee, substantially in the form of Exhibit B-3, Exhibit B-6
or Exhibit B-9. Definitive Class B-3 Notes shall have such insertions and
deletions as are necessary to give effect to the provisions of Section 2.18 of
the Base Indenture.
"Class B-3 Rate" means, for any Series 1997 1/N1 Interest Period,
____% per annum; provided, however, that the Class B-2 Rate shall in no event be
higher than the maximum rate permitted by applicable law.
"Class C Controlled Distribution Amount Deficiency" has the meaning
specified in Section 4.10(c)(i) of this Supplement.
"Class C Deficiency Amount" has the meaning specified in Section 4.8
of this Supplement.
"Class C Distribution Account" has the meaning specified in Section
4.15(a) of this Supplement.
"Class C Distribution Account Collateral" has the meaning specified
in Section 4.15(d) of this Supplement.
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<PAGE> 21
"Class C Enhancement Amount" means the sum of (a) the Series 1997
1/N1 Available Subordinated Amount plus (b) Series 1997 1/N1 Letter of Credit
Amount.
"Class C Interest Amount" has the meaning specified in Section
4.8(c) of this Supplement.
"Class C Invested Amount" means, on any date of determination, the
sum of the Class C-1 Invested Amount, the Class C-2 Invested Amount and the
Class C-3 Invested Amount for such date of determination.
"Class C Monthly Interest Shortfall" means as of any Payment Date
and with respect to any or all of the classes of Class C Notes, as the context
requires, the excess, if any, of the Class C Interest Amount for the Class C-1
Notes, the Class C-2 Notes or the Class C-3 Notes (as applicable) and any unpaid
Class C Deficiency Amounts for the Class C-1 Notes, the Class C-2 Notes or the
Class C-3 Notes (as applicable) (together with accrued interest on such unpaid
Class C Deficiency Amounts) over the amount withdrawn from the Series 1997 1/N1
Accrued Interest Account and deposited in the Class C Distribution Account on
such Payment Date pursuant to Section 4.7(b) of this Supplement.
"Class C Non-Program Enhancement Percentage" means, with respect to
any date of determination, the greater of (a) 15.25% and (b) an amount equal to
(i) 100% minus (ii) the Market Value Adjustment Percentage as of such date of
determination minus 15.25%.
"Class C Note Rate" means, for any Series 1997 1/N1 Interest Period,
the Class C-1 Rate, the Class C-2 Rate or the Class C-3 Rate, as applicable.
"Class C Noteholder" means the Person in whose name a Class C Note
is registered in the Note Register.
"Class C Notes" means the Class C-1 Notes, the Class C-2 Notes and
the Class C-3 Notes.
"Class C Percentage" means, with respect to any date of
determination, the percentage equivalent of a fraction, the numerator of which
is (1) the Class C Invested Amount on such date and the denominator of which is
(2) the Invested Amount for the Series 1997 1/N1 Notes on such date plus the
Series 1997 1/N1 Available Subordinated Amount on such date.
"Class C Program Enhancement Percentage" means 10.0%.
"Class C-1 Carryover Controlled Amortization Amount" means, with
respect to the Class C-1 Notes for any Related Month during the Class C-1
Controlled Amortization Period, (i) the
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excess, if any, of the Class C-1 Controlled Distribution Amount payable on the
Payment Date occurring in the Related Month over the principal amount
distributed on such Payment Date with respect to the Class C-1 Notes pursuant to
Section 4.10(c) of this Supplement plus (ii) the unpaid amount, if any, of the
Class C-1 Carryover Controlled Amortization Amount for the previous Related
Month; provided, however, that for the first Related Month in the Class C-1
Controlled Amortization Period, the Class C-1 Carryover Controlled Amortization
Amount shall be zero.
"Class C-1 Controlled Amortization Amount" means an amount equal to
$16,702,000.
"Class C-1 Controlled Amortization Period" means the period
commencing on April 30, 2001 (or, if such day is not a Business Day, the
Business Day last preceding such day) and continuing to the earliest of (i) the
commencement of the Series 1997 1/N1 Rapid Amortization Period, (ii) the date on
which the Class C-1 Notes are fully paid, (iii) the Series 1997 1/N1 Termination
Date, and (iv) the termination of the Indenture.
"Class C-1 Controlled Distribution Amount" means, with respect to
any Related Month during the C-1 Controlled Amortization Period, an amount equal
to the sum of the Class C-1 Controlled Amortization Amount and any Class C-1
Carryover Controlled Amortization Amount for such Related Month.
"Class C-1 Controlled Distribution Amount Deficiency" has the
meaning specified in Section 4.10(c)(i) of this Supplement.
"Class C-1 Expected Final Payment Date" means the June 2001 Payment
Date.
"Class C-1 Initial Invested Amount" means the aggregate initial
principal amount of the Class C-1 Notes, which is $16,702,000.
"Class C-1 Invested Amount" means, when used with respect to any
date of determination, an amount equal to (a) the Class C-1 Initial Invested
Amount minus (b) the amount of principal payments made to Class C-1 Noteholders
on or prior to such date, minus (c) all Losses and Lease Payment Losses
allocated to the Class C-1 Noteholders on or prior to such date, plus (d) all
Recoveries and Lease Payment Recoveries allocated to the Class C-1 Noteholders
on or prior to such date.
"Class C-1 Noteholder" means the Person in whose name a Class C-1
Note is registered in the Note Register.
"Class C-1 Notes" means any one of the [_____]% Rental Car Asset
Backed Notes, Class C-1, executed by RCFC and authenticated and delivered by or
on behalf of the Trustee,
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<PAGE> 23
substantially in the form of Exhibit C-1, Exhibit C-4 or Exhibit C-7. Definitive
Class C-1 Notes shall have such insertions and deletions as are necessary to
give effect to the provisions of Section 2.18 of the Base Indenture.
"Class C-1 Rate" means, for any Series 1997 1/N1 Interest Period,
____% per annum; provided, however, that the Class C-1 Rate shall in no event be
higher than the maximum rate permitted by applicable law.
"Class C-2 Carryover Controlled Amortization Amount" means, with
respect to the Class C-2 Notes for any Related Month during the Class C-2
Controlled Amortization Period, (i) the excess, if any, of the Class C-2
Controlled Distribution Amount payable on the Payment Date occurring in the
Related Month over the principal amount distributed on such Payment Date with
respect to the Class C-2 Notes pursuant to the Indenture plus (ii) the unpaid
amount, if any, of the Class C-2 Carryover Controlled Amortization Amount for
the previous Related Month; provided, however, that for the first Related Month
in the Class C-2 Controlled Amortization Period, the Class C-2 Carryover
Controlled Amortization Amount shall be zero.
"Class C-2 Controlled Amortization Amount" means an amount equal
$22,269,000.
"Class C-2 Controlled Amortization Period" means the period
commencing on June 30, 2003 (or, if such day is not a Business Day, the Business
Day last preceding such day) and continuing to the earliest of (i) the
commencement of the Series 1997 1/N1 Rapid Amortization Period, (ii) the date on
which the Class C-2 Notes are fully paid, (iii) the Series 1997 1/N1 Termination
Date, and (iv) the termination of the Indenture.
"Class C-2 Controlled Distribution Amount" means, with respect to
any Related Month during the C-2 Controlled Amortization Period, an amount equal
to the sum of the Class C-2 Controlled Amortization Amount and any Class C-2
Carryover Controlled Amortization Amount for such Related Month.
"Class C-2 Controlled Distribution Amount Deficiency" has the
meaning specified on Section 4.10(c)(i) of this Supplement.
"Class C-2 Expected Final Payment Date" means the August 2003
Payment Date.
"Class C-2 Initial Invested Amount" means the aggregate initial
principal amount of the Class C-2 Notes, which is $22,269,000.
"Class C-2 Invested Amount" means, when used with respect to any
date of determination, an amount equal to (a) the
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<PAGE> 24
Class C-2 Initial Invested Amount minus (b) the amount of principal payments
made to Class C-2 Noteholders on or prior to such date, minus (c) all Losses and
Lease Payment Losses allocated to the Class C-2 Noteholders on or prior to such
date, plus (d) all Recoveries and Lease Payment Recoveries allocated to the
Class C-2 Noteholders on or prior to such date.
"Class C-2 Noteholder" means the Person in whose name a Class C-2
Note is registered in the Note Register.
"Class C-2 Notes" means any one of the [___]% Rental Car Asset
Backed Notes, Class C-2, executed by RCFC and authenticated and delivered by or
on behalf of the Trustee, substantially in the form of Exhibit C-2, Exhibit C-5
or Exhibit C-8. Definitive Class C-2 Notes shall have such insertions and
deletions as are necessary to give effect to the provisions of Section 2.18 of
the Base Indenture.
"Class C-2 Rate" means, for any Series 1997 1/N1 Interest Period,
____% per annum; provided, however, that the Class B-2 Rate shall in no event be
higher than the maximum rate permitted by applicable law.
"Class C-3 Carryover Controlled Amortization Amount" means, with
respect to the Class C-3 Notes for any Related Month during the Class C-3
Controlled Amortization Period, (i) the excess, if any, of the Class C-3
Controlled Distribution Amount payable on the Payment Date occurring in the
Related Month over the principal amount distributed on such Payment Date with
respect to the Class C-3 Notes pursuant to the Indenture plus (ii) the unpaid
amount, if any, of the Class C-3 Carryover Controlled Amortization Amount for
the previous Related Month; provided, however, that for the first Related Month
in the Class B-3 Controlled Amortization Period, the Class C-3 Carryover
Controlled Amortization Amount shall be zero.
"Class C-3 Controlled Amortization Amount" means an amount equal
$11,135,000.
"Class C-3 Controlled Amortization Period" means the period
commencing on July 31, 2005 (or, if such day is not a Business Day, the Business
Day last preceding such day) and continuing to the earliest of (i) the
commencement of the Series 1997 1/N1 Rapid Amortization Period, (ii) the date on
which the Class C-3 Notes are fully paid, (iii) the Series 1997 1/N1 Termination
Date, and (iv) the termination of the Indenture.
"Class C-3 Controlled Distribution Amount" means, with respect to
any Related Month during the Series 1997 1/N1 Controlled Amortization Period, an
amount equal to the sum of the Class C-3 Controlled Amortization Amount and any
Class C-3 Carryover Controlled Amortization Amount for such Related Month.
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<PAGE> 25
"Class C-3 Controlled Distribution Amount Deficiency" has the
meaning specified on Section 4.10(c)(i) of this Supplement.
"Class C-3 Expected Final Payment Date" means the September 2005
Payment Date.
"Class C-3 Initial Invested Amount" means the aggregate initial
principal amount of the Class C-3 Notes, which is $11,135,000.
"Class C-3 Invested Amount" means, when used with respect to any
date of determination, an amount equal to (a) the Class C-3 Initial Invested
Amount minus (b) the amount of principal payments made to Class C-3 Noteholders
on or prior to such date, minus (c) all Losses and Lease Payment Losses
allocated to the Class C-3 Noteholders on or prior to such date, plus (d) all
Recoveries and Lease Payment Recoveries allocated to the Class C-3 Noteholders
on or prior to such date.
"Class C-3 Noteholder" means the Person in whose name a Class C-3
Note is registered in the Note Register.
"Class C-3 Notes" means any one of the [_____]% Rental Car Asset
Backed Notes, Class C-3, executed by RCFC and authenticated and delivered by or
on behalf of the Trustee, substantially in the form of Exhibit C-3, Exhibit C-6
or Exhibit C-9. Definitive Class C-3 Notes shall have such insertions and
deletions as are necessary to give effect to the provisions of Section 2.18 of
the Base Indenture.
"Class C-3 Rate" means, for any Series 1997 1/N1 Interest Period,
____% per annum; provided, however, that the Class C-2 Rate shall in no event be
higher than the maximum rate permitted by applicable law.
"Collections" means all payments including, without limitation, all
Recoveries and Lease Payment Recoveries, by, or on behalf of (i) a Lessee under
the Master Lease, (ii) any Manufacturer, under its Vehicle Disposition Program
or any incentive program, with respect to any Group I Vehicles, (iii) any other
Person as proceeds from the sale of Group I Vehicles, payment of insurance
proceeds, whether such payments are in the form of cash, checks, wire transfers
or other form of payment and whether in respect of principal, interest,
repurchase price, fees, expenses or otherwise and (iv) all amounts earned on
Permitted Investments arising out of funds in the Group I Collection Account and
in the Master Collateral Account (to the extent allocable to the Trustee on
behalf of the holders of the Group I Series of Notes as Beneficiary thereunder).
"Condition Report" means a condition report with respect to a Group
I Vehicle, signed and dated by a Lessee or a
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<PAGE> 26
Franchisee and any Manufacturer or its agent in accordance with the applicable
Vehicle Disposition Program.
"Controlled Distribution Amount" means the Class A-1 Controlled
Distribution Amount, the Class A-2 Controlled Distribution Amount, the Class A-3
Controlled Distribution Amount, the Class B-1 Controlled Distribution Amount,
the Class B-2 Controlled Distribution Amount, the Class B-3 Controlled
Distribution Amount, the Class C-1 Controlled Distribution Amount, the Class C-2
Controlled Distribution Amount and the Class C-3 Controlled Distribution Amount,
collectively.
"Daily Report" is defined in Section 24.4(a) of the Master Lease.
"DCR" means Duff & Phelps Credit Rating Co.
"Defaulting Manufacturer" is defined in Section 18 of the Master
Lease.
"Demand Note" means that certain Demand Note, dated as of December
__, 1997, made by DTAG to RCFC in substantially the attached as Exhibit E to
this Supplement.
"Depreciation Charge" means, for any date of determination, (a) with
respect to any Program Vehicle leased under the Master Lease, the scheduled
daily depreciation charge for such Vehicle set forth by the Manufacturer in its
Vehicle Disposition Program for such Vehicle, and (b) with respect to any
Non-Program Vehicle leased under the Master Lease, (i) the scheduled daily
depreciation charge for such Vehicle set forth by the Servicer in the
Depreciation Schedule for such Vehicle plus (ii) as of each Due Date, the
Additional Depreciation Charge allocable to such Non-Program Vehicle on such Due
Date (which Additional Depreciation Charge shall, for purposes of determining
the Monthly Base Rent payable on such Due Date, be deemed to have accrued during
the Related Month). If such charge is expressed as a percentage, the
Depreciation Charge for such Vehicle for such day shall be such percentage
multiplied by the Capitalized Cost for such Vehicle.
"Depreciation Schedule" means a schedule of estimated daily
depreciation prepared by the applicable Servicer [Master Servicer], and revised
from time to time in the applicable Servicer's [Master Servicer's] sole
discretion, with respect to each type of Non-Program Vehicle that is an Eligible
Vehicle and that is purchased, financed or refinanced by RCFC.
"Dollar" means Dollar Rent A Car Systems, Inc., successor by merger
to Dollar Systems Inc., a Delaware corporation.
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<PAGE> 27
"DTAG" means Dollar Thrifty Automotive Group, Inc., a Delaware
corporation.
"Eligible Franchisee" means, with respect to a Lessee, a Franchisee
(all of whose rental offices are located in the United States) which meets the
normal credit and other approval criteria of such Lessee, as applicable, and
which may be an affiliate of such Lessee.
"Eligible Manufacturer" means, with respect to Program Vehicles,
Chrysler, General Motors, Ford, Honda and Toyota, and with respect to
Non-Program Vehicles, Chrysler, General Motors, Ford, Honda, Mazda, Nissan and
Toyota, and, in each case, any other Manufacturer that (a) has been approved by
each of the Rating Agencies then rating the Group I Series of Notes or has an
Eligible Vehicle Disposition Program that has been reviewed by the Rating
Agencies and the Rating Agencies have indicated that the inclusion of such
Manufacturer's Vehicles under the Master Lease will not adversely affect the
then current rating of any Group I Series of Notes, and (b) has been approved by
each Enhancement Provider, if any; provided, however, that upon the occurrence
of a Manufacturer Event of Default with respect to such Manufacturer, such
Manufacturer shall no longer qualify as an Eligible Manufacturer.
"Eligible Vehicle" means, on any date of determination, a Group I
Vehicle manufactured by an Eligible Manufacturer (determined at the time of the
acquisition, financing or refinancing thereof) and satisfying any further
eligibility requirements specified by the Rating Agencies or in any Group I
Series Supplement (other than with respect to the Maximum Non-Program
Percentage and the Maximum Manufacturer Percentage), or with respect to which
all such eligibility requirements not otherwise satisfied have been duly waived
by the Required Noteholders in accordance with the terms of the applicable
Series Supplement; provided, however, that in no event may a Group I Vehicle be
an Eligible Vehicle after (x) in the case of a Program Vehicle, the expiration
of the applicable Maximum Term (unless such Vehicle has been designated as a
Non-Program Vehicle pursuant to Section 14 of the Master Lease), or (y) the date
which is twenty four (24) months after the date of the original new vehicle
dealer invoice for such Vehicle.
"Excess Damage Charges" means, with respect to any Program Vehicle,
the amount charged to RCFC (or the applicable Lessee), or deducted from the
Repurchase Price or Guaranteed Payment, by the Manufacturer of such Vehicle due
to damage over a prescribed limit to the Vehicle at the time that the Vehicle is
disposed of at Auction or turned in to such Manufacturer or its agent for
repurchase, in either case pursuant to the applicable Vehicle Disposition
Program.
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"Excess Funding Accounts" means, collectively, as of any date, the
Series 1997 1/N1 Excess Funding Account and the corresponding account or
accounts designated as such with respect to each additional Group I Series of
Notes as of such date.
"Excess Mileage Charges" means, with respect to any Program Vehicle,
the amount charged to RCFC (or the applicable Lessee), or deducted from the
Repurchase Price, by the Manufacturer of such Vehicle due to the fact that such
Vehicle has mileage over a prescribed limit at the time that such Vehicle is
disposed of at Auction or turned in to such Manufacturer or its agent for
repurchase, in either case pursuant to the applicable Vehicle Disposition
Program.
"Existing Fleet" means with respect to Vehicles leased under the
Master Lease, the Eligible Vehicles owned by and titled in the name of Dollar on
the Lease Commencement Date and refinanced by RCFC under the Master Lease
pursuant to the initial Vehicle Order of Dollar.
"Financed Vehicle" means an Eligible Vehicle that is (a) part of the
Existing Fleet or (b) a Texas Vehicle.
"Financing Lease" means the Master Lease supplemented by Annex B to
the Master Lease.
"Ford" means Ford Motor Company, a [ ].
"Franchisee" means a franchisee of a Lessee.
"General Motors" means General Motors Corporation, a [ ]
corporation.
"Group I Collateral" means the Master Lease and all payments made
thereunder, the Group I Vehicles, the rights under Manufacturer Programs in
respect of Group I Vehicles, any other Master Collateral related to Group I
Vehicles, the Group I Collection Account and all proceeds of the foregoing.
"Group I Collection Account" will have the meaning set forth
therefore in Section 4.6(a) hereof.
"Group I Monthly Servicing Fee" means, on any date of determination,
1/12 of 1% of the Aggregate Invested Amount as of the preceding Payment Date,
after giving effect to any payments or allocations made on such date; provided,
however, that if a Rapid Amortization Period shall occur and be continuing and
if DTAG is no longer the Master Servicer, the Group I Monthly Servicing Fee
shall equal the greater of (x) the product of (i) $[ ] and (ii) the number of
Group I Vehicles as of the last day of the Related Month, and (y) the amount
described in the first clause of this definition.
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"Group I Series of Notes" has the meaning specified in Section 1(d)
hereof.
"Group I Supplemental Servicing Fee" is defined in Section 26.1 of
the Master Lease.
"Group I Vehicle" means, as of any date, a passenger automobile or
truck leased by RCFC to a Lessee under the Master Lease as of such date and
pledged by RCFC under the Master Collateral Agency Agreement for the benefit of
the Trustee (on behalf of the Noteholders), but solely during the Vehicle Term
for such Vehicle.
"Honda" means Honda Motor Company, a [ ] corporation.
"Indemnified Persons" is defined in Section 15.1 of the Master
Lease.
"Initial Acquisition Cost" is defined in Section 2.3 of the Master
Lease.
"Initial Purchaser" means Credit Suisse First Boston Corporation.
"Interest Reset Date" means the first day of the applicable Series
1997 1/N1 Interest Period.
"Invested Amount" means, on any date of determination, the sum of
the Class A Invested Amount, the Class B Invested Amount and the Class C
Invested Amount for such date of determination.
"Issuer" has the meaning specified in the preamble hereto.
"Late Return Payments" is defined in Section 13 of the Master Lease.
"Lease Annex" means Annex A or Annex B to the Master Lease, as
applicable, as such annex may be amended, supplemented, restated or otherwise
modified from time to time in accordance with the terms of the Master Lease.
"Lease Commencement Date" has the meaning specified in Section 3.2
of the Master Lease.
"Lease Event of Default" is defined in Section 17.1 of the Master
Lease.
"Lease Expiration Date" is defined in Section 3.2 of the Master
Lease.
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"Lease Payment Losses" means as of any Payment Date, the amount of
payments due under the Master Lease with respect to the Related Month which were
not paid when due.
"Lease Payment Recoveries" means, as of any Determination Date, an
amount equal to all payments made under the Master Lease since the preceding
Determination Date on account of past due payments under the Master Lease.
"Lessee" means either Thrifty or Dollar, as applicable, in its
capacity as a Lessee under the Master Lease, any Additional Lessee, or any
successor by merger to Thrifty, Dollar or any Additional Lessee, as applicable,
in accordance with Section 25.1 of the Master Lease, or any other permitted
successor or assignee of Thrifty or Dollar, as applicable, in its capacity as
Lessee, or any Additional Lessee, pursuant to Section 16 of the Master Lease.
"Lessee Agreements" means any and all Subleases entered into by any
of the Lessees the subject of which includes any Vehicle leased by the Lessor to
such Lessee under the Master Lease, and any and all other contracts, agreements,
guarantees, insurance, warranties, instruments or certificates entered into or
delivered to such Lessee in connection therewith.
"Lessor" means RCFC, its capacity as the lessor under the Master
Lease, and its successors and assigns in such capacity.
"Liquidation Event of Default" means, so long as such event or
condition continues, any of the following: (a) any event or condition with
respect to RCFC or a Lessee of the type described in Section 8.1(d) of the Base
Indenture, (b) a payment default by RCFC under the Base Indenture as specified
in Sections 8.1(a) and 8.1(b) thereof, or (c) a Lease Event of Default as
specified in Section 8.1(e) thereof (with respect solely to the occurrence of
the Lease Events of Default described in Sections 17.1.1(i), 17.1.2 and 17.1.5
under the Master Lease).
"Losses" means, with respect to any Related Month, the sum (without
duplication) of the following: with respect to Acquired Vehicles (i) all
Manufacturer Late Payment Losses, Manufacturer Event of Default Losses and
Purchaser Late Payment Losses for such Related Month, plus (ii) with respect to
Disposition Proceeds received during the Related Month from the sale or other
disposition of Acquired Vehicles (other than pursuant to a Vehicle Disposition
Program), the excess, if any, of (x) the Net Book Values of such Acquired
Vehicles calculated on the dates of the respective sales or final dispositions
thereof, over (y) (1) the aggregate amount of such Disposition Proceeds received
during the Related Month in respect of Acquired Vehicles by RCFC, the Master
Collateral Agent or the Trustee (including by deposit into the Collection
Account or the Master
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Collateral Account) plus (2) any Termination Payments that have accrued with
respect to such Acquired Vehicles.
"Manufacturer Event of Default" is defined in Section 18 of the
Master Lease.
"Manufacturer Event of Default Losses" means, with respect to any
Related Month, in the event that a Manufacturer Event of Default occurs with
respect to any Manufacturer, all payments that are required to be made (and not
yet made) by such Manufacturer to RCFC with respect to Acquired Vehicles that
are either (i) sold at Auction or returned to such Manufacturer under such
Manufacturer's Vehicle Disposition Program, or (ii) subject to an incentive
program of such Manufacturer; provided that the grace or other similar period
for the determination of such Manufacturer Event of Default expires during such
Related Month.
"Manufacturer Late Payment Losses" with respect to any Related
Month, means all payments required to be made by Manufacturers under such
Manufacturers' Vehicle Disposition Programs and incentive programs with respect
to Acquired Vehicles, which are not made within ninety (90) days after the
related Disposition Dates of such Acquired Vehicles and remain unpaid at the end
of such Related Month, but only to the extent that such 90 day periods expire
during such Related Month; provided that any payments considered hereunder shall
be net of amounts that are the subject of a good faith dispute as evidenced in
writing by the Manufacturer questioning the accuracy of the amounts paid or
payable in respect of any such Acquired Vehicles.
"Market Value" means, with respect to any Non-Program Vehicle as of
any date of determination, the market value of such Non-Program Vehicle's model
class and model year as specified in the Related Month's published National
Automobile Dealers Association, Official Used Car Guide, Central Edition (the
"NADA Guide") for the model class and model year of such Vehicle based on the
average equipment and the average mileage of each Vehicle of such model class
and model year. If such Non-Program Vehicle's model class and model year are not
listed in the NADA Guide published in the Related Month preceding such date of
determination, then the Black Book Official Finance/Lease Guide (the "Lease
Guide") shall be used to estimate the wholesale price of the Non-Program
Vehicle, based on the Non-Program Vehicle's model class and model year or the
closest model class and model year thereto, for purposes of such months for
which the wholesale price for such Vehicle's model class and model year is not
so published in the NADA Guide; provided, however, if the NADA Guide was not
published in the Related Month, then the Lease Guide shall be relied upon in its
place, and if the Lease Guide is unavailable, the Market Value of such Vehicle
shall be based upon such other reasonable methodology as determined by the
Issuer.
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"Market Value Adjustment Percentage" means, as of any date on or
after the third Determination Date following the Series 1997 1/N1 Closing Date,
the lower of (i) the lowest Measurement Month Average of any full Measurement
Month within the preceding 12 calendar months and (ii) a fraction expressed as a
percentage, the numerator of which equals the average of the aggregate Market
Value of Non-Program Vehicles leased under the Master Lease as of the last day
of the Related Month and as of the last day of the two Related Months precedent
thereto and the denominator of which equals the aggregate Net Book Value of such
Non-Program Vehicles as of the immediately preceding Determination Date (or, if
the date of determination is a Determination Date, such date).
"Master Collateral Agency Agreement" means the Amended and Restated
Master Collateral Agency Agreement, dated as of December [__], 1997, among DTAG,
as Master Servicer, RCFC, as grantor, Thrifty and Dollar, as grantors and
servicers, such other grantors as may become parties thereto, various Financing
Sources parties thereto, various Beneficiaries parties thereto and the Master
Collateral Agent, as such agreement may be amended, supplemented, restated or
otherwise modified from time to time in accordance with its terms.
"Master Collateral Agent" means Bankers Trust Company, a New York
banking corporation, in its capacity as master collateral agent under the Master
Collateral Agency Agreement, unless a successor Person shall have become the
master collateral agent pursuant to the applicable provisions of the Master
Collateral Agency Agreement, and thereafter "Master Collateral Agent" shall mean
such successor Person.
"Master Lease" means that certain Master Motor Vehicle Lease and
Servicing Agreement, dated as of December __, 1997, among RCFC, as Lessor,
Thrifty, as a Lessee and Servicer, Dollar, as a Lessee and Servicer, those
additional Subsidiaries and Affiliates of DTAG from time to time becoming
Lessees and Servicers thereunder and DTAG, as guarantor and Master Servicer, as
the same may be amended, supplemented, restated or otherwise modified from time
to time in accordance with its terms.
"Master Servicer" means DTAG, in its capacity as the Master Servicer
under the Master Lease, and its successors and assigns in such capacity in
accordance with the terms of the Master Lease.
"Material Adverse Effect" means, with respect to any occurrence,
event or condition, and any Person, a material adverse effect with respect to:
(a) the business, financial condition, operations or assets of such
Person;
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<PAGE> 33
(b) the ability of the such Person to perform its obligations under
the Master Lease or any other Related Document;
(c) the validity, enforceability or collectibility of amounts
payable to the Master Collateral Agent, the Trustee or the Lessor under the
Master Lease or the other Related Documents;
(d) the status, existence, perfection or first priority of the
interests of the Master Collateral Agent and the Trustee, as applicable, in a
material portion of the Master Collateral or the Collateral, free of any Liens
(other than Permitted Liens);
(e) the ability of the Master Collateral Agent, the Trustee or the
Lessor to liquidate or foreclose against the Collateral and the Master
Collateral; or
(f) the practical realization by the Master Collateral Agent, the
Trustee or the Lessor of any of the material benefits or security afforded by
the Master Lease or any other Related Document.
"Maximum Lease Commitment" means, on any date of determination, the
sum of (i) the Aggregate Principal Balances on such date for all Group I Series
of Notes, plus (ii) with respect to all Group I Series of Notes that provide for
Enhancement in the form of overcollateralization, the sum of the available
subordinated amounts on such date for each such Group I Series of Notes, plus
(iii) the aggregate Net Book Values of all Group I Vehicles leased under the
Master Lease on such date that were acquired, financed or refinanced with funds
other than proceeds of Group I Series of Notes or related available subordinated
amounts, plus (iv) any amounts held in the Retained Distribution Account that
the Lessor commits on or prior such date to invest in new Group I Vehicles for
Leasing under the Master Lease (as evidenced by a Company Order) in accordance
with the terms of the Master Lease and the Indenture.
"Maximum Manufacturer Percentage" means, with respect to any
Eligible Manufacturer, the percentage amount set forth in Schedule 1 hereto (as
such schedule, subject to Rating Agency confirmation, may be amended,
supplemented, restated or otherwise modified from time to time) specified for
each Eligible Manufacturer with respect to Non-Program Vehicles and Program
Vehicles, as applicable, which percentage amount represents the maximum
percentage of Eligible Vehicles which are permitted under the Master Lease to be
Non-Program Vehicles or Program Vehicles, as the case may be, manufactured by
such Manufacturer.
"Maximum Non-Program Percentage" means, with respect to Non-Program
Vehicles, (a) if the average of the Measured Month Averages for any three
Measurement Months during the twelve month period preceding any date of
determination shall be less than
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eighty five percent (85%), 0% or such other percentage amount agreed upon by the
Lessor and each of the Lessees, subject to Rating Agency confirmation, which
percentage amount represents the maximum percentage of the Aggregate Asset
Amount which is permitted under the Master Lease to be invested in Non-Program
Vehicles; and (b) at all other times, 100%.
"Mazda" means Mazda Motor of America, Inc., a [ ] corporation.
"Measurement Month" with respect to any date, means, each calendar
month, or the smallest number of consecutive calendar months, preceding such
date in which (a) at least [500] Non-Program Vehicles were sold at auction or
otherwise and (b) at least one-twelfth of the aggregate Net Book Value of the
Non-Program Vehicles as of the last day of such calendar month or consecutive
calendar months were sold at auction or otherwise; provided that no calendar
month included in a Measurement Month shall be included in any other Measurement
Month.
"Measurement Month Average" means, with respect to any Measurement
Month, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Disposition Proceeds of all Non-Program Vehicles sold at
auction or otherwise during such Measurement Month and the denominator of which
is the aggregate Net Book Value of such Non-Program Vehicles on the dates of
their respective sales.
"Minimum Class A Enhancement Amount" means, with respect to any date
of determination, the sum of (a) the product of (i) the Class A Program
Enhancement Percentage, times (ii) an amount in U.S. Dollars equal to the
aggregate Invested Amount for the Series 1997 1/N1 Notes minus the product of
(A) the aggregate amount of cash and Permitted Investments in the Group I
Collection Account and, to the extent cash and Permitted Investments in the
Master Collateral Account are allocable to the Trustee on behalf of the holders
of the Group I Series of Notes as Beneficiary pursuant to the Master
Collateral Agency Agreement and are not distributable to or at the direction of
a Lessee pursuant thereto, such cash and Permitted Investments in the Master
Collateral Account as of such date, in each case to the extent allocable to the
Group I Series of Notes, times (B) a fraction, the numerator of which shall be
the sum of the Invested Amounts for the Series 1997 1/N1 Notes as of such date
and the Series 1997 1/N1 Available Subordinated Amount for such date and the
denominator of which shall be the greater of (I) the Aggregate Asset Amount as
of such date and (II) the sum of the Invested Amounts for all Group I Series of
Notes as of such date, times (iii) a fraction, the numerator of which shall be
the aggregate Net Book Value of all Program Vehicles as of such date and the
denominator of which shall be the aggregate Net Book Value of all Program
Vehicles and Non-Program Vehicles as of such date, plus (b) the product of (i)
the Class A Non-Program Enhancement
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Percentage times (ii) an amount in U.S. Dollars equal to the aggregate Invested
Amount for the Series 1997 1/N1 Notes as of such date, minus the product of (A)
the aggregate amount of cash and Permitted Investments in the Group I Collection
Account as of such date and, to the extent cash and Permitted Investments in the
Master Collateral Account are allocable to the Trustee on behalf of holders of
Group I Series of Notes as Beneficiary pursuant to the Master Collateral Agency
Agreement and are not distributable to or at the direction of the Master
Servicer pursuant thereto, cash and Permitted Investments in the Master
Collateral Account in each case to the extent allocable to the Series 1997 1/N1
Notes, times (B) a fraction, the numerator of which shall be the sum of the
Invested Amount for the Series 1997 1/N1 Notes as of such date and the Series
1997 1/N1 Available Subordinated Amount for such date and the denominator of
which shall be the greater of (I) the Aggregate Asset Amount as of such date
and (II) the sum of the Invested Amounts for all Group I Series of Notes
as of such date, times (iii) a fraction, the numerator of which shall be the
aggregate Net Book Value of all Non-Program Vehicles as of such date and the
denominator of which shall be the aggregate Net Book Value of all Program
Vehicles and Non-Program Vehicles as of such date, plus (c) the Additional
Overcollateralization Amount as of such date.
"Minimum Class B Enhancement Amount" means, with respect to any date
of determination, the sum of (a) the product of (i) the Class B Program
Enhancement Percentage, times (ii) an amount in U.S. Dollars equal to the
aggregate Invested Amount for the Series 1997 1/N1 Notes minus the product of
(A) the aggregate amount of cash and Permitted Investments in the Group I
Collection Account and, to the extent cash and Permitted Investments in the
Master Collateral Account are allocable to the Trustee on behalf of holders of
the Group I Series of Notes as Beneficiary pursuant to the Master Collateral
Agency Agreement and are not distributable to or at the direction of any Lessee
pursuant thereto, cash and Permitted Investments in the Master Collateral
Account as of such date, in each case to the extent allocable to any Group I
Series of Notes, times (B) a fraction, the numerator of which shall be the sum
of the Invested Amount for the Series 1997 1/N1 Notes as of such date and the
Series 1997 1/N1 Available Subordinated Amount for such date and the
denominator of which shall be the greater of (I) the Aggregate Asset Amount as
of such date and (II) the sum of the Invested Amounts for all Group I Series of
Notes as of such date, times (iii) a fraction, the numerator of which shall be
the aggregate Net Book Value of all Program Vehicles as of such date and the
denominator of which shall be the aggregate Net Book Value of all Program
Vehicles and Non-Program Vehicles as of such date, plus (b) the product of (i)
the Class B Non-Program Enhancement Percentage times (ii) an amount in U.S.
Dollars equal to the aggregate Invested Amount for the Series 1997 1/N1 Notes
as of such date, minus the product of (A) the aggregate amount of cash and
Permitted Investments in the Group I Collection Account as of such date and, to
the extent
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cash and Permitted Investments in the Master Collateral Account are allocable to
the Trustee on behalf of holders of the Group I Series of Notes as Beneficiary
pursuant to the Master Collateral Agency Agreement and are not distributable to
or at the direction of any Lessee pursuant thereto, such cash and Permitted
Investments in the Master Collateral Account, in each case to the extent
allocable to the Group I Series of Notes, times (B) a fraction, the numerator of
which shall be the sum of the Invested Amounts for the Group I Series of Notes
as of such date and the Series 1997 1/N1 Available Subordinated Amount for such
date and the denominator of which shall be the greater of (I) the Aggregate
Asset Amount as of such date and (II) the sum of the Invested Amounts for all
Group I Series of Notes as of such date, times (iii) a fraction, the numerator
of which shall be the aggregate Net Book Value of all Non-Program Vehicles as of
such date and the denominator of which shall be the aggregate Net Book Value of
all Program Vehicles and Non-Program Vehicles as of such date, plus (c) the
Additional Overcollateralization Amount as of such date.
"Minimum Class C Enhancement Amount" means, with respect to any date
of determination, the sum of (a) the product of (i) the Class C Program
Enhancement Percentage, times (ii) an amount in U.S. Dollars equal to the
aggregate Invested Amount for the Series 1997 1/N1 Notes minus the product of
(A) the aggregate amount of cash and Permitted Investments in the Group I
Collection Account and, to the extent cash and Permitted Investments in
the Master Collateral Account are allocable to the Trustee on behalf of the
holders of the Group I Series of Notes as Beneficiary pursuant to the Master
Collateral Agency Agreement and are not distributable to or at the direction of
any Lessee pursuant thereto, cash and Permitted Investments in the Master
Collateral Account as of such date, in each case to the extent allocable to any
Group I Series of Notes, times (B) a fraction, the numerator of which shall be
the sum of the Invested Amount for the Series 1997 1/N1 Notes as of such date
and the Series 1997 1/N1 Available Subordinated Amount for such date and the
denominator of which shall be the greater of (I) the Aggregate Asset Amount as
of such date and (II) the sum of the Invested Amounts for all Group I Series of
Notes as of such date, times (iii) a fraction, the numerator of which shall be
the aggregate Net Book Value of all Program Vehicles as of such date and the
denominator of which shall be the aggregate Net Book Value of all Program
Vehicles and Non-Program Vehicles as of such date, plus (b) the product of (i)
the Class C Non-Program Enhancement Percentage times (ii) an amount in U.S.
Dollars equal to the aggregate Invested Amount for the Series 1997 1/N1 Notes
as of such date, minus the product of (A) the aggregate amount of cash and
Permitted Investments in the Group I Collection Account as of such date and, to
the extent cash and Permitted Investments in the Master Collateral Account are
allocable to the Trustee on behalf of the holders of the Group I Series of
Notes as Beneficiary pursuant to the Master Collateral Agency Agreement and are
not distributable to or at
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the direction of any Lessee pursuant thereto, such cash and Permitted
Investments in the Master Collateral Account, in each case to the extent
allocable to the Group I Series of Notes, times (B) a fraction, the numerator of
which shall be the sum of the Invested Amounts for the Group I Series of Notes
as of such date and the Series 1997 1/N1 Available Subordinated Amount for such
date and the denominator of which shall be the greater of (I) the Aggregate
Asset Amount as of such date and (II) the sum of the Invested Amounts for all
Group I Series of Notes as of such date, times (iii) a fraction, the numerator
of which shall be the aggregate Net Book Value of all Non-Program Vehicles as of
such date and the denominator of which shall be the aggregate Net Book Value of
all Program Vehicles and Non-Program Vehicles as of such date, plus (c) the
Additional Overcollateralization Amount as of such date.
"Minimum Series 1997 1/N1 Letter of Credit Amount" means, with respect
to any date of determination, the greater of (a) an amount equal to (i) 2.0%
of the Invested Amount of the Series 1997 1/N1 Notes outstanding on such date,
less (ii) any cash on deposit in the Series 1997 1/N1 Cash Collateral Account
on such date and (b) an amount equal to (i) the greatest of (x) the Minimum
Class A Enhancement Account, (y) the Minimum Class B Enhancement Amount, and
(z) the Minimum Class C Enhancement Amount, minus (ii) the Series 1997 1/N1
Available Subordinated Amount.
"Minimum Subordinated Amount" means, with respect to any date of
determination, the greater of (a) 0.5% of the Invested Amount of the Series
1997 1/N1 Notes outstanding on such date and (b) an amount equal to (i) the
greatest of (x) the Minimum Class A Enhancement Account, (y) the Minimum Class B
Enhancement Amount, and (z) the Minimum Class C Enhancement Amount, minus (ii)
the Series 1997 1/N1 Letter of Credit Amount.
"Monthly Base Rent is defined in paragraph 9 of Annex A and
paragraph 6 of Annex B to the Master Lease.
"Monthly Certificate" is defined in Section 24.4(b) of the Master
Lease.
"Monthly Finance Rent" is defined in paragraph 6 of Annex B to the
Master Lease.
"Monthly Supplemental Payment" is defined in paragraph 6 of Annex B
to the Master Lease.
"Monthly Variable Rent" is defined in paragraph 9 of Annex A to the
Master Lease.
"Monthly Vehicle Statement" is defined in Section 24.4(f) of the
Master Lease.
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"Nissan" means Nissan Motor Corporation U.S.A., a [ ]
corporation.
"Non-Program Vehicle" means a Group I Vehicle that, when acquired by
RCFC, Thrifty or Dollar, as the case may be, from an Eligible Manufacturer, or
when so designated by the Master Servicer, in each case subject to the
limitations described herein, is not eligible for inclusion in any Eligible
Vehicle Disposition Program.
"Note Purchase Agreement" means the Note Purchase Agreement, dated
as of December [__], 1997 among RCFC, DTAG and the Initial Purchaser, pursuant
to which the Initial Purchaser agrees to purchase the Notes from RCFC, subject
to the terms and conditions set forth therein.
"Officers' Certificate" means a certificate signed by an Authorized
Officer of DTAG, RCFC or a Lessee, as applicable.
"Operating Lease" means the Master Lease as supplemented by Annex A
to the Master Lease.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
DTAG, RCFC or a Lessee, as the case may be, unless the Required Beneficiaries
shall notify the Trustee of objection thereto.
"Overcollateralization Portion" means, as of any date of
determination, (i) the sum of the amounts determined pursuant to clauses(a) and
(b) of the definition of Minimum Class A Enhancement Amount as of such date
minus (ii) the Series 1997 1/N1 Letter of Credit Amount as of such date.
"Payment Date" means the 25th day of each calendar month, or, if
such day is not a Business Day, the next succeeding Business Day, commencing
February 25, 1998.
"Payoff Letter" means a letter addressed to the Lessor and the
Trustee from each lender holding a security interest in any Vehicles in the
Existing Fleet stating the amount required to be paid to such lender to release
such lender's lien or security interest in such Vehicles and agreeing that such
lien or security interest shall be released upon payment of such amount to the
account specified in such letter.
"Permanent Global Class A Notes" has the meaning specified in
Section 7.1(b) of this Supplement.
"Permanent Global Class A-1 Note" has the meaning specified in
Section 7.1(b) of this Supplement.
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"Permanent Global Class A-2 Note" has the meaning specified in
Section 7.1(b) of this Supplement.
"Permanent Global Class A-3 Note" has the meaning specified in
Section 7.1(b) of this Supplement.
"Permanent Global Class B Notes" has the meaning specified in
Section 7.2(b) of this Supplement.
"Permanent Global Class B-1 Note" has the meaning specified in
Section 7.2(b) of this Supplement.
"Permanent Global Class B-2 Note" has the meaning specified in
Section 7.2(b) of this Supplement.
"Permanent Global Class B-3 Note" has the meaning specified in
Section 7.2(b) of this Supplement.
"Permanent Global Class C Note" has the meaning specified on Section
7.3(b) of this Supplement.
"Permanent Global Class C-1 Note" has the meaning specified in
Section 7.3(b) of this Supplement.
"Permanent Global Class C-2 Note" has the meaning specified in
Section 7.3(b) of this Supplement.
"Permanent Global Class C-3 Note" has the meaning specified in
Section 7.3(b) of this Supplement.
"Permitted Investments" means negotiable instruments or securities
maturing on or before the Payment Date next occurring after the investment
therein, represented by instruments in bearer, registered or book-entry form
which evidence (i) obligations the full and timely payment of which are to be
made by or is fully guaranteed by the United States of America; (ii) demand
deposits of, time deposits in, or certificates of deposit issued by, any
depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by Federal or state banking or depositary institution authorities;
provided, however, that at the earlier of (x) the time of the investment and (y)
the time of the contractual commitment to invest therein, the certificates of
deposit or short-term deposits, if any, or long-term unsecured debt obligations
(other than such obligation whose rating is based on collateral or on the credit
of a person other than such institution or trust company) of such depositary
institution or trust company shall have a credit rating from Standard & Poor's
Rating Services, a division of The McGraw-Hill Companies, Inc. ("Standard &
Poor's") of "A-1+" and from DCR of at least "D-1+" (if rated by DCR), in the
case of certificates of deposit or short-term deposits, or a rating from
Standard & Poor's of at least "AA" and from DCR of at
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least "AA" (if rated by DCR), in the case of long-term unsecured debt
obligations; (iii) commercial paper having, at the earlier of (x) the time of
the investment and (y) the time of contractual commitment to invest therein, a
rating from Standard & Poor's of "A-1+" and from DCR of at least "D-1+" (if
rated by DCR); (iv) demand deposits or time deposits which are fully insured by
the Federal Deposit Insurance Company; (v) bankers' acceptances issued by any
depositary institution or trust company described in clause (ii) above; (vi)
investments in money market funds rated at least "AAm" by Standard & Poor's or
otherwise approved in writing by Standard & Poor's and rated at least "AA" by
DCR (if rated by DCR); (vii) Eurodollar time deposits having a credit rating
from Standard & Poor's of "A-1+" and from DCR of at least "D-1+" (if rated by
DCR); (viii) repurchase agreements involving any of the Permitted Investments
described in clauses (i) and (vii) and the certificates of deposit described in
clause (ii) which are entered into with a depository institution or trust
company, having a commercial paper or short-term certificate of deposit rating
of "A-1+" by Standard & Poor's and of at least "D-1+" from DCR (if rated by
DCR) or otherwise is approved as to collateralization by the Rating Agencies;
and (ix) any other instruments or securities, if the Rating Agencies confirm in
writing that such investment will not adversely affect any ratings with respect
to any series.
"Permitted Liens" is defined in Section 25.3 of the Master Lease.
"Pool Factor" means, on any Determination Date, (a) with respect to
the Class A-1 Notes, a number carried out to eight decimals representing the
ratio of the Class A-1 Invested Amount as of such date (determined after taking
into account any decreases in the Class A-1 Invested Amount which will occur on
the following Payment Date) to the Class A-1 Initial Invested Amount,(b) with
respect to the Class A-2 Notes, a number carried out to eight decimals
representing the ratio of the Class A-2 Invested Amount as of such date
(determined after taking into account any decreases in the Class A-2 Invested
Amount which will occur on the following Payment Date) to the Class A-2 Initial
Invested Amount, (c) with respect to the Class A-3 Notes, a number carried out
to eight decimals representing the ratio of the Class A-3 Invested Amount as of
such date (determined after taking into account any decreases in the Class A-3
Invested Amount which will occur on the following Payment Date) to the Class A-3
Initial Invested Amount,(d) with respect to the Class B-1 Notes, a number
carried out to eight decimals representing the ratio of the Class B-1 Invested
Amount as of such date (determined after taking into account any decreases in
the Class B-1 Invested Amount which will occur on the following Payment Date) to
the Class B-1 Initial Invested Amount, (e) with respect to the Class B-2 Notes,
a number carried out to eight decimals representing the ratio of the Class B-2
Invested Amount as of such date (determined after taking into account any
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decreases in the Class B-2 Invested Amount which will occur on the following
Payment Date) to the Class B-2 Initial Invested Amount, (f) with respect to the
Class B-3 Notes, a number carried out to eight decimals representing the ratio
of the Class B-3 Invested Amount as of such date (determined after taking into
account any decreases in the Class B-3 Invested Amount which will occur on the
following Payment Date) to the Class B-3 Initial Invested Amount, (g) with
respect to the Class C-1 Notes, a number carried out to eight decimals
representing the ratio of the Class C-1 Invested Amount as of such date
(determined after taking into account any decreases in the Class C-1 Invested
Amount which will occur on the following Payment Date) to the Class C-1 Initial
Invested Amount, (h) with respect to the Class C-2 Notes, a number carried out
to eight decimals representing the ratio of the Class C-2 Invested Amount as of
such date (determined after taking into account any decreases in the Class C-2
Invested Amount which will occur on the following Payment Date) to the Class C-2
Initial Invested Amount, and (i) with respect to the Class C-3 Notes, a number
carried out to eight decimals representing the ratio of the Class C-3 Invested
Amount as of such date (determined after taking into account any decreases in
the Class C-3 Invested Amount which will occur on the following Payment Date) to
the Class C-3 Initial Invested Amount.
"Power of Attorney" is defined in Section 9 of the Master Lease.
"Principal Collections" means Collections other than Series 1997
1/N1 Interest Collections Recoveries and Lease Payment Recoveries.
"Private Placement Memorandum" means the Private Placement
Memorandum dated December __, 1997, relating to the Series 1997 1/N1 Notes,
including the Supplement to Private Placement Memorandum dated December __,
1997, as such Private Placement Memorandum and such Supplement to Private
Placement Memorandum may be amended, supplemented, restated or otherwise
modified from time to time.
"Program Vehicle" means any Group I Vehicle which at the time of
purchase or financing by RCFC or a Lessee, as the case may be, is eligible under
a Eligible Vehicle Disposition Program.
"Qualified Institution" means a depositary institution or trust
company (which may include the Trustee) organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia;
provided, however, that at all times such depositary institution or trust
company is a member of the FDIC and has (i) has a long-term indebtedness rating
from Standard & Poor's of not lower than "AA" and from DCR of not lower than
"[ ]" and a short-term indebtedness of rating
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from Standard & Poor's not lower than "A-1+" and from DCR of not lower than
"[ ]", or (ii) has such other rating which has been approved by the Rating
Agencies.
"Rating Agencies" means, with respect to the Series 1997 1/N1 Notes,
Standard & Poor's and DCR.
"Rating Agency Condition" means, with respect to any action, that
each Rating Agency shall have notified RCFC, DTAG, the Series 1997 1/N1 Letter
of Credit Provider and the Trustee in writing that such action will not result
in a reduction or withdrawal of the rating (in effect immediately before the
taking of such action) of any outstanding Group I Series of Notes with respect
to which it is a Rating Agency and, with respect to the issuance of a
new Group I Series of Notes, the "Rating Agency Condition" also means that each
rating agency that is referred to in the related Placement Memorandum
Supplement as being required to deliver its rating with respect to such Series
of Notes shall have notified RCFC, DTAG, the Series 1997 1/N1 Letter of Credit
Provider and the Trustee in writing that such rating has been issued by such
rating agency.
"RCFC" has the meaning set forth in the preamble.
"RCFC Obligations" means all principal and interest, at any time and
from time to time, owing by RCFC on the Notes and all costs, fees and expenses
payable by, or obligations of, RCFC under the Indenture and the Related
Documents.
"Recoveries" means, with respect to any Related Month, the sum
(without duplication) of (i) all amounts received by RCFC, the Master Collateral
Agent or the Trustee (including by deposit into the Collection Account or the
Master Collateral Account) from any Person during such Related Month in respect
of Losses, plus (ii) the excess, if any, of (x) the aggregate amount of
Disposition Proceeds received during such Related Month by RCFC, the Master
Collateral Agent or the Trustee (including by deposit into the Collection
Account or the Master Collateral Account) and resulting from the sale or other
final disposition of Acquired Vehicles (other than pursuant to Vehicle
Disposition Programs) plus any Termination Payments that have accrued with
respect to such Acquired Vehicles, over (y) the Net Book Values of such Acquired
Vehicles, calculated on the dates of the respective sales or dispositions
thereof.
"Related Documents" means, collectively, the Indenture, the Notes,
any Enhancement Agreement, the Master Lease, the Master Collateral Agency
Agreement and any grantor supplements and financing source and beneficiary
supplements thereto involving the Trustee as Beneficiary, the Chrysler Vehicle
Lien Nominee Agreement, the Assignment Agreements and the Note Purchase
Agreement.
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"Rent", with respect to each Acquired Vehicle and each Financed
Vehicle, is defined in paragraph 9 of Annex A to the Master Lease and in
paragraph 6 of Annex B to the Master Lease.
"Repurchase Amount" means, with respect to any Series of Notes, the
amount specified in the applicable Supplement.
"Repurchase Date" has the meaning specified in Section 8.1(a) of
this Supplement.
"Repurchase Price" has the meaning specified in Section 8.1(b) of
this Supplement.
"Required Asset Amount" means with respect to the Series 1997 1/N1
Notes, at any date of determination, the sum of (i) the Invested Amounts for all
Group I Series of Notes that do not provide for Enhancement in the form of
overcollateralization plus (ii) with respect to all Group I Series of Notes that
provide for Enhancement in the form of overcollateralization, the sum of (a) the
Invested Amounts for all such Series of Notes, plus (b) the available
subordinated amounts required to be maintained as part of the minimum
enhancement amount for all such Series of Notes.
"Required Beneficiaries" means Noteholders holding in excess of 50%
of the aggregate Invested Amount of all outstanding Group I Series of Notes
(excluding, for the purposes of making the foregoing calculation, any notes held
by DTAG or any Affiliate of DTAG).
"Required Noteholders" means Noteholders holding in excess of 50% of
the aggregate Invested Amount of the applicable Group I Series of Notes
(excluding, for the purposes of making the foregoing calculation, any Notes held
by DTAG or any Affiliate of DTAG).
"Responsible Officer" means, with respect to DTAG, RCFC, Thrifty,
Dollar or any Additional Lessee, any President, Vice President, Assistant Vice
President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer, or
any officer performing functions similar to those customarily performed by the
person who at the time shall be such officer.
"Restricted Global Class A Notes" has the meaning specified in
Section 7.1(a) of this Supplement.
"Restricted Global Class A-1 Note" has the meaning specified in
Section 7.1(a) of this Supplement.
"Restricted Global Class A-2 Note" has the meaning specified in
Section 7.1(a) of this Supplement.
"Restricted Global Class A-3 Note" has the meaning specified in
Section 7.1(a) of this Supplement.
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"Restricted Global Class B Notes" has the meaning specified in
Section 7.2(a) of this Supplement.
"Restricted Global Class B-1 Note" has the meaning specified in
Section 7.2(a) of this Supplement.
"Restricted Global Class B-2 Note" has the meaning specified in
Section 7.2(a) of this Supplement.
"Restricted Global Class B-3 Note" has the meaning specified on
Section 7.2(a) of this Supplement.
"Restricted Global Class C Notes" has the meaning specified in
Section 7.3(a) of this Supplement.
"Restricted Global Class C-1 Note" has the meaning specified in
Section 7.3(a) of this Supplement.
"Restricted Global Class C-2 Note" has the meaning specified in
Section 7.3(a) of this Supplement.
"Restricted Global Class C-3 Note" has the meaning specified in
Section 7.3(a) of this Supplement.
"Retained Amount" means, on any date of determination, the amount,
if any, by which the Aggregate Asset Amount at the end of the day immediately
prior to such date of determination, exceeds the Required Asset Amount at the
end of such day.
"Retained Interest" means the transferable indirect interest in
RCFC's assets held by the Retained Interestholder to the extent relating to the
Group I Collateral, including the right to receive payments with respect to such
collateral in respect of the Retained Amount.
"Retained Interest Percentage" means, on any date of determination,
when used with respect to Collections that are Principal Collections,
Recoveries, Lease Payment Recoveries, Losses, Lease Payment Losses and other
amounts, an amount equal to one hundred percent (100%) minus the sum of (i) the
invested percentages for all outstanding Group I Series of Notes including all
classes of such Series of Notes and (ii) the available subordinated amount
percentages for all Group I Series of Notes that provide for credit enhancement
in the form of overcollateralization, in each case as such percentages are
calculated on such date with respect to Collections that are Principal
Collections, Recoveries, Lease Payment Recoveries, Losses, Lease Payment Losses
and other amounts, as applicable.
"Retained Interestholder" means DTAG or any permitted successor or
assign.
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<PAGE> 45
"Series 1997 1/N1 Accrued Interest Account" has the meaning specified
in Section 4.6(b) of this Supplement.
"Series 1997 1/N1 Available Subordinated Amount" means, for any date of
determination, an amount equal to (a) the Series 1997 1/N1 Available
Subordinated Amount for the preceding Determination Date, minus (b) the Series
1997 1/N1 Available Subordinated Amount Incremental Losses for the Related
Month, plus (c) the Series 1997 1/N1 Available Subordinated Amount Incremental
Recoveries for the Related Month, minus (d) the Series 1997 1/N1 Lease Payment
Losses allocable to the Series 1997 1/N1 Available Subordinated Amount pursuant
to Section ___________________ of this Supplement since the preceding
Determination Date, plus (e) the Series 1997 1/N1 Lease Payment Recoveries
allocable to the Series 1997 1/N1 Available Subordinated Amount pursuant to
Section ______________ of this Supplement since the preceding Determination
Date, plus (f) additional amounts, if any, contributed by RCFC since the
preceding Determination Date (or in the case of the first Determination Date,
since the Series 1997 1/N1 Closing Date) to the Series 1997 1/N1 Excess Funding
Account for allocation to the Series 1997 1/N1 Available Subordinated Amount,
plus (g) the aggregate Net Book Value of additional Eligible Vehicles
contributed by DTAG since the preceding Determination Date (or in the case of
the first Determination Date, since the Closing Date) as Master Collateral for
allocation to the Series 1997 1/N1 Available Subordinated Amount pursuant to
the Indenture, minus (h) any amounts withdrawn from the Series 1997 1/N1 Excess
Funding Account since the preceding Determination Date (or in the case of the
first Determination Date, since the Series 1997 1/N1 Closing Date) for
allocation to the Retained Distribution Account. The "Series 1997 1/N1
Available Subordinated Amount" for the Series 1997 1/N1 Closing Date through
the first Determination Date shall mean $___________.
"Series 1997 1/N1 Available Subordinated Amount Incremental Losses"
means, for any Related Month, the sum of all Losses that became Losses during
such Related Month and which were allocated to the Series 1997 1/N1 Available
Subordinated Amount pursuant to Section ________________ of this Supplement.
"Series 1997 1/N1 Available Subordinated Amount Incremental Recoveries"
means, for any Related Month, the sum of all Recoveries that became Recoveries
during such Related Month and which were allocated to the Series 1997 1/N1
Available Subordinated Amount pursuant to Section _______________ of this
Supplement.
"Series 1997 1/N1 Available Subordinated Amount Maximum Increase" means
1.1% of the sum of the Series 1997 1/N1 Initial Invested Amount and the Series
1997 1/N1 Available Subordinated Amount provided, however, that if (i) a Series
1997 1/N1 Enhancement Deficiency arises out of any Losses or Lease Payment
Losses and (ii) the Rating Agencies shall have notified RCFC and the Trustee in
writing that, after cure of such Series 1997 1/N1 Enhancement
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<PAGE> 46
Deficiency is provided for, the Class A Notes, the Class B Notes and the Class C
Notes will each receive the same rating from the Rating Agencies as they
received prior to the occurrence of such Series 1997 1/N1 Enhancement
Deficiency, then the Series 1997 1/N1 Available Subordinated Amount Maximum
Increase applicable to the cure of such Series 1997 1/N1 Enhancement
Deficiency shall not be limited in amount.
"Series 1997 1/N1 Cash Collateral Account" has the meaning
specified in Sections 4.20 and 4.21 of this Supplement.
"Series 1997 1/N1 Cash Collateral Account Surplus" means, as of any
date of determination subsequent to the establishment and funding of the Series
1997 1/N1 Cash Collateral Account pursuant to Section 4.21(a) of this
Supplement, the amount, if any, by which (a) the Series 1997 1/N1 Letter of
Credit Amount exceeds (b) the Minimum Series 1997 1/N1 Letter of Credit Amount.
"Series 1997 1/N1 Closing Date" means December __, 1997.
"Series 1997 1/N1 Collection Account" has the meaning specified in
Section 4.6(a) of this Supplement.
"Series 1997 1/N1 Controlled Amortization Period" means any or all
of the Class A-1 Controlled Amortization Period, the Class A-2 Controlled
Amortization Period, the Class A-3 Controlled Amortization Period, the Class B-1
Controlled Amortization Period, the Class B-2 Controlled Amortization Period the
Class B-3 Controlled Amortization Period, the Class C-1 Controlled Amortization
Period, the Class C-2 Controlled Amortization Period and the Class C-3
Controlled Amortization Period, as the context requires.
"Series 1997 1/N1 Deposit Date" has the meaning specified in Section
4.7 of this Supplement.
"Series 1997 1/N1 Enhancement Deficiency" means, with respect to any
date of determination, the amount, if any, by which (a) the Class A Enhancement
Amount is less than the Minimum Class A Enhancement Amount for such day, (b) the
Class B Enhancement Amount is less than the Minimum Class B Enhancement Amount
for such day, or (c) the Class C Enhancement Amount is less than the Minimum
Class C Enhancement Amount for such day, as the context requires.
"Series 1997 1/N1 Enhancement Factor" means, as of any date of
determination, an amount equal to (i) 100% minus (ii) the percentage equivalent
of a fraction, the numerator of which is the sum of the amounts determined
pursuant to clauses (a) and (b) of the definition of Minimum Class C Enhancement
Amount as of such date and the denominator of which is the Invested Amount for
the Series 1997 1/N1 Notes as of such date.
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<PAGE> 47
"Series 1997 1/N1 Excess Funding Account" has the meaning
specified in "Section 4.6(a) of this Supplement.
"Series 1997 1/N1 Initial Invested Amount" means $900,000,000.
"Series 1997 1/N1 Interest Collections" means on any date of
determination, all Collections which represent Monthly Variable Rent, Monthly
Finance Rent or the Availability Payment accrued with respect to the Series
1997 1/N1 Notes, plus the Series 1997 1/N1 Invested Percentage of any amounts
earned on Permitted Investments in the Collection Account which constitute
Group I Collateral and which are available for distribution on such date.
"Series 1997 1/N1 Interest Period" means a period from and
including a Payment Date to but excluding the next succeeding Payment Date;
provided, however, that the initial Series 1997 1/N1 Interest Period shall be
from the Series 1997 1/N1 Closing Date to the initial Payment Date.
"Series 1997 1/N1 Invested Percentage" means, on any date of
determination:
(i) when used with respect to Principal Collections, Losses, Lease
Payment Losses, Recoveries, Lease Payment Recoveries and other amounts
during the Series 1997 1/N1 Revolving Period, the percentage equivalent
of a fraction, the numerator of which shall be an amount equal to the sum
of (x) the Invested Amount and (y) the Series 1997 1/N1 Available
Subordinated Amount, in each case as of the end of the second preceding
Related Month or, until the end of the second Related Month, as of the
Series 1997 1/N1 Closing Date, and the denominator of which shall be the
greater of (A) the Aggregate Asset Amount as of the end of the second
preceding Related Month or, until the end of the second Related Month, as
of the Series 1997 1/N1 Closing Date, and (B) as of the same date as in
clause (A), the sum of the numerators used to determine (i) invested
percentages for allocations with respect to Principal Collections (for
all Group I Series of Notes including all classes of such Series of
Notes) and (ii) available subordinated amount percentages for allocations
with respect to Principal Collections (for all Group I Series of Notes
that provide for credit enhancement in the form of
overcollateralization); and
(ii) when used with respect to Principal Collections, Losses, Lease
Payment Losses, Recoveries, Lease Payment Recoveries and other amounts
during the Series 1997 1/N1 Controlled Amortization Period and the Series
1997 1/N1 Rapid Amortization Period, the percentage equivalent of a
fraction, the numerator of which shall be an amount equal to the sum of
(x) the Invested Amount and (y) the Series 1997 1/N1 Available
Subordinated Amount, in each case as of the end of
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the related Series 1997 1/N1 Revolving Period, and the denominator of
which shall be the greater of (A) the Aggregate Asset Amount as of the
end of the second preceding Related Month and (B) as of the same date
as in clause (A), the sum of the numerators used to determine (i)
invested percentages for allocations with respect to Principal
Collections (for all Group I Series of Notes including all classes of
such Series of Notes) and (ii) available subordinated amount percentages
for allocations with respect to Principal Collections (for all Group I
Series of Notes that provide for credit enhancement in the form of
overcollateralization).
"Series 1997 1/N1 Investor Monthly Servicing Fee" means the Series
1997 1/N1 Invested Percentage of the Group I Monthly Servicing Fee.
"Series 1997 1/N1 Lease Payment Losses" means, as of any
Determination Date and the Related Payment Date, an amount equal to the Series
1997 1/N1 Invested Percentage of Lease Payment Losses as of such date.
"Series 1997 1/N1 Lease Payment Recoveries" means, for any
Determination Date and the Related Payment Date, the Series
1997 1/N1 Invested Percentage of all Lease Payment Recoveries
received during the Related Month.
"Series 1997 1/N1 Letter of Credit" means the irrevocable letter of
credit issued by the Series 1997 1/N1 Letter of Credit Provider in favor of the
Trustee for the benefit of the Series 1997 1/N1 Noteholders pursuant to the
Series 1997 1/N1 Letter of Credit Reimbursement Agreement.
"Series 1997 1/N1 Letter of Credit Amount" means, as of any date of
determination, the amount (a) available to be drawn on such date under the
Series 1997 1/N1 Letter of Credit, as specified therein or (b) if the Series
1997 1/N1 Cash Collateral Account has been established and funded pursuant to
Section 4.21, the amount on deposit in the Series 1997 1/N1 Cash Collateral
Account on such date.
"Series 1997 1/N1 Letter of Credit Expiration Date" means the date
the Series 1997 1/N1 Letter of Credit expires as specified in the Series 1997
1/N1 Letter of Credit.
"Series 1997 1/N1 Letter of Credit Provider" means Credit Suisse
First Boston, a Swiss banking corporation, or such other Person in accordance
with the terms of the Series 1997 1/N1 Letter of Credit Reimbursement Agreement.
"Series 1997 1/N1 Letter of Credit Reimbursement Agreement" means
the Series 1997 1/N1 Letter of Credit Reimbursement Agreement, dated as of 1997,
between RCFC and the Series 1997 1/N1
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Letter of Credit Provider as such agreement may be amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms
thereof.
"Series 1997 1/N1 Limited Liquidation Event of Default" means, so
long as such event or condition continues, any event or condition of the type
specified in Section 5.1 of this Supplement that continues for thirty (30) days
(without double counting the five (5) Business Day cure period provided for in
said Section 5.1); provided, however, that such event or condition shall not
constitute a Series 1997 1/N1 Limited Liquidation Event of Default if (i) within
such thirty (30) day period, DTAG shall have contributed a portion of the
Retained Interest or reallocated Eligible Vehicles from the Retained Interest to
the Series 1997 1/N1 Available Subordinated Amount in accordance with Section
4.7(d)(E) sufficient to cure the Series 1997 1/N1 Enhancement Deficiency and
(ii) the Rating Agencies shall have notified RCFC, DTAG and the Trustee in
writing that after such cure of such Series 1997 1/N1 Enhancement Deficiency
is provided for, the Class A Notes, the Class B Notes and the Class C Notes
will each receive the same rating from the Rating Agencies as they received
prior to the occurrence of such Series 1997 1/N1 Enhancement Deficiency.
"Series 1997 1/N1 Monthly Servicing Fee" means the Series 1997 1/N1
Invested Percentage of the sum of (a) the Group I Monthly Servicing Fee and (b)
the Group I Supplemental Servicing Fee.
"Series 1997 1/N1 Monthly Supplemental Servicing Fee" means the
Series 1997 1/N1 Invested Percentage of the Group I Supplemental Servicing Fee.
"Series 1997 1/N1 Note Prepayment Premium" has the meaning
specified in Section 8.1(c) of this Supplement.
"Series 1997 1/N1 Noteholders" means, collectively, the Class A
Noteholders, the Class B Noteholders and the Class C Noteholders.
"Series 1997 1/N1 Notes" has the meaning specified in the first
paragraph of Article 1 of this Supplement.
"Series 1997 1/N1 Principal Allocation" has the meaning specified in
Section 4.7(a)(x)(ii) of this Supplement.
"Series 1997 1/N1 Rapid Amortization Period" means the period
beginning at the close of business on the Business Day immediately
preceding the day on which an Amortization Event is deemed to have occurred
with respect to the Series 1997 1/N1 Notes and ending upon the earliest to
occur of (i) the date on which the Series 1997 1/N1 Notes are paid in full,
(ii) the Series 1997 1/N1 Termination Date and (iii) the termination of the
Indenture in accordance with its terms.
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"Series 1997 1/N1 Revolving Period" means, with respect to any
class of the Series 1997 1/N1 Notes, the period from and including the Series
1997 1/N1 Closing Date to the earlier of (i) the commencement of the Series
1997 1/N1 Controlled Amortization Period related to such class of Notes and
(ii) the commencement (if any) of the Series 1997 1/N1 Rapid Amortization
Period.
"Series 1997 1/N1 Termination Date" means, (a) with respect to the
Class A-1 Notes, Class B-1 Notes and Class C-1 Notes, the September 2002 Payment
Date, (b) with respect to the Class A-2 Notes, the Class B-2 Notes and the Class
C-2 Notes, the August 2004 Payment Date and (c) with respect to the Class A-3
Notes, the Class B-3 Notes and the Class C-3 Notes, the June 2006 Payment Date.
"Servicer" means Thrifty, Dollar or any Additional Lessee, as
applicable, in its capacity as a servicer under the Master Lease and any
successor servicer thereunder.
"Shared Principal Collections" means, as of any Payment Date,
Principal Collections allocable to a Group I Series of Notes as of such Payment
Date that are not required to make principal payments with respect to such Group
I Series of Notes as of such Payment Date under the related Series Supplement
and are allocable in accordance with the terms of such Series Supplement to make
payments on other Group I Series of Notes.
"Sublease" means a standardized lease agreement, for the leasing of
Vehicles, between a Lessee, as lessor, and an Eligible Franchisee, as lessee.
"Supplemental Documents" is defined in Section 2.1 of the Master
Lease.
"Temporary Global Class A Notes" has the meaning specified in
Section 7.1(b) of this Supplement.
"Temporary Global Class A-1 Note" has the meaning specified in
Section 7.1(b) of this Supplement.
"Temporary Global Class A-2 Note" has the meaning specified in
Section 7.1(b) of this Supplement.
"Temporary Global Class A-3 Note" has the meaning specified in
Section 7.1(b) of this Supplement.
"Temporary Global Class B Notes" has the meaning specified in
Section 7.2(b) of this Supplement.
"Temporary Global Class B-1 Note" has the meaning specified in
Section 7.2(b) of this Supplement.
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"Temporary Global Class B-2 Note" has the meaning specified in
Section 7.2(b) of this Supplement.
"Temporary Global Class B-3 Note" has the meaning specified in
Section 7.2(b) of this Supplement.
"Temporary Global Class C Note" has the meaning specified in Section
7.3(b) of this Supplement.
"Temporary Global Class C-1 Note" has the meaning specified in
Section 7.3(b) of this Supplement.
"Temporary Global Class C-2 Note" has the meaning specified in
Section 7.3(b) of this Supplement.
"Temporary Global Class C-3 Note" has the meaning specified in
Section 7.3(b) of this Supplement.
"Term" is defined in Section 3.2 of the Master Lease.
"Termination Payment" is defined in Section 12.3 of the Master
Lease.
"Texas Vehicles" means Eligible Vehicles acquired by Dollar or
Thrifty on or after the Lease Commencement Date for lease in the State of Texas.
"Toyota" means Toyota Motor Sales, U.S.A., Inc., a [ ]
corporation
"U.S. Dollar" means the lawful currency of the United States of
America.
"Vehicle Acquisition Schedule" is defined in Section 2.1 of the
Master Lease.
"Vehicle Lease Commencement Date" is defined in Section 3.1 of the
Master Lease.
"Vehicle Lease Expiration Date", with respect to each Group I
Vehicle, means the earliest of (i) the Disposition Date for such Group I
Vehicle, (ii) if such Group I Vehicle becomes a Casualty, the date funds in the
amount of the Net Book Value thereof are received by the Lessor, the Master
Collateral Agent or the Trustee (including deposit into the Collection Account
or the Master Collateral Account) from any of the Lessees in accordance with the
Master Lease, and (iii) the Maximum Vehicle Lease Term of the Operating Lease
and the Financing Lease, as applicable, as specified in, respectively, paragraph
5 of each of Annex A and Annex B to the Master Lease.
"Vehicle Order" is defined in Section 2.1 of the Master Lease.
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"Vehicle Term" is defined in Section 3.1 of the Master Lease.
"VIN" is defined in Section 18 of the Master Lease.
ARTICLE 3
[RESERVED]
ARTICLE 4
ALLOCATION AND APPLICATION OF COLLECTIONS
Any provisions of Article 4 of the Base Indenture which allocate and
apply Collections shall continue to apply irrespective of the issuance of the
Series 1997 1/N1 Notes. Sections 4.1 through 4.5 of the Base Indenture shall be
read in their entirety as provided in the Base Indenture, provided that for
purposes of the Series 1997 1/N1 Notes clauses (c), (d) and (e) of Section 4.2
of the Base Indenture shall read as follows:
(c) Right of Master Servicer to Deduct Fees. Notwithstanding
anything in this Indenture to the contrary but subject to any limitations set
forth in the applicable Supplement, as long as (x) the Master Servicer is DTAG
or an Affiliate of DTAG and (y) the Retained Interest Amount equals or exceeds
zero, the Master Servicer (i) may make or cause to be made deposits of
Collections to the Group I Collection Account net of any amounts which are
allocable to the Retained Distribution Account and represent amounts due and
owing to it in its capacity as Master Servicer and (ii) need not deposit or
cause to be deposited any amounts to be paid to the Master Servicer pursuant to
this Section 4.2 and such amounts will be deemed paid to the Master Servicer, as
the case may be, pursuant to this Section 4.2.
(d) Sharing Collections. To the extent that Principal Collections
that are allocated to the Series 1997 1/N1 Notes on a Payment Date are not
needed to make payments of principal to Series 1997 1/N1 Noteholders or
required to be deposited in the Series 1997 1/N1 Distribution Account on such
Payment Date, such Principal Collections may, at the direction of the Master
Servicer, be applied to cover principal payments due to or for the benefit of
Noteholders of other Group I Series of Notes. Any such reallocation will not
result in a reduction of the Aggregate Principal Balance or in the Invested
Amount of the Series 1997 1/N1 Notes.
(e) Unallocated Principal Collections. If, after giving effect to
Section 4.2(d), Principal Collections allocated to the Series 1997 1/N1 Notes on
any Payment Date are in excess of
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the amount required to pay amounts due in respect of the Series 1997 1/N1
Notes on such Payment Date in full, then any such excess Principal
Collections shall be allocated to the Retained Distribution Account (to the
extent that the Retained Interest Amount equals or exceeds zero) and provided
Series 1997 1/N1 Enhancement Deficiency or Asset Amount Deficiency exists or
would result from such allocation.
In addition, for purposes of Section 4.2(a) of the Base Indenture,
the Master Servicer in its capacity as such under the Master Lease shall cause
all Collections allocable to Group I Collateral in accordance with the Indenture
and the Master Collateral Agency Agreement, as applicable, to be paid directly
into the Group I Collection Account or the Master Collateral Account, as
applicable.
Article 4 of the Base Indenture (except for Sections 4.1 through 4.5
thereof subject to the proviso in the first paragraphs of this Article 4 and the
immediately preceding sentence) shall read in its entirety as follows and shall
be applicable only to the Series 1997 1/N1 Notes:
Section 4.6 Establishment of Group I Collection Account, Series
1997 1/N1 Collection Account, Series 1997 1/N1 Excess Funding Account, and
Series 1997 1/N1 Accrued Interest Account.
(a) The Trustee will create three administrative
sub-accounts within the Collection Account. One sub-account will be
established for the benefit of holders of Notes from a Group I
Series of Notes (such sub-account, the "Group I Collection
Account"). Another sub-account will be established for the benefit
of the Series 1997 1/N1 Noteholders (such sub-account, the "Series
1997 1/N1 Collection Account"). A third sub-account will be
established for the benefit of the Series 1997 1/N1 Noteholders
(such sub-account, the "Series 1997 1/N1 Excess Funding Account").
(b) The Trustee will further divide the Series 1997 1/N1
Collection Account by creating an additional administrative
sub-account for the Series 1997 1/N1 Noteholders (such sub-account,
the "Series 1997 1/N1 Accrued Interest Account").
(c) All Collections in respect of the Group I Collateral
and allocable to the Group I Series of Notes shall be allocated to
the Group I Collection Account. All Collections in the Group I
Collection Account allocable to the Series 1997 1/N1 Notes and the
Series 1997 1/N1 Available Subordinated Amount shall be
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allocated to the Series 1997 1/N1 Collection Account as provided
hereinbelow.
Section 4.7 Allocations with Respect to the Series 1997 1/N1
Notes. The proceeds from the sale of the Series 1997 1/N1 Notes, together
with any funds deposited with RCFC by DTAG, will, on the Series 1997 1/N1
Closing Date, be deposited by the Trustee into the Collection Account and,
concurrently with such initial deposit, allocated by the Trustee to the
Series 1997 1/N1 Excess Funding Account. On each Business Day on which
Collections are deposited into the Series 1997 1/N1 Collection Account
(each such date, a "Series 1997 1/N1 Deposit Date"), the Mater Servicer
will direct the Trustee in writing to allocate all amounts deposited
into the Series 1997 1/N1 Collection Account in accordance with the
provisions of this Section 4.7:
(a) Allocations During the Revolving Period. During the Series
1997 1/N1 Revolving Period, the Master Servicer will direct the Trustee to
allocate, prior to 1:00 p.m. (New York City time) on each Series 1997 1/N1
Deposit Date, all amounts deposited into the Group I Collection Account as
set forth below:
(i) with respect to all Collections (including
Recoveries):
(1) allocate to the Series 1997 1/N1 Collection
Account an amount equal to the Series 1997 1/N1 Interest
Collections received on such day. All such amounts
allocated to the Series 1997 1/N1 Collection Account
shall be further allocated to the Series 1997 1/N1
Accrued Interest Account; provided, however, that if
with respect to any Related Month the aggregate of all
such amounts allocated to the Series 1997 1/N1 Accrued
Interest Account during such Related Month exceeds the
amount of interest and fees due and payable in respect
of the Series 1997 1/N1 Notes on the Payment Date next
succeeding such Related Month pursuant to Sections
4.8(a), (b), and (c), then the amount of such excess
shall be allocated to the Series 1997 1/N1 Excess
Funding Account;
(2) allocate to the Series 1997 1/N1 Excess
Funding Account an amount equal to the Series 1997 1/N1
Invested Percentage (as of such day) of the aggregate
amount of Collections
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that are Principal Collections on such day (for any such
day, such amount, the "Series 1997 1/N1 Principal
Allocation"); and
(3) allocate to the Retained Distribution Account
an amount equal to (x) the applicable Retained Interest
Percentage (as of such day) of the aggregate amount of
Collections that are Principal Collections on such date,
minus (y) any amounts, other than Servicing Fees, which
have been withheld by the Master Servicer pursuant to
Section 4.2(c) of the Base Indenture to the extent such
amounts withheld under Section 4.2(c) of the Base
Indenture represent all or part of the Retained Amount;
(ii) with respect to all Recoveries:
(1) allocate an amount equal to the Series 1997
1/N1 Invested Percentage (as of such day) of the
aggregate amount of Recoveries on such day, first, to
replenish the Class A Invested Amount, pro rata
among the sub-classes comprising the Class A Invested
Amount, to the extent that the Class A Invested Amount
has theretofore been reduced as a result of any Losses
allocated thereto pursuant to clause (iii) below and
not replenished pursuant to this clause (ii); second,
to replenish the Class B Invested Amount, pro rata
among the sub-classes comprising the Class B Invested
Amount, to the extent that the Class B Invested Amount
has theretofore been reduced as a result of any Losses
allocated thereto pursuant to clause (iii) below and
not replenished pursuant to this clause (ii)); third,
to replenish the Class C Invested Amount, pro rata
among the sub-classes comprising the Class C Invested
Amount, to the extent that the Class C Invested Amount
has theretofore been reduced as a result of any Losses
allocated thereto pursuant to clause (iii) below and
not replenished pursuant to this clause (ii)); fourth,
to replenish the Series 1997 1/N1 Cash Collateral
Account to the extent withdrawals have theretofore been
made pursuant to Section 4.19(b) as a result of any
Losses allocated to the Demand Note pursuant to clause
(iii) below that have not been paid under such Demand
Note and not replenished pursuant to this clause (ii);
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fifth, to replenish the Series 1997 1/N1 Available
Subordinated Amount to the extent that the Series 1997
1/N1 Available Subordinated Amount has theretofore been
reduced as a result of any Losses allocated thereto
pursuant to clause (iii) below and not replenished
pursuant to this clause (ii); and sixth, any remaining
Recoveries not so allocated shall be released to the
Issuer and available, at the Issuer's option, to be
loaned to DTAG under the Demand Note or used for other
corporate purposes; and
(2) allocate to the Retained Amount an amount
equal to the Retained Interest Percentage (as of such
day) of the aggregate amount of Recoveries on such date
to the extent that the Retained Amount has theretofore
been reduced as a result of any Losses allocated thereto
pursuant to clause (iii) below and not replenished
pursuant to this clause (ii);
(iii) with respect to all Losses:
(1) allocate an amount equal to the Series 1997
1/N1 Invested Percentage (as of such day) of the
aggregate amount of Losses on such day, first, to
reduce the Series 1997 1/N1 Available Subordinated
Amount until the Series 1997 1/N1 Available
Subordinated Amount has been reduced to zero; second,
allocate remaining losses to making a claim under the
Demand Note until such claim would reduce the Demand
Note to zero; third, allocate remaining losses to
reduce the Class C Invested Amount on a pro rata basis
among the sub-classes comprising the Class C Invested
Amount, until the Class C Invested Amount has been
reduced to zero; fourth, allocate remaining Losses to
reduce the Class B Invested Amount on a pro rata basis
among the sub-classes comprising the Class B Invested
Amount until the Class B Invested Amount has been
reduced to zero; and fifth, allocate remaining Losses
to reduce the Class A Invested Amount on a pro rata
basis among the sub-classes comprising the Class A
Invested Amount until the Class A Invested Amount has
been reduced to zero; and
(2) allocate to the Retained Amount an amount
equal to the Retained Interest
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Percentage (as of such day) of the aggregate amount of
such Losses on such day, which amount shall reduce the
Retained Amount.
(iv) with respect to all Lease Payment Recoveries:
(1) allocate an amount equal to the Series 1997
1/N1 Invested Percentage (as of such day) of the
aggregate amount of Lease Payment Recoveries on such
day, first, to replenish the Class A Invested Amount,
pro rata among the sub-classes comprising the Class A
Invested Amount, to the extent that the Class A
Invested Amount has theretofore been reduced as a
result of any Lease Payment Losses allocated thereto
pursuant to clause (v) below and not replenished
pursuant to this clause (iv); second, to replenish the
Class B Invested Amount, pro rata among the sub-classes
comprising the Class B Invested Amount, to the extent
that the Class B Invested Amount has theretofore been
reduced as a result of any Lease Payment Losses
allocated thereto pursuant to clause (v) below and not
replenished pursuant to this clause (iv)); third, to
replenish the Class C Invested Amount, pro rata among
the subclasses comprising the Class C Invested Amount,
to the extent that the Class C Invested Amount has
theretofore been reduced as a result of any Lease
Payment Losses allocated thereto pursuant to clause (v)
below and not replenished pursuant to this clause
(iv)); fourth, to replenish the Series 1997 1/N1 Cash
Collateral Account to the extent withdrawals have
theretofore been made pursuant to Section 4.18(b) as a
result of any Lease Payment Losses allocated to the
Series 1997 1/N1 Letter of Credit pursuant to clause
(v) below that have not been paid under such Demand
Note and not replenished pursuant to this clause (iv);
fifth, to replenish the Series 1997 1/N1 Available
Subordinated Amount to the extent that the Series 1997
1/N1 Available Subordinated Amount has theretofore been
reduced as a result of any Lease Payment Losses
allocated thereto pursuant to clause (v) below and not
replenished pursuant to this clause (iv); and sixth,
any remaining Recoveries not so allocated shall be
released to the Issuer and available, at the Issuer's
option, to be
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loaned to DTAG under the Demand Note or used for other
corporate purposes; and
(2) allocate to the Retained Amount an amount
equal to the Retained Interest Percentage (as of such
day) of the aggregate amount of Recoveries on such date
to the extent that the Retained Amount has theretofore
been reduced as a result of any Losses allocated thereto
pursuant to clause (v) below and not replenished
pursuant to this clause (ii));
(v) with respect to all Lease Payment Losses:
(1) allocate an amount equal to the Series 1997
1/N1 Invested Percentage (as of such day) of the
aggregate amount of Lease Payment Losses on such day,
first, to reduce the Series 1997 1/N1 Available
Subordinated Amount until the Series 1997 1/N1
Available Subordinated Amount has been reduced to zero;
second, allocate remaining Lease Payment Losses to
making a drawing under the Series 1997 1/N1 Letter of
Credit until such drawing would reduce the Series 1997
1/N1 Letter of Credit Amount to zero; third, allocate
remaining Lease Payment Losses to reduce the Class C
Invested Amount on a pro rata basis among the
sub-classes comprising the Class C Invested Amount,
until the Class C Invested Amount has been reduced to
zero; fourth, allocate remaining Lease Payment Losses
to reduce the Class B Invested Amount on a pro rata
basis among the sub-classes comprising the Class B
Invested Amount until the Class B Invested Amount has
been reduced to zero; and fifth, allocate remaining
Lease Payment Losses to reduce the Class A Invested
Amount on a pro rata basis among the sub-classes
comprising the Class A Invested Amount until the Class
A Invested Amount has been reduced to zero; and
(2) allocate to the Retained Amount an amount
equal to the Retained Interest Percentage (as of such
day) of the aggregate amount of such Lease Payment
Losses on such day, which amount shall reduce the
Retained Amount.
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(b) Allocations During the Series 1997 1/N1 Controlled
Amortization Period. During the Series 1997 1/N1 Controlled Amortization
Period, the Master Servicer will direct the Trustee to allocate, prior to
1:00 p.m. (New York City time) on each Series 1997 1/N1 Deposit Date, all
amounts deposited into the Group I Collection Account as set forth below:
(i) with respect to all Collections (including
Recoveries):
(1) allocate to the Series 1997 1/N1 Collection
Account an amount determined as set forth in Section
4.7(a)(i)(1) above for such day, which amount shall be
deposited in the Series 1997 1/N1 Accrued Interest
Account and, as to the extent provided in Section
4.7(a)(i)(1) above, allocated to the Series 1997 1/N1
Excess Funding Account;
(2) (A) during the Class A-1 Controlled
Amortization Period, allocate to the Series 1997 1/N1
Collection Account an amount equal to the Series 1997
1/N1 Principal Allocation for such day, which amount
shall be used to make principal payments in respect of
the Class A-1 Notes; provided, however, that if the
Series 1997 1/N1 Principal Allocation exceeds the Class
A-1 Controlled Distribution Amount for the Related
Month such excess shall be allocated to the Series 1997
1/N1 Excess Funding Account; (B) during the Class A-2
Controlled Amortization Period, allocate to the Series
1997 1/N1 Collection Account an amount equal to the
Series 1997 1/N1 Principal Allocation for such day,
which amount shall be used to make principal payments
in respect of the Class A-2 Notes; provided, however,
that if the Series 1997 1/N1 Principal Allocation
exceeds the Class A-2 Controlled Distribution Amount
for the Related Month, then such excess shall be
allocated to the Series 1997 1/N1 Excess Funding
Account; (C) during the Class A-3 Controlled
Amortization Period, allocate to the Series 1997 1/N1
Collection Account an amount equal to the Series 1997
1/N1 Principal Allocation for such day, which amount
shall be used to make principal payments in respect of
the Class A-3 Notes; provided, however, that if the
Series 1997 1/N1 Principal Allocation exceeds the Class
A-3 Controlled Distribution Amount for the Related
Month, then such excess shall
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be allocated to the Series 1997 1/N1 Excess Funding
Account; (D) during the Class B-1 Controlled
Amortization Period, allocate to the Series 1997 1/N1
Collection Account an amount equal to the Series 1997
1/N1 Principal Allocation for such day, which amount
shall be used to make principal payments in respect to
the Class B-1 Notes; provided, however, that if the
Series 1997 1/N1 Principal Allocation exceeds the Class
B-1 Controlled Distribution Amount, then such excess
shall be allocated to the Series 1997 1/N1 Excess
Funding Account for the Related Month; (E) during the
Class B-2 Controlled Amortization Period, allocate to
the Series 1997 1/N1 Collection Account an amount equal
to the Series 1997 1/N1 Principal Allocation for such
day, which amount shall be used to make principal
payments in respect of the Class B-2 Notes; provided,
however, that if the Series 1997 1/N1 Principal
Allocation exceeds the Class B-2 Controlled
Distribution Amount for the Related Month, then such
excess will be allocated to the Series 1997 1/N1 Excess
Funding Account for the Related Month; (F) during the
Class B-3 Controlled Amortization Period, allocate to
the Series 1997 1/N1 Collection Account an amount equal
to the Series 1997 1/N1 Principal Allocation for such
day, which amount shall be used to make principal
payments in respect of the Class B- 3 Notes; provided,
however, that if the Series 1997 1/N1 Principal
Allocation exceeds the Class B-3 Controlled
Distribution Amount for the Related Month, then such
excess shall be allocated to the Series 1997 1/N1
Excess Funding Account for the Related Month; (G)
during the Class C-1 Controlled Amortization Period,
allocate to the Series 1997 1/N1 Collection Account an
amount equal to the Series 1997 1/N1 Principal
Allocation for such day, which amount shall be used to
make principal payments in respect of the Class C-1
Notes; provided, however, that if the Series 1997 1/N1
Principal Allocation exceeds the Class C-1 Controlled
Distribution Amount for the Related Month, then such
excess shall be allocated to the Series 1997 1/N1
Excess Funding Account; (H) during the Class C-2
Controlled Amortization Period, allocate to the Series
1997 1/N1 Collection Account an amount equal to the
Series 1997 1/N1 Principal Allocation for such day,
which amount shall
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be used to make principal payments in respect of the
Class C-2 Notes; provided, however, that if the Series
1997 1/N1 Principal Allocation exceeds the Class C-2
Controlled Distribution Amount for the Related Month,
then such excess shall be allocated to the Series 1997
1/N1 Excess Funding Account; and (I) during the Class
C-3 Controlled Amortization Period, allocate to the
Series 1997 1/N1 Collection Account an amount equal to
the Series 1997 1/N1 Principal Allocation for such day,
which amount shall be used to make principal payments
in respect of the Class C-3 Notes; provided, however,
that if the Series 1997 1/N1 Principal Allocation
exceeds the Class C-3 Controlled Distribution Amount
for the Related Month, then such excess shall be
allocated to the Series 1997 1/N1 Excess Funding
Account; and
(3) allocate to the Retained Distribution Account
an amount determined as set forth in Section
4.7(a)(i)(3) above for such day;
(ii) with respect to all Recoveries:
(1) increase the Class A Invested Amount, increase
the Class B Invested Amount, increase the Class C
Invested Amount, replenish the Series 1997 1/N1 Cash
Collateral Account to the extent withdrawals have
theretofore been made pursuant to Section 4.19(b) as a
result of any Losses allocated to the Demand Note
pursuant to clause (iii) below that have not been paid
under such Demand Note and not replenished under this
clause (ii), increase the Series 1997 1/N1 Available
Subordinated Amount, and release any remaining
Recoveries to the Issuer, as and to the extent provided
in Section 4.7(a)(ii)(1) above for such day; and
(2) allocate to the Retained Amount an amount
determined as set forth in Section 4.7(a)(ii)(2) above
for such day;
(iii) with respect to all Losses:
(1) decrease the Series 1997 1/N1 Available
Subordinated Amount, make a claim under the Demand Note,
decrease the Class C Invested Amount, decrease the Class
B
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Invested Amount and decrease the Class A Invested Amount
as and to the extent provided in Section 4.7(a)(iii)(1)
above for such day; and
(2) allocate to the Retained Amount an amount
determined as set forth in Section 4.7(a)(iii)(2) above
for such day, which amount shall reduce the Retained
Amount.
(iv) with respect to all Lease Payment Recoveries:
(1) increase the Class A Invested Amount, increase
the Class B Invested Amount, increase the Class C
Invested Amount, replenish the Series 1997 1/N1 Cash
Collateral Account to the extent withdrawals have
theretofore been made pursuant to Section 4.18(b) as a
result of any Lease Payment Losses allocated to the
Series 1997 1/N1 Letter of Credit pursuant to clause (v)
below and not replenished under this clause (iv); and
increase the Series 1997 1/N1 Available Subordinated
Amount as and to the extent provided in Section
4.7(a)(iv)(1) above for such day; and
(2) allocate to the Retained Amount an amount
determined as set forth in Section 4.7(a)(iv)(2) above
for such day;
(v) with respect to all Lease Payment Losses:
(1) decrease the Series 1997 1/N1 Available
Subordinated Amount, make a claim under the Series
1997 1/N1 Letter of Credit, decrease the Class C
Invested Amount, decrease the Class B Invested
Amount and decrease the Class A Invested Amount as and
to the extent provided in Section 4.7(a)(v)(1) above
for such day; and
(2) allocate to the Retained Amount an amount
determined as set forth in Section 4.7(a)(v)(2) above
for such day, which amount shall reduce the Retained
Amount.
(c) Allocations During the Series 1997 1/N1 Rapid
Amortization Period. During the Series 1997 1/N1 Rapid
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Amortization Period, the Master Servicer will direct the Trustee to
allocate, prior to 1:00 p.m. (New York City time) on each Series 1997 1/N1
Deposit Date, all amounts deposited into the Group I Collection Account as
set forth below:
(i) with respect to all Collections (including
Recoveries):
(1) allocate to the Series 1997 1/N1 Collection
Account an amount determined as set forth in Section
4.7(a)(i)(1) above for such day, which amount shall be
deposited in the Series 1997 1/N1 Accrued Interest
Account and, as and to the extent provided in Section
4.7(a)(i)(1) above, allocated to the Series 1997 1/N1
Excess Funding Account;
(2) allocate to the Series 1997 1/N1 Collection
Account an amount equal to the Series 1997 1/N1
Principal Allocation for such day, which amounts shall
be used to make principal payments on a pro rata basis
in respect of the Class A Notes and, after the Class A
Notes have been paid in full, shall be used to make
principal payments in respect of the Class B Notes and,
after the Class B Notes have been paid in full, shall be
used to make principal payments in respect of the Class
C Notes; and
(3) allocate to the Retained Distribution Account
an amount determined as set forth in Section
4.7(a)(i)(3) above for such day;
(ii) with respect to all Recoveries:
(1) increase the Class A Invested Amount, increase
the Class B Invested Amount, increase the Class C
Invested Amount, replenish the Series 1997 1/N1 Cash
Collateral Account to the extent withdrawals have
theretofore been made pursuant to Section 4.19(b) as a
result of any Losses allocated to the Demand Note
pursuant to clause (iii) below that have not been paid
under such Demand Note and not replenished under this
clause (ii) increase the Series 1997 1/N1 Available
Subordinated Amount, and release any remaining
Recoveries to the Issuer, as and to the extent provided
in Section 4.7(a)(ii)(1) above for such day; and
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(2) allocate to the Retained Amount an amount
determined as set forth in Section 4.7(a)(ii)(2) above
for such day;
(iii) with respect to all Losses:
(1) decrease the Series 1997 1/N1 Available
Subordinated Amount, make a claim under the Demand Note,
decrease the Class C Invested Amount, decrease the Class
B Invested Amount and decrease the Class A Invested
Amount as and to the extent provided in Section
4.7(a)(iii)(1) above for such day; and
(2) allocate to the Retained Amount an amount
determined as set forth in Section 4.7(a)(iii)(2) above
for such day, which amount shall reduce the Retained
Amount.
(iv) with respect to all Lease Payment Recoveries:
(1) increase the Class A Invested Amount, increase
the Class B Invested Amount, increase the Class C
Invested Amount, replenish the Series 1997 1/N1 Cash
Collateral Account to the extent withdrawals have
theretofore been made pursuant to Section 4.18(b) as a
result of any Lease Payment Losses allocated to the
Series 1997 1/N1 Letter of Credit pursuant to clause (v)
below and not replenished under this clause (iv); and
increase the Series 1997 1/N1 Available Subordinated
Amount as and to the extent provided in Section
4.7(a)(iv)(1) above for such day; and
(2) allocate to the Retained Amount an amount
determined as set forth in Section 4.7(a)(iv)(2) above
for such day;
(v) with respect to all Lease Payment Losses:
(1) decrease the Series 1997 1/N1 Available
Subordinated Amount, make a claim under the Series 1997
1/N1 Letter of Credit, decrease the Class C Invested
Amount, decrease the Class B Invested Amount and
decrease the Class A Invested Amount as and
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to the extent provided in Section 4.7(a)(v)(1) above for
such day; and
(2) allocate to the Retained Amount an amount
determined as set forth in Section 4.7(a)(v)(2) above
for such day, which amount shall reduce the Retained
Amount.
(d) Additional Allocations. Notwithstanding the foregoing
provisions of this Section 4.7,
(i) provided the Series 1997 1/N1 Rapid Amortization Period
has not commenced, amounts allocated to the Series 1997 1/N1 Excess
Funding Account that are not required to make payments under the
Series 1997 1/N1 Notes pursuant hereto may, as and to the extent
permitted in the related Supplements, be used to pay the principal
amount of other Group I Series of Notes that are then in
amortization and, after such payment, any remaining funds may, at
RCFC's option, be (i) used to finance or acquire Vehicles, to the
extent Eligible Vehicles have been requested by any of the Lessees
under the Master Lease or (ii) transferred, on any Payment Date, to
the Retained Distribution Account, to the extent that the Retained
Amount equals or exceeds zero after giving effect to such payment
and so long as no Series 1997 1/N1 Enhancement Deficiency or Asset
Amount Deficiency exists or would result therefrom; provided,
however, that funds remaining after the application of such funds to
the payment of the principal amount of other Group I Series of Notes
that are in amortization and to the financing or acquisition of
Group I Vehicles may be transferred to the Retained Distribution
Account on a day other than a Payment Date if the Master Servicer
furnishes to the Trustee an Officer's Certificate to the effect that
such transfer will not cause any of the foregoing deficiencies to
occur either on the date that such transfer is made or, in the
reasonable anticipation of the Master Servicer, on the next Payment
Date. Funds in the Retained Distribution Account shall, at the
option of RCFC, be available to finance or acquire Vehicles, to the
extent Eligible Vehicles have been requested by any of the Lessees
under the Master Lease, or for distribution to the Retained
Interestholder (including any advances made under the Demand Note);
(ii) in the event that the Master Servicer is not DTAG or an
Affiliate of DTAG, the Master Servicer shall not be entitled to
withhold any amounts pursuant to Section 4.2(c) and the Trustee
shall deposit amounts payable to DTAG in its capacity as the Master
Servicer
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in the Collection Account pursuant to the provisions of Section 4.2
on each Series 1997 1/N1 Deposit Date;
(iii) any amounts withheld by the Master Servicer and not
deposited in the Collection Account pursuant to Section 4.2(c) shall
be deemed to be deposited in the Collection Account on the date such
amounts are withheld for purposes of determining the amounts to be
allocated pursuant to this Section 4.7;
(iv) if there is more than one Series of Group I Series of
Notes outstanding, then Sections 4.7(a)(i)(3), 4.7(b)(i)(3) and
4.7(c)(i)(3) above shall not be duplicative with any similar
provisions contained in any other Supplement and the Retained
Interestholder shall only be paid such amount once with respect to
any Payment Date; and
(v) RCFC may, from time to time in its sole discretion,
increase the Series 1997 1/N1 Available Subordinated Amount by (a)
(i) allocating to the Series 1997 1/N1 Available Subordinated Amount
Eligible Vehicles theretofore allocated to the Retained Interest and
(ii) delivering to the Trustee an Officer's Certificate affirming
with respect to such Vehicles the representations and warranties set
forth in Section 6.14 (and an Opinion of Counsel to the same effect)
or (b) (i) depositing funds into the Series 1997 1/N1 Excess Funding
Account by transfer from the Retained Distribution Account or
otherwise, and (ii) delivering to the Master Servicer and the
Trustee an Officers' Certificate setting forth the amount of such
funds and stating that such funds shall be allocated to the Series
1997 1/N1 Available Subordinated Amount; provided, however, that (x)
RCFC shall have no obligation to so increase the Series 1997 1/N1
Available Subordinated Amount at any time and (y) RCFC may not
increase the Series 1997 1/N1 Available Subordinated Amount at any
time if the amount of such increase, together with the sum of the
amounts of all prior increases, if any, of the Series 1997 1/N1
Available Subordinated Amount would exceed the applicable Series
1997 1/N1 Available Subordinated Amount Maximum Increase, excluding
from such calculation any increase in the Series 1997 1/N1 Available
Subordinated Amount (1) through Recoveries or from funds
constituting repayments of principal under the Demand Note, or (2)
relating to an increase in the Minimum Class A Enhancement Amount
that results from (a) an increase in the ratio of Group I Vehicles
that are Non-Program Vehicles to all Group I Vehicles, (b) a
reduction in the aggregate amount of cash and Permitted Investments
in the Collection Account and the Master Collateral Account that are
allocable to the Group I
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Series of Notes, or (c) a decrease in Market Value Adjustment
Percentage.
Section 4.8 Monthly Payments.
On each Determination Date, as provided below, the Master
Servicer shall instruct the Paying Agent to withdraw, and on the following
Payment Date the Paying Agent, acting in accordance with such instructions,
shall withdraw the amounts required to be withdrawn from the Group I
Collection Account pursuant to Sections 4.8(a) through (d) below in respect
of all funds available from Series 1997 1/N1 Interest Collections processed
since the preceding Payment Date and allocated to the holders of the Series
1997 1/N1 Notes.
(a) Note Interest with respect to the Class A Notes. On each
Determination Date, the Master Servicer shall instruct the Trustee or the
Paying Agent to withdraw on the next succeeding Payment Date from the
Series 1997 1/N1 Accrued Interest Account the lesser of (i) the amount on
deposit in the Series 1997 1/N1 Accrued Interest Account and (ii) an amount
(the "Class A Interest Amount") equal to the sum of (x) an amount equal to
the interest accrued on the Class A Notes for the related Series 1997 1/N1
Interest Period which will be equal to the sum of (A) the product of (1)
the Class A-1 Rate for the related Series 1997 1/N1 Interest Period and (2)
the Aggregate Principal Balance of the Class A-1 Notes as of the previous
Payment Date after giving effect to any principal payments made on such
Payment Date (or in the case of the initial Payment Date, the Class A-1
Initial Invested Amount), divided by twelve, plus (B) the product of (1)
the Class A-2 Rate for the related Series 1997 1/N1 Interest Period and (2)
the Aggregate Principal Balance of the Class A-2 Notes as of the previous
Payment Date after giving effect to any principal payments made on such
Payment Date (or in the case of the initial Payment Date, the Class A-2
Initial Invested Amount), divided by twelve, plus (C) the product of (1)
the Class A-3 Rate for the related Series 1997 1/N1 Interest Period and (2)
the Aggregate Principal Balance of the Class A-3 Notes as of the previous
Payment Date after giving effect to any principal payments made on such
Payment Date (or in the case of the initial Payment Date, the Class A-3
Initial Invested Amount), divided by twelve, plus (y) an amount equal to
the amount of any unpaid Class A Deficiency Amount (as defined below) as of
the preceding Payment Date (together with any accrued interest on such
Class A Deficiency Amount). On such Determination Date, the Servicer shall
further instruct the Trustee or the Paying Agent to withdraw on the next
succeeding Payment Date from the Series 1997 1/N1 Excess Funding Account
the lesser of (i) the amount on deposit in the Series 1997 1/N1 Excess
Funding Account and (ii) the excess, if any, of the Class A Interest Amount
over the amount withdrawn from the Series
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1997 1/N1 Accrued Interest Account pursuant to the preceding sentence. If
the amounts described in this Section 4.8(a) are insufficient, after taking
into account any funds available in the Series 1997 1/N1 Excess Funding
Account and any portion of the Series 1997 1/N1 Letter of Credit Amount
applied as described in Section 4.9(a) of this Supplement, to pay the Class
A Interest Amount on any Payment Date, payments of interest to the Class A
Noteholders will be reduced by the amount of such shortfall. The amount, if
any, of such shortfall on any Payment Date shall be referred to as the
"Class A Deficiency Amount." Interest shall accrue on the Class A
Deficiency Amount at the applicable Class A Note Rate. On the following
Payment Date, the Trustee shall withdraw the Class A Interest Amount from
the Series 1997 1/N1 Accrued Interest Account and, to the extent provided
in Section 4.9(a) of this Supplement, amounts withdrawn from the Series
1997 1/N1 Excess Funding Account and any applied portion of the Series 1997
1/N1 Letter of Credit Amount, and shall deposit such amount in the Class A
Distribution Account; provided that the sum of the amounts to be withdrawn
from the Series 1997 1/N1 Excess Funding Account pursuant to this Section
4.8(a) and Sections 4.8(b) and (c) of this Supplement shall not exceed for
any Determination Date the Series 1997 1/N1 Available Subordinated Amount
at such time.
(b) Note Interest with respect to the Class B Notes. On each
Determination Date, provided that all payments on account of interest that
are required to be made to the Class A Noteholders are available in the
Class A Distribution Account, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw on the next succeeding Payment Date
from the Series 1997 1/N1 Accrued Interest Account (subject to the
provisions of Section 4.14 of this Supplement) the lesser of (i) the amount
remaining on deposit in the Series 1997 1/N1 Accrued Interest Account after
withdrawal of the amounts specified in clause (a) above and (ii) an amount
(the "Class B Interest Amount") equal to the sum of (x) an amount equal to
the interest accrued for the related Series 1997 1/N1 Interest Period which
will be equal to the sum of (A) the product of (1) the Class B-1 Rate for
the related Series 1997 1/N1 Interest Period and (2) the Aggregate
Principal Balance of the Class B-1 Notes as of the previous Payment Date
after giving effect to any principal payments made on such Payment Date (or
in the case of the initial Payment Date, the Class B-1 Initial Invested
Amount), divided by twelve, plus (B) the product of (1) the Class B-2 Rate
for the related Series 1997 1/N1 Interest Period and (2) the Aggregate
Principal Balance of the Class B-2 Notes as of the previous Payment Date
after giving effect to any principal payments made on such Payment Date (or
in the case of the initial Payment Date, the Class B-2 Initial Invested
Amount), divided by twelve, plus (C)
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the product of (1) the Class B-3 Rate for the related Series 1997 1/N1
Interest Period and (2) the Aggregate Principal Balance of the Class B-3
Notes as of the previous Payment Date after giving effect to any principal
payments made on such Payment Date (or in the case of the initial Payment
Date, the Class B-3 Initial Invested Amount), divided by twelve, plus (y)
an amount equal to the amount of any unpaid Class B Deficiency Amount (as
defined below) as of the preceding Payment Date (together with any accrued
interest on such Class B Deficiency Amount). If the amounts described in
this Section 4.8(b) are insufficient, after taking into account any funds
available in the Series 1997 1/N1 Excess Funding Account and any portion of
the Series 1997 1/N1 Letter of Credit Amount applied as described in
Section 4.9(b) of this Supplement subject to the provisions of Section 4.14
of this Supplement, to pay the Class B Interest Amount on any Payment Date,
payments of interest to the Class B Noteholders will be reduced by the
amount of such shortfall. The amount, if any, of such shortfall on any
Payment Date shall be referred to as the "Class B Deficiency Amount".
Interest shall accrue on the Class B Deficiency Amount at the Class B Note
Rate. On the following Payment Date, provided that all payments on account
of interest that are required to be made to the Class A Noteholders are
available in the Class A Distribution Account (including, without
limitation, all accrued interest, the Class A Deficiency Amount, and all
interest accrued on such Class A Deficiency Amount), the Trustee shall
withdraw the Class B Interest Amount from the Series 1997 1/N1 Accrued
Interest Account, amounts withdrawn from the Series 1997 1/N1 Excess
Funding Account and any applied portion of the Series 1997 1/N1 Letter of
Credit Amount, and shall deposit such amount in the Class B Distribution
Account; provided that the sum of the amounts to be withdrawn from the
Series 1997 1/N1 Excess Funding Account pursuant to this Section 4.8(b) and
Sections 4.8(a) and (c) of this Supplement shall not exceed for any
Determination Date the Series 1997 1/N1 Available Subordinated Amount at
such time.
(c) Note Interest with respect to the Class C Notes. On each
Determination Date, provided that all payments on account of interest that
are required to be made to the Class A Noteholders are available in the
Class A Distribution Account and all payments on account of interest that
are required to be made to the Class B Noteholders are available in the
Class B Distribution Account, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw on the next succeeding Payment Date
from the Series 1997 1/N1 Accrued Interest Account (subject to the
provisions of Section 4.16 of this Supplement) the lesser of (i) the amount
remaining on deposit in the Series 1997 1/N1 Accrued Interest Account after
withdrawal of the amounts specified in clauses (a) and (b) above and (ii)
an amount (the
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"Class C Interest Amount") equal to the sum of (x) an amount equal to the
interest accrued for the related Series 1997 1/N1 Interest Period which
will be equal to the sum of (A) the product of (1) the Class C-1 Rate for
the related Series 1997 1/N1 Interest Period and (2) the Aggregate
Principal Balance of the Class C-1 Notes as of the previous Payment Date
after giving effect to any principal payments made on such Payment Date (or
in the case of the initial Payment Date, the Class C-1 Initial Invested
Amount), divided by twelve, plus (B) the product of (1) the Class C-2 Rate
for the related Series 1997 1/N1 Interest Period and (2) the Aggregate
Principal Balance of the Class C-2 Notes as of the previous Payment Date
after giving effect to any principal payments made on such Payment Date (or
in the case of the initial Payment Date, the Class B-2 Initial Invested
Amount), divided by twelve, plus (C) the product of (1) the Class C-3 Rate
for the related Series 1997 1/N1 Interest Period and (2) the Aggregate
Principal Balance of the Class C-3 Notes as of the previous Payment Date
after giving effect to any principal payments made on such Payment Date (or
in the case of the initial Payment Date, the Class C-3 Initial Invested
Amount), divided by twelve, plus (y) an amount equal to the amount of any
unpaid Class C Deficiency Amount (as defined below) as of the preceding
Payment Date (together with any accrued interest on such Class C Deficiency
Amount). If the amounts described in this Section 4.8(c) are insufficient,
after taking into account any funds available in the Series 1997 1/N1
Excess Funding Account and any portion of the Series 1997 1/N1 Letter of
Credit Amount applied as described in Section 4.9(c) of this Supplement and
subject to the provisions of Section 4.16 of this Supplement, to pay the
Class C Interest Amount on any Payment Date, payments of interest to the
Class C Noteholders will be reduced by the amount of such shortfall. The
amount, if any, of such shortfall on any Payment Date shall be referred to
as the "Class C Deficiency Amount". Interest shall accrue on the Class C
Deficiency Amount at the Class C Note Rate. On the following Payment Date,
provided that all payments on account of interest that are required to be
made to the Class A Noteholders are available in the Class A Distribution
Account (including, without limitation, all accrued interest, the Class A
Deficiency Amount, and all interest accrued on such Class A Deficiency
Amount) and all payments on account of interest that are required to be
made to the Class B Noteholders are available in the Class B Distribution
Account (including, without limitation, all accrued interest, the Class B
Deficiency Amount, and all interest accrued on such Class B Deficiency
Amount), the Trustee shall withdraw the Class C Interest Amount from the
Series 1997 1/N1 Accrued Interest Account, amounts withdrawn from the
Series 1997 1/N1 Excess Funding Account and any applied portion of the
Series 1997 1/N1 Letter of Credit Amount, and shall deposit such amount in
the
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Class C Distribution Account; provided that the sum of the amounts to be
withdrawn from the Series 1997 1/N1 Excess Funding Account pursuant to
Sections 4.8(a) and (b) of this Supplement and this Section 4.8(c) shall
not exceed for any Determination Date the Series 1997 1/N1 Available
Subordinated Amount at such time.
(d) Servicing Fee. On each Payment Date, the Master Servicer
shall, after making all distributions required to be made pursuant to
Sections 4.8(a) through (c) of this Supplement or in the event that on the
related Determination Date DTAG or any Affiliate thereof shall no longer
be the Master Servicer, prior to such deposits being made, instruct each
of the Trustee and the Paying Agent to withdraw from the Series 1997 1/N1
Accrued Interest Account, for payment to the Master Servicer, an amount
equal to (a) the Series 1997 1/N1 Investor Monthly Servicing Fee and any
Series 1997 1/N1 Monthly Supplemental Servicing Fee accrued during the
preceding Series 1997 1/N1 Interest Period, plus (b) all accrued and
unpaid Series 1997 1/N1 Investor Monthly Servicing Fees and any accrued
and unpaid Series 1997 1/N1 Monthly Supplemental Servicing Fees, minus (c)
the amount of any Series 1997 1/N1 Investor Monthly Servicing Fees and
Series 1997 1/N1 Monthly Supplemental Servicing Fees withheld by the
Master Servicer pursuant to the Base Indenture. On such Payment Date, the
Trustee or the Paying Agent, as applicable, shall withdraw such amount
from the Series 1997 1/N1 Accrued Interest Account and remit such amount
to the Master Servicer.
Section 4.9 Payment of Note Interest.
(a) Class A Notes. On each Payment Date, (i) to the extent any
Class A Monthly Interest Shortfall exists after the deposit required
pursuant to Section 4.7 of this Supplement has been made, the Master
Servicer shall instruct the Trustee or the Paying Agent to withdraw from
funds on deposit in the Series 1997 1/N1 Excess Funding Account, an amount
equal to the lesser of (A) the amount on deposit in the Series 1997 1/N1
Excess Funding Account on such Payment Date in an amount not to exceed the
Series 1997 1/N1 Available Subordinated Amount at such time, and (B) the
remaining amount of the Class A Monthly Interest Shortfall, and deposit
such amount in the Class A Distribution Account to pay the Class A Monthly
Interest and any unpaid Class A Deficiency Amounts with respect to such
Class A Monthly Interest (together with accrued interest on all such
unpaid Class A Deficiency Amounts)and (ii) to the extent any such Class A
Monthly Interest Shortfall remains after the deposit required pursuant to
Section 4.9(a)(i) of this Supplement has been made, if amounts have been
drawn on the Series 1997 1/N1 Letter of Credit and deposited into the
Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this
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Supplement, the Master Servicer shall instruct the Trustee or the Paying
Agent to withdraw from the Series 1997 1/N1 Collection Account on such
Payment Date the lesser of (A) the amount on deposit in the Series 1997
1/N1 Collection Account representing such amount drawn on the Series 1997
1/N1 Letter of Credit and (B) the amount of the remaining Class A Monthly
Interest Shortfall and deposit such amount in the Class A Distribution
Account to pay the Class A Monthly Interest and any unpaid Class A
Deficiency Amounts with respect to such Class A Monthly Interest (together
with accrued interest on all such unpaid Class A Deficiency Amounts). On
each Payment Date the Paying Agent shall, in accordance with Section 5.1 of
the Base Indenture and the Master Servicer's most recent Monthly
Certificate, pay to the Class A Noteholders from the Class A Distribution
Account the amount deposited in the Class A Distribution Account for the
payment of the Class A Interest Amount pursuant to Section 4.8(a) of this
Supplement and clauses (i) and (ii) of this Section 4.9(a).
(b) Class B Notes. On each Payment Date, (i) to the extent any
Class B Monthly Interest Shortfall exists after the deposit required
pursuant to Section 4.7 of this Supplement has been made, the Master
Servicer shall instruct the Trustee or the Paying Agent to withdraw from
funds on deposit in the Series 1997 1/N1 Excess Funding Account an amount
equal to the lesser of (A) the amount on deposit in the Series 1997 1/N1
Excess Funding Account on such Payment Date (after application of any
amounts pursuant to Section 4.9(a) of this Supplement) in an amount not to
exceed the Series 1997 1/N1 Available Subordinated Amount at such time
(after application of any amounts pursuant to Section 4.9(a) of this
Supplement), and (B) the remaining amount of the Class B Monthly Interest
Shortfall, and deposit such amount in the Class B Distribution Account to
pay the Class B Monthly Interest and any unpaid Class B Deficiency Amounts
with respect to such Class B Monthly Interest (together with accrued
interest on all such unpaid Class B Deficiency Amounts) and (ii) to the
extent any such Class B Monthly Interest Shortfall remains after the
deposit required pursuant to Section 4.9(b)(i) of this Supplement has been
made, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit
and deposited into the Series 1997 1/N1 Collection Account pursuant to
Section 4.18 of this Supplement, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw from the Series 1997 1/N1
Collection Account on such Payment Date the lesser of (A) the amount on
deposit in the Series 1997 1/N1 Collection Account representing such amount
drawn on the Series 1997 1/N1 Letter of Credit (after application of any
amounts pursuant to Section 4.9(a) of this Supplement) and (B) the amount
of the remaining Class B Monthly Interest Shortfall and deposit such amount
in the Class B Distribution Account to pay the Class B Monthly
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Interest and any unpaid Class B Deficiency Amounts with respect to such
Class B Monthly Interest (together with accrued interest on all such
unpaid Class B Deficiency Amounts). On each Payment Date the Paying Agent
shall, in accordance with Section 5.1 of the Base Indenture and the Master
Servicer's most recent Monthly Certificate, but subject to Section 4.14 of
this Supplement, pay to the Class B Noteholders from the Class B
Distribution Account the amount deposited in the Class B Distribution
Account for the payment of the Class B Interest Amount pursuant to Section
4.8(b) of this Supplement and clauses (i) and (ii) of this Section 4.9(b).
(c) Class C Notes. On each Payment Date, (i) to the extent any
Class C Monthly Interest Shortfall exists after the deposit required
pursuant to Section 4.7 of this Supplement has been made, the Master
Servicer shall instruct the Trustee or the Paying Agent to withdraw from
funds on deposit in the Series 1997 1/N1 Excess Funding Account an amount
equal to the lesser of (A) the amount on deposit in the Series 1997 1/N1
Excess Funding Account on such Payment Date (after application of any
amounts pursuant to Sections 4.9(a) and (b) of this Supplement) in an
amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at
such time (after application of any amounts pursuant to Sections 4.9(a)
and (b) of this Supplement), and (B) the remaining amount of the Class C
Monthly Interest Shortfall, and deposit such amount in the Class C
Distribution Account to pay the Class C Monthly Interest and any unpaid
Class C Deficiency Amounts with respect to such Class C Monthly Interest
(together with accrued interest on all such unpaid Class C Deficiency
Amounts) and (ii) to the extent any such Class C Monthly Interest
Shortfall remains after the deposit required pursuant to Section 4.9(c)(i)
of this Supplement has been made, if amounts have been drawn on the Series
1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1
Collection Account pursuant to Section 4.18 of this Supplement, the Master
Servicer shall instruct the Trustee or the Paying Agent to withdraw from
the Series 1997 1/N1 Collection Account on such Payment Date the lesser of
(A) the amount on deposit in the Series 1997 1/N1 Collection Account
representing such amount drawn on the Series 1997 1/N1 Letter of Credit
(after application of any amounts pursuant to Sections 4.9(a) and 4.9(b)
of this Supplement) and (B) the amount of the remaining Class C Monthly
Interest Shortfall and deposit such amount in the Class C Distribution
Account to pay the Class C Monthly Interest and any unpaid Class C
Deficiency Amounts with respect to such Class C Monthly Interest (together
with accrued interest on all such unpaid Class C Deficiency Amounts). On
each Payment Date the Paying Agent shall, in accordance with Section 5.1
of the Base Indenture and the Master Servicer's most recent Monthly
Certificate, but subject to Section 4.17
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of this Supplement, pay to the Class C Noteholders from the Class C
Distribution Account the amount deposited in the Class C Distribution
Account for the payment of the Class C Interest Amount pursuant to Section
4.8(c) of this Supplement and clauses (i) and (ii) of this Section 4.9(c).
Section 4.10 Payment of Note Principal.
(a) Class A Notes.
(i) Commencing on the second Determination Date after
the commencement of the Class A-1 Controlled Amortization
Period, the Class A-2 Controlled Amortization Period or the
Class A-3 Controlled Amortization Period (as the case may be)
or the first Determination Date after the commencement of the
Series 1997 1/N1 Rapid Amortization Period, the Master
Servicer shall instruct the Trustee or the Paying Agent as
to the following:
(A)(1) the Class A-1 Controlled Distribution
Amount for the Related Month, (2) the amount allocated
to the Class A-1 Notes during the Related Month pursuant
to Section 4.7(b)(i)(2) or 4.7(c)(i)(2) of this
Supplement, as applicable, and (3) the amount, if any,
by which the amount in clause (A)(1) above exceeds the
amount in clause (A)(2) above (the amount of such excess
the "Class A-1 Controlled Distribution Amount
Deficiency"); and
(B)(1) the Class A-2 Controlled Distribution
Amount for the Related Month, (2) the amount allocated
to the Class A-2 Notes during the Related Month pursuant
to Section 4.7(b)(i)(2) or 4.7(c)(i)(2) of this
Supplement, as applicable, and (3) the amount, if any,
by which the amount in clause (B)(1) above exceeds the
amount in clause (B)(2) above (the amount of such excess
the "Class A-2 Controlled Distribution Amount
Deficiency");
(C)(1) the Class A-3 Controlled Distribution
Amount for the Related Month, (2) the amount allocated
to the Class A-3 Notes during the Related Month pursuant
to Section 4.7(b)(i)(2) or 4.7(c)(i)(2) of this
Supplement, as applicable, and (3) the amount, if any,
by which the amount in clause (C)(1) above exceeds the
amount in clause
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(C)(2) above (the amount of such excess the "Class A-3
Controlled Distribution Amount Deficiency" and, together
with the Class A-1 Controlled Distribution Amount
Deficiency and the Class A-2 Controlled Distribution
Amount Deficiency the "Class A Controlled Distribution
Amount Deficiency"); and
(ii) (A) Commencing on the second Payment Date after the
commencement of the Class A-1 Controlled Amortization Period,
the Trustee shall, in respect of the Class A-1 Notes, (1)
withdraw from the Series 1997 1/N1 Collection Account an
amount equal to the lesser of the amounts specified in clauses
(A)(1) and (A)(2) of Section 4.10(a)(i) of this Supplement,
(2) to the extent any Class A-1 Controlled Distribution Amount
Deficiency remains after application of the amounts specified
in clause (1) of this subsection, the Master Servicer shall
instruct the Trustee or the Paying Agent to withdraw, from
funds on deposit in the Excess Funding Accounts for the other
Group I Series of Notes, if any, an amount equal to the lesser
of (x) the aggregate amount on deposit in such Excess Funding
Accounts on such Payment Date (after application of any such
amounts pursuant to Section 4.9 of the related Series
Supplements)in an amount not to exceed the related Available
Subordinated Amounts at such time, and (y) the remaining
amount of the Class A-1 Controlled Distribution Amount
Deficiency, and deposit such amount in the Class A
Distribution Account to be paid, pro rata, to the Class A-1
Noteholders on account of the Class A-1 Controlled
Distribution Amount, provided that any such amounts withdrawn
from the Excess Funding Accounts for the other Group I Series
of Notes shall be applied on a pro rata basis with respect to
each Group I Series of Notes with respect to which a Class A-1
Controlled Distribution Amount Deficiency exists after
application of the amounts specified in the corresponding
sections of the related Series Supplements,(3) to the extent
any Class A-1 Controlled Distribution Amount Deficiency exists
after application of the amount specified in clauses (1) and
(2) of this subsection, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw, from funds on deposit
in the Series 1997 1/N1 Excess Funding Account, an amount
equal to the lesser of (v) the amount on deposit in the Series
1997 1/N1 Excess Funding Account on such Payment Date (after
application of any amounts pursuant to Sections
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4.9(a),(b) and (c) of this Supplement) in an amount not to
exceed the Series 1997 1/N1 Available Subordinated Amount at
such time and (w) the remaining amount of the Class A-1
Controlled Distribution Amount Deficiency and deposit such
amount in the Class A Distribution Account to be paid, pro
rata, to the Class A-1 Noteholders on account of the Class A-1
Controlled Distribution Amount, and (4) to the extent any
Class A-1 Controlled Distribution Amount Deficiency remains
after application of the amounts specified in clauses (1)
through (3) of this subsection, if amounts have been drawn on
the Series 1997 1/N1 Letter of Credit and deposited into the
Series 1997 1/N1 Collection Account pursuant to Section 4.18
of this Supplement, or amounts have been claimed under the
Demand Note or drawn under the Series 1997 1/N1 Letter of
Credit in respect thereof and deposited into the Series 1997
1/N1 Collection Account pursuant to Section 4.19 of this
Supplement, the Master Servicer shall instruct the Trustee or
the Paying Agent to withdraw from the Series 1997 1/N1
Collection Account on such Payment Date the lesser of (x) the
amount on deposit in the Series 1997 1/N1 Collection Account
representing such draw on the Series 1997 1/N1 Letter of
Credit or payment under the Demand Note (after application of
any portion thereof pursuant to Sections 4.9(a), (b) and (c)
of this Supplement) and (y) the remaining amount of the Class
A-1 Controlled Distribution Amount Deficiency (if any), and
deposit such amount in the Class A Distribution Account to be
paid, pro rata, to the Class A-1 Noteholders on account of the
Class A-1 Controlled Distribution Amount; provided, however,
that on the final Payment Date for the Class A-1 Notes, the
Trustee shall withdraw from such accounts, as provided above,
an amount which is no greater than the Class A-1 Invested
Amount as of such date. The Invested Amount of all outstanding
Class A-1 Notes shall be due and payable on the Series 1997
1/N1 Termination Date; and
(B) Commencing on the second Payment Date after the
commencement of the Class A-2 Controlled Amortization Period,
the Trustee shall, in respect of the Class A-2 Notes, (1)
withdraw from the Series 1997 1/N1 Collection Account an
amount equal to the lesser of the amounts specified in clauses
(B)(1) and (B)(2) of Section 4.10(a)(i) of this Supplement,
(2) to the extent any Class A-2 Controlled Distribution Amount
Deficiency remains after application of the amounts specified
in
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clause (1) of this subsection, the Master Servicer shall
instruct the Trustee or the Paying Agent to withdraw, from
funds on deposit in the Excess Funding Accounts, for the other
Group I Series of Notes, if any, an amount equal to the lesser
of (x) the aggregate amount on deposit in such Excess Funding
Accounts on such Payment Date (after application of any such
amounts pursuant to Section 4.9 of the related Series
Supplements)in an amount not to exceed the related Available
Subordinated Amounts at such time, and (y) the remaining
amount of the Class A-2 Controlled Distribution Amount
Deficiency, and deposit such amount in the Class A
Distribution Account to be paid, pro rata, to the Class A-2
Noteholders on account of the Class A-2 Controlled
Distribution Amount, provided that any such amounts withdrawn
from the Excess Funding Accounts for the other Group I Series
of Notes shall be applied on a pro rata basis with respect to
each Group I Series of Notes with respect to which a Class A-2
Controlled Distribution Amount Deficiency exists after
application of the amounts specified in the corresponding
sections of the related Series Supplements, (3) to the extent
any Class A-2 Controlled Distribution Amount Deficiency exists
after application of the amounts specified in clauses (1) and
(2) of this subsection, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw, from funds on deposit
in the Series 1997 1/N1 Excess Funding Account, an amount
equal to the lesser of (v) the amount on deposit in the Series
1997 1/N1 Excess Funding Account on such Payment Date (after
application of any amounts pursuant to Sections 4.9(a), (b)
and (c) of this Supplement) in an amount not to exceed the
Series 1997 1/N1 Available Subordinated Amount at such time
and (w) the amount of the Class A-2 Controlled Distribution
Amount Deficiency and deposit such amount in the Class A
Distribution Account to be paid, pro rata, to the Class A-2
Noteholders on account of the Class A-2 Controlled
Distribution Amount, and (4) to the extent any Class A-2
Controlled Distribution Amount Deficiency remains after
application of the amounts specified in clauses (1) through
(3) of this subsection, if amounts have been drawn on the
Series 1997 1/N1 Letter of Credit and deposited into the
Series 1997 1/N1 Collection Account pursuant to Section 4.18
of this Supplement or amounts have been claimed under the
Demand Note or drawn under the Series 1997 1/N1 Letter of
Credit in respect thereof and deposited into the Series 1997
1/N1
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Collection Account pursuant to Section 4.19 of this
Supplement, the Master Servicer shall instruct the Trustee or
the Paying Agent to withdraw from the Series 1997 1/N1
Collection Account on such Payment Date the lesser of (x) the
amount on deposit in the Series 1997 1/N1 Collection Account
representing such draw on the Series 1997 1/N1 Letter of
Credit or payment under the Demand Note (after application of
any portion thereof pursuant to Sections 4.9(a), (b) and (c)
of this Supplement) and (y) the remaining amount of the Class
A-2 Controlled Distribution Amount Deficiency (if any), and
deposit such amount in the Class A Distribution Account to be
paid, pro rata, to the Class A-2 Noteholders on account of the
Class A-2 Controlled Distribution Amount; provided, however,
that on the final Payment Date for the Class A-2 Notes, the
Trustee shall withdraw from such accounts, as provided above,
an amount which is no greater than the Class A-2 Invested
Amount as of such date. The Invested Amount of all outstanding
Class A-2 Notes shall be due and payable on the Series 1997
1/N1 Termination Date.
(C) Commencing on the second Payment Date after the
commencement of the Class A-3 Controlled Amortization Period,
the Trustee shall, in respect of the Class A-3 Notes, (1)
withdraw from the Series 1997 1/N1 Collection Account an
amount equal to the lesser of the amounts specified in clauses
(C)(1) and (C)(2) of Section 4.10(a)(i) of this Supplement,
(2) to the extent any Class A-3 Controlled Distribution Amount
Deficiency remains after application of the amounts specified
in clause (1) of this subsection, the Master Servicer shall
instruct the Trustee or the Paying Agent to withdraw, from
funds on deposit in the Excess Funding Accounts, if any, for
the other Group I Series of Notes, if any, an amount equal to
the lesser of (x) the aggregate amount on deposit in such
Excess Funding Accounts on such Payment Date (after
application of any such amounts pursuant to Section 4.9 of the
related Series Supplements)in an amount not to exceed the
related Available Subordinated Amounts at such time, and (y)
the remaining amount of the Class A-3 Controlled Distribution
Amount Deficiency, and deposit such amount in the Class A
Distribution Account to be paid, pro rata, to the Class A-3
Noteholders on account of the Class A-3 Controlled
Distribution Amount, provided that any such amounts withdrawn
from the Excess Funding Accounts for the other Group I Series
of Notes shall be applied on a pro
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rata basis with respect to each Group I Series of Notes with
respect to which a Class A-3 Controlled Distribution Amount
Deficiency exists after application of the amounts specified
in the corresponding sections of the related Series
Supplements,(3) to the extent any Class A-3 Controlled
Distribution Amount Deficiency exists after application of the
amounts specified in clauses (1) and (2) of this subsection,
the Master Servicer shall instruct the Trustee or the Paying
Agent to withdraw, from funds on deposit in the Series 1997-3
Excess Funding Account, an amount equal to the lesser of (v)
the amount on deposit in the Series 1997 1/N1 Excess Funding
Account on such Payment Date (after application of any amounts
pursuant to Sections 4.9(a), (b) and (c) of this Supplement)
in an amount not to exceed the Series 1997 1/N1 Available
Subordinated Amount at such time and (w) the amount of the
Class A-3 Controlled Distribution Amount Deficiency and
deposit such amount in the Class A Distribution Account to be
paid, pro rata, to the Class A-3 Noteholders on account of the
Class A-3 Controlled Distribution Amount, and (4) to the
extent any Class A-3 Controlled Distribution Amount Deficiency
remains after application of the amounts specified in clauses
(1) through (3) of this subsection, if amounts have been drawn
on the Series 1997 1/N1 Letter of Credit and deposited into
the Series 1997 1/N1 Collection Account pursuant to Section
4.18 of this Supplement or amounts have been claimed under the
Demand Note or drawn under the Series 1997 1/N1 Letter of
Credit in respect thereof and deposited into the Series 1997
1/N1 Collection Account pursuant to Section 4.19 of this
Supplement, the Master Servicer shall instruct the Trustee or
the Paying Agent to withdraw from the Series 1997 1/N1
Collection Account on such Payment Date the lesser of (x) the
amount on deposit in the Series 1997 1/N1 Collection Account
representing such draw on the Series 1997 1/N1 Letter of
Credit or payment under the Demand Note (after application of
any portion thereof pursuant to Sections 4.9(a), (b) and (c)
of this Supplement) and (y) the remaining amount of the Class
A-3 Controlled Distribution Amount Deficiency (if any), and
deposit such amount in the Class A Distribution Account to be
paid, pro rata, to the Class A-3 Noteholders on account of the
Class A-3 Controlled Distribution Amount; provided, however,
that on the final Payment Date for the Class A-3 Notes, the
Trustee shall withdraw from such accounts, as provided above,
an amount which is no
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greater than the Class A-3 Invested Amount as of such date.
The Invested Amount of all outstanding Class A-3 Notes shall
be due and payable on the Series 1997 1/N1 Termination Date.
(iii) Commencing on the first Payment Date after the
commencement of the Series 1997 1/N1 Rapid Amortization
Period, the Trustee shall (1) withdraw from the Series 1997
1/N1 Collection Account the amount allocated thereto pursuant
to Section 4.7(c)(i)(2) of this Supplement, (2) to the extent
any portion of the Class A Invested Amount still remains
unpaid after application of the amounts specified in clause
(1) above, the Master Servicer shall instruct the Trustee or
the Paying Agent to withdraw, from funds on deposit in the
related Excess Funding Accounts of any additional Group I
Series of Notes, if any, an amount equal to the lesser of (x)
the aggregate amount on deposit in such Excess Funding
Accounts on such Payment Date (after application of any such
amounts pursuant to Section 4.9 of the related Series
Supplements) in an amount not to exceed the related Available
Subordinated Amounts at such time and (y) the unpaid portion
of the Class A Invested Amount and deposit such amount in the
Class A Distribution Account to be paid, pro rata, to the
Class A Noteholders, provided that any such amounts withdrawn
from the Excess Funding Accounts for the other Group I Series
of Notes shall be applied on a pro rata basis with respect to
each Group I Series of Notes with respect to which a
deficiency exists, (3) to the extent any portion of the Class
A Invested Amount remains unpaid after application of the
amount specified in clauses (1) and (2), the Master Servicer
shall instruct the Trustee or the Paying Agent to withdraw,
from funds on deposit in the Series 1997 1/N1 Excess Funding
Account, an amount equal to the lesser of (v) the amount on
deposit in the Series 1997 1/N1 Excess Funding Account on such
Payment Date (after application of any amounts pursuant to
Sections 4.9(a), (b) and (c) of this Supplement) in an amount
not to exceed the Series 1997 1/N1 Available Subordinated
Amount at such time and (w) the unpaid portion of the Class A
Invested Amount and deposit such amount in the Class A
Distribution Account to be paid, pro rata, to the Class A
Noteholders, and (4) to the extent any portion of the Class A
Invested Amount still remains unpaid after application of the
amounts specified in clauses (1) through (3) above, if amounts
have been drawn on the Series 1997 1/N1 Letter of Credit
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and deposited into the Series 1997 1/N1 Collection Account
pursuant to Section 4.18 of this Supplement or amounts have
been claimed under the Demand Note or drawn under the Series
1997 1/N1 Letter of Credit in respect thereof and deposited
into the Series 1997 1/N1 Collection Account pursuant to
Section 4.19 of this Supplement, the Master Servicer shall
instruct the Trustee or the Paying Agent to withdraw from the
Series 1997 1/N1 Collection Account on such Payment Date the
lesser of (x) the amount on deposit in the Series 1997 1/N1
Collection Account representing such draw on the Series 1997
1/N1 Letter of Credit or payment under the Demand Note (after
application of any portion thereof pursuant to Sections 4.9(a)
and (b) and (c) of this Supplement) and (y) the excess of the
Class A Invested Amount over the amounts described in clauses
(1) through (3) above and deposit such amount in the Class A
Distribution Account to be paid, pro rata, to the Class A
Noteholders; provided, however, that on the final Payment Date
for the Class A Notes, the Trustee shall withdraw from the
Series 1997 1/N1 Collection Account, as provided above, an
aggregate amount which is no greater than the Class A Invested
Amount as of such date. The Invested Amount of each
outstanding Class of Class A Notes shall be due and payable on
the Series 1997 1/N1 Termination Date for such Class.
(iv) On each Payment Date occurring on or after the date
a withdrawal is made pursuant to Sections 4.10(a)(ii) and
(iii) of this Supplement, the Paying Agent shall, in
accordance with Section 5.1 of the Base Indenture and the
Master Servicer's most recent Monthly Certificate pay to the
applicable Class A Noteholders specified in Section
4.10(a)(ii) or (iii), as applicable, pro rata, the amount
deposited in the Class A Distribution Account for the payment
of principal pursuant to Sections 4.10(a)(ii) and (iii), as
applicable, of this Supplement.
(b) Class B Notes.
(i) Commencing on the second Determination Date after
the commencement of the Class B-1 Controlled Amortization
Period, the Class B-2 Controlled Amortization Period or the
Class B-3 Controlled Amortization Period (as the case may be),
or the first Determination Date after the commencement of the
Series 1997 1/N1 Rapid Amortization Period, provided that the
Class A
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Notes shall have then been paid in full, the Servicer shall
instruct the Trustee or the Paying Agent as to the following:
(A)(1) the Class B-1 Controlled Distribution
Amount for the Related Month, (2) the amount allocated
to the Class B-1 Notes during the Related Month pursuant
to Section 4.7(b)(i)(2) or 4.7(c)(i)(2) of this
Supplement, as applicable, and (3) the amount, if any,
by which the amount in clause (A)(1) above exceeds the
amount in clause (A)(2) above (the amount of such
excess, the "Class B-1 Controlled Distribution Amount
Deficiency"); and
(B)(1) the Class B-2 Controlled Distribution
Amount for the Related Month, (2) the amount allocated
to the Class B-2 Notes during the Related Month pursuant
to Section 4.7(b)(i)(2) or 4.7(c)(i)(2), as applicable,
and (3) the amount, if any, by which the amount in
clause (B)(1) above exceeds the amount in clause (B)(2)
above (the amount of such excess, the "Class B-2
Controlled Distribution Amount Deficiency").
(C)(1) the Class B-3 Controlled Distribution
Amount for the Related Month, (2) the amount allocated
to the Class B-3 Notes during the Related Month pursuant
to Section 4.7(b)(i)(2) or 4.7(c)(i)(2) of this
Supplement, as applicable, and (3) the amount, if any,
by which the amount in clause (B)(1) above exceeds the
amount in clause (B)(2) above (the amount of such
excess, the "Class B-2 Controlled Distribution Amount
Deficiency" and, together with the Class B-2 Controlled
Distribution Amount Deficiency and the Class B-3
Controlled Distribution Amount Deficiency, the "Class B
Controlled Distribution Amount Deficiency").
(ii) (A) Commencing on the second Payment Date after the
commencement of the Class B-1 Controlled Amortization Period,
the Trustee shall, subject to Section 4.14 of this Supplement,
(1) withdraw from the Series 1997 1/N1 Collection Account an
amount equal to the lesser of the amounts specified in clauses
(A)(1) and (A)(2) of Section 4.10(b)(i) of this Supplement,
(2) to the extent any Class B-1 Controlled Distribution Amount
Deficiency remains after application of the
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amounts specified in clause (1) of this subsection, the Master
Servicer shall instruct the Trustee or the Paying Agent to
withdraw, from funds on deposit in the Excess Funding
Accounts, for the other Group I Series of Notes, if any, an
amount equal to the lesser of (x) the aggregate amount on
deposit in such Excess Funding Accounts on such Payment Date
(after application of any such amounts pursuant to Section 4.9
of the related Series Supplements)in an amount not to exceed
the related Available Subordinated Amounts at such time, and
(y) the remaining amount of the Class B-1 Controlled
Distribution Amount Deficiency, and deposit such amount in the
Class B Distribution Account to be paid, pro rata, to the
Class B-1 Noteholders on account of the Class B-1 Controlled
Distribution Amount, provided that any such amounts withdrawn
from the Excess Funding Accounts for the other Group I Series
of Notes shall be applied on a pro rata basis with respect to
each Group I Series of Notes with respect to which a Class B-1
Controlled Distribution Amount Deficiency exists after
application of the amounts specified in the corresponding
sections of the related Series Supplements, (3) to the extent
any Class B-1 Controlled Distribution Amount Deficiency exists
after application of the amount specified in clauses (1) and
(2) of this subsection, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw, from funds on deposit
in the Series 1997 1/N1 Excess Funding Account, an amount
equal to the lesser of (v) the amount on deposit in the Series
1997 1/N1 Excess Funding Account on such Payment Date (after
application of any amounts pursuant to Sections 4.9(a),(b) and
(c) and Section 4.10(a) of this Supplement) in an amount not
to exceed the Series 1997 1/N1 Available Subordinated Amount
at such time and (w) the remaining amount of the Class B-1
Controlled Distribution Amount Deficiency and deposit such
amount in the Class B Distribution Account to be paid, pro
rata, to the Class B-1 Noteholders on account of the Class B-1
Controlled Distribution Amount, and (4) to the extent any
Class B-1 Controlled Distribution Amount Deficiency remains
after application of the amounts specified in clauses (1)
through (3) of this subsection, if amounts have been drawn on
the Series 1997 1/N1 Letter of Credit and deposited into the
Series 1997 1/N1 Collection Account pursuant to Section 4.18
of this Supplement or amounts have been claimed under the
Demand Note or drawn under the Series 1997 1/N1 Letter of
Credit in respect
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thereof and deposited into the Series 1997 1/N1 Collection
Account pursuant to Sections 4.20 and 4.21 of this Supplement,
the Master Servicer shall instruct the Trustee or the Paying
Agent to withdraw from the Series 1997 1/N1 Collection Account
on such Payment Date the lesser of (x) the amount on deposit
in the Series 1997 1/N1 Collection Account representing such
draw on the Series 1997 1/N1 Letter of Credit or payment under
the Demand Note (after application of any portion thereof
pursuant to Sections 4.9(a), (b) and (c) and Section 4.10(a)
of this Supplement) and (y) the remaining amount of the Class
B-1 Controlled Distribution Amount Deficiency (if any), and
deposit such amount in the Class B Distribution Account to be
paid, pro rata, to the Class B-1 Noteholders on account of the
Class B-1 Controlled Distribution Amount; and
(B) Commencing on the second Payment Date after the
commencement of the Class B-2 Controlled Amortization Period,
the Trustee shall, in respect of the Class B-2 Notes, subject
to Section 4.14 of this Supplement, (1) withdraw from the
Series 1997 1/N1 Collection Account an amount equal to the
lesser of the amounts specified in clauses (B)(1) and (B)(2)
of Section 4.10(b)(i) of this Supplement, (2) to the extent
any Class B-2 Controlled Distribution Amount Deficiency
remains after application of the amounts specified in clause
(1) of this subsection, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw, from funds on deposit
in the related Excess Funding Accounts, if any, for the other
Group I Series of Notes, if any, an amount equal to the lesser
of (x) the aggregate amount on deposit in such Excess Funding
Accounts on such Payment Date (after application of any such
amounts pursuant to Sections 4.9 and 4.10 of the related
Supplements) in an amount not to exceed the related Available
Subordinated Amounts at such time and (y) the remaining amount
of the Class B-2 Controlled Distribution Amount Deficiency,
and deposit such amount in the Class B Distribution Account to
be paid, pro rata, to the Class B-2 Noteholders on account of
the Class B-2 Controlled Distribution Amount, provided that
any such amounts withdrawn from the Excess Funding Accounts
for the other Group I Series of Notes shall be applied on a
pro rata basis with respect to each Group I Series of Notes
with respect to which a Class B-2 Controlled Distribution
Amount Deficiency exists after application of the amounts
specified in the corresponding sections of the
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related Series Supplements, (3) to the extent any Class B-2
Controlled Distribution Amount Deficiency exists after
application of the amounts specified in clauses (1) and (2) of
this subsection, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw, from funds on deposit
in the Series 1997 1/N1 Excess Funding Account, an amount
equal to the lesser of (v) the amount on deposit in the Series
1997 1/N1 Excess Funding Account on such Payment Date (after
application of any amounts pursuant to Sections 4.9(a), (b)
and (c) and Section 4.10(a) of this Supplement) in an amount
not to exceed the Series 1997 1/N1 Available Subordinated
Amount at such time and (w) the remaining amount of the Class
B-2 Controlled Distribution Amount Deficiency and deposit such
amount in the Class B Distribution Account to be paid, pro
rata, to the Class B-2 Noteholders on account of the Class B-2
Controlled Distribution Amount, and (4) to the extent any
Class B-2 Controlled Distribution Amount Deficiency remains
after application of the amounts specified in clauses (1)
through (3) of this subsection, if amounts have been drawn on
the Series 1997 1/N1 Letter of Credit and deposited into the
Series 1997 1/N1 Collection Account pursuant to Section 4.18
of this Supplement or amounts have been claimed under the
Demand Note or drawn under the Series 1997 1/N1 Letter of
Credit in respect thereof and deposited into the Series 1997
1/N1 Collection Account pursuant to Section 4.19 of this
Supplement, the Master Servicer shall instruct the Trustee or
the Paying Agent to withdraw from the Series 1997 1/N1
Collection Account on such Payment Date the lesser of (x) the
amount on deposit in the Series 1997 1/N1 Collection Account
representing such draw on the Series 1997 1/N1 Letter of
Credit or payment under the Demand Note (after application of
any portion thereof pursuant to Sections 4.9(a), (b) and (c)
and Section 4.10(a) of this Supplement) and (y) the remaining
amount of the Class B-2 Controlled Distribution Amount
Deficiency (if any), and deposit such amount in the Class B
Distribution Account to be paid, pro rata, to the Class B-2
Noteholders on account of the Class B-2 Controlled
Distribution Amount.
(C) Commencing on the second Payment Date after the
commencement of the Class B-3 Controlled Amortization Period,
the Trustee shall, in respect of the Class B-3 Notes, subject
to Section 4.14 of this Supplement, (1) withdraw from the
Series 1997 1/N1 Collection Account an amount equal
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to the lesser of the amounts specified in clauses (C)(1) and
(C)(2) of Section 4.10(b)(i) of this Supplement, (2) to the
extent any Class B-3 Controlled Distribution Amount Deficiency
remains after application of the amounts specified in clause
(1) of this subsection, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw, from funds on deposit
in the related Excess Funding Accounts for the other Group I
Series of Notes, if any, an amount equal to the lesser of (x)
the aggregate amount on deposit in such Excess Funding
Accounts on such Payment Date (after application of any such
amounts pursuant to Sections 4.9 and 4.10 of the related
Supplements) in an amount not to exceed the related Available
Subordinated Amounts at such time and (y) the remaining amount
of the Class B-3 Controlled Distribution Amount Deficiency,
and deposit such amount in the Class B Distribution Account to
be paid, pro rata, to the Class B-3 Noteholders on account of
the Class B-3 Controlled Distribution Amount, provided that
any such amounts withdrawn from the Excess Funding Accounts
for the other Group I Series of Notes shall be applied on a
pro rata basis with respect to each Group I Series of Notes
with respect to which a Class B-3 Controlled Distribution
Amount Deficiency exists after application of the amounts
specified in the corresponding sections of the related Series
Supplements, (3) to the extent any Class B-3 Controlled
Distribution Amount Deficiency exists after application of the
amounts specified in clauses (1) and (2) of this subsection,
the Master Servicer shall instruct the Trustee or the Paying
Agent to withdraw, from funds on deposit in the Series 1997
1/N1 Excess Funding Account, an amount equal to the lesser of
(v) the amount on deposit in the Series 1997 1/N1 Excess
Funding Account on such Payment Date (after application of any
amounts pursuant to Sections 4.9(a), (b) and (c), and Section
4.10(a) of this Supplement) in an amount not to exceed the
Series 1997 1/N1 Available Subordinated Amount at such time
and (w) the remaining amount of the Class B-3 Controlled
Distribution Amount Deficiency and deposit such amount in the
Class B Distribution Account to be paid, pro rata, to the
Class B-3 Noteholders on account of the Class B-3 Controlled
Distribution Amount, and (4) to the extent any Class B-3
Controlled Distribution Amount Deficiency remains after
application of the amounts specified in clauses (1) through
(3) of this subsection, if amounts have been drawn on the
Series 1997 1/N1
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Letter of Credit and deposited into the Series 1997 1/N1
Collection Account pursuant to Section 4.18 of this Supplement
or amounts have been claimed under the Demand Note or drawn
under the Series 1997 1/N1 Letter of Credit in respect thereof
and deposited into the Series 1997 1/N1 Collection Account
pursuant to Section 4.19 of this Supplement, the Master
Servicer shall instruct the Trustee or the Paying Agent to
withdraw from the Series 1997 1/N1 Collection Account on such
Payment Date the lesser of (x) the amount on deposit in the
Series 1997 1/N1 Collection Account representing such draw on
the Series 1997 1/N1 Letter of Credit or payment under the
Demand Note (after application of any portion thereof pursuant
to Sections 4.9(a), (b) and (c) and Section 4.10(a) of this
Supplement) and (y) the remaining amount of the Class B-3
Controlled Distribution Amount Deficiency (if any), and
deposit such amount in the Class B Distribution Account to be
paid, pro rata, to the Class B-3 Noteholders on account of the
Class B-2 Controlled Distribution Amount.
(iii) (A) Commencing on the first Payment Date after the
commencement of the Series 1997 1/N1 Rapid Amortization
Period, provided that the Class A Notes shall have then been
paid in full, the Trustee shall (1) withdraw from the Series
1997 1/N1 Collection Account the amount allocated thereto
pursuant to Section 4.7(c)(i)(2) of this Supplement, (2) to
the extent any portion of the Class B Invested Amount still
remains unpaid after application of the amounts specified in
clause (1) above, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw, from funds on deposit
in the related Excess Funding Accounts of any additional Group
I Series of Notes, if any, an amount equal to the lesser of
(x) the aggregate amount on deposit in such Excess Funding
Accounts on such Payment Date (after application of any such
amounts pursuant to Sections 4.9 and 4.10 of the related
Series Supplement) and (y) the unpaid portion of the Class B
Invested Amount and deposit such amount in the Class B
Distribution Account to be paid, pro rata, to the Class B
Noteholders, provided that any such amounts withdrawn from the
Excess Funding Accounts for the other Group I Series of Notes
shall be applied on a pro rata basis with respect to each
Group I Series of Notes with respect to which a deficiency
exists, (3) to the extent any portion of the Class B Invested
Amount still remains unpaid after application of the amount
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specified in clauses (1) and (2) above, the Master Servicer
shall instruct the Trustee or the Paying Agent to withdraw,
from funds on deposit in the Series 1997 1/N1 Excess Funding
Account, an amount equal to the lesser of (v) the amount on
deposit in the Series 1997 1/N1 Excess Funding Account on such
Payment Date (after application of any amounts pursuant to
Sections 4.9(a), (b) and (c) and Section 4.10(a) of this
Supplement) in an amount not to exceed the Series 1997 1/N1
Available Subordinated Amount at such time and (w) the unpaid
portion of the Class B Invested Amount and deposit such amount
in the Class B Distribution Account to be paid, pro rata, to
the Class B Noteholders, and (4) to the extent any portion of
the Class B Invested Amount still remains unpaid after
application of the amounts specified in clauses (1) through
(3) above, if amounts have been drawn on the Series 1997 1/N1
Letter of Credit and deposited into the Series 1997 1/N1
Collection Account pursuant to Section 4.18 of this Supplement
or amounts have been claimed under the Demand Note or drawn
under the Series 1997 1/N1 Letter of Credit in respect thereof
and deposited into the Series 1997 1/N1 Collection Account
pursuant to Section 4.19 of this Supplement, the Master
Servicer shall instruct the Trustee or the Paying Agent to
withdraw from the Series 1997 1/N1 Collection Account on such
Payment Date the lesser of (x) the amount on deposit in the
Series 1997 1/N1 Collection Account representing such draw on
the Series 1997 1/N1 Letter of Credit or payment under the
Demand Note (after application of any portion thereof pursuant
to Sections 4.9(a), (b) and (c) and Section 4.10(a) of this
Supplement)and (y) the excess of the Class B Invested Amount
over the amounts described in clauses (1) through (3) above
and deposit such amount in the Class B Distribution Account to
be paid, pro rata, to the Class B Noteholders; provided,
however, that on the final Payment Date for the Class B Notes,
the Trustee shall withdraw from the Series 1997 1/N1
Collection Account, as provided above, an aggregate amount
which is no greater than the Class B Invested Amount as of
such date. Subject to Section 4.14 of this Supplement, the
Invested Amount of each outstanding Class of Class B Notes
shall be due and payable on the Series 1997 1/N1 Termination
Date for such Class.
(iv) On each Payment Date occurring on or after the date
a withdrawal is made pursuant to Section 4.10(b)(ii) and (iii)
of this Supplement,
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the Paying Agent shall, in accordance with Section 5.1 of the
Base Indenture and the Servicer's most recent Monthly
Certificate pay to the applicable Class B Noteholders
specified in Section 4.10(b)(ii) or (iii) of this Supplement,
as applicable, pro rata, the amount deposited in the Class B
Distribution Account for the payment of principal pursuant to
Section 4.10(b)(ii) and (iii), as applicable, of this
Supplement.
(c) Class C Notes.
(i) Commencing on the second Determination Date after
the commencement of the Class C-1 Controlled Amortization
Period, the Class C-2 Controlled Amortization Period or the
Class C-3 Controlled Amortization Period (as the case may be),
or the first Determination Date after the commencement of the
Series 1997 1/N1 Rapid Amortization Period, provided that the
Class A Notes and the Class B Notes shall have then been paid
in full, the Servicer shall instruct the Trustee or the Paying
Agent as to the following:
(A)(1) the Class C-1 Controlled Distribution
Amount for the Related Month, (2) the amount allocated
to the Class C-1 Notes during the Related Month pursuant
to Section 4.7(b)(i)(3) or 4.7(c)(i)(3) of this
Supplement, as applicable, and (3) the amount, if any,
by which the amount in clause (A)(1) above exceeds the
amount in clause (A)(2) above (the amount of such
excess, the "Class C-1 Controlled Distribution Amount
Deficiency"); and
(B)(1) the Class C-2 Controlled Distribution
Amount for the Related Month, (2) the amount allocated
to the Class C-2 Notes during the Related Month pursuant
to Section 4.7(b)(i)(3) or 4.7(c)(i)(3) of this
Supplement, as applicable, and (3) the amount, if any,
by which the amount in clause (B)(1) above exceeds the
amount in clause (B)(2) above (the amount of such
excess, the "Class C-2 Controlled Distribution Amount
Deficiency").
(C)(1) the Class C-3 Controlled Distribution
Amount for the Related Month, (2) the amount allocated
to the Class C-3 Notes during the Related Month pursuant
to Section 4.7(b)(i)(2) or 4.7(c)(i)(2) of this
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Supplement, as applicable, and (3) the amount, if any,
by which the amount in clause (B)(1) above exceeds the
amount in clause (B)(2) above (the amount of such
excess, the "Class C-2 Controlled Distribution Amount
Deficiency" and, together with the Class C-2 Controlled
Distribution Amount Deficiency and the Class C-3
Controlled Distribution Amount Deficiency, the "Class C
Controlled Distribution Amount Deficiency").
(ii) (A) Commencing on the second Payment Date after the
commencement of the Class C-1 Controlled Amortization Period,
the Trustee shall, [subject to Section 4.14 of this
Supplement,] (1) withdraw from the Series 1997 1/N1 Collection
Account an amount equal to the lesser of the amounts specified
in clauses (A)(1) and (A)(2) of Section 4.10(c)(i) of this
Supplement, (2) to the extent any Class C-1 Controlled
Distribution Amount Deficiency remains after application of
the amounts specified in clause (1) of this subsection, the
Master Servicer shall instruct the Trustee or the Paying Agent
to withdraw, from funds on deposit in the Excess Funding
Accounts, for the other Group I Series of Notes, if any, an
amount equal to the lesser of (x) the aggregate amount on
deposit in such Excess Funding Accounts on such Payment Date
(after application of any such amounts pursuant to Section 4.9
of the related Series Supplements)in an amount not to exceed
the related Available Subordinated Amounts at such time, and
(y) the remaining amount of the Class C-1 Controlled
Distribution Amount Deficiency, and deposit such amount in the
Class C Distribution Account to be paid, pro rata, to the
Class C-1 Noteholders on account of the Class C-1 Controlled
Distribution Amount, provided that any such amounts withdrawn
from the Excess Funding Accounts for the other Group I Series
of Notes shall be applied on a pro rata basis with respect to
each Group I Series of Notes with respect to which a Class C-1
Controlled Distribution Amount Deficiency exists after
application of the amounts specified in the corresponding
sections of the related Series Supplements, (3) to the extent
any Class C-1 Controlled Distribution Amount Deficiency exists
after application of the amount specified in clauses (1) and
(2) of this subsection, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw, from funds on deposit
in the Series 1997 1/N1 Excess Funding Account, an amount
equal to the lesser of
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(v) the amount on deposit in the Series 1997 1/N1 Excess
Funding Account on such Payment Date (after application of any
amounts pursuant to Sections 4.9(a), (b) and (c) and Sections
4.10(a) and 4.10 (b) of this Supplement) in an amount not to
exceed the Series 1997 1/N1 Available Subordinated Amount at
such time and (w) the remaining amount of the Class C-1
Controlled Distribution Amount Deficiency and deposit such
amount in the Class C Distribution Account to be paid, pro
rata, to the Class C-1 Noteholders on account of the Class C-1
Controlled Distribution Amount, and (4) to the extent any
Class C-1 Controlled Distribution Amount Deficiency remains
after application of the amounts specified in clauses (1)
through (3) of this subsection, if amounts have been drawn on
the Series 1997 1/N1 Letter of Credit and deposited into the
Series 1997 1/N1 Collection Account pursuant to Section 4.18
of this Supplement or amounts have been claimed under the
Demand Note or drawn under the Series 1997 1/N1 Letter of
Credit in respect thereof and deposited into the Series 1997
1/N1 Collection Account pursuant to Section 4.19 of this
Supplement, the Master Servicer shall instruct the Trustee or
the Paying Agent to withdraw from the Series 1997 1/N1
Collection Account on such Payment Date the lesser of (x) the
amount on deposit in the Series 1997 1/N1 Collection Account
representing such draw on the Series 1997 1/N1 Letter of
Credit or payment under the Demand Note (after application of
any portion thereof pursuant to Sections 4.9(a), (b) and (c)
and Sections 4.10(a) and 4.10(b) of this Supplement) and (y)
the remaining amount of the Class B-1 Controlled Distribution
Amount Deficiency (if any), and deposit such amount in the
Class C Distribution Account to be paid, pro rata, to the
Class C-1 Noteholders on account of the Class C-1 Controlled
Distribution Amount; and
(B) Commencing on the second Payment Date after the
commencement of the Class C-2 Controlled Amortization Period,
the Trustee shall, in respect of the Class C-2 Notes, subject
to Section 4.14 of this Supplement, (1) withdraw from the
Series 1997 1/N1 Collection Account an amount equal to the
lesser of the amounts specified in clauses (B)(1) and (B)(2)
of Section 4.10(c)(i) of this Supplement, (2) to the extent
any Class C-2 Controlled Distribution Amount Deficiency
remains after application of the amounts specified in clause
(1) of this subsection, the Master Servicer shall instruct the
Trustee or the Paying Agent to
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withdraw, from funds on deposit in the related Excess Funding
Accounts, if any, for the other Group I Series of Notes, if
any, an amount equal to the lesser of (x) the aggregate amount
on deposit in such Excess Funding Accounts on such Payment
Date (after application of any such amounts pursuant to
Sections 4.9 and 4.10 of the related Supplements) in an amount
not to exceed the related Available Subordinated Amounts at
such time and (y) the remaining amount of the Class C-2
Controlled Distribution Amount Deficiency, and deposit such
amount in the Class C Distribution Account to be paid, pro
rata, to the Class C-2 Noteholders on account of the Class C-2
Controlled Distribution Amount, provided that any such amounts
withdrawn from the Excess Funding Accounts for the other Group
I Series of Notes shall be applied on a pro rata basis with
respect to each Group I Series of Notes with respect to which
a Class C-2 Controlled Distribution Amount Deficiency exists
after application of the amounts specified in the
corresponding sections of the related Series Supplements, (3)
to the extent any Class C-2 Controlled Distribution Amount
Deficiency exists after application of the amounts specified
in clause (1) of this subsection, the Master Servicer shall
instruct the Trustee or the Paying Agent to withdraw, from
funds on deposit in the Series 1997 1/N1 Excess Funding
Account, an amount equal to the lesser of (v) the amount on
deposit in the Series 1997 1/N1 Excess Funding Account on such
Payment Date (after application of any amounts pursuant to
Sections 4.9(a),(b) and 4.9(c) and Sections 4.10(a) and (b) of
this Supplement) in an amount not to exceed the Series 1997
1/N1 Available Subordinated Amount at such time and (w) the
remaining amount of the Class C-2 Controlled Distribution
Amount Deficiency and deposit such amount in the Class C
Distribution Account to be paid, pro rata, to the Class C-2
Noteholders on account of the Class C-2 Controlled
Distribution Amount, and (4) to the extent any Class B-2
Controlled Distribution Amount Deficiency remains after
application of the amounts specified in clauses (1) through
(3) of this subsection, if amounts have been drawn on the
Series 1997 1/N1 Letter of Credit and deposited into the
Series 1997 1/N1 Collection Account pursuant to Section 4.18
of this Supplement or amounts have been claimed under the
Demand Note or drawn under the Series 1997 1/N1 Letter of
Credit in respect thereof and deposited into the Series 1997
1/N1 Collection Account pursuant to Section 4.19 of
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this Supplement, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw from the Series 1997
1/N1 Collection Account on such Payment Date the lesser of (x)
the amount on deposit in the Series 1997 1/N1 Collection
Account representing such draw on the Series 1997 1/N1 Letter
of Credit or payment under the Demand Note (after application
of any portion thereof pursuant to Sections 4.9(a), (b) and
(c) and Section 4.10(a)and 4.10 (b)) and (y) the remaining
amount of the Class C-2 Controlled Distribution Amount
Deficiency (if any), and deposit such amount in the Class C
Distribution Account to be paid, pro rata, to the Class C-2
Noteholders on account of the Class C-2 Controlled
Distribution Amount.
(C) Commencing on the second Payment Date after the
commencement of the Class C-3 Controlled Amortization Period,
the Trustee shall, in respect of the Class C-3 Notes, subject
to Section 4.14 of this Supplement, (1) withdraw from the
Series 1997 1/N1 Collection Account an amount equal to the
lesser of the amounts specified in clauses (C)(1) and (C)(2)
of Section 4.10(c)(i) of this Supplement, (2) to the extent
any Class C-3 Controlled Distribution Amount Deficiency
remains after application of the amounts specified in clause
(1) of this subsection, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw, from funds on deposit
in the related Excess Funding Accounts for the other Group I
Series of Notes, if any, an amount equal to the lesser of (x)
the aggregate amount on deposit in such Excess Funding
Accounts on such Payment Date (after application of any such
amounts pursuant to Sections 4.9 and 4.10 of the related
Supplements) in an amount not to exceed the related Available
Subordinated Amounts at such time and (y) the remaining amount
of the Class C-3 Controlled Distribution Amount Deficiency,
and deposit such amount in the Class C Distribution Account to
be paid, pro rata, to the Class C-3 Noteholders on account of
the Class C-3 Controlled Distribution Amount, provided that
any such amounts withdrawn from the Excess Funding Accounts
for the other Group I Series of Notes shall be applied on a
pro rata basis with respect to each Group I Series of Notes
with respect to which a Class C-3 Controlled Distribution
Amount Deficiency exists after application of the amounts
specified in the corresponding sections of the related Series
Supplements, and (y) the remaining amount of the Class C-3
Controlled Distribution Amount
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Deficiency and deposit such amount in the Class C Distribution
Account to be paid, pro rata, to the Class C-3 Noteholders on
account of the Class C-3 Controlled Distribution Amount, (3)
to the extent any Class C-3 Controlled Distribution Amount
Deficiency exists after application of the amounts specified
in clause (1) of this subsection, the Master Servicer shall
instruct the Trustee or the Paying Agent to withdraw, from
funds on deposit in the Series 1997 1/N1 Excess Funding
Account, an amount equal to the lesser of (v) the amount on
deposit in the Series 1997 1/N1 Excess Funding Account on such
Payment Date (after application of any amounts pursuant to
Sections 4.9(a), (b) and (c), and Sections 4.10(a) and 4.10(b)
of this Supplement) in an amount not to exceed the Series 1997
1/N1 Available Subordinated Amount at such time and (w) the
remaining amount of the Class C-3 Controlled Distribution
Amount Deficiency and deposit such amount in the Class C
Distribution Account to be paid, pro rata, to the Class C-3
Noteholders on account of the Class C-3 Controlled
Distribution Amount, and (4) to the extent any Class C-3
Controlled Distribution Amount Deficiency remains after
application of the amounts specified in clauses (1) through
(3) of this subsection, if amounts have been drawn on the
Series 1997 1/N1 Letter of Credit and deposited into the
Series 1997 1/N1 Collection Account pursuant to Section 4.18
of this Supplement or amounts have been claimed under the
Demand Note or drawn under the Series 1997 1/N1 Letter of
Credit in respect thereof and deposited into the Series 1997
1/N1 Collection Account pursuant to Section 4.19 of this
Supplement, the Master Servicer shall instruct the Trustee or
the Paying Agent to withdraw from the Series 1997 1/N1
Collection Account on such Payment Date the lesser of (x) the
amount on deposit in the Series 1997 1/N1 Collection Account
representing such draw on the Series 1997 1/N1 Letter of
Credit or payment under the Demand Note (after application of
any portion thereof pursuant to Sections 4.9(a), (b) and (c)
and Sections 4.10(a) and 4.10(b)) and (y) the remaining amount
of the Class C-3 Controlled Distribution Amount Deficiency (if
any), and deposit such amount in the Class C Distribution
Account to be paid, pro rata, to the Class C-3 Noteholders on
account of the Class C-2 Controlled Distribution Amount.
(iii) (A) Commencing on the first Payment Date after the
commencement of the Series 1997 1/N1 Rapid Amortization
Period, provided that the
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Class A Notes and the Class B Notes shall have then been paid
in full, the Trustee shall (1) withdraw from the Series 1997
1/N1 Collection Account the amount allocated thereto pursuant
to Section 4.7(c)(x)(ii) of this Supplement, (2) to the extent
any portion of the Class C Invested Amount still remains
unpaid after application of the amounts specified in clause
(1) above, the Master Servicer shall instruct the Trustee or
the Paying Agent to withdraw, from funds on deposit in the
related Excess Funding Accounts of any additional Group I
Series of Notes, if any, an amount equal to the lesser of (x)
the aggregate amount on deposit in such Excess Funding
Accounts on such Payment Date (after application of any such
amounts pursuant to Sections 4.9 and 4.10 of the related
Series Supplement) and (y) the unpaid portion of the Class C
Invested Amount and deposit such amount in the Class C
Distribution Account to be paid, pro rata, to the Class C
Noteholders, provided that any such amounts withdrawn from the
Excess Funding Accounts for the other Group I Series of Notes
shall be applied on a pro rata basis with respect to each
Group I Series of Notes with respect to which a deficiency
exists, (3) to the extent any portion of the Class C Invested
Amount still remains unpaid after application of the amount
specified in clauses (1) and (2) above, the Master Servicer
shall instruct the Trustee or the Paying Agent to withdraw,
from funds on deposit in the Series 1997 1/N1 Excess Funding
Account, an amount equal to the lesser of (v) the amount on
deposit in the Series 1997 1/N1 Excess Funding Account on such
Payment Date (after application of any amounts pursuant to
Sections 4.9(a), (b) and (c) and Sections 4.10(a) and (b) of
this Supplement) in an amount not to exceed the Series 1997
1/N1 Available Subordinated Amount at such time and (w) the
unpaid portion of the Class C Invested Amount and deposit such
amount in the Class C Distribution Account to be paid, pro
rata, to the Class C Noteholders, and (4) to the extent any
portion of the Class C Invested Amount still remains unpaid
after application of the amounts specified in clauses (1)
through (3) above, if amounts have been drawn on the Series
1997 1/N1 Letter of Credit and deposited into the Series 1997
1/N1 Collection Account pursuant to Section 4.18 of this
Supplement or amounts have been claimed under the Demand Note
or drawn under the Series 1997 1/N1 Letter of Credit in
respect thereof and deposited into the Series 1997 1/N1
Collection Account pursuant to Section 4.19 of
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this Supplement, the Master Servicer shall instruct the
Trustee or the Paying Agent to withdraw from the Series 1997
1/N1 Collection Account on such Payment Date the lesser of (x)
the amount on deposit in the Series 1997 1/N1 Collection
Account representing such draw on the Series 1997 1/N1 Letter
of Credit or payment under the Demand Note (after application
of any portion thereof pursuant to Sections 4.9(a), (b) and
(c) and Sections 4.10(a) and (b) of this Supplement) and (y)
the excess of the Class C Invested Amount over the amounts
described in clauses (1) through (3) above and deposit such
amount in the Class C Distribution Account to be paid, pro
rata, to the Class C Noteholders; provided, however, that on
the final Payment Date for the Class C Notes, the Trustee
shall withdraw from the Series 1997 1/N1 Collection Account,
as provided above, an aggregate amount which is no greater
than the Class C Invested Amount as of such date. Subject to
Section 4.14, the Invested Amount of each outstanding Class of
Class C Notes shall be due and payable on the Series 1997 1/N1
Termination Date for such Class.
(iv) On each Payment Date occurring on or after the date
a withdrawal is made pursuant to Section 4.10(c)(ii) and (iii)
of this Supplement, the Paying Agent shall, in accordance with
Section 5.1 of the Base Indenture and the Servicer's most
recent Monthly Certificate pay to the applicable Class C
Noteholders specified in Section 4.10(c)(ii) or (iii) of this
Supplement, as applicable, pro rata, the amount deposited in
the Class C Distribution Account for the payment of principal
pursuant to Section 4.10(c)(ii) and (iii), as applicable, of
this Supplement.
Section 4.11 Retained Distribution Account. On each Payment
Date, the Master Servicer shall instruct the Trustee to instruct the
Paying Agent to transfer to the Retained Distribution Account (established
pursuant to Section 4.1(b) of the Base Indenture) (i) all funds which are
in the Collection Account that have been allocated to the Retained
Distribution Account as of such Payment Date and (ii) all funds that were
previously allocated to the Retained Distribution Account but not
transferred to the Retained Distribution Account.
Section 4.12 Class A Distribution Account.
(a) Establishment of Class A Distribution Account. The Trustee
shall establish and maintain in the
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name of the Trustee for the benefit of the Class A Noteholders, or cause
to be established and maintained, an account (the "Class A Distribution
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Class A Noteholders. The
Class A Distribution Account shall be maintained (i) with a Qualified
Institution, or (ii) as a segregated trust account with the corporate
trust department of a depository institution or trust company having
corporate trust powers and acting as trustee for funds deposited in the
Class A Distribution Account. If the Class A Distribution Account is not
maintained in accordance with the previous sentence, the Master Servicer
shall establish a new Class A Distribution Account, within ten (10)
Business Days after obtaining knowledge of such fact, which complies with
such sentence, and shall instruct the Trustee to transfer all cash and
investments from the non-qualifying Class A Distribution Account into the
new Class A Distribution Account. Initially, the Class A Distribution
Account will be established with the Trustee.
(b) Administration of the Class A Distribution Account. The
Master Servicer shall instruct the institution maintaining the Class A
Distribution Account to invest funds on deposit in the Class A
Distribution Account at all times in Permitted Investments; provided,
however, that any such investment shall mature not later than the Business
Day prior to the Payment Date following the date on which such funds were
received, unless any Permitted Investment held in the Class A Distribution
Account is held with the Paying Agent, in which case such investment may
mature on such Payment Date provided that such funds shall be available
for withdrawal on or prior to such Payment Date. The Trustee shall hold,
for the benefit of the Class A Noteholders, possession of any negotiable
instruments or securities evidencing the Permitted Investments from the
time of purchase thereof until the time of maturity.
(c) Earnings from Class A Distribution Account. Subject to the
restrictions set forth above, the Master Servicer shall have the authority
to instruct the Trustee with respect to the investment of funds on deposit
in the Class A Distribution Account. All interest and earnings (net of
losses and investment expenses) on funds on deposit in the Class A
Distribution Account shall be deemed to be on deposit and available for
distribution.
(d) Class A Distribution Account Constitutes Additional
Collateral for Class A Notes. In order to secure and provide for the
payment of the RCFC Obligations with respect to the Class A Notes (but not
the other Notes), RCFC hereby assigns, pledges, grants, transfers and sets
over to the Trustee, for the benefit of the Class A Noteholders, all
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of RCFC's right, title and interest in and to the following (whether now
or hereafter existing and whether now owned or hereafter acquired): (i)
the Class A Distribution Account; (ii) all funds on deposit therein from
time to time; (iii) all certificates and instruments, if any, representing
or evidencing any or all of the Class A Distribution Account or the funds
on deposit therein from time to time; (iv) all Permitted Investments made
at any time and from time to time with monies in the Class A Distribution
Account; and (v) all proceeds of any and all of the foregoing, including,
without limitation, cash (the items in the foregoing clauses (i) through
(v) are referred to, collectively, as the "Class A Distribution Account
Collateral"). The Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Class A Distribution Account
and in all proceeds thereof. The Class A Distribution Account Collateral
shall be under the sole dominion and control of the Trustee, and the
Paying Agent at the direction of the Trustee, in each case for the benefit
of the Class A Noteholders.
Section 4.13 Class B Distribution Account.
(a) Establishment of Class B Distribution Account. The Trustee
shall establish and maintain in the name of the Trustee for the benefit of
the Class B Noteholders, or cause to be established and maintained, an
account (the "Class B Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Class B Noteholders. The Class B Distribution Account shall
be maintained (i) with a Qualified Institution, or (ii) as a segregated
trust account with the corporate trust department of a depository
institution or trust company having corporate trust powers and acting as
trustee for funds deposited in the Class B Distribution Account. If the
Class B Distribution Account is not maintained in accordance with the
previous sentence, the Master Servicer shall establish a new Class B
Distribution Account, within ten (10) Business Days after obtaining
knowledge of such fact, which complies with such sentence, and shall
instruct the Trustee to transfer all cash and investments from the
non-qualifying Class B Distribution Account into the new Class B
Distribution Account. Initially, the Class B Distribution Account will be
established with the Trustee.
(b) Administration of the Class B Distribution Account. The
Master Servicer shall instruct the institution maintaining the Class B
Distribution Account to invest funds on deposit in the Class B
Distribution Account at all times in Permitted Investments; provided,
however, that any such investment shall mature not later than the Business
Day prior to the Payment Date following the date on which such
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funds were received, unless any Permitted Investment held in the Class B
Distribution Account is held with the Paying Agent, in which case such
investment may mature on such Payment Date provided that such funds shall
be available for withdrawal on or prior to such Payment Date. The Trustee
shall hold, for the benefit of the Class B Noteholders, possession of any
negotiable instruments or securities evidencing the Permitted Investments
from the time of purchase thereof until the time of maturity.
(c) Earnings from Class B Distribution Account. Subject to the
restrictions set forth above, the Master Servicer shall have the authority
to instruct the Trustee with respect to the investment of funds on deposit
in the Class B Distribution Account. All interest and earnings (net of
losses and investment expenses) on funds on deposit in the Class B
Distribution Account shall be deemed to be on deposit and available for
distribution.
(d) Class B Distribution Account Constitutes Additional
Collateral for Class B Notes. In order to secure and provide for the
repayment and payment of the RCFC Obligations with respect to the Class B
Notes (but not the other Notes), RCFC hereby assigns, pledges, grants,
transfers and sets over to the Trustee, for the benefit of the Class B
Noteholders, all of RCFC's right, title and interest in and to the
following (whether now or hereafter existing and whether now owned or
hereafter acquired): (i) the Class B Distribution Account; (ii) all funds
on deposit therein from time to time; (iii) all certificates and
instruments, if any, representing or evidencing any or all of the Class B
Distribution Account or the funds on deposit therein from time to time;
(iv) all Permitted Investments made at any time and from time to time with
monies in the Class B Distribution Account; and (v) all proceeds of any
and all of the foregoing, including, without limitation, cash (the items
in the foregoing clauses (i) through (v) are referred to, collectively, as
the "Class B Distribution Account Collateral"). The Trustee shall possess
all right, title and interest in all funds on deposit from time to time in
the Class B Distribution Account and in all proceeds thereof. The Class B
Distribution Account Collateral shall be under the sole dominion and
control of the Trustee, and the Paying Agent at the direction of the
Trustee, in each case for the benefit of the Class B Noteholders.
Section 4.14 Class B Notes Subordinate to Class A Notes.
Notwithstanding anything to the contrary contained herein or in any other
Related Document, the Class B Notes will be subordinate in all respects to
the Class A Notes. Except as provided in Article 6 of the Supplement, no
payments on account of interest shall be made with respect
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to the Class B Notes until all payments of interest then due and payable
with respect to the Class A Notes (including, without limitation, all
accrued interest, all interest accrued on such accrued interest, and all
Class A Deficiency Amounts) have been made in full. The Class B-1 Notes
will be subordinated to the Class A-1 Notes, such that no payments on
account of principal shall be made with respect to the Class B-1 Notes
until the Class A-1 Notes have been paid in full, the Class B-2 Notes will
be subordinated to the Class A-2 Notes, such that no payments on account
of principal shall be made with respect to the Class B-2 Notes until the
Class A-2 Notes have been paid in full and the Class B-3 Notes will be
subordinated to the Class A-3 Notes, such that no payments on account of
principal shall be made with respect to the Class B-3 Notes until the
Class A-3 Notes have been paid in full; provided, however, that with
respect to (x) allocations and payments on account of principal during a
Series 1997 1/N1 Rapid Amortization Period, (y) allocation of Losses and
Recoveries at any time, and (z) any repurchase of Notes pursuant to
Section 8.1 of the Supplement, all of the Class B Notes will be
subordinated to the Class A Notes.
Section 4.15 Class C Distribution Account.
(a) Establishment of Class C Distribution Account. The Trustee
shall establish and maintain in the name of the Trustee for the benefit of
the Class C Noteholders, or cause to be established and maintained, an
account (the "Class C Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Class C Noteholders. The Class C Distribution Account shall
be maintained (i) with a Qualified Institution, or (ii) as a segregated
trust account with the corporate trust department of a depository
institution or trust company having corporate trust powers and acting as
trustee for funds deposited in the Class C Distribution Account. If the
Class C Distribution Account is not maintained in accordance with the
previous sentence, the Master Servicer shall establish a new Class C
Distribution Account, within ten (10) Business Days after obtaining
knowledge of such fact, which complies with such sentence, and shall
instruct the Trustee to transfer all cash and investments from the
non-qualifying Class C Distribution Account into the new Class C
Distribution Account. Initially, the Class C Distribution Account will be
established with the Trustee.
(b) Administration of the Class C Distribution Account. The
Master Servicer shall instruct the institution maintaining the Class C
Distribution Account to invest funds on deposit in the Class C
Distribution Account at all times in Permitted Investments; provided,
however, that any such
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investment shall mature not later than the Business Day prior to the
Payment Date following the date on which such funds were received, unless
any Permitted Investment held in the Class C Distribution Account is held
with the Paying Agent, in which case such investment may mature on such
Payment Date provided that such funds shall be available for withdrawal on
or prior to such Payment Date. The Trustee shall hold, for the benefit of
the Class C Noteholders, possession of any negotiable instruments or
securities evidencing the Permitted Investments from the time of purchase
thereof until the time of maturity.
(c) Earnings from Class C Distribution Account. Subject to the
restrictions set forth above, the Master Servicer shall have the authority
to instruct the Trustee with respect to the investment of funds on deposit
in the Class C Distribution Account. All interest and earnings (net of
losses and investment expenses) on funds on deposit in the Class C
Distribution Account shall be deemed to be on deposit and available for
distribution.
(d) Class C Distribution Account Constitutes Additional
Collateral for Class C Notes. In order to secure and provide for the
payment of the RCFC Obligations with respect to the Class C Notes (but not
the other Notes), RCFC hereby assigns, pledges, grants, transfers and sets
over to the Trustee, for the benefit of the Class C Noteholders, all of
RCFC's right, title and interest in and to the following (whether now or
hereafter existing and whether now owned or hereafter acquired): (i) the
Class C Distribution Account; (ii) all funds on deposit therein from time
to time; (iii) all certificates and instruments, if any, representing or
evidencing any or all of the Class C Distribution Account or the funds on
deposit therein from time to time; (iv) all Permitted Investments made at
any time and from time to time with monies in the Class C Distribution
Account; and (v) all proceeds of any and all of the foregoing, including,
without limitation, cash (the items in the foregoing clauses (i) through
(v) are referred to, collectively, as the "Class C Distribution Account
Collateral"). The Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Class C Distribution Account
and in all proceeds thereof. The Class C Distribution Account Collateral
shall be under the sole dominion and control of the Trustee, and the
Paying Agent at the direction of the Trustee, in each case for the benefit
of the Class C Noteholders.
Section 4.16 Class C Notes Subordinate to Class A Notes and
Class B Notes. Notwithstanding anything to the contrary contained herein
or in any other Related Document, the Class C Notes will be subordinate in
all respects to the Class A Notes and the Class B Notes. No payments on
account
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of interest shall be made with respect to the Class C Notes until all
payments of interest then due and payable with respect to the Class A
Notes and the Class B Notes (including, without limitation, all accrued
interest, all interest accrued on such accrued interest, and all Class A
Deficiency Amounts and Class B Deficiency Amounts) have been made in full.
The Class C-1 Notes will be subordinated to the Class A-1 Notes and the
Class B-1 Notes, such that no payments on account of principal shall be
made with respect to the Class C-1 Notes until the Class A-1 Notes and the
Class B-1 Notes have been paid in full the Class C-2 Notes will be
subordinated to the Class A-2 Notes and the Class B-2 Notes, such that no
payments on account of principal shall be made with respect to the Class
C-2 Notes until the Class A-2 Notes and the Class B-2 Notes have been paid
in full and the Class C-3 Notes will be subordinate to the Class A-3 Notes
and the Class B-3 Notes such that no payments on account of principal
shall be made with respect to the Class C-3 Notes until the Class A-3
Notes and the Class B-3 Notes are paid in full; provided, however, that
with respect to (x) allocations and payments on account of principal
during a Series 1997 1/N1 Rapid Amortization Period, (y) allocation of
Losses and Recoveries at any time, and (z) any repurchase of Notes
pursuant to Section 8.1 of the Supplement, all of the Class B Notes will
be subordinated to the Class A Notes.
Section 4.17 The Servicer's Failure to Instruct the Trustee to
Make a Deposit or Payment. If the Master Servicer fails to give notice or
instructions to make any payment from or deposit into the Collection
Account required to be given by the Master Servicer, at the time specified
in the Master Lease or any other Related Document (including applicable
grace periods), and such failure is known by the Trustee, the Trustee
shall make such payment or deposit into or from the Collection Account
without such notice or instruction from the Master Servicer. Pursuant to
the Master Lease, the Master Servicer has agreed that it shall, upon
request of the Trustee, promptly provide the Trustee with all information
necessary to allow the Trustee to make such a payment or deposit.
Section 4.18 Lease Payment Deficit Draw on Series 1997 1/N1
Letter of Credit.
(a) At or before [10:00 a.m.] (New York City time) on each
Payment Date, the Master Servicer shall notify the Trustee pursuant to the
Master Lease of the amount of the Series 1997 1/N1 Lease Payment Losses,
such notification to be in the form of Exhibit E to the Master Lease.
(b) So long as the Series 1997 1/N1 Letter of Credit shall not
have been terminated, on any Business Day that there are Series 1997 1/N1
Lease Payment Losses, the Trustee
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shall, by [3:00 p.m.] (New York City time) on the same Business Day, draw
on the Series 1997 1/N1 Letter of Credit by presenting a draft in an
amount equal to the lesser of (i) the Series 1997 1/N1 Lease Payment Losses
allocated to making a drawing under the Series 1997 1/N1 Letter of Credit
pursuant to Sections 4.7(a)(v)(1), (b)(v)(1) or (c)(v)(1), as applicable,
of this Supplement, Deficit and (ii) the amount available to be drawn on
the Series 1997 1/N1 Letter of Credit on such Business Day accompanied by a
Certificate of Credit Demand in the form of Annex A to the Series 1997 1/N1
Letter of Credit. The proceeds of such draw shall be immediately deposited
in the Series 1997 1/N1 Collection Account for further allocation to the
Class A Distribution Account and/or the Class B Distribution Account and/or
the Class C Distribution Account in accordance with the instructions of the
Master Servicer.
Section 4.19 Claim Under on the Demand Note.
(a) On each Determination Date, the Master Servicer shall determine
the aggregate amount, if any, of Losses that have occurred during the Related
Month. In the event that any such Losses occurring during such Related Month
exceed the amount of Recoveries received during such Related Month, the Master
Servicer shall set forth the aggregate amount of such net Losses in the Monthly
Report, and the Trustee shall make the allocations as set forth in Sections
4.7(a)(iii)(1), (b)(iii)(1) and (c)(iii)(1), as applicable, of this Supplement.
If any amounts are allocated to a claim under the Demand Note pursuant to such
Sections (any such amounts, "Demand Note Claim Amounts"), the Trustee shall
transmit to the issuer of the Demand Note a demand for repayment (each, a
"Demand Notice") under the Demand Note in the amount of the lesser of (x) the
outstanding amount of such Demand Note and (y) the Demand Note Claim Amounts, in
each case such payment to be made on or prior to the next succeeding Payment
Date by deposit of funds into the Series 1997 1/N1 Collection Amount in the
specified amount.
(b) In the event that on or prior to 10:00 a.m. (New York City time)
on the Payment Date next succeeding any Determination Date on which a Demand
Notice has been transmitted to the issuer of the Demand Note pursuant to
Section 4.19(a) above, the Demand Note issuer shall have failed to deposit into
the Series 1997 1/N1 Collection Account the amount specified in such Demand
Notice, so long as the Series 1997 1/N1 Letter of Credit shall not have been
terminated, the Trustee shall, by 2:00 p.m. (New York City time) on the same
Business Day, draw on the Series 1997 1/N1 Letter of Credit by presenting a
draft in an amount equal to that portion of the amount demanded under the
Demand Note as specified in (a) above that has not been deposited into the
Series 1997 1/N1 Collection Account as of 10:00 a.m. (New York City time),
accompanied by a Certificate of Credit Demand in the form of Annex A to the
Series 1997 1/N1 Letter of Credit. The proceeds
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of such draw shall be deposited in the Series 1997 1/N1 Collection Account for
application pursuant to Section 4.10(a)(ii), (b)(ii) or (c)(ii) of this
Supplement, as applicable.
(c) Demand Note Constitutes Additional Collateral for Series 1997
1/N1 Notes. In order to secure and provide for the payment of the RCFC
Obligations with respect to the Series 1997 1/N1 Notes (but not the other
Notes), RCFC hereby assigns, pledges, grants, transfers and sets over to the
Trustee, for the benefit of the Series 1997 1/N1 Noteholders, all of
RCFC's right, title and interest in and to the Demand Note and all proceeds
thereof. The Trustee shall possess all right, title and interest in the Demand
Note, all rights to make claims thereunder and all payments thereon and all
proceeds thereof.
Section 4.20 Series 1997 1/N1 Letter of Credit Termination
Demand.
(a) If prior to the date which is 30 days prior to the then
scheduled Series 1997 1/N1 Letter of Credit Expiration Date,
(i) there shall not have been appointed a successor
institution to act as Series 1997 1/N1 Letter of Credit Provider, or
(ii) the payments to be made by the Lessees under the Master
Lease shall not have otherwise been credit enhanced with (A) the
funding of the Series 1997 1/N1 Cash Collateral Account with cash in
the amount of the Series 1997 1/N1 Letter of Credit Amount, (B)
other cash collateral accounts, overcollateralization or
subordinated securities or (C) with the consent of the Required
Noteholders, a surety bond or other similar arrangements; provided,
however, that
(1) any such successor institution or other form of
substitute credit enhancement referred to in the foregoing
clauses (i) and (ii) shall be approved by each Rating Agency;
and
(2) any such successor institution or other form of
substitute credit enhancement referred to in the foregoing
clauses (i) or (ii)(C) shall, if the ratings with respect to
such substitute credit enhancement, if applicable, are less
than A-1 or the equivalent from Standard & Poor's (and if DCR
is then a Rating Agency, a comparable rating by DCR, if any),
be approved by the Required Noteholders;
then the Master Servicer shall notify the Trustee pursuant to the Master
Lease no later than one Business Day prior to
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the Series 1997 1/N1 Letter of Credit Expiration Date of (i) the principal
balance of all Outstanding Series 1997 1/N1 Notes on such date, and (ii)
the amount available to be drawn on the Series 1997 1/N1 Letter of Credit
on such date. Upon receipt of such notice by the Trustee on or prior to
[10:00 a.m.] (New York City time) on any Business Day, the Trustee shall,
by [3:00 p.m.] (New York City time) on such Business Day (or, in
the case of any notice given to the Trustee after [10:00 a.m.] (New York
City time), by [3:00 p.m.] (New York City time) on the next following
Business Day), draw the lesser of the amounts set forth in clauses (i)
and (ii) above on the Series 1997 1/N1 Letter of Credit by presenting a
draft accompanied by a Certificate of Termination Demand in the form of
Annex B to the Series 1997 1/N1 Letter of Credit and shall deposit the
proceeds of the disbursement resulting therefrom in a special deposit
account (the "Series 1997 1/N1 Cash Collateral Account").
(b) The Master Servicer shall notify the Trustee pursuant to
the Master Lease within one Business Day of becoming aware that the
long-term debt credit rating of the Series 1997 1/N1 Letter of Credit
Provider has fallen below "[__]" as determined by Standard & Poor's [or
"[____]" as determined by DCR, if rated by DCR]. At such time the Master
Servicer shall also notify the Trustee of (i) the principal balance of
all Outstanding Series 1997 1/N1 Notes on such date, and (ii) the Series
1997 1/N1 Letter of Credit Amount on such date. Upon receipt of such
notice by the Trustee on or prior to [10:00 a.m.] (New York City time) on
any Business Day, the Trustee shall, by [3:00 p.m.] (New York City time)
on such Business Day (or, in the case of any notice given to the Trustee
after [10:00 a.m.] (New York City time), by [3:00 p.m.] (New York City
time) on the next following Business Day), draw on the Series 1997 1/N1
Letter of Credit in an amount equal to the lesser of the principal
balance of all Outstanding Series 1997 1/N1 Notes on such Business Day
and the amount available to be drawn on the Series 1997 1/N1 Letter of
Credit on such Business Day by presenting a draft accompanied by a
Certificate of Termination Demand in the form of Annex B to the Series
1997 1/N1 Letter of Credit and shall deposit the proceeds of the
disbursement resulting therefrom in the Series 1997 1/N1 Cash Collateral
Account.
Section 4.21 The Series 1997 1/N1 Cash Collateral Account.
(a) Upon receipt of notice of a draw on the Series 1997 1/N1
Letter of Credit pursuant to Section 4.20, the Trustee shall establish and
maintain in the name of the Trustee for the benefit of the Series 1997
1/N1 Noteholders, or cause to be established and maintained, the Series
1997 1/N1 Cash Collateral Account bearing a designation clearly
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indicating that the funds deposited therein are held for the Series 1997
1/N1 Noteholders. The Series 1997 1/N1 Cash Collateral Account shall be
maintained (i) with a Qualified Institution, or (ii) as a segregated
trust account with the corporate trust department of a depository
institution or trust company having corporate trust powers and acting as
trustee for funds deposited in the Series 1997 1/N1 Cash Collateral
Account. If the Series 1997 1/N1 Cash Collateral Account is not
maintained in accordance with the prior sentence, then within 10 Business
Days after obtaining knowledge of such fact, the Master Servicer has
agreed pursuant to the Master Lease that it shall establish a new Series
1997 1/N1 Cash Collateral Account which complies with such sentence and
shall instruct the Trustee to transfer into the new Series 1997 1/N1 Cash
Collateral Account all cash and investments from the non-qualifying
Series 1997 1/N1 Cash Collateral Account. When established, the Series
1997 1/N1 Cash Collateral Account is intended to function in all respects
as the replacement for, and the equivalent of, the Series 1997 1/N1
Letter of Credit. Accordingly, following its creation, each reference to
a draw on the Series 1997 1/N1 Letter of Credit shall refer to
withdrawals from the Series 1997 1/N1 Cash Collateral Account and
references to similar terms shall mean and be a reference to actions
taken with respect to the Series 1997 1/N1 Cash Collateral Account that
correspond to actions that otherwise would have been taken with respect
to the Series 1997 1/N1 Letter of Credit. Without limiting the
generality of the foregoing, upon funding of the Series 1997 1/N1 Cash
Collateral Account, the Trustee shall, at all times when otherwise
required to make a draw under the Series 1997 1/N1 Letter of Credit
pursuant to Section 4.18 or 4.19 of this Supplement, make a draw from the
Series 1997 1/N1 Cash Collateral Account in the amount and at such time
as a draw would be made under the Series 1997 1/N1 Letter of Credit
pursuant to Section 4.18 or 4.19 of this Supplement. The Trustee shall
provide written notice to Dollar of any draw from the Series 1997 1/N1
Cash Collateral Account pursuant to Section 4.18 or 4.19 of this
Supplement.
(b) In order to secure and provide for the repayment and
payment of the obligations of RFC with respect to the Series 1997 1/N1
Notes (but not the other Notes), RCFC hereby assigns, pledges, grants,
transfers and sets over to the Trustee, for the benefit of the Series
1997 1/N1 Noteholders, all of RCFC's right, title and interest in and to
the following (whether now or hereafter existing and whether now owned or
hereafter acquired): (i) the Series 1997 1/N1 Cash Collateral Account;
(ii) all funds on deposit therein from time to time; (iii) all
certificates and instruments, if any, representing or evidencing any or
all of the Series 1997 1/N1 Cash Collateral Account or the funds on
deposit therein from time to time; (iv) all Permitted Investments made at
any time and from time to time with the
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monies in the Series 1997 1/N1 Cash Collateral Account; and (v) all
proceeds of any and all of the foregoing, including, without limitation,
cash. The Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Series 1997 1/N1 Cash
Collateral Account and in all proceeds thereof. The Series 1997 1/N1 Cash
Collateral Account shall be under the sole dominion and control of the
Trustee for the benefit of the Series 1997 1/N1 Noteholders and the
Series 1997 1/N1 Letter of Credit Provider, as their interests appear
herein, which interest in the case of the Series 1997 1/N1 Letter of
Credit Provider shall be subject to the interests of the holders of
Series 1997 1/N1 Notes as provided herein.
(c) Funds on deposit in the Series 1997 1/N1 Cash Collateral
Account shall, at the direction of the Master Servicer given pursuant to
the Master Lease, be invested by the Trustee in Permitted Investments.
Funds on deposit in the Series 1997 1/N1 Cash Collateral Account on any
Payment Date, after giving effect to any deposits to or withdrawals from
the Series 1997 1/N1 Cash Collateral Account on such Payment Date, shall
be invested in Permitted Investments that will mature at such time that
such funds will be available for withdrawal on or prior to the following
Payment Date. The proceeds of any such investment, to the extent not
distributed on such Payment Date, shall be invested in Permitted
Investments that will mature at such time that such funds will be
available for withdrawal on or prior to the Payment Date immediately
following the date of such investment. The Trustee shall maintain for the
benefit of the Series 1997 1/N1 Noteholders and the Series 1997 1/N1
Letter of Credit Provider as their interests appear herein, which
interest in the case of the Series 1997 1/N1 Letter of Credit Provider
shall be subject to the interests of the holders of the Series 1997 1/N1
Notes as provided herein, possession of the negotiable instruments or
securities evidencing the Permitted Investments from the time of purchase
thereof until the time of sale or maturity. On each Payment Date, all
interest and earnings (net of losses and investment expenses)
accrued since the preceding Payment Date on funds on deposit in the
Series 1997 1/N1 Cash Collateral Account shall be paid to the Series 1997
1/N1 Letter of Credit Provider to the extent of any unreimbursed draws on
the Series 1997 1/N1 Letter of Credit. Subject to the restrictions set
forth above, the Master Servicer, or a Person designated in writing by
the Master Servicer with written notification thereof to the Trustee,
shall have the authority to instruct the Trustee with respect to the
investment of funds on deposit in the Series 1997 1/N1 Cash Collateral
Account. For purposes of determining the availability of funds or the
balances in the Series 1997 1/N1 Cash Collateral Account for any reason
under the Indenture,
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all investment earnings on such funds shall be deemed not to be available
or on deposit.
(d) Series 1997 1/N1 Cash Collateral Account Surplus. In the
event that the Series 1997 1/N1 Cash Collateral Account Surplus on any
Payment Date, after giving effect to all withdrawals from the Series 1997
1/N1 Cash Collateral Account, is greater than zero, the Trustee, acting
in accordance with the instructions of the Servicer, shall withdraw from
the Series 1997 1/N1 Cash Collateral Account an amount equal to the Cash
Collateral Amount Surplus and shall pay from such amount to the Series
1997 1/N1 Letter of Credit Provider, an amount equal to the amount of
unreimbursed draws under the Series 1997 1/N1 Letter of Credit.
(e) Termination of Series 1997 1/N1 Cash Collateral Account.
Upon the later to occur of (i) the termination of the Indenture pursuant
to Section 10.1 of the Base Indenture and (ii) the Business Day
immediately following the Series 1997 1/N1 Letter of Credit Expiration
Date, the Trustee, acting in accordance with the instructions of
the Servicer, after the prior payment of all amounts owing to the Series
1997 1/N1 Noteholders and payable from the Series 1997 1/N1 Cash
Collateral Account as provided herein, shall withdraw from the Series
1997 1/N1 Cash Collateral Account all amounts on deposit therein for
payment to the Series 1997 1/N1 Letter of Credit Provider to the extent
of unreimbursed draws on the Series 1997 1/N1 Letter of Credit.
ARTICLE 5
AMORTIZATION EVENTS
Section 5.1 Series 1997 1/N1 Amortization Events. In addition to the
Amortization Events set forth in Section 8.1 of the Base Indenture, the
following shall be Amortization Events with respect to the Series 1997 1/N1
Notes (without notice or other action on the part of the Trustee or any Series
1997 1/N1 Noteholders):
(a) a Series 1997 1/N1 Enhancement Deficiency shall occur and
continue for at least five (5) Business Days after the Master Servicer
obtains actual knowledge thereof; provided, however, that such event or
condition shall not be an Amortization Event if (i) during such five (5)
Business Day period DTAG shall have increased the Series 1997 1/N1 Letter
of Credit Amount or RCFC shall have increased the Series 1997 1/N1
Available Subordinated Amount by allocating to the Series 1997 1/N1
Available Subordinated Amount, Eligible Vehicles theretofore allocated to
the Retained Interest or by depositing funds into the Series 1997 1/N1
Cash Collateral Account or the Series 1997 1/N1 Excess Funding Account,
in
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either case so that the Series 1997 1/N1 Enhancement Deficiency no longer
exists, and (ii) any increase in the Series 1997 1/N1 Available
Subordinated Amount pursuant to clause (i) of this Section 5.1(a)
shall be in accordance with the terms of Section 4.7(d)(E) of this
Supplement;
(b) the Series 1997 1/N1 Letter of Credit shall not be in full force
and effect and no substitute credit enhancement shall have been obtained
pursuant to the Series 1997 1/N1 Letter of Credit Reimbursement Agreement
unless (i) (A) the inclusion of the Series 1997 1/N1 Letter of Credit
Amount in the Class A Enhancement Amount is not necessary for the Class A
Enhancement Amount to equal or exceed the Minimum Class A Enhancement
Amount, (B) the inclusion of the Series 1997 1/N1 Letter of Credit Amount
in the Class B Enhancement Amount is not necessary for the Class B
Enhancement Amount to equal or exceed the Minimum Class B Enhancement
Amount and (C) the inclusion of the Series 1997 1/N1 Letter of Credit
Amount in the Class C Enhancement Amount is not necessary for the Class C
Enhancement Amount to equal or exceed the Minimum Class C Enhancement
Amount, or (ii) the Series 1997 1/N1 Cash Collateral Account shall
theretofore have been funded to the full extent required;
(c) from and after the funding of the Series 1997 1/N1 Cash
Collateral Account pursuant to Section 4.20 or 4.21 of this Supplement,
the Series 1997 1/N1 Cash Collateral Account shall be subject to
an injunction, estoppel or other stay or a Lien (other than the Lien of
the Trustee under the Indenture);
(d) an Event of Bankruptcy shall have occurred with respect to the
Series 1997 1/N1 Letter of Credit Provider or the Series 1997 1/N1 Letter
of Credit Provider repudiates the Series 1997 1/N1 Letter of Credit or
refuses to honor a proper draw thereon in accordance with the terms
thereof, unless (i) (A) the inclusion of the Series 1997 1/N1 Letter of
Credit Amount in the Class A Enhancement Amount is not necessary for the
Class A Enhancement Amount to equal or exceed the Minimum Class A
Enhancement Amount, (B) the inclusion of the Series 1997 1/N1 Letter of
Credit Amount in the Class B Enhancement Amount is not necessary for the
Class B Enhancement Amount to equal or exceed the Minimum Class B
Enhancement Amount and (C) the inclusion of the Series 1997 1/N1 Letter
of Credit Amount in the Class C Enhancement Amount is not necessary for
the Class C Enhancement Amount to equal or exceed the Minimum Class C
Enhancement Amount, or (ii) the Series 1997 1/N1 Cash Collateral Account
shall theretofore have been funded to the full extent required hereunder
and under the Series 1997 1/N1 Letter of Credit Reimbursement Agreement;
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(e) any of the Related Documents or any portion thereof shall not be
in full force and effect or enforceable in accordance with its terms or
RCFC, DTAG (including in its capacity as Master Servicer), Thrifty
(including in its capacity as a Servicer) or Dollar (including in its
capacity as a Servicer) or any successor to Thrifty or Dollar in their
respective capacities as Servicers shall so assert in writing;
(f) all principal and accrued interest of the Class A-1 Notes shall
not be paid in full on or before the Class A-1 Expected Final Payment
Date, all principal and accrued interest of the Class A-2 Notes shall not
be paid in full on or before the Class A-2 Expected Final Payment Date,
all principal and accrued interest of the Class A-3 Notes shall not be
paid in full on or before the Class A-3 Expected Final Payment Date, all
principal and accrued interest in respect of the Class B-1 Notes shall not
be paid in full on or before the Class B-1 Expected Final Payment Date,
all principal and accrued interest in respect of the Class B-2 Notes shall
not be paid in full on or before the Class B-2 Expected Final Payment
Date, all principal and accrued interest in respect of the Class B-3 Notes
shall not be paid in full on or before the Class B-3 Expected Final
Payment Date, all principal and accrued interest in respect of the Class
C-1 Notes shall not be paid in full on or before the Class C-1 Expected
Final Payment Date, all principal and accrued interest in respect of the
Class C-2 Notes shall not be paid in full on or before the Class C-2
Expected Final Payment Date, or all principal and accrued interest in
respect of the Class C-3 Notes shall not be paid in full on or before the
Class C-3 Expected Final Payment Date; or
(g) an event of default shall have occurred and be continuing under
the Master Lease.
In the case of any event described in clauses (b) through (g) above,
an Amortization Event will be deemed to have occurred with respect to the Series
1997 1/N1 Notes only if, after any applicable grace period described in such
clauses, either the Trustee, by written notice to the Issuer, or the Required
Noteholders, by written notice to the Issuer and the Trustee, declare that, as
of the date of such notice, an Amortization Event has occurred.
Section 5.2 Waiver of Past Events. Subject to Section 11.2 of the
Base Indenture, Series 1997 1/N1 Noteholders holding 100% of the aggregate
Invested Amount, by notice to the Trustee, may waive any existing Potential
Amortization Event or Amortization Event related to clause (a) of this Section
5.1 of this Supplement.
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ARTICLE 6
[RESERVED]
ARTICLE 7
FORM OF SERIES 1997 1/N1 NOTES
Section 7.1 Class A Notes.
(a) Restricted Global Class A Note. Class A Notes to be issued in
the United States will be issued in book-entry form and represented by a
Restricted Global Class A Note, substantially in the form of Exhibit A-1,
Exhibit A-2 or Exhibit A-3 (as applicable) appended hereto, with such legends as
may be applicable thereto as set forth in the Base Indenture and will be sold
initially to institutional accredited investors within the meaning of Regulation
D under the Securities Act in reliance on an exemption from the registration
requirements of the Securities Act and thereafter to qualified institutional
buyers within the meaning of, and in reliance on, Rule 144A under the Securities
Act, and shall be deposited on behalf of the purchasers of the Class A Notes
represented thereby, with a custodian for DTC, and registered in the name of
Cede as DTC's nominee, duly executed by RCFC and authenticated by the Trustee in
the manner set forth in Section 2.4 of the Base Indenture.
(b) Temporary Global Class A Note; Permanent Global Class A Note.
Class A Notes to be issued outside the United States will be issued and sold in
transactions outside the United States in reliance on Regulation S under the
Securities Act, as provided in the applicable placement agreement and shall
initially be issued in the form of a Temporary Global Class A Note,
substantially in the form of Exhibit A-4, Exhibit A-5 or Exhibit A-6 (as
applicable) appended hereto, which shall be deposited on behalf of the
purchasers of the Class A Notes represented thereby with a custodian for, and
registered in the name of a nominee of, DTC, for the accounts of Morgan Guaranty
Trust Company of New York, Brussels office, as operator of Euroclear and for
Cedel, duly executed by RCFC and authenticated by the Trustee in the manner set
forth in Section 2.4 of the Base Indenture. Interests in a Temporary Global
Class A Note will be exchangeable, in whole or in part, for interests in a
Permanent Global Class A Note, substantially in the form of Exhibit A-7, Exhibit
A-8 or Exhibit A-9 hereto, in accordance with the provisions of such Temporary
Global Class A Note and the Base Indenture (as modified by this Supplement).
Interests in a Permanent Global Class A Note will be exchangeable for a
definitive Class A Note in accordance with the provisions of such Permanent
Global Class A Note and the Base Indenture (as modified by this Supplement).
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Section 7.2 Class B Notes.
(a) Restricted Global Class B Note. Class B Notes to be issued in
the United States will be issued in book-entry form of and represented by a
Restricted Global Class B Note, substantially in the form of Exhibit B-1,
Exhibit B-2 or Exhibit B-3 (as applicable) appended hereto, with such legends as
may be applicable thereto as set forth in the Base Indenture, and will be sold
initially to institutional accredited investors within the meaning of Regulation
D under the Securities Act in reliance on an exemption from the registration
requirements of the Securities Act and thereafter to qualified institutional
buyers within the meaning of, and in reliance on, Rule 144A under the Securities
Act and shall be deposited on behalf of the purchasers of the Class B Notes
represented thereby, with a custodian for DTC, and registered in the name of
Cede as DTC's nominee, duly executed by RCFC and authenticated by the Trustee in
the manner set forth in Section 2.4 of the Base Indenture.
(b) Temporary Global Class B Note; Permanent Global Class B Note.
Class B Notes to be issued outside the United States will be issued and sold in
transactions outside the United States in reliance on Regulation S under the
Securities Act, as provided in the applicable placement agreement, and shall
initially be issued in a form of Temporary Global Class B Note, substantially in
the form of Exhibit B-4, Exhibit B-5 or Exhibit B-6 (as applicable) appended
hereto, which shall be deposited on behalf of the purchasers of the Class B
Notes represented thereby with a custodian for, and registered in the name of a
nominee of, DTC, for the accounts of Morgan Guaranty Trust Company of New York,
Brussels office, as operator of Euroclear and for Cedel, duly executed by RCFC
and authenticated by the Trustee in the manner set forth in Section 2.4 of the
Base Indenture. Interests in a Temporary Global Class B Note will be
exchangeable, in whole or in part, for interests in a Permanent Global Class B
Note substantially in the form of Exhibit B-7, Exhibit B-8 or Exhibit B-9
hereto, in accordance with the provisions of such Temporary Global Class B Note
and the Base Indenture (as modified by this Supplement). Interests in a
Permanent Global Class B Note will be exchangeable for a definitive Class B Note
in accordance with the provisions of such Permanent Global Class B Note and the
Base Indenture (as modified by this Supplement).
Section 7.3 Class C Notes.
(a) Restricted Global Class C Note. Class C Notes to be issued in
the United States will be issued in book-entry form of and represented by a
Restricted Global Class C Note, substantially in the form of Exhibit C-1,
Exhibit C-2 or Exhibit C-3 (as applicable) appended hereto, with such legends as
may be applicable thereto as set forth in the Base Indenture, and will be sold
initially to institutional accredited investors within the meaning of Regulation
D under the Securities Act in reliance
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on an exemption from the registration requirements of the Securities Act and
thereafter to qualified institutional buyers within the meaning of, and in
reliance on, Rule 144A under the Securities Act and shall be deposited on behalf
of the purchasers of the Class C Notes represented thereby, with a custodian for
DTC, and registered in the name of Cede as DTC's nominee, duly executed by RCFC
and authenticated by the Trustee in the manner set forth in Section 2.4 of the
Base Indenture.
(b) Temporary Global Class C Note; Permanent Global Class C Note.
Class C Notes to be issued outside the United States will be issued and sold in
transactions outside the United States in reliance on Regulation S under the
Securities Act, as provided in the applicable placement agreement, and shall
initially be issued in a form of Temporary Global Class C Note, substantially in
the form of Exhibit C-4, Exhibit C-5 or Exhibit C-6 (as applicable) appended
hereto, which shall be deposited on behalf of the purchasers of the Class C
Notes represented thereby with a custodian for, and registered in the name of a
nominee of, DTC, for the accounts of Morgan Guaranty Trust Company of New York,
Brussels office, as operator of Euroclear and for Cedel, duly executed by RCFC
and authenticated by the Trustee in the manner set forth in Section 2.4 of the
Base Indenture. Interests in a Temporary Global Class C Note will be
exchangeable, in whole or in part, for interests in a Permanent Global Class C
Note substantially in the form of Exhibit C-7, Exhibit C-8 or Exhibit C-9
hereto, in accordance with the provisions of such Temporary Global Class C Note
and the Base Indenture (as modified by this Supplement). Interests in a
Permanent Global Class C Note will be exchangeable for a definitive Class C Note
in accordance with the provisions of such Permanent Global Class C Note and the
Base Indenture (as modified by this Supplement).
ARTICLE 8
GENERAL
Section 8.1 Repurchase of Notes. The Class A Notes, Class B Notes
and Class C Notes shall be subject to repurchase in whole, but not in part, by
RCFC at its option in accordance with Section 5.3 of the Base Indenture, as
follows:
(a) the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes
are subject to repurchase by RCFC in whole, but not in part, on any
Payment Date, the Class B-1 Notes, the Class B-2 Notes and the Class B-3
Notes are subject to repurchase by RCFC in whole, but not in part, on any
Payment Date after the Class A Notes have been paid in full, and the Class
C-1 Notes, the Class C-2 Notes and the Class C-3 Notes are subject to
repurchase by RCFC in whole, but not in part, on any Payment Date after
the Class A Notes and the Class B
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Notes have been paid in full(each such Payment Date, a "Repurchase Date");
(b) the purchase price for any such repurchase of Series 1997 1/N1
Notes shall equal the Aggregate Principal Balance of such Notes
(determined after giving effect to any payment of principal on such
Payment Date), plus accrued and unpaid interest on such Aggregate
Principal Balance (the "Repurchase Price"); and
(c) in addition, a prepayment premium (the "Series 1997 1/N1 Note
Prepayment Premium") will be payable to the holders of a class of the
Series 1997 1/N1 Notes upon any repurchase of such class of Notes by RCFC
when the Aggregate Principal Balance of such class is greater than (i)
$____________, with respect to the Class A-1 Notes, (ii) $____________,
with respect to the Class A-2 Notes, (iii) $____________, with respect to
the Class A-3 Notes, (iv) $____________, with respect to the Class B-1
Notes, (v) $____________, with respect to the Class B-2 Notes, (vi)
$______________, with respect to the Class B-3 Notes, (vii)
$______________, with respect to the Class C-1 Notes, (viii)
$_______________, with respect to the Class C-2 Notes, and (ix)
$_____________, with respect to the Class C- 3 Notes. [The Series 1997
1/N1 Note Prepayment Premium in respect of the Series 1997 1/N1 Notes
will equal the excess, if any, of (i) the amount of interest that would
have accrued on the Aggregate Principal Balance of the applicable class
of Notes for the period commencing with the Repurchase Date and ending on
the Class A-1 Notes Expected Final Payment Date, the Class A-2 Notes
Expected Final Payment Date, the Class A-3 Notes Expected Final Payment
Date, the Class B-1 Notes Expected Final Payment Date, the Class B-2
Notes Expected Final Payment Date, the Class B-3 Notes Expected Final
Payment Date, the Class C-1 Notes Expected Final Payment Date, the Class
C-2 Notes Expected Final Payment Date or the Class C-3 Notes Expected
Final Payment Date, as applicable, at a rate equal to ____% with respect
to the Class A-1 Notes, ____% with respect to the Class A-2 Notes, ____%
with respect to the Class A-3 Notes, ____% with respect to the Class B-1
Notes, ____% with respect to the Class B-2 Notes, ____% with respect to
the Class B-3 Notes, ____% with respect to the Class C-1 Notes, ____%
with respect to the Class C-2 Notes and ____% with respect to the Class
C-3 Notes, over (ii) the corporate bond equivalent yield to maturity on
the Determination Date preceding such Repurchase Date on the [____]%
United States Treasury Note maturing ____________, discounted to present
value to such Repurchase Date at such corporate bond equivalent yield
plus [___]%, with respect to the Class A-1 Notes; the corporate bond
equivalent yield to maturity on the Determination Date preceding such
Payment Date on the ____% United States Treasury Note maturing
___________, discounted to present
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value to such Payment Date at such corporate bond equivalent yield plus
____%, with respect to the Class A-2 Notes; the corporate bond equivalent
yield to maturity on the Determination Date preceding such Payment Date on
the ____% United States Treasury Note maturing ___________, discounted to
present value to such Payment Date at such corporate bond equivalent yield
plus ____%, with respect to the Class A-3 Notes; the corporate bond
equivalent yield to maturity on the Determination Date preceding such
Payment Date on the ____% United States Treasury Note maturing
___________, discounted to present value to such Payment Date at such
corporate bond equivalent yield plus ____%, with respect to the Class B-1
Notes; the corporate bond equivalent yield to maturity on the
Determination Date preceding such Payment Date on the ____% United States
Treasury Note maturing ___________, discounted to present value to such
Payment Date at such corporate bond equivalent yield plus ____%, with
respect to the Class B-2 Notes; the corporate bond equivalent yield to
maturity on the Determination Date preceding such Payment Date on the
____% United States Treasury Note maturing ___________, discounted to
present value to such Payment Date at such corporate bond equivalent yield
plus ____%, with respect to the Class B-3 Notes; the corporate bond
equivalent yield to maturity on the Determination Date preceding such
Payment Date on the ____% United States Treasury Note maturing
___________, discounted to present value to such Payment Date at such
corporate bond equivalent yield plus ____%, with respect to the Class C-1
Notes; the corporate bond equivalent yield to maturity on the
Determination Date preceding such Payment Date on the ____% United States
Treasury Note maturing ___________, discounted to present value to such
Payment Date at such corporate bond equivalent yield plus ____%, with
respect to the Class C-2 Notes; and the corporate bond equivalent yield to
maturity on the Determination Date preceding such Payment Date on the
____% United States Treasury Note maturing ___________, discounted to
present value to such Payment Date at such corporate bond equivalent yield
plus ____%, with respect to the Class C-3 Notes.].
Section 8.2 Payment of Rating Agencies' Fees. RCFC agrees and
covenants with the Master Servicer and the Trustee to pay all reasonable fees
and expenses of the Rating Agencies and to promptly provide all documents and
other information that the Rating Agencies may reasonably request.
Section 8.3 Exhibits. The following exhibits attached hereto
supplement the exhibits included in the Indenture.
Exhibit A-1: Form of Restricted Global Class A-1 Note
Exhibit A-2: Form of Restricted Global Class A-2 Note
Exhibit A-3: Form of Restricted Global Class A-3 Note
Exhibit A-4: Form of Temporary Global Class A-1 Note
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Exhibit A-5: Form of Temporary Global Class A-2 Note
Exhibit A-6: Form of Temporary Global Class A-3 Note
Exhibit A-7: Form of Permanent Global Class A-1 Note
Exhibit A-8: Form of Permanent Global Class A-2 Note
Exhibit A-9: Form of Permanent Global Class A-3 Note
Exhibit B-1: Form of Restricted Global Class B-1 Note
Exhibit B-2: Form of Restricted Global Class B-2 Note
Exhibit B-3: Form of Restricted Global Class B-3 Note
Exhibit B-4: Form of Temporary Global Class B-1 Note
Exhibit B-5: Form of Temporary Global Class B-2 Note
Exhibit B-6: Form of Temporary Global Class B-3 Note
Exhibit B-7: Form of Permanent Global Class B-1 Note
Exhibit B-8: Form of Permanent Global Class B-2 Note
Exhibit B-9: Form of Permanent Global Class B-3 Note
Exhibit C-1: Form of Restricted Global Class C-1 Note
Exhibit C-2: Form of Restricted Global Class C-2 Note
Exhibit C-3: Form of Restricted Global Class C-3 Note
Exhibit C-4: Form of Temporary Global Class C-1 Note
Exhibit C-5: Form of Temporary Global Class C-2 Note
Exhibit C-6: Form of Temporary Global Class C-3 Note
Exhibit C-7: Form of Permanent Global Class C-1 Note
Exhibit C-8: Form of Permanent Global Class C-2 Note
Exhibit C-9: Form of Permanent Global Class C-3 Note
Exhibit D: Form of Consent
Exhibit E: Form of Demand Note
Section 8.4 Ratification of Base Indenture. As supplemented by this
Supplement and except as specified in this Supplement, the Base Indenture is in
all respects ratified and confirmed and the Base Indenture as so supplemented by
this Series Supplement shall be read, taken, and construed as one and the same
instrument. In this regard, for the purposes of the terms and conditions
governing the Series 1997 1/N1 Notes and the Group I Collateral, Section 7.28 of
the Base Indenture shall not apply.
Section 8.5 Counterparts. This Supplement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
Section 8.6 Governing Law. THIS SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAW (INCLUDING, WITHOUT LIMITATION, THE UCC) OF THE STATE OF
NEW YORK (WITHOUT GIVING EFFECT TO THE PROVISIONS THEREOF REGARDING CONFLICTS OF
LAWS), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAW.
Section 8.7 Amendments. This Supplement may be modified or amended
from time to time in accordance with the terms of the Base Indenture; provided,
however, that if, pursuant to the terms of the Base Indenture or this
Supplement, the
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consent of the Required Noteholders is required for an amendment or modification
of this Supplement, such requirement shall be satisfied if such amendment or
modification is consented to by Noteholders representing more than 50% of the
Aggregate Principal Balance of the Series 1997 1/N1 Notes affected thereby
(including for purposes of determining such aggregate outstanding principal
amount, the Aggregate Principal Balance of the Class A Notes, the Class B Notes
and the Class C Notes); provided, further, that if the consent of the Required
Noteholders is required for a proposed amendment or modification of this
Supplement that (i) affects only the Class A-1 Notes (and does not affect in any
material respect the Class A-2 Notes, the Class A-3 Notes, the Class B Notes or
the Class C Notes, as evidenced by an Opinion of Counsel to such effect), then
such requirement shall be satisfied if such amendment or modification is
consented to by Class A-1 Noteholders representing more than 50% of the
aggregate outstanding principal amount of the Class A-1 Notes (without the
necessity of obtaining the consent of the Required Noteholders in respect of the
Class A-2 Notes, the Class A-3 Notes, the Class B Notes or the Class C Notes),
(ii) affects only the Class A-2 Notes (and does not affect in any material
respect the Class A-1 Notes, the Class A-3 Notes, the Class B Notes or the Class
C Notes, as evidenced by an Opinion of Counsel to such effect), then such
requirement shall be satisfied if such amendment or modification is consented to
by Class A-2 Noteholders representing more than 50% of the aggregate outstanding
principal amount of the Class A-2 Notes (without the necessity of obtaining the
consent of the Required Noteholders in respect of the Class A-1 Notes. the Class
A-3 Notes, the Class B Notes or the Class C Notes), (iii) affects only the Class
A-3 Notes (and does not affect in any material respect the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes or the Class C Notes, as evidenced by an
Opinion of Counsel to such effect), then such requirement shall be satisfied if
such amendment or modification is consented to by Class A-3 Noteholders
representing more than 50% of the aggregate outstanding principal amount of the
Class A-3 Notes (without the necessity of obtaining the consent of the Required
Noteholders in respect of the Class A-1 Notes, the Class A-2 Notes, the Class B
Notes or the Class C Notes), (iv) affects only the Class A Notes (and does not
affect in any material respect the Class B Notes or the Class C Notes, as
evidenced by an Opinion of Counsel to such effect), then such requirement shall
be satisfied if such amendment or modification is consented to by Class A
Noteholders representing more than 50% of the aggregate outstanding principal
amount of the Class A Notes (without the necessity of obtaining the consent of
the Required Noteholders in respect of the Class B Notes or the Class C Notes),
(v) affects only the Class B-1 Notes (and does not affect in any material
respect the Class B-2 Notes, the Class B-3 Notes, the Class A Notes or the Class
C Notes, as evidenced by an Opinion of Counsel to such effect), then such
requirement shall be satisfied if such amendment or modification is consented to
by Class B-1 Noteholders representing more than 50% of the aggregate outstanding
principal amount of the
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Class B-1 Notes (without the necessity of obtaining the consent of the Required
Noteholders in respect of the Class B-2 Notes, the Class B-3 Notes, the Class A
Notes or the Class Notes), (vi) affects only the Class B-2 Notes (and does not
affect in any material respect the Class B-1 Notes, the Class B-3 Notes, the
Class A Notes or the Class C Notes, as evidenced by an Opinion of Counsel to
such effect), then such requirement shall be satisfied if such amendment or
modification is consented to by Class B-2 Noteholders representing more than 50%
of the aggregate outstanding principal amount of the Class B-2 Notes (without
the necessity of obtaining the consent of the Required Noteholders in respect of
the Class B-1 Notes, the Class B-3 Notes, the Class A Notes or the Class C
Notes), (vii) affects only the Class B-3 Notes (and does not affect in any
material respect the Class A Notes, the Class B-1 Notes, the Class B-2 Notes or
the Class C Notes, as evidenced by an Opinion of Counsel to such effect), then
such requirement shall be satisfied if such amendment or modification is
consented to by Class B-3 Noteholders representing more than 50% of the
aggregate outstanding principal amount of the Class B-3 Notes (without the
necessity of obtaining the consent of the Required Noteholders in respect of the
Class A Notes, the Class B-1 Notes, the Class B-2 Notes or the Class C Notes),
(viii) affects only the Class B Notes (and does not affect in any material
respect the Class A Notes or the Class C Notes, as evidenced by an Opinion of
Counsel to such effect), then such requirement shall be satisfied if such
amendment or modification is consented to by Class B Noteholders representing
more than 50% of the aggregate outstanding amount of the Class B Notes (without
the necessity of obtaining the consent of the Required Noteholders in respect of
the Class A Notes or the Class C Notes) (ix) affects only the Class C-1 Notes
(and does not affect in any material respect the Class A Notes, the Class B
Notes, the Class C-2 Notes or the Class C-3 Notes, as evidenced by an Opinion of
Counsel to such effect), then such requirement shall be satisfied if such
amendment or modification is consented to by Class C-1 Noteholders representing
more than 50% of the aggregate outstanding principal amount of the Class C-1
Notes (without the necessity of obtaining the consent of the Required
Noteholders in respect of the Class A Notes, the Class B Notes, the Class C-2
Notes or the Class C-3 Notes), (x) affects only the Class C-2 Notes (and does
not affect in any material respect the Class A Notes, the Class B Notes, the
Class C-1 Notes or the Class C-3 Notes, as evidenced by an Opinion of Counsel to
such effect), then such requirement shall be satisfied if such amendment or
modification is consented to by Class C-2 Noteholders representing more than 50%
of the aggregate outstanding principal amount of the Class C-2 Notes (without
the necessity of obtaining the consent of the Required Noteholders in respect of
the Class A Notes, the Class B Notes, the Class C-1 Notes or the Class C-3
Notes),(xi) affects only the Class C-3 Notes (and does not affect in any
material respect the Class A Notes, the Class B Notes, the Class C-1 Notes or
the Class C-2 Notes, as evidenced by an Opinion of Counsel to such effect),
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<PAGE> 119
then such requirement shall be satisfied if such amendment or modification is
consented to by Class C-3 Noteholders representing more than 50% of the
aggregate outstanding principal amount of the Class C-3 Notes (without the
necessity of obtaining the consent of the Required Noteholders in respect of the
Class A Notes, the Class B Notes, the Class C-1 Notes or the Class C-2 Notes),
or (xii) affects only the Class C Notes (and does not affect in any material
respect the Class A Notes or the Class B Notes, as evidenced by an Opinion of
Counsel to such effect), then such requirement shall be satisfied if such
amendment or modification is consented to by Class C Noteholders representing
more than 50% of the aggregate outstanding principal amount of the Class C Notes
(without the necessity of obtaining the consent of the Required Noteholders in
respect of the Class A Notes or the Class B Notes). In addition, this Supplement
may be amended or modified from time to time, without the consent of any
Noteholder but with the consent of the Rating Agencies, RCFC, DTAG and the
Trustee to amend the following definitions: "Maximum Manufacturer Percentage",
"Measurement Month", "Measurement Month Average" and "Market Value Adjustment
Percentage" and to make changes related to such amendments.
[Remainder of Page Intentionally Blank]
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<PAGE> 120
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
RENTAL CAR FINANCE CORP.
By:______________________________________
Name:
Title:
BANKERS TRUST COMPANY, as Trustee
By:______________________________________
Name:
Title:
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SCHEDULE 1
Schedule of Maximum Manufacturer Percentages
Manufacturer Program Vehicles Non-Program Vehicles
- ------------ ---------------- --------------------
Chrysler Up to [___]% Up to [___]%
Ford Up to [___]% Up to [___]%
General Motors Up to [___]% Up to [___]%
Honda Up to [___]% Up to [___]%
Mazda N/A Up to [___]%
Nissan N/A Up to [___]%
Toyota Up to [___]% Up to [___]%
Non-Chrysler
Vehicles, Combined Up to [___]%* Up to [___]%
- ----------
* Chrysler, Ford, General Motors, Honda and Toyota only.
<PAGE> 1
EXHIBIT 4.8
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
dated as of December __, 1997,
among
RENTAL CAR FINANCE CORP.
as Lessor,
THRIFTY RENT-A-CAR-SYSTEM, INC.,
as Lessee and Servicer,
DOLLAR RENT A CAR SYSTEMS, INC.,
as Lessee and Servicer,
and those subsidiaries and affiliates
of Dollar Thrifty Automotive Group, Inc.
from time to time
becoming Lessees and Servicers hereunder
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
as Guarantor and Master Servicer
AS SET FORTH IN SECTION 21 HEREOF, LESSOR HAS ASSIGNED TO THE TRUSTEE (AS
DEFINED HEREIN) ALL OF LESSOR'S RIGHT, TITLE AND INTEREST IN AND TO THIS LEASE.
TO THE EXTENT, IF ANY, THAT THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM
IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE
JURISDICTION), NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE
TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED
COUNTERPART NO. 1, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE
RECEIPT THEREFOR EXECUTED BY THE TRUSTEE ON THE SIGNATURE PAGE THEREOF.
[THIS IS NOT THE ORIGINAL EXECUTED COUNTERPART NO. 1]
[THIS IS THE ORIGINAL EXECUTED COUNTERPART NO. 1
(IF BEARING ORIGINAL SIGNATURES)]
<PAGE> 2
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
This Master Motor Vehicle Lease and Servicing Agreement (the "Base Lease"
and, as supplemented by the Lease Annexes, this "Agreement" or "Lease"), dated
as of December __, 1997, is by and among RENTAL CAR FINANCE CORP., a special
purpose Oklahoma corporation (the "Lessor" or "RCFC"), as lessee and servicer,
and DOLLAR RENT A CAR SYSTEMS, INC., an Oklahoma corporation ("Dollar"), THRIFTY
RENT-A-CAR SYSTEM, INC., an Oklahoma corporation ("Thrifty"), as lessee and
servicer, and those subsidiaries of Dollar Thrifty Automotive Group, Inc. from
time to time becoming Lessees hereunder pursuant to Section 28 hereof (each, an
"Additional Lessee"), as a lessee and a servicer (each of Thrifty and Dollar,
and each of the Additional Lessees, in their respective capacities as lessees, a
"Lessee" and, collectively, the "Lessees", and, in their respective capacities
as servicers, a "Servicer" and, collectively, the "Servicers") and DOLLAR
THRIFTY AUTOMOTIVE GROUP, INC., a Delaware corporation ("DTAG"), as Master
Servicer (in such capacity, the "Master Servicer") and as Guarantor (in such
capacity, the "Guarantor").
W I T N E S S E T H:
WHEREAS, the Lessor (such capitalized term, together with all other
capitalized terms used herein, shall have the meaning assigned thereto in
Section 1) intends to refinance the Existing Fleet and to purchase, and finance
the purchase of, additional Eligible Vehicles from one or more Manufacturers
with the proceeds obtained by the issuance of its Rental Car Asset Backed Notes
included in Group I and with certain other funds; and
WHEREAS, the Lessor desires to lease to the Lessees, and the Lessees
desire to lease from the Lessor, Vehicles for use in the Lessees' respective
businesses, including subleasing Vehicles to Eligible Franchisees;
NOW, THEREFORE, in consideration of the foregoing premises, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
Section 1.1. Certain Definitions. As used in this Agreement and unless the
context requires a different meaning, capitalized terms not otherwise defined
herein shall have the meanings assigned to such terms in (a) the Definitions
List, attached as Schedule 1 to the Base Indenture, dated as of December 13,
1995 (as amended on the date hereof and as such agreement may be further
amended, supplemented, restated or otherwise modified from time to time in
accordance with its terms, the "Base Indenture"), between RCFC and Bankers Trust
Company, as trustee, as in effect on the date hereof and as such Schedule 1 may
be amended, supplemented or modified from time to time in accordance with the
terms of the Base Indenture (the "Definitions List"), or (b) each Supplement to
the Base Indenture relating to a
<PAGE> 3
Series of Shared Series Notes identified in such Supplement as being part of
Group I. Unless the context otherwise requires, terms defined in both the Base
Indenture and one or more of such Series Supplements shall have the meanings
assigned to such terms in the applicable Series Supplements.
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. When used herein, the term "financial statement" shall
include the notes and schedules thereto.
Section 1.3. Cross References; Headings. The words "hereof", "herein" and
"hereunder" and words of a similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Annex, Section, Schedule and Exhibit references contained in this
Agreement are references to Annexes, Sections, Schedules and Exhibits in or to
this Agreement unless otherwise specified. Any reference in any Section or
definition to any clause is, unless otherwise specified, to such clause of such
Section or definition. The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
Section 1.4. Interpretation. In this Agreement, unless the context
otherwise requires:
(a) the singular includes the plural and vice versa;
(b) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to any Person in a particular
capacity refers only to such Person in such capacity;
(c) reference to any gender includes the other gender;
(d) reference to any Requirement of Law means such Requirement of
Law as amended, modified, codified or reenacted, in whole or in part, and
in effect from time to time;
(e) "including" (and, with correlative meaning, "include") means
including without limiting the generality of any description preceding
such term;
(f) "or" is not exclusive;
(g) provisions apply to successive events and transactions; and
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<PAGE> 4
(h) with respect to the determination of any period of time, "from"
means "from and including" and "to" and "through" mean "to but excluding".
SECTION 2. GENERAL AGREEMENT. (a) As specified in the Lease Annexes, the
Lessees and the Lessor intend that this Agreement be (i) an operating lease with
respect to the Acquired Vehicles and (ii) a financing arrangement with respect
to the Financed Vehicles.
(b) If, notwithstanding the intent of the parties to this Agreement, this
Agreement is deemed by any court, tribunal, arbitrator or other adjudicative
authority in any proceeding (each, a "Court") to constitute a financing
arrangement or otherwise not to constitute a "true lease" with respect to the
Acquired Vehicles, then it is the intention of the parties that this Agreement
together with the Master Collateral Agency Agreement, as such agreements apply
to the Acquired Vehicles, shall constitute a security agreement under applicable
law, and it is the intention of the parties that this Agreement together with
the Master Collateral Agency Agreement, as such agreements apply to the Financed
Vehicles, shall in all events constitute a security agreement under applicable
law. Each Lessee hereby acknowledges that it has granted to the Master
Collateral Agent, pursuant to the Master Collateral Agency Agreement, for the
benefit of the Trustee, a first priority security interest in all of such
Lessee's right, title and interest in and to the Lessee Master Collateral (as
defined therein) as collateral security for the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of all of the obligations and liabilities of such Lessee to the Lessor and the
Trustee, whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred (including interest accruing after
the Lease Expiration Date and interest accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding), which may arise under, out of, or in connection with, this
Agreement and any other document made, delivered or given in connection
herewith, whether on account of rent, principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees and
disbursements of counsel to the Lessor or the Trustee that are required to be
paid by the Lessee pursuant to the terms hereof).
Section 2.1. Leasing of Vehicles. Subject to the terms and conditions
hereof, the Lessor agrees to lease to each Lessee and each Lessee agrees to
lease from the Lessor (i) on the initial Closing Date, the Existing Fleet of
Dollar, (ii) on the initial Vehicle Funding Date for an Additional Lessee, the
Existing Fleet of such Lessee and (iii) on the initial Closing Date and from
time to time thereafter, each additional Acquired Vehicle or Financed Vehicle
identified in Vehicle order summaries (each, a "Vehicle Order") produced from
time to time by such Lessee, listing Vehicles ordered from Eligible
Manufacturers by the Lessee for itself or as agent for the Lessor, pursuant to
the terms of any applicable Eligible Vehicle Disposition Programs or otherwise.
The Lessor shall, subject to Section 4 and to compliance with the terms of the
Indenture, make available to the Lessees under this Lease financing for Financed
Vehicles (other than Texas Vehicles) in an aggregate amount, and Acquired
Vehicles and Texas Vehicles for lease to the Lessees hereunder in an aggregate
Net Book Value, which collectively shall not exceed the Maximum Lease
Commitment. The applicable Lessee shall
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make available to the Lessor (a) in the case of any lease of Vehicles in the
Existing Fleet, a schedule as set forth in Attachment A-1 hereto containing
information concerning the Existing Fleet of such Lessee of a scope agreed upon
by the Lessor and such Lessee, and (b) if requested by the Lessor, each Vehicle
Order, together with a schedule containing the information with respect to the
Vehicles included within such Vehicle Order as is set forth in Attachment A-2
hereto, or in such form as is otherwise requested by the Lessor (each, a
"Vehicle Acquisition Schedule"). In addition, each Lessee shall provide such
other information regarding such Vehicles as the Lessor may reasonably require
from time to time. The Lessor shall lease to the Lessees, and the Lessees shall
lease from the Lessor, only Vehicles that are Eligible Vehicles. This Agreement,
together with the Vehicle Disposition Programs and other incentive programs
relating to the Vehicles and any other related documents attached to this
Agreement or submitted with a Vehicle Order (collectively, the "Supplemental
Documents"), will constitute the entire agreement regarding the leasing of
Vehicles by the Lessor to the Lessees.
Section 2.2. Right of Lessees to Act as Lessor's Agent. The Lessor agrees
that each Lessee may act as the Lessor's agent in placing Vehicle Orders on
behalf of the Lessor, as well as filing claims on behalf of the Lessor for
damage in transit, and other delivery related claims with respect to the
Vehicles leased hereunder; provided, however, that the Lessor may hold the
applicable Lessee liable for losses due to such Lessee's actions in performing
as the Lessor's agent hereunder. In addition, the Lessor agrees that each Lessee
may make arrangements for delivery of Vehicles to a location selected by such
Lessee at such Lessee's expense. Each Lessee or any Sublessee, as applicable,
may accept or reject Eligible Vehicles upon delivery in accordance with such
Lessee's customary business practices, and any Eligible Vehicle, if rejected,
will be deemed a Casualty hereunder. The applicable Lessee, acting as agent for
the Lessor, shall be responsible for pursuing any rights of the Lessor with
respect to the return of any Eligible Vehicle to the Manufacturer thereof, or
the applicable auction or dealer, as applicable, pursuant to the preceding
sentence. Each Lessee agrees that all vehicles ordered as provided herein shall
be Eligible Vehicles and shall be ordered utilizing the procedures consistent
with the applicable Vehicle Disposition Program or any guidelines of the
Manufacturer, auction or dealer, as applicable, for the ordering or purchasing
of Non-Program Vehicles, in each case as and to the extent applicable.
Section 2.3. Payment of Purchase Price by Lessor. Upon receipt of the
Manufacturer's invoice and certificate of origin in respect of any new Vehicle,
or such other customary documentation in respect of any used Vehicle, the Lessor
or its agent shall pay or cause to be paid to the auction, the dealer or the
related Manufacturer, as applicable, the costs and expenses incurred in
connection with the acquisition of such Vehicle under the applicable Vehicle
Disposition Program (in the case of a Program Vehicle) or otherwise (in the case
of a Non-Program Vehicle) as established by the invoice of the auction, the
dealer or the Manufacturer, as the case may be (the "Initial Acquisition Cost"),
for such Vehicle and the applicable Lessee shall pay all applicable costs and
expenses of freight, packing, handling, storage, shipment and delivery of such
Vehicle to the extent that the same have not been included within the Initial
Acquisition Cost; provided that solely in the case of the Existing
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Fleet of a Lessee, the Lessor shall pay to such party as is specified in the
related Payoff Letter an amount equal to the aggregate Net Book Value as of the
Vehicle Funding Date with respect to the Existing Fleet of such Lessee.
Section 2.4. Non-liability of Lessor. The Lessor shall not be liable to a
Lessee for any failure or delay in obtaining Vehicles or making delivery
thereof. AS BETWEEN THE LESSOR AND THE LESSEES, ACCEPTANCE FOR LEASE OF THE
VEHICLES SHALL CONSTITUTE THE APPLICABLE LESSEE'S ACKNOWLEDGMENT AND AGREEMENT
THAT THE APPLICABLE LESSEE HAS FULLY INSPECTED SUCH VEHICLES, THAT THE VEHICLES
ARE IN GOOD ORDER AND CONDITION AND ARE OF THE MANUFACTURE, DESIGN,
SPECIFICATIONS AND CAPACITY SELECTED BY SUCH LESSEE, THAT SUCH LESSEE IS
SATISFIED THAT THE SAME ARE SUITABLE FOR ITS USE AND THAT THE LESSOR IS NOT A
MANUFACTURER, AN AGENT OF THE MANUFACTURER OR OTHERWISE ENGAGED IN THE SALE OR
DISTRIBUTION OF VEHICLES, AND HAS NOT MADE AND DOES NOT HEREBY MAKE ANY
REPRESENTATION, WARRANTY OR COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO
MERCHANTABILITY, CONDITION, QUALITY, CAPABILITY, WORKMANSHIP, DURABILITY OR
SUITABILITY OF SUCH VEHICLES IN ANY RESPECT OR IN CONNECTION WITH OR FOR THE
PURPOSES OR USES OF SUCH LESSEE, OR ANY WARRANTY THAT THE LEASED VEHICLES WILL
SATISFY THE REQUIREMENTS OF ANY LAW OR ANY CONTRACT SPECIFICATION, OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, WITH RESPECT THERETO, AND AS BETWEEN THE LESSOR AND SUCH LESSEE, SUCH
LESSEE AGREES TO BEAR ALL SUCH RISKS AT ITS SOLE COST AND EXPENSE. EACH LESSEE
SPECIFICALLY WAIVES ALL RIGHTS TO MAKE CLAIMS AGAINST THE LESSOR AND ANY LEASED
VEHICLE FOR BREACH OF ANY WARRANTY OF ANY KIND WHATSOEVER AND, AS TO THE LESSOR,
EACH LESSEE LEASES THE LEASED VEHICLES "AS IS." The Lessor shall not be liable
for any failure or delay in delivering any Vehicle ordered for lease pursuant to
this Agreement, or for any failure to perform any provision hereof, resulting
from fire or other casualty, natural disaster, riot, strike or other labor
difficulty, governmental regulation or restriction, or any cause beyond the
Lessor's direct control. IN NO EVENT SHALL THE LESSOR BE LIABLE FOR ANY
INCONVENIENCES, LOSS OF PROFITS OR ANY OTHER CONSEQUENTIAL, INCIDENTAL OR
SPECIAL DAMAGES, WHATSOEVER OR HOWSOEVER CAUSED, WHETHER RESULTING FROM ANY
DEFECT IN OR ANY THEFT, DAMAGE, LOSS OR FAILURE OF ANY VEHICLE, OR OTHERWISE,
AND THERE SHALL BE NO ABATEMENT OF RENT BECAUSE OF THE SAME.
SECTION 3. TERM.
Section 3.1. Vehicle Lease Commencement Date. The "Vehicle Lease
Commencement Date" shall mean, for each Vehicle, the earlier of (a) the date
referenced in the Vehicle Acquisition Schedule with respect to such Vehicle, and
(b) the date that funds are
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expended by the Lessor to acquire or finance the acquisition of such Vehicle
(such date that funds are expended by the Lessor with respect to a Vehicle, the
"Vehicle Funding Date" for such Vehicle). A vehicle shall be deemed hereunder to
be a Vehicle leased under this Lease on each day during the period (the "Vehicle
Term") from and including the Vehicle Lease Commencement Date to but excluding
the Vehicle Lease Expiration Date.
Section 3.2. Lease Commencement Date. The "Lease Commencement Date" shall
mean the Closing Date for the first Series of Shared Series Notes issued under
the Indenture. The "Lease Expiration Date" shall mean the later of (i) the date
of the payment in full of all Series of Shared Series Notes included in Group I
and all outstanding Carrying Charges related thereto, and (ii) the Vehicle Lease
Expiration Date for the last Vehicle subject to lease by a Lessee hereunder. The
"Term" of this Agreement shall mean the period commencing on the Lease
Commencement Date and ending on the Lease Expiration Date.
SECTION 4. CONDITIONS PRECEDENT. The agreement of the Lessor to make
available any Acquired Vehicle for lease to the applicable Lessee, and to make
available Texas Vehicles or financing for the acquisition of any other Financed
Vehicle for lease to such Lessee upon such Lessee's placement of a Vehicle
Order, for itself or as agent of the Lessor, is subject to the terms and
conditions of the Indenture and subject to the satisfaction of the following
conditions precedent as of the Vehicle Lease Commencement Date for such Vehicle:
Section 4.1. No Default. No Lease Event of Default or Amortization Event
shall have occurred and be continuing on such date.
Section 4.2. Limitations of the Acquisition of Certain Vehicles. After
giving effect to the inclusion of such Vehicle under the Lease, there shall not
be a failure or violation of any conditions, requirements, or restrictions with
respect to the leasing of Eligible Vehicles under this Lease as is specified in
any related Series Supplement.
SECTION 5. RENT AND CHARGES. Each Lessee will pay Rent and certain other
charges on a monthly basis as set forth in this Section 5:
Section 5.1. Payment of Rent. On each Due Date, each Lessee shall pay to
the Lessor the aggregate of all Rent that has accrued during the Related Month
with respect to the Vehicles leased by such Lessee, as provided in the related
Lease Annexes.
Section 5.2. Payment of Availability Payment. On each Due Date, each
Lessee shall pay to the Lessor such Lessee's Pro Rata Share of an amount (the
"Availability Payment") in respect of the unutilized portion of the Maximum
Lease Commitment. "Availability Payment" with respect to each Due Date shall
equal the excess, if any, of (I) the sum of (a) the aggregate interest due on
all Outstanding Shared Series Notes included in Group I as of the Payment Date
next succeeding such Due Date, plus (b) an amount equal to all Carrying Charges
for the Related Month allocable to the Shared Series Notes included in Group I,
over
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(II) the sum of (a) any Monthly Variable Rent due on such Due Date, (b) any
Monthly Finance Rent due on such Due Date, and (c) any earnings on Permitted
Investments allocated to the Shared Series of Notes (less any portion thereof
allocated to the Retained Interestholder) accruing through the Determination
Date occurring prior to such Due Date and not included in the calculation of
Availability Payments with respect to any prior Due Date.
Section 5.3. Payment of Monthly Supplemental Payments. On each Due Date,
each Lessee shall pay to the Lessor the Monthly Supplemental Payments that have
accrued during the Related Month with respect to the Financed Vehicles leased
hereunder by such Lessee, as provided in Sections 6 and 7 of Annex B.
Section 5.4. Payment of Termination Payments, Casualty Payments, and Late
Return Payments. On each Due Date, each Lessee shall pay to the Lessor all
Termination Payments, Casualty Payments and Late Return Payments that have
accrued with respect to the Acquired Vehicles leased hereunder by such Lessee,
as provided in Sections 7, 12.3 and 13, respectively.
Section 5.5. Late Payment. In the event a Lessee fails to remit payment of
any amount due under this Lease on or before the Due Date, the amount not paid
will be considered delinquent and such Lessee will pay a late charge equal to
the product of (a) the VFR plus 1%, times (b) the delinquent amount for the
period from the Due Date to the date on which such delinquent amount is received
by the Trustee, times (c) the actual number of days elapsed during such period
divided by 360.
SECTION 6. INSURANCE.
Section 6.1. Fleet Insurance. Each Lessee shall at all times maintain or
cause to be maintained, with financially sound and reputable insurers, (a)
personal injury and damage insurance with respect to the Vehicles leased by such
Lessee hereunder, and (b) insurance with respect to properties and business
against loss or damage of the kinds customarily insured against by corporations
of established reputation engaged in the same or similar businesses and
similarly situated, of such types and in such amounts as are customarily carried
under similar circumstances by such other corporations. Each Lessee may, in lieu
of maintaining such insurance with insurers, self-insure.
Section 6.2. Information. Each Lessee shall, from time to time upon the
Lessor's or the Trustee's reasonable request, deliver to the Lessor and the
Trustee copies of certificates describing all insurance required by Section 6.1
which is then in effect.
SECTION 7. CASUALTY OBLIGATION. If a Vehicle becomes a Casualty, then the
applicable Lessee shall (a) promptly notify the Lessor of such occurrence, and
(b) in the case of an Acquired Vehicle, on the Due Date next succeeding the last
day of the Related Month in which the Lessee obtains actual knowledge that such
Vehicle has become a Casualty, pay to the Lessor an amount (a "Casualty
Payment") equal to the Net Book Value of such
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Vehicle, calculated as of the earlier of the last day of such Related Month and
the date such vehicle is disposed of or becomes a Casualty, as applicable. Upon
payment by the applicable Lessee to the Lessor in accordance herewith of the
Casualty Payment for any Acquired Vehicle that has become a Casualty, (i) the
Lessor shall cause title to such Vehicle to be transferred to such Lessee to
facilitate liquidation of such Vehicle by the Lessee, (ii) the Lessee shall be
entitled to any physical damage insurance proceeds applicable to such Acquired
Vehicle (if at such time the Lessee carries such insurance coverage), and (iii)
the Lien of the Master Collateral Agent on such Vehicle shall be released
thereby.
SECTION 8. VEHICLE USE. So long as no Lease Event of Default has occurred,
the Lessees may use Vehicles leased hereunder in the regular course of their
respective businesses, including subleasing such Vehicles to Eligible
Franchisees pursuant to Lessee Agreements, including Subleases, used in the
ordinary course of Lessee's business. Notwithstanding any such Lessee Agreement,
the applicable Lessee shall remain fully liable for its obligations under this
Agreement and the other Related Documents (including any obligation hereunder or
thereunder that it may cause any Franchisee to perform or fulfill). Each Lessee
shall cause all payments under the Lessee Agreements, to the extent such
payments relate to vehicles comprising the Master Collateral, to be deposited
directly into the Master Collateral Account, and upon the occurrence and during
the continuance of a Lease Event of Default, Liquidation Event of Default or
Limited Liquidation Event of Default, the Master Servicer shall promptly specify
to the Master Collateral Agent the allocation of such payments among Financing
Sources. Vehicle use shall be confined primarily to the United States, with
limited use outside the United States; provided, however, that the principal
place of business or rental office of the Eligible Franchisee with respect to
any Vehicles used outside the United States shall be located in the United
States. Each Lessee shall promptly and duly execute, deliver, file and record
all such documents, statements, filings and registrations, and take such further
actions as the Lessor, the Master Collateral Agent, the Master Servicer or the
Trustee shall from time to time reasonably request in order to establish,
perfect and maintain the Lessor's title to and interest in the Acquired Vehicles
and the related Certificates of Title as against such Lessee or any third party
in any applicable jurisdiction and to establish, perfect and maintain the Master
Collateral Agent's Lien on the Vehicles and the related Certificates of Title
(other than recordation of liens with respect to the Existing Fleet) as a
perfected lien in any applicable jurisdiction. Each Lessee may, at such Lessee's
sole expense, change the place of principal location of any Vehicles. After any
such change of location, the applicable Lessee shall take all actions necessary
(i) to maintain the Lien of the Master Collateral Agent on such Vehicles and the
Certificates of Title with respect to such Vehicles (other than recordation of
liens with respect to the Existing Fleet), and (ii) to meet or obtain all
material legal requirements applicable to such Vehicles. Following a Lease Event
of Default or Manufacturer Event of Default, and upon the Lessor's request, each
Lessee shall advise the Lessor in writing where all Vehicles leased by such
Lessee hereunder as of such date are principally located. The Lessees shall not
knowingly use any Vehicles, or knowingly permit the same to be used, for any
unlawful purpose. The Lessees shall and shall require the related Franchisees to
use reasonable precautions to prevent loss or damage to Vehicles. The Lessees
shall or shall cause the related Franchisees to comply with all
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applicable statutes, decrees, ordinances and regulations regarding acquiring,
titling, registering, leasing, insuring and disposing of Vehicles and shall or
shall require such related Franchisees to take reasonable steps to ensure that
operators are licensed. The Lessees shall or shall cause the related Franchisees
to perform, at its or their own expense, such vehicle preparation and
conditioning services with respect to Vehicles as are customary. The Lessor, the
Master Collateral Agent or the Trustee or any authorized representative of the
Lessor, the Master Collateral Agent or the Trustee may during reasonable
business hours from time to time, without disruption of the applicable Lessee's
or the related Franchisee's business, subject to applicable law, inspect
Vehicles and registration certificates, Certificates of Title and related
documents covering Vehicles wherever the same be located.
SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES.
Each Lessee, at its expense, shall be responsible for proper registration and
licensing of the Vehicles leased by it hereunder, and the titling of such
Vehicles in the name of the Lessor (in the case of Acquired Vehicles and Texas
Vehicles) or such Lessee (in the case of Vehicles in the Existing Fleet), in
each case (other than with respect to the Existing Fleet) with the Lien of the
Master Collateral Agent noted thereon, and where required, each Lessee shall or
shall cause the related Franchisees to have Vehicles inspected by any
appropriate governmental authority; provided, however, that notwithstanding the
foregoing, unless a Liquidation Event of Default shall have occurred and be
continuing, possession of all Certificates of Title shall remain with the
Servicer of the related Vehicles or the Master Servicer. Each Lessee shall pay
or cause to be paid all registration fees, title fees, license fees, traffic
summonses, penalties, judgments and fines incurred with respect to any Vehicle
leased hereunder by such Lessee during the Vehicle Term for such Vehicle or
imposed during the Vehicle Term for such Vehicle by any governmental authority
or any court of law or equity with respect to Vehicles in connection with the
Lessee's operation of Vehicles, and any such amounts paid by the Lessor, in its
discretion, on such Lessee's behalf will be reimbursed within thirty (30) days
of the Lessor notifying the Lessee of such payment. The Lessor agrees to execute
a power of attorney substantially in the form of Attachment B hereto (a "Power
of Attorney"), and such other documents as may be necessary in order to allow
each Lessee to title, register and dispose of the Acquired Vehicles and Texas
Vehicles leased by such Lessee hereunder; and each Lessee acknowledges and
agrees that with respect to the Acquired Vehicles, it has no right, title or
interest in or with respect to any Certificate of Title. Notwithstanding
anything herein to the contrary, the Lessor may terminate such Power of Attorney
as provided in Section 17.3.
SECTION 10. MAINTENANCE AND REPAIRS. Each Lessee shall or shall cause
the related Franchisees to pay for all maintenance and repairs to keep the
Vehicles leased by such Lessee hereunder in good working order and condition,
and shall or shall cause the related Franchisees to maintain such Vehicles as
required in order to keep the Manufacturer's warranty in force. Each Lessee
shall or shall cause the related Franchisees to return each Vehicle to an
authorized Manufacturer facility or the applicable Manufacturer's authorized
warranty station for warranty work. Each Lessee shall or shall cause the related
Franchisees to comply with any Manufacturer's recall of any Vehicle. Each Lessee
shall or shall cause
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the related Franchisees to pay, or cause to be paid, all usual and routine
expenses incurred in the use and operation of Vehicles including, but not
limited to, fuel, lubricants, and coolants. The Lessor, upon thirty (30) days'
prior written notice to the applicable Lessee, may pay any such expenses that
have not otherwise been paid by, or on behalf of, the Lessee (including any
failure by a related Franchisee to pay any such expenses), and any expenses
incurred by the Lessor on such Lessee's behalf for maintenance, repair,
operation or use by the Lessee of Vehicles will promptly be reimbursed (in any
event no later than the next monthly Due Date following such payment) by the
Lessee to the Lessor in the amount paid by the Lessor. The Lessees shall not
make any material alterations to any Vehicles without the prior consent of the
Lessor. Any improvements or additions to an Acquired Vehicle shall become and
remain the property of the Lessor, except that any addition or improvement to
such a Vehicle made by a Lessee shall remain the property of the Lessee if it
can be disconnected or removed from the Vehicle without impairing the
functioning of or resale value thereof, other than any function or value
provided by such addition or improvement.
SECTION 11. VEHICLE WARRANTIES. If a Vehicle is covered by a
Manufacturer's warranty, the applicable Lessee and each related Franchisee,
during the Vehicle Term, shall have the right to make any claims under such
warranty which the Lessor could make. As provided in Section 2.4, the Lessor
makes no warranty or representation whatsoever, express or implied, with respect
to any Vehicle.
SECTION 12. PROGRAM VEHICLE USAGE REQUIREMENTS AND DISPOSITION.
Section 12.1. Usage. As used herein, the term "vehicle turn-in condition"
with respect to each Program Vehicle leased hereunder by a Lessee means a set of
criteria for evaluating Program Vehicles upon their delivery at the end of the
applicable Vehicle Terms, which criteria will be determined in accordance with
the related Vehicle Disposition Program. Each Program Vehicle leased hereunder
by a Lessee not meeting the applicable Vehicle Disposition Program's vehicle
turn-in condition requirements will, unless redesignated as a Non-Program
Vehicle in accordance with Section 14, be purchased by such Lessee in accordance
with the Casualty procedure set forth in Section 7 or otherwise disposed of in
accordance with the late delivery procedure set forth in Section 13, as
applicable.
Section 12.2. Disposition Procedure. Prior to the end of the Vehicle Term,
each Lessee will or will cause the related Franchisee to deliver each Program
Vehicle leased hereunder by such Lessee (other than a Casualty) to the nearest
related Manufacturer official auction or other facility designated by such
Manufacturer at such Lessee's sole expense and in accordance with the terms of
the applicable Vehicle Disposition Program. Any transportation allowance (for
delivery costs) and any rebates or credits applicable to the unexpired term of
any license plates for a Vehicle shall inure to the benefit of and, upon receipt
thereof by the Lessor, the Trustee or the Master Collateral Agent, shall
promptly be paid over to the applicable Lessee. Each Lessee will comply with the
requirements of law and the requirements of the Vehicle Disposition Programs in
connection with, among other things, the
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delivery of Certificates of Title, documents of transfer signed as necessary,
signed Condition Reports, and signed odometer statements for the Program
Vehicles.
Section 12.3. Termination Payments. On the Due Date next succeeding the
earlier of (a) the last day of the Related Month in which the Repurchase Payment
or the Guaranteed Payment, as the case may be, from a Manufacturer pursuant to
its Vehicle Disposition Program with respect to any Acquired Vehicle that is a
Program Vehicle, is received by the Lessor, the Master Collateral Agent or the
Trustee (including by deposit into the Collection Account or the Master
Collateral Account), and (b) the thirtieth (30th) day after the expiration of
the Maximum Term for such Vehicle, the applicable Lessee shall pay to the Lessor
in respect of such Vehicle any Excess Damage Charges, Excess Mileage Charges,
early turnback surcharges and any other similar charges and penalties
(collectively, a "Program Vehicle Termination Payment") as determined by the
Manufacturer or its agent in accordance with the applicable Vehicle Disposition
Program; and on the Due Date next succeeding the earlier of (i) the last day of
the Related Month in which Disposition Proceeds from the sale or other
disposition of an Acquired Vehicle that is a Non-Program Vehicle, but is not a
Casualty, are received by the Lessor, the Master Collateral Agent or the Trustee
(including by deposit into the Collection Account or the Master Collateral
Account), and (ii) the thirtieth (30th) day after the date which is twenty-four
(24) months after the date of the original new dealer invoice for such Vehicle,
the applicable Lessee shall pay to the Lessor in respect of such Vehicle an
amount (a "Non-Program Vehicle Termination Payment") equal to the quotient of
(x) the sum of all Program Vehicle Termination Payments for the Related Month in
respect of Vehicles leased by such Lessee, divided by (y) the number of Acquired
Vehicles leased by such Lessee in respect of which such Program Vehicle
Termination Payments are payable (Program Vehicle Termination Payments and
Non-Program Vehicle Termination Payments being, collectively, "Termination
Payments"). The provisions of this Section 12.3 will survive the expiration or
earlier termination of the Term.
SECTION 13. LATE RETURN PAYMENTS. If an Acquired Vehicle which is a
Program Vehicle is not returned to the Manufacturer or accepted by the
Manufacturer in accordance with the related Vehicle Disposition Program prior to
the expiration of the Maximum Term for such Vehicle in accordance with Section
12.2, the Lessee of such Vehicle hereunder shall, unless such Vehicle has been
redesignated as a Non-Program Vehicle in accordance with Section 14, (a)
promptly notify the Lessor of its failure to return such Vehicle to the
Manufacturer or to sell such Vehicle in accordance with the applicable Auction
Procedures during the Vehicle Term, (b) use commercially reasonable efforts to
sell or otherwise dispose of such Vehicle in a manner reasonably likely to
maximize proceeds from such disposition and consistent with industry practice,
(c) cause the Disposition Proceeds, if any, from any such sale or disposition to
be paid to the Master Collateral Agent, in accordance with paragraph 10(d) of
Annex A, as applicable, and (d) on the Due Date next succeeding the earlier of
(i) the last day of the Related Month in which such Disposition Proceeds are
received by the Lessor, the Master Collateral Agent or the Trustee (including by
deposit into the Collection Account or the Master Collateral Account), and (ii)
the thirtieth (30th) day after the expiration of the Maximum Term for such
Vehicle, pay to the Lessor an
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amount (a "Late Return Payment") equal to the excess of (x) the Net Book Value
of such Vehicle, calculated as of the first day of the calendar month in which
such Maximum Term expired reduced by the Depreciation Charges accrued with
respect to such Vehicle through the date such Maximum Term expired, over (y) the
dollar amount of such Disposition Proceeds (which Late Return Payment amount may
be equal to, but not less than, zero dollars). The foregoing shall not affect
the applicable Lessee's obligation to pay on the related Due Date all Monthly
Base Rent accrued with respect to a Vehicle through the date the Maximum Term
for such vehicle expires.
SECTION 14. REDESIGNATION OF VEHICLES. (a) Upon a Program Vehicle's
becoming ineligible for repurchase by its Manufacturer or for sale in accordance
with applicable Auction Procedures, due to physical damage, repair charges or
accrued mileage, in each case in excess of that permitted under the related
Vehicle Disposition Program, or due to any failure or inability to return the
Vehicle to the Manufacturer or the designated auction site prior to the
expiration of the Maximum Term, or due to any other event or circumstance, the
applicable Servicer may designate the related Vehicle as a Non-Program Vehicle
if such Vehicle, as a Non-Program Vehicle, will be an Eligible Vehicle and if
either (a) such designation meets the conditions of Section 4.2 or (b) the
Noteholders holding the requisite Invested Amount of each applicable Series of
Notes waive, in each case as and to the extent permitted under the related
Series Supplement, the requirements of Section 4.2 as applied to this Section 14
and all such other conditions, requirements or restrictions with respect to
which a failure or violation has occurred; provided, in each case, that (x) any
additional Monthly Base Rent due with respect to each such Vehicle, relating to
the decrease, if any, of the Net Book Value of such Vehicle under the newly
applicable Depreciation Schedule, shall be paid on the next succeeding Due Date,
and (y) the minimum level of Enhancement required under the applicable Series
Supplement, after giving effect to such designation, shall be satisfied on the
date of designation.
(b) The applicable Servicer may designate a Non-Program Vehicle as a
Program Vehicle; provided, however, that (i) upon such redesignation and through
and including the applicable Vehicle Lease Expiration Date, such Vehicle shall
be an Eligible Vehicle, (ii) such Vehicle qualifies as an Eligible Vehicle under
the applicable Eligible Vehicle Disposition Program and (iii) that the
Capitalized Cost, Net Book Value and Depreciation Charges with respect to such
Vehicle shall be recalculated as of the date of such redesignation as if such
Vehicle was a Program Vehicle at the time of the initial related Vehicle Lease
Commencement Date. Upon any redesignation of a Vehicle pursuant to this Section
14(b), (x) the Lessor shall advance to the applicable Manufacturer the
difference (if any) between the original Capitalized Cost of such Vehicle and
the Capitalized Cost of such Vehicle upon redesignation, which amount shall be
deemed to be part of the Initial Acquisition Cost of such Vehicle and (y) the
applicable Lessee shall be entitled to a credit against the Monthly Base Rent
due on the next succeeding Due Date in an amount equal to the excess (if any) of
the Net Book Value of such Vehicle upon such redesignation over the original Net
Book Value of such Vehicle as of such date.
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SECTION 15. GENERAL INDEMNITY.
Section 15.1. Indemnity of the Lessor. Each Lessee agrees to indemnify and
hold harmless the Lessor and the Lessor's directors, officers, agents and
employees (collectively, together with the Persons subject to indemnity under
Section 15.2, the "Indemnified Persons") against any and all claims, demands and
liabilities of whatsoever nature, and all costs and expenses, relating to or in
any way arising out of:
Section 15.1.1. the ordering, delivery, acquisition, title on
acquisition, rejection, installation, possession, titling, retitling,
registration, re-registration, custody by such Lessee of title and
registration documents, use, non-use, misuse, operation, deficiency,
defect, transportation, repair, control or disposition of any Vehicle
leased hereunder or to be leased hereunder by such Lessee, including,
without limitation, any such Vehicle subleased to a Franchisee of such
Lessee and any of the foregoing actions, events or circumstances occurring
or arising in connection with such subleasing, any related Lessee
Agreement, any related Franchisee or any customer of any such related
Franchisee. The foregoing shall include, without limitation, any liability
(or any alleged liability) of the Lessor to any third party arising out of
any of the foregoing, including, without limitation, all legal fees, costs
and disbursements arising out of such liability (or alleged liability);
Section 15.1.2. all (i) federal, state, county, municipal, foreign
or other fees and taxes of whatsoever nature, including but not limited to
license, qualification, registration, franchise, sales, use, gross
receipts, ad valorem, business, property (real or personal), excise, motor
vehicle, and occupation fees and taxes, and all federal, state, local and
foreign income taxes (including any taxes payable by the Lessor as a
result of its being a member of any group of corporations including such
Lessee that file any tax returns on a consolidated or combined basis), and
penalties and interest thereon, whether assessed, levied against or
payable by the Lessor or otherwise, with respect to any Vehicle leased by
such Lessee hereunder or the acquisition, purchase, sale, lease, sublease,
rental, use, operation, control, ownership or disposition of any such
Vehicle by any Person or measured in any way by the value thereof or by
the business of, investment by, or ownership by the Lessor or such Lessee
with respect thereto, and (ii) documentary, stamp, filing, recording,
mortgage or other taxes, if any, which may be payable by the Lessor or
such Lessee in connection with this Agreement or the other Related
Documents or the related Lessee Agreements and any penalties or interest
with respect thereto;
Section 15.1.3. any violation by such Lessee of this Agreement or of
any Related Documents or Lessee Agreements to which such Lessee is a party
or by which it is bound or any laws, rules, regulations, orders, writs,
injunctions, decrees, consents, approvals, exemptions, authorizations,
licenses and withholdings of objecting of any governmental or public body
or authority and all other requirements having the force
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of law applicable at any time to any Vehicle or any action or transaction
by such Lessee with respect thereto or pursuant to this Agreement;
Section 15.1.4. all out of pocket costs of the Lessor (including, to
the extent not satisfied by the Initial Purchasers, the reasonable fees
and out-of-pocket expenses of counsel for the Lessor) in connection with
the execution, delivery and performance of this Agreement and the other
Related Documents, including, without limitation, overhead expenses and
any and all fees of the Trustee, Paying Agent, Clearing Agencies and
Master Collateral Agent, all fees payable in connection with any
Enhancement, any and all fees of the Servicer under the Indenture, fees
payable to the Rating Agencies and any underwriting or placement agency
fees incurred in connection with the sale of the Notes; and
Section 15.1.5. all out of pocket costs and expenses (including
reasonable attorneys' fees and legal expenses) incurred by the Lessor, the
Master Collateral Agent, the Trustee or the Noteholders in connection with
the administration, enforcement, waiver or amendment of this Agreement and
any other Related Documents, and all indemnification obligations of the
Lessor under the Related Documents.
Notwithstanding the foregoing, no Lessee shall have any duty to indemnify
any Indemnified Person for any consequential or punitive damages or claims,
demands, liabilities, costs, or expenses to the extent such claim, demand,
liability, cost or expense arises out of or is due to such Indemnified Person's
gross negligence or willful misconduct [and a Lessee's indemnification
obligation under Sections 15.1.4 and 15.1.5 shall be limited to such Lessee's
Pro Rata Share of the aggregate amount required to be paid by the Lessees
thereunder].
Section 15.2. Indemnification of the Trustee. Each Lessee agrees to
indemnify and hold harmless the Trustee and the Trustee's officers, directors,
agents and employees against any and all claims, demands and liabilities of
whatsoever nature, and all costs and expenses, relating to or in any way arising
out of: (i) any acts or omissions of such Lessee pursuant to this Agreement and
(ii) the Trustee's appointment under the Indenture and the Trustee's performance
of its obligations thereunder, or any document pertaining to any of the
foregoing to which the Trustee is a signatory, including, but not limited to any
judgment, award, settlement, reasonable attorneys' fees and other costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided, however, the Lessees shall have no duty
to indemnify the Trustee, or any other Indemnified Person pursuant to this
Section 15.2, to the extent such claim, demand, liability, cost or expense
arises out of or is due to the Trustee's or such Indemnified Person's gross
negligence or willful misconduct [and a Lessee's indemnification obligation
under clause (ii) above shall be limited to such Lessee's Pro Rata Share of the
aggregate amount required to be paid by the Lessee's thereunder]. Any such
indemnification shall not be payable from the assets of RCFC. The provisions of
this indemnity shall run directly to and be enforceable by the Trustee or any
other Indemnified Person subject to the limitations hereof. The
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indemnification provided for in this Section 15.2 shall be in addition to any
other indemnities available to the Trustee and shall survive the termination of
the duties of the Lessees hereunder and the termination of this Agreement or a
document to which the Trustee is a signatory or the resignation or removal of
the Trustee.
Section 15.3. Reimbursement Obligation by the Lessees. The applicable
Lessee shall forthwith upon demand reimburse the Lessor or the Trustee, as the
case may be, for any sum or sums expended with respect to any of the foregoing,
or shall pay such amounts directly upon request from the Lessor or the Trustee;
provided, however, that, if so requested by such Lessee, the Lessor or the
Trustee shall submit to such Lessee a statement documenting any such demand for
reimbursement or prepayment. To the extent that such Lessee in fact indemnifies
the Lessor or the Trustee under the indemnity provisions of this Agreement, such
Lessee shall be subrogated to the rights of the Lessor or the Trustee, as the
case may be, in the affected transaction and shall have a right to determine the
settlement of claims therein. The foregoing indemnity as contained in this
Section 15 shall survive the expiration or earlier termination of this Agreement
or any lease of any Vehicle hereunder; provided, however, that the factual or
legal circumstances giving rise to the Lessor's exposure to liability occur
during the period that the Lease is in effect as to the Vehicle for which such
exposure to liability arose.
Section 15.4. Notice to Lessee of Claims. The Lessor or the Trustee, as
the case may be, shall notify the applicable Lessee in writing (a "Notice of
Claim") of the pendency of any such claim, action or facts referred to in this
Section 15 for which indemnity may be required.
Section 15.5. Defense of Claims. Defense of any claim referred to in this
Section 15 for which indemnity may be required shall, at the option and request
of the applicable Lessee, be conducted by such Lessee. Following receipt of any
Notice of Claim, such applicable Lessee will inform the Indemnified Person of
its election to defend such claim. Such Indemnified Person may participate in
any such defense at its own expense, provided such participation does not
interfere with such Lessee's defense. Each Lessee agrees that no Indemnified
Person will be liable to such Lessee for any claim caused directly or indirectly
by the inadequacy of any Vehicle for any purpose or any deficiency or defect
therein or the use or maintenance thereof or any repairs, servicing or
adjustments thereto or any delay in providing or failure to provide such or any
interruption or loss of service or use thereof or any loss of business, all of
which shall be the risk and responsibility of such Lessee, except to the extent
that any of the foregoing is caused by the gross negligence or willful
misconduct of such Indemnified Person. The rights and indemnities of each
Indemnified Person hereunder are expressly made for the benefit of, and will be
enforceable by, each Indemnified Person notwithstanding the fact that such
Indemnified Person is not or is no longer a party to (or entitled to receive the
benefits of) this Agreement. This general indemnity shall not affect any claims
of the type discussed above which a Lessee may have against the Manufacturer.
SECTION 16. ASSIGNMENT. No Lessee shall, except as provided in the
Indenture, without prior written consent of the Lessor and the Trustee, assign
this Agreement or any of
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its rights hereunder to any other party; provided, however, a Lessee may
sublease or rent Vehicles leased by it under the terms of such Lessee's normal
Sublease agreements to Eligible Franchisees, and such Lessee and such Eligible
Franchisees may rent such Vehicles to consumers in the ordinary course of their
daily rental business. Any purported assignment in violation of this Section 16
shall be void and of no force or effect. Nothing contained herein shall be
deemed to restrict the right of a Lessee to acquire or dispose of, by purchase,
lease, financing, or otherwise, motor vehicles that are not subject to the
provisions of this Agreement.
SECTION 17. DEFAULT AND REMEDIES THEREFOR.
Section 17.1. Events of Default. Any one or more of the following will
constitute an event of default (a "Lease Event of Default") as that term is used
herein:
Section 17.1.1. there occurs (i) a default in the payment of any
Monthly Base Rent, Monthly Variable Rent, Monthly Finance Rent,
Termination Payment, Casualty Payment, Late Return Payment, Monthly
Supplemental Payment or Availability Payment, and the continuance thereof
for five (5) Business Days after notice thereof by the Lessor, the Master
Collateral Agent or the Trustee to the applicable Lessee, or (ii) a
default in the payment of any amount payable under this Agreement (other
than amounts described in clause (i) above) and the continuance thereof
for five (5) Business Days after notice thereof by the Lessor, the Master
Collateral Agent or the Trustee to the applicable Lessee and the
Guarantor;
Section 17.1.2. any unauthorized assignment or transfer of this
Agreement by a Lessee or the Guarantor occurs;
Section 17.1.3. the failure of a Lessee or the Guarantor to observe
or perform any other covenant, condition, agreement or provision hereof,
which failure has a Material Adverse Effect on the Lessor, and such
default continues for more than sixty (60) days after the earlier to occur
of (a) the date a Responsible Officer of such Lessee obtains knowledge of
such default or (b) the date written notice thereof is delivered by the
Lessor, the Master Collateral Agent or the Trustee to such Lessee;
provided, however, that if such failure cannot reasonably be cured within
such sixty (60) day period, no Lease Event of Default shall result
therefrom so long as, within such sixty (60) day period, such Lessee (i)
commences to cure same, (ii) delivers written notice to the Lessor, the
Master Collateral Agent and the Trustee notifying the Lessor, the Master
Collateral Agent and the Trustee of such default and setting forth the
steps such Lessee intends to take in order to cure such default and (iii)
thereafter diligently prosecutes such cure to completion and completely
cures such default on or before the ninetieth (90th) day after the earlier
of the dates set forth in clause (a) and clause (b) above;
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Section 17.1.4. if any representation or warranty made by a Lessee
or the Guarantor proves untrue in any respect as of the date of the
issuance or making thereof, which inaccuracy or falsehood has a Material
Adverse Effect on the Lessor, and such inaccuracy or falsehood is not
cured within sixty (60) days after notice thereof from the Lessor, the
Master Collateral Agent or the Trustee to such Lessee; or
Section 17.1.5. an Event of Bankruptcy occurs with respect to a
Lessee or the Guarantor.
Section 17.2. Effect of Lease Event of Default. If (i) a Lease Event of
Default described in Section 17.1.1(i), 17.1.2 or 17.1.5 shall occur, then the
Monthly Base Rent, the Monthly Supplemental Payment and Casualty Payments (in
each case calculated as if all Vehicles had become a Casualty for the Related
Month), the Monthly Variable Rent, the Availability Payment and the Monthly
Finance Rent (in each case calculated as if the full amount of interest,
principal and other charges under all outstanding Series of Notes included in
Group I were then due and payable in full), Monthly Base Rent, Termination
Payments and Late Return Payments shall, automatically, without further action
by the Lessor or the Trustee, become immediately due and payable or (ii) any
other Lease Event of Default shall occur, the Lessor or the Trustee may declare
the Rent and all other charges and payments (calculated as described in clause
(i) above) to be due and payable, whereupon such Rent and such other charges and
payments (as so calculated) shall, subject to Section 17.4, become immediately
due and payable.
Section 17.3. Rights of Lessor Upon Lease Event of Default. If a Lease
Event of Default shall occur, then the Lessor at its option may:
(i) Proceed by appropriate court action or actions, either at law or
in equity, to enforce performance by the Lessees of the applicable
covenants and terms of this Agreement or to recover damages for the breach
hereof calculated in accordance with Section 17.4; or
(ii) Subject to the rights of the Franchisees under the Subleases,
by notice in writing to each Lessee, terminate this Agreement in its
entirety and/or the right of possession hereunder of the Lessees as to the
Vehicles, and the Lessor may direct delivery by the Lessees of documents
of title to the Vehicles, whereupon all rights and interests of the
Lessees to the Vehicles (except as otherwise provided herein) will cease
and terminate (but the Lessees will remain liable hereunder as herein
provided, calculated in accordance with Section 17.4); and thereupon, the
Lessor or its agents may, subject in each case to the rights of the
Franchisees under the applicable Subleases, peaceably enter upon the
premises of the Lessees or other premises where the Vehicles may be
located and take possession of them and thenceforth hold, possess and
enjoy the same free from any right of the Lessees, or their successors or
assigns (other than the Franchisees), to employ the Vehicles for any
purpose whatsoever consistent with the mitigation of losses and damages,
and the Lessor will, nevertheless,
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have a right to recover from the Lessees any and all amounts which under
the terms of Section 17.2 (as limited by Section 17.4) of this Agreement
may be then due. The Lessor will provide the applicable Lessee with
written notice of the place and time of any sale of Financed Vehicles
pursuant to this Section 17.3 at least five (5) days prior to the proposed
sale, which shall be deemed commercially reasonable, and such Lessee may
purchase the Vehicle(s) at the sale. Each and every power and remedy
hereby specifically given to the Lessor will be in addition to every other
power and remedy hereby specifically given or now or hereafter existing at
law, in equity or in bankruptcy and each and every power and remedy may be
exercised from time to time and simultaneously and as often and in such
order as may be deemed expedient by the Lessor; provided, however, that
the measure of damages recoverable against a Lessee will in any case be
calculated in accordance with Section 17.4. All such powers and remedies
will be cumulative, and the exercise of one will not be deemed a waiver of
the right to exercise any other or others. No delay or omission of the
Lessor in the exercise of any such power or remedy and no renewal or
extension of any payments due hereunder will impair any such power or
remedy or will be construed to be a waiver of any default or any
acquiescence therein. Any extension of time for payment hereunder or other
indulgence duly granted to a Lessee will not otherwise alter or affect the
Lessor's rights or the obligations hereunder of such Lessee. The Lessor's
acceptance of any payment after it will have become due hereunder will not
be deemed to alter or affect the Lessor's rights hereunder with respect to
any subsequent payments or defaults therein; or
(iii) By notice in writing to a Lessee, terminate the Power of
Attorney of such Lessee.
Section 17.4. Measure of Damages. If a Lease Event of Default occurs and
the Lessor, the Master Collateral Agent or the Trustee exercises the remedies
granted to the Lessor, the Master Collateral Agent or the Trustee under this
Section 17 or under Section 8.2 of the Base Indenture, the amount that the
Lessor shall be permitted to recover [from the defaulting Lessee] shall be equal
to:
(i) all Rent and payments [due from the defaulting Lessee] under
this Agreement (calculated as provided in Section 17.2); plus
(ii) any damages and expenses (other than punitive and consequential
damages), which the Lessor, the Master Collateral Agent or the Trustee
will have sustained by reason of the Lease Event of Default, together with
reasonable sums for such attorneys' fees and such expenses as will be
expended or incurred in the seizure, storage, rental or sale of the
Vehicles or in the enforcement of any right or privilege hereunder or in
any consultation or action in such connection; plus
(iii) all other amounts due and payable [by the defaulting Lessee]
under this Agreement; plus
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(iv) interest from time to time on amounts due and unpaid under this
Agreement at the VFR plus 1%, computed from the date of the Lease Event of
Default or the date payments were originally due the Lessor under this
Agreement or from the date of each expenditure by the Lessor which is
recoverable from a Lessee pursuant to this Section 17, as applicable, to
and including the date payments are made by the Lessee; minus
(v) an amount equal to all sums realized by the Lessor, the Master
Collateral Agent and the Trustee from the liquidation of the Financed
Vehicles [(other than a Texas Vehicle)] leased hereunder (either by
receipt of payment from the Manufacturers under Vehicle Disposition
Programs, from sales of Vehicles to third parties, or otherwise),
provided, however, that if a Financed Vehicle [(other than a Texas
Vehicle)] is delivered to the Manufacturer or the designated auction site
for repurchase by the Manufacturer under the applicable Vehicle
Disposition Program for sale in accordance with the applicable Auction
Procedures, respectively, and such Vehicle is accepted for repurchase or
sale by such Manufacturer (as evidenced by a Condition Report indicating
that such Vehicle conforms to the requirements for repurchase or sale
under such Vehicle Disposition Program), the Lessor and the Trustee shall
be deemed to have received thirty (30) days after the date of such
acceptance or sale on account of this clause (v) an amount equal to the
Net Book Value of such Vehicle, calculated as of its Disposition Date
(less any Termination Payments payable in respect of such Vehicle).
Section 17.5. Application of Proceeds. The proceeds of any sale or other
disposition of any Financed Vehicles pursuant to Section 17.3 shall be applied
in the following order: (i) to the reasonable costs and expenses incurred by the
Lessor in connection with such sale or disposition, including any reasonable
costs associated with repairing such Vehicles, and reasonable attorneys' fees in
connection with the enforcement of this Agreement, (ii) to the payment of
outstanding Rent owing from the applicable Lessee and payments under the Lease
owing from the applicable Lessee (such proceeds to be applied first, to
outstanding Monthly Variable Rent and Monthly Finance Rent pro rata, second, to
outstanding Availability Payments, third, to outstanding Base Rent and Monthly
Supplemental Payments pro rata, fourth, to outstanding Termination Payments,
Casualty Payments and Late Return Payments pro rata and fifth, to outstanding
late charges pursuant to Sections 5.5 and 17.4(iv)), (iii) to the payment of all
other amounts due hereunder from such Lessee, (iv) to the payment of any amounts
to the Lessor, or such Person(s) as may be lawfully entitled thereto, and (v)
any remaining proceeds to such Lessee.
SECTION 18. MANUFACTURER EVENTS OF DEFAULT. Upon the occurrence of any of
the following events (each, a "Manufacturer Event of Default") with respect to a
Manufacturer, the Lessees on behalf of the Lessor (a) shall no longer place
Vehicle Orders for additional Program Vehicles from such Manufacturer (each, a
"Defaulting Manufacturer") and (b) shall cancel any Vehicle Order with such
Defaulting Manufacturer to which a vehicle
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identification number (a "VIN") has not been assigned as of the date such
Manufacturer Event of Default occurs:
Section 18.1. The failure of such Manufacturer to pay Guaranteed Payments,
Repurchase Payments and/or Incentive Payments due under, respectively, such
Manufacturer's Vehicle Disposition Programs and its incentive programs, in an
aggregate amount in excess of [$ ] (net of amounts that are the subject of
a good faith dispute, as evidenced in writing by either the applicable Lessee or
the Manufacturer questioning the accuracy of the amounts paid or payable in
respect of any such Vehicle Disposition Programs or incentive programs), which
failure, in the case of each such Guaranteed Payment, Repurchase Payment and/or
Incentive Payment included in such amount in excess of [$ ] continues for
more than ninety (90) days following the Disposition Date for the related
Vehicle.
Section 18.2. The occurrence of an Event of Bankruptcy with respect to
such Manufacturer.
SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE. Pursuant to Section
7701 of the Code and as set forth in Attachment C hereto, each Lessee will
warrant and certify that (1) such Lessee intends to use the Acquired Vehicles in
a trade or business of such Lessee, and (2) such Lessee has been advised that it
will not be treated as the owner of the Acquired Vehicles for federal income tax
purposes.
SECTION 20. SURVIVAL. In the event that, during the term of this
Agreement, a Lessee becomes liable for the payment or reimbursement of any
obligations, claims or taxes pursuant to any provision hereof, such liability
will continue, notwithstanding the expiration or termination of this Agreement,
until all such amounts are paid or reimbursed by such Lessee.
SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL AGENT AND
TRUSTEE. Notwithstanding anything to the contrary contained in this Agreement,
each Lessee and the Guarantor acknowledges that each of the Lessees and the
Lessor, pursuant to the Master Collateral Agency Agreement, has granted a
security interest to the Master Collateral Agent, for the benefit of the
Trustee, in all of its right, title and interest in, to and under the Vehicles,
the related Vehicle Disposition Programs, the Master Collateral Account and all
other Master Collateral specified in the Master Collateral Agency Agreement as
being pledged by Thrifty, Dollar and RCFC, and each Lessee and the Guarantor
further acknowledges that the Lessor, pursuant to the Indenture, has granted a
security interest to the Trustee in all of its right, title and interest in, to
and under the RCFC Agreements, the Collection Account and the other Collateral
described in the Indenture. Accordingly, each Lessee and the Guarantor agrees
that:
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(i) Subject to the terms of the Indenture, the Trustee shall have
all the rights, powers, privileges and remedies of the Lessor hereunder.
Specifically, each Lessee and the Guarantor agrees that, upon the
occurrence of an Amortization Event, the Trustee or, with respect to any
Master Collateral, the Master Collateral Agent (for and on behalf of the
Trustee) may exercise any right or remedy against each Lessee or the
Guarantor provided for herein or in the Indenture or the Master Collateral
Agency Agreement and none of the Lessees or the Guarantor will interpose
as a defense that such claim should have been asserted by the Lessor;
(ii) Upon the delivery by the Master Collateral Agent or the Trustee
of any notice to a Lessee or the Guarantor stating that a Lease Event of
Default or an Amortization Event with respect to such Lessee has occurred,
then such Lessee or the Guarantor will, if so requested by the Master
Collateral Agent (with respect to the Master Collateral) or the Trustee
(with respect to the Collateral), treat the Master Collateral Agent or the
Trustee or the Master Collateral Agent's or the Trustee's designee, as the
case may be, for all purposes as the Lessor hereunder and in all respects
comply with all obligations under this Agreement that are asserted by the
Master Collateral Agent or the Trustee as the successor to the Lessor
hereunder, irrespective of whether such Lessee or the Guarantor has
received any such notice from the Lessor;
(iii) Pursuant to the Indenture, the Lessor hereby irrevocably
authorizes and directs each Lessee to, and each Lessee shall, make
payments of Rent hereunder directly to the Trustee for deposit in the
Group I Collection Account established by the Trustee for receipt of such
payments pursuant to the Indenture, and such payments shall discharge the
obligation of such Lessee to the Lessor hereunder with respect to Rent to
the extent of such payments. Each Lessee further acknowledges that
pursuant to the Master Collateral Agency Agreement, the Lessor has
irrevocably authorized and directed such Lessee to, and such Lessee shall,
cause all payments under the related Lessee Agreements, each Vehicle
Disposition Programs, and all other Master Collateral pledged by such
Lessee to the Master Collateral Agent for the benefit of the Trustee (as
Beneficiary on behalf of the holders of each Series of Notes included in
Group I), to be made directly to the Master Collateral Agent for deposit
in the Master Collateral Account established by the Lessor for receipt of
such payments pursuant to the Master Collateral Agency Agreement, and each
such payment (other than any payment that is subject to distribution to
such Lessee or its designee pursuant to Section 2.5(b) of the Master
Collateral Agency Agreement and that is not transferred to the Collection
Account) shall constitute a prepayment in respect of the obligation of
such Lessee to pay the Rent due hereunder on the next succeeding Due Date.
Upon written notice to a Lessee of a sale or assignment by the Trustee or
Master Collateral Agent of its right, title and interest in moneys due
under this Agreement or the Master Collateral Agency Agreement to a
successor Trustee or Master Collateral Agent, such Lessee shall thereafter
make payments of Rent hereunder or payments in respect of the Master
Collateral, as applicable, to the party specified in such notice;
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(iv) Upon request made by the Master Collateral Agent at any time,
each Lessee will take such actions (other than recordation of liens with
respect to the Existing Fleet) as are requested by the Master Collateral
Agent to assist the Master Collateral Agent in maintaining the Master
Collateral Agent's perfected security interest in the Vehicles leased by
such Lessee under this Agreement, the Certificates of Title with respect
thereto and the related Master Collateral pursuant to the Master
Collateral Agency Agreement; and
(v) A security interest in the Lessor's rights under this Agreement
has been granted by the Lessor to the Trustee pursuant to the Indenture as
collateral security only for all Series of Notes included in Group I and,
accordingly, all references herein to "all" Series of Notes shall refer
only to all Series of Notes included in Group I.
SECTION 22. MODIFICATION AND SEVERABILITY. The terms of this Agreement
will not be waived, altered, modified, amended, supplemented or terminated in
any manner whatsoever except by a written instrument signed by the Lessor, each
Lessee and (except as to matters referred to in Section 27.3) the Guarantor, and
consented to in writing by the Master Collateral Agent and the Trustee, the
Required Group I Noteholders and each Enhancement Provider with respect to each
Series of Notes included in Group I. If any part of this Agreement is not valid
or enforceable according to law, all other parts will remain enforceable. The
Lessor shall provide prompt written notice to each Rating Agency of any such
waiver, modification or amendment.
Notwithstanding the foregoing provisions of this Section 22, the Lessor,
the Lessees and the Guarantor may, at any time and from time to time, without
the consent of the Trustee or any Noteholders, enter into any amendment,
supplement or other modification to this Lease to cure any apparent ambiguity or
to correct or supplement any provision in this Lease that may be inconsistent
with any other provision herein; provided, however, that (i) any such action
shall not have a materially adverse effect on the interests of any Enhancement
Provider for a Series of Notes included in Group I, based upon, at the request
of the Trustee, an Opinion of Counsel and an officers' certificate of the Lessor
and each Lessee addressed to the Trustee and (ii) a copy of such amendment,
supplement or other modification is furnished to the Trustee, each Enhancement
Provider with respect to any Series of Notes included in Group I and each Rating
Agency in accordance with the notice provisions hereof not later than ten days
prior to the execution thereof by the Lessor, the Lessees and the Guarantor.
SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES. Each Lessee and
Servicer represents and warrants to the Lessor, as to itself and the Vehicles
leased by it hereunder, and the Guarantor represents and warrants to the Lessor,
as to itself and as to each Lessee and Servicer, that as of the Closing Date
with respect to the first Series of Shared Series Notes:
Section 23.1. Due Organization, Authorization, No Conflicts, Etc. Each of
the Lessees and the Guarantor is a corporation duly organized and validly
existing and in good
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standing under the laws of the jurisdiction of its incorporation and is duly
qualified and in good standing in each jurisdiction where, because of the nature
of its activities or properties, the failure so to qualify would have a Material
Adverse Effect on such Lessee or the Guarantor. The execution, delivery and
performance by each Lessee and the Guarantor of this Agreement and the other
Related Documents to be executed and delivered by it are within its corporate
powers, have been duly authorized by all necessary corporate action (including
shareholder approval, if required), have received all necessary governmental and
other consents, approvals (in each case if any shall be required), and do not
and will not contravene or conflict with, or create a default, breach, Lien or
right of termination or acceleration under, any Requirement of Law or
Contractual Obligation binding upon it, other than such default, breach, Lien or
right of termination or acceleration which does not have a Material Adverse
Effect on such Lessee or the Guarantor, as applicable. This Agreement and each
other Related Document to be executed and delivered by a Lessee or the Guarantor
are (or when executed and delivered will be) the legal, valid, and binding
obligations of such Person, enforceable against such Person in accordance with
their respective terms, subject to bankruptcy, insolvency and other laws
affecting the enforcement of creditors' rights.
Section 23.2. Financial Information; Financial Condition. All balance
sheets, all statements of operations, of shareholders' equity and of cash flow,
and other financial data which have been or shall hereafter be furnished to the
Lessor or the Trustee for the purposes of or in connection with this Agreement
or the Related Documents have been and will be prepared in accordance with GAAP
and do and will present fairly the financial condition of the entities involved
as of the dates thereof and the results of their operations for the periods
covered thereby and that there has been no material change in the financial
condition or results of operation since the respective dates of such balance
sheets, statements and other financial data. Such financial data include the
following financial statements and reports which have been furnished to the
Lessor and the Trustee on or prior to such Closing Date:
(a) the audited balance sheet of the Guarantor and each Lessee as of
December 31, 1996 and the related statements of operations, stockholders'
equity and cash flows for the fiscal year ending on such date; and
(b) the unaudited balance sheets of the Guarantor and each Lessee
and statement of operations, accompanied by an Officer's Certificate
verifying the accuracy and completeness thereof signed by an Authorized
Officer of the Guarantor and the Lessee, for the _______ month period
ending _____________, 1997.
Section 23.3. Litigation. Except for (i) claims set forth in Schedule 1
and (ii) claims which are fully covered by insurance, no claims, litigation
(including, without limitation, derivative actions), arbitration, governmental
investigation or proceeding or inquiry is pending or, to the best of the
Lessees' and the Guarantor's knowledge, threatened against a Lessee or the
Guarantor which would, if adversely determined, have a Material Adverse Effect
on a Lessee or the Guarantor.
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Section 23.4. Liens. As of the date hereof, there is no financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) covering or purporting to cover any interest of any kind in
the Vehicles leased hereunder (other than (x) those created in connection with
the indebtedness of Dollar to Chrysler Financial Corporation (with respect to
which the security interest perfected thereby has been assigned to the Lessor on
or prior to this date), (y) those set forth in Schedule 4, and (z) other
Permitted Liens).
Section 23.5. Necessary Actions. Upon a Servicer causing the Lien of the
Master Collateral Agent to be noted on the Certificates of Title with respect to
the related Vehicles (other than the Vehicles in the Existing Fleet) or as
otherwise provided for by the Master Collateral Agency Agreement or the
Indenture, all filings, registrations and recordings necessary or appropriate to
create, preserve, protect and perfect the security interest granted to the
Master Collateral Agent in respect of the Master Collateral (other than the
Vehicles in the Existing Fleet) have been accomplished and, assuming the
delivery to, and continuing possession by, the Lessor or its agents or assignees
of all instruments and documents (in each case as defined in the UCC as in
effect in New York) a security interest in which is perfected by possession
(except with regard to property constituting fixtures, any reserved rights of
the United States government as required by law, Liens upon patents, patent
licenses, trademarks, service marks and trademark licenses, to the extent that
such Liens cannot be perfected by the filing of financing statements under the
Uniform Commercial Code as in effect in the applicable jurisdiction, Liens on
uncertified securities and security entitlements, Liens on Master Collateral the
perfection of which requires filings in or other actions under the laws of
jurisdictions outside of the United States of America, any State, territory or
dependency thereof or the District of Columbia, and Liens on general intangibles
or accounts (in each case as defined in the UCC as in effect in New York) on
which the United States of America or any department, agency, or instrumentality
thereof is the obligor), and assuming that the applicable Lessee has rights in
the Master Collateral within the meaning of the UCC as in effect in New York,
the security interest granted to the Master Collateral Agent pursuant to the
Master Collateral Agency Agreement in and to the Master Collateral (other than
the Vehicles in the Existing Fleet) constitutes a perfected security interest
therein (but as to the copyrights and copyright licenses and accounts arising
therefrom, only to the extent the UCC of the relevant jurisdiction, from time to
time in effect, is applicable), prior to the rights of all other Persons
(except, with respect to goods (as defined in the UCC), buyers in the ordinary
course of business to the extent provided in Section 9-307(1) of the UCC as from
time to time in effect in the applicable jurisdiction) therein and subject to no
other Liens other than Permitted Liens (and the interests of such buyers in the
ordinary course of business) and is entitled to all rights, priorities and
benefits afforded to perfected security interests by the UCC or other relevant
law as enacted in any relevant jurisdiction.
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Section 23.6. Employee Benefit Plans. (a) During the twelve consecutive
month period prior to the date hereof (or, with respect to each Series of Notes
included in Group I after Series 1997-1, the Closing Date with respect to such
Series of Notes): (i) no steps have been taken to terminate any Pension Plan and
(ii) no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f)(1) of ERISA in connection
with such Pension Plan; (b) no condition exists or event or transaction has
occurred with respect to any Pension Plan which could result in the incurrence
by a Lessee, the Guarantor or any member of the Controlled Group of fines,
penalties or liabilities for ERISA violations, which in the case of any of the
events referred to in clause (a) above or this clause (b) would have a Material
Adverse Effect upon such Lessee or the Guarantor, and (c) such Lessee has no
material contingent liability with respect to any post-retirement benefits under
a Welfare Plan, other than liability for continuation coverage described in
Subtitle B of Part 6 of Title I of ERISA and liabilities which would not have a
Material Adverse Effect upon any Lessee or the Guarantor.
Section 23.7. Investment Company Act. Neither the Guarantor nor any Lessee
is an "investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
Section 23.8. Regulations G, T, U and X. Neither the Guarantor nor any
Lessee is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulations G, T, U and X of the Board of Governors
of the Federal Reserve System).
Section 23.9. Business Locations; Trade Names; Principal Places of
Business Locations. Schedule 3 lists each of the locations where each Lessee and
the Guarantor maintains a chief executive office, principal place of business,
or any records; and Schedule 3 also lists such Person's legal name, each name
under or by which it conducts its business, each state in which it conducts
business and the state in which the it has its principal place of business.
Section 23.10. Taxes. Each Lessee and the Guarantor has filed all material
tax returns that are required to be filed by it, and has paid or provided
adequate reserves for the payment of all taxes, including, without limitation,
all payroll taxes and federal and state withholding taxes, and all assessments
payable by it that have become due, other than those that are not yet delinquent
or are being contested in good faith by appropriate proceedings and with respect
to which adequate reserves have been established, and are being maintained, in
accordance with GAAP. As of such Closing Date, there is no ongoing material
audit (other than routine sales tax audits and other routine audits) or, to each
Lessee's and the Guarantor's knowledge, material tax liability for any period
for which returns have been filed or were due, other than those contested in
good faith by appropriate proceedings and with respect to which (x) adequate
reserves have been established and are being maintained in accordance with GAAP
and (y) the failure to pay such taxes would not, individually or in the
aggregate, have
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a Material Adverse Effect on such Lessee or the Guarantor or a material adverse
effect on the Noteholders.
Section 23.11. Governmental Authorization. Each of the Lessees and the
Guarantor has all licenses, franchises, permits and other governmental
authorizations necessary for all businesses presently carried on by it
(including owning and leasing the real and personal property owned and leased by
it), except where failure to obtain such licenses, franchises, permits and other
governmental authorizations would not have a Material Adverse Effect on such
Person.
Section 23.12. Compliance with Laws. Each Lessee and the Guarantor: (i) is
not in violation of any Requirement of Law, which violation would have a
Material Adverse Effect on such Person, and to the best knowledge of each Lessee
and the Guarantor, no such violation has been alleged; (ii) has filed in a
timely manner all reports, documents and other materials required to be filed by
it with any Governmental Agency (and the information contained in each of such
filings is true, correct and complete in all material respects), except where
failure to make such filings would not have a Material Adverse Effect on such
Person; and (iii) has retained all records and documents required to be retained
by it pursuant to any Requirement of Law, except where failure to retain such
records would not have a Material Adverse Effect on such Person.
Section 23.13. Eligible Vehicles; Eligible Franchisees. Each Vehicle is or
will be, as the case may be, on the Vehicle Lease Commencement Date with respect
to such Vehicle, an Eligible Vehicle, and each Franchisee subleasing an Eligible
Vehicle from a Lessee is or will be, as the case may be, on the sublease
commencement date with respect to such Eligible Vehicle, an Eligible Franchisee.
Section 23.14. Supplemental Documents True and Correct. All information
contained in any Vehicle Order or other Supplemental Document which has been
submitted, or which may hereafter be submitted by a Lessee or the Guarantor to
the Lessor is, or will be, true, correct and complete.
Each of the foregoing representations and warranties will be deemed to be
remade as of the Closing Date with respect to each Series of Notes included in
Group I.
SECTION 24. CERTAIN AFFIRMATIVE COVENANTS. Each Lessee and, as applicable,
each Servicer and the Master Servicer each covenants and agrees that, until the
expiration or termination of this Agreement, and thereafter until the
obligations of such Lessee, such Servicer or the Master Servicer, as applicable,
under this Agreement and the Related Documents are satisfied in full, unless at
any time the Lessor and the Trustee shall otherwise expressly consent in
writing, it will:
Section 24.1. Corporate Existence; Foreign Qualification. Do and cause
to be done at all times all things necessary to (i) maintain and preserve its
corporate existence (except as
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permitted under Section 25.1); (ii) be duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction where the nature of its
business makes such qualification necessary and the failure to so qualify would
have a Material Adverse Effect on it; and (iii) comply with all Contractual
Obligations and Requirements of Law binding upon it, except to the extent that
its failure to comply therewith would not, in the aggregate, have a Material
Adverse Effect on it.
Section 24.2. Books, Records and Inspections. (i) Maintain books and
records that are complete and accurate in all material respects with respect to
the Vehicles leased by it under this Agreement; and (ii) at any time and from
time to time during regular business hours, and with reasonable prior notice
from the Lessor, the Master Collateral Agent or the Trustee, permit the Lessor,
the Master Collateral Agent or the Trustee (or such other person who may be
designated from time to time by the Lessor, the Master Collateral Agent or the
Trustee), or its agents or representatives to examine and make copies of all
books, records and documents in the possession or under the control of such
Person relating to the Vehicles leased under this Agreement, including without
limitation, in connection with the Master Collateral Agent's or the Trustee's
satisfaction of any requests of a Manufacturer performing an audit under its
Vehicle Disposition Program.
Section 24.3. Vehicle Disposition Programs. With respect to each Program
Vehicle leased by a Lessee, comply, or cause the related Franchisee to comply,
as appropriate, with all of its obligations under the applicable Vehicle
Disposition Program relating to such Vehicle.
Section 24.4. Reporting Requirements. Furnish, or cause to be furnished to
the Lessor (or to such other Persons as are specified below):
(a) Daily Reports. Daily reports of the Master Servicer as follows:
On each Business Day commencing on the Lease Commencement Date, the Master
Servicer shall prepare and maintain at the office of the Master Servicer,
a record (each, a "Daily Report") setting forth the aggregate amount of
(i) Guaranteed Payments, Repurchase Payments, Disposition Proceeds and
Incentive Payments received from Manufacturers under Vehicle Disposition
Programs or incentive programs, or from other Persons in connection with
the sale or disposition of Vehicles leased under this Lease, (ii)
insurance proceeds in respect of Vehicles leased under this Lease, (iii)
payments in respect of Lessee Agreements, and (iv) any other Collections
in respect of the Master Collateral allocable to the Trustee as
Beneficiary (on behalf of the holders of Notes included in Group I) and in
each case deposited in the Master Collateral Account and reported to the
Master Servicer by the Master Collateral Agent, in accordance with Section
2.5(b) of the Master Collateral Agreement, not more than the second
Business Day preceding such Daily Report, and setting forth (x) the
aggregate dollar amount of the Collections identified in the foregoing
clauses (i) through (iv), (y) during the continuance of a Lease Event of
Default or a Liquidation Event of Default, and as needed under Section
2.5(c) or (d) of the Master Collateral Agency Agreement or, in the sole
judgment of the Master Collateral Agent, as
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otherwise needed, the portion of such Collections representing proceeds of
the Master Collateral pledged by the Lessor and the portion pledged by
each Lessee, and (z) the aggregate dollar amount of Sublease payments,
insurance payments, warranty payments (if any), and other payments which,
so long as no Lease Event of Default or Liquidation Event of Default has
occurred and is continuing, may be withdrawn from the Master Collateral
Account and distributed to the applicable Lessee, as set forth in Section
2.5(b) of the Master Collateral Agency Agreement. Before 3:00 p.m. (New
York City time) on each such Business Day, the Master Servicer shall
deliver a copy of the Daily Report to the Master Collateral Agent and the
Trustee.
(b) Monthly Certificate. Monthly certificates of the Master Servicer
as follows: On each Reporting Date, the Master Servicer shall forward to
the Lessee, the Lessor, the Trustee, the Paying Agent, the Rating Agencies
and any applicable Enhancement Provider, an Officers' Certificate of the
Master Servicer substantially in the form of Exhibit A (each, a "Monthly
Certificate") setting forth, inter alia, the following information (which,
in the cases of clauses (iii), (iv) and (v) below, will be expressed as a
dollar amount per $1,000 of the original principal amount of such Notes
and as a percentage of the outstanding principal balance of the Notes as
of such date): (i) the aggregate amount of payments received from the
Manufacturers under Vehicle Disposition Programs and deposited in the
Master Collateral Account and the aggregate amount of other Group I
Collections processed for the Related Month with respect to such Reporting
Date; (ii) the Invested Percentage on the last day of the second preceding
Related Month of each Series of Notes included in Group I (or, until the
end of the second Related Month for such Series of Notes, as of the
Closing Date for such Series); (iii) for each Series included in Group I,
the total amount to be distributed to Noteholders on the next succeeding
Payment Date; (iv) for each Series included in Group I, the amount of such
distribution allocable to principal on the Notes of such Series; (v) for
each Series included in Group I, the amount of such distribution allocable
to interest on the Notes; (vi) for each Series included in Group I, the
amount of Enhancement used or drawn (or to be used or drawn) in connection
with the distribution to Noteholders of such Series on the next succeeding
Payment Date, together with the aggregate amount of remaining Enhancement
not theretofore used or drawn; (vii) for each Series included in Group I,
the Series Monthly Servicing Fee for the next succeeding Payment Date;
(viii) for each Series included in Group I, the existing Carryover
Controlled Amortization Amount, if any; (ix) for each Series included in
Group I or Class of Notes, the applicable Pool Factors with respect to
such Related Month; (x) the Group I Aggregate Asset Amount and the amount
of the Group I Asset Amount Deficiency, if any, at the close of business
on the last day of the Related Month; (xi) if Enhancement is provided for
any Series of Notes included in Group I by means of overcollateralization,
the amount of recoveries and losses for the Related Month and the amount
of any excess funds available for such overcollateralization; and (xii)
whether, to the knowledge of the Master Servicer, any Lien exists on any
of the Collateral for any Series of Notes included in Group I (other
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than Permitted Liens). The Trustee shall be under no duty to recalculate,
verify or recompute the information supplied to it under this Section
24.4(b).
(c) Audit Report. As soon as available and in any event within one
hundred ten (110) days after the end of each fiscal year of the Guarantor,
a copy of the consolidated balance sheet of the Guarantor and its
Subsidiaries as at the end of such fiscal year, together with the related
statements of earnings, stockholders' equity and cash flows for such
fiscal year, prepared in reasonable detail and in accordance with GAAP,
and certified by Deloitte & Touche, LLP (or such other independent
certified public accountants of recognized national standing as shall be
selected by the Guarantor) as presenting fairly the financial condition
and results of operations of the Guarantor and its Subsidiaries, with such
exceptions as may be noted in such accountants' report;
(d) Quarterly Statements. As soon as available, but in any event
within forty-five (45) days after the end of each fiscal quarter (except
the fourth fiscal quarter) of the Guarantor, copies of the unaudited
consolidated balance sheet of the Guarantor and its Subsidiaries as at the
end of such fiscal quarter and the related unaudited statements of
earnings, stockholders' equity and cash flows for the portion of the
fiscal year through such fiscal quarter (and as to the statements of
earnings for such fiscal quarter) in each case setting forth in
comparative form the figures for the corresponding periods of the previous
fiscal year, prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and
certified by the chief financial or accounting officer of the Guarantor as
presenting fairly the financial condition and results of operations of the
Guarantor and its Subsidiaries (subject to normal year-end adjustments);
(e) Lease Events of Defaults. Promptly after a Lessee or the
Guarantor has actual knowledge of the occurrence of any Lease Event of
Default, Potential Lease Event of Default, Manufacturer Event of Default,
Potential Manufacturer Event of Default, a written statement of an
Authorized Officer of such Person describing such event and the action
that such Lessee or the Guarantor proposes to take with respect thereto;
(f) Monthly Vehicle Statements. On or before the [third] Reporting
Date following the date hereof, and on each Reporting Date thereafter, a
monthly vehicle statement (each, a "Monthly Vehicle Statement") in a form
acceptable to the Lessor, which shall specify (i) the last eight digits of
the VIN for the Vehicles leased hereunder during the Related Month by each
Lessee, (ii) whether each such Vehicle is leased under Annex A or Annex B
hereto; (iii) the Capitalized Cost for such Vehicles, (iv) the aggregate
Net Book Value of such Vehicles as of the end of the Related Month, (v)
the VINs for those Vehicles leased hereunder during the Related Month that
have been delivered to Manufacturers or designated auction sites pursuant
to the applicable Vehicle Disposition Program, or that have been otherwise
sold, during the
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Related Month, (vi) those Vehicles leased hereunder during the Related
Month that have become a Casualty during the Related Month and their
respective Net Book Values (as of the earlier of the last day of such
Related Month and or the date such vehicle is disposed of or becomes a
Casualty, as applicable), (vii) the total amount of Monthly Base Rents,
Monthly Variable Rents, Monthly Finance Rents, Monthly Supplemental
Payments, Availability Payment, Termination Payments and Late Return
Payments due for the Related Month on such Due Date, (viii) all
prepayments of Rent received during the Related Month from Guaranteed
Payments, Repurchase Payments, Disposition Proceeds and Incentive Payments
received by the Lessor during the Related Month from the Manufacturers,
auctions and other Persons, as the case may be, (ix) the aggregate
Depreciation Charges for all Vehicles leased hereunder during the Related
Month continuing in the possession of each Lessee, (x) information with
respect to each Lessee necessary for the Master Servicer to compute the
Group I Aggregate Asset Amount as of the end of the Related Month, (xi)
information with respect to each Lessee necessary for the Master Servicer
to compute the Availability Payment for each Lessee with respect to the
Related Month, and (xii) any other charges owing from, and credits due to,
each Lessee under this Agreement;
(g) Annual Certificate. Annual Officers' Certificates of the Lessees
as follows: Each Lessee will deliver to RCFC, the Trustee, any applicable
Enhancement Provider under the Indenture, and the Rating Agencies rating
any outstanding Series of Notes, on or before April 15 of each calendar
year, beginning with April 15, 1998, an Officers' Certificate
substantially in the form of Exhibit [ ] (each, an "Annual Certificate")
(a) stating that a review of the activities of the Lessee during the
preceding calendar year (or during the initial period from the initial
Closing Date until April 15, 1998) and of its performance under this
Agreement and the other Related Documents to which each Lessee is a party
was made under the supervision of the officers signing such certificate,
(b) stating that to the best of such officers' knowledge, based on such
review, either there has occurred no event which, with the giving of
notice or passage of time or both, would constitute a Lease Event of
Default or Amortization Event and that such Lessee has fully performed all
its obligations under this Agreement and such other Related Documents
throughout such year, or, if there has occurred such event or a Lease
Event of Default or Amortization Event, specifying each such event known
to such officers and the nature and status thereof, and (c) stating (and
containing an Opinion of Counsel to the effect) that all necessary Uniform
Commercial Code continuation statements and other Uniform Commercial Code
filings have been completed (including, without limitation, any
"precautionary filings" made by each of the Lessees in favor of the
Lessor), all necessary Assignment Agreements have been executed and
delivered pursuant to Section 2.1 of the Master Collateral Agency
Agreement, and all other actions, if any, required to maintain the
perfected security interest of the Trustee or the Master Collateral Agent
on behalf of the Trustee in the Collateral and in the Master Collateral
(except for noting the Lien of the Master Collateral Agent on the
Certificates of Title for the Existing Fleet), have
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been taken and that the Trustee or the Master Collateral Agent continues
to have a perfected security interest in the Collateral and Master
Collateral;
(h) Annual Report. Annual reports of independent public accountants
as follows: On or before April 15 of each calendar year, beginning with
April 15, [1999], the Master Servicer shall cause a firm of nationally
recognized independent public accountants (who may also render other
services to the Master Servicer) to furnish a report to RCFC, the Trustee,
the Rating Agencies and any Enhancement Provider to the effect that (i)
they have compared the mathematical calculations of each amount set forth
in the monthly certificates forwarded by the Master Servicer pursuant to
this Agreement and the Master Collateral Agency Agreement during the
period covered by such report (which shall be the period from January 1 to
and including December 31 of the prior calendar year) with the Master
Servicer's computer reports which were the source of such amounts and that
on the basis of such comparison, such accountants are of the opinion that
such amounts are in agreement, except for such exceptions as they believe
to be immaterial and such other exceptions as shall be set forth in such
statement, and (ii) they have examined certain documents and the records
relating to the servicing of the Vehicles leased by such Lessee under this
Agreement and the other Related Documents to which the Master Servicer is
a party and that, on the basis of such examination, nothing has come to
the attention of such accountants that would cause such accountants to
believe that such servicing (including the allocations of Collections
under the Indenture) has not been completed in compliance with all of the
terms and conditions set forth in the Indenture, any Supplement, this
Agreement and the Master Collateral Agency Agreement, except for (a) such
exceptions as such accountants believe to be immaterial and (b) such other
exceptions as shall be set forth in such report;
(i) Quarterly Non-Program Vehicle Report. Quarterly reports of
independent public accountants as follows: On or before the second
Determination Date immediately following each March 31, June 30, September
30, and December 31, of each year, beginning with March 31, 1998, the
Master Servicer shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Master
Servicer and who is acceptable to the Rating Agencies) to furnish a report
(the "Quarterly Non-Program Vehicle Report") to the Lessor, the Trustee,
the Rating Agencies, and the Master Collateral Agent to the effect that
they have performed certain agreed upon procedures with respect to the
calculation of Disposition Proceeds obtained from the sale or other
disposition of all Non-Program Vehicles (other than Casualties) sold or
otherwise disposed of during each Related Month in such period and
compared such calculations of Disposition Proceeds with the corresponding
amounts set forth in the Daily Reports prepared by the Master Servicer
pursuant to clause (a) above and that on the basis of such comparison such
accountants are of the opinion that such amounts are in agreement, except
for such exceptions as they believe to be immaterial and such other
exceptions as shall be set forth in such report; and
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(j) Other. From time to time, such other information, documents, or
reports regarding the Vehicles or the financial position, the results of
operations or business of the Lessees as the Lessor, the Master Collateral
Agent or the Trustee may from time to time reasonably request in order to
protect the interests of the Lessor, the Master Collateral Agent or the
Trustee under or as contemplated by this Agreement or any other Related
Document.
Section 24.5. Taxes and Liabilities. Pay when due all taxes, assessments
and other material (determined on a consolidated basis) liabilities (including,
without limitation, taxes, titling fees and registration fees payable with
respect to Vehicles), except as contested in good faith and by appropriate
proceedings (but only if and so long as forfeiture of any material part of the
Vehicles leased under this Agreement will not result from the failure to pay any
such taxes, assessments or other material liabilities during the period of any
such contest) and with respect to which (a) adequate reserves have been
established, and are being maintained, in accordance with GAAP, and (b) the
failure to make such payments and the maintaining of such reserves would not
have a Material Adverse Effect on such Person or a material adverse effect on
the Noteholders.
Section 24.6. Compliance with Laws. Comply with all Requirements of Law
related to its businesses if the failure so to comply would have a Material
Adverse Effect on such Person.
Section 24.7. Maintenance of Separate Existence. Maintain certain policies
and procedures relating to its existence as a separate corporation as follows:
Each Lessee acknowledges its receipt of a copy of that certain opinion letter
issued by Mayer, Brown & Platt, dated as of the Closing Date for the initial
Series of Notes included in Group I and addressing the issue of substantive
consolidation as it may relate to the Lessees and the Lessor. Each Lessee hereby
agrees to maintain in place all policies and procedures, and take and continue
to take all actions, described in the factual assumptions set forth in such
opinion letter and relating to such Lessee; provided, however, that such Lessee
may cease to maintain any policy or procedure if and to the extent that such
Lessee delivers to the Lessor and the Trustee an Opinion of Counsel providing
that such policy or procedure is no longer necessary, due to a change in law or
otherwise, for the rendering of such earlier opinion relating to the issue of
substantive consolidation.
Section 24.8. Master Collateral Agent as Lienholder. Maintain certain
computer records as follows: Concurrently with each leasing of a Vehicle under
this Agreement, the Master Servicer and the related Servicer each shall indicate
on its computer records that the Master Collateral Agent as assignee of the
Lessor or the Lessees, as the case may be, is the holder of a Lien on such
Vehicle for the benefit of the Trustee pursuant to the terms of the Master
Collateral Agency Agreement.
Section 24.9. Maintenance of Property. Keep, or cause to be kept, all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear
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excepted; provided, that nothing in this Section 24.9 shall require it to
maintain, or to make any renewals, replacements, additions, betterment or
improvements of or to, any tangible property if such property, in its reasonable
opinion, is obsolete or surplus or unfit for use or cannot be used
advantageously in the conduct of its business.
Section 24.10. Access to Certain Documentation and Information Regarding
the Collateral. Provide to the Trustee and the Master Collateral Agent
reasonable access to the documentation regarding the Collateral and the Master
Collateral, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to the
normal security and confidentiality procedures of the applicable Lessee, the
applicable Servicer or the Master Servicer, as the case may be, and (iv) at
offices in the continental United States designated by such Lessee, such
Servicer or the Master Servicer, as the case may be, which, if they are not the
offices where such documentation normally is kept, shall be accessible without
unreasonable effort or expense.
In addition, commencing on the date ten (10) days after the date that a
Lessee or the Master Servicer receives from the Trustee or any Note Owner a
written request therefor, which request shall (x) contain a certification of
such Note Owner that such person is a Note Owner and (y) provide an address for
delivery, then and thereafter, unless and until such Lessee or the Master
Servicer receives from such Note Owner a request to discontinue same, the Lessee
or the Master Servicer, as applicable, shall deliver the information specified
below directly to such Note Owner (and, if requested, to one other person as may
be specified in such Note Owner's written request) substantially concurrently
with the delivery by such Lessee or the Master Servicer, as applicable, of such
information to any of the Trustee, any Noteholder or RCFC, provided, however, if
such Lessee or the Master Servicer, as applicable, is not otherwise obligated
hereunder to deliver such information to the Trustee, any Noteholder or RCFC on
a periodic basis, then, unless otherwise specified below, such Lessee or the
Master Servicer, as applicable, shall deliver the following information to such
Note Owner on a monthly basis on the same date as the date on which the Monthly
Certificate delivered pursuant to Section 24.4(b) is delivered:
(i) the Monthly Certificate delivered pursuant to Section 24.4(b);
(ii) the average age of RCFC's fleet;
(iii) copies of any new Vehicle Disposition Programs entered into by
RCFC during the Related Month;
(iv) a statement as to whether a Manufacturer Event of Default or
Lease Event of Default occurred during the Related Month;
(v) any financial reports required to be delivered under this Lease;
(vi) the Annual Certificate delivered hereunder;
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(vii) the Annual Report delivered hereunder;
(viii) the Quarterly Non-Program Vehicle Report; and
(ix) within ten (10) days after written request, such other
information as is reasonably requested by such Note Owner in order
to satisfy any regulatory requirements of such Note Owner.
SECTION 24.11. Maintenance of Credit Enhancement. The Guarantor agrees to
maintain with respect to each Series of Notes included in Group I (a) a letter
of credit supporting the obligations of the Lessees under this Lease in a stated
amount that, as of any date of determination, together with all cash and
Permitted Investments on deposit in the Excess Funding Account for such Series
of Notes on such date, is at least equal to the Liquidity Amount for such Series
of Notes; (b) Enhancement in the form of overcollateralization in such amount
that the Available Subordinated Amount for such Series of Notes is at all times
at least equal to 0.50% of the then current Invested Amount of such Series of
Notes; and (c) Enhancement in such form as is provided for in the applicable
Supplement in a stated amount at least equal to the Required Enhancement Amount
for such Series of Notes.
SECTION 25. CERTAIN NEGATIVE COVENANTS. Until the expiration or
termination of this Agreement and thereafter until the obligations of the
Lessees are paid in full, each Lessee agrees that, unless at any time the
Lessor, the Master Collateral Agent and the Trustee shall otherwise expressly
consent in writing, it will not:
Section 25.1. Mergers, Consolidations. Be a party to any merger or
consolidation, other than a merger or consolidation of such Lessee into or with
another entity if:
(a) the Person formed by such consolidation or into or with which
such Lessee is merged shall be a Person organized and existing under the
laws of the United States of America or any State or the District of
Columbia, and, if such Lessee is not the surviving entity, shall expressly
assume, by an agreement supplemental hereto executed and delivered to the
Trustee, the performance of every covenant and obligation of such Lessee
hereunder and under all other Related Documents;
(b) such Lessee has delivered to the Trustee an officer's
certificate and an opinion of counsel each stating that such consolidation
or merger and such supplemental agreement comply with this Section 25.1
and that all conditions precedent herein provided for relating to such
transaction have been complied with; and
(c) the Rating Agency Condition shall be met with respect to such
assignment and succession.
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Section 25.2. Other Agreements. Enter into any agreement containing any
provision which would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by it hereunder or in connection herewith.
Section 25.3. Liens. Create or permit to exist any Lien with respect to
any Vehicle leased hereunder now or hereafter existing or acquired, except Liens
in favor of the Lessor, the Master Collateral Agent or the Trustee, the lien on
the Existing Fleet in favor of Chrysler Financial Corporation, and the Liens set
forth in Schedule 4, and the following Liens to the extent such liens in the
aggregate would not have a Material Adverse Effect on the Lessor, the Master
Collateral Agent or the Trustee or the Noteholders under this Agreement or the
Indenture (all the foregoing Liens collectively, the "Permitted Liens"): (i)
Liens for current taxes not delinquent or for taxes being contested in good
faith and by appropriate proceedings, and with respect to which adequate
reserves have been established, and are being maintained, in accordance with
GAAP, (ii) Liens, including judgment liens, arising in the ordinary course of
business being contested in good faith and by appropriate proceedings, and with
respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP, (iii) Liens incurred in the ordinary course
of business in connection with worker's compensation, unemployment insurance or
other forms of governmental insurance or benefits, and (iv) mechanics'
materialmen's, landlords', warehousemen's and carrier's Liens, and other Liens
imposed by law, securing obligations arising in the ordinary course of business
that are being contested in good faith and by appropriate proceedings and with
respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP.
Section 25.4. Use of Vehicles. Knowingly use or allow the Program Vehicles
to be used in any manner that would (i) make any such Program Vehicles
ineligible for repurchase by their respective Manufacturers or for sale in
accordance with applicable Auction Procedures, except with respect to the
permitted redesignation of Program Vehicles as Non-Program Vehicles, pursuant to
Section 14, or (ii) subject the Vehicles to confiscation.
Section 25.5. Acquisition and Financing of Vehicles. Use funds on deposit
in or required to be deposited into the Excess Funding Account (as defined in
the related Supplement) for any Series of Notes included in Group I or the
Retained Distribution Account to acquire or finance Vehicles under this Lease
during any calendar month or series of consecutive calendar months if the
Vehicle Ratio for such month or series of months exceeds the following amounts:
For any month 30%
For any two consecutive months 50%
For any three consecutive months 70%
For any four consecutive months 80%
For any five consecutive months 90%
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SECTION 26. SERVICING COMPENSATION.
Section 26.1. As compensation for its servicing activities hereunder and
reimbursement for its expenses as set forth in Section 26.2, each Servicer shall
be entitled to receive from the Lessor a monthly servicing fee (the "Monthly
Servicing Fee"), payable in arrears on each Payment Date prior to the
termination of this Lease, the Indenture and the Master Collateral Agency
Agreement in an amount equal to the sum of the monthly servicing fees for such
Servicer for all Series of Notes included in Group I. Except as otherwise
specified in the related Supplement, the Monthly Servicing Fee for each Servicer
for each Series of Notes included in Group I (each, a "Series Monthly Servicing
Fee") on each Payment Date shall be equal to (i) the portion of the Supplemental
Servicing Fee allocated to such Group I Series in respect of such Servicer
pursuant to the related Supplement, plus (ii) one-twelfth of the product of (A)
such Servicer's Pro Rata Share of the Servicing Fee Percentage for such Series
and (B) the Invested Amount of such Series as of the preceding Payment Date
(after giving effect to any payments of principal on such date). The Series
Monthly Servicing Fee for each Servicer for each Series of Notes included in
Group I shall be paid to such Servicer pursuant to the procedures set forth in
the applicable Supplement. The supplemental servicing fee (the "Supplemental
Servicing Fee") for any period shall be equal to all Carrying Charges comprising
payments due from the applicable Servicer under Section 26.2 hereof.
Section 26.2. The expenses of each Servicer include, and each Servicer
agrees to pay, its Pro Rata Share of the amounts due to the Trustee pursuant to
Section 9.5 of the Indenture, plus its Pro Rata Share of the reasonable fees and
disbursements of independent accountants in connection with reports furnished
pursuant to Sections 24.4(h) and (i), plus its allocable share of all other
fees, expenses and indemnities incurred by such Servicer or the Lessor in
connection with the Servicer's activities hereunder or under the Related
Documents. The Servicers, however, shall not be liable for any liabilities,
costs or expenses of the Lessor, the Trustee or the Noteholders arising under
any tax law, including without limitation any Federal, state or local income or
franchise taxes or any other tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a failure to comply
therewith), except to the extent incurred as a result of a Servicer's violation
of the provisions of this Lease or of the Related Documents; provided, however,
the foregoing provisions of this sentence shall not affect the indemnification
obligations of the Lessees under Section 15 of this Lease. In the event that a
Servicer fails to pay any amount due to the Trustee pursuant to Section 9.5 of
the Base Indenture, the Trustee will be entitled to receive such amounts due
from the Monthly Servicing Fee prior to payment thereof to such Servicer.
SECTION 27. GUARANTY.
Section 27.1. Guaranty. In order to induce the Lessor to execute and
deliver this Lease and to lease Vehicles hereunder to the Lessees, and in
consideration thereof, the Guarantor hereby (i) unconditionally and irrevocably
guarantees to the Lessor the obligations of the Lessees to make any payments
required to be made by them under this Lease, (ii)
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agrees to cause the Lessees to duly and punctually perform and observe all of
the terms, conditions, covenants, agreements and indemnities of the Lessees
(whether in their respective capacities as Lessees or as Servicers) under this
Lease, and (iii) agrees that, if for any reason whatsoever, any Lessee (whether
in its capacity as a Lessee or as a Servicer) fails to so perform and observe
such terms, conditions, covenants, agreements and indemnities, the Guarantor
will duly and punctually perform and observe the same (the obligations referred
to in clauses (i) through (iii) above are collectively referred to as the
"Guaranteed Obligations"). The liabilities and obligations of the Guarantor
under the guaranty contained in this Section 27 (this "Guaranty") will be
absolute and unconditional under all circumstances. This Guaranty shall be a
guaranty of payment and not of collection, and the Guarantor hereby agrees that
it shall not be required that the Lessor or the Trustee assert or enforce any
rights against any of the Lessees, the Servicers or any other person before or
as a condition to the obligations of the Guarantor pursuant to this Guaranty.
Section 27.2. Scope of Guarantor's Liability. The Guarantor's obligations
hereunder are independent of the obligations of the Lessees (whether as Lessee
or as Servicer), any other guarantor or any other Person, and the Lessor may
enforce any of its rights hereunder independently of any other right or remedy
that the Lessor may at any time hold with respect to this Lease or any security
or other guaranty therefor. Without limiting the generality of the foregoing,
the Lessor may bring a separate action against the Guarantor without first
proceeding against any of the Lessees, any other guarantor or any other Person,
or any security held by the Lessor, and regardless of whether the Lessees or any
other guarantor or any other Person is joined in any such action. The
Guarantor's liability hereunder shall at all times remain effective with respect
to the full amount due from the Lessees hereunder. The Lessor's rights hereunder
shall not be exhausted by any action taken by the Lessor until all Guaranteed
Obligations have been fully paid and performed.
Section 27.3. Lessor's Right to Amend this Lease. The Guarantor authorizes
the Lessor, at any time and from time to time without notice and without
affecting the liability of the Guarantor hereunder, to: (a) alter the terms of
all or any part of the Guaranteed Obligations and any security and guaranties
therefor including without limitation modification of times for payment and
rates of interest; (b) accept new or additional instruments, documents,
agreements, security or guaranties in connection with all or any part of the
Guaranteed Obligations; (c) accept partial payments on the Guaranteed
Obligations; (d) waive, release, reconvey, terminate, abandon, subordinate,
exchange, substitute, transfer, compound, compromise, liquidate and enforce all
or any part of the Guaranteed Obligations and any security or guaranties
therefor, and apply any such security and direct the order or manner of sale
thereof (and bid and purchase at any such sale), as the Lessor in its discretion
may determine; (e) release any Lessee, any guarantor or any other Person from
any personal liability with respect to all or any part of the Guaranteed
Obligations; and (f) assign its rights under this Guaranty in whole or in part.
Section 27.4. Waiver of Certain Rights by Guarantor. The Guarantor hereby
waives each of the following to the fullest extent allowed by law:
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(a) any defense based upon:
(i) the unenforceability or invalidity of any security or other
guaranty for the Guaranteed Obligations or the lack of
perfection or failure of priority of any security for the
Guaranteed Obligations; or
(ii) any act or omission of the Lessor or any other Person that
directly or indirectly results in the discharge or release of
any of the Lessees or any other Person or any of the
Guaranteed Obligations or any security therefor; provided that
the Guarantor's liability in respect of this Guaranty shall be
released to the extent the Lessor expressly releases such
Lessee or other Person, in a writing conforming to the
requirements of Section 22, from any Guaranteed Obligations;
or
(iii) any disability or any other defense of any Lessee or any other
Person with respect to the Guaranteed Obligations, whether
consensual or arising by operation of law or any bankruptcy,
insolvency or debtor-relief proceeding, or from any other
cause;
(b) any right (whether now or hereafter existing) to require the Lessor,
as a condition to the enforcement of this Guaranty, to:
(i) accelerate the Guaranteed Obligations;
(ii) give notice to the Guarantor of the terms, time and place of
any public or private sale of any security for the Guaranteed
Obligations; or
(iii) proceed against any Lessee, any other guarantor or any other
Person, or proceed against or exhaust any security for the
Guaranteed Obligations;
(c) presentment, demand, protest and notice of any kind, including without
limitation notices of default and notice of acceptance of this Guaranty;
(d) all suretyship defenses and rights of every nature otherwise available
under New York law and the laws of any other jurisdiction;
(e) any right that the Guarantor has or may have to set-off with respect
to any right to payment from any Lessee; and
(f) all other rights and defenses the assertion or exercise of which would
in any way diminish the liability of the Guarantor hereunder.
Section 27.5. Lessees' Obligations to Guarantor and Guarantor's
Obligations to Lessees Subordinated. Until all of the Guaranteed Obligations
have been paid in full, the
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Guarantor agrees that all existing and future unsecured debts, obligations and
liabilities of the Lessees to the Guarantor or the Guarantor to any of the
Lessees (hereinafter collectively referred to as "Subordinated Debt") shall be
and hereby are expressly subordinated to the prior payment in full of the
Guaranteed Obligations, on the terms set forth in clauses (a) through (e) below,
and the payment thereof is expressly deferred in right of payment to the prior
payment in full of the Guaranteed Obligations. For purposes of this Section
27.5, to the extent the Guaranteed Obligations consist of the obligation to pay
money, the Guaranteed Obligations shall not be deemed paid in full unless and
until paid in full in cash.
(a) Upon any distribution of assets of the Guarantor or any Lessee upon
any dissolution, winding up, liquidation or reorganization of the Guarantor or
such Lessee, whether in bankruptcy, insolvency, reorganization or receivership
proceedings, or upon an assignment for the benefit of creditors or any other
marshaling of the assets and liabilities of the Guarantor or such Lessee, or
otherwise:
(i) the holders of the Guaranteed Obligations shall be entitled to
receive payment in full of the Guaranteed Obligations before
the Guarantor or any Lessee, as the case may be, is entitled
to receive any payment on account of the Subordinated Debt;
(ii) any payment by, or distribution of assets of, the Guarantor or
such Lessee of any kind or character, whether in cash,
property or securities, to which such Lessee or the Guarantor
would be entitled except for this subordination shall be paid
or delivered by the Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee, or otherwise, directly to the Trustee,
for the benefit of the holders of the Guaranteed Obligations
to be held as additional security for the Guaranteed
Obligations in an interest bearing account until the
Guaranteed Obligations have been paid in full; and
(iii) if, notwithstanding the foregoing, any payment by, or
distribution of assets of, the Guarantor or such Lessee of any
kind or character, whether in cash, property or securities, in
respect of any Subordinated Debt shall be received by such
Lessee or the Guarantor before the Guaranteed Obligations are
paid in full, such payment or distribution shall be held in
trust in an interest bearing account of the Guarantor or such
Lessee, as appropriate, and immediately paid over in kind to
the holders of the Guaranteed Obligations until the Guaranteed
Obligations have been paid in full.
(b) The Guarantor authorizes and directs each Lessee and each Lessee
authorizes and directs the Guarantor to take such action as may be necessary or
appropriate to effectuate and maintain the subordination provided herein.
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(c) No right of any holder of the Guaranteed Obligations to enforce the
subordination herein shall at any time or in any way be prejudiced or impaired
by any act or failure to act on the part of the Guarantor, any Lessee, the
Lessor or any other Person or by any noncompliance by the Guarantor, any Lessee,
the Lessor or any other Person with the terms, provisions and covenants hereof
or of the Related Documents regardless of any knowledge thereof that any such
holder of the Guaranteed Obligations may have or be otherwise charged with.
(d) Except as provided in Section 27.9, nothing express or implied herein
shall give any Person other than the Lessees, the Lessor, the Trustee and the
Guarantor any benefit or any legal or equitable right, remedy or claim
hereunder.
(e) If the Guarantor shall institute or participate in any suit, action or
proceeding against any Lessee or any Lessee shall institute or participate in
any suit, action or proceeding against the Guarantor, in violation of the terms
hereof, such Lessee or the Guarantor, as the case may be, may interpose as a
defense or dilatory plea this subordination, and the holders of the Guaranteed
Obligations are irrevocably authorized to intervene and to interpose such
defense or plea in their name or in the name of such Lessee or the Guarantor, as
the case may be.
Section 27.6. Guarantor to Pay Lessor's Expenses. The Guarantor agrees to
pay to the Lessor (or the Trustee), on demand, all costs and expenses, including
reasonable attorneys' and other professional and paraprofessional fees, incurred
by the Lessor (or the Trustee) in exercising any right, power or remedy
conferred by this Guaranty, or in the enforcement of this Guaranty, whether or
not any action is filed in connection therewith. Until paid to the Lessor, such
amounts shall bear interest, commencing with the Lessor's demand therefor, for
each Interest Period during the period from the date of such demand until paid,
at the VFR for such Interest Period plus 1% (calculated on the basis of a
360-day year).
Section 27.7. Reinstatement. This Guaranty shall continue to be effective
or be reinstated, as the case may be, if at any time payment of any of the
amounts payable by any Lessee under this Lease is rescinded or must otherwise be
restored or returned by the Lessor, upon an event of bankruptcy, dissolution,
liquidation or reorganization of any Lessee or the Guarantor or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, any Lessee, the Guarantor, any other Guarantor
or any other Person, or any substantial part of their respective property, or
otherwise, all as though such payment had not been made.
Section 27.8. Pari Passu Indebtedness. The Guarantor (i) represents and
warrants that, as of the date hereof, the obligations of the Guarantor under
this Guaranty will rank pari passu with any existing unsecured indebtedness of
the Guarantor and (ii) covenants and agrees that from and after the date hereof
the obligations of the Guarantor under this Guaranty will rank pari passu with
any unsecured indebtedness of the Guarantor incurred after the date hereof.
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Section 27.9. Third-Party Beneficiaries. The Guarantor acknowledges that
the Trustee (on behalf of the holders of Group I Shared Series Notes) has
accepted the assignment of the Lessor's rights under this Lease as collateral
for such Notes in reliance on the Guaranty and that the Trustee (for the benefit
of the holders of such Shared Series Notes) shall be a third-party beneficiary
hereunder.
SECTION 28. ADDITIONAL LESSEES.
Section 28.1. Additional Affiliate and Subsidiary Lessees. Any direct or
indirect subsidiary of the Guarantor (each, a "Guarantor Subsidiary") shall have
the right to become a "Lessee" under and pursuant to the terms of this Agreement
by complying with the provisions of this Section 28.1. In the event a Guarantor
Subsidiary desires to become a "Lessee" under this Agreement, then the Guarantor
and such Guarantor Subsidiary shall execute (if appropriate) and deliver to the
Lessor and the Trustee:
(a) a Joinder in Lease Agreement in the form attached hereto as
Attachment D (each, an "Affiliate Joinder in Lease");
(b) the certificate of incorporation for such Guarantor Subsidiary,
duly certified by the Secretary of State of the jurisdiction of such
Guarantor Subsidiary's incorporation, together with a copy of the by-laws
of such Guarantor Subsidiary, duly certified by a Secretary or Assistant
Secretary of such Guarantor Subsidiary;
(c) copies of resolutions of the Board of Directors of such
Guarantor Subsidiary authorizing or ratifying the execution, delivery and
performance, respectively, of those documents and matters required of it
with respect to this Agreement, duly certified by the Secretary or
Assistant Secretary of such Guarantor Subsidiary;
(d) a certificate of the Secretary or Assistant Secretary of such
Guarantor Subsidiary certifying the names of the individual or individuals
authorized to sign the Affiliate Joinder in Lease and the other Related
Documents to be executed by it, together with samples of the true
signatures of each such individual;
(e) a good standing certificate for such Guarantor Subsidiary in the
jurisdiction of its incorporation and the jurisdiction of its principal
place of business;
(f) a written search report from a Person satisfactory to the Lessor
and the Trustee listing all effective financing statements that name such
Guarantor Subsidiary as debtor or assignor, and that are filed in the
jurisdictions in which filings were made pursuant to clause (g) below,
together with copies of such financing statements, and tax and judgment
lien search reports from a Person satisfactory to the Lessor and the
Trustee showing no evidence of liens filed against such Guarantor
Subsidiary that purport to affect any Vehicles leased hereunder or any
Collateral under the Indenture;
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(g) evidence of the filing of proper financing statements on Form
UCC-1 naming such Guarantor Subsidiary, as debtor, and the Lessor as
secured party covering the collateral described in Section 2(b) hereof;
(h) an Officers' Certificate and an opinion of counsel each stating
that such joinder by such Guarantor Subsidiary complies with this Section
29.1 and that all conditions precedent herein provided for relating to
such transaction have been complied with;
(i) a statement from each of the Rating Agencies that such Guarantor
Subsidiary becoming a "Lessee" under this Agreement will not cause a
failure to meet the Rating Agency Condition; and
(j) any additional documentation that the Lessor or the Trustee may
reasonably require to evidence the assumption by such Guarantor Subsidiary
of the obligations and liabilities set forth in this Agreement.
Upon satisfaction of the foregoing conditions and receipt by such Guarantor
Subsidiary of the applicable Affiliate Joinder in Lease executed by the Lessor,
such Guarantor Subsidiary shall for all purposes be deemed to be a "Lessee" for
purposes of this Agreement (including, without limitation, the Guaranty which is
a part of this Agreement) and shall be entitled to the benefits and subject to
the liabilities and obligations of a Lessee hereunder.
SECTION 29. BANKRUPTCY PETITION AGAINST LESSOR. Each Lessee and the
Guarantor hereby covenants and agrees that, prior to the date which is one year
and one day after the payment in full of all Series of Notes issued by the
Lessor, it will not institute against, or join any other Person in instituting
against, the Lessor any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States. In the event that a Lessee (or any
sublessee thereof) or the Guarantor takes action in violation of this Section
29, the Lessor agrees, for the benefit of the Noteholders, that it shall file an
answer with the bankruptcy court or otherwise properly contest the filing of
such a petition by such Lessee or the Guarantor against the Lessor or the
commencement of such action and raise the defense that such Lessee or the
Guarantor, as applicable, has agreed in writing not to take such action and
should be estopped and precluded therefrom and such other defenses, if any, as
its counsel advises that it may assert. The provisions of this Section 29 shall
survive the termination of this Agreement.
SECTION 30. SUBMISSION TO JURISDICTION. THE LESSOR, THE MASTER COLLATERAL
AGENT AND THE TRUSTEE MAY ENFORCE ANY CLAIM ARISING OUT OF THIS AGREEMENT IN ANY
STATE OR FEDERAL COURT HAVING SUBJECT MATTER JURISDICTION, INCLUDING, WITHOUT
LIMITATION, ANY STATE OR FEDERAL COURT LOCATED IN THE STATE OF NEW YORK IN THE
BOROUGH OF MANHATTAN IN NEW YORK CITY. FOR THE PURPOSE OF ANY
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ACTION OR PROCEEDING INSTITUTED WITH RESPECT TO ANY SUCH CLAIM, EACH LESSEE AND
THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS.
EACH LESSEE AND THE GUARANTOR HEREBY IRREVOCABLY DESIGNATES CT CORPORATION
SYSTEM, INC., 1633 BROADWAY, NEW YORK, NEW YORK 10019, TO RECEIVE FOR AND ON
BEHALF OF SUCH LESSEE AND GUARANTOR SERVICE OF PROCESS IN NEW YORK. EACH LESSEE
AND THE GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF
SAID COURTS BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO
SUCH LESSEE OR THE GUARANTOR, AS APPLICABLE, AND AGREES THAT SUCH SERVICE, TO
THE FULLEST EXTENT PERMITTED BY LAW, (I) SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT, ACTION OR PROCEEDING AND
(II) SHALL BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON AND PERSONAL
DELIVERY TO IT. Nothing herein contained shall affect the right of the Lessor to
serve process in any other manner permitted by law or preclude the Lessor, the
Master Collateral Agent or the Trustee from bringing an action or proceeding in
respect hereof in any other country, state or place having jurisdiction over
such action. EACH LESSEE AND THE GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT LOCATED IN THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN
IN NEW YORK CITY AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 31. GOVERNING LAW. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. All obligations of the
Lessees and the Guarantor and all rights of the Lessor, the Master Collateral
Agent or the Trustee expressed herein shall be in addition to and not in
limitation of those provided by applicable law or in any other written
instrument or agreement.
SECTION 32. JURY TRIAL. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS 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
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RELATED TRANSACTION, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 33. NOTICES. All notices, requests and other communications to any
party or signatory hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party or signatory,
addressed to it, at its address or facsimile number set forth on the signature
pages below, or at such other address or facsimile number as such party may
hereafter specify for such purpose by notice (in accordance with this Section
33) to the other parties and signatories hereto. In each case, a copy of all
notices, requests and other communications (other than any such notices,
requests and other communications in the ordinary course of business) that are
sent by any party or signatory hereunder shall be sent to the Trustee. Copies of
notices, requests and other communications delivered to the Trustee pursuant to
the foregoing sentence shall be sent to the following address:
Bankers Trust Company
4 Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency
Group/Structured Finance
Telephone: (212) 250-6533
Facsimile: (212) 250-6439
Each such notice, request or communication shall be effective when received at
the address specified below. Copies of all facsimile notices must be sent by
first class mail promptly after such transmission by facsimile.
SECTION 34. HEADINGS. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
SECTION 35. 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 36. EFFECTIVENESS. This Agreement shall become effective on the
Lease Commencement Date (subject to (i) the requirement that the representations
and warranties contained in Section 23 shall be true and correct in all respects
(except to the extent any such representation and warranty does not incorporate
a materiality limitation in its terms and the failure of such representation and
warranty to be true and correct in all respects does not materially adversely
affect the interest of the Lessor, the Trustee or the Secured Parties) and (ii)
the prior or concurrent delivery of each of the following documents to the
Lessor (in form and substance satisfactory to the Lessor):
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<PAGE> 46
(a) Certificate of Incorporation. The certificate of incorporation
of each Lessee and the Guarantor, duly certified by the Secretary of State
of the jurisdiction of its incorporation, together with a copy of its
by-laws, duly certified by the Secretary or an Assistant Secretary of such
Lessee or the Guarantor, as applicable;
(b) Resolutions. Copies of resolutions of the Board of Directors of
each Lessee and the Guarantor 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 or
Assistant Secretary of such Lessee or the Guarantor, as applicable;
(c) Consents, etc. Certified copies of all documents evidencing any
necessary corporate action, consents and governmental approvals (if any)
with respect to this Agreement;
(d) Incumbency and Signatures. A certificate of the Secretary or an
Assistant Secretary of each Lessee and the Guarantor certifying the names
of the individual or individuals authorized to sign this Agreement and the
other Related Documents to be executed by it (in such capacity or
otherwise), together with a sample of the true signature of each such
individual (the Lessor, the Master Collateral Agent and the Trustee may
conclusively rely on each such certificate until formally advised by a
like certificate of any changes therein);
(e) Opinions of Counsel. (i) The opinion of Debevoise & Plimpton,
counsel for the Lessees, the Servicers and the Master Servicer, addressed
to the Lessor, the Trustee, the Master Collateral Agent, the Enhancement
Providers, the Initial Purchaser and the Rating Agencies; (ii) the opinion
of Mayer, Brown & Platt, addressed to the Lessees, the Lessor, the
Trustee, the Master Collateral Agent, the Enhancement Providers, the
Initial Purchaser and the Rating Agencies; (iii) the opinion of each
Manufacturer addressed to the Lessees, the Lessor, the Trustee, the Master
Collateral Agent, the Enhancement Providers and the Rating Agencies; (iv)
the opinion of counsel to each Enhancement Provider, addressed to the
Lessees, the Lessor, the Trustee, the Master Collateral Agent, the Initial
Purchaser and the Rating Agencies; (v) the opinion of ____________,
counsel to the Trustee, addressed to the Lessees, the Lessor, the Initial
Purchaser, the Master Collateral Agent and each Enhancement Provider; and
(vi) the opinion of Hall, Estill, Hardwick, Gable, Golden & Nelson,
Oklahoma counsel to the Lessees, addressed to the Lessor, the Trustee, the
Enhancement Providers, the Initial Purchaser and the Rating Agencies, in
each case, satisfactory in form and substance to the addressees thereof;
(f) Good Standing Certificates. Certificates of good standing for
each Lessee and the Guarantor in the jurisdiction of its organization and
the jurisdiction of its principal place of business;
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<PAGE> 47
(g) Search Reports. A written search report dated as of [ ] from a
Person satisfactory to the Lessor and the Trustee listing all effective
financing statements that name a Lessee as debtor or assignor and that are
filed in the jurisdictions in which filings were made pursuant to
subsection (h) below, together with copies of such financing statements,
and tax and judgment lien search reports from a Person satisfactory to the
Lessor and the Trustee showing no evidence of such liens filed against
such Lessee;
(h) Evidence. Evidence of the filing of proper financing statements
on Form UCC-1, (i) naming each Lessee as debtor and the Master Collateral
Agent as secured party or other, similar instruments or documents, as may
be necessary or desirable under the UCC of all applicable jurisdictions to
perfect the Master Collateral Agent's interest in the Master Collateral
with respect to which the Trustee is designated as the Beneficiary and
(ii) naming each Lessee as debtor, the Lessor as secured party and the
Master Collateral Agent as assignee, as may be necessary or desirable
under the UCC of all applicable jurisdictions to perfect the precautionary
security interest of the Lessor hereunder and the assignment of the same
to the Master Collateral Agent;
(i) Master Collateral Agency Agreement. An executed copy of the
Master Collateral Agency Agreement;
(j) Lease. Original counterpart No. 1 of this Lease shall be
delivered to the Trustee with receipt acknowledged thereby;
(k) Vehicle Title Nominee Agreement. An executed copy of the Vehicle
Title Nominee Agreement;
(l) Assignment Agreement. An executed copy of the Assignment
Agreement of each Manufacturer;
(m) Certified Copy of Manufacturer Program. A copy of each
Manufacturer Program relating to Vehicles which will be leased hereunder
and an Officer's Certificate, dated the Closing Date, and duly executed by
an Authorized Officer of the Lessee, certifying that each such copy is
true, correct and complete as of the Closing Date;
(n) Assignment of Chrysler Lien; Evidence of Filing of UCC
Termination Statements.
(i) An executed copy of an assignment agreement, pursuant to
which Chrysler has assigned its interest in the Certificates of
Title with respect to the Existing Fleet to the Master Collateral
Agent; and
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<PAGE> 48
(ii) Evidence of the filing of proper financing statements
(form UCC-3) necessary to release all security interests and other
rights of Chrysler Financial Corporation in the Existing Fleet
previously granted by Dollar to Chrysler Financial Corporation;
(o) The Indenture, dated the Closing Date for the first Series of
Notes, duly executed by the Lessor and the Trustee, and all conditions to
the effectiveness thereof and the issuance of the Notes thereunder shall
have been satisfied or waived in all respects;
(p) A letter of credit, issued by ______________, with an initial
stated amount of $__________; and
(q) Other. Such other documents as the Trustee or the Lessor may
reasonably request.
[Signatures on following pages.]
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<PAGE> 49
IN WITNESS WHEREOF, the parties have executed this Agreement or caused it
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
LESSOR:
RENTAL CAR FINANCE CORP.
By:_______________________________
Name:
Title:
Address: 5330 East 31st Street
Tulsa, Oklahoma 74135
Attention:
Telephone: (918) ______________
Facsimile: (918) ______________
LESSEES AND SERVICERS:
THRIFTY RENT-A-CAR SYSTEM, INC.
By:_______________________________
Name:
Title:
Address: 5330 East 31st Street
Tulsa, Oklahoma 74135
Attention:
Telephone: (918) ______________
Facsimile: (918) ______________
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<PAGE> 50
DOLLAR RENT A CAR SYSTEMS, INC.
By:______________________________
Name:
Title:
Address: 5330 East 31st Street
Tulsa, Oklahoma 74135
Attention:
Telephone: (918) ______________
Facsimile: (918) ______________
GUARANTOR
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
By:_______________________________
Name:
Title:
Address: [5330 East 31st Street
Tulsa, Oklahoma 74135]
Attention:
Telephone: (918) __________
Facsimile: (918) __________
COUNTERPART NO. ___ OF TEN (10) SERIALLY NUMBERED MANUALLY EXECUTED
COUNTERPARTS. TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER
UNDER THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE
CREATED THROUGH THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN
COUNTERPART NO. 1.
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<PAGE> 51
[The Trustee does hereby acknowledge, by its signature below, receipt of
this Counterpart No. 1.
TRUSTEE:
[ ]
By:_______________________________
Name:
Title:
Address:
Acknowledged by:
MASTER COLLATERAL AGENT
Bankers Trust Company
By:_______________________________
Name:
Title:
Address: 4 Albany Street, 10th Floor
New York, New York 10006
Attention: Corporate Trust and Agency
Group/Structured Finance
Telephone: (212) 250-6553
Facsimile: (212) 250-6439
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<PAGE> 52
ANNEX A
ANNEX
to the
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
Dated as of December [ ], 1997
among
RENTAL CAR FINANCE CORP.
as Lessor,
THRIFTY RENT-A-CAR-SYSTEM, INC.,
as Lessee and Servicer,
DOLLAR RENT A CAR SYSTEMS, INC.,
as Lessee and Servicer,
and those subsidiaries and affiliates
of Dollar Thrifty Automotive Group, Inc.
from time to time
becoming Lessees and Servicers hereunder
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
as Guarantor and Master Servicer
<PAGE> 53
1. Scope of Annex. This Annex A shall apply only to the acquisition,
leasing and servicing of the Acquired Vehicles by RCFC pursuant to the Base
Lease, as supplemented by this Lease Annex (collectively, the "Operating
Lease").
2. General Agreement. With respect to the Acquired Vehicles, each Lessee
and the Lessor each intend that the Base Lease, as supplemented by this Lease
Annex, is an operating lease and that the relationship between the Lessor and
the Lessees pursuant thereto and hereto shall always be only that of lessor and
lessee, and each Lessee hereby declares, acknowledges and agrees that the Lessor
has title to and is the owner of the Acquired Vehicles. The Lessees shall not
acquire by virtue of the Lease any right, equity, title or interest in or to any
Acquired Vehicles, except the right to use the same under the terms of the
Operating Lease hereof. The parties agree that the Operating Lease is a "true
lease" for all legal, accounting, tax and other purposes and agree to treat the
Operating Lease, as it applies to the Acquired Vehicles, as an operating lease
for all purposes, including tax, accounting and otherwise. The parties will file
all federal, state and local tax returns and reports in a manner consistent with
the preceding sentence.
3. Operating Lease Commitment. (a) Upon the execution and delivery of this
Operating Lease, the Lessor shall, subject to the terms and conditions of the
Agreement, purchase from time to time on or after the Lease Commencement Date
and prior to the Lease Expiration Date, all Acquired Vehicles identified in
Vehicle Orders placed by a Lessee for a purchase price equal to the Initial
Acquisition Cost thereof, and simultaneously therewith, the Lessor shall under
the Operating Lease enter into operating leases with such Lessee with respect to
such Vehicles; provided, that the aggregate Net Book Value of Acquired Vehicles
leased hereunder on any date shall not exceed (a) the Maximum Lease Commitment,
less (b) the Base Amount as of such date with respect to the Financing Lease.
4. Lease Procedures. In connection with the Lease of any Acquired Vehicles
to be leased on or after the Lease Commencement Date, to evidence the
acquisition of such Acquired Vehicles by the Lessor, the applicable Lessee shall
deliver to the Lessor the following:
(a) a Vehicle Order (including a Vehicle Acquisition Schedule) with
respect to all Acquired Vehicles to be leased by such Lessee on the Lease
Commencement Date;
(b) UCC termination statements terminating, or UCC partial releases
releasing, any security interests and other liens (other than Permitted
Liens) in favor of any Person with respect to each Acquired Vehicle leased
on the Lease Commencement Date and identified in such Vehicle Order, and
any related Vehicle Disposition Programs;
(c) with respect to the initial lease of Acquired Vehicles by such
Lessee, a fully executed Assignment Agreement covering each Program
Vehicle leased under this Annex A on the Lease Commencement Date or to be
leased under this Annex A
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<PAGE> 54
on any date thereafter, the related Vehicle Disposition Programs, and
any other Master Collateral relating to such Vehicles.
Each Lessee hereby agrees that each such delivery of a Vehicle Order shall
be deemed hereunder to constitute a representation and warranty by the Lessee,
to and in favor of the Lessor and the Trustee, that all the conditions precedent
to the acquisition and leasing of the Vehicles identified in such Vehicle Order
have been satisfied as of the date of such Vehicle Order.
5. Maximum Vehicle Lease Term. The maximum Vehicle lease term of the
Operating Lease as it relates to each Acquired Vehicle leased hereunder shall be
from the Vehicle Lease Commencement Date to the date that is 24 months from the
date of the original new vehicle dealer invoice for such Acquired Vehicle. On
the occurrence of such date for a Vehicle not previously disposed of, the
applicable Lessee shall, (a) on behalf of the Lessor, promptly dispose of such
Vehicle in accordance with the terms hereof and in accordance with any
instructions of the Lessor for such disposition, (b) in each case, provide that
Disposition Proceeds be paid directly to the Master Collateral Account for the
benefit of the Trustee and (c) pay to the Master Collateral Agent or the
Trustee, in accordance with this Operating Lease, any other amounts unpaid and
owing from such Lessee under the Lease in respect of such Vehicle.
6. Lessee's Rights to Purchase Vehicles. Each Lessee will have the option,
exercisable with respect to any Acquired Vehicle during the Vehicle Term with
respect to such Acquired Vehicle, to purchase any Vehicles leased by it under
this Agreement at the Vehicle Purchase Price, in which event such Lessee will
pay the Vehicle Purchase Price to the Master Collateral Agent on or before the
Due Date next succeeding such purchase by the Lessee plus all accrued and unpaid
Monthly Base Rent and Monthly Variable Rent with respect to such Vehicle through
the date of such purchase. The Lessor shall cause title to any such Vehicle to
be transferred to the applicable Lessee, and the Servicer shall cause the Master
Collateral Agent to cause its lien to be removed from the certificate of title
for such Vehicle, concurrently with or promptly after the Vehicle Purchase Price
for such Vehicle (and any unpaid Monthly Base Rent and unpaid Monthly Variable
Rent) is paid by such Lessee to the Master Collateral Agent.
7. Vehicle Disposition. The Lessor and each Lessee agree that, with
respect to Acquired Vehicles, the applicable Lessee shall use its commercially
reasonable efforts to deliver each related Program Vehicle for sale in
accordance with the applicable Auction Procedures or to return such related
Program Vehicle to the related Manufacturer (a) not prior to the end of the
Minimum Term for such Vehicle, and (b) not later than the end of the Maximum
Term for such Vehicle; provided, however, if for any reason, such Lessee fails
to deliver such a Program Vehicle to the applicable Manufacturer for repurchase
by the Manufacturer or in accordance with the applicable Auction Procedures, in
each case in accordance with the applicable Vehicle Disposition Program during
the time period between the expiration of the Minimum Term and the expiration of
the Maximum Term, such Lessee
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<PAGE> 55
shall be obligated to sell or otherwise dispose of such Program Vehicle and pay
a Late Return Payment with respect thereto, in each case as provided in Section
13 of the Base Lease. Each Lessee shall, with respect to Acquired Vehicles
leased by it under this Operating Lease, pay the equivalent of the Rent for the
Minimum Term for Program Vehicles returned before the Minimum Term, regardless
of actual usage, unless such a Program Vehicle is a Casualty, which will be
handled in accordance with Section 7 of the Base Lease. All Disposition
Proceeds, Repurchase Payments and Guaranteed Payments due from the disposition
of Program Vehicles pursuant to this Section shall be due and payable to the
Lessor. The Lessor and each Lessee agree, with respect to Acquired Vehicles,
that such Lessee shall use its commercially reasonable efforts to dispose of
each Non-Program Vehicle leased to it under this Operating Lease (a) in a manner
most likely to maximize proceeds from such disposition and consistent with
industry practice and (b) within twenty-four (24) months after the date of the
original new vehicle dealer invoice for such Vehicle. All Disposition Proceeds
due from the disposition of Non-Program Vehicles pursuant to this Section shall
be due and payable to the Lessor.
8. Lessor's Right to Cause Vehicles to be Sold. Notwithstanding anything
to the contrary contained in the Agreement, the Lessor shall have the right, at
any time after the date thirty (30) days prior to the expiration of the Maximum
Term for any Program Vehicle leased under this Annex A, to require that the
Lessee in respect of such Program Vehicle deliver such Program Vehicle to the
Manufacturer for repurchase or, as applicable, to the designated auction site,
or exercise commercially reasonable efforts to arrange for the sale of such
Program Vehicle to a third party for a price greater than the Net Book Value
thereof, in which event the Lessee shall, prior to the expiration of such
Maximum Term, deliver such Vehicle to its Manufacturer or the designated auction
site or arrange for the sale of such Program Vehicle to a third party for a
price greater than the Net Book Value (or purchase the Program Vehicle itself
from the Lessor for the Vehicle Purchase Price). If a sale of the Program
Vehicle is arranged by a Lessee prior to the expiration of such Maximum Term,
then such Lessee shall deliver the Program Vehicle to the purchaser thereof, the
Lien of the Master Collateral Agent on the Certificate of Title of such Program
Vehicle shall be released, and such Lessee shall cause to be delivered to the
Lessor the funds paid for such Program Vehicle by the purchaser. If a Lessee is
unable to arrange for a sale of the Program Vehicle prior to the expiration of
such Maximum Term, then such Lessee shall cease attempting to arrange for such a
sale and shall return such Program Vehicle to the applicable Manufacturer or
tender such Program Vehicle in accordance with applicable Auction Procedures or
purchase such Vehicle as herein provided. In no event may any Program Vehicle be
sold pursuant to this paragraph 8 (other than pursuant to a Vehicle Disposition
Program) unless the funds to be paid to the Lessor arising out of such sale
exceed the Net Book Value of such Vehicle less reasonably predictable Excess
Mileage charges, Excess Damage Charges and other similar charges imposed by the
Manufacturer.
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<PAGE> 56
9. Calculation of Rent. Rent shall be due and payable on a monthly basis
as set forth in this paragraph 9:
"Monthly Base Rent", with respect to each Due Date and each Acquired
Vehicle leased under the Lease on any day during the Related Month, shall
be the sum of all Depreciation Charges that have accrued with respect to
such Vehicle during the Related Month.
"Monthly Variable Rent", with respect to each Due Date and each
Acquired Vehicle leased under the Lease on any day during the Related
Month, shall equal the sum, without double counting, of (a) the product of
(i) an amount equal to the Net Book Value of such Acquired Vehicle on the
first day contained within both the Related Month and the Vehicle Term
with respect to such Vehicle multiplied by the VFR for the Interest Period
ending on the next succeeding Payment Date and (ii) the quotient obtained
by dividing (A) the number of days contained within both the Related Month
and the Vehicle Term with respect to such Acquired Vehicle by (B) the
total number of days in the Related Month plus (b) the product of (i) an
amount equal to all Carrying Charges for the Related Month, and (ii) the
quotient obtained by dividing the Net Book Value of such Acquired Vehicle
as of the first day of the Related Month by the Net Book Value of all
Vehicles leased under the Lease as of the first day of the Related Month.
"Rent" means Monthly Base Rent plus Monthly Variable Rent.
10. Payment of Rent and Other Payments.
(a) Monthly Base Rent. On each Due Date, each Lessee shall pay to
the Lessor the Monthly Base Rents that have accrued during the Related
Month with respect to all Vehicles that were leased by such Lessee under
the Operating Lease on any day during the Related Month;
(b) Monthly Variable Rent. On each Due Date, each Lessee shall pay
to the Lessor the Monthly Variable Rents that have accrued during the
Related Month with respect to all Vehicles that were leased by such Lessee
under the Operating Lease on any day during the Related Month;
(c) Termination Payments, Casualty Payments and Late Return
Payments. On each Due Date, each Lessee shall pay to the Lessor all
Termination Payments, Casualty Payments and Late Return Payments with
respect to Vehicles leased by such Lessee under the Operating Lease as
provided in Section 5.4 of the Base Lease; and
(d) Certain Other Payments. Each Lessee shall cause all Disposition
Proceeds, Repurchase Payments, Guaranteed Payments and Incentive Payments
payable in respect of Acquired Vehicles leased by it under the Operating
Lease, to be paid
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<PAGE> 57
directly to the Master Collateral Agent for the benefit of the Trustee.
The Servicer and the Lessees each agree that in the event that the
Servicer or a Lessee shall receive directly any such payment, including
cash, securities, obligations or other property, the Servicer or such
Lessee, as the case may be, shall accept the same as the Master
Collateral Agent's agent and shall hold the same in trust on behalf of
and for the benefit of the Master Collateral Agent, and shall deposit the
same, within two (2) Business Days after receipt thereof, into the Master
Collateral Account in the same form received, with the endorsement of the
Servicer or such Lessee, as the case may be, when necessary or
appropriate.
11. Net Lease. THE OPERATING LEASE SHALL BE A NET LEASE, AND EACH LESSEE'S
OBLIGATION TO PAY ALL RENT AND OTHER SUMS HEREUNDER SHALL BE ABSOLUTE AND
UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY ABATEMENT OR REDUCTION FOR ANY
REASON WHATSOEVER. The obligations and liabilities of the Lessees hereunder
shall in no way be released, discharged or otherwise affected (except as may be
expressly provided herein including, without limitation, the right of a Lessee
to reject Vehicles pursuant to Section 2.2 of the Base Lease) for any reason,
including without limitation: (i) any defect in the condition, merchantability,
quality or fitness for use of the Vehicles or any part thereof; (ii) any damage
to, removal, abandonment, salvage, loss, scrapping or destruction of or any
requisition or taking of the Vehicles or any part thereof; (iii) any
restriction, prevention or curtailment of or interference with any use of the
Vehicles or any part thereof; (iv) any defect in or any Lien on title to the
Vehicles or any part thereof; (v) any change, waiver, extension, indulgence or
other action or omission in respect of any obligation or liability of a Lessee
or the Lessor; (vi) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to such
Lessee, the Lessor or any other Person, or any action taken with respect to this
Operating Lease by any trustee or receiver of any Person mentioned above, or by
any court; (vii) any claim that such Lessee has or might have against any
Person, including without limitation the Lessor; (viii) any failure on the part
of the Lessor to perform or comply with any of the terms hereof or of any other
agreement; (ix) any invalidity or unenforceability or disaffirmance of the
Operating Lease or any provision hereof or any of the other Related Documents or
any provision of any thereof, in each case whether against or by such Lessee or
otherwise; (x) any insurance premiums payable by such Lessee with respect to the
Vehicles; or (xi) any other occurrence whatsoever, whether similar or dissimilar
to the foregoing, whether or not such Lessee shall have notice or knowledge of
any of the foregoing and whether or not foreseen or foreseeable. The Operating
Lease shall be noncancelable by any Lessee and, except as expressly provided
herein, each Lessee, to the extent permitted by law, waives all rights now or
hereafter conferred by statute or otherwise to quit, terminate or surrender the
Operating Lease, or to any diminution or reduction of Rent payable by the Lessee
hereunder. All payments by a Lessee made hereunder shall be final (except to the
extent of adjustments provided for herein), absent manifest error and, except as
otherwise provided herein, no Lessee shall seek to recover any such payment or
any part thereof for any reason whatsoever, absent manifest error. If for any
reason whatsoever the Operating Lease shall be terminated in whole or in part by
operation of law or otherwise except as expressly
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<PAGE> 58
provided herein, each Lessee shall nonetheless pay an amount equal to each Rent
payment at the time and in the manner that such payment would have become due
and payable under the terms of the Operating Lease as if it had not been
terminated in whole or in part. All covenants and agreements of the Lessees
herein shall be performed at its cost, expense and risk unless expressly
otherwise stated.
12. Liens. Except for Permitted Liens, each Lessee shall keep all Vehicles
leased by it free of all Liens arising during the Term. Upon the Vehicle Lease
Expiration Date for each Vehicle leased hereunder, the Lessor may, in its
discretion, remove any such Lien and any sum of money that may be paid by the
Lessor in release or discharge thereof, including reasonable attorneys' fees and
costs, will be paid by the applicable Lessee upon demand by the Lessor. The
Lessor may grant security interests in the Vehicles without consent of the
applicable Lessee; provided, however, that if any such Liens would interfere
with the rights of such Lessee under the Operating Lease or any sublessee of the
Lessee, the Lessor must obtain the prior written consent of the Lessee. Each
Lessee acknowledges that the granting of Liens and the taking of other actions
pursuant to the Indenture and the Related Documents does not interfere with the
rights of such Lessee under the Operating Lease.
13. Non-Disturbance. So long as a Lessee satisfies its obligations
hereunder, its quiet enjoyment, possession and use of the Vehicles will not be
disturbed during the Term subject, however, to paragraph 8 of this Annex A and
except that the Lessor, the Master Collateral Agent and the Trustee each retains
the right, but not the duty, to inspect the Vehicles without disturbing the
ordinary conduct of such Lessee's business. Upon the request of the Lessor, the
Master Collateral Agent or the Trustee, from time to time, each Lessee will make
reasonable efforts to confirm to the Lessor, the Master Collateral Agent and the
Trustee the location, mileage and condition of each Vehicle and to make
available for the Lessor's, the Master Collateral Agent's or the Trustee's
inspection within a reasonable time period, not to exceed forty-five (45) days,
the Vehicles leased by such Lessee at the location where the Vehicles are
normally domiciled. Further, each Lessee (and each related Franchisee) will,
during normal business hours and with a notice of three (3) Business Days, make
its records pertaining to the Vehicles available to the Lessor, the Master
Collateral Agent or the Trustee for inspection at the location where such
Lessee's (and each such related Franchisee's) records are normally domiciled.
14. Certain Risks of Loss Borne by Lessees. Upon delivery of each Vehicle
to a Lessee, as between the Lessor and such Lessee, such Lessee assumes and
bears the risk of loss, damage, theft, taking, destruction, attachment, seizure,
confiscation or requisition and all other risks and liabilities with respect to
such Vehicle, including personal injury or death and property damage, arising
with respect to any Vehicle due to the manufacturer, purchase, acceptance,
rejection, delivery, leasing, subleasing, possession, use, inspection,
registration, operation, condition, maintenance, repair or storage of such
Vehicle, howsoever arising.
15. Title. This is an agreement to lease only, and title to the Acquired
Vehicles will at all times remain in the Lessor's name. The Lessees will not
have any rights or interest in
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<PAGE> 59
such Vehicles whatsoever other than the rights of possession and use and the
right to sublease such Vehicles as provided by this Agreement. In addition, each
Lessee, by its execution hereof, acknowledges and agrees that (i) the Lessor is
the sole owner and holder of all right, title and interest in and to the Vehicle
Disposition Programs as they relate to the Vehicles leased hereunder and (ii)
such Lessee has no right, title or interest in any Vehicle Disposition Program
as it relates to any Vehicle leased hereunder. To confirm the foregoing, each
Lessee, by its execution of the Base Lease of which this Annex A is a part,
hereby assigns and transfers to the Lessor any rights that such Lessee may have
in respect of any Vehicle Disposition Programs as they relate to the Vehicles
leased hereunder.
* * *
-8-
<PAGE> 60
ANNEX B
ANNEX
to the
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
Dated as of December [ ], 1997
between
RENTAL CAR FINANCE CORP.
as Lessor,
THRIFTY RENT-A-CAR-SYSTEM, INC.,
as Lessee and Servicer,
DOLLAR RENT A CAR SYSTEMS, INC.,
as Lessee and Servicer,
and those subsidiaries and affiliates
of Dollar Thrifty Automotive Group, Inc.
from time to time
becoming Lessees and Servicers hereunder
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
as Guarantor and Master Servicer
<PAGE> 61
1. Scope of Annex. This Annex B shall apply only to the acquisition or
financing, leasing and servicing of the Financed Vehicles by RCFC pursuant to
the Base Lease, as supplemented by this Lease Annex (collectively, the
"Financing Lease").
2. General Agreement. With respect to the Financed Vehicles, each Lessee
and the Lessor each intend that the Base Lease, as supplemented by this Lease
Annex, constitute a financing arrangement and the Lessor hereby declares,
acknowledges and agrees that the ownership of the Financed Vehicles rests solely
with such Lessee subject to the security interest granted hereunder to the
Lessor.
3. Financing Lease Commitment. Subject to the terms and conditions of the
Financing Lease, upon execution and delivery of the Financing Lease, the Lessor
shall (i) on the Lease Commencement Date purchase from Dollar the Existing Fleet
for a purchase price equal to the aggregate Net Book Value thereof, and (ii)
from time to time on or after the Lease Commencement Date and prior to the Lease
Expiration Date purchase all other Financed Vehicles identified in Vehicle
Orders placed by the Lessee for a purchase price equal to the Initial
Acquisition Cost thereof, and in each case simultaneously therewith enter into
this Financing Lease with such Lessee with respect to the Existing Fleet and
other Financed Vehicles, as the case may be; provided, that the aggregate
outstanding Base Amount of the Financing Lease shall not on any date exceed (a)
the Maximum Lease Commitment, less (b) the sum of (x) the sum of the Net Book
Values of Acquired Vehicles leased under the Operating Lease on such date, each
such Net Book Value calculated as of the first day contained within both the
calendar month in which such date of determination occurs and the Vehicle Term
for the related Acquired Vehicle, plus (y) accrued and unpaid Monthly Base Rent
under the Operating Lease as of such date.
4. Lease Procedures.
(a) Initial Lease. In connection with the Lease of the Existing
Fleet and any other Financed Vehicles to be leased on the Lease
Commencement Date, to evidence the refinancing of the Vehicles in the
Existing Fleet and the acquisition and financing of such other Financed
Vehicles by such Lessee on the Lease Commencement Date and the conveyance
on such date of a security interest in such Financed Vehicles to the
Master Collateral Agent, the Lessees shall deliver to the Lessor on or
prior to the Lease Commencement Date in respect of the initial Vehicle
Order of each Additional Lessee the following:
(i) a schedule concerning the Existing Fleet as specified in
Section 2.1 of the Base Lease, in the case of all Vehicles in the
Existing Fleet, or a Vehicle Order (including a Vehicle Acquisition
Schedule) with respect to all other Financed Vehicles to be leased
by such Lessee on the Lease Commencement Date or date of the initial
Vehicle Order of an Additional Lessee, as applicable;
-2-
<PAGE> 62
(ii) a report of the results of a search of the appropriate
records of the county and state in which the Existing Fleet are
located and the county and state in which such Lessee's principal
office is located, which shall show no liens or other security
interests (other than Permitted Liens and the lien of Chrysler
Financial Corporation or such other party as has delivered a Payoff
Letter in the Existing Fleet) with respect to such Vehicles or, in
the event that such search reveals any such non-permitted Lien or
security interest, there shall be delivered to the Trustee a
termination of such Lien or security interest as provided below;
(iii) confirmation from any lender holding a security interest
in any Vehicle in the Existing Fleet stating unconditionally (A)
that, if any sums are to be paid to such lender in connection with
the lease of the Existing Fleet, such lender has been paid the full
amount due to it in connection with such refinancing and (B) that
any lien or security interest of such lender in such Vehicle has
been released;
(iv) UCC termination statements terminating, or UCC partial
releases releasing, any security interests and other liens (other
than Permitted Liens and the lien of Chrysler Financial Corporation
in the Existing Fleet) in favor of any Person with respect to each
Vehicle in the Existing Fleet identified in such schedule and any
related Vehicle Disposition Programs;
(v) fully executed Assignment Agreements from such Lessee
covering, as applicable, each Vehicle in the Existing Fleet and each
other Financed Vehicle leased by such Lessee on the Lease
Commencement Date or leased on any date thereafter under the Lease,
the related Vehicle Disposition Programs, and any other Master
Collateral relating to such Vehicles; and
(vi) an Officer's Certificate for such Lessee stating that all
the conditions precedent under the Lease to the leasing by such
Lessee of such Vehicles on the Lease Commencement Date have been
satisfied.
(b) Subsequent Leases. In connection with each Lease of a Financed
Vehicle after the Lease Commencement Date, to evidence the acquisition or
financing of such Financed Vehicle by the Lessor and the conveyance of a
security interest in such Financed Vehicles to the Master Collateral
Agent, each Lessee shall deliver to the Lessor a Vehicle Order (including
a Vehicle Acquisition Schedule) with respect to all Financed Vehicles to
be leased by such Lessee on the date specified therein. Each Lessee hereby
agrees that each such delivery of a Vehicle Order shall be deemed
hereunder to constitute a representation and warranty by such Lessee, to
and in favor of the Lessor and the Trustee, that all the conditions
precedent to the acquisition or financing and leasing of the Vehicles
identified in such Vehicle Order have been satisfied as of the date of
such Vehicle Order.
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<PAGE> 63
5. Maximum Vehicle Lease Term. The maximum Vehicle lease term of the
Financing Lease as it relates to each Financed Vehicle leased hereunder shall be
from the Vehicle Lease Commencement Date to the date that is 60 months from the
Vehicle Lease Commencement Date. On the occurrence of such date, the applicable
Lessee shall pay to the Master Collateral Agent or the Trustee, in accordance
with this Financing Lease, any amounts unpaid and owing under the Lease in
respect of such Vehicle.
6. Calculation of Rent and Monthly Supplemental Payment. Rent and the
Monthly Supplemental Payment shall be due and payable on a monthly basis as set
forth in this paragraph 6:
"Monthly Base Rent", with respect to each Due Date and each Financed
Vehicle leased under the Lease on any day during the Related Month, shall
be the sum of all Depreciation Charges that have accrued with respect to
such Vehicle during the Related Month.
"Monthly Finance Rent", with respect to each Due Date and each
Financed Vehicle leased under the Lease on any day during the Related
Month, shall equal the sum, without double counting, of (a) the product of
(i) an amount equal to the Net Book Value of such Financed Vehicle on the
first day contained within both the Related Month and the Vehicle Term
with respect to such Vehicle multiplied by the VFR for the Interest Period
ending on the next succeeding Payment date and (ii) the quotient obtained
by dividing (A) the number of days contained within both the Related Month
and the Vehicle Term with respect to such Financed Vehicle by (B) the
total number of days in the Related Month, plus (b) the product of (i) an
amount equal to all Carrying Charges for the Related Month, and (ii) the
quotient obtained by dividing the Net Book Value of such Financed Vehicle
as of the first day of the Related Month by the Net Book Value of all
Vehicles leased under the Lease as of the first day of the Related Month.
"Monthly Supplemental Payment" with respect to each Due Date and
each Financed Vehicle shall be an amount equal to (a) the sum of, as
applicable, (i) the aggregate amount of any Guaranteed Payment, Repurchase
Payment, Disposition Proceeds and Incentive Payments received by the
Lessor, the Master Collateral Agent or the Trustee (including by deposit
into the Collection Account or the Master Collateral Account) during the
Related Month with respect to such Vehicle, (ii) the amount of any unpaid
Guaranteed Payment or unpaid Repurchase Payment with respect to such
Vehicle becoming a Delinquent Guaranteed Payment or Delinquent Repurchase
Payment, as the case may be, during the Related Month, (iii) the amount of
any Disposition Proceeds with respect to such Vehicle becoming Delinquent
Disposition Proceeds during the Related Month, (iv) the amount of any
unpaid Incentive Payments with respect to such Vehicle becoming Delinquent
Incentive Payments during the Related Month, (v) if such Vehicle becomes a
Casualty or ceases to be an Eligible Vehicle (other than as a result of
the sale or other disposition
-4-
<PAGE> 64
thereof), in each case during the Related Month, the Net Book Value of
such Vehicle calculated as of the earlier of the first day of such Related
Month and the date such vehicle is disposed of or becomes a Casualty, as
applicable, and (vi) if such Vehicle was returned to its Manufacturer for
repurchase or sold to any Person or otherwise disposed of, in each case
during the Related Month, the excess, if any, of (A) the Net Book Value of
such Vehicle, calculated as of the applicable Vehicle Lease Expiration
Date, over (B) the sum of all amounts (other than Incentive Payments)
payable in respect of such Vehicle pursuant to clause (i) above, less (b)
the excess, if any, of (i) the aggregate amount of Disposition Proceeds,
Guaranteed Payments or Repurchase Payments, as applicable, from the sale
or other disposition of such Vehicle received by the Lessor, the Master
Collateral Agent or the Trustee (including by deposit into the Collection
Account or the Master Collateral Account) during such Related Month over
(ii) the Net Book Value of such Vehicle, calculated as of the applicable
Vehicle Lease Expiration Date.
"Rent" means Monthly Base Rent plus Monthly Finance Rent.
7. Payment of Rent and Other Payments. (a) On each Due Date:
(i) Monthly Base Rent. Each Lessee shall pay to the Lessor the
Monthly Base Rents that have accrued during the Related Month with respect
to all Vehicles that were leased by such Lessee under the Finance Lease on
any day during the Related Month; provided, however, that in the event
that delinquent payments of Guaranteed Payments, Repurchase Payments,
Disposition Proceeds and/or Incentive Payments are received by the Lessor,
the Master Collateral Agent or the Trustee (including by deposit into the
Collection Account or the Master Collateral Account) during the Related
Month, such payments may be netted against the Monthly Base Rents to be
paid on such Due Date to the extent (but only to the extent) that Monthly
Base Rent has already been received by any of such Persons in respect of
such delinquent payment obligations pursuant to any or all of clauses
(a)(ii), (iii) and (iv) of the definition of Monthly Supplemental Payment
set forth in this Annex B;
(ii) Monthly Finance Rent. Each Lessee shall pay to the Lessor the
Monthly Finance Rents that have accrued during the Related Month with
respect to all Vehicles that were leased by such Lessee under the Finance
Lease on any day during the Related Month.
(iii) Monthly Supplemental Payments. Each Lessee shall pay to the
Lessor the Monthly Supplemental Payments that have accrued during the
Related Month with respect to all Vehicles that were leased by such Lessee
under the Finance Lease on any day during the Related Month; provided,
however, that in the event that the Monthly Supplemental Payment accrued
during a Related Month is a negative dollar amount, such amount may be
netted against other payments to be paid on such Due Date pursuant to this
paragraph 7.
-5-
<PAGE> 65
(b) On the expiration of the term of the Lease with respect to a Financed
Vehicle, any remaining Base Amount, plus all other amounts payable by each
Lessee under the Financing Lease with respect to such Vehicle shall be
immediately due and payable.
(c) Each Lessee may from time to time prepay the Base Amount of the
Financing Lease with respect to a Financed Vehicle, in whole or in part, on any
date, provided that such Lessee shall give the Lessor and the Trustee not less
than one (1) Business Day's prior notice of any prepayment, specifying the date
and amount of such prepayment, and the Financed Vehicles to which such
prepayment relates.
8. Risk of Loss Borne by Lessees. Upon delivery of each Vehicle to a
Lessee, as between the Lessor and such Lessee, such Lessee assumes and bears the
risk of loss, damage, theft, taking, destruction, attachment, seizure,
confiscation or requisition with respect to such Vehicle, however caused or
occasioned, and all other risks and liabilities, including personal injury or
death and property damage, arising with respect to any Vehicle or the
manufacture, purchase, acceptance, rejection, ownership, delivery, leasing,
subleasing, possession, use, inspection, registration, operation, condition,
maintenance, repair, storage, sale, return or other disposition of such Vehicle,
howsoever arising.
9. Mandatory Repurchase of Texas Vehicles. Prior to the Vehicle Lease
Expiration Date with respect to each Texas Vehicle leased by a Lessee under the
Finance Lease (other than a Vehicle Lease Expiration Date arising in connection
with the purchase of such Texas Vehicle pursuant to this paragraph 9) and, in
the case of each such Texas Vehicle which is a Program Vehicle, prior to the
expiration of the Maximum Term applicable thereto (unless such Vehicle has been
redesignated as a Non-Program Vehicle in accordance with Section 14 of the Base
Lease), such Lessee shall purchase such Texas Vehicle (including any such
Vehicle which has become a Casualty) at a purchase price equal to the Net Book
Value of such Vehicle calculated as of the date of purchase (or, in the case of
a Casualty, at a purchase price equal to the Monthly Supplemental Payments
accruing in respect of such Casualty during the Related Month in which such
Vehicle became a Casualty), which shall be payable to the Master Collateral
Agent (together with all accrued and unpaid Rent and other payments due and
payable on such Due Date with respect to such Texas Vehicle through the date of
such purchase) on or prior to the Due Date next succeeding such purchase by such
Lessee. The Lessor shall cause title to each Texas Vehicle to be transferred to
the applicable Lessee, and the Servicer shall cause the Master Collateral Agent
to cause its lien to be removed from the Certificate of Title for such Vehicle,
concurrently with or promptly after such purchase price for such Texas Vehicle
(and any such unpaid Rent and payments) is paid by such Lessee to the Master
Collateral Agent. Notwithstanding anything to the contrary in this Agreement, no
Texas Vehicle may be sold or otherwise disposed of (other than pursuant to
Section 17.3 of the Base Lease), including at Auction or by return to its
Manufacturer pursuant to a Vehicle Disposition Program, prior to its purchase by
a Lessee pursuant to and in accordance with this paragraph 9.
-6-
<PAGE> 66
Schedule 1
Litigation Claims
<PAGE> 67
Schedule 2
Pension Plans
<PAGE> 68
Schedule 3
Business Locations
<TABLE>
<CAPTION>
==============================================================================================================
States in which it
Chief Executive Office State of Principal Conducts Business or
Legal Name and Trade Name Business Location Place of Business Maintains Records
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Thrifty Rent-A-Car System, Inc.
Trade Name: Thrifty Rent-A-Car
System, Inc.
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Dollar Rent A Car Systems, Inc.
Trade Name: Dollar Rent A Car
Systems, Inc.
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Dollar Thrifty Automotive
Group, Inc.
Trade Names: Dollar Thrifty
Automotive Group, Inc.; [DTAG]
==============================================================================================================
</TABLE>
<PAGE> 69
Schedule 4
Liens (1)
- ----------
(1) Verify old Citicorp lien.
<PAGE> 70
ATTACHMENT A-1
Information on Existing Fleet
<PAGE> 71
ATTACHMENT A-2
Vehicle Acquisition Schedule
1 Vehicle Group Number (Vehicle Model)
2 Vehicle Identification Number (last eight digits) (VIN)
3 Vehicle Lease Commencement Date
4 Initial Acquisition Cost
5 Monthly Base Rent
6 Garaging State
<PAGE> 72
ATTACHMENT B*
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that Rental Car Finance Corp. does
hereby make, constitute and appoint its true and lawful Attorney(s)-in-Fact for
it and in its name, stead and behalf, to execute any and all documents
pertaining to the titling of motor vehicles in the name of Rental Car Finance
Corp., the noting of the lien of Bankers Trust Company, as Master Collateral
Agent, as the first lienholder on certificates of title, the licensing and
registration of motor vehicles and the transfer of title of motor vehicles. This
power is limited to the foregoing and specifically does not authorize the
creation of any other liens or encumbrances on any of said motor vehicles, other
than Permitted Liens (as defined in Schedule 1 to the Base Indenture, dated as
of December 13, 1995 (as such agreement may be amended, supplemented or modified
from time to time in accordance with its terms)).
The powers and authority granted hereunder shall, unless sooner
terminated, revoked or extended, cease five years from the date of execution as
set forth below.
IN WITNESS WHEREOF, Rental Car Finance Corp. has caused this
instrument to be executed on its behalf by its _____________ this ____ day of
_______, 19__.
RENTAL CAR FINANCE CORP.
By: _______________________________
Name:
Title:
- ----------
* To be updated.
<PAGE> 73
State of ___________________ )
: s.s.:
County of _________________ )
Subscribed and sworn before me, a notary public, in and for said county
and state, this ____ day of ____________, 19__.
________________________
Notary Public
My Commission Expires: __________
-2-
<PAGE> 74
ATTACHMENT C
FORM OF CERTIFICATION OF TRADE OR BUSINESS USE
The undersigned, ___________ of Rental Car Finance Corp., an Oklahoma
corporation, hereby warrants and certifies, under penalties of perjury, that (1)
each Lessee intends to use the Acquired Vehicles in a trade or business of each
Lessee, and (2) each Lessee has been advised that it will not be treated as the
owner of the Acquired Vehicles for federal income tax purposes.
Defined terms otherwise not defined herein shall have the meanings
assigned to such terms in Schedule 1 to the Base Indenture, dated as of December
13, 1995 (as such agreement may be amended, supplemented or modified from time
to time in accordance with its terms).
IN WITNESS WHEREOF, the undersigned has caused this certificate to be
executed this ____ day of _________, 199__.
RENTAL CAR FINANCE CORP.
By: __________________________
Name:
Title:
<PAGE> 75
ATTACHMENT D
FORM OF AFFILIATE JOINDER IN LEASE
THIS AFFILIATE JOINDER IN LEASE AGREEMENT (this "Joinder") is executed as
of _______________ ___, 19___, by _______________, a
____________________________ ("Joining Party"), and delivered to Rental Car
Finance Corp., an Oklahoma corporation ("RCFC"), as lessor pursuant to the
Master Motor Vehicle Lease and Servicing Agreement dated as of December [ ],
1997 (as amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof, the "Group I Lease"), among RCFC, as Lessor,
Thrifty Rent-A-Car-System, Inc., as Lessee and Servicer, Dollar Rent A Car
Systems, Inc., as Lessee and Servicer, and those subsidiaries and affiliates of
Dollar Thrifty Automotive Group, Inc.("DTAG") from time to time becoming Lessees
thereunder (individually, a "Lessee" and, collectively, the "Lessees"), and
DTAG, as guarantor. Capitalized terms used herein but not defined herein shall
have the meanings provided for in the Group I Lease.
R E C I T A L S:
WHEREAS, the Joining Party is a direct or indirect Subsidiary or other
Affiliate of DTAG; and
WHEREAS, the Joining Party desires to become a "Lessee" under and pursuant
to the Group I Lease.
NOW, THEREFORE, the Joining Party agrees as follows:
A G R E E M E N T:
1. The Joining Party hereby represents and warrants to and in favor of
RCFC and the Trustee that (i) the Joining Party is a direct or indirect
Subsidiary of DTAG, (ii) all of the conditions required to be satisfied pursuant
to Section 28 of the Group I Lease in respect of the Joining Party becoming a
Lessee thereunder have been satisfied, and (iii) all of the representations and
warranties contained in Section 23 of the Group I Lease with respect to the
Lessees are true and correct as applied to the Joining Party as of the date
hereof.
2. The Joining Party hereby agrees to assume all of the obligations of a
"Lessee" under the Group I Lease and agrees to be bound by all of the terms,
covenants and conditions therein.
<PAGE> 76
3. By its execution and delivery of this Joinder, the Joining Party hereby
becomes a Lessee for all purposes under the Group I Lease. By its execution and
delivery of this Joinder, RCFC acknowledges that the Joining Party is a Lessee
for all purposes under the Group I Lease.
IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be duly
executed as of the day and year first above written.
[Name of Joining Party]
By: ________________________________
Name:
Title:
Accepted and Acknowledged by:
RENTAL CAR FINANCE CORP.
By: __________________________________________
Name:
Title:
-2-
<PAGE> 77
TABLE OF CONTENTS
Page
----
SECTION 1. CERTAIN DEFINITIONS..............................................1
Section 1.1. Certain Definitions......................................1
Section 1.2. Accounting and Financial Determinations..................2
Section 1.3. Cross References; Headings...............................2
Section 1.4. Interpretation...........................................2
SECTION 2. GENERAL AGREEMENT................................................3
Section 2.1. Leasing of Vehicles......................................3
Section 2.2. Right of Lessees to Act as Lessor's Agent................4
Section 2.3. Payment of Purchase Price by Lessor......................4
Section 2.4. Non-liability of Lessor..................................5
SECTION 3. TERM.............................................................5
Section 3.1. Vehicle Lease Commencement Date..........................5
Section 3.2. Lease Commencement Date..................................6
SECTION 4. CONDITIONS PRECEDENT.............................................6
Section 4.1. No Default...............................................6
Section 4.2. Limitations of the Acquisition of Certain Vehicles.......6
SECTION 5. RENT AND CHARGES.................................................6
Section 5.1. Payment of Rent..........................................6
Section 5.2. Payment of Availability Payment..........................6
Section 5.3. Payment of Monthly Supplemental Payments.................7
Section 5.4. Payment of Termination Payments, Casualty Payments,
and Late Return Payments.................................7
Section 5.5. Late Payment.............................................7
SECTION 6. INSURANCE........................................................7
Section 6.1. Fleet Insurance..........................................7
Section 6.2. Information..............................................7
SECTION 7. CASUALTY OBLIGATION..............................................7
SECTION 8. VEHICLE USE......................................................8
SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES
AND FINES........................................................9
SECTION 10. MAINTENANCE AND REPAIRS..........................................9
-i-
<PAGE> 78
Page
----
SECTION 11. VEHICLE WARRANTIES..............................................10
SECTION 12. PROGRAM VEHICLE USAGE REQUIREMENTS AND
DISPOSITION.....................................................10
Section 12.1. Usage..................................................10
Section 12.2. Disposition Procedure..................................10
Section 12.3. Termination Payments...................................11
SECTION 13. LATE RETURN PAYMENTS............................................11
SECTION 14. REDESIGNATION OF VEHICLES.......................................12
SECTION 15. GENERAL INDEMNITY...............................................13
Section 15.1. Indemnity of the Lessor................................13
Section 15.2. Indemnification of the Trustee.........................14
Section 15.3. Reimbursement Obligation by the Lessees................15
Section 15.4. Notice to Lessee of Claims.............................15
Section 15.5. Defense of Claims......................................15
SECTION 16. ASSIGNMENT......................................................15
SECTION 17. DEFAULT AND REMEDIES THEREFOR...................................16
Section 17.1. Events of Default......................................16
Section 17.2. Effect of Lease Event of Default.......................17
Section 17.3. Rights of Lessor Upon Lease Event of Default...........17
Section 17.4. Measure of Damages.....................................18
Section 17.5. Application of Proceeds................................19
SECTION 18. MANUFACTURER EVENTS OF DEFAULT..................................19
SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE..........................20
SECTION 20. SURVIVAL........................................................20
SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL AGENT
AND TRUSTEE.....................................................20
SECTION 22. MODIFICATION AND SEVERABILITY...................................22
SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES..........................22
Section 23.1. Due Organization, Authorization, No Conflicts, Etc.....22
-ii-
<PAGE> 79
Page
----
Section 23.2. Financial Information; Financial Condition.............23
Section 23.3. Litigation.............................................23
Section 23.4. Liens..................................................23
Section 23.5. Necessary Actions......................................24
Section 23.6. Employee Benefit Plans.................................24
Section 23.7. Investment Company Act.................................25
Section 23.8. Regulations G, T, U and X..............................25
Section 23.9. Business Locations; Trade Names; Principal Places
of Business Locations..................................25
Section 23.10. Taxes..................................................25
Section 23.11. Governmental Authorization.............................25
Section 23.12. Compliance with Laws...................................25
Section 23.13. Eligible Vehicles; Eligible Franchisees................26
Section 23.14. Supplemental Documents True and Correct................26
SECTION 24. CERTAIN AFFIRMATIVE COVENANTS...................................26
Section 24.1. Corporate Existence; Foreign Qualification.............26
Section 24.2. Books, Records and Inspections.........................26
Section 24.3. Vehicle Disposition Programs...........................27
Section 24.4. Reporting Requirements.................................27
Section 24.5. Taxes and Liabilities..................................31
Section 24.6. Compliance with Laws...................................32
Section 24.7. Maintenance of Separate Existence......................32
Section 24.8. Master Collateral Agent as Lienholder..................32
Section 24.9. Maintenance of Property................................32
Section 24.10. Access to Certain Documentation and Information
Regarding the Collateral...............................32
Section 24.11. Maintenance of Credit Enhancement......................33
SECTION 25. CERTAIN NEGATIVE COVENANTS......................................34
Section 25.1. Mergers, Consolidations................................34
Section 25.2. Other Agreements.......................................34
Section 25.3. Liens..................................................34
Section 25.4. Use of Vehicles........................................35
Section 25.5. Acquisition and Financing of Vehicles..................35
SECTION 26. SERVICING COMPENSATION..........................................35
SECTION 27. GUARANTY........................................................36
Section 27.1. Guaranty...............................................36
Section 27.2. Scope of Guarantor's Liability.........................37
Section 27.3. Lessor's Right to Amend this Lease.....................37
-iii-
<PAGE> 80
Page
----
Section 27.4. Waiver of Certain Rights by Guarantor..................37
Section 27.5. Lessees' Obligations to Guarantor and Guarantor's
Obligations to Lessees Subordinated....................38
Section 27.6. Guarantor to Pay Lessor's Expenses.....................40
Section 27.7. Reinstatement..........................................40
Section 27.8. Pari Passu Indebtedness................................40
Section 27.9. Third-Party Beneficiaries..............................40
SECTION 28. ADDITIONAL LESSEES..............................................40
Section 28.1. Additional Affiliate and Subsidiary Lessees............40
SECTION 29. BANKRUPTCY PETITION AGAINST LESSOR..............................42
SECTION 30. SUBMISSION TO JURISDICTION......................................42
SECTION 31. GOVERNING LAW...................................................43
SECTION 32. JURY TRIAL......................................................43
SECTION 33. NOTICES.........................................................43
SECTION 34. HEADINGS........................................................44
SECTION 35. EXECUTION IN COUNTERPARTS.......................................44
SECTION 36. EFFECTIVENESS...................................................44
SCHEDULES AND ATTACHMENTS
Annex A Operating Lease
Annex B Financing Lease
Schedule 1 Litigation Claims
Schedule 2 Pension Plans
Schedule 3 Business Locations
Schedule 4 Liens
ATTACHMENT A-1 Information on Existing Fleet
ATTACHMENT A-2 Vehicle Acquisition Schedule
ATTACHMENT B Form of Power of Attorney
ATTACHMENT C Form of Certification of Trade or Business Use
ATTACHMENT D Form of Affiliate Joinder in Lease
-iv-
<PAGE> 1
EXHIBIT 4.9
CREDIT SUISSE FIRST BOSTON THE CHASE MANHATTAN BANK
ELEVEN MADISON AVENUE 270 PARK AVENUE
NEW YORK, NEW YORK 10010 NEW YORK, NEW YORK 10017
November 19, 1997
Dollar Rent A Car Systems, Inc.
Thrifty Rent-A-Car System, Inc.
Dollar Thrifty Automotive Group, Inc.
5330 East 31st Street
Tulsa, Oklahoma 74135
Attention: Joseph E. Cappy
Chief Executive Officer
Re: $230,000,000 Revolving Credit Facility
$545,000,000 Commercial Paper Liquidity Facility
Commitment Letter
------------------------------------------------
Ladies and Gentlemen:
Dollar Thrifty Automotive Group, Inc., a Delaware corporation ("DTAG"),
has advised Credit Suisse First Boston ("Credit Suisse First Boston"), The
Chase Manhattan Bank ("Chase") and Chase Securities Inc. ("CSI") that it
intends to issue approximately 2,500,000 shares of its common stock, par value
$.01 per share (the "Common Stock"), pursuant to a registered public offering
for net cash proceeds of at least $45,000,000, which proceeds will be used to
provide collateral for the financing of vehicles by DTAG and its subsidiaries
(the "Primary Equity Offering"), and that Chrysler Corporation ("Chrysler")
intends to sell approximately 20,000,000 shares of the Common Stock of DTAG
owned by it pursuant to a registered public offering which, following the
consummation thereof, will result in DTAG no longer being a subsidiary of
Chrysler (the "Secondary Equity Offering", and, together with the Primary
Equity Offering, the "Equity Offerings"). DTAG has further advised Credit
Suisse First Boston that (a) it operates its vehicle rental businesses through
two direct wholly-owned subsidiaries, Dollar Rent A Car Systems, Inc., an
Oklahoma corporation ("Dollar"), and Thrifty Rent-A-Car System, Inc., an
Oklahoma corporation ("Thrifty"), (b) it intends to implement through a special
purpose, bankruptcy remote,
<PAGE> 2
wholly-owned subsidiary of DTAG, Thrifty Car Rental Finance Corporation (which
may change its name to Rental Car Finance Corp.) ("RCFC"), a $900,000,000
medium term note program secured by vehicles and related assets to replace
existing financing arrangements with Chrysler Financial Corporation (the "MTN
Program"), (c) it intends to implement through a special purpose, bankruptcy
remote, wholly-owned subsidiary, Dollar Thrifty Funding Corporation ("Dollar
Thrifty Funding"), a $615,000,000 commercial paper program secured by vehicles
and related assets, the proceeds of which will be used, in part, to refinance
existing vehicle fleet indebtedness (the "CP Program"), (d) it has entered into
vehicle supply arrangements pursuant to which Chrysler has agreed to supply
vehicles to DTAG's subsidiaries and (e) in connection with the foregoing, it
will enter into certain agreements with Chrysler and its subsidiaries relating
to the separation of DTAG from Chrysler, including (i) credit support
arrangements (the "Chrysler Support Arrangements") whereby Chrysler agrees to
provide letter of credit support to the MTN Program and the CP Program in an
aggregate initial amount (the "Initial Support Amount") equal to $60,000,000
less, in the event DTAG receives net cash proceeds in excess of $10,000,000
pursuant to the exercise by the underwriters and managers of the Equity
Offerings of their options to purchase additional shares of Common Stock to
cover over-allotments (the "Over-allotment Options"), the amount of net cash
proceeds in excess of $10,000,000 (to the extent Chrysler and its subsidiaries
have provided or arranged Purchased Franchise Vehicles Support (as defined
below) and have not requested DTAG to use any such excess proceeds to finance
the acquisition of Purchased Franchise Vehicles), subject thereafter to annual
reductions commencing September 30, 1999 equal to the greater of 20% of the
Initial Support Amount and 50% of the consolidated excess cash flow (to be
defined) of DTAG and subject (without duplication) to further reductions based
on the net cash proceeds (plus related depreciation) received by DTAG and its
subsidiaries from the disposition of Purchased Franchise Vehicles (as defined
below) that were acquired with proceeds from the exercise of the Over-allotment
Options that were in excess of $10,000,000 to the extent such proceeds did not
result in a reduction of the Initial Support Amount pursuant to the initial
determination thereof and (ii) other matters with respect to taxes and
insurance (collectively, the "Continuing Chrysler Arrangements", and, together
with the Equity Offerings, the MTN Program and the CP Program, the
"Transaction"). "Purchased Franchise Vehicles Support" means credit support for
the financing of certain vehicles to be acquired by Dollar in connection with
the planned acquisition by it of the Dollar franchisee currently operating in
Orange County, California (such vehicles, the "Purchased Franchise Vehicles")
on terms and conditions reasonably satisfactory to Credit Suisse First Boston
and Chase; provided that such support may be conditioned on the utilization by
DTAG of proceeds received by it from the exercise of the Over-allotment Options
in the financing of such acquisition of Purchased Franchise Vehicles.
You have further informed us that (a) DTAG, Dollar and Thrifty will
require, collectively, up to $230,000,000 in a senior, secured five-year
revolving bank credit facility (the "Credit Facility"), which facility would be
used for (i) the issuance of letters of credit that would support the MTN
Program and the CP Program as well as other obligations, including performance
and insurance bonds, and (ii) the working capital needs of Dollar, Thrifty and
their operating subsidiaries and (b) Dollar Thrifty Funding will require up to
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<PAGE> 3
$545,000,000 in a senior, secured 364-day revolving bank liquidity facility
(the "Liquidity Facility", and, together with the Credit Facility, the
"Facilities"), the proceeds of which would be used to repay maturing commercial
paper issued pursuant to the CP Program and repay matured loans under the
Liquidity Facility.
In connection with the foregoing, (a) Credit Suisse First Boston is
pleased to advise you that it hereby commits to provide $138,000,000 of the
Credit Facility and $327,000,000 of the Liquidity Facility and (b) Chase is
pleased to advise you that it hereby commits to provide $92,000,000 of the
Credit Facility and $218,000,000 of the Liquidity Facility. Although Credit
Suisse First Boston and Chase are committing severally to provide on a fully
underwritten basis all of the Credit Facility on the terms set forth in the
Credit Facility Term Sheet (as defined below), Credit Suisse First Boston and
CSI will endeavor to arrange (in such capacity (and in the similar capacity
described in the succeeding sentence), the "Co-Arrangers") a syndicate of
financial institutions reasonably acceptable to you (together with Credit
Suisse First Boston and Chase, the "Credit Facility Lenders") that would commit
to provide all or a portion of the Credit Facility. In addition, although
Credit Suisse First Boston and Chase are committing severally to provide on a
fully underwritten basis all of the Liquidity Facility on the terms set forth
in the Liquidity Facility Term Sheet (as defined below), Credit Suisse First
Boston and CSI will endeavor to arrange a syndicate of financial institutions
reasonably acceptable to you (together with Credit Suisse First Boston and
Chase, the "Liquidity Facility Lenders", and, together with the Credit Facility
Lenders, the "Lenders") that would commit to provide all or a portion of the
Liquidity Facility.
Attached as Exhibit A to this letter is a Summary of Terms and Conditions
(the "Credit Facility Term Sheet") setting forth a summary outline of the
principal terms and conditions on and subject to which Credit Suisse First
Boston and Chase are committing severally to provide the Credit Facility.
Attached as Exhibit B to this letter is a Summary of Terms and Conditions (the
"Liquidity Facility Term Sheet", and, together with the Credit Facility Term
Sheet, the "Term Sheets") setting forth a summary outline of the principal
terms and conditions on and subject to which Credit Suisse First Boston and
Chase are committing severally to provide the Liquidity Facility. The material
terms and conditions of the commitments of Credit Suisse First Boston and Chase
hereunder and under the Facilities are set forth herein and in the Term Sheets,
and any additional matters that are not covered by the provisions hereof and of
the Term Sheets shall be subject to our mutual agreement.
It is agreed that Credit Suisse First Boston will act as the sole
administrative agent for each of the Facilities (the "Administrative Agent")
and that Chase will be referred to as the syndication agent for each of the
Facilities (the "Syndication Agent", and, together with the Administrative
Agent, the "Agents"). No additional agents or co-agents or arrangers will be
appointed by you or any of us without the prior written consent of the other
signatories hereto. In addition, Credit Suisse First Boston and Chase reserve
the right to employ the services of Credit Suisse First Boston Corporation
("CSFB") and CSI, respectively, in providing the services contemplated by this
letter and to make the financings contemplated hereby through one or more of
its affiliates, and you agree that, in connection with the
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<PAGE> 4
provision of such services or financings, Credit Suisse First Boston, CSFB,
Chase, CSI and such other respective affiliates may share with each other such
confidential or other information relating to DTAG, Dollar, Thrifty and their
respective affiliates as from time to time may be in their possession.
You agree to assist the Co-Arrangers in forming each such syndicate and to
provide Credit Suisse First Boston, Chase and the other Lenders, promptly upon
request, with all information reasonably requested by them to complete
successfully the syndication, including, but not limited to, (a) an information
package for delivery to potential syndicate members and participants and (b)
information and projections prepared by you or your advisers relating to the
transactions described herein (exclusive of communications between you and your
counsel that you are advised by such counsel are subject to the attorney client
privilege to the extent the general nature of such communications are disclosed
to us and do not contain information that a financial institution would
consider material in deciding whether to extend commitments of the type
described herein, including information that it would consider materially
adverse to you or your affiliates). You also agree to use your best effort to
ensure that the syndication efforts of the Co-Arrangers benefit from your
existing lending relationships. You further agree to make appropriate senior
officers and representatives of DTAG, Dollar and Thrifty available to
participate in information meetings for potential syndicate members and
participants at such times and places as the Co-Arrangers may reasonably
request.
You represent and warrant and covenant that:
(a) all information (other than (i) financial statements and (ii)
financial and business projections and forecasts) which has been or is
hereafter made available to us by you or any of your representatives in
connection with the transactions contemplated hereby is or, when
furnished, will be complete and correct in all material respects and does
not or, when furnished, will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements contained therein not materially misleading in light of
the circumstances under which such statements are made;
(b) the financial statements that have been or will be made
available to us by you or any of your representatives have been or will
be prepared in accordance with generally accepted accounting principles
applied on a consistent basis and will present fairly, in all material
respects, the financial condition and results of operation of the
entities covered thereby; and
(c) all financial and business projections and forecasts that have
been or are hereafter prepared by you or on your behalf and made
available to us or any other participant in a Facility have been or will
be prepared in good faith based upon assumptions you believe to be
reasonable.
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<PAGE> 5
You agree to supplement the information, financial statements, projections and
forecasts referred to in clauses (a), (b) and (c) above from time to time until
completion of each syndication so that the representations and warranties in
the preceding sentence remain correct. In arranging and syndicating each
Facility, the Co-Arrangers will use and rely on such information and
projections without independent verification thereof.
In connection with the syndication of the Facilities, each of Credit
Suisse First Boston and Chase may, in its discretion, allocate to other Lenders
portions of any fees payable to it in connection with the Facilities. You
agree that no Lender will receive any compensation of any kind for its
participation in a Facility, except as expressly provided for in this letter or
in the Fee Letter referred to below.
The commitments of Credit Suisse First Boston and Chase hereunder are
subject to (a) there not occurring or becoming known to us any material adverse
condition or material adverse change in or affecting the business, operations,
property, condition (financial or otherwise) or prospects of DTAG, Dollar,
Thrifty and their respective subsidiaries taken as a whole from that described
in the financial statements and financial projections reviewed by us prior to
the date hereof, (b) our counsel confirming our due diligence analysis and
review of the tax, environmental and legal matters relating to DTAG, Dollar,
Thrifty and their respective subsidiaries (it being agreed that the condition
in this clause (b) shall expire unless Credit Suisse First Boston and Chase
shall have notified you on or prior to November 25, 1997 that such condition
has not been satisfied), (c) our not being aware after the date hereof of any
information or other matter which is inconsistent in a material and adverse
manner with any information or other material disclosed to us prior to the date
hereof, (d) there not having occurred a material disruption of or material
adverse change in financial, banking or capital market conditions that, in our
reasonable judgment, could materially impair the syndication of either
Facility, (e) there not being any competing offering, placement or arrangement
of any debt securities or bank financing by or on behalf of DTAG, Dollar,
Thrifty or any of their respective subsidiaries (other than in respect of the
MTN Program, the CP Program and any other financing of vehicles that is not
contemplated to be included in the MTN Program or the CP Program to the extent
such financing is on terms and conditions reasonably satisfactory to Credit
Suisse First Boston and Chase), unless otherwise agreed to by Credit Suisse
First Boston and Chase, (f) our review and reasonable satisfaction with the
terms of the documentation governing the Transaction (other than, in the case
of the Credit Facility commitment, documentation in respect of the Liquidity
Facility or the CP Program, to the extent not yet in place), (g) the
negotiation, execution and delivery on or before January 30, 1998 of definitive
documentation with respect to the Credit Facility reasonably satisfactory to
Credit Suisse First Boston and Chase and their counsel, (h) with respect to the
Liquidity Facility, the negotiation, execution and delivery on or before March
31, 1998 of definitive documentation with respect to the Liquidity Facility
reasonably satisfactory to Credit Suisse First Boston and Chase and their
counsel and (i) the other conditions set forth in the Term Sheets. Once the
Equity Offerings have been completed and the Credit Facility has been provided
to you, our commitment to provide the Liquidity Facility shall be subject only
to completion of the definitive documentation for such Facility
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<PAGE> 6
reasonably satisfactory to Credit Suisse First Boston and Chase and their
counsel and our reasonable satisfaction with the terms of the documentation for
the CP Program.
The reasonable costs and expenses (including, without limitation, the fees
and expenses of Mayer, Brown & Platt, counsel to Credit Suisse First Boston and
Chase, and Credit Suisse First Boston's and Chase's due diligence, syndication
and other out-of-pocket expenses) arising in connection with the preparation,
execution and delivery of this letter and the definitive financing agreements
shall be for your account. You further agree, jointly and severally, to
indemnify and hold harmless each Co-Arranger, Agent and Lender (including
Credit Suisse First Boston and Chase) and each director, officer, employee,
affiliate (including, without limitation, CSFB and CSI) and agent thereof
(each, an "indemnified person") against, and to reimburse each indemnified
person, upon its demand, for, any losses, claims, damages, liabilities or other
expenses ("Losses") to which such indemnified person may become subject insofar
as such Losses arise out of or in any way relate to or result from the
Transaction or any aspect thereof, this letter or the financings contemplated
hereby, including, without limitation, Losses consisting of reasonable legal or
other reasonable expenses incurred in connection with investigating, defending
or participating in any legal proceeding relating to any of the foregoing
(whether or not such indemnified person is a party thereto); provided that the
foregoing will not apply to any Losses of an indemnified person to the extent
they are found by a final decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such indemnified
person (or its agents or employees or any other indemnified person under its
control) or the breach by such indemnified person of any obligation hereunder
of such person to you in respect of the commitments set forth herein. Your
obligations under this paragraph shall remain effective whether or not
definitive financing documentation is executed and notwithstanding any
termination or expiration of this letter or the offer contained herein;
provided that, upon the execution and delivery of definitive documentation
governing the Facilities, the indemnification provisions set forth in such
definitive documentation shall be deemed, on a prospective basis, to supersede
your indemnification obligations hereunder to the extent such indemnification
provisions govern any Loss described herein. Neither Credit Suisse First
Boston, Chase or CSI nor any other indemnified person shall be responsible or
liable to any other person or entity for consequential damages which may be
alleged as a result of this letter or the financings contemplated hereby and
neither Credit Suisse First Boston or Chase nor any other indemnified person
shall be responsible or liable for any damages which may be alleged as a result
of its failure, if in accordance with the terms of this letter, to provide or
participate in any Facility.
The provisions of this letter are supplemented as set forth in, and are
conditioned upon, a separate fee letter dated the date hereof from us to you
(the "Fee Letter") and are subject to the terms of such Fee Letter. By
executing this letter, you acknowledge that this letter and the Fee Letter are
the only agreements between you and us with respect to the Facilities and set
forth the entire understanding of the parties with respect thereto. This
letter and the Fee Letter and the respective obligations and rights hereunder
and thereunder shall not be delegated or assigned by you without our prior
written consent. This letter may
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<PAGE> 7
not be amended or otherwise modified except pursuant to a writing signed by
each of the parties hereto. This letter may be executed by the signatories
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together one and the same letter. THIS
LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK. EACH OF THE UNDERSIGNED PARTIES HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF OR IN CONNECTION
WITH, THIS COMMITMENT LETTER AND THE FEE LETTER, AND ANY OTHER COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
ANY OF THE UNDERSIGNED PARTIES IN CONNECTION HEREWITH OR THEREWITH.
By your acceptance hereof, you agree that neither this letter, the Fee
Letter, nor any of their terms or substance, shall be disclosed, directly or
indirectly, to any other person except to your employees, agents and advisers
who are directly involved in the consideration of this matter or as disclosure
may be compelled in a judicial or administrative proceeding or as otherwise
required by law (and in each such event of permitted disclosure you agree
promptly to inform us and to provide us with a reasonable opportunity to review
and comment upon the contents of such disclosure); provided that, after your
acceptance of the terms hereof and of the Fee Letter, you may disclose this
letter and the terms set forth in the Term Sheets in any public filings or
other disclosure under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that are required in connection
with the Equity Offerings or the closing of the CP Program to the extent you
have provided us a reasonable opportunity to review and comment upon the
contents of such disclosure. Your obligations under this paragraph shall
remain effective whether or not definitive financing documentation is executed
and notwithstanding any termination or expiration of this letter or the offer
contained herein.
If you are in agreement with the foregoing, please sign and return to
Credit Suisse First Boston and Chase the enclosed copies of this letter and the
Fee Letter no later than 5:00 p.m., New York time, on November 20, 1997, at
which time this offer shall terminate unless prior thereto we shall have
received signed copies of such letters. Following your execution and delivery
of this letter and the Fee Letter in accordance with the preceding sentence,
our commitments hereunder shall terminate at 5:00 p.m., New York time, on
January 30, 1998, unless on or prior to such time, definitive documentation
with respect to the Credit Facility reasonably satisfactory to us and our
counsel has been executed and delivered by you, us and, to the extent the
Credit Facility has been syndicated, the applicable Credit Facility Lenders,
and our commitments hereunder with respect to the Liquidity Facility shall
terminate at 5:00 p.m., New York time, on March 31, 1998, unless on or prior to
such time, definitive documentation with respect to the Liquidity Facility
reasonably satisfactory to us and our counsel has been executed and delivered
by Dollar Thrifty Funding, us and, to the extent the Liquidity Facility has
been syndicated, the applicable Liquidity Facility Lenders.
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<PAGE> 8
We look forward to working with you on this transaction.
Very truly yours,
CREDIT SUISSE FIRST BOSTON
By: /s/ Robert N. Finney
-----------------------------
Title: Managing Director
By: /s/ Thomas Muoio
-----------------------------
Title: Vice President
THE CHASE MANHATTAN BANK
By: /s/ BJ Lillis
------------------------------
Title: Managing Director
CHASE SECURITIES INC.
By: /s/ Donald R. Benson
------------------------------
Title: Managing Director
Accepted and agreed to as of the date
first above written:
DOLLAR RENT A CAR SYSTEMS, INC.
By:/s/ Robert J. Drvostep
-----------------------------
Title: Vice President and
Chief Financial Officer
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<PAGE> 9
THRIFTY RENT-A-CAR SYSTEM, INC.
By: /s/ Steven B. Hildebrand
------------------------------
Title: Vice President, Chief
Financial Officer and
Treasurer
DOLLAR THRIFTY AUTOMOTIVE
GROUP, INC.
By: /s/ Steven B. Hildebrand
-------------------------------
Title: Vice President, Chief
Financial Officer and
Treasurer
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<PAGE> 10
Syndication Agent: The Chase Manhattan Bank (in such capacity, the
"Syndication Agent", and, together with the
Liquidity Agent and the Collateral Agent, the
"Agents").
Liquidity Facility Lenders: Domestic and foreign commercial banks and other
financial institutions maintaining short-term
unsecured debt ratings of at least "A-1" from S&P
and "P-1" from Moody's.
Commitment Maturity Date: The earliest of (i) 364 days from the date of such
commitment, (ii) the date on which all commercial
paper has been paid in full and cannot be
re-issued and (iii) the date on which Dollar
Thrifty Funding terminates the Liquidity Facility.
Facility Amount: The aggregate commitments under the Liquidity
Facility will initially total $545,000,000.
Commitment Fees: The Issuer shall pay to the Liquidity Agent, for
the ratable benefit of the Liquidity Facility
Lenders, a commitment fee on the average daily
unused portion of the Liquidity Facility, payable
monthly in arrears, at 18.75 basis points per
annum, calculated on the basis of a year of 360
days for actual days elapsed.
Facility Availability: Subject to having met the liquidity conditions set
forth below, each Liquidity Facility Lender may be
obligated to make advances to the Issuer at any
time during the term of its commitment in an
amount up to the lesser of (i) the available
portion of its commitment amount and (ii) its pro
rata share of the face amount of outstanding
commercial paper maturing on or after such date.
The aggregate amount that may be drawn under the
Liquidity Facility on any date will equal the
lesser of (i) the CP Borrowing Base (as defined
below) less the available Letter of Credit amount
and (ii) the undrawn amount of the Liquidity
Facility. The "CP Borrowing Base" will be (a) the
outstanding principal amount, net of any write
downs (which write downs will be based upon losses
in respect of collateral), of the Variable Funding
Note (defined below), plus (b) all accrued and
unpaid interest thereon, plus (c) any cash held by
the Issuer in a designated commercial paper
account. The "Variable Funding Note" will be a
note representing a new series
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<PAGE> 11
issued under the master indenture between Rental
Car Finance Corp. ("RCFC"), formerly Thrifty Car
Rental Finance Corporation, a bankruptcy remote
special purpose corporation and wholly-owned
subsidiary of DTAG, and Bankers Trust Company,
as Trustee (the "RCFC Indenture"). The security
pledged under the RCFC Indenture to secure the
Variable Funding Note will be as set forth below
under the caption "Security".
The Liquidity Facility may be drawn in the
event the Issuer has determined, after
consultation with the commercial paper dealers,
that commercial paper cannot be sold, unless:
(a) the Issuer has experienced an insolvency
event, or
(b) the amount available under the Letter of
Credit has been reduced to zero due to
credit draws.
Interest Periods and Rates: At the option of the Issuer:
(i) Base Rate, or
(ii) the one, two, three or six-month
Eurodollar Rate plus 75.0 basis points.
For purposes hereof:
"Base Rate" means the higher of (i) the
rate of interest established by the Liquidity
Agent as its base or prime rate in effect at
its principal office in New York City (the
"Prime Rate") and (ii) the federal funds
effective rate from time to time plus 50 basis
points; and
"Eurodollar Rate" means the rate
(grossed-up for maximum statutory reserve
requirements for eurocurrency liabilities) at
which eurodollar deposits for one, two, three
or six months (as selected by the Issuer) are
offered by the Liquidity Agent in the relevant
interbank eurodollar market.
Such per annum rates shall be calculated on the
basis of a year of 360 days (or 365/366 days,
in the case of Base
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<PAGE> 12
Rate loans the interest rate payable on which
is then based on the base or prime rate) for
actual days elapsed.
Security: The Issuer will pledge all its right, title and
interest in the Variable Funding Note and all
security for the Variable Funding Note under
the RCFC Indenture, including, but not limited
to, the related master lease and servicing
agreement (the "Lease Agreement"), the vehicles
leased thereunder (the "Vehicles"), proceeds
from the manufacturer programs related to the
Vehicles, all sale and insurance proceeds from
the Vehicles, the Letter of Credit supporting
the payments due under the Lease Agreement and
the capitalization demand note capitalizing RCFC
and any security therefor.
Vehicles eligible to be leased under the Lease
Agreement ("Eligible Vehicles") will be cars
and light duty trucks that are subject to a
manufacturer disposition program (a
"Manufacturer Program") provided by an eligible
manufacturer (a "Manufacturer") (such Vehicles,
"Program Vehicles") and cars and light duty
trucks not subject to a Manufacturer Program
("Non-Program Vehicles"), provided that the
aggregate net book value of all Non-Program
Vehicles under the Lease Agreement will be
subject to a limit of 20% of the size of the CP
Program.
Reduction or Termination
of Liquidity Facility: The Issuer may, upon three business days'
notice, reduce in part or terminate in whole the
amount of the Liquidity Facility without
penalty. Any partial reduction of the Liquidity
Facility will be pro rata across the Liquidity
Facility and in minimum amounts of $5,000,000
and increments of $1,000,000 thereafter. No
reductions may be made in an amount such that,
after giving effect to such reduction, the
aggregate amounts available under the Liquidity
Facility and the Letter of Credit would be less
than the amount required by the Rating Agencies.
Credit Enhancement: A. Letter of Credit. In order to assure the
timeliness of payment by the lessees under the
Lease Agreement, credit enhancement will be
provided, in part, pursuant to a letter of
credit issued under the Credit Facility and/or a
letter of credit issued by Chrysler Credit
Corporation (and, if
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<PAGE> 13
Chrysler Credit Corporation is such an issuer,
its letter of credit, together with any letter
of credit issued under the Credit Facility,
shall be fronted by a letter of credit (the
"Fronting L/C") issued by a single institution
(the "Fronting Bank") which maintains short-term
credit ratings of "A-1" (or better) from S&P and
"P-1" from Moody's (collectively, the "Letter of
Credit")). It is expected that the Letter of
Credit will be in an aggregate amount equal to
the sum of approximately 10% of the net book
value of eligible Program Vehicles financed by
the proceeds of the issuance of the Variable
Funding Note and approximately 15% of the net
book value of eligible Non-Program Vehicles
financed by the proceeds of the issuance of the
Variable Funding Note. Final sizing of the
exact enhancement levels (the "Required
Enhancement Amount") will be determined by the
Rating Agencies, and will generally be sized in
accordance with the foregoing percentages and
will cover, among other items, the following:
(a) the discount on the commercial paper notes
(yield to investors) based on the maturity
of the commercial paper notes;
(b) payments due from a lessee for any
casualty, late return, excess mileage or
damage charges;
(c) payments due from RCFC for the difference
between the net book value of Non-Program
Vehicles and the proceeds to be received
upon the sale of such Non-Program Vehicles
to a third party;
(d) the aggregate amount of depreciation that
would be expected to accrue in respect of
Vehicles during a 60-day period;
(e) commitment fees due to letter of credit
providers, the Fronting Bank (if any) and
the Liquidity Facility Lenders; and
(f) any other expenses associated with the
disposition of the Vehicles (i.e.,
secondary servicer expenses).
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<PAGE> 14
B. Overcollateralization. On the closing date
of the CP Program, RCFC will obtain additional
capital (by capital contribution or otherwise),
the proceeds of which will be used to purchase
Eligible Vehicles for lease under the Lease
Agreement. The lease payments under the Lease
Agreement and all disposition proceeds from
these Eligible Vehicles will provide additional
credit enhancement for the Variable Funding
Note. The overcollateralization may be
increased in the future to provide additional
credit enhancement as required under the terms
of the CP Program.
Conditions to Effectiveness: The availability of the Liquidity Facility shall
be conditioned, except to the extent waived,
upon satisfaction of, among other things, the
following conditions precedent on or before
March 31, 1998:
1. Execution and delivery of reasonably
satisfactory credit, security and other
related documentation embodying the
structure, terms and conditions of the
Liquidity Facility contained herein
(collectively, the "Liquidity
Documentation").
2. The $230,000,000 Credit Facility shall be in
full force and effect and no default shall
then exist thereunder.
3. The Issuer's commercial paper shall have
received ratings of "A-1" (or better) from
S&P and "P-1" from Moody's.
4. Due authorization, execution and delivery
of the Letter of Credit in form and
substance reasonably satisfactory to
the Agents.
5. The absence of an Event of Amortization,
Limited Event of Amortization or Lease
Event of Default.
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<PAGE> 15
6. All representations and warranties
of the Issuer and RCFC contained in each
of the CP Program documents to which the
Issuer or RCFC is a party shall be true
and correct (including, as of the Closing
Date, no material litigation or similar
proceeding which would have a material
adverse effect on the ability of Issuer or
RCFC to perform its obligations under such
documents).
7. RCFC shall not have sold, assigned, or
otherwise encumbered any of the Vehicles
financed under the Variable Funding Note
issued to Dollar Thrifty Funding except
as permitted under the applicable
agreements.
8. A collateral account, a master collateral
account and a commercial paper account in
respect of the CP Program shall have been
established.
9. The Liquidity Agent shall have received
the results of a recent lien search in each
of the jurisdictions and offices where
assets constituting collateral for the
Liquidity Facility and the Variable Funding
Note are located or recorded and such
search shall reveal no liens on any such
assets except to the extent contemplated in
the paragraph captioned "Security" above or
released on the Closing Date or otherwise
consented to by the Liquidity Agent.
10. The Liquidity Agent shall be satisfied
that all Vehicles have been properly
titled and that the security interests
therein described in the paragraph
captioned "Security" above have been
notated and the Liquidity Agent shall have
received evidence that all UCC-1 financing
statements and other instruments and
documents as may be necessary or desirable
to perfect the other security interests
described in the paragraph captioned
"Security" above have been forwarded for
filing or, in its discretion, are in its
possession in a form suitable for filing.
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<PAGE> 16
11. The Liquidity Facility Lenders shall have
received such opinions, instruments,
certificates and other documents as are
customary for transactions of this type or
as they may reasonably request, including
(i) legal opinions regarding exemption from
registration of the commercial paper notes
under the Securities Act of 1933 and
exemption of the Issuer from the provisions
of the Investment Company Act and (ii)
enforceability opinions for all CP Program
documents (including the Letter of Credit
and the Variable Funding Note), a
non-consolidation opinion, perfection
opinions and, if required by the Rating
Agencies, opinions addressing the
enforceability of the Manufacturer Programs
against the Manufacturers.
Representations and
Warranties: The representations and warranties of the Issuer
shall include customary provisions for
transactions of a similar nature, including the
following:
1. Standard representations as to corporate
existence, compliance with law and
authority to enter the contemplated
transaction (including enforceability, no
proceedings, no conflicts).
2. Representations that all commercial paper
notes are exempt from registration under
Section 4(2) of the Securities Act of
1933.
3. Representations that the Issuer is not an
"investment company" within the meaning of
the Investment Company Act of 1940.
4. Representations as to compliance with
margin regulations.
5. Representations that the Issuer is not
insolvent or bankrupt and is not the
subject of any similar proceedings.
6. Representations as to ownership of
assets and creation and perfection of
security interest.
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<PAGE> 17
Covenants of the Issuer
and RCFC: Customary for transactions of a similar nature,
including the following:
1. The Issuer and RCFC will provide or, where
applicable, cause DTAG, as master servicer
(the "Master Servicer"), to provide the
Collateral Agent and the Liquidity
Facility Lenders with such information
with respect to the transaction as the
Liquidity Facility Lenders may reasonably
require, including, but not limited, to,
financial statements of RCFC and the
Issuer.
2. The Issuer and RCFC will take all actions
necessary to ensure that all taxes and
other governmental claims in respect of
RCFC's and the Issuer's operations and
assets are properly paid.
3. The Issuer and RCFC will comply in all
material respects with its obligations
under the documents to which it is a party
and will not take any action which would
permit DTAG or the lessees to have the
right to refuse to perform any of their
obligations under the Lease Agreement.
4. The Issuer and RCFC will give the Liquidity
Facility Lenders notice of any default
under any agreements between the Issuer,
RCFC and any of DTAG or the lessees, the
Liquidity Facility Lenders or the
Collateral Agent.
5. The Issuer will take all actions necessary
to ensure that the lessees or such other
affiliate of DTAG as is responsible
therefor has filed and recorded all
documents and statements required to
maintain title to the Vehicles.
6. The Issuer and RCFC will not create, incur,
assume, or cause to exist any lien or
security interest on any of its property
other than as provided under the Liquidity
Documentation.
-9-
<PAGE> 18
7. The Issuer will not create, incur, assume,
or cause to exist any indebtedness or any
other liability except (i) indebtedness
evidenced by the commercial paper, (ii)
advances under the Liquidity Facility,
(iii) normal operating expenses and (iv)
liquidity advances under the Letter of
Credit.
8. Limitation on merger, consolidation, joint
venture, or other association of the
Issuer and RCFC.
9. Neither the Issuer nor RCFC will amend its
organizational documents without the
written consent of the Majority Secured
Parties (to be defined) and the Rating
Agencies.
10. Neither the Issuer nor RCFC will change its
business or enter into new businesses or
enter into any agreements other than as
contemplated by the Liquidity
Documentation.
11. The Issuer and RCFC will satisfy their
obligations under the Employee Retirement
Income Security Act of 1974, as amended,
and all other legal requirements.
12. The Issuer will not sell or purchase any
collateral except as contemplated in the
Liquidity Documentation.
13. RCFC and the Issuer will maintain their
respective separate legal existence and
will maintain their respective corporate
identities (separate from DTAG and any
other affiliates) and will not enter into
transactions with DTAG and its affiliates
except on an arm's length basis.
14. Neither RCFC nor the Issuer will change the
location of its principal office without
prior notice to the Liquidity Agent and
the Collateral Agent.
Covenants of DTAG: The Lease Agreement will contain customary
covenants made by DTAG and the lessees for
transactions of a similar nature, including the
following:
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<PAGE> 19
1. The maintenance of a minimum Interest
Coverage Ratio (to be defined) of
1.1:1.0.
2. The maintenance of a minimum Fixed Charge
Coverage Ratio (to be defined) of 1.0:1.0.
3. DTAG will not be permitted to make
distributions (including dividends and
return of capital) to its stockholders
except amounts up to cumulative net
income from the Closing Date.
Events of Amortization: The Events of Amortization under the Liquidity
Facility will include, among other events, the
following.
1. Failure of the Issuer to repay maturing
commercial paper when due.
2. Failure of the Issuer to pay principal on
advances to Liquidity Facility Lenders
under the Liquidity Facility when due or
failure to pay interest on advances or
Commitment Fees within three business days
after such amounts become due.
3. Breach of a representation or warranty of
the Issuer set forth in the Liquidity
Agreement or other program documents
after any applicable grace period.
4. Failure to observe or perform certain
covenants of the Issuer contained in the
Liquidity Agreement or other program
documents and the continuance of such
failure after any applicable grace period.
5. Involuntary bankruptcy proceedings are
commenced against the Issuer, RCFC or the
Servicer and not dismissed within 60 days
or a decree or order for relief is entered
against the Issuer, RCFC or the Servicer,
certain insolvency events occur or
voluntary bankruptcy or similar
proceedings are commenced with respect to
the Issuer, RCFC or the Servicer.
6. Final judgment in excess of $100,000
against RCFC or the Issuer is unsatisfied
and unstayed for 60 days.
-11-
<PAGE> 20
7. The available amount of credit
enhancement is for a one business day
period less than the Required
Enhancement Amount.
8. The rating on the Issuer's commercial paper
notes is downgraded to "A-2" or less by
S&P or "P-2" or less by Moody's, or
withdrawn, and all of the Liquidity
Facility Lenders have a rating of A-1 or
better by S&P and P-1 by Moody's.
9. The occurrence of an Event of Default under
the Lease Agreement or the RCFC Indenture
after any applicable grace period.
10. The declaration by the Credit Facility
Lenders of an event of default under the
$230,000,000 Credit Agreement or by
Chrysler Credit Corporation under the
reimbursement agreement relating to the
letter of credit issued by it in
connection with the CP Program.
Upon the occurrence of an Event of Amortization,
the Liquidity Facility Lenders shall remain
obligated to make advances to the Issuer to
repay outstanding commercial paper up to the
amount of their respective commitments, unless
the voluntary or involuntary bankruptcy or
insolvency of the Issuer shall have occurred or
the available amount of credit enhancement shall
be reduced to zero due to credit draws.
Limited Events of
Amortization: The Limited Events of Amortization will result
in, and will include, among other events, the
following:
1. Dollar Thrifty Funding will not be
permitted to make any further purchases of
the Variable Funding Note the proceeds of
which will be used by RCFC to finance
Vehicles from a particular Manufacturer if:
(a) such Manufacturer fails to pay
amounts owed to the lessees or RCFC
under the applicable Manufacturer
Program, subject to any applicable
grace period;
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<PAGE> 21
(b) such Manufacturer becomes the subject
of an insolvency, bankruptcy or
similar preceding; or
(c) such Manufacturer or such
Manufacturer's Manufacturer Program
shall cease to be an eligible
Manufacturer or eligible Manufacturer
Program, respectively.
2. Dollar Thrifty Funding will not be
permitted to make any further purchases of
the Variable Funding Note if the liquidity
loan commitment of any Liquidity Facility
Lender shall have been terminated, Dollar
Thrifty Funding shall have failed to
replace such Liquidity Facility Lender and
the outstanding principal amount of the
Variable Funding Note would exceed the
remaining aggregate liquidity loan
commitments.
3. Dollar Thrifty Funding will not be
permitted to make any further purchases of
the Variable Funding Note if the
short-term credit ratings of a Liquidity
Facility Lender are reduced to below "A-2"
by S&P or "P-2" by Moody's, such Liquidity
Facility Lender is not replaced by another
Liquidity Facility Lender within 60 days
(or such other period of time as may be
determined by the Rating Agencies) and the
outstanding principal amount of the
Variable Funding Note would exceed the
remaining aggregate liquidity loan
commitments. Dollar Thrifty Funding will
again be permitted to make purchases when
the size of the CP Program is reduced by
the amount of the commitment(s) of such
Liquidity Facility Lender.
Lease Events of Default: The Lease Events of Default shall include,
among other events, the following:
1. Failure of a lessee and the guarantor to
pay any portion of rent allocable to base
rent due under the Lease Agreement within
three business days of such due date or
the failure to pay the portion of rent
under the Lease Agreement allocable to
variable rent or any other amount due
in respect thereof within five business
days after such amounts become due.
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<PAGE> 22
2. Involuntary bankruptcy proceedings are
commenced against RCFC, DTAG or any of its
affiliates and not dismissed within 60
days or a decree or order for relief is
entered, certain insolvency events occur
or voluntary bankruptcy or similar
proceedings are commenced.
3. Failure by a lessee or the guarantor to
comply with or perform any provision of
the Lease Agreement and the continuance
of such failure after any applicable grace
period.
4. Material breach of a representation or
warranty of a lessee or the guarantor set
forth in the Lease Agreement after
any applicable grace period.
5. Failure of the lessees and the guarantor
to maintain the available credit
enhancement amount at the Required
Enhancement Amount for more than one
Business Day.
Upon the occurrence of a Lease Event of Default,
RCFC will not be permitted to make any further
advances under the Lease Agreement.
Events of Liquidation: Lease Events of Default set forth under clauses
2 and 5 above will also constitute Events of
Liquidation.
Upon the occurrence of an Event of Liquidation,
RCFC will be required to exercise its right to
return Program Vehicles to the Manufacturers or
otherwise dispose of them under the respective
Manufacturer Programs upon the expiration of the
minimum vehicle holding period (if applicable)
and dispose of all Non-Program Vehicles in a
commercially reasonable manner. Events of
Liquidation can be waived upon consent from (i)
two-thirds of the Liquidity Facility Lenders and
(ii) the Fronting Bank.
Assignments and
Participations: Each Liquidity Facility Lender may assign all or
a portion of its commitment to an eligible
assignee subject to certain specified
conditions, including Rating Agency
confirmation, consent (not to be unreasonably
withheld) of the Liquidity Agent and the Issuer
(except with respect
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<PAGE> 23
to assignments to another Liquidity Facility
Lender) and a minimum commitment for each
Liquidity Facility Lender of $5,000,000.
Liquidity Facility Lenders may participate
their commitments without consent. Participants
shall have the same benefits as the Liquidity
Facility Lenders with respect to yield
protection and increased cost provisions.
Voting rights of participants shall be limited
to certain customary issues. Pledges of loans
in accordance with applicable law shall be
permitted without restriction; provided that the
obligations under the Liquidity Documentation of
the Liquidity Facility Lender pledging any such
loan may not be delegated or assigned pursuant
to any foreclosure under such pledge without the
consent of the Issuer (as provided above).
Other Provisions: Provisions as to voting, yield protection and
expenses and indemnification that are
substantially similar to those described in the
Credit Facility Term Sheet. The Issuer will
have the right to replace any Liquidity Facility
Lender (i) that demands payment of amounts in
respect of increased costs which the Issuer, in
its reasonable judgment, believes is reasonably
likely to be demanded again in the future so
long as an event of amortization shall not have
occurred and be continuing or (ii) whose
short-term unsecured debt rating is downgraded
by a Rating Agency to a level below the then
current credit rating assigned to the Issuer's
commercial paper notes by such Rating Agency,
in each case, with an Eligible Liquidity
Facility Lender (to be defined) acceptable to
the Liquidity Agent.
Governing Law and Forum: State of New York.
Counsel to the Co-Arrangers
and the Agents: Mayer, Brown & Platt.
Commitment Termination Date: The Liquidity Documentation must have been
entered into on or before March 31, 1998.
-15-
<PAGE> 1
EXHIBIT 4.10
CHRYSLER SUPPORT LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
Dated as of December __, 1997
among
CHRYSLER CORPORATION,
DOLLAR RENT A CAR SYSTEMS, INC.,
as a Lessee,
THRIFTY RENT-A-CAR SYSTEM, INC.,
as a Lessee,
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.,
as the Guarantor.
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
<TABLE>
<S> <C> <C>
Section 1.1. Definitions................................................................................4
ARTICLE II
ISSUANCE OF CHRYSLER SUPPORT
LETTERS OF CREDIT; REIMBURSEMENT OBLIGATION
Section 2.1. Issuance of Chrysler Letters of Credit; Reduction Amounts..................................4
Section 2.3. Reimbursement..............................................................................8
Section 2.4. No Liability of Chrysler..................................................................10
Section 2.5. Conditions Precedent to Issuance..........................................................10
Section 2.6. Obligation Absolute.......................................................................12
Section 2.7. Guaranty..................................................................................13
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 3.1. Representations and Warranties of the Lessees and DTAG....................................15
Section 3.2. Covenants of the Lessees and DTAG.........................................................17
Section 3.3. Chrysler Covenants........................................................................19
ARTICLE IV
MISCELLANEOUS
Section 4.1. Payments..................................................................................20
Section 4.2. Notices...................................................................................20
Section 4.3. Amendments, etc...........................................................................21
Section 4.4. Consent to Jurisdiction...................................................................21
Section 4.5. Waiver of Jury Trial......................................................................22
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 4.6. Governing Law............................................................................22
Section 4.7. Severability.............................................................................22
Section 4.8. Term.....................................................................................22
Section 4.9. Successors and Assigns...................................................................23
Section 4.10. Counterparts.............................................................................23
Section 4.11. Further Assurances.......................................................................23
Section 4.12. Survival of Obligations..................................................................23
Section 4.13. Obligation...............................................................................23
Section 4.14. Headings.................................................................................24
Section 4.15. Application of Funds.....................................................................24
Section 4.16. Subordination of Obligations Pursuant to Intercreditor and
Subordination Agreement..................................................................24
</TABLE>
ii
<PAGE> 4
CHRYSLER SUPPORT LETTER OF CREDIT
AND REIMBURSEMENT AGREEMENT
THIS CHRYSLER SUPPORT LETTER OF CREDIT AND REIMBURSE MENT AGREEMENT,
dated as of December __, 1997 (as the same may be amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms
hereof, this "Agreement"), is entered into by and among CHRYSLER CORPORA TION, a
Delaware corporation ("Chrysler"), DOLLAR RENT A CAR SYSTEMS, INC., an Oklahoma
corporation ("Dollar"), THRIFTY RENT-A-CAR SYSTEM, INC., an Oklahoma corporation
("Thrifty"), each of Dollar and Thrifty a "Lessee" and, collective ly, the
"Lessees"), and DOLLAR THRIFTY AUTOMOTIVE GROUP, INC., a Delaware corporation
("DTAG" or the "Guarantor").
R E C I T A L S
WHEREAS, contemporaneously with the execution and delivery of this
Agree ment, Rental Car Finance Corp., a special purpose Oklahoma corporation,
formerly known as Thrifty Car Rental Finance Corporation ("RCFC"), as issuer (in
such capacity, the "Issuer"), and Bankers Trust Company, a New York banking
corporation, as Trustee (in such capacity, the "Trustee"), are entering into the
Series 1997-1 Supplement, dated as of even date herewith (as the same may be
amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms thereof, the "Series 1997-1 Supplement"), to the Base
Indenture, dated as of December 13, 1995, between RCFC and the Trustee, as
amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms thereof, the "Base Indenture"), pursuant to which RCFC
will issue its Series 1997-1 Notes (such capitalized term, together with all
other capitalized terms used and not defined herein, shall have the meanings
assigned thereto pursuant to Section 1.1);
WHEREAS, contemporaneously with the execution and delivery of this
Agree ment, RCFC, the Lessees and DTAG are entering into the Master Motor
Vehicle Lease and Servicing Agreement dated as of even date herewith (the
"Master Lease"), pursuant to which RCFC will lease vehicles to Lessees in their
respective domestic daily rental business;
WHEREAS, contemporaneously with the execution and delivery of this
Agree ment, DTAG, the Issuer, the Trustee, Thrifty, Dollar, certain other
parties thereto, and Bankers Trust Company, as Master Collateral Agent, are
entering into an Amended and Restated Master Collateral Agency Agreement (the
"Master Collateral Agency Agree-
<PAGE> 5
ment"), which amends and restates the Master Collateral Agency Agreement,
dated as of December 13, 1995, among the Issuer, Thrifty, certain other parties
thereto, and the Master Collateral Agent;
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Series 1997-1 Letter of Credit Provider is issuing its Series
1997-1 Letter of Credit to the Trustee to provide (i) with respect to the
Lessees, partial credit support for the obligations of the Lessees to make
payments under the Master Lease and (ii) with respect to DTAG, credit support
for any amounts owed by DTAG under Section [4.19] of the Series 1997-1
Supplement;
WHEREAS, contemporaneously with the execution and delivery of this
Agree ment, Chrysler is executing and delivering to the Series 1997-1 Letter of
Credit Provider a letter of credit (such letter of credit, as the same may be
amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms thereof and any successor letter of credit thereto as
provided for in this Agreement and thereunder, the "Chrysler Series 1997-1
Support Letter of Credit") in substantially the form of Exhibit to the Series
1997-1 Letter of Credit Agreement (as hereinafter defined), to reimburse the
Series 1997-1 Letter of Credit Provider for any amounts drawn under the Series
1997-1 Letter of Credit subject to the terms and conditions set forth therein in
an amount up to the Available Chrysler Support Amount (as such term is de fined
in Chrysler Series 1997-1 Support Letter of Credit) and on the terms set forth
in the Chrysler Series 1997-1 Support Letter of Credit;
WHEREAS, substantially contemporaneously with the execution and
delivery of this Agreement, (a) DTAG intends to issue shares of its common
stock, par value $0.01 per share (the "Common Stock"), in a registered public
offering for net cash proceeds of at least $45,000,000, which proceeds will be
used to provide collateral for the financing of vehicles by DTAG and its
subsidiaries (the "Primary Equity Offering"), and (b) Chrysler intends to sell
approximately 20,000,000 shares of the Common stock of DTAG owned by it in a
registered public offering which, following the consummation thereof, will
result in DTAG no longer being a subsidiary of Chrysler (the "Second Equity
Offering" and, together with the Primary Equity Offering, the "Equity
Offerings");
WHEREAS, it is contemplated that following the execution and delivery
of this Agreement, (a) DTAG will implement through a to-be-formed special
purpose, wholly-owned subsidiary ("Dollar Thrifty Funding"), a commercial paper
program of up to $615,000,000 secured by vehicles and related assets, the
proceeds of which will be used to finance vehicle fleet growth and to refinance
existing vehicle fleet indebtedness (the "CP Program"), and (b) in connection
with the CP Program, a letter of credit would be
2
<PAGE> 6
provided (the "CP Program Letter of Credit") by a financial institution having a
short-term credit rating of "A-1" (or better) from S&P and "P-1" from Moody's
(the "CP Program Letter of Credit Provider");
WHEREAS, [pursuant to the Series 1997-1 Letter of Credit Agreement (as
hereinafter defined)] additional institutions (each, an "Additional Series
1997-1 Support Letter of Credit Provider") may be issuing to the Series 1997-1
Letter of Credit Provider a letter of credit (each such letter of credit, a
"Series 1997-1 Support Letter of Credit") to reimburse the Series 1997-1 Letter
of Credit Provider for any amounts drawn under the Series 1997-1 Letter of
Credit on a pro rata basis with respect to each other and with respect to
Chrysler's reimbursement of such amounts pursuant to Chrysler Series 1997-1
Support Letter of Credit;
WHEREAS, contemporaneously with the execution and delivery of this
Agree ment, the Lessees, DTAG and the Series 1997-1 Letter of Credit Provider
are entering into the Series 1997-1 Letter of Credit Agreement, dated as of even
date herewith (as the same may be amended, supplemented or otherwise modified
from time to time in ac cordance with the terms thereof, the "Series 1997-1
Letter of Credit Agreement"), to provide for the issuance of Series 1997-1
Support Letters of Credit from time to time to reduce the credit support
provided by the Chrysler Series 1997-1 Support Letter of Credit and for the
payment and repayment of certain fees and expenses and other obligations of the
Lessees and DTAG to the Series 1997-1 Letter of Credit Provider in connection
with the execution and delivery by the Series 1997-1 Letter of Credit Provider
of the Series 1997-1 Letter of Credit;
WHEREAS, the Lessees, DTAG and Chrysler are entering into this
Agreement to provide for, among other things, (i) the reimbursement by the
Lessees (or in certain cases, DTAG) of draws upon the Chrysler Series 1997-1
Support Letter of Credit that are made by the Series 1997-1 Letter of Credit
Provider and (ii) the guaranty by DTAG of the reimbursement obligations of each
of the Lessees.
NOW, THEREFORE, in consideration of the recitals and of the agreements
herein contained, and for due and adequate consideration, which the parties
hereto hereby acknowledge, the parties hereto agree as follows:
3
<PAGE> 7
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement and unless the
context re quires a different meaning, capitalized terms used but not defined
herein (including in the preamble and the recitals hereto) shall have the
meanings assigned to such terms in (i) the Series 1997-1 Supplement, as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms of the Series 1997-1 Supplement, (ii) the Definitions List
attached as Schedule 1 to the Base Indenture, as in effect on the date hereof,
as such Definitions List may be further amended, supplemented, restated or
otherwise modified from time to time in accordance with the terms of the Base
Indenture, provided that to the extent, if any, that any capitalized term used
but not defined herein has a meaning assigned in both the Series 1997-1
Supplement and the Definitions List to the Base Indenture, then the meaning
assigned to such term in the Series 1997-1 Supple ment shall apply herein, (iii)
the Revolving Credit Agreement, dated as of December , 1997 (the "Revolving
Credit Agreement"), among DTAG, Dollar, Thrifty, various finan cial
institutions, Credit Suisse First Boston, as Administrative Agent, and The Chase
Manhattan Bank, as Syndication Agent, as in effect on the date hereof, and (iv)
the form of Chrysler Support Letter of Credit attached as Exhibit __ to the
Series 1997-1 Letter of Credit Agreement. The term "Material Adverse Effect"
shall be used as defined in the Series 1997-1 Supplement and shall also mean a
material adverse effect on the business, property, operations, assets,
liabilities, condition (financial or otherwise) or prospects of DTAG and its
subsidiaries taken as a whole.
ARTICLE II
ISSUANCE OF CHRYSLER SUPPORT
LETTERS OF CREDIT; REIMBURSEMENT OBLIGATION
Section 2.1. Issuance of Chrysler Letters of Credit; Reduction Amounts.
(a) Chrysler hereby agrees, on the terms and subject to the conditions
hereinafter set forth, to execute and deliver (i) to the Series 1997-1 Letter of
Credit Provider the Chrysler Series 1997-1 Support Letter of Credit in an
initial amount not exceeding $50,000,000 (such amount less the reduction (if
any) set forth in the final sentence of this Section 2.1(a), the
4
<PAGE> 8
"Initial Chrysler Support Amount") for a term expiring on December __, 20021
(the "Chrysler Support Expiration Date") and (ii) in the event the Initial
Chrysler Support Amount is greater than the stated amount of the Chrysler Series
1997-1 Support Letter of Credit (such excess, the "Remaining Amount"), to the CP
Program Letter of Credit Provider a letter of credit in form and substance
substantially similar to the Chrysler Series 1997-1 Support Letter of Credit
(the "CP Program Support Letter of Credit" and, together with the Chrysler
Series 1997-1 Support Letter of Credit, the "Chrysler Support Letters of
Credit") (except that such letter of credit shall also provide for reimbursement
of the CP Program Letter of Credit Provider for "liquidity drawings" made upon
the CP Program Letter of Credit Provider) in a stated amount equal to the
Remaining Amount, which letter of credit shall be reasonably acceptable to the
CP Program Letter of Credit Provider. In the event the letter of credit
described in the preceding clause (ii) is to be delivered to the CP Program
Letter of Credit Provider by Chrysler, the parties hereto agree to use their
best efforts to negotiate a supplement to this Agreement that would contain
terms and conditions governing such letter of credit that are in form and sub
stance substantially similar to the terms and conditions set forth herein
governing the Chrysler Series 1997-1 Support Letter of Credit (except that such
supplement shall contain terms providing for reimbursement of "liquidity" draws
by Dollar Thrifty Fund ing over a period of up to 18 months, the selection of
interest periods and rates with re spect to such drawings, the apportionment of
termination draws between "liquidity" draws and "credit" draws, and the ability
of the trustee with respect to the CP Program (or its agent) to convert
"liquidity" drawings to "credit" drawings all of which terms shall be
substantially similar to those governing any Enhancement Letter of Credit),
which supplement shall be reasonably acceptable to the CP Program Letter of
Credit Provider. In the event the net cash proceeds received by DTAG pursuant to
the exercise by the underwriters and managers of the Equity Offerings of their
options pursuant to Section 3 of the Underwriting Agreement, dated [ ] 1997,
among DTAG, Chrysler, Credit Suisse First Boston Corp., Goldman, Sachs & Co.,
J.P. Morgan Securities Inc. and Solomon Brothers Inc. to purchase additional
shares of Common Stock to cover over-allotments exceeds $10,000,000, the
commitment of Chrysler hereunder to provide a letter of credit or letters of
credit in an aggregate stated amount of $50,000,000 (the "Chrysler Support
Commitment") shall be reduced, not later than 10 business days after receipt of
such over-allotment proceeds, by the amount by which such proceeds (less any
underwriters discount) exceeds $10,000,000 and, in the event the stated amount
of the Chrysler Series 1997-1 Support Letter of Credit exceeds such reduced
commitment, Dollar and Thrifty shall by providing the Series 1997-1 Letter of
Credit Provider with additional collateral or an Additional Series 1997-1
Support Letter of Credit cause the
__________
1. Is that the correct date?
5
<PAGE> 9
Series 1997-1 Letter of Credit Provider to [accept a substitute] [deliver to
Chrysler a reduction certificate to reduce the] Chrysler Series 1997-1 Support
Letter of Credit [in/to] a stated amount equal to such reduced commitment or
otherwise release Chrysler from its obligations under the Chrysler Series 1997-1
Support Letter of Credit, all as provided in the Series 1997-1 Letter of Credit
Agreement. Not later than 10 days after receipt of any over-allotment proceeds
by DTAG, DTAG shall deliver to Chrysler a certificate executed by its chief
financial officer certifying to Chrysler the amount of any such over-allotment
proceeds and related underwriters' discount.
(b) If a successor Series 1997-1 Letter of Credit Provider is
appointed, promptly following the appointment of such successor Series 1997-1
Letter of Credit Provider, and upon receipt of an Instruction to Transfer
substantially in the form of Annex [G] to the Chrysler Series 1997-1 Support
Letter of Credit, Chrysler shall deliver for the benefit of such successor and
the current Series 1997-1 Letter of Credit Provider, in exchange for its
outstanding Chrysler Series 1997-1 Support Letter of Credit, a substitute letter
of credit substantially in the form of Exhibit A hereto having terms
substantially identical to its then outstanding Chrysler Series 1997-1 Support
Letter of Credit, but in favor of such successor.
(c) (i) On September 30, 1999, and on each successive one year
anniversary thereof until the Chrysler Support Expiration Date (each, a
"Reduction Date"), the Chrysler Support Commitment shall be reduced by an amount
equal to the greater of (A) 20% of the Initial Chrysler Support Amount and (B)
50% of Excess Cash Flow (as de fined below) for the calendar year ending
December 31 most recently completed prior to such Reduction Date (the "Support
Reduction Amount"). On or before the date that is 60 days prior to each
Reduction Date, DTAG shall deliver to Chrysler a certificate executed by its
chief financial officer certifying the Support Reduction Amount with respect to
such Reduction Date, which certificate shall include a reasonably detailed
calculation of Excess Cash Flow for the calendar year most recently completed
prior to such Reduction Date. "Excess Cash Flow"2 means, for any such calendar
year of DTAG, an amount equal to the excess of (a) the sum, without duplication,
of (i) consolidated net income of DTAG and its subsidiaries for such fiscal
year, (ii) an amount equal to the amount of all non-cash charges deducted in
arriving at such consolidated net income and (iii) decreases in Consolidated
Working Capital for such year over (b) the sum, without duplication, of (i) the
amount of all non-cash credits included in arriving at such consolidated net in
come, (ii) the aggregate amount actually paid by DTAG and its subsidiaries in
cash during such year on account of capital expenditures (excluding the
principal amount of
______________
2. Chrysler and DTAG to confirm acceptability of this definition.
6
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indebtedness incurred in connection with such capital expenditures, whether
incurred in such year or in another year), (iii) the aggregate amount of all
prepayments of any amounts outstanding under any revolving credit facility to
which DTAG or any of its subsidiaries to the extent accompanied by permanent
reductions thereto, (iv) the aggre gate amount of all principal payments of
indebtedness of DTAG or its subsidiaries (including any term loans and the
principal component of payments in respect of capi talized lease liabilities)
made during such year (other than in respect of any revolving credit facility to
the extent there is not an equivalent permanent reduction in commit ments
thereunder), (v) increases in Consolidated Working Capital for such year, and
(vi) the aggregate net non-cash gain on the sale, conveyance or disposition of
any prop erty or asset by DTAG and its subsidiaries during such year (other than
sales in the ordinary course of business) to the extent included in arriving at
such consolidated net income. As used in this definition, "Consolidated Working
Capital" means, with respect to DTAG, at any date, the excess of (a) the sum of
all amounts (other than cash, cash equivalents and marketable securities) that
would, in conformity with generally accepted accounting principles, be set forth
opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of DTAG and its subsidiaries at such date over (b)
the sum of all amounts that would, in conformity with generally accepted
accounting principles, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of DTAG and
its subsidiaries on such date, but excluding the current portion of any
indebtedness for borrowed money of DTAG and its subsidiar ies that matures more
than one year from the date of its creation or matures within one year from such
date and is renewable or extendable, at the option of DTAG or one of its
subsidiaries, to a date more than one year from such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders
thereunder to extend credit during a period of more than one year from such
date. All accounting terms used in this definition shall be interpreted, and all
accounting determinations and computations set forth in this definition shall be
made, in accordance with, those generally accepted ac counting principles
applied in the preparation of the audited financial statements of DTAG and its
subsidiaries as of December 31, 1996.
(ii) On or before the date that is 60 days prior to each
Reduction Date, pursuant to the terms of the Series 1997-1 Letter of Credit
Agreement, the Lessees shall either (A) cause the delivery to the Series 1997-1
Letter of Credit Provider of an Addi tional Series 1997-1 Support Letter of
Credit in an amount equal to the Support Reduc tion Amount with respect to such
Reduction Date or (B) obtain credit support for the reimbursement of the Series
1997-1 Letter of Credit Provider with (1) the funding of a cash collateral
account for the benefit of the Series 1997-1 Letter of Credit Provider with cash
or (2) a surety bond or other similar arrangements (such other credit support,
"Re-
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<PAGE> 11
duction Amount Credit Support"), in each case in an amount equal to the
Support Reduc tion Amount for the related Reduction Date.
Section 2.2. Fees. (a) Lessees shall pay a usage fee to Chrysler in an
amount equal to [ ]% of the stated amount of any issued and outstanding Chrysler
Letter of Credit.
(b) Lessees shall pay to Chrysler a commitment fee equal to [ ]% of the
excess, if any, of the available amount of the Chrysler Support Commitment over
the stated amount of all outstanding Chrysler Support Letters of Credit.
(c) The fees set forth in Section 2.2(a) and (b) shall be increased by
200 basis points during any period in which the Lessees have failed to provide
the Series 1997-1 Letter of Credit Provider with any additional collateral or
Additional Series 1997-1 Support Letter of Credit when required by Section
2.1(a) or any Reduction Amount Credit Support when required by Section
2.1(c)(ii).
(d) all fees shall be payable to Chrysler quarterly in arrears on the
last business day of each calendar quarter.
Section 2.3. Reimbursement. (a) Each Lessee agrees to pay to Chrysler
on de mand (which demand may be made upon DTAG) with respect to any Support
Credit Disbursement, any Support Termination Disbursement or any Support
Reduction Dis bursement, or any withdrawal from the Chrysler Support Cash
Collateral Account re lating to a Series 1997-1 LOC Credit Disbursement, a
Series 1997-1 LOC Termination Disbursement or a reduction in the Chrysler
Support Commitment, in each case, on the date thereof (provided, that with
respect to any Support Credit Disbursement that is with respect to a Series
1997-1 LOC Credit Disbursement for amounts owed by DTAG under Section [4.19] of
the Series 1997-1 Supplement, such agreement is made solely by DTAG), (i) (A)
with respect to any Support Credit Disbursement (including any with drawal from
the Chrysler Support Cash Collateral Account relating to a Series 1997-1 LOC
Credit Disbursement), an amount equal to the portion of such Support Credit
Disbursement allocable to amounts due and payable by such Lessee under the
Master Lease as determined by [the Trustee] upon any such demand by the Series
1997-1 Letter of Credit Provider or, in the event such Support Credit
Disbursement is in respect of amounts owed by DTAG under Section [4.19] of the
Series 1997-1 Supplement, an amount equal to such amount owed by DTAG, and (B)
with respect to any Support Termination Disbursement or Support Reduction
Disbursement (including any with drawal from the Chrysler Support Cash
Collateral Account relating to a Series 1997-1 LOC Termination Disbursement or a
reduction in the Chrysler Support Commitment),
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jointly and severally, the full amount thereof upon any such demand by the
Series 1997-1 Letter of Credit Provider, plus (ii) interest on any amount
remaining unpaid by such Lessee or otherwise, as the case may be, to Chrysler
under clause (i) above, from (and including) the date of such Support Credit
Disbursement, Support Termination Dis bursement, Support Reduction Disbursement
or withdrawal, as the case may be, until payment in full thereof (after as well
as before judgment), at a rate equal to the Base Rate (as defined below) from
time to time in effect, including paragraph (e) thereof) plus 200 basis points ,
such interest to payable on demand (which demand may be made upon DTAG with
respect to any Lessee) or, if prior to such demand, on the third (3rd) Business
Day of each calendar quarter. 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. "Base Rate" means, on any date, a fluctuating rate of
interest per annum equal to the rate of interest published in the "Wall Street
Journal" on such date as the prime rate for U.S. Dollar loans by major money
center banks.
[(b) Earnings from investments in the Series 1997-1 Cash Collateral
Account shall be paid to Chrysler and the Additional Series 1997-1 Support
Letter of Credit Providers on a pro rata basis based upon their respective
contributions to such account (as determined by the Series 1997-1 Letter of
Credit Provider) to the extent accruing on the amount of a Support Termination
Disbursement by Chrysler or a similar disburse ment by an Additional Series
1997-1 Support Letter of Credit Provider in respect of a Series 1997-1 LOC
Termination Disbursement. Once Chrysler has been reimbursed in full by the
Lessees, it shall assign the right to receive such amounts to the Lessees. Any
amounts (other than earnings on investments) released from the Series 1997-1
Cash Collateral Account in accordance with Section [4.21(d) or (e)] of the
Series 1997-1 Supplement shall be paid to Chrysler and the Additional Series
1997-1 Support Letter of Credit Providers on a pro rata basis (as determined by
the Series 1997-1 Letter of Credit Provider). Once Chrysler has been fully
reimbursed by the Lessees for any Support Credit Disbursements or a Support
Termination Disbursement or any Support Reduction Disbursement or Support Event
of Default Disbursement by the Lessees, it shall assign the right to receive
such amounts to the Lessees. Upon reimbursement in full to Chrysler and the
Additional Series 1997-1 Support Letter of Credit Providers of any such dis
bursement, amounts released from the Series 1997-1 Cash Collateral Account in ac
cordance with Section [4.21(d) or (e)] of the Series 1997-1 Supplement shall be
paid to the Lessees on a pro rata basis up to the amounts paid by the Lessees as
reimbursement for such disbursements.] [Doesn't this go in the Series 1997-1
Letter of Credit Agreement which is binding on LOC provider or in Indenture?]
[(c) After a Support Termination Disbursement or Support Event of
Default Disbursement has been made, any withdrawals made by the Trustee from the
Series
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1997-1 Cash Collateral Account in respect of a Series 1997-1 Lease Payment
Deficit shall be reimbursed to the Series 1997-1 Cash Collateral Account in
accordance with Section [ ] of the Series 1997-1 Supplement.] [Doesn't this go
in the Series 1997-1 Letter of Credit Agreement which is binding on LOC provider
or in Indenture?]
Section 2.4. No Liability of Chrysler. The Lessees and DTAG each
acknowledge that Chrysler is not responsible for any risks of acts or omissions
of the Series 1997-1 Letter of Credit Provider or any other beneficiary or
transferee of the Chrysler Series 1997-1 Support Letter of Credit with respect
to its use of the Chrysler Series 1997-1 Support Letter of Credit. In
furtherance and not in limitation of the foregoing, Chrysler may accept
documents that appear on their face, to be in order, without responsibility for
further investigation.
Section 2.5. Conditions Precedent to Issuance. (a) The following
constitute conditions precedent to the obligation of Chrysler to execute and
deliver to the Series 1997-1 Letter of Credit Provider the Chrysler Series
1997-1 Support Letter of Credit (provided, that such conditions will be deemed
to be satisfied upon the execution and delivery of the Chrysler Series 1997-1
Support Letter of Credit):
(i) On the date of the execution and delivery of the Chrysler
Series 1997-1 Support Letter of Credit, all representations and warranties of
the Lessees and DTAG contained in this Agreement, the Revolving Credit Agreement
and in each other Related Document to which the Lessees or DTAG are a party
(other than representations and warranties relating to Chrysler) shall be true
and correct.
(ii) Chrysler shall have received from each of the Lessees and
DTAG (i) a copy of the resolutions of its Board of Directors or other governing
body, certified as of the Series 1997-1 Closing Date by the secretary or
assistant secretary thereof, authorizing the execution, delivery and performance
of this Agreement (if applicable), the Loan Documents and the other Related
Documents to which it is a party and (ii) an incumbency certificate thereof with
respect to its officers, agents or other representatives authorized to execute
this Agreement (if applicable).
(iii) On the date of the execution and delivery of the Chrysler
Series 1997-1 Support Letter of Credit, there shall be no action, suit,
investigation, litigation or pro ceeding pending against or, to the knowledge of
the Lessees or DTAG, threatened against any of the Lessees or DTAG before any
court or arbitrator or any Governmental Autho rity which in any manner draws
into question the legality, validity or enforceability of this Agreement or any
other Related Document, or the ability of any Lessee or DTAG to
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comply with any of the respective terms thereunder except to the extent that any
such condition is reasonably unlikely to have a Material Adverse Effect.
(iv) All consents and approvals necessary in connection with this
Agree ment or the transactions contemplated hereby or thereby shall have been
obtained and shall remain in effect except to the extent that the failure to do
so is not reasonably likely to have a Material Adverse Effect.
(v) On the date of the execution and delivery of the Chrysler
Series 1997-1 Support Letter of Credit, there shall be no Event of Default under
the Revolving Credit Agreement (as defined therein).
(vi) Chrysler shall have received an opinion, dated the date
hereof, from counsel for DTAG and the Lessees, addressing the due authorization,
execution and de livery of this Agreement and the enforceability thereof against
DTAG and the Lessees.
(vii) The execution and delivery of documents (the "Chrysler
Collateral Support Security Documents") in a form reasonably satisfactory to
Chrysler which shall give Chrysler (a) a first-priority perfected lien on any
"retained interest" of DTAG and its Subsidiaries in RCFC, which lien shall be
pari passu with the lien of the Lenders thereon, (b) a "silent" subordinated
perfected lien in all other assets of DTAG, the Lessees and their respective
subsidiaries in which the Lenders have a senior perfected lien, and (c) a
subordinated perfected lien in the assets pledged as security in respect of the
MTN Pro gram or the CP Program, which lien shall be pari passu with the lien of
the Lenders thereon.
(b) The following constitute conditions precedent to the obligation of
Chrysler to execute and deliver to the CP Program Letter of Credit Provider the
Chrysler CP Program Support Letter of Credit (provided, that such conditions
will be deemed to be satisfied upon the execution and delivery of the Chrysler
CP Program Support Letter of Credit):
(i) Execution by all parties hereto of a supplement to this
agreement as set forth in Section 2.1(a) hereto.
(ii) [ ] days notice from the CP Program Letter of Credit
Provider to Chrysler, including the amount and terms of the requested Chrysler
CP Program Support Letter of Credit.
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(iii) such conditions set forth in paragraph (a) of this
Section as made appli cable mutatis mutandis to the Chrysler CP Program Support
Letter of Credit.
(iv) The execution and delivery of such other opinions and
documents as may reasonably be requested by Chrysler.
Section 2.6. Obligation Absolute. The payment obligations of each
Lessee and DTAG under this Agreement and any other agreement or instrument
relating to the Chrysler Support Letters of Credit shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement and such other agreement or instrument notwithstanding
any of the following:
(a) any lack of validity or enforceability of this Agreement,
any Chrysler Support Letters of Credit or any other Related Document;
(b) any change in the time, manner or place of payment of, or
in any other terms of, all or any of the obligations of any Lessee or
DTAG in respect of any Chrysler Support Letters of Credit or any other
amendment or waiver of, or any consent to departure from, all or any of
the Related Documents;
(c) the existence of any claim, set-off, defense or other
right which any Lessee may have at any time against the Trustee, the
Series 1997-1 Letter of Credit Provider or any other beneficiary or any
transferee of a Chrysler Support Letter of Credit (or any persons or
entities for whom the Trustee, the Series 1997-1 Letter of Credit
Provider, any such beneficiary or any such transferee may be acting) or
any other person or entity (other than Chrysler or any affiliate of
Chrysler), whether in connection with this Agreement, the transactions
contem plated hereby or by the Related Documents or any unrelated
transaction;
(d) any statement or any other document presented under a
Chrysler Sup port Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or
inaccurate in any respect;
(e) any statement or any other document presented under a
Chrysler Sup port Letter of Credit proving to be insufficient in any
respect;
(f) payment by Chrysler under a Chrysler Support Letter of
Credit against presentation of a draft or certificate which does not
comply with the terms of a Chrysler Support Letter of Credit; or
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(g) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure from
any guarantee, for all or any of the obligations of a Lessee or DTAG in
respect of a Chrysler Support Letter of Credit.
Section 2.7. Guaranty.
(a) Guaranty. In order to induce Chrysler to execute and deliver this
Agreement and to issue the Chrysler Support Letters of Credit, and in
consideration thereof, DTAG, in its capacity as the guarantor of the obligations
of the Lessees hereunder (the "Guaran tor"), hereby (i) unconditionally and
irrevocably guarantees to Chrysler the obligations of the Lessees to make any
payments required to be made by them under this Agreement, (ii) agrees to cause
the Lessees to duly and punctually perform and observe all of the terms,
conditions, covenants, agreements and indemnities of the Lessees under this
Agreement, and (iii) agrees that, if for any reason whatsoever, any Lessee fails
to so perform and observe such terms, conditions, covenants, agreements and
indemnities, the Guarantor will duly and punctually perform and observe the same
(the obligations re ferred to in clauses (i) through (iii) above are
collectively referred to as the "Guaranteed Obligations"). The liabilities and
obligations of the Guarantor under the guaranty con tained in this Section 2.7
(this "Guaranty") will be absolute and unconditional under all circumstances.
This Guaranty shall be a guaranty of payment and not of collection, and the
Guarantor hereby agrees that it shall not be required that Chrysler, the Series
1997-1 Letter of Credit Provider or the Trustee assert or enforce any rights
against any Lessee or any other person before or as a condition to the
obligations of the Guarantor pursuant to this Guaranty.
(b) Scope of Guarantor's Liability. The Guarantor's obligations
hereunder are independent of the obligations of the Lessees, any other guarantor
or any other Person, and Chrysler may enforce any of its rights hereunder
independently of any other right or remedy that Chrysler may at any time hold
with respect to this Agreement or any security or other guaranty therefor.
Without limiting the generality of the foregoing, Chrysler may bring a separate
action against the Guarantor without first proceeding against any of the
Lessees, any other guarantor or any other Person, or any security held by
Chrysler, and regardless of whether the Lessees or any other guarantor or any
other Person is joined in any such action. The Guarantor's liability hereunder
shall at all times remain effective with respect to the full amount due from the
Lessees hereunder. Chrysler's rights hereunder shall not be exhausted by any
action taken by Chrysler until all Guaran teed Obligations have been fully paid
and performed.
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(c) Right to Amend this Agreement. The Guarantor authorizes Chrysler at
any time and from time to time without notice and without affecting the
liability of the Guarantor hereunder, to: (a) alter the terms of all or any part
of the Guaranteed Obliga tions and any security and guaranties therefor
including without limitation modification of times for payment and rates of
interest; (b) accept new or additional instruments, documents, agreements,
security or guaranties in connection with all or any part of the Guaranteed
Obligations; (c) accept partial payments on the Guaranteed Obligations; (d)
waive, release, reconvey, terminate, abandon, subordinate, exchange, substitute,
transfer, compound, compromise, liquidate and enforce all or any part of the
Guaranteed Obliga tions and any security or guaranties therefor, and apply any
such security and direct the order or manner of sale thereof (and bid and
purchase at any such sale), subject to the terms of the Intercreditor Agreement
dated December __, 1997, between, DTAG, Dollar, Thrifty, Chrysler and Credit
Suisse First Boston, as administrative agent and collateral agent; (e) release
any Lessee, any guarantor or any other Person from any personal liability with
respect to all or any part of the Guaranteed Obligations; and (f) assign its
rights under this Guaranty in whole or in part.
(d) Waiver of Certain Rights by Guarantor. The Guarantor hereby waives
each of the following to the fullest extent allowed by law:
(i) any defense based upon:
(A) the unenforceability or invalidity of any security or
other guaranty for the Guaranteed Obligations or the
lack of perfection or failure of priority of any
security for the Guaranteed Obligations; or
(B) any act or omission of Chrysler or any other Person
that directly or indirectly results in the discharge
or release of any of the Lessees or any other Person
or any of the Guaranteed Obligations or any security
therefor; or
(C) any disability or any other defense of any Lessee or
any other Person with respect to the Guaranteed
Obligations, whether consensual or arising by
operation of law or any bankruptcy, insolvency or
debtor-relief proceeding, or from any other cause;
(ii)any right (whether now or hereafter existing) to require
Chrysler, as a condition to the enforcement of this Guaranty, to:
(A) accelerate the Guaranteed Obligations;
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(B) give notice to the Guarantor of the terms, time and
place of any public or private sale of any security
for the Guaranteed Obligations; or
(C) proceed against any Lessee, any other guarantor or
any other Person, or proceed against or exhaust any
security for the Guaranteed Obligations;
(iii) presentment, demand, protest and notice of any kind,
including without limitation notices of default and notice of
acceptance of this Guaranty;
(iv) all suretyship defenses and rights of every nature
otherwise available under New York law and the laws of any other
jurisdiction; and
(v) all other rights and defenses the assertion or exercise of
which would in any way diminish the liability of the Guarantor
hereunder.
(e) Guarantor to Pay Chrysler's Expenses. The Guarantor agrees to pay
to Chrysler , on demand, all costs and expenses, including reasonable attorneys'
and other professional and paraprofessional fees, incurred by Chrysler in
exercising any right, power or remedy conferred by this Guaranty, or in the
enforcement of this Guaranty, whether or not any action is filed in connection
therewith.
(f) Reinstatement. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time payment of any of the amounts
payable by any Lessee under this Agreement is rescinded or must otherwise be
restored or returned by Chrysler , upon an event of bankruptcy, dissolution,
liquidation or reorganization of any Lessee or the Guarantor or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, any Lessee, the Guarantor, any other guarantor
or any other Person, or any substantial part of their respective property, or
otherwise, all as though such payment had not been made.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 3.1. Representations and Warranties of the Lessees and DTAG.
Each of the Lessees hereby represents and warrants (which representations and
warranties shall be deemed made on the Series 1997-1 Closing Date) to Chrysler,
as to itself, and DTAG
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represents and warrants (which representations and warranties shall be deemed
made on the Series 1997-1 Closing Date) to Chrysler, as to itself and each of
the Lessees, that:
(a) Organization; Ownership; Power; Qualification. The Lessees
and DTAG are each (i) a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation and (ii) has the corporate power and authority to own its
properties and to carry on its business as now being and hereafter
proposed to be conducted.
(b) Authorization; Enforceability. The Lessees and DTAG each
has the corporate power and has taken all necessary corporate action to
authorize it to execute, deliver and perform this Agreement and each of
the Chrysler Credit Support Security Documents in accordance with its
terms, and to consummate the transactions contemplated hereby. This
Agreement and each of the Chrysler Credit Support Security Documents
has been duly executed and delivered by each of such Lessees and DTAG
and is a legal, valid and binding obligation of each of such Lessees
and DTAG, enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization and similar laws
affecting creditors generally and by the availability of equitable
remedies.
(c) Compliance. (i) The execution, delivery and performance by
each of such Lessees and DTAG of this Agreement and each of the
Chrysler Credit Support Security Documents, and the consummation of the
transactions contemplated hereby, do not and will not (A) require any
consent, approval, authorization or registration not already obtained
or effected, except where the failure to obtain any such consent,
approval or authorization or to register is not reasonably likely to
have a Material Adverse Effect, (B) violate any applicable law with
respect to each of such Lessees which violation is reasonably likely to
have a Material Adverse Effect, (C) conflict with, result in a breach
of, or constitute a default under the certificate of incorporation or
by-laws of any of the Lessees or DTAG, or under any indenture,
agreement, or other instrument to which any of such Lessees or DTAG is
a party or by which its properties may be bound, which conflict, breach
or default is reasonably likely to have a Material Adverse Effect, or
(d) result in or require the creation or imposition of any Lien upon or
with respect to any property now owned or hereafter acquired by any of
such Lessees or DTAG except Permitted Liens.
(d) Revolving Credit Agreement. Each of the
representations and warranties under the Revolving Credit Agreement
and the other Loan Documents are true and correct.
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Section 3.2. Covenants of the Lessees and DTAG. So long as the Chrysler
Support Commitment is still in full force and effect or any amount is owing to
Chrysler hereunder, each of the Lessees and DTAG agrees that, unless at any time
Chrysler shall otherwise expressly consent in writing, it will, and in the case
of DTAG it will cause the Lessees to:
(a) Preservation of Existence; Foreign qualification. 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 entity 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.
(b) Accounting Methods; Financial Records. Maintain, and
cause its material Subsidiaries to maintain, a system of accounting
established and administered in accordance with GAAP, keep, and cause
its material Subsidiaries to keep, adequate records and books of
account in which complete entries will be made in accordance with such
accounting principles and reflecting all transactions required to be
reflected by such accounting principles and keep, and cause its
material Subsidiaries to keep, accurate and complete records of the
Lessees's properties and assets.
(c) Financial Information, Reports, Notices, etc. Furnish
or cause to be furnished to Chrysler financial statements, reports,
notices and information as set forth in Section 8.1.1 of the Revolving
Credit Agreement.
(d) Performance and Compliance with Covenants Incorporated
by Reference. Perform and comply with each of the covenants contained
in the Revolving Credit Agreement (or any other financing arrangement
which may replace the Revolving Credit Agreement) and the Master Leases
(collectively, the "DTAG Financing Agreements")
(e) No Amendment. Obtain the consent or approval of
Chrysler (which shall not be unreasonably withheld) to (i) the terms of
the initial CP Program Documents and (ii) the amendment of any of the
Related Documents or any of the CP Program Documents.
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(f) Board Representation.
(i) Subject to its fiduciary duties, DTAG's Board of
Directors will nominate any person designated by Chrysler for
election at each meeting (or in each action by written consent
in lieu of a meeting) of stockholders of DTAG for the election
of directors; provided that such person (A) has recognized
standing in the business community, (B) is not a former
director, officer or employee of DTAG but may be an officer of
Chrysler and its subsidiaries and (C) does not have a conflict
of interest with DTAG; it being understood that DTAG agrees
that Thomas Capo would be an acceptable Chrysler designee. The
[Governance Committee] will fill any vacancy created on the
Board of Directors as a result of the resignation or removal
of a director designated by Chrysler with any person
designated by Chrysler who satisfies the criteria set forth
herein.
(ii) Use its best efforts to cause the person nominated as
provided in this Section 3.2(f) to be elected by the
stockholders of DTAG, will solicit proxies in favor of such
individual or any such successor and cause [its Governance
Committee] to vote all proxies in which it has discretionary
authority to exercise on behalf of such person at each meeting
(or in each action by written consent in lieu of a meeting) of
stockholders of DTAG.
(g) Credit Support Event of Default; Remedies Upon
Occurrence of Credit Support Event of Default.
(i) A breach of any obligation hereunder, any Event of
Default under the DTAG Financing Agreements or an Amortization Event shall
constitute a Credit Support Event of Default.
(ii) Upon the occurrence of a Credit Support Event of
Default:
(A) an amount equal to any undrawn portion of any
Chrysler Support Letter of Credit outstanding shall, at the election of
Chrysler without demand upon or notice to DTAG or any Lessee, be deemed to
have been paid or disbursed (notwithstanding that such amount may not in fact
have been so paid or disbursed), and, upon notification by Chrysler to DTAG,
DTAG and the Lessees shall be immediately obligated to reimburse Chrysler the
amount deemed to have been so paid or disbursed by Chrysler as if a demand had
been made by Chrysler to DTAG under Section 2.2 hereof.
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Any amounts so received by Chrysler from DTAG or the Lessees pursuant to this
Section shall be held as collateral security for the repayment of DTAG's or the
Lessees' obliga tions in connection with the Chrysler Support Letters of Credit
(provided, that with respect to any Support Credit Disbursement that is with
respect to a Series 1997-1 LOC Credit Disbursement for amounts owed by DTAG
under Section [4.19] of the Series 1997-1 Supplement, such obligation is solely
the obligation of DTAG). At any time when all Chrysler Support Letters of Credit
shall terminate and all its obligations thereunder are either terminated or paid
or reimbursed in full, (subject, however, to reinstatement in the event any
payment in respect of such Letters of Credit is recovered in any manner from
Chrysler), Chrysler will return to DTAG or the Lessees the aggregate amount
deposited with Chrysler and not theretofore applied by Chrysler to any
reimbursement obligation hereunder. At such time when all Credit Support Events
of Default shall have been cured or waived, Chrysler shall return to DTAG and
the Lessees all amounts then on deposit with Chrysler pursuant to this Section.
Earnings on all amounts on deposit pursuant to this Section shall, until their
application to any reimbursement obligation or their return to DTAG or the
Lessees, as the case may be, shall be held by Chrysler as additional collateral
security for the repayment of DTAG's or each Lessee's obligations in connection
with the Letters of Credit issued by Chrysler.
[(B) The Chrysler Support Commitment shall terminate;]
(C) Subject to the terms of the Intercreditor Agreement Chrysler
shall be entitled to exercise all of its remedies under the Credit Support
Security Docu ments; and
(D) Chrysler may exercise all other remedies available to it
under law.
Section 3.3. Chrysler Covenants. Chrysler covenants and agrees with the
Lessees and DTAG that, on the Series 1997-1 Closing Date, it will provide to the
Trus tee, DTAG, each of the Lessees, and the Series 1997-1 Letter of Credit
Provider, the favorable written opinion of counsel to Chrysler, addressing the
due authorization, execution and delivery of the Chrysler Series 1997-1 Support
Letter of Credit and the enforceability thereof against Chrysler.
19
<PAGE> 23
ARTICLE IV
MISCELLANEOUS
Section 4.1. Payments. (a) Unless otherwise specified herein, all
payments to Chrysler hereunder shall be made in lawful currency of the United
States and in immediately available funds prior to 11:00 a.m. (New York City
time) on the date such payment is due by wire transfer to Chrysler, Account No.
________ at _____________, or to such other office or account maintained by
Chrysler as Chrysler may direct.
(b) Whenever any payment under this Agreement shall be stated to be due
on a day which is not a Business Day, unless otherwise stated herein, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in computing interest, if any, in connection
with such payment.
Section 4.2. 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 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 property 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 Chrysler:
Attention:
Telephone:
Telecopier:
20
<PAGE> 24
If to the Series 1997-1 Letter of Credit Provider:
Credit Suisse First Boston
Eleven Madison Avenue
New York, New York 10010
Attention:
Telephone:
Telecopier:
If to DTAG:
Attention:
Telephone:
Telecopier:
If to any of the Lessees: To the address of such Lessee set forth in
Schedule 1 hereof.
Section 4.3. Amendments, etc. This Agreement and the rights and
obligations of the parties hereunder may not be changed orally but only by an
instrument in writing signed by each party hereto and shall be construed in
accordance with and governed by the laws of the State of New York. In the event
of any conflict between the provisions of this Agreement and the Chrysler Series
1997-1 Support Letter of Credit, the provisions of the Chrysler Series 1997-1
Support Letter of Credit shall control.
Section 4.4. Consent to Jurisdiction. ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST CHRYSLER , DTAG OR ANY LESSEE WITH RESPECT TO THIS AGREEMENT
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY 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 CHRYSLER , DTAG, AND THE
LESSEES EACH ACCEPT FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY
AND
21
<PAGE> 25
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT. EACH OF THE LESSEES AND DTAG AGREES THAT SERVICE UPON IT BY
REGISTERED MAIL SHALL CONSTITUTE SERVICE OF PROCESS IN ANY SUCH PROCEEDINGS IN
ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY DTAG AND EACH OF THE
LESSEES 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 CHRYSLER TO BRING PROCEEDINGS AGAINST THE LESSEES OR
DTAG IN THE COURTS OF ANY OTHER JURISDICTION.
Section 4.5. Waiver of Jury Trial. CHRYSLER , DTAG AND THE LESSEES
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 COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF CHRYSLER , DTAG
OR THE LESSEES IN CONNECTION HEREWITH OR THEREWITH. CHRYSLER , THE LESSEES AND
DTAG EACH ACKNOWLEDGE AND AGREE THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR CHRYSLER ENTERING INTO THIS AGREEMENT.
Section 4.6. Governing Law. THIS AGREEMENT SHALL BE DEEMED
TO BE AN AGREEMENT MADE UNDER, AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
Section 4.7. Severability. Any provision of this Agreement that 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 and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 4.8. Term. This Agreement shall remain in full force and
effect until the reimbursement of all Support Credit Disbursements, Support
Termination Disbursements, Support Reduction Disbursements and Support Event
of Default
22
<PAGE> 26
Disbursements, and the payment by DTAG and the Lessees of all other amounts
payable hereunder, notwithstanding the earlier termination of the Chrysler
Series 1997-1 Support Letter of Credit or any other form of credit support
provided by Chrysler hereunder.
Section 4.9. Successors and Assigns. This Agreement shall be binding
upon Chrysler and its successors and assigns, DTAG and its successors and
assignees and the Lessees and their successors and assigns; provided, however,
that none of DTAG or the Lessees may transfer or assign any of its obligations,
rights, or interests hereunder without the prior written consent of Chrysler.
Section 4.10. Counterparts. This Agreement may be executed in any
number of counterparts, and by the different parties hereto on the same or
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 4.11. Further Assurances. DTAG and the Lessees each agree to do
such further acts and things and to execute and deliver to Chrysler such
additional assignments, agreements, powers and instruments as are reasonably
required by Chrysler to carry into effect the purposes of this Agreement or to
better assure and confirm to Chrysler its rights, powers and remedies hereunder.
Section 4.12. Survival of Obligations. The obligations of DTAG and the
Lessees under Sections 2.2, 2.6, 2.7, 4.1 and 4.2 shall in each case survive any
termination of this Agreement, the payment in full of all obligations hereunder
and the termination of the Chrysler Series 1997-1 Support Letter of Credit or
any other form of credit support provided by Chrysler hereunder.
Section 4.13. Obligation. Chrysler, DTAG and each of the Lessees each
under stands and agrees that the Chrysler Support Letters of Credit is
irrevocable and the obli gations of Chrysler thereunder shall be unaffected by
any default hereunder. None of the failure of DTAG or any of the Lessees (or any
person or organization acting on behalf of either) or the Trustee or the Series
1997-1 Letter of Credit Provider to take any action (whether required hereunder
or under any other Related Document otherwise), nor any action taken by DTAG or
any of the Lessees shall be asserted by Chrysler as a defense to payment under a
Chrysler Support Letter of Credit (except for the failure of any docu ments
presented thereunder to comply with the terms of a Chrysler Support Letter of
Credit) or as the basis of a right of set off by Chrysler against its
obligations to make any such payment.
23
<PAGE> 27
Section 4.14. Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 4.15. Application of Funds. Upon receipt of the deposited funds
from the Series 1997-1 Cash Collateral Account pursuant to Section [4.21] of the
Series 1997- 1 Supplement, Chrysler shall apply such amounts to the payment in
full of any and all obligations of the Lessees under or in respect of the
Chrysler Series 1997-1 Support Letter of Credit hereunder; any amounts remaining
thereafter shall be returned to the Lessees or to whomever is legally entitled
thereto.
Section 4.16. Subordination of Obligations Pursuant to Intercreditor
and Subordination Agreement. The parties hereto hereby acknowledge and agree
that the obligations of DTAG and each of the Lessees represented hereby are
subject to the terms and provisions of the Intercreditor and Subordination
Agreement which, among other things, contains provisions subordinating to the
prior payment in full, in cash, of the obligations hereunder of DTAG and each of
the Lessees to the obligations of DTAG and each of the Lessees to the holders of
Senior Debt (as defined in the Intercreditor and Subordination Agreement) in the
manner provided in the Intercreditor and Subordination Agreement, to which
provisions each of the parties hereunder agrees.
[Remainder of Page Intentionally Blank]
24
<PAGE> 28
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, as of the day and year first
above written.
CHRYSLER CORPORATION
By:__________________________
Name:
Title:
DOLLAR THRIFTY AUTOMOTIVE
GROUP, INC.
By: _________________________
Name:
Title:
S-1
<PAGE> 29
LESSEES:
DOLLAR RENT A CAR SYSTEMS, INC.
By: _____________________________
Name:
Title:
THRIFTY RENT-A-CAR SYSTEM, INC.
By: _____________________________
Name:
Title:
S-2
<PAGE> 30
Exhibit A
[Included for illustrative purposes; to be moved to
1997-1 Support of Letter of Credit Agreement]
FORM OF CHRYSLER SERIES 1997-1 SUPPORT LETTER OF CREDIT
[Disbursements. (a) Upon presentation by the Series 1997-1 Letter of
Credit Provider to Chrysler of a certificate in the form of Annex A hereto (a
"Support Credit Demand"), Chrysler shall make a disbursement (such disbursement,
a "Support Credit Disbursement") in an amount equal to its Pro Rata Share (as
defined below) of the amount drawn upon the Series 1997-1 Letter of Credit (as
determined by the Series 1997-1 Letter of Credit Provider) as a Series 1997-1
LOC Credit Disbursement at the time, in the manner and to the account specified
herein. "Pro Rata Share" means, for purposes of this Letter of Credit, with
respect to Chrysler as of any date, a fraction (expressed as a percentage)
obtained by dividing the Available Chrysler Support Amount as of such date by an
amount equal to the sum of (i) the Available Chrysler Support Amount as of such
date and (ii) the aggregate amount of the Support Letter of Credit Amounts of
all the Additional Series 1997-1 Support Letter of Credit Providers under all
Series 1997-1 Support Letters of Credit as of such date, provided that for
purposes of calculating the Pro Rata Share with respect to Chrysler as of any
date, the [Support Letter of Credit Amount (as defined in the related Series
1997-1 Support Letter of Credit) as of such date of any Additional Series 1997-1
Support Letter of Credit Provider who has not paid any Support Credit Demand,
Support Termination Demand or Support Termination Demand for Nonextension (in
each case as defined in the related Series 1997-1 Support Letter of Credit as of
such date)]3 payable as of such date (and the Available Chrysler Support Amount
as of such date if Chrysler has not paid any Support Credit Demand, Support
Termination Demand or Support Reduction Demand (in each case as defined in
Chrysler Series 1997-1 Support Letter of Credit) payable as of such date) shall
be treated as reduced (for calculation purposes only) by the amount of such
unpaid [Support Credit Demand, Support Termination Demand, Support Termination
Demand for Nonextension or Support Reduction Demand], as the case may be, in
making such calculation and shall not be treated as reinstated for purposes of
such calculation unless and until the date as of which such Series 1997-1
Support Letter of Credit Provider or Chrysler, as the case may be, has paid such
amount to the Series 1997-1 Letter of Credit Provider and has been
_______________
3. May need to provide alternative in the event no other Series 1997-1
Support Letters of Credit are in place on the effective date of this
Agreement. (comment of Sal Guerrera)
S-3
<PAGE> 31
reimbursed by the Lessees or DTAG, as the case may be, for such amount
(provided, that the foregoing calculation shall not in any manner reduce the
undersigned's actual liability in respect of any failure to pay any such Support
Credit Demand, Support Termination Demand or Support Reduction Demand, as the
case may be).
(b) Upon presentation by the Series 1997-1 Letter of Credit Provider
to Chrysler of a certificate in the form of Annex B hereto (a "Support
Termination Demand"), Chrysler shall make a disbursement in an amount equal to
the Available Chrysler Support Amount on the date of such certificate (such
disbursement, a "Support Termination Disbursement") in an amount equal to its
Pro Rata Share of the amount drawn upon the Series 1997-1 Letter of Credit (as
determined by the Series 1997-1 Letter of Credit Provider) as a Series 1997-1
LOC Termination Disbursement at the time, in the manner and to the account
specified herein.
[(c) Upon presentation by the Series 1997-1 Letter of Credit Provider
to Chrysler of a certificate in the form of Annex C hereto (a "Support Reduction
Demand"), Chrysler shall make a disbursement (such disbursement, a "Support
Reduction Disbursement") at the time, in the manner and to the account specified
herein.]4
(d) Upon presentation by the Series 1997-1 Letter of Credit Provider
to Chrysler of a certificate in the form of Annex D hereto (a "Support Event of
Default Demand"), Chrysler shall make a disbursement (such disbursement, a
"Support Event of Default Disbursement") equal to then Available Chrysler
Support Amount, which disbursement shall be deposited in a cash collateral
account with the Series 1997-1 Letter of Credit Provider (the "Chrysler Support
Cash Collateral Account"). When established, the Chrysler Support Cash
Collateral Account shall function in all respects as the replacement for, and
the equivalent of, the Chrysler Series 1997-1 Support Letter of Credit.
Accordingly, following its creation, each reference to a draw on the Chrysler
Series 1997-1 Support Letter of Credit shall refer to withdrawals from the
Chrysler Support Cash Collateral Account and reference to similar terms shall
mean and be a reference to actions taken with respect to the Chrysler Support
Cash Collateral Account that corresponds to actions that otherwise would have
been taken with respect to the Chrysler Series 1997-1 Support Letter of Credit.]
______________
4. Chrysler should have the option to defer reduction in support of LOC to
avoid this draw.
S-4
<PAGE> 1
EXHIBIT 5
[Debevoise & Plimpton Letterhead]
December 15, 1997
Dollar Thrifty Automotive Group, Inc.
5330 East 31st Street
Tulsa, Oklahoma 74135
Registration Statement on Form S-1
(Registration No. 333-39661)
Ladies and Gentlemen:
We have acted as counsel to Dollar Thrifty Automotive Group, Inc., a
Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "1933 Act"), of a Registration Statement
on Form S-1 (Registration No. 333-39661) (the "Registration Statement"),
relating to 22,500,000 shares of the Company's Common Stock, par value $.01 per
share (the "Common Stock"), being offered by the Company, and an additional
3,375,000 shares solely to cover over-allotments (collectively, the "Shares").
In so acting, we have examined and relied upon the originals, or
copies certified or otherwise identified to our satisfaction, of such records,
documents, certificates and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinion expressed below.
<PAGE> 2
Dollar Thrifty Automotive 2 December 15, 1997
Group, Inc.
Based upon the foregoing, we are of the opinion that, upon issuance
and delivery of the Shares and payment therefor in the manner described in the
Registration Statement and in accordance with the terms of the underwriting
agreements (the forms of which are being filed as Exhibits 1.1 and 1.2 to the
Registration Statement), the Shares will be duly authorized, validly issued and
outstanding, and fully paid and non-assessable.
Our opinion expressed above is limited to the laws of the State of
New York, the corporate laws of the State of Delaware and the Federal laws of
the United States of America.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the use of our name under the caption "LEGAL
MATTERS" in the Prospectus. In giving such consent, we do not thereby concede
that we are within the category of persons whose consent is required under
Section 7 of the 1933 Act or the Rules and Regulations of the Commission
thereunder.
Very truly yours,
/s/ Debevoise & Plimpton
-----------------------------
<PAGE> 1
EXHIBIT 10.10
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
<PAGE> 2
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
INDEX
SECTION DESCRIPTION
------- -----------
1 Purpose of the Plan
2 Definitions
3 Types of Awards Covered
4 Administration
5 Eligibility
6 Shares of Stock Subject to the Plan
7 Stock Options
8 Stock Appreciation Rights
9 Restricted Stock
10 Performance Awards
11 Other Stock-Based Incentive Awards
12 Exercise of Options
13 Rights in Event of Death or Disability
14 Award Agreements
15 Tax Withholding
16 Change of Control
17 Dilution or Other Adjustment
18 Transferability
19 Amendment or Termination
20 General Provisions
21 Plan Effective Date
22 Plan Termination
<PAGE> 3
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
SECTION 1
PURPOSE OF THE PLAN
1.1 The Long-Term Incentive Plan, maintained by Dollar Thrifty Automotive
Group, Inc., is intended to motivate key employees to enhance
shareholder value by offering incentives to its key employees who are
primarily responsible for the growth of the Company and to attract and
retain qualified employees.
SECTION 2
DEFINITIONS
2.1 Unless the context indicates otherwise, the following terms, when used
in this Plan, shall have the meanings set forth below:
a) "AWARD" shall mean grants or awards under this Plan in the form
of Options, SARs, Restricted Stock, Performance Awards or other
stock-based incentive awards.
b) "BOARD" or "BOARD OF DIRECTORS" shall mean the Board of
Directors of the Company.
c) "CHANGE OF CONTROL" shall be deemed to have taken place on an
occurrence of an event as defined in Section 16 of this Plan.
d) "CODE" shall mean the Internal Revenue Code of 1986 as it may
be amended from time to time and related Treasury Regulations.
e) "COMMITTEE" shall mean the Board, or any Committee comprised of
two or more Outside Directors, that may be designated by the
Board to administer the Plan, in accordance with Section 4
hereof.
f) "COMMON STOCK" shall mean the common stock, par value $.01 per
share, of the Company.
g) "COMPANY" shall mean Dollar Thrifty Automotive Group, Inc.
<PAGE> 4
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
h) "DEFERRED SHARES" shall mean an award made pursuant to Section
11 of the Plan of the right to receive Common Stock in lieu of
cash thereof at the end of a specified time period.
i) "DIRECTOR" shall mean any member of the Board.
j) "DISABILITY" shall mean permanent and total disability within
the meaning of Section 22(e)(3) of the Code.
k) "EMPLOYEE" shall mean any full-time employee of the Company or
its Subsidiaries (including Directors who are otherwise
employed on a full-time basis by the Company or its
Subsidiaries).
l) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934
as it may be amended from time to time.
m) "FAIR MARKET VALUE" of the Common Stock on a given date shall
be based upon either (i) if the Common Stock is listed on a
national securities exchange or quoted in an interdealer
quotation system, the last sales price or, if unavailable, the
average of the closing bid and asked prices per share of the
Common Stock on such date (or, if there was no trading or
quotation in the Common Stock on such date, on the next
preceding date on which there was trading or quotation) as
provided by one of such organizations or (ii) if the Common
Stock is not listed on a national securities exchange or quoted
in an interdealer quotation system, the price will be equal to
the Company's fair market value, as determined by the Committee
in good faith based upon the best available facts and
circumstances at the time.
n) "GRANTEE" shall mean a person granted an Award under the Plan.
o) "IMMEDIATE FAMILY" shall mean with respect to a given Grantee
that Grantee's spouse, children, or grandchildren (including
adopted children or grandchildren).
p) "IPO DATE" shall mean the date of closing of the initial public
offering of the Common Stock.
q) "ISO" shall mean an Award granted pursuant to the Plan to
purchase shares of Common Stock and is intended to qualify as
an incentive stock option under Section 422 of the Code, as now
or hereafter constituted.
2
<PAGE> 5
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
r) "NON-EMPLOYEE DIRECTOR" shall mean a Director of the Company
who is not an Employee nor has been an Employee at any time
during the prior one-year period.
s) "NQSO" shall mean an Award granted pursuant to the Plan to
purchase shares of Common Stock and is not intended to qualify
as an incentive stock option under Section 422 of the Code, as
now or hereafter constituted.
t) "OPTIONS" shall refer collectively to NQSOs and ISOs issued
under and subject to the Plan.
u) "OUTSIDE DIRECTOR" shall mean an outside director within the
meaning of Section 162(m) of the Code and the regulations
thereunder.
v) "PERFORMANCE AWARDS" shall mean Awards under the Plan, payable
in cash, Common Stock, other securities or other awards and
shall confer on the holder thereof the right to receive
payments, upon the achievement of such performance goals during
such performance periods as the Committee shall establish.
w) "PERMITTED TRANSFEREE" shall mean any individual or entity as
defined in Section 18.2 of this Plan.
x) "PLAN" shall mean this Dollar Thrifty Automotive Group, Inc.
Long-Term Incentive Plan as set forth herein and as amended
from time to time.
y) "RESTRICTED STOCK" shall mean an Award of Common Stock subject
to restrictions on transfer and/or such other restrictions on
incidents of ownership as the Committee may determine.
z) "RULES" shall mean Rule 16(b)(3) and any successor provisions
promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act.
aa) "SAR" shall mean an Award constituting the right to receive an
amount payable in cash under Section 8 of this Plan.
bb) "SUBSIDIARY OR SUBSIDIARIES" shall mean any entity or entities
in which the Company owns a majority of the voting power.
3
<PAGE> 6
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
cc) "TEN PERCENT SHAREHOLDER" shall mean any Grantee who owns more
than 10% of the combined voting power of all classes of stock
of the Company, within the meaning of Section 422 of the Code.
SECTION 3
TYPES OF AWARDS COVERED
3.1 Awards granted, under the Plan may be:
a) stock options ("Options") which may be designated as:
(i) nonqualified stock options ("NQSOs"); or
(ii) incentive stock options ("ISOs");
b) stock appreciation rights ("SARs");
c) restricted stock awards ("Restricted Stock");
d) performance awards ("Performance Awards"); or
e) other forms of stock-based incentive awards.
SECTION 4
ADMINISTRATION
4.1 The Plan shall be administered by the Committee. Subject to the
provisions of the Plan and applicable law, the Committee shall have
full discretion and the exclusive power to:
a) select the Employees who will participate in the Plan and to
make Awards to such Employees;
b) determine the time at which such Awards shall be granted and
any terms and conditions with respect to such Awards as shall
not be inconsistent with the provisions of the Plan; and
c) resolve all questions relating to the administration of the
Plan, and applicable law.
4
<PAGE> 7
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
4.2 The interpretation of and application by the Committee of any
provision of the Plan shall be final and conclusive. The Committee,
in its sole discretion, may establish such rules and guidelines
relating to the Plan as it may deem appropriate.
4.3 The Committee may employ such legal counsel, consultants, and agents
as it may deem desirable for the administration of the Plan and may
rely upon any opinion received from any such counsel or consultant and
any computation received from any such consultant or agent. The
Committee shall keep minutes of its actions under the Plan.
4.4 No member of the Board of Directors or the Committee shall be liable
for any action or determination made in good faith with respect to the
Plan or any Awards granted hereunder. All members of the Committee
shall be fully protected by the Company with respect to any such
action, determination or interpretation.
SECTION 5
ELIGIBILITY
5.1 The individuals who shall be eligible to participate in the Plan shall
be Directors, officers, management, and such other key Employees of
the Company and Subsidiaries as the Committee may from time to time
determine.
5.2 An Employee or Director who has been granted an Award in one year
shall not necessarily be entitled to be granted Awards in subsequent
years.
SECTION 6
SHARES OF STOCK SUBJECT TO THE PLAN
6.1 Awards may be granted with respect to the Common Stock of the Company.
6.2 Shares delivered upon exercise of the Awards, at the election of the
Board of Directors or the Committee, may be Common Stock that is
authorized but previously unissued, or stock reacquired by the
Company, or both.
6.3 Subject to the provisions of Section 17, the maximum number of shares
available for issuance under the Plan shall be ten percent (10%) of
the total number of
5
<PAGE> 8
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
shares of Common Stock outstanding as of the IPO Date. As such shares
outstanding increase subsequent to the IPO Date (which limit shall be
determined without considering as outstanding any shares that are the
subject of any unexercised options under the Plan or any other option
plan of the Company or any Shares owned by the Company or any of its
subsidiaries) such shares available for issuance under the Plan shall
increase proportionately; provided, however, that the maximum number
of Shares for which ISOs may be granted under the Plan shall not
exceed five percent (5%) of the Company's outstanding Shares (which
number is subject to adjustment as provided in Section 17). The
number of shares of Common Stock reserved under the Plan shall not be
less than the total number of shares granted, whether exercised or
unexercised, for all Awards under the Plan.
6.4 Notwithstanding any other provision of the Plan to the contrary, in no
event may any Grantee in any calendar year receive more than 200,000
Options whether they be ISOs or NQSOs, subject to adjustments as
provided in Section 17 of the Plan.
6.5 Notwithstanding any other provision of the Plan to the contrary, in no
event may any Grantee in any calendar year receive more than 500,000
SARs, subject to adjustments as provided in Section 17 of the Plan.
6.6 Notwithstanding any other provision of the Plan to the contrary, in no
event may any Grantee in any calendar year receive an award of
Performance Awards having an aggregate maximum value as of their
respective dates of grant in excess of $1,000,000.
6.7 Any shares of Common Stock awarded under the Plan, which Award for any
reason expires or is terminated unexercised as to such shares, shall
again be available for the grant of other Awards under the Plan;
provided, however, that forfeited shares or other securities shall not
be available for further Awards if the Grantee has realized any
benefits of ownership from such shares.
SECTION 7
STOCK OPTIONS
7.1 The Committee may grant Options, as follows, which shall be evidenced
by a stock option agreement and may be designated as (i) NQSOs or (ii)
ISOs:
6
<PAGE> 9
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
a) NQSOS
(i) An NQSO is a right to purchase a specified number
of shares of Common Stock during such time as the
Committee may determine, not to exceed ten years,
at a price determined by the Committee that is not
less than the Fair Market Value of the Common Stock
on the date the option is granted; except that the
price of an option granted upon completion of the
initial public offering of the Common Stock may be
the initial public offering price.
(ii) The purchase price of the Common Stock subject to
the NQSO may be paid in cash. At the discretion of
the Committee, the purchase price may also be paid
by the tender of Common Stock or through a
combination of Common Stock and cash or through
such other means as the Committee determines are
consistent with the Plan's purpose and applicable
law. No fractional shares of Common Stock will be
issued or accepted.
(iii) No NQSO may be exercised more than ten years after
the date the NQSO is granted.
(iv) Without limiting the foregoing, to the extent
permitted by law (including relevant state law):
A) the Committee may agree to accept, as full or
partial payment of the purchase price of
Common Stock issued upon the exercise of the
NQSO, a promissory note of the person
exercising the NQSO evidencing the person's
obligation to make future cash payments to
the Company, which promissory note shall be
payable as determined by the Company (but in
no event later than five years after the date
thereof), shall be secured by a pledge of the
shares of Common Stock purchased and shall
bear interest at a rate established by the
Committee; and
B) the Committee may permit the person
exercising the NQSO, either on a selective or
aggregate basis, to simultaneously exercise
the NQSO and sell the shares of Common Stock
acquired, pursuant to a brokerage or similar
arrangement approved in advance by the
Committee, and use the proceeds
7
<PAGE> 10
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
from sale as payment of the exercise price of the NQSO.
b) ISOS
----
(i) No ISO may be granted under the Plan to a
Non-Employee Director.
(ii) The aggregate Fair Market Value (determined at the
time of the grant of the Award) of the shares of
Common Stock subject to ISOs which are exercisable
by a Grantee for the first time during a particular
calendar year shall not exceed $100,000. To the
extent that ISOs granted to a Grantee exceed the
limitation set forth in the preceding sentence,
ISOs granted last shall be treated as NQSOs.
(iii) No ISO may be exercisable more than:
A) in the case of a Grantee who is not a Ten
Percent Shareholder, on the date the ISO is
granted, ten years after the date the ISO is
granted; and
B) in the case of a Grantee who is a Ten Percent
Shareholder, on the date the ISO is granted,
five years after the date the ISO is granted.
(iv) The exercise price of any ISO shall be determined
by the Committee and shall not be less than:
A) in the case of a Grantee who is not a Ten
Percent Shareholder on the date the ISO is
granted, the Fair Market Value of the Common
Stock subject to the ISO on such date; and
B) in the case of a Grantee who is a Ten Percent
Shareholder on the date the ISO is granted,
110 percent of the Fair Market Value of the
Common Stock subject to the ISO on such date.
(v) The Committee may provide that the option price
under an ISO may be paid by one or more of the
methods available for paying the option price of an
NQSO per Section 7.1(a)(iv).
(vi) No ISO may be granted under the Plan without the
approval of the Plan by holders of a majority of
the outstanding voting shares of the
8
<PAGE> 11
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
Company within twelve (12) months after the date of
the Plan's adoption by the Board of Directors.
7.2 Unless specified otherwise by the Committee in the stock option
agreement, and subject to Section 16.2, Options shall (i) become
exercisable on the first anniversary date of the grant as to 20% of
the number of shares covered by such Options, and as to an additional
20% of the number of shares covered by such Options on each of the
next four anniversaries of the date of grant; provided, however that
the Grantee, continues to be employed by the Company or one of its
subsidiaries on such anniversary date, (ii) expire at the end of the
maximum time frame allowable under Sections 7.1(a)(iii) or
7.1(b)(iii), as applicable, and (iii) be granted with an exercise
price equal to the Fair Market Value, subject to Sections 7.1(a)(i)
and 7.1(b)(iv).
7.3 The aggregate number of shares of Common Stock to be issued pursuant
to ISOs shall not exceed five percent (5%) of the Company's
outstanding shares as of the IPO Date except in the event of a change
in capitalization as described in Section 17.2.
SECTION 8
STOCK APPRECIATION RIGHTS
8.1 The amount payable with respect to each SAR shall be equal in value to
the applicable percentage of the excess, if any, of the Fair Market
Value of a share of Common Stock on the exercise date over the
exercise price of the SAR. The exercise price of the SAR shall be
determined by the Committee and shall not be less than the Fair Market
Value of a share of Common Stock on the date the SAR is granted. SARs
may be granted in tandem with an Option in which event the Grantee has
the right to elect to exercise either the SAR or the Option. Upon a
Grantee's election to exercise the Option or the SAR, the other Award
is immediately terminated. SARs may also be granted as an independent
Award.
8.2 In the case of an SAR granted in tandem with an ISO to an employee who
is a Ten Percent Shareholder on the date of such grant, the amount
payable with respect to each SAR shall be equal in value to the
applicable percentage of the excess, if any, of the Fair Market Value
of a share of Common Stock on the exercise date over the exercise
price of the SAR, which exercise price shall not be less than 110
percent of the Fair Market Value of a share of Common Stock on the
date the SAR is granted.
8.3 The applicable percentage and exercise price shall be established by
the Committee at the time the SAR is granted.
9
<PAGE> 12
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
SECTION 9
RESTRICTED STOCK
9.1 Restricted Stock is Common Stock of the Company that is issued to a
Grantee at a price determined by the Committee, which price may be
zero, and is subject to restrictions on transfer and/or such other
restrictions on incidents of ownership as the Committee may determine.
9.2 Unless specified otherwise by the Committee in the award agreement,
such shares of Common Stock granted to a Grantee as an Award shall
vest on the first anniversary date of the grant as to 20% of the
number of shares covered by such Restricted Stock, and as to an
additional 20% of the number of shares covered by such Restricted
Stock on each of the next four anniversaries of the date of grant;
provided, however that the Grantee continues to be employed by the
Company on such date.
9.3 The Committee may, in its discretion, provide for accelerated vesting
of Restricted Stock upon the achievement of specified performance
goals to be determined by the Committee.
9.4 Grantee may make the election under Section 83(b) of the Code with
respect to any Award of Restricted Stock.
SECTION 10
PERFORMANCE AWARDS
10.1 A Performance Award granted under the Plan:
a) may be denominated or payable in cash, Common Stock, Restricted
Stock, other securities, or other Awards; and
b) shall confer on the holder thereof the right to receive
payments, in whole or in part, upon the achievement of such
performance goals during such performance periods as the
Committee shall establish.
10.2 Subject to the terms of the Plan and any applicable Award agreement,
the performance goals to be achieved during any performance period,
the length of any performance period, the amount of any Performance
Award granted and the amount of any payment or transfer to be made
pursuant to any Performance Award shall be
10
<PAGE> 13
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
determined by the Committee. Such performance goals that the
Committee may select are earnings before interest and taxes, net
income, gross sales, earnings per share, return on equity, return on
investment, economic value added, performance against business plan
and stock price appreciation.
SECTION 11
OTHER STOCK-BASED INCENTIVE AWARDS
11.1 The Committee may from time to time grant Awards under this Plan that
provide a Grantee the right to purchase Common Stock or units that are
valued by reference to the Fair Market Value of the Common Stock
(including, but not limited to, phantom securities or dividend
equivalents) or to receive Deferred Shares which are stock-based
incentive grants in lieu of a cash deferral of bonuses. Such Awards
shall be in a form determined by the Committee (and may include terms
contingent upon a change of control of the Company); provided that
such Awards shall not be inconsistent with the terms and purposes of
the Plan.
11.2 The Committee shall determine the price of any Award and may accept
any lawful consideration.
SECTION 12
EXERCISE OF OPTIONS
12.1 The Committee may provide for the exercise of Options in installments
and upon such terms, conditions and restrictions as it may determine
subject to applicable law and the other requirements of this Plan.
12.2 The Committee may provide for termination of an Option in the case of
termination of employment or directorship or any other reason.
12.3 An Option granted hereunder shall be exercisable, in whole or in part,
only by written notice delivered in person or by mail to the Secretary
of the Company at its principal office, specifying the number of
shares of Common Stock to be purchased and accompanied by payment
thereof and otherwise in accordance with the stock option agreement
pursuant to which the Option was granted.
11
<PAGE> 14
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
SECTION 13
RIGHTS IN EVENT OF DEATH OR DISABILITY
13.1 A stock option or other award agreement may provide that, if a Grantee
dies or becomes subject to a Disability prior to termination of his or
her right to exercise an Option or SAR in accordance with the
provisions of his or her stock option or award agreement, as
applicable, without having totally exercised the Option or SAR, the
Option or SAR may be exercised, to the extent that the shares with
respect to the Option or SAR could have been exercised by the Grantee
on the date of his or her death or Disability, by (i), in the event of
the Grantee's death, the Grantee's estate or by the person who
acquired the right to exercise the Option or SAR by bequest or
inheritance or (ii), in the event of the Grantee's Disability, the
Grantee or his or her personal representative.
13.2 In the event of the Grantee's death or Disability, the Option shall
not be exercisable after the date of its expiration or more than six
months from the date of the Grantee's death or Disability, whichever
first occurs.
13.3 The date of Disability of a Grantee shall be determined by the
Committee.
SECTION 14
AWARD AGREEMENTS
14.1 Each Award granted under the Plan shall be evidenced by an award
agreement between the Grantee to whom the Award is granted and the
Company, setting forth the number of shares of Common Stock, SARs, or
units subject to the Award and such other terms and conditions
applicable to the Award not inconsistent with the Plan as the
Committee may deem appropriate.
14.2 The award agreement for an Option shall also be referred to as a stock
option agreement.
SECTION 15
TAX WITHHOLDING
15.1 The Committee may establish such rules and procedures as it considers
desirable in order to satisfy any obligation of the Company to
withhold federal income taxes or other taxes with respect to any Award
made under the Plan. Such rules and
12
<PAGE> 15
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
procedures may provide:
a) in the case of Awards paid in shares of Common Stock, the
Company may withhold shares of Common Stock otherwise issuable
upon exercise of such Award in order to satisfy withholding
obligations, unless otherwise instructed by the Grantee or
unless the Committee determines otherwise at the time of Grant;
and
b) in the case of an Award paid in cash, that the withholding
obligation shall be satisfied by withholding the applicable
amount and paying the net amount in cash to the Grantee;
provided that the requirements of the Rules, to the extent
applicable, must be satisfied with regard to any withholding
pursuant to clause (a).
SECTION 16
CHANGE OF CONTROL
16.1 For the purpose of the Plan, a "Change of Control" shall be deemed to
have occurred if:
a) the Company is merged or consolidated with another corporation
and as a result of such merger or consolidation less than 50%
of the outstanding voting securities of the surviving or
resulting corporation are owned in the aggregate by the former
shareholders of the Company;
b) the Company sells, leases or exchanges all or substantially all
of its assets to another corporation, which is not a wholly-
owned Subsidiary of the Company;
c) any person or "group" within the meaning of Section 13(d)(3) of
the Exchange Act acquires (together with voting securities of
the Company held by such person or "group") 50% or more of the
outstanding voting securities of the Company (whether directly,
indirectly, beneficially or of record) pursuant to any
transaction or combination of transactions;
d) there is a change of control of the Company of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange
Act, whether or not the Company is then subject to such
reporting requirements; or
13
<PAGE> 16
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
e) the individuals who, at the beginning of any period of
twelve consecutive months, constituted the Board of
Directors cease, for any reason, to constitute at least a
majority thereof, unless the nomination for election or
election by the Company's shareholders of each new
Director of the Company was approved by a vote of at least
two-thirds of the Directors then still in office who
either were Directors at the beginning of such period or
whose election or nomination for election was previously
so approved.
16.2 In the event of a Change of Control affecting the Company, then,
notwithstanding any provision of the Plan or of any provisions of any
Award agreements entered into between the Company and any Grantee to
the contrary, all Awards that have not expired and which are then held
by any Grantee (or the person or persons to whom any deceased
Grantee's rights have been transferred) shall, as of such Change of
Control, become fully and immediately vested and exercisable and may
be exercised for the remaining term of such Awards.
SECTION 17
DILUTION OR OTHER ADJUSTMENT
17.1 If the Company is a party to any merger or consolidation, or undergoes
any merger, consolidation, separation, reorganization, liquidation or
the like, the Committee shall have the power to make arrangements,
which shall be binding upon the holders of unexpired Awards, for the
substitution of new Awards for, or the assumption by another
corporation of, any unexpired Awards then outstanding hereunder.
17.2 In the event of a reclassification, stock split, combination of
shares, separation (including a spin-off), dividend on shares of the
Common Stock payable in stock or other similar change in
capitalization or in the corporate structure of shares of the Common
Stock, the Committee shall conclusively determine the appropriate
adjustment in the option prices of outstanding Options, and the number
and kind of shares or other securities as to which outstanding Awards
shall be exercisable, and in the aggregate number of shares with
respect to which Awards may be granted.
17.3 The number of shares reserved under the Plan shall adjust as the
number of shares of Common Stock increase as provided in Section 6.3
of this Plan.
14
<PAGE> 17
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
SECTION 18
TRANSFERABILITY
18.1 No Award, other than an NQSO, shall be sold, pledged, assigned,
transferred, or encumbered by a Grantee other than by will or by the
laws of descent and distribution.
18.2 Only an NQSO may be pledged, assigned, transferred, or gifted by a
Grantee to another individual provided that the NQSO is pledged,
assigned, transferred or gifted without consideration by a Grantee,
subject to such rules as the Committee may adopt, to (i) a member of
the Grantee's immediate family, (ii) a trust solely for the benefit of
the Grantee and his or her immediate family or (iii) a partnership or
limited liability company whose only partners or members are the
Grantee and his or her Immediate Family (hereinafter referred to as
the Permitted Transferee); provided that the Committee is notified in
advance in writing of the terms and conditions of any proposed pledge,
assignment, transfer, or gift and the Committee determines that such
pledge, assignment, transfer or gift complies with the requirements of
the Plan and the applicable Award agreement.
18.3 Any pledge, assignment or gift of an Award that does not comply with
the provisions of the Plan and the applicable Award agreement shall be
void and unenforceable against the Company.
18.4 All terms and conditions of a pledged, assigned, transferred or gifted
Award shall apply to the beneficiary, executor, administrator, and
Permitted Transferee, whether one or more, of the Grantee (including
the beneficiary, executor and administrator of a permitted
transferee), including the right to amend the applicable Award
agreement; provided that the permitted transferee shall not pledge,
assign, transfer, or gift an Award other than by will or by the laws
of descent and distribution.
SECTION 19
AMENDMENT OR TERMINATION
19.1 The Committee may at any time modify, amend, suspend or terminate the
Plan; provided, that:
a) such modification, amendment, suspension or termination shall
not affect adversely any Awards previously granted without the
consent of the holder thereof; and
15
<PAGE> 18
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
b) no amendment, other than an amendment authorized by Section 17
or Section 6.3, may be made increasing the aggregate number of
shares of the Common Stock with respect to which ISOs may be
granted, or changing the class of employees eligible to receive
ISOs hereunder, without the approval of the holders of a
majority of the outstanding voting shares of the Company.
SECTION 20
GENERAL PROVISIONS
20.1 No Awards may be exercised by a Grantee if such exercise, and the
receipt of cash or stock thereunder, would be, in the opinion of
counsel selected by the Company, contrary to law or the regulations of
any duly constituted authority having jurisdiction over the Plan.
20.2 A bona fide leave of absence approved by a duly constituted officer of
the Company shall not be considered interruption or termination of
service of any Grantee for any purposes of the Plan or Awards granted
thereunder, except that no Awards may be granted to an Employee while
he or she is on a bona fide leave of absence.
20.3 No Grantee shall have any rights as a shareholder with respect to any
shares subject to Awards granted to him or her under the Plan prior to
the date as of which he or she is actually recorded as the holder of
such shares upon the stock records of the Company.
20.4 Nothing contained in the Plan or in an Award agreement granted
thereunder shall confer upon any Grantee any right to (i) continue in
the employ of the Company or any of its Subsidiaries or continue
serving on the Board of Directors of the Company or (ii) interfere in
any way with the right of the Company or any of its Subsidiaries to
terminate the Grantee's employment at any time or service on the
Board.
20.5 Any Award agreement may provide that stock issued upon exercise of any
Awards may be subject to such restrictions, including, without
limitation, restrictions as to transferability and restrictions
constituting substantial risks of forfeiture as the Committee may
determine at the time such Award is granted.
20.6 The Committee may, in its discretion, grant registration rights
(piggyback rights) as to Common Stock issued upon the grant or
exercise of any Awards.
16
<PAGE> 19
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
LONG-TERM INCENTIVE PLAN
- ------------------------------------
SECTION 21
PLAN EFFECTIVE DATE
21.1 Subject to Section 7.1(b)(vi), the Plan shall become effective on the
date of its adoption by the Board of Directors.
SECTION 22
PLAN TERMINATION
22.1 No Award may be granted under the Plan on or after the date which is
ten years following the effective date specified in Section 21, but
Awards previously granted may be exercised in accordance with their
terms.
17
<PAGE> 1
EXHIBIT 21
The following are significant subsidiaries of the Company:
<TABLE>
<CAPTION>
Name Jurisdiction Also "doing business as"
<S> <C> <C>
Dollar Rent A Car Oklahoma
Systems, Inc.
Rental Car Finance Corporation Oklahoma
Thrifty Rent-A-Car Oklahoma One franchise in Louisville,
System, Inc. KY is doing business as "Drivewise"
Thrifty Rental Finance Oklahoma
Corporation
</TABLE>
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Amendment No. 2 to Registration Statement No.
333-39661 of Dollar Thrifty Automotive Group, Inc. and subsidiaries (successor
to Pentastar Transportation Group, Inc. and subsidiaries) on Form S-1 of our
report dated November 6, 1997, appearing in the Prospectus, which is part of
this Registration Statement, and of our report dated November 6, 1997 relating
to the financial statement schedule appearing elsewhere in this Registration
Statement.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ Deloitte & Touche LLP
December __, 1997
Tulsa, Oklahoma
<PAGE> 1
EXHIBIT 24
POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Dollar Thrifty
Automotive Group, Inc. hereby constitutes and appoints Steven B. Hildebrand
and Stephen W. Ray, or any one or more of them, to be his agent, proxy, and
attorney-in-fact, or sign and execute in his name, place, and stead and on his
behalf, and to file with the Securities and Exchange Commission, a Registration
Statement on Form S-1 under the Securities Act of 1933, as amended, with
respect to shares of Common Stock of Dollar Thrifty Automotive Group, Inc. that
may be offered for sale from time to time, and any and all amendments to such
Registration Statement that may be necessary or desirable, hereby approving,
ratifying and confirming all acts that the aforesaid agents, proxies and
attorneys-in-fact or any one of them do on his behalf pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this 15th
day of December, 1997.
/s/ Edward C. Lumley
----------------------------
Edward C. Lumley
<PAGE> 2
EXHIBIT 24
POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Dollar Thrifty
Automotive Group, Inc. hereby constitutes and appoints Steven B. Hildebrand
and Stephen W. Ray, or any one or more of them, to be his agent, proxy, and
attorney-in-fact, or sign and execute in his name, place, and stead and on his
behalf, and to file with the Securities and Exchange Commission, a Registration
Statement on Form S-1 under the Securities Act of 1933, as amended, with
respect to shares of Common Stock of Dollar Thrifty Automotive Group, Inc. that
may be offered for sale from time to time, and any and all amendments to such
Registration Statement that may be necessary or desirable, hereby approving,
ratifying and confirming all acts that the aforesaid agents, proxies and
attorneys-in-fact or any one of them do on his behalf pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this 15th
day of December, 1997.
/s/ Edward J. Hogan
----------------------------
Edward J. Hogan
<PAGE> 3
EXHIBIT 24
POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Dollar Thrifty
Automotive Group, Inc. hereby constitutes and appoints Steven B. Hildebrand
and Stephen W. Ray, or any one or more of them, to be his agent, proxy, and
attorney-in-fact, or sign and execute in his name, place, and stead and on his
behalf, and to file with the Securities and Exchange Commission, a Registration
Statement on Form S-1 under the Securities Act of 1933, as amended, with
respect to shares of Common Stock of Dollar Thrifty Automotive Group, Inc. that
may be offered for sale from time to time, and any and all amendments to such
Registration Statement that may be necessary or desirable, hereby approving,
ratifying and confirming all acts that the aforesaid agents, proxies and
attorneys-in-fact or any one of them do on his behalf pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this 15th
day of December, 1997.
/s/ John C. Pope
----------------------------
John C. Pope
<PAGE> 4
EXHIBIT 24
POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Dollar Thrifty
Automotive Group, Inc. hereby constitutes and appoints Steven B. Hildebrand
and Stephen W. Ray, or any one or more of them, to be his agent, proxy, and
attorney-in-fact, or sign and execute in his name, place, and stead and on his
behalf, and to file with the Securities and Exchange Commission, a Registration
Statement on Form S-1 under the Securities Act of 1933, as amended, with
respect to shares of Common Stock of Dollar Thrifty Automotive Group, Inc. that
may be offered for sale from time to time, and any and all amendments to such
Registration Statement that may be necessary or desirable, hereby approving,
ratifying and confirming all acts that the aforesaid agents, proxies and
attorneys-in-fact or any one of them do on his behalf pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this 15th
day of December, 1997.
/s/ John P. Tierney
----------------------------
John P. Tierney
<PAGE> 5
EXHIBIT 24
POWERS OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Dollar Thrifty
Automotive Group, Inc. hereby constitutes and appoints Steven B. Hildebrand
and Stephen W. Ray, or any one or more of them, to be his agent, proxy, and
attorney-in-fact, or sign and execute in his name, place, and stead and on his
behalf, and to file with the Securities and Exchange Commission, a Registration
Statement on Form S-1 under the Securities Act of 1933, as amended, with
respect to shares of Common Stock of Dollar Thrifty Automotive Group, Inc. that
may be offered for sale from time to time, and any and all amendments to such
Registration Statement that may be necessary or desirable, hereby approving,
ratifying and confirming all acts that the aforesaid agents, proxies and
attorneys-in-fact or any one of them do on his behalf pursuant to this power.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this 15th
day of December, 1997.
/s/ Edward L. Wax
----------------------------
Edward L. Wax
