<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 2, 1999
REGISTRATION NO. 333-81455
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 3 TO FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
RYDER VEHICLE LEASE TRUST 1999-A
(Issuer with respect to the Notes)
RYDER FUNDING LP
(Originator of the Trust described herein and Transferor of the 99% Vehicle SUBI
Certificate to the Trust)
RYDER TRUCK RENTAL LT
(Issuer with respect to the SUBI and the 99% SUBI Certificates)
RYDER TRUCK RENTAL I LP
(Originator of Ryder Truck Rental LT and transferor of the SUBI and the 99%
SUBI Certificates to the Transferor)
(Exact name as specified in Originator's charter)
<TABLE>
<S> <C> <C>
DELAWARE 7513 52-7000600
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
3600 NW 82ND AVENUE
MIAMI, FLORIDA 33166
(305) 500-3254
(Address, including zip code, and telephone number, including area
code, of principal executive offices of Ryder Funding LP,
Ryder Truck Rental LT and Ryder Truck Rental I LP)
---------------------
SERGE G. MARTIN, ESQ.
STEEL HECTOR & DAVIS LLP
200 SOUTH BISCAYNE BOULEVARD
MIAMI, FLORIDA 33131-2398
(305) 577-7000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
COPIES TO:
DALE W. LUM, ESQ.
BROWN & WOOD LLP
555 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94104
(415) 772-1200
---------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM AMOUNT OF
PROPOSED TITLE OF EACH CLASS OF AMOUNT TO AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED OFFERING PRICE(1) FEE(1)(4)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Asset Backed Notes, Class A-1............................... $28,000,000 100% $ 7,784.00
Asset Backed Notes, Class A-2............................... $63,000,000 100% $17,514.00
Asset Backed Notes, Class A-3............................... $54,000,000 100% $15,012.00
Asset Backed Notes, Class A-4............................... $53,000,000 100% $14,734.00
Asset Backed Notes, Class A-5............................... $84,900,000 100% $23,602.20
99% 1999-A Special Unit of Beneficial Interest
Certificates(2)........................................... (3) (3) (3)
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) The 1999-A Special Unit of Beneficial Interest (the "Lease SUBI") issued by
Ryder Truck Rental LT will constitute a beneficial interest in a specified
portion of the assets of Ryder Truck Rental LT, including certain lease
contracts. The 1999-A2 Special Unit of Beneficial Interest (the "Vehicle
SUBI") issued by Ryder Truck Rental LT will constitute a beneficial interest
in a specified portion of the assets of Ryder Truck Rental LT, including
certain vehicles relating to such lease contracts. The Lease SUBI and the
Vehicle SUBI (collectively, the "SUBI," and each, a "1999-A SUBI") will not
be offered to investors hereunder. A 99% Special Unit of Beneficial Interest
Certificate will be issued for each 1999-A SUBI (the "SUBI Certificates")
representing a 99% undivided interest in each 1999-A SUBI. The SUBI
Certificate for the Lease SUBI will be pledged and the SUBI Certificate for
the Vehicle SUBI will be transferred to the Owner Trustee for the Ryder
Vehicle Lease Trust 1999-A issuing the Asset Backed Notes, Class A-1, Class
A-2, Class A-3, Class A-4 and Class A-5. The SUBI Certificates will not be
offered to investors hereunder.
(3) Not applicable.
(4) Previously paid.
---------------------
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 WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SEC IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES, AND IT IS NOT SOLICITING AN OFFER TO BUY THEM, IN ANY STATE
WHERE AN OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED NOVEMBER 2, 1999
$282,900,000
(RYDER LOGO)
ASSET BACKED SENIOR NOTES
RYDER VEHICLE LEASE TRUST 1999-A
Issuer
RYDER FUNDING LP
Transferor
RYDER TRUCK RENTAL, INC.
Administrative Agent
The trust's main sources for payment of the senior notes will be lease
payments generated by a portfolio of commercial full service lease contracts and
the proceeds from the future sale of the trucks, highway tractors and trailers
currently leased under those contracts.
Interest and principal will be payable quarterly and the first scheduled
payment date is January 17, 2000.
Before you decide to invest, read this prospectus carefully, especially the
risk factors beginning on page 10.
The senior notes are obligations of the trust only. The senior notes are
not obligations of Ryder Funding LP, Ryder Truck Rental, Inc. or any of their
affiliates.
The trust will issue the following classes of senior notes--
<TABLE>
<CAPTION>
Original
Principal Interest Rate Final Payment Price to Underwriting Proceeds to
Amount (per annum) Date Public Discount Transferor
------------ ------------- ---------------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Per Class A-1 Note................ $ 28,000,000 % October 16, 2000 % % %
Per Class A-2 Note................ $ 63,000,000 % January 15, 2003 % % %
Per Class A-3 Note................ $ 54,000,000 % April 15, 2004 % % %
Per Class A-4 Note................ $ 53,000,000 % April 15, 2005 % % %
Per Class A-5 Note................ $ 84,900,000 % October 16, 2006 % % %
Total............................. $282,900,000 % % %
</TABLE>
- The price to the public and proceeds to the transferor do not include
interest accrued from the date the notes will be issued.
- The proceeds to the transferor excludes expenses, estimated at
approximately $1,053,646.
Neither the SEC nor any state securities commission has approved these
securities or determined that this prospectus is accurate or complete. It is
illegal for anyone to tell you otherwise.
---------------------
MERRILL LYNCH & CO.
FIRST UNION SECURITIES, INC.
SALOMON SMITH BARNEY
The date of this prospectus is November , 1999.
<PAGE> 3
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS
CONTENT OF PROSPECTUS
You should rely only on the information contained in this document. We have
not authorized anyone to provide you with different information.
We include cross-references in this prospectus to the captions under which
you can find additional related information. The following table of contents
lists the pages on which these captions are located.
You can find a listing of the pages where capitalized terms used in this
prospectus are defined under "Index of Principal Terms" beginning on page 107.
LIMITATIONS ON OFFERS OR SOLICITATIONS
We do not intend this document to be an offer or solicitation:
- if used in a jurisdiction in which an offer or solicitation is not
authorized;
- if the person making an offer or solicitation is not qualified to do so;
or
- if an offer or solicitation is made to anyone to whom it is unlawful to
make an offer or solicitation.
DEALER PROSPECTUS DELIVERY REQUIREMENTS
For 90 days after the date of this prospectus, all dealers that effect
transactions in the senior notes, whether or not participating in this offering,
may be required to deliver a prospectus. This requirement is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters with
respect to their unsold allotments or subscriptions.
2
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN
THIS PROSPECTUS................................ 2
OVERVIEW OF TRANSACTION........................ 4
SUMMARY........................................ 5
RISK FACTORS................................... 10
OVERVIEW OF THE TRANSACTION.................... 15
THE TRUST...................................... 16
Formation.................................. 16
Capitalization............................. 17
The Owner Trustee.......................... 17
Property of the Trust...................... 17
USE OF PROCEEDS................................ 18
THE ORIGINATION TRUST.......................... 19
General.................................... 19
The UTI Beneficiaries...................... 19
The Origination Trustee.................... 20
Property of the Origination Trust.......... 20
Lease Origination and the Titling of
Vehicles................................. 20
THE SUBIS...................................... 21
General.................................... 21
Transfers of the SUBI Certificates......... 22
THE TRANSFEROR................................. 23
RYDER.......................................... 23
General.................................... 23
Shared Services Center..................... 24
The Leases................................. 24
Lease Underwriting Procedures.............. 28
Insurance.................................. 28
Collection, Repossession and Disposition
Procedures............................... 29
Servicing.................................. 29
Lease Payments............................. 30
Historical Data............................ 32
Year 2000 Preparation...................... 34
THE SPECIFIED LEASES........................... 36
General.................................... 36
Characteristics............................ 37
Representations, Warranties and
Covenants................................ 41
MATURITY, PAYMENT AND YIELD CONSIDERATIONS..... 43
NOTE FACTORS AND TRADING INFORMATION........... 47
DESCRIPTION OF THE SENIOR NOTES................ 48
General.................................... 48
Interest................................... 48
Principal.................................. 49
Optional Purchase.......................... 50
The Indenture Trustee...................... 50
Book-Entry Registration.................... 50
ADDITIONAL INFORMATION REGARDING THE
SECURITIES................................... 54
Payments on the Securities................. 54
Optional Purchase.......................... 56
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Statements to Senior Noteholders........... 57
Definitive Notes........................... 58
SECURITY FOR THE SECURITIES.................... 58
General.................................... 58
The Program Operating Lease................ 59
The Subordinated Notes..................... 60
The Certificates........................... 60
The Accounts............................... 61
The Contingent and Excess Liability
Insurance................................ 64
ADDITIONAL DOCUMENT PROVISIONS................. 64
The Indenture.............................. 64
The Trust Agreement........................ 68
The SUBI Trust Agreement................... 71
The Administration Agreement............... 73
Miscellaneous Provisions................... 83
ADDITIONAL LEGAL ASPECTS OF THE ORIGINATION
TRUST AND THE SUBIS.......................... 88
The Origination Trust...................... 88
The SUBIs.................................. 89
Insolvency-Related Matters................. 90
ADDITIONAL LEGAL ASPECTS OF THE SPECIFIED
LEASES AND THE SPECIFIED VEHICLES............ 92
Back-up Security Interests................. 92
Titling Grade Period -- Lack of Perfected
Ownership Interest....................... 93
Vicarious Tort Liability................... 94
Repossession of Specified Vehicles......... 94
Deficiency Judgments....................... 95
Other Limitations.......................... 95
MATERIAL FEDERAL INCOME TAX CONSEQUENCES....... 95
General.................................... 95
Senior Notes............................... 96
DELAWARE AND FLORIDA TAX CONSEQUENCES.......... 101
General.................................... 101
Delaware................................... 101
Florida.................................... 102
Miscellaneous.............................. 102
ERISA CONSIDERATIONS........................... 102
General.................................... 102
Prohibited Transactions.................... 103
RATINGS OF THE SENIOR NOTES.................... 104
UNDERWRITING................................... 104
LEGAL MATTERS.................................. 105
EXPERTS........................................ 105
AVAILABLE INFORMATION.......................... 105
INDEX OF PRINCIPAL TERMS....................... 107
INDEX TO FINANCIAL STATEMENTS.................. F-1
GLOBAL CLEARANCE, SETTLEMENT AND TAX
DOCUMENTATION PROCEDURES..................... A-1
</TABLE>
3
<PAGE> 5
CHART
- - The above special units of beneficial interest, or SUBIs, represent specific
assets that produce income for the issuer.
- - The vehicle SUBI represents the specified vehicles and the lease SUBI
represents the specified leases.
- - The UTI represents other origination trust assets and the issuer has neither
any rights in those assets nor in the income they produce.
4
<PAGE> 6
SUMMARY
- - This summary highlights selected information from this prospectus and does not
contain all of the information that you need to consider in making your
investment decision. To understand all of the terms of the offering of the
senior notes, you should carefully read this entire prospectus.
- - This summary provides an overview of some calculations, cash flows and other
information to aid your understanding and is qualified by the full description
of these calculations, cash flows and other information in this prospectus.
BASIC TERMS OF THE SENIOR NOTES
<TABLE>
<S> <C>
ISSUER/TRUST: Ryder Vehicle Lease Trust
1999-A
TRANSFEROR: Ryder Funding LP
ADMINISTRATIVE AGENT: Ryder Truck Rental, Inc.
MAINTENANCE
PROVIDER: Ryder Truck Rental, Inc.
OWNER TRUSTEE: Chase Manhattan Bank
Delaware
INDENTURE TRUSTEE: U.S. Bank National
Association
ORIGINATION TRUST: Ryder Truck Rental LT
ORIGINATION TRUSTEE: RTRT, Inc.
TRUST ASSETS: Beneficial and security
interests in leased vehicles
and lease contracts, and
related proceeds
LEASES: Commercial leases of trucks,
highway tractors and
trailers
CUTOFF DATE: Opening of business on
October 1, 1999
CREDIT ENHANCEMENT: A reserve fund, a residual
value surplus account, the
subordinated notes retained
by the transferor and the
certificates
NOTES TO BE OFFERED:
Class A-1 notes: $28,000,000
Class A-2 notes: $63,000,000
Class A-3 notes: $54,000,000
Class A-4 notes: $53,000,000
Class A-5 notes: $84,900,000
INTEREST RATES:
Class A-1 notes: %
Class A-2 notes: %
Class A-3 notes: %
Class A-4 notes: %
Class A-5 notes: %
INTEREST BASIS:
Class A-1 notes: Actual number of days
elapsed and assuming a
360-day year
Other senior
notes: A 360-day year of twelve
30-day months
PAYMENT DATES: The first business day after
the 14th day of each
January, April, July and
October
RECORD DATE: Holders of record are
determined one business day
prior to a payment date
FIRST PAYMENT DATE: January 17, 2000
FINAL PAYMENT DATES:
Class A-1 notes: October 16, 2000
Class A-2 notes: January 15, 2003
Class A-3 notes: April 15, 2004
Class A-4 notes: April 15, 2005
Class A-5 notes: October 16, 2006
CLEARANCE AND
SETTLEMENT: The Depository Trust
Company, Cedelbank and
Euroclear
CLOSING DATE: Expected to be November ,
1999
</TABLE>
5
<PAGE> 7
THE STRUCTURE OF THIS TRANSACTION
GENERAL
Ryder Truck Rental, Inc. has assigned commercial lease contracts and the related
leased vehicles to Ryder Truck Rental LT. The leased vehicles include trucks,
highway tractors and trailers. Some of these lease contracts and the related
leased vehicles have been allocated to a separate pool of assets. Beneficial and
security interests -- but not direct ownership -- in the vehicles and contracts
in that pool will be transferred to the trust. Neither the trust nor holders of
the trust's securities will receive any interest in assets other than those in
that pool. Payment of the senior notes will be backed by those beneficial and
security interests in the vehicles and contracts in the pool.
The trust will apply the net proceeds from the issuance and sale of the senior
notes to purchase those interests in the pool. In addition to the senior notes,
the trust is also issuing $13,023,237.85 in aggregate principal amount of asset
backed subordinated notes and $10,858,575.00 in aggregate principal amount of
asset backed certificates. The trust is not offering the subordinated notes or
the asset backed certificates under this prospectus. The asset backed
certificates will be sold in one or more private placements.
The trust will rely upon collections from the pool's lease contracts, sales
proceeds from the disposition of the related vehicles and funds on deposit in
specified accounts to make payments on the senior notes. The trust will be
solely liable for payments made on the senior notes.
REPAYMENT OF THE NOTES
The timing of payments of principal on the senior notes is largely dependent on
the timing of collections of cash flows generated by the underlying assets.
Principal will be paid on your senior notes on each payment date in an amount
generally equal to the available principal distribution amount generated by the
underlying pool of lease contracts and proceeds from the sale of the leased
vehicles.
Principal payments on the senior notes generally will be made to the holders of
the senior notes sequentially, so that no principal will be paid on any class of
senior notes until each class of senior notes with a lower numerical designation
has been paid in full. For example, no principal will be paid on the Class A-2
Notes until the Class A-1 Notes have been paid in full.
Until all principal due to the senior notes is paid, no principal will be paid
to the subordinated notes and the asset backed certificates. Principal will then
be paid to the subordinated notes until they have been paid in full, and then to
the asset backed certificates.
An exception to the sequential payment rule is that allocable principal from the
sale of the trust's assets following a default under the indenture and the
acceleration of the senior notes or the transferor's insolvency will be paid
first to the Class A-1 Senior Notes until they have been paid in full, second,
on a pro rata basis, to all other classes of the senior notes until they have
been paid in full, and third, ratably, to the subordinated notes (which amounts
will be paid to the reserve fund) and the asset backed certificates pro rata
until they have been paid in full.
Any unpaid principal amount of each class of senior notes will be payable in
full on the final payment dates listed on the cover page of this prospectus.
Ryder Truck Rental, Inc. will administer the lease contracts, the disposition of
the related vehicles when their leases terminate and the collection of amounts
due in respect of the leases and will also provide maintenance and other
services in connection with the leases and the vehicles. It also will be
entitled to certain lease payments that are not being securitized in this
transaction and that are thus neither the property of the trust nor in any other
way available to make payments on the senior notes. If the total amount that
Ryder receives from the lessee on a pool lease is less than the amount due, the
shortfall will be allocated pro rata to the trust's and Ryder's portions of the
amount due.
For information on the components of the lease payments that the senior notes
will or will not be entitled to and on Ryder's role in servicing the leases, see
"Ryder -- The Leases -- Collection, Repossession and Disposition Procedures,
-- Servicing, and -- Lease Payments".
For information on the allocation of collection shortfalls see "Additional
Document Provisions -- The Administration Agreement -- Collections -- Financial
Component Payments".
6
<PAGE> 8
See "Description of the Senior Notes -- Principal" and "Additional Information
Regarding the Securities -- Payments on the Securities -- Deposits to the
Distribution Accounts; Priority Of Payments" for additional detail regarding the
allocation of any principal losses or shortfalls in amounts required to be
distributed to holders of senior notes and the reimbursement of those losses.
OPTIONAL REDEMPTION OF THE NOTES
The transferor has the option to purchase all of the assets of the trust on any
payment date when the combined unpaid principal balance of the senior notes,
subordinated notes and asset backed certificates is less than or equal to 10% of
the total initial balance of the senior notes, subordinated notes and asset
backed certificates. If the transferor exercises this option, any senior notes
that are outstanding at that time will be prepaid in whole at a redemption price
equal to their unpaid principal amount, plus accrued and unpaid interest.
THE PROPERTY OF THE TRUST
GENERAL
The primary property of the trust will be:
- the vehicle SUBI certificate, which is described below, including the right
to receive 99% of the amounts realized from sales of the specified vehicles;
- the program operating lease under which the trust will lease the vehicle
SUBI certificate to the transferor;
- the right under the program operating lease to receive an amount equal to
99% of the payments made in respect of the financial component of specified
vehicle leases;
- the pledge by Ryder Funding LP of the lease SUBI certificate to secure the
payments due under the program operating lease; and
- the right to certain amounts deposited in the reserve fund and the residual
value surplus account.
THE PROGRAM OPERATING LEASE
When the senior notes are issued, the trust and the transferor will enter into a
program operating lease, under which the trust will lease the vehicle SUBI
certificate to the transferor, subject to the lien of the indenture. Pursuant to
the program operating lease and a pledge of the lease SUBI certificate, the
transferor will be obligated to make payments during the period that each
underlying vehicle is represented by the vehicle SUBI and covered by the program
operating lease.
The transferor will make payments on the program operating lease on each payment
date in an amount generally equal to certain payments made on or for the
specified leases and specified vehicles during the three-month collection period
immediately before the month in which the related payment date occurs. These
payments consist of:
- the financial component of the fixed charge portion of the total monthly
payment paid under each specified lease, and
- termination value payments made upon the exercise of any annual termination
option included in a specified lease.
The trust will apply these collected payments, together with certain proceeds
received during the related collection period from the sale or other disposition
of specified vehicles either:
- after the scheduled maturity or other termination of the related specified
leases, or
- as a result of an exercise of the annual termination option when the lessee
does not make a termination value payment,
to pay interest on and principal of the senior notes, the subordinated notes and
the certificates in accordance with their terms.
THE SPECIFIED LEASES AND THE SPECIFIED VEHICLES
The specified vehicles are commercial trucks, highway tractors and trailers
titled in the name of the origination trust or, in some cases, that will be
titled in the name of the origination trust during the 60 days after the
closing. The specified leases are full-service leases of specified vehicles.
Ryder Truck Rental, Inc. originated the specified leases in 26 states and
services the specified leases, as well as many other leases in which the trust
does not have an interest. The initial securitization value of the specified
leases and specified vehicles will be their net book value on the administrative
agent's books and the residual value of the specified vehicles will be their
currently estimated sales
7
<PAGE> 9
proceeds upon the scheduled maturity of their specified leases. As of October 1,
1999:
- the aggregate securitization value of the specified leases and specified
vehicles was $309,880,619.04;
- the aggregate estimated sales proceeds of the specified vehicles at
scheduled maturity was $112,112,717.00;
- the weighted average original term of the specified leases was 71.32 months;
and
- the weighted average remaining term to scheduled maturity of the specified
leases was 64.41 months.
THE SUBI CERTIFICATES
The origination trust will issue two special units of beneficial interest, which
are also called SUBIs:
- a lease SUBI that will constitute a beneficial interest in the specified
portfolio of lease contracts, and
- a vehicle SUBI that will constitute a beneficial interest in vehicles that
are leased under those lease contracts.
The SUBIs relating to the trust thus consists of the lease SUBI and the vehicle
SUBI. The SUBIs will not be offered to you under this prospectus.
A 99% SUBI certificate will be issued for each of the lease SUBI and the vehicle
SUBI. One SUBI certificate will represent a 99% undivided interest in the lease
SUBI and the other SUBI certificate will represent a 99% undivided interest in
the vehicle SUBI. The SUBI certificate for the lease SUBI will be pledged and
the SUBI certificate for the vehicle SUBI will be transferred to the trust at
the time it issues the senior notes. The SUBI certificates will not be offered
to you under this prospectus.
The SUBI certificates will evidence a 99% beneficial interest in the SUBI
assets, not a direct ownership interest in the SUBI assets. The SUBI assets are
the specified leases and specified vehicles. By holding the Vehicle SUBI
certificate and the program operating lease, the trust will be entitled to
receive an amount equal to 99% of all payments made on or in respect of the SUBI
assets. Payments made on or in respect of the 1% beneficial interest in the SUBI
assets not evidenced by the SUBI certificates will not be available to make
payments on the senior notes, the subordinated notes or the asset backed
certificates.
The SUBI certificates will not evidence an interest in any origination trust
assets other than the SUBI assets, and payments made on or for all other
origination trust assets will not be available to make payments on the senior
notes.
For more information regarding the trust's property see "The SUBIs" and "The
Specified Leases".
CREDIT ENHANCEMENT
The credit enhancement for the senior notes will consist primarily of the
following:
- subordination of the subordinated notes;
- subordination of the asset backed certificates;
- the reserve fund; and
- the residual value surplus account.
SUBORDINATION OF THE SUBORDINATED NOTES
The subordinated notes will be subordinated to the senior notes to provide
credit enhancement for the senior notes.
SUBORDINATION OF THE CERTIFICATES
The certificates will be subordinated to the senior notes to provide additional
credit enhancement for the senior notes.
THE RESERVE FUND
As an additional source of credit enhancement, the administrative agent will
establish a reserve fund. The reserve fund will be funded as follows:
- on the closing date, the transferor will make an initial deposit into the
reserve fund of $9,970,408.92, which is 3.25% of the aggregate initial
balance of the senior notes, subordinated notes and asset backed
certificates;
- interest and principal paid on the subordinated notes will be deposited into
the reserve fund; and
- on each payment date, any excess collections remaining after interest and
principal on the senior notes, subordinated notes and asset backed
certificates and various other obligations and expenses of the trust have
been paid will be deposited into the reserve fund.
8
<PAGE> 10
Deposits will be made to the reserve fund after the closing date only to the
extent needed to maintain a balance in the reserve fund equal to its initial
deposit. Any further excess collections will be paid to the transferor.
Available amounts in the reserve fund on each payment date will be available to
cover shortfalls in distributions of interest and principal on the senior notes
and the certificates.
THE RESIDUAL VALUE SURPLUS ACCOUNT
As an additional source of credit enhancement, a residual value surplus account
will provide funds for the benefit of the senior notes and the certificates in
the event any residual value losses are incurred on the sale of specified
vehicles.
Residual value losses will be any amount by which the net proceeds from the sale
of specified vehicles are less than the aggregate securitization values of those
specified vehicles and their specified leases.
The residual value surplus account will not be funded with an initial balance,
but on each payment date it will be funded with the amount by which the sales
proceeds for each specified vehicle sold during the related collection period
exceeded the securitization value of the related specified lease.
After all distributions required on a given payment date have been made, any
funds remaining in the residual value surplus account will be paid to the
transferor.
For more information regarding the residual value surplus account, see "Security
for the Securities -- The Accounts -- The Residual Value Surplus Account".
ADMINISTRATION AND MAINTENANCE
Ryder Truck Rental, Inc. will act as administrative agent to service the
origination trust assets, including the SUBI assets, and will also act as
maintenance provider to provide certain supplies, maintenance and other services
for the specified vehicles and to the lessees under the specified leases.
For more information regarding the administrative agent and the maintenance
provider, see "Additional Document Provisions -- The Administration Agreement"
and "Ryder".
TAX STATUS
Steel Hector & Davis LLP, as special tax counsel to the transferor, is of the
opinion that:
- the senior notes will be characterized as indebtedness for federal income
tax purposes, and
- the trust will not be a separately taxable entity for federal income tax
purposes.
By accepting a senior note, each holder or beneficial owner will agree to treat
the senior notes as indebtedness. You should consult your own tax advisor
regarding the federal income tax consequences of the purchase, ownership and
disposition of the senior notes, and the tax consequences arising under the laws
of any state or other taxing jurisdiction.
For more information, see "Material Federal Income Tax Consequences".
ERISA CONSIDERATIONS
It is expected that the senior notes will be eligible for purchase by employee
benefit plans. However, plans contemplating a purchase of senior notes should
consult their counsel before making a purchase.
For more information, see "ERISA
Considerations".
SENIOR NOTE RATINGS
The senior notes will be issued only if the Class A-1 Notes are rated in the
highest short-term rating category and the other senior notes are rated in the
highest long-term category by Moody's Investors Service, Inc. and Duff & Phelps
Credit Rating Co. There can be no assurance that a rating will not be lowered or
withdrawn by an assigning rating agency.
MONEY MARKET INVESTMENT
The Class A-1 Notes have been structured to be eligible securities for purchase
by money market funds under Rule 2a-7 under the Investment Company Act of 1940.
However, money market funds contemplating a purchase of Class A-1 Notes should
consult their counsel before making a purchase.
9
<PAGE> 11
RISK FACTORS
You should consider the following risk factors in deciding whether to
purchase the senior notes:
YOU MAY HAVE DIFFICULTY
SELLING YOUR
SENIOR NOTES OR OBTAINING YOUR
DESIRED
SALES PRICE. - The senior notes will not be listed on any
securities exchange. The underwriters intend
to make a secondary market for the senior
notes. The underwriters will do so by
offering to buy the senior notes from
investors that wish to sell. However, the
underwriters will not be obligated to make
offers to buy the senior notes and may stop
making offers at any time. In addition, the
prices offered, if any, may not reflect
prices that other potential purchasers would
be willing to pay, were they to be given the
opportunity. There have been times in the
past where there have been very few buyers of
asset backed securities and thus there has
been a lack of liquidity. There may be a
similar lack of liquidity at times in the
future. As a result, you may not be able to
sell your senior notes when you want to do
so, or you may not be able to obtain the
price that you wish to receive.
YOU WILL EXPERIENCE A LOSS ON
YOUR
INVESTMENT IF DEFAULTS ON THE
LEASE
CONTRACTS OR RESIDUAL VALUE
LOSSES
EXCEED THE AVAILABLE CREDIT
ENHANCEMENT. - The trust does not have, nor is it expected
to have, any significant assets or sources of
funds other than the SUBI certificates and
payments under the program operating lease,
together with available funds in the reserve
fund, the residual value surplus account and
the distribution and collection accounts. The
senior notes represent obligations solely of
the trust and will not be insured or
guaranteed by any entity. Accordingly, you
will rely primarily upon payments on the
program operating lease which are based on
collections on the specified leases and
specified vehicles -- together with monies on
deposit in the reserve fund and the residual
value surplus account -- for payments on the
senior notes. The reserve fund and the
residual value surplus account, together with
the credit enhancement provided by
subordination of the subordinated notes and
the certificates, are intended to provide
protection against delinquencies on the
specified leases and losses on the specified
leases and specified vehicles. However, if
the level of delinquencies and losses exceeds
the available credit enhancement, you will
suffer a loss. You will have no claim to any
amounts properly distributed to others from
time to time.
YOUR SHARE OF POSSIBLE LOSSES
MAY NOT
BE PROPORTIONATE. - Principal payments on the senior notes
generally will be made to the holders of the
senior notes sequentially, so that no
principal will be paid on any class of senior
notes until each class of senior notes with a
lower numerical designation has been paid in
full. Losses in excess of the available
credit enhancement relating to the specified
leases and specified vehicles will be
allocated, after the class A-1 senior notes
are paid, to each remaining class of senior
notes based on a fraction equal to the unpaid
principal amount of that class divided by the
unpaid principal amount of all classes. As a
result, a class of senior notes with a later
maturity may be allocated more losses than a
class of senior notes with an earlier
maturity as a relative percentage of their
initial principal amounts.
10
<PAGE> 12
THE TIMING OF PRINCIPAL
PAYMENTS IS
UNCERTAIN. - The amount of distributions of principal on
the senior notes and the time when you
receive those distributions depends on the
rate of payments and losses relating to the
specified leases and the specified vehicles,
which cannot be predicted with certainty.
Those principal payments may be regularly
scheduled payments or unscheduled payments
like those resulting from prepayments or
liquidations of defaulted specified leases.
Additionally, the administrative agent may be
required to make payments relating to
specified leases and specified vehicles under
some circumstances, and the transferor will
have the right to purchase all assets of the
trust pursuant to a clean-up call. Each of
these payments will have the effect of
shortening the average life of the senior
notes. You will bear any reinvestment risks
resulting from a faster or slower rate of
payments of the specified leases and the
specified vehicles.
DURING A TITLING GRACE PERIOD
THE
ORIGINATION TRUST WILL LACK A
PERFECTED
OWNERSHIP INTEREST IN SOME
VEHICLES. - During a titling grace period, vehicles
having an aggregate securitization value on
the cutoff date not to exceed $4,900,848,
representing 1.58% of the aggregate
securitization value of all the trust assets,
will be titled in the name of Ryder Truck
Rental, Inc. rather than in the name of the
origination trust or the origination trustee
on behalf of the origination trust. During
this grace period, the administrative agent
will title these vehicles in the name of the
origination trust or the origination trustee
on behalf of the origination trust, but no
action will be taken to note a lien in favor
of the transferor on the applicable
certificates of title. An ownership interest
or security interest in a motor vehicle
registered in most states may be perfected
against creditors and subsequent purchasers
without notice for valuable consideration
only by one or more of the following:
O depositing with the state's department of
motor vehicles a properly endorsed
certificate of title for the vehicle
showing the transferee or secured party
as legal owner or lienholder thereon,
O filing a sworn notation of lien with the
state's department of motor vehicles and
noticing such lien on the certificate of
title, or
O if the vehicle has not been previously
registered, filing an application for an
original registration together with an
application for registration of the
secured party as legal owner or
lienholder, as the case may be, with the
state's department of motor vehicles.
The origination trust and the transferor may
thus not have a validly perfected ownership
interest and security interest, respectively,
in some vehicles during the grace period. As
a result, the origination trust's and the
transferor's ownership or security interest
in these vehicles will not be perfected and
the transferor's interest could be inferior
to interests of other creditors or purchasers
who have taken the steps described above. If
such creditors or purchasers successfully did
so, the affected vehicles would not be
available to the trust to generate
11
<PAGE> 13
their expected cash flow and you could suffer
a loss on your investment.
For a discussion of the possible liability of
the trust in connection with the negligent
use or operation of the leased vehicles, see
"Additional Legal Aspects of the Specified
Leases and the Specified Vehicles -- Titling
Grace Period -- Lack of Perfected Ownership
Interest".
THE GEOGRAPHIC CONCENTRATION
OF THE
LEASES, ECONOMIC FACTORS AND
THE
COMMERCIAL TRUCK, HIGHWAY
TRACTOR AND
TRAILER MARKET COULD
NEGATIVELY AFFECT
THE TRUST'S ASSETS. - The specified leases were originated in 26
states, with 10.77% -- the largest percentage
of specified leases in any state (based on
cutoff date securitization
value) -- originated in North Carolina. Less
than 10.00% of the total number of specified
leases were originated in any states other
than Pennsylvania, California and Tennessee.
Adverse economic conditions in one of more of
these states or in the market for commercial
trucks, highway tractors and trailers may
have a disproportionate impact on the
performance of the specified leases and the
specified vehicles. Economic factors like
unemployment, interest rates, the rate of
inflation and consumer perceptions of the
economy may affect the rate of prepayment and
defaults on the specified leases and the
ability to sell or dispose of the related
specified vehicles for an amount at least
equal to their residual values.
THE ADMINISTRATIVE AGENT AND
THE
MAINTENANCE PROVIDER HAVE
INTERESTS
BEYOND SERVICING THE ASSETS OF
THE TRUST
AND THEREFORE MAY HAVE
COMPETING OR
CONFLICTING INTERESTS. - Ryder Truck Rental, Inc., in addition to
serving as administrative agent and
maintenance provider, also is and will be
engaged in leasing and providing maintenance
services in connection with its own
commercial trucks, highway tractors and
trailers and servicing the related leases. It
therefore may from time to time have
competing interests or conflicts of interest
in performing its obligations with respect to
the maintenance and sale of the specified
vehicles and the servicing of the specified
leases. Ryder has contractually agreed that
when serving as administrative agent and
maintenance provider it will use the same
degree of skill, care and attention and the
same customary and usual procedures it
employs in connection with vehicles it leases
and maintains for its own account.
A DEFAULT, REPLACEMENT OR
DECLINE IN
THE QUALITY OF THE SERVICE OF
THE
ADMINISTRATIVE AGENT OR THE
MAINTENANCE PROVIDER COULD
DELAY OR
LIMIT PAYMENTS TO YOU. - Because the specified leases and specified
vehicles will be serviced and maintained by
the administrative agent and the maintenance
provider, a default by or the replacement of
either could reduce or delay payments made
under the specified leases. Ryder Truck
Rental, Inc. will serve as both the
administrative agent and the maintenance
provider. Any reduction or delay in the
payments made under the specified leases
could cause delays in payments due to you or
limit the amount of principal and interest
paid to you. A decline in the quality of
service provided by the administrative agent
or the maintenance provider could also cause
delays in payments due to you or limit the
amount of principal and interest paid to you.
VICARIOUS TORT LIABILITY MAY
RESULT IN A
LOSS ON YOUR INVESTMENT. - Some states allow a party that incurs an
injury involving a leased vehicle to sue the
owner of the vehicle merely because of that
ownership. Most states, however, either
prohibit these vicarious liability suits or
limit the lessor's liability to the amount
12
<PAGE> 14
of liability insurance that the lessee was
required to carry under applicable law but
failed to maintain. If vicarious liability
imposed on the trust or the origination trust
exceeds the coverage provided by its primary
and excess liability insurance policies, you
could experience delays in payments due to
you or may ultimately suffer a loss.
For a discussion of the possible liability of
the trust in connection with the use or
operation of the leased vehicles, see
"Additional Legal Aspects of the Specified
Leases and the Specified
Vehicles -- Vicarious Tort Liability".
A BANKRUPTCY OF THE TRANSFEROR
OR THE
ADMINISTRATIVE AGENT COULD
DELAY OR
LIMIT PAYMENTS TO YOU. - Following a bankruptcy or insolvency of the
administrative agent or the transferor, a
court could conclude that the vehicle SUBI
certificate is owned by the administrative
agent or the transferor, instead of the
trust. This conclusion could be either
because the transfer of the vehicle SUBI
certificate from the transferor to the trust
was not a true sale or because the court
concluded that the transferor or the trust
should be treated as the same entity as
administrative agent or the transferor for
bankruptcy purposes. If this were to occur,
you could experience delays in payments due
to you or may not ultimately receive all
interest and principal due to you as a result
of:
O the automatic stay which prevents a
secured creditor from exercising remedies
against a debtor in bankruptcy without
permission from the court, and
O the fact that neither the trust nor the
indenture trustee has a perfected
security interest in the specified
vehicles and may not have a perfected
security interest in any cash collections
of the specified leases and specified
vehicles held by the administrative agent
at the time that a bankruptcy proceeding
begins.
For a discussion of how a bankruptcy
proceeding of the administrative agent, the
transferor or certain related entities may
affect the trust and the senior notes, see
"Additional Legal Aspects of the Origination
Trust and the SUBIs -- Insolvency Related
Matters".
IF ERISA LIENS ARE PLACED ON
THE
ASSETS OF THE TRUST, YOU COULD
SUFFER A
LOSS ON YOUR INVESTMENT. - Liens in favor of the Pension Benefit
Guaranty Corporation could attach to the
specified leases and specified vehicles and
be used to satisfy unpaid ERISA obligations
of any member of a controlled group that
includes Ryder Truck Rental, Inc. and its
affiliates. These liens could have priority
over the interest of security holders in SUBI
assets, like the specified vehicles, that are
not covered by a prior perfected security
interest in favor of the indenture trustee.
The transferor believes that the likelihood
of this liability being asserted against the
assets of the trust or, if so asserted, being
successfully pursued, is remote. However, you
cannot be sure the lease contracts and leased
vehicles will not become subject to an ERISA
liability.
YEAR 2000 COMPUTER PROBLEMS
COULD
DELAY OR LIMIT PAYMENTS TO
YOU. - Some computers were not programmed to
recognize more than two digits in the year of
a given date. As a result, in the year
13
<PAGE> 15
2000, those computers will not know whether
an "00" refers to the year 1900 or the year
2000. To the extent that computer systems of
the administrative agent, maintenance
provider, indenture trustee or any parties
that they rely on continue to have these
problems in the year 2000 and later, you
could experience delays in payments due to
you or may not ultimately receive all
interest and principal due to you. In
addition, if lessees under the specified
leases experience computer problems in the
year 2000 or later, they may default or make
late payments under the specified leases. As
a result, you could experience delays in
payments due to you or may not ultimately
receive all principal and interest due to
you.
For a discussion of Ryder's year 2000
preparations by and how they may affect the
trust and the senior notes, see "Ryder --
Year 2000 Preparations".
A CHANGE OR WITHDRAWAL BY THE
RATING
AGENCIES OF THEIR INITIAL
RATINGS MAY
REDUCE THE MARKET VALUE OF THE
SENIOR
NOTES. - A security rating is not a recommendation by
a rating agency that you buy, sell or hold
securities. Similar ratings on different
types of securities do not necessarily mean
the same thing. You are encouraged to analyze
the significance of each rating independently
from any other rating. Any rating agency may
change its rating of the senior notes after
the senior notes are issued if that rating
agency believes that circumstances have
changed. A rating downgrade may reduce the
price that a subsequent purchaser will be
willing to pay for the senior notes.
IF THE TRUST IS REQUIRED TO
SELL ITS
ASSETS, YOU MAY SUFFER A LOSS
ON YOUR
INVESTMENT. - If the transferor becomes bankrupt or
insolvent, the trust will be dissolved and
the indenture trustee will be required to
sell the assets of the trust, including the
SUBI certificates, on commercially reasonable
terms. Because the bankruptcy of the
transferor will also require the origination
trust to be terminated with respect to
holding the SUBI assets, the SUBI assets will
be distributed to the purchaser of the
trust's assets and the specified vehicles
will be retitled at the direction of that
purchaser. The indenture trustee will
distribute the proceeds from the sale of the
trust's assets and monies on deposit in the
reserve fund and the residual value surplus
account, after the payment of certain unpaid
fees and reimbursement of outstanding
advances made by the administrative agent to
the trust, first to the senior note holders
for interest due, second to the reserve fund
for interest due on the subordinated notes,
third to the certificate holders for interest
due, fourth to the Class A-1 Note holders
until the Class A-1 Notes have been paid in
full, fifth pro rata to each other class of
senior note holders based on their class'
note balances until the senior notes have
been paid in full, and sixth to the
certificate holders and the subordinated note
holders ratably -- with amounts paid on the
subordinated notes being paid to the reserve
fund. If these proceeds and amounts are not
sufficient to pay the senior notes in full,
you would incur a loss on your investment.
14
<PAGE> 16
THE FAILURE TO MAKE PRINCIPAL
PAYMENTS ON THE NOTES WILL
GENERALLY
NOT RESULT IN AN EVENT OF
DEFAULT. - You should be aware that the amount of
principal required to be paid to you prior to
the final scheduled payment date for a class
of senior notes generally will be limited to
amounts available for those purposes.
Therefore, the failure to repay principal of
a class of senior notes generally will not
result in the occurrence of an event of
default under the indenture until the final
scheduled payment date for the class of
notes.
THE SENIOR NOTES ARE NOT
SUITABLE
INVESTMENTS FOR ALL INVESTORS. - The senior notes are not a suitable
investment if you require a regular
predictable schedule of payments. The senior
notes are complex investments that should be
considered only by investors who, either
alone or with their financial, tax and legal
advisors, have the expertise to analyze
prepayment, reinvestment, default and market
risk, the tax consequences of an investment,
and the interaction of these factors.
OVERVIEW OF THE TRANSACTION
Please refer to page 4 for a diagram providing an overview of the
transaction described in this prospectus. You can find a listing of the pages
where capitalized terms used in this prospectus are defined under the caption
"Index of Principal Terms" Beginning on page 107.
Ryder Truck Rental, Inc. ("Ryder") has assigned, and will assign,
full-service commercial truck, highway tractor and trailer leases and the
related vehicles to Ryder Truck Rental LT, a Delaware business trust (the
"Origination Trust"). The Origination Trust was created in July 1997 to
facilitate the titling of trucks, tractors and trailers in connection with the
securitization of truck, tractor and trailer leases. The Origination Trust has
issued to Ryder Truck Rental I LP ("RTR I LP") and Ryder Truck Rental II LP
("RTR II LP" and, together with RTR I LP, the "UTI Beneficiaries") a 99% and a
1% beneficial interest, respectively, in the undivided trust interest (the
"UTI"). The UTI represents the entire beneficial interest in assets of the
Origination Trust that have not been allocated to special units of beneficial
interest such as the ones described in this prospectus. The trustee of the
Origination Trust will be directed by the UTI Beneficiaries:
- to establish two special units of beneficial interest (each a "1999-A
SUBI," and collectively, the "SUBIs");
- to allocate a separate portfolio of leases and some related assets of the
Origination Trust (the "Specified Leases") to one 1999-A SUBI (the "Lease
SUBI"); and
- to allocate the vehicles that are leased under the Specified Leases and
some other related assets of the Origination Trust (the "Specified
Vehicles") to the other 1999-A SUBI (the "Vehicle SUBI").
The SUBIs will represent the entire beneficial interest in the Specified Leases
and Specified Vehicles (collectively, the "SUBI Assets"). RTR I LP and RTR II LP
will respectively be issued 99% and 1% interests in each 1999-A SUBI. Upon
creation of each 1999-A SUBI, the related SUBI Assets will no longer be a part
of the Origination Trust Assets represented by the UTI, and the interest in the
Origination Trust Assets represented by the UTI will be reduced accordingly.
Each 1999-A SUBI will evidence an indirect beneficial interest, rather than a
direct legal interest, in the related SUBI Assets. Each 1999-A SUBI will not
represent a beneficial interest in any Origination Trust Assets other than the
related SUBI Assets. Payments made on or in respect of any Origination Trust
Assets other than the SUBI Assets will not be available to make payments on the
Senior Notes. The UTI Beneficiaries may from time to time cause special units of
beneficial interest other than the SUBIs (each, an "Other SUBI") to be created
out of the UTI. The Trust (and, accordingly, the Senior Noteholders) will have
no interest in the UTI, any Other SUBI or any assets of the Origination Trust
Assets evidenced by the UTI or any Other SUBI. See "The SUBIs" and "The
Origination Trust".
15
<PAGE> 17
RTR I LP will sell, transfer and assign its 99% interest in each 1999-A
SUBI (collectively, the "SUBI Interest") to Ryder Funding LP (the "Transferor").
The Transferor will in turn (a) transfer and assign the certificate representing
its 99% interest in the Vehicle SUBI (the "Vehicle SUBI Certificate") to Ryder
Vehicle Lease Trust 1999-A (the "Trust"), and (b) pledge the certificate
representing its 99% interest in the Lease SUBI (the "Lease SUBI Certificate",
and together with the Vehicle SUBI Certificate, the "SUBI Certificates") to the
Trust. RTR II LP will permanently retain the 1% beneficial interest in the SUBI
Assets not represented by the SUBI Certificates (the "Retained SUBI Interest").
The Trust will issue five classes of senior notes (the "Senior Notes") in an
aggregate principal amount of $282,900,000.00 (the "Initial Senior Note
Balance") and will pledge the Vehicle SUBI Certificate and its interest in the
Lease SUBI Certificate to the Indenture Trustee as security therefor. The Trust
will also issue one class of asset backed subordinated notes (the "Subordinated
Notes," and together with the Senior Notes, the "Notes") in an aggregate
principal amount of $13,023,237.85 (the "Initial Subordinated Note Balance") and
one class of asset backed certificates (the "Certificates") in an aggregate
principal amount of $10,858,575.00 (the "Initial Certificate Balance"). The
Senior Notes, the Subordinated Notes and the Certificates are collectively
referred to as the "Securities" and the holders of Securities are referred to as
"Securityholders". Each Note will represent an obligation of, and for some
non-tax purposes, each Certificate will represent a fractional undivided
interest in, the Trust. Payments in respect of the Subordinated Notes and the
Certificates will be subordinated to payments in respect of the Senior Notes to
the extent described in this prospectus. The Subordinated Notes and the
Certificates are not being offered to you in this offering.
On the date of initial issuance of the Securities (the "Closing Date"), the
Trust and the Transferor will enter into a program operating lease (the "Program
Operating Lease") under which the Trust will lease the Vehicle SUBI Certificate,
subject to the lien of the Indenture, to the Transferor in exchange for the
obligation of the Transferor to make certain payments during the period that
each underlying Specified Vehicle is covered by the Program Operating Lease. The
Trust will apply these payments, together with proceeds received from certain
sales of Specified Vehicles, to pay interest on and principal of the Securities.
As a condition to the issuance of the Senior Notes, Moody's Investors
Service, Inc. and Duff & Phelps Credit Rating Co. (each, a "Rating Agency"),
must each rate the Class A-1 Senior Notes in their highest short-term rating
category, and the remaining classes of Senior Notes in their highest long-term
rating category. See "Risk Factors -- A change or withdrawal by the rating
agencies of their initial ratings may reduce the market value of the senior
notes" and "Ratings of the Securities" for further information concerning the
ratings assigned to the Senior Notes, including the limitations of such ratings.
THE TRUST
Formation
The Trust will be formed under the laws of the State of Delaware solely for
the purposes of the transactions described in this prospectus. The Trust will be
governed by an amended and restated trust agreement, dated as of October 1, 1999
(the "Trust Agreement"), between the Transferor and Chase Manhattan Bank
Delaware, as Owner Trustee.
The Trust will issue the Senior Notes under an indenture dated as of
October 1, 1999 (the "Indenture"), between the Trust and U.S. Bank National
Association, as trustee (in that capacity, the "Indenture Trustee"). The
Subordinated Notes and the Certificates will be issued under the Trust
Agreement.
The Trust will not engage in any activity other than as duly authorized in
accordance with the terms of the Trust Agreement. On the Closing Date, the
authorized purposes of the Trust will be limited to:
- issuing the Securities;
- acquiring the Vehicle SUBI Certificate and the other property of the
Trust Estate with the proceeds from the sale of the Securities;
- assigning and pledging the Trust Estate to the Indenture Trustee;
16
<PAGE> 18
- leasing the Vehicle SUBI Certificate to the Transferor;
- making payments on the Securities;
- entering into and performing its obligations under the Basic Documents to
which it is a party; and
- engaging in other transactions, including entering into agreements, that
are necessary, suitable or convenient to accomplish, or that are
incidental to or connected with, any of the foregoing activities.
Approval of additional Trust activities and purposes may be requested by holders
of at least 75% of the outstanding balance of the Certificates and will require
(a) that each Rating Agency have delivered a letter to the effect that the
activities and purposes would not cause its then-current ratings of the Senior
Notes or the Certificates to be qualified, reduced or withdrawn, and (b)
approval by holders of at least 75% of the outstanding balance of the Senior
Notes, or if the Senior Notes are no longer outstanding, by the Subordinated
Noteholder.
Under an administration agreement, dated as of October 1, 1999 (the "Trust
Administration Agreement"), Ryder, as administrator (the "Administrator"), will
perform the Trust's administrative obligations under the Trust Agreement and the
Indenture.
The Trust's principal offices will be in Wilmington, Delaware, in care of
the Owner Trustee, at the address listed below under "The Owner Trustee".
Capitalization
On the Closing Date, the Trust will be capitalized with $306,781,812.85
aggregate principal amount of Securities. The Trust will sell the Senior Notes
and the Certificates, other than the Transferor Certificate, to third party
investors that are expected to be unaffiliated with the Transferor, the
Administrative Agent or their respective affiliates. In exchange for the
transfer of the Vehicle SUBI Certificate and the pledge of the Lease SUBI
Certificate, the Trust will pay the Transferor the net proceeds from the sale of
the Senior Notes and the Certificates, and will issue to the Transferor the
Subordinated Notes and a Certificate with a $108,575.75 principal balance, which
will approximately equal to 1% of the Initial Certificate Balance (the
"Transferor Certificate"). The following table illustrates the capitalization of
the Trust as of the Closing Date, as if the issuance and sale of the Securities
had taken place on that date:
<TABLE>
<S> <C>
Senior Notes........................................ $282,900,000.00
Subordinated Notes.................................. 13,023,237.85
Certificates........................................ 10,858,575.00
---------------
Total..................................... $306,781,812.85
===============
</TABLE>
The Owner Trustee
Chase Manhattan Bank Delaware will be the trustee (the "Owner Trustee")
under the Trust Agreement. Chase Manhattan Bank Delaware is a Delaware banking
corporation, and its Corporate Trust Office is located at 1201 Market Street,
Wilmington, Delaware 19801. The Transferor, the Administrative Agent and their
affiliates may maintain normal commercial banking relationships with the Owner
Trustee and its affiliates. The fees and expenses of the Owner Trustee will be
paid by the Administrator. See "Additional Document Provisions -- Miscellaneous
Provisions -- Fees and Expenses".
Property of the Trust
On the Closing Date, the Transferor will transfer the Vehicle SUBI
Certificate to the Trust pursuant to the Issuer SUBI Certificate Transfer
Agreement and will pledge the Lease SUBI Certificate to the Trust pursuant to
the Program Operating Lease. The Trust will then pledge its interest in each
SUBI Certificate to the Indenture Trustee under the Indenture and then, subject
to that pledge, will lease the Vehicle SUBI Certificate to the Transferor
pursuant to the Program Operating Lease. See "The SUBIs -- Transfers of the SUBI
Certificates".
17
<PAGE> 19
After giving effect to the transactions described in this prospectus, the
property of the Trust (the "Trust Estate") will include:
- the Vehicle SUBI Certificate, evidencing a 99% beneficial interest in the
assets allocated to the Vehicle SUBI (the "Vehicle SUBI Assets"),
including the right to payments thereunder from certain Sales Proceeds on
deposit in the SUBI Collection Account and the Residual Value Surplus
Account and investment earnings, net of losses and investment expenses,
on amounts on deposit in the SUBI Collection Account and the Residual
Value Surplus Account;
- the rights of the Trust under the Program Operating Lease;
- the rights of the Trust as pledgee of the Lease SUBI Certificate;
- the rights of the Trust as secured party under a back-up security
agreement with respect to the SUBI Certificates and the 99% undivided
interest in the SUBI Assets;
- the rights of the Trust to funds on deposit from time to time in the Note
Distribution Account and any other account or accounts established
pursuant to the Indenture;
- the rights of the Transferor, as transferee, under the SUBI Certificate
Transfer Agreement;
- the rights of the Trust, as transferee, under the Issuer SUBI Certificate
Transfer Agreement;
- the rights of the Trust as a third-party beneficiary under the
Administration Agreement, including rights to certain Advances, and the
SUBI Trust Agreement;
- the security interest of the Trust in the Subordinated Notes and the
Reserve Fund (including investment earnings, net of losses and investment
expenses, on amounts on deposit therein); and
- all proceeds of the foregoing.
The Indenture will require the Trust Estate to be pledged by the Trust to the
Indenture Trustee.
Because the SUBI will represent a beneficial interest in the SUBI Assets,
Senior Noteholders will be dependent on payments made on the Specified Leases
and proceeds received in connection with the sale or other disposition of
Specified Vehicles for the payment of interest on and principal of the Senior
Notes. The Trust will not have a direct ownership interest in the Specified
Leases or a direct ownership interest or perfected security interest in the
Specified Vehicles -- which will be titled in the name of the Origination Trust
or the Origination Trustee on behalf of the Origination Trust -- and it is
therefore possible that a claim or lien in respect of the Specified Vehicles or
the Origination Trust could limit the amounts payable in respect of the SUBI
Certificates to less than the amounts received from the lessees of the Specified
Vehicles (each, an "Obligor") or received from the sale or other disposition of
Specified Vehicles. To the extent that a claim or lien were to delay the
disposition of the Specified Vehicles or reduce the amount paid to the holders
of the SUBI Certificates in respect of their beneficial interests in the SUBI
Assets, Senior Noteholders could experience delays in payment or losses on their
investment. See "Risk Factors -- A bankruptcy of the transferor or the
administrative agent could delay or limit payments to you", "Risk Factors -- If
ERISA liens are placed on the assets of the trust, you could suffer a loss on
your investment", "The SUBIs", "Additional Legal Aspects of the Origination
Trust and the SUBIs -- The SUBIs" and "Additional Legal Aspects of the Specified
Leases and the Specified Vehicles -- Back-up Security Interests".
USE OF PROCEEDS
The net proceeds from the sale of the Senior Notes -- the proceeds of the
public offering minus expenses relating thereto -- together with the proceeds
from the private placement of the Certificates and the issuance of the
Subordinated Notes, will be applied by the Trust to acquire the Vehicle SUBI
Certificate and the pledge of the Lease SUBI Certificate from the Transferor.
18
<PAGE> 20
THE ORIGINATION TRUST
General
The Origination Trust is a Delaware business trust and is governed by an
amended and restated trust agreement dated as of February 1, 1998 (the
"Origination Trust Agreement"), among the UTI Beneficiaries, the Administrative
Agent, RTRT, Inc., as trustee (the "Origination Trustee"), Delaware Trust
Capital Management, Inc. and U.S. Bank National Association ("U.S. Bank"), as
trust agent (in that capacity, the "Trust Agent"). The assets of the Origination
Trust (the "Origination Trust Assets") consist of:
- full service operating leases (the "Leases") assigned to the Origination
Trust by Ryder;
- the commercial trucks, highway tractors and trailers leased under those
Leases (the "Vehicles"); and
- certain payments under the Leases, proceeds from sales of the Vehicles,
and other assets more fully described below.
The primary business purpose of the Origination Trust is to acquire from or at
the direction of Ryder, and serve as record holder of title to, the Leases and
Vehicles, in order to facilitate the titling of the Vehicles in connection with
asset backed securities issuance transactions.
Under an administration agreement dated as of February 1, 1998, as amended
by a supplement to be dated as of October 1, 1999 (as amended or supplemented
from time to time, the "Administration Agreement"), among the Origination Trust,
the UTI Beneficiaries, and Ryder, as administrative agent (in that capacity, the
"Administrative Agent"), Ryder will service the Leases, including the Specified
Leases, and, as maintenance provider (in that capacity, the "Maintenance
Provider"), will provide specified services and maintenance in respect of the
Vehicles, including the Specified Vehicles.
Except as otherwise described under "Additional Document Provisions -- The
SUBI Trust Agreement," under the Origination Trust Agreement, the Origination
Trust has not and will not:
- issue interests or securities other than the SUBI Interest and the
Retained SUBI Interest, the SUBI Certificates, the Retained SUBI
Certificates, Other SUBIs, one or more certificates representing each
Other SUBI (the "Other SUBI Certificates"), the UTI and one or more
certificates representing the UTI (the "UTI Certificates");
- borrow money, except from Ryder or the UTI Beneficiaries in connection
with funds used to acquire Leases and Vehicles;
- make loans;
- invest in or underwrite securities;
- offer securities in exchange for Origination Trust Assets, with the
exception of the SUBI Certificates, the Retained SUBI Certificates, Other
SUBI Certificates and the UTI Certificates;
- repurchase or otherwise reacquire its securities, other than for purposes
of cancellation, except as permitted by or in connection with financing
or refinancing the acquisition of Leases and Vehicles or as otherwise
permitted by each such financing or refinancing; or
- grant any security interest in or lien on any Origination Trust Assets.
For further information regarding the Origination Trust, the servicing of the
Leases and the providing of services and maintenance in respect of the Vehicles,
see "Additional Document Provisions -- The SUBI Trust Agreement" and "-- The
Administration Agreement".
The UTI Beneficiaries
RTR I LP and RTR II LP are the UTI Beneficiaries under the Origination
Trust Agreement. The sole general partners of RTR I LP and RTR II LP are Ryder
Truck Rental I LLC ("RTR I LLC") and Ryder Truck Rental II LLC ("RTR II LLC"),
respectively, each a Delaware limited liability company. Ryder is
19
<PAGE> 21
the sole limited partner of each of the UTI Beneficiaries. The UTI Beneficiaries
were formed as limited partnerships under the laws of Delaware in June 1997 for
the sole purpose of being initial beneficiaries of the Origination Trust,
holding the UTI and the UTI Certificates, acquiring interests in the SUBI and
Other SUBIs and engaging in related transactions. The limited liability company
operating agreements of each of RTR I LLC and RTR II LLC and the limited
partnership agreements of each UTI Beneficiary limit their respective activities
to the foregoing purposes and to any activities incidental thereto or necessary
therefor. So long as any financings involving interests in the Origination
Trust, including the transaction described in this prospectus, are outstanding,
neither RTR I LLC nor RTR II LLC may transfer its general partnership interest
in the related UTI Beneficiary. The principal offices of RTR I LP and RTR II LP
are located at 3600 N.W. 82nd Avenue, Miami, Florida 33166 and their telephone
number is (305) 500-3726.
The Origination Trustee
The Origination Trustee is a wholly owned special purpose subsidiary of
U.S. Bank and was incorporated in June 1997 for the sole purpose of acting as
Origination Trustee. The Origination Trustee is not affiliated with Ryder or any
of its affiliates. U.S. Bank, as Trust Agent, serves as agent for the
Origination Trustee to perform some functions of the Origination Trustee under
the Origination Trust Agreement. Under the Origination Trust Agreement, if U.S.
Bank can no longer act as the Trust Agent, the designees of the UTI
Beneficiaries which may not be either UTI Beneficiary or any of their
affiliates -- will have the option to purchase the stock of the Origination
Trustee for a nominal amount. If the UTI Beneficiaries do not timely exercise
that option, the Origination Trustee will appoint a new trust agent which will
have the option to purchase the stock of the Origination Trustee. If none of
these options is timely exercised, U.S. Bank may sell the stock of the
Origination Trustee to another party.
Property of the Origination Trust
The Origination Trust Assets generally consist of:
- Leases originated by Ryder and all monies due from Obligors thereunder;
- Vehicles and all proceeds of those Vehicles;
- all of Ryder's rights with respect to those Leases and Vehicles;
- the rights to proceeds from any physical damage, liability or other
insurance policies, if any, covering the Leases or the related Obligors
or the Vehicles, including but not limited to the Contingent and Excess
Liability Insurance; and
- all proceeds of the foregoing.
From time to time after the date of this prospectus, Ryder will assign
additional Leases to the Origination Trust and, as described below, title the
related Vehicles in the name of the Origination Trust or the Origination Trustee
on behalf of the Origination Trust. During the Titling Grace Period, Vehicles
titled in the name of Ryder and having a Cutoff Date Securitization Value of not
more than $4,900,848 will be titled in the name of the Origination Trust or the
Origination Trustee on behalf of the Origination Trust and allocated to the
SUBIs, thereby becoming SUBI Assets. See "Additional Legal Aspects of the
Specified Leases and the Specified Vehicles -- Titling Grace Period -- Lack of
Perfected Ownership Interest".
Lease Origination and the Titling of Vehicles
All Leases have been or will be underwritten using the underwriting
criteria described under "Ryder -- Lease Underwriting Procedures". Under each
Lease, the Origination Trust, or the Origination Trustee on behalf of the
Origination Trust, will be listed as the owner of the related Vehicle on the
Vehicle's certificate of title. Liens will not be placed on the certificates of
title, nor will new certificates of title be issued, to reflect the interest of
the Trust, as holder of the Vehicle SUBI Certificate, in the Specified Vehicles.
After the sale of the Vehicle SUBI Certificate to the Trust, the
Administrative Agent will be obligated to repurchase any Vehicles covered by
Leases not meeting certain representations and warranties of the
20
<PAGE> 22
Administrative Agent by making Reallocation Payments in respect thereof. Those
representations and warranties relate primarily to the origination of the
Leases, and do not typically relate to the creditworthiness of the related
Obligors or the collectibility of the Leases.
All of the Specified Vehicles will either be titled in the name of the
Origination Trust or the Origination Trustee on behalf of the Origination Trust
by the Closing Date, or will be titled in the name of Ryder but will be
re-titled into the name of the Origination Trust or the Origination Trustee on
behalf of the Origination Trust within 60 days after the Closing Date (the
"Titling Grace Period"). Specified Vehicles relating to Specified Leases having
an aggregate Cutoff Date Securitization Value of not less than $304,979,771.04
will be titled in the name of the Origination Trust or the Origination Trustee
on behalf of the Origination Trust by the Closing Date. Specified Vehicles
relating to Specified Leases having an aggregate Cutoff Date Securitization
Value not to exceed $4,900,848.00 will be titled in the name of the Origination
Trust or the Origination Trustee on behalf of the Origination Trust during the
Titling Grace Period. If the Administrative Agent fails to properly retitle any
Titling Grace Period Vehicle, it will be required to make a payment equal to the
Securitization Value of the related Specified Lease as of the last day of the
Titling Grace Period. See "Risk Factors -- During a titling grace period the
origination trust will lack a perfected ownership interest in some vehicles" and
"Additional Legal Aspects of the Specified Leases and the Specified
Vehicles -- Titling Grace Period -- Lack of Perfected Ownership Interest". Other
Leases and Vehicles will also to be assigned to the Origination Trust after the
Closing Date but will not constitute Specified Leases or Specified Vehicles.
All Vehicles owned by the Origination Trust will be held for the benefit of
entities that from time to time hold beneficial interests in the Origination
Trust. Those interests will be evidenced with respect to:
- Leases and Vehicles not allocated to the 1999-A SUBIs or an Other SUBI,
by the UTI,
- the Specified Leases and the Specified Vehicles, by the 1999-A SUBIs, or
- Leases and Vehicles financed in another transaction, by an Other SUBI.
Entities holding beneficial interests in the Origination Trust will not have a
direct ownership in the related Leases or a direct ownership or perfected
security interest in the related Vehicles.
The certificates of title for the Specified Vehicles will not reflect the
indirect interest of the Trust in the Specified Vehicles by virtue of its
beneficial interest in the Vehicle SUBI Assets. Therefore, if the Senior Notes
were recharacterized as secured loans, the Trust would not have a perfected lien
in the Specified Vehicles, but will have filed a financing statement to perfect
the security interest in the Vehicle SUBI Assets, but only to the extent that
the security interest may be perfected by filing under the UCC. For further
information regarding the titling of the Specified Vehicles and the interest of
the Trust therein, see "Additional Legal Aspects of the Specified Leases and the
Specified Vehicles -- Back-up Security Interests".
THE SUBIs
General
Each 1999-A SUBI will be issued by the Origination Trust under a
supplement, dated as of October 1, 1999 (the "SUBI Supplement" and, together
with the Origination Trust Agreement, the "SUBI Trust Agreement"), to the
Origination Trust Agreement. The 1999-A SUBIs will not represent a direct
interest in the related SUBI Assets or an interest in any Origination Trust
Assets other than the related SUBI Assets. The Trust and the Senior Noteholders
will have no interest in the UTI, any Other SUBI or any assets of the
Origination Trust evidenced by the UTI or any Other SUBI. Payments made on or in
respect of Origination Trust Assets not represented by the SUBIs will not be
available to make payments on the Senior Notes. For further information
regarding the Origination Trust, see "The Origination Trust".
The Lease SUBI Certificate will evidence a beneficial interest in the
assets allocated to the Lease SUBI (the "Lease SUBI Assets"), which will
generally consist of the Specified Leases and all proceeds of or
21
<PAGE> 23
payments on those leases received or due on or after October 1, 1999 (the
"Cutoff Date") and all other related Lease SUBI Assets, including:
- amounts in the SUBI Collection Account received in respect of the
Specified Leases,
- certain monies due under or payable in respect of the Specified Leases on
or after the Cutoff Date, including the right to receive payments made to
Ryder, the Transferor, the Origination Trust, the Origination Trustee or
the Administrative Agent under any insurance policy relating to the
Specified Leases or the related Obligors, and
- all proceeds of the foregoing.
The Vehicle SUBI Certificate will evidence a beneficial interest in the
Vehicle SUBI Assets, which will generally consist of the Specified Vehicles and
all proceeds of or payments on those vehicles received or due on or after the
Cutoff Date and all other related Vehicle SUBI Assets, including:
- amounts in the SUBI Collection Account received in respect of the sale of
the Specified Vehicles and the Residual Value Surplus Account,
- certain monies due under or payable in respect of the Specified Vehicles
on or after the Cutoff Date, including the right to receive payments made
to Ryder, the Transferor, the Origination Trust, the Origination Trustee
or the Administrative Agent under any insurance policies related to the
Specified Vehicles, and
- all proceeds of the foregoing.
On the Closing Date, the Origination Trust will issue (a) the SUBI
Certificates, evidencing the SUBI Interest, to RTR I LP and (b) certificates
evidencing the Retained SUBI Interest (the "Retained SUBI Certificates"), to RTR
II LP. RTR II LP will permanently retain the Retained SUBI Certificates and will
be entitled to receive 1% of all payments made on or in respect of the SUBI
Assets and will share in 1% of all losses and liabilities incurred with respect
to the SUBI Assets. Accordingly, payments made in respect of the Retained SUBI
Certificates will not be available to make payments on the Senior Notes, the
Subordinated Notes or the Certificates.
Transfers of the SUBI Certificates
Simultaneously with the issuance of the SUBI Certificates to RTR I LP, RTR
I LP will convey the SUBI Certificates to the Transferor pursuant to a transfer
agreement, dated as of October 1, 1999 (the "SUBI Certificate Transfer
Agreement"). RTR I LP will covenant to treat the conveyance of the SUBI
Certificates to the Transferor as an absolute sale, transfer and assignment for
all purposes.
Immediately after the transfer of the SUBI Certificates to the Transferor,
the Transferor will:
- transfer to the Trust, without recourse, all of its right, title and
interest in and to the Vehicle SUBI Certificate and the SUBI Interest it
represents under a transfer agreement, dated as of October 1, 1999 (the
"Issuer SUBI Certificate Transfer Agreement");
- deliver the Vehicle SUBI Certificate to the Trust;
- pledge the Lease SUBI Certificate, and the SUBI Interest it represents,
to the Trust under the Program Operating Lease as security for the
obligations of the Transferor under the Program Operating Lease; and
- deliver the Lease SUBI Certificate to the Trust to perfect the pledge.
In exchange, the Trust will pay to the Transferor the net proceeds from the sale
of the Senior Notes and Certificates (other than the Transferor Certificate) to
third party investors, and will issue to the Transferor the Subordinated Notes
and the Transferor Certificate.
Immediately following the transfer of the Vehicle SUBI Certificate and the
pledge of the Lease SUBI Certificate to the Trust, the Trust will pledge its
interest in the Trust Estate, which includes the Vehicle
22
<PAGE> 24
SUBI Certificate and the pledge of the Lease SUBI Certificate, to the Indenture
Trustee as security for the Senior Notes. The Trust and the Transferor will then
enter into the Program Operating Lease, under which the Trust will lease the
Vehicle SUBI Certificate to the Transferor, subject to the pledge thereof to the
Indenture Trustee. During the term of the Program Operating Lease, the
Transferor, as lessee of the Vehicle SUBI Certificate, will be required to make
Program Operating Lease Payments to the Trust and will be entitled to receive
proceeds from the Vehicle SUBI Certificate -- as well as from the Lease SUBI
Certificate -- in respect of the Specified Vehicles to the extent described
under "Security for the Securities -- The Program Operating Lease".
THE TRANSFEROR
The Transferor is a limited partnership that was formed under the laws of
Delaware in May 1998. The sole general partner of the Transferor is Ryder Truck
Rental III LLC ("RTR III LLC"), a Delaware limited liability company. RTR III
LLC may not transfer its general partnership interest in the Transferor so long
as any financings involving interests held by the Transferor at any time in the
Origination Trust, including the transaction described in this prospectus, are
outstanding. Ryder is the sole limited partner of the Transferor. The principal
office of the Transferor is located at 3600 N.W. 82nd Avenue, Miami, Florida
33166 and its telephone number is (305) 500-3726.
The Transferor and RTR III LLC were organized solely for the purpose of
acquiring interests in the UTI, the SUBIs and Other SUBIs, causing securities
like the Senior Notes to be issued, and engaging in related transactions. The
limited partnership agreement of the Transferor and the limited liability
company agreement of RTR III LLC limit their respective activities to those
purposes and to any activities incidental or necessary thereto.
RYDER
General
All of the Leases, including the Specified Leases, have been originated by
Ryder in the ordinary course of its leasing business using the underwriting
criteria described under "Ryder -- Lease Underwriting Procedures". Additionally,
Ryder, as the Administrative Agent, will service the Leases, including the
Specified Leases, and, as Maintenance Provider, will provide specified services
and maintenance in respect of the Vehicles, including the Specified Vehicles.
Ryder is a Florida corporation that was incorporated in 1953. Ryder
provides full service truck leasing to about 13,000 commercial customers ranging
from large national enterprises to small companies. As of December 31, 1998,
Ryder had a fleet of 109,124 vehicles -- including 14,751 vehicles leased to
affiliates -- leased or rented through 894 locations in 48 states, Puerto Rico,
and 8 Canadian provinces. Under a full service lease, Ryder provides its
customers with vehicles, maintenance, supplies and related equipment necessary
for operation, while its customers furnish and supervise their own drivers, and
dispatch and exercise control over the related vehicles. Additionally, as of
December 31, 1998, Ryder provided contract maintenance services to more than
1,500 customers, serviced 44,856 vehicles -- including approximately 9,560
vehicles owned by affiliates -- under maintenance contracts. Ryder also provided
short-term truck rentals, which tends to be seasonal, to commercial customers to
supplement their fleets during peak business periods. As of December 31, 1998,
Ryder had a fleet of 37,517 vehicles, ranging from heavy-duty tractors and
trailers to light-duty trucks, available for commercial short-term rental.
Ryder is a wholly owned subsidiary of Ryder System, Inc. ("Ryder System").
Ryder System is a publicly held Florida corporation that was incorporated in
1955. Through its subsidiaries, Ryder System engages primarily in the following
businesses:
- full service leasing, maintenance and short-term commercial rental of
trucks, highway tractors and trailers and
- integrated logistics, including dedicated contract carriage, the
management of carriers and inventory deployment.
23
<PAGE> 25
Ryder System's common stock, which is listed and traded on the New York
Stock Exchange under the symbol "R", is a component of both the Dow Jones
Transportation Average and the Standard & Poor's 500 Index. As of December 31,
1998, Ryder System and its subsidiaries had a fleet of 173,116 vehicles and
45,373 employees.
Further information regarding Ryder System and its subsidiaries, including
Ryder, is available in the periodic reports Ryder System files with the SEC. For
the location of the SEC's reference locations and internet address at which such
information is available see "Available Information".
Shared Services Center
Ryder has consolidated most financial administrative functions, including
collections and underwriting, into its Shared Services Center, a centralized
processing center located in Alpharetta, Georgia. This change is intended to
result in more efficient and consistent centralized processing of selected
administrative operations. The Shared Service Center was developed to:
- reduce on-going annual administrative costs;
- enhance customer service through process standardization;
- create an organizational structure that will improve market flexibility;
and
- allow future reengineering efforts to be more easily attained at lower
implementation costs.
The transfer of functions to the Shared Service Center was completed in December
1997.
The Leases
Use and Nature of the Vehicles
Ryder furnishes commercial trucks, highway tractors and trailers to a wide
range of customers under full service operating leases with terms running
typically five or six years. Full service leasing is Ryder's and Ryder System's
largest product line, with about 13,000 customers and approximately 109,000
vehicles on lease in the United States and Canada. The leased vehicles may be
generically configured or they may be specialized units with refrigeration
systems or other application-specific equipment.
Ryder purchases trucks and highway tractors from manufacturers such as
Navistar/International, Freightliner, Mack, Volvo and Isuzu, and trailers from
manufacturers such as Utility and Stoughton. Ryder also specifies many of the
components used by those vehicle vendors. Ryder purchases such components from
various manufacturers, including Cummins engines, Bridgestone tires, Meritor
Automotive clutches, transmissions, axles, brakes and drivelines, ASF Castloc
fifth wheels, Kysor fan clutches, Bendix valves and Accuride wheels.
Full-service truck leases are designed for customers who wish to manage
their own transportation systems without investing the capital and human
resources necessary to purchase and maintain a fleet. Ryder offers its customers
a flexible range of full-service truck leasing products and virtually all of the
support services needed to operate them, including safety and regulatory
compliance programs, vehicle specification and acquisition support, preventive
maintenance, licensing and permitting, emergency road service, fuel and fuel tax
reporting, vehicle painting and washing and vehicle liability and protection
programs. Companies in a variety of industries, such as the beverage, baking and
snack, newspaper, grocery, chemicals, retail and automotive aftermarket parts
industries, lease their trucks from Ryder.
Truck Lease and Service Agreement
Ryder's Truck Lease and Service Agreement (each, a "TLSA") is a contract
between Ryder, and an Obligor, that, when taken together with the lease schedule
for a Vehicle (each, a "Schedule A" and, together with a TLSA, a "Lease"),
requires the Obligor to make Total Monthly Payments for a predetermined number
of months in exchange for the use of one or more Vehicles. In addition to use of
the Vehicle, to the extent set forth in the related Lease, the Obligor will also
be entitled to receive other services related to that Vehicle. Maintenance and
mechanical repair of the Vehicle by Ryder, however, is almost always included.
The terms of a Lease do not separate the payment for Vehicle use from the
payment for maintenance and other goods and services within the Total Monthly
Payment. See "-- Lease Payments". At the scheduled maturity or other termination
of a Lease (the "Maturity Date"), the Obligor must return the related Vehicle
24
<PAGE> 26
to Ryder at a specified maintenance facility and must restore the Vehicle to its
original condition, if any structural alterations have been made by the Obligor.
The TLSA is a form of master lease that describes the general terms of the
Lease and the respective rights and obligations of Ryder and the Obligor. These
terms, unless amended, apply to all Vehicles leased under a TLSA. Every Schedule
A describes each particular Vehicle being leased, its Fixed Charge, the term of
its lease (the "Lease Term") and the depreciation schedule and other specific
terms of the Lease, including the party responsible for maintaining liability
insurance on the Vehicle and the party responsible for physical risk of loss or
damage to the Vehicle. The Schedule A also specifies each Vehicle's domicile and
the location of the maintenance facility where the Vehicle will be routinely
maintained and repaired.
A typical full-service operating Lease will provide for payments based on,
among other things, the original value of the Vehicle leased thereunder, the
amount of total depreciation over the Lease Term and the prorated cost of all
unexpired license fees, applicable taxes and other expenses prepaid by Ryder for
the Vehicle, as well as payments for various other goods and services Ryder
provides in connection with the Vehicle. Both the financial and service
commitments of the parties are covered by the Lease and, accordingly, both Ryder
and the Obligor have continuing performance obligations during the term of the
Lease. In connection with the origination of a Lease, Ryder modifies its
standard Lease in the ordinary course of its business to meet the requirements
of the related Obligor and all descriptions of a Lease contained in this
prospectus are of a typical or illustrative Lease. Modifications may affect,
among other things, the services provided, the payment terms, the allocation of
risk and the parties' respective rights and obligations upon termination or
breach. A breach of or default under a Lease may result in the termination of
the Lease. The termination may occur either (a) as part of the termination of a
master lease, thus effecting the termination of all Vehicles leased under the
master lease arrangement, or (b) only with respect to the specific Vehicle
directly affected by the breach or default.
Maintenance and Services Provided
A typical Lease may cover:
- maintenance and repair of the related Vehicles by Ryder at a specified
maintenance facility, including all labor and parts;
- exterior washing of the Vehicles;
- specification assistance, whereby Ryder will assist the Obligor in
formulating appropriate specifications based on the Obligor's intended
use of the Vehicles;
- supplying the Obligor with one or more substitute Vehicles (each, a
"Substitute Vehicle"), at no extra cost to the Obligor, if a mechanical
failure renders a Vehicle temporarily inoperable;
- emergency road service in the event that a Vehicle suffers mechanical or
tire failure;
- initial exterior painting and lettering, up to a specified allowance, at
the time the Vehicles are placed into service;
- licensing and payment of certain specified taxes, up to a specified
annual amount;
- enrollment of the Obligor in a Vehicle-related safety program;
- the provision of fuel, whether by Ryder or the Obligor;
- whether Ryder will extend its liability insurance to cover the Obligor
for the Vehicles and any Substitute Vehicles (the "Insured Vehicles");
and
- whether Ryder or the Obligor assumes the risk of physical damage to and
theft and loss of the Vehicles or any Substitute Vehicles. See
"-- Insurance".
A Lease may provide that Ryder will supply the Obligor with a substitute
vehicle at no extra cost if a mechanical failure renders a Vehicle temporarily
inoperable. The Fixed Charge on a Vehicle, more fully described under "-- Lease
Payments", will continue to accrue on a Vehicle if the Vehicle is out of service
due
25
<PAGE> 27
to a temporary mechanical failure unless Ryder fails to provide a Substitute
Vehicle, in which event the Fixed Charge will not continue to accrue until the
Vehicle is repaired. Ryder will not provide a Substitute Vehicle when:
- a Vehicle is out of service for the performance of scheduled preventative
maintenance;
- a Vehicle is out of service for the repair of physical damage, such as
that caused by collision, fire, vandalism or Act of God;
- a Vehicle is out of service because the Obligor has violated the related
Lease;
- a Vehicle has been stolen;
- a Vehicle has been outfitted with special equipment or has otherwise been
customized for use by the Obligor; or
- special equipment, which Ryder is not contracted to maintain, is being
repaired.
If a Vehicle is out of service for the repair of physical damage, Ryder will
rent the related Obligor a replacement vehicle at a rental rate equal to the
lease rate on the related Lease; however, the Fixed Charge on the out of service
Vehicle will continue to accrue. Ryder may also rent Obligors additional
Vehicles for short-term use so that the Obligor can manage fluctuations in its
needs, and the rates therefor may be set forth in the related Lease.
Although Ryder may be responsible for providing fuel to the related
Vehicles under a Lease, the Lease will not include charges for any fuel so
provided. All fuel charges are separately billed to the Obligor on a monthly
basis. If Ryder is responsible for providing fuel, it obtains all applicable
fuel tax permits, prepares and files fuel tax returns and pays the taxes imposed
on the consumption of fuel, which amounts are billed to the Obligor. If the
Obligor provides fuel, then it performs those fuel tax permitting and reporting
functions and indemnifies Ryder for any liability for the failure to pay all
applicable fuel taxes.
Vehicle Operating Rules
Under the terms and conditions applicable to each Lease of a Vehicle, an
Obligor must:
- operate the related Vehicles in the normal and ordinary course of its
business;
- comply with all federal, state and local laws and regulations;
- not use the Vehicles in a reckless or abusive manner;
- operate the Vehicles only within the United States or, occasionally,
Canada, and pay for all charges that accrue if a Vehicle is detained
outside of these countries;
- if the Obligor operates a Vehicle, such as a trailer, while it is
connected to a vehicle that Ryder does not maintain, maintain the
connected vehicle in good operating condition; and
- pay for all physical damage, repairs, maintenance and expenses resulting
from operation of a Vehicle in violation of any of the Lease
restrictions.
Drivers
Under a Lease, only properly licensed and qualified drivers under the
Obligor's exclusive direction and control are permitted to operate the Vehicles.
Ryder reserves the right to request in writing that the Obligor remove unsafe or
incompetent drivers based on their safety record, accident experience or
driver's license status. If Ryder asks an Obligor to remove a driver and the
Obligor fails to comply with that request, then any or all of the following may
apply:
- the Obligor must reimburse Ryder for any damages occurring while the
driver asked to be removed operates the Vehicle, even if Ryder assumed
responsibility for paying for physical damage to the Vehicle,
26
<PAGE> 28
- even if Ryder extended liability insurance to the Obligor, the Obligor
must defend, release, indemnify and hold harmless Ryder for all damages
and defense costs resulting from the driver's operation of the Vehicle,
- Ryder may cancel any liability insurance it extended to the Obligor by
providing the Obligor with 30 days' prior written notice, or
- Ryder may terminate any physical damage coverage it extended to the
Obligor by providing the Obligor with 30 days' prior written notice; if
Ryder terminates the physical damage coverage, the Obligor will become
responsible for all physical damage to the Vehicles, and must provide
Ryder with proof of satisfactory physical damage insurance.
Obligor Expenses
With respect to each Vehicle an Obligor leases pursuant to a Lease, the
Obligor is responsible for the following expenses:
- taxes, licenses, fees and tolls (collectively, "Taxes") arising from the
use or operation of the Vehicle, other than those items Ryder has
contracted to pay for or provide, including sales, use, excise, gross
receipts or any similar tax, and any special license fees or taxes
resulting from the operation and use of the Vehicle by the Obligor;
- any excess over the annual allowances that may be stated in the Lease for
state motor vehicle license fees, registration fees, vehicle inspection
fees, personal property taxes, federal vehicle use taxes and fuel tax
permits;
- any increased costs resulting from a change in the assessment method for
any of the preceding items;
- reimbursement of Ryder for settlement of a claim or lien resulting from
the Obligor's failure to pay any taxes, fees or tolls on the Leased
Vehicles; and
- all damages, repairs, maintenance and related expenses resulting from the
operation of the Vehicles in violation of the Lease terms.
The foregoing items comprise part of the Maintenance Component of Total Monthly
Payments and will not be available to make payments in respect of the Senior
Notes, the Subordinated Notes or the Certificates.
Accidents, Vehicle Theft or Vehicle Destruction
The Leases require the Obligors to notify Ryder immediately of any accident
involving an Insured Vehicle, to provide Ryder with a detailed report of the
accident and to cooperate with Ryder and the insurer of the Insured Vehicle in
defending any claim. Within 30 days after that notice, Ryder will determine if
the Insured Vehicle is damaged beyond economic repair. If so, once the related
Obligor pays Ryder all amounts owed under the Lease for the Insured Vehicle,
including any proceeds owed under any physical damage insurance policy obtained
by the Obligor, the Lease will terminate as to the Insured Vehicle.
The Obligors must also notify Ryder immediately if an Insured Vehicle is
lost or stolen. If an Insured Vehicle is not located within 30 days after that
notice, the related Lease will terminate as to the Insured Vehicle once the
related Obligor pays Ryder all amounts owed to Ryder for the Insured Vehicle
under the Lease, including any proceeds received by the Obligor under any
physical damage insurance policy.
Cargo Loss
Ryder is not responsible for the loss of or damage to cargo carried in or
on any Insured Vehicle, even if the loss or damage is caused by Ryder's
negligence.
Annual Termination Option
The Leases generally contain an annual termination option (the "Annual
Termination Option") which permits either Ryder or the Obligor to terminate a
Lease on the annual anniversary of the date the related Vehicle was delivered to
the Obligor, or with respect to some Leases, more frequently, by giving the
other party at least 60 days' written notice of its election to exercise the
Annual Termination Option. If Ryder exercises the Annual Termination Option on a
Lease, the related Obligor will have the right, but not the
27
<PAGE> 29
obligation, to purchase the related Vehicle. If an Obligor exercises the Annual
Termination Option on a Lease, Ryder has the option to require the Obligor to
purchase the related Vehicle on the effective date of the termination.
If an Obligor elects or is required to purchase a Vehicle in connection
with the exercise of the Annual Termination Option, the Obligor must remit a
payment to Ryder (the "Termination Value Payment") in the amount specified in
the Schedule A as the termination value of the Vehicle (the "Termination
Value"). Additionally, the Obligor must pay all sales and use taxes relating to
the purchase. The Termination Value of a Vehicle ordinarily will exceed its
Residual Value. If an Obligor fails to purchase a Vehicle when required to do
so, Ryder may solicit wholesale cash bids for the Vehicle and require the
Obligor to pay the difference between the highest bid and the Termination Value
of the Vehicle.
Obligors have neither the right nor the obligation to purchase a Vehicle at
the Maturity Date of the related Lease.
If an Obligor becomes bankrupt or insolvent, then the Obligor may have the
right to reject some or all of the Leases relating to the Obligor, in which case
the Obligor would not be required to perform its obligations under the Leases,
and although Ryder could treat the Leases as having been terminated, Ryder could
not enforce any requirement that the Obligor purchase the related Obligor
Vehicles.
Lease Underwriting Procedures
The underwriting or credit review and approval area is responsible for all
credit requests for potential and existing lease customers of Ryder. The credit
decision for a potential customer is based on an analysis of financial
information obtained from third party sources, bank and trade references, as
well as Ryder's experience with respect to the customer's payment performance.
The tools available to Ryder's underwriting staff include numerous automated
tools provided by the Dun & Bradstreet Corporation. Ryder's credit policy has
been centralized at the Shared Service Center with extensive oversight by
Ryder's corporate headquarters. For example, credit personnel are not able to
extend credit or increase credit limits beyond certain predetermined guidelines,
which are enforced by corporate headquarters. Any requests beyond the
predetermined limits require corporate approval.
Insurance
Liability Insurance and Indemnity
Each Lease specifies whether Ryder or the Obligor is responsible for
procuring and maintaining liability insurance on the related Vehicles and any
Substitute Vehicles. The liability insurance must cover both parties, either as
an insured or additional insured, for the ownership, maintenance, use and
operation of the Vehicles, up to certain specified per-occurrence dollar limits.
If the Obligor fails to obtain required liability insurance, then it must
indemnify Ryder for all damages arising out of the ownership, maintenance, use
or operation of the Vehicles. The insurer must be acceptable to Ryder, and the
liability insurance must provide primary coverage, rather than additional or
excess coverage. If Ryder extends its liability insurance to the Obligor, it may
terminate the extension of the insurance by providing the Obligor with 30 days'
prior written notice. The Obligor must then obtain the required liability
insurance from a third party insurer.
Each Lease requires the Obligor to indemnify Ryder for all damages in
excess of the liability insurance arising out of the ownership, maintenance, use
or operation of the Insured Vehicles and injuries or death to the Obligor or the
Obligor's employees, drivers or agents arising out of the ownership,
maintenance, use or operation of the Insured Vehicles.
Physical Damage
Obligor Risk of Loss. If an Obligor is required by a Lease to be
responsible for physical damage, the Obligor must pay for all physical damage,
including theft and loss, to the related Vehicles, even if the damage occurs as
a result of Ryder's negligence or on Ryder's premises. If a Vehicle is repaired
by a garage that Ryder has not approved and the repair is defective, then Ryder
may re-repair the Vehicle at the Obligor's expense. The Obligor must furnish
Ryder with evidence of reasonably acceptable physical damage insurance coverage
on the Vehicles, listing Ryder as the named insured or endorsed as the loss
payee. Ryder reserves the right to retain the salvage value of any Vehicle that
is damaged beyond economic repair. If Ryder elects
28
<PAGE> 30
to retain the salvage value, it will deduct the salvage value from the amount
owed to Ryder by the related Obligor for the Vehicle.
Ryder Risk of Loss. If a Lease requires Ryder to be responsible for
physical damage to the related Vehicles, then Ryder assumes the risk of all
physical damage to and loss and theft of the Insured Vehicles, except that:
- the Obligor remains responsible for the deductible amount per occurrence
as specified in the Schedule A;
- Ryder will not pay, and the Obligor is responsible, for physical damage
caused by the Obligor's violation of the Lease terms and for any willful
damage to an Insured Vehicle, including (1) damage caused in a labor
dispute involving the Obligor or (2) any theft or conversion of an
Insured Vehicle by the Obligor's employees or agents; Ryder will be
entitled to retain the salvage value of any Insured Vehicle that is
damaged beyond economic repair through an excluded peril, in which case
the salvage value of the Insured Vehicle will be deducted from the amount
owed by the Obligor; and
- Ryder may terminate its responsibility for physical damage to and loss
and theft of the Insured Vehicles by giving the Obligor 30 days' prior
written notice, after which time the Obligor then assumes all risk of
loss with respect to, and must procure physical damage insurance
covering, those Vehicles.
Collection, Repossession and Disposition Procedures
Collections. Ryder's collections activities have been centralized into one
administrative center at the Shared Service Center with more than 50
professionals devoted to collections. Ryder uses numerous automated tools to
assist it in the identification, tracking and resolution of collections
disputes. In addition to various Dun & Bradstreet Corporation performance
indices, Ryder also uses a number of proprietary performance measurements. When
a delinquency is identified, Ryder makes calls and/or sends demand letters to
the delinquent Obligor. The tone of a phone call or the level of aggressiveness
placed on each collection effort is determined by the length and amount of the
delinquency, credit history and quality of the Obligor and customer relationship
considerations.
Defaults. When an Obligor fails to bring its account back into accord with
contractual or otherwise acceptable payment terms, Ryder may issue a default
notice to the Obligor. Receipt of a default notification typically requires the
Obligor to remit payment within seven days and achieve either contractual or
otherwise acceptable payment terms. Failure to remit payment can result in the
termination of the related Lease, in which case Ryder will:
- demand the immediate return of all Obligor Vehicles,
- initiate repossession actions if the Obligor fails to return the Obligor
Vehicles, or
- require the Obligor to purchase the Obligor Vehicles for their
Termination Values.
Repossessions. Once a Specified Vehicle is repossessed, depending on its
condition and specifications, if it is determined to still have useful life
remaining, it will either be leased to another customer of Ryder that has a need
for the same type of vehicle or placed into Ryder's commercial rental fleet, or
it will be sold into the marketplace through Ryder's used vehicle sales
marketing group.
Servicing
Lease Collections. Billing transactions for both securitized and
unsecuritized vehicles will continue to be generated by Ryder's existing billing
system and appear on one invoice. A portion of the payments received with
respect to invoices that include securitized Vehicles will be paid to the
Origination Trust. The payments will be available for either partial or full
payment of the financial component (the "Financial Component") of the fixed
charge portion (the "Fixed Charge") of the total monthly payment payable under
the Leases (the "Total Monthly Payment"). See "-- Lease Payments -- Calculation
of the Financial Component".
On a daily basis, invoices that include securitized Vehicles will be
compared with payments received for the invoices. The appropriate amounts to be
paid to the Origination Trust and advanced by Ryder will be calculated
accordingly. See "Additional Document Provisions -- The Administration
Agreement --
29
<PAGE> 31
Advances" for a discussion of the calculation of Financial Component Advances
and the repayment of the Advances.
Residuals. Ryder will begin the disposal process for a Specified Vehicle
upon its return when the related Specified Lease has reached its Maturity Date
or date of early termination. Specified Vehicles will be prepared for sale and
placed on Ryder's used vehicle sales lots for retail/commercial sales or they
may be traded to manufacturers' groups through local or national "trade
packages".
If a Specified Vehicle is sold during the Collection Period in which its
lease terminates, Ryder will remit the Sales Proceeds to the SUBI Collection
Account within two days of processing. If the Specified Vehicle is not sold
during the Collection Period in which the Specified Vehicle comes off-lease,
Ryder will advance the Securitization Value to the SUBI Collection Account for
that Specified Vehicle. See "Additional Document Provisions -- The
Administration Agreement -- Advances" for a discussion of the calculation of
Sales Proceeds Advances and the repayment of those Advances.
Lease Payments
Over the Lease Term, the Obligor is required to make Total Monthly Payments
intended to cover:
- the cost of financing the related Vehicles,
- scheduled depreciation of the Vehicles, and
- certain specified services and maintenance to be performed and supplies
to be furnished by Ryder.
Invoices are sent to each Obligor setting forth the Total Monthly Payment
due with respect to the Obligor Vehicles. Total Monthly Payments are generally
comprised of four components:
- the Fixed Charge, which is a fixed dollar amount due every month during
the Lease Term regardless of the actual usage of the Vehicle by the
Obligor;
- a variable charge, which changes from month to month depending on Vehicle
usage;
- a variable charge for fuel provided by Ryder during the preceding month;
and
- a variable charge for other services, including without limitation
accident charges, repairs, accessory charges, customer vehicle fuel for
non-Ryder vehicles, miscellaneous charges, credits and interstate fuel
taxes.
The Leases require the related Obligors to pay the invoiced Total Monthly
Payment within ten days of the date of the invoice. See "-- Collection,
Repossession and Disposition Procedures". However, with regard to the Trust and
Specified Leases and as discussed in more detail below under "-- Calculation of
the Financial Component," only the rights to the Financial Component of the
Fixed Charge, which represents the financing cost and depreciation of the
related Specified Vehicle, will be available to the Transferor and the Trust to
make payments in respect of the Program Operating Lease and the Senior Notes.
Total Monthly Payments made by Obligors under the Specified Leases normally
will be paid by mail, deposited into a lock box maintained by a bank and
controlled by the Administrative Agent and then deposited into the SUBI
Collection Account within two Business Days of processing, unless the Monthly
Remittance Condition has been met, which would then permit the Administrative
Agent to make the deposits on a monthly basis. See "Additional Document
Provisions -- The Administration Agreement -- Collections".
Calculation of the Financial Component
In the case of the Specified Leases, only the rights to the Financial
Component of the Fixed Charge, which represents the financing cost and
depreciation of the related Specified Vehicle, will be available to the
Transferor and the Trust to make payments in respect of the Program Operating
Lease and the Senior Notes. Because the Financial Component and the Maintenance
Component are not billed separately to the Obligor or tracked separately by
Ryder, a predetermined dollar amount of the Fixed Charge component of Total
Monthly Payments will be identified as the Financial Component. The remainder of
the Fixed Charge, in addition to the other components of the Total Monthly
Payment, will comprise the Maintenance Component. The Maintenance Component will
be allocated to and retained by Ryder, as Maintenance Provider, pro rata
30
<PAGE> 32
with the Financial Component. Although each Lease provides that Ryder may change
the Fixed Charge on specified dates twice yearly based on changes in the
Consumer Price Index, the Financial Component of each Specified Lease will be
established as of the Cutoff Date and will not change over the Lease Term.
Under the Administration Agreement, the portion of each Total Monthly
Payment allocated to the Maintenance Component of the Specified Leases will be
retained by the Maintenance Provider, will not be available to make Program
Operating Lease Payments and, therefore, will not be available to make payments
on the Senior Notes.
The following example is included to depict, with respect to a hypothetical
individual lease, the nature of its Financial Component and the relationship of
the Financial Component to the Securitization Rate in the amortization of the
Cutoff Date Securitization Value of the related leased vehicle. It is set forth
for illustrative purposes only.
Amortization of a vehicle lease contract:
<TABLE>
<S> <C>
Original Book Value $78,130
Cutoff Date Securitization Value (Book Value) $69,943
Residual Value $25,260
Securitization Rate 8.25%
Original Lease Term (Months) 78
Seasoning (Elapsed Term, in Months) 11
Remaining Lease Term (Months) 67
Fixed Charge Per Month $ 1,722
Financial Component (Calculated) $ 1,008
</TABLE>
CHART
31
<PAGE> 33
Calculation of the Securitization Value of the Specified Leases
Under the Administration Agreement, the Administrative Agent will calculate
a "Securitization Value" for each Specified Lease equal to the following:
<TABLE>
<CAPTION>
Calculation Date Securitization Value Formula
- ---------------- ----------------------------
<S> <C>
as of the Cutoff Date -- the value of the Specified Lease and the related
Specified Vehicle on Ryder's books (the "Net
Book Value") as of the Cutoff Date (the "Cutoff
Date Securitization Value");
as of its Maturity Date -- the estimated sales proceeds of the Specified
Vehicle as determined on or before the Cutoff
Date (the "Residual Value"); and
as of any other date -- the present value, calculated using the
Securitization Rate, of the sum of (a) the
aggregate Financial Component payments remaining
on the Specified Lease and (b) the Residual
Value of the Specified Vehicle.
</TABLE>
For each Specified Lease, the Financial Component will equal the constant
payment required to amortize the Net Book Value of the Specified Lease and the
related Specified Vehicle to the Residual Value of that Specified Vehicle over
the Lease Term, at a rate equal to the Securitization Rate. The Securitization
Value, which represents the amount of financing that will be raised against each
Specified Vehicle and related Specified Lease, will at any given time during the
term of the Specified Lease represent the principal amount of Securities that
can be amortized by the sum of the Financial Component payments due in respect
of the Specified Vehicle over the remaining Lease Term, plus the Residual Value
of the Specified Vehicle, in each case discounted at an annualized rate equal to
the Securitization Rate. The "Securitization Rate" will equal the sum of (a) the
weighted average interest rate on the Securities on the Closing Date, (b) the
Administration Fee and (c) 0.50%.
Historical Data
The following tables set forth selected delinquency, write-off and residual
value performance data for Ryder's portfolio of leased trucks, tractors and
trailers located throughout the United States as of and for the years ended
December 31, 1993 through December 31, 1998, and the six months ended June 30,
1998 and 1999. The tables are followed by a discussion of Ryder's views as to
trends, anomalies and reasons for changes in the tables.
The data presented in the following tables are for illustrative purposes
only. Delinquency, write-off and residual value performance experience may be
influenced by a variety of economic, social, geographic and other factors.
Neither Ryder nor the Trust can assure that Ryder's delinquency, write-off and
residual value experience with respect to its portfolio of leased trucks,
tractors and trailers in the future, or the Trust's experience with respect to
the Specified Vehicles, will be similar to that set forth below.
Ryder generally writes off a receivable when it is six months past due.
Prior to that time a write-off may be taken, on an account-by-account basis, if
Ryder's credit and collections personnel determine that circumstances so
warrant, such as in the case of a court-approved reorganization plan or a
liquidating obligor with poor pay-out prospects. Ryder tracks delinquency
information for periods of 1 to 30 days, 31 to 60 days, 61 to 90 days, and over
90 days. As of June 30, 1999, delinquencies of over 60 days as a percentage of
net book value were about one third of one percent. Ryder does not group
delinquencies in 30-day tranches beyond 90 days as the amounts are not
considered material. As of June 30, 1999, delinquencies of over 90 days as a
percentage of net book value were about one tenth of one percent. Additional
detail and historical information on delinquencies is set forth in the table
below.
32
<PAGE> 34
DELINQUENCY EXPERIENCE
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, AT DECEMBER 31,
------------------------------- ------------------------------------------------
1999 1998 1998 1997 1996
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Number of Customers......... 11,979 10,965 11,217 11,287 11,393
Number of Vehicles.......... 92,276 84,258 88,249 83,091 79,750
Ending Net Book Value of
Vehicles................... $2,857,591,050 $2,486,163,560 $2,615,245,281 $2,443,976,045 $2,453,850,570
Dollar Amount of Leases
Delinquent
61-90 Days............. $ 5,990,596 $ 6,068,691 $ 7,794,902 $ 7,579,897 $ 3,885,370
91 Days or More........ $ 3,135,128 $ 3,170,869 $ 3,028,988 $ 4,780,667 $ 2,621,514
Percentage Delinquent as a
Percentage of Net Book
Value
61-90 Days............. 0.21% 0.24% 0.30% 0.31% 0.16%
91 Days or More........ 0.11% 0.13% 0.12% 0.20% 0.11%
<CAPTION>
AT DECEMBER 31,
-------------------------------
1995 1994
-------------- --------------
<S> <C> <C>
Number of Customers......... 10,923 10,208
Number of Vehicles.......... 78,561 72,313
Ending Net Book Value of
Vehicles................... $2,414,791,790 $2,011,432,118
Dollar Amount of Leases
Delinquent
61-90 Days............. $ 1,624,538 $ 1,449,054
91 Days or More........ $ 1,568,546 $ 1,486,811
Percentage Delinquent as a
Percentage of Net Book
Value
61-90 Days............. 0.07% 0.07%
91 Days or More........ 0.06% 0.07%
</TABLE>
- ---------------
- The Ending Net Book Value of Vehicles is based on the sum of the Net Book
Value of all Vehicles under the Leases.
- In presenting the Dollar Amount of Leases Delinquent the period of
delinquency is based on the number of days any portion of a payment is
contractually past due.
- The Percentage Delinquent as a Percentage of Net Book Value is shown as a
percentage of the aggregate Net Book Value of Vehicles at period end.
WRITE-OFF EXPERIENCE
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, AT DECEMBER 31,
------------------------------- ------------------------------------------------
1999 1998 1998 1997 1996
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Number of Customers......... 11,979 10,965 11,217 11,287 11,393
Number of Vehicles.......... 92,276 84,258 88,249 83,091 79,750
Ending Net Book Value of
Vehicles................... $2,857,591,050 $2,486,163,560 $2,615,245,281 $2,443,976,045 $2,453,850,570
Dollar Amount of
Write-offs................. $ 2,330,114 $ 3,495,406 $ 5,339,570 $ 6,157,679 $ 4,076,041
Write-offs as a Percentage
of Net Book Value.......... 0.16% 0.28% 0.20% 0.25% 0.17%
<CAPTION>
AT DECEMBER 31,
-------------------------------
1995 1994
-------------- --------------
<S> <C> <C>
Number of Customers......... 10,923 10,208
Number of Vehicles.......... 78,561 72,313
Ending Net Book Value of
Vehicles................... $2,414,791,790 $2,011,432,118
Dollar Amount of
Write-offs................. $ 3,560,212 $ 1,915,465
Write-offs as a Percentage
of Net Book Value.......... 0.15% 0.10%
</TABLE>
- ---------------
- The Dollar Amount of Write-offs is based on the time at which Ryder
formally determines a Lease receivable to be uncollectible and removes the
Lease receivable from its books. Ryder's general policy is to write off an
account when it is 6 months past due. Prior to that time a write off may
be taken, on an account-by-account basis, if Ryder's collections personnel
determine that circumstances so warrant.
- The Dollar Amount of Write-offs is net of recoveries.
- Write-offs as a Percentage of Net Book Value are listed as a percentage of
the aggregate Net Book Value of Vehicles at period end and six-month data
is annualized.
33
<PAGE> 35
RESIDUAL VALUE PERFORMANCE
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, AT DECEMBER 31,
--------------------------- -----------------------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------------ ------------ ------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Number of Vehicles
Sold.................... 7,799 6,308 12,868 10,431 8,391 9,103 5,061
Aggregate Residual
Values of Vehicles
Sold.................. $120,626,799 $ 89,906,055 $190,271,739 $180,266,234 $123,949,475 $120,433,482 $59,083,279
Aggregate Sales
Proceeds.............. $140,258,967 $107,941,002 $225,322,796 $211,878,187 $147,923,019 $149,847,757 $76,789,821
Aggregate Gain (Loss)... $ 19,632,167 $ 18,034,947 $ 35,051,056 $ 31,611,953 $ 23,973,544 $ 29,414,274 $17,706,542
Average Gain (Loss) Per
Vehicle............... $ 2,517 $ 2,859 $ 2,724 $ 3,031 $ 2,857 $ 3,231 $ 3,499
</TABLE>
- ---------------
- The Number of Vehicles Sold only includes Vehicles that were under full
service lease contracts. These full service lease contracts were all
originated after December 31, 1991.
Ryder believes the increase in the number of vehicles under lease over the
periods presented by the tables above primarily reflects increased market demand
for leased vehicles, and the increasing trend in delinquency experience through
1998 reflects relatively low levels of delinquency in earlier years and start-up
related inefficiencies associated with Ryder's strategic move to centralizing
its lease collection and administration activities in a national shared service
center. Ryder believes decreases in delinquency since this period are the result
of the improved collection effectiveness of the Shared Service Center, which
became fully operational in December 1997.
Ryder believes the increasing trend in net write-off experience reflected
in the above tables is due to general growth in the size of the lease portfolio.
The significant level of net write-off experience in 1997 as compared to other
periods presented by the tables above reflects the implementation of the
national shared service center. As part of its effort to uniformly apply
write-off policies across the Company, the Shared Service Center wrote-off a
number of accounts in 1997 for which an allowance for loss was previously
provided, but the write-off had not yet occurred.
Ryder believes the increasing trend in the number of vehicles sold is due
to overall growth in the size of its portfolio, combined with the conscious
effort by Ryder, particularly in 1997, to control the size of its portfolio by
actively selling certain used equipment. Ryder believes competitive pressures on
selling prices, more accurate forecasting of the residual value of vehicles sold
and the sales efforts discussed previously are responsible for the decreasing
trend in average gain per vehicle since 1994 shown in the table above.
Year 2000 Preparation
The Year 2000 issue is the result of computer systems, software products
and embedded technology using two digits rather than four to indicate the
applicable year. If not addressed, such computer systems, software products and
embedded technology may be unable to properly interpret dates beyond the year
1999, which could cause system failures or miscalculations and lead to
disruptions in the activities and operations of Ryder System and its
subsidiaries, including Ryder.
During 1997, after consideration of the potential impact to operations,
including customer and supplier relationships, an enterprise-wide program was
initiated to modify computer information systems to be Year 2000 compliant or to
replace non-compliant systems at Ryder System and its subsidiaries. A Year 2000
Steering Committee comprised of senior executives was established to address
compliance issues and alternatives. A program office dedicated to implementing
the Year 2000 compliance plan was also established, and it has engaged external
consultants to provide day-to-day management oversight and contractors to
remediate and test non-compliant source code. Ryder System has stated that it
believes adequate resources have been allocated to the Year 2000 effort and that
it expects the Year 2000 compliance program to be completed on a timely basis.
34
<PAGE> 36
Ryder System and its subsidiaries have identified three major areas
determined to be critical for successful Year 2000 compliance:
- information systems, such as mainframes, PCs, networks and similar type
systems maintained at customer sites, and legacy applications relating to
operations such as financial reporting, human resources, purchasing,
treasury, marketing and sales;
- third-party relationships, including customers, suppliers, vendors and
government agencies; and
- facilities and equipment which may contain microprocessors with embedded
technology.
Ryder System and its subsidiaries' Year 2000 compliance program for each
major area can be segregated into three broad phases. Phase I of the program is
the assessment of information systems, facilities and equipment, and services
and products provided by third parties in order to identify exposures to Year
2000 issues and to develop a master plan of action including remediation,
retirement or replacement of non-compliant systems. Phase II of the program is
the implementation of action plans. Phase III of the program is the final
testing of each major area of exposure to ensure compliance, the placement of
remediated items into production and contingency planning to assess reasonably
likely worst case scenarios.
Ryder System and its subsidiaries have completed the assessment of the
legacy application and system software. Their remediation plan for this area is
segregated into 15 major partitions worldwide. Overall, approximately 99% of the
effort in this area had been performed as of September 30, 1999. Remediation and
testing activities were virtually complete on core business applications as of
September 30, 1999. Final testing of remediated code is scheduled to be
substantially completed during November of 1999. In addition, due to the
uncertainties inherent in this undertaking, contingency planning has been
initiated to evaluate a course of action to minimize the impact of any
unforeseen disruption resulting from non-compliance.
Ryder System and its subsidiaries rely on suppliers, vendors and government
agencies to timely provide a wide range of goods and services, including
equipment, supplies, telecommunications, utilities, transportation services and
banking services. Their management believes that third-party relationships
represent the greatest risk with respect to the Year 2000 issue because of their
limited ability to influence actions of third parties and to estimate the impact
of non-compliance of third parties throughout their operations. They are making
concerted efforts to understand the Year 2000 status of third parties whose Year
2000 non-compliance could either have a material adverse effect on their
business, financial condition or results of operations or involve a safety risk
to their employees or customers. They continue to survey and communicate with
customers, suppliers and vendors with whom they have important financial and
operational relationships to assess the status of their Year 2000 compliance
program and to develop a joint contingency plan.
The vendor compliance program of Ryder System and its subsidiaries includes
the following: assessing vendor compliance status; tracking vendor compliance
progress; developing contingency plans, including identifying alternate vendors,
as needed; addressing contract language; replacing, remediating or upgrading
equipment; requesting certification from vendors or making on-site assessments,
as required; and sending questionnaires and conducting phone interviews. Some
significant suppliers and vendors have not responded to inquiries, have declined
to respond because of liability concerns or have not responded with sufficient
detail for Ryder System and its subsidiaries to ensure (a) timely Year 2000
compliance, or (b) the impact to the company in the event of non-compliance.
Ryder System is continuing to pursue adequate responses from mission critical
business partners under the new "Year 2000 Readiness Disclosure" legislation.
However, Ryder System and its subsidiaries can provide no assurance that Year
2000 compliance plans will be successfully completed by third parties in a
timely manner.
In the facilities and equipment area, Ryder's exposure relates to embedded
technology in, among other things, vehicles, vehicle-related devices, and fuel
storage and other facilities. Based upon preliminary testing and discussions
with major truck manufacturers, it appears that the microprocessors installed by
the truck manufacturers are Year 2000 compliant. Remediation of leak detection
devices on underground fuel storage tanks has been completed. Ryder is
continuing to assess its exposure and to develop action and contingency plans
for other critical facilities and equipment, including on-board vehicle
computers acquired from manufacturers other than major truck manufacturers.
35
<PAGE> 37
Ryder System and its subsidiaries have developed a Year 2000 contingency
plan development process to mitigate, to the extent practicable, potential
disruptions in their activities and operations that may be created by failures
of critical business partners, facilities and equipment, and internal systems.
Their management currently believes that the most likely worst case scenario
will consist of some localized disruptions of systems that may affect individual
business processes, facilities or suppliers for a short time rather than
systemic or long-term problems affecting business operations as a whole. Through
visits to key operating sites, departments, customers, and vendors, potential
disruption scenarios have been identified and contingency plans have been
developed. Ryder System is continuing to evaluate, modify and augment
contingency plans for each business unit (including Ryder) and for critical
business processes as additional information becomes available. These plans
address preparation, assessment of failure, and resumption of critical business
functions. Initial plans developed cover early warning, preventative actions and
alternative processes. Quick response teams will be formed to identify and
correct problems as they occur. Ryder System is considering the following plans
of action in anticipation of any potential Year 2000 problems: carrying
additional supplies of fuel, additional data back-ups, computer shut downs and
restarts, finishing 1999 transactions early, freezing new system installations
and alternative means of communication. However, Ryder System and its
subsidiaries can provide no assurance that they will correctly anticipate the
level, impact or duration of non-compliance by critical business partners,
facilities and equipment or internal systems, or that contingency plans will be
sufficient to mitigate the impact of non-compliance.
Ryder System's contingency planning process has focused on risks, scenarios
and reasonable contingency plans involving materially important information
systems and third-party relationships. However, there are an almost infinite
number of additional risks which are not practicably assessable and for which,
therefore, specific contingency and mitigation plans have not been developed.
Such risks include the failures of one or more information systems or
third-parties which failures, individually, Ryder System does not consider
materially important but which could trigger an unanticipated cascade of other
Year 2000 failures, the combination of which could be materially important or
could affect the implementation of existing contingency plans.
The inability of Ryder to address the necessary Year 2000 modifications of
computerized information systems could result in a significant adverse effect on
its performance as Administrative Agent and Maintenance Provider, including the
potential inability to collect receivables, pay obligations, and operate service
facilities. Any such inability could have a material adverse effect on Senior
Noteholders and you could suffer a loss on your investment.
The foregoing description under the heading "Year 2000 Preparation"
contains various "forward looking statements" within the meaning of Section 27A
of the Securities Act and Section 21E of the Securities Exchange Act of 1934
(the "Exchange Act"), which represent expectations or beliefs expressed by Ryder
System management concerning future events, including that the assessment and
remediation efforts associated with Year 2000 issues will be completed by Ryder
System and its subsidiaries on a timely basis and that completion of the
contingency plan relating to year 2000 issues is expected by the end of fiscal
year 1999. Ryder System cautions that these statements are further qualified by
important factors that could cause actual results to differ materially from
those in the forward looking statements, including the failure of Ryder System
and its subsidiaries to resolve year 2000 issues on a timely basis due to
non-performance by outside contractors, the failure of third parties to
remediate their year 2000 issues or other factors, or the failure of Ryder
System and its subsidiaries to develop an adequate contingency plan relating to
year 2000 issues. Results actually achieved thus may differ materially from the
expected results included in these statements. The safe harbor for forward
looking statements under Section 27A of the Securities Act and Section 21E of
the Exchange Act does not apply to initial public offerings but does apply to
the Exchange Act reports from which the foregoing statements by Ryder System
have been taken.
THE SPECIFIED LEASES
General
The Specified Leases selected from the Origination Trust's portfolio of
Leases will consist of a pool of 6,323 Vehicles for which the related Leases had
an Aggregate Cutoff Date Securitization Value of $309,880,619.04. The Specified
Leases were assigned to the Origination Trust by Ryder on or prior to the
36
<PAGE> 38
Closing Date. The Specified Leases are operating leases under generally accepted
accounting principles and have been selected based upon the criteria specified
in the SUBI Trust Agreement and described under "-- Characteristics of the
Specified Leases -- General" and "-- Representations, Warranties and Covenants".
Ryder will represent and warrant that it used no adverse selection procedures in
selecting the Specified Leases for allocation to the Lease SUBI as SUBI Assets
and that it is not aware of any bias in the selection of the Specified Leases
that would cause delinquencies or losses on the Specified Leases to be worse
than any other Leases held by the Origination Trust. However, there can be no
assurance as to delinquencies or losses on the Specified Leases.
Specified Vehicles relating to Specified Leases having an aggregate Cutoff
Date Securitization Value not to exceed $4,900,848, which represents 1.58% of
the Aggregate Cutoff Date Securitization Value, will be titled in the name of
the Origination Trust or the Origination Trustee on behalf of the Origination
Trust during the Titling Grace Period. If the Administrative Agent fails to
properly retitle any Titling Grace Period Vehicle, it will be required to make a
payment equal to the Securitization Value of the related Specified Lease as of
the last day of the Titling Grace Period. See "Risk Factors -- During a titling
grace period the origination trust will lack a perfected ownership interest in
some vehicles" and "Additional Legal Aspects of the Specified Leases and the
Specified Vehicles -- Back-up Security Interests".
Each Specified Lease will provide that Ryder may terminate the Specified
Lease and repossess the related Specified Vehicle following an event of default
by the related Obligor (each, a "Lease Default"). Typical Lease Defaults
include, but may not be limited to, failure of the Obligor to make payments when
due, certain events of bankruptcy or insolvency of the Obligor, failure of the
Obligor to maintain the insurance required by the related Specified Lease (if
the Obligor is required to maintain the insurance), failure to make required
repairs on the related Specified Vehicle or failure to comply with any other
term or condition of the Specified Lease. Ryder regularly tracks Obligors'
compliance with their payment and insurance obligations and monitors Obligors
for noncompliance as more fully described under "Ryder -- Insurance" and
"-- Collection, Repossession and Disposition Procedures".
In the event of termination of a Specified Lease where the related Obligor
is in default following a casualty of the related Specified Vehicle, amounts
collected with respect to the Specified Lease and Specified Vehicle, after
deducting costs and other sums retained by the Administrative Agent in
connection therewith, may be less than the Securitization Value of the Specified
Lease. In the event that any of the foregoing shortfalls are not covered from
available monies on deposit in the Residual Value Surplus Account and Reserve
Fund and the subordination of payments otherwise payable to the holders of the
Subordinated Notes and the Certificates to the extent described in this
prospectus, investors in the Senior Notes could suffer a loss on their
investment.
Characteristics
General. The Specified Leases were selected by reference to several
criteria, including, that as of the Cutoff Date, each Specified Lease applied to
a Specified Vehicle that:
- is a commercial truck, highway tractor or trailer;
- has a model year of 1996 or later;
- is subject to a Lease with a Maturity Date on or after the April 2001
Payment Date and no later than the July 2009 Payment Date; and
- Fixed Charge payments in respect of which were not more than 60 days past
due as of the Cutoff Date.
Based on an analysis of the recent payment history of the Specified Leases, on
average 53% paid in under 30 days and the remaining 47% paid on average in 31 to
60 days of the due date. The Issuer believes that the collection periods with
respect to amounts invoiced on or about the Cutoff Date will not differ
materially from these results.
For a listing of other applicable selection criteria see "-- Representations,
Warranties and Covenants".
37
<PAGE> 39
As of the Cutoff Date, the Specified Leases had:
- an average Cutoff Date Securitization Value of $49,008.48;
- a weighted average original term of 71.32 months;
- a weighted average term to maturity of 64.41 months; and
- an aggregate Securitization Value (the "Aggregate Cutoff Date
Securitization Value") of $309,880,619.04.
As of the Cutoff Date, no single Obligor accounted for more than 2.04% of
the total Net Book Value of the Specified Vehicles. As of the Cutoff Date, the
top five and ten Obligors accounted for approximately 7.44% and 11.65% of the
Specified Vehicles by Aggregate Cutoff Date Securitization Value, respectively,
and the Specified Vehicles had an aggregate Residual Value of $112,112,717.00.
Distribution of the Specified Vehicles by Cutoff Date Securitization Value
As of the Cutoff Date, the composition of the Specified Vehicles by Cutoff
Date Securitization Value was as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUTOFF DATE AGGREGATE CUTOFF DATE
CUTOFF DATE SECURITIZATION VALUE VEHICLES SECURITIZATION VALUE SECURITIZATION VALUE
- -------------------------------- --------- --------------------- ---------------------
<S> <C> <C> <C> <C> <C>
$ 0.00 to $ 10,000.00 1 $ 6,711.49 0.00%
$ 10,000.01 to $ 20,000.00 329 6,088,697.76 1.96%
$ 20,000.01 to $ 30,000.00 569 14,716,727.11 4.75%
$ 30,000.01 to $ 40,000.00 917 32,758,967.37 10.57%
$ 40,000.01 to $ 50,000.00 1,205 54,263,448.19 17.51%
$ 50,000.01 to $ 60,000.00 1,635 90,634,426.94 29.25%
$ 60,000.01 to $ 70,000.00 1,261 80,977,654.53 26.13%
$ 70,000.01 to $ 80,000.00 374 27,642,425.58 8.92%
$ 80,000.01 to $ 90,000.00 25 2,083,996.28 0.67%
$ 90,000.01 to $100,000.00 3 279,576.79 0.09%
$100,000.01 to $110,000.00 3 302,792.00 0.10%
$120,000.01 to $130,000.00 1 125,195.00 0.04%
----- --------------- ------
Total............................ 6,323 $309,880,619.04 100.00%
===== =============== ======
</TABLE>
Distribution of the Specified Vehicles by Original Maturity
As of the Cutoff Date, the distribution of the Specified Vehicles by the
term of original maturity was as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUTOFF DATE AGGREGATE CUTOFF DATE
TERM OF MATURITY VEHICLES SECURITIZATION VALUE SECURITIZATION VALUE
- ---------------- --------- ---------------------- ---------------------
<S> <C> <C> <C>
18 -- 24 months................... 13 $ 580,089.26 0.19%
25 -- 36 months................... 153 6,995,046.00 2.26%
37 -- 48 months................... 358 15,867,166.91 5.12%
49 -- 60 months................... 1,212 53,517,062.96 17.27%
61 -- 72 months................... 1,949 103,759,074.83 33.48%
73 -- 84 months................... 2,311 114,513,737.98 36.95%
85 -- 96 months................... 310 14,058,761.33 4.54%
97 -- 108 months.................. 1 52,043.36 0.02%
109 -- 120 months................. 16 537,636.41 0.17%
----- --------------- ------
Total............................. 6,323 $309,880,619.04 100.00%
===== =============== ======
</TABLE>
38
<PAGE> 40
Distribution of the Specified Vehicles by Remaining Term
As of the Cutoff Date, the composition of the Specified Vehicles by number
of months until Maturity Date was as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUTOFF DATE AGGREGATE CUTOFF DATE
REMAINING TERM VEHICLES SECURITIZATION VALUE SECURITIZATION VALUE
- -------------- --------- --------------------- ---------------------
<S> <C> <C> <C>
16 -- 24 months...................................... 59 $ 3,071,134.33 0.99%
25 -- 36 months...................................... 242 10,432,543.20 3.37%
37 -- 48 months...................................... 537 23,554,973.65 7.60%
49 -- 60 months...................................... 1,520 71,137,624.67 22.96%
61 -- 72 months...................................... 2,169 111,962,961.07 36.13%
73 -- 84 months...................................... 1,544 78,269,061.48 25.26%
85 -- 96 months...................................... 236 10,914,684.23 3.52%
97 -- 108 months..................................... 5 127,089.44 0.04%
109 -- 115 months.................................... 11 410,546.97 0.13%
----- --------------- ------
Total................................................ 6,323 $309,880,619.04 100.00%
===== =============== ======
</TABLE>
Distribution of the Specified Vehicles by Manufacturer
As of the Cutoff Date, the distribution of the Specified Vehicles by
manufacturer was as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUTOFF DATE AGGREGATE CUTOFF DATE
MANUFACTURER VEHICLES SECURITIZATION VALUE SECURITIZATION VALUE
- ------------ --------- ----------------------- ---------------------
<S> <C> <C> <C>
Freightliner......................................... 2,489 $146,339,353.45 47.22%
International (Navistar)............................. 1,884 86,042,909.49 27.77%
Mack Trucks.......................................... 559 29,332,403.39 9.47%
Isuzu................................................ 474 14,304,524.79 4.62%
General Motors Corp.................................. 221 6,174,589.20 1.99%
Volvo................................................ 86 5,750,004.68 1.86%
Kenworth............................................. 63 5,013,124.49 1.62%
Great Dane Trailers.................................. 207 4,293,562.22 1.39%
Utility Trailers..................................... 67 2,818,991.91 0.91%
Peterbilt............................................ 27 2,009,973.22 0.65%
Trailmobile Trailers................................. 56 1,925,978.17 0.62%
Ford................................................. 74 1,818,853.68 0.59%
Ottawa............................................... 27 1,381,540.29 0.45%
Sterling Ford........................................ 22 1,192,440.39 0.38%
Wabash............................................... 42 806,321.18 0.26%
Stoughton Trailers................................... 13 236,947.57 0.08%
Other................................................ 3 118,531.24 0.04%
Dorsey Trailers...................................... 2 88,772.00 0.03%
Chevrolet............................................ 3 85,051.52 0.03%
Clements Trailer..................................... 2 78,439.93 0.03%
Budd Trailer......................................... 1 43,460.00 0.01%
Dodge................................................ 1 24,846.23 0.01%
----- --------------- ------
Total................................................ 6,323 $309,880,619.04 100.00%
===== =============== ======
</TABLE>
39
<PAGE> 41
Distribution of the Specified Vehicles by State
As of the Cutoff Date, the distribution of the Specified Vehicles by state
of origination, based on the state in which the related Specified Vehicle is
titled, was as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUTOFF DATE AGGREGATE CUTOFF DATE
STATE VEHICLES SECURITIZATION VALUE SECURITIZATION VALUE
----- --------- --------------------- ---------------------
<S> <C> <C> <C>
Alabama........................................ 363 $ 19,031,238.89 6.14%
Arizona........................................ 162 6,781,724.94 2.19%
California..................................... 674 32,510,315.90 10.49%
Colorado....................................... 186 8,754,765.87 2.83%
Delaware....................................... 27 1,303,990.97 0.42%
Florida........................................ 6 257,371.36 0.08%
Idaho.......................................... 10 535,235.10 0.17%
Illinois....................................... 72 3,470,553.44 1.12%
Indiana........................................ 592 25,780,778.31 8.32%
Kansas......................................... 112 5,734,299.00 1.85%
Maryland....................................... 14 681,154.08 0.22%
Massachusetts.................................. 99 4,428,695.79 1.43%
Minnesota...................................... 96 4,316,642.80 1.39%
Mississippi.................................... 229 12,822,834.95 4.14%
New Mexico..................................... 40 2,041,399.21 0.66%
North Carolina................................. 624 33,359,826.22 10.77%
Ohio........................................... 524 25,498,247.17 8.23%
Oklahoma....................................... 165 7,061,451.74 2.28%
Oregon......................................... 39 1,824,669.56 0.59%
Pennsylvania................................... 697 32,717,113.74 10.56%
South Carolina................................. 330 16,972,650.86 5.48%
Tennessee...................................... 566 31,273,672.43 10.09%
Utah........................................... 36 1,491,937.03 0.48%
Virginia....................................... 233 9,473,512.59 3.06%
Washington..................................... 147 7,744,826.92 2.50%
Wisconsin...................................... 280 14,011,710.17 4.52%
----- --------------- ------
Total.......................................... 6,323 $309,880,619.04 100.00%
===== =============== ======
</TABLE>
40
<PAGE> 42
Distribution of the Specified Vehicles by Asset Class
As of the Cutoff Date, the distribution of the Specified Vehicles by asset
class was as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUTOFF DATE AGGREGATE CUTOFF DATE
ASSET CLASS VEHICLES SECURITIZATION VALUE SECURITIZATION VALUE
----------- --------- --------------------- ---------------------
<S> <C> <C> <C>
Dry Trailer.................................... 269 $ 5,641,648.70 1.82%
Diesel Truck (less than or equal to 16,000
pounds)...................................... 351 9,923,197.82 3.20%
Diesel Truck (less than or equal to 26,000
pounds/less than or equal to 20 feet)........ 271 10,702,583.59 3.45%
Diesel Truck (less than or equal to 26,000
pounds/greater than 20 feet)................. 490 18,897,788.95 6.10%
Diesel Truck (greater than 26,000 pounds/less
than or equal to 20 feet).................... 50 2,219,869.56 0.72%
Diesel Truck (greater than 26,000
pounds/greater than 20 feet)................. 378 17,147,747.18 5.53%
Flatbed Trailer................................ 46 872,141.58 0.28%
Gas Straight Truck............................. 18 443,237.94 0.14%
Other Tractor.................................. 11 711,977.94 0.23%
Other Trailer.................................. 2 91,582.52 0.03%
Other Truck.................................... 272 12,365,118.63 3.99%
Panel Van and Pickup........................... 120 2,337,619.96 0.75%
Parcel Van..................................... 66 1,594,951.84 0.51%
Refrigeration Trailer.......................... 73 3,687,100.18 1.19%
Refrigeration Truck (less than or equal to
26,000 pounds)............................... 192 9,309,203.97 3.00%
Refrigeration Truck (greater than or equal to
26,000 pounds)............................... 123 7,368,255.25 2.38%
Single Axle Sleeper Tractor.................... 50 2,918,068.87 0.94%
Single Axle Tractor............................ 882 43,323,478.92 13.98%
Stake and Flatbed Truck........................ 213 8,872,178.88 2.86%
Tandem Axle Conventional Sleeper Tractor....... 1,438 93,108,018.45 30.05%
Tandem Axle Tractor............................ 1,008 58,344,848.31 18.83%
----- --------------- ------
Total.......................................... 6,323 $309,880,619.04 100.00%
===== =============== ======
</TABLE>
(Percentages in the preceding distribution tables on pages 38 to 41 may not add
to precisely 100% due to rounding.)
Representations, Warranties and Covenants
The Specified Leases and the related Specified Vehicles will be described
in a schedule appearing as an exhibit to the SUBI Trust Agreement, which will
identify each Specified Vehicle by vehicle identification number and set forth
as to each Specified Lease or Specified Vehicle, as the case may be, among other
things:
- the date of origination,
- the Net Book Value,
- the Residual Value,
- the Financial Component,
- the Fixed Charge, and
- the number of months remaining from the Cutoff Date to the month in which
the Maturity Date occurs.
Under the Administration Agreement, the Administrative Agent will represent
and warrant as to certain characteristics of each Specified Lease and Specified
Vehicle as described in the first paragraph under
41
<PAGE> 43
"-- Characteristics of the Specified Leases -- General". The Administrative
Agent will also represent and warrant that each Specified Lease or, to the
extent applicable, the related Specified Vehicle or Obligor:
- was originated by Ryder in the United States for an Obligor with a U.S.
address in the ordinary course of Ryder's business;
- is a U.S. dollar-denominated obligation;
- has been validly assigned to the Origination Trust by Ryder, except that
if a Specified Vehicle is a Titling Grace Period Vehicle, it will be
retitled in the name of the Origination Trust or the Origination Trustee
on behalf of the Origination Trust during the Titling Grace Period, and
Ryder will provide each Rating Agency with a report on the status of such
retitling on or before the end of the Titling Grace Period;
- provides for constant or increasing Fixed Charge payments to be made by
the Obligor over the Lease Term;
- is a Lease as to which no selection procedure was used that was believed
to be adverse to the holders of interests in the Origination Trust, the
SUBIs or any Other SUBI;
- was created in compliance in all material respects with all applicable
federal and state laws, including disclosure laws;
- as of the date assigned to the Origination Trust, (a) is a legal, valid
and binding payment obligation of the Obligor, enforceable against the
Obligor in accordance with its terms, as amended, (b) has not been
satisfied, subordinated, rescinded, canceled or terminated, (c) no right
of rescission, setoff, counterclaim or defense has been asserted or
threatened in writing and (d) no written default notice has been
transmitted to Ryder;
- had an original term of not less than 12 months and has a remaining term
of not greater than 120 months;
- an executed copy of the documentation associated therewith is located at
one of Ryder's offices;
- the Obligor or Ryder has obtained physical damage insurance covering the
related Specified Vehicle as required under the Lease;
- the Obligor or Ryder has obtained liability insurance covering the
related Specified Vehicle as required under the Lease;
- does not have any Fixed Charge payment that is in whole or in part more
than 60 days past due as of the Cutoff Date;
- has not had any liens or claims filed on or against it for work, labor or
materials; and
- the monthly Fixed Charge due is equal to or greater than the monthly
Financial Component due in respect thereof.
The Administrative Agent will be required to deposit or cause to be
deposited into the SUBI Collection Account an amount equal to the Securitization
Value of a Specified Lease (the "Reallocation Payment") if:
- the Origination Trustee, the Administrative Agent, the Trust or the
Transferor discovers a breach of any representation, warranty or covenant
referred to in the preceding paragraph that materially and adversely
affects the Trust's interests in a Specified Lease or Specified Vehicle,
and
- the breach is not cured in all material respects within 60 days after the
Administrative Agent discovers the breach or is given notice of it.
The Reallocation Payment must be made by the Administrative Agent as of the
day on which the related cure period ended. Upon such payment, the related
Specified Lease and Specified Vehicle shall no longer constitute SUBI Assets.
The foregoing payment obligation will survive any termination of Ryder as
Administrative Agent under the Administration Agreement. Under some
circumstances, the Administrative
42
<PAGE> 44
Agent will be required to make Reallocation Payments in respect of some
Specified Leases as to which certain servicing procedures have not been followed
that materially and adversely affect the interests of the Trust in the Specified
Lease. Additionally, if the Administrative Agent fails to properly retitle any
Titling Grace Period Vehicle during the Titling Grace Period, it will be
required to make a deposit in the SUBI Collection Account equal to the
Securitization Value of the related Specified Lease as of the last day of the
Titling Grace Period and such Specified Lease and the related Specified Vehicle
will be transferred to the Administrative Agent.
MATURITY, PAYMENT AND YIELD CONSIDERATIONS
In general, the rate of payment of principal and the yield to maturity of
the Senior Notes will be directly related to the rate at which payments on or in
respect of the Specified Leases and the Specified Vehicles are made. A
prepayment of a Specified Lease in full may be in the form of:
- proceeds resulting from a voluntary early termination of the Specified
Lease;
- proceeds resulting from the exercise of the Annual Termination Option and
receipt of the related Termination Value Payment;
- Termination Proceeds following a default by or bankruptcy of the related
Obligor;
- Insurance Proceeds resulting from Casualty Termination Leases; or
- Reallocation Payments made by the Administrative Agent.
The rate of prepayments on the Specified Leases may be influenced by a
variety of economic, social and other factors, including competing truck,
highway tractor and trailer lessors and the conditions in the used truck,
highway tractor and trailer market.
Ryder does not maintain records of the historical prepayment experience of
its truck, highway tractor and trailer lease portfolio. Ryder is not aware of
any publicly available industry statistics setting forth termination rates for
truck, highway tractor and trailer leases similar to the Leases. Neither Ryder
nor the Trust can assure that prepayments on the Specified Leases will conform
to any historical experience, nor can they predict the actual prepayment rates
that may be experienced on the Specified Leases.
In general, prepayments of Specified Leases will shorten the weighted
average life of the Senior Notes, which is the average amount of time during
which each dollar of the principal balance of a Senior Note is outstanding. As
the rate of payment of principal on the Senior Notes will depend primarily on
the rate of payment -- including prepayments -- of the Specified Leases, the
final payment of principal of the Senior Notes could occur significantly earlier
than the final payment dates specified on the front cover of this prospectus for
each class of Senior Notes (each, a "Final Payment Date"). If prepayments on
Specified Leases cause the principal of the Senior Notes to be paid earlier than
anticipated, the Senior Noteholders will bear the risk of being able to reinvest
principal payments at interest rates at least equal to the Interest Rate on the
Senior Notes.
The effective yield on, and average life of, the Senior Notes will depend
on, among other things, the amount of scheduled payments on or in respect of the
Specified Leases and the Specified Vehicles and the rate at which such payments
are made to the Senior Noteholders. The timing of changes in the rate of
payments in respect of the Specified Vehicles also may affect significantly an
investor's actual yield to maturity and the average life of the Senior Notes. A
substantial increase in the rate of payments on or in respect of the Specified
Leases and Specified Vehicles -- including liquidations of the Specified
Leases -- may shorten the final maturity of, and may significantly affect the
yield on, the Senior Notes.
43
<PAGE> 45
An investor's expected yield will be affected by:
- the price paid for the Senior Notes,
- the rate of prepayments of the Specified Leases, and
- the investor's assumed reinvestment rate.
These factors do not operate independently, but are interrelated. For example,
if prepayments on the Specified Leases are slower than anticipated, an
investor's yield will be lower if interest rates are higher than anticipated and
higher if interest rates are lower than anticipated. Conversely, if prepayments
on the Specified Leases are faster than anticipated, an investor's yield will be
higher if interest rates are higher than anticipated and lower if interest rates
are lower than anticipated.
The following information is provided solely to illustrate the effect of
prepayments of the Specified Leases on the unpaid principal amounts of the
Senior Notes and the weighted average life of the Senior Notes under the
assumptions stated below, and is not a prediction of the prepayment rates that
might actually be experienced with respect to the Specified Leases.
Prepayments on truck, tractor and trailer leases may be measured by a
prepayment standard or model. The prepayment model used in this prospectus is
based on a Conditional Prepayment Rate. A "Conditional Prepayment Rate" or "CPR"
represents a constant annual rate of prepayment relative to the then outstanding
Securitization Value of a pool of Specified Leases applied monthly during the
indicated portion of the life of a Specified Lease. A 100% Prepayment Assumption
assumes a 0% CPR for the first month of the life of a Specified Lease and an
additional 12/11% CPR per annum each month thereafter during the life of the
Specified Lease until month 12. Beginning in the 12th month and in each month
thereafter until the 30th month during the life of a Specified Lease, a 100%
Prepayment Assumption assumes a 12% CPR per annum. Beginning in the 30th month
during the life of a Specified Lease, a 100% Prepayment Assumption assumes a 12%
CPR and an additional 1/3% CPR per annum each month thereafter until month 60
and each month thereafter during the life of a Specified Lease, a 100%
Prepayment Assumption assumes a 22% CPR.
The tables below were prepared on the basis of certain assumptions,
including that:
- all Total Monthly Payments are timely received and no Specified Lease is
ever delinquent;
- no Reallocation Payment is made in respect of any Specified Lease;
- all Titling Grace Period Vehicles are properly retitled during the
Titling Grace Period;
- there are no losses in respect of the Specified Leases;
- distributions of principal of and interest on the Senior Notes are made
on January 15, April 15, July 15 and October 15 of each year whether or
not the day is a Business Day;
- all payments in respect of the Subordinated Notes are deposited to the
Reserve Fund;
- the Administration Fee is 1.00% per annum;
- all prepayments on the Specified Leases are prepayments in full;
- all Program Operating Lease Payments are made on a timely basis;
- no Residual Value Surplus is deposited into the Residual Value Surplus
Account; and
- the Reserve Fund is funded with an amount equal to the Initial Deposit.
No representation is made as to what the actual levels of losses and
delinquencies on the Specified Leases will be. Because payments on the Specified
Leases will differ from those used in preparing the following tables,
distributions of principal of the Senior Notes may be made earlier or later than
as set forth in the tables. Investors are urged to make their investment
decisions on a basis that includes their determination as to anticipated
prepayment rates under a variety of the assumptions discussed herein.
44
<PAGE> 46
The following tables set forth the percentages of the unpaid principal
balance of the Senior Notes that would be outstanding after each of the dates
shown, based on a rate equal to 0%, 50%, 100%, 150% and 200% of the Prepayment
Assumption. As used in the table, "0% Prepayment Assumption" assumes no
prepayments on a Specified Lease, "50% Prepayment Assumption" assumes that a
Specified Lease will prepay at 50% of the Prepayment Assumption, and so forth.
PERCENTAGE OF CLASS A-1 SENIOR NOTE BALANCE OUTSTANDING TO MATURITY
<TABLE>
<CAPTION>
Prepayment Assumption
-----------------------------------------
0% 50% 100% 150% 200%
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
November 16, 1999........................ 100% 100% 100% 100% 100%
June 15, 2000............................ 45% 19% 0% 0% 0%
December 15, 2000........................ 0% 0% 0% 0% 0%
June 15, 2001............................ 0% 0% 0% 0% 0%
December 15, 2001........................ 0% 0% 0% 0% 0%
June 15, 2002............................ 0% 0% 0% 0% 0%
Weighted Average Life to Maturity
(years)................................ 0.50 0.36 0.29 0.25 0.22
Weighted Average Life to Call (years).... 0.50 0.36 0.29 0.25 0.22
</TABLE>
- ---------------
- The weighted average life of the Class A-1 Senior Notes is determined by
(a) multiplying the amount of each distribution in reduction of principal
balance by the number of years from the Closing Date to the date
indicated, (b) adding the results and (c) dividing the sum by the
aggregate distributions in reduction of principal balance referred to in
clause (a).
- The weighted average life to call assumes that an Optional Purchase
occurs.
PERCENTAGE OF CLASS A-2 SENIOR NOTE BALANCE OUTSTANDING TO MATURITY
<TABLE>
<CAPTION>
Prepayment Assumption
-----------------------------------------
0% 50% 100% 150% 200%
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
November 16, 1999........................ 100% 100% 100% 100% 100%
June 15, 2000............................ 100% 100% 96% 83% 70%
December 15, 2000........................ 95% 71% 46% 22% 0%
June 15, 2001............................ 68% 34% 0% 0% 0%
December 15, 2001........................ 39% 0% 0% 0% 0%
June 15, 2002............................ 7% 0% 0% 0% 0%
December 15, 2002........................ 0% 0% 0% 0% 0%
June 15, 2003............................ 0% 0% 0% 0% 0%
Weighted Average Life to Maturity
(years)................................ 1.84 1.32 1.00 0.81 0.67
Weighted Average Life to Call (years).... 1.84 1.32 1.00 0.81 0.67
</TABLE>
- ---------------
- The weighted average life of the Class A-2 Senior Notes is determined by
(a) multiplying the amount of each distribution in reduction of principal
balance by the number of years from the Closing Date to the date
indicated, (b) adding the results and (c) dividing the sum by the
aggregate distributions in reduction of principal balance referred to in
clause (a).
- The weighted average life to call assumes that an Optional Purchase
occurs.
45
<PAGE> 47
PERCENTAGE OF CLASS A-3 SENIOR NOTE BALANCE OUTSTANDING TO MATURITY
<TABLE>
<CAPTION>
Prepayment Assumption
-----------------------------------------
0% 50% 100% 150% 200%
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
November 16, 1999........................ 100% 100% 100% 100% 100%
June 15, 2000............................ 100% 100% 100% 100% 100%
December 15, 2000........................ 100% 100% 100% 100% 97%
June 15, 2001............................ 100% 100% 100% 62% 25%
December 15, 2001........................ 100% 96% 49% 4% 0%
June 15, 2002............................ 100% 50% 0% 0% 0%
December 15, 2002........................ 68% 3% 0% 0% 0%
June 15, 2003............................ 27% 0% 0% 0% 0%
December 15, 2003........................ 0% 0% 0% 0% 0%
June 15, 2004............................ 0% 0% 0% 0% 0%
Weighted Average Life to Maturity
(years)................................ 3.27 2.54 2.03 1.65 1.37
Weighted Average Life to Call (years).... 3.27 2.54 2.03 1.65 1.37
</TABLE>
- ---------------
- The weighted average life of the Class A-3 Senior Notes is determined by
(a) multiplying the amount of each distribution in reduction of principal
balance by the number of years from the Closing Date to the date
indicated, (b) adding the results and (c) dividing the sum by the
aggregate distributions in reduction of principal balance referred to in
clause (a).
- The weighted average life to call assumes that an Optional Purchase
occurs.
PERCENTAGE OF CLASS A-4 SENIOR NOTE BALANCE OUTSTANDING TO MATURITY
<TABLE>
<CAPTION>
Prepayment Assumption
-----------------------------------------
0% 50% 100% 150% 200%
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
November 16, 1999........................ 100% 100% 100% 100% 100%
June 15, 2000............................ 100% 100% 100% 100% 100%
December 15, 2000........................ 100% 100% 100% 100% 100%
June 15, 2001............................ 100% 100% 100% 100% 100%
December 15, 2001........................ 100% 100% 100% 100% 63%
June 15, 2002............................ 100% 100% 97% 48% 5%
December 15, 2002........................ 100% 100% 45% 0% 0%
June 15, 2003............................ 100% 57% 0% 0% 0%
December 15, 2003........................ 83% 10% 0% 0% 0%
June 15, 2004............................ 33% 0% 0% 0% 0%
December 15, 2004........................ 0% 0% 0% 0% 0%
June 15, 2005............................ 0% 0% 0% 0% 0%
Weighted Average Life to Maturity
(years)................................ 4.36 3.62 3.00 2.53 2.15
Weighted Average Life to Call (years).... 4.36 3.62 3.00 2.53 2.15
</TABLE>
- ---------------
- The weighted average life of the Class A-4 Senior Notes is determined by
(a) multiplying the amount of each distribution in reduction of principal
balance by the number of years from the Closing Date to the date
indicated, (b) adding the results and (c) dividing the sum by the
aggregate distributions in reduction of principal balance referred to in
clause (a).
- The weighted average life to call assumes that an Optional Purchase
occurs.
46
<PAGE> 48
PERCENTAGE OF CLASS A-5 SENIOR NOTE BALANCE OUTSTANDING TO MATURITY
<TABLE>
<CAPTION>
Prepayment Assumption
-----------------------------------------
0% 50% 100% 150% 200%
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
November 16, 1999........................ 100% 100% 100% 100% 100%
June 15, 2000............................ 100% 100% 100% 100% 100%
December 15, 2000........................ 100% 100% 100% 100% 100%
June 15, 2001............................ 100% 100% 100% 100% 100%
December 15, 2001........................ 100% 100% 100% 100% 100%
June 15, 2002............................ 100% 100% 100% 100% 100%
December 15, 2002........................ 100% 100% 100% 97% 70%
June 15, 2003............................ 100% 100% 98% 67% 42%
December 15, 2003........................ 100% 100% 70% 41% 19%
June 15, 2004............................ 100% 77% 44% 19% 2%
December 15, 2004........................ 82% 45% 19% 0% 0%
June 15, 2005............................ 48% 20% 1% 0% 0%
December 15, 2005........................ 15% 0% 0% 0% 0%
June 15, 2006............................ 0% 0% 0% 0% 0%
Weighted Average Life to Maturity
(years)................................ 5.53 5.01 4.45 3.91 3.45
Weighted Average Life to Call (years).... 5.52 5.01 4.45 3.91 3.45
</TABLE>
- ---------------
- The weighted average life of the Class A-5 Senior Notes is determined by
(a) multiplying the amount of each distribution in reduction of principal
balance by the number of years from the Closing Date to the date
indicated, (b) adding the results and (c) dividing the sum by the
aggregate distributions in reduction of principal balance referred to in
clause (a).
- The weighted average life to call assumes that an Optional Purchase
occurs.
NOTE FACTORS AND TRADING INFORMATION
The "Note Factor" for the Senior Notes will be a seven-digit decimal that
the Administrative Agent will compute for each Payment Date, which will
represent the remaining outstanding principal balance of the Senior Notes as of
that Payment Date, after giving effect to payments made on the Payment Date,
expressed as a fraction of the initial outstanding principal balance of the
Senior Notes. The Note Factor will initially be 1.0000000, and will thereafter
decline to reflect reductions in the Senior Note Balance. A Senior Noteholder's
portion of the principal balance of the Senior Notes, will be the product of (a)
the original denomination of the Senior Notes and (b) the applicable Note
Factor.
On each Payment Date, the Indenture Trustee will provide to Cede & Co.
("Cede") as the nominee of The Depository Trust Company ("DTC") (unless
Definitive Notes are issued under the limited circumstances described herein),
unaudited reports concerning payments received on or in respect of the Specified
Leases and the Specified Vehicles, the Note Factors, and various other items of
information. Senior Note Owners may obtain copies of the reports upon a request
in writing to the Indenture Trustee at its Corporate Trust Office. In addition,
Senior Noteholders will be furnished information for tax reporting purposes
during each calendar year, not later than the latest date permitted by law. For
further details concerning information furnished to Senior Noteholders and
Senior Note Owners, see "Additional Information Regarding the
Securities -- Statements to Senior Noteholders" and "Description of the Senior
Notes -- Book-Entry Registration".
47
<PAGE> 49
DESCRIPTION OF THE SENIOR NOTES
General
The Senior Notes will be issued under the Indenture. The Indenture,
together with the SUBI Trust Agreement, the Administration Agreement, the Trust
Administration Agreement, the Trust Agreement, the Program Operating Lease, the
SUBI Certificate Transfer Agreement, and the Issuer SUBI Certificate Transfer
Agreement, are called the "Basic Documents". The following summaries of the
material provisions of the Basic Documents and the summaries of material
provisions included under "The SUBIs", "The Origination Trust", "The Specified
Leases -- Characteristics of the Specified Leases", "-- General" and
"-- Representations, Warranties and Covenants", "Security for the Securities"
and "Additional Document Provisions" do not purport to be complete and are
subject to, and qualified in their entirety by reference to, the provisions of
those documents. Where particular provisions of or terms used in a Basic
Document are referred to, the actual provisions, including definitions of terms,
are incorporated by reference as part of those summaries. Copies of the Basic
Documents may be obtained by request to the Transferor at the address set forth
under "The Transferor".
The Senior Notes will be issued in minimum denominations of $1,000 and
integral multiples of $1,000 in excess thereof in book-entry form. The Senior
Notes initially will be represented by certificates registered in the name of
Cede, the nominee of DTC. No Senior Note Owner will be entitled to receive a
certificate representing that owner's Senior Note, except as set forth below.
Unless and until Senior Notes are issued in fully registered certificated form
(the "Definitive Notes") under the limited circumstances described below, all
references herein to distributions, notices, reports and statements to Senior
Noteholders will refer to the same actions made with respect to DTC or Cede, as
the case may be, for the benefit of Senior Note Owners in accordance with DTC
procedures. See "-- Book-Entry Registration" and "Additional Information
Regarding the Securities -- Definitive Notes".
Distributions in respect of the Subordinated Notes and the Certificates
will be subordinated to distributions in respect of the Senior Notes to the
extent described under "Additional Information Regarding the
Securities -- Payments on the Securities".
Interest
Interest on the unpaid principal balance of the Senior Notes will be paid
in quarterly installments on the first Business Day after the 14th day of each
January, April, July and October, beginning January 17, 2000 (each, a "Payment
Date") to holders of record of the Senior Notes (the "Senior Noteholders") as of
the day immediately preceding the Payment Date (each such date, a "Record
Date"), with the final interest payment due on the earlier of (a) the Payment
Date on which the principal balance of the Senior Notes is reduced to zero or
(b) the Final Payment Date. A "Business Day" will be any day other than a
Saturday, a Sunday or a day on which banking institutions in the states of
Delaware, Florida, Illinois or New York are authorized or obligated by law,
executive order or government decree to be closed.
Interest will accrue on each class of Senior Notes at the interest rate
specified for each class on the front cover of this prospectus (each, an
"Interest Rate"), from and including the Closing Date, or from and including the
15th day of the month in which the preceding Payment Date occurred to and
including the 14th day of the month in which the Payment Date occurs (each, an
"Accrual Period") at the applicable Interest Rate until the principal amount of
the Senior Notes has been paid in full. Interest on the Class A-1 Senior Notes
will be calculated on the basis of the actual number of days elapsed, but
assuming a 360-day year. Interest on the other classes of Senior Notes will be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
48
<PAGE> 50
As more fully described under "Additional Information Regarding the
Securities -- Payments on the Securities", interest payments on the Senior Notes
on a Payment Date generally will be made from the sum of:
- Available Funds remaining after the Administrative Agent has been paid
the Payment Date Advance Reimbursement and the Administration Fee, and
- the Reserve Fund Draw Amount, if any.
Principal
Securityholders are entitled to receive on each Payment Date an amount (the
"Principal Distribution Amount") equal to the greater of (a) the sum of (1) the
Optimal Principal Distribution Amount and (2) any Principal Carryover Shortfall
as of the preceding Payment Date, and (b) if the amount on deposit in the
Reserve Fund after giving effect to all deposits and withdrawals referenced in
clause (a) of the definition of the Reserve Fund Draw Amount as more fully
described under "Security for the Securities -- The Accounts -- The Reserve
Fund", exceeds the unpaid principal amount of the Securities, the unpaid
principal amount of the Securities (the "Securities Balance"). Notwithstanding
the foregoing, the Principal Distribution Amount shall not exceed the Securities
Balance.
The funds available to make principal distributions on a Payment Date (the
"Available Principal Distribution Amount") will equal the sum of (a) the amount
of Available Funds remaining after the Administrative Agent has been paid the
Payment Date Advance Reimbursement and the Administration Fee, and after accrued
interest has been paid on the Securities and (b) the Reserve Fund Draw Amount
remaining after accrued interest has been paid on the Securities. Principal
payments will be made to Securityholders in the priority set forth below on each
Payment Date in an amount equal to the lesser of (a) the Principal Distribution
Amount and (b) the Available Principal Distribution Amount (the "Quarterly
Principal Distributable Amount").
"Principal Carryover Shortfall" will mean, as of the close of any Payment
Date, the sum of the excess, if any, of the then Principal Distribution Amount
over the Quarterly Principal Distributable Amount.
On each Payment Date, unless the maturity of the Senior Notes has been
accelerated following an Indenture Default, principal payments shall be made
sequentially so that no principal will be paid on any class of Senior Notes
until each class of Senior Notes with a lower numerical designation shall have
been paid in full. Thus no principal will be paid on the Class A-2 Senior Notes
until the principal on the Class A-1 Senior Notes shall have been paid in full.
No principal will be paid on the Class A-3 Senior Notes until the principal on
the Class A-2 Senior Notes shall have been paid in full. No principal will be
paid on the Class A-4 Senior Notes until the principal on the Class A-3 Senior
Notes shall have been paid in full. No principal will be paid on the Class A-5
Senior Notes until the principal on the Class A-4 Senior Notes shall have been
paid in full. Until all principal due to the Senior Notes is paid, no principal
will be paid to the Subordinated Notes and the Certificates. Any remaining
principal payment will then be paid first to the Subordinated Notes until they
have been paid in full -- which amounts will be deposited into the Reserve Fund
until the Reserve Fund is fully funded -- and then to the Certificates.
On any Payment Date, (a) the "Senior Note Balance" and the "Certificate
Balance" will equal the Initial Senior Note Balance or the Initial Certificate
Balance, as the case may be, reduced by all payments of principal made on or
prior to the Payment Date on the Senior Notes or the Certificates, as the case
may be, and (b) the "Subordinated Note Balance" will equal the Initial
Subordinated Note Balance, reduced by all payments of principal made on or prior
to the Payment Date, whether paid to the Subordinated Noteholder or deposited in
the Reserve Fund.
On each Payment Date after the maturity of the Senior Notes has been
accelerated following an Indenture Default, principal will be allocated, first,
to the Class A-1 Senior Notes, second, pro rata among all other outstanding
classes of Senior Notes, and third, to the Subordinated Notes and the
Certificates pro rata. See "Additional Information Regarding the
Securities -- Payments on the Securities" and "Additional Document
Provisions -- The Indenture -- Indenture Defaults".
49
<PAGE> 51
The "Optimal Principal Distributable Amount" for any Payment Date and the
related Collection Period will equal the sum of the following amounts:
- for each Specified Vehicle for which the related Specified Lease did not
terminate during that Collection Period, the difference between the
Securitization Value of the Specified Lease at the beginning and at the
end of that Collection Period;
- for each Specified Vehicle for which the related Specified Lease reached
its Maturity Date during that Collection Period, the Securitization Value
of the Specified Lease as of the Maturity Date;
- for each Specified Lease terminated by the Obligor or the Administrative
Agent during that Collection Period pursuant to exercise of the Annual
Termination Option, the Securitization Value of such Specified Lease as
of the effective date of termination;
- for each Specified Vehicle purchased by the Administrative Agent before
its Maturity Date, the Securitization Value of the related Specified
Lease as of the date of the purchase;
- for each Specified Vehicle relating to a Specified Lease that became a
Casualty Termination Lease during that Collection Period, the
Securitization Value of the Specified Lease as of the date the Specified
Lease became a Casualty Termination Lease; and
- for each Specified Lease that became a Default Termination Lease during
that Collection Period, the Securitization Value of the Specified Lease
as of the date the Specified Lease became a Default Termination Lease.
A "Casualty Termination Lease" will mean a Specified Lease that terminated
because the related Specified Vehicle has been lost, stolen or damaged beyond
economic repair.
A "Default Termination Lease" will mean a Specified Lease terminated by (a)
the Administrative Agent following a default by or bankruptcy of the related
Obligor or (b) the Obligor -- other than by exercising the Annual Termination
Option -- based on an alleged breach by the Maintenance Provider under the
Specified Lease.
The principal amount of each class of Senior Notes, to the extent not paid,
will be due on the related Final Payment Date. The actual date on which the
Senior Note Balance is paid may be earlier than the Final Payment Date based on
a variety of factors, including the factors described under "Risk Factors -- The
timing of principal payments is uncertain" and "Maturity, Payment and Yield
Considerations".
Optional Purchase
The Senior Notes may be redeemed in whole, but not in part, on any Payment
Date when an Optional Purchase can be exercised. The redemption price will
equal the Senior Note Balance plus accrued interest thereon at the applicable
Interest Rate through the related Accrual Period. See "Additional Information
Regarding the Securities -- Optional Purchase".
The Indenture Trustee
U.S. Bank will be the Indenture Trustee under the Indenture. The Indenture
Trustee is a national banking association and its Corporate Trust Office is
located at One Illinois Center, 111 East Wacker Drive, Suite 3000, Chicago,
Illinois 60601. The fees and expenses of the Indenture Trustee will be paid by
the Administrative Agent or the Administrator. See "Additional Document
Provisions -- Miscellaneous Provisions -- Fees and Expenses". The Transferor,
the Administrative Agent and their respective affiliates may maintain normal
commercial banking relationships with the Indenture Trustee and its affiliates.
Book-Entry Registration
The Senior Notes will be issued in book-entry form. DTC will act as
securities depository for the Senior Notes. The Senior Notes will be issued as
fully registered securities registered in the name of Cede, the nominee of DTC.
An investor acquiring an interest in the Senior Notes (each, a "Senior Note
Owner") may
50
<PAGE> 52
hold its interest through DTC in the United States, or Cedelbank ("Cedelbank")
or the Euroclear system ("Euroclear") in Europe, which in turn hold through DTC.
One fully registered Senior Note will be issued with respect to each $200
million in principal amount of Senior Notes or such smaller amount as necessary.
It is anticipated that the only Senior Noteholder will be Cede, the nominee of
DTC. Senior Note Owners will not be recognized by the Indenture Trustee as
"Senior Noteholders", as that term will be used in the Indenture, and Senior
Note Owners will only be permitted to exercise the rights of Senior Noteholders
indirectly through DTC and its Participants, as further described below.
DTC was created to hold securities for its participating members (the
"Participants") and to facilitate the clearance and settlement of securities
transactions between Participants through electronic book-entry changes in
accounts of its Participants, thereby eliminating the need for physical movement
of certificates. DTC is:
- a limited-purpose trust company organized under the laws of the State of
New York,
- a "banking organization" within the meaning of the New York Banking Law,
- a member of the Federal Reserve System,
- a "clearing corporation" within the meaning of the Uniform Commercial
Code (the "UCC") in effect in the State of New York, and
- a "clearing agency" registered pursuant to the provisions of Section 17A
of the Exchange Act.
Participants include securities brokers and dealers, including the Initial
Purchaser, banks, trust companies and clearing corporations. Indirect access to
the DTC system also is available to banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly (the "Indirect Participants"). Transfers between
Participants in DTC will occur in accordance with DTC rules. The rules
applicable to DTC and its Participants are on file with the SEC.
Cedelbank and the Euroclear will hold omnibus positions on behalf of their
Participants through customers' securities accounts in the Depositaries which
will in turn will hold such positions in customers' securities accounts in DTC
through Citibank, N.A. or Morgan Guaranty Trust Company of New York, the
relevant depositaries (collectively, the "Depositaries") of Cedelbank or
Euroclear, respectively, and each a participating member of DTC. Transfers
between Participants in Cedelbank ("Cedelbank Participants") and Participants in
Euroclear ("Euroclear Participants") will occur in accordance with their
respective rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedelbank
Participants or Euroclear Participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of Cedelbank or Euroclear by its Depositary.
However, each such cross-market transaction will require delivery of
instructions to Cedelbank or Euroclear by the counterparty in such system in
accordance with its rules and procedures and within its established deadlines
(European time). Cedelbank or Euroclear will, if the transaction meets its
settlement requirements, deliver instructions to its Depositary to take action
to effect final settlement on its behalf of delivering or receiving securities
in DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Cedelbank Participants and
Euroclear Participants may not deliver instructions directly to the related
Depositaries.
Because of time-zone differences, credits of securities received in
Cedelbank or Euroclear as a result of a transaction with a DTC Participant will
be made during subsequent securities settlement processing and dated the
business day following the DTC settlement date. Such credits or any transactions
in such securities settled during such processing will be reported to the
relevant Cedelbank Participants or Euroclear Participants on such business day.
Cash received in Cedelbank or Euroclear as a result of sales of Senior Notes by
or through a Cedelbank Participant or Euroclear Participant to a DTC Participant
will be received with value on the DTC settlement date but will be available in
the relevant Cedelbank or Euroclear cash account only as of the business day
following settlement in DTC.
51
<PAGE> 53
Senior Note Owners that are not Participants or Indirect Participants but
desire to purchase, sell or otherwise transfer ownership of, or an interest in,
Senior Notes may do so only through Participants and Indirect Participants.
Participants will receive a credit for the Senior Notes on DTC's records. The
ownership interest of each Senior Note Owner will in turn be recorded on the
respective records of Participants and Indirect Participants. Senior Note Owners
will not receive written confirmation from DTC of their purchase of Senior
Notes, but Senior Note Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the Participant or Indirect Participant through which the Senior
Note Owner entered into the transaction. Transfers of ownership interests in the
Senior Notes will be accomplished by entries made on the books of Participants
acting on behalf of Senior Note Owners.
To facilitate subsequent transfers, all Senior Notes deposited by
Participants with DTC will be registered in the name of Cede, the nominee of
DTC. The deposit of Senior Notes with DTC and their registration in the name of
Cede will not change the beneficial ownership of the Senior Notes. DTC will have
no knowledge of the actual Senior Note Owners and its records will reflect only
the Participants to whose accounts those Senior Notes are credited, which may or
may not be the Senior Note Owners. Participants and Indirect Participants will
remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants and by Participants and Indirect
Participants to Senior Note Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
DTC's practice is to credit Participants' accounts on each Payment Date in
accordance with their respective holdings of Senior Notes shown on DTC's records
unless DTC has reason to believe that it will not receive payment on that
Payment Date. Payments by Participants and Indirect Participants to Senior Note
Owners will be governed by standing instructions and customary practices, as is
the case with securities held for the accounts of customers in bearer form or
registered in "street name". These payments will be the responsibility of the
Participants and not of DTC, the Indenture Trustee or the Transferor, subject to
any statutory or regulatory requirements as may be in effect from time to time.
Payment of principal of and interest on the Senior Notes to DTC will be the
responsibility of the Indenture Trustee, disbursement of the payments to
Participants will be the responsibility of DTC and disbursement of the payments
to Senior Note Owners will be the responsibility of Participants and Indirect
Participants. As a result, under the book-entry format, Senior Note Owners may
experience some delay in their receipt of payments. DTC will forward the
payments to its Participants, which will then forward them to Indirect
Participants or Senior Note Owners.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a Senior Note
Owner to pledge Senior Notes to persons or entities that do not participate in
the DTC system, or otherwise take actions with respect to the Senior Notes, may
be limited due to the lack of a physical certificate for the Senior Notes.
DTC management is aware that some computer applications and systems used
for processing data were written using two digits rather than four to define the
applicable year, and therefore may not recognize a date using "00" as the year
2000. This could result in "Year 2000" problems, such as the inability of these
systems to properly process transactions with dates in the year 2000 and
thereafter. DTC has informed its Participants and other members of the financial
community that it has developed and is implementing a program to address this
issue so that its applications and systems relating to the payment of
distributions -- including principal and income payments -- to securityholders,
book-entry deliveries and settlement of trades within DTC continue to function
properly. This program includes a technical assessment and a remediation plan,
each of which is complete. DTC plans to implement a testing phase of this
program which is expected to be completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including but not limited to issuers and their agents, as
well as third party vendors from whom DTC licenses software and hardware, and
third party vendors on whom DTC relies for information or the provision of
services, including telecommunication and electrical utility service providers,
among others. DTC has indicated that it
52
<PAGE> 54
is contacting (and will continue to contact) third party vendors from whom DTC
acquires services to: (i) impress upon them the importance of such services
being Year 2000 compliant; and (ii) determine the extent of their efforts for
Year 2000 remediation (and, as appropriate, testing) of their services. In
addition, DTC is in the process of developing such contingency plans as it deems
appropriate.
The information set forth in the preceding two paragraphs has been provided
by DTC for informational purposes only and is not intended to serve as a
representation, warranty or contract modification of any kind. The Trust makes
no representations as to the accuracy or completeness of this information.
If the DTC Systems are not made year 2000 compliant on a timely basis,
DTC's ability to provide DTC services, including payments on the Notes may be
materially and adversely affected. If this were to occur, Senior Note Owners
could experience delays in payments due or may not ultimately receive all
interest and principal due to the Senior Note Owners.
Neither DTC nor Cede will consent or vote with respect to the Senior Notes.
Under its usual procedures, DTC will mail an omnibus proxy to the Indenture
Trustee as soon as possible after each applicable record date for such a consent
or vote. The omnibus proxy will assign Cede's consenting or voting rights to
those Participants who have Notes credited to their accounts with the
Participants on that record date. These Participants will be identified in a
listing attached to the omnibus proxy.
Cedelbank is incorporated under the laws of Luxembourg as a professional
depository. Cedelbank holds securities for Cedelbank Participants and
facilitates the clearance and settlement of securities transactions between
Cedelbank Participants through electronic book-entry changes in accounts of
Cedelbank Participants, thereby eliminating the need for physical movement of
certificates. Transactions may be settled in Cedelbank in any of 34 currencies,
including United States dollars. Cedelbank provides to Cedelbank Participants,
among other things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities lending and
borrowing. Cedelbank interfaces with domestic markets in several countries. As a
professional depositary, Cedelbank is subject to regulation by the Luxembourg
Monetary Institute. Cedelbank Participants are recognized financial institutions
around the world, including underwriters, securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. Indirect
access to Cedelbank is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a Cedelbank Participant, either directly or indirectly.
Euroclear was created in 1968 to hold securities for Euroclear Participants
and to clear and settle transactions between Euroclear Participants through
simultaneous electronic book-entry delivery against payment, thereby eliminating
the need for physical movement of certificates and any risk from lack of
simultaneous transfers of securities and cash. Transactions may now be settled
in any of 34 currencies, including United States dollars. The Euroclear System
includes various other services, including securities lending and borrowing, and
interfaces with domestic markets in more than 25 countries generally similar to
the arrangements for cross-market transfers with DTC described above. Euroclear
is operated by the Brussels, Belgium office of Morgan Guaranty Trust Company of
New York (the "Euroclear Operator"), under contract with Euroclear Clearance
System S.C., a Belgian cooperative corporation (the "Cooperative"). All
operations are conducted by the Euroclear Operator, and all Euroclear
securities, clearance accounts, and Euroclear cash accounts, are accounts with
the Euroclear Operator, not the Cooperative. The Cooperative Board establishes
policy for the Euroclear System. Euroclear Participants include banks, including
central banks, securities brokers and dealers and other professional financial
intermediaries. Indirect access to the Euroclear System is also available to
other firms that clear through or maintain a custodial relationship with a
Euroclear Participant, either directly or indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governers of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.
53
<PAGE> 55
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing use of Euroclear and the
related Operating Procedures of the Euroclear System and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
Distributions with respect to Senior Notes held through Cedelbank or
Euroclear will be credited to the cash accounts of Cedelbank Participants or
Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by its Depositary. Such distributions will be
subject to tax reporting and withholding in accordance with relevant United
States tax laws and regulations. For further information in this regard, see
"Material Federal Income Tax Consequences -- Senior Notes -- Tax Consequences to
Foreign Investors" herein and "Global Clearance, Settlement and Tax
Documentation Procedures -- Certain U.S. Federal Income Tax Documentation
Requirements" in Annex I hereto. Cedelbank or the Euroclear Operator, as the
case may be, will take any other action permitted to be taken by a Senior
Noteholder on behalf of a Cedelbank Participant or Euroclear Participant only in
accordance with its relevant rules and procedures and subject to the related
Depositary's ability to effect such actions on its behalf through DTC.
Although DTC, Cedelbank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Senior Notes among Participants
of DTC, Cedelbank and Euroclear, they are under no obligation to perform or
continue to perform such procedures and the procedures may be discontinued at
any time.
None of the Administrative Agent, the Transferor, the Administrator or the
Indenture Trustee will have any liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests of the Senior
Notes held by Cede, DTC, Cedelbank or Euroclear, or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.
ADDITIONAL INFORMATION REGARDING THE SECURITIES
Payments on the Securities
General
As more fully described under "Summary -- Credit Enhancement -- The SUBI
Certificates", the SUBI Interest evidenced by the SUBI Certificates will
evidence a 99% beneficial interest in the SUBI Assets, which comprise Specified
Vehicles and Specified Leases having an aggregate Cutoff Date Securitization
Value of $309,880,619.04. The Retained SUBI Interest evidenced by the Retained
SUBI Certificates will evidence a 1% beneficial interest in the SUBI Assets and
will be permanently retained by Ryder II LP. Accordingly, Ryder II LP will be
entitled to receive 1% of all payments made on or in respect of the SUBI Assets
and will share in 1% of all losses and liabilities incurred with respect to the
SUBI Assets. Any payments made in respect of the Retained SUBI Interest will not
be available to make Program Operating Lease Payments or payments on the Senior
Notes.
On the tenth calendar day of each month in which a Payment Date occurs or,
if such day is not a Business Day, the immediately succeeding Business Day
(each, a "Determination Date"), the Administrative Agent will inform the
Indenture Trustee and the Owner Trustee of, among other things, the amount of
(a) Collections, (b) Advances to be made by the Administrative Agent and (c) the
Administration Fee payable to the Administrative Agent, in each case with
respect to the three-month period immediately preceding the month in which the
Payment Date occurs (the "Collection Period"). On or before each Determination
Date, the Administrative Agent will also determine the Optimal Principal
Distributable Amount and, based on Available Funds and other amounts available
for distribution on the related Payment Date as described below, the amount to
be distributed to the Securityholders.
54
<PAGE> 56
The Indenture Trustee and the Owner Trustee will make distributions to the
Securityholders out of amounts on deposit in the related Distribution Accounts.
The amount to be distributed to the Administrative Agent and the Securityholders
will be determined in the manner described below.
Determination of Available Funds
The amount of funds available for distribution on a Payment Date will
generally equal the sum of Available Funds and the Reserve Fund Draw Amount.
On each Payment Date, the sum of (a) 1% of Collections for the related
Collection Period and (b) 1% of the Residual Value Surplus Draw Amount for the
related Collection Period (the "Retained Certificate Distribution Amount") will
be due the Retained Certificateholder, representing amounts owed in respect of
the Retained SUBI Certificates, and will not be available to make Program
Operating Lease Payments or payments on the Senior Notes.
"Available Funds" for a Payment Date and the related Collection Period will
equal the sum of the following amounts: (a) 99% of Collections, (b) Advances
required to be made by the Administrative Agent, (c) 99% of the Residual Value
Surplus Draw Amount and (d) in the case of an Optional Purchase, the Optional
Purchase Price.
The "Available Funds Shortfall Amount" for a Payment Date and the related
Collection Period will equal the amount by which Available Funds is less than
the amount necessary to make the distributions in clauses (c) through (f) of the
first paragraph under "--Deposits to the Distribution Accounts; Priority of
Payments", except that the Optimal Principal Distributable Amount rather than
the Quarterly Principal Distributable Amount will be used for purposes of clause
(f).
Deposits to the Distribution Accounts; Priority of Payments
SUBI Collection Account. On each Payment Date, after taking into account
the distribution of amounts to be paid to the Retained SUBI Certificateholder on
the related Payment Date, the Administrative Agent will allocate amounts on
deposit in the SUBI Collection Account with respect to the related Collection
Period as described below and will instruct the Origination Trustee, acting
through the Trust Agent, to cause the following deposits and distributions to be
made in the following amounts and order of priority:
(a) to the Administrative Agent, the Payment Date Advance Reimbursement;
(b) to the Administrative Agent, the Administration Fee;
(c) to the Note Distribution Account, to pay interest due on the
outstanding Senior Notes on that Payment Date, and, to the extent
permitted under applicable law, interest on any overdue interest at the
Interest Rate;
(d) to the Reserve Fund, an amount equal to the interest due on the
outstanding Subordinated Notes on that Payment Date, and, to the extent
permitted under applicable law, interest on any overdue interest at the
Subordinated Note Rate;
(e) to the Certificate Distribution Account, an amount equal to the
interest accrued on the Certificates with respect to that Payment Date,
and, to the extent permitted under applicable law, interest on any
overdue interest at the Certificate Rate;
(f) to the related Distribution Account or, in the case of the Subordinated
Notes, to the Reserve Fund, the Quarterly Principal Distributable
Amount, which will be allocated to pay principal on the Senior Notes,
the Subordinated Notes and the Certificates in the amounts and order of
priority described under "Description of the Senior Notes--Principal";
and
(g) to the Reserve Fund, all remaining amounts (the "Excess Amounts").
Reserve Fund. On each Payment Date, after taking into account amounts
available to be distributed to Securityholders from the SUBI Collection Account,
the Administrative Agent will allocate the Reserve Fund
55
<PAGE> 57
Draw Amount on deposit in the Reserve Fund with respect to the related
Collection Period and will instruct the Indenture Trustee to make the following
deposits and distributions in the following amounts and order of priority:
(a) to the Note Distribution Account, to pay any remaining interest due on
the outstanding Senior Notes on that Payment Date, and, to the extent
permitted under applicable law, interest on any overdue interest at the
Interest Rate;
(b) to the Reserve Fund, an amount equal to any remaining interest due on
the outstanding Subordinated Notes on that Payment Date, and, to the
extent permitted under applicable law, interest on any overdue interest
at the Subordinated Note Rate;
(c) to the Certificate Distribution Account, an amount equal to any
remaining interest accrued on the Certificates with respect to that
Payment Date, and, to the extent permitted under applicable law,
interest on any overdue interest at the Certificate Rate; and
(d) to the related Distribution Account -- or, in the case of the
Subordinated Notes, to the Reserve Fund, and thereafter, in the event
of any remaining shortfall in amounts required to pay the Quarterly
Principal Distributable Amount with respect to the Certificates, to the
Certificate Distribution Account -- the remaining Quarterly Principal
Distributable Amount, which will be allocated to pay principal on the
Securities in the amounts and order of priority described under
"Description of the Senior Notes -- Principal".
On each Payment Date, if, after the giving effect to the distributions set
forth above, the amount on deposit in the Reserve Fund exceeds the Reserve Fund
Requirement, any such excess (a) up to the amounts deposited into the Reserve
Fund on or before that Payment Date in respect of the Subordinated Notes will be
released to the Transferor as the Subordinated Noteholder and (b) any additional
excess shall be released to the Transferor.
The "Payment Date Advance Reimbursement" for a Payment Date will equal the
sum of all outstanding Sales Proceeds Advances that have been outstanding as of
the end of that Collection Period for at least 270 days.
Amounts deposited in the Reserve Fund in accordance with clause (d) in the
first paragraph under "-- SUBI Collection Account" and clause (b) under
"-- Reserve Fund" will be deemed to have been distributed to the Subordinated
Noteholder as payments in respect of interest, including overdue interest, and
the Subordinated Noteholder will not be entitled to any further interest on such
amounts after the related Payment Date.
Amounts deposited in the Reserve Fund in accordance with clause (f) in the
first paragraph under "--SUBI Collection Account" and clause (d) under
"-- Reserve Fund" will be deemed to have been distributed to the Subordinated
Noteholder as payments in respect of principal, including overdue principal, and
the Subordinated Noteholder will not be entitled to any further interest on such
amounts after the related Payment Date.
The final distribution to any Senior Noteholder will be made only upon
surrender and cancellation of the certificate representing its Senior Notes at
an office or agency of the Trust specified in the notice of termination. Any
funds remaining in the Trust, after the related Trustee has taken certain
measures to locate the related Senior Noteholders and those measures have
failed, will be distributed to the Administrative Agent.
Optional Purchase
In order to avoid excessive administrative expenses, the Transferor will be
permitted at its option to purchase from the Trust the Vehicle SUBI Certificate
and SUBI Interest evidenced thereby, and to terminate the pledge of the Lease
SUBI Certificate and the SUBI Interest evidenced thereby, on any Payment Date
if, either before or after giving effect to any payment of principal required to
be made on that Payment Date, the Securities Balance is less than or equal to
10% of the sum of the Initial Senior Note Balance, the Initial
56
<PAGE> 58
Certificate Balance and the Initial Subordinated Note Balance (collectively, the
"Initial Securities Balance"). The exercise of that option by the Transferor is
referred to in this prospectus as an "Optional Purchase". The purchase price for
the Vehicle SUBI Certificate and the termination of the pledge of the Lease SUBI
Certificate will equal the Securities Balance, together with accrued interest
thereon to the date fixed for redemption (the "Optional Purchase Price"), which
will be deposited by the Transferor into the SUBI Collection Account on the
Deposit Date related to the Payment Date fixed for redemption. In connection
with an Optional Purchase, the Senior Notes will be redeemed on that Payment
Date in whole, but not in part, for the Redemption Price. The "Redemption Price"
for the Senior Notes will equal the Senior Note Balance, plus accrued and unpaid
interest thereon at the related Interest Rates, to but not including the Payment
Date fixed for redemption. The Administrator or the Trust will provide at least
45 days' prior notice of the redemption of the Senior Notes to the Indenture
Trustee, which will provide at least 30 days' notice to the Senior Noteholders.
On the Payment Date fixed for redemption, the Senior Notes will be due and
payable at the Redemption Price, and no interest will accrue on the Senior Notes
after the Payment Date.
Statements to Senior Noteholders
On each Payment Date, the Indenture Trustee or the Owner Trustee, as the
case may be, will include with each distribution to each Senior Noteholder of
record, or as of the close of business on the related Record Date -- which, in
the case of the Senior Notes, shall be Cede as the nominee of DTC unless
Definitive Notes are issued under the limited circumstances described in this
prospectus -- and each Rating Agency, a statement, setting forth with respect to
that Payment Date or the related Deposit Date or Collection Period, as the case
may be, among other things, the following:
(a) the amount of Collections allocable to each of the SUBI Certificates
and the Retained SUBI Certificates for that Collection Period;
(b) the amount being distributed to the Senior Noteholders (the "Senior
Note Distribution Amount");
(c) the amount of the Senior Note Distribution Amount allocable to interest
on and principal of the Senior Notes, and any Principal Carryover
Shortfall for the Senior Notes, the Subordinated Notes and the
Certificates, respectively;
(d) the amount of Available Funds for that Collection Period;
(e) the amount of Sales Proceeds Advances and Financial Component Advances
included in Available Funds;
(f) the amount of Residual Value Losses and Residual Value Surplus for that
Collection Period and the Residual Value Surplus Draw Amount, if any,
included in Available Funds, after giving effect to the Retained
Certificate Distribution Amount;
(g) the Reserve Fund Draw Amount, if any, the balance on deposit in the
Reserve Fund on that Payment Date after giving effect to withdrawals
therefrom and deposits thereto in respect of that Payment Date and the
change in that balance from the immediately preceding Payment Date;
(h) the aggregate outstanding principal balance of the Senior Notes, the
Subordinated Notes and the Certificates;
(i) the Note Factor for the Senior Notes after giving effect to the
distribution of the Senior Note Distribution Amount;
(j) the amount of Special Event Purchases made during that Collection
Period and the aggregate Cutoff Date Securitization Value of all
Specified Leases relating to Special Event Purchases made (a) during
the related calendar year or (b) since the Closing Date;
(k) the Payment Date Advance Reimbursement; and
(l) the Administration Fee.
57
<PAGE> 59
Each amount set forth pursuant to clauses (b), (c), (h) and (k) above will
be expressed in the aggregate and as a dollar amount per $1,000 of original
principal balance of a Senior Note, Subordinated Note or Certificate, as
applicable. Copies of the statements may be obtained by Senior Noteholders or
Senior Note Owners by a request in writing addressed to the Indenture Trustee.
In addition, within the prescribed period of time for tax reporting purposes
after the end of each calendar year, the Indenture Trustee -- during the term of
the Indenture -- will mail to each person who at any time during that calendar
year was a Senior Noteholder a statement containing that information as is
reasonably necessary to permit the Noteholder to prepare its state and federal
income taxes.
Definitive Notes
Definitive Notes will be issued in fully registered, certificated form to
Senior Note Owners rather than to DTC only if:
- DTC is no longer willing or able to discharge its responsibilities as
depository with respect to the Senior Notes, and neither the Indenture
Trustee nor the Transferor is able to locate a qualified successor,
- the Transferor, at its option, elects to terminate the book-entry system
through DTC, or
- after an Indenture Default, Senior Note Owners representing in the
aggregate not less than 51% of the aggregate principal amount of the
Senior Notes advise the Indenture Trustee through DTC and its
Participants in writing that the continuation of a book-entry system
through DTC or its successor is no longer in the best interest of Senior
Note Owners.
Upon the occurrence of any of the events described in the immediately
preceding paragraph, the Indenture Trustee will be required to notify all Senior
Note Owners, through Participants, of the availability through DTC of Definitive
Notes. Upon surrender by DTC of the certificates representing all Senior Notes
and the receipt of instructions for re-registration, the Indenture Trustee will
issue Definitive Notes to Senior Note Owners, who thereupon will become Senior
Noteholders for all purposes of the Indenture.
Payments on the Definitive Notes will be made by the Indenture Trustee or
the Owner Trustee, as the case may be, directly to the holders of the Definitive
Notes in accordance with the procedures set forth in this prospectus and to be
set forth in the Indenture. Interest and principal payments on the Securities on
each Payment Date will be made to the holders in whose names the related
Definitive Notes were registered at the close of business on the Record Date
with respect to that Payment Date. Payments will be made by check mailed to the
address of such holders as they appear on the Note Register. However, the final
payment on any Definitive Notes, or if Definitive Notes have not been issued,
certificates registered in the name of Cede representing the Senior Notes, will
be made only upon presentation and surrender of the Definitive Notes at the
office or agency specified in the notice of final payment to Senior Noteholders.
The Indenture Trustee or the Owner Trustee, as the case may be, or a paying
agent will provide that notice to the registered Senior Noteholders not more
than 30 days or less than 15 days prior to the date on which the final payment
is expected to occur.
Definitive Notes will be transferable and exchangeable at the offices of
the Indenture Trustee or the Owner Trustee or the Note Registrar to be set forth
in the Indenture. No service charge will be imposed for any registration of
transfer or exchange, but the Indenture Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith.
SECURITY FOR THE SECURITIES
General
The property of the Trust -- the Trust Estate -- will consist of:
- the right to receive payments under the Program Operating Lease under
which the Trust will lease to the Transferor the Vehicle SUBI Certificate
and the SUBI Interest evidenced thereby, which is more fully described
under "The SUBIs -- General";
58
<PAGE> 60
- the pledge by the Transferor of the Lease SUBI Certificate as security
for such payments;
- the right to receive 99% of the amounts realized from sales of Specified
Vehicles;
- certain rights to payment from the Reserve Fund and the Residual Value
Surplus Account; and
- the other property and assets described under "The Trust -- Property of
the Trust", including available amounts on deposit in the Reserve Fund
and the Trust's rights as a third-party beneficiary of the SUBI Trust
Agreement and the Administration Agreement.
The Program Operating Lease
General
Immediately following the sale, transfer and assignment of the Vehicle SUBI
Certificate to the Trust and the pledge to the Indenture Trustee of the Trust's
interest therein as described in "The SUBIs--Transfers of the SUBI
Certificates", the Trust and the Transferor will enter into the Program
Operating Lease pursuant to which the Trust will lease the Vehicle SUBI
Certificate to the Transferor during the term of the Program Operating Lease. As
lessee, the Transferor will be entitled to receive all proceeds from the Vehicle
SUBI Certificate in respect of the Specified Vehicles during the term of the
Program Operating Lease and will be required to make Program Operating Lease
Payments to the Trust.
Program Operating Lease Terms
Under the Program Operating Lease, the Transferor will make payments to the
Trust in the amount of (a) the Financial Component of the Fixed Charge paid by
the Obligors during the related Collection Period and (b) all Termination Value
Payments made by Obligors following the exercise of the Annual Termination
Option during the related Collection Period (the "Program Operating Lease
Payments").
The termination date of the Program Operating Lease (the "Program Operating
Lease Termination Date") will be 60 days after the latest Maturity Date of any
Specified Lease as of the Cutoff Date. Notwithstanding the Program Operating
Lease Termination Date, the Program Operating Lease will expire with respect to
each Specified Lease and the related Specified Vehicle on the earliest to occur
of:
- the related Maturity Date;
- the effective date of exercise by the Administrative Agent or the related
Obligor of the Annual Termination Option;
- the date of the Administrative Agent's termination of that Specified
Lease for other commercial reasons as described under "Additional
Document Provisions -- The Administration Agreement -- Purchase of
Specified Vehicles Before their Maturity Dates";
- the date that Specified Lease becomes a Default Termination Lease;
- the date that Specified Lease becomes a Casualty Termination Lease; or
- the date the Administrative Agent is required to purchase that Specified
Vehicle pursuant to certain provisions of the Administration Agreement.
Program Operating Lease Defaults; Remedies
Defaults under the Program Operating Lease (each, a "Program Operating
Lease Default") will include, among other things, the failure by the Transferor
to make timely Program Operating Lease Payments to the Trust, breach of a
material representation or warranty, failure to observe or perform certain
covenants and the occurrence of an Indenture Default. Upon the occurrence of a
Program Operating Lease Default, (a) the Indenture Trustee, as assignee of the
Trust's rights under the Program Operating Lease pursuant to the pledge of the
Trust Estate, will be entitled to terminate the Program Operating Lease and to
foreclose on the pledge of the Lease SUBI Certificate. Upon that termination,
the Trust will directly receive all distributions with respect to, or will have
the right to sell, the SUBI Certificates and to apply the funds on deposit in
the
59
<PAGE> 61
Accounts to pay interest on and principal of the Senior Notes. Each Program
Operating Lease Default will constitute an Indenture Default, which will permit
the Senior Noteholders to accelerate the maturity of the Senior Notes and, in
some circumstances, cause the sale of the Trust Estate. See "Additional Document
Provisions -- The Indenture -- Indenture Defaults". If the maturity of the
Senior Notes has been accelerated following a Program Operating Lease Default,
the Indenture Trustee, as assignee of the Trust, will be entitled to demand that
the Transferor pay all previously due but as yet unpaid Program Operating Lease
Payments plus, as liquidated damages, an amount equal to the sum of:
- any interest due and unpaid on the Securities,
- the unpaid principal balance of the Securities, and
- any other amounts payable by the Transferor under the Basic Documents.
Upon payment of such amounts, the Transferor will be entitled to receive the
SUBI Certificates.
The Subordinated Notes
Interest will accrue on the unpaid principal amount of the Subordinated
Notes during each Accrual Period at a rate per annum (the "Subordinated Note
Rate") equal to %. Interest on the Subordinated Notes will be calculated on
the basis of a 360-day year consisting of twelve 30-day months. Payments of
interest on and principal of the Subordinated Notes will be subordinated to
payments on the Senior Notes to the extent described herein.
To secure payments of principal and interest on the other Securities, the
Transferor will pledge all of its right, title and interest in the Subordinated
Notes to the Trust and deliver them to the Indenture Trustee as a portion of the
Trust Estate. On each Payment Date, payments in respect of the Subordinated
Notes will be deposited into the Reserve Fund. If, on any Payment Date, after
the application of amounts required to be paid on that Payment Date, the amount
on deposit therein exceeds the Reserve Fund Requirement, (a) any such excess up
to the amounts deposited into the Reserve Fund on or before that Payment Date in
respect of the Subordinated Notes will be released to the Transferor as the
Subordinated Noteholder and (b) any additional excess shall be released to the
Transferor.
The Certificates
Payments on the Certificates will be subordinated to payments on the Senior
Notes and the Subordinated Notes to the extent described in this prospectus. The
right of the holder of the Transferor Certificate to receive distributions of
principal and interest will rank pari passu with the rights of the holders of
the other Certificates.
Interest on the Certificates will accrue during each Accrual Period at a
rate per annum (the "Certificate Rate") equal to % until the principal
amount of the Certificates has been paid in full. Interest on the Certificates
will be calculated on the basis of a 360-day year consisting of twelve 30-day
months. Interest payments on the Certificates on a Payment Date generally will
be made from the sum of (1) Available Funds remaining after the Administrative
Agent has been paid the Payment Date Advance Reimbursement and the
Administration Fee and all amounts allocated to payment of interest on the
Senior Notes have been paid and (2) the Reserve Fund Draw Amount, if any,
remaining after all amounts allocated to payment of interest on the Senior Notes
have been paid.
Principal payments will be made to Certificateholders as described under
"Description of the Senior Notes -- Principal". If not paid in full prior to the
Final Payment Date, the remaining Certificate Balance, if any, will be payable
on that Payment Date.
The Certificates will be subject to prepayment in whole, but not in part,
on any Payment Date relating to an Optional Purchase. In the event of an
Optional Purchase, the Certificateholders will receive an amount in respect of
the Certificates equal to the Certificate Balance, together with accrued
interest thereon at the Certificate Rate.
60
<PAGE> 62
The Accounts
The SUBI Collection Account
On or prior to the Closing Date, the Origination Trustee will establish a
trust account for the benefit of the holders of interests in the SUBI, into
which collections on or in respect of the Specified Leases and the Specified
Vehicles will generally be deposited (the "SUBI Collection Account").
Deposits into the SUBI Collection Account. As more fully described under
"Additional Document Provisions -- The Administration Agreement -- Collections"
and "-- Monthly Remittance Condition", Collections and other amounts received on
or in respect of the SUBI Assets generally will be deposited by the
Administrative Agent into the SUBI Collection Account within two days after
processing, unless the Monthly Remittance Condition is satisfied. If the Monthly
Remittance Condition is satisfied, such amounts received in respect of a Monthly
Period will be deposited into the SUBI Collection Account on the second Business
Day following the end of the related Monthly Period, or, in the case of the
Monthly Period immediately preceding the related Payment Date, the related
Deposit Date. In addition, on each Deposit Date, the following additional
amounts, if any, in respect of the related Collection Period and Payment Date
will be deposited into the SUBI Collection Account: Advances made by the
Administrative Agent, the Residual Value Surplus Draw Amount and, in the case of
an Optional Purchase, the Optional Purchase Price. Payments received in respect
of the Maintenance Component either will not be deposited into the SUBI
Collection Account or will be withdrawn from the SUBI Collection Account on a
daily basis and, in either event, will be paid to or retained by the Maintenance
Provider. See "Additional Document Provisions -- The Administration
Agreement -- Collections" and "-- Monthly Remittance Condition".
Withdrawals from the SUBI Collection Account. On each Deposit Date, the
Administrative Agent shall cause the Origination Trustee to withdraw from the
SUBI Collection Account and deposit in the Residual Surplus Value Account, the
amount of Residual Value Surplus for each Specified Vehicle sold during the
related Collection Period. On each Payment Date, the Origination Trustee shall
transmit or shall cause to be transmitted:
- the sum of (1) all Available Funds for the related Collection Period and
(2) the Retained Administration Payment in the amounts, in the priority,
and to such accounts as set forth under "Certain Information Regarding
the Securities -- Payments on the Securities -- Deposits to the
Distribution Accounts; Priority of Payments", and
- the excess of (1) the Retained Certificate Distribution
Amount -- representing amounts payable in respect of the Retained SUBI
Interest -- for the related Collection Period over (2) 1% of the
Administration Fee for the related Collection Period (the "Retained
Administration Payment"), to an account specified by the holder of the
Retained SUBI Certificates.
In the event that on any date the Administrative Agent supplies the
Origination Trustee and the Indenture Trustee with an officer's certificate
setting forth the basis for such withdrawal, the Origination Trustee shall remit
to the Administrative Agent or the Maintenance Provider, as the case may be,
without interest and before to any other distribution from the SUBI Collection
Account on that date, monies from the SUBI Collection Account representing (a)
payments in respect of the Maintenance Component and (b) unreimbursed
Disposition Expenses.
The Reserve Fund
On or before the Closing Date, the Owner Trustee will establish a trust
account in the name of the Indenture Trustee for the benefit of the
Securityholders (the "Reserve Fund"). The Reserve Fund will be established to
provide additional security for payments on the Senior Notes. On each Payment
Date, amounts on deposit in the Reserve Fund, together with Available Funds,
will be available to make the distributions described under "Additional
Information Regarding the Securities -- Payments on the Securities -- Deposits
to the Distribution Accounts; Priority of Payments".
61
<PAGE> 63
The Reserve Fund initially will be funded by the Transferor with a deposit
of $9,970,408.92 (the "Initial Deposit"), and the amounts on deposit in the
Reserve Fund will be pledged to the Trust. As described under "-- The
Subordinated Notes", all payments made on the Subordinated Notes will be
deposited in the Reserve Fund. On each Payment Date, monies on deposit in the
Reserve Fund will be supplemented by the deposit of:
- payments of interest on and principal of the Subordinated Notes,
- any Excess Amounts, and
- income received on the investment of funds on deposit in the SUBI
Collection Account, the Residual Value Surplus Account and the Reserve
Fund.
On each Payment Date, a withdrawal will be made from the Reserve Fund in an
amount (the "Reserve Fund Draw Amount") equal to the sum of (a) the lesser of
(1) the Available Funds Shortfall Amount, calculated as described under
"Additional Information Regarding the Securities -- Payments on the
Securities -- Determination of Available Funds" for that Payment Date, and (2)
the amount on deposit in the Reserve Fund after giving effect to all deposits
thereto on the related Deposit Date or that Payment Date; and (b) in the event
the amount on deposit in the Reserve Fund, after giving effect to all
withdrawals therefrom and deposits thereto made on or in respect of that Payment
Date exceeds the unpaid principal balance of the Securities, the Securities
Balance.
On any Payment Date on which the amount on deposit in the Reserve Fund,
after giving effect to all withdrawals therefrom and deposits thereto in respect
of that Payment Date, exceeds the Reserve Fund Requirement, any such excess (a)
up to the amounts deposited into the Reserve Fund on or before that Payment Date
in respect of the Subordinated Notes, will be released to the Transferor as the
holder of the Subordinated Notes (in that capacity, the "Subordinated
Noteholder") and (b) any additional excess shall be released to the Transferor.
On any Payment Date, the "Reserve Fund Requirement" will equal:
- 3.25% of the Initial Securities Balance, or
- on any Payment Date occurring on or after the earlier to occur of the
date on which the last remaining Specified Lease terminates or the date
on which the Program Operating Lease is terminated following a Program
Operating Lease Default, zero, or
- on any Payment Date when the Senior Note Balance shall be zero, the
Securities Balance.
The Residual Value Surplus Account
On or before the Closing Date, the Origination Trustee will cause a trust
account to be established in the name of the Origination Trustee for the benefit
of the holders of interests in the SUBIs, into which all Residual Value Surplus
with respect to a Collection Period will be deposited on the related Deposit
Date (the "Residual Value Surplus Account").
The Residual Value Surplus Account will not be funded with any money on the
Closing Date. On the Business Day immediately preceding each Payment Date (each,
a "Deposit Date"), the Administrative Agent will cause the Origination Trustee
to transfer to the Residual Value Surplus Account from the SUBI Collection
Account the amount, if any, of Residual Value Surplus for each Expired Vehicle
sold during that Collection Period.
On each Deposit Date, a withdrawal of an amount equal to the lesser of (a)
the sum of all Residual Value Losses and any unreimbursed Disposition Expenses
relating to Specified Vehicles that were sold by the Administrative Agent during
the related Collection Period and (b) the amount on deposit in the Residual
Value Surplus Account (the "Residual Value Surplus Draw Amount") will be made
from the Residual Value Surplus Account for deposit into the SUBI Collection
Account. On each Payment Date, after giving effect to the withdrawal of the
Residual Value Surplus Draw Amount, if any, from the Residual Value Surplus
62
<PAGE> 64
Account described in the immediately preceding paragraph on the related Deposit
Date, any amounts remaining on deposit in the Residual Value Surplus Account
will be paid to the Transferor.
The Distribution Accounts
On or before the Closing Date, (a) the Indenture Trustee will establish a
trust account in the name of the Indenture Trustee on behalf of the Senior
Noteholders, into which amounts released from the SUBI Collection Account and,
when necessary, from the Reserve Fund, for distribution to the Senior
Noteholders will be deposited and from which all distributions to the Senior
Noteholders will be made (the "Note Distribution Account") and (b) the Owner
Trustee will establish a trust account in the name of the Owner Trustee on
behalf of the Certificateholders, into which amounts released from the SUBI
Collection Account and, when necessary, from the Reserve Fund, for distribution
to the Certificateholders will be deposited and from which all distributions to
the Certificateholders will be made (the "Certificate Distribution Account" and,
together with the Note Distribution Account, the "Distribution Accounts"). For
further information regarding these deposits and payments, see "-- The SUBI
Collection Account" and "-- The Reserve Fund".
On or before each Payment Date, (a) the Origination Trustee shall deposit
or cause to be deposited from the SUBI Collection Account and (b) the Indenture
Trustee shall deposit from the Reserve Fund, if necessary, respectively, the
amounts allocable to the Senior Noteholders and the Certificateholders, as set
forth in "Additional Information Regarding the Securities -- Payments on the
Securities -- Deposits to the Distribution Accounts; Priority of Payments" for
the related Payment Date in the Note Distribution Account and the Certificate
Distribution Account, respectively. On each Payment Date, the Indenture Trustee
and the Owner Trustee will distribute to the Senior Noteholders and the
Certificateholders the allocated amounts for the related Collection Period to
the Senior Noteholders and the Certificateholders, respectively.
Maintenance of the Accounts
The Note Distribution Account and the Reserve Fund, and the SUBI Collection
Account and the Residual Value Surplus Account, will be maintained with the
Indenture Trustee and the Trust Agent, respectively, so long as either (a) the
short-term unsecured debt obligations of the Indenture Trustee or the Trust
Agent, as the case may be, are rated in the highest short-term rating category
by each Rating Agency or (b) the Indenture Trustee or the Trust Agent, as the
case may be, is a depository institution or trust company having a long-term
unsecured debt rating acceptable to each Rating Agency and corporate trust
powers and the related Account is maintained in the corporate trust department
of the Indenture Trustee or the Trust Agent, as the case may be (the "Required
Deposit Rating"). Each of the foregoing accounts will be segregated trust
accounts. If either of the Indenture Trustee or the Trust Agent at any time does
not have the Required Deposit Rating, the Administrative Agent shall, with the
assistance of the Indenture Trustee or the Trust Agent, as the case may be, as
necessary, cause the related Account to be moved to a depository institution or
trust company organized under the laws of the United States or any State that
has the Required Deposit Rating.
On the Payment Date on which all Securities have been paid in full and
following payment of any remaining obligations of the Transferor under the Basic
Documents, any amounts remaining on deposit in the Accounts -- after giving
effect to all withdrawals therefrom and deposits thereto in respect of that
Payment Date -- will be paid to the Transferor.
Permitted Investments
When funds are deposited in (a) the SUBI Collection Account and the
Residual Value Surplus Account and (b) the Reserve Fund, they will be invested
at the direction of the Administrative Agent and the Administrator,
respectively, in one or more Permitted Investments maturing no later than the
Deposit Date immediately succeeding the date of that investment. Notwithstanding
the foregoing, investments on which the entity at which the related Account is
located is the obligor may mature on the related Deposit Date.
On each Payment Date, all net income or other gain from the investment of
funds on deposit in the Residual Value Surplus Account, the Reserve Fund and the
SUBI Collection Account in respect of the
63
<PAGE> 65
related Collection Period will be deposited in the Reserve Fund. "Permitted
Investments" will be specified in the SUBI Trust Agreement and will be limited
to investments that meet the criteria of each Rating Agency from time to time as
being consistent with its then-current rating of the Senior Notes and the
Certificates.
The Contingent and Excess Liability Insurance
In addition to the personal property and liability insurance coverage
required to be obtained and maintained by the Obligor or Ryder pursuant to the
Specified Leases, and as additional protection in the event the Obligor fails to
maintain the required insurance, Ryder maintains contingent liability insurance
for the benefit of, among others, Ryder, the Origination Trust, the UTI
Beneficiaries, the Transferor and the Trust, which provides coverage, with no
annual or aggregate cap on the number of claims thereunder, for liability caused
by any Specified Vehicle owned by the Origination Trust. Ryder also maintains
substantial amounts of excess insurance coverage as to which the Origination
Trustee is an additional named insured (together with the aforementioned primary
contingent liability insurance policy, the "Contingent and Excess Liability
Insurance"). These insurance policies collectively provide insurance coverage in
excess of $10 million per accident and permit multiple claims in any policy
period. Claims could be imposed against the assets of the Origination Trust if
such coverage were exhausted and damages were assessed against the Origination
Trust. In that event, investors in the Senior Notes could incur a loss on their
investment. See "Risk Factors -- Vicarious tort liability may result in a loss
of your investment", "Additional Legal Aspects of the Origination Trust and the
SUBIs -- The SUBIs" and "Additional Legal Aspects of the Specified Leases and
the Specified Vehicles -- Vicarious Tort Liability" for a discussion of related
risks.
With respect to damage to the Specified Vehicles, an Obligor may be
required by the related Specified Lease to maintain comprehensive and collision
insurance. As more fully described under "Additional Document Provision -- The
Administration Agreement -- Insurance on Specified Vehicles", the Administrative
Agent will be required to monitor the maintenance of required Obligor insurance.
In the event that the foregoing insurance coverage was exhausted and no
third-party reimbursement for that damage was available, investors in the Senior
Notes could incur a loss on their investment.
The Administration Agreement will provide that for so long as any Senior
Notes or Certificates are outstanding, neither the Origination Trustee nor Ryder
may terminate or cause the termination of any Contingent and Excess Liability
Insurance policy unless each Rating Agency has delivered a letter to the effect
that such termination or any replacement insurance would not cause its
then-current ratings of the Senior Notes or the Certificates to be qualified,
reduced or withdrawn. These obligations of Ryder will survive any termination of
Ryder as Administrative Agent under the Administration Agreement.
ADDITIONAL DOCUMENT PROVISIONS
The Indenture
Indenture Defaults
The following events (each an "Indenture Default") will be events of
default under the Indenture:
- a default for 30 days or more in the payment of interest on the Senior
Notes;
- a default in the payment of principal of a class of Senior Notes on the
related Final Payment Date or on a Payment Date fixed for redemption of
the Senior Notes;
- the occurrence of a Program Operating Lease Default;
- a default in the observance or performance of any covenant or agreement,
or any representation or warranty made in the Indenture or in any
certificate or writing delivered under the Indenture proves to have been
incorrect in any material respect at the time made, and the continuation
of that default for a period of 30 days after notice thereof is given to
the Trust by the Indenture Trustee or to the Trust and the Indenture
Trustee by the holders of not less than 25% of the aggregate principal
balance of the Senior Notes; or
- certain events of bankruptcy, insolvency, receivership or liquidation of
the Trust.
64
<PAGE> 66
Senior Noteholders holding at least a majority of the aggregate principal
balance of the Senior Notes may waive any past default or Indenture Default
prior to the declaration of the acceleration of the maturity of the Senior
Notes, except a default in the payment of principal of or interest on any of the
Senior Notes, or in respect of any covenant or provision in the Indenture that
cannot be modified or amended without unanimous consent of the Senior
Noteholders.
Remedies
If an Indenture Default occurs and is continuing, the Indenture Trustee or
the holders of a majority of the aggregate principal balance of the Senior Notes
may declare the principal of the Senior Notes to be immediately due and payable.
This declaration may be rescinded by the holders of a majority of the aggregate
principal balance of the Senior Notes before a judgment or decree for payment of
the amount due has been obtained by the Indenture Trustee if
- the Trust has deposited with the Indenture Trustee an amount sufficient
to pay (1) all interest on and principal of the Senior Notes as if the
Indenture Default giving rise to that declaration had not occurred and
(2) all amounts advanced by the Indenture Trustee and its costs and
expenses, and
- all Indenture Defaults -- other than the nonpayment of principal of the
Senior Notes that has become due solely due to that acceleration -- have
been cured or waived.
If the Senior Notes have been declared due and payable following an
Indenture Default, the Indenture Trustee may institute proceedings to collect
amounts due, exercise remedies as a secured party, including foreclosure or sale
of the Trust Estate, or elect to maintain the Trust Estate and continue to apply
proceeds from the Trust Estate as if there had been no declaration of
acceleration. The Indenture Trustee may not, however, unless it is required to
sell the Trust Estate under the Trust Agreement as a result of the bankruptcy or
insolvency of the Transferor, sell the Trust Estate following an Indenture
Default -- other than the occurrence of an Indenture Default described in the
first two bullet points in the definition thereof -- unless
- 100% of the Senior Noteholders consent thereto,
- the proceeds of that sale are sufficient to pay in full the principal of
and the accrued interest on all outstanding Securities, or
- the Indenture Trustee determines that the Trust Estate would not be
sufficient on an ongoing basis to make all payments on the Senior Notes
as such payments would have become due if such obligations had not been
declared due and payable, and the Indenture Trustee obtains the consent
of holders of 66 2/3% of the aggregate principal balance of the Senior
Notes.
The Indenture Trustee may, but is not required to, obtain and rely upon an
opinion of an independent accountant or investment banking firm as to the
sufficiency of the Trust Estate to pay interest on and principal of the Senior
Notes on an ongoing basis. Any sale of the Trust Estate, other than a sale
resulting from the bankruptcy, insolvency or termination of the Transferor, is
subject to the requirement that an opinion of counsel be delivered to the effect
that such sale will not cause the Origination Trust or the Trust to be
classified as an association, or a publicly traded partnership, taxable as a
corporation for federal income tax purposes.
In the event of a sale of the Trust Estate, either as a result of the
bankruptcy or insolvency of the Transferor or following the occurrence of an
Indenture Default under the circumstances described in the prior paragraph, at
the direction of the Indenture Trustee or the Senior Noteholders, the proceeds
of such sale, including available monies on deposit in the Reserve Fund, will be
distributed first, to the Indenture Trustee for amounts due as compensation or
indemnity payments pursuant to the terms of the Indenture; second, to the
Administrative Agent for reimbursement of all outstanding Advances; third, to
the Administrative Agent for amounts due in respect of unpaid Administration
Fees; fourth, to the Senior Noteholders to pay due and unpaid
interest -- including any overdue interest and, to the extent permitted under
applicable law, interest on any overdue interest at the related Interest Rate;
fifth, to the Reserve Fund for the payment of due and unpaid interest including
any overdue interest and, to the extent permitted under applicable law, interest
on
65
<PAGE> 67
any overdue interest at the Subordinated Note Rate -- on the Subordinated Notes;
sixth, to the Certificate Distribution Account for the payment of due and unpaid
interest -- including any overdue interest and, to the extent permitted under
applicable law, interest on any overdue interest at the Certificate Rate -- on
the Certificates; seventh, to the holders of the Class A-1 Senior Notes to pay
due and unpaid principal on the Class A-1 Senior Notes, eighth, to the holders
of all other classes of Senior Notes to pay due and unpaid principal on those
classes of Senior Notes, which shall be allocated to such classes of Senior
Notes on a pro rata basis; ninth, ratably to the Subordinated Noteholder for
amounts due and unpaid in accordance with the terms of the Subordinated Notes,
which amounts shall be deposited into the Reserve Fund, and the
Certificateholders for amounts due and unpaid in accordance with the terms of
the Certificates; tenth, to the Transferor, in its capacity as Subordinated
Noteholder, up to the amount deposited into the Reserve Fund in respect of the
Subordinated Notes on or before the date of the preceding distributions; and
eleventh, any remaining amounts shall be paid to the Transferor.
Subject to the provisions of the Indenture relating to the duties of the
Indenture Trustee, if an Indenture Default occurs and is continuing, the
Indenture Trustee will be under no obligation to exercise any of the rights or
powers under the Indenture at the request or direction of any of the Senior
Noteholders if the Indenture Trustee reasonably believes it will not be
adequately indemnified against the costs, expenses and liabilities that might be
incurred by it in complying with that request. Subject to such provisions for
indemnification and some limitations contained in the Indenture, the holders of
at least a majority of the aggregate principal balance of the Senior Notes will
have the right to direct the time, method and place of conducting any proceeding
or any remedy available to the Indenture Trustee or exercising any trust power
conferred on the Indenture Trustee. In addition, the holders of at least a
majority of the aggregate principal balance of the Senior Notes may, in some
cases, waive any default with respect to the Indenture, except a default in the
payment of principal or interest or a default in respect of a covenant or
provision of the Indenture that cannot be modified without the waiver or consent
of all holders of outstanding Senior Notes.
No Senior Noteholder will have the right to institute any proceeding with
respect to the Indenture unless:
- that Senior Noteholder previously has given the Indenture Trustee written
notice of a continuing Indenture Default,
- Senior Noteholders holding not less than 25% of the aggregate principal
balance of the Senior Notes have made written request of the Indenture
Trustee to institute that proceeding in its own name as Indenture
Trustee,
- the Senior Noteholder has offered the Indenture Trustee reasonable
indemnity,
- the Indenture Trustee has for 60 days failed to institute that
proceeding, and
- no direction inconsistent with that written request has been given to the
Indenture Trustee during that 60 day period by Senior Noteholders holding
a majority of the aggregate principal balance of the Senior Notes.
Neither the Indenture Trustee nor the Owner Trustee in their respective
individual capacities, nor any holder of a Subordinated Note or a Certificate,
nor any of their respective owners, beneficiaries, agents, officers, directors,
employees, successors or assigns will, in the absence of an express agreement to
the contrary, be personally liable for the payment of interest on or principal
of the Senior Notes or for the agreements of the Trust or the Trustee, in its
capacity as trustee, contained in the Indenture.
Certain Covenants
Under the Indenture, the Trust will covenant that it will not
- sell, transfer, exchange or otherwise dispose of any of its assets,
except as expressly permitted by the Indenture, the Program Operating
Lease and the other Basic Documents,
- claim any credit on or make any deduction from the principal and interest
payable in respect of the Senior Notes -- other than amounts withheld
under the Code or applicable state law -- or assert any
66
<PAGE> 68
claim against any present or former Senior Noteholder because of the
payment of taxes levied or assessed upon the Trust, or
- permit (1) the validity or effectiveness of the Indenture to be impaired,
(2) any person to be released from any covenants or obligations with
respect to the Senior Notes under the Indenture except as may be
expressly permitted thereby or (3) any lien, charge, excise, claim,
security interest, mortgage or other encumbrance to be created on or
extend to or otherwise arise upon or burden the Trust's assets or any
part thereof, or any interest therein or the proceeds therefrom.
The Trust may not engage in any activities other than financing, acquiring,
owning, leasing -- subject to the lien of the Indenture -- pledging and managing
the SUBI Certificates as contemplated by the Indenture and the other Basic
Documents. The Trust will not incur, assume or guarantee any indebtedness other
than indebtedness incurred pursuant to the Securities or otherwise in accordance
with the Basic Documents.
Replacement of the Indenture Trustee
Senior Noteholders holding at least a majority of the aggregate principal
balance of the Senior Notes may remove the Indenture Trustee without cause by so
notifying the Indenture Trustee and the Trust, and following that removal may
appoint a successor Indenture Trustee. Any successor Indenture Trustee must at
all times satisfy all applicable requirements of the Trust Indenture Act of
1939, and in addition, have a combined capital and surplus of at least
$50,000,000 and a long-term debt rating of "A" or better by each Rating Agency
or be otherwise acceptable to each Rating Agency. Each Rating Agency must
confirm that the appointment of the successor Indenture Trustee would not cause
the then-current ratings on the Senior Notes and the Certificates to be
qualified, reduced or withdrawn.
The Indenture Trustee may resign at any time by so notifying the Trust, the
Administrative Agent and each Rating Agency. The Trust will be required to
remove the Indenture Trustee if the Indenture Trustee:
- ceases to be eligible to continue as the Indenture Trustee,
- is adjudged to be bankrupt or insolvent, or
- otherwise becomes incapable of acting.
Upon the resignation or removal of the Indenture Trustee, or the failure of the
Senior Noteholders to appoint a successor Indenture Trustee following the
removal without cause of the Indenture Trustee, the Trust will be required
promptly to appoint a successor Indenture Trustee.
Duties of Indenture Trustee
Except during the continuance of an Indenture Default, the Indenture
Trustee will
- perform such duties and only such duties as are specifically set forth in
the Indenture,
- rely, as to the truth of the statements and the correctness of the
opinions expressed therein, on certificates or opinions furnished to the
Indenture Trustee that conform to the requirements of the Indenture, and
- examine any such certificates and opinions that are specifically required
to be furnished to the Indenture Trustee by the Indenture to determine
whether or not they conform to the requirements of the Indenture.
Upon the continuance of an Indenture Default, the Indenture Trustee will be
required to exercise the rights and powers vested in it by the Indenture and use
the same degree of care and skill in the exercise thereof as a prudent person
would exercise or use under the circumstances in the conduct of that person's
own affairs.
67
<PAGE> 69
Compensation and Indemnity
The Administrative Agent or the Administrator will
- pay the Indenture Trustee from time to time reasonable compensation for
its services,
- reimburse the Indenture Trustee for all reasonable expenses, advances and
disbursements reasonably incurred by it in connection with the
performance of its duties as Indenture Trustee, and
- indemnify the Indenture Trustee for, and hold it harmless against, any
loss, liability or expense, including reasonable attorneys' fees and
expenses, incurred by it in connection with the performance of its duties
as Indenture Trustee.
The Indenture Trustee will not be indemnified by the Administrator against any
loss, liability or expense incurred by it through its own willful misconduct,
negligence or bad faith, except that the Indenture Trustee will not be liable
- for any error of judgment made by it in good faith, unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts,
- with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it from the Senior Noteholders in
accordance with the terms of the Indenture, and
- for interest on any money received by it except as the Indenture Trustee
and the Trust may agree in writing.
The Indenture Trustee will not be deemed to have knowledge of any event unless
an officer of the Indenture Trustee has actual knowledge of the event or has
received written notice of the event in accordance with the provisions of the
Indenture.
Access to Senior Noteholder Lists
If Definitive Notes are issued in the limited circumstances set forth in
"Additional Information Regarding the Securities -- Definitive Notes", or the
Indenture Trustee is not the Senior Note Registrar, the Trust will furnish or
cause to be furnished to the Indenture Trustee a list of the names and addresses
of the Senior Noteholders (a) as of each Record Date, within five days
thereafter and (b) as of not more than ten days before the time that list is
furnished, within 30 days after receipt by the Trust of a written request for
the list.
Annual Compliance Statement
The Trust will be required to file an annual written statement with the
Indenture Trustee certifying the fulfillment of its obligations under the
Indenture.
Satisfaction and Discharge of Indenture
The Indenture will be discharged with respect to the collateral securing
the Senior Notes upon the delivery to the Indenture Trustee for cancellation of
all of the Senior Notes or, with some limitations -- including receipt of
certain opinions with respect to tax matters -- upon deposit with the Indenture
Trustee of funds sufficient for the payment in full of all of the Senior Notes,
including interest, and any fees due and payable to the Owner Trustee or the
Indenture Trustee.
The Trust Agreement
Authority and Duties of the Owner Trustee
The Owner Trustee will administer the Trust in the interest of the
Certificateholders, subject to the lien of the Indenture and the obligations of
the Trust with respect to the Notes, in accordance with the Trust Agreement and
the other Basic Documents.
68
<PAGE> 70
Subject to the rights of the Indenture Trustee under the Indenture, the
Transferor, as holder of the Transferor Certificate, may, by written
instruction, direct the Owner Trustee in the administration of the Trust;
provided that such instruction shall not, as evidenced by an opinion of counsel,
materially adversely affect any Senior Noteholder or Certificateholder. The
Owner Trustee will not be required to follow any such instruction if it
reasonably determines or is advised by counsel that so doing is likely to result
in liability to the Owner Trustee, contrary to the terms of the Trust Agreement
or any other Basic Document or any obligation of the Owner Trustee or the Trust,
or unlawful.
The Owner Trustee will not be required to perform any of the obligations of
the Trust under the Trust Agreement or the other Basic Documents that are
required to be performed by
- the Administrative Agent under the Administration Agreement or the SUBI
Trust Agreement;
- the Administrator under the Trust Agreement, the Trust Administration
Agreement or the Indenture;
- the Transferor under the SUBI Certificate Transfer Agreement or the
Program Operating Lease; or
- the Indenture Trustee under the Indenture.
Restrictions on Actions by Owner Trustee
The Owner Trustee may not:
- initiate or settle any claim or lawsuit involving the Trust, unless
brought by the Administrative Agent to collect amounts owed under a
Specified Lease;
- amend the Indenture by a supplemental indenture where Senior Noteholder
consent is required;
- amend the Indenture by supplemental indenture where Senior Noteholder
consent is not required if such amendment materially adversely affects
the Certificateholders; or
- amend any Basic Document other than the Trust Agreement if such amendment
materially adversely affects the Certificateholders;
unless (1) the Owner Trustee provides 30 days' written notice thereof to the
Certificateholders and each Rating Agency and (2) Certificateholders holding at
least 25% of the aggregate principal balance of the Certificates do not object
in writing to any such proposed amendment within 30 days of that notice.
Actions by Certificateholders and Owner Trustee with Respect to Certain
Matters
The Owner Trustee may not, except upon the occurrence of an Administrative
Agent Default subsequent to the payment in full of the Senior Notes and in
accordance with the written directions of Certificateholders holding 66 2/3% of
the aggregate principal balance of the Certificates, remove the Administrative
Agent with respect to the SUBI Assets or appoint a successor Administrative
Agent with respect thereto. However, the Owner Trustee will not be required to
follow any directions of the Certificateholders if doing so would be contrary to
any obligation of the Owner Trustee or the Trust. The Owner Trustee may not sell
the Vehicle SUBI Certificate or assign its interest in the Lease SUBI
Certificate except in the event of the bankruptcy or dissolution of the Trust or
the Transferor, or upon an Indenture Default -- and in any event unless the
Owner Trustee has properly foreclosed on the Lease SUBI. Upon any such sale of
the Vehicle SUBI Certificate or the assignment of the Lease SUBI Certificate,
the applicable Vehicle SUBI Assets and Lease SUBI Assets will be distributed to
the purchaser thereof and will no longer constitute Origination Trust Assets,
and the Specified Vehicles may be retitled as directed by that purchaser.
The right of the Transferor or the Certificateholders to take any action
affecting the Trust Estate will be subject to the rights of the Indenture
Trustee under the Indenture.
Resignation and Removal of the Owner Trustee
The Owner Trustee may resign at any time upon written notice to the
Administrator, the Administrative Agent, the Transferor, the Indenture Trustee
and the Certificateholders, whereupon the Transferor will be
69
<PAGE> 71
obligated to appoint a successor Owner Trustee. The Transferor or
Certificateholders holding at least a majority of the aggregate principal
balance of the Certificates may remove the Owner Trustee if the Owner Trustee
becomes insolvent, ceases to be eligible or becomes legally unable to act. Upon
removal of the Owner Trustee, the Transferor will appoint a successor Owner
Trustee. The Transferor will be required to deliver written notice to each
Rating Agency of any resignation or removal of the Owner Trustee.
The Owner Trustee and any successor thereto must at all times:
- be able to exercise corporate trust powers;
- be subject to supervision or examination by federal or state authorities;
- have a combined capital and surplus of at least $50 million; and
- have a long-term debt rating of "A" or better by each Rating Agency or be
otherwise acceptable to each Rating Agency.
Each Rating Agency must also confirm that the appointment of the successor Owner
Trustee would not cause the then-current ratings of the Senior Notes or the
Certificates to be qualified, reduced or withdrawn. Any co-trustee or separate
trustee appointed for the purpose of meeting applicable state requirements will
not be required to meet these eligibility requirements.
Termination
The Trust Agreement will terminate upon (a) the final distribution of all
funds or other property or proceeds of the Trust Estate in accordance with the
terms of the Indenture and the final distribution on the Subordinated Notes and
the Certificates pursuant to the Trust Agreement, (b) the occurrence of certain
events of bankruptcy, insolvency, receivership or liquidation with respect to
the Transferor or (c) an Optional Purchase by the Transferor. Upon termination
of the Trust Agreement pursuant to clause (b) above, the Owner Trustee will
direct the Indenture Trustee to sell the Trust Estate, other than amounts on
deposit in the Distribution Accounts, in a commercially reasonable manner and on
commercially reasonable terms. The Indenture Trustee will apply the proceeds of
that sale to pay amounts owed to the Indenture Trustee and interest on and
principal of the Securities in accordance with the terms of the Indenture. See
"-- The Indenture -- Remedies".
Liabilities and Indemnification
The Transferor, as holder of the Transferor Certificate and the
Subordinated Notes, will be directly liable for any claims against the
Trust -- other than payment of principal of and interest on the Securities -- as
if the Trust were a partnership and the Transferor were a general partner
thereof. The Transferor, in that capacity, will indemnify the Owner Trustee for
any expenses incurred by the Owner Trustee in the performance of its duties
under the Trust Agreement. The Transferor will not be entitled to make any claim
upon the Trust Estate for the payment of any such liabilities or indemnified
expenses. The Transferor will not indemnify the Owner Trustee for expenses
resulting from the willful misconduct, bad faith or negligence of the Owner
Trustee, or for the inaccuracy of any representation or warranty of the Owner
Trustee in the Trust Agreement. The Owner Trustee will not be liable for:
- any error in judgment of an officer of the Owner Trustee,
- any action taken or omitted to be taken in accordance with the
instructions of any Certificateholder, the Indenture Trustee, the
Transferor or the Administrative Agent,
- the interest on or principal of the Securities, or
- the default or misconduct of the Administrator, the Administrative Agent,
the Transferor or the Indenture Trustee.
70
<PAGE> 72
The Subordinated Notes
The Subordinated Notes will be issued to the Transferor pursuant to the
Trust Agreement, pledged by the Transferor to the Trust and held by the
Indenture Trustee during the term of the Indenture as part of the Trust Estate
pledged to the Indenture Trustee. The Subordinated Notes will be subordinated in
right of payment to the Senior Notes to the extent described herein. See
"Additional Information Regarding the Securities -- Payments on the Securities"
and "Security for the Securities -- The Subordinated Notes". If a default occurs
with respect to the Trust's obligations under the Subordinated Notes while the
Senior Notes are outstanding, the Subordinated Noteholder will not be permitted
to declare the principal balance of the Subordinated Notes to be immediately due
and payable.
The SUBI Trust Agreement
The SUBIs, Other SUBIs and the UTI
The UTI Beneficiaries are the initial beneficiaries of the Origination
Trust. The UTI Beneficiaries may from time to time assign, transfer, grant and
convey, or cause to be assigned, transferred, granted and conveyed, to the
Origination Trustee, in trust, Origination Trust Assets. The UTI Beneficiaries
will hold the UTI, which represents a beneficial interest in all Origination
Trust Assets except for (a) any Origination Trust Assets allocated to Other
SUBIs ("Other SUBI Assets") and (b) the SUBI Assets (those Origination Trust
Assets to be referred to as the "UTI Assets"). The UTI Beneficiaries may in the
future pledge the UTI as security for obligations to third-party lenders and may
in the future create and sell or pledge Other SUBIs in connection with
financings similar to the transaction described in this prospectus. Each holder
or pledgee of the UTI will be required to expressly waive any claim to the
Origination Trust Assets other than the UTI Assets and to fully subordinate any
such claims to those other Origination Trust Assets in the event that the waiver
is not given full effect. Each holder or pledgee of any Other SUBI will be
required to expressly waive any claim to the Origination Trust Assets, except
for the related Other SUBI Assets, and to fully subordinate those claims to the
Origination Trust Assets or any other SUBI in the event that waiver is not given
effect. Except under the limited circumstances described under "Additional Legal
Aspects of the Origination Trust and the SUBIs -- The SUBIs" and "-- The SUBIs,
Other SUBIs and the UTI", the SUBI Assets will not be available to make payments
in respect of, or pay expenses relating to, the UTI or any Other SUBI. Any Other
SUBI Assets evidenced by any Other SUBIs will not be available to make payments
in respect of, or pay expenses relating to, the SUBIs, the UTI or any Other
SUBI.
Each Other SUBI will be created pursuant to a supplement to the Origination
Trust Agreement (each, an "Other SUBI Supplement"), which will amend the
Origination Trust Agreement only with respect to the Other SUBI or Other SUBIs
to which it relates. The SUBI Supplement will amend the Origination Trust
Agreement only as it relates to the SUBIs and no Other SUBI Supplement will
amend the Origination Trust Agreement as it relates to the SUBIs.
All Origination Trust Assets, including the SUBI Assets, will be owned by
the Origination Trustee on behalf of the beneficiaries of the Origination Trust.
The SUBI Assets will be segregated from the rest of the Origination Trust Assets
on the books and records of the Origination Trustee and the Administrative
Agent, and the holders of other beneficial interests in the Origination Trust --
including the UTI and any Other SUBIs -- will have no rights in or to the SUBI
Assets. Liabilities of the Origination Trust will be respectively allocated to
the SUBI Assets, the UTI Assets and Other SUBI Assets if incurred in each case
with respect thereto, or will be allocated pro rata among all Origination Trust
Assets if incurred with respect to the Origination Trust Assets generally.
Special Obligations of the UTI Beneficiaries
The UTI Beneficiaries will be jointly and severally liable for all debts
and obligations arising with respect to the Origination Trust Assets or the
operation of the Origination Trust, except that their liability with respect to
any pledge of the UTI and any assignee or pledgee of a SUBI or a SUBI
Certificate or any Other SUBI or Other SUBI Certificate shall be as set forth in
the financing documents relating thereto. To the extent the UTI Beneficiaries
pay or suffer any liability or expense with respect to the Origination Trust
Assets
71
<PAGE> 73
or the operation of the Origination Trust, the UTI Beneficiaries will be
indemnified, defended and held harmless out of the assets of the Origination
Trust against any such liability or expense, including reasonable attorneys'
fees and expenses.
Origination Trustee Duties and Powers; Fees and Expenses
Under the SUBI Trust Agreement, the Origination Trustee will be required to
(a) apply for and maintain, or cause to be applied for and maintained, all
licenses, permits and authorizations necessary or appropriate to accept
assignments of the Specified Leases and the Specified Vehicles and to carry out
its duties as Origination Trustee and (b) when required by applicable state law
or administrative practice, file, or cause to be filed, applications for
certificates of title as are necessary or appropriate so as to cause the
Origination Trust or the Origination Trustee on behalf of the Origination Trust
to be recorded as the owner or holder of legal title of record to the Specified
Vehicles. In carrying out these duties, the Origination Trustee will be required
to exercise the same degree of care and skill as a prudent person would exercise
or use under the circumstances in the conduct of that person's own affairs.
The Origination Trustee may be replaced by the UTI Beneficiaries, acting
together, if it ceases to be qualified in accordance with the terms of the SUBI
Trust Agreement, or if certain representations and warranties made by the
Origination Trustee therein prove to have been materially incorrect when made or
in the event of certain events of bankruptcy or insolvency of the Origination
Trustee.
The Origination Trustee will make no representations as to the validity or
sufficiency of the SUBIs, the SUBI Certificates, or the Retained SUBI
Certificates -- other than the execution and authentication of the SUBI
Certificates and the Retained SUBI Certificates -- or of any Specified Lease,
Specified Vehicle or related document, will not be responsible for performing
any of the duties of the UTI Beneficiaries or the Administrative Agent and will
not be accountable for the use or application by any owners of beneficial
interests in the Origination Trust Assets of any funds paid in respect of the
Origination Trust Assets or the investment of any of such monies before such
monies are deposited into the accounts relating to the SUBIs, any Other SUBI and
the UTI. The Origination Trustee will not independently verify the Specified
Leases or the Specified Vehicles. The duties of the Origination Trustee will
generally be limited to the acceptance of assignments of Leases, the titling of
Vehicles in the name of the Origination Trust or the Origination Trustee on
behalf of the Origination Trust, the creation of the SUBIs, Other SUBIs and the
UTI, the creation of the SUBI Collection Account and the Residual Value Surplus
Account and the receipt of the various certificates, reports or other
instruments required to be furnished to the Origination Trustee under the SUBI
Trust Agreement, in which case the Origination Trustee will only be required to
examine them to determine whether they conform to the requirements of the SUBI
Trust Agreement.
The Origination Trustee will be under no obligation to exercise any of the
rights or powers vested in it by the SUBI Trust Agreement, to make any
investigation of any matters arising thereunder or to institute, conduct or
defend any litigation thereunder or in relation thereto at the request, order or
direction of the UTI Beneficiaries, the Administrative Agent or the holders of a
majority in interest in the SUBIs, unless such party or parties have offered to
the Origination Trustee reasonable security or indemnity against any costs,
expenses or liabilities that may be incurred therein or thereby. The reasonable
expenses of every such exercise of rights or powers or examination will be paid
by the party or parties requesting such exercise or examination or, if paid by
the Origination Trustee, will be a reimbursable expense of the Origination
Trustee.
The Origination Trustee may enter into one or more agreements with such
person or persons, including without limitation any affiliate of the Origination
Trustee, as are by experience and expertise qualified to act in a trustee
capacity and otherwise acceptable to the UTI Beneficiaries. The Origination
Trustee has engaged U.S. Bank as Trust Agent. Under the SUBI Trust Agreement,
the Trust Agent shall perform each and every obligation of the Origination
Trustee under the SUBI Trust Agreement.
Indemnity of Trustee and Trust Agents
The Origination Trustee and each Trust Agent will be indemnified and held
harmless out of and to the extent of the Origination Trust Assets with respect
to any loss, liability, claim, damage or reasonable expense,
72
<PAGE> 74
including reasonable fees and expenses of counsel and reasonable expenses of
litigation (collectively, a "Loss"), arising out of or incurred in connection
with (a) any of the Origination Trust Assets, including without limitation any
Loss relating to Leases or Vehicles, any personal injury or property damage
claims arising with respect to any such Vehicle or any Loss relating to any tax
arising with respect to any Origination Trust Asset, or (b) the Origination
Trustee's or the Trust Agent's acceptance or performance of the trusts and
duties contained in the SUBI Trust Agreement. Notwithstanding the foregoing,
neither the Origination Trustee nor any Trust Agent will be indemnified or held
harmless out of the Origination Trust Assets as to such a Loss:
- for which Ryder shall be liable under the Administration Agreement,
- incurred by reason of the Origination Trustee's or that Trust Agent's
willful misfeasance, bad faith or negligence, or
- incurred by reason of the Origination Trustee's or that Trust Agent's
breach of its respective representations and warranties made in the SUBI
Trust Agreement or the Administration Agreement.
Termination
The Origination Trust will dissolve and the obligations and
responsibilities of the UTI Beneficiaries and the Origination Trustee will
terminate upon the later to occur of the full payment of all amounts owed under
the Origination Trust Agreement, the Trust Agreement and the Indenture or under
any financing in connection with an Other SUBI.
Trust as Third-Party Beneficiary
As the holder of the Vehicle SUBI Certificate and the SUBI Interest
evidenced thereby and a pledgee of the Lease SUBI Certificate and the SUBI
Interest evidenced thereby, the Trust will be a third-party beneficiary of the
SUBI Trust Agreement. Therefore, the Trust may, and, upon the direction of
holders of Senior Notes and Certificates holding at least 51% of the aggregate
unpaid principal balance of the Senior Notes and Certificates, unless a higher
percentage is required by either the Trust Agreement or the Indenture, voting
together as a single class, will, exercise any right conferred by the SUBI Trust
Agreement upon a holder of any interest in the SUBIs. However, during the term
of the Indenture, the Trust will pledge the Lease SUBI Certificate to the
Indenture Trustee and any action with respect to the SUBIs must be approved by
the Senior Noteholders in such percentage as required by the Indenture. See
"-- Miscellaneous Provisions -- Amendment Provisions".
The Administration Agreement
General
Under the Administration Agreement, the Administrative Agent will perform
on behalf of the Origination Trust all of the obligations of the lessor under
the Specified Leases, including, but not limited to, collecting and processing
payments, responding to inquiries of Obligors, investigating delinquencies,
sending payment statements, paying costs of the sale or other disposition of
Expired Vehicles or Default Vehicles, overseeing the Specified Leases,
commencing legal proceedings to enforce Specified Leases and servicing the
Specified Leases, including accounting for collections, furnishing monthly and
annual statements to the Origination Trustee with respect to distributions and
generating federal income tax information. In this regard, the Administrative
Agent will make reasonable efforts to collect all amounts due on or in respect
of the Specified Leases and, in a manner consistent with the Administration
Agreement, will be obligated to service the Specified Leases generally in
accordance with the customary and usual procedures of institutions that service
truck, tractor and trailer leases and, to the extent more exacting, the
procedures used by the Administrative Agent in respect of truck, tractor and
trailer leases serviced by it for its own account. Payments made in respect of
the Maintenance Component will be retained by or remitted to the Maintenance
Provider as compensation for providing maintenance and other specified services
to the Specified Vehicles, and will not be available to make Program Operating
Lease Payments or to make payments on the Senior Notes, the
73
<PAGE> 75
Subordinated Notes or the Certificates. See "Ryder -- Lease
Payments -- Calculation of the Financial Component". The Trust will be a
third-party beneficiary of the Administration Agreement.
The Administration Agreement will require the Administrative Agent to
obtain all licenses and make all filings required to be held or filed by the
Origination Trust in connection with the ownership of the Specified Leases and
the Specified Vehicles and take all necessary steps to maintain evidence of the
Origination Trust's ownership on the certificates of title to the Specified
Vehicles.
The Administrative Agent will be responsible for filing all periodic sales
and use tax or property, real or personal, tax reports, periodic renewals of
licenses and permits, periodic renewals of qualifications to act as a business
trust and other periodic regulatory filings, registrations or approvals arising
with respect to or required of the Origination Trustee or the Origination Trust.
Custody of Lease Documents and Certificates of Title
To reduce administrative costs and ensure uniform quality in the servicing
of the Specified Leases and Ryder's own portfolio of leases, the Origination
Trustee will appoint the Administrative Agent as its agent, bailee and custodian
of the Specified Leases, the certificates of title relating to the Specified
Vehicles, the insurance policies and insurance records and other documents
related to the Specified Leases and the related Obligors and Specified Vehicles.
Such documents will not be physically segregated from other leases, certificates
of title, insurance policies and insurance records or other documents related to
other leases and vehicles owned or serviced by the Administrative Agent,
including Leases and Vehicles which are not part of the SUBI Assets. The
accounting records and computer systems of Ryder will reflect the allocation of
the Specified Leases and Specified Vehicles to the SUBIs, and the interest of
the holders of the SUBI Certificates therein. UCC financing statements
reflecting certain interests in the Specified Leases will be filed as described
under "Additional Legal Aspects of the Specified Leases and Specified
Vehicles -- Back-up Security Interests".
Collections
General. Under the Administration Agreement, except as otherwise permitted
under the Monthly Remittance Condition and described under "--Monthly Remittance
Condition", the Administrative Agent will deposit Collections received into the
SUBI Collection Account within two Business Days of processing. "Collections"
with respect to any Collection Period will include all net collections collected
or received in respect of the SUBI Assets during the three Monthly Periods
comprising that Collection Period that are allocable to the Program Operating
Lease or the Securities, including:
- Financial Component payments and Partial Financial Component Payments
made by Obligors, net of Daily Advance Reimbursements;
- Reallocation Payments made by the Administrative Agent;
- Sales Proceeds other than Residual Value Surplus, Termination Proceeds,
Casualty Proceeds and Insurance Proceeds;
- Termination Value Payments; and
- payments by the Administrative Agent of the Securitization Value of
certain Specified Leases before the Maturity Dates of such Specified
Leases and certain Expired Vehicles, as described in this prospectus
under "-- Purchase of Specified Vehicles Before their Maturity Dates" and
"-- Purchase of Expired Vehicles".
Monthly Remittance Condition. The Administration Agreement will require
the Administrative Agent to make all deposits of Collections received on or in
respect of the Specified Leases and the Specified Vehicles to be deposited into
the SUBI Collection Account on the second Business Day following processing
thereof. However, so long as the Monthly Remittance Condition is satisfied, the
Administrative Agent may retain such amounts received during a Monthly Period
until the second day following that Monthly Period. The "Monthly Remittance
Condition" will be satisfied if (a)(1) Ryder is the Administrative Agent, (2)
74
<PAGE> 76
Ryder's short-term debt is rated in the highest rating category, or is otherwise
acceptable to, each Rating Agency and (3) no Administrative Agent Default has
occurred or (b)(1) the Administrative Agent obtains a letter of credit, surety
bond or insurance policy under which demands for payment may be made to secure
timely remittance of monthly collections to the SUBI Collection Account and (2)
the Trustees are provided with confirmation from each Rating Agency to the
effect that the use of such alternative remittance schedule will not result in
the qualification, reduction or withdrawal of its then-current rating on the
Senior Notes or the Certificates. Pending deposit into the SUBI Collection
Account, Collections may be used by the Administrative Agent at its own risk and
for its own benefit and will not be segregated from its own funds.
Net Deposits. For so long as Ryder is the Administrative Agent, the
Administrative Agent will be permitted to deposit into the SUBI Collection
Account only the net amount distributable to the Trust, as holder of the Vehicle
SUBI Certificate, on the related Deposit Date. The Administrative Agent will,
however, account to the Trust, the Trustees and the Senior Noteholders and
Certificateholders as if all of the deposits and distributions described herein
were made individually. This provision has been established for the
administrative convenience of the parties involved and will not affect amounts
required to be deposited into the Accounts for the benefit of the
Securityholders.
Payment of the Maintenance Component to the Maintenance Provider. During
each Collection Period, the Maintenance Component payment, to the extent
available, will be allocated and retained by or paid to the Maintenance
Provider. Payments on the Specified Leases will be allocated pro rata using the
Financial Component and the Maintenance Component thereof.
Financial Component Payments. If an Obligor makes a monthly payment equal
to the Total Monthly Payment billed with respect to all Vehicles leased by that
Obligor for the related Monthly Period, which may include one or more Specified
Vehicles as well as one or more Vehicles allocated to the UTI or one or more
Other SUBIs (collectively, "Obligor Vehicles"), the Administrative Agent will
deposit into the SUBI Collection Account the entire Financial Component relating
to the Specified Vehicles leased by that Obligor. If an Obligor makes a monthly
payment of less than the Total Monthly Payment billed in respect of a Specified
Vehicle or in respect of all Obligor Vehicles for that Monthly Period, the
Administrative Agent will deposit into the SUBI Collection Account a pro rata
share of the total amount paid (the "Partial Financial Component Payment")
determined by multiplying the total amount paid by a percentage equal to the
Financial Component due divided by the Total Monthly Payment due.
Sales Proceeds and Termination Proceeds
Under the Administration Agreement, the Administrative Agent, on behalf of
the Trust, will sell or otherwise dispose of Specified Vehicles:
- related to Specified Leases that have reached their respective Maturity
Dates, or as to which the Annual Termination Option was exercised but an
amount equal to the related Termination Value Payment was not paid (each,
an "Expired Vehicle"),
- related to Default Termination Leases (each, a "Defaulted Vehicle"), and
- under the circumstances described under "-- Purchase of Specified
Vehicles Before their Maturity Dates".
In connection with the sale or other disposition of an Expired Vehicle or a
Defaulted Vehicle, within two Business Days of processing, the Administrative
Agent will deposit into the SUBI Collection Account all Sales Proceeds from
Specified Vehicles received during the related Collection Period. On each
Deposit Date, the Administrative Agent will cause the Origination Trustee,
acting through the Trust Agent, to transfer any Residual Value Surplus to the
Residual Value Surplus Account. Any payment received from the related Obligor in
respect of the Termination Value of the related Specified Vehicle will be
deposited into the SUBI Collection Account.
"Disposition Expenses" will mean expenses and other amounts reasonably
incurred by the Administrative Agent in connection with the sale or other
disposition of an Expired Vehicle or a Defaulted Vehicle, including
75
<PAGE> 77
but not limited to sales commissions, and expenses incurred in connection with
making claims under any Contingent and Excess Liability Insurance or other
applicable insurance policies. Disposition Expenses will be reimbursable to the
Administrative Agent:
- as a deduction from Sales Proceeds, Termination Proceeds and Casualty
Proceeds, and
- in the case of Disposition Expenses relating to the sale of Vehicles,
from amounts on deposit in the Residual Value Surplus Account.
"Residual Value Losses" in respect of a Collection Period will mean the
amount by which the Sales Proceeds from the sale of Specified Vehicles,
excluding any Insurance Proceeds, during that Collection Period are less than
the aggregate Securitization Values of the related Specified Leases.
"Residual Value Surplus" will mean the amount, if any, by which the Sales
Proceeds of any Expired Vehicle, excluding any amounts paid by an Obligor or any
Casualty Proceeds, exceed the Securitization Value of the related Specified
Lease as of the effective date of termination of that Specified Lease.
"Sales Proceeds" with respect to any Expired Vehicle or Defaulted Vehicle
will mean all proceeds received from the sale or other disposition of that
Vehicle, including any applicable Insurance Proceeds, less all applicable
Disposition Expenses and, in the case of an Expired Vehicle, any outstanding
Sales Proceeds Advances.
"Termination Proceeds" with respect to any Defaulted Vehicle will mean an
amount equal to the sum of (1) any payment received from the related Obligor in
respect of the Termination Value of Vehicle and (2) the Sales Proceeds.
Purchase of Specified Vehicles Before their Maturity Dates
The Administrative Agent will be required to purchase or cause to be
purchased a Specified Vehicle before the Maturity Date of the related Specified
Lease and remit to the SUBI Collection Account an amount equal to the
Securitization Value of that Specified Lease as of the effective date of
termination if:
- that Specified Lease becomes a Casualty Termination Lease and, pursuant
to that Specified Lease, the Administrative Agent is responsible for
paying for the loss or theft of or damage to that Specified Vehicle;
- the Administrative Agent (1) agrees with the Obligor to a change in the
lease rates applicable to that Specified Vehicle and that change results
in a change in the Residual Value and/or the Lease Term or (2) invoices
the Obligor for a material mileage surcharge under that Specified Lease
for that Specified Vehicle;
- at the request of the Obligor, the Administrative Agent permits that
Obligor to (1) terminate that Specified Lease other than through the
exercise of the Annual Termination Option or (2) reduce or delay payments
due in respect of the Financial Component of that Specified Lease;
- that Obligor exercises the Annual Termination Option or that Specified
Lease becomes a Default Termination Lease and the Administrative Agent
(1) releases the Obligor from its obligation to purchase that Specified
Vehicle for its Termination Value or (2) neither demands that the Obligor
so purchase that Specified Vehicle nor offers a termination or default
settlement to the Obligor for that Specified Vehicle; or
- that Obligor exercises the Annual Termination Option or that Specified
Lease becomes a Default Termination Lease and that Specified Lease has
been amended to eliminate the Obligor's obligation to thereupon purchase
that Specified Vehicle for its Termination Value.
The Administrative Agent will be required to purchase a Specified Vehicle
before the Maturity Date of the related Specified Lease and remit to the SUBI
Collection Account an amount equal to the Securitization Value of that Specified
Lease as of the effective date of termination if the related Obligor desires to
change the domicile of or title to a Vehicle subject to a Lease and that change
would result in (a) the Origination
76
<PAGE> 78
Trust doing business in a jurisdiction in which it is not then qualified and
licensed or (b) significant transfer expenses not paid by the Obligor, including
without limitation the imposition of any transfer tax. In addition, the
Administrative Agent may, but will not be required to, purchase or cause to be
purchased a Specified Vehicle before the Maturity Date of the related Specified
Lease and remit to the SUBI Collection Account an amount equal to the
Securitization Value of that Specified Lease as of the effective date of
termination if (a) the Administrative Agent exercises the Annual Termination
Option, including, without limitation, if the related Obligor rejects an
increase in the Maintenance Component when the current Maintenance Component
provides the Maintenance Provider with below average service margins or (b) the
Administrative Agent elects to purchase that Specified Vehicle for any other
administrative or commercial reason (each, a "Special Event Purchase").
Notwithstanding the foregoing, Special Event Purchases may only be made with
respect to Specified Vehicles having an aggregate initial Securitization Value
of no more than 10% of the Initial Securities Balance in the aggregate over the
term of the Securities, and with respect to no more than 5% of the Initial
Securities Balance in any calendar year.
"Insurance Proceeds" will include recoveries under any insurance policy or
rights thereunder or proceeds therefrom, including any self-insurance and also
including the Contingent and Excess Liability Insurance, and any vehicle
liability insurance policy required to be obtained and maintained by the
Administrative Agent or the related Obligors pursuant to the Specified Leases,
and amounts paid by any insurer under any other insurance policy relating to the
Specified Leases or the related Obligors or Specified Vehicles.
Purchase of Expired Vehicles
The Administrative Agent may purchase an Expired Vehicle at any time. With
respect to the related Specified Lease, in the event that
- no Sales Proceeds Advance has been made, the purchase price will equal
the Securitization Value of that Specified Lease as of the date of
expiration, and
- a Sales Proceeds Advance has been made,
no additional amounts need be remitted by the Administrative Agent; however, the
Administrative Agent will relinquish all rights to reimbursement of that Sales
Proceeds Advance.
Casualty Proceeds
If an Obligor is responsible for paying for damage to a Specified Vehicle
relating to a Casualty Termination Lease, the Administrative Agent will remit to
the SUBI Collection Account, within two Business Days of processing, an amount
equal to the sum of
- all Insurance Proceeds received in respect of damage to that Specified
Vehicle (the "Insurance Casualty Proceeds"), and
- any proceeds received from the sale of that Specified Vehicle at salvage,
net of any applicable Disposition Expenses (the "Salvage Casualty
Proceeds", and together with the Insurance Casualty Proceeds, the
"Casualty Proceeds").
All Casualty Proceeds will be deposited in the SUBI Collection Account.
In the event that a Specified Lease becomes a Casualty Termination Lease
and that Specified Lease requires the Administrative Agent to be responsible for
all loss or theft of or damage to the related Specified Vehicle, the
Administrative Agent will remit to the SUBI Collection Account an amount equal
to the Securitization Value of that Casualty Termination Lease as of the
effective date of casualty.
Extensions
The Administration Agreement will provide that no extensions of a Specified
Lease may be granted, except that for operational and administrative purposes,
the Administrative Agent may, on behalf of the Trust, delay or accelerate the
Maturity Date of a Specified Lease by as much as 45 days.
77
<PAGE> 79
Notification of Liens and Claims
The Administrative Agent will be required to notify as soon as practicable
the Transferor -- in the event that Ryder is not acting as the Administrative
Agent, the Indenture Trustee and the Origination Trustee of all liens or claims
of any kind of a third party that would materially and adversely affect the
interests of, among others, the Transferor or the Origination Trust in any
Specified Lease or Specified Vehicle. When the Administrative Agent becomes
aware of any such lien or claim with respect to any Specified Lease or Specified
Vehicle, it will take whatever action it deems reasonably necessary to cause
that lien or claim to be removed.
Advances
On each Deposit Date, the Administrative Agent will be obligated to make,
by deposit into the SUBI Collection Account, a Financial Component Advance in
respect of the unpaid Financial Component of certain Specified Vehicles, and a
Sales Proceeds Advance in respect of the Securitization Value of Specified
Leases relating to certain Expired Vehicles. An "Advance" refers to either a
Financial Component Advance or a Sales Proceeds Advance. The Administrative
Agent will be required to make an Advance only to the extent that it determines
that such Advance will be recoverable from future payments or collections on the
related Specified Lease or Specified Vehicle or otherwise. In making Advances,
the Administrative Agent will assist in maintaining a regular flow of scheduled
payments on the Specified Leases and, accordingly, in respect of the Program
Operating Lease and the Senior Notes, rather than guarantee or insure against
losses. Accordingly, all Advances will be reimbursable to the Administrative
Agent, without interest, as described in this prospectus.
Financial Component Advances. If an Obligor makes a monthly payment that
is less than the Total Monthly Payment billed with respect to all Obligor
Vehicles for the related Monthly Period, but the payment made is greater than or
equal to the Fixed Charge for all Obligor Vehicles, the Administrative Agent
will advance the entire difference between (a) the amount of the Financial
Component due and (b) the Partial Financial Component Payment (each, a "Full
Financial Component Advance").
If an Obligor makes a monthly payment that is less than the Total Monthly
Payment billed with respect to all Obligor Vehicles for the related Monthly
Period, and the payment made is less than the Fixed Charge for all Obligor
Vehicles, the Administrative Agent will advance an amount equal to (a)(1) the
actual Obligor payment, multiplied by (2) a percentage equal to (A) the actual
Obligor payment divided by (B) the Fixed Charge for all Obligor Vehicles, less
(b) the Partial Financial Component Payment (each, a "Partial Financial
Component Advance"). Notwithstanding the foregoing, the total amount paid shall
not exceed the total amount of the Financial Component due for the related
Monthly Period.
The Administrative Agent will be entitled to reimbursement of all Partial
Financial Component Advances and all Full Financial Component Advances
(collectively, "Financial Component Advances"). The Administrative Agent will
offset, on an ongoing basis, from amounts collected or received in respect of
the SUBI Assets, an amount to repay Financial Component Advances where a
Financial Component Advance amount has been recovered in a subsequent payment
made by the related Obligor of the Total Monthly Payment due, or the Financial
Component Advance has been outstanding for at least 180 days after the due date
of the invoice in respect of which such Financial Component Advance was made
(collectively, "Daily Advance Reimbursements").
Sales Proceeds Advances. If, during a Collection Period, the
Administrative Agent has not sold a Specified Vehicle that became an Expired
Vehicle during that Collection Period, on the related Deposit Date the
Administrative Agent will advance the Securitization Value of the related
Specified Lease to the Trust (each, a "Sales Proceeds Advance").
After the Administrative Agent makes a Sales Proceeds Advance for an
Expired Vehicle, the Trust will have no claim against or interest in that
Expired Vehicle or any Sales Proceeds resulting from its sale or other
disposition except with respect to Residual Value Surplus. If the Administrative
Agent sells an Expired Vehicle after making a Sales Proceeds Advance, the Trust
will retain the Sales Proceeds Advance and the
78
<PAGE> 80
Administrative Agent will retain the Sales Proceeds up to the Securitization
Value of the related Specified Lease, and will deposit the Residual Value
Surplus into the SUBI Collection Account, which will be transferred on the
related Deposit Date to the Residual Value Surplus Account.
If the Administrative Agent has not sold an Expired Vehicle within 270 days
after it has made a Sales Proceeds Advance, it will be reimbursed for that Sales
Proceeds Advance from the SUBI Collection Account. Within six months of
receiving that reimbursement, if the related Specified Vehicle has not been
sold, the Administrative Agent shall cause that Specified Vehicle to be sold at
auction and shall remit the proceeds associated with the disposition of that
Specified Vehicle to the SUBI Collection Account.
Insurance on the Specified Vehicles
Each Specified Lease will indicate whether Ryder or the related Obligor
will be required to maintain in full force and effect during the related Lease
Term a comprehensive collision and physical damage insurance policy covering the
actual cash value of the related Specified Vehicle and naming the Origination
Trustee, on behalf of the Origination Trust, as loss payee. Additionally, either
Ryder or the related Obligor will be required to maintain vehicle liability
insurance in amounts equal to the greater of the amount prescribed by applicable
state law or industry standards as set forth in the related Specified Lease,
naming the Origination Trust or the Origination Trustee, on behalf of the
Origination Trust, as an additional insured. Because Obligors may choose their
own insurers to provide the required coverage, the actual terms and conditions
of their policies may vary. If an Obligor fails to obtain or maintain the
required insurance, the related Specified Lease will be in default and the
Administrative Agent may either obtain insurance on behalf of, and at the
expense of, the Lessee or deem the related Lease in default. In that event, it
is the practice of the Administrative Agent to repossess the related Specified
Vehicle.
Ryder does not require Obligors to carry credit disability, credit life or
credit health insurance or other similar insurance coverage that provides for
payments to be made on the Specified Leases on behalf of the Obligors in the
event of disability or death. To the extent that this type of insurance coverage
is obtained on behalf of an Obligor, payments received in respect of the
coverage may be applied to payments on the related Specified Lease to the extent
that the Obligor's beneficiary chooses to do so.
Realization Upon Charged-Off Specified Leases
The Administrative Agent will use commercially reasonable efforts to
repossess and liquidate Defaulted Vehicles. Such liquidation may be effected
through repossession of that Defaulted Vehicles and their disposition through
sale, or the Administrative Agent may take any other action permitted by
applicable law. The Administrative Agent may enforce all rights of the lessor
under the related Default Termination Lease, sell that Defaulted Vehicle in
accordance with such Default Termination Lease and commence and pursue any
proceedings in connection with such Default Termination Lease. In connection
with any such repossession, the Administrative Agent will follow such practices
and procedures as it deems necessary or advisable and as are normal and usual in
the servicing of full-service operating truck, tractor and trailer leases, and
in each case in compliance with applicable law, and to the extent more exacting,
the practices and procedure used by the Administrative Agent in respect of any
leases serviced by it for its own account. The Administrative Agent will be
responsible for all costs and expenses incurred in connection with the sale or
other disposition of Defaulted Vehicles, but will be entitled to reimbursement
to the extent such costs constitute Disposition Expenses or are expenses
recoverable under an applicable insurance policy. Proceeds from the sale or
other disposition of repossessed Specified Vehicles will constitute Termination
Proceeds and will be deposited into the SUBI Collection Account. To the extent
not otherwise covered by Sales Proceeds or Termination Proceeds, the
Administrative Agent will be entitled to reimbursement of all Disposition
Expenses from amounts on deposit in the Residual Value Surplus Account upon
presentation to the Indenture Trustee of an officer's certificate of the
Administrative Agent. Collections in respect of a Collection Period will include
all Sales Proceeds and Termination Proceeds collected during that Collection
Period.
79
<PAGE> 81
Administrative Agent Records, Determinations and Reports
The Administrative Agent will retain or cause to be retained all
data -- including, without limitation, computerized records, operating software
and related documentation -- relating directly to or maintained in connection
with the servicing of the Specified Leases. Upon the occurrence and continuance
of an Administrative Agent Default and termination of the Administrative Agent's
obligations under the Administration Agreement, the Administrative Agent will
use commercially reasonable efforts to effect the orderly and efficient transfer
of the servicing of the Specified Leases to a successor servicer.
The Administrative Agent will perform some monitoring and reporting
functions on behalf of the Transferor, the Trust, the Trustees and the Senior
Noteholders, including the preparation and delivery to the Indenture Trustee,
the Origination Trustee and each Rating Agency, on or before each Determination
Date, of a quarterly certificate setting forth all information necessary to make
all distributions required in respect of the related Collection Period, and the
preparation and delivery of quarterly statements setting forth the information
described under "Additional Information Regarding the Securities -- Statements
to Senior Noteholders", and an annual officer's certificate specifying the
occurrence and status of any Administrative Agent Default.
Evidence as to Compliance
Under the Administration Agreement, on or before April 30 of each year,
beginning April 30, 2000, a firm of nationally recognized independent
accountants will furnish the Trust with a statement as to compliance by the
Administrative Agent during the preceding 12 months ended December 31 -- or
since the Closing Date in the case of the first such statement.
The Administration Agreement will also provide for the delivery to the
Trust, on or before April 30 of each year, beginning April 30, 2000, of a
certificate, signed by an officer of the Administrative Agent, stating
that there has been no Administrative Agent Default during the preceding 12
months ended
December 31 -- or since the Closing Date in the case of the first such
certificate -- or, if there has been any Administrative Agent Default,
describing each such default.
Copies of such statements and certificates may be obtained by Senior
Noteholders or Senior Note Owners by a request in writing addressed to the
Indenture Trustee or the Owner Trustee, as the case may be, at the related
Corporate Trust Office.
Servicing Compensation
The Administrative Agent will be entitled to compensation for the
performance of its servicing and administrative obligations with respect to the
SUBI Assets under the Administration Agreement. The Administrative Agent will be
entitled to receive a fee in respect of the SUBI Assets allocable to the SUBI
Interest and the Retained SUBI Interest equal to, for each month in the related
Collection Period (each, a "Monthly Period"), one-twelfth of the product of (a)
1.00% and (b) the aggregate Securitization Value of all Specified Leases as of
the first day of that Monthly Period (the "Administration Fee"). The
Administration Fee will be payable on each Payment Date in respect of the three
Monthly Periods comprising the related Collection Period and will be calculated
and paid based upon a 360-day year consisting of twelve 30-day months.
The Administrative Agent will also be entitled to additional compensation
in the form of expense reimbursement, administrative fees or similar charges
paid with respect to the Specified Leases including any late payment fees now or
later in effect. The Administrative Agent will pay all expenses incurred by it
in connection with its servicing and administration activities under the
Administration Agreement and will not be entitled to reimbursement of such
expenses, except to the extent such expenses constitute Disposition Expenses.
The Administration Fee will compensate the Administrative Agent for
performing the functions of a third party servicer of the Specified Leases as an
agent for the Origination Trust under the Administration Agreement, including
collecting and processing payments, responding to inquiries of Obligors,
investigating
80
<PAGE> 82
delinquencies, sending payment statements, paying costs of the sale or other
disposition of Expired Vehicles and Defaulted Vehicles, overseeing the SUBI
Assets and administering the Specified Leases, including making Advances,
accounting for collections, furnishing monthly and annual statements to the
Origination Trustee with respect to distributions and generating federal income
tax information.
Administrative Agent Resignation and Termination
The Administrative Agent may not resign from its obligations and duties
under the Administration Agreement unless it determines that its duties
thereunder are no longer permissible by reason of a change in applicable law or
regulations. No such resignation will become effective until a successor
administrative agent has assumed the Administrative Agent's obligations under
the Administration Agreement. The Administrative Agent may not assign the
Administration Agreement or any of its rights, powers, duties or obligations
thereunder except as otherwise provided therein or except in connection with a
consolidation, merger, conveyance, transfer or lease made in compliance with the
Administration Agreement.
The rights and obligations of the Administrative Agent under the
Administration Agreement may be terminated following the occurrence and
continuance of an Administrative Agent Default, as described under
"-- Administrative Agent Defaults".
Indemnification by the Administrative Agent
The Administrative Agent will indemnify the Trustees and their respective
agents for any loss, liability, claim, damage or expense that may be incurred by
them as a result of any act or omission by the Administrative Agent in
connection with the performance of its duties under the Administration Agreement
but only to the extent such liability arose out of the Administrative Agent's
negligence, willful misconduct, bad faith or recklessness.
Administrative Agent Defaults
The following are among the events that would constitute "Administrative
Agent Defaults" under the Administration Agreement:
(a) any failure by the Administrative Agent to deliver to (1) the
Origination Trustee for distribution to holders of interests in the UTI,
the SUBIs or any Other SUBI, (2) the Indenture Trustee for distribution to
the Noteholders or (3) the Owner Trustee for distribution to the
Certificateholders, any required payment, which failure continues
unremedied for five Business Days after discovery thereof by an officer of
the Administrative Agent or receipt by the Administrative Agent of notice
thereof from the Indenture Trustee, the Trustee or Senior Noteholders or
Certificateholders evidencing not less than 25% of the aggregate principal
balance of the Securities, voting together as a single class;
(b) any failure by the Administrative Agent to duly observe or perform
in any material respect any other of its covenants or agreements in the
Administration Agreement, which failure materially and adversely affects
the rights of holders of interests in the UTI, the SUBIs or any Other SUBI
or the Senior Noteholders or Certificateholders, and which continues
unremedied for 90 days after written notice thereof is given as described
in clause (a) above;
(c) any failure by the Administrative Agent to deliver to the
Origination Trustee any report required to be delivered to the Origination
Trustee or the Trust pursuant to the Administration Agreement within 30
Business Days after the date that report is due;
(d) any failure to deliver to the Indenture Trustee any report required
to be delivered to the Indenture Trustee or the Trust pursuant to the Basic
Documents, which failure continues for 30 Business Days after discovery of
that failure by an officer of the Administrative Agent or receipt by the
Administrative Agent of written notice thereof from the Indenture Trustee;
(e) any representation, warranty or statement of the Administrative
Agent made in the Administration Agreement, any other Basic Document to
which the Administrative Agent is a party or by
81
<PAGE> 83
which it is bound or any certificate, report or other writing delivered
pursuant to the Administration Agreement shall prove to be incorrect in any
material respect when made, which failure materially and adversely affects
the rights of holders of interests in the UTI, the SUBIs or any Other SUBI
or the Senior Noteholders or the Certificateholders, and which failure
continues unremedied for 30 days after written notice thereof is given as
described in clause (a) above;
(f) any failure by the Administrative Agent to maintain or pay when due
any premium in respect of any Contingent and Excess Liability Insurance
Policy; and
(g) the occurrence of certain events of bankruptcy, insolvency,
receivership or liquidation in respect of the Administrative Agent;
provided, however, that the occurrence of any event set forth in clauses
(a) through (f) with respect to either 1999-A SUBI will be an
Administrative Agent Default only with respect to the SUBIs and will not be
an Administrative Agent Default with respect to the UTI or any Other SUBI.
Notwithstanding the foregoing, a delay in or failure of performance referred to
under clause (b) for a period of 120 days, under clause (c) for a period of 45
Business Days or under clause (e) for a period of 60 days, will not constitute
an Administrative Agent Default if that failure or delay was caused by force
majeure or other similar occurrence. Upon the occurrence of any such event, the
Administrative Agent will not be relieved from using all commercially reasonable
efforts to perform its obligations in a timely manner in accordance with the
terms of the Administration Agreement, and the Administrative Agent will provide
to the Indenture Trustee, the Origination Trustee, the Transferor and the
Securityholders prompt notice of such failure or delay by it, together with a
description of its efforts to so perform its obligations.
Upon the occurrence of any Administrative Agent Default, the sole remedy
available to the holders of the UTI, the SUBIs and any Other SUBIs will be to
remove the Administrative Agent and appoint a successor Administrative Agent.
However, if the commencement of a bankruptcy or similar case or proceeding were
the only default, the Administrative Agent or its trustee-in-bankruptcy might
have the power to prevent that removal. See "-- Removal or Replacement of the
Administrative Agent".
Termination
The Administration Agreement will terminate upon the earlier to occur of
(a) the dissolution of the Origination Trust or (b) the discharge of the
Administrative Agent in accordance with the terms of the Administration
Agreement, which will effect a termination only with respect to the SUBI Assets
and not with respect to any other Origination Trust Assets.
Removal or Replacement of the Administrative Agent
Upon the occurrence of an Administrative Agent Default, the Origination
Trustee may, to the extent such Administrative Agent Default relates (a) to all
Origination Trust Assets, upon the direction of the holders of the SUBIs, the
UTI and any Other SUBI -- excluding Ryder, the UTI Beneficiaries or any other
affiliate of the Administrative Agent -- terminate all of the rights and
obligations of the Administrative Agent under the Administration Agreement with
respect to all Origination Trust Assets or (b) only to the SUBI Assets, upon the
direction of the holder and pledge of the SUBI Certificates, terminate all of
the rights and obligations of the Administrative Agent under the Administration
Agreement with respect to the SUBI Assets. For purposes of the immediately
preceding sentence, the holder and pledgee of the SUBI Certificates will be the
Indenture Trustee acting at the direction of Senior Noteholders holding not less
than 66 2/3% of the aggregate principal balance of the Senior Notes, so long as
any Senior Notes are outstanding. In each case, the Origination Trustee will
effect that termination by delivering notice thereof to the Administrative
Agent, with a copy to each Rating Agency or any other securities based on any
Other SUBIs affected by that Administrative Agent Default.
Upon the termination or resignation of the Administrative Agent, the
Administrative Agent subject to that termination or removal will continue to
perform its functions as Administrative Agent, in the case of (a) termination,
until the earlier of the date specified in the termination notice or, if no such
date is specified
82
<PAGE> 84
therein, the date of the Administrative Agent's receipt of such notice, and (b)
resignation, until the later of (1) 45 days after the delivery to the
Origination Trustee of the written resignation notice or (2) the date upon which
the resigning Administrative Agent becomes unable to act as Administrative
Agent, as specified in the resignation notice and accompanying opinion of
counsel.
In the event of a termination of the Administrative Agent as a result of an
Administrative Agent Default with respect to the SUBI Assets only, the
Origination Trustee, acting at the direction of the holder and pledgee of the
SUBI Certificates -- which holder for this purpose will be the Indenture
Trustee, acting at the direction of Senior Noteholders holding not less than
66 2/3% of the aggregate principal balance of the Senior Notes -- will appoint a
successor Administrative Agent. The Origination Trustee will have the right to
approve that successor Administrative Agent, and that approval may not be
unreasonably withheld. If a successor Administrative Agent is not appointed by
the effective date of the predecessor Administrative Agent's resignation or
termination, then the Origination Trustee will act as successor Administrative
Agent. If the Origination Trustee is legally unable to act as Administrative
Agent, then the Origination Trustee will be required to appoint, or petition a
court of competent jurisdiction to appoint, any established entity the regular
business of which includes the servicing of truck, tractor and trailer leases as
the successor Administrative Agent.
Upon appointment of a successor Administrative Agent, the successor
Administrative Agent will assume all of the rights and obligations of the
Administrative Agent under the Administration Agreement; provided, however, that
no successor Administrative Agent will have any responsibilities with respect to
the purchase of additional Leases or Vehicles by the Origination Trust or with
respect to making Advances. Any compensation payable to a successor
Administrative Agent may not be in excess of that permitted the predecessor
Administrative Agent unless the holders of the UTI, the SUBIs and any Other
SUBIs, as the case may be, bear such excess costs exclusively. If a bankruptcy
trustee or similar official has been appointed for the Administrative Agent,
that trustee or official may have the power to prevent the Indenture Trustee,
the Owner Trustee, the Senior Noteholders or the Certificateholders from
effecting that transfer of servicing. The predecessor Administrative Agent will
have the right to be reimbursed for any outstanding Advances made with respect
to the SUBI Assets to the extent funds are available therefore in respect of the
Advances made.
Miscellaneous Provisions
Amendment Provisions
General. For so long as any Senior Notes are outstanding, the Trust's
rights in the SUBI Certificates will be subject to the lien of the Indenture.
The Indenture Trustee will be the holder of the SUBI Certificates for purposes
of determining whether any proposed amendment to the SUBI Trust Agreement, the
Administration Agreement or the Trust Agreement will materially adversely affect
the interests of the holders of the SUBI Certificates.
Amendment of the SUBI Trust Agreement and the Administration
Agreement. Each of the SUBI Trust Agreement and the Administration Agreement
may be amended without the consent of the holders of the Senior Notes, the
Certificateholders, the SUBI Certificates, the UTI Certificates or any Other
SUBI Certificates, as the case may be, to cure any ambiguity, correct or
supplement any provision therein that may be inconsistent with any other
provision therein, add any other provisions with respect to matters or questions
arising under the related agreement that are not inconsistent with the
provisions of the respective agreements or add or amend any provision that
provides additional rights to any of such holders; provided, that any such
action will not, in the good faith judgment of the parties thereto, materially
and adversely affect the interest of any of such holders, or upon the delivery
of an opinion of counsel to the effect that such amendment will not adversely
and materially affect the interest of any such holder. Each of the SUBI Trust
Agreement and the Administration Agreement may also be amended from time to time
as it relates to either 1999-A SUBI, by the parties thereto, including to change
the manner in which the Residual Value Surplus Account or the Reserve Fund is
funded, including the elimination of the Residual Value Surplus Account or the
Reserve
83
<PAGE> 85
Fund, or to change the remittance schedule for depositing Collections and other
amounts into the SUBI Collection Account,
- upon confirmation from each Rating Agency to the effect that such
amendment would not cause its then-current rating on the Senior Notes or
Certificates to be qualified, reduced or withdrawn, or
- upon receipt of the consent of Senior Noteholders holding at least a
majority of the aggregate principal balance of the Senior Notes and, to
the extent affected thereby, the consent of Certificateholders holding at
least a majority of the aggregate principal balance of the Certificates,
for the purpose of adding any provision to, or changing in any manner or
eliminating any provision of, the agreements or modifying in any manner the
rights of the Senior Notes or Certificates; provided, however, that
- no such amendment may increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments in respect of
the SUBI Interest or the SUBI Certificates, distributions required to be
made on the Senior Notes or the Certificates or the Interest Rate or the
Certificate Rate,
- no amendment of any type shall reduce the percentage of the aggregate
principal amount of the Senior Notes and the Certificates required to
consent to any such amendment, in each case without the consent of all
the holders or 100% of all outstanding Senior Notes or Certificates, as
the case may be, and
- an opinion of counsel as to certain tax matters is delivered.
To the extent that any such amendment also relates to or affects the UTI or any
Other SUBI, such amendment will require the consent of the holders affected
thereby. Notwithstanding the foregoing, the SUBI Trust Agreement and the
Administration Agreement may be amended at any time by the parties thereto to
the extent reasonably necessary to assure that none of the Origination Trust,
the Trust or the Transferor will be classified as an association, or a publicly
traded partnership, taxable as a corporation for federal income tax purposes.
Amendment of the Trust Agreement. The Trust Agreement may be amended by
the Transferor and the Owner Trustee without the consent of any of the Senior
Noteholders or Certificateholders to cure any ambiguity, correct or supplement
any of its provisions that may be inconsistent with any other provision in the
Trust Agreement, add any other provisions with respect to matters or questions
arising under the Trust Agreement that are not inconsistent with the provisions
of the Trust Agreement or add or amend any provision in the agreement in
connection with permitting transfers of the Subordinated Notes or the
Certificates; provided, however, that this action shall not, as evidenced by an
opinion of counsel, materially adversely affect the interests of the holders of
the SUBI Certificates or the Retained SUBI Certificates -- which, so long as any
Senior Notes are outstanding, shall include the Indenture Trustee -- or any the
Senior Notes or Certificates.
The Trust Agreement may also be amended from time to time by the Transferor
and the Owner Trustee,
- with prior written notice to each Rating Agency and confirmation from
each Rating Agency that such amendment would not cause the then-current
ratings assigned to the Senior Notes and the Certificates to be
qualified, reduced or withdrawn,
- with the consent of the Senior Noteholders holding at least a majority of
the aggregate principal balance of the Senior Notes and
- to the extent affected thereby, the consent of the holders of the
Subordinated Notes holding at least a majority of the aggregate principal
balance of the Subordinated Notes, and Certificateholders holding at
least a majority of the aggregate principal balance of the Certificates,
84
<PAGE> 86
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Trust Agreement or of modifying in any
manner the rights of the Senior Noteholders, the Certificateholders or the
holders of the Subordinated Notes. No such amendment shall, however,
- increase or reduce in any manner the amount of, or accelerate or delay
the timing of, distributions that are required to be made on the Notes or
the Certificates, or
- reduce the percentage of the Senior Noteholders, holders of the
Subordinated Notes or Certificateholders required to consent to any such
amendment,
without the consent of the holders of 100% of all outstanding Certificates other
than the Transferor Certificate, and provided, further that an opinion of
counsel shall be furnished to the Indenture Trustee and the Owner Trustee to the
effect that such amendment shall not (1) affect the treatment of the Senior
Notes as debt for federal income tax purposes, (2) be deemed to cause a taxable
exchange of the Senior Notes for federal income tax purposes or (3) cause the
Trust or the SUBI Certificates to be classified as an association, or a publicly
traded partnership, taxable as a corporation for federal income tax purposes.
Notwithstanding the foregoing, the Trust Agreement may be amended at any time by
the parties thereto to the extent reasonably necessary to assure that none of
the Origination Trust, the Trust or the Transferor will be classified as an
association, or a publicly traded partnership, taxable as a corporation for
federal income tax purposes.
The Trust Agreement may also be amended from time to time to approve
additional Trust activities and purposes upon the request of holders of at least
75% of the outstanding balance of the Certificates; provided, however, that any
such amendment will also require
- that each Rating Agency have delivered a letter to the effect that the
activities and purposes would not cause its then-current ratings of the
Senior Notes or the Certificates to be qualified, reduced or withdrawn,
and
- approval by holders of at least 75% of the outstanding balance of the
Senior Notes, or if the Senior Notes are no longer outstanding, by the
Subordinated Noteholder.
See "The Trust -- Formation".
The Trust Agreement will require the Owner Trustee to give the
Certificateholders 30 days' written notice of any proposed supplement to the
Indenture which would materially adversely affect the Certificateholders if the
consent of the Senior Noteholders is not required or any other amendment or
supplement to any other Basic Document unless the Owner Trustee is furnished
with an opinion of counsel that such amendment or supplement would not
materially adversely affect the Certificateholders. The Trust Agreement provides
that the Owner Trustee will not enter into such amendment unless
Certificateholders holding 25% or more of the aggregate principal balance of the
Certificates consent in writing.
Amendment of the Indenture. Without the consent of the Senior Noteholders
but with prior notice to each Rating Agency, the Owner Trustee, on behalf of the
Trust, and the Indenture Trustee, upon request by the Trust, may execute a
supplemental indenture for the purpose of adding to the covenants of the Trust,
curing any ambiguity, correcting or supplementing any provision that may be
inconsistent with any other provision or adding any other provision with respect
to matters or questions arising under the Indenture that will not be
inconsistent with other provisions of the Indenture.
Without the consent of the holder of each outstanding Senior Note affected
thereby, no supplemental indenture may:
- change the Final Payment Date of, or Interest Rate on, reduce the
principal amount thereof, or the Redemption Price with respect thereto or
change any place of payment where, or the coin or currency in which, the
Senior Notes or the interest thereon is payable;
- impair any right to institute suit for the enforcement of certain
provisions of the Indenture regarding payment;
85
<PAGE> 87
- reduce the percentage of the aggregate principal balance of the Senior
Notes the consent of the holders of which is required for any
supplemental indenture or for any waiver of compliance with certain
provisions of the Indenture or of certain defaults thereunder and their
consequences as provided for therein;
- modify or alter the provisions of the Indenture regarding the voting of
Senior Notes held by the Transferor, the Administrative Agent or any of
their respective affiliates or any obligor on the Senior Notes;
- reduce the percentage of the aggregate principal balance of Senior Notes
the consent of the holders of which is required to direct the Indenture
Trustee to sell or liquidate the Trust Estate, if the proceeds of that
sale would be insufficient to pay the aggregate principal balance and
accrued but unpaid interest on the Senior Notes;
- decrease the percentage of the aggregate principal balance of Senior
Notes required to amend the sections of the Indenture that specify the
applicable percentage of the aggregate principal balance of Senior Notes
necessary to amend the Indenture or the other Basic Documents; or
- permit the creation of any lien ranking prior to or on a parity with the
lien of the Indenture with respect to any of the collateral for the
Senior Notes or, except as otherwise permitted by or contemplated in the
Indenture, terminate the lien of the Indenture on any such collateral or
deprive the holder of any Senior Note of the security afforded by the
lien of the Indenture.
The Trust and the Indenture Trustee may also enter into supplemental
indentures, with the consent of holders of at least a majority of the aggregate
principal balance of the Senior Notes, and with written notice to each Rating
Agency, for the purpose of adding any provision to, changing in any manner or
eliminating any provision of the Indenture or for the purpose of modifying in
any manner the rights of the Senior Noteholders; provided, that
- such action will not, (1) as evidenced by an opinion of counsel,
materially adversely affect the interests of any Senior Noteholder and
(2) as confirmed by each Rating Agency, cause the then-current ratings of
the Senior Notes or the Certificates to be qualified, reduced or
withdrawn, and
- an opinion of counsel as to certain tax matters is delivered.
Amendment of the Program Operating Lease. The Program Operating Lease may
be amended without the consent of the Senior Noteholders or the
Certificateholders; provided, however, that
- such amendment may not, as evidenced by an opinion of counsel, materially
adversely affect the interests of the Senior Noteholders or the
Certificateholders, unless 100% of the Senior Noteholders and
Certificateholders materially adversely affected consent thereto,
- as confirmed by each Rating Agency, that amendment will not cause the
then-current rating assigned to any Senior Notes or the Certificates to
be qualified, withdrawn or reduced, and
- an opinion of counsel as to certain tax matters is delivered.
Notwithstanding the foregoing, the Program Operating Lease may be amended at any
time by the parties thereto to the extent reasonably necessary to ensure that
none of Origination Trust, the Trust or the Transferor will be classified as an
association, or a publicly traded partnership, taxable as a corporation for
federal income tax purposes.
Amendment of the SUBI Certificate Transfer Agreement. The SUBI Certificate
Transfer Agreement may be amended from time to time by the parties thereto.
Amendment of the Issuer SUBI Certificate Transfer Agreement. The Issuer
SUBI Certificate Transfer Agreement may be amended from time to time by the
parties thereto.
86
<PAGE> 88
Bankruptcy Provisions
The UTI Beneficiaries and the Origination Trust. The Trustees, the UTI
Beneficiaries, any Paying Agent, the Transferor, the Trust Agent, Ryder, the
Administrative Agent, each holder of an interest in the SUBI, an Other SUBI or
the UTI, and each Securityholder, by accepting the related Security, including
each Senior Noteholder, by accepting a beneficial interest in the related Senior
Notes (collectively, the "Non-Petition Parties"), will covenant that for a
period of one year and one day after payment in full of all amounts due to each
holder or pledgee of an interest in the UTI, the SUBIs or any Other SUBI, they
will not institute, or join in instituting, any bankruptcy, reorganization,
insolvency or liquidation proceeding or other similar proceeding against either
UTI Beneficiary or the Origination Trust. Notwithstanding the foregoing, each
Securityholder, the Indenture Trustee and the Owner Trustee may institute or
join any such proceeding if 100% of the holders of the SUBI and any Other SUBIs
consent, excluding the UTI Beneficiaries, the Transferor and any of their
respective affiliates. Each pledgee of the UTI, the SUBIs or any Other SUBI must
give a similar non-petition covenant.
The Transferor and the Trust. Each of the Administrative Agent, the
Transferor, the Owner Trustee, the Indenture Trustee and each Securityholder, by
accepting the related Security, including each Senior Noteholder, by accepting a
beneficial interest in the related Senior Notes, will covenant not to institute
or join in instituting any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding, or other similar proceeding against the Transferor or
the Trust for a period of one year and one day after the Senior Notes and the
Certificates have been paid in full; provided, however, that 100% of the Senior
Noteholders, or, if no Senior Notes are then outstanding, the Subordinated
Noteholder, or, if no Notes are then outstanding, 100% of the
Certificateholders, in each case excluding the Transferor and any of its
affiliates, may at any time institute or join in instituting any bankruptcy,
reorganization, insolvency or liquidation proceeding against the Transferor or
the Trust.
Senior Notes or Certificates Owned by the Trust, Transferor, Administrative
Agent or Their Affiliates
Any Senior Notes or Certificates owned by the Trust, the Transferor, the
Administrative Agent or any of their respective affiliates will be entitled to
benefits under the Indenture or the Trust Agreement, as the case may be, equally
and proportionately to the benefits afforded other owners of the Senior Notes or
Certificates, respectively, except that such Senior Notes or Certificates will
be deemed not to be outstanding for the purpose of determining whether the
requisite percentage of Senior Noteholders or Certificateholders, as the case
may be, have given any request, demand, authorization, direction, notice,
consent or other action under the Basic Documents.
Governing Law
The SUBI Trust Agreement and the Trust Agreement will be governed by the
laws of the State of Delaware. The Administration Agreement, the Indenture, the
SUBI Certificate Transfer Agreement, the Issuer SUBI Certificate Transfer
Agreement, the Trust Administration Agreement and the Program Operating Lease
will be governed by the laws of the State of New York.
Fees and Expenses
The Origination Trustee. The Origination Trustee will be entitled to
reasonable compensation for its services with respect to the SUBI Assets, which
will be paid by the Administrative Agent, the amount of which will be agreed
upon from time to time by the Origination Trustee and the Administrative Agent.
The Administrative Agent. As more fully described under "-- The
Administration Agreement -- Servicing Compensation", as compensation for the
servicing of the SUBI Assets and administering the distribution of funds in
respect thereof, the Administrative Agent will be entitled to receive the
Administration Fee on each Payment Date, together with reimbursement of fees and
expenses and any late payment fees now or later in effect or similar charges
paid with respect to the Specified Leases.
87
<PAGE> 89
The Administrative Agent will pay all expenses incurred by it in the
performance of its duties under the Administration Agreement, including fees and
disbursements of independent accountants, taxes imposed on the Administrative
Agent and expenses incurred in connection with distributions and reports to the
Trustees. The Administrative Agent will pay the fees and expenses of the
Trustees.
The Indenture Trustee. As more fully described under "Additional Document
Provisions -- The Indenture -- Compensation and Indemnity", the Administrative
Agent or the Administrator will pay the Indenture Trustee compensation for its
services and reimburse it for its reasonable expenses relating thereto.
The Owner Trustee and Paying Agent. The Administrator will pay the Owner
Trustee and each Paying Agent such fees as have been agreed upon among the
Transferor, the Administrator and the Owner Trustee or the Paying Agent, and
will reimburse the Owner Trustee and each Paying Agent for their reasonable
expenses. The Administrator will not be entitled to be reimbursed from the Trust
Estate for the payment of such expenses.
ADDITIONAL LEGAL ASPECTS OF THE ORIGINATION TRUST AND THE SUBIS
The Origination Trust
General
The Origination Trust is a business trust under Delaware law. In a business
trust, the trust property is managed for the profit of the beneficiaries, as
opposed to a common law "asset preservation" trust, where the trustee is charged
with the mere maintenance of trust property. The principal requirement for the
formation of a business trust in Delaware is the execution of a trust agreement
and the filing of a Certificate of Trust with the Secretary of State of the
State of Delaware. The Origination Trust has been so formed. The Origination
Trust has also made trust filings or obtained certificates of authority to
transact business in some states where, in the judgment of the Administrative
Agent, such action may be required.
Because the Origination Trust has been registered as a business trust for
Delaware and other state law purposes, it, like a corporation, may be eligible
to be a debtor in its own right under the United States Bankruptcy Code (the
"Bankruptcy Code"), as further described under "-- Insolvency-Related Matters".
To the extent that the Origination Trust may be eligible for relief under the
Bankruptcy Code or similar applicable state laws (the "Insolvency Laws"), the
Origination Trustee is not authorized to commence a case or proceeding
thereunder. Each of the Origination Trustee, the UTI Beneficiaries and the
holders from time to time of the UTI, the SUBIs and any Other SUBI have agreed
not to institute a case or proceeding against the Origination Trust under any
Insolvency Law for a period of one year and one day after payment in full of all
distributions to holders of the UTI, the SUBIs and any Other SUBI under the
Origination Trust Agreement. See "Additional Document
Provisions -- Miscellaneous Provisions -- Bankruptcy Provisions".
Allocation of Origination Trust Liabilities
The Origination Trust Assets may in the future be comprised of several
portfolios of Other SUBI Assets, together with the SUBI Assets and the UTI
Assets. The UTI Beneficiaries may in the future pledge the UTI as security for
obligations to third-party lenders, and may in the future create and sell or
pledge Other SUBIs in connection with other financings. The Origination Trust
Agreement will permit the Origination Trust, in the course of its activities, to
incur certain liabilities relating to its assets other than the SUBI Assets, or
relating to its assets generally. Pursuant to the Origination Trust Agreement,
as among the beneficiaries of the Origination Trust, an Origination Trust
liability relating to a particular portfolio of Origination Trust Assets will be
allocated to and charged against the portfolio of Origination Trust Assets to
which it belongs. Origination Trust liabilities incurred with respect to the
Origination Trust Assets generally will be borne pro rata among all portfolios
of Origination Trust Assets. The Origination Trustee and the beneficiaries of
the Origination Trust, including the Trust, will be bound by that allocation. In
particular, the Origination Trust Agreement will require the holders from time
to time of the UTI Certificates and any Other SUBI Certificates to waive any
claim they might otherwise have with respect to the SUBI Assets and to fully
subordinate any
88
<PAGE> 90
claims to the SUBI Assets in the event that such waiver is not given effect.
Similarly, by virtue of holding Senior Notes or a beneficial interest therein,
Senior Noteholders, and Note Owners will be deemed to have waived any claim they
might otherwise have with respect to the UTI Assets or any Other SUBI Assets.
See "Additional Document Provisions -- The SUBI Trust Agreement -- The SUBIs,
Other SUBIs and the UTI".
The Origination Trust Assets are located in several states, the tax laws of
which vary. Additionally, the Origination Trust may in the future own Leases and
Vehicles located in states other than the states in which it conducts business
as of the date of this prospectus. In the event any state or locality imposes a
tax on the Origination Trust at the entity level, the UTI Beneficiaries have
agreed to indemnify the holders of the SUBI Certificates, the Retained SUBI
Certificates and each Other SUBI Certificate for the full amount of such taxes.
Should the UTI Beneficiaries fail to fulfill their respective indemnification
obligations, amounts otherwise distributable to them as holders of the UTI
Certificates will be applied to satisfy such obligations. However, it is
possible that Senior Noteholders could incur a loss on their investment in the
event the UTI Beneficiaries did not have sufficient assets available, including
distributions in respect of the UTI, to satisfy such state or local tax
liabilities.
The Origination Trust Agreement provides for the UTI Beneficiaries to be
liable as if the Origination Trust were a partnership and the UTI Beneficiaries
were general partners of the partnership to the extent necessary after giving
effect to the payment of liabilities allocated severally to the holders of the
SUBI Certificates, the Retained SUBI Certificates and any Other SUBI
Certificates. However, it is possible that the Senior Noteholders and
Certificateholders could incur a loss on their investment to the extent any such
claim were allocable to the Trust as the holder of the Vehicle SUBI Certificate
or the pledgee of the Lease SUBI Certificate, either because a lien arose in
connection with the SUBI Assets or in the event the UTI Beneficiaries did not
have sufficient assets available, including distributions in respect of the UTI,
to satisfy such claimant or creditor in full.
The SUBIs
The SUBIs will evidence a beneficial interest in the related SUBI Assets.
The SUBIs will represent neither a direct legal interest in the related SUBI
Assets, nor an interest in any Origination Trust Assets other than the related
SUBI Assets. Under the allocation of Origination Trust liabilities described
under "Additional Document Provisions -- The SUBI Trust Agreement -- The SUBIs,
Other SUBIs and the UTI", payments made on or in respect of such other
Origination Trust Assets will not be available to make payments on the Senior
Notes or to cover expenses of the Origination Trust allocable to the SUBI
Assets. Any liability to third parties arising from or in respect of a Specified
Lease or a Specified Vehicle will be borne by the holders of the SUBI Interest,
including the Trust, and the Retained SUBI Interest. If any such liability
arises from a Lease or Vehicle that is an Other SUBI Asset or an UTI Asset, the
SUBI Assets will not be subject to such liability.
Because the Trust's primary asset will be the Vehicle SUBI Certificate and
its rights as a pledgee of the Lease SUBI Certificate, the Trust, and,
accordingly, the Indenture Trustee, will have an indirect beneficial ownership
interest, rather than a security interest, in the SUBI Assets allocable to the
SUBI Interest. Except as otherwise described below or under "Additional Legal
Aspects of the Specified Leases and Specified Vehicles", generally the Trust
will not have a perfected security interest in the SUBI Assets, and in no
circumstances will the Trust have a direct ownership or perfected security
interest in any Specified Vehicle.
The Trust will generally be deemed to own the Vehicle SUBI Certificate and,
through such ownership, to have an indirect beneficial ownership interest in the
Specified Vehicles. If a court of competent jurisdiction were to recharacterize
the sale of the Vehicle SUBI Certificate and the SUBI Interest evidenced thereby
to the Trust, the Trust, or, during the term of the Indenture, the Indenture
Trustee, could instead be deemed to have a perfected security interest in the
Vehicle SUBI Certificate, and certain rights susceptible of perfection under the
UCC, but in no event would the Trust or the Indenture Trustee be deemed to have
a perfected security interest in the Specified Vehicles.
89
<PAGE> 91
Because the Trust will not directly own the SUBI Assets, and because its
interest therein will generally be an indirect beneficial ownership interest,
perfected liens of third-party creditors of the Origination Trust in SUBI Assets
will take priority over the interests of the Trust and the Indenture Trustee in
the SUBI Assets. Therefore, a general creditor of the Origination Trust may
obtain a lien on one or more SUBI Assets, regardless of whether its claim would
be allocated to such SUBI Assets under the terms of the Origination Trust
Agreement. Such liens could include liens arising under various federal and
state criminal statutes, certain liens in favor of the Pension Benefit Guaranty
Corporation and judgment liens resulting from successful claims against the
Origination Trust arising from the operation of the Specified Vehicles. See
"Risk Factors -- If ERISA liens are placed on the assets of the trust, you could
suffer a loss in your investment" and "-- Vicarious tort liability may result in
a loss of your investment" and "Additional Legal Aspects of the Specified Leases
and the Specified Vehicles -- Vicarious Tort Liability" for a further discussion
of these risks.
Insolvency-Related Matters
As described under "Additional Document Provisions -- The SUBI Trust
Agreement -- The SUBIs, Other SUBIs and the UTI" and "-- The SUBIs", each holder
or pledgee of the UTI Certificates and any Other SUBI Certificate will be
required to expressly disclaim any interest in the SUBI Assets and to fully
subordinate any claims to the SUBI Assets in the event that disclaimer is not
given effect. Although no assurances can be given, in the unlikely event of the
bankruptcy of RTR I LP, the Transferor believes that the SUBI Assets would not
be treated as part of RTR I LP's bankruptcy estate and that, even if they were
so treated, the subordination by the holders and pledgees of the UTI
Certificates and any Other SUBI Certificate would be enforceable. In addition,
as described under "Risk Factors -- A bankruptcy of the transferor or
administrative agent could delay or limit payments to you", each of RTR I LP,
the Origination Trust, or the Origination Trustee when acting on its behalf, and
the Transferor has taken steps in structuring the transactions described herein
and has undertaken to act throughout the life of such transactions in a manner
intended to ensure that in the event a voluntary or involuntary case is
commenced by or against Ryder under the Insolvency Laws, the separate legal
existence of each of Ryder, on the one hand, and the Origination Trust, RTR I LP
and the Transferor, on the other hand, will be maintained such that none of the
respective assets and liabilities of the Origination Trust, RTR I LP or the
Transferor should be consolidated with those of Ryder.
With respect to RTR I LLC and RTR III LLC, these steps include their
creation as separate limited liability companies under limited liability company
agreements containing certain limitations, including, the requirement that each
must have at all times a managing member that is a corporation with at least two
independent directors, and restrictions on the nature of their businesses and
operations and on their ability to commence a voluntary case or proceeding under
any Insolvency Law without the unanimous affirmative vote of all members,
including each independent member. With respect to RTR I LP and the Transferor,
these steps include their creation as separate, special purpose limited
partnerships, pursuant to limited partnership agreements containing certain
limitations (including, restrictions on the nature of their respective
businesses and on their ability to commence a voluntary case or proceeding under
any Insolvency Law without the unanimous affirmative vote of all members of
their respective general partners, including each independent director of each
managing member).
There can be no assurance, however, that the limitations on the activities
of RTR I LP, the Origination Trust and the Transferor, as well as the
restrictions on their abilities to obtain relief under Insolvency Laws or lack
of eligibility thereunder, as described above, would prevent a court from
concluding that their assets and liabilities should be consolidated with those
of Ryder, if Ryder becomes the subject of a case or proceeding under any
Insolvency Law. On the Closing Date, Brown & Wood LLP, as special counsel to the
Transferor, will deliver an opinion based on a reasoned analysis of analogous
case law -- although there is no precedent based on directly similar facts -- to
the effect that, subject to certain facts, assumptions and qualifications
specified in the opinion, under present reported decisional authority and
applicable statutes to federal bankruptcy cases, if Ryder were to become a
debtor in a case under the Bankruptcy Code, it would not be a proper exercise by
a court of its equitable discretion (a) to disregard the separate legal
existence of any of the Origination Trust, RTR I LP or the Transferor from that
of Ryder and (b) to order the substantive
90
<PAGE> 92
consolidation of the assets and liabilities of any of the Origination Trust, RTR
I LP or the Transferor with the assets and liabilities of Ryder. Among other
things, that opinion will assume that each of the Origination Trust, or the
Origination Trustee when acting on its behalf, RTR I LP and the Transferor will
follow certain procedures in the conduct of its affairs, including maintaining
separate records and books of account from those of Ryder, not commingling its
respective assets with those of Ryder, doing business in a separate office from
Ryder and not holding itself out as having agreed to pay, or being liable for,
the debts of Ryder. In addition, that opinion will assume that except as
expressly provided by the Origination Trust Agreement and the Administration
Agreement -- each of which contains terms and conditions consistent with those
that would be arrived at on an arm's length basis between unaffiliated entities
in the belief of the parties thereto -- Ryder generally will not guarantee the
obligations of the Origination Trust, RTR I LP or the Transferor to third
parties, and will not conduct the day-to-day business or activities of any
thereof, other than in its capacity as Administrative Agent acting under and in
accordance with the Administration Agreement. Each of Ryder, the Origination
Trust, RTR I LP and the Transferor intends to follow and has represented that it
will follow these and other procedures related to maintaining the separate
identities and legal existences of each of the Origination Trust, RTR I LP and
the Transferor. Such a legal opinion, however, will not be binding on any court.
If a case or proceeding under any Insolvency Law were to be commenced by or
against any of Ryder, the Origination Trust, RTR I LP or the Transferor, if a
court were to order the substantive consolidation of the assets and liabilities
of any of such entities with those of Ryder or if an attempt were made to
litigate any of the foregoing issues, delays in distributions on the SUBI
Certificates, and possible reductions in the amount of such distributions, to
the Trust -- either directly or, if the Program Operating Lease remains in
effect, indirectly to the extent resulting in delayed or reduced Program
Operating Lease Payments from the Transferor to the Trust -- and therefore to
the Senior Noteholders, could occur. In addition, the SUBI Trust Agreement
provides that if the Transferor becomes bankrupt or insolvent or the Trust is
dissolved -- which could occur as a result of the bankruptcy of the
Transferor -- the SUBI will be terminated and the SUBI Trust Agreement will
terminate with respect to the SUBI. In each case, the Origination Trustee will
be required to distribute the SUBI Assets to the holders of the SUBI
Certificates. Because the Trust has pledged its rights in and to the SUBI
Certificates to the Indenture Trustee, such distribution would be made to the
Indenture Trustee, which would be responsible for retitling the Specified
Vehicles. The cost of that retitling would reduce amounts payable from the SUBI
Assets that are available for payments of interest on and principal of the
Senior Notes, and in that event, the Senior Noteholders could suffer a loss on
their investment.
RTR I LP will treat its conveyance of the SUBI Certificates to the
Transferor as an absolute sale, transfer and assignment of all of its interest
therein for all purposes. However, if a case or proceeding under any Insolvency
Law were commenced by or against RTR I LP, and RTR I LP as debtor-in-possession
or a creditor, receiver or bankruptcy trustee of RTR I LP were to take the
position that the sale, transfer and assignment of the SUBI Certificates by RTR
I LP to the Transferor should instead be treated as a pledge of the SUBI
Certificates to secure a borrowing by RTR I LP, delays in payments of proceeds
of the SUBI Certificates to the Trust, and therefore to the Senior Noteholders,
could occur or, should the court rule in favor of that position, reductions in
the amount of such payments could result. On the Closing Date, Brown & Wood LLP,
as special counsel to the Transferor, will deliver an opinion to the effect
that, subject to certain facts, assumptions and qualifications specified
therein:
- In the event that the Transferor were to become a debtor in a case under
the Bankruptcy Code subsequent to the sale, transfer and assignment of
the Vehicle SUBI Certificate to the Trust, the sale, transfer and
assignment of the Vehicle SUBI Certificate from the Transferor would be
characterized as an absolute sale, transfer and assignment of the SUBI
Certificate from the Transferor to the Trust, and the Vehicle SUBI
Certificate and the proceeds thereof would not be property of the
Transferor's bankruptcy estate;
- In the event that RTR I LP were to become a debtor in a case under the
Bankruptcy Code subsequent to the sale, transfer and assignment of the
SUBI Certificates to the Transferor, the sale, transfer and assignment of
the SUBI Certificates from RTR I LP would be characterized as an absolute
sale,
91
<PAGE> 93
transfer and assignment of the SUBI Certificates from RTR I LP to the
Transferor, and the SUBI Certificates and the proceeds thereof would not
be property of RTR I LP's bankruptcy estate; and
- In the event that Ryder were to become a debtor in a case under the
Bankruptcy Code subsequent to Ryder's sale, transfer and assignment of
the Specified Vehicles and Specified Leases to the Origination Trust, the
sale, transfer and assignment of the Specified Vehicles and Specified
Leases from Ryder would be characterized as an absolute sale, transfer
and assignment of the Specified Vehicles and Specified Leases from Ryder
to the Origination Trust, and the Specified Vehicles, the Specified
Leases or the proceeds thereof would not be property of the Ryder's
bankruptcy estate.
As indicated above, however, such a legal opinion is not binding on any court.
As a precautionary measure, the Transferor will take the actions requisite
to obtaining a security interest in the SUBI Certificates as against RTR I LP
which the Transferor will assign to the Trust and the Trust will assign to the
Indenture Trustee. The Indenture Trustee will perfect its security interest in
each SUBI Certificate, which will each be a "certificated security" under the
UCC, by possession. Accordingly, if the conveyance of the SUBI Certificates by
RTR I LP to the Transferor were not respected as an absolute sale, transfer and
assignment, the Transferor, and ultimately the Trust and the Indenture Trustee
as successors in interest, should be treated as a secured creditor of RTR I LP,
although a case or proceeding under any Insolvency Law with respect to RTR I LP
could result in delays or reductions in distributions on the SUBI Certificates
as indicated above, notwithstanding such perfected security interest.
In the event that the Administrative Agent were to become subject to a case
under the Bankruptcy Code, some payments made within one year of the
commencement of such case, including Advances, Reallocation Payments and
payments made with respect to the Titling Grace Period Vehicles which were not
properly retitled during the Titling Grace Period, may be recoverable by the
Administrative Agent as debtor-in-possession or by a creditor or a trustee in
bankruptcy as a preferential transfer from the Administrative Agent. See "Risk
Factors -- A bankruptcy of the transferor or the administrative agent could
delay or limit payments to you".
ADDITIONAL LEGAL ASPECTS OF THE SPECIFIED LEASES AND THE SPECIFIED VEHICLES
Back-up Security Interests
Because the Trust will own the Vehicle SUBI Certificate, the Trust will
have an indirect beneficial interest, rather than a security interest, in the
Vehicle SUBI Assets. The Trust also will be a pledgee of the Lease SUBI
Certificate held by the Transferor which in turn will have an indirect
beneficial interest, rather than a security interest, in the Lease SUBI Assets.
Except as otherwise described below, the Owner Trustee generally will not have a
perfected security interest in the property of the Trust or the SUBI Assets and
in no circumstances will the Owner Trustee have a perfected security interest in
any Specified Vehicle.
As described under "Additional Legal Aspects of the Origination Trust and
the SUBIs", the Indenture Trustee will have a security interest in the SUBI
Certificates perfected by possession.
The SUBI Assets will consist principally of the Specified Leases and the
related Specified Vehicles, subject to the rights of the Obligors under the
Specified Leases. To the extent that the pledge of the Lease SUBI Certificate
were to be viewed as representing a transfer of the assets of the Origination
Trust, the Specified Leases would be "chattel paper" as defined in the UCC.
Pursuant to the UCC, a non-possessory security interest in chattel paper may be
perfected by filing a UCC-1 financing statement with the appropriate filing
office in the state where the debtor has its chief executive office.
Accordingly, as a precaution, UCC-1 financing statements relating to the
Specified Leases will be filed naming:
- the Origination Trust as debtor and the Indenture Trustee as assignee
secured party;
- RTR I LP as debtor and the Indenture Trustee as assignee secured party;
- the Transferor as debtor and the Indenture Trustee as assignee secured
party; and
- the Trust as debtor and the Indenture Trustee as secured party.
Perfection and the effect of perfection or non-perfection of a security interest
in the Specified Vehicles are governed by the certificate of title statutes of
the states in which such Specified Vehicles are located. Because
92
<PAGE> 94
of the administrative burden and expense of perfecting an interest in trucks,
tractors and trailers under the certificate of title statutes in the states in
which the Specified Leases were originated, the Indenture Trustee's interest in
the Specified Vehicles will be unperfected, and if the transfer of the Vehicle
SUBI Certificate were to be viewed as a transfer of the Vehicle SUBI Assets, the
Indenture Trustee would only have a perfected security interest in the Specified
Leases. The Indenture Trustee's security interest in the Specified Leases could
be subordinate to the interests of some other parties who take possession of the
Specified Leases. Specifically, the Trust's security interest in a Specified
Lease could be subordinate to the rights of a purchaser of that Specified Lease
who takes possession thereof without knowledge or actual notice of the Trust's
security interest. The Specified Leases will not be stamped to indicate the
precautionary security arrangements. However, the Administration Agreement
requires the Administrative Agent to retain custody of the Specified Leases. To
the extent that a valid lien is imposed by a third party against a Specified
Vehicle, the interest of the lienholder will be superior to the unperfected
beneficial interest of the Trust in that Specified Vehicle. Although the
Administration Agreement will require the Administrative Agent to contest all
such liens and cause the removal of any liens that may be imposed, if any such
liens are imposed against the Specified Vehicles, investors in the Senior Notes
could incur a loss on their investment. For further information relating to
potential liens on the SUBI Assets, see "Additional Document Provisions -- The
Administration Agreement -- Notification of Liens and Claims", "Additional
Document Provisions -- The Administration Agreement -- Custody of Lease
Documents and Certificates of Title" and "Additional Legal Aspects of the
Origination Trust and the SUBIs -- The SUBIs".
As noted under "Additional Legal Aspects of the Origination Trust and the
SUBIs -- The SUBIs", various liens could be imposed upon all or part of the SUBI
Assets that, by operation of law, would take priority over the Trust's interest
therein. Such liens would include mechanic's, repairmen's, garagemen's and motor
vehicle accident liens and some liens for personal property taxes, in each case
arising with respect to a particular Specified Vehicle, liens arising under
various state and federal criminal statutes and some liens more fully described
under "Risk Factors -- If ERISA liens are placed on the assets of the trust, you
could suffer a loss on your investment" in favor of the Pension Benefit Guaranty
Corporation. Additionally, any perfected security interest of the Trust in all
or part of the property of the Trust could also be subordinate to claims of any
trustee in bankruptcy or debtor-in-possession in the event of a bankruptcy of
the Transferor prior to any perfection of the transfer of the assets sold,
transferred and assigned by the Transferor to the Trust pursuant to the
Agreement, as more fully described under "Risk Factors -- A bankruptcy of the
transferor or the administrative agent could delay or limit payments to you".
Titling Grace Period -- Lack of Perfected Ownership Interest
During the Titling Grace Period, some of the Specified Vehicles will be
titled in the name of Ryder rather than in the name of the Origination Trust or
the Origination Trustee on behalf of the Origination Trust (the "Titling Grace
Period Vehicles"). During the Titling Grace Period, the Administrative Agent
will title the Titling Grace Period Vehicles in the name of the Origination
Trust or the Origination Trustee on behalf of the Origination Trust but no
action will be taken to note the lien of the Transferor on the applicable
certificates of title.
An ownership interest or security interest in a motor vehicle registered in
most states may be perfected against creditors and subsequent purchasers without
notice for valuable consideration only by one or more of the following:
depositing with a state's department of motor vehicles a properly endorsed
certificate of title for the vehicle showing the transferee or secured party as
legal owner or lienholder thereon, filing a sworn notation of lien with the
state's department of motor vehicles and noticing such lien on the certificate
of title, or if the vehicle has not been previously registered, filing an
application in usual form for an original registration together with an
application for registration of the secured party as legal owner or lienholder,
as the case may be, with a state's department of motor vehicles. Therefore, the
Origination Trust and the Transferor may not have a validly perfected ownership
interest and security interest, respectively, in the Titling Grace Period
Vehicles.
As a result, the Origination Trust's and the Transferor's ownership and
security interest, as the case may be, in such a Titling Grace Period Vehicle
will not be perfected and the Transferor's interest in the Titling
93
<PAGE> 95
Grace Period Vehicles will be inferior to other creditors or purchasers who have
taken the necessary steps described above. However, Ryder will assign its
ownership interest in the Specified Vehicles subject to the Specified Leases and
will transfer such Vehicles to the Origination Trust on or prior to the Closing
Date, and within the Titling Grace Period will retitle all of the Specified
Vehicles in the name of the Origination Trust or the Origination Trustee on
behalf of the Origination Trust. In many states, an assignment of an ownership
interest is an effective conveyance of an interest without amendment of any
owner noted on a vehicle's certificate of title, and the assignee succeeds
thereby to the assignor's rights as owner. However, the Origination Trust's and
the Transferor's interest in these Specified Vehicles could be defeated through
fraud or negligence, and because the Origination Trust is not yet identified as
the owner on the certificate of title, Ryder's bankruptcy.
Failure to retitle a Titling Grace Period Vehicle in the name of the
Origination Trust or the Origination Trustee on behalf of the Origination Trust
by the end of the Titling Grace Period will require the Administrative Agent to
make a payment equal to the Securitization Value of the related Specified Lease
as of the last day of the Titling Grace Period. See "The Origination
Trust -- Lease Origination and the Titling of Vehicles" and "The Specified
Leases -- Representations, Warranties and Covenants". On or prior to the last
day of the Titling Grace Period the Administrative Agent will provide each
Rating Agency and the Indenture Trustee with an Officer's Certificate of the
Administrative Agent as to the status of the retitling of the Titling Grace
Period Vehicles. Although all of the Specified Vehicles have been or will be,
during the Titling Grace Period, titled in the name of the Origination Trust or
the Origination Trustee on behalf of the Origination Trust, no liens will be
recorded on the related certificates of title. See "-- Back-up Security
Interests".
Vicarious Tort Liability
Although the Origination Trust will own the Specified Vehicles, they will
be operated by the related Obligors and their invitees. State laws differ as to
whether anyone suffering injury to person or property involving a vehicle may
bring an action against the owner of that vehicle merely by virtue of such
ownership.
Following an accident involving a Specified Vehicle, under certain
circumstances the Origination Trust may be the subject of an action for damages
as a result of its ownership of that Specified Vehicle. To the extent that
applicable state law permits such an action, the Origination Trust and the
Origination Trust Assets may be subject to liability. The laws of many states
either do not permit such suits or provide that the lessor's liability is capped
at the amount of any liability insurance that the lessee was required but failed
to maintain. However, in some states, such as New York, liability is joint and
several and there does not appear to be a limit on an owner's liability.
Although the Origination Trust's insurance coverage is substantial, in the
event that all applicable insurance coverage were to be exhausted and damages
were to be assessed against the Origination Trust, claims could be imposed
against the assets of the Origination Trust, including the Specified Vehicles.
However, such claims would not take priority over any SUBI Assets to the extent
that the Trust had a prior perfected security interest therein, such as would be
the case, in certain limited circumstances, with respect to the Specified
Leases, as further described under "-- Back-up Security Interests". If any such
claims were imposed against the assets of the Origination Trust, investors in
the Senior Notes could incur a loss on their investment.
Repossession of Specified Vehicles
In the event that a default by an Obligor has not been cured within a
certain period of time after being sent notice of that default, the
Administrative Agent will ordinarily repossess the related Specified Vehicle.
Some jurisdictions require that a lessee be notified of the default and be given
a time period within which to cure that default prior to repossession.
Generally, this right to cure may be exercised on a limited number of occasions
in any one-year period. In these jurisdictions, if a lessee objects or raises a
defense to repossession, an order must be obtained from the appropriate state
court, and the vehicle must then be repossessed in
94
<PAGE> 96
accordance with that order. Other jurisdictions permit repossession without
notice, but only if the repossession can be accomplished peacefully. If a breach
of the peace cannot be avoided, judicial action will be required.
After the Administrative Agent has repossessed a Specified Vehicle, it may
provide the related Obligor with a period of time within which to cure the
default under the related Specified Lease. If, by the end of that period, the
default has not been cured, the Administrative Agent will attempt to sell that
Specified Vehicle. The Termination Proceeds therefrom may be less than the
remaining amounts due under that Specified Lease at the time of default.
Deficiency Judgments
The proceeds of sale of a Specified Vehicle generally will be applied first
to the expenses of resale and repossession and then to the satisfaction of the
amounts due under the related Specified Lease. If the proceeds from the sale do
not equal the Securitization Value of the related Specified Vehicle, the
Administrative Agent may seek a deficiency judgment for the amount of the
shortfall. However, some states impose prohibitions or limitations on a secured
party's ability to seek a deficiency judgment. In these states a deficiency
judgment may be prohibited or reduced in amount if the Obligor was not given
proper notice of the resale or if the terms of resale were not commercially
reasonable. Even if a deficiency judgment is obtained, there is no guaranty that
the full amount of the judgment could be collected. Because a deficiency
judgment is a personal judgment against a defaulting Obligor who generally has
few assets to satisfy a judgment, the practical use of a deficiency judgment is
often limited. Therefore, in many cases, it may not be useful to seek a
deficiency judgment and even if obtained, a deficiency judgment may be settled
at a significant discount.
Representations and warranties will be made in the SUBI Trust Agreement
that each Specified Lease complies with all requirements of law in all material
respects. If any such representation and warranty proves to be incorrect with
respect to a Specified Lease, and is not timely cured, the Administrative Agent
will be required under the Administration Agreement to deposit an amount equal
to the Reallocation Payment in respect of that Specified Lease into the SUBI
Collection Account. See "Additional Document Provisions -- The SUBI Trust
Agreement -- The SUBIs, Other SUBIs and the UTI" and "The Specified Leases --
Representations, Warranties and Covenants" for further information regarding the
foregoing representations and warranties.
Other Limitations
In addition to laws limiting or prohibiting deficiency judgments, numerous
other statutory provisions, including applicable Insolvency Laws, may interfere
with or affect the ability of Ryder to enforce the obligation of the
Administrative Agent to enforce the rights of the Origination Trust under the
Specified Leases. For example, if an Obligor commences bankruptcy proceedings,
the receipt of that Obligor's payments due under the related Specified Lease is
likely to be delayed. In addition, an Obligor who commences bankruptcy
proceedings might be able to assign the related Specified Lease to another party
even though that Specified Lease prohibits assignment.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
General
Some portions of the discussion set forth in this section -- those that
specifically refer to Steel Hector & Davis LLP -- are statements of the opinion
of Steel Hector & Davis LLP, special federal income tax counsel to the
Transferor, as to material federal income tax consequences to Senior
Noteholders. This discussion does not purport to be complete or to deal with all
aspects of federal income taxation or any aspects of state or local taxation
that may be relevant to Senior Noteholders in light of their particular
circumstances, nor to certain types of Senior Noteholders subject to special
treatment under the federal income tax laws (for example, banks, life insurance
companies, tax-exempt organizations and broker-dealers). This discussion is
based upon current provisions of the Internal Revenue Code as of 1986, as
amended (the "Code"), existing
95
<PAGE> 97
and proposed Treasury Department regulations thereunder (the "Treasury
Regulations"), and current administrative rulings, judicial decisions and other
applicable authorities in effect as of the date hereof, all of which are subject
to change, possibly with retroactive effect. In addition, this summary is
generally limited to investors who purchase Senior Notes in their initial
distribution and who will hold the Senior Notes as "capital
assets" -- generally, property held for investment -- within the meaning of
Section 1221 of the Code.
There are no cases or Internal Revenue Service (the "IRS") rulings with
respect to transactions similar to those described in this prospectus with
respect to the Trust, involving both debt and equity interests issued by a trust
with terms similar to those of the Notes and the Certificates. As a result,
there can be no assurance that the IRS will not challenge the conclusions set
forth below. Furthermore, legislative, judicial or administrative changes may
occur, perhaps with retroactive effect, which could affect the accuracy of the
statements and conclusions set forth below as well as the tax consequences to
Senior Noteholders. The parties do not intend to seek a ruling from the IRS on
any of the issues discussed below. Moreover, there can be no assurance that if
such a ruling were sought, the IRS would rule favorably.
Taxpayers and preparers of tax returns (including those filed by any
partnership or other issuer) should be aware that under applicable Treasury
Regulations a provider of advice on specific issues of law is not considered an
income tax return preparer unless the advice is given with respect to events
that have occurred at the time the advice is rendered, is not given with respect
to the consequences of contemplated actions and is directly relevant to the
determination of an entry on a tax return. Accordingly, taxpayers are advised to
consult their respective tax advisors and tax return preparers regarding the
preparation of any item on a tax return, even where the anticipated tax
treatment has been discussed herein. It is recommended that prospective
investors consult their own tax advisors with regard to the federal income tax
consequences of the purchase, ownership and disposition of the Senior Notes, as
well as the tax consequences arising under the laws of any state, foreign
country or other taxing jurisdiction.
This summary does not purport to deal with all aspects of federal income
taxation that may be relevant to Senior Noteholders in light of their personal
investment circumstances.
Senior Notes
General
Tax Characterization of the Trust. In the opinion of Steel Hector & Davis
LLP, special counsel to the Transferor, subject to the assumptions and
qualifications contained in that opinion, under existing law the Trust will not
be classified as an association, or publicly traded partnership, taxable as a
corporation for federal income tax purposes. This opinion is based on the
assumptions that, among other things, the Senior Notes, the Subordinated Notes
and the Certificates will be issued pursuant to the terms of the Basic Documents
and that such terms will be complied with. However, counsel's opinion is not
binding on the IRS and no assurance can be given that such characterization will
prevail. Some contrary characterizations that could be asserted by the IRS are
described below under "-- Possible Alternative Treatment of the Notes or Trust".
Characterization of the Senior Notes as Indebtedness. The Transferor and
the Owner Trustee will agree, and the Senior Noteholders will agree by their
purchase of Senior Notes, to treat the Senior Notes for federal, state and local
income and franchise tax purposes as indebtedness, secured by the assets of the
Trust. However, the SUBI Certificate Transfer Agreement generally refers to the
transfer of the Vehicle SUBI Certificate as an "absolute sale, transfer and
assignment," and the Transferor will treat the SUBI Certificate Transfer
Agreement, for some non-tax accounting purposes, as causing a transfer of an
ownership interest in the Vehicle SUBI Certificate and not as creating a debt
obligation.
For U.S. federal income tax purposes, the economic substance of a
transaction often determines its tax consequences. The form of a transaction,
while a relevant factor, is generally not conclusive evidence of the economic
substance of the transaction. In appropriate circumstances, the courts have
allowed the IRS, as well as taxpayers, in more limited circumstances, to treat a
transaction in accordance with its economic substance, as determined under U.S.
federal income tax law, even though the participants have characterized
96
<PAGE> 98
the transaction differently for non-tax purposes. In Commissioner v. Danielson,
378 F.2d 771 (3d Cir. 1967) ("Danielson"), the Third Circuit Court of Appeals
substantially limited the circumstances in which a taxpayer for tax purposes
could ignore the form of a transaction. Some courts have followed this decision
while others have not. Danielson related to the treatment of a bargained-for
allocation of purchase price, which various taxpayers were characterizing in
different ways, and the application of the Danielson rationale to the Senior
Notes, where all of the parties have agreed on a consistent tax characterization
of the transaction, is arguably not appropriate. However, in United States v.
Scharrer, 229 B.R. 210 (M.D. Fla. 1999), the District Court, citing Danielson,
reversed a bankruptcy court's decision that a purported sale of lease payments
was a borrowing, on the grounds that the form of the transaction was a sale
rather than a borrowing. While the facts of the case differ from those involving
the Senior Notes, the case extends Danielson to sale/borrowing transactions.
Nevertheless, it is the opinion of Steel Hector & Davis LLP, special counsel to
the Transferor, that in a properly presented case, the Danielson doctrine would
not prevent a determination of the tax characterization of the Senior Notes
based on the economic substance of the transaction.
In the opinion of Steel Hector & Davis LLP, special tax counsel to the
Transferor, subject to the assumptions and qualifications contained in that
opinion, under existing law the Senior Notes will be treated as indebtedness for
federal income tax purposes. The discussion below assumes this characterization
of the Senior Notes is correct.
Stated Interest. Stated interest on the Senior Notes will be taxable as
ordinary income for federal income tax purposes when received or accrued in
accordance with a Senior Note Owner's method of tax accounting.
Original Issue Discount. A Senior Note will be treated as issued with
Original Issue Discount ("OID") if the excess of its stated redemption price at
maturity over its issue price equals or exceeds a de minimis amount equal to
1/4 of 1 percent of stated redemption price at maturity multiplied by the number
of complete years based on the anticipated weighted average life of the Senior
Note to its maturity. It is expected that the Senior Notes will be issued with
de minimis OID. Generally, the issue price of a Senior Note should be the first
price at which a substantial amount of the Senior Notes included in the issue of
which the Senior Note is a part is sold to other than bond houses, brokers or
similar persons or organizations acting in the capacity of underwriters,
placement agents or wholesalers. The stated redemption price at maturity of a
Senior Note is expected to equal the principal amount of the related Senior
Note. Any amount not treated as OID because it is de minimis OID must be
included in income -- generally as gain from the sale of that Senior Note -- as
principal payments are received on the related Senior Notes in the proportion
that each such payment bears to the original principal balance of that Senior
Note.
If the Senior Notes are issued with OID, Senior Noteholders generally will
be required to include OID in income for each accrual period in advance of
receipt of the cash representing that OID. A holder of a debt instrument issued
with OID is required to recognize as ordinary income the amount of OID on the
debt instrument as such discount accrues, in accordance with a constant yield
method. Because the payments on the Senior Notes may be accelerated by reason of
prepayments on or the sale of some of the SUBI Assets, the periodic accrual of
OID, other than de minimis OID, may have to be determined under section
1272(a)(6) of the Code by taking into account both the prepayment assumption
used in pricing the Senior Notes and the prepayment experience. The amount of
OID that will accrue on a Senior Note during an accrual period -- generally the
period between interest payments or compounding dates -- is the excess, if any,
of the sum of
- the present value of all payments remaining to be made on the Senior Note
as of the close of the accrual period, and
- the payments during the accrual period of amounts included in the stated
redemption price of the Senior Note,
over the adjusted issue price of the Senior Note at the beginning of the accrual
period. An accrual period is the period over which OID accrues, and may be of
any length, provided that each accrual period is no longer than one year and
each scheduled payment of interest or principal occurs on either the last day or
the first day of
97
<PAGE> 99
an accrual period. The Trust intends to report OID on the basis of an accrual
period that corresponds to the interval between Payment Dates. The adjusted
issue price of a Senior Note is the sum of its issue price plus prior accruals
of OID, reduced by the total payments made with respect to that Senior Note in
all prior periods, other than qualified stated interest payments. The present
value of the remaining payments is determined on the basis of three factors:
- the original yield to maturity of the Senior Note, determined on the
basis of compounding at the end of each accrual period and properly
adjusted for the length of the accrual period,
- events which have occurred before the end of the accrual period, and
- the assumption that the remaining payments will be made in accordance
with the original prepayment assumption.
No regulations have been issued under section 1272(a)(6) so it is not clear if
that section of the Code would apply to the Senior Notes if they are treated as
having OID.
The effect of this method is to increase the portions of OID required to be
included in income by a Senior Noteholder to take into account prepayments on
the Specified Leases at a rate that exceeds the original prepayment assumption,
and to decrease -- but not below zero for any period -- the portions of OID
required to be included in income by a Senior Noteholder to take into account
prepayments on or the sale of some of the SUBI Assets at a rate that is slower
than the original prepayment assumption. Although OID will be reported to Senior
Noteholders based on the original prepayment assumption, no representation is
made to Senior Noteholders that Specified Leases will be prepaid at that rate or
at any other rate.
The holder of a Senior Note that has a fixed maturity date of not more than
one year from the issue date of that Senior Note (a "Short-Term Note") may be
subject to special rules. An accrual basis holder of a Short-Term Note, and some
cash method holders, including regulated investment companies, as set forth in
Section 1281 of the Code, generally would be required to report interest income
as interest accrues on a straight-line basis over the term of each interest
period. Other cash basis holders of a Short-Term Note would, in general, be
required to report interest income as interest is paid, or, if earlier, upon the
taxable disposition of the Short-Term Note. However, a cash basis holder of a
Short-Term Note reporting interest income as it is paid may be required to defer
a portion of any interest expense otherwise deductible on indebtedness incurred
to purchase or carry the Short-Term Note until the taxable disposition of the
Short-Term Note. A cash basis taxpayer may elect under Section 1281 of the Code
to accrue interest income on all nongovernment debt obligations with a term of
one year or less, in which case the taxpayer would include interest on the
Short-Term Note in income as it accrues, but would not be subject to the
interest expense deferral rule referred to in the preceding sentence. Some
special rules apply if a Short-Term Note is purchased for more or less than its
principal amount.
Market Discount. The Senior Notes, whether or not issued with OID, will be
subject to the "market discount rules" of Section 1276 of the Code. In general,
these rules provide that if the Senior Note Owner purchases a Senior Note, as
the case may be, at a market discount -- that is, a discount from its stated
redemption price at maturity, which is generally the stated principal
balance -- or if the related Senior Notes were issued with OID, its original
issue price, as adjusted for accrued original issue discount that exceeds a de
minimis amount specified in the Code, and thereafter (a) recognizes gain upon a
disposition, or (b) receives payments of principal, the lesser of (1) that gain
or principal payment or (2) the accrued market discount, will be taxed as
ordinary interest income. Generally, the accrued market discount will be the
total market discount on the related Senior Note multiplied by a fraction, the
numerator of which is the number of days the Senior Note Owner held that Senior
Note and the denominator of which is the number of days from the date the Senior
Note Owner acquired that Senior Note until its maturity date. The Senior Note
Owner of a Senior Note may elect, however, to determine accrued market discount
under the constant-yield method.
Limitations imposed by the Code which are intended to match deductions with
the taxation of income may defer deductions for interest on indebtedness
incurred or continued, or short-sale expenses incurred, to purchase or carry a
Senior Note with accrued market discount. A Senior Note Owner may elect to
include market discount in gross income as it accrues and, if that Senior Note
Owner makes such an election, is
98
<PAGE> 100
exempt from this rule. Any such election will apply to all debt instruments
acquired by the taxpayer on or after the first day of the first taxable year to
which that election applies. The adjusted basis of a Senior Note subject to that
election will be increased to reflect market discount included in gross income,
thereby reducing any gain or increasing any loss on a sale or taxable
disposition.
Total Accrual Election. A Senior Note Owner may elect to include in gross
income all interest that accrues on a Senior Note using the constant-yield
method described above under the heading "-- Original Issue Discount", with
modifications described below. For purposes of this election, interest includes
stated interest, acquisition discount, OID, de minimis OID, market discount, de
minimis market discount and unstated interest, as adjusted by any amortizable
bond premium (described below under "-- Amortizable Bond Premium") or
acquisition premium.
In applying the constant-yield method to a Senior Note with respect to
which this election has been made, the issue price of the Senior Note will equal
the electing Senior Note Owner's adjusted basis in the Senior Note immediately
after its acquisition, the issue date of the Senior Note will be the date of its
acquisition by the electing Senior Note Owner, and no payments on the Senior
Note will be treated as payments of qualified stated interest. This election
will generally apply only to the Senior Note with respect to which it is made
and may not be revoked without the consent of the IRS. Senior Note Owners should
consult with their own advisers as to the effect in their circumstances of
making this election.
Amortizable Bond Premium. In general, if a Senior Note Owner purchases a
Senior Note at a premium -- that is, an amount in excess of the amount payable
upon maturity -- that Senior Note Owner will be considered to have purchased
that Senior Note with "amortizable bond premium" equal to the amount of such
excess. That Senior Note Owner may elect to amortize that bond premium as an
offset to interest income and not as a separate deduction item as it accrues
under a constant-yield method over the remaining term of the Senior Note. That
Senior Note Owner's tax basis in the Senior Note will be reduced by the amount
of the amortized bond premium. Any such election shall apply to all debt
instruments, other than instruments the interest on which is excludible from
gross income, held by the Senior Note Owner at the beginning of the first
taxable year for which the election applies or thereafter acquired and is
irrevocable without the consent of the IRS. Bond premium on a Senior Note held
by a Senior Note Owner who does not elect to amortize the premium will decrease
the gain or increase the loss otherwise recognized on the disposition of the
Senior Note. The Treasury Regulations specifically exclude debt instruments that
are subject to Section 1272(a)(6) of the Code from the amortizable bond premium
rules contained in those regulations (see the discussion of Section 1272(a)(6)
in "-- Original Issue Discount" above).
Disposition of Senior Notes. A Senior Note Owner's adjusted tax basis in a
Senior Note will be its cost, increased by the amount of any OID, market
discount, acquisition discount and gain previously included in income with
respect to the Senior Note, and reduced by the amount of any payments on the
Senior Note that is not qualified stated interest and the amount of bond premium
previously amortized with respect to the Senior Note. A Senior Note Owner will
generally recognize gain or loss on the sale or retirement of a Senior Note
equal to the difference between the amount realized on the sale or retirement
and the tax basis of the Senior Note. Such gain or loss will be capital gain or
loss, except to the extent attributable to accrued but unpaid interest or as
described above under "-- Market Discount", and will be long-term capital gain
or loss if their Senior Note was held for more than one year. In addition, if
the Section 1272(a)(6) rules apply, any OID that has not accrued at the time of
payment in full of a Senior Note will be treated as ordinary income.
Subject to the OID and market discount rules discussed above and to the
one-year holding period requirement for long-term capital gain treatment, any
such gain or loss generally will be long-term capital gain or loss, provided the
Senior Note was held as a capital asset. The maximum federal income tax rate
applicable to capital gains and ordinary income for corporations is 35%. The
maximum ordinary federal income tax rate for individuals, estates and trusts is
39.6%, whereas the maximum long-term capital gains rate for such taxpayers is
20%. Under the Taxpayer Relief Act of 1997, the maximum rates on long-term
capital gains will be reduced further in the year 2001 and thereafter for some
individual taxpayers that meet specified conditions. Each prospective investor
should consult its tax advisor concerning these tax law changes.
99
<PAGE> 101
Information Reporting and Backup Withholding
The Indenture Trustee will be required to report annually to the IRS, and
to each Senior Noteholder, the amount of interest paid on the Senior Notes, and
the amount withheld for federal income taxes, if any, for each calendar year,
except as to exempt recipients -- generally, corporations, tax-exempt
organizations, qualified pension and profit-sharing trusts, individual
retirement accounts, or nonresident aliens who provide certification as to their
status. Each Senior Noteholder, other than Senior Noteholders who are not
subject to the reporting requirements, will be required to provide, under
penalty of perjury, a certificate containing the Senior Noteholder's name,
address, correct federal taxpayer identification number -- which would include a
social security number -- and a statement that the Senior Noteholder is not
subject to backup withholding. Should a non-exempt Senior Noteholder fail to
provide the required certification or should the IRS notify the Indenture
Trustee or the Trust that the Senior Noteholder has provided an incorrect
federal taxpayer identification number or is otherwise subject to backup
withholding, the Indenture Trustee will be required to withhold, or cause to be
withheld, 31% of the interest otherwise payable to the Senior Noteholder, and
remit the withheld amounts to the IRS as a credit against the Senior
Noteholder's federal income tax liability.
Tax Consequences to Foreign Investors
The following information describes the United States federal income tax
treatment of investors that are not U.S. persons (each, a "Foreign Person"). The
term "Foreign Person" means any person other than (a) a citizen or resident of
the United States that is a natural person, (b) a corporation or partnership for
federal income tax purposes organized in or under the laws of the United States
or any state thereof or the District of Columbia, other than a partnership that
is not treated as a "United States person" within the meaning of that term as it
is used in the Code or the Treasury Regulations, (c) an estate whose income is
subject to United States federal income tax regardless of its source of income,
or (d) a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust.
Notwithstanding the preceding sentence, to the extent provided in the Treasury
Regulations, certain trusts in existence on August 20, 1996, and treated as
United States persons under the Code and the Treasury Regulations prior to such
date, that elect to continue to be treated as United States persons under the
Code or the Treasury Regulations will not be Foreign Persons.
- Interest paid or accrued to a Foreign Person that is not effectively
connected with the conduct of a trade or business within the United
States by the Foreign Person, will generally be considered "portfolio
interest" and generally will not be subject to United States federal
income tax and withholding tax, as long as the Foreign Person (1) is not
actually or constructively a "10% percent shareholder" of the Trust or
Ryder, or a "controlled foreign corporation" with respect to which the
Trust or Ryder is a "related person" within the meaning of the Code, and
(2) provides an appropriate statement (Form W-8), signed under penalty of
perjury, certifying that the Senior Note Owner is a Foreign Person and
providing that Foreign Person's name and address. If the information
provided in this statement changes, the Foreign Person must so inform the
Indenture Trustee within 30 days of that change. The statement generally
must be provided in the year a payment occurs or in either of the two
preceding years. If the interest were not portfolio interest, then it
would be subject to United States federal income and withholding tax at a
rate of 30 percent unless reduced or eliminated pursuant to an applicable
income tax treaty.
- Any capital gain realized on the sale or other taxable disposition of a
Senior Note by a Foreign Person will be exempt from United States federal
income and withholding tax, provided that (1) the gain is not effectively
connected with the conduct of a trade or business in the United States by
the Foreign Person, and (2) in the case of an individual Foreign Person,
the Foreign Person is not present in the United States for 183 days or
more in the taxable year and some other requirements are met.
- If the interest, gain or income on a Senior Note held by a Foreign Person
is effectively connected with the conduct of a trade or business in the
United States by the Foreign Person, the Senior Note Owner (although
exempt from the withholding tax previously discussed if a duly executed
Form 4224 is
100
<PAGE> 102
furnished) generally will be subject to United States federal income tax
on the interest, gain or income at regular federal income tax rates. In
addition, if the Foreign Person is a foreign corporation, it may be
subject to a branch profits tax equal to 30 percent of its "effectively
connected earnings and profits" within the meaning of the Code for the
taxable year, as adjusted for certain items, unless it qualifies for a
lower rate under an applicable tax treaty.
Withholding Regulations
On October 6, 1997, the Treasury Department issued final regulations (the
"Withholding Regulations") which make some modifications to the withholding,
backup withholding and information reporting rules described above. The
Withholding Regulations attempt to unify certification requirements and modify
reliance standards. The Withholding Regulations will generally be effective for
payments made after December 31, 2000, subject to some transition rules.
Prospective investors are urged to consult their own tax advisors regarding the
effect of the Withholding Regulations on their purchase, ownership and
disposition of the Senior Notes.
Possible Alternative Treatment of the Senior Notes
Although, as described above, it is the opinion of Steel Hector & Davis LLP
that the Senior Notes will properly be characterized as debt for federal income
tax purposes, such opinion will not be binding on the IRS and thus no assurance
can be given that such a characterization shall prevail. If the IRS were to
contend successfully that the Senior Notes did not represent debt for federal
income tax purposes, certain adverse tax consequences to the Trust and the
holders of Senior Notes could result. For example, the Trust would likely be
considered a "publicly-traded partnership", and as a result treated for U.S. tax
purposes as an association taxed as a corporation. In addition, income to
certain tax-exempt entities (including pension funds) generally would be
"unrelated business taxable income", and income to foreign U.S. holder of Senior
Notes generally would be subject to U.S. withholding tax and reporting
requirements. While the Transferor strongly believes that any challenge by the
IRS, if made, would be unsuccessful, there can be no assurance of this result.
Prospective investors are advised to consult with their own tax advisors
regarding the federal income tax consequences of the purchase, ownership and
disposition of the Senior Notes.
DELAWARE AND FLORIDA TAX CONSEQUENCES
General
Set forth below is a summary of some state income tax consequences of the
purchase, ownership and disposition of the Senior Notes. This discussion is not
comprehensive and is based upon current law, administrative rulings, judicial
decisions and other applicable authorities in effect as of the date hereof, all
of which are subject to change, possibly with retroactive effect. There can be
no assurance that state income tax authorities will not challenge the
conclusions stated below, and no ruling from state income tax authorities has
been or will be sought on any of the issues discussed below. Because of the
variation in each state's income tax laws, it is impossible to predict tax
consequences to the holders of the Senior Notes in all states. Holders of the
Senior Notes are urged to consult their own tax advisors with respect to state
tax consequences arising out of the purchase, ownership and disposition of the
Senior Notes.
Delaware
The Transferor has been organized as a Delaware business trust. In the
opinion of Richards, Layton & Finger P.A., special Delaware counsel to the
Trust, assuming that the Senior Notes are treated as debt for federal income tax
purposes, the Senior Notes will be treated as debt for Delaware state income tax
purposes. Assuming further that none of the Origination Trust, the Transferor or
the Trust will be classified as an association, or a publicly traded
partnership, taxable as a corporation for federal income tax purposes, none of
the Origination Trust, the Transferor or the Trust will be subject to the
Delaware state income tax at the entity level. Further, in the opinion of
Richards, Layton & Finger P.A., Senior Note Owners not otherwise
101
<PAGE> 103
subject to taxation in Delaware would not become subject to taxation in Delaware
solely because of a Senior Note Owner's ownership of a Senior Note.
Florida
Ryder is organized under the laws of, and its headquarters is located in,
the State of Florida. The Florida Administrative Code includes a rule (the "Loan
Rule"), promulgated under the Florida Income Tax Code, which provides that a
financial organization earning or receiving interest from loans secured by
tangible property located in Florida will be deemed to be conducting business or
earning or receiving income in Florida, and will be subject to Florida corporate
income tax irrespective of the place of receipt of that interest. A "financial
organization" is defined to include any bank, trust company, savings bank,
industrial bank, land bank, safe deposit company, private bank, savings and loan
association, credit union, cooperative bank, small loan company, sales finance
company or investment company. If the Loan Rule were to apply to an investment
in the Senior Notes, then a financial organization investing in the Senior Notes
would be subject to Florida corporate income tax on a portion of its income at a
maximum rate of 5.5%, and would be required to file an income tax return in
Florida, even if it has no other Florida contacts. Steel Hector & Davis LLP,
special counsel to the Transferor, is of the opinion that, if the matter were
properly presented to a court having jurisdiction, and assuming interpretation
of relevant law on a basis consistent with existing authority, that court would
hold that the Loan Rule would not apply to an investment in the Senior Notes or
the receipt of interest thereon by a financial organization with no other
Florida contacts. Consequently, prospective investors are urged to consult their
own tax advisers as to the applicability of Florida taxation to their
investments in the Senior Notes and to their ability to offset any such Florida
tax against any other state tax liabilities that such investors might have.
On the Closing Date, Steel Hector & Davis LLP will also render an opinion
that (i) the Trust will not be classified as an association taxable as a
corporation for Florida income tax purposes and (ii) the Senior Notes will be
treated as debt for Florida income tax law, and (iii) Senior Note Owners not
otherwise subject to taxation in Florida would not become subject to Florida
income taxation solely because of a Senior Note Owner's ownership of a Senior
Note.
Miscellaneous
In the event that any state or locality imposes a tax on the Origination
Trust, the Transferor or the Trust at the entity level, the UTI Beneficiaries
have agreed to indemnify the holders of the SUBIs for the full amount of such
taxes. If the UTI Beneficiaries should fail to fulfill their respective
indemnification obligations, amounts otherwise distributable to them as holders
of the UTI will be used to satisfy these indemnification obligations. However,
it is possible that the Senior Noteholders could incur a loss on their
investment in the event the UTI Beneficiaries did not have sufficient assets
available, including distributions on the UTI, to satisfy these state or local
tax liabilities.
THE FEDERAL AND STATE TAX DISCUSSIONS SET FORTH ABOVE DO NOT PURPORT TO
ADDRESS THE APPLICABILITY OF STATE TAX LAWS OTHER THAN THE TREATMENT OF THE
TRUST AND THE SENIOR NOTE OWNERS UNDER THE LAWS OF FLORIDA AND DELAWARE AND MAY
NOT BE APPLICABLE DEPENDING UPON A SENIOR NOTE OWNER'S PARTICULAR TAX SITUATION.
PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE SENIOR
NOTES, INCLUDING THE TAX CONSEQUENCES UNDER FEDERAL, STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
General
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
imposes some restrictions on employee benefit or other plans subject to ERISA or
Section 4975 of the Code ("Plans") and on persons who are parties in interest or
disqualified persons (collectively, "Parties in Interest") with respect to those
Plans, that could affect purchases of the Senior Notes by or on behalf of Plans.
Some employee
102
<PAGE> 104
benefit plans, such as governmental plans and church plans, if no election has
been made under Section 410(d) of the Code, are not subject to the requirements
of ERISA or Section 4975 of the Code and assets of those plans may be invested
in Senior Notes without regard to the ERISA considerations described below,
subject to the provisions of other applicable federal and state law, including,
for any government or church plan qualified under Section 401(a) of the Code and
exempt from taxation under Section 501(a) of the Code, the prohibited
transaction rules set forth in Section 503 of the Code.
Investments by most Plans are subject to ERISA's general fiduciary
requirements, including the requirement of investment prudence and
diversification, requirements respecting delegation of investment authority and
the requirement that a Plan's investment be made in accordance with the
documents governing the Plan.
Prohibited Transactions
Some transactions involving the Trust might be deemed to constitute or give
rise to prohibited transactions under ERISA and Section 4975 of the Code if
assets of the Trust were deemed to be assets of a Plan. Under a regulation
issued by the United States Department of Labor (the "Plan Assets Regulation"),
the assets of the Trust would be treated as plan assets of a Plan for purposes
of ERISA and the Code only if the Plan acquires an "equity interest" in the
Trust and none of the exceptions contained in the Plan Assets Regulation is
applicable. An equity interest is defined under the Plan Assets Regulation as an
interest in an entity other than an instrument which is treated as indebtedness
under applicable local law and which has no substantial equity features.
Although there is no guidance under ERISA on how this definition applies
generally, or in particular to a security like the Senior Notes, the Transferor
believes that the Senior Notes should be treated as indebtedness without
substantial equity features for purposes of the Plan Assets Regulation. However,
without regard to whether the Senior Notes are treated as an equity interest for
such purposes, the acquisition or holding of Senior Notes by or on behalf of a
Plan could be considered to give rise to a prohibited transaction if the Trust,
a Trustee, any Certificateholder, or any of their affiliates, is or becomes a
Party in Interest with respect to that Plan. In that case, some exemptions from
the prohibited transaction rules could be applicable, depending on the type and
circumstances of the Plan fiduciary making the decision to acquire a Senior
Note. Included among these exemptions are: Prohibited Transaction Class
Exemption ("PTCE") 90-1, which exempts some transactions involving insurance
company pooled separate accounts, PTCE 95-60, which exempts some transactions
involving insurance company general accounts, PTCE 91-38, which exempts some
transactions involving bank collective investment funds, PTCE 96-23, which
exempts some transactions effected on behalf of a Plan by an "in-house asset
manager", and PTCE 84-14, which exempts some transactions effected on behalf of
a Plan by a "qualified professional asset manager".
A Plan fiduciary considering the purchase of Senior Notes should consult
its tax and/or legal advisors regarding whether the assets of the Trust would be
considered plan assets, the possibility of exemptive relief from the prohibited
transaction rules and other issues and their potential consequences. Acceptance
of subscriptions for Senior Notes on behalf of plans is in no respect a
representation by the Transferor, the Trust, Ryder or any other party that this
investment meets all relevant legal requirements with respect to investments by
any particular plan or that such investment is appropriate for any particular
plan. Each plan fiduciary should consult with its attorneys and financial
advisors as to the propriety of an investment in light of the circumstances of
the particular plan and the restrictions of ERISA and Section 4975 of the Code.
Each purchaser or transferee of a Senior Note, by its acceptance of that
Senior Note, will be deemed to have represented that (A) such transferee is not,
and will not acquire the Senior Note on behalf or with the assets of, any
"employee benefit plan" as defined in Section 3(3) of ERISA or any other "plan"
as defined in Section 4975(e)(1) of the Code, or (B) the transferee's
acquisition and holding of the Senior Note is covered by PTCE 84-14, PTCE 90-1,
PTCE 91-38, PTCE 95-60, PTCE 96-23 or a similar exemption.
103
<PAGE> 105
RATINGS OF THE SENIOR NOTES
The Senior Notes will be issued only if the Class A-1 Notes are rated in
the highest short-term rating category and the other Senior Notes are rated in
the highest long-term category by each Rating Agency. The ratings of the Senior
Notes will be based primarily upon the value of the Specified Leases, the
Reserve Fund, the Residual Value Surplus Account and the terms of the
Subordinated Notes and the Certificates. There can be no assurance that any such
rating will not be lowered or withdrawn by the assigning Rating Agency if, in
its judgment, circumstances so warrant. In the event that a rating with respect
to the Senior Notes is qualified, reduced or withdrawn, no person or entity will
be obligated to provide any additional credit enhancement with respect to the
Senior Notes.
The ratings of the Senior Notes should be evaluated independently from
similar ratings on other types of securities. A rating is not a recommendation
to buy, sell or hold the Senior Notes, inasmuch as such a rating does not
comment as to market price or suitability for a particular investor. The ratings
of the Senior Notes address the likelihood of the payment of principal of and
interest on the Senior Notes pursuant to their terms.
There can be no assurance as to whether any agency other than the assigning
Rating Agency will rate the Senior Notes or, if one does, what rating will be
assigned by such other rating agency. A rating on the Senior Notes by another
rating agency, if assigned at all, may be lower than the ratings assigned to the
Senior Notes by the assigning Rating Agency.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
relating to the Senior Notes (the "Underwriting Agreement"), the Transferor has
agreed to sell to the underwriters named below (the "Underwriters"), for whom
Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting as representative
(the "Representative"), and the Underwriters have agreed to purchase, severally
but not jointly, the following principal amounts of the Senior Notes.
<TABLE>
<CAPTION>
CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4 CLASS A-5
UNDERWRITER SENIOR NOTES SENIOR NOTES SENIOR NOTES SENIOR NOTES SENIOR NOTES
----------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated .................
First Union Securities, Inc. .............
Salomon Smith Barney Inc. ................
----------- ----------- ----------- ----------- -----------
Total............................ $28,000,000 $63,000,000 $54,000,000 $53,000,000 $84,900,000
=========== =========== =========== =========== ===========
</TABLE>
The Underwriting Agreement provides, subject to conditions precedent, that
the Underwriters will be obligated to purchase all the Senior Notes if any are
purchased. The Underwriting Agreement provides that if there is an event of
default by an Underwriter, in some circumstances the purchase commitments of the
non-defaulting Underwriters may be increased or the Underwriting Agreement may
be terminated. The Underwriters have agreed to reimburse the Transferor for some
of its expenses incurred in connection with the offering of the Senior Notes.
The Transferor has been advised by the Representative that the Underwriters
propose initially to offer the Senior Notes to the public at the respective
offering prices set forth on the cover hereof and to certain dealers at such
prices less a selling concession not to exceed the percentage of the principal
amount of the Senior Notes set forth below, and that the Underwriters may allow
and such dealers may reallow a reallowance discount not to exceed the percentage
of the principal amount of the Senior Notes set forth below.
<TABLE>
<CAPTION>
REALLOWANCE
CLASS OF SENIOR NOTES SELLING CONCESSION DISCOUNT
- --------------------- ------------------ --------------------
<S> <C> <C>
Class A-1........................................... % %
Class A-2........................................... % %
Class A-3........................................... % %
Class A-4........................................... % %
Class A-5........................................... % %
</TABLE>
104
<PAGE> 106
The Transferor and Ryder have jointly and severally agreed to indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act of 1933, or contribute to payments which the Underwriters may be
required to make in respect thereof.
Upon receipt of a request by an investor who has received an electronic
Prospectus from the Transferor, its affiliates or an Underwriter, or of a
request by such investor's representative, within the period during which there
is an obligation to deliver a Prospectus, the Transferor or the Underwriters
will promptly deliver, or cause to be delivered, without charge, a paper copy of
the Prospectus.
Until the distribution of the Senior Notes is completed, the rules of the
SEC may limit the ability of the Underwriters and certain selling group members
to bid for and purchase Senior Notes. As an exception to these rules, the
Underwriters are permitted to engage in certain transactions that stabilize the
price of the Senior Notes. Such transactions may consist of bids and purchases
for the purpose of pegging, fixing or maintaining the price of such classes of
Senior Notes.
Neither the Transferor nor the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the prices of the Senior Notes. In addition, neither
the Transferor nor the Underwriters makes any representation that the
Underwriters will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.
The Transferor has been advised by the Underwriters that they presently
intend to make a market in the Senior Notes; however, they are not obligated to
do so, any market-making may be discontinued at any time, and there can be no
assurance that an active public market for the Senior Notes will develop.
LEGAL MATTERS
Steel Hector & Davis LLP, Miami, Florida, will pass on the legality of the
Senior Notes for the Transferor. The Transferor is also being advised on various
other legal matters, including federal income tax matters relating to the Senior
Notes, by Steel Hector & Davis LLP. Richards, Layton & Finger P.A., Wilmington,
Delaware, will act as Delaware counsel to the Transferor. Various legal matters
with respect to insolvency issues relating to the Senior Notes will be passed
upon for the Transferor by Brown & Wood LLP, San Francisco, California. Brown &
Wood LLP will act as counsel for the Underwriters. Brown & Wood LLP has rendered
services to the Transferor and its affiliates in connection with the
establishment of the Origination Trust and in some matters not related to the
Senior Notes offered by this prospectus.
EXPERTS
The balance sheets of Ryder Truck Rental LT as of December 31, 1998 and
1997 and the related statements of operations, changes in trust equity and cash
flows for the year ended December 31, 1998 and period from July 23, 1997 (date
of inception) through December 31, 1997 have been included in this prospectus
and in the registration statement in reliance upon the report of KPMG LLP,
independent certified public accountants, appearing elsewhere in this
prospectus, and upon the authority of that firm as experts in accounting and
auditing.
The balance sheet of Ryder Vehicle Lease Trust 1999-A as of September 9,
1999 has been included in this prospectus and in the registration statement in
reliance upon the report of KPMG LLP, independent certified public accountants,
appearing elsewhere in this prospectus, and upon the authority of that firm as
experts in accounting and auditing.
AVAILABLE INFORMATION
The Transferor, as originator of the Trust, Ryder Funding LP, as originator
of the Origination Trust, the Origination Trust, as issuer of the SUBIs, and the
Trust, as issuer of the Notes, have filed with the SEC a Registration Statement
on Form S-1 (together with all amendment and exhibits thereto, the "Registration
105
<PAGE> 107
Statement"), of which this prospectus is a part, under the Securities Act of
1933, with respect to the Senior Notes being offered by this prospectus. This
prospectus does not contain all of the information set forth in the Registration
Statement, some parts of which have been omitted in accordance with the rules
and regulations of the SEC. For further information, reference is made to the
Registration Statement, which is available for inspection without charge at the
public reference facilities of the SEC at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and the regional offices of the SEC at Suite 1400,
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661-2511 and Suite
1300, Seven World Trade Center, New York, New York 10048. Copies of such
information can be obtained from the Public Reference Section of the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The SEC
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the SEC at
http://www.sec.gov. The Administrative Agent, on behalf of the Trust, will also
file or cause to be filed with the SEC such periodic reports as are required
under the Exchange Act, and the rules and regulations of the SEC thereunder.
106
<PAGE> 108
INDEX OF PRINCIPAL TERMS
Set forth below is a list of capitalized terms used in this Offering
Circular and the pages on which the definitions of those terms may be found.
<TABLE>
<CAPTION>
Term Page
- ---- ----
<S> <C>
1999-A SUBI..................................... 15
Accrual Period.................................. 48
Administration Agreement........................ 19
Administration Fee.............................. 80
Administrative Agent............................ 19
Administrative Agent Defaults................... 81
Administrator................................... 17
Advance......................................... 78
Aggregate Cutoff Date Securitization Value...... 38
Annual Termination Option....................... 27
Available Funds................................. 55
Available Funds Shortfall Amount................ 55
Available Principal Distribution Amount......... 49
Bankruptcy Code................................. 88
Basic Documents................................. 48
Business Day.................................... 48
Casualty Proceeds............................... 77
Casualty Termination Lease...................... 50
Cede............................................ 47
Cedelbank....................................... 51
Cedelbank Participants.......................... 51
Certificate Balance............................. 49
Certificate Distribution Account................ 63
Certificate Rate................................ 60
Certificates.................................... 16
Closing Date.................................... 16
Code............................................ 95
Collection Period............................... 54
Collections..................................... 74
Conditional Prepayment Rate..................... 44
Contingent and Excess Liability Insurance....... 64
Cooperative..................................... 53
CPR............................................. 44
Cutoff Date..................................... 22
Cutoff Date Securitization Value................ 32
Daily Advance Reimbursements.................... 78
Default Termination Lease....................... 50
Defaulted Vehicle............................... 75
Definitive Notes................................ 48
Deposit Date.................................... 62
Depositaries.................................... 51
Determination Date.............................. 54
Disposition Expenses............................ 75
Distribution Accounts........................... 63
DTC............................................. 47
ERISA........................................... 102
Euroclear....................................... 51
Euroclear Operator.............................. 53
Euroclear Participants.......................... 51
Excess Amounts.................................. 55
Exchange Act.................................... 36
Expired Vehicle................................. 75
Final Payment Date.............................. 43
Financial Component............................. 29
Financial Component Advances.................... 78
Fixed Charge.................................... 29
Foreign Person.................................. 100
</TABLE>
<TABLE>
<CAPTION>
Term Page
- ---- ----
<S> <C>
Full Financial Component Advance................ 78
Indenture....................................... 16
Indenture Default............................... 64
Indenture Trustee............................... 16
Indirect Participants........................... 51
Initial Certificate Balance..................... 16
Initial Deposit................................. 62
Initial Securities Balance...................... 57
Initial Senior Note Balance..................... 16
Initial Subordinated Note Balance............... 16
Insolvency Laws................................. 88
Insurance Casualty Proceeds..................... 77
Insurance Proceeds.............................. 77
Insured Vehicles................................ 25
Interest Rate................................... 48
IRS............................................. 96
Issuer SUBI Certificate Transfer Agreement...... 22
Lease........................................... 24
Lease Default................................... 37
Lease SUBI...................................... 15
Lease SUBI Assets............................... 21
Lease SUBI Certificate.......................... 16
Lease Term...................................... 25
Leases.......................................... 19
Loan Rule....................................... 102
Loss............................................ 73
Maintenance Provider............................ 19
Maturity Date................................... 24
Monthly Period.................................. 80
Monthly Remittance Condition.................... 74
Net Book Value.................................. 32
Non-Petition Parties............................ 87
Note Distribution Account....................... 63
Note Factor..................................... 47
Notes........................................... 16
Obligor......................................... 18
Obligor Vehicles................................ 75
OID............................................. 97
Optimal Principal Distributable Amount.......... 50
Optional Purchase............................... 57
Optional Purchase Price......................... 57
Origination Trust............................... 15
Origination Trust Agreement..................... 19
Origination Trust Assets........................ 19
Origination Trustee............................. 19
Other SUBI...................................... 15
Other SUBI Assets............................... 71
Other SUBI Certificates......................... 19
Other SUBI Supplement........................... 71
Owner Trustee................................... 17
Partial Financial Component Advance............. 78
Partial Financial Component Payment............. 75
Participants.................................... 51
Parties in Interest............................. 102
Payment Date.................................... 48
Payment Date Advance Reimbursement.............. 56
Permitted Investments........................... 64
</TABLE>
107
<PAGE> 109
<TABLE>
<CAPTION>
Term Page
- ---- ----
<S> <C>
Plan Assets Regulation.......................... 103
Plans........................................... 102
Principal Carryover Shortfall................... 49
Principal Distribution Amount................... 49
Program Operating Lease......................... 16
Program Operating Lease Default................. 59
Program Operating Lease Payments................ 59
Program Operating Lease Termination Date........ 59
PTCE............................................ 103
Quarterly Principal Distributable Amount........ 49
Rating Agency................................... 16
Reallocation Payment............................ 42
Record Date..................................... 48
Redemption Price................................ 57
Registration Statement.......................... 105
Representative.................................. 104
Required Deposit Rating......................... 63
Reserve Fund.................................... 61
Reserve Fund Draw Amount........................ 62
Reserve Fund Requirement........................ 62
Residual Value.................................. 32
Residual Value Losses........................... 76
Residual Value Surplus.......................... 76
Residual Value Surplus Account.................. 62
Residual Value Surplus Draw Amount.............. 62
Retained Administration Payment................. 61
Retained Certificate Distribution Amount........ 55
Retained SUBI Certificate....................... 22
Retained SUBI Interest.......................... 16
RTR I LLC....................................... 19
RTR I LP........................................ 15
RTR II LLC...................................... 19
RTR II LP....................................... 15
RTR III LLC..................................... 23
Ryder........................................... 15
Ryder System.................................... 23
Sales Proceeds.................................. 76
Sales Proceeds Advance.......................... 78
Salvage Casualty Proceeds....................... 77
Schedule A...................................... 24
Securities...................................... 16
Securities Balance.............................. 49
Securitization Rate............................. 32
Securitization Value............................ 32
Securityholders................................. 16
Senior Note Balance............................. 49
Senior Note Distribution Amount................. 57
Senior Note Owner............................... 50
Senior Noteholders.............................. 48
</TABLE>
<TABLE>
<CAPTION>
Term Page
- ---- ----
<S> <C>
Senior Notes.................................... 16
Short-Term Note................................. 98
Special Event Purchase.......................... 77
Specified Leases................................ 15
Specified Vehicles.............................. 15
SUBI............................................ 15
SUBI Assets..................................... 15
SUBI Certificate Transfer Agreement............. 22
SUBI Certificates............................... 16
SUBI Collection Account......................... 61
SUBI Interest................................... 16
SUBI Supplement................................. 21
SUBI Trust Agreement............................ 21
Subordinated Note Balance....................... 49
Subordinated Note Rate.......................... 60
Subordinated Noteholder......................... 62
Subordinated Notes.............................. 16
Substitute Vehicle.............................. 25
Taxes........................................... 27
Termination Proceeds............................ 76
Termination Value............................... 28
Termination Value Payment....................... 28
Terms and Conditions............................ 54
Titling Grace Period............................ 21
Titling Grace Period Vehicles................... 93
TLSA............................................ 24
Total Monthly Payment........................... 29
Transferor...................................... 16
Transferor Certificate.......................... 17
Treasury Regulations............................ 96
Trust........................................... 16
Trust Administration Agreement.................. 17
Trust Agent..................................... 19
Trust Agreement................................. 16
Trust Estate.................................... 18
U.S. Bank....................................... 19
UCC............................................. 51
Underwriters.................................... 104
Underwriting Agreement.......................... 104
UTI............................................. 15
UTI Assets...................................... 71
UTI Beneficiaries............................... 15
UTI Certificates................................ 19
Vehicle SUBI.................................... 15
Vehicle SUBI Assets............................. 18
Vehicle SUBI Certificate........................ 16
Vehicles........................................ 19
Withholding Regulations......................... 101
</TABLE>
108
<PAGE> 110
Ryder Vehicle Lease Trust 1999-A
and Ryder Truck Rental LT
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report for Ryder Vehicle Lease Trust
1999-A...................................................... F-2
Ryder Vehicle Lease Trust 1999-A Balance Sheet.............. F-3
Ryder Vehicle Lease Trust 1999-A Notes to Balance Sheet..... F-4
Independent Auditors' Report for Ryder Truck Rental LT...... F-5
Ryder Truck Rental LT Balance Sheet......................... F-6
Ryder Truck Rental LT Statement of Operations............... F-7
Ryder Truck Rental LT Statement of Changes in Trust
Equity.................................................... F-8
Ryder Truck Rental LT Statement of Cash Flows............... F-9
Ryder Truck Rental LT Notes to Financial Statements......... F-10
</TABLE>
F-1
<PAGE> 111
Independent Auditors' Report
Chase Manhattan Bank Delaware,
as Owner Trustee for
Ryder Vehicle Lease Trust 1999-A:
We have audited the accompanying balance sheet of Ryder Vehicle Lease Trust
1999-A as of September 9, 1999. This financial statement is the responsibility
of the Trust's management. Our responsibility is to express an opinion on this
financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit of a balance sheet includes examining, on a test basis,
evidence supporting the amounts and disclosures in that balance sheet. An audit
of a balance sheet also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
balance sheet presentation. We believe that our audit of the balance sheet
provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Ryder Vehicle Lease Trust 1999-A as
of September 9, 1999 in conformity with generally accepted accounting
principles.
KPMG LLP
Miami, Florida
September 9, 1999
F-2
<PAGE> 112
Ryder Vehicle Lease Trust 1999-A
Balance Sheet
September 9, 1999
<TABLE>
<S> <C>
ASSETS
Cash...................................................... $1,000
------
Total assets.............................................. $1,000
======
LIABILITIES & TRUST EQUITY
Contributed Capital....................................... $1,000
------
Total liabilities and trust equity........................ $1,000
======
</TABLE>
See accompanying notes to balance sheet.
F-3
<PAGE> 113
Ryder Vehicle Lease Trust 1999-A
Notes To Balance Sheet
September 9, 1999
(1) ORGANIZATION
Ryder Vehicle Lease Trust 1999-A (the "Trust"), a Delaware business trust,
was formed on June 21, 1999. The purpose and responsibilities of the Trust are
described in the Amended and Restated Trust Agreement among Ryder Funding LP and
Chase Manhattan Bank Delaware, as owner trustee.
The Trust is organized under Chapter 38 of the Delaware Business Trust Act.
The purpose of the Trust is to conserve Trust assets and collect and disburse
the periodic income from such assets. In order to achieve this purpose the Trust
will a) issue securities, b) acquire a special unit of beneficial interest
("SUBI") in Ryder Truck Rental LT, c) collect payments on the lease of the SUBI,
d) make payments on the securities, e) enter into and perform obligations to
which it is a party, and f) engage in other transactions necessary, incidental
to or connected with any of the foregoing activities.
Ryder Truck Rental LT (the "Origination Trust") was created by Ryder Truck
Rental, Inc. ("RTR") and acts as a custodian nominee holder of vehicle titles to
facilitate transfers of ownership of vehicles in connection with
securitizations. The Origination Trust reduces costs associated with
securitizations by eliminating the time and expense of re-titling vehicles upon
transfer of ownership of the vehicles to an issuer trust in a securitization.
RTR purchases vehicles that are nominally titled in the name of the Origination
Trust. The Origination Trust is a passive entity that is acting as a custodian
and serving as a nominee holder of record title to vehicles, with beneficial
ownership and use of the vehicles being vested in the holders of beneficial
interests in the trust. The initial beneficial interest in the Origination Trust
is held by entities which are wholly owned by RTR. Such beneficial ownership
interest in the vehicles is evidenced by ownership of 100% of the undivided
trust interest ("UTI") in the assets titled in the name of the Origination Trust
by RTR.
From time to time, and in connection with securitization transactions, the
owners of the UTI certificates will direct the Origination Trust to remove
certain vehicles from the UTI and transfer beneficial ownership of those
vehicles to a special unit of beneficial interest (a vehicle SUBI).
Concurrently, RTR will contribute the related commercial lease contracts to the
Origination Trust and direct the Origination Trust to transfer beneficial
ownership of those lease contracts to a special unit of beneficial interest (a
lease SUBI). A vehicle SUBI and lease SUBI represent the beneficial ownership
interest transferred to an issuer trust in a securitization,
The Trust will use the proceeds from the issuance and sale of senior notes
and other securities to purchase a vehicle SUBI. Payment of the senior notes
will be secured by the vehicle SUBI and a security interest in lease contracts
through the lease SUBI.
When the senior notes and other securities are issued, the Trust and Ryder
Funding LP (the "Transferor") will enter into a program operating lease, under
which the Transferor will make payments on the program operating lease in an
amount generally equal to certain financial component and termination value
payments made on or for the specified lease contracts and specified vehicles.
The Trust will apply these collected payments to pay interest on and
principal of the senior notes and other securities in accordance with their
terms. Payments of interest and principal on the senior notes and other
securities will be largely dependent upon receipt of payments on the program
operating lease, which is dependent upon payments on the underlying lease
contracts.
On September 9, 1999 Ryder Funding LP contributed $1,000 for the initial
undivided trust interests.
(2) INCOME TAXES
Neither the Trust nor any sub-trust constitutes a separate entity for
Federal income tax purposes or for state income or franchise purposes.
Accordingly, no taxes are provided for, as trust income is passed through to the
beneficiaries of the Trust.
F-4
<PAGE> 114
Independent Auditors' Report
RTRT Inc.,
as Trustee of
Ryder Truck Rental LT:
We have audited the accompanying balance sheets of Ryder Truck Rental LT as
of December 31, 1998 and 1997, and the related statements of operations, changes
in trust equity and cash flows for the year ended December 31, 1998 and for the
period from July 23, 1997 (date of inception) through December 31, 1997. These
financial statements are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Ryder Truck Rental LT as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
for the year ended December 31, 1998 and for the period from inception through
December 31, 1997 in conformity with generally accepted accounting principles.
KPMG LLP
Miami, Florida
September 9, 1999
F-5
<PAGE> 115
Ryder Truck Rental LT
Balance Sheets
June 30, 1999 (unaudited) and
December 31, 1998 and 1997
<TABLE>
<CAPTION>
December 31,
June 30, ---------------
1999 1998 1997
----------- ------ ------
(unaudited)
<S> <C> <C> <C>
ASSETS
Cash...................................................... $76,176 75,055 75,000
------- ------ ------
Total assets.............................................. $76,176 75,055 75,000
======= ====== ======
LIABILITIES & TRUST EQUITY
Trust Equity.............................................. $76,176 75,055 75,000
------- ------ ------
Total liabilities and trust equity........................ $76,176 75,055 75,000
======= ====== ======
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE> 116
Ryder Truck Rental LT
Statements of Operations
Six months ended June 30, 1999 (unaudited),
Year ended December 31, 1998 and
Period from July 23, 1997 (date of inception) through December 31, 1997
<TABLE>
<CAPTION>
Six Months
ended Year Ended Inception to
June 30, December 31, December 31,
1999 1998 1997
-------------- ------------ ------------
(unaudited)
<S> <C> <C> <C>
REVENUE:
Interest income....................................... $1,121 55 0
------ --- ---
Total revenue......................................... 1,121 55 0
------ --- ---
EXPENSES:
Total expenses........................................ 0 0 0
------ --- ---
Net income............................................ $1,121 55 0
====== === ===
</TABLE>
See accompanying notes to financial statements.
F-7
<PAGE> 117
Ryder Truck Rental LT
Statements of Changes in Trust Equity
Six Months Ended June 30, 1999
(unaudited), Year ended December 31, 1998
and period from July 23, 1997 (date of inception) through December 31, 1997
<TABLE>
<CAPTION>
Capital Retained Trust
Contributions Earnings Equity
------------- -------- ------
<S> <C> <C> <C>
Inception -- July 23, 1997.................................. $ -- -- --
Capital contributions....................................... 75,000 -- 75,000
Net income.................................................. -- -- --
------- ----- ------
Balance at December 31, 1997................................ 75,000 -- 75,000
Net income.................................................. -- 55 55
------- ----- ------
Balance at December 31, 1998................................ 75,000 55 75,055
Net income (unaudited)...................................... -- 1,121 1,121
------- ----- ------
Balance at June 30, 1999
(unaudited)............................................... $75,000 1,176 76,176
======= ===== ======
</TABLE>
See accompanying notes to financial statements.
F-8
<PAGE> 118
Ryder Truck Rental LT
Statements of Cash Flows
Six Months Ended June 30, 1999 (unaudited),
Year ended December 31, 1998 and
Period from July 23, 1997 (date of inception) through December 31, 1997
<TABLE>
<CAPTION>
Six Months Year Ended Inception to
Ended June 30, December 31, December 31,
1999 1998 1997
-------------- ------------ ------------
(unaudited)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES --
Net income............................................ $ 1,121 55 --
------- ------ ------
Net cash provided by operating activities............. 1,121 55 --
------- ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES --
Payment of note receivable............................ -- -- 75,000
------- ------ ------
Net cash provided by financing activities............. -- -- 75,000
------- ------ ------
Net increase in cash.................................. 1,121 55 75,000
CASH AT BEGINNING OF PERIOD............................. 75,055 75,000 0
------- ------ ------
CASH AT END OF PERIOD................................... $76,176 75,055 75,000
======= ====== ======
NON-CASH FINANCING ACTIVITIES --
</TABLE>
During the period ended December 31, 1997, an initial capital contribution of
$75,000 was recorded in exchange for a non-interest bearing note receivable.
See accompanying notes to financial statements.
F-9
<PAGE> 119
Ryder Truck Rental LT
Notes To Financial Statements
December 31, 1998 and 1997
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Ryder Truck Rental LT (the "Origination Trust"), a Delaware business trust,
was formed on July 24, 1997. The purpose and responsibilities of the Origination
Trust are described in the Amended and Restated Trust Agreement among RTR I L.P.
and RTR II L.P., each of which is a Delaware limited partnership, as
beneficiaries, RTRT, Inc., a Delaware corporation, as trustee, Delaware Trust
Capital Management, Inc. and U.S. Bank National Association as trust agent. The
grantors of the Origination Trust are affiliates of Ryder Truck Rental, Inc.
("RTR").
The Origination Trust was created by RTR and acts as a custodian nominee
holder of vehicle titles to facilitate transfers of ownership of vehicles in
connection with securitizations. The Origination Trust reduces costs associated
with securitizations by eliminating the time and expense of retitling vehicles
upon transfer of ownership of the vehicles to an issuer trust in a
securitization. RTR purchases vehicles that are nominally titled in the name of
the Origination Trust. The Origination Trust is a passive entity that is acting
as a custodian and serving as a nominee holder of record title to vehicles, with
beneficial ownership and use of the vehicles being vested in the holders of
beneficial interests in the trust. The initial beneficial interest in the
Origination Trust is held by entities which are wholly owned by RTR. Such
beneficial ownership interest in the vehicles is evidenced by ownership of 100%
of the undivided trust interest ("UTI") in the assets titled in the name of the
Origination Trust by RTR.
From time to time, and in connection with securitization transactions, the
owners of the UTI certificates will direct the Origination Trust to remove
certain vehicles from the UTI and transfer beneficial ownership of those
vehicles to a special unit of beneficial interest (a vehicle SUBI).
Concurrently, RTR will contribute the related commercial lease contracts to the
Origination Trust and direct the Origination Trust to transfer beneficial
ownership of those lease contracts to a special unit of beneficial interest (a
lease SUBI). The vehicle SUBI and lease SUBI represent the beneficial ownership
interest transferred to an issuer trust in a securitization.
RTR funds the initial purchase of the vehicles and records the vehicles as
assets on its balance sheet. The Origination Trust does not provide any
consideration to RTR when titles to the vehicles are transferred to it other
than a beneficial interest in the assets for which title has been transferred,
and accordingly such vehicles are not recorded as assets on the balance sheet of
the Origination Trust.
As of December 31, 1998 the Origination Trust held title to 6,530 vehicles,
of which 2,239 have been transferred to a vehicle SUBI.
In order to allow the Origination Trust to meet certain state licensing
requirements, the grantors of the Origination Trust contributed $75,000 to the
trust pursuant to a capital contribution agreement. The agreement provides that
such capital shall be permanent and refundable only in the event of the
liquidation of the Origination Trust.
(2) INCOME TAXES
Neither the Origination Trust nor any sub-trust constitutes a separate
entity for Federal income tax purposes or for state income or franchise
purposes. Accordingly, no taxes are provided on trust income as it is passed
through to the Origination Trust beneficiaries.
F-10
<PAGE> 120
ANNEX I
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in some limited circumstances, the globally offered Senior Notes
(the "Global Securities") will be available only in book-entry form. Investors
in the Global Securities may hold such Global Securities through any of DTC,
Cedelbank or Euroclear. The Global Securities will be tradeable as home market
instruments in both the European and U.S. domestic markets. Initial settlement
and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities
through Cedelbank and Euroclear will be conducted in the ordinary way in
accordance with their normal rules and operating procedures and in accordance
with conventional eurobond practice, including seven calendar day settlement.
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.
Secondary cross-market trading between Cedelbank or Euroclear and DTC
Participants holding Senior Notes will be effected on a delivery-against-payment
basis through the respective Depositaries of Cedelbank and Euroclear, in that
capacity, and as DTC Participants.
Non-U.S. holders, as described below, of Global Securities will be subject
to U.S. withholding taxes unless such holders meet certain requirements and
deliver appropriate U.S. tax documents to the securities clearing organizations
or their participants.
Initial Settlement
All Global Securities will be held in book-entry form by DTC in the name of
Cede, as nominee of DTC. Investors' interests in the Global Securities will be
represented through financial institutions acting on their behalf as direct and
indirect Participants in DTC. As a result, Cedelbank and Euroclear will hold
positions on behalf of their participants through their respective Depositaries,
which in turn will hold such positions in accounts as DTC Participants.
Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to U.S. corporate debt obligations. Investor
securities custody accounts will be credited with their holdings against payment
in same-day funds on the settlement date.
Investors electing to hold their Global Securities through Cedelbank or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to the
securities custody accounts on the settlement date against payment in the
same-day funds.
Secondary Market Trading
Since the purchaser determines the place of delivery, it is important to
establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
Trading Between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to U.S. corporate
debt obligations in same-day funds.
Trading Between Cedelbank and/or Euroclear Participants. Secondary market
trading between Cedelbank Participants or Euroclear Participants will be settled
using the procedures applicable to conventional eurobonds in same-day funds.
Trading Between DTC Seller and Cedelbank or Euroclear Purchaser. When
Global Securities are to be transferred from the account of a DTC Participant to
the account of a Cedelbank Participant or a Euroclear Participant, the purchaser
will send instructions to Cedelbank or Euroclear through a Cedelbank Participant
A-1
<PAGE> 121
or Euroclear Participant at least one business day prior to settlement.
Cedelbank or Euroclear will instruct the respective Depositary, as the case may
be, to receive the Global Securities against payment. Payment will include
interest accrued on the Global Securities from and including the last coupon
payment date to and excluding the settlement date, on the basis of actual days
elapsed and a 360-day year. Payment will then be made by the respective
Depositary to the DTC Participant's account against delivery of the Global
Securities. After settlement has been completed, the Global Securities will be
credited to the respective clearing system and by the clearing system, in
accordance with its usual procedures, to the Cedelbank Participant's or
Euroclear Participant's account. The Global Securities credit will appear the
next day, European time, and the cash debit will be back-valued to, and the
interest on the Global Securities will accrue from, the value date -- which
would be the preceding day when settlement occurred in New York. If settlement
is not completed on the intended value date, i.e., the trade fails, the
Cedelbank or Euroclear cash debit will be valued instead as of the actual
settlement date.
Cedelbank Participants and Euroclear Participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to preposition
funds for settlement, either from cash on hand or existing lines of credit, as
they would for any settlement occurring within Cedelbank or Euroclear. Under
this approach, they may take on credit exposure to Cedelbank or Euroclear until
the Global Securities are credited to their accounts one day later.
As an alternative, if Cedelbank or Euroclear has extended a line of credit
to them, Cedelbank Participants or Euroclear Participants can elect not to
pre-position funds and allow that credit line to be drawn upon to finance the
settlement. Under this procedure, Cedelbank Participants or Euroclear
Participants purchasing Global Securities would incur overdraft charges for one
day, assuming they cleared the overdraft when the Global Securities were
credited to their accounts. However, interest on the Global Securities would
accrue from the value date. Therefore, in many cases the investment income on
the Global Securities earned during that one-day period may substantially reduce
or offset the amount of such overdraft charges, although this result will depend
on each Cedelbank Participant's or Euroclear Participant's particular cost of
funds.
Since the settlement is taking place during New York business hours, DTC
Participants can employ their usual procedures for sending Global Securities to
the respective Depositary for the benefit of Cedelbank Participants or Euroclear
Participants. The sale proceeds will be available to the DTC seller on the
settlement date. Thus, to the DTC Participant a cross-market transaction will
settle no differently than a trade between two DTC Participants.
Trading Between Cedelbank or Euroclear Seller and DTC Purchaser. Due to
time zone differences in their favor, Cedelbank Participants and Euroclear
Participants may employ their customary procedures for transactions in which
Global Securities are to be transferred by the respective clearing systems,
through the respective Depositaries, to a DTC Participant. The seller will send
instructions to Cedelbank or Euroclear through a Cedelbank Participant or
Euroclear Participant at least one business day prior to settlement. In these
cases, Cedelbank or Euroclear will instruct the respective Depositaries, as
appropriate, to deliver the Global Securities to the DTC Participant's account
against payment. Payment will include interest accrued on the Global Securities
from and including the last coupon payment date to and excluding the settlement
date on the basis of actual days elapsed and a 360-day year. The payment will
then be reflected in the account of the Cedelbank Participant or Euroclear
Participant the following day, and receipt of the cash proceeds in the Cedelbank
Participant's or Euroclear Participant's account would be back-valued to the
value date -- which would be the preceding day, when settlement occurred in New
York. Should the Cedelbank Participant or Euroclear Participant have a line of
credit with its respective clearing system and elect to be in debt in
anticipation of receipt of the sale proceeds in its account, the back-valuation
will extinguish any overdraft charges incurred over that one-day period. If
settlement is not completed on the intended value date, i.e., the trade fails,
receipt of the cash proceeds in the Cedelbank Participant's or Euroclear
Participant's account would instead be value as of the actual settlement date.
Finally, day traders that use Cedelbank or Euroclear and that purchase
Global Securities from DTC Participants for delivery to Cedelbank Participants
or Euroclear Participants should note that these trades
A-2
<PAGE> 122
would automatically fail on the sale side unless affirmative action were taken.
At least three techniques should be readily available to eliminate this
potential problem:
- borrowing through Cedelbank or Euroclear for one day -- until the
purchase side of the day trade is reflected in their Cedelbank or
Euroclear accounts -- in accordance with the clearing system's customary
procedures;
- borrowing the Global Securities in the U.S. from a DTC Participant no
later than one day prior to settlement, which would give the Global
Securities sufficient time to be reflected in their Cedelbank or
Euroclear account in order to settle the sale side of the trade; or
- staggering the value dates for the buy and sell sides of the trade so
that the value date for the purchase from the DTC Participant is at least
one day prior to the value date for the sale to the Cedelbank Participant
or Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding through Cedelbank or
Euroclear, or through DTC if the holder has an address outside the U.S., will be
subject to the 30% U.S. withholding tax that generally applies to payments of
interest, including original issue discount, on registered debt issued by U.S.
Persons, unless:
- each clearing system, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business in
the chain of intermediaries between that beneficial owner and the U.S.
entity required to withhold tax complies with applicable certification
requirements, and
- that beneficial owner takes one of the following steps to obtain an
exemption or reduced tax rate.
Exemption for Non-U.S. Persons -- Form W-8. Beneficial owners of Global
Securities that are non-U.S. Persons can obtain a complete exemption from the
withholding tax by filing a signed Certificate of Foreign Status on Form W-8. If
the information shown on Form W-8 or the Tax Certificate changes, a new Form W-8
or Tax Certificate, as the case may be, must be filed within 30 days of that
change.
Exemption for Non-U.S. Person with Effectively Connected Income -- Form
4224. A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States, can obtain an exemption from the
withholding tax by filing a certificate of Exemption from Withholding of Tax on
Income Effectively Connected with the Conduct of a Trade or Business in the
United States on Form 4224.
Exemption or Reduced Rate for Non-U.S. Persons Resident in Treaty
Countries -- Form 1001. Non-U.S. Persons that are beneficial owners of Global
Securities residing in a country that has a tax treaty with the United States
can obtain an exemption or reduced tax rate, depending on the treaty terms, by
filing an Ownership, Exemption or Reduced Rate Certificate on Form 1001. If the
treaty provides only for a reduced rate, withholding tax will be imposed at that
rate unless the filer alternatively files Form W-8. Form 1001 may be filed by
the Senior Note Owner or his agent.
Exemption for U.S. Persons -- Form W-9. U.S. Persons can obtain a complete
exemption from the withholding tax by filing a Payer's Request for Taxpayer
Identification Number and Certification on Form W-9.
U.S. Federal Income Tax Reporting Procedure. The beneficial owner of a
Global Security or, in the case of a Form 1001 or a Form 4224 filer, his agent,
files by submitting the appropriate form to the person through whom it holds --
the clearing agency, in the case of persons holding directly on the books of the
clearing agency. Form W-8 and form 1001 are effective for three calendar years
and Form 4224 is effective for one calendar year.
A-3
<PAGE> 123
The term "U.S. Person" means:
- a citizen or resident of the United States,
- a corporation, partnership or other entity organized in or under the laws
of the United States or any state or political subdivision thereof (other
than a partnership that is not treated as a United States person under
any applicable Treasury regulations),
- an estate whose income is subject to United States federal income tax,
regardless of its source, or
- a trust whose administration is subject to the primary supervision of a
United States court and which has one or more United States persons who
have authority to control all substantial decisions of the trust.
Notwithstanding the preceding sentence, to the extent provided in regulations,
some trusts in existence on August 20, 1996 and treated as United States persons
prior to such date that elect to continue to be so treated also shall be
considered U.S. Persons.
This summary does not deal with all aspects of U.S. Federal income tax
withholding that may be relevant to foreign holders of the Global Securities.
Investors are advised to consult their own tax advisors for specific tax advice
concerning their holding and disposing of the Global Securities.
A-4
<PAGE> 124
$282,900,000
(RYDER LOGO)
RYDER VEHICLE LEASE TRUST 1999-A
RYDER FUNDING L.P.
Transferor
RYDER TRUCK RENTAL, INC.
Administrative Agent
ASSET BACKED SENIOR NOTES:
$28,000,000 ___ % CLASS A-1 NOTES
$63,000,000 ___ % CLASS A-2 NOTES
$54,000,000 ___ % CLASS A-3 NOTES
$53,000,000 ___ % CLASS A-4 NOTES
$84,900,000 ___ % CLASS A-5 NOTES
-------------------------
PROSPECTUS
-------------------------
MERRILL LYNCH & CO.
FIRST UNION SECURITIES, INC.
SALOMON SMITH BARNEY
You should rely only the information contained in this prospectus. We have not
authorized anyone to provide you with different information.
We are not offering the Senior Notes in any state where the offer is not
permitted.
<PAGE> 125
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses in connection with the offering of the Senior Notes being
registered hereby are estimated as follows:
<TABLE>
<S> <C>
SEC registration fee........................................ $ 78,646
Legal fees and expenses..................................... 450,000
Accounting fees and expenses................................ 120,000
Rating agency fees.......................................... 200,000
Trustee's fees and expenses................................. 50,000
Printing.................................................... 150,000
Miscellaneous............................................... 5,000
----------
Total............................................. $1,053,646
==========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 17-108 of the Delaware Revised Uniform Limited Partnership Act
provides that, subject to such standards and restrictions, if any, as are set
forth in its partnership agreement, a limited partnership may and shall have the
power to, indemnify and hold harmless any partner or other person from and
against any and all claims and demands whatsoever.
Pursuant to Section 5.08 of the Agreement of Limited Partnership of Ryder
Funding LP (the "Transferor"), the Transferor will, to the fullest extent
permitted by law, indemnify its general partner, Ryder Truck Rental III LLC, and
its directors, officers, agents and employees acting within the scope of their
authority (the "Indemnified Parties") from and against any loss, expense damage,
liability or injury suffered or sustained by them by reason of any acts,
omissions or alleged acts or omissions arising out of any of such Indemnified
Party's activities on behalf of the Transferor or in furtherance of the interest
of the Transferor, provided that the acts, omissions, or alleged acts or
omissions upon which such actual or threatened action is based were not made or
omitted fraudulently or in bad faith or constituted willful misconduct or gross
negligence by such Indemnified Party.
Pursuant to Section 5.08 of the Agreement of Limited Partnership of Ryder
Truck Rental I LP ("RTR I LP"), the Transferor will, to the fullest extent
permitted by law, indemnify its general partner, Ryder Truck Rental I LLC, and
its directors, officers, agents and employees acting within the scope of their
authority (the "RTR I LP Indemnified Parties") from and against any loss,
expense damage, liability or injury suffered or sustained by them by reason of
any acts, omissions or alleged acts or omissions arising out of any of such RTR
I LP Indemnified Party's activities on behalf of RTR I LP or in furtherance of
the interest of RTR I LP, provided that the acts, omissions, or alleged acts or
omissions upon which such actual or threatened action is based were not made or
omitted fraudulently or in bad faith or constituted willful misconduct or gross
negligence by such RTR I LP Indemnified Party.
Pursuant to Section 5.08 of the Agreement of Limited Partnership of Ryder
Truck Rental II LP ("RTR II LP"), the Transferor will, to the fullest extent
permitted by law, indemnify its general partner, Ryder Truck Rental II LLC, and
its directors, officers, agents and employees acting within the scope of their
authority (the "RTR II LP Indemnified Parties") from and against any loss,
expense damage, liability or injury suffered or sustained by them by reason of
any acts, omissions or alleged acts or omissions arising out of any of such RTR
II LP Indemnified Party's activities on behalf of RTR II LP or in furtherance of
the interest of RTR II LP, provided that the acts, omissions, or alleged acts or
omissions upon which such actual or threatened action is based were not made or
omitted fraudulently or in bad faith or constituted willful misconduct or gross
negligence by such RTR II LP Indemnified Party.
II-1
<PAGE> 126
Reference is also made to Section 6 of the Underwriting Agreement among the
Transferor, RTR, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and the other underwriters named therein (see Exhibit 1.1), which
provides for indemnification by the Transferor in certain circumstances.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Not applicable.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
a. Exhibits:
<TABLE>
<C> <C> <S>
1.1 -- Form of Underwriting Agreement**
3.1 -- Certificate of Formation of Ryder Truck Rental III LLC**
3.2 -- Amended and Restated Limited Liability Company Agreement of
Ryder Truck Rental III LLC dated as of October 1, 1999
between Ryder Truck Rental, Inc. and RTR Leasing II,
Inc.**
3.3 -- Ryder Funding LP Amended and Restated Limited Partnership
Agreement dated as of October 1, 1999, between Ryder Truck
Rental, Inc. and Ryder Truck Rental III LLC**
3.4 -- Certificate of Formation of Ryder Truck Rental I LLC**
3.5 -- Amended and Restated Limited Liability Company Agreement of
Ryder Truck Rental I LLC dated as of October 1, 1999
between Ryder Truck Rental, Inc. and RTR Leasing I, Inc.**
3.6 -- Ryder Truck Rental I LP Amended and Restated Limited
Partnership Agreement dated as of October 1, 1999, between
Ryder Truck Rental, Inc. and Ryder Truck Rental I LLC**
4.1 -- Form of Indenture between Ryder Vehicle Lease Trust 1999-A
and U.S. Bank National Association, as Indenture Trustee
(including forms of Senior Notes)**
5.1 -- Opinion of Steel Hector & Davis LLP with respect to
legality**
8.1 -- Opinion of Steel Hector & Davis LLP with respect to federal
income tax matters**
8.2 -- Opinion of Steel Hector & Davis LLP with respect to Florida
income tax matters**
10.1 -- Second Amended and Restated Trust Agreement among Ryder
Truck Rental I LP, Ryder Truck Rental II LP, Ryder Truck
Rental, Inc., Delaware Trust Capital Management, Inc.,
RTRT, Inc. and U.S. Bank National Association, dated as of
February 1, 1998*
10.2 -- Form of Supplement 1999-A to Second Amended and Restated
Trust Agreement among Ryder Truck Rental I LP, Ryder Truck
Rental II LP, Ryder Truck Rental, Inc., Delaware Trust
Capital Management, Inc., RTRT, Inc. and U.S. Bank
National Association (including form of the SUBI
Certificates)*
10.3 -- Administration Agreement between RTRT, Inc. and Ryder Truck
Rental, Inc., dated as of February 1, 1998*
10.4 -- Form of Supplement 1999-A to Administration Agreement
between RTRT, Inc. and Ryder Truck Rental, Inc.**
10.5 -- Form of SUBI Certificate Transfer Agreement between Ryder
Truck Rental I LP and Ryder Funding LP*
10.6 -- Form of Issuer SUBI Certificate Transfer Agreement between
Ryder Funding LP and Ryder Vehicle Lease Trust 1999-A*
10.7 -- Form of Amended and Restated Trust Agreement between Ryder
Funding LP and Chase Manhattan Bank Delaware, as Owner
Trustee*
10.8 -- Form of Program Operating Lease between Ryder Vehicle Lease
Trust 1999-A and Ryder Funding LP*
23.1 -- Consent of Steel Hector & Davis LLP (included in Exhibits
5.1, 8.1 and 8.2)
23.2 -- Consent of Brown & Wood LLP**
</TABLE>
II-2
<PAGE> 127
<TABLE>
<C> <C> <S>
23.3 -- Consent of Richards, Layton & Finger, P.A.**
23.4 -- Consent of KPMG LLP**
24.1 -- Power of Attorney*
25.1 -- Statement of Eligibility and Qualification of the Indenture
Trustee on Form T-1**
</TABLE>
- ---------------
* Previously filed.
** Filed herewith.
b. Financial Statement Schedules:
Not applicable.
ITEM 17. UNDERTAKINGS.
Each undersigned Registrant hereby undertakes as follows:
(a) To provide to the Underwriters at the closing date specified in the
Underwriting Agreement certificates in such denominations and registered in such
names as required by the Underwriters to provide 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, 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 payment by the Registrant
of expenses incurred or paid by a director, officer or controlling person of
such 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 will be deemed to be part of this registration statement as of the
time it was declared effective.
(d) For purposes of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus will be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time will be deemed to be the initial bona
fide offering thereof.
II-3
<PAGE> 128
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 3 to the Registration Statement on Form S-1
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Miami and State of Florida, on the 2nd day of November, 1999.
RYDER FUNDING LP, a Delaware limited
partnership
By: RYDER TRUCK RENTAL III LLC, a
Delaware limited liability
company, its general partner
By: RTR LEASING II, INC., a Delaware
corporation, its manager
By: /s/ JAMES B. GRIFFIN
------------------------------------
James B. Griffin
President
II-4
<PAGE> 129
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 3 to the Registration Statement on Form S-1
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Miami and State of Florida, on the 2nd day of November, 1999.
RYDER TRUCK RENTAL I LP, a Delaware
limited
partnership
By: RYDER TRUCK RENTAL I LLC, a
Delaware
limited liability company, its
general partner
By: RTR LEASING I, INC., a Delaware
corporation, its manager
By: /s/ JAMES B. GRIFFIN
------------------------------------
James B. Griffin
President
II-5
<PAGE> 130
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 3 to the Registration Statement on Form S-1
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Miami and State of Florida, on the 2nd day of November, 1999.
RYDER TRUCK RENTAL LT, a Delaware
business
trust
By: RYDER TRUCK RENTAL, INC., a
Florida
corporation, its administrative
agent
By: /s/ JAMES B. GRIFFIN
------------------------------------
James B. Griffin
President
II-6
<PAGE> 131
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 3 to the Registration Statement on Form S-1
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Miami and State of Florida, on the 2nd day of November, 1999.
RYDER VEHICLE LEASE TRUST 1999-A, a
Delaware trust
By: RYDER FUNDING LP, a Delaware
limited
partnership, solely as originator
of
Ryder Vehicle Lease Trust 1999-A
By: RYDER TRUCK RENTAL III LLC, a
Delaware limited liability
company, its general partner
By: RTR LEASING II, INC., a Delaware
corporation, its manager
By: /s/ JAMES B. GRIFFIN
------------------------------------
James B. Griffin
President
II-7
<PAGE> 132
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 to the Registration Statement on Form S-1 has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JAMES B. GRIFFIN Director and President of the November 2, 1999
- ------------------------------------------------ Manager of the General Partner
James B. Griffin of RYDER TRUCK RENTAL I LP,
RYDER TRUCK RENTAL II LP and
RYDER FUNDING LP (Principal
Executive Officer)
George P. Scanlon* Vice President & Controller of November 2, 1999
- ------------------------------------------------ the Manager of the General
George P. Scanlon Partner of RYDER TRUCK RENTAL I
LP, RYDER TRUCK RENTAL II LP and
RYDER FUNDING LP
(Principal Financial and
Accounting Officer)
M. Anthony Burns* Director of the Manager of the November 2, 1999
- ------------------------------------------------ General Partner of RYDER TRUCK
M. Anthony Burns RENTAL I LP, RYDER TRUCK RENTAL
II LP and RYDER FUNDING LP
Edwin A. Huston* Director of the Manager of the November 2, 1999
- ------------------------------------------------ General Partner of RYDER TRUCK
Edwin A. Huston RENTAL I LP, RYDER TRUCK RENTAL
II LP and RYDER FUNDING LP
John M. Beeson Jr.* Director of the Manager of the November 2, 1999
- ------------------------------------------------ General Partner of RYDER TRUCK
John M. Beeson Jr. RENTAL I LP, RYDER TRUCK RENTAL
II LP and RYDER FUNDING LP
Michael J. Blake* Director of the Manager of the November 2, 1999
- ------------------------------------------------ General Partner of RYDER TRUCK
Michael J. Blake RENTAL I LP, RYDER TRUCK RENTAL
II LP and RYDER FUNDING LP
*By: /s/ W. DANIEL SUSIK
-----------------------------------------
W. Daniel Susik
Attorney-in-fact
</TABLE>
II-8
<PAGE> 133
EXHIBIT INDEX
<TABLE>
<C> <C> <S>
1.1 -- Form of Underwriting Agreement**
3.1 -- Certificate of Formation of Ryder Truck Rental III LLC**
3.2 -- Amended and Restated Limited Liability Company Agreement of
Ryder Truck Rental III LLC dated as of October 1, 1999
between Ryder Truck Rental, Inc. and RTR Leasing II,
Inc.**
3.3 -- Ryder Funding LP Amended and Restated Limited Partnership
Agreement dated as of October 1, 1999, between Ryder Truck
Rental, Inc. and Ryder Truck Rental III LLC**
3.4 -- Certificate of Formation of Ryder Truck Rental I LLC**
3.5 -- Amended and Restated Limited Liability Company Agreement of
Ryder Truck Rental I LLC dated as of October 1, 1999
between Ryder Truck Rental, Inc. and RTR Leasing I, Inc.**
3.6 -- Ryder Truck Rental I LP Amended and Restated Limited
Partnership Agreement dated as of October 1, 1999, between
Ryder Truck Rental, Inc. and Ryder Truck Rental I LLC**
4.1 -- Form of Indenture between Ryder Vehicle Lease Trust 1999-A
and U.S. Bank National Association, as Indenture Trustee
(including forms of Senior Notes)**
5.1 -- Opinion of Steel Hector & Davis LLP with respect to
legality**
8.1 -- Opinion of Steel Hector & Davis LLP with respect to federal
income tax matters**
8.2 -- Opinion of Steel Hector & Davis LLP with respect to Florida
income tax matters**
10.1 -- Second Amended and Restated Trust Agreement among Ryder
Truck Rental I LP, Ryder Truck Rental II LP, Ryder Truck
Rental, Inc., Delaware Trust Capital Management, Inc.,
RTRT, Inc. and U.S. Bank National Association, dated as of
February 1, 1998*
10.2 -- Form of Supplement 1999-A to Second Amended and Restated
Trust Agreement among Ryder Truck Rental I LP, Ryder Truck
Rental II LP, Ryder Truck Rental, Inc., Delaware Trust
Capital Management, Inc., RTRT, Inc. and U.S. Bank
National Association (including form of the SUBI
Certificates)*
10.3 -- Administration Agreement between RTRT, Inc. and Ryder Truck
Rental, Inc., dated as of February 1, 1998*
10.4 -- Form of Supplement 1999-A to Administration Agreement
between RTRT, Inc. and Ryder Truck Rental, Inc.**
10.5 -- Form of SUBI Certificate Transfer Agreement between Ryder
Truck Rental I LP and Ryder Funding LP*
10.6 -- Form of Issuer SUBI Certificate Transfer Agreement between
Ryder Funding LP and Ryder Vehicle Lease Trust 1999-A*
10.7 -- Form of Amended and Restated Trust Agreement between Ryder
Funding LP and Chase Manhattan Bank Delaware, as Owner
Trustee*
10.8 -- Form of Program Operating Lease between Ryder Vehicle Lease
Trust 1999-A and Ryder Funding LP*
23.1 -- Consent of Steel Hector & Davis LLP (included in Exhibits
5.1, 8.1 and 8.2)
23.2 -- Consent of Brown & Wood LLP**
23.3 -- Consent of Richards, Layton & Finger, P.A.**
23.4 -- Consent of KPMG LLP**
24.1 -- Power of Attorney*
25.1 -- Statement of Eligibility and Qualification of the Indenture
Trustee on Form T-1**
</TABLE>
- ---------------
* Previously filed.
** Filed herewith.
II-9
<PAGE> 1
Exhibit 1.1
RYDER VEHICLE LEASE TRUST 1999-A
$38,000,000
___% Asset Backed Notes, Class A-1
$58,000,000
___% Asset Backed Notes, Class A-2
$58,000,000
___% Asset Backed Notes, Class A-3
$52,000,000
___% Asset Backed Notes, Class A-4
$84,900,000
___% Asset Backed Notes, Class A-5
UNDERWRITING AGREEMENT
November __, 1999
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
As Representative of the
Several Underwriters
World Financial Center
North Tower
New York, New York 10281-1201
Dear Sirs:
Ryder Funding LP, a Delaware limited partnership (the "Transferor"),
and Ryder Truck Rental, Inc., a Florida corporation ("Ryder"), hereby confirm
their respective agreements with Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch") and each of the other underwriters
named in Schedule A hereto (collectively, the "Underwriters", which term shall
also include any underwriter substituted as hereinafter provided in Section 10),
for whom Merrill Lynch is acting as representative (in such capacity, the
"Representative"), with respect to the sale by the Transferor and the purchase
by the Underwriters, acting severally and not jointly, of the respective
principal amounts set forth in Schedule A of $30,000,000 aggregate principal
amount of ___% Asset Backed Senior Notes, Class A-1 (the "Class A-1 Senior
Notes"), $58,000,000 aggregate principal amount of ___% Asset Backed Senior
Notes, Class A-2 (the "Class A-2 Senior Notes"), $58,000,000 aggregate principal
amount of ___% Asset Backed Senior Notes, Class A-3 (the "Class A-3 Senior
Notes"), $52,000,000 aggregate principal amount of ___% Asset Backed Senior
Notes, Class A-4 (the "Class A-4 Senior Notes") and $84,900,000 aggregate
principal amount of ___% Asset Backed Senior Notes, Class A-5 (the
<PAGE> 2
"Class A-5 Senior Notes", and together with the Class A-1 Senior Notes, the
Class A-2 Senior Notes, the Class A-3 Senior Notes and the Class A-4 Senior
Notes, the "Senior Notes") of the Ryder Vehicle Lease Trust 1999-A (the "Trust")
under the terms and conditions contained herein. The Transferor was formed
pursuant to a partnership agreement, dated April 23, 1998 (the "Transferor
Partnership Agreement"), between Ryder Truck Rental III LLC ("RTR III LLC"), a
Delaware limited liability company, as general partner (the "Transferor General
Partner") and Ryder, as the sole limited partner (in such capacity, the
"Transferor Limited Partner").
Simultaneously with the issuance of the Senior Notes, the Transferor
will cause the Trust to issue $13,023,237.85 aggregate principal amount of ____%
Asset Backed Subordinated Notes (the "Subordinated Notes", and together with the
Senior Notes, the "Notes") and $10,858,575 aggregate principal amount of ___%
Asset Backed Certificates (the "Certificates", and together with the Notes, the
"Securities"). The Senior Notes will be issued pursuant to an indenture to be
dated as of October 1, 1999 (the "Indenture") between the Trust and U.S. Bank
National Association ("U.S. Bank"), as trustee (the "Indenture Trustee"). The
Subordinated Notes and the Certificates will be issued pursuant to an amended
and restated trust agreement, dated as of October 1, 1999 (the "Trust
Agreement"), between the Transferor and Chase Manhattan Bank Delaware, as
trustee (the "Trustee"). Each Note will represent an obligation of, and each
Certificate will represent an undivided interest in, the Trust. The Transferor
will own the Subordinated Notes, as well as a certificate (the "Transferor
Certificate") with a principal amount equal to approximately 1% of the initial
Certificate principal balance. The Subordinated Notes will be subordinated to
the Senior Notes and the Certificates will be subordinated to the Subordinated
Notes, in each case to the extent described in the Trust Agreement.
Pursuant to an amended and restated trust agreement, dated as of
February 1, 1998 (the "Origination Trust Agreement"), among Ryder Truck Rental I
LP ("RTR I LP") and Ryder Truck Rental II LP, each a Delaware limited
partnership ("RTR II LP", and together with RTR I LP, the "UTI Beneficiaries"),
as initial grantors and initial beneficiaries, Ryder, as administrative agent
(in such capacity, the "Administrative Agent"), RTRT, Inc., a Delaware
corporation, as trustee (the "Origination Trustee"), Delaware Trust Capital
Management, Inc., a Delaware banking corporation, as Delaware trustee, and U.S.
Bank, as trust agent (in such capacity, the "Trust Agent"), Ryder Truck Rental
LT, a Delaware business trust (the "Origination Trust"), was created to take
assignments and conveyances of and hold in trust various leases, vehicles and
certain related assets (collectively, the "Trust Assets"). RTR I LP was formed
pursuant to a partnership agreement, dated June 1, 1997 (the "RTR I Partnership
Agreement", and together with the Transferor Partnership Agreement, the
"Partnership Agreements"), between Ryder Truck Rental I LLC ("RTR I LLC"), a
Delaware limited liability company, as general partner (the "RTR General
Partner"), and Ryder, as sole limited partner (in such capacity, the "RTR
Limited Partner"). Pursuant to an amended and restated contribution and lease
agreement, dated as of February 1, 1998 (the "Contribution Leaseback
Agreement"), between the Origination Trust, as lessor, and Ryder, as lessee,
from time to time, Ryder will contribute and transfer to the Origination Trust
certain trucks, tractors and trailers, together with all accessories, parts and
additions constituting a part thereof and all accessions thereto (collectively,
the "Vehicles").
Pursuant to a supplement of the Origination Trust Agreement, dated as
of October 1, 1999 (the "SUBI Supplement", and together with the Origination
Trust Agreement, the "SUBI
2
<PAGE> 3
Trust Agreement"), among the parties to the Origination Trust Agreement, the
Origination Trustee will be directed by the UTI Beneficiaries to establish two
special units of beneficial interest to be known as the "1999-A Lease SUBI" and
the "1999-A Vehicle SUBI" (each, a "1999-A SUBI"). Pursuant to a lease
contribution agreement, dated as of October 1, 1999 (the "Lease Contribution
Agreement"), between the Origination Trust and Ryder, Ryder will contribute and
transfer to the Origination Trust the truck service and lease agreements (the
"1999-A Leases") relating to certain specified Vehicles (the "1999-A Vehicles").
The Origination Trustee will allocate a portfolio consisting of the 1999-A
Leases and certain other related assets to the 1999-A Lease SUBI, and a
portfolio consisting of the 1999-A Vehicles and certain other related assets to
the 1999-A Vehicle SUBI (collectively, the "SUBI Assets"). The Trust Assets
(including the SUBI Assets) will be serviced by the Administrative Agent
pursuant to an administration agreement, dated as of February 1, 1998, as
supplemented by a supplement, dated as of October 1, 1999 (collectively, the
"Administration Agreement"), in each case among the Origination Trust, RTR I LP,
RTR II LP and the Administrative Agent.
In connection with the creation of the 1999-A Lease SUBI, the
Origination Trust will issue to RTR I LP a certificate (the "99% Lease SUBI
Certificate") representing a 99% beneficial interest in the 1999-A Lease SUBI
and a certificate (the "99% Vehicle SUBI Certificate", and together with the 99%
Lease SUBI Certificate, the "99% SUBI Certificates") representing a 99%
beneficial interest in the 1999-A Vehicle SUBI. In addition, the Origination
Trust will issue to RTR II LP a certificate (the "1% Lease SUBI Certificate")
representing a 1% beneficial interest in the 1999-A Lease SUBI and a certificate
(the "1% Vehicle SUBI Certificate", and together with the 1% Lease SUBI
Certificate and the 99% SUBI Certificates, the "SUBI Certificates") representing
a 1% beneficial interest in the 1999-A Vehicle SUBI. Pursuant to a SUBI
certificate transfer agreement, dated as of October 1, 1999 (the "SUBI
Certificate Transfer Agreement "), between the Transferor and RTR I LP, RTR I LP
will sell the 99% Vehicle SUBI Certificate and the 99% Lease SUBI Certificate to
the Transferor. Pursuant to a SUBI certificate transfer agreement, dated as of
October 1, 1999 (the "Issuer SUBI Certificate Transfer Agreement"), between the
Transferor and the Trust, the Transferor will sell the 99% Vehicle SUBI
Certificate to the Trust.
Pursuant to a program operating lease, dated as of October 1, 1999 (the
"Program Operating Lease"), between the Trust, as program lessor, and the
Transferor, as program lessee, the Trust will lease the 99% Vehicle SUBI
Certificate, subject to the lien of the Indenture, to the Transferor in exchange
for the obligation of the Transferor to make certain payments during the period
that each 1999-A Vehicle is subject to the Program Operating Lease. To secure
payment by the Transferor under the Program Operating Lease, the Transferor will
grant a security interest to the Trust in all of its right, title and interest
in and to the 99% Lease SUBI Certificate. The Trust in turn, will pledge its
interest in the 99% Lease SUBI Certificate and payments under the Program
Operating Lease to the Indenture Trustee to secure payment on the Senior Notes.
The Trust will apply payments received from the Transferor under the Program
Operating Lease to pay interest on and principal of the Securities in accordance
with their respective terms.
The Indenture, the Trust Agreement, the Contribution Leaseback
Agreement, the Lease Contribution Agreement, the SUBI Trust Agreement, the SUBI
Certificate Transfer Agreement, the Administration Agreement, the Issuer SUBI
Certificate Transfer Agreement, the Program Operating Lease, a backup security
agreement, dated as of October 1, 1999 (the "Backup
3
<PAGE> 4
Security Agreement"), among Ryder, the Origination Trust, RTR I LP, the
Transferor, the Trust and the Indenture Trustee, a control agreement, dated as
of October 1, 1999 (the "Control Agreement"), among the Transferor, the Trust,
as initial secured party, and U.S. Bank, as assignee-secured party and
securities intermediary (in such capacity, the "Securities Intermediary") and an
issuer administration agreement dated as of October 1, 1999 (the "Issuer
Administration Agreement"), among the Transferor, the Trust, the Indenture
Trustee, and Ryder, as administrator, are referred to herein collectively as the
"Basic Documents". Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the SUBI Trust Agreement or the
Indenture, as the case may be.
The Transferor and Ryder understand that the Underwriters propose to
make a public offering of the Senior Notes as soon as the Representative deems
advisable after this Agreement has been executed and delivered and the Indenture
has been qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act"). The Certificates, other than the Transferor Certificate, are being
offered privately and are being purchased pursuant to a purchase agreement,
dated on or about the date hereof (the "Purchase Agreement"), among the
Transferor, Ryder and Merrill Lynch as the initial purchaser.
The Transferor has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (No. 333-81455) covering
the registration of the Senior Notes under the Securities Act of 1933, as
amended (the "1933 Act"), including the related preliminary prospectus or
prospectuses. Promptly after execution and delivery of this Agreement, the
Transferor will prepare and file a prospectus in accordance with the provisions
of Rule 430A ("Rule 430A") of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations. The information included in the prospectus
that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective pursuant to paragraph (b) of Rule 430A is referred to
as the "Rule 430A Information". Each prospectus used before such registration
statement became effective, and any prospectus that omitted the Rule 430A
Information that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a "preliminary prospectus".
Such registration statement, including the exhibits thereto at the time it
became effective and including the Rule 430A Information is herein called the
"Registration Statement". The final prospectus in the form first furnished to
the Underwriters for use in connection with the offering of the Senior Notes is
herein called the "Prospectus". For purposes of this Agreement, all references
to the Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, a preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which are contained in
the Registration Statement, a preliminary prospectus or the Prospectus, as the
case may be.
4
<PAGE> 5
All references to the terms "material" or "material adverse effect" or
"material adverse change" in this Agreement that refer to Ryder or the
Transferor or their respective Affiliates (as defined below), or any of them,
shall be interpreted in proportion to the business of the Ryder Group (as
defined below) as a whole, and not in proportion to the business of Ryder or the
Transferor or such Affiliate(s) individually. When used in this Agreement, the
term "Affiliate" or "Affiliates" shall have the meaning assigned by Rule 501(b)
under the 1933 Act.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE TRANSFEROR AND RYDER. Each of
the Transferor and Ryder jointly and severally represents and warrants to each
of the Underwriters as of the date hereof and as of the Closing Time referred to
in Section 2(b) and agrees with the each Underwriter as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The
Registration Statement has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act (or, if issued, such order has been
lifted) and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Transferor or Ryder, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement and any
post-effective amendments thereto became effective and at the Closing
Time, the Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the 1939
Act and the rules and regulations of the Commission under the 1939 Act
(the "1939 Act Regulations") and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement
was issued and at the Closing Time, included or will include an untrue
statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or
Prospectus (or amendments or supplements thereto) made in reliance upon
and in conformity with information furnished to the Transferor or Ryder
in writing by any Underwriter through Merrill Lynch expressly for use
in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, and the Prospectus filed pursuant to Rule 424(b)
under the 1933 Act, complied when so filed in all material respects
with the 1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with the
offering was identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
5
<PAGE> 6
(ii) FINANCIAL STATEMENTS. The financial statements of Ryder
System, Inc. and its consolidated subsidiaries which include Ryder and
the Transferor (the "Ryder Group"), dated December 31, 1998, December
31, 1997 and December 31, 1996 provided to the Representative and the
unaudited consolidated balance sheets dated June 30, 1999, together
with the related schedules and notes (collectively, the "Financial
Statements"), present fairly the financial position of the Ryder Group
at the dates indicated and the statement of operations, stockholders'
equity and cash flows of the Ryder Group for the periods specified;
said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified
the audited portion of the Financial Statements are independent public
accountants with respect to Ryder and its subsidiaries within the
meaning of Regulation S-X under the 1933 Act.
(iv) NO MATERIAL ADVERSE CHANGE. Since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, except as otherwise set forth therein, (A) there has been
no material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the
Transferor, RTR I LP, RTR II LP or Ryder whether or not arising in the
ordinary course of business, (B) there have been no transactions
entered into by Transferor, RTR I LP, RTR II LP or Ryder, other than
those in the ordinary course of business, which are material with
respect to such entity and (C) there has been no material adverse
change in the Financial Statements.
(v) AUTHORIZATION OF THE INDENTURE. The Indenture has been
duly authorized and duly qualified under the 1939 Act and, when duly
executed and delivered by the Trust and the Indenture Trustee, will
constitute a valid and binding agreement of the Trust, enforceable
against the Trust in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), moratorium, reorganization or other similar laws affecting
enforcement of creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(vi) ISSUANCE OF THE SENIOR NOTES. The Senior Notes have been
duly authorized and, at the Closing Time, will have been duly executed
by the Trust and, when authenticated, issued and delivered in the
manner provided for in the Indenture and delivered against payment of
the purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of the Trust, enforceable
against the Trust in accordance with their terms, except as the
enforcement may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
moratorium, reorganization or other similar laws affecting enforcement
of creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law), and will be in the form contemplated
by, and entitled to the benefits of, the Indenture and Trust Agreement.
6
<PAGE> 7
(vii) ISSUANCE OF CERTIFICATES AND SUBORDINATED NOTES. The
Certificates and Subordinated Notes have been duly authorized and, at
the Closing Time, will have been duly executed and, when authenticated,
issued and delivered in the manner provided for in the Trust Agreement
and delivered against payment of the purchase price therefor as
provided in the Purchase Agreement, will constitute valid and binding
obligations of the Trust, enforceable against the Trust in accordance
with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), moratorium, reorganization or
similar laws or affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law), and will be in the form contemplated by, and
entitled to the benefits of, the Trust Agreement.
(viii) DESCRIPTION OF SECURITIES AND BASIC DOCUMENTS. The
Securities and each of the Basic Documents conform in all material
respects to the descriptions thereof and the statements relating
thereto contained in the Prospectus and will be in substantially the
respective forms filed as exhibits to the Registration Statement.
(ix) SUBI CERTIFICATES. The SUBI Certificates conform in all
material respects to the descriptions thereof and the statements
relating thereto contained in the Prospectus; and the SUBI Certificates
have been duly and validly authorized and, when executed, issued,
authenticated and delivered in accordance with the SUBI Trust
Agreement, will be duly and validly issued and outstanding and entitled
to the benefits of the SUBI Trust Agreement.
(x) NO INVESTMENT COMPANY REGISTRATION. None of the
Transferor, Ryder, the Transferor General Partner, RTR I LLC, RTR I LP,
the Origination Trust or the Trust is now or, as a result of the
transactions contemplated by this Agreement, will be, required to be
registered as an "investment company" under the Investment Company Act
of 1940, as amended (the "1940 Act").
(xi) ALLOCATION OF SUBI ASSETS. At or prior to the Closing
Time, the Origination Trustee will have allocated 1999-A Leases and
1999-A Vehicles as SUBI Assets that have an Aggregate Cutoff Date
Securitization Value equal to $_______; and each of the 1999-A Leases
and 1999-A Vehicles allocated as a SUBI Asset at the Closing Time will
meet the eligibility criteria for selection described in the SUBI Trust
Agreement.
(xii) USE OF PROCEEDS. The Transferor will cause the Trust to
use the net proceeds of the Senior Notes as described in the Prospectus
under the caption "Use of Proceeds".
(xiii) ACCURACY OF EXHIBITS. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto which
have not been so described and filed as required.
7
<PAGE> 8
(xiv) INCORPORATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of each of Ryder and the Transferor in
each of the Basic Documents to which they are parties are true and
correct in all material respects and are hereby restated and
incorporated by reference herein with the same effect as if set forth
in full herein.
(b) REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR AND PARTNERS. The
Transferor and, to the extent specified below, Ryder, as Transferor Limited
Partner and RTR Limited Partner and on behalf of the Transferor General Partner
and the RTR General Partner, jointly and severally represent and warrant to, and
agree with, each Underwriter as follows:
(i) DUE ORGANIZATION. Each of the Transferor and RTR I LP has
been duly formed and is validly existing as a limited partnership under
the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. ss.ss.
17-101 et seq. (the "Delaware Partnership Act"), and all filings
required at the date hereof under the Delaware --- Partnership Act with
respect to the due formation and valid existence of the Transferor and
RTR I LP as limited partnerships have been made; each of the Transferor
and RTR I LP has all requisite power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and the related Partnership Agreement and to enter into and
to perform its obligations under such Partnership Agreement, this
Agreement, each Basic Document to which it is a party or by which it
may be bound and the Securities and each of the Transferor and RTR I LP
is duly qualified or registered as a foreign partnership to transact
business and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of the
ownership of property or the conduct of business, except where the
failure to so qualify or register would not have a material adverse
effect on its condition, financial or otherwise, earnings, business
affairs or business prospects.
(iii) TRANSFEROR PARTNERSHIP INTERESTS. The Transferor General
Partner is the sole general partner of the Transferor and the
Transferor Limited Partner is the sole limited partner of the
Transferor and, at the Closing Time, each of the Transferor General
Partner and the Transferor Limited Partner will own its respective
partnership interest in the Transferor (each of which is a
nontransferable interest to the extent provided under the Transferor
Partnership Agreement) free and clear of any lien, mortgage, pledge,
charge, encumbrance, adverse claim or other security interest
(collectively, "Liens") except as permitted by the Basic Documents.
(iii) RTR I PARTNERSHIP INTERESTS. The RTR General Partner is
the sole general partner of RTR I LP and the RTR Limited Partner is the
sole limited partner of RTR I LP and, at the Closing Time, each of the
RTR General Partner and the RTR Limited Partner will own its respective
partnership interests in RTR I LP (each of which is a nontransferable
interest to the extent provided under the RTR Partnership Agreement)
free and clear of any Lien except as permitted by the Basic Documents.
(iv) ABSENCE OF DEFAULTS AND CONFLICTS. None of the
Transferor, the Transferor General Partner, RTR I LP or the RTR General
Partner is in violation of its organizational or charter documents,
bylaws or the related Partnership Agreement, as the case may be, or in
default in the performance or observance of any obligation, agreement,
8
<PAGE> 9
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party
or by which it may be bound, or to which any of its properties or
assets is subject, except for violations or defaults that, individually
or in the aggregate, have not had, and are not reasonably expected to
have, a material adverse effect on their collective condition,
financial or otherwise, earnings, business affairs or business
prospects; the execution, delivery and performance by each of the
Transferor, the Transferor General Partner, RTR I LP or the RTR General
Partner, as the case may be, of this Agreement, the related Partnership
Agreement, each Basic Document to which it is a party and the
Securities, the consummation of the transactions contemplated herein
and therein or in the Prospectus and compliance by each of them with
its obligations hereunder and thereunder have been duly and validly
authorized by all necessary action (corporate or otherwise) and will
not conflict with or constitute a breach of, a default under, or result
in the creation or imposition of any Lien (except as permitted by the
Basic Documents) upon any of its property or assets pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it may be a party, by which it may be bound or to
which any of its properties or assets is subject, except for conflicts,
breaches, defaults or Liens that, individually or in the aggregate,
will not have a material adverse effect on their collective condition,
financial or otherwise, earnings, business affairs or business
prospects, nor will such action result in any violation of the
provisions of the entity's charter or organizational documents, bylaws
or the related Partnership Agreement, or any applicable law,
administrative regulation or administrative or court decree.
(v) ABSENCE OF PROCEEDINGS. There is no action, suit or
proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending or, to the knowledge of each of the
Transferor, the Transferor General Partner, RTR I LP, the RTR General
Partner, and Ryder, threatened, against or affecting the Transferor,
the Transferor General Partner, RTR I LP or the RTR General Partner
that is required to be disclosed in the Prospectus and that is not
disclosed or that might reasonably be expected to result in any
material adverse change in their collective condition, financial or
otherwise, earnings, business affairs or business prospects or that
might reasonably be expected to materially and adversely affect their
collective properties or assets or that might reasonably be expected to
materially and adversely affect the consummation of this Agreement,
either Partnership Agreement or any Basic Document to which any of such
entities is a party or by which it may be bound; all pending legal or
governmental proceedings to which the Transferor, the Transferor
General Partner, RTR I LP or the RTR General Partner is a party or of
which any of their respective properties or assets is the subject that
are not described in the Prospectus, including ordinary routine
litigation incidental to their respective businesses, are, considered
in the aggregate, not material.
(vi) ABSENCE OF FURTHER REQUIREMENTS. No authorization,
approval or consent of any court, governmental authority or agency or
any other person is necessary in connection with (A) the issuance of
the SUBI Certificates, (B) the issuance of the Securities or the
offering and sale of the Senior Notes and Certificates, (C) the
execution, delivery and performance by the Transferor or RTR I LP of
this Agreement or any Basic Document to which it is a party or (D) the
consummation by the Transferor or RTR I LP
9
<PAGE> 10
of the transactions contemplated hereby or thereby, except such
authorizations, approvals or consents as have been obtained and are in
full force and effect as of the Closing Time.
(vii) POSSESSION OF LICENSES AND PERMITS. Each of the
Transferor, the Transferor General Partner, RTR I LP and the RTR
General Partner possesses all material certificates, authorities,
licenses and permits issued by the appropriate state, federal or
foreign regulatory agencies or bodies as are necessary to conduct the
business now operated by it; all such certificates, authorities,
licenses and permits are valid and in full force and effect except
where such invalidity or failure to be in full force and effect does
not have a material adverse effect on their collective condition,
financial or otherwise, earnings, business affairs or business
prospects; and none of such entities has received notice of any
proceedings relating to the revocation or modification of any such
certificate, authority, license or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially and adversely affect their collective
condition, financial or otherwise, earnings, business affairs or
business prospects or the ability of such entities to perform their
obligations under each Basic Document to which they are parties or by
which they may be bound.
(viii) AUTHORIZATION OF THIS AGREEMENT. This Agreement has
been duly authorized, executed and delivered by the Transferor.
(ix) AUTHORIZATION OF BASIC DOCUMENTS. As of the Closing Time,
each of the Basic Documents to which any of the Transferor, the
Transferor General Partner, RTR I LP, the RTR General Partner or the
Trust is a party and the Transferor Partnership Agreement or the RTR
Partnership Agreement, as the case may be, has been duly executed and
delivered by each such entity, and, assuming the due authorization,
execution and delivery thereof by the other parties thereto, will
constitute the legal, valid and binding agreement of the Transferor,
the Transferor General Partner, RTR I LP or the RTR General Partner, as
the case may be, enforceable against such persons in accordance with
its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws related
to fraudulent transfers), moratorium, reorganization or other similar
laws affecting enforcement of creditors' rights generally and by
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(x) ABSENCE OF BUSINESS WITH CUBA. None of Ryder, the
Transferor, the Transferor General Partner, RTR I LP, or the RTR
General Partner conducts business or has Affiliates who conduct
business in Cuba or with the government of Cuba within the meaning of
Section 517.075 of the Florida Securities and Investors Protection Act
or Regulation Section 3E-900.001 promulgated thereunder.
(c) REPRESENTATIONS AND WARRANTIES OF RTR I LLC, RTR I LP AND THE
ORIGINATION TRUST. Ryder, on its own behalf and on behalf of RTR I LLC, RTR I LP
and the Origination Trust, each to the extent indicated below, represents and
warrants to, and agrees with, each Underwriter as follows:
10
<PAGE> 11
(i) NO MATERIAL ADVERSE CHANGE. Since the respective dates as
of which information is given in the Prospectus, except as otherwise
set forth therein, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs
or business prospects of RTR I LLC, RTR I LP or the Origination Trust,
whether or not arising in the ordinary course of business, (B) there
have been no transactions entered into by any of RTR I LLC, RTR I LP or
the Origination Trust other than those in the ordinary course of
business, which are material, and (C) there has been no material
adverse change in the Financial Statements.
(ii) DUE ORGANIZATION OF RYDER. Ryder has been duly
incorporated, is current in the payment of fees to the Florida
Department of State and its status is "active"; Ryder has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
and to perform its obligations under this Agreement, the Partnership
Agreements and each Basic Document to which it is a party or by which
it may be bound; Ryder is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify would not have a material adverse effect on the
condition, financial or otherwise, earnings, business affairs or
business prospects of the Ryder Group or Ryder's ability to perform its
obligations under each Basic Document to which it is a party or by
which it may be bound.
(iii) DUE ORGANIZATION OF TRANSFEROR PARTNERS. Each of the
Transferor General Partner and RTR I LLC has been duly organized and is
validly existing as a limited liability company in good standing under
the laws of the State of Delaware, in each case with power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and to
perform its obligations under each Basic Document to which it is a
party or by which it may be bound; each of the Transferor General
Partner and RTR I LLC is duly qualified as a foreign limited liability
company to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a material
adverse effect on their collective condition, financial or otherwise,
earnings, business affairs or business prospects; all of the issued and
outstanding membership interests of each of the Transferor General
Partner and RTR I LLC is owned by Ryder, free and clear of Liens and
neither the Transferor General Partner nor RTR I LLC has any
subsidiaries.
(iv) DUE ORGANIZATION OF ORIGINATION TRUST. The Origination
Trust has been qualified as a business trust under applicable Delaware
law and all filings required to be made in respect of the Origination
Trust's status as a business trust under the laws of each state in
which such filings are required have been made and are in full force
and effect at the Closing Time, except where the failure so to file or
to have in full force and effect would not have a material adverse
effect on the condition, financial or otherwise, earnings, business
affairs or business prospects of the Ryder Group.
11
<PAGE> 12
(v) ABSENCE OF DEFAULTS AND CONFLICTS. None of Ryder, RTR I
LLC or RTR I LP is in violation of its organizational or charter
documents, bylaws or each applicable Partnership Agreement, as the case
may be, or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which it is a party or by which it may be bound, or to which any of its
properties or assets is subject, except for violations or defaults
that, individually or in the aggregate, have not had, and are not
reasonably expected to have, a material adverse effect on its
condition, financial or otherwise, earnings, business affairs or
business prospects; the execution, delivery and performance by each of
Ryder, RTR I LLC or RTR I LP, as the case may be, of this Agreement,
each applicable Partnership Agreement and each Basic Document to which
it is a party and the consummation of the transactions contemplated
herein and therein and compliance by each of them with its obligations
hereunder and thereunder have been duly and validly authorized by all
necessary action (corporate or otherwise) and will not conflict with or
constitute a breach of, or default under or result in the creation or
imposition of any Lien (except as permitted by the Basic Documents)
upon any of its property or assets pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to
which it is a party or by which it may be bound, or to which any of its
properties or assets is subject, except for conflicts, breaches,
defaults or Liens that, individually or in the aggregate, will not have
a material adverse effect on its condition, financial or otherwise,
earnings, business affairs or business prospects, nor will such action
result in any violation of the provisions of the entity's charter or
organizational documents, bylaws or each applicable Partnership
Agreement, as the case may be, or any applicable law, administrative
regulation or administrative or court decree.
(vi) ABSENCE OF PROCEEDINGS. There is no action, suit or
proceeding before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of Ryder,
threatened, against or affecting any of Ryder, RTR I LLC, RTR I LP or
the Origination Trust that is required to be disclosed in the
Prospectus and that is not disclosed or that might reasonably be
expected to result in any material adverse change in its condition,
financial or otherwise, earnings, business affairs or business
prospects or that might reasonably be expected to materially and
adversely affect its properties or assets or that might reasonably be
expected to materially and adversely affect the consummation of this
Agreement, each applicable Partnership Agreement or any Basic Document
to which any of such entities is a party or by which it may be bound;
and all pending legal or governmental proceedings to which Ryder, RTR I
LLC, RTR I LP or the Origination Trust is a party or of which any of
their respective properties or assets is the subject that are not
described in the Prospectus, including ordinary routine litigation
incidental to their respective businesses, are, considered in the
aggregate, not material.
(vii) ABSENCE OF FURTHER REQUIREMENTS. No authorization,
approval or consent of any court, governmental authority or agency or
any other person is necessary in connection with the execution,
delivery and performance by Ryder, RTR I LLC, RTR I LP or the
Origination Trust of this Agreement, each applicable Partnership
Agreement or any Basic Document to which any of them is a party or the
consummation by any of them
12
<PAGE> 13
of the transactions contemplated hereby or thereby, except such
authorizations, approvals or consents as will have been obtained and
are in full force and effect as of the Closing Time.
(viii) POSSESSION OF LICENSES AND PERMITS. Each of Ryder, RTR
I LLC, RTR I LP and the Origination Trust possesses all material
certificates, authorities, licenses and permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies as
are necessary to conduct the business now operated by it; all such
certificates, authorities, licenses and permits are valid and in full
force and effect except where such invalidity or failure to be in full
force and effect does not have a material adverse effect on its
condition, financial or otherwise, earnings, business affairs or
business prospects; and none of such entities has received notice of
any proceedings relating to the revocation or modification of any such
certificate, authority, license or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would materially and adversely affect its condition, financial
or otherwise, earnings, business affairs or business prospects or the
ability of any of such entities to perform their obligations under each
Basic Document to which they are parties or by which they may be bound.
(ix) AUTHORIZATION OF THIS AGREEMENT. This Agreement has been
duly authorized, executed and delivered by Ryder.
(x) AUTHORIZATION OF BASIC DOCUMENTS. As of the Closing Time,
each Basic Document to which any of Ryder, RTR I LLC or RTR I LP is a
party and the RTR Partnership Agreement has been duly executed and
delivered by Ryder, RTR I LLC or RTR I LP, as the case may be, and,
assuming the due authorization, execution and delivery thereof by the
other parties thereto, will constitute the legal, valid and binding
agreement of Ryder, RTR I LLC or RTR I LP, as the case may be,
enforceable against such persons in accordance with its terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws related to fraudulent
transfers), moratorium, reorganization or other similar laws affecting
enforcement of creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(xi) GOOD AND MARKETABLE TITLE TO SUBI ASSETS. At the time of
execution and delivery of the SUBI Supplement at the Closing Time, the
Origination Trust, or the Origination Trustee on behalf of the
Origination Trust, will have good and marketable title to the 1999-A
Vehicles and other rights relating to the 1999-A Vehicles being
allocated as SUBI Assets, and will hold the 1999-A Leases and the
1999-A Vehicles free and clear of Liens (except as permitted by the
Basic Documents).
(xii) ABSENCE OF ASSIGNMENT OF SUBI ASSETS. As of the Closing
Time, the Origination Trust has not assigned to any person any of its
right, title or interest in any of the 1999-A Leases, related contract
rights, 1999-A Vehicles or other related rights constituting the SUBI
Assets, or has obtained the release of each such prior assignment.
13
<PAGE> 14
(xiii) ALLOCATION OF SUBI ASSETS. As of the Closing Time, the
Administrative Agent has made the appropriate allocation of assets
within the estate of the Origination Trust to the 1999-A SUBIs required
by the SUBI Trust Agreement.
(d) OFFICER'S CERTIFICATES. Any certificate respecting the Securities
signed by any officer of the Transferor, Ryder or any of their respective
Affiliates and delivered at the Closing Time to the Underwriters or to counsel
to the Underwriters shall be deemed a representation and warranty by the
Transferor, Ryder or such Affiliate, as the case may be, to the Underwriters as
to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) SENIOR NOTES. On the basis of and in reliance on the
representations, warranties and agreements herein contained and subject to the
terms and conditions herein set forth, the Transferor agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not
jointly, agrees to purchase from the Transferor, the aggregate principal amount
of each Class of Senior Notes set forth in Schedule A opposite the name of such
Underwriter (plus any additional principal amount of Senior Notes which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10) at a purchase price equal to the following percentages of the
aggregate initial principal balances thereof, (i) in the case of the Class A-1
Senior Notes, _____%, (ii) in the case of the Class A-2 Senior Notes, _____%,
(iii) in the case of the Class A-3 Senior Notes, _____%, (iv) in the case of the
Class A-4 Senior Notes, _____% and (v) in the case of the Class A-5 Senior
Notes, ____%.
(b) PAYMENT. Payment of the purchase price for, and delivery of, the
Senior Notes shall be made at the offices of Brown & Wood LLP, 555 California
Street, San Francisco, California 94104-1715 or at such other place as shall be
agreed upon by the Representative, the Transferor and Ryder, at 10:00 A.M. (New
York time) on [November 16, 1999], or such other time not later than ten
business days after such date as shall be agreed upon by the Representative, the
Transferor and Ryder (such date and time of payment and delivery being called
the "Closing Time"). Pursuant to Rule 15c6-1(d) under the Securities Exchange
Act of 1934, as amended (the "1934 Act"), the Transferor, Ryder and the
Representative have agreed that the Closing Time will be not less than five
business days following the date hereof.
Payment shall be made to the Transferor by wire transfer of immediately
available funds to a bank account designated by the Transferor, against delivery
to the Representative for the respective accounts of the Underwriters of
certificates for the Senior Notes to be purchased by them. It is understood that
each Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the Senior
Notes which it has agreed to purchase. Merrill Lynch, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Senior Notes to be purchased by any
Underwriter whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(c) BOOK ENTRY REGISTRATION. Each Class of Senior Notes will initially
be represented by one or more certificates registered in the name of Cede & Co.,
as nominee of The Depository
14
<PAGE> 15
Trust Company ("DTC"). The interests of beneficial owners of each Class of
Senior Notes will be represented by book entries on the records of DTC and
participating members thereof. Definitive certificates evidencing the Senior
Notes will be available only under the limited circumstances specified in the
Indenture. Certificates for the Senior Notes shall be made available for
examination and packaging by the Underwriters in The City of New York not later
than 10:00 A.M. (New York time) on the last business day prior to the Closing
Time.
Section 3. COVENANTS OF THE TRANSFEROR AND RYDER. The Transferor and
Ryder jointly and severally covenant with the each Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Transferor, subject to Section 3(b), will comply with the requirements of Rule
430A and will notify the Representative immediately, and confirm the notice in
writing, (i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Senior Notes for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Transferor will promptly effect the filings necessary
pursuant to Rule 424(b) and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for filing under
Rule 424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such Prospectus. The Transferor will notify the
Representative promptly of any filing pursuant to Rule 424(b). The Transferor
will make every reasonable effort to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) FILING OF AMENDMENTS. The Transferor will give the Representative
notice of its intention to file or prepare any amendment, supplement or revision
to the Registration Statement or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectus. The Transferor will furnish the Representative
with copies of any such documents a reasonable amount of time prior to such
proposed filing, and will not file or use any such document to which the
Representative or counsel for the Underwriters shall object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Transferor has furnished
or will deliver to the Representative and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith) and signed copies of
all consents and certificates of experts, and will also deliver to the
Representative, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for each of
the Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
15
<PAGE> 16
(d) DELIVERY OF PROSPECTUSES. The Transferor has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Transferor hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Transferor will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Transferor will
comply with the 1933 Act and the 1933 Act Regulations, the 1934 Act and rules
and regulations of the Commission promulgated under the 1934 Act and the 1939
Act and the 1939 Act Regulations so as to permit the completion of the
distribution of the Senior Notes as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act and the
1933 Act Regulations to be delivered in connection with sales of the Senior
Notes, any event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or for the Transferor,
to amend the Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time it
is delivered to a purchaser, or if it shall be necessary, in the opinion of
either such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Transferor will promptly prepare
and file with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or to make
the Registration Statement or the Prospectus comply with such requirements, and
the Transferor will furnish to the Underwriters such number of copies of such
amendment or supplement as the Underwriters may reasonably request. Neither the
consent of the Representative to, nor the delivery by any Underwriter of, any
such amendment or supplement shall constitute a waiver of any of the conditions
set forth in Section 5.
(f) BLUE SKY QUALIFICATIONS. The Transferor will use its reasonable
efforts, in cooperation with the Underwriters, to qualify the Senior Notes for
offering and sale under the applicable securities laws of such states and other
jurisdictions as the Representative may designate and to maintain such
qualifications in effect for a period of not less than one year from the
effective date of the Registration Statement; provided, however, that neither
Ryder nor the Transferor shall be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the Senior Notes have
been so qualified, the Transferor will file such statements and reports as may
be required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the effective date of the
Registration Statement. The Transferor will also supply the Underwriters with
such information as is necessary for the determination of the legality of the
offering and sale of the Senior Notes for investment under the laws of such
jurisdictions as the Underwriters may reasonably request.
16
<PAGE> 17
(g) RULE 158. The Transferor will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its Senior
Noteholders as soon as practicable an earnings statement for the purposes of,
and to provide the benefits contemplated by, the last paragraph of Section 11(a)
of the 1933 Act.
(h) RATING OF SENIOR NOTES AND CERTIFICATES. The Transferor shall take
all reasonable action necessary to enable Moody's Investors Service Inc. and
Duff & Phelps Credit Rating Service, Inc. (the "Rating Agencies") to provide the
Class A-1 Senior Notes with the highest short-term rating, the remaining classes
of Senior Notes with the highest long-term rating and the Certificates with at
least "A" rating or its equivalent at the Closing Time.
(i) USE OF PROCEEDS. The Transferor shall cause the Trust to use the
net proceeds received by it from the sale of the Senior Notes in the manner
specified in the Prospectus under "Use of Proceeds".
(j) RESTRICTION ON SALE OF SENIOR NOTES. For a period of 30 days from
the date hereof, none of Ryder, the Transferor or any of their respective
Affiliates will, without the prior written consent of the Representative,
directly or indirectly, offer, sell or contract to sell or announce the offering
of, in a public or private transaction, any other collateralized securities
similar to the Senior Notes.
(k) REPORTING REQUIREMENTS. The Transferor will file with the
Commission such report on Form SR as may be required pursuant to Rule 463 under
the 1933 Act and, during the period when the Prospectus is required to be
delivered under the 1933 Act, will file all documents required to be filed with
the Commission pursuant to the 1934 Act within the time periods required by the
1934 Act.
(l) REPORTS, STATEMENTS AND CERTIFICATES. The Transferor and Ryder
agree that, so long as any Senior Notes are outstanding, the Transferor or
Ryder, as the case may be, will make good faith efforts to, as soon as each
becomes available, deliver or cause to be delivered to the Representative, as
soon as copies become available, copies of (i) each payment date certificate
delivered to Indenture Trustee pursuant to Section 8.03 of the Indenture, (ii)
the annual report as to compliance by a firm of independent public accountants
delivered pursuant to Section 11.11 of the Administration Agreement, (iii) the
officer's certificate delivered by the Administrative Agent pursuant to Section
11.12 of the Administration Agreement, (iv) each periodic report required to be
filed by the Transferor with the Commission pursuant to the 1934 Act, or any
order of the Commission thereunder and (v) such other information with respect
to the Securities concerning Ryder, the Transferor, RTRI LP, the Transferor
General Partner, RTR General Partner, the Origination Trust, or the Trust as the
Representative may reasonably request from time to time.
Section 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Transferor shall pay all of its own expenses incident
to the performance of its obligations under this Agreement, including without
limitation (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the preparation, reproduction and
17
<PAGE> 18
delivery to the Underwriters of this Agreement, any Agreement among the
Underwriters, each Basic Document and such other documents as may be required in
connection with the issuance of the Securities or the offering, purchase, sale
or delivery of the Senior Notes, (iii) the preparation, issuance and delivery of
the certificates for the Senior Notes to the Underwriters, (iv) the fees and
expenses of the counsel, accountants and other advisors of the Transferor,
Ryder, RTR I LP and their respective Affiliates in connection with the
transactions contemplated by this Agreement and the Purchase Agreement, (v) the
qualification of the Senior Notes under state securities laws in accordance with
the provisions of Section 3(f), including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith, (vi)
the fees and expenses of the Origination Trustee, Trustee and the Trust Agent,
including the reasonable fees and disbursements of their respective counsel in
connection with the transactions contemplated by this Agreement and the Purchase
Agreement and (vii) any fees payable in connection with the rating of the Senior
Notes.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section
9(a)(i), the Transferor shall reimburse the Underwriters for all of their
reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Underwriters.
Section 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters are subject to the accuracy of the
representations and warranties of the Transferor and Ryder contained in Section
1 or in certificates of any officer of the Transferor, Ryder or any of their
respective Affiliates delivered pursuant to the provisions hereof, to the
performance by the Transferor and Ryder of their covenants and other obligations
hereunder and to the following additional conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement
shall have become effective and, at the Closing Time, no stop order suspending
the effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission (or,
if issued, such stop order shall have been lifted), and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel for the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A).
(b) ACCOUNTANTS' COMFORT LETTER. At the Closing Time, the
Representative, Ryder and the Transferor shall have received from KPMG LLP a
letter or letters dated as of the Closing Time, in form and substance as
previously agreed to by the Representative and otherwise satisfactory in form
and substance to the Representative and counsel for the Underwriters, containing
statements and information of the type ordinarily included in accountants'
"comfort letters", with respect to the Financial Statements and certain
financial, statistical and other information contained in the Prospectus.
(c) OFFICERS' CERTIFICATE. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse changes in the
condition, financial or otherwise, or in the earnings, business
18
<PAGE> 19
affairs or business prospects of the Transferor, Ryder and their respective
Affiliates, whether or not arising in the ordinary course of business, and the
Representative shall have received certificates of authorized officers of the
Transferor and Ryder, dated as of the Closing Time, to the effect that (i) there
has been no such material adverse change, (ii) the representations and
warranties in Section 1 are true and correct with the same force and effect as
though expressly made at and as of the Closing Time, (iii) each of the
Transferor and Ryder has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Closing
Time and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission (or, if a stop
order has been issued, such order has been subsequently lifted).
(d) OPINION OF SPECIAL COUNSEL FOR RYDER AND THE TRANSFEROR. At the
Closing Time, the Representative shall have received the favorable opinion of
Steel, Hector & Davis LLP, special counsel for the Transferor and Ryder, dated
the Closing Time and in form and substance satisfactory to counsel for the
Underwriters, substantially to the effect that:
(i) Ryder has been incorporated under the Florida General
Corporation Act, is current in the payment of fees due to the Florida
Department of State and its status is active; Ryder has corporate power
and authority to carry on its business as described in the Prospectus
and to enter into and perform its obligations under this Agreement, the
Transferor Partnership Agreement and each Basic Document to which it is
a party and is duly qualified as a foreign corporation to transact
business in the states of California, Delaware, Indiana, North
Carolina, Ohio, Pennsylvania and Tennessee and is in good standing in
such states.
(ii) RTR III LLC is duly qualified to transact business in
Florida.
(iii) The Transferor is duly qualified to transact business in
Florida.
(iv) This Agreement has been duly authorized, executed and
delivered by each of the Transferor and Ryder.
(v) The Senior Notes have been duly and validly authorized
and, when executed, issued, authenticated and delivered pursuant to the
Indenture, and delivered against payment of the consideration specified
in this Agreement, will be duly and validly issued and outstanding,
constitute valid and binding obligations of the Trust, enforceable
against the Trust in accordance with their terms, and will be entitled
to the benefits of the Indenture (subject to certain generally
applicable limitations set forth in such opinion). The Certificates
have been duly and validly authorized and, when executed, issued,
authenticated and delivered pursuant to the Trust Agreement, and
delivered against payment of the consideration specified in the
Purchase Agreement, will be duly and validly issued and outstanding and
entitled to the benefits of the Trust Agreement (subject to certain
generally applicable limitations set forth in such opinion).
(vi) The Transferor Partnership Agreement and each Basic
Document to which any of Ryder, RTR III LLC and the Transferor is a
party has been duly authorized,
19
<PAGE> 20
executed and delivered by Ryder, RTR III LLC and the Transferor, as the
case may be, and assuming the due authorization, execution and delivery
thereof by the other parties thereto, will constitute the legal, valid
and binding agreement of such entity enforceable against such entity in
accordance with its terms (in each case, subject to certain generally
applicable limitations set forth in such opinion).
(vii) To such counsel's knowledge there is no action, suit,
proceeding, inquiry or investigation pending or threatened, to which
Ryder, RTR III LLC, the Origination Trust or the Transferor is a party
or to which any of their respective properties or assets is subject,
before or brought by any court or governmental agency or body, (i)
asserting the invalidity of this Agreement, any Basic Document or the
Senior Notes, (ii) seeking to prevent the issuance of the Senior Notes
or the consummation of any of the transactions contemplated by this
Agreement or any Basic Document, (iii) that would, if determined
adversely to Ryder, RTR III LLC, the Origination Trust, or the
Transferor, materially and adversely affect the performance by Ryder,
RTR III LLC, the Origination Trust, or the Transferor of its respective
obligations under, or the validity or enforceability of, this Agreement
or any Basic Document to which it is a party or the Senior Notes, or
materially adversely affect its condition, or (iv) seeking adversely to
affect the federal income tax attributes of the Senior Notes as
described in the Prospectus under the heading "Material Federal Income
Tax Consequences--Senior Notes" or the Florida income tax attributes of
the Senior Notes as described in the Prospectus under the heading
"Delaware and Florida Tax Consequences--Florida".
(viii) The statements in the Prospectus under the captions
"Summary", "Risk Factors", "Description of the Senior Notes", "Security
for the Securities" and "Additional Document Provisions", insofar as
such statements purport to summarize certain terms or provisions of the
SUBI Certificates, the Securities and the Basic Documents, provide a
fair summary of such provisions and the statements in the Prospectus
under the captions "Risk Factors", "Additional Document Provisions",
"Additional Legal Aspects of the Origination Trust and the SUBIs",
"Additional Legal Aspects of the Specified Leases and the Specified
Vehicles", "Material Federal Income Tax Consequences", "Florida and
Delaware Tax Consequences--Florida" and "ERISA Considerations", to the
extent that they constitute matters of law, summaries of legal matters,
documents or proceedings or legal conclusions relating to U.S. federal
law or the laws of the States of Florida or New York have been prepared
or reviewed by such counsel and provide a fair summary in all material
respects (and such counsel may state for clarification that it
expresses no opinion as to whether such statements omit to state a
material fact required to be stated therein).
(ix) To such counsel's knowledge, no order, consent, permit or
approval of any Florida, New York or federal court or governmental
authority or agency applicable to Ryder, RTR III LLC or the Transferor,
is required in connection with the issuance of the SUBI Certificates,
the Securities or the offering or the sale of the Senior Notes and the
Certificates, except those authorizations, approvals, consents and
orders which have previously been obtained and are in full force and
effect as of the Closing Time. Such counsel need not express an opinion
with respect to any orders, consents, permits, approvals, filings or
licenses relating to the authority to lease motor vehicles, originate
lease contracts or to service lease contracts or leased vehicles or any
state or foreign
20
<PAGE> 21
securities laws or as may be required by any regional or local
governmental authority (except for the opinions, as to qualification to
transact business as a foreign corporation and good standing, set forth
in clause (i) above).
(x) None of (A) the execution, delivery and performance by
Ryder or the Transferor of this Agreement or by Ryder, RTR III LLC or
the Transferor of the Transferor Partnership Agreement or any Basic
Document to which such entity is a party, (B) the consummation of the
transactions contemplated herein or therein by any such entity or (C)
the fulfillment of the terms hereof or thereof by any such entity, will
conflict with, result in a breach of or constitute a default under, or
with the giving of notice or the passage of time or both, would
constitute a default under or result in the creation or imposition of
any Lien (except as permitted by the Basic Documents) upon any property
or assets of such entity pursuant to the terms of (i) the
organizational, charter or partnership documents or bylaws of such
entity, (ii) to such counsel's knowledge and except as otherwise
provided in the Basic Documents, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which such entity is
a party or by which it may be bound, or to which any of the properties
or assets of such entity is subject or (iii) to such counsel's
knowledge, any applicable law, statute or regulation or any judgment,
order or decree applicable to such entity of any court, regulatory body
or other governmental instrumentality having jurisdiction over such
entity; excepting, in the case of clauses (ii) and (iii) above,
defaults, breaches or violations that do not, in the aggregate, have a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of such entity or
a material adverse effect in the ability of such entity to perform its
obligations under the Transferor Partnership Agreement or any Basic
Document to which it is a party, as the case may be.
(xi) None of Ryder, RTR III LLC, RTR I LP, the Transferor, the
Origination Trust or the Trust is required to be registered as an
"investment company" under the 1940 Act.
(xii) The Indenture has been qualified under the 1939 Act.
(xiii) To such counsel's knowledge, each of Ryder, RTR III
LLC, the Transferor and the Origination Trust possesses such
certificates, authorities, licenses, permits and other governmental
authorizations necessary to conduct the business now operated by it,
and none of such entities has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority, license or permit that, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would materially
and adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of such entity or the
ability of such entity to perform its obligations under the Basic
Documents to which it is a party.
(xiv) Under the Uniform Commercial Code as in effect in the
State of New York (the "NYUCC"), the execution and delivery of the
Indenture and the delivery for value to and taking of physical
possession in the State of New York by the Indenture Trustee of the 99%
SUBI Certificates will create a valid first priority perfected security
21
<PAGE> 22
interest, for the benefit of the Indenture Trustee on behalf of the
holders of the Senior Notes, in the Trust's and the Trustee's right,
title and interest in the 99% SUBI Certificates.
(xv) Under the NYUCC, the provisions of the Issuer SUBI
Certificate Transfer Agreement are effective to create a valid security
interest, in favor of the Trust, in the Transferor's rights in all
security entitlements with respect to financial assets now or hereafter
credited to the account established as the Reserve Fund (as defined in
the Trust Agreement) (such security entitlements, the "Pledged Security
Entitlements"). The provisions of the Indenture are effective to create
a valid security interest in favor of the Indenture Trustee, to secure
payment of the Senior Notes, in the Trust's right in the Pledged
Security Entitlements.
(xvi) Under the NYUCC, the provisions of the Control Agreement
are effective to perfect the security interest of the Indenture Trustee
in the Pledged Security Entitlements.
(xvii) No security interest of any other creditor of the Trust
will be prior to the security interest of the Indenture Trustee in the
Pledged Security Entitlements.
(xviii) Nothing has come to such counsel's attention that
would lead it to believe that the Registration Statement or any
amendment thereto, including the Rule 430A Information (other than the
financial statements and schedules and other financial data included
therein, as to which no opinion need be expressed), at the time such
Registration Statement or any such amendment became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (other than the financial statements
and schedules and other financial data included therein, as to which no
opinion need be expressed), at the time the Prospectus was issued, at
the time any such amended or supplemented prospectus was issued or at
the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(xix) All descriptions in the Registration Statement of the
Basic Documents or other contracts or documents filed as exhibits to
the Registration Statement to which the Transferor, Ryder or any of
their respective Affiliates is a party are accurate in all material
respects; to the best of such counsel's knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto other
than those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or
references thereto are correct in all material respects.
(xx) The Registration Statement has been declared effective
under the 1933 Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the
22
<PAGE> 23
manner and within the time period required by Rule 424(b); and, to the
best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or
are pending or threatened by the Commission.
(xxi) The Registration Statement, the Rule 430A Information,
the Prospectus and each amendment or supplement to the Registration
Statement or the Prospectus, as of their respective effective or issue
dates (other than the financial statements and schedules and other
financial data included therein, and the Trustee's Statement of
Eligibility on Form T-1, as to which no opinion need be expressed),
complied as to form in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations.
(e) OPINION OF SPECIAL DELAWARE COUNSEL FOR RYDER AND THE TRANSFEROR.
At the Closing Time, the Representative shall have received the favorable
opinion of Richards, Layton & Finger P.A., special Delaware counsel for the
Transferor and Ryder, dated the Closing Time and in form and substance
satisfactory to counsel for the Underwriters, substantially to the effect that:
(i) Each of RTR I LP, RTR II LP and the Transferor has been
duly formed and is validly existing in good standing as a limited
partnership under the laws of the State of Delaware.
(ii) Each of RTR I LLC, Ryder Trust Rental II LLC ("RTR II
LLC") and RTR III LLC has been duly formed and is validly existing in
good standing as a limited liability company under the laws of the
State of Delaware.
(iii) Each of RTR Leasing I and RTR Leasing II has been duly
formed and is validly existing in good standing as a corporation under
the laws of the State of Delaware.
(iv) Under the Delaware Partnership Act and its related
formation documents, each of RTR I LP, RTR II LP and the Transferor has
all necessary partnership power and authority to execute and deliver,
and to perform its obligations under the formation documents to which
it is a party and the Basic Documents to which it is a party.
(v) Under the Delaware Partnership Act and its related
formation documents, the execution and delivery by each of RTR I LP,
RTR II LP and the Transferor of the formation documents to which it is
a party and the Basic Documents to which it is a party, and the
performance by it of its obligations thereunder, have been duly
authorized by all necessary partnership action on the part of RTR I LP,
RTR II LP and the Transferor.
(vi) Under the Delaware Limited Liability Company Act (6 DEL.
C. ss.18-101, et seq.) (the "LLC Act") and its related formation
documents, each of RTR I LLC, RTR II LLC and RTR III LLC has all
necessary limited liability company power and authority to execute and
deliver, and to perform its obligations under, the formation documents
to which it is a party and the Basic Documents to which it is a party.
23
<PAGE> 24
(vii) Under the LLC Act and its related formation documents,
the execution and delivery by each of RTR I LLC, RTR II LLC and RTR III
LLC of the formation documents which it is a party and the Basic
Documents to which it is a party, and the performance by it of its
obligations thereunder, have been duly authorized by all necessary
limited liability company action on the part of RTR I LLC, RTR II LLC
and RTR III LLC.
(viii) Under the General Corporate Law of the State of
Delaware (8 Del. C. ss.ss.101, et. seq.) (the "DGCL") and its related
formation documents, each of the RTR Leasing I and RTR Leasing II has
all necessary corporate power and authority to execute and deliver, and
to perform its obligations under, the formation documents to which it
is a party and the Basic Documents to which it is a party.
(ix) Under the DGCL and its related formation documents, the
execution and delivery by each of RTR Leasing I and RTR Leasing II of
the formation documents to which it is a party and the Basic Documents
to which it is a party, and the performance by it of its obligations
thereunder, have been duly authorized by all necessary corporate action
on the part of RTR Leasing I and RTR Leasing II.
(x) Each of the Origination Trust and the Trust has been duly
formed and is validly existing in good standing as a business trust
under the laws of the State of Delaware.
(xi) Under the Delaware Business Act (12 DEL. C. ss.3801, et
seq.) (the "DBT Act") and its related formation documents, each of the
Origination Trust and the Trust has all necessary business trust power
and authority to execute and deliver, and to perform its obligations
under, the Basic Documents to which it is a party.
(xii) Under the DBT Act and its related formation documents,
the execution and delivery by each of the Origination Trust and the
Trust of the Basic Documents to which it is a party, and the
performance by it thereunder, have been duly authorized by all
necessary business trust action on the part of the Origination Trust
and the Trust.
(xiii) Each of the Origination Trust Agreement and the Trust
Agreement is a legal, valid and binding agreement of the parties
thereto, enforceable against such parties, in accordance with its
terms.
(xiv) The SUBI Certificates have been duly and validly
authorized and, when executed, authenticated and delivered in
accordance with the Origination Trust Agreement and the SUBI
Supplement, will be duly and validly issued and outstanding and
entitled to the benefits of the Origination Trust Agreement and the
SUBI Supplement.
(xv) Under ss.3805(b) of the DBT Act, no creditor of any
holder of a UTI Certificate or a SUBI Certificate shall have any right
to obtain possession of, or otherwise exercise legal or equitable
remedies with respect to, the property of the Origination Trust except
in accordance with the terms of the Origination Trust Agreement and the
SUBI Supplement.
24
<PAGE> 25
(xvi) Under ss.3805(b) of the DBT Act, no creditor of any
holder of a Trust Certificate shall have any right to obtain possession
of, or otherwise exercise legal or equitable remedies with respect to,
the property of the Issuer except in accordance with the terms of the
Trust Agreement and the SUBI Supplement.
(xvii) To the extent that Article 9 of the Uniform Commercial
Code as in effect in the State of Delaware (the "UCC") is applicable
(without regard to conflict of laws principles), and assuming that the
security interest created by the Indenture in the Collateral has been
duly created and has attached, upon the filing of the Financing
Statement with the Secretary of State, the Indenture Trustee will have
a perfected security interest in that portion of the Trust's right in
such collateral and the proceeds thereof that constitutes "accounts",
"general intangibles" or "chattel paper", as such terms are defined in
the UCC, and such security interest will be prior to any other security
interest granted by the Issuer that is perfected solely by the filing
of financing statements under the UCC, excluding purchase money
security interests under ss.9-312(4) of the UCC and temporarily
perfected security interests in proceeds under ss.9-306(3) of the UCC.
(xviii) The SUBI Certificates constitute "certificated
securities" and "securities" under the UCC.
(xix) The Securities have been duly and validly authorized
and, when executed, authenticated and delivered in accordance with the
Trust Agreement and the Indenture, (i) in the case of the Subordinated
Notes and the Senior Notes, will be legal, valid and binding
obligations of the Trust, enforceable against the Trust, in accordance
with their terms, and (ii) in the case of the Certificates, will be
duly and validly issued and outstanding and entitled to the benefits of
the Trust Agreement.
(xx) The statements in the Prospectus under "Certain State Tax
Consequences - The Senior Notes - Delaware", to the extent that they
constitute matters of law, summaries of legal matters, documents or
proceedings or legal conclusions, have been reviewed by such counsel
and are correct in all material respects.
(f) OPINION OF SPECIAL BANKRUPTCY COUNSEL TO THE TRANSFEROR AND RYDER.
At the Closing Time, the Representative shall have received the favorable
opinion of Brown & Wood LLP, special bankruptcy counsel to the Transferor and
Ryder, dated the Closing Time and in form and substance satisfactory to counsel
for the Underwriters, with respect to certain bankruptcy matters.
(g) OPINION OF COUNSEL FOR INDENTURE TRUSTEE. At the Closing Time, the
Representative shall have received the favorable opinion of Dorsey & Whitney
LLP, counsel to U.S. Bank, as Indenture Trustee and Trust Agent, dated the
Closing Time and in form and substance satisfactory to counsel for the
Underwriters, substantially to the effect that:
(i) U.S. Bank has been duly incorporated and is validly
existing as a national banking corporation, in good standing under the
federal laws of the United States of America with full power and
authority (corporate and other) to own its properties and conduct its
business, as presently conducted by it, and to enter into and perform
its
25
<PAGE> 26
obligations as Indenture Trustee and Trust Agent under each Basic
Document to which U.S. Bank is a party.
(ii) Each Basic Document to which U.S. Bank is a party has
been duly authorized, executed and delivered by U.S. Bank and, assuming
the due authorization, execution and delivery thereof by the other
parties thereto, will constitute a legal, valid and binding obligation
of U.S. Bank enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting enforcement
of creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(iii) The Senior Notes have been duly executed, authenticated
and delivered by U.S. Bank, as Indenture Trustee.
(iv) Neither the execution nor delivery by U.S. Bank of each
Basic Document to which it is a party nor the consummation of any of
the transactions by U.S. Bank contemplated thereby require the consent
or approval of, the giving of notice to, the registration with or the
taking of any other action with respect to, any governmental authority
or agency under any existing federal or state law governing the banking
or trust powers of U.S. Bank.
(v) The execution and delivery of each Basic Document to which
U.S. Bank is a party and the performance by U.S. Bank of its terms do
not conflict with or result in a violation of (A) any federal or state
law or regulation governing the banking or trust powers of U.S. Bank,
(B) the Articles of Association or Bylaws of U.S. Bank or (C) to the
best knowledge of such counsel, any indenture, lease or material
agreement to which U.S. Bank is a party or to which its assets are
subject.
(vi) All of the issued and outstanding capital stock of the
Origination Trustee is owned by U.S. Bank, free and clear of any Liens.
(h) OPINION OF COUNSEL FOR ORIGINATION TRUSTEE. At the Closing Time,
the Representative shall have received the favorable opinion of Dorsey & Whitney
LLP, counsel to the Origination Trustee, dated the Closing Time and satisfactory
in form and substance to counsel for the Underwriters, substantially to the
effect that:
(i) The Origination Trustee has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware with corporate power and authority to own, lease
and operate its properties, to conduct its business as described in the
Prospectus and to enter into and perform its obligations under each
Basic Document to which it is a party.
(ii) The shares of issued and outstanding capital stock of the
Origination Trustee have been duly authorized and validly issued, are
fully paid and non-assessable and are owned by U.S. Bank.
26
<PAGE> 27
(iii) Each Basic Document to which the Origination Trustee is
a party has been duly authorized, executed and delivered by the
Origination Trustee and, assuming the due authorization, execution and
delivery thereof by the other parties thereto, will constitute the
legal, valid and binding obligation of the Origination Trustee
enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting enforcement
of creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(iv) To the best of their knowledge and information, the
Origination Trustee is duly qualified as a foreign corporation to
transact business and is in good standing in Florida, Delaware,
Indiana, New York, Pennsylvania and Wisconsin.
(v) The SUBI Certificates have been duly executed,
authenticated and delivered by the Origination Trustee.
(vi) Neither the execution nor delivery by the Origination
Trustee of each Basic Document to which it is a party nor the
consummation of any of the transactions by the Origination Trustee
contemplated thereby require the consent or approval of, the giving of
notice to, the registration with or the taking of any other action with
respect to, any person or entity, including any governmental authority
or agency under any existing federal or state law.
(vii) The execution and delivery of each Basic Document to
which the Organization Trustee is a party and the performance by the
Origination Trustee of their respective terms do not conflict with or
result in a violation of its articles of incorporation or by-laws of
the Origination Trustee or, to the best of such counsel's knowledge,
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party, by which it may be bound or to which
any of its property or assets is subject.
(i) OPINION OF COUNSEL FOR TRUSTEE. At the Closing Time, the
Representative shall have received the favorable opinion of Pryor, Cashman,
Sherman & Flynn LLP, counsel to the Trustee, dated the Closing Time and
satisfactory in form and substance to counsel for the Underwriters,
substantially to the effect that:
(i) The Trustee has been duly incorporated and is validly
existing as a national banking corporation, in good standing under the
laws of Delaware the federal laws of the United States of America
(ii) The Trustee has full power and authority (corporate and
other) to own its properties and conduct its business, as presently
conducted by it, and to enter into and perform its obligations as
Trustee under each Basic Document to which it is a party.
(iii) The execution and delivery of the Trust Agreement and,
on behalf of the Trust, each other Basic Document to which the Trustee
is a party, the Certificates and the Notes and the performance by the
Trustee of its obligations under the Trust Agreement
27
<PAGE> 28
have been duly authorized by all necessary corporate action and each
has been executed and delivered by the Trustee.
(iv) The Trust Agreement constitutes a valid binding agreement
of the Trustee, enforceable against the owner Trustee in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar
laws affecting enforcement of creditors' rights generally and by
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(v) Neither the execution nor delivery by the Trustee of each
Basic Document to which it is a party nor the consummation of any of
the transactions by the Trustee contemplated thereby require the
consent or approval of, the giving of notice to, the registration with
or the taking of any other action with respect to, any governmental
authority or agency under any existing federal or state law governing
the banking or trust powers of the Trustee, other than those consents,
approvals or authorizations as have been obtained and the filing of the
Certificate of Trust with the Secretary of State of the State of
Delaware.
(vi) Each of the Senior Notes, Certificates, Subordinated
Notes and the Transferor Certificate have been duly executed,
authenticated and delivered by the Trustee.
(vii) The execution and delivery of each Basic Document to
which the Trustee is a party and the performance by the Trustee of its
terms do not conflict with or result in a violation of (A) any federal
or state law or regulation governing the banking or trust powers of the
Trustee, (B) the Articles of Association or Bylaws of the Trustee or
(C) to the best knowledge of such counsel, any indenture, lease or
material agreement to which the Trustee is a party or to which its
assets are subject.
(j) OPINION OF COUNSEL FOR THE UNDERWRITERS. At the Closing Time, the
Representative shall have received the favorable opinion, dated as of the
Closing Time, of Brown & Wood LLP, counsel for the Underwriters, in form and
substance satisfactory to the Representative. In rendering such opinion, such
counsel may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York and the federal law of the United States,
upon the opinions of counsel reasonably satisfactory to the Representative.
(k) RELIANCE LETTERS. Counsel to the Transferor or Ryder shall provide
reliance letters to the Representative relating to each legal opinion relating
to the transaction contemplated hereby rendered to the Trustee, the Origination
Trustee or either Rating Agency.
(l) MAINTENANCE OF RATING. At the Closing Time, (i) the Senior Notes
shall be rated by each Rating Agency in its highest rating category and (ii) the
Certificates shall be rated by each Rating Agency at least "A" or its
equivalent, and Ryder and the Transferor shall have delivered to the
Representative a letter dated the Closing Time from each Rating Agency, or other
evidence satisfactory to the Representative, confirming that the Senior Notes
and Certificates have such ratings; and since the date of this Agreement, there
shall not have occurred
28
<PAGE> 29
a downgrading in the rating assigned to the Senior Notes and Certificates or any
other securities of the Transferor or Ryder by any "nationally recognized
statistical rating agency", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, and no such securities rating
agency shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of the Senior Notes and
Certificates or any other securities of the Transferor or Ryder.
(m) ADDITIONAL DOCUMENTS. At the Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions as it
may reasonably require for the purpose of enabling it to pass upon the issuance
of the Securities and the sale of the Senior Notes as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties or
the fulfillment of any of the conditions herein contained; and all proceedings
taken by the Transferor or Ryder in connection with the foregoing shall be
reasonably satisfactory in form and substance to counsel for the Underwriters.
(n) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representative by notice to the Transferor
and Ryder at any time at or prior to the Closing Time, and such termination
shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
Section 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF UNDERWRITERS. The Transferor and Ryder jointly
and severally agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever, based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d)) any such settlement is effected with the
written consent of the Transferor and Ryder; and
29
<PAGE> 30
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever, based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under clause (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written
information furnished to the Transferor or Ryder by any Underwriter
through Merrill Lynch expressly for use in the Registration Statement
(or any amendment thereto), including the Rule 430A Information, or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(b) INDEMNIFICATION OF THE TRANSFEROR AND RYDER. Each Underwriter
severally agrees to indemnify and hold harmless the Transferor, Ryder, each
person who signed the Registration Statement, each person who was a director (or
person performing similar functions), or partner, in the Transferor at the time
of filing the Registration Statement and each person, if any, who controls the
Transferor or Ryder within the meaning of Section 15 of the 1993 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in Section 6(a), as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto), including the Rule 430A Information, or any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Transferor or Ryder by such
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a), counsel
to the indemnified parties shall be selected by Merrill Lynch, and, in the case
of parties indemnified pursuant to Section 6(b), counsel to the indemnified
parties shall be selected by the Transferor or Ryder, as applicable. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any
30
<PAGE> 31
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section or Section 7 (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
Section 7. CONTRIBUTION. If the indemnification provided for in Section
6 is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Transferor and
Ryder on the one hand and the Underwriters on the other hand from the offering
of the Senior Notes pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Transferor and Ryder on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Transferor and Ryder on the one
hand and the Underwriters on the other hand in connection with the offering of
the Senior Notes pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Senior
Notes pursuant to this Agreement (before deducting expenses) received by the
Transferor and the total underwriting discount received by the Underwriters, in
each case as set forth on the cover of the Prospectus, bear to the aggregate
initial offering price of the Senior Notes as set forth on such cover. The
relative fault of the Transferor and Ryder on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Transferor or Ryder or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Transferor, Ryder and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section were determined by
pro rata allocation (even if the
31
<PAGE> 32
Underwriters are treated as one entity for such purposes) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this Section. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred to
above in this Section shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever,
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Senior Notes underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director (or person performing similar functions) of the Transferor, each
person who signed the Registration Statement, and each person, if any, who
controls the Transferor or Ryder within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Transferor and Ryder. The Underwriters' respective obligations to contribute
pursuant to this Section are several in proportion to the principal amount of
Senior Notes set forth opposite their respective names in Schedule A and not
joint.
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Transferor, Ryder and their
respective Affiliates submitted pursuant hereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Transferor,
Ryder and their respective Affiliates, and shall survive delivery of the Senior
Notes to the Underwriters.
Section 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Representative may terminate this
Agreement, by notice to the Transferor and Ryder, at any time at or prior to the
Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Transferor, the Origination Trust, Ryder or Ryder and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, (ii) if there has occurred any material adverse change in the
financial markets in the United States, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change
32
<PAGE> 33
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representative, impracticable to market the Senior Notes or to enforce contracts
for the sale of the Senior Notes, (iii) if trading in any securities of Ryder
has been suspended or materially limited by the Commission or if trading
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq National Market has been suspended or materially limited, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority or (iv) if a banking moratorium has been declared by
either Federal or New York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
Section 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
of the Underwriters shall fail at Closing Time to purchase the Senior Notes
which it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representative shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have completed
such arrangements within such 24-hour period, then:
(a) if the amount of Defaulted Securities does not exceed 10%
of the aggregate principal amount of the Senior Notes to be purchased
hereunder, each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the amount of Defaulted Securities exceeds 10% of the
aggregate principal amount of the Senior Notes to be purchased
hereunder, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representative or the Transferor shall have the
right to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section.
Section 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative
33
<PAGE> 34
at North Tower, World Financial Center, New York, New York 10281-1201, attention
of Theodore F. Breck; notices to the Transferor or Ryder shall be directed to it
at 3600 N.W. 82nd Avenue, Miami, Florida 33166, attention of Treasury 2C (in the
case of Ryder) or to the Transferor General Partner at 3600 N.W. 82nd Avenue,
Miami, Florida 33166, attention of Treasury 2C (in the case of the Transferor).
Section 12. PARTIES. This Agreement shall inure to the benefit of and
be binding upon each of the Underwriters, the Transferor, Ryder and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Transferor, Ryder and their respective successors and
the controlling persons, directors and officers referred to in Sections 6 and 7
and their heirs and legal representatives any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Transferor,
Ryder and their respective successors, and the controlling persons, directors
and officers referred to in Sections 6 and 7 and their heirs and legal
representatives and for the benefit of no other person, firm or corporation. No
purchaser of Senior Notes from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
Section 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 14. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not effect the
construction hereof.
34
<PAGE> 35
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Transferor and Ryder a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the Underwriters, the Transferor and Ryder in accordance
with its terms.
Very truly yours,
RYDER FUNDING LP
By:
---------------------------------
Name:
Title:
RYDER TRUCK RENTAL, INC.
By:
---------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
------------------------------
Authorized Signatory
For itself and as Representative of the other Underwriters named in
Schedule A hereto.
<PAGE> 36
SCHEDULE A
<TABLE>
<CAPTION>
Principal Amount Principal Amount Principal Amount
of Class A-1 of Class A-2 of Class A-3
Name of Underwriter Senior Notes Senior Notes Senior Notes
- ------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated $__________ $__________ $__________
First Union Securities, Inc. $__________ $__________ $__________
Salomon Smith Barney $__________ $__________ $__________
Total $30,000,000 $58,000,000 $58,000,000
</TABLE>
<TABLE>
<CAPTION>
Principal Amount Principal Amount
of Class A-4 of Class A-5
Name of Underwriter Senior Notes Senior Notes
- ------------------- ---------------- -----------------
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated __________ __________
First Union Securities, Inc. __________ __________
Salomon Smith Barney __________ __________
Total $52,000,000 $84,900,000
</TABLE>
SA-1
<PAGE> 1
Exhibit 3.1
CERTIFICATE OF FORMATION
OF
RYDER TRUCK RENTAL III LLC
This Certificate of Formation of Ryder Truck Rental III LLC (the
"LLC") is being duly executed and filed by W. Daniel Susik, as an authorized
person, to form a limited liability company under the Delaware Limited
Liability Company Act (6 Del.C. ss.18-101 et seq.)
FIRST. The name of the limited liability company formed hereby is
Ryder Truck Rental III LLC.
SECOND. The address of the registered office of the LLC in the State
of Delaware is c/o The Corporation Trust Company, Corporation Trust Center,
1209 Orange Street, Wilmington, Delaware 19801.
THIRD. The name and address of the registered agent for service of
process on the LLC in the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation this 24 day of November, 1997.
/s/ W. Daniel Susik
------------------------------------------
W. Daniel Susik
Authorized Person
<PAGE> 1
Exhibit 3.2
===============================================================================
RYDER TRUCK RENTAL III LLC
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
Between
RYDER TRUCK RENTAL, INC.
and
RTR LEASING II, INC.,
as Members
Dated as of October 1, 1999
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions....................................................1
Section 1.02. Other Definitional Provisions..................................4
ARTICLE TWO
ORGANIZATION OF COMPANY
Section 2.01. Formation......................................................4
Section 2.02. Name and Office................................................4
Section 2.03. Duration.......................................................4
Section 2.04. Registered Office and Registered Agent.........................4
Section 2.05. Execution, Delivery and Filing of Certificate..................5
ARTICLE THREE
PURPOSES
Section 3.01. Purposes.......................................................5
Section 3.02. Power and Authority............................................5
Section 3.03. Limitations on Powers..........................................5
Section 3.04. Company Opportunity............................................6
ARTICLE FOUR
CAPITAL CONTRIBUTIONS; BORROWINGS
Section 4.01. Admission and Contributions of Initial Members.................6
Section 4.02. Additional Capital Contributions...............................6
Section 4.03. Withdrawals....................................................7
Section 4.04. Borrowings.....................................................7
Section 4.05. Additional Members.............................................7
i
<PAGE> 3
Page
----
ARTICLE FIVE
MANAGEMENT
Section 5.01. Powers of the Members..........................................7
Section 5.02. Limitations on Powers of Members...............................8
Section 5.03. Self-Dealing...................................................8
Section 5.04. Standard of Care; Liability....................................9
Section 5.05. Compensation...................................................9
Section 5.06. Meetings of Members............................................9
Section 5.07. Consent........................................................9
Section 5.08. Independent Member.............................................9
Section 5.09. Managers......................................................10
ARTICLE SIX
POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS
Section 6.01. Unanimous Vote Required.......................................10
Section 6.02. Voting on Bankruptcy or Insolvency............................10
ARTICLE SEVEN
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
Section 7.01. Capital Accounts..............................................11
Section 7.02. Allocation of Profits and Losses..............................11
Section 7.03. Distributions.................................................11
ARTICLE EIGHT
EXCULPATION OF LIABILITY; INDEMNIFICATION
Section 8.01. Exculpation of Liability......................................11
Section 8.02. Indemnification...............................................11
Section 8.03. Fiduciary Duty................................................12
ii
<PAGE> 4
Page
----
ARTICLE NINE
TERM OF COMPANY
Section 9.01. Commencement..................................................12
Section 9.02. Dissolution...................................................12
ARTICLE TEN
APPLICATION OF ASSETS
Section 10.01. Application of Assets........................................13
Section 10.02. Termination..................................................13
Section 10.03. Claims of the Members........................................13
ARTICLE ELEVEN
RESTRICTION ON TRANSFERS OF INTERESTS
Section 11.01. Restriction on Transfers of Interests........................14
ARTICLE TWELVE
INVESTMENT REPRESENTATION
Section 12.01. Investment Representation....................................14
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.01. Limitations on Amendment.....................................14
Section 13.02. Books of Account; Reports....................................14
Section 13.03. Bank Accounts and Investment of Funds........................15
Section 13.04. Accounting Decisions.........................................15
Section 13.05. Federal Income Tax Elections.................................15
Section 13.06. Entire Agreement.............................................15
Section 13.07. Notices......................................................15
Section 13.08. Consent of Members...........................................15
iii
<PAGE> 5
Page
----
Section 13.09. Further Assurances...........................................16
Section 13.10. Binding Effect...............................................16
Section 13.11. Severability.................................................16
Section 13.12. Table of Contents and Headings...............................16
Section 13.13. Counterparts.................................................16
Section 13.14. Governing Law................................................16
EXHIBITS
Exhibit A - Members; Capital Contributions; Membership Percentages.......A-1
iv
<PAGE> 6
LIMITED LIABILITY COMPANY AGREEMENT
This Amended and Restated Limited Liability Company Agreement, dated
as of October 1, 1999, is between Ryder Truck Rental, Inc., a Florida
corporation, and RTR Leasing II, Inc., a Delaware corporation (collectively,
the "Members").
WHEREAS, pursuant to that certain limited liability company agreement,
dated as of April 23, 1998 (the "Original LLC Agreement"), between the Members
and Ryder Truck Rental III LLC, a Delaware limited liability company, was
formed pursuant to the Delaware Limited Liability Company Act by causing a
Certificate of Formation to be filed with the office of the Secretary of State
of the State of Delaware on April 23, 1998 and by entering into the Original
LLC Agreement; and
WHEREAS, the Members desire to amend and restate the Original LLC
Agreement in its entirety.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows.
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions. Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in the Origination
Trust Agreement. As used in this Agreement, the following terms shall have the
following meanings:
"Act" means the Delaware Limited Liability Company Act (6 Del. C.
ss.18-101 et seq.), as amended.
"Affiliate" of any person or entity means any other person or entity
that (i) directly or indirectly controls, is controlled by or is under common
control with such person or entity (excluding any trustee under, or any
committee with responsibility for administering, any employee benefit plan) or
(ii) is an officer or director of such person or entity. For purposes of this
definition, a person or entity shall be deemed to be "controlled by" another
person or entity if such other person or entity possesses, directly or
indirectly, the power (i) to vote 5% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of directors,
members or managing partners of such person or entity or (ii) to direct or
cause the direction of the management and policies of such person or entity,
whether by contract or otherwise.
"Agreement" means this Amended and Restated Limited Liability Company
Agreement as it may be amended, restated or supplemented from time to time.
<PAGE> 7
"Bankruptcy" means, with respect to any Person, if such Person (i)
makes an assignment for the benefit of creditors, (ii) files a voluntary
petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has
entered against it an order for relief, in any bankruptcy or insolvency
proceedings, (iv) files a petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation or similar
relief under any statute, law or regulation, (v) files an answer or other
pleading admitting or failing to contest the material allegations of a petition
filed against it in any proceeding of this nature, (vi) seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator of the
Person or of all or any substantial part of its properties, or (vii) if 120
days after the commencement of any proceeding against the Person seeking
reorganization, arrangement, composition, readjustment, liquidation or similar
relief under any statute, law or regulation, if the proceeding has not been
dismissed, or if within 90 days after the appointment without such Person's
consent or acquiescence of a trustee, receiver or liquidator of such Person or
of all or any substantial part of its properties, the appointment is not
vacated or stayed, or within 90 days after the expiration of any such stay, the
appointment is not vacated. The foregoing definition of "Bankruptcy" is
intended to replace and shall supersede and replace the definition
of"Bankruptcy" set forth in Sections 18-101(1) and 18-304 of the Act.
"Capital Accounts" shall have the meaning set forth in Section 7.01.
"Capital Contributions" means the amount of all cash (whether in the
form of money, a note payable upon demand or a combination thereof) or the
agreed upon value of other property or services contributed by the Members to
the Company.
"Certificate" means the Certificate of Formation of the Company,
including any restatements or amendments, filed with the Delaware Secretary of
State.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Ryder Truck Rental III LLC, a Delaware limited
liability company, and its successors.
"Covered Person" shall have the meaning set forth in Section 8.03.
"Delaware Secretary of State" means the Secretary of State of the
State of Delaware.
"Effective Date" means October 1, 1999.
"Fiscal Year" means the taxable year of the holder of the Majority
Interest.
"Independent Director" means an individual who is not (i) a director,
officer or employee of any Affiliate of Ryder (other than any limited or
special purpose corporation or limited liability company similar to the
Company); (ii) a person related to any officer or director of any Affiliate of
Ryder; (iii) a direct or indirect holder of more than 10% of any voting
securities of any Affiliate of Ryder; or (iv) a person related to a direct or
indirect holder of more than 10% of any voting securities of any Affiliate of
Ryder.
2
<PAGE> 8
"Independent Member" shall have the meaning set forth in Section 5.08.
"Majority Interest" means the interest in the Company of Ryder.
"Majority Members" means those Members holding more than 50% of the
Membership Percentages and more than 50% of the Capital Account balances of the
Members.
"Managers" means RTR Leasing II, Inc. and such other persons or
entities that may be designated from time to time by the Members as managers of
the Company to perform such functions for the Company as may be determined from
time to time by the Members. A Manager shall be deemed to be a "manager" of the
Company within the meaning of Section 18-101 of the Act.
"Members" means those persons or entities designated as Members of the
Company in Exhibit A. Any reference to a Member shall, unless the context
clearly requires otherwise, include a reference to its predecessors and
successors in interest.
"Membership Percentages" means the Members' respective limited
liability company interests in the Company as set forth in Exhibit A.
"Original LLC Agreement" has the meaning set forth in the Recitals.
"Origination Trust" means Ryder Truck Rental LT, a Delaware business
trust.
"Origination Trust Agreement" means that certain second amended and
restated trust agreement, dated as of February 1, 1998 among Ryder Truck Rental
I LP and Ryder Truck Rental II LP, as Grantors and UTI Beneficiaries, Ryder, as
Administrative Agent, RTRT, Inc., as Trustee, Delaware Trust Capital
Management, Inc., as Delaware Trustee, and U.S. Bank National Association, as
Trust Agent, as the same may be amended, supplemented or modified from time to
time.
"Partnership" means Ryder Funding LP, a Delaware limited partnership,
and its successors.
"Partnership Act" means the Delaware Revised Uniform Limited
Partnership Act (6 Del. C. ss.ss. 17-101, et seq.), as amended.
"Partnership Agreement" means the Amended and Restated Limited
Partnership Agreement of the Partnership, dated as of the Effective Date,
between Ryder Truck Rental III LLC and Ryder, as amended, restated or
supplemented from time to time.
"Profits" and "Losses" mean the Company's taxable income or loss for
each Fiscal Year (or other period) determined in accordance with the accounting
methods followed for federal income tax purposes, except that any income of the
Company that is exempt from federal income tax and not otherwise taken into
account in computing Profits and Losses shall be added to such taxable income
or loss.
3
<PAGE> 9
"Ryder" means Ryder Truck Rental, Inc., a Florida corporation, and its
successors.
Section 1.02. Other Definitional Provisions.
(a) For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used herein
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to words such as "herein", "hereof" and the like shall refer to
this Agreement as a whole and not to any particular part, article or section
within this Agreement, (iii) references to a section such as "Section 1.01" and
the like shall refer to the applicable section of this Agreement, (iv) the term
"include" and all variations thereof shall mean "include without limitation"
and (v) the term "or" shall include "and/or".
(b) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles in effect from time to
time. To the extent that the definitions of accounting terms in this Agreement
or in any such certificate or other document are inconsistent with the meanings
of such terms under such generally accepted accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document shall control.
ARTICLE TWO
ORGANIZATION OF COMPANY
Section 2.01. Formation. The parties hereto formed the Company as a
limited liability company pursuant to the Original LLC Agreement and the Act
and hereby agree that the rights, duties and liabilities of the Members and
Managers shall be as provided in the Act, except as otherwise provided in this
Agreement. Pursuant to Section 18 201(d) of the Act, this Agreement shall
become effective, and the Original LLC Agreement is hereby amended and restated
in its entirety, as of the Effective Date.
Section 2.02. Name and Office. The name of the Company shall be Ryder
Truck Rental III LLC, and its office shall be located at 3600 N.W. 82nd Avenue,
Miami, Florida 33166, or such other place as the Members may determine from
time to time.
Section 2.03. Duration. The term of the Company commenced on the date
the Certificate was filed on April 23, 1997 in the office of the Delaware
Secretary of State and shall continue until December 1, 2097, unless the
Company is dissolved before such date in accordance with the provisions of this
Agreement. The existence of the Company as a separate legal entity shall
continue until cancellation of the Certificate in the manner required by the
Act.
Section 2.04. Registered Office and Registered Agent. The Company's
initial registered office shall be at the office of its registered agent at
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and
4
<PAGE> 10
the name of its initial registered agent at such address shall be The
Corporation Trust Company. The registered office and registered agent may be
changed from time to time in accordance with the Act. If the registered agent
shall ever resign, the Company shall promptly appoint a successor.
Section 2.05. Execution, Delivery and Filing of Certificate. W. Daniel
Susik, as an "authorized person" within the meaning of the Act, executed,
delivered and filed the Certificate with the Delaware Secretary of State on
April 23, 1998.
ARTICLE THREE
PURPOSES
Section 3.01. Purposes. The purposes for which the Company is formed
are:
(a) to act as general partner of the Partnership and, in such
capacity permit the Partnership to engage in the activities permitted
by the Partnership Agreement and the Partnership Act;
(b) to take all permitted action in its capacity as general
partner of the Partnership, to negotiate, authorize, execute, deliver,
assume or perform any agreement, instrument, obligation or document
relating to the activities set forth in clause (a) above, including,
but not limited to the Basic Documents; and
(c) to engage in any activity and to exercise any powers
permitted to it as general partner under the Partnership Agreement or
to limited liability companies generally under the laws of the State
of Delaware that are related or incidental to the foregoing and
necessary, convenient or advisable to accomplish the foregoing.
Section 3.02. Power and Authority. The Company shall have the power
and authority to take any and all actions necessary, appropriate, proper,
advisable, incidental or convenient to accomplish or for the furtherance of the
purposes set forth in Section 3.01. The Company may serve as a general partner
of Ryder Funding LP. The Company and RTR Leasing II, Inc. or W. Daniel Susik,
on behalf of the Company, may enter into and perform the Limited Partnership
Agreement of Ryder Funding LP without any further act, vote or approval of any
Member, Manager or other person, notwithstanding any other provision of this
Agreement, the Act or other applicable law, rule or regulation.
Section 3.03. Limitations on Powers. Notwithstanding any other
provision of this Agreement and any provision of law, the Company shall not do
any of the following:
(a) engage in any business or activity other than as set
forth in this Agreement;
5
<PAGE> 11
(b) without the unanimous affirmative vote of the Members,
(i) dissolve or liquidate, in whole or in part, or institute
proceedings to be adjudicated bankrupt or insolvent, (ii) consent to
the institution of bankruptcy or insolvency proceedings against it,
(iii) file a petition seeking or consent for reorganization or relief
under any applicable federal or state law relating to bankruptcy, (iv)
consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator or other similar official with respect to itself
or a substantial part of its property, (v) make a general assignment
for the benefit of creditors, (vi) admit in writing its inability to
pay its debts generally as they become (vii) institute or join in any
institution of any bankruptcy, insolvency, liquidation, reorganization
or arrangement proceedings or other similar proceedings under any
federal or state law, or (viii) take any limited liability company
action in furtherance of the actions set forth in clauses (i) through
(vii) above;
(c) without the unanimous affirmative vote of the Members,
merge or consolidate with any other corporation, company or entity or
sell all or substantially all of its assets or acquire all or
substantially all of the assets or capital stock or other ownership
interest of any other corporation, company or entity;
(d) without the unanimous affirmative vote of the Members,
merge or consolidate with any other corporation, company or entity or
sell all or substantially all of its assets or acquire all or
substantially all of the assets or capital stock or other ownership
interest of any other corporation, company or entity; or
(e) cause any entity of which the Company is a partner or
member to take any action which is inconsistent with such entity's
organizational documents.
Section 3.04. Company Opportunity. No Member need afford the Company
or any other Member the opportunity of investing or otherwise participating in
any other enterprise, regardless of whether such enterprises, but for this
sentence, would be deemed an opportunity of the Company. Nothing in this
Agreement shall prohibit any Member from engaging in any other business
activity, whether or not competitive with, similar to, or within the scope of
the activities conducted by or on behalf of the Company.
ARTICLE FOUR
CAPITAL CONTRIBUTIONS; BORROWINGS
Section 4.01. Admission and Contributions of Initial Members.
(a) Each of Ryder and the Independent Member were admitted as members
of the Company at the time such entity (i) executed the Original LLC Agreement
or a counterpart signature page to the Original LLC Agreement and (ii) was
listed as a Member on Exhibit A attached to the Original LLC Agreement (and a
copy of that exhibit appears as Exhibit A hereto).
6
<PAGE> 12
(b) The Members made the Capital Contributions set forth next to their
names in Exhibit A upon the formation of the Company. No interest shall accrue
on any Capital Contribution made to the Company.
Section 4.02. Additional Capital Contributions. The Members shall not
be obligated to make additional Capital Contributions except upon the consent
of all Members.
Section 4.03. Withdrawals. No Member shall be entitled to be repaid
any portion of its Capital Account or withdraw from the Company without the
consent of all Members or as otherwise provided in this Agreement.
Section 4.04. Borrowings. The Company may borrow sums to be used for
any of the business purposes described in Section 3.01; provided, however, that
any such borrowing shall require the prior approval of the Majority Members and
shall not be prohibited by this Agreement, any applicable law, regulation or
agreement. Any Member may advance such sums to the Company as approved in
writing by the Majority Members. Any amounts borrowed from a Member shall not
constitute a contribution to the capital of the Company but shall constitute a
debt of the Company that shall be repaid before any distributions to the
Members. No Member shall have any obligation under this Agreement to make any
such loan or advance.
Section 4.05. Additional Members. No additional Members shall be
admitted to the Company without the unanimous consent of the Members.
ARTICLE FIVE
MANAGEMENT
Section 5.01. Powers of the Members.
(a) The Company shall be managed by its Members. Subject to the other
provisions of this Article and Article Six, each Member shall have the
authority, on behalf of the Company, to do all things appropriate for the
accomplishment of the purposes of the Company, including, (i) taking the
actions described in Section 3.01; (ii) disbursing Company funds for Company
purposes; (iii) investing and reinvesting Company funds; (iv) executing
contracts, notes, mortgages and other agreements and instruments; (v) employing
attorneys, accountants, Managers or other agents, which may include Affiliates
of the Company; (vi) paying all Company obligations; (vii) performing all
ministerial acts and duties relating to the payment of all indebtedness, taxes
and assessments due or to become due with regard to any property of the
Company; (viii) purchasing and maintaining insurance on behalf of the Company
against any liability or expense asserted against or incurred by or on behalf
of the Company; (ix) transacting the Company's business under an assumed name
or name other than its name as set forth in the Certificate; (x) appointing any
Member or other person as agent for service of process on the Company as
required by the law of any jurisdiction in which the Company transacts
business; (xi) commencing, prosecuting or defending any proceeding in the
Company's name; and (xii) doing such other acts as may facilitate the Company's
exercise of its powers; provided, however, that all such acts shall fall within
the purposes of the Company as set forth in Section 3.01.
7
<PAGE> 13
(b) Notwithstanding anything in this Agreement to the contrary, the
Company shall at all times have at least one Independent Member, and no action
of the type described in Article Six shall occur without the consent of each
Independent Member.
(c) Each Member irrevocably appoints the each other Member as its
attorney-in-fact on its behalf and in its stead to execute and swear to any
amendment to the Certificate and file any writing, and to give any notice that
may be required by any rule or law and that may be necessary or appropriate in
order to effect any action by or on behalf of the Company or the Members taken
as provided in this Agreement or that may be necessary or appropriate to
correct any errors or omissions. This power of attorney is coupled with an
interest and shall not be revoked by the act of any Member. This power of
attorney shall survive and not be affected by an assignment by any Member of
its limited liability company interest in the Company; provided, however, that
where a Member's entire limited liability company interest is assigned to an
assignee who becomes a substitute Member in its stead, such power shall survive
for the sole purpose of enabling such Member to effect such substitution. Each
Member shall provide seven days' prior written notice of actions to be taken as
attorney-in-fact on behalf of another Member and the acting Member shall be
authorized to take such actions unless the other Member objects in writing
during such notice period.
(d) A copy of the Certificate shall be provided to each Member upon
written request to the Company.
(e) Subject to the other provisions of this Article and Article Six,
the Members shall have full power to act for and to bind the Company to the
extent provided by Delaware law. Every contract, note, mortgage, lease, deed or
other instrument or agreement executed by any Member shall be conclusive
evidence that at the time of execution, the Company was then in existence, that
this Agreement had not theretofore been terminated or amended in any manner and
that the execution and delivery of such instrument was duly authorized by the
Members. A Manager may bind the Company only to the extent authorized by the
Members.
Section 5.02. Limitations on Powers of Members. Notwithstanding any
other provision of this Agreement, no act shall be taken, sum expended,
decision made, obligation incurred or power exercised by any Member on behalf
of the Company, without prior written notice to all Members outlining the
proposed action followed by the written consent of a Majority Interest with
respect to: (a) any mortgage, grant of security interest, pledge or encumbrance
of any asset of the Company; (b) any merger of the Company with another entity;
(c) a transaction involving an actual or potential conflict of interest between
a Member and the Company; (d) any material change in the character of the
business and affairs of the Company; or (e) any act that would contravene in a
material respect any provision of this Agreement or the Act.
Section 5.03. Self-Dealing. Any Member and any Affiliate thereof may
deal with the Company, directly or indirectly, as vendor, purchaser, employee,
agent or otherwise. No contract or other act of the Company shall be voidable
8
<PAGE> 14
or affected in any manner by the fact that a Member or an Affiliate thereof is
directly or indirectly interested in such contract or other act apart from its
interest as a Member, nor shall any Member or an Affiliate thereof be
accountable to the Company or the other Members in respect of any profits
directly or indirectly realized by reason of such contract or other act, and
such interested Member shall be eligible to vote or take any other action as a
Member in respect of such contract or other act as it would be entitled were it
or its Affiliate not interested therein. Notwithstanding the foregoing, (a) any
direct or indirect interest of a Member or an Affiliate thereof in any contract
or other act, other than its interest as a Member, shall be disclosed to all
other Members, (b) such contract or other act shall be approved by a Majority
Interest unless the same is specifically authorized herein and (c) the Members
shall not receive or hold any property of the Company as collateral security in
respect of any claim against the Company.
Section 5.04. Standard of Care; Liability. Each Member and its
respective directors, officers, stockholders, partners, members and Affiliates
shall discharge its duties in good faith, with the care an ordinarily prudent
person in a like position would exercise under similar circumstances, and in a
manner he reasonably believes to be in the best interests of the Company as
required by this Agreement or the Act. A Member shall not be liable for
monetary damages to the Company for any breach of any such duties except for
receipt of a financial benefit to which the Member is not entitled, voting for
or assenting to a distribution to Members in violation of this Agreement or the
Act, or a knowing violation of the law.
Section 5.05. Compensation. The Company shall reimburse each Member
for any reasonable out-of-pocket expenses incurred on behalf of the Company. In
addition, any Member may receive reasonable compensation for any services
rendered to the Company approved by the Majority Interest.
Section 5.06. Meetings of Members. All Members shall be entitled to
vote on any matter submitted to a vote of the Members. Unless a greater vote is
required by the Act or this Agreement, the affirmative vote of the Majority
Members shall be required. Meetings of Members for the transaction of such
business as may properly come before the Members may be held at such place, on
such date and at such time as the Majority Interest shall determine. Special
meetings of Members for any proper purpose or purposes may be called at any
time by the holders of at least 25% of the Membership Percentages of all
Members. The Company shall deliver or mail written notice stating the date,
time, place and purposes of any meeting to each Member entitled to vote at the
meeting. Such notice shall be given not less than ten nor more than 60 days
before the date of the meeting.
Section 5.07. Consent. Any action required or permitted to be taken at
an annual or special meeting of the Members may be taken without a meeting, if
the Members unanimously consent, in writing, to take the proposed action. Every
written consent shall bear the date of consent in lieu of meeting and the
signature of each Member who signs the consent.
Section 5.08. Independent Member. The Company shall at all times have
at least one Member (each, an "Independent Member") that shall be a special
purpose corporation formed pursuant to a charter or articles of incorporation
that (a) limits its business purposes and activities and (b) requires the
9
<PAGE> 15
unanimous consent of its entire board of directors (without any vacancies),
including the affirmative vote of at least two Independent Directors before
such member may approve, permit or take any action, or cause any action to be
taken in respect of the following actions with respect to each limited
liability company of which it is a member, to: (i) institute proceedings to
have itself adjudicated bankrupt or insolvent, (ii) consent to the institution
of bankruptcy or insolvency proceedings against it, (iii) file a petition
seeking, or consent to, such limited liability company's reorganization or
relief under any applicable federal or state law relating to bankruptcy, (iv)
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or other similar official of such limited liability company or a
substantial part of its property, (v) make any assignment for the benefit of
creditors, (vi) admit in writing its inability to pay its debts generally as
they become due, (vii) institute, or join in any institution of, any
bankruptcy, insolvency, liquidation, reorganization or arrangement proceedings
or other proceedings under any federal or state bankruptcy or similar law
against any entity in which such limited liability company holds an ownership
interest or (viii) take any action in furtherance of the actions set forth in
clauses (i) through (vii) above. As of the Effective Date, RTR Leasing II, Inc.
is the Independent Member.
Section 5.09. Managers. Except as otherwise provided by the Act:
(a) the debts, obligations and liabilities of the Company,
whether arising in contract, tort or otherwise, shall be solely the
debts, obligations and liabilities of the Company, and no Manager
shall be obligated personally for any such debt, obligation, or
liability of the Company solely by reason of being a Manager of the
Company;
(b) no Manager shall be required to make any Capital
Contribution in the form of cash to the Company; and
(c) no Manager shall be entitled to receive any Profits or
liable for any Losses.
ARTICLE SIX
POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS
Section 6.01. Unanimous Vote Required. Notwithstanding any other
provision of this Agreement and any provision of law that otherwise so empowers
the Company, the Company shall not, without (a) the prior written consent of
the Owner Trustee and (b) the affirmative vote of 100% of the Members of the
Company, including the Independent Member: (i) institute proceedings to have
itself adjudicated bankrupt or insolvent; (ii) consent to the institution of
bankruptcy or insolvency proceedings against it; (iii) file a petition seeking,
or consent to, reorganization or relief under any applicable federal or state
law relating to bankruptcy; (iv) consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or a substantial part of its property; (v) make any assignment for the
benefit of creditors; (vi) admit in writing its inability to pay its debts
generally as they become due; or (vii) take any action in furtherance of the
actions set forth in clauses (i) through (vi) above.
10
<PAGE> 16
Section 6.02. Voting on Bankruptcy or Insolvency. All Members,
including each Independent Member, shall be entitled to vote on any proposal of
the type described in Section 6.01. The affirmative vote of 100% of the
Members, including each Independent Member, entitled to vote on such a proposal
shall be required for such a proposal to be adopted.
ARTICLE SEVEN
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
Section 7.01. Capital Accounts. A capital account shall be maintained
for each Member (each, a "Capital Account"), to which contributions and Profits
shall be credited and against which distributions and Losses shall be charged.
Capital Accounts shall be maintained in accordance with the accounting
principles of Code Section 704 and the Treasury Regulations thereunder.
Section 7.02. Allocation of Profits and Losses. Profits and Losses
shall be determined as of the end of each Fiscal Year of the Company and shall
be allocated to Ryder. RTR Leasing II, Inc. shall have no interest in Profits
and Losses.
Section 7.03. Distributions.
(a) The Company shall distribute to Ryder such sums as the Majority
Interest determines to be available for distribution and not required to
provide for current or anticipated Company needs. All distributions shall be
made to or upon the order of Ryder.
(b) No distributions shall be declared and paid unless, after the
distribution is made, the Company would be able to pay its debts as they become
due in the usual course of business and the assets of the Company are in excess
of the sum of (i) the Company's liabilities and (ii) the amount that would be
needed to satisfy the preferential rights of other Members upon dissolution
that are superior to the rights of the Members receiving the distribution.
(c) The Company shall not be required to make a distribution to a
Member on account of its interest in the Company if such distribution would
violate Section 18-607 of the Act or other applicable law.
ARTICLE EIGHT
EXCULPATION OF LIABILITY; INDEMNIFICATION
Section 8.01. Exculpation of Liability. Except as otherwise provided
by the Act, the debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the Company, and no Member or Manager shall be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being a Member or Manager of the Company.
11
<PAGE> 17
Section 8.02. Indemnification. The Company hereby agrees to indemnify
each Member, Manager, employee or agent of the Company, and each director,
officer, employee or Affiliate of a Member, who was or is a party or is
threatened to be made a party to a threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
and whether formal or informal (other than an action by or in the right of the
Company) by reason of the fact that such person is or was a Member, employee or
agent of the Company against expenses (including reasonable attorneys' fees),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with the action, suit or
proceeding.
Section 8.03. Fiduciary Duty. To the extent that, at law or in equity,
a Member, director, officer, employee or Affiliate of a Member, or a Manager
(each, a "Covered Person") has duties (including fiduciary duties) and
liabilities relating thereto to the Company or to any other Covered Person, a
Covered Person acting under this Agreement shall not be liable to the Company
or to any Member for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they restrict
the duties and liabilities of a Covered Person otherwise existing at law or in
equity, are agreed by the Members to replace such other duties and liabilities
of such Covered Person.
ARTICLE NINE
TERM OF COMPANY
Section 9.01. Commencement. The term of the Company commenced upon the
filing of the Certificate with the Delaware Secretary of State. The bankruptcy
of a Member or the occurrence of any other event under Section 18-304 of the
Act shall not cause a Member to cease to be a Member of the Company and upon
the occurrence of such an event, the business of the Company shall continue
without dissolution.
Section 9.02. Dissolution.
(a) The Company shall be dissolved, and its affairs shall be wound up
upon the first to occur of the following: (i) the termination of the legal
existence of the last remaining member of the Company or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the Company in the Company unless the business of the Company is
continued in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act. Upon the
occurrence of any event that causes the last remaining member of the Company to
cease to be a member of the Company, to the fullest extent permitted by law,
the personal representative of such member is hereby authorized to, and shall,
within 90 days after the occurrence of the event that terminated the continued
membership of such member in the Company, agree in writing (i) to continue the
Company and (ii) to the admission of the personal representative or its nominee
or designee, as the case may be, as a substitute member of the Company,
effective as of the occurrence of the event that terminated the continued
membership of the last remaining member of the Company in the Company.
12
<PAGE> 18
(b) Notwithstanding any other provision of this Agreement, the
Bankruptcy of a Member shall not cause the Member to cease to be a member of
the Company and upon the occurrence of such an event, the business of the
Company shall continue without dissolution.
(c) Notwithstanding any other provision of this Agreement, each Member
waives any right it might have to agree in writing to dissolve the Company upon
the Bankruptcy of the Member, or the occurrence of an event that causes the
Member to cease to be a member of the Company.
(d) In the event of dissolution, the Company shall conduct only such
activities as are necessary to wind up its affairs (including the sale of the
assets of the Company in an orderly manner), and the assets of the Company
shall be applied in the manner, and in the order of priority, set forth in
Section 18-804 of the Act.
(e) The Company shall terminate when (i) all of the assets of the
Company, after payment of or due provision for all debts, liabilities and
obligations of the Company shall have been distributed to each Member in the
manner provided for in this Agreement and (ii) the Certificate shall have been
canceled in the manner required by the Act.
ARTICLE TEN
APPLICATION OF ASSETS
Section 10.01. Application of Assets. Upon dissolution of the Company,
the Company shall cease carrying on its business and affairs and shall commence
winding up of the Company's business and affairs and complete the winding up as
soon as practicable. The Company's affairs shall be concluded by a Member or
Members selected in writing by the Majority Members. The assets of the Company
may be liquidated or distributed in kind, as determined by the Majority
Interest, and the same shall first be applied to the payment of, or to a
reasonable reserve for the payment of, the Company's liabilities (including
such provision for contingent, conditional or unmatured liabilities as the
Majority Interest shall deem appropriate) and then to Ryder. If the assets of
the Company shall not be sufficient to pay all of the liabilities of the
Company, to the fullest extent permitted by the Act, no assets of the Company
may be sold or disposed of without the written consent of all of the holders of
outstanding Trust Certificates. To the extent that Company assets cannot either
be sold without undue loss or readily divided for distribution in kind to the
Members, then the Company may, as determined by the Majority Interest, convey
those assets to a trust or other suitable holding entity established for the
benefit of the Members in order to permit the assets to be sold without undue
loss and the proceeds thereof distributed to the Members at a future date. The
legal form of the holding entity, the identity of the trustee or other
fiduciary and the terms of its governing instrument shall be determined by the
Majority Interest.
13
<PAGE> 19
Section 10.02. Termination. The Company shall terminate when all the
assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to the
Members in the manner provided for in this Article and the Certificate shall
have been cancelled in the manner required by the Act.
Section 10.03. Claims of the Members. The Members and former Members
shall look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and former
Members shall not have recourse against the Company or any other Member or
Manager.
ARTICLE ELEVEN
RESTRICTION ON TRANSFERS OF INTERESTS
Section 11.01. Restriction on Transfers of Interests. No Member may
assign, pledge or otherwise transfer its interest in the Company in whole or
part. Any attempt by a Member to transfer its interest shall be null and void.
ARTICLE TWELVE
INVESTMENT REPRESENTATION
Section 12.01. Investment Representation. The Members represent to
each other and to the Company that they are acquiring their respective
interests in the Company for their own accounts, and without a view to selling
or pledging them.
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.01. Limitations on Amendment. The Company shall not,
without the prior written consent of each Rating Agency, amend, alter, change
or repeal Article Three, Section 5.08, Article Six or this Section. Subject to
the foregoing limitation, the Company reserves the right to amend, alter,
change or repeal any provision contained in this Agreement in the manner now or
hereafter prescribed by statute or applicable law, and all rights conferred
upon Members herein are granted subject to this reservation; provided that this
Agreement may not be amended without affirmative vote of 100% of the Members of
the Company, including the Independent Members.
14
<PAGE> 20
Section 13.02. Books of Account; Reports.
(a) The Company shall keep true and complete books of account and
records of all Company transactions. The books of account and records shall be
kept at the principal office of the Company. The Company shall maintain at such
office (i) a list of names and addresses of all Members; (ii) a copy of the
Certificate; (iii) copies of the Company's federal, state and local income tax
returns and reports for the three most recent years; (iv) copies of this
Agreement; and (v) copies of the financial statements of the Company for the
three most recent years. Such Company records shall be available to any Member
or its designated representative during ordinary business hours at the
reasonable request and expense of such Member.
(b) The Company shall use its best efforts to furnish, or cause to be
furnished, to Members the following items on the date indicated: (i) annually
by December 31, (A) an annual report consisting of an income statement for the
prior year and a balance sheet as of the year ended and (B) Member information
tax returns (Schedule K-1) and (ii) as required, such other information
concerning the Company and the property of the Company as may be appropriate in
order to make full and fair disclosure to the Members of the current financial
and operating conditions of the Company.
Section 13.03. Bank Accounts and Investment of Funds. All funds of the
Company shall be deposited in its name in such checking accounts, savings
accounts, time deposits or certificates of deposit or shall be invested in such
other manner, as shall be designated by the Majority Interest from time to
time. Withdrawals shall be made upon such signature or signatures as the
Majority Interest may designate.
Section 13.04. Accounting Decisions. All decisions as to accounting
matters, except as specifically provided to the contrary herein, shall be made
by the Majority Interest in accordance with generally accepted accounting
principles consistently applied. Such decisions shall be acceptable to the
accountants retained by the Company, and the Majority Interest may rely upon
the advice of the accountants as to whether such decisions are in accordance
with generally accepted accounting principles.
Section 13.05. Federal Income Tax Elections. The Company shall, to the
extent permitted by applicable law and regulations and upon obtaining any
necessary approval of the Commissioner of Internal Revenue, elect to use such
methods of depreciation, and make all other federal income tax elections in
such manner, as the Majority Interest determines to be most favorable to the
Members. The Majority Interest may rely upon the advice of the accountants
retained by the Company as to the availability and effect of all such
elections. The Majority Interest shall elect to treat the Company as a single
member entity formed as an agent of Ryder and not as separate corporation or
partnership for federal and applicable state income tax purposes.
Section 13.06. Entire Agreement. This Agreement constitutes the entire
Agreement between the parties and may be modified only as provided herein. No
representations or oral or implied agreements have been made by any party
15
<PAGE> 21
hereto or its agent, and no party to this Agreement has relied upon any
representation or agreement not set forth herein. This Agreement supersedes any
and all other agreements, either oral or written, among the Company and its
Members.
Section 13.07. Notices. Except as provided below, all communications
and notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy numbers set forth on Exhibit A hereto,
or at such other address or telecopy number as such party may hereafter specify
for the purposes of notice to the other party hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon receipt
thereof, (ii) if given by mail, three business days after the time such
communication is deposited in the mails with first-class postage prepaid or
(iii) if given by any other means, when received at the address specified in
this Section.
Section 13.08. Consent of Members. Various provisions of this
Agreement require or permit the consent, agreement, approval or disapproval,
written or otherwise, of the Members or some specified proportion thereof. In
any such case, the Company may give all Members written notice that any Member
who does not indicate its disapproval by written notice to the Company within a
specified period of time (not less than 30 days after mailing of the notice)
shall be deemed to have given its consent or approval to the action or event or
to have made the agreement referred to in the notice. In such event, any Member
who does not indicate its disapproval by written notice to the Company within
the time specified shall be deemed to have given its written consent, approval,
disapproval or agreement.
Section 13.09. Further Assurances. Upon request of the Company from
time to time, the Members shall do such acts, and execute and deliver to any
other party such additional documents or instruments, as may be reasonably
requested in order to effect the purposes of this Agreement and to better
assure and confirm unto the requesting party its rights, powers and remedies
hereunder.
Section 13.10. Binding Effect. The provisions of this Agreement shall
be binding upon and inure to the benefit of the respective successors and
permitted assigns of the parties hereto. None of the provisions of this
Agreement shall be construed as for the benefit of or as enforceable by any
creditor of the Company or the Members or any other person not a party to this
Agreement.
Section 13.11. Severability. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement, and shall in no way affect the validity or
enforceability of the other covenants, agreements, provisions or terms of this
Agreement.
Section 13.12. Table of Contents and Headings. The Table of Contents
and Article and Section headings herein are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
16
<PAGE> 22
Section 13.13. Counterparts. This Agreement may be executed in any
number of counterparts, each of which so executed and delivered shall be deemed
to be an original, but all of which counterparts shall together constitute but
one and the same instrument. The Company shall have custody of the counterparts
executed in the aggregate by all Members.
Section 13.14. Governing Law. This Agreement shall be governed by, and
all questions with respect to the construction of this Agreement and the rights
and liabilities of the parties hereto shall be determined in accordance with,
the internal laws of the State of Delaware, without regard to any otherwise
applicable principles of conflicts of laws.
17
<PAGE> 23
IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Limited Liability Company Agreement to be duly executed by their respective
officers as of the day and year first above written.
RYDER TRUCK RENTAL, INC.
By:
---------------------------------------
W. Daniel Susik
Treasurer
RTR LEASING II, INC.
By:
---------------------------------------
W. Daniel Susik
Treasurer
<PAGE> 24
EXHIBIT A
Capital Membership
Member's Name and Address Contributions Percentages
- ------------------------- ------------- -----------
RYDER TRUCK RENTAL, INC. $1,000.00 100%
RTR LEASING II, INC. -0- 0%
Total $1,000.00 100%
======== ====
18
<PAGE> 1
Exhibit 3.3
================================================================================
RYDER FUNDING LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
Between
RYDER TRUCK RENTAL III LLC,
as General Partner,
and
RYDER TRUCK RENTAL, INC.,
as Limited Partner
Dated as of October 1, 1999
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions.................................................................................6
Section 1.02. Other Definitional Provisions..............................................................10
ARTICLE TWO
NAME, PURPOSE AND PARTNERS
Section 2.01. Name.......................................................................................10
Section 2.02. Purpose....................................................................................11
Section 2.03. Registered Office..........................................................................11
Section 2.04. Registered Agent...........................................................................11
Section 2.05. Certificate of Limited Partnership and Other Filings.......................................11
Section 2.06. Partners' Addresses........................................................................12
Section 2.07. Authorization to Enter into Certain Agreements.............................................12
Section 2.08. Effective Date..............................................................................8
ARTICLE THREE
CAPITAL ACCOUNTS; LIMITATION OF LIMITED PARTNERS' LIABILITY
Section 3.01. Initial Capital Contributions..............................................................12
Section 3.02. Additional Capital Contributions...........................................................12
Section 3.03. Withdrawal of Capital......................................................................13
Section 3.04. Partnership Interests and Capital Accounts.................................................13
Section 3.05. Limitation of Limited Partners' Liability..................................................13
ARTICLE FOUR
ADMISSION OF ADDITIONAL PARTNERS
Section 4.01. Authority of General Partner to Admit Additional Partners..................................14
Section 4.02. Partnership Interests on Admission of Additional Partners..................................14
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE FIVE
MANAGEMENT OF THE PARTNERSHIP
Section 5.01. Authority of General Partner...............................................................15
Section 5.02. Specific Powers of General Partner.........................................................16
Section 5.03. Powers Requiring Concurrence of Limited Partners...........................................16
Section 5.04. Duties of General Partner..................................................................16
Section 5.05. Compensation of General Partner and Expenses...............................................16
Section 5.06. Scope of Responsibility....................................................................16
Section 5.07. Contracts With Affiliates..................................................................17
Section 5.08. Indemnification............................................................................17
Section 5.09. Limited Partners' Rights...................................................................17
Section 5.10. Partnership Property.......................................................................17
Section 5.11. Duties of the General Partner and Certain Other Persons....................................17
ARTICLE SIX
STATEMENTS AND FISCAL YEAR
Section 6.01. Statements.................................................................................18
Section 6.02. Fiscal Year................................................................................18
ARTICLE SEVEN
FINANCIAL ALLOCATIONS AND DISTRIBUTIONS
Section 7.01. Tax Elections..............................................................................18
Section 7.02. Maintenance of Partners' Capital Accounts..................................................18
Section 7.03. Net Income and Net Loss; Cash Flow.........................................................19
Section 7.04. Special Tax Allocations....................................................................19
Section 7.05. Curative Allocations.......................................................................20
Section 7.06. Other Allocation Rules.....................................................................20
Section 7.07. Allocation of Built-In Gains...............................................................20
Section 7.08. Distribution of Cash Flow and Other Amounts................................................21
Section 7.09. Restricted Distributions...................................................................21
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE EIGHT
NO WITHDRAWAL OF PARTNER; DEATH, LEGAL INCAPACITY, DISSOLUTION OR BANKRUPTCY OF LIMITED PARTNER
Section 8.01. No Withdrawal..............................................................................21
Section 8.02. Death, Legal Incapacity, Dissolution and Bankruptcy........................................21
ARTICLE NINE
NO TRANSFER OF PARTNERSHIP INTERESTS
Section 9.01. No Transfer of Partnership Interests.......................................................21
Section 9.02. Dealing with General Partner...............................................................22
Section 9.03. Compliance With Federal and State Law......................................................22
ARTICLE TEN
TERM AND DISSOLUTION
Section 10.01. Term and Dissolution of Partnership........................................................22
Section 10.02. Distribution after Dissolution.............................................................22
Section 10.03. Dissolution If No General Partner Remaining................................................23
Section 10.04. Reserves...................................................................................23
Section 10.05. Statement..................................................................................23
Section 10.06. Distribution Limited to Partnership Assets.................................................23
Section 10.07. Termination................................................................................24
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Power of Attorney..........................................................................24
Section 11.02. Governing Law and Arbitration..............................................................25
Section 11.03. Successors and Assigns.....................................................................25
Section 11.04. Counterparts; Integration..................................................................25
Section 11.05. No Partition...............................................................................25
Section 11.06. Captions...................................................................................25
Section 11.07. Severability...............................................................................25
Section 11.08. Notices....................................................................................26
Section 11.09. Amendment, Waiver..........................................................................26
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 11.10. Further Assurances.........................................................................26
EXHIBITS
Exhibit A - Gross Asset Value of Initial Capital Contributions................................................A-1
Exhibit B - Initial Partnership Interests.....................................................................B-1
</TABLE>
iv
<PAGE> 6
LIMITED PARTNERSHIP AGREEMENT
This Amended and Restated Limited Partnership Agreement is entered into
as of October 1, 1999, between Ryder Truck Rental III LLC, a Delaware limited
liability company, as general partner (together with any additional or successor
general partners admitted pursuant hereto, the "General Partner"), and Ryder
Truck Rental, Inc., a Florida corporation, as limited partner (together with any
additional or successor limited partners admitted pursuant hereto, the "Limited
Partner").
RECITALS
WHEREAS, Ryder Funding LP is a Delaware limited partnership created
pursuant to a limited partnership agreement, dated as of April 23, 1998 (the
"Original Partnership Agreement"), between the General Partner and the Limited
Partner; and
WHEREAS, the parties hereto desire to amend and restate the Original
Partnership Agreement in its entirety.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS. Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in the Origination
Trust Agreement. The following terms shall have the following meanings:
"ACT" means the Delaware Revised Uniform Limited Partnership Act (6
DEL. C. ss.17-101 ET SEQ.), as amended from time to time.
"ADDITIONAL GENERAL PARTNER" means a Person admitted to the Partnership
as an additional general partner pursuant to Article Four.
"ADDITIONAL LIMITED PARTNER" means a Person admitted to the Partnership
as an additional limited partner pursuant to Article Four.
"AFFILIATE" of any Person means any other Person that (i) directly or
indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with any responsibility
for administering, any employee benefit plan) or (ii) is an officer, director or
partner of such Person. For purposes of this definition, a Person shall be
deemed to be "controlled by" another Person if such other Person possesses,
directly or indirectly, the power (i) to vote 5% or more of the securities (on a
fully diluted basis) having
<PAGE> 7
ordinary voting power for the election of directors, members or managing
partners of such Person or (ii) to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"AGREEMENT" means this Amended and Restated Limited Partnership
Agreement, as the same may be amended, modified or supplemented from time to
time.
"BANKRUPTCY" means the occurrence of any of the events specified in
Section 17-402(a)(4) or (5) of the Act as in effect on the Effective Date.
"BUILT-IN GAIN" means the difference between the initial Gross Asset
Value of any property contributed to the Partnership and its adjusted basis for
federal income tax purposes immediately prior to contribution.
"CAPITAL ACCOUNT" shall have the meaning set forth in Section 3.04.
"CAPITAL CONTRIBUTION" means, with respect to any Partner, the amount
of money and/or the initial Gross Asset Value of any property other than money
contributed by such Partner from time to time to the capital of the Partnership
or incurred by such Partner as start-up expenses with respect to the
Partnership.
"CASH FLOW" means, for any fiscal period, gross cash revenues derived
from the operation of the Partnership's business and from the sale, exchange or
disposition of Partnership property, less any expenses and any Reserves
established by the General Partner or a liquidating trustee during such period.
"CODE" means the Internal Revenue Code of 1986, as amended.
"DELAWARE SECRETARY OF STATE" means the Secretary of State of the State
of Delaware.
"EFFECTIVE DATE" means October 1, 1999.
"GENERAL PARTNER" shall have the meaning set forth in the preamble to
this Agreement.
"GROSS ASSET VALUE" means, with respect to any asset, such asset's
adjusted basis for federal income tax purposes, except that:
(i) the initial Gross Asset Value of an asset contributed by
a Partner to the Partnership shall be the fair market value thereof, as
determined by the General Partner and set forth in Exhibit A hereto;
(ii) upon the occurrence of any of the following events, the
Gross Asset Value of the Partnership assets shall be adjusted to equal
their respective current gross fair market values, as determined by the
General Partner, as of the date of such event: (a) the acquisition of
additional interests in the Partnership by any new or existing Partner
in exchange for more than a de minimis Capital Contribution; (b) the
distribution by the Partnership to a Partner of more than a de minimis
amount of cash or other Partnership
7
<PAGE> 8
Property as consideration for an interest in the Partnership; and (c)
the liquidation of the Partnership within the meaning of the
Regulations; provided, however, that any adjustments pursuant to
clauses (a) and (b) above shall be made only if the General Partner
reasonably determines that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Partners
in the Partnership;
(iii) the Gross Asset Value of any Partnership asset
distributed to a Partner shall be adjusted to equal the gross fair
market value of such asset on the date of distribution as determined by
the General Partner; and
(iv) the Gross Asset Value of any Partnership asset shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such asset pursuant to Code Section 734(b) or 743(b), but only
to the extent that such adjustment is taken into account in determining
Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the
Regulations, Section 7.01 and paragraph (iv) of the definition of the
terms "Net Income" and "Net Losses"; provided, however, that the Gross
Asset Value of an asset shall not be adjusted pursuant to this
paragraph to the extent that the General Partner determines that an
adjustment pursuant to paragraph (ii) above is necessary or appropriate
in connection with a transaction that otherwise would result in an
adjustment pursuant to this paragraph.
"INDEMNIFIED PARTIES" shall have the meaning set forth in Section 5.08.
"IRS" means the Internal Revenue Service, and its successors.
"LIMITED PARTNER" shall have the meaning set forth in the preamble to
this Agreement.
"NET INCOME" or "NET LOSSES" means, for a fiscal year or other fiscal
period, an amount equal to the Partnership's taxable income or loss for such
year or period, determined in accordance with Code Section 703(a) (for purposes
of this definition, all items of income, gain, loss or deduction required to be
stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:
(i) any income of the Partnership that is exempt from federal
income tax and is not otherwise taken into account in computing Net
Income or Net Losses pursuant to this definition shall be added to such
taxable income or loss;
(ii) any expenditures of the Partnership that can be neither
deducted nor capitalized (and any expenditures treated as such pursuant
to the Regulations) and that are not otherwise taken into account in
computing Net Income or Net Losses pursuant to this definition shall be
added to such taxable income or loss;
(iii) in the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to clause (ii) of the definition of the term
"Gross Asset Value," the amount of such adjustment shall be taken into
account as gain or loss upon the disposition of such asset for purposes
of computing Net Income or Net Losses;
8
<PAGE> 9
(iv) gain or loss resulting from any disposition of
Partnership assets with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross
Asset Value of the property so disposed of, notwithstanding that the
adjusted tax basis of such property differs from its Gross Asset Value;
(v) any depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss
with respect to any asset the Gross Asset Value of which differs from
its adjusted basis for federal income tax purposes at the beginning of
the related taxation period shall be in an amount that bears the same
ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization or other cost recovery deduction for such
year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation,
amortization or other cost recovery deduction for such period is zero,
the depreciation, amortization and other cost recovery deduction with
respect to such asset shall be determined with reference to such
beginning Gross Asset Value using any reasonable method;
(vi) to the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or 743(b) is
required to be taken into account pursuant to Section
1.704-1(b)(2)(iv)(m)(4) of the Regulations in determining Capital
Accounts other than with respect to a complete liquidation of a
Partner's interest in the Partnership, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of
the asset) from the disposition of such asset and shall be taken into
account for purposes of computing Net Income or Net Losses; and
(vii) notwithstanding the foregoing, any items that are
specifically allocated pursuant to Section 7.05 or 7.06 shall not be
taken into account in computing Net Income or Net Losses.
"ORIGINAL PARTNERSHIP AGREEMENT" has the meaning set forth in the
Recitals.
"ORIGINATION TRUST" means Ryder Truck Rental LT, a Delaware business
trust.
"ORIGINATION TRUST AGREEMENT" means that certain second amended and
restated trust agreement, dated as of February 1, 1998 among Ryder Truck Rental
I LP and Ryder Truck Rental II LP, as Grantors and UTI Beneficiaries, Ryder
Truck Rental, Inc., as Administrative Agent, RTRT, Inc., as Trustee, Delaware
Trust Capital Management, Inc., as Delaware Trustee, and U.S. Bank National
Association, as Trust Agent, as the same may be amended, supplemented or
modified from time to time.
"ORIGINATION TRUST INTERESTS" shall have the meaning set forth in
Section 2.02(a).
"PARTNER" means a General Partner or a Limited Partner.
9
<PAGE> 10
"PARTNERSHIP" means Ryder Funding LP, a Delaware limited partnership.
"PARTNERSHIP CERTIFICATE" means the certificate of limited partnership
of the Partnership.
"PARTNERSHIP INTEREST" means, with respect to each Partner, the stated
percentage interest of such Partner in each item of Partnership income, gain,
loss, deduction or credit as set forth in Exhibit B, as the same may be modified
from time to time to reflect any changes therein that occur pursuant to this
Agreement.
"PARTNERSHIP PROPERTY" means all real, personal and other property of
the Partnership, whether tangible or intangible, and includes (i) cash and
marketable securities; (ii) the beneficial interests of the Partnership in the
Origination Trust (including any interest in the UTI or any SUBI that the
Partnership may own from time to time) and in the Trust and all monies due
thereon and paid thereon or in respect thereof; (iii) the right to realize upon
any property that may be deemed to secure any interest described in clause (ii);
(iv) the interest in the 99% 1998-A SUBI Certificate and any other rights and
interests of the Partnership under the Program Operating Lease, dated as of
March 1, 1998, between Chase Manhattan Bank Delaware and the Partnership; and
(v) all proceeds of the foregoing.
"PERSON" means any legal person, including any individual, corporation,
partnership, joint venture, association, limited liability company, joint stock
company, trust, bank, trust company, estate (including any beneficiaries
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"REGULATIONS" means any regulations promulgated by the IRS under the
Code, as the same may be amended from time to time, including any corresponding
provisions of succeeding regulations.
"REGULATORY ALLOCATION" shall have the meaning set forth in Section
7.04(a).
"RESERVES" shall have the meaning set forth in Section 10.04.
"RYDER" means Ryder Truck Rental, Inc., a Florida corporation, and its
successors.
"SECURITIES" shall have the meaning set forth in Section 2.02(a).
"SECURITIZATION" means (i) a financing transaction of any sort
undertaken by a beneficiary (or a special purpose affiliate thereof) of the
Origination Trust that is secured, directly or indirectly, by assets of the
Origination Trust or a UTI, a SUBI or any interest therein, and any financing
undertaken in connection with the issuance and assignment of a UTI or a SUBI and
one or more related certificates evidencing such UTI or SUBI, as the case may
be; (ii) any sale by a beneficiary (or a special purpose affiliate thereof) of
the Origination Trust of an interest in a UTI or a SUBI; or (iii) any other
asset securitization, secured loan or similar transaction involving assets of
the Origination Trust or any beneficial interest therein or in the Origination
Trust.
10
<PAGE> 11
"SECURITIZATION TRUST" shall have the meaning set forth in Section
2.02(a).
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used herein
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to words such as "herein", "hereof" and the like shall refer to
this Agreement as a whole and not to any particular part, article or section
within this Agreement, (iii) references to a section such as "Section 1.01" and
the like shall refer to the applicable section of this Agreement, (iv) the term
"include" and all variations thereof shall mean "include without limitation" and
(v) the term "or" shall include "and/or".
(b) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles in effect from time to time.
To the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of
such terms under such generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.
ARTICLE TWO
NAME, PURPOSE AND PARTNERS
SECTION 2.01. NAME. The name of the limited partnership formed pursuant
to the Original Partnership Agreement and governed by this Agreement and
continued hereby is Ryder Funding LP (the "Partnership").
SECTION 2.02. PURPOSE. The Partnership is formed for the object and
purpose of, and the nature of the business to be conducted and promoted by the
Partnership is limited to, the following activities only:
(a) to act as settlor or grantor of one or more trusts or
special purpose entities (each, a "Securitization Trust") formed
pursuant to a trust agreement or other agreement for the purpose of
acquiring beneficial interests in the Origination Trust ("Origination
Trust Interests"), which Securitization Trust may issue one or more
series or classes of participation certificates, bonds, notes or other
evidences of interest or indebtedness (collectively, "Securities")
secured by or representing beneficial interests in the assets of such
Securitization Trust;
(b) to acquire, lease, own, hold, sell, transfer, convey,
dispose of, pledge, assign, borrow money against, finance, refinance or
otherwise deal with, publicly or privately and whether with unrelated
third parties or with affiliated entities, certificates
11
<PAGE> 12
representing Origination Trust Interests including undivided trust
interests ("UTIs"), any special units of beneficial interest created
with respect to the Origination Trusts ("SUBIs") and Securities;
(c) to authorize, sell and deliver or participate in the
issuance of Securities issued by a Securitization Trust;
(d) to acquire Securities, UTIs or SUBIs or other property of
a Securitization Trust (including remainder interests in collateral or
reserve accounts) or any interest in any of the foregoing;
(e) to issue, authorize, sell and deliver Securities, UTIs,
SUBIs or other instruments secured or collateralized by Receivables or
Securities;
(f) to loan or otherwise invest funds received as a result of
the Partnership's interest in any Origination Trust Interests or
Securities and any other income, as determined by the General Partners
from time to time;
(g) to borrow money other than pursuant to clause (b) above,
but only to the extent that such borrowing is permitted by the terms of
the transactions contemplated by clauses (a) through (e) above; and
(h) to (i) to negotiate, authorize, execute, deliver or assume
or perform the obligations under any agreement, instrument or document
relating to the activities set forth in clauses (a) through (g) above,
including but not limited to the Basic Documents and (ii) engage in any
lawful act or activity and to exercise any powers permitted to limited
partnerships organized under the Act that are incidental to and
necessary or convenient for the accomplishment of the activities set
forth in clauses (a) through (g) above, including, without limitation,
any of the powers that may be exercised by the General Partner on
behalf of the Partnership.
SECTION 2.03. REGISTERED OFFICE. The registered office of the
Partnership in the State of Delaware is c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
SECTION 2.04. REGISTERED AGENT. The name and address of the registered
agent of the Partnership for service of process on the Partnership in the State
of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801.
SECTION 2.05. CERTIFICATE OF LIMITED PARTNERSHIP AND OTHER FILINGS. The
General Partner has filed a certificate of limited partnership of the
Partnership (the "Partnership Certificate") in the office of the Delaware
Secretary of State and shall file or cause the Partnership Certificate to be
filed in such other offices as may be required by law from time to time. From
time to time as required by law, the General Partner shall execute and
acknowledge, and shall cause to be filed and recorded, appropriate amendments to
the Partnership Certificate and any other filings
12
<PAGE> 13
required of or appropriate with respect to the Partnership. In particular, but
without limitation, in the event that the General Partner deems it necessary for
the Partnership to exist in or qualify to do business under the laws of one or
more jurisdictions in addition to the State of Delaware, the General Partner
shall take such actions as may be necessary to register the Partnership or to
qualify it to do business in each such jurisdiction; provided that in any such
event the Partnership shall at all times continue to be a limited partnership
formed under and governed by the provisions of the Act and this Agreement.
SECTION 2.06. PARTNERS' ADDRESSES. The names and mailing addresses of
the General Partner and the Limited Partner are (i) in the case of the General
Partner, Ryder Truck Rental III LLC, c/o Ryder Truck Rental, Inc., 3600 N.W.
82nd Avenue, Miami, Florida 33166, Attention: Treasury 2C, with a copy to the
General Counsel, 5C Law; (ii) in the case of the Limited Partner, Ryder Truck
Rental, Inc., 3600 N.W. 82nd Avenue, Miami, Florida 33166, Attention: Treasury
2C, with a copy to the General Counsel, 5C Law; or (iii) at such other address
as shall be designated by any of the foregoing in a written notice to the other
parties hereto.
SECTION 2.07. AUTHORIZATION TO ENTER INTO CERTAIN AGREEMENTS. Each of
the Partnership and the General Partner, on behalf of the Partnership, may, and
is hereby authorized to, enter into and perform any and all obligations of the
Partnership under each of the Basic Documents and any other documents or
agreements contemplated thereby or specifically described therein, and any and
all documents and agreements deemed necessary or desirable by the General
Partner, all without any further act, vote or approval of any Partner,
notwithstanding any other provision of this Agreement, the Act or other
applicable law, rule or regulation. Such authorization shall not be deemed a
restriction on the powers of the General Partner to enter into other agreements
on behalf of the Partnership that are consistent with the purposes of Section
2.02.
SECTION 2.08. EFFECTIVE DATE. The Original Partnership Agreement is
hereby amended and restated in its entirety by this Agreement as of the
Effective Date.
ARTICLE THREE
CAPITAL ACCOUNTS; LIMITATION OF LIMITED PARTNERS' LIABILITY
SECTION 3.01. INITIAL CAPITAL CONTRIBUTIONS. Each of the General
Partner and the Limited Partner has contributed cash or marketable securities as
its initial Capital Contribution.
SECTION 3.02. ADDITIONAL CAPITAL CONTRIBUTIONS.
(a) Except as provided in Section 10.02 with respect to any General
Partner, no Partner shall be required to make additional Capital Contributions
to the Partnership.
(b) Notwithstanding any provision herein to the contrary, in the event
any additional Capital Contributions are made by one or both Partners, the
Partnership Interest of each Partner for purposes of all subsequent Cash Flow
distributions shall be recalculated to reflect any such
13
<PAGE> 14
additional Capital Contributions until such additional Capital Contributions
have been recovered by the contributors thereof through distributions pursuant
to this Agreement.
(c) Each Partner's Capital Account shall be increased by an amount
equal to the additional Capital Contributions by such Partner pursuant to
Section 3.02(b) and shall be reduced by all distributions to that Partner
pursuant to this Agreement.
SECTION 3.03. WITHDRAWAL OF CAPITAL. Except as otherwise provided in
this Agreement, no Partner shall be entitled to demand or receive a return of
any portion of its Capital Contributions from the Partnership without the
consent of the General Partner.
SECTION 3.04. PARTNERSHIP INTERESTS AND CAPITAL ACCOUNTS. For all
purposes of this Agreement, the "Capital Account" of a Partner as of any date
shall mean the value of the Capital Contribution of such Partner as set forth on
Exhibit A, as the same may be amended from time to time, properly adjusted to
reflect the allocations and distributions provided for in Article Seven and any
additional Capital Contributions of such Partner.
SECTION 3.05. LIMITATION OF LIMITED PARTNERS' LIABILITY.
(a) No Limited Partner shall have any personal liability whatsoever,
whether to the Partnership, to any of the Partners or to any creditor of the
Partnership, for the debts of the Partnership or any of its losses beyond the
amount contributed by such Limited Partner to the capital of the Partnership;
provided, however, that a Limited Partner shall be obligated to return
distributions wrongfully distributed to it as required by the Act or other
applicable law.
(b) No Limited Partner, in its capacity as a limited partner of the
Partnership, shall control the Partnership's business or be deemed to be
participating in the control of the business of the Partnership within the
meaning of the Act by doing one or more of the following:
(i) being a contractor for or an agent or employee of the
Partnership or the General Partner or being an officer, director or
shareholder of the General Partner;
(ii) consulting with and advising the General Partner with
respect to the business of the Partnership;
(iii) acting as surety for the Partnership or guaranteeing
or assuming one or more obligations of the Partnership, acting as an
endorser of the Partnership's obligations or providing collateral for
any borrowings of the Partnership;
(iv) taking any action required or permitted by law to
bring or pursue a derivative action in the right of the Partnership;
(v) requesting or attending a meeting of Partners;
(vi) proposing, approving or disapproving, by voting or
otherwise, one or more of the following matters:
14
<PAGE> 15
(A) the dissolution and winding up of the Partnership
or continuation of the business of the Partnership upon the
occurrence of any event that would otherwise require the
winding up and termination of its affairs;
(B) the sale, exchange, lease, mortgage, pledge or
other transfer of all or substantially all of the assets of
the Partnership;
(C) the incurrence of indebtedness by the Partnership
other than in the ordinary course of its business;
(D) a change in the nature of the Partnership
business;
(E) the admission or removal of a General Partner;
(F) the admission or removal of a Limited Partner;
(G) a transaction involving an actual or potential
conflict of interest between the Partnership and a General
Partner or a Limited Partner;
(H) an amendment to this Agreement or the Partnership
Certificate;
(I) matters related to the business of the
Partnership not otherwise enumerated in this subsection, but
which this Agreement, or any other agreement, states in
writing may be subject to the approval or disapproval of
Limited Partners; or
(J) any other matter required by law or regulation,
or deemed advisable by the General Partner, to be submitted to
a vote of Limited Partners;
(vii) winding up the Partnership; or
(viii) taking any of the actions described in Section
17-303(b) of the Act or in this Agreement, or exercising any right or
power permitted a limited partner under the Act, which action or
exercise is not specifically enumerated in this Section.
ARTICLE FOUR
ADMISSION OF ADDITIONAL PARTNERS
SECTION 4.01. TO ADMIT ADDITIONAL PARTNERS. The Partners agree that the
General Partner may admit Additional Limited Partners to the Partnership,
subject to and in accordance with the provisions of Section 4.02, Section 5.03
and Article Nine. Additional General Partners may be admitted to the
Partnership, subject to and in accordance with the provisions of Section 4.02,
Section 5.03 and Article Nine, but only if and to the extent that the General
Partner would be permitted to transfer its Partnership Interest under Section
4.02, Section 5.03 and Article Nine.
15
<PAGE> 16
SECTION 4.02. PARTNERSHIP INTERESTS ON ADMISSION OF ADDITIONAL
PARTNERS. The Partnership Interest of each Additional General Partner or
Additional Limited Partner shall be the percentage that the cash amount or
initial Gross Asset Value of capital contributed to the Partnership by such
Additional General Partner or Additional Limited Partner bears to the total
capital of the Partnership immediately following such contribution. Upon
admission of such Additional General Partner or Additional Limited Partner to
the Partnership, the Partnership Interests of the existing Partners shall be
reduced pro rata by the amount of such Additional Limited Partner's Partnership
Interest; provided, however, that no Additional General Partner or Additional
Limited Partner may be admitted if such addition would reduce the Partnership
Interest of (i) Ryder, in its capacity as Limited Partner, below 20% or (ii)
Ryder Truck Rental III LLC, in its capacity as a General Partner, below 1%.
ARTICLE FIVE
MANAGEMENT OF THE PARTNERSHIP
SECTION 5.01. AUTHORITY OF GENERAL PARTNER.
(a) The General Partner shall have sole and exclusive authority to
manage the operations and affairs of the Partnership and to make all decisions
regarding the business of the Partnership. No Limited Partner shall participate
in the management or control of the Partnership's business, nor shall it have
the power to act for or bind the Partnership, such powers being vested solely
and exclusively in the General Partner, except as otherwise specifically
provided herein. It is understood and agreed that the General Partner shall have
all of the rights and powers of a general partner provided under the Act and by
this Agreement, and as otherwise provided by law, and any action taken by the
General Partner shall constitute the act of and serve to bind the Partnership.
Persons dealing with the Partnership are entitled to rely conclusively on the
power and authority of the General Partner as set forth in this Agreement.
(b) Notwithstanding the foregoing, without the affirmative vote of 100%
of the constituent members of the General Partner, the General Partner will not
take, or acquiesce in, and only the General Partner (and not any Limited
Partner) shall have any right to take, any action to cause the Partnership to
(i) merge or consolidate with or into any Person, (ii) act other than in the
Partnership's own name and through the General Partner, (iii) dissolve or
liquidate, in whole or in part, or institute proceedings to be adjudicated
bankrupt or insolvent, (iv) consent to the institution of bankruptcy or
insolvency proceedings against it, (v) file a petition seeking, or consent to,
reorganization or relief under any applicable federal or state law relating to
bankruptcy, (vi) consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Partnership or a
substantial part of its property, (vii) make a general assignment for the
benefit of its creditors, (viii) admit in writing its inability to pay its debts
generally as they become due, (ix) institute or join in any institution of any
bankruptcy, insolvency, liquidation, arrangement or reorganization proceeding,
or other similar proceedings under federal or state law, against any entity in
which the Partnership holds an ownership interest, or (x) take any corporate
action or partnership action in furtherance of the
16
<PAGE> 17
actions enumerated in clauses (i) through (ix) above; provided, however, that
the General Partner shall in no event consent to the institution of bankruptcy
or insolvency proceedings against the Partnership so long as the Partnership is
solvent. In the event of the insolvency of the Partnership and with regard to
any action contemplated by the preceding sentence, the General Partner will not
owe a fiduciary duty to any Limited Partner (except as may be specifically
required by applicable law), but the General Partner's fiduciary duty with
regard to such action shall be owed, to the fullest extent permitted by
applicable law, instead to the creditors of the Partnership.
(c) The General Partner shall not, and shall not allow the Partnership
otherwise to, (i) commingle any funds or other assets of the Partnership with
the funds or assets of any other Person or (ii) enter into transactions with any
Person except as specifically authorized or contemplated by this Agreement, the
Origination Trust Agreement and the agreements related to a Securitization. The
Partnership shall conduct business in its own name and hold itself out as a
separate entity, and observe all organizational formalities. The bank accounts,
financial and accounting books, financial statements and records of the
Partnership shall be maintained separate from those of every other Person. All
obligations and indebtedness of any kind incurred by the Partnership shall be
paid from the assets of the Partnership and the Partnership's assets shall not
be used to pay any obligation or indebtedness of any other Person, other than
expenses, obligations or indebtedness of the Securitization Trusts and any
trustee of the Securitization Trusts with respect to the Securitization Trusts
or transactions of the Securitization Trusts.
(d) The General Partner is hereby authorized to delegate to one or more
other Persons any of its rights and powers to manage and control the business
and affairs of the Partnership, including to delegate to agents and employees of
the General Partner or the Partnership, and to delegate by a management
agreement or another agreement with, or otherwise to, other Persons. Such
delegation by the General Partner shall not cause the General Partner to cease
to be a general partner of the Partnership.
SECTION 5.02. SPECIFIC POWERS OF GENERAL PARTNER. Subject to Section
5.03, the General Partner is hereby granted the right, power and authority to do
on behalf of the Partnership all things which, in its sole judgment, are
necessary, proper, desirable, convenient or incidental to carry out the duties
and responsibilities of the Partnership under this Agreement.
SECTION 5.03. POWERS REQUIRING CONCURRENCE OF LIMITED PARTNERS. Without
the written consent of, or ratification by a specific act of, Partners holding
in the aggregate at least 66 2/3% of the Partnership Interests, the General
Partner shall have no authority to, and affirmatively represents and undertakes
that it will not, admit a Person as a Partner under this Agreement, which in any
event shall always be done in accordance with Article Nine.
SECTION 5.04. DUTIES OF GENERAL PARTNER. The General Partner shall
devote such time to the business of the Partnership as it shall deem necessary
to manage and supervise the business and affairs of the Partnership in an
efficient manner. Subject to the foregoing, the General Partner shall manage the
administration of the Partnership, which administration shall include (i)
maintaining customary books and records; (ii) preparing or causing the
preparation of the
17
<PAGE> 18
financial statements provided for in this Agreement; (iii) preparing and filing
or causing the preparation and filing of Partnership tax returns; (iv) preparing
communications from the Partnership to Limited Partners; (v) filing documents
required to be filed by the Partnership; (vi) causing the Partnership to make or
revoke the appropriate tax elections under the Code; (vii) functioning as tax
matters partner for federal, state and local tax purposes; and (viii) acting on
behalf of the Partnership with respect to the Securitization Trusts and any
other Person dealing with the Partnership or any Partnership Property.
SECTION 5.05. COMPENSATION OF GENERAL PARTNER AND EXPENSES. The General
Partner shall receive no compensation for services to the Partnership as General
Partner; provided, however, that the General Partner shall be entitled to charge
to the Partnership any filing fees incurred in complying with any requirement
imposed on the Partnership by law, reasonable accountants' and attorneys' fees
and all other reasonable expenses arising out of the administration of the
Partnership, including those incurred in any administrative or judicial
proceeding in which the Partnership may become involved, all of which shall be
proper expenses of the Partnership.
SECTION 5.06. SCOPE OF RESPONSIBILITY. None of the General Partner, any
director, officer, shareholder, agent or employee of the General Partner or any
Affiliate of the General Partner shall be liable, responsible or accountable for
damages or otherwise to the Partnership or any Limited Partner for any action
taken or omitted on behalf of the Partnership within the scope of the authority
conferred upon such Person by this Agreement or by law, unless such action was
taken or omitted fraudulently or in bad faith or constituted willful misconduct
or gross negligence.
SECTION 5.07. CONTRACTS WITH AFFILIATES. The Partnership may enter into
one or more agreements with the General Partner or any Affiliate of the General
Partner to render services to the Partnership. Any service rendered to the
Partnership by the General Partner or any Affiliate thereof shall be on terms
that are fair and reasonable to the Partnership and are, in the aggregate, no
less favorable than those that could be obtained from unaffiliated third parties
for comparable quality.
SECTION 5.08. INDEMNIFICATION. The Partnership shall, to the fullest
extent permitted by law, indemnify and hold harmless the General Partner, its
Affiliates and their respective directors, officers, shareholders, agents and
employees acting within the scope of their authority (the "Indemnified Parties")
from and against any loss, expense, damage, liability or injury suffered or
sustained by them by reason of any acts, omissions or alleged acts or omissions
arising out of any of such Person's activities on behalf of the Partnership or
in furtherance of the interests of the Partnership including 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 and any payments made by one or more Indemnified Parties,
unless the acts, omissions or alleged acts or omissions upon which such actual
or threatened action, proceeding or claim is based were made or omitted
fraudulently or in bad faith or constituted willful misconduct or gross
negligence by one or more of such Indemnified Parties. Any such indemnification
shall only be made from the assets of the Partnership. Reasonable expenses
18
<PAGE> 19
incurred by any Indemnified Party in connection with such action, proceeding or
claim shall be paid or reimbursed by the Partnership in advance of the final
disposition of the action, proceeding or claim, upon receipt by the Partnership
of an undertaking by or on behalf of such Indemnified Party to repay such amount
if it shall be determined that such Indemnified Party is not entitled to be
indemnified as authorized in this Section.
SECTION 5.09. LIMITED PARTNERS' RIGHTS. Except as otherwise set forth
in this Agreement, all Limited Partners shall have all rights and authority
accorded to them under the Act.
SECTION 5.10. PARTNERSHIP PROPERTY. All Partnership Property shall be
owned by the Partnership as an entity, and no Partner shall have any ownership
interest in any Partnership Property in its individual name or right. The
Partnership shall hold all of the Partnership Property in the name of the
Partnership and not in the name of any Partner. Each Partner's interest in the
Partnership shall be personal property for all purposes.
SECTION 5.11. DUTIES OF THE GENERAL PARTNER AND CERTAIN OTHER PERSONS.
To the extent that an Indemnified Party shall have fiduciary duties and
liabilities, arising at law or in equity, relating to the Partnership or the
Partners, such Indemnified Party shall not be liable to the Partnership or to
any Partner for any action taken or omitted in good faith reliance on the
provisions of this Agreement. The Partners hereby agree that the provisions of
this Agreement, to the extent that they restrict the fiduciary duties and
related liabilities of an Indemnified Party otherwise existing at law or in
equity, replace such other duties and liabilities of such Indemnified Party.
ARTICLE SIX
STATEMENTS AND FISCAL YEAR
SECTION 6.01. STATEMENTS. The General Partner shall send or cause to be
sent to each Limited Partner such statements as may be necessary for the
preparation of such Limited Partner's income tax returns.
SECTION 6.02. FISCAL YEAR. The fiscal year of the Partnership shall be
the fiscal year of the Limited Partner which as of the Effective Date ends on
December 31 of each year.
ARTICLE SEVEN
FINANCIAL ALLOCATIONS AND DISTRIBUTIONS
SECTION 7.01. TAX ELECTIONS. The General Partner shall elect to treat
the Partnership as a single member entity treated as an agent of the Limited
Partner and not as a separate corporation or partnership for federal and
applicable state tax purposes. The General Partners may also elect to make an
election for state tax purposes comparable to the federal tax election under
Section
19
<PAGE> 20
761(a) of the Code for an exemption from the provisions of Subchapter K of the
Code for the Partnership.
SECTION 7.02. MAINTENANCE OF PARTNERS' CAPITAL ACCOUNTS. A separate
Capital Account shall be established and maintained for each Partner throughout
the full term of the Partnership as follows:
(a) to each Partner's Capital Account there shall be credited
such Partner's initial Capital Contribution, as set forth and agreed to
on Exhibit A hereto, such additional Capital Contributions as such
Partner may make from time to time pursuant to Section 3.02(b), such
Partners' distributive share of Net Income, and any items in the nature
of income or gain that are specially allocated to such Partner pursuant
to Section 7.03 or 7.04 and the amount of any Partnership liabilities
that are assumed by such Partner or secured by any Partnership Property
distributed to such Partner;
(b) from each Partner's Capital Account there shall be
subtracted the amount of cash and the Gross Asset Value of any
Partnership Property distributed to such Partner pursuant to any
provision of this Agreement, such Partner's distributive share of Net
Losses, any items in the nature of deductions or losses that are
specially allocated to such Partner pursuant to Section 7.03 or 7.04
and the amount of any liabilities of such Partner assumed by the
Partnership or secured by any property contributed by such Partner to
the Partnership;
(c) in the event any interest in the Partnership is
transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account, if any, of the
transferor to the extent relevant to the transferred interest; and
(d) in determining the amount of any liability for purposes of
paragraphs (a) and (b) of this Section, Code Section 752 and any other
applicable provisions of the Code and Regulations shall be taken into
account.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such general intent. In the event the General Partner shall
determine that it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto (including, without limitation, debits or
credits relating to liabilities that are secured by contributed or distributed
property or that are assumed by the Partnership or the Partners), are computed
in order to comply with such Regulations, the General Partner may make such
modification, provided that such modification is not likely to have a material
effect on the amounts distributable to any Partner pursuant to Section 10.02
upon the dissolution of the Partnership. The General Partner shall make all (i)
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes in accordance
with the Regulations, and (ii) appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to comply with
Regulations Section 1.704-1(b).
20
<PAGE> 21
SECTION 7.03. NET INCOME AND NET LOSS; CASH FLOW.
(a) NET INCOME AND NET LOSS. Except as provided in Sections 7.04, 7.05
and 7.06, the determination of each Partner's distributive share of any
Partnership Net Income and Net Loss with respect to any Partnership fiscal year
shall be made in accordance with and in proportion to such Partner's Partnership
Interest during the particular year, after taking into account any variations in
the Partner's Partnership Interest during that year.
(b) CASH FLOW. The distributive share of Cash Flow of any Partner for
any Partnership fiscal year shall be determined in accordance with and in
proportion to such Partner's Partnership Interest during such year.
SECTION 7.04. SPECIAL TAX ALLOCATIONS.
(a) GENERALLY. Special tax allocations shall be made to the extent
necessary to satisfy the requirements set forth in Sections 1.704-1(b)(2)(ii)(d)
and 1.704-2 of the Regulations for a qualified income offset and partner minimum
gain chargeback (the "Regulatory Allocations").
(b) SECTION 754 ADJUSTMENT. To the extent that an adjustment to the
adjusted tax basis of any Partnership asset is required under Code Section
734(b) or 743(b) in connection with a distribution to a Partner in complete
liquidation of such Partner's interest in the Partnership and the resultant
redetermination pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or
1.704-1(b)(2)(iv)(m)(4) of the Capital Accounts, the amount of such adjustment
to the Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis), and such gain or loss shall be allocated pro rata to the remaining
Partners in accordance with their respective Partnership Interests in the event
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partner to which
such distribution was made in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.
SECTION 7.05. CURATIVE ALLOCATIONS. It is the intent of the Partners
that, to the extent possible, all Regulatory Allocations shall be offset either
by other Regulatory Allocations or by special allocations of other items of
Partnership income, gain, loss or deduction pursuant to this Section. Therefore,
notwithstanding any other provision of this Article, the General Partner shall
make special offsetting allocations of Partnership income, gain, loss or
deduction in whatever manner it determines appropriate so that, after such
offsetting allocations are made, each Partner's Capital Account balance is, to
the extent possible, equal to the Capital Account balance such Partner would
have had if the Regulatory Allocations had not been made and all Partnership
items were allocated pursuant to Section 7.03. In exercising discretion under
this Section, the General Partner shall take into account certain future
Regulatory Allocations that, although not yet made, are likely to offset other
Regulatory Allocations previously made under Section 7.04(a).
SECTION 7.06. OTHER ALLOCATION RULES. For purposes of determining items
of Partnership income, gain, loss or deduction or any other items allocable to
any fiscal year or other period, including upon the transfer of a Partner's
interest in the Partnership, such items shall be determined on a daily, monthly
or other basis, as determined by the General Partner, using any
21
<PAGE> 22
method permissible under Code Section 706 and the Regulations thereunder. To the
extent permitted by the Regulations, the General Partner shall endeavor not to
treat distributions of Cash Flow as having been made from the proceeds of a
nonrecourse liability within the meaning of Section 1.752-2 of the Regulations.
SECTION 7.07. ALLOCATION OF BUILT-IN GAINS.
(a) In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss and deduction with respect to any Partnership
Property contributed by the Partners to the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any Built-in
Gains or variation between the adjusted basis of such property to the
Partnership for federal income tax purposes and its initial Gross Asset Value.
(b) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to paragraph (ii) of the definition of the term Gross Asset
Value, subsequent allocations of income, gain, loss and deduction with respect
to such asset shall, solely for tax purposes, take into account any Built-in
Gains or variation between the adjusted basis of such asset for federal income
tax purposes and its Gross Asset Value in the manner set forth under Code
Section 704(c) and relevant Sections of the Regulations.
(c) Any elections or other decisions relating to such allocations shall
be made by the General Partner in any manner that reasonably reflects the
purpose and intention of this Agreement. Allocations of Built-in Gain pursuant
to this Section are solely for purposes of federal, state and local taxes and
shall not affect, or in any way be taken into account in computing, Net Income,
Net Losses, credits or debits to any Partner's Capital Account or the allocation
of items of income, gain, loss or deduction or distributions pursuant to this
Agreement.
SECTION 7.08. DISTRIBUTION OF CASH FLOW AND OTHER AMOUNTS. As
determined by the General Partner employing its reasonable business judgment, to
the extent Partnership Cash Flow is available for distribution at the close of
any fiscal one-month period, such distribution shall be made as soon as
reasonably possible following such period, in the manner provided in Section
7.03, as if such fiscal one-month period were a fiscal year. No such
distribution will be made if it would create a negative Capital Account balance
for a Limited Partner. The General Partner may also refuse to make a
distribution at the end of any fiscal one-month period if such distribution
would impair Reserves set up by the General Partner pursuant to Section 10.04.
SECTION 7.09. RESTRICTED DISTRIBUTIONS. The Partnership, and the
General Partner on behalf of the Partnership, shall not make a distribution to
any Partner if such distribution would violate Section 17-607 of the Act or
other applicable law. Notwithstanding Section 17-606 of the Act, no Limited
Partner shall, by virtue of becoming entitled to receive a distribution, have
the status of, or be entitled to the remedies available to, a creditor of the
Partnership with respect to such distribution.
22
<PAGE> 23
ARTICLE EIGHT
NO WITHDRAWAL OF PARTNER; DEATH, LEGAL INCAPACITY,
DISSOLUTION OR BANKRUPTCY OF LIMITED PARTNER
SECTION 8.01. NO WITHDRAWAL. Except as provided in Article Nine, no
Partner shall have the right to withdraw from the Partnership.
SECTION 8.02. DEATH, LEGAL INCAPACITY, DISSOLUTION AND BANKRUPTCY. The
death, legal incapacity, dissolution or bankruptcy of a Limited Partner shall
not, in and of itself, cause the dissolution of the Partnership, but the rights
of such Limited Partner to share in the profits and losses of the Partnership,
to receive distributions of Partnership funds and to assign its interest in the
Partnership pursuant to Article Nine shall, on the occurrence of any such event,
devolve upon its personal or legal representative or upon the Person or Persons
entitled to receive its property under the laws of its domicile, subject to the
terms and conditions of this Agreement, and the Partnership shall continue as a
limited partnership; in no event, however, shall such personal or legal
representative or Person or Persons entitled to receive the interest of such
Limited Partner become a substitute Limited Partner, except in accordance with
Article Nine.
ARTICLE NINE
NO TRANSFER OF PARTNERSHIP INTERESTS
SECTION 9.01. NO TRANSFER OF PARTNERSHIP INTERESTS. Neither the General
Partner nor the Limited Partner shall sell, transfer, assign, convey or
otherwise dispose of, or encumber or hypothecate, all or any part of its
Partnership Interest to any Person. Any such purported transfer or pledge shall
be deemed null and void and shall not be recognized by the Partnership or the
other Partners.
SECTION 9.02. DEALING WITH GENERAL PARTNER. In addition to any other
provision contained in this Article Nine, the Partnership, each Partner and any
other Person having business with the Partnership need deal only with General
Partners named in the Partnership Certificate and shall not be required to deal
with any other Person by reason of the death, legal incapacity, dissolution or
bankruptcy of a Partner, except as otherwise provided in this Agreement or
required by law.
SECTION 9.03. COMPLIANCE WITH FEDERAL AND STATE LAW. Each Partner
represents and warrants that it is purchasing its Partnership Interest as an
investment and not for distribution within the meaning of any applicable United
States federal and state securities laws and regulations. Any Partner who
commits any act or fails to take any act that results in a breach of such
representation and warranty shall, and hereby agrees to, indemnify and hold
harmless all other Partners and the Partnership from any claims, demand, suits,
losses, judgments, liabilities and damages, including reasonable attorneys' fees
and disbursements, arising out of or in any way connected with such act or
omission.
23
<PAGE> 24
ARTICLE TEN
TERM AND DISSOLUTION
SECTION 10.01. TERM AND DISSOLUTION OF PARTNERSHIP. The Partnership
shall be dissolved and its affairs wound up upon the earliest to occur of:
(a) December 1, 2097;
(b) the withdrawal or Bankruptcy of the General Partner, the
termination of the General Partner or the occurrence of any other event
that results in the General Partner ceasing to be a general partner of
the Partnership under the Act, unless within 90 days after the
occurrence of such event, a majority in interest of the remaining
Partners (or such greater percentage in interest as is required by the
Act) agrees in writing to continue the business of the Partnership and
to the appointment, effective as of the date of such event, of one or
more additional general partners of the Partnership; or
(c) the entry of a decree of judicial dissolution pursuant to
Section 17-802 of the Act.
SECTION 10.02. DISTRIBUTION AFTER DISSOLUTION. Upon dissolution, the
Partnership shall continue solely for the purpose of winding up its affairs in
an orderly manner, liquidating its assets and satisfying the claims of creditors
and Partners. In so doing, a full accounting of the assets and liabilities of
the Partnership shall be taken and the Partnership assets shall be distributed
as promptly as possible as hereinafter provided:
(a) to the payment (or the making of reasonable provision for
the payment) of such debts and liabilities of the Partnership (or
Reserves therefor), including any necessary expenses of liquidation,
except any debts, liabilities and loans that may be due to the
Partners, in the order of priority provided by law;
(b) to the payment (or the making of reasonable provision for
the payment) of any debts and liabilities that may be due to the
Partners and to the payment (or the making of reasonable provision for
the payment) of the unpaid principal balance of and the interest
accrued on loans, if any, made by the Partners to the Partnership; and
(c) each Partner's Capital Account shall be adjusted as
provided in Section 7.02 as if the Partnership Property had been sold
for its fair market value and the resulting gain or loss had been
allocated to the respective Partners, and the assets of the Partnership
shall be distributed thereafter to the Partners in proportion to their
respective non-negative Capital Accounts.
All of the assets of the Partnership may be distributed in kind upon dissolution
of the Partnership. Any General Partner with a deficit balance in its Capital
Account (after giving effect to all contributions, distributions and allocations
for all fiscal years, including the fiscal year during which such liquidation
occurs) shall be required to repay such deficit promptly to the
24
<PAGE> 25
Partnership. If any Limited Partner has a deficit balance in its Capital Account
(after giving effect to all contributions, distributions and allocations for all
fiscal years, including the fiscal year during which such liquidation occurs),
such Limited Partner shall have no obligation to make any contribution to the
capital of the Partnership with respect to such deficit, and such deficit shall
not be considered a debt owed to the Partnership or to any other Person for any
purpose whatsoever.
SECTION 10.03. DISSOLUTION IF NO GENERAL PARTNER REMAINING. In the
event of the dissolution of the Partnership pursuant to Section 10.01(b) because
no General Partner remains, a liquidating trustee selected by a majority in
interest of the Limited Partners shall wind up the affairs of the Partnership.
Any such liquidating trustee shall have the full right and unlimited discretion
to determine the time, manner and terms of any sale or sales of Partnership
Property based on the activity and condition of the relevant market and general
financial and economic conditions. The Limited Partners shall continue to share
profits and losses during the period of liquidation in the same proportion as
before the dissolution.
SECTION 10.04. RESERVES. The General Partner or the liquidating
trustee, as the case may be, shall have the right to set up (either in
connection with the ongoing operations of the Partnership or in the course of
its liquidation) reasonable cash reserves for contingent, conditional or
unmatured liabilities or obligations of the Partnership, capital improvements or
for any other purpose necessary to accomplish the purposes of the Partnership
("Reserves"), and such Reserves shall be deducted from amounts available for
distribution pursuant to this Agreement.
SECTION 10.05. STATEMENT. Within a reasonable time following the
completion of the liquidation or distribution of the Partnership Property, the
General Partner or liquidating trustee shall supply to each of the Partners a
statement that shall set forth the assets and the liabilities of the Partnership
and each Partner's Capital Account as of the date of complete liquidation.
SECTION 10.06. DISTRIBUTION LIMITED TO PARTNERSHIP ASSETS. No Partner
shall have any right to demand a distribution in a form other than that decided
upon by the General Partner or the liquidating trustee, as the case may be, upon
dissolution and termination of the Partnership or to demand the return of its
Capital Contributions prior to dissolution and termination of the Partnership.
SECTION 10.07. TERMINATION. Upon completion of the distribution of all
Partnership assets and winding up of the Partnership's affairs, the Partnership
shall terminate and the General Partner or liquidating trustee shall have the
authority to execute and record a certificate of cancellation of the Partnership
Certificate or equivalent document as well as any and all other documents that
may be required by law to effect and evidence the dissolution and termination of
the Partnership.
25
<PAGE> 26
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. POWER OF ATTORNEY.
(a) Each Limited Partner, by its execution hereof, hereby irrevocably
constitutes and appoints the General Partner its true and lawful
attorney-in-fact, to make, execute, sign, acknowledge, record and file, in its
name, place and stead and with full power of substitution, on behalf of it and
on behalf of the Partnership, the following:
(i) one or more Partnership Certificates, certificates of
doing business under an assumed or fictitious name and any other
certificates or instruments that the Partnership or the Partners may be
required to file under the laws of the State of Delaware or any other
jurisdiction whose laws may be applicable;
(ii) one or more certificates of cancellation of the
Partnership Certificate or equivalent document and such other
instruments or documents as may be deemed necessary or desirable by the
General Partner upon the termination of the Partnership business;
(iii) any and all amendments or restatements of the
instruments described in clauses (i) and (ii) above, provided that such
amendments or restatements are either required by law or are consistent
with this Agreement or have been authorized by the affected Partners;
(iv) any and all amendments to or restatements of this
Agreement that have been duly adopted by the Partners pursuant to the
terms hereof; and
(v) any and all other instruments as may be deemed
necessary or desirable by the General Partner to carry out fully the
provisions of this Agreement in accordance with its terms.
(b) The grant of authority contained in Section 11.01(a) is a special
Power of Attorney coupled with an interest, is irrevocable and shall survive the
dissolution or bankruptcy of the Limited Partner granting the power of attorney,
may be exercised by the General Partner on behalf of each Limited Partner by a
facsimile signature or by the General Partner's executing any instrument with a
single signature as attorney-in-fact for all of the Limited Partners, and shall
survive the delivery of an assignment by a Limited Partner of the whole or any
portion of its Partnership Interest.
(c) Notwithstanding the provisions of Section 11.01(a), the General
Partner is not authorized to, and covenants and agrees that it will not, file
any Partnership Certificate or amendment to any Partnership Certificate that
requires an increased Capital Contribution by a Limited Partner unless such
Limited Partner has first authorized the filing of such Partnership Certificate
or amendment in writing.
26
<PAGE> 27
SECTION 11.02. GOVERNING LAW AND ARBITRATION. It is the intent of the
Partners that this Agreement be governed by, and that all questions with respect
to the construction of this Agreement and the rights and liabilities of the
Partners shall be determined in accordance with the internal laws of the State
of Delaware without regard to any otherwise applicable principles of conflicts
of laws. To the fullest extent permitted by law, any controversy or claim
arising out of or relating to this Agreement or the breach thereof shall be
settled by arbitration in accordance with the Rules of the American Arbitration
Association to the extent permitted by the Delaware Uniform Arbitration Act, 10
DEL. C. ss.5701 et seq., and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
SECTION 11.03. SUCCESSORS AND ASSIGNS. Except as herein or by law
otherwise provided and subject to Article Nine, this Agreement shall be binding
on and inure to the benefit of each of the Partners, their legal
representatives, heirs, administrators, executors, successors and assigns.
SECTION 11.04. COUNTERPARTS; INTEGRATION. This Agreement may be
executed in several counterparts and all counterparts so executed shall
constitute one Agreement binding on all Partners, notwithstanding that all the
Partners are not signatory to the same counterpart. This Agreement, including
all exhibits hereto, constitutes the entire agreement among the Partners
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings of the Partners in connection
therewith. No covenant, representation or condition not expressed in this
Agreement shall be binding upon the Partners hereto or shall affect or be
effective to interpret, change or restrict the provisions of this Agreement.
SECTION 11.05. NO PARTITION. The Partners agree that the Partnership
Property is not and will not be suitable for partition. Accordingly, each of the
Partners hereby irrevocably waives any and all rights that it may have to
maintain any action for partition of any of the Partnership Property.
SECTION 11.06. CAPTIONS. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provision hereof.
SECTION 11.07. SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any Security or
the rights of the holders thereof.
SECTION 11.08. NOTICES. All notices under this Agreement shall be in
writing and shall be given to each Partner to whom addressed at the addresses
set forth in Section 2.06 or at such other address as any of the Partners may
hereafter specify in writing, and to the Partnership at such address as the
General Partner shall specify to the Partners. Notice shall be deemed effective
hereunder only when actually received by the party to whom notice is given.
27
<PAGE> 28
SECTION 11.09. AMENDMENT, WAIVER. No change, termination or waiver of
any of the provisions hereof shall be binding unless agreed to in writing by
Partners holding in the aggregate at least 66 2/3% of the Partnership Interests,
and such additional approvals, if any, have been obtained as are required under
the Basic Documents; provided, however, that 100% of the constituent members of
the General Partner and 100% of the directors of any Independent Member (as such
term is defined in the limited liability company agreement of the General
Partner) must consent to any amendment to any of the provisions hereof.
SECTION 11.10. FURTHER ASSURANCES. Each party will do such acts, and
execute and deliver to any other party such additional documents or instruments,
as may be reasonably requested in order to effect the purposes of this Agreement
and to better assure and confirm unto the requesting party its rights, powers
and remedies hereunder.
28
<PAGE> 29
IN WITNESS WHEREOF, the initial Partners have executed this Agreement
as of the date first set forth above.
RYDER TRUCK RENTAL III LLC,
as General Partner
By: RTR LEASING II, INC.,
as Managing Member
By:
---------------------------------
W. Daniel Susik
Treasurer
RYDER TRUCK RENTAL, INC.,
as Limited Partner
By:
---------------------------------
W. Daniel Susik
Treasurer
29
<PAGE> 30
EXHIBIT A
GROSS ASSET VALUE OF INITIAL CAPITAL CONTRIBUTIONS
General Partner: $ 10
Limited Partner: $990
A-1
<PAGE> 31
EXHIBIT B
INITIAL PARTNERSHIP INTERESTS
General Partner: 1%
Limited Partner: 99%
B-1
<PAGE> 1
Exhibit 3.4
CERTIFICATE OF FORMATION
OF
RYDER TRUCK RENTAL I LLC
This Certificate of Formation of RYDER TRUCK RENTAL I LLC (the "LLC")
is being duly executed and filed by Daniel Susik, as an authorized person, to
form a limited liability company under the Delaware Limited Liability Company
Act (6 DEL. C. Section 18-101, ET SEQ.)
FIRST. The name of the limited liability company formed hereby is
Ryder Truck Rental I LLC.
SECOND. The address of the registered office of the LLC in the State
of Delaware is c/o The Corporation Trust Company, Corporation Trust Center,
1209 Orange Street, Wilmington, Delaware 19801.
THIRD. The name and address of the registered agent for service of
process on the LLC in the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation this 27th day of June, 1997.
/s/ Daniel Susik
-----------------------------
Daniel Susik
Authorized Person
<PAGE> 1
Exhibit 3.5
===============================================================================
RYDER TRUCK RENTAL I LLC
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
Between
RYDER TRUCK RENTAL, INC.
and
RTR LEASING I, INC.,
as Members
Dated as of October 1, 1999
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions................................................... 1
Section 1.02. Other Definitional Provisions................................. 4
ARTICLE TWO
ORGANIZATION OF COMPANY
Section 2.01. Formation..................................................... 4
Section 2.02. Name and Office............................................... 4
Section 2.03. Duration...................................................... 4
Section 2.04. Registered Office and Registered Agent........................ 4
Section 2.05. Execution, Delivery and Filing of Certificate................. 5
ARTICLE THREE
PURPOSES
Section 3.01. Purposes...................................................... 5
Section 3.02. Power and Authority........................................... 5
Section 3.03. Limitations on Powers......................................... 5
Section 3.04. Company Opportunity........................................... 6
ARTICLE FOUR
CAPITAL CONTRIBUTIONS; BORROWINGS
Section 4.01. Admission and Contributions of Initial Members................ 6
Section 4.02. Additional Capital Contributions.............................. 6
Section 4.03. Withdrawals................................................... 7
Section 4.04. Borrowings.................................................... 7
Section 4.05. Additional Members............................................ 7
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE FIVE
MANAGEMENT
Section 5.01. Powers of the Members......................................... 7
Section 5.02. Limitations on Powers of Members.............................. 8
Section 5.03. Self Dealing.................................................. 8
Section 5.04. Standard of Care; Liability................................... 9
Section 5.05. Compensation.................................................. 9
Section 5.06. Meetings of Members........................................... 9
Section 5.07. Consent....................................................... 9
Section 5.08. Independent Member............................................ 9
Section 5.09. Managers...................................................... 10
ARTICLE SIX
POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS
Section 6.01. Unanimous Vote Required....................................... 10
Section 6.02. Voting on Bankruptcy or Insolvency............................ 10
ARTICLE SEVEN
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
Section 7.01. Capital Accounts.............................................. 11
Section 7.02. Allocation of Profits and Losses.............................. 11
Section 7.03. Distributions................................................. 11
ARTICLE EIGHT
EXCULPATION OF LIABILITY; INDEMNIFICATION
Section 8.01. Exculpation of Liability...................................... 11
Section 8.02. Indemnification............................................... 11
Section 8.03. Fiduciary Duty................................................ 12
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE NINE
TERM OF COMPANY
Section 9.01. Commencement.................................................. 12
Section 9.02. Dissolution................................................... 12
ARTICLE TEN
APPLICATION OF ASSETS
Section 10.01. Application of Assets........................................ 13
Section 10.02. Termination.................................................. 13
Section 10.03. Claims of the Members........................................ 13
ARTICLE ELEVEN
RESTRICTION ON TRANSFERS OF INTERESTS
Section 11.01. Restriction on Transfers of Interests........................ 14
ARTICLE TWELVE
INVESTMENT REPRESENTATION
Section 12.01. Investment Representation.................................... 14
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.01. Limitations on Amendment..................................... 14
Section 13.02. Books of Account; Reports.................................... 14
Section 13.03. Bank Accounts and Investment of Funds........................ 15
Section 13.04. Accounting Decisions......................................... 15
Section 13.05. Federal Income Tax Elections................................. 15
Section 13.06. Entire Agreement............................................. 15
Section 13.07. Notices...................................................... 15
Section 13.08. Consent of Members........................................... 16
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 13.09. Further Execution............................................ 16
Section 13.10. Binding Effect............................................... 16
Section 13.11. Severability................................................. 16
Section 13.12. Captions..................................................... 16
Section 13.13. Counterparts................................................. 16
Section 13.14. Delaware Law to Control...................................... 16
EXHIBITS
Exhibit A Members; Capital Contributions; Membership Percentages.. A-1
</TABLE>
iv
<PAGE> 6
This Amended and Restated Limited Liability Company Agreement, dated
as of October 1, 1999, is between Ryder Truck Rental, Inc., a Florida
corporation, and RTR Leasing I, Inc., a Delaware corporation (collectively, the
"Members").
WHEREAS, pursuant to that certain limited liability company agreement,
dated as of June 1, 1997 (the "Original LLC Agreement"), between the Members,
Ryder Truck Rental I LLC, a Delaware limited liability company, was formed
pursuant to the Delaware Limited Liability Company Act by causing a Certificate
of Formation to be filed with the office of the Secretary of State of the State
of Delaware on July 24, 1997 and by entering into the Original LLC Agreement;
and
WHEREAS, the Members desire to amend and restate the Original LLC
Agreement in its entirety.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows.
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions. Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in the Origination
Trust Agreement. As used in this Agreement, the following terms shall have the
following meanings:
"Act" means the Delaware Limited Liability Company Act (6 Del. C.
ss.18-101, et seq.), as amended.
"Affiliate" of any person or entity means any other person or entity
that (i) directly or indirectly controls, is controlled by or is under common
control with such person or entity (excluding any trustee under, or any
committee with responsibility for administering, any employee benefit plan) or
(ii) is an officer or director of such person or entity. For purposes of this
definition, a person or entity shall be deemed to be "controlled by" another
person or entity if such other person or entity possesses, directly or
indirectly, the power (i) to vote 5% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of directors,
members or managing partners of such person or entity or (ii) to direct or
cause the direction of the management and policies of such person or entity,
whether by contract or otherwise.
"Agreement" means this Amended and Restated Limited Liability Company
Agreement as it may be amended, restated or supplemented from time to time.
"Bankruptcy" means, with respect to any Person, if such Person (i)
makes an assignment for the benefit of creditors, (ii) files a voluntary
petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has
entered against it an order for relief, in any bankruptcy or insolvency
proceedings, (iv) files a petition or answer seeking for itself any
<PAGE> 7
reorganization, arrangement, composition, readjustment, liquidation or similar
relief under any statute, law or regulation, (v) files an answer or other
pleading admitting or failing to contest the material allegations of a petition
filed against it in any proceeding of this nature, (vi) seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator of the
Person or of all or any substantial part of its properties, or (vii) if 120
days after the commencement of any proceeding against the Person seeking
reorganization, arrangement, composition, readjustment, liquidation or similar
relief under any statute, law or regulation, if the proceeding has not been
dismissed, or if within 90 days after the appointment without such Person's
consent or acquiescence of a trustee, receiver or liquidator of such Person or
of all or any substantial part of its properties, the appointment is not
vacated or stayed, or within 90 days after the expiration of any such stay, the
appointment is not vacated. The foregoing definition of "Bankruptcy" is
intended to replace and shall supersede and replace the definition
of"Bankruptcy" set forth in Sections 18-101(1) and 18-304 of the Act.
"Capital Accounts" shall have the meaning set forth in Section 7.01.
"Capital Contributions" means the amount of all cash (whether in the
form of money, a note payable upon demand or a combination thereof) or the
agreed upon value of other property or services contributed by the Members to
the Company.
"Certificate" means the Certificate of Formation of the Company,
including any restatements or amendments, which are filed with the Delaware
Secretary of State.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Ryder Truck Rental I LLC, a Delaware limited liability
company, and its successors.
"Covered Person" shall have the meaning set forth in Section 8.03.
"Delaware Secretary of State" means the Secretary of State of the
State of Delaware.
"Effective Date" means October 1, 1999.
"Fiscal Year" means the taxable year of the holder of the Majority
Interest.
"Independent Director" means an individual who is not (i) a director,
officer or employee of any Affiliate of Ryder (other than any limited or
special purpose corporation or limited liability company similar to the
Company); (ii) a person related to any officer or director of any Affiliate of
Ryder; (iii) a direct or indirect holder of more than 10% of any voting
securities of any Affiliate of Ryder; or (iv) a person related to a direct or
indirect holder of more than 10% of any voting securities of any Affiliate of
Ryder.
"Independent Member" shall have the meaning set forth in Section 5.08.
"Majority Interest" means the interest in the Company of Ryder.
2
<PAGE> 8
"Majority Members" means those Members holding more than 50% of the
Membership Percentages and more than 50% of the Capital Account balances of the
Members.
"Managers" means RTR Leasing and such other persons or entities that
may be designated from time to time by the Members as managers of the Company
to perform such functions for the Company as may be determined from time to
time by the Members. A Manager shall be deemed to be a "manager" of the Company
within the meaning of Section 18-101 of the Act.
"Members" means those persons or entities designated as Members of the
Company in Exhibit A. Any reference to a Member shall, unless the context
clearly requires otherwise, include a reference to its predecessors and
successors in interest.
"Membership Percentages" means the Members' respective limited
liability company interests in the Company as set forth in Exhibit A.
"Original LLC Agreement" has the meaning set forth in the Recitals.
"Origination Trust" means Ryder Truck Rental LT, a Delaware business
trust.
"Origination Trust Agreement" means that certain second amended and
restated trust agreement, dated as of February 1, 1998 among Ryder Truck Rental
I LP and Ryder Truck Rental II LP, as Grantors and UTI Beneficiaries, Ryder, as
Administrative Agent, RTRT, Inc., as Trustee, Delaware Trust Capital
Management, Inc., as Delaware Trustee, and U.S. Bank National Association, as
Trust Agent, as the same may be amended, supplemented or modified from time to
time.
"Partnership" means Ryder Truck Rental I LP, a Delaware limited
partnership, and its successors.
"Partnership Act" means the Delaware Revised Uniform Limited
Partnership Act (6 Del. C. ss.ss. 17-101, et seq.), as amended.
"Partnership Agreement" means the Amended and Restated Limited
Partnership Agreement of the Partnership, dated as of the Effective Date,
between Ryder Truck Rental I LLC and Ryder, as amended, restated or
supplemented from time to time.
"Profits" and "Losses" mean the Company's taxable income or loss for
each Fiscal Year (or other period) determined in accordance with the accounting
methods followed for federal income tax purposes, except that any income of the
Company that is exempt from federal income tax and not otherwise taken into
account in computing Profits and Losses shall be added to such taxable income
or loss.
"RTR Leasing" means RTR Leasing I. Inc., a Delaware corporation, and
its successors.
"Ryder" means Ryder Truck Rental, Inc., a Florida corporation, and its
successors.
3
<PAGE> 9
"Trustee" shall have the meaning set forth in Section 6.01.
Section 1.02. Other Definitional Provisions.
(a) For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used herein
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to words such as "herein", "hereof" and the like shall refer to
this Agreement as a whole and not to any particular part, article or section
within this Agreement, (iii) references to a section such as "Section 1.01" and
the like shall refer to the applicable section of this Agreement, (iv) the term
"include" and all variations thereof shall mean "include without limitation"
and (v) the term "or" shall include "and/or".
(b) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles in effect from time to
time. To the extent that the definitions of accounting terms in this Agreement
or in any such certificate or other document are inconsistent with the meanings
of such terms under such generally accepted accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document shall control.
ARTICLE TWO
ORGANIZATION OF COMPANY
Section 2.01. Formation. The parties hereto formed the Company as a
limited liability company pursuant to the Original LLC Agreement and the Act
and hereby agree that the rights, duties and liabilities of the Members and
Managers shall be as provided in the Act, except as otherwise provided in this
Agreement. Pursuant to Section 18 201(d) of the Act, this Agreement shall
become effective, and the Original LLC Agreement is hereby amended and restated
in its entirety, as of the Effective Date.
Section 2.02. Name and Office. The name of the Company shall be Ryder
Truck Rental I LLC, and its office shall be located at 3600 N.W. 82nd Avenue,
Miami, Florida 33166, or such other place as the Members may determine from
time to time.
Section 2.03. Duration. The term of the Company commenced on the date
the Certificate was filed on July 26, 1997, in the office of the Delaware
Secretary of State and shall continue until June 1, 2097, unless the Company is
dissolved before such date in accordance with the provisions of this Agreement.
The existence of the Company as a separate legal entity shall continue until
cancellation of the Certificate in the manner required by the Act.
Section 2.04. Registered Office and Registered Agent. The Company's
initial registered office shall be at the office of its registered agent at
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, and
4
<PAGE> 10
the name of its initial registered agent at such address shall be The
Corporation Trust Company. The registered office and registered agent may be
changed from time to time in accordance with the Act. If the registered agent
shall ever resign, the Company shall promptly appoint a successor.
Section 2.05. Execution, Delivery and Filing of Certificate. W. Daniel
Susik, as an "authorized person" within the meaning of the Act, executed,
delivered and filed the Certificate with the Delaware Secretary of State on
July 26, 1997.
ARTICLE THREE
PURPOSES
Section 3.01. Purposes. The purposes for which the Company is formed
are:
(a) to act as general partner of the Partnership and, in such
capacity permit the Partnership to engage in the activities permitted
by the Partnership Agreement and the Partnership Act;
(b) to take all permitted action in its capacity as general
partner of the Partnership, to negotiate, authorize, execute, deliver,
assume or perform any agreement, instrument, obligation or document
relating to the activities set forth in clause (a) above, including
any trust agreement or supplement, sale, servicing, pooling or
administration agreement or supplement, purchase, lease or security
agreement, indenture, reimbursement agreement, credit support
agreement, lease or receivables purchase agreement, indemnification
agreement, placement agreement or underwriting agreement; and
(c) to engage in any activity and to exercise any powers
permitted to it as general partner under the Partnership Agreement or
to limited liability companies generally under the laws of the State
of Delaware that are related or incidental to the foregoing and
necessary, convenient or advisable to accomplish the foregoing.
Section 3.02. Power and Authority. The Company, in its capacity as
general partner of the Partnership, shall have the power and authority to take
any and all actions necessary, appropriate, proper, advisable, incidental or
convenient to accomplish or for the furtherance of the purposes set forth in
Section 3.01. The Company may serve as a general partner of the Partnership.
The Company and RTR Leasing or W. Daniel Susik, on behalf of the Company, may
enter into and perform the Partnership Agreement without any further act, vote
or approval of any Member, Manager or other person, notwithstanding any other
provision of this Agreement, the Act or other applicable law, rule or
regulation.
Section 3.03. Limitations on Powers. Notwithstanding any other
provision of this Agreement and any provision of law, the Company shall not do
any of the following:
5
<PAGE> 11
(a) engage in any business or activity other than as set
forth in or contemplated by this Agreement;
(b) without the unanimous affirmative vote of the Members,
and subject to the provisions of Section 6.01, (i) dissolve or
liquidate, in whole or in part, or institute proceedings to be
adjudicated bankrupt or insolvent, (ii) consent to the institution of
bankruptcy or insolvency proceedings against it, (iii) file a petition
seeking or consenting to reorganization or relief under any applicable
federal or state law relating to bankruptcy, (iv) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or a substantial part of its
property, (v) make a general assignment for the benefit of creditors,
(vi) admit in writing its inability to pay its debts generally as they
become due, (vii) institute or join in any institution of any
bankruptcy, insolvency, liquidation, reorganization or arrangement
proceedings or other similar proceedings under any federal or state
law, or (viii) take any limited liability company action in
furtherance of the actions set forth in clauses (i) through (vii)
above;
(c) without the unanimous affirmative vote of the Members,
take or cause to be taken any of the actions referred to in clauses
(i) through (vii) of Section 3.03(b) with respect to any entity of
which the Company is a partner or member;
(d) without the unanimous affirmative vote of the Members,
merge or consolidate with any other corporation, company or entity or
sell all or substantially all of its assets or acquire all or
substantially all of the assets or capital stock or other ownership
interest of any other corporation, company or entity; or
(e) cause any entity of which the Company is a partner or
member to take any action which is inconsistent with such entity's
organizational documents.
Section 3.04. Company Opportunity. No Member need afford the Company
or any other Member the opportunity of investing or otherwise participating in
any other enterprise, regardless of whether such enterprises, but for this
sentence, would be deemed an opportunity of the Company. Nothing in this
Agreement shall prohibit any Member from engaging in any other business
activity, whether or not competitive with, similar to, or within the scope of
the activities conducted by or on behalf of the Company.
ARTICLE FOUR
CAPITAL CONTRIBUTIONS; BORROWINGS
Section 4.01. Admission and Contributions of Initial Members.
(a) Each of Ryder and the Independent Member were admitted as members
of the Company at the time such entity (i) executed the Original LLC Agreement
or a counterpart signature page to the Original LLC Agreement and (ii) was
listed as a Member on Exhibit A attached to the Original LLC Agreement (and a
copy of that exhibit appears as Exhibit A hereto).
6
<PAGE> 12
(b) The Members made the Capital Contributions set forth next to their
names in Exhibit A upon the formation of the Company. No interest shall accrue
on any Capital Contribution made to the Company.
Section 4.02. Additional Capital Contributions. The Members shall not
be obligated to make additional Capital Contributions except upon the consent
of all Members.
Section 4.03. Withdrawals. No Member shall be entitled to be repaid
any portion of its Capital Account or withdraw from the Company without the
consent of all Members or as otherwise provided in this Agreement.
Section 4.04. Borrowings. The Company may borrow sums to be used for
any of the business purposes described in Section 3.01; provided, however, that
any such borrowing shall require the prior approval of the Majority Members and
shall not be prohibited by this Agreement, any applicable law, regulation or
agreement. Any Member may advance such sums to the Company as approved in
writing by the Majority Members. Any amounts borrowed from a Member shall not
constitute a contribution to the capital of the Company but shall constitute a
debt of the Company which shall be repaid before any distributions to the
Members. No Member shall have any obligation under this Agreement to make any
such loan or advance.
Section 4.05. Additional Members. No additional Members shall be
admitted to the Company without the unanimous consent of the Members.
ARTICLE FIVE
MANAGEMENT
Section 5.01. Powers of the Members.
(a) The Company shall be managed by its Members. Subject to the other
provisions of this Article and Article Six, each Member shall have the
authority, on behalf of the Company, to do all things appropriate for the
accomplishment of the purposes of the Company, including, (i) taking the
actions described in Section 3.01; (ii) disbursing Company funds for Company
purposes; (iii) investing and reinvesting Company funds; (iv) executing
contracts, notes, mortgages and other agreements and instruments; (v) employing
attorneys, accountants, Managers or other agents, which may include Affiliates
of the Company; (vi) paying all Company obligations; (vii) performing all
ministerial acts and duties relating to the payment of all indebtedness, taxes
and assessments due or to become due with regard to any property of the
Company; (viii) purchasing and maintaining insurance on behalf of the Company
against any liability or expense asserted against or incurred by or on behalf
of the Company; (ix) transacting the Company's business under an assumed name
or name other than its name as set forth in the Certificate; (x) appointing any
Member or other person as agent for service of process on the Company as
required by the law of any jurisdiction in which the Company transacts
business; (xi) commencing, prosecuting or defending any proceeding in the
Company's name; and (xii) doing such other acts as may facilitate the Company's
exercise of its powers; provided, however, that all such acts shall fall within
the purposes of the Company as set forth in Section 3.01.
7
<PAGE> 13
(b) Notwithstanding anything in this Agreement to the contrary, the
Company shall at all times have at least one Independent Member, and no action
of the type described in Article Six shall occur without the consent of each
Independent Member.
(c) Each Member irrevocably appoints each other Member as its
attorney-in-fact on its behalf and in its stead to execute and swear to any
amendment to the Certificate and file any writing, and to give any notice which
may be required by any rule or law and which may be necessary or appropriate in
order to effect any action by or on behalf of the Company or the Members taken
as provided in this Agreement or which may be necessary or appropriate to
correct any errors or omissions. This power of attorney is coupled with an
interest and shall not be revoked by the act of any Member. This power of
attorney shall survive and not be affected by an assignment by any Member of
its limited liability company interest in the Company; provided, however, that
where a Member's entire limited liability company interest is assigned to an
assignee who becomes a substitute Member in its stead, such power shall survive
for the sole purpose of enabling such Member to effect such substitution. Each
Member shall provide seven days' prior written notice of actions to be taken as
attorney-in-fact on behalf of another Member and the acting Member shall be
authorized to take such actions unless the other Member objects in writing
during such notice period.
(d) A copy of the Certificate will be provided to each Member upon
written request to the Company.
(e) Subject to the other provisions of this Article and Article Six,
the Members shall have full power to act for and to bind the Company to the
extent provided by Delaware law. Every contract, note, mortgage, lease, deed or
other instrument or agreement executed by any Member shall be conclusive
evidence that at the time of execution, the Company was then in existence, that
this Agreement had not theretofore been terminated or amended in any manner and
that the execution and delivery of such instrument was duly authorized by the
Members. A Manager that is not also a Member may bind the Company only to the
extent authorized by the Members.
Section 5.02. Limitations on Powers of Members. Notwithstanding any
other provision of this Agreement, no act shall be taken, sum expended,
decision made, obligation incurred or power exercised by any Member on behalf
of the Company, without prior written notice to all Members outlining the
proposed action followed by the written consent of a Majority Interest with
respect to: (i) any mortgage, grant of security interest, pledge or encumbrance
of any asset of the Company; (ii) any merger of the Company with another
entity; (iii) a transaction involving an actual or potential conflict of
interest between a Member and the Company; (iv) any material change in the
character of the business and affairs of the Company; or (v) any act that would
contravene in a material respect any provision of this Agreement or the Act.
Section 5.03. Self Dealing. Any Member and any Affiliate thereof may
deal with the Company, directly or indirectly, as vendor, purchaser, employee,
agent or otherwise. No contract or other act of the Company shall be voidable
or affected in any manner by the fact that a Member or an Affiliate thereof is
8
<PAGE> 14
directly or indirectly interested in such contract or other act apart from its
interest as a Member, nor shall any Member or an Affiliate thereof be
accountable to the Company or the other Members in respect of any profits
directly or indirectly realized by reason of such contract or other act, and
such interested Member shall be eligible to vote or take any other action as a
Member in respect of such contract or other act as it would be entitled were it
or its Affiliate not interested therein. Notwithstanding the foregoing, (i) any
direct or indirect interest of a Member or an Affiliate thereof in any contract
or other act, other than its interest as a Member, shall be disclosed to all
other Members, (ii) such contract or other act shall be approved by a Majority
Interest unless the same is specifically authorized herein and (iii) the
Members shall not receive or hold any property of the Company as collateral
security in respect of any claim against the Company.
Section 5.04. Standard of Care; Liability. Each Member and its
respective directors, officers, stockholders, partners, members and Affiliates
shall discharge its duties in good faith, with the care an ordinarily prudent
person in a like position would exercise under similar circumstances, and in a
manner he reasonably believes to be in the best interests of the Company as
required by this Agreement or the Act. A Member shall not be liable for
monetary damages to the Company for any breach of any such duties except for
receipt of a financial benefit to which the Member is not entitled, voting for
or assenting to a distribution to Members in violation of this Agreement or the
Act, or a knowing violation of the law.
Section 5.05. Compensation. The Company shall reimburse each Member
for any reasonable out-of-pocket expenses incurred on behalf of the Company. In
addition, any Member may receive reasonable compensation for any services
rendered to the Company approved by the Majority Interest.
Section 5.06. Meetings of Members. All Members shall be entitled to
vote on any matter submitted to a vote of the Members. Unless a greater vote is
required by the Act or this Agreement, the affirmative vote of the Majority
Members shall be required. Meetings of Members for the transaction of such
business as may properly come before the Members may be held at such place, on
such date and at such time as the Majority Interest shall determine. Special
meetings of Members for any proper purpose or purposes may be called at any
time by the holders of at least 25% of the Membership Percentages of all
Members. The Company shall deliver or mail written notice stating the date,
time, place and purposes of any meeting to each Member entitled to vote at the
meeting. Such notice shall be given not less than ten nor more than 60 days
before the date of the meeting.
Section 5.07. Consent. Any action required or permitted to be taken at
an annual or special meeting of the Members may be taken without a meeting, if
the Members unanimously consent, in writing, to take the proposed action. Every
written consent shall bear the date of consent in lieu of meeting and the
signature of each Member who signs the consent.
Section 5.08. Independent Member. The Company shall at all times have
at least one Member (each, an "Independent Member") that shall be a special
purpose corporation formed pursuant to a charter or articles of incorporation
that (i) limits its business purposes and activities and (ii) requires the
9
<PAGE> 15
unanimous consent of its entire board of directors (without any vacancies),
including the affirmative vote of all Independent Directors before it may
approve, permit or take any action, or cause any action to be taken in respect
of the following actions with respect to each limited liability company of
which it is a member, to (a) institute proceedings to have itself adjudicated
bankrupt or insolvent, (b) consent to the institution of bankruptcy or
insolvency proceedings against it, (c) file a petition seeking, or consent to,
such member's or limited liability company's reorganization or relief under any
applicable federal or state law relating to bankruptcy, (d) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator or other
similar official of such member or limited liability company or a substantial
part of its property, (e) make any assignment for the benefit of its creditors,
admit in writing its inability to pay its debts generally as they become due,
(f) institute, or join in any institution of, any bankruptcy, insolvency,
liquidation, reorganization or arrangement proceedings or other proceedings
under any federal or state bankruptcy or similar law, against any entity in
which such member or limited liability company holds an ownership interest or
(g) take any action in furtherance of the actions set forth in clauses (a)
through (f) above. As of the Effective Date, RTR Leasing is the Independent
Member.
Section 5.09. Managers. Except as otherwise provided by the Act:
(a) the debts, obligations and liabilities of the Company,
whether arising in contract, tort or otherwise, shall be solely the
debts, obligations and liabilities of the Company, and no Manager
shall be obligated personally for any such debt, obligation, or
liability of the Company solely by reason of being a Manager of the
Company;
(b) no Manager shall be required to make any Capital
Contribution in the form of cash to the Company; and
(c) no Manager shall be entitled to receive any Profits or
liable for any Losses.
ARTICLE SIX
POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS
Section 6.01. Unanimous Vote Required. Notwithstanding any other
provision of this Agreement and any provision of law that otherwise so empowers
the Company, the Company shall not, without (i) the prior written consent of
each trustee from time to time (each, a "Trustee") under any pooling and
servicing agreement, indenture, trust agreement or similar agreement between
the Company or the Partnership, a Trustee and a servicer, if any, pursuant to
which the Company or the Partnership shall issue, or cause to be issued,
certificates and/or notes and (ii) the affirmative vote of 100% of the Members
of the Company, including all Independent Members, institute proceedings to be
adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against it, or file a petition seeking, or
consent to, reorganization or relief under any applicable federal or state law
relating to bankruptcy, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or a substantial part of its property, or make any assignment for the
10
<PAGE> 16
benefit of creditors, or admit in writing its inability to pay its debts
generally as they become due, or take any limited liability company action in
furtherance of any such action.
Section 6.02. Voting on Bankruptcy or Insolvency. All Members,
including each Independent Member, shall be entitled to vote on any proposal of
the type described in Section 6.01. The affirmative vote of 100% of the
Members, including each Independent Member, entitled to vote on such a proposal
shall be required for such a proposal to be adopted.
ARTICLE SEVEN
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
Section 7.01. Capital Accounts. A capital account shall be maintained
for each Member (each, a "Capital Account"), to which contributions and Profits
shall be credited and against which distributions and Losses shall be charged.
Capital Accounts shall be maintained in accordance with the accounting
principles of Code Section 704 and the Treasury Regulations thereunder.
Section 7.02. Allocation of Profits and Losses. Profits and Losses
shall be determined as of the end of each Fiscal Year of the Company and shall
be allocated to Ryder. RTR Leasing will have no interest in Profits and Losses.
Section 7.03. Distributions.
(a) The Company shall distribute to Ryder such sums as the Majority
Interest determines to be available for distribution and not required to
provide for current or anticipated Company needs. All distributions shall be
made to or upon the order of Ryder.
(b) No distributions shall be declared and paid unless, after the
distribution is made, the Company would be able to pay its debts as they become
due in the usual course of business and the assets of the Company are in excess
of the sum of (i) the Company's liabilities, plus (ii) the amount that would be
needed to satisfy the preferential rights of other Members upon dissolution
that are superior to the rights of the Members receiving the distribution.
(c) The Company shall not be required to make a distribution to a
Member on account of its interest in the Company if such distribution would
violate Section 18-607 of the Act or other applicable law.
ARTICLE EIGHT
EXCULPATION OF LIABILITY; INDEMNIFICATION
Section 8.01. Exculpation of Liability. Except as otherwise provided
by the Act, the debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
11
<PAGE> 17
and liabilities of the Company, and no Member or Manager shall be obligated
personally for any such debt, obligation or liability of the Company solely by
reason of being a Member or Manager of the Company.
Section 8.02. Indemnification. The Company hereby agrees to indemnify
each Member, Manager, employee or agent of the Company, and each director,
officer, employee or Affiliate of a Member, who was or is a party or is
threatened to be made a party to a threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
and whether formal or informal (other than an action by or in the right of the
Company) by reason of the fact that such person is or was a Member, employee or
agent of the Company against expenses (including reasonable attorneys' fees),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with the action, suit or
proceeding.
Section 8.03. Fiduciary Duty. To the extent that, at law or in equity,
a Member, director, officer, employee or Affiliate of a Member, or a Manager
(each, a "Covered Person") has duties (including fiduciary duties) and
liabilities relating thereto to the Company or to any other Covered Person, a
Covered Person acting under this Agreement shall not be liable to the Company
or to any Member for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they restrict
the duties and liabilities of a Covered Person otherwise existing at law or in
equity, are agreed by the Members to replace such other duties and liabilities
of such Covered Person.
ARTICLE NINE
TERM OF COMPANY
Section 9.01. Commencement. The term of the Company commenced upon the
filing of the Certificate with the Delaware Secretary of State. The bankruptcy
of a Member or the occurrence of any other event under Section 18-304 of the
Act shall not cause a Member to cease to be a Member of the Company and upon
the occurrence of such an event, the business of the Company shall continue
without dissolution.
Section 9.02. Dissolution.
(a) The Company shall be dissolved, and its affairs shall be wound up
upon the first to occur of the following: (i) the termination of the legal
existence of the last remaining member of the Company or the occurrence of any
other event which terminates the continued membership of the last remaining
member of the Company in the Company unless the business of the Company is
continued in a manner permitted by this Agreement or the Act or (ii) the entry
of a decree of judicial dissolution under Section 18-802 of the Act. Upon the
occurrence of any event that causes the last remaining member of the Company to
cease to be a member of the Company, to the fullest extent permitted by law,
the personal representative of such member is hereby authorized to, and shall,
within 90 days after the occurrence of the event that terminated the continued
12
<PAGE> 18
membership of such member in the Company, agree in writing (i) to continue the
Company and (ii) to the admission of the personal representative or its nominee
or designee, as the case may be, as a substitute member of the Company,
effective as of the occurrence of the event that terminated the continued
membership of the last remaining member of the Company in the Company.
(b) Notwithstanding any other provision of this Agreement, the
Bankruptcy of a Member shall not cause the Member to cease to be a member of
the Company and upon the occurrence of such an event, the business of the
Company shall continue without dissolution.
(c) Notwithstanding any other provision of this Agreement, each Member
waives any right it might have to agree in writing to dissolve the Company upon
the Bankruptcy of the Member, or the occurrence of an event that causes the
Member to cease to be a member of the Company.
(d) In the event of dissolution, the Company shall conduct only such
activities as are necessary to wind up its affairs (including the sale of the
assets of the Company in an orderly manner), and the assets of the Company
shall be applied in the manner, and in the order of priority, set forth in
Section 18-804 of the Act.
(e) The Company shall terminate when (i) all of the assets of the
Company, after payment of or due provision for all debts, liabilities and
obligations of the Company shall have been distributed to each Member in the
manner provided for in this Agreement and (ii) the Certificate shall have been
canceled in the manner required by the Act.
ARTICLE TEN
APPLICATION OF ASSETS
Section 10.01. Application of Assets. Upon dissolution of the Company,
the Company shall cease carrying on its business and affairs and shall commence
winding up of the Company's business and affairs and complete the winding up as
soon as practicable. The Company's affairs shall be concluded by a Member or
Members selected in writing by the Majority Interest. The assets of the Company
may be liquidated or distributed in kind, as determined by the Majority
Members, and the same shall first be applied to the payment of, or to a
reasonable reserve for the payment of, the Company's liabilities (including
such provision for contingent, conditional or unmatured liabilities as the
Majority Interest shall deem appropriate) and then to Ryder. If the assets of
the Company shall not be sufficient to pay all of the liabilities of the
Company, to the fullest extent permitted by the Act, no assets of the Company
may be sold or disposed of without the written consent of all of the holders of
outstanding securities issued by any trust formed in respect of a transaction
to which the Company is a party. To the extent that Company assets cannot
either be sold without undue loss or readily divided for distribution in kind
to the Members, then the Company may, as determined by the Majority Interest,
convey those assets to a trust or other suitable holding entity established for
the benefit of the Members in order to permit the assets to be sold without
13
<PAGE> 19
undue loss and the proceeds thereof distributed to the Members at a future
date. The legal form of the holding entity, the identity of the trustee or
other fiduciary and the terms of its governing instrument shall be determined
by the Majority Interest.
Section 10.02. Termination. The Company shall terminate when all the
assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to the
Members in the manner provided for in this Article and the Certificate shall
have been cancelled in the manner required by the Act.
Section 10.03. Claims of the Members. The Members and former Members
shall look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and former
Members shall not have recourse against the Company or any other Member or
Manager.
ARTICLE ELEVEN
RESTRICTION ON TRANSFERS OF INTERESTS
Section 11.01. Restriction on Transfers of Interests. No Member may
assign, pledge or otherwise transfer its interest in the Company in whole or
part. Any attempt by a Member to transfer its interest shall be null and void.
ARTICLE TWELVE
INVESTMENT REPRESENTATION
Section 12.01. Investment Representation. The Members represent to
each other and to the Company that they are acquiring their respective
interests in the Company for their own accounts, and without a view to selling
or pledging them.
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.01. Limitations on Amendment. The Company shall not,
without the prior approval or written consent of each nationally recognized
rating agency that has rated any securities collateralized or backed by
interests or beneficial interests in assets of the Origination Trust that have
been issued and are outstanding pursuant to any pooling and servicing
agreement, indenture, trust agreement or other similar agreement entered into
14
<PAGE> 20
by the Company, the Partnership or any of their respective Affiliates, amend,
alter, change or repeal Article Three, Section 5.08, Article Six or this
Section. Subject to the foregoing limitation, the Company reserves the right to
amend, alter, change or repeal any provision contained in this Agreement in the
manner now or hereafter prescribed by statute or applicable law, and all rights
conferred upon Members herein are granted subject to this reservation; provided
that this Agreement may not be amended without affirmative vote of 100% of the
Members of the Company, including the Independent Members.
Section 13.02. Books of Account; Reports.
(a) The Company shall keep true and complete books of account and
records of all Company transactions. The books of account and records shall be
kept at the principal office of the Company. The Company shall maintain at such
office (i) a list of names and addresses of all Members; (ii) a copy of the
Certificate; (iii) copies of the Company's federal, state and local income tax
returns and reports for the three most recent years; (iv) copies of this
Agreement; and (v) copies of the financial statements of the Company for the
three most recent years. Such Company records shall be available to any Member
or its designated representative during ordinary business hours at the
reasonable request and expense of such Member.
(b) The Company will diligently endeavor to furnish, or cause to be
furnished, to Members the following items on or promptly after the date
indicated: (i) annually by December 31, (A) an annual report consisting of an
income statement for the prior year and a balance sheet as of the year ended
and (B) Member information tax returns (Schedule K-1) and (ii) as required,
such other information concerning the Company and the property of the Company
as may be appropriate in order to make full and fair disclosure to the Members
of the current financial and operating conditions of the Company.
Section 13.03. Bank Accounts and Investment of Funds. All funds of the
Company shall be deposited in its name in such checking accounts, savings
accounts, time deposits or certificates of deposit or shall be invested in such
other manner, as shall be designated by the Majority Interest from time to
time. Withdrawals shall be made upon such signature or signatures as the
Majority Interest may designate.
Section 13.04. Accounting Decisions. All decisions as to accounting
matters, except as specifically provided to the contrary herein, shall be made
by the Majority Interest in accordance with generally accepted accounting
principles consistently applied. Such decisions shall be acceptable to the
accountants retained by the Company, and the Majority Interest may rely upon
the advice of the accountants as to whether such decisions are in accordance
with generally accepted accounting principles.
Section 13.05. Federal Income Tax Elections. The Company shall, to the
extent permitted by applicable law and regulations and upon obtaining any
necessary approval of the Commissioner of Internal Revenue, elect to use such
methods of depreciation, and make all other federal income tax elections in
such manner, as the Majority Interest determines to be most favorable to the
Members. The Majority Interest may rely upon the advice of the accountants
retained by the Company as to the availability and effect of all such
15
<PAGE> 21
elections. The Majority Interest shall elect to treat the Company as a single
member entity formed as an agent of Ryder and not as separate corporation or
partnership for federal and applicable state income tax purposes.
Section 13.06. Entire Agreement. This Agreement constitutes the entire
Agreement between the parties and may be modified only as provided herein. No
representations or oral or implied agreements have been made by any party
hereto or its agent, and no party to this Agreement has relied upon any
representation or agreement not set forth herein. This Agreement supersedes any
and all other agreements, either oral or written, among the Company and its
Members.
Section 13.07. Notices. Except as provided below, all communications
and notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy numbers set forth on Exhibit A hereto,
or at such other address or telecopy number as such party may hereafter specify
for the purposes of notice to the other party hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon receipt
thereof, (ii) if given by mail, three business days after the time such
communication is deposited in the mails with first-class postage prepaid or
(iii) if given by any other means, when received at the address specified in
this Section.
Section 13.08. Consent of Members. Various provisions of this
Agreement require or permit the consent, agreement, approval or disapproval,
written or otherwise, of the Members or some specified proportion thereof. In
any such case, the Company may give all Members written notice that any Member
who does not indicate its disapproval by written notice to the Company within a
specified period of time (not less than 30 days after mailing of the notice)
shall be deemed to have given its consent or approval to the action or event or
to have made the agreement referred to in the notice. In such event, any Member
who does not indicate its disapproval by written notice to the Company within
the time specified shall be deemed to have given its written consent, approval,
disapproval or agreement.
Section 13.09. Further Execution. Upon request of the Company from
time to time, the Members shall execute and swear to or acknowledge any amended
Certificate and any other writing which may be required by any rule or law or
which may be appropriate to the effecting of any action by or on behalf of the
Company or the Members which has been taken in accordance with the provisions
of this Agreement.
Section 13.10. Binding Effect. This Agreement shall be binding upon
and shall inure to the benefit of the parties, their successors and permitted
assigns. None of the provisions of this Agreement shall be construed as for the
benefit of or as enforceable by any creditor of the Company or the Members or
any other person not a party to this Agreement.
Section 13.11. Severability. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any Security or
the rights of the holders thereof.
16
<PAGE> 22
Section 13.12. Captions. All captions are for convenience only, do not
form a substantive part of this Agreement and shall not restrict or enlarge any
substantive provisions of this Agreement.
Section 13.13. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
shall constitute one instrument. The Company shall have custody of the
counterparts executed in the aggregate by all Members.
Section 13.14. Delaware Law to Control. This Agreement shall be
governed by, and all questions with respect to the construction of this
Agreement and the rights and liabilities of the parties hereto shall be
determined in accordance with, the internal laws of the State of Delaware,
without regard to any otherwise applicable principles of conflicts of laws.
17
<PAGE> 23
IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Limited Liability Company Agreement to be duly executed by their respective
officers as of the day and year first above written.
RYDER TRUCK RENTAL, INC.
By:
---------------------------------------
W. Daniel Susik
Treasurer
RTR LEASING I, INC.
By:
---------------------------------------
W. Daniel Susik
Treasurer
18
<PAGE> 24
EXHIBIT A
<TABLE>
<CAPTION>
Capital Membership
Member's Name and Address Contributions Percentages
- ------------------------- ------------- -----------
<S> <C> <C>
RYDER TRUCK RENTAL, INC., $1,000.00 100%
Attention: Treasurer, 2C
3600 N.W. 82nd Avenue, Miami, Florida 33166
(telecopy no.: (305) 500-3641)
RTR LEASING I, INC. -0- 0%
Attention: Treasurer, 2C
3600 N.W. 82nd Avenue, Miami, Florida 33166
(telecopy no.: (305) 500-3641)
Total $1,000.00 100%
======== ====
</TABLE>
19
<PAGE> 1
Exhibit 3.6
================================================================================
RYDER TRUCK RENTAL I LP
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
Between
RYDER TRUCK RENTAL I LLC,
as General Partner,
and
RYDER TRUCK RENTAL, INC.,
as Limited Partner
Dated as of October 1, 1999
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions................................................................................... 1
Section 1.02. Other Definitional Provisions................................................................. 5
ARTICLE TWO
NAME, PURPOSE AND PARTNERS
Section 2.01. Name. ....................................................................................... 6
Section 2.02. Purpose....................................................................................... 6
Section 2.03. Registered Office............................................................................. 7
Section 2.04. Registered Agent.............................................................................. 7
Section 2.05. Certificate of Limited Partnership and Other Filings.......................................... 7
Section 2.06. Partners' Addresses........................................................................... 7
Section 2.07. Authorization to Enter into Certain Agreements................................................ 7
Section 2.08. Effective Date................................................................................ 8
ARTICLE THREE
CAPITAL ACCOUNTS; LIMITATION OF LIMITED PARTNERS' LIABILITY
Section 3.01. Initial Capital Contributions................................................................. 8
Section 3.02. Additional Capital Contributions.............................................................. 8
Section 3.03. Withdrawal of Capital......................................................................... 8
Section 3.04. Partnership Interests and Capital Accounts.................................................... 8
Section 3.05. Limitation of Limited Partners' Liability..................................................... 8
ARTICLE FOUR
ADMISSION OF ADDITIONAL PARTNERS
Section 4.01. Authority of General Partner to Admit Additional Partners..................................... 10
Section 4.02. Partnership Interests on Admission of Additional Partners..................................... 10
ARTICLE FIVE
MANAGEMENT OF THE PARTNERSHIP
Section 5.01. Authority of General Partner.................................................................. 10
Section 5.02. Specific Powers of General Partner............................................................ 12
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 5.03. Powers Requiring Concurrence of Limited Partners.............................................. 12
Section 5.04. Duties of General Partner..................................................................... 12
Section 5.05. Compensation of General Partner and Expenses.................................................. 12
Section 5.06. Scope of Responsibility....................................................................... 12
Section 5.07. Contracts With Affiliates..................................................................... 13
Section 5.08. Indemnification............................................................................... 13
Section 5.09. Limited Partners' Rights...................................................................... 13
Section 5.10. Partnership Property.......................................................................... 13
Section 5.11. Duties of the General Partner and Certain Other Persons....................................... 13
ARTICLE SIX
STATEMENTS AND FISCAL YEAR
Section 6.01. Statements.................................................................................... 14
Section 6.02. Fiscal Year................................................................................... 14
ARTICLE SEVEN
FINANCIAL ALLOCATIONS AND DISTRIBUTIONS
Section 7.01. Tax Elections................................................................................. 14
Section 7.02. Maintenance of Partners' Capital Accounts..................................................... 14
Section 7.03. Net Income and Net Loss; Cash Flow............................................................ 15
Section 7.04. Special Tax Allocations....................................................................... 15
Section 7.05. Curative Allocations.......................................................................... 16
Section 7.06. Other Allocation Rules........................................................................ 16
Section 7.07. Allocation of Built-In Gains.................................................................. 16
Section 7.08. Distribution of Cash Flow and Other Amounts................................................... 17
Section 7.09. Restricted Distributions...................................................................... 17
ARTICLE EIGHT
NO WITHDRAWAL OF PARTNER; DEATH, LEGAL INCAPACITY, DISSOLUTION OR BANKRUPTCY OF LIMITED PARTNER
Section 8.01. No Withdrawal................................................................................. 17
Section 8.02. Death, Legal Incapacity, Dissolution and Bankruptcy........................................... 17
ARTICLE NINE
NO TRANSFER OF PARTNERSHIP INTERESTS
Section 9.01. No Transfer of Partnership Interests.......................................................... 17
Section 9.02. Dealing with General Partner.................................................................. 18
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 9.03. Compliance With Federal and State Law......................................................... 18
ARTICLE TEN
TERM AND DISSOLUTION
Section 10.01. Term and Dissolution of Partnership.......................................................... 18
Section 10.02. Distribution after Dissolution............................................................... 18
Section 10.03. Dissolution If No General Partner Remaining.................................................. 19
Section 10.04. Reserves..................................................................................... 19
Section 10.05. Statement.................................................................................... 19
Section 10.06. Distribution Limited to Partnership Assets................................................... 19
Section 10.07. Termination.................................................................................. 20
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Power of Attorney............................................................................ 20
Section 11.02. Governing Law and Arbitration................................................................ 21
Section 11.03. Successors and Assigns....................................................................... 21
Section 11.04. Counterparts; Integration.................................................................... 21
Section 11.05. No Partition................................................................................. 21
Section 11.06. Captions..................................................................................... 21
Section 11.07. Severability................................................................................. 21
Section 11.08. Notices...................................................................................... 22
Section 11.09. Amendment, Waiver............................................................................ 22
Section 11.10. Further Assurances........................................................................... 22
EXHIBITS
Exhibit A - Gross Asset Value of Initial Capital Contributions........................................ A-1
Exhibit B - Initial Partnership Interests............................................................. B-1
</TABLE>
iii
<PAGE> 5
This Amended and Restated Limited Partnership Agreement is entered into
as of October 1, 1999, between Ryder Truck Rental I LLC, a Delaware limited
liability company, as general partner (together with any additional or successor
general partners admitted pursuant hereto, the "General Partner"), and Ryder
Truck Rental, Inc., a Florida corporation, as limited partner (together with any
additional or successor limited partners admitted pursuant hereto, the "Limited
Partner").
RECITALS
WHEREAS, Ryder Truck Rental I LP is a Delaware limited partnership
created pursuant to a limited partnership agreement, dated as of June 1, 1997
(the "Original Partnership Agreement"), between the General Partner and the
Limited Partner; and
WHEREAS, the parties hereto desire to amend and restate the Original
Partnership Agreement in its entirety.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS. For the purposes of this Agreement, the
terms set forth below shall have the following meanings:
"ACT" means the Delaware Revised Uniform Limited Partnership Act (6
Del. C. ss.ss. 17-101, ET seq.), as amended from time to time.
"ADDITIONAL GENERAL PARTNER" means a Person admitted to the Partnership
as an additional general partner pursuant to Article Four.
"ADDITIONAL LIMITED PARTNER" means a Person admitted to the Partnership
as an additional limited partner pursuant to Article Four.
"AFFILIATE" of any Person means any other Person that (i) directly or
indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with any responsibility
for administering, any employee benefit plan) or (ii) is an officer, director or
partner of such Person. For purposes of this definition, a Person shall be
deemed to be "controlled by" another Person if such other Person possesses,
directly or indirectly, the power (i) to vote 5% or more of the securities (on a
fully diluted basis) having ordinary voting power for the election of directors,
members or managing partners of such Person or (ii) to direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
<PAGE> 6
"AGREEMENT" means this Amended and Restated Limited Partnership
Agreement, as the same may be amended, modified or supplemented from time to
time.
"BANKRUPTCY" means the occurrence of any of the events specified in
Section 17-402(a)(4) or (5) of the Act as in effect on the Effective Date.
"BUILT-IN GAIN" means the difference between the initial Gross Asset
Value of any property contributed to the Partnership and its adjusted basis for
federal income tax purposes immediately prior to contribution.
"CAPITAL ACCOUNT" shall have the meaning set forth in Section 3.04.
"CAPITAL CONTRIBUTION" means, with respect to any Partner, the amount
of money and/or the initial Gross Asset Value of any property other than money
contributed by such Partner from time to time to the capital of the Partnership
or incurred by such Partner as start-up expenses with respect to the
Partnership.
"CASH FLOW" means, for any fiscal period, gross cash revenues derived
from the operation of the Partnership's business and from the sale, exchange or
disposition of Partnership property, less any expenses and any Reserves
established by the General Partner or a liquidating trustee during such period.
"CODE" means the Internal Revenue Code of 1986, as amended.
"DELAWARE SECRETARY OF STATE" means the Secretary of State of the State
of Delaware.
"EFFECTIVE DATE" means October 1, 1999.
"GENERAL PARTNER" shall have the meaning set forth in the preamble to
this Agreement.
"GROSS ASSET VALUE" means, with respect to any asset, such asset's
adjusted basis for federal income tax purposes, except that:
(i) the initial Gross Asset Value of an asset contributed by a
Partner to the Partnership shall be the fair market value thereof, as
determined by the General Partner and set forth in Exhibit A hereto;
(ii) upon the occurrence of any of the following events, the
Gross Asset Value of the Partnership assets shall be adjusted to equal
their respective current gross fair market values, as determined by the
General Partner, as of the date of such event: (a) the acquisition of
additional interests in the Partnership by any new or existing Partner
in exchange for more than a de minimis Capital Contribution, (b) the
distribution by the Partnership to a Partner of more than a de minimis
amount of cash or other Partnership Property as consideration for an
interest in the Partnership and (c) the liquidation of the Partnership
within the meaning of the Regulations; provided, however, that any
adjustments pursuant to clauses (a) and (b) above shall be made only if
2
<PAGE> 7
the General Partner reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests of
the Partners in the Partnership;
(iii) the Gross Asset Value of any Partnership asset
distributed to a Partner shall be adjusted to equal the gross fair
market value of such asset on the date of distribution as determined by
the General Partner; and
(iv) the Gross Asset Value of any Partnership asset shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such asset pursuant to Code Section 734(b) or 743(b), but only
to the extent that such adjustment is taken into account in determining
Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the
Regulations, Section 7.01 of this Agreement and clause (iv) of the
definition of the terms "Net Income" and "Net Losses"; provided,
however, that the Gross Asset Value of an asset shall not be adjusted
pursuant to this subparagraph to the extent that the General Partner
determines that an adjustment pursuant to clause (ii) above is
necessary or appropriate in connection with a transaction that
otherwise would result in an adjustment pursuant to this subparagraph.
"INDEMNIFIED PARTIES" shall have the meaning set forth in Section 5.08.
"IRS" means the Internal Revenue Service, and its successors.
"LIMITED PARTNER" shall have the meaning set forth in the preamble to
this Agreement.
"NET INCOME" or "NET LOSSES" means, for a fiscal year or other fiscal
period, an amount equal to the Partnership's taxable income or loss for such
year or period, determined in accordance with Code Section 703(a) (for purposes
of this definition, all items of income, gain, loss or deduction required to be
stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:
(i) any income of the Partnership that is exempt from federal
income tax and is not otherwise taken into account in computing Net
Income or Net Losses pursuant to this definition shall be added to such
taxable income or loss;
(ii) any expenditures of the Partnership that can be neither
deducted nor capitalized (and any expenditures treated as such pursuant
to the Regulations) and that are not otherwise taken into account in
computing Net Income or Net Losses pursuant to this definition shall be
added to such taxable income or loss;
(iii) in the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to clause (ii) of the definition of the term
"Gross Asset Value," the amount of such adjustment shall be taken into
account as gain or loss upon the disposition of such asset for purposes
of computing Net Income or Net Losses;
(iv) gain or loss resulting from any disposition of
Partnership assets with respect to which gain or loss is recognized for
federal income tax
3
<PAGE> 8
purposes shall be computed by reference to the Gross Asset Value of the
property so disposed of, notwithstanding that the adjusted tax basis of
such property differs from its Gross Asset Value;
(v) any depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss
with respect to any asset the Gross Asset Value of which differs from
its adjusted basis for federal income tax purposes at the beginning of
the related taxation period shall be in an amount that bears the same
ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization or other cost recovery deduction for such
year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation,
amortization or other cost recovery deduction for such period is zero,
the depreciation, amortization and other cost recovery deduction with
respect to such asset shall be determined with reference to such
beginning Gross Asset Value using any reasonable method;
(vi) to the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or 743(b) is
required to be taken into account pursuant to Section
1.704-1(b)(2)(iv)(m)(4) of the Regulations in determining Capital
Accounts other than with respect to a complete liquidation of a
Partner's interest in the Partnership, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of
the asset) from the disposition of such asset and shall be taken into
account for purposes of computing Net Income or Net Losses; and
(vii) notwithstanding the foregoing, any items that are
specifically allocated pursuant to Section 7.05 or 7.06 shall not be
taken into account in computing Net Income or Net Losses.
"ORIGINAL PARTNERSHIP AGREEMENT" has the meaning set forth in the
Recitals.
"ORIGINATION TRUST" means Ryder Truck Rental LT, a Delaware business
trust.
"ORIGINATION TRUST AGREEMENT" means that certain second amended and
restated trust agreement, dated as of February 1, 1998 among Ryder Truck Rental
I LP and Ryder Truck Rental II LP, as Grantors and UTI Beneficiaries, Ryder
Truck Rental, Inc., as Administrative Agent, RTRT, Inc., as Trustee, Delaware
Trust Capital Management, Inc., as Delaware Trustee and U.S. Bank National
Association, as Trust Agent, as the same may be amended, supplemented or
modified from time to time.
"ORIGINATION TRUST INTERESTS" shall have the meaning set forth in
Section 2.02(a).
"PARTNER" means a General Partner or a Limited Partner.
"PARTNERSHIP" means Ryder Truck Rental I LP, a Delaware limited
partnership, and its successors.
4
<PAGE> 9
"PARTNERSHIP CERTIFICATE" means the certificate of limited partnership
of the Partnership.
"PARTNERSHIP INTEREST" means, with respect to each Partner, the stated
percentage interest of such Partner in each item of Partnership income, gain,
loss, deduction or credit as set forth in Exhibit B, as the same may be modified
from time to time to reflect any changes therein that occur pursuant to this
Agreement.
"PARTNERSHIP PROPERTY" means all real, personal and other property of
the Partnership, whether tangible or intangible, and includes (i) cash and
marketable securities; (ii) the beneficial interests of the Partnership in the
Origination Trust (including any interest in the UTI or any SUBI that the
Partnership may own from time to time) and any Securitization Trust and all
monies due thereon and paid thereon or in respect thereof; (iii) the right to
realize upon any property that may be deemed to secure any interest described in
clause (ii) above; and (iv) all proceeds of the foregoing.
"PERSON" means any legal person, including any individual, corporation,
partnership, joint venture, association, limited liability company, joint stock
company, trust, bank, trust company, estate (including any beneficiaries
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"REGULATIONS" means any regulations promulgated by the IRS under the
Code, as the same may be amended from time to time, including any corresponding
provisions of succeeding regulations.
"REGULATORY ALLOCATION" shall have the meaning set forth in
Section 7.04(a).
"RESERVES" shall have the meaning set forth in Section 10.04.
"RYDER" means Ryder Truck Rental, Inc., a Florida corporation, and its
successors.
"SECURITIES" shall have the meaning set forth in Section 2.02(b).
"SECURITIZATION" means (i) a financing transaction of any sort
undertaken by a beneficiary (or a special purpose affiliate thereof) of the
Origination Trust that is secured, directly or indirectly, by assets of the
Origination Trust or a UTI, a SUBI or any interest therein, and any financing
undertaken in connection with the issuance and assignment of a UTI or a SUBI and
one or more related certificates evidencing such UTI or SUBI, as the case may
be; (ii) any sale by a beneficiary (or a special purpose affiliate thereof) of
the Origination Trust of an interest in a UTI or a SUBI; or (iii) any other
asset securitization, secured loan or similar transaction involving assets of
the Origination Trust or any beneficial interest therein or in the Origination
Trust.
"SECURITIZATION TRUST" shall have the meaning set forth in
Section 2.02(b).
"SUBI" shall have the meaning set forth in Section 2.02(a).
"UTI" shall have the meaning set forth in Section 2.02(a).
5
<PAGE> 10
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used herein
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to words such as "herein", "hereof" and the like shall refer to
this Agreement as a whole and not to any particular part, article or section
within this Agreement, (iii) references to a section such as "Section 1.01" and
the like shall refer to the applicable section of this Agreement, (iv) the term
"include" and all variations thereof shall mean "include without limitation" and
(v) the term "or" shall include "and/or".
(b) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles in effect from time to time.
To the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of
such terms under such generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.
ARTICLE TWO
NAME, PURPOSE AND PARTNERS
SECTION 2.01. NAME. The name of the limited partnership formed pursuant
to the Original Partnership Agreement and governed by this Agreement and
continued hereby is Ryder Truck Rental I LP (the "Partnership").
SECTION 2.02. PURPOSE. The Partnership is formed for the object and
purpose of, and the nature of the business to be conducted and promoted by the
Partnership is limited to, the following activities only:
(a) to act as settlor or grantor of the Origination Trust
formed pursuant to the Origination Trust Agreement, which Origination
Trust shall be formed (i) to take assignments of, and serve as record
holder of title to, various vehicle lease contracts, leased vehicles
and other related rights and assets as may be conveyed directly or
indirectly to the Origination Trust, and (ii) to issue or cause to be
issuedcertificates representing beneficial interests in the Origination
Trust ("Origination Trust Interests"), including undivided trust
interests ("UTIs") and special units of beneficial interest ("SUBIs");
(b) to act as settlor or grantor of one or more additional
trusts or special purpose entities (each, a "Securitization Trust")
formed pursuant to a trust agreement or other agreement for the purpose
of acquiring Origination Trust Interests, which
6
<PAGE> 11
Securitization Trust may issue securities (the "Securities") secured by
or representing beneficial interests in the assets of such
Securitization Trust;
(c) to acquire, own, hold, sell, transfer, convey, dispose of,
pledge, assign, borrow money against, finance, refinance or otherwise
deal with, publicly or privately and whether with unrelated third
parties or with affiliated entities, Origination Trust Interests and
Securities;
(d) to loan or otherwise invest funds received as a result of
the Partnership's interest in any Origination Trust Interests or
Securities and any other income, as determined by the General Partner
from time to time;
(e) to borrow money other than pursuant to clause (c) above,
but only to the extent that such borrowing is permitted by the terms of
the transactions contemplated by clauses (b) and (c) above; and
(f) to (i) execute, deliver and perform its obligations under
all agreements to which it is a party or by which it is bound and (ii)
engage in any lawful act or activity and to exercise any powers
permitted to limited partnerships organized under the Act that are
incidental to and necessary or convenient for the accomplishment of the
foregoing purposes, including, without limitation, any of the powers
that may be exercised by the General Partner on behalf of the
Partnership.
SECTION 2.03. REGISTERED OFFICE. The registered office of the
Partnership in the State of Delaware is c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
SECTION 2.04. REGISTERED AGENT. The name and address of the registered
agent of the Partnership for service of process on the Partnership in the State
of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801.
SECTION 2.05. CERTIFICATE OF LIMITED PARTNERSHIP AND OTHER FILINGS. The
General Partner has filed a certificate of limited partnership of the
Partnership dated June 24, 1997 (the "Partnership Certificate") in the office of
the Delaware Secretary of State and shall file or cause the Partnership
Certificate to be filed in such other offices as may be required by law from
time to time. From time to time as required by law, the General Partner shall
execute and acknowledge, and shall cause to be filed and recorded, appropriate
amendments to the Partnership Certificate and any other filings required of or
appropriate with respect to the Partnership. In particular, but without
limitation, in the event that the General Partner deems it necessary for the
Partnership to exist in or qualify to do business under the laws of one or more
jurisdictions in addition to the State of Delaware, the General Partner shall
take such actions as may be necessary to register the Partnership or to qualify
it to do business in each such jurisdiction; provided that in any such event the
Partnership shall at all times continue to be a limited partnership formed under
and governed by the provisions of the Act and this Agreement.
7
<PAGE> 12
SECTION 2.06. PARTNERS' ADDRESSES. The names and mailing addresses of
the General Partner and the Limited Partner are in the case of (i) the General
Partner, Ryder Truck Rental I LLC, c/o Ryder Truck Rental, Inc., 3600 N.W. 82nd
Avenue, Miami, Florida 33166, Attention: Treasurer-2C, with a copy to the
General Counsel-5C, or; (ii) the Limited Partner, Ryder Truck Rental, Inc., 3600
N.W. 82nd Avenue, Miami, Florida 33166, Attention: Treasurer-2C, with a copy to
the General Counsel-5C; at such other address as shall be designated by any of
the foregoing in a written notice to the other parties hereto.
SECTION 2.07. AUTHORIZATION TO ENTER INTO CERTAIN AGREEMENTS. Each of
the Partnership and the General Partner, on behalf of the Partnership, may, and
is hereby authorized to, enter into and perform any and all obligations of the
Partnership under each of the documents relating to the Origination Trust or any
Securitization Trust, and any other documents or agreements contemplated thereby
or specifically described therein, and any and all documents and agreements
deemed necessary or desirable by the General Partner, including, without
limitation, any such documents and agreements with respect to financings secured
by or representing a sale of Origination Trust Interests (including any UTI or
SUBI), all without any further act, vote or approval of any Partner,
notwithstanding any other provision of this Agreement, the Act or other
applicable law, rule or regulation. Such authorization shall not be deemed a
restriction on the powers of the General Partner to enter into other agreements
on behalf of the Partnership that are consistent with the purposes of Section
2.02.
SECTION 2.08. EFFECTIVE DATE. The Original Partnership Agreement is
hereby amended and restated in its entirety by this Agreement as of the
Effective Date.
ARTICLE THREE
CAPITAL ACCOUNTS; LIMITATION OF LIMITED PARTNERS' LIABILITY
SECTION 3.01. INITIAL CAPITAL CONTRIBUTIONS. Each of the General
Partner and the Limited Partner has contributed cash and/or marketable
securities as its initial Capital Contribution.
SECTION 3.02. ADDITIONAL CAPITAL CONTRIBUTIONS.
(a) Except as provided in Section 10.02 with respect to any General
Partner, no Partner shall be required to make additional Capital Contributions
to the Partnership.
(b) Notwithstanding any provision herein to the contrary, in the event
any additional Capital Contributions are made by one or both Partners, the
Partnership Interest of each Partner for purposes of all subsequent Cash Flow
distributions shall be recalculated to reflect any such additional Capital
Contributions until such additional Capital Contributions have been recovered by
the contributors thereof through distributions pursuant to this Agreement.
(c) Each Partner's Capital Account shall be increased by an amount
equal to the additional Capital Contributions by such Partner pursuant to
Section 3.02(b) and shall be reduced by all distributions to that Partner
pursuant to this Agreement.
8
<PAGE> 13
SECTION 3.03. WITHDRAWAL OF CAPITAL. Except as otherwise provided in
this Agreement, no Partner shall be entitled to demand or receive a return of
any portion of its Capital Contributions from the Partnership without the
consent of the General Partner.
SECTION 3.04. PARTNERSHIP INTERESTS AND CAPITAL ACCOUNTS. For all
purposes of this Agreement, the "Capital Account" of a Partner as of any date
shall mean the value of the Capital Contribution of such Partner as set forth on
Exhibit A, as the same may be amended from time to time, properly adjusted to
reflect the allocations and distributions provided for in Article Seven and any
additional Capital Contributions of such Partner.
SECTION 3.05. LIMITATION OF LIMITED PARTNERS' LIABILITY.
(a) No Limited Partner shall have any personal liability whatsoever,
whether to the Partnership, to any of the Partners or to any creditor of the
Partnership, for the debts of the Partnership or any of its losses beyond the
amount contributed by such Limited Partner to the capital of the Partnership;
provided, however, that a Limited Partner shall be obligated to return
distributions wrongfully distributed to it as required by the Act or other
applicable law.
(b) No Limited Partner, in its capacity as a limited partner of the
Partnership, shall control the Partnership's business or be deemed to be
participating in the control of the business of the Partnership within the
meaning of the Act by doing one or more of the following:
(i) being a contractor for or an agent or employee of the
Partnership or the General Partner or being an officer, director or
shareholder of the General Partner;
(ii) consulting with and advising the General Partner with
respect to the business of the Partnership;
(iii) acting as surety for the Partnership or guaranteeing
or assuming one or more obligations of the Partnership, acting as an
endorser of the Partnership's obligations or providing collateral for
any borrowings of the Partnership;
(iv) taking any action required or permitted by law to
bring or pursue a derivative action in the right of the Partnership;
(v) requesting or attending a meeting of Partners;
(vi) proposing, approving or disapproving, by voting or
otherwise, one or more of the following matters:
(A) the dissolution and winding up of the Partnership
or continuation of the business of the Partnership upon the
occurrence of any event that would otherwise require the
winding up and termination of its affairs;
(B) the sale, exchange, lease, mortgage, pledge or
other transfer of all or substantially all of the assets of
the Partnership;
9
<PAGE> 14
(C) the incurrence of indebtedness by the Partnership
other than in the ordinary course of its business;
(D) a change in the nature of the Partnership
business;
(E) the admission or removal of a General Partner;
(F) the admission or removal of a Limited Partner;
(G) a transaction involving an actual or potential
conflict of interest between the Partnership and a General
Partner or a Limited Partner;
(H) an amendment to this Agreement or the Partnership
Certificate;
(I) matters related to the business of the
Partnership not otherwise enumerated in this subsection, but
which this Agreement, or any other agreement, states in
writing may be subject to the approval or disapproval of
Limited Partners; or
(J) any other matter required by law or regulation,
or deemed advisable by the General Partner, to be submitted to
a vote of Limited Partners;
(vii) winding up the Partnership; or
(viii) taking any of the actions described in Section
17-303(b) of the Act or in this Agreement, or exercising any right or
power permitted a limited partner under the Act, which action or
exercise is not specifically enumerated in this Section.
ARTICLE FOUR
ADMISSION OF ADDITIONAL PARTNERS
SECTION 4.01. AUTHORITY OF GENERAL PARTNER TO ADMIT ADDITIONAL
PARTNERS. The Partners agree that the General Partner may admit Additional
Limited Partners to the Partnership, subject to and in accordance with the
provisions of Section 4.02, Section 5.03 and Article Nine. Additional General
Partners may be admitted to the Partnership, subject to and in accordance with
the provisions of Section 4.02, Section 5.03 and Article Nine, but only if and
to the extent that the General Partner would be permitted to transfer its
Partnership Interest under Section 4.02, Section 5.03 and Article Nine.
SECTION 4.02. PARTNERSHIP INTERESTS ON ADMISSION OF ADDITIONAL
PARTNERS. The Partnership Interest of each Additional General Partner or
Additional Limited Partner shall be the percentage that the cash amount or
initial Gross Asset Value of capital contributed to the Partnership by such
Additional General Partner or Additional Limited Partner bears to the total
capital of the Partnership immediately following such contribution. Upon
admission of such Additional General Partner or Additional Limited Partner to
the Partnership, the Partnership
10
<PAGE> 15
Interests of the existing Partners shall be reduced pro rata by the amount of
such Additional Limited Partner's Partnership Interest; provided, however, that
no Additional General Partner or Additional Limited Partner may be admitted if
such addition would reduce the Partnership Interest of (i) Ryder, in its
capacity as Limited Partner, below 20% or (ii) Ryder Truck Rental I LLC, in its
capacity as a General Partner, below 1%.
ARTICLE FIVE
MANAGEMENT OF THE PARTNERSHIP
SECTION 5.01. AUTHORITY OF GENERAL PARTNER.
(a) The General Partner shall have sole and exclusive authority to
manage the operations and affairs of the Partnership and to make all decisions
regarding the business of the Partnership. No Limited Partner shall participate
in the management or control of the Partnership's business, nor shall it have
the power to act for or bind the Partnership, such powers being vested solely
and exclusively in the General Partner, except as otherwise specifically
provided herein. It is understood and agreed that the General Partner shall have
all of the rights and powers of a general partner provided under the Act and by
this Agreement, and as otherwise provided by law, and any action taken by the
General Partner shall constitute the act of and serve to bind the Partnership.
Persons dealing with the Partnership are entitled to rely conclusively on the
power and authority of the General Partner as set forth in this Agreement.
(b) Notwithstanding the foregoing, without the affirmative vote of 100%
of the constituent members of the General Partner, the General Partner will not
take, or acquiesce in, and only the General Partner (and not any Limited
Partner) shall have any right to take, any action to cause the Partnership to
(i) merge or consolidate with or into any Person, (ii) act other than in the
Partnership's own name and through the General Partner, (iii) dissolve or
liquidate, in whole or in part, or institute proceedings to be adjudicated
bankrupt or insolvent, (iv) consent to the institution of bankruptcy or
insolvency proceedings against it, (v) file a petition seeking, or consent to,
reorganization or relief under any applicable federal or state law relating to
bankruptcy, (vi) consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Partnership or a
substantial part of its property, (vii) make a general assignment for the
benefit of its creditors, (viii) admit in writing its inability to pay its debts
generally as they become due, (ix) institute or join in any institution of any
bankruptcy, insolvency, liquidation, arrangement or reorganization proceeding,
or other similar proceedings under federal or state law, against any entity in
which the Partnership holds an ownership interest, or (x) take any corporate
action or partnership action in furtherance of the actions enumerated in clauses
(i) through (ix) above; provided, however, that the General Partner shall in no
event consent to the institution of bankruptcy or insolvency proceedings against
the Partnership so long as the Partnership is solvent. In the event of the
insolvency of the Partnership and with regard to any action contemplated by the
preceding sentence, the General Partner will not owe a fiduciary duty to any
Limited Partner (except as may be specifically required by applicable law), but
the General Partner's fiduciary duty with regard to such action
11
<PAGE> 16
shall be owed, to the fullest extent permitted by applicable law, instead to the
creditors of the Partnership.
(c) The General Partner shall not, and shall not allow the Partnership
otherwise to, (i) commingle any funds or other assets of the Partnership with
the funds or assets of any other Person or (ii) enter into transactions with any
Person except as specifically authorized or contemplated by this Agreement, the
Origination Trust Agreement and the agreements related to a Securitization. The
Partnership shall conduct business in its own name and hold itself out as a
separate entity, and observe all organizational formalities. The bank accounts,
financial and accounting books, financial statements and records of the
Partnership shall be maintained separate from those of every other Person. All
obligations and indebtedness of any kind incurred by the Partnership shall be
paid from the assets of the Partnership and the Partnership's assets shall not
be used to pay any obligation or indebtedness of any other Person, other than
expenses, obligations or indebtedness of the Origination Trust, any
Securitization Trust and any trustee of any of the foregoing with respect to
transactions of or with respect to such Origination Trust or Securitization
Trust.
(d) The General Partner is hereby authorized to delegate to one or more
other Persons any of its rights and powers to manage and control the business
and affairs of the Partnership, including to delegate to agents and employees of
the General Partner or the Partnership, and to delegate by a management
agreement or another agreement with, or otherwise to, other Persons. Such
delegation by the General Partner shall not cause the General Partner to cease
to be a general partner of the Partnership.
SECTION 5.02. SPECIFIC POWERS OF GENERAL PARTNER. Subject to Section
5.03, the General Partner is hereby granted the right, power and authority to do
on behalf of the Partnership all things which, in its sole judgment, are
necessary, proper, desirable, convenient or incidental to carry out the duties
and responsibilities of the Partnership under this Agreement.
SECTION 5.03. POWERS REQUIRING CONCURRENCE OF LIMITED PARTNERS. Without
the written consent of, or ratification by a specific act of, Partners holding
in the aggregate at least 66-2/3% of the Partnership Interests, the General
Partner shall have no authority to, and affirmatively represents and undertakes
that it will not, admit a Person as a Partner under this Agreement, which in any
event shall always be done in accordance with Article Nine.
SECTION 5.04. DUTIES OF GENERAL PARTNER. The General Partner shall
devote such time to the business of the Partnership as it shall deem necessary
to manage and supervise the business and affairs of the Partnership in an
efficient manner. Subject to the foregoing, the General Partner shall manage the
administration of the Partnership, which administration shall include, but not
be limited to, (a) maintaining customary books and records; (b) preparing or
causing the preparation of the financial statements provided for in this
Agreement; (c) preparing and filing or causing the preparation and filing of
Partnership tax returns; (d) preparing communications from the Partnership to
Limited Partners; (e) filing documents required to be filed by the Partnership;
(f) causing the Partnership to make or revoke the appropriate tax elections
under the Code; (g) functioning as tax matters partner for federal, state and
local tax purposes; and (h) acting on
12
<PAGE> 17
behalf of the Partnership with respect to (i) the Origination Trust, (ii) any
lenders and (iii) any other Person dealing with the Partnership or any
Partnership Property.
SECTION 5.05. COMPENSATION OF GENERAL PARTNER AND EXPENSES. The General
Partner shall receive no compensation for services to the Partnership as General
Partner; provided, however, that the General Partner shall be entitled to charge
to the Partnership any filing fees incurred in complying with any requirement
imposed on the Partnership by law, reasonable accountants' and attorneys' fees
and all other reasonable expenses arising out of the administration of the
Partnership including, but not limited to, those incurred in any administrative
or judicial proceeding in which the Partnership may become involved, all of
which shall be proper expenses of the Partnership.
SECTION 5.06. SCOPE OF RESPONSIBILITY. None of the General Partner, any
director, officer, shareholder, agent or employee of the General Partner or any
Affiliate of the General Partner shall be liable, responsible or accountable for
damages or otherwise to the Partnership or any Limited Partner for any action
taken or omitted on behalf of the Partnership within the scope of the authority
conferred upon such Person by this Agreement or by law, unless such action was
taken or omitted fraudulently or in bad faith or constituted willful misconduct
or gross negligence.
SECTION 5.07. CONTRACTS WITH AFFILIATES. The Partnership may enter into
one or more agreements with the General Partner or any Affiliate of the General
Partner to render services to the Partnership. Any service rendered to the
Partnership by the General Partner or any Affiliate thereof shall be on terms
that are fair and reasonable to the Partnership and are, in the aggregate, no
less favorable than those that could be obtained from unaffiliated third parties
for comparable quality.
SECTION 5.08. INDEMNIFICATION. The Partnership shall, to the fullest
extent permitted by law, indemnify and hold harmless the General Partner, its
Affiliates and their respective directors, officers, shareholders, agents and
employees acting within the scope of their authority (the "Indemnified Parties")
from and against any loss, expense, damage, liability or injury suffered or
sustained by them by reason of any acts, omissions or alleged acts or omissions
arising out of any of such Person's activities on behalf of the Partnership or
in furtherance of the interests of the Partnership, including 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 and any payments made by one or more Indemnified Parties,
unless the acts, omissions or alleged acts or omissions upon which such actual
or threatened action, proceeding or claim is based were made or omitted
fraudulently or in bad faith or constituted willful misconduct or gross
negligence by one or more of such Indemnified Parties. Any such indemnification
shall only be made from the assets of the Partnership. Reasonable expenses
incurred by any Indemnified Party in connection with such an action, proceeding
or claim shall be paid or reimbursed by the Partnership in advance of the final
disposition of the action, proceeding or claim, upon receipt by the Partnership
of an undertaking by or on behalf of the Indemnified Party to repay such amount
if it shall be determined that the Indemnified Party is not entitled to be
indemnified as authorized in this Section.
13
<PAGE> 18
SECTION 5.09. LIMITED PARTNERS' RIGHTS. Except as otherwise set forth
in this Agreement, all Limited Partners shall have all rights and authority
accorded to them under the Act.
SECTION 5.10. PARTNERSHIP PROPERTY. All Partnership Property shall be
owned by the Partnership as an entity, and no Partner shall have any ownership
interest in any Partnership Property in its individual name or right. The
Partnership shall hold all of the Partnership Property in the name of the
Partnership and not in the name of any Partner. Each Partner's interest in the
Partnership shall be personal property for all purposes.
SECTION 5.11. DUTIES OF THE GENERAL PARTNER AND CERTAIN OTHER PERSONS.
To the extent that an Indemnified Party shall have fiduciary duties and
liabilities, arising at law or in equity, relating to the Partnership or the
Partners, such Indemnified Party shall not be liable to the Partnership or to
any Partner for any action taken or omitted in good faith reliance on the
provisions of this Agreement. The Partners hereby agree that the provisions of
this Agreement, to the extent that they restrict the fiduciary duties and
related liabilities of an Indemnified Party otherwise existing at law or in
equity, replace such other duties and liabilities of such Indemnified Party.
ARTICLE SIX
STATEMENTS AND FISCAL YEAR
SECTION 6.01. STATEMENTS. The General Partner shall send or cause to be
sent to each Limited Partner such statements as may be necessary for the
preparation of such Limited Partner's income tax returns.
SECTION 6.02. FISCAL YEAR. The fiscal year of the Partnership shall be
the fiscal year of the Limited Partner which as of the Effective Date ends on
December 31 of each year.
ARTICLE SEVEN
FINANCIAL ALLOCATIONS AND DISTRIBUTIONS
SECTION 7.01. TAX ELECTIONS. The General Partner shall elect to treat
the Partnership as a single member entity treated as an agent of the Limited
Partner and not as a separate corporation or partnership for federal and
applicable state tax purposes. The General Partners may also elect to make an
election for state tax purposes comparable to the federal tax election under
Section 761(a) of the Code for an exemption from the provisions of Subchapter K
of the Code for the Partnership.
SECTION 7.02. MAINTENANCE OF PARTNERS' CAPITAL ACCOUNTS. A separate
Capital Account shall be established and maintained for each Partner throughout
the full term of the Partnership as follows:
14
<PAGE> 19
(a) to each Partner's Capital Account there shall be credited
such Partner's initial Capital Contribution, as set forth and agreed to
on Exhibit A hereto, such additional Capital Contributions as such
Partner may make from time to time pursuant to Section 3.02(b), such
Partners' distributive share of Net Income, and any items in the nature
of income or gain that are specially allocated to such Partner pursuant
to Section 7.03 or 7.04 and the amount of any Partnership liabilities
that are assumed by such Partner or secured by any Partnership Property
distributed to such Partner;
(b) from each Partner's Capital Account there shall be
subtracted the amount of cash and the Gross Asset Value of any
Partnership Property distributed to such Partner pursuant to any
provision of this Agreement, such Partner's distributive share of Net
Losses, any items in the nature of deductions or losses that are
specially allocated to such Partner pursuant to Section 7.03 or 7.04
and the amount of any liabilities of such Partner assumed by the
Partnership or secured by any property contributed by such Partner to
the Partnership;
(c) in the event any interest in the Partnership is
transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account, if any, of the
transferor to the extent relevant to the transferred interest; and
(d) in determining the amount of any liability for purposes of
clauses (a) and (b) of this Section, Code Section 752 and any other
applicable provisions of the Code and Regulations shall be taken into
account.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such general intent. In the event the General Partner shall
determine that it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto (including, without limitation, debits or
credits relating to liabilities that are secured by contributed or distributed
property or that are assumed by the Partnership or the Partners), are computed
in order to comply with such Regulations, the General Partner may make such
modification, provided that such modification is not likely to have a material
effect on the amounts distributable to any Partner pursuant to Section 10.02
upon the dissolution of the Partnership. The General Partner shall make all (i)
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes in accordance
with the Regulations, and (ii) appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to comply with
Regulations Section 1.704-1(b).
SECTION 7.03. NET INCOME AND NET LOSS; CASH FLOW.
(a) NET INCOME AND NET LOSS. Except as provided in Sections 7.04, 7.05
and 7.06, the determination of each Partner's distributive share of any
Partnership Net Income and Net Loss with respect to any Partnership fiscal year
shall be made in accordance with and in proportion to
15
<PAGE> 20
such Partner's Partnership Interest during the particular year, after taking
into account any variations in the Partner's Partnership Interest during that
year.
(b) CASH FLOW. The distributive share of Cash Flow of any Partner for
any Partnership fiscal year shall be determined in accordance with and in
proportion to such Partner's Partnership Interest during such year.
SECTION 7.04. SPECIAL TAX ALLOCATIONS.
(a) GENERALLY. Special tax allocations shall be made to the extent
necessary to satisfy the requirements set forth in Sections 1.704-1(b)(2)(ii)(d)
and 1.704-2 of the Regulations for a qualified income offset and partner minimum
gain chargeback (the "Regulatory Allocations").
(b) SECTION 754 ADJUSTMENT. To the extent that an adjustment to the
adjusted tax basis of any Partnership asset is required under Code Section
734(b) or 743(b) in connection with a distribution to a Partner in complete
liquidation of such Partner's interest in the Partnership and the resultant
redetermination pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or
1.704-1(b)(2)(iv)(m)(4) of the Capital Accounts, the amount of such adjustment
to the Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis), and such gain or loss shall be allocated pro rata to the remaining
Partners in accordance with their respective Partnership Interests in the event
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partner to which
such distribution was made in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.
SECTION 7.05. CURATIVE ALLOCATIONS. It is the intent of the Partners
that, to the extent possible, all Regulatory Allocations shall be offset either
by other Regulatory Allocations or by special allocations of other items of
Partnership income, gain, loss or deduction pursuant to this Section. Therefore,
notwithstanding any other provision of this Article, the General Partner shall
make special offsetting allocations of Partnership income, gain, loss or
deduction in whatever manner it determines appropriate so that, after such
offsetting allocations are made, each Partner's Capital Account balance is, to
the extent possible, equal to the Capital Account balance such Partner would
have had if the Regulatory Allocations had not been made and all Partnership
items were allocated pursuant to Section 7.03. In exercising discretion under
this Section, the General Partner shall take into account certain future
Regulatory Allocations that, although not yet made, are likely to offset other
Regulatory Allocations previously made under Section 7.04(a).
SECTION 7.06. OTHER ALLOCATION RULES. For purposes of determining items
of Partnership income, gain, loss or deduction or any other items allocable to
any fiscal year or other period, including upon the transfer of a Partner's
interest in the Partnership, such items shall be determined on a daily, monthly
or other basis, as determined by the General Partner, using any method
permissible under Code Section 706 and the Regulations thereunder. To the extent
permitted by the Regulations, the General Partner shall endeavor not to treat
distributions of Cash Flow as having been made from the proceeds of a
nonrecourse liability within the meaning of Section 1.752-2 of the Regulations.
16
<PAGE> 21
SECTION 7.07. ALLOCATION OF BUILT-IN GAINS.
(a) In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss and deduction with respect to any Partnership
Property contributed by the Partners to the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any Built-in
Gains or variation between the adjusted basis of such property to the
Partnership for federal income tax purposes and its initial Gross Asset Value.
(b) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to clause (ii) of the definition of the term Gross Asset
Value, subsequent allocations of income, gain, loss and deduction with respect
to such asset shall, solely for tax purposes, take into account any Built-in
Gains or variation between the adjusted basis of such asset for federal income
tax purposes and its Gross Asset Value in the manner set forth under Code
Section 704(c) and relevant Sections of the Regulations.
(c) Any elections or other decisions relating to such allocations shall
be made by the General Partner in any manner that reasonably reflects the
purpose and intention of this Agreement. Allocations of Built-in Gain pursuant
to this Section are solely for purposes of federal, state and local taxes and
shall not affect, or in any way be taken into account in computing, Net Income,
Net Losses, credits or debits to any Partner's Capital Account or the allocation
of items of income, gain, loss or deduction or distributions pursuant to this
Agreement.
SECTION 7.08. DISTRIBUTION OF CASH FLOW AND OTHER AMOUNTS. As
determined by the General Partner employing its reasonable business judgment, to
the extent Partnership Cash Flow is available for distribution at the close of
any fiscal one-month period, such distribution shall be made as soon as
reasonably possible following such period, in the manner provided in Section
7.03, as if such fiscal one-month period were a fiscal year. No such
distribution will be made if it would create a negative Capital Account balance
for a Limited Partner. The General Partner may also refuse to make a
distribution at the end of any fiscal one-month period if such distribution
would impair Reserves set up by the General Partner pursuant to Section 10.04.
SECTION 7.09. RESTRICTED DISTRIBUTIONS. The Partnership, and the
General Partner on behalf of the Partnership, shall not make a distribution to
any Partner if such distribution would violate Section 17-607 of the Act or
other applicable law. Notwithstanding Section 17-606 of the Act, no Limited
Partner shall, by virtue of becoming entitled to receive a distribution, have
the status of, or be entitled to the remedies available to, a creditor of the
Partnership with respect to such distribution.
ARTICLE EIGHT
NO WITHDRAWAL OF PARTNER; DEATH, LEGAL INCAPACITY,
DISSOLUTION OR BANKRUPTCY OF LIMITED PARTNER
SECTION 8.01. NO WITHDRAWAL. Except as provided in Article Nine, no
Partner shall have the right to withdraw from the Partnership.
17
<PAGE> 22
SECTION 8.02. DEATH, LEGAL INCAPACITY, DISSOLUTION AND BANKRUPTCY. The
death, legal incapacity, dissolution or bankruptcy of a Limited Partner shall
not, in and of itself, cause the dissolution of the Partnership, but the rights
of such Limited Partner to share in the profits and losses of the Partnership,
to receive distributions of Partnership funds and to assign its interest in the
Partnership pursuant to Article Nine shall, on the occurrence of any such event,
devolve upon its personal or legal representative or upon the Person or Persons
entitled to receive its property under the laws of its domicile, subject to the
terms and conditions of this Agreement, and the Partnership shall continue as a
limited partnership; in no event, however, shall such personal or legal
representative or Person or Persons entitled to receive the interest of such
Limited Partner become a substitute Limited Partner, except in accordance with
Article Nine.
ARTICLE NINE
NO TRANSFER OF PARTNERSHIP INTERESTS
SECTION 9.01. NO TRANSFER OF PARTNERSHIP INTERESTS. Neither the General
Partner nor the Limited Partner shall sell, transfer, assign, convey or
otherwise dispose of, or encumber or hypothecate, all or any part of its
Partnership Interest to any Person. Any such purported transfer or pledge shall
be deemed null and void and shall not be recognized by the Partnership or the
other Partners.
SECTION 9.02. DEALING WITH GENERAL PARTNER. In addition to any other
provision contained in this Article Nine, the Partnership, each Partner and any
other Person having business with the Partnership need deal only with General
Partners named in the Partnership Certificate and shall not be required to deal
with any other Person by reason of the death, legal incapacity, dissolution or
bankruptcy of a Partner, except as otherwise provided in this Agreement or
required by law.
SECTION 9.03. COMPLIANCE WITH FEDERAL AND STATE LAW. Each Partner
represents and warrants that it is purchasing its Partnership Interest as an
investment and not for distribution within the meaning of any applicable United
States federal and state securities laws and regulations. Any Partner who
commits any act or fails to take any act that results in a breach of such
representation and warranty shall, and hereby agrees to, indemnify and hold
harmless all other Partners and the Partnership from any claims, demand, suits,
losses, judgments, liabilities and damages, including reasonable attorneys' fees
and disbursements, arising out of or in any way connected with such act or
omission.
ARTICLE TEN
TERM AND DISSOLUTION
SECTION 10.01. TERM AND DISSOLUTION OF PARTNERSHIP. The Partnership
shall be dissolved and its affairs wound up upon the earliest to occur of:
18
<PAGE> 23
(a) June 1, 2097;
(b) the withdrawal or Bankruptcy of the General Partner, the
termination of the General Partner or the occurrence of any other event
that results in the General Partner ceasing to be a general partner of
the Partnership under the Act, unless within 90 days after the
occurrence of such event, a majority in interest of the remaining
Partners (or such greater percentage in interest as is required by the
Act) agrees in writing to continue the business of the Partnership and
to the appointment, effective as of the date of such event, of one or
more additional general partners of the Partnership; or
(c) the entry of a decree of judicial dissolution pursuant to
Section 17-802 of the Act.
SECTION 10.02. DISTRIBUTION AFTER DISSOLUTION. Upon dissolution, the
Partnership shall continue solely for the purpose of winding up its affairs in
an orderly manner, liquidating its assets and satisfying the claims of creditors
and Partners. In so doing, a full accounting of the assets and liabilities of
the Partnership shall be taken and the Partnership assets shall be distributed
as promptly as possible as hereinafter provided:
(a) to the payment (or the making of reasonable provision for
the payment) of such debts and liabilities of the Partnership (or
Reserves therefor), including any necessary expenses of liquidation,
except any debts, liabilities and loans that may be due to the
Partners, in the order of priority provided by law;
(b) to the payment (or the making of reasonable provision for
the payment) of any debts and liabilities that may be due to the
Partners and to the payment (or the making of reasonable provision for
the payment) of the unpaid principal balance of and the interest
accrued on loans, if any, made by the Partners to the Partnership; and
(c) each Partner's Capital Account shall be adjusted as
provided in Section 7.02 as if the Partnership Property had been sold
for its fair market value and the resulting gain or loss had been
allocated to the respective Partners, and the assets of the Partnership
shall be distributed thereafter to the Partners in proportion to their
respective non-negative Capital Accounts.
All of the assets of the Partnership may be distributed in kind upon dissolution
of the Partnership. Any General Partner with a deficit balance in its Capital
Account (after giving effect to all contributions, distributions and allocations
for all fiscal years, including the fiscal year during which such liquidation
occurs) shall be required to repay such deficit promptly to the Partnership. If
any Limited Partner has a deficit balance in its Capital Account (after giving
effect to all contributions, distributions and allocations for all fiscal years,
including the fiscal year during which such liquidation occurs), such Limited
Partner shall have no obligation to make any contribution to the capital of the
Partnership with respect to such deficit, and such deficit shall not be
considered a debt owed to the Partnership or to any other Person for any purpose
whatsoever.
19
<PAGE> 24
SECTION 10.03. DISSOLUTION IF NO GENERAL PARTNER REMAINING. In the
event of the dissolution of the Partnership pursuant to Section 10.01(b) because
no General Partner remains, a liquidating trustee selected by a majority in
interest of the Limited Partners shall wind up the affairs of the Partnership.
Any such liquidating trustee shall have the full right and unlimited discretion
to determine the time, manner and terms of any sale or sales of Partnership
Property based on the activity and condition of the relevant market and general
financial and economic conditions. The Limited Partners shall continue to share
profits and losses during the period of liquidation in the same proportion as
before the dissolution.
SECTION 10.04. RESERVES. The General Partner or the liquidating
trustee, as the case may be, shall have the right to set up (either in
connection with the ongoing operations of the Partnership or in the course of
its liquidation) reasonable cash reserves for contingent, conditional or
unmatured liabilities or obligations of the Partnership, capital improvements or
for any other purpose necessary to accomplish the purposes of the Partnership
("Reserves"), and such Reserves shall be deducted from amounts available for
distribution pursuant to this Agreement.
SECTION 10.05. STATEMENT. Within a reasonable time following the
completion of the liquidation or distribution of the Partnership Property, the
General Partner or liquidating trustee shall supply to each of the Partners a
statement that shall set forth the assets and the liabilities of the Partnership
and each Partner's Capital Account as of the date of complete liquidation.
SECTION 10.06. DISTRIBUTION LIMITED TO PARTNERSHIP ASSETS. No Partner
shall have any right to demand a distribution in a form other than that decided
upon by the General Partner or the liquidating trustee, as the case may be, upon
dissolution and termination of the Partnership or to demand the return of its
Capital Contributions prior to dissolution and termination of the Partnership.
SECTION 10.07. TERMINATION. Upon completion of the distribution of all
Partnership assets and winding up of the Partnership's affairs, the Partnership
shall terminate and the General Partner or liquidating trustee shall have the
authority to execute and record a certificate of cancellation of the Partnership
Certificate or equivalent document as well as any and all other documents that
may be required by law to effect and evidence the dissolution and termination of
the Partnership.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. POWER OF ATTORNEY.
(a) Each Limited Partner, by its execution hereof, hereby irrevocably
constitutes and appoints the General Partner its true and lawful
attorney-in-fact, to make, execute, sign,
20
<PAGE> 25
acknowledge, record and file, in its name, place and stead and with full power
of substitution, on behalf of it and on behalf of the Partnership, the
following:
(i) one or more Partnership Certificates, certificates of
doing business under an assumed or fictitious name and any other
certificates or instruments that the Partnership or the Partners may be
required to file under the laws of the State of Delaware or any other
jurisdiction whose laws may be applicable;
(ii) one or more certificates of cancellation of the
Partnership Certificate or equivalent document and such other
instruments or documents as may be deemed necessary or desirable by the
General Partner upon the termination of the Partnership business;
(iii) any and all amendments or restatements of the
instruments described in clauses (i) and (ii) above, provided that such
amendments or restatements are either required by law or are consistent
with this Agreement or have been authorized by the affected Partners;
(iv) any and all amendments to or restatements of this
Agreement that have been duly adopted by the Partners pursuant to the
terms hereof; and
(v) any and all other instruments as may be deemed
necessary or desirable by the General Partner to carry out fully the
provisions of this Agreement in accordance with its terms.
(b) The grant of authority contained in Section 11.01(a) is a special
power of attorney coupled with an interest, is irrevocable and shall survive the
dissolution or bankruptcy of the Limited Partner granting the power of attorney,
may be exercised by the General Partner on behalf of each Limited Partner by a
facsimile signature or by the General Partner's executing any instrument with a
single signature as attorney-in-fact for all of the Limited Partners, and shall
survive the delivery of an assignment by a Limited Partner of the whole or any
portion of its Partnership Interest.
(c) Notwithstanding the provisions of Section 11.01(a), the General
Partner is not authorized to, and covenants and agrees that it will not, file
any Partnership Certificate or amendment to any Partnership Certificate that
requires an increased Capital Contribution by a Limited Partner unless such
Limited Partner has first authorized the filing of such Partnership Certificate
or amendment in writing.
SECTION 11.02. GOVERNING LAW AND ARBITRATION. It is the intent of the
Partners that this Agreement be governed by, and that all questions with respect
to the construction of this Agreement and the rights and liabilities of the
Partners shall be determined in accordance with the internal laws of the State
of Delaware without regard to any otherwise applicable principles of conflicts
of laws. To the fullest extent permitted by law, any controversy or claim
arising out of or relating to this Agreement or the breach thereof shall be
settled by arbitration in accordance with the Rules of the American Arbitration
Association to the extent permitted by the Delaware
21
<PAGE> 26
Uniform Arbitration Act, 10 Del. C. ss. 5701, et seq., and judgment upon the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof.
SECTION 11.03. SUCCESSORS AND ASSIGNS. Except as herein or by law
otherwise provided and subject to Article Nine, this Agreement shall be binding
on and inure to the benefit of each of the Partners, their legal
representatives, heirs, administrators, executors, successors, and assigns.
SECTION 11.04. COUNTERPARTS; INTEGRATION. This Agreement may be
executed in several counterparts and all counterparts so executed shall
constitute one Agreement binding on all Partners, notwithstanding that all the
Partners are not signatory to the same counterpart. This Agreement, including
all exhibits hereto, constitutes the entire agreement among the Partners
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings of the Partners in connection
therewith. No covenant, representation or condition not expressed in this
Agreement shall be binding upon the Partners hereto or shall affect or be
effective to interpret, change or restrict the provisions of this Agreement.
SECTION 11.05. NO PARTITION. The Partners agree that the Partnership
Property is not and will not be suitable for partition. Accordingly, each of the
Partners hereby irrevocably waives any and all rights that it may have to
maintain any action for partition of any of the Partnership Property.
SECTION 11.06. CAPTIONS. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provision hereof.
SECTION 11.07. SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any Security or
the rights of the holders thereof.
SECTION 11.08. NOTICES. All notices under this Agreement shall be in
writing and shall be given to each Partner to whom addressed at the addresses
set forth in Section 2.06 or at such other address as any of the Partners may
hereafter specify in writing, and to the Partnership at such address as the
General Partner shall specify to the Partners. Notice shall be deemed effective
hereunder only when actually received by the party to whom notice is given.
SECTION 11.09. AMENDMENT, WAIVER. No change, termination or waiver of
any of the provisions hereof shall be binding unless agreed to in writing by
Partners holding in the aggregate at least 66-2/3% of the Partnership Interests,
and such additional approvals, if any, have been obtained as are required under
each Securitization; provided, however, that 100% of the constituent members of
the General Partner and 100% of the directors of any Independent Member (as such
term is defined in the limited liability company agreement of the General
Partner) must consent to any amendment to any of the provisions hereof.
22
<PAGE> 27
SECTION 11.10. FURTHER ASSURANCES. Each party will do such acts, and
execute and deliver to any other party such additional documents or instruments,
as may be reasonably requested in order to effect the purposes of this Agreement
and to better assure and confirm unto the requesting party its rights, powers
and remedies hereunder.
23
<PAGE> 28
IN WITNESS WHEREOF, the initial Partners have executed this Agreement
as of the date first set forth above.
RYDER TRUCK RENTAL I LLC,
as General Partner
By: RTR LEASING I, INC.,
as Managing Member
By:
--------------------------------------
W. Daniel Susik
Treasurer
RYDER TRUCK RENTAL, INC.,
as Limited Partner
By:
--------------------------------------
W. Daniel Susik
Treasurer
24
<PAGE> 29
EXHIBIT A
GROSS ASSET VALUE OF INITIAL CAPITAL CONTRIBUTIONS
General Partner: $ 10
Limited Partner: $990
A-1
<PAGE> 30
EXHIBIT B
INITIAL PARTNERSHIP INTERESTS
General Partner: 1%
Limited Partner: 99%
B-1
<PAGE> 1
Exhibit 4.1
===============================================================================
RYDER VEHICLE LEASE TRUST 1999-A
_____ % Asset Backed Notes, Class A-1
_____ % Asset Backed Notes, Class A-2
_____ % Asset Backed Notes, Class A-3
_____ % Asset Backed Notes, Class A-4
_____ % Asset Backed Notes, Class A-5
U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee,
and
RYDER VEHICLE LEASE TRUST 1999-A,
As Issuer
INDENTURE
Dated as of October 1, 1999
===============================================================================
<PAGE> 2
TRUST INDENTURE ACT CROSS-REFERENCE CHART
(this chart is not a part of this Indenture)
TIA Section Indenture Reference
- ----------- -------------------
310(a)(1)...............................................6.08, 6.11
310(a)(2)...............................................6.11
310(a)(3)...............................................6.10(b)
310(a)(4)...............................................Not Applicable
310(a)(5)...............................................6.11
310(b)..................................................6.11
310(c)..................................................Not Applicable
311(a)..................................................6.15
311(b)..................................................6.15
311(c)..................................................Not Applicable
312(a)..................................................7.01, 7.02(a)
312(b)..................................................7.02(b)
312(c)..................................................7.02(c)
313(a)..................................................7.03
313(b)..................................................7.03
313(c)..................................................7.03
313(d)..................................................7.03
314(a)..................................................3.09
314(b)..................................................3.06
314(c)(1)...............................................11.01(a)
314(c)(2)...............................................11.01(a)
314(c)(3)...............................................Not Applicable
314(d)..................................................3.09(a), 8.06, 11.01(a)
314(e)..................................................11.01(a)
315(a)..................................................6.01(b)
315(b)..................................................6.05
315(c)..................................................6.01(a)
315(d)..................................................6.01(c)
315(d)(1)...............................................6.01(b), 6.01(c)(i)
315(d)(2)...............................................6.01(c)(ii)
315(d)(3)...............................................6.01(c)(iii)
315(e)..................................................5.13
316(a)..................................................5.11; 5.12
316(a)(1)(A)............................................5.11
316(a)(1)(B)............................................5.12
316(a)(2)...............................................Not Applicable
316(b)..................................................5.07
316(c)..................................................5.06(b)
317(a)(1)...............................................5.03(a), 5.03(b)
317(a)(2)...............................................5.03(d)
317(b)..................................................3.03
318(a)..................................................11.19
<PAGE> 3
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions................................................ 2
Section 1.02. Interpretive Provisions.................................... 13
ARTICLE TWO
THE SENIOR NOTES
Section 2.01. Form....................................................... 14
Section 2.02. Execution, Authentication and Delivery..................... 14
Section 2.03. Temporary Senior Notes..................................... 15
Section 2.04. Registration; Registration of Transfer and Exchange........ 15
Section 2.05. Mutilated, Destroyed, Lost or Stolen Senior Notes.......... 16
Section 2.06. Persons Deemed Owners...................................... 17
Section 2.07. Cancellation............................................... 17
Section 2.08. Release of Collateral...................................... 18
Section 2.09. Book-Entry Notes........................................... 18
Section 2.10. Notices to Clearing Agency................................. 19
Section 2.11. Definitive Notes........................................... 19
Section 2.12. Authenticating Agents...................................... 19
ARTICLE THREE
COVENANTS
Section 3.01. Payment of Principal and Interest.......................... 21
Section 3.02. Maintenance of Office or Agency............................ 21
Section 3.03. Money for Payments to be Held in Trust..................... 21
Section 3.04. Existence.................................................. 23
Section 3.05. Protection of Trust Estate................................. 23
Section 3.06. Opinions as to Trust Estate................................ 23
Section 3.07. Performance of Obligations; Administration of the 1999-A
SUBI Assets.............................................. 24
Section 3.08. Negative Covenants......................................... 25
Section 3.09. Issuer Certificates and Reports............................ 26
Section 3.10. Restrictions on Certain Other Activities................... 27
Section 3.11. Notice of Defaults......................................... 27
Section 3.12. Further Instruments and Acts............................... 27
Section 3.13. Delivery of 99% 1999-A Vehicle SUBI Certificate............ 27
Section 3.14. Delivery of the Subordinated Notes......................... 27
Section 3.15. Compliance with Laws....................................... 27
<PAGE> 4
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.................... 28
Section 4.02. Application of Trust Money................................. 29
Section 4.03. Repayment of Monies Held by Paying Agent................... 29
ARTICLE FIVE
INDENTURE DEFAULT
Section 5.01. Indenture Defaults......................................... 30
Section 5.02. Acceleration of Maturity; Waiver of Indenture Default...... 31
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee........................................ 32
Section 5.04. Remedies; Priorities....................................... 34
Section 5.05. Optional Preservation of the 1999-A SUBI Assets............ 36
Section 5.06. Limitation of Suits........................................ 36
Section 5.07. Unconditional Rights of Senior Noteholders to Receive
Principal and Interest................................... 37
Section 5.08. Restoration of Rights and Remedies......................... 37
Section 5.09. Rights and Remedies Cumulative............................. 37
Section 5.10. Delay or Omission Not a Waiver............................. 37
Section 5.11. Control by Senior Noteholders.............................. 37
Section 5.12. Waiver of Past Defaults.................................... 38
Section 5.13. Undertaking for Costs...................................... 38
Section 5.14. Waiver of Stay or Extension Laws........................... 39
Section 5.15. Action on Senior Notes..................................... 39
Section 5.16. Performance and Enforcement of Certain Obligations......... 39
Section 5.17. Sale of Trust Estate....................................... 40
ARTICLE SIX
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee................................ 41
Section 6.02. Rights of Indenture Trustee................................ 42
Section 6.03. Individual Rights of Indenture Trustee..................... 43
Section 6.04. Indenture Trustee's Disclaimer............................. 44
Section 6.05. Notice of Defaults......................................... 44
Section 6.06. Reports by Indenture Trustee to Senior Noteholders......... 44
Section 6.07. Compensation and Indemnity................................. 44
Section 6.08. Replacement of Indenture Trustee........................... 45
Section 6.09. Successor Indenture Trustee by Merger...................... 46
Section 6.10. Appointment of Co-Trustee or Separate Trustee.............. 47
Section 6.11. Eligibility; Disqualification.............................. 48
Section 6.12. Trustee as Holder of 99% 1999-A Vehicle SUBI Certificate... 48
Section 6.13. Representations and Warranties of Indenture Trustee........ 48
Section 6.14. Furnishing of Documents.................................... 49
Section 6.15. Preferential Collection Of Claims Against The Issuer....... 49
<PAGE> 5
ARTICLE SEVEN
SENIOR NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer to Furnish Indenture Trustee Senior Noteholder
Names and Addresses...................................... 50
Section 7.02. Preservation of Information; Communications to
Senior Noteholders....................................... 50
Section 7.03. Reports by Indenture Trustee............................... 50
ARTICLE EIGHT
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money........................................ 51
Section 8.02. Accounts................................................... 51
Section 8.03. Payment Date Certificate................................... 51
Section 8.04. Disbursement of Funds...................................... 53
Section 8.05. General Provisions Regarding Accounts...................... 57
Section 8.06. Release of Trust Estate.................................... 58
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Senior
Noteholders.............................................. 59
Section 9.02. Supplemental Indentures With Consent of Senior
Noteholders.............................................. 60
Section 9.03. Execution of Supplemental Indentures....................... 61
Section 9.04. Effect of Supplemental Indenture........................... 61
Section 9.05. Reference in Senior Notes to Supplemental Indentures....... 62
ARTICLE TEN
REDEMPTION OF SENIOR NOTES
Section 10.01. Redemption................................................ 63
Section 10.02. Form of Redemption Notice................................. 63
Section 10.03. Senior Notes Payable on Redemption Date................... 64
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions...................... 65
Section 11.02. Form of Documents Delivered to Indenture Trustee.......... 66
Section 11.03. Acts of Senior Noteholders................................ 67
Section 11.04. Notices................................................... 68
Section 11.05. Notices to Senior Noteholders; Waiver..................... 68
<PAGE> 6
Section 11.06. Effect of Headings and Table of Contents.................. 69
Section 11.07. Successors and Assigns.................................... 69
Section 11.08. Severability.............................................. 69
Section 11.09. Benefits of Indenture..................................... 69
Section 11.10. Legal Holidays............................................ 69
Section 11.11. Governing Law............................................. 69
Section 11.12. Counterparts.............................................. 69
Section 11.13. Recording of Indenture.................................... 69
Section 11.14. Trust Obligation.......................................... 69
Section 11.15. No Petition............................................... 70
Section 11.16. No Recourse............................................... 70
Section 11.17. Inspection................................................ 71
Section 11.18. Limitation of Liability of Owner Trustee.................. 71
Section 11.19. TIA Incorporation and Conflicts........................... 71
EXHIBITS
Exhibit A Form of Senior Note.......................................A-1
Exhibit B Form of Depository Agreement..............................B-1
<PAGE> 7
INDENTURE
This Indenture, dated as of October 1, 1999, is between the Ryder
Vehicle Lease Trust 1999-A, a Delaware business trust (the "Issuer"), and U.S.
Bank National Association, a national banking association, as trustee (the
Indenture Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the holders of the Issuer's [_______]%
Asset Backed Notes, Class A-1 (the "Class A-1 Notes"), [_______]% Asset Backed
Notes, Class A-2 (the "Class A-2 Notes"), [_______]% Asset Backed Notes, Class
A-3 (the "Class A-3 Notes"), [_______]% Asset Backed Notes, Class A-4 (the
"Class A-4 Notes"), [_______]% Asset Backed Notes, Class A-5 (the "Class A-5
Note" and, together with the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes and Class A-4 Notes, the "Senior Notes"):
GRANTING CLAUSE
The Issuer, to secure the payment of principal of and interest on, and
any other amounts owing in respect of, the Senior Notes, equally and ratably
without prejudice, priority or distinction except as set forth herein, and to
secure compliance with the provisions of this Indenture, hereby Grants in trust
to the Indenture Trustee on the Closing Date, as trustee for the benefit of the
Senior Noteholders, all of the Issuer's right, title and interest, whether now
owned or hereafter acquired, in and to (i) the Trust Estate and (ii) all
present and future claims, demands, causes and choses in action in respect of
any or all of the foregoing and all payments on or under and all proceeds of
every kind and nature whatsoever in respect of any or all of the foregoing,
including all proceeds of the conversion, voluntary or involuntary, into cash
or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and
other forms of obligations and receivables, instruments, securities, financial
assets and other property that at any time constitute all or part of or are
included in the proceeds of any of the foregoing (collectively, the
"Collateral"), in each case as such terms are defined herein.
The Indenture Trustee, as trustee on behalf of the Senior Noteholders,
acknowledges the foregoing Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that
the interests of the Senior Noteholders may be adequately and effectively
protected.
<PAGE> 8
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions. Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in the SUBI Trust
Agreement or the Administration Agreement, as the case may be. Whenever used
herein, unless the context otherwise requires, the following words and phrases
have the following meanings:
"Accounts" means the Note Distribution Account: and the Reserve Fund.
"Accrual Period" means, with respect to any Payment Date, the period
from and including the l5th day of the month in which the preceding Payment
Date occurred (or, in the case of the first Payment Date or if no interest has
yet been paid, from and including the Closing Date) to and including the l4th
day of the month in which such Payment Date occurs.
"Act" has the meaning set forth in Section 11.03(a).
"Administration Agreement" means the Basic Administration Agreement as
supplemented by that certain 1999-A supplement, dated as of October 1, 1999,
among the parties to the Basic Administration Agreement, as amended or
supplemented from time to time with respect to the 1999-A SUBI.
"Administrator" means the Administrator, or any successor
Administrator under the Issuer Administration Agreement.
"Authenticating Age" means any Person authorized by the Indenture
Trustee to act on behalf of the Indenture Trustee to authenticate and deliver
the Senior Notes.
"Authorized Newspaper" means a newspaper of general circulation in The
City of New York, printed in the English language and customarily published on
each Business Day, whether or not published on Saturdays, Sundays and holidays.
"Authorized Officer" means, with respect to the Issuer, (i) any
officer of the Owner Trustee who is authorized to act for the Owner Trustee in
matters relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing
Date and (ii) so long as the Issuer Administration Agreement is in effect, any
of the following officers of the Administrator, each of whom is authorized to
act for the Administrator in matters relating to the Issuer pursuant to the
Issuer Administration Agreement: the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary and any Assistant Secretary.
"Available Funds" means, for any Payment Date and the related
Collection Period, the sum of the following amounts: (i) 99% of SUBI
Collections, (ii) Advances, (iii) 99% of the Residual Value Surplus Draw Amount
and (iv) in the case of an Optional Purchase, the Optional Purchase Price.
2
<PAGE> 9
"Available Funds Shortfall Amount" means, for any Payment Date and the
related Collection Period, the amount by which Securityholder Available Funds
is less than the amount necessary to make the distributions in clauses (i)
through (iv) of Section 8.04(a), except that the Optimal Principal
Distributable Amount rather than the Quarterly Principal Distributable Amount
shall be used for purposes of clause (iv).
"Available Principal Distribution Amount" means an amount equal to the
sum of (i) the amount of Available Funds remaining after the Administrative
Agent has been paid the Payment Date Advance Reimbursement and the
Administration Fee, and after accrued interest has been paid on the Securities,
and (ii) the Reserve Fund Draw Amount, if any, remaining after accrued interest
has been paid on the Securities.
"Back-up Security Agreement" means that certain back-up security
agreement dated as of October 1, 1999, among Ryder, the Origination Trust, RTR
I LP, the Transferor, the Issuer and the Indenture Trustee.
"Basic Administration Agreement" means that certain administration
agreement, dated as of February 1, 1998, among the UTI Beneficiaries, Ryder, as
administrative agent, RTRT, Inc., as trustee, Delaware Trust Capital
Management, Inc., as Delaware trustee, and U.S. Bank, as trust agent.
"Book-Entry Notes" means a beneficial interest in the Senior Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.09.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in the states of Delaware, Florida, Illinois or
New York are authorized or obligated by law, executive order or government
decree to be closed.
"Certificate Balance" has the meaning set forth in the Trust Agreement.
"Certificate Distribution Amount" means, as of any Payment Date, the
amount being distributed to the Trust Certificateholders on such Payment Date.
"Certificate Factor" has the meaning set forth in the Trust Agreement.
"Certificate Rate" has the meaning set forth in the Trust Agreement.
"Class" means a group of Senior Notes whose form is identical except
for variation in denomination, principal amount or owner, and references to
"each Class" thus mean each of the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes and Class A-5 Notes.
3
<PAGE> 10
"Class A-1 Interest Rate" means [______] % per annum (computed on the
basis of the actual number of days elapsed, but assuming a 360-day year of
twelve 30-day months).
"Class A-2 Interest Rate" means [______] % per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-3 Interest Rate" means [______] % per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-4 Interest Rate" means [______] % per annum (computed on the
basis of a 360-day year of twelve 30-day months).
"Class A-5 Interest Rate" means [______] % per annum (computed on the
basis of the actual number of days elapsed, but assuming a 360-day year of
twelve 30-day months).
"Class A-1 Note Balance" means, as of any date, the Initial Class A-1
Note Balance reduced by all payments of principal made on or prior to such date
on the Class A-1 Notes.
"Class A-2 Note Balance" means, as of any date, the Initial Class A-2
Note Balance reduced by all payments of principal made on or prior to such date
on the Class A-2 Notes.
"Class A-3 Note Balance" means, as of any date, the Initial Class A-3
Note Balance reduced by all payments of principal made on or prior to such date
on the Class A-3 Notes.
"Class A-4 Note Balance" means, as of any date, the Initial Class A-4
Note Balance reduced by all payments of principal made on or prior to such date
on the Class A-4 Notes.
"Class A-5 Note Balance" means, as of any date, the Initial Class A-5
Note Balance reduced by all payments of principal made on or prior to such date
on the Class A-5 Notes.
"Clearing Agency " means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act and shall initially be DTC.
"Clearing Agency Participant" means a broker, dealer, bank or other
financial institution or other Person for which from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means [_________], 1999.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning set forth in the Granting Clause.
"Commission" means the U.S. Securities and Exchange Commission.
"Corporate Trust Office" means the office of the Indenture Trustee at
which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Indenture is
located at One Illinois Center, 111 East Wacker Drive, Suite 3000, Chicago,
Illinois 60601; or at such other address as the Indenture Trustee may designate
from time to time by notice to the Senior Noteholders and the Issuer, or the
principal corporate trust office of any successor Indenture Trustee (the
address of which the successor Indenture Trustee shall notify the Senior
Noteholders and the Issuer).
4
<PAGE> 11
"Default" means any occurrence that is, or with notice or lapse of
time or both would become, an Indenture Default.
"Definitive Note" means a definitive fully registered Senior Note.
"Deposit Date" means the Business Day immediately preceding each
Payment Date.
"Depository Agreement" means the agreement among the Issuer, the
Indenture Trustee and DTC, as the initial Clearing Agency, dated as of the
Closing Date, substantially in the form of Exhibit B.
"DCR" means Duff & Phelps Credit Rating Co.
"DTC" means The Depository Trust Company, and its successors.
"Eligible Account" means an account maintained with a depository
institution or trust company (i) (a) the short-term unsecured debt obligations
of which have the Required Deposit Rating or (b) having a long-term unsecured
debt rating acceptable to each Rating Agency and corporate trust powers and
(ii) which is maintained in a segregated trust account in the corporate trust
department of such depository institution or trust company.
"Excess Amounts" means the amount remaining after the distributions
from the 1999-A SUBI Collection Account provided for in clauses (i) through
(iv) of Section 8.04(a), in the amount and priority set forth therein, have
been made.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any (i) corporation or
depository institution, the Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer, President, Executive Vice President, any Vice
President, the Secretary or the Treasurer of such corporation or depository
institution, and (ii) any partnership, any general partner thereof.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create and grant a lien upon and a
security interest in and right of set-off against, deposit, set over and
confirm pursuant to this Indenture, and, with respect to the Collateral or any
other agreement or instrument, shall include all rights, powers and options
(but none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Collateral and all other
monies payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the granting party or otherwise
and generally to do and receive anything that the granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
5
<PAGE> 12
"Indenture Default" has the meaning set forth in Section 5.01.
"Independent" means, when used with respect to any specified Person,
that such Person (i) is in fact independent of the Issuer, any other obligor
upon the Senior Notes, the Administrator and any Affiliate of any of the
foregoing Persons, (ii) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Administrator or any Affiliate of any of the foregoing Persons and (iii) is not
connected with the Issuer, any such other obligor, the Administrator or any
Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.0 1 (b),
made by an Independent appraiser or other expert appointed by an Issuer Order,
and such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.
"Initial Class A-1 Note Balance" means $[__________].
"Initial Class A-2 Note Balance" means $[__________].
"Initial Class A-3 Note Balance" means $[__________].
"Initial Class A-4 Note Balance" means $[__________].
"Initial Class A-5 Note Balance" means $[__________].
"Initial Securities Balance" has the meaning set forth in the Trust
Agreement.
"Initial Senior Note Balance" means the sum of the Initial Class A-1
Note Balance, the Initial Class A-2 Note Balance, the Initial Class A-3 Note
Balance, the Initial Class A-4 Note Balance and the Initial Class A-5 Note
Balance.
"Interest Rate" means the Class A-1 Interest Rate, Class A-2 Interest
Rate, Class A-3 Interest Rate, Class A-4 Interest Rate, Class A-5 Interest Rate
or the Overdue Interest Rate, as applicable.
"Issuer" means the Ryder Vehicle Lease Trust 1999-A, until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein, each other obligor on the Senior Notes.
"Issuer Administration Agreement" means that certain issuer
administration agreement, dated as of the date hereof, among the Administrator,
the Issuer, the Transferor and the Indenture Trustee.
6
<PAGE> 13
"Issuer SUBI Certificate Transfer Agreement" means that certain issuer
SUBI certificate transfer agreement, dated as of October 1, 1999, between the
Transferor, as transferor, and the Issuer, as transferee, as amended or
supplemented from time to time.
"Issuer Order" and "Issuer Request" means a written order or request
of the Issuer signed in the name of the Issuer by any one of its Authorized
Officers and delivered to the Indenture Trustee.
"Note Distribution Account" means the trust account established by the
Transferor pursuant to Section 8.02, into which amounts released from the
1999-A SUBI Collection Account and the Reserve Fund for distribution to Senior
Noteholders shall be deposited and from which all distributions to Senior
Noteholders shall be made.
"Note Factor" means, with respect to the Senior Notes on any Payment
Date, the seven digit decimal equivalent of a fraction the numerator of which
is the Senior Note Balance on such Payment Date (after giving effect to any
payment of principal on such Payment Date) and the denominator of which is the
Initial Senior Note Balance.
"Officer's Certificate" means a certificate signed by an Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to,
the Indenture Trustee.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be employees of
or counsel to the Issuer or the Administrator, and who shall be satisfactory to
the Indenture Trustee, and which opinion or opinions shall be addressed to the
Indenture Trustee, comply with any applicable requirements of Section 11.01 and
be in form and substance satisfactory to the Indenture Trustee.
"Optimal Principal Distributable Amount" means, for any Payment Date
and the related Collection Period, an amount equal to the sum of the following
amounts:
(i) for each Specified Vehicle for which the related Specified Lease
did not terminate during such Collection Period, the difference between the
Securitization Value of such Specified Lease at the beginning and at the end of
such Collection Period;
(ii) for each Specified Vehicle for which the related Specified Lease
reached its Maturity Date during such Collection Period, the Securitization
Value of such Specified Lease as of such Maturity Date;
(iii) for each Specified Lease terminated by the related Lessee or the
Administrative Agent during such Collection Period pursuant to exercise of the
Annual Termination Option, the related Securitization Value as of the effective
date of termination;
(iv) for each Specified Vehicle purchased by the Administrative Agent
before its Maturity Date, the Securitization Value of the related Specified
Lease as of the date of such purchase;
7
<PAGE> 14
(v) for each Specified Vehicle that became the subject of a Casualty
Termination Lease during such Collection Period, the Securitization Value of
the related Specified Lease as of the date of such Casualty Termination; and
(vi) for each Specified Lease that became a Default Termination Lease
during such Collection Period, the related Securitization Value as of the date
such Specified Lease became a Default Termination Lease.
"Optional Purchase Price" has the meaning set forth in Section
10.01(a).
"Origination Trust" means Ryder Truck Rental LT.
"Origination Trust Agreement" means that certain second amended and
restated trust agreement, dated as of February 1, 1998, among Ryder Truck
Rental I LP and Ryder Truck Rental II LP, as grantors and initial
beneficiaries, Ryder, as administrative agent, Delaware Trust Capital
Management, Inc., as Delaware trustee, RTRT, Inc., as trustee, and U.S. Bank,
as trust agent.
"Origination Trust Trustee" means RTRT, Inc., in its capacity as
Trustee of the Origination Trust.
"Outstanding" means, as of any date, all Senior Notes (or all Senior
Notes of an applicable Class) theretofore authenticated and delivered under
this Indenture except:
(i) Senior Notes (or Senior Notes of an applicable Class) theretofore
cancelled by the Senior Note Registrar or delivered to the Senior Note
Registrar for cancellation;
(ii) Senior Notes (or Senior Notes of an applicable Class) or portions
thereof the payment for which money in the necessary amount has been
theretofore deposited with the Indenture Trustee or any Paying Agent in trust
for the related Senior Noteholders (provided, however, that if such Senior
Notes are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor, satisfactory to the Indenture
Trustee, has been made); and
(iii) Senior Notes (or Senior Notes of an applicable Class) in
exchange for or in lieu of other Senior Notes (or Senior Notes of such Class)
that have been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such Senior
Notes are held by a bona fide purchaser;
provided, that in determining whether Senior Noteholders holding the requisite
Outstanding Amount have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any Basic Document, Senior Notes
owned by the Issuer, the Transferor, the Administrator or any of their
respective Affiliates shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Senior Notes that a Responsible Officer knows to be so
owned shall be so disregarded. Senior Notes so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee thereof establishes to
the satisfaction of the Indenture Trustee such pledgee's right so to act with
respect to such Senior Notes and that such pledgee is not the Issuer, the
Transferor, the Administrator or any of their respective Affiliates.
8
<PAGE> 15
"Outstanding Amount" means, as of any date, the aggregate principal
amount of the applicable Senior Notes Outstanding, reduced by all payments of
principal made in respect thereof on or prior to such date.
"Overdue Interest Rate" means, with respect to any Class, the Interest
Rate applicable to such Class.
"Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee set forth in Section
6.11 and is authorized by the Issuer to make the payments to and distributions
from the Note Distribution Account, including the payment of principal of or
interest on the Senior Notes on behalf of the Issuer.
"Payment Date Certificate" has the meaning set forth in Section
8.03(a).
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Note" means, with respect to any particular Senior Note,
every previous Senior Note evidencing all or a portion of the same debt as that
evidenced by such particular Senior Note; and, for the purpose of this
definition, any Senior Note authenticated and delivered under Section 2.05 in
lieu of a mutilated, destroyed, lost or stolen Senior Note shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Senior Note.
"Principal Carryover Shortfall" means, as of the close of any Payment
Date, the sum of the excess, if any, of the then Principal Distribution Amount
over the Quarterly Principal Distributable Amount.
"Principal Distribution Amount" means, for any Payment Date, the
aggregate amount of principal payable on the Securities, equal to the greater
of (A) the sum of (i) the Optimal Principal Distributable Amount and (ii) any
Principal Carryover Shortfall as of the preceding Payment Date and (B) if the
amount on deposit in the Reserve Fund after giving effect to all deposits and
withdrawals referenced in clause (i) of the definition of the Reserve Fund Draw
Amount exceeds the unpaid balance of the Securities, the Securities Balance.
Notwithstanding the above, the Principal Distribution Amount shall not exceed
the outstanding Securities Balance.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative
9
<PAGE> 16
"Program Operating Lease" means that certain program operating lease,
dated as of October 1, 1999, between the Transferor and the Issuer.
"Quarterly Principal Distributable Amount" means an amount equal to
the lesser of (i) the Principal Distribution Amount and (ii) the Available
Principal Distribution Amount.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given ten Business Days (or such shorter period
as is acceptable to each Rating Agency) prior notice thereof and that each
Rating Agency shall have notified the Transferor, the Administrator and the
Issuer in writing that such action will not result in a Rating Event.
"Rating Event" means the qualification, reduction or withdrawal by
either Rating Agency of its then-current rating of the Senior Notes or the
Trust Certificates.
"Record Date" means, with respect to a Payment Date or Redemption
Date, the close of business on the Business Day immediately preceding such
Payment Date or Redemption Date.
"Redemption Date" means in the case of a redemption of the Senior
Notes pursuant to Section 10.01, the Payment Date specified by the
Administrator or the Issuer pursuant to Section 10.01.
"Redemption Price" means an amount equal to the unpaid principal
amount of the Senior Notes redeemed plus accrued and unpaid interest thereon at
the applicable Interest Rate for the Senior Notes being so redeemed, up to but
excluding the Redemption Date.
"Registered Holder" means the Person in whose name a Senior Note is
registered on the Senior Note Register on the related Record Date.
"Repayment Price" has the meaning set forth in the Trust Agreement.
"Reserve Fund" has the meaning set forth in the Trust Agreement.
"Reserve Fund Deposit Amount" means, with respect to any Payment Date,
an amount equal to the sum of (i) all payments in respect of interest on and
principal of the Subordinated Notes, (ii) any Excess Amounts with respect to
the related Collection Period and (iii) net income realized on the investment
of funds on deposit in the 1999-A SUBI Collection Account, the Residual Value
Surplus Account and the Reserve Fund.
"Reserve Fund Draw Amount" means, for any Payment Date, the amount
withdrawn from the Reserve Fund, equal to the sum of (i) the lesser of (a) the
Available Funds Shortfall Amount, if any, and (b) the amount on deposit in the
Reserve Fund after giving effect to all deposits thereto on the related Deposit
Date or such Payment Date, and (ii) in the event the amount on deposit in the
Reserve Fund, after giving effect to all withdrawals therefrom and deposits
thereto in respect of such Payment Date, exceeds the unpaid balance of the
Securities, the Securities Balance.
10
<PAGE> 17
"Reserve Fund Property" has the meaning set forth in the Issuer SUBI
Certificate Transfer Agreement.
"Reserve Fund Requirement" means (i) on any Payment Date other than a
Payment Date described in clause (ii), an amount equal to [_______]% of the
Initial Securities Balance or (ii) on any Payment Date occurring on or after
the earlier to occur of the date on which the last remaining Specified Lease
terminated or the date on which the Program Operating Lease is terminated
following a Program Operating Lease Default, zero.
"Residual Note" has the meaning set forth in Section 2.02.
"Residual Value Surplus Draw Amount" means, on each Deposit Date, the
withdrawal made from the Residual Value Surplus Account in an amount equal to
the lesser of (i) the sum of all Residual Value Losses, if any, and any
unreimbursed Disposition Expenses in respect of related Specified Vehicles sold
or otherwise disposed of by the Administrative Agent during the related
Collection Period and (ii) the amount on deposit in the Residual Value Surplus
Account.
"Responsible Officer" means, with respect to the Indenture Trustee,
any officer within Corporate Trust (or any successor group of the Indenture
Trustee), including any Vice President, Assistant Secretary or other officer or
assistant officer of the Indenture Trustee customarily performing functions
similar to those performed by the people who at such time shall be officers, or
to whom any corporate trust matter is referred within Corporate Trust because
of his knowledge of and familiarity with the particular subject.
"Ryder" means Ryder Truck Rental, Inc., and its successors.
"Securities" means the Trust Certificates, the Subordinated Notes and
the Senior Notes, collectively.
"Securities Balance" has the meaning set forth in the Trust Agreement.
"Secured Obligations" has the meaning set forth in the Issuer SUBI
Certificate Transfer Agreement.
"Securityholder Available Funds" means on each Payment Date, all
remaining Available Funds after giving effect to the payment to the
Administrative Agent pursuant to Section 11.04(a)(v) of the Administration
Agreement of (i) the Payment Date Advance Reimbursement and (ii) the
Administration Fee, together with any unpaid Administration Fees in respect of
one or more Collection Periods.
"Senior Note" means a Class A-1 Note, Class A-2 Note, Class A-3 Note,
Class A-4 Note or Class A-5 Note, in each case substantially in the form of
Exhibit A hereto.
"Senior Note Balance" means the sum of the Class A-1 Note Balance, the
Class A-2 Note Balance, the Class A-3 Note Balance, the Class A-4 Note
Balance and the Class A-5 Note Balance.
11
<PAGE> 18
"Senior Note Distribution Amount" means, as of any Payment Date, the
amount being distributed to the Senior Noteholders on such Payment Date.
"Senior Note Final Payment Date" means, with respect to a Class A-1
Note [______] 15, 20[__]; with respect to a Class A-2 Note, [______] 15, 20[__];
with respect to a Class A-3 Note, [______] 15, 20[__]; with respect to a Class
A-4 Note, [______] 15, 20[__] and with respect to a Class A-5 Note, [______]
15, 20[__].
"Senior Noteholder" means, as of any date, the Person in whose name a
Senior Note is registered on the Senior Note Register on such date.
"Senior Note Owner" means, with respect to a Book-Entry Note, the
Person who is the beneficial owner of such Book-Entry Note, as reflected on the
books of the Clearing Agency or a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing
Agency).
"Senior Note Register" and "Senior Note Registrar" have the respective
meanings set forth in Section 2.04.
"SUBI Trust Agreement" means the Origination Trust Agreement as
supplemented by that certain supplement, dated as of October 1, 1999, among the
parties to the Origination Trust Agreement, as amended or supplemented from
time to time.
"Subordinated Note" has the meaning set forth in the Trust Agreement.
"Subordinated Note Rate" has the meaning set forth in the Trust
Agreement.
"Subordinated Note Redemption Price" has the meaning set forth in the
Trust Agreement.
"TIA" means the Trust Indenture Act of 1939, as amended and as in
force on the date hereof, unless otherwise specifically provided.
"Trust Agreement" means that certain trust agreement, as amended and
restated as of October 1, 1999, between the Transferor and the Owner Trustee.
"Trust Certificate" has the meaning set forth in the Trust Agreement.
"Trust Estate" means all money, accounts, chattel paper, general
intangibles, goods, instruments, investment property and other property subject
or intended to be subject to the lien and security interest of this Indenture
for the benefit of the Senior Noteholders (including the Collateral Granted to
the Indenture Trustee), including (i) the 99% 1999-A Vehicle SUBI Certificate
(transferred pursuant to the Issuer SUBI Certificate Transfer Agreement),
evidencing a 99% beneficial interest in the 1999-A Vehicle SUBI Assets,
including the right to payments thereunder from certain Sales Proceeds on
deposit in the 1999-A SUBI Collection Account and the Residual Value Surplus
Account and investment earnings, net of losses and investment expenses, on
amounts on deposit in the 1999-A SUBI Collection Account and the Residual Value
Surplus Account, (ii) the rights of the Issuer under the Program Operating
Lease, (iii) the rights of the Issuer under the Back-up Security Agreement,
12
<PAGE> 19
(iv) the rights of the Issuer to the funds on deposit from time to time in the
Note Distribution Account and any other account or accounts established
pursuant to the Indenture and all cash, investment property and other property
from time to time credited thereto and all proceeds thereof, (v) the rights of
the Transferor, as transferee under the SUBI Certificate Transfer Agreement,
(vi) the rights of the Issuer, as transferee under the Issuer SUBI Certificate
Transfer Agreement, (vii) the rights of the Issuer as a third-party beneficiary
of the Administration Agreement, including the right to certain Advances, and
the SUBI Trust Agreement, (viii) the security interest of the Issuer in the
Subordinated Notes and in the Reserve Fund Property; (ix) the pledge to and
security interest of the Issuer in the 99% 1999-A Lease SUBI Certificate, and
(x) all proceeds of the foregoing.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code as in effect in the relevant jurisdiction, as amended from time
to time.
"United States" means the United States of America.
"UTI Beneficiary" means Ryder Truck Rental I LP or Ryder Truck Rental
II LP, each in its capacity as an initial Beneficiary of the Origination Trust,
and its permitted successors and assigns.
Section 1.02. Interpretive Provisions.
(a) For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used in this
Indenture include, as appropriate, all genders and the plural as well as the
singular, (ii) references to words such as "herein", "hereof" and the like
shall refer to this Indenture as a whole and not to any particular part,
Article or Section within this Indenture, (iii) the term "include" and all
variations thereof shall mean "include without limitation", (iv) the term "or"
shall include "and/or" and (v) the term "proceeds" shall have the meaning set
forth in the applicable UCC.
(b) As used in this Indenture and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Indenture or in any such certificate or other document, and accounting
terms partly defined in this Indenture or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Indenture or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Indenture or
in any such certificate or other document shall control.
13
<PAGE> 20
ARTICLE TWO
THE SENIOR NOTES
Section 2.01. Form. The Senior Notes, together with the Indenture
Trustee's certificate of authentication, shall be in substantially the form set
forth as Exhibit A hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Senior Notes, as evidenced by
their execution of such Senior Notes. Any portion of the text of any Senior
Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of such Senior Note.
The terms of the Senior Notes set forth in Exhibit A hereto are part
of the terms of this Indenture.
Section 2.02. Execution, Authentication and Delivery. The Senior Notes
shall be executed by the Owner Trustee on behalf of the Issuer. The signature of
any authorized officer of the Owner Trustee on the Senior Notes may be manual or
by facsimile. Senior Notes bearing the manual or facsimile signature of
individuals who were at any time authorized officers of the Owner Trustee shall
bind the Issuer, notwithstanding that any such individuals have ceased to hold
such offices prior to the authentication and delivery of such Senior Notes or
did not hold such offices at the date of such Senior Notes.
The Indenture Trustee shall, upon Issuer Order, authenticate and
deliver for original issue the following aggregate principal amounts of the
Senior Notes: (i) $[________] of Class A-1 Notes, (ii) $[_______] of Class A-2
Notes, (iii) $[________] of Class A-3 Notes, (iv) $[________] of Class A-4 Notes
and (v) $[_______] of Class A-5 Notes. The aggregate principal amount of Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class A-5 Notes
outstanding at any time may not exceed such respective amounts, except as
provided in Section 2.05.
Each Senior Note shall be dated the date of its authentication. The
Senior Notes shall be issuable as registered notes in book-entry form in minimum
denominations of $ 1,000 and in integral multiples of $ 1,000 in excess thereof;
provided, however, that on the Closing Date, one Class A-1 Note, one Class A-2
Note, one Class A-3 Note, one Class A-4 Note and one Class A-5 Note may be
issued in a denomination that includes any remaining portion of the Initial
Class A-1 Note Balance, the Initial Class A-2 Note Balance, the Initial Class
A-3 Note Balance, the Initial Class A-4 Note Balance, and the Initial Class A-5
Note Balance, respectively (each, a "Residual Note").
No Senior Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Senior
Note a certificate of authentication substantially in the form provided for
herein executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Senior Note shall be
conclusive evidence, and the only evidence, that such Senior Note has been duly
authenticated and delivered hereunder.
14
<PAGE> 21
Section 2.03. Temporary Senior Notes. Pending the preparation of
Definitive Notes, the Owner Trustee may execute, on behalf of the Issuer, and
upon receipt of an Issuer Order, the Indenture Trustee shall authenticate and
deliver, temporary Senior Notes that are printed, lithographed, typewritten,
mimeographed or otherwise produced, substantially of the tenor of the
Definitive Notes in lieu of which they are issued and with such variations not
inconsistent with the terms of this Indenture as the officers executing such
Senior Notes may determine, as evidenced by their execution of such Senior
Notes.
If temporary Senior Notes are issued, the Issuer shall cause
Definitive Notes to be prepared without unreasonable delay. After the
preparation of Definitive Notes, the temporary Senior Notes shall be
exchangeable for Definitive Notes upon surrender of such temporary Senior Notes
at the office or agency of the Issuer to be maintained as provided in Section
3.02, without charge to the related Senior Noteholder. Upon surrender for
cancellation of any one or more temporary Senior Notes, the Owner Trustee shall
execute, on behalf of the Issuer, and the Indenture Trustee shall authenticate
and deliver in exchange therefor, a like principal amount of Definitive Notes
of authorized denominations. Until so exchanged, such temporary Senior Notes
shall in all respects be entitled to the same benefits under this Indenture as
Definitive Notes.
Section 2.04. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Senior Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Senior Notes and the registration of transfers
of Senior Notes. The Indenture Trustee is hereby appointed the "Senior Note
Registrar" for the purpose of registering Senior Notes and transfers of Senior
Notes as herein provided. Upon any resignation of any Senior Note Registrar, the
Issuer shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Senior Note Registrar.
If a Person other than the Indenture Trustee is appointed by the
Issuer as Senior Note Registrar, the Issuer shall give the Indenture Trustee
prompt written notice of such appointment and the location, and any change in
such location, of the Senior Note Register, and the Indenture Trustee shall
have the right to inspect the Senior Note Register at all reasonable times and
to obtain copies thereof, and the Indenture Trustee shall have the right to
rely upon a certificate executed on behalf of the Senior Note Registrar by an
Executive Officer as to the names and addresses of the Senior Noteholders and
the principal amounts and number of such Senior Notes.
Upon surrender for registration of transfer of any Senior Note at the
office or agency of the Issuer to be maintained as provided in Section 3.02, if
the requirements of Section 8-401 of the UCC are met, the Owner Trustee shall
execute, on behalf of the Issuer, and the Indenture Trustee shall authenticate
and the related Senior Noteholder shall obtain from the Indenture Trustee, in
the name of the designated transferee, one or more new Senior Notes in any
authorized denominations, of a like aggregate principal amount.
At the option of the related Senior Noteholder, Senior Notes may be
exchanged for other Senior Notes in any authorized denominations, of a like
aggregate principal amount, upon surrender of such Senior Notes at such office
or agency. Whenever any Senior Notes are so surrendered for exchange, if the
requirements of Section 8-401 of the UCC are met, the Owner Trustee shall
execute, on behalf of the Issuer, the Indenture Trustee shall authenticate and
the Senior Noteholder shall obtain from the Indenture Trustee the Senior Notes
that the Senior Noteholder making such exchange is entitled to receive.
15
<PAGE> 22
Every Senior Note presented or surrendered for registration of
transfer or exchange shall (if so required by the Issuer or the Indenture
Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form and substance satisfactory to the Issuer and the Indenture
Trustee, duly executed by the Senior Noteholder thereof or its attorney-in-fact
duly authorized in writing.
All Senior Notes issued upon any registration of transfer or exchange
of Senior Notes shall be the valid obligations of the Issuer, evidencing the
same debt and entitled to the same benefits under this Indenture as the Senior
Notes surrendered upon such registration of transfer or exchange.
No service charge shall be made to a Senior Noteholder for any
registration of transfer or exchange of Senior Notes, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith, other than exchanges
pursuant to Sections 2.03 or 9.05 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make, and the Senior Note Registrar need not register,
transfers or exchanges of any Senior Note (i) selected for redemption or (ii)
for a period of 15 days preceding the due date for any payment with respect to
such Senior Note.
Section 2.05. Mutilated, Destroyed, Lost or Stolen Senior Notes. If
(i) any mutilated Senior Note is surrendered to the Indenture Trustee, or the
Indenture Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Senior Note and (ii) there is delivered to the Indenture
Trustee such security or indemnity as may be required by it to hold the Issuer,
the Owner Trustee and the Indenture Trustee harmless, then, in the absence of
notice to the Owner Indenture Trustee, the Senior Note Registrar or the
Indenture Trustee that such Senior Note has been acquired by a "protected
purchase" (as contemplated by Article Eight of the UCC), and provided that the
requirements of Section 8-405 of the UCC are met, the Owner Trustee shall
execute, on behalf of the Issuer, and upon Issuer Request the Indenture Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Senior Note, a replacement Senior Note;
provided, however, that if any such destroyed, lost or stolen Senior Note (but
not a mutilated Senior Note) shall have become or within seven days shall
become due and payable, or shall have been called for redemption, instead of
issuing a replacement Senior Note, the Issuer may pay such destroyed, lost or
stolen Senior Note when so due or payable or upon the Redemption Date without
the surrender thereof. If, after the delivery of such replacement Senior Note
or payment of a destroyed, lost or stolen Senior Note pursuant to the proviso
to the preceding sentence, a "protected purchaser" (as contemplated by Article
Eight of the UCC) of the original Senior Note in lieu of which such replacement
Senior Note was issued presents for payment such original Senior Note, the
Issuer and the Indenture Trustee shall be entitled to recover such replacement
Senior Note (or such payment) from the Person to whom it was delivered or any
Person taking such replacement Senior Note from such Person to whom such
replacement Senior Note was delivered or any assignee of such Person, except a
"protected purchaser" (as contemplated by Article Eight of the UCC), and shall
be entitled to recover upon the security or indemnity provided therefor to the
extent of any loss, damage, cost or expense incurred by the Issuer or the
Indenture Trustee in connection therewith.
16
<PAGE> 23
Upon the issuance of any replacement Senior Note under this Section,
the Issuer or the Indenture Trustee may require the payment by the related
Senior Noteholder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable
expenses (including the fees and expenses of the Indenture Trustee or the
Senior Note Registrar) connected therewith.
Every replacement Senior Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Senior Note shall
constitute an original additional contractual obligation of the Issuer, whether
or not the mutilated, destroyed, lost or stolen Senior Note shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Senior Notes duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Senior Notes.
Section 2.06. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Senior Note, the Issuer, the Indenture Trustee
and their respective agents may treat the Person in whose name any Senior Note
is registered (as of the date of determination) as the owner of such Senior
Note for the purpose of receiving payments of principal of and interest, if
any, on such Senior Note and for all other purposes whatsoever, whether or not
such Senior Note be overdue, and neither the Issuer, the Indenture Trustee nor
any of their respective agents shall be affected by notice to the contrary.
Section 2.07. Cancellation. All Senior Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Senior Notes
previously authenticated and delivered hereunder that the Issuer may have
acquired in any manner whatsoever, and all Senior Notes so delivered shall be
promptly cancelled by the Indenture Trustee. No Senior Notes shall be
authenticated in lieu of or in exchange for any Senior Notes cancelled as
provided in this Section, except as expressly permitted by this Indenture. All
cancelled Senior Notes may be held or disposed of by the Indenture Trustee in
accordance with its standard retention or disposal policy as in effect at the
time unless the Issuer shall direct by an Issuer Order that they be destroyed
or returned to it; provided, that such Issuer Order is timely and that such
Senior Notes have not been previously disposed of by the Indenture Trustee.
17
<PAGE> 24
Section 2.08. Release of Collateral. Subject to Section 11.01 and the
terms of the Basic Documents, the Indenture Trustee shall release property from
the lien of this Indenture only upon receipt of an Issuer Request.
Section 2.09. Book-Entry Notes. Unless otherwise specified, the Senior
Notes (except for any Residual Notes), upon original issuance, will be issued
in the form of one or more typewritten Senior Notes representing the Book-Entry
Notes, to be delivered to the Indenture Trustee, as agent for DTC, the initial
Clearing Agency, by, or on behalf of, the Issuer. One fully registered Senior
Note shall be issued with respect to each $100 million in principal amount of
each Class of Senior Notes or such lesser amount as necessary. Such Senior
Notes shall initially be registered on the Senior Note Register in the name of
Cede & Co., the nominee of the initial Clearing Agency, and no Senior Note
Owner shall receive a Definitive Note representing such Senior Note Owner's
interest in such Senior Note except as provided in Section 2.11. Unless and
until Definitive Notes have been issued to Senior Note Owners pursuant to
Section 2.11:
(a) the provisions of this Section shall be in full force and effect;
(b) the Senior Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this Indenture
(including the payment of principal of and interest on the Senior Notes and the
giving of instructions or directions hereunder) as the sole Senior Noteholder,
and shall have no obligation to Senior Note Owners;
(c) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section shall
control;
(d) the rights of Senior Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between or among such Senior Note Owners and the Clearing Agency or
Clearing Agency Participants; pursuant to the Depository Agreement, unless and
until Definitive Notes are issued pursuant to Section 2.11, the initial
Clearing Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit payments of principal of and interest on
the Senior Notes to such Clearing Agency Participants; and
(e) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Senior Noteholders evidencing a
specified percentage of the Outstanding Amount, the Clearing Agency shall be
deemed to represent such percentage only to the extent that it has received
instructions to such effect from Senior Note Owners or Clearing Agency
Participants owning or representing, respectively, such required percentage of
the beneficial interest in the Senior Notes and has delivered such instructions
to the Indenture Trustee.
18
<PAGE> 25
Section 2.10. Notices to Clearing Agency. Whenever a notice or other
communication to Senior Noteholders is required under this Indenture, unless
and until Definitive Notes shall have been issued to Senior Note Owners
pursuant to Section 2.11, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Senior Noteholders to the
Clearing Agency, and shall have no obligation to the Senior Note Owners.
Section 2.11. Definitive Notes. If (i) (A) the Administrator advises
the Indenture Trustee in writing that the Clearing Agency is no longer willing
or able to properly discharge its responsibilities as described in the
Depository Agreement and (B) the Indenture Trustee or the Administrator is
unable to locate a qualified successor, (ii) the Administrator at its option
advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after an Indenture
Default, Senior Note Owners representing in the aggregate not less than 51 % of
the Outstanding Amount advise the Indenture Trustee through the Clearing Agency
and its Participants in writing that the continuation of a book-entry system
through the Clearing Agency or its successor is no longer in the best interest
of Senior Note Owners, the Indenture Trustee shall be required to notify all
Senior Note Owners, through the Clearing Agency, of the occurrence of such
event and the availability through the Clearing Agency of Definitive Notes to
Senior Note Owners requesting the same. Upon surrender to the Indenture Trustee
by the Clearing Agency of the Senior Note or Senior Notes representing the
Book-Entry Notes and the receipt of instructions for re-registration, the
Indenture Trustee shall issue Definitive Notes to Senior Note Owners, who
thereupon shall become Senior Noteholders for all purposes of this Indenture.
None of the Owner Trustee, the Senior Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
The Indenture Trustee shall not be liable if the Indenture Trustee or
the Administrator is unable to locate a qualified successor Clearing Agency.
The Definitive Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of such methods (with or without steel engraved
borders), all as determined by the officers executing such Senior Notes, as
evidenced by their execution of such Senior Notes.
If Definitive Notes are issued and the Indenture Trustee is not the
Senior Note Registrar, the Owner Trustee shall furnish or cause to be furnished
to the Indenture Trustee a list of the names and addresses of the Senior
Noteholders (i) as of each Record Date, within five days thereafter and (ii) as
of not more than ten days prior to the time such list is furnished, within 30
days after receipt by the Owner Trustee of a written request therefor.
Section 2.12. Authenticating Agents. Upon the request of the Issuer,
the Indenture Trustee shall, and if the Indenture Trustee so chooses the
Indenture Trustee may, appoint one or more Authenticating Agents with power to
act on its behalf and subject to its direction in the authentication of Senior
Notes in connection with issuance, transfers and exchanges under Sections 2.02,
2.04, 2.05 and 9.05, as fully to all intents and purposes as though each such
Authenticating Agent had been expressly authorized by such Sections to
authenticate such Senior Notes. For all purposes of this Indenture, the
authentication of Senior Notes by an Authenticating Agent pursuant to this
Section shall be deemed to be the authentication of Senior Notes by the
Indenture Trustee.
19
<PAGE> 26
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of such Authenticating
Agent hereunder, without the execution or filing of any further act on the part
of the parties hereto or such Authenticating Agent or such successor
corporation.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Indenture Trustee and the Issuer. The Indenture
Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Issuer. Upon receiving such notice of resignation or upon such termination, the
Indenture Trustee shall promptly appoint a successor Authenticating Agent and
shall give written notice of such appointment to the Issuer.
The Indenture Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services and reimbursement for its
reasonable expenses relating thereto, and the Indenture Trustee shall be
entitled to be reimbursed for all such payments, subject to Section 6.07. The
provisions of Sections 2.07 and 6.04 shall be applicable to any Authenticating
Agent.
20
<PAGE> 27
ARTICLE THREE
COVENANTS
Section 3.01. Payment of Principal and Interest. The Issuer shall duly
and punctually pay the principal of and interest on the Senior Notes in
accordance with the terms of the Senior Notes and this Indenture. Without
limiting the foregoing, subject to Section 8.04, the Issuer shall cause to be
distributed all amounts on deposit in the Note Distribution Account on each
Payment Date that have been deposited therein for the benefit of the Senior
Notes as set forth in Section 8.04. Amounts properly withheld under the Code by
any Person from a payment to any Senior Noteholder of interest or principal
shall be considered to have been paid by the Issuer to such Senior Noteholder
for all purposes of this Indenture.
Section 3.02. Maintenance of Office or Agency. The Senior Note
Registrar, on behalf of the Issuer, shall maintain at the Corporate Trust
Office or at such other location in the Borough of Manhattan, The City of New
York, chosen by the Senior Note Registrar, acting for the Issuer, an office or
agency where Senior Notes may be surrendered for registration of transfer or
exchange, and where notices to and demands upon the Issuer in respect of the
Senior Notes and this Indenture may be served. The Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders, notices and
demands. The Issuer shall give prompt written notice to the Indenture Trustee
of the location, and of any change in the location, of any such office or
agency. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.
Section 3.03. Money for Payments to be Held in Trust. As provided in
Sections 8.04 and 5.04(b), all payments of amounts due and payable with respect
to any Senior Notes that are to be made from amounts withdrawn from the Note
Distribution Account shall be made on behalf of the Issuer by the Indenture
Trustee or by another Paying Agent, and no amounts so withdrawn therefrom for
payments on Senior Notes shall be paid over to the Issuer except as provided in
this Section.
On each Payment Date and Redemption Date, the Issuer shall deposit or
cause to be deposited into the Note Distribution Account an aggregate sum
sufficient to pay the amounts then becoming due under the Senior Notes, and the
Paying Agent shall hold such sum in trust for the benefit of the Persons
entitled thereto and (unless the Paying Agent is the Indenture Trustee) shall
promptly notify the Indenture Trustee of any failure by the Issuer to effect
such deposit.
The Issuer shall cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees to the extent relevant),
subject to the provisions of this Section, that such Paying Agent shall:
21
<PAGE> 28
(a) hold all sums held by it for the payment of amounts due with
respect to the Senior Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and pay such sums to such Persons as herein provided;
(b) give the Indenture Trustee notice of any default by the Issuer of
which it has actual knowledge (or any other obligor upon the Senior Notes) in
the making of any payment required to be made with respect to the Senior Notes;
(c) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent;
(d) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Senior Notes
if at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(e) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Senior Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which such sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Senior Note and remaining unclaimed for two
years after such amount has become due and payable shall be discharged from
such trust and deposited by the Indenture Trustee into the 1999-A SUBI
Collection Account, and the related Senior Noteholder shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof, and
all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Issuer cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which date shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining shall be paid to the Administrator. The
Indenture Trustee shall also adopt and employ, at the expense of the Issuer,
any other reasonable means of notification of such repayment (including mailing
notice of such repayment to Senior Noteholders the Senior Notes of which have
been called but not surrendered for redemption or whose right to or interest in
monies due and payable but not claimed is determinable from the records of the
Indenture Trustee or any Paying Agent at the last address of record for each
such Senior Noteholder).
22
<PAGE> 29
Section 3.04. Existence. The Issuer shall keep in full effect its
existence, rights and franchises as a trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States, in which
case the Issuer shall keep in full effect its existence, rights and franchises
under the laws of such other jurisdiction) and shall obtain and preserve its
qualification to do business in each jurisdiction in which such qualification
is or shall be necessary to protect the validity and enforceability of this
Indenture, the Senior Notes, the Collateral and each other instrument or
agreement included in the Trust Estate.
Section 3.05. Protection of Trust Estate. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Indenture
Trustee on behalf of the Senior Noteholders to be prior to all other liens in
respect of the Trust Estate, and the Issuer shall take all actions necessary to
obtain and maintain, for the benefit of the Indenture Trustee on behalf of the
Senior Noteholders, a first lien on and a first priority, perfected security
interest in the Trust Estate. The Issuer shall from time to time execute and
deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, all as prepared by the Administrator and delivered to the Issuer,
and shall take such other action necessary or advisable to:
(a) Grant more effectively all or any portion of the Trust Estate;
(b) maintain or preserve the lien and security interest (and the
priority thereof) created by this Indenture or carry out more effectively the
purposes hereof;
(c) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(d) enforce any of the Collateral;
(e) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Senior Noteholders in the Trust Estate against
the claims of all Persons; or
(f) pay all taxes or assessments levied or assessed upon the Trust
Estate when due. The Issuer hereby designates the Indenture Trustee its agent
and attorney-in-fact to execute all financing statements, continuation
statements or other instruments required to be executed pursuant to this
Section.
Section 3.06. Opinions as to Trust Estate.
(a) On the Closing Date, the Issuer shall furnish or cause to be
furnished to the Indenture Trustee, an Opinion of Counsel to the effect that,
in the opinion of such counsel, either (i) all financing statements and
continuation statements have been executed and filed that are necessary to
create and maintain the lien and security interest of the Indenture Trustee in
the Collateral and reciting the details of such action, or (ii) no such action
is necessary to create and maintain such lien and security interest.
23
<PAGE> 30
(b) On or before April 30 of each calendar year, beginning with April
30, 2000, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel to the effect that in the opinion of such counsel, either (i) all
financing statements and continuation statements have been executed and filed
that are necessary to continue the lien and security interest of the Indenture
Trustee in the Collateral and reciting the details of such filings or referring
to prior Opinions of Counsel in which such details are given, or (ii) no such
action is necessary to continue such lien and security interest.
Section 3.07. Performance of Obligations; Administration of the 1999-A
SUBI Assets.
(a) The Issuer shall not take any action and shall use its best
efforts not to permit any action to be taken by others, including the
Administrator, that would release any Person from any of such Person's material
covenants or obligations under any instrument or agreement included in the
Trust Estate or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any such instrument or agreement, except as expressly
provided in the Basic Documents or such other instrument or agreement.
(b) The Issuer may contract with other Persons, to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Administrator, and the Administrator has agreed,
to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer shall, and, shall cause the Administrator and the
Administrative Agent to, punctually perform and observe all of its obligations
and agreements contained in this Indenture, the other Basic Documents and the
instruments and agreements included in the Trust Estate, including filing or
causing to be filed all UCC financing statements and continuation statements
required to be filed by the terms of this Indenture and the other Basic
Documents in accordance with and within the time periods provided for herein
and therein. Except as otherwise expressly provided therein, the Issuer, as a
party to the Basic Documents and as Holder of the 99% 1999-A Vehicle SUBI
Certificate and pledgee of the 99% 1999-A Lease SUBI Certificate, shall not,
and shall cause each of the Administrative Agent and the Administrator not to,
modify, amend, supplement, waive or terminate any Basic Document or any
provision thereof without the consent of the Indenture Trustee or the Senior
Noteholders of at least a majority of the Outstanding Amount or such greater
percentage as may be specified in the particular provision or Basic Document.
(d) Administrative Agent Defaults may occur with respect to the
Indenture Trustee as assignee of the Issuer. If the Issuer or the Indenture
Trustee shall have knowledge of the occurrence of an Administrative Agent
Default, such entity shall promptly notify the other entity and each Rating
Agency thereof, and shall specify in such notice the action, if any, the action
the other entity is taking in respect of such default. If an Administrative
Agent Default shall arise from the failure of the Administrative Agent to
perform any of its duties or obligations under the Administration Agreement
with respect to the 1999-A SUBI Assets, the Issuer shall take all reasonable
steps available to it to remedy such failure. Upon the occurrence of an
Administrative Agent Default with respect to the 1999-A SUBI, the Indenture
Trustee may terminate all of the rights and obligations of the Administrative
Agent with respect to the 1999-A SUBI only, and a successor Administrative
Agent shall be appointed pursuant to the Administration Agreement.
24
<PAGE> 31
(e) Upon any termination of the Administrative Agent's rights and
powers or resignation of the Administrative Agent pursuant to the
Administration Agreement, the Issuer or the Indenture Trustee shall promptly,
but in any event within two Business Days of such termination or resignation,
notify the other entity thereof. As soon as a successor Administrative Agent is
appointed pursuant to the Administration Agreement, the Issuer or the Indenture
Trustee shall notify the other entity of such appointment, specifying in such
notice the name and address of such successor Administrative Agent.
Section 3.08. Negative Covenants. So long as any Senior Notes are
Outstanding, the Issuer shall not:
(a) engage in any activities other than financing, acquiring, owning,
leasing (subject to the lien of this Indenture), pledging and managing the
1999-A SUBI Certificates as contemplated by this Indenture and the other Basic
Documents;
(b) other than the lease of the 99% 1999-A Vehicle SUBI Certificate
pursuant to the Program Operating Lease, which lease is subject to the lien of
this Indenture, and except as expressly permitted herein, in the Program
Operating Lease and in the other Basic Documents, sell, transfer, exchange or
otherwise dispose of any of the assets of the Issuer;
(c) claim any credit on or make any deduction from the principal or
interest payable in respect of the Senior Notes (other than amounts properly
withheld from such payments under the Code or applicable state law) or assert
any claim against any present or former Senior Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust Estate;
(d) (i) permit the validity or effectiveness of this Indenture to be
impaired, permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged or permit any Person to be released from
any covenants or obligations under this Indenture, except as may be expressly
permitted hereby, (ii) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this Indenture)
to be created on or extend to or otherwise arise upon or burden the Trust
Estate, any part thereof or any interest therein or the proceeds thereof (other
than tax liens, mechanics' liens and other liens that arise by operation of
law, in each case on any 1999-A SUBI Asset and arising solely as a result of an
action or omission of the related Lessee) or (iii) except as otherwise provided
in the Basic Documents, permit the lien of this Indenture not to constitute a
valid first priority (other than with respect to any such tax, mechanics' or
other lien) security interest in the Trust Estate;
(e) incur, assume or guarantee any indebtedness other than
indebtedness incurred in accordance with the Basic Documents; or
(f) except as otherwise permitted by the Basic Documents, dissolve or
liquidate in whole or in part.
25
<PAGE> 32
Section 3.09. Issuer Certificates and Reports.
(a) The Issuer shall deliver to the Indenture Trustee and each Rating
Agency, within 120 days after the end of each calendar year (commencing with
the year ending December 31, 1999), an Officer's Certificate stating, as to
the Authorized Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year (or
such shorter period in the case of the first such Officer's
Certificate) and of the Issuer's performance under this
Indenture has been made under such Authorized Officer's
supervision;
(ii) to the best of such Authorized Officer's knowledge, based on
such review:
(A) all the dispositions of Collateral and cash payments out of
the Accounts described in clauses (A) and (B) of Section
11.01(b)(v) that occurred during the preceding year (or shorter
period in the case of the first such Officer's Certificate) were
made in the ordinary course of the Issuer's business and the
proceeds thereof were applied in accordance with the Basic
Documents; and
(B) the Issuer has complied with all conditions and covenants
under this Indenture throughout such year (or such shorter
period in the case of the first such Officer's Certificate), or,
if there has been a Default in the compliance of any such
condition or covenant, specifying each such Default known to
such Authorized Officer and the nature and status thereof.
(b) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the
annual reports and such other information, documents and reports
(or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations
prescribe) as the Issuer may be required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the
Commission such other information, documents and reports with
respect to compliance by the Issuer with the conditions and
covenants of this Indenture as may be required from time to time
by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all Senior Noteholders as required by TIA
Section 313(c) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses
(i) and (ii) of this Section 3.09(b) and pursuant to rules and
regulations prescribed from time to time by the Commission.
26
<PAGE> 33
(c) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 3.10. Restrictions on Certain Other Activities. Except as
otherwise provided in the Basic Documents, the Issuer shall not: (i) engage in
any activities other than financing, acquiring, owning, leasing (subject to the
lien of this Indenture), pledging and managing the 1999-A SUBI Certificates in
the manner contemplated by the Basic Documents; (ii) issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness; (iii) make any loan, advance or credit to, guarantee (directly or
indirectly or by an instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital
contribution to, any other Person; or (iv) make any expenditure (by long-term
or operating lease or otherwise) for capital assets (either realty or
personalty).
Section 3.11. Notice of Defaults. The Issuer agrees to give the
Indenture Trustee and each Rating Agency prompt written notice of each
Indenture Default hereunder on the part of the Administrator and each Program
Operating Lease Default on the part of the Transferor as lessee under the
Program Operating Lease.
Section 3.12. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purposes of this Indenture.
Section 3.13. Delivery of 99% 1999-A Vehicle SUBI Certificate. On the
Closing Date, the Issuer shall deliver or cause to be delivered to the
Indenture Trustee as security for its obligations hereunder, the 99% 1999-A
Vehicle SUBI Certificate and the pledged 99% 1999-A Lease SUBI Certificate. The
Indenture Trustee shall take possession of the 99% 1999-A SUBI Certificates in
New York and shall at all times during the period of this Indenture maintain
custody of the 99% 1999-A SUBI Certificates in New York.
Section 3.14. Delivery of the Subordinated Notes. Pursuant to Section
2.01 of the Issuer SUBI Certificate Transfer Agreement, the Transferor shall
pledge all payments in respect of the Subordinated Notes to the Reserve Fund as
security for the Secured Obligations and upon the issuance of the Subordinated
Notes to the Transferor, the Issuer shall deliver the Subordinated Notes
directly to the Indenture Trustee as security for its obligations hereunder.
The Indenture Trustee shall take possession of the Subordinated Notes in New
York and shall at all times during the period of the Indenture maintain custody
of the Subordinated Notes in New York.
Section 3.15. Compliance with Laws. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability
of the Issuer to perform its obligations under the Senior Notes, this Indenture
or any other Basic Document.
27
<PAGE> 34
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall discharge with respect to the Collateral securing the Senior Notes except
as to (a) rights of registration of transfer and exchange, (b) substitution of
mutilated, destroyed, lost or stolen Senior Notes, (c) rights of Senior
Noteholders to receive payments of principal thereof and interest thereon, (d)
Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.11, 3.13 and 3.14, (e) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.07 and the obligations of the
Indenture Trustee under Section 4.02) and (f) the rights of Senior Noteholders
as beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee, on
demand and at the expense and on behalf of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(i) either (A) all Senior Notes theretofore authenticated and
delivered (other than (1) Senior Notes that have been mutilated,
destroyed, lost or stolen and that have been replaced or paid as
provided in Section 2.05) and (2) Senior Notes for whose payment
money has theretofore been deposited in trust or segregated and
held in trust by the Issuer and thereafter paid to the Persons
entitled thereto or discharged from such trust, as provided in
Section 3.03) have been delivered to the Indenture Trustee for
cancellation; or (B) all Senior Notes not theretofore delivered
to the Indenture Trustee for cancellation (1) have become due
and payable, (2) will become due and payable on the applicable
Senior Note Final Payment Date within one year or (3) are to be
called for redemption within one year under arrangements
satisfactory to the Indenture Trustee for the giving of notice
of redemption by the Indenture Trustee in the name, and at the
expense, of the Issuer, and the Issuer, in the case of clauses
(1), (2) or (3) above, has irrevocably deposited or caused to be
irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States
(that will mature prior to the date such amounts are payable),
in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Senior Notes
(including interest and any fees due and payable to the Owner
Trustee or the Indenture Trustee) not theretofore delivered to
the Indenture Trustee for cancellation, when due, to the
applicable Senior Note Final Payment Date for each Class, or to
the Redemption Date (if Senior Notes shall have been called for
redemption pursuant to Section 10.01), as the case may be;
(ii) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and
(iii) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel, each meeting the
applicable requirements of Section 11.01 and, subject to Section
11.02, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture have been complied with (and, in the case of an
Officer's Certificate, stating that the Rating Agency Condition
has been satisfied).
28
<PAGE> 35
Section 4.02. Application of Trust Money. All monies deposited with
the Indenture Trustee pursuant to Section 4.01 shall be held in trust and
applied by it, in accordance with the provisions of the Senior Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Senior Noteholders of the particular
Senior Notes for the payment or redemption of which such monies have been
deposited with the Indenture Trustee of all sums due and to become due thereon
for principal and interest. Such monies need not be segregated from other funds
except to the extent required herein or in the Administration Agreement or as
required by law.
Section 4.03. Repayment of Monies Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Senior Notes, all monies then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Senior
Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be
held and applied according to Section 3.03 and such Paying Agent shall
thereupon be released from all further liability with respect to such monies.
29
<PAGE> 36
ARTICLE FIVE
INDENTURE DEFAULT
Section 5.01. Indenture Defaults. Any one of the following events
(whatever the reason for such Indenture Default and whether it shall be
voluntary or involuntary or effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall constitute a default under this
Indenture (each, an "Indenture Default"):
(a) default in the payment of any interest on any Senior Note when the
same becomes due and payable, and such default shall continue for a period of
30 days or more;
(b) default in the payment of principal of any Senior Note at the
Senior Note Final Payment Date or the Redemption Date;
(c) the occurrence of a Program Operating Lease Default;
(d) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere in
this Section specifically dealt with), or any representation or warranty of the
Issuer made in this Indenture or in any certificate or other writing delivered
pursuant hereto or in connection herewith proving to have been incorrect in any
material respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or condition in
respect of which such misrepresentation or warranty was incorrect shall not
have been eliminated or otherwise cured, for a period of 30 days after there
shall have been given, by registered or certified mail, to the Issuer by the
Indenture Trustee or to the Issuer and the Indenture Trustee by Senior
Noteholders representing at least 25% of the Outstanding Amount, a written
notice specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder;
(e) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part
of the Trust Estate in an involuntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial part of
the Trust Estate, or ordering the winding up or liquidation of the Issuer's
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or
(f) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect or the consent by the Issuer to the entry of an order for
relief in an involuntary case under any such law, the consent by the Issuer to
the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Trust Estate, the making by the Issuer of any general
assignment for the benefit of creditors, the failure by the Issuer generally to
pay its debts as such debts become due or the taking of action by the Issuer in
furtherance of any of the foregoing.
30
<PAGE> 37
The Issuer shall deliver to the Indenture Trustee, each Rating Agency
and each Senior Noteholder within five days after the occurrence thereof
written notice in the form of an Officer's Certificate of any event that with
the giving of notice and the lapse of time would become an Indenture Default
under clauses (c), (d) or (e), its status and what action the Issuer is taking
or proposes to take with respect thereto.
Subject to the provisions herein relating to the duties of the
Indenture Trustee, if an Indenture Default occurs and is continuing, the
Indenture Trustee shall be under no obligation to exercise any of the rights or
powers under this Indenture at the request or direction of any Senior
Noteholder, if the Indenture Trustee reasonably believes that it will not be
adequately indemnified against the costs, expenses and liabilities that might
be incurred by it in complying with such request. Subject to such provisions
for indemnification and certain limitations contained herein, Senior
Noteholders holding not less than a majority of the Outstanding Amount shall
have the right to direct the time, method and place of conducting any
proceeding or any remedy available to the Indenture Trustee or exercising any
trust power conferred on the Indenture Trustee, and Senior Noteholders holding
not less than a majority of the Outstanding Amount may, in certain cases, waive
any default with respect thereto, except a default in the payment of principal
or interest or a default in respect of a covenant or provision of the Indenture
that cannot be modified without the waiver or consent of all of the holders of
the Outstanding Senior Notes.
Section 5.02. Acceleration of Maturity; Waiver of Indenture Default.
If an Indenture Default should occur and be continuing, the Indenture Trustee
or Senior Noteholders representing a majority of the Outstanding Amount may
declare the principal of the Senior Notes to be immediately due and payable.
Upon such declaration, the Indenture Trustee shall promptly provide written
notice to each Rating Agency. Such declaration may be rescinded by Senior
Noteholders holding a majority of the Outstanding Amount before a judgment or
decree for payment of the amount due has been obtained by the Indenture Trustee
if (a) the Issuer has deposited with the Indenture Trustee an amount sufficient
to pay (i) all interest on and principal of the Senior Notes as if the
Indenture Default giving rise to such declaration had not occurred and (ii) all
amounts advanced by the Indenture Trustee and its costs and expenses and (b)
all Indenture Defaults (other than the nonpayment of principal of the Senior
Notes that has become due solely by such acceleration) have been cured or
waived.
At any time prior to the declaration of the acceleration of the
maturity of the Senior Notes, Senior Noteholders holding not less than a
majority of the Outstanding Amount, by written notice to the Issuer and the
Indenture Trustee, may waive such Indenture Default and its consequences,
except a default (i) in payment of principal of or interest on the Senior Notes
or (ii) in respect of any covenant or provision in this Indenture that cannot
be modified or amended without the unanimous consent of the Senior Noteholders.
No such waiver shall affect any subsequent default or impair any right
consequent thereto.
If the Senior Notes have been declared due and payable following an
Indenture Default, the Indenture Trustee may institute proceedings to collect
amounts due, exercise remedies as a secured party (including foreclosure or
sale of the Trust Estate) or elect to maintain the Trust Estate and continue to
apply the proceeds from the Trust Estate as if there had been no declaration of
acceleration. Any sale of the Trust Estate by the Indenture Trustee will be
subject to the terms and conditions of Section 5.04.
31
<PAGE> 38
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that if there is a default in the payment of
(i) any interest on the Senior Notes when the same becomes due and payable, and
such default continues for a period of five days or (ii) the principal of the
Senior Notes at the Senior Note Final Payment Date or the Redemption Date, the
Issuer shall, upon demand of the Indenture Trustee, pay to the Indenture
Trustee, for the benefit of such Senior Noteholders, the entire amount then due
and payable on such Senior Notes for principal and interest, with interest on
the overdue principal, and, to the extent payment at such rate of interest
shall be legally enforceable, upon overdue installments of interest, at the
Overdue Interest Rate and in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents, attorneys and counsel.
(b) In case the Issuer shall fail forthwith to pay amounts described
in Section 5.03(a) upon demand, the Indenture Trustee, in its own name and as
trustee of an express trust, may institute a Proceeding for the collection of
the sums so due and unpaid, and may prosecute such Proceeding to judgment or
final decree, and may enforce the same against the Issuer or other obligor upon
such Senior Notes and collect in the manner provided by law out of the property
of the Issuer or other obligor upon such Senior Notes, wherever situated, the
monies adjudged or decreed to be payable.
(c) If an Indenture Default occurs and is continuing, the Indenture
Trustee may, in its discretion, proceed to protect and enforce its rights and
the rights of the Senior Noteholders, by such appropriate Proceedings as the
Indenture Trustee shall deem most effective to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Senior Notes or any Person having or claiming an
ownership interest in the Trust Estate, Proceedings under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer or its property
or such other obligor or Person, or in case of any other comparable judicial
Proceedings relative to the Issuer or other obligor upon the Senior Notes, or
to the creditors or property of the Issuer or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Senior Notes shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:
32
<PAGE> 39
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Senior
Notes and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for reasonable
compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances and disbursements made, by the
Indenture Trustee and each predecessor Indenture Trustee, except
as a result of negligence or bad faith) and of the Senior
Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Senior Noteholders in any election of a trustee, a
standby trustee or Person performing similar functions in any
such Proceedings; to collect and receive any monies or other
property payable or deliverable on any such claims and to
distribute all amounts received with respect to the claims of
the Senior Noteholders and the Indenture Trustee on their
behalf; and
(iii) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Senior Noteholders allowed in any
judicial proceedings relative to the Issuer, its creditors and
its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each Senior Noteholder to make
payments to the Indenture Trustee and, in the event the Indenture Trustee shall
consent to the making of payments directly to such Senior Noteholders, to pay
to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred and all advances and disbursements made by
the Indenture Trustee and each predecessor Indenture Trustee except as a result
of negligence or bad faith, and any other amounts due the Indenture Trustee
under Section 6.07.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Senior Noteholder any plan of reorganization, arrangement,
adjustment or composition affecting the Senior Notes or the rights of any
Senior Noteholder or to vote in respect of the claim of any Senior Noteholder
in any such proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under the Senior Notes, may be enforced by the Indenture Trustee without the
possession of the Senior Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
advances, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents, attorneys and
counsel shall be for the ratable benefit of the Senior Noteholders in respect
of which such judgment has been recovered.
33
<PAGE> 40
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Senior Noteholders, and it shall not be necessary to
make any Senior Noteholder a party to any such Proceedings.
Section 5.04. Remedies; Priorities.
(a) If an Indenture Default shall have occurred and be continuing, the
Indenture Trustee may do one or more of the following (subject to Sections 5.02
and 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on
the Senior Notes or under this Indenture with respect thereto,
whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon
such Senior Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights
and remedies of the Indenture Trustee and the Senior
Noteholders; and
(iv) subject to Section 5.17, after an acceleration of the maturity
of the Senior Notes pursuant to Section 5.02, sell the Trust
Estate or any portion thereof or rights or interest therein, at
one or more public or private sales called and conducted in any
manner permitted by law;
provided, however, that unless directed to sell the Trust Estate in accordance
with Section 9.02 of the Trust Agreement, the Indenture Trustee may not sell or
otherwise liquidate the Trust Estate following an Indenture Default, other than
an Indenture Default described in Section 5.01 (a) or (b), unless (A) Senior
Noteholders holding 100% of the Outstanding Amount consent thereto, (B) the
proceeds of such sale are sufficient to discharge in full all amounts then due
and unpaid upon all outstanding Securities (other than Transferor Trust
Certificate) or (C) the Indenture Trustee determines that the Trust Estate will
not continue to provide sufficient funds for the payment of principal of and
interest on the Senior Notes as they would have become due if the Senior Notes
had not been declared due and payable and the Indenture Trustee obtains the
consent of Senior Noteholders holding not less than 66?% of the Outstanding
Amount; and provided further, that the Indenture Trustee may not sell the Trust
Estate, other than a sale resulting from the bankruptcy, insolvency or
termination of the Transferor pursuant to Section 9.02 of the Trust Agreement,
unless it shall first have obtained an Opinion of Counsel that such sale will
not cause the Origination Trust or an interest therein or portion thereof to be
classified as an association (or a publicly traded partnership) taxable as a
corporation for federal income tax purposes. In determining such sufficiency or
insufficiency with respect to clauses (B) and (C) of the preceding sentence,
the Indenture Trustee may but need not obtain (at the expense of the Issuer)
and rely upon an opinion of an Independent investment banking or accounting
firm of national reputation as to the feasibility of such proposed action and
as to the sufficiency of the Trust Estate for such purpose.
34
<PAGE> 41
(b) If the Indenture Trustee collects any money or property pursuant
to this Article Five upon sale of the Trust Estate, it shall pay out such money
or property held as Collateral (including available monies on deposit in the
Reserve Fund) and deposited in the Note Distribution Account pursuant to
Section 12.05(b) of the SUBI Trust Agreement after giving effect to the
distributions set forth in Section 12.05(b) of the SUBI Trust Agreement, for
the benefit of the Securityholders in the following order:
(i) to Senior Noteholders for the payments of interest which is due
and unpaid on the Senior Notes (including any overdue interest,
and to the extent permitted under applicable law, interest on
any overdue interest at the Overdue Interest Rate) in respect of
which or for the benefit of which such money has been collected;
(ii) to the Subordinated Noteholder (which amounts shall be deposited
into the Reserve Fund), for the payment of interest that is due
and unpaid (including any overdue interest and, to the extent
permitted under applicable law, interest on any overdue interest
at the Subordinated Note Rate) on the Subordinated Notes;
(iii) to the Certificate Distribution Account for the payment of
interest which is due and unpaid (including any overdue interest
and, to the extent permitted under applicable law, interest on
any overdue interest at the Certificate Rate) on the
Certificates;
(iv) to the Senior Noteholders in payment of the principal amount due
and unpaid on the Senior Notes;
(v) to the Subordinated Noteholder (which amounts shall be deposited
into the Reserve Fund) and to the Certificate Distribution
Account for distribution to the Trust Certificateholders, for
amounts due and unpaid in respect of the principal amount due
and unpaid on the Subordinated Notes and the Trust Certificates,
respectively, ratably, without preference or priority of any
kind, according to the amounts due and payable to the
Subordinated Noteholder and the Trust Certificateholders;
(vi) to the Transferor, in its capacity as the Subordinated
Noteholder, up to the amount deposited into the Reserve Fund in
respect of the Subordinated Notes on or prior to the date of the
preceding distributions; and
(vii) any remaining amounts, shall be paid to the Transferor.
35
<PAGE> 42
(c) The Indenture Trustee may fix a record date and payment date for
any payment to Senior Noteholders pursuant to this Section. At least 15 days
before such record date, the Issuer shall mail to each Senior Noteholder and
the Indenture Trustee a notice that states the record date, the payment date
and the amount to be paid.
Section 5.05. Optional Preservation of the 1999-A SUBI Assets. If the
Senior Notes have been declared to be due and payable under Section 5.02
following an Indenture Default and such declaration and its consequences have
not been rescinded and annulled, the Indenture Trustee may, unless directed to
sell pursuant to Section 9.02 of the Trust Agreement, but need not, elect to
maintain possession of the Trust Estate and continue to apply the proceeds
thereof in accordance with Section 3.01 and 8.04. It is the intent of the
parties hereto and the Senior Noteholders that there be at all times sufficient
funds for the payment of principal of and interest on the Senior Notes, and the
Indenture Trustee shall take such intent into account when determining whether
or not to maintain possession of the Trust Estate. In determining whether to
maintain possession of the Trust Estate, the Indenture Trustee may but need not
obtain (at the expense of the Issuer) and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose. Notwithstanding the foregoing provisions of this
Section and Section 5.04, the Indenture Trustee shall sell the Trust Estate if
so instructed by the Owner Trustee pursuant to Section 9.02 of the Trust
Agreement, and the proceeds of such sale distributed in accordance with Section
12.05(b) of the SUBI Trust Agreement.
Section 5.06. Limitation of Suits.
(a) No holder of any Senior Note shall have any right to institute any
Proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless: (i) such Senior Noteholder previously has given to the Indenture
Trustee written notice of a continuing Indenture Default, (ii) Senior
Noteholders holding not less than 25% of the Outstanding Amount have made
written request to the Indenture Trustee to institute such Proceeding in
respect of such Indenture Default in its own name as Indenture Trustee, (iii)
such Senior Noteholder has offered the Indenture Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in complying with
such request, (iv) the Indenture Trustee has for 60 days failed to institute
such Proceedings and (v) no direction inconsistent with such written request
has been given to the Indenture Trustee during such 60 day period by Senior
Noteholders holding a majority of the Outstanding Amount.
No Senior Noteholder or group of Senior Noteholders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Senior
Noteholders or to obtain or to seek to obtain priority or preference over any
other Senior Noteholder or to enforce any right under this Indenture, except in
the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Senior
Noteholders, each representing less than a majority of the Outstanding Amount,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
36
<PAGE> 43
(b) No Senior Noteholder shall have any right to vote except as
provided pursuant to this Indenture and the Senior Notes, nor any right in any
manner to otherwise control the operation and management of the Issuer.
However, in connection with any action as to which Senior Noteholders are
entitled to vote or consent under this Indenture and the Senior Notes, the
Issuer may set a record date for purposes of determining the identity of
Noteholders entitled to vote or consent in accordance with TIA Section 316(c).
Section 5.07. Unconditional Rights of Senior Noteholders to Receive
Principal and Interest. Notwithstanding any other provision in this Indenture,
any Senior Noteholder shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on, if any,
such Senior Note on or after the respective due dates thereof expressed in such
Senior Note or this Indenture (or, in the case of redemption, on or after the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Senior
Noteholder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Senior Noteholder has instituted any Proceeding to enforce any
right or remedy under this Indenture and such Proceeding has been discontinued
or abandoned for any reason or has been determined adversely to the Indenture
Trustee or such Senior Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Senior Noteholders shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the Senior Noteholders shall continue as though no such
Proceeding had been instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or the Senior
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law, in equity or otherwise. The assertion or employment of any
right or remedy hereunder or otherwise shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee or any Senior Noteholder to exercise any right or remedy
accruing upon any Default or Indenture Default shall impair any such right or
remedy or constitute a waiver of any such Default or Indenture Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Indenture Trustee or the Senior Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or by
the Senior Noteholders, as the case may be.
Section 5.11. Control by Senior Noteholders. Subject to the provisions
of Sections 5.06, 6.02(d) and 6.02(e), Senior Noteholders holding not less than
a majority of the Outstanding Amount shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Senior Notes or with respect to the
exercise of any trust or power conferred on the Indenture Trustee, provided
that:
(a) such direction shall not be in conflict with any rule of law or
this Indenture;
37
<PAGE> 44
(b) subject to Section 5.04, any direction to the Indenture Trustee
to, sell or liquidate the Trust Estate shall be made by Senior Noteholders
holding not less than 100% of the Outstanding Amount;
(c) if the conditions set forth in Section 5.05 have been satisfied
and the Indenture Trustee elects to retain the Trust Estate pursuant to such
Section, and except in the case of a sale of the Trust Estate pursuant to
Section 9.02 of the Trust Agreement, then any direction to the Indenture
Trustee by Senior Noteholders holding less than 100% of the Outstanding Amount
to sell or liquidate the Trust Estate shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Senior Noteholders set forth in this
Section, subject to Section 6.01, the Indenture Trustee need not take any
action it determines might expose it to personal liability or might materially
adversely affect or unduly prejudice the rights of any Senior Noteholders not
consenting to such action.
Section 5.12. Waiver of Past Defaults. Prior to the acceleration of
the maturity of the Senior Notes as provided in Section 5.02, Senior
Noteholders holding not less than a majority of the Outstanding Amount may
waive any past Indenture Default and its consequences except an Indenture
Default (i) in payment of principal of or interest on the Senior Notes or (ii)
in respect of a covenant or provision hereof that cannot be modified or amended
without the consent of each Senior Noteholder. In the case of any such waiver,
the Issuer, the Indenture Trustee and the Senior Noteholders shall be restored
to their former positions and rights hereunder, respectively, but no such
waiver shall extend to any subsequent or other Indenture Default or impair any
right consequent thereto.
Upon any such waiver, such Indenture Default shall cease to exist and
be deemed to have been cured and not to have occurred, and any Indenture
Default arising therefrom shall be deemed to have been cured and not to have
occurred for every purpose of this Indenture, but no such waiver shall extend
to any subsequent or other Indenture Default or impair any right consequent
thereto.
Section 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Senior Noteholder by such Senior Noteholder's acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Indenture Trustee for any action taken,
suffered or omitted by it as Indenture Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant, but the provisions of this Section shall not apply to (i) any suit
instituted by the Indenture Trustee, (ii) any suit instituted by any Senior
Noteholder or group of Senior Noteholders, in each case holding in the
aggregate more than 10% of the Outstanding Amount or (iii) any suit instituted
by any Senior Noteholder for the enforcement of the payment of principal of or
interest on any Senior Note on or after the related due dates expressed in such
Senior Note and in this Indenture (or, in the case of redemption, on or after
the Redemption Date).
38
<PAGE> 45
Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture, and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted
to the Indenture Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section 5.15. Action on Senior Notes. The Indenture Trustee's right to
seek and recover judgment on the Senior Notes or under this Indenture shall not
be affected by the seeking, obtaining or application of any other relief under
or with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Senior Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of
the Trust Estate or upon any of the assets of the Issuer. Any money or property
collected by the Indenture Trustee shall be applied in accordance with Section
5.04(b).
Section 5.16. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee to do so,
the Issuer shall take all such lawful action as the Indenture Trustee may
request to compel or secure the performance and observance by the Transferor
and the Administrative Agent, as applicable, of each of their obligations to
the Issuer under or in connection with the Program Operating Lease and the
Administration Agreement, respectively, in accordance with the terms thereof,
and to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with each such agreement to the
extent and in the manner directed by the Indenture Trustee, including the
transmission of notices of default on the part of the Administrative Agent
thereunder and the institution of legal or administrative actions or
proceedings to compel or secure performance by the Administrative Agent of its
obligations under the Administration Agreement. Upon the occurrence of a
Program Operating Lease Default, the Indenture Trustee, as assignee of the
rights of the Issuer in the Program Operating Lease pursuant to the Indenture
Trustee's security interest in the Trust Estate, shall be entitled to terminate
the Program Operating Lease. Upon such termination, the Issuer shall directly
receive all distributions with respect to, or shall have the right to sell, the
99% 1999-A Vehicle SUBI Certificate and to apply the funds received in respect
thereof to pay interest on and principal of the Securities.
39
<PAGE> 46
(b) If an Indenture Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of Senior
Noteholders holding not less than a majority of the Outstanding Amount, shall,
exercise all rights, remedies, powers, privileges and claims of the Issuer
against the Transferor, the Origination Trustee and the Administrative Agent
under or in connection with the Program Operating Lease, the Administration
Agreement and the Administration Supplement, respectively, including the right
or power to take any action to compel or secure performance or observance by
the Administrative Agent of its obligations to the Issuer thereunder and to
give any consent, request, notice, direction, approval, extension or waiver
under the Administration Agreement, and any right of the Issuer to take such
action shall be suspended.
Section 5.17. Sale of Trust Estate. If the Indenture Trustee acts to
sell the Trust Estate or any part thereof, pursuant to Section 5.04(a), the
Indenture Trustee shall publish a notice in an Authorized Newspaper stating
that the Indenture Trustee intends to effect such a sale in a commercially
reasonable manner and on commercially reasonable terms, which shall include the
solicitation of competitive bids. Following such publication, the Indenture
Trustee shall, unless otherwise prohibited by applicable law from any such
action, sell the Trust Estate or any part thereof, in such manner and on such
terms as provided above to the highest bidder, provided, however, that the
Indenture Trustee may from time to time postpone any sale by public
announcement made at the time and place of such sale. The Indenture Trustee
shall give notice to the Transferor and Administrative Agent of any proposed
sale, and the Transferor and Administrative Agent shall be permitted to bid for
the Trust Estate at any such sale. The Indenture Trustee may obtain a prior
determination from a conservator, receiver or trustee in bankruptcy of the
Issuer that the terms and manner of any proposed sale are commercially
reasonable. The power to effect any sale of any portion of the Trust Estate
pursuant to Section 5.04 and this Section 5.17 shall not be exhausted by any
one or more sales as to any portion of the Trust Estate remaining unsold, but
shall continue unimpaired until the entire Trust Estate shall has been sold or
all amounts payable on the Senior Notes shall have been paid.
40
<PAGE> 47
ARTICLE SIX
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee.
(a) If an Indenture Default has occurred and is continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and in the same degree of care and skill in their exercise as a
prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except during the continuance of an Indenture Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Indenture Trustee and conforming to
the requirements of this Indenture; however, the Indenture
Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this
Indenture and the other Basic Documents to which the Indenture
Trustee is a party.
(c) The Indenture Trustee shall not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful,
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b);
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it
is proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b) and (c).
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
41
<PAGE> 48
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms
of this Indenture or the Administration Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayments of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section.
(i) The Indenture Trustee shall not be deemed to have knowledge of any
Indenture Default or other event unless a Responsible Officer has actual
knowledge thereof or has received written notice thereof in accordance with the
provisions of this Indenture.
(j) Nothing contained herein shall be deemed to authorize the
Indenture Trustee to engage in any business operations or any activities other
than those set forth in this Indenture. Specifically, the Indenture Trustee
shall have no authority to engage in any business operations, acquire any
assets other than those specifically included in the Trust Estate under this
Indenture or otherwise vary the assets held by the Issuer. Similarly, the
Indenture Trustee shall have no discretionary duties other than performing
those ministerial acts set forth above necessary to accomplish the purpose of
the Issuer as set forth in this Indenture.
Section 6.02. Rights of Indenture Trustee.
(a) Except as provided by the second succeeding sentence, the
Indenture Trustee may conclusively rely and shall be protected in acting upon
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, note, direction,
demand, election or other paper or document believed by it to be genuine and to
have been signed or presented by the proper person. The Indenture Trustee need
not investigate any fact or matter stated in the document. Notwithstanding the
foregoing, the Indenture Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Indenture Trustee that shall be specifically
required to be furnished pursuant to any provision of this Indenture, shall
examine them to determine whether they comply as to form to the requirements of
this Indenture.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate (with respect to factual matters) or an
Opinion of Counsel, as applicable. The Indenture Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, the Administrator, any co-trustee or separate trustee appointed
in accordance with the provisions of Section 6.10 or any other such agent,
attorney, custodian or nominee appointed with due care by it hereunder.
42
<PAGE> 49
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice of
such counsel or any Opinion of Counsel with respect to legal matters relating
to this Indenture and the Senior Notes shall be full and complete authorization
and protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture or to institute, conduct
or defend any litigation under this Indenture or in relation to this Indenture
or to honor the request or direction of any of the Senior Noteholders pursuant
to this Indenture unless such Senior Noteholders shall have offered to the
Indenture Trustee reasonable security or indemnity against the reasonable
costs, expenses, disbursements, advances and liabilities that might be incurred
by it, its agents and its counsel in compliance with such request or direction;
provided, however, that the Indenture Trustee shall, upon the occurrence of an
Event of Default (that has not been cured), exercise the rights and powers
vested in it by this Indenture with reasonable care and skill.
(g) The Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the holders of
Senior Notes evidencing not less than 25% of the Outstanding Amount; provided,
however, that if the payment within a reasonable time to the Indenture Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Indenture Trustee, not
reasonably assured to the Indenture Trustee by the security afforded to it by
the terms of this Indenture, the Indenture Trustee may require reasonable
indemnity against such cost, expense or liability as a condition to so
proceeding. The reasonable expense of each such investigation shall be paid by
the Person making such request, or, if paid by the Indenture Trustee, shall be
reimbursed by the Person making such request upon demand.
(h) Any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request.
(i) The Indenture Trustee shall, for so long as any Senior Notes are
outstanding, be entitled to exercise all of the rights and powers of a
Beneficiary under the Basic Documents.
Section 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Senior Notes and may otherwise deal with the Issuer or its Affiliates with
the same rights it would have if it were not Indenture Trustee. Any Paying
Agent, Senior Note Registrar, co-registrar, co-paying agent, co-trustee or
separate trustee may do the same with like rights. The Indenture Trustee must,
however, comply with Section 6.11.
43
<PAGE> 50
Section 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture, the Trust Estate or the Senior Notes, shall not be
accountable for the Issuer's use of the proceeds from the Senior Notes and
shall not be responsible for any statement in the Indenture or in any document
issued in connection with the sale of the Senior Notes or in the Senior Notes,
all of which shall be taken as the statements of the Issuer, other than the
Indenture Trustee's certificate of authentication.
Section 6.05. Notice of Defaults. If a Default occurs and is
continuing, and if it is known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail to each Senior Noteholder and each
Rating Agency notice of such Indenture Default within 90 days after it occurs.
Except in the case of a Default with respect to payment of principal of or
interest on any Senior Note (including payments pursuant to the redemption of
Senior Notes), the Indenture Trustee may withhold such notice if and so long as
a committee of its Responsible Officers in good faith determines that
withholding such notice is in the interests of the Senior Noteholders;
provided, however, that in the case of any Indenture Default of the character
specified in Section 5.01(e), no such notice shall be given until at least 30
days after the occurrence thereof.
Section 6.06. Reports by Indenture Trustee to Senior Noteholders. The
Indenture Trustee, at the expense of the Issuer, shall deliver to each Senior
Noteholder, not later than the latest date permitted by law, such information
as may be reasonably requested (and reasonably available to the Indenture
Trustee) to enable such holder to prepare its federal and state income tax
returns.
Section 6.07. Compensation and Indemnity. The Administrative Agent
shall, or shall cause the Administrator to, (i) pay to the Indenture Trustee
from time to time reasonable compensation for its services, (ii) reimburse the
Indenture Trustee for all reasonable expenses, advances and disbursements
reasonably incurred and (iii) indemnify the Indenture Trustee for, and hold it
harmless against, any and all loss, liability or expense (including reasonable
attorneys' fees) incurred by it in connection with the administration of the
Trust or the performance of its duties. The Indenture Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Indenture Trustee shall notify the Issuer and the Administrator
promptly of any claim for which it may seek indemnity. Failure by the Indenture
Trustee to so notify the Issuer and the Administrator shall not relieve the
Issuer or the Administrator of its obligations hereunder. The Issuer shall, or
shall cause the Administrator to, defend any such claim, and the Indenture
Trustee may have separate counsel and the Issuer shall, or shall cause the
Administrator to, pay the fees and expenses of such counsel. The Indenture
Trustee shall not be indemnified by the Administrative Agent against any loss,
liability or expense incurred by it through its own willful misconduct,
negligence or bad faith, except that the Indenture Trustee shall not be liable
(i) for any error of judgment made by it in good faith unless it is proved that
the Indenture Trustee was negligent in ascertaining the pertinent facts, (ii)
with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it from the Senior Noteholders in
accordance with the terms of this Indenture and (iii) for interest on any money
received by it except as the Indenture Trustee and the Issuer may agree in
writing. The Indenture Trustee shall not be deemed to have knowledge of any
event unless an officer of the Indenture Trustee has actual knowledge thereof
or has received written notice thereof.
44
<PAGE> 51
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default set forth in Section
5.01(e) or (f) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or similar law.
Section 6.08. Replacement of Indenture Trustee. Senior Noteholders
holding not less than a majority of the Outstanding Amount may remove the
Indenture Trustee without cause by so notifying the Indenture Trustee and the
Issuer, and following such removal may appoint a successor Indenture Trustee.
The Issuer shall give prompt written notice to each Rating Agency of such
removal. The Indenture Trustee may resign at any time by so notifying the
Issuer, the Administrative Agent and each Rating Agency. The Issuer shall
remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) a court having jurisdiction in the premises in respect of the
Indenture Trustee in an involuntary case or proceeding under
federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, shall have entered
a decree or order granting relief or appointing a receiver,
liquidator, assignee, custodian, trustee, conservator,
sequestrator (or similar official) for the Indenture Trustee or
for any substantial part of the Indenture Trustee's property, or
ordering the winding-up or liquidation of the Indenture
Trustee's affairs, provided any such decree or order shall have
continued unstayed and in effect for a period of 30 consecutive
days;
(iii) the Indenture Trustee commences a voluntary case under any
federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or consents to the
appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, conservator, sequestrator or other
similar official for the Indenture Trustee or for any
substantial part of the Indenture Trustee's property, or makes
any assignment for the benefit of creditors or fails generally
to pay its debts as such debts become due or takes any corporate
action in furtherance of any of the foregoing; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
Upon the resignation or required removal of the Indenture Trustee, or
the failure of the Senior Noteholders to appoint a successor Indenture Trustee
following the removal without cause of the Indenture Trustee (the Indenture
Trustee in any such event being referred to herein as the retiring Indenture
Trustee), the Issuer shall be required promptly to appoint a successor
Indenture Trustee. Any successor Indenture Trustee must at all times have a
combined capital and surplus of at least $50,000,000, a long-term debt rating
of "A" or better by or is otherwise acceptable to, each Rating Agency and
satisfy the requirements of Section 310(a) of the TIA. Additionally, prior to
the appointment of any successor Indenture Trustee, the Rating Agency Condition
must be satisfied with respect to such successor Indenture Trustee.
45
<PAGE> 52
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Issuer. Thereupon
the resignation or removal of the retiring Indenture Trustee shall become
effective and the successor Indenture Trustee, without any further act, deed or
conveyance, shall have all the rights, powers and duties of the Indenture
Trustee under this Indenture, subject to satisfaction of the Rating Agency
Condition. The successor Indenture Trustee shall mail a notice of its
succession to Senior Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
If a successor Indenture Trustee does not take office within 45 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or Senior Noteholders holding not less than a
majority of the Outstanding Amount may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Senior
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Any resignation or removal of the Indenture Trustee and appointment of
a successor Indenture Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Indenture Trustee pursuant to this Section and payment of all fees and expenses
owed to the outgoing Indenture Trustee. Notwithstanding the replacement of the
Indenture Trustee pursuant to this Section, the retiring Indenture Trustee
shall be entitled to payment or reimbursement of such amounts as such Person is
entitled pursuant to Section 6.07.
Section 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to another corporation
or depository institution the resulting, surviving or transferee corporation,
without any further act, shall be the successor Indenture Trustee; provided,
that such corporation or depository institution shall be otherwise qualified
and eligible under Section 6.11. The Indenture Trustee shall provide each
Rating Agency prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created
by this Indenture, the Senior Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee and deliver such
Senior Notes so authenticated, and in case at that time the Senior Notes shall
not have been authenticated, any successor to the Indenture Trustee may
authenticate such Senior Notes either in the name of any predecessor hereunder
or in the name of the successor to the Indenture Trustee, and in all such cases
such certificates shall have the full force that it is anywhere in the Senior
Notes or in this Indenture provided that the certificate of the Indenture
Trustee shall have.
46
<PAGE> 53
Section 6.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee and the Administrator acting jointly shall have the power and may
execute and deliver all instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Collateral, and to vest in such Person or Persons, in such
capacity and for the benefit of the Senior Noteholders, such title to the Trust
Estate or any part hereof and, subject to the other provisions of this Section,
such powers, duties, obligations, rights and trusts as the Indenture Trustee
and the Administrator may consider necessary or desirable. If the Administrator
shall not have joined in such appointment within 15 days after it received a
request that it so join, the Indenture Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.11 and no notice to Senior Noteholders of the appointment of any co-trustee
or separate trustee shall be required under Section 6.08.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such
separate trustee or co-trustee jointly (it being intended that
such separate trustee or co-trustee is not authorized to act
separately without the Indenture Trustee joining in such act),
except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed, the
Indenture Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Collateral or
any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Indenture Trustee;
(ii) no separate trustee or co-trustee hereunder shall be personally
liable by reason of any act or omission of any other trustee
hereunder; and
(iii) the Indenture Trustee and the Administrator may at any time
accept the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then-separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Indenture and the conditions of this Article. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture and specifically including
every provision of this Indenture relating to the conduct of, affecting the
liability of or affording protection to the Indenture Trustee. Every such
instrument shall be filed with the Indenture Trustee and a copy thereof given
to the Administrator.
47
<PAGE> 54
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect
of this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, then
all of its estates, properties, rights, remedies and trusts shall vest in and
be exercised by the Indenture Trustee to the extent permitted by law, without
the appointment of a new or successor trustee. Notwithstanding anything to the
contrary in this Indenture, the appointment of any separate trustee or
co-trustee shall not relieve the Indenture Trustee of its obligations and
duties under this Indenture.
Section 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of Section 310(a) of the TIA and
shall in addition have a combined capital and surplus of at least $50,000,000
(as set forth in its most recent published annual report of condition) and a
long-term debt rating of "A" or better by, or be otherwise acceptable to, each
Rating Agency. The Indenture Trustee shall satisfy the requirements of Section
310(b) of the TIA. The Transferor, the Administrator, the Administrative Agent
and their respective Affiliates may maintain normal commercial banking
relationships with the Indenture Trustee and its Affiliates, but neither the
Issuer nor any Affiliate of the Issuer may serve as Indenture Trustee.
Section 6.12. Trustee as Holder of 99% 1999-A Vehicle SUBI
Certificate. So long as any Senior Notes are Outstanding, to the extent that
the Owner Trustee or Issuer has rights as a Holder of the 99% 1999-A Vehicle
SUBI Certificate, including rights to distributions and notice, or is entitled
to consent to any actions taken by the Transferor, the Owner Trustee or Issuer
may initiate such action or grant such consent only with consent of the
Indenture Trustee. To the extent that the Indenture Trustee has rights as a
Holder of the 99% 1999-A Vehicle SUBI Certificate or has the right to consent
or withhold consent with respect to actions taken by the Transferor, the Owner
Trustee or Issuer, such rights shall be exercised or consent granted (or
withheld) upon the written direction of holders of a majority of the
Outstanding Amount; provided, however, that subject to Section 3.07, any
direction to the Indenture Trustee to remove or replace the Administrative
Agent or Maintenance Provider upon an Administrative Agent Default or a
Maintenance Provider Default, as the case may be, shall be made by Senior
Noteholders holding not less than 66?% of the Outstanding Amount and with
respect to Section 11.15, such direction shall require the written direction of
Senior Noteholders holding 100% of the Outstanding Amount.
Section 6.13. Representations and Warranties of Indenture Trustee. The
Indenture Trustee hereby makes the following representations and warranties on
which the Issuer and Senior Noteholders shall rely:
(i) the Indenture Trustee is a national banking association duly
organized, validly existing and in good standing under the laws
of the United States; and
48
<PAGE> 55
(ii) the Indenture Trustee has full power, authority and legal right
to execute, deliver, and, perform this Indenture and shall have
taken all necessary action to authorize the execution, delivery
and performance by it of this Indenture.
Section 6.14. Furnishing of Documents. The Indenture Trustee shall
furnish to any Senior Noteholder promptly upon receipt of a written request by
such Senior Noteholder (at the expense of the requesting Senior Noteholder)
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates and any other instruments furnished to the Indenture Trustee under
the Basic Documents.
Section 6.15. Preferential Collection of Claims Against the Issuer.
The Indenture Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). Any 1999-A Indenture
Trustee who has resigned or been removed shall be subject to TIA Section 311(a)
to the extent indicated therein.
49
<PAGE> 56
ARTICLE SEVEN
SENIOR NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer to Furnish Indenture Trustee Senior Noteholder
Names and Addresses. The Issuer shall furnish or cause to be furnished to the
Indenture Trustee (i) not more than five days after each Record Date a list, in
such form as the Indenture Trustee may reasonably require, of the names and
addresses of the Senior Noteholders as of such Record Date and (ii) at such
other times as the Indenture Trustee may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than ten days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the
Senior Note Registrar or the Senior Notes are issued as Book-Entry Notes, no
such list shall be required to be furnished to the Indenture Trustee.
Section 7.02. Preservation of Information; Communications to Senior
Noteholders.
(a) The Indenture Trustee shall preserve in as current a form as is
reasonably practicable the names and addresses of the Senior Noteholders
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Senior Noteholders
received by the Indenture Trustee in its capacity as Senior Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in Section
7.01 upon receipt of a new list so furnished.
(b) The Senior Noteholders may communicate pursuant to TIA Section
312(b) with other Senior Noteholders regarding their rights under this
Indenture or under the Senior Notes.
(c) The Issuer, the Indenture Trustee and the Senior Note Registrar
shall have the protection of TIA Section 312(c).
Section 7.03. Reports by Indenture Trustee. If required by TIA ss.
313(a), within 60 days after each [_______] 15, beginning with [_______] 15,
2000, the Indenture Trustee shall mail to each Senior Noteholder as required by
TIA ss. 313(c) a brief report dated as of such date that complies with TIA ss.
313(a). The Indenture Trustee also shall comply with TIA ss. 313(b). A copy of
each such report, at the time of its mailing to the Senior Noteholders, shall
also be filed by the Indenture Trustee with the Commission.
50
<PAGE> 57
ARTICLE EIGHT
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such money received by it as provided in this
Indenture. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Trust Estate, the Indenture Trustee may take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate Proceedings. Any such
action shall be without prejudice to any right to claim an Indenture Default
under this Indenture and any right to proceed thereafter as provided in Article
Five.
Section 8.02. Accounts.
(a) Pursuant to Section 5.01 of the Trust Agreement, there has been
established and there shall be maintained an Eligible Account (initially at
U.S. Bank National Association) in the name of the Indenture Trustee until the
Outstanding Amount is reduced to zero, and thereafter, in the name of the Owner
Trustee, which is designated as the "Reserve Fund." The Reserve Fund shall be
held for the benefit of the Securityholders, and shall bear a designation
clearly indicating that the funds on deposit therein are held for the benefit
of the Securityholders. The Reserve Fund shall be under the sole dominion and
control of the Indenture Trustee until the Outstanding Amount has been reduced
to zero, and thereafter under the sole dominion and control of the Owner
Trustee.
(b) The Transferor shall, prior to the Closing Date, establish and
maintain an Eligible Account in the name of the Indenture Trustee on behalf of
the Senior Noteholders, which shall be designated as the "Note Distribution
Account". The Note Distribution Account shall be held in trust for the benefit
of the Senior Noteholders. The Note Distribution Account shall be under the
sole dominion and control of the Indenture Trustee.
(c) All monies deposited from time to time in the Accounts pursuant to
this Indenture or the Administration Supplement shall be held by the Indenture
Trustee as part of the Collateral and shall be applied to the purposes herein
provided. If any Account shall cease to be an Eligible Account, the Indenture
Trustee, until the Outstanding Amount has been reduced to zero, and thereafter
with respect to the Reserve Fund, the Owner Trustee shall, as necessary, assist
the Administrative Agent in causing each Account to be moved to an institution
at which it shall be an Eligible Account.
Section 8.03. Payment Date Certificate.
(a) On the second Business Day preceding each Payment Date prior to
11:00 a.m., New York City time, the Issuer shall cause the Administrative
Agent, to deliver to the Indenture Trustee, the Owner Trustee and each Paying
Agent hereunder or under the Trust Agreement, a certificate (the "Payment Date
Certificate") including, among other things, the following information with
respect to such Payment Date and the related Collection Period and Accrual
Period:
51
<PAGE> 58
(i) SUBI Collections for such Collection Period and the amounts
allocable to the 99% interest represented by the 99% 1999-A SUBI
Certificates and the 1% interest represented by the 1% 1999-A
SUBI Certificates;
(ii) Available Funds, including amounts with respect to each of items
(i) through (iv) of the definition thereof;
(iii) the amount of interest accrued during such Accrual Period on
each Class of the Senior Notes;
(iv) the amount of interest accrued during such Accrual Period on the
Subordinated Notes;
(v) the amount of interest accrued during such Accrual Period on the
Certificate Balance (stated separately for the Transferor Trust
Certificate);
(vi) Class A-1 Note Balance, the Class A-2 Note Balance, the Class
A-3 Note Balance, the Class A-4 Note Balance, the Class A-5 Note
Balance, the Outstanding Amount (as defined in the Trust
Agreement) of the Subordinated Notes and the Certificate Balance,
in each case on the day immediately preceding such Payment Date;
(vii) the aggregate amount of SUBI Collections deposited into the Note
Distribution Account and the Certificate Distribution Account,
respectively;
(viii) (A) the amount on deposit in the Reserve Fund and the Reserve
Fund Requirement, each as of the beginning and end of the
related Collection Period and as of the previous Payment Date,
(B) the Reserve Fund Deposit Amount, if any, (C) the Reserve
Fund Draw Amount, if any, (D) the balance on deposit in the
Reserve Fund on such Payment Date after giving effect to
withdrawals therefrom and deposits thereto in respect of such
Payment Date and (E) the change in such balance from the
immediately preceding Payment Date;
(ix) the Senior Note Distribution Amount for each Class of the Senior
Notes, the Certificate Distribution Amount and the amount
allocable to interest for each;
(x) the Quarterly Principal Distributable Amount, the Optimal
Principal Distributable Amount and any Principal Shortfall
Amount for each Class of the Senior Notes, the Subordinated
Notes and the Trust Certificates;
(xi) the Note Factor and Certificate Factor for each Class of the
Senior Notes and the Trust Certificates (other than the
Transferor Trust Certificate), respectively;
52
<PAGE> 59
(xii) the aggregate amount of Residual Value Losses and Residual Value
Surplus for such Collection Period, the amount on deposit in the
Residual Value Surplus Account and the Residual Value Surplus
Draw Amount, if any, included in Available Funds (after giving
effect to the distribution of the Retained Certificate
Distribution Amount);
(xiii) the amount of Special Event Purchases made during such
Collection Period and the aggregate Securitization Values as of
the Cutoff Date of all Specified Leases relating to Special
Event Purchases made during the related calendar year or since
the Closing Date;
(xiv) the amount of Sales Proceeds Advances and Financial Component
Advances included in Available Funds;
(xv) any Payment Date Advance Reimbursement for such Accrual Period;
(xvi) amounts released to the Transferor, as Subordinated Noteholder
and as holder of the Transferor Trust Certificate; and
(xvii) the Administration Fee for such Collection Period.
Each amount set forth pursuant to clauses (iii), (iv), (v), (vi), (ix) and (xi)
above shall be expressed in the aggregate and as a dollar amount per $1,000 of
original principal balance of a Senior Note, Subordinated Note or Trust
Certificate, as applicable.
(b) The Indenture Trustee shall have no duty or obligation to verify
or confirm the accuracy of any of the information or numbers set forth in the
Payment Date Certificate delivered to the Indenture Trustee in accordance with
this Section, and the Indenture Trustee shall be fully protected in relying
upon such Payment Date Certificate.
Section 8.04. Disbursement of Funds.
(a) On each Payment Date, prior to 11:00 a.m., New York City time, the
Origination Trustee (acting through the Trust Agent) shall, in accordance with
the related Payment Date Certificate and pursuant to the instructions of the
Administrative Agent, transfer from the 1999-A SUBI Collection Account all
Securityholder Available Funds and apply such amount, in accordance with the
following priorities:
(i) to the Note Distribution Account, for payment to each respective
Class of Senior Noteholders, an amount equal to the interest
accrued at the applicable Interest Rate for such Class of Senior
Notes during the related Accrual Period on the applicable
Outstanding Amount for such Class (and, to the extent permitted
by applicable law, interest on any overdue interest at the
Overdue Interest Rate);
(ii) to the Reserve Fund, an amount equal to the interest accrued at
the Subordinated Note Rate during the related Accrual Period on
the outstanding Subordinated Notes (and, to the extent permitted
by applicable law, interest on any overdue interest at the
Subordinated Note Rate);
53
<PAGE> 60
(iii) to the Certificate Distribution Account, an amount equal to the
interest accrued on the Certificate Balance at the Certificate
Rate (and, to the extent permitted by applicable law, interest
on any overdue interest at the Certificate Rate);
(iv) to the related Distribution Account or, in the case of the
Subordinated Notes, to the Reserve Fund, as payments of
principal, the Quarterly Principal Distributable Amount
attributable to each Class of the Senior Notes, the Trust
Certificates and the Subordinated Notes, in the following order
of priority:
(A) on any Payment Date (so long as the maturity of the Senior
Notes has not been accelerated pursuant to Section 5.02), to
each Class of the Senior Notes, the Subordinated Notes and the
Trust Certificates, sequentially:
1) to each Class of the Senior Noteholders sequentially, so
that no principal will be paid on any Class of Senior Notes until
each Class of Senior Notes with a lower numerical designation
shall have been paid in full, i.e., until the principal on the
Class A-1 Senior Notes shall have been paid in full, no principal
will be paid on the Class A-2, A-3, A-4 or A-5 Senior Notes; then
until the principal on the Class A-2 Senior Notes shall have been
paid in full, no principal will be paid on the Class A-3, A-4 or
A-5 Senior Notes; then until the principal on the Class A-3
Senior Notes shall have been paid in full, no principal will be
paid on the Class A-4 Senior Notes; then until the principal or
the Class A-4 Notes shall have been paid in full, no principal
will be paid on the Class A-5 Senior Notes, until all Classes of
the Senior Notes have been paid in full;
2) to the Subordinated Noteholder until the Subordinated
Notes have been paid in full (which amounts shall be deposited
into the Reserve Fund); and
3) to the Trust Certificateholders pro rata, until the
Trust Certificates have been paid in full; and
(B) on any Payment Date after the maturity of the Senior Notes
has been accelerated pursuant to Section 5.02:
1) first, to the Class A-1 Senior Noteholders, (until the
Class A-1 Senior Notes have been paid in full) and second, to
each other Class of the Senior Noteholders pro rata (based on the
Outstanding Amount of each other Class on such Payment Date),
until all Classes of the Senior Notes have been paid in full;
2) to the Subordinated Noteholder (which amounts shall be
deposited into the Reserve Fund) and to the Certificate
Distribution Account for distribution to the Trust
Certificateholders, for amounts due and unpaid in respect of the
principal amount due and unpaid on the Subordinated Notes and
the Trust Certificates, respectively, ratably, without
preference or priority of any kind, according to the amounts due
and payable to the Subordinated Noteholder and the Trust
Certificateholders; and
(v) to the Reserve Fund, any remaining funds.
54
<PAGE> 61
(b) On each Payment Date, after taking into account amounts to be
distributed to Securityholders from the 1999-A SUBI Collection Account, the
Administrative Agent will allocate the Reserve Fund Draw Amount, if any,
reflected in the Payment Date Certificate, with respect to the related
Collection Period and will instruct the Indenture Trustee to make the following
deposits and distributions in the following amounts and order of priority,
prior to 11:00 a.m., New York City time:
(i) to the Note Distribution Account, to pay any remaining interest
due on the outstanding Senior Notes on such Payment Date (and,
to the extent permitted under applicable law, interest on any
overdue interest at the Overdue Interest Rate);
(ii) to the Reserve Fund, an amount equal to any remaining interest
due on the outstanding Subordinated Notes on such Payment Date
(and, to the extent permitted under applicable law, interest on
any overdue interest at the Subordinated Note Rate);
(iii) to the Certificate Distribution Account, an amount equal to any
remaining interest accrued on the Certificates with respect to
such Payment Date (and, to the extent permitted under applicable
law, interest on any overdue interest at the Certificate Rate);
and
(iv) to the related Distribution Account or, in the case of the
Subordinated Notes, to the Reserve Fund (and thereafter, in the
event of any remaining shortfall in amounts required to pay the
Quarterly Principal Distributable Amount with respect to the
Certificates to the Certificate Distribution Account), the
remaining Quarterly Principal Distributable Amount, which will
be allocated to pay principal on the Senior Notes, the
Subordinated Notes and the Certificates in the amounts and order
of priority set forth in Section 8.04(a)(iv).
(c) If on any Payment Date, after giving effect to all deposits to and
withdrawals from the Reserve Fund, the amount on deposit in the Reserve Fund
exceeds the Reserve Fund Requirement, the Indenture Trustee shall distribute
any such excess (i) up to the aggregate amount deposited into the Reserve Fund
in respect of the Subordinated Notes on or prior to the related Payment Date to
the Transferor, in its capacity as the Subordinated Noteholder, and (ii) any
additional excess amounts shall be paid to the Transferor. Upon any such
distributions to the Transferor, the Securityholders will have no further
rights in, or claims to such amounts. Amounts deposited in the Reserve Fund in
accordance with clauses (a)(ii) and (iv) and clauses (b)(ii) and (iv) above
shall be deemed to have been distributed to the Subordinated Noteholder as
payments in respect of interest (and overdue interest) or principal, as
applicable, and the Subordinated Noteholder shall not be entitled to any
further interest on such amounts after the related Payment Date.
55
<PAGE> 62
(d) On each Payment Date or Redemption Date, from the amounts on
deposit in the Note Distribution Account, the Indenture Trustee shall duly and
punctually distribute payments of principal and interest on the Senior Notes
due and by check mailed to the Person whose name appears as the registered
holder of a Senior Note (or one or more Predecessor Notes) on the Senior Note
Register as of the close of business on the related Record Date, except that
with respect to Senior Notes registered on the Record Date in the name of the
nominee of DTC (initially, such nominee to be Cede & Co.), payments will be
made by wire transfer in immediately available funds to the account designated
by such nominee. Such checks shall be mailed to the Person entitled thereto at
the address of such Person as it appears on the Senior Note Register as of the
applicable Record Date without requiring that the Senior Note be submitted for
notation of payment. Any reduction in the principal amount of any Senior Note
(or any one or more Predecessor Notes) affected by any payments made on any
Payment Date or Redemption Date shall be binding upon all future holders of any
Senior Note issued upon the registration of transfer thereof or in exchange
hereof or in lieu hereof, whether or not noted thereon. Amounts properly
withheld under the Code by any Person from payment to any Senior Noteholder of
interest or principal shall be considered to have been paid by the Indenture
Trustee to such Senior Noteholder for purposes of this Indenture. If funds are
expected to be available, pursuant to the notice delivered to the Indenture
Trustee, for payment in full of the remaining unpaid principal amount of the
Senior Notes on a Payment Date or Redemption Date, then the Indenture Trustee,
in the name of and on behalf of the Issuer, will notify each Person who was the
registered holder of a Senior Note as of the Record Date preceding the most
recent Payment Date or Redemption Date by notice mailed within thirty days of
such Payment Date or Redemption Date and the amount then due and payable shall
be payable only upon presentation and surrender of the Senior Note at the
Corporate Trust Office of the Indenture Trustee or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of
New York.
(e) On each Payment Date, the Indenture Trustee shall send by first
class mail an unaudited report (which may be or may be based upon the Payment
Date Certificate prepared by the Administrative Agent) to each Person that was
a Senior Noteholder as of the close of business on the related Record Date
(which shall be Cede as the nominee of DTC unless Definitive Notes are issued
under the limited circumstances described herein), and each Rating Agency
setting forth the following information with respect to such Payment Date or
the related Deposit Date or Collection Period, as the case may be:
(i) SUBI Collections allocable to the 99% 1999-A SUBI Certificates,
and to the 1% 1999-A SUBI Certificates, for such Collection
Period;
(ii) the Senior Note Distribution Amount for each Class of Senior
Notes;
(iii) for each Class of Senior Notes, the amount of the Senior Note
Distribution Amount allocable to interest, the Quarterly
Principal Distributable Amount, the Optimal Principal
Distributable Amount and the Principal Shortfall Amount for such
Class;
(iv) the amount of Available Funds;
(v) the amount of Sales Proceeds Advances and Financial Component
Advances included in Available Funds;
56
<PAGE> 63
(vi) the aggregate amount of Residual Value Losses and Residual Value
Surplus for such Collection Period and the Residual Value
Surplus Draw Amount, if any, included in Available Funds (after
giving effect to the distribution of the Retained Certificate
Distribution Amount);
(vii) the Reserve Fund Draw Amount, if any, the balance on deposit in
the Reserve Fund on such Payment Date after giving effect to
withdrawals therefrom and deposits thereto in respect of such
Payment Date, and the change in such balance from the
immediately preceding Payment Date;
(viii) the Outstanding Amount for each Class of Senior Notes (before
giving effect to any distributions in respect of the related
Payment Date);
(ix) the Note Factor for each Class of the Senior Notes;
(x) the amount of Special Event Purchases made during such
Collection Period and the aggregate Securitization Values as of
the Cutoff Date of all Specified Leases relating to Special
Event Purchases made during the related calendar year or since
the Closing Date;
(xi) the Administration Fee for such Collection Period;
(xii) the Payment Date Advance Reimbursement for such Accrual Period;
(xiii) the aggregate amount of SUBI Collections deposited in the Note
Distribution Account; and
(xiv) the Reserve Fund Deposit Amount, if any.
Each amount set forth pursuant to clauses (ii), (iii), (viii) and (xi) above
shall be expressed in the aggregate and as a dollar amount per $1,000 of
original principal balance of a Senior Note, Subordinated Note or Trust
Certificate, as applicable. Senior Note Owners may obtain copies of such
reports upon a request in writing to the Indenture Trustee at the Corporate
Trust Office.
Section 8.05. General Provisions Regarding Accounts.
(a) For so long as no Default or Indenture Default shall have occurred
and be continuing, all of the funds in the Reserve Fund shall be invested and
reinvested by the Indenture Trustee, until the Outstanding Amount has been
reduced to zero and thereafter by the Owner Trustee, at the direction of the
Administrator in Permitted Investments as set forth in Section 4.02(a) of the
Origination Trust Agreement, which mature no later than the Deposit Date
succeeding the date of such investment, including those offered by the
Indenture Trustee or an Affiliate thereof. No such investment shall be sold
prior to maturity. Any investment earnings on the Reserve Fund will be taxable
to the Transferor. On each Payment Date, net investment earnings on the Reserve
Fund shall be deposited in the Reserve Fund.
57
<PAGE> 64
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in the Reserve Fund resulting
from any loss on any Permitted Investment included therein, except for losses
attributable to the Indenture Trustee's failure to make payments on any such
Permitted Investments issued by the Indenture Trustee in its commercial
capacity as principal obligor and not as trustee, in accordance with their
terms.
(c) If (i) the Administrator shall have failed to give investment
directions for any funds on deposit in the Reserve Fund to the Indenture
Trustee by 11:00 a.m., New York City time (or such other time as may be agreed
by the Administrator and Indenture Trustee), on any Business Day or (ii) a
Default or Indenture Default shall have occurred and be continuing with respect
to the Senior Notes but the Senior Notes shall not have been declared due and
payable pursuant to Section 5.02 or (iii) if the Senior Notes shall have been
declared due and payable following an Indenture Default, amounts collected or
receivable from the Trust Estate are being applied in accordance with Section
5.05 as if there had not been such a declaration, then the Indenture Trustee
shall, to the fullest extent practicable, invest and reinvest funds in
investments that are Permitted Investments as set forth in paragraph (vi) of
the definition thereof.
Section 8.06. Release of Trust Estate.
(a) Subject to the payment of its fees and expenses pursuant to
Section 6.07, the Indenture Trustee may, and when required by the provisions of
this Indenture shall, execute instruments to release property from the lien of
this Indenture, or convey the Indenture Trustee's interest in the same, in a
manner and under circumstances that are not inconsistent with the provisions of
this Indenture. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there are no Senior
Notes Outstanding and all sums due the Indenture Trustee pursuant to Section
6.07 have been paid, release any remaining portion of the Trust Estate that
secured the Senior Notes from the lien of this Indenture and release to the
Issuer or any other Person entitled thereto any funds then on deposit in the
Trust Accounts. Such release shall include delivery to the Issuer or its
designee of the 1999-A SUBI Certificates and the Subordinated Notes and
delivery to the Securities Intermediary under the Control Agreement of a
certificate evidencing the release of the lien of this Indenture and transfer
of dominion and control over the Reserve Fund to the Owner Trustee. The
Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section only upon receipt of an Issuer Request.
58
<PAGE> 65
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Senior
Noteholders.
(a) Without the consent of the Senior Noteholders, but with prior
notice to each Rating Agency and subject to the satisfaction of the Rating
Agency Condition, the Issuer and the Indenture Trustee, when so requested by an
Issuer Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Indenture Trustee,
for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure,
convey or confirm unto the Indenture Trustee any property
subject or required to be subjected to the lien of this
Indenture, or to subject additional property to the lien of this
Indenture;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another Person to the Issuer and the
assumption by any such successor of the covenants of the Issuer
contained herein and in the Senior Notes;
(iii) to add to the covenants of the Issuer for the benefit of the
Senior Noteholders or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, correct or supplement any provision
herein or in any supplemental indenture that may be defective or
inconsistent with any other provision herein or in any
supplemental indenture or make any other provisions with respect
to matters or questions arising under this Indenture or in any
supplemental indenture that shall not be inconsistent with the
provisions of this Indenture; provided that such other
provisions shall not adversely affect the interests of the
Senior Noteholders; or
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Senior
Notes or to add to or change any of the provisions of this
Indenture as shall be necessary to facilitate the administration
of the trusts hereunder by more than one trustee, pursuant to
the requirements of Article Six.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations as may be therein contained.
59
<PAGE> 66
(b) The Issuer and the Indenture Trustee, when requested by an Issuer
Request, may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or for the purpose of modifying in any
manner (other than the modifications set forth in Section 9.02, which require
consent of the Holder of each Senior Note affected thereby) the rights of the
Senior Noteholders under this Indenture; provided, however, that (i) such
action shall not materially adversely affect the interests of any Senior
Noteholder, (ii) the Rating Agency Condition shall have been satisfied with
respect to such action and (iii) such action shall not, as evidenced by an
Opinion of Counsel, (A) affect the treatment of the Senior Notes as debt for
federal income tax purposes, (B) be deemed to cause a taxable exchange of the
Senior Notes for federal income tax purposes or (C) cause the Issuer, the
Transferor or the Origination Trust to be taxable as an association (or a
publicly traded partnership) taxable as a corporation for federal income tax
purposes.
Section 9.02. Supplemental Indentures With Consent of Senior
Noteholders. The Issuer and the Indenture Trustee, when requested by an Issuer
Request, also may, with the consent of Senior Noteholders holding not less than
a majority of the Outstanding Amount, by Act of such Senior Noteholders
delivered to the Issuer and the Indenture Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Senior Noteholders under this
Indenture subject to the satisfaction of the Rating Agency Condition and
provided that no such supplemental indenture shall, without the consent of the
Senior Noteholder of each Outstanding Senior Note affected thereby:
(a) change the Senior Note Final Payment Date of or the date of
payment of any installment of principal of or interest on any Senior Note, or
reduce the principal amount thereof, the interest rate thereon or the
Redemption Price with respect thereto, change the provision of this Indenture
relating to the application of collections on, or the proceeds of the sale of,
the Trust Estate to payment of principal of or interest on the Senior Notes, or
change any place of payment where, or the coin or currency in which, any Senior
Note or the interest thereon is payable, or impair the right to institute suit
for the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article Five, to the
payment of any such amount due on the Senior Notes on or after the respective
due dates thereof (or, in the case of redemption, on or after the Redemption
Date);
(b) reduce the percentage of the Outstanding Amount, the consent of
the Senior Noteholders of which is required for any such supplemental indenture
or the consent of the Senior Noteholders of which is required for any waiver of
compliance with provisions of this Indenture or Indenture Defaults hereunder
and their consequences provided for in this Indenture;
(c) modify or alter the provisions of the proviso to the definition of
the term "Outstanding";
(d) reduce the percentage of the Outstanding Amount required to direct
the Indenture Trustee to direct the Owner Trustee to sell the Trust Estate
pursuant to Section 5.04, if the proceeds of such sale would be insufficient to
pay the Outstanding Amount plus accrued but unpaid interest on the Senior
Notes;
60
<PAGE> 67
(e) modify any provision of this Section, except to increase any
percentage specified herein or to provide that certain additional provisions of
this Indenture or the other Basic Documents cannot be modified or waived
without the consent of the Senior Noteholder of each Outstanding Senior Note
affected thereby;
(f) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Trust Estate
or, except as otherwise permitted or contemplated herein, terminate the lien of
this Indenture on any property at any time subject hereto or deprive any Senior
Noteholder of the security provided by the lien of this Indenture; or
(g) impair the right to institute suit for the enforcement of payment
as provided in Section 5.07.
Any such supplemental indenture shall be executed only upon delivery
of an Opinion of Counsel to the same effect as in Section 9.01(b). The
Indenture Trustee may in its discretion determine whether or not any Senior
Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon all Senior Noteholders, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Senior Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Senior Noteholders to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the Indenture Trustee shall be entitled to receive, and subject
to Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may but shall
not be obligated to enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or indemnities under this
Indenture or otherwise.
Section 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Senior Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer, the Owner Trustee and the
Senior Noteholders shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental indenture shall be and shall
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
61
<PAGE> 68
Section 9.05. Reference in Senior Notes to Supplemental Indentures.
Senior Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Issuer or the Indenture Trustee shall so determine, new Senior Notes so
modified as to conform, in the opinion of the Indenture Trustee and the Issuer,
to any such supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Senior Notes.
62
<PAGE> 69
ARTICLE TEN
REDEMPTION OF SENIOR NOTES
Section 10.01. Redemption.
(a) Pursuant to Section 9.01 of the Trust Agreement, the Transferor
shall be permitted at its option to purchase the interest in the 1999-A SUBIs
evidenced by the 99% 1999-A Vehicle SUBI Certificate from the Issuer on any
Payment Date if, either before or after giving effect to any payment of
principal required to be made on such Payment Date, the Senior Note Balance is
less than or equal to 10% of the Initial Securities Balance. The purchase price
for the 99% 1999-A Vehicle SUBI Certificate shall equal the unpaid principal
balances of the Securities, together with accrued interest thereon to the
Redemption Date (the "Optional Purchase Price"), which amount shall be
deposited by the Transferor into the 1999-A SUBI Collection Account on the
Deposit Date relating to the Redemption Date. In connection with an Optional
Purchase, the Senior Notes shall be redeemed on the Redemption Date in whole,
but not in part, for the Redemption Price and thereupon the pledge of the 99%
1999-A Lease SUBI shall be discharged and released and the 99% 1999-A Lease
SUBI Certificate shall be returned to the Issuer.
(b) If the Transferor exercises the Optional Purchase, on the
Redemption Date, prior to 11:00 a.m., New York City time, the Origination
Trustee (acting through the Trust Agent) shall transfer the Optional Purchase
Price as part of the Available Funds from the 1999-A SUBI Collection Account as
follows: (i) to the Note Distribution Account, the Redemption Price, (ii) to
the Reserve Fund, the Subordinated Note Redemption Price and (iii) to the
Certificate Distribution Account, the Repayment Price.
(c) If the Senior Notes are to be redeemed pursuant to this Section,
the Administrator or the Issuer shall provide at least 45 days' prior notice of
the redemption of the Senior Notes to the Indenture Trustee and the Owner
Trustee, and the Indenture Trustee shall provide at least 30 days' notice
thereof to the Senior Noteholders.
Section 10.02. Form of Redemption Notice. Notice of redemption under
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed to each holder of Senior Notes as of the close of
business on the Record Date preceding the applicable Redemption Date at such
holder's address appearing in the Senior Note Register. In addition, the
Administrator shall notify each Rating Agency upon the redemption of the Senior
Notes, pursuant to the Issuer Administration Agreement.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the place where the Senior Notes to be redeemed are to be
surrendered for payment of the Redemption Price (which shall be the office or
agency of the Issuer to be maintained as provided in Section 3.02); and
63
<PAGE> 70
(d) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Senior Note and that interest thereon shall cease to
accrue from and after the Redemption Date.
Notice of redemption of the Senior Notes shall be given by the
Indenture Trustee in the name and at the expense of the Issuer. Failure to give
notice of redemption (or any defect therein) to any Senior Noteholder shall not
impair or affect the validity of the redemption of any other Senior Note.
Section 10.03. Senior Notes Payable on Redemption Date. The Senior
Notes to be redeemed shall, following notice of redemption as required by
Section 10.02, become due and payable on the Redemption Date at the Redemption
Price and (unless the Issuer shall default in the payment of the Redemption
Price) no interest shall accrue on the Redemption Price for any period after the
date to which accrued interest is calculated for purposes of calculating the
Redemption Price.
64
<PAGE> 71
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee and each Rating Agency (i) an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained
in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) In addition to any obligation imposed in Section 11.01(a) or
elsewhere in this Indenture:
(i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the
basis for the release of any property or securities subject to
the lien of this Indenture, the Issuer shall furnish to the
Indenture Trustee an Officer's Certificate certifying or stating
the opinion of each Person signing such certificate as to the
fair value (within 90 days of such deposit) to the Issuer of the
Collateral or other property or securities to be so deposited.
65
<PAGE> 72
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in
clause (i) above, the Issuer shall also deliver to the Indenture
Trustee an Independent Certificate as to the same matters, if
the fair value of the property or securities to be so deposited
and of all other such securities made the basis of any such
withdrawal or release since the commencement of the then-current
calendar year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) above and this clause, is 10%
or more of the Outstanding Amount, but such a certificate need
not be furnished with respect to any securities so deposited, if
the fair value thereof to the Issuer as set forth in the related
Officer's Certificate is less than $25,000 or less than 1% of
the Outstanding Amount.
(iii) Other than with respect to any release described in clause (A)
or (B) of Section 11.01(b)(v), whenever any property or
securities are to be released from the lien of this Indenture,
the Issuer shall also furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of each
Person signing such certificate as to the fair value (within 90
days of such release) of the property or securities proposed to
be released and stating that in the opinion of such Person, the
proposed release will not impair the security under this
Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in
clause (iii) above, the Issuer shall also furnish to the
Indenture Trustee an Independent Certificate as to the same
matters, if the fair value of the property or securities and of
all other property, or securities (other than property described
in clauses (A) or (B) of Section 11.01(b)(v)) released from the
lien of this Indenture since the commencement of the then
current calendar year, as set forth in the Officer's
Certificates required by clause (iii) above and this clause,
equals 10% or more of the Outstanding Amount, but such Officer's
Certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in
the related Officer's Certificate is less than $25,000 or less
than 1% of the Outstanding Amount.
(v) Notwithstanding Section 2.08 or any other provision of this
Section, the Issuer may (A) collect, liquidate, sell or
otherwise dispose of the Collateral as and to the extent
permitted or required by the Basic Documents and (B) make cash
payments out of the Accounts as and to the extent permitted or
required by the Basic Documents.
Section 11.02. Form of Documents Delivered to Indenture Trustee. In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
66
<PAGE> 73
Any certificate or opinion of an Authorized Officer may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of or representations by an officer or officers of the Administrator,
the Transferor or the Issuer, stating that the information with respect to such
factual matters is in the possession of the Administrator, the Transferor or
the Issuer, unless such officer or counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any terms hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of
the facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article Six.
Section 11.03. Acts of Senior Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Senior Noteholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Senior Noteholders in person or
by agents duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee, and, where it is hereby
expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Senior Noteholders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to
Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Senior Notes shall be proved by the Senior Note
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the holder of any Senior Note shall bind the holder
of every Senior Note issued upon the registration thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered
to be done by the Indenture Trustee or the Issuer in reliance thereon, whether
or not notation of such action is made upon such Senior Note.
67
<PAGE> 74
Section 11.04. Notices. All demands, notices and communications
hereunder shall be in writing and shall be delivered or mailed by registered or
certified first-class United States mail, postage prepaid, hand delivery,
prepaid courier service, or by telecopier, and addressed in each case as
follows: (i) if to the Issuer c/o the Owner Trustee, at 1201 Market Street,
Wilmington, Delaware 19801 (telecopier no. (302) 984-4903), Attention:
Corporate Trust Department with a copy to the Administrator, at 3600 N.W. 82nd
Avenue, Miami, Florida 33166 (telecopier no. (305) 500-3726), Attention:
Treasurer; (ii) if to the Indenture Trustee, at One Illinois Center, 111 East
Wacker Drive, Suite 3000, Chicago, Illinois 60601 (telecopier no. (312)
228-9401), Attention: Ryder Truck Leasing; (iii) if to Moody's, to 99 Church
Street, New York, New York 10007, Attention: ABS Monitoring Group; (iv) if to
DCR, to Duff & Phelps Credit Rating Co., 55 East Monroe Street, Suite 3800,
Chicago, Illinois 60603 (telecopier no. (312) 368-2069), Attention: Asset
Backed Monitoring Group (Equipment Leases); or (v) at such other address as
shall be designated by any of the foregoing in a written notice to the other
parties hereto. Delivery shall occur only upon receipt or reported tender of
such communication by an officer of the recipient entitled to receive such
notices located at the address of such recipient for notices hereunder.
Section 11.05. Notices to Senior Noteholders; Waiver. Where this
Indenture provides for notice to Senior Noteholders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first class, postage prepaid to each Senior Noteholder
affected by such event, at his address as it appears on the Senior Note
Register, not later than the latest and not earlier than the earliest date
prescribed for the giving of such notice. In any case where notice to Senior
Noteholders is given by mail, neither the failure to mail such notice nor any
defect in any notice so mailed to any particular Senior Noteholder shall affect
the sufficiency of such notice with respect to other Senior Noteholders, and
any notice that is mailed in the manner herein provided shall conclusively be
presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Senior Noteholders shall be filed with the
Indenture Trustee but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event of Senior Noteholders when such notice is required
to be given pursuant to any provision of this Indenture, then any manner of
giving such notice as shall be satisfactory to the Indenture Trustee shall be
deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to each Rating Agency,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Indenture
Default.
68
<PAGE> 75
Section 11.06. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 11.07. Successors and Assigns. All covenants and agreements in
this Indenture and the Senior Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind its successors.
Section 11.08. Severability. In case any provision in this Indenture
or in the Senior Notes shall be invalid, illegal or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 11.09. Benefits of Indenture. Nothing in this Indenture or in
the Senior Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, the Senior Noteholders (and,
with respect to Sections 8.03 and 8.04, the Trust Certificateholders), any
other party secured hereunder and any other Person with an ownership interest
in any part of the Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 11.10. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Senior Notes or this Indenture) payment need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date on which nominally due, and no interest
shall accrue for the period from and after any such nominal date.
Section 11.11. Governing Law. This Indenture shall be construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 11.12. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 11.13. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer accompanied by an Opinion of Counsel (who may be counsel
to the Indenture Trustee or any other counsel reasonably acceptable to the
Indenture Trustee) to the effect that such recording is necessary either for
the protection of the Senior Noteholders or any other Person secured hereunder
or for the enforcement of any right or remedy granted to the Indenture Trustee
under this Indenture.
Section 11.14. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Senior Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any Trust Certificateholder, (iii) any owner of a beneficial
interest in the Issuer or (iv) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Indenture Trustee or the Owner Trustee in
its individual capacity, any Trust Certificateholder, the Owner Trustee or the
Indenture Trustee of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles Six, Seven
and Ten of the Trust Agreement.
69
<PAGE> 76
Section 11.15. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Senior Noteholder or Note Owner, by accepting a Senior
Note or in the case of a Note Owner, a beneficial interest in a Senior Note,
hereby covenants and agree that they will not institute, or join in
instituting, any bankruptcy, reorganization, arrangement, insolvency or
liquidation Proceeding, or other Proceeding under federal or State bankruptcy
or similar laws for a period of one year and a day after:
(a) payment in full of all amounts due to each Holder in respect of
the UTI, the 1999-A SUBIs or any Other SUBIs, against any UTI Beneficiary (or
any general partner of any UTI Beneficiary which is a partnership), the
Origination Trust and the Origination Trustee, without the consent of 100% of
the Holders of the 1999-A SUBIs and any Others (excluding the UTI
Beneficiaries, the Transferor or any of their respective Affiliates); and
(b) payment in full of the Offered Securities, against the Transferor
or the Issuer; provided, however, that 100% of the Senior Noteholders, or, if
no Senior Notes are then outstanding, the Subordinated Noteholder and if no
Subordinated Notes are then outstanding, 100% of the Trust Certificateholders
(in each case excluding the Transferor and any of its Affiliates) may at any
time institute or join in instituting any bankruptcy, reorganization,
insolvency or liquidation proceeding against the Transferor or the Issuer.
Section 11.16. No Recourse. Each Senior Noteholder or Senior Note
Owner, by acceptance of a Senior Note or, in the case of a Senior Note Owner, a
beneficial interest in a Senior Note, covenants and agrees that no recourse may
be taken, directly or indirectly, with respect to the obligations of the
Issuer, the Owner Trustee or the Indenture Trustee on the Senior Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity or any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall
be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
70
<PAGE> 77
Section 11.17. Inspection. The Issuer agrees that on reasonable prior
notice it will permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all
such information, except to the extent disclosure may be required by law (and
all reasonable applications for confidential treatment are unavailing) and
except to the extent the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
Section 11.18. Limitation of Liability of Owner Trustee.
Notwithstanding anything contained herein to the contrary, this instrument has
been countersigned by Chase Manhattan Bank Delaware not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall Chase Manhattan Bank Delaware in its individual capacity or any
beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder,
as to all of which recourse shall be had solely to the assets of the Issuer.
For all purposes of this Indenture, in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles Six, Seven
and Ten of the Trust Agreement. Notwithstanding anything herein to the
contrary, Section 2.07 of the Trust Agreement shall remain in full force and
effect.
Section 11.19. TIA Incorporation and Conflicts. The provisions of TIA
Sections 310 through 317 that impose duties on any Person (including the
provisions automatically deemed included herein unless expressly excluded by
this Indenture) are a part of and govern this Indenture, whether or not
physically contained herein. If any provision hereof limits, qualifies or
conflicts with another provision hereof that is required to be included in this
Indenture by any of the provisions of the TIA, such required provision shall
control.
71
<PAGE> 78
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
RYDER VEHICLE LEASE TRUST 1999-A
By: CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
By: ____________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as Indenture Trustee
By: ____________________________________
Name:
Title:
Receipt of this original counterpart of this Agreement is hereby
acknowledged on this _____ day of ________________1999.
RTRT, INC.,
as Origination Trustee
By: ____________________________________
Name:
Title:
72
<PAGE> 79
STATE OF _______________)
)ss
COUNTY OF _____________ )
On __________ before me, ____________________________________________,
[insert date] [Here insert name and title of notary]
personally appeared _________________________________________________,
[ ] personally known to me, or
[ ] proved to me on the basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the within
instrument,
and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ties), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which such
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
[Seal] Signature _____________________
73
<PAGE> 80
STATE OF _______________)
)ss
COUNTY OF _____________ )
On __________ before me, ____________________________________________,
[insert date] [Here insert name and title of notary]
personally appeared _________________________________________________,
[ ] personally known to me, or
[ ] proved to me on the basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the within
instrument,
and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ties), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which such
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
[Seal] Signature _____________________
74
<PAGE> 81
STATE OF _______________)
)ss
COUNTY OF _____________ )
On __________ before me, ____________________________________________,
[insert date] [Here insert name and title of notary]
personally appeared __________________________________________________,
[ ] personally known to me, or
[ ] proved to me on the basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the within
instrument,
and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ties), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which such
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
[Seal] Signature _____________________
75
<PAGE> 82
EXHIBIT A
FORM OF SENIOR NOTE
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS SENIOR NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SENIOR NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
TRANSFERS OF THE NOTES MUST GENERALLY BE ACCOMPANIED BY APPROPRIATE TAX
TRANSFER DOCUMENTATION AND ARE SUBJECT TO RESTRICTIONS AS PROVIDED IN THE
INDENTURE.
THE HOLDER, BY ACCEPTANCE OF THIS NOTE, SHALL BE DEEMED TO HAVE AGREED TO TREAT
THE NOTES AS DEBT SOLELY OF THE ISSUER FOR UNITED STATES FEDERAL AND STATE
INCOME TAX PURPOSES.
RYDER VEHICLE LEASE TRUST 1999-A
[______] % ASSET BACKED SENIOR NOTE, CLASS [A-1] [A-2] [A-3] [A-4] [A-5]
REGISTERED $[_________]
No. R-[___] CUSIP NO. [_________]
Ryder Vehicle Lease Trust 1999-A, a business trust organized and
existing under the laws of the State of Delaware (including any permitted
successors and assigns, the "Issuer"), for value received, hereby promises to
pay to CEDE & CO., or registered assigns, the principal sum of
[______________________________] Dollars ($[__________]) in quarterly
installments on January 15, April 15, July 15 and October 15 of each year, or
if such day is not a Business Day, on the immediately succeeding Business Day,
commencing on January 17, 2000 (each, a "Payment Date") until the principal of
1
<PAGE> 83
this Senior Note is paid or made available for payment, and to pay interest on
each Payment Date on the Class [A-1] [A-2] [A-3] [A-4] [A-5] Note Balance as of
the preceding Payment Date (after giving effect to all payments of principal
made on the preceding Payment Date), or as of the Closing Date in the case of
the first Payment Date or if no interest has yet been paid, at the rate per
annum shown above (the "Interest Rate"), in each case as and to the extent
described below; provided, however, that the entire Class [A-1] [A-2] [A-3 ]
[A-4] [A-5] Note Balance shall be due and payable on the earlier of
[___________] 15, 200[__] (the "Senior Note Final Payment Date") and the
Redemption Date, if any, pursuant to Section 10.01 of the Indenture. The Issuer
shall pay interest on overdue installments of interest at the Interest Rate to
the extent lawful. Such principal of and interest on this Senior Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Senior Note are payable in such
coin or currency of the United States as at the time of payment is legal tender
for payment of public and private debts. All payments made by the Issuer with
respect to this Senior Note shall be applied first to interest due and payable
on this Senior Note as provided above and then to the unpaid principal of this
Senior Note.
Reference is made to the further provisions of this Senior Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Senior Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee the name of which appears below by manual signature, this
Senior Note shall not be entitled to any benefit under the Indenture referred
to on the reverse hereof or be valid or obligatory for any purpose.
2
<PAGE> 84
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or by facsimile, by its Authorized Officer as of the date set
forth below.
Dated: _______________, 1999 RYDER VEHICLE LEASE TRUST 1999-A,
By: CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
By: _______________________________
Name: _____________________________
Title: ____________________________
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Senior Notes designated above and referred to in
the within-mentioned Indenture.
Dated: _______________, 1999 U.S. BANK NATIONAL ASSOCIATION.
as Indenture Trustee
By: CHASE MANHATTAN BANK DELAWARE,
By: ______________________________
Name: ____________________________
Title: ___________________________
3
<PAGE> 85
[REVERSE OF SENIOR NOTE]
This Senior Note is one of a duly authorized issue of Senior Notes of
the Issuer, designated as its " [_______]% Asset Backed Senior Notes, Class
[A-1] [A-2] [A-3] [A-4] [A-5] " (herein called the "Senior Notes") issued under
an Indenture, dated as of [_______], 1999 (such indenture, as supplemented or
amended, is herein called the "Indenture"), between the Issuer and U.S. Bank
National Association, as trustee (the "Indenture Trustee", which term includes
any successor Indenture Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Senior Noteholders. The Senior Notes are subject to all terms of
the Indenture. All terms used in this Senior Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class A-4 Notes are and will be equally and ratably
secured by the Collateral pledged as security therefor as provided in the
Indenture. However, to the extent provided in the Indenture, each Class will
receive principal payment sequentially so no principal payments shall be made in
respect of the Class A-2 Notes until the Class A-1 Notes have been paid in full,
no principal payments shall be made in respect of the Class A-3 Notes until the
Class A-2 Notes have been paid in full, and no principal payments shall be made
in respect of the Class A-4 Notes until the Class A-3 Notes have been paid in
full.
Principal payable on the Senior Notes will be paid on each Payment Date
in the amount specified in the Indenture. As described above, the entire unpaid
principal amount of this Senior Note will be payable on the earlier of the
Senior Note Final Payment Date and the Redemption Date, if any, selected
pursuant to the Indenture. Notwithstanding the foregoing, under certain
circumstances, the entire unpaid principal amount of the Senior Notes shall be
due and payable following the occurrence and continuance of an Indenture
Default, as described in the Indenture, principal payments on the Class A-1
Senior Notes shall be made first and principal payments on the remaining classes
of Senior Notes shall be made pro rata, to the Senior Noteholders entitled
thereto.
Payments of principal and interest on this Senior Note due and payable
on each Payment Date or Redemption Date shall be made by check mailed to the
Person whose name appears as the registered holder of this Senior Note (or one
or more Predecessor Notes) on the Senior Note Register as of the close of
business on the related Record Date, except that with respect to Senior Notes
registered on the Record Date in the name of the nominee of The Depository
Trust Company (initially, such nominee to be Cede & Co.), payments will be made
by wire transfer in immediately available funds to the account designated by
such nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Senior Note Register as of the
applicable Record Date without requiring that this Senior Note be submitted for
notation of payment. Any reduction in the principal amount of this Senior Note
(or any one or more Predecessor Notes) affected by any payments made on any
Payment Date or Redemption Date shall be binding upon all future holders of
this Senior Note and of any Senior Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture,
4
<PAGE> 86
for payment in full of the remaining unpaid principal amount of this Senior
Note on a Payment Date or Redemption Date, then the Indenture Trustee, in the
name of and on behalf of the Issuer, will notify the Person who was the
registered holder hereof as of the Record Date preceding such Payment Date or
Redemption Date by notice mailed within five days of such Payment Date or
Redemption Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Corporate Trust Office of the
Indenture Trustee or at the office of the Indenture Trustee's agent appointed
for such purposes located in The City of New York.
As provided in the Indenture, the Transferor will be permitted at its
option to purchase the interest in the 1999-A SUBI evidenced by the 99% 1999-A
Vehicle SUBI Certificate from the Issuer on any Payment Date if, either before
or after giving effect to any payment of principal required to be made on such
Payment Date, the Senior Note Balance is less than or equal to 10% of the
Initial Securities Balance. The purchase price for the 99% 1999-A Vehicle SUBI
Certificate shall equal the unpaid principal balances of the Securities,
together with accrued interest thereon to the Redemption Date and certain other
amounts (the "Optional Purchase Price"), which amount shall be deposited by the
Transferor into the 1999-A SUBI Collection Account on the Deposit Date relating
to the Payment Date fixed for redemption. In connection with an Optional
Purchase, the Senior Notes will be redeemed on such Payment Date in whole, but
not in part, for the Redemption Price and thereupon the pledge of the 99%
1999-A Lease SUBI shall be discharged and released and the 99% 1999-A Lease
SUBI Certificate shall be returned to the Transferor.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Senior Note may be registered on the Senior
Note Register upon surrender of this Senior Note for registration of transfer
at the office or agency designated by the Issuer pursuant to the Indenture. No
service charge will be charged for any registration of transfer or exchange of
this Senior Note, but the transferor may be required to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such registration of transfer or exchange.
Each Senior Noteholder or Senior Note Owner, by acceptance of a Senior
Note or, in the case of a Senior Note Owner, a beneficial interest in a Senior
Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Senior Notes or under the Indenture or any
certificate or other writing delivered in connection therewith against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Indenture Trustee or
the Owner Trustee in its individual capacity, any holder of a beneficial
interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
5
<PAGE> 87
The Senior Notes represent obligations of the Issuer only and do not
represent interests in, recourse to or obligations of the Transferor, the UTI
Beneficiaries or any of their respective Affiliates.
Each Senior Noteholder, or in the case of a Senior Note Owner, by
acceptance of a Senior Note, in the case of a Senior Note Owner, a beneficial
interest in the Senior Note, hereby covenants and agree that they will not
institute, or join in instituting, any bankruptcy, reorganization, arrangement,
insolvency or liquidation Proceeding, or other Proceeding under federal or
State bankruptcy or similar laws for a period of one year and a day after:
(a) payment in full of all amounts due to each Holder in respect
of the UTI, the 1999-A SUBIs or any Other SUBIs, against any UTI
Beneficiary (or any general partner of any UTI Beneficiary which is a
partnership), the Origination Trust and the Origination Trustee,
without the consent of 100% of the Holders of the 1999-A SUBIs and any
Other SUBIs (excluding the UTI Beneficiaries, the Transferor or any of
their respective Affiliates); and
(b) payment in full of the Offered Securities, against the
Transferor or the Issuer; provided, however, that 100% of the Senior
Noteholders, or, if no Senior Notes are then outstanding, the
Subordinated Noteholder or, if no Subordinated Notes are outstanding,
100% of the Trust Certificateholders (in each case excluding the
Transferor and any of its Affiliates) may at any time institute or
join in instituting any bankruptcy, reorganization, insolvency or
liquidation proceeding against the Transferor or the Issuer.
Prior to the due presentment for registration of transfer of this
Senior Note, the Owner Trustee, the Indenture Trustee and any agent of the
Owner Trustee or the Indenture Trustee may treat the Person in whose name this
Senior Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this Senior Note be overdue, and neither the Owner Trustee, the
Indenture Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Senior Noteholders under the Indenture at any time
by the Issuer with the consent of Senior Noteholders representing not less than
a majority of the Outstanding Amount. The Indenture also contains provisions
permitting Senior Noteholders representing specified percentages of the
Outstanding Amount, on behalf of all Senior Noteholders, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past Defaults
under the Indenture and their consequences. Any such consent or waiver by the
Senior Noteholder of this Senior Note (or any one of more Predecessor Notes)
shall be conclusive and binding upon such Senior Noteholder and upon all future
Senior Noteholders of this Senior Note and of any Senior Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Senior Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms
and conditions set forth in the Indenture without the consent of the Senior
Noteholders.
6
<PAGE> 88
The Senior Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.
This Senior Note and the Indenture shall be construed in accordance
with the laws of the State of New York, and the obligations, rights and
remedies of the parties hereunder and thereunder shall be determined in
accordance with such laws.
No reference herein to the Indenture and no provision of this Senior
Note or the Indenture shall alter or impair the obligation of the Issuer, which
is absolute and unconditional, to pay the principal of and interest on this
Senior Note at the times, place and rate and in the coin or currency herein
prescribed.
7
<PAGE> 89
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
-------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(name and address of assignee)
the within Senior Note and all rights thereunder, and hereby
irrevocably constitutes and appoints attorney, to transfer said Senior Note on
the books kept for registration thereof, with full power of substitution in the
premises.
Dated:(1)
Signature Guaranteed:
---------------------------------
- --------
(1) The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Senior Note in
every particular, without alteration, enlargement or any change whatsoever.
8
<PAGE> 90
EXHIBIT B
FORM OF DEPOSITORY AGREEMENT
1
<PAGE> 1
EXHIBIT 5.1
STEEL HECTOR & DAVIS LLP
November 2, 1999
Ryder Vehicle Lease Trust 1999-A
Ryder Truck Rental I LP
and Ryder Funding LP
c/o Ryder Truck Rental, Inc.
3600 NW 82nd Avenue
Miami, Florida 33166
Re: Ryder Vehicle Lease Trust 1999-A
--------------------------------
Ladies and Gentlemen:
We have acted as special counsel for Ryder Vehicle Lease Trust 1999-A,
a Delaware business trust (the "Issuer"), Ryder Truck Rental I LP, a Delaware
limited partnership ("RTR I LP"), and Ryder Funding LP, a Delaware limited
partnership (the "Transferor"), in connection with the proposed offering after
the date hereof by the Issuer of (a) $28,000,000 aggregate principal amount of
Class A-1 Asset Backed Senior Notes, $63,000,000 aggregate principal amount of
Class A-2 Asset Backed Senior Notes, $54,000,000 aggregate principal amount of
Class A-3 Asset Backed Senior Notes, $53,000,000 aggregate principal amount of
Class A-4 Asset Backed Senior Notes and $84,900,000 aggregate principal amount
of Class A-5 Asset Backed Senior Notes (collectively, the "Senior Notes"), in
each case to be issued pursuant to an indenture, dated as of October 1, 1999
(the "Indenture"), between U.S. Bank National Association, as indenture trustee
(in such capacity, the "Indenture Trustee") and the Issuer, and (b) $10,858,575
aggregate principal amount of Asset Backed Certificates (the "Certificates"), to
be issued by the Issuer pursuant to an amended and restated trust agreement,
dated as of October 1, 1999 (the "Issuer Trust Agreement") between the
Transferor and Chase Manhattan Bank Delaware, as owner trustee (in such
capacity, the "Owner Trustee"), except that a certificate with a principal
balance approximately equal to 1% of such aggregate principal amount is to be
issued to the Transferor and not so offered (the "Transferor Certificate") (the
Senior Notes and the Certificates other than the Transferor Certificate,
together, the "Offered Securities"). Concurrently with the issuance of the
Offered Securities, the Issuer will also issue $13,023,237.85 aggregate
principal amount of Subordinated Notes (the "Subordinated Notes") pursuant to
the Issuer Trust Agreement.
The Senior Notes, Certificates and Subordinated Notes (collectively the
"Securities") are to be secured by two special units of beneficial interest in
certain specified assets (each a "Series 1999-A SUBI" and, collectively, the
"SUBI") to be
<PAGE> 2
created pursuant to a second amended and restated trust agreement, dated as of
February 1, 1998 (the "Origination Trust Agreement"), among RTR I LP and Ryder
Truck Rental II LP ("RTR II LP"), as grantors (the "UTI Beneficiaries"), Ryder
Truck Rental, Inc., as administrative agent, RTRT, Inc., as trustee, Delaware
Trust Capital Management, Inc., as Delaware trustee, and U.S. Bank National
Association, as trust agent, as supplemented by a 1999-A supplement to the
Origination Trust Agreement, dated as of October 1, 1999 (the "1999-A SUBI
Supplement", and, together with the Origination Trust Agreement, the "SUBI Trust
Agreement").
Pursuant to an underwriting agreement (the "Underwriting Agreement") to
be entered into among the Transferor, Ryder Truck Rental, Inc. ("Ryder") and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the
several underwriters (collectively, the "Underwriters") named in the
Underwriting Agreement, the Senior Notes are to be acquired and offered by the
Underwriters, as described in the Registration Statement on Form S-1 (File No.
333-81455), filed with the Securities and Exchange Commission ("SEC") on June
24, 1999, as amended by Amendment No. 1, filed with the SEC on September 17,
1999, Amendment No. 2, filed with the SEC on October 19, 1999, and Amendment No.
3, filed with the SEC on November 2, 1999 (the "Registration Statement"). As set
forth in the Registration Statement, the Senior Notes and the SUBI will be
issued under and pursuant to the conditions of the Indenture, the SUBI Trust
Agreement and the Issuer Trust Agreement, as the case may be. The Certificates
(except the Transferor Certificate) are to be acquired by the Underwriters, as
initial purchasers, pursuant to a purchase agreement (the "Purchase Agreement"),
to be entered into among the Transferor, Ryder and the Underwriters. The
Subordinated Notes and the Transferor Certificate will be retained by the
Transferor.
A. BASIS OF OPINIONS
-----------------
In connection with this opinion letter (the "Opinion"), we have
reviewed the (a) Basic Documents (as defined in the SUBI Trust Agreement), (b)
the Registration Statement, (c) the Underwriting Agreement; (d) the Purchase
Agreement and (e) such other documents as we have deemed appropriate and
necessary to form the basis of this Opinion (collectively the "Reviewed
Documents"). In this Opinion, capitalized terms defined in the Basic Documents
are used with such meanings unless otherwise defined herein, the term
"addressee" shall mean any person permitted to rely on this Opinion or any
reliance letter we may issue that refers expressly to the terms hereof, the
phrase "to our knowledge" shall mean the actual knowledge and conscious
attention of the attorneys of this firm who are materially involved in this
matter, without any independent investigation, and the "Transactions" shall mean
the transactions effected pursuant to the Reviewed Documents.
We have relied in this Opinion as to matters of fact, without
investigation, upon representations or certifications of officers of the
Transferor, RTR I LP, Ryder, public officials and others and the representations
and warranties contained in the Reviewed Documents. We have assumed in this
Opinion that each instrument, when issued, and each agreement when executed and
delivered, will conform to the form thereof presented to us. In addition, we
have assumed the accuracy and completeness of all documents and
<PAGE> 3
records that we have reviewed, the genuineness of all signatures, the
authenticity of the documents submitted to us as originals and the conformity to
authentic original documents of all documents submitted to us as certified,
conformed or reproduced copies or exhibits. However, with respect to the
assumptions we have made and as to our reliance upon such matters of fact and
information, to our knowledge, there is no information that conflicts with such
assumptions or that would make such reliance unwarranted.
In our examination we also have assumed, without any independent
investigation: (a) that all parties to the Reviewed Documents (other than the
Issuer, RTR I LP or the Transferor) are duly organized and validly existing in
the jurisdictions in which they were organized and are duly qualified to
transact business as foreign corporations and in good standing in the
jurisdictions in which they transact business; (b) the due authorization,
execution and delivery of the Reviewed Documents by the parties thereto (other
than the Issuer, RTR I LP or the Transferor); (c) the full legal power and
authority of the parties thereto to execute, deliver and perform their
obligations under the Reviewed Documents; (d) that the Reviewed Documents
constitute the legal, valid and binding obligations of the parties thereto,
enforceable against each of them in accordance with its terms; (e) that none of
the Reviewed Documents has been modified, supplemented or subject to any waiver;
(f) that the parties to the Reviewed Documents have acted in good faith, without
notice of adverse claims, and have complied with all laws applicable to each of
them, as the case may be, that affect the Transactions; (g) that the
Transactions comply with all standards of good faith, fairness, public policy
and conscionability required by law; (h) that with respect to the Transactions
and the Reviewed Documents, sufficient consideration has been received by each
of the parties in respect of their respective obligations thereunder; (i) the
constitutionality and validity of all relevant laws, regulations and agency
actions unless a reported case has otherwise held; (j) that there are no
agreements or understandings among the parties, written or oral, and there is no
usage of trade or course of prior dealing among the parties that would, in
either case, define, supplement or qualify the terms of the Transactions and the
Reviewed Documents; (k) that no recipient of this opinion has reason to beleive
that the opinions set forth herein are incorrect or that there has been any
mutual mistake of fact or misunderstanding, fraud, duress or undue influence
relating to the matters which are the subject of the Transactions and the
Reviewed Documents; and (l) the fulfillment of and timely compliance by the
parties thereto with all the terms and conditions of the Reviewed Documents and
the accuracy of all representations and warranties contained therein.
B. OPINIONS
--------
Based solely on and in reliance upon the foregoing and subject to the
limitations, exceptions and qualifications set forth herein, we are of the
opinion that:
(1) when each Senior Note has been duly executed on the part of the
Owner Trustee on behalf of the Issuer (subject to the terms thereof
being otherwise in compliance with applicable law at such time),
and has been duly authenticated by the Indenture Trustee, in each
case in accordance with the terms of the
<PAGE> 4
Indenture, and issued and delivered against payment therefor as
contemplated in the Registration Statement and sold and delivered
to the Underwriters in accordance with the provisions of the
Underwriting Agreement, the Senior Notes will be legally issued,
fully paid and non-assessable and will be binding obligations of
the Issuer; and
(2) the Indenture, when duly executed and delivered by the parties
thereto in the form contemplated by the Registration Statement,
will constitute a legally valid and binding obligation of the
Issuer, enforceable against the Issuer in accordance with its
terms.
C. LIMITATIONS, EXCEPTIONS AND QUALIFICATIONS
------------------------------------------
No opinion is expressed herein as to the enforceability of the
obligations to the extent that enforceability of any rights, obligations and
agreements is in any way affected or limited by: (a) applicable liquidation,
conservatorship, bankruptcy, insolvency, moratorium, reorganization or similar
debtor relief laws from time to time in effect under state and Federal law; (b)
general principles of equity (whether considered in a proceeding in equity or at
law); (c) the exercise of the discretionary powers of any court or other
authority before which may be brought any proceeding seeking equitable remedies,
including, without limitation, specific performance and injunctive relief; (d)
the applicability of concepts of materiality, reasonableness, good faith and
fair dealing; and (e) applicable fraudulent conveyance laws from time to time in
effect.
Our opinions expressed above are limited to the federal laws of the
United States of America and the laws of the States of Delaware and New York
(excluding, except as to the State of New York, the choice of law principles
thereof), and we do not express any opinion herein concerning any other law or
jurisdiction. Specifically and without limiting the generality of the preceding
sentence, we express no opinion herein as to the applicability of or compliance
with any federal or state securities laws, including without limitation the
Securities Act of 1933, as amended, and the Trust Indenture Act of 1939, as
amended.
The opinions expressed herein are limited to the matters expressly set
forth herein, and no opinion is to be inferred or implied beyond the matters so
stated. Captions used in this opinion are for convenience only, and should not
be regarded as having any independent meaning. This opinion is expressly subject
to there being no material change in the law effective after the date hereof.
This opinion is given as of the date hereof and we assume no obligation to
advise you of changes that may hereafter be brought to our attention.
We hereby consent to (a) the filing of this opinion as Exhibit 5.1 to
the Registration Statement and (b) the reference to this firm under the heading
"Legal Matters" in the prospectus contained within the Registration Statement,
without admitting that we are "experts" within the meaning of the Securities Act
of 1933, as amended, or the rules or
<PAGE> 5
regulations of the Securities and Exchange Commission thereunder, with respect
to any part of the Registration Statement, including this exhibit.
Very truly yours,
/s/ Steel Hector & Davis LLP
<PAGE> 1
EXHIBIT 8.1
STEEL HECTOR & DAVIS LLP
November 2, 1999
Ryder Vehicle Lease Trust 1999-A
Ryder Truck Rental I LP
and Ryder Funding LP
c/o Ryder Truck Rental, Inc.
3600 NW 82nd Avenue
Miami, Florida 33166
Re: Ryder Vehicle Lease Trust 1999-A
--------------------------------
Ladies and Gentlemen:
We have acted as special federal income tax counsel for Ryder Vehicle
Lease Trust 1999-A, a Delaware business trust (the "Issuer"), Ryder Truck Rental
I LP, a Delaware limited partnership ("RTR I LP"), and Ryder Funding LP, a
Delaware limited partnership (the "Transferor"), in connection with the
preparation of the Registration Statement on Form S-1 (File No. 333-81455),
filed with the Securities and Exchange Commission ("SEC") on June 24, 1999, as
amended by Amendment No. 1, filed with the SEC on September 17, 1999, Amendment
No. 2, filed with the SEC on October 19, 1999, and Amendment No. 3, filed with
the SEC on November 2 (the "Prospectus"). All capitalized terms not otherwise
defined herein have the meanings given to them in the Prospectus.
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of the Prospectus, the SUBI Trust
Agreement, the Administration Agreement, the Program Operating Lease, the SUBI
Certificate Transfer Agreement, the forms of the Senior Notes, Certificates and
Subordinated Notes, and such other agreements, records, documents, and
instruments, as in our judgement were necessary or appropriate (the
"Documents"), and have made such inquiries of such officers and representatives
of the Transferor and such other persons as we have deemed relevant and
necessary as a basis for the opinion hereinafter set forth. In such examination,
we have assumed the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified or photostatic copies, the authenticity of the originals of such
latter documents, the genuineness of all signatures, and the correctness of all
representations made therein. We have further assumed that the final executed
Documents are substantially the
<PAGE> 2
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 2
same as those that we have reviewed and that there are no agreements or
understandings between or among the parties to the Documents with respect to the
transactions contemplated therein other than those contained in the Documents.
Finally, our opinions are based on the assumption that all parties to the
Documents will comply with the terms thereof, including all tax reporting
requirements contained therein.
Based on the foregoing, subject to the next succeeding paragraph, and
assuming full compliance with all the terms of the Documents, we hereby adopt
and confirm as our opinion the description in the Prospectus under the caption
"Material Federal Income Tax Consequences," insofar as such statements
constitute matters of law or legal conclusions and except to the extent
qualified therein. Such description does not purport to discuss all possible
federal income tax ramifications of the proposed issuance of the Senior Notes,
but with respect to those federal income tax consequences which are discussed,
in our opinion, the description is accurate in all material respects.
The foregoing opinion is based on current provisions of the Internal
Revenue Code of 1986, as amended, the Treasury Regulations promulgated
thereunder, published pronouncements of the Internal Revenue Service, and case
law with respect thereto, any of which may be changed at any time with
retroactive effect. Further, you should be aware that opinions of counsel are
not binding on the Internal Revenue Service or the courts. We express no opinion
as to any matters not specifically covered by the foregoing opinion, or as to
the effect on the matters covered by this opinion on any other matters, or as to
the laws of any other jurisdictions. Additionally, we undertake no obligation to
update this opinion in the event there is either a change in the legal
authorities, in the facts, including the taking of any action by any party to
any of the transactions described in the Documents pursuant to any opinion of
counsel as required by any of the Documents relating to such transactions, or in
the Documents on which this opinion is based, or an inaccuracy in any of the
representations or warranties upon which we have relied in rendering this
opinion.
We consent to the filing of this letter as an exhibit to the
Registration Statement and to the references to this firm under the headings
"Tax Status", "Material Federal Income Tax Consequences" and "Legal Matters" in
the Prospectus, without admitting that we are "experts" within the meaning of
the 1933 Act or the rules or regulations of the Securities and Exchange
Commission thereunder, with respect to any part of the Registration Statement,
including this exhibit. This opinion may not be used for any other purpose.
Very truly yours,
/s/ Steel Hector & Davis LLP
<PAGE> 1
EXHIBIT 8.2
STEEL HECTOR & DAVIS LLP
November 2, 1999
Ryder Vehicle Lease Trust 1999-A
Ryder Truck Rental I LP
and Ryder Funding LP
c/o Ryder Truck Rental, Inc.
3600 NW 82nd Avenue
Miami, Florida 33166
Re: Ryder Vehicle Lease Trust 1999-A
--------------------------------
Ladies and Gentlemen:
We have acted as special counsel for Ryder Vehicle Lease Trust 1999-A,
a Delaware business trust (the "Issuer"), Ryder Truck Rental I LP, a Delaware
limited partnership ("RTR I LP"), and Ryder Funding LP, a Delaware limited
partnership (the "Transferor"), in connection with the proposed offering after
the date hereof by the Issuer of (a) $28,000,000 aggregate principal amount of
Class A-1 Asset Backed Senior Notes, $63,000,000 aggregate principal amount of
Class A-2 Asset Backed Senior Notes, $54,000,000 aggregate principal amount of
Class A-3 Asset Backed Senior Notes, $53,000,000 aggregate principal amount of
Class A-4 Asset Backed Senior Notes and $84,900,000 aggregate principal amount
of Class A-5 Asset Backed Senior Notes (collectively, the "Senior Notes"), in
each case to be issued pursuant to an indenture, dated as of October 1, 1999
(the "Indenture"), between U.S. Bank National Association, as indenture trustee
(in such capacity, the "Indenture Trustee") and the Issuer, and (b) $10,858,575
aggregate principal amount of Asset Backed Certificates (the "Certificates"), to
be issued by the Issuer pursuant to an amended and restated trust agreement,
dated as of October 1, 1999 (the "Issuer Trust Agreement") between the
Transferor and Chase Manhattan Bank Delaware, as owner trustee (in such
capacity, the "Owner Trustee"), except that a certificate with a principal
balance approximately equal to 1% of such aggregate principal amount is to be
issued to the Transferor and not so offered (the "Transferor Certificate") (the
Senior Notes and the Certificates other than the Transferor Certificate,
together, the "Offered Securities"). Concurrently with the issuance of the
Offered Securities, the Issuer will also issue $13,023,237.85 aggregate
principal amount of Subordinated Notes (the "Subordinated Notes") pursuant to
the Issuer Trust Agreement.
The Senior Notes, Certificates and Subordinated Notes (collectively the
"Securities") are to be secured by two special units of beneficial interest in
certain specified assets (each a "Series 1999-A SUBI" and, collectively, the
"SUBI") to be created pursuant to a second amended and
<PAGE> 2
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 2 of 15
restated trust agreement, dated as of February 1, 1998 (the "Origination Trust
Agreement"), among RTR I LP and Ryder Truck Rental II LP ("RTR II LP"), as
grantors (the "UTI Beneficiaries"), Ryder Truck Rental, Inc., as administrative
agent, RTRT, Inc., as trustee, Delaware Trust Capital Management, Inc., as
Delaware trustee, and U.S. Bank National Association, as trust agent, as
supplemented by a 1999-A supplement to the Origination Trust Agreement, dated as
of October 1, 1999 (the "1999-A SUBI Supplement", and, together with the
Origination Trust Agreement, the "SUBI Trust Agreement").
Pursuant to an underwriting agreement (the "Underwriting Agreement") to
be entered into among the Transferor, Ryder Truck Rental, Inc. ("Ryder") and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the
several underwriters (collectively, the "Underwriters") named in the
Underwriting Agreement, the Senior Notes are to be acquired and offered by the
Underwriters, as described in the Registration Statement on Form S-1 (File No.
333-81455), filed with the Securities and Exchange Commission ("SEC") on June
24, 1999, as amended by Amendment No. 1, filed with the SEC on September 17,
1999, Amendment No. 2, filed with the SEC on October 19, 1999, and Amendment No.
3, filed with the SEC on November 2, 1999 (the "Registration Statement"). As set
forth in the Registration Statement, the Senior Notes and the SUBI will be
issued under and pursuant to the conditions of the Indenture, the SUBI Trust
Agreement and the Issuer Trust Agreement, as the case may be. The Certificates
(except the Transferor Certificate) are to be acquired by the Underwriters, as
initial purchasers, pursuant to a purchase agreement (the "Purchase Agreement"),
to be entered into among the Transferor, Ryder and the Underwriters. The
Subordinated Notes and the Transferor Certificate will be retained by the
Transferor.
A. BASIS OF OPINIONS
-----------------
In connection with this opinion letter (the "Opinion"), we reviewed the
(a) Basic Documents (as defined in the SUBI Trust Agreement), (b) the
Registration Statement, (c) the Underwriting Agreement and (d) the Purchase
Agreement (collectively the "Reviewed Documents"). In this Opinion, (a)
capitalized terms defined in the Basic Documents are used with such meanings
unless otherwise defined herein; (b) "SUBI Trust" means the Sub-Trust (as
defined in the Origination Trust Agreement) created pursuant to the SUBI Trust
Agreement; (c) references to the Florida Statutes ("F.S.") shall refer to F.S.
1999 in effect as of the date hereof; and (d) "UCC" shall refer to the Uniform
Commercial Code of the State of Florida (Chapters 670-680, F.S.) in effect as of
the date of this Opinion. In this Opinion, capitalized terms defined in the
Basic Documents are used with such meanings unless otherwise defined herein, the
term "addressee" shall mean any person permitted to rely on this Opinion or any
reliance letter we may issue that refers expressly to the terms hereof, the
phrase "to our knowledge" shall mean the actual knowledge and conscious
attention of the attorneys of this firm who are materially
<PAGE> 3
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 3 of 15
involved in this matter, without any independent investigation, and the
"Transactions" shall mean the transactions effected pursuant to the Reviewed
Documents.
We have relied in this Opinion as to matters of fact, without
investigation, upon representations or certifications of officers of the
Transferor, RTR I LP, Ryder, public officials and others and the representations
and warranties contained in the Reviewed Documents. We assumed in this Opinion
that each instrument, when issued, and each agreement when executed and
delivered, will conform to the form thereof presented to us. In addition, we
assumed that: (a) the accuracy and completeness of all documents and records
that we have reviewed; (b) the genuineness of all signatures, the authenticity
of the documents submitted to us as originals: and (c) the conformity to
authentic original documents of all documents submitted to us as certified,
conformed or reproduced copies or exhibits. However, with respect to the
assumptions we made and as to our reliance upon such matters of fact and
information, to our knowledge, no information exists that conflicts with such
assumptions or that would make such reliance unwarranted.
In our examination we also have assumed, without any independent
investigation: (a) that all parties to the Reviewed Documents are duly organized
and validly existing in the jurisdictions in which they were organized and are
duly qualified to transact business as foreign corporations and in good standing
in the jurisdictions in which they transact business; (b) the due authorization,
execution and delivery of the Reviewed Documents by the parties thereto; (c) the
full legal power and authority of the parties thereto to execute, deliver and
perform their obligations under the Reviewed Documents; (d) that the Reviewed
Documents constitute the legal, valid and binding obligations of the parties
thereto, enforceable against each of them in accordance with its terms; (e) that
none of the Reviewed Documents has been modified, supplemented or subject to any
waiver; (f) that the parties to the Reviewed Documents have acted in good faith,
without notice of adverse claims, and have complied with all laws applicable to
each of them, as the case may be, that affect the Transactions; (g) that the
Transactions comply with all standards of good faith, fairness, public policy
and conscionability required by law; (h) that with respect to the Transactions
and the Reviewed Documents, sufficient consideration has been received by each
of the parties in respect of their respective obligations thereunder; (i) the
constitutionality and validity of all relevant laws, regulations and agency
actions unless a reported case has otherwise held; (j) there are no agreements
or understandings among the parties, written or oral, and there is no usage of
trade or course of prior dealing among the parties that would, in either case,
define, supplement or qualify the terms of the Transactions and the Reviewed
Documents; (k) no recipient of this opinion has reason to believe that the
opinions set forth herein are incorrect or that there has been any mutual
mistake of fact or misunderstanding, fraud, duress or undue influence relating
to the matters which are the subject of the Transactions and the Reviewed
Documents; and (l) the fulfillment of and timely compliance by the parties
thereto with all the terms and conditions of the Reviewed Documents and the
accuracy of all
<PAGE> 4
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 4 of 15
representations and warranties contained therein.
B. OPINIONS
--------
Based solely on and in reliance upon the foregoing and subject to the
limitations, exceptions and qualifications set forth herein, we are of the
opinion that:
1. CLASSIFICATION OF THE SENIOR NOTES AND CERTIFICATES AS DEBT
INSTRUMENTS; CLASSIFICATION OF THE ISSUER AS A PARTNERSHIP
(a) Based upon the assumptions, authorities and reasoning set
forth below, upon their issuance in accordance with the Reviewed Documents the
Senior Notes will and, although the matter is not free from doubt, under current
law the Certificates should, represent debt (i.e., will be treated as
indebtedness) under Florida law.
Florida law references standard, accepted definitions and
sources in defining the term "debt." For example, in HOLMAN ET AL. v. HOLLIS, 94
Fla. 614, 617 (1927), the court stated that the accepted definition of "debt"
is: "That which is due from one person to another, whether money, goods, or
services; that which one person is bound to pay to another; a thing owed."
Similarly, in TURNER v. GRUVER, 168 So.2d 192, 193 (Fla. 3rd DCA 1964), after
citing HOLMAN with approval, the court cited Black's Law Dictionary for the
proposition that a debt is: "...an obligation to pay a sum certain; or a sum
which may be ascertained by simple mathematical calculation from known facts,
regardless of whether the liability arises by contract or by operation of law."
See, also, Waters' Dictionary of Florida Law. The Offered Securities will
represent debt under all such definitions and, accordingly, the Offered
Securities will represent debt under Florida law generally.
We have in the following discussion assumed that for federal
income tax purposes the Senior Notes will represent debt, rather than equity,
the Certificates should represent debt, rather than equity, and the Issuer will
not be classified as an association taxable as a corporation (and we have
separately so opined and refer you to our opinion letter with respect thereto).
Florida income tax law utilizes, to the greatest extent possible, concepts of
law developed in connection with the federal income tax code. See Section
220.02(3), F.S. Neither the Florida Statutes nor the Florida Administrative Code
contain a provision that would require a different treatment of the Senior Notes
or Certificates for Florida corporate income tax purposes than for federal
income tax purposes. Accordingly, it is our opinion that the Senior Notes will
represent debt, rather than equity, and the Certificates should represent debt,
rather than equity, for Florida income tax purposes. Moreover, because the
factors utilized in distinguishing debt from equity for federal income tax
purposes are well developed and based upon standard, accepted criteria, it
<PAGE> 5
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 5 of 15
is our opinion that the Senior Notes will represent debt, rather than equity,
and the Certificates should represent debt, rather than equity, for purposes of
Florida law generally.
In addition to generally defining the term "debt," Florida law
also uses it in several specific contexts, none of which is inconsistent with
finding that the Offered Securities represent debt for purposes of Florida law.
For example, it is clear that the Offered Securities will represent debt for
purposes of the Florida Statutes governing attachment and garnishment.
Similarly, it is clear that the Offered Securities will represent debt for
purposes of the Florida Statutes governing fraudulent conveyances.
A debt is distinguished from an advancement in that a debt is
founded on a valuable consideration, entails the obligation of repayment, and
confers on the creditor the right to enforce it in the courts. See 17 Fla. Jur.
2d, Decedents' Property, Section 92, citing 3 Am. Jur. 2d, Advancements, Section
2. It is clear that the Offered Securities will be based upon valuable
consideration, compel repayment and permit enforcement in a Florida court.
In distinguishing a debt from a trust, it has been held that
the matter depends upon the manifested intention of the parties, and that, if it
is intended that the person receiving money shall have unrestricted use thereof,
being liable to pay a similar amount with or without interest, a debt is
created. BANKERS LIFE & CASUALTY CO. v. GAINES CONSTR. CO., 199 So.2d 482, 484
(Fla. 3rd DCA 1967). It is manifestly clear on the face of the Reviewed
Documents that the Transactions contemplate the creation of a debtor-creditor
relationship between the Issuer and the holders of the Offered Securities.
In light of the foregoing, and because the Offered Securities
will represent unconditional promises to pay sums certain plus interest on
definitely ascertainable dates, it is our opinion that the Senior Notes will
represent debt (i.e., will be treated as indebtedness) and the Certificates
should represent debt (i.e., should be treated as indebtedness), for purposes of
Florida law.
(b) Whether or not the Certificates are treated as debt for
Florida tax purposes, it is our opinion that (i) based upon the assumption that
the Issuer will not be classified as an association taxable as a corporation for
federal income tax purposes, which, with the consent of the addressees we have
assumed, and based upon the aforesaid utilization of federal income tax law
concepts by Florida income tax law, the Issuer should not be classified as an
association taxable as a corporation(1) for Florida income tax purposes, and
(ii) the Issuer should either be
- ---------------------
(1) "Corporation" includes domestic and foreign corporations;
joint-stock companies; limited liability companies (until
June 31, 1998); common-law declarations of trust; non-profit
corporations; agricultural cooperative marketing associations;
professional service corporations; foreign
<PAGE> 6
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 6 of 15
disregarded as an entity or classified as a partnership between the Transferor
and the holder or holders of the Certificates and, accordingly, the Issuer will
not be an entity subject to tax by the State of Florida. Additionally, if the
Certificates are not treated as debt and the Issuer is characterized as a
partnership formed between the Transferor and the holder or holders of the
Certificates, the portion of the amounts paid to each such Certificate holder
corresponding to interest paid on the Certificates will be classified as a
"guaranteed payment" for the use of capital within the meaning of Internal
Revenue Code Section 707(c), and all remaining taxable income or loss of such
partnership and any separately allocated items thereof will be allocated solely
to the Transferor. As partners of a partnership, corporate holders of the
Certificates may be subject to Florida income tax, Rule 12C-1.002, F.A.C.,
currently imposed at a 5.5% rate, on their share of all or a portion of the
Issuer's taxable income to the extent that such income is apportioned to Florida
under Florida law. Rule 12C-1.022(6)(e), F.A.C. (partners attributed respective
shares of partnership income and partnership apportionment factors).
However, if the Issuer is classified as a corporation subject
to Florida corporate income tax, it is our opinion that the Issuer should not
have a sufficient nexus with Florida to be subject to tax in the State of
Florida, whether or not the Certificates are treated as debt for Florida tax
purposes, although the matter is not free from doubt and there is no existing
authority so holding.
According to the Reviewed Documents and representations by
officials of the Transferor, the Issuer is not established pursuant to the laws
of Florida; has not established its domicile in the state of Florida; has not
sent any employee or contractor into Florida; and has no office or other
business location nor any interest in real or tangible property in Florida
(other than its indirect beneficial interest in the 1999-A Leases and Vehicles,
and its security interests in certain assets of the Origination Trust as
provided in the Back-Up Security Agreement and it's relationship with the
Administrative Agent and Maintenance Provider which are based in Florida). The
Reviewed Documents further state that the assets of Issuer will be limited to:
its beneficial interest in the SUBI Trust (evidenced by the 99% 1999-A SUBI
Certificate (as defined in the SUBI Supplement)); the right to receive Program
Operating Lease payments from Ryder Funding, L.P. a Delaware limited
partnership; a secured interest in the Subordinated Notes; a secured interest in
amounts credited to the Residual Value Surplus Account, the Reserve Fund and the
Contingent and Excess Liability Insurance Policies to secure the obligation of
Ryder Funding, L.P., to make the Program Operating Lease payments; and rights as
a third-party
- --------------------------------------------------------------------------------
unincorporated associations; private school corporations; and
all other organizations, associations, legal entities, and
artificial persons created by law. Section 220.03(1)(e), F.S.
This section further provides that the term "corporation" does
not include "partnerships of any type" and "private trusts."
ID. The Issuer is a business trust created under the Delaware
Business Trust Act, 12 Del. C. Section 3801 ET SEQ. , not a
"private trust."
<PAGE> 7
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 7 of 15
beneficiary of the SUBI Trust Agreement and the Administration Agreement.
Finally, the Reviewed Documents state that neither Issuer nor Ryder Funding,
L.P., will have a direct ownership interest or a security interest in any of the
1999-A Leases or Vehicles, except the security interests provided in the Back-Up
Security Agreement.
We further understand, based upon the Reviewed Documents and
representations by officials of the Transferor, and assume without independent
investigation that all or substantially all of the 1999-A Vehicles (as defined
in the SUBI Trust Agreement) are or will be titled outside of Florida (although
one or more of the 1999-A Vehicles may be operated in Florida by the Obligor
under the related 1999-A Lease (as defined in the SUBI Trust Agreement)), and
that all or substantially all of the 1999-A Leases will be kept outside of
Florida.
Based upon these representations, understandings and
assumptions, it is our opinion that if the Issuer, contrary to our opinion
above, is classified as a corporation for Florida income tax purposes, the
Issuer should not be subject to Florida corporate income tax because, for the
reasons hereinafter stated in this commentary, the Issuer should not have a
sufficient nexus with the State of Florida to be subject to corporate income tax
in Florida. First, Issuer's beneficial interest in the SUBI Trust will not, in
and of itself, subject Issuer to the tax. An interest in an entity subject to
Florida corporate income tax does not subject a non-Florida holder of that
interest to the tax. SEE Rule 12C-1.011(2)(b), F.A.C. Second, the mere existence
of Issuer's secured interests, third-party beneficiary interests and security
interests do not constitute exercising the privilege of conducting business or
earning or receiving income in Florida. Section 220.11(1), F.S. "Doing business"
means actively engaging in any transaction for the purpose of financial gain.
Rule 12C-1.003(5), F.A.C. Income derived from or attributable to sources within
Florida includes income from tangible or intangible property located or having a
situs in Florida and income from any activities carried on in Florida. ID.
Issuer's secured interests and third party beneficiary interests are passive
interests in intangible property which do not appear to have a situs in Florida.
Issuer's security interests as provided in the Back-Up Security Agreement should
be treated in a manner similar to a lease treated as a conditional sales-type
agreement, which does not create nexus. Rule 12C-1.011(l)(c)3, F.A.C. Third,
Issuer's leasing of its beneficial interest in the SUBI Trust (the 99% 1999-A
SUBI Certificate) to Ryder Funding, L.P., does not constitute conducting
business or earning or receiving income in Florida. Issuer will not lease its
interest in the SUBI Trust for use by Ryder Funding, L.P., in Florida. COMPARE
Rule 12C-1.011(1)(p)1., F.A.C. Issuer's interest in the SUBI Trust is also not
similar to the types of intangible property (trade names, trademarks and
patents) the licensing of which for use in Florida may subject a corporation to
the tax. ID. Issuer's interest in the SUBI Trust is not a type of intangible
property the use of which can be sourced to a particular locale.
<PAGE> 8
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 8 of 15
Even if Issuer's interests and activities were sufficient to
satisfy the threshold nexus requirements of Florida statutory and regulatory
law, we do not believe that its contacts with Florida should be sufficient to
satisfy the nexus requirements imposed under the Due Process and Commerce
Clauses of the United States Constitution, as discussed in numbered paragraph 2
below.
2. THE FLORIDA LOAN RULE
Although the matter is not free from doubt, and assuming that the
Senior Notes are deemed to be debt (as discussed above), if the matter were
properly presented to a Florida court having jurisdiction, and assuming
interpretation of relevant law on a basis consistent with existing authority,
such Florida court should hold that Rule 12C-1.011(1)(s) F.A.C. (the "Loan
Rule") will not be applied so as to subject a financial organization holder of a
Senior Note with absolutely no other Florida contacts(2) to Florida income or
franchise taxation solely as a result of an investment in an Senior Note.
The Loan Rule provides that a financial organization is subject to
Florida income or franchise taxation if it earns or receives interest from loans
secured by real or tangible property located in Florida, irrespective of place
of receipt, even if it has no other Florida contacts. Section 220.15(6), F.S.,
defines the term "financial organization" to include any bank, trust company,
savings bank, industrial bank, land bank, safe deposit company, private banker,
savings and loan association, credit union, cooperative bank, small loan
company, sales finance company or investment company. This definition is not
all-inclusive; "financial organization" also includes, but is not limited to,
real estate investment trusts and brokerage companies. Section 220.15(5)(c),
F.S.
- ----------------------
(2) Other Florida contacts, which might require a different
opinion than the one given herein, might include the purchase
of any other asset-backed security from a Florida issuer, or
the making of any secured loan in Florida, or other minimal
contacts, such as sending into Florida any employee, agent or
contractor, or having any office or affiliate in Florida. SEE
GENERALLY, Rule 12C-1.011(1)(a)-(v), F.A.C. (providing
non-exhaustive list of activities deemed to subject taxpayers
to Florida corporate income tax). No opinion is given herein
as to such circumstances.
<PAGE> 9
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 9 of 15
A threshold issue is whether the Senior Notes would be deemed "loans"
under the Loan Rule. In this regard, some guidance is provided in TAA 90(M)-005
(December 12, 1990).(3) The question posed to the Florida Department of Revenue
in TAA 90(M)-005 dealt with a Massachusetts investment company, wasseeking to
invest in a portfolio of tax-exempt municipal securities of Florida issuers,
including the State, counties, municipalities and political subdivisions,
agencies and instrumentalities of the State of Florida. The Florida Department
of Revenue stated that, under the scenario described, the company would not be
subject to Florida income taxation. The Florida Department of Revenue also noted
that, should the company obtain any loans secured by real or tangible property
located in Florida, it would become subject to Florida income tax.
The class of securities described in the TAA includes some which might
be secured by real or tangible property located in Florida, such as industrial
development bonds. Thus, the TAA suggests a distinction between bonds or other
debt securities, particularly those (such as the Senior Notes) issued in a
public offering, which might not be subject to the Loan Rule, and loans arising
out of more traditional commercial settings, which might be subject to the Loan
Rule.
The Florida Department of Revenue, in TAA 93(M)-003 (April 2, 1993),
again suggested that such a distinction could determine the applicability of
Florida income taxation. In TAA 93(M)-003 (April 2, 1993) a Massachusetts
Business Trust contained several funds, one of which included a fund invested in
tax-exempt municipal securities of Florida issuers. The TAA noted that the Fund
would become subject to Florida income taxation if the Fund held loans secured
by mortgages, deeds of trust, or other liens upon real or tangible personal
property located in Florida. However, the TAA then noted that: "Investment in
Florida Bonds, including general obligation bonds ('GOs'), revenue bonds
('RBs'), and industrial revenue bonds ('IRBs') will not in itself subject the
Fund to Florida income tax. Although these bonds may be secured, the investment
in these publicly traded bonds is to be distinguished from a private loan
secured by a
- --------------------------
(3) A Technical Assistance Advisement or TAA is a written response
by the Florida Department of Revenue to an inquiry made by a
particular taxpayer, is not legal precedent and generally may
not be relied upon by any other taxpayer. Section 213.22(l),
F.S. However, the reasoning of a particular TAA may be
instructive of the Department's current thinking on a given
legal issue.
<PAGE> 10
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 10 of 15
mortgage, deed of trust, or other lien upon real or tangible personal property
located within Florida."
At a federal level the Internal Revenue Service, in Rev. Rul. 79-251.
1979-2 Cum. Bull. 271, made a similar distinction between bonds and notes. The
Ruling considered a taxpayer that purchased mortgage-backed pass-through trust
certificates and that would have been subject to tax if viewed as receiving
interest from mortgage notes. However, the Ruling determined that the taxpayer
was not subject to federal income tax, in part because the certificates were
freely transferable; thus, the certificates were viewed as bonds rather than
notes. Therefore, the taxpayer received interest on a bond rather than interest
on the underlying mortgage notes.(4)
A similar distinction has been made under the federal and Florida
securities laws. Although the applicable statutes treat notes as securities,
applicable case law has created a distinction between securities and certain
notes arising in traditional commercial settings. See REVES v. ERNST & YOUNG,
110 S.Ct. 945 (1990); CHEMICAL BANK v. ARTHUR ANDERSEN & CO., 726 F.2d 930 at
939 (CA2 1984); HUNSSINGER v. ROCKFORD BUSINESS CREDITS, INC., 745 F.2d 484, 488
(CA7 1984); EXCHANGE NAT'L BANK OF CHICAGO v. TOUCHE ROSS & CO., 544 F.2d 1126,
1137 (CA2 1976); JUANITA MCCLURE v. FIRST NATIONAL BANK OF LUBBOCK, TEXAS, 497
F.2d 490, 492-494 (1974); and STATE v. Fried, 357 So.2d 211 (1978). In our
opinion the Senior Notes should be treated as securities rather than mere notes
under the federal and Florida securities laws.
- ----------------------
(4) Also of note is the fact that the Ruling dealt with a
pass-through "grantor" trust. Although each beneficiary of a
grantor trust generally is "treated as the owner" of a portion
of the trust, the Ruling did not extend the legal "fiction" so
as to treat the taxpayer as the owner of and the recipient of
interest on any of the underlying mortgages (the trust
assets). Similarly, although the SUBI Trust may be disregarded
and treated as a mere security device for federal income tax
purposes or for other purposes, it should not be disregarded
under the Florida corporate income tax code, and the Senior
Notes should not be treated as secured by tangible property.
Rather, the Senior Notes should be treated as secured by
intangible property, that is, by a pledge of the beneficial
interest in the SUBI Trust owned by the Issuer. See 1959 Op.
Atty. Gen. 059-229 (Nov. 16, 1959). The Loan Rule does not
apply to loans secured by intangible property.
<PAGE> 11
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 11 of 15
Although the TAA and the Loan Rule might be interpreted differently, we
believe the most compelling and reasonable interpretation is that which
differentiates between bonds or other debt securities, particularly those issued
in a public offering, which might not be subject to the Loan Rule, and loans
arising in more traditional commercial settings, particularly private
transactions, which might be subject to the Loan Rule. Under such an
interpretation, the Senior Notes would not be deemed "loans" and the Loan Rule
would not apply.
Even if the Senior Notes were deemed "loans" for purposes of the Loan
Rule, the Senior Notes should not be treated as "secured by real or tangible
property located in [Florida]" and the Loan Rule should also not apply for that
reason. According to the Reviewed Documents, the Senior Notes are not secured by
and represent no direct interest in the 1999-A Leases and Vehicles. The Issuer
has no direct interest (and has only a "back-up" or "protective" security
interest) in the Specified Leases and Vehicles and has only an indirect
beneficial interest in the SUBI Assets (as defined in the Origination Trust
Agreement). The Senior Notes should be treated as secured by Issuer's beneficial
interest in the SUBI Trust -- an intangible property -- and not as secured by
the underlying SUBI Assets. For this reason, the Senior Notes are secured only
by a pledge of intangible property and the Loan Rule should not apply. Further,
even if the Senior Notes were deemed to be secured by the 1999-A Vehicles, all
or substantially all of the 1999-A Vehicles are titled outside of Florida and
may or may not ever be used in Florida. We do not believe this tenuous
connection will create nexus.
Additionally, even if the Issuer and the SUBI Trust were classified as
corporations rather than partnerships under Florida law (see discussion in
numbered paragraph 1(b), above) and the Senior Notes were treated as equity
interests for purposes of the Florida corporate income tax, it is our opinion
that Senior Note holders which are non-Florida corporations should not be
subject to Florida corporate income tax solely by virtue of their investment in
said Senior Notes. Section 220.03(1)(e) and (aa), F.S. Rule 12C-1.01 1(2)(b),
F.A.C., provides that a non-Florida corporation is not subjected to Florida
corporate/franchise tax merely by holding stock in a Florida corporation or in
corporation that is subject to the Florida corporate income/franchise tax. By
extension of the Florida corporate income tax to other artificial entities --
including business trusts -- this rule applies to any interest in a taxable
entity which is subject to Florida corporate income tax. For that reason, even
if the Senior Notes were treated as equity interests in the Issuer, Senior Note
holders which are not Florida corporations should not be subject to Florida
corporate income tax solely by reason of investing in said Senior Notes.
Moreover, application of the Loan Rule is limited by both the Due
Process Clause (Fourteenth Amendment) to the U.S. Constitution and the Commerce
Clause (Article I, sec. 8, cl. 3) of the U.S. Constitution). The Loan Rule is
tempered to the extent that the activity described therein is "exempted by the
Constitution or the laws of the United States." Rule 12C1.011(1),
<PAGE> 12
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 12 of 15
F.A.C. It is the intent of the Florida corporate income tax code to extend the
state's taxing jurisdiction to the fullest extent permitted by the federal
constitution. WESTERN ACCEPTANCE CORP. v. DEPARTMENT OF REVENUE, 472 So. 2d 497
(Fla. 1st DCA 1985). It is our opinion that the Due Process and Commerce Clauses
should not permit Florida to extend its taxing jurisdiction and subject
financial organizations to Florida corporate income tax solely by virtue of
their investment in the Senior Notes.
Both the Due Process and the Commerce Clauses require that there be
some connection or "nexus" between a state and a person sought to be taxed by
the state. The U S. Supreme Court has not definitively announced these nexus
requirements in a state corporate income tax case. However, both of those nexus
requirements were recently reviewed by the Supreme Court in a use tax case,
QUILL CORPORATION v. NORTH DAKOTA, 112 S.Ct. 1904 (1992).(5)
The nexus requirement under the Due Process Clause is the more easily
met of the two nexus standards. Generally, it will be met if a person
purposefully directs its activities towards the residents of a state, so as to
establish some definite link or minimum connection with the state, such that the
person has fair warning that it may be subject to the jurisdiction of the state
and such that requiring the person to defend a suit in the state would be
reasonable and would not offend traditional notions of fair play and substantial
justice. See QUILL, 112 S.Ct. at 1909-11, and the cases therein cited.
In our opinion, it is questionable at best whether a court would hold
that the purchase of a security in a nationally marketed public offering (or in
a private offering derivative to such nationally distributed public offering) as
described in the Reviewed Documents constitutes purposeful direction of one's
activities toward Florida residents, or otherwise establishes a definite link or
minimal connection with the State of Florida, so as to give the purchaser fair
warning that it may be subject to the jurisdiction of Florida courts and cause
it to be reasonable and fair to require the purchaser to defend a suit in
Florida.
- ---------------------------
(5) The Supreme Court has cited Quill in a state corporate income
tax case, BARCLAYS BANK PLC v. FRANCHISE TAX BOARD OF
CALIFORNIA, 512 U.S. 298 (1994), suggesting that the Due
Process Clause and Commerce Clause standards reiterated in
QUILL will also apply to nexus determinations under state
corporate income tax. At least one state court has agreed.
GUARDIAN INDUSTRIES CORP., v. DEPARTMENT OF TREASURY, 499 N.W.
2d 349,356 (Mich. Ct. App. 1994) (applying QUILL to Michigan
single business tax; SEE ALSO, CERRO COPPER PRODUCTS. INC. v.
DEPARTMENT OF REVENUE, 95 STN 242-1 (Ala. Admin. Ct.
1995)(applying QUILL to Alabama corporate income tax).
However, at least the South Carolina Supreme Court believes
that merely licensing intangible property for use in the state
is a sufficient connection to subject the licensor to
corporate income tax. GEOFFREY, INC. v. SOUTH CAROLINA TAX
COMMISSION. 437 S.E.2d 13 (S.C. 1993). There is no Florida
case on point.
<PAGE> 13
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 13 of 15
While the Due Process Clause focuses on concerns over fundamental
fairness, the Commerce Clause is concerned with the effects of state regulation
on the national economy. Accordingly, the nexus requirement under the Commerce
Clause is different from and more stringent than the nexus requirement under the
Due Process Clause. Under the Commerce Clause, there must, among other things,
be a "substantial nexus" between the person and the state and a tax must be
"fairly related" to services provided by the state. See QUILL, at pages 1911 et
seq., and the cases there cited, including COMPLETE AUTO TRANSIT, INC. v. BRADY,
430 U.S. 274 (1977).
At issue in QUILL was a North Dakota law, which on its face imposed a
use tax collection duty on every vendor who advertised in North Dakota three
times in a single year. The Supreme Court stated that the North Dakota law
illustrated well how a state tax might unduly burden interstate commerce. See
QUILL, at footnote 6, and accompanying text. The Florida Supreme Court recently
decided a similar case in which it ruled that a taxpayer's presence in Florida
for 3 days each year for purposes of making sales did not constitute substantial
nexus under the Commerce Clause. DEPARTMENT OF REVENUE v. SHARE INTERNATIONAL,
INC., 676 So. 2d 1362 (Fla. 1996).
The Loan Rule is subject to the same objections as the North Dakota law
found to be unconstitutional in QUILL. The Supreme Court found it unreasonably
burdensome that the North Dakota law required only three contacts per year. On
its face, the Loan Rule requires only one contact with Florida at any time. That
contact is even further attenuated under the circumstances described in the
Reviewed Documents, where the Senior Notes are not directly secured by any
property in Florida and the 1999-A Vehicles are mobile and may only sporadically
- -- if ever -- be present in Florida.
The Supreme Court also found it unreasonably burdensome that the North
Dakota law might subject a person to similar laws in multiple jurisdictions,
thus leading to a plethora of filing requirements. The same is true of the Loan
Rule. Moreover, it is also true that the Loan Rule presents the very real
possibility of a person being subjected to multiple taxation. In addition,
without diminishing the significance of the interests which the Supreme Court
protected in QUILL, we note that the free flow of credit and free access to
sources of credit are of particular and vital importance to interstate commerce
and the national economy. The Loan Rule might strangle that flow by making it
more difficult, more expensive or, in some cases, perhaps even impossible to
access national or regional credit markets through public offerings of
securities.
The dubious constitutionality of literally applying the Loan Rule is
exacerbated by its uncertain scope and its uncertain statutory underpinning.(6)
Under these circumstances, a Florida
- ---------------------------
(6) It is true that Section 220.15, F.S., includes somewhat
similar provisions relating to financial
<PAGE> 14
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 14 of 15
court should determine that taxpayers are entitled to the benefit of a clear and
reasonable statute, rather than a vague and questionable administrative
pronouncement, and should refuse to enforce the Loan Rule pending some specific
action on the part of the Florida Legislature. E.G., MASS BROTHERS, INC. v.
DICKINSON, 195 So.2d 193 (Fla. 1967) (tax can be imposed only within the "clear
and definite boundaries" of the law).
Our opinions in this numbered paragraph 2 are limited to the possible
subjugation of financial organization-holders of Senior Notes, which holders
have no other Florida contacts, to Florida income or franchise taxation solely
as a result of their investment in a Senior Note. The opinions in this numbered
paragraph 2 do not purport to deal with any other aspect of the Florida tax
laws, do not address any tax consequences to any other natural or other person
or persons, and do not address any federal tax consequences, any other state tax
consequences or any local tax consequences.
C. LIMITATIONS, EXCEPTIONS AND QUALIFICATIONS
The opinions set forth herein are based in part upon applicable laws
and regulations as they are currently compiled and reported on by customary
reporting services. It is possible that laws and regulations affecting the
opinions expressed herein might have been enacted that are not reflected in such
reporting services. We are not currently aware of the enactment of any such laws
and regulations.
This Opinion is limited to the laws of the State of Florida. We do not
express any opinion with respect to the application or applicability of
Florida's, or any other state or federal government's: (a) securities laws or
regulations; (b) laws or regulations relating to commodities, derivatives or
other similar instruments; (c) pension and employee benefit laws and
regulations; (d) antitrust and unfair competition laws and regulations; (e) laws
and regulations concerning filing and notice requirements; (f) fraudulent
transfer and fraudulent conveyance laws; (g) laws or regulations which limit the
rate of interest that a party may charge or collect; or (h) creditor's
- --------------------------------------------------------------------------------
organizations. However, it is an apportionment statute, which
presupposes that the financial organizations are subject to
tax. It does not address the nexus issue. It is interesting to
note, however, that its provisions include some which are at
least partially consistent with those of the Florida
intangible tax statute. Although it may be argued that the
concept of "doing business" in Florida, for purposes of the
Florida income and franchise tax, need not be entirely the
same as the concept of "transacting business" in Florida, for
purposes of the Florida intangible tax, it is nevertheless of
note that Section 199.175(b)3, F.S., an intangible tax
statute, provides that the "ownership of any interest in a
participation or syndication loan or pool of loans, notes, or
receivables shall not be sufficient to support a finding that
the owner of such interest is transacting business" in
Florida.
<PAGE> 15
Ryder Vehicle Lease Trust 1999-A
November 2, 1999
Page 15 of 15
rights laws, to the transactions contemplated by the Reviewed Documents. We note
that none of the Reviewed Documents (as hereinafter defined), other than the
Back-Up Security Agreement, provide that they are to be governed by the laws of
the State of Florida. We do not express any opinion herein as to the
enforceability of any of the Reviewed Documents.
This Opinion is given and based upon the law as of the date hereof, and
we expressly disclaim any obligation to update this Opinion or to give notice to
any addressee or any third party of any future changes in facts or law,
including changes that might affect the opinions set forth herein. The foregoing
opinions are also subject to applicable laws respecting limitations of actions.
The opinions expressed herein are limited to the matters expressly set
forth herein, and no opinion is to be inferred or implied beyond the matters so
stated. Captions used in this Opinion are for convenience only, and should not
be regarded as having any independent meaning. The foregoing Opinion is
expressly subject to there being no material change in the law effective after
the date hereof.
We consent to the filing of this letter as an exhibit to the
Registration Statement and to the references to this firm under the headings
"Delaware and Florida Tax Consequences" and "Legal Matters" in the Prospectus,
without admitting that we are "experts" within the meaning of the 1933 Act or
the rules or regulations of the Securities and Exchange Commission thereunder,
with respect to any part of the Registration Statement, including this exhibit.
This opinion may not be used for any other purpose.
Very truly yours,
/s/ Steel Hector & Davis LLP
<PAGE> 1
Exhibit 10.4
===============================================================================
RYDER TRUCK RENTAL LT,
as Origination Trust,
RYDER TRUCK RENTAL I LP
and
RYDER TRUCK RENTAL II LP,
as UTI Beneficiaries,
RYDER TRUCK RENTAL, INC.,
as Administrative Agent,
and
RYDER TRUCK RENTAL, INC.,
as Maintenance Provider
----------------------------------------------
1999-A
ADMINISTRATION SUPPLEMENT
Dated as of October 1, 1999
----------------------------------------------
===============================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE TEN
DEFINITIONS
Section 10.01. Definitions................................................... 2
Section 10.02. Interpretative Provisions..................................... 6
ARTICLE ELEVEN
SERVICING OF THE 1999-A LEASES AND THE 1999-A VEHICLES
Section 11.01. Identification of 1999-A Vehicles and 1999-A Leases;
Securitization Value........................................ 7
Section 11.02. Extensions; Administrative Modifications and
Fixed Charge; Term.......................................... 7
Section 11.03. Reallocation and Repurchase of 1999-A Leases and
1999-A Vehicles............................................. 8
Section 11.04. Collections and Payment Date Advance Reimbursement............10
Section 11.05. Net Deposits..................................................12
Section 11.06. Servicing Compensation........................................12
Section 11.07. Advances......................................................13
Section 11.08. Third Party Claims............................................13
Section 11.09. Contingent and Excess Liability Insurance Policies............14
Section 11.10. Reporting by the Administrative Agent; Delivery of
Certain Documentation.......................................14
Section 11.11. Accountants' Reports..........................................14
Section 11.12. Annual Officer's Certificate..................................14
Section 11.13. Administrative Agent Defaults; Termination of
Administrative Agent........................................15
Section 11.14. Administrative Agent Representations and Warranties...........16
ARTICLE TWELVE
MAINTENANCE OF 1999-A VEHICLES
Section 12.01. Maintenance Provider Default; Termination of
Maintenance Provider........................................17
<PAGE> 3
Page
----
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01. Termination of Supplement.....................................18
Section 13.02. Amendment.....................................................18
Section 13.03. Governing Law.................................................18
Section 13.04. Relationship of this Administration Supplement to
Other Trust Documents.......................................18
Section 13.05. Binding Effect................................................19
Section 13.06. Table of Contents and Headings................................19
Section 13.07. Counterparts..................................................19
Section 13.08. Further Assurances............................................19
Section 13.09. Third-Party Beneficiaries.....................................19
Section 13.10. No Waiver; Cumulative Remedies................................19
Section 13.11. No Petition...................................................19
EXHIBITS
Exhibit A - Schedule of 1999-A Vehicles.....................................A-1
<PAGE> 4
1999-A ADMINISTRATION SUPPLEMENT
This 1999-A Administration Supplement, dated as of October 1, 1999, is among
Ryder Truck Rental LT, a Delaware business trust (the "Trust"), Ryder Truck
Rental I LP and Ryder Truck Rental II LP, each a Delaware limited partnership,
as Grantors and initial beneficiaries of the Trust (in such capacities, the
"Grantors" and the "UTI Beneficiaries," respectively), Ryder Truck Rental,
Inc., a Florida corporation ("Ryder"), as administrative agent (in such
capacity, the "Administrative Agent"), and Ryder, as maintenance provider (in
such capacity, the "Maintenance Provider").
RECITALS
WHEREAS, the Grantors and UTI Beneficiaries, the Administrative Agent,
RTRT, Inc., as trustee (the "Trustee") of the Trust, Delaware Trust Capital
Management, Inc., as Delaware trustee, and U.S. Bank National Association, as
trust agent, have entered into that certain second amended and restated trust
agreement, dated as of February 1, 1998 (the "Origination Trust Agreement"),
pursuant to which the purposes of the Trust are, among other things, to take
assignments and conveyances of, and hold in trust and deal, in various Trust
Assets (as such term is defined in the Origination Trust Agreement);
WHEREAS, the parties hereto have entered into that certain
administration agreement, dated as of February 1, 1998 (the "Basic
Administration Agreement" and, as supplemented hereby, the "Administration
Agreement"), which provides for certain servicing obligations with respect to
the Trust Assets; and
WHEREAS, the parties acknowledge that, in connection with the
execution of the supplement to the Origination Trust Agreement, dated as of
October 1, 1999 (the "1999-A SUBI Supplement", and together with the
Origination Trust Agreement, the "SUBI Trust Agreement"), pursuant to which two
special unit of beneficial interest in the Trust (respectively, the "1999-A
Vehicle SUBI" and the "1999-A Lease SUBI", and collectively the "1999-A SUBIs")
will be created, it is necessary and desirable to enter into a supplemental
agreement to the Basic Administration Agreement providing for specific
servicing obligations in connection with the Trust Assets allocable to the
1999-A SUBIs.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1
<PAGE> 5
ARTICLE TEN
DEFINITIONS
Section 10.01. Definitions. Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in the Basic
Administration Agreement or in the SUBI Trust Agreement, as the case may be.
Whenever used in this Administration Supplement, unless the context otherwise
requires, the following words and phrases shall have the following meanings:
"Administration Agreement" has the meaning set forth in the Recitals.
"Administration Fee" means, with respect to the 1999-A SUBI Assets,
the fee payable on each Payment Date equal to, for each related Monthly Period,
one-twelfth of the product of (i) 1.00% and (ii) the aggregate Securitization
Value of all 1999-A Leases as of the first day of such Monthly Period,
calculated and paid based on a 360-day year consisting of twelve 30-day months.
"Administration Supplement" means this supplement to the Basic
Administration Agreement.
"Administrative Agent Letter of Credit" means a letter of credit,
surety bond or insurance policy issued by a depository institution, insurance
company or financial institution having a short-term credit rating at least
equal to the Required Deposit Rating and providing that the Indenture Trustee
or Trust Agent, as the case may be, may draw thereupon in the event the
Administrative Agent satisfies the Monthly Remittance Condition but fails to
deposit SUBI Collections into the 1999-A SUBI Collection Account on a monthly
basis.
"Advance" means a Sales Proceeds Advance or a Financial Component
Advance, as the context may require.
"Available Funds" has the meaning set forth in the Indenture.
"Basic Administration Agreement" has the meaning set forth in the
Recitals.
"Casualty Proceeds" means the sum of Insurance Casualty Proceeds and
Salvage Casualty Proceeds.
"Collection Period" means the three Monthly Periods immediately
preceding the month in which the related Payment Date occurs.
"Contingent and Excess Liability Insurance Policies" means those
certain vehicle liability, excess liability and other Insurance Policies issued
to the Administrative Agent for the benefit of the Administrative Agent, the
Trust, the UTI Beneficiaries, the Transferor or the Issuer from time to time,
to the extent such Insurance Policies relate to the 1999-A Vehicles, providing
coverage in excess of $10 million per accident and permitting multiple claims
in any policy period.
"Daily Advance Reimbursements" means amounts collected and netted on an
ongoing basis from SUBI Collections by the Administrative Agent to repay
Financial Component Advance amounts where (x) a Financial Component Advance
amount has been recovered in a subsequent payment made by the related Lessee in
respect of the Total Monthly Payment due with respect to the related Lessee
Vehicle, or (y) the Financial Component Advance has been outstanding for at
least 180 days after the due date of the invoice in respect of which such
Financial Component Advance was made.
2
<PAGE> 6
"Default Settlement" means, with respect to any Defaulted Vehicle, a
settlement of such default offered by the Administrative Agent to the related
Lessee.
"Deposit Date" means the Business Day immediately preceding the
related Payment Date.
"Excess Casualty Proceeds" means all Salvage Casualty Proceeds
received in excess of the Securitization Value of a Casualty Termination Lease.
"Financial Component Advance" means a Partial Financial Component
Advance or a Full Financial Component Advance, as the context may require.
"Financial Component Payment" means the payment made by a Lessee in
respect of the Financial Component of the related 1999-A Lease.
"Full Financial Component Advance" means, with respect to any Invoiced
Vehicle Group and any Monthly Period, an amount equal to the difference between
the Financial Component due and the Lessee Partial Financial Component Payment.
"Indenture" means that certain indenture, dated as of October 1, 1999,
between the Issuer and the Indenture Trustee.
"Initial Securities Balance" means the initial principal amount of the
Notes and the Trust Certificates.
"Insurance Casualty Proceeds" means all Insurance Proceeds received in
respect of damage to a 1999-A Vehicle relating to a Casualty Termination Lease.
"Invoiced Vehicle Group" means, with respect to a Monthly Period and a
Lessee, one or more groups of Vehicles (which groups may include Vehicles
allocated to one or more Sub-Trusts) the Total Monthly Payments for which are
billed on a single invoice for such Monthly Period.
"Issuer" means the Ryder Vehicle Lease Trust 1999-A.
"Lessee Partial Financial Component Payment" means, in connection with
the payment by a Lessee of less than 100% of the aggregate Total Monthly
Payment due with respect to an Invoiced Vehicle Group, an amount equal to the
product of (i) the amount paid by the Lessee toward such Total Monthly Payments
and (ii) the percentage obtained by dividing the Financial Component due by the
aggregate Total Monthly Payment due, in each case with respect to such Invoiced
Vehicle Group.
"Lessee Vehicles" means all Vehicles (whether allocated to one or more
Sub-Trusts) leased by the related Lessee for the related Monthly Period.
3
<PAGE> 7
"Majority Interest" means, with respect to the holders of Securities,
the holders of a majority of the aggregate principal balance of the related
Securities, except that Securities owned by the Issuer, the Transferor, the
Administrator or any of their respective Affiliates will not be included in
such determination.
"Monthly Remittance Condition" has the meaning set forth in Section
11.04(b).
"1999-A Leases" has the meaning set forth in Section 11.01(a).
"1999-A SUBI" has the meaning set forth in the 1999-A SUBI Supplement.
"1999-A SUBI Supplement" has the meaning set forth in the Recitals.
"1999-A Vehicles" has the meaning set forth in Section 11.01(a).
"99% 1999-A SUBI Certificates" has the meaning set forth in the 1999-A
SUBI Supplement.
"Origination Trust Agreement" has the meaning set forth in the
Recitals.
"Partial Financial Component Advance" means, with respect to any
Invoiced Vehicle Group and any Monthly Period, an amount equal to the
difference between (i) the product of (a) the Financial Component due and (b) a
percentage equal to (1) the amount paid by such Lessee with respect to the
Total Monthly Payment divided by (2) the Fixed Charge due and (ii) the Lessee
Partial Financial Component Payment.
"Payment Date" means the first Business Day after the 14th day of
January, April, July and October of each year, and, if necessary, the Senior
Note Final Payment Date (as defined in the Indenture), commencing with the
first Payment Date on January 17, 2000.
"Payment Date Advance Reimbursement" has the meaning set forth in
Section 11.04(a)(v)(B).
"Rating Event" has the meaning set forth in the Indenture.
"Repurchase Payment" means, with respect to events causing the
Administrative Agent to have an obligation to repurchase a 1999-A Lease and the
related 1999-A Vehicle, the Securitization Value amount due for such repurchase
pursuant to Section 11.03.
"Required Percentage" means the holders of not less than 66K% of the
aggregate outstanding principal balance of the Senior Notes or the Trust
Certificates, as the case may be.
"Residual Value Loss" means, in respect of a Collection Period, the
amount, if any, by which the aggregate net proceeds (excluding any Insurance
Proceeds) from the sale or other disposition of 1999-A Vehicles during such
Collection Period are less than the aggregate Securitization Values of the
related 1999-A Leases.
4
<PAGE> 8
"Residual Value Surplus" means, with respect to any Expired Vehicle,
the amount, if any, by which Sales Proceeds (excluding any Insurance Proceeds)
exceed the Securitization Value of the related 1999-A Lease as of the effective
date of termination of such 1999-A Lease.
"Residual Value Surplus Account" has the meaning set forth in the
1999-A SUBI Supplement.
"Residual Value Surplus Draw Amount" has the meaning set forth in the
Indenture.
"Retained Administration Fee" means, with respect to any Collection
Period, 1% of the Administrative Fee with respect to such Collection Period
representing the portion of the Administrative Fee owed by the Holder of the 1%
1999-A SUBI Certificates.
"Retained Certificate Distribution Amount" means, with respect to any
Collection Period, the sum of (i) 1% of SUBI Collections and (ii) 1% of the
Residual Value Surplus Draw Amount.
"Sales Proceeds" means, with respect to any Expired Vehicle or
Defaulted Vehicle, all proceeds received from the sale or other disposition of
such Expired Vehicle or Defaulted Vehicle (including any applicable Insurance
Proceeds), less all applicable Disposition Expenses, and in the case of an
Expired Vehicle, any outstanding Sales Proceeds Advance.
"Sales Proceeds Advance" means the amount advanced by the
Administrative Agent to the Issuer on a Deposit Date equal to the
Securitization Value of a 1999-A Lease relating to a 1999-A Vehicle that,
during the related Collection Period, became an Expired Vehicle and was not
sold by the Administrative Agent.
"Salvage Casualty Proceeds" means any proceeds received from the sale
of a 1999-A Vehicle related to a Casualty Termination Lease at salvage, net of
any applicable Disposition Expenses.
"Securitization Rate" means, with respect to a 1999-A Lease, an
annualized rate that is calculated as the sum of (i) the weighted average
interest rate on the Securities on the Closing Date, (ii) the Administration
Fee and (iii) 0.50%.
"Securitization Value" means, with respect to any 1999-A Lease, the
value calculated by the Administrative Agent equal to: (i) as of the Cutoff
Date, the Net Book Value of such 1999-A Lease and the related 1999-A Vehicle,
(ii) as of its Maturity Date, the Residual Value of such 1999-A Vehicle and
(iii) as of any other date, the present value, discounted at the Securitization
Rate, of the sum of (a) the aggregate Financial Component of Total Monthly
Payments remaining to be made and (b) the Residual Value of such 1999-A
Vehicle.
"SUBI Collections" means, with respect to any Collection Period, the
net amount collected or received by the Administrative Agent in respect of the
1999-A SUBI Assets during the three Monthly Periods comprising such Collection
Period of: (i) the Financial Component of all Total Monthly Payments (net of any
Daily Advance Reimbursements); (ii) Sales Proceeds (excluding Residual Value
Surplus), Casualty Proceeds (excluding Excess Casualty Proceeds) and Termination
Proceeds (excluding any Residual Value Surplus on the Sales Proceeds from the
sale of any Expired Vehicle);
5
<PAGE> 9
(iii) Reallocation Payments made by the Administrative Agent; (iv) Termination
Value Payments; (v) any Default Settlement or Termination Settlement paid by an
Obligor to the Administrative Agent and (vi) the Securitization Value payments
from the Administrative Agent's purchase of any 1999-A Vehicle (to the extent
not duplicative of any of clauses (i) through (v) above).
"Termination Settlement" means, with respect to any 1999-A Lease
terminated pursuant to the related Lessee's exercise of the Annual Termination
Option where such 1999-A Lease requires the related Lessee to purchase such
Vehicle for its Termination Value, a settlement offered by the Administrative
Agent to such Lessee to release such Lessee from such requirement.
"Titling Grace Period Vehicles" means 1999-A Vehicles having an
aggregate Cutoff Date Securitization Value not to exceed $_________ that as of
the Closing Date were titled in the name of Ryder but will either (i) be titled
in the name of the Trust or the Trustee on behalf of the Trust during the
Titling Grace Period or (ii) purchased by the Administrative Agent pursuant to
Section 11.03(c).
"Trust Agreement" means that certain trust agreement, as amended and
restated as of October 1, 1999, between the Transferor and the Owner Trustee.
"Trust Certificate" has the meaning set forth in the Trust Agreement.
"Trustee" has the meaning set forth in the Recitals.
"Vehicle Representation Date" means, with respect to any 1999-A
Vehicle, the Cutoff Date.
Section 10.02. Interpretative Provisions. For all purposes of this
Administration Supplement, except as otherwise expressly provided or unless the
context otherwise requires, (i) terms used in this Administration Supplement
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to words such as "herein", "hereof" and the like shall refer to
this Administration Supplement as a whole and not to any particular part,
Article or Section within this Administration Supplement, (iii) references to a
Section such as "Section 11.01" or an Article such as "Article Eleven" shall
refer to the applicable Section or Article of this Administration Supplement,
(iv) the term "include" and all variations thereof shall mean "include without
limitation", (v) the term "or" shall include "and/or" and (vi) the term
"proceeds" shall have the meaning ascribed to such term in the UCC.
6
<PAGE> 10
ARTICLE ELEVEN
SERVICING OF THE 1999-A LEASES AND 1999-A VEHICLES
Section 11.01. Identification of 1999-A Vehicles and 1999-A Leases;
Securitization Value.
(a) The Administrative Agent hereby identifies and allocates as 1999-A
SUBI Assets the Vehicles more particularly described on Exhibit A hereto and
the Leases relating to such Vehicles (respectively, the "1999-A Leases and the
"1999-A Vehicles"). Exhibit A shall set forth as to each 1999-A Lease or 1999-A
Vehicle, as the case may be, the (i) vehicle identification number, (ii) date
of origination, (iii) Net Book Value, (iv) Residual Value, (v) Financial
Component, (vi) Fixed Charge and (vii) number of months remaining from the
Cutoff Date to the month in which the Maturity Date occurs.
(b) The Administrative Agent shall calculate a Securitization Value
for each 1999-A Lease. For each 1999-A Lease, (i) the Financial Component of
Total Monthly Payments will equal the constant payment required to amortize the
Net Book Value of such 1999-A Lease and the related 1999-A Vehicle to the
Residual Value of such 1999-A Vehicle over the related Lease Term at the
Securitization Rate and (ii) the Securitization Value at any time will
represent the principal amount of Securities that can be amortized by the sum
of the Financial Component due over the remaining Lease Term, plus the Residual
Value, in each case discounted at the Securitization Rate.
Section 11.02. Extensions; Administrative Modifications and Fixed
Charge; Term.
(a) The Administrative Agent (i) shall not grant an Extension with
respect any 1999-A Leases and (ii) may make one Administrative Modification
with respect to any 1999-A Lease, with each additional Administrative
Modification constituting an Extension for purposes of this Section. In the
event the Administrative Agent makes an Extension, it shall, on the Deposit
Date related to the Collection Period in which the Administrative Agent
discovers or is notified that such Extension was made, (i) deposit or cause to
be deposited into the 1999-A SUBI Collection Account an amount equal to the
Securitization Value of the related 1999-A Lease as of the last day of the
related Collection Period and (ii) direct the Trustee to either reallocate such
1999-A Lease and the related 1999-A Vehicle from the 1999-A SUBIs to the UTI or
cause such 1999-A Lease and 1999-A Vehicle to be conveyed to the Administrative
Agent as described in Section 11.03.
(b) The Administrative Agent shall not exercise its power under any
1999-A Lease to (i) modify the Fixed Charge portion of the Total Monthly
Payment of any 1999-A Lease as in effect as of the Cutoff Date, except when
implementing in the ordinary course of business the inflation indexing
provisions thereof, or (ii) except as set forth in Section 11.02(a), modify the
Lease Term of any 1999-A Lease as in effect as of the Cutoff Date. The
Financial Component of each 1999-A Lease will be established as of the Cutoff
Date and will not change over the Lease Term. In the event the Administrative
Agent modifies the Fixed Charge, the Financial Component or the Lease Term of
any 1999-A Lease in effect as of the Cutoff Date, the Administrative Agent
shall, on the Deposit Date related to the Collection Period in which such
modification occurs, (i) deposit or cause to be deposited into the 1999-A SUBI
Collection Account an amount equal to the Securitization Value of the related
1999-A Lease as of the last day of the related Collection Period and (ii)
direct the Trustee to either reallocate such 1999-A Lease and the related
1999-A Vehicle from the 1999-A SUBIs to the UTI or cause such 1999-A Lease and
1999-A Vehicle to be conveyed to the Administrative Agent as described in
Section 11.03.
7
<PAGE> 11
Section 11.03. Reallocation and Repurchase of 1999-A Leases and 1999-A
Vehicles.
(a) The Administrative Agent hereby makes to the other parties hereto
and the parties to the SUBI Trust Agreement the representations and warranties
contained in Section 2.05(a) of the Basic Administration Agreement as to each
1999-A Lease and 1999-A Vehicle as of the Vehicle Representation Date. The
Administrative Agent also hereby represents and warrants that it used no
adverse selection procedures in selecting any of the 1999-A Leases for
inclusion in the 1999-A Lease SUBI and that it is not aware of any bias in the
selection of the 1999-A Leases which would cause delinquencies or losses on the
1999-A Leases to be worse than any other Leases held by the Origination Trust;
provided, however, that the Administrative Agent can make no assurance as to
the actual delinquencies or losses on the 1999-A Leases. For purposes of this
Section, all references in Section 2.05 of the Basic Administration Agreement
to "this Agreement" shall be deemed to be references to the Administration
Agreement as defined herein.
(b) In addition to the requirements set forth in Section 2.05 of the
Basic Administration Agreement, the Administrative Agent shall be required to
purchase a 1999-A Vehicle prior to the Maturity Date of the related 1999-A
Lease and remit to the 1999-A SUBI Collection Account an amount equal to the
Securitization Value of such 1999-A Lease as of the effective date of
termination if: (i) such 1999-A Lease becomes a Casualty Termination Lease,
and, pursuant to such 1999-A Lease, the Administrative Agent is responsible for
paying for the loss or theft of or damage to such 1999-A Vehicle; (ii) the
Administrative Agent (A) re-rates such 1999-A Vehicle for excess mileage and
such change modifies the Residual Value or the Lease Term or (B) invoices the
related Lessee for a material mileage surcharge under such 1999-A Lease for
such 1999-A Vehicle; (iii) at the request of the related Lessee, the
Administrative Agent permits such Lessee to (A) terminate such 1999-A Lease
other than through exercise of the Annual Termination Option or (B) reduce or
delay payments due in respect of the Financial Component of such 1999-A Lease;
(iv) the related Lessee exercises the Annual Termination Option or such 1999-A
Lease becomes a Default Termination Lease and the Administrative Agent (A)
releases such Lessee from any applicable obligation to purchase such 1999-A
Vehicle for its Termination Value (except in connection with a Default
Settlement or a Termination Settlement) or (B) neither demands that such Lessee
so purchase such 1999-A Vehicle nor offers a Termination Settlement or Default
Settlement to such Lessee for such 1999-A Vehicle; or (v) the related Lessee
exercises the Annual Termination Option or such 1999-A Lease becomes a Default
Termination Lease and such 1999-A Lease has been amended to eliminate any
obligation of such Lessee to thereupon purchase such 1999-A Vehicle for its
Termination Value.
8
<PAGE> 12
(c) During the Titling Grace Period, the Administrative Agent will
retitle the Titling Grace Period Vehicles in the name of the Trust or the
Trustee on behalf of the Trust. On or prior to the last day of the Titling
Grace Period, the Administrative Agent will provide each Rating Agency and the
Indenture Trustee with a Officer's Certificate of the Administrative Agent as
to the status of the retitling of the Titling Grace Period Vehicles. On the
first Business Day after the end of the Titling Grace Period, the
Administrative Agent will purchase each Titling Grace Period Vehicle not so
retitled during the Titling Grace Period by (i) depositing an amount equal to
the Securitization Value of the related 1999-A Lease as of the last day of the
Titling Grace Period in the 1999-A SUBI Collection Account and (ii) directing
the Trustee to cause such Titling Grace Period Vehicle and the related 1999-A
Lease to be transferred to or upon the order of the Administrative Agent. Such
retitling of the Titling Grace Period Vehicles shall be considered to have been
effected only at such time as the Administrative Agent shall have endorsed and
completed, and delivered to the appropriate state motor vehicle bureau, all
instruments legally required to effect the transfer of title into the name of
the Trust or the Trustee.
(d) The sole remedy of the Trust, the Related Beneficiary and the
Related Holder with respect to events causing the Administrative Agent to
repurchase certain 1999-A Vehicles as provided herein, including but not
limited to the failure of the Administrative Agent to retitle a Titling Grace
Period Vehicle during the Titling Grace Period, shall be to require the
Administrative Agent to make the payment of the Securitization Value, as set
forth herein. The obligation of the Administrative Agent under this Section
shall survive any termination of the Administrative Agent hereunder.
(e) Notwithstanding Section 2.05(g) of the Basic Administration
Agreement, the Administrative Agent may make Special Event Purchases with
respect to 1999-A Vehicles having an initial Securitization Value of no more
than (i) 5% of the Initial Securities Balance in any calendar year or (ii) 10%
of the Initial Securities Balance in the aggregate.
(f) In connection with the purchase by the Administrative Agent of an
Expired Vehicle pursuant to Section 2.05(f) of the Basic Administration
Agreement, with respect to the related 1999-A Lease, in the event that (i) no
Sales Proceeds Advance has been made, the purchase price of such Expired
Vehicle will equal the Securitization Value of such 1999-A Lease as of the date
of expiration and (ii) a Sales Proceeds Advance has been made, no additional
amounts need be remitted by the Administrative Agent; provided, however, that
the Administrative Agent shall relinquish all rights to reimbursement of any
such Sales Proceeds Advance.
(g) In the event any 1999-A Lease and the related 1999-A Vehicle are
reallocated to the UTI, until such time thereafter, if ever, as such Lease and
Vehicle are allocated to an Other SUBI, the Administrative Agent shall
indemnify, defend and hold harmless the original Beneficiaries from and against
any and all loss or liability with respect to or resulting from such Lease or
Vehicle (including the reasonable fees and expenses of counsel).
9
<PAGE> 13
Section 11.04. Collections and Payment Date Advance Reimbursements.
(a) The Administrative Agent shall, with respect to SUBI Collections
and amounts in respect of the 1999-A SUBI Certificates, from time to time,
determine the respective amounts and recipients and:
(i) during each Collection Period, in addition to the deposits
required by Section 2.06 of the Basic Administration Agreement,
deposit in the 1999-A SUBI Collection Account those amounts specified
in Section 11.02 and all Reallocation Payments and Repurchase Payments
pursuant to Section 11.03;
(ii) on, or prior to each Deposit Date, deposit in the 1999-A
SUBI Collection Account, all Advances, any Residual Value Surplus from
the sale of an Expired Vehicle for which the Administrative Agent made
a Sales Proceeds Advance, any Sales Proceeds from the disposition of
an Expired Vehicle at auction for which the Administrative Agent was
reimbursed during the related Collection Period pursuant to Section
11.07 and all Excess Casualty Proceeds, if any, for any 1999-A Lease
which became a Casualty Termination Lease during the related
Collection Period;
(iii) on each Deposit Date, instruct the Trustee (acting through
the Trust Agent) to transfer the amount of Residual Value Surplus, if
any, reflected in the Payment Date Certificate for each Expired
Vehicle which was a 1999-A Vehicle sold or otherwise disposed of
during the related Collection Period, from the 1999-A SUBI Collection
Account to the Residual Value Surplus Account;
(iv) on each Deposit Date, instruct the Trustee (acting through
the Trust Agent) to transfer to the 1999-A SUBI Collection Account,
prior to 5:00 p.m., New York City time, an amount equal to the
Residual Value Surplus Draw Amount, if any, reflected in the Payment
Date Certificate, from the Residual Value Surplus Account;
(v) on each Payment Date, pursuant to the Payment Date
Certificate, allocate (i) Available Funds and (ii) the Retained
Certificate Distribution Amount on deposit in the 1999-A SUBI
Collection Account with respect to the related Collection Period and
instruct the Trustee (acting through the Trust Agent) to make, no
later than 11:00 a.m., New York City time, the following deposits and
distributions in the following amounts and order of priority:
(A) to an account specified by the Holder of the 1% 1999-A
SUBI Certificate, the excess of (i) the Retained Certificate
Distribution Amount over (ii) the Retained Administration Fee;
(B) upon presentation of an Officer's Certificate of the
Administrative Agent setting forth the basis for the
determination of the amount to be transferred, to the
Administrative Agent the sum of
10
<PAGE> 14
any outstanding Sales Proceeds Advances which have been
outstanding as of the end of the related Collection Period for at
least 270 days (collectively, the "Payment Date Advance
Reimbursement").
(C) to or on behalf of the Administrative Agent, the
Administration Fee in respect of the related Collection Period,
together with any unpaid Administration Fees in respect of one or
more prior Collection Periods; and
(D) to the Note Distribution Account, the Reserve Fund and
Certificate Distribution Account, such distributions in the
amounts and order of priority as set forth in Sections 8.04(a)
and 10.01 of the Indenture;
(vi) on each Payment Date, instruct the Trustee (acting through
the Trust Agent), in writing to transfer all net investment earnings
on each of the 1999-A SUBI Collection Account and the Residual Value
Surplus Account to the Reserve Fund;
(vii) on each Payment Date, after all distributions required to
be made on such Payment Date have been made, instruct the Trustee
(acting through the Trust Agent), in writing to make the following
distributions from the Residual Value Surplus Account:
(A) to or on behalf of the Administrative Agent to the
extent not otherwise covered by Sales Proceeds or Termination
Proceeds, any Disposition Expenses relating to 1999-A Vehicles
sold by the Administrative Agent pursuant to the Administration
Agreement during the related Collection Period, together with any
such unreimbursed expenses or Advances incurred in one or more
prior Collection Periods; and
(B) to the Transferor, any remaining amounts on deposit in
the Residual Value Surplus Account.
(b) Notwithstanding Section 2.06 of the Basic Administration
Agreement, the Administrative Agent shall be permitted to retain the amounts
provided for in such Section received during a Monthly Period until the second
day following such Monthly Period, for so long as the following requirements
are met (collectively, the "Monthly Remittance Condition"):
11
<PAGE> 15
(i) (A) Ryder (or its successors pursuant to Section 2.13(b) of
the Basic Administration Agreement) is the Administrative Agent, (B)
Ryder's short-term debt is rated in the highest rating category by, or
is otherwise acceptable to, each Rating Agency and (C) no
Administrative Agent Default has occurred; or
(ii) if (A) the Administrative Agent obtains an Administrative
Agent Letter of Credit under which demands for payment may be made to
secure timely remittance of monthly SUBI Collections to the 1999-A
SUBI Collection Account and (B) the Trustee, the Indenture Trustee and
the Owner Trustee are provided with confirmation from each Rating
Agency to the effect that the use of an alternative remittance
schedule will not result in a Rating Event.
Pending deposit into the 1999-A SUBI Collection Account, SUBI Collections
(other than the Maintenance Component of Total Monthly Payments) may be
employed by the Administrative Agent at its own risk and for its own benefit
and shall not be segregated from its own funds.
(c) If, with respect to an Invoiced Vehicle Group, the related Lessee
pays (i) the Total Monthly Payment, the Administrative Agent shall deposit from
such payment into the 1999-A SUBI Collection Account the Financial Component
related to such Invoiced Vehicle Group and (ii) less than the Total Monthly
Payment due, the Administrative Agent shall deposit from such payment into the
1999-A SUBI Collection Account an amount equal to the Lessee Partial Financial
Component Payment.
(d) Payments on the 1999-A Leases shall be allocated pro rata using
the Financial Component and the Maintenance Component thereof. During each
Collection Period, all payments in respect of the Maintenance Component either
will not be deposited into the related Collection Account or will be withdrawn
daily therefrom; and in each case, all such payments shall be paid to or
retained by the Maintenance Provider.
Section 11.05. Net Deposits. Notwithstanding anything to the contrary
contained in this Administration Supplement, for so long as Ryder is the
Administrative Agent, the Administrative Agent shall be permitted to deposit
into the 1999-A SUBI Collection Account only the net amount distributable to
the Issuer, as holder of the 99% 1999-A Vehicle SUBI Certificate and pledgee of
the 99% 1999-A Lease SUBI Certificate, on the related Deposit Date. The
Administrative Agent shall, however, account to the Issuer, the Trustee, the
Trustee Agent, the Indenture Trustee (or any successor to the duties of the
Indenture Trustee), the Owner Trustee and the holders of Rated Securities as if
all of the deposits and distributions described herein were made individually.
Section 11.06. Servicing Compensation.
(a) As compensation for the performance of its obligations under this
Administration Supplement, the Administrative Agent shall be entitled to
receive the Administration Fee with respect to the 1999-A SUBI Assets.
(b) The Administrative Agent shall also be entitled to additional
servicing compensation with respect to the 1999-A SUBI Assets in the form of,
among other things, expense reimbursement and any other administrative fees or
similar charges under the 1999-A Leases, including but not limited to any late
payment fees now or later in effect.
12
<PAGE> 16
Section 11.07. Advances.
(a) If a Lessee's actual payments with respect to an Invoiced Vehicle
Group are less than the Total Monthly Payments due with respect thereto during
a Collection Period, and are (i) greater than or equal to the Fixed Charge for
such Invoiced Vehicle Group, the Administrative Agent shall make a Full
Financial Component Advance or (ii) less than the Fixed Charge for such
Invoiced Vehicle Group, the Administrative Agent shall make a Partial Financial
Component Advance, in each case on or before the related Deposit Date, unless,
pursuant to Section 11.07(c), such Advance is not required to be made.
(b) On each Deposit Date, the Administrative Agent shall make, by
deposit into the 1999-A SUBI Collection Account, Sales Proceeds Advances. After
the Administrative Agent has made a Sales Proceeds Advance with respect to an
Expired Vehicle, the Issuer shall have no claim against or interest in such
Expired Vehicle or any Sales Proceeds resulting from the sale or other
disposition thereof, except with respect to any related Residual Value Surplus.
If the Administrative Agent shall sell or otherwise dispose of an Expired
Vehicle after having made a Sales Proceeds Advance, the Issuer may retain all
of such Sales Proceeds Advance, and the Administrative Agent shall retain the
related Sales Proceeds up to the Securitization Value of the related 1999-A
Lease, and shall deposit the Residual Value Surplus, if any, into the 1999-A
SUBI Collection Account. If the Sales Proceeds are less than the Securitization
Value of the related 1999-A Lease, the Administrative Agent may deduct the
difference from SUBI Collections in respect of one or more future Collection
Periods. If the Administrative Agent has not sold an Expired Vehicle within 270
days after it has made a Sales Proceeds Advance, it shall be reimbursed for
such Sales Proceeds Advance from the 1999-A SUBI Collection Account. Within six
months of receiving such reimbursement, if the related 1999-A Vehicle has not
been sold, the Administrative Agent shall cause such 1999-A Vehicle to be sold
at auction and shall remit the proceeds associated with such auction sale to
the 1999-A SUBI Collection Account.
(c) Notwithstanding anything to the contrary in the Administration
Agreement, the Administrative Agent shall be required to make Advances only to
the extent that it determines that such Advance will be recoverable from future
payments on or in respect of the related 1999-A Lease or 1999-A Vehicle.
Section 11.08. Third Party Claims. In addition to the requirements set
forth in Section 2.08 of the Basic Administration Agreement, the Administrative
Agent shall immediately notify the Transferor (in the event that Ryder is not
acting as Administrative Agent) and the Indenture Trustee (or any successor to
the duties of the Indenture Trustee) upon learning of a claim or Lien of
whatever kind of a third party that would materially and adversely affect the
interests of the Transferor or the Trust with respect to the 1999-A SUBI
Assets.
13
<PAGE> 17
Section 11.09. Contingent and Excess Liability Insurance Policies. So
long as any Securities are outstanding, the Administrative Agent shall maintain
and pay when due all premiums with respect to, and the Administrative Agent may
not terminate or cause the termination of, the Contingent and Excess Liability
Insurance Policies unless (i) a replacement Insurance Policy is obtained that
provides coverage against third party claims that may be raised against the
Trust or the Trustee on behalf of the Trust with respect to any 1999-A Vehicle
in an amount at least equal to $10 million per claim (which Insurance Policy
may be a blanket Insurance Policy covering the Administrative Agent and one or
more of its Affiliates) and (ii) in the case of Rated Securities, each Rating
Agency has delivered a letter to the holders of the Rated Securities to the
effect that such termination or any replacement insurance would not result in a
Rating Event. The obligations of the Administrative Agent pursuant to this
Section shall survive any termination of the Administrative Agent's other
obligations under the Administration Agreement until such time as claims can no
longer be brought that would be covered by such Insurance Policies, whether as
a result of the expiration of relevant statutes of limitations or otherwise.
Section 11.10. Reporting by the Administrative Agent; Delivery of
Certain Documentation.
(a) On or prior to the Closing Date, and periodically thereafter as
required in order to update the contents thereof upon any changes in the
matters certified therein, the Administrative Agent shall furnish to the
Trustee and the Related Beneficiary an Officer's Certificate listing the
officers of the Administrative Agent involved in, or responsible for, the
servicing of the 1999-A Leases.
(b) On or before each Determination Date, the Administrative Agent
shall, in addition to the information required in Section 4.01(c) of the Basic
Administration Agreement, to the extent that reimbursement is being requested
pursuant to such Section, include in the Officer's Certificate provided for in
such Section the amount of any transfer during the related Collection Period
from the Residual Value Surplus Account to the 1999-A SUBI Collection Account.
Section 11.11. Accountants' Reports. On or before April 30 of each
year, commencing with April 30, 2000 the Administrative Agent shall deliver or
cause to be delivered to the Issuer, the Indenture Trustee, each Rating Agency
and the Owner Trustee a report, prepared by the Independent Accountants of the
Administrative Agent, stating that such Independent Accountants have examined
the financial statements of the Administrative Agent (which may be financial
statements of its parent) for the preceding 12 months ended December 31 (or
such shorter period in the case of the first such report) in accordance with
generally accepted auditing standards, which examination included such tests of
the accounting records and such other auditing procedures as they considered
necessary in the circumstances, and that nothing came to the attention of such
Independent Accountants that caused them to believe that the servicing of such
1999-A Leases was not being conducted, or that distributions on the Rated
Securities were not being made, in each case in accordance with this Agreement,
except for such exceptions as such firm shall believe to be immaterial and such
other exceptions as shall be set forth in such statement.
Section 11.12. Annual Officer's Certificate. On or before April 30 of
each year, commencing April 30, 2000 the Administrative Agent shall deliver an
Officer's Certificate to the Issuer, the Indenture Trustee, each Rating Agency
and the Owner Trustee to the effect that a review of the activities of the
Administrative Agent during the preceding 12 months ended December 31 (or such
shorter period in the case of the first such Officer's Certificate) has been
made under the supervision of the officer executing such Officer's Certificate
with a view to determining whether during such period an Administrative Agent
Default has occurred, and (i) stating that, to the best knowledge of such
officer, no such Administrative Agent Default has occurred under the
Administration Agreement or (ii) if such a default has occurred, specifying
such default and the nature and status thereof.
14
<PAGE> 18
Section 11.13. Administrative Agent Defaults; Termination of
Administrative Agent.
(a) In addition to the provisions of Section 5.01(a) of the Basic
Administration Agreement, any of the following acts or occurrences shall
constitute an Administrative Agent Default under the Administration Agreement:
(i) the Administrative Agent shall fail to maintain or pay when
due the premium in respect of any Contingent and Excess Liability
Insurance Policy, which failure continues for ten Business Days after
discovery of such failure by an officer of the Administrative Agent or
receipt by the Administrative Agent of written notice thereof by the
Trustee or a Holder;
(ii) the Administrative Agent shall fail to deliver to the
Indenture Trustee (or any successor to the duties of the Indenture
Trustee) any report required to be delivered to the Indenture Trustee
or the Issuer pursuant to the Basic Documents to which the
Administrative Agent is a party, which failure continues for 30
Business Days after discovery of such failure by an officer of the
Administrative Agent or receipt by the Administrative Agent of written
notice thereof by the Indenture Trustee; or
(iii) the Administrative Agent shall fail to cause the delivery
to the Indenture Trustee for distribution to the Noteholders or to the
Owner Trustee for distribution to the Certificateholders any required
payment or fail to deliver to the Trustee (acting through the Trust
Agent) for distribution to the Indenture Trustee and the Owner Trustee
any required payment, which failure continues for five Business Days
after discovery of such failure by an officer of the Administrative
Agent or receipt by the Administrative Agent of notice thereof from
the Indenture Trustee, the Owner Trustee or holders of Securities
evidencing not less than 25% of the aggregate unpaid principal balance
of the Securities, voting together as a single class;
provided, however, that any such failure with respect to the 1999-A SUBIs shall
be an Administrative Agent Default only with respect to such 1999-A SUBIs and
not with respect to any other Sub-Trust.
(b) Upon the occurrence of any Administrative Agent Default under the
Administration Agreement, in addition to the requirements set forth in Section
5.01(b) of the Basic Administration Agreement, the Administrative Agent shall
provide to the Indenture Trustee, the Owner Trustee, and any holders of Rated
Securities, prompt notice of such failure or delay by it, together with a
description of its efforts to so perform its obligations.
15
<PAGE> 19
(c) In addition to the provisions of Section 5.01(c) of the Basic
Administration Agreement, if an Administrative Agent Default shall have
occurred and be continuing with respect to the 1999-A SUBIs, the Trustee on
behalf of the Trust shall, at the direction of the Required Related Holders, by
notice given to the Administrative Agent, each Rating Agency, the Related
Beneficiary and the holders of the Rated Securities, terminate the rights and
obligations of the Administrative Agent under this Administration Supplement in
accordance with such Section. In the event the Administrative Agent is removed
as administrative agent with respect to servicing the 1999-A SUBI Assets,
subject to the consent of the Trustee, the Required Related Holders shall
appoint a successor administrative agent. The successor Administrative Agent
shall accept its appointment by a written assumption in a form acceptable to
the Trustee. Such successor Administrative Agent shall be approved by the
Trustee, such approval not to be unreasonably withheld. With respect to any
Administrative Agent Default related to the 1999-A SUBI Assets, the Trustee,
acting on the direction of the Required Related Holders may waive any default
of the Administrative Agent. For purposes of this Section, so long as the Lien
of the Indenture is in place, the Required Related Holders shall be deemed to
be the Indenture Trustee (as Registered Pledgee of the 1999-A SUBI
Certificates), acting at the direction of the Required Percentage of the Senior
Noteholders and thereafter, the Owner Trustee, acting at the direction of the
Required Percentage of the Trust Certificateholders until the Aggregate
Certificate Balance has been reduced to zero.
(d) In the event the Administrative Agent is removed with respect to
servicing the 1999-A SUBI Assets, the Administrative Agent shall be entitled to
reimbursement for any outstanding Advances made pursuant to this Supplement, to
the extent of the funds available therefore with respect to all Advances made
by the Administrative Agent.
Section 11.14. Administrative Agent Representations and Warranties.
Effective as of the date hereof, the Administrative Agent hereby reaffirms the
representations and warranties set forth in Section 7.01 of the Basic
Administration Agreement. For purposes of this Section, references in Section
7.01 of the Basic Administration Agreement to "this Agreement" shall be deemed
to refer to the Administration Agreement as defined herein.
16
<PAGE> 20
ARTICLE TWELVE
MAINTENANCE OF 1999-A VEHICLES
Section 12.01. Maintenance Provider Default; Termination of
Maintenance Provider.
(a) Upon the occurrence of any Maintenance Provider Default under the
Administration Agreement, in addition to the requirements set forth in Section
6.01(b) of the Basic Administration Agreement, the Administrative Agent shall
provide to the Indenture Trustee, the Owner Trustee, and any holders of Rated
Securities, prompt notice of such failure or delay by the Maintenance Provider,
together with a description of the Maintenance Provider's efforts to so perform
its obligations.
(b) In addition to the provisions of Section 6.01(c) of the Basic
Administration Agreement, if a Maintenance Provider Default shall have occurred
and be continuing with respect to a 1999-A SUBI, the Trustee on behalf of the
Trust shall, at the direction of the Required Related Holders, by notice given
to the Administrative Agent, each Rating Agency, the Related Beneficiary and
the holders of the Rated Securities, terminate the rights and obligations of
the Maintenance Provider under this Administration Supplement in accordance
with such Section. In the event the Maintenance Provider is removed as
maintenance provider with respect to servicing the 1999-A SUBI Assets, subject
to the consent of the Trustee, the Required Related Holders shall appoint a
successor maintenance provider. The successor Maintenance Provider shall accept
its appointment by a written assumption in a form acceptable to the Trustee.
Such successor Maintenance Provider shall be approved by the Trustee, such
approval not to be unreasonably withheld. With respect to any Maintenance
Provider Default related to the 1999-A SUBI Assets, the Trustee, acting on the
direction of the Required Related Holders may waive any default of the
Maintenance Provider. For purposes of this Section, so long as the Lien of the
Indenture is in place, the Required Related Holders shall be deemed to be the
Indenture Trustee (as Registered Pledgee of the 1999-A SUBI Certificates)
acting at the direction of the Required Percentage of the Senior Noteholders
and thereafter, the Owner Trustee, acting at the direction of the Required
Percentage of the Trust Certificateholders until the Aggregate Certificate
Balance has been reduced to zero.
17
<PAGE> 21
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01. Termination of Supplement. This Administration
Supplement shall terminate upon the earlier to occur of (i) the termination of
the 1999-A SUBIs or (ii) the resignation or removal of the Administrative Agent
with respect to the 1999-A SUBIs in accordance with the terms of the
Administration Agreement. Any such termination hereunder shall effect a
termination only with respect to the 1999-A SUBI Assets and not as to Trust
Assets allocated to any other Sub-Trust, and shall not effect a termination of
the Basic Administration Agreement or any other Administration Supplement.
Section 13.02. Amendment. Notwithstanding the foregoing, this
Administration Supplement (and, accordingly, the Basic Administration
Agreement, insofar as it relates to the 1999-A SUBIs) may be amended from time
to time by the parties hereto (including to change the manner in which the
Residual Value Surplus Account is funded, including the elimination of the
Residual Value Surplus Account, or to change the remittance schedule for
depositing SUBI Collections and other amounts into the 1999-A SUBI Collection
Account) (i) upon confirmation from each Rating Agency to the effect that such
amendment would not cause a Rating Event or (ii) upon receipt of the consent of
holders of Rated Securities affected thereby holding not less than a Majority
Interest, for the purpose of adding any provisions to, changing in any manner
or eliminating any of the provisions of this Administration Supplement or
modifying in any manner the rights of the holders of Rated Securities;
provided, however, that (A)(1) no such amendment shall increase or reduce in
any manner the amount of, or accelerate or delay the timing of, collections or
payments in respect of the 1999-A SUBIs or the 99% 1999-A SUBI Certificates or
distributions (or the interest rate thereon) required to be made on any Rated
Securities and (2) no amendment of any type shall reduce the percentage of the
aggregate principal amount of Rated Securities required to consent to any such
amendment, in each case without the consent of all the holders or 100% of all
outstanding Rated Securities, as the case may be, and (B) an Opinion of Counsel
is delivered to the effect that, in addition to the information required by
Section 8.02(b)(ii) of the Basic Administration Agreement, after such
amendment, the Trust Certificates will properly be characterized as
indebtedness that is secured by the assets of the Trust.
Section 13.03. Governing Law. This Administration Supplement shall be
governed by and construed in accordance with the internal laws of the State of
New York without regard to any otherwise applicable principles of conflicts of
laws (other than Section 5-1401 of the New York General Obligations Law).
Section 13.04. Relationship of this Administration Supplement to Other
Trust Documents. Unless the context otherwise requires, this Administration
Supplement and the other Trust Documents shall be interpreted so as to give
full effect to all provisions hereof and thereof. In the event of any actual
conflict between the provisions of this Administration Supplement and (i) the
Origination Trust Agreement, with respect to the servicing of any Trust Assets,
the provisions of this Administration Supplement shall prevail and (ii) the
Basic Administration Agreement, the provisions of this Administration
Supplement shall control.
18
<PAGE> 22
Section 13.05. Binding Effect. The provisions of this Administration
Supplement shall be binding upon and inure to the benefit of the parties hereto
and their permitted successors and assigns, and all such provisions shall inure
to the benefit of the Trustee on behalf of the Trust.
Section 13.06. Table of Contents and Headings. The Table of Contents
and Article and Section headings herein are for convenience of reference only
and shall not define or limit any of the terms or provisions hereof.
Section 13.07. Counterparts. This Administration Supplement may be
executed in any number of counterparts, each of which so executed and delivered
shall be deemed to be an original, but all of which counterparts shall together
constitute but one and the same instrument.
Section 13.08. Further Assurances. Each party will do such acts, and
execute and deliver to any other party such additional documents or
instruments, as may be reasonably requested in order to effect the purposes of
this Administration Supplement and to better assure and confirm unto the
requesting party its rights, powers and remedies hereunder.
Section 13.09. Third-Party Beneficiaries. The Issuer, each holder or
registered pledgee of the 1999-A SUBIs and each Related Beneficiary shall be
third-party beneficiaries of the Administration Agreement. Except as otherwise
provided in the Administration Agreement, no other Person shall have any rights
hereunder.
Section 13.10. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of any party hereto, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided at law, in equity or otherwise.
Section 13.11. No Petition. The Administrative Agent and the
Maintenance Provider, by entering into this Agreement, in addition to
provisions of Section 8.14 of the Basic Administration Agreement, hereby
covenant and agree that they will not institute, or join in instituting, any
bankruptcy, reorganization, arrangement, insolvency or liquidation Proceeding,
or other Proceeding under federal or state bankruptcy or similar laws for a
period of one year and a day after payment in full of the Securities, against
the Transferor or the Issuer; provided, however, that 100% of the Senior
Noteholders, or, if no Senior Notes are then outstanding, the Subordinated
Noteholder, or, if no Subordinated Notes are then outstanding, 100% of the
Trust Certificateholders (in each case excluding the Transferor and any of its
Affiliates) may at any time institute or join in instituting any bankruptcy,
reorganization, insolvency or liquidation proceeding against the Transferor or
the Issuer.
19
<PAGE> 23
IN WITNESS WHEREOF, the parties hereto have caused this Administration
Supplement to be duly executed by their respective officers duly authorized as
of the day and year first above written.
RYDER TRUCK RENTAL LT
By: RTRT, INC.,
as Trustee
By:
--------------------------------------
Name:
Title:
RYDER TRUCK RENTAL I LP,
as UTI Beneficiary
By: RYDER TRUCK RENTAL I LLC,
as General Partner
By: RTR LEASING I, INC.,
as Manager
By:
--------------------------------------
Name:
Title:
RYDER TRUCK RENTAL II LP,
as UTI Beneficiary
By: RYDER TRUCK RENTAL II LLC,
as General Partner
By: RTR LEASING I, INC.,
as Manager
By:
--------------------------------------
Name:
Title:
20
<PAGE> 24
RYDER TRUCK RENTAL, INC.,
as Administrative Agent
By:
-----------------------------------
Name:
Title:
RYDER TRUCK RENTAL, INC.,
as Maintenance Provider
By:
-----------------------------------
Name:
Title:
21
<PAGE> 25
EXHIBIT A
SCHEDULE OF 1999-A VEHICLES
[Omitted. Copies on file with the Administrative Agent, the Trustee
and the Owner Trustee.]
A-1
<PAGE> 1
Exhibit 23.2
November 1, 1999
Ryder Funding LP
3600 NW 82nd Avenue
Miami, Florida 33166
Re: Ryder Vehicle Lease Trust 1999-A
Registration Statement on Form S-1 (File No. 333-81455)
-------------------------------------------------------
Dear Sirs:
We hereby consent to reference to this firm under the headings
"Additional Legal Aspects of the Origination Trust and the SUBIs -- Insolvency
Related Matters" and "Legal Matters" in the Prospectus forming a part of the
above referenced Registration Statement, without implying or admitting that we
are "experts" within the meaning of the Securities Act of 1933, as amended or
the rules and regulations thereunder, with respect to any part of the
Registration Statement.
Very truly yours,
/s/ Brown & Wood LLP
<PAGE> 1
Exhibit 23.3
CONSENT OF COUNSEL
------------------
We hereby consent to the reference to us in the Prospectus
constituting part of this Registration Statement on Form S-1, under the caption
"Legal Matters." In giving the foregoing consent, we do not thereby admit that
we come within the category of persons whose consent is required under Section
7 of the Securities Act of 1933, as amended, or the rules and regulations of
the Securities and Exchange Commission thereunder.
/s/ Richards, Layton & Finger PA
---------------------------------
Richards, Layton & Finger PA
Wilmington, Delaware
November 1, 1999
<PAGE> 1
EXHIBIT 23.4
Independent Auditors' Consent
RTRT Inc. as Trustee of Ryder Truck Rental LT
Chase Manhattan Bank Delaware, as
Owner Trustee for Ryder Vehicle Lease Trust 1999-A:
We consent to the use of our reports dated September 9, 1999 included herein
and to the reference to our firm under the heading "Experts" in the
registration statement.
KPMG LLP
Miami, Florida
October 29, 1999
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM T-1
Statement of Eligibility Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
U.S. BANK TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
United States 41-0257700
(State of Incorporation) (I.R.S. Employer
Identification No.)
U.S. Bank Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)
RYDER VEHICLE LEASE TRUST 1999-A
(Exact name of Registrant as specified in its charter)
Delaware 52-7000600
(State of Incorporation) (I.R.S. Employer
Identification No.)
3600 NW 82nd Avenue
Miami, Florida 33166
(Address of Principal Executive Offices) (Zip Code)
ASSET-BACKED NOTES
(Title of the Indenture Securities)
<PAGE> 2
GENERAL
1. GENERAL INFORMATION Furnish the following information as to the Trustee.
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe each
such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which the
Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this
statement of eligibility and qualification.
1. Copy of Articles of Association.*
2. Copy of Certificate of Authority to Commence Business.*
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).*
4. Copy of existing By-Laws.*
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consents of the Trustee required by Section 321(b) of the act.
7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority is incorporated by reference to Registration Number
333-70709.
* Incorporated by reference to Registration Number 22-27000.
<PAGE> 3
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, U.S. Bank Trust National Association, an Association organized and
existing under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the City of Saint Paul and State of Minnesota on the 28th day of October,
1999.
U.S. BANK TRUST NATIONAL ASSOCIATION
/s/ Laurie Howard
------------------------
Laurie Howard
Vice President
/s/ HARRY H. HALL, JR.
- ----------------------
Harry H. Hall, Jr.
Assistant Secretary
<PAGE> 4
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned, U.S. BANK TRUST NATIONAL ASSOCIATION hereby consents that
reports of examination of the undersigned by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Dated: October 28, 1999
U.S. BANK TRUST NATIONAL ASSOCIATION
/s/ Laurie Howard
------------------------------
Laurie Howard
Vice President
