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Exhibit
4.171
EXECUTION COPY
AMENDED AND RESTATED MASTER MOTOR VEHICLE
LEASE
AND SERVICING AGREEMENT (GROUP II)
dated as of February 14, 2007
among
RENTAL CAR FINANCE CORP.
as Lessor,
DTG OPERATIONS, INC.,
as Lessee and Servicer,
and those Subsidiaries of
Dollar Thrifty Automotive Group, Inc.
from time to time
becoming Lessees and Servicers hereunder
and
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
as Guarantor and Master Servicer
AS SET FORTH IN SECTION 21 HEREOF, LESSOR HAS ASSIGNED TO
THE TRUSTEE (AS DEFINED HEREIN) ALL OF LESSOR’S RIGHT, TITLE
AND INTEREST IN AND TO THIS LEASE. TO THE EXTENT, IF ANY, THAT THIS
LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE
UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE
JURISDICTION), NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED
THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN
THE ORIGINAL EXECUTED COUNTERPART NO. 1, WHICH SHALL BE IDENTIFIED
AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE
TRUSTEE ON THE SIGNATURE PAGE THEREOF.
[THIS IS NOT THE ORIGINAL EXECUTED COUNTERPART
NO. 1]
[THIS IS THE ORIGINAL EXECUTED COUNTERPART NO.
1
IF BEARING ORIGINAL SIGNATURES)]
TABLE OF CONTENTS
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SECTION 1.
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CERTAIN DEFINITIONS
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2
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Section 1.1.
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Certain Definitions
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2
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Section 1.2.
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Accounting and Financial Determinations
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2
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Section 1.3.
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Cross References; Headings
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2
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Section 1.4.
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Interpretation
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2
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SECTION 2.
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GENERAL AGREEMENT
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3
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Section 2.1.
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Leasing of Vehicles
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4
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Section 2.2.
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Right of Lessees to Act as Lessor’s Agent
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4
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Section 2.3.
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Payment of Purchase Price by Lessor
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4
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Section 2.4.
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Non-liability of Lessor
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5
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Section 3.1.
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Vehicle Lease Commencement Date
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6
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Section 3.2.
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Lease Commencement Date; Lease Expiration Date
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6
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SECTION 4.
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CONDITIONS PRECEDENT
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6
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Section 4.1.
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Conditions to Each Lease of Vehicles
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6
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Section 4.2.
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Additional Conditions to Leases of Refinanced Vehicles
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7
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SECTION 5.
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RENT AND CHARGES
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8
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Section 5.1.
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Payment of Rent
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8
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Section 5.2.
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Payment of Availability Payment
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8
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Section 5.3.
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Payment of Monthly Supplemental Payments
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8
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Section 5.4.
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Payment of Termination Payments, Casualty Payments, and Late
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Section 5.5.
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Late Payment
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8
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Section 5.6.
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Allocation of Rent and Charges
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9
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Section 6.1.
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Fleet Insurance
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9
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Section 6.2.
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Information
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9
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SECTION 7.
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CASUALTY OBLIGATION
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9
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ii
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SECTION 9.
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REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES
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SECTION 10.
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MAINTENANCE AND REPAIRS
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11
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SECTION 11.
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VEHICLE WARRANTIES
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11
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SECTION 12.
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VEHICLE USAGE REQUIREMENTS AND DISPOSITION
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11
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Section 12.2.
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Disposition Procedure
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12
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Section 12.3.
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Termination Payments
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12
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SECTION 13.
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LATE RETURN PAYMENTS
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13
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SECTION 14.
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REDESIGNATION OF VEHICLES
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13
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SECTION 15.
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GENERAL INDEMNITY
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14
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Section 15.1.
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Indemnity of the Lessor
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14
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Section 15.2.
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Indemnification of the Trustee
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15
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Section 15.3.
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Reimbursement Obligation by the Lessees
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16
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Section 15.4.
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Notice to Lessee of Claims
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16
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Section 15.5.
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Defense of Claims
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16
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SECTION 16.
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ASSIGNMENT
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17
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SECTION 17.
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DEFAULT AND REMEDIES THEREFOR
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17
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Section 17.1.
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Lease Events of Default
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17
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Section 17.2.
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Effect of Lease Event of Default
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18
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Section 17.3.
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Rights of Lessor Upon Lease Event of Default, Liquidation
Event
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of Default or Limited Liquidation Event of Default
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18
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Section 17.4.
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Rights of Trustee Upon Liquidation Event of Default, Limited
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Liquidation Event of Default, Manufacturer Event of Default
and
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Non-Performance of Certain Covenants
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19
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Section 17.5.
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Measure of Damages
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20
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Section 17.6.
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Application of Proceeds
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21
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SECTION 18.
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MANUFACTURER EVENTS OF DEFAULT
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21
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SECTION 19.
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CERTIFICATION OF TRADE OR BUSINESS USE
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22
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ii
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SECTION 21.
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RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL
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SECTION 22.
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MODIFICATION AND SEVERABILITY
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24
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SECTION 23.
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CERTAIN REPRESENTATIONS AND WARRANTIES
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25
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Section 23.1.
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Due Incorporation, Authorization, No Conflicts Etc.
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25
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Section 23.2.
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Financial Information; Financial Condition
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25
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Section 23.3.
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Litigation
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25
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Section 23.5.
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Necessary Actions
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26
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Section 23.6.
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Employee Benefit Plans
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26
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Section 23.7.
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Investment Company Act
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27
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Section 23.8.
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Regulations T, U and X
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27
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Section 23.9.
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Business Locations; Trade Names; Principal Places of
Business
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Section 23.11.
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Governmental Authorization
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27
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Section 23.12.
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Compliance with Laws
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27
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Section 23.13.
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Eligible Vehicles; Eligible Franchisees
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28
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Section 23.14.
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Supplemental Documents True and Correct
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28
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Section 23.15.
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Accuracy of Information
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28
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SECTION 24.
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CERTAIN AFFIRMATIVE COVENANTS
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28
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Section 24.1.
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Corporate Existence; Foreign Qualification
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28
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Section 24.2.
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Books, Records and Inspections
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28
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Section 24.3.
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Vehicle Disposition Program
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29
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Section 24.4.
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Reporting Requirements
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29
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Section 24.5.
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Taxes and Liabilities
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33
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Section 24.6.
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Compliance with Laws
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33
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Section 24.7.
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Maintenance of Separate Existence
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33
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Section 24.8.
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Master Collateral Agent as Lienholder
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34
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Section 24.9.
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Maintenance of Property
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34
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Section 24.10.
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Access to Certain Documentation and Information Regarding
the
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Section 24.11.
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Maintenance of Credit Enhancement
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35
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Section 24.12.
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Certain Additional Actions
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35
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Section 24.13.
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Maximum Depreciation Rate
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35
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Section 24.14.
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Minimum Interest Coverage Ratio and Net Worth.
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35
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SECTION 25.
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CERTAIN NEGATIVE COVENANTS
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35
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Section 25.1.
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Mergers, Consolidations
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35
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Section 25.2.
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Other Agreements
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36
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iii
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Section 25.4.
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Use of Vehicles
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36
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Section 25.5.
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No Financed Vehicles
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36
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SECTION 26.
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SERVICING COMPENSATION
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37
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Section 27.1.
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Guaranty
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38
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Section 27.2.
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Scope of Guarantor’s Liability
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38
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Section 27.3.
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Lessor’s Right to Amend this Lease
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38
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Section 27.4.
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Waiver of Certain Rights by Guarantor
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38
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Section 27.5.
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Lessees’ Obligations to Guarantor and Guarantor’s
Obligations to
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Section 27.6.
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Guarantor to Pay Lessor’s Expenses
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41
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Section 27.7.
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Reinstatement
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41
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Section 27.8.
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Pari Passu Indebtedness
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41
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Section 27.9.
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Third-Party Beneficiaries
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41
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Section 27.10.
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Tax Indemnity
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41
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SECTION 28.
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ADDITIONAL LESSEES
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42
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Section 28.1.
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Additional Lessees
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42
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SECTION 29.
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BANKRUPTCY PETITION AGAINST LESSOR
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43
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SECTION 30.
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SUBMISSION TO JURISDICTION
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43
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SECTION 31.
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GOVERNING LAW
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44
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SECTION 32.
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JURY TRIAL
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44
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SECTION 35.
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EXECUTION IN COUNTERPARTS
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45
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SECTION 36.
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EFFECTIVENESS
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45
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SCHEDULES AND ATTACHMENTS
iv
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Schedule 1
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Litigation Claims
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Schedule 3
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Business Locations
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ATTACHMENT A-1
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Refinancing Schedule
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ATTACHMENT A-2
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Vehicle Acquisition Schedule
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ATTACHMENT B
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Form of Power of Attorney
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ATTACHMENT C
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Form of Certification of Trade or Business
Use
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ATTACHMENT D
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Form of Affiliate Joinder in Lease
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ATTACHMENT E
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Form of Annual Certificate
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v
AMENDED AND RESTATED MASTER MOTOR VEHICLE
LEASE
AND SERVICING AGREEMENT
This Amended and Restated Master Motor Vehicle Lease and
Servicing Agreement (the " Base Lease " and as supplemented
by the Lease Annexes, this " Agreement " or " Lease
"), dated as of February 14, 2007, is by and among RENTAL CAR
FINANCE CORP., a special purpose Oklahoma corporation (the "
Lessor " or " RCFC "), DTG OPERATIONS, INC., an
Oklahoma corporation (" DTG Operations "), as lessee and
servicer, and those Subsidiaries of DTAG (as defined below) from
time to time becoming Lessees hereunder pursuant to Section
28 hereof (each, an " Additional Lessee "), as lessee
and servicer (DTG Operations and the Additional Lessees, in their
respective capacities as lessees, each a " Lessee " and,
collectively, the " Lessees ", and, in their respective
capacities as servicers, each a " Servicer " and,
collectively, the " Servicers "), and DOLLAR THRIFTY
AUTOMOTIVE GROUP, INC., a Delaware corporation (" DTAG "),
as Master Servicer (in such capacity, the " Master Servicer
") and as Guarantor (in such capacity, the " Guarantor ").
This Base Lease amends and restates the Master Motor Vehicle Lease
and Servicing Agreement, dated as of March 4, 1998, among RCFC,
Dollar Rent A Car Systems, Inc., Thrifty Rent-A-Car System, Inc.
and DTAG, as amended by (i) Amendment to Master Motor Vehicle Lease
and Servicing Agreement, dated as of November 19, 1998, (ii)
Amendment No. 2 to Master Motor Vehicle Lease and Servicing
Agreement, dated as of November 9, 2000, (iii) Amendment No. 3 to
Master Motor Vehicle Lease and Servicing Agreement, dated as of
December 14, 2000, (iv) Amendment No. 4 to Master Motor Vehicle
Lease and Servicing Agreement, dated as of December 31, 2001, (v)
Amendment No. 5 to Master Motor Vehicle Lease and Servicing
Agreement, dated as of January 31, 2002, (vi) Amendment No. 6 to
Master Motor Vehicle Lease and Servicing Agreement, dated as of
December 12, 2002, (vii) Amendment No. 7 to Master Motor Vehicle
Lease and Servicing Agreement, dated as of February 24, 2003,
(viii) Amendment No. 8 to Master Motor Vehicle Lease and Servicing
Agreement, dated as of March 24, 2004, (ix) Amendment No. 9 to
Master Motor Vehicle Lease and Servicing Agreement, dated as of
December 6, 2004, and (x) Amendment No. 10 to Master Motor Vehicle
Lease and Servicing Agreement, dated as of March 22, 2005.
W I T N E S S E T H :
WHEREAS, the Lessor (such capitalized term, together with all
other capitalized terms used herein, shall have the meaning
assigned thereto in Section 1 ) intends to purchase, finance
and refinance the purchase of, Eligible Vehicles from one or more
Manufacturers with the proceeds obtained from the issuance by the
Lessor of its Rental Car Asset Backed Variable Funding Notes,
Series 1998-1, pursuant to the Base Indenture and the Series 1998-1
Supplement thereto referred to below and any additional Series of
Notes identified in the related Series Supplement as a Group II
Series of Notes; and
WHEREAS, the Lessor desires to lease to the Lessees, and the
Lessees desire to lease from the Lessor, Eligible Vehicles for use
in the Lessees’ respective businesses, including subleasing
Vehicles to Eligible Franchisees;
NOW, THEREFORE, in consideration of the foregoing premises, and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
Section
1.1. Certain
Definitions. As used in this Lease and unless otherwise defined
herein or the context requires a different meaning, capitalized
terms not otherwise defined herein shall have the meanings assigned
to such terms in (a) the Series 1998-1 Supplement, dated as of
March 4, 1998, between RCFC, as issuer, and Bankers Trust Company
(now known as Deutsche Bank Trust Company Americas), a New York
banking corporation, as trustee (in such capacity, the "
Trustee ") (as such Series 1998-1 Supplement may be amended,
amended and restated, supplemented or otherwise modified from time
to time in accordance with the terms thereof, the " Series
1998-1 Supplement "), to the Amended and Restated Base
Indenture, dated as of February 14, 2007, between RCFC and the
Trustee (as may be further amended, amended and restated,
supplemented or otherwise modified from time to time in accordance
with the terms thereof, the " Base Indenture ") and any
additional Series Supplement to the Base Indenture relating to a
Series of Notes identified in such Series Supplement as a Group II
Series of Notes (any such Series Supplement, along with the Series
1998-1 Supplement, a " Group II Series Supplement ") and (b)
the Definitions List attached as Schedule 1 to the Base Indenture
as in effect as of the date hereof (as such Definitions List may be
amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with the terms thereof, the "
Definitions List "), provided , that any capitalized
term used but not defined herein and defined in a Group II Series
Supplement and the Definitions List shall have the meaning set
forth in the Group II Series Supplement.
Section
1.2. Accounting and
Financial Determinations. Where the character or amount of any
asset or liability or item of income or expense is required to be
determined, or any accounting computation is required to be made,
for the purpose of this Lease, such determination or calculation
shall be made, to the extent applicable and except as otherwise
specified in this Lease, in accordance with GAAP. When used herein,
the term "financial statement" shall include the notes and
schedules thereto.
Section
1.3. Cross References;
Headings. The words "hereof", "herein" and "hereunder" and
words of a similar import when used in this Lease shall refer to
this Lease as a whole and not to any particular provision of this
Lease. Annex, Section, Schedule and Exhibit references contained in
this Lease are references to Annexes, Sections, Schedules and
Exhibits in or to this Lease unless otherwise specified. Any
reference in any Section or definition to any clause is, unless
otherwise specified, to such clause of such Section or definition.
The various headings in this Lease are inserted for convenience
only and shall not affect the meaning or interpretation of this
Lease or any provision hereof.
Section
1.4.
Interpretation. In this Lease, unless the context otherwise
requires:
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(a)
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the singular includes the plural and vice
versa;
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2
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(b) reference
to any Person includes such Person’s successors and assigns
but, if applicable, only if such successors and assigns are
permitted by this Lease, and reference to any Person in a
particular capacity refers only to such Person in such
capacity;
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(c)
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reference to any gender includes the other
gender;
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(d) reference
to any Requirement of Law means such Requirement of Law as amended,
modified, codified or reenacted, in whole or in part, and in effect
from time to time;
(e) "including"
(and, with correlative meaning, "include") means including without
limiting the generality of any description preceding such term;
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(f)
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"or" is not exclusive;
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(g)
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provisions apply to successive events and
transactions; and
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SECTION 2. GENERAL AGREEMENT. (a) As
specified in the Lease Annexes, the Lessees and the Lessor intend
that this Lease be (i) an operating lease with respect to the
Acquired Vehicles and (ii) a financing arrangement with respect to
the Financed Vehicles.
(b) If,
notwithstanding the intent of the parties to this Lease, this Lease
is deemed by any court, tribunal, arbitrator or other adjudicative
authority in any proceeding (each, a " Court ") to
constitute a financing arrangement or otherwise not to constitute a
"true lease" with respect to the Acquired Vehicles, then it is the
intention of the parties that this Lease together with the Master
Collateral Agency Agreement, as such agreements apply to the
Acquired Vehicles, shall constitute a security agreement under
applicable law, and it is the intention of the parties that this
Lease together with the Master Collateral Agency Agreement, as such
agreements apply to the Financed Vehicles, shall in all events
constitute a security agreement under applicable law. Each Lessee
hereby acknowledges that it has granted to the Master Collateral
Agent, pursuant to the Master Collateral Agency Agreement, for the
benefit of the Trustee, a first priority security interest in all
of such Lessee’s right, title and interest in and to the
Lessee Grantor Master Collateral (as defined therein) as collateral
security for the prompt and complete payment and performance when
due (whether at stated maturity, by acceleration or otherwise) of
all of the obligations and liabilities of such Lessee to the Lessor
and the Trustee, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred (including interest accruing after the Lease Expiration
Date and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding), which may arise under, out of, or in
connection with, this Lease and any other document made, delivered
or given in connection herewith, whether on account of rent,
principal, interest, reimbursement obligations, fees, indemnities,
costs, or expenses (including all fees and disbursements of counsel
to the Lessor or the Trustee that are required to be paid by such
Lessee pursuant to the terms hereof).
3
Section 2.1.
Leasing of Vehicles. Subject to the terms and conditions
hereof, the Lessor agrees to lease to each Lessee and each Lessee
agrees to lease from the Lessor each additional Acquired Vehicle or
Financed Vehicle identified in Vehicle order summaries (each, a "
Vehicle Order ") produced from time to time by such Lessee,
listing Eligible Vehicles ordered by the Lessee for itself or as
agent for the Lessor, pursuant to the terms of any applicable
Eligible Vehicle Disposition Programs or otherwise. The Lessor
shall, subject to Section 4 and to compliance with the terms
of the Indenture, make available to the Lessees under this Lease
financing for Financed Vehicles in an aggregate amount, and
Acquired Vehicles for lease to the Lessees hereunder in an
aggregate Net Book Value, which collectively shall not exceed the
Maximum Lease Commitment. The applicable Lessee shall make
available to the Lessor (a) in the case of (i) the refinancing
of any other Eligible Vehicle pursuant to Section 2.3 of the Master
Collateral Agency Agreement (collectively (including, without
limitation, any Vehicles previously subject to any other Master
Lease and refinanced pursuant to such Master Lease), the "
Refinanced Vehicles "), and/or (ii) the refinancing of
Eligible Receivables, a schedule as set forth in Attachment
A-1 hereto containing information concerning the Refinanced
Vehicles and the Eligible Receivables of a scope agreed upon by the
Lessor and such Lessee (a " Refinancing Schedule "), and (b)
in the case of all other Vehicles, a schedule containing the
information with respect to the Vehicles included within the
Vehicle Order for such Vehicle as is set forth in Attachment
A-2 hereto, or in such form as is otherwise requested by the
Lessor (each, a " Vehicle Acquisition Schedule "). In
addition, each Lessee shall provide such other information
regarding such Vehicles as the Lessor may reasonably require from
time to time. The Lessor shall lease to the Lessees, and the
Lessees shall lease from the Lessor, only Vehicles that are
Eligible Vehicles. This Lease, together with the Vehicle
Disposition Programs and other incentive programs relating to the
Vehicles and any other related documents attached to this Lease or
submitted with a Vehicle Order or Refinancing Schedule
(collectively, the " Supplemental Documents "), will
constitute the entire agreement regarding the leasing of Vehicles
by the Lessor to the Lessees.
Section
2.2. Right of Lessees
to Act as Lessor’s Agent. The Lessor agrees that each
Lessee may act as the Lessor’s agent in placing Vehicle
Orders on behalf of the Lessor, as well as filing claims on behalf
of the Lessor for damage in transit, and other delivery related
claims with respect to the Vehicles leased hereunder;
provided , however , that the Lessor may hold the
applicable Lessee liable for such Lessee’s actions in
performing as the Lessor’s agent hereunder. In addition, the
Lessor agrees that each Lessee may make arrangements for delivery
of Vehicles to a location selected by such Lessee at such
Lessee’s expense. Each Lessee or any related Sublessee, as
applicable, may accept or reject Eligible Vehicles upon delivery in
accordance with such Lessee’s customary business practices,
and any Eligible Vehicle, if rejected, will be deemed a Casualty
hereunder. The applicable Lessee, acting as agent for the Lessor,
shall be responsible for pursuing any rights of the Lessor with
respect to the return of any Eligible Vehicle to the Manufacturer
thereof, or the applicable auction or dealer, as applicable,
pursuant to the preceding sentence. Each Lessee agrees that all
vehicles ordered as provided herein shall be Eligible Vehicles and
shall be ordered utilizing the procedures consistent with the
applicable Vehicle Disposition Program or any guidelines of the
Manufacturer, auction or dealer, as applicable, for the ordering or
purchasing of Non-Program Vehicles, in each case as and to the
extent applicable.
4
Section 2.3.
Payment of Purchase Price by
Lessor. Upon receipt of the Manufacturer’s invoice and
certificate of origin in respect of any new Vehicle, or such other
customary documentation in respect of any used Vehicle, the Lessor
or its agent shall pay or cause to be paid to the auction, the
dealer or the related Manufacturer, as applicable, the costs and
expenses incurred in connection with the acquisition of such
Vehicle under the applicable Vehicle Disposition Program (in the
case of a Program Vehicle) or otherwise (in the case of a
Non-Program Vehicle) as established by the invoice of the auction,
the dealer or the Manufacturer, as the case may be (the "
Initial Acquisition Cost "), for such Vehicle and the
applicable Lessee shall pay all applicable costs and expenses of
freight, packing, handling, storage, shipment and delivery of such
Vehicle to the extent that the same have not been included within
the Initial Acquisition Cost, provided that solely in the
case of any Refinanced Vehicle, and any Eligible Receivable, the
Lessor shall pay to the Master Collateral Agent (x) the aggregate
Net Book Value as of the Vehicle Lease Commencement Date of the
Refinanced Vehicles, and (y) the face amount of the Eligible
Receivables being refinanced on the Vehicle Lease Commencement
Date.
Section
2.4. Non-liability of
Lessor. The Lessor shall not be liable to a Lessee for any
failure or delay in obtaining Vehicles or making delivery thereof.
AS BETWEEN THE LESSOR AND THE LESSEES, ACCEPTANCE FOR LEASE OF THE
VEHICLES SHALL CONSTITUTE THE APPLICABLE LESSEE’S
ACKNOWLEDGMENT AND AGREEMENT THAT THE APPLICABLE LESSEE HAS FULLY
INSPECTED SUCH VEHICLES, THAT THE VEHICLES ARE IN GOOD ORDER AND
CONDITION AND ARE OF THE MANUFACTURE, DESIGN, SPECIFICATIONS AND
CAPACITY SELECTED BY SUCH LESSEE, THAT SUCH LESSEE IS SATISFIED
THAT THE SAME ARE SUITABLE FOR ITS USE AND THAT THE LESSOR IS NOT A
MANUFACTURER, AN AGENT OF THE MANUFACTURER OR OTHERWISE ENGAGED IN
THE SALE OR DISTRIBUTION OF VEHICLES, AND HAS NOT MADE AND DOES NOT
HEREBY MAKE ANY REPRESENTATION, WARRANTY OR COVENANT, EXPRESS OR
IMPLIED, WITH RESPECT TO MERCHANTABILITY, CONDITION, QUALITY,
CAPABILITY, WORKMANSHIP, DURABILITY OR SUITABILITY OF SUCH VEHICLES
IN ANY RESPECT OR IN CONNECTION WITH OR FOR THE PURPOSES OR USES OF
SUCH LESSEE, OR ANY WARRANTY THAT THE LEASED VEHICLES WILL SATISFY
THE REQUIREMENTS OF ANY LAW OR ANY CONTRACT SPECIFICATION, OR ANY
OTHER REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR
CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT THERETO, AND AS BETWEEN
THE LESSOR AND SUCH LESSEE, SUCH LESSEE AGREES TO BEAR ALL SUCH
RISKS AT ITS SOLE COST AND EXPENSE. EACH LESSEE SPECIFICALLY WAIVES
ALL RIGHTS TO MAKE CLAIMS AGAINST THE LESSOR AND ANY LEASED VEHICLE
FOR BREACH OF ANY WARRANTY OF ANY KIND WHATSOEVER AND, AS TO THE
LESSOR, AND EACH LESSEE LEASES THE LEASED VEHICLES "AS IS." The
Lessor shall not be liable for any failure or delay in delivering
any Vehicle ordered for lease pursuant to this Lease, or for any
failure to perform any provision hereof, resulting from fire or
other casualty, natural disaster, riot, strike or other labor
difficulty, governmental regulation or restriction, or any cause
beyond the Lessor’s direct control. IN NO EVENT SHALL THE
LESSOR BE LIABLE FOR ANY INCONVENIENCES, LOSS OF PROFITS OR ANY
OTHER CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES, WHATSOEVER OR
HOWSOEVER CAUSED, WHETHER RESULTING FROM ANY DEFECT IN OR ANY
THEFT, DAMAGE, LOSS OR FAILURE OF ANY VEHICLE, OR OTHERWISE, AND
THERE SHALL BE NO ABATEMENT OF RENT BECAUSE OF THE SAME.
5
SECTION 3. TERM.
Section
3.1. Vehicle Lease
Commencement Date. The " Vehicle Lease Commencement Date
" shall mean, for each Vehicle, the earlier of (a) the date
referenced in the Vehicle Acquisition Schedule or Refinancing
Schedule with respect to such Vehicle, and (b) the date that funds
are expended by the Lessor to acquire or finance the acquisition of
such Vehicle (with respect to such Vehicle, the " Vehicle
Funding Date "). A vehicle shall be deemed hereunder to be a
Vehicle leased under this Lease on each day during the period (the
" Vehicle Term ") from and including the Vehicle Lease
Commencement Date to but excluding the Vehicle Lease Expiration
Date.
Section
3.2. Lease
Commencement Date; Lease Expiration Date. The " Lease
Commencement Date " shall mean the Closing Date for the Series
1998-1 Notes as the first Group II Series of Notes issued under the
Indenture. The " Lease Expiration Date " shall mean the
later of (i) the date of the payment in full of all Series of Notes
included in the Group II Series of Notes and all outstanding
Carrying Charges related thereto, and (ii) the Vehicle Lease
Expiration Date for the last Vehicle subject to lease by a Lessee
hereunder. The " Term " of this Lease shall mean the period
commencing on the Lease Commencement Date and ending on the Lease
Expiration Date.
SECTION 4. CONDITIONS PRECEDENT.
Section
4.1. Conditions to
Each Lease of Vehicles. The agreement of the Lessor to make
available (a) any Acquired Vehicle for lease to the applicable
Lessee, and (b) financing for the acquisition of or refinancing of
any other Financed Vehicle for lease to such Lessee upon such
Lessee’s placement of a Vehicle Order, for itself or as agent
of the Lessor, or its delivery of a Refinancing Schedule, as
applicable, is subject to the terms and conditions of the Indenture
and subject to the satisfaction of the following conditions
precedent as of the Vehicle Lease Commencement Date for such
Vehicle:
Section 4.1.1 No Default . No Lease Event of
Default or Amortization Event shall have occurred and be continuing
on such date or would result from the leasing of such Vehicle or
Vehicles.
Section 4.1.2 Limitations of the Acquisition of
Certain Vehicles . After giving effect to the inclusion of such
Vehicle under this Lease, there shall not be a failure or violation
of any of the conditions, requirements, or restrictions specified
in any related Series Supplement with respect to the leasing of
Eligible Vehicles under this Lease.
Section 4.1.3 Vehicle Order . The applicable
Lessee shall have complied with the applicable provisions of
Section 2.1 of this Lease.
Section 4.1.4 Funding . The aggregate amount
of funds to be expended by the Lessor on any one date to acquire or
finance the acquisition of any Vehicles shall not exceed the sum of
(a) the aggregate Net Book Value of all such Vehicles plus (b)
the aggregate face amount of any related Eligible Receivables being
refinanced on such date.
6
Section 4.1.5 Maximum Non-Program Percentage
. The leasing of such Vehicles will not cause the aggregate Net
Book Value of Non-Program Vehicles then being leased under this
Lease to exceed the Maximum Non-Program Percentage and will not
cause any of the Lease commitments expressed in Section 3 of each
of Annex A and B to be exceeded.
Section 4.1.6 Eligible Vehicle . Each Vehicle
to be leased hereunder on such date shall be an Eligible
Vehicle.
Section
4.2. Additional
Conditions to Leases of Refinanced Vehicles. In addition to the
conditions set forth in Section 4.1 above, in connection
with the leasing of Refinanced Vehicles and related Eligible
Receivables, to evidence the refinancing of such Refinanced
Vehicles and related Eligible Receivables on the applicable Vehicle
Lease Commencement Date and the conveyance on such date of a
security interest in such Refinanced Vehicles and related Eligible
Receivables to the Master Collateral Agent, the applicable Lessees
shall have made available to the Lessor on or prior to the
applicable Vehicle Lease Commencement Date the following:
-
-
(a) a
Refinancing Schedule concerning such Refinanced Vehicles and
related Eligible Receivables being refinanced on such Vehicle Lease
Commencement Date;
(b) if
not previously liened to the Master Collateral Agent, a report of
the results of a search of the appropriate records of the principal
place in which each Lessee of such Refinanced Vehicles does
business and the county and state in which each Lessee’s
principal office is located, which shall show no liens or other
security interests (other than Permitted Liens) with respect to
such Vehicles and the related Vehicle Disposition Programs (to the
extent not already liened and assigned to the Master Collateral
Agent) or, in the event that such search reveals any such
non-permitted Lien or security interest, there shall be delivered
to the Trustee a termination of such Lien or security interest
together with appropriate UCC termination statements or UCC partial
releases thereof;
(c) if
not previously liened to the Master Collateral Agent, confirmation
from each lender or its agent holding a security interest in any
Refinanced Vehicle and Eligible Receivable stating unconditionally
(A) that, if any sums are to be paid to such lender in connection
with the lease of such Refinanced Vehicle and the refinancing of
the related Eligible Receivables, such lender has been paid the
full amount due to it in connection with such refinancing and (B)
that any lien or security interest of such lender or its agent in
such Refinanced Vehicle and related Eligible Receivable has been
released;
(d) to
the extent not already granted and assigned to the Master
Collateral Agent, a fully executed assignment agreement granting
and assigning to the Master Collateral Agent (to the extent not
already granted and assigned) a first priority security interest in
each such Refinanced Vehicle and any Eligible Receivables, the
related Vehicle Disposition Programs, if any, and any other Master
Lease Collateral relating to such Refinanced Vehicles and Eligible
Receivables;
7
-
-
(e) if
the lien of the Master Collateral Agent has not been perfected,
delivery to the Lessor for filing in the appropriate filing office
fully executed UCC-1 Financing Statements necessary to perfect (if
not already perfected) the interests of the Master Collateral Agent
in the Eligible Receivables; and
(f) at
the time a Refinancing Schedule is made available, the applicable
Lessee will be deemed to have represented that all the conditions
precedent under this Lease to the leasing of such Refinanced
Vehicles and financing of the Eligible Receivables under this Lease
have been satisfied, including a representation that each such
receivable is an Eligible Receivable.
SECTION 5. RENT AND CHARGES. Each
Lessee will pay Rent and certain other charges on a monthly basis
as set forth in this Section 5 :
Section
5.1. Payment of
Rent. On each Due Date, each Lessee shall pay to the Lessor the
aggregate of all Rent that has accrued during the Related Month
with respect to the Vehicles leased by such Lessee, as provided in
the related Lease Annexes.
Section
5.2. Payment of
Availability Payment. On each Due Date, each Lessee shall pay
to the Lessor its allocable share of the Availability Payment in
respect of the unutilized portion of the Maximum Lease Commitment.
" Availability Payment " with respect to each Due Date shall
equal the excess, if any, of (I) the sum of (without double
counting) (a) the aggregate interest due on all Outstanding Notes
included in the Group II Series of Notes as of the Payment Date
next succeeding such Due Date, plus (b) all other amounts
payable by RCFC during the Related Month under the Group II Series
Supplements and the other Related Documents with respect to a Group
II Series of Notes (other than principal on a Group II Series of
Notes), over (II) the sum of (a) any Monthly Variable Rent due on
such Due Date, plus (b) any Monthly Finance Rent due on such
Due Date, plus (c) any earnings on Permitted Investments
allocated to any Group II Series of Notes (less any portion thereof
allocated to the Retained Interestholder) accruing through the
Determination Date occurring prior to such Due Date and not
included in the calculation of Availability Payments with respect
to any prior Due Date.
Section
5.3. Payment of
Monthly Supplemental Payments. On each Due Date, each Lessee
shall pay to the Lessor the Monthly Supplemental Payments that have
accrued during the Related Month with respect to the Financed
Vehicles leased hereunder by such Lessee, as provided in Sections 6
and 7 of Annex B.
Section
5.4. Payment of
Termination Payments, Casualty Payments, and Late Return
Payments. On each Due Date, each Lessee shall pay to the Lessor
all Termination Payments, Casualty Payments and Late Return
Payments that have accrued with respect to the Acquired Vehicles
leased hereunder by such Lessee, as provided in Sections 7 ,
12.3 and 13 , respectively.
Section
5.5. Late Payment.
In the event a Lessee fails to remit payment of any amount due
under this Lease on or before the Due Date, the amount not paid
will be considered delinquent and such Lessee will pay a late
charge equal to the product of (a) the VFR plus 1%,
times (b) the delinquent amount for the period from the
Due Date to the date on which such delinquent amount is received by
the Trustee, times (c) the actual number of days elapsed
during such period divided by 360.
8
Section
5.6. Allocation of
Rent and Charges. Rent and other charges paid in respect of any
Vehicles and any Due Date shall first be allocated to the payment
of Monthly Variable Rent or Monthly Finance Rent, due for such
Vehicles, as applicable, then to the Availability Payment due for
such Vehicles and then to the payment of the remaining Rent
obligations and other charges due for such Vehicles.
SECTION 6. INSURANCE.
Section
6.1. Fleet
Insurance. Each Lessee shall at all times maintain or cause to
be maintained, with financially sound and reputable insurers, (a)
personal injury and damage insurance with respect to the Vehicles
leased by such Lessee hereunder, and (b) insurance with respect to
properties and business against loss or damage of the kinds
customarily insured against by corporations of established
reputation engaged in the same or similar businesses and similarly
situated, of such types and in such amounts as are customarily
carried under similar circumstances by such other corporations.
Each Lessee may, in lieu of maintaining such insurance with
insurers, self-insure.
Section
6.2. Information.
Each Lessee shall, from time to time upon the Lessor’s or the
Trustee’s reasonable request, deliver to the Lessor and the
Trustee copies of certificates describing all insurance required by
Section 6.1 which is then in effect.
SECTION 7. CASUALTY OBLIGATION. If a
Vehicle becomes a Casualty, then the applicable Lessee shall (a)
promptly notify the Lessor of such occurrence, and (b) in the case
of an Acquired Vehicle, on the Due Date next succeeding the last
day of the Related Month in which the Lessee obtains actual
knowledge that such Vehicle has become a Casualty, pay to the
Lessor an amount (a " Casualty Payment ") equal to the Net
Book Value of such Vehicle, calculated as of the earlier of the
last day of such Related Month and the date such vehicle is
disposed of or becomes a Casualty, as applicable. Upon payment by
the applicable Lessee to the Lessor in accordance herewith of the
Casualty Payment for any Acquired Vehicle that has become a
Casualty, (i) the Lessor shall cause title to such Vehicle to be
transferred to such Lessee to facilitate liquidation of such
Vehicle by such Lessee, (ii) such Lessee shall be entitled to any
physical damage insurance proceeds applicable to such Acquired
Vehicle (if at such time such Lessee carries such insurance
coverage), and (iii) the Lien of the Master Collateral Agent on
such Vehicle shall be released thereby.
SECTION 8. VEHICLE USE. So long as
no Lease Event of Default, Liquidation Event of Default or Limited
Liquidation Event of Default (or any similar event under any Group
II Series Supplement) has occurred, the Lessees may use Vehicles
leased hereunder in the regular course of their respective
businesses, including subleasing such Vehicles to Eligible
Franchisees pursuant to Lessee Agreements, including Subleases,
used in the ordinary course of Lessees’ businesses.
Notwithstanding any such Lessee Agreement, the applicable Lessee
shall remain fully liable for its obligations under this Lease and
the other Related Documents (including any obligation hereunder or
thereunder that it may cause any Franchisee to perform or fulfill).
Each Lessee shall cause all payments under the Lessee Agreements,
to the extent such payments relate
9
to vehicles comprising the Master Collateral, to be deposited
directly into the Master Collateral Account, and upon the
occurrence and during the continuance of a Lease Event of Default,
Liquidation Event of Default or Limited Liquidation Event of
Default (or any similar event under any Group II Series
Supplement), the Master Servicer shall promptly specify to the
Master Collateral Agent the allocation of such payments among
Financing Sources. Vehicle use shall be confined primarily to the
United States, with limited use outside the United States;
provided , however , that the principal place of
business or rental office of the Eligible Franchisee with respect
to any Vehicles used outside the United States shall be located in
the United States. Each Lessee shall promptly and duly execute,
deliver, file and record all such documents, statements, filings
and registrations, and take such further actions as the Lessor, the
Master Collateral Agent, the Master Servicer or the Trustee shall
from time to time reasonably request in order to establish, perfect
and maintain the Lessor’s title to and interest in the
Acquired Vehicles and the related Certificates of Title as against
such Lessee or any third party in any applicable jurisdiction and
to establish, perfect and maintain the Master Collateral
Agent’s Lien on the Vehicles and the related Certificates of
Title as a perfected lien in any applicable jurisdiction. Each
Lessee may, at such Lessee’s sole expense, change the place
of principal location of any Vehicles. After any such change of
location, the applicable Lessee shall take all actions necessary
(i) to maintain the Lien of the Master Collateral Agent on such
Vehicles and the Certificates of Title with respect to such
Vehicles, and (ii) to meet or obtain all material legal
requirements applicable to such Vehicles. Following a Lease Event
of Default or Manufacturer Event of Default, and upon the
Lessor’s request, each Lessee shall advise the Lessor in
writing where all Vehicles leased by such Lessee hereunder as of
such date are principally located. The Lessees shall not knowingly
use any Vehicles, or knowingly permit the same to be used, for any
unlawful purpose. The Lessees shall and shall require the related
Franchisees to use reasonable precautions to prevent loss or damage
to Vehicles. The Lessees shall or shall cause the related
Franchisees to comply with all applicable statutes, decrees,
ordinances and regulations regarding acquiring, titling,
registering, leasing, insuring and disposing of Vehicles and shall
or shall require such related Franchisees to take reasonable steps
to ensure that operators are licensed. The Lessees shall or shall
cause the related Franchisees to perform, at its or their own
expense, such vehicle preparation and conditioning services with
respect to Vehicles as are customary. The Lessor, the Master
Collateral Agent or the Trustee or any authorized representative of
the Lessor, the Master Collateral Agent or the Trustee may during
reasonable business hours from time to time, without disruption of
the applicable Lessee’s or the related Franchisee’s
business, subject to applicable law, inspect Vehicles and
registration certificates, Certificates of Title and related
documents covering Vehicles wherever the same be located.
SECTION 9. REGISTRATION; LICENSE;
TRAFFIC SUMMONSES; PENALTIES AND FINES. Each Lessee, at its
expense, shall be responsible for proper registration and licensing
of the Vehicles leased by it hereunder, and the titling of such
Vehicles in the name of the Lessor (in the case of Acquired
Vehicles) or the Lessor or such Lessee, as applicable (in the case
of Financed Vehicles), in each case with the Lien of the Master
Collateral Agent noted thereon, and where required, each Lessee
shall or shall cause the related Franchisees to have Vehicles
inspected by any appropriate governmental authority;
provided , however , that notwithstanding the
foregoing, unless a Liquidation Event of Default shall have
occurred and be continuing, possession of all Certificates of Title
shall remain with each Servicer of the related Vehicles or the
Master Servicer with such Certificates of Title to be held in
trust, as agent of and custodian for the Master Collateral Agent;
provided further that, if a Liquidation Event of
10
Default shall have occurred and be continuing, the Master
Collateral Agent shall have the right to take possession of all
such Certificates of Title immediately from each Servicer and the
Master Servicer, as applicable. Each Lessee shall pay or cause to
be paid all registration fees, title fees, license fees, traffic
summonses, penalties, judgments and fines incurred with respect to
any Vehicle leased hereunder by such Lessee during the Vehicle Term
for such Vehicle or imposed during the Vehicle Term for such
Vehicle by any governmental authority or any court of law or equity
with respect to Vehicles in connection with the Lessee’s
operation of Vehicles, and any such amounts paid by the Lessor, in
its discretion, on such Lessee’s behalf will be reimbursed
within thirty (30) days of the Lessor notifying the Lessee of such
payment. The Lessor agrees to execute a power of attorney
substantially in the form of Attachment B hereto (a "
Power of Attorney "), and such other documents as may be
necessary in order to allow each Lessee to title, register and
dispose of the Acquired Vehicles leased by such Lessee hereunder;
and each Lessee acknowledges and agrees that with respect to the
Acquired Vehicles, it has no right, title or interest in or with
respect to any Certificate of Title. Notwithstanding anything
herein to the contrary, the Lessor may terminate such Power of
Attorney as provided in Section 17.3 .
SECTION 10. MAINTENANCE AND REPAIRS.
Each Lessee shall or shall cause the related Franchisees, as
applicable, to pay for all maintenance and repairs to keep the
Vehicles leased by such Lessee hereunder in good working order and
condition, and shall or shall cause such Franchisees to maintain
such Vehicles as required in order to keep the Manufacturer’s
warranty in force. Each Lessee shall or shall cause the related
Franchisees to return each Vehicle to an authorized Manufacturer
facility or the applicable Manufacturer’s authorized warranty
station for warranty work. Each Lessee shall or shall cause the
related Franchisees to comply with any Manufacturer’s recall
of any Vehicle. Each Lessee shall or shall cause the related
Franchisees to pay, or cause to be paid, all usual and routine
expenses incurred in the use and operation of Vehicles including,
but not limited to, fuel, lubricants, and coolants. The Lessor,
upon thirty (30) days’ prior written notice to the applicable
Lessee, may pay any such expenses that have not otherwise been paid
by, or on behalf of, such Lessee (including any failure by a
related Franchisee to pay any such expenses), and any expenses
incurred by the Lessor on such Lessee’s behalf for
maintenance, repair, operation or use of Vehicles by such Lessee
will be promptly reimbursed (in any event no later than the next
monthly Due Date following such payment) by such Lessee to the
Lessor in the amount paid by the Lessor. Each Lessee shall not make
any material alterations to any Vehicles without the prior consent
of the Lessor. Any improvements or additions to any Acquired
Vehicle shall become and remain the property of the Lessor, except
that any addition or improvement to such a Vehicle made by a Lessee
shall remain the property of such Lessee if it can be disconnected
or removed from the Vehicle without impairing the functioning of or
resale value thereof, other than any functions or value provided by
such addition or improvement.
SECTION 11. VEHICLE WARRANTIES. If a
Vehicle is covered by a Manufacturer’s warranty, the
applicable Lessee and each related Franchisee, during the Vehicle
Term, shall have the right to make any claims under such warranty
which the Lessor could make. As provided in Section 2.4 ,
the Lessor makes no warranty or representation whatsoever, express
or implied, with respect to any Vehicle.
SECTION 12. VEHICLE USAGE REQUIREMENTS
AND DISPOSITION.
11
Section 12.1. Usage. As
used herein, the term " vehicle turn-in condition " with
respect to each Program Vehicle leased hereunder by a Lessee means
a set of criteria for evaluating Program Vehicles upon their
delivery at the end of the applicable Vehicle Terms, which criteria
will be determined in accordance with the related Vehicle
Disposition Program. Each Program Vehicle leased hereunder by a
Lessee not meeting the applicable Vehicle Disposition
Program’s vehicle turn-in condition requirements will, unless
redesignated as a Non-Program Vehicle in accordance with Section
14 , be purchased by such Lessee in accordance with the
Casualty procedure set forth in Section 7 or otherwise
disposed of in accordance with the late delivery procedure set
forth in Section 13 , as applicable.
Section 12.2.
Disposition Procedure. Prior to the end of the Vehicle Term,
each Lessee will or will cause the related Franchisee to deliver
each Program Vehicle leased hereunder by such Lessee (other than a
Casualty) to the nearest related Manufacturer official auction or
other facility designated by such Manufacturer at such
Lessee’s sole expense and in accordance with the terms of the
applicable Vehicle Disposition Program. Any transportation
allowance (for delivery costs) and any rebates or credits
applicable to the unexpired term of any license plates for a
Vehicle shall inure to the benefit of and, upon receipt thereof by
the Lessor, the Trustee or the Master Collateral Agent, shall
promptly be paid over to the applicable Lessee. Each Lessee will
comply with the requirements of law and the requirements of the
Vehicle Disposition Programs in connection with, among other
things, the delivery of Certificates of Title, documents of
transfer signed as necessary, signed Condition Reports, and signed
odometer statements for the Program Vehicles.
Section 12.3.
Termination Payments. On the Due Date next succeeding the
earlier of (a) the last day of the Related Month in which the
Repurchase Payment or the Guaranteed Payment, as the case may be,
from a Manufacturer pursuant to its Vehicle Disposition Program
with respect to any Acquired Vehicle that is a Program Vehicle, is
received by the Lessor, the Master Collateral Agent or the Trustee
(including by deposit into the Collection Account or the Master
Collateral Account), and (b) the thirtieth (30th) day after the
expiration of the Maximum Term for such Vehicle, the Lessee that
leases such Vehicle hereunder shall pay to the Lessor in respect of
such Vehicle any Excess Damage Charges, Excess Mileage Charges,
early turnback surcharges and any other similar charges and
penalties (collectively, a " Program Vehicle Termination
Payment ") as determined by the Manufacturer or its agent in
accordance with the applicable Vehicle Disposition Program; and on
the Due Date next succeeding the earlier of (i) the last day of the
Related Month in which Disposition Proceeds from the sale or other
disposition of an Acquired Vehicle that is a Non-Program Vehicle,
but is not a Casualty, are received by the Lessor, the Master
Collateral Agent or the Trustee (including by deposit into the
Collection Account or the Master Collateral Account), and (ii) the
thirtieth (30th) day after the expiration of the Maximum Vehicle
Lease Term for such Vehicle, the applicable Lessee shall pay to the
Lessor in respect of such Vehicle an amount (a " Non-Program
Vehicle Termination Payment ") equal to the quotient of (x) the
sum of all Program Vehicle Termination Payments for the Related
Month in respect of Vehicles leased by such Lessee, divided
by (y) the number of Acquired Vehicles leased by such Lessee in
respect of which such Program Vehicle Termination Payments are
payable (Program Vehicle Termination Payments and Non-Program
Vehicle Termination Payments being, collectively, " Termination
Payments "). The provisions of this Section 12.3 will
survive the expiration or earlier termination of the Term.
12
SECTION 13. LATE RETURN PAYMENTS. If an Acquired Vehicle
which is a Program Vehicle is not returned to the Manufacturer or
accepted by the Manufacturer in accordance with the related Vehicle
Disposition Program prior to the expiration of the Maximum Term for
such Vehicle in accordance with Section 12.2 , the Lessee of
such Vehicle hereunder shall, unless such Vehicle has been
redesignated as a Non-Program Vehicle in accordance with Section
14 , (a) promptly notify the Lessor of its failure to return
such Vehicle to the Manufacturer or to sell such Vehicle in
accordance with the applicable Auction Procedures during the
Vehicle Term, (b) use commercially reasonable efforts to sell or
otherwise dispose of such Vehicle in a manner reasonably likely to
maximize proceeds from such disposition and consistent with
industry practice, (c) cause the Disposition Proceeds, if any, from
any such sale or disposition to be paid to the Master Collateral
Agent, in accordance with paragraph 10(d) of Annex A, and
(d) on the Due Date next succeeding the earlier of (i) the last day
of the Related Month in which such Disposition Proceeds are
received by the Lessor, the Master Collateral Agent or the Trustee
(including by deposit into the Collection Account or the Master
Collateral Account), and (ii) the thirtieth (30th) day after the
expiration of the Maximum Term for such Vehicle, pay to the Lessor
an amount (a " Late Return Payment ") equal to the excess of
(x) the Net Book Value of such Vehicle, calculated as of the first
day of the calendar month in which such Maximum Term expired
reduced by the Depreciation Charges accrued with respect to such
Vehicle through the date such Maximum Term expired, over (y) the
dollar amount of such Disposition Proceeds (which Late Return
Payment amount may be equal to, but not less than, zero dollars).
The foregoing shall not affect the applicable Lessee’s
obligation to pay on the related Due Date all Monthly Base Rent
accrued with respect to each such Vehicle through the date on which
the Maximum Term for such Vehicle expires.
SECTION 14. REDESIGNATION OF
VEHICLES. (a) Upon a Program Vehicle’s becoming
ineligible for repurchase by its Manufacturer or for sale in
accordance with applicable Auction Procedures, due to physical
damage, repair charges or accrued mileage, in each case in excess
of that permitted under the related Vehicle Disposition Program, or
due to any failure or inability to return such Vehicle to the
Manufacturer or the designated auction site prior to the expiration
of the Maximum Term, or due to any other event or circumstance, the
applicable Servicer may designate such Vehicle as a Non-Program
Vehicle if such Vehicle, as a Non-Program Vehicle, will be an
Eligible Vehicle and if either (a) such designation meets the
conditions of Section 4.2 or (b) the Noteholders holding the
requisite Invested Amount of each applicable Series of Notes
included in the Group II Series of Notes waive, in each case as and
to the extent permitted under the related Series Supplement, the
requirements of Section 4.2 as applied to this Section
14 and all such other conditions, requirements or restrictions
with respect to which a failure or violation has occurred;
provided , in each case, that (x) any additional Monthly
Base Rent due with respect to each such Vehicle, relating to the
decrease, if any, of the Net Book Value of such Vehicle under the
newly applicable Depreciation Schedule, shall be paid by the
applicable Lessee on the next succeeding Due Date, and (y) the
minimum level of Enhancement required under the applicable
Supplement, after giving effect to such designation, shall be
satisfied on the date of designation.
(b) The
applicable Servicer may designate a Non-Program Vehicle as a
Program Vehicle; provided , however , that (i) upon
such redesignation and through and including the applicable Vehicle
Lease Expiration Date, such Vehicle shall be an Eligible Vehicle,
(ii) such Vehicle qualifies as an Eligible Vehicle under the
applicable Eligible Vehicle Disposition
13
Program, (iii) the Capitalized Cost, Net Book Value and
Depreciation Charges with respect to such Vehicle shall be
recalculated as of the date of such redesignation as if such
Vehicle was a Program Vehicle at the time of the initial related
Vehicle Lease Commencement Date, and (iv) the related
Manufacturer has acknowledged such designation. Upon any
redesignation of a Vehicle pursuant to this Section 14(b) ,
(x) the Lessor shall advance to the applicable Manufacturer the
difference (if any) between the original Capitalized Cost of such
Vehicle and the Capitalized Cost of such Vehicle upon
redesignation, which amount shall be deemed to be part of the
Initial Acquisition Cost of such Vehicle and (y) the applicable
Lessee shall be entitled to a credit against the Monthly Base Rent
due on the next succeeding Due Date in an amount equal to the
excess (if any) of the Net Book Value of such Vehicle upon such
redesignation over the original Net Book Value of such Vehicle
immediately prior to such redesignation.
SECTION 15. GENERAL INDEMNITY.
Section 15.1.
Indemnity of the Lessor. Each Lessee agrees to indemnify and
hold harmless the Lessor and the Lessor’s directors,
officers, agents and employees (collectively, together with the
Persons subject to indemnity under Section 15.2 , the "
Indemnified Persons ") against any and all claims, demands
and liabilities of whatsoever nature, and all costs and expenses,
relating to or in any way arising out of:
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Section 15.1.1 the ordering, delivery, acquisition,
title on acquisition, rejection, installation, possession, titling,
retitling, registration, re-registration, custody by such Lessee of
title and registration documents, use, non-use, misuse, operation,
deficiency, defect, transportation, repair, control or disposition
of any Vehicle leased hereunder or to be leased hereunder by such
Lessee, including, without limitation, any such Vehicle subleased
to a Franchisee of such Lessee and any of the foregoing actions,
events or circumstances occurring or arising in connection with
such subleasing, any related Lessee Agreement, any related
Franchisee or any customer of any such related Franchisee. The
foregoing shall include, without limitation, any claim by any third
party against the Lessee for personal injury, property or other
damages arising out of any of the foregoing with respect to any
such Vehicles;
Section 15.1.2 all (i) federal, state, county,
municipal, foreign or other fees and taxes of any nature, including
but not limited to license, qualification, registration, franchise,
sales, use, gross receipts, ad valorem, business, property (real or
personal), excise, motor vehicle, and occupation fees and taxes,
and all federal, state, local and foreign income taxes (including
any taxes payable by the Lessor as a result of its being a member
of any group of corporations, including such Lessee, that file any
tax returns on a consolidated or combined basis), and penalties and
interest thereon, whether assessed, levied against or payable by
the Lessor or otherwise, with respect to any Vehicle leased by such
Lessee hereunder or the acquisition, purchase, sale, lease,
sublease, rental, use, operation, control, ownership or disposition
of any such Vehicle by any Person or measured in any way by the
value thereof or by the business of, investment by, or ownership by
the Lessor or such Lessee with respect thereto, and (ii)
documentary, stamp, filing, recording, mortgage or other taxes, if
any, which
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may be payable by the Lessor or such Lessee in connection with
this Lease or the other Related Documents or the related Lessee
Agreements and any penalties or interest with respect thereto;
Section 15.1.3 any violation by such Lessee of this
Lease or of any Related Documents or Lessee Agreements to which
such Lessee is a party or by which it is bound or any laws, rules,
regulations, orders, writs, injunctions, decrees, consents,
approvals, exemptions, authorizations, licenses and withholdings of
objecting of any governmental or public body or authority and all
other requirements having the force of law applicable at any time
to any Vehicle Leased by such Lessee hereunder or any action or
transaction by such Lessee with respect thereto or pursuant to this
Lease;
Section 15.1.4 such Lessee’s Pro Rata Share of
all out-of-pocket costs of the Lessor (including the reasonable
fees and out-of-pocket expenses of counsel for the Lessor) in
connection with the execution, delivery and performance of this
Lease and the other Related Documents, including, without
limitation, overhead expenses and any and all fees of the Trustee,
Paying Agent, Clearing Agencies, Qualified Intermediary and Master
Collateral Agent, all fees payable in connection with any
Enhancement, any and all fees of the Master Servicer or any
Servicer under the Indenture, fees payable to the Rating Agencies
in connection with their rating of the Commercial Paper Notes, fees
and costs of the Qualified Intermediary and in connection with the
Escrow Account, and any underwriting or placement agency fees
incurred in connection with the sale of any Notes included in the
Group II Series of Notes or Commercial Paper Notes, in each case to
the extent allocable to this Lease; and
Section 15.1.5 such Lessee’s Pro Rata Share of
all out-of-pocket costs and expenses: (including reasonable
attorneys’ fees and legal expenses) incurred by the Lessor,
the Master Collateral Agent, the Trustee, the Qualified
Intermediary or the Holders of Notes included in the Group II
Series of Notes in connection with the administration, enforcement,
waiver or amendment of this Lease and any other Related Documents,
and all indemnification obligations of the Lessor under the Related
Documents.
Notwithstanding the foregoing, no Lessee shall have any duty to
indemnify any Indemnified Person for any consequential or punitive
damages or claims, demands, liabilities, costs, or expenses to the
extent such claim, demand, liability, cost or expense arises out of
or is due to such Indemnified Person’s gross negligence or
willful misconduct.
Section 15.2.
Indemnification of the Trustee. Each Lessee agrees to
indemnify and hold harmless the Trustee and the Trustee’s
officers, directors, agents and employees against any and all or,
in the case of clause (ii) below, such Lessee’s Pro
Rata Share of all claims, demands and liabilities of whatsoever
nature, and all or, in the case of clause (ii) below, such
Lessee’s Pro Rata Share of all costs and expenses, relating
to or in any way arising out of: (i) any acts or omissions of such
Lessee pursuant to this Lease and (ii) the Trustee’s
appointment under the
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Base Indenture and the Trustee’s performance of its
obligations thereunder, or any document pertaining to any of the
foregoing to which the Trustee is a signatory, including, but not
limited to any judgment, award, settlement, reasonable
attorneys’ fees and other costs or expenses incurred in
connection with the defense of any actual or threatened action,
proceeding or claim; provided , however , the Lessees
shall have no duty to indemnify the Trustee, or any other
Indemnified Person pursuant to this Section 15.2 , to the
extent such claim, demand, liability, cost or expense arises out of
or is due to the Trustee’s or such Indemnified Person’s
gross negligence or willful misconduct. Any such indemnification
shall not be payable from the assets of the Lessor. The provisions
of this indemnity shall run directly to and be enforceable by the
Trustee or any other Indemnified Person subject to the limitations
hereof. The indemnification provided for in this Section
15.2 shall be in addition to any other indemnities available to
the Trustee and shall survive the termination of the duties of the
Lessees hereunder and the termination of this Lease or a document
to which the Trustee is a signatory or the resignation or removal
of the Trustee.
Section 15.3.
Reimbursement Obligation by the Lessees. The applicable
Lessee shall forthwith upon demand reimburse the Lessor or the
Trustee, as the case may be, for any sum or sums expended with
respect to any of the foregoing, or shall pay such amounts directly
upon request from the Lessor or the Trustee; provided ,
however , that, if so requested by such Lessee, the Lessor
or the Trustee shall submit to such Lessee a statement documenting
any such demand for reimbursement or prepayment. To the extent that
such Lessee in fact indemnifies the Lessor or the Trustee under the
indemnity provisions of this Lease, such Lessee shall be subrogated
to the rights of the Lessor or the Trustee, as the case may be, in
the affected transactions and shall have a right to determine the
settlement of claims therein. The foregoing indemnity as contained
in this Section 15 shall survive the expiration or earlier
termination of this Lease or any lease of any Vehicle hereunder;
provided , however , that the factual or legal
circumstances giving rise to the Lessor’s exposure to
liability occur during the period that the Lease is in effect as to
the Vehicle for which such exposure to liability arose.
Section 15.4.
Notice to Lessee of Claims. The Lessor or the Trustee, as
the case may be, shall notify the applicable Lessee in writing (a "
Notice of Claim ") of the pendency of any such claim, action
or facts referred to in this Section 15 for which indemnity
may be required.
Section 15.5.
Defense of Claims. Defense of any claim referred to in this
Section 15 for which indemnity may be required shall, at the
option and request of the applicable Lessee, be conducted by such
Lessee. Following receipt of any Notice of Claim, such applicable
Lessee will inform the Indemnified Person of its election to defend
such claim. Such Indemnified Person may participate in any such
defense at its own expense, provided such participation does not
interfere with such Lessee’s defense. Each Lessee agrees that
no Indemnified Person will be liable to such Lessee for any claim
caused directly or indirectly by the inadequacy of any Vehicle for
any purpose or any deficiency or defect therein or the use or
maintenance thereof or any repairs, servicing or adjustments
thereto or any delay in providing or failure to provide such or any
interruption or loss of service or use thereof or any loss of
business, all of which shall be the risk and responsibility of such
Lessee, except to the extent that any of the foregoing is caused by
the gross negligence or willful misconduct of such Indemnified
Person. The rights and indemnities of each Indemnified Person
hereunder are expressly made for the benefit of, and will be
enforceable by, each Indemnified Person notwithstanding the fact
that such Indemnified
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Person is not or is no longer a party to (or entitled to receive
the benefits of) this Lease. This general indemnity shall not
affect any claims of the type discussed above which a Lessee may
have against the Manufacturer.
SECTION 16. ASSIGNMENT. No Lessee
shall, except as provided in the Base Indenture, without prior
written consent of the Lessor and the Trustee, assign this Lease or
any of its rights hereunder to any other party; provided ,
however , a Lessee may sublease or rent Vehicles leased by
it under the terms of such Lessee’s normal Sublease
agreements to Eligible Franchisees, and such Lessee and such
Eligible Franchisees may rent such Vehicles to consumers in the
ordinary course of their daily rental business. Any purported
assignment in violation of this Section 16 shall be void and
of no force or effect. Nothing contained herein shall be deemed to
restrict the right of a Lessee to acquire or dispose of, by
purchase, lease, financing, or otherwise, motor vehicles that are
not subject to the provisions of this Lease.
SECTION 17. DEFAULT AND REMEDIES
THEREFOR.
Section 17.1.
Lease Events of Default. Any one or more of the following
will constitute an event of default (a " Lease Event of
Default ") as that term is used herein:
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Section 17.1.1 there occurs a default in the payment
of (i) any Monthly Base Rent, Monthly Variable Rent, Monthly
Finance Rent, Termination Payment, Casualty Payment, Late Return
Payment, Monthly Supplemental Payment, Availability Payment or (ii)
any other amount payable under this Lease, and, any such case, the
continuance thereof for five (5) Business Days after notice thereof
by the Lessor, the Master Collateral Agent or the Trustee to the
applicable Lessee and the Guarantor;
Section 17.1.2 any unauthorized assignment or
transfer of this Lease by a Lessee or the Guarantor occurs;
Section 17.1.3 the failure of a Lessee or the
Guarantor to observe or perform any other covenant, condition,
agreement or provision hereof, which failure has a Material Adverse
Effect on the Lessor, and such default continues for more than
sixty (60) days after the earlier to occur of (a) the date a
Responsible Officer of such Lessee obtains knowledge of such
default or (b) the date written notice thereof is delivered by the
Lessor, the Master Collateral Agent or the Trustee to such Lessee;
provided , however , that if such failure cannot
reasonably be cured within such sixty (60) day period, no Lease
Event of Default shall result therefrom so long as, within such
sixty (60) day period, such Lessee (i) commences to cure same, (ii)
delivers written notice to the Lessor, the Master Collateral Agent
and the Trustee notifying the Lessor, the Master Collateral Agent
and the Trustee of such default and setting forth the steps such
Lessee intends to take in order to cure such default and (iii)
thereafter diligently prosecutes such cure to completion and
completely cures such default on or before the ninetieth (90th) day
after the earlier of the dates set forth in clause (a) and
clause (b) above;
Section 17.1.4 if any representation or warranty made
by a Lessee or the Guarantor proves untrue in any respect as of the
date of the issuance or making thereof, which inaccuracy or
falsehood has a Material Adverse Effect on the Lessor, and such
inaccuracy or falsehood is not cured within sixty (60) days after
notice thereof from the Lessor, the Master Collateral Agent or the
Trustee to such Lessee; or
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Section 17.2.
Effect of Lease Event of Default. If (i) a Lease Event of
Default described in Section 17.1.1(i) , 17.1.2 or
17.1.5 of this Lease shall occur, then the Monthly Base
Rent, the Monthly Supplemental Payment and Casualty Payments (in
each case calculated, with respect to Financed Vehicles, as if all
such Financed Vehicles had become a Casualty for the Related
Month), the Monthly Variable Rent, the Availability Payment and the
Monthly Finance Rent (in each case calculated as if the full amount
of interest, principal and other charges under all Outstanding
Series of Notes included in the Group II Series of Notes were then
due and payable in full), Termination Payments and Late Return
Payments shall, automatically, without further action by the Lessor
or the Trustee, become immediately due and payable or (ii) any
other Lease Event of Default or any other Liquidation Event of
Default applicable to this Lease or any Series of Notes for which
this Lease serves as Collateral shall occur, the Lessor or the
Trustee may declare the Rent and all other charges and
payments (calculated as described in clause (i) above) to be
due and payable, whereupon such Rent and such other charges and
payments (as so calculated) shall, subject to Section 17.5 ,
become immediately due and payable.
Section 17.3.
Rights of Lessor Upon Lease Event of Default, Liquidation Event
of Default or Limited Liquidation Event of Default. If a Lease
Event of Default, Liquidation Event of Default or Limited
Liquidation Event of Default with respect to this Lease or any
Series of Notes for which this Lease serves as Collateral shall
occur, then the Lessor at its option may:
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(i) Proceed
by appropriate court action or actions, either at law or in equity,
to enforce performance by the Lessees of the applicable covenants
and terms of this Lease or to recover damages for the breach hereof
calculated in accordance with Section 17.5 ; or
(ii) By
notice in writing to each Lessee, terminate this Lease in its
entirety and/or the right of possession hereunder of the Lessees as
to the Vehicles, and the Lessor may direct delivery by the Lessees
of documents of title to the Vehicles, whereupon all rights and
interests of the Lessees to the Vehicles will cease and terminate
(but the Lessees will remain liable hereunder as herein provided,
calculated in accordance with Section 17.5 ); and thereupon,
the Lessor or its agents may, subject in each case to the rights of
the Franchisees under the applicable Subleases, peaceably enter
upon the premises of the Lessees or other premises where the
Vehicles may be located and take possession of them and thenceforth
hold, possess and enjoy the same free from any right of the
Lessees, or their successors or assigns (other than the
Franchisees), to employ the Vehicles for any purpose whatsoever
consistent with the mitigation of losses and damages, and the
Lessor will, nevertheless, have a right to recover from the Lessees
any and all amounts which under the terms of Section 17.2
(as limited by Section 17.5 ) of this Lease may be then due.
The Lessor will provide the applicable Lessee with written notice
of the place and time of any sale of Financed Vehicles pursuant to
this Section 17.3 at least five (5) days prior to the
proposed sale, which shall be deemed commercially
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reasonable, and such Lessee or the Lessor may purchase the
Vehicle(s) at the sale. Each and every power and remedy hereby
specifically given to the Lessor will be in addition to every other
power and remedy hereby specifically given or now or hereafter
existing at law, in equity or in bankruptcy and each and every
power and remedy may be exercised from time to time and
simultaneously and as often and in such order as may be deemed
expedient by the Lessor; provided , however , that
the measure of damages recoverable against a Lessee will in any
case be calculated in accordance with Section 17.5 . All
such powers and remedies will be cumulative, and the exercise of
one will not be deemed a waiver of the right to exercise any other
or others. No delay or omission of the Lessor in the exercise of
any such power or remedy and no renewal or extension of any
payments due hereunder will impair any such power or remedy or will
be construed to be a waiver of any default or any acquiescence
therein. Any extension of time for payment hereunder or other
indulgence duly granted to a Lessee will not otherwise alter or
affect the Lessor’s rights or the obligations hereunder of
such Lessee. The Lessor’s acceptance of any payment after it
will have become due hereunder will not be deemed to alter or
affect the Lessor’s rights hereunder with respect to any
subsequent payments or defaults therein; or
(iii) By notice
in writing to a Lessee, terminate the Power of Attorney of such
Lessee.
Section 17.4.
Rights of Trustee Upon Liquidation Event of Default, Limited
Liquidation Event of Default, Manufacturer Event of Default and
Non-Performance of Certain Covenants .
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(i) If
a Liquidation Event of Default or a Limited Liquidation Event of
Default or, with respect to Program Vehicles, a Manufacturer Event
of Default, shall have occurred and be continuing, the Lessor and
the Trustee, to the extent provided in the Indenture, shall have
the rights against the Guarantor, each Lessee, each Manufacturer in
connection with any Manufacturer Event of Default and the Master
Lease Collateral provided in the Indenture (including, without
limitation, in connection with a Manufacturer Event of Default, the
rights granted under Section 8.2 of the Indenture) upon a
Liquidation Event of Default or Limited Liquidation Event of
Default, including the right to take possession of all Group II
Vehicles immediately from the Lessees.
(ii) With
respect to Program Vehicles, if the Guarantor or any Lessee shall
default in the due performance and observance of any of its
obligations under Section 6.1 , 23.4 ,
24.3 , 24.4 (f) , 24.7 or 25.4 hereof,
and such default shall continue unremedied for a period of 30 days
after notice thereof shall have been given to the Guarantor or the
applicable Lessee, as the case may be, by the Lessor, the Lessor or
the Trustee, as assignee of the Lessor’s rights hereunder,
shall have the ability to exercise all rights, remedies, powers,
privileges and claims of the Guarantor or any Lessee against the
Manufacturers under or in connection with the Eligible Vehicle
Disposition Programs with respect to (i) Group II Vehicles that are
Program Vehicles which the Guarantor or any Lessee has determined
to turn back to the Manufacturers under such Eligible Vehicle
Disposition Programs and (ii) whether or not the Guarantor or any
Lessee shall then have determined to turn back such Group II
Vehicles that are Program Vehicles, any such Program Vehicles for
which the applicable Maximum Term will expire within one week or
less.
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(iii) Upon a
default in the performance (after giving effect to any grace
periods provided herein) by the Guarantor or any Lessee of its
obligations hereunder to keep the Group II Vehicles free of Liens
and to maintain the Trustee’s Lien perfected on the Master
Lease Collateral, the Trustee shall have the right to take actions
reasonably necessary to correct such default with respect to the
subject Vehicles including executing and filing UCC financing
statements with respect to Eligible Vehicle Disposition Program and
other general intangibles and amending any Certificates of Title
that fail to note the correct titleholder or lienholder in
accordance with the Base Indenture, this Lease and the Master
Collateral Agency Agreement.
(iv) Upon
the occurrence of a Liquidation Event of Default or Limited
Liquidation Event of Default, the Guarantor and each Lessee will
return any Group II Vehicles that are Program Vehicles to the
related Manufacturer in accordance with the instructions of the
Lessor.
(v) Upon
the occurrence of a Liquidation Event of Default or Limited
Liquidation Event of Default, the Lessor shall have the right to
dispose of (x) those Group II Vehicles that are Program Vehicles
either not accepted by the related Manufacturer under the
applicable Eligible Program pursuant to clause (iv) above or with
respect to which a Manufacturer Event of Default has occurred, and
(y) the Group II Vehicles that are Non-Program Vehicles and to
direct the Guarantor or the applicable Lessee to dispose of such
Vehicles in accordance with its instructions. In addition, the
Lessor shall have all of the rights, remedies, powers, privileges
and claims vis-à-vis the Guarantor or any Lessee,
necessary or desirable to allow the Trustee to exercise the rights,
remedies, powers, privileges and claims given to the Trustee
pursuant to Section 8.1 and, with respect to Program
Vehicles, Section 8.2 of the Base Indenture and the
Guarantor and each Lessee acknowledges that it has hereby granted
to the Lessor all of the rights, remedies, powers, privileges and
claims granted to the Trustee pursuant to Article 8 of the
Base Indenture and that, under certain circumstances set forth in
the Base Indenture, the Trustee may act in lieu of the Lessor in
the exercise of such rights, remedies, powers, privileges and
claims.
Section 17.5.
Measure of Damages. If a Lease Event of Default, Liquidation
Event of Default or Limited Liquidation Event of Default occurs and
the Lessor, the Master Collateral Agent or the Trustee exercises
the remedies granted to the Lessor, the Master Collateral Agent or
the Trustee under this Section 17 or under Section
8.2 of the Base Indenture, the amount that the Lessor shall be
permitted to recover shall be equal to:
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(i) all
Rent and payments under this Lease (calculated as provided in
Section 17.2 ); plus
(ii) any
damages and expenses (other than punitive and consequential
damages), which the Lessor, the Master Collateral Agent or the
Trustee will have sustained by reason of the Lease Event of
Default, Liquidation Event of Default or Limited Liquidation Event
of Default, together with reasonable sums for such attorneys’
fees and such expenses as will be expended or incurred in the
seizure, storage, rental or sale of the Vehicles or in the
enforcement of any right or privilege hereunder or in any
consultation or action in such connection; >plus
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(iii)
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all other amounts due and payable under this
Lease; plus
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(iv) interest
from time to time on amounts due and unpaid under this Lease at the
VFR plus 1%, computed from the date of the Lease Event of Default,
Liquidation Event of Default or Limited Liquidation Event of
Default or the date payments were originally due the Lessor under
this Lease or from the date of each expenditure by the Lessor which
is recoverable from a Lessee pursuant to this Section 17 ,
as applicable, to and including the date payments are made by the
Lessee; minus
(v) an
amount equal to all sums realized by the Lessor, the Master
Collateral Agent and the Trustee from the liquidation of the
Financed Vehicles leased hereunder (either by receipt of payment
from the Manufacturers under Vehicle Disposition Programs, from
sales of Vehicles to third parties, or otherwise), provided
, however , that if a Financed Vehicle is delivered to the
Manufacturer or the designated auction site for repurchase by the
Manufacturer under the applicable Vehicle Disposition Program or
for sale in accordance with the applicable Auction Procedures,
respectively, and such Vehicle is accepted for repurchase or sale
by such Manufacturer (as evidenced by a Condition Report indicating
that such Vehicle conforms to the requirements for repurchase or
sale under such Vehicle Disposition Program), the Lessor and the
Trustee shall be deemed to have received thirty (30) days after the
date of such acceptance or sale on account of this clause
(v) an amount equal to the Net Book Value of such Vehicle,
calculated as of its Disposition Date (less any Termination
Payments payable in respect of such Vehicle).
Section 17.6.
Application of Proceeds. The proceeds of any sale or other
disposition of any Financed Vehicles pursuant to Section
17.3 shall be applied in the following order: (i) to the
reasonable costs and expenses incurred by the Lessor in connection
with such sale or disposition, including any reasonable costs
associated with repairing such Vehicles, and reasonable
attorneys’ fees in connection with the enforcement of this
Lease, (ii) to the payment of outstanding Rent owing from the
applicable Lessee and payments under the Lease owing from such
Lessee (such proceeds to be applied first, to outstanding Monthly
Variable Rent and Monthly Finance Rent pro rata, second, to
outstanding Availability Payments, third, to outstanding Base Rent
and Monthly Supplemental Payments pro rata, fourth, to outstanding
Termination Payments, Casualty Payments and Late Return Payments
pro rata and fifth, to outstanding late charges pursuant to
Sections 5.5 and 17.5(iv)) , (iii) to the payment of
all other amounts due hereunder from such Lessee, (iv) to the
payment of any amounts to the Lessor, or such Person(s) as may be
lawfully entitled thereto, and (v) any remaining proceeds to such
Lessee.
SECTION 18. MANUFACTURER EVENTS OF
DEFAULT. Upon the occurrence of any of the following events
(each, a " Manufacturer Event of Default ") with respect to
a Manufacturer, the Lessees on behalf of the Lessor shall (a) no
longer place Vehicle Orders for additional Program Vehicles from
such Manufacturer (each, a " Defaulting Manufacturer "), (b)
no longer turn back Program Vehicles for repurchase under any
Vehicle Disposition Program that is a repurchase program of a
Defaulting Manufacturer, and (c) cancel any Vehicle Order with such
Defaulting Manufacturer to which a vehicle identification number (a
" VIN ") has not been assigned as of the date such
Manufacturer Event of Default occurs:
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Section 18.1. The failure of such Manufacturer to pay Guaranteed
Payments, Repurchase Payments and/or Incentive Payments due under,
respectively, such Manufacturer’s Vehicle Disposition
Programs and its incentive programs, in an aggregate amount in
excess of $40,000,000 (net of amounts that are the subject of a
good faith dispute, as evidenced in writing by either the
applicable Lessee or the Manufacturer questioning the accuracy of
the amounts paid or payable in respect of any such Vehicle
Disposition Programs or incentive programs), which failure, in the
case of each such Guaranteed Payment, Repurchase Payment and/or
Incentive Payment included in such amount in excess of $40,000,000
continues for more than ninety (90) days following the Disposition
Date for the related Vehicle.
Section 18.2. The occurrence and continuance for a period of thirty
(30) days of an Event of Bankruptcy with respect to such
Manufacturer, and the Confirmation Condition is not satisfied;
provided , that for the purposes of clauses (a) through (c)
of Section 18 , the Lessees and the Lessor agree to take (or
refrain from taking) the actions specified in such clauses during
the thirty (30) day period following such Event of Bankruptcy.
For purposes hereof, " Confirmation Condition " shall
mean, with respect to a Manufacturer that is the subject of an
Event of Bankruptcy that is a proceeding under Chapter 11 of the
Bankruptcy Code to reorganize (the " Proceeding "), a
condition that is satisfied upon entry and during the effectiveness
of an order by the bankruptcy court having jurisdiction over the
Proceeding approving (i) (A) assumption under Section 365 of the
Bankruptcy Code by the Manufacturer, or trustee in bankruptcy on
its behalf, of its Vehicle Disposition Program (and all related
Assignment Agreements), (B) payment of all amounts due and payable
by the Manufacturer to RCFC or its Affiliates under its Vehicle
Disposition Program, and (C) all actions and payments necessary to
cure all existing defaults by the Manufacturer with respect to RCFC
or its Affiliates under the Vehicle Disposition Program to the date
of effectiveness of such order, or (ii) (A) execution, delivery and
performance by the Manufacturer of (x) a new post-petition Vehicle
Disposition Program under which RCFC is an eligible fleet purchaser
and having substantially the same terms and covering Vehicles with
substantially the same characteristics as the Vehicle Disposition
Program in effect on the date the Proceeding was commenced, and (y)
new Assignment Agreements effecting the assignment of benefits of
such new Vehicle Disposition Program from RCFC to the Master
Collateral Agent and acknowledged by the Manufacturer, (B) payment
of all amounts due and payable by such Manufacturer to RCFC or its
Affiliates under the previous Vehicle Disposition Program at the
time of the execution and delivery of the new post-petition Vehicle
Disposition Program, and (C) all actions and payments necessary to
cure all existing defaults by the Manufacturer with respect to RCFC
or its Affiliates under the previous Vehicle Disposition Program to
the date of effectiveness of such order, and in each case in (i) or
(ii) above the actions and payments in clause (C) have been taken
or made.
SECTION 19. CERTIFICATION OF TRADE OR
BUSINESS USE. Pursuant to Section 7701 of the Code and as set
forth in Attachment C hereto, each Lessee will warrant and
certify that (1) such Lessee intends to use the Acquired Vehicles
in a trade or business of such Lessee, and (2) such Lessee has been
advised that it will not be treated as the owner of the Acquired
Vehicles for federal income tax purposes.
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SECTION 20. SURVIVAL. In the event
that, during the term of this Lease, a Lessee becomes liable for
the payment or reimbursement of any obligations, claims or taxes
pursuant to any provision hereof, such liability will continue,
notwithstanding the expiration or termination of this Lease, until
all such amounts are paid or reimbursed by such Lessee.
SECTION 21. RIGHTS OF LESSOR PLEDGED TO
MASTER COLLATERAL AGENT AND TRUSTEE. Notwithstanding anything
to the contrary contained in this Lease, each Lessee and the
Guarantor acknowledges that each of the Lessees and the Lessor,
pursuant to the Master Collateral Agency Agreement, has granted a
security interest to the Master Collateral Agent, for the benefit
of the Beneficiaries specified therein, in all of its right, title
and interest in, to and under the Vehicles, the related Vehicle
Disposition Programs, the Master Collateral Account and all other
Master Collateral specified in the Master Collateral Agency
Agreement as being pledged by DTG Operations and RCFC, and each
Lessee and the Guarantor further acknowledges that the Lessor,
pursuant to the Indenture, has granted a security interest to the
Trustee in all of its right, title and interest in, to and under
the RCFC Agreements, the Collection Account and the other
Collateral described in the Indenture. Accordingly, each Lessee and
the Guarantor agrees that:
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(i) Subject
to the terms of the Indenture, the Trustee shall have all the
rights, powers, privileges and remedies of the Lessor hereunder.
Specifically, each Lessee and the Guarantor agrees that, upon the
occurrence of an Amortization Event, the Trustee or, with respect
to any Master Collateral, the Master Collateral Agent (for and on
behalf of the Trustee) may exercise any right or remedy against
each Lessee or the Guarantor provided for herein or in the
Indenture or the Master Collateral Agency Agreement and none of the
Lessees or the Guarantor will interpose as a defense that such
claim should have been asserted by the Lessor;
(ii) Upon
the delivery by the Master Collateral Agent or the Trustee of any
notice to a Lessee or the Guarantor stating that a Lease Event of
Default or an Amortization Event with respect to such Lessee has
occurred, then such Lessee or the Guarantor will, if so requested
by the Master Collateral Agent (with respect to the Master
Collateral) or the Trustee (with respect to the Collateral), treat
the Master Collateral Agent or the Trustee or the Master Collateral
Agent’s or the Trustee’s designee, as the case may be,
for all purposes as the Lessor hereunder and in all respects comply
with all obligations under this Lease that are asserted by the
Master Collateral Agent or the Tru
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