ENHANCEMENT LETTER OF CREDIT APPLICATION AND AGREEMENT

EXHIBIT 4.142

                                                                                                                                                                                                               

 

ENHANCEMENT LETTER OF CREDIT

APPLICATION AND AGREEMENT,

dated as of April 21, 2005,

among

DTG OPERATIONS, INC.,

those direct and indirect Subsidiaries of

Dollar Thrifty Automotive Group, Inc. from time to time

becoming additional Lessees hereunder,

RENTAL CAR FINANCE CORP.,

DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.

and

CREDIT SUISSE FIRST BOSTON,

as the Series 2005-1 Letter of Credit Provider

 

 

 

 

THIS ENHANCEMENT LETTER OF CREDIT APPLICATION AND AGREEMENT, dated as of April 21, 2005 (as amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms hereof, this “ Agreement ”), is entered into by and among DTG OPERATIONS, INC., formerly known as DOLLAR RENT A CAR SYSTEMS, INC., an Oklahoma corporation (“ DTG Operations ”), those direct or indirect Subsidiaries of DTAG (as defined below) that become additional parties to this Agreement from time to time pursuant to the provisions of Section 4.17 hereof (such additional parties hereto and DTG Operations, each a “ Lessee ” and, collectively, the “ Lessees ”), RENTAL CAR FINANCE CORP., a special purpose Oklahoma corporation (“ RCFC ”), DOLLAR THRIFTY AUTOMOTIVE GROUP, INC., a Delaware corporation as the Guarantor (“ DTAG ” or the “ Guarantor ”), and CREDIT SUISSE FIRST BOSTON, a Swiss banking corporation, as the Series 2005-1 Letter of Credit Provider (“ Credit Suisse First Boston ” or the “ Series 2005-1 Letter of Credit Provider ”).

RECITALS

1. DTAG, DTG Operations and Thrifty Rent-A-Car System, Inc., an Oklahoma corporation (“ Thrifty ”), as borrowers (each a “ Borrower ” and, collectively, the “ Borrowers ”), the financial institutions signatory thereto as the lenders (each a “ Revolving Lender ” and, collectively, the “ Revolving Lenders ”) and Credit Suisse First Boston, in its capacity as administrative agent thereunder (in such capacity, the “ Administrative Agent ”), have entered into a Third Amended and Restated Credit Agreement, dated as of April 1, 2004, amending and restating in its entirety the Second Amended and Restated Credit Agreement, dated as of December 6, 2002 (as so amended and restated, and together with all amendments, supplements, amendments and restatements and other modifications, from time to time thereafter made thereto, the “ Credit Agreement ”), pursuant to which, in conjunction with this Agreement, the Series 2005-1 Letter of Credit (as defined in Section 2.1 ) is being issued as of even date herewith and the Revolving Lenders are participating in such issuance.

2. DTAG, as Master Servicer, RCFC, DTG Operations, Bankers Trust Company (now known as Deutsche Bank Trust Company Americas (“ Deutsche Bank Trust Company ”)), as Master Collateral Agent, and certain additional parties thereto have entered into an Amended and Restated Master Collateral Agency Agreement, dated as of December 23, 1997 (as such agreement may be further amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms thereof, the “ Master Collateral Agency Agreement ”), which Master Collateral Agency Agreement amended and restated the Master Collateral Agency Agreement, dated as of December 13, 1995, among Thrifty, RCFC, Deutsche Bank Trust Company, as the Master Collateral Agent thereunder, and certain additional parties thereto, and pursuant to which (i) RCFC has granted to the Master Collateral Agent a first priority security interest in the RCFC Master Collateral (as defined therein) and (ii) the Lessees have granted to the Master Collateral Agent a first priority security interest in the Lessee Grantor Master Collateral (as defined therein), for the benefit of the parties identified from time to time as the Financing Sources and the Beneficiaries thereunder (as such terms are defined therein).

 

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3. RCFC, as lessor, the Lessees, as lessees and DTAG, as guarantor of certain of the Lessees’ obligations thereunder, have entered into the Master Motor Vehicle Lease and Servicing Agreement, dated as of March 6, 2001 (as amended by Amendment No. 1 to Master Motor Vehicle Lease and Servicing Agreement, dated as of December 12, 2002, and Amendment No. 2 to Master Motor Vehicle Lease and Servicing Agreement, dated as of March 25, 2003, and as the same may be further amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms thereof, the “ Master Lease ”), pursuant to which RCFC will lease Vehicles (such capitalized term, together with all other capitalized terms used herein, shall have the meanings assigned thereto pursuant to Section 1.1 ) to the Lessees in their respective domestic daily rental business and DTAG in its capacity as guarantor has guaranteed certain of the obligations of the Lessees to RCFC thereunder.

4. Contemporaneously with the execution and delivery of this Agreement, RCFC, as issuer (in such capacity, the “ Issuer ”), and Deutsche Bank Trust Company, as trustee (in such capacity, the “ Trustee ”), are entering into the Series 2005-1 Supplement, dated as of even date herewith (as the same may be amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms thereof, the “ Series 2005-1 Supplement ”), to the Base Indenture, dated as of December 13, 1995 (as amended as of December 23, 1997, and as the same may be further amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms thereof, the “ Base Indenture ” and, together with the Series 2005-1 Supplement and the other Supplements thereto, the “ Indenture ”), between RCFC and the Trustee, pursuant to which RCFC will issue two classes of Rental Car Asset Backed Notes, Series 2005-1: (i) the Class A-1 Floating Rate Rental Car Asset Backed Notes (the “ Class A-1 Notes ”) and (ii) the Class A-2 4.59% Rental Car Asset Backed Notes (the “ Class A-2 Notes ”, and collectively with the Class A-1 Notes, the “ Series 2005-1 Notes ”).

5. Contemporaneously with the execution and delivery of this Agreement, Credit Suisse First Boston, in its capacity as the Series 2005-1 Letter of Credit Provider, is issuing the Series 2005-1 Letter of Credit, dated as of even date herewith, (i) as credit support for amounts owed by the Lessees under the Master Lease and (ii) as credit support for amounts owed by DTAG under the Demand Note referred to in Section 4.15 of the Series 2005-1 Supplement.

6. The Lessees, RCFC, DTAG and Credit Suisse First Boston, in its capacity as the Series 2005-1 Letter of Credit Provider, are entering into this Agreement to provide for the reimbursement by DTAG and the Lessees and the guarantee of the Lessees’ reimbursement obligations hereunder by DTAG, in each case to the extent and subject to the conditions set forth herein, of any amount paid by the Series 2005-1 Letter of Credit Provider as a draw upon the Series 2005-1 Letter of Credit.

NOW, THEREFORE, in consideration of the premises and of the agreements herein contained, and for due and adequate consideration, which the parties hereto hereby acknowledge, the parties hereto hereby agree as follows:

 

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ARTICLE I

DEFINITIONS

Section 1.1 Definitions . As used in this Agreement and unless the context requires a different meaning, capitalized terms used but not defined herein (including the preamble and the recitals hereto) shall have the meanings assigned to such terms in (i) the Series 2005-1 Supplement (including, without limitation, the effect of Section 8.9 thereof) and (ii) the Definitions List attached as Schedule 1 to the Base Indenture, as such Definitions List may be amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the Base Indenture; provided that to the extent, if any, that any capitalized term used but not defined herein has a meaning assigned to such term in more than one of the agreements referred to in clauses (i) and (ii) above, then the meaning assigned to such term in the Series 2005-1 Supplement shall apply herein.

ARTICLE II

ISSUANCE OF SERIES 2005-1 LETTER OF CREDIT;

REIMBURSEMENT OBLIGATION

Section 2.1 Issuance of Series 2005-1 Letter of Credit; Substitute Series 2005-1 Letter of Credit; Extensions of the Series 2005-1 Letter of Credit . (a) The Series 2005-1 Letter of Credit Provider hereby agrees, on the terms and subject to the conditions hereinafter set forth, to issue (i) as credit support for payments due under the Master Lease, the rights under which have been assigned by RCFC to the Trustee under the Series 2005-1 Supplement (in respect of Credit Demands and Termination Demands (in each case as defined in the Series 2005-1 Letter of Credit)), (ii) as support for a LOC Termination Disbursement under Section 4.16 of the Series 2005-1 Supplement and (iii) as credit support for draws on the Demand Note under Section 4.15 of the Series 2005-1 Supplement, an irrevocable letter of credit dated as of even date herewith in substantially the form attached hereto as Exhibit A, in an amount equal to $14,400,000 (the “ Series 2005-1 Letter of Credit Commitment ”), for a term expiring on April 20, 2008 or, if such date is not a Business Day (as defined in the Credit Agreement), the immediately preceding Business Day (as defined in the Credit Agreement), or such later date to which the term is extended pursuant to Section 2.1(c) (the “ Series 2005-1 Letter of Credit Expiration Date ”) (as such letter of credit may be amended, supplemented, amended and restated, substituted or replaced or otherwise modified from time to time in accordance with the terms hereof and thereof (including increases in the Series 2005-1 Letter of Credit Commitment requested pursuant to Section 4.1 of the Credit Agreement and otherwise permitted pursuant to the terms of the Credit Agreement), the “ Series 2005-1 Letter of Credit ”). In furtherance of, and not in limitation of, the terms of the preceding sentence relating to amendments to the Series 2005-1 Letter of Credit, promptly following the Trustee’s receipt of written notice from DTAG, individually and on behalf of the Lessees, substantially in the form of Exhibit C hereto, requesting a reduction of the Series 2005-1 Letter of Credit Amount (as defined in the Series 2005-1 Letter of Credit), and in no event more than two (2) Business Days following the date of its receipt of such notice, the Trustee shall deliver to the Series 2005-1 Letter of Credit Provider a Notice of Reduction of Series 2005-1 Letter of Credit Amount substantially in the form of Annex D to the Series 2005-1 Letter of Credit, which, upon the Series 2005-1 Letter of

 

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Credit Provider’s written acknowledgment and agreement, shall effect a reduction in the Series 2005-1 Letter of Credit Amount as provided in such Notice (and shall automatically effect a reduction of the Series 2005-1 Letter of Credit Amount hereunder). Upon the Series 2005-1 Letter of Credit Provider’s written acknowledgment and agreement with each such Notice of Reduction of Series 2005-1 Letter of Credit Amount, the Series 2005-1 Letter of Credit Provider will provide promptly copies thereof to the Trustee. Upon the Trustee’s written acknowledgment and acceptance of each Notice of Increase of Series 2005-1 Letter of Credit Amount (substantially in the form of Annex E to the Series 2005-1 Letter of Credit), the Trustee will provide promptly copies thereof to the Series 2005-1 Letter of Credit Provider.

(b) If a successor Trustee is appointed, promptly following the appointment of such successor Trustee pursuant to the terms of the Series 2005-1 Supplement and upon receipt of an Instruction to Transfer substantially in the form of Annex F to the Series 2005-1 Letter of Credit, the Series 2005-1 Letter of Credit Provider shall deliver for the benefit of such successor Trustee and the current Trustee, in exchange for the outstanding Series 2005-1 Letter of Credit, a substitute letter of credit substantially in the form of Exhibit A hereto, having terms identical to the then outstanding Series 2005-1 Letter of Credit but in favor of such successor Trustee.

(c) If the Lessees wish to extend the Series 2005-1 Letter of Credit Expiration Date for purposes of this Agreement and the Series 2005-1 Letter of Credit, DTAG (on behalf of the Lessees) shall give the Series 2005-1 Letter of Credit Provider and the Administrative Agent written notice in the form of an Issuance Request (as defined in the Credit Agreement) to such effect not more than 75 days and not less than 45 days prior to the date that is three years from the Series 2005-1 Closing Date (or if such day is not a Business Day (as defined in the Credit Agreement) then on the next succeeding Business Day (as defined in the Credit Agreement)) and thereafter not more than 75 days and not less than 45 days prior to each subsequent one-year anniversary of the Series 2005-1 Closing Date, provided , however , that the additional term of the Series 2005-1 Letter of Credit may not extend beyond the earlier of (i) two years from its date of extension and (ii) five Business Days prior to the Stated Maturity Date (as defined in the Credit Agreement) in effect at the time of such extension. If the Series 2005-1 Letter of Credit Expiration Date is so extended, the Series 2005-1 Letter of Credit Provider shall either (i) issue to the Trustee in exchange for and upon receipt of the then outstanding Series 2005-1 Letter of Credit a substitute letter of credit having terms identical to the then outstanding Series 2005-1 Letter of Credit but expiring on the Series 2005-1 Letter of Credit Expiration Date, as so extended, or (ii) deliver to the Trustee an amendment to the then outstanding Series 2005-1 Letter of Credit to reflect such extension of the Series 2005-1 Letter of Credit Expiration Date.

(d) If the conditions to the extension of the Series 2005-1 Letter of Credit Expiration Date pursuant to paragraph (c) of this Section 2.1 that are set forth in Section 6.2 of the Credit Agreement and Section 2.7 of this Agreement are not satisfied (or waived) on the fortieth day preceding the Series 2005-1 Letter of Credit Expiration Date then in effect, each of the Lessees shall use its best efforts (i) to obtain a successor institution to act as Series 2005-1 Letter of Credit Provider or (ii), in the alternative, to otherwise credit enhance the Master Lease payments to be made by the Lessees with (A) the funding of the Series 2005-1 Cash Collateral Account with cash in the amount of the Series 2005-1 Letter of Credit Amount immediately prior to any drawing referred to in subsection (f) below (B) other cash collateral accounts, overcollateralization or subordinated securities or (C) with the consent of the Required Series

 

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2005-1 Noteholders, a Surety Bond or other similar arrangements; provided , however , that (1) any such successor institution or other form of substitute credit enhancement referred to in the foregoing clauses (ii)(B) and (ii)(C) shall be subject to the approval of each Rating Agency and (2) any such successor institution or other form of substitute credit enhancement referred to in the foregoing clauses (i) and (ii)(C) shall, if the ratings with respect to such substitute credit enhancement, if applicable, are less than “A-1” or the equivalent from Standard & Poor’s, “P-1” or the equivalent from Moody’s or “F1” or the equivalent from Fitch (if rated by Fitch), be approved by the Required Series 2005-1 Noteholders; provided further , however , that only after all amounts then owing to the Series 2005-1 Letter of Credit Provider hereunder have been paid in full shall the letter of credit issued by such successor bank or banks or such other substitute credit enhancement be substituted for the Series 2005-1 Letter of Credit. If such a successor institution or such other substitute credit enhancement is obtained, each of the Lessees and, if applicable, such successor institution shall (x) sign such documents and instruments as shall be appropriate to evidence such successor institution’s issuance of a substitute letter of credit or such other substitute credit enhancement, (y) cause the Trustee to return to the Series 2005-1 Letter of Credit Provider the then outstanding Series 2005-1 Letter of Credit and (z) deliver to the Trustee a substitute letter of credit having terms identical to the then outstanding Series 2005-1 Letter of Credit but expiring on the Series 2005-1 Letter of Credit Expiration Date as so extended and with such successor institution as the issuer thereof or deliver such other substitute credit enhancement.

(e) If (i) DTAG (on behalf of the Lessees) does not request an extension of the Series 2005-1 Letter of Credit Expiration Date or (ii) the conditions precedent to the extension of the Series 2005-1 Letter of Credit Expiration Date pursuant to paragraph (c) of this Section 2.1 and Section 2.7(b) are not satisfied (or waived) and the Lessees do not obtain a successor Series 2005-1 Letter of Credit Provider or other substitute credit enhancement prior to the date which is 10 Business Days prior to the Series 2005-1 Letter of Credit Expiration Date, then DTAG (on behalf of the Lessees) shall immediately notify the Trustee and the Series 2005-1 Insurer in writing.

(f) If (i) the short-term debt or deposit rating of the Series 2005-1 Letter of Credit Provider shall be downgraded below “A-1” by Standard & Poor’s, below “P-1” by Moody’s or below “F1” by Fitch (if rated by Fitch) or (ii) the Series 2005-1 Letter of Credit Provider has notified DTAG (and has not retracted such notification) that its compliance with any of its obligations hereunder would be unlawful, each of the Lessees shall use its best efforts (A) to obtain a successor institution to act as Series 2005-1 Letter of Credit Provider or (B) in the alternative, to otherwise credit enhance the Master Lease payments to be made by the Lessees with (1) the funding of the Series 2005-1 Cash Collateral Account with cash in the amount of the Series 2005-1 Letter of Credit Amount, (2) other cash collateral accounts, overcollateralization or subordinated securities or (3) with the consent of the Series 2005-1 Noteholders, a Surety Bond or other similar arrangements; provided , however , that (aa) any such successor institution or other form of substitute credit enhancement referred to in the foregoing clauses (ii)(B)(2) and (ii)(B)(3) shall be subject to the approval of each Rating Agency and (bb) any such successor institution or other form of substitute credit enhancement referred to in the foregoing clause (ii)(A) or (ii)(B)(3) shall, if the ratings with respect to such substitute credit enhancement, if applicable, are less than “A-1” or the equivalent from Standard & Poor’s, “P-1” or the equivalent from Moody’s and “F1” or the equivalent from Fitch (if rated by Fitch), be approved

 

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by the Required Series 2005-1 Noteholders; provided further , however , that only after all amounts then owing to the Series 2005-1 Letter of Credit Provider hereunder have been paid in full shall the letter of credit issued by such successor bank or banks or such other substitute credit enhancement be substituted for the Series 2005-1 Letter of Credit.

(g) In the event that (i) the Series 2005-1 Letter of Credit Provider shall have notified DTAG (and shall not have retracted such notification) that its compliance with any of its obligations hereunder or under the related Series 2005-1 Letter of Credit would be unlawful, (ii) the Series 2005-1 Letter of Credit Provider fails to extend its Series 2005-1 Letter of Credit Expiration Date pursuant to Section 2.1(c) , (iii) any of the Lessees or DTAG is required pursuant to Sections 5.1, 5.3, 5.5 or 5.6 of the Credit Agreement to make any payment to or on behalf of the Series 2005-1 Letter of Credit Provider (or would be so required on or prior to the next following date on which a payment hereunder is required to be made to or for any such Series 2005-1 Letter of Credit Provider), (iv) the Series 2005-1 Letter of Credit Provider shall have wrongfully failed to fund any LOC Credit Disbursement when required hereunder, or (v) the short-term debt or deposit rating of the Series 2005-1 Letter of Credit Provider shall be downgraded below “A-1” by Standard & Poor’s, below “P-1” by Moody’s or below “F1” by Fitch (if rated by Fitch), then the Lessees shall have the right at their own expense, upon notice to the Series 2005-1 Letter of Credit Provider, and such Series 2005-1 Letter of Credit Provider hereby agrees, to transfer and assign without recourse (in accordance with and subject to the restrictions contained in Section 4.9 with respect to assignments) all the interests, rights and obligations of the Series 2005-1 Letter of Credit Provider to a replacement Series 2005-1 Letter of Credit Provider (having a short-term debt or deposit rating of at least “A-1” by Standard & Poor’s and “P-1” by Moody’s and “F1” by Fitch (if rated by Fitch)) provided by DTAG (on behalf of the Lessees); provided , however , that (w) no such assignment to any replacement Series 2005-1 Letter of Credit Provider shall conflict with any law, rule, regulation or order of any Governmental Authority, (x) such assignment to any replacement Series 2005-1 Letter of Credit Provider shall be without recourse, representation and warranty and shall be on terms and conditions reasonably satisfactory to the Series 2005-1 Letter of Credit Provider and such replacement Series 2005-1 Letter of Credit Provider, (y) the purchase price paid by such replacement Series 2005-1 Letter of Credit Provider shall be in an amount equal to the aggregate amount of the LOC Credit Disbursements owed by the Lessees or DTAG to such replaced Series 2005-1 Letter of Credit Provider under this Agreement as of the date of such assignment, and (z) DTAG (on behalf of the Lessees) or such replacement Series 2005-1 Letter of Credit Provider, as the case may be, shall pay to such replaced Series 2005-1 Letter of Credit Provider in same day funds on the date of such assignment the principal of and interest accrued to the date of payment on the LOC Credit Disbursements or LOC Termination Disbursement made by such replaced Series 2005-1 Letter of Credit Provider hereunder and all other amounts accrued for such replaced Series 2005-1 Letter of Credit Provider’s account or owed to it hereunder, including those amounts owed pursuant to Section 2.4 of this Agreement and Sections 5.1, 5.3, 5.5 and 5.6 of the Credit Agreement (which are incorporated herein); provided further , however , that only after all amounts then owing to the Series 2005-1 Letter of Credit Provider to be replaced hereunder have been paid in full shall the Series 2005-1 Letter of Credit issued by the replacement Series 2005-1 Letter of Credit Provider be substituted for the Series 2005-1 Letter of Credit Provider’s Series 2005-1 Letter of Credit. If such a replacement Series 2005-1 Letter of Credit is obtained, each of the Lessees and, if applicable, such successor institution, shall sign such documents and instruments as shall be appropriate to evidence such successor institution’s issuance

 

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of a substitute letter of credit or such other substitute credit enhancement. If a replacement Series 2005-1 Letter of Credit Provider succeeds the Series 2005-1 Letter of Credit Provider or other substitute credit enhancement is obtained to replace the Series 2005-1 Letter of Credit, then the Lessees and, if applicable, such successor institution, shall (a) sign such documents and instruments as shall be appropriate to evidence such successor institution’s issuance of a substitute letter of credit or such other substitute credit enhancement, (b) cause the return to the Series 2005-1 Letter of Credit Provider of the then outstanding Series 2005-1 Letter of Credit, and (c) deliver to the Trustee a substitute letter of credit having terms identical to the then outstanding Series 2005-1 Letter of Credit but with such successor institution as the issuer thereof or deliver such other substitute credit enhancement. DTAG shall provide prompt written notice to the Trustee of the appointment of any such successor institution in accordance with the terms of this Agreement.

Section 2.2 [Reserved.]

Section 2.3 Reimbursement . (a)  Each Lessee agrees to pay to the Series 2005-1 Letter of Credit Provider on demand (which demand may be made on DTAG on behalf of the Lessees) on and after each date on which the Series 2005-1 Letter of Credit Provider shall pay any LOC Credit Disbursement under the Series 2005-1 Letter of Credit in respect of Series 2005-1 Lease Payment Losses allocated to making a drawing under the Series 2005-1 Letter of Credit, (A) an amount equal to the portion of such LOC Credit Disbursement allocable to amounts due and payable by such Lessee under the Master Lease (as determined by the Trustee or, in the absence of such determination, the Series 2005-1 Letter of Credit Provider), plus (B) interest on any amount remaining unpaid by such Lessee to the Series 2005-1 Letter of Credit Provider under clause (A) above, from (and including) the date such amount is paid by the Series 2005-1 Letter of Credit Provider under the Series 2005-1 Letter of Credit, until payment in full thereof (after as well as before judgment), in accordance with the terms of the Credit Agreement (which terms are incorporated herein by reference). DTAG agrees to pay to the Series 2005-1 Letter of Credit Provider on demand on and after each date on which the Series 2005-1 Letter of Credit Provider shall pay any LOC Credit Disbursement under the Series 2005-1 Letter of Credit allocable to amounts owed by DTAG under the Demand Note (as determined by the Trustee or, in the absence of such determination, the Series 2005-1 Letter of Credit Provider) (A) an amount equal to the portion of such LOC Credit Disbursement so allocable, plus (B) interest on any amount remaining unpaid by DTAG to the Series 2005-1 Letter of Credit Provider under the immediately preceding clause (A) , from (and including) the date such amount is paid by the Series 2005-1 Letter of Credit Provider under the Series 2005-1 Letter of Credit until payment in full thereof (after as well as before judgment), in accordance with the terms of the Credit Agreement (which terms are incorporated herein by reference).

(b) In the event of a LOC Termination Disbursement under the Series 2005-1 Letter of Credit in accordance with Section 2.1(e) or (f) each Lessee agrees to pay to the Series 2005-1 Letter of Credit Provider an amount equal to:

(i) a percentage of the amount of such LOC Termination Disbursement that is allocable, as determined by the Trustee or, in the absence of such determination, the Series 2005-1 Letter of Credit Provider, to amounts due and payable by such Lessee under the Master Lease (the “ Lessee Termination Reimbursement Share ”) and which in the aggregate for all such Lessees is equal to 100%;

 

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plus

(ii) interest on the Lessee Termination Reimbursement Share allocable to such Lessee remaining unpaid by such Lessee from the date of payment of such LOC Termination Disbursement by the Series 2005-1 Letter of Credit Provider until payment in full of the Lessee Termination Reimbursement Share by such Lessee to the Series 2005-1 Letter of Credit Provider (after as well as before judgment), at a rate per annum provided for by the terms of the Credit Agreement (which terms are incorporated herein by this reference).

Each Lessee shall pay its respective Lessee Termination Reimbursement Share of such LOC Termination Disbursement to the Series 2005-1 Letter of Credit Provider on the date of such LOC Termination Disbursement in accordance with the terms of the Credit Agreement (which terms are incorporated herein by this reference).

(c)  Until the Series 2005-1 Letter of Credit Provider is reimbursed for such LOC Termination Disbursement, the Series 2005-1 Letter of Credit Provider may direct in writing the investment in Permitted Investments of the funds in the Series 2005-1 Cash Collateral Account from such LOC Termination Disbursement made under Section 2.1(e) or (f) and shall be entitled to receive the earnings thereon when such earnings are realized (the term “earnings” to include interest payable by each Lessee on amounts withdrawn from the Series 2005-1 Cash Collateral Account) from such investments from time to time from the Series 2005-1 Cash Collateral Account in accordance with the following clause (d) and Sections 4.17(c) and (d) of the Series 2005-1 Supplement. After reimbursement of the Series 2005-1 Letter of Credit Provider for the full amount of the LOC Termination Disbursement, DTAG (on behalf of the Lessees) may direct investment in Permitted Investments of the funds on deposit in the Series 2005-1 Cash Collateral Account and shall be entitled to receive the earnings thereon from such investments from time to time from releases of excess amounts from the Series 2005-1 Cash Collateral Account in accordance with clause (d) below and Sections 4.17(c) and (d) of the Series 2005-1 Supplement.

(d) Earnings from investments in the Series 2005-1 Cash Collateral Account shall be paid first, to the Series 2005-1 Letter of Credit Provider to the extent accruing on the amount of a LOC Termination Disbursement made under Section 2.1(e) or (f) until the earlier of the date the Series 2005-1 Letter of Credit Provider is reimbursed for such amount or the date interest begins to accrue on the full amount of such LOC Termination Disbursement and second, to the related Lessee. Any amounts (other than earnings on investments) released from the Series 2005-1 Cash Collateral Account in accordance with Section 4.17(d) of the Series 2005-1 Supplement shall be paid to the Series 2005-1 Letter of Credit Provider to the extent the Series 2005-1 Letter of Credit Provider has not been fully reimbursed by the Lessees under clauses (a) and (c) above for LOC Credit Disbursements or a LOC Termination Disbursement. Upon reimbursement in full to the Series 2005-1 Letter of Credit Provider of amounts owed under clauses (a) and (c) above, amounts released from the Series 2005-1 Cash Collateral Account in accordance with Section 4.17(d) of the Series 2005-1 Supplement shall be paid to the Lessees.

 

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(e) After a LOC Termination Disbursement has been made, any withdrawals made by the Trustee from the Series 2005-1 Cash Collateral Account in respect of Series 2005-1 Lease Payment Losses (as notified to RCFC and the Lessees by the Trustee pursuant to Section 4.14 of the Series 2005-1 Supplement) shall be reimbursed to the Series 2005-1 Cash Collateral Account in accordance with Section 4.7 of the Series 2005-1 Supplement.

Section 2.4 Series 2005-1 Letter of Credit Fees and Expenses . This Agreement hereby incorporates by reference as though fully set forth herein, all provisions of the Credit Agreement on the fees and expenses due and payable to the Series 2005-1 Letter of Credit Provider in connection with issuance of the Series 2005-1 Letter of Credit including, without limitation, Sections 3.3 and 4.3 thereof, and DTG Operations and DTAG each hereby agrees to pay such fees and expenses pursuant to and in the manner provided in the Credit Agreement.

Section 2.5 No Liability of Series 2005-1 Letter of Credit Provider . Each of the Lessees and DTAG acknowledges that the Series 2005-1 Letter of Credit Provider is not responsible for any risks of acts or omissions of the Trustee and any other beneficiary or transferee of the Series 2005-1 Letter of Credit with respect to its use of the Series 2005-1 Letter of Credit. Neither the Series 2005-1 Letter of Credit Provider nor any of its respective employees, officers or directors shall be liable or responsible for: (a) the use which may be made of the Series 2005-1 Letter of Credit or any acts or omissions of the Trustee and any transferee in connection therewith; (b) the validity or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, fraudulent or forged; (c) payment by the Series 2005-1 Letter of Credit Provider against presentation of documents which do not comply with the terms of the Series 2005-1 Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Series 2005-1 Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under the Series 2005-1 Letter of Credit; provided , however , that the Series 2005-1 Letter of Credit Provider shall be liable to each Lessee to the extent of any direct, as opposed to consequential, damages suffered by such Lessee which were caused by (i) the Series 2005-1 Letter of Credit Provider’s willful misconduct or gross negligence in determining whether documents presented under the Series 2005-1 Letter of Credit comply with the terms of the Series 2005-1 Letter of Credit or (ii) the Series 2005-1 Letter of Credit Provider’s gross negligence in failing to make or willful failure to make lawful payment under the Series 2005-1 Letter of Credit after the presentation to the Series 2005-1 Letter of Credit Provider by the Trustee of a certificate strictly complying with the terms and conditions of the Series 2005-1 Letter of Credit. In furtherance and not in limitation of the foregoing, the Series 2005-1 Letter of Credit Provider may accept documents that appear on their face to be in order, without responsibility for further investigation.

Section 2.6 Surrender of Series 2005-1 Letter of Credit . Provided that the Series 2005-1 Letter of Credit Provider is not then in default under the Series 2005-1 Letter of Credit by reason of its having wrongfully failed to honor a demand for payment previously made by the Trustee under the Series 2005-1 Letter of Credit, the Series 2005-1 Letter of Credit Provider and DTAG (on behalf of itself and the Lessees) shall instruct the Trustee to surrender the Series 2005-1 Letter of Credit to the Series 2005-1 Letter of Credit Provider on the earliest of (i) the Series 2005-1 Letter of Credit Expiration Date, (ii) the date on which the Series 2005-1 Letter of Credit Provider honors a Certificate of Termination Demand presented under the Series 2005-1 Letter of Credit to the extent of the Series 2005-1 Letter of Credit Amount as in effect on such date, (iii) the date on which the Series 2005-1 Notes are paid in full, and (iv) the date on which the Series 2005-1 Letter of Credit Provider receives written notice from the Trustee that a letter of credit or other credit enhancement has been substituted for the Series 2005-1 Letter of Credit.

 

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Section 2.7 Conditions Precedent to Issuance, Increase or Extension . (a) The following constitute conditions precedent to the obligation of the Series 2005-1 Letter of Credit Provider to issue the Series 2005-1 Letter of Credit ( provided , that such conditions will be deemed to be satisfied upon the issuance of the Series 2005-1 Letter of Credit):

(i) On the date of issuance of the Series 2005-1 Letter of Credit, each condition precedent to the issuance of the Series 2005-1 Letter of Credit set forth in Section 6.2 of the Credit Agreement shall be satisfied (which conditions are hereby incorporated herein by this reference).

(ii) On the date of issuance of the Series 2005-1 Letter of Credit, all representations and warranties of each of the Lessees and DTAG contained in this Agreement and in each other Related Document to which any of the Lessees or DTAG is a party shall be true and correct immediately prior to, and after giving effect to, the issuance of the Series 2005-1 Letter of Credit.

(iii) On the date of issuance of the Series 2005-1 Letter of Credit, and after giving effect to the transactions contemplated by this Agreement and the Series 2005-1 Letter of Credit, there shall exist no Potential Event of Default or Event of Default under this Agreement.

(iv) The Series 2005-1 Letter of Credit Provider shall have received as of the date of issuance of the Series 2005-1 Letter of Credit a copy of the confirmation letter from each of S&P, Moody’s and Fitch to the effect that the Series 2005-1 Notes shall have been given a rating of at least “AAA” by S&P, “Aaa” by Moody’s and “AAA” by Fitch which ratings shall be in full force and effect.

(v) The Series 2005-1 Letter of Credit Provider shall have received (A) the favorable written opinions of counsel to each of the Lessees, DTAG and RCFC, dated the Series 2005-1 Closing Date, covering such matters as the Series 2005-1 Letter of Credit Provider may reasonably request, (B) copies of any representation letters or certificates (or similar documents) provided to the Trustee, the Series 2005-1 Insurer, any of the Lessees, DTAG or RCFC and (C) copies of all opinions delivered to the Trustee or the Series 2005-1 Insurer, as an addressee or with reliance letters.

(vi) The Series 2005-1 Letter of Credit Provider shall have received from each of the Lessees and DTAG (A) a copy of the resolutions of its Board of Directors or other governing body, certified as of the Series 2005-1 Closing Date by the secretary or assistant secretary thereof, authorizing the execution, delivery and performance of this Agreement and the other Related Documents (and the procurement of the Series 2005-1 Letter of Credit) and (B) an incumbency certificate thereof with respect to its officers, agents or other representatives authorized to execute this Agreement and the Related Documents to which it is a party.

 

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(vii) The Series 2005-1 Letter of Credit Provider shall be reasonably satisfied with the final terms and conditions of the transactions contemplated hereby, including, without limitation, all legal and tax aspects thereof, and all documentation relating to the transactions shall be in form and substance reasonably satisfactory to the Series 2005-1 Letter of Credit Provider.

(viii) On the date of issuance of the Series 2005-1 Letter of Credit, immediately prior to, and after giving effect to, the issuance of the Series 2005-1 Letter of Credit, except as disclosed in Item 7.7 of the Disclosure Schedule (as defined in the Credit Agreement) there shall be no action, suit, investigation, litigation or proceeding pending against or, to the knowledge of DTAG or any Lessee, threatened against or affecting any of DTAG or any Lessee, before any court or arbitrator or any governmental body, agency or official that (A) would be reasonably likely to have resulted in a material adverse change in the business, operations, property, assets, liabilities, condition (financial or otherwise), or prospects of DTAG and the Lessees, taken as a whole, since December 31, 2004 or (B) which in any manner draws into question the legality, validity or enforceability of this Agreement or any Related Document, the consummation of the transactions contemplated hereby, or the ability of DTAG or any Lessee to comply with any of the respective terms thereunder.

(ix) All governmental and third party consents and approvals necessary in connection with this Agreement and the Series 2005-1 Letter of Credit or the transactions contemplated hereby or thereby shall have been obtained (without the imposition of any conditions that are not, in its reasonable judgment, acceptable to the Series 2005-1 Letter of Credit Provider) and shall remain in effect; all applicable waiting periods shall have expired without any action being taken by any competent authority; and no law or regulation shall be applicable that restrains, prevents or imposes materially adverse conditions upon this Agreement or the Series 2005-1 Letter of Credit or the transactions contemplated hereby or thereby.

(x) The Series 2005-1 Letter of Credit Provider shall have received such other documents (including, without limitation, an executed copy (or duplicate thereof) of each other Related Document) certificates, instruments, approvals or opinions as the Series 2005-1 Letter of Credit Provider may reasonably request.

(xi) The following shall be true and correct (and the Series 2005-1 Letter of Credit Provider shall have received a certificate of each of the Lessees and RCFC as to the following):

(A) Each Eligible Vehicle Disposition Program shall be in full force and effect and enforceable against the related Manufacturer.

(B) Each of the Lessees and RCFC shall not have sold, assigned, or otherwise encumbered any of the Vehicles purchased or otherwise financed with the proceeds of the Series 2005-1 Notes except as permitted under the Related Documents.

 

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(C) RCFC and the Lessees shall each have assigned to the Master Collateral Agent a first priority security interest in its rights under the Eligible Vehicle Disposition Programs and amounts receivable from the Manufacturers pursuant to the Eligible Vehicle Disposition Programs.

(xii) RCFC and the Lessees shall each have granted to the Master Collateral Agent, for the benefit of the Trustee on behalf of the Series 2005-1 Noteholders and the Series 2005-1 Insurer, a first priority security interest in all Vehicles now or hereafter purchased or otherwise financed with the proceeds of the Series 2005-1 Notes in accordance with the terms of the Series 2005-1 Supplement.

(xiii) The Series 2005-1 Letter of Credit Provider shall have consented to the composition of the Board of Directors of RCFC (including each of the Independent Directors), which consent shall not be unreasonably withheld.

(xiv) The Series 2005-1 Letter of Credit Provider shall have received any fees and expenses due and payable pursuant to Section 4.2 or pursuant to the Credit Agreement, including, without limitation, pursuant to Section 3.3 and 4.3 thereof, and all reasonable legal fees and expenses.

(b) The following constitute conditions precedent to the obligation of the Series 2005-1 Letter of Credit Provider to extend the Series 2005-1 Letter of Credit Expiration Date or increase the Series 2005-1 Letter of Credit Commitment ( provided that such conditions will be deemed to be satisfied upon such extension or increase with respect to the Series 2005-1 Letter of Credit):

(i) On the date of extension or increase, each condition precedent to the issuance of the Series 2005-1 Letter of Credit set forth in Section 6.2 of the Credit Agreement shall continue to be satisfied (which conditions are hereby incorporated herein by this reference).

(ii) On the date of extension or increase with respect to the Series 2005-1 Letter of Credit, all representations and warranties of each of the Lessees and DTAG contained in this Agreement and in each other Related Document to which any of the Lessees or DTAG is a party shall be true and correct immediately prior to, and after giving effect to, the extension or increase with respect to the Series 2005-1 Letter of Credit.

(iii) On the date of extension or increase with respect to the Series 2005-1 Letter of Credit, and after giving effect to the transactions contemplated by this Agreement and the Series 2005-1 Letter of Credit, there shall exist no Potential Event of Default or Event of Default under this Agreement.

(iv) The Series 2005-1 Letter of Credit Provider shall have received as of the date of such increase or extension of the Series 2005-1 Letter of Credit a copy of the confirmation letter from each of S&P, Moody’s and Fitch to the effect that the Series 2005-1 Notes shall have been given a rating of at least “AAA” by S&P, “Aaa” by Moody’s and “AAA” by Fitch which ratings shall be in full force and effect.

 

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(v) On the date of extension or increase with respect to the Series 2005-1 Letter of Credit, immediately prior to, and after giving effect to, the extension or increase with respect to the Series 2005-1 Letter of Credit, except as disclosed in Item 7.7 of the Disclosure Schedule (as defined in the Credit Agreement), there shall be no action, suit, investigation, litigation or proceeding pending against or, to the knowledge of DTAG or any Lessee, threatened against or affecting any of DTAG or any Lessee, before any court or arbitrator or any governmental body, agency or official that (A) would be reasonably likely to have resulted in a material adverse change in the business, operations, property, assets, liabilities, condition (financial or otherwise), or prospects of DTAG and the Lessees, taken as a whole, since December 31, 2004, or (B) which in any manner draws into question the legality, validity or enforceability of this Agreement or any Related Document, the consummation of the transactions contemplated hereby, or the ability of DTAG or any Lessee to comply with any of the respective terms thereunder.

(vi) All governmental and third-party consents and approvals necessary in connection with this Agreement and the Series 2005-1 Letter of Credit or the transactions contemplated hereby or thereby shall continue to be in effect (without the imposition of any conditions that are not, in its reasonable judgment, acceptable to the Series 2005-1 Credit Provider); and no law or regulation shall be applicable that restrains, prevents or imposes materially adverse conditions upon this Agreement or the Series 2005-1 Letter of Credit or the transactions contemplated hereby or thereby.

(vii) The Series 2005-1 Letter of Credit Provider shall have received such other documents (including, without limitation, an executed copy (or duplicate thereof) of each other Related Document) certificates, instruments, approvals or opinions as the Series 2005-1 Letter of Credit Provider may reasonably request.

(viii) The following shall be true and correct (and the Series 2005-1 Letter of Credit Provider shall have received a certificate of each of the Lessees and RCFC as to the following):

(A) Each Eligible Vehicle Disposition Program shall be in full force and effect, enforceable against the related Manufacturer.

(B) Each of the Lessees and RCFC shall not have sold, assigned, or otherwise encumbered any of the Vehicles purchased or otherwise financed with the proceeds of the Series 2005-1 Notes except as permitted under the Related Documents.

(C) The Master Collateral Agent shall continue to have a first priority security interest in the rights of RCFC and the Lessees under the Eligible Vehicle Disposition Programs and amounts receivable from the Manufacturers pursuant to the Eligible Vehicle Disposition Programs.

(ix) The Master Collateral Agent, for the benefit of the Series 2005-1 Noteholders and the Series 2005-1 Insurer, shall continue to have a first priority security interest (as granted by RCFC and the Lessees) in all Vehicles now or hereafter purchased or otherwise financed with the proceeds of the Series 2005-1 Notes in accordance with the terms of the Series 2005-1 Supplement.

 

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(x) The Series 2005-1 Letter of Credit Provider shall continue to consent to the composition of the Board of Directors of RCFC (including the Independent Directors), which consent shall not be unreasonably withheld.

(xi) The Series 2005-1 Letter of Credit Provider shall have received any fees and expenses due and payable pursuant to Section 4.2 or pursuant to the Credit Agreement including, without limitation, pursuant to Section 3.3 and 4.3 thereof, and all reasonable legal fees and expenses.

Section 2.8 Certain Eurocurrency Rate and Other Provisions under the Credit Agreement . This Agreement hereby incorporates by reference as though fully set forth herein all provisions of the Credit Agreement set forth under Sections 5.1 through 5.10 thereof, including, without limitation, as if the LOC Disbursements referred to herein were Loans (as defined in the Credit Agreement) under the Credit Agreement.

Section 2.9 Obligation Absolute . The payment obligations of each of DTAG and each Lessee under this Agreement and any other agreement or instrument relating to the Series 2005-1 Letter of Credit to reimburse the Series 2005-1 Letter of Credit Provider with respect to each LOC Disbursement shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement and such other agreement or instrument under all circumstances, including, without limitation, the following circumstances:

(a) any lack of validity or enforceability of this Agreement, the Series 2005-1 Letter of Credit or any other Related Document;

(b) any change in the time, manner or place of payment of, or in any other terms of, all or any of the obligations of either of DTAG or any Lessee in respect of the Series 2005-1 Letter of Credit or any other amendment or waiver of or any consent to departure from all or any of the Related Documents;

(c) the existence of any claim, set-off, defense or other right which either of DTAG or any Lessee may have at any time against the Trustee or any other beneficiary or any transferee of the Series 2005-1 Letter of Credit (or any persons or entities for whom the Trustee, any such beneficiary or any such transferee may be acting), or any other person or entity, whether in connection with this Agreement, the transactions contemplated hereby or by the Related Documents or any unrelated transaction;

(d) any statement or any other document presented under the Series 2005-1 Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect;

(e) any statement or any other document presented under the Series 2005-1 Letter of Credit proving to be insufficient in any respect;

 

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(f) payment by the Series 2005-1 Letter of Credit Provider under the Series 2005-1 Letter of Credit against presentation of a draft or certificate which does not comply with the terms of the Series 2005-1 Letter of Credit;

(g) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the obligations of each of DTAG and each Lessee in respect of the Series 2005-1 Letter of Credit; or

(h) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including, without limitation, any other circumstance that might otherwise constitute a defense available to, or a discharge of, DTAG, any Lessee or a guarantor.

Section 2.10 Events of Default . Upon the occurrence and continuance of any of the following events (herein referred to as an “ Event of Default ”):

(a) any Lessee (or DTAG on behalf of such Lessee) shall fail to pay any LOC Credit Disbursement owing by such Lessee or any amounts owing by such Lessee for LOC Termination Disbursements on the date when such amount is due;

(b) any Lessee (or DTAG on behalf of any such Lessee) shall fail to pay any interest, fees or other amounts payable under this Agreement or the Credit Agreement, in each case within three Business Days of the date when such interest, fees or other amounts are due;

(c) any representation, warranty, certification or statement made by any Lessee, RCFC or DTAG in this Agreement or in any other Related Document to which it is a party, or any certificate, financial statement or other document delivered pursuant hereto or thereto shall have been incorrect in any material respect when made or deemed made and after the expiration of any grace period applicable thereto;

(d) RCFC shall fail to make any payment in respect of any Indebtedness when due or within any applicable grace period, which Indebtedness is in an outstanding principal amount in excess of $100,000;

(e) an Event of Bankruptcy shall have occurred with respect to RCFC;

(f) any judgment or order for the payment of money in excess of $100,000 (to the extent not covered by insurance provided by a carrier that has not disputed coverage) shall be rendered against RCFC and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 20 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect;

(g) an Event of Default (as defined in the Credit Agreement) shall have occurred and be continuing;

 

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(h) DTAG shall default in the performance or observance of any agreement or covenant contained in clause (i) of Section 2.12 or clause (b) of Section 3.2 ;

(i) any Lessee or DTAG shall default in the performance or observance of any other agreement or covenant contained in this Agreement not specifically referred to elsewhere in this Section 2.10 , and such default shall not be cured to the Series 2005-1 Letter of Credit Provider’s reasonable satisfaction within a period of 30 days from the date on which the Series 2005-1 Letter of Credit Provider has given written notice thereof to such Lessee or DTAG;

(j) any Lessee or DTAG shall default in the performance or observance of any agreement or covenant contained in any Related Document (other than this Agreement, the Master Lease or as otherwise provided in this Section 2.