Document:

Exhibit 10.11

 

ROSS H. BIERKAN

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made this 27th day of April, 2011, by RLJ Lodging Trust, a Maryland real estate investment trust (the “Company”) and RLJ Lodging Trust, L.P., (the “Operating Partnership”) a Delaware limited partnership, each with its principal place of business at 3 Bethesda Metro Center, Suite 1000, Bethesda, MD 20814, and Ross H. Bierkan, residing at  the address on file with the Company (the “Executive”).

 

WHEREAS, the Company is the sole general partner of the Operating Partnership; and

 

WHEREAS, the parties desire to enter into this Agreement to reflect the Executive’s executive capacities in the Company’s business and to provide for the Company’s and Operating Partnership’s employment of the Executive;

 

WHEREAS, the parties wish to set forth the terms and conditions of that employment;

 

WHEREAS, the allocation of the rights and obligations between the Company and the Operating Partnership shall be determined by separate agreement of those parties; and

 

WHEREAS, for purposes of this Agreement, the term “Company” shall be understood to include the Operating Partnership, unless the context otherwise requires.

 

NOW THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties agree as follows:

 

1.                                      Term of Employment

 

(a)                                  The Company hereby employs the Executive, and the Executive hereby accepts employment with the Company, upon the terms and conditions set forth in this Agreement.  Unless terminated earlier pursuant to Section 5, the Executive’s employment pursuant to this Agreement shall be for a term (the “Employment Period”) commencing on the date of the closing of the Company’s initial public offering of its common shares of beneficial interest (the “Commencement Date”) and ending on the fourth anniversary of the Commencement Date (the “Initial Term”).  If not previously terminated in accordance with this Agreement, the Employment Period shall be extended for one additional twelve (12) month period immediately following the Initial Term (such extension, the “Renewal Term”),  unless the Company or the Executive provides written notice to the contrary at least sixty (60) days before the last day of the Initial Term.

 

(b)                                 If the parties have failed to extend this Agreement or enter into a new agreement on or before the end of the Renewal Term, the Executive’s employment shall terminate at the end of the Renewal Term and the Company’s only obligation to Executive upon such termination will be to accelerate the vesting in any unvested portion of any equity awards granted prior to the

 

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end of the Renewal Term and to pay the amounts set forth in Section 6(a).  Notwithstanding the foregoing or anything else contained in this Agreement to the contrary, if Executive is employed on the last day of the Renewal Term, the Board shall determine the amount of any annual bonus to award Executive for the fiscal year in which the end of the Renewal Term occurs, based on the criteria set forth in Section 4(b) and pro-rated for the portion of the fiscal year Executive remains employed.  The Company shall pay any such bonus on the date on which the Company’s other employees receive bonuses, regardless of whether Executive is employed by the Company on that date.

 

(c)                                  In the event that the Board of Trustees of the Company (the “Board of Trustees”) determines that active efforts to complete the closing of the initial public offering have been abandoned, this Agreement shall become null and void.

 

2.                                      Title; Duties

 

The Executive shall be employed as Chief Investment Officer and Executive Vice President.  The Executive shall report to the President and Chief Executive Officer, who shall have the authority to direct, control and supervise the activities of the Executive.  The Executive shall perform such services consistent with his position as may be assigned to him from time to time by the Board of Trustees and are consistent with the bylaws of the Company and the Amended and Restated Agreement of Limited Partnership  of the Operating Partnership as it may be further amended from time to time, including, but not limited to, managing the affairs of the Company and Operating Partnership.

 

3.                                      Extent of Services

 

The Executive agrees not to engage in any business activities during the Employment Period except those which are for the sole benefit of the Company and its subsidiaries, and to devote his entire business time, attention, skill and effort to the performance of his duties under this Agreement.  Notwithstanding the foregoing, the Executive may, without impairing or otherwise adversely affecting the Executive’s performance of his duties to the Company, (i) engage in personal investments and charitable, professional and civic activities, and (ii) with the prior approval of the Board of Trustees, serve on the boards of directors of corporations other than the Company, provided, however, that no such approval shall be necessary for the Executive’s continued service on any board of directors or board of trustees on which he was serving on the date of this Agreement, all of which have been previously disclosed to the Board of Trustees in writing.  The Executive shall perform his duties to the best of his ability, shall adhere to the Company’s published policies and procedures, and shall use his best efforts to promote the Company’s interests, reputation, business and welfare.

 

4.                                      Compensation and Benefits

 

(a)                                  Salary.  The Company shall pay the Executive a gross base annual salary (“Base Salary”) of $420,000.  The Base Salary shall be payable in arrears in approximately equal semi-monthly installments (except that the first and last such semi-monthly installments may be prorated if necessary) on the Company’s

 

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regularly scheduled payroll dates, minus such deductions as may be required by law or reasonably requested by the Executive.  The Company’s Compensation Committee (the “Compensation Committee”) shall review his Base Salary annually in conjunction with its regular review of employee salaries and may increase (but not decrease) Executive’s Base Salary as in effect from time to time as the Compensation Committee shall deem appropriate.

 

(b)                                 Annual Bonus. Executive shall be entitled to earn bonuses with respect to each fiscal year (or partial fiscal year), based upon Executive’s and the Company’s achievement of performance objectives set by the Company within the first three (3) months of each fiscal year of the Employment Period, with a target bonus of 125% of Executive’s Base Salary for such fiscal year (or partial fiscal year).  Any such bonus earned by the Executive shall be paid annually by March 15 of the year following the end of the year for which the bonus was earned.

 

(c)                                  Option, Restricted Share, Restricted Share Unit and LTIP Unit Grants.  The Executive will be eligible for grants of options to purchase the Company’s common shares of beneficial interest (“common shares”), grants of Company restricted common shares, restricted common share units and long-term incentive units in the Operating Partnership subject to certain time vesting requirements and other conditions set forth in the applicable award agreement.

 

(d)                                 Other Benefits.  The Executive shall be entitled to paid time off and holiday pay in accordance with the Company’s policies in effect from time to time and shall be eligible to participate in such life, health, and disability insurance, pension, deferred compensation and incentive plans, options and awards, performance bonuses and other benefits as the Company extends, as a matter of policy, to its executive employees.

 

(e)                                  Reimbursement of Business Expenses.  The Company shall reimburse the Executive for all reasonable travel, entertainment and other expenses incurred or paid by the Executive in connection with, or related to, the performance of his duties, responsibilities or services under this Agreement, upon presentation by the Executive of documentation, expense statements, vouchers, and/or such other supporting information as the Company may reasonably request.

 

(f)                                Timing of Reimbursements.  Any reimbursement under this Agreement that is taxable to the Executive shall be made in no event later than sixty (60) days following the calendar year in which the Executive incurred the expense.

 

5.                                      Termination

 

(a)                                  Termination by the Company for Cause.  The Company may terminate the Executive’s employment under this Agreement at any time for Cause, upon written notice by the Company to the Executive.  For purposes of this Agreement, “Cause” for termination shall mean any of the following: (i) gross negligence or

 

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willful misconduct in connection with the performance of duties; (ii) conviction of a felony; (iii) conviction of any other criminal offense involving an act of dishonesty intended to result in substantial personal enrichment of the Executive at the expense of the Company or its subsidiaries; or (iv) material breach of any term of any employment, consulting or other services, confidentiality, intellectual property or non-competition agreements, if any, between the Executive and the Company, which, if such breach is curable, such breach is not cured within fifteen (15) calendar days following the Executive’s receipt of written notice of such breach, with such detail as sufficient to apprise Executive of the nature and extent of such breach.

 

(b)                                 Termination by the Company Without Cause or by the Executive Without Good Reason.  A party may terminate this Agreement at any time without Cause (in the case of the Company) or without Good Reason (as defined below, in the case of the Executive), upon giving the other party thirty (30) days’ written notice.  At the Company’s sole discretion, it may substitute thirty (30) days’ Base Salary (or any lesser portion for any shortened period provided) in lieu of notice.  Any Base Salary paid to the Executive in lieu of notice shall not be offset against any entitlement the Executive may have to the Severance Payment pursuant to Section 6(c).  For purposes of this Agreement, in the event the Company elects not to extend the Employment Period in accordance with Section 1(a) hereof, Executive’s employment shall terminate on the last day of the Initial Term and such election shall be deemed a termination by the Company without Cause.

 

(c)                                  Termination by Executive for Good Reason.  The Executive may terminate his employment under this Agreement at any time for Good Reason, upon written notice by the Executive to the Company.  For purposes of this Agreement, “Good Reason” for termination shall mean, without the Executive’s consent: (i) the assignment to the Executive of substantial duties or responsibilities inconsistent with the Executive’s position at the Company, or any other action by the Company which results in a substantial diminution of the Executive’s duties or responsibilities other than any such reduction which is remedied by the Company within thirty (30) days of receipt of written notice thereof from the Executive; (ii) a requirement that the Executive work principally from a location that is thirty (30) miles further from the Executive’s residence than the Company’s address first written above; (iii) a material reduction in the Executive’s aggregate Base Salary and other compensation (including the target bonus amount and retirement plans, welfare plans and fringe benefits) taken as a whole, excluding any reductions caused by the failure to achieve performance targets; or (iv) any material breach by the Company of this Agreement.  Good Reason shall not exist pursuant to any subsection of this Section 5(c) unless (A) the Executive shall have delivered notice to the Board of Trustees within ninety (90) days of the occurrence of such event constituting Good Reason, and (B) the Board fails to remedy the circumstances giving rise to the Executive’s notice within thirty (30) days of receipt of notice.  The Executive must terminate his employment under this Section 5(c) at a time agreed reasonably with the Company, but in any event

 

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within one hundred fifty (150) days  from the occurrence of an event constituting Good Reason.  For purposes of Good Reason, the Company shall be defined to include any successor to the Company which has assumed the obligations of the Company through merger, acquisition, stock purchase, asset purchase or otherwise.

 

(d)                                 Executive’s Death or Disability.  The Executive’s employment shall terminate immediately upon his death or, upon written notice as set forth below, his Disability.  As used in this Agreement, “Disability” shall mean such physical or mental impairment as would render the Executive unable to perform each of the essential duties of the Executive’s position by reason of a medically determinable physical or mental impairment which is potentially permanent in character or which can be expected to last for a continuous period of not less than twelve (12) months.  If the Employment Period is terminated by reason of the Executive’s Disability, either party shall give thirty (30) days’ advance written notice to that effect to the other.

 

(e)                                  Executive’s Retirement.  The Executive’s employment shall terminate upon his Retirement.  As used in this Agreement, “Retirement” shall mean the point in which the Executive has reached the age of sixty-five (65) and has decided to exit the workforce completely.  If the Employment Period is terminated by reason of the Executive’s Retirement, the Executive shall give one hundred eighty (180) days’ advance notice to the effect to the Company.

 

6.                                      Effect of Termination

 

(a)                                  General.  Regardless of the reason for any termination of this Agreement and subject to this Section 6, the Executive (or the Executive’s estate if the Employment Period ends on account of the Executive’s death) shall be entitled to (i) payment of any unpaid portion of his Base Salary through the effective date of termination; (ii) reimbursement for any outstanding reasonable business expense he has incurred in performing his duties hereunder in accordance with Company policy; (iii) continued insurance benefits to the extent required by law; and (iv) payment of any vested but unpaid rights as may be required independent of this Agreement by the terms of any bonus or other incentive pay or equity plan, or any other employee benefit plan or program of the Company.  Upon termination of this Agreement for any reason, the Executive shall resign from all boards and committees of the Company, its affiliates and its subsidiaries.

 

(b)                                 Termination by the Company for Cause or by Executive Without Good Reason.  If the Company terminates the Executive’s employment for Cause or the Executive terminates his employment without Good Reason, the Executive shall have no rights or claims against the Company except to receive the payments and benefits described in Section 6(a).

 

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(c)                                  Termination by the Company Without Cause or by the Executive with Good Reason.  If the Company terminates the Executive’s employment without Cause pursuant to Section 5(b), or the Executive terminates employment with Good Reason pursuant to Section 5(c), the Executive shall be entitled to receive, in addition to the items referenced in Section 6(a), the following:

 

(i)                                     a pro rata bonus for the year of termination but, in connection with a termination other than a termination at or after a “Change of Control” (as defined in the RLJ Lodging Trust 2011 Equity Incentive Plan), only to the extent performance goals for the calendar year of termination are achieved, payable at the same time bonuses are paid for such year but in no event later than March 15 of the fiscal year following his termination;

 

(ii)                                  continued payment of his Base Salary, at the rate in effect on his last day of employment (but in no event in an annual amount less than as set forth in Section 4(a)), for a period of thirty six (36) months; provided, that if such termination is due to non-extension of the Initial Term of the Agreement by the Company, the period of continued payment of Base Salary shall be a period of twenty four (24) months.  Such amount shall be paid in approximately equal installments on the Company’s regularly scheduled payroll dates, subject to all legally required payroll deductions and withholdings for sums owed by the Executive to the Company;

 

(iii)                               continued payment by the Company for the Executive’s life and health insurance coverage for twenty four (24) months to the same extent that the Company paid for such coverage immediately prior to the termination of the Executive’s employment and subject to the eligibility requirements and other terms and conditions of such insurance coverage.  Notwithstanding the foregoing, (A) if any plan pursuant to which the Company is providing such coverage is not, or ceases prior to the expiration of the period of continuation coverage to be, exempt from the application of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) (“Section 409A”) under Treasury Regulation Section 1.409A-1(a)(5), or (B) the Company is otherwise unable to continue to cover the Executive under its group health plans, then, in either case, an amount equal to the monthly plan premium payment shall thereafter be paid to the Executive as currently taxable compensation in substantially equal monthly installments over the twenty-four (24) month period (or the remaining portion thereof);

 

(iv)                              payments equal to three (3) times the Executive’s target annual bonus for the year of termination and three (3) time the highest grant date fair value of annual  equity awards made to the Executive during any of the three (3) preceding calendar years (or if the Executive has not been employed for three (3) prior calendar years, payment equal to three (3) times the greater of the fair value of equity awards for the year of termination or during any preceding calendar year)(the “annual equity award”) provided, that if such

 

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termination is due to non-extension of the Initial Term of the Agreement by the Company, payment shall equal two (2) times the target annual bonus for the year of termination and two (2) times the highest fair value of the  annual equity award made to the Executive during the year of termination and any of the three (3) preceding calendar years or such shorter period during which the Executive was employed.  An equity award made in connection with the initial public offering of Company common shares of beneficial interest will not be considered to be an annual equity award, provided, however, that until the first annual equity award is made, an amount equal to one-quarter of the equity award made in connection with the initial public offering shall be deemed to be the annual equity award.   The payments provided for in this paragraph (iv) shall be made in three equal installments on the first three anniversaries of the date of the Executive’s termination of employment.

 

(v)                                 vesting as of the last day of his employment in any unvested portion of any equity awards previously granted to the Executive by the Company.

 

None of the benefits described in this Section 6(c) (the “Severance Payment”) will be payable unless the Executive has signed a general release (attached hereto as Exhibit A) within forty-five (45) days of date of termination, which has (and not until it has) become irrevocable, satisfactory to the Company in the reasonable exercise of its discretion, releasing the Company, its affiliates, and its trustees, directors, officers and employees, from any and all claims or potential claims arising from or related to the Executive’s employment or termination of employment. Any payment conditioned on execution of the general release that was not made because the general release was not signed and had not become irrevocable shall be made within ten (10) days after the general release becomes irrevocable, provided that as to payments and benefits which are subject to Section 409A if the end of the forty-five (45) day plus seven (7) day revocation period occurs in a year subsequent to the year in which the termination of employment occurs, the payments will be made in the subsequent year.  Any payments delayed pursuant to this Section 6(c) shall be paid to the Executive in a lump sum, and all remaining payments due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

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(d)                                 Termination In the Event of Death, Disability or Retirement.

 

In the event of a termination of employment due to death, disability or Retirement, the Executive shall be entitled to receive the items referenced in Section 6(a), as well as any performance bonus for that fiscal year and accelerating vesting of equity awards, each as specifically set forth below.

 

(i)                                    If the Executive’s employment terminates because of his death, the unvested portion of any equity awards previously granted to the Executive by the Company shall become fully vested as of the date of his death and the Executive’s estate shall be entitled to receive a pro-rata share of any performance bonus to which he otherwise would have been entitled for the fiscal year in which his death occurs (regardless of whether performance goals for that fiscal year are achieved) payable at the same time bonuses are paid for such year but in no event later than March 15 of the fiscal year following his death.

 

(ii)                                 In the event the Executive’s employment terminates due to his Disability, as of the effective date of the termination notice specified in Section 5(d), the Executive shall vest in any unvested portion of any equity awards previously granted to the Executive by the Company and the Executive shall be entitled to receive a pro-rata share of any performance bonus to which he otherwise would have been entitled for the fiscal year in which his Disability occurs (regardless of whether performance goals for that fiscal year are achieved) payable at the same time bonuses are paid for such year but in no event later than March 15 of the fiscal year following his Disability.

 

(iii)                              In the event the Executive’s employment terminates due to his Retirement, the unvested portion of any equity awards previously granted to the Executive by the Company shall be fully vested as of the date of his termination and the Executive shall be entitled to payment of a pro rata portion of any performance bonus for the fiscal year of Executive’s Retirement only to the extent performance goals for that fiscal year are achieved.   The pro rata performance bonus, if any, shall be paid to the Executive at the same time bonuses are paid for such year but in no event later than March 15 of the fiscal year following his Retirement.

 

7.                                      Confidentiality

 

(a)                                  Definition of Proprietary Information.  The Executive acknowledges that he may be furnished or may otherwise receive or have access to confidential information which relates to the Company’s past, present or future business activities, strategies, services or products, research and development; financial analysis and

 

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data; improvements, inventions, processes, techniques, designs or other technical data; profit margins and other financial information; fee arrangements; compilations for marketing or development; confidential personnel and payroll information; or other information regarding administrative, management, or financial activities of the Company, or of a third party which provided proprietary information to the Company on a confidential basis.  All such information, including in any electronic form, and including any materials or documents containing such information, shall be considered by the Company and the Executive as proprietary and confidential (the “Proprietary Information”).

 

(b)                                 Exclusions.  Notwithstanding the foregoing, Proprietary Information shall not include information in the public domain not as a result of a breach of any duty by the Executive or any other person.

 

(c)                                  Obligations.  The Executive shall maintain the confidentiality of the Proprietary Information and shall not (i) disclose or disseminate the Proprietary Information to any third party, including employees of the Company (or its affiliates) without a legitimate business need to know during the Employment Period; (ii) remove the Proprietary Information from the Company’s premises without a valid business purpose; or (iii) use the Proprietary Information for his own benefit or for the benefit of any third party.

 

(d)                                 Return of Proprietary Information.  The Executive acknowledges and agrees that all the Proprietary Information used or generated during the course of working for the Company is the property of the Company.  The Executive agrees to deliver to the Company all documents and other tangibles containing the Proprietary Information immediately upon termination of his employment.

 

8.                                      Noncompetition

 

(a)                                  Restriction on Competition.  For the period of the Executive’s employment with the Company and for twenty-four (24) months following the expiration or termination of the Executive’s employment by the Company (the “Restricted Period”), the Executive agrees not to engage, directly or indirectly, as a manager, employee, consultant, partner, principal, agent, representative, or in any other individual or representative capacity in any material business that the Company conducts as of the date of the Executive’s termination of employment, including but not limited to investments primarily in premium-branded, focused-service and compact full-service hotels, where material is defined as fifteen percent (15%) of the gross revenues of the Company based on the most recent quarterly earnings.  Executive further agrees that for the period of the Executive’s employment with the Company and for the Restricted Period, the Executive will not engage, directly or indirectly, as an owner, director, trustee, member, stockholder, or in any other corporate capacity in any material business that the Company conducts as of the date of the Executive’s termination of employment.  Notwithstanding the foregoing, the Executive shall not be deemed to have violated this Section 8(a)

 

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solely (i) by reason of his passive ownership of 1% or less of the outstanding stock of any publicly traded corporation or other entity, (ii) by providing legal, accounting or audit services as an employee or partner of a professional services organization or (iii) by providing services to any investment banking or other institution that do not relate to any material business that the Company conducts as of the date of the Executive’s termination of employment.

 

(b)                                 Non-Solicitation of Clients.  During the Restricted Period, the Executive agrees not to solicit, directly or indirectly, on his own behalf or on behalf of any other person(s), any client of the Company to whom the Company had provided services at any time during the Executive’s employment with the Company in any line of business that the Company conducts as of the date of the Executive’s termination of employment or that the Company is actively soliciting, for the purpose of marketing or providing any service competitive with any service then offered by the Company.

 

(c)                                  Non-Solicitation of Employees.  During the Restricted Period, the Executive agrees that he will not, directly or indirectly, hire or attempt to hire or cause any business, other than an affiliate of the Company, to hire any person who is then or was at any time during the preceding six (6) months an employee of the Company and who is at the time of such hire or attempted hire, or was at the date of such employee’s separation from the Company a vice president, senior vice president or executive vice president or other senior executive employee of the Company.

 

(d)                                 Acknowledgement.  The Executive acknowledges that he will acquire much Proprietary Information concerning the past, present and future business of the Company as the result of his employment, as well as access to the relationships between the Company and its clients and employees.  The Executive further acknowledges that the business of the Company is very competitive and that competition by him in that business during his employment, or after his employment terminates, would severely injure the Company.  The Executive understands and agrees that the restrictions contained in this Section 8 are reasonable and are required for the Company’s legitimate protection, and do not unduly limit his ability to earn a livelihood.

 

(e)                                  Rights and Remedies upon Breach.  The Executive acknowledges and agrees that any breach by him of any of the provisions of Sections 7 and 8 (the “Restrictive Covenants”) would result in irreparable injury and damage for which money damages would not provide an adequate remedy.  Therefore, if the Executive breaches, or threatens to commit a breach of, any of the provisions of the Restrictive Covenants, the Company and its affiliates shall have the following rights and remedies, each of which rights and remedies shall be independent of the other and severally enforceable, and all of which rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company and its affiliates under law or in equity (including, without limitation, the recovery of damages):

 

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(i)                                    The right and remedy to have the Restrictive Covenants specifically enforced (without posting bond and without the need to prove damages) by any court of competent jurisdiction, including, without limitation, the right to an entry against the Executive of restraining orders and injunctions (preliminary, mandatory, temporary and permanent) against violations, threatened or actual, and whether or not then continuing, of such covenants; and

 

(ii)                                 The right and remedy to require the Executive to account for and pay over to the Company and its affiliates all compensation, profits, monies, accruals, increments or other benefits (collectively, “Benefits”) derived or received by him as the result of any transactions constituting a breach of the Restrictive Covenants, and the Executive shall account for and pay over such Benefits to the Company and, if applicable, its affected affiliates.

 

(f)                                    Without limiting Section 14(k), if any court or other decision-maker of competent jurisdiction determines that any of the Restrictive Covenants, or any part thereof, is unenforceable because of the duration or geographical scope of such provision, then, after such determination has become final and unappealable, the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form, such provision shall then be enforceable and shall be enforced.

 

9.                                      Executive Representation

 

The Executive represents and warrants to the Company that he is not now under any obligation of a contractual or other nature to any person, business or other entity which is inconsistent or in conflict with this Agreement or which would prevent him from performing his obligations under this Agreement.

 

10.                               Mediation and Arbitration

 

(a)                                  Except as provided in Section 10(b) and 10(c), any disputes between the Company and the Executive in any way concerning the Executive’s employment, the termination of his employment, this Agreement or its enforcement shall be subject to mediation.  If the Company and the Executive cannot agree upon a mediator, each shall select one name from a list of mediators maintained by any bona fide dispute resolution provider or other private mediator; the two selected shall then choose a third person who will serve as the sole mediator. The first mediation session shall occur within forty-five (45) calendar days following the notice of a dispute.  If within sixty (60) days of the first mediation session the claim is not resolved, either party may request that the dispute be settled exclusively by arbitration in the state of Maryland by a single arbitrator, selected in the same manner as the mediator, in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association in effect at the time of submission to arbitration.  Judgment may be entered on the

 

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arbitrators’ award in any court having jurisdiction.  For purposes of entering any judgment upon an award rendered by the arbitrators, any or all of the following courts have jurisdiction:  (i) the United States District Court for the Fourth Circuit, (ii) any of the courts of the State of Maryland, or (iii) any other court having jurisdiction.  Any service of process or notice requirements in any such proceeding shall be satisfied if the rules of such court relating thereto have been substantially satisfied.  The Company and the Executive waive to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to such jurisdiction and any defense of inconvenient forum.  A judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Each party shall bear its or his costs and expenses arising in connection with any arbitration proceeding.

 

(b)                                Notwithstanding the foregoing, the Company, in its sole discretion, may bring an action in any court of competent jurisdiction to seek injunctive relief and such other relief as the Company shall elect to enforce the Restrictive Covenants.  If the courts of any one or more of such jurisdictions hold the Restrictive Covenants wholly unenforceable by reason of breadth of scope or otherwise it is the intention of the Company and the Executive that such determination not bar or in any way affect the Company’s right, or the right of any of its affiliates, to the relief provided in Section 8(e) above in the courts of any other jurisdiction within the geographical scope of such Restrictive Covenants, as to breaches of such Restrictive Covenants in such other respective jurisdictions, such Restrictive Covenants as they relate to each jurisdiction being, for this purpose, severable, diverse and independent covenants, subject, where appropriate, to the doctrine of res judicata.  The parties hereby agree to waive any right to a trial by jury for any and all disputes hereunder (whether or not relating to the Restrictive Covenants).

 

(c)                                 Notwithstanding the foregoing, the Company or the Executive may bring an action in any court of competent jurisdiction to resolve any dispute under or seek the enforcement of Section 6.

 

11.                               Section 409A.

 

To the extent the Executive would be subject to the additional twenty percent (20%) tax imposed on certain deferred compensation arrangements pursuant to Section 409A, as a result of any provision of this Agreement, such provision shall be deemed amended to the minimum extent necessary to avoid application of such tax and preserve to the maximum extent possible the original intent and economic benefit to the Executive and the Company, and the parties shall promptly execute any amendment reasonably necessary to implement this Section 11.

 

(a)                                  For purposes of Section 409A, the Executive’s right to receive installment payments pursuant to this Agreement including, without limitation, each severance payment and health insurance payment shall be treated as a right to receive a series of separate and distinct payments.

 

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(b)                                 The Executive will be deemed to have a date of termination for purposes of determining the timing of any payments or benefits hereunder that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A.

 

(c)                                  Notwithstanding any other provision of this Agreement to the contrary, if at the time of the Executive’s separation from service, (i) the Executive is a specified employee (within the meaning of Section 409A and using the identification methodology selected by the Company from time to time), and (ii) the Company makes a good faith determination that an amount payable on account of such separation from service to the Executive constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six (6) month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A (the “Delay Period”), then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first business day after such six (6) month period (or upon the Executive’s death, if earlier), together with interest for the period of delay, compounded annually, equal to the prime rate (as published in the Wall Street Journal) in effect as of the dates the payments should otherwise have been provided.   To the extent that any benefits to be provided during the Delay Period are considered deferred compensation under Section 409A provided on account of a “separation from service,” and such benefits are not otherwise exempt from Section 409A, the Executive shall pay the cost of such benefit during the Delay Period, and the Company shall reimburse the Executive, to the extent that such costs would otherwise have been paid by the Company or to the extent that such benefits would otherwise have been provided by the Company at no cost to the Executive, the Company’s share of the cost of such benefits upon expiration of the Delay Period, and any remaining benefits shall be reimbursed or provided by the Company in accordance with the procedures specified herein.

 

(d)                                 (A) Any amount that the Executive is entitled to be reimbursed under this Agreement will be reimbursed to the Executive as promptly as practical and in any event not later than the last day of the calendar year after the calendar year in which the expenses are incurred, (B) any right to reimbursement or in kind benefits will not be subject to liquidation or exchange for another benefit, and (C) the amount of the expenses eligible for reimbursement during any taxable year will not affect the amount of expenses eligible for reimbursement in any other taxable year.

 

(e)                                  Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

 

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12.                               Parachute Payment Limitations

 

Notwithstanding any other provision of this Agreement or of any other agreement, contract, or understanding heretofore or hereafter entered into by the Executive and the Company or its affiliates, except an agreement, contract, or understanding hereafter entered into that expressly modifies or excludes application of this Section 12 (the “Other Agreements”), and notwithstanding any formal or informal plan or other arrangement heretofore or hereafter adopted by the Company or any of its affiliates for the direct or indirect compensation of the Executive (including groups or classes of participants or beneficiaries of which the Executive is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Executive (a “Benefit Arrangement”), if the Executive is a “disqualified individual,” as defined in Section 280G(c) of the Code, any right to receive any payment or other benefit under this Agreement shall not become exercisable or vested (i) to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for Executive under the Agreement, all Other Agreements, and all Benefit Arrangements, would cause any payment or benefit to the Executive under this Agreement to be considered a “parachute payment” within the meaning of Section 280G(b)(2) of the Code as then in effect (a “Parachute Payment”) and (ii) if, as a result of receiving a Parachute Payment, the aggregate after-tax amounts received by the Executive from the Company or any of its affiliates under this Agreement, all Other Agreements, and all Benefit Arrangements would be less than the maximum after-tax amount that could be received by Executive without causing any such payment or benefit to be considered a Parachute Payment.  In the event that the receipt of any such right to exercise, vesting, payment, or benefit under this Agreement, in conjunction with all other rights, payments, or benefits to or for the Executive under the Agreement, any Other Agreement or any Benefit Arrangement would cause the Executive to be considered to have received a Parachute Payment under this Agreement that would have the effect of decreasing the after-tax amount received by the Executive as described in clause (ii) of the preceding sentence, then the Executive shall have the right, in the Executive’s sole discretion, to designate those rights, payments, or benefits under this Agreement, any Other Agreements, and any Benefit Arrangements that should be reduced or eliminated so as to avoid having the payment or benefit to the Executive under this Agreement be deemed to be a Parachute Payment; provided, however, that, to the extent any payment or benefit constitutes deferred compensation under Section 409A, in order to comply with Section 409A, the reduction or elimination will be performed in the following order: (A) reduction of cash payments; (B) reduction of COBRA benefits; (C) cancellation of acceleration of vesting on any equity awards for which the exercise price exceeds the then fair market value of the underlying equity; and (D) cancellation of acceleration of vesting of equity awards not covered under (C) above; provided, however that in the event that acceleration of vesting of equity awards is to be cancelled, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of such equity awards, that is, later granted equity awards shall be canceled before earlier granted equity awards.

 

13.                               Clawback Policies

 

The Executive is subject to any recoupment or clawback policies that the Company may implement or maintain at any time regarding incentive-based compensation, which is granted or awarded to Executive on or after the date of this Agreement.  Such policies may include the right

 

14

 

to recover incentive-based compensation (including stock options awarded as compensation) awarded or received during the three-year period preceding the date on which the Company is required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under federal securities laws.  The Executive agrees to amend any awards and agreements entered into on or after the date of this Agreement as the Company may request to reasonably implement to policies.

 

14.                               Miscellaneous

 

(a)                                  Payment of Financial Obligations.             The payment or provision to the Executive by the Company of any remuneration, benefits or other financial obligations pursuant to this Agreement and any indemnification obligations, shall be allocated between the Company and the Operating Partnership by the Compensation Committee based on any reasonable method.

 

(b)                                 Notices.  All notices required or permitted under this Agreement shall be in writing and shall be deemed effective (i) upon personal delivery, (ii) upon deposit with the United States Postal Service, by registered or certified mail, postage prepaid, or (iii) in the case of facsimile transmission or delivery by nationally recognized overnight delivery service, when received, addressed as follows:

 

(c)                                  If to the Company, to:

 

RLJ Lodging Trust

3 Metro Center

Suite 1100

Bethesda, MD 20814

Attention:

Fax: (301)

 

(i)                                     If to the Executive, to:

 

Ross H. Bierkan

Address on file with the Company

 

or to such other address or addresses as either party shall designate to the other in writing from time to time by like notice.

 

(d)                                 Pronouns.  Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa.

 

(e)                                  Entire Agreement.  This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement.

 

15

 

(f)                                    Amendment.  This Agreement may be amended or modified only by a written instrument executed by the Company and the Executive.

 

(g)                                 Governing Law.  This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of Maryland, without regard to its conflicts of laws principles.

 

(h)                                 Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any entity with which or into which the Company may be merged or which may succeed to its assets or business or any entity to which the Company may assign its rights and obligations under this Agreement; provided, however, that the obligations of the Executive are personal and shall not be assigned or delegated by him.

 

(i)                                     Waiver.  No delays or omission by the Company or the Executive in exercising any right under this Agreement shall operate as a waiver of that or any other right.  A waiver or consent by the Company shall not be effective unless consented to by the Operating Partnership and vice versa.  A waiver or consent given by the Company or the Executive on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.

 

(j)                                     Captions.  The captions appearing in this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.

 

(k)                                  Severability.  In case any provision of this Agreement shall be held by a court or arbitrator with jurisdiction over the parties to this Agreement to be invalid, illegal or otherwise unenforceable, such provision shall be restated to reflect as nearly as possible the original intentions of the parties in accordance with applicable law, and the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

 

(l)                                     Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

16

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

 

	
 
    	
RLJ LODGING TRUST
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ THOMAS J.   BALTIMORE, JR.
    
	
 
    	
Name:
    	
Thomas J.   Baltimore, Jr.
    
	
 
    	
Title:
    	
President and   Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
RLJ LODING TRUST,   L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
RLJ Lodging Trust,   its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ THOMAS J.   BALTIMORE, JR.
    
	
 
    	
Name:
    	
Thomas J.   Baltimore, Jr.
    
	
 
    	
Title:
    	
President and   Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ROSS H. BIERKAN
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ ROSS H.   BIERKAN
    

 

 

Exhibit A

 

WAIVER AND RELEASE AGREEMENT

 

THIS WAIVER AND RELEASE AGREEMENT (this “Release”) is entered into as of [                        ] (the “Effective Date”), by Ross H. Bierkan (“Executive”) in consideration of severance pay (the “Severance Payment”) provided to Executive by RLJ Lodging Trust, a Maryland real estate investment trust (the “Company”) and RLJ Lodging Trust, L.P. (together with the Company, the “Company Group”), pursuant to the Employment Agreement by and among the Company Group and Executive (the “Employment Agreement”).

 

1.                                       Waiver and Release.  Subject to the last sentence of the first paragraph of this Section 1, Executive, on his own behalf and on behalf of his heirs, executors, administrators, attorneys and assigns, hereby unconditionally and irrevocably releases, waives and forever discharges the Company Group and each of their affiliates, parents, successors, predecessors, and the subsidiaries, directors, trustees, owners, members, shareholders, officers, agents, and employees of the Company Group and their affiliates, parents, successors, predecessors, and subsidiaries (collectively, all of the foregoing are referred to as the “Employer”), from any and all causes of action, claims and damages, including attorneys’ fees, whether known or unknown, foreseen or unforeseen, presently asserted or otherwise arising through the date of his signing of this Release, concerning his employment or separation from employment.  Subject to the last sentence of the first paragraph of this Section 1, this Release includes, but is not limited to, any payments, benefits or damages arising under any federal law (including, but not limited to, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, Executive Order 11246, the Family and Medical Leave Act, and the Worker Adjustment and Retraining Notification Act, each as amended, and all other employment discrimination laws whatsoever as may be created or amended from time to time); any claim arising under any state or local laws, ordinances or regulations (including, but not limited to, any state or local laws, ordinances or regulations requiring that advance notice be given of certain workforce reductions); and any claim arising under any common law principle or public policy, including, but not limited to, all suits in tort or contract, such as wrongful termination, defamation, emotional distress, invasion of privacy or loss of consortium.  Notwithstanding any other provision of this Release to the contrary, this Release does not encompass, and Executive does not release, waive or discharge, the obligations of the Company Group (a) to make the payments and provide the other benefits contemplated by the Employment Agreement, or (b) under any restricted stock agreement, option agreement or other agreement pertaining to Executive’s equity ownership, or (c) under any indemnification or similar agreement with Executive or indemnification under the Articles of Incorporation, Amended and Restated Agreement of Limited Partnership, Bylaws or other governing instruments of the Company Group.

 

Executive understands that by signing this Release, he is not waiving any claims or administrative charges which cannot be waived by law.  He is waiving, however, any right to monetary recovery or individual relief should any federal, state or local agency

 

 

(including the Equal Employment Opportunity Commission) pursue any claim on his behalf arising out of or related to his employment with and/or separation from employment with the Company Group.

 

Executive further agrees without any reservation whatsoever, never to sue the Employer or become a party to a lawsuit on the basis of any and all claims of any type lawfully and validly released in this Release.

 

2.                                       Acknowledgments.  Executive is signing this Release knowingly and voluntarily.  He acknowledges that:

 

(a)                                  He is hereby advised in writing to consult an attorney before signing this Release;

 

(b)                                 He has relied solely on his own judgment and/or that of his attorney regarding the consideration for and the terms of this Release and is signing this Release knowingly and voluntarily of his own free will;

 

(c)                                  He is not entitled to the Severance Payment unless he agrees to and honors the terms of this Release;

 

(d)                                 He has been given at least twenty-one (21) calendar days to consider this Release, or he expressly waives his right to have at least twenty-one (21)  days to consider this Release;

 

(e)                                  He may revoke this Release within seven (7) calendar days after signing it by submitting a written notice of revocation to the Employer.  He further understands that this Release is not effective or enforceable until after the seven (7) day period of revocation has expired without revocation, and that if he revokes this Release within the seven (7) day revocation period, he will not receive the Severance Payment;

 

(f)                                    He has read and understands the Release and further understands that, subject to the limitations contained herein, it includes a general release of any and all known and unknown, foreseen or unforeseen claims presently asserted or otherwise arising through the date of his signing of this Release that he may have against the Employer; and

 

(g)                                 No statements made or conduct by the Employer has in any way coerced or unduly influenced him to execute this Release.

 

 

3.                                       No Admission of Liability.  This Release does not constitute an admission of liability or wrongdoing on the part of the Employer, the Employer does not admit there has been any wrongdoing whatsoever against the Executive, and the Employer expressly denies that any wrongdoing has occurred.

 

4.                                       Entire Agreement.  There are no other agreements of any nature between the Employer and Executive with respect to the matters discussed in this Release, except as expressly stated herein, and in signing this Release, Executive is not relying on any agreements or representations, except those expressly contained in this Release.

 

5.                                       Execution.  It is not necessary that the Employer sign this Release following Executive’s full and complete execution of it for it to become fully effective and enforceable.

 

6.                                       Severability.  If any provision of this Release is found, held or deemed by a court of competent jurisdiction to be void, unlawful or unenforceable under any applicable statute or controlling law, the remainder of this Release shall continue in full force and effect.

 

7.                                       Governing Law.  This Release shall be governed by the laws of the State of Maryland, excluding the choice of law rules thereof.

 

8.                                       Headings.  Section and subsection headings contained in this Release are inserted for the convenience of reference only.  Section and subsection headings shall not be deemed to be a part of this Release for any purpose, and they shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof.

 

IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day and year first herein above written.

 

	
 
    	
EXECUTIVE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ROSS H. BIERKANexhibit4233.htm

EXHIBIT 4.233

 

 

 

 

ENHANCEMENT LETTER OF CREDIT

APPLICATION AND AGREEMENT,

 

dated as of March 15, 2011,

 

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

 

DEUTSCHE BANK TRUST COMPANY AMERICAS,

 

as the Series 2010-3 Letter of Credit Provider

 

 

 

 

  

  

 

  

Table of Contents

Page

 

	 	
ARTICLE I Definitions

	 2

 

	 	
Section 1.1 Definitions

	 2

 

	 	

ARTICLE II Issuance of Series 2010-3 Letter of Credit; Reimbursement Obligation

	 3

 

	 	

Section 2.1 Issuance of Series 2010-3 Letter of Credit; Substitute Series 2010-3 Letter of Credit; Extensions of the Series 2010-3 Letter of Credit

	 3
	 	
Section 2.2 [Reserved]

	 7
	 	
Section 2.3 Reimbursement

	 7
	 	
Section 2.4 Series 2010-3 Letter of Credit Fees and Expenses

	 9
	 	
Section 2.5 No Liability of Series 2010-3 Letter of Credit Provider

	 9
	 	
Section 2.6 Surrender of Series 2010-3 Letter of Credit

	 9
	 	
Section 2.7 Conditions Precedent to Issuance, Increase or Extension

	 10
	 	
Section 2.8 Certain Eurocurrency Rate and Other Provisions under the Credit Agreement

	 14
	 	
Section 2.9 Obligation Absolute

	 14
	 	
Section 2.10 Events of Default

	 15
	 	
Section 2.11 Grant of Security Interest

	 17
	 	
Section 2.12 Guarantee

	 17

 

	 	

ARTICLE III Representations, Warranties and Covenants

	 17

 

	 	

Section 3.1 Representations and Warranties of the Lessees and DTAG

	 17
	 	
Section 3.2 Affirmative Covenants of the Lessees and DTAG

	 18
	 	
Section 3.3 Negative Covenants of the Lessees and DTAG

	 20

 

	 	

ARTICLE IV Miscellaneous

	 20

 

	 	

Section 4.1 Payments

	 20
	 	
Section 4.2 Expenses

	 21
	 	
Section 4.3 Indemnity

	 21
	 	
Section 4.4 Notices

	 22
	 	
Section 4.5 Amendments; Governing Law; Consent to Jurisdiction; Waiver of Jury Trial

	 23
	 	
Section 4.6 Waivers, etc.

	 24
	 	
Section 4.7 Severability

	 24
	 	
Section 4.8 Term

	 24
	 	
Section 4.9 Successors and Assigns

	 24
	 	
Section 4.10 Counterparts

	 25
	 	
Section 4.11 Further Assurances

	 25
	 	
Section 4.12 Survival of Representations and Warranties

	 25
	 	
Section 4.13 Obligation

	 25
	 	
Section 4.14 Headings

	 26

 

  

(i)

  

Table of Contents

(continued)

Page

 

	 	
Section 4.15 Confidentiality

	 26
	 	
Section 4.16 Additional Series 2010-3 Letter of Credit Providers

	 26
	 	
Section 4.17 Additional Subsidiary Lessees

	 26
	 	
Section 4.18 Enhancement Letter of Credit Application and Agreement

	 27
	 	
Section 4.19 Series 2010-3 Letter of Credit Provider as Enhancement Provider and Third-Party Beneficiary

	 27
	 	
Section 4.20 No Recourse; No Petition

	 27

 

EXHIBITS

 

	Exhibit A 	
--

	
Form of Series 2010-3 Letter of Credit

	
Exhibit B

	 -- 	
Form of Affiliate Joinder in Enhancement Letter of Credit Application and Agreement

	
Exhibit C

	 -- 	
Form of Notice Requesting Reduction in Series 2010-3 Letter of Credit Amount

 

 

  

(ii)

  

 

THIS ENHANCEMENT LETTER OF CREDIT APPLICATION AND AGREEMENT, dated as of March 15, 2011 (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., 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 DEUTSCHE BANK TRUST COMPANY AMERICAS, as the Series 2010-3 Letter of Credit Provider (“DBTCA” or the “Series 2010-3 Letter of Credit Provider”).

 

RECITALS

 

1.           DTAG, as the Borrower, the financial institutions signatory thereto as the lenders with revolving credit facility commitments or outstandings in respect thereof (each a “Revolving Lender” and, collectively, the “Revolving Lenders”), certain other financial institutions with term loan commitments or outstandings in respect thereof (each a “Term Lender” and, collectively, the “Term Lenders”) and DBTCA, in its capacity as administrative agent thereunder (in such capacity, the “Administrative Agent”), have entered into a Credit Agreement, dated as of June 15, 2007 (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 2010-3 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, DBTCA, as Master Collateral Agent, and certain additional parties thereto have entered into a Second Amended and Restated Master Collateral Agency Agreement, dated as of February 14, 2007 (together with all amendments, supplements, amendments and restatements and other modifications from from time to time thereafter made thereto, the “Master Collateral Agency Agreement”) 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).

 

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 (Group VII), dated as of October 28, 2010 (as the same may be 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.           RCFC, as issuer (in such capacity, the “Issuer”), and DBTCA, as trustee (in such capacity, the “Trustee”), have entered into the Series 2010-3 Supplement, dated as October 28, 2010 (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 2010-3 Supplement”), to the Amended and Restated Base Indenture, dated as of February 14, 2007 (as the same may be 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 2010-3 Supplement and the other Supplements thereto, the “Indenture”), between RCFC and the Trustee, pursuant to which RCFC has issued the Rental Car Asset Backed Notes, Series 2010-3:  (the “Notes” or the “Series 2010-3 Notes”).

 

5.           Contemporaneously with the execution and delivery of this Agreement, DBTCA, in its capacity as the Series 2010-3 Letter of Credit Provider, is issuing the Series 2010-3 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 2010-3 Supplement.

 

6.           The Lessees, RCFC, DTAG and DBTCA, in its capacity as the Series 2010-3 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 2010-3 Letter of Credit Provider as a draw upon the Series 2010-3 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:

 

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 2010-3 Supplement 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 2010-3 Supplement shall apply herein.

 

  

-2-

  

 

ARTICLE II

 

Issuance of Series 2010-3 Letter of Credit; Reimbursement Obligation

 

Section 2.1  Issuance of Series 2010-3 Letter of Credit; Substitute Series 2010-3 Letter of Credit; Extensions of the Series 2010-3 Letter of Credit.  (a)  The Series 2010-3 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 2010-3 Supplement (in respect of Credit Demands and Termination Demands (in each case as defined in the Series 2010-3 Letter of Credit)), (ii) as support for a LOC Termination Disbursement under Section 4.16 of the Series 2010-3 Supplement and (iii) as credit support for draws on the Demand Note under Section 4.15 of the Series 2010-3 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 $[___] (the “Series 2010-3 Letter of Credit Commitment”), for a term expiring on June 10, 2013 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 2010-3 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 2010-3 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 2010-3 Letter of Credit”).  In furtherance of, and not in limitation of, the terms of the preceding sentence relating to amendments to the Series 2010-3 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 2010-3 Letter of Credit Amount (as defined in the Series 2010-3 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 2010-3 Letter of Credit Provider a Notice of Reduction of Series 2010-3 Letter of Credit Amount substantially in the form of Annex D to the Series 2010-3 Letter of Credit, which, upon the Series 2010-3 Letter of Credit Provider’s written acknowledgment and agreement, shall effect a reduction in the Series 2010-3 Letter of Credit Amount as provided in such Notice (and shall automatically effect a reduction of the Series 2010-3 Letter of Credit Amount hereunder).  Upon the Series 2010-3 Letter of Credit Provider’s written acknowledgment and agreement with each such Notice of Reduction of Series 2010-3 Letter of Credit Amount, the Series 2010-3 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 2010-3 Letter of Credit Amount (substantially in the form of Annex E to the Series 2010-3 Letter of Credit), the Trustee will provide promptly copies thereof to the Series 2010-3 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 2010-3 Supplement and upon receipt of an Instruction to Transfer substantially in the form of Annex F to the Series 2010-3 Letter of Credit, the Series 2010-3 Letter of Credit Provider shall deliver for the benefit of such successor Trustee and the current Trustee, in exchange for the outstanding Series 2010-3 Letter of Credit, a substitute letter of credit substantially in the form of Exhibit A hereto, having terms identical to the then outstanding Series 2010-3 Letter of Credit but in favor of such successor Trustee.

 

  

-3-

  

 

(c)           If the Lessees wish to extend the Series 2010-3 Letter of Credit Expiration Date for purposes of this Agreement and the Series 2010-3 Letter of Credit, DTAG (on behalf of the Lessees) shall give the Series 2010-3 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 initial Series 2010-3 Letter of Credit Expiration Date and thereafter not more than 75 days and not less than 45 days prior to each subsequent one-year anniversary of the date hereof, provided, however, that the additional term of the Series 2010-3 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 Revolving Loan Maturity Date (as defined in the Credit Agreement) in effect at the time of such extension.  If the Series 2010-3 Letter of Credit Expiration Date is so extended, the Series 2010-3 Letter of Credit Provider shall either (i) issue to the Trustee in exchange for and upon receipt of the then outstanding Series 2010-3 Letter of Credit a substitute letter of credit having terms identical to the then outstanding Series 2010-3 Letter of Credit but expiring on the Series 2010-3 Letter of Credit Expiration Date, as so extended, or (ii) deliver to the Trustee an amendment to the then outstanding Series 2010-3 Letter of Credit to reflect such extension of the Series 2010-3 Letter of Credit Expiration Date.

 

(d)           If the conditions to the extension of the Series 2010-3 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 2010-3 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 2010-3 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 2010-3 Cash Collateral Account with cash in the amount of the Series 2010-3 Letter of Credit Liquidity Amount immediately prior to any drawing referred to in subsection (f) below or the funding of the Series 2010-3 Cash Liquidity Account in an amount sufficient to meet the conditions set forth in Section 5.1(b) of the Series 2010-3 Supplement, (B) other cash collateral accounts, overcollateralization or subordinated securities or (C) with the prior written consent of each Managing Agent, 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 the Series 2010-3 Required Noteholders 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 short-term debt ratings with respect to such substitute credit enhancement, if applicable, are less than “R-1 (middle)” or the equivalent from DBRS (or, if not rated by DBRS, “P-2” or the equivalent from Moody’s and “A-1” or the equivalent from Standard & Poor’s), be approved by the Required Series 2010-3 Noteholders; provided further, however, that, unless otherwise agreed by the Series 2010-3 Letter of Credit Provider, only after all amounts then owing to the Series 2010-3 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 2010-3 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,

 

  

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(y) cause the Trustee to return to the Series 2010-3 Letter of Credit Provider the then outstanding Series 2010-3 Letter of Credit and (z) deliver to the Trustee a substitute letter of credit having terms identical to the then outstanding Series 2010-3 Letter of Credit but expiring on the Series 2010-3 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 2010-3 Letter of Credit Expiration Date or (ii) the conditions precedent to the extension of the Series 2010-3 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 2010-3 Letter of Credit Provider or other substitute credit enhancement prior to the date which is 30 days prior to the Series 2010-3 Letter of Credit Expiration Date, then DTAG (on behalf of the Lessees) shall immediately notify the Trustee in writing.

 

(f)           If (i) the long-term debt credit rating of the Series 2010-3 Letter of Credit Provider shall be downgraded below “A(high)” from DBRS (or, if the Series 2010-3 Letter of Credit Provider is not rated by DBRS, “A1” in the case of Moody’s and “A+” in the case of Standard & Poor’s) or the short-term debt credit rating of the Series 2010-3 Letter of Credit Provider has fallen below “R-1(middle)” from DBRS (or, if the Series 2010-3 Letter of Credit Provider is not rated by DBRS, “P-2” in the case of Moody’s and “A-1” in the case of Standard & Poor’s), or (ii) the Series 2010-3 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 to obtain a new letter of credit in a form approved by the Series 2010-3 Required Noteholders and provided by a successor institution to act as Series 2010-3 Letter of Credit Provider that has long-term debt credit ratings of at least “A (high)” from DBRS (or, if such entity is not rated by DBRS, at least “A1” from Moody’s or at least “A+” from Standard & Poor’s) and short-term debt credit ratings of at least “R-1 (middle)” from DBRS (or, if such entity is not rated by DBRS, at least “P-2” in the case of Moody’s or at least “A-1” in the case of Standard & Poor’s); provided further, however, that only after all amounts then owing to the Series 2010-3 Letter of Credit Provider hereunder have been paid in full shall the letter of credit issued by such successor bank or banks be substituted for the Series 2010-3 Letter of Credit.

 

(g)           In the event that (i) the Series 2010-3 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 2010-3 Letter of Credit would be unlawful, (ii) the Series 2010-3 Letter of Credit Provider fails to extend its Series 2010-3 Letter of Credit Expiration Date pursuant to Section 2.l(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 2010-3 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 2010-3 Letter of Credit Provider), (iv) the Series 2010-3 Letter of Credit Provider shall have wrongfully failed to fund any LOC Credit Disbursement when required hereunder, or (v) the long-term debt credit rating of the Series 2010-3 Letter of Credit Provider shall be downgraded below “A(high)” from DBRS (or, if the Series 2010-3 Letter of Credit Provider is not rated by DBRS, “A1” in the case of Moody’s and “A+” in the case of Standard & Poor’s) or the short-term debt credit rating of the Series 2010-3 Letter of Credit Provider has fallen below “R-1(middle)” from DBRS (or, if the Series 2010-3 Letter of Credit Provider is not rated by DBRS,

 

  

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“P-2” in the case of Moody’s and “A-1” in the case of Standard & Poor’s), then the Lessees shall have the right at their own expense, upon notice to the Series 2010-3 Letter of Credit Provider, and such Series 2010-3 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 2010-3 Letter of Credit Provider to a replacement Series 2010-3 Letter of Credit Provider (having long-term debt credit ratings of at least “A (high)” from DBRS (or, if such entity is not rated by DBRS, at least “A1” from Moody’s or at least “A+” from Standard & Poor’s) and short-term debt credit ratings of at least “R-1 (middle)” from DBRS (or, if such entity is not rated by DBRS, at least “P-2” in the case of Moody’s or at least “A-1” in the case of Standard & Poor’s)) provided by DTAG (on behalf of the Lessees); provided, however, that (w) no such assignment to any replacement Series 2010-3 Letter of Credit Provider shall conflict with any law, rule, regulation or order of any Governmental Authority, (x) such assignment to any replacement Series 2010-3 Letter of Credit Provider shall be without recourse, representation and warranty and shall be on terms and conditions reasonably satisfactory to the Series 2010-3 Letter of Credit Provider and such replacement Series 2010-3 Letter of Credit Provider, (y) the purchase price paid by such replacement Series 2010-3 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 2010-3 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 2010-3 Letter of Credit Provider, as the case may be, shall pay to such replaced Series 2010-3 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 2010-3 Letter of Credit Provider hereunder and all other amounts accrued for such replaced Series 2010-3 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 2010-3 Letter of Credit Provider to be replaced hereunder have been paid in full shall the Series 2010-3 Letter of Credit issued by the replacement Series 2010-3 Letter of Credit Provider be substituted for the Series 2010-3 Letter of Credit Provider’s Series 2010-3 Letter of Credit.  If such a replacement for the Series 2010-3 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 of a substitute letter of credit or such other substitute credit enhancement.  If a replacement Series 2010-3 Letter of Credit Provider succeeds the Series 2010-3 Letter of Credit Provider or other substitute credit enhancement is obtained to replace the Series 2010-3 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 2010-3 Letter of Credit Provider of the then outstanding Series 2010-3 Letter of Credit, and (c) deliver to the Trustee a substitute letter of credit having terms identical to the then outstanding Series 2010-3 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.

 

  

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Section 2.2  [Reserved].

 

Section 2.3  Reimbursement.  (a)  Each Lessee agrees to pay to the Series 2010-3 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 2010-3 Letter of Credit Provider shall pay any LOC Credit Disbursement under the Series 2010-3 Letter of Credit in respect of Series 2010-3 Lease Payment Losses allocated to making a drawing under the Series 2010-3 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 2010-3 Letter of Credit Provider), plus (B) interest on any amount remaining unpaid by such Lessee to the Series 2010-3 Letter of Credit Provider under clause (A) above, from (and including) the date such amount is paid by the Series 2010-3 Letter of Credit Provider under the Series 2010-3 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 2010-3 Letter of Credit Provider on demand on and after each date on which the Series 2010-3 Letter of Credit Provider shall pay any LOC Credit Disbursement under the Series 2010-3 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 2010-3 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 2010-3 Letter of Credit Provider under the immediately preceding clause (A), from (and including) the date such amount is paid by the Series 2010-3 Letter of Credit Provider under the Series 2010-3 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 2010-3 Letter of Credit in accordance with Section 2.1(e) or (f) each Lessee agrees to pay to the Series 2010-3 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 2010-3 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%;

 

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 2010-3 Letter of Credit Provider until payment in full of the Lessee Termination Reimbursement Share by such Lessee to the Series 2010-3 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).

 

  

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Each Lessee shall pay its respective Lessee Termination Reimbursement Share of such LOC Termination Disbursement to the Series 2010-3 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 2010-3 Letter of Credit Provider is reimbursed for such LOC Termination Disbursement, the Series 2010-3 Letter of Credit Provider may direct DTAG in writing (and DTAG shall provide such direction to the Trustee in accordance with the Series 2010-3 Supplement) as to the investment in Permitted Investments of the funds in the Series 2010-3 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 2010-3 Cash Collateral Account) from such investments from time to time from the Series 2010-3 Cash Collateral Account in accordance with the following clause (d) and Sections 4.17(c) and (d) of the Series 2010-3 Supplement.  After reimbursement of the Series 2010-3 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 2010-3 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 2010-3 Cash Collateral Account in accordance with clause (d) below and Sections 4.17(c) and (d) of the Series 2010-3 Supplement.

 

(d)           Earnings from investments in the Series 2010-3 Cash Collateral Account shall be paid first, to the Series 2010-3 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 2010-3 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 2010-3 Cash Collateral Account in accordance with Section 4.17(d) of the Series 2010-3 Supplement shall be paid to the Series 2010-3 Letter of Credit Provider to the extent the Series 2010-3 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 2010-3 Letter of Credit Provider of amounts owed under clauses (a) and (c) above, amounts released from the Series 2010-3 Cash Collateral Account in accordance with Section 4.17(d) of the Series 2010-3 Supplement shall be paid to the Series 2010-3 Collection Account.

 

(e)           After a LOC Termination Disbursement has been made, any withdrawals made by the Trustee from the Series 2010-3 Cash Collateral Account in respect of Series 2010-3 Lease Payment Losses (as notified to RCFC and the Lessees by the Trustee pursuant to Section 4.14 of the Series 2010-3 Supplement) shall be reimbursed to the Series 2010-3 Cash Collateral Account in accordance with Section 4.7 of the Series 2010-3 Supplement.

 

  

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Section 2.4  Series 2010-3 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 2010-3 Letter of Credit Provider in connection with issuance of the Series 2010-3 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 2010-3 Letter of Credit Provider.  Each of the Lessees and DTAG acknowledges that the Series 2010-3 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 2010-3 Letter of Credit with respect to its use of the Series 2010-3 Letter of Credit.  Neither the Series 2010-3 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 2010-3 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 2010-3 Letter of Credit Provider against presentation of documents which do not comply with the terms of the Series 2010-3 Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Series 2010-3 Letter of Credit; or (d) any other circumstances whatsoever in making or failing to make payment under the Series 2010-3 Letter of Credit; provided, however, that the Series 2010-3 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 2010-3 Letter of Credit Provider’s willful misconduct or gross negligence in determining whether documents presented under the Series 2010-3 Letter of Credit comply with the terms of the Series 2010-3 Letter of Credit (as determined by a court of competent jurisdiction in a final and non-appealable decision) or (ii) the Series 2010-3 Letter of Credit Provider’s gross negligence in failing to make or willful failure to make lawful payment under the Series 2010-3 Letter of Credit after the presentation to the Series 2010-3 Letter of Credit Provider by the Trustee of a certificate strictly complying with the terms and conditions of the Series 2010-3 Letter of Credit (as determined by a court of competent jurisdiction in a final and non-appealable decision).  In furtherance and not in limitation of the foregoing, the Series 2010-3 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 2010-3 Letter of Credit.  Provided that the Series 2010-3 Letter of Credit Provider is not then in default under the Series 2010-3 Letter of Credit by reason of its having wrongfully failed to honor a demand for payment previously made by the Trustee under the Series 2010-3 Letter of Credit, the Series 2010-3 Letter of Credit Provider and DTAG (on behalf of itself and the Lessees) shall instruct the Trustee to surrender the Series 2010-3 Letter of Credit to the Series 2010-3 Letter of Credit Provider on the earliest of (i) the Series 2010-3 Letter of Credit Expiration Date, (ii) the date on which the Series 2010-3 Letter of Credit Provider honors a Certificate of Termination Demand presented under the Series 2010-3 Letter of Credit to the extent of the Series 2010-3 Letter of Credit Amount as in effect on such date, (iii) the date on which the Series 2010-3 Notes are paid in full, and (iv) the date on which the Series 2010-3 Letter of Credit Provider receives written notice from the Trustee that an alternate letter of credit or other credit enhancement has been substituted for the Series 2010-3 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 2010-3 Letter of Credit Provider to issue the Series 2010-3 Letter of Credit (provided, that such conditions will be deemed to be satisfied upon the issuance of the Series 2010-3 Letter of Credit):

 

(i)           On the date of issuance of the Series 2010-3 Letter of Credit, each condition precedent to the issuance of the Series 2010-3 Letter of Credit set forth in Sections 6.1 and 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 2010-3 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 2010-3 Letter of Credit.

 

(iii)           On the date of issuance of the Series 2010-3 Letter of Credit, and after giving effect to the transactions contemplated by this Agreement and the Series 2010-3 Letter of Credit, there shall exist no Potential Event of Default or Event of Default under this Agreement.

 

(iv)           The Series 2010-3 Letter of Credit Provider shall have received as of the date of issuance of the Series 2010-3 Letter of Credit a copy of the confirmation letter from DBRS to the effect that the Series 2010-3 Notes shall have been given a rating of at least “AA(sf)” by DBRS which rating shall be in full force and effect.

 

(v)           The Series 2010-3 Letter of Credit Provider shall have received (A) the favorable written opinions of counsel to each of the Lessees, DTAG and RCFC, dated the date hereof, covering such matters as the Series 2010-3 Letter of Credit Provider may reasonably request, (B) copies of any representation letters or certificates (or similar documents) provided to the Trustee, any of the Lessees, DTAG or RCFC and (C) copies of all opinions delivered to the Trustee, as an addressee or with reliance letters.

 

(vi)           The Series 2010-3 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 date hereof 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 2010-3 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.

 

(vii)           The Series 2010-3 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 2010-3 Letter of Credit Provider.

 

  

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(viii)           On the date of issuance of the Series 2010-3 Letter of Credit, immediately prior to, and after giving effect to, the issuance of the Series 2010-3 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) either individually or in the aggregate, could reasonably be expected to result in a material adverse change in the business, operations, property, assets, liabilities or condition (financial or otherwise) of DTAG and the Lessees, taken as a whole, since December 31, 2006 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 2010-3 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 2010-3 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 2010-3 Letter of Credit or the transactions contemplated hereby or thereby.

 

(x)           The Series 2010-3 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 2010-3 Letter of Credit Provider may reasonably request.

 

(xi)           The following shall be true and correct (and the Series 2010-3 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 2010-3 Notes except as permitted under the Related Documents.

 

(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.

 

  

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(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 2010-3 Noteholders, a first priority security interest in all Vehicles now or hereafter purchased or otherwise financed with the proceeds of the Series 2010-3 Notes in accordance with the terms of the Series 2010-3 Supplement.

 

(xiii)           The Series 2010-3 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 2010-3 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 2010-3 Letter of Credit Provider to extend the Series 2010-3 Letter of Credit Expiration Date or increase the Series 2010-3 Letter of Credit Commitment (provided that such conditions will be deemed to be satisfied upon such extension or increase with respect to the Series 2010-3 Letter of Credit):

 

(i)           On the date of extension or increase, each condition precedent to the issuance of the Series 2010-3 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 2010-3 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 2010-3 Letter of Credit.

 

(iii)           On the date of extension or increase with respect to the Series 2010-3 Letter of Credit, and after giving effect to the transactions contemplated by this Agreement and the Series 2010-3 Letter of Credit, there shall exist no Potential Event of Default or Event of Default under this Agreement.

 

(iv)           The Series 2010-3 Letter of Credit Provider shall have received as of the date of such increase or extension of the Series 2010-3 Letter of Credit a copy of the confirmation letter from DBRS to the effect that the Series 2010-3 Notes shall have been given a rating of at least “AA(sf)” by DBRS, which rating shall be in full force and effect.

 

(v)           On the date of extension or increase with respect to the Series 2010-3 Letter of Credit, immediately prior to, and after giving effect to, the extension or increase with respect to the Series 2010-3 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 

 

  

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(A) either individually or in the aggregate, could reasonably be expected to result in a material adverse change in the business, operations, property, assets, liabilities or condition (financial or otherwise) of DTAG and the Lessees, taken as a whole, since December 31, 2006, 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 2010-3 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 2010-3 Credit Provider); and no law or regulation shall be applicable that restrains, prevents or imposes materially adverse conditions upon this Agreement or the Series 2010-3 Letter of Credit or the transactions contemplated hereby or thereby.

 

(vii)           The Series 2010-3 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 2010-3 Letter of Credit Provider may reasonably request.

 

(viii)          The following shall be true and correct (and the Series 2010-3 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 2010-3 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 2010-3 Noteholders, 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 2010-3 Notes in accordance with the terms of the Series 2010-3 Supplement.

 

  

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(x)           The Series 2010-3 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 2010-3 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 2010-3 Letter of Credit to reimburse the Series 2010-3 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 2010-3 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 2010-3 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 2010-3 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 2010-3 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 2010-3 Letter of Credit proving to be insufficient in any respect;

 

(f)           payment by the Series 2010-3 Letter of Credit Provider under the Series 2010-3 Letter of Credit against presentation of a draft or certificate which does not comply with the terms of the Series 2010-3 Letter of Credit;

 

  

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(g)           any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the obligations of each of DTAG and each Lessee in respect of the Series 2010-3 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;

 

(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;

 

  

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(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 2010-3 Letter of Credit Provider’s reasonable satisfaction within a period of 30 days from the date on which the Series 2010-3 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 2.10), and such default shall not be cured to the Series 2010-3 Letter of Credit Provider’s reasonable satisfaction within a period of 30 days from the date on which the Series 2010-3 Letter of Credit Provider has given written notice thereof to such Lessee or DTAG (provided, that such 30-day cure period shall be a period consisting of 15 days in the case where such default relates to the failure of DTAG, as Master Servicer, to perform or observe any agreement or covenant contained in the Master Collateral Agency Agreement); or

 

(k)           any Related Document shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of any Lessee, DTAG or RCFC, or any Lessee, DTAG or RCFC shall, directly or indirectly, contest in any manner such effectiveness, validity, binding nature or enforceability;

 

then, the Series 2010-3 Letter of Credit Provider may by notice to DTAG on behalf of the applicable Lessee or Lessees, in the case of an Event of Default caused by or regarding any such Lessee or Lessees, (i) declare (to the extent not theretofore due and payable) the principal amount of outstanding LOC Credit Disbursements and the Lessee Termination Reimbursement Share of outstanding LOC Termination Disbursements, if any, to be due and payable, together with accrued interest thereon and all other sums payable by such Lessee or Lessees, hereunder and thereunder, whereupon the same shall become due and payable without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly waived by such Lessee or Lessees and DTAG and (ii) deem an amount equal to any undrawn portion of the Series 2010-3 Letter of Credit to have been paid or disbursed (notwithstanding that such amount may not in fact have been so paid or disbursed), and DTAG and the Lessees shall be immediately obligated to reimburse the Series 2010-3 Letter of Credit Provider the amount deemed to have been so paid or disbursed by the Series 2010-3 Letter of Credit Provider as if a demand had been made by the Series 2010-3 Letter of Credit Provider to the Lessees under Section 2.3 hereof and any amounts so received by the Series 2010-3 Letter of Credit Provider shall be maintained and applied in accordance with Section 4.7 of the Credit Agreement, and, in any case, the Series 2010-3 Letter of Credit Provider may take any other action permitted to be taken by it hereunder, under any Related Document or under applicable law or otherwise; provided that if an Event of Bankruptcy shall have occurred with respect to any Lessee or DTAG all sums payable by the Lessees and DTAG hereunder shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by each of the Lessees and DTAG.

 

  

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“Potential Event of Default” shall mean, for purposes of this Agreement, any occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default hereunder.

 

Section 2.11  Grant of Security Interest.  As security for the prompt and complete payment and performance of the obligations of each of the Lessees hereunder to the Series 2010-3 Letter of Credit Provider, each of the Lessees hereby acknowledges and confirms its respective pledge, hypothecation, assignment, transfer and delivery to the Master Collateral Agent under the Master Collateral Agency Agreement for the benefit of the Series 2010-3 Letter of Credit Provider under Section 2.1 of the Master Collateral Agency Agreement of a continuing, second priority security interest in the Lessee Grantor Master Collateral, whether now existing or hereafter created, subject to the terms and priorities set forth therein and in the other Related Documents, including, without limitation, the security interest in such collateral granted by each of the Lessees pursuant to the Master Lease and by RCFC to the Trustee for the benefit of any Series of Notes outstanding.

 

Section 2.12  Guarantee.  The Guarantor confirms its guarantee under Section 4.10 of the Credit Agreement of, inter alia, the obligations of the Lessees hereunder, including without limitation, (i) the obligations of the Lessees to make payments under this Agreement and (ii) the due and punctual performance and observance of all the terms, conditions, covenants, agreements and indemnities of the Lessees under this Agreement, and agrees that, if for any reason whatsoever, any Lessee fails to so perform and observe such terms, conditions, covenants, agreements and indemnities, the Guarantor will duly and punctually perform and observe the same.

 

 

ARTICLE III

 

Representations, Warranties and Covenants

 

Section 3.1  Representations and Warranties of the Lessees and DTAG.  Each of the Lessees hereby represents and warrants (which representations and warranties shall be deemed made on the date of issuance of the Series 2010-3 Letter of Credit and on the date of each extension (if any) of the Series 2010-3 Letter of Credit and each increase (if any) of the Series 2010-3 Letter of Credit Commitment) to the Series 2010-3 Letter of Credit Provider (and each of the Revolving Lenders under the Credit Agreement), as to itself, and DTAG represents and warrants (which representations and warranties shall be deemed made on the date of issuance of the Series 2010-3 Letter of Credit and on the date of each extension (if any) of the Series 2010-3 Letter of Credit and each increase (if any) of the Series 2010-3 Letter of Credit Commitment), to the Series 2010-3 Letter of Credit Provider (and each of the Revolving Lenders under the Credit Agreement), as to itself and as to each of the Lessees that:

 

(a)           Authorization; Enforceability.  Each of the Lessees and DTAG has full power and has taken all necessary action to authorize it to execute, deliver and perform this Agreement and each of the other Related Documents to which it is a party in accordance with their respective terms, and to consummate the transactions contemplated hereby and thereby.  This Agreement has been duly executed and delivered by each of the Lessees and DTAG and is, and each of the other Related Documents to which any of the Lessees or DTAG is a party is, a legal, valid and binding obligation of any such Lessee and DTAG, as applicable, enforceable against such Lessee or DTAG in accordance with its terms.

 

  

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(b)           Compliance.  The execution, delivery and performance, in accordance with their respective terms, by each of the Lessees and DTAG of this Agreement and each of the other Related Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not (i) require any consent, approval, authorization or registration not already obtained or effected, (ii) violate any material law with respect to any of the Lessees or DTAG, (iii) conflict with, result in a breach of, or constitute a default under the certificate or articles of incorporation or by-laws or other organizational documents of any of the Lessees or DTAG or under any material indenture, agreement, or other instrument to which any of the Lessees or DTAG is a party or by which its properties may be bound or (iv) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by any of the Lessees except Permitted Liens.

 

(c)           Manufacturer Programs.  No Manufacturer Event of Default has occurred and is continuing.

 

(d)           Master Lease Representations.  The representations and warranties made by each of the Lessees in the Master Lease are true and correct in all material respects.

 

(e)           Vehicles.  Each Program Vehicle was, on the date of purchase thereof or thereafter became, a Group VII Vehicle that was eligible for inclusion under an Eligible Vehicle Disposition Program, and each Non-Program Vehicle was, on the date of purchase thereof or thereafter became, a Group VII Vehicle that qualified as an Eligible Vehicle.

 

(f)           Representations and Warranties under the Credit Agreement.  Each of the representations and warranties of DTAG set forth in the Credit Agreement, including, without limitation, those set forth in Sections 7.1 through 7.19 of the Credit Agreement, is true and correct and is hereby incorporated herein by this reference.

 

Section 3.2  Affirmative Covenants of the Lessees and DTAG.  So long as the Series 2010-3 Letter of Credit has not expired or any amount is owing to the Series 2010-3 Letter of Credit Provider hereunder, each of the Lessees and DTAG agrees that, unless at any time the Series 2010-3 Letter of Credit Provider shall otherwise expressly consent in writing, it will, and in the case of DTAG, it will cause each of the Lessees to:

 

(a)           Affirmative Covenants under the Credit Agreement.  Comply with each of the affirmative covenants applicable to it set forth in the Credit Agreement including, without limitation, those set forth in Section 8.1 thereof, which affirmative covenants are hereby incorporated herein by this reference;

 

(b)           Events of Default.  Furnish, or cause to be furnished to the Series 2010-3 Letter of Credit Provider, as soon as possible but in any event within three Business Days after the occurrence of any Event of Default or a Potential Event of Default under this Agreement, a written statement of the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary (each, an “Authorized Officer”) of DTAG or an Authorized Officer of the applicable Lessee, as the case may be, describing such event and the action that DTAG or the applicable Lessee, as the case may be, proposes to take with respect thereto;

 

  

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(c)           Certain Information.  Furnish, or cause to be furnished to the Series 2010-3 Letter of Credit Provider, promptly upon the delivery to RCFC by DTAG, a copy of the financial information and other materials required to be delivered by DTAG to RCFC pursuant to Section 24.4 of the Master Lease (other than the VIN list as required by Section 24.4(f) of the Master Lease);

 

(d)           Manufacturers.  Furnish, or cause to be furnished to the Series 2010-3 Letter of Credit Provider, promptly after obtaining actual knowledge thereof, notice of any Manufacturer Event of Default or termination or replacement of an Eligible Vehicle Disposition Program;

 

(e)           Other.  Furnish, or cause to be furnished to the Series 2010-3 Letter of Credit Provider, promptly, from time to time, such other information, documents, or reports with respect to the Master Lease Collateral (as defined in the Master Lease) or the condition or operations, financial or otherwise, of DTAG or any Lessee as the Series 2010-3 Letter of Credit Provider may from time to time reasonably request in order to protect the interests of the Series 2010-3 Letter of Credit Provider under or as contemplated by this Agreement or any other Related Document;

 

(f)           Maintenance of the Vehicles.  Maintain and cause to be maintained in good repair, working order, and condition, reasonable wear and tear excepted, all of the Vehicles in accordance with each Lessee’s respective ordinary business practices with respect to all other vehicles owned thereby and shall use its best efforts to maintain the Program Vehicles as Group VII Vehicles that are eligible under a Eligible Vehicle Disposition Program and the Non-Program Vehicles as Group VII Vehicles that are Eligible Vehicles, in each case except to the extent that any such failure to comply with such requirements does not, in the aggregate, materially adversely affect the interests of the Series 2010-3 Letter of Credit Provider under this Agreement or the likelihood of repayment of its obligations hereunder, and, from time to time, make or cause to be made all appropriate repairs, renewals, and replacements with respect to the Vehicles;

 

(g)           Maintenance of Separate Existence.  Each Lessee and DTAG acknowledge their receipt of a copy of those certain opinion letters issued by Latham & Watkins LLP dated October 28, 2010 addressing the issue of substantive consolidation as it may relate to DTAG and RCFC.  Each of the Lessees, DTAG and RCFC hereby agrees to maintain in place all policies and procedures, and take and continue to take all action, described in the factual assumptions set forth in such opinion letter and relating to such Person, except as may be confirmed as not required in a subsequent or supplemental opinion of Latham & Watkins LLP addressing the issue of substantive consolidation as it may relate to DTAG and RCFC; and

 

  

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(h)           Verification of Titles.  Upon the request of the Series 2010-3 Letter of Credit Provider, cause a title check by a Person acceptable to the Master Collateral Agent on a reasonable number of the Vehicles, including verification that the titles reflect the pledge to the Master Collateral Agent, and shall cause the results of such title check to be furnished to the Master Collateral Agent with a copy for the Series 2010-3 Letter of Credit Provider.

 

Section 3.3  Negative Covenants of the Lessees and DTAG.  So long as the Series 2010-3 Letter of Credit has not expired or any amount is owing to the Series 2010-3 Letter of Credit Provider hereunder, each of the Lessees and DTAG agrees that, unless at anytime the Series 2010-3 Letter of Credit Provider shall otherwise expressly consent in writing, it will not and, in the case of DTAG, will not permit any Lessee to:

 

(a)           Negative Covenants under the Credit Agreement.  Fail to comply with each of the negative covenants applicable to it set forth in the Credit Agreement including, without limitation, those set forth in Section 8.2 thereof, which negative covenants are hereby incorporated herein by this reference.

 

(b)           Liens.  Create or permit to exist any Lien with respect to the Group VII Collateral or the Master Lease Collateral now or hereafter existing or acquired, except for Permitted Liens.

 

(c)           Use of Vehicles.  Use or authorize the Vehicles to be used in any manner (i) that would make such Vehicles that are Program Vehicles ineligible for repurchase or sale under the applicable Eligible Vehicle Disposition Program, (ii) for any illegal purposes or (iii) that could subject the Vehicles to confiscation.

 

(d)           Additional Lessees.  Permit any Person to become a lessee under the Master Lease unless prior to becoming a lessee thereunder such Person has become a Lessee hereunder in accordance with the terms hereof.

 

ARTICLE IV

 

Miscellaneous

 

Section 4.1  Payments.  (a)  Unless otherwise specified herein, all payments to the Series 2010-3 Letter of Credit Provider hereunder shall be made in lawful currency of the United States and in immediately available funds prior to 11:00 a.m. (New York City time) on the date such payment is due by wire transfer to the Series 2010-3 Letter of Credit Provider, Account Name:  DBTCA Loan Clearing Account, Account No. 99401268, Account ABA 021001033, at DBTCA, or to such other office or account maintained by the Series 2010-3 Letter of Credit Provider as the Series 2010-3 Letter of Credit Provider may direct.

 

(b)           Whenever any payment under this Agreement shall be stated to be due on a day which is not a Business Day, such payment, unless otherwise provided herein, shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in computing interest, commissions or fees, if any, in connection with such payment.

 

  

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Section 4.2  Expenses.  Each of the Lessees agrees to pay all costs and reasonable expenses incurred by the Series 2010-3 Letter of Credit Provider (including, without limitation, reasonable attorneys’ fees and expenses), if any, in connection with the preparation, execution and delivery, administration, enforcement, amendment or waiver of the obligations of the Lessees or DTAG under this Agreement or any other Related Document or any other agreement furnished hereto or in connection herewith or in connection with any negotiations arising out of any Potential Event of Default under this Agreement or any events or circumstances that may give rise to a Potential Event of Default under this Agreement and with respect to presenting claims in or otherwise participating in any bankruptcy, insolvency or other similar proceeding involving creditors’ rights generally and any ancillary proceedings.

 

The Lessees each agree to pay on demand all reasonable expenses of the Series 2010-3 Letter of Credit Provider in connection with the filing, recording, refiling or rerecording of this Agreement, the Related Documents and/or any UCC financing statements relating thereto and all amendments, supplements and modifications to any thereof and any and all other documents or instruments of further assurance required to be filed or recorded or refiled or rerecorded by the terms hereof.

 

In addition, each of the Lessees shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing and recording of this Agreement or the Series 2010-3 Letter of Credit (or any payment thereunder or transfer thereof), any other Related Document and any such other documents, and agree to save the Series 2010-3 Letter of Credit Provider harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees.

 

Section 4.3  Indemnity.  The Lessees each agree to indemnify and hold harmless the Series 2010-3 Letter of Credit Provider and, in their capacities as such, officers, directors, shareholders, affiliates, controlling persons, employees, agents and servants of the Series 2010-3 Letter of Credit Provider, from and against any and all claims, damages, losses, liabilities, costs or expenses whatsoever which the Series 2010-3 Letter of Credit Provider may incur or which may be claimed against the Series 2010-3 Letter of Credit Provider by any Person whatsoever (including reasonable fees and expenses of counsel) in each case arising out of or by reason of or in connection with, or in connection with the preparation of a defense of, any investigation, litigation or proceeding arising out of, relating to or in connection with the execution and delivery of, or payment of any LOC Credit Disbursement or LOC Termination Disbursement payable by the Lessees under the Series 2010-3 Letter of Credit or this Agreement or any other Related Document, or any acts or omissions of any of the Lessees in connection herewith or therewith, or any transactions contemplated hereby or thereby (whether or not consummated), or any inaccuracies or alleged inaccuracies in any material respect or any untrue statement or alleged untrue statement of any of the Lessees contained or incorporated by reference in any Related Document or the omission or alleged omission by any of the Lessees to state therein a material fact necessary to make such statements, in the light of the circumstances under which they are or were made, not misleading, except to the extent that such claim, damage, loss, liability, cost or expense is caused by the willful misconduct or gross negligence of the Series 2010-3 Letter of Credit Provider or a breach by the Series 2010-3 Letter of Credit Provider (or its agents or employees or any other Person under its control) of its obligations under the Series 2010-3 Letter of Credit, in each case as determined by a final and non-appealable judgment of a court of competent jurisdiction, and provided that any such Lessee shall be required to indemnify the Series 2010-3 Letter of Credit Provider, in connection with prosecuting or defending any such claims, for reasonable attorneys’ fees and expenses.

 

  

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Section 4.4  Notices.  All notices, requests and other communications to any party hereunder shall be in writing (including bank wire, facsimile transmission or similar writing) and addressed, delivered or transmitted to such party at its address or telecopy number set forth below, or at such other address or telecopy number, as the case may be, as such party may hereafter specify for the purpose by notice to the other party.  Each such notice, request or communication shall be deemed to have been duly given or made when delivered, or five Business Days after being deposited in the mail, postage prepaid and return receipt requested, or in the case of facsimile notice, when electronic confirmation thereof is received by the transmitter.

 

If to DTAG:

 

Dollar Thrifty Automotive Group, Inc.

5330 East 31st Street

Tulsa, OK  74135

Attention:  H. Clifford Buster III

Telephone:  (918) 669-2272

Telecopier:  (918) 669-2970

 

If to RCFC:

 

Rental Car Finance Corp.

5330 East 31st Street

Tulsa, OK  74135

Attention:  H. Clifford Buster III

Telephone:  (918) 669-2272

Telecopier:  (918) 669-2970

 

If to the Series 2010-3 Letter of Credit Provider:

 

Deutsche Bank Trust Company Americas

60 Wall Street

New York, New York 10005

Attention:  Global Loan Operations, Standby Letter of Credit Unit

Telephone:  (212) 250-1014

Telecopier:  (212) 797-0403

 

If to DTG Operations:

 

5330 East 31st Street

Tulsa, OK  74135

Attention:  H. Clifford Buster III

Telephone:  (918) 669-2272

Telecopier:  (918) 669-2970

 

  

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If to an Additional Lessee:

 

At the address for notices to such Additional Lessee set forth in the related Affiliate Joinder in Enhancement Letter of Credit Application and Agreement.

 

If to the Trustee:

 

Deutsche Bank Trust Company Americas

60 Wall Street

New York, New York 10005

Attention:  Corporate Trust Division

Telecopier:  (212) 553-2462

 

Section 4.5  Amendments; Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  (a)  This Agreement and the rights and obligations of the parties hereunder may not be amended or otherwise modified orally but only by an instrument in writing signed by the Series 2010-3 Letter of Credit Provider and each other party hereto against whom enforcement of such amendment or modification is sought.  This Agreement shall be construed in accordance with and governed by the laws of the State of New York.

 

(b)           ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, THE LESSEES, DTAG AND RCFC HEREBY IRREVOCABLY ACCEPT FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.  THE LESSEES, DTAG AND RCFC, IN EACH CASE, HEREBY FURTHER IRREVOCABLY WAIVE ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER THE LESSEES, DTAG AND RCFC, AS APPLICABLE, AND AGREE NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER THE LESSEES, DTAG AND RCFC.  THE LESSEES, DTAG AND RCFC FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE LESSEES, DTAG AND RCFC AT ITS OR THEIR ADDRESS SET FORTH ABOVE IN SECTION 4.4, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.  THE LESSEES, DTAG AND RCFC HEREBY IRREVOCABLY WAIVE ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER RELATED DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE SERIES 2010-3 LETTER OF CREDIT PROVIDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LESSEE, DTAG OR RCFC IN ANY OTHER JURISDICTION.

 

  

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(c)           THE LESSEES, DTAG AND RCFC HEREBY IRREVOCABLY WAIVE ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (b) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(d)           EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER RELATED DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

Section 4.6  Waivers, etc.  Neither any failure nor any delay on the part of the Series 2010-3 Letter of Credit Provider in exercising any right, power or privilege hereunder or under the Series 2010-3 Letter of Credit or any other Related Document shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise or the exercise of any other right, power or privilege.  The remedies herein and in the Related Documents are cumulative and not exclusive of any remedies provided by law.

 

Section 4.7  Severability.  Any provisions of this Agreement which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 4.8  Term.  This Agreement shall remain in full force and effect until the reimbursement of all LOC Disbursements by the Lessees or DTAG, as the case may be, and the payment by the Lessees or DTAG, as the case may be, of all other amounts payable hereunder, notwithstanding the earlier termination of the Series 2010-3 Letter of Credit.

 

Section 4.9  Successors and Assigns.  This Agreement shall be binding upon the Series 2010-3 Letter of Credit Provider and its successors and assigns, each Lessee and its successors and assigns, DTAG and its successors and assigns, and RCFC and its successors and assigns; provided, however, that none of the Lessees, DTAG or RCFC may transfer or assign any of its obligations, rights, or interests hereunder without the prior written consent of the Series 2010-3 Letter of Credit Provider; and provided further, however, that the Series 2010-3 Letter of Credit Provider may at any time (i) assign all or a portion of its obligations under the Series 2010-3 Letter of Credit and its rights under this Agreement to a successor institution satisfying the requirements set forth in Section 4.16(a) of the Series 2010-3 Supplement; provided further, however, that (x) DTAG shall have consented in writing to such assignment (which consent shall not be unreasonably withheld), and (y) such assignment shall be for an amount at least equal to $5,000,000, or 

 

  

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(ii) grant participations to any other Person, in all or part of its obligations under the Series 2010-3 Letter of Credit and its rights under this Agreement (it being understood and agreed that the Lessees shall have no obligation to give notices to any such participant, that such participation will not in any way reduce the Series 2010-3 Letter of Credit Provider’s commitment to make LOC Disbursements hereunder, and that such participation (other than a participation held by a Revolving Lender pursuant to the Credit Agreement) shall not increase the obligations (including with respect to costs and expenses) of the Lessees hereunder); provided that the Series 2010-3 Letter of Credit Provider shall be entitled to receive any increased costs or indemnities payable hereunder incurred by the Series 2010-3 Letter of Credit Provider or such participant to the extent not in excess of such amounts calculated as if there were no participation.  The Series 2010-3 Letter of Credit Provider hereby acknowledges and agrees that any such disposition will not alter or affect the Series 2010-3 Letter of Credit Provider’s direct obligations to the Trustee, and that none of the Lessees, DTAG or RCFC shall have any obligations to have any communication or relationship with any participant in order to enforce such obligations of the Series 2010-3 Letter of Credit Provider hereunder and under the Series 2010-3 Letter of Credit.  All agreements, representations and warranties made herein shall survive the execution and delivery of this Agreement.

 

Section 4.10  Counterparts.  This Agreement may be executed in any number of counterparts, and by the different parties hereto on the same or separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute one and the same agreement.

 

Section 4.11  Further Assurances.  The Lessees, DTAG and RCFC each agree to do such further acts and things and to execute and deliver to the Series 2010-3 Letter of Credit Provider such additional assignments, agreements, powers and instruments as are reasonably required by the Series 2010-3 Letter of Credit Provider to carry into effect the purposes of this Agreement and under the Related Documents or to better assure and confirm to the Series 2010-3 Letter of Credit Provider its rights, powers and remedies hereunder and under the Related Documents.

 

Section 4.12  Survival of Representations and Warranties.  All representations and warranties contained herein or made in writing by DTAG, the Lessees and RCFC in connection herewith shall survive the execution and delivery of this Agreement, regardless of any investigation made by the Series 2010-3 Letter of Credit Provider or on its behalf and shall continue so long as and until such time as all obligations hereunder and under the Related Documents shall have been paid in full.  The obligations of the Lessees under Sections 2.5, 4.1, 4.2 and 4.3 shall in each case survive any termination of this Agreement, the payment in full of all obligations hereunder or under any other Related Document and the termination of the Series 2010-3 Letter of Credit.

 

Section 4.13  Obligation.  Each of the Series 2010-3 Letter of Credit Provider and each of the Lessees understands and agrees that the Series 2010-3 Letter of Credit is irrevocable and the obligations of the Series 2010-3 Letter of Credit Provider as issuer thereof shall be unaffected by any default hereunder, including, without limitation any failure to pay the amounts due and payable to the Series 2010-3 Letter of Credit Provider under Section 2.4.  

 

  

-25-

  

 

No failure of any of the Lessees (or any person or organization acting on behalf thereof) or the Trustee to take any action (whether required hereunder or otherwise), nor any action taken by any of the Lessees shall be asserted by the Series 2010-3 Letter of Credit Provider as a defense to payment under the Series 2010-3 Letter of Credit (except for the failure of any documents presented thereunder to comply with the terms of the Series 2010-3 Letter of Credit) or as the basis of a right of set off by the Series 2010-3 Letter of Credit Provider against its obligations to make any such payment.

 

Section 4.14  Headings.  Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

 

Section 4.15  Confidentiality.  The Series 2010-3 Letter of Credit Provider agrees that it shall not disclose any Confidential Information (as defined below) to any Person without the consent of DTAG, the Lessees or RCFC, as applicable, other than (a) to the Series 2010-3 Letter of Credit Provider’s Affiliates and to the Administrative Agent, the Revolving Lenders and the Term Lenders and their respective officers, directors, employees, agents and advisors and to actual or prospective assignees and participants, and then only on a confidential basis, (b) as required by any law, rule or regulation or judicial process, (c) as requested or required by any state, federal or foreign authority or examiner regulating banks or banking or (d) as otherwise permitted by Section 11.14 of the Credit Agreement (which is incorporated herein by reference).

 

“Confidential Information” means information that DTAG, the Lessees or RCFC furnishes to the Series 2010-3 Letter of Credit Provider on a confidential basis, but does not include any such information that is or becomes generally available to the public or that is or becomes available to the Series 2010-3 Letter of Credit Provider from a source other than DTAG, the Lessees or RCFC.

 

Section 4.16  Additional Series 2010-3 Letter of Credit Providers.  The Series 2010-3 Letter of Credit Provider acknowledges and agrees that the Lessees may obtain Series 2010-3 Letter of Credit Provider commitments from additional Series 2010-3 Letter of Credit Providers from time to time, provided such commitments are, unless the Series 2010-3 Letter of Credit Provider otherwise consents, on the same terms and provisions as this Agreement and provide for obligations that rank pari passu with each Lessee’s obligations hereunder.

 

Section 4.17  Additional Subsidiary Lessees.  Any direct or indirect Subsidiary of DTAG (each a “DTAG Subsidiary”) shall have the right to become a “Lessee” under and pursuant to the terms of this Agreement by complying with the provisions of Section 28.1 of the Master Lease and the provisions of this Section 4.17.  In the event a DTAG Subsidiary desires to become “Lessee” under this Agreement, then the Guarantor and such DTAG Subsidiary shall execute and deliver to the Series 2010-3 Letter of Credit Provider and the Trustee:

 

(i)           an Affiliate Joinder in Enhancement Letter of Credit Application and Agreement in the form attached hereto as Exhibit B (each, an “Affiliate Joinder in Enhancement Letter of Credit Application and Agreement”);

 

(ii)           copies of the documentation set forth in clauses (a) through (j) of Section 28.1 of the Master Lease;

 

  

-26-

  

 

(iii)           an Officers’ Certificate and an opinion of counsel each stating that the joinder described in clause (i) above by such DTAG Subsidiary complies with this Section 4.17 and that all conditions precedent herein provided for relating to such transaction have been complied with; and

 

(iv)           any additional documentation that the Series 2010-3 Letter of Credit Provider or the Trustee may reasonably require to evidence the assumption by such DTAG Subsidiary of the obligations and liabilities set forth in this Agreement.

 

Upon satisfaction of the foregoing conditions and receipt by each of the Trustee and the Series 2010-3 Letter of Credit Provider of original executed copies of the applicable Affiliate Joinder in Enhancement Letter of Credit Application and Agreement executed by such DTAG Subsidiary and the Guarantor, such DTAG Subsidiary shall for all purposes be deemed to be a “Lessee” for purposes of this Agreement and shall be entitled to the benefits and subject to the liabilities and obligations of a Lessee hereunder.

 

Section 4.18  Enhancement Letter of Credit Application and Agreement.  This Agreement is an Enhancement Letter of Credit Application and Agreement executed pursuant to the Credit Agreement.  In the event that, after construing the terms of this Agreement and the Credit Agreement in a manner that would seek to avoid any purported inconsistency or conflict between the terms of this Agreement, on the one hand, and the terms of the Credit Agreement, on the other hand, such inconsistency or conflict cannot be avoided, the terms of this Agreement shall control.

 

Section 4.19  Series 2010-3 Letter of Credit Provider as Enhancement Provider and Third-Party Beneficiary.  The Lessees, RCFC and DTAG each hereby acknowledges and agrees that the Series 2010-3 Letter of Credit Provider is (i) an “Enhancement Provider” (as such term is used in the Base Indenture) and (ii) without limiting the effect of any other provision contained in the Base Indenture or the Series 2010-3 Supplement, a third-party beneficiary of the provisions set forth in Article 11 of the Base Indenture, Section 8.6 of the Series 2010-3 Supplement and Section 22 of the Master Lease.

 

Section 4.20  No Recourse; No Petition.  (a)  Each of the parties hereto hereby covenants and agrees that:

 

(i)           no recourse shall be had for the payment of any amount owing in respect of any disbursement made under this Agreement or the Series 2010-3 Letter of Credit or for the payment of any fee hereunder or thereunder or any other obligation or claim arising out of or based upon this Agreement or the Series 2010-3 Letter of Credit against RCFC or any stockholder, employee, officer, director or incorporator of RCFC based on their status as such or their actions in connection therewith; and

 

(ii)           prior to the date which is one year and one day after the payment in full of any Notes issued by RCFC pursuant to the Indenture, such party will not institute against, or join with any other Person in instituting against, RCFC, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any Federal or state bankruptcy or similar law, all as more particularly set forth in Section 12.15 of the Base Indenture and subject to any retained rights set forth therein (it being agreed and understood that nothing contained herein shall preclude participation by any such party in assertion or defense of its claims in any such proceeding involving RCFC);

 

  

-27-

  

 

provided, however, that nothing in this clause (a) shall constitute a waiver of any right to indemnification, reimbursement or other payment from RCFC to such party pursuant to any Related Document (other than this Agreement) to which RCFC is a party.

 

(b)           In the event that any such party takes action in violation of clause (a)(ii), RCFC agrees that it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such a petition by such party against RCFC or the commencement of such action and raise the defense that such Person has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as its counsel advises that it may assert.

 

(c)           The provisions of this Section 4.20 shall survive the termination of this Agreement.

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

  

-28-

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized officers, as of the day and year first above written.

 

 

	
  

	
DOLLAR THRIFTY AUTOMOTIVE GROUP, 

  INC.

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
RENTAL CAR FINANCE CORP.

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
LESSEES:

 

 

	
  

	
DTG OPERATIONS, INC.

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
DEUTSCHE BANK TRUST COMPANY 

  AMERICAS, as the Series 2010-3 Letter of 

  Credit Provider

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

  

  

  

EXHIBIT A

to

ENHANCEMENT LETTER OF CREDIT

APPLICATION AND AGREEMENT

 

IRREVOCABLE LETTER OF CREDIT

 

No. [_____]

 

March [__], 2011

 

Deutsche Bank Trust Company Americas, as Trustee

60 Wall Street

New York, New York 10005

Telecopier:  (212) 553-2462

 

Attention:  Corporate Trust Division

 

Dear Sir or Madam:

 

The undersigned (“DBTCA” or the “Series 2010-3 Letter of Credit Provider”) hereby establishes, at the request and for the account of Dollar Thrifty Automotive Group, Inc. (“DTAG”), DTG Operations, Inc. (“DTG Operations”), and each of the parties identified as a Lessee (collectively, the “Lessees”) in that certain Enhancement Letter of Credit Application and Agreement, dated as of even date herewith (as the same may be amended, supplemented, restated or otherwise modified from time to time, the “Enhancement Letter of Credit Application and Agreement”), among the Lessees, the Series 2010-3 Letter of Credit Provider, Rental Car Finance Corp., a special purpose Oklahoma corporation (“RCFC”), and DTAG in your favor as Trustee under that certain Series 2010-3 Supplement, dated as of October 28, 2010 (as the same may be amended, supplemented or otherwise modified from time to time, the “Series 2010-3 Supplement”), between RCFC, as the issuer, and Deutsche Bank Trust Company Americas, as Trustee (in such capacity, the “Trustee”), to the Amended and Restated Base Indenture, dated as of February 14, 2007, as the same may be amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms thereof, the “Base Indenture”), between RCFC and the Trustee, this Irrevocable Letter of Credit No. [_____] (the “Series 2010-3 Letter of Credit”), in the aggregate maximum amount of [______] DOLLARS ($[_____]) (such amount, as the same may be reduced, increased and reinstated from time to time as provided herein, being the “Series 2010-3 Letter of Credit Amount”), effective immediately and expiring at 12:00 noon (New York time) at our New York office at 60 Wall Street, New York, New York 10005, Attention:  Global Loan Operations, Standby Letter of Credit Unit , Facsimile No.:  (212) 797-0403 (such office or any other office which may be designated by the Series 2010-3 Letter of Credit Provider by written notice delivered to you, being the “Series 2010-3 Letter of Credit Provider’s Office”) on June 10, 2013 (or, if such date is not a Business Day (as defined below), the immediately preceding Business Day) (the “Scheduled Letter of Credit Expiration Date”).  You are referred to herein (and in each Annex hereto) as the Trustee.

 

  

  

  

 

Exhibit A

to

Enhancement Letter of Credit

Application and Agreement

Page 2

 

The Series 2010-3 Letter of Credit Provider irrevocably authorizes you to draw on it, in accordance with the terms and conditions and subject to the reductions in amount as hereinafter set forth, (1) in one or more drawings by one or more of the Trustee’s drafts, each drawn on the Series 2010-3 Letter of Credit Provider at the Series 2010-3 Letter of Credit Provider’s Office, payable at sight on a Business Day (as defined below), and accompanied by the Trustee’s written and completed certificate purported to be signed by the Trustee in substantially the form of Annex A attached hereto (any such draft accompanied by such certificate being a “Credit Demand”), an amount equal to the face amount of each such draft but in the aggregate amount not exceeding the Series 2010-3 Letter of Credit Amount as in effect on such Business Day and (2) in a single drawing by the Trustee’s draft, drawn on the Series 2010-3 Letter of Credit Provider at the Series 2010-3 Letter of Credit Provider’s Office, payable at sight on a Business Day, and accompanied by the Trustee’s written and completed certificate purported to be signed by the Trustee in substantially the form of Annex B attached hereto (such draft accompanied by such certificate being a “Termination Demand”), an amount equal to the face amount of each such draft but in the aggregate amount not exceeding the Series 2010-3 Letter of Credit Amount as in effect on such Business Day, provided, that only one Termination Demand may be made hereunder.  Any Credit Demand or Termination Demand may be delivered by facsimile transmission to the Series 2010-3 Letter of Credit Provider’s Office. “Business Day” means any day other than a Saturday, Sunday or other day on which banks are required or authorized by law to close in New York City, New York.  Upon the Series 2010-3 Letter of Credit Provider honoring any Credit Demand presented hereunder, the Series 2010-3 Letter of Credit Amount shall automatically be decreased by an amount equal to the amount of such Credit Demand.  In addition to the foregoing reduction, the Series 2010-3 Letter of Credit Amount shall automatically be reduced to zero and this Series 2010-3 Letter of Credit shall be terminated upon the Series 2010-3 Letter of Credit Provider honoring any Termination Demand presented to it hereunder.

 

The Series 2010-3 Letter of Credit Amount shall be automatically reinstated with respect to reimbursement of any Credit Demand when and to the extent, but only when and to the extent, that (i) the Series 2010-3 Letter of Credit Provider is reimbursed by any of the Lessees or DTAG (on behalf of any of the Lessees), as the case may be, in full for any amount drawn hereunder by any Credit Demand and (ii) the Series 2010-3 Letter of Credit Provider receives written notice from DTAG in substantially the form of Annex C attached hereto certifying that no Event of Bankruptcy (as defined in Annex C attached hereto) with respect to DTAG, DTG Operations, or any other Lessee has occurred and is continuing; provided, however, that the Series 2010-3 Letter of Credit Amount shall, in no event, be reinstated to an amount greater than the Series 2010-3 Letter of Credit Amount as in effect immediately prior to such Credit Demand.

 

The Series 2010-3 Letter of Credit Amount shall be automatically reduced in accordance with the terms of a written request from the Trustee to the Series 2010-3 Letter of Credit Provider in substantially the form of Annex D attached hereto that is acknowledged and agreed to in writing by the Series 2010-3 Letter of Credit Provider.  The Series 2010-3 Letter of Credit Amount shall be automatically increased upon receipt by (and written acknowledgment of such receipt by) the Trustee of written notice from the Series 2010-3 Letter of Credit Provider in substantially the form of Annex E attached hereto certifying that the Series 2010-3 Letter of Credit Amount has been increased and setting forth the amount of such increase.

 

  

  

  

Exhibit A

to

Enhancement Letter of Credit

Application and Agreement

Page 3

 

Each Credit Demand and Termination Demand shall be dated the date of its presentation, and shall be presented to the Series 2010-3 Letter of Credit Provider at the Series 2010-3 Letter of Credit Provider’s Office.  Promptly after making a Credit Demand or Termination Demand, the Trustee will make reasonable efforts to provide the Series 2010-3 Letter of Credit Provider with telephonic confirmation thereof by calling the Series 2010-3 Letter of Credit Provider at one of the following telephone numbers: (212) 250-1014, (212) 250-1214 or (212) 250-1414; provided that the failure of the Trustee to provide such telephonic confirmation shall not relieve the Series 2010-3 Letter of Credit Provider of any of its obligations hereunder or affect any of the Trustee’s rights hereunder.  If the Series 2010-3 Letter of Credit Provider receives any Credit Demand or Termination Demand at such office, all in strict conformity with the terms and conditions of this Series 2010-3 Letter of Credit, not later than 1:00 p.m. (New York City time) on a Business Day prior to the termination hereof, the Series 2010-3 Letter of Credit Provider will make such funds available by 4:30 p.m. (New York City time) on the same day in accordance with your payment instructions.  If the Series 2010-3 Letter of Credit Provider receives any Credit Demand or Termination Demand at such office, all in strict conformity with the terms and conditions of this Series 2010-3 Letter of Credit, after 1:00 p.m. (New York City time) on a Business Day prior to the termination hereof, the Series 2010-3 Letter of Credit Provider will make the funds available by 12:00 noon (New York City time) on the next succeeding Business Day in accordance with your payment instructions.  If you so request the Series 2010-3 Letter of Credit Provider, payment under this Series 2010-3 Letter of Credit may be made by wire transfer of Federal Reserve Bank of New York funds to your respective accounts in a bank on the Federal Reserve wire system or by deposit of same day funds into a designated account.

 

Upon the earliest of (i) the date on which the Series 2010-3 Letter of Credit Provider honors a Termination Demand presented hereunder to the extent of the Series 2010-3 Letter of Credit Amount as in effect on such date, (ii) the date on which the Series 2010-3 Letter of Credit Provider receives written notice from you that an alternate letter of credit or other credit enhancement has been substituted for this Series 2010-3 Letter of Credit, (iii) the date on which the Series 2010-3 Notes are paid in full and (iv) the Scheduled Letter of Credit Expiration Date, this Series 2010-3 Letter of Credit shall automatically terminate and you shall surrender this Series 2010-3 Letter of Credit to the undersigned Series 2010-3 Letter of Credit Provider on such day.

 

This Series 2010-3 Letter of Credit is transferable only in its entirety to any transferee(s) who you certify to the Series 2010-3 Letter of Credit Provider has succeeded you, as Trustee under the Series 2010-3 Supplement, and may be successively transferred only in its entirety.  Transfer of this Series 2010-3 Letter of Credit to such transferee shall be effected by the presentation to the Series 2010-3 Letter of Credit Provider of this Series 2010-3 Letter of Credit accompanied by a certificate in substantially the form of Annex F attached hereto.  

 

  

  

  

Exhibit A

to

Enhancement Letter of Credit

Application and Agreement

Page 4

 

Upon such presentation the Series 2010-3 Letter of Credit Provider shall forthwith transfer this Series 2010-3 Letter of Credit to the transferee and endorse this Series 2010-3 Letter of Credit in favor of the transferee or, if requested by the transferee, issue a new irrevocable letter of credit in favor of the transferee with provisions therein consistent with this Series 2010-3 Letter of Credit.

 

This Series 2010-3 Letter of Credit sets forth in full the undertaking of the Series 2010-3 Letter of Credit Provider, and such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein, except only the certificates and the drafts referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except for such certificates and such drafts and the ISP98 (defined below).

 

This Series 2010-3 Letter of Credit is subject to the International Standby Practice, ICC Publication No. 590 (the “ISP98”), and, as to matters not covered by the ISP98, shall be governed by the laws of the State of New York, including, the Uniform Commercial Code as in effect in the State of New York.

 

Communications with respect to this Series 2010-3 Letter of Credit shall be in writing and shall be addressed to the Series 2010-3 Letter of Credit Provider at the Series 2010-3 Letter of Credit Provider’s Office, specifically referring to the number of this Series 2010-3 Letter of Credit.

 

 

	
  

	
Very truly yours,

 

 

	
  

	
DEUTSCHE BANK TRUST COMPANY 

  AMERICAS, as the Series 2010-3 Letter of 

  Credit Provider

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

  

  

  

ANNEX A

 

CERTIFICATE OF CREDIT DEMAND

 

Deutsche Bank Trust Company Americas

60 Wall Street

New York, New York 10005

Telecopier:  (212) 797-0403

 

Attention:  Global Loan Operations, Standby Letter of Credit Unit

 

Certificate of Credit Demand under the Irrevocable Letter of Credit No. S-[____] (the “Series 2010-3 Letter of Credit”; the terms defined therein and not otherwise defined herein being used herein as therein defined), dated as of March [__], 2011, issued by Deutsche Bank Trust Company Americas, as the Series 2010-3 Letter of Credit Provider, in favor of Deutsche Bank Trust Company Americas, as the Trustee.

 

The undersigned, a duly authorized officer of the Trustee, hereby certifies to the Series 2010-3 Letter of Credit Provider as follows:

 

1.  Deutsche Bank Trust Company Americas is the Trustee under the Series 2010-3 Supplement referred to in the Series 2010-3 Letter of Credit.

 

2.  As of the date of this certificate, there exist [Series 2010-3 Lease Payment Losses (as such term is defined in the Series 2010-3 Supplement referred to in the Series 2010-3 Letter of Credit) allocated to making a drawing under the Series 2010-3 Letter of Credit pursuant to Sections 4.7(a)(iii)(A), (b)(iii)(A) or (c)(iii)(A) of such Series 2010-3 Supplement]1 [an amount due and payable by Dollar Thrifty Automotive Group, Inc., a Delaware corporation (“DTAG”), under the Demand Note (the “Demand Note”) issued by DTAG to Rental Car Finance Corp. pursuant to Section 4.15(a) of the Series 2010-3 Supplement has not been deposited into the Series 2010-3 Collection Account (as defined in the Series 2010-3 Supplement referred to in the Series 2010-3 Letter of Credit)]2 in the amount of $___________.

 

3.  The Trustee is making a drawing under the Series 2010-3 Letter of Credit [as required by Section 4.14(b) of the Series 2010-3 Supplement for an amount equal to $___________, which amount is equal to the lesser of (i) the Series 2010-3 Lease Payment Losses (as defined in the Series 2010-3 Supplement) allocated to making a drawing under the Series 2010-3 Letter of Credit pursuant to Sections 4.7(a)(iii)(A), 4.7(b)(iii)(A) or 4.7(c)(iii)(A), as applicable, of the Series 2010-3 Supplement, and (ii) the amount available to be drawn on the Series 2010-3 Letter of Credit on the date of this certificate]3 [as required by Section 4.15(b) of the Series 2010-3 Supplement for an amount equal to $_________, which amount is equal to the

 

______________________________

  

	
1

	
Include this text if Credit Demand is pursuant to Section 4.14(b) of the Series 2010-3 Supplement.

 

	
2

	
Include this text if Credit Demand is pursuant to Section 4.15(b) of the Series 2010-3 Supplement.

 

	
3

	
Include this text if Credit Demand is pursuant to Section 4.14(b) of the Series 2010-3 Supplement.

 

 

  

  

  

Annex A

Page A-2

 

lesser of (i) the least of (A) that portion of the amount demanded under the Demand Note (as defined in the Series 2010-3 Supplement) as specified in Section 4.15(a) of the Series 2010-3 Supplement that has not been deposited into the Series 2010-3 Collection Account (as defined in the Series 2010-3 Supplement) as of 10:00 a.m. (New York City time) on the date of this certificate, in the case where this certificate is being provided pursuant to Section 4.15(b) of the Series 2010-3 Supplement as a result of the circumstance described in Section 4.15(b)(x) of the Series 2010-3 Supplement, (B) the amount of the stayed demand for payment in the case where this certificate is being provided pursuant to Section 4.15(b) of the Series 2010-3 Supplement as a result of the circumstance described in Section 4.15(b)(y) of the Series 2010-3 Supplement or (C) the amount avoided and recovered in the case where this certificate is being provided pursuant to Section 4.15(b) of the Series 2010-3 Supplement as a result of the circumstance described in Section 4.15(b)(z) of the Series 2010-3 Supplement and (ii) Series 2010-3 Letter of Credit Amount]4 (the “Series 2010-3 LOC Credit Disbursement”).  The Series 2010-3 LOC Credit Disbursement does not exceed the amount that is available to be drawn by the Trustee under the Series 2010-3 Letter of Credit on the date of this certificate.

 

4.  The amount of the draft shall be delivered pursuant to the following instructions:

 

[insert payment instructions (including payment date) for wire to Deutsche Bank Trust Company Americas, as Trustee].

 

5.  The Trustee acknowledges that, pursuant to the terms of the Series 2010-3 Letter of Credit, upon the Series 2010-3 Letter of Credit Provider honoring the draft accompanying this certificate, the Series 2010-3 Letter of Credit Amount shall be automatically decreased by an amount equal to such draft.

 

IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate on this _____ day of ____________, ___.

 

 

	
  

	
DEUTSCHE BANK TRUST COMPANY 

  AMERICAS, as Trustee

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

______________________________

  

	
4

	
Include this text if Credit Demand is pursuant to Section 4.15(b) of the Series 2010-3 Supplement.

 

 

  

  

  

ANNEX B

 

CERTIFICATE OF TERMINATION DEMAND

 

Deutsche Bank Trust Company Americas

60 Wall Street

New York, New York 10005

Telecopier:  (212) 797-0403

 

Attention:  Global Loan Operations, Standby Letter of Credit Unit

 

Certificate of Termination Demand under the Irrevocable Letter of Credit No. S-[_____] (the “Series 2010-3 Letter of Credit”; the terms defined therein and not otherwise defined herein being used herein as therein defined), dated as of March [__], 2011, issued by Deutsche Bank Trust Company Americas, as the Series 2010-3 Letter of Credit Provider, in favor of Deutsche Bank Trust Company Americas, as the Trustee.

 

The undersigned, a duly authorized officer of the Trustee, hereby certifies to the Series 2010-3 Letter of Credit Provider as follows:

 

1.  Deutsche Bank Trust Company Americas is the Trustee under the Series 2010-3 Supplement referred to in the Series 2010-3 Letter of Credit.

 

2.  Pursuant to Section 4.16 of the Series 2010-3 Supplement, the Trustee, in its capacity as such, is making a drawing in the amount (the “Termination Demand Amount”) equal to the lesser of (A) the Series 2010-3 Invested Amount (as defined in the Series 2010-3 Supplement) as of the date of this certificate and (B) the Series 2010-3 Letter of Credit Amount as in effect on the date of this certificate.

 

3.  The amount of the draft accompanying this certificate is $_________ which is equal to the Termination Demand Amount as of the date hereof.  The Termination Demand Amount does not exceed the amount that is available to be drawn by the Trustee under the Series 2010-3 Letter of Credit on the date of this certificate.

 

4.  The amount of the draft shall be delivered pursuant to the following instructions:

 

[insert payment instructions (including payment date) for wire to Deutsche Bank Trust Company Americas, as Trustee]

 

5.  The Trustee acknowledges that, pursuant to the terms of the Series 2010-3 Letter of Credit, upon the Series 2010-3 Letter of Credit Provider honoring the draft accompanying this certificate, the Series 2010-3 Letter of Credit Amount shall automatically be reduced to zero and the Series 2010-3 Letter of Credit shall terminate and be immediately returned to the Series 2010-3 Letter of Credit Provider.

 

  

  

  

Annex B

Page B-2

 

IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate on this _____ day of _______________, ____.

 

	
  

	
DEUTSCHE BANK TRUST COMPANY 

  AMERICAS, as Trustee

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

  

  

  

ANNEX C

 

CERTIFICATE OF REINSTATEMENT OF

SERIES 2010-3 LETTER OF CREDIT AMOUNT

 

Deutsche Bank Trust Company Americas

60 Wall Street

New York, New York 10005

Telecopier:  (212) 797-0403

 

Attention:  Global Loan Operations, Standby Letter of Credit Unit

 

Certificate of Reinstatement of Series 2010-3 Letter of Credit Amount under the Irrevocable Letter of Credit No. S-[____] (the “Series 2010-3 Letter of Credit”; the terms defined therein and not otherwise defined herein being used herein as therein defined), dated as of March [__], 2011, issued by Deutsche Bank Trust Company Americas, as the Series 2010-3 Letter of Credit Provider, in favor of Deutsche Bank Trust Company Americas, as the Trustee.

 

The undersigned, a duly authorized officer of Dollar Thrifty Automotive Group, Inc., hereby certifies to the Series 2010-3 Letter of Credit Provider as follows:

 

1.  As of the date of this certificate, the Series 2010-3 Letter of Credit Provider has been reimbursed in full by [                     ] in the amount of $ [                     ] in respect of the Credit Demand made on______________.

 

2.  As of the date of this certificate, no Event of Bankruptcy with respect to Dollar Thrifty Automotive Group, Inc. (“DTAG”), DTG Operations, Inc. (“DTG Operations”), or any other Lessee has occurred and is continuing. “Event of Bankruptcy”, with respect to DTAG, DTG Operations, or any other Lessee, means (a) a case or other proceeding shall be commenced, without the application or consent of such person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or readjustment of debts of such person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for such person or all or any substantial part of its assets, or any similar action with respect to such person under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts, and any such case or proceeding shall continue undismissed, or unstayed and in effect, for a period of 60 consecutive days; or an order for relief in respect of such person shall be entered in an involuntary case under The Bankruptcy Reform Act of 1978, as amended from time to time, and as codified as 11 U.S.C. Section 101 et. seq., (the “Bankruptcy Code”) or any other similar law now or hereafter in effect; or (b) such person shall commence a voluntary case or other proceeding under the Bankruptcy Code or any applicable insolvency, reorganization, debt arrangement, dissolution or other similar law now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) for such person or for any substantial part of its property, or shall make any general assignment for the benefit of creditors; or (c) a corporation or similar entity or its board of directors shall vote to implement any of the actions set forth in the preceding clause (b).

 

  

  

  

Annex C

Page C-2

 

3.  Accordingly, pursuant to the terms and conditions of the Series 2010-3 Letter of Credit, the Series 2010-3 Letter of Credit Amount is hereby reinstated in the amount of $[                    ] so that the Series 2010-3 Letter of Credit Amount after taking into account such reinstatement is in an amount equal to $[                    ].

 

IN WITNESS WHEREOF, Dollar Thrifty Automotive Group, Inc. has executed and delivered this certificate on this ____ day of __________, ____.

 

 

	
  

	
DOLLAR THRIFTY AUTOMOTIVE GROUP, 

  INC.

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

  

  

  

ANNEX D

 

NOTICE OF REDUCTION OF SERIES 2010-3 LETTER OF CREDIT AMOUNT

 

Deutsche Bank Trust Company Americas

60 Wall Street

New York, New York 10005

Telecopier:  (212) 797-0403

 

Attention:  Global Loan Operations, Standby Letter of Credit Unit

 

Notice of Reduction of Series 2010-3 Letter of Credit Amount under the Irrevocable Letter of Credit No. S-[____] (the “Series 2010-3 Letter of Credit”; the terms defined therein and not otherwise defined herein being used herein as therein defined), dated as of March [__], 2011, issued by Deutsche Bank Trust Company Americas, as the Series 2010-3 Letter of Credit Provider, in favor of Deutsche Bank Trust Company Americas, as the Trustee.

 

The undersigned, a duly authorized officer of the Trustee, hereby notifies the Series 2010-3 Letter of Credit Provider as follows:

 

1.  The Trustee has received a notice pursuant to the Enhancement Letter of Credit Application and Agreement authorizing it to request a reduction of the Series 2010-3 Letter of Credit Amount to $___________ and is delivering this notice in accordance with the terms of the Enhancement Letter of Credit Application and Agreement.

 

2.  By its acknowledgment and agreement below, the Series 2010-3 Letter of Credit Provider acknowledges and agrees that the aggregate maximum amount of the Series 2010-3 Letter of Credit is reduced to $___________from $___________ pursuant to and in accordance with the terms and provisions of the Series 2010-3 Letter of Credit and, that the reference in the first paragraph of the Series 2010-3 Letter of Credit to “______________________ ($___________)” is amended to read “______________________ ($___________)”.

 

3.  This request, upon your acknowledgment and agreement set forth below, shall constitute an amendment to the Series 2010-3 Letter of Credit and shall form an integral part thereof and confirms that all other terms of the Series 2010-3 Letter of Credit remain unchanged.

 

4.  The Series 2010-3 Letter of Credit Provider is requested to execute and deliver its acknowledgment and agreement to this notice to the Trustee in the manner provided in Section 4.4 of the Enhancement Letter of Credit Application and Agreement.

 

  

  

  

Annex D

Page D-2

 

IN WITNESS WHEREOF, the Trustee has executed and delivered this certificate on this ____ day of _____________, ____.

 

	
  

	
DEUTSCHE BANK TRUST COMPANY 

  AMERICAS, as Trustee

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
ACKNOWLEDGED AND AGREED:

 

 

	
  

	
DEUTSCHE BANK TRUST COMPANY 

  AMERICAS, as Series 2010-3 Letter of 

  Credit Provider

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

  

  

  

ANNEX E

 

NOTICE OF INCREASE OF SERIES 2010-3 LETTER OF CREDIT AMOUNT

 

Deutsche Bank Trust Company Americas, as Trustee

60 Wall Street

New York, New York 10005

Telecopier:  (212) 553-2462

 

Attention:  Corporate Trust Division

 

Notice of Increase of Series 2010-3 Letter of Credit Amount under the Irrevocable Letter of Credit No. S-[_____] (the “Series 2010-3 Letter of Credit”; the terms defined therein and not otherwise defined herein being used herein as therein defined), dated as of March [__], 2011, issued by Deutsche Bank Trust Company Americas, as the Series 2010-3 Letter of Credit Provider, in favor of Deutsche Bank Trust Company Americas, as the Trustee.

 

The undersigned, duly authorized officers of the Series 2010-3 Letter of Credit Provider, hereby notify the Trustee as follows:

 

1.  The Series 2010-3 Letter of Credit Provider has received a request from DTG Operations, Inc. to increase the Series 2010-3 Letter of Credit Amount by $________, and the Series 2010-3 Letter of Credit Provider is permitted to increase the Series 2010-3 Letter of Credit Amount by such amount under the Credit Agreement defined in the Enhancement Letter of Credit Application and Agreement.

 

2.  Upon your acknowledgment set forth below, the aggregate maximum amount of the Series 2010-3 Letter of Credit is increased to $________from $________ pursuant to and in accordance with the terms and provisions of the Series 2010-3 Letter of Credit and that the reference in the first paragraph of the Series 2010-3 Letter of Credit to “________________ ($________)” is amended to read “________________ ($________)”.

 

3.  This notice, upon your acknowledgment set forth below, shall constitute an amendment to the Series 2010-3 Letter of Credit and shall form an integral part thereof and confirms that all other terms of the Series 2010-3 Letter of Credit remain unchanged.

 

4.  The Trustee is requested to execute and deliver its acknowledgment and acceptance to this notice to the Series 2010-3 Letter of Credit Provider, in the manner provided in Section 4.4 of the Enhancement Letter of Credit Application and Agreement.

 

  

  

  

Annex E

Page E-2

 

IN WITNESS WHEREOF, the Series 2010-3 Letter of Credit Provider has executed and delivered this certificate on this ____ day of __________, _____.

 

	
  

	
DEUTSCHE BANK TRUST COMPANY 

  AMERICAS, as the Series 2010-3 Letter of 

  Credit Provider

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
ACKNOWLEDGED:

 

 

	
  

	
DEUTSCHE BANK TRUST COMPANY 

  AMERICAS, as Trustee

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

  

  

  

ANNEX F

 

INSTRUCTION TO TRANSFER

 

Deutsche Bank Trust Company Americas

60 Wall Street

New York, New York 10005

Telecopier:  (212) 797-0403

 

Attention:  Global Loan Operations, Standby Letter of Credit Unit

 

Re:  Irrevocable Letter of Credit No. S-[_____]

 

Ladies and Gentlemen:

 

For value received, the undersigned beneficiary hereby irrevocably transfers to:

 

_________________

 

[Name of Transferee]

 

_______________

 

[Address]

 

all rights of the undersigned beneficiary to draw under the above-captioned letter of credit (the “Series 2010-3 Letter of Credit”) issued by the Series 2010-3 Letter of Credit Provider named therein in favor of the undersigned.  The transferee has succeeded the undersigned as Trustee under the Series 2010-3 Supplement (as defined in the Series 2010-3 Letter of Credit).

 

By this transfer, all rights of the undersigned beneficiary in the Series 2010-3 Letter of Credit are transferred to the transferee and the transferee shall hereafter have the sole rights as beneficiary thereof; provided, however, that no rights shall be deemed to have been transferred to the transferee until such transfer complies with the requirements of the Series 2010-3 Letter of Credit pertaining to transfers.

 

The Series 2010-3 Letter of Credit is returned herewith and in accordance therewith we ask that this transfer be effective and that the Series 2010-3 Letter of Credit Provider transfer the Series 2010-3 Letter of Credit to our transferee and that the Series 2010-3 Letter of Credit Provider endorse the Series 2010-3 Letter of Credit returned herewith in favor of the transferee or, if requested by the transferee, issue a new irrevocable letter of credit in favor of the transferee with provisions consistent with the Series 2010-3 Letter of Credit.

 

  

  

  

Annex F

Page F-2

 

 

	
  

	

Very truly yours,

 

 

	
  

	
DEUTSCHE BANK TRUST COMPANY 

  AMERICAS, as Trustee

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

  

  

  

EXHIBIT B

to

THE ENHANCEMENT LETTER OF CREDIT

APPLICATION AND AGREEMENT

 

FORM OF AFFILIATE JOINDER IN ENHANCEMENT LETTER OF

CREDIT APPLICATION AND AGREEMENT

 

THIS AFFILIATE JOINDER IN ENHANCEMENT LETTER OF CREDIT APPLICATION AND AGREEMENT (this “Joinder”) is executed as of _____________ ____, _____, by _______________, a ____________________________________ (“Joining Party”), and delivered to each of Deutsche Bank Trust Company Americas, as the Series 2010-3 Letter of Credit Provider (in such capacity, the “Series 2010-3 Letter of Credit Provider”) and Deutsche Bank Trust Company Americas, as the Trustee (in such capacity, the “Trustee”), pursuant to that certain Enhancement Letter of Credit Application and Agreement, dated as of March 15, 2011 (as amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms thereof, the “Enhancement Letter of Credit Application and Agreement”), among the Series 2010-3 Letter of Credit Provider, DTG Operations, Inc., any additional Subsidiaries of Dollar Thrifty Automotive Group, Inc. from time to time becoming Lessees thereunder, Rental Car Finance Corp. and Dollar Thrifty Automotive Group, Inc.  Capitalized terms used herein but not defined herein shall have the meanings provided for in the Enhancement Letter of Credit Application and Agreement.

 

RECITALS:

 

WHEREAS, the Joining Party is a direct or indirect Subsidiary of DTAG; and

 

WHEREAS, the Joining Party desires to become a “Lessee” under and pursuant to Section 4.17 of the Enhancement Letter of Credit Application and Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Joining Party, the Joining Party agrees as follows:

 

A G R E E M E N T :

 

1.  The Joining Party hereby represents and warrants to and in favor of the Series 2010-3 Letter of Credit Provider and the Trustee that (i) the Joining Party is a direct or indirect Subsidiary of DTAG, (ii) all of the conditions required to be satisfied pursuant to Section 4.17 of the Enhancement Letter of Credit Application and Agreement in respect of the Joining Party becoming a Lessee thereunder have been satisfied and (iii) all of the representations and warranties contained in Section 3.1 of the Enhancement Letter of Credit Application and Agreement with respect to the Lessees are true and correct as applied to the Joining Party as of the date hereof.

 

2.  The Joining Party hereby agrees to assume all of the obligations of a “Lessee” under the Enhancement Letter of Credit Application and Agreement and agrees to be bound by all of the terms, covenants and conditions therein.

 

  

  

  

Exhibit B

to

The Enhancement Letter of Credit

Application and Agreement

Page 2

 

3.  By its execution and delivery of this Joinder, the Joining Party hereby becomes a Lessee for all purposes under the Enhancement Letter of Credit Application and Agreement.  By its execution and delivery of this Joinder, DTAG acknowledges that the Joining Party is a Lessee for all purposes under the Enhancement Letter of Credit Application and Agreement.

 

IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be duly executed as of the day and year first above written.

 

 

	
  

	
[Name of Joining Party]

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

	
  

	
Accepted and Acknowledged by:

 

 

	
  

	
DOLLAR THRIFTY AUTOMOTIVE GROUP, 

  INC.

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

 

 

  

  

  

EXHIBIT C

to

THE ENHANCEMENT LETTER OF CREDIT

APPLICATION AND AGREEMENT

 

REQUEST FOR REDUCTION OF

SERIES 2010-3 LETTER OF CREDIT AMOUNT

 

Deutsche Bank Trust Company Americas, as Trustee

60 Wall Street

New York, New York 10005

Telecopier:  (212) 553-2462

 

Attention:  Corporate Trust Division

 

Request for Reduction of Series 2010-3 Letter of Credit Amount under the Enhancement Letter of Credit Application and Agreement, dated as of March 15, 2011 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof as of the date hereof, the “Enhancement Letter of Credit Application and Agreement”; the terms defined therein and not otherwise defined herein being used herein as therein defined), among DTG Operations, Inc., those additional Subsidiaries of Dollar Thrifty Automotive Group, Inc. from time to time becoming parties thereto, Rental Car Finance Corp., Dollar Thrifty Automotive Group, Inc. and Deutsche Bank Trust Company Americas, as the Series 2010-3 Letter of Credit Provider.

 

The undersigned, a duly authorized officer of Dollar Thrifty Automotive Group, Inc., individually and on behalf of the Lessees, hereby certifies to Deutsche Bank Trust Company Americas in its capacity as the Trustee under the Series 2010-3 Supplement referred to in the Enhancement Letter of Credit Application and Agreement (the “Trustee”) as follows:

 

1.  The Series 2010-3 Letter of Credit Amount as of the date of this request prior to giving effect to the reduction of the Series 2010-3 Letter of Credit Amount requested in paragraph 2 of this request is $__________.

 

2.  The Trustee is hereby requested pursuant to Section 2.1 (a) of the Enhancement Letter of Credit Application and Agreement to execute and deliver to the Series 2010-3 Letter of Credit Provider a Notice of Reduction of Series 2010-3 Letter of Credit Amount substantially in the form of Annex D to the Series 2010-3 Letter of Credit (the “Notice of Reduction”) for a reduction in the Series 2010-3 Letter of Credit Amount by an amount equal to $___________.  The Trustee is requested to execute and deliver the Notice of Reduction promptly following its receipt of this request, and in no event more than two (2) Business Days following the date of its receipt of this request (as required pursuant to Section 2.1(a) of the Enhancement Letter of Credit Application and Agreement), and to provide for the reduction pursuant to the Notice of Reduction to be as of ________, ________.  The undersigned understands that the Trustee will be relying on the contents hereof.  The undersigned further understands that the Trustee shall not be liable to the undersigned for any failure to transmit (or any delay in transmitting) the Notice of Reduction (including any fees and expenses attributable to the Series 2010-3 Letter of Credit Amount not being reduced in accordance with this paragraph) to the extent such failure (or delay) does not result from the gross negligence or willful misconduct of the Trustee.

 

  

  

  

Exhibit C

to

The Enhancement Letter of Credit

Application and Agreement

Page 2

 

3.  To the best of the knowledge of the undersigned, (i) the Series 2010-3 Letter of Credit Amount will be $____________, (ii) the Series 2010-3 Available Subordinated Amount will be $____________, (iii) the Series 2010-3 Cash Liquidity Amount will be $____________ and (iv) the Enhancement Amount will be $____________, in each case as of the date of the reduction requested in paragraph 2 of this request.

 

4.  The Series 2010-3 Letter of Credit Amount after giving effect to the reduction requested in paragraph 2 of this request will not cause (i) the Series 2010-3 Letter of Credit Amount to be less than the Series 2010-3 Minimum Letter of Credit Amount, (ii) the Series 2010-3 Available Subordinated Amount to be less than the Series 2010-3 Minimum Subordinated Amount, (iii) the Series 2010-3 Enhancement Amount to be less than the Series 2010-3 Minimum Enhancement Amount, in each case as of the date the reduction requested in paragraph 2 of this request or (iv) the Series 2010-3 Liquidity Amount to be less than the Series 2010-3 Minimum Liquidity Amount.

 

5.  The undersigned acknowledges and agrees that the execution and delivery of this request by the undersigned constitutes a representation and warranty by the undersigned to each of the Series 2010-3 Letter of Credit Provider and the Trustee that, as of the date on which the Series 2010-3 Letter of Credit Amount is reduced by the amount set forth in paragraph 2 of this request, each of the statements set forth in this request is true and correct to the best of the knowledge of the undersigned.

 

6.  The undersigned agrees that if on or prior to the date as of which the Series 2010-3 Letter of Credit Amount is reduced by the amount set forth in paragraph 2 of this request the undersigned obtains knowledge that any of the statements set forth in this request is not true and correct or will not be true and correct after giving effect to such reduction, the undersigned shall immediately so notify each of the Series 2010-3 Letter of Credit Provider and the Trustee by telephone and in writing by telefacsimile in the manner provided in Section 4.4 of the Enhancement Letter of Credit Application and Agreement and the request set forth herein to reduce the Series 2010-3 Letter of Credit Amount shall be deemed canceled upon receipt by each of the Series 2010-3 Letter of Credit Provider and the Trustee of such notice in writing.

 

  

  

  

Exhibit C

to

The Enhancement Letter of Credit

Application and Agreement

Page 3

 

IN WITNESS WHEREOF, Dollar Thrifty Automotive Group, Inc., individually and on behalf of the Lessees, has executed and delivered this request on this ____ day of __________, ____.

 

 

	
  

	
DOLLAR THRIFTY AUTOMOTIVE GROUP, 

  INC.

 

 

	
  

	
By:____________________________________

	
  

	
Name:

	
  

	
Title:

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