Document:

exhibit4243.htm

EXHIBIT 4.243

 

 

AMENDED AND RESTATED MASTER MOTOR VEHICLE LEASE

AND SERVICING AGREEMENT (GROUP VII)

 

dated as of September 29, 2011

 

among

 

RENTAL CAR FINANCE CORP.

as Lessor,

 

DTG OPERATIONS, INC.,

as Lessee and Servicer,

 

and those Permitted Lessees

from time to time

becoming Lessees and Servicers hereunder

 

 

and

 

DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.

as Guarantor and Master Servicer

 

AS SET FORTH IN SECTION 21 HEREOF, LESSOR HAS ASSIGNED TO THE TRUSTEE (AS DEFINED HEREIN) ALL OF LESSOR’S RIGHT, TITLE AND INTEREST IN AND TO THIS LEASE.  TO THE EXTENT, IF ANY, THAT THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART NO. 1, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE TRUSTEE ON THE SIGNATURE PAGE THEREOF.

 

[THIS IS NOT THE ORIGINAL EXECUTED COUNTERPART NO. 1]

[THIS IS THE ORIGINAL EXECUTED  COUNTERPART NO. 1

(IF BEARING ORIGINAL SIGNATURES)]

 

  

  

  

 

TABLE OF CONTENTS

 

Page

 

	
SECTION 1.

	
CERTAIN DEFINITIONS

	
1

 

	
  

	
1.1

	
Certain Definitions 

	
1

	
  

	
1.2

	
Accounting and Financial Determinations 

	
2

	
  

	
1.3

	
Cross References; Headings 

	
2

	
  

	
1.4

	
Interpretation 2

	
2

 

	
SECTION 2.

	
GENERAL AGREEMENT 

	
3

 

	
  

	
2.1

	
Leasing of Vehicles 

	
3

	
  

	
2.2

	
Right of Lessees to Act as Lessor’s Agent 

	
4

	
  

	
2.3

	
Payment of Purchase Price by Lessor 

	
5

	
  

	
2.4

	
Non-liability of Lessor 

	
5

 

	
SECTION 3.

	
TERM

	
6

 

	
  

	
3.1

	
Vehicle Lease Commencement Date 

	
6

	
  

	
3.2

	
Lease Commencement Date; Lease Expiration Date 

	
6

 

	
SECTION 4.

	
CONDITIONS PRECEDENT

	
6

 

	
  

	
4.1

	
Conditions to Each Lease of Vehicles 

	
6

	
  

	
4.2

	
Additional Conditions to Leases of Refinanced Vehicles 

	
7

 

	
SECTION 5.

	
RENT AND CHARGES 

	
8

 

	
  

	
5.1

	
Payment of Rent 

	
8

	
  

	
5.2

	
Payment of Availability Payment 

	
8

	
  

	
5.3

	
Payment of Monthly Supplemental Payments 

	
9

	
  

	
5.4

	
Payment of Termination Payments, Casualty Payments, and Late Return Payments 

	
9

	
  

	
5.5

	
Late Payment 

	
9

	
  

	
5.6

	
Allocation of Rent and Charges 

	
9

 

	
SECTION 6.

	
INSURANCE

	
9

 

	
  

	
6.1

	
Fleet Insurance 

	
9

	
  

	
6.2

	
Information 

	
9

 

	
SECTION 7.

	
CASUALTY OBLIGATION 

	
10

 

	
SECTION 8.

	
VEHICLE USE 

	
10

 

	
SECTION 9.

	
REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES 

	
11

 

  

i

  

 

	
SECTION 10.

	
MAINTENANCE AND REPAIRS

	
12

 

	
SECTION 11.

	
VEHICLE WARRANTIES

	
12

 

	
SECTION 12.

	
VEHICLE USAGE REQUIREMENTS AND DISPOSITION

	
12

 

	
  

	
12.1

	
Usage 

	
12

	
  

	
12.2

	
Disposition Procedure 

	
12

	
  

	
12.3

	
Termination Payments 

	
13

 

	
SECTION 13.

	
LATE RETURN PAYMENTS

	
13

 

	
SECTION 14.

	
REDESIGNATION OF VEHICLES

	
14

 

	
SECTION 15.

	
GENERAL INDEMNITY

	
15

 

	
  

	
15.1

	
Indemnity of the Lessor 

	
15

	
  

	
15.2

	
Indemnification of the Trustee 

	
16

	
  

	
15.3

	
Reimbursement Obligation by the Lessees 

	
17

	
  

	
15.4

	
Notice to Lessee of Claims 

	
17

	
  

	
15.5

	
Defense of Claims 

	
17

 

	
SECTION 16.

	
ASSIGNMENT

	
17

 

	
SECTION 17.

	
DEFAULT AND REMEDIES THEREFOR

	
18

 

	
  

	
17.1

	
Lease Events of Default 

	
18

	
  

	
17.2

	
Effect of Lease Event of Default 

	
19

	
  

	
17.3

	
Rights of Lessor Upon Lease Event of Default, Liquidation Event of Default or Limited Liquidation Event of Default 

	
19

	
  

	
17.4

	
Certain Rights Upon Liquidation Event of Default, Limited Liquidation Event of Default, Manufacturer Event of Default and Non-Performance of Certain Covenants. 

	
20

	
  

	
17.5

	
Measure of Damages 

	
21

	
  

	
17.6

	
Application of Proceeds 

	
22

	
  

	
17.7

	
Servicer Default 

	
23

 

	
SECTION 18.

	
MANUFACTURER EVENTS OF DEFAULT

	
24

 

	
SECTION 19.

	
CERTIFICATION OF TRADE OR BUSINESS USE

	
26

 

	
SECTION 20.

	
SURVIVAL

	
26

 

	
SECTION 21.

	
RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL AGENT AND TRUSTEE

	
26

 

	
SECTION 22.

	
MODIFICATION AND SEVERABILITY

	
28

 

	
SECTION 23.

	
CERTAIN REPRESENTATIONS AND WARRANTIES

	
28

 

  

ii

  

 

	
  

	
23.1

	
Due Incorporation, Authorization, No Conflicts, Etc. 

	
28

	
  

	
23.2

	
Financial Information; Financial Condition 

	
29

	
  

	
23.3

	
Litigation 

	
29

	
  

	
23.4

	
Liens 

	
29

	
  

	
23.5

	
Necessary Actions 

	
29

	
  

	
23.6

	
Employee Benefit Plans 

	
30

	
  

	
23.7

	
Investment Company Act 

	
30

	
  

	
23.8

	
Regulations T, U and X 

	
30

	
  

	
23.9

	

Business Locations; Trade Names; Principal Places of Business Locations

	
30

	
  

	
23.10

	
Taxes 

	
31

	
  

	
23.11

	
Governmental Authorization 

	
31

	
  

	
23.12

	
Compliance with Laws 

	
31

	
  

	
23.13

	
Eligible Vehicles; Eligible Franchisees 

	
31

	
  

	
23.14

	
Supplemental Documents True and Correct 

	
31

	
  

	
23.15

	
Accuracy of Information 

	
32

 

	
SECTION 24.

	
CERTAIN AFFIRMATIVE COVENANTS

	
32

 

	
  

	
24.1

	
Corporate Existence; Foreign Qualification 

	
32

	
  

	
24.2

	
Books, Records and Inspections 

	
32

	
  

	
24.3

	
Vehicle Disposition Programs 

	
33

	
  

	
24.4

	
Reporting Requirements 

	
33

	
  

	
24.5

	
Taxes and Liabilities 

	
37

	
  

	
24.6

	
Compliance with Laws 

	
38

	
  

	
24.7

	
Maintenance of Separate Existence 

	
38

	
  

	
24.8

	
Master Collateral Agent as Lienholder 

	
38

	
  

	
24.9

	
Maintenance of Property 

	
38

	
  

	
24.10

	
Access to Certain Documentation and Information Regarding the Collateral 

	
38

	
  

	
24.11

	
Maintenance of Credit Enhancement 

	
39

	
  

	
24.12

	
Certain Additional Actions 

	
39

	
  

	
24.13

	
Minimum Depreciation Rate 

	
39

 

	
SECTION 25.

	
CERTAIN NEGATIVE COVENANTS

	
40

 

	
  

	
25.1

	
Mergers, Consolidations 

	
40

	
  

	
25.2

	
Other Agreements 

	
40

	
  

	
25.3

	
Liens 

	
40

	
  

	
25.4

	
Use of Vehicles 

	
41

	
  

	
25.5

	
No Financed Vehicles 

	
41

	
  

	
25.6

	
No Subleased Vehicles 

	
41

 

	
SECTION 26.

	
SERVICING COMPENSATION

	
41

 

	
  

	
26.1

	
Fees. 

	
41

	
  

	
26.2

	
Expenses. 

	
41

 

	
SECTION 27.

	GUARANTY	
42

 

  

iii

  

 

	
  

	
27.1

	
Guaranty 

	
42

	
  

	
27.2

	
Scope of Guarantor’s Liability 

	
42

	
  

	
27.3

	
Lessor’s Right to Amend this Lease 

	
43

	
  

	
27.4

	
Waiver of Certain Rights by Guarantor 

	
43

	
  

	
27.5

	
Lessees’ Obligations to Guarantor and Guarantor’s Obligations to Lessees Subordinated 

	
44

	
  

	
27.6

	
Guarantor to Pay Lessor’s Expenses 

	
45

	
  

	
27.7

	
Reinstatement 

	
45

	
  

	
27.8

	
Pari Passu Indebtedness 

	
45

	
  

	
27.9

	
Tax Indemnity 

	
46

	
  

	
27.10

	
Third-Party Beneficiaries 

	
46

 

	
SECTION 28.

	ADDITIONAL LESSEES	
46

 

	
  

	
28.1

	
Additional Lessees 

	
46

 

	
SECTION 29.

	BANKRUPTCY PETITION AGAINST LESSOR	
47

 

	
SECTION 30.

	SUBMISSION TO JURISDICTION	
48

 

	
SECTION 31.

	GOVERNING LAW	
48

 

	
SECTION 32.

	JURY TRIAL	
49

 

	
SECTION 33.

	NOTICES	
49

 

	
SECTION 34.

	HEADINGS	
49

 

	
SECTION 35.

	EXECUTION IN COUNTERPARTS	
50

 

	
SECTION 36.

	EFFECTIVENESS	
50

 

  

iv

  

 

APPENDICES, ANNEXES, SCHEDULES AND ATTACHMENTS

 

 

	Appendix 1 	Definitions List
	 	 
	Annex A	Operating Lease
	Annex B	Financing Lease
	 	 
	Schedule 1 	Litigation Claims 
	Schedule 2	[Reserved]
	Schedule 3	Business Locations
	Schedule 4	Liens
	 	 
	ATTACHMENT A-1	Refinancing Schedule
	ATTACHMENT A-2 	Vehicle Acquisition Schedule 
	ATTACHMENT B 	Form of Power of Attorney
	ATTACHMENT C 	Form of Certification of Trade or Business Use 
	ATTACHMENT D 	Form of Affiliate Joinder in Lease 
	ATTACHMENT E 	Form of Annual Certificate 
	ATTACHMENT F 	Form of Sublease 

 

 

 

v

 

 

MASTER MOTOR VEHICLE LEASE

AND SERVICING AGREEMENT

 

This Amended and Restated Master Motor Vehicle Lease and Servicing Agreement (this “Base Lease” and, as supplemented by the Lease Annexes, this “Agreement” or “Lease”), dated as of September 29, 2011, is by and among RENTAL CAR FINANCE CORP., a special purpose Oklahoma corporation (the “Lessor” or “RCFC”), DTG OPERATIONS, INC., an Oklahoma corporation (“DTG Operations”), as lessee and servicer, and those Permitted Lessees (as defined herein) from time to time becoming Lessees hereunder pursuant to Section 28 hereof (each, an “Additional Lessee”), as lessee and servicer (DTG Operations and the Additional Lessees, in their respective capacities as lessees, each a “Lessee” and, collectively, the “Lessees”, and, in their respective capacities as servicers, each a “Servicer” and, collectively, the “Servicers”), and DOLLAR THRIFTY AUTOMOTIVE GROUP, INC., a  Delaware corporation (“DTAG”), as master servicer (in such capacity, the “Master Servicer”) and as guarantor (in such capacity, the “Guarantor”).

 

W I T N E S S E T H:

 

WHEREAS, the Lessor, the Lessee, the Servicers, the Master Servicer and the Guarantor have entered into a Master Motor Vehicle Lease and Servicing Agreement, dated as of October 28, 2010 (the “Prior Agreement”);

 

WHEREAS, the Lessor, the Lessee, the Servicers, the Master Servicer and the Guarantor desire to amend and restate the Prior Agreement on the terms set forth herein;

 

WHEREAS, the Lessor (such capitalized term, together with all other capitalized terms used herein, shall have the meaning assigned thereto in Section 1) intends to purchase, finance and refinance the purchase of, Eligible Vehicles from one or more Manufacturers with the proceeds obtained from the issuance by the Lessor of its Rental Car Asset Backed Notes, Series 2010-3, pursuant to the Base Indenture and the Series 2010-3 Supplement thereto referred to below, and any additional Series of Notes identified in the related Series Supplement as a Group VII Series of Notes; and

 

WHEREAS, the Lessor desires to lease to the Lessees, and the Lessees desire to lease from the Lessor, Eligible Vehicles for use in the Lessees’ respective businesses, including subleasing Vehicles to Eligible Franchisees;

 

NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

 

SECTION 1. CERTAIN DEFINITIONS.

 

1.1 Certain Definitions.  As used in this Lease and unless otherwise defined herein or the context requires a different meaning, capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in Appendix 1 hereto.  If a capitalized term is not defined in Appendix 1, such capitalized term shall have the meaning assigned to such term in 

 

  

1

  

 

(a) the Amended and Restated Series 2010-3 Supplement, dated as of September 29, 2011, between RCFC, as issuer, and Deutsche Bank Trust Company Americas, a New York banking corporation, as trustee (in such capacity, the “Trustee”) (as such Series 2010-3 Supplement may be amended, amended and restated, supplemented or otherwise modified and in effect 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, between RCFC and the Trustee (as may be further amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Base Indenture”) and any additional Series Supplement to the Base Indenture relating to a Series of Notes identified in such Series Supplement as a Group VII Series of Notes (any such Series Supplement, as the same may be amended, amended and restated, supplemented or otherwise modified and in effect from time to time, and the Series 2010-3 Supplement, each, a “Group VII Series Supplement”, and any such Group VII Series Supplement together with the Base Indenture, a “Group VII Indenture”) and (b) the Definitions List attached as Schedule 1 to the Base Indenture as in effect as of the date hereof (as such Definitions List may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Definitions List”), as applicable, provided, that any capitalized term used but not defined herein or in Appendix 1 and defined in a Group VII Series Supplement and the Definitions List shall have the meaning set forth in the Group VII Series Supplement.

 

1.2 Accounting and Financial Determinations.  Where the character or amount of any asset or liability or item of income or expense is required to be determined, or any accounting computation is required to be made, for the purpose of this Lease, such determination or calculation shall be made, to the extent applicable and except as otherwise specified in this Lease, in accordance with GAAP.  When used herein, the term “financial statement” shall include the notes and schedules thereto.

 

1.3 Cross References; Headings.  The words “hereof”, “herein” and “hereunder” and words of a similar import when used in this Lease shall refer to this Lease as a whole and not to any particular provision of this Lease.  Appendix, Annex, Section, Schedule, Exhibit and Attachment references contained in this Lease are references to Appendices, Annexes, Sections, Schedules, Exhibits and Attachments in or to this Lease unless otherwise specified.  Any reference in any Section or definition to any clause is, unless otherwise specified, to such clause of such Section or definition.  The various headings in this Lease are inserted for convenience only and shall not affect the meaning or interpretation of this Lease or any provision hereof.

 

1.4 Interpretation.  In this Lease, unless the context otherwise requires:

 

(a) the singular includes the plural and vice versa;

 

(b) reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Lease, and reference to any Person in a particular capacity refers only to such Person in such capacity;

 

  

2

  

 

(c) reference to any agreement means such agreement as may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, and in effect from time to time;

 

(d) reference to any gender includes the other gender;

 

(e) reference to any Requirement of Law means such Requirement of Law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time;

 

(f) “including” (and, with correlative meaning, “include”) means including without limiting the generality of any description preceding such term;

 

(g) “or” is not exclusive; and

 

(h) with respect to the determination of any period of time, “from” means “from and including” and “to” and “through” mean “to but excluding”.

 

SECTION 2. GENERAL AGREEMENT.  (a)  As specified in the Lease Annexes, the Lessees and the Lessor intend that this Lease be (i) an operating lease with respect to the Acquired Vehicles and (ii) a financing arrangement with respect to the Financed Vehicles.

 

(b)           If, notwithstanding the intent of the parties to this Lease, this Lease is deemed by any court, tribunal, arbitrator or other adjudicative authority in any proceeding (each, a “Court”) to constitute a financing arrangement or otherwise not to constitute a “true lease” with respect to the Acquired Vehicles, then it is the intention of the parties that this Lease together with the Master Collateral Agency Agreement, as such agreements apply to the Acquired Vehicles, shall constitute a security agreement under applicable law (and such Acquired Vehicles shall be deemed to be Lessee Grantor Master Collateral), and it is the intention of the parties that this Lease together with the Master Collateral Agency Agreement, as such agreements apply to the Financed Vehicles, shall in all events constitute a security agreement under applicable law.  Each Lessee hereby acknowledges that it has granted to the Master Collateral Agent, pursuant to the Master Collateral Agency Agreement, for the benefit of the Trustee, a first priority security interest in all of such Lessee’s right, title and interest in and to the Lessee Grantor Master Collateral (as defined therein) as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all of the obligations and liabilities of such Lessee to the Lessor and the Trustee, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred (including interest accruing after the Lease Expiration Date and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding), which may arise under, out of, or in connection with, this Lease and any other document made, delivered or given in connection herewith, whether on account of rent, principal, interest, reimbursement obligations, fees, indemnities, costs, or expenses (including all fees and disbursements of counsel to the Lessor or the Trustee that are required to be paid by such Lessee pursuant to the terms hereof).

 

2.1 Leasing of Vehicles.  Subject to the terms and conditions hereof, the Lessor agrees to lease to each Lessee and each Lessee agrees to lease from the Lessor each Acquired Vehicle or Financed Vehicle identified in Vehicle order summaries 

 

  

3

  

 

(each, a “Vehicle Order”) produced from time to time by such Lessee, listing Eligible Vehicles ordered by the Lessee for itself or as agent for the Lessor, pursuant to the terms of any applicable Eligible Vehicle Disposition Programs or otherwise (including Eligible Vehicles refinanced or redesignated from another Segregated Group of Collateral pursuant to Section 2.3 of the Master Collateral Agency Agreement).  The Lessor shall, subject to Section 4 and to compliance with the terms of each Group VII Indenture, make available to the Lessees under this Lease financing for Financed Vehicles in an aggregate amount, and Acquired Vehicles for lease to the Lessees hereunder in an aggregate Net Book Value, which collectively shall not exceed the Maximum Lease Commitment.  The applicable Lessee shall make available to the Lessor (a) in the case of (i) the refinancing of any Financed Vehicle hereunder pursuant to Section 2.3 of the Master Collateral Agency Agreement  (collectively, (including, without limitation, any Vehicles previously subject to any other Master Lease and refinanced pursuant to such Master Lease), the “Refinanced Vehicles”), and/or (ii) the refinancing of Eligible Receivables, a schedule as set forth in Attachment A-1 hereto containing information concerning the Refinanced Vehicles and/or the Eligible Receivables of a scope agreed upon by the Lessor and such Lessee (a “Refinancing Schedule”), and (b) in the case of all other Vehicles (including Acquired Vehicles refinanced or redesignated pursuant to Section 2.3 of the Master Collateral Agency Agreement), a schedule containing the information with respect to the Vehicles included within the Vehicle Order for such Vehicle as is set forth in Attachment A-2 hereto, or in such form as is otherwise requested by the Lessor (each, a “Vehicle Acquisition Schedule”).  In addition, each Lessee shall provide such other information regarding such Vehicles as the Lessor may reasonably require from time to time.  The Lessor shall lease to the Lessees, and the Lessees shall lease from the Lessor, only Vehicles that are Eligible Vehicles.  This Lease, together with the Vehicle Disposition Programs and other incentive programs relating to the Vehicles and any other related documents attached to this Lease or submitted with a Vehicle Order or Refinancing Schedule (collectively, the “Supplemental Documents”), will constitute the entire agreement regarding the leasing of Vehicles by the Lessor to the Lessees.

 

2.2 Right of Lessees to Act as Lessor’s Agent.  The Lessor agrees that each Lessee may act as the Lessor’s agent in placing Vehicle Orders on behalf of the Lessor, as well as filing claims on behalf of the Lessor for damage in transit, and other delivery related claims with respect to the Vehicles leased hereunder; provided, however, that the Lessor may hold the applicable Lessee liable for such Lessee’s actions in performing as the Lessor’s agent hereunder.  In addition, the Lessor agrees that each Lessee may make arrangements for delivery of Vehicles to a location selected by such Lessee at such Lessee’s expense.  Each Lessee or any related lessee under a Sublease, as applicable, may accept or reject Eligible Vehicles upon delivery in accordance with such Lessee’s customary business practices, and any Eligible Vehicle, if rejected, will be deemed a Casualty hereunder.  The applicable Lessee, acting as agent for the Lessor, shall be responsible for pursuing any rights of the Lessor with respect to the return of any Eligible Vehicle to the Manufacturer thereof, or the applicable auction or dealer, as applicable, pursuant to the preceding sentence.  Each Lessee agrees that all vehicles ordered as provided herein shall be Eligible Vehicles and shall be ordered utilizing the procedures consistent with the applicable Vehicle Disposition Program or any guidelines of the Manufacturer, auction or dealer, as applicable, for the ordering or purchasing of Non-Program Vehicles, in each case as and to the extent applicable.

 

  

4

  

 

2.3 Payment of Purchase Price by Lessor.  Upon receipt of the Manufacturer’s invoice and certificate of origin in respect of any new Vehicle, or such other customary documentation in respect of any used Vehicle, the Lessor or its agent shall pay or cause to be paid to the auction, the dealer or the related Manufacturer, as applicable, the costs and expenses incurred in connection with the acquisition of such Vehicle under the applicable Eligible Vehicle Disposition Program (in the case of a Program Vehicle) or otherwise (in the case of a Non-Program Vehicle) as established by the invoice of the auction, the dealer or the Manufacturer, as the case may be (the “Initial Acquisition Cost”), for such Vehicle and the applicable Lessee shall pay all applicable costs and expenses of freight, packing, handling, storage, shipment and delivery of such Vehicle to the extent that the same have not been included within the Initial Acquisition Cost; provided, that (i) in the case of any Refinanced Vehicles and/or any Eligible Receivables, the Lessor shall pay to the Master Collateral Agent (x) the aggregate Net Book Value as of the Vehicle Lease Commencement Date of such Refinanced Vehicles, as the case may be on the Vehicle Lease Commencement Date and/or (y) the face amount of the Eligible Receivables being refinanced on the effective date of such refinancing and (ii) in the case of any Acquired Vehicles refinanced or otherwise redesignated pursuant to Section 2.3 of the Master Collateral Agency Agreement, the Lessor and the Master Servicer shall comply with the applicable provisions of Section 2.3 with respect to such Acquired Vehicles.

 

2.4 Non-liability of Lessor.  The Lessor shall not be liable to a Lessee for any failure or delay in obtaining Vehicles or making delivery thereof.  AS BETWEEN THE LESSOR AND THE LESSEES, ACCEPTANCE FOR LEASE OF THE VEHICLES SHALL CONSTITUTE THE APPLICABLE LESSEE’S ACKNOWLEDGMENT AND AGREEMENT THAT THE APPLICABLE LESSEE HAS FULLY INSPECTED SUCH VEHICLES, THAT THE VEHICLES ARE IN GOOD ORDER AND CONDITION AND ARE OF THE MANUFACTURE, DESIGN, SPECIFICATIONS AND CAPACITY SELECTED BY SUCH LESSEE, THAT SUCH LESSEE IS SATISFIED THAT THE SAME ARE SUITABLE FOR ITS USE AND THAT THE LESSOR IS NOT A MANUFACTURER, AN AGENT OF THE MANUFACTURER OR OTHERWISE ENGAGED IN THE SALE OR DISTRIBUTION OF VEHICLES, AND HAS NOT MADE AND DOES NOT HEREBY MAKE ANY REPRESENTATION, WARRANTY OR COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO MERCHANTABILITY, CONDITION, QUALITY, CAPABILITY, WORKMANSHIP, DURABILITY OR SUITABILITY OF SUCH VEHICLES IN ANY RESPECT OR IN CONNECTION WITH OR FOR THE PURPOSES OR USES OF SUCH LESSEE, OR ANY WARRANTY THAT THE LEASED VEHICLES WILL SATISFY THE REQUIREMENTS OF ANY LAW OR ANY CONTRACT SPECIFICATION, OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT THERETO, AND AS BETWEEN THE LESSOR AND SUCH LESSEE, SUCH LESSEE AGREES TO BEAR ALL SUCH RISKS AT ITS SOLE COST AND EXPENSE.  EACH LESSEE SPECIFICALLY WAIVES ALL RIGHTS TO MAKE CLAIMS AGAINST THE LESSOR AND ANY LEASED VEHICLE FOR BREACH OF ANY WARRANTY OF ANY KIND WHATSOEVER, AND EACH LESSEE LEASES THE LEASED VEHICLES “AS IS.”  The Lessor shall not be liable for any failure or delay in delivering any Vehicle ordered for lease pursuant to this Lease, or for any failure to perform any provision hereof, resulting from fire or other casualty, natural disaster, riot, strike or other labor difficulty, governmental regulation or restriction, or any cause beyond the Lessor’s direct control.  

 

  

5

  

 

IN NO EVENT SHALL THE LESSOR BE LIABLE FOR ANY INCONVENIENCES, LOSS OF PROFITS OR ANY OTHER CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES, WHATSOEVER OR HOWSOEVER CAUSED, WHETHER RESULTING FROM ANY DEFECT IN OR ANY THEFT, DAMAGE, LOSS OR FAILURE OF ANY VEHICLE, OR OTHERWISE, AND THERE SHALL BE NO ABATEMENT OF RENT BECAUSE OF THE SAME.

 

SECTION 3. TERM.

 

3.1 Vehicle Lease Commencement Date.  The “Vehicle Lease Commencement Date” shall mean, for each Vehicle, the earlier of (a) the date referenced in the Vehicle Acquisition Schedule or Refinancing Schedule with respect to such Vehicle, and (b) other than in the case of Acquired Vehicles refinanced or otherwise redesignated pursuant to Section 2.3 of the Master Collateral Agency Agreement, the date that funds are expended by the Lessor to acquire or finance the acquisition of such Vehicle (with respect to such Vehicle, the “Vehicle Funding Date”).  A vehicle shall be deemed hereunder to be a Vehicle leased under this Lease on each day during the period (the “Vehicle Term”) from and including the Vehicle Lease Commencement Date to but excluding the Vehicle Lease Expiration Date.

 

3.2 Lease Commencement Date; Lease Expiration Date.  The “Lease Commencement Date” shall mean the Series 2010-3 Original Closing Date as the first Group VII Series of Notes issued under the Base Indenture.  The “Lease Expiration Date” shall mean the later of (i) the date of the payment in full of all Series of Notes included in the Group VII Series of Notes and all outstanding Carrying Charges related thereto and (ii) the Vehicle Lease Expiration Date for the last Vehicle subject to lease by a Lessee hereunder.  The “Term” of this Lease shall mean the period commencing on the Lease Commencement Date and ending on the Lease Expiration Date.

 

SECTION 4. CONDITIONS PRECEDENT.

 

4.1 Conditions to Each Lease of Vehicles.  The agreement of the Lessor to make available (a) any Acquired Vehicle for lease to the applicable Lessee and (b) financing for the acquisition of or refinancing of any other Vehicle for lease to such Lessee upon such Lessee’s placement of a Vehicle Order, for itself or as agent of the Lessor, or its delivery of a Refinancing Schedule, as applicable, is subject to the applicable terms and conditions of each Group VII Indenture and subject to the satisfaction of the following conditions precedent as of the Vehicle Lease Commencement Date for such Vehicle:

 

4.1.1 No Default.  No Lease Event of Default or Amortization Event with respect to any Group VII Series of Notes shall have occurred and be continuing on such date or would result from the leasing of such Vehicle or Vehicles.

 

4.1.2 Limitations of the Acquisition of Certain Vehicles.  After giving effect to the inclusion of such Vehicle under this Lease, there shall not be a failure or violation of any of the conditions, requirements, or restrictions specified in any related Group VII Series Supplement, in each case, with respect to the leasing of Eligible Vehicles under this Lease.

 

  

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4.1.3 Vehicle Order. The applicable Lessee shall have complied with the applicable provisions of Section 2.1 of this Lease.

 

4.1.4 Funding.  The aggregate amount of funds to be expended by the Lessor on any one date to acquire or finance the acquisition of any Vehicles shall not exceed the sum of (a) the aggregate Net Book Value of all such Vehicles plus (b) the aggregate face amount of any related Eligible Receivables being refinanced on such date.

 

4.1.5 Maximum Manufacturer Percentage and Maximum Program Percentage. The leasing of such Vehicle will not cause the aggregate Net Book Value of Vehicles then being leased under this Lease to exceed the Maximum Manufacturer Percentage with respect to any Eligible Manufacturer, will not cause the Program Vehicle Percentage to exceed the Maximum Program Percentage and will not cause any of the Lease commitments expressed in paragraph 3 of each of Annex A and Annex B to be exceeded.

 

4.1.6 Eligible Vehicle. Each Vehicle to be leased hereunder on such date shall be an Eligible Vehicle.

 

4.2 Additional Conditions to Leases of Refinanced Vehicles.  In addition to the conditions set forth in Section 4.1 above, in connection with the leasing of Refinanced Vehicles and/or Eligible Receivables, to evidence the refinancing of such Refinanced Vehicles and/or Eligible Receivables on the applicable Vehicle Lease Commencement Date or, in the case of Eligible Receivables, the effective date of such refinancing and the conveyance on such date of a security interest in such Refinanced Vehicles and/or Eligible Receivables to the Master Collateral Agent, the applicable Lessees shall have made available to the Lessor on or prior to such applicable date the following:

 

(a) a Refinancing Schedule concerning such Refinanced Vehicles and/or Eligible Receivables being refinanced on such Vehicle Lease Commencement Date;

 

(b) if not previously liened to the Master Collateral Agent, a report of the results of a search of the appropriate records of the jurisdiction of organization of each Lessee of such Refinanced Vehicles, the principal place in which such Lessee does business and the county and state in which each Lessee’s principal office is located, which shall show no liens or other security interests (other than Permitted Liens) with respect to such Vehicles and the related Vehicle Disposition Programs (to the extent not already liened and assigned to the Master Collateral Agent) or, if such search reveals any such non-permitted Lien or security interest, there shall be delivered to the Trustee a termination of such Lien or security interest together with appropriate UCC termination statements or UCC partial releases thereof;

 

(c) if not previously liened to the Master Collateral Agent, confirmation from each lender or its agent holding a security interest in any Refinanced Vehicle and/or Eligible Receivable stating unconditionally (A) that, if any sums are to be paid to such lender in connection with the lease of such Refinanced Vehicle and the refinancing of Eligible Receivables, such lender has been paid the full amount due to it in connection with such refinancing and (B) that any lien or security interest of such lender or its agent in such Refinanced Vehicle and/or Eligible Receivable has been released;

 

  

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(d) to the extent not already granted and assigned to the Master Collateral Agent, fully executed assignment agreements granting and assigning to the Master Collateral Agent a first priority security interest in each such Refinanced Vehicle and each Eligible Receivable, the related Vehicle Disposition Programs, if any, and any other Master Lease Collateral relating to any such Refinanced Vehicles and/or Eligible Receivables and fully executed Assignment Agreements from each Lessee with respect to such Vehicle Disposition Program;

 

(e) if the lien of the Master Collateral Agent has not been perfected, delivery to the Lessor for filing in the appropriate filing office fully executed UCC-1 Financing Statements necessary to perfect the interests of the Master Collateral Agent in the Eligible Receivables

 

(f) if applicable, UCC termination statements terminating, or UCC partial releases releasing, any security interests and other liens (other than Permitted Liens) in favor of any Person (other than the Master Collateral Agent) with respect to any related Vehicle Disposition Programs; and

 

(g) at the time a Refinancing Schedule is made available, the applicable Lessee will be deemed to have represented as of the applicable Vehicle Lease Commencement Date that all the conditions precedent under this Lease to the leasing of such Refinanced Vehicles and financing of the Eligible Receivables under this Lease have been satisfied, including a representation that each such receivable is an Eligible Receivable.

 

SECTION 5. RENT AND CHARGES.  Each Lessee will pay Rent and certain other charges on a monthly basis as set forth in this Section 5:

 

5.1 Payment of Rent.  On each Due Date, each Lessee shall pay to the Lessor the aggregate of all Rent that has accrued during the Related Month with respect to the Vehicles leased by such Lessee, as provided in the related Lease Annexes.

 

5.2 Payment of Availability Payment.  On each Due Date, each Lessee shall pay to the Lessor its allocable share (as determined by the Master Servicer) of the Availability Payment in respect of the unutilized portion of the Maximum Lease Commitment.  “Availability Payment” with respect to each Due Date shall equal the excess, if any, of (I) the sum of (without double counting) (a) the aggregate interest due on all Outstanding Notes included in the Group VII Series of Notes as of the Payment Date next succeeding such Due Date, plus (b) all other payments payable by RCFC during the Related Month under the Group VII Series Supplements and the other Related Documents with respect to the Group VII Series of Notes (other than principal on Group VII Series of Notes), over (II) the sum of (a) any Monthly Variable Rent due on such Due Date plus (b) any Monthly Finance Rent due on such Due Date, plus (c) any earnings on Permitted Investments allocated to any Group VII Series of Notes (less any portion thereof allocated to the Retained Interestholder) accruing through the Determination Date occurring prior to such Due Date and not included in the calculation of Availability Payments with respect to any prior Due Date.

 

  

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5.3 Payment of Monthly Supplemental Payments.  On each Due Date, each Lessee shall pay to the Lessor the Monthly Supplemental Payments that have accrued during the Related Month with respect to the Financed Vehicles leased hereunder by such Lessee, as provided in paragraphs 6 and 7 of Annex B.

 

5.4 Payment of Termination Payments, Casualty Payments, and Late Return Payments.  On each Due Date, each Lessee shall pay to the Lessor all Termination Payments, Casualty Payments and Late Return Payments that have accrued with respect to the Acquired Vehicles leased hereunder by such Lessee, as provided in Sections 7, 12.3 and 13, respectively.

 

5.5 Late Payment.  In the event a Lessee fails to remit payment of any amount due under this Lease on or before the Due Date, the amount not paid will be considered delinquent and such Lessee will pay a late charge equal to the product of (a) the VFR plus 1%, times (b) the delinquent amount for the period from the Due Date to the date on which such delinquent amount is received by the Trustee, times (c) the actual number of days elapsed during such period divided by 360.

 

5.6 Allocation of Rent and Charges.  Rent and other charges paid in respect of any Vehicles and any Due Date shall first be allocated to the payment of Monthly Variable Rent or Monthly Finance Rent, due for such Vehicles, as applicable, then to the Availability Payment due for such Vehicles and then to the payment of the remaining Rent obligations and other charges due for such Vehicles.

 

SECTION 6. INSURANCE.

 

6.1 Fleet Insurance.  Each Lessee shall at all times maintain or cause to be maintained, with one or more Qualified Insurers (as defined below), (a) personal injury and damage insurance with respect to the Vehicles leased by such Lessee hereunder and (b) insurance with respect to properties and business against loss or damage of the kinds customarily insured against by corporations, companies or other entities of established reputation engaged in the same or similar businesses and similarly situated, of such types and in such amounts as are customarily carried under similar circumstances by such other corporations, companies or other entities, including, without limitation, catastrophic physical damage insurance in an amount not less than $50,000,000.  Catastrophic physical damage insurance shall name the Master Collateral Agent as loss payee as its interests may appear.  Notwithstanding the foregoing, each Lessee may, in lieu of maintaining any such insurance with Qualified Insurers, self-insure.  For purposes hereof, “Qualified Insurer” shall mean a financially sound and reputable insurance company duly authorized and licensed in such jurisdictions where such authorization is required by law to transact business and having a general policy rating of “A” or better by A.M. Best Company, Inc.

 

6.2 Information.  Each Lessee shall, from time to time upon the Lessor’s or the Trustee’s reasonable request, deliver to the Lessor and the Trustee copies of certificates describing all insurance required by Section 6.1 which is then in effect.

 

  

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SECTION 7. CASUALTY OBLIGATION.  If a Vehicle becomes a Casualty, then the applicable Lessee shall (a) promptly notify the Lessor of such occurrence, and (b) in the case of an Acquired Vehicle, on the Due Date next succeeding the last day of the Related Month in which the Lessee obtains actual knowledge that such Vehicle has become a Casualty, pay to the Lessor an amount (a “Casualty Payment”) equal to the Net Book Value of such Vehicle, calculated as of the earlier of the last day of such Related Month and the date such vehicle is disposed of or becomes a Casualty, as applicable.  Upon payment by the applicable Lessee to the Lessor in accordance herewith of the Casualty Payment for any Acquired Vehicle that has become a Casualty, (i) the Lessor shall cause title to such Vehicle to be transferred to such Lessee, (ii) such Lessee shall be entitled to any physical damage insurance proceeds applicable to such Acquired Vehicle (if at such time such Lessee carries such insurance coverage), and (iii) the Lien of the Master Collateral Agent on such Vehicle shall be released thereby.

 

SECTION 8. VEHICLE USE.  So long as no Lease Event of Default, Liquidation Event of Default or Limited Liquidation Event of Default has occurred, the Lessees may use Vehicles leased hereunder in the regular course of their respective businesses.  In addition to its normal daily rental operations, each Lessee may sublease Vehicles to an Eligible Franchisee provided that (A) such Eligible Franchisee uses such Group VII Vehicles in the regular course of its business and the regular course of such Eligible Franchisee’s business is renting vehicles on a daily basis, (B) each applicable Group VII Vehicle is leased pursuant to a Sublease that is subject to all the terms and conditions of this Agreement, expressly states (on terms as set forth in Attachment F hereto) that it is subordinated in all respects to this Agreement and is otherwise substantially in the form of Attachment F hereto, (C) such Group VII Vehicles are being used by such Eligible Franchisee in accordance with its franchise or license agreement with the applicable Lessee or affiliate thereof and (D) the aggregate Net Book Value of all Group VII Vehicles being subleased at any time by the Lessees collectively is less than ten percent of the aggregate Net Book Value of all Group VII Vehicles being leased pursuant to this Agreement.  Notwithstanding any such Lessee Agreement, the applicable Lessee shall remain fully liable for its obligations under this Lease and the other Related Documents with respect to the Group VII Series of Notes (including any obligation hereunder or thereunder that it may cause any Franchisee to perform or fulfill).  Each Lessee shall cause all payments under the Lessee Agreements, to the extent such payments relate to vehicles comprising the Master Collateral, to be deposited directly into the Master Collateral Account, and upon the occurrence and during the continuance of a Lease Event of Default, Liquidation Event of Default or Limited Liquidation Event of Default (or any similar event under any Group VII Series Supplement), the Master Servicer shall promptly specify to the Master Collateral Agent the allocation of such payments among Financing Sources.  Vehicle use shall be confined primarily to the United States, with limited use outside the United States; provided, however, that the principal place of business or rental office of the Eligible Franchisee with respect to any Vehicles used outside the United States shall be located in the United States.  Each Lessee shall promptly and duly execute, deliver, file and record all such documents, statements, filings and registrations, and take such further actions as the Lessor, the Master Collateral Agent, the Master Servicer or the Trustee shall from time to time reasonably request in order to establish, perfect and maintain the Lessor’s title to and interest in the Acquired Vehicles and the related Certificates of Title as against such Lessee or any third party in any applicable jurisdiction and to establish, perfect and maintain the Master Collateral Agent’s Lien on the Vehicles and the related Certificates of Title as a perfected lien in any applicable jurisdiction.  Each Lessee may, at such Lessee’s sole expense, change the place of principal location of any Vehicles.  

 

  

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After any such change of location, the applicable Lessee shall take all actions necessary (i) to maintain the Lien of the Master Collateral Agent on such Vehicles and the Certificates of Title with respect to such Vehicles, and (ii) to meet or obtain all material legal requirements applicable to such Vehicles.  Following a Lease Event of Default or Manufacturer Event of Default, and upon the Lessor’s request, each Lessee shall advise the Lessor in writing where all Vehicles leased by such Lessee hereunder as of such date are principally located.  The Lessees shall not knowingly use any Vehicles, or knowingly permit the same to be used, for any unlawful purpose.  The Lessees shall and shall require the related Franchisees to use reasonable precautions to prevent loss or damage to Vehicles.  The Lessees shall or shall cause the related Franchisees to comply with all applicable statutes, decrees, ordinances and regulations regarding acquiring, titling, registering, leasing, insuring and disposing of Vehicles and shall or shall require such related Franchisees to take reasonable steps to ensure that operators are licensed.  The Lessees shall or shall cause the related Franchisees to perform, at its or their own expense, such vehicle preparation and conditioning services with respect to Vehicles as are customary.  The Lessor, the Master Collateral Agent or the Trustee or any authorized representative of the Lessor, the Master Collateral Agent or the Trustee may during reasonable business hours from time to time, without disruption of the applicable Lessee’s or the related Franchisee’s business, subject to applicable law, inspect Vehicles and registration certificates, Certificates of Title and related documents covering Vehicles wherever the same be located.

 

SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES.  Each Lessee, at its expense, shall be responsible for proper registration and licensing of the Vehicles leased by it hereunder, and the titling of such Vehicles in the name of the Lessor (in the case of Acquired Vehicles) or the Lessor or such Lessee, as applicable (in the case of Financed Vehicles), in each case with the Lien of the Master Collateral Agent noted thereon, and where required, each Lessee shall or shall cause the related Franchisees to have Vehicles inspected by any appropriate governmental authority; provided, however, that notwithstanding the foregoing, unless a Liquidation Event of Default shall have occurred and be continuing, possession of all Certificates of Title shall remain with each Servicer of the related Vehicles or the Master Servicer with such Certificates of Title to be held in trust, as agent of and custodian for the Master Collateral Agent; provided, further that, if a Liquidation Event of Default shall have occurred and be continuing, the Master Collateral Agent shall have the right to take possession of all such Certificates of Title immediately from each Servicer and the Master Servicer, as applicable.  Each Lessee shall pay or cause to be paid all registration fees, title fees, license fees, traffic summonses, penalties, judgments and fines incurred with respect to any Vehicle leased hereunder by such Lessee during the Vehicle Term for such Vehicle or imposed during the Vehicle Term for such Vehicle by any governmental authority or any court of law or equity with respect to Vehicles in connection with the Lessee’s operation of Vehicles, and any such amounts paid by the Lessor, in its discretion, on such Lessee’s behalf will be reimbursed within thirty (30) days of the Lessor notifying the Lessee of such payment.  The Lessor agrees to execute a power of attorney substantially in the form of Attachment B hereto (a “Power of Attorney”), and such other documents as may be necessary in order to allow each Lessee to title, register and dispose of the Acquired Vehicles leased by such Lessee hereunder; and each Lessee acknowledges and agrees that, with respect to the Acquired Vehicles, it has no right, title or interest in or with respect to any Certificate of Title.  Notwithstanding anything herein to the contrary, the Lessor may terminate such Power of Attorney as provided in Section 17.3.

 

  

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SECTION 10. MAINTENANCE AND REPAIRS.  Each Lessee shall or shall cause the related Franchisees, as applicable, to pay for all maintenance and repairs to keep the Vehicles leased by such Lessee hereunder in good working order and condition, and shall or shall cause such Franchisees to maintain such Vehicles as required in order to keep the Manufacturer’s warranty in force.  Each Lessee shall or shall cause the related Franchisees to return each Vehicle to an authorized Manufacturer facility or the applicable Manufacturer’s authorized warranty station for warranty work.  Each Lessee shall or shall cause the related Franchisees to comply with any Manufacturer’s recall of any Vehicle.  Each Lessee shall or shall cause the related Franchisees to pay, or cause to be paid, all usual and routine expenses incurred in the use and operation of Vehicles including, but not limited to, fuel, lubricants, and coolants.  The Lessor, upon thirty (30) days’ prior written notice to the applicable Lessee, may pay any such expenses that have not otherwise been paid by, or on behalf of, such Lessee (including any failure by a related Franchisee to pay any such expenses), and any expenses incurred by the Lessor on such Lessee’s behalf for maintenance, repair, operation or use of Vehicles by such Lessee will be promptly reimbursed (in any event no later than the next monthly Due Date following such payment) by such Lessee to the Lessor in the amount paid by the Lessor.  Each Lessee shall not make any material alterations to any Vehicles without the prior consent of the Lessor.  Any improvements or additions to any Acquired Vehicle shall become and remain the property of the Lessor, except that any addition or improvement to such a Vehicle made by a Lessee shall remain the property of such Lessee if it can be disconnected or removed from the Vehicle without impairing the functioning of or resale value thereof, other than any function or value provided by such addition or improvement.

 

SECTION 11. VEHICLE WARRANTIES.  If a Vehicle is covered by a Manufacturer’s warranty, the applicable Lessee and each related Franchisee, during the Vehicle Term, shall have the right to make any claims under such warranty which the Lessor could make.  As provided in Section 2.4, the Lessor makes no warranty or representation whatsoever, express or implied, with respect to any Vehicle.

 

SECTION 12. VEHICLE USAGE REQUIREMENTS AND DISPOSITION.

 

12.1 Usage.  As used herein, the term “vehicle turn-in condition” with respect to each Program Vehicle leased hereunder by a Lessee means a set of criteria for evaluating Program Vehicles upon their delivery at the end of the applicable Vehicle Terms, which criteria will be determined in accordance with the related Vehicle Disposition Program.  Each Program Vehicle leased hereunder by a Lessee not meeting the applicable Vehicle Disposition Program’s vehicle turn-in condition requirements will, unless redesignated as a Non-Program Vehicle in accordance with Section 14, be purchased by such Lessee in accordance with the Casualty procedure set forth in Section 7 or otherwise disposed of in accordance with the late delivery procedure set forth in Section 13, as applicable.

 

12.2 Disposition Procedure.  Prior to the end of the Vehicle Term, each Lessee shall or shall cause the related Franchisee to deliver each Program Vehicle leased hereunder by such Lessee (other than a Casualty) to the nearest related Manufacturer official auction or other facility designated by such Manufacturer at such Lessee’s sole expense and in accordance with the terms of the applicable Vehicle Disposition Program.  Any transportation allowance (for delivery costs) and any rebates or credits applicable to the unexpired term of any license plates for a Vehicle shall inure to the benefit of and, upon receipt thereof by the Lessor, the Trustee or the Master Collateral Agent, shall promptly be paid over to the applicable Lessee.  

 

  

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Each Lessee shall comply with the requirements of law and the requirements of the Vehicle Disposition Programs in connection with, among other things, the delivery of Certificates of Title, documents of transfer signed as necessary, signed Condition Reports, and signed odometer statements for the Program Vehicles.

 

12.3 Termination Payments.  On the Due Date next succeeding the earlier of (a) the last day of the Related Month in which the Repurchase Payment or the Guaranteed Payment, as the case may be, from a Manufacturer pursuant to its Vehicle Disposition Program with respect to any Acquired Vehicle that is a Program Vehicle, is received by the Lessor, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account), and (b) the thirtieth (30th) day after the expiration of the Maximum Term for such Vehicle, the Lessee that leases such Vehicle hereunder shall pay to the Lessor in respect of such Vehicle any Excess Damage Charges, Excess Mileage Charges, early turnback surcharges and, to the extent resulting in a reduction of the related Repurchase Payment or Guaranteed Payment, as applicable, any other similar charges and penalties (collectively, a “Program Vehicle Termination Payment”), as determined by the Manufacturer or its agent in accordance with the applicable Vehicle Disposition Program; and on the Due Date next succeeding the earlier of (i) the last day of the Related Month in which Disposition Proceeds from the sale or other disposition of an Acquired Vehicle that is a Non-Program Vehicle, but is not a Casualty, are received by the Lessor, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account), and (ii) the thirtieth (30th) day after the expiration of the Maximum Vehicle Lease Term for such Vehicle, the applicable Lessee shall pay to the Lessor in respect of such Vehicle an amount (a “Non-Program Vehicle Termination Payment”) equal to the aggregate amount of any sales fees, detail fees, damage repair charges, and any similar charges that result in a reduction in the amount of the sale proceeds actually received in respect of such Non-Program Vehicle (Program Vehicle Termination Payments and Non-Program Vehicle Termination Payments being, collectively, “Termination Payments”).  The provisions of this Section 12.3 will survive the expiration or earlier termination of the Term.

 

SECTION 13. LATE RETURN PAYMENTS.  If an Acquired Vehicle which is a Program Vehicle is not returned to the Manufacturer or accepted by the Manufacturer in accordance with the related Vehicle Disposition Program prior to the expiration of the Maximum Term for such Vehicle in accordance with Section 12.2, the Lessee of such Vehicle hereunder shall, unless such Vehicle has become a Casualty or has been redesignated as a Non-Program Vehicle in accordance with Section 14, (a) promptly notify the Lessor of its failure to return such Vehicle to the Manufacturer or to sell such Vehicle in accordance with the applicable Auction Procedures during the Vehicle Term, (b) use commercially reasonable efforts to sell or otherwise dispose of such Vehicle in a manner reasonably likely to maximize proceeds from such disposition and consistent with industry practice, (c) cause the Disposition Proceeds, if any, from any such sale or disposition to be paid to the Master Collateral Agent, in accordance with paragraph 10(d) of Annex A, and (d) on the Due Date next succeeding the earlier of (i) the last day of the Related Month in which such Disposition Proceeds are received by the Lessor, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account), and (ii) the thirtieth (30th) day after the expiration of the Maximum Term for such Vehicle, pay to the Lessor an amount (a “Late Return Payment”) equal to the excess, if any, of 

 

  

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(x) the Net Book Value of such Vehicle, calculated as of the first day of the calendar month in which such Maximum Term expired reduced by the Depreciation Charges accrued with respect to such Vehicle through the date such Maximum Term expired, over (y) the dollar amount of such Disposition Proceeds (which Late Return Payment amount may be equal to, but not less than, zero dollars).  The foregoing shall not affect the applicable Lessee’s obligation to pay on the related Due Date all Monthly Base Rent accrued with respect to each such Vehicle through the date on which the Maximum Term for such Vehicle expires.

 

SECTION 14. REDESIGNATION OF VEHICLES.  (a)  Upon a Program Vehicle’s becoming ineligible for repurchase by its Manufacturer or for sale in accordance with applicable Auction Procedures, due to physical damage, repair charges or accrued mileage, in each case in excess of that permitted under the related Vehicle Disposition Program, or due to any failure or inability to return such Vehicle to the Manufacturer or the designated auction site prior to the expiration of the Maximum Term, or due to any other event or circumstance, including the occurrence and continuance of a Manufacturer Event of Default with respect to the Manufacturer of such Program Vehicle, the applicable Servicer may designate such Vehicle as a Non-Program Vehicle if such Vehicle, as a Non-Program Vehicle, will be an Eligible Vehicle and if either (a) such designation meets the conditions of Sections 4.1.1, 4.1.2, 4.1.5 and 4.1.6 or (b) the Noteholders holding the requisite Invested Amount of each applicable Series of Notes included in the Group VII Series of Notes waive, in each case as and to the extent permitted under the related Series Supplement, the requirements of Sections 4.1.1, 4.1.2, 4.1.5 and 4.1.6 as applied to this Section 14 and all such other conditions, requirements or restrictions applicable to the leasing of Eligible Vehicles under this Lease with respect to which a failure or violation has occurred; provided, in each case, that (x) any additional Monthly Base Rent due with respect to each such Vehicle, relating to the decrease, if any, of the Net Book Value of such Vehicle under the newly applicable Depreciation Schedule, shall be paid by the applicable Lessee on the next succeeding Due Date, and (y) the minimum level of Enhancement required under each applicable Group VII Series Supplement, after giving effect to such designation, shall be satisfied on the date of designation.

 

(b) The applicable Servicer may designate a Non-Program Vehicle as a Program Vehicle; provided, however, that (i) upon such redesignation, such Vehicle shall be an Eligible Vehicle, (ii) such Vehicle qualifies as an Eligible Vehicle under the applicable Eligible Vehicle Disposition Program, (iii) the Capitalized Cost, Net Book Value and Depreciation Charges with respect to such Vehicle shall be recalculated as of the date of such redesignation as if such Vehicle was a Program Vehicle at the time of the initial related Vehicle Lease Commencement Date, (iv) the related Manufacturer has acknowledged such designation and (v) no Manufacturer Event of Default with respect to the related Manufacturer has occurred and is continuing.  Upon any redesignation of a Vehicle pursuant to this Section 14(b), (x) the Lessor shall pay to the applicable Manufacturer the difference (if any) between the original Capitalized Cost of such Vehicle and the Capitalized Cost of such Vehicle upon redesignation, which amount shall be deemed to be part of the Initial Acquisition Cost of such Vehicle and (y) the applicable Lessee shall be entitled to a credit against the Monthly Base Rent due on the next succeeding Due Date in an amount equal to the excess (if any) of the Net Book Value of such Vehicle upon such redesignation over the Net Book Value of such Vehicle immediately prior to such redesignation.

 

  

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SECTION 15. GENERAL INDEMNITY.

 

15.1 Indemnity of the Lessor.  Each Lessee agrees to indemnify and hold harmless the Lessor and the Lessor’s directors, officers, agents and employees (collectively, together with the Persons subject to indemnity under Section 15.2, the “Indemnified Persons”) against any and all claims, demands and liabilities of whatsoever nature, and all costs and expenses, relating to or in any way arising out of:

 

15.1.1 the ordering, delivery, acquisition, title on acquisition, rejection, installation, possession, titling, retitling, registration, re-registration, custody by such Lessee of title and registration documents, use, non-use, misuse, operation, deficiency, defect, transportation, repair, control or disposition of any Vehicle leased hereunder or to be leased hereunder by such Lessee, including, without limitation, any such Vehicle subleased to a Franchisee of such Lessee and any of the foregoing actions, events or circumstances occurring or arising in connection with such subleasing, any related Lessee Agreement, any related Franchisee or any customer of any such related Franchisee.  The foregoing shall include, without limitation, any claim by any third party against the Lessor for personal injury, property or other damages arising out of any of the foregoing with respect to any such Vehicles;

 

15.1.2 all (i) federal, state, county, municipal, foreign or other fees and taxes of any nature, including but not limited to license, qualification, registration, franchise, sales, use, gross receipts, ad valorem, business, property (real or personal), excise, motor vehicle, and occupation fees and taxes, and all federal, state, local and foreign income taxes (including any taxes payable by the Lessor as a result of its being a member of any group of corporations, including such Lessee, that file any tax returns on a consolidated or combined basis), and penalties and interest thereon, whether assessed, levied against or payable by the Lessor or otherwise, with respect to any Vehicle leased by such Lessee hereunder or the acquisition, purchase, sale, lease, sublease, rental, use, operation, control, ownership or disposition of any such Vehicle by any Person or measured in any way by the value thereof or by the business of, investment by, or ownership by the Lessor or such Lessee with respect thereto, and (ii) documentary, stamp, filing, recording, mortgage or other taxes, if any, which may be payable by the Lessor or such Lessee in connection with this Lease or the other Related Documents with respect to the Group VII Series of Notes or the related Lessee Agreements and any penalties or interest with respect thereto;

 

15.1.3 any violation by such Lessee of this Lease or of any Related Documents with respect to the Group VII Series of Notes or Lessee Agreements to which such Lessee is a party or by which it is bound or any laws, rules, regulations, orders, writs, injunctions, decrees, consents, approvals, exemptions, authorizations and licenses of any governmental or public body or authority and all other requirements having the force of law applicable at any time to any Vehicle leased by such Lessee hereunder or any action or transaction by such Lessee with respect thereto or pursuant to this Lease;

 

15.1.4 such Lessee’s Pro Rata Share of all out-of-pocket costs of the Lessor (including the reasonable fees and out-of-pocket expenses of counsel for the Lessor) in connection with the execution, 

 

  

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delivery and performance of this Lease and the other Related Documents with respect to the Group VII Series of Notes, including, without limitation, overhead expenses and any and all fees of the Trustee, Paying Agent, Clearing Agencies, Qualified Intermediary and Master Collateral Agent, all fees payable in connection with any Enhancement, any and all fees of the Master Servicer or any Servicer under each Group VII Indenture, fees and costs of the Qualified Intermediary and in connection with the Escrow Account, and any underwriting or placement agency fees incurred in connection with the sale of any Notes included in the Group VII Series of Notes, in each case to the extent allocable to this Lease (as determined by the Master Servicer); and

 

15.1.5 such Lessee’s Pro Rata Share of all out-of-pocket costs and expenses (including reasonable attorneys’ fees and legal expenses) incurred by the Lessor, the Master Collateral Agent, the Trustee, the Qualified Intermediary or the Group VII Noteholders in connection with the administration, enforcement, waiver or amendment of this Lease and any other Related Documents with respect to the Group VII Series of Notes, and all indemnification obligations of the Lessor under such Related Documents.

 

Notwithstanding the foregoing, no Lessee shall have any duty to indemnify any Indemnified Person for any consequential or punitive damages or claims, demands, liabilities, costs, or expenses to the extent such claim, demand, liability, cost or expense arises out of or is due to such Indemnified Person’s gross negligence or willful misconduct.

 

15.2 Indemnification of the Trustee.  Each Lessee agrees to indemnify and hold harmless the Trustee and the Trustee’s officers, directors, agents and employees against any and all or, in the case of clause (ii) below, such Lessee’s Pro Rata Share of all claims, demands and liabilities of whatsoever nature, and all or, in the case of clause (ii) below, such Lessee’s Pro Rata Share of all costs and expenses, relating to or in any way arising out of:  (i) any acts or omissions of such Lessee pursuant to this Lease and (ii) the Trustee’s appointment under the Base Indenture and the Trustee’s performance of its obligations thereunder, or any document pertaining to any of the foregoing to which the Trustee is a signatory, including, but not limited to any judgment, award, settlement, reasonable attorneys’ fees and other costs or expenses incurred in connection with the defense of any actual or threatened action, proceeding or claim, in each case with respect to the Group VII Series of Notes, the Group VII Collateral, the Group VII Master Collateral and any Related Documents with respect to any Group VII Series of Notes; provided, however, the Lessees shall have no duty to indemnify the Trustee, or any other Indemnified Person pursuant to this Section 15.2, to the extent such claim, demand, liability, cost or expense arises out of or is due to the Trustee’s or such Indemnified Person’s gross negligence or willful misconduct.  Any such indemnification shall not be payable from the assets of the Lessor.  The provisions of this indemnity shall run directly to and be enforceable by the Trustee or any other Indemnified Person subject to the limitations hereof.  The indemnification provided for in this Section 15.2 shall be in addition to any other indemnities available to the Trustee and shall survive the termination of the duties of the Lessees hereunder and the termination of this Lease or a document to which the Trustee is a signatory or the resignation or removal of the Trustee.

 

  

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15.3 Reimbursement Obligation by the Lessees.  The applicable Lessee shall forthwith upon demand reimburse the Lessor or the Trustee, as the case may be, for any sum or sums expended with respect to any of the foregoing, or shall pay such amounts directly upon request from the Lessor or the Trustee; provided, however, that, if so requested by such Lessee, the Lessor or the Trustee shall submit to such Lessee a statement documenting any such demand for reimbursement or prepayment.  To the extent that such Lessee in fact indemnifies the Lessor or the Trustee under the indemnity provisions of this Lease, such Lessee shall be subrogated to the rights of the Lessor or the Trustee, as the case may be, in the affected transaction and shall have a right to determine the settlement of claims therein.  The foregoing indemnity as contained in this Section 15 shall survive the expiration or earlier termination of this Lease or any lease of any Vehicle hereunder; provided, however, that the factual or legal circumstances giving rise to the Lessor’s exposure to liability occur during the period that the Lease is in effect as to the Vehicle for which such exposure to liability arose.

 

15.4 Notice to Lessee of Claims.  The Lessor or the Trustee, as the case may be, shall notify the applicable Lessee in writing (a “Notice of Claim”) of the pendency of any such claim, action or facts referred to in this Section 15 for which indemnity may be required.

 

15.5 Defense of Claims.  Defense of any claim referred to in this Section 15 for which indemnity may be required shall, at the option and request of the applicable Lessee, be conducted by such Lessee.  Following receipt of any Notice of Claim, such applicable Lessee will inform the Indemnified Person of its election to defend such claim.  Such Indemnified Person may participate in any such defense at its own expense, provided, that such participation does not interfere with such Lessee’s defense.  Each Lessee agrees that no Indemnified Person will be liable to such Lessee for any claim caused directly or indirectly by the inadequacy of any Vehicle for any purpose or any deficiency or defect therein or the use or maintenance thereof or any repairs, servicing or adjustments thereto or any delay in providing or failure to provide such or any interruption or loss of service or use thereof or any loss of business, all of which shall be the risk and responsibility of such Lessee, except to the extent that any of the foregoing is caused by the gross negligence or willful misconduct of such Indemnified Person.  The rights and indemnities of each Indemnified Person hereunder are expressly made for the benefit of, and will be enforceable by, each Indemnified Person notwithstanding the fact that such Indemnified Person is not or is no longer a party to (or entitled to receive the benefits of) this Lease.  This general indemnity shall not affect any claims of the type discussed above which a Lessee may have against the Manufacturer.

 

SECTION 16. ASSIGNMENT.  No Lessee shall, except as provided in the Base Indenture or Section 25.1, without prior written consent of the Lessor and the Trustee, assign this Lease or any of its rights hereunder to any other party; provided, however, a Lessee may sublease or rent Vehicles leased by it under the terms of such Lessee’s normal Sublease agreements to Eligible Franchisees and in compliance with Section 8 hereof, and such Lessee and such Eligible Franchisees may rent such Vehicles to consumers in the ordinary course of their daily rental business.  Any purported assignment in violation of this Section 16 shall be void and of no force or effect.  Nothing contained herein shall be deemed to restrict the right of a Lessee to acquire or dispose of, by purchase, lease, financing, or otherwise, motor vehicles that are not subject to the provisions of this Lease.

 

  

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SECTION 17. DEFAULT AND REMEDIES THEREFOR.

 

17.1 Lease Events of Default.  Any one or more of the following will constitute an event of default (a “Lease Event of Default”) as that term is used herein:

 

17.1.1 there occurs a default in the payment of (i) any Monthly Base Rent, Monthly Variable Rent, Monthly Finance Rent, Termination Payment, Casualty Payment, Late Return Payment, Monthly Supplemental Payment, Availability Payment or (ii) any other amount payable under this Lease, and, in any such case under clause (i) or (ii), that continues for a period of five (5) Business Days (without giving effect to any payment made with available Enhancement); provided, that in the case of clause (ii) above, such five (5) Business Day period shall commence on the earlier of (x) date notice of such event is given by the Lessor, the Master Collateral Agent or the Trustee to the applicable Lessee and the Guarantor and (y) the date the Master Servicer or Lessee otherwise obtain actual knowledge thereof;

 

17.1.2 any unauthorized assignment or transfer of this Lease by a Lessee or the Guarantor occurs;

 

17.1.3 the failure of a Lessee or the Guarantor to observe or perform any other covenant, condition, agreement or provision hereof, which failure has a Material Adverse Effect on the Lessor, and such default continues for more than thirty (30) days after the earlier to occur of (a) the date a Responsible Officer of such Lessee obtains actual knowledge of such default or (b) the date written notice thereof is delivered by the Lessor, the Master Collateral Agent or the Trustee to such Lessee; provided, however, that if such failure cannot reasonably be cured within such thirty (30) day period, no Lease Event of Default shall result therefrom so long as, within such thirty (30) day period, such Lessee (i) commences to cure same, (ii) delivers written notice to the Lessor, the Master Collateral Agent and the Trustee notifying the Lessor, the Master Collateral Agent and the Trustee of such default and setting forth the steps such Lessee intends to take in order to cure such default and (iii) thereafter diligently prosecutes such cure to completion and completely cures such default on or before the sixtieth (60th) day after the earlier of the dates set forth in clause (a) and clause (b) above;

 

17.1.4 if any representation or warranty made by a Lessee or the Guarantor proves untrue in any respect as of the date of the issuance or making thereof, which inaccuracy or falsehood has a Material Adverse Effect on the Lessor, and the event, circumstance or condition giving rise to such inaccuracy or falsehood is not eliminated or otherwise cured within thirty (30) days after notice thereof from the Lessor, the Master Collateral Agent or the Trustee to such Lessee;

 

17.1.5 an Event of Bankruptcy occurs with respect to a Lessee or the Guarantor;

 

17.1.6 a Servicer Default occurs; provided, that if a Servicer Default occurs under clauses (i) or (iv) of the definition of “Servicer Default”, such Servicer Default shall not constitute a Lease Event of Default unless and until the Trustee takes any action to terminate the Servicers;

 

  

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17.1.7 the failure, in any material respect, of the Lessee to maintain, or cause to be maintained, insurance as required in Section 6;

 

17.1.8 this Agreement or any portion hereof ceases to be in full force and effect in any material respect (other than following the Expiration Date) or a proceeding shall be commenced by the Lessee to establish the invalidity or unenforceability of this Lease; or

 

17.1.9 a Liquidation Event of Default with respect to any Group VII Series of Notes occurs.

 

17.2 Effect of Lease Event of Default.  If (i) a Lease Event of Default described in Section 17.1.1(i), 17.1.2, 17.1.5 or 17.1.9 of this Lease shall occur, then the Monthly Base Rent, the Monthly Supplemental Payment and Casualty Payments (in each case calculated, with respect to Financed Vehicles, as if all such Financed Vehicles had become a Casualty for the Related Month), the Monthly Variable Rent, the Availability Payment and the Monthly Finance Rent (in each case calculated as if the full amount of interest, principal and other charges under all Outstanding Series of Notes included in the Group VII Series of Notes were then due and payable in full), Termination Payments and Late Return Payments shall, automatically, without further action by the Lessor or the Trustee, become immediately due and payable or (ii) any other Lease Event of Default shall occur, the Lessor or the Trustee may declare the Rent and all other charges and payments (calculated as described in clause (i) above) to be due and payable, whereupon such Rent and such other charges and payments (as so calculated) shall, subject to Section 17.5, become immediately due and payable.

 

17.3 Rights of Lessor Upon Lease Event of Default, Liquidation Event of Default or Limited Liquidation Event of Default.  If a Lease Event of Default, Liquidation Event of Default or Limited Liquidation Event of Default with respect to this Lease or any Series of Notes for which this Lease serves as Collateral shall occur, then the Lessor at its option may:

 

(i) Proceed by appropriate court action or actions, either at law or in equity, to enforce performance by the Lessees of the applicable covenants and terms of this Lease or to recover damages for the breach hereof calculated in accordance with Section 17.5; or

 

(ii) By notice in writing to each Lessee, terminate this Lease in its entirety and/or the right of possession hereunder of the Lessees as to the Vehicles, and the Lessor may direct delivery by the Lessees of documents of title to the Vehicles, whereupon all rights and interests of the Lessees to the Vehicles will cease and terminate (but the Lessees will remain liable hereunder as herein provided, calculated in accordance with Section 17.5); and thereupon, the Lessor or its agents may peaceably enter upon the premises of the Lessees or other premises where the Vehicles may be located and take possession of them and thenceforth hold, possess and enjoy the same free from any right of the Lessees, or their successors or assigns (other than the Franchisees), to employ the Vehicles for any purpose whatsoever consistent with the mitigation of losses and damages, and the Lessor will, nevertheless, have a right to recover from the Lessees any and all amounts which under the terms of Section 17.2 

 

  

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(as limited by Section 17.5) of this Lease may be then due.  The Lessor will provide the applicable Lessee with written notice of the place and time of any sale of Financed Vehicles pursuant to this Section 17.3 at least five (5) days prior to the proposed sale, which shall be deemed commercially reasonable, and such Lessee or the Lessor may purchase the Vehicle(s) at the sale.  Each and every power and remedy hereby specifically given to the Lessor will be in addition to every other power and remedy hereby specifically given or now or hereafter existing at law, in equity or in bankruptcy and each and every power and remedy may be exercised from time to time and simultaneously and as often and in such order as may be deemed expedient by the Lessor; provided, however, that the measure of damages recoverable against a Lessee will in any case be calculated in accordance with Section 17.5.  All such powers and remedies will be cumulative, and the exercise of one will not be deemed a waiver of the right to exercise any other or others.  No delay or omission of the Lessor in the exercise of any such power or remedy and no renewal or extension of any payments due hereunder will impair any such power or remedy or will be construed to be a waiver of any default or any acquiescence therein.  Any extension of time for payment hereunder or other indulgence duly granted to a Lessee will not otherwise alter or affect the Lessor’s rights or the obligations hereunder of such Lessee.  The Lessor’s acceptance of any payment after it will have become due hereunder will not be deemed to alter or affect the Lessor’s rights hereunder with respect to any subsequent payments or defaults therein; or

 

(iii) By notice in writing to a Lessee, terminate the Power of Attorney of such Lessee; provided, that following a Servicer Default and the termination of the Master Servicer and each Servicer pursuant to Section 17.7, the Issuer shall terminate the Power of Attorney.

 

17.4 Certain Rights Upon Liquidation Event of Default, Limited Liquidation Event of Default, Manufacturer Event of Default and Non-Performance of Certain Covenants.

 

(i) If a Liquidation Event of Default or a Limited Liquidation Event of Default or, with respect to Program Vehicles, a Manufacturer Event of Default, shall have occurred and be continuing, the Lessor and the Trustee, to the extent provided in each applicable Group VII Indenture, shall have the rights against the Guarantor, each Lessee, each Manufacturer in connection with any Manufacturer Event of Default, and the Master Lease Collateral to the extent provided in each applicable Group VII Indenture (including, without limitation, in connection with a Manufacturer Event of Default, the rights granted under Section 8.2 of the Base Indenture) upon a Liquidation Event of Default or Limited Liquidation Event of Default, including the right to take possession of all Group VII Vehicles immediately from the Lessees as provided therein.

 

(ii) With respect to Program Vehicles, if the Guarantor or any Lessee shall default in the due performance and observance of any of its material obligations under Section 6.1, 24.3, 24.4(f) or 25.4 hereof or have made any misrepresentation under Section 23.4 hereof, and such default or misrepresentation shall continue unremedied for a period of 30 days after notice thereof shall have been given to the Guarantor or the applicable Lessee, 

 

  

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as the case may be, by the Lessor, the Lessor or the Trustee, as assignee of the Lessor’s rights hereunder, shall have the ability to exercise all rights, remedies, powers, privileges and claims of the Guarantor or any Lessee against the Manufacturers under or in connection with the Eligible Vehicle Disposition Programs with respect to (i) Group VII Vehicles that are Program Vehicles which the Guarantor or any Lessee has determined to turn back to the Manufacturers under such Eligible Vehicle Disposition Programs and (ii) whether or not the Guarantor or any Lessee shall then have determined to turn back such Group VII Vehicles that are Program Vehicles, any such Program Vehicles for which the applicable Maximum Term will expire within one week or less.

 

(iii) Upon a default in the performance (after giving effect to any grace periods provided herein) by the Guarantor or any Lessee of its obligations hereunder to keep the Group VII Vehicles free of Liens and to maintain the Trustee’s Lien perfected on the Master Lease Collateral, the Trustee shall have the right to take actions reasonably necessary to correct such default with respect to the subject Vehicles, including executing and filing UCC financing statements with respect to Eligible Vehicle Disposition Programs and other general intangibles and amending any Certificates of Title that fail to note the correct titleholder or lienholder in accordance with the Base Indenture, this Lease and the Master Collateral Agency Agreement.

 

(iv) Upon the occurrence of a Liquidation Event of Default or Limited Liquidation Event of Default, the Guarantor and each Lessee will return any Group VII Vehicles that are Program Vehicles to the related Manufacturer in accordance with the instructions of the Lessor.

 

(v) Upon the occurrence of a Liquidation Event of Default or Limited Liquidation Event of Default, the Lessor shall have the right to dispose of (x) those Group VII Vehicles that are Program Vehicles either not accepted by the related Manufacturer under the applicable Eligible Vehicle Disposition Program pursuant to clause (iv) above or with respect to which a Manufacturer Event of Default has occurred, and (y) the Group VII Vehicles that are Non-Program Vehicles and to direct the Guarantor or the applicable Lessee to dispose of such Vehicles in accordance with its instructions.  In addition, the Lessor shall have all of the rights, remedies, powers, privileges and claims vis-a-vis the Guarantor or any Lessee, necessary or desirable to allow the Trustee to exercise the rights, remedies, powers, privileges and claims given to the Trustee pursuant to Section 8.1 and, with respect to Program Vehicles, Section 8.2 of the Base Indenture and the Guarantor and each Lessee acknowledges that it has hereby granted to the Lessor all of the rights, remedies, powers, privileges and claims granted to the Trustee pursuant to Article 8 of the Base Indenture and that, under certain circumstances set forth in the Base Indenture, the Trustee may act in lieu of the Lessor in the exercise of such rights, remedies, powers, privileges and claims.

 

17.5 Measure of Damages.  If a Lease Event of Default, Liquidation Event of Default or Limited Liquidation Event of Default occurs and the Lessor, the Master Collateral Agent or the Trustee exercises the remedies granted to the Lessor, the Master Collateral Agent or the Trustee under this Section 17 or under Section 8.2 of the Base Indenture, the amount that the Lessor shall be permitted to recover shall be equal to:

 

  

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(i) all Rent and payments under this Lease (calculated as provided in Section 17.2); plus

 

(ii) any damages and expenses (other than punitive and consequential damages), which the Lessor, the Master Collateral Agent or the Trustee will have sustained by reason of the Lease Event of Default, Liquidation Event of Default or Limited Liquidation Event of Default, together with reasonable sums for such attorneys’ fees and such expenses as will be expended or incurred in the seizure, storage, rental or sale of the Vehicles or in the enforcement of any right or privilege hereunder or in any consultation or action in such connection; plus

 

(iii) all other amounts due and payable under this Lease; plus

 

(iv) interest from time to time on amounts due and unpaid under this Lease at the VFR plus 1%, computed from the date of the Lease Event of Default, Liquidation Event of Default or Limited Liquidation Event of Default or the date payments were originally due the Lessor under this Lease or from the date of each expenditure by the Lessor which is recoverable from a Lessee pursuant to this Section 17, as applicable, to and including the date payments are made by the Lessee; minus

 

(v) an amount equal to all sums realized by the Lessor, the Master Collateral Agent and the Trustee from the liquidation of the Financed Vehicles leased hereunder (either by receipt of payment from the Manufacturers under Vehicle Disposition Programs, from sales of Vehicles to third parties, or otherwise); provided, however, that if a Financed Vehicle is delivered to the Manufacturer or the designated auction site for repurchase by the Manufacturer under the applicable Vehicle Disposition Program or for sale in accordance with the applicable Auction Procedures, respectively, and such Vehicle is accepted for repurchase or sale by such Manufacturer (as evidenced by a Condition Report indicating that such Vehicle conforms to the requirements for repurchase or sale under such Vehicle Disposition Program), the Lessor and the Trustee shall be deemed to have received thirty (30) days after the date of such acceptance or sale on account of this clause (v) an amount equal to the Net Book Value of such Vehicle, calculated as of its Disposition Date (less any Termination Payments payable in respect of such Vehicle).

 

17.6 Application of Proceeds.  The proceeds of any sale or other disposition of any Financed Vehicles pursuant to Section 17.3 shall be applied in the following order: (i) to the reasonable costs and expenses incurred by the Lessor in connection with such sale or disposition, including any reasonable costs associated with repairing such Vehicles, and reasonable attorneys’ fees in connection with the enforcement of this Lease, (ii) to the payment of outstanding Rent owing from the applicable Lessee and payments under the Lease owing from such Lessee (such proceeds to be applied first, to outstanding Monthly Variable Rent and Monthly Finance Rent pro rata, second, to outstanding Availability Payments, third, to outstanding Monthly Base Rent and Monthly Supplemental Payments pro rata, fourth, to outstanding Termination Payments, 

 

  

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Casualty Payments and Late Return Payments pro rata and fifth, to outstanding late charges pursuant to Sections 5.5 and 17.5(iv)), (iii) to the payment of all other amounts due hereunder from such Lessee, (iv) to the payment of any amounts to the Lessor, or such Person(s) as may be lawfully entitled thereto, and (v) any remaining proceeds to such Lessee.

 

17.7 Servicer Default.  Any of the following events shall constitute a default of both the Master Servicer and each Servicer (but only in their respective capacities as such) (each a “Servicer Default”) as that term is used herein:

 

(i) the failure in a material respect of the Master Servicer or any Servicer to comply with or perform any provision of this Base Lease or any other Related Document with respect to any Group VII Series of Notes, and such default continues for more than thirty (30) days after the earlier of (x) the date written notice is delivered by the Lessor or the Trustee to the Master Servicer or any Servicer and (y) the date on which the Master Servicer or any Servicer has actual knowledge thereof;

 

(ii) an Event of Bankruptcy occurs with respect to the Master Servicer or any Servicer;

 

(iii) the failure of the Master Servicer or any Servicer to make any payment when due from it hereunder or under any of the other Related Documents with respect to any Group VII Series of Notes or to deposit any Collections with respect to Group VII Vehicles received by it into the applicable Collection Account when required under the Related Documents with respect to any Group VII Series of Notes and, in each case, such failure continues for five (5) Business Days; or

 

(iv) if any representation or warranty made by the Master Servicer or any Servicer in any Related Document with respect to any Group VII Series of Notes is inaccurate or incorrect or is breached or is false or misleading in any material respect as of the date of the making thereof or any schedule, certificate, financial statement, report, notice, or other writing furnished by or on behalf of the Master Servicer or any Servicer to the Lessor or the Trustee pursuant to any Related Document with respect to any Group VII Series of Notes is false or misleading in any material respect on the date as of which the facts therein set forth are stated or certified, and the circumstance or condition in respect of which such representation, warranty or writing was inaccurate, incorrect, breached, false or misleading in any material respect, as the case may be, shall not have been eliminated or otherwise cured within thirty (30) days after the earlier of (x) the date of the receipt of written notice thereof from the Lessor or the Trustee to the Master Servicer or any Servicer and (y) the date the Master Servicer or any Servicer has actual knowledge of such circumstance or condition.

 

On and following the Servicing Transfer Date (as defined in the Back-Up Servicing Agreement), all authority, power, duties and obligations, in each case only with respect to the Back-Up Servicing Obligations (as defined in the Back-Up Servicing Agreement) relating solely to the Group VII Series of Notes and the Group VII Collateral of the Master Servicer and each Servicer under the Base Indenture with respect to the Series 2010-3 Notes, any other outstanding Group VII Series of Notes, 

 

  

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each related Series Supplement, the Group VII Master Lease, the other Related Documents and the Back-Up Servicing Agreement shall pass to, be vested in and/or be assumed by, as applicable, the Back-Up Servicer.  On and after the Action Notice Effective Date (as defined in the Back-Up Disposition Agent Agreement) all authority, power, duties and obligations, in each case only to the extent relating solely to the Group VII Series of Notes and the Group VII Collateral, with respect to the duties set out in Exhibit A of the Back-Up Disposition Agent Agreement under the heading “Duties after the Action Notice Effective Date”, of the Master Servicer and each Servicer under the Base Indenture with respect to the Series 2010-3 Notes, any other outstanding Group VII Series of Notes, each related Series Supplement, the Group VII Master Lease, the other Related Documents and the Back-Up Disposition Agent Agreement shall pass to and be vested in and/or be assumed by, as applicable, the Back-Up Disposition Agent.

 

SECTION 18. MANUFACTURER EVENTS OF DEFAULT.  If a Manufacturer Event of Default occurs and is continuing with respect to a Manufacturer that is a Manufacturer of Program Vehicles at the time of such event, the Lessees on behalf of the Lessor shall (a) no longer place Vehicle Orders for additional Program Vehicles from such Manufacturer (each, a “Defaulting Manufacturer”), (b) no longer turn back Program Vehicles for repurchase under any Vehicle Disposition Program of a Defaulting Manufacturer, (c) either (i) convert such Program Vehicles to Non-Program Vehicles in accordance with Section 14(a) or (ii) act at the direction of the Lessor or, to the extent permitted under any Group VII Indenture, the Trustee, to take commercially reasonable action to liquidate the Program Vehicles with respect to such Manufacturer (provided that if such Manufacturer Event of Default is cured and no longer continuing at any time when the Lessee is liquidating such Program Vehicles, the Lessee may cease liquidating such Program Vehicles) and (d) to the extent not legally prohibited from doing so, cancel any Vehicle Order with such Defaulting Manufacturer for Program Vehicles to which a vehicle identification number (a “VIN”) has not been assigned as of the date such Manufacturer Event of Default occurs.

 

For purposes hereof, “Manufacturer Event of Default” shall mean, with respect to each such event with respect to a Manufacturer of Program Vehicles (i) the failure of such Manufacturer to pay Guaranteed Payments, Repurchase Payments and/or Incentive Payments due under, respectively, such Manufacturer’s Vehicle Disposition Programs and its incentive programs, in an aggregate amount with respect to Group VII Vehicles that are Program Vehicles in excess of $10,000,000 (net of amounts aggregating no more than $20,000,000 (A) that are the subject of a good faith dispute, as evidenced in writing by either the applicable Lessee or the Manufacturer questioning the accuracy of the amounts paid or payable in respect of any such Vehicle Disposition Programs or incentive programs and (B) with respect to which the applicable Lessee or Guarantor, as the case may be, has provided adequate reserves as reasonably determined by such Person), which failure, in the case of each such Guaranteed Payment, Repurchase Payment and/or Incentive Payment included in such amount in excess of $10,000,000 continues for more than sixty (60) days following the Manufacturer Receivable Due Date, (ii) the occurrence and continuance for a period of thirty (30) days of an Event of Bankruptcy with respect to such Manufacturer, and the Confirmation Condition is not satisfied; provided, that for the purposes of clauses (a), (b) and (d) of this Section 18, the Lessees and the Lessor agree to take (or refrain from taking) the actions specified in such clauses if not legally prohibited from doing so during the thirty (30) day period following such Event of Bankruptcy or 

 

  

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(iii) the termination of such Manufacturer’s Vehicle Disposition Program or the failure of such Manufacturer’s Vehicle Disposition Program to qualify as an Eligible Vehicle Disposition Program; provided, that such termination or failure shall not constitute a Manufacturer Event of Default so long as such Manufacturer continues to perform its obligations under the related Vehicle Disposition Program with respect to related Program Vehicles that are Group VII Vehicles as of the date of such termination and the Lessees and the Lessor take (or refrain from taking) the actions specified in clauses (a) and (d) of this Section 18.

 

For purposes hereof, “Confirmation Condition” shall mean, with respect to a Manufacturer that is the subject of an Event of Bankruptcy that is a proceeding under Chapter 11 of the Bankruptcy Code to reorganize (the “Proceeding”), a condition that is satisfied upon entry and during the effectiveness of an order by the bankruptcy court having jurisdiction over the Proceeding approving (i) (A) (1) assumption (or assumption and assignment) under Section 365 of the Bankruptcy Code by the Manufacturer, or trustee in bankruptcy on its behalf, of its Vehicle Disposition Program (and all related Assignment Agreements) and/or (2) pursuant to a sale under Section 363 of the Bankruptcy Code of the Manufacturer’s assets, assumption by a purchaser of such Manufacturer’s Vehicle Disposition Program (and all related Assignment Agreements), (B) payment of all amounts due and payable by the Manufacturer to RCFC or its Affiliates under its Vehicle Disposition Program, and (C) all actions and payments necessary to cure all existing defaults by the Manufacturer with respect to RCFC or its Affiliates under the Vehicle Disposition Program to the date of effectiveness of such order; provided, that in the case of the preceding clause (i)(A)(2), the Lessees and the Lessor take (or refrain from taking) the actions specified in clauses (a) and (d) of Section 18; or (ii) (A) execution, delivery and performance by the Manufacturer of (x) a new post-petition Vehicle Disposition Program under which RCFC is an eligible fleet purchaser and having substantially the same terms and covering Vehicles with substantially the same characteristics as the Vehicle Disposition Program in effect on the date the Proceeding was commenced, and (y) new Assignment Agreements effecting the assignment of benefits of such new Vehicle Disposition Program from RCFC to the Master Collateral Agent and acknowledged by the Manufacturer, (B) payment of all amounts due and payable by such Manufacturer to RCFC or its Affiliates under the previous Vehicle Disposition Program at the time of the execution and delivery of the new post-petition Vehicle Disposition Program, and (C) all actions and payments necessary to cure all existing defaults by the Manufacturer with respect to RCFC or its Affiliates under the previous Vehicle Disposition Program to the date of effectiveness of such order, and in each case in (i) or (ii) above the actions and payments in clause (C) have been taken or made.

 

For purposes hereof, “Manufacturer Receivable Due Date” shall mean, with respect to any payment due from a Manufacturer or auction dealer in respect of a Program Vehicle turned back for repurchase or sale pursuant to the terms of the related Vehicle Disposition Program , (i) if such Vehicle Disposition Program specifies a date when such payment is due, such date and (ii) if such Vehicle Disposition Program does not specify a date when such payment is due, the 30th day after the Disposition Date for such Vehicle.

 

For the avoidance of doubt, a Manufacturer Event of Default with respect to a Manufacturer shall not be continuing as of any date of determination if:

 

  

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(i) a Manufacturer Event of Default under clause (i) of the definition of Manufacturer Event of Default has occurred with respect to such Manufacturer and a Manufacturer Event of Default under clause (ii) of the definition of Manufacturer Event of Default has not occurred with respect to such Manufacturer, the failure of such Manufacturer to pay the applicable amounts in excess of $10,000,000 is cured on or before such date;

 

(ii) a Manufacturer Event of Default under clause (ii) of the definition of Manufacturer Event of Default has occurred with respect to such Manufacturer, either (A) the applicable Event of Bankruptcy with respect to such Manufacturer is no longer continuing as of such date or (B) the Confirmation Condition with respect to such Manufacturer is satisfied on or before such date; or

 

(iii) (A) there are no Program Vehicles manufactured by such Manufacturer as of such date and (B) the Lessee is in compliance with clauses (a) through (d) of the first paragraph of Section 18 with respect to such Manufacturer as of such date.

 

SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE.  Pursuant to Section 7701 of the Code and as set forth in Attachment C hereto, each Lessee will warrant and certify as of the Closing Date with respect to each Group VII Series of Notes that (1) such Lessee intends to use the Acquired Vehicles in a trade or business of such Lessee, and (2) such Lessee has been advised that it will not be treated as the owner of the Acquired Vehicles for federal income tax purposes.

 

SECTION 20. SURVIVAL.  In the event that, during the term of this Lease, a Lessee becomes liable for the payment or reimbursement of any obligations, claims or taxes pursuant to any provision hereof, such liability will continue, notwithstanding the expiration or termination of this Lease, until all such amounts are paid or reimbursed by such Lessee.

 

SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL AGENT AND TRUSTEE.  Notwithstanding anything to the contrary contained in this Lease, each Lessee and the Guarantor acknowledges that each of the Lessees and the Lessor, pursuant to the Master Collateral Agency Agreement, has granted a security interest to the Master Collateral Agent, for the benefit of the Beneficiaries specified therein, in all of its right, title and interest in, to and under the Vehicles, the related Vehicle Disposition Programs, the Master Collateral Account and all other Master Collateral specified in the Master Collateral Agency Agreement as being pledged by DTG Operations and RCFC, and each Lessee and the Guarantor further acknowledges that the Lessor, pursuant to each Group VII Indenture, has granted a security interest to the Trustee in all of its right, title and interest in, to and under the RCFC Agreements, the Collection Account and the other Collateral described in each such Group VII Indenture.  Accordingly, each Lessee and the Guarantor agrees that:

 

(i) Subject to the terms of each Group VII Indenture, the Trustee shall have all the rights, powers, privileges and remedies of the Lessor hereunder.  Specifically, each Lessee and the Guarantor agrees that, upon the occurrence of an Amortization Event, a Liquidation Event of Default or a Limited Liquidation Event of Default, the Trustee or, with respect to any Master Collateral, the Master Collateral Agent (for and on behalf of the Trustee) 

 

  

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may exercise any applicable right or remedy against each Lessee or the Guarantor provided for herein and/or in the applicable Group VII Indenture or the Master Collateral Agency Agreement with respect to the Group VII Series of Notes, the Group VII Collateral, the Group VII Master Collateral and the Related Documents with respect to the Group VII Series of Notes, in each case subject to the terms and conditions of the related Group VII Indenture, and none of the Lessees or the Guarantor will interpose as a defense that such claim should have been asserted by the Lessor;

 

(ii) Upon the delivery by the Master Collateral Agent or the Trustee of any notice to a Lessee or the Guarantor stating that an Amortization Event, Liquidation Event of Default or Limited Liquidation Event of Default has occurred, then such Lessee or the Guarantor shall, if so requested by the Master Collateral Agent (with respect to the Master Collateral) or the Trustee (with respect to the Collateral), treat the Master Collateral Agent or the Trustee or the Master Collateral Agent’s or the Trustee’s designee, as the case may be, for all purposes as the Lessor hereunder and in all respects comply with all obligations under this Lease that are asserted by the Master Collateral Agent or the Trustee as the successor to the Lessor hereunder, irrespective of whether such Lessee or the Guarantor has received any such notice from the Lessor;

 

(iii) Pursuant to the Base Indenture, the Lessor hereby irrevocably authorizes and directs each Lessee to, and each Lessee shall, make payments of Rent hereunder directly to the Trustee for deposit in the Group VII Collection Account established by the Trustee for receipt of such payments pursuant to the Base Indenture, and such payments shall discharge the obligation of such Lessee to the Lessor hereunder with respect to Rent to the extent of such payments.  Each Lessee further acknowledges that pursuant to the Master Collateral Agency Agreement, the Lessor has irrevocably authorized and directed such Lessee to, and such Lessee shall, cause all payments under the related Lessee Agreements, each Vehicle Disposition Program, and all other Master Collateral pledged by such Lessee to the Master Collateral Agent for the benefit of the Trustee (as Beneficiary on behalf of the holders of each Series of Notes included in the Group VII Series of Notes), to be made directly to the Master Collateral Agent for deposit in the Master Collateral Account established by the Lessor for receipt of such payments pursuant to the Master Collateral Agency Agreement, and each such payment (other than any payment that is subject to distribution to such Lessee or its designee pursuant to Section 2.5(c) of the Master Collateral Agency Agreement and that is not transferred to the Collection Account) shall constitute a prepayment in respect of the obligation of such Lessee to pay the Rent due hereunder on the next succeeding Due Date.  Upon written notice to a Lessee of a sale or assignment by the Trustee or Master Collateral Agent of its right, title and interest in moneys due under this Lease or the Master Collateral Agency Agreement to a successor Trustee or Master Collateral Agent, such Lessee shall thereafter make payments of Rent hereunder or payments in respect of the Master Collateral, as applicable, to the party specified in such notice;

 

(iv) Upon request made by the Master Collateral Agent at any time, each Lessee will take such actions as are requested by the Master Collateral Agent to assist the Master Collateral Agent in maintaining the Master Collateral Agent’s perfected security interest in the Vehicles leased by such Lessee under this Lease, the Certificates of Title with respect thereto and the related Master Collateral pursuant to the Master Collateral Agency Agreement; and

 

  

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(v) A security interest in the Lessor’s rights under this Lease has been granted by the Lessor to the Trustee pursuant to the Base Indenture as collateral security only for all Series of Notes included in Group VII and, accordingly, all references herein to “all” Series of Notes shall refer only to all Series of Notes included in Group VII.

 

SECTION 22. MODIFICATION AND SEVERABILITY.  The terms of this Lease will not be waived, altered, modified, amended, supplemented or terminated in any manner whatsoever except by a written instrument signed by the Lessor, each Lessee and (except as to matters referred to in Section 27.3) the Guarantor, and consented to in writing by the Master Collateral Agent and the Trustee, the Required Noteholders with respect to each Series of Notes that is a Group VII Series of Notes (provided, however, that the consent of the Required Noteholders with respect to any Series of Notes that is Group VII Series of Notes shall not be a condition precedent to the effectiveness or validity of any such action taken with respect to the terms of this Lease if such action will not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the interests of the Group VII Noteholders in this Lease) and each Enhancement Provider with respect to each Series of Notes that is a Group VII Series of Notes (to the extent such consent is required pursuant to the applicable Series Supplement).  Notwithstanding the foregoing, the consent of any Enhancement Provider with respect to a Series of Notes that is a Group VII Series of Notes is required to amend this Lease to the extent such amendment would materially adversely impact the rights or obligations of such Enhancement Provider hereunder.  If any part of this Lease is not valid or enforceable according to law, all other parts will remain enforceable.  The Lessor shall provide prompt written notice to each Rating Agency of any such waiver, modification or amendment.

 

Notwithstanding the foregoing provisions of this Section 22, the Lessor, the Lessees and the Guarantor may, at any time and from time to time, without the consent of the Master Collateral Agent, the Trustee, any Group VII Noteholders, enter into any amendment, supplement or other modification to this Lease to cure any apparent ambiguity or to correct or supplement any provision in this Lease that may be inconsistent with any other provision herein; provided, however, that a copy of such amendment, supplement or other modification is furnished to the Trustee, each Enhancement Provider with respect to any Series of Notes included in the Group VII Series of Notes and each Rating Agency in accordance with the notice provisions hereof not later than ten days prior to the execution thereof by the Lessor, the Lessees and the Guarantor.

 

SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES.  Each Lessee and Servicer represents and warrants to the Lessor, as to itself and the Vehicles leased by it hereunder, and the Guarantor represents and warrants to the Lessor, as to itself and as to each Lessee and Servicer, that as of the Closing Date with respect to each Group VII Series of Notes:

 

23.1 Due Incorporation, Authorization, No Conflicts, Etc.  Each of the Lessees and the Guarantor is a corporation duly incorporated and validly existing and in good standing under the laws of the jurisdiction of its incorporation and is duly qualified and in good standing in each jurisdiction where, because of the nature of its activities or properties, the failure so to qualify would have a Material Adverse Effect on such Lessee or the Guarantor.  

 

  

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The execution, delivery and performance by each Lessee and the Guarantor of this Lease and the other Related Documents with respect to the Group VII Series of Notes to be executed and delivered by it are within its corporate powers, have been duly authorized by all necessary corporate action (including shareholder approval, if required), have received all necessary governmental and other consents or approvals (in each case, if any shall be required), and do not and will not contravene or conflict with, or create a default, breach, Lien or right of termination or acceleration under, any Requirement of Law or Contractual Obligation binding upon it, other than such default, breach, Lien or right of termination or acceleration which does not have a Material Adverse Effect on such Lessee or the Guarantor, as applicable.  This Lease and each other Related Document to be executed and delivered by a Lessee or the Guarantor are (or when executed and delivered will be) the legal, valid, and binding obligations of such Person, enforceable against such Person in accordance with their respective terms, subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors’ rights.

 

23.2 Financial Information; Financial Condition.  All balance sheets and all statements of operations of shareholders’ equity and of cash flow, which have been or shall hereafter be furnished by it to the Lessor or the Trustee for the purposes of or in connection with this Lease or the Related Documents with respect to the Group VII Series of Notes have been and will be prepared in accordance with GAAP and do and will present fairly the financial condition of the entities involved as of the dates thereof and the results of their operations for the periods covered thereby.

 

23.3 Litigation.  Except for (i) claims set forth in Schedule 1, as may be amended in connection with each such Closing Date or the date a Joining Party becomes a Lessee pursuant to the Affiliate Joinder in Lease and (ii) claims which are fully covered by insurance, no claim, litigation (including, without limitation, derivative actions), arbitration, governmental investigation or proceeding or inquiry is pending or, to the best of the Lessees’ and the Guarantor’s knowledge, threatened against a Lessee or the Guarantor which would, if adversely determined, have a Material Adverse Effect on a Lessee or the Guarantor.

 

23.4 Liens.  As of the date hereof, there is no Lien on, or no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) covering or purporting to cover any interest of any kind in, the Vehicles leased hereunder, except those in favor of the Lessor, the Master Collateral Agent or the Trustee (other than those set forth in Schedule 4, as may be amended in connection with each such Closing Date or the date a Joining Party becomes a Lessee pursuant to the Affiliate Joinder in Lease, and other Permitted Liens).

 

23.5 Necessary Actions.  Upon the Servicers causing the Lien of the Master Collateral Agent to be noted on the Certificates of Title with respect to the Vehicles or as otherwise provided for by the Master Collateral Agency Agreement or the Base Indenture, and the filing of the financing statements referenced in Section 36(h) naming each Lessee as debtor, all filings, registrations and recordings necessary or appropriate to create, preserve, protect and perfect the security interest granted to the Master Collateral Agent in respect of the Master Collateral have been accomplished and, assuming the delivery to, and continuing possession by, the Lessor or its agents or assignees of all instruments and documents (in each case as defined in the UCC as in effect in New York) a security interest in which is perfected by possession 

 

  

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(except with regard to property constituting fixtures, any reserved rights of the United States government as required by law, Liens upon patents, patent licenses, trademarks, service marks and trademark licenses, to the extent that such Liens cannot be perfected by the filing of financing statements under the Uniform Commercial Code as in effect in the applicable jurisdiction, Liens on Master Collateral the perfection of which requires filings in or other actions under the laws of jurisdictions outside of the United States of America, any State, territory or dependency thereof or the District of Columbia, and Liens on general intangibles or accounts (in each case as defined in the UCC as in effect in New York) on which the United States of America or any department, agency, or instrumentality thereof is the obligor), and assuming that the applicable Lessee has rights in the Master Collateral within the meaning of the UCC as in effect in New York, the security interest granted to the Master Collateral Agent pursuant to the Master Collateral Agency Agreement in and to the Master Collateral constitutes a perfected security interest therein (but as to the copyrights and copyright licenses and accounts arising therefrom, only to the extent the UCC of the relevant jurisdiction, from time to time in effect, is applicable), prior to the rights of all other Persons (except, with respect to goods (as defined in the UCC), buyers in the ordinary course of business to the extent provided in Section 9-320(b) of the UCC as from time to time in effect in the applicable jurisdiction) therein and subject to no other Liens other than Permitted Liens (and the interests of such buyers in the ordinary course of business) and is entitled to all rights, priorities and benefits afforded to perfected security interests by the UCC or other relevant law as enacted in any relevant jurisdiction.

 

23.6 Employee Benefit Plans.  (a) During the twelve consecutive month period prior to the date hereof (or, with respect to each Series of Notes included in the Group VII Series of Notes after the Closing Date for the initial Group VII Series of Notes, the Closing Date with respect to such Series of Notes):  (i) no steps have been taken to terminate any Pension Plan and (ii) no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f)(1) of ERISA in connection with such Pension Plan; (b) no condition exists or event or transaction has occurred with respect to any Pension Plan which could result in the incurrence by a Lessee, the Guarantor or any member of the Controlled Group of fines, penalties or liabilities for ERISA violations, which in the case of any of the events referred to in clause (a) above or this clause (b) would have a Material Adverse Effect upon such Lessee or the Guarantor, and (c) none of the Lessees and the Guarantor has any material contingent liability with respect to any post-retirement benefits under a Welfare Plan, other than liability for continuation coverage described in Subtitle B of Part 6 of Title I of ERISA and liabilities which would not have a Material Adverse Effect upon any Lessee or the Guarantor.

 

23.7 Investment Company Act.  Neither the Guarantor nor any Lessee is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

 

23.8 Regulations T, U and X.  Neither the Guarantor nor any Lessee is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T, U and X of the Board of Governors of the Federal Reserve System).

 

23.9 Business Locations; Trade Names; Principal Places of Business Locations.  Schedule 3, as may be amended in connection with each Closing Date or the date a Joining Party becomes a Lessee pursuant to an Affiliate Joinder in Lease or at any time in connection with a change in such information as otherwise permitted under the Related Documents, 

 

  

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lists each of the locations where each Lessee and the Guarantor maintains a chief executive office, principal place of business, as well as such Person’s legal name, each name under or by which it conducts its business, each state in which it conducts business or has any records and the state in which it has its principal place of business.

 

23.10 Taxes.  Each Lessee and the Guarantor has filed all material tax returns that are required to be filed by it, and has paid or provided adequate reserves for the payment of all taxes, including, without limitation, all payroll taxes and federal and state withholding taxes, and all assessments payable by it that have become due, other than those that are not yet delinquent or are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been established, and are being maintained, in accordance with GAAP.  As of such Closing Date, there is no ongoing material audit (other than routine sales tax audits and other routine audits) or, to each Lessee’s and the Guarantor’s knowledge, material tax liability for any period for which returns have been filed or were due, other than those contested in good faith by appropriate proceedings and with respect to which (x) adequate reserves have been established and are being maintained in accordance with GAAP and (y) the failure to pay such taxes would not, individually or in the aggregate, have a Material Adverse Effect on such Lessee or the Guarantor or a material adverse effect on the Group VII Noteholders.

 

23.11 Governmental Authorization.  Each of the Lessees and the Guarantor has all licenses, franchises, permits and other governmental authorizations necessary for all businesses presently carried on by it (including owning and leasing the real and personal property owned and leased by it), except where failure to obtain such licenses, franchises, permits and other governmental authorizations would not have a Material Adverse Effect on such Person.

 

23.12 Compliance with Laws.  Each Lessee and the Guarantor:  (i) is not in violation of any Requirement of Law, which violation would have a Material Adverse Effect on such Person, and to the best knowledge of each Lessee and the Guarantor, no such violation has been alleged; (ii) has filed in a timely manner all reports, documents and other materials required to be filed by it with any Governmental Authority (and the information contained in each of such filings is true, correct and complete in all material respects), except where failure to make such filings would not have a Material Adverse Effect on such Person; and (iii) has retained all records and documents required to be retained by it pursuant to any Requirement of Law, except where failure to retain such records would not have a Material Adverse Effect on such Person.

 

23.13 Eligible Vehicles; Eligible Franchisees.  Each Vehicle is or will be, as the case may be, on the Vehicle Lease Commencement Date with respect to such Vehicle, an Eligible Vehicle, and each Franchisee subleasing an Eligible Vehicle from a Lessee is or will be, as the case may be, on the sublease commencement date with respect to such Eligible Vehicle, an Eligible Franchisee.

 

23.14 Supplemental Documents True and Correct.  All information contained in any Vehicle Order, Refinancing Schedule or other Supplemental Document which has been submitted, or which may hereafter be submitted by a Lessee or the Guarantor to the Lessor is, or will be, true, correct and complete in all material respects.

 

  

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23.15 Accuracy of Information.  All certificates, reports, statements, documents and other information furnished to the Lessor, the Trustee or the Master Collateral Agent by the Guarantor or any Lessee pursuant to any provision of any Related Document with respect to the Group VII Series of Notes, or in connection with or pursuant to any amendment or modification of, or waiver under, any Related Document with respect to the Group VII Series of Notes, shall, at the time the same are so furnished, be complete and correct in all material respects to the extent necessary to give the Lessor, the Trustee or the Master Collateral Agent, as the case may be, true and accurate knowledge of the subject matter thereof, and the furnishing of the same to the Lessor, the Trustee or the Master Collateral Agent, as the case may be, shall constitute a representation and warranty by the Guarantor and such Lessee made on the date the same are furnished to the Lessor, the Trustee or the Master Collateral Agent, as the case may be, to the effect specified herein.

 

Each of the foregoing representations and warranties will be deemed to be remade as of the Closing Date with respect to each Series of Notes included in Group VII.

 

SECTION 24. CERTAIN AFFIRMATIVE COVENANTS.  Each Lessee and, as applicable, each Servicer, the Master Servicer and DTAG in its capacity as Guarantor, covenants and agrees that, until the expiration or termination of this Lease, and thereafter until the obligations of such Lessee, such Servicer, the Master Servicer or the Guarantor, as applicable, under this Lease and the Related Documents with respect to the Group VII Series of Notes are satisfied in full, unless at any time the Lessor, the Master Collateral Agent and the Trustee shall otherwise expressly consent in writing, it will:

 

24.1 Corporate Existence; Foreign Qualification.  Do and cause to be done at all times all things necessary to (i) maintain and preserve its corporate existence (except as permitted under Section 25.1); (ii) be duly qualified to do business and in good standing as a foreign corporation in each jurisdiction where the nature of its business makes such qualification necessary and the failure to so qualify would have a Material Adverse Effect on it; and (iii) comply with all Contractual Obligations and Requirements of Law binding upon it, except to the extent that its failure to comply therewith would not, in the aggregate, have a Material Adverse Effect on it.

 

24.2 Books, Records and Inspections.  (i) Maintain books and records that are complete and accurate in all material respects with respect to the Vehicles leased by it under this Lease; and (ii) at any time and from time to time during regular business hours, and with reasonable prior notice from the Lessor, the Master Collateral Agent or the Trustee and otherwise subject to the conditions set forth in the first paragraph of Section 24.10, including with respect to confidentiality, permit the Lessor, the Master Collateral Agent or the Trustee or their respective agents or representatives (A) to examine and make copies of all books, records and documents in the possession or under the control of such Person relating to the Vehicles leased under this Lease, including without limitation, in connection with the Master Collateral Agent’s or the Trustee’s satisfaction of any requests of a Manufacturer performing an audit under its Vehicle Disposition Program and (B) to visit the office and properties of each Lessee for the purpose of examining such materials, and to discuss matters relating to the Group VII Vehicles leased under this Lease with the applicable Lessee’s independent public accountants or with any of the officers or employees of the applicable Lessee having knowledge of such matters, all at such reasonable times and as often as the Lessor, the Master Collateral Agent or the Trustee may reasonably request.

 

  

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24.3 Vehicle Disposition Programs.  With respect to each Program Vehicle leased by a Lessee, comply, or cause the related Franchisee to comply, as appropriate, with all of its obligations under the applicable Vehicle Disposition Program relating to such Vehicle.

 

24.4 Reporting Requirements.  Furnish, or cause to be furnished to the Lessor (or to such other Persons as are specified below), each of the following:

 

(a) Daily Reports.  Daily reports of the Master Servicer as follows:  On each Business Day commencing on the Lease Commencement Date, the Master Servicer shall prepare and maintain at the office of the Master Servicer, a record (each, a “Daily Report”) setting forth the aggregate amount of (i) Guaranteed Payments, Repurchase Payments, Disposition Proceeds and Incentive Payments received from Manufacturers under Vehicle Disposition Programs or incentive programs, or from other Persons in connection with the sale or disposition of Vehicles leased under this Lease, (ii) insurance proceeds in respect of Vehicles leased under this Lease, (iii) payments in respect of Lessee Agreements and (iv) any other Collections in respect of the Master Collateral allocable to the Trustee as Beneficiary (on behalf of the Group VII Noteholders) and in each case deposited in the Master Collateral Account and reported to the Master Servicer by the Master Collateral Agent, in accordance with Section 2.5(c) of the Master Collateral Agreement, not more than the second Business Day preceding such Daily Report, and setting forth (x) the aggregate dollar amount of the Collections identified in the foregoing clauses (i) through (iv), (y) during the continuance of a Lease Event of Default or a Liquidation Event of Default, and as needed under Section 2.5(d) or (e) of the Master Collateral Agency Agreement or, in the sole judgment of the Master Collateral Agent, as otherwise needed, the portion of such Collections representing proceeds of the Master Collateral pledged by the Lessor and the portion pledged by each Lessee, and (z) the aggregate dollar amount of Sublease payments, insurance payments, warranty payments (if any), and other payments which, so long as no Lease Event of Default or Liquidation Event of Default has occurred and is continuing, may be withdrawn from the Master Collateral Account and distributed to the applicable Lessee, as set forth in Section 2.5(c) of the Master Collateral Agency Agreement.  Before 3:00 p.m. (New York City time) on each such Business Day, the Master Servicer shall deliver a copy of the Daily Report to the Master Collateral Agent and the Trustee.

 

(b) Monthly Certificate.  Monthly certificates of the Master Servicer as follows:  On each Reporting Date, the Master Servicer shall forward to the Lessee, the Lessor, the Trustee, the Paying Agent, each applicable Rating Agency and any applicable Enhancement Provider, an Officer’s Certificate of the Master Servicer (each, a “Monthly Certificate”) setting forth, inter alia, the following information (which, in the cases of clauses (iii), (iv) and (v) below, shall be expressed as a dollar amount per $1,000 of the original principal amount of such Notes and as a percentage of the outstanding principal balance of such Notes as of such date):  (i) the aggregate amount of payments received from the Manufacturers under Vehicle Disposition Programs and deposited in the Master Collateral Account and the aggregate amount of other Group VII Collections processed for the Related Month with respect to such Reporting Date; 

 

  

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(ii) the Invested Percentage on the last day of the second preceding Related Month of each Series of Notes included in the Group VII Series of Notes (or, until the end of the second Related Month for such Series of Notes, as of the Closing Date for such Series); (iii) for each Series included in the Group VII Series of Notes, the total amount to be distributed to Noteholders of each such Series on the next succeeding Payment Date; (iv) for each Series included in the Group VII Series of Notes, the amount of such distribution allocable to principal on the Notes of such Series; (v) for each Series included in the Group VII Series of Notes, the amount of such distribution allocable to interest on the Notes; (vi) for each Series included in the Group VII Series of Notes, the amount of Enhancement used or drawn (or to be used or drawn) in connection with the distribution to Noteholders of each such Series on the next succeeding Payment Date, together with the aggregate amount of remaining Enhancement not theretofore used or drawn; (vii) for each Series included in the Group VII Series of Notes, the Series Monthly Servicing Fee for the next succeeding Payment Date; (viii) for each Series included in the Group VII Series of Notes, the applicable Pool Factor for such Series with respect to such Related Month; (ix) the Aggregate Asset Amount of all Group VII Series of Notes and the amount of the Asset Amount Deficiency of all Group VII Series of Notes, if any, at the close of business on the last day of the Related Month; (x) whether, to the knowledge of the Master Servicer, any Lien exists on any of the Collateral for any Series of Notes included in the Group VII Series of Notes (other than Permitted Liens); and (xi) the percentage of Vehicles leased under this Lease constituting Program Vehicles, the percentage of Vehicles leased under this Lease constituting Non-Program Vehicles, and the percentage of Vehicles leased under this Lease constituting Program Vehicles of each Manufacturer and Non-Program Vehicles of each Manufacturer, each as of the end of the Related Month.  The Trustee shall be under no duty to recalculate, verify or recompute the information supplied to it under this Section 24.4(b).

 

(c) Audit Report.  As soon as available and in any event within one hundred ten (110) days after the end of each fiscal year of the Guarantor, a copy of the consolidated balance sheet of the Guarantor and its Subsidiaries as at the end of such fiscal year, together with the related statements of earnings, stockholders’ equity and cash flows for such fiscal year, prepared in reasonable detail and in accordance with GAAP, and certified by Ernst & Young LLP (or such other independent certified public accountants of recognized national standing as shall be selected by the Guarantor) as presenting fairly in all material respects the consolidated financial condition and results of operations of the Guarantor and its Subsidiaries, with such exceptions as may be noted in such accountants’ report.  In addition to such accountants’ report, such independent certified public accountants shall deliver to the Guarantor and the Lessor, a copy, which will be provided by the Lessor to each applicable Rating Agency, of a letter to the effect that during the course of their audit of the consolidated financial statements of the Guarantor nothing has come to their attention that leads them to believe that a Lease Event of Default or Potential Lease Event of Default under this Lease exists.  Each audit report provided by the Guarantor pursuant to this Section 24.4(c) shall include a certification from the chief financial or accounting officer of the Guarantor stating whether, to the actual knowledge of such officer, there exists on the date of the certificate any condition or event which then constitutes, or which after notice or lapse of time or both would constitute, a Lease Event of Default or Potential Lease Event of Default, and, if any such condition or event exists, specifying the nature and period of existence thereof and the action the Lessee is taking and proposes to take with respect thereto.

 

  

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(d) Quarterly Statements.  Quarterly statements of the Guarantor as follows:  As soon as available, but in any event within forty-five (45) days after the end of each fiscal quarter (except the fourth fiscal quarter) of the Guarantor, the Guarantor shall forward to the Lessor and each applicable Rating Agency copies of (i) the unaudited consolidated balance sheet of the Guarantor and its Subsidiaries as at the end of such fiscal quarter and (ii) the related unaudited statements of earnings and cash flows of the Guarantor and its Subsidiaries, in each case for the period commencing at the end of the previous fiscal year through such fiscal quarter (and as to the statement of earnings for such fiscal quarter) and as to the statements of earnings and cash flows, in each case setting forth in comparative form the figures for the corresponding periods of the previous fiscal year, prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and certified by the chief financial or accounting officer of the Guarantor as presenting fairly in all material respects the consolidated financial condition and results of operations of the Guarantor and its Subsidiaries (subject to normal year-end adjustments).  Each certification provided by the Guarantor pursuant to this Section 24.4(d) shall include a certification stating whether, to the actual knowledge of such officer, there exists on the date of the certificate any condition or event which then constitutes, or which after notice or lapse of time or both would constitute, a Lease Event of Default or Potential Lease Event of Default, and, if any such condition or event exists, specifying the nature and period of existence thereof and the action that such Lessee is taking and proposes to take with respect thereto.

 

(e) Lease Events of Default; Manufacturer Events of Default.  Notices of Lease Events of Default and Manufacturer Events of Default as follows:  Promptly after a Lessee or the Guarantor has actual knowledge of the occurrence of any Lease Event of Default, Potential Lease Event of Default or Manufacturer Event of Default, such Lessee or the Guarantor shall provide to the Lessor and each applicable Rating Agency a written statement of an Authorized Officer of such Person describing such event and the action that such Lessee or the Guarantor proposes to take with respect thereto.

 

(f) Monthly Vehicle Statements.  Monthly Vehicle Statements as follows:  On each Reporting Date, each Lessee shall provide to the Lessor and each applicable Rating Agency a monthly vehicle statement (each, a “Monthly Vehicle Statement”) in a form acceptable to the Lessor, which shall specify, for the Vehicles leased hereunder during the Related Month by each Lessee, (i) the last eight digits of the VIN, (ii) whether each such Vehicle is leased under Annex A or Annex B hereto, (iii) the aggregate Capitalized Cost for such Vehicles, (iv) the aggregate Net Book Value of such Vehicles as of the end of the Related Month, (v) the Manufacturer of each such Vehicle, (vi) the make and model of each such Vehicle, (vii) the state in which each such Vehicle is registered as of the end of the Related Month, (viii) the Lease Commencement Date for each such Vehicle, (ix) the date each such Vehicle was paid for, (x) if available, the mileage of each such Vehicle as of the end of the Related Month, (xi) the last recorded physical location of each such Vehicle as of the end of the Related Month, (xii) whether each such Vehicle is a Program Vehicle or Non-Program Vehicle, 

 

  

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(xiii) for each Program Vehicle, the minimum hold period and the maximum hold period under the applicable Vehicle Disposition Program, (xiv) the last eight digits of the VINs for those Vehicles that have been delivered to Manufacturers or designated auction sites pursuant to the applicable Vehicle Disposition Program, and that have been sold, during the Related Month, (xv) the last eight digits of the VINs for those Vehicles that have become a Casualty during the Related Month and their respective Net Book Values (as of the earlier of the last day of such Related Month and the date such Vehicle is disposed of or becomes a Casualty, as applicable), (xvi) the total amount of Monthly Base Rents, Monthly Variable Rents, Monthly Finance Rents, Monthly Supplemental Payments, Availability Payment, Termination Payments and Late Return Payments due for the Related Month on the related Due Date, (xvii) all prepayments of Rent received during the Related Month from Guaranteed Payments, Repurchase Payments, Disposition Proceeds and Incentive Payments received by the Lessor during the Related Month from the Manufacturers, auctions and other Persons, as the case may be, (xviii) the aggregate Depreciation Charges as of the end of the Related Month for all such Vehicles continuing in the possession of each Lessee, (xix) information with respect to each Lessee necessary for the Master Servicer to compute the Aggregate Asset Amount of the Group VII Series of Notes as of the end of the Related Month, (xx) information with respect to each Lessee necessary for the Master Servicer to compute the Availability Payment for each Lessee with respect to the Related Month, and (xxi) any other charges owing from, and credits due to, each Lessee under this Lease as of the end of the Related Month.

 

(g) Annual Certificate.  Each Lessee will deliver to RCFC, the Trustee and any applicable Enhancement Provider under each Group VII Indenture, with a copy to each applicable Rating Agency rating any outstanding Series of Notes, on or before April 15 of each calendar year, beginning with April 15, 2011, an Officer’s Certificate substantially in the form of Attachment E (each, an “Annual Certificate”) (a) stating that a review of the activities of the Lessee during the preceding calendar year and of its performance under this Lease and the other Related Documents with respect to the Group VII Series of Notes to which each Lessee is a party was made under the supervision of the officers signing such certificate, (b) stating that to the best of such officers’ knowledge, based on such review, either there has occurred no event which, with the giving of notice or passage of time or both, would constitute a Lease Event of Default or Amortization Event and that such Lessee has fully performed all its obligations under this Lease and such other Related Documents throughout such period, or, if there has occurred such event or a Lease Event of Default or Amortization Event, specifying each such event known to such officers and the nature and status thereof, and (c) stating (and containing an Opinion of Counsel to the effect) that all necessary Uniform Commercial Code continuation statements and other Uniform Commercial Code filings have been completed (including, without limitation, any “precautionary filings” made by each of the Lessees in favor of the Lessor), all necessary Assignment Agreements have been executed and delivered pursuant to Section 2.1 of the Master Collateral Agency Agreement, and all other actions, if any, required to maintain the perfected security interest of the Trustee or the Master Collateral Agent on behalf of the Trustee in the Collateral and in the Master Collateral have been taken and that the Trustee or the Master Collateral Agent continues to have a perfected security interest in the Collateral and Master Collateral.

 

  

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(h) Non-Program Vehicle Report.  Annual reports (or semi-annual at the option of the Master Servicer) of independent public accountants as follows:  On or before the second Determination Date immediately following March 31 of each year, beginning with March 31, 2011, the Master Servicer shall cause a firm of nationally recognized independent public accountants (who may also render other services to the Master Servicer and who is reasonably acceptable to the Required Noteholders for each Group VII Series of Notes with respect to its Series of Notes) to furnish a report (the “Non-Program Vehicle Report”) to the Lessor, the Trustee, each applicable Rating Agency and the Master Collateral Agent to the effect that they have performed certain agreed upon procedures with respect to the calculation of Disposition Proceeds obtained from the sale or other disposition of all Non-Program Vehicles (other than Casualties) sold or otherwise disposed of during each Related Month in such period and compared such calculations of Disposition Proceeds with the corresponding amounts set forth in the Daily Reports prepared by the Master Servicer pursuant to clause (a) above and that on the basis of such comparison such accountants are of the opinion that such amounts are in agreement, except for such exceptions as they believe to be immaterial and such other exceptions as shall be set forth in such report.  The Master Servicer shall serve as agent for the users of the report in determining the sufficiency of such procedure.

 

(i) Verification of Title.  On or prior to the Determination Date occurring in June of each year, beginning with the Determination Date occurring in June 2011, RCFC shall cause a nationally recognized firm of independent certified public accountants to furnish a report to the Trustee and each applicable Rating Agency, if any, referred to in the definition of “Rating Agency Condition” with respect to the relevant Series of Notes to the effect that they have performed certain agreed upon procedures on a statistical sample of the Certificates of Title of the Group VII Vehicles as of the end of April of such year, designed to provide a ninety-five percent (95%) confidence level confirming that such Vehicles are titled in the name of Rental Car Finance Corp. and the Certificates of Title indicate a first lien in the name of the Master Collateral Agent.

 

(j) Notice of Final Judgment.  Promptly, provide to each applicable Rating Agency rating any outstanding Group VII Series of Notes notice of any final judgment in excess of $100,000 rendered against the Lessor.

 

(k) Other.  From time to time, such other information, documents, or reports regarding the Vehicles or the financial position, the results of operations or business of the Lessees as the Lessor, the Master Collateral Agent or the Trustee may from time to time reasonably request in order to protect the interests of the Lessor, the Master Collateral Agent or the Trustee under or as contemplated by this Lease or any other Related Document.

 

24.5 Taxes and Liabilities.  Pay when due all taxes, assessments and other material (determined on a consolidated basis) liabilities (including, without limitation, taxes, titling fees and registration fees payable with respect to Vehicles), except as contested in good faith and by appropriate proceedings 

 

  

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(but only if and so long as forfeiture of any material part of the Vehicles leased under this Lease will not result from the failure to pay any such taxes, assessments or other material liabilities during the period of any such contest) and with respect to which (a) adequate reserves have been established, and are being maintained, in accordance with GAAP, and (b) the failure to make such payments and the maintaining of such reserves would not have a Material Adverse Effect on such Person or a material adverse effect on the Group VII Noteholders.

 

24.6 Compliance with Laws.  Comply with all Requirements of Law related to its businesses if the failure so to comply would have a Material Adverse Effect on such Person.

 

24.7 Maintenance of Separate Existence.  Maintain certain policies and procedures relating to its existence as a separate corporation as follows: Each of the Guarantor and each Lessee acknowledges its receipt of copies of those certain opinion letters issued by Latham & Watkins LLP, dated as of the Closing Date for each Group VII Series of Notes outstanding and addressing the issue of substantive consolidation as it may relate to the Guarantor and the Lessees, on the one hand, and the Lessor, on the other.  Each of the Guarantor and each Lessee hereby agrees to maintain in place all policies and procedures, and take and continue to take all actions, described in the factual assumptions relating to the Guarantor and such Lessee set forth in each such opinion letter and any subsequent similar Opinion of Counsel delivered in respect of a Group VII Series of Notes outstanding; provided, however, that the Guarantor or such Lessee may cease to maintain any policy or procedure if and to the extent that the Guarantor or such Lessee delivers to the Lessor and the Trustee an Opinion of Counsel providing that such policy or procedure is no longer necessary, due to a change in law or otherwise, for the rendering of such earlier opinion relating to the issue of substantive consolidation.

 

24.8 Master Collateral Agent as Lienholder.  Maintain certain computer records as follows:  Concurrently with each leasing of a Vehicle under this Lease, the Master Servicer and the related Servicer each shall indicate on its computer records that the Master Collateral Agent as assignee of the Lessor or the Lessees, as the case may be, is the holder of a Lien on such Vehicle for the benefit of the Trustee pursuant to the terms of the Master Collateral Agency Agreement.

 

24.9 Maintenance of Property.  Keep, or cause to be kept, all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted; provided, that nothing in this Section 24.9 shall require it to maintain, or to make any renewals, replacements, additions, betterment or improvements of or to, any tangible property if such property, in its reasonable opinion, is obsolete or surplus or unfit for use or cannot be used advantageously in the conduct of its business.

 

24.10 Access to Certain Documentation and Information Regarding the Collateral.  Provide to the Trustee and the Master Collateral Agent reasonable access to the documentation regarding the Group VII Collateral and the Group VII Master Collateral, such access being afforded without charge but only (i) upon reasonable request, (ii) during normal business hours, (iii) subject to the normal security and confidentiality procedures of the applicable Lessee, the applicable Servicer or the Master Servicer, as the case may be, and (iv) at offices in the continental United States designated by such Lessee, such Servicer or the Master Servicer, as the case may be, which, if they are not the offices where such documentation normally is kept, shall be accessible without unreasonable effort or expense.

 

  

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In addition, commencing on the date ten (10) days after the date that a Lessee or the Master Servicer receives from the Trustee or any Note Owner of any Note included in the Group VII Series of Notes a written request therefor, which request shall (x) contain a certification of such Note Owner that such person is a Note Owner and (y) provide an address for delivery, then and thereafter, unless and until such Lessee or the Master Servicer receives from such Note Owner a request to discontinue same, the Lessee or the Master Servicer, as applicable, shall deliver the information specified below directly to such Note Owner (and, if requested, to one other person as may be specified in such Note Owner’s written request) substantially concurrently with the delivery by such Lessee or the Master Servicer, as applicable, of such information to any of the Trustee, any Group VII Noteholder or RCFC; provided, however, if such Lessee or the Master Servicer, as applicable, is not otherwise obligated hereunder to deliver such information to the Trustee, any Group VII Noteholder or RCFC on a periodic basis, then, unless otherwise specified below, such Lessee or the Master Servicer, as applicable, shall deliver the following information to such Note Owner at the time delivered under the relevant section:

 

(i) the Monthly Certificate delivered pursuant to Section 24.4(b);

 

(ii) the Monthly Vehicle Statement delivered pursuant to Section 24.4(f);

 

(iii) any financial reports and letters required to be delivered under Sections 24.4(c) and (d); and

 

(iv) the Annual Certificate delivered pursuant to Section 24.4(g).

 

24.11 Maintenance of Credit Enhancement.  The Guarantor agrees to maintain with respect to each Series of Notes included in the Group VII Series of Notes a letter of credit (or other credit enhancement as provided for in, and permitted by, the related Series Supplement) supporting the obligations of the Lessees under this Lease in a stated amount that is at least equal to the Minimum Letter of Credit Amount, if any, for such Series of Notes or otherwise meeting the requirements thereof.

 

24.12 Certain Additional Actions.  The Master Servicer and each Servicer shall from time to time, as and when specified in the applicable Supplement for any Series of Notes included in the Group VII Series of Notes, provide such notices to the Trustee and to such other Persons specified in such Supplement, and perform such other actions, as are in each case specified therein, including without limitation any notices relating to any letters of credit or other Enhancement provided for under such Supplement, and the establishment of any cash collateral accounts relating thereto.

 

24.13 Minimum Depreciation Rate.  Each Servicer and the Master Servicer agree that the scheduled daily depreciation charge with respect to Non-Program Vehicles leased under this Lease shall be established such that (i) the Depreciation Charges accruing with respect to each such Non-Program Vehicle during each Related Month shall be at least equal to 1.00%, and (ii) the weighted average Depreciation Charges accruing with respect to all such Non-Program Vehicles during each Related Month shall be at least equal to the lesser of (a) 1.25% and (b) such lower percentage in respect of which the Rating Agency Condition with respect to each Group VII Series of Notes shall have been satisfied.

 

  

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SECTION 25. CERTAIN NEGATIVE COVENANTS.  Until the expiration or termination of this Lease and thereafter until the obligations of the Lessees are paid in full, each Lessee agrees that, unless at any time the Lessor, the Master Collateral Agent and the Trustee shall otherwise expressly consent in writing, it will not:

 

25.1 Mergers, Consolidations.  Be a party to any merger or consolidation, other than a merger or consolidation of such Lessee into or with another entity if:

 

(a) the Person formed by such consolidation or into or with which such Lessee is merged shall be a Person organized and existing under the laws of the United States of America or any State or the District of Columbia, and, if such Lessee is not the surviving entity, shall expressly assume, by an agreement supplemental hereto executed and delivered to the Trustee, the performance of every covenant and obligation of such Lessee hereunder and under all other Related Documents with respect to any Series of Notes;

 

(b) such Lessee has delivered to the Trustee an officer’s certificate and an opinion of counsel each stating that such consolidation or merger and such supplemental agreement comply with this Section 25.1 and that all conditions precedent herein provided for relating to such transaction have been complied with; and

 

(c) the Rating Agency Condition shall be met and, if required by the Series Supplement for a Group VII Series, the consent of each Enhancement Provider for such Series shall have been obtained with respect to such assignment and succession.

 

25.2 Other Agreements.  Enter into any agreement containing any provision which would be violated or breached by the performance of its obligations hereunder or under any instrument or document delivered or to be delivered by it hereunder or in connection herewith.

 

25.3 Liens.  Create or permit to exist any Lien with respect to any Vehicle leased hereunder now or hereafter existing or acquired, except Liens in favor of the Lessor, the Master Collateral Agent or the Trustee, and the Liens set forth in Schedule 4 (as the same may be amended pursuant to Section 23.4), if any, and the following Liens to the extent such liens in the aggregate would not have a Material Adverse Effect on the Lessor, the Master Collateral Agent or the Trustee or a material adverse effect on the Group VII Noteholders under this Lease or any Group VII Indenture (all the foregoing Liens collectively, the “Permitted Liens”):  (i) Liens for current taxes not delinquent or for taxes being contested in good faith and by appropriate proceedings, and with respect to which adequate reserves have been established, and are being maintained, in accordance with GAAP, (ii) Liens, including judgment liens, arising in the ordinary course of business being contested in good faith and by appropriate proceedings, and with respect to which adequate reserves have been established, and are being maintained, in accordance with GAAP, (iii) Liens incurred in the ordinary course of business in connection with worker’s compensation, unemployment insurance or other forms of governmental insurance or benefits, and (iv) mechanics’ materialmen’s, landlords’, warehousemen’s and carrier’s Liens, and other Liens imposed by law, securing obligations arising in the ordinary course of business that are being contested in good faith and by appropriate proceedings and with respect to which adequate reserves have been established, and are being maintained, in accordance with GAAP.

 

  

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25.4 Use of Vehicles.  Knowingly use or allow the Program Vehicles to be used in any manner that would (i) make any such Program Vehicles ineligible for repurchase by their respective Manufacturers or for sale in accordance with applicable Auction Procedures, except with respect to the permitted redesignation of Program Vehicles as Non-Program Vehicles, pursuant to Section 14, or (ii) subject the Vehicles to confiscation.

 

25.5 No Financed Vehicles.  Notwithstanding anything to the contrary contained in this Lease, submit requests to or otherwise lease, or cause to be leased, hereunder any Financed Vehicles without the prior written consent of the Required Beneficiaries and each Enhancement Provider with respect to each Group VII Series of Notes and upon meeting the Rating Agency Condition.

 

25.6 Limitation on Subleased Vehicles.  Notwithstanding anything to the contrary contained in this Lease, sublease to any Franchisee or any other Person any Vehicles leased to such Lessee under this Lease other than in accordance with Section 8 hereof, or as the Required Noteholders in respect of each Outstanding Group VII Series of Notes may otherwise approve in writing.

 

SECTION 26. SERVICING COMPENSATION.

 

26.1 Fees.  As compensation for its servicing activities hereunder and reimbursement for its expenses as set forth in Section 26.2, each Servicer and the Master Servicer shall be entitled to receive from the Lessor a monthly servicing fee (the “Monthly Servicing Fee”), payable in arrears on each Payment Date prior to the termination of this Lease, the Base Indenture and the Master Collateral Agency Agreement in an amount equal to the sum of the monthly servicing fees for all Series of Notes included in the Group VII Series of Notes; provided that, no Servicer or the Master Servicer shall be entitled to any Monthly Servicing Fees accruing on or after the occurrence of a Servicing Transfer Date.  Except as otherwise specified in the related Series Supplement, the Monthly Servicing Fee for each Series of Notes included in the Group VII Series of Notes (each, a “Series Monthly Servicing Fee”) on each Payment Date shall be equal to (i) the portion of the Group VII Supplemental Servicing Fee allocated to such Group VII Series of Notes pursuant to the related Supplement, plus (ii) the portion of the Group VII Monthly Servicing Fee allocated to such Group VII Series of Notes pursuant to the related Supplement.  The Series Monthly Servicing Fee for each Series of Notes included in the Group VII Series of Notes shall be paid to the Master Servicer (for allocation among the Master Servicer and the Servicers) pursuant to the procedures set forth in the applicable Series Supplement.  The supplemental servicing fee (the “Group VII Supplemental Servicing Fee”) for any period shall be equal to all Carrying Charges comprising payments due from the Servicers under Section 26.2 hereof.

 

26.2 Expenses.  The expenses of each Servicer include, and each Servicer agrees to pay, its Pro Rata Share of the amounts due to the Trustee pursuant to Section 9.5 of the Base Indenture and allocable to the Group VII Series of Notes, plus its Pro Rata Share of the reasonable fees and disbursements of independent accountants in connection with reports furnished pursuant to Sections 24.4(h), 

 

  

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plus its allocable share (as determined by the Master Servicer in the case of any shared fees and expenses) of all other fees, expenses and indemnities (other than Servicing Fees) incurred by such Servicer or the Lessor in connection with the Servicer’s activities hereunder or under the Related Documents with respect to the Group VII Series of Notes.  The Servicers, however, shall not be liable for any liabilities, costs or expenses of the Lessor, the Trustee or the Group VII Noteholders arising under any tax law, including without limitation any Federal, state or local income or franchise taxes or any other tax imposed on or measured by income (or any interest or penalties with respect thereto or arising from a failure to comply therewith), except to the extent incurred as a result of a Servicer’s violation of the provisions of this Lease or of the Related Documents with respect to the Group VII Series of Notes; provided, however, the foregoing provisions of this sentence shall not affect the indemnification obligations of the Lessees under Section 15 of this Lease.  If a Servicer fails to pay any amount due to the Trustee pursuant to Section 9.5 of the Base Indenture, the Trustee will be entitled to receive such amounts due from the Monthly Servicing Fee prior to payment thereof to such Servicer.

 

SECTION 27. GUARANTY.

 

27.1 Guaranty.  In order to induce the Lessor to execute and deliver this Lease and to lease Vehicles hereunder to the Lessees, and in consideration thereof, the Guarantor hereby (i) unconditionally and irrevocably guarantees to the Lessor the obligations of each of the Lessees to make any payments required to be made by them under this Lease, (ii) agrees to cause each Lessee to duly and punctually perform and observe all of the terms, conditions, covenants, agreements and indemnities applicable to such Lessee (whether in its capacity as a Lessee or as a Servicer) under this Lease, and (iii) agrees that, if for any reason whatsoever, any Lessee (whether in its capacity as a Lessee or as a Servicer) fails to so perform and observe such terms, conditions, covenants, agreements and indemnities, the Guarantor will duly and punctually perform and observe the same (the obligations referred to in clauses (i) through (iii) above are collectively referred to as the “Guaranteed Obligations”).  The liabilities and obligations of the Guarantor under the guaranty contained in this Section 27 (this “Guaranty”) will be absolute and unconditional under all circumstances.  This Guaranty shall be a guaranty of payment and not of collection, and the Guarantor hereby agrees that it shall not be required that the Lessor or the Trustee assert or enforce any rights against any of the Lessees, the Servicers or any other person before or as a condition to the obligations of the Guarantor pursuant to this Guaranty.

 

27.2 Scope of Guarantor’s Liability.  The Guarantor’s obligations under this Guaranty are independent of the obligations of the Lessees (whether as Lessee or as Servicer), any other guarantor or any other Person, and the Lessor may enforce any of its rights hereunder independently of any other right or remedy that the Lessor may at any time hold with respect to this Lease or any security or other guaranty therefor.  Without limiting the generality of the foregoing, the Lessor may bring a separate action against the Guarantor under this Guaranty without first proceeding against any of the Lessees, any other guarantor or any other Person, or any security held by the Lessor, and regardless of whether the Lessees or any other guarantor or any other Person is joined in any such action.  The Guarantor’s liability under this Guaranty shall at all times remain effective with respect to the full amount due from the Lessees hereunder.  The Lessor’s rights hereunder shall not be exhausted by any action taken by the Lessor until all Guaranteed Obligations have been fully paid and performed.

 

  

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27.3 Lessor’s Right to Amend this Lease.  The Guarantor authorizes the Lessor, at any time and from time to time without notice and without affecting the liability of the Guarantor under this Guaranty, to: (a) alter the terms of all or any part of the Guaranteed Obligations and any security and guaranties therefor including without limitation modification of times for payment and rates of interest; (b) accept new or additional instruments, documents, agreements, security or guaranties in connection with all or any part of the Guaranteed Obligations; (c) accept partial payments on the Guaranteed Obligations; (d) waive, release, reconvey, terminate, abandon, subordinate, exchange, substitute, transfer, compound, compromise, liquidate and enforce all or any part of the Guaranteed Obligations and any security or guaranties therefor, and apply any such security and direct the order or manner of sale thereof (and bid and purchase at any such sale), as the Lessor in its discretion may determine; (e) release any Lessee, any guarantor or any other Person from any personal liability with respect to all or any part of the Guaranteed Obligations; and (f) assign its rights under this Guaranty in whole or in part to the Master Collateral Agent and the Trustee.

 

27.4 Waiver of Certain Rights by Guarantor.  The Guarantor hereby waives each of the following to the fullest extent allowed by law:

 

(a) any defense to its obligations under this Guaranty based upon:

 

(i) the unenforceability or invalidity of any security or other guaranty for the Guaranteed Obligations or the lack of perfection or failure of priority of any security for the Guaranteed Obligations;

 

(ii) any act or omission of the Lessor or any other Person that directly or indirectly results in the discharge or release of any of the Lessees or any other Person or any of the Guaranteed Obligations or any security therefor; provided, that the Guarantor’s liability in respect of this Guaranty shall be released to the extent the Lessor expressly releases such Lessee or other Person, in a writing conforming to the requirements of Section 22, from any Guaranteed Obligations; or

 

(iii) any disability or any other defense of any Lessee or any other Person with respect to the Guaranteed Obligations, whether consensual or arising by operation of law or any bankruptcy, insolvency or debtor-relief proceeding, or from any other cause;

 

(b) any right (whether now or hereafter existing) to require the Lessor, as a condition to the enforcement of this Guaranty, to:

 

(i) accelerate the Guaranteed Obligations;

 

(ii) give notice to the Guarantor of the terms, time and place of any public or private sale of any security for the Guaranteed Obligations; or

 

(iii) proceed against any Lessee, any other guarantor or any other Person, or proceed against or exhaust any security for the Guaranteed Obligations;

 

  

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(c) presentment, demand, protest and notice of any kind, including without limitation notices of default and notice of acceptance of this Guaranty;

 

(d) all suretyship defenses and rights of every nature otherwise available under New York law and the laws of any other jurisdiction;

 

(e) any right that the Guarantor has or may have to set-off with respect to any right to payment from any Lessee; and

 

(f) all other rights and defenses the assertion or exercise of which would in any way diminish the liability of the Guarantor under this Guaranty.

 

27.5 Lessees’ Obligations to Guarantor and Guarantor’s Obligations to Lessees Subordinated.  Until all of the Guaranteed Obligations have been paid in full, the Guarantor agrees that all existing and future unsecured debts, obligations and liabilities of the Lessees to the Guarantor or the Guarantor to any of the Lessees (hereinafter collectively referred to as “Subordinated Debt”) shall be and hereby are expressly subordinated to the prior payment in full of the Guaranteed Obligations, on the terms set forth in clauses (a) through (e) below, and the payment thereof is expressly deferred in right of payment to the prior payment in full of the Guaranteed Obligations; provided, that the Subordinated Debt may be paid in accordance with its terms until such time as a Potential Amortization Event, an Amortization Event, a Potential Lease Event of Default or a Lease Event of Default shall have occurred and is continuing.  For purposes of this Section 27.5, to the extent the Guaranteed Obligations consist of the obligation to pay money, the Guaranteed Obligations shall not be deemed paid in full unless and until paid in full in cash.

 

(a) Upon any distribution of assets of the Guarantor or any Lessee upon any dissolution, winding up, liquidation or reorganization of the Guarantor or such Lessee, whether in bankruptcy, insolvency, reorganization or receivership proceedings, or upon an assignment for the benefit of creditors or any other marshaling of the assets and liabilities of the Guarantor or such Lessee, or otherwise:

 

(i) the holders of the Guaranteed Obligations shall be entitled to receive payment in full of the Guaranteed Obligations before the Guarantor or any Lessee, as the case may be, is entitled to receive any payment on account of the Subordinated Debt;

 

(ii) any payment by, or distribution of assets of, the Guarantor or such Lessee of any kind or character, whether in cash, property or securities, to which such Lessee or the Guarantor would be entitled except for this subordination shall be paid or delivered by the Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee, or otherwise, directly to the Trustee, for the benefit of the holders of the Guaranteed Obligations to be held as additional security for the Guaranteed Obligations in an interest bearing account until the Guaranteed Obligations have been paid in full; and

 

(iii) if, notwithstanding the foregoing, any payment by, or distribution of assets of, the Guarantor or such Lessee of any kind or character, whether in cash, property or securities, in respect of any Subordinated Debt shall be received by such Lessee or the Guarantor before the Guaranteed Obligations are paid in full, such payment or distribution shall be held in trust in an interest bearing account of the Guarantor or such Lessee, as appropriate, and immediately paid over in kind to the holders of the Guaranteed Obligations until the Guaranteed Obligations have been paid in full.

 

  

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(b) The Guarantor authorizes and directs each Lessee and each Lessee authorizes and directs the Guarantor to take such action as may be necessary or appropriate to effectuate and maintain the subordination provided herein.

 

(c) No right of any holder of the Guaranteed Obligations to enforce the subordination herein shall at any time or in any way be prejudiced or impaired by any act or failure to act on the part of the Guarantor, any Lessee, the Lessor or any other Person or by any noncompliance by the Guarantor, any Lessee, the Lessor or any other Person with the terms, provisions and covenants hereof or of the Related Documents with respect to the Group VII Series of Notes regardless of any knowledge thereof that any such holder of the Guaranteed Obligations may have or be otherwise charged with.

 

(d) Except as provided in Section 27.10, nothing express or implied in this Guaranty shall give any Person other than the Lessees, the Lessor, the Trustee and the Guarantor any benefit or any legal or equitable right, remedy or claim under this Guaranty.

 

(e) If the Guarantor shall institute or participate in any suit, action or proceeding against any Lessee or any Lessee shall institute or participate in any suit, action or proceeding against the Guarantor, in violation of the terms hereof, such Lessee or the Guarantor, as the case may be, may interpose as a defense or dilatory plea this subordination, and the holders of the Guaranteed Obligations are irrevocably authorized to intervene and to interpose such defense or plea in their name or in the name of such Lessee or the Guarantor, as the case may be.

 

27.6 Guarantor to Pay Lessor’s Expenses.  The Guarantor agrees to pay to the Lessor (or the Trustee), on demand, all costs and expenses, including reasonable attorneys’ and other professional and paraprofessional fees, incurred by the Lessor (or the Trustee) in exercising any right, power or remedy conferred by this Guaranty, or in the enforcement of this Guaranty, whether or not any action is filed in connection therewith.  Until paid to the Lessor, such amounts shall bear interest, commencing with the Lessor’s demand therefor, for each Interest Period during the period from the date of such demand until paid, at the VFR for such Interest Period plus 1% (calculated on the basis of a 360-day year).

 

27.7 Reinstatement.  This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time payment of any of the amounts payable by any Lessee under this Lease is rescinded or must otherwise be restored or returned by the Lessor, upon an event of bankruptcy, dissolution, liquidation or reorganization of any Lessee or the Guarantor or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any Lessee, the Guarantor, any other guarantor or any other Person, or any substantial part of their respective property, or otherwise, all as though such payment had not been made.

 

27.8 Pari Passu Indebtedness.  The Guarantor (i) represents and warrants that, as of the date hereof, the obligations of the Guarantor under this Guaranty will rank pari passu with any existing unsecured indebtedness of the Guarantor and (ii) covenants and agrees that from and after the date hereof the obligations of the Guarantor under this Guaranty will rank pari passu with any unsecured indebtedness of the Guarantor incurred after the date hereof.

 

  

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27.9 Tax Indemnity.  The Guarantor shall indemnify and hold harmless, the Lessor, the Trustee and the Group VII Noteholders from and against any and all income taxes, together with any interest and any penalties, additions to tax or additional amounts imposed by the Internal Revenue Service and/or any state or local income tax authority, and other losses, costs, liabilities, claims and expenses, including reasonable attorneys’ fees suffered or incurred by the Lessor or the Trustee, arising out of any disallowance by the Internal Revenue Service and/or any state or local income tax authority of any position taken by the Lessor or its Affiliates on any income tax return that gain is not recognized from the exchange of one or more Group VII Vehicles for property of like kind under Section 1031 of the Internal Revenue Code of 1986, as amended, and/or any corresponding provision of state or local income tax law.

 

27.10 Third-Party Beneficiaries.  The Guarantor acknowledges that the Trustee (on behalf of the Group VII Noteholders) has accepted the assignment of the Lessor’s rights under this Lease as collateral for such Notes in reliance on this Guaranty and that the Trustee (for the benefit of Group VII Noteholders) shall be a third-party beneficiary under this Guaranty.

 

SECTION 28. ADDITIONAL LESSEES.

 

28.1 Additional Lessees.  Any direct or indirect Subsidiary of the Guarantor, any Specified Change in Control Counterparty and any direct or indirect Subsidiary of a Specified Change in Control Counterparty (each, a “Permitted Lessee”) shall have the right to become a “Lessee” under and pursuant to the terms of this Lease by complying with the provisions of this Section 28.1.  If a Permitted Lessee desires to become a “Lessee” under this Lease, then the Guarantor and such Permitted Lessee shall execute (if appropriate) and deliver to the Lessor and the Trustee:

 

(a) a Joinder in Lease Agreement in the form attached hereto as Attachment D (each, an “Affiliate Joinder in Lease”);

 

(b) the certificate of incorporation or other organizational documents for such Permitted Lessee, duly certified by the Secretary of State of the jurisdiction of such Permitted Lessee’s incorporation or formation, together with a copy of the by-laws or other organizational documents of such Permitted Lessee, duly certified by a Secretary or Assistant Secretary or other Authorized Officer of such Permitted Lessee;

 

(c) copies of resolutions of the Board of Directors or other authorizing action of such Permitted Lessee authorizing or ratifying the execution, delivery and performance, respectively, of those documents and matters required of it with respect to this Lease, duly certified by the Secretary or Assistant Secretary or other Authorized Officer of such Permitted Lessee;

 

(d) a certificate of the Secretary or Assistant Secretary or other Authorized Officer of such Permitted Lessee certifying the names of the individual or individuals authorized to sign the Affiliate Joinder in Lease and the other Related Documents with respect to the Group VII Series of Notes to be executed by it, together with samples of the true signatures of each such individual;

 

  

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(e) a good standing certificate for such Permitted Lessee in the jurisdiction of its organization and the jurisdiction of its principal place of business;

 

(f) a written search report from a Person satisfactory to the Lessor and the Trustee listing all effective financing statements that name such Permitted Lessee as debtor or assignor, and that are filed in the jurisdictions in which filings were made pursuant to clause (g) below, together with copies of such financing statements, and tax and judgment lien search reports from a Person satisfactory to the Lessor and the Trustee showing no evidence of liens filed against such Permitted Lessee that purport to affect any Vehicles leased hereunder or any Collateral under each Group VII Indenture;

 

(g) evidence of the filing of proper financing statements on Form UCC-1 naming such Permitted Lessee, as debtor, and the Lessor as secured party covering the collateral described in Section 2(b) hereof;

 

(h) an Officer’s Certificate and an opinion of counsel each stating that such joinder by such Permitted Lessee complies with this Section 28.1 and that all conditions precedent herein provided for relating to such transaction have been complied with;

 

(i) a statement from each applicable Rating Agency, if any, referred to in the definition of “Rating Agency Condition” with respect to the relevant Series of Notes that such Permitted Lessee becoming a “Lessee” under this Lease will not cause a failure to meet the Rating Agency Condition; and

 

(j) any additional documentation that the Lessor or the Trustee may reasonably require to evidence the assumption by such Permitted Lessee of the obligations and liabilities set forth in this Lease.

 

Upon satisfaction of the foregoing conditions and receipt by such Permitted Lessee of the applicable Affiliate Joinder in Lease executed by the Lessor, such Permitted Lessee shall for all purposes be deemed to be a “Lessee” for purposes of this Lease (including, without limitation, the Guaranty which is a part of this Lease) and shall be entitled to the benefits and subject to the liabilities and obligations of a Lessee hereunder.

 

SECTION 29. BANKRUPTCY PETITION AGAINST LESSOR.  Each Lessee and the Guarantor hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of all Series of Notes issued by the Lessor, it will not institute against, or join any other Person in instituting against, the Lessor any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States.  If a Lessee (or any sublessee thereof) or the Guarantor takes action in violation of this Section 29, the Lessor agrees, for the benefit of the Noteholders of all Series of Notes, that it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such a petition by such Lessee or the Guarantor against the Lessor or the commencement of such action and raise the defense that such Lessee or the Guarantor, as applicable, has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as its counsel advises that it may assert.  The provisions of this Section 29 shall survive the termination of this Lease.

 

  

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SECTION 30. SUBMISSION TO JURISDICTION.  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY LESSEE OR THE GUARANTOR WITH RESPECT TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT MAY BE BROUGHT IN ANY STATE COURT OR (TO THE EXTENT PERMITTED BY LAW) FEDERAL COURT OF COMPETENT JURISDICTION IN THE BOROUGH OF MANHATTAN, IN NEW YORK, IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR AN AFFILIATE JOINDER IN LEASE, AS APPLICABLE, EACH LESSEE AND THE GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.  EACH LESSEE AND THE GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY STATE COURT OR (TO THE EXTENT PERMITTED BY LAW) FEDERAL COURT OF COMPETENT JURISDICTION IN THE BOROUGH OF MANHATTAN, IN NEW YORK, IN THE STATE OF NEW YORK AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  EACH LESSEE AND THE GUARANTOR DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, INC., 111 EIGHTH AVENUE, 13TH FLOOR, NEW YORK, NEW YORK 10011, AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY A LESSEE OR THE GUARANTOR AND AS SHALL IRREVOCABLY AGREE IN WRITING TO SERVE AS ITS AGENT, TO RECEIVE ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY EACH LESSEE AND THE GUARANTOR TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.  A COPY OF SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO EACH LESSEE OR THE GUARANTOR SO SERVED AT ITS ADDRESS PROVIDED IN THE APPLICABLE SIGNATURE PAGE HERETO OR THE APPLICABLE AFFILIATE JOINDER IN LEASE, EXCEPT THAT, UNLESS OTHERWISE PROHIBITED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS.  IF ANY AGENT APPOINTED BY A LESSEE OR THE GUARANTOR REFUSES TO ACCEPT SERVICE, EACH LESSEE AND THE GUARANTOR HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.  NOTHING HEREIN SHALL AFFECT THE RIGHTS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE LESSOR, THE MASTER COLLATERAL AGENT OR THE TRUSTEE TO BRING PROCEEDINGS AGAINST ANY LESSEE OR THE GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.

 

SECTION 31. GOVERNING LAW.  THIS LEASE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).  

 

  

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To the fullest extent permitted by law, whenever possible each provision of this Lease shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Lease shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Lease.  All obligations of the Lessees and the Guarantor and all rights of the Lessor, the Master Collateral Agent or the Trustee expressed herein shall be in addition to and not in limitation of those provided by applicable law or in any other written instrument or agreement.

 

SECTION 32. JURY TRIAL.  EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS LEASE OR ANY OTHER RELATED DOCUMENT TO WHICH IT IS A PARTY, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS LEASE OR ANY RELATED TRANSACTION, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

 

SECTION 33. NOTICES.  All notices, requests and other communications to any party or signatory hereunder shall be in writing (including facsimile transmission or similar writing) and shall be given to such party or signatory, addressed to it, at its address or facsimile number set forth on the signature pages below, or at such other address or facsimile number as such party may hereafter specify for such purpose by notice (in accordance with this Section 33) to the other parties and signatories hereto.  In each case, a copy of all notices, requests and other communications (other than any such notices, requests and other communications in the ordinary course of business) that are sent by any party or signatory hereunder shall be sent to the Trustee.  Copies of notices, requests and other communications delivered to the Trustee pursuant to the foregoing sentence shall be sent to the following address:

 

Deutsche Bank Trust Company Americas

60 Wall Street

New York, New York  10005

Attention:          Corporate Trust and Agency

Group/Structured Finance

Telephone:        (212) 250-4855

Facsimile:           (212) 553-2459

 

Each such notice, request or communication shall be effective when received at the address specified above or below.  Copies of all facsimile notices must be sent by first class mail promptly after such transmission by facsimile.

 

SECTION 34. HEADINGS.  Section headings used in this Lease are for convenience of reference only and shall not affect the construction of this Lease.

 

  

49

  

 

SECTION 35. EXECUTION IN COUNTERPARTS.  This Lease may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute one and the same agreement.

 

SECTION 36. EFFECTIVENESS.  This amendment and restatement of the Prior Agreement shall become effective on the date hereof, subject to (i) the requirement that the representations and warranties contained in Section 23 shall be true and correct in all respects (except to the extent any such representation and warranty does not incorporate a materiality limitation in its terms and the failure of such representation and warranty to be true and correct in all respects does not have a Material Adverse Effect on the interest of the Lessor, the Trustee or the secured parties under any Related Documents with respect to any Group VII Series of Notes) and (ii) the prior or concurrent delivery of each of the following documents to the Lessor (in form and substance satisfactory to the Lessor):

 

(a) Certificate of Incorporation.  The certificate of incorporation of each Lessee (other than the Additional Lessees) and the Guarantor, duly certified by the Secretary of State of the jurisdiction of its incorporation, together with a copy of its by-laws, duly certified by the Secretary or an Assistant Secretary of such Lessee or the Guarantor, as applicable;

 

(b) Resolutions.  Copies of resolutions of the Board of Directors of each Lessee (other than the Additional Lessees) and the Guarantor authorizing or ratifying the execution, delivery and performance of those documents and matters required of it with respect to this Lease, duly certified by the Secretary or Assistant Secretary of such Lessee or the Guarantor, as applicable;

 

(c) Consents, etc.  Certified copies of all documents evidencing any necessary corporate action, consents and governmental approvals (if any) with respect to this Lease;

 

(d) Incumbency and Signatures.  A certificate of the Secretary or an Assistant Secretary of each Lessee (other than the Additional Lessees) and the Guarantor certifying the names of the individual or individuals authorized to sign this Lease and the other Related Documents with respect to the Series 2010-3 Notes to be executed by it (in such capacity or otherwise), together with a sample of the true signature of each such individual (the Lessor, the Master Collateral Agent and the Trustee may conclusively rely on each such certificate until formally advised by a like certificate of any changes therein);

 

(e) Opinions of Counsel.  (i) The opinion of Latham & Watkins, addressed to the Lessees (other than the Additional Lessees), the Lessor, the Trustee, the Master Collateral Agent, the Enhancement Providers, if any, and each applicable Rating Agency; (ii) the opinion of Emmet, Marvin & Martin, LLP, counsel to the Trustee, addressed to the Lessees, the Lessor, the Master Collateral Agent and each Enhancement Provider, if any; and (iii) the opinions of Cleary Gottlieb Steen & Hamilton LLP, Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C. and an opinion of in-house counsel to DTAG, in each case, as counsel to the Lessees, the Lessor, the Servicers and the Master Servicer addressed to the Trustee, the Master Collateral Agent, the Enhancement Providers, if any, and each applicable Rating Agency, in each case, reasonably satisfactory in form and substance to the addressees thereof;

 

  

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(f) Good Standing Certificates.  Certificates of good standing for each Lessee (other than the Additional Lessees) and the Guarantor in the jurisdiction of its organization and the jurisdiction of its principal place of business;

 

(g) Search Reports.  Search reports satisfactory to the Lessor and the Trustee listing all effective financing statements that name a Lessee as debtor or assignor and that are filed in the jurisdictions in which filings were made pursuant to subsection (h) below, together with copies of such financing statements, and tax and judgment lien search reports from a Person satisfactory to the Lessor and the Trustee showing no evidence of such liens filed against such Lessee;

 

(h) Evidence.  Evidence of the filing of proper financing statements on Form UCC-1, (i) naming each Lessee (other than the Additional Lessees) as debtor and the Master Collateral Agent as secured party. or other similar instruments or documents as may be necessary or desirable under the UCC of all applicable jurisdictions to perfect the Master Collateral Agent’s interest in the Master Collateral with respect to which the Trustee is designated as the Beneficiary on behalf of the Group VII Noteholders and (ii) naming each Lessee (other than the Additional Lessees) as debtor, the Lessor as secured party and the Master Collateral Agent as assignee, as may be necessary or desirable under the UCC of all applicable jurisdictions to perfect the security interest (with respect to the Financing Lease) and the precautionary security interest (with respect to the Operating Lease) of the Lessor hereunder and the assignment of the same to the Master Collateral Agent;

 

(i) Master Collateral Agency Agreement.  An executed copy of the Master Collateral Agency Agreement and that certain Addendum to the Second Amended and Restated Master Collateral Agency Agreement (relating to the Group VII Series of Notes) dated as of the Closing Date for the Series 2010-3 Notes;

 

(j) Lease.  Original counterpart No. 1 of this Lease shall be delivered to the Trustee with receipt acknowledged thereby;

 

(k) Assignment Agreement.  An executed copy of the Assignment Agreement of each Manufacturer of Program Vehicles that will be leased under this Lease on the Closing Date for the Series 2010-3 Notes;

 

(l) Certified Copy of Vehicle Disposition Programs.  A copy of each Eligible Vehicle Disposition Program relating to Vehicles which will be leased hereunder and an Officer’s Certificate, dated the Closing Date for the Series 2010-3 Notes, and duly executed by an Authorized Officer of the Lessee, certifying that each such copy is true, correct and complete as of the Closing Date for the Series 2010-3 Notes;

 

(m) The Indenture Supplement.  Copies of the Series 2010-3 Supplement, dated as of the Series 2010-3 Restatement Closing Date, and the Base Indenture, in each case duly executed by the Lessor and the Trustee, and all conditions to the effectiveness thereof shall have been satisfied or waived in all respects;

 

  

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(n) Series 2010-3 Letter of Credit.  The Series 2010-3 Letter of Credit, issued by Deutsche Bank Trust Company Americas, with a stated amount as of the Series 2010-3 Restatement Closing Date of $50,000,000.

 

(o) Other.  Such other documents as the Trustee or the Lessor may reasonably request.

 

[Signatures on following pages.]

 

 

  

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IN WITNESS WHEREOF, the parties have executed this Lease or caused it to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

 

LESSOR:

 

RENTAL CAR FINANCE CORP.

 

 

By:___________________________

Name:

Title:

 

 

Address:            5330 East 31st Street

Tulsa, Oklahoma  74135

Attention:          H. Clifford Buster

Telephone:         918-669-2272

Facsimile:            918-669-2970

 

 

LESSEES AND SERVICERS:

 

DTG OPERATIONS, INC.

 

 

By:___________________________

Name:

Title:

 

 

Address:            5330 East 31st Street

Tulsa, Oklahoma  74135

Attention:          H. Clifford Buster

Telephone:         918-669-2272

Facsimile:            918-669-2970

 

 

  

MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT

  

 

GUARANTOR:

 

DOLLAR THRIFTY AUTOMOTIVE GROUP, 

INC.

 

 

By:___________________________

Name:

Title:

 

 

Address:            5330 East 31st Street

Tulsa, Oklahoma  74135

Attention:          H. Clifford Buster

Telephone:         918-669-2272

Facsimile:            918-669-2970

 

 

COUNTERPART NO. ___ OF TEN (10) SERIALLY NUMBERED MANUALLY EXECUTED COUNTERPARTS.  TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN MANUALLY EXECUTED COUNTERPART NO. 1

 

 

  

MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT

  

 

The Trustee does hereby acknowledge, by its signature below, receipt of this Counterpart No. 1.

 

 

TRUSTEE:

 

DEUTSCHE BANK TRUST COMPANY 

AMERICAS

 

 

 

By:____________________________

Name:_____________________

Title:______________________

 

 

By:____________________________

Name:_____________________

Title:______________________

 

 

 

Address:            60 Wall Street

New York, New York  10005

Attention:          Corporate Trust and Agency

Group/Structured Finance

Telephone:         (212) 250-2894

Facsimile:            (212) 553-2462

 

 

  

MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT

  

 

Acknowledged by:

 

MASTER COLLATERAL AGENT:

 

DEUTSCHE BANK TRUST COMPANY AMERICAS

 

 

By:_____________________________

Name:______________________

Title:_______________________

 

 

By:_____________________________

Name:_______________________

Title:________________________ 

 

 

Address:            60 Wall Street

New York, New York  10005

Attention:          Corporate Trust and Agency

Group/Structured Finance

Telephone:        (212) 250-2894

Facsimile:           (212) 553-2462

 

  

2

  

 

APPENDIX 1

 

Definitions List

 

“Acquired Vehicles” has the meaning given to it in the applicable Series Supplement.

 

“Additional Lessee” has the meaning given to it in the preamble to the Base Lease.

 

“Affiliate” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Affiliate Joinder in Lease” has the meaning given to it in Section 28.1(a) of the Base Lease.

 

“Aggregate Asset Amount” has the meaning given to it in the applicable Series Supplement.

 

“Aggregate Principal Balance” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Agreement” has the meaning given to it in the preamble to the Base Lease.

 

“Amortization Event”, with respect to each Group VII Series of Notes, has the meaning given to it in Schedule 1 to the Base Indenture, as supplemented by the Series Supplement with respect to such Series of Notes.

 

“Annual Certificate” has the meaning given to it in Section 24.4(g) of the Base Lease.

 

“Asset Amount Deficiency” has the meaning given to it in the applicable Series Supplement.

 

“Assignment Agreement” has the meaning given to it in the applicable Series Supplement.

 

“Auction Procedures” has the meaning given to it in the applicable Series Supplement.

 

“Authorized Officer” has the meaning given to it in the applicable Series Supplement.

 

“Availability Payment” has the meaning given to it in Section 5.2 of the Base Lease.

 

“Back-Up Disposition Agent” the meaning given to it in the applicable Series Supplement.

 

“Back-Up Disposition Agent Agreement” the meaning given to it in the applicable Series Supplement.

 

“Back-Up Servicer” the meaning given to it in the applicable Series Supplement.

 

  

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“Back-Up Servicing Agreement” the meaning given to it in the applicable Series Supplement.

 

“Bankruptcy Code” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Base Amount” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Base Indenture” has the meaning given to it in Section 1.1 of the Base Lease.

 

“Base Lease” has the meaning given to it in the preamble to the Amended and Restated Master Motor Vehicle Lease and Servicing Agreement (Group VII), dated as of September 29, 2011, by and among RCFC, DTG Operations, as Lessee and Servicer, and those Subsidiaries of DTAG from time to time becoming Lessees thereunder, and DTAG as Master Servicer and Guarantor.

 

“Beneficiary” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Board of Directors” has the meaning given to it in the applicable Series Supplement.

 

“Business Day” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Capitalized Cost” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Carrying Charges” has the meaning given to it in the applicable Series Supplement.

 

“Casualty” has the meaning given to it in the applicable Series Supplement.

 

“Casualty Payment” has the meaning given to it in Section 7 of the Base Lease.

 

“Certificates of Title” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Clearing Agencies” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Closing Date” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Code” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Collateral” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Collections” has the meaning given to it in the applicable Series Supplement.

 

“Collection Account” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Condition Report” has the meaning given to it in the applicable Series Supplement.

 

“Confirmation Condition” has the meaning given to it in Section 18 of the Base Lease.

 

“Contractual Obligation” has the meaning given to it in Schedule 1 to the Base Indenture.

 

  

4

  

 

“Controlled Group” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Court” has the meaning given to it in Section 2(b) of the Base Lease.

 

“Daily Report” has the meaning given to it in Section 24.4(a) of the Base Lease.

 

“Defaulting Manufacturer” has the meaning given to it in Section 18 of the Base Lease.

 

“Definitions List” has the meaning given to it in Section 1.1 of the Base Lease.

 

“Depreciation Charge” has the meaning given to it in the applicable Series Supplement.

 

“Depreciation Schedule” has the meaning given to it in the applicable Series Supplement.

 

“Determination Date” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Disposition Date” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Disposition Proceeds” has the meaning given to it in the applicable Series Supplement.

 

“DTAG” has the meaning given to it in the preamble to the Base Lease.

 

“DTG Operations” has the meaning given to it in the preamble to the Base Lease.

 

“Due Date” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Eligible Franchisee” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Eligible Manufacturer” has the meaning given to it in the applicable Series Supplement.

 

“Eligible Receivable” has the meaning given to it in the applicable Series Supplement.

 

“Eligible Vehicle” has the meaning given to it in the applicable Series Supplement.

 

“Eligible Vehicle Disposition Program” has the meaning given to it in the applicable Series Supplement.

 

“Enhancement” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Enhancement Provider”, with respect to each Group VII Series of Notes, has the meaning given to it in the applicable Series Supplement.

 

“ERISA” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Escrow Account” has the meaning given to it in the applicable Series Supplement.

 

“Event of Bankruptcy” has the meaning given to it in the applicable Series Supplement.

 

  

5

  

 

“Excess Damage Charges” has the meaning given to it in the applicable Series Supplement.

 

“Excess Mileage Charges” has the meaning given to it in the applicable Series Supplement.

 

“Financed Vehicle” has the meaning given to it in the applicable Series Supplement.

 

“Financing Lease” has the meaning given to it in paragraph 1 of Annex B of the Lease.

 

“Financing Sources” has the meaning given to it in the applicable Series Supplement.

 

“Franchisee” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“GAAP” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Governmental Authority” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Group VII Collateral” has the meaning given to it in the applicable Series Supplement.

 

“Group VII Collection Account” has the meaning given to it in the applicable Series Supplement.

 

“Group VII Indenture” has the meaning given to it in Section 1.1 of the Base Lease.

 

“Group VII Master Collateral” has the meaning given to it in the applicable Series Supplement.

 

“Group VII Noteholders” has the meaning given to it in the applicable Series Supplement.

 

“Group VII Series of Notes” has the meaning given to it in the applicable Series Supplement.

 

“Group VII Series Supplement” has the meaning given to it in Section 1.1 of the Base Lease.

 

“Group VII Supplemental Servicing Fee” has the meaning given to it in Section 26.1 of the Base Lease.

 

“Group VII Vehicle” has the meaning given to it in the applicable Series Supplement.

 

“Guaranteed Obligations” has the meaning given to it in Section 27.1 of the Base Lease.

 

“Guaranteed Payment” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Guarantor” has the meaning given to it in the preamble to the Base Lease.

 

  

6

  

 

“Guaranty” has the meaning given to it in Section 27.1 of the Base Lease.

 

“Incentive Payment” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Indemnified Persons” has the meaning given to it in Section 15.1 of the Base Lease.

 

“Indenture” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Initial Acquisition Cost” has the meaning given to it in Section 2.3 of the Base Lease.

 

“Interest Period” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Invested Amount” has the meaning given to it in the applicable Series Supplement.

 

“Invested Percentage” has the meaning given to it in the applicable Series Supplement.

 

“Issuer” has the meaning given to it in the applicable Series Supplement.

 

“Late Return Payment” has the meaning given to it in Section 13 of the Base Lease.

 

“Lease” has the meaning given to it in the preamble to the Base Lease.

 

“Lease Annex” has the meaning given to it in the applicable Series Supplement.

 

“Lease Commencement Date” has the meaning given to it in Section 3.2 of the Base Lease.

 

“Lease Event of Default” has the meaning given to it in Section 17.1 of the Base Lease.

 

“Lease Expiration Date” has the meaning given to it in Section 3.2 of the Base Lease.

 

“Lessee” has the meaning given to it in the preamble to the Base Lease.

 

“Lessee Agreements” has the meaning given to it in the applicable Series Supplement.

 

“Lessee Grantor Master Collateral” has the meaning given to it in Section 1.1 of the Master Collateral Agency Agreement.

 

“Lessor” has the meaning given to it in the preamble to the Base Lease.

 

“Lien” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Limited Liquidation Event of Default”, with respect to each Group VII Series of Notes, has the meaning given to it in the applicable Series Supplement.

 

“Liquidation Event of Default” has the meaning given to it in the applicable Series Supplement.

 

“Manufacturer” has the meaning given to it in Schedule 1 to the Base Indenture.

 

  

7

  

 

“Manufacturer Event of Default” has the meaning given to it in Section 18 of the Base Lease.

 

“Manufacturer Receivable” has the meaning given to it in the applicable Series Supplement.

 

“Manufacturer Receivable Due Date” has the meaning given to it in Section 18 of the Base Lease.

 

“Master Collateral” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Master Collateral Account” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Master Collateral Agency Agreement” has the meaning given to it in the applicable Series Supplement.

 

“Master Collateral Agent” has the meaning given to it in the applicable Series Supplement.

 

“Master Lease” has the meaning given to it in the applicable Series Supplement.

 

“Master Lease Collateral” has the meaning given to it in the applicable Series Supplement.

 

“Master Servicer” has the meaning given to it in the preamble to the Base Lease.

 

“Material Adverse Effect” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Maximum Lease Commitment” has the meaning given to it in the applicable Series Supplement.

 

“Maximum Manufacturer Percentage” has the meaning given to it in the applicable Series Supplement.

 

“Maximum Program Percentage” has the meaning given to it in the applicable Series Supplement.

 

“Maximum Term” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Maximum Vehicle Lease Term” has the meaning given to it in paragraph 5 of each of Annex A and Annex B, as applicable, of the Lease.

 

“Minimum Term” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Monthly Base Rent” has the meaning given to it in paragraph 9 of Annex A of the Lease and paragraph 6 of Annex B of the Lease, as applicable.

 

  

8

  

 

“Monthly Certificate” has the meaning given to it in Section 24.4(b) of the Base Lease.

 

“Monthly Finance Rent” has the meaning given to it in paragraph 6 of Annex B of the Lease.

 

“Monthly Servicing Fee” has the meaning given to it in Section 26.1 of the Base Lease.

 

“Monthly Supplemental Payment” has the meaning given to it in paragraph 6 of Annex B of the Lease.

 

“Monthly Variable Rent” has the meaning given to it in paragraph 9 of Annex A of the Lease.

 

“Monthly Vehicle Statement” has the meaning given to it in Section 24.4(f) of the Base Lease.

 

“Net Book Value” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Non-Program Vehicle” has the meaning given to it in the applicable Series Supplement.

 

“Non–Program Vehicle Report” has the meaning given to it in Section 24.4(h) of the Base Lease.

 

“Non–Program Vehicle Termination Payment” has the meaning given to it in Section 12.3 of the Base Lease.

 

“Note Owner” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Noteholder” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Notes” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Notice of Claim” has the meaning given to it in Section 15.4 of the Base Lease.

 

“Officer’s Certificate” has the meaning given to it in the applicable Series Supplement.

 

“Operating Lease” has the meaning given to it in paragraph 1 of Annex A of the Lease.

 

“Opinion of Counsel” has the meaning given to it in the applicable Series Supplement.

 

“Outstanding” has the meaning given to it in Schedule 1 to Base Indenture.

 

“Paying Agent” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Payment Date” has the meaning given to it in the applicable Series Supplement.

 

“Pension Plan” has the meaning given to it in Schedule 1 to the Base Indenture.

 

 “Permitted Investments” has the meaning given to it in the applicable Series Supplement.

 

  

9

  

 

“Permitted Lessee” has the meaning given to it in Section 28.1 of the Base Lease.

 

“Permitted Liens” has the meaning given to it in Section 25.3 of the Base Lease.

 

“Person” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Pool Factors” has the meaning given to it in the applicable Series Supplement.

 

“Potential Lease Event of Default” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Power of Attorney” has the meaning given to it in Section 9 of the Base Lease.

 

“Pro Rata Share” has the meaning given to it in the applicable Series Supplement.

 

“Proceeding” has the meaning given to it in Section 18 of the Base Lease.

 

“Program Vehicle” has the meaning given to it in the applicable Series Supplement.

 

“Program Vehicle Termination Payment” has the meaning given to it in Section 12.3 of the Base Lease.

 

“Qualified Insurer” has the meaning given to it in Section 6.1 of the Base Lease.

 

“Qualified Intermediary” has the meaning given to it in the applicable Series Supplement.

 

“Rating Agency” has the meaning given to it in the applicable Series Supplement.

 

“Rating Agency Condition” has the meaning given to it in the applicable Series Supplement.

 

“RCFC” has the meaning given to it in the preamble to the Base Lease.

 

“RCFC Agreements” has the meaning given to it in the applicable Series Supplement.

 

“Refinanced Vehicles” has the meaning given to it in Section 2.1 of the Base Lease.

 

“Refinancing Schedule” has the meaning given to it in Section 2.1 of the Base Lease.

 

“Related Documents” has the meaning given to it in the applicable Series Supplement.

 

“Related Month” has the meaning given to it in the applicable Series Supplement.

 

“Rent” has the meaning given to it in paragraph 9 of Annex A of the Lease and paragraph 6 of Annex B of the Lease, as applicable.

 

“Reporting Date” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Repurchase Payment” has the meaning given to it in Schedule 1 to the Base Indenture.

 

  

10

  

 

“Required Beneficiaries” has the meaning given to it in the applicable Series Supplement.

 

“Required Noteholders” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Requirements of Law” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Responsible Officer” has the meaning given to it in the applicable Series Supplement.

 

“Retained Interestholder” has the meaning given to it in the applicable Series Supplement.

 

“Series” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Series 2010-3 Notes” has the meaning given to it in the Series 2010-3 Supplement.

 

“Series 2010-3 Supplement” has the meaning given to it in Section 1.1 of the Base Lease.

 

“Series Monthly Servicing Fee” has the meaning given to it in Section 26.1 of the Base Lease.

 

“Series Supplement” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Servicer” has the meaning given to it in the preamble to the Base Lease.

 

“Servicer Default” has the meaning given to it in Section 17.7 of the Base Lease.

 

“Specified Change in Control Counterparty” has the meaning given to it in the applicable Series Supplement.

 

“Sublease” has the meaning given to it in the applicable Series Supplement.

 

“Subordinated Debt” has the meaning given to it in Section 27.5 of the Base Lease.

 

“Subsidiary” has the meaning given to it in Schedule 1 to the Base Indenture

 

“Supplement” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Supplemental Documents” has the meaning given to it in Section 2.1 of the Base Lease.

 

“Term” has the meaning given to it in Section 3.2 of the Base Lease.

 

“Termination Payment” has the meaning given to it in Section 12.3 of the Base Lease.

 

“Trustee” has the meaning given to it in Section 1.1 of the Base Lease.

 

“UCC” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Vehicle” has the meaning given to it in Schedule 1 to the Base Indenture.

 

  

11

  

 

“Vehicle Acquisition Schedule” has the meaning given to it in Section 2.1 of the Base Lease.

 

“Vehicle Disposition Program” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Vehicle Funding Date” has the meaning given to it in Section 3.1 of the Base Lease.

 

“Vehicle Lease Commencement Date” has the meaning given to it in Section 3.1 of the Base Lease.

 

“Vehicle Lease Expiration Date” has the meaning given to it in the applicable Series Supplement.

 

“Vehicle Order” has the meaning given to it in Section 2.1 of the Base Lease.

 

“Vehicle Purchase Price” has the meaning given to it in Schedule 1 to the Base Indenture.

 

“Vehicle Term” has the meaning given to it in Section 3.1 of the Base Lease.

 

“vehicle turn–in condition” has the meaning given to it in Section 12.1 of the Base Lease.

 

“VFR” has the meaning given to it in paragraph 9 of Annex A of the Lease and paragraph 6 of Annex B of the Lease, as applicable.

 

“VIN” has the meaning given to it in Section 18 of the Base Lease.

 

“Welfare Plan” has the meaning given to it in Schedule 1 to the Base Indenture.

 

  

12

  

 

ANNEX A

 

ANNEX

 

to the

 

AMENDED AND RESTATED MASTER MOTOR VEHICLE LEASE

AND SERVICING AGREEMENT (GROUP VII)

 

Dated as of September 29, 2011

 

among

 

RENTAL CAR FINANCE CORP.

as Lessor,

 

DTG OPERATIONS, INC.,

as Lessee and Servicer,

 

and those Subsidiaries

of Dollar Thrifty Automotive Group, Inc.

from time to time

becoming Lessees and Servicers under such Master Motor

Vehicle Lease and Servicing Agreement

 

and

 

DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.

as Guarantor and Master Servicer

 

  

  

  

 

1. Scope of Annex.  This Annex A shall supplement the Base Lease but shall apply only to the acquisition, leasing and servicing of the Acquired Vehicles by the Lessor pursuant to the Base Lease, as supplemented by this Lease Annex (collectively, this “Operating Lease”).

 

2. General Agreement.  With respect to the Acquired Vehicles, each Lessee and the Lessor each intend that the Base Lease, as supplemented by this Lease Annex, is an operating lease and that the relationship between the Lessor and the Lessees pursuant thereto and hereto shall always be only that of lessor and lessee, and each Lessee hereby declares, acknowledges and agrees that the Lessor has title to and is the owner of the Acquired Vehicles.  The Lessees shall not acquire by virtue of the Lease any right, equity, title or interest in or to any Acquired Vehicles, except the right to use the same under the terms of this Operating Lease.  The parties agree that this Operating Lease is a “true lease” for all legal, accounting, tax and other purposes and agree to treat this Operating Lease, as it applies to the Acquired Vehicles, as an operating lease for all purposes, including tax, accounting and otherwise.  The parties will file all federal, state and local tax returns and reports in a manner consistent with the preceding sentence.

 

3. Operating Lease Commitment.  (a)  Upon the execution and delivery of this Operating Lease, the Lessor shall, subject to the terms and conditions of this Operating Lease, purchase or refinance from time to time on or after the Lease Commencement Date and prior to the Lease Expiration Date, all Acquired Vehicles identified in Vehicle Orders placed by a Lessee for a purchase price equal to the Initial Acquisition Cost thereof, and simultaneously therewith, the Lessor shall under this Operating Lease enter into operating leases with such Lessee with respect to such Vehicles; provided, that the aggregate Net Book Value of Acquired Vehicles leased hereunder on any date shall not exceed (a) the Maximum Lease Commitment, less (b) the Base Amount as of such date with respect to the Financing Lease.

 

4. Lease Procedures.  In connection with the lease of any Acquired Vehicles to be leased on or after the Lease Commencement Date, to evidence the acquisition of such Acquired Vehicles by the Lessor, the applicable Lessee shall deliver to the Lessor the following:

 

(a)           a Vehicle Order (including a Vehicle Acquisition Schedule) with respect to all Acquired Vehicles to be leased by such Lessee on or after the Lease Commencement Date;

 

(b)           UCC termination statements terminating, or UCC partial releases releasing, any security interests and other liens (other than Permitted Liens) in favor of any Person with respect to each Acquired Vehicle leased on or after the Lease Commencement Date and identified in such Vehicle Order, and any related Vehicle Disposition Programs;

 

(c)           with respect to the initial lease of Acquired Vehicles by such Lessee, a fully executed Assignment Agreement covering each Program Vehicle leased under this Annex A on or after the Lease Commencement Date, the related Vehicle Disposition Programs, and any other Master Collateral relating to such Vehicles.

 

Each Lessee hereby agrees that each such delivery of a Vehicle Order shall be deemed hereunder to constitute a representation and warranty by the Lessee, to and in favor of the Lessor and the Trustee, that all the conditions precedent to the acquisition and leasing of the Vehicles identified in such Vehicle Order have been satisfied as of the date of such Vehicle Order.

 

  

2

  

 

5. Maximum Vehicle Lease Term.  The maximum lease term of the Operating Lease as it relates to each Acquired Vehicle leased hereunder shall be from the Vehicle Lease Commencement Date to the date that is 36 months from the date of the original new vehicle dealer invoice for such Acquired Vehicle (such lease term with respect to an Acquired Vehicle, the “Maximum Vehicle Lease Term”).  On the occurrence of such date for a Vehicle not previously disposed of, the applicable Lessee shall comply with the applicable provisions of the Base Lease with respect to such Vehicle.

 

6. Lessee’s Rights to Purchase Vehicles.  Each Lessee will have the option, exercisable with respect to any Acquired Vehicle during the Vehicle Term with respect to such Acquired Vehicle, to purchase any Vehicles leased by it under this Operating Lease at the Vehicle Purchase Price, in which event such Lessee will pay the Vehicle Purchase Price to the Master Collateral Agent on or before the Due Date next succeeding such purchase by the Lessee plus all accrued and unpaid Monthly Base Rent and Monthly Variable Rent with respect to such Vehicle through the date of such purchase.  In addition, each Lessee will have the option, exercisable with respect to any Manufacturer Receivable related to an Acquired Vehicle which was leased by such Lessee under this Operating Lease, to purchase such Manufacturer Receivable for a price equal to the amount due from the Manufacturer under such Manufacturer Receivable, in which event the Lessee will pay such amount to the Master Collateral Agent on or before the Payment Date next succeeding such purchase by the Lessee.  Upon receipt of such funds by the Master Collateral Agent, the Lessor, at the request of the Lessee, shall cause title to any such Vehicle or Manufacturer Receivable, as applicable, to be transferred to the applicable Lessee, and the lien of the Master Collateral Agent on such Vehicle shall be released thereby.

 

7. Vehicle Disposition.  The Lessor and each Lessee agree that, with respect to Acquired Vehicles, the applicable Lessee shall use its commercially reasonable efforts to deliver each Program Vehicle leased by it under this Operating Lease for sale in accordance with the applicable Auction Procedures or to return such related Program Vehicle to the related Manufacturer (a) not prior to the end of the Minimum Term for such Vehicle, and (b) not later than the end of the Maximum Term for such Vehicle; provided, however, if for any reason, such Lessee fails to deliver such a Program Vehicle to the applicable Manufacturer for repurchase by the Manufacturer or in accordance with the applicable Auction Procedures, in each case in accordance with the applicable Vehicle Disposition Program during the time period between the expiration of the Minimum Term and the expiration of the Maximum Term, such Lessee shall comply with the applicable provisions of the Base Lease with respect to such Vehicle.  Each Lessee shall, with respect to Acquired Vehicles leased by it under this Operating Lease, pay the equivalent of the Rent for the Minimum Term for Program Vehicles returned before the Minimum Term, regardless of actual usage, unless such a Program Vehicle is a Casualty, which will be handled in accordance with Section 7 of the Base Lease.  All Disposition Proceeds, Repurchase Payments and Guaranteed Payments due from the disposition of Program Vehicles pursuant to this paragraph 7 shall be due and payable to the Lessor as provided in paragraph 10(d) hereof.  The Lessor and each Lessee agree, with respect to Acquired Vehicles, that such Lessee shall use its commercially reasonable efforts to dispose of each Non-Program Vehicle leased to it under this Operating Lease 

 

  

3

  

 

(a) in a manner most likely to maximize proceeds from such disposition and consistent with industry practice and (b) within thirty-six (36) months after the date of the original new vehicle dealer invoice for such Vehicle.  All Disposition Proceeds due from the disposition of Non-Program Vehicles pursuant to this paragraph 7 shall be due and payable to the Lessor as provided in paragraph 10(d) hereof.

 

8. Lessor’s Right to Cause Vehicles to be Sold.  Notwithstanding anything to the contrary contained in this Operating Lease, the Lessor shall have the right, at any time after the date thirty (30) days prior to the expiration of the Maximum Term for any Program Vehicle leased under this Operating Lease, to require that the Lessee in respect of such Program Vehicle deliver such Program Vehicle to the Manufacturer for repurchase or, as applicable, to the designated auction site, or exercise commercially reasonable efforts to arrange for the sale of such Program Vehicle to a third party for a price that is no less than the Net Book Value thereof, in which event the Lessee shall, prior to the expiration of such Maximum Term, deliver such Vehicle to its Manufacturer or the designated auction site or arrange for the sale of such Program Vehicle to a third party for a price that is no less than the Net Book Value (or purchase the Program Vehicle itself from the Lessor for the Vehicle Purchase Price).  If a sale of the Program Vehicle is arranged by a Lessee prior to the expiration of such Maximum Term, then such Lessee shall deliver the Program Vehicle to the purchaser thereof, the Lien of the Master Collateral Agent on such Program Vehicle shall be released thereby, and such Lessee shall cause to be delivered to the Lessor the funds paid for such Program Vehicle by the purchaser.  If a Lessee is unable to arrange for a sale of the Program Vehicle prior to the expiration of such Maximum Term, then such Lessee shall cease attempting to arrange for such a sale and shall return such Program Vehicle to the applicable Manufacturer or tender such Program Vehicle in accordance with applicable Auction Procedures or purchase such Vehicle as herein provided.  In no event may any Program Vehicle be sold pursuant to this paragraph 8 (other than pursuant to a Vehicle Disposition Program) unless the funds to be paid to the Lessor arising out of such sale exceed the Net Book Value of such Vehicle less reasonably estimated Excess Mileage Charges, Excess Damage Charges and other similar charges imposed by the Manufacturer.

 

9. Calculation of Rent.  Rent shall be due and payable on a monthly basis as set forth in this paragraph 9:

 

“Monthly Base Rent”, with respect to each Due Date and each Acquired Vehicle leased under this Operating Lease on any day during the Related Month, shall be the sum of all Depreciation Charges that have accrued with respect to such Vehicle during the Related Month.

 

“Monthly Variable Rent”, with respect to each Due Date and each Acquired Vehicle leased under this Operating Lease on any day during the Related Month, shall equal the sum, without double counting, of (a) the product of (i) an amount equal to the Net Book Value of such Acquired Vehicle on the first day contained within both the Related Month and the Vehicle Term with respect to such Vehicle multiplied by the VFR for the Interest Period ending on the next succeeding Payment Date and (ii) the quotient obtained by dividing (A) the number of days contained within both the Related Month and the Vehicle Term with respect to such Acquired Vehicle by (B) the total number of days in the Related Month plus (b) the product of (i) an amount equal to all Carrying Charges for the Related Month with respect to the Group VII Series of Notes, 

 

  

4

  

 

and (ii) the quotient obtained by dividing the Net Book Value of such Acquired Vehicle as of the first day of the Related Month by the Net Book Value of all Vehicles leased under the Lease as of the first day of the Related Month.

 

“Rent” means Monthly Base Rent plus Monthly Variable Rent.

 

“VFR”, for any Interest Period with respect to any Group VII Series of Notes, is an interest rate equal to the quotient, expressed as a percentage, of (i) the aggregate amount of interest (including default or penalty interest) accrued during such Interest Period with respect to all Group VII Series of Notes, divided by (ii) the average daily Aggregate Principal Balance of all such Group VII Series of Notes during such period.

 

10. Payment of Rent and Other Payments.

 

(a)           Monthly Base Rent.  On each Due Date, each Lessee shall pay to the Lessor the Monthly Base Rents that have accrued during the Related Month with respect to all Vehicles that were leased by such Lessee under this Operating Lease on any day during the Related Month;

 

(b)           Monthly Variable Rent.  On each Due Date, each Lessee shall pay to the Lessor the Monthly Variable Rents that have accrued during the Related Month with respect to all Vehicles that were leased by such Lessee under this Operating Lease on any day during the Related Month;

 

(c)           Termination Payments, Casualty Payments and Late Return Payments.  On each Due Date, each Lessee shall pay to the Lessor all Termination Payments, Casualty Payments and Late Return Payments with respect to Vehicles leased by such Lessee under this Operating Lease as provided in Section 5.4 of the Base Lease; and

 

(d)           Certain Other Payments.  Each Lessee shall cause all Disposition Proceeds, Repurchase Payments, Guaranteed Payments and Incentive Payments payable in respect of Acquired Vehicles leased by it under this Operating Lease, to be paid directly to the Master Collateral Agent for the benefit of the Beneficiaries.  The Servicer and the Lessees each agree that in the event that the Servicer or a Lessee shall receive directly any such payment, including cash, securities, obligations or other property, the Servicer or such Lessee, as the case may be, shall accept the same as the Master Collateral Agent’s agent and shall hold the same in trust on behalf of and for the benefit of the Master Collateral Agent, and shall deposit the same, within two (2) Business Days after receipt thereof, into the Master Collateral Account in the same form received, with the endorsement of the Servicer or such Lessee, as the case may be, when necessary or appropriate.  For purposes of the payment of Rent and other payments for any Related Month as described above in this Annex, such Rent and other payments will net out the amount of certain Incentive Payments payable for the benefit of the Lessee in respect of costs and expenses of the Lessee in connection with the leasing of the related Program Vehicle (including, without limitation, any “in-service retention bonus” and any compensation for leasing expenses in respect of Vehicles delivered to the Manufacturer and unsold at Auction) 

 

  

5

  

 

received by the Master Collateral Agent into the Master Collateral Account during such Related Month, but only to the extent that the aggregate amount of Disposition Proceeds, Repurchase Payments, Guaranteed Payments and Incentive Payments received during such Related Month on Acquired Vehicles disposed of under a Vehicle Disposition Program, as applicable, from the sale or other disposition of such Acquired Vehicle is at least equal to the aggregate Net Book Values of such Acquired Vehicles calculated as of the applicable Vehicle Lease Expiration Date.

 

11. Net Lease.  THIS OPERATING LEASE SHALL BE A NET LEASE, AND EACH LESSEE’S OBLIGATION TO PAY ALL RENT AND OTHER SUMS HEREUNDER SHALL BE ABSOLUTE AND UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY ABATEMENT OR REDUCTION FOR ANY REASON WHATSOEVER.  The obligations and liabilities of the Lessees hereunder shall in no way be released, discharged or otherwise affected (except as may be expressly provided in this Operating Lease, including, without limitation, the right of a Lessee to reject Vehicles pursuant to Section 2.2 of the Base Lease) for any reason, including without limitation:  (i) any defect in the condition, merchantability, quality or fitness for use of the Vehicles or any part thereof; (ii) any damage to, removal, abandonment, salvage, loss, scrapping or destruction of or any requisition or taking of the Vehicles or any part thereof; (iii) any restriction, prevention or curtailment of or interference with any use of the Vehicles or any part thereof; (iv) any defect in or any Lien on title to the Vehicles or any part thereof; (v) any change, waiver, extension, indulgence or other action or omission in respect of any obligation or liability of a Lessee or the Lessor; (vi) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to such Lessee, the Lessor or any other Person, or any action taken with respect to this Operating Lease by any trustee or receiver of any Person mentioned above, or by any court; (vii) any claim that such Lessee has or might have against any Person, including without limitation the Lessor; (viii) any failure on the part of the Lessor to perform or comply with any of the terms hereof or of any other agreement; (ix) any invalidity or unenforceability or disaffirmance of this Operating Lease or any provision hereof or any of the other Related Documents with respect to any Series of Notes or any provision of any thereof, in each case whether against or by such Lessee or otherwise; (x) any insurance premiums payable by such Lessee with respect to the Vehicles; or (xi) any other occurrence whatsoever, whether similar or dissimilar to the foregoing, whether or not such Lessee shall have notice or knowledge of any of the foregoing and whether or not foreseen or foreseeable.  This Operating Lease shall be noncancelable by any Lessee and, except as expressly provided herein, each Lessee, to the extent permitted by law, waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Operating Lease, or to any diminution or reduction of Rent payable by the Lessee hereunder.  All payments by a Lessee made hereunder shall be final (except to the extent of adjustments provided for herein), absent manifest error and, except as otherwise provided in this Operating Lease, no Lessee shall seek to recover any such payment or any part thereof for any reason whatsoever, absent manifest error.  If for any reason whatsoever this Operating Lease shall be terminated in whole or in part by operation of law or otherwise except as expressly provided herein, each Lessee shall nonetheless pay an amount equal to each Rent payment at the time and in the manner that such payment would have become due and payable under the terms of this Operating Lease as if it had not been terminated in whole or in part.  All covenants and agreements of each Lessee in this Operating Lease shall be performed at its cost, expense and risk unless expressly otherwise stated.

 

  

6

  

 

12. Liens.  Except for Permitted Liens, each Lessee shall keep all Acquired Vehicles leased by it free of all Liens arising during the Term.  Upon the Vehicle Lease Expiration Date for each Acquired Vehicle leased hereunder, the Lessor may, in its discretion, remove any such Lien and any sum of money that may be paid by the Lessor in release or discharge thereof, including reasonable attorneys’ fees and costs, will be paid by the applicable Lessee upon demand by the Lessor (if not otherwise provided for herein).  The Lessor may grant security interests in the Acquired Vehicles without consent of the applicable Lessee; provided, however, that if any such Liens would interfere with the rights of such Lessee under this Operating Lease or any sublessee of such Lessee, the Lessor must obtain the prior written consent of such Lessee.  Each Lessee acknowledges that the granting of Liens and the taking of other actions pursuant to each Group VII Indenture and the Related Documents with respect to any Group VII Series of Notes does not interfere with the rights of such Lessee under this Operating Lease.

 

13. Non-Disturbance.  So long as a Lessee satisfies its obligations hereunder, its quiet enjoyment, possession and use of the Acquired Vehicles will not be disturbed during the Term subject, however, to paragraph 8 of this Annex A and except that the Lessor, the Master Collateral Agent and the Trustee each retains the right, but not the duty, to inspect the Acquired Vehicles without disturbing the ordinary conduct of such Lessee’s business and except as may be required as a consequence of a Liquidation Event of Default or Limited Liquidation Event of Default (or any similar event under any Supplement to the Base Indenture relating to a Group VII Series of Notes) or certain optional prepayments of a Series of Notes.  Upon the request of the Lessor, the Master Collateral Agent or the Trustee, from time to time, each Lessee will make reasonable efforts to confirm to the Lessor, the Master Collateral Agent and the Trustee the location, mileage and condition of each Acquired Vehicle and to make available for the Lessor’s, the Master Collateral Agent’s or the Trustee’s inspection within a reasonable time period, not to exceed forty-five (45) days, the Acquired Vehicles leased by such Lessee at the location where the Acquired Vehicles are normally located.  Further, each Lessee (and each related Franchisee) will, during normal business hours and with a notice of three (3) Business Days, make its records pertaining to such Acquired Vehicles available to the Lessor, the Master Collateral Agent or the Trustee for inspection at the location where such Lessee’s (and each such related Franchisee’s) records are normally domiciled.

 

14. Certain Risks of Loss Borne by Lessees.  Upon delivery of each Acquired Vehicle to a Lessee, as between the Lessor and such Lessee, such Lessee assumes and bears the risk of loss, damage, theft, taking, destruction, attachment, seizure, confiscation or requisition and all other risks and liabilities with respect to such Vehicle, including personal injury or death and property damage, arising with respect to such Vehicle due to the manufacture, purchase, acceptance, rejection, delivery, leasing, subleasing, possession, use, inspection, registration, operation, condition, maintenance, repair or storage of such Vehicle, howsoever arising.

 

15. Title.  This is an agreement to lease only, and title to the Acquired Vehicles will at all times remain in the Lessor’s name.  The Lessees will not have any rights or interest in such Vehicles whatsoever other than the rights of possession and use and the right to sublease such Vehicles as provided by this Operating Lease.  

 

  

7

  

 

In addition, each Lessee, by its execution hereof, acknowledges and agrees that (i) the Lessor is the sole owner and holder of all right, title and interest in and to the Vehicle Disposition Programs as they relate to the Acquired Vehicles leased hereunder and (ii) such Lessee has no right, title or interest in any Vehicle Disposition Program as it relates to any such Vehicle leased hereunder.  To confirm the foregoing, each Lessee, by its execution of the Base Lease of which this Annex A is a part, hereby assigns and transfers to the Lessor any rights that such Lessee may have in respect of any Vehicle Disposition Programs as they relate to the Acquired Vehicles leased hereunder.

 

  

8

  

 

ANNEX B

 

ANNEX

 

to the

 

AMENDED AND RESTATED MASTER MOTOR VEHICLE LEASE

AND SERVICING AGREEMENT (GROUP VII)

 

Dated as of September 29, 2011

 

among

 

RENTAL CAR FINANCE CORP.

as Lessor,

 

DTG OPERATIONS, INC.,

as Lessee and Servicer,

 

and those Subsidiaries

of Dollar Thrifty Automotive Group, Inc.

from time to time

becoming Lessees and Servicers under such

Master Motor Vehicle Lease and

Servicing Agreement

 

 

and

 

 

DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.

as Guarantor and Master Servicer

 

  

  

  

 

1. Scope of Annex.  This Annex B shall supplement the Base Lease but apply only to the financing, leasing and servicing of the Financed Vehicles pursuant to the Base Lease, as supplemented by this Lease Annex (collectively, this “Financing Lease”).

 

2. General Agreement.  With respect to the Financed Vehicles, each Lessee and the Lessor each intend that the Base Lease, as supplemented by this Lease Annex, constitute a financing arrangement and the Lessor hereby declares, acknowledges and agrees that the ownership of the Financed Vehicles rests solely with such Lessee subject to the security interest granted hereunder to the Lessor.

 

3. Financing Lease Commitment.  Subject to the terms and conditions of this Financing Lease, upon execution and delivery of this Financing Lease, the Lessor shall (i) on or after the Lease Commencement Date finance or refinance Refinanced Vehicles identified in Refinancing Schedules for a purchase price equal to the aggregate Net Book Value thereof, and (ii) from time to time on or after the Lease Commencement Date and prior to the Lease Expiration Date finance all Financed Vehicles identified in Vehicle Orders placed by a Lessee for an amount equal to the Initial Acquisition Cost thereof, and in each case simultaneously therewith enter into this Financing Lease with such Lessee with respect to the Financed Vehicles; provided, that the Base Amount of this Financing Lease shall not on any date exceed (a) the Maximum Lease Commitment, less (b) the sum of (x) the sum of the Net Book Values of Acquired Vehicles leased under the Operating Lease on such date, each such Net Book Value calculated as of the first day contained within both the calendar month in which such date of determination occurs and the Vehicle Term for the related Acquired Vehicle, plus (y) accrued and unpaid Monthly Base Rent under the Operating Lease as of such date.

 

4. Lease Procedures.

 

(a)           Initial Lease.  In connection with the lease of any Financed Vehicles to be leased on the Lease Commencement Date (or, in the case of an Additional Lessee, the date of the initial Vehicle Order or Refinancing Schedule thereof), to evidence the refinancing of any Refinanced Vehicles and the acquisition and financing of any other Financed Vehicles by each Lessee on the Lease Commencement Date (or the date of such initial Vehicle Order) and the conveyance on such date of a security interest in such Financed Vehicles to the Master Collateral Agent, such Lessee shall have delivered to the Lessor on or prior to the Lease Commencement Date (or the date of such initial Vehicle Order or Refinancing Schedule) each of the documents set forth in Section 4.2 of the Base Lease and a Vehicle Order (including a Vehicle Acquisition Schedule) with respect to all Financed Vehicles (other than Refinanced Vehicles) to be leased by such Lessee on the Lease Commencement Date (or date of the initial Vehicle Order of such Additional Lessee, as applicable)

 

(b)           Subsequent Leases.  In connection with each lease of a Financed Vehicle after the Lease Commencement Date, to evidence the acquisition, financing or refinancing of such Financed Vehicle by the Lessor and the conveyance of a security interest in such Financed Vehicles to the Master Collateral Agent, each Lessee shall deliver to the Lessor a Vehicle Order (including a Vehicle Acquisition Schedule) or Refinancing Schedule with respect to all Financed Vehicles to be leased by such Lessee on the date specified therein.  

 

  

2

  

 

Each Lessee hereby agrees that each such delivery of a Vehicle Order or Refinancing Schedule, as applicable, shall be deemed hereunder to constitute a representation and warranty by such Lessee, to and in favor of the Lessor and the Trustee, that all the conditions precedent to the acquisition or financing or refinancing and leasing of the Vehicles identified in such Vehicle Order or Refinancing Schedule, as applicable,  have been satisfied as of the date of such Vehicle Order or Refinancing Schedule.

 

5. Maximum Vehicle Lease Term.  The maximum lease term of this Financing Lease as it relates to each Financed Vehicle leased hereunder shall be from the Vehicle Lease Commencement Date to the date that is 60 months from the Vehicle Lease Commencement Date (such lease term with respect to a Financed Vehicle, the “Maximum Vehicle Lease Term”).  On the occurrence of such latter date, the applicable Lessee shall pay to the Master Collateral Agent or the Trustee, in accordance with this Financing Lease, any amounts unpaid and owing under the Lease in respect of such Vehicle.

 

6. Calculation of Rent and Monthly Supplemental Payment.  Rent and the Monthly Supplemental Payment shall be due and payable on a monthly basis as set forth in this paragraph 6:

 

“Monthly Base Rent”, with respect to each Due Date and each Financed Vehicle leased under the Lease on any day during the Related Month, shall be the sum of all Depreciation Charges that have accrued with respect to such Vehicle during the Related Month.

 

“Monthly Finance Rent”, with respect to each Due Date and each Financed Vehicle leased under the Lease on any day during the Related Month, shall equal the sum, without double counting, of (a) the product of (i) an amount equal to the Net Book Value of such Financed Vehicle on the first day contained within both the Related Month and the Vehicle Term with respect to such Vehicle multiplied by the VFR for the Interest Period ending on the next succeeding Payment Date and (ii) the quotient obtained by dividing (A) the number of days contained within both the Related Month and the Vehicle Term with respect to such Financed Vehicle by (B) the total number of days in the Related Month, plus (b) the product of (i) an amount equal to all Carrying Charges for the Related Month with respect to the Group VII Series of Notes, and (ii) the quotient obtained by dividing the Net Book Value of such Financed Vehicle as of the first day of the Related Month by the Net Book Value of all Vehicles leased under the Lease as of the first day of the Related Month.

 

“Monthly Supplemental Payment” with respect to each Due Date and each Financed Vehicle shall be an amount equal to, without double counting, (a) the sum of, as applicable, (i) the aggregate amount of any Guaranteed Payment, Repurchase Payment, Disposition Proceeds and Incentive Payments received by the Lessor, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account) during the Related Month with respect to such Vehicle, (ii) the amount of any unpaid Guaranteed Payment or unpaid Repurchase Payment with respect to such Vehicle becoming a delinquent Guaranteed Payment due and owing from a Manufacturer but unpaid for 60 days or more from the date of Auction of the related Vehicle or delinquent Repurchase Payment due and owing from a Manufacturer but unpaid for 60 days or more from the date of turnback of a Program Vehicle, 

 

  

3

  

 

as the case may be, during the Related Month, (iii) the amount of any Disposition Proceeds with respect to such Vehicle becoming delinquent Disposition Proceeds due and owing from the purchaser of or auction facility for a Non-Program Vehicle but unpaid for a period of sixty (60) days or more from the date of sale of such Vehicle during the Related Month, (iv) the amount of any unpaid Incentive Payments with respect to such Vehicle becoming delinquent Incentive Payments due and owing from a Manufacturer but unpaid for sixty (60) days or more from the date of delivery of the related Vehicle in accordance with such Manufacturer’s incentive program or such other date in accordance with such program during the Related Month, (v) if such Vehicle becomes a Casualty or ceases to be an Eligible Vehicle (other than as a result of the sale or other disposition thereof), in each case during the Related Month, the Net Book Value of such Vehicle calculated as of the earlier of the last day of such Related Month and the date such Vehicle becomes a Casualty or is disposed of, as applicable, and (vi) if such Vehicle was returned to its Manufacturer for repurchase or sold to any Person or otherwise disposed of, in each case during the Related Month, the excess, if any, of (A) the Net Book Value of such Vehicle, calculated as of the applicable Vehicle Lease Expiration Date, over (B) the sum, without duplication, of all amounts (other than Incentive Payments) paid and/or payable in respect of such Vehicle pursuant to clauses (i) – (iii) and (v) above, less (b) the excess, if any, of (i) the aggregate amount of Disposition Proceeds, Guaranteed Payments or Repurchase Payments, as applicable, from the sale or other disposition of such Vehicle received by the Lessor, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account) during such Related Month over (ii) the Net Book Value of such Vehicle, calculated as of the applicable Vehicle Lease Expiration Date.

 

“Rent” means Monthly Base Rent plus Monthly Finance Rent.

 

“VFR”, for any Interest Period with respect to any Group VII Series of Notes, is an interest rate equal to the quotient, expressed as a percentage, of (i) the aggregate amount of interest (including default or penalty interest) accrued during such Interest Period with respect to all Group VII Series of Notes, divided by (ii) the average daily Aggregate Principal Balance of all such Group VII Series of Notes during such period.

 

7. Payment of Rent and Other Payments.

 

(a)  On each Due Date:

 

(i)           Monthly Base Rent.  Each Lessee shall pay to the Lessor the Monthly Base Rents that have accrued during the Related Month with respect to all Vehicles that were leased by such Lessee under this Finance Lease on any day during the Related Month; provided, however, that in the event that delinquent payments of Guaranteed Payments, Repurchase Payments, Disposition Proceeds and/or Incentive Payments are received by the Lessor, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account) during the Related Month, 

 

  

4

  

 

such payments may be netted against the Monthly Base Rents to be paid on such Due Date to the extent (but only to the extent) that Monthly Base Rent has already been received by any of such Persons in respect of such delinquent payment obligations pursuant to any or all of clauses (a)(ii), (iii) and (iv) of the definition of Monthly Supplemental Payment set forth in this Annex B;

 

(ii)           Monthly Finance Rent.  Each Lessee shall pay to the Lessor the Monthly Finance Rents that have accrued during the Related Month with respect to all Vehicles that were leased by such Lessee under this Finance Lease on any day during the Related Month.

 

(iii)           Monthly Supplemental Payments.  Each Lessee shall pay to the Lessor the Monthly Supplemental Payments that have accrued during the Related Month with respect to all Vehicles that were leased by such Lessee under this Finance Lease on any day during the Related Month; provided, however, that in the event that the Monthly Supplemental Payment accrued during a Related Month is a negative dollar amount, such amount may be netted against other payments to be paid on such Due Date pursuant to this paragraph 7.

 

(b)           On the expiration of the term of this Financing Lease with respect to a Financed Vehicle, any remaining portion of the Base Amount with respect to such Vehicle, plus all other amounts payable by each Lessee under this Financing Lease with respect to such Vehicle shall be immediately due and payable.

 

(c)           Each Lessee may from time to time prepay the applicable portion of the Base Amount of this Financing Lease with respect to a Financed Vehicle, in whole or in part, on any date, provided, that such Lessee shall give the Lessor and the Trustee not less than one (1) Business Day’s prior notice of any prepayment, specifying the date and amount of such prepayment, and the Financed Vehicles to which such prepayment relates.

 

8. Risk of Loss Borne by Lessees.  Upon delivery of each Financed Vehicle to a Lessee, as between the Lessor and such Lessee, such Lessee assumes and bears the risk of loss, damage, theft, taking, destruction, attachment, seizure, confiscation or requisition with respect to such Vehicle, however caused or occasioned, and all other risks and liabilities, including personal injury or death and property damage, arising with respect to such Vehicle or the manufacture, purchase, acceptance, rejection, ownership, delivery, leasing, subleasing, possession, use, inspection, registration, operation, condition, maintenance, repair, storage, sale, return or other disposition of such Vehicle, howsoever arising.

 

9. Lessee’s Rights to Purchase Manufacturer Receivables.  In addition, each Lessee will have the option, exercisable with respect to any Manufacturer Receivable related to a Financed Vehicle which was leased by such Lessee under this Financing Lease, to purchase such Manufacturer Receivable for a price equal to the amount due from the Manufacturer under such Manufacturer Receivable, in which event the Lessee will pay such amount to the Master Collateral Agent on or before the Payment Date next succeeding such purchase by the Lessee.  Upon receipt of such funds by the Master Collateral Agent, the Lessor, at the request of the Lessee, shall cause title to any such Manufacturer Receivable to be transferred to the Lessee, 

 

  

5

  

 

and the lien of the Master Collateral Agent in such Manufacturer Receivable will automatically be released concurrently with or promptly after the purchase price for such Manufacturer Receivable (and any unpaid Monthly Base Rent, unpaid Monthly Variable Rent and other unpaid charges, payments and amounts with respect to the related Vehicle) is paid by the Lessee to the Master Collateral Agent or the Trustee.

 

 

  

6

  

 

Schedule 1

 

Litigation Claims

 

None, other than those set forth in (i) Dollar Thrifty Automotive Group, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, or (ii) any other filings made by Dollar Thrifty Automotive Group, Inc. with the Securities and Exchange Commission on or prior to the date hereof in respect of the period since December 31, 2010.

 

 

  

  

  

 

Schedule 2

 

[Reserved]

 

 

  

  

  

 

Schedule 3

 

Business Locations

 

	
Legal Name and Trade Name

	
Chief Executive Office

Business Location

	
State of Principal 

Place of Business

	
States in which it 

Conducts Business or

Maintains Records

	
 

DTG OPERATIONS:

 

Legal Name:

DTG Operations, Inc.

 

Trade Names:

DTG Operations

Dollar

Dollar Rent A Car

Thrifty

Thrifty Car Rental

 

	
 

5330 East 31st Street

Tulsa, OK 74135

 

	
 

Oklahoma

 

	
 

Each of the 50 States 

from time to time

 

	
DTAG:

 

Legal Name:

Dollar Thrifty Automotive Group, 

Inc.

 

Trade Names:

Dollar

Dollar Rent A Car

Thrifty

Thrifty Car Rental

 

	
5330 East 31st Street

Tulsa, OK 74135

 

	
Oklahoma

 

	
Oklahoma and Florida

 

  

  

  

 

Schedule 4

 

Liens

 

NONE

 

  

  

  

ATTACHMENT A-1

 

 

Refinancing Schedule

 

Information on Refinanced Vehicles and Eligible Receivables

 

Refinanced Vehicles

 

1           Vehicle Group Number (Vehicle Model)

2           Vehicle Identification Number (last eight digits) (VIN)

3           Vehicle Lease Commencement Date

4           Capitalized Cost

5           Monthly Base Rent

6           Garaging State

7           Designated Period

8           Lienholder

9           Amount to pay off existing indebtedness

 

Eligible Receivables

 

1           identity of obligor

2           amount of receivable

3           date of origination of receivable

4           vehicle identification number (VIN) of vehicles to which receivable relates

             (grouped by obligor)

 

Statement by Lessee

The conditions precedent to leasing of the Refinanced Vehicles and financing of the Eligible Receivables under this Lease have been met.

Date of Information and Statement:  [___________]

 

 

  

  

  

 

ATTACHMENT A-2

 

Vehicle Acquisition Schedule

 

None.

 

 

  

  

  

ATTACHMENT B

 

FORM OF POWER OF ATTORNEY

 

KNOW ALL MEN BY THESE PRESENTS, that Rental Car Finance Corp., an Oklahoma corporation, does hereby make, constitute and appoint _______________ its true and lawful Attorney(s)-in-Fact for it and in its name, stead and behalf, to execute any and all documents pertaining to the titling of motor vehicles in the name of Rental Car Finance Corp., the noting of the lien of Deutsche Bank Trust Company Americas, a New York banking corporation, as Master Collateral Agent, as the first lienholder on certificates of title, the licensing and registration of motor vehicles and the transfer of title of motor vehicles.  This power is limited to the foregoing and specifically does not authorize the creation of any other liens or encumbrances on any of said motor vehicles, other than Permitted Liens (as defined in Schedule 1 to the Amended and Restated Base Indenture, dated as of February 14, 2007, between Rental Car Finance Corp., as Issuer, and Deutsche Bank Trust Company Americas, as Trustee (as such agreement may be further amended, amended and restated, supplemented or modified from time to time in accordance with its terms)).

 

The powers and authority granted hereunder shall, unless sooner terminated, revoked or extended, cease seven years from the date of execution as set forth below.

 

IN WITNESS WHEREOF, Rental Car Finance Corp. has caused this instrument to be executed on its behalf by its _____________ this ____ day of ________, 20__.

 

RENTAL CAR FINANCE CORP.

 

 

By:____________________________________

Name:______________________________

Title:_______________________________

 

 

 

State of ________________________ )

) ss.:

County of ______________________ )

 

Subscribed and sworn before me, a notary public, in and for said county and state, this ____ day of ___________, 20__.

 

_________________

Notary Public

 

My Commission Expires: __________

 

  

  

  

 

ATTACHMENT C

 

FORM OF CERTIFICATION OF TRADE OR BUSINESS USE

 

The undersigned, ___________ of Rental Car Finance Corp., an Oklahoma corporation, hereby warrants and certifies, under penalties of perjury, that (1) each Lessee intends to use the Acquired Vehicles in a trade or business of each Lessee, and (2) each Lessee has been advised that it will not be treated as the owner of the Acquired Vehicles for federal income tax purposes.

 

Defined terms otherwise not defined herein shall have the meanings assigned to such terms in Schedule 1 to the Amended and Restated Base Indenture, dated as of February 14, 2007, between Rental Car Finance Corp., as Issuer, and Deutsche Bank Trust Company Americas, a New York banking corporation, as Trustee (as such agreement may be further amended, supplemented or modified from time to time in accordance with its terms).

 

IN WITNESS WHEREOF, the undersigned has caused this certificate to be executed this ____ day of __________, 20__.

 

RENTAL CAR FINANCE CORP.

 

 

By:____________________________________

Name:______________________________

Title:_______________________________

 

 

  

  

  

ATTACHMENT D

 

FORM OF AFFILIATE JOINDER IN LEASE

 

THIS AFFILIATE JOINDER IN LEASE AGREEMENT (this “Joinder”) is executed as of _______________ ____, 20__, by ______________, a ____________________________ (“Joining Party”), and delivered to Rental Car Finance Corp., an Oklahoma corporation (“RCFC”), as lessor pursuant to the Amended and Restated Master Motor Vehicle Lease and Servicing Agreement (Group VII), dated as of September 29, 2011 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the “Lease”), among RCFC, as Lessor, DTG Operations, Inc., an Oklahoma corporation, as Lessee and Servicer, and those Subsidiaries of Dollar Thrifty Automotive Group, Inc., a Delaware corporation (“DTAG”), and other Permitted Lessees (as defined therein), from time to time becoming Lessees thereunder (individually, a “Lessee” and, collectively, the “Lessees”), and DTAG, as Guarantor.  Capitalized terms used herein but not defined herein shall have the meanings provided for in the Lease.

 

R E C I T A L S:

 

WHEREAS, the Joining Party is a Permitted Lessee; and

 

WHEREAS, the Joining Party desires to become a “Lessee” under and pursuant to the Lease.

 

NOW, THEREFORE, the Joining Party agrees as follows:

 

A G R E E M E N T:

 

1.  The Joining Party hereby represents and warrants to and in favor of RCFC and the Trustee that (i) the Joining Party is a [direct or indirect Subsidiary of DTAG][direct or indirect Subsidiary of][Specified Change in Control Counterparty], (ii) all of the conditions required to be satisfied pursuant to Section 28 of the Lease in respect of the Joining Party becoming a Lessee thereunder have been satisfied, and (iii) all of the representations and warranties contained in Section 23 of the Lease with respect to the Lessees are true and correct as applied to the Joining Party as of the date hereof.

 

2.  From and after the date hereof, the Joining Party hereby agrees to assume all of the obligations of a “Lessee” under the Lease and agrees to be bound by all of the terms, covenants and conditions therein.

 

3.  By its execution and delivery of this Joinder, the Joining Party hereby becomes a Lessee for all purposes under the Lease.  By its execution and delivery of this Joinder, RCFC acknowledges that the Joining Party is a Lessee for all purposes under the Lease.

 

  

  

  

 

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

 

[Name of Joining Party]

 

 

By:_________________________________

Name:___________________________

Title:____________________________

 

 

 

Address: ____________________________

Attention: ___________________________

Telephone: __________________________

Facsimile: ___________________________

 

 

Accepted and Acknowledged by:

 

RENTAL CAR  FINANCE CORP.

 

 

By:________________________________

Name:__________________________

Title:___________________________

 

 

  

2

  

ATTACHMENT E

 

Form of Annual Certificate

 

The undersigned, ________________ of DTG Operations, Inc. (the “Lessee”), does hereby certify that as of the date hereof:

 

1.           A review of the activities of the Lessee during the preceding fiscal year (or during the initial period from the initial Closing Date until April 15, 2011) and of its performance under the Amended and Restated Master Motor Vehicle Lease and Servicing Agreement (Group VII), dated as of September 29, 2011, among Dollar Thrifty Automotive Group, Inc., Rental Car Finance Corp. (the “Lessor”) and DTG Operations, Inc. (the “Agreement”), and the other Related Documents with respect to the Group VII Series of Notes to which the Lessee is a party has been made under the supervision of the undersigned,

 

2.           To the best of my knowledge, based on such review, [no event, has occurred, which, with the giving of notice or passage of time or both, would constitute a Lease Event of Default or Amortization Event.  The Lessee has fully performed all its obligations under this Agreement and such other Related Documents throughout such year.]  [If there has occurred such event or a Lease Event of Default or Amortization Event, specifying each such event known to the undersigned and the nature and status thereof.]

 

3.           All necessary Uniform Commercial Code continuation statements and other Uniform Commercial Code filings have been completed (including, without limitation, any “precautionary filings” made by the Lessees in favor of the Lessor), all necessary Assignment Agreements have been executed and delivered pursuant to Section 2.1 of the Master Collateral Agency Agreement, and all other actions, if any, required to maintain the perfected first priority security interest of the Trustee or the Master Collateral Agent on behalf of the Trustee in the Collateral and in the Master Collateral have been taken and the Trustee or the Master Collateral Agent, as applicable, continues to have a perfected security interest in the Collateral and Master Collateral (an opinion of _______________, counsel to the Lessee, is attached as Exhibit A to this effect).

 

All capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Agreement or, if not defined therein, in the Definitions List, attached as Schedule 1 to the Amended and Restated Base Indenture, dated as of February 14, 2007 (as such agreement may be amended, supplemented, restated or otherwise modified from time to time in accordance with its terms, the “Base Indenture”), between the Lessor and Deutsche Bank Trust Company Americas, as trustee, as in effect on the date hereof and as such Schedule 1 may be amended, supplemented or modified from time to time in accordance with the terms of the Base Indenture.

 

  

  

  

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate as an officer of DTG Operations, Inc. as of the ___________ day of _________, 20__.

 

By:___________________________________

Name:_________________________________

Title:__________________________________

 

 

 

  

2

  

 

ATTACHMENT F

 

Form of SubleaseExhibit 10.43

 

EXECUTION COPY

 

 

CUSIP Number: 858120AE8

 

$1,100,000,000

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of September 29, 2011

 

Among

 

STEEL DYNAMICS, INC.

as  Borrower

 

and

THE INITIAL LENDERS, INITIAL ISSUING BANK AND

SWING LINE BANK NAMED OR DESCRIBED HEREIN

as  Initial Lenders, Initial Issuing Bank  and  Swing Line Bank

 

and

PNC BANK, NATIONAL ASSOCIATION

as  Collateral Agent

 

and

 

PNC BANK, NATIONAL ASSOCIATION

as  Administrative Agent

 

and

BANK OF AMERICA, N.A.

WELLS FARGO BANK, NATIONAL ASSOCIATION

as  Syndication Agents

and

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

PNC CAPITAL MARKETS LLC

WELLS FARGO SECURITIES LLC

as  Joint  Lead  Arrangers  and  Joint  Bookrunners

and

 

DEUTSCHE BANK SECURITIES INC.

JPMORGAN CHASE BANK, N.A.

 

as  Documentation Agents

 

 

 

 

T A B L E  O F  C O N T E N T S

 

	
Section
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE   I
    
	
 
    
	
DEFINITIONS   AND ACCOUNTING TERMS
    
	
 
    	
 
    	
 
    
	
Section 1.01.
    	
Certain Defined Terms
    	
7
    
	
Section 1.02.
    	
Computation of Time Periods; Other Definitional Provisions
    	
36
    
	
Section 1.03.
    	
Accounting Terms
    	
36
    
	
Section 1.04.
    	
Exchange Rates; Currency Equivalents
    	
36
    
	
Section 1.05.
    	
Additional Alternative Currencies
    	
37
    
	
Section 1.06.
    	
Change of Currency
    	
37
    
	
Section 1.07.
    	
Letter of Credit Amounts
    	
38
    
	
 
    	
 
    	
 
    
	
ARTICLE   II
    
	
 
    
	
AMOUNTS   AND TERMS OF THE ADVANCES
    
	
AND THE   LETTERS OF CREDIT
    
	
 
    	
 
    	
 
    
	
Section 2.01.
    	
The Advances and the Letters of Credit
    	
38
    
	
Section 2.02.
    	
Making the Advances
    	
40
    
	
Section 2.03.
    	
Issuance of and Drawings and Reimbursement Under Letters of   Credit
    	
43
    
	
Section 2.04.
    	
Repayment of Advances
    	
46
    
	
Section 2.05.
    	
Termination or Reduction of the Commitments
    	
47
    
	
Section 2.06.
    	
Prepayments
    	
47
    
	
Section 2.07.
    	
Interest
    	
49
    
	
Section 2.08.
    	
Fees
    	
50
    
	
Section 2.09.
    	
Conversion and Continuation of Advances
    	
51
    
	
Section 2.10.
    	
Increased Costs, Etc.
    	
52
    
	
Section 2.11.
    	
Payments and Computations
    	
53
    
	
Section 2.12.
    	
Taxes
    	
55
    
	
Section 2.13.
    	
Sharing of Payments, Etc.
    	
57
    
	
Section 2.14.
    	
Use of Proceeds
    	
58
    
	
Section 2.15.
    	
Defaulting Lenders
    	
58
    
	
Section 2.16.
    	
Evidence of Debt
    	
60
    
	
Section 2.17.
    	
Increases in Revolving Credit Facility
    	
61
    
	
 
    	
 
    	
 
    
	
ARTICLE   III
    
	
 
    
	
CONDITIONS   OF EFFECTIVENESS, LENDING AND
    
	
ISSUANCES   OF LETTERS OF CREDIT
    
	
 
    	
 
    	
 
    
	
Section 3.01.
    	
Conditions Precedent to Initial Extension of Credit
    	
63
    
	
Section 3.02.
    	
Conditions Precedent to Each Borrowing and Issuance and   Renewal
    	
66
    

 

 

	
Section 3.03.
    	
Determinations Under Section 3.01
    	
67
    
	
 
    	
 
    	
 
    
	
ARTICLE   IV
    
	
 
    
	
REPRESENTATIONS   AND WARRANTIES
    
	
 
    	
 
    	
 
    
	
Section 4.01.
    	
Representations and Warranties of the Borrower
    	
68
    
	
 
    	
 
    	
 
    
	
ARTICLE   V
    
	
 
    
	
COVENANTS   OF THE BORROWER
    
	
 
    	
 
    	
 
    
	
Section 5.01.
    	
Affirmative Covenants
    	
74
    
	
Section 5.02.
    	
Negative Covenants
    	
79
    
	
Section 5.03.
    	
Reporting Requirements
    	
87
    
	
Section 5.04.
    	
Financial Covenants
    	
90
    
	
 
    	
 
    	
 
    
	
ARTICLE   VI
    
	
 
    
	
EVENTS OF   DEFAULT
    
	
 
    	
 
    	
 
    
	
Section 6.01.
    	
Events of Default
    	
90
    
	
Section 6.02.
    	
Actions in Respect of the Letters of Credit upon Default
    	
93
    
	
 
    	
 
    	
 
    
	
ARTICLE   VII
    
	
 
    
	
THE   AGENTS, ETC.
    
	
 
    	
 
    	
 
    
	
Section 7.01.
    	
Authorization and Action
    	
94
    
	
Section 7.02.
    	
Reliance, Etc.
    	
94
    
	
Section 7.03.
    	
Bank of America, N.A., PNC Bank, Wells Fargo Bank, National   Association and Affiliates
    	
95
    
	
Section 7.04.
    	
Lender Party Credit Decision
    	
95
    
	
Section 7.05.
    	
Indemnification
    	
95
    
	
Section 7.06.
    	
Successor Agents
    	
96
    
	
Section 7.07.
    	
The Joint Lead Arrangers, the Syndication Agents and the   Documentation Agents
    	
97
    
	
 
    	
 
    	
 
    
	
ARTICLE   VIII
    
	
 
    
	
MISCELLANEOUS
    
	
 
    	
 
    	
 
    
	
Section 8.01.
    	
Amendments, Etc.
    	
97
    
	
Section 8.02.
    	
Notices, Etc.
    	
98
    
	
Section 8.03.
    	
No Waiver; Remedies
    	
99
    
	
Section 8.04.
    	
Costs and Expenses
    	
99
    
	
Section 8.05.
    	
Right of Set-off
    	
101
    
	
Section 8.06.
    	
Binding Effect
    	
101
    

 

3

 

	
Section 8.07.
    	
Assignments and Participations
    	
102
    
	
Section 8.08.
    	
Replacement of Lenders
    	
105
    
	
Section 8.09.
    	
Execution in Counterparts
    	
106
    
	
Section 8.10.
    	
No Liability of the Issuing Banks
    	
106
    
	
Section 8.11.
    	
Confidentiality
    	
107
    
	
Section 8.12.
    	
Release of Collateral
    	
107
    
	
Section 8.13.
    	
Jurisdiction, Etc.
    	
107
    
	
Section 8.14.
    	
Governing Law
    	
108
    
	
Section 8.15.
    	
Reallocation and Assignment of Existing Facility
    	
108
    
	
Section 8.16.
    	
Effect of this Agreement
    	
108
    
	
Section 8.17.
    	
No Advisory or Fiduciary Responsibility
    	
109
    
	
Section 8.18.
    	
Patriot Act Notice
    	
109
    
	
Section 8.19
    	
Waiver of Jury Trial
    	
110
    

 

4

 

SCHEDULES

 

	
Schedule A
    	
-
    	
Existing   Letter of Credit
    
	
Schedule I
    	
-
    	
Commitments   and Applicable Lending Offices
    
	
Schedule II
    	
-
    	
Subsidiary   Guarantors
    
	
Schedule 4.01(a)
    	
-
    	
Loan   Parties
    
	
Schedule 4.01(b)
    	
-
    	
Subsidiaries
    
	
Schedule 4.01(d)
    	
-
    	
Authorizations,   Approvals, Actions, Notices and Filings
    
	
Schedule 4.01(f)
    	
-
    	
Disclosed   Litigation
    
	
Schedule 4.01(o)
    	
-
    	
Plans,   Multiemployer Plans and Welfare Plans
    
	
Schedule 4.01(q)
    	
-
    	
Open   Years
    
	
Schedule 4.01(s)
    	
-
    	
Existing   Debt
    
	
Schedule 4.01(t)
    	
-
    	
Surviving   Debt
    
	
Schedule 4.01(u)
    	
-
    	
Liens
    
	
Schedule 4.01(v)
    	
-
    	
Investments
    
	
Schedule 4.01(w)
    	
-
    	
Intellectual   Property
    

 

EXHIBITS

 

	
Exhibit   A
    	
-
    	
Form   of Revolving Credit Note
    
	
Exhibit   B
    	
-
    	
Form   of Notice of Borrowing
    
	
Exhibit   C
    	
-
    	
Form   of Assignment and Assumption
    
	
Exhibit   D
    	
-
    	
Form   of Security Agreement
    
	
Exhibit   E
    	
-
    	
Form   of Subsidiary Guaranty
    
	
Exhibit   F
    	
-
    	
Form   of Solvency Certificate
    
	
Exhibit   G-1
    	
-
    	
Form   of Opinion of Barrett & McNagny, LLC, Counsel to the Loan Parties
    
	
Exhibit   G-2
    	
-
    	
Form   of Opinion of Greenberg Traurig LLP, Counsel to the Loan Parties
    
	
Exhibit   H
    	
-
    	
Form   of Compliance Certificate
    

 

5

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

This AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 29, 2011 among Steel Dynamics, Inc., an Indiana corporation (the “Borrower”), the banks, financial institutions and other lenders listed on the signature pages hereof as the Initial Lenders (the “Initial Lenders”), PNC Bank, National Association (“PNC Bank”), as the Initial Issuing Bank (the “Initial Issuing Bank” and, together with the Initial Lenders, the “Initial Lender Parties”), PNC Bank, as the Swing Line Bank (as hereinafter defined), PNC Bank, as collateral agent (together with any successor collateral agent appointed pursuant to Article VII, in such capacity, the “Collateral Agent”), and PNC Bank, as administrative agent (together with any successor administrative agent appointed pursuant to Article VII, in such capacity, the “Administrative Agent” and, together with the Collateral Agent and the Paying Agent (as defined herein), the “Agents”), for the Lender Parties (as hereinafter defined), Bank of America, N.A. and Wells Fargo Bank, National Association, as Syndication Agents, Deutsche Bank Securities Inc. and JPMorgan Chase Bank, N.A., as Documentation Agents and Merrill Lynch, Pierce, Fenner & Smith Incorporated, PNC Capital Markets LLC and Wells Fargo Securities LLC, as Joint Lead Arrangers (in such capacity, the “Joint Lead Arrangers”) and Joint Bookrunners (in such capacity, the “Joint Bookrunners”).

 

PRELIMINARY STATEMENTS:

 

(1)                                  The Borrower entered into that certain Amended and Restated Credit Agreement dated as of June 19, 2007 and (as amended, supplemented or otherwise modified through the date hereof, the “Existing Credit Agreement”) with the lenders party thereto from time to time, PNC Bank, as agent for the lenders party thereto and Banc of America Securities LLC and PNC Capital Markets, as Joint Lead Arrangers and Bank of America, N.A. and PNC Capital Markets LLC, as the syndication agent thereunder, pursuant to which the lenders thereunder (the “Existing Lenders”) were committed to make extensions of credit to the Borrower on the terms and conditions set forth therein, including: (a) $924,000,000 in revolving credit loans, (b) a $100,000,000 letter of credit sublimit, including existing letters of credit separately issued by PNC Bank under the Existing Credit Agreement and listed on Schedule A hereto (the “Existing Letters of Credit”) and (c) a $40,000,000 swingline subfacility (together with the existing revolving credit facility and the Existing Letters of Credit, the “Existing Facility”).

 

(2)                                  The Borrower desires to refinance and/or rollover the amounts outstanding under the Existing Facility (the “Refinancing”).

 

(3)                                  In order to effect the Refinancing and to finance certain ongoing working capital and general corporate needs of the Borrower and the Subsidiary Guarantors, the Borrower desires to, among other things, increase the commitment to make revolving loans to an aggregate principal amount of up to $1,100,000,000, increase the letter of credit sublimit to an aggregate amount at any time outstanding of up to $150,000,000, increase the swingline subfacility to an aggregate principal amount of $50,000,000 and obtain Commitments to make Advances and other credit extensions as set forth herein.

 

6

 

(4)                                  In connection with the foregoing, the Borrower has requested that the Existing Credit Agreement be amended and restated in its entirety to become effective and binding on the Borrower pursuant to the terms hereof, and the Lenders (including the Existing Lenders that are parties hereto) have agreed (subject to the terms of this Agreement) to amend and restate the Existing Credit Agreement in its entirety to read as set forth herein, and it has been agreed by the parties hereto that (a) the commitments which the Existing Lenders that are parties hereto extended to the Borrower under the Existing Credit Agreement and the commitments of new Lenders that become parties hereto shall be extended or advanced upon the amended and restated terms and conditions contained in this Agreement and (b) to the extent the other Obligations outstanding under the Existing Credit Agreement are not refinanced in connection with the Refinancing, such Obligations shall be governed by and deemed to be outstanding under the amended and restated terms and conditions contained herein.

 

(5)                                  All existing Obligations that are not refinanced in connection with the Refinancing, are and shall continue to be (and all Obligations incurred pursuant hereto shall be) secured by, among other things, the Collateral Documents.

 

NOW, THEREFORE, the parties hereto hereby agree to amend and restate the Existing Credit Agreement, and the Existing Credit Agreement is hereby amended and restated, in its entirety as follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.01.                             Certain Defined Terms.  As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

“Administrative Agent” has the meaning specified in the recital of parties to this Agreement.

 

“Advance” means, a Revolving Credit Advance, a Swing Line Advance or a Letter of Credit Advance.

 

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person.  For purposes of this definition, the term “control” (including the terms “controlling”, “controlled by” and “under common control with”) of a Person means the possession, direct or indirect, of the power to vote 5% or more of the Voting Interests of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Interests, by contract or otherwise.

 

“Agents” has the meaning specified in the recital of parties to this Agreement.

 

“Agreement” means, on any date, the Existing Credit Agreement, as amended and restated by this Amended and Restated Credit Agreement and as hereafter from time to time

 

7

 

further amended, supplemented, amended and restated or otherwise modified from time to time and in effect on such date.

 

“Agreement Value” means, for each Hedge Agreement, on any date of determination, an amount equal to:  (a) in the case of a Hedge Agreement documented pursuant to the Master Agreement (Multicurrency-Cross Border) published by the International Swap and Derivatives Association, Inc. (the “Master Agreement”), the amount, if any, that would be payable by any Loan Party or any of its Subsidiaries to its counterparty to such Hedge Agreement, as if (i) such Hedge Agreement was being terminated early on such date of determination, and (ii) such Loan Party or Subsidiary was the sole “Affected Party”; or (b) in the case of a Hedge Agreement traded on an exchange, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of a Loan Party party to such Hedge Agreement based on the settlement price of such Hedge Agreement on such date of determination; or (c) in all other cases, the mark-to-market value of such Hedge Agreement, which will be the unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of a Loan Party party to such Hedge Agreement as the amount, if any, by which (i) the present value of the future cash flows to be paid by such Loan Party or Subsidiary exceeds (ii) the present value of the future cash flows to be received by such Loan Party or Subsidiary pursuant to such Hedge Agreement; capitalized terms used and not otherwise defined in this definition shall have the respective meanings set forth in the above described Master Agreement.

 

“Alternative Currency” means each of Euro, Sterling, Yen, Swiss Francs, Canadian Dollars, Australian Dollars and each other currency (other than Dollars) that is approved in accordance with Section 1.05.

 

“Alternative Currency Equivalent” means, at any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in the applicable Alternative Currency as determined by the Paying Agent or the Issuing Bank, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of such Alternative Currency with Dollars.

 

“Alternative Currency Sublimit” means an amount equal to the lesser of the Commitments and $250,000,000.  The Alternative Currency Sublimit is part of, and not in addition to, the Commitments.

 

“Anti-Terrorism Laws” shall mean any Laws relating to terrorism or money laundering, including Executive Order No. 13224, the Patriot Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by the United States Treasury Department’s Office of Foreign Asset Control (as any of the foregoing Laws may from time to time be amended, renewed, extended, or replaced).

 

“Applicable Lending Office” means, with respect to each Lender Party, such Lender Party’s Domestic Lending Office in the case of a Base Rate Advance and such Lender Party’s Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

 

8

 

“Applicable Margin” means (a) prior to delivery of financial statements for the fiscal quarter ending September 30, 2011 pursuant to Section 5.03(c), (x) 1.50% in the case of Eurodollar Rate Advances and (y) 0.50% in the case of Base Rate Advances and (b) thereafter, a percentage per annum determined by reference to the Total Gross Leverage Ratio as set forth below:

 

	
Total   Gross Leverage
   Ratio
    	
 
    	
Base Rate
   Advances
    	
 
    	
Eurodollar Rate
   Advances
    	
 
    
	
Level   I  
    < 1.50 : 1.0
    	
 
    	
0
    	
%
    	
1.00
    	
%
    
	
Level   II  
   > 1.50 : 1.0, 
   but < than 2.50 : 1.0
    	
 
    	
0.25
    	
%
    	
1.25
    	
%
    
	
Level   III  
   > 2.50 : 1.0, 
   but < than 3.50 : 1.0
    	
 
    	
0.50
    	
%
    	
1.50
    	
%
    
	
Level   IV  
   > 3.50 : 1.0, 
   but < than 4.50 : 1.0
    	
 
    	
0.75
    	
%
    	
1.75
    	
%
    
	
Level   V  
   > 4.50 : 1.0
    	
 
    	
1.00
    	
%
    	
2.00
    	
%
    

 

The Applicable Margin for each Base Rate Advance and the Applicable Margin for each Eurodollar Rate Advance shall be determined by reference to the ratio in effect from time to time as reflected in the financial statements most recently delivered pursuant to Section 5.03(b) or (c), as the case may be; provided, however, that in any event, (a) no change in the Applicable Margin shall be effective until three Business Days after the date on which the Paying Agent receives the financial statements required to be delivered pursuant to Section 5.03(b) or (c), as the case may be, and a certificate of the Financial Officer of the Borrower demonstrating such ratio, and (b) the Applicable Margin shall be at Level V for so long as the Borrower has not submitted to the Paying Agent the information described in clause (a) of this proviso as and when required under Section 5.03(b) or (c), as the case may be.

 

“Applicable Time” means, with respect to any borrowings and payments in any Alternative Currency, the local time in the place of settlement for such Alternative Currency as may be determined by the Paying Agent or Issuing Bank, as the case may be, to be necessary for timely settlement on the relevant date in accordance with normal banking procedures in the place of payment.

 

“Appropriate Lender” means, at any time, with respect to (a) the Revolving Credit Facility, a Lender that has a Commitment with respect to such Facility at such time, (b) the Letter of Credit Facility, (i) any Issuing Bank and (ii) if the other Revolving Credit Lenders have made Letter of Credit Advances pursuant to Section 2.03(c) that are outstanding at such time, each such other Revolving Credit Lender and (c) the Swing Line Facility, (i) the Swing Line Bank and (ii) if the other Revolving Credit Lenders have made Swing Line

 

9

 

Advances pursuant to Section 2.02(b) that are outstanding at such time, each such other Revolving Credit Lender.

 

“Approved Fund” means, (a) any CLO and (b) with respect to any Lender that is a fund that invests in bank loans, any other fund that invests in bank loans and is advised or managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

 

“Assignment and Assumption” means, an assignment and assumption entered into by a Lender Party and an Eligible Assignee, and (to the extent required) accepted by the Paying Agent, in accordance with Section 8.07 and in substantially the form of Exhibit C hereto.

 

“Australian Dollars” means the lawful currency of Australia.

 

“Available Amount” of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at such time (assuming compliance at such time with all conditions to drawing).

 

“Available Basket Amount” means, as at any date of determination, the sum of (a) $300,000,000 plus (b) 50% of Consolidated Net Income of the Borrower for the period commencing on July 1, 2011 and ending on the last day of the most recently ended fiscal quarter plus (c) 100% of the aggregate net cash proceeds received by the Borrower after the Effective Date from the issue or sale of Equity Interests of the Borrower or any of its Subsidiaries.

 

“Base Rate” means, a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the highest of:

 

(a)                                  the Prime Rate;

 

(b)                                 1/2 of 1% per annum above the Federal Funds Rate; and

 

(c)                                  the Eurodollar Rate that would be payable on such day for a Eurodollar Rate Advance with a one-month interest period plus 1%.

 

If for any reason the Paying Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Rate, including the inability or failure of the Paying Agent to obtain sufficient quotations in accordance with the terms thereof, the Base Rate shall be determined without regard to clause (b) of this definition, until the circumstances giving rise to such inability no longer exist.  Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective on the effective date of such change.

 

“Base Rate Advance” means, an Advance that bears interest as provided in Section 2.07(a)(i).  All Base Rate Advances shall be denominated in Dollars.

 

“Borrower” has the meaning specified in the recital of parties to this Agreement.

 

10

 

“Borrower’s Account” means, the account of the Borrower maintained by the Borrower with BMO Harris Bank, N.A., as confirmed in writing by the Borrower to the Paying Agent, or such other account as the Borrower shall specify in writing to the Paying Agent.

 

“Borrowing” means, a Revolving Credit Borrowing or a Swing Line Borrowing.

 

“Borrowing Base” means the aggregate of (a) 85% of the book value of accounts receivables that constitute Collateral and (b) 65% of the book value of inventory that constitutes Collateral.

 

“Borrowing Base Obligations” means the sum of (a) the Dollar Equivalent of the aggregate principal amount of outstandings under the Revolving Credit Facility at such time (including outstanding Letters of Credit and Swing Line Advances) plus (b) the aggregate amount of obligations outstanding under Secured Cash Management Agreements at such time plus (c) the aggregate Agreement Value of all Secured Hedge Agreements at such time.

 

“Business Day” shall mean any day other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required to be closed for business in Pittsburgh, Pennsylvania and (i) if the applicable Business Day relates to any Advance to which the Eurodollar Rate applies, such day must also be a day on which dealings are carried on in the Relevant Interbank Market, (ii) with respect to advances or payments of Advances or any other matters relating to Advances denominated in an Alternative Currency, such day also shall be a day on which dealings in deposits in the relevant Alternative Currency are carried on in the Relevant Interbank Market, and (iii) with respect to advances or payments of Advances denominated in an Alternative Currency other than the Euro or the Canadian dollar, such day shall also be a day on which all applicable banks into which Advance proceeds may be deposited are open for business and foreign exchange markets are open for business in the principal financial center of the country of such currency and (iv) with respect to advances or payments of Advances denominated in Euro such day shall be a TARGET Day.

 

“Canadian Dollar” means the lawful currency of Canada.

 

“Capitalized Leases” means, all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

 

“Cash Equivalents” means, any of the following, to the extent owned by the Borrower or any of the Subsidiary Guarantors free and clear of all Liens other than Liens created under the Collateral Documents having a maturity of not greater than 400 days from the date of acquisition thereof unless otherwise specified herein, and marketable for cash by the Borrower or such Subsidiary Guarantor in no more than 30 days:  (a) readily marketable direct obligations of the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States, (b) certificates of deposit of or time deposits with any commercial bank that is a Lender Party or a member of the Federal Reserve System, issues (or the parent of which issues) commercial paper rated as described in clause (c) below, is organized under the laws of the United States or any State thereof and has combined capital and surplus of at least $1 billion, (c) commercial paper in an aggregate amount of no more than $15,000,000 per issuer outstanding at any time,

 

11

 

issued by any corporation organized under the laws of any State of the United States and rated at least “Prime-2” (or the then equivalent grade) by Moody’s Investors Service, Inc. or “A-2” (or the then equivalent grade) by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., (d) Investments, classified in accordance with GAAP as current assets of the Borrower or any of its Subsidiaries, in (i) money market investment programs registered under the Investment Company Act of 1940, as amended, which are administered by financial institutions that have the highest rating obtainable from either Moody’s or S&P, (ii) any 2a-7 regulated money market mutual fund that has the highest long-term credit rating obtainable from either Moody’s or S&P, and (iii) any offshore money market mutual fund that has the highest long-term credit rating obtainable from either Moody’s or S&P, or (e) bankers’ acceptances maturing and being liquidated in full within 270 days after the date of purchase and issued by any Lender that has, at the time of issuance, a short-term credit rating of at least A-1 from S&P and at least P-1 from Moody’s.

 

“CERCLA” means, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time.

 

“CERCLIS” means, the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued

 

“Change of Control” means, the occurrence of any of the following:  (a) any Person or two or more Persons acting in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Interests of the Borrower (or other securities convertible into such Voting Interests) representing 35% or more of the combined voting power of all Voting Interests of the Borrower; (b) individuals who on the Effective Date constitute the board of directors of the Borrower (together with any new directors whose election by the board of directors of the Borrower or whose nomination by the board of directors of the Borrower for election by the Borrower’s stockholders was approved by a vote of at least two-thirds of the members of the board of directors of the Borrower then in office who either were members of the board of directors of the Borrower on the Effective Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the board of directors of the Borrower then in office; (c) any Person or two or more Persons acting in concert shall have acquired by contract or otherwise, or shall have

 

12

 

entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of the Borrower or (d) any “Change of Control” or “Change in Control” as defined in the Indentures or under any other Debt permitted under this Agreement.

 

“CLO” means, any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender.

 

“Collateral” means, all “Collateral” referred to in the Collateral Documents and all other property that is or is intended to be subject to any Lien in favor of the Collateral Agent for the benefit of the Secured Parties which, for the avoidance of doubt, shall include the Subject Property.

 

“Collateral Agent” has the meaning specified in the recital of parties to this Agreement.

 

“Collateral Documents” means, the Security Agreement and any other agreement that creates or purports to create a Lien in favor of the Collateral Agent for the benefit of the Secured Parties.

 

“Commitment” means a Revolving Credit Commitment or a Letter of Credit Commitment.

 

“Commitment Fee” means (a) prior to delivery of financial statements for the fiscal quarter ending September 30, 2011 pursuant to Section 5.03(c), 0.35% per annum and (b) thereafter, a percentage per annum determined by reference to the Total Gross Leverage Ratio (the “Commitment Fee Percentage”) as set forth below:

 

	
Total   Gross Leverage Ratio
    	
 
    	
Commitment Fee
   Percentage
    	
 
    
	
Level I  

< 1.50 : 1.0
    	
 
    	
0.25
    	
%
    
	
Level II  

> 1.50 : 1.0,

but < than 2.50 : 1.0
    	
 
    	
0.30
    	
%
    
	
Level III  

> 2.50 : 1.0, 

but < than 3.50 : 1.0
    	
 
    	
0.35
    	
%
    
	
Level IV  

> 3.50 : 1.0, 

but < than 4.50 : 1.0
    	
 
    	
0.40
    	
%
    
	
Level V  

> 4.50 : 1.0
    	
 
    	
0.45
    	
%
    

 

13

 

The Commitment Fee shall be determined by reference to the ratio in effect from time to time as reflected in the financial statements most recently delivered pursuant to Section 5.03(b) or (c), as the case may be; provided, however, that in any event, (a) no change in the Commitment Fee shall be effective until three Business Days after the date on which the Paying Agent receives the financial statements required to be delivered pursuant to Section 5.03(b) or (c), as the case may be, and a certificate of the Financial Officer of the Borrower demonstrating such ratio, and (b) the Commitment Fee shall be at Level V for so long as the Borrower has not submitted to the Paying Agent the information described in clause (a) of this proviso as and when required under Section 5.03(b) or (c), as the case may be.

 

“Confidential Information” has the meaning specified in Section 8.10.

 

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

 

“Consolidated Net Income” means, of any Person for any period, the net income or loss of such Person for such period determined on a consolidated basis in accordance with GAAP.

 

“Contingent Obligation” means, with respect to any Person, any Obligation or arrangement of such Person to guarantee or intended to guarantee any Debt, leases, dividends or other payment Obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, (a) the direct or indirect guarantee, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the Obligation of a primary obligor, (b) the Obligation to make take-or-pay or similar payments, if required, regardless of nonperformance by any other party or parties to an agreement (other than Obligations to make take-or-pay or similar payments pursuant to contracts entered into by such Person in the ordinary course of business not inconsistent with the prior practice of such Person) or (c) any Obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder), as determined by such Person in good faith.

 

“Conversion”, “Convert” and “Converted” each refer to a conversion of Advances of one Type into Advances of the other Type pursuant to Section 2.09 or 2.10.

 

14

 

“Debt” of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all Obligations of such Person for the deferred purchase price of property or services (other than trade payables not overdue by more than 60 days incurred in the ordinary course of such Person’s business), (c) all Obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all Obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all Obligations of such Person as lessee under Capitalized Leases, (f) all Obligations of such Person under acceptance, letter of credit or similar facilities, (g) all Obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests in such Person or any other Person or any warrants, rights or options to acquire such capital stock, valued, in the case of Redeemable Preferred Interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (h) all Obligations of such Person in respect of Hedge Agreements, valued at the Agreement Value thereof, (i) all Contingent Obligations of such Person and (j) all indebtedness and other payment Obligations referred to in clauses (a) through (i) above of another Person secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness or other payment Obligations.

 

“Debt for Borrowed Money” of any Person means, without duplication, all items described in clauses (a), (c), (e), (f) and, to the extent it supports an obligation of the type described in any of clauses (a), (c), (e) and (f), any item described in clause (i) or (j), in each case of the definition of Debt.

 

“Default” means, any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both.

 

“Default Termination Notice” has the meaning specified in Section 2.01(e).

 

“Defaulting Lender” means, subject to Section 2.15(b), any Lender that, as determined by the Administrative Agent, (a) has failed to perform any of its funding obligations hereunder,  including in respect of its Advances or participations in respect of Letters of Credit or Swing Line Advances, within three Business Days of the date required to be funded by it hereunder, unless, other than with respect to participations in respect of Letters of Credit or Swing Line Advances, such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in writing) has not been satisfied, (b) has notified the Borrower or the Administrative Agent that it does not intend to comply with its funding obligations or has made a public statement to that effect with respect to its funding obligations hereunder (unless such notification or public statement relates to such Lender’s obligation to fund an Advance (other than a participation in respect of Letters of Credit or Swing Line Advances) hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically

 

15

 

identified in such notification or public statement) cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by the Administrative Agent, to confirm in a manner satisfactory to the Administrative Agent that it will comply with its funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any bankruptcy law, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority.

 

“Disclosed Litigation” has the meaning specified in Section 3.01(f).

 

“Documentation Agents” has the meaning specified in the recital of parties to this Agreement.

 

“Dollar Equivalent” means, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in any Alternative Currency, the equivalent amount thereof in Dollars as determined by the Paying Agent or the Issuing Bank, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Dollars with such Alternative Currency.

 

“Dollar” and “$” mean lawful money of the United States.

 

“Domestic Lending Office” means, with respect to any Lender Party, the office of such Lender Party specified as its “Domestic Lending Office” opposite its name on Schedule I hereto or in the Assignment and Assumption pursuant to which it became a Lender Party, as the case may be, or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrower and the Paying Agent.

 

“EBITDA” means, for any period, the sum, determined on a Consolidated basis, of (a) net income (or net loss) excluding any extraordinary, unusual or nonrecurring gains and any extraordinary, unusual or nonrecurring losses comprised of Non-Cash Charges, (b) interest expense, (c) income tax expense, (d) depreciation expense, (e) amortization expense and (f) unrealized gains or losses associated with financial instruments, in each case of the Borrower and its Subsidiaries, determined in accordance with GAAP for such period (and, in the case of clauses (b) through (f), to the extent deducted or added in determining the net income described in clause (a)).

 

“Effective Date” means, the first date on which the conditions set forth in Article III shall have been satisfied.

 

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“Eligible Assignee” means, any commercial bank or financial institution (including, without limitation any Approved Fund) as approved by the Administrative Agent and, so long as no Default or Event of Default has occurred and is continuing at the time of such assignment, by the Borrower (such approvals not to be unreasonably withheld or delayed); provided, that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five Business Days after having received notice thereof; provided, however, that (a) neither any Loan Party nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee under this definition and (b) no approval of the Administrative Agent or the Borrower shall be required for assignments to Affiliates or Approved Funds of Lender Parties or for assignments to Lenders.

 

“EMU” means the economic and monetary union in accordance with the Treaty of Rome 1957, as amended by the Single European Act 1986, the Maastricht Treaty of 1992 and the Amsterdam Treaty of 1998.

 

“EMU Legislation” means the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.

 

“Environmental Action” means, any action, suit, demand, demand letter, claim, notice of non-compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, any Environmental Permit or Hazardous Material or arising from alleged injury or threat to health, safety or the environment, including, without limitation, (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any governmental or regulatory authority or third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

 

“Environmental Law” means, any Federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, writ, judgment, injunction, decree or judicial or agency interpretation, policy or guidance relating to pollution or protection of the environment, health, safety or natural resources, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.

 

“Environmental Permit” means, any permit, approval, identification number, license or other authorization required under any Environmental Law.

 

“Equity Interests” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.

 

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“ERISA” means, the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

 

“ERISA Affiliate” means, any Person that for purposes of Title IV of ERISA is a member of the controlled group of any Loan Party, or under common control with any Loan Party, within the meaning of Section 414 of the Internal Revenue Code.

 

“ERISA Event” means, (a) (i) the occurrence of a reportable event, within the meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day notice requirement with respect to such event has been waived by the PBGC or (ii) the requirements of Section 4043(b) of ERISA apply with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such Plan within the following 30 days; (b) the application for a minimum funding waiver with respect to a Plan; (c) the provision by the administrator of any Plan of a notice of intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any Loan Party or any ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a lien under Section 302(f) of ERISA shall have been met with respect to any Plan; (g) the adoption of an amendment to a Plan requiring the provision of security to such Plan pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, such Plan.

 

“Euro” means the lawful currency of the Participating Member States introduced in accordance with the EMU Legislation.

 

“Eurocurrency Liabilities” has the meaning specified in the definition of “Eurodollar Rate Reserve Percentage”.

 

“Eurodollar Lending Office” means, with respect to any Lender Party, the office of such Lender Party specified as its “Eurodollar Lending Office” opposite its name on Schedule I hereto or in the Assignment and Assumption pursuant to which it became a Lender Party (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender Party as such Lender Party may from time to time specify to the Borrower and the Paying Agent.

 

“Eurodollar Rate” means (a)  with respect to Dollar Advances to which the Eurodollar Rate applies for any Interest Period, the interest rate per annum determined by the Administrative Agent by dividing (the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which Dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another

 

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source selected by the Administrative Agent which has been approved by the British Bankers’ Association as an authorized information vendor for the purpose of displaying rates at which US Dollar deposits are offered by leading banks in the London interbank deposit market (for purposes hereof, an “Alternate Source”), at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period as the London interbank offered rate for Dollars for an amount comparable to the principal amount of such Advance and having a borrowing date and a maturity comparable to such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error)), by (ii) a number equal to 1.00 minus the Euro-Rate Reserve Percentage.  The Eurodollar Rate with respect to Dollar Advances may also be expressed by the following formula:

 

	
Eurodollar Rate
     	
=                London interbank offered rate quoted by Bloomberg or appropriate successor    as shown on Bloomberg Page BBAM1 
     
	
 
    	
1.00 – Eurodollar   Rate Reserve Percentage
    

 

The Eurodollar Rate shall be adjusted with respect to any Advance to which the Eurodollar Rate applies that is outstanding on the effective date of any change in the Eurodollar Rate Reserve Percentage as of such effective date.  The Administrative Agent shall give prompt notice to the Borrower of the Eurodollar Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.

 

(b)        with respect to Advances denominated in an Alternative Currency that are in currency to which the Eurodollar Rate applies for any Interest Period, the interest rate per annum determined by Administrative Agent by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which deposits in the relevant Alternative Currency are offered by leading banks in the Relevant Interbank Market), or the rate which is quoted by an Alternate Source, at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period as the Relevant Interbank Market offered rate for deposits in the relevant Alternative Currency for an amount comparable to the principal amount of such Advance and having a borrowing date and a maturity comparable to such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error)), by (ii) a number equal to 1.00 minus the Eurodollar Rate Reserve Percentage.  Such Eurodollar Rate may also be expressed by the following formula:

 

	
Eurodollar Rate   =
    	
Relevant Interbank   Market offered rate quoted by Bloomberg or appropriate successor as shown on Bloomberg   Page BBAM1
    
	
 
    	
1.00 – Eurodollar   Rate Reserve Percentage
    

 

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The Eurodollar Rate shall be adjusted with respect to any Advance to which the Eurodollar Rate applies that is outstanding on the effective date of any change in the Eurodollar Rate Reserve Percentage as of such effective date.  The Administrative Agent shall give prompt notice to the Borrower of the Eurodollar Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.  The Eurodollar Rate for any Advances shall be based upon the Eurodollar Rate for the currency in which such Advances are requested.

 

“Eurodollar Rate Advance” means, an Advance that bears interest as provided in Section 2.07(a)(ii).

 

“Eurodollar Rate Reserve Percentage” shall mean as of any day the maximum percentage in effect on such day, (i) as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as “Eurocurrency Liabilities”); and (ii) to be maintained by a Lender as required for reserve liquidity, special deposit, or similar purpose by any governmental or monetary authority of any country or political subdivision thereof (including any central bank), against (A) any category of liabilities that includes deposits by reference to which a Euro-Rate is to be determined, or (B) any category of extension of credit or other assets that includes Advances to which a Eurodollar Rate applies.

 

“Events of Default” has the meaning specified in Section 6.01.

 

“Excluded Subsidiary” means each of Speedbird Aviation, LLC, an Indiana limited liability company, Paragon Steel Enterprises LLC, an Indiana limited liability company, STLD Holdings, Inc., an Indiana corporation, Dynamic Aviation LLC, an Indiana limited liability company, Shredded Products II, LLC, an Indiana limited liability company, OmniSource Mexico, LLC, an Indiana limited liability company, SDI Sub, LLC, an Indiana limited liability company, OmniSource Athens, LLC, an Indiana limited liability company, OmniSource Bay City, LLC, an Indiana limited liability company, Capitol City Metals, LLC, an Indiana limited liability company, Raeford Salvage Company, Inc., a North Carolina corporation, Lumberton Recycling Company, Inc., a North Carolina corporation and Cohen & Green Salvage Co., Inc., a North Carolina corporation, each of their respective direct and indirect subsidiaries and each other Subsidiary of the Borrower designated by the Borrower as an Excluded Subsidiary by written notice to the Joint Lead Arrangers in accordance with Section 5.01(j); provided that, in the event any Excluded Subsidiary guarantees any Debt of the Borrower or any Subsidiary Guarantor (other than the Obligations set forth herein), then such Subsidiary shall be required to execute and deliver a guaranty and a security agreement supplement and all other necessary documents in accordance with Section 5.01(j), and such Excluded Subsidiary shall be considered a Subsidiary Guarantor  (and cease to be an Excluded Subsidiary) for all purposes set forth herein.

 

“Existing Credit Agreement” has the meaning specified in the Preliminary Statements hereto.

 

“Existing Facility” has the meaning specified in the Preliminary Statements hereto.

 

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“Existing Debt” means, the Debt of each Loan Party and its Subsidiaries outstanding immediately before giving effect to the consummation of the Transaction.

 

“Existing Lenders” has the meaning specified in the Preliminary Statements hereto.

 

“Existing Letters of Credit” has the meaning specified in the Preliminary Statements hereto.

 

“Extraordinary Receipt” means, any cash received by or paid to or for the account of any Person not in the ordinary course of business, consisting of proceeds of insurance, condemnation awards (and payments in lieu thereof) and indemnity payments, in each case, with respect to assets constituting Collateral; provided, however, that an Extraordinary Receipt shall not include cash receipts received from proceeds of insurance, condemnation awards (or payments in lieu thereof) or indemnity payments to the extent that such proceeds, awards or payments (a) in respect of loss or damage to inventory are applied (or in respect of which expenditures were previously incurred) to replace or repair the inventory in respect of which such proceeds were received in accordance with the terms of the Loan Documents, so long as such application is made within 12 months after the occurrence of such damage or loss or (b) are received by any Person in respect of any third party claim against such Person and applied to pay (or to reimburse such Person for its prior payment of) such claim and the costs and expenses of such Person with respect thereto.

 

“Facility” means, the Revolving Credit Facility, the Swing Line Facility or the Letter of Credit Facility.

 

“Federal Funds Rate” means, for any day the rate per annum (based on a year of 360 days and actual days elapsed) which is the daily federal funds open rate as quoted by ICAP North America, Inc. (or any successor) as set forth on the  Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on such other substitute Bloomberg Screen that displays such rate), or as set forth on such other recognized electronic source used for the purpose of displaying such rate as selected by the Administrative Agent (for purposes of this definition, an “Alternate Source”) (or if such rate for such day does not appear on the Bloomberg Screen BTMM (or any substitute screen) or on any Alternate Source, or if there shall at any time, for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute screen) or any Alternate Source, a comparable replacement rate determined by the Administrative Agent at such time (which determination shall be conclusive absent manifest error); provided  however, that if such day is not a Business Day, the Federal Funds Rate for such day shall be the “open” rate on the immediately preceding Business Day.  If and when the Federal Funds Rate changes, the rate of interest with respect to any advance to which the Federal Funds Rate applies will change automatically without notice to the Borrower or any other Loan Party, effective on the date of any such change.

 

“Federal Funds Effective Rate” for any day shall mean the rate per annum (based on a year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by

 

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federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement; provided, if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the “Federal Funds Effective Rate” for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.

 

“Fee Letter” means each of the fee letters between any of the Joint Lead Arrangers and the Borrower entered into in respect of this Agreement and the Revolving Credit Facility.

 

“Financial Officer” means, any of the Chief Executive Officer, the Chief Financial Officer, the Treasurer and the Assistant Secretary.

 

“Fiscal Year” means, a fiscal year of the Borrower and its Consolidated Subsidiaries ending on December 31 in any calendar year.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any Issuing Bank, such Defaulting Lender’s Pro Rata Share of the outstanding Letter of Credit Advances other than any portion as to which such Defaulting Lender’s purchase obligation has been reallocated to other Lenders or cash collateralized in accordance with the terms hereof, and (b) with respect to the Swing Line Lender, such Defaulting Lender’s Pro Rata Share of Swing Line Advances other than Swing Line Advances as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or cash collateralized in accordance with the terms hereof.

 

“Funded Debt” of any Person means, Debt in respect of the Advances, in the case of the Borrower, and all other Debt of such Person that by its terms matures more than one year after the date of determination or matures within one year from such date but is renewable or extendible, at the option of such Person, to a date more than one year after such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year after such date, including, without limitation, all amounts of Funded Debt of such Person required to be paid or prepaid within one year after the date of determination.

 

“GAAP” has the meaning specified in Section 1.03.

 

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 

“Guaranties” means, collectively, each Subsidiary Guaranty entered into from time to time.

 

“Guarantors” means, the Subsidiary Guarantors.

 

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“Hazardous Materials” means, (a) petroleum or petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls and radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.

 

“Hedge Agreements” means, interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other hedging agreements.

 

“Hedge Bank” means, any Lender Party or an Affiliate of a Lender Party in its capacity as a party to a Secured Hedge Agreement.

 

“Incremental Facility” has the meaning specified in Section 2.17.

 

“Incremental Facility Effective Date” has the meaning specified in Section 2.17.

 

“Incremental Revolving Credit Facility” has the meaning specified in Section 2.17.

 

“Incremental Term Facility” has the meaning specified in Section 2.17.

 

“Indemnified Party” has the meaning specified in Section 8.04(b).

 

“Indentures” means, each indenture governing the Senior Notes, as each such indenture may be amended, supplemented or otherwise modified from time to time in accordance herewith and therewith.

 

“Information Memorandum” means any confidential information memorandum used by the Joint Lead Arrangers in connection with the syndication of the Commitments.

 

“Initial Extension of Credit” means, the earlier to occur of the initial Borrowing and the initial issuance of a Letter of Credit hereunder.

 

“Initial Issuing Bank”, “Initial Lender Parties” and “Initial Lenders” each has the meaning specified in the recital of parties to this Agreement.

 

“Interest Coverage Ratio” means, at any date of determination, the ratio of (a) Consolidated EBITDA to (b) interest payable on, and amortization of debt discount in respect of, all Debt for Borrowed Money, in each case, of or by the Borrower and its Subsidiaries during the four consecutive fiscal quarters most recently ended for which financial statements are required to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be.

 

“Insufficiency” means, with respect to any Plan, the amount, if any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.

 

“Interest Period” means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the

 

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date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and ending on the last day of the period selected by the Borrower pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below.  The duration of each such Interest Period shall be one, two, three or six months (or nine or twelve months if consented to by all Lenders), as the Borrower may, upon notice received by the Paying Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select; provided, that, the duration of each Interest Period with respect to a Eurodollar Rate Advance denominated in an Alternative Currency shall be one month; provided,  further, that:

 

(a)                                  the Borrower may not select any Interest Period with respect to any Eurodollar Rate Advance under a Facility that ends after any principal repayment installment date for such Facility unless, after giving effect to such selection, the aggregate principal amount of Base Rate Advances and of Eurodollar Rate Advances having Interest Periods that end on or prior to such principal repayment installment date for such Facility shall be at least equal to the aggregate principal amount of Advances under such Facility due and payable on or prior to such date;

 

(b)                                 Interest Periods commencing on the same date for Eurodollar Rate Advances comprising part of the same Borrowing shall be of the same duration;

 

(c)                                  whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day;

 

(d)                                 whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month; and

 

(e)                                  at any one time no more than ten different Interest Periods shall be in effect.

 

“Internal Revenue Code” means, the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

 

“Inventory” means, all Inventory referred to in Section 1(b) of the Security Agreement.

 

“Investment” in any Person means, any loan or advance to such Person, any purchase or other acquisition of any Equity Interests or Debt or the assets comprising a division or business unit or a substantial part or all of the business of such Person, any capital contribution to such Person or any other direct or indirect investment in such Person, including,

 

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without limitation, any acquisition by way of a merger or consolidation and any arrangement pursuant to which the investor incurs Debt of the types referred to in clause (i) or (j) of the definition of “Debt” in respect of such Person.

 

“Issuing Bank” means, the Initial Issuing Bank, any other financial institution approved as an Issuing Bank by the Paying Agent and the Borrower, any Eligible Assignee to which all or a portion of a Letter of Credit Commitment hereunder has been assigned pursuant to Section 8.07 so long as such Eligible Assignee expressly agrees to perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as an Issuing Bank and notifies the Paying Agent of its assumption of such duties, for so long as such Initial Issuing Bank, financial institution or Eligible Assignee, as the case may be, shall have a Letter of Credit Commitment and in any case with respect to the Existing Letters of Credit, PNC Bank, BMO Harris Bank, N.A. and U.S. Bank National Association.

 

“Joint Lead Arrangers” has the meaning specified in the recitals of parties to this Agreement.

 

“L/C Cash Collateral Account” has the meaning specified in the Security Agreement.

 

“L/C Related Documents” has the meaning specified in Section 2.04(e)(ii).

 

“Lender Party” means, any Lender, any Issuing Bank or the Swing Line Bank.

 

“Lenders” means, the Initial Lenders and each Person that shall become a Lender hereunder pursuant to Section 8.07 or Section 2.17(c), in each case, for so long as such Initial Lender or Person, as the case may be, shall be a party to this Agreement.

 

“Letter of Credit Advance” means, an advance made by any Issuing Bank or any Revolving Credit Lender pursuant to Section 2.03(c).

 

“Letter of Credit Agreement” has the meaning specified in Section 2.03(a).

 

“Letter of Credit Commitment” means, with respect to any Issuing Bank at any time, the amount set forth opposite such Issuing Bank’s name on Schedule I hereto under the caption “Letter of Credit Commitment” or, if such Issuing Bank or a subsequent Issuing Bank has entered into an Assignment and Assumption, set forth for each such Issuing Bank in the Register maintained by the Paying Agent pursuant to Section 8.07(d) as such Issuing Bank’s “Letter of Credit Commitment”, as such amount may be reduced at or prior to such time pursuant to Section 2.05.

 

“Letter of Credit Facility” means, at any time, an amount equal to the lesser of (a) the aggregate amount of the Issuing Banks’ Letter of Credit Commitments at such time and (b) $150,000,000, as such amount may be reduced at or prior to such time pursuant to Section 2.05.

 

“Letters of Credit” means, collectively, (a) the letters of credit issued pursuant to Section 2.01(c) hereof from time to time and (b) the Existing Letters of Credit.

 

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“Lien” means, any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement, including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.

 

“Liquidity” means, as of any date of determination, for the Borrower and its Subsidiaries on a Consolidated basis, the sum of (a) Unrestricted Cash and (b) the aggregate amount of Revolving Credit Commitments as of such date minus the Dollar Equivalent of (i) outstanding Revolving Credit Advances, outstanding Swing Line Advances and Letter of Credit Advances as of such date and (ii) the Available Amount of all Letters of Credit outstanding as of such date.

 

“Loan Documents” means, (a) for purposes of this Agreement and the Notes and any amendment, supplement or modification hereof or thereof, (i) this Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the Collateral Documents, (v) each Fee Letter and (vi) each Letter of Credit Agreement and (b) for purposes of the Guaranties and the Collateral Documents and for all other purposes other than for purposes of this Agreement and the Notes, (i) this Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the Collateral Documents, (v) each Fee Letter, (vi) each Letter of Credit Agreement, (vii) each Secured Hedge Agreement and (viii) each Secured Cash Management Agreement, in each case as amended.

 

“Loan Parties” means, the Borrower and the Guarantors.

 

“Margin Stock” has the meaning specified in Regulation U.

 

“Material Adverse Change” means, any material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower or the Borrower and its Subsidiaries taken as a whole.

 

“Material Adverse Effect” means, a material adverse effect on (a) the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower or the Borrower and its Subsidiaries, taken as a whole, (b) the rights and remedies of any Agent or any Lender Party under any Loan Document, (c) the ability of any Loan Party to perform its Obligations under any Loan Document to which it is or is to be a party or (d) the Transaction.

 

“Mesabi Nugget” means, Mesabi Nugget Delaware, LLC, a Delaware limited liability company, Mesabi Mining, LLC, an Indiana limited liability company and Mining Resources, LLC, an Indiana limited liability company, or their respective parents or Subsidiaries, including, without limitation, any Excluded Subsidiary, involved directly or indirectly in the development, application and use of the Itmk3 technology.

 

“Multiemployer Plan” means, a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions.

 

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“Multiple Employer Plan” means, a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and at least one Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.

 

“Net Cash Proceeds” means (a) with respect to any Extraordinary Receipt, the aggregate amount of cash and Cash Equivalents received in connection therewith and (b) with respect to the incurrence or issuance of any Debt, the excess of (x) the sum of the cash and Cash Equivalents received in connection with such incurrence or issuance of Debt less (y) the investment banking fees, underwriting discounts, commissions, costs and other out-of-pocket fees and expenses incurred the Borrower or its Subsidiaries in connection with such incurrence or issuance of Debt to the extent such amounts were not deducted in determining the amount referred to in clause (x).

 

“Net Debt for Borrowed Money” of any Person means, (a) Consolidated Debt for Borrowed Money, less (b) Unrestricted Cash in an amount not to exceed $400,000,000.

 

“Non-Cash Charges” means, with respect to the Borrower and its Subsidiaries, for any period, the aggregate non-cash charges and expenses reducing net income of the Borrower and its Subsidiaries for such period, all as determined on a Consolidated basis; provided that “Non-Cash Charges” shall not include any such charges that require an accrual of or a reserve for cash for any future period.

 

“Note” means a Revolving Credit Note.

 

“Notice of Borrowing” has the meaning specified in Section 2.02(a).

 

“Notice of Issuance” has the meaning specified in Section 2.03(a).

 

“Notice of Renewal” has the meaning specified in Section 2.01(c).

 

“Notice of Swing Line Borrowing” has the meaning specified in Section 2.02(b).

 

“Notice of Termination” has the meaning specified in Section 2.01(c).

 

“NPL” means, the National Priorities List under CERCLA.

 

“Obligation” means, with respect to any Person, any payment, performance or other obligation of such Person of any kind, including, without limitation, any liability of such Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding referred to in Section 6.01(f).  Without limiting the generality of the foregoing, the Obligations of any Loan Party under the Loan Documents include (a) the obligation to pay principal, interest, Letter of Credit commissions, charges, expenses, fees, attorneys’ fees and disbursements, indemnities and other amounts payable by

 

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such Loan Party under any Loan Document and (b) the obligation of such Loan Party to reimburse any amount in respect of any of the foregoing that any Lender Party, in its sole discretion, may elect to pay or advance on behalf of such Loan Party.

 

“Open Year” has the meaning specified in Section 4.01(q)(ii).

 

“Other Taxes” has the meaning specified in Section 2.12(b).

 

“Participating Member State” means each state so described in any EMU Legislation.

 

“Patriot Act” has the meaning specified in Section 8.18.

 

“Paying Agent” means, PNC Bank, or any successor thereto in accordance with Article VII.

 

“Paying Agent’s Account” means, the account of the Paying Agent maintained by the Paying Agent at its offices in PNC Firstside Center, 500 First Avenue, P7-PFSC-04-I, Pittsburgh, Pennsylvania 15219, as confirmed by the Paying Agent in writing to the Lender Parties or such other account as the Paying Agent shall specify in writing to the Lender Parties.

 

“PBGC” means, the Pension Benefit Guaranty Corporation (or any successor).

 

“Permitted Liens” means, such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced:  (a) Liens for taxes, assessments and governmental charges or levies to the extent not required to be paid under Section 5.01(b); (b) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course of business securing obligations that (i) are not overdue for a period of more than 30 days or otherwise are contested in good faith and for which a bond shall have been posted in the amount of such obligations and (ii) individually or together with all other Permitted Liens outstanding on any date of determination do not materially adversely affect the use of the property to which they relate; and (c) pledges or deposits to secure obligations under workers’ compensation laws or similar legislation or to secure public or statutory obligations.

 

“Permitted Receivables Financing” means any Receivables Financing of a Permitted Receivables Financing Subsidiary that meets the following conditions: (a) such Permitted Receivables Financing (including financing terms, covenants, termination events and other provisions) shall be in the aggregate economically fair and reasonable to the Borrower and the Permitted Receivables Financing Subsidiary, (b) all sales and/or contributions of Permitted Receivables Financing Assets to the Permitted Receivables Financing Subsidiary shall be made at fair market value and (c) the financing terms, covenants, termination events and other provisions thereof shall be market terms for similar transactions and shall be non-recourse with respect to the Borrower and its Subsidiaries but may include Standard Securitization Undertakings; provided that a Responsible Officer of the Borrower shall have provided a certificate to such effect to the Administrative Agent at least five Business Days prior to the incurrence of such Permitted Receivables Financing, together with a reasonably detailed description of the material terms and conditions of such Permitted Receivables Financing or

 

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drafts of the documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the requirements set out in the foregoing clauses (a) through (c), which certificate shall be conclusive evidence that such terms and conditions satisfy such requirement unless the Administrative Agent provides notice to the Borrower of its objection during such five Business Day period.

 

“Permitted Receivables Financing Assets” means the accounts receivable subject to a Permitted Receivables Financing, and related assets (including contract rights) which are of the type customarily transferred or in respect of which security interests are customarily granted in connection with securitizations of accounts receivables, and the proceeds thereof.

 

“Permitted Receivables Financing Subsidiary” means a wholly owned Subsidiary of the Borrower (or another Person formed for the purposes of engaging in a Permitted Receivables Financing in which the Borrower or any Subsidiary of the Borrower makes an Investment and to which the Borrower or any Subsidiary of the Borrower transfers Permitted Receivables Financing Assets) that engages in no activities other than in connection with the financing of Permitted Receivables Financing Assets of the Borrower or its Subsidiaries, all proceeds thereof and all rights (contingent and other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the board of directors of the Borrower or such other Person (as provided below) as a Permitted Receivables Financing Subsidiary and (a) no portion of the Debt or any other obligations (contingent or otherwise) of which (i) is guaranteed by the Borrower or any other Subsidiary of the Borrower, other than another Permitted Receivables Financing Subsidiary (excluding guarantees of obligations (other than the principal of, and interest on, Debt) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Borrower or any other Subsidiary of the Borrower, other than another Permitted Receivables Financing Subsidiary, in any way other than pursuant to Standard Securitization Undertakings or (iii) subjects any property or asset of the Borrower or any other Subsidiary of the Borrower, other than another Permitted Receivables Financing Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings, (b) with which none of the Borrower or any other Subsidiary of the Borrower, other than another Permitted Receivables Financing Subsidiary, has any material contract, agreement, arrangement or understanding other than on terms no less favorable to the Borrower or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Borrower and (c) to which none of the Borrower or any other Subsidiary of the Borrower, other than another Permitted Receivables Financing Subsidiary, has any obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operating results.  Any such designation by the board of directors of the Borrower or such other Person shall be evidenced to the Administrative Agent by delivery to the Administrative Agent of a certified copy of the resolution of the board of directors of the Borrower or such other Person giving effect to such designation and a certificate executed by a Responsible Officer certifying that such designation complied with the foregoing conditions.

 

“Person” means, an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

 

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“Plan” means, a Single Employer Plan or a Multiple Employer Plan.

 

“Pledged Debt” has the meaning specified in the Security Agreement.

 

“Pledged Shares” has the meaning specified in the Security Agreement.

 

“PNC Bank” has the meaning specified in the recital of parties to this Agreement.

 

“Preferred Interests” means, with respect to any Person, Equity Interests issued by such Person that are entitled to a preference or priority over any other Equity Interests issued by such Person upon any distribution of such Person’s property and assets, whether by dividend or upon liquidation.

 

“Prime Rate” means, the rate publicly quoted from time to time by the Administrative Agent.  The “prime rate” is a rate set by the Administrative Agent based upon various factors including the Administrative Agent’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by the Administrative Agent shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“Process Agent” has the meaning specified in Section 8.13.

 

“Pro Rata Share” of any amount means, with respect to any Revolving Credit Lender at any time, the product of such amount times a fraction the numerator of which is the amount of such Lender’s Revolving Credit Commitment at such time (or, if the Commitments shall have been terminated pursuant to Section 2.05 or 6.01, such Lender’s Revolving Credit Commitment as in effect immediately prior to such termination) and the denominator of which is the Revolving Credit Facility at such time (or, if the Commitments shall have been terminated pursuant to Section 2.05 or 6.01, the Revolving Credit Facility as in effect immediately prior to such termination).

 

“Receivables” means, all Receivables referred to in Section 1(c) of the Security Agreement.

 

“Receivables Financing” means any transaction or series of transactions that may be entered into by the Borrower or any of its Subsidiaries pursuant to which the Borrower or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Permitted Receivables Financing Subsidiary (in the case of a transfer by the Borrower or any of its Subsidiaries) or (b) any other Person (in the case of a transfer by a Permitted Receivables Financing Subsidiary), or a Permitted Receivables Financing Subsidiary may grant a security interest in, any Permitted Receivables Financing Assets of the Borrower or any of its Subsidiaries.

 

“Redeemable” means, with respect to any Equity Interest, any Debt or any other right or Obligation, any such Equity Interest, Debt, right or Obligation that (a) the issuer has undertaken to redeem at a fixed or determinable date or dates, whether by operation of a sinking fund or otherwise, or upon the occurrence of a condition not solely within the control of the issuer or (b) is redeemable at the option of the holder.

 

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“Refinancing” has the meaning specified in the Preliminary Statements.

 

“Register” has the meaning specified in Section 8.07(d).

 

“Regulation U” means, Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

 

“Related Documents” means, (i) the Senior Notes Debt Documents, and (ii) any other indentures, note purchase agreements, credit agreements or similar documents governing issuances of Debt in excess of $20,000,000 permitted under the Credit Agreement (other than intercompany Debt) to which the Borrower or any Subsidiary may become party following the date hereof which contain restrictions on the activities of the Borrower or any Loan Party.

 

“Relevant Interbank Market” means, (a) in relation to Euro, the European Interbank Market, (b) in relation to the Canadian dollar, the CDOR Market and (c) in relation to any other currency, the London interbank market.

 

“Required Lenders” means, at any time, Lenders owed or holding at least a majority in interest of the sum of (a) the aggregate principal amount of the Advances outstanding at such time, (b) the aggregate Available Amount of all Letters of Credit outstanding at such time, and (c) the aggregate Unused Revolving Credit Commitments at such time; provided,  however, that if any Lender shall be a Defaulting Lender at such time, there shall be excluded from the determination of Required Lenders at such time (A) the aggregate principal amount of the Advances owing to such Lender (in its capacity as a Lender) and outstanding at such time, (B) such Lender’s Pro Rata Share of the aggregate Available Amount of all Letters of Credit outstanding at such time, and (C) the Unused Revolving Credit Commitment of such Lender at such time.  For purposes of this definition, the aggregate principal amount of Swing Line Advances owing to the Swing Line Bank and of Letter of Credit Advances owing to any Issuing Bank and the Available Amount of each Letter of Credit shall be considered to be owed to the Revolving Credit Lenders ratably in accordance with their respective Revolving Credit Commitments, except to the extent a Revolving Credit Lender is a Defaulting Lender.

 

“Responsible Officer” means, any officer of any Loan Party or any of its Subsidiaries, as designated in the incumbency certificate delivered on the Effective Date pursuant to Section 3.01(a)(viii) (as may be supplemented from time to time).

 

“Revaluation Date” means (a) with respect to any Loan, each of the following:  (i) each date of a Borrowing of a Eurocurrency Rate Advance denominated in an Alternative Currency, (ii) each date of a continuation of a Eurocurrency Rate Advance denominated in an Alternative Currency pursuant to Section 2.09, and (iii) such additional dates as the Paying Agent shall determine or the Required Lenders shall require; and (b) with respect to any Letter of Credit, each of the following:  (i) each date of issuance of a Letter of Credit denominated in an Alternative Currency and monthly thereafter, (ii) each date of an amendment of any such Letter of Credit having the effect of increasing the amount thereof (solely with respect to the increased amount), (iii) each date of any payment by the Issuing Bank under any Letter of Credit denominated in an Alternative Currency, and (iv) such additional dates as the Paying Agent or any Issuing Bank shall determine or the Required Lenders shall require.

 

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“Revolving Credit Advance” has the meaning specified in Section 2.01(a).

 

“Revolving Credit Borrowing” means, a borrowing consisting of simultaneous Revolving Credit Advances of the same Type made by the Revolving Credit Lenders.

 

“Revolving Credit Commitment” means, with respect to any Revolving Credit Lender at any time, the amount set forth opposite such Lender’s name on Schedule I hereto under the caption “Revolving Credit Commitment” or, if such Lender has entered into one or more Assignment and Assumptions or joinder agreements, set forth for such Lender in the Register maintained by the Paying Agent pursuant to Section 8.07(d) as such Lender’s “Revolving Credit Commitment”, as such amount may be reduced at or prior to such time pursuant to Section 2.05 or increased pursuant to Section 2.17.

 

“Revolving Credit Facility” means, at any time, the aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments at such time.

 

“Revolving Credit Lender” means, any Lender that has a Revolving Credit Commitment.

 

“Revolving Credit Note” means a promissory note of the Borrower payable to the order of any Revolving Credit Lender, in substantially the form of Exhibit A-1 hereto, evidencing the aggregate indebtedness of the Borrower to such Lender resulting from the Revolving Credit Advances, Letter of Credit Advances and Swing Line Advances made by such Lender, as amended, endorsed, extended or otherwise modified from time to time.

 

“Secured Cash Management Agreement” means, any cash management agreement, deposit maintenance agreement, credit card services agreement (provided that the aggregate amount of Debt owing under such credit card services agreements does not exceed $50 million) or similar agreement between any Loan Party and a bank which is a Lender Party or an Affiliate of a Lender Party.

 

“Secured Hedge Agreement” means, any Hedge Agreement permitted under Article V that is entered into by and between any Loan Party and any Hedge Bank.

 

“Secured Obligations” has the meaning specified in Section 2 of the Security Agreement.

 

“Secured Parties” means, the Agents, the Lender Parties, the banks that are party to any Secured Cash Management Agreement and the Hedge Banks.

 

“Security Agreement” has the meaning specified in Section 3.01(a)(ii).

 

“Senior Notes” means, the Borrower’s (a) 7.375% Senior Notes due 2012, (b) 5.125% Convertible Senior Notes due 2014, (c) 6.750% Senior Notes due 2015, (d) 7.750% Senior Notes due 2016 and (e) 7.625% Senior Notes due 2020.

 

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“Senior Notes Debt Documents” means, the Indentures and any and all other agreements, documents, indentures and instruments pursuant to which the Senior Notes are issued, in each case as amended, to the extent permitted under the Loan Documents.

 

“Single Employer Plan” means, a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and no Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party or any ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated.

 

“Solvent” and “Solvency” mean, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in a business or transaction, and is not about to engage in a business or transaction, for which such Person’s property would constitute an unreasonably small capital.  For purposes of determining whether a Loan Party is Solvent, the amount of contingent liabilities at any time of such Loan Party shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability of such Loan Party.

 

“Special Notice Currency” means at any time an Alternative Currency, other than the currency of a country that is a member of the Organization for Economic Cooperation and Development at such time located in North America or Europe.

 

“Spot Rate” for a currency means the rate determined by the Paying Agent or any Issuing Bank, as applicable, to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date as of which the foreign exchange computation is made; provided  that the Paying Agent or such Issuing Bank may obtain such spot rate from another financial institution designated by the Paying Agent or such Issuing Bank if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency; and provided  further that the Issuing Bank may use such spot rate quoted on the date as of which the foreign exchange computation is made in the case of any Letter of Credit denominated in an Alternative Currency.

 

“Standard Securitization Undertakings” means reasonable and customary representations, warranties, covenants and indemnities entered into by the Borrower or any Subsidiary of the Borrower in connection with a Permitted Receivables Financing.

 

“Standby Letter of Credit” means, any Letter of Credit issued under the Letter of Credit Facility, other than a Trade Letter of Credit.

 

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“Sterling”  means the lawful currency of the United Kingdom.

 

“Subject Property” means, all property and assets acquired after the Effective Date that are or are intended to be Collateral, including, without limitation, all inventory, accounts receivable and related documents and related general intangibles.

 

“Subsidiary” of any Person means, any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership, joint venture or limited liability company or (c) the beneficial interest in such trust or estate is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries; provided, however, there shall be excluded, in any event, from this definition of Subsidiary, other than for purposes of (i) the preparation and delivery of financial statements pursuant to Sections 5.03(b) and (c), and (ii) the calculation of and compliance with the financial covenants set forth in Sections 5.04(a) through (c), the Excluded Subsidiaries.

 

“Subsidiary Guarantors” means, the Subsidiaries of the Borrower listed on Schedule II hereto and each other Subsidiary of the Borrower that elects to execute and deliver a guaranty pursuant to Section 5.01(j).

 

“Subsidiary Guaranty” has the meaning specified in Section 3.01(a)(iii).

 

“Surviving Debt” means, the Senior Notes and the other Debt of each Loan Party and its Subsidiaries outstanding immediately before and after giving effect to the Transaction and listed on Schedule 4.01(t).

 

“Swing Line Advance” means, an advance made by (a) the Swing Line Bank pursuant to Section 2.01(b) or (b) any Revolving Credit Lender pursuant to Section 2.02(b).

 

“Swing Line Bank” means, initially, PNC Bank, and thereafter each Person that shall become the Swing Line Bank hereunder pursuant to Section 8.07.

 

“Swing Line Borrowing” means, a borrowing consisting of a Swing Line Advance made by the Swing Line Bank pursuant to Section 2.01(b) or the Revolving Credit Lenders pursuant to Section 2.02(b).

 

“Swing Line Facility” has the meaning specified in Section 2.01(b).

 

“Swing Line Reserve” has the meaning specified in Section 2.02(b)(i).

 

“Swiss Franc” means the lawful currency of Switzerland.

 

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“TARGET2” shall mean the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes a single shared platform and which was launched on November 19, 2007.

 

“TARGET Day” shall mean any day on which TARGET2 is open for the settlement of payment in Euro.

 

“Taxes” has the meaning specified in Section 2.12(a).

 

“Termination Date” means the earlier of (a) the date of termination in whole of the Revolving Credit Commitments, and the Letter of Credit Commitment, pursuant to Section 2.05 or 6.01 and (b) September 30, 2016.

 

“Total Gross Leverage Ratio” means, at any date of determination, the ratio of (x) Consolidated Debt for Borrowed Money of the Borrower and its Subsidiaries as at such date of determination to (y) Consolidated EBITDA of the Borrower and its Subsidiaries for the most recently ended fiscal quarter of the Borrower for which financial statements are required to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, and the immediately preceding three fiscal quarters.

 

“Total Net Leverage Ratio” means, at any date of determination, the ratio of (x) Consolidated Net Debt for Borrowed Money of the Borrower and its Subsidiaries as at such date of determination to (y) Consolidated EBITDA of the Borrower and its Subsidiaries for the most recently ended fiscal quarter of the Borrower for which financial statements are required to be delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as the case may be, and the immediately preceding three fiscal quarters.

 

“Trade Letter of Credit” means, any Letter of Credit that is issued under the Letter of Credit Facility for the benefit of a supplier of Inventory to the Borrower or any of its Subsidiaries to effect payment for such Inventory.

 

“Transaction” means, the Refinancing and the other transactions contemplated by the Transaction Documents.

 

“Transaction Documents” means, collectively, the Loan Documents and the Related Documents (other than clause (ii) of the definition thereof).

 

“Type” refers to the distinction between Advances bearing interest at the Base Rate and Advances bearing interest at the Eurodollar Rate.

 

“Unrestricted Cash” means cash or Cash Equivalents of the Borrower or any of its Subsidiaries that would not appear as “restricted” on a consolidated balance sheet of the Borrower and its Subsidiaries.

 

“Unused Revolving Credit Commitment” means, with respect to any Revolving Credit Lender at any time, (a) such Lender’s Revolving Credit Commitment at such time minus (b) the sum of (i) the Dollar Equivalent of the aggregate principal amount of all Revolving Credit Advances and Letter of Credit Advances made by such Lender (in its capacity as a Lender) and

 

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outstanding at such time plus (ii) such Lender’s Pro Rata Share of (A) the Dollar Equivalent of the aggregate Available Amount of all Letters of Credit outstanding at such time, (B) the Dollar Equivalent of the aggregate principal amount of all Letter of Credit Advances made by the Issuing Banks pursuant to Section 2.03(c) and outstanding at such time, (C) the Swing Line Reserve at such time and (D) any Swing Line Advances made pursuant to Section 2.02(b)(ii) at such time.

 

“Voting Interests” means, shares of capital stock issued by a corporation, or equivalent Equity Interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

 

“Welfare Plan” means, a welfare plan, as defined in Section 3(1) of ERISA, that is maintained for employees of any Loan Party or in respect of which any Loan Party could have liability.

 

“Withdrawal Liability” has the meaning specified in Part I of Subtitle E of Title IV of ERISA.

 

“Yen” means the lawful currency of Japan.

 

Section 1.02.          Computation of Time Periods; Other Definitional Provisions.  In this Agreement and the other Loan Documents in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”.  References in the Loan Documents to any agreement or contract “as amended” shall mean and be a reference to such agreement or contract as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with its terms.

 

Section 1.03.          Accounting Terms.  All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.01(g) (“GAAP”).

 

Section 1.04.          Exchange Rates; Currency Equivalents. (a)     The Paying Agent or an Issuing Bank, as applicable, shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar Equivalent amounts of Borrowings and outstanding amounts denominated in Alternative Currencies.  Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur.  Except for purposes of financial statements delivered by Loan Parties hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be such Dollar Equivalent amount as so determined by the Paying Agent or an Issuing Bank, as applicable.

 

(b)           Wherever in this Agreement in connection with a Borrowing, conversion, continuation or prepayment of a Eurocurrency Rate Advance or the issuance, amendment or 

 

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extension of a Letter of Credit, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such Borrowing, Eurocurrency Rate Advance or Letter of Credit is denominated in an Alternative Currency, such amount shall be the relevant Alternative Currency Equivalent of such Dollar amount (rounded to the nearest unit of such Alternative Currency, with 0.5 of a unit being rounded upward), as determined by the Paying Agent or an Issuing Bank, as the case may be.

 

Section 1.05.          Additional Alternative Currencies. (a) The Borrower may from time to time request that Eurocurrency Rate Advances be made and/or Letters of Credit be issued in a currency other than those specifically listed in the definition of “Alternative Currency;” provided that such requested currency is a lawful currency (other than Dollars) that is readily available and freely transferable and convertible into Dollars.  In the case of any such request with respect to the making of Eurocurrency Rate Advances, such request shall be subject to the approval of the Paying Agent and each of the Lenders; and in the case of any such request with respect to the issuance of Letters of Credit, such request shall be subject to the approval of the Paying Agent and the applicable Issuing Bank.

 

(b)           Any such request shall be made to the Paying Agent not later than 11:00 a.m., 20 Business Days prior to the date of the desired Borrowing (or such other time or date as may be agreed by the Paying Agent and, in the case of any such request pertaining to Letters of Credit, the applicable Issuing Bank, in its or their sole discretion).  In the case of any such request pertaining to Eurocurrency Rate Advances, the Paying Agent shall promptly notify each Lender thereof; and in the case of any such request pertaining to Letters of Credit, the Paying Agent shall promptly notify the applicable Issuing Bank thereof.  Each Lender (in the case of any such request pertaining to Eurocurrency Rate Advances) or Issuing Bank (in the case of a request pertaining to Letters of Credit) shall notify the Paying Agent, not later than 11:00 a.m., ten Business Days after receipt of such request whether it consents, in its sole discretion, to the making of Eurocurrency Rate Advances or the issuance of Letters of Credit, as the case may be, in such requested currency.

 

(c)           Any failure by a Lender or Issuing Bank, as the case may be, to respond to such request within the time period specified in the preceding sentence shall be deemed to be a refusal by such Lender or Issuing Bank, as the case may be, to permit Eurocurrency Rate Advances to be made or Letters of Credit to be issued in such requested currency.  If the Paying Agent and all the Lenders consent to making Eurocurrency Rate Advances in such requested currency, the Paying Agent shall so notify the Borrower and such currency shall thereupon be deemed for all purposes to be an Alternative Currency hereunder for purposes of any Borrowings of Eurocurrency Rate Advances; and if the Paying Agent and applicable Issuing Bank consent to the issuance of Letters of Credit in such requested currency, the Paying Agent shall so notify the Borrower and such currency shall thereupon be deemed for all purposes to be an Alternative Currency hereunder for purposes of any Letter of Credit issuances. If the Administrative Agent shall fail to obtain consent to any request for an additional currency under this Section 1.05, the Paying Agent shall promptly so notify the Borrower.

 

Section 1.06.          Change of Currency. (a)              Each obligation of the Borrowers to make a payment denominated in the national currency unit of any member state of the European Union that adopts the Euro as its lawful currency after the date hereof shall be redenominated 

 

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into Euro at the time of such adoption (in accordance with the EMU Legislation).  If, in relation to the currency of any such member state, the basis of accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the London interbank market for the basis of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the Euro as its lawful currency; provided that if any Borrowing in the currency of such member state is outstanding immediately prior to such date, such replacement shall take effect, with respect to such Borrowing, at the end of the then current Interest Period.

 

(b)           Each provision of this Agreement shall be subject to such reasonable changes of construction as the Paying Agent may from time to time specify to be appropriate to reflect the adoption of the Euro by any member state of the European Union and any relevant market conventions or practices relating to the Euro.

 

(c)           Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Paying Agent may from time to time specify to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.

 

Section 1.07.          Letter of Credit Amounts.  Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar Equivalent of the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any letter of credit application and any related document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

ARTICLE II

 

AMOUNTS AND TERMS OF THE ADVANCES
 AND THE LETTERS OF CREDIT

 

Section 2.01.          The Advances and the Letters of Credit.

 

(a)           The Revolving Credit Advances.  Each Revolving Credit Lender severally agrees, on the terms and conditions hereinafter set forth, to make advances (each, a “Revolving Credit Advance”) to the Borrower from time to time on any Business Day during the period from the Effective Date until the Termination Date (i) in an amount for each such Advance not to exceed such Lender’s Unused Revolving Credit Commitment at such time, (ii) in an aggregate amount for all revolving Credit Advances outstanding at any one time not to exceed an amount equal to (A) the aggregate Revolving Credit Commitments of all Revolving Credit Lenders, minus (B) the aggregate Swing Line Advances, minus (C) the aggregate Available Amount of all outstanding Letters of Credit, in each case at such time and (iii) in an aggregate amount for all 

 

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Revolving Credit Advances denominated in an Alternative Currency outstanding at any one time not to exceed, together with the aggregate amount of the Dollar Equivalent of all Letters of Credit and Letter of Credit Advances denominated in an Alternative Currency that are outstanding at such time, the Alternative Currency Sublimit.  Each Revolving Credit Borrowing shall be in an aggregate amount equal to the Dollar Equivalent of $5,000,000 or an integral multiple equal to the Dollar Equivalent of $1,000,000 in excess thereof (other than a Borrowing the proceeds of which shall be used solely to repay or prepay in full outstanding Swing Line Advances or outstanding Letter of Credit Advances) and shall consist of Revolving Credit Advances made simultaneously by the Revolving Credit Lenders ratably according to their Revolving Credit Commitments.  Within the limits of each Revolving Credit Lender’s Unused Revolving Credit Commitment in effect from time to time, the Borrower may borrow under this Section 2.01(a), prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(a).

 

(b)           The Swing Line Advances.  Subject to other arrangements as referred to in Section 2.02(b)(i), the Borrower may request the Swing Line Bank to make, and the Swing Line Bank may, if in its sole discretion it elects to do so, make, on the terms and conditions hereinafter set forth, Swing Line Advances to the Borrower in Dollars from time to time on any Business Day during the period from the Effective Date until the Termination Date (i) in an aggregate amount for all Swing Line Advances not to exceed at any time outstanding $50,000,000 (the “Swing Line Facility”) and (ii) if made pursuant to Section 2.02(b)(i), in an amount not at any time exceeding the amount of the then applicable Swing Line Reserve.  No Swing Line Advance shall be used for the purpose of funding the payment of principal of any other Swing Line Advance.  Each Swing Line Borrowing shall be in a minimum amount no less than $100,000 and in multiples of $100,000 in excess thereof, and shall be made as a Base Rate Advance.  Within the limits of the Swing Line Facility and within the limits referred to in clause (ii) above, so long as the Swing Line Bank, in its sole discretion, elects to make Swing Line Advances, the Borrower may borrow under this Section 2.01(b), repay pursuant to Section 2.04(d) or prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(b).

 

(c)           The Letters of Credit.  Each Issuing Bank severally agrees, on the terms and conditions hereinafter set forth, to issue (or cause its Affiliate that is a commercial bank to issue on its behalf) letters of credit for the account of the Borrower from time to time on any Business Day during the period from the Effective Date until 60 days before the Termination Date in an aggregate Available Amount (i) for each such Letter of Credit, together with all other Letters of Credit not to exceed at any time the Letter of Credit Facility at such time, (ii) for each such Letter of Credit not to exceed at any time the lesser of (x) such Issuing Bank’s Letter of Credit Commitment at such time and (y) the Unused Revolving Credit Commitments of the Revolving Credit Lenders at such time and (iii) for each such Letter of Credit denominated in an Alternative Currency not to exceed, together with all other outstanding Letters of Credit , Letter of Credit Advances and Revolving Credit Advances denominated in an Alternative Currency, the Alternative Currency Sublimit.  It is understood and agreed that the Existing Letters of Credit shall be deemed to be Letters of Credit issued hereunder for all purposes under this Agreement and the Loan Documents.  No Letter of Credit shall have an expiration date (including all rights of the Borrower or the beneficiary to require renewal) later than the earlier of 60 days before the Termination Date and (A) in the case of a Standby Letter of Credit, one year (constituting 365 days or 366 days, as the case may be) after the date of issuance thereof, but may by its terms be renewable annually upon notice (a “Notice of Renewal”) given to the Issuing Bank and the 

 

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Paying Agent on or prior to any date for notice of renewal set forth in such Letter of Credit but in any event at least ten Business Days prior to the date of the proposed renewal of such Standby Letter of Credit and upon fulfillment of the applicable conditions set forth in Article III unless such Issuing Bank has notified the Borrower (with a copy to the Paying Agent) on or prior to the date for notice of termination set forth in such Letter of Credit but in any event at least ten Business Days prior to the then effective expiration date of its election not to renew such Standby Letter of Credit (a “Notice of Termination”; it being understood and agreed that an Issuing Bank shall not be entitled to issue a Notice of Termination with respect to such a renewal unless (i) the conditions precedent to the issuance of Letters of Credit set forth in Section 3.02 shall not have been fulfilled or waived in accordance herewith, or (ii) a Default shall have occurred and be continuing, or (iii) pursuant to such renewal the effective expiration date of such Letter of Credit would occur after the Termination Date or (iv) such Issuing Bank shall have procured a replacement Issuing Bank) and (B) in the case of a Trade Letter of Credit, 60 days after the date of issuance thereof; provided that the terms of each Standby Letter of Credit that is renewable annually shall (x) require the Issuing Bank that issued such Standby Letter of Credit to give the beneficiary named in such Standby Letter of Credit notice of any Notice of Termination, (y) permit such beneficiary, upon receipt of such notice, to draw under such Standby Letter of Credit prior to the date such Standby Letter of Credit otherwise would have been automatically renewed and (z) not, unless otherwise agreed by the Issuing Bank, permit the expiration date (after giving effect to any renewal) of such Standby Letter of Credit in any event to be extended to a date later than 60 days before the Termination Date.  If either a Notice of Renewal is not given by the Borrower or a Notice of Termination is given by the relevant Issuing Bank pursuant to the immediately preceding sentence, such Standby Letter of Credit shall expire on the date on which it otherwise would have been renewed; provided, however, that even in the absence of receipt of a Notice of Renewal the relevant Issuing Bank may in its discretion, unless instructed to the contrary by the Paying Agent or the Borrower, deem that a Notice of Renewal had been timely delivered and in such case, a Notice of Renewal shall be deemed to have been so delivered for all purposes under this Agreement.  Each Standby Letter of Credit shall contain a provision authorizing the Issuing Bank thereunder to deliver to the beneficiary of such Letter of Credit, upon the occurrence and during the continuance of an Event of Default, a notice (a “Default Termination Notice”) terminating such Letter of Credit and giving such beneficiary 15 days to draw such Letter of Credit.  Within the limits of the Letter of Credit Facility, and subject to the limits referred to above, the Borrower may request the issuance of Letters of Credit under this Section 2.01(c), repay any Letter of Credit Advances resulting from drawings thereunder pursuant to Section 2.03(c) and request the issuance of additional Letters of Credit under this Section 2.01(c).

 

Section 2.02.          Making the Advances.

 

(a)           Except as otherwise provided in Section 2.02(b) or 2.03, each Borrowing shall be made on notice, given not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances in Dollars, on the fourth Business Day prior to the date of the proposed Borrowing in the case of a Borrowing denominated in an Alternative Currency, or the date of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to the Paying Agent, which shall give to each Appropriate Lender prompt notice thereof by facsimile.  Each such notice of a Borrowing (a “Notice of Borrowing”) shall be in

 

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writing or by telephone, confirmed immediately in writing or facsimile, in substantially the form of Exhibit B hereto, specifying therein the requested (i) date of such Borrowing, (ii) Facility under which such Borrowing is to be made, (iii) Type of Advances comprising such Borrowing, (iv) aggregate amount of such Borrowing (expressed in Dollars), (v) currency of such proposed Borrowing and (vi) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Advance.  Each Appropriate Lender shall, before (A) 11:00 A.M. (New York City time) on the date of such Borrowing, in the case of a Borrowing consisting of Eurodollar Rate Advances or (B) 3:00 P.M. (New York City time) on the date of such Borrowing, in the case of a Borrowing consisting of Base Rate Advances, make available for the account of its Applicable Lending Office to the Paying Agent at the Paying Agent Account, in same day funds, such Lender’s ratable portion of such Borrowing in accordance with the respective Commitments under the applicable Facility of such Lender and the other Appropriate Lenders.  After the Paying Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Paying Agent will make such funds available to the Borrower by crediting the Borrower’s Account; provided, however, that, in the case of any Revolving Credit Borrowing, the Paying Agent shall first make a portion of such funds equal to the aggregate principal amount of any Swing Line Advances and Letter of Credit Advances made by the Swing Line Bank or any Issuing Bank, as the case may be, and by any other Revolving Credit Lender and outstanding on the date of such Revolving Credit Borrowing, plus interest accrued and unpaid thereon to and as of such date, available to the Swing Line Bank or such Issuing Bank, as the case may be, and such other Revolving Credit Lenders for repayment of such Swing Line Advances and Letter of Credit Advances.

 

(b)           (i)  Swing Line Borrowings may be made either upon notice as set forth in Section 2.02(b)(ii) below or pursuant to this Section 2.02(b)(i) on a daily basis under mechanics mutually agreed to by the Borrower and the Swing Line Bank, subject in any case to the fulfillment of the applicable conditions precedent set forth in Article III hereof.  The Swing Line Reserve at any time shall be the amount most recently established by the Borrower by written notice to the Paying Agent confirmed in writing by the Swing Line Bank as the maximum aggregate principal amount of Swing Line Borrowings to be permitted to be outstanding at any one time (the “Swing Line Reserve”).  Swing Line Advances made pursuant to this Section 2.02(b)(i) shall be made without any requirement for a prior written or telephonic request given to the Paying Agent.  The Swing Line Bank will notify the Paying Agent, on a monthly basis, of any Swing Line Advances so made.  The Swing Line Bank shall not at any time permit the aggregate outstanding amount of the Swing Line Advances to exceed the then applicable amount of the Swing Line Reserve.

 

(ii)           Each Swing Line Borrowing, if not made in accordance with Section 2.02(b)(i) above, shall be made on notice, given not later than 3:00 P.M. (New York City time) on the date of the proposed Swing Line Borrowing, by the Borrower to the Swing Line Bank and the Paying Agent.  Each such notice of a Swing Line Borrowing (a “Notice of Swing Line Borrowing”) shall be in writing or by telephone, confirmed immediately in writing, or facsimile, specifying therein the requested (i) date of such Borrowing, (ii) amount of such Borrowing and (iii) maturity of such Borrowing (which maturity shall be no later than the seventh day after the requested date of such Borrowing).  If, in its sole discretion, it elects to make the requested Swing Line Advance, the Swing Line Bank will make the amount thereof available to the Paying Agent at the Paying Agent Account, in same day funds.  After the Paying 

 

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Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Paying Agent will make such funds available to the Borrower by crediting the Borrower’s Account.

 

(iii)          Upon written demand by the Swing Line Bank, with a copy of such demand to the Paying Agent, each other Revolving Credit Lender shall purchase from the Swing Line Bank, and the Swing Line Bank shall sell and assign to each such other Revolving Credit Lender, such other Lender’s Pro Rata Share of such outstanding Swing Line Advance as of the date of such demand, by making available for the account of its Applicable Lending Office to the Paying Agent for the account of the Swing Line Bank, by deposit to the Paying Agent’s Account, in same day funds, an amount equal to the portion of the outstanding principal amount of such Swing Line Advance to be purchased by such Lender.  The Borrower hereby agrees to each such sale and assignment, and all parties hereto acknowledge and agree that the obligations of such other Revolving Credit Lenders to purchase outstanding Swing Line Advances is absolute and unconditional under all circumstances, and shall be enforceable notwithstanding the occurrence of any Default or Event of Default, the termination of the Revolving Credit Commitments or any other circumstances.  Each Revolving Credit Lender agrees to purchase its Pro Rata Share of an outstanding Swing Line Advance on (i) the Business Day on which demand therefor is made by the Swing Line Bank, provided that notice of such demand is given not later than 11:00 A.M. (New York City time) on such Business Day or (ii) the first Business Day next succeeding such demand if notice of such demand is given after such time.  Upon any such assignment by the Swing Line Bank to any other Revolving Credit Lender of a portion of a Swing Line Advance, the Swing Line Bank represents and warrants to such other Lender that the Swing Line Bank is the legal and beneficial owner of such interest being assigned by it, but makes no other representation or warranty and assumes no responsibility with respect to such Swing Line Advance, the Loan Documents or any Loan Party.  If and to the extent that any Revolving Credit Lender shall not have so made the amount of such Swing Line Advance available to the Paying Agent, or if the Swing Line Lender must disgorge or return any amounts paid by the Borrower in respect thereof, such Revolving Credit Lender agrees to pay to the Paying Agent for the account of the Swing Line Bank forthwith on demand such amount together with interest thereon, for each day from the date of demand by the Swing Line Bank until the date such amount is paid to the Paying Agent, at the Base Rate.  If such Lender shall pay to the Paying Agent such amount for the account of the Swing Line Bank on any Business Day, such amount so paid in respect of principal shall constitute a Swing Line Advance made by such Lender on such Business Day for purposes of this Agreement, and the outstanding principal amount of the Swing Line Advance made by the Swing Line Bank shall be reduced by such amount on such Business Day.

 

(c)           Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000 or if the obligation of the Appropriate Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to Section 2.09 or 2.10 and (ii) the Revolving Credit Advances may not be outstanding as part of more than ten separate Borrowings.

 

(d)           Each Notice of Borrowing and Notice of Swing Line Borrowing shall be irrevocable and binding on the Borrower.  In the case of any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall 

 

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indemnify each Appropriate Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date.

 

(e)           Unless the Paying Agent shall have received notice from an Appropriate Lender prior to the date of any Borrowing under a Facility under which such Lender has a Commitment that such Lender will not make available to the Paying Agent such Lender’s ratable portion of such Borrowing, the Paying Agent may assume that such Lender has made such portion available to the Paying Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Paying Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount.  If and to the extent that such Lender shall not have so made such ratable portion available to the Paying Agent, such Lender and the Borrower severally agree to repay or pay to the Paying Agent forthwith on demand such corresponding amount and to pay interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid or paid to the Paying Agent, at (i) in the case of the Borrower, the interest rate applicable at such time under Section 2.07 to Advances comprising such Borrowing and (ii) in the case of such Lender, at the greater of the Federal Funds Effective Rate and a rate determined by the Paying Agent in accordance with banking industry rules on interbank compensation.  If such Lender shall pay to the Paying Agent such corresponding amount, such amount so paid shall constitute such Lender’s Advance as part of such Borrowing for all purposes.

 

(f)            The failure of any Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing.

 

Section 2.03.          Issuance of and Drawings and Reimbursement Under Letters of Credit.  (a) Request for Issuance.  Each Letter of Credit shall be issued upon notice, given not later than 11:00 A.M. (New York City time) on the fifth Business Day prior to the date of the proposed issuance of such Letter of Credit, by the Borrower to any Issuing Bank, which shall give to the Paying Agent and each Revolving Credit Lender prompt notice thereof in writing or by facsimile.  Each such notice of issuance of a Letter of Credit (a “Notice of Issuance”) shall be in writing or by telephone, confirmed immediately in writing, or facsimile, specifying therein the requested (i) date of such issuance (which shall be a Business Day), (ii) Available Amount and currency (which shall be Dollars or an Alternative Currency) of such Letter of Credit, (iii) expiration date of such Letter of Credit, (iv) name and address of the beneficiary of such Letter of Credit and (v) form of such Letter of Credit, and shall be accompanied by such application and agreement for letter of credit as such Issuing Bank may specify to the Borrower for use in connection with such requested Letter of Credit (a “Letter of Credit Agreement”).  If (x) the requested form of such Letter of Credit is acceptable to such Issuing Bank in its sole discretion and (y) it has not received notice of objection to such issuance from Lenders holding 

 

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at least a majority of the Revolving Credit Commitments, such Issuing Bank will, upon fulfillment of the applicable conditions set forth in Article III, make such Letter of Credit available to the Borrower at its office referred to in Section 8.02 or as otherwise agreed with the Borrower in connection with such issuance; provided that no Issuing Bank shall be required to issue any Letter of Credit if any Lender is at that time a Defaulting Lender, unless the Issuing Bank has entered into arrangements, including the delivery of cash collateral satisfactory to such Issuing Bank with the Borrower or such Lender to eliminate such Issuing Bank’s actual or potential Fronting Exposure (after giving effect to Section 2.15(a)(iii)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other Letter of Credit Advances as to which the Issuing Bank has actual or potential Fronting Exposure, as it may elect in its sole discretion.  In the event and to the extent that the provisions of any Letter of Credit Agreement shall conflict with this Agreement, the provisions of this Agreement shall govern.

 

(b)           Letter of Credit Reports.  Each Issuing Bank shall furnish (i) to the Paying Agent on or about the first Business Day of each week a written report summarizing issuance and expiration dates of Letters of Credit issued by such Issuing Bank during the previous week and drawings during such week under all Letters of Credit, (ii) to each Revolving Credit Lender on or about the first Business Day of each month a written report summarizing issuance and expiration dates of Letters of Credit issued by such Issuing Bank during the preceding month and drawings during such month under all such Letters of Credit and (iii) to the Paying Agent and each Revolving Credit Lender on or about the first Business Day of each calendar quarter a written report setting forth the average daily aggregate Available Amount during the preceding calendar quarter of all Letters of Credit issued by such Issuing Bank.

 

(c)           Drawing and Reimbursement.  Upon receipt from the beneficiary of any Letter of Credit of any notice of drawing under such Letter of Credit, the Issuing Bank shall notify the Borrower and the Paying Agent thereof.  In the case of a Letter of Credit denominated in an Alternative Currency, the Borrower shall reimburse the Issuing Bank in such Alternative Currency, unless (A) the Issuing Bank (at its option) shall have specified in such notice that it will require reimbursement in Dollars, or (B) in the absence of any such requirement for reimbursement in Dollars, the Borrower shall have notified the Issuing Bank promptly following receipt of the notice of drawing that the Borrower will reimburse the Issuing Bank in Dollars.  In the case of any such reimbursement in Dollars of a drawing under a Letter of Credit denominated in an Alternative Currency, the Issuing Bank shall notify the Borrower of the Dollar Equivalent of the amount of the drawing promptly following the determination thereof.  Not later than 11:00 a.m. on the Business Day following the date of any payment by the Issuing Bank under a Letter of Credit to be reimbursed in Dollars, or the Applicable Time on the date of any payment by the Issuing Bank under a Letter of Credit to be reimbursed in an Alternative Currency (each such date, an “Honor Date”), the Borrower shall reimburse the Issuing Bank through the Paying Agent in an amount equal to the amount of such drawing and in the applicable currency.  If the Borrower fails to so reimburse the Issuing Bank by such time, the Paying Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (expressed in Dollars in the amount of the Dollar Equivalent thereof in the case of a Letter of Credit denominated in an Alternative Currency) (the “Unreimbursed Amount”), and the amount of such Lender’s Pro Rata Share thereof.  In such event, the Borrower shall be deemed to have requested and the Issuing Bank shall deemed to have made a Letter of Credit Advance to be 

 

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disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in this Agreement for the principal amount of Base Rate Advances, but subject to the amount of the unutilized portion of the Commitments and the conditions set forth in Section 3.02 (other than the delivery of a Notice of Borrowing).  Any notice given by the Issuing Bank or the Paying Agent pursuant to this Section 2.03(c) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

 

Upon any notice by any Issuing Bank to the Lenders pursuant to the foregoing paragraph, each Revolving Credit Lender shall purchase from such Issuing Bank, and such Issuing Bank shall sell and assign to each such Revolving Credit Lender, such Lender’s Pro Rata Share of such outstanding Letter of Credit Advance as of the date of such purchase, by making available for the account of its Applicable Lending Office to the Paying Agent for the account of such Issuing Bank, by deposit to the Paying Agent’s Account, in same day funds, an amount in Dollars equal to the portion of the outstanding principal amount of such Letter of Credit Advance to be purchased by such Lender; provided that no Lender shall have any obligation to make any such purchase in respect of a drawing under any Letter of Credit that occurs following the Termination Date.  Promptly after receipt thereof, the Paying Agent shall transfer such funds in Dollars to such Issuing Bank.  The Borrower hereby agrees to each such sale and assignment, and all parties hereto acknowledge and agree that the obligations of such other Revolving Credit Lenders to purchase outstanding Letter of Credit Advances is absolute and unconditional under all circumstances, and shall be enforceable notwithstanding the occurrence of any Default or Event of Default, the termination of the Revolving Credit Commitments or any other circumstances.  Each Revolving Credit Lender agrees to purchase its Pro Rata Share of an outstanding Letter of Credit Advance on (i) the Business Day on which demand therefor is made by the applicable Issuing Bank, provided that notice of such demand is given not later than 11:00 A.M. (New York City time) on such Business Day, or (ii) the first Business Day next succeeding such demand if notice of such demand is given after such time.  Upon any such assignment by an Issuing Bank to any Revolving Credit Lender of a portion of a Letter of Credit Advance, such Issuing Bank represents and warrants to such other Lender that such Issuing Bank is the legal and beneficial owner of such interest being assigned by it, free and clear of any liens, but makes no other representation or warranty and assumes no responsibility with respect to such Letter of Credit Advance, the Loan Documents or any Loan Party.  If and to the extent that any Revolving Credit Lender shall not have so made the amount of such Letter of Credit Advance available to the Paying Agent, or if an Issuing Bank must disgorge or return any amounts paid by the Borrower in respect thereof, such Revolving Credit Lender agrees to pay to the Paying Agent for the account of such Issuing Bank forthwith on demand such amount together with interest thereon, for each day from the date of demand by such Issuing Bank until the date such amount is paid to the Paying Agent, at the Federal Funds Rate for its account or the account of such Issuing Bank, as applicable.  If such Lender shall pay to the Paying Agent such amount for the account of such Issuing Bank on any Business Day, such amount so paid in respect of principal shall constitute a Letter of Credit Advance denominated in Dollars made by such Lender on such Business Day for purposes of this Agreement, and the outstanding principal amount of the Letter of Credit Advance made by such Issuing Bank shall be reduced by such amount on such Business Day.

 

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(d)           Failure to Make Letter of Credit Advances.  The failure of any Lender to make the Letter of Credit Advance to be made by it on the date specified in Section 2.03(c) shall not relieve any other Lender of its obligation hereunder to make its Letter of Credit Advance on such date, but no Lender shall be responsible for the failure of any other Lender to make the Letter of Credit Advance to be made by such other Lender on such date.

 

(e)           Cash Collateral.  No later than 30 days prior to the Termination Date, in the event that any Letter of Credit has an expiration date later than the Termination Date, the Borrower shall deposit an amount equal to 100% of the Available Amount of all such Letters of Credit into the L/C Cash Collateral Account.

 

Section 2.04.          Repayment of Advances.  (a)  Revolving Credit Advances.  The Borrower shall repay to the Paying Agent for the ratable account of the Revolving Credit Lenders on the Termination Date the aggregate principal amount of the Revolving Credit Advances then outstanding.

 

(b)           Swing Line Advances.  The Borrower shall repay to the Paying Agent for the account of the Swing Line Bank and each other Revolving Credit Lender that has made a Swing Line Advance the outstanding principal amount of each Swing Line Advance made by each of them on the earlier of the maturity date specified in the applicable Notice of Swing Line Borrowing (which maturity shall be no later than the seventh day after the requested date of such Borrowing) and the Termination Date.

 

(c)           Letter of Credit Advances.

 

(i)            The Borrower shall repay to the Paying Agent for the account of each Issuing Bank and each other Revolving Credit Lender that has made a Letter of Credit Advance on the earlier of demand and the Termination Date the outstanding principal amount of each Letter of Credit Advance made by each of them.

 

(ii)           The Obligations of the Borrower under this Agreement, any Letter of Credit Agreement and any other agreement or instrument relating to any Letter of Credit, and the obligations of Revolving Credit Lenders to reimburse any Issuing Bank for Letter of Credit Advances not reimbursed by the Borrower, shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement, such Letter of Credit Agreement and such other agreement or instrument under all circumstances, including, without limitation, the following circumstances:

 

(A)    any lack of validity or enforceability of any Loan Document, any Letter of Credit Agreement, any Letter of Credit or any other agreement or instrument relating thereto (all of the foregoing being, collectively, the “L/C Related Documents”);

 

(B)    any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations of the Borrower in respect of any L/C Related Document or any other amendment or waiver of or any consent to departure from all or any of the L/C Related Documents;

 

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(C)    the existence of any claim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of a Letter of Credit (or any Persons for which any such beneficiary or any such transferee may be acting), any Issuing Bank or any other Person, whether in connection with the transactions contemplated by the L/C Related Documents or any unrelated transaction;

 

(D)    any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

 

(E)     payment by any Issuing Bank under a Letter of Credit against presentation of a draft or certificate that does not comply with the terms of such Letter of Credit;

 

(F)     any exchange, release or non-perfection of any Collateral or other collateral, or any release or amendment or waiver of or consent to departure from the Guaranties or any other guarantee, for all or any of the Obligations of the Borrower in respect of the L/C Related Documents; or

 

(G)    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, the Borrower or a Guarantor.

 

Section 2.05.          Termination or Reduction of the Commitments.  (a)  Optional.  The Borrower may, upon at least five Business Days notice to the Paying Agent, terminate in whole or reduce in part the unused portions of the Letter of Credit Facility and the Unused Revolving Credit Commitments; provided, however, that each partial reduction of a Facility (i) shall be in an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and (ii) shall be made ratably among the Appropriate Lenders in accordance with their Commitments with respect to such Facility .

 

(b)           Mandatory.

 

(i)            The Letter of Credit Facility shall be permanently reduced from time to time on the date of each reduction in the Revolving Credit Facility by the amount, if any, by which the amount of the Letter of Credit Facility exceeds the Revolving Credit Facility after giving effect to such reduction of the Revolving Credit Facility.

 

(ii)           The Swing Line Facility shall be permanently reduced from time to time on the date of each reduction in the Revolving Credit Facility by the amount, if any, by which the amount of the Swing Line Facility exceeds the Revolving Credit Facility after giving effect to such reduction of the Revolving Credit Facility.

 

Section 2.06.          Prepayments.  (a)  Optional.  The Borrower may, upon notice not later than 1:00 P.M. (New York City time) at least one Business Day in advance in the case of Base Rate Advances, and not later than 1:00 P.M. (New York City time) at least three Business Days in advance in the case of Eurodollar Rate Advances and four Business Days in advance (or five Business Days in advance, in the case of prepayment of Advances denominated in Special 

 

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Notice Currencies) in the case of Eurocurrency Rate Advances denominated in Alternative Currencies, in each case to the Paying Agent stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given the Borrower shall, prepay the outstanding aggregate principal amount of the Advances comprising part of the same Borrowing in whole or ratably in part, together with accrued interest to the date of such prepayment on the aggregate principal amount prepaid; provided, however, that (x) each partial prepayment shall be in an aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and (y) if any prepayment of a Eurodollar Rate Advance is made on a date other than the last day of an Interest Period for such Advance, the Borrower shall also pay any amounts owing pursuant to Section 8.04(c).  Each such prepayment shall be applied, at the option of the Borrower either (i) to the Revolving Credit Facility or (ii) to the Swing Line Advances or (iii) to the Letter of Credit Advances.  Notwithstanding the foregoing, prepayment of Swing Line Advances held by the Swing Line Bank shall not require any prior notice.

 

(b)           Mandatory.

 

(i)            The Borrower shall, on the date of receipt of the Net Cash Proceeds of any Extraordinary Receipt by the Borrower or any of its Subsidiaries, prepay an aggregate principal amount of the Advances comprising part of the same Borrowings and deposit an amount in the L/C Cash Collateral Account in accordance with clause (v) below in an amount equal to the amount of such Net Cash Proceeds.

 

(ii)           The Borrower shall, on each Business Day, prepay an aggregate principal amount of the Revolving Credit Advances comprising part of the same Borrowings, the Letter of Credit Advances and the Swing Line Advances and deposit an amount in the L/C Cash Collateral Account in accordance with clause (v) below in an amount equal to the amount by which (A) the sum of the aggregate principal amount of (x) the Revolving Credit Advances, (y) the Letter of Credit Advances and (z) the Swing Line Advances then outstanding plus the aggregate Available Amount of all Letters of Credit then outstanding exceeds (B) the Revolving Credit Facility on such Business Day.

 

(iii)          The Borrower shall, on each Business Day, pay to the Paying Agent for deposit in the L/C Cash Collateral Account an amount sufficient to cause the aggregate amount on deposit in the L/C Cash Collateral Account to equal the amount by which the aggregate Available Amount of all Letters of Credit then outstanding exceeds the Letter of Credit Facility on such Business Day.

 

(iv)          If at any time the Borrowing Base Obligations exceed the Borrowing Base at such time, then the Borrower shall immediately prepay such excess by prepaying the Revolving Credit Facility as set forth in clause (v) below.

 

(v)           Prepayments of the Revolving Credit Facility made pursuant to clause (i), (ii), (iii) or (iv) above shall be first applied to prepay Letter of Credit Advances then outstanding until such Advances are paid in full, second applied to prepay Swing Line Advances then outstanding until such Advances are paid in full, third applied to prepay Revolving Credit Advances then outstanding comprising part of the same Borrowings until such Advances are paid in full and fourth deposited in the L/C Cash Collateral Account to cash collateralize 100% 

 

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of the Available Amount of the Letters of Credit then outstanding; and, in the case of prepayments of the Revolving Credit Facility required pursuant to clause (i), (ii), (iii) or (iv) above, the amount remaining (if any) after the prepayment in full of the Advances then outstanding and the 100% cash collateralization of the aggregate Available Amount of Letters of Credit then outstanding may be retained by the Borrower.  Upon the drawing of any Letter of Credit for which funds are on deposit in the L/C Cash Collateral Account (including following the Termination Date), such funds shall be applied to reimburse the Issuing Banks or Revolving Credit Lenders, as applicable.

 

(vi)          If the Paying Agent notifies the Borrower at any time that the outstanding amount of all Revolving Credit Advances, Letters of Credit and Letter of Credit Advances denominated in Alternative Currencies at such time exceeds the Alternative Currency Sublimit then in effect, then, within two Business Days after receipt of such notice, the Borrower shall prepay Revolving Credit Advances or Letter of Credit Advances in an aggregate amount sufficient to reduce such outstanding amount as of such date of payment  to an amount not to exceed 100% of the Alternative Currency Sublimit then in effect.

 

(vii)         All prepayments under this subsection (b) shall be made together with accrued interest to the date of such prepayment on the principal amount prepaid.

 

Section 2.07.          Interest.  (a)  Scheduled Interest.  The Borrower shall pay interest on the unpaid principal amount of each Advance owing to each Lender from and including the date of such Advance until (but excluding) the date such principal amount shall be paid in full, at the following rates per annum:

 

(i)            Base Rate Advances.  During such periods as such Advance is a Base Rate Advance, a rate per annum equal at all times to the sum of (A) the Base Rate in effect from time to time plus (B) the Applicable Margin in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December during such periods and on the date such Base Rate Advance shall be Converted or paid in full.

 

(ii)           Eurodollar Rate Advances.  During such periods as such Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such Interest Period for such Advance plus (B) the Applicable Margin in effect on the first day of such Interest Period, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.

 

(b)           Default Interest.  Upon the occurrence and during the continuance of a Default, the Borrower shall pay interest on (i) the unpaid principal amount of each Advance owing to each Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) above and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest extent permitted by law, the amount of any interest, fee or other amount payable under the Loan Documents that is not paid when due, from the date such amount shall be due until such 

 

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amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid, in the case of interest, on the Type of Advance on which such interest has accrued pursuant to clause (a)(i) or (a)(ii) above and, in all other cases, on Base Rate Advances pursuant to clause (a)(i) above.

 

(c)           Notice of Interest Period and Interest Rate.  Promptly after receipt of a Notice of Borrowing pursuant to Section 2.02(a), a notice of Conversion pursuant to Section 2.09 or a notice of selection of an Interest Period pursuant to the terms of the definition of “Interest Period”, the Paying Agent shall give notice to the Borrower and each Appropriate Lender of the applicable Interest Period and the applicable interest rate determined by the Paying Agent for purposes of clause (a)(i) or (a)(ii) above.

 

Section 2.08.          Fees.  (a)  Commitment Fee.  The Borrower shall pay to the Paying Agent for the account of the Revolving Credit Lenders a commitment fee, from the Effective Date in the case of each Initial Lender (and from the effective date specified in the Assignment and Assumption pursuant to which it became a Lender in the case of each other Lender) until the Termination Date, payable in arrears quarterly on the last day of each March, June, September and December, commencing on December 31, 2011 and on the Termination Date, at a rate per annum equal to the Commitment Fee Percentage, in each case on the average daily portion of the sum of (x) each Revolving Credit Lender’s Unused Revolving Credit Commitment plus (y) such Lender’s Pro Rata Share of the Swing Line Reserve and Swing Line Advances made pursuant to Section 2.02(b)(ii) (including all outstanding Swing Line Advances for which the Revolving Credit Lenders have not been required to make any purchase pursuant to Section 2.02(b)(iii)) during such period (excluding the Pro Rata Share of any Lender that is the Swing Line Bank who has made the relevant Swing Line Advance); provided, however, that any commitment fee accrued with respect to any of the Commitments of a Defaulting Lender during the period prior to the time such Lender became a Defaulting Lender and unpaid at such time shall not be payable by the Borrower so long as such Lender shall be a Defaulting Lender except to the extent that such commitment fee shall otherwise have been due and payable by the Borrower prior to such time; and provided further that no commitment fee shall accrue on any of the Commitments of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.

 

(b)           Letter of Credit Fees, Etc.

 

(i)            The Borrower shall pay to the Paying Agent for the account of each Revolving Credit Lender a commission, payable in arrears quarterly on the last day of each March, June, September and December, commencing December 31, 2011, and on the Termination Date, on such Lender’s Pro Rata Share of the average daily aggregate Available Amount during such quarter of Letters of Credit outstanding from time to time at the rate equal to the Applicable Margin for Eurodollar Rate Advances; provided, however, any Letter of Credit fees otherwise payable for the account of a Defaulting Lender with respect to any Letter of Credit as to which such Defaulting Lender has not provided cash collateral satisfactory to the applicable Issuing Bank pursuant to Section 2.03(a) shall be payable, to the maximum extent permitted by law, to the other Lenders in accordance with the upward adjustments of their respective Pro Rata Shares allocable to such Letter of Credit pursuant to Section 2.15(a)(iii), with the balance of such fee, if any, payable to the applicable Issuing Bank for its own account.

 

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(ii)           The Borrower shall pay to each Issuing Bank, for its own account, (A) an issuance fee for each Letter of Credit issued by such Issuing Bank in an amount as the Borrower and such Issuing Bank may agree, payable on the date of issuance and on renewal of such Letter of Credit, and (B) such other commissions, fronting fees, transfer fees and other fees and charges in connection with the issuance or administration of each Letter of Credit issued by such Issuing Bank as the Borrower and such Issuing Bank shall agree.

 

(c)           Agents’ Fees.  The Borrower shall pay to each Agent and each Joint Lead Arranger for its own account such fees as may from time to time be agreed between the Borrower and such Agent or such Joint Lead Arranger, as the case may be, including the fees payable to the Joint Lead Arrangers pursuant to the Fee Letter.

 

Section 2.09.          Conversion and Continuation of Advances.  (a)  Optional.  Each Conversion of Advances from one Type to another and each continuation of Eurodollar Rate Advances may be made, subject to the provisions of Sections 2.07 and 2.10, upon the Borrower’s irrevocable notice no later than 11:00 A.M. (New York City time) (i) on the third Business Day prior to the date of the proposed Conversion or continuation of Eurodollar Rate Advances denominated in Dollars or of any Conversion of Eurodollar Rate Advances denominated in Dollars to Base Rate Advances and (ii) on the fourth Business Day (or fifth Business Day in the case of a Special Notice Currency) prior to the date of any Conversion or continuation of Eurodollar Rate Advances denominated in Alternative Currencies; provided, however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an amount not less than the minimum amount specified in Section 2.02(c), no Conversion of any Advances shall result in more separate Borrowings than permitted under Section 2.02(c) and each Conversion of Advances comprising part of the same Borrowing under any Facility shall be made ratably among the Appropriate Lenders in accordance with their Commitments under such Facility.  Each such notice of Conversion or continuation shall, within the restrictions specified above, specify (1) the date of such Conversion or continuation, (2) the Advances to be Converted or continued and (3) if such Conversion or continuation is into Eurodollar Rate Advances, the duration of the initial Interest Period for such Advances; provided further that in the case of a failure to timely request a continuation of Advances denominated in an Alternative Currency, such Advances shall be continued as Eurodollar Rate Advances in their original currency with an Interest Period of one month.  No Advance may be Converted into or continued as an Advance denominated in a different currency, but instead must be prepaid in the original currency of such Advance and reborrowed in the other currency.

 

(b)           Mandatory.

 

(i)            On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $5,000,000, such Advances shall automatically Convert into Base Rate Advances.

 

(ii)           If the Borrower shall fail to select the duration of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of

 

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“Interest Period” in Section 1.01, the Paying Agent will forthwith so notify the Borrower and the Appropriate Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance.

 

(iii)          Upon the occurrence and during the continuance of any Default, (x) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (y) the obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended.

 

Section 2.10.          Increased Costs, Etc.  (a)  If, due to either (i) any Change in Law or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law),  there shall be any increase in the cost to any Lender Party of agreeing to make or of making, funding or maintaining Eurodollar Rate Advances (whether in Dollars or an Alternative Currency) or of agreeing to issue or of issuing or maintaining or participating in Letters of Credit (whether in Dollars or an Alternative Currency) or of agreeing to make or of making or maintaining Letter of Credit Advances (whether in Dollars or an Alternative Currency) (excluding, for purposes of this Section 2.10, any such increased costs resulting from (x) Taxes or Other Taxes (as to which Section 2.12 shall govern) and (y) changes in the basis of taxation of overall net income or overall gross income by the United States or by the foreign jurisdiction or state under the laws of which such Lender Party is organized or has its Applicable Lending Office or any political subdivision thereof), then the Borrower shall from time to time, upon demand by such Lender Party (with a copy of such demand to the Paying Agent), pay to the Paying Agent for the account of such Lender Party additional amounts sufficient to compensate such Lender Party for such increased cost; provided, however, that a Lender Party claiming additional amounts under this Section 2.10(a) agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Applicable Lending Office if the making of such a designation would avoid the need for, or reduce the amount of, such increased cost that may thereafter accrue and would not, in the reasonable judgment of such Lender Party, be otherwise disadvantageous to such Lender Party.  A notice as to the amount of such increased cost, submitted to the Borrower by such Lender Party, shall be conclusive and binding for all purposes, absent manifest error.

 

(b)           If, due to either (i) a Change in Law or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law), there shall be any increase in the amount of capital required or expected to be maintained by any Lender Party or any corporation controlling such Lender Party as a result of or based upon the existence of such Lender Party’s commitment to lend or to issue or participate in Letters of Credit hereunder and other commitments of such type or the issuance or maintenance of or participation in the Letters of Credit (or similar contingent obligations), then, upon demand by such Lender Party or such corporation (with a copy of such demand to the Paying Agent), the Borrower shall pay to the Paying Agent for the account of such Lender Party, from time to time as specified by such Lender Party, additional amounts sufficient to compensate such Lender Party in the light of such circumstances, to the extent that such Lender Party reasonably determines such increase in capital to be allocable to the existence of such Lender Party’s commitment to lend or to issue or participate in Letters of Credit hereunder or to the issuance or maintenance of or participation in any Letters of Credit.  A notice as to such amounts 

 

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submitted to the Borrower by such Lender Party shall be conclusive and binding for all purposes, absent manifest error.

 

(c)           If, with respect to any Eurodollar Rate Advances under any Facility, the Required Lenders notify the Paying Agent that the Eurodollar Rate for any Interest Period for such Advances will not adequately reflect the cost to such Lenders of making, funding or maintaining their Eurodollar Rate Advances (whether in Dollars or an Alternative Currency) for such Interest Period, the Paying Agent shall forthwith so notify the Borrower and the Appropriate Lenders, whereupon (i) each such Eurodollar Rate Advance denominated in Dollars under such Facility will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended until the Paying Agent shall notify the Borrower that such Lenders have determined that the circumstances causing such suspension no longer exist.   Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans in the affected currency or currencies or, failing that, will be deemed to have converted such request into a request for a borrowing of Base Rate Advances in the amounts specified therein.

 

(d)           Notwithstanding any other provision of this Agreement, if any Change in Law shall make it unlawful, or any central bank or other governmental authority shall assert that it is unlawful, for any Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder (whether denominated in Dollars or an Alternative Currency), then, on notice thereof and demand therefor by such Lender to the Borrower through the Paying Agent, (i) each Eurodollar Rate Advance denominated in Dollars under each Facility under which such Lender has a Commitment will automatically, upon such demand, Convert into a Base Rate Advance and (ii) the obligation of the Appropriate Lenders to make, or to maintain Eurodollar Rate Advances shall be suspended until the Paying Agent shall notify the Borrower that such Lender has determined that the circumstances causing such suspension no longer exist; provided,  however, that, before making any such demand, such Lender agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Eurodollar Lending Office if the making of such a designation would allow such Lender or its Eurodollar Lending Office to continue to perform its obligations to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate Advances and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.  Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans in the affected currency or currencies or, failing that, will be deemed to have converted such request into a request for a borrowing of Base Rate Advances in the amounts specified therein.

 

Section 2.11.          Payments and Computations.  (a)  The Borrower shall make each payment hereunder and under the Notes, irrespective of any right of counterclaim or set-off, not later than 11:00 A.M. (New York City time) on the day when due to the Paying Agent at the Paying Agent’s Account in same day funds, with payments being received by the Paying Agent after such time being deemed to have been received on the next succeeding Business Day; provided, that, all payments by the Borrower hereunder with respect to principal and interest on 

 

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Advances denominated in an Alternative Currency shall be made to the Paying Agent, for the account of the Lenders, in such Alternative Currency and in same day funds not later than the Applicable Time specified by the Paying Agent on the dates specified herein.  If, for any reason, the Borrower is prohibited by any Law from making any required payment hereunder in an Alternative Currency, the Borrower shall make such payment in Dollars in the Dollar Equivalent of the Alternative Currency payment amount.  The Paying Agent will promptly thereafter cause like funds to be distributed (i) if such payment by the Borrower is in respect of principal, interest, commitment fees or any other Obligation then payable hereunder and under the Notes to more than one Lender Party, to such Lender Parties for the account of their respective Applicable Lending Offices ratably in accordance with the amounts of such respective Obligations then payable to such Lender Parties and (ii) if such payment by the Borrower is in respect of any Obligation then payable hereunder to one Lender Party, to such Lender Party for the account of its Applicable Lending Office, in each case to be applied in accordance with the terms of this Agreement.  Upon its acceptance of an Assignment and Assumption and recording of the information contained therein in the Register pursuant to Section 8.07(d), from and after the effective date of such Assignment and Assumption, the Paying Agent shall make all payments hereunder and under the Notes in respect of the interest assigned thereby to the Lender Party assignee thereunder, and the parties to such Assignment and Assumption shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves.

 

(b)           The Borrower hereby authorizes each Lender Party and each of its Affiliates, if and to the extent payment owed to such Lender Party is not made when due hereunder or, in the case of a Lender, under the Note held by such Lender, to charge from time to time, to the fullest extent permitted by law, against any or all of the Borrower’s accounts with such Lender Party or such Affiliate any amount so due.

 

(c)           All computations of interest based on the Prime Rate shall be made by the Paying Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Eurodollar Rate or the Federal Funds Rate and of fees and Letter of Credit commissions shall be made by the Paying Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest, fees or commissions are payable, or, in the case of interest in respect of Advances denominated in Alternative Currencies as to which market practice differs from the foregoing, in accordance with such market practice; provided that in the case of Advances denominated in Canadian Dollars, such rate per annum shall be calculated on the basis of a 365 day year.  Each determination by the Paying Agent of an interest rate, fee or commission hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

(d)           Whenever any payment hereunder or under the Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or commitment fee, as the case may be; provided, however, that, if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.

 

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(e)           Unless the Paying Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Paying Agent for the account of the Lenders or an Issuing Bank hereunder that the Borrower will not make such payment, the Paying Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or such Issuing Bank, as the case may be, the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders or such Issuing Bank, as the case may be, severally agrees to repay to the Paying Agent forthwith on demand the amount so distributed to such Lender or an Issuing Bank, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Paying Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Paying Agent in accordance with banking industry rules on interbank compensation.

 

(f)            If the Paying Agent receives funds for application to the Obligations under the Loan Documents under circumstances for which the Loan Documents do not specify the Advances or the Facility to which, or the manner in which, such funds are to be applied, the Paying Agent may, but shall not be obligated to, elect to distribute such funds to each Lender Party ratably in accordance with such Lender Party’s proportionate share of the principal amount of all outstanding Advances and the Available Amount of all Letters of Credit then outstanding, in repayment or prepayment of such of the outstanding Advances or other Obligations owed to such Lender Party, and for application to such principal installments, as the Paying Agent shall direct.

 

Section 2.12.          Taxes.  (a)  Any and all payments by the Borrower to or for the account of any Lender Party or any Agent hereunder or under any Notes shall be made free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender Party and each Agent, taxes that are imposed on its overall net income by the United States and taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction under the laws of which such Lender Party or such Agent, as the case may be, is organized or any political subdivision thereof and, in the case of each Lender Party, taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction of such Lender Party’s Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or under the Notes being hereinafter referred to as “Taxes”).  If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any Note to any Lender Party or any Agent, (i) the sum payable by the Borrower shall be increased as may be necessary so that after the Borrower and the Paying Agent have made all required deductions (including deductions applicable to additional sums payable under this Section 2.12) such Lender Party or such Agent, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make all such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

 

(b)           In addition, the Borrower shall pay any present or future stamp, documentary, excise, property or similar taxes, charges or levies that arise from any payment 

 

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made hereunder or under any Notes or from the execution, delivery or registration of, performance under, or otherwise with respect to, this Agreement, any Notes or any other Loan Documents or the transfer of any Notes (hereinafter referred to as “Other Taxes”).

 

(c)           The Borrower shall indemnify each Lender Party and each Agent for and hold them harmless against the full amount of Taxes and Other Taxes, and for the full amount of taxes of any kind imposed or assessed by any jurisdiction on amounts payable under this Section 2.12, imposed on or paid by such Lender Party or such Agent (as the case may be) and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto.  This indemnification shall be made within 30 days from the date such Lender Party or such Agent (as the case may be) makes written demand therefor.

 

(d)           Within 30 days after the date of any payment of Taxes, the Borrower shall furnish to the Paying Agent, at its address referred to in Section 8.02, the original or a certified copy of a receipt evidencing such payment, to the extent such a receipt is issued therefor, or other written proof of payment thereof that is reasonably satisfactory to the Paying Agent.  In the case of any payment hereunder or under the Notes by or on behalf of the Borrower through an account or branch outside the United States or by or on behalf of the Borrower by a payor that is not a United States person, if the Borrower determines that no Taxes are payable in respect thereof, the Borrower shall furnish, or shall cause such payor to furnish, to the Paying Agent, at such address, an opinion of counsel acceptable to the Paying Agent stating that such payment is exempt from Taxes.  For purposes of subsections (d) and (e) of this Section 2.12, the terms “United States” and “United States person” shall have the meanings specified in Section 7701 of the Internal Revenue Code.

 

(e)           Each Lender Party organized under the laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Lender Party and on the date of the Assignment and Acceptance pursuant to which it becomes a Lender Party in the case of each other Lender Party, and from time to time thereafter as reasonably requested in writing by the Borrower (but only so long thereafter as such Lender Party remains lawfully able to do so), provide each of the Paying Agent and the Borrower with two original Internal Revenue Service Forms W-8ECI (or successor forms), as appropriate, or in the case of a Lender Party that is claiming a reduced rate of United States withholding tax because of a tax treaty or that has certified in writing to the Paying Agent that it is not (i) a “bank” as defined in Section 881(c)(3)(A) of the Internal Revenue Code, (ii) a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower or (iii) a controlled foreign corporation related to the Borrower (within the meaning of Section 864(d)(4) of the Internal Revenue Code), Internal Revenue Service Form W-8BEN or any successor or other form prescribed by the Internal Revenue Service, certifying that such Lender Party is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement or any Notes or, in the case of a Lender Party that has certified that it is not a “bank” as described above, certifying that such Lender Party is a foreign corporation, partnership, estate or trust.  If the forms provided by a Lender Party at the time such Lender Party first becomes a party to this Agreement indicate a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Lender Party provides the appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered 

 

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excluded from Taxes for periods governed by such forms; provided,  however, that if, at the effective date of the Assignment and Assumption pursuant to which a Lender Party becomes a party to this Agreement, the Lender Party assignor was entitled to payments under subsection (a) of this Section 2.12 in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the Lender Party assignee on such date.  If any form or document referred to in this subsection (e) requires the disclosure of information, other than information necessary to compute the tax payable and information required on the date hereof by Internal Revenue Service Forms W-8BEN or W-8ECI or the related certificate described above, that the applicable Lender Party reasonably considers to be confidential, such Lender Party shall give notice thereof to the Borrower and shall not be obligated to include in such form or document such confidential information.

 

(f)            For any period with respect to which a Lender Party has failed to provide the Borrower with the appropriate form, certificate or other document described in subsection (e) above (other than if such failure is due to a Change in Law occurring after the date on which a form, certificate or other document originally was required to be provided or if such form, certificate or other document otherwise is not required under subsection (e) above), such Lender Party shall not be entitled to indemnification under subsection (a) or (c) of this Section 2.12 with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should a Lender Party become subject to Taxes because of its failure to deliver a form, certificate or other document required hereunder, the Borrower shall take such steps as such Lender Party shall reasonably request to assist such Lender Party to recover such Taxes.

 

(g)           Any Lender Party claiming any additional amounts payable pursuant to this Section 2.12 agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Applicable Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Lender Party, be otherwise disadvantageous to such Lender Party.  Nothing in this Section 2.12 or otherwise in this Agreement shall require any Lender Party to disclose to the Borrower any of its tax returns (or any other information that it deems to be confidential or proprietary).

 

(h)           Without prejudice to the survival of any other agreement contained herein, the agreements and obligations contained in this Section 2.12 shall survive the payment in full of the principal of and interest on all Notes and Advances made hereunder.

 

Section 2.13.          Sharing of Payments, Etc.  If any Lender Party shall obtain at any time any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise, other than as a result of an assignment pursuant to Section 8.07) (a) on account of Obligations due and payable to such Lender Party hereunder and under the Notes at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender Party at such time to (ii) the aggregate amount of the Obligations due and payable to all Lender Parties hereunder and under the Notes at such time) of payments on account of the Obligations due and payable to all Lender Parties hereunder and under the Notes at such time obtained by all the Lender Parties at such time or (b) on account of Obligations 

 

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owing (but not due and payable) to such Lender Party hereunder and under the Notes at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing to such Lender Party at such time to (ii) the aggregate amount of the Obligations owing (but not due and payable) to all Lender Parties hereunder and under the Notes at such time) of payments on account of the Obligations owing (but not due and payable) to all Lender Parties hereunder and under the Notes at such time obtained by all of the Lender Parties at such time, such Lender Party shall forthwith purchase from the other Lender Parties such interests or participating interests in the Obligations due and payable or owing to them, as the case may be, as shall be necessary to cause such purchasing Lender Party to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender Party, such purchase from each other Lender Party shall be rescinded and such other Lender Party shall repay to the purchasing Lender Party the purchase price to the extent of such Lender Party’s ratable share (according to the proportion of (i) the purchase price paid to such Lender Party to (ii) the aggregate purchase price paid to all Lender Parties) of such recovery together with an amount equal to such Lender Party’s ratable share (according to the proportion of (i) the amount of such other Lender Party’s required repayment to (ii) the total amount so recovered from the purchasing Lender Party) of any interest or other amount paid or payable by the purchasing Lender Party in respect of the total amount so recovered; provided further that, so long as the Obligations under the Loan Documents shall not have been accelerated, any excess payment received by any Appropriate Lender shall be shared on a pro rata basis only with other Appropriate Lenders.  The Borrower agrees that any Lender Party so purchasing an interest or participating interest from another Lender Party pursuant to this Section 2.13 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such interest or participating interest, as the case may be, as fully as if such Lender Party were the direct creditor of the Borrower in the amount of such interest or participating interest, as the case may be.

 

Section 2.14.          Use of Proceeds.  The proceeds of the Advances and issuances of Letters of Credit shall be available (and the Borrower agrees that it shall use such proceeds and Letters of Credit), (a) for the Refinancing and to pay transaction fees and expenses incurred in connection therewith and (b) to provide working capital for the Loan Parties and for other general corporate purposes, including, without limitation, for purposes of making capital expenditures, share repurchases permitted under Section 5.02(g) and acquisitions and other Investments permitted under Section 5.02(f).

 

Section 2.15.          Defaulting Lenders.

 

(a)           Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

 

(i)            Waivers and Amendments.  That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in Section 8.01.

 

(ii)           Reallocation of Payments.  Any payment of principal, interest, fees or other amounts received by the Paying Agent for the account of that Defaulting Lender (whether

 

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voluntary or mandatory, at maturity, pursuant to Article VI or otherwise, and including any amounts made available to the Paying Agent by that Defaulting Lender pursuant to Section 8.05), shall be applied at such time or times as may be determined by the Paying Agent as follows: first, to the payment of any amounts owing by that Defaulting Lender to the Paying Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to an Issuing Bank or Swing Line Lender hereunder; third, if so determined by the Paying Agent or requested by an Issuing Bank or Swing Line Lender, to be held as cash collateral for future funding obligations of that Defaulting Lender of any participation in any Swing Line Advance or Letter of Credit; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Advance in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Paying Agent; fifth, if so determined by the Paying Agent and the Borrower, to be held in a non-interest bearing deposit account and released in order to satisfy obligations of that Defaulting Lender to fund Advances under this Agreement; sixth, to the payment of any amounts owing to the Lenders, any Issuing Bank or Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, any Issuing Bank or Swing Line Lender against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Advances or Letter of Credit Advances in respect of which that Defaulting Lender has not fully funded its appropriate share and (y) such Advances or Letter of Credit Advances were made at a time when the conditions set forth in Section 3.02 were satisfied or waived, such payment shall be applied solely to pay the Advances of, and Letter of Credit Advances owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Advances of, or Letter of Credit Advances owed to, that Defaulting Lender.  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section 2.15(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

 

(iii)          Reallocation of Pro Rata Shares to Reduce Fronting Exposure.  During any period in which there is a Defaulting Lender, for purposes of computing the amount of the obligation of each non-Defaulting Lender to acquire, refinance or fund purchases in Letters of Credit Advances or Swing Line Advances pursuant to Sections 2.02(b) and 2.03(c), the “Pro Rata Share” of each non-Defaulting Lender shall be computed without giving effect to the Commitment of that Defaulting Lender; provided, that, (i) each such reallocation shall be given effect only if, (x) at the date the applicable Lender becomes a Defaulting Lender and (y) at the date of such reallocation, no Default or Event of Default exists; and (ii) the aggregate obligation of each non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit Advances and Swing Line Advances shall not exceed the positive difference, if any, of (1) the Commitment of that non-Defaulting Lender minus (2) the aggregate outstanding amount of the Advances of that Lender.

 

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(b)                                 Defaulting Lender Cure.  If the Borrower, the Paying Agent, Swing Line Lender and each Issuing Bank agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Paying Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Advances of the other Lenders or take such other actions as the Paying Agent may determine to be necessary to cause the Advances and funded and unfunded participations in Letters of Credit Advances and Swing Line Advances to be held on a pro rata basis by the Lenders in accordance with their Pro Rata Shares (without giving effect to Section 2.15(a)(iii)), whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

Section 2.16.                             Evidence of Debt.  (a)  Each Lender Party shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Advance owing to such Lender Party from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.  The Borrower agrees that upon notice by any Lender Party to the Borrower (with a copy of such notice to the Paying Agent) to the effect that a promissory note or other evidence of indebtedness is required or appropriate in order for such Lender Party to evidence (whether for purposes of pledge, enforcement or otherwise) the Advances owing to, or to be made by, such Lender Party, the Borrower shall promptly execute and deliver to such Lender Party, with a copy to the Paying Agent, a Revolving Credit Note substantially in the form of Exhibit A hereto, payable to the order of such Lender Party in a principal amount equal to the Revolving Credit Commitment of such Lender Party.  All references to Notes in the Loan Documents shall mean Notes, if any, to the extent issued hereunder.

 

(b)                                 The Register maintained by the Paying Agent pursuant to Section 8.07(d) shall include an account for each Lender Party, in which account shall be recorded (i) the date and amount of each Borrowing made hereunder, the Type of Advances comprising such Borrowing and, if appropriate, the Interest Period applicable thereto, (ii) the terms of each Assignment and Assumption delivered to and accepted by it, (iii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender Party hereunder, and (iv) the amount of any sum received by the Paying Agent from the Borrower hereunder and each Lender Party’s share thereof.

 

(c)                                  Entries made in good faith by the Paying Agent in the Register pursuant to subsection (b) above, and by each Lender Party in its account or accounts pursuant to subsection (a) above, shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from the Borrower to, in the case of the Register, each Lender Party and, in the case of such account or accounts, such Lender Party, under this Agreement, absent manifest error; provided, however, that the failure of the Paying Agent or such Lender Party to make an entry, or any finding that an entry is incorrect, in the Register or

 

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such account or accounts shall not limit or otherwise affect the obligations of the Borrower under this Agreement.

 

Section 2.17.                             Increases in Revolving Credit Facility.

 

(a)                                  Request for Increase.  Provided (i) there exists no Default, (ii) after giving effect thereto, the Borrower shall be in pro forma compliance with the covenants contained in Section 5.04, (iii) the Borrowing Base exceeds the Borrowing Base Obligations at such time and (iv) the incurrence of such Debt and the Liens securing such Debt shall be permitted under the Related Documents and all other documents evidencing Debt incurred pursuant to Section 5.02(b)(i)(C), upon written notice to the Paying Agent, the Borrower may, from time to time, request (x) an increase in the Revolving Credit Facility (each an “Incremental Revolving Credit Facility”) or (y) the addition of one or more new term loan facilities (each an “Incremental Term Facility” and, together with any Incremental Revolving Credit Facility, an “Incremental Facility”); provided, that in no event shall the aggregate principal amount of all Incremental Facilities incurred after the Effective Date exceed $400,000,000; provided  further  that any such request for an Incremental Facility shall be in a minimum amount of $25,000,000.  If the Borrower elects to request that existing Revolving Credit Lenders participate in an Incremental Facility, then at the time of sending such notice, the Borrower shall request that the Paying Agent promptly notify the Revolving Credit Lenders of such request and (in consultation with the Paying Agent) shall specify the time period within which each Revolving Credit Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Revolving Credit Lenders).

 

(b)                                 Lender Elections to Increase.  If requested by the Borrower to participate in an Incremental Facility, each Lender shall notify the Paying Agent within such time period as set forth in the notice referred to in clause (a) whether or not it agrees to participate in the Incremental Facility and, if so, by what principal amount.  Any Lender not responding within such time period shall be deemed to have declined to participate in the applicable Incremental Facility.  The Paying Agent shall notify the Borrower and each Lender of the Lenders’ responses to each request made hereunder.

 

(c)                                  Additional Lenders.  Subject to the approval of the Administrative Agent and the Joint Lead Arrangers and, in the case of any Incremental Revolving Credit Facility, the Issuing Bank and the Swing Line Lender (which approvals shall not be unreasonably withheld), the Borrower may, in lieu of or in addition to requesting that existing Lenders provide such increase, invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance satisfactory to the Joint Lead Arrangers and their counsel.

 

(d)                                 Terms and Conditions of Incremental Facilities.  Each Incremental Revolving Credit Facility shall be on terms applicable to the existing Revolving Credit Facility.  Each Incremental Term Facility shall be a new term loan facility in which case (A) the maturity date of any such Incremental Term Facility shall be no earlier than the maturity date of the Facility and (B) all other provisions of the Incremental Term Facility shall be on terms and pursuant to documentation reasonably satisfactory to the Joint Lead Arrangers (including, without limitation, with respect to mandatory prepayments, covenants, interest rates and the amortization schedule).  In connection with any Incremental Facility this Agreement may be

 

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amended in a writing executed and delivered by the Borrower and the Joint Lead Arrangers to reflect any technical changes necessary to give effect to such increase in accordance with its terms as set forth herein and to reflect such increase as a facility hereunder, which may include the addition of an Incremental Term Facility as a new term facility and the inclusion of any such new term facility in calculations of amounts outstanding under this Agreement and in the provisions relating to prepayments set forth in Section 2.06 and to amendments and waivers set forth in Section 8.01.

 

(e)                                  Effective Date and Allocations.  After satisfaction of the conditions set forth in this Section 2.17 with respect to the applicable Incremental Facility, the Paying Agent and the Borrower shall determine the effective date (the “Incremental Facility Effective Date”) and the final allocation of such Incremental Facility.  The Paying Agent shall promptly notify the Borrower and the Appropriate Lenders (including Eligible Assignees that become Lenders in accordance with clause (c) above) of the final allocation of such Incremental Facility and the Incremental Facility Effective Date.

 

(f)                                    Conditions to Effectiveness of Increase.  As a condition precedent to such Incremental Facility, the Borrower shall deliver to the Paying Agent a certificate of each Loan Party dated as of the Incremental Facility Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to the Incremental Facility, and (ii) in the case of the Borrower, certifying that, before and after giving effect to the Incremental Facility, and the drawings thereunder on the relevant Incremental Facility Effective Date, (A) the representations and warranties contained in Article IV and the other Loan Documents are true and correct on and as of the Incremental Facility Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Section 2.17, the representations and warranties contained in subsections (g) and (h) of Section 4.01 shall be deemed to refer to the most recent statements furnished pursuant to subsections (b) and (c), respectively, of Section 5.03, (B) no Default exists, (C) the Borrowing Base exceeds the Borrowing Base Obligations at such time, (D) the Borrower is in pro forma compliance with the covenants in Section 5.04 and (E) the incurrence of such Debt and the Liens securing such Debt is permitted under the Related Documents and all other documents evidencing Debt incurred pursuant to Section 5.02(b)(i)(C) (including, in the case of an Incremental Term Facility, after giving pro forma effect to a full drawing of such Incremental Term Facility) (together with calculations in detail reasonably satisfactory to the Joint Lead Arrangers).  In the case of an Incremental Revolving Credit Facility, the Borrower shall prepay any Revolving Credit Advances outstanding on the Incremental Facility Effective Date (and pay any additional amounts required pursuant to Section 8.04(c)) to the extent necessary to keep the outstanding Revolving Credit Advances ratable with any revised Pro Rata Shares arising from any nonratable increase in the Revolving Credit Commitments under this Section.

 

(g)                                 Conflicting Provisions.  This Section shall supersede any provisions in Sections 2.13 or 8.01 to the contrary.

 

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ARTICLE III

 

CONDITIONS OF EFFECTIVENESS, LENDING AND
 ISSUANCES OF LETTERS OF CREDIT

 

Section 3.01.                             Conditions Precedent to Initial Extension of Credit.  The effectiveness of this Amended and Restated Credit Agreement, and the obligation of each Lender to make an Advance or of any Issuing Bank to issue a Letter of Credit on the occasion of the Initial Extension of Credit hereunder is subject to the satisfaction of the following conditions precedent before or concurrently with such effectiveness or Initial Extension of Credit:

 

(a)                                  The Administrative Agent shall have received on or before the Effective Date the following, each dated such day (unless otherwise specified), in form and substance satisfactory to the Joint Lead Arrangers and the Administrative Agent (unless otherwise specified) and (except for the Notes) in sufficient copies for each Lender Party:

 

(i)                                     The Notes payable to the order of the Lenders to the extent requested pursuant to Section 2.16.

 

(ii)                                  A security agreement in substantially the form of Exhibit D hereto (together with each other security agreement and security agreement supplement delivered pursuant to Section 5.01(j), in each case as amended, supplemented or otherwise modified from time to time, the “Security Agreement”), duly executed by each Loan Party, together with:

 

(A)           certificates representing the Pledged Shares referred to therein accompanied by undated stock powers executed in blank and instruments evidencing the Pledged Debt indorsed in blank,

 

(B)             acknowledgment copies of proper financing statements, duly filed on or before the day of the Initial Extension of Credit under the Uniform Commercial Code of all jurisdictions that the Joint Lead Arrangers may deem necessary or desirable in order to perfect and protect the first priority liens and security interests created under the Security Agreement, covering the Collateral described in the Security Agreement,

 

(C)             completed requests for information, dated on or before the date of the Initial Extension of Credit, listing the financing statements referred to in clause (B) above and all other effective financing statements filed in all jurisdictions that the Joint Lead Arrangers may deem necessary or desirable that name any Loan Party as debtor, together with copies of such other financing statements,

 

(D)            evidence of the completion of all other recordings and filings of or with respect to the Security Agreement that the Joint Lead Arrangers may deem necessary or desirable in order to perfect and protect the Liens created thereby,

 

(E)              evidence of the insurance required by the terms of the Security Agreement naming the Collateral Agent, on behalf of the Lender Parties, as additional insured and loss payee with such responsible and reputable insurance

 

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companies or associations, and in such amounts and covering such risks, as is satisfactory to the Administrative Agents and the Joint Lead Arrangers, and

 

(F)              evidence that all other action that the Joint Lead Arrangers may deem necessary or desirable in order to perfect and protect the first priority liens and security interests created under the Security Agreement has been taken (including, without limitation, receipt of duly executed payoff letters, UCC-3 termination statements and landlords’ and bailees’ waiver and consent agreements).

 

(iii)                               A guaranty in substantially the form of Exhibit E hereto (together with each other guaranty and guaranty supplement delivered pursuant to Section 5.01(j), in each case as amended, supplemented or otherwise modified from time to time, the “Subsidiary Guaranty”), duly executed by each Subsidiary Guarantor.

 

(iv)                              Certified copies of the resolutions of the board of directors or of the members or managers of each Loan Party approving the Transaction and each Loan Document to which it is or is to be a party, and of all documents evidencing other necessary corporate action and governmental and other third party approvals and consents, if any, with respect to the Transaction and each Loan Document to which it is or is to be a party.

 

(v)                                 A copy of a certificate of the Secretary of State of the jurisdiction of incorporation or organization of each Loan Party, dated reasonably near the Effective Date, certifying (A) as to a true and correct copy of the charter, articles of incorporation or articles of organization, as the case may be (“Organizational Documents”) of such Loan Party and each amendment thereto on file in such Secretary’s office and (B) that (1) such amendments are the only amendments to such Loan Party’s Organizational Documents on file in such Secretary’s office, (2) if applicable, such Loan Party has paid all franchise taxes to the date of such certificate and (C) such Loan Party is duly incorporated or organized and in good standing or presently subsisting under the laws of the State of the jurisdiction of its incorporation or organization.

 

(vi)                              A copy of a certificate of the Secretary of State of each jurisdiction reasonably requested by the Joint Lead Arrangers, dated reasonably near the Effective Date, stating that a Loan Party is duly qualified and in good standing as a foreign entity in such State and has filed all annual reports required to be filed to the date of such certificate.

 

(vii)                           A certificate of each Loan Party, signed on behalf of such Loan Party by a Responsible Officer, dated the date of the Effective Date (the statements made in which certificate shall be true on and as of the date of the Initial Extension of Credit), certifying as to (A) the absence of any amendments to the Organizational Documents of such Loan Party since the date of the Secretary of State’s certificate referred to in Section 3.01(a)(v), (B) a true and correct copy of the bylaws or operating agreement, as applicable, of such Loan Party as in effect on the date on which the resolutions referred to in Section 3.01(a)(iv) were adopted and on the date of the Effective Date, (C) the due incorporation/organization and good standing or valid existence of such Loan Party as a

 

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corporation or limited liability company organized under the laws of the jurisdiction of its incorporation or organization, and the absence of any proceeding for the dissolution or liquidation of such Loan Party, (D) the truth of the representations and warranties contained in the Loan Documents as though made on and as of the date of the Initial Extension of Credit and (E) the absence of any event occurring and continuing, or resulting from the Initial Extension of Credit, that constitutes a Default.

 

(viii)                        A certificate of a Responsible Officer of each Loan Party certifying the names and true signatures of the officers of such Loan Party authorized to sign each Loan Document to which it is or is to be a party and the other documents to be delivered hereunder and thereunder.

 

(ix)                                Certified copies of each of the Related Documents, duly executed by the parties thereto and in form and substance satisfactory to the Lender Parties, together with all agreements, instruments and other documents delivered in connection therewith as the Administrative Agent or the Joint Lead Arrangers shall request.

 

(x)                                   Certificates, in substantially the form of Exhibit F, attesting to the Solvency of each Loan Party individually and together with its Subsidiaries, taken as a whole, before and after giving effect to the Transaction, from its Chief Financial Officer, if any, or other Responsible Officer if none.

 

(xi)                                Audited annual financial statements dated December 31, 2010, interim financial statements dated the end of the most recent fiscal quarter for which financial statements are available, pro forma consolidated financial statements as to the Borrower and its Subsidiaries and forecasts prepared by management of the Borrower, in form and substance satisfactory to the Administrative Agent and the Joint Lead Arrangers, of balance sheets, income statements and cash flow statements on an annual basis for each year following the Effective Date until the Termination Date.

 

(xii)                             A Notice of Borrowing or Notice of Issuance, as applicable, relating to the Initial Extension of Credit.

 

(xiii)                          Favorable opinions of Barrett & McNagny, LLP and Greenberg Traurig LLP counsel for the Loan Parties, in substantially the forms of respectively Exhibits G-1 and G-2 hereto and as to such other matters as the Administrative Agent or the Joint Lead Arrangers may reasonably request.

 

(xiv)                         Evidence satisfactory to the Administrative Agent and the Joint Lead Arrangers that a nationally recognized Process Agent shall have been appointed as Process Agent under Section 8.12 hereof.

 

(b)                                 The Administrative Agent and the Joint Lead Arrangers shall be satisfied with the corporate and legal structure and capitalization of each Loan Party and each of its Subsidiaries the Equity Interests in which Subsidiaries are being pledged pursuant to the Loan Documents, including the terms and conditions of the charter, bylaws and each class of Equity Interest in each Loan Party and each such Subsidiary and of each agreement or instrument relating to such structure or capitalization.

 

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(c)                                  All Equity Interests of the Guarantors shall be owned by the Borrower or one or more of the Borrower’s Subsidiaries, in each case free and clear of any Lien other than Liens created under the Loan Documents.

 

(d)                                 The Administrative Agent and the Joint Lead Arrangers shall be satisfied that all Existing Debt, other than Surviving Debt, has been prepaid, redeemed or defeased in full or otherwise satisfied and extinguished and that all Surviving Debt shall be on terms and conditions satisfactory to the Administrative Agent and the Joint Lead Arrangers.

 

(e)                                  Before giving effect to the Transaction, there shall have occurred no Material Adverse Change since December 31, 2010.

 

(f)                                    There shall exist no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of its Subsidiaries pending or threatened before any court, governmental agency or arbitrator that (i) could reasonably be expected to have a Material Adverse Effect other than the matters described on Schedule 4.01(f) hereto (the “Disclosed Litigation”) or (ii) purports to affect the legality, validity or enforceability of any Transaction Document or the consummation of the Transaction, and there shall have been no adverse change in the status, or financial effect on, any Loan Party or any of its Subsidiaries, of the Disclosed Litigation from that described on Schedule 4.01(f) hereto.

 

(g)                                 All governmental and third party consents and approvals necessary in connection with the Transaction shall have been obtained (without the imposition of any conditions that are not acceptable to the Joint Lead Arrangers and the Administrative Agent) and shall remain in effect; and no law or regulation shall be applicable in the judgment of the Joint Lead Arrangers and the Administrative Agent, in each case that restrains, prevents or imposes materially adverse conditions upon the Transaction.

 

(h)                                 The Borrower shall have paid all accrued fees of the Joint Lead Arrangers, the Agents and the Lender Parties and all accrued expenses of the Joint Lead Arrangers (including the accrued fees and expenses of counsel to the Joint Lead Arrangers and local counsel to the Lender Parties).

 

(i)                                     The Refinancing shall have been consummated or shall be consummated or concurrently consummated with the Effective Date, all advances and other amounts owing under the Existing Credit Agreement shall have been repaid in full, the commitments thereunder shall have terminated and the letters of credit issued thereunder shall have been canceled or the reimbursement of draws thereunder provided for in a manner acceptable to the Paying Agent (it being understood that treating such letters of credit as Existing Letters of Credit hereunder is acceptable to the Paying Agent), and all Liens and guaranties supporting any Debt under the Existing Credit Agreement shall have been fully released and terminated.

 

(j)                                     The Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.

 

Section 3.02.                             Conditions Precedent to Each Borrowing and Issuance and Renewal.  The obligation of each Appropriate Lender to make an Advance (other than a Letter of

 

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Credit Advance made by an Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(c) and a Swing Line Advance made by a Revolving Credit Lender pursuant to Section 2.02(b)) on the occasion of each Borrowing (including the initial Borrowing), and the obligation of an Issuing Bank to issue a Letter of Credit (including the initial issuance) or renew a Letter of Credit and the right of the Borrower to request a Swing Line Borrowing, shall be subject to the further conditions precedent that on the date of such Borrowing or issuance or renewal (a) the following statements shall be true (and each of the giving of the applicable Notice of Borrowing, Notice of Swing Line Borrowing, Notice of Issuance or Notice of Renewal and the acceptance by the Borrower of the proceeds of such Borrowing or of such Letter of Credit or the renewal of such Letter of Credit shall constitute a representation and warranty by the Borrower that both on the date of such notice and on the date of such Borrowing or issuance or renewal such statements are true):

 

(i)                                     the representations and warranties contained in each Loan Document are true and correct in all material respects on and as of such date, before and after giving effect to such Borrowing or issuance or renewal and to the application of the proceeds therefrom, as though made on and as of such date, other than any such representations or warranties that, by their terms, refer to a specific date other than the date of such Borrowing or issuance or renewal, in which case as of such specific date;

 

(ii)                                  no Default has occurred and is continuing, or would result from such Borrowing or issuance or renewal or from the application of the proceeds therefrom; and

 

(iii)                               after giving effect to such Borrowing or issuance or renewal, the Borrowing Base Obligations at such time will not exceed the Borrowing Base at such time;

 

(iv)                              after giving pro forma effect to such Borrowing, the Borrower is in compliance with the covenants (including restrictions on liens and debt) set forth in each of the Related Documents and all other documents evidencing Debt incurred pursuant to Section 5.02(b)(i)(C);

 

(b)                                 in the case of a Borrowing to be denominated in an Alternative Currency, there shall not have occurred any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which in the reasonable opinion of the Paying Agent, the Required Lenders (in the case of any Advances to be denominated in an Alternative Currency) or the Issuing Bank (in the case of any Letter of Credit to be denominated in an Alternative Currency) would make it impracticable for such Borrowing to be denominated in the relevant Alternative Currency; and

 

(c)                                  the Administrative Agent shall have received such other approvals, opinions or documents as the Administrative Agent or the Joint Lead Arrangers may reasonably request.

 

Section 3.03.                             Determinations Under Section 3.01.  For purposes of determining compliance with the conditions specified in Section 3.01, each Lender Party shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender

 

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Parties unless an officer of the Paying Agent responsible for the transactions contemplated by the Loan Documents shall have received notice from such Lender Party prior to the Effective Date specifying its objection thereto and, if the Initial Extension of Credit shall be made on the Effective Date and consists of a Borrowing, such Lender Party shall not have made available to the Paying Agent such Lender Party’s ratable portion of such Borrowing.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

Section 4.01.                             Representations and Warranties of the Borrower.  The Borrower represents and warrants as follows:

 

(a)                                  Each Loan Party and each of its Subsidiaries (i) is a corporation or a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation, (ii) is duly qualified and in good standing as a foreign corporation or limited liability company in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed except where the failure to so qualify or be licensed would not be reasonably likely to have a Material Adverse Effect and (iii) has all requisite entity power and authority (including, without limitation, all governmental licenses, permits and other approvals) to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted.  Set forth on Schedule 4.01(a) hereto is a complete and accurate list of all Loan Parties, showing as of the date hereof (as to each Loan Party) the jurisdiction of its formation, the address of its principal place of business and its U.S. taxpayer identification number or, in the case of any non-U.S. Loan Party that does not have a U.S. taxpayer identification number, its unique identification number issued to it by the jurisdiction of its formation.  The copy of the charter of each Loan Party and each amendment thereto provided pursuant to Section 3.01(a)(vii) is a true and correct copy of each such document, each of which is valid and in full force and effect.

 

(b)                                 Set forth on Schedule 4.01(b) hereto is a complete and accurate list of all Subsidiaries of each Loan Party, showing as of the date hereof (as to each such Subsidiary) the jurisdiction of its incorporation, the number of shares of each class of its Equity Interests authorized, and the number outstanding, on the date hereof and the percentage of each such class of its Equity Interests owned (directly or indirectly) by such Loan Party and the number of shares covered by all outstanding options, warrants, rights of conversion or purchase and similar rights at the date hereof.  All of the outstanding Equity Interests in each Loan Party’s Subsidiaries has been validly issued, are fully paid and non-assessable and are owned by such Loan Party or one or more of its Subsidiaries free and clear of all Liens, except those created under the Collateral Documents.

 

(c)                                  The execution, delivery and performance by each Loan Party of each Transaction Document to which it is or is to be a party, and the consummation of the Transaction, are within such Loan Party’s corporate powers, have been duly authorized by all necessary corporate action, and do not (i) contravene such Loan Party’s charter or bylaws, (ii) violate any law, rule, regulation (including, without limitation, Regulation X

 

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of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of, or constitute a default or require any payment to be made under, any contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting any Loan Party, any of its Subsidiaries or any of their properties or (iv) except for the Liens created under the Loan Documents, result in or require the creation or imposition of any Lien upon or with respect to any of the properties of any Loan Party or any of its Subsidiaries.  No Loan Party or any of its Subsidiaries is in violation of any such law, rule, regulation, order, writ, judgment, injunction, decree, determination or award or in breach of any such contract, loan agreement, indenture, mortgage, deed of trust, lease or other instrument, the violation or breach of which could be reasonably likely to have a Material Adverse Effect.

 

(d)                                 No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for (i) the due execution, delivery, recordation, filing or performance by any Loan Party of any Transaction Document to which it is or is to be a party, or for the consummation of the Transaction, (ii) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, (iii) the perfection or maintenance of the Liens created under the Collateral Documents (including the first priority nature thereof) or (iv) the exercise by any Agent or any Lender Party of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, except for the authorizations, approvals, actions, notices and filings listed on Schedule 4.01(d) hereto, all of which have been duly obtained, taken, given or made and are in full force and effect.  All applicable waiting periods in connection with the Transaction have expired without any action having been taken by any competent authority restraining, preventing or imposing materially adverse conditions upon the Transaction or the rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise dispose of, or to create any Lien on, any properties now owned or hereafter acquired by any of them.

 

(e)                                  This Agreement has been, and each other Transaction Document when delivered hereunder will have been, duly executed and delivered by each Loan Party party thereto.  This Agreement is, and each other Transaction Document when delivered hereunder will be, the legal, valid and binding obligation of each Loan Party party thereto, enforceable against such Loan Party party in accordance with its terms.

 

(f)                                    There is no action, suit, investigation, litigation or proceeding affecting any Loan Party or any of its Subsidiaries, including any Environmental Action, pending or threatened before any court, governmental agency or arbitrator that (i) could be reasonably likely to have a Material Adverse Effect (other than the Disclosed Litigation) or (ii) purports to affect the legality, validity or enforceability of any Transaction Document or the consummation of the Transaction, and there has been no material adverse change in the status, or financial effect on any Loan Party or any of its Subsidiaries, of the Disclosed Litigation from that described on Schedule 4.01(f) hereto.

 

(g)                                 The Consolidated balance sheet of the Borrower and its Subsidiaries as at December 31, 2010, and the related Consolidated statement of income and Consolidated

 

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statement of cash flows of the Borrower and its Subsidiaries for the fiscal year then ended, accompanied by an unqualified opinion of Ernst & Young LLP, independent public accountants, and the Consolidated balance sheet of the Borrower and its Subsidiaries as at June 30, 2011, and the related Consolidated statements of income and Consolidated statement of cash flows of the Borrower and its Subsidiaries for the six months then ended, duly certified by the Chief Financial Officer of the Borrower, copies of which have been furnished to each Lender Party, fairly present, subject, in the case of said balance sheet as at June 30, 2011, and said statements of income and cash flows for the three months then ended, to year-end audit adjustments, the Consolidated financial condition of the Borrower and its Subsidiaries as at such dates and the Consolidated results of operations of the Borrower and its Subsidiaries for the periods ended on such dates, all in accordance with generally accepted accounting principles applied on a consistent basis, and since December 31, 2010, there has been no Material Adverse Change and no event has occurred or condition arisen that could reasonably be expected to have a Material Adverse Effect.  Each reconciliation for the Borrower on a stand-alone basis with respect to each of the financial statements referred to above as at each such date for each such period, duly certified by the Chief Financial Officer of the Borrower, a copy of which has been furnished to each Lender Party, fairly present the financial condition and results of operations of the Borrower on a stand-alone basis as at each such date.

 

(h)                                 The Consolidated forecasted balance sheet, statement of income and statement of cash flows of the Borrower and its Subsidiaries delivered to the Lender Parties pursuant to Section 3.01(a)(xi) or Section 5.03 were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of delivery, the Borrower’s best estimate of its future financial performance.

 

(i)                                     Neither the Information Memorandum nor any other information, exhibit or report furnished by or on behalf of any Loan Party to any Agent or any Lender Party in connection with the negotiation and syndication of the Loan Documents or pursuant to the terms of the Loan Documents contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements made therein not misleading.

 

(j)                                     The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock, and no proceeds of any Advance or drawings under any Letter of Credit will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock.

 

(k)                                  Neither any Loan Party nor any of its Subsidiaries is an “investment company”, or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company”, as such terms are defined in the Investment Company Act of 1940, as amended.  Neither any Loan Party nor any of its Subsidiaries is a “holding company”, or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company” or of a “subsidiary company” of a “holding company”, as such terms are defined in the Public Utility Holding Company Act of 1935, as amended.  Neither the

 

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making of any Advances, nor the issuance of any Letters of Credit, nor the application of the proceeds or repayment thereof by the Borrower, nor the consummation of the other transactions contemplated by the Transaction Documents, will violate any provision of any such Act or any rule, regulation or order of the Securities and Exchange Commission thereunder.

 

(l)                                     Neither any Loan Party nor any of its Subsidiaries is a party to any indenture, loan or credit agreement or any lease or other agreement or instrument or subject to any charter or corporate restriction that could be reasonably likely to have a Material Adverse Effect.

 

(m)                               All filings and other actions necessary or desirable to perfect and protect the security interest in the Collateral created under the Collateral Documents have been duly made or taken and are in full force and effect, and the Collateral Documents create in favor of the Collateral Agent for the benefit of the Secured Parties a valid and, together with such filings and other actions, perfected first priority security interest in the Collateral, securing the payment of the Secured Obligations, and all filings and other actions necessary or desirable to perfect and protect such security interest have been duly taken.  The Loan Parties are the legal and beneficial owners of the Collateral free and clear of any Lien, except for the liens and security interests created or permitted under the Loan Documents.

 

(n)                                 Each Loan Party is, individually and together with its Subsidiaries, Solvent.

 

(o)                                 Set forth on Schedule 4.01(o) hereto is a complete and accurate list of all Plans, Multiemployer Plans and Welfare Plans.

 

(i)                                     No ERISA Event has occurred or is reasonably expected to occur with respect to any Plan that has resulted in or is reasonably expected to result in a material liability of any Loan Party or any ERISA Affiliate.

 

(ii)                                  Schedule B (Actuarial Information) to the most recent annual report (Form 5500 Series) for each Plan, copies of which have been filed with the Internal Revenue Service and furnished to the Lender Parties, is complete and accurate and fairly presents the funding status of such Plan, and since the date of such Schedule B there has been no material adverse change in such funding status.

 

(iii)                               Neither any Loan Party nor any ERISA Affiliate has incurred or is reasonably expected to incur any Withdrawal Liability to any Multiemployer Plan.

 

(iv)                              Neither any Loan Party nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and no such Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, within the meaning of Title IV of ERISA.

 

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(p)                                 Except for costs and liabilities that could not reasonably be expected to exceed (1) reserves for environmental costs and liabilities such as (x) those appearing on the Consolidated balance sheet of the Borrower and its Subsidiaries from time to time as accrued liabilities or escrowed funds, or (y) those covered by proceeds of applicable insurance policies, letters of credit, bonds or similar risk management instruments, plus (2) $20,000,000, in the aggregate:

 

(i)                                     the operations and properties of each Loan Party and each of its Subsidiaries comply in all material respects with all applicable Environmental Laws and Environmental Permits, all past non-compliance with such Environmental Laws and Environmental Permits has been resolved without ongoing obligations or costs, and no circumstances exist that could be reasonably likely to (A) form the basis of an Environmental Action against any Loan Party or any of its Subsidiaries or any of their properties or (B) cause any such property to be subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Law;

 

(ii)                                  none of the properties currently or formerly owned or operated by any Loan Party or any of its Subsidiaries is listed or proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list or is adjacent to any such property; there are no and never have been any underground or aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently owned or operated by any Loan Party or any of its Subsidiaries or, to the best of its knowledge, on any property formerly owned or operated by any Loan Party or any of its Subsidiaries; there is no asbestos or asbestos-containing material on any property currently owned or operated by any Loan Party or any of its Subsidiaries; and Hazardous Materials have not been released, discharged or disposed of on any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries; and

 

(iii)                               neither any Loan Party nor any of its Subsidiaries is undertaking, and has not completed, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any governmental or regulatory authority or the requirements of any Environmental Law; and all Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries have been disposed of in a manner not reasonably expected to result in material liability to any Loan Party or any of its Subsidiaries.

 

(q)                                 Neither any Loan Party nor any of its Subsidiaries is party to any tax sharing agreement.

 

(i)                                     Each Loan Party and each of its Subsidiaries and Affiliates has filed, has caused to be filed or has been included in all tax returns (Federal, state, local and foreign) required to be filed and has paid all taxes shown thereon to be due, together with applicable interest and penalties.

 

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(ii)                                  Set forth on Part I of Schedule 4.01(q) hereto is a complete and accurate list, as of the date hereof, of each taxable year of each Loan Party and each of its Subsidiaries and Affiliates for which Federal income tax returns have been filed and for which the expiration of the applicable statute of limitations for assessment or collection has not occurred by reason of extension or otherwise (an “Open Year”).

 

(iii)                               There are no pending tax audits or examinations, except as set forth on Part II of Schedule 4.01(q) hereof, and no deficiencies or other claims for unpaid taxes are proposed in writing in respect of taxes (Federal, state, local and foreign) due from, or with respect to, any of the Loan Parties, their Subsidiaries or Affiliates or with respect to any tax return filed by, or in respect of, any of them, except as set forth on Part II of Schedule 4.01(q) hereof.

 

(r)                                    Neither the business nor the properties of any Loan Party or any of its Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) that could be reasonably likely to have a Material Adverse Effect.  The properties of each Loan Party and each Subsidiary thereof are insured with financially sound and reputable insurance companies that are not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where each such Loan Party or the applicable Subsidiary operates.

 

(s)                                  Set forth on Schedule 4.01(s) hereto is a complete and accurate list of all Existing Debt (other than Surviving Debt), showing as of the date hereof the obligor and the principal amount outstanding thereunder.

 

(t)                                    Set forth on Schedule 4.01(t) hereto is a complete and accurate list of all Debt which will remain outstanding after giving effect to the consummation of the Transaction, showing as of the date hereof the obligor and the principal amount outstanding thereunder, the maturity date thereof and the amortization schedule therefor.

 

(u)                                 (i) Each Loan Party and each of its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(ii)                                  Set forth on Schedule 4.01(u) hereto is a complete and accurate list of all Liens on the property or assets of any Loan Party or any of its Subsidiaries, showing as of the date hereof the lienholder thereof, the principal amount of the obligations secured thereby and the property or assets of such Loan Party or such Subsidiary subject thereto.  The property and assets of each Loan Party and each of its Subsidiaries is subject to no Liens, other than Liens set forth on Schedule 4.01(u), and as otherwise permitted by Section 5.02(a).

 

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(v)                                 Set forth on Schedule 4.01(v) hereto is a complete and accurate list of all Investments in excess of $10 million held by any Loan Party or any of its Subsidiaries on the date hereof, showing as of the date hereof the amount, obligor or issuer and maturity, if any, thereof.

 

(w)                               Set forth on Schedule 4.01(w) hereto is a complete and accurate list of all patents, trademarks, trade names, service marks and copyrights, and all applications therefor and licenses thereof, of each Loan Party or any of its Subsidiaries, showing as of the date hereof the jurisdiction in which registered, the registration number, the date of registration and the expiration date.

 

(x)                                   Neither any Loan Party nor any of its Subsidiaries are using the proceeds of the Advances for any purpose other than as permitted under this Agreement.

 

(y)                                 The Obligations under the Loan Documents constitute “Senior Debt” (or the equivalent term) as such term is defined in any agreement, indenture or other instrument pursuant to which any Debt that is subordinated to the Obligations of any Loan Party and each Subsidiary thereof under the Loan Documents is issued, to which any Loan Party or any of Subsidiaries thereof is a party and that contains such a definition or any similar definition.

 

ARTICLE V

 

COVENANTS OF THE BORROWER

 

Section 5.01.                             Affirmative Covenants.  So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, the Borrower will:

 

(a)                                  Compliance with Laws, Etc.  Comply, and cause each of its Subsidiaries to comply, in all material respects, with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, compliance with ERISA, the Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime Control Act of 1970 and all Anti-Terrorism Laws.  None of the Loan Parties is or shall be (i) a Person with whom any Lender is restricted from doing business under Executive Order No. 13224 or any other Anti-Terrorism Law or (ii) engaged in any business involved in making or receiving any contribution of funds, goods or services to or for the benefit of such a Person or in any transaction that evades or avoids, or has the purpose of evading or avoiding, the prohibitions set forth in any Anti-Terrorism Law.  The Loan Parties shall provide to the Lenders any certifications or information that a Lender requests to confirm compliance by the Loan Parties with Anti-Terrorism Laws.

 

(b)                                 Payment of Taxes, Etc.  Pay and discharge, and cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all taxes, assessments and governmental charges or levies imposed upon it or upon its property and (ii) all lawful claims that, if unpaid, might by law become a Lien upon its property;

 

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provided,  however, that neither the Borrower nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to its property and becomes enforceable against its other creditors.

 

(c)                                  Compliance with Environmental Laws.  Comply, and cause each of its Subsidiaries and all lessees and other Persons operating or occupying its properties to comply, in all material respects, with all applicable Environmental Laws and Environmental Permits; obtain and renew and cause each of its Subsidiaries to obtain and renew all Environmental Permits necessary for its operations and properties; and conduct, and cause each of its Subsidiaries to conduct, any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws; provided,  however, that neither the Borrower nor any of its Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances.

 

(d)                                 Maintenance of Insurance.  Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Subsidiary operates.

 

(e)                                  Preservation of Corporate Existence, Etc.  Preserve and maintain, and cause each of its Subsidiaries to preserve and maintain, its existence, legal structure, legal name, rights (charter and statutory), permits, licenses, approvals, privileges and franchises; provided,  however, that (i) the Borrower may cause any of its Subsidiaries to change its legal structure and/or legal name so long as the Borrower has taken all actions to ensure that the Lenders maintain continuous first priority perfected liens in respect of any Collateral effected by any such change, and such change does not reduce, diminish, impair or otherwise disadvantage the Borrower, such Subsidiary or the Lender Parties in any material respect.  (ii) the Borrower and its Subsidiaries may consummate any merger or consolidation permitted under Section 5.02(d) and (iii) neither the Borrower nor any of its Subsidiaries shall be required to preserve any right, permit, license, approval, privilege or franchise if the Board of Directors of the Borrower or such Subsidiary shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Borrower or such Subsidiary, as the case may be, and that the loss thereof is not disadvantageous in any material respect to the Borrower, such Subsidiary or the Lender Parties.

 

(f)                                    Visitation Rights.  At any reasonable time and from time to time, permit any of the Agents or any of the Lender Parties, or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, the Borrower and any of its Subsidiaries, and to discuss the affairs,

 

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finances and accounts of the Borrower and any of its Subsidiaries with any of their officers or directors and with their independent certified public accountants.

 

(g)                                 Keeping of Books.  Keep, and cause each of its Subsidiaries to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Borrower and each such Subsidiary in accordance with generally accepted accounting principles in effect from time to time.

 

(h)                                 Maintenance of Properties, Etc.  Maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties that are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted.

 

(i)                                     Transactions with Affiliates and Excluded Subsidiaries.  Conduct, and cause each of its Subsidiaries to conduct, all transactions otherwise permitted under the Loan Documents with any of their Affiliates (including any Excluded Subsidiaries) on terms that are fair and reasonable and no less favorable to the Borrower or such Subsidiary than it would obtain in a comparable arm’s-length transaction with a Person not an Affiliate.

 

(j)                                     Covenant to Guarantee Obligations and Give Security.  Upon (x) the request of the Collateral Agent following the occurrence and during the continuance of a Default, (y) the formation or acquisition of any new direct or indirect Subsidiaries by any Loan Party (unless, in the case of this clause (y), the Borrower otherwise elects by designating such Subsidiary as an Excluded Subsidiary in a writing delivered to the Joint Lead Arrangers within 30 days after the date of such formation or acquisition, in which case the provisions of this Agreement that by their terms become effective upon the Borrower’s making such election shall thereafter be in effect) or any Subsidiary’s ceasing to be an Excluded Subsidiary pursuant to the definition of “Excluded Subsidiary” or (z) the acquisition of any Subject Property by any Loan Party, and such Subject Property, in the judgment of the Collateral Agent, shall not already be subject to a perfected first priority security interest in favor of the Collateral Agent for the benefit of the Secured Parties, then the Borrower shall, and in the case of clause (y), may, in each case at the Borrower’s expense:

 

(i)                                     in connection with the formation or acquisition of a Subsidiary or any Subsidiary’s ceasing to be an Excluded Subsidiary, within 30 days after the later of (x) such formation or acquisition of any such Subsidiary and (y) the capitalization of such Subsidiary exceeding $1 million, cause each such Subsidiary, and cause each direct and indirect parent of such Subsidiary (if it has not already done so), to duly execute and deliver to the Collateral Agent a guaranty or guaranty supplement, in form and substance satisfactory to the Collateral Agent, guaranteeing the other Loan Parties’ obligations under the Loan Documents,

 

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(ii)                                  within 30 days after such request, formation or acquisition or any Subsidiary’s ceasing to be an Excluded Subsidiary, furnish to the Collateral Agent a description of the personal properties of the Loan Parties and their respective Subsidiaries constituting Subject Property in detail satisfactory to the Collateral Agent,

 

(iii)                               within 30 days after such request, formation or acquisition or any Subsidiary’s ceasing to be an Excluded Subsidiary, duly execute and deliver, and cause each such Subsidiary and each direct and indirect parent of such Subsidiary (if it has not already done so) to duly execute and deliver, to the Collateral Agent pledges, assignments, security agreement supplements and other security agreements, as specified by and in form and substance satisfactory to the Collateral Agent, securing payment of all the Obligations of the applicable Loan Party, such Subsidiary or such parent, as the case may be, under the Loan Documents and constituting Liens on all such properties which constitute Subject Property,

 

(iv)                              within 30 days after such request, formation or acquisition or any Subsidiary’s ceasing to be an Excluded Subsidiary, take, and cause such Subsidiary or such parent to take, whatever action (including, without limitation, the filing of Uniform Commercial Code financing statements, and the giving of notices) may be necessary or advisable in the opinion of the Collateral Agent to vest in the Collateral Agent (or in any representative of the Collateral Agent designated by it) valid and subsisting Liens on the Subject Property purported to be subject to the pledges, assignments, security agreement supplements and security agreements delivered pursuant to this Section 5.01(j), enforceable against all third parties in accordance with their terms,

 

(v)                                 within 60 days after such request, formation or acquisition or any Subsidiary’s ceasing to be an Excluded Subsidiary, deliver to the Collateral Agent, upon the request of the Collateral Agent in its sole discretion, a signed copy of a favorable opinion, addressed to the Collateral Agent and the other Secured Parties, of counsel for the Loan Parties acceptable to the Collateral Agent as to the matters contained in clauses (i), (iii) and (iv) above, as to such guaranties, guaranty supplements, pledges, assignments, security agreement supplements and security agreements being legal, valid and binding obligations of each Loan Party party thereto enforceable in accordance with their terms, as to the matters contained in clause (iv) above, as to such recordings, filings, notices, endorsements and other actions being sufficient to create valid perfected Liens on such Subject Property, and as to such other matters as the Collateral Agent may reasonably request,

 

(vi)                              upon the occurrence and during the continuance of a Default, promptly cause to be deposited any and all cash dividends paid or payable to it or any of its Subsidiaries from any of its Subsidiaries from time to time into the Collateral Account, and with respect to all other dividends paid or payable to it or any of its Subsidiaries from time to time, promptly execute and deliver, or cause

 

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such Subsidiary to promptly execute and deliver, as the case may be, any and all further instruments and take or cause such Subsidiary to take, as the case may be, all such other action as the Collateral Agent may deem necessary or desirable in order to obtain and maintain from and after the time such dividend is paid or payable a perfected, first priority lien on and security interest in such dividends, and

 

(vii)                           at any time and from time to time, promptly execute and deliver any and all further instruments and documents and take all such other action as the Collateral Agent may deem necessary or desirable in obtaining the full benefits of, or in perfecting and preserving the Liens of, such guaranties, pledges, assignments, security agreement supplements and security agreements.

 

(k)                                  Further Assurances.  (i) Promptly upon request by any Agent, or any Lender Party through the Paying Agent, correct, and cause each of its Subsidiaries promptly to correct, any defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and

 

(ii)                                  Promptly upon request by any Agent, or any Lender Party through the Paying Agent, do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, conveyances, pledge agreements, assignments, financing statements and continuations thereof, termination statements, notices of assignment, transfers, certificates, assurances and other instruments as any Agent, or any Lender Party through the Paying Agent, may reasonably require from time to time in order to (A) carry out more effectively the purposes of the Loan Documents, (B) to the fullest extent permitted by applicable law, subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (C) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (D) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so.

 

(l)                                     Performance of Related Documents.  Perform and observe, and cause each of its Subsidiaries to perform and observe, all of the terms and provisions of each Related Document to be performed or observed by it, maintain each such Related Document in full force and effect, enforce such Related Document in accordance with its terms, take all such action to such end as may be from time to time requested by the Paying Agent and, upon request of the Paying Agent, make to each other party to each such Related Document such demands and requests for information and reports or for action as any Loan Party or any of its Subsidiaries is entitled to make under such Related Document.

 

(m)                               Preparation of Environmental Reports.  At the request of the Joint Lead Arrangers or the Collateral Agent from time to time, provide to the Lender Parties within

 

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60 days after such request, at the expense of the Borrower, an environmental site assessment report for any of its or its Subsidiaries’ properties described in such request, prepared by an environmental consulting firm acceptable to the Joint Lead Arrangers or the Collateral Agent, indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance, removal or remedial action in connection with any Hazardous Materials on such properties; without limiting the generality of the foregoing, if the Joint Lead Arrangers or the Collateral Agent determines at any time that a material risk exists that any such report will not be provided within the time referred to above, the Joint Lead Arrangers or the Collateral Agent may retain an environmental consulting firm to prepare such report at the expense of the Borrower, and the Borrower hereby grants and agrees to cause any Subsidiary that owns any property described in such request to grant at the time of such request to the Joint Lead Arrangers, the Lender Parties, such firm and any agents or representatives thereof an irrevocable non-exclusive license, subject to the rights of tenants, to enter onto their respective properties to undertake such an assessment.

 

(n)                                 Compliance with Terms of Leaseholds.  Make all payments and otherwise perform all obligations in respect of all leases of real property to which the Borrower or any of its Subsidiaries is a party, keep such leases in full force and effect and not allow such leases to lapse or be terminated or any rights to renew such leases to be forfeited or cancelled, notify the Paying Agent of any default by any party with respect to such leases and cooperate with the Paying Agent in all respects to cure any such default, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do so, either individually or in the aggregate, could not be reasonably likely to have a Material Adverse Effect.

 

(o)                                 Use of Proceeds.  Use the proceeds of the Advances solely (a) for the Refinancing and to pay transaction fees and expenses incurred in connection therewith and (b) to provide working capital for the Loan Parties and for other general corporate purposes, including, without limitation, for purposes of making capital expenditures, share repurchases permitted under Section 5.02(g) and acquisitions and other Investments permitted under Section 5.02(f),

 

Section 5.02.                             Negative Covenants.  So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, the Borrower will not, at any time:

 

(a)                                  Liens, Etc.  Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with respect to any of its properties of any character (including, without limitation, accounts) whether now owned or hereafter acquired, or sign or file or suffer to exist, or permit any of its Subsidiaries to sign or file or suffer to exist, under the Uniform Commercial Code of any jurisdiction, a financing statement that names the Borrower or any of its Subsidiaries as debtor, or sign or suffer to exist, or permit any of its Subsidiaries to sign or suffer to exist, any security agreement authorizing any secured party thereunder to file such financing

 

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statement, or assign, or permit any of its Subsidiaries to assign, any accounts or other right to receive income, except:

 

(i)                                     Liens created under the Loan Documents;

 

(ii)                                  Permitted Liens;

 

(iii)                               Liens existing on the date hereof and described on Schedule 4.01(u) hereto;

 

(iv)                              purchase money Liens arising from financings upon or in real property or equipment acquired or held by the Borrower or any of its Subsidiaries in the ordinary course of business to secure the purchase price of such property or equipment or to secure Debt incurred solely for the purpose of financing the acquisition, construction or improvement of any such property or equipment to be subject to such Liens, or Liens existing on any such property or equipment at the time of acquisition (other than any such Liens created in contemplation of such acquisition that do not secure the purchase price), or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount; provided, however, that no such Lien shall extend to or cover any property other than the property or equipment being acquired, constructed or improved, and no such extension, renewal or replacement shall extend to or cover any property not theretofore subject to the Lien being extended, renewed or replaced; and provided  further that the Debt secured by Liens permitted by this clause (iv) shall be permitted under Section 5.02(b)(iii)(B);

 

(v)                                 Liens on or with respect to the Equity Interests or assets of a newly-formed or newly-acquired Subsidiary granted in connection with financing the formation of, or the acquisition of all of the Equity Interests or all or substantially all of the assets of, such Person, as contemplated in Section 5.02(f)(vii);

 

(vi)                              Liens arising pursuant to a Permitted Receivables Financing on receivables sold or financed in connection with such Permitted Receivables Financing in an aggregate amount not to exceed $350,000,000; and

 

(vii)                           Liens not otherwise permitted under this Section 5.02(a); provided that (A) such Liens shall not extend to or cover any Collateral and (B) the book value of the assets subject to such Liens shall not exceed, in the aggregate, 15% of the book value of the Borrower’s Consolidated property, plant and equipment, in each case as such book value is determined in accordance with GAAP.

 

(b)                                 Debt.  Create, incur, assume or suffer to exist, or permit any of its Subsidiaries to create, incur, assume or suffer to exist, any Debt, except:

 

(i)                                     in the case of the Borrower or a Subsidiary Guarantor,

 

(A)           Debt in respect of Hedge Agreements permitted under Section 5.02(m) hereof;

 

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(B)             Debt owed to a Subsidiary Guarantor, which Debt (x) shall constitute Pledged Debt, (y) shall be subordinated to the Facilities and on terms acceptable to the Joint Lead Arrangers and (z) shall be evidenced by promissory notes in form and substance satisfactory to the Joint Lead Arrangers and such promissory notes shall be pledged as security for the Obligations of the holder thereof under the Loan Documents to which such holder is a party and delivered to the Collateral Agent pursuant to the terms of the Security Agreement;

 

(C)             so long as no Event of Default has occurred and is continuing, or would result therefrom, (x) other unsecured Debt and (y) Debt secured by Liens permitted under Section 5.02(a)(vii); provided that before and after giving effect to such Debt, the Borrower is in pro forma compliance with the covenants in Section 5.04, calculated based on the financial statements most recently delivered pursuant to Section 5.03 and as though such Debt had been incurred at the beginning of the four-quarter period covered thereby;

 

(ii)                                  in the case of any Subsidiary of the Borrower,

 

(A)           Debt owed to the Borrower or to a Subsidiary Guarantor, provided that, in each case, such Debt (x) shall constitute Pledged Debt, (y) shall be subordinated to the Facilities and on terms acceptable to the Joint Lead Arrangers and (z) shall be evidenced by promissory notes in form and substance satisfactory to the Joint Lead Arrangers and such promissory notes shall be pledged as security for the Obligations of the holder thereof under the Loan Documents to which such holder is a party and delivered to the Collateral Agent pursuant to the terms of the Security Agreement;

 

(B)             so long as no Event of Default has occurred and is continuing or would result therefrom, other unsecured Debt of the Subsidiaries of the Borrower in an aggregate principal amount not to exceed $100 million at any one time outstanding; and

 

(C)             Debt of a newly-formed or newly-acquired Subsidiary owed to a Person financing the formation of such Subsidiary or the acquisition of all of the Equity Interests in or all or substantially all of the assets of such Subsidiary as contemplated by Section 5.02(f)(vii);

 

(iii)                               in the case of the Borrower and its Subsidiaries,

 

(A)           Debt under the Loan Documents,

 

(B)             so long as no Event of Default has occurred and is continuing, or would result therefrom, Debt secured by Liens permitted by Section 5.02(a)(iv); provided, that before and after giving effect to such Debt, the Borrower is in pro forma compliance with the financial covenants set forth in Section 5.04 hereof calculated based on the financial statements most recently delivered pursuant to Section 5.03 and as though such Debt was incurred at the beginning of the four-quarter period covered thereby,

 

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(C)    the Surviving Debt, and any Debt extending the maturity of, or refunding or refinancing, in whole or in part, any Surviving Debt, provided that the terms of any such extending, refunding or refinancing Debt, and of any agreement entered into and of any instrument issued in connection therewith, are otherwise permitted by the Loan Documents, provided further that the principal amount of such Surviving Debt shall not be increased above the principal amount thereof outstanding immediately prior to such extension, refunding or refinancing (except by an amount equal to a reasonable premium paid, and reasonable fees and expenses incurred, in connection with such refinancing), and the direct and contingent obligors therefor shall not be changed, as a result of or in connection with such extension, refunding or refinancing, provided still further that the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a whole, of any such extending, refunding or refinancing Debt, and of any agreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect to the Loan Parties or the Lender Parties than the terms of any agreement or instrument governing the Surviving Debt being extended, refunded or refinanced and the interest rate applicable to any such extending, refunding or refinancing Debt does not exceed the then applicable market interest rate, and

 

(D)    Debt incurred by a Permitted Receivables Financing Subsidiary in a Permitted Receivables Financing.

 

(c)           Change in Nature of Business.  Make, or permit any of its Subsidiaries to make, any material change in the nature of its business as carried on at the date hereof.

 

(d)           Mergers, Etc.  Merge into or consolidate with any Person or permit any Person to merge into it, or permit any of its Subsidiaries to do so, except that:

 

(i)            any Subsidiary of the Borrower may merge into or consolidate with the Borrower (so long as such Subsidiary is a Subsidiary Guarantor) or any other Subsidiary of the Borrower, provided that, in the case of any such merger or consolidation, the Person formed by such merger or consolidation shall be a wholly owned Subsidiary of the Borrower, provided further that, in the case of any such merger or consolidation to which a Subsidiary Guarantor is a party, the Person formed by such merger or consolidation shall be a Subsidiary Guarantor; and

 

(ii)           in connection with any acquisition permitted under Section 5.02(f), any Subsidiary of the Borrower may merge into or consolidate with any other Person or permit any other Person to merge into or consolidate with it; provided that the Person surviving such merger shall be a wholly owned Subsidiary of the Borrower and such Person shall become a Subsidiary Guarantor hereunder;

 

provided,  however, that in each case, immediately after giving effect thereto, no event shall occur and be continuing that constitutes a Default and, in the case of any such merger to which the Borrower is a party, the Borrower is the surviving corporation.

 

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(e)           Sales, Etc., of Assets.  Sell, lease, transfer or otherwise dispose of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise dispose of, any assets, or grant any option or other right to purchase, lease or otherwise acquire, except:

 

(i)            sales of Inventory in the ordinary course of its business;

 

(ii)           in a transaction authorized by Section 5.02(d);

 

(iii)          so long as no Event of Default has occurred and is continuing or would occur after giving effect thereto, (A) sales of assets consisting of real property, plant and equipment, (B) ordinary course sales of impaired accounts receivables in connection with the receipt of insurance or other proceeds in full or partial payment therefor and (C) the sale, in one transaction or series of related transactions, of all of the Equity Interests or all or substantially all of the assets of a Subsidiary or related group of Subsidiaries of the Borrower that in any case constitute a single business, in each case, for cash and for fair value and in an aggregate amount for all such dispositions pursuant to clauses (A) — (C) of this clause (iii) not to exceed, at any time, 10% of the total assets of the Borrower and its Consolidated Subsidiaries (determined in accordance with GAAP) as reflected on the Borrower’s consolidated balance sheet contained in the financial statements most recently delivered pursuant to Section 5.03(b);

 

(iv)          sales, transfers and other dispositions of assets among Loan Parties;

 

(v)           sales of assets acquired after the Effective Date that do not constitute Collateral under the Loan Documents; it being understood that for the purposes of sales of assets permitted by this clause (v), the Subject Property related to such assets may be sold in connection therewith; and

 

(vi)          the winding up or dissolution of any Subsidiary so long as (A) all assets of such Subsidiary are transferred to the Borrower or another Subsidiary (other than any Excluded Subsidiary) prior to, or simultaneously with, such winding up or dissolution and (B) if such Subsidiary is a Guarantor, all assets of such Subsidiary are transferred to the Borrower or another Guarantor.

 

(f)            Investments in Other Persons.  Make or hold, or permit any of its Subsidiaries to make or hold, any Investment in any Person, except:

 

(i)            Investments by (x) the Borrower in Subsidiary Guarantors, (y) Subsidiary Guarantors in the Borrower and other Subsidiary Guarantors, and (z) the Borrower or Subsidiary Guarantors in new Subsidiaries, provided, that such Subsidiaries become Subsidiary Guarantors hereunder;

 

(ii)           loans and advances to employees in the ordinary course of the business of the Borrower and its Subsidiaries as presently conducted in an aggregate principal amount not to exceed $500,000 at any time outstanding;

 

(iii)          Investments by the Borrower and its Subsidiaries in Cash Equivalents;

 

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(iv)          Investments existing on the date hereof and described on Schedule 4.01(v) hereto;

 

(v)           Investments by the Borrower in Hedge Agreements permitted under Section 5.02(b)(i)(A);

 

(vi)          Investments consisting of intercompany Debt permitted under Section 5.02(b)(i)(B) or 5.02(b)(ii);

 

(vii)         so long as no Event of Default has occurred and is continuing or would occur after giving effect thereto, other Investments consisting of acquisitions or formations of all or substantially all of the Equity Interests or assets of another Person; provided that with respect to any Investments made under this clause (vii):  (A) if such Investment is in the Equity Interests of such Person, either (1) such Person shall be a Subsidiary Guarantor hereunder or (2) either (x) such acquisition or formation is financed with the proceeds of Debt secured by (and only by) the accounts receivables, inventory and related documents and general intangibles of the Subsidiary so acquired and its respective Subsidiaries, which Debt is not recourse to (including by way of guaranty) the Borrower and its other Subsidiaries or (y) the Borrower otherwise elects in accordance with Section 5.01(j) that such newly-acquired Subsidiary shall be an Excluded Subsidiary; (B) immediately before and after giving effect thereto, no Default shall have occurred and be continuing or would result therefrom; (C) any company or business acquired or invested in pursuant to this clause (vii) shall be in the same or related line of business as the business of the Borrower or any of its Subsidiaries; (D) immediately after giving effect to the acquisition of a company or business pursuant to this clause (vii), the Borrower shall be in pro forma compliance with the covenants contained in Section 5.04, calculated based on the financial statements most recently delivered to the Lender Parties pursuant to Section 5.03 and as though such acquisition had occurred at the beginning of the four-quarter period covered thereby, as evidenced by a certificate of the Chief Financial Officer of the Borrower delivered to the Lender Parties demonstrating such compliance; and (E) within 30 days after the acquisition of a company or business pursuant to this clause (vii) the Borrower shall provide revised forecasts of the type referred to in Section 5.03(e) giving pro forma effect to such acquisition;

 

(viii)        Investments in Mesabi Nugget; provided, that, both before and after giving effect to any such Investment the Borrower is in pro forma compliance with the covenants contained in Section 5.04, calculated based on the financial statements most recently delivered to the Lender Parties pursuant to Section 5.03 and as though such Investment had occurred at the beginning of the four-quarter period covered thereby;

 

(ix)           Other Investments at any time in the aggregate not to exceed $300,000,000;

 

(x)            Other Investments in an amount not to exceed, when taken together with Restricted Payments made pursuant to clause (x) of Section 5.02(g)(iii), the Available Basket Amount;

 

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provided, that, notwithstanding the restrictions set forth in this Section 5.02(f), the Borrower may make Investments so long as immediately after giving pro forma effect to any such Investment, the Total Net Leverage Ratio is less than 3.50:1.00.

 

(g)           Restricted Payments.  Declare or pay any dividends, purchase, redeem, retire, defease or otherwise acquire for value any of its Equity Interests now or hereafter outstanding, return any capital to its stockholders, partners or members (or the equivalent Persons thereof) as such, make any distribution of assets, Equity Interests, obligations or securities to its stockholders, partners or members (or the equivalent Persons thereof) as such, or permit any of its Subsidiaries to do any of the foregoing, or permit any of its Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value any Equity Interests in the Borrower or to issue or sell any Equity Interests or accept any capital contributions, except that, so long as no Default shall have occurred and be continuing at the time of any action described in clause (i) through (iv) below or would result therefrom:

 

(i)            the Borrower may (A) declare and pay dividends and distributions payable only in common stock of the Borrower, (B)  purchase, redeem, retire, defease or otherwise acquire shares of its capital stock with the proceeds received contemporaneously from the issue of new shares of its capital stock with equal or inferior voting powers, designations, preferences and rights and (C) purchase, redeem, retire or defease any Debt that is convertible into Equity Interests,

 

(ii)           any Subsidiary of the Borrower may (A) declare and pay cash dividends to the Borrower, (B) declare and pay cash dividends to any other Loan Party of which it is a Subsidiary and (C) accept capital contributions from its parent to the extent permitted under Section 5.01(f)(i),

 

(iii)          the Borrower may make payments restricted by this Section 5.02(g) so long as (x) immediately after giving pro forma effect to such payment, the Total Net Leverage Ratio is no higher than 3.50:1.00 or (y) during any fiscal quarter of the Borrower that the Total Net Leverage Ratio exceeds 3.50:1.00, the aggregate amount of such dividends or distributions made at any time when the Total Net Leverage Ratio exceeded 3.50:1.00 does not exceed, when taken together with Investments that at such time have been made pursuant to Section 5.02(f)(x), the Available Basket Amount at such time.

 

(iv)          so long as no Default has occurred and is continuing or would result therefrom, the Borrower may make payments of contractual dividends on convertible equity securities.

 

(h)           Amendments of Constitutive Documents.  Amend, or permit any of its Subsidiaries to amend, its certificate of incorporation or bylaws or other constitutive documents in any respect which could be materially adverse to the interest of the Lender Parties.

 

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(i)            Accounting Changes.  Make or permit any change in (i) accounting policies or reporting practices, except as required or permitted by GAAP, or (ii) Fiscal Year.

 

(j)            Amendment, Etc., of Related Documents.  Cancel or terminate any Related Document (except in connection with the prepayment of any Debt permitted to be prepaid hereunder) or consent to or accept any cancellation or termination thereof, amend, modify or change in any manner any term or condition of any Related Document or give any consent, waiver or approval thereunder, waive any default under or any breach of any term or condition of any Related Document, agree in any manner to any other amendment, modification or change of any term or condition of any Related Document or take any other action in connection with any Related Document that would impair the value of the interest or rights of any Loan Party thereunder or that would impair the rights or interests of any Agent or any Lender Party, or permit any of its Subsidiaries to do any of the foregoing.

 

(k)           Negative Pledge.  Enter into or suffer to exist, or permit any of its Subsidiaries to enter into or suffer to exist, any agreement prohibiting or conditioning the creation or assumption of any Lien upon any of its property or assets except (i) in favor of the Secured Parties or (ii) in connection with (A) any Surviving Debt and (B) any Debt permitted by Section 5.02(b)(i)(C), Section 5.02(b)(ii)(B) and Section 5.02(b)(iii)(B).

 

(l)            Partnerships, Etc.  Become a general partner in any general or limited partnership or joint venture, or permit any of its Subsidiaries to do so, other than any Subsidiary the sole assets of which consist of its interest in such partnership or joint venture.

 

(m)          Speculative Transactions.  Engage, or permit any of its Subsidiaries to engage, in any transaction involving commodity options or futures contracts or any similar speculative transactions other than in any event transactions entered into in the ordinary course of business consistent with past practice; it being understood, however, that the Borrower may engage in interest rate and commodity risk management transactions that are not speculative so long as the other requirements of this Agreement are complied with.

 

(n)           Payment Restrictions Affecting Subsidiaries.  Directly or indirectly, enter into or suffer to exist, or permit any of its Subsidiaries to enter into or suffer to exist, any agreement or arrangement limiting the ability of any of its Subsidiaries to declare or pay dividends or other distributions in respect of its Equity Interests or repay or prepay any Debt owed to, make loans or advances to, or otherwise transfer assets to or invest in, the Borrower or any Subsidiary of the Borrower (whether through a covenant restricting dividends, loans, asset transfers or investments, a financial covenant or otherwise), except (i) the Loan Documents and (ii) any agreement or instrument evidencing Surviving Debt.

 

(o)           The Borrower shall not permit the Borrowing Base Obligations at any time to exceed the Borrowing Base at such time.

 

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Section 5.03.          Reporting Requirements.  So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, the Borrower will furnish to the Agents and the Lender Parties:

 

(a)           Default Notice.  As soon as possible and in any event within two days after the occurrence of each Default or any event, development or occurrence reasonably likely to have a Material Adverse Effect continuing on the date of such statement, a statement of the chief financial officer of the Borrower setting forth details of such Default and the action that the Borrower has taken and proposes to take with respect thereto.

 

(b)           Annual Financials.  As soon as available and in any event within 90 days after the end of each Fiscal Year, a copy of the annual audit report for such year for the Borrower and its Subsidiaries, including therein a Consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such Fiscal Year and a Consolidated statement of income and a Consolidated statement of cash flows of the Borrower and its Subsidiaries for such Fiscal Year, in each case accompanied by an opinion acceptable to the Required Lenders of Ernst & Young LLP or other independent public accountants of recognized standing acceptable to the Required Lenders together with (i) a certificate of a Financial Officer of the Borrower stating that no Default has occurred and is continuing or, if a default has occurred and is continuing, a statement as to the nature thereof and the action that the Borrower has taken and proposes to take with respect thereto and (ii) a certificate in substantially the form of Exhibit H hereto demonstrating the computations used by the Borrower in determining compliance with the covenants contained in Section 5.04; provided that in the event of any change in GAAP used in the preparation of such financial statements, the Borrower shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP.

 

(c)           Quarterly Financials.  As soon as available and in any event within 45 days after the end of each of the first three quarters of each Fiscal Year, a Consolidated balance sheet of the Borrower and its Subsidiaries as of the end of such quarter and a Consolidated statement of income and a Consolidated statement of cash flows of the Borrower and its Subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter and a Consolidated statement of income and a Consolidated statement of cash flows of the Borrower and its Subsidiaries for the period commencing at the end of the previous Fiscal Year and ending with the end of such quarter, setting forth in each case in comparative form the corresponding figures for the corresponding date or period of the preceding Fiscal Year, all in reasonable detail and duly certified (subject to normal year-end audit adjustments) by a Financial Officer of the Borrower as having been prepared in accordance with GAAP, together with (i) a certificate of said officer stating that no Default has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof and the action that the Borrower has taken and proposes to take with respect thereto, and (ii) a certificate in substantially the form of Exhibit H hereto demonstrating the computations used by the Borrower in determining compliance with the covenants contained in Section 5.04,

 

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provided that in the event of any change in GAAP used in the preparation of such financial statements, the Borrower shall also provide, if necessary for the determination of compliance with Section 5.04, a statement of reconciliation conforming such financial statements to GAAP.

 

(d)           Quarterly Certificate.  Within 15 days after the end of each fiscal quarter, a certificate of a Financial Officer of the Borrower, in form and substance satisfactory to the Joint Lead Arrangers and the Administrative Agent, demonstrating that the Borrowing Base at such time exceeds Borrowing Base Obligations at such time.

 

(e)           Annual Budget.  As soon as available and in any event no later than 15 days before the end of each Fiscal Year, an annual budget prepared by management of the Borrower, in form satisfactory to the Joint Lead Arrangers, of balance sheets, income statements and cash flow statements on an annual basis for the Fiscal Year following such Fiscal Year and for each Fiscal Year thereafter until the Termination Date.  Such budget shall set forth a statement of the principal assumptions reflected therein.

 

(f)            Litigation.  Promptly after the commencement thereof, notice of all actions, suits, investigations, litigation and proceedings in which the amount involved is in excess of $25,000,000 before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting any Loan Party or any of its Subsidiaries of the type described in Section 4.01(f), and promptly after the occurrence thereof, notice of any material adverse change in the status or the financial effect on any Loan Party or any of its Subsidiaries of the Disclosed Litigation from that described on Schedule 4.01(f) hereto.

 

(g)           Securities Reports.  Promptly after the sending or filing thereof, copies of all proxy statements, financial statements and reports that any Loan Party or any of its Subsidiaries sends to its stockholders, and copies of all regular, periodic and special reports, and all registration statements, that any Loan Party or any of its Subsidiaries files with the Securities and Exchange Commission or any governmental authority that may be substituted therefor, or with any national securities exchange.

 

(h)           Creditor Reports.  (i) Promptly after the furnishing thereof, copies of any statement or report furnished to any holder of Senior Notes, and (ii) promptly after the furnishing thereof, copies of any default notice furnished to any holder of Debt securities in the aggregate outstanding in excess of $25,000,000 of any Loan Party or of any of its Subsidiaries pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lender Parties pursuant to any other clause of this Section 5.03.

 

(i)            Agreement Notices.  Promptly upon receipt thereof, copies of all notices, requests and other documents received by any Loan Party or any of its Subsidiaries under or pursuant to any Related Document or instrument, indenture, loan or credit or similar agreement regarding or related to any breach or default by any party thereto or any other event that could materially impair the value of the interests or the rights of any Loan Party or otherwise have a Material Adverse Effect and copies of any amendment,

 

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modification or waiver of any provision of any Related Document or instrument, indenture, loan or credit or similar agreement and, from time to time upon request by the Paying Agent, such information and reports regarding the Related Documents and such instruments, indentures and loan and credit and similar agreements as the Paying Agent may reasonably request.

 

(j)            Revenue Agent Reports.  Within 10 days after receipt, copies of all Revenue Agent Reports (Internal Revenue Service Form 886), or other written proposals of the Internal Revenue Service, that propose, determine or otherwise set forth positive adjustments to the Federal income tax liability of the affiliated group (within the meaning of Section 1504(a)(1) of the Internal Revenue Code) of which the Borrower is a member aggregating $25,000,000 or more.

 

(k)           ERISA.  ERISA Events and ERISA Reports.  (A) Promptly and in any event within 10 days after any Loan Party or any ERISA Affiliate knows or has reason to know that any ERISA Event has occurred, a statement of the Chief Financial Officer of the Borrower describing such ERISA Event and the action, if any, that such Loan Party or such ERISA Affiliate has taken and proposes to take with respect thereto and (B) on the date any records, documents or other information must be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of ERISA, a copy of such records, documents and information.

 

(i)            Plan Terminations.  Promptly and in any event within two Business Days after receipt thereof by any Loan Party or any ERISA Affiliate, copies of each notice from the PBGC stating its intention to terminate any Plan or to have a trustee appointed to administer any Plan.

 

(ii)           Plan Annual Reports.  Promptly and in any event within 30 days after the filing thereof with the Internal Revenue Service, copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with respect to each Plan.

 

(iii)          Multiemployer Plan Notices.  Promptly and in any event within five Business Days after receipt thereof by any Loan Party or any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of each notice concerning (A) the imposition of Withdrawal Liability by any such Multiemployer Plan, (B) the reorganization or termination, within the meaning of Title IV of ERISA, of any such Multiemployer Plan or (C) the amount of liability incurred, or that may be incurred, by such Loan Party or any ERISA Affiliate in connection with any event described in clause (A) or (B).

 

(l)            Environmental Conditions.  Promptly after the assertion or occurrence thereof, notice of any Environmental Action against or of any noncompliance by any Loan Party or any of its Subsidiaries with any Environmental Law or Environmental Permit that could reasonably be expected to have a Material Adverse Effect.

 

(m)          Insurance.  As soon as available and in any event within 30 days after the end of each Fiscal Year, a report summarizing the insurance coverage (specifying type, amount and carrier) in effect for each Loan Party and its Subsidiaries and containing such

 

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additional information as any Agent, or any Lender Party through the Paying Agent, may reasonably specify.

 

(n)           Other Information.  Such other information respecting the business, condition (financial or otherwise), operations, performance, properties or prospects of any Loan Party or any of its Subsidiaries as any Agent or the Joint Lead Arrangers, or any Lender Party through the Paying Agent, may from time to time reasonably request.

 

Section 5.04.          Financial Covenants.  So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have any Commitment hereunder, the Borrower will:

 

(a)           Total Net Leverage Ratio.  Maintain, beginning with the period of four fiscal quarters ending September 30, 2011 and at all times thereafter, a Total Net Leverage Ratio of not more than 5.00 : 1.00.

 

(b)           Interest Coverage Ratio.  Maintain, beginning with the period of four fiscal quarters ending September 30, 2011 and at all times thereafter, an Interest Coverage Ratio of no less than 2.50 : 1.00.

 

(c)           Minimum Liquidity.  Maintain, at all times that any of the Borrower’s 7.375% Senior Notes due 2012 shall remain outstanding, Liquidity in an amount equal to at least $150,000,000 in excess of the aggregate principal outstanding amount thereof.

 

ARTICLE VI

 

EVENTS OF DEFAULT

 

Section 6.01.          Events of Default.  If any of the following events (“Events of Default”) shall occur and be continuing:

 

(a)           (i) the Borrower shall fail to pay any principal of any Advance when the same shall become due and payable or (ii) the Borrower shall fail to pay any interest on any Advance, or any Loan Party shall fail to make any other payment under any Loan Document, in each case under this clause (ii) within two Business Days after the same becomes due and payable; or

 

(b)           any representation or warranty made by any Loan Party (or any of its officers) under or in connection with any Loan Document shall prove to have been incorrect in any material respect when made; or

 

(c)           the Borrower shall fail to perform or observe any term, covenant or agreement contained in Section 2.03(e), 2.14, 5.01(e), (f), (i), (j), (l) or (n), 5.02, 5.03 or 5.04; provided that the Borrower shall have a cure period of three Business Days for any failure to perform or observe the covenants contained in Section 5.02(o) and Section 5.03; or

 

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(d)           any Loan Party shall fail to perform or observe any other term, covenant or agreement contained in any Loan Document on its part to be performed or observed if such failure shall remain unremedied for 10 days after the earlier of the date on which (i) a Responsible Officer becomes aware of such failure or (ii) written notice thereof shall have been given to the Borrower by any Agent or any Lender Party; or

 

(e)           any Loan Party, any of its Subsidiaries or any Excluded Subsidiary to the extent its Obligations are guaranteed by a Loan Party shall fail to pay any principal of, premium or interest on or any other amount payable in respect of any Debt of such Loan Party, such Subsidiary or such Excluded Subsidiary (as the case may be) that is outstanding in a principal amount (or, in the case of any Hedge Agreement, an Agreement Value) of at least $20,000,000 either individually or in the aggregate (but excluding Debt outstanding hereunder), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt or otherwise to cause, or to permit the holder thereof to cause, such Debt to mature; or any such Debt shall be declared to be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or

 

(f)            any Loan Party or any of its Subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against any Loan Party or any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it) that is being diligently contested by it in good faith, either such proceeding shall remain undismissed or unstayed for a period of 30 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or any substantial part of its property) shall occur; or any Loan Party or any of its Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (f); or

 

(g)           any judgments or orders, either individually or in the aggregate, for the payment of money in excess of $20,000,000 shall be rendered against any Loan Party or any of its Subsidiaries and shall remain unpaid and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there

 

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shall be any period of 10 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; or

 

(h)           any non-monetary judgment or order shall be rendered against any Loan Party or any of its Subsidiaries that could be reasonably likely to have a Material Adverse Effect, and there shall be any period of 10 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; or

 

(i)            any provision of any Loan Document after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason cease to be valid and binding on or enforceable against any Loan Party party to it, or any such Loan Party shall so state in writing; or

 

(j)            any Collateral Document or financing statement after delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority lien on and security interest in the Collateral purported to be covered thereby; or

 

(k)           a Change of Control shall occur; or

 

(l)            any ERISA Event shall have occurred with respect to a Plan and the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of any and all other Plans with respect to which an ERISA Event shall have occurred and then exist (or the liability of the Loan Parties and the ERISA Affiliates related to such ERISA Event) exceeds $20,000,000; or

 

(m)          any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in an amount that, when aggregated with all other amounts required to be paid to Multiemployer Plans by the Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined as of the date of such notification), exceeds $20,000,000 or requires payments exceeding $5,000,000 per annum; or

 

(n)           any Loan Party or any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, and as a result of such reorganization or termination the aggregate annual contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer Plans that are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the plan years of such Multiemployer Plans immediately preceding the plan year in which such reorganization or termination occurs by an amount exceeding $20,000,000;

 

then, and in any such event, the Paying Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Commitments of each Lender Party and the obligation of each Lender Party to make Advances (other than Letter of Credit Advances by an Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(c) and Swing Line

 

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Advances by a Revolving Credit Lender pursuant to Section 2.02(b)) and of the Issuing Banks to issue Letters of Credit to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, (A) by notice to the Borrower, declare the Notes, all interest thereon and all other amounts payable under this Agreement and the other Loan Documents to be forthwith due and payable, whereupon the Notes, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower, (B) by notice to each party required under the terms of any agreement in support of which a Standby Letter of Credit is issued, request that all Obligations under such agreement be declared to be due and payable and (C) by notice to any Issuing Bank, direct such Issuing Bank to deliver a Default Termination Notice to the beneficiary of each Standby Letter of Credit issued by it, and such Issuing Bank shall deliver such Default Termination Notices; provided,  however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code, (x) the Commitments of each Lender Party and the obligation of each Lender Party to make Advances (other than Letter of Credit Advances by an Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(c) and Swing Line Advances by a Revolving Credit Lender pursuant to Section 2.02(b)) and of the Issuing Banks to issue Letters of Credit shall automatically be terminated and (y) the Notes, all such interest and all such amounts 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 the Borrower.

 

Section 6.02.          Actions in Respect of the Letters of Credit upon Default.  If any Event of Default shall have occurred and be continuing, the Paying Agent may, or shall at the request of the Required Lenders, irrespective of whether it is taking any of the actions described in Section 6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such demand the Borrower will, pay to the Collateral Agent on behalf of the Lender Parties in same day funds at the Collateral Agent’s office designated in such demand, for deposit in the L/C Cash Collateral Account, an amount equal to the aggregate Available Amount of all Letters of Credit then outstanding.  If at any time the Paying Agent or the Collateral Agent determines that any funds held in the L/C Cash Collateral Account are subject to any right or claim of any Person other than the Agents and the Lender Parties or that the total amount of such funds is less than the aggregate Available Amount of all Letters of Credit, the Borrower will, forthwith upon demand by the Paying Agent or the Collateral Agent, pay to the Collateral Agent, as additional funds to be deposited and held in the L/C Cash Collateral Account, an amount equal to the excess of (a) such aggregate Available Amount over (b) the total amount of funds, if any, then held in the L/C Cash Collateral Account that the Paying Agent or the Collateral Agent, as the case may be, determines to be free and clear of any such right and claim.  Upon the drawing of any Letter of Credit for which funds are on deposit in the L/C Cash Collateral Account (including following the Termination Date), such funds shall be applied to reimburse the Issuing Banks or Revolving Credit Lenders, as applicable, to the extent permitted by applicable law.

 

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ARTICLE VII

 

THE AGENTS, ETC.

 

Section 7.01.                             Authorization and Action.  Each Lender Party (in its capacities as a Lender, the Swing Line Bank (if applicable), an Issuing Bank (if applicable) and on behalf of itself and its Affiliates as potential Hedge Banks) hereby appoints and authorizes the Joint Lead Arrangers and each Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement and the other Loan Documents as are delegated to the Joint Lead Arrangers and such Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto.  As to any matters not expressly provided for by the Loan Documents (including, without limitation, enforcement or collection of the Notes), no Agent nor the Joint Lead Arrangers shall be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding upon all Lender Parties and all holders of Notes; provided,  however, that no Agent nor the Joint Lead Arrangers shall be required to take any action that exposes such Agent nor the Joint Lead Arrangers to personal liability or that is contrary to this Agreement or applicable law.  Each Agent agrees to give to each Lender Party prompt notice of each notice given to it by the Borrower pursuant to the terms of this Agreement.  Except as may otherwise be agreed in writing, each of the Lenders agrees that the Administrative Agent has no obligation to ascertain the identity of the Loan Parties or any authorized signatories of the Loan Parties on behalf of any Lender, or to confirm the completeness or accuracy of any information it obtains from the Loan Parties or any such authorized signatory in doing so.

 

Section 7.02.                             Reliance, Etc.  Neither the Joint Lead Arrangers nor any Agent nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with the Loan Documents, except for its or their own gross negligence or willful misconduct.  Without limitation of the generality of the foregoing, the Joint Lead Arrangers and each Agent:  (a) may treat the payee of any Note as the holder thereof until, in the case of the Paying Agent, the Paying Agent receives and accepts an Assignment and Assumption entered into by the Lender that is the payee of such Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of any other Agent or the Joint Lead Arrangers, such Agent or the Joint Lead Arrangers has received notice from the Paying Agent that it has received and accepted such Assignment and Assumption, in each case as provided in Section 8.07; (b) may consult with legal counsel (including counsel for any Loan Party), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (c) makes no warranty or representation to any Lender Party and shall not be responsible to any Lender Party for any statements, warranties or representations (whether written or oral) made in or in connection with the Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any Loan Document on the part of any Loan Party or to inspect the property (including the books and records) of any Loan Party; (e) shall not be responsible to any Lender Party for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or document

 

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furnished pursuant thereto; and (f) shall incur no liability under or in respect of any Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telegram or facsimile) believed by it to be genuine and signed or sent by the proper party or parties.

 

Section 7.03.                             Bank of America, N.A., PNC Bank, Wells Fargo Bank, National Association and Affiliates.  With respect to its Commitments, the Advances made by it and the Notes issued to it, each of Bank of America, N.A., PNC Bank and Wells Fargo Bank, National Association shall have the same rights and powers under the Loan Documents as any other Lender Party and may exercise the same as though it were not an Agent; and the term “Lender Party” or “Lender Parties” shall, unless otherwise expressly indicated, include Bank of America, N.A., PNC Bank and Wells Fargo Bank, National Association in their respective individual capacities.  Bank of America, N.A., PNC Bank and Wells Fargo Bank, National Association and their respective affiliates may accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from and generally engage in any kind of business with, any Loan Party, any of its Subsidiaries and any Person that may do business with or own securities of any Loan Party or any such Subsidiary, all as if Bank of America, N.A., PNC Bank and Wells Fargo Bank, National Association were not Agents and without any duty to account therefor to the Lender Parties.

 

Section 7.04.                             Lender Party Credit Decision.  Each Lender Party acknowledges that it has, independently and without reliance upon any Agent, the Joint Lead Arrangers or any other Lender Party and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender Party also acknowledges that it will, independently and without reliance upon any Agent, the Joint Lead Arrangers or any other Lender Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.

 

Section 7.05.                             Indemnification.

 

(a)                                  Each Lender Party severally agrees to indemnify each Lead Arranger and each Agent (to the extent not promptly reimbursed by the Borrower) from and against such Lender Party’s ratable share (determined as provided below) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against such Agent in any way relating to or arising out of the Loan Documents or any action taken or omitted by such Agent under the Loan Documents (collectively, the “Indemnified Costs”); provided,  however, that no Lender Party shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent’s or such Lead Arranger’s gross negligence or willful misconduct as found in a final, non-appealable judgment by a court of competent jurisdiction with respect to such Agent or the Joint Lead Arrangers, as the case may be.  Without limitation of the foregoing, each Lender Party agrees to reimburse the Joint Lead Arrangers and each Agent promptly upon demand for its ratable share of any costs and expenses (including, without limitation, fees and expenses of counsel) payable by the Borrower under Section 8.04, to the

 

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extent that such Lead Arranger or such Agent is not promptly reimbursed for such costs and expenses by the Borrower.  In the case of any investigation, litigation or proceeding giving rise to any Indemnified Costs, this Section 7.05 applies whether any such investigation, litigation or proceeding is brought by any Lender Party or any other Person.

 

(b)                                 Each Lender Party severally agrees to indemnify each Issuing Bank (to the extent not promptly reimbursed by the Borrower) from and against such Lender Party’s ratable share (determined as provided below) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against such Issuing Bank in any way relating to or arising out of the Loan Documents or any action taken or omitted by such Issuing Bank under the Loan Documents; provided,  however, that no Lender Party shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Issuing Bank’s gross negligence or willful misconduct as found in a final, non-appealable judgment by a court of competent jurisdiction.  Without limitation of the foregoing, each Lender Party agrees to reimburse such Issuing Bank promptly upon demand for its ratable share of any costs and expenses (including, without limitation, fees and expenses of counsel) payable by the Borrower under Section 8.04, to the extent that such Issuing Bank is not promptly reimbursed for such costs and expenses by the Borrower.

 

(c)                                  For purposes of this Section 7.05, the Lender Parties’ respective ratable shares of any amount shall be determined, at any time, according to the sum of (i) the aggregate principal amount of the Advances outstanding at such time and owing to the respective Lender Parties, (ii) their respective Pro Rata Shares of the aggregate Available Amount of all Letters of Credit outstanding at such time and (iii) their respective Unused Revolving Credit Commitments at such time; provided that the aggregate principal amount of Swing Line Advances owing to the Swing Line Bank and of Letter of Credit Advances owing to such Issuing Bank shall be considered to be owed to the Revolving Credit Lenders ratably in accordance with their respective Revolving Credit Commitments.  The failure of any Lender Party to reimburse any Agent or any Issuing Bank, as the case may be, promptly upon demand for its ratable share of any amount required to be paid by the Lender Parties to such Agent or such Issuing Bank, as the case may be, as provided herein shall not relieve any other Lender Party of its obligation hereunder to reimburse such Agent or such Issuing Bank, as the case may be, for its ratable share of such amount, but no Lender Party shall be responsible for the failure of any other Lender Party to reimburse such Agent or such Issuing Bank, as the case may be, for such other Lender Party’s ratable share of such amount.  Without prejudice to the survival of any other agreement of any Lender Party hereunder, the agreement and obligations of each Lender Party contained in this Section 7.05 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the other Loan Documents.

 

Section 7.06.                             Successor Agents.  Any Agent may resign at any time by giving written notice thereof to the Lender Parties and the Borrower and may be removed at any time with or without cause by the Required Lenders.  Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Agent.  If no successor Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Agent’s giving of notice of resignation or the Required Lenders’

 

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removal of the retiring Agent, then the retiring Agent may, on behalf of the Lender Parties, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States or of any State thereof and having a combined capital and surplus of at least $250,000,000.  Upon the acceptance of any appointment as Agent hereunder by a successor Agent and, in the case of a successor Collateral Agent, upon the execution and filing or recording of such financing statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Required Lenders may request, in order to continue the perfection of the Liens granted or purported to be granted by the Collateral Documents, such successor Agent shall succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under the Loan Documents.  If within 45 days after written notice is given of the retiring Agent’s resignation or removal under this Section 7.06 no successor Agent shall have been appointed and shall have accepted such appointment, then on such 45th day (a) the retiring Agent’s resignation or removal shall become effective, (b) the retiring Agent shall thereupon be discharged from its duties and obligations under the Loan Documents (except in the case of any collateral security held by any Agent on behalf of the Secured Parties under any of the Loan Documents, the retiring Agent shall continue to hold such collateral security until such time as a successor Agent is appointed) and (c) the Required Lenders shall thereafter perform all duties of the retiring Agent under the Loan Documents until such time, if any, as the Required Lenders appoint a successor Agent as provided above.  After any retiring Agent’s resignation or removal hereunder as Agent shall have become effective, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.

 

Section 7.07.                             The Joint Lead Arrangers, the Syndication Agents and the Documentation Agents.  It is understood and agreed by all parties hereto that neither the Joint Lead Arrangers, nor any Syndication Agent, nor any Documentation Agent shall have any duties or responsibilities under this Agreement (except, as to the Joint Lead Arrangers, for certain approval rights expressly provided for herein), and shall have no liability for any actions taken or not taken in connection with this Agreement or the other Transaction Documents.

 

ARTICLE VIII

 

MISCELLANEOUS

 

Section 8.01.                             Amendments, Etc.  No amendment or waiver of any provision of this Agreement or the Notes or any other Loan Document, nor consent to any departure by any Loan Party therefrom, shall in any event be effective unless the same shall be in writing and signed (or, in the case of the Collateral Documents, consented to) by the Required Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that (a) no amendment, waiver or consent shall, unless in writing and signed by all of the Lenders, do any of the following at any time:  (i) decrease the percentage of (x) the Commitments, (y) the aggregate unpaid principal amount of the Advances or (z) the aggregate Available Amount of outstanding Letters of Credit that, in each case, shall be required for the Lenders or any of them to take any action hereunder, (ii) reduce or limit the obligations of any Guarantor under Section 1 of the Guaranty issued by it or, except in connection with a permitted asset sale, release such Guarantor or otherwise limit

 

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such Guarantor’s liability with respect to the Obligations owing to the Agents and the Lender Parties, in each case if such reduction, release or limitation is in respect of all or substantially all of the value of the Guaranties, (iii) release all or substantially all of the Collateral in any transaction or series of related transactions, (iv) amend Section 2.13 or this Section 8.01 and (b) no amendment, waiver or consent shall, unless in writing and signed by each Lender that has a Commitment under the Revolving Credit Facility if such Lender is directly affected by such amendment, waiver or consent, (i) increase the Commitments of such Lender, (ii) reduce the principal of, or interest on, the Notes held by such Lender or any fees or other amounts payable hereunder to such Lender, (iii) postpone any date fixed for any scheduled payment of principal of, or interest on, the Notes held by such Lender or any fees or other amounts payable hereunder to such Lender, (iv) change the order of application of any prepayment set forth in Section 2.06 in any manner that materially affects such Lender or (v) amend Section 1.05 or the definition of “Alternative Currency”; provided further that no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Bank or an Issuing Bank, as the case may be, in addition to the Lenders required above to take such action, affect the rights or obligations of the Swing Line Bank or of such Issuing Bank, as the case may be, under this Agreement; and provided  further that no amendment, waiver or consent shall, unless in writing and signed by an Agent in addition to the Lenders required above to take such action, affect the rights or duties of such Agent under this Agreement or the other Loan Documents.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Defaulting Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

 

Section 8.02.                             Notices, Etc.  (a)  All notices and other communications provided for hereunder shall be in writing (including facsimile) and mailed, faxed or delivered, if to the Borrower, at its address at 7575 West Jefferson Blvd., Fort Wayne, Indiana 46804, Attention:  Theresa E. Wagler (facsimile 260-969-3587); if to any Initial Lender Party, at its Domestic Lending Office specified opposite its name on Schedule I hereto; if to any other Lender Party, at its Domestic Lending Office specified in the Assignment and Assumption pursuant to which it became a Lender Party; if to the Collateral Agent, at its address at PNC Bank, Three PNC Plaza, 225 Fifth Avenue, Pittsburgh, Pennsylvania 15222, Attention: Susan Dimmick (facsimile 412-762-6484); and if to the Paying Agent, at its address at PNC Firstside Center, 500 First Avenue, P7-PFSC-04-I, Pittsburgh, Pennsylvania 15219, Attention: Gerri Porter (facsimile 412-762-8672) and with respect to notices and/or deliveries pursuant to Section 5.03; or, as to the Borrower or the Paying Agent, at such other address as shall be designated by such party in a written notice to the other parties and, as to each other party, at such other address as shall be designated by such party in a written notice to the Borrower and the Paying Agent.  All such notices and other communications shall, when mailed, or faxed, be effective when deposited in the mails, transmitted by facsimile, respectively, except that notices and communications to any Agent pursuant to Article II, III or VII shall not be effective until received by such Agent.  Delivery by facsimile or .pdf of an executed counterpart of any amendment or waiver of any

 

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provision of this Agreement or the Notes or of any Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of an original executed counterpart thereof.

 

(b)                                 Notices and other communications to the Lender Parties hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Paying Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Paying Agent and the applicable Lender.  The Paying Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

 

Section 8.03.                             No Waiver; Remedies.  No failure on the part of any Lender Party or any Agent to exercise, and no delay in exercising, any right hereunder or under any Note or any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.  The remedies provided in the Loan Documents are cumulative and not exclusive of any remedies provided by law.

 

Section 8.04.                             Costs and Expenses.  (a)  The Borrower agrees to pay on demand (i) all costs and expenses of the Joint Lead Arrangers and, after the Initial Extension of Credit, and except as otherwise provided in this Agreement, also each Agent in connection with the preparation, execution, delivery, administration, modification and amendment of the Loan Documents (including, without limitation, (A) all due diligence, collateral review, syndication, transportation, computer, duplication, appraisal, audit, insurance, consultant, search, filing and recording fees and expenses and (B) the reasonable fees and expenses of counsel for the Joint Lead Arrangers and, after the Initial Extension of Credit, also each Agent with respect thereto, including the reasonable fees and expenses of Shearman & Sterling LLP with respect to advising the Joint Lead Arrangers or such Agent as to its rights and responsibilities, or the perfection, protection or preservation of rights or interests, under the Loan Documents, with respect to negotiations with any Loan Party or with other creditors of any Loan Party or any of its Subsidiaries arising out of any Default or any events or circumstances that may give rise to a Default and with respect to presenting claims in or otherwise participating in or monitoring any bankruptcy, insolvency or other similar proceeding involving creditors’ rights generally and any proceeding ancillary thereto, it being understood and agreed that with respect to the payment of legal fees and expenses, unless and until the circumstances set forth in clause (ii) below shall occur, the Borrower shall only be responsible for the fees and expenses of Shearman & Sterling LLP and any local counsel selected by it in connection with any and all of the foregoing), and (ii) all costs and expenses of each of the Joint Lead Arrangers, each Agent and each Lender Party in connection with the enforcement of and/or the protection of its rights under the Loan Documents and Advances made and Letters of Credit issued hereunder, whether in any action, suit or litigation, or any bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally, or any workout, restructuring or negotiations in respect of the Loan Documents, such Advances or such Letters of Credit (including, without limitation, the reasonable fees and expenses of counsel for each of the Joint Lead Arrangers, the Administrative Agent and each Lender Party with respect thereto).

 

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(b)                                 The Borrower agrees to indemnify, defend and save and hold harmless each of Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, PNC Bank, National Association, PNC Capital Markets LLC, Wells Fargo Bank, National Association and Wells Fargo Securities LLC, each Lender Party and each of their respective Affiliates and their respective partners, officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against, and shall pay on demand, any and all claims, damages, settlement costs, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel (including the allocated cost of internal counsel)) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any actual or prospective claim, investigation, litigation or proceeding or preparation of a defense in connection therewith) (i) the Facilities, the actual or proposed use of the proceeds of the Advances or the Letters of Credit, the Transaction Documents, the performance by the parties hereto of their respective obligations hereunder or thereunder or any of the transactions contemplated thereby or (ii) the actual or alleged presence or release of Hazardous Materials on any property owned or operated by any Loan Party or any of its Subsidiaries or any Environmental Action relating in any way to any Loan Party or any of its Subsidiaries, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct.  In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 8.04(b) applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by any Loan Party, its directors, shareholders or creditors or an Indemnified Party, whether or not any Indemnified Party is otherwise a party thereto and whether or not the Transaction is consummated, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNIFIED PARTY.  The Borrower also agrees not to assert, and hereby waives, any claim against any Lead Arranger, Agent, any Lender Party or any of their Affiliates, or any of their respective partners, officers, directors, employees, agents and advisors, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Facilities, the actual or proposed use of the proceeds of the Advances or the Letters of Credit, the Transaction Documents or any of the transactions contemplated by the Transaction Documents.  No Indemnified Party shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

 

(c)                                  If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by the Borrower to or for the account of a Lender Party other than on the last day of the Interest Period for such Advance, as a result of a payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or 2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or for any other reason, or by an Eligible Assignee to a Lender Party other than on the last day of the Interest Period for such Advance upon an assignment of rights and obligations under this Agreement pursuant to Section 8.07 as a result of a demand by the Borrower pursuant to Section 8.07(a), or if the Borrower fails to make any payment or prepayment of an Advance for which a notice of prepayment has been given or that is otherwise required to be made, whether pursuant to Section 2.04, 2.06 or 6.01 or otherwise, the Borrower shall, upon demand by

 

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such Lender Party (with a copy of such demand to the Paying Agent), pay to the Paying Agent for the account of such Lender Party any amounts required to compensate such Lender Party for any additional losses, costs or expenses that it may incur as a result of such payment or Conversion or such failure to pay or prepay, as the case may be, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender Party to fund or maintain such Advance.

 

(d)                                 If any Loan Party fails to pay when due any costs, expenses or other amounts payable by it under any Loan Document, including, without limitation, fees and expenses of counsel and indemnities, such amount may be paid on behalf of such Loan Party by the Paying Agent or any Lender Party, in its sole discretion.

 

(e)                                  Without prejudice to the survival of any other agreement of any Loan Party hereunder or under any other Loan Document, the agreements and obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section 8.04 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under any of the other Loan Documents.

 

Section 8.05.                             Right of Set-off.  Upon (a) the occurrence and during the continuance of any Event of Default and (b) the making of the request or the granting of the consent specified by Section 6.01 to authorize the Paying Agent to declare the Notes due and payable pursuant to the provisions of Section 6.01, each Agent and each Lender Party and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and otherwise apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Agent, such Lender Party or such Affiliate to or for the credit or the account of the Borrower against any and all of the Obligations of the Borrower now or hereafter existing under the Loan Documents, irrespective of whether such Agent or such Lender Party shall have made any demand under this Agreement or such Note or Notes and although such Obligations may be unmatured; provided, that in the event that any Defaulting Lender shall exercise any such right of set off, (x) all amounts so set off shall be paid over immediately to the Paying Agent for further application in accordance with the provisions of Section 2.15 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Paying Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Paying Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  Each Agent and each Lender Party agrees promptly to notify the Borrower after any such set-off and application; provided,  further, that the failure to give such notice shall not affect the validity of such set-off and application.  The rights of each Agent and each Lender Party and their respective Affiliates under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) that such Agent, such Lender Party and their respective Affiliates may have.

 

Section 8.06.                             Binding Effect.  This Agreement shall become effective when it shall have been executed by the Borrower and each Agent and the Paying Agent shall have been notified by each Initial Lender Party that such Initial Lender Party has executed it and thereafter

 

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shall be binding upon and inure to the benefit of the Borrower, each Agent and each Lender Party and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lender Parties.

 

Section 8.07.                             Assignments and Participations.

 

(a)                                  Each Lender may, and (following a demand by such Lender pursuant to Section 2.10 or 2.12) upon at least five Business Days’ notice to such Lender and the Paying Agent, will assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment or Commitments, the Advances owing to it and the Note or Notes held by it); provided, however, that (i) each such assignment shall be of a uniform, and not a varying, percentage of all rights and obligations under and in respect of one or more Facilities, (ii) except in the case of an assignment to a Person that, immediately prior to such assignment, was a Lender, an Affiliate of any Lender or an Approved Fund of any Lender or an assignment of all of a Lender’s rights and obligations under this Agreement, the aggregate amount of the Commitments being assigned to such Eligible Assignee pursuant to such assignment (determined as of the date of the Assignment and Assumption with respect to such assignment) shall in no event be less than $1,000,000 (or such lesser amount as shall be approved by the Paying Agent and, so long as no Default shall have occurred and be continuing at the time of effectiveness of such assignment, the Borrower), (iii) each such assignment shall be to an Eligible Assignee, and (iv) the parties to each such assignment shall execute and deliver to the Paying Agent, for its acceptance (other than as to assignments to then existing Lenders and/or their Affiliates) and recording in the Register, an Assignment and Assumption, together with any Note or Notes subject to such assignment and together with a processing and recordation fee in the amount of $3,500; provided,  however, that the processing and recordation fee set forth in sub-clause (iv) above shall not be payable (A) with respect to an assignment by any Lender Party to an Affiliate or an Approved Fund of such Lender Party, or (B) with respect to an assignment (x) which is both by and to an existing Lender Party or (y) with a stated effective date occurring prior to the 90th day after the Effective Date hereof.

 

(b)                                 Upon such execution, delivery, acceptance and recording, from and after the effective date specified in such Assignment and Assumption, (i) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Assumption, have the rights and obligations of a Lender or an Issuing Bank, as the case may be, hereunder and (ii) the Lender or an Issuing Bank assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Assumption, relinquish its rights (other than its rights under Sections 2.10, 2.12 and 8.04 to the extent any claim thereunder relates to an event arising prior to such assignment) and be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the remaining portion of an assigning Lender’s or an Issuing Bank’s rights and obligations under this Agreement, such Lender or such Issuing Bank shall cease to be a party hereto).

 

(c)                                  By executing and delivering an Assignment and Assumption, each Lender Party assignor thereunder and each assignee thereunder confirm to and agree with each other and

 

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the other parties thereto and hereto as follows:  (i) other than as provided in such Assignment and Assumption, such assigning Lender Party makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with any Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or document furnished pursuant thereto; (ii) such assigning Lender Party makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under any Loan Document or any other instrument or document furnished pursuant thereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Assumption; (iv) such assignee will, independently and without reliance upon any Agent, such assigning Lender Party or any other Lender Party and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes each Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Loan Documents as are delegated to such Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Lender or an Issuing Bank, as the case may be.

 

(d)                                 The Paying Agent shall maintain at its address referred to in Section 8.02 a copy of each Assignment and Assumption delivered to and accepted by it and a register for the recordation of the names and addresses of the Lender Parties and the Commitment under each Facility of, and principal amount of the Advances owing under each Facility to, each Lender Party from time to time (the “Register”).  In addition, the Paying Agent shall maintain on the Register information regarding the designation, and revocation of designation, of any Lender as a Defaulting Lender.  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower, the Agents and the Lender Parties may treat each Person whose name is recorded in the Register as a Lender Party hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower or any Agent or any Lender Party at any reasonable time and from time to time upon reasonable prior notice.

 

(e)                                  Upon its receipt of an Assignment and Assumption executed by an assigning Lender Party and an assignee, together with any Note or Notes subject to such assignment, the Paying Agent shall, if such Assignment and Assumption has been completed and is in substantially the form of Exhibit C hereto, (i) accept such Assignment and Assumption, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to the Borrower and each other Agent.  In the case of any assignment by a Lender, within five Business Days after its receipt of such notice, the Borrower, at its own expense, shall execute and deliver to the Paying Agent in exchange for the surrendered Note or Notes a new Note to the order of such Eligible Assignee in an amount equal to the Commitment assumed by it under each Facility pursuant to such Assignment and Assumption and, if any assigning Lender has retained

 

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a Commitment hereunder under such Facility, a new Note to the order of such assigning Lender in an amount equal to the Commitment retained by it hereunder.  Such new Note or Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Note or Notes, shall be dated the effective date of such Assignment and Assumption and shall otherwise be in substantially the form of Exhibit A hereto.

 

(f)                                    Each Issuing Bank may assign to an Eligible Assignee all or a portion of its rights and obligations under the undrawn portion of its Letter of Credit Commitment at any time; provided,  however, that each such assignment shall be to an Eligible Assignee and the parties to each such assignment shall execute and deliver to the Paying Agent, for its acceptance and recording in the Register, an Assignment and Assumption.

 

(g)                                 Each Lender Party may sell participations to one or more Persons (other than a natural person, a Defaulting Lender or any Loan Party or any of Affiliates thereof) in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitments, the Advances owing to it and the Note or Notes (if any) held by it); provided,  however, that (i) such Lender Party’s obligations under this Agreement (including, without limitation, its Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Lender Party shall remain the holder of any such Note for all purposes of this Agreement, (iv) the Borrower, the Agents and the other Lender Parties shall continue to deal solely and directly with such Lender Party in connection with such Lender Party’s rights and obligations under this Agreement and (v) no participant under any such participation shall have any right to approve any amendment or waiver of any provision of any Loan Document, or any consent to any departure by any Loan Party therefrom, except to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, postpone any date fixed for any payment of principal of, or interest on, the Notes or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, or release all or substantially all of the Collateral.

 

(h)                                 Any Lender Party may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 8.07, disclose to the assignee or participant or proposed assignee or participant any information relating to the Borrower furnished to such Lender Party by or on behalf of the Borrower; provided,  however, that, prior to any such disclosure, the assignee or participant or proposed assignee or participant shall agree to preserve the confidentiality of any Confidential Information received by it from such Lender Party.

 

(i)                                     Notwithstanding any other provision set forth in this Agreement, any Lender Party may at any time create a security interest in all or any portion of its rights under this Agreement (including, without limitation, the Advances owing to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System.

 

(j)                                     No such assignment shall be made (A) to the Borrower or any of the Borrower’s Affiliates or Subsidiaries, or (B) to any Defaulting Lender or any of its Subsidiaries,

 

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or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B), or (C) to a natural person.

 

(k)                                  In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Paying Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Paying Agent, the applicable pro rata share of Advances previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Paying Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Advances and purchases of Letters of Credit Advances and Swing Line Advances in accordance with its Pro Rata Share.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

Section 8.08.                             Replacement of Lenders.  If any Lender (a) requests compensation under Section 2.10, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.12, or if any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 8.07), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment) or (b) has failed to consent to a proposed amendment, waiver, discharge or termination which pursuant to the terms of Section 8.01 requires the consent of all of the Lenders affected and with respect to which the Required Lenders shall have granted their consent (such Lender, a “Non-Consenting Lender”), then the Borrower shall have the right (unless such Non-Consenting Lender grants such consent) at its sole expense to replace such Non-Consenting Lender by deeming such Non-Consenting Lender to have assigned its Loans, and its Commitments hereunder to one or more assignees; in each case, provided that:

 

(a)                                  the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 8.07(a);

 

(b)                                 such Lender shall have received payment of an amount equal to 100% of the outstanding principal of its Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

 

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(c)                                  in the case of any such assignment resulting from a claim for compensation under Section 2.10 or payments required to be made pursuant to Section 2.12 (i) in the event that as of any date, more than one Lender shall have an outstanding request for any such compensation, the Borrower shall not require an assignment by any one Lender requesting such compensation at such time without also requiring an assignment by all such Lenders, (ii), such assignment will result in a reduction in such compensation or payments thereafter;

 

(d)                                 in the case of any assignment resulting from the existence of a Non-Consenting Lender, any such assignee shall consent, at the time of such assignment, to the matters in respect of which such Non-Consenting Lender failed to consent; and

 

(e)                                  such assignment does not conflict with applicable laws.

 

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

Section 8.09.                             Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile or .pdf shall be effective as delivery of an original executed counterpart of this Agreement.

 

Section 8.10.                             No Liability of the Issuing Banks.  The Borrower assumes all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letter of Credit.  Neither the Agents, the Lenders nor any Issuing Bank nor any of their respective officers or directors shall be liable or responsible for:  (a) the use that may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by such Issuing Bank against presentation of documents that do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit; (d) any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), or any error in interpretation of technical terms therein; or (e) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit, except that the Borrower shall have a claim against such Issuing Bank, and such Issuing Bank shall be liable to the Borrower, to the extent of any direct, but not consequential, damages suffered by the Borrower that the Borrower proves were caused by (i) such Issuing Bank’s willful misconduct or gross negligence as determined in a final, non-appealable judgment by a court of competent jurisdiction in determining whether documents presented under any Letter of Credit comply with the terms of the Letter of Credit or (ii) such Issuing Bank’s willful failure to make lawful payment under a Letter of Credit after the presentation to it of a draft and certificates strictly complying with the terms and conditions of the Letter of Credit.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that,

 

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with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, such Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

 

Section 8.11.                             Confidentiality.  Each Agent and each Lender Party shall hold all information supplied by the Borrower or any of its Subsidiaries that is marked confidential (the “Confidential Information”) confidential in accordance with its customary practices for handling confidential information, provided that, in any event, disclosure may be made without the consent of the Borrower, (a) to such Agent’s or such Lender Party’s Affiliates and their officers, directors, employees, agents and advisors and to actual or prospective Eligible 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 such Lender Party or any of its Affiliates, (d) to any rating agency when required by it, provided that, prior to any such disclosure, such rating agency shall undertake to preserve the confidentiality of any Confidential Information relating to the Loan Parties received by it from such Lender Party, (e) on a confidential basis to swap counterparties in connection with hedging transactions entered into by a Lender Party with respect to a Loan Party or any of obligations of a Loan Party and (f) as may be reasonably necessary in connection with the enforcement of the rights and remedies of the Lender Parties under the Loan Documents.

 

Section 8.12.                             Release of Collateral.  Upon the sale, lease, transfer or other disposition of any item of Collateral of any Loan Party (including, without limitation, as a result of the sale, in accordance with the terms of the Loan Documents, of the Loan Party that owns such Collateral) in accordance with the terms of the Loan Documents, the Collateral Agent will, and the Lender Parties hereby authorize the Collateral Agent to, all at the Borrower’s expense, execute and deliver to such Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents in accordance with the terms of the Loan Documents.

 

Section 8.13.                             Jurisdiction, Etc.  (a)  Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any of the other Loan Documents to which it is a party, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the fullest extent permitted by law, in such Federal court.  The Borrower hereby agrees that service of process in any such action or proceeding brought in any such New York state court or in such federal court may be made upon CT Corporation System or other nationally recognized process agent (the “Process Agent”) to be designated by the Borrower from time to time by written notice to the Administrative Agent and the Borrower hereby irrevocably appoints such Process Agent its authorized agent to accept such

 

107

 

service of process, and agrees that the failure of such Process Agent to give any notice of any such service shall not impair or affect the validity of such service or of any judgment rendered in any action or proceeding based thereon.  The Borrower hereby further irrevocably consents to the service of process in any action or proceeding in such courts by the mailing thereof by any parties hereto by registered or certified mail, postage prepaid, to the Borrower at its address specified pursuant to Section 8.02.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or any of the other Loan Documents in the courts of any jurisdiction.

 

(b)                                 Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any of the other Loan Documents to which it is a party in any New York State or Federal court.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

Section 8.14.                             Governing Law.  Each Loan Document (other than the Letters of Credit, to the extent specified below and except as otherwise expressly set forth in a Loan Document) will each be deemed to be a contract made under and governed by the laws of the State of New York (including for such purpose Sections 5-1407 and 5-1402 of the General Obligations Law of the State of New York).  Each Letter of Credit shall be governed by, and construed in accordance with, the laws or rules designated in such Letter of Credit or the related Letter of Credit Agreement, or if no laws or rules are designated, the International Standby Practices (ISP98 — International Chamber of Commerce Publication Number 590 (the “ISP  Rules”)) and, as to matters not governed by the ISP Rules, the internal laws of the State of New York.  The Loan Documents constitute the entire understanding among the parties hereto with respect to the subject matter thereof and supersede any prior agreements, written or oral, with respect thereto.

 

Section 8.15.                             Reallocation and Assignment of Existing Facility.  The credit extensions and commitments made by the Existing Lenders and outstanding pursuant to the Existing Credit Agreement and not refinanced in connection with the Refinancing, shall be assigned without recourse and re-allocated among the Lenders so that, and credit extensions and commitments shall be made by the Lenders pursuant to this Agreement so that, from and after the Effective Date, the respective commitments and credit extensions of the Lenders shall be in accordance with Schedule I.  Credit extensions made by Existing Lenders and not so assigned shall, effective as of the Effective Date, be evidenced and governed by this Agreement and the Loan Documents.

 

Section 8.16.                             Effect of this Agreement.  This Agreement amends and restates the Existing Credit Agreement in its entirety and is entitled to the benefit of all existing Loan Documents.  Any reference in any other Loan Document to the “Credit Agreement,” “thereunder,” “therein,” “thereof” or words of like import referring to the Existing Credit Agreement shall mean and refer to this Agreement.  Any reference in any other Loan Document

 

108

 

to the “Obligations” or any similar term including or referencing obligations under the Existing Credit Agreement shall include and reference the Obligations as defined in this Agreement.  All Obligations under the Existing Credit Agreement and the other Loan Documents shall continue to be outstanding except as expressly modified by this Agreement and shall be governed in all respects by this Agreement and the other Loan Documents, it being agreed and understood by the parties hereto that this Agreement does not constitute a novation, satisfaction, payment or reborrowing of any Obligation under the Existing Credit Agreement or any other Loan Document except as expressly modified by this Agreement, nor, except as expressly provided herein, does it operate as a waiver of any right, power or remedy of any Lender under any Loan Document.  The security interests granted pursuant to any Loan Documents shall, as modified hereby, continue in full force and effect, and are hereby affirmed, with respect to this Agreement and the Obligations as defined herein.  In the event of a conflict between the terms and provisions of this Agreement and the terms and provisions of any other Loan Document, the terms and provisions of this Agreement shall govern.

 

Section 8.17.                             No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees that: (i) (A) the arranging and other services regarding this Agreement severally provided by the Administrative Agent, the Joint Lead Arrangers and the Lenders are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, the Joint Lead Arrangers and the Lenders (severally), on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent, the Joint Lead Arrangers and the Lenders each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) neither the Administrative Agent, nor the Joint Lead Arrangers nor any Lender has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the Joint Lead Arrangers and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and neither the Administrative Agent nor the Joint Lead Arrangers nor any Lender has any obligation to disclose any of such interests to the Borrower or its Affiliates.  To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against any of the Administrative Agent, the Joint Lead Arrangers or any Lender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

Section 8.18.                             Patriot Act Notice.  Each Lender hereby notifies each Loan Party that, pursuant to the requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56 (the “Patriot Act”), it is required to obtain, verify and record information that identifies each Loan Party, which information includes names and addresses and other information that will allow it to identify each Loan Party in accordance with the Patriot Act.

 

109

 

Section 8.19                            Waiver of Jury Trial.  Each of the Borrower, the Agents and the Lender Parties irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to any of the Loan Documents, the Advances, the Letters of Credit or the actions of any Agent or any Lender Party in the negotiation, administration, performance or enforcement thereof.

 

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

 

	
 
    	
STEEL DYNAMICS, INC. 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Theresa E. Wagler
    
	
 
    	
 
    	
Title:  Executive Vice President
    
	
 
    	
 
    
	
 
    	
PNC BANK, NATIONAL ASSOCIATION,
    
	
 
    	
as   Administrative Agent, Collateral Agent, Initial Issuing Bank, Swing Line Bank   and a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Susan J. Dimmick
    
	
 
    	
 
    	
Title:  Senior Vice President
    
	
 
    	
 
    
	
 
    	
BANK OF AMERICA, N.A.,
    
	
 
    	
as a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  David McCauley
    
	
 
    	
 
    	
Title:  Director
    
	
 
    	
 
    
	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION,
    
	
 
    	
as a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Rosalie C. Hawley
    
	
 
    	
 
    	
Title:  Vice President  
    

 

[Signature Page]

 

 

	
 
    	
DEUTSCHE    BANK AG NEW YORK BRANCH,
    
	
 
    	
as   a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Marcus M. Tarkington
    
	
 
    	
 
    	
Title:  Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Michael Getz
    
	
 
    	
 
    	
Title:  Vice President  
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JPMORGAN   CHASE BANK, N.A.,
    
	
 
    	
as   a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Gitanjali Pundir
    
	
 
    	
 
    	
Title:  Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BMO   HARRIS FINANCING, INC.,
    
	
 
    	
as   a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Thad D. Rasche
    
	
 
    	
 
    	
Title:  Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
FIFTH   THIRD BANK,
    
	
 
    	
as   a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Mike Gifford
    
	
 
    	
 
    	
Title:  Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
RBS   CITIZENS, N.A.,
    
	
 
    	
as   a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  André A. Nazareth
    
	
 
    	
 
    	
Title:  Senior Vice President
    

 

[Signature Page]

 

 

	
 
    	
SUNTRUST   BANK,
    
	
 
    	
as   a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  David Simpson
    
	
 
    	
 
    	
Title:  Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MORGAN   STANLEY BANK, N.A., 
    
	
 
    	
as   a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Sherrese Clarke
    
	
 
    	
 
    	
Title:  Authorized Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
U.S.   BANK NATIONAL ASSOCIATION,
    
	
 
    	
as   a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Karen Meyer
    
	
 
    	
 
    	
Title:  Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GOLDMAN   SACHS BANK USA,
    
	
 
    	
as   a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Mark Walton 
    
	
 
    	
 
    	
Title:  Authorized Signatory  
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE   NORTHERN TRUST COMPANY,
    
	
 
    	
as   a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Michael Fornal 
    
	
 
    	
 
    	
Title:  Vice President    
    

 

2

 

	
 
    	
FIRST   COMMONWELTH BANK,
    
	
 
    	
as   a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Brian J. Sohocki 
    
	
 
    	
 
    	
Title:  Vice President    
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
HUA   NAN COMMERCIAL BANK, LTD.
   NEW YORK AGENCY,
    
	
 
    	
as   a Lender 
    
	
 
    	
 
    
	
 
    	
By
    	
/S/
    
	
 
    	
 
    	
Name:  Henry Hsieh 
    
	
 
    	
 
    	
Title:  Assistant Vice President    
    

 

3

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