Exhibit 4.60
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: )
)
ANC RENTAL CORPORATION, et al., ) CHAPTER 11
)
) CASE NO. 01-11200(MFW)
) (JOINTLY ADMINISTERED)
DEBTORS )
SECOND ORDER AUTHORIZING DEBTORS TO
(A) LEASE AUTOMOBILES AND (B) PROVIDE PROTECTION
IN CONNECTION WITH MASTER LEASE AGREEMENTS
Upon the Motion1 of the above-captioned debtors and debtors in
possession (collectively, the "Debtors")2 for entry of an order (the "ORDER"):
(i) authorizing certain of the Debtors to lease certain additional vehicles, and
(ii) authorizing the Debtors to assume and provide certain protections in
connection with Existing Master Lease Agreements (as defined below);
And a final hearing (the "FINAL HEARING") on the Motion having
been held on May 10, 2002;
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1 Capitalized terms not defined herein shall have the meaning ascribed to them
in the corresponding motion.
2 The Debtors are the following entities: ANC Rental Corporation, Alamo
International Sales, Inc., Alamo Rent-A-Car Management, LP, Alamo
Rent-A-Car, LLC, ANC Aviation, Inc., ANC Collector Corporation, ANC
Financial Corporation, ANC Financial GP Corporation, ANC Financial
Properties LLC, ANC Financial, LP, ANC-GP, Inc., ANC Information Technology,
Inc., ANC Information Technology Holding Inc., ANC Information Technology,
L.P., ANC IT Collector Corporation, ANC Management Services Corporation, ANC
Management Services, LP, ANC Payroll Administration, LLC, ANC-TM Management
LP, ARC-GP, Inc., AR-TM, Inc., ARC-TM Properties LLC, ARG Reservation
Services, LLC, ARI Fleet Services, Inc., Auto Rental Inc., Car Rental
Claims, Inc., Claims Management Center, Inc., Guy Salmon USA, Inc.,
Liability Management Companies Holding, Inc., National Car Rental Licensing,
Inc., National Car Rental System, Inc., NCR Affiliate Servicer Properties
LLC, NCR Affiliate Servicer, Inc., NCRAS Management, LP, NCRAS-GP, Inc.,
NCRS Insurance Agency, Inc., Post Retirement Liability Management, Inc.,
Rental Liability Management Holdings, LLC, Rental Liability Management,
Inc., Republic Fiduciary, Inc., Republic Guy Salmon Partner, Inc., Spirit
Leasing, Inc., Spirit Rent-A-Car, Inc., SRAC Management, LP, SRAC-GP, Inc.,
and SRAC-TM, Inc.
And upon all the pleadings filed with this Court and all
proceedings had before this Court, and after due deliberation and consideration,
and good and sufficient cause appearing therefore;
THE COURT HEREBY FINDS AS FOLLOWS:
1. Notice of the Motion was appropriate and sufficient under the
circumstances and no other notice need be given.
2. This Court has jurisdiction over the Debtors' bankruptcy cases (the
"CASES") pursuant to 28 U.S.C.ss.ss.157 and 1334. This is a core proceeding
under 28 U.S.C.ss.157(b)(2).
3. On November 13, 2001 (the "FILING DATE"), each of the Debtors filed
with this Court a voluntary petition for relief under chapter 11 of the United
States Bankruptcy Code (the "BANKRUPTCY CODE"). Concurrently therewith, the
Debtors filed a motion seeking joint administration and consolidation of the
Debtors' chapter 11 cases for procedural purposes only. Pursuant to sections1107
and 1008 of the Bankruptcy Code, the Debtors are continuing to operate their
businesses and manage their properties as debtors-in possession.
4. Prior to the Filing Date, certain of the Debtors, as lessees,
entered into three (3) Amended and Restated Master Motor Vehicle Lease and
Servicing Agreements, each dated as of June 30, 2000 (the "EXISTING MASTER LEASE
AGREEMENTS"). The three Debtors, each of whom is a party to one of the Existing
Master Lease Agreements are: National Car Rental System, Inc.; Alamo Rent-A-Car,
LLC; and Spirit Rent-A-Car, Inc. d/b/a Alamo, each in their capacity as lessee
(individually and collectively, the "LESSEE OPERATING COMPANIES"), and the
Debtor ANC Rental Corporation ("ANC"), as guarantor of the obligations of the
Lessee Operating Companies and also as servicer. The lessors pursuant to the
Existing Master Lease Agreements are the
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following non-debtor entities: Alamo Financing L.P.; National Car Rental
Financing Limited Partnership; and CarTemps Financing L.P. (individually and
collectively, the "LESSOR SPES"), each of whom is party to one (1) of the
Existing Master Lease Agreements. The Lessor SPEs assigned their rights in
connection with the Existing Master Lease Agreements to Bank of New York, as
Trustee (the "LESSOR SPE TRUSTEE") and to Citibank, NA, as Master Collateral
Agent (the "EXISTING MASTER COLLATERAL AGENT"). MBIA Insurance Corporation
("MBIA") is an intended beneficiary of the trusts maintained by the Lessor SPE
Trustee and of the collateral held by the Existing Master Collateral Agent. The
Existing Master Lease Agreements, as they pertain to "ACQUIRED VEHICLES" (as
defined in the Existing Master Lease Agreements), are unexpired leases entitled
to the benefits and protections of Section 365 of the Bankruptcy Code (11 U.S.C.
ss.ss.101, et. seq.) and are not leases intended as security under Article 9 of
the applicable Uniform Commercial Code. The Court has previously found, as a
matter of fact and law, and hereby confirms as to the vehicles to be leased in
connection with this Order and the proceeds thereof, that the assets of the
Lessor SPEs, the Lessor SPE Trustee, and ARG Funding Corp., Bank of New York, as
Trustee in connection with ARG Funding Corp. (the "ARG TRUSTEE"), and Citibank,
N.A. as Master Collateral Agent, relating to the vehicles purchased, financed or
refinanced with proceeds obtained directly or indirectly from ARG Funding Corp.,
exclusive of Financed Vehicles (as defined in the Existing Master Lease
Agreement), and proceeds thereof (together, the "SPE ASSETS") are not property
of the Debtors' estates under the Bankruptcy Code and are not subject to the
jurisdiction of this Court in connection with these cases.
5. This Court, by its Order Authorizing Debtors to (A) Lease
Automobiles, and (B) Provide Protection in Connection with Master Lease
Agreements, dated February 6, 2002, (the
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"FIRST LEASE ORDER"), granted each of the Lessee Operating Companies
authorization to enter into New Master Lease Agreements (individually and
collectively, the "NEW MASTER LEASE AGREEMENTS") and other appropriate
agreements in connection therewith (collectively, the " FIRST NEW VEHICLES
TRANSACTION") to lease new vehicles (the "NEW VEHICLES"), and authorization to
provide and confirm certain protections pertaining to Acquired Vehicles leased,
as of the Filing Date, pursuant to the Existing Master Lease Agreements (the
"EXISTING VEHICLES"). The Debtors thereafter entered into New Master Lease
Agreements and other documents in connection with the First New Vehicles
Transaction pursuant to their authorization according to the terms and
provisions of the First Lease Order.
6. The Debtors presently seek authority to: (i) lease additional New
Vehicles pursuant to the New Master Lease Agreements, (ii) to assume Existing
Master Lease Agreements, and (iii) and to provide certain other protections and
benefits in connection with the Acquired Vehicles and the Existing Master Lease
Agreements and the New Master Lease Agreements, and related agreements, all on
the terms described in the Term Sheet (the "TERM SHEET") attached to the Motion
(together, the "SECOND NEW VEHICLES TRANSACTION").
7. Good cause has been shown for the entry of this Order. Authorization
and empowerment to consummate the Second New Vehicles Transaction will
materially enhance the Debtors' ability to serve their customers and conduct
their business operations. The Second New Vehicles Transaction is supported by
good business reasons, is reasonable and appropriate under the circumstances,
and will aid an effective reorganization. The Second New Vehicles Transaction
has been negotiated and entered into in good faith.
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THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
8. The relief requested in the Motion is granted, and the relief
requested therein hereby is approved, in accordance with the provisions of this
Order set forth below.
9. The Debtors are authorized and empowered to enter into the Second
New Vehicles Transaction and to execute and deliver such documents, perform such
agreements, and take such other actions consistent with this Order and the Term
Sheet as are necessary to effectuate the terms of this Order and the Second New
Vehicles Transaction. Upon execution and delivery of the documents necessary to
effectuate the Second New Vehicles Transaction (the "NEW DOCUMENTS"), the New
Documents and all related documents (including amendments thereto)
(collectively, the "SECOND NEW VEHICLES TRANSACTION DOCUMENTS") shall constitute
valid and binding obligations of the Debtors party thereto, enforceable against
each of the Debtors party thereto in accordance with their terms and applicable
law, without regard to the provisions of Bankruptcy Code sections 362 or other
applicable provisions of the Bankruptcy Code (but subject to paragraph 17 herein
with respect to lease termination and with respect to foreclosure upon the New
Collateral (as described below) granted pursuant to this Order), and shall give
rise, without further order of the Court, with respect to obligations provided
in the Second New Vehicles Transaction Documents, to liens and security
interests in (i) all rights, if any, of each Debtor in or relating to any
vehicles purchased, financed or refinanced with proceeds obtained from a
Financing Source (as defined in the Master Collateral Agency Agreement) (the
"Vehicles") and all rights, if any, of each Debtor in each Manufacturer Program
(as defined in the Master Collateral Agency Agreement) associated with such
Vehicles and (ii) all rights,
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if any, of each Debtor in or relating to the funds and investments held in the
Cash Collateral Account (the "MBIA Cash Collateral Account") described on page 3
of the Term Sheet attached to the Motion, as more particularly described in the
Second New Vehicles Transaction Documents (together, the "NEW COLLATERAL"),
which liens and security interests in such property, to the extent that they
relate to property of the Debtors, shall be senior in priority to all other
liens and security interests. In connection therewith, without limitation, (a)
the Debtors are authorized and directed to fully and timely comply with all of
the terms of the Second New Vehicles Transaction Documents, including, without
limitation, to timely pay all rent and other amounts due in accordance with the
terms of the Second New Vehicles Transaction Documents, (b) the Debtors are
authorized and directed to grant a first priority senior lien in accordance with
Bankruptcy Code section 364(d)(1) to the Master Collateral Agent for the benefit
of the ARG Trustee on behalf of the ARG Trustee on behalf of the holders of the
Notes issued by ARG Funding Corp. insured by MBIA, and to MBIA, in accordance
with Bankruptcy Code section 364(d)(1) senior to the rights, interests and liens
of any other person, in the MBIA Cash Collateral, plus interest thereon, and in
the New Collateral, as security in connection with the First New Vehicles
Transaction and the Second New Vehicles Transaction upon terms set forth in the
Second New Vehicles Transaction Documents and described in the Term Sheet
attached to the Motion, and (c) the Second New Vehicles Transaction Documents,
and the obligations undertaken by the Debtors in connection with the New
Vehicles Transaction, shall be and remain fully enforceable in accordance with
their terms, and not subject to modification, impairment or limitation,
notwithstanding, without limitation, any rejection of any of the Existing Master
Lease Agreements pursuant to section 365 of the Bankruptcy Code, any relief
obtained under
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365(d)(10) of the Bankruptcy Code, or any other provision of the Bankruptcy
Code. All prior liens in the New Collateral shall remain in effect subordinate
to the liens granted pursuant to this Order.
10. All of the obligations of the Debtors pursuant to the First New
Vehicles Transaction and the Second New Vehicles Transaction (together, the "NEW
VEHICLE CLAIMS") shall be allowed super-priority administrative expenses
pursuant to 507(a)(1) and (b) of the Bankruptcy Code with priority, except with
respect to Liberty Mutual Insurance Company ("Liberty") and "DIP Financing" as
provided in the succeeding sentence, over any and all other administrative
expenses under sections 507(a)(1) and (b) of the Bankruptcy Code, and the New
Vehicle Claims shall be subordinate only to the carve-out (the "Carve-Out")
provided for: (i) the unpaid fees of the clerk of the Bankruptcy Court and of
the United States Trustee pursuant to 28 U.S.C. ss. 1930(a) and (b), and (ii)
the aggregate allowed unpaid fees and expenses which are payable under Sections
330 and 331 of the Bankruptcy Code to professional persons retained pursuant to
an order of the Court by the Debtors, the Creditors' Committee and any other
statutory committee appointed herein, in an amount not to exceed $2,500,000 in
the aggregate. The Debtors shall under no circumstances seek to provide, and no
order shall be entered granting, any entity or person a super-priority equal to
or senior to the super-priority granted herein (with the sole exception of
priority super-priority administrative claims provided to Liberty pursuant to
the Order of this Court, dated March 13, 2002 (the "LIBERTY ORDER"), and the
Summary of Terms and Conditions attached to such Order (the "LIBERTY TERM
SHEET"), (the "LIBERTY CLAIMS") and super-priority claims granted in connection
with "DIP Financing", as described in Section 2, paragraph 3 of the Liberty Term
Sheet, (the "DIP CLAIMS") which
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super-priority Liberty Claims and DIP Claims shall be equal in priority to, but
not senior to, the New Vehicle Claims.
11. In addition to the foregoing, the Debtors are authorized and
directed, and do , assume pursuant to section 365 of the Bankruptcy Code,
effective upon the first disbursement of monies pursuant to Second New Vehicles
Transaction and shall fully and timely comply, in all respects, except as noted
below with respect to "Excluded Cure Items" (as hereinafter defined), with the
terms of each Existing Master Lease Agreement as such Existing Master Lease
Agreements pertains to Acquired Vehicles. Without limitation, except as to
Excluded Cure Items, to the extent the Existing Master Lease Agreements pertain
to Acquired Vehicles rather than Financed Vehicles, the Debtors are authorized
and directed to: (i) timely pay, in full, in cash, all Rent (as defined in the
Existing Master Lease Agreements) and all other amounts due pursuant to the
Existing Master Lease Agreements, (ii) ensure that all amounts representing the
proceeds of sales of "Program Vehicles" (as defined in the Existing Master Lease
Agreements) and "Non-Program Vehicles" (as defined in the Existing Master Lease
Agreements) (including amounts paid by a manufacturer as a result of the sale of
any such vehicle) are remitted by the payor, or if mistakenly received by the
Debtor then immediately tendered by such Debtors in kind, to the Lessor SPE
Trustee (as defined herein) or the Existing Master Collateral Agent, as
applicable, and (iii) use reasonable best efforts to ensure that each Acquired
Vehicle that is a Program Vehicle, as of the Filing Date, is returned to the
relevant Manufacturer (as defined in the Existing Master Lease Agreements)
within the "Repurchase Period" (as defined in the Existing Master Lease
Agreements); provided, however, the foregoing shall not require the Debtors to
immediately cure the following Existing Master Lease Agreement items (the
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"EXCLUDED CURE ITEMS"): (a) unpaid monthly Rent (as defined in the Existing
Master Service Agreements) which was due prior to January 1, 2002 (the "YEAR
2001 RENT"), (b) the part of Rent under each Existing Master Lease Agreement
that is comprised of that portion of the Monthly Variable Rent (as defined in
the Existing Master Lease Agreements) described in subclauses (III) and (IV) of
the definition of Monthly Variable Rent payable after an Event of Bankruptcy (as
defined in the Existing Master Lease Agreements) with respect to any Lessee
Operating Company or ANC (the "SPECIFIC EXCLUDED RENT" and together with the
Year 2001 Rent, the "DEFERRED RENT PAYMENTS"), (c) a default occurring prior to
January 18, 2002, which has been made known in writing by the Debtors to MBIA
prior to January 18, 2002, or (d) a default arising under the Existing Master
Lease Agreements by the filing of the bankruptcy petitions commencing these
cases (items (c) and (d) of this paragraph being referred to hereinafter as
"EXCLUDED DEFAULTS").
12. The Debtors shall cure the Excluded Cure Items as follows: (i) the
Excluded Defaults listed in subparagraph (c) of paragraph 11 (other than
defaults constituting non-payment of Deferred Rent), (ii) the Excluded Defaults,
if any, referenced in subparagraph (d) of paragraph 11 shall be cured on the
occurrence of the earlier of an "Emergence Event" (as hereinafter defined in the
Term Sheet) or the conversion of the cases of any of the ANC or Lessee Operating
Companies Debtors to a case under chapter 7 (together the "EMERGENCE DATE"), and
(iii) the Deferred Rent Payments shall be cured as follows: (a) in the event
that, prior to occurrence of an Emergence Date, substantially all the collateral
held by the Master Collateral Agent and the ARG Trustee on behalf of MBIA
supported financings is liquidated and is insufficient to satisfy both (I) all
the obligations owed by ARG Funding in connection with the MBIA insured notes,
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and (II) any and all premiums, fees, and any and all other obligations owed to
MBIA by any of the Debtors or ARG Funding, (together the "MBIA RELATED CLAIMS")
then MBIA or the SPE Lessors, as applicable, shall be entitled to be immediately
paid an additional super-priority administrative expense claim in the amount of
the lesser of (x) the amount of such shortfall and (y) the amount of Deferred
Rent Payments; or (b) in the event that, prior to occurrence of an Emergence
Date, substantially all the collateral held by the Existing Master Collateral
Agent and the ARG Trustee on behalf of MBIA supported financings is not
liquidated, then MBIA or the SPE Lessors, as applicable, shall, (I) in
connection with, and as a condition precedent to, any plan of reorganization
pertaining to the Debtors or consummation of the sale or other disposition of
the business assets of Alamo or National, be entitled to assurance, in form and
substance reasonably satisfactory to MBIA, of payment of the Deferred Rent
Payments, to the extent such payment is necessary to ensure that the MBIA
Related Claims will be paid in full, or (II) in connection with the dismissal of
the Debtors chapter 11 proceedings or the conversion of the Debtors chapter 11
proceedings to a chapter 7 proceeding, to be immediately paid the Deferred Rent
Payments. Except as provided in this paragraph, all other defaults, if any,
shall be cured in connection with the assumption of the Existing Master Lease
Agreements as such agreements pertain to Acquired Vehicles.
13. The Debtors waive any and all rights they may have to seek any
relief from their obligation to (i) timely remit Rent (other than the Deferred
Rent Payments) and (ii) fully comply with the terms and provisions of the
Existing Master Lease Agreements, and the First New Vehicles Transaction
Documents and the Second New Vehicles Transaction Documents (together, the
"TRANSACTION DOCUMENTS"), and no such relief shall be granted to the Debtors.
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None of the Transaction Documents shall be assignable by the Debtors without the
written consent of MBIA.
14. Nothing herein shall prejudice or impair any rights or remedies of
the Lessor SPE Trustee, the Existing Master Collateral Agent, MBIA, or any other
non-Debtor person in connection with the Existing Master Lease Agreements and
any of the Acquired Vehicles, and to seek any other relief, and nothing herein
shall prejudice or impair the right of any of the Enforcement Parties (as
hereinafter defined) to assert claims with or without priority in these cases,
and all of such rights and remedies are expressly reserved and preserved to the
Enforcement Parties. To the extent any portion of the Specific Excluded Rent is
determined to be an allowed claim such allowed claim shall have the same
priority, without further order of the court, as the New Vehicles Claims.
15. The authorization and ability of the Debtors to enter into the New
Vehicles Transaction and to execute and deliver the New Documents granted herein
is without prejudice to, and subject to, any contractual rights of Ambac
Assurance Corporation ("AMBAC") in connection with the New Documents, including,
without limitation, any consent rights to Ambac to the extent such New Documents
require Ambac's consent, and any rights Ambac may have to the extent the New
Documents contravene, conflict or are inconsistent with Ambac's rights pursuant
to the terms of the Pre-Petition Documents.
16. The Series 2001-3 Notes issued by ARG Funding Corp. are not subject
to the jurisdiction of this Court and nothing in this Order is intended to, or
shall, determine that the Series 2001-3 Notes are not entitled to pro rata
payment in accordance with the Pre-Petition Documents.
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17. If any of the following circumstances or events occur: (i) the
Debtors fail to timely remit, or cause to be remitted, monies, including,
without limitation, any of Rent, proceeds from the disposition of Vehicles, and
remittances to the MBIA Cash Collateral Account on a Determination Date (as
referenced in the Term Sheet), as required pursuant to the Transaction
Documents, and such failure continues for two (2) business days, (ii) any of
General Motors, Chrysler or Toyota Motor Sales USA purport to withdraw from the
"Manufacturer Programs" (as defined in the Transactions Documents) with respect
to the Vehicles that are subject to such Manufacturer Programs, as evidenced by
the related manufacturer's notation on the invoices for such Vehicles, or any of
such manufacturers assert that the such programs are generally no longer
enforceable against them with respect to the Vehicles that are subject to such
Manufacturer Programs, as evidenced by the related manufacturer's notation on
the invoices for such Vehicles, and the Debtors have failed within 45 days after
such purported withdrawal or assertion is made to obtain a court determination
(including, without limitation, a preliminary injunction) that such programs
remain generally enforceable against such manufacturer, and (iii) ANC fails to
comply with the provisions of the Transaction Documents requiring ANC to
maintain certificates of title in the location, and with the security,
protection and MBIA review requirements, set forth in the Transaction Documents
or at other location or with such other security and protection as is acceptable
to MBIA, and such circumstance continues for five (5) business days (items (i),
(ii) and (iii), the "MATERIAL DEFAULTS") then any of the Lessor SPE Trustee, the
Existing Master Collateral Agent, The Bank of New York, as trustee under the
Base Indenture, dated as of February 26, 1999, between ARG Funding Corp and The
Bank of New York (the "ARG TRUSTEE"), any other master collateral agent or
trustee serving under the New
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Vehicles Transaction Documents or MBIA (any such party, an "ENFORCEMENT PARTY")
may file an affidavit of the occurrence of a Material Default with this Court
and serve the same on counsel to the Debtors and counsel to each of Liberty,
Congress, Lehman and the Official Creditors Committee. Five (5) business days
after the filing and service of such affidavit, if such Material Default has not
been cured, then without the need for obtaining a further order of this Court or
giving further notice in this case, (a) the automatic stay under section 362 of
the Bankruptcy Code shall be lifted and modified, to the extent applicable, to
allow any and all Enforcement Parties to pursue their rights and remedies in
connection with the Transaction Documents in and respect to any and all Vehicles
and related assets, certificates of title and other documents, and collateral,
including the New Collateral, (together, the "SUBJECT ASSETS"), and (b) the
Enforcement Parties shall be entitled to, and the Debtors shall assist in
providing the requesting Enforcement Parties, immediate possession of any and
all of the Subject Assets. Any of the Enforcement Parties and the Debtors shall
also be entitled to an emergency court hearing on the merits within no later
than five (5) days after the filing and service on counsel to the Debtors and
MBIA and counsel to each of Liberty, Congress, Lehman and the Official Creditors
Committee, of any motion by the Enforcement Parties to enforce or exercise any
rights and remedies with respect to this Order or in respect of the Subject
Assets, or for determination that a Material Default exists, or of any motion by
the Debtors relating to the Enforcement Parties enforcing or exercising rights
and remedies with respect to this Order or in respect of the Subject Assets or
for a determination that a Material Default does not exist. The Enforcement
Parties shall also be entitled to an expedited hearing and remedies upon no more
that (5) days notice in the event of a default other than a Material Default.
MBIA shall have standing as a party-in-interest to appear,
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be heard, and to enforce rights and remedies on its own application, relating to
any of the Subject Assets and the Transaction Documents. Nothing herein will
restrict the right of the Debtors, Liberty, the Creditors' Committee or any
secured creditor of the Debtors from seeking injunctive relief or other relief,
or from otherwise being entitled to oppose, and to be heard, in connection with
any action being taken by the Enforcement Parties.
18. In the event of any inconsistency between the terms of this Order
and any document, including without limitation the Term Sheet, relating to the
relief granted pursuant to this Order, the terms of this Order shall control.
Notwithstanding anything in this Order or the Term Sheet to the contrary, entry
of this Order shall constitute a finding and decree of this Court that:
(a) (I) the liens and interests in the property of the Debtors of the
Lessor SPEs, the Lessor SPE Trustee, ARG Funding Corp., the ARG Trustee, the
Master Collateral Agent, and MBIA (together, the "MBIA Parties"), as otherwise
provided for in this Order and the Second New Vehicles Transaction Documents do
not extend to, and nothing herein shall disclaim or limit the liens or interests
that Liberty may have in: (i) the Pre-Petition Liberty Cash Collateral (as
defined in the Liberty Term Sheet), (ii) the Liberty Post-Petition Cash
Collateral (as defined in the Liberty Term Sheet), (iii) any cash which Liberty
receives or would be entitled to receive pursuant to the Debtors' replenishment
obligations set forth in Section 2, subparagraph, 1.d.ii and 1.d.iii of the
Liberty Term Sheet (hereinafter, the "Cash Replenishment Amounts"), and (iv) the
Corporate Collateral and the Finance Company Equity Interests, as such terms are
defined in the Collateral Agreement, dated as of August 30, 2001, among ANC,
Wilmington Trust
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Company, Liberty and Lehman Commercial Paper Inc. and (y) any other collateral
granted to Liberty pursuant to the Liberty Order.
(II) (x) in the event that, after entry of this Order, the balance of
the MBIA Cash Collateral Account is increased by at least $34.5 million, the
Debtors shall be obligated to accelerate the next two payments to Liberty in
respect of their Collateral Replenishment Obligations (as defined in the Liberty
Order), in an amount not to exceed $4 million.
(y) to the extent that the Debtors have, at any time, both (i)
the obligation to deposit cash into the MBIA Cash Collateral Account and (ii)
Collateral Replenishment Obligations to Liberty, the Debtors shall first satisfy
the Collateral Replenishment Obligations to Liberty.
(b) (i) the liens and interests of Liberty do not extend to and nothing
herein shall disclaim or limit the liens or interests of the SPE Parties with
respect to, (A) the Vehicles (as referenced in paragraph 12 of the Liberty
Order), including, without limitation, the Existing Vehicles, the New Vehicles,
and the vehicles leased pursuant to the Second New Vehicles Transaction
Documents and the proceeds, including insurance proceeds, thereof, PROVIDED that
to the extent, under certain circumstances, Liberty may have an interest as
pledgee of the Finance Company Equity Interest in rights of distribution, such
interests shall be subordinate to the rights of MBIA, (B) the rights, if any, of
the Debtors in each Manufacturer Program (as referenced in paragraph 12 of the
Liberty Order) associated with such Vehicles, and (ii) any liens or interests
Liberty may have or assert in the MBIA Cash Collateral Account are subordinate
to the rights and interests of MBIA and the ARG Trustee in the MBIA Cash
Collateral Account, including the Cash Collateral Account referenced in
paragraph 12 of the Liberty Order;
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(c) Liberty's senior liens in any cash held by Liberty constituting the
Liberty Post-Petition Cash Collateral, the Pre-Petition Liberty Cash Collateral
and any Cash Replenishment Amounts shall include any interest earned thereon;
(d) Liberty and MBIA reserves all rights granted to them in the Liberty
Order and their prepetition agreements, except to the extent specifically
modified by this Order;
(e) Liberty is deemed to have reserved, and in no way waived, any and
all rights, interests, defenses or remedies under or in connection with surety
bonds issued by Liberty, including without limitation, those which arise under
contract, statute or by operation of law, by virtue of equitable lien, equitable
subrogation or otherwise, including without limitation, any rights which may be
asserted in the above-captioned bankruptcy proceedings.
19. Counsel to the Debtors shall promptly provide each of counsel to
the Official Creditors Committee, Liberty, Lehman, and Congress with written
notice, by facsimile transmission, at such time as the Transaction Documents are
completed and executed. Each of the Official Creditors Committee, Liberty,
Lehman, and Congress shall, upon written request, be provided copies by the
Debtors of such Transaction Documents as such entity requests.
20. The provisions of this Order shall be binding on the Debtors and
their respective estates, successors, assigns and representatives (including
without limitation any trustee hereinafter appointed as representative of the
estate or any of the Debtors, or any other representative who qualifies in a
case under the Bankruptcy Code or in connection with any other similar state or
federal proceeding). The terms and conditions of this Order and the agreements
referenced herein and any actions taken pursuant thereto shall survive the
filing of any subsequent case or proceedings for any of the Debtors or the entry
of any order in the case of
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any of the Debtors confirming the consensual plan or any other plan of
reorganization, dismissing any such case, converting any such case to any other
chapter under the Bankruptcy Code, withdrawing the reference of any such case
from this Court or abstaining from handling any such case.
21. This Order is a final order after a Final Hearing on notice the
parties set forth on the service list. This Order shall be is binding in its
entirety on the Debtors, creditors and all other parties in interest and none of
the provisions of this Order shall be modified or amended without the written
consent of MBIA.
22. The Court hereby retains non-exclusive jurisdiction to enforce the
provisions of and findings contained in this Order, and to determine any
disputes arising in connection with the execution, delivery and performance of
the documents executed in connection with the New Vehicles Transaction and the
Lessor Protections.
23. The notice given by the Debtors of the Motion and of the Final
Hearing constitutes due and sufficient notice of the Motion and of the Final
Hearing. Any and all other and further notice of the relief requested in this
Order shall be, and hereby is, dispensed with and waived.
24. The provisions of this Order shall supplement, and not supersede,
benefits and protections granted to any of the Enforcement Parties pursuant to
the First Lease Order.
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25. This Order shall constitute findings of fact and conclusions of law
and shall take effect and be fully enforceable upon all parties in interest for
all purposes immediately upon execution thereof.
Dated: Wilmington, Delaware
May 10, 2002
/s/ Mary F. Walrath
-----------------------------------------
HONORABLE MARY F. WALRATH
UNITED STATES BANKRUPTCY JUDGE
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FOR DISCUSSION PURPOSES ONLY
TERM SHEET
RELEASE OF COLLECTIONS: Subject to the terms and conditions contained herein,
MBIA shall consent to an amendment permitting the
release of funds (the "Released Funds") from the
Series 1999-1 Collection Account, the Series 1999-3
Collection Account, the Series 2000-4 Collection
Account and the Series 2001-2 Collection Account on a
revolving basis during the period from the Phase II
Closing Date (as defined below) to the later of (i)
September 1, 2002, or (ii) if the term has been
extended in accordance with the conditions set forth
under the section entitled "Agreement Extension"
below, November 1, 2002 (the "Extension Date") in an
amount such that the outstanding principal balance of
the Group II Notes shall not exceed $2,300,000,000
(the "Maximum Amount") at any time. The Released
Funds will be used by ARG to increase the principal
amount of the Group II Notes for the sole benefit of
the Series 1999-1 Notes, Series 1999-3 Notes, Series
2000-4 Notes and Series 2001-2 Notes (the "MBIA
Notes") and the funds received by the Leasing
Companies pursuant to such increases shall be used to
fund the acquisition of "Qualifying Vehicles" as
hereinafter defined.
"Qualifying Vehicle" means a vehicle (i) that is to
be subject to a Group II Operating Lease only and
(ii) that, if subject to any manufacturer program, is
under either the existing MY2002 program with that
manufacturer or a MY2003 program with the same terms
and conditions as the existing MY2002 program with
that manufacturer or a program with terms and
conditions that are more favorable to the Leasing
Companies as determined by MBIA in its sole
discretion. "Group II Vehicles" means Qualifying
Vehicles that are subject to a Group II Operating
Lease. No Group II Vehicle shall be considered
subject to a manufacturer program until MBIA has
acknowledged in writing (a) its acceptance of the
terms of the "Collateral Assignment of Rights" with
respect to the applicable repurchase program for the
related model year, from the assignor to Citibank,
N.A., as Master Collateral Agent, and (b) its
determination that the repurchase program satisfies
the condition in (ii) of this paragraph.
The acquisition of Qualifying Vehicles with the
Released Funds (the "Phase II Vehicles") will also be
subject to compliance with the following criteria on
the [first] and [fifteenth] day (each, a
"Determination Date") of each month:
(a) (i) With respect to each Determination
Date that occurs prior to July1, 2002, at least 76.5%
of the Vehicle Pool (as defined below) shall be
Vehicles that are eligible under, and subject to, an
Eligible Manufacturer Program and (ii) with respect
to each Determination Date that occurs after June 30,
2002, at least 79% of the Vehicle Pool shall be
Vehicles that are eligible under, and subject to, an
Eligible Manufacturer Program;
(b) (i) With respect to each Determination
Date that occurs prior to July 1, 2002, no more than
18% of the Vehicle Pool shall be Vehicles that are
not subject to any manufacturer repurchase program
and (ii) with respect to each Determination Date that
occurs after June 30, 2003, no more than 15% of the
Vehicle Pool shall be Vehicles that are not subject
to any manufacturer repurchase program; and
(c) (i) With respect to each Determination
Date, no more than [50]% of the Vehicles in the
Vehicle Pool shall be Vehicles under the GM Matrix
Program, provided that GMC shall have restated
Section 6 of each Consent to the Assignment of
Repurchase Rights as described under "Conditions
Precedent."
"Vehicle Pool" means, collectively, the Group I
Vehicles and the Group II Vehicles. For the purposes
of (a), (b), and (c) above, percentages of Vehicles
will be based on their updated net book value as of
the applicable Determination Date. Likewise, all
other defined terms used in connection with the
documentation implementing this term sheet that
include Net Book Value shall use the foregoing
updated net book value as of the most recent
Determination Date.
MBIA may retain Deloitte & Touche or another
independent firm to test from time to time (a) ANC's
compliance with the above restrictions and (b) that
Phase II Vehicles are eligible under and subject to
manufacturer programs to the extent represented by
ANC. ANC shall cooperate fully with any such testing.
2
AMORTIZATION PAYMENTS: The ARG Indenture shall be amended to
reflect that ARG shall make a $216,666,666.67
principal payment (the "Amortization Payment") on the
Class A-1 and Class A-2 1999-1 MBIA Notes on June 20,
2002.
INCREMENTAL ENHANCEMENT: On each Determination Date, ANC shall deposit
directly into the Cash Collateral Account, an amount
of cash necessary to cause the Available Enhancement
(as defined below) to at least equal the Required
Enhancement. The Required Enhancement as of any
Determination Date is an amount equal to (a) for each
Determination Date before July 1, 2002, 12% of the
Invested Amount of the MBIA Notes as of such date and
(b) for each Determination Date after June 30, 2002,
13% of the Invested Amount of the MBIA Notes as of
such date. The cash in the Cash Collateral Account
representing the incremental enhancement amount will
be available to MBIA for monies owed to it under the
Insurance Agreements with respect to the MBIA Notes
and other amounts due to MBIA. These arrangements
shall supersede all prior agreements between MBIA and
ANC as to the Cash Collateral Account.
"Available Enhancement" shall be the following
amount:
(a) Funds in the Cash Collateral Account after giving
effect to the deposits made by ANC per the prior
paragraph, PLUS
(b) The balance in the Series Reserve Accounts for
the MBIA Notes, PLUS
(c) The balance in the Series Collection Accounts for
the MBIA Notes, PLUS
(d) 93.72% of the Group I Operating Lease Asset
Amount, PLUS
(e) 100% of the Group II Operating Lease Asset
Amount, MINUS
(f) The Invested Amount of the MBIA Notes.
For purposes of calculation of the Available
Enhancement, the definition of Operating Lease Asset
Amount shall be modified from the definition
currently in the ARG Documents, to the extent
necessary to measure accurately the available
fleet-related assets as of each Determination Date.
3
FEES: (a) In addition to the Surety Provider Fees and
the amounts payable to MBIA under the
Supplemental Fee Letter with respect to the
outstanding MBIA Notes set forth in the
existing documentation, MBIA shall receive
on each Distribution Date occurring on or
after the Phase II Closing Date (as defined
herein), the product of (A) .0068 divided by
12, and (B) the Net Book Value of the Phase
II Vehicles, for so long as such Phase II
Vehicles are subject to a Group II Operating
Lease.
(b) MBIA will receive an upfront fee in an
amount equal to $1,000,000 payable on the
first date any portion of the Maximum Amount
is released to ARG. In addition, MBIA will
receive the following fees: (i) a fee in the
amount of $1,000,000 if the Released Funds
exceed $1,000,000,000, (ii) an additional
fee of $500,000 if the Released Funds exceed
$2,000,000,000 and (iii) an additional fee
of $500,000 if the Released Funds exceed
$3,000,000,000.
The facility is a revolving facility,
therefore the aggregate amount of Released
Funds may exceed $2.3 billion,
notwithstanding the Maximum Amount of $2.3
billion, and every amount released from a
Series Collection Account for the MBIA
Notes to fund an Increase on a Group II
Note shall be counted as Released Funds.
(c) To the extent the term of this agreement is
extended to the Extension Date, then on
September 1, 2002, MBIA shall receive a fee
in an amount equal to $1,500,000.
(d) In addition to the administrative fee of
$400,000 payable on May 13, 2002, MBIA will
receive an administrative fee in the amount
of $1,600,000, payable as follows: (a)
$400,000 on the day after the Final Order
(as defined below) is entered PLUS (b)
$400,000 on each of June 13, 2002, July 12,
2002 and August 13, 2002. If the term is
extended to the Extension Date, MBIA will
receive an additional administrative fee in
the amount of $800,000, payable as follows:
$400,000 on each of September 13, 2002 and
October 11, 2002.
4
(e) MBIA will receive a fee in an amount not to
exceed $12,500,000 from the assets of ARG,
contingent, and payable, upon the
consummation of either a plan of
reorganization and/or a sale respecting the
Debtors which allows a substantial portion
of the business of the Debtors to continue
to operate as a going concern (whether under
ANC or a successor entity including, without
limitation, a buyer). Such fee shall be
earned as follows: (i) $5,000,000 if the
term of this, or a modified, agreement
provides for the continued release of funds
from the Collection Accounts until the
Extension Date; (ii) $5,000,000 if MBIA
agrees to allow the continued release of
funds from the Collection Accounts for the
MBIA Notes until the earlier of (I) the
occurrence of an Emergence Event and (II)
May 1, 2003; and, in addition, (iii)
$2,500,000 if MBIA agrees to allow the
continued release of funds from the
Collection Accounts for the MBIA Notes until
an Emergence Event. An "Emergence Event" is
the earliest to occur of (i) the effective
date of any plan of reorganization
pertaining to Alamo or National as a Debtor,
(ii) consummation of the sale or other
disposition of the business assets of Alamo
or National, and (iii) the dismissal of the
Debtors' Chapter 11 proceeding with respect
to Alamo or National.
(f) The Debtors shall provide MBIA a full and
fair opportunity to provide financing to the
Debtors in the event that the Debtors seek
additional financing at any time hereafter.
Except as described herein with respect to the
release of funds prior to September 1, 2002, and
under the heading "Agreement Extension," with respect
to the release of funds until the Extension Date,
nothing contained in any of the documents
effectuating this Term Sheet shall constitute an
offer or a commitment by, or impose any obligation or
duty upon, MBIA to provide or to offer to provide
financing (including, without limitation, MBIA's
continued release of funds from the ARG Collection
Accounts) to ANC and the other Debtors.
REMITTANCE PROCEDURES: ANC shall take such actions as are necessary, in the
sole discretion of MBIA from time to time, to ensure
that all amounts that are to be paid pursuant to the
provisions of the
5
Leases, the Group II Leases, the Master Collateral
Agency Agreement or any other basic transaction
document are paid directly to the required party and
are not paid to any account controlled by any of the
Debtors (unless the Debtor is the required party), or
from which the Debtors have the ability to withdraw
funds (other than in the capacity of Servicer or
Master Servicer).
INFORMATION: The Debtors shall timely comply with all reasonable
information requests made by MBIA (including, without
limitation, with respect to ANC's operations and the
status of its M&A process) and also shall promptly
disclose to MBIA the specifics of any and all efforts
by the Debtors to obtain financing to purchase or
lease vehicles from other sources and any and all
indications of interest by any other person or entity
to provide any such financing.
PHASE II CLOSING DATE: The date that all of the Conditions Precedent to the
initial release of Released Funds shall have been
satisfied.
CONDITIONS PRECEDENT TO
INITIAL RELEASE OF
FUNDS: The initial release of any portion of the Maximum
Amount to ARG shall be subject to the satisfaction
(or the waiver in writing by MBIA) of the following
conditions:
(a) All documentation relating to the
transactions contemplated hereunder shall be
in form and substance satisfactory to MBIA,
in its sole discretion, and Bank of New York
as Trustee under the ARG Indentures and the
Related Documents shall have executed and
delivered such documentation to which it is
requested to be a party. Such documentation
will not waive any Amortization Event.
(b) All consents and approvals necessary in
connection with the transactions
contemplated hereunder shall have been
obtained (without the imposition of any
conditions that are not acceptable to MBIA).
(c) At ANC's expense, all necessary parties
shall have executed appropriate amendments
to the documents relating to the Group I
Vehicles and the Group II Vehicles which
provide for (i) certain rights and remedies
in the event that the Servicer fails or
refuses to perform its obligations under
such documents and (ii) the Controlling
Party, at its
6
option, to act in place of the Servicer (1)
to provide any calculations required to make
any payments under any document relating to
the Group I Vehicles or the Group II
Vehicles, (2) to direct the collection and
flow of funds in accordance with any
document relating to the Group I Vehicles or
the Group II Vehicles, and (3) take any
action permissible under any document
relating to the Group I Vehicles or the
Group II Vehicles relating to or in
furtherance of the safekeeping, maintenance,
sale, collection and transport for sale or
turn in, and administration and enforcement
of any manufacturer's program with respect
to any of the Group I Vehicles or the Group
II Vehicles. The Controlling Party, insofar
as any of the foregoing relate only to
Vehicles that are Related Vehicles to one or
more Financing Sources that are related
solely to MBIA Notes, is MBIA or a party
designated by MBIA that is not a direct
competitor of ANC, and in any other case is
the party designated under the Intercreditor
Agreement. An Intercreditor Agreement (which
may be a part of the Master Collateral
Agency Agreement) satisfactory to MBIA shall
have been entered into by all existing
Financing Sources and Beneficiaries, and all
further parties that become Financing
Sources or Beneficiaries must be required to
agree to the Intercreditor Agreement as a
condition to becoming a Financing Source or
Beneficiary.
(d) All fees and expenses required to be paid to
MBIA on or before the date when all other
Conditions Precedent have been satisfied
shall have been paid.
(e) The Debtors shall assume, pursuant to
section 365 of the Bankruptcy Code, the
Existing Master Lease Agreements, to the
extent pertaining to Acquired Vehicles
existing as of the Petition Date; provided,
however, that the defaults arising from
non-payment of (1) monthly Rent (as defined
in the relevant Existing Master Lease
Agreement) which is due prior to January 1,
2002 and (2) the part of Rent under each
Existing Master Lease Agreement that is
comprised of that portion of the Monthly
Variable Rent (as defined in the relevant
Existing Master Lease Agreement) described
in subclauses (III) and (IV) of the
definition of Monthly Variable
7
Rent payable after an Event of Bankruptcy
(as defined in the relevant Existing Master
Lease Agreement) with respect to any Lessee
Operating Company or ANC ((1) and (2)
together, the "Specified Rent") will be
cured, to the extent necessary (as provided
herein), by the Debtors in one of the
following two ways:
(i) In the event that, prior to earlier
to occur of an Emergence Event and
the conversion of the Debtors'
Chapter 11 proceeding to a Chapter
7 proceeding (the earlier, the
"Proceeding Windup"), substantially
all the Collateral held on behalf
of MBIA supported financings is
liquidated and proves to be
insufficient to satisfy both (I)
all the obligations owed by ARG
Funding in connection with the MBIA
insured notes, and (II) any and all
premiums, fees, and any and all
other obligations owed to MBIA by
any of the Debtors or ARG Funding,
(together the "MBIA Related
Claims") then MBIA or the SPE
Lessors, as applicable, shall be
entitled to be immediately paid an
additional super-priority
administrative expense claim in the
amount of the lesser of (x) the
amount of such shortfall and (y)
the amount of Specified Rent; or
(ii) In the event that, prior to
occurrence of a Proceeding Windup,
substantially all the Collateral
held on behalf of MBIA supported
financings is not liquidated, then
MBIA or the SPE Lessors, as
applicable, shall, (I) in
connection with, and as a condition
precedent to, any plan of
reorganization pertaining to the
Debtors or consummation of the sale
or other disposition of the
business assets of Alamo or
National, be entitled to assurance,
in form and substance reasonably
satisfactory to MBIA, of payment of
the Specified Rent, to the extent
such payment is necessary to ensure
that the MBIA Related Claims will
be paid in full, or (ii) in
connection with a Proceeding Windup
constituting the dismissal of the
Debtors chapter 11
8
proceedings or the conversion of
the Debtors chapter 11 proceedings
to a Chapter 7 proceeding, to be
immediately paid the Specified
Rent.
(f) A final court order shall have been approved
by the Bankruptcy Court, in form and
substance satisfactory to MBIA (the "Final
Order"), confirming, INTER ALIA, that (i)
the obligations of the Debtors (including,
without limitation, the obligations as
Lessees and ANC's obligations as Servicer)
incurred under the Group II Related
Documents and the other documents necessary
to effectuate the purchase of the Phase II
Vehicles with the Released Funds (including
obligations under existing documentation to
the extent applicable to such purchase)
(collectively, the "Phase II Vehicles
Transaction Documents") shall not be subject
to rejection, and the Debtors will timely
comply in all respects with the terms of the
Phase II Vehicles Transaction Documents in
all respects (including, without limitation,
payment of rent, compliance with the
manufacturers programs and compliance with
all agreements relating to the Master
Collateral Account), (ii) the Debtors will
timely comply in all respects with the terms
of the existing Master Leases in all
respects (including, without limitation,
payment of rent, compliance with the
manufacturers programs and compliance with
all agreements relating to the Master
Collateral Account) as such existing Master
Leases relate to Acquired Vehicles other
than Group II Vehicles to the extent such
obligations arise on or prior to August 30,
2002 (and if the term of this agreement is
extended to the Extension Date, to the
extent such obligations arise on or prior to
October 30, 2002), other than the payment of
rent due on November 20, 2001 and December
20, 2001 and certain components of the
rental payment set forth in the final order,
(iii) the Trustee and MBIA shall be entitled
to expedited remedies in the event of any
new default by the Debtors, (iv) the order
is without prejudice to other rights and
remedies of MBIA and the Trustee, (v) that
the Trustee and the Lessor SPVs and related
parties shall have a superpriority
administrative claim equal in priority to
the superpriority administrative claim
provided to
9
Liberty, (vi) that the Trustee, the Master
Collateral Agent, and MBIA shall have rights
to exercise remedies with respect to both
Group I Vehicles and Group II Vehicles and
related collateral in the event of default
without regard to the automatic stay, and
(vii) that MBIA and related parties shall
have such other additional benefits and
rights as provided them pursuant to prior
orders of the Court.
(g) The Leasing Companies shall increase the
principal amount of the Group II Notes in
exchange for the Released Funds and the
Group II Notes will be secured by a first
priority lien (not shared with AMBAC or the
Liquidity Banks) on the Group II Vehicles
and all other collateral relating to the
Group II Vehicles. The Group II Leasing
Company Related Documents shall be amended
(the "Group II Leasing Company Amendments")
to reflect the foregoing, in form and
substance satisfactory to MBIA.
(h) To the extent requested by MBIA, consent by
AMBAC and the Liquidity Banks (to the extent
applicable) as to the amendments and waivers
required to be made in the Leasing Company
Related Documents relating thereto,
including the provisions necessary to
effectuate paragraphs (c), (f) above and (s)
below.
(i) Weil, Gotshal & Manges shall deliver an
opinion, in form and substance satisfactory
to MBIA, as to transactions contemplated
hereunder including, without limitation,
that the execution and delivery of the ARG
Amendment, the increases of principal under
the Group II Notes and the Group II Leasing
Company Amendments are permitted by the ARG
Indenture and the Related Documents and that
all conditions precedent applicable to ARG
Amendment, the increases of principal under
the Group II Notes and the Group II Leasing
Company Amendments have been satisfied.
(j) ANC shall provide to MBIA (1) an executed
acknowledgment and agreement by Citibank,
N.A., as Master Collateral Agent, with
respect to the cash flow narrative (which
shall be in form and substance satisfactory
to MBIA), (2) executed
10
affirmations by the manufacturers with
respect to the collateral assignments of the
rights under the manufacturer program,
covering all vehicles in the Vehicle Pool
subject to a manufacturer program, and (3)
evidence satisfactory to MBIA that the
auction houses accounting for at least 90%
of ANC's auction proceeds during calendar
2001 have been notifed that they are to pay
all proceeds from the sales of Vehicles
directly to the Master Collateral Account.
(k) ANC shall make arrangements satisfactory to
MBIA for the custody of certificates of
title to Vehicles in the Vehicle Pool.
(l) The provider of the lockboxes in which
titles currently are received directly from
the DMVs shall have established a mechanism
acceptable to MBIA to provide daily
electronic reports on all activity in the
lockboxes.
(m) ANC and a firm selected by MBIA (that shall
not be a rental car company or a competitor
of ANC) shall have established protocols for
a weekly secure FTP transfer from ANC to
such firm of the following two file types of
information:
(i) For every Vehicle under the Group I
Leases and every Vehicle under the
Group II Leases, all of the items
provided to MBIA in the
semi-monthly data files, plus the
following additional fields: trim
package, body style, color, and
city, state and zip of location.
(ii) The weekly vehicle activity report
provided by ANC to MBIA, modified
in a form acceptable to MBIA and
ANC to indicate on a VIN-by-VIN
basis, the cost or net realized
proceeds of all vehicles acquired,
repurchased and sold at auction,
and in the case of vehicles
repurchased or sold at auction, the
location to which ANC delivered the
vehicle.
(n) Citibank shall have agreed to provide MBIA
and a representative selected by MBIA (at
ANC's
11
expense), on a daily basis, an electronic
file that MBIA and its representative may
read directly into their respective computer
systems, identifying all activity in the
Master Collateral Account and the lockboxes
and other accounts that flow up into the
Master Collateral Account, and all cash
movement instructions provided to Citibank
by the Master Servicer.
(o) ANC shall have provided to MBIA copies of
all manufacturer programs, certified true
and complete by the manufacturers, covering
all vehicles in the Vehicle Pool subject to
a manufacturer program.
(p) GMC shall have restated Section 6 of each
Consent to the Assignment of Repurchase
Rights with respect to the GMC repurchase
programs for Alamo and National for model
years 2000-2002, to incorporate GMC's
agreement that in the event of any default
under the Leasing Company Related Documents
or the Group II Leasing Company Related
Documents, the Master Collateral Agent will
have the option to cause the repurchase
price with respect to each such Group II
Vehicle turned back to GMC to be calculated
by either (I) depreciating such vehicle on a
straight line basis at 2.25% per month for
the actual holding period for such vehicle
or (II) applying the repurchase percentage
for such vehicle indicated in the applicable
Fleet Agreement.
(q) ANC shall provide to Gordian Group and MBIA
such supplemental analysis / due diligence
information as it shall from time to time
request expeditiously if the requested
information is readily available to ANC and
within a reasonable period of time if the
requested information is not readily
available to ANC.
(r) An independent firm selected by MBIA shall
have tested (i) the accuracy of ANC's
internal computer records (against
underlying source documents such as
invoices, certificates of title, etc.) as to
various attributes of the Vehicles purchased
by ANC or the Leasing Companies between
February 26, 2002 and March 31, 2002
(including but not limited to the attributes
reported by ANC in the semi-monthly
12
data files), (ii) the accuracy of ANC's
designation of certain Vehicles as subject
to an Eligible Manufacturer Program, and
(iii) such other items as MBIA may
reasonably request, and such firm shall not
have reported any material deviation or
exceptions, in MBIA's sole discretion. ANC
shall cooperate with reasonable additional
testing requested by MBIA (and at MBIA's
expense) during the term of this agreement.
(s) The Master Collateral Agency Agreement shall
have been modified in a manner acceptable to
MBIA, including provisions such that
financing by any other financing sources and
beneficiaries do not impair MBIA's rights
with respect to vehicles financed by MBIA
supported financing, and MBIA's ability to
effect modifications and amendments to
documents related to MBIA supported
financing without seeking the consent of
such other financing sources and
beneficiaries, and provisions related to
notation and confirmation of whom liens
benefit.
(t) A Collateral Assignment for the MY 2003
program, in form and substance satisfactory
to MBIA, shall have been executed and
delivered by each Manufacturer of a Group II
Vehicle that is subject to a MY2003
manufacturer repurchase or guaranteed
depreciation program as of the Phase II
Closing Date.
(u) MBIA shall have received all of the items
due on or before the Phase II Closing Date
in accordance with Schedule I.
(v) The Phase II Closing Date shall have
occurred before May 31, 2002.
(w) ANC shall have demonstrated that they have
established permanent procedures
satisfactory to MBIA for the retention and
appropriate filing of copies of the
applications for certificates of title for
13
all Vehicles that have not yet had a
certificate of title issued for the first
time.
CONDITIONS PRECEDENT TO
ALL RELEASES: As of each date of the Release of Funds, including
the initial date, unless waived in writing by MBIA:
(1) No law, regulation, order, judgment or
decree of any governmental authority shall
exist, and no action, suit, investigation,
litigation or proceeding shall be pending or
threatened in any court or before any
arbitrator or governmental authority which
purports to enjoin, prohibit, restrain or
otherwise affect the consummation of the
transactions contemplated hereby or which
threatens to impose any liability or claims
for damages against MBIA as a result of such
transactions.
(2) ANC and the other Debtors shall be in
compliance with certain financial covenants,
including (a) all "Triggering Events" as
defined in ANC's Cash Collateral Order
(taking into account any extension of the
`Base Budget' contained in such Order after
the expiration of such Base Budget on
9/27/02), and (b) (I) a percentage (mutually
acceptable to MBIA and ANC) of the monthly
and cumulative projections of revenues and
(II) a percentage (mutually acceptable to
MBIA and ANC) of the monthly and cumulative
projections of EBITDAR set forth in ANC
Rental Corporation Restructuring Forecast
dated February 15, 2002. If any party shall
not be in compliance with the EBITDAR
requirement described above, MBIA shall not
request of such party payment of any fees in
connection with MBIA's consideration of or
granting of a waiver or other response to
the noncompliance. However, MBIA is under no
obligation to agree to any waiver.
(3) As of the most recent Determination Date,
the Available Enhancement was at least equal
to the Required Enhancement.
(4) As of the most recent Determination Date,
the Vehicle Pool complied with the
restrictions described under "Qualifying
Vehicles."
14
(5) A firm selected by MBIA shall not have
reported any material errors or
discrepancies in ANC's designation of
certain Vehicles as subject to an Eligible
Manufacturer Program.
(6) All fees and expenses required to be paid to
MBIA shall have been paid.
(7) MBIA shall have received all of the items
required to be delivered as of such date in
accordance with Schedule I.
(8) No material adverse change in (i) the
condition (financial or otherwise),
operations, assets, business, properties,
performance or prospects of Debtors, the
Leasing Companies or ARG, (ii) the ability
of the Debtors, the Leasing Companies or ARG
to perform their respective obligations
under the ARG Indenture, the MBIA/ARG
Supplements, the Leasing Company Indenture,
the Leasing Company Related Documents, the
Group II Leasing Company Indenture, the
Group II Leasing Company Related Documents,
the Leases or the Group II Leases, or (iii)
the ability of MBIA to enforce its rights
under the documents referred to in clause
(ii) above shall have occurred and no fact
relating to ANC, any of the Debtors, any of
the Leasing Companies or ARG that is
materially adverse to MBIA, as Surety
Provider, shall have been disclosed since
January 15, 2002.
(9) The Debtors shall be in full compliance with
all terms and provisions of the Master
Leases and the Group II Leases, including,
without limitation, the payment of the fees
specified in this term sheet and the payment
of all rental payments due and payable under
the Master Leases and the Group II Leases
other than the payments due November 20,
2001 and December 20, 2001 and certain
components of the rental payment set forth
in the final order.
(10) The Debtors shall provide a compliance
certificate together with supporting
documentation in form and substance
satisfactory to MBIA, with respect to the
satisfaction of the conditions precedent as
to the Released Funds.
15
(11) The firm selected by MBIA to receive weekly
transfers of information from ANC shall have
received the agreed upon items according to
the schedule agreed upon with ANC.
(12) On or prior to the first date when funds are
released for the purpose of acquiring MY2003
cars covered under any manufacturer program,
a Collateral Assignment, in form and
substance satisfactory to MBIA, in
connection with the applicable MY2003
Manufacturer Program shall have been
executed and delivered by each such
Manufacturer and ANC shall have provided
such document to MBIA.
(13) On each Distribution Date following the
initial release of funds on or after the
Phase II Closing Date, the Servicer shall
have provided to MBIA, as a supplement to
each monthly Noteholder Statement, such
statements as are necessary to reflect the
transactions contemplated herein.
(14) ANC shall provide to Gordian Group and MBIA
such supplemental analysis / due diligence
information as it shall from time to time
request expeditiously if the requested
information is readily available to ANC and
within a reasonable period of time if the
requested information is not readily
available to ANC.
AGREEMENT EXTENSION: If, on or prior to September 1, 2002, the Debtors
have either (i) a viable business plan that is
satisfactory to MBIA, in its sole discretion, or (ii)
availability of at least $600,000,000 of new
additional financing to lease vehicles in addition to
the vehicles leased in connection with the MBIA
Notes, the term of this agreement shall be extended
to and including November 1, 2002.
M&A PROCESS: ANC shall agree to (i) diligently pursue its M&A
alternatives, (ii) consult with MBIA as to its M&A
strategies and negotiations, and (iii) provide MBIA
full access to the M&A process and to all information
and persons in connection therewith.
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SCHEDULE I
(a) ANC shall deliver to MBIA on the 15th day of each month during the
term of this agreement all ANC modifications/updates to the fleet forecast dated
4/12/02 previously provided to MBIA. All such updates shall include detail on
the composition of inventory, acquisitions and deletions and on the
apportionment of acquisitions, deletions and depreciation between the Leases and
the Group II Leases.
(b) The most recently generated "Monthly Vehicle Statements" referenced
in each Lease and Group II Lease on the 17th of each month.
(c) (i) On the Phase II Closing Date, data Files as of 3/31/2002
containing "Historical Fleet Data, Fleet Depreciation Experience, Vehicle
Disposition History" and other data equivalent in scope and contents to the
files ANC previously has provided to MBIA for earlier periods, entitled "vehicle
exp rat agency," and (ii) on August 1, 2002, equivalent data files current
through 6/30/2002.
(d) On Wednesday of each week, a report for the 7 day period ending on
the preceding Friday, by debtor, manufacturer and lease type (operating vs.
financing), on actual returns of program cars (including auction of cars under
guaranteed depreciation programs), liquidation of risk vehicles and delivery of
new vehicles, indicating (i) as to all "deletes" the Net Book Value as of the
disposal date and the net proceeds realized from disposition of the vehicle and
(ii) as to program vehicle deletes, the amounts deducted from the manufacturer
payment due to excess mileage, excess damage or wear and tear, the late delivery
of title, etc.
(e) On the 17th day of each month, a monthly report indicating the VIN
of all vehicles under the Leases or the Group II Leases that have been totaled,
lost or stolen.
(f) On the 12th and 27th of each month, data file containing the
following information, to the extent ANC currently maintains this information in
electronic format, for every vehicle leased by any of the Leasing Companies and
subject to the Leases or Group II Leases:
Group I Lease or Group II Lease
VIN
The date on which depreciation begins in ANC's computer
systems for purposes of calculating Net Book Value.
For cars under any manufacturer repurchase program, the
applicable manufacturer's or dealer's "In-Service Date" or
date on which depreciation begins for purposes of
calculating the price at which the manufacturer or dealer
will repurchase the vehicle.
The Vehicle Lease Commencement Date, as expressly defined in
the Leases or Group II Leases.
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State in which vehicle is registered.
Manufacturer
Model Year
Invoice Date
Delivery Date.
Model name
Trim Package
Body Style
Color
Applicable Leasing Company (i.e., Car Temps, Alamo or
National).
Titleholder
Lienholder
Capitalized Cost
Current Net Book Value
Current mileage
Current physical location of vehicle (facility/outlet name,
street address, city, state, zip)
Manufacturer Program
For cars in the GMC Matrix program, the Tier #.
For cars in GM Matrix Program, number of days in the
"Designated Period".
If not a "Program Vehicle" per ARG documents, daily
depreciation charge per the applicable "Depreciation
Schedule".
(g) On the 17th day of each month, the following information for every
vehicle leased by any of the Leasing Companies and subject to a financing Lease:
VIN
Net Book Value
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