UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
or
( ) TRANSITION REPORT PURSUANT TO SECTION 12 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 33-80271
ALAMO RENT-A-CAR, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 59-1465528
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) no.)
110 Tower, 110 S.E. 6th Street, Fort Lauderdale, Florida 33301
(Address of principal executive offices)
(zip code)
(954) 522-0000
(Registrant's telephone number, including area code)
SEE TABLE OF CO-REGISTRANTS BELOW.
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
------ -----
As of May 15, 1996, each corporate registrant had
outstanding 980 shares of common stock, par value $0.01 per
share.
<PAGE>
TABLE OF CO-REGISTRANTS(1)
STATE OR OTHER
JURISDICTION OF IRS EMPLOYER
INCORPORATION OR IDENTIFICATION
NAME ORGANIZATION NUMBER
---- ------------- -------
Alamo Rent-A-Car (Belgium), Inc. Florida 65-0489368
Alamo Rent-A-Car (Canada), Inc. Florida 65-0568278
DKBERT Assoc. 59-1946177
Florida
(General
Partnership)
Green Corn, Inc. Florida 59-1694750
Guy Salmon USA, Inc. Florida 65-0200221
Guy Salmon USA, Ltd. Florida 65-0200220
(Limited
Partnership)
Territory Blue, Inc. Florida 65-0579364
Tower Advertising Group, Inc. Florida 65-0163142
(1) Address, including zip code, and 110 Tower
telephone number, including area 110 S.E. 6th Street
code, of principal executive Fort Lauderdale, Florida 33301
offices of Co-Registrants (954) 522-0000
<PAGE>
ALAMO RENT-A-CAR, INC.
TABLE OF CONTENTS
FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 1996
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Combined Condensed Financial Statements:
Combined Condensed Balance Sheets - March 31,
1996 and December 31, 1995 1
Combined Condensed Statements of Operations -
Three Months Ended March 31, 1996 and 1995 2
Combined Condensed Statements of Cash Flows -
Three Months Ended March 31, 1996 and 1995 3
Combining Condensed Financial Statements:
Combining Condensed Balance Sheets - March 31,
1996 and December 31, 1995 4
Combining Condensed Statements of Operations -
Three Months Ended March 31, 1996 and 1995 6
Combining Condensed Statements of Cash Flows -
Three Months Ended March 31, 1996 and 1995 8
Notes to Combined and Combining Condensed
Financial Statements 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 21
PART II OTHER INFORMATION
Item 1. Legal Proceedings 23
Item 2. Changes in Securities 23
Item 3. Defaults upon Senior Securities 23
Item 4. Submission of Matters to a Vote of Security
Holders 23
Item 5. Other Information 23
Item 6. Exhibits and Reports on Form 8-K 23
<PAGE>
<TABLE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
COMBINED CONDENSED BALANCE SHEETS
(Dollar amounts in thousands)
<CAPTION>
March 31, December 31,
Assets 1996 1995
------ --------- -----------
(Unaudited) (Audited)
<S> <C> <C>
Cash and cash equivalents $ 19,470 $ 11,446
Investments, at cost 63,852 63,133
Receivables:
Trade, less allowance for doubtful
accounts of $5,550 and $5,214 in
1996 and 1995, respectively 71,660 67,418
Vehicle 52,962 94,408
Notes, mortgages and other due from
uncombined affiliates 560 2,409
Other 21,276 7,775
----------- -----------
146,458 172,010
----------- -----------
Revenue earning vehicles, net 1,864,265 1,478,409
Property and equipment, net 213,391 213,985
Other assets 66,076 61,762
----------- -----------
$ 2,373,512 $ 2,000,745
=========== ===========
Liabilities and Equity
----------------------
Notes payable and lines of credit
secured by revenue earning vehicles $ 1,818,453 $ 1,546,122
Estimated auto liability claims 110,200 112,448
Accounts payable to uncombined
affiliates 1,419 1,677
Accounts payable 123,632 116,374
Other debt 228,499 137,266
Accrued expenses 28,725 11,050
Customer deposits 12,283 9,843
----------- -----------
Total liabilities 2,323,211 1,934,780
----------- -----------
Minority interest (deficiency in
assets) (459) -
Equity:
Common stock 5 5
Additional paid-in capital 9,494 9,494
Retained earnings and partners'
capital 37,491 53,881
Translation adjustment 3,770 2,585
----------- -----------
Total equity 50,760 65,965
----------- -----------
$ 2,373,512 $ 2,000,745
=========== =========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
COMBINED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollar amounts in thousands)
<CAPTION>
Three Months Ended
March 31,
--------------------------
1996 1995
---- ----
<S> <C> <C>
Revenue:
Vehicle rentals $ 323,785 $ 299,727
Interest 1,536 1,602
Revenue from uncombined affiliates 280 -
Other 511 959
--------- ---------
326,112 302,288
--------- ---------
Costs and expenses:
Vehicle depreciation 89,318 86,216
Vehicle interest 26,639 30,037
Vehicle leases 4,424 11,914
Selling, general and administrative 214,186 201,484
Other interest, net of amounts
capitalized of $-0- and $231 at
March 31, 1996 and 1995, respectively
by DKBERT 4,333 2,732
Minority interest in net loss of
consolidated subsidiaries (459) (763)
--------- ---------
338,441 331,620
--------- ---------
Net loss $(12,329) $(29,332)
========= =========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
COMBINED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollar amounts in thousands)
<CAPTION>
Three Months Ended
March 31,
--------------------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities $ 86,752 $ 72,605
-------- --------
Cash flows from investing activities:
Cash received from sale of revenue earning vehicles 427,048 776,704
Cash paid to suppliers of revenue earning vehicles (862,744) (834,820)
(Purchase) sale of investments (719) 1,820
Capital expenditures (5,919) (11,284)
Proceeds from sale of property and equipment 1,292 786
-------- --------
Net cash used in investing activities (441,042) (66,794)
-------- --------
Cash flows from financing activities:
Proceeds from revenue earning vehicle financing 853,848 836,947
Principal payments on revenue earning vehicle
financing (578,466) (833,417)
Proceeds from other debt 101,500 1,465
Principal payments on other debt (10,080) (7,349)
Dividends and distributions (4,308) (5,240)
-------- --------
Net cash provided by (used in)
financing activities 362,494 (7,594)
-------- --------
Effect of exchange rate changes on cash (180) 441
-------- --------
Net increase (decrease) in cash and cash equivalents 8,024 (1,342)
Cash and cash equivalents at beginning of period 11,446 15,698
-------- --------
Cash and cash equivalents at end of period $ 19,470 $ 14,356
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 31,713 $ 23,107
======== ========
Income taxes $ - $ 227
======== ========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
COMBINING CONDENSED BALANCE SHEETS
(Unaudited)
(Dollar amounts in thousands)
March 31, 1996
<CAPTION>
Alamo
GUSA Affiliated
Assets Alamo DKBERT Ltd. Companies Eliminations Combined
------ ----- ------ ---- ---------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash $ 10,146 $ 286 $ 8,153 $ 885 $ - $ 19,470
equivalents
Investments, at cost 63,345 507 - - - 63,852
Receivables:
Trade, less allowance for
doubtful accounts of
$1,525, $-0-, $3,803 and
$222 for Alamo, DKBERT,
GUSA, Ltd., and Alamo
Affiliated Companies,
respectively 50,078 - 20,766 816 - 71,660
Vehicle 41,122 - 11,504 336 - 52,962
Notes, mortgages and other
due from affiliates 51,692 1,817 4,195 4,405 (61,549) 560
Other 20,495 184 352 245 - 21,276
---------- -------- -------- ------- --------- ----------
163,387 2,001 36,817 5,802 (61,549) 146,458
---------- -------- -------- ------- --------- ----------
Revenue earning vehicles,
net 1,712,121 - 145,955 6,189 - 1,864,265
Property and equipment, net 72,717 135,686 3,763 1,225 - 213,391
Other assets 45,555 2,085 18,944 937 (1,445) 66,076
---------- -------- -------- ------- --------- ----------
$2,067,271 $140,565 $213,632 $15,038 $(62,994) $2,373,512
========== ======== ======== ======= ========= ==========
Liabilities and Equity
----------------------
Notes payable and lines of
credit secured by
revenue earning vehicles $1,652,233 $ - $160,054 $ 6,166 $ - $1,818,453
Mortgages and notes payable
to affiliates - 5,716 5,277 27 (11,020) -
Estimated auto liability
claims 108,378 - 1,763 59 - 110,200
Accounts payable to
affiliates 4,738 - 37,800 9,583 (50,702) 1,419
Accounts payable 98,784 988 21,431 3,580 (1,151) 123,632
Other debt 98,400 119,194 10,905 - - 228,499
Accrued expenses 20,540 981 7,032 172 - 28,725
Customer deposits 10,919 1,928 801 117 (1,482) 12,283
---------- -------- -------- ------- --------- ----------
Total liabilities 1,993,992 128,807 245,063 19,704 (64,355) 2,323,211
---------- -------- -------- ------- --------- ----------
Minority interest
(deficiency in assets) - - (339) 155 (275) (459)
Equity:
Common stock 1 - - 4 - 5
Additional paid-in capital 9,568 - - 2,102 (2,176) 9,494
Retained earnings and
partners' capital 63,710 11,758 (34,896) (6,893) 3,812 37,491
Translation adjustment - - 3,804 (34) - 3,770
---------- -------- -------- ------- --------- ----------
Total equity 73,279 11,758 (31,092) (4,821) 1,636 50,760
---------- -------- -------- ------- --------- ----------
$2,067,271 $140,565 $213,632 $15,038 $(62,994) $2,373,512
========== ======== ======== ======= ========= ==========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
COMBINING CONDENSED BALANCE SHEETS
(Audited)
(Dollar amounts in thousands)
December 31, 1995
<CAPTION>
Alamo
GUSA Affiliated
Assets Alamo DKBERT Ltd. Companies Eliminations Combined
------ ----- ------ ---- ---------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash $ 5,987 $ 79 $ 3,777 $ 1,603 $ - $ 11,446
equivalents
Investments, at cost 62,626 507 - - - 63,133
Receivables:
Trade, less allowance for
doubtful accounts of
$1,423, $-0-, $3,692 and
$99 for Alamo, DKBERT,
GUSA Ltd., and Alamo
Affiliated Companies,
respectively
42,004 - 24,770 644 - 67,418
Vehicle 78,619 - 15,494 295 - 94,408
Notes, mortgages and other
due from affiliates 21,960 680 7,128 1,772 (29,131) 2,409
Other 6,586 211 480 498 - 7,775
---------- -------- -------- ------- ---------- ----------
149,169 891 47,872 3,209 (29,131) 172,010
---------- -------- -------- ------- ---------- ----------
Revenue earning vehicles,
net 1,327,572 - 145,541 5,296 - 1,478,409
Property and equipment, net 73,504 134,789 4,487 1,205 - 213,985
Other assets 40,155 2,683 19,458 948 (1,482) 61,762
---------- -------- -------- ------- ---------- ----------
$ 1,659,013 $138,949 $221,135 $12,261 $(30,613) $2,000,745
========== ======== ======== ======= ========== ==========
Liabilities and Equity
----------------------
Notes payable and lines of
credit secured by
revenue earning vehicles $ 1,346,651 $ - $193,936 $ 5,535 $ - $1,546,122
Mortgages and notes payable
to affiliates - 8,815 4,827 16 (13,658) -
Estimated auto liability
claims 110,334 - 2,079 35 - 112,448
Accounts payable to
affiliates 5,354 3,938 1,931 6,977 (16,523) 1,677
Accounts payable 88,302 2,435 23,467 2,203 (33) 116,374
Other debt 8,700 109,128 19,438 - - 137,266
Accrued expenses 8,543 836 1,183 488 - 11,050
Customer deposits 8,446 1,928 808 142 (1,481) 9,843
---------- -------- -------- ------- ---------- ----------
Total liabilities 1,576,330 127,080 247,669 15,396 (31,695) 1,934,780
---------- -------- -------- ------- ---------- ----------
Minority interest - - 119 156 (275) -
Equity:
Common stock 1 - - 4 - 5
Additional paid-in capital 9,568 - - 2,102 (2,176) 9,494
Retained earnings and
partners' capital 73,114 11,869 (29,326) (5,309) 3,533 53,881
Translation adjustment - - 2,673 (88) - 2,585
---------- -------- -------- ------- ---------- ----------
Total equity 82,683 11,869 (26,653) (3,291) 1,357 65,965
---------- -------- -------- ------- ---------- ----------
$1,659,013 $138,949 $221,135 $12,261 $ (30,613) $2,000,745
========== ======== ======== ======= ========== ==========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
COMBINING CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollar amounts in thousands)
<CAPTION>
Three Months Ended March 31, 1996
-------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- ---------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $293,917 $ - $28,825 $ 1,646 $ (603) $ 323,785
Interest 2,305 584 58 3 (1,414) 1,536
Revenue from affiliates - 4,012 986 6,625 (11,343) 280
Other - - 440 71 - 511
--------- -------- -------- -------- ---------- ---------
296,222 4,596 30,309 8,345 (13,360) 326,112
--------- -------- -------- -------- ---------- ---------
Costs and expenses:
Vehicle depreciation 85,335 - 3,633 350 - 89,318
Vehicle interest 24,270 - 2,298 71 - 26,639
Vehicle leases 3,211 - 1,019 194 - 4,424
Selling, general and
administrative 187,547 1,738 28,246 8,719 (12,064) 214,186
Other interest, net of
amounts capitalized of
$- 0- by DKBERT 1,524 2,921 1,142 74 (1,328) 4,333
Minority interest in net
loss of consolidated
subsidiaries - - (459) - - (459)
--------- -------- -------- -------- ---------- ---------
301,887 4,659 35,879 9,408 (13,392) 338,441
--------- -------- -------- -------- ---------- ---------
Net loss $ (5,665) $ (63) $(5,570) $(1,063) $ 32 $(12,329)
========= ======== ======== ======== ========== =========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
COMBINING CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollar amounts in thousands)
<CAPTION>
Three Months Ended March 31, 1995
-------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- ---------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $273,705 $ - $25,332 $ 690 $ - $ 299,727
Interest 2,337 99 28 20 (882) 1,602
Revenue from affiliates - 4,121 - 204 (4,325) -
Other - 162 1,758 186 (1,147) 959
--------- ------ -------- ------- --------- -----------
276,042 4,382 27,118 1,100 (6,354) 302,288
--------- ------ -------- ------- --------- -----------
Costs and expenses:
Vehicle depreciation 82,088 - 4,068 60 - 86,216
Vehicle interest 29,030 - 994 13 - 30,037
Vehicle leases 10,273 - 1,458 183 - 11,914
Selling, general and
administrative 179,070 1,649 24,451 1,070 (4,756) 201,484
Other interest, net of
amounts capitalized of
$231 by DKBERT 848 2,518 248 - (882) 2,732
Minority interest in net
loss of consolidated
subsidiaries - - (763) - - (763)
--------- ------ -------- ------- --------- -----------
301,309 4,167 30,456 1,326 (5,638) 331,620
--------- ------ -------- ------- --------- -----------
Net income (loss) $(25,267) $ 215 $(3,338) $ (226) $ (716) $ (29,332)
========= ====== ======== ======= ========= ===========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
COMBINING CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollar amounts in thousands)
<CAPTION>
Three Months Ended March 31, 1996
-------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- ---------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating
activities $ 78,173 $ (4,787) $ 6,031 $ 412 $ 6,923 $ 86,752
--------- -------- -------- -------- ---------- ----------
Cash flows from
investing activities:
Cash received from sale of
revenue earning vehicles 345,961 - 78,422 2,665 - 427,048
Cash paid to suppliers of
revenue earning vehicles (778,348) - (80,350) (4,046) - (862,744)
Purchase of investments (719) - - - - (719)
Capital expenditures (3,073) (2,247) (510) (89) - (5,919)
Proceeds from sale of
property and equipment 970 322 - - - 1,292
--------- -------- -------- -------- ---------- ----------
Net cash used in investing
activities (435,209) (1,925) (2,438) (1,470) - (441,042)
--------- -------- -------- -------- ---------- ----------
Cash flows from
financing activities:
Proceeds from revenue
earning vehicle
financing 776,608 - 73,599 3,641 - 853,848
Principal payments on
revenue earning vehicle
financing (471,026) - (104,515) (2,925) - (578,466)
Proceeds from issuance of
other debt 90,000 11,500 - - - 101,500
Principal payments on
other debt (300) (1,434) (8,346) - - (10,080)
Collections from affiliate 2,975 - 48,464 167 (51,606) -
Payments to affiliate (33,323) (3,099) (8,261) - 44,683 -
Dividends and
distributions (3,739) (48) - (521) - (4,308)
--------- -------- -------- -------- ---------- ----------
Net cash provided by
financing activities
361,195 6,919 941 362 (6,923) 362,641
--------- -------- -------- -------- ---------- ----------
Effect of exchange rate
changes on cash - - (158) (22) - (180)
Net increase (decrease) in
cash and cash
equivalents 4,159 207 4,376 (718) - 8,024
Cash and cash equivalents
at beginning of period 5,987 79 3,777 1,603 - 11,446
--------- -------- -------- -------- ---------- ----------
Cash and cash equivalents
at end of period $ 10,146 $ 286 $ 8,153 $ 885 $ - $ 19,470
========= ======== ======== ======== ========== ==========
Supplemental disclosure of
cash flow information:
Cash paid during the
period for:
Interest $ 25,794 $ 5,991 $ 3,487 $ 146 $ (3,705) $ 31,713
========= ======== ======== ======== ========== ==========
Income taxes $ - $ - $ - $ - $ - $ -
========= ======== ======== ======== ========== ==========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
COMBINING CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollar amounts in thousands)
<CAPTION>
Three Months Ended March 31, 1995
-------------------------------------------------------------------------
Alamo
GUSA Affiliated
Alamo DKBERT Ltd. Companies Eliminations Combined
----- ------ ---- ---------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating
activities $ 65,999 $ 1,426 $ 7,224 $ (368) $ (1,676) $ 72,605
---------- --------- -------- -------- ---------- ----------
Cash flows from
investing activities:
Cash received from sale of
revenue earning vehicles 725,009 - 51,252 443 - 776,704
Cash paid to suppliers of
revenue earning vehicles (776,140) - (57,900) (780) - (834,820)
Sale of investments 1,817 3 - - - 1,820
Capital expenditures (8,785) (2,220) (259) (20) - (11,284)
Proceeds from sale of
property and equipment 103 398 285 - - 786
---------- --------- -------- -------- ---------- ----------
Net cash used in investing
activities (57,996) (1,819) (6,622) (357) - (66,794)
---------- --------- -------- -------- ---------- ----------
Cash flows from
financing activities:
Proceeds from revenue
earning vehicle
financing 790,331 - 45,716 900 - 836,947
Principal payments on
revenue earning vehicle
financing (782,140) - (50,699) (578) - (833,417)
Proceeds from other debt
- - 1,465 - - 1,465
Principal payments on
other debt (528) (3,514) (3,468) (4) 165 (7,349)
Collections from affiliate 1,698 4,119 2,124 30 (7,971) -
Payments to affiliate (9,703) (56) 440 (163) 9,482 -
Dividends and
distributions (4,883) (268) - (89) - (5,240)
---------- --------- -------- -------- ---------- ----------
Net cash provided by (used
in) financing activities (5,225) 281 (4,422) 96 1,676 (7,594)
---------- --------- -------- -------- ---------- ----------
Effect of exchange rate
changes on cash - - 430 11 - 441
Net increase (decrease) in
cash and cash
equivalents 2,778 (112) (3,390) (618) - (1,342)
Cash and cash equivalents
at beginning of period 6,598 466 6,400 2,234 - 15,698
---------- --------- -------- -------- ---------- ----------
Cash and cash equivalents
at end of period $ 9,376 $ 354 $ 3,010 $ 1,616 $ - $ 14,356
========== ========= ======== ======== ========== ==========
Supplemental disclosure of
cash flow information:
Cash paid during the
period for:
Interest $ 20,423 $ 2,324 $ 1,242 $ - $ (882) $ 23,107
========== ========= ======== ======== ========== ==========
Income taxes $ 227 $ - $ - $ - $ - $ 227
========== ========= ======== ======== ========== ==========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
NOTES TO COMBINED AND COMBINING CONDENSED FINANCIAL STATEMENTS
Unaudited
(1) INTERIM FINANCIAL STATEMENTS AND BASIS OF PRESENTATION
The accompanying condensed financial statements include the
accounts of the following entities, each entity affiliated
with each other as a result of common ownership and common
management: (i) Alamo Rent-A-Car, Inc. and Affiliate
(Alamo), (ii) DKBERT, Assoc., (DKBERT or the Partnership),
(iii) Guy Salmon USA, Ltd. and Subsidiaries (GUSA Ltd.), and
(iv) Alamo Rent-A-Car (Belgium), Inc. (Alamo Belgium), Alamo
Rent-A-Car (Canada), Inc. (Alamo Canada), Green Corn, Inc.
(Green Corn), Guy Salmon (USA), Inc. (GUSA Inc.), Territory
Blue, Inc. (Territory Blue), and Tower Advertising Group,
Inc. (Tower) (collectively, the Alamo Affiliated Companies).
The combined and combining financial statements of each of
the above entities (collectively referred to as the
"Companies") include the accounts of the Companies and their
respective majority-owned subsidiaries. All significant
intercompany accounts and transactions are eliminated in
combination. Following is a description of the financial
statements included in the combining financial statements:
(i) The consolidated financial statements of Alamo and
Alamo Funding, L.P. (AFL). Alamo has a 99 percent
limited partnership interest in AFL and AFL's 1
percent general partner is a corporation owned by
the shareholders of Alamo. All significant
intercompany balances and transactions have been
eliminated in consolidation. Alamo is engaged in
the car rental business throughout the United
States, primarily on a daily or weekly basis. AFL
provides financing to Alamo for the financing or
refinancing of revenue earning vehicles. AFL and
Alamo have separate corporate existences and
separate financial conditions and records. The
assets of AFL will be available only to satisfy the
claims of its creditors and will not be available to
any creditors of Alamo or its other affiliates.
(ii) The financial statements of DKBERT, a Florida
partnership, which owns and leases real property.
The Partnership is economically dependent on Alamo
for rental income sufficient to service its
indebtedness.
(iii) The consolidated financial statements of GUSA Ltd.,
a Florida limited partnership and the holding
company for certain European car rental affiliates
of Alamo. The subsidiaries of GUSA Ltd. are (i)
Alamo Rent-A-Car (UK) Limited, which conducts the
Company's operations in the United Kingdom; (ii)
Alamo Rent-A-Car, AG, Zurich which conducts Swiss
operations; (iii) Alamo Autovermietung GmbH, which
conducts German operations; and (iv) Alamo Rent-A-
Car (Vienna) GmbH (organized April 1995) which
conducts Austrian operations. All significant
intercompany balances and transactions have been
eliminated in consolidation. GUSA Ltd. and its
subsidiaries are economically dependent on Alamo for
administrative support and working capital required
to supplement its cash flow needs and to provide
interim funding for capital expenditures.
(iv) The combined financial statements of the Alamo
Affiliated Companies, as follows: (i) Alamo Belgium
which conducts car rental operations in Belgium;
(ii) Alamo Canada which conducts car rental
operations in Canada; (iii) Green Corn, an entity
with limited assets; (iv) GUSA Inc., which owns 79%
of Alamo Rent-A-Car B.V. which conducts car rental
operations in The Netherlands and owns a minority
interest in GUSA Ltd.; (v) Territory Blue, a
management company which contracts with certain
employees of Alamo and offers management services to
certain other entities; and (vi) Tower, which
provides advertising services to Alamo. The
combined financial statements include the accounts
of the Alamo Affiliated Companies and their majority-
owned
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
NOTES TO COMBINED AND COMBINING CONDENSED FINANCIAL STATEMENTS
Unaudited
subsidiaries. Minority interest represents GUSA
Ltd.'s 21% ownership in Alamo Rent-A-Car B.V. All
significant intercompany accounts and transactions
are eliminated in combination. The Alamo Affiliated
Companies are economically dependent on Alamo for
administrative support and working capital required
to supplement their cash flow needs and to provide
interim funding for capital expenditures.
The accompanying unaudited combined and combining condensed
financial statements have been prepared by the Companies in
accordance with the accounting policies described in the
1995 Annual Report and should be read in conjunction with
the combined financial statements and notes which appear in
that report. These statements do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all normal recurring adjustments
considered necessary for a fair presentation have been
included.
(2) REVENUE EARNING VEHICLES
Revenue earning vehicles consist of the following (in
thousands):
<TABLE>
<CAPTION>
March 31, 1996
--------------------------------------------
Alamo
GUSA, Affiliated
Alamo Ltd. Companies Combined
----- ---- --------- --------
<S> <C> <C> <C> <C>
Revenue earning $ 1,940,441 $ 154,630 $ 6,759 $ 2,101,830
vehicles
Less accumulated
depreciation (570) (237,565)
(228,320) (8,675)
------------ ---------- --------- -----------
$ 1,712,121 $ 145,955 $ 6,189 $ 1,864,265
============ ========== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
-----------------------------------------------
Alamo
GUSA, Affiliated
Alamo Ltd. Companies Combined
----- ---- --------- --------
<S> <C> <C> <C> <C>
Revenue earning $ 1,539,814 $ 156,113 $ 6,018 $ 1,701,945
vehicles
Less accumulated
depreciation (212,242) (10,572) (722) (223,536)
-
$ 1,327,572 $ 145,541 $ 5,296 $ 1,478,409
============ ========== ========= ===========
</TABLE>
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
NOTES TO COMBINED AND COMBINING CONDENSED FINANCIAL STATEMENTS
UNAUDITED
(3) NOTES PAYABLE AND LINES OF CREDIT SECURED BY REVENUE EARNING
VEHICLES
Notes payable and lines of credit secured by revenue earning
vehicles consist of the following (in thousands):
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
ALAMO 1996 1995
----- ---- ----
<S> <C> <C>
Amounts under $750 million revolving
credit agreement and predecessor
agreements with termination date of
June 30, 1999; secured by eligible
vehicle collateral and vehicle
receivable balances; interest at
formulas based on prime, Federal funds
or LIBOR at Alamo's discretion $ 271,376 $ 19,393
Amounts under $580 million loan
agreement with termination date of
June 17, 1996; secured by eligible
vehicle collateral and vehicle
receivable balances; interest based on
market dictated commercial paper rates 578,135 579,001
Senior secured notes payable with
interest at fixed rates ranging from
5.58% to 7.08% with various maturity
dates and amounts as follows: December
15, 1996 - $133 million; December 15,
1997 - $25 million; December 15, 1998
D $113 million; December 15, 2000 -
$94 million; and, December 15, 2003 -
$80.5 million; secured by eligible
vehicle collateral and vehicle
receivable balances 445,500 445,500
Amounts under $250 million loan
agreement with termination date of
October 2, 1996; secured by eligible
vehicle collateral and vehicle
receivable balances; interest based on
market dictated commercial paper
rates. 246,774 236,357
Amounts under $75 million revolving
credit agreement with termination date
of December 16, 1996; secured by
eligible vehicle collateral and
vehicle receivable balances; interest
at formulas based on prime or LIBOR at
Alamo's discretion. 75,000 -
Amounts under $90 million term loan and
predecessor agreements with maturity
dates and amounts as follows:
December 1, 1997 - $15 million;
December 1, 1998 - $75 million;
secured by eligible vehicle collateral
and vehicle receivable balances;
interest at a formula based on LIBOR
or prime at Alamo's discretion. 22,000 25,000
Amounts to be financed after period end
under various revolving credit
agreements 13,448 41,400
---------- -----------
Alamo subtotal $1,652,233 $ 1,346,651
---------- -----------
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
NOTES TO COMBINED AND COMBINING CONDENSED FINANCIAL STATEMENTS
Unaudited
</TABLE>
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---- ----
<S> <C> <C>
GUSA Ltd.
--------
Amounts under various uncommitted
revolving lease facilities with
financing institutions in Great
Britain; secured by eligible vehicle
collateral; interest based on an as
quoted basis dictated by market
competition $ 101,699 $ 126,874
Amounts outstanding to mature within six
months; secured by eligible vehicle
collateral; interest based on an as
quoted basis dictated by market
competition 21,734 30,214
Amounts under deutsche mark (DM) term
loan and predecessor agreements;
secured by eligible vehicle collateral
and vehicle receivable balances;
interest based on FIBOR plus 125 basis
points or ICM rate plus 150 basis
points 1,672 14,139
Amounts under DM 21,000,000 revolving
credit agreement with various maturity
dates; secured by eligible vehicle
collateral and certain real property;
interest ranging from 4.75% D 9.0% 8,048 11,368
Amounts under DM 20,000,000 credit
agreement; secured by eligible vehicle
collateral and vehicle receivable
balances; interest based on LIBOR;
termination date, February 1997 9,923 -
Other, including amounts to be financed
after period end, under various
revolving lease facilities 16,978 11,341
----------- -----------
GUSA, Ltd. subtotal 160,054 193,936
----------- -----------
Alamo Affiliated Companies
--------------------------
Amounts under Belgium franc (BEF)
155,520,000 credit facility; secured
by eligible vehicle collateral;
interest at Brussels Interbank offered
rate plus 110 basis points;
termination date, June 1996;
guaranteed by Alamo 1,896 1,946
Amounts under Canadian dollar
C$10,000,000 credit agreement; secured
by eligible vehicle collateral;
interest at Agent's Bankers
Acceptances plus 62.5 basis points;
termination date - June 1998;
guaranteed by Alamo 4,270 3,539
Other - 50
----------- -----------
Alamo Affiliated Companies
subtotal 6,166 5,535
----------- -----------
Combined $ 1,818,453 $ 1,546,122
=========== ===========
</TABLE>
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
NOTES TO COMBINED AND COMBINING CONDENSED FINANCIAL STATEMENTS
Unaudited
(4) OTHER DEBT
Other debt consists of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
Alamo 1996 1995
----- ---- ----
<S> <C> <C>
11 3/4% Senior Notes due 2006,
interest payable semi-annually on
January 31 and July 31 of each year,
commencing July 31, 1996; unsecured $ 90,000 $ -
Note payable to bank with interest at
a formula based on LIBOR or prime
paid quarterly; secured by a
building; principal payable in
quarterly installments beginning
March 1996 and based on the balance
outstanding at that date, due
December 2003 8,400 8,700
------- -------
Alamo subtotal 98,400 8,700
------- -------
DKBERT
------
Mortgages payable to GMAC and
predecessor agreements with interest
at 9.193%; payable in monthly
installments, due July 2005; secured
by real property; guaranteed by
Alamo 108,362 107,840
11 3/4% Senior Notes due 2006,
interest payable semi-annually on
January 31 and July 31 of each year,
commencing July 31, 1996; unsecured 10,000 -
Mortgages payable to bank with
interest at 0.75% over prime;
variable principal payments due
December 2000; secured by real
property; guaranteed by Alamo 832 934
Other mortgages payable - 354
------- -------
DKBERT subtotal 119,194 109,128
------- -------
</TABLE>
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
NOTES TO COMBINED AND COMBINING CONDENSED FINANCIAL STATEMENTS
Unaudited
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---- ----
<S> <C> <C>
GUSA, LTD.
--------
Note payable to minority shareholder of
a combined affiliate, paid April 1996 $ 3,656 $ 3,722
Term loan agreement with bank, interest
at LIBOR plus 125 basis points,
payable monthly; principal payable in
quarterly installments of $331,000,
due January 1999; secured by non-
vehicle equipment, trade receivables 3,955 4,285
and leasehold improvements
Amounts under Great Britain pound (GBP)
10,000,000 revolving credit
commitment to expire December 21,
1996; interest based on Sterling
LIBOR plus 125 basis points or base
rate plus 125 basis points; secured 3,294 11,431
by non-vehicle equipment and
leaseholds
GUSA, Ltd. subtotal 10,905 19,438
--------- ----------
Combined $ 228,499 $ 137,266
========= ==========
</TABLE>
The 11 3/4% Senior Notes due 2006 (the "Senior Notes") were
issued by the entities described in Note 1 (the "Issuers")
in connection with a registration statement on Form S-1 with
the Securities and Exchange Commission. The Senior Notes
are unsecured, joint and several obligations of each of the
Issuers and rank pari passu in right of payment with all
existing and future debt (as defined) of the Issuers. The
Senior Notes are effectively subordinated to all existing
and future secured indebtedness of each of the Issuers.
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
Notes to Combined and Combining Condensed Financial Statements
Unaudited
(5) Condensed Financial Information of Alamo Affiliated Companies
The following table summarizes condensed financial statements of the
Alamo Affiliated Companies:
<TABLE>
Balance Sheets:
<CAPTION>
As of March 31, 1996
----------------------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash and cash equivalents $ 421 $ 108 $ 49 $ 196 $ - $ 111 $ 885
Receivables, net 913 355 85 1,059 1,398 1,992 5,802
Revenue earning vehicles, 2,172 3,913 - 104 - - 6,189
net
Property and equipment, 42 993 - 110 - 80 1,225
net
Other assets 224 201 - 512 - - 937
--------- -------- -------- -------- -------- -------- ---------
$ 3,772 $ 5,570 $ 134 $ 1,981 $ 1,398 $ 2,183 $ 15,038
========= ======== ======== ======== ======== ======== =========
Liabilities and Equity:
Notes payable and lines $ 1,896 $ 4,270 $ - $ - $ - $ - $ 6,166
of credit secured by
revenue earning
vehicles
Due to affiliates 1,187 2,226 - 3,004 1,564 1,629 9,610
Accounts payable 741 479 - 1,560 - 859 3,639
Accrued expenses and
customer deposits 64 114 10 101 - - 289
--------- -------- -------- -------- -------- -------- ---------
Total liabilities 3,888 7,089 10 4,665 1,564 2,488 19,704
--------- -------- -------- -------- -------- -------- ---------
Minority interest - - - 155 - - 155
--------- -------- -------- -------- -------- -------- ---------
Equity (deficit) (116) (1,519) 124 (2,839) (166) (305) (4,821)
--------- -------- -------- -------- -------- -------- ---------
$ 3,772 $ 5,570 $ 134 $ 1,981 $ 1,398 $ 2,183 $ 15,038
========= ======== ======== ======== ======== ======== =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
NOTES TO COMBINED AND COMBINING CONDENSED FINANCIAL STATEMENTS
Unaudited
As of December 31, 1995
---------------------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
--------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Cash and cash equivalents $ 597 $ 283 $ 451 $ 289 - $ (17) $ 1,603
Receivables, net 874 118 381 783 - 1,053 3,209
Revenue earning vehicles, net 2,044 3,211 - 41 - - 5,296
Property and equipment, net 37 1,018 - 113 - 37 1,205
Other assets 131 206 - 611 - - 948
--------- -------- -------- -------- -------- -------- ---------
$ 3,683 $ 4,836 $ 832 $ 1,837 $ - $ 1,073 $ 12,261
========= ======== ======== ======== ======== ======== =========
Liabilities and Equity:
Notes payable and lines of
credit secured by revenue
earning vehicles $ 1,946 $ 3,589 $ - $ - $ - $ - $ 5,535
Due to affiliates 1,187 1,887 - 3,319 - 600 6,993
Accounts payable 420 214 - 598 - 971 2,203
Other debt - - - - - - -
Accrued expenses and
customer deposits 166 107 287 105 - - 665
--------- -------- -------- -------- -------- -------- ---------
Total liabilities 3,719 5,797 287 4,022 - 1,571 15,396
--------- -------- -------- -------- -------- -------- ---------
Minority interest - - - 156 - - 156
--------- -------- -------- -------- -------- -------- ---------
Equity (deficit) (36) (961) 545 (2,341) (498) (3,291)
--------- -------- -------- -------- -------- -------- ---------
$ 3,683 $ 4,836 $ 832 $ 1,837 $ - $ 1,073 $ 12,261
========= ======== ======== ======== ======== ======== =========
Statements of Operations:
<CAPTION>
Three months ended March 31, 1996
---------------------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
--------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $ 359 $ 608 $ - $ 679 $ - $ - $ 1,646
Revenue from affiliate 64 314 (151) 366 3,751 2,281 6,625
Interest and other revenue - - - - - 74 74
--------- -------- -------- -------- -------- -------- ---------
423 922 (151) 1,045 3,751 2,355 8,345
========= ======== ======== ======== ======== ======== =========
Costs and expenses:
Vehicle depreciation 61 258 - 31 - - 350
Vehicle interest 17 54 - - - - 71
Vehicle leases - 3 - 191 - - 194
Selling, general and
administrative 426 1,178 12 1,214 3,918 2,045 8,793
--------- -------- -------- -------- -------- -------- ---------
504 1,493 12 1,436 3,918 2,045 9,408
--------- -------- -------- -------- -------- -------- ---------
Net income (loss) $ (81) $ (571) $ (163) $ (391) $ (167) $ 310 (1,063)
========= ======== ======== ======== ======== ======== =========
</TABLE>
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
NOTES TO COMBINED AND COMBINING CONDENSED FINANCIAL STATEMENTS
Unaudited
<TABLE>
<CAPTION>
Three months ended March 31, 1995
---------------------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
--------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Vehicle rentals $ 251 $ - $ - $ 439 $ - $ - $ 690
Revenue from affiliate - - - - - 204 204
Interest and other revenue - - 26 180 - - 206
--------- -------- -------- -------- -------- -------- ---------
$ 251 $ - $ 26 619 $ - $ 204 1,100
--------- -------- -------- -------- -------- -------- ---------
Costs and expenses:
Vehicle depreciation 60 - - - - 60
Vehicle interest 13 - - - - - 13
Vehicle Leases - - - 183 - - 183
Selling, general and
administrative 254 - 30 751 - 35 1,070
--------- -------- -------- -------- -------- -------- ---------
327 30 934 - 35 1,326
--------- -------- -------- -------- -------- -------- ---------
Net income (loss) $ (76) $ - $ (4) $ (315) $ - $ 169 $ (226)
========= ======== ======== ======== ======== ======== =========
Statements of Cash Flows
<CAPTION>
Three months ended March 31, 1996
---------------------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
--------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net cash provided by (used
in) operating activities $ 133 $ 120 $ 5 $ 23 $ (167) $ 298 $ 412
--------- -------- -------- -------- -------- -------- ---------
Cash flows from investing
activities:
Cash received from sale of
revenue earning vehicles 722 1,931 - 12 - - 2,665
Cash paid to suppliers of
revenue earning vehicles (1,003) (2,930) - (113) - - (4,046)
Capital expenditures Net
cash provided used) in
investing activities (8) (18) - (7) - (56) (89)
--------- -------- -------- -------- -------- -------- ---------
(289) (1,017) - (108) - (56) (1,470)
--------- -------- -------- -------- -------- -------- ---------
Cash flows from financing
activities:
Proceeds from revenue
earning vehicle financing 850 2,791 - - - - 3,641
Principal payments on
revenue earning vehicle
financing (860) (2,065) - - - - (2,925)
Collection from affiliate - - - 167 - 167
Dividends and distributions - - (407) - - (114) (521)
--------- -------- -------- -------- -------- -------- ---------
Net cash used in financing
activities (10) 726 (407) - 167 (114) (362)
--------- -------- -------- -------- -------- -------- ---------
Effect of exchange rate
changes on cash (10) (4) (8) - (22)
Net increase (decrease)in
cash and cash equivalents (176) (175) (402) (93) - 128 (718)
Cash and cash equivalents at
beginning of period 597 283 451 289 - (17) 1,603
--------- -------- -------- -------- -------- -------- ---------
Cash and cash equivalents at
end of period $ 421 $ 108 $ 49 $ 196 $ - $ 111 $ 885
========= ======== ======== ======== ======== ======== =========
</TABLE>
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
NOTES TO COMBINED AND COMBINING CONDENSED FINANCIAL STATEMENTS
Unaudited
<TABLE>
<CAPTION>
Three months ended March 31, 1995
---------------------------------------------------------------------------------
Alamo Alamo Green GUSA Territory
Belgium Canada Corn Inc. Blue Tower Combined
--------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net cash provided by (used
in) operating activities $ 73 $ - $ (7) $ 34 $ - $ (468) $ (368)
--------- -------- -------- -------- -------- -------- ---------
Cash flows from investing
activities:
Cash received from sale of
revenue earning vehicles 400 - - 43 - - 443
Cash paid to suppliers of
revenue earning vehicles (648) - - (132) - - (780)
Capital expenditures (7) - - (13) - - (20)
--------- -------- -------- -------- -------- -------- ---------
Net cash provided (used) in
investing activities (255) - - (102) - - (357)
Cash flows from financing
activities:
Proceeds from revenue
earning vehicle financing 900 - - - - - 900
Principal payments on
revenue earning vehicle
financing (578) - - - - - (578)
Payments on other debt - - - (4) - - (4)
Collections from affiliate - - - 30 - 29 59
Payments to affiliate (192) - - - - - (192)
Dividends and distributions - - - - - (89) (89)
--------- -------- -------- -------- -------- -------- ---------
Net cash provided (used) in
financing activities 130 26 (60) 96
Effect of exchange rate
changes on cash 2 - - 9 - - 11
Net increase (decrease) in
cash and cash equivalents (50) - (7) (33) - (528) (618)
Cash and cash equivalents at
beginning of period 50 - 429 87 1,668 2,234
--------- -------- -------- -------- -------- -------- ---------
Cash and cash equivalents at
end of period $ 0 $ - $ 422 $ 54 $ - $ 1,140 $ 1,616
========= ======== ======== ======== ======== ======== =========
</TABLE>
<PAGE>
ALAMO RENT-A-CAR, INC. AND AFFILIATES
NOTES TO COMBINED AND COMBINING CONDENSED FINANCIAL STATEMENTS
Unaudited
(6) SUPPLEMENTAL FINANCIAL DATA (IN THOUSANDS)
<TABLE>
Balance Sheet:
<CAPTION>
March 31, 1996
------------------------------------------------------------------
European
Operating Combined
Issuers (1) Subsidiaries(2) Eliminations Issuers
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Assets $ 2,187,868 $ 211,664 $ (26,020) $ 2,373,512
=============== =============== =============== ===============
Liabilities 2,128,093 230,026 (34,908) 2,323,211
Minority interest - (459) - (459)
Equity 59,775 (17,903) 8,888 50,760
--------------- --------------- --------------- ---------------
$ 2,187,868 $ 211,664 $ (26,020) $ 2,373,512
=============== =============== =============== ===============
<CAPTION>
December 31, 1995
------------------------------------------------------------------
European
Operating Combined
Issuers (1) Subsidiaries(2) Eliminations Issuers
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Assets $ 1,805,783 $ 250,334 $ (55,372) $ 2,000,745
=============== =============== =============== ===============
Liabilities 1,732,611 264,096 (61,927) 1,934,780
Equity 73,172 (13,762) 6,555 65,965
--------------- --------------- --------------- ---------------
$ 1,805,783 $ 250,334 $ (55,372) $ 2,000,745
=============== =============== =============== ===============
Income Statement and Cash Flows:
<CAPTION>
March 31, 1996
------------------------------------------------------------------
European
Operating Combined
Issuers (1) Subsidiaries(2) Eliminations Issuers
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenue $ 300,059 $ 30,899 $ (4,845) $ 326,112
=============== =============== =============== ===============
Net loss $ (13,796) $ (4,624) $ 6,091 $ (12,329)
=============== =============== =============== ===============
Cash flows from
operating activities $ 72,449 $ 7,109 $ 7,047 $ 86,605
=============== =============== =============== ===============
<CAPTION>
March 31, 1995
------------------------------------------------------------------
European
Operating Combined
Issuers (1) Subsidiaries(2) Eliminations Issuers
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenue $ 274,987 $ 28,448 $ (1,147) $ 302,288
=============== =============== =============== ===============
Net loss $ (28,337) $ (2,712) $ 1,717 $ (29,332)
=============== =============== =============== ===============
Cash flows from
operating activities $ 67,395 $ 6,886 $ (1,676) $ 72,605
=============== =============== =============== ===============
(1) Represents the entities which are the issuers of the Senior Notes referred to in Note 4.
(2) Represents the European operating subsidiaries of certain of the issuers.
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
COMBINED RESULTS OF OPERATIONS
Revenue. Total revenue for the three months ended March 31, 1996
increased 7.9% to $326.1 million from $302.3 million in the
comparable period of 1995. Approximately 85% of this increase
was generated by the Companies' domestic rental operations where
both rental volume and average daily rental rates improved over
the comparable 1995 period. Both factors were driven by
increases in air passenger deplanements, primarily in warm
weather destinations like Florida and Hawaii.
Costs and Expenses. Total costs and expenses for the three
months ended March 31, 1996 increased 2.1% to $338.4 million from
the $331.6 million incurred in 1995. As a percentage of total
revenues, total costs and expenses decreased to 103.8% from
109.7% in the prior year. Vehicle related costs and expenses
(depreciation, leasing and interest) were each individually
impacted by a decision to operate a greater percentage of owned
versus leased vehicles. In the aggregate, these expenses
declined $7.8 million or 6.1% from 1995 levels and decreased as a
percentage of revenues from 42.4% in 1995 to 36.9% in 1996. This
improvement was due to implementation of the Companies' cost
reduction plan, which called for a less expensive fleet mix and
improved worldwide utilization, and slightly lower interest
rates.
Selling, general and administrative costs increased $12.7
million, or 6.3%, from $201.5 million in 1995 to $214.2 million
in 1996. These costs declined as a percentage of revenues from
66.7% in 1995 to 65.7% in 1996 as a result of a Companies' focus
on discretionary cost reduction and more effective integration of
the operations acquired or established in 1995.
The minority interest in the net loss of the Companies' German
operation, shown as a credit to total costs and expenses,
declined from $763,000 in 1995 to $459,000 in 1996. This
reduction came as a result of the finalization of the German
acquisition, whereby the former owner's share in the acquired
entity was reduced from 25%, as reported in 1995, to 16% in 1996.
Net Loss. As a result of the factors discussed above, the
Companies had a combined net loss of $12.3 million in the first
quarter of 1996, a $17 million improvement over the $29.3 million
loss incurred in 1995.
CAPITAL RESOURCES AND LIQUIDITY
Net cash provided by operating activities for the three months
ended March 31, 1996 increased $14.2 million, or 19.6%, to $86.8
million from $72.6 million in the comparable 1995 period. The
excess of cash received from rentals over cash paid to vendors
improved consistent with the earnings improvement noted
previously.
<PAGE>
Net cash used in investing activities increased to $441.0 million
in the first three months of 1996, up $374.2 million from the
$66.8 million used in the same period of 1995. The increase was
due to fewer sales of revenue vehicles in the first quarter of
1996 as the Companies moved a significant share of their seasonal
outfleeting activity to the fourth quarter of 1995. Additionally,
the Companies had a higher percentage of owned versus leased
vehicles in 1996 versus 1995.
Net cash provided by financing activities for the three months
ended March 31, 1996 increased $370.1 million to $362.5 million
due primarily to the decrease in principal payments on revenue
vehicles stemming from the reduced sale, and related debt
payoffs, of revenue vehicles as noted above, partially offset by
the temporary pay down of vehicle debt from proceeds of the
issuance of the Senior Notes.
The Companies use interest swaps in the management of their
interest rate risk. At March 31, 1996, the Companies had
approximately $1,389.4 million of floating rate indebtedness, of
which $175 million had an interest rate protection agreement
maturing in 1997. A substantial increase in interest rates could
materially adversely affect the Companies' ability to service
their debt obligations.
The aggregate amount of the Companies' indebtedness fluctuates as
a result of the seasonal aspects of its business, with levels of
indebtedness generally higher during the second and third
quarters and lower in the first and fourth. At March 31, 1996,
the Companies had $2,047.0 million in total indebtedness, of
which $1,818.5 million represented secured indebtedness for the
purchase of vehicles, versus $1,683.4 million and $1,546.1
million, respectively, at December 31, 1995.
The Companies had $584.8 million of capacity available under
their vehicle financing facilities at March 31, 1996. The
Companies believe that their cash on hand, cash provided by
operations, and available borrowings under their revolving credit
facilities will adequately provide for their working capital,
debt service, and capital expenditure requirements for at least
the next twelve months.
<PAGE>
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security
Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Number Exhibit
4.1. Indenture, dated as of February
16, 1996, among Alamo Rent-A-Car,
Inc., Alamo Rent-A-Car (Belgium),
Inc., Alamo Rent-A-Car (Canada),
Inc., DKBERT Assoc., Green Corn,
Inc., Guy Salmon USA, Inc., Guy
Salmon USA, Ltd., Territory Blue,
Inc. and Tower Advertising Group,
Inc., as Co-Issuers, and The Bank
of New York, as Trustee.
27.1. Financial Data Schedule
(b) Reports on Form 8-K.
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ALAMO RENT-A-CAR, INC.
Dated: May 15, 1996 By: /s/ D. Keith Cobb
------------ -------------------------
D. Keith Cobb
Chief Executive Officer
(Duly Authorized Officer and
Principal Financial Officer)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ALAMO RENT-A-CAR (BELGIUM), INC.
Dated: May 15, 1996 By: /s/ Frank A. Armstrong
------------ -------------------------
Frank A. Armstrong
President
Dated: May 15, 1996 By: /s/ D. Keith Cobb
------------ -------------------------
D. Keith Cobb
(Principal Financial Officer)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ALAMO RENT-A-CAR (CANADA), INC.
Dated: May 15, 1996 By: /s/ W. Macdonald Clark
------------ --------------------------
W. Macdonald Clark
President
Dated: May 15, 1996 By: /s/ D. Keith Cobb
------------ --------------------------
D. Keith Cobb
Vice Chairman of the Board
(Principal Financial Officer)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
DKBERT ASSOC.
Dated: May 15, 1996 By: /s/ Michael S. Egan
------------ --------------------------
Michael S. Egan,
a general partner
Dated: May 15, 1996 By: /s/ D. Keith Cobb
------------ --------------------------
D. Keith Cobb
(Principal Financial Officer)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GREEN CORN, INC.
Dated: May 15, 1996 By: /s/ Michael S. Egan
------------ --------------------------
Michael S. Egan,
Chairman of the Board
and President
Dated: May 15, 1996 By: /s/ D. Keith Cobb
------------ --------------------------
D. Keith Cobb
(Principal Financial Officer)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GUY SALMON USA, INC.
Dated: May 15, 1996 By: /s/ D. Keith Cobb
------------ --------------------------
D. Keith Cobb
President
(Duly Authorized Officer and
Principal Financial Officer)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GUY SALMON USA, LTD.
By: GUY SALMON USA, INC.
Dated: May 15, 1996 By: /s/ D. Keith Cobb
------------ --------------------------
D. Keith Cobb
President
(Duly Authorized Officer and
Principal Financial Officer)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
TERRITORY BLUE, INC.
Dated: May 15, 1996 By: /s/ D. Keith Cobb
------------ --------------------------
D. Keith Cobb
Chief Executive Officer
(Duly Authorized Officer and
Principal Financial Officer)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
TOWER ADVERTISING GROUP, INC.
Dated: May 15, 1996 By: /s/ Roger H. Ballou
------------ --------------------------
Roger H. Ballou
President
(Duly Authorized Officer)
Dated: May 15, 1996 By: /s/ D. Keith Cobb
------------ --------------------------
D. Keith Cobb
(Principal Financial Officer)
<PAGE>
Exhibit Index
-------------
Exhibit Exhibit
Number
4.1. Indenture, dated as of February 16, 1996,
among Alamo Rent-A-Car, Inc., Alamo Rent-A-
Car (Belgium), Inc., Alamo Rent-A-Car
(Canada), Inc., DKBERT Assoc., Green Corn,
Inc., Guy Salmon USA, Inc., Guy Salmon USA,
Ltd., Territory Blue, Inc. and Tower
Advertising Group, Inc., as Co-Issuers, and
The Bank of New York, as Trustee.
27.1. Financial Data Schedule
<PAGE>
Exhibit 4.1
<PAGE>
============================================================
ALAMO RENT-A-CAR, INC.
DKBERT ASSOC.
GUY SALMON USA, INC.
GUY SALMON USA, LTD.
TOWER ADVERTISING GROUP, INC.
ALAMO RENT-A-CAR (BELGIUM), INC.
ALAMO RENT-A-CAR (CANADA), INC.
GREEN CORN, INC.
TERRITORY BLUE, INC.
11 3/4% Senior Notes Due 2006
___________________________
INDENTURE
Dated as of February 16, 1996
___________________________
THE BANK OF NEW YORK,
Trustee
============================================================
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310(a)(1) .............................. 710
(a)(2) .............................. 710
(a)(3) .............................. NA
(a)(4) .............................. NA
(b) .............................. 708; 710
(c) .............................. NA
311(a) .............................. 711
(b) .............................. 711
(c) .............................. NA
312(a) .............................. 205
(b) .............................. 1003
(c) .............................. 1003
313(a) .............................. 706
(b)(1) .............................. NA
(b)(2) .............................. 706
(c) .............................. 1102
(d) .............................. 706
314(a) .............................. 402;
.............................. 410; 1002
(b) .............................. NA
(c)(1) .............................. 1004
(c)(2) .............................. 1004
(c)(3) .............................. NA
(d) .............................. NA
(e) .............................. 1005
(f) .............................. 410
315(a) .............................. 701
(b) .............................. 705; 1002
(c) .............................. 701
(d) .............................. 701
(e) .............................. 611
316(a)(last sentence)........................ 1006
(a)(1)(A) .............................. 605
(a)(1)(B) .............................. 604
(a)(2) .............................. NA
(b) .............................. 607
317(a)(1) .............................. 608
(a)(2) .............................. 609
(b) .............................. 204
318(a) .............................. 1001
N.A. means Not Applicable.
__________________
Note: This Cross-Reference Table shall not, for any purpose, be
deemed to be part of the Indenture.
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 Page
Definitions and Incorporation by Reference
------------------------------------------
SECTION1.01. Definitions................................. 1
SECTION1.02. OtherDefinitions............................ 36
SECTION1.03. IncorporationbyReferenceofTrust
IndentureAct................................ 36
SECTION1.04. RulesofConstruction......................... 37
ARTICLE 2
The Securities
--------------
SECTION 2.01. Form and Dating............................. 37
SECTION 2.02. Execution and Authentication................ 38
SECTION 2.03. Registrar and Paying Agent.................. 39
SECTION 2.04. Paying Agent To Hold Money in Trust......... 39
SECTION 2.05. Securityholder Lists........................ 40
SECTION 2.06. Transfer and Exchange....................... 40
SECTION 2.07. Replacement Securities...................... 43
SECTION 2.08. Outstanding Securities...................... 44
SECTION 2.09. Temporary Securities........................ 44
SECTION 2.10. Cancelation................................. 44
SECTION 2.11. Defaulted Interest.......................... 45
SECTION 2.12. CUSIP Numbers.............................. 45
ARTICLE 3
Redemption
----------
SECTION 3.01. Notices to Trustee.......................... 45
SECTION 3.02. Selection of Securities To Be Redeemed...... 46
SECTION 3.03. Notice of Redemption........................ 46
SECTION 3.04. Effect of Notice of Redemption.............. 47
SECTION 3.05. Deposit of Redemption Price................. 47
SECTION 3.06. Securities Redeemed in Part................. 48
<PAGE>
Page
ARTICLE 4
Covenants
---------
SECTION 4.01. Payment of Securities....................... 48
SECTION 4.02. SEC Reports................................. 48
SECTION 4.03. Limitation on Indebtedness.................. 49
SECTION 4.04. Limitation on Restricted Payments........... 52
SECTION 4.05. Limitation on Restrictions on Distributions
from Restricted Subsidiaries................ 57
SECTION 4.06. Limitation on Sales of Assets and
Subsidiary Stock............................ 59
SECTION 4.07. Limitation on Transactions with Affiliates.. 63
SECTION 4.08. Change of Control........................... 65
SECTION 4.09. Compliance Certificate...................... 66
SECTION 4.10. Further Instruments and Acts................ 66
SECTION 4.11. Limitation on Liens......................... 67
SECTION 4.12. Limitation on Sale/Leaseback Transactions... 67
SECTION 4.13. Limitation on Sale of Stock of an
Insignificant Issuer........................ 67
SECTION 4.14. Future Affiliate Co-Issuers................. 68
SECTION 4.15. Limitation on Permitted Vehicle
Indebtedness................................ 69
SECTION 4.16. Additional Amounts.......................... 70
ARTICLE 5
Successor Company
-----------------
SECTION 5.01. When Issuers May Merge or Transfer Assets... 72
ARTICLE 6
Defaults and Remedies
---------------------
SECTION 6.01. Events of Default........................... 73
SECTION 6.02. Acceleration................................ 76
SECTION 6.03. Other Remedies.............................. 76
SECTION 6.04. Waiver of Past Defaults..................... 77
SECTION 6.05. Control by Majority......................... 77
SECTION 6.06. Limitation on Suits......................... 77
SECTION 6.07. Rights of Holders To Receive Payment........ 78
<PAGE>
Page
SECTION 6.08. Collection Suit by Trustee.................. 78
SECTION 6.09. Trustee May File Proofs of Claim............ 78
SECTION 6.10. Priorities.................................. 79
SECTION 6.11. Undertaking for Costs....................... 79
SECTION 6.12. Waiver of Stay or Extension Laws............ 79
ARTICLE 7
Trustee
-------
SECTION 7.01. Duties of Trustee........................... 80
SECTION 7.02. Rights of Trustee........................... 81
SECTION 7.03. Individual Rights of Trustee................ 82
SECTION 7.04. Trustee's Disclaimer........................ 82
SECTION 7.05. Notice of Defaults.......................... 82
SECTION 7.06. Reports by Trustee to Holders............... 82
SECTION 7.07. Compensation and Indemnity.................. 83
SECTION 7.08. Replacement of Trustee...................... 84
SECTION 7.09. Successor Trustee by Merger................. 85
SECTION 7.10. Eligibility; Disqualification............... 85
SECTION 7.11. Preferential Collection of Claims Against
Issuers..................................... 86
ARTICLE 8
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. Discharge of Liability on Securities;
Defeasance.................................. 86
SECTION 8.02. Conditions to Defeasance.................... 87
SECTION 8.03. Application of Trust Money.................. 89
SECTION 8.04. Repayment to Issuers........................ 89
SECTION 8.05. Indemnity for Government Obligations........ 90
SECTION 8.06. Reinstatement............................... 90
ARTICLE 9
Amendments
----------
SECTION 9.01. Without Consent of Holders.................. 90
SECTION 9.02. With Consent of Holders..................... 91
SECTION 9.03. Compliance with Trust Indenture............. 92
SECTION 9.04. Revocation and Effect of Consents and
Waivers..................................... 92
<PAGE>
Page
SECTION 9.05. Notation on or Exchange of Securities....... 93
SECTION 9.06. Trustee To Sign Amendments.................. 93
ARTICLE 10
Miscellaneous
-------------
SECTION 10.01. Trust Indenture Act Controls................ 94
SECTION 10.02. Notices..................................... 94
SECTION 10.03. Communication by Holders with Other Holders. 95
SECTION 10.04. Certificate and Opinion as to Conditions
Precedent................................... 95
SECTION 10.05. Statements Required in Certificate or
Opinion..................................... 96
SECTION 10.06. When Securities Disregarded................. 96
SECTION 10.07. Rules by Trustee, Paying Agent and
Registrar................................... 96
SECTION 10.08. Legal Holidays.............................. 97
SECTION 10.09. Governing Law............................... 97
SECTION 10.10. No Recourse Against Others.................. 97
SECTION 10.11. Obligations Joint and Several............... 97
SECTION 10.12. Successors.................................. 97
SECTION 10.13. Multiple Originals.......................... 97
SECTION 10.14. Table of Contents; Headings................. 98
SECTION 10.15. Severability Clause......................... 98
Exhibit A - Form of Security
<PAGE>
INDENTURE dated as of February 16, 1996,
among ALAMO RENT-A-CAR, INC., a Florida
corporation, DKBERT ASSOC., a Florida general
partnership, GUY SALMON USA, INC., a Florida
corporation, GUY SALMON USA, LTD., a Florida
limited partnership, TOWER ADVERTISING GROUP,
INC., a Florida corporation, ALAMO RENT-A-CAR
(BELGIUM), INC., a Florida corporation, ALAMO RENT-
A-CAR (CANADA), INC., a Florida corporation, GREEN
CORN, INC., a Florida corporation, and TERRITORY
BLUE, INC., a Florida corporation (each, an
"Issuer", and collectively, the "Issuers"), and
THE BANK OF NEW YORK, a New York banking
corporation (the "Trustee").
Each party agrees as follows for the benefit of the
other parties and for the equal and ratable benefit of the
Holders of the Issuers' 11 3/4% Senior Notes Due 2006 (the
"Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
------------------------------------------
SECTION 1.01. Definitions.
"Affiliate" of any specified Person means any other
Person, directly or indirectly, controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "control" when used
with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. For purposes of Sections
4.06 and 4.07 only, "Affiliate" shall also mean any beneficial
owner of shares representing 5% or more of the total voting power
of the Voting Stock (on a fully diluted basis) of an Issuer or of
rights or warrants to purchase such Voting Stock (whether or not
currently exercisable) and any Person who would be an Affiliate
of any such beneficial owner pursuant to the first sentence
hereof.
<PAGE>
"Aggregate Net Worth Increase" means, for any date of
determination, the amount, if any, by which the Combined Net
Worth at such date exceeds the Combined Net Worth at January 31,
1996.
"Alamo Belgium" means Alamo Rent-A-Car (Belgium), Inc.
"Alamo Shareholders Agreement" means the Shareholders
Agreement among Alamo Rent-A-Car, Inc., Michael S. Egan, William
H. Kelly, Jr., Norman D. Tripp and two former shareholders dated
as of January 14, 1986, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"Asset Disposition" means any sale, lease, transfer or
other disposition of shares of Capital Stock of a Restricted
Subsidiary (other than directors' qualifying shares), property or
other assets (each referred to for the purposes of this
definition as a "disposition") by an Issuer or any of its
Restricted Subsidiaries (including any disposition by means of a
merger, consolidation or similar transaction) other than (i) the
sale of inventory or Eligible Vehicles in the ordinary course of
business, (ii) a disposition by an Issuer to another Issuer, a
Restricted Subsidiary to an Issuer or by an Issuer or a
Restricted Subsidiary to a Restricted Subsidiary of an Issuer,
(iii) for purposes of Section 4.06 only, a disposition subject to
Section 4.04, (iv) the disposition of real estate which has
become surplus to the Issuers' anticipated needs in exchange for
other property of equivalent value and (v) in any calendar year,
a disposition or dispositions of shares, property or assets
having an aggregate fair market value of less than $1,000,000.
"Attributable Debt" in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present
value (discounted at the interest rate borne by the Securities,
compounded annually) of the total obligations of the lessee for
rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination,
with respect to any Indebtedness or Preferred Stock, the quotient
obtained by dividing (i) the sum of the products of the numbers
of years from the date of
<PAGE>
determination to the dates of each successive scheduled principal
payment of such Indebtedness or redemption or similar payment
with respect to such Preferred Stock multiplied by the amount of
such payment by (ii) the sum of all such payments.
"Board of Directors" means the Board of Directors or
equivalent governing body of a Person (or the general partner of
such Person, as the case may be) or any committee thereof duly
authorized to act on behalf of such Board or equivalent governing
body.
"Business Day" means a day other than a Saturday,
Sunday or other day on which banking institutions in New York
State are authorized or required by law to close.
"Capitalized Lease Obligations" means an obligation
that is required to be classified and accounted for as a
capitalized lease for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation
determined in accordance with GAAP; and the Stated Maturity
thereof shall be the date of the last payment of rent or any
other amount due under such lease.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations
or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but
excluding any debt securities convertible into such equity.
"Change of Control" means the occurrence of a Change of
Control Event with respect to any Issuer, provided, that any
Change of Control Event (or series of such related events) that
affects only an Insignificant Issuer or, if more than one Issuer
is involved, a group of Issuers that taken together would
constitute an Insignificant Issuer, will be deemed not to
constitute a Change of Control.
"Change of Control Event" means the occurrence of any
of the following events with respect to any Issuer:
(i) prior to the first Public Equity Offering of Voting
Interests of an Issuer, the Permitted Holders cease to be
the "beneficial owner" (as defined in
<PAGE>
Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of a majority in the aggregate of the total
voting power of the Voting Interests of such Issuer, whether
as a result of issuance of securities of such Issuer, any
merger, consolidation, liquidation or dissolution of such
Issuer, any direct or indirect transfer of securities or
otherwise (for purposes of clauses (i), (ii), (iv) and (v),
any "person" (as such term in used in Sections 13(d) and
14(d) of the Exchange Act) or the Permitted Holders shall be
deemed to beneficially own any Voting Interests of an entity
(the "specified entity") held by any other entity (the
"parent entity") so long as such person or the Permitted
Holders, respectively, beneficially own (as so defined),
directly or indirectly, in the aggregate a majority of the
voting power of the Voting Interests of the parent entity);
(ii) after the first Public Equity Offering, (A) any
person (as defined in clause (i) above) other than one or
more Permitted Holders, is or becomes (as a result of the
issuance of securities, by merger, consolidation,
liquidation or dissolution, or otherwise, as described in
clause (i) above) the beneficial owner (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that such
person shall be deemed to have "beneficial ownership" of all
shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than
35% of the total voting power of the Voting Interests of any
Issuer and (B) the Permitted Holders "beneficially own" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, in the aggregate a lesser percentage
of the total voting power of the Voting Interests of such
Issuer than such other person and do not have the right or
ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors
of such Issuer (for the purposes of this clause (ii), such
other person shall be deemed to beneficially own any Voting
Interests of a specified entity held by a parent entity, if
such other person "beneficially owns" (as defined in this
clause (ii)), directly or indirectly, more than 35% of the
voting power of the Voting Interests of such parent entity
and the Permitted Holders "beneficially own" (as defined in
clause (i) above), directly or indirectly, in the aggregate
a
<PAGE>
lesser percentage of the voting power of the Voting
Interests of such parent entity and do not have the right or
ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors
of such parent entity);
(iii) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all,
or substantially all, the assets of any Issuer to any Person
or group of Persons (other than any other Issuer or any
Wholly Owned Subsidiary of an Issuer);
(iv) the merger or consolidation of any Issuer with or
into another corporation with the effect that either (A)
immediately after such transaction any person (as defined in
clause (i) above) (other than a Permitted Holder) shall have
become the "beneficial owner" (as defined in clause (ii)
above) of securities of the surviving corporation of such
merger or consolidation representing a majority of the
voting power of the Voting Interests of the surviving
corporation or (B) the securities of such Issuer that are
outstanding immediately prior to such transaction and which
represent 100% of the voting power of the Voting Interests
of such Issuer are changed into or exchanged for cash,
securities or property, unless pursuant to such transaction
such securities are changed into or exchanged for, in
addition to any other consideration, securities of the
surviving corporation that represent immediately after such
transaction, at least a majority of the voting power of the
Voting Interests of the surviving corporation; or
(v) in the case of an Issuer having a Board of
Directors, after the earlier of the date when (A) the
Permitted Holders "beneficially own" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, less than 35% of the total voting power of the
Voting Interests of any Issuer or (B) the death or
incapacity of Michael S. Egan, in the case of each of clause
(A) and clause (B), individuals who constituted the Board of
Directors of such Issuer immediately prior to such date
(together with (x) any new directors whose election by such
Board of Directors or whose nomination for election by the
shareholders of such Issuer was approved by a vote of 66-
2/3% of the directors of such Issuer then still in office
who were either directors immediately prior to such date or
<PAGE>
whose election or nomination for election was previously so
approved and (y) Norman D. Tripp, if within 30 days of such
death or incapacity of Mr. Egan he becomes a director) cease
for any reason to constitute a majority of the Board of
Directors of such Issuer then in office.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Co-Issuer" means any Issuer which becomes an Issuer
hereunder pursuant to Section 4.14 or otherwise in accordance
with the terms of the Indenture.
"Combined Coverage Ratio" as of any date of
determination means the ratio of (i) the aggregate amount of
EBITDA for the period of the most recent four consecutive fiscal
quarters prior to the date of such determination for which
financial statements are available to (ii) Combined Interest
Expense for such four fiscal quarters; provided, however, that
(1) if an Issuer or any Restricted Subsidiary has Incurred any
Indebtedness (other than Indebtedness Incurred in the ordinary
course of business pursuant to working capital facilities and
which is not anticipated to remain outstanding for more than one
year) since the beginning of such period that remains outstanding
on such date of determination or if the transaction giving rise
to the need to calculate the Combined Coverage Ratio is an
Incurrence of Indebtedness, or both, EBITDA and Combined Interest
Expense for such period shall be calculated after giving effect
on a pro forma basis to such Indebtedness as if such Indebtedness
had been Incurred on the first day of such period and the
discharge of any other Indebtedness repaid, repurchased, defeased
or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day
of such period, (2) if since the beginning of such period an
Issuer or any Restricted Subsidiary shall have disposed of any
Restricted Subsidiary or assets constituting all or substantially
all of an operating unit of a business, the EBITDA for such
period shall be reduced by an amount equal to the EBITDA (if
positive) directly attributable to the Restricted Subsidiary or
assets which are the subject of such disposition for such period
or increased by an amount equal to the EBITDA (if negative)
directly attributable thereto for such period and Combined
Interest Expense for such period shall be reduced by an amount
equal to the Combined Interest Expense directly attributable to
any Indebtedness of an Issuer or any
<PAGE>
Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to such Issuer and its continuing
Restricted Subsidiaries in connection with such disposition for
such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Combined Interest Expense for such period
directly attributable to the Indebtedness of such Restricted
Subsidiary to the extent such Issuer and its continuing
Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale), (3) if since the beginning of such
period an Issuer or any Restricted Subsidiary (by merger or
otherwise) shall have made an Investment in any Restricted
Subsidiary (or any Person which becomes a Restricted Subsidiary)
or an acquisition of assets, including any acquisition of assets
occurring in connection with a transaction causing a calculation
to be made hereunder, which constitutes all or substantially all
of an operating unit of a business, EBITDA and Combined Interest
Expense for such period shall be calculated after giving pro
forma effect thereto (including the Incurrence of any
Indebtedness) as if such Investment or acquisition occurred on
the first day of such period, (4) if since the beginning of such
period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into an Issuer or any Restricted
Subsidiary since the beginning of such period) shall have made
any disposition of assets or any Investment or acquisition of
assets that would have required an adjustment pursuant to clause
(2) or (3) above if made by such Issuer or a Restricted
Subsidiary during such period, EBITDA and Combined Interest
Expense for such period shall be calculated after giving pro
forma effect thereto as if such disposition of assets, Investment
or acquisition of assets occurred on the first day of such period
and (5) if since the beginning of such period an Issuer or any
Restricted Subsidiary shall have repaid, repurchased, defeased or
otherwise discharged any Indebtedness (other than Indebtedness
repaid in the ordinary course of business which was outstanding
under working capital facilities), EBITDA and Combined Interest
Expense for such period shall be calculated after giving effect
on a pro forma basis to such repayment, repurchase, defeasance or
discharge as if it occurred on the first day of such period. For
purposes of this definition, whenever pro forma effect is to be
given to an acquisition of assets, the amount of income or
earnings relating thereto and the amount of Combined Interest
Expense associated with any Indebtedness Incurred in connection
therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting Officer of the
appropriate Issuer. If any
<PAGE>
Indebtedness bears a floating rate of interest and is being given
pro forma effect, the interest expense on such Indebtedness shall
be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period
(taking into account any Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining
term as at the date of determination in excess of 12 months).
"Combined Financial Statements" means the financial
statements of the Issuers prepared on a combined basis consistent
with the accounting principles used in the preparation of the
combined financial statements included in the Prospectus,
consistently applied, or as may otherwise be required to be
prepared in accordance with GAAP or applicable rules and
regulations of the SEC.
"Combined Interest Expense" means, for any period, the
total interest expense of all the Issuers and each of their
consolidated Restricted Subsidiaries on a combined basis,
excluding interest accruing on Permitted Vehicle Indebtedness,
plus, to the extent Incurred by an Issuer and its Subsidiaries in
such period but not included in such interest expense, (i)
interest expense attributable to Capital Lease Obligations, (ii)
amortization of debt discount and debt issuance cost, (iii)
capitalized interest, (iv) non-cash interest expense, (v)
commissions, discounts and other fees and charges with respect to
letters of credit and bankers' acceptance financing to the extent
any such commissions, discounts, fees or charges are treated as
interest expense under GAAP, (vi) net costs associated with
Hedging Obligations (including amortization of fees), (vii)
Preferred Stock dividends in respect of all Preferred Stock held
by Persons other than an Issuer or a Wholly Owned Subsidiary of
an Issuer, (viii) interest incurred in connection with
Investments in discontinued operations, (ix) interest actually
paid by an Issuer or Restricted Subsidiary pursuant to a
Guarantee of Indebtedness or other obligation of any other Person
and (x) the cash contributions to any employee stock ownership
plan or similar trust to the extent such contributions are used
by such plan or trust to pay interest or fees to any Person
(other than an Issuer) in connection with Indebtedness Incurred
by such plan or trust.
"Combined Net Income" means, for any period, the total
net income (loss) of all the Issuers and each of their
consolidated Subsidiaries on a combined basis; provided,
<PAGE>
however, that there shall not be included in such Combined Net
Income: (i) any net income (loss) of any Person if such Person is
not a Restricted Subsidiary, except that (A) subject to the
limitations contained in clause (iv) below, an Issuer's equity in
the net income of any such Person for such period shall be
included in such Combined Net Income up to the aggregate amount
of cash actually distributed by such Person during such period to
an Issuer or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations
contained in clause (iii) below) and (B) an Issuer's equity in a
net loss of any such Person (other than an Unrestricted
Subsidiary) for such period shall be included in determining such
Combined Net Income, (ii) any net income (loss) of any person
acquired by an Issuer or a Subsidiary in a pooling of interests
transaction for any period prior to the date of such acquisition,
(iii) any net income (loss) of any Restricted Subsidiary if such
Subsidiary is subject to restrictions, directly or indirectly, on
the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to an Issuer,
except that (A) subject to the limitations contained in (iv)
below, such Issuer's equity in the net income of any such
Restricted Subsidiary for such period shall be included in such
Combined Net Income up to the aggregate amount of cash that could
have been distributed by such Restricted Subsidiary during such
period to such Issuer or another Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a
dividend or other distribution that could have been made to
another Restricted Subsidiary, to the limitation contained in
this clause) and (B) such Issuer's equity in a net loss of any
such Restricted Subsidiary for such period shall be included in
determining such Combined Net Income, (iv) any gain or loss
realized upon the sale or other disposition of any asset of an
Issuer or its consolidated Subsidiaries (including pursuant to
any Sale/Leaseback Transaction) which is not sold or otherwise
disposed of in the ordinary course of business and any gain or
loss realized upon the sale or other disposition of any Capital
Stock of any Person, (v) any extraordinary gain or loss and (vi)
the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purpose of Section 4.04
only, there shall be excluded from Combined Net Income any
dividends, repayments of loans or advances or other transfers of
assets from Unrestricted Subsidiaries to an Issuer or a
Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the
<PAGE>
amount of Restricted Payments permitted under such Section
pursuant to clause (a)(3)(E) thereof.
"Combined Net Profits Before Taxes" means the net
profits of the Issuers, before state and federal income taxes and
foreign income and withholding taxes and before payment of
compensation, fees, or bonuses to shareholders or partners of the
Issuers, on a combined basis.
"Combined Net Worth" means the total Consolidated Net
Worth of all the Issuers on a combined basis.
"Combined Revenues" means the total revenue of the
Issuers on a combined basis as shown in the Combined Financial
Statements.
"Consolidated Net Worth" means the total of the amounts
shown on the balance sheet of an Issuer and its Restricted
Subsidiaries, determined on a Consolidated basis, as of the end
of the most recent fiscal quarter of such Issuer prior to the
taking of any action for the purpose of which the determination
is being made for which financial statements are available, as
(i) the par or stated value of all outstanding Capital Stock of
such Issuer plus (ii) paid-in capital or capital surplus relating
to such Capital Stock plus (iii) any retained earnings or earned
surplus less (A) any accumulated deficit and (B) any amounts
attributable to Disqualified Stock.
"Consolidation" means the consolidation of the accounts
of an Issuer with each of its Restricted Subsidiaries in
accordance with GAAP consistently applied; provided, however,
that "Consolidation" will not include consolidation of the
accounts of any Unrestricted Subsidiary, but the interest of such
Issuer or any such Restricted Subsidiary in an Unrestricted
Subsidiary will be accounted for as an investment. The term
"Consolidated" has a correlative meaning.
"Credit Agreements" means the Term Loan Agreement,
dated April 26, 1994, between Alamo Rent-A-Car, Inc. and Mellon
Bank, N.A., as amended as of the date hereof; the Promissory
Note, dated April 16, 1995, between Alamo Rent-A-Car, Inc. and
NationsBank of Florida, N.A.; the Loan Agreement, dated as of
December 28, 1994, between Alamo Rent-A-Car (UK) Limited and The
First National Bank of Boston; the Loan Agreement, dated as of
December 22, 1994, between Guy Salmon USA, Ltd. and The First
National Bank of
<PAGE>
Boston; the Agreement, dated as of March 26, 1993, between
Volksbank Hanover EG and Autohansa Fuhrpark Service GmbH; the
Loan Agreement, dated as of June 15, 1995, between DKBERT Assoc.
and General Motors Acceptance Corporation; the Promissory Note,
dated as of December 29, 1995, between DKBERT Assoc. and First
Union National Bank of Florida; the Agreement, dated June 6,
1995, between Alamo Belgium and Kredietbank; and the Purchase
Agreement, dated as of October 25, 1994, among Alamo Rent-A-Car,
Inc., Stefan-Juergen Peters and Dose and Peter GmbH.
"Currency Agreement" means in respect of a Person any
foreign exchange contract, currency swap agreement or other
similar agreement as to which such Person is a party or a
beneficiary.
"Default" means any event which is, or after notice or
passage of time or both would be, an Event of Default.
"Depositary" means the Depository Trust Company, its
nominees and their respective successors.
"Disqualified Stock" means, with respect to any Person,
any Capital Stock which by its terms (or by the terms of any
security into which it is convertible or for which it is
exchangeable or exercisable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking
fund obligation or otherwise, (ii) is convertible or exchangeable
for Indebtedness or Disqualified Stock or (iii) is redeemable at
the option of the holder thereof, in each case in whole or in
part, and in each case on or prior to the first anniversary of
the Stated Maturity of the Securities.
"DKBERT Partnership Agreement" means the Partnership
Agreement among Michael S. Egan, William H. Kelly, Jr. and Norman
D. Tripp, dated January 14, 1986, as amended, which governs the
management of and certain other matters relating to DKBERT
Assoc., as such agreement may be amended, supplemented or
otherwise modified from time to time.
"EBITDA" for any period means the Combined Net Income
for such period, plus the following to the extent
<PAGE>
deducted in calculating such Combined Net Income: (i) income tax
expense, (ii) Combined Interest Expense, (iii) non-vehicle-
related depreciation expense and (iv) non-vehicle-related
amortization expense, in each case for such period.
Notwithstanding the foregoing, the provision for taxes based on
the income or profits of, and the depreciation and amortization
of, a Subsidiary of an Issuer shall be added to Combined Net
Income to compute EBITDA only to the extent (and in the same
proportion) that the Net Income of such Subsidiary was included
in calculating Combined Net Income and only if a corresponding
amount would be permitted at the date of determination to be
dividended to such Issuer by such Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable
to such Subsidiary or its stockholders.
"Eligible Vehicles" shall mean fleet and service
vehicles used in the short-term vehicle rental business.
"Equity Interests" means, with respect to a corporate
Issuer, common stock of such Issuer and, with respect to any
other type of Issuer, the equity equivalent of common stock.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"GAAP" means generally accepted accounting principles
in the United States of America as in effect as of the Issue
Date, including those set forth in the opinions and
pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a
significant segment of the accounting profession. All ratios and
computations based on GAAP contained in this Indenture shall be
computed in conformity with GAAP.
"Green Corn Shareholders Agreement" means the
Shareholders Agreement relating to Green Corn, Inc, among Michael
S. Egan, William H. Kelly, Jr., Norman D. Tripp and two former
shareholders dated January 24, 1986, as such agreement may be
amended, supplemented or otherwise modified from time to time.
<PAGE>
"Guarantee" means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of
such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or
in part); provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"GUSA Partnership Agreement" means the Partnership
Agreement among Guy Salmon USA, Inc., Michael S. Egan, Norman D.
Tripp and William H. Kelly, Jr. dated May 21, 1991, as amended,
which governs the management and certain other matters relating
to Guy Salmon USA, Ltd., as such agreement may be amended,
supplemented or otherwise modified from time to time.
"Hedging Obligations" of any Person means the
obligations of such Person pursuant to any Interest Rate
Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose
name a Security is registered on the Registrar's books.
"Included Holders" means each of Michael S. Egan,
Norman D. Tripp and William H. Kelly, Jr., and shall also include
any transferee with respect to Capital Stock of an Insignificant
Issuer transferred by any of the foregoing in connection with or
in anticipation of a sale or other transfer of Capital Stock of
an Insignificant Issuer which constitutes a Change of Control
Event with respect to such Insignificant Issuer.
"Incur" means issue, assume, Guarantee, incur or
otherwise become liable for; provided, however, that any
Indebtedness or Capital Stock of a Person existing at the time
such Person becomes a Subsidiary or Co-Issuer (whether
<PAGE>
by merger, consolidation, acquisition or otherwise) shall be
deemed to be Incurred by such Person at the time it becomes a
Subsidiary or Co-Issuer.
"Indebtedness" means, with respect to any Person on any
date of determination (without duplication),
(i) the principal of and premium (to the extent paid or
payable at the time of determination) in respect of
indebtedness of such Person for borrowed money;
(ii) the principal of and premium (to the extent paid
or payable at the time of determination) in respect of
obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including
reimbursement obligations with respect thereto);
(iv) all obligations of such Person to pay the deferred
and unpaid purchase price of property (except Trade
Payables), which purchase price is due more than six months
after the date of placing such property in service or taking
delivery and title thereto;
(v) all Capitalized Lease Obligations and all
Attributable Debt of such Person;
(vi) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of
any Disqualified Stock or, with respect to any Subsidiary of
an Issuer, any Preferred Stock (but excluding, in each case,
any accrued dividends);
(vii) all Indebtedness of other Persons secured by a
Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided, however,
that the amount of Indebtedness of such Person shall be the
lesser of (A) the fair market value of such asset at such
date of determination and (B) the amount of such
Indebtedness of such other Persons;
(viii) all Indebtedness of other Persons to the extent
Guaranteed by such Person; and
<PAGE>
(ix) to the extent not otherwise included in this
definition, Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations
as described above and the maximum liability, upon the occurrence
of the contingency giving rise to the obligation, of any
contingent obligations at such date.
"Indenture" means this Indenture as amended or
supplemented from time to time by one or more supplemental
indentures entered into pursuant to the applicable provisions
hereof or otherwise in accordance with the terms hereof.
"Insignificant Issuer" means an Issuer other than
DKBERT Assoc. which accounts for less than 10% of the Issuers'
Combined Revenues for the most recent four consecutive fiscal
quarters for which financial statements are available.
"Interest Rate Agreement" means with respect to any
Person any interest rate protection agreement, interest rate
future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement or other similar
agreement or arrangement as to which such Person is party or a
beneficiary.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers and suppliers in
the ordinary course of business that are recorded as accounts
receivable on the balance sheet of such Person) or other
extension of credit (including by way of Guarantee or similar
arrangement) or capital contribution to (by means of any transfer
of cash or other property to others or any payment for property
or services for the account or use of others), or any purchase or
acquisition of Capital Stock, Indebtedness or other similar
instruments issued by such Person. For purposes of the
definition of "Unrestricted Subsidiary" and Section 4.04, (i)
"Investment" shall include the portion (proportionate to an
Issuer's equity interest in such Subsidiary) of the fair market
value of the net assets of any Subsidiary of an Issuer at the
time that such Subsidiary is designated an Unrestricted
Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, such Issuer shall be
deemed to continue to have a permanent "Investment"
<PAGE>
in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) such Issuer's "Investment" in such Subsidiary at the time of
such redesignation less (y) the portion (proportionate to such
Issuer's equity interest in such Subsidiary) of the fair market
value of the net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value
at the time of such transfer, in each case as determined in good
faith by the Board of Directors of such Issuer.
"Issue Date" means the date on which the Securities are
originally issued.
"Issuer" means any Person which becomes a Co-Issuer
hereunder pursuant to Section 4.14 or otherwise in accordance
with the Indenture and each party named as such in this
Indenture, in each case until a successor replaces it and,
thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other
obligor on the indenture securities.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any
conditional sale or other title retention agreement or lease in
the nature thereof).
"Net Available Cash" from an Asset Disposition or sale
of Capital Stock of an Insignificant Issuer (a "Disposition")
means cash payments received (including any cash payments
received by way of deferred payment of principal pursuant to a
note or installment receivable or otherwise, but only as and when
received, but excluding any other consideration received in the
form of assumption by the acquiring person of Indebtedness or
other obligations relating to the properties or assets that are
the subject of such Disposition or received in any other non-cash
form) therefrom, in each case net of (i) all legal, accounting,
title and recording tax expenses, commissions and other fees and
expenses (including consulting, advisor and investment banker
expenses) incurred, and all federal, state, provincial, foreign
and local taxes required to be paid or accrued as a liability
under GAAP or distributed to shareholders and partners to be
paid, as a consequence of such Disposition, (ii) all payments
made on any Indebtedness which is secured by any assets subject
to such Disposition, in accordance with the terms of any Lien
upon such assets, or which must by its terms, or in order to
obtain a
<PAGE>
necessary consent to such Disposition, or by applicable law be
repaid out of the proceeds from such Disposition, (iii)(A) all
distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of
such Disposition and (B) all distributions and other payments
made to minority interest holders (other than Included Holders)
in Insignificant Issuers as a result of such Disposition and (iv)
appropriate amounts to be provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the
assets disposed of in such Disposition and retained by an Issuer
or Restricted Subsidiary after such Disposition.
"Net Available Proceeds" from a sale of Capital Stock
of an Insignificant Issuer shall mean, in the case of cash
payments received, the Net Available Cash with respect thereto,
and in the case of other kinds of property received, such
property net of (i) all legal, accounting, title and recording
tax expenses, commissions and other fees and expenses (including
consulting, advisor and investment banker expenses) incurred, and
all federal, state, provincial, foreign and local taxes required
to be paid or accrued as a liability under GAAP or distributed to
shareholders and partners to be paid, as a consequence of such
sale, (ii) all payments made on any Indebtedness which is secured
by any assets subject to such sale, in accordance with the terms
of any Lien upon such assets, or which must by its terms, or in
order to obtain a necessary consent to such sale, or by
applicable law be repaid out of the proceeds from such sale,
(iii) all distributions and other payments made to minority
interest holders (other than Included Holders) in such
Insignificant Issuer as a result of such sale and (iv)
appropriate amounts to be provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the
assets disposed of in such sale and retained by an Issuer or
Restricted Subsidiary after such sale.
"Net Cash Proceeds", with respect to any issuance or
sale of Capital Stock, means the cash proceeds of such issuance
or sale net of attorneys' fees, accountants' fees, underwriters'
or placement agents' fees, discounts or commissions and
brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
<PAGE>
"Non-Recourse Tax Debt" means Indebtedness of an Issuer
Incurred in connection with a Public Equity Offering or a sale of
Equity Interests to a Strategic Investor by such Issuer, if such
Issuer qualifies as an S Corporation prior to such offering or
sale, and issued to the shareholders of such Issuer, in an
aggregate principal amount outstanding not to exceed the amount
of such Issuer's "accumulated adjustments account" within the
meaning of Code section 1368(e) as of the period ending on the
closing date of such offering or sale; provided, however, that
such Indebtedness is not in excess of the Net Cash Proceeds of
such Public Equity Offering or such sale of Equity Interests to a
Strategic Investor and is non-recourse to all other assets of the
Issuer.
"Officer" means the Chairman of the Board, any Vice
Chairman, the Chief Executive Officer, the Chief Financial
Officer, the President, any Executive Vice President, the
Treasurer, the Secretary or any General Partner of an Issuer.
"Officers' Certificate" means a certificate signed by
two Officers, one of which is the Chairman of the Board, the
Chief Executive Officer, the Chief Financial Officer, the
President, any Executive Vice President or any General Partner.
"Opinion of Counsel" means a written opinion from
legal counsel who is reasonably acceptable to the Trustee. The
counsel may be an employee of or counsel to an Issuer or the
Trustee.
"Permitted Holders" means (i) Michael S. Egan, (ii) in
the event of his death or incapacity, his estate (and executors,
administrators, committees or other personal representatives) and
surviving spouse and lineal descendants (or any trust with
respect to which any such persons are the beneficiaries to the
extent of such persons' beneficial interest in such trust), (iii)
any trusts created for the benefit of any of Michael S. Egan or
his spouse or lineal descendants or any trust for the benefit of
such a trust, provided that no trust described in this clause
(iii) with respect to which Michael S. Egan does not exercise
voting control shall be deemed to be a Permitted Holder with
respect to the Voting Interests of an Issuer unless individuals
who constituted the Board of Directors (or equivalent governing
body) of such Issuer immediately prior to the date on which
Michael S. Egan ceased to exercise such voting control and are
then still in office (together with
<PAGE>
(x) any new directors whose election by such Board of Directors
or whose nomination for election by the shareholders of such
Issuer was approved by a vote of 66-2/3% of the directors of such
Issuer then still in office who were either directors immediately
prior to such date or whose election or nomination for election
was previously so approved and (y) Norman D. Tripp, if he becomes
a director within 30 days of such date) continue and have
continued without interruption to constitute a majority of the
Board of Directors of such Issuer then in office, or (iv) any
Affiliate of Michael S. Egan.
"Permitted Investment" means an Investment by an Issuer
or any Restricted Subsidiary in (i) another Issuer, a Restricted
Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary; (ii) another Person
if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or
substantially all its assets to, an Issuer or a Restricted
Subsidiary; (iii) Temporary Cash Investments; (iv) receivables
owing to an Issuer or any Restricted Subsidiary, if created or
acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary
trade terms as such Issuer or any such Restricted Subsidiary
deems reasonable under the circumstances; (v) payroll, travel and
similar advances to cover matters that are expected at the time
of such advances ultimately to be treated as expenses for
accounting purposes and that are made in the ordinary course of
business; (vi) loans or advances to employees made in the
ordinary course of business consistent with past practices of an
Issuer or such Restricted Subsidiary; (vii) stock, obligations or
securities received in settlement of debts created in the
ordinary course of business and owing to an Issuer or any
Restricted Subsidiary or in satisfaction of judgments; (viii)
Investments acquired by an Issuer or a Restricted Subsidiary in
connection with any Asset Disposition permitted under Section
4.06 to the extent such Investments are the non-cash
consideration as permitted under such Section; (ix) Guarantees
given in accordance with the terms of this Indenture (including
the Tripperoo Guarantee); (x) Indebtedness held by an Issuer or a
Restricted Subsidiary which was issued in accordance with Section
4.03(b)(ii); and (xi) the designation of each Restricted
Subsidiary primarily conducting business in Europe and, at the
Issuers' election, Alamo Belgium (except, at the Issuers'
election, Restricted Subsidiaries to the
<PAGE>
extent that such entities in the aggregate account for less than
10% of the Issuers' Combined Revenues from operations in Europe
for the most recent fiscal year for which audited financial
statements are available) as an Unrestricted Subsidiary (each
entity so designated, a "European Subsidiary") in connection with
a Significant Acquisition, provided that on or prior to the date
of such designation (A) all Guarantees of Indebtedness or other
obligations of all European Subsidiaries by any Issuer or
Restricted Subsidiary (other than a European Subsidiary) shall
have been released or terminated, (B) all Indebtedness of all
European Subsidiaries to any Issuer or Restricted Subsidiary
(other than a European Subsidiary) shall have been repaid in full
and (C) the Issuers shall cause Alamo Belgium if so designated to
become a Subsidiary of an Issuer which is to remain an Issuer.
For purposes of clause (xi)(B) of this definition, all
Investments by any Issuer or Restricted Subsidiary in any
European Subsidiary in the form of equity Investments or other
capital contributions (whether by means of any transfer of cash
or other property to, or any payment for property or services for
the account or use of, or the purchase or acquisition of Capital
Stock of, any European Subsidiary, or otherwise) on or after the
Issue Date shall be deemed to constitute Indebtedness to an
Issuer or Restricted Subsidiary. In connection with any assets
or property contributed or transferred to any Person as an
Investment, such property and assets shall be valued at the fair
market value (as determined in good faith by the Board of
Directors of the applicable Issuer or Restricted Subsidiary) at
the time of the Investment.
"Permitted Liens" means, with respect to any Person,
(a) pledges or deposits by such Person under workmen's
compensation laws, unemployment insurance laws or similar
legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness)
or leases to which such Person is a party, or deposits to secure
public or statutory obligations of such Person or deposits of
cash or United States government bonds to secure surety or appeal
bonds to which such Person is a party, or deposits as security
for contested taxes or import duties or for the payment of rent,
in each case Incurred in the ordinary course of business; (b)
Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet due or being
contested in good faith by appropriate proceedings or other Liens
arising out of judgments or awards against such Person with
respect to which such Person shall then be proceeding with an
appeal or
<PAGE>
other proceedings for review; (c) Liens for property taxes not
yet due or payable or subject to penalties for non-payment and
which are being contested in good faith by appropriate
proceedings; (d) Liens in favor of issuers of surety bonds or
letters of credit issued pursuant to the request of and for the
account of such Person in the ordinary course of its business;
(e) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-
way, sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as to the
use of real properties or Liens incidental to the conduct of the
business of such Person or to the ownership of its properties
which were not Incurred in connection with Indebtedness and which
do not in the aggregate materially adversely affect the value of
said properties or materially impair their use in the operation
of the business of such Person; (f) Liens securing Indebtedness
Incurred to finance the construction, purchase or lease of, or
repairs, improvements or additions to, property; provided,
however, that the Lien may not extend to any other property owned
by an Issuer or any Restricted Subsidiary at the time the Lien is
Incurred, and the Indebtedness secured by the Lien may not be
Incurred more than 365 days after the later of the acquisition,
completion of construction, repair, improvement, addition or
commencement of full operation of the property subject to the
Lien; (g) Liens to secure Capital Lease Obligations permitted to
be Incurred under this Indenture and Liens to secure Indebtedness
permitted pursuant to Section 4.03(b)(i); (h) Liens securing
Permitted Vehicle Indebtedness and covering cash collateral
deposits, vehicles and assets attributable to, or directly
associated with, vehicles, such as rental receivables and
receivables arising on the disposition of vehicles, and any other
property of a type securing Permitted Vehicle Indebtedness under
an agreement as in effect on the Issue Date; (i) Liens existing
on the Issue Date or arising under an agreement as in effect on
the Issue Date; (j) Liens on property or shares of stock of a
Person at the time such Person becomes a Subsidiary or Issuer;
provided, however, such Liens are not created, Incurred or
assumed in connection with, or in contemplation of, such other
Person becoming such a Subsidiary or Issuer; provided further,
however, that such Liens may not extend to any other property
owned by an Issuer or any Restricted Subsidiary; (k) Liens on
property at the time an Issuer or a Restricted Subsidiary
acquired the property, including any acquisition by means of a
merger or consolidation with or into an Issuer or any Restricted
<PAGE>
Subsidiary; provided, however, that such Liens are not created,
Incurred or assumed in connection with, or in contemplation of,
such acquisition; provided further, however, that the Liens may
not extend to any other property owned by an Issuer or any
Restricted Subsidiary; (l) Liens securing Indebtedness or other
obligations of a Restricted Subsidiary owing to an Issuer or a
Wholly Owned Subsidiary or of an Issuer owing to an Issuer or a
Wholly Owned Subsidiary; (m) Liens securing Hedging Obligations
so long as the related Indebtedness is, and is permitted to be
under this Indenture, secured by a Lien on the same property
securing such Hedging Obligations; (n) Liens to secure any
refinancing, refunding, extension, renewal or replacement (or
successive refinancings, refundings, extensions, renewals or
replacements) as a whole, or in part, of any Indebtedness secured
by any Lien referred to in the foregoing clauses (f), (i), (j)
and (k); provided, however, that (x) such new Lien shall be
limited to all or part of the same property that secured the
original Lien (plus improvements on such property) and (y) the
Indebtedness secured by such Lien at such time is not increased
to any amount greater than the outstanding principal amount of
the Indebtedness described under clauses (f), (i), (j) or (k) at
the time the original Lien became a Permitted Lien under this
Indenture plus, in each case, the amount of any premium
reasonably determined in good faith by the applicable Issuer or
Restricted Subsidiary as necessary at the time of such
refinancing, refunding, extension, renewal or replacement to
accomplish the foregoing by means of a tender offer or privately
negotiated transaction or required pursuant to the terms thereof,
plus the amount of expenses of such Issuer and Restricted
Subsidiary Incurred in connection with the foregoing; (o) Liens
on any airport concession agreements or permits to secure loans
extended to finance tenant improvements used in connection with
the concession agreement or permit subject to such Lien; (p)
Liens on claims against Persons renting vehicles, Persons
damaging vehicles or Persons issuing applicable insurance
coverage for such Persons arising under insurance policies
entered into in the ordinary course of business consistent with
past practice; and (q) rights of set off which arise under
contractual arrangements in the ordinary course of business or
which arise in financing agreements in the ordinary course of
business.
"Permitted Shareholder Amendments" means amendments to
the Alamo Shareholders Agreement and the Green Corn Shareholders
Agreement to provide that upon the death
<PAGE>
of Norman D. Tripp and William H. Kelly, Jr., Alamo Rent-A-Car,
Inc., and Green Corn, Inc., respectively, will purchase the
shares of Alamo Rent-A-Car, Inc. and Green Corn, Inc. owned by
Norman D. Tripp and William H. Kelly, Jr. (and their controlled
entities and family transferees) in the event Michael S. Egan
does not purchase such shares.
"Permitted Share Repurchase Indebtedness" means the
notes contemplated by Section 7 of the Alamo Shareholders
Agreement, Section 12 of the DKBERT Partnership Agreement,
Section 10.01 of the GUSA Partnership Agreement and Section 7 of
the Green Corn Shareholders Agreement and by the Peters
Shareholder Agreement, each as in effect on the Issue Date.
"Permitted Vehicle Collateral" means, as of any
Determination Date, the collateral securing Permitted Vehicle
Indebtedness and consisting of cash collateral deposits, Eligible
Vehicles and rental receivables and receivables arising from the
acquisition or disposition of Eligible Vehicles, provided that
such acquisition or disposition receivables shall be included as
Permitted Vehicle Collateral only to the extent that (i) such
receivables arise pursuant to the acceptance of vehicles for
repurchase under a repurchase agreement with a repurchase party
(provided the debt of such repurchase party has an investment
grade rating or, if the debt of such repurchase party does not
have a rating, the debt of the parent entity of such repurchase
party has an investment grade rating) as of such Determination
Date providing for the repurchase of such vehicles at a price
substantially equivalent to depreciated book value at the
anticipated disposition date or (ii) such receivables are secured
by a first priority lien under applicable law (except for liens
arising under applicable law) on the related vehicles or (iii)
the collateral value of such receivables does not exceed the
value for such receivables determined in accordance with the
provisions of any applicable investment-grade rated debt facility
designed to finance Eligible Vehicles and related receivables or
(iv) such receivables have been outstanding not in excess of 60
days, provided that in the case of this clause (iv) (A) the
collateral value of such receivables shall be valued at 85% of
their net book value determined in accordance with GAAP, (B) the
collateral value of such receivables so valued shall not exceed
10% of the total net book value of Permitted Vehicle Collateral
and (C) the collateral value of such receivables so valued
arising from any Person (or Persons which are Affiliates of such
Person)
<PAGE>
shall not exceed 2% of the total net book value of Permitted
Vehicle Collateral or (v) such receivables are fully and
unconditionally insured, bonded or guaranteed by a Person with an
investment grade rating. Permitted Vehicle Collateral shall be
valued (except as set forth in clause (iv)(A) above) at the net
book value determined in accordance with GAAP of the relevant
Eligible Vehicles and receivables.
"Permitted Vehicle Indebtedness" means (i) Indebtedness
incurred to finance or refinance Eligible Vehicles and related
receivables and (ii) other Indebtedness Incurred on a short-term
basis for working capital purposes in the ordinary course of
business.
"Person" means any individual, corporation,
partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision
thereof or any other entity.
"Peters Shareholder Agreement" means the Shareholders
Agreement among Alamo Europe and Stefan-Juergen Peters, dated as
of December 22, 1994, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"Preferred Stock", as applied to the Capital Stock of
any Person, means Capital Stock of any class or classes (however
designated) which is preferred as to the payment of dividends, or
as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such corporation, over
shares of Capital Stock of any other class of such corporation.
"principal" of a Security means the principal of the
Security plus the premium, if any, payable on the Security which
is due or overdue or is to become due at the relevant time.
"Prospectus" means the Prospectus dated February 13,
1996, prepared in connection with the issuance of the Securities.
"Public Equity Offering" means an underwritten primary
public offering of Equity Interests of an Issuer pursuant to an
effective registration statement under the Securities Act.
<PAGE>
"Public Market" means any time after (x) a Public
Equity Offering by an Issuer has been consummated and (y) at
least 10% of the total issued and outstanding Equity Interests of
such Issuer has been distributed by means of an effective
registration statement under the Securities Act.
"Refinancing Indebtedness" means Indebtedness that is
Incurred to refund, refinance, replace, renew, repay or extend
(including pursuant to any defeasance or discharge mechanism)
(collectively, "refinances," and "refinanced" shall have a
correlative meaning) any Indebtedness existing on the date of
this Indenture or Incurred in compliance with this Indenture
(including Indebtedness of an Issuer that refinances Indebtedness
of another Issuer or any Restricted Subsidiary (to the extent
permitted in this Indenture) and Indebtedness of any Restricted
Subsidiary that refinances Indebtedness of another Restricted
Subsidiary) including Indebtedness that refinances Refinancing
Indebtedness; provided, however, that (i) the Refinancing
Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being refinanced, (ii) the
Refinancing Indebtedness has an Average Life at the time such
Refinancing Indebtedness is Incurred that is equal to or greater
than the Average Life of the Indebtedness being refinanced and
(iii) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue discount, an
aggregate issue price) that is not greater than the aggregate
principal amount (or if issued with original issue discount, the
aggregate accreted value) then outstanding (or, with respect to
Section 4.03(b)(i), the committed and available amount) of the
Indebtedness being refinanced plus the amount of any premium
reasonably determined by the applicable Issuer or Restricted
Subsidiary as necessary at the time of such Refinancing to
accomplish such refinancing or required pursuant to the terms
thereof, plus the amount of expenses of such Issuer or Restricted
Subsidiary Incurred in connection with such Refinancing; provided
further, however, that Refinancing Indebtedness shall not include
(x) Indebtedness of a Restricted Subsidiary that refinances
Indebtedness of an Issuer or (y) Indebtedness of an Issuer or a
Restricted Subsidiary that refinances Indebtedness of an
Unrestricted Subsidiary. For purposes of Section 4.03(b)(i),
Refinancing Indebtedness must be denominated in the same currency
as the Indebtedness being refinanced and shall not exceed the
amount committed to, expressed in local currency, on the Issue
Date.
"Related Business" means any business related,
ancillary or complementary to any of the businesses of the
Issuers and the Restricted Subsidiaries on the Issue Date.
"Restricted Subsidiary" means any Subsidiary of an
Issuer other than an Unrestricted Subsidiary.
<PAGE>
"Rising Moon" means Rising Moon, Inc., a Florida
corporation.
"Rising Moon Management Agreements" means the
agreements effective as of January 1, 1996, between Rising Moon
and each of the Issuers, as in effect on the Issue Date.
"S Corporation" means a corporation qualifying as a
subchapter S corporation under the Code.
"Sale/Leaseback Transaction" means an arrangement
relating to property now owned or hereafter acquired whereby an
Issuer or a Restricted Subsidiary transfers such property to a
Person and an Issuer or a Restricted Subsidiary leases it from
such Person, other than leases between an Issuer and a Wholly
Owned Subsidiary or between Wholly Owned Subsidiaries or between
Issuers.
"SEC" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or
if at any time after the execution of this Indenture the SEC is
not existing and performing the duties now assigned to it under
the TIA, then the body performing such duties at such time.
"Secured Indebtedness" means any Indebtedness of an
Issuer secured by a Lien.
"Securities" means the Securities issued under this
Indenture.
"Senior Debt" means all Indebtedness of any Issuer
including interest thereon, whether outstanding on the Issue Date
or thereafter Incurred, unless in the instrument creating or
evidencing the same or pursuant to which the same is outstanding
it is provided that such obligations are subordinated in right of
payment to the Securities; provided, however, that Senior Debt
shall not include (1) any obligation of an Issuer to any
Subsidiary or to another Issuer, (2) any liability for federal,
state, local or other taxes owed or owing by an Issuer, (3) any
accounts payable or other liability to trade creditors arising in
the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities), (4) any Indebtedness or
obligation of an Issuer which is subordinate or junior in any
respect to any other Indebtedness or obligation of such Issuer,
including any Subordinated
<PAGE>
Obligations, (5) any obligations with respect to any Capital
Stock, or (6) any Indebtedness Incurred in violation of this
Indenture.
"Shareholder Loan Agreement" means the Agreement dated
as of March 30, 1990, between NationsBank of Georgia, N.A., and
Michael S. Egan, as such agreement may be amended, supplemented
or modified from time to time.
"Shareholder Loan Payments" means interest and
principal payments required to be made pursuant to the
Shareholder Loan Agreement as in effect on the Issue Date, as
such agreement may be amended or refinanced without increasing
the rate of interest payable thereunder in excess of a market
rate of interest charged by an unaffiliated third party financial
institution or increasing the aggregate principal amount then
outstanding thereunder or reducing the Average Life of the loans
thereunder.
"Share Repurchase Payments" means distributions,
including, without limitation, distributions in respect of
Permitted Share Repurchase Indebtedness, (i) in connection with
the repurchase upon the death of Norman D. Tripp and William H.
Kelly, Jr. of shares or partnership interests owned by Norman D.
Tripp and William H. Kelly, Jr. (and their controlled entities
and family transferees), pursuant to the Alamo Shareholders
Agreement as in effect on the Issue Date or as amended by a
Permitted Shareholder Amendment (or terms substantially similar
thereto) and pursuant to any other shareholders or partnership
agreement with respect to any Issuer (other than Alamo Rent-A-
Car, Inc., DKBERT Assoc., Guy Salmon USA, Ltd., Guy Salmon USA,
Inc. and Green Corn, Inc.), in an aggregate amount not to exceed
$3.5 million in any year (subject to adjustment as provided in
Section 7(d) of the Alamo Shareholders Agreement and as provided
in any provision in such other shareholders or partnership
agreement which is substantially similar to Section 7 of the
Alamo Shareholders Agreement); (ii) in connection with the
repurchase upon the death of Norman D. Tripp and William H.
Kelly, Jr. of the partnership interests owned by Norman D. Tripp
and William H. Kelly, Jr. (and their controlled entities and
family transferees), pursuant to the DKBERT Partnership Agreement
as in effect on the Issue Date (or terms substantially similar
thereto), in an amount not to exceed $1 million in any year
(subject to adjustment as provided in clause (i) of the fifth
paragraph of Section 12 therein); (iii) in connection with the
repurchase upon the death of Norman D. Tripp and William H.
<PAGE>
Kelly, Jr., of shares owned by Norman D. Tripp and William H.
Kelly, Jr. (and their controlled entities and family
transferees), pursuant to the Green Corn Shareholders Agreement
as in effect on the Issue Date or as amended by a Permitted
Shareholder Amendment (or terms substantially similar thereto),
in an amount not to exceed $400,000 in any year (subject to
adjustment as provided in Section 7(d)(i) therein); (iv) in
connection with the repurchase upon the death of Norman D. Tripp
and William H. Kelly, Jr., of shares or equity partnership
interests owned by Norman D. Tripp and William H. Kelly, Jr. (and
their controlled entities and family transferees), pursuant to
the GUSA Partnership Agreement as in effect on the Issue Date (or
terms substantially similar thereto) and pursuant to a
shareholders agreement with respect to Guy Salmon USA, Inc., in
an aggregate amount not to exceed $1 million in any year (subject
to adjustment as provided in clause (i) of the fifth paragraph of
Section 10.01 of the GUSA Partnership Agreement and as provided
in any provision in such other shareholders agreement which is
substantially similar to Section 10.01 of the GUSA Partnership
Agreement); and (v) in connection with the required repurchase of
shares of stock of Lone Tree Rent-A-Car GmbH and Affiliated
Entities (as defined in the Peters Shareholder Agreement) owned
by Stefan-Juergen Peters pursuant to the Peters Shareholder
Agreement as in effect on the Issue Date (or terms substantially
similar thereto). In the event that any of Alamo Rent-A-Car,
Inc., DKBERT Assoc., Guy Salmon USA, Inc., Guy Salmon USA, Ltd.
and Green Corn, Inc. merges into or is otherwise acquired by any
other of these Issuers, the aggregate amount under the applicable
clause above for such other named Issuer shall be increased by
the dollar amount allocated to the Issuer so merged or acquired.
"Significant Acquisition" means a transaction or a
series of related transactions resulting in the acquisition by an
Issuer or any of its Subsidiaries of a majority of the Voting
Interests of an entity deriving annual revenues from the
short-term vehicle rental business in Europe in excess of
$500,000,000.
"Significant Subsidiary" means any Restricted
Subsidiary that would be a "Significant Subsidiary" of an Issuer
within the meaning of Rule 1-02 under Regulation S-X promulgated
by the SEC.
"Stated Maturity" means, with respect to any security,
the date specified in such security as the fixed
<PAGE>
date on which the payment of principal of such security is due
and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof
upon the happening of any contingency beyond the control of the
issuer unless such contingency has occurred).
"Strategic Investor" means a publicly traded
corporation with a common stock market capitalization of at least
$500 million.
"Subordinated Obligation" means any Indebtedness of any
Issuer (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to
the Securities pursuant to a written agreement.
"Subsidiary" of any Person means any corporation,
association, partnership or other business entity of which more
than 50% of the total voting power of shares of Capital Stock or
other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by (i) such
Person or (ii) one or more Subsidiaries of such Person.
"Tax Amounts" in any calendar year shall be computed
according to the following assumptions:
(1) each Issuer which is an S Corporation, a
partnership, trust, limited liability company, or any other
entity the income of which (whether or not distributed) is
taxable to such entity's members or beneficial owners
(however denominated) for all or a portion of such calendar
year is owned 100% by a single individual (the "Tax Amounts
Person");
(2) the taxable income of the Tax Amounts Person
consists solely of the income, gain, loss, deduction or
credit of the Issuers referred to in Clause (1) arising with
respect to the calendar year (or portions thereof);
(3) the Tax Amounts Person is subject to tax at the
highest applicable marginal rate in effect for the calendar
year of (a) federal income tax (taking into
<PAGE>
account limitations on the use of deductions under Code
Sections 67 and 68 or any other relevant Code Section and
any other taxes imposed by the Code on any Significant Owner
(as defined below), or (b) alternative minimum tax, if in
the judgment of KPMG Peat Marwick or another national tax
accounting firm designated by any Issuer (the "Accounting
Firm"), the Tax Amounts Person would have been subject to
alternative minimum tax;
(4) the Tax Amounts Person is a citizen of the United
States who is a resident in the state (and local
jurisdiction) with the heaviest income tax burden of all
states in which any Significant Owner is actually resident,
as determined by the Accounting Firm; and
(5) the Tax Amounts Person is subject to tax in each
relevant state, local or foreign jurisdiction (including the
jurisdiction of residence as determined under clause (4)) at
the highest marginal tax rate (or alternative minimum tax
rate, if applicable) in effect for the calendar year.
Tax Amounts in any calendar year shall mean an amount equal to
the sum of:
(A) the federal income tax that would be imposed on the
Tax Amounts Person, taking into account the deductibility
for such purposes to the extent thereof of the amount
determined in clause (B) below as a state or local income
tax;
(B) with respect to each state, local and foreign
taxing jurisdiction in which any Significant Owner is
subject to tax on the taxable income of any Issuer, the sum
of the taxes that would be imposed on the Tax Amounts Person
in each such jurisdiction, taking into account, for purposes
of the foregoing computation, any credits or deductions of
state or local tax that would actually be useable by the Tax
Amounts Person; and
(C) with respect to each jurisdiction in which any
Significant Owner is subject to a capital, ad valorem,
intangibles, or similar tax, the sum of the amounts of such
taxes that would be imposed on the Tax Amounts Person,
taking into account any credits or deductions of such tax
that would actually be useable by the Tax Amounts Person.
<PAGE>
A "Significant Owner" is determined by treating all of the
Issuers referred to in clause (1) above as if they were a single
Issuer, and is any Owner who would own (a) the largest equity
interest (by value) in such single Issuer, or (b) the second
largest equity interest (by value) in such single Issuer and, in
the case of clause (b), at least 25% (by value) of the equity
interests in such single Issuer. An "Owner" is any individual or
entity generally subject to federal income tax that is a direct
or indirect stockholder, partner, member or beneficiary of an
Issuer described in clause (1) above and is taxable on the income
(whether or not distributed) of such Issuer, including a trust or
a beneficiary of a trust to the extent either is so taxable on
the income of an Issuer. In computing the taxable income of the
Tax Amounts Person for any calendar year, the losses, deductions
and credits arising with respect to any Issuer for such year may
not be used to offset income or gain of any Issuer (including the
Issuer with respect to which the losses, deductions or credits
are attributable), if in the judgment of the Accounting Firm,
such losses, deductions or credits are not in fact useable by any
Significant Owner (for example, without limitation, because of
passive loss limitations, at risk limitations, or foreign tax
credit baskets), provided that the judgment of the Accounting
Firm is consistent with the manner in which such Issuer has
reported such items on its Form K-1. Notwithstanding anything to
the contrary herein, any distribution with respect to Tax Amounts
may be made by any Issuer, regardless of whether any portion of
such distribution was attributable to the income of such Issuer.
The Tax Amounts for any calendar year shall be adjusted as
necessary to reflect any final adjustment to or determination of
the relevant taxable income or tax loss of any Issuer or, with
respect to the taxes provided in clause (C) above, the tax
actually owed by any Significant Owner in any taxing jurisdiction
as a result of any audit, examination, claim or judicial or
administrative proceeding (a "Tax Proceeding") (X) with respect
to taxes, by adjusting the computations made in clauses (A), (B)
and (C) above with respect to the Tax Amounts Person to reflect
such Tax Proceeding and (Y) with respect to interest, penalties
and additions to tax, by increasing the Tax Amounts by the amount
of such items actually paid by any Owner with respect thereto,
provided that (a) the Significant Owner or Owner reported on his
relevant tax return the item or items that were the subject of
such Tax Proceeding in a manner consistent with the Issuer's
reporting of such item(s) on the relevant Form K-1 or other
comparable information report or return provided by
<PAGE>
the Issuer to such Significant Owner or Owner, and (b) such final
adjustment or determination resulted in an understatement or
overstatement of the amount of the Tax Amounts for such calendar
year. Any part of the Tax Amounts not distributed in respect of
a calendar year for which it is calculated (or recalculated as a
result of a Tax Proceeding) shall be available for distribution
in subsequent calendar years. Distributions of Tax Amounts may
be made from time to time with respect to a calendar year based
on reasonable estimates. Within 60 days after the earlier of (i)
the Issuer's filing of the relevant federal, state, local or
foreign tax return for the applicable tax year, and (ii) the last
date (including extensions) such form is required to be filed for
such tax year, or in the case of a prior tax year, within 60 days
after a final adjustment or determination with respect to such
prior tax year pursuant to a Tax Proceeding, (x) the Accounting
Firm shall certify the taxable income or loss of the Tax Amounts
Person used to compute the amounts referred to in clauses (A) and
(B) above, and the amount of taxes referred to in clause (C)
above, and (y) a reconciliation of the difference between the
distributed amount and the Tax Amounts shall be prepared by the
Issuers. Distributions of Tax Amounts may be made only if (1)
the Issuer or Issuers making such distributions has entered into
a binding agreement (or binding agreements) with all its Owners
or all Significant Owners requiring that each Owner or all
Significant Owners, as the case may be, reimburse or contribute
to any Issuer (on a pro rata basis if the reimbursement is made
to an Issuer which is an S Corporation) an amount equal to the
positive difference between, with respect to the agreement of any
Owner (in the event such agreements are with Owners) the amount
distributed to such Owner and the Tax Amounts attributable to
such Owner, or, in the event such agreements are with all
Significant Owners, the amount distributed to each Owner and the
Tax Amounts attributable to each Owner, which difference must be
paid by any such Owner or all Significant Owners, as the case may
be, within 45 days of the time any such Owner receives a refund
or uses a credit of the tax payments to which such difference is
attributable, or if no such tax payments had been made by any
such Owner, at the time of the relevant reconciliation; provided,
however, that none of the Owners shall be required to reimburse
any Issuer if such total difference (excluding amounts previously
reimbursed by credit or otherwise) for all periods attributable
to all Owners of all of the Issuers, as a group, is less than
$7.5 million, which difference shall be credited towards the
distribution of Tax Amounts for subsequent periods before any
additional cash distributions of Tax Amounts for subsequent
periods are made, and (2) the Issuer has requested and received
all such differences previously due.
"Tax Distribution Proceeds" means the Net Cash Proceeds
from the offering referred to in clause (b)(vi) of
<PAGE>
Section 4.04 in respect of and in an amount equal to
distributions made pursuant to such clause.
"Temporary Cash Investments" means any of the
following: (i) any investment in direct obligations of the
United States of America or any agency thereof or obligations
Guaranteed by the United States of America or any agency thereof,
(ii) investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the
date of acquisition thereof issued by a bank or trust company
which is organized under the laws of the United States of
America, any state thereof or any foreign country recognized by
the United States of America having capital, surplus and
undivided profits aggregating in excess of $250,000,000 (or the
foreign currency equivalent thereof) and whose long-term debt is
rated "A" (or such similar equivalent rating) or higher by at
least one nationally recognized statistical rating organization
(as defined in Rule 436 under the Securities Act), (iii)
repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (i) above
entered into with a bank meeting the qualifications described in
clause (ii) above, (iv) investments in commercial paper, maturing
not more than 90 days after the date of acquisition, issued by a
corporation (other than an Affiliate of an Issuer) organized and
in existence under the laws of the United States of America or
any foreign country recognized by the United States of America
with a rating at the time as of which any investment therein is
made of "P-1" (or higher) according to Moody's Investors Service,
Inc. or "A-1" (or higher) according to Standard & Poor's
Corporation, and (v) investments in securities with maturities of
six months or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing
authority thereof, and rated at least "A" by Standard & Poor's
Corporation or "A" by Moody's Investors Service, Inc.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
77aaa-77bbbb) as in effect on the date of this Indenture,
except as provided in Section 9.03.
"Trade Payables" means, with respect to any Person, any
accounts payable or any indebtedness or monetary obligation to
trade creditors created, assumed or Guaranteed
<PAGE>
by such Person arising in the ordinary course of business in
connection with the acquisition of goods or services.
"Tripperoo Guarantee" means the Guarantee, dated
October 9, 1992, by Alamo Rent-A-Car, Inc. to General Electric
Capital Corporation ("GECC") with respect to the obligations of
Tripperoo Wings, Inc. ("Tripperoo") with respect to one airplane
leased by Tripperoo to A-OK Jets, Inc. pursuant to the Promissory
Note, dated as of October 16, 1992, between Tripperoo and GECC,
evidencing the Aircraft Chattel Mortgage dated as of October 9,
1992, between Tripperoo and GECC, as in effect on the Issue Date
and as such Guarantee may be amended or refinanced without
increasing the principal amount of Indebtedness Guaranteed.
"Trustee" means the party named as such in this
Indenture until a successor replaces it and, thereafter, means
the successor.
"Trust Officer" means the Chairman of the Board, the
President or any other officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust
matters.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of
an Issuer that at the time of determination shall be designated
an Unrestricted Subsidiary by the Board of Directors of such
Issuer in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors of an Issuer may
designate any Subsidiary of such Issuer (including any newly
acquired or newly formed Subsidiary of such Issuer) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or holds
any Lien on any property of any Issuer or any other Subsidiary of
any Issuer that is not a Subsidiary of the Subsidiary to be so
designated; provided, however, that either (A) the Subsidiary to
be so designated has total consolidated assets of $1,000 or less
or (B) if such Subsidiary has consolidated assets greater than
$1,000, then such designation would be permitted under Section
4.04. The Board of Directors of an Issuer may designate any
Unrestricted Subsidiary of such Issuer to be a Restricted
Subsidiary; provided, however, that immediately after giving
effect to such designation (x) the Issuers could Incur $1.00 of
additional Indebtedness under
<PAGE>
Section 4.03(a) and (y) no Default shall have occurred and be
continuing. Any such designation by the Board of Directors of an
Issuer shall be evidenced to the Trustee by promptly filing with
the Trustee a copy of the resolution of such Board of Directors
giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing
provisions. An Unrestricted Subsidiary may engage in any
business, including the vehicle rental business.
"U.S. Government Obligations" means direct obligations
(or certificates representing an ownership interest in such
obligations) of the United States of America (including any
agency or instrumentality thereof) for the payment of which the
full faith and credit of the United States of America is pledged
and which are not callable or redeemable at the issuer's option.
"Voting Interests", with respect to a corporation,
means all classes of Capital Stock of such corporation then
outstanding and normally entitled to vote in the election of
directors, and with respect to any other type of entity, the
equity equivalent of such Capital Stock.
"Wholly Owned Subsidiary" means a Restricted Subsidiary
of an Issuer all the Capital Stock of which (other than
directors' qualifying shares) is owned by an Issuer or another
Wholly Owned Subsidiary; provided, that for purposes of clause
(b)(vi) of Section 4.07 and with respect only to transactions in
the ordinary course of business, each of LoneTree Rent-A-Car GmbH
and Alamo Autovermietung GmbH and each of their Wholly Owned
Subsidiaries shall be deemed to be a Wholly Owned Subsidiary for
so long as (i) the amount of the Issuers' Voting Interests in the
applicable entity is not less than the amount of the Issuers'
Voting Interests as of the Issue Date and (ii) the applicable
entity remains a Restricted Subsidiary.
<PAGE>
SECTION 1.02. Other Definitions.
Defined in
Term Section
"Affiliate Transaction"...................... 4.07
"Bankruptcy Law"............................. 6.01
"covenant defeasance option"................. 8.01(b)
"Custodian".................................. 6.01
"Event of Default"........................... 6.01
"Global Securities".......................... 2.01
"legal defeasance option".................... 8.01(b)
"Legal Holiday".............................. 10.08
"Offer"...................................... 4.06
"Offer Amount"............................... 4.06
"Offer Period"............................... 4.06
"Paying Agent"............................... 2.03
"Purchase Date".............................. 4.06
"Registrar".................................. 2.03
"Restricted Payment"......................... 4.04
"Successor Company".......................... 5.01
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act. This Indenture is subject to the mandatory
provisions of the TIA which are incorporated by reference in and
made a part of this Indenture. The following TIA terms have the
following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means
the Trustee.
"obligor" on the indenture securities means each Issuer
and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
or defined by SEC rule have the meanings assigned to them by such
definitions.
<PAGE>
SECTION 1.04. Rules of Construction. Unless the
context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words
in the plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by
virtue of its nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or
other discount security shall be the principal amount at
maturity of such security, and accretion of principal on
such security shall be deemed to be non-cash interest
expense;
(8) the principal amount of any Preferred Stock shall
be (i) the maximum liquidation value of such Preferred Stock
or (ii) the maximum mandatory redemption or mandatory
repurchase price with respect to such Preferred Stock,
whichever is greater; and
(9) all references to $, US$, dollars or United States
dollars shall refer to the lawful currency of the United
States.
ARTICLE 2
The Securities
--------------
SECTION 2.01. Form and Dating. The Securities and the
Trustee's certificate of authentication shall be substantially in
the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock
exchange rule, agreements to which an Issuer is subject, if any,
or usage (provided that any such
<PAGE>
notation, legend or endorsement is in a form acceptable to such
Issuer). Each Security shall be dated the date of its
authentication. The terms of the Securities set forth in Exhibit
A are part of the terms of this Indenture.
(a) Global Securities. The Securities shall be issued
initially in the form of one or more permanent Global Securities
("Global Securities") in definitive, fully registered form
without interest coupons in substantially the form of Exhibit A,
which shall be deposited on behalf of the purchasers of the
Securities represented thereby with the Trustee, at its New York
office, as custodian for the Depositary, and registered in the
name of the Depositary or a nominee of the Depositary, duly
executed by the Issuers and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the
Global Securities may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the
Depositary or its nominee in the limited circumstances
hereinafter provided.
(b) Certificated Securities. Except as provided in
Section 2.06, owners of beneficial interests in Global Securities
will not be entitled to receive physical delivery of certificated
securities.
SECTION 2.02. Execution and Authentication. An
Officer of each Issuer shall sign the Securities for each Issuer
by manual or facsimile signature.
If an Officer whose signature is on a Security no
longer holds that office at the time the Trustee authenticates
the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized
signatory of the Trustee manually signs the certificate of
authentication on the Security. The signature shall be
conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for
delivery Securities for original issue in an aggregate principal
amount of $100,000,000, upon a written order of each of the
Issuers signed by an Officer of each Issuer. Such order shall
specify the amount of the
<PAGE>
Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated. The aggregate
principal amount of Securities outstanding at any time may not
exceed that amount except as provided in Section 2.07.
The Trustee may appoint an authenticating agent
acceptable to the Issuers to authenticate the Securities, upon
the consent of the Issuers to such appointment. Unless limited
by the terms of such appointment, an authenticating agent may
authenticate Securities whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent
has the same rights as any Registrar, Paying Agent or agent for
service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Issuers
shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange (the
"Registrar") and an office or agency where Securities may be
presented for payment (the "Paying Agent"). The Registrar,
acting on behalf of and as agent for the Issuers, shall keep a
register (the "Securities Register") of the Securities and of
their transfer and exchange. The Issuers may have one or more co-
registrars and one or more additional paying agents. The term
"Paying Agent" includes any additional paying agent.
The Issuers shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar not a
party to this Indenture, which shall incorporate the terms of the
TIA. The agreement shall implement the provisions of this
Indenture that relate to such agent. The Issuers shall notify
the Trustee of the name and address of any such agent. If the
Issuers fail to maintain a Registrar or Paying Agent, the Trustee
shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07. Any Issuer or
any of their respective domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar, co-registrar or
transfer agent.
The Issuers initially appoint the Trustee as Registrar
and Paying Agent in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. On
or prior to each due date of the principal and interest on any
Security, the Issuers shall deposit with the
<PAGE>
Paying Agent a sum sufficient to pay such principal and interest
when so becoming due. The Issuers shall require each Paying
Agent (other than the Trustee) to agree in writing that the
Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money held by the Paying Agent
for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Issuers in making
any such payment. If an Issuer or a Subsidiary acts as Paying
Agent, it shall segregate the money held by it as Paying Agent
and hold it as a separate trust fund. The Issuers at any time
may require a Paying Agent to pay all money held by it to the
Trustee and to account for any funds disbursed by the Paying
Agent. Upon complying with this Section, the Paying Agent shall
have no further liability for the money delivered to the Trustee.
SECTION 2.05. Securityholder Lists. The Trustee shall
preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the
Issuers shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form
and as of such date as the Trustee may reasonably require of the
names and addresses of Securityholders; provided that as long as
the Trustee is the Registrar, no such list need be furnished.
SECTION 2.06. Transfer and Exchange. The Securities
shall be issued in registered form and shall be transferable only
upon the surrender of a Security for registration of transfer.
When a Security is presented to the Registrar or a co-registrar
with a request to register a transfer, the Registrar and the
Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Registrar
shall record in the Securities Register the transfer as requested
if the requirements of Section 8-401(1) of the Uniform Commercial
Code are met, and thereupon one or more new Securities in the
same aggregate principal amount shall be issued to the designated
assignee or transferee and the old Security will be returned to
the Issuers. When Securities are presented to the Registrar or a
co-registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the
Registrar shall make the exchange as requested, in the same
manner, if the same requirements are met. To permit registration
of transfers
<PAGE>
and exchanges, the Issuers shall execute and the Trustee shall
authenticate Securities at the Registrar's or co-registrar's
request. The Issuers may require payment of a sum sufficient to
pay all taxes, assessments or other governmental charges in
connection with any transfer or exchange pursuant to this
Section. The Issuers shall not be required to make and the
Registrar need not register transfers or exchanges of Securities
selected for redemption (except, in the case of Securities to be
redeemed in part, the portion thereof not to be redeemed) or any
Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment
date.
Prior to the due presentation for registration of
transfer of any Security, the Issuers, the Trustee, the Paying
Agent, the Registrar or any co-registrar may deem and treat the
person in whose name a Security is registered as the absolute
owner of such Security for the purpose of receiving payment of
principal of and interest on such Security and for all other
purposes whatsoever, whether or not such Security is overdue, and
none of the Issuers, the Trustee, the Paying Agent, the Registrar
or any co-registrar shall be affected by notice to the contrary.
All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture will evidence the same
debt and will be entitled to the same benefits under this
Indenture as the Securities surrendered upon such transfer or
exchange.
With respect to Global Securities:
(1) Each Global Security authenticated under this
Indenture shall be registered in the name of the Depositary
designated for such Global Security or a nominee thereof and
deposited with such Depositary or a nominee thereof or
custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this
Indenture.
(2) A Global Security may not be transferred except as
a whole by the Depositary to a nominee of the Depositary. A
Global Security is exchangeable for certificated Securities
only if (i) the Depositary notifies the Issuers that it is
unwilling or unable to continue as a Depositary for such
Global Security or if at any time the Depositary ceases to
be a clearing agency registered under the Exchange Act, (ii)
the
<PAGE>
Issuers execute and deliver to the Trustee a notice that
such Global Security shall be so transferable, registrable,
and exchangeable, and such transfers shall be registrable or
(iii) there shall have occurred and be continuing an Event
of Default or an event which, with the giving of notice or
lapse of time or both, would constitute an Event of Default
with respect to the Securities represented by such Global
Security. Any Global Security that is exchangeable for
certificated Securities pursuant to the preceding sentence
will be transferred to, and registered and exchanged for,
certificated Securities in authorized denominations, without
legends applicable to a Global Security, and registered in
such names as the Depositary holding such Global Security
may direct. Subject to the foregoing, a Global Security is
not exchangeable, except for a Global Security of like
denomination to be registered in the name of the Depositary
or its nominee. In the event that a Global Security becomes
exchangeable for certificated Securities, (i) certificated
Securities will be issued only in fully registered form in
denominations of $1,000 or integral multiples thereof, (ii)
payment of principal, any repurchase price, and interest on
the certificated Securities will be payable, and the
transfer of the certificated Securities will be registrable,
at the office or agency of the Issuers maintained for such
purposes, and (iii) no service charge will be made for any
registration or transfer or exchange of the certificated
Securities, although the Issuers may require payment of a
sum sufficient to cover any tax or governmental charge
imposed in connection therewith.
(3) Securities issued in exchange for a Global
Security or any portion thereof shall have an aggregate
principal amount equal to that of such Global Security or
portion thereof to be so exchanged, shall be registered in
such names and be in such authorized denominations as the
Depositary shall designate and shall bear the applicable
legends provided for herein. Any Global Security to be
exchanged in whole shall be surrendered by the Depositary to
the Trustee. With respect to any Global Security to be
exchanged in part, either such Global Security shall be so
surrendered for exchange or, if the Trustee is acting as
custodian for the Depositary or its nominee with respect to
such Global Security, the principal amount thereof shall be
<PAGE>
reduced, by an amount equal to the portion thereof to be so
exchanged, by means of an appropriate adjustment made on the
records of the Trustee. Upon any such surrender or
adjustment, the Trustee shall authenticate and deliver the
Security issuable on such exchange to or upon the order of
the Depositary or an authorized representative thereof.
(4) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu
of, a Global Security or any portion mutilated thereof,
whether pursuant to this Section, Section 2.07 or 2.09 or
otherwise, shall be authenticated and delivered in the form
of, and shall be, a Global Security, unless such Security is
registered in the name of a Person other than the Depositary
for such Global Security or a nominee thereof.
Members of, or participants in, the Depositary
("Participants") shall have no rights under this Indenture with
respect to any Global Security held on their behalf by the
Depositary or by the Trustee as the custodian of the Depositary
or under such Global Security, and the Depositary may be treated
by the Issuers, the Trustee and any agent of the Issuers or the
Trustee as the absolute owner of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Issuers, the Trustee or any agent of the
Issuers or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the
Depositary or impair, as between the Depositary and its
Participants, the operation of customary practices of such
Depositary governing the exercise of the rights of a holder of a
beneficial interest in any Global Security.
SECTION 2.07. Replacement Securities. If a mutilated
Security is surrendered to the Trustee or Registrar or if the
Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken, the Issuers shall issue and the
Trustee shall authenticate a replacement Security if the
requirements of Section 8-405 of the Uniform Commercial Code are
met and the Holder satisfies any other reasonable requirements of
the Trustee and the Issuers. Such Holder shall furnish an
indemnity bond sufficient in the judgment of the Issuers and the
Trustee to protect the Issuers, the Trustee, the Paying Agent,
the Registrar and any co-registrar from any loss which any of
them may suffer if a Security is replaced. The Issuers and
<PAGE>
the Trustee may charge the Holder for their expenses in replacing
a Security.
Every replacement Security is an obligation of the
Issuers under this Indenture.
SECTION 2.08. Outstanding Securities. Securities
outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it, those delivered to it
for cancelation and those described in this Section as not
outstanding. A Security does not cease to be outstanding because
an Issuer or an Affiliate of an Issuer holds the Security.
If a Security is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee and the Issuers
receive proof satisfactory to them that the replaced Security is
held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity
date or, pursuant to Section 8.01(a), within 91 days prior
thereto, money sufficient to pay all principal and interest
payable on that redemption or maturity date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as
the case may be, then on and after such date such Securities (or
portions thereof) cease to be outstanding and on and after such
redemption or maturity date interest on them ceases to accrue.
SECTION 2.09. Temporary Securities. Until definitive
Securities are ready for delivery, the Issuers may prepare and
the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive
Securities but may have variations that the Issuers consider
appropriate for temporary Securities. Without unreasonable
delay, the Issuers shall prepare and the Trustee shall
authenticate definitive Securities and deliver them in exchange
for temporary Securities.
SECTION 2.10. Cancelation. The Issuers at any time
may deliver Securities to the Trustee for cancelation. The
Registrar and the Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer,
exchange or payment. The Trustee and no one else shall cancel
all Securities surrendered for registration of transfer,
exchange, payment or cancelation
<PAGE>
and deliver such canceled Securities to the Issuers. The Trustee
shall from time to time provide the Issuers a list of all
Securities that have been canceled as requested by the Issuers.
The Issuers may not issue new Securities to replace Securities it
has redeemed, paid or delivered to the Trustee for cancelation.
SECTION 2.11. Defaulted Interest. If the Issuers
default in a payment of interest on the Securities, the Issuers
shall pay defaulted interest (plus interest on such defaulted
interest to the extent lawful) in any lawful manner. The Issuers
may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Issuers
shall fix or cause to be fixed any such special record date and
payment date to the reasonable satisfaction of the Trustee and
shall promptly mail to each Securityholder a notice that states
the special record date, the payment date and the amount of
defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. The Issuers in issuing
the Securities may use "CUSIP" numbers (if then generally in
use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that
any such notice may state that no representation is made as to
the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers
printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The
Issuer will promptly notify the Trustee of any change in the
CUSIP numbers.
ARTICLE 3
Redemption
----------
SECTION 3.01. Notices to Trustee. If the Issuers
elect to redeem Securities pursuant to paragraph 5 of the
Securities, they shall notify the Trustee in writing of the
redemption date, the principal amount of Securities to be
redeemed and the paragraph of the Securities pursuant to which
the redemption will occur.
The Issuers shall give each notice to the Trustee
provided for in this Section at least 45 days before the
<PAGE>
redemption date unless the Trustee consents to a shorter period.
Such notice shall be accompanied by an Officers' Certificate from
each Issuer and an Opinion of Counsel from the Issuers to the
effect that such redemption will comply with the conditions
herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If fewer than all the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed pro rata or by lot or
by a method that complies with applicable legal and securities
exchange requirements, if any, and that the Trustee considers
fair and appropriate and in accordance with methods generally
used at the time of selection by fiduciaries in similar
circumstances. The Trustee shall make the selection from
outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of
Securities that have denominations larger than $1,000.
Securities and portions of them the Trustee selects shall be in
amounts of $1,000 or a whole multiple of $1,000. Provisions of
this Indenture that apply to Securities called for redemption
also apply to portions of Securities called for redemption. The
Trustee shall notify the Issuers promptly of the Securities or
portions of Securities to be redeemed. In the event the Company
is required to make an offer to redeem Securities pursuant to
Sections 4.06 or 4.08 and the amount available for such offer is
not evenly divisible by $1,000, the Trustee shall promptly refund
to the Company any remaining funds, which in no event will exceed
$1,000.
SECTION 3.03. Notice of Redemption. At least 30 days
but not more than 60 days before a date for redemption of
Securities, the Issuers shall mail a notice of redemption by
first-class mail to the registered address appearing in the
Security Register each Holder of Securities to be redeemed.
The notice shall identify the Securities (including
CUSIP numbers) to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
<PAGE>
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption
price;
(5) if fewer than all the outstanding Securities are to
be redeemed, the identification and principal amounts of the
particular Securities to be redeemed;
(6) that, unless the Issuers default in making such
redemption payment, interest on Securities (or portion
thereof) called for redemption ceases to accrue on and after
the redemption date;
(7) the paragraph of the Securities pursuant to which
the Securities called for redemption are being redeemed; and
(8) that no representation is made as to the
correctness or accuracy of the CUSIP number, if any, listed
in such notice or printed on the Securities.
At the Issuers' request, the Trustee shall give the
notice of redemption in the Issuers' names and at the Issuers'
expense. In such event, the Issuers shall provide the Trustee
with the information required by this Section.
SECTION 3.04. Effect of Notice of Redemption. Once
notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the
redemption price stated in the notice. Upon surrender to the
Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the
redemption date. Such notice if mailed in the manner herein
provided shall be conclusively presumed to have been given,
whether or not the Holder receives such notice. Failure to give
notice or any defect in the notice to any Holder shall not affect
the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to
11:00 a.m. (New York City time) on the redemption date, the
Issuers shall deposit with the Trustee or Paying Agent (or, if an
Issuer or a Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of
and accrued interest (if any) on all Securities or portions
thereof to be redeemed on that date other than Securities or
portions of Securities called for
<PAGE>
redemption which have been delivered by the Issuers to the
Trustee for cancelation.
SECTION 3.06. Securities Redeemed in Part. Upon
surrender of a Security that is redeemed in part, the Issuers
shall execute and the Trustee shall authenticate for the Holder
(at the Issuers' expense) a new Security equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
---------
SECTION 4.01. Payment of Securities. The Issuers
shall promptly pay the principal of and interest on the
Securities on the dates and in the manner provided in the
Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or
the Paying Agent holds in accordance with this Indenture money
sufficient to pay all principal and interest then due.
The Issuers shall pay interest on overdue principal at
the rate specified therefor in the Securities, and it shall pay
interest on overdue installments of interest at the same rate to
the extent lawful.
SECTION 4.02. SEC Reports. Each of the Issuers shall
file with the Trustee and provide Securityholders, as their names
appear in the Security Register, within 15 days after it files
them with the SEC, copies of the annual reports and the
information, documents and other reports which it is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act. Notwithstanding that an Issuer may not be required to be or
remain subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, each of the Issuers shall continue to
file with the SEC and provide the Trustee and Securityholders
with the annual reports and the information, documents and other
reports which are specified in Sections 13 and 15(d) of the
Exchange Act. The Issuers also shall comply with the other
provisions of TIA 314(a). The Issuers will not be required to
file with the SEC and provide the Trustee and Securityholders
such reports, information and documents on an individual Issuer
reporting basis (as opposed to a
<PAGE>
combined basis, as set forth in the Prospectus) if not required
by applicable law.
Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information
contained therein, including the Issuers' compliance with any of
their covenants hereunder (as to which the Trustee is entitled to
rely exclusively on Officers' Certificates).
SECTION 4.03. Limitation on Indebtedness. (a) None
of the Issuers will Incur, or permit any Restricted Subsidiary to
Incur, any Indebtedness; provided, however, that an Issuer may
Incur Indebtedness if on the date thereof the Combined Coverage
Ratio would be greater than 2.00:1.
(b) Notwithstanding Section 4.03(a), an Issuer or
Restricted Subsidiary may Incur (subject to the limitations
included in Section 4.06) the following Indebtedness:
(i) Indebtedness of an Issuer or Restricted Subsidiary
under the Credit Agreements in an aggregate principal amount
outstanding at any time not to exceed the aggregate
committed amount under such Agreements as of the Issue Date,
and any Refinancing Indebtedness with respect thereto;
(ii) Indebtedness of an Issuer owing to and held by any
Restricted Subsidiary or Indebtedness of a Restricted
Subsidiary owing to and held by an Issuer or any Restricted
Subsidiary or Indebtedness of an Issuer owing to and held by
any other Issuer; provided, however, that any subsequent
issuance or transfer of any Capital Stock or any other event
which results in any such Restricted Subsidiary or Issuer
which holds Indebtedness of another Issuer or Restricted
Subsidiary ceasing to be a Restricted Subsidiary or Issuer
or any subsequent transfer of any such Indebtedness (except
to an Issuer or a Restricted Subsidiary) will be deemed, in
each case, to constitute the Incurrence of such Indebtedness
by the issuer thereof; provided further, that a pledge of
Capital Stock or such Indebtedness prior to enforcement of
such pledge shall not be deemed an issuance or transfer for
purposes of the foregoing proviso;
<PAGE>
(iii) Indebtedness represented by the Securities, any
Indebtedness (other than the Indebtedness described in
clauses (i)-(ii) above) outstanding on the Issue Date and
any Refinancing Indebtedness Incurred in respect of any
Indebtedness described in this clause (iii) or Section
4.03(a);
(iv) (A) Indebtedness of a Restricted Subsidiary or
Co-Issuer Incurred and outstanding on or prior to the date
on which such Restricted Subsidiary was acquired by an
Issuer or a Restricted Subsidiary or such Co-Issuer becomes
a Co-Issuer (other than Indebtedness Incurred in connection
with, or in contemplation of, the transaction or series of
related transactions pursuant to which such Restricted
Subsidiary became a Subsidiary or was otherwise acquired by
such Issuer or a Restricted Subsidiary or such Co-Issuer
becomes a Co-Issuer); provided, however, that at the time
such Restricted Subsidiary is acquired by such Issuer or a
Restricted Subsidiary or such Co-Issuer becomes a Co-Issuer,
the Issuers would have been able to Incur $1.00 of
additional Indebtedness pursuant to paragraph (a) after
giving effect to the Incurrence of such Indebtedness
pursuant to this clause (iv) and such transaction or series
of related transactions and (B) Refinancing Indebtedness
Incurred by a Restricted Subsidiary or Issuer in respect of
Indebtedness Incurred by such Restricted Subsidiary or
Co-Issuer pursuant to this clause (iv);
(v) Indebtedness (A) in respect of performance bonds,
bankers' acceptances, letters of credit and surety or appeal
bonds provided by an Issuer or Restricted Subsidiary in the
ordinary course of its business and which do not secure
other Indebtedness, and (B) under Currency Agreements and
Interest Rate Agreements Incurred which, at the time of
Incurrence, is in the ordinary course of business; provided,
however, that, in the case of Currency Agreements and
Interest Rate Agreements, such Currency Agreements and
Interest Rate Agreements do not increase the Indebtedness of
any Issuer outstanding at any time other than as a result of
fluctuations in foreign currency exchange rates or interest
rates or by reason of fees, indemnities and compensation
payable thereunder;
<PAGE>
(vi) Permitted Vehicle Indebtedness and Permitted Share
Repurchase Indebtedness;
(vii) Indebtedness represented by Guarantees issued to
airports and airport and other governmental authorities for
the construction of airport rental or related facilities to
be used by an Issuer or Restricted Subsidiary in the
ordinary course of business which do not exceed for all
Issuers and Restricted Subsidiaries in the aggregate $25
million at any time outstanding;
(viii) Indebtedness represented by Guarantees by an
Issuer of Indebtedness otherwise permitted to be Incurred
pursuant to this Section;
(ix) Indebtedness represented by Guarantees by a
Restricted Subsidiary of Indebtedness of another Restricted
Subsidiary otherwise permitted to be Incurred pursuant to
this Section;
(x) Indebtedness of an Issuer or Restricted Subsidiary
consisting of guarantees, indemnities, or obligations in
respect of purchase price adjustments, in connection with
the acquisition or disposition of assets;
(xi) Non-Recourse Tax Debt; or
(xii) Indebtedness (other than Indebtedness permitted
to be Incurred pursuant to paragraph (a) or any other clause
of this paragraph (b)) in an aggregate principal amount on
the date of Incurrence which, when added to all other
Indebtedness Incurred by all the Issuers and Restricted
Subsidiaries pursuant to this clause (xii) and then
outstanding, will not exceed $30 million; provided, however,
that the amount of such Indebtedness permitted to be
incurred by Restricted Subsidiaries pursuant to this clause
(xii) will not exceed the sum of (A) $10 million and (B) 10%
of the Aggregate Net Worth Increase.
(c) Notwithstanding any other provision of this
Section 4.03, the maximum amount of Indebtedness that any Issuer
or any Restricted Subsidiary may Incur pursuant to this Section
shall not be deemed to be exceeded solely as a result of
fluctuations in the exchange rates of currencies. For purposes
of determining the outstanding principal amount
<PAGE>
of any particular Indebtedness Incurred pursuant to this Section
4.03, (1) Indebtedness Incurred pursuant to the Credit Agreements
prior to or on the date of this Indenture shall be treated as
Incurred pursuant to Section 4.03(b)(i), (2) Indebtedness
permitted by this Section 4.03 need not be permitted solely by
reference to one provision permitting such Indebtedness but may
be permitted in part by one such provision and in part by one or
more other provisions of this Section permitting such
Indebtedness and (3) in the event that Indebtedness or any
portion thereof meets the criteria of more than one of the types
of Indebtedness described in this Section, the Issuers, in their
sole discretion, shall classify such Indebtedness and only be
required to include the amount of such Indebtedness in one of
such clauses.
SECTION 4.04. Limitation on Restricted Payments. (a)
None of the Issuers will, or will permit any Restricted
Subsidiary to, directly or indirectly, (i) declare or pay any
dividend or make any distribution on or in respect of its Capital
Stock (including, without duplication, any Incurrence of or
payments or distributions in respect of Permitted Share
Repurchase Indebtedness or Non-Recourse Tax Debt or any payment
in connection with any merger or consolidation involving an
Issuer) except dividends or distributions payable solely in its
Capital Stock (other than Disqualified Stock) and except
dividends or distributions payable to an Issuer or another
Restricted Subsidiary (and, if such Restricted Subsidiary is not
wholly owned, to its other shareholders on a pro rata basis),
(ii) purchase, redeem, retire or otherwise acquire for value any
Capital Stock of an Issuer or any Restricted Subsidiary held by
Persons other than an Issuer or another Restricted Subsidiary
(including, without duplication, any Incurrence of or payments or
distributions in respect of Permitted Share Repurchase
Indebtedness or Non-Recourse Tax Debt), (iii) purchase,
repurchase, redeem, defease or otherwise acquire or retire for
value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment any Subordinated Obligations
(other than the purchase, repurchase or other acquisition of
Subordinated Obligations in anticipation of satisfying a sinking
fund obligation, principal installment or final maturity, in each
case due within one year of the date of such purchase, repurchase
or acquisition), or (iv) make any Investment (other than a
Permitted Investment) in any Person (any such dividend,
distribution, purchase, redemption, repurchase, defeasance, other
acquisition, retirement, Investment or payment being
<PAGE>
herein referred to as a "Restricted Payment") if at the time an
Issuer or such Restricted Subsidiary makes such Restricted
Payment:
(1) a Default will have occurred and be continuing (or
would result therefrom);
(2) an Issuer could not Incur at least $1.00 of
additional Indebtedness under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and
all other Restricted Payments (the amount so expended, if
other than in cash, to be determined in good faith by the
Board of Directors of the applicable Issuer, whose
determination will be conclusive and evidenced by a
resolution of such Board of Directors) declared or made
subsequent to the Issue Date would exceed the sum of:
(A) 50% of the Combined Net Income, after
subtraction therefrom of all Tax Amounts, with respect
to the period (treated as one accounting period) from
February 1, 1996 to the end of the most recent fiscal
quarter ending prior to the date of such Restricted
Payment for which financial statements are available
(or, in case such Combined Net Income, after
subtraction therefrom of all Tax Amounts, will be a
deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received by
the Issuers from (i) capital contributions other than
those required (x) under Section 4.13 or (y) in
connection with reimbursement of Tax Amounts and (ii)
the issue or sale of Capital Stock (other than
Disqualified Stock) subsequent to the Issue Date (other
than an issuance or sale to another Issuer or a
Subsidiary of an Issuer or an employee stock ownership
plan or other trust established by an Issuer or any of
its Subsidiaries);
(C) the aggregate Net Cash Proceeds received by
the Issuers from the issue or sale of Capital Stock
(other than Disqualified Stock) to an employee stock
ownership plan established by an Issuer or any of its
Subsidiaries subsequent to the date of this Indenture;
provided, however,
<PAGE>
that if such employee stock ownership plan incurs any
Indebtedness, such aggregate amount shall be limited to
an amount equal to any increase in the Consolidated Net
Worth of the Issuer resulting from principal repayments
made by such employee stock ownership plan with respect
to Indebtedness incurred by it to finance the purchase
of such Capital Stock;
(D) the amount by which Indebtedness of an Issuer
or its Restricted Subsidiaries is reduced on such
Issuer's balance sheet upon the conversion or exchange
(other than by a Subsidiary or another Issuer)
subsequent to the Issue Date of any Indebtedness of
such Issuer or its Restricted Subsidiaries convertible
or exchangeable for Capital Stock (other than
Disqualified Stock) of such Issuer (less the amount of
any cash or other property distributed by such Issuer
or any Restricted Subsidiary upon such conversion or
exchange); and
(E) the amount equal to (x) the amount of any
Guarantee included in the calculation of the amount of
Restricted Payments if such Guarantee has been retired
and extinguished to the extent no payment was made
pursuant to such Guarantee (such amount not to exceed
the amount of the Guarantee included in the calculation
of the amount of Restricted Payments less the amount of
any payments made pursuant thereto) and (y) the net
reduction in Investments in Unrestricted Subsidiaries
resulting from (i) payments of dividends, repayments of
the principal of loans or advances or other transfers
of assets to an Issuer or any Restricted Subsidiary
from Unrestricted Subsidiaries or (ii) the
redesignation of Unrestricted Subsidiaries as
Restricted Subsidiaries (valued in each case as
provided in the definition of "Investment") not to
exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments previously made by an Issuer or
any Restricted Subsidiary in such Unrestricted
Subsidiary, which amount was included in the
calculation of the amount of Restricted Payments.
<PAGE>
(b) The provisions of subsections 4.04(a)(2) and (3)
will not prohibit:
(i) any purchase, redemption, defeasance or other
acquisition of Capital Stock of an Issuer or Subordinated
Obligations made by exchange for, or out of the net proceeds
of the substantially concurrent sale of, Capital Stock of an
Issuer (other than Disqualified Stock and other than Capital
Stock issued or sold to a Subsidiary or an employee stock
ownership plan or other trust established by such Issuer or
any of its Subsidiaries); provided, however, that (A) such
purchase, redemption, defeasance or other acquisition will
be excluded in the calculation of the amount of Restricted
Payments and (B) the Net Cash Proceeds from such sale will
be excluded from clause (3)(B) of Section 4.04(a);
(ii) any purchase, redemption, defeasance or other
acquisition of Subordinated Obligations made by exchange
for, or out of the net proceeds of the substantially
concurrent sale of, Subordinated Obligations of an Issuer
which is permitted to be Incurred pursuant to Section 4.03;
provided, however, that such purchase, redemption,
defeasance or other acquisition will be excluded in the
calculation of the amount of Restricted Payments;
(iii) any purchase, redemption, defeasance or other
acquisition of Subordinated Obligations from Net Available
Cash to the extent permitted by Section 4.06; provided,
however, that such purchase or redemption will be excluded
in the calculation of the amount of Restricted Payments;
(iv) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such
dividend would have complied with Section 4.04(a); provided,
however, that such dividend will be included in the
calculation of the amount of Restricted Payments;
(v) with respect to each year or portion thereof that
any Issuer qualifies as an S Corporation, partnership,
limited liability company or trust not subject to tax as an
entity and such Issuer is so treated in the Issuers'
Combined Financial Statements, distributions of Tax Amounts;
provided, however, that
<PAGE>
such distributions will be excluded in the calculation of
the amount of Restricted Payments; provided further,
however, that the provisions of subsection 4.04(a)(1) will
not prohibit distributions otherwise permitted pursuant to
this clause (v);
(vi) in connection with a Public Equity Offering or the
sale of Equity Interests to a Strategic Investor by an
Issuer qualifying as an S Corporation prior to such
offering, the declaration of a dividend and the distribution
to shareholders of such Issuer of the amount of such
Issuer's "accumulated adjustments account" within the
meaning of Section 1368(e) of the Code as of the period
ending on the closing date of such offering or sale;
provided, however, that the Net Cash Proceeds received from
such offering or sale are at least equal to the amount of
such distributions and such distributions (other than a
distribution consisting of Non-Recourse Tax Debt) are not
made prior to the receipt of such Proceeds; provided,
further, that such distributions will be included in the
calculation of the amount of Restricted Payments;
(vii) distributions to Michael S. Egan or his estate in
an amount not in excess of and used within 30 days to make
Shareholder Loan Payments, together with equivalent pro rata
distributions (based on their share ownership) to the other
shareholders of Alamo Rent-A-Car, Inc.; provided, however,
that all such distributions will be included in the
calculation of the amount of Restricted Payments;
(viii) Share Repurchase Payments; provided, however,
that such distributions will be included in the calculation
of the amount of Restricted Payments;
(ix) Investments in a Person or Persons primarily
engaged in operating a Related Business, such Investments
not to exceed $10 million at any one time outstanding;
provided, however, that such Investments will be excluded in
the calculation of the amount of Restricted Payments;
(x) payments pursuant to the Tripperoo Guarantee;
provided, however, that such payments will be included in
the calculation of the amount of Restricted Payments; and
<PAGE>
(xi) any repurchase or redemption of Subordinated
Obligations to the extent required upon a change of control
by the indenture or other agreement or instrument pursuant
to which such Subordinated Obligations were issued, but only
if the Issuers have complied with their obligations
(including the completion of the repurchase of all
Securities tendered) under Section 4.08; provided, however,
that such repurchase or redemption will be excluded in the
calculation of the amount of Restricted Payments.
(c) In computing Combined Net Income under clause (A)
of Section 4.04(a), (1) the Issuers and their Consolidated
Subsidiaries shall use audited financial statements for the
portions of the relevant period for which audited financial
statements are available on the date of determination and (2) the
Issuers and their Consolidated Subsidiaries shall be permitted to
rely in good faith on the unaudited financial statements of such
Issuers and Subsidiaries for the portions of the relevant period
for which such audited financial statements are not available on
the date of determination. If any Issuer or Restricted
Subsidiary makes a Restricted Payment which, at the time of
making such Restricted Payment, would in the good faith
determination of such Issuer or Restricted Subsidiary be
permitted under the requirements of this Indenture, such
Restricted Payment shall be deemed to have been made in
compliance with this Indenture notwithstanding any subsequent
adjustments made in good faith to the Issuers' and their
Consolidated Subsidiaries' financial statements affecting
Combined Net Income for any period.
SECTION 4.05. Limitation on Restrictions on
Distributions from Restricted Subsidiaries. None of the Issuers
will, or will permit any Restricted Subsidiary to, create or
otherwise cause or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other
distributions on its Capital Stock or pay any Indebtedness owed
to an Issuer, (ii) make any loans or advances to an Issuer or
(iii) transfer any of its property or assets to an Issuer,
except:
(1) any encumbrance or restriction pursuant to an
agreement in effect at or entered into on the Issue Date;
<PAGE>
(2) any encumbrance or restriction with respect to a
Restricted Subsidiary or Co-Issuer pursuant to an agreement
relating to any Indebtedness Incurred by such Restricted
Subsidiary prior to the date on which such Restricted
Subsidiary was acquired by an Issuer or a Restricted
Subsidiary or by such Co-Issuer prior to the date it becomes
a Co-Issuer (other than Indebtedness Incurred in connection
with, or in contemplation of, the transaction or series of
related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by
such Issuer or a Restricted Subsidiary or pursuant to which
such Co-Issuer became a Co-Issuer) and outstanding on such
date;
(3) any encumbrance or restriction pursuant to an
agreement constituting Refinancing Indebtedness of
Indebtedness Incurred pursuant to an agreement referred to
in clause (1) or (2) of this Section or this clause (3) or
contained in any amendment to an agreement referred to in
clause (1) or (2) of this Section or this clause (3);
provided, however, that the encumbrances and restrictions
contained in any such refinancing agreement or amendment are
not more restrictive in any material respect than the
provisions contained in such agreements as determined in
good faith by the Issuers and evidenced by an Officers'
Certificate;
(4) in the case of clause (iii), any encumbrance or
restriction (A) that restricts in a customary manner the
subletting, assignment or transfer of any property or asset
that is subject to a lease, license or similar contract, (B)
by virtue of any transfer of, agreement to transfer, option
or right with respect to, or Lien on, any property or assets
of an Issuer or any Restricted Subsidiary not otherwise
prohibited by this Indenture or (C) contained in security
agreements securing Indebtedness of a Restricted Subsidiary
to the extent such encumbrance or restrictions restrict the
transfer of the property subject to such security
agreements;
(5) any restriction with respect to a Restricted
Subsidiary imposed pursuant to an agreement entered into for
the sale or disposition of all or substantially all the
Capital Stock or assets of such
<PAGE>
Restricted Subsidiary pending the closing of such sale or
disposition;
(6) any encumbrance or restriction imposed under or by
applicable law;
(7) any encumbrance or restriction pursuant to
subordination provisions of Indebtedness of a Restricted
Subsidiary to an Issuer; and
(8) any encumbrance or restriction with respect to a
Restricted Subsidiary primarily conducting business in
Europe pursuant to an agreement or agreements relating to
any Permitted Vehicle Indebtedness Incurred by such
Restricted Subsidiary; provided, that the encumbrances and
restrictions contained in any such agreement or agreements
are not in the aggregate more restrictive in any material
respect (as determined in good faith by the Issuers and
evidenced by an Officers' Certificate) than the provisions
contained in an agreement or agreements relating to
Permitted Vehicle Indebtedness of a Restricted Subsidiary
primarily conducting business in Europe as in effect on the
Issue Date.
SECTION 4.06. Limitation on Sales of Assets and
Subsidiary Stock. (a) None of the Issuers will, or will permit
any Restricted Subsidiary to, make any Asset Disposition unless
(i) such Issuer or such Restricted Subsidiary receives
consideration (including by way of relief from, or by any other
Person assuming sole responsibility for, any liabilities,
contingent or otherwise) at the time of such Asset Disposition at
least equal to the fair market value, as determined for any
transaction or series of related transactions involving aggregate
consideration in excess of $100,000 in good faith by the Board of
Directors of the applicable Issuer (including as to the value of
all non-cash consideration), of the shares and assets subject to
such Asset Disposition, (ii) at least 75% of the consideration
thereof received by such Issuer or such Restricted Subsidiary is
in the form of cash or Temporary Cash Investments and (iii) an
amount equal to 100% of the Net Available Cash from such Asset
Disposition is applied by the Issuers or such Restricted
Subsidiary, as the case may be, within one year after the later
of the date of such Asset Disposition or the receipt of such Net
Available Cash (A) first, to the extent the Issuers elect (or are
required by the terms of any Senior Debt or
<PAGE>
Indebtedness (other than Preferred Stock) of a Wholly Owned
Subsidiary), to prepay, repay or purchase Senior Debt or such
Indebtedness or, in the event of an Asset Disposition by a
Restricted Subsidiary, Indebtedness of such Restricted Subsidiary
(in each case other than Indebtedness owed to an Issuer or an
Affiliate of an Issuer); (B) second, to the extent of the balance
of Net Available Cash after application in accordance with clause
(A), to the extent the Issuers or such Restricted Subsidiary
elect, to reinvest in tangible assets to be used in the Issuers'
(including the Restricted Subsidiaries') business (including by
means of an Investment in such assets by a Restricted Subsidiary
with Net Available Cash received by such Issuer or another
Restricted Subsidiary); (C) third, to the extent of the balance
of such Net Available Cash after application in accordance with
clauses (A) and (B), to make an Offer (as defined below) to
purchase Securities pursuant to and subject to the conditions set
forth in Section 4.06(b), and (D) fourth, to the extent of the
balance of such Net Available Cash after application in
accordance with clauses (A), (B) and (C), to general corporate
purposes; provided, however, that in connection with any
prepayment, repayment or purchase of Indebtedness pursuant to
clause (A) or (C) above, the Issuers or such Restricted
Subsidiary will retire such Indebtedness and will cause any
related loan commitment or availability to be permanently reduced
in an amount (the "Reduction Amount") equal to the principal
amount so prepaid, repaid or purchased; provided further,
however, that such loan commitment or availability need not be so
permanently reduced if the Issuers would, if such reduction had
been effected, be able to Incur Indebtedness equal to the
"Reduction Amount" pursuant to Section 4.03(a) (in which case, if
such loan commitment or availability is not so reduced,
Indebtedness equal to such "Reduction Amount" shall be deemed to
have been Incurred at such time pursuant to Section 4.03(a)) and
the related loan commitment or availability shall be deemed
permanently reduced by an amount equal to the Reduction Amount
for purposes of Incurrence of Indebtedness pursuant to Section
4.03(b) (but shall not preclude the Incurrence of Refinancing
Indebtedness pursuant to Section 4.03(b)(iii) with respect to the
Indebtedness equal to the Reduction Amount deemed Incurred
pursuant to Section 4.03(a) as set forth above).
For the purposes of this Section, the following are
deemed to be cash: (x) the assumption of Indebtedness of an
Issuer (other than Disqualified Stock of an Issuer) or any
Restricted Subsidiary and the release of an Issuer or
<PAGE>
such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition and (y)
securities received by an Issuer or any Restricted Subsidiary
from the transferee that are promptly converted by such Issuer or
such Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires
the purchase of Securities pursuant to Section 4.06(a)(iii)(C),
the Issuers will be required to purchase Securities tendered
pursuant to an offer by any or all of the Issuers for the
Securities (the "Offer") at a purchase price of 100% of their
principal amount plus accrued interest to the date of purchase in
accordance with the procedures (including prorationing in the
event of oversubscription) set forth in Section 4.06(c). If the
aggregate purchase price of Securities tendered pursuant to the
Offer is less than the Net Available Cash allotted to the
purchase of the Securities, the Issuers may utilize the remaining
Net Available Cash for general corporate purposes. The Issuers
will not be required to make an Offer for Securities pursuant to
this Section if the Net Available Cash available therefor (after
application of the proceeds as provided in clauses (A) and (B) of
Section 4.06(a)(iii)) is less than $10 million for any particular
Asset Disposition (which lesser amounts will be carried forward
for purposes of determining whether an Offer is required with
respect to the Net Available Cash from any subsequent Asset
Disposition).
(c) (1) Promptly, and in any event within 30 days
after the Issuers become obligated to make an Offer, the Issuers
shall be obligated to deliver to the Trustee and send, by first-
class mail to each Holder, at the address appearing in the
Security Register, a written notice stating that the Holder may
elect to have his Securities purchased by the Issuers either in
whole or in part (subject to prorationing as hereinafter
described in the event the Offer is oversubscribed) in integral
multiples of $1,000 of principal amount, at the applicable
purchase price. The notice shall specify a purchase date not
less than 30 days nor more than 60 days after the date of such
notice (the "Purchase Date") and shall contain (i) the most
recently filed Annual Report on Form 10-K (including audited
consolidated financial statements) of each applicable Issuer, the
most recent subsequently filed Quarterly Report on Form 10-Q of
each applicable Issuer and any Current Report on Form 8-K of any
such Issuer filed subsequent to such Quarterly Report, other than
Current Reports describing
<PAGE>
Asset Dispositions otherwise described in the offering materials
(or corresponding successor reports), (ii) a description of
material developments in the Issuers' business subsequent to the
date of the latest of such Reports, and (iii) if material,
appropriate pro forma financial information and all instructions
and materials necessary to tender Securities pursuant to the
Offer, together with the information contained in clause (3).
(2) Not later than the date upon which written notice
of an Offer is delivered to the Trustee as provided below, each
Issuer shall deliver to the Trustee an Officers' Certificate as
to (i) the amount of the Offer (the "Offer Amount"), (ii) the
allocation of the Net Available Cash from the Asset Dispositions
pursuant to which such Offer is being made and (iii) the
compliance of such allocation with the provisions of Section
4.06(a). Upon the expiration of the period for which the Offer
remains open (the "Offer Period"), the Issuers shall deliver to
the Trustee for cancelation the Securities or portions thereof
which have been properly tendered to and are to be accepted by
the Issuers. Not later than 11:00 a.m. (New York City time) on
the Purchase Date, the Issuers shall irrevocably deposit with the
Trustee or with a paying agent (or, if an Issuer is acting as
Paying Agent, segregate and hold in trust) an amount in cash
sufficient to pay the Offer Amount for all Securities properly
tendered to and accepted by the Issuers. The Trustee shall, on
the Purchase Date, mail or deliver payment to each tendering
Holder in the amount of the purchase price.
(3) Holders electing to have a Security purchased will
be required to surrender the Security, with an appropriate form
duly completed, to the Issuers at the address specified in the
notice at least three Business Days prior to the Purchase Date.
Holders will be entitled to withdraw their election in whole or
in part if the Trustee or an Issuer receives not later than one
Business Day prior to the Purchase Date, a facsimile transmission
or letter setting forth the name of the Holder, the principal
amount of the Security (which shall be $1,000 or an integral
multiple thereof) which was delivered for purchase by the Holder,
the aggregate principal amount of such Security (if any) that
remains subject to the original notice of the Offer and that has
been or will be delivered for purchase by the Issuers and a
statement that such Holder is withdrawing his election to have
such Security purchased. If at the expiration of the Offer
Period the aggregate principal amount of
<PAGE>
Securities surrendered by Holders exceeds the Offer Amount, the
Issuers shall select the Securities to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by the
Issuers so that only Securities in denominations of $1,000, or
integral multiples thereof, shall be purchased). Holders whose
Securities are purchased only in part will be issued new
Securities equal in principal amount to the unpurchased portion
of the Securities surrendered.
(4) A Security shall be deemed to have been accepted
for purchase at the time the Trustee, directly or through an
agent, mails or delivers payment therefor to the surrendering
Holder.
(d) The Issuers shall comply, to the extent
applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Section, the
Issuers shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached their
obligations under this Section by virtue thereof.
SECTION 4.07. Limitation on Transactions with
Affiliates. (a) None of the Issuers will, or will permit any
Restricted Subsidiary to, directly or indirectly, enter into or
conduct any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with
any Affiliate of an Issuer (an "Affiliate Transaction") on terms
(i) that are less favorable to such Issuer or such Restricted
Subsidiary, as the case may be, than those that could be obtained
at the time of such transaction in arm's-length dealings with a
Person who is not such an Affiliate and (ii) that, in the event
such Affiliate Transaction involves an aggregate value to an
Affiliate, Issuer or Subsidiary in excess of $1 million, are (A)
not in writing and (B) have not been either (x) approved by a
majority of the disinterested members of the Board of Directors
of the applicable Issuer or (y) with respect to which, if no such
disinterested members exist, such Issuer or Restricted Subsidiary
has not received a fairness opinion from a nationally recognized,
nonaffiliated investment banking, appraisal or accounting firm.
In addition, if such Affiliate Transaction involves an aggregate
value to an Affiliate, Issuer or Subsidiary in excess of $20
million, a
<PAGE>
fairness opinion must be provided by a nationally recognized,
nonaffiliated investment banking, appraisal or accounting firm.
The foregoing sentence will not apply to payments to an Affiliate
pursuant to arrangements with such Affiliate enabling an Issuer
or Subsidiary to obtain insurance; provided that all amounts paid
to such Affiliate by an Issuer or Subsidiary are utilized by such
Affiliate to pay the cost of the premiums of any such insurance
for an Issuer or Subsidiary payable to an unrelated third party
and reasonable related expenses. Notwithstanding the foregoing,
clause (ii) above will not apply to transactions with Certified
Tours, Inc. ("Certified") for the provision of rental vehicles by
the Issuers to customers of Certified; provided, that a majority
of the disinterested members of the Board of Directors of the
applicable Issuer have approved (as meeting the requirements of
clause (i)) the contractual arrangements pursuant to which such
vehicles are rented at least once a year.
(b) The provisions of Section 4.07(a) will not
prohibit (i) any Restricted Payment permitted to be made pursuant
to Section 4.04, (ii) any issuance of securities, or other
payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, the
entering into of compensation arrangements, stock options and
stock ownership plans approved by the Board of Directors of the
applicable Issuer, (iii) loans or advances to employees in the
ordinary course of business, provided, however, that the
aggregate amount for all Issuers of such loans or advances
outstanding at any time does not exceed $1 million, (iv) the
payment of reasonable fees to directors of an Issuer and its
Subsidiaries in the ordinary course of business, (v) transactions
described in the Prospectus pursuant to agreements in effect on
the Issue Date (including, without limitation, payments to Rising
Moon not in excess of $6 million per calendar year, subject to
adjustment, plus an aggregate of 13.4% of Combined Net Profits
Before Taxes, pursuant to the Rising Moon Management Agreements),
in each case as the same may be amended or replaced on terms not
less favorable to the Issuers, (vi) any transaction between an
Issuer and another Issuer or between an Issuer and a Wholly Owned
Subsidiary of any Issuer or between Wholly Owned Subsidiaries,
(vii) the Incurrence of Non-Recourse Tax Debt in accordance with
this Indenture, (viii) the designation of European Subsidiaries
in accordance with this Indenture or (ix) the Permitted
Shareholder Amendments.
<PAGE>
SECTION 4.08. Change of Control. (a) Upon a Change
of Control, each Holder shall have the right to require that the
Issuers repurchase all or any part of such Holder's Securities at
a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of
repurchase (subject to the right of Holders of record on the
relevant record date to receive interest on the related interest
payment date), in accordance with the terms contemplated in
Section 4.08(b).
(b) Within 30 days following any Change of Control,
the Issuers shall mail a notice to each Holder with a copy to the
Trustee stating:
(1) that a Change of Control has occurred and that such
Holder has the right to require the Issuers to purchase such
Holder's Securities at a purchase price in cash equal to
101% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of purchase (subject to
the right of Holders of record on a record date to receive
interest on the relevant interest payment date);
(2) the circumstances and relevant facts and pro forma
financial information regarding such Change of Control;
(3) the repurchase date (which shall be no earlier than
30 days nor later than 60 days from the date such notice is
mailed); and
(4) the instructions determined by the Issuers,
consistent with this Section, that a Holder must follow in
order to have its Securities purchased.
(c) Holders electing to have a Security purchased will
be required to surrender the Security, with an appropriate form
duly completed, to the Issuers at the address specified in the
notice at least three Business Days prior to the purchase date.
Holders will be entitled to withdraw their election if the
Trustee or an Issuer receives not later than one Business Day
prior to the purchase date, a facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the
Security which was delivered for purchase by the Holder as to
which such notice of withdrawal is being submitted and a
statement that such
<PAGE>
Holder is withdrawing his election to have such Security
purchased.
(d) On the purchase date, all Securities purchased by
the Issuers under this Section shall be delivered to the Trustee
for cancelation, and the Issuers shall pay the purchase price
plus accrued and unpaid interest, if any, to the Holders entitled
thereto.
(e) The Issuers shall comply, to the extent
applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Section, the
Issuers shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its
obligations under this Section by virtue thereof.
(f) Notwithstanding the occurrence of a Change of
Control, the Issuers shall not be obligated to repurchase the
Securities or otherwise comply with this Section if the Issuers
have irrevocably elected to redeem all the Securities in
accordance with Article Three; provided that the Issuers do not
default in their redemption obligations pursuant to such
election.
SECTION 4.09. Compliance Certificate. Each Issuer
shall deliver to the Trustee within 120 days after the end of
each fiscal year of such Issuer an Officers' Certificate, one of
the signers of which shall be the principal executive, financial
or accounting officer of such Issuer, stating that in the course
of the performance by the signers of their duties as Officers of
such Issuer they would normally have knowledge of any Default and
whether or not the signers know of any Default that occurred
during such period. If they do, the certificate shall describe
the Default, its status and what action such Issuer is taking or
proposes to take with respect thereto. Each Issuer also shall
comply with TIA 314(a)(4).
SECTION 4.10. Further Instruments and Acts. Upon
request of the Trustee, each Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of
this Indenture.
<PAGE>
SECTION 4.11. Limitation on Liens. None of the
Issuers will, or will permit any Restricted Subsidiary to,
directly or indirectly, create or permit to exist any Lien on any
of its property or assets (including Capital Stock), whether
owned on the Issue Date or thereafter acquired, securing any
obligation other than Permitted Liens, unless contemporaneously
therewith effective provision is made to secure the Securities
equally and ratably with (or on a senior basis to, in the case of
Subordinated Obligations) such obligation for so long as such
obligation is so secured.
SECTION 4.12. Limitation on Sale/Leaseback
Transactions. None of the Issuers will, or will permit any
Restricted Subsidiary to, enter into any Sale/Leaseback
Transaction with respect to any property unless (i) such Issuer
or such Subsidiary would be entitled to (A) Incur Indebtedness in
an amount equal to the Attributable Debt with respect to such
Sale/Leaseback Transaction pursuant to Section 4.03 (including
without limitation Section 4.03(b)(vi)) and (B) create a Lien on
such property securing such Attributable Debt without equally and
ratably securing the Securities pursuant to Section 4.11, (ii)
the net cash proceeds received by such Issuer or any Restricted
Subsidiary in connection with such Sale/Leaseback Transaction are
at least equal to the fair value (as determined by the Board of
Directors of the applicable Issuer) of such property and (iii)
the transfer of such property is permitted by, and such Issuer
applies the proceeds of such transaction in compliance with,
Section 4.06.
SECTION 4.13. Limitation on Sale of Stock of an
Insignificant Issuer. In the event of any sale or other transfer
(including by merger) of Capital Stock of an Insignificant Issuer
which constitutes a Change of Control Event, or any dissolution
or liquidation of an Insignificant Issuer, (i) the Issuers will
cause the consideration received to meet the requirements of
clauses (i) and (ii) of Section 4.06(a) as if such transaction
constituted an Asset Disposition (subject to the limitation
contained in clause (v) of the definition of "Asset Disposition")
by an Issuer, (ii) the Issuers will cause the Net Available
Proceeds received from such transaction to be contributed within
30 days of such event by the Included Holders who are
shareholders or partners of such Insignificant Issuer to one or
more of the other Issuers as a capital contribution (the
"Contribution Amount") and (iii) the Issuers will be deemed
<PAGE>
to have received proceeds from an Asset Disposition in an amount
equal to the fair market value of such proceeds or property (as
determined in good faith by the Board of Directors of the
applicable Issuer), which amount must be applied in accordance
with Sections 4.06(a)(iii) and 4.06(b), (c) and (d); provided,
however, that in the event such shareholders or partners receive
property other than cash or Temporary Cash Investments as
consideration for such Capital Stock, the Issuers shall pay on
behalf of such shareholders or partners any of the expenses
enumerated in clauses (i) through (iv) of the definition of "Net
Available Proceeds" which are required to be paid in connection
with such sale of Capital Stock to the extent not paid from the
consideration so received by such shareholders and partners;
provided further, however, that a portion or all of the
Contribution Amount may be retained by the applicable
shareholders or partners and not contributed or applied pursuant
to clauses (ii) and (iii) of this Section (the "Retained
Amount"), provided that (A) the Retained Amount may not exceed
the amount of Restricted Payments that could be made at such time
by the Issuers pursuant to Section 4.04(a) and (B) the Retained
Amount will be included in the calculation of the amount of
Restricted Payments. If a sale or other transfer of all the
Capital Stock of an Insignificant Issuer is made in compliance
with this Section, such Insignificant Issuer will be released and
discharged from its obligations under this Indenture.
SECTION 4.14. Future Affiliate Co-Issuers. After the
Issue Date, the Issuers will cause any Affiliate of any Issuer
(other than a Subsidiary of any Issuer) which is engaged in the
business of renting passenger vehicles in North America or Europe
and derives (or is anticipated in the next twelve months to
derive) therefrom revenue in excess of $1 million in any one year
and which (A) utilizes the "Alamo", "Alamo Express", "Alamo
Express Plus", "Just Ask Alamo" or other similar trademark or
name used by any of the Issuers or (B) engages in Affiliate
Transactions which involve or will involve an aggregate value to
an Affiliate, Issuer or Subsidiary in excess of $5 million in any
one year or uses or will use any material business time or
expertise of the senior management of any of the Issuers (other
than Michael S. Egan, Norman D. Tripp or William H. Kelly, Jr.),
to execute and deliver to the Trustee a supplemental Indenture
pursuant to which such Affiliate will become an Issuer under this
Indenture (and will thereupon become jointly and severally liable
for all the obligations of the Issuers under this Indenture and
the Securities (subject to
<PAGE>
Section 10.11) and be subject to the restrictions and limitations
set forth herein); provided, however, that no such Affiliate
shall become an Issuer unless immediately after giving effect to
such Affiliate becoming an Issuer, the Issuers would be able to
Incur an additional $1.00 of Indebtedness under Section 4.03(a).
The Issuers shall not permit any Affiliate of any Issuer (other
than a Subsidiary of any Issuer) to utilize such trademarks or
names or to engage in such Affiliate Transactions or use such
business time or expertise except in compliance with this
covenant. This Section shall not prohibit Issuers or Restricted
Subsidiaries from making Investments in existing Issuers or
Restricted Subsidiaries or in Unrestricted Subsidiaries to the
extent that such Investments are otherwise permitted under this
Indenture. For purposes of the first sentence of this Section,
the business of renting passenger vehicles shall not include
Certified's business of receiving commissions for arranging the
rental of passenger vehicles from an Issuer or others.
SECTION 4.15. Limitation on Permitted Vehicle
Indebtedness. The aggregate principal amount of Permitted
Vehicle Indebtedness as of the last calendar day of each month
(the "Determination Date") shall not exceed the net book value of
the Permitted Vehicle Collateral on such Determination Date.
Notwithstanding the foregoing, if the Issuers are not in
compliance with the preceding sentence on any Determination Date,
the Issuers will not be in breach thereof so long as (i) within
20 days from the Determination Date (or if such day is not a
Business Day, on the next succeeding Business Day) the Issuers
repay sufficient Permitted Vehicle Indebtedness or deposit as
collateral additional Permitted Vehicle Collateral so that the
Issuers would have been in compliance as of the Determination
Date assuming such repayment or deposit had been made on such
date or (ii) the Issuers deliver to the Trustee an Officers'
Certificate setting forth the amount of the shortfall within 20
days of such Determination Date (or if such day is not a Business
Day, on the next succeeding Business Day) and within 45 days from
the Determination Date (or if such day is not a Business Day, on
the next succeeding Business Day) the Issuers repay sufficient
Permitted Vehicle Indebtedness or deposit as collateral
additional Permitted Vehicle Collateral so that the Issuers would
have been in compliance as of the Determination Date assuming
such repayment or deposit had been made on such date.
<PAGE>
SECTION 4.16. Additional Amounts. All amounts payable
by the Issuers (whether in respect of principal, redemption
amount, interest or otherwise) in respect of the Securities shall
be made free and clear of and without withholding or deduction
for or on account of any present or future taxes, duties,
assessments or other governmental charges of whatever nature
imposed or levied by or on behalf of a jurisdiction other than
the United States of America from which payments in respect of
the Securities are made or any political subdivision thereof or
any authority or agency therein or thereof (the "Relevant
Jurisdiction") having power to tax ("Taxes"), unless the
withholding or deduction of such Taxes is required by law. In
the event that withholding or deduction of such Taxes is required
by law, the relevant Issuer shall pay such additional amounts
("Additional Amounts") as will result in the payment to each
Holder of such Security of the amounts which would have been
payable in respect of such Security had no such withholding or
deduction been required, except that no Additional Amounts shall
be so payable for or on account of:
(a) any Taxes which would not have been imposed but for
the fact that the Holder or beneficial owner of such Security:
(i) has or had any present or former connection with
the Relevant Jurisdiction (or any political subdivision or
any taxing authority thereof or therein) (including, without
limitation, such Holder or beneficial owner (or a fiduciary,
settlor, beneficiary, member or shareholder of, or possessor
of a power over, the Holder or beneficial owner, if such
Holder or beneficial owner is an estate, trust, partnership
or corporation) (A) being or having been a citizen,
resident, or national thereof, (B) maintaining or having
maintained an office, permanent establishment or branch
therein, or (C) being or having been present or engaged in
trade or business therein), other than the mere ownership
of, or receipt of payment under, such Security;
(ii) presented such Security for payment in the
Relevant Jurisdiction, unless such Security could not have
been presented for payment elsewhere; or
(iii) presented such Security more than 30 days after
the date on which the payment in respect of such Security
first became due and payable or provided for,
<PAGE>
whichever is later, except to the extent that the Holder
would have been entitled to such Additional Amounts if it
had presented such Security for payment on any day within
such period of 30 days;
(b) any estate, inheritance, gift, sales, transfer,
stamp, personal property or similar tax, assessment or other
governmental charge;
(c) any Taxes which are payable otherwise than by
withholding or deduction from payments of (or in respect of) the
Securities;
(d) any Taxes that are imposed on, or withheld or
deducted from, payments under the Security by reason of the
failure by the Holder or the beneficial owner of a Security (i)
to provide information concerning the nationality, residence,
connection with the Relevant Jurisdiction (or any political
subdivision or taxing authority thereof or therein) or identity
of the Holder or such beneficial owner, or (ii) to make any
certification or declaration or other similar claim or satisfy
any information or reporting requirement, which, in the case of
(i) or (ii), is required or imposed by a statute, treaty,
regulation, ruling or administrative practice of the taxing
jurisdiction as a precondition to exemption from all or part of
such Taxes; or
(e) any combination of items (a), (b), (c) and (d);
nor shall Additional Amounts be paid with respect to any payment
of the principal of or interest on a Security to any Holder who
is (x) a fiduciary or partnership or other than the sole
beneficial owner of such payment to the extent that such payment
would be required by the laws of the Relevant Jurisdiction (or
any political subdivision or taxing authority thereof or therein)
to be included in the income for tax purposes of a beneficiary or
settlor with respect to such fiduciary or a member of such
partnership, or (y) a beneficial owner who would not have been
entitled to payment of Additional Amounts had it been the Holder
of the Security.
In the event that Additional Amounts actually paid with
respect to a Security are based on rates of deduction or
withholding of Taxes in excess of the appropriate rate applicable
to the Holder or beneficial owner of such Security, and, as a
result thereof, such Holder or
<PAGE>
beneficial owner is entitled to make a claim for a refund or
credit of such excess, then such Holder or beneficial owner
shall, by accepting such Security, be deemed to have assigned and
transferred all right, title and interest to any such claim for a
refund or credit of such excess to the Issuer. However, by
making such assignment, the Holder or beneficial owner makes no
representation or warranty that the Issuer will be entitled to
receive such claim for a refund or credit and incurs no other
obligation with respect thereto.
ARTICLE 5
Successor Company
-----------------
SECTION 5.01. When Issuers May Merge or Transfer
Assets. Except as otherwise provided in Section 4.13, none of
the Issuers will consolidate with or merge with or into, or
convey, transfer or lease all or substantially all its assets to,
any Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") will be a corporation, limited
liability company or partnership organized and existing
under the laws of the United States of America, any State
thereof or the District of Columbia (a "U.S. Entity"),
except that in the case of an Issuer which is not a U.S.
Entity, the Successor Company will not be required to be a
U.S. Entity, and the Successor Company (if not an Issuer)
will expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory
to the Trustee, all the obligations of the Issuers under the
Securities and this Indenture;
(ii) immediately after giving effect to such
transaction (and treating any Indebtedness which becomes an
obligation of the Successor Company or any Restricted
Subsidiary as a result of such transaction as having been
Incurred by the Successor Company or such Restricted
Subsidiary at the time of such transaction), no Default will
have occurred and be continuing;
(iii) immediately after giving effect to such
transaction, the Successor Company would be able to Incur an
additional $1.00 of Indebtedness under Section 4.03(a);
<PAGE>
(iv) immediately after giving effect to such
transaction, the Successor Company will have Consolidated
Net Worth in an amount which is not less than the
Consolidated Net Worth of such Issuer immediately prior to
such transaction; and
(v) such Issuer will have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with this Indenture.
Opinions of Counsel required to be delivered under this
Section may have qualifications customary for opinions of the
type required and counsel delivering such Opinions of Counsel may
rely on certificates of the Issuers or government or other
officials customary for opinions of the type required, including
certificates certifying as to matters of fact.
The Successor Company will succeed to, and be
substituted for, and may exercise every right and power of, such
Issuer under this Indenture, but the predecessor Company in the
case of a lease of all its assets or a conveyance, transfer or
lease of substantially all its assets will not be released from
the obligation to pay the principal of and interest on the
Securities.
Notwithstanding the foregoing clauses (ii), (iii) and
(iv), any Issuer may consolidate with, merge into or transfer all
or part of its properties and assets to any Issuer (or any
Restricted Subsidiary which becomes an Issuer in connection with
such transaction).
ARTICLE 6
Defaults and Remedies
---------------------
SECTION 6.01. Events of Default. An "Event of
Default" occurs if:
(1) any Issuer defaults in any payment of interest on
any Security when the same becomes due and payable, and such
default continues for a period of 30 days;
(2) any Issuer (i) defaults in the payment of the
principal of any Security when the same becomes due and
<PAGE>
payable at its Stated Maturity, upon redemption, upon
declaration or otherwise, or (ii) fails to redeem or
purchase Securities when required pursuant to this Indenture
or the Securities;
(3) any Issuer fails to comply with Section 5.01;
(4) any Issuer fails to comply with Section 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.11, 4.12, 4.13, 4.14 or 4.15
(other than a failure to purchase Securities when required
under Section 4.06 or 4.08) and such failure continues for
30 days after the notice specified below;
(5) any Issuer fails to comply with any of its
agreements in the Securities or this Indenture (other than
those referred to in (1), (2), (3) or (4) above) and such
failure continues for 60 days after the notice specified
below;
(6) Indebtedness of any Issuer or any Significant
Subsidiary is not paid within any applicable grace period
after final maturity or is accelerated by the holders
thereof because of a default and the total amount of such
Indebtedness unpaid or accelerated exceeds $10,000,000 or
its foreign currency equivalent at the time;
(7) any Issuer or any Significant Subsidiary of an
Issuer pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of
it or for any substantial part of its property; or
(D) makes a general assignment for the benefit of
its creditors;
or takes any comparable action under any foreign laws
relating to insolvency;
<PAGE>
(8) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(A) is for relief against any Issuer or any
Significant Subsidiary of an Issuer in an involuntary
case;
(B) appoints a Custodian of any Issuer or any
Significant Subsidiary of an Issuer or for any
substantial part of the property of any Issuer or
Significant Subsidiary; or
(C) orders the winding up or liquidation of any
Issuer or any Significant Subsidiary of an Issuer;
or any similar relief is granted under any foreign laws and
the order or decree remains unstayed and in effect for 60
days; or
(9) any judgment or decree for the payment of money in
respect of which the portion not covered by insurance is in
excess of $10,000,000 or its foreign currency equivalent at
the time is entered against any Issuer or any Significant
Subsidiary of an Issuer and is not discharged and there is a
period of 60 days following the entry of such judgment or
decree during which such judgment or decree is not
discharged, waived or the execution thereof stayed.
The foregoing will constitute Events of Default
whatever the reason for any such Event of Default and whether it
is voluntary or involuntary or is effected by operation of law or
pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, United States
Code, as amended, or any similar federal or state law for the
relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4) or (5) is not an Event of
Default until the Trustee or the Holders of at least 25% in
aggregate principal amount of the outstanding Securities notify
the Issuers of the Default and the Issuers do not cure such
Default within the time specified after receipt of
<PAGE>
such notice. Such notice must specify the Default, demand that
it be remedied and state that such notice is a "Notice of
Default".
The Issuers shall deliver to the Trustee, within 30
days after the occurrence thereof, written notice in the form of
an Officers' Certificate of any Event of Default under clause (6)
and any event which with the giving of notice or the lapse of
time would become an Event of Default under clause (4), (5) or
(9), its status and what action the Issuers are taking or propose
to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default
(other than an Event of Default specified in Section 6.01(7) or
(8) with respect to an Issuer) occurs and is continuing, the
Trustee by notice to the Issuers, or the Holders of at least 25%
in aggregate principal amount of the outstanding Securities by
notice to the Issuers and the Trustee, may declare the principal
of and accrued interest on all the Securities to be due and
payable. Upon such a declaration, such principal and interest
shall be due and payable immediately. If an Event of Default
specified in Section 6.01(7) or (8) with respect to an Issuer
occurs, the principal of and accrued interest on all the
Securities shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the
Trustee or any Securityholders. The Holders of a majority in
aggregate principal amount of the outstanding Securities by
notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest
that has become due solely because of acceleration. No such
rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default
occurs and is continuing, the Trustee may pursue any available
remedy to collect the payment of principal of or interest on the
Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding even if it does
not possess any of the Securities or does not produce any of them
in the proceeding. A delay or omission by the Trustee or any
Securityholder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or
constitute a waiver of or acquies-
<PAGE>
cence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are, to the extent
permitted by law, cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of
a majority in aggregate principal amount of the Securities then
outstanding by notice to the Trustee may waive any past or
existing Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Security or (ii) a
Default in respect of a provision that under Section 9.02 cannot
be amended without the consent of each Securityholder affected.
When a Default is waived, it is deemed cured, and any Event of
Default arising therefrom shall be deemed to have been cured, but
no such waiver shall extend to any subsequent or other Default or
impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a
majority in aggregate principal amount of the Securities may
direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or of exercising any
trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or
this Indenture or, subject to Section 7.01, that the Trustee
determines is unduly prejudicial to the rights of other
Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with
such direction. Prior to taking any action hereunder, the
Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by
taking or not taking such action.
SECTION 6.06. Limitation on Suits. A Securityholder
may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice
stating that an Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal
amount of the Securities make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee
reasonable security or indemnity against any loss, liability
or expense;
<PAGE>
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of
security or indemnity; and
(5) the Holders of a majority in aggregate principal
amount of the Securities do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to
prejudice the rights of another Securityholder or to obtain a
preference or priority over another Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder to receive payment of principal of and interest on
the Securities held by such Holder, on or after the respective
due dates expressed in the Securities, or to bring suit for the
enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event
of Default specified in Section 6.01(1) or (2) occurs and is
continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Issuers for the whole
amount then due and owing (together with interest on any unpaid
interest to the extent lawful) and the amounts provided for in
Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The
Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Trustee and the Securityholders allowed in any
judicial proceedings relative to any Issuer, its creditors or its
property and, unless prohibited by law or applicable regulations,
may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by
each Holder to make payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it
for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.07.
<PAGE>
SECTION 6.10. Priorities. If the Trustee collects any
money or property pursuant to this Article 6, it shall pay out
the money or property in the following order, subject to
applicable law:
FIRST: to the Trustee for amounts due under Section
7.07;
SECOND: to Securityholders for amounts due and unpaid
on the Securities for principal and interest, ratably,
without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal and
interest, respectively; and
THIRD: to the Issuers.
The Trustee may, upon prior written notice to the
Issuers, fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days
before such record date, the Issuers shall mail to each
Securityholder and the Trustee a notice that states the record
date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for
the enforcement of any right or remedy under this Indenture or in
any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing
by any party litigant in the suit of an undertaking to pay the
costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07
or a suit by Holders of more than 10% in aggregate principal
amount of the outstanding Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. Each
of the Issuers (to the extent it may lawfully do so) shall not at
any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture;
and each of the Issuers (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such
law, and shall not hinder, delay or impede the execution of any
power
<PAGE>
herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been
enacted.
ARTICLE 7
Trustee
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SECTION 7.01. Duties of Trustee. (a) If an Event of
Default has occurred and is continuing, the Trustee shall
exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a
prudent Person would exercise or use under the circumstances in
the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of
Default:
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Indenture. However, in the case of any such certificates or
opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall
examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its
own wilful misconduct, except that:
(1) this paragraph does not limit the effect of
paragraph (b) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
<PAGE>
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c)
of this Section.
(e) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
(f) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if
it shall have reasonable grounds to believe that repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(g) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section
and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may
rely on any document believed by it to be genuine and to have
been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting,
it may require an Officers' Certificate or an Opinion of Counsel.
The Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on the Officers' Certificate or
Opinion of Counsel.
(c) The Trustee may act through agents and shall not
be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be
authorized or within its rights or powers; provided, however,
that the Trustee's conduct does not constitute wilful misconduct
or negligence.
<PAGE>
(e) The Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters
relating to this Indenture and the Securities shall be full and
complete authorization and protection from liability in respect
to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction.
SECTION 7.03. Individual Rights of Trustee. The
Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with any of
the Issuers or their respective Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent,
Registrar, co-registrar or co-paying agent may do the same with
like rights. However, the Trustee must comply with Sections 7.10
and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall
not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Securities, it
shall not be accountable for the Issuers' use of the proceeds
from the Securities, and it shall not be responsible for any
statement of the Issuers in this Indenture or in any document
issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of
authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs
and is continuing and if it is known to the Trustee, the Trustee
shall mail to each Securityholder notice of the Default within 90
days after it occurs. Except in the case of a Default in payment
of principal of or interest on any Security (including payments
pursuant to the mandatory redemption provisions of such Security,
if any), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As
promptly as practicable after each May 15 beginning with the
<PAGE>
May 15 following the date of this Indenture, and in any event
prior to July 15 in each year, the Trustee shall mail to each
Securityholder a brief report dated as of May 15 that complies
with TIA 313(a). The Trustee also shall comply with TIA
313(b). The Trustee shall promptly deliver to the Issuers a copy
of any report it delivers to Holders pursuant to Section 7.06.
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock
exchange (if any) on which the Securities are listed. Each of
the Issuers agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Issuers
shall pay to the Trustee from time to time such compensation for
its services as the Issuers and the Trustee shall from time to
time agree in writing. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express
trust. The Issuers shall reimburse the Trustee upon request for
all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to such compensation
for its services, except any such expense, disbursement or
advance as may arise from its negligence, wilful misconduct or
bad faith. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Trustee
shall provide the Issuers reasonable notice of any expenditure
not in the ordinary course of business; provided that prior
approval by the Issuers of any such expenditure shall not be a
requirement for the making of such expenditure nor for
reimbursement by the Issuers thereof. The Issuers shall
indemnify each of the Trustee and any predecessor Trustees
against any and all loss, damage, claim, liability or expense
(including attorneys' fees and expenses) (other than taxes
applicable to the Trustee's compensation hereunder) incurred by
it in connection with the acceptance or administration of this
trust and the performance of its duties hereunder. The Trustee
shall notify the Issuers promptly of any claim for which it may
seek indemnity. Failure by the Trustee to so notify the Issuers
shall not relieve the Issuers of their obligations hereunder.
The Issuers shall defend the claim and the Trustee may have
separate counsel and the Issuers shall pay the reasonable fees
and expenses of such counsel. The Issuers need not reimburse any
expense or indemnify against
<PAGE>
any loss, liability or expense incurred by the Trustee through
the Trustee's own wilful misconduct, negligence or bad faith.
To secure the Issuers' payment obligations in this
Section, the Trustee shall have a lien prior to the Securities on
all money or property held or collected by the Trustee other than
money or property held in trust to pay principal of and interest
on particular Securities.
The Issuers' payment obligations pursuant to this
Section shall survive the discharge of this Indenture. When the
Trustee incurs expenses after the occurrence of a Default
specified in Section 6.01(7) or (8) with respect to an Issuer,
the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may
resign at any time by so notifying the Issuers. The Holders of a
majority in principal amount of the Securities then outstanding,
may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Issuers shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Issuers or by
the Holders of a majority in principal amount of the Securities
and such Holders do not reasonably promptly appoint a successor
Trustee, or if a vacancy exists in the office of Trustee for any
reason (the Trustee in such event being referred to herein as the
retiring Trustee), the Issuers shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Issuers.
Thereupon the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all
the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall
<PAGE>
mail a notice of its succession to Securityholders. The retiring
Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided
for in Section 7.07.
If a successor Trustee does not take office within 60
days after the retiring Trustee resigns or is removed, the
retiring Trustee or the Holders of 10% in principal amount of the
Securities may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor
Trustee.
Notwithstanding the replacement of the Trustee pursuant
to this Section, the Issuers' obligations under Section 7.07
shall continue for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the
Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business or assets
to, another corporation or banking association, the resulting,
surviving or transferee corporation without any further act shall
be the successor Trustee, provided that such corporation shall be
eligible under this Article Seven and TIA Section 3.10(a).
In case at the time such successor or successors by
merger, conversion or consolidation to the Trustee shall succeed
to the trusts created by this Indenture any of the Securities
shall have been authenticated but not delivered, any such
successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such
Securities so authenticated; and in case at that time any of the
Securities shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name
of any predecessor hereunder or in the name of the successor to
the Trustee; and in all such cases such certificates shall have
the full force which it is anywhere in the Securities or in this
Indenture provided that the certificate of the Trustee shall
have.
SECTION 7.10. Eligibility; Disqualification. The
Trustee shall at all times satisfy the requirements of TIA
310(a). The Trustee shall have a combined capital and
<PAGE>
surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply
with TIA 310(b); provided, however, that there shall be
excluded from the operation of TIA 310(b)(1) any indenture or
indentures under which other securities or certificates of
interest or participation in other securities of any Issuer are
outstanding if the requirements for such exclusion set forth in
TIA 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims
Against Issuers. The Trustee shall comply with TIA 311(a),
excluding any creditor relationship listed in TIA 311(b). A
Trustee who has resigned or been removed shall be subject to TIA
311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. Discharge of Liability on Securities;
Defeasance. (a) When (i) the Issuers deliver to the Trustee all
outstanding Securities (other than Securities replaced pursuant
to Section 2.07) for cancelation or (ii) all outstanding
Securities have become due and payable, whether at maturity or as
a result of the mailing of a notice of redemption pursuant to
Article 3 hereof or the Securities will become due and payable at
their Maturity within 91 days, or the Securities are to be called
for redemption within 91 days under arrangements satisfactory to
the Trustee for the giving of notice of redemption by the Trustee
in the name, and at the expense, of the Issuers, and, in each
case of this clause (ii), the Issuers irrevocably deposit or
cause to be deposited with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Securities, including
interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.07), and if in either
case the Issuers pay all other sums payable hereunder by the
Issuers, then this Indenture shall, subject to Section 8.01(c),
cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of each
Issuer accompanied by Officers' Certificates and an Opinion of
Counsel from each such Issuer that all conditions precedent
provided herein for relating to satisfaction and discharge of
this Indenture have been complied with and at the cost and
expense of the Issuers.
<PAGE>
(b) Subject to Sections 8.01(c) and 8.02, the Issuers
at any time may terminate (i) all their obligations under the
Securities and this Indenture ("legal defeasance option") or (ii)
their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14 and 4.15 and the
operation of Sections 6.01(4), 6.01(5), 6.01(6), 6.01(7) (but
only with respect to a Significant Subsidiary), 6.01(8) (but only
with respect to a Significant Subsidiary), 6.01(9) and 5.01(iii)
and 5.01(iv) ("covenant defeasance option"). The Issuers may
exercise their legal defeasance option notwithstanding their
prior exercise of their covenant defeasance option.
If the Issuers exercise their legal defeasance option,
payment of the Securities may not be accelerated because of an
Event of Default. If the Issuers exercise their covenant
defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Section
6.01(4), 6.01(5), 6.01(6), 6.01(7) (but only with respect to a
Significant Subsidiary), 6.01(8) (but only with respect to a
Significant Subsidiary) or 6.01(9) or because of the failure of
any Issuer to comply with clauses (ii), (iii) and (iv) of Section
5.01.
Upon satisfaction of the conditions set forth herein
and upon request of the Issuers, the Trustee shall acknowledge in
writing the discharge of those obligations that the Issuers
terminate.
(c) Notwithstanding clauses (a) and (b) above, the
Issuers' obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
7.07, 7.08, 8.04, 8.05 and 8.06 shall survive until the
Securities have been paid in full. Thereafter, the Issuers'
obligations in Sections 7.07, 8.04 and 8.05 shall survive.
SECTION 8.02. Conditions to Defeasance. The Issuers
may exercise their legal defeasance option or their covenant
defeasance option only if:
(1) the Issuers irrevocably deposit or cause to be
deposited in trust with the Trustee money or U.S. Government
Obligations which through the scheduled payment of principal
and interest in respect thereof in accordance with their
terms will provide cash at such times and in such amounts as
will be sufficient to pay principal and interest when due on
all the Securities (except lost, stolen or destroyed
Securities which have
<PAGE>
been replaced or repaid) to maturity or redemption, as the
case may be;
(2) the Issuers deliver to the Trustee a certificate
from a nationally recognized firm of independent accountants
expressing their opinion that the payments of principal and
interest when due and without reinvestment on the deposited
U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such
amounts as will be sufficient to pay principal and interest
when due on all the Securities (except lost, stolen or
destroyed Securities which have been replaced or repaid) to
maturity or redemption, as the case may be;
(3) 91 days pass after the deposit is made and during
the 91-day period no Default specified in Section 6.01(7) or
(8) with respect to any Issuer occurs which is continuing at
the end of the period;
(4) the deposit does not constitute a default under any
other material agreement binding on any Issuer;
(5) the Issuers deliver to the Trustee an Opinion of
Counsel to the effect that the trust resulting from the
deposit does not constitute, or is qualified as, a regulated
investment company under the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the
Issuers shall have delivered to the Trustee an Opinion of
Counsel stating that (i) the Issuers have received from, or
there has been published by, the Internal Revenue Service a
ruling, or (ii) since the date of this Indenture there has
been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Securityholders
will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and defeasance and
will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been
the case if such deposit and defeasance had not occurred;
(7) in the case of the covenant defeasance option, the
Issuers shall have delivered to the Trustee an
<PAGE>
Opinion of Counsel to the effect that the Securityholders
will not recognize income, gain or loss for Federal income
tax purposes as a result of such covenant defeasance and
will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been
the case if such deposit and covenant defeasance had not
occurred; and
(8) each Issuer delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the
Securities as contemplated by this Article 8 have been
complied with.
Opinions of Counsel required to be delivered under this
Section may have qualifications customary for opinions of the
type required and counsel delivering such Opinions of Counsel may
rely on certificates of the Issuers or government or other
officials customary for opinions of the type required, including
certificates certifying as to matters of fact.
Before or after a deposit, the Issuers may make
arrangements satisfactory to the Trustee for the redemption of
Securities at a future date in accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee
shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article 8. It shall apply the
deposited money and the money from U.S. Government Obligations
either directly or through the Paying Agent (including the
Issuers acting as their own Paying Agent as the Trustee may
determine) and in accordance with this Indenture to the payment
of principal of and interest on the Securities.
SECTION 8.04. Repayment to Issuers. The Trustee and
the Paying Agent shall promptly turn over to the Issuers upon
request any excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the
Trustee and the Paying Agent shall pay to the Issuers upon
written request any money held by them for the payment of
principal or interest that remains unclaimed for two years, and,
thereafter, Securityholders entitled to the money must look to
the Issuers for payment as general creditors.
<PAGE>
SECTION 8.05. Indemnity for Government Obligations.
The Issuers shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against deposited
U.S. Government Obligations or the principal and interest
received on such U.S. Government Obligations other than any such
tax, fee or other charge which by law is for the account of the
Holders of the defeased Securities; provided that the Trustee
shall be entitled to charge any such tax, fee or other charge to
such Holder's account.
SECTION 8.06. Reinstatement. If the Trustee or Paying
Agent is unable to apply any money or U.S. Government Obligations
in accordance with this Article 8 by reason of any legal
proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise
prohibiting such application, the Issuers' obligations under this
Indenture and the Securities shall be revived and reinstated as
though no deposit had occurred pursuant to this Article 8 until
such time as the Trustee or Paying Agent is permitted to apply
all such money or U.S. Government Obligations in accordance with
this Article 8; provided, however, that, (a) if the Issuers have
made any payment of interest on or principal of any Securities
following the reinstatement of their obligations, the Issuers
shall be subrogated to the rights of the Holders of such
Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent and
(b) unless otherwise required by any legal proceeding or any
order or judgment of any court or governmental authority, the
Trustee or Paying Agent shall return all such money and U.S.
Government Obligations to the Issuers promptly after receiving a
written request therefor at any time, if such reinstatement of
the Issuers' obligations has occurred and continues to be in
effect.
ARTICLE 9
Amendments
----------
SECTION 9.01. Without Consent of Holders. The Issuers
and the Trustee may amend this Indenture or the Securities
without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
<PAGE>
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in
addition to or in place of certificated Securities;
provided, however, that the uncertificated Securities are
issued in registered form for purposes of Section 163(f) of
the Code or in a manner such that the uncertificated
Securities are as described in Section 163(f)(2)(B) of the
Code;
(4) to add an Issuer or Co-Issuer in accordance with
the terms hereof;
(5) to add guarantees with respect to the Securities or
to secure the Securities;
(6) to release Alamo Belgium as an Issuer in accordance
with the terms hereof;
(7) to add to the covenants of the Issuers for the
benefit of the Holders or to surrender any right or power
herein conferred upon the Issuers;
(8) to comply with any requirements of the SEC in
connection with qualifying this Indenture under the TIA;
(9) to make any change that does not adversely affect
the rights of any Securityholder; or
(10) to release an Insignificant Issuer in accordance
with the terms hereof.
After an amendment under this Section becomes
effective, the Issuers shall mail to Securityholders a notice
briefly describing such amendment. The failure to give such
notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. The Issuers
and the Trustee may amend this Indenture or the Securities
without notice to any Securityholder but with the written consent
of the Holders of at least a majority in
<PAGE>
principal amount of the Securities. However, without the consent
of each Securityholder affected, an amendment may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment;
(2) reduce the rate of or extend the time for payment
of interest on any Security;
(3) reduce the principal of or extend the Stated
Maturity of any Security;
(4) reduce the premium payable upon the redemption of
any Security or change the time at which any Security may be
redeemed in accordance with Article 3;
(5) make any Security payable in money other than that
stated in the Security;
(6) impair the right of any Holder to receive payment
of principal of and interest on such Holder's Securities on
or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such
Holder's Securities; or
(7) make any change in Section 6.04 or 6.07 or the
second sentence of this Section.
It shall not be necessary for the consent of the
Holders under this Section to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment under this Section becomes
effective, the Issuers shall mail to Securityholders a notice
briefly describing such amendment. The failure to give such
notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities shall comply
with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and
Waivers. A consent to an amendment or a waiver by a Holder of a
Security shall bind the Holder and every subse-
<PAGE>
quent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even
if notation of the consent or waiver is not made on the Security.
After an amendment or waiver becomes effective, it shall bind
every Securityholder.
The Issuers may, but shall not be obligated to, fix a
record date for the purpose of determining the Securityholders
entitled to give their consent or take any other action described
above or required or permitted to be taken pursuant to this
Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to give such
consent or to revoke any consent previously given or to take any
such action, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities.
If an amendment changes the terms of a Security, the Trustee may
require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security
regarding the changed terms and return it to the Holder.
Alternatively, if the Issuers or the Trustee so determine, the
Issuers in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed
terms. Failure to make the appropriate notation or to issue a
new Security shall not affect the validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee
shall sign any amendment authorized pursuant to this Article 9 if
the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the
Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01)
shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that such amendment
is authorized or permitted by this Indenture.
<PAGE>
ARTICLE 10
Miscellaneous
-------------
SECTION 10.01. Trust Indenture Act Controls. If any
provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this
Indenture by the TIA, the required provision shall control. If
this Indenture excludes any provision of the TIA that is required
to be included, such provision shall be deemed included herein.
SECTION 10.02. Notices. Any notice or communication
shall be in writing and delivered in person, by overnight courier
or facsimile or mailed by first-class mail addressed as follows:
if to the Issuers:
Alamo Rent-A-Car, Inc.
110 S.E. 6th Street
Fort Lauderdale, Florida 33301
Attention: Chief Executive Officer
With copies to:
Norman D. Tripp
Tripp, Scott, Conklin & Smith
110 Tower
110 S.E. 6th Street
Fort Lauderdale, Florida 33301
Valerie Ford Jacob
Fried, Frank, Harris, Shriver & Jacobson
One York Plaza
New York, New York 10004
if to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust
Trustee Administration
<PAGE>
The Issuers or the Trustee by notice to the other may
designate additional or different addresses for subsequent
notices or communications.
Any notice or communication mailed or sent by overnight
courier or facsimile to a Securityholder shall be sent to the
Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently
given if so sent within the time prescribed.
Failure to send a notice or communication to a
Securityholder or any defect in it shall not affect its
sufficiency with respect to other Securityholders. If a notice
or communication is sent in the manner provided above, it is duly
given, whether or not the addressee receives it.
Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice.
SECTION 10.03. Communication by Holders with Other
Holders. Securityholders may communicate pursuant to TIA
312(b) with other Securityholders with respect to their rights
under this Indenture or the Securities. The Issuers, the
Trustee, the Registrar and anyone else shall have the protection
of TIA 312(c).
SECTION 10.04. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by any Issuer to the
Trustee to take or refrain from taking any action under this
Indenture, each such Issuer shall furnish to the Trustee:
(1) an Officers' Certificate (which in connection with
the original issuance of the Securities need only be
executed by one Officer for each Issuer) in form and
substance reasonably satisfactory to the Trustee stating
that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee stating that, in the
opinion of such counsel, all such conditions precedent have
been complied with.
<PAGE>
SECTION 10.05. Statements Required in Certificate or
Opinion. Each certificate or opinion with respect to compliance
with a covenant or condition provided for in this Indenture shall
include:
(1) a statement that the individual making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such
individual, he has made such examination or investigation as
is necessary to enable him to express an informed opinion as
to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of
such individual, such covenant or condition has been
complied with.
SECTION 10.06. When Securities Disregarded. In
determining whether the Holders of the required principal amount
of Securities have concurred in any direction, waiver or consent,
Securities owned by any Issuer or by any Person directly or
indirectly controlling or controlled by or under direct or
indirect common control with any Issuer shall be disregarded and
deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Securities which the
Trustee actually knows are so owned shall be so disregarded.
Also, subject to the foregoing, only Securities outstanding at
the time shall be considered in any such determination.
SECTION 10.07. Rules by Trustee, Paying Agent and
Registrar. The Trustee may make reasonable rules for action by
or a meeting of Securityholders. The Trustee shall provide the
Issuers reasonable notice of such rules; provided that neither
prior notice to the Issuers of such rules nor prior approval by
the Issuers of such rules shall be a requirement for their
effectiveness. The Registrar and the Paying Agent may make
reasonable rules for their functions.
<PAGE>
SECTION 10.08. Legal Holidays. A "Legal Holiday" is a
Saturday, a Sunday or a day on which banking institutions are not
required to be open in the State of New York. If a payment date
is a Legal Holiday, payment shall be made on the next succeeding
day that is not a Legal Holiday, and no interest shall accrue for
the intervening period. If a regular record date is a Legal
Holiday, the record date shall not be affected.
SECTION 10.09. Governing Law. This Indenture and the
Securities shall be governed by, and construed in accordance
with, the laws of the State of New York but without giving effect
to applicable principles of conflicts of law to the extent that
the application of the laws of another jurisdiction would be
required thereby.
SECTION 10.10. NO RECOURSE AGAINST OTHERS. THE
SECURITIES SHALL BE NON-RECOURSE TO THE GENERAL AND LIMITED
PARTNERS AND TO THE COMMITTEE OR COMMITTEE MEMBERS OF THE ISSUERS
THAT ARE PARTNERSHIPS (AND, IN THE CASE OF ANY SUCH GENERAL OR
LIMITED PARTNER THAT IS A CORPORATION, TO THE SHAREHOLDERS,
OFFICERS AND DIRECTORS OF SUCH CORPORATION), TO THE SHAREHOLDERS,
OFFICERS AND DIRECTORS OF THE ISSUERS THAT ARE CORPORATIONS AND
TO ALL OTHER PERSONS AND ENTITIES OTHER THAN THE ISSUERS. UPON
AN EVENT OF DEFAULT, HOLDERS OF THE SECURITIES SHALL HAVE
RECOURSE ONLY TO THE ASSETS OF THE ISSUERS.
SECTION 10.11. Obligations Joint and Several. All the
obligations of the Issuers under this Indenture and the
Securities will be joint and several. The obligation of each
Issuer in respect of the Securities and this Indenture will be
limited to an amount not to exceed the maximum amount that can be
assumed by such Issuer without rendering such obligation voidable
under applicable law relating to fraudulent conveyance or
fraudulent transfer, state insolvency laws or similar laws
affecting the rights of creditors generally.
SECTION 10.12. Successors. All agreements of each
Issuer in this Indenture and the Securities shall bind each such
Issuer's successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 10.13. Multiple Originals. The parties may
sign any number of copies of this Indenture. Each signed copy
shall be an original, but all of them together
<PAGE>
represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 10.14. Table of Contents; Headings. The table
of contents, cross-reference sheet and headings of the Articles
and Sections of this Indenture have been inserted for convenience
of reference only, are not intended to be considered a part
hereof and shall not modify or restrict any of the terms or
provisions hereof.
SECTION 10.15. Severability Clause. In case any
provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
IN WITNESS WHEREOF, the parties have caused this
Indenture to be duly executed as of the date first written above.
ALAMO RENT-A-CAR, INC.
TERRITORY BLUE, INC.
GUY SALMON USA, INC.
GUY SALMON USA, LTD., by its
general partner Guy Salmon USA,
Inc.,
by
\s\ D. Keith Cobb
-----------------------------
D. Keith Cobb
Chief Executive Officer of
Alamo Rent-A-Car, Inc.
Chief Executive Officer of
Territory Blue, Inc.
President of Guy Salmon
USA, Inc.
President of Guy Salmon
USA, Inc., as general
partner of Guy Salmon
USA, Ltd.
<PAGE>
DKBERT ASSOC.
GREEN CORN, INC.,
by
\s\ Michael S. Egan
-----------------------------
Michael S. Egan
A General Partner of DKBERT
Assoc.
President of Green Corn,
Inc.
ALAMO RENT-A-CAR (BELGIUM), INC.
ALAMO RENT-A-CAR (CANADA), INC.
TOWER ADVERTISING GROUP, INC.,
by
\s\ N. Maria Menendez
-----------------------------
N. Maria Menendez
Treasurer of Alamo Rent-A-
Car (Belgium), Inc.
Treasurer of Alamo Rent-A-
Car (Canada), Inc.
Treasurer of Tower
Advertising Group, Inc.
THE BANK OF NEW YORK, as Trustee,
by
\s\ Paul J. Schmalzel
-----------------------------
Paul J. Schmalzel
Assistant Treasurer
<PAGE>
EXHIBIT A
FACE OF SECURITY
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE ISSUERS OR THEIR
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC)
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
<PAGE>
No. G-1 $100,000,000
11 3/4% Senior Notes Due 2006
CUSIP No. 011397-AB-2
ALAMO RENT-A-CAR, INC., a Florida corporation, DKBERT
ASSOC., a Florida general partnership, GUY SALMON USA, INC., a
Florida corporation, GUY SALMON USA, LTD., a Florida limited
partnership, TOWER ADVERTISING GROUP, INC., a Florida
corporation, ALAMO RENT-A-CAR (BELGIUM), INC., a Florida
corporation, ALAMO RENT-A-CAR (CANADA), INC., a Florida
corporation, GREEN CORN, INC., a Florida corporation, and
TERRITORY BLUE, INC., a Florida corporation, jointly and
severally promise to pay to Cede & Co., or registered assigns,
the principal sum of 100,000,000 Dollars on January 31, 2006.
Interest Payment Dates: January 31 and July 31.
Record Dates: January 15 and July 15.
Additional provisions of this Security are set forth on
the other side of this Security.
ALAMO RENT-A-CAR, INC.
TERRITORY BLUE, INC.
GUY SALMON USA, INC.
GUY SALMON USA, LTD., by its
general partner Guy Salmon USA,
Inc.,
by
_________________________
D. Keith Cobb
Chief Executive Officer of
Alamo Rent-A-Car, Inc.
Chief Executive Officer of
Territory Blue, Inc.
President of Guy Salmon
USA, Inc.
President of Guy Salmon
USA, Inc., as general
partner of Guy Salmon
USA, Ltd.
<PAGE>
DKBERT ASSOC.
GREEN CORN, INC.,
by
_________________________
Michael S. Egan
A General Partner of DKBERT
Assoc.
President of Green Corn,
Inc.
ALAMO RENT-A-CAR (BELGIUM), INC.
ALAMO RENT-A-CAR (CANADA), INC.
TOWER ADVERTISING GROUP, INC.,
by
_________________________
N. Maria Menendez
Treasurer of Alamo Rent-A-
Car (Belgium), Inc.
Treasurer of Alamo Rent-A-
Car (Canada), Inc.
Treasurer of Tower
Advertising Group, Inc.
<PAGE>
Dated: February 16, 1996
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the within-mentioned
Indenture.
by
_________________________
Authorized Signatory
<PAGE>
REVERSE OF SECURITY
11 3/4% Senior Note Due 2006
1. Interest
ALAMO RENT-A-CAR, INC., a Florida corporation, DKBERT
ASSOC., a Florida general partnership, GUY SALMON USA, INC., a
Florida corporation, GUY SALMON USA, LTD., a Florida limited
partnership, TOWER ADVERTISING GROUP, INC., a Florida
corporation, ALAMO RENT-A-CAR (BELGIUM), INC., a Florida
corporation, ALAMO RENT-A-CAR (CANADA), INC., a Florida
corporation, GREEN CORN, INC., a Florida corporation, and
TERRITORY BLUE, INC., a Florida corporation (each such entity,
and its successors and assigns under the Indenture hereinafter
referred to, and each other entity which is required to become an
Issuer pursuant to the Indenture, and its successors and assigns
under the Indenture, being herein called an "Issuer" and,
together with each other Issuer thereunder, the "Issuers"),
promises to pay interest on the principal amount of this Security
at the rate per annum shown above. The Issuers will pay interest
semiannually on January 31 and July 31 of each year commencing
July 31, 1996. Interest on the Securities will accrue from the
most recent date to which interest has been paid or, if no
interest has been paid, from February 16, 1996. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Issuers shall pay interest on overdue principal at the rate
borne by the Securities plus 1% per annum, and it shall pay
interest on overdue installments of interest at the same rate to
the extent lawful.
2. Method of Payment
The Issuers will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of
Securities at the close of business on the January 15 or July 15
next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Issuers will pay
principal and interest in money of the United States that at the
time of payment is legal tender for payment of public and private
<PAGE>
debts. However, the Issuers may pay principal and interest by
check payable in such money and may mail an interest check to a
Holder's registered address. All payments of principal of,
premium, if any, and interest on the Securities will be made by
the Issuers in immediately available funds.
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking
corporation ("Trustee"), will act as Paying Agent and Registrar.
The Issuers may appoint and change any Paying Agent, Registrar or
co-registrar without notice. An Issuer or any of its
domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. Indenture
The Issuers issued the Securities under an Indenture
dated as of February 16, 1996 (the "Indenture"), among the
Issuers and the Trustee. The terms of the Securities include
those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. 77aaa-77bbbb) as in effect on the date of the Indenture
(the "Act"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are
referred to the Indenture and the Act for a statement of those
terms.
The Securities are general unsecured obligations of the
Issuers limited to $100,000,000 aggregate principal amount
(subject to Section 2.07 of the Indenture). The Indenture
imposes certain limitations on the Incurrence of Indebtedness
(including Permitted Vehicle Indebtedness) by the Issuers and
certain of their Subsidiaries, the existence of liens, the
payment of dividends on, and redemption of, the Capital Stock of
the Issuers and their Subsidiaries and the redemption of certain
subordinated obligations of the Issuers and their Subsidiaries,
restricted payments, the sale or transfer of assets and
Subsidiary stock, the issuance or sale of Capital Stock of
Restricted Subsidiaries, sale and leaseback transactions, the
investments of the Issuers and certain of their Subsidiaries,
consolidations, mergers and transfers of all
<PAGE>
or substantially all the Issuers' assets of certain Issuers, and
transactions with Affiliates. In addition, the Indenture limits
the ability of the Issuers and certain of their Subsidiaries to
restrict distributions and dividends from Subsidiaries.
5. Optional Redemption
Except as set forth in the next paragraph, the
Securities may not be redeemed prior to January 31, 2001. On and
after that date, the Issuers may redeem the Securities in whole
at any time or in part from time to time at the following
redemption prices (expressed in percentages of principal amount),
plus accrued interest to the redemption date (subject to the
right of Holders of record on the relevant record date to receive
interest due on the related interest payment date):
if redeemed during the 12-month period beginning
January 31,
<TABLE>
<CAPTION>
Period Percentage
<S> <C>
2001 105.875%
2002 103.917%
2003 101.958%
2004 and thereafter 100.000%
</TABLE>
In addition, at any time and from time to time prior to
January 31, 1999, the Issuers may redeem in the aggregate up to
$25 million principal amount of the Securities with (i) the
proceeds of one or more Public Equity Offerings following which
there is a Public Market or (ii) the proceeds from the sale of
Equity Interests of an Issuer to a Strategic Investor at the time
of such sale, in each case after subtracting any Tax Distribution
Proceeds and at a redemption price (expressed as a percentage of
principal amount thereof) of 110% plus accrued interest, if any,
to the redemption date (subject to the right of Holders of record
on the relevant record date to receive interest due on the
relevant interest payment date); provided, however, that at least
$75 million principal amount of the Securities must remain
outstanding after each such redemption.
<PAGE>
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his registered address.
Securities in denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000. If money sufficient
to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption
date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on
and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption. If a notice or
communication is sent in the manner provided in the Indenture, it
is duly given, whether or not the addressee receives it. Failure
to send a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to
other Securityholders.
In addition, in the event of certain Asset
Dispositions, the Issuers will be required to make an offer to
purchase Securities at a purchase price of 100% of their
principal amount plus accrued interest to the date of purchase in
accordance with the procedures set forth in the Indenture.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will
have the right to require the Issuers to repurchase all or any
part of the Securities of such Holder at a repurchase price in
cash equal to 101% of the principal amount of the Securities to
be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record
date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.
8. Denominations; Transfer; Exchange
The Securities are in registered form without coupons
in denominations of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorse-
<PAGE>
ments or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture, including any
transfer tax or other similar governmental charge payable in
connection therewith. The Registrar need not register the
transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or any Securities for
a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
9. Persons Deemed Owners
The registered Holder of this Security may be treated
as the owner of it for all purposes.
10. Unclaimed Money
If money for the payment of principal or interest
remains unclaimed for two years, the Trustee or Paying Agent
shall pay the money back to the Issuers at their written request
unless an abandoned property law designates another Person.
After any such payment, Holders entitled to the money must look
only to the Issuers and not to the Trustee for payment.
11. Discharge and Defeasance
Subject to certain conditions, the Issuers at any time
may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money
or U.S. Government Obligations for the payment of principal and
interest on the Securities to redemption or maturity, as the case
may be.
12. Amendment, Waiver
Subject to certain exceptions set forth in the
Indenture, (i) the Indenture or the Securities may be amended
with the written consent of the Holders of at least a majority in
principal amount outstanding of the Securities and (ii) any
default or noncompliance with any provision may be waived with
the written consent of the Holders of a majority in principal
amount outstanding of the Securities.
<PAGE>
Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Issuers and the Trustee
may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of
the Indenture, or to provide for uncertificated Securities in
addition to or in place of certificated Securities, or to add an
Issuer or a Co-Issuer, or to add guarantees with respect to the
Securities or to secure the Securities, or to release Alamo
Belgium as an Issuer, or to add additional covenants or surrender
rights and powers conferred on the Issuers, or to comply with any
request of the SEC in connection with qualifying the Indenture
under the Act, or to release an Insignificant Issuer in
accordance with the terms of the Indenture, or to make any change
that does not adversely affect the rights of any Securityholder.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i)
default for 30 days in payment of interest on the Securities;
(ii) default in payment of principal on the Securities at
maturity, upon redemption pursuant to paragraph 5 or 6 of the
Securities, upon acceleration or otherwise, or failure by the
Issuers to redeem or purchase Securities when required; (iii)
failure by any Issuer to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice
and lapse of time; (iv) certain accelerations (including failure
to pay within any grace period after final maturity) of other
Indebtedness of any Issuer if the amount accelerated (or so
unpaid) exceeds $10 Million; (v) certain events of bankruptcy or
insolvency with respect to the Issuers and their Significant
Subsidiaries; and (vi) certain judgments or decrees for the
payment of money in respect of which the portion not covered by
insurance is in excess of $10 million. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least
25% in principal amount of the Securities may declare all the
Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result
in the Securities being due and payable immediately upon the
occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may
refuse to enforce the Indenture or the Securities unless it
receives reasonable indemnity or security.
<PAGE>
Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from
Securityholders notice of any continuing Default (except a
Default in payment of principal or interest) if it determines
that withholding notice is in the interest of the Holders.
14. Trustee Dealings with the Issuers
Subject to certain limitations imposed by the Act, the
Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may
otherwise deal with and collect obligations owed to it by an
Issuer or any of its Affiliates and may otherwise deal with an
Issuer or any of its Affiliates with the same rights it would
have if it were not Trustee.
15. NO RECOURSE AGAINST OTHERS
THE SECURITIES SHALL BE NON-RECOURSE TO THE GENERAL AND
LIMITED PARTNERS AND TO THE COMMITTEE OR COMMITTEE MEMBERS OF THE
ISSUERS THAT ARE PARTNERSHIPS (AND, IN THE CASE OF ANY SUCH
GENERAL OR LIMITED PARTNER THAT IS A CORPORATION, TO THE
SHAREHOLDERS, OFFICERS AND DIRECTORS OF SUCH CORPORATION), TO THE
SHAREHOLDERS, OFFICERS AND DIRECTORS OF THE ISSUERS THAT ARE
CORPORATIONS AND TO ALL OTHER PERSONS AND ENTITIES OTHER THAN THE
ISSUERS. UPON AN EVENT OF DEFAULT, HOLDERS OF THE SECURITIES
SHALL HAVE RECOURSE ONLY TO THE ASSETS OF THE ISSUERS.
16. Joint and Several Liability
All the obligations of the Issuers under the Indenture
and the Securities will be joint and several. The obligation of
each Issuer in respect of the Securities and the Indenture will
be limited to an amount not to exceed the maximum amount that can
be assumed by such Issuer without rendering such obligation
voidable under applicable law relating to fraudulent conveyance
or fraudulent transfer, state insolvency laws or similar laws
affecting the rights of creditors generally.
<PAGE>
17. Governing Law
The Indenture and the Securities shall be governed by,
and construed in accordance with, the laws of the State of New
York but without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws
of another jurisdiction would be required thereby.
18. Authentication
This Security shall not be valid until an authorized
signatory of the Trustee (or an authenticating agent) manually
signs the certificate of authentication on the other side of this
Security.
19. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in
common), TEN ENT (=tenants by the entireties), JT TEN (=joint
tenants with rights of survivorship and not as tenants in
common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures the
Issuers have caused CUSIP numbers to be printed on the Securities
and have directed the Trustee to use CUSIP numbers in notices of
redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either
as printed on the Securities or as contained in any notice of
redemption and reliance may be placed only on the other
identification numbers placed thereon.
THE ISSUERS WILL FURNISH TO ANY SECURITYHOLDER UPON
WRITTEN REQUEST AND WITHOUT CHARGE TO THE
<PAGE>
SECURITYHOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE TEXT
OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
ALAMO RENT-A-CAR, INC.
110 S.E. 6TH STREET
FORT LAUDERDALE, FLORIDA 33301
ATTENTION: CHIEF EXECUTIVE OFFICER
____________________________________________________________
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to
transfer this Security on the books of the Issuers. The agent
may substitute another to act for him.
____________________________________________________________
Date: ________________ Your Signature: _____________________
Signature Guarantee: ___________________________________________
(Signature must be guaranteed)
____________________________________________________________
Sign exactly as your name appears on the other side of this
Security.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security
purchased by the Issuers pursuant to Section 4.06 or 4.08 of the
Indenture, check the box:
---
/ /
---
If you want to elect to have only part of
this Security purchased by the Issuers pursuant to Section 4.06
or 4.08 of the Indenture, state the amount:
$
Date: __________________ Your Signature: __________________
(Sign exactly as your name appears on
the other side of the Security)
Signature Guarantee:_______________________________________
(Signature must be guaranteed)
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 19,470
<SECURITIES> 63,852
<RECEIVABLES> 152,008
<ALLOWANCES> (5,550)
<INVENTORY> [BLANK]
<CURRENT-ASSETS> [BLANK]
<PP&E> 2,398,076
<DEPRECIATION> 320,420
<TOTAL-ASSETS> 2,373,512
<CURRENT-LIABILITIES> [BLANK]
<BONDS> 1,818,453
[BLANK]
[BLANK]
<COMMON> 5
<OTHER-SE> 50,755
<TOTAL-LIABILITY-AND-EQUITY> 2,373,512
<SALES> [BLANK]
<TOTAL-REVENUES> 326,112
<CGS> [BLANK]
<TOTAL-COSTS> 93,742
<OTHER-EXPENSES> 213,727
<LOSS-PROVISION> 617
<INTEREST-EXPENSE> 30,972
<INCOME-PRETAX> (12,209)
<INCOME-TAX> 120
<INCOME-CONTINUING> (12,329)
<DISCONTINUED> [BLANK]
<EXTRAORDINARY> [BLANK]
<CHANGES> [BLANK]
<NET-INCOME> (12,329)
<EPS-PRIMARY> [BLANK]
<EPS-DILUTED> [BLANK]
</TABLE>
