<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 26, 1997
REGISTRATION NO. 333-39661
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 7514 73-1356520
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
5330 EAST 31ST STREET
TULSA, OKLAHOMA 74135
(918) 660-7700
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
STEVEN B. HILDEBRAND
VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
5330 EAST 31ST STREET
TULSA, OKLAHOMA 74135
(918) 660-7700
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
WITH COPIES TO:
<TABLE>
<S> <C> <C>
PAUL H. WILSON, JR., ESQ. STEPHEN W. RAY, ESQ. STEPHEN H. SHALEN, ESQ.
DEBEVOISE & PLIMPTON HALL, ESTILL, HARDWICK, GABLE, CLEARY, GOTTLIEB, STEEN &
875 THIRD AVENUE GOLDEN & NELSON HAMILTON
NEW YORK, NEW YORK 10022 320 SOUTH BOSTON AVENUE ONE LIBERTY PLAZA
(212) 909-6000 SUITE 400 NEW YORK, NEW YORK 10006
TULSA, OKLAHOMA 74103 (212) 225-2000
(918) 594-0400
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE(2) FEE(3)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Common Stock ($.01 par value)..... 25,875,000 $22.00 $569,250,000 $172,500
==========================================================================================================
</TABLE>
(1) Includes up to 3,375,000 shares the U.S. Underwriters and Managers may
purchase to cover over-allotments, if any. Also includes 3,881,250 shares
(including shares that may be sold pursuant to the Managers' over-allotment
option) that are to be offered outside the United States and Canada but that
may be sold or resold from time to time in the United States under
circumstances requiring delivery of a prospectus.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(a).
(3) A registration fee of $151,515 has previously been paid.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectus: one to be
used in connection with an underwritten offering in the United States and Canada
(the "U.S. Prospectus") and one to be used in a concurrent international
offering (the "International Prospectus") of the common stock, par value $.01
per share, of Dollar Thrifty Automotive Group, Inc. The U.S. Prospectus for the
offering in the United States and Canada follows immediately after this
Explanatory Note. After the U.S. Prospectus are the alternate pages for the
International Prospectus: a front cover page and a "Subscription and Sale"
section. A copy of the complete U.S. Prospectus and International Prospectus in
the exact forms in which they are to be used after effectiveness will be filed
with the Securities and Exchange Commission pursuant to Rule 424(b).
<PAGE> 3
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
AMENDED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE RELATED REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION OR ANY
APPLICABLE STATE SECURITIES COMMISSION BECOMES EFFECTIVE. THIS PROSPECTUS
IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 26, 1997
22,500,000 Shares
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LOGO
Common Stock
------------------
This is an initial public offering of shares of common stock of Dollar
Thrifty Automotive Group, Inc. Chrysler Corporation, which currently owns all of
the common stock, is offering 20,000,000 shares and the Company is offering
2,500,000 shares. After completion of the Offering, Chrysler will no longer own
any common stock. The Company will not receive any proceeds from the sale of
shares by Chrysler. There is currently no public market for the shares. The
Company expects that the public offering price will be between $19 and $22 per
share. The market price of the shares after the Offering may be higher or lower
than the public offering price.
The common stock has been approved for listing on the New York Stock
Exchange under the symbol DTG.
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 13.
<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- ----------
<S> <C> <C>
Public Offering Price.............................................. $ $
Underwriting Discounts and Commissions............................. $ $
Proceeds to Chrysler............................................... $ $
Proceeds to the Company............................................ $ $
</TABLE>
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The U.S. Underwriters are offering the shares subject to various conditions
and may reject all or part of any order.
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
SALOMON BROTHERS INC
Prospectus dated , 1997
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................................................................... 4
Risk Factors.......................................................................... 13
Use of Proceeds....................................................................... 19
Dividend Policy....................................................................... 19
Dilution.............................................................................. 19
Capitalization........................................................................ 20
Unaudited Pro Forma Consolidated Financial Statements................................. 21
Selected Consolidated Financial and Operating Data.................................... 27
Management's Discussion and Analysis of Financial Condition and Results of
Operations.......................................................................... 33
Industry Overview..................................................................... 43
Business.............................................................................. 44
Continuing Relationship with Chrysler................................................. 62
Management............................................................................ 64
Description of Capital Stock.......................................................... 68
Description of Certain Indebtedness................................................... 71
Certain U.S. Tax Consequences to Non-U.S. Holders of Common Stock..................... 73
Underwriting.......................................................................... 76
Notice to Canadian Residents.......................................................... 79
Legal Matters......................................................................... 80
Experts............................................................................... 80
Additional Information................................................................ 80
Index to Consolidated Financial Statements............................................ F-1
</TABLE>
---------------------------
The Company's principal executive offices are located at 5330 East 31st
Street, Tulsa, Oklahoma 74135, (918) 660-7700.
---------------------------
As used in this Prospectus, (a) the "Company" means Dollar Thrifty
Automotive Group, Inc. (successor to Pentastar Transportation Group, Inc.), (b)
"Dollar Thrifty Group" and "Group" mean Dollar Thrifty Automotive Group, Inc.
and its consolidated subsidiaries, (c) "Dollar" means Dollar Rent A Car Systems,
Inc. and (d) "Thrifty" means Thrifty Rent-A-Car System, Inc.
"Blue Chip", "Dollar", the Dollar logo, "DriveWise", "Thrifty" and the
Thrifty logo are existing or pending trademarks or servicemarks of Dollar
Thrifty Group.
---------------------------
Some of the statements contained in this Prospectus under "Prospectus
Summary," "Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business" are forward-looking. They
include statements concerning (a) strategy, (b) liquidity and capital
expenditures, (c) the terms upon which vehicles will be acquired, (d) debt
levels and the ability to obtain financing and service debt, (e) competitive
pressures in the vehicle rental business, (f) prevailing levels of interest
rates, (g) legal proceedings and regulatory matters and (h) general economic
conditions. Actual results may differ materially from those suggested by the
forward-looking statements for various reasons, including those discussed under
"Risk Factors."
---------------------------
Shares should be ready for delivery on or about , 1997,
against payment in immediately available funds.
3
<PAGE> 5
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this Prospectus.
It is not complete and may not contain all of the information that you should
consider before investing in the common stock. You should read the entire
Prospectus carefully, including the "Risk Factors" section and the financial
statements and the notes to those statements.
THE COMPANY
Dollar Thrifty Group's two vehicle rental companies, Dollar and Thrifty,
operate separate daily vehicle rental businesses. They also license independent
franchisees to rent vehicles under their brands. As of September 30, 1997, the
Dollar and Thrifty systems had 872 locations in the United States and Canada, of
which 161 were company-owned stores and 711 were operated by franchisees. Dollar
and Thrifty also have franchisees outside the United States and Canada. Revenues
from franchisees outside the United States and Canada have not been material to
the Group's results of operations.
The Group offers value-priced rental vehicles under the Dollar and Thrifty
brands. The Group's brands appeal to leisure customers, including tourists, and
to small businesses and independent business travelers. While the two companies
have similar customers, they have different approaches to the vehicle rental
market. In the United States, Dollar derives a majority of its revenues from
company-owned stores located at major airports, and it derives substantial
revenues from foreign tour and leisure rentals. Thrifty derives its revenues
primarily from franchising fees and services, including vehicle leasing.
Thrifty's franchisees operate in both the local and airport markets.
STRATEGY
The Company's main objectives are to increase revenues and improve
profitability by strengthening its value-priced brands. The key elements of this
strategy are:
CAPITALIZE ON CHANGING INDUSTRY DYNAMICS
As a result of recent ownership changes in the domestic vehicle rental
industry, many of the major companies in the industry are now publicly held
and only Dollar and Thrifty remain wholly owned by a domestic automotive
manufacturer. These ownership changes may lead to higher average rental
rates as a result of increased industry focus on profitability and
shareholder returns, rather than on transaction volume and market share.
The Group would benefit from higher rental rates, particularly in markets
where it has a strong position.
BUILD ON THE COMPANY'S NICHES IN THE VEHICLE RENTAL MARKET
Value-Priced Brands
The Dollar and Thrifty brands are identified with the Group's strategy
of offering value-priced rental vehicles that are comparable to those
offered by the Group's principal competitors. Dollar and Thrifty service a
wide variety of leisure and discretionary customers from airport, near
airport and local market locations.
4
<PAGE> 6
Dollar's Leisure Market Position
Dollar intends to build on its strong position in the leisure rental
market. The Company plans to expand Dollar's international tour business
because the Company believes that the trend over the past five years of
increasing numbers of foreign tourists visiting the United States will
continue.
Thrifty's Local Market Position
Thrifty plans to increase its local presence through growth in the
operations of existing franchisees and addition of new franchisees. The
local market has grown faster than the airport market and generally has had
less pricing pressure. Management believes that the local market, where
competition is based on location, service and customer relationships, is
well-suited to Thrifty's franchise strategy, which emphasizes local
ownership and operation.
CAPITALIZE ON OPPORTUNITIES FOR OPERATING EFFICIENCIES
Dollar and Thrifty operate as separate companies and serve the vehicle
rental market in different ways. The Company believes that as an
independent company it can improve efficiency and reduce costs by taking
advantage of its joint ownership of Dollar and Thrifty.
INVEST IN STRATEGIC INFORMATION AND RESERVATION SYSTEMS
Since the beginning of 1995, the Group has made capital investments and
other expenditures totalling $22.8 million for reservation, tour and other
information systems. It plans to make capital expenditures of approximately
$10 million in these systems during 1998. Dollar plans to invest in systems
to improve operational control, fleet utilization, rental rates and
customer service. Thrifty plans to invest in systems to support its
franchisees' operations by offering uniform automated systems and customer
service programs.
EXPAND INTERNATIONAL OPERATIONS
Dollar plans to pursue commercial arrangements with one or more foreign
independent vehicle rental companies to expand use of its brands abroad and
to promote additional rentals from in-bound travelers. In addition, Dollar
and Thrifty may license foreign vehicle rental companies as master
franchisees for specific countries or regions. Thrifty may also offer
vehicle leasing and other services to its international franchisees.
DEVELOP OPPORTUNITIES FOR BUSINESS EXPANSION INTO RELATED AREAS
The Company believes that its experience in fleet leasing and
management, used car disposal and franchising provides it with
opportunities for expansion. These opportunities include leasing vehicles
to small companies and individuals, entering into joint ventures or other
arrangements with publicly held new car dealer groups, used car superstores
and auto auctions and using Dollar Thrifty Group's existing
telecommunications capacity to provide telemarketing services. Management
believes the Company will be better able to pursue these opportunities when
it is an independent company.
5
<PAGE> 7
FINANCING PLAN
The Company is implementing a financing plan, which includes the sale of
shares by the Company in the Offering. The Financing Plan has the following
elements:
NEW FLEET FINANCING
- A $900 million series of medium term notes, secured by vehicles and
related assets. The New Medium Term Notes, which will be issued under
the Group's existing asset backed note program, will replace the
Company's existing vehicle financing arrangements with Chrysler
Financial Corporation and finance fleet growth.
- A commercial paper program of up to $615 million, secured by vehicles
and related assets. The Commercial Paper Program, which will be part
of the Group's existing asset backed note program, will be used to
finance fleet growth and to refinance existing fleet debt. A $545
million Liquidity Facility will support the Commercial Paper Program.
- Credit support from Chrysler, in the form of a letter of credit
facility which declines over a period not exceeding five years.
Chrysler will provide the letter of credit facility under the Chrysler
Credit Support Agreement. The letter of credit facility will provide
additional security for the New Medium Term Notes and the Commercial
Paper Program.
SALE OF SHARES BY THE COMPANY
- The Company's sale of 2,500,000 shares covered by this Prospectus and
the use of the proceeds to provide collateral for fleet financing. If
the U.S. Underwriters and the Managers of the international portion of
the Offering exercise their option to purchase additional shares from
the Company in connection with the Offering to cover over-allotments,
the Company would use the additional net proceeds for general
corporate purposes. Those purposes include providing collateral for
the Group's vehicle fleet financings that could reduce or possibly
eliminate Chrysler's credit support.
REVOLVING CREDIT FACILITY
- A $215 million senior secured revolving credit facility. Up to $190
million under the Revolving Credit Facility may be used to issue
letters of credit to support fleet debt and other obligations. Up to
$70 million will be available for working capital borrowings and to
replace existing working capital debt ($22.3 million as of September
30, 1997). The Group may not have more than $215 million of combined
borrowings and letters of credit outstanding under the Revolving
Credit Facility.
The Company expects that the New Medium Term Notes will be issued and the
Revolving Credit Facility and the Chrysler Credit Support Agreement will be in
effect when the Offering is completed. The Company expects that the Commercial
Paper Program and the Liquidity Facility will be in place in the first quarter
of 1998. The Company has obtained from Credit Suisse First Boston (and its
affiliates) and The Chase Manhattan Bank underwritten financing commitments,
subject to customary conditions, relating to the Revolving Credit Facility and
the Liquidity Facility.
The completion of the Offering is contingent upon the issuance of the New
Medium Term Notes and the implementation of the Chrysler Credit Support
Agreement and the Revolving Credit Facility.
6
<PAGE> 8
THE OFFERING
COMMON STOCK OFFERED(A):
<TABLE>
<S> <C>
OFFERED BY CHRYSLER...................................................... 20,000,000 shares
OFFERED BY THE COMPANY................................................... 2,500,000 shares
------------------
TOTAL............................................................... 22,500,000 shares
U.S. OFFERING............................................................ 19,125,000 shares
INTERNATIONAL OFFERING................................................... 3,375,000 shares
------------------
TOTAL............................................................... 22,500,000 shares
SHARES TO BE OUTSTANDING AFTER THE OFFERING(a)(b).......................... 22,500,000 shares
</TABLE>
- -------------------------
(a) Assumes the over-allotment option is not exercised.
(b) Excludes 2,250,000 shares (plus up to an additional 337,500 shares if the
over-allotment option is exercised) reserved for issuance under the
Company's long-term incentive plan. See "Management -- Executive
Compensation -- Long-Term Incentive Plan."
VOTING RIGHTS................. Holders of common stock will have one vote per
share.
DIVIDEND POLICY............... The Company does not plan to pay cash dividends
in the near term. Moreover, its debt instruments
restrict the payment of cash dividends.
USE OF PROCEEDS............... - The Company estimates that it will receive
net proceeds from the Offering of
approximately $45.9 million. It expects to
use the net proceeds to provide collateral
for fleet financing as part of the Financing
Plan.
- The Company estimates that it will receive
additional net proceeds of up to $65.4
million if the U.S. Underwriters and the
Managers exercise their over-allotment
option. The Company would use the additional
proceeds for general corporate purposes.
Those purposes include providing collateral
for the Group's vehicle fleet financings that
could reduce or possibly eliminate Chrysler's
credit support.
- The Company will not receive any of the
proceeds from Chrysler's sale of shares in
the Offering.
RISK FACTORS.................. For a discussion of certain risks you should
consider before investing in the common stock,
see "Risk Factors."
NEW YORK STOCK EXCHANGE
SYMBOL........................ DTG
7
<PAGE> 9
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
DOLLAR THRIFTY GROUP DATA
The following summary consolidated Dollar Thrifty Group financial and
operating data as of and for the years ended December 31, 1996, 1995 and 1994
are derived from the Group's audited consolidated financial statements and the
related notes thereto included in this Prospectus. The following summary
consolidated Group financial and operating data as of and for the nine months
ended September 30, 1997 and 1996 are unaudited. In the opinion of management,
the unaudited data have been prepared on the same basis as the audited
consolidated financial statements and include all adjustments, consisting only
of normal recurring adjustments, necessary for fair presentation. Results for
interim periods are not indicative of results for a full year.
SEPARATE DOLLAR AND THRIFTY DATA
The following summary consolidated Dollar and Thrifty financial and
operating data are derived from their separate respective unaudited consolidated
financial information. In the opinion of management, this information has been
prepared on the same basis as the Group's audited consolidated financial
statements and includes all adjustments necessary for fair presentation. Results
for interim periods are not indicative of results for a full year.
EBITDA AND ADJUSTED EBITDA
EBITDA consists of earnings (loss) before income taxes plus all net
interest expense and all depreciation and amortization expense. Adjusted EBITDA
consists of earnings (loss) before income taxes plus net interest expense that
does not relate to vehicles and depreciation and amortization expense that does
not relate to vehicles. The Company does not include EBITDA and Adjusted EBITDA
as, nor should they be considered as, alternative measures of operating results
or cash flows from operating activities (as determined in accordance with
generally accepted accounting principles). Instead, the Company includes them
because they are widely used financial measures of the potential capacity of a
company to incur and service debt. The presentation of EBITDA and Adjusted
EBITDA may not be comparable to similarly titled measures used by other
companies.
8
<PAGE> 10
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA OF DOLLAR THRIFTY GROUP
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------- -------------------------
1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS (IN THOUSANDS):
Revenues:
Vehicle rentals.......................... $ 413,424 $ 372,508 $ 495,598 $ 382,234 $ 481,954
Vehicle leasing.......................... 172,999 177,836 150,179 116,392 124,783
Fees and services........................ 58,966 49,382 50,475 39,969 39,018
Other.................................... 8,614 9,653 9,342 7,630 7,127
---------- ---------- ---------- ---------- ----------
Total revenues....................... 654,003 609,379 705,594 546,225 652,882
Costs and expenses:
Direct vehicle and operating............. 234,370 190,577 245,895 187,462 219,058
Vehicle depreciation, net................ 210,975 196,367 213,143 161,440 207,452
Selling, general and administrative...... 143,155 123,439 138,363 103,161 111,554
Interest expense, net.................... 83,526 78,817 72,868 55,190 65,756
Amortization of cost in excess of net
assets acquired........................ 11,517 10,456 8,169 6,742 4,504
Restructuring charge reversal --
Snappy................................. (7,000) -- -- -- --
Loss on sale of Snappy................... 40,893 -- -- -- --
Intangible asset impairment losses....... -- -- 157,758 155,000 --
---------- ---------- ---------- ---------- ----------
Total costs and expenses............. 717,436 599,656 836,196 668,995 608,324
---------- ---------- ---------- ---------- ----------
Earnings (loss) before income taxes........ (63,433) 9,723 (130,602) (122,770) 44,558
Income tax expense (benefit)............... (12,755) 9,753 16,682 18,589 20,338
---------- ---------- ---------- ---------- ----------
Net earnings (loss)(a)..................... $ (50,678) $ (30) $ (147,284) $ (141,359) $ 24,220
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF SEPTEMBER 30,
-------------------------------------- -------------------------
1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (IN THOUSANDS):
Revenue-earning vehicles, net.............. $ 991,276 $ 958,799 $1,120,346 $1,225,478 $1,500,864
Total assets............................... 1,585,651 1,657,823 1,647,951 1,684,341 1,978,980
Total debt................................. 1,047,065 1,128,811 1,241,558 1,291,914 1,542,742
Stockholder's equity....................... 331,159 331,189 183,883 189,702 207,986
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------- -------------------------
1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
OPERATING DATA (IN THOUSANDS):
EBITDA(a).................................. $ 253,184 $ 304,399 $ 174,697 $ 108,442 $ 330,555
Adjusted EBITDA(a)......................... (37,836) 27,211 (110,074) (106,953) 57,966
Net cash provided by operating
activities............................... 291,651 173,163 301,911 231,577 229,878
COMPANY-OWNED STORES DATA (U.S. AND
CANADA)(b):
Average number of vehicles operated........ 40,083 36,246 45,037 45,695 55,103
Number of rental transactions.............. 2,230,076 2,196,611 2,817,269 2,137,301 2,554,969
Average revenue per transaction............ $ 161 $ 170 $ 176 $ 179 $ 189
Monthly average revenue per vehicle........ $ 748 $ 856 $ 917 $ 929 $ 972
VEHICLE LEASING DATA (U.S. AND CANADA)(b):
Average number of vehicles leased.......... 41,072 34,373 30,583 31,434 33,158
Average monthly lease revenue per unit..... $ 349 $ 400 $ 409 $ 411 $ 418
</TABLE>
- -------------------------
(a) Management believes it is important to note that net earnings, EBITDA and
Adjusted EBITDA for the year ended December 31, 1996 and the nine months
ended September 30, 1996 include intangible asset impairment losses of
$157,758,000 and $155,000,000, respectively, related to Chrysler's decision
in 1996 to dispose of Thrifty as a non-core asset ($155,000,000) and an
impairment loss related to Thrifty Canada Ltd. ($2,758,000).
(b) Excludes 1994 data for Snappy Car Rental, Inc., which was sold in September
1994.
9
<PAGE> 11
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA OF DOLLAR
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------ -----------------------
1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS (IN THOUSANDS):
Revenues:
Vehicle rentals.......................... $ 299,563 $ 311,267 $ 435,074 $ 334,393 $ 431,645
Vehicle leasing.......................... 57,018 47,321 38,195 29,728 26,465
Fees and services........................ 27,709 20,068 22,718 18,374 17,798
Other.................................... 2,949 3,278 3,183 2,794 1,649
---------- ---------- ---------- ---------- ----------
Total revenues....................... 387,239 381,934 499,170 385,289 477,557
Costs and expenses:
Direct vehicle and operating............. 180,415 157,519 212,658 160,236 190,732
Vehicle depreciation, net................ 111,508 103,384 130,516 97,376 126,727
Selling, general and administrative...... 81,236 70,099 87,739 66,739 75,364
Interest expense, net.................... 49,413 42,860 45,129 33,702 42,395
Amortization of cost in excess of net
assets acquired........................ 4,800 4,556 4,696 3,531 3,723
---------- ---------- ---------- ---------- ----------
Total costs and expenses............. 427,372 378,418 480,738 361,584 438,941
---------- ---------- ---------- ---------- ----------
Earnings (loss) before income taxes........ (40,133) 3,516 18,432 23,705 38,616
Income tax expense (benefit)............... (13,295) 3,399 9,108 11,828 17,369
---------- ---------- ---------- ---------- ----------
Net earnings (loss)........................ $ (26,838) $ 117 $ 9,324 $ 11,877 $ 21,247
========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF SEPTEMBER 30,
------------------------------------ -----------------------
1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (IN THOUSANDS):
Revenue-earning vehicles, net.............. $ 513,164 $ 571,610 $ 690,069 $ 739,086 $ 934,186
Total assets............................... 775,666 836,135 989,669 988,491 1,241,697
Total debt................................. 562,673 621,782 713,715 758,911 954,488
Stockholder's equity....................... 70,542 70,659 102,383 82,535 123,630
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------ -----------------------
1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
OPERATING DATA (IN THOUSANDS):
EBITDA..................................... $ 131,901 $ 159,981 $ 205,079 $ 162,869 $ 216,548
Adjusted EBITDA............................ (22,042) 16,047 30,117 32,392 47,688
Net cash provided by operating
activities............................... 161,998 112,718 196,491 131,327 137,901
COMPANY-OWNED STORES DATA (U.S.):
Average number of vehicles operated........ 33,366 29,855 38,952 39,352 48,682
Number of rental transactions.............. 1,801,583 1,777,630 2,409,821 1,821,238 2,229,328
Average revenue per transaction............ $ 166 $ 175 $ 181 $ 184 $ 194
Monthly average revenue per vehicle........ $ 748 $ 869 $ 931 $ 944 $ 985
VEHICLE LEASING DATA (U.S.):
Average number of vehicles leased.......... 14,130 10,823 7,801 8,140 6,774
Average monthly lease revenue per unit..... $ 336 $ 364 $ 408 $ 406 $ 434
</TABLE>
10
<PAGE> 12
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA OF THRIFTY
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------- ---------------------
1994 1995 1996 1996 1997
-------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS (IN THOUSANDS):
Revenues:
Vehicle rentals................................. $ 60,388 $ 61,241 $ 60,524 $ 47,841 $ 50,309
Vehicle leasing................................. 114,951 117,769 111,969 86,649 98,318
Fees and services............................... 29,548 28,950 27,730 21,569 21,215
Other........................................... 6,522 4,768 4,714 3,768 4,595
-------- -------- --------- --------- --------
Total revenues.............................. 211,409 212,728 204,937 159,827 174,437
Costs and expenses:
Direct vehicle and operating.................... 29,335 32,270 33,242 27,204 28,317
Vehicle depreciation, net....................... 87,739 85,287 82,592 64,064 80,724
Selling, general and administrative............. 51,530 52,102 50,260 37,245 37,917
Interest expense, net........................... 29,609 30,754 26,449 20,517 22,392
Amortization of cost in excess of net assets
acquired...................................... 5,900 5,900 3,473 3,211 781
Intangible asset impairment losses.............. -- -- 157,758 155,000 --
-------- -------- --------- --------- --------
Total costs and expenses.................... 204,113 206,313 353,774 307,241 170,131
-------- -------- --------- --------- --------
Earnings (loss) before income taxes............... 7,296 6,415 (148,837) (147,414) 4,306
Income tax expense................................ 6,102 6,387 7,338 6,401 3,058
-------- -------- --------- --------- --------
Net earnings (loss)(a)............................ $ 1,194 $ 28 $(156,175) $(153,815) $ 1,248
========= ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF SEPTEMBER 30,
--------------------------------- ---------------------
1994 1995 1996 1996 1997
-------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (IN THOUSANDS):
Revenue-earning vehicles, net..................... $425,345 $382,137 $ 430,277 $ 486,392 $566,678
Total assets...................................... 772,075 837,317 676,370 704,333 732,017
Total debt........................................ 447,273 520,142 527,843 548,513 587,711
Stockholder's equity.............................. 257,670 257,756 96,159 103,815 97,288
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------- ---------------------
1994 1995 1996 1996 1997
-------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
OPERATING DATA (IN THOUSANDS):
EBITDA(a)......................................... $133,431 $130,385 $ (33,491) $ (57,499) $110,323
Adjusted EBITDA(a)................................ 13,034 8,662 (143,252) (142,404) 6,595
Net cash provided by operating activities......... 113,518 62,053 108,052 90,057 81,647
COMPANY-OWNED STORES DATA (U.S. AND CANADA):
Average number of vehicles operated............... 6,717 6,391 6,085 6,343 6,421
Number of rental transactions..................... 428,493 418,981 407,448 316,063 325,641
Average revenue per transaction................... $ 141 $ 146 $ 149 $ 151 $ 155
Monthly average revenue per vehicle............... $ 749 $ 799 $ 829 $ 838 $ 871
VEHICLE LEASING DATA (U.S. AND CANADA):
Average number of vehicles leased................. 26,942 23,550 22,782 23,294 26,384
Average monthly lease revenue per unit............ $ 356 $ 417 $ 409 $ 413 $ 414
</TABLE>
- -------------------------
(a) Management believes it is important to note that net earnings, EBITDA and
Adjusted EBITDA for the year ended December 31, 1996 and the nine months
ended September 30, 1996 include intangible asset impairment losses of
$157,758,000 and $155,000,000, respectively, related to Chrysler's decision
in 1996 to dispose of Thrifty as a non-core asset ($155,000,000) and an
impairment loss related to Thrifty Canada Ltd. ($2,758,000).
11
<PAGE> 13
CONTINUING RELATIONSHIP WITH CHRYSLER
The Company is currently a wholly owned subsidiary of Chrysler. After the
Offering, Chrysler will own no shares in the Company. Chrysler will, however,
have certain continuing financial and commercial arrangements with Dollar
Thrifty Group.
VEHICLE SUPPLY
Chrysler will continue to provide vehicles to Dollar and Thrifty under
vehicle supply agreements extending through July 2001. The principal terms of
those agreements were established for the 1997 model year and will continue for
the duration of the agreements. The Dollar Thrifty Group was Chrysler's largest
customer for the 1997 model year. Under its residual value program, Chrysler
guarantees the aggregate resale value of specified vehicles purchased from it.
Chrysler has the sole discretion to set the specific terms and conditions
of its residual value program for a model year. It has agreed in the vehicle
supply agreements, however, to offer programs to Dollar and Thrifty that, taken
as a whole, are competitive with a residual value program Ford Motor Company or
General Motors Corporation is then making generally available to domestic
vehicle rental companies. Chrysler has also agreed to make various promotional
payments during the term of the vehicle supply agreements. Dollar and Thrifty
are required during this period to advertise Chrysler vehicles exclusively. See
"Business -- Fleet Acquisition and Management -- Vehicle Supply."
CREDIT SUPPORT
As part of the Financing Plan, Chrysler will provide credit support for the
Group's fleet financing in the form of a letter of credit facility. The credit
support will start at $50 million, but will be reduced to the extent the Company
receives more than $10 million in net proceeds from the exercise of the
over-allotment option. If those proceeds are $60 million or more, Chrysler's
credit support would be eliminated. The amount of any Chrysler credit support in
effect after the over-allotment option has been exercised or has expired
unexercised is referred to as the "Initial Support Amount."
The Initial Support Amount will decline annually, beginning September 30,
1999, by the greater of 20% of the Initial Support Amount and 50% of the Group's
excess cash flow. The Company may need to replace reductions in the Initial
Support Amount with cash from operations or with borrowings or letters of credit
under the Revolving Credit Facility. The Company has agreed to nominate a person
designated by Chrysler as a director of the Company so long as Chrysler is
providing any credit support to the Group. In addition, as part of the Financing
Plan, Chrysler Financial Corporation, Chrysler's finance subsidiary, will
receive repayment from the Group of vehicle debt in the amount of approximately
$812 million. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources -- Financing Plan."
INSURANCE AND OTHER MATTERS
Chrysler Insurance Corporation, a Chrysler subsidiary, provides automobile
liability insurance to the Group above self-insured retentions and quota share
retentions. Those retentions are secured by surety bonds that are guaranteed by
Chrysler. Chrysler Insurance Corporation also provides other surety bonds,
guaranteed by Chrysler, to secure various obligations of the Group, including
obligations under airport concession agreements. As part of the Financing Plan,
these surety bonds and Chrysler guarantees will be replaced by new bonds or
letters of credit issued by third parties unaffiliated with Chrysler. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources -- Financing Plan." Chrysler and
the Company are also entering into a tax sharing agreement relating to periods
during which members of the Group were subsidiaries of Chrysler. Various
intercompany accounts between Chrysler and the Group also will be settled upon
completion of the Offering. See "Unaudited Pro Forma Consolidated Financial
Statements."
For additional information about the Group's relationship with Chrysler,
see "Risk Factors -- Dependence on Chrysler" and "Continuing Relationship with
Chrysler."
12
<PAGE> 14
RISK FACTORS
You should carefully consider the following factors and other information
in this Prospectus before deciding to invest in the shares.
ECONOMIC CONDITIONS
Dollar Thrifty Group's results of operations are affected by general
economic conditions in the United States and Canada and by other factors that
may be beyond its control. These factors include financing costs, competitive
conditions in the vehicle rental industry and regulatory developments. A decline
in general economic activity has historically led to a decline in both business
and leisure travel and to lower demand for rental vehicles. Changes in the level
of discretionary travel particularly affect Dollar's results because a high
proportion of its customers are discretionary travelers, including leisure and
other travelers who pay their own expenses.
There have also been periods of significant overcapacity in the vehicle
rental industry, such as during the 1990 to 1992 recession, when vehicle rental
companies lowered their rental rates. When their principal competitors have
lowered their rental rates, Dollar, Thrifty and their respective franchisees
have followed. Future reductions in rental rates could adversely affect Dollar
Thrifty Group's results of operations.
A downturn in economic conditions also could reduce the amounts the Group
realizes when it sells vehicles that are not covered by an automotive
manufacturer's residual value program. A significant downturn in economic
activity could also cause franchisees to have financial difficulties. This could
result in less fee revenue from franchisees and higher levels of bad debts.
HIGHLY COMPETITIVE NATURE OF VEHICLE RENTAL INDUSTRY
There is intense competition in the vehicle rental industry, particularly
with respect to price and service. Dollar, Thrifty and their franchisees compete
against national, regional and local vehicle rental companies. Dollar, Thrifty
and their franchisees have followed their principal competitors when they have
reduced their rental rates and generally have been unable to raise rates
unilaterally. A significant increase in industry capacity or reduction in
overall demand would adversely affect the ability of Dollar, Thrifty and their
franchisees to maintain or increase their rates. This would adversely affect
Dollar Thrifty Group's results of operations.
Dollar's and Thrifty's principal competitors have larger market shares and
rental volumes, greater financial resources and more sophisticated information
systems. This may place Dollar, Thrifty and their franchisees at a disadvantage
in responding to the offerings of their competitors, to substantial changes in
rental customer preferences or governmental regulation and to adverse economic
conditions. Dollar, Thrifty and their franchisees are also particularly
dependent on discretionary travelers. They are, therefore, more susceptible to
the impact of poor economic conditions than their competitors with a more
balanced mix of business.
HISTORICAL LOSSES
In the first nine months of 1997, the Group had net earnings of $24.2
million; however, it had net losses in each of the prior three years. The Group
had a net loss of $147.3 million in 1996, $30,000 in 1995 and $50.7 million in
1994. The 1996 loss reflected an intangible asset impairment loss of $155.0
million in connection with Chrysler's determination to dispose of Thrifty as a
non-core operation. Excluding the effect of that loss and an intangible asset
impairment loss related to Thrifty Canada Ltd. of $2.8 million, the Group would
have had a net profit of $10.5 million in 1996. The 1994 net loss included a
loss on the sale of Snappy Car Rental, Inc. and reversal of a related
restructuring reserve. Excluding the effects of those items, the 1994 net loss
would have been $20.5 million.
SUBSTANTIAL DEBT; INTEREST RATE RISK
AMOUNT OF LEVERAGE
Dollar Thrifty Group will continue to have substantial debt and debt
service requirements after the Offering and implementation of the Financing
Plan. As of September 30, 1997, Dollar Thrifty Group's total consolidated
13
<PAGE> 15
debt was $1.54 billion. Of this amount, $1.52 billion was secured debt for the
purchase of vehicles and the balance was secured debt that did not relate to the
purchase of vehicles. The Company's ratio of debt to total capitalization was
76% at the end of 1994, 77% at the end of 1995, 87% at the end of 1996 and 88%
at September 30, 1997. Dollar had $33.2 million and Thrifty had $75.1 million
available for borrowing under their credit facilities to finance the purchase of
fleet vehicles as of September 30, 1997. Vehicle rental companies typically
incur substantial debt to finance the ongoing turnover in their fleets.
Following the Offering, Dollar Thrifty Group will have total secured debt
of $1.47 billion and have scheduled annual principal payments of approximately
$307.9 million in 1998, $48.1 million in 1999, $126.7 million in 2000 and $67.3
million in 2001. In addition, Chrysler's credit support will decline annually,
beginning September 30, 1999, by at least 20% of the Initial Support Amount. The
Company may need to replace reductions in the Initial Support Amount with cash
from operations or with borrowings or letters of credit under the Revolving
Credit Facility.
Dollar Thrifty Group intends to use cash generated from operations for debt
service and, subject to restrictions under its debt instruments, to make capital
investments. The Company has historically repaid its debt and funded its capital
investments (aside from growth in its rental fleet) with cash provided from
operations and from the sale of vehicles. The Company has funded growth in its
vehicle rental fleet by incurring additional debt. The Group expects to incur
additional debt from time to time to the extent permitted under the terms of its
debt instruments.
CONSEQUENCES OF LEVERAGE
Dollar Thrifty Group's substantial level of debt has important
consequences. Those consequences include:
- the Group's ability to borrow additional amounts for working
capital, capital expenditures or other purposes could be limited;
- a substantial portion of the Group's cash flow from operations is
required to make debt service payments;
- the Group will be exposed to increases in interest rates because a
substantial portion of its debt bears interest at floating rates;
and
- the Group's leverage could limit its flexibility to react to changes
in general economic conditions, competitive pressures and adverse
changes in government regulation and its ability to capitalize on
significant business opportunities.
The Company's Revolving Credit Facility will contain various covenants that will
restrict its ability to pay dividends and to engage in various transactions. See
"Description of Certain Indebtedness."
Dollar Thrifty Group will have to sustain the improved level of operating
results and cash flow it achieved in the first nine months of 1997 to meet its
debt service obligations using operating cash flow and to comply with its debt
covenants. It is not certain whether the Group will be able to do so. Its
results depend significantly on factors, including prevailing economic and
competitive conditions, that are beyond its control. If Dollar Thrifty Group is
unable to meet its debt service obligations or comply with its covenants, there
would be a default under the Revolving Credit Facility. To avoid a default, the
Company may need waivers from third parties, which might not be granted.
INTEREST RATE RISK
Dollar Thrifty Group's results of operations depend significantly on
prevailing levels of interest rates because of the large amount of debt it
incurs to purchase vehicles. In addition, the Group will be exposed to increases
in interest rates because a substantial portion of its debt bears interest at
floating rates. The Company estimates that, in 1998, approximately 30% of its
average debt will bear interest at floating rates. The amount of Group's
financing costs affects the amount Dollar, Thrifty and their franchisees must
charge their customers to be
14
<PAGE> 16
profitable. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources" and Note 8 of Notes to
Consolidated Financial Statements.
COST OF VEHICLES
The average prices of new vehicles have historically increased from year to
year. However, automotive manufacturers have offered sales incentive programs
that have partly offset the impact of those price increases on vehicle rental
companies, including Dollar and Thrifty. Sales incentives might not continue to
be available or might be available on less favorable terms, in which case Dollar
Thrifty Group's operating results could be materially adversely affected.
MARKET RISK ON VEHICLE DISPOSITION
As of September 30, 1997, Dollar Thrifty Group was subject to "residual
value risk" on approximately 22% of its fleet, with a book value of $292.1
million. Residual value risk is the risk that a vehicle's market value at the
time it is sold will be less than its depreciated value. Automotive
manufacturers' residual value programs limit the Group's residual value risk for
the remaining approximately 78% of its fleet. Under these programs, the
manufacturer either guarantees the aggregate depreciated value upon resale of
covered vehicles of a given model year, as is generally the case under
Chrysler's program, or agrees to repurchase vehicles at specified prices during
established repurchase periods. In either case, the manufacturer's obligation is
subject to certain conditions relating to the vehicle's age, physical condition
and mileage.
Vehicles purchased by vehicle rental companies under these programs are
referred to in this Prospectus as "Program Vehicles." Vehicles not purchased
under these programs and for which vehicle rental companies therefore bear
residual value risk are referred to in this Prospectus as "Non-Program
Vehicles." The Company believes that a majority of vehicles owned by other U.S.
vehicle rental companies are Program Vehicles.
Residual value programs enable Dollar and Thrifty to determine their
depreciation expense on Program Vehicles in advance. Vehicle depreciation is the
largest single cost element in Dollar's and Thrifty's operations. The percentage
of Dollar's and Thrifty's vehicle rental fleets benefiting from residual value
programs could decrease if the automotive manufacturers changed the size or
terms of these programs. In that event, Dollar and Thrifty would have increased
residual value risk that could be material to their results of operations and
could adversely affect their ability to finance their fleets.
Because it is difficult to predict future vehicle resale values, Dollar and
Thrifty may not be able to manage effectively the residual value risk on their
Non-Program Vehicles. Thrifty's results for the first nine months of 1997 were
adversely affected by lower than anticipated residual values. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations -- Nine
Months Ended September 30, 1997 Compared with Nine Months Ended September 30,
1996." The residual value of Non-Program Vehicles depends on such factors as the
general level of pricing in the automotive industry for both new and used
vehicles. Prices for used vehicles generally decrease if the automotive
manufacturers increase the retail sales incentives they offer on new vehicles.
The Company cannot predict the level of retail sales incentives Chrysler or the
other automotive manufacturers will offer in the future.
Dollar and Thrifty have received substantial payments under residual value
programs over the past several years. See Note 5 of Notes to Consolidated
Financial Statements.
AVAILABILITY OF FINANCING; IMPLEMENTATION OF FINANCING PLAN
Dollar Thrifty Group depends heavily on third-party financing to purchase
fleet vehicles. Accordingly, continued availability of fleet financing on
favorable terms is important to the Group's results of operations. As of
September 30, 1997, more than 75% of Dollar Thrifty Group's fleet debt related
to the purchase of Program Vehicles. This fleet debt was secured by the
obligations of automotive manufacturers under residual value programs. As a
result, a significant change in the size or terms of those programs or in the
credit standing of the manufacturers could materially adversely affect the
Group's ability to obtain fleet financing on favorable terms. The Group would be
particularly affected by any decline in Chrysler's credit standing since most of
the Group's
15
<PAGE> 17
indebtedness relates to Chrysler Program Vehicles. The inability of the Group to
obtain and maintain fleet financing on favorable terms would have a material
adverse effect on the Group.
It is particularly important that the Group successfully implement the
Financing Plan. The components of the Financing Plan, except for the Commercial
Paper Program and the related Liquidity Facility, will be consummated
concurrently with the completion of the Offering. The proceeds from the
Commercial Paper Program will be used to finance the Group's summer peak vehicle
fleet needs and to repay outstanding medium term notes that begin to amortize in
September 1998.
The Company expects to implement the Commercial Paper Program in the first
quarter of 1998. It has an underwritten financing commitment for the Liquidity
Facility from Credit Suisse First Boston (and its affiliates) and The Chase
Manhattan Bank and it can use Program Vehicles as collateral for the commercial
paper. The Company's ability to implement the Commercial Paper Program will
depend on its reaching agreement on the relevant documentation and receiving
required ratings by certain debt rating agencies. There can be no assurance that
the Company will be able to implement the Commercial Paper Program or, if it is
unable to do so, to arrange alternative financing on acceptable terms. The
failure of the Company to implement the Commercial Paper Program or to obtain
alternative financing would materially adversely affect the Group's results of
operations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources -- Financing Plan."
DEPENDENCE ON CHRYSLER
Chrysler is Dollar's and Thrifty's principal supplier of vehicles. While
the number of vehicles purchased from Chrysler varies from year to year, in the
1997 model year approximately 97% of Dollar Thrifty Group's U.S. vehicle
purchases were Chrysler vehicles. Dollar and Thrifty have agreed in vehicle
supply agreements extending through July 2001 to buy at least 80% of their
annual fleet requirements from Chrysler until certain annual minimum levels are
reached. If Chrysler were unable to supply sufficient vehicles or these
agreements were not extended, vehicles might not be available from other
automotive manufacturers in sufficient quantities and on competitive prices and
terms. In that event, Dollar or Thrifty might have to purchase vehicles at
higher prices or on less favorable terms than its competitors and might not be
able to pass the increased costs on to customers and franchisees. See "Business
- -- Fleet Acquisition and Management -- Vehicle Supply." The Group would also be
adversely affected if customer satisfaction with Chrysler products declined
significantly.
Given the volume of vehicles Dollar Thrifty Group purchases from Chrysler,
shifting large portions of its fleet purchases to other manufacturers would
require significant lead time and various operational changes. In addition,
other automotive manufacturers might be unwilling to enter into supply
agreements with Dollar or Thrifty because they have supply agreements with some
of Dollar's and Thrifty's competitors.
If Dollar or Thrifty does not purchase a sufficient volume of Program
Vehicles from Chrysler or otherwise comply with the provisions of its vehicle
supply agreement, it would not be entitled to certain promotional payments from
Chrysler and its agreement could be terminated by Chrysler. The minimum
aggregate volumes of Program Vehicles to be purchased under the agreements range
from 50,742 in the 1997 model year to 58,756 in the 2001 model year. Dollar and
Thrifty purchased an aggregate of 83,301 Program Vehicles from Chrysler in the
1997 model year. The level of Chrysler promotional payments has been material to
the Group's results of operations. The loss or interruption of, or reductions
in, these payments could have a material adverse effect on the Group. See Note 5
of Notes to Consolidated Financial Statements.
Chrysler will provide Dollar Thrifty Group with certain credit support in
connection with the Financing Plan. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital Resources
- -- Financing Plan" and "Description of Certain Indebtedness."
There are various intercompany agreements and arrangements between members
of Dollar Thrifty Group and Chrysler and its subsidiaries. See "Continuing
Relationship with Chrysler." It is not certain that the products, services and
other benefits that Chrysler and its subsidiaries currently provide to or
purchase from the members of the Group could be replaced and maintained on
favorable terms, if at all.
16
<PAGE> 18
DOLLAR'S DEPENDENCE ON LEISURE MARKET AND TOUR OPERATORS
Dollar Thrifty Group's results of operations depend heavily on Dollar's
continuing success in the leisure vehicle rental market, particularly with
respect to foreign tour operators with which it has significant relationships.
Both Dollar's and Thrifty's results also depend heavily on the overall level of
discretionary travel in the United States and Canada since they rent vehicles
mainly to discretionary travelers.
Dollar derived approximately 80% of its rental revenue in 1996 from
operations in Florida, California, Hawaii and Nevada, states with a high volume
of leisure travelers. Dollar estimates that it derived approximately 28% of its
rental revenue in 1996 from customers of foreign tour operators and
approximately 8% from customers of domestic tour operators.
Reduced levels of discretionary spending resulting from an economic decline
in the United States, Canada or those foreign countries, particularly the United
Kingdom, where a majority of Dollar's tour operators' customers reside, would
adversely affect the Company. The Company would also be adversely affected if
Dollar were unable to maintain its relationships with tour operators or if there
were a decline in the level of its tour customer rentals. Such a decline could
result from events reducing the appeal of the leisure destinations served by
Dollar and, in the case of tourists from the United Kingdom, from changes in the
value of the British pound.
DEPENDENCE ON AIR TRAVEL INDUSTRY
A substantial portion of the Group's revenues are derived from vehicle
rentals at company-owned stores at or near airports and franchise fees and other
payments from franchised locations at or near airports. The Company estimates
that approximately 90% of vehicle rental revenues from Dollar's and Thrifty's
company-owned stores in 1996 were generated at locations at or near airports.
Significant airfare increases could result in reduced air travel. Any event that
significantly disrupts or reduces air travel could have a material adverse
effect on the Group's results of operations.
SEASONALITY
The third quarter, during the peak summer travel months, has historically
been the strongest quarter of the year in terms of the numbers of vehicle
rentals, rental rates and Group profitability. Travel disruptions during the
summer period could have a material adverse effect on Dollar Thrifty Group.
AVAILABILITY AND PRICE OF FUEL
Dollar's and Thrifty's operations would be materially adversely affected if
fuel supplies were limited, mandatory allocations or rationing of fuel were
imposed or fuel prices increased significantly.
REGULATION OF LOSS DAMAGE WAIVERS AND SUPPLEMENTAL LIABILITY INSURANCE
Sales of loss damage waivers and supplemental liability insurance have been
important sources of revenues for the vehicle rental industry. Under loss damage
waivers, the rental company agrees to relieve a customer from financial
responsibility for vehicle damage. Supplemental liability insurance covers
customers for third party personal injury, death and property damage claims
resulting from accidents. Many states regulate the sale of loss damage waivers,
supplemental liability insurance or both. Adoption of national or additional
state legislation affecting or limiting the sale of these products could result
in a reduction in or loss of these sources of revenues. In addition, limitations
on customers' liability to vehicle rental companies could increase costs to
Dollar, Thrifty and their franchisees. The Group's revenue from the sale of loss
damage waivers was approximately 10% of its total revenue in both 1996 and the
nine months ended September 30, 1997. The Group's revenue from the sale of
supplemental liability insurance was approximately 4.5% of its total revenue in
both 1996 and the nine months ended September 30, 1997.
UNINSURED LIABILITY RISK
Dollar and Thrifty are exposed to claims for personal injury, death and
property damage resulting from accidents involving their rental customers.
Thrifty self-insures for that risk up to $500,000 per occurrence. Thrifty also
has a quota sharing arrangement with an unaffiliated carrier under which Thrifty
pays 15% of the portion of
17
<PAGE> 19
any loss between $500,000 and $2 million. Thrifty also has liability coverage of
up to $7.5 million per occurrence. Dollar self-insures for personal injury,
death and property damage up to $1 million per occurrence and maintains
liability coverage up to $7.5 million per occurrence. For claims arising before
completion of the Offering, both Dollar and Thrifty have additional insurance
above their respective self-insured retention and insurance coverage levels
under a policy issued to Chrysler by unaffiliated carriers.
Dollar and Thrifty are in the process of obtaining insurance that would be
effective upon completion of the Offering of certain amounts in excess of their
respective self-insured retention levels and coverages. Dollar or Thrifty may
have uninsured liabilities above historical levels and could also have
liabilities for existing or future claims exceeding their insurance coverage.
Dollar or Thrifty may not have sufficient capital available to pay uninsured
claims. In addition, they may not be able to obtain or maintain insurance on
economically reasonable terms.
REGULATORY AND ENVIRONMENTAL MATTERS
Various federal, state, local and foreign laws and regulations affect
Dollar's and Thrifty's operations. Some relate to selling loss damage waivers
and supplemental liability insurance, vicarious liability of vehicle owners
(where the owner of a vehicle is responsible for accidents of the driver) and
consumer protection. Others relate to advertising, sales of used vehicles, the
taxing and licensing of vehicles, franchising operations and sales, and
environmental protection and cleanup. Compliance with current and future laws
and regulations could require material expenditures or otherwise materially
adversely affect the Group's results of operations or financial condition.
Dollar and Thrifty have made, and will continue to make, expenditures to
comply with environmental laws and regulations. Expenditures relate to the
investigation or cleanup of contamination at their respective owned and leased
properties, as well as contamination at other locations where their respective
wastes have reportedly been identified. Spills or releases involving underground
petroleum storage tank systems used in Dollar's and Thrifty's operations could
result in operational interruptions and expenditures that could materially
adversely affect the Group.
LACK OF PUBLIC MARKET FOR COMMON STOCK; DETERMINATION OF PUBLIC OFFERING PRICE
There has not been a public market for the shares. The common stock has
been approved for listing on the New York Stock Exchange. The Company does not
know the extent to which investor interest in the Company will lead to
development of a trading market or how liquid that market might be. The initial
public offering price for the shares will be determined through negotiations
among Chrysler, the Company, the U.S. Underwriters and the Managers. Investors
may not be able to resell their shares at or above the initial public offering
price. See "Underwriting."
DILUTION
The initial public offering price per share will exceed the net tangible
book value per share. Accordingly, the purchasers of shares sold in the Offering
will experience immediate and substantial dilution (approximately $18.11 per
share) in their investment. See "Dilution."
18
<PAGE> 20
USE OF PROCEEDS
The Company estimates that it will receive net proceeds from the sale of
shares in the Offering of approximately $45.9 million, after deduction of
underwriting discounts and commissions and expenses payable by the Company,
estimated at $2.5 million. The Company expects to use these estimated proceeds
to provide collateral for fleet financing, as part of the Financing Plan. The
Company estimates that it will receive additional net proceeds of up to $65.4
million if the U.S. Underwriters and the Managers exercise the option granted to
them in connection with the Offering to purchase additional shares from the
Company to cover over-allotments. The Company would use the additional estimated
proceeds for general corporate purposes. Those purposes include providing
collateral for the Group's vehicle fleet financings that could reduce or
possibly eliminate Chrysler's credit support. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources -- Financing Plan."
DIVIDEND POLICY
As the Company currently intends to retain any future earnings to fund the
development and growth of its business, it does not anticipate declaring and
paying cash dividends on the common stock in the near term. The decision whether
to use legally available funds to pay dividends on the common stock will be made
by the Company's Board of Directors from time to time in the exercise of its
business judgment. The Board will take into account such matters as the
Company's results of operations and financial condition and any then-existing or
proposed commitments for the use by the Company of available funds.
The Company expects that its Revolving Credit Facility and other debt
instruments will restrict its ability to pay cash dividends on the common stock.
It may also enter into additional loan or other agreements or issue debt
securities or preferred shares with this type of restriction. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources" and "Description of Certain Indebtedness."
DILUTION
As of September 30, 1997, Dollar Thrifty Group had a net tangible book
value of approximately $.39 per share. "Net tangible book value" per share
represents net tangible assets (total assets less liabilities and net intangible
assets) of the Group on a consolidated basis, divided by the total number of
shares outstanding before the Offering. Without taking into account any changes
in net tangible book value after September 30, 1997, other than to give effect
to the Offering and the application of the estimated net proceeds therefrom (at
an assumed public offering price of $20.50 per share), the pro forma net
tangible book value of the common stock as of September 30, 1997 would have been
approximately $53,688,000, or $2.39 per share. The following table shows the
effect of the Offering as if it had occurred at September 30, 1997 and
illustrates the immediate increase in net tangible book value of $2.00 per share
and an immediate dilution of $18.11 per share to new investors:
<TABLE>
<S> <C> <C>
Public offering price per share.............................................. $20.50
Net tangible book value per share as of September 30, 1997................... $ .39
Increase in net tangible book value per share attributable to the Offering... $2.00
-----
Pro forma net tangible book value per share as of September 30, 1997 after
giving effect to the Offering.............................................. $ 2.39
------
Immediate dilution per share to new investors in the Offering................ $18.11
======
</TABLE>
The calculation in the table above excludes 3,375,000 shares issuable upon
exercise of the over-allotment option and 2,250,000 shares (plus up to an
additional 337,500 shares if the over-allotment option is exercised) reserved
for issuance under the Company's long-term incentive plan. See "Management --
Executive Compensation -- Long-Term Incentive Plan."
19
<PAGE> 21
CAPITALIZATION
The following table sets forth the capitalization of Dollar Thrifty Group
as of September 30, 1997 and as adjusted to reflect implementation of the
Financing Plan (except for the Commercial Paper Program), the settlement of
certain intercompany accounts between Dollar Thrifty Group and Chrysler and the
repayment of certain non-vehicle debt. This table should be read in conjunction
with the consolidated financial statements of Dollar Thrifty Group included
elsewhere in this Prospectus. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1997
-------------------------
PRO FORMA
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
Vehicle debt:
Asset backed notes............................................. $ 491,160 $ 1,391,160
Vehicle line of credit with Chrysler Financial Corporation..... 954,636 --
Other vehicle obligations...................................... 74,013 74,013
---------- -----------
Total vehicle debt........................................ $1,519,809 $ 1,465,173
Non-vehicle debt................................................. 22,933 5,600
---------- -----------
Total debt (a)............................................ $1,542,742 $ 1,470,773
Stockholder's equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized;
none issued................................................. -- --
Common stock, $.01 par value, 50,000,000 shares authorized;
20,000,000
issued and outstanding actual and 22,500,000 as adjusted
(b)......................................................... $ 200 $ 225
Additional paid-in capital (b)................................... 628,915 674,790
Accumulated deficit.............................................. (421,129) (425,429)
---------- -----------
Total stockholders' equity................................ 207,986 249,586
---------- -----------
Total capitalization................................. $1,750,728 $ 1,720,359
========= =========
</TABLE>
- -------------------------
(a) The Company has obtained from Credit Suisse First Boston (and its
affiliates) and The Chase Manhattan Bank underwritten financing commitments
relating to the Revolving Credit Facility and the Liquidity Facility.
(b) Excludes 3,375,000 shares issuable upon exercise of the over-allotment
option and 2,250,000 shares (plus up to an additional 337,500 shares if the
over-allotment option is exercised) reserved for issuance under the
Company's long-term incentive plan. See "Management -- Executive
Compensation -- Long-Term Incentive Plan."
20
<PAGE> 22
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Set forth below are the unaudited pro forma consolidated financial
statements of Dollar Thrifty Group as of September 30, 1997 and for the year
ended December 31, 1996 and nine months ended September 30, 1997. They give
effect to two sets of transaction adjustments as if they had occurred on January
1 of the earliest period presented. The unaudited pro forma consolidated
financial statements and accompanying notes should be read together with the
Consolidated Financial Statements included elsewhere in this Prospectus.
The two sets of adjustments are as follows:
I. Pro forma separation adjustments to reflect:
- Settlement of certain intercompany accounts between Dollar Thrifty
Group and Chrysler;
- Establishment of expenses of the Company for certain items currently
paid by Chrysler; and
- Additional costs associated with the Company's being an independent
publicly held company.
II. Offering and Financing Plan adjustments to reflect:
- Offering by the Company of shares covered by this Prospectus without
reflecting any additional proceeds that would be received if the U.S.
Underwriters and Managers exercised their over-allotment option;
- Replacement of bonds and bond guarantees currently provided by
Chrysler; and
- Refinancing of the Company's vehicles, currently financed by Chrysler
Financial Corporation and by asset backed notes to include:
(a) the New Medium Term Notes;
(b) the Commercial Paper Program and the Liquidity Facility;
(c) the Chrysler Credit Support Agreement; and
(d) the Revolving Credit Facility.
The Company believes that the accounting treatment used to reflect these
transactions provides a reasonable basis on which to present this unaudited pro
forma financial data. The pro forma consolidated balance sheet and the pro forma
consolidated statements of operations are unaudited and were derived by
adjusting the historical financial statements of the Company. THE COMPANY IS
PROVIDING UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS FOR
INFORMATIONAL PURPOSES ONLY. THEY SHOULD NOT BE CONSTRUED AS INDICATIVE OF THE
COMPANY'S CONSOLIDATED FINANCIAL POSITION OR RESULTS OF OPERATIONS HAD THE
TRANSACTIONS BEEN CONSUMMATED ON THE DATES ASSUMED. MOREOVER, THEY DO NOT
PROJECT THE COMPANY'S CONSOLIDATED FINANCIAL POSITION OR RESULTS OF OPERATIONS
FOR ANY FUTURE DATE OR PERIOD.
21
<PAGE> 23
DOLLAR THRIFTY GROUP
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
OFFERING
AND
PRO FORMA FINANCING
SEPARATION AS PLAN PRO FORMA
ACTUAL ADJUSTMENTS ADJUSTED ADJUSTMENTS AS ADJUSTED
---------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents....... $ 5,164 $ 49,045(1) $ 51,209 $ (14,636)(5) $ 4,090
(3,000)(2) 5,000(5)
(15,150)(6)
(22,333)(7)
Restricted cash and
investments................... 28,487 -- 28,487 945,900(5) 34,387
(940,000)(5)
Accounts and notes receivable,
net........................... 83,667 -- 83,667 -- 83,667
Due from Parent................. 75,243 (49,045)(1) 26,198 -- 26,198
Prepaid expenses and other
assets........................ 25,450 3,000(2) 28,450 15,150(6) 43,600
Revenue earning vehicles, net... 1,500,864 -- 1,500,864 -- 1,500,864
Property and equipment, net..... 59,907 -- 59,907 -- 59,907
Intangible assets, net.......... 200,198 (22,400)(3) 177,798 -- 177,798
---------- -------- ---------- --------- ----------
$1,978,980 $(22,400) $1,956,580 $ (26,069) $1,930,511
========== ======== ========== ========= ==========
LIABILITIES AND STOCKHOLDER'S
EQUITY
Liabilities:
Accounts payable.............. $ 40,812 -- $ 40,812 -- $ 40,812
Accrued liabilities........... 88,600 -- 88,600 -- 88,600
Income taxes payable.......... 9,635 -- 9,635 -- 9,635
Public liability and property
damage..................... 73,967 -- 73,967 -- 73,967
Debt and other obligations.... 1,542,742 -- 1,542,742 $ (22,333)(7) 1,470,773
900,000(5)
(954,636)(5)
5,000(5)
Deferred income taxes......... 15,238 $ 4,300(4) (2,862) -- (2,862)
(22,400)(3)
---------- -------- ---------- --------- ----------
Total liabilities........ 1,770,994 (18,100) 1,752,894 (71,969) 1,680,925
Stockholder's equity:
Preferred stock............... -- -- -- -- --
Common stock.................. 200 -- 200 25(5) 225
Additional capital............ 628,915 -- 628,915 45,875(5) 674,790
Accumulated deficit........... (421,129) (4,300)(4) (425,429) -- (425,429)
---------- -------- ---------- --------- ----------
207,986 (4,300) 203,686 45,900 249,586
---------- -------- ---------- --------- ----------
$1,978,980 $(22,400) $1,956,580 $ (26,069) $1,930,511
========== ======== ========== ========= ==========
</TABLE>
See notes to unaudited pro forma consolidated financial statements.
22
<PAGE> 24
DOLLAR THRIFTY GROUP
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS)
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
OFFERING AND
PRO FORMA FINANCING
SEPARATION AS PLAN PRO FORMA
ACTUAL ADJUSTMENTS ADJUSTED ADJUSTMENTS AS ADJUSTED
--------- ----------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C>
REVENUES
Vehicle rentals................ $ 495,598 -- $ 495,598 -- $ 495,598
Vehicle leasing................ 150,179 -- 150,179 -- 150,179
Fees and services.............. 50,475 -- 50,475 -- 50,475
Other.......................... 9,342 -- 9,342 -- 9,342
--------- ----------- --------- ------------ -----------
Total revenues............ 705,594 -- 705,594 -- 705,594
COSTS AND EXPENSES
Direct vehicle and operating... 245,895 -- 245,895 -- 245,895
Vehicle depreciation, net...... 213,143 -- 213,143 -- 213,143
Selling, general and
administrative.............. 138,363 $ 1,338(8) 142,201 $ 1,541(11) 143,875
2,500(9) 133(12)
Interest expense, net.......... 72,868 -- 72,868 3,116(13) 76,320
336(14)
Amortization of cost in excess
of net assets acquired...... 8,169 (672)(3) 7,497 -- 7,497
Intangible asset impairment
losses...................... 157,758 -- 157,758 -- 157,758
--------- ----------- --------- ------------ -----------
Total costs and
expenses............... 836,196 3,166 839,362 5,126 844,488
--------- ----------- --------- ------------ -----------
LOSS BEFORE INCOME TAXES......... (130,602) (3,166) (133,768) (5,126) (138,894)
INCOME TAX EXPENSE (BENEFIT)..... 16,682 (299)(10) 16,383 (2,050)(10) 14,333
--------- ----------- --------- ------------ -----------
NET LOSS(a)...................... $(147,284) $(2,867) $(150,151) $ (3,076) $(153,227)
======== ========= ======== ========= =========
Pro forma net loss per share..... $ (6.81)(15)
=========
</TABLE>
- -------------------------
(a) The pro forma as adjusted net loss for the year ended December 31, 1996
includes intangible asset impairment losses of $157,758,000, related to
Chrysler's decision in 1996 to dispose of Thrifty as a non-core asset
($155,000,000) and an impairment loss related to Thrifty Canada Ltd.
($2,758,000). The per share amount of the intangible asset impairment
losses is also included in the pro forma net loss per share.
See notes to unaudited pro forma consolidated financial statements.
23
<PAGE> 25
DOLLAR THRIFTY GROUP
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
OFFERING
PRO FORMA AND
SEPARATION AS FINANCING PRO FORMA
ACTUAL ADJUSTMENTS ADJUSTED ADJUSTMENTS AS ADJUSTED
-------- ----------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C>
REVENUES
Vehicle rentals................. $481,954 -- $481,954 -- $481,954
Vehicle leasing................. 124,783 -- 124,783 -- 124,783
Fees and services............... 39,018 -- 39,018 -- 39,018
Other........................... 7,127 -- 7,127 -- 7,127
-------- ------- -------- ------- --------
Total revenues............. 652,882 -- 652,882 -- 652,882
COSTS AND EXPENSES
Direct vehicle and operating.... 219,058 -- 219,058 -- 219,058
Vehicle depreciation, net....... 207,452 -- 207,452 -- 207,452
Selling, general and
administrative............... 111,554 $ 260(8) 113,689 $ 1,464(11) 115,379
1,875(9) 226(12)
Interest expense, net........... 65,756 -- 65,756 1,287(13) 68,115
1,072(14)
Amortization of cost in excess
of net assets acquired....... 4,504 (504)(3) 4,000 -- 4,000
-------- ------- -------- ------- --------
Total costs and expenses... 608,324 1,631 609,955 4,049 614,004
-------- ------- -------- ------- --------
EARNINGS (LOSS) BEFORE INCOME
TAXES........................... 44,558 (1,631) 42,927 (4,049) 38,878
INCOME TAX
EXPENSE (BENEFIT)............... 20,338 51(10) 20,389 (1,822)(10) 18,567
-------- ------- -------- ------- --------
NET EARNINGS (LOSS)............... $ 24,220 $(1,682) $ 22,538 $(2,227) $ 20,311
======== ======= ======== ======= ========
Pro forma net earnings per
share........................... $ .90(15)
========
</TABLE>
See notes to unaudited pro forma consolidated financial statements.
24
<PAGE> 26
DOLLAR THRIFTY GROUP
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(1) The Due from Parent amount includes intercompany advances to and loans and
other amounts due from Chrysler pursuant to a consolidated cash management
program and working capital line of credit. The unaudited pro forma balance
sheet has been adjusted by $49,045,000 to reflect repayment of the advance
by Chrysler.
(2) To reflect payment of $3,000,000 with respect to insurance premiums and
premium deposits for insurance coverages previously obtained through
Chrysler.
(3) To reflect the realization by the Company of pre-acquisition net operating
loss carryforwards under the new tax sharing agreement with Chrysler.
Realization is recorded by eliminating the related valuation allowance and
offsetting original cost in excess of net assets acquired. Amortization of
cost in excess of net assets acquired has also been reduced to reflect the
reduction in this expense related to this adjustment.
(4) Deferred income taxes reflect $4,300,000, which the Company will not
realize under its new tax sharing arrangements with Chrysler.
(5) To reflect:
- $900,000,000 in proceeds from the issuance of the New Medium Term Notes
(which are fixed rate) as an increase in restricted cash to be used to
refinance vehicles.
- Assumed $45,900,000 in net proceeds from the Company's sale of shares in
the Offering as an increase in restricted cash and equity.
- $940,000,000 of restricted cash, together with $14,636,000 of other cash,
to repay vehicle obligations to Chrysler Financial Corporation. (The
amount to be repaid is expected to decrease to approximately $812,000,000
at the time the Offering is completed.)
- $5,000,000 in borrowings under the new working capital line.
(6) To reflect $15,150,000 in fees associated with the refinancing of vehicle
obligations, working capital, bonds and letter of credit obligations as an
increase in deferred financing cost.
(7) The Company has borrowings under bank working capital lines that would not
have been borrowed if it had been an independent company. Debt and other
obligations and cash and cash equivalents have been reduced by $22,333,000
to reflect the repayment of this debt.
(8) To reflect the impact of obtaining separate excess liability insurance
coverage, workers' compensation insurance coverage, directors and officers
liability coverage and automobile insurance coverage currently provided by
Chrysler at costs that do not reflect the costs of these coverages on an
independent company basis. Actual charges for workers' compensation
coverage during the year ended December 31, 1996 were below costs of
coverage available on an independent company basis and actual charges for
the nine months ended September 30, 1997 were above costs of coverage
available on an independent company basis. This causes a variance in the
related pro forma adjustments between periods.
(9) To reflect the cost of certain executive management expenses currently paid
by Chrysler (adjusted to reflect independent company expense levels) and to
reflect the costs associated with being an independent public entity.
(10) To reflect the income tax benefit of the pro forma net expenses.
Additionally, the Company has not historically been allocated state income
taxes in states where it has been included in Chrysler's consolidated state
income tax returns. An increase in the tax rate has been included for the
effects of those state income taxes as Dollar Thrifty Group will not be
included in Chrysler's consolidated tax returns after completion of the
Offering.
(11) To reflect the cost of replacing the existing bonds currently guaranteed by
Chrysler to support the Company's insurance, airport concession and other
obligations.
(Continued)
25
<PAGE> 27
DOLLAR THRIFTY GROUP
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(12) To reflect the costs associated with the Company's long-term incentive plan
and the elimination of the prior executive compensation plan.
(13) To reflect the effect on net interest expense of settling intercompany
loans and advances with Chrysler and replacing them with bank borrowings
and other facilities on an independent company basis. In the table below,
"Actual net interest income (expense) -- Chrysler" represents actual
amounts paid (charged) by Chrysler without regard to interest subvention
provided by Chrysler; "Elimination of interest subsidies provided by
Chrysler" represents total interest subsidies on intercompany loans from
Chrysler related to Dollar's operations; and "Increase in net interest paid
to banks" reflects the effect of replacing intercompany loans with Chrysler
with bank borrowings at LIBOR plus 2.5% (7.97% in 1996 and 8.11% in 1997,
assumed rates), and investment of actual daily available cash balances at
commercial paper rates (5.42% in 1996 and 5.56% in 1997, assumed rates)
instead of higher actual rates earned through Chrysler's cash management
program. A 1/4% change in interest rates would affect pro forma as adjusted
non-vehicle interest expense by $78,000 in 1996 and $46,000 in the nine
months ended September 30, 1997.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, 1996 1997
----------------- -----------------
(IN THOUSANDS)
<S> <C> <C>
Actual net interest income (expense) --
Chrysler...................................... $ (971) $ 125
Elimination of interest subsidies provided by
Chrysler...................................... 2,024 1,144
Increase in net interest paid to banks.......... 2,063 18
------- --------
$ 3,116 $ 1,287
============== ==============
</TABLE>
(14) The Company's Financing Plan includes the issuance of the New Medium Term
Notes, the Commercial Paper Program, the assumed $45,900,000 net proceeds
from the Company's sale of shares in the Offering (used to purchase
vehicles with the result that the Company would have incurred less vehicle
debt during the respective periods), and the repayment of existing vehicle
obligations to Chrysler Financial Corporation. The pro forma interest rate
on the new credit facility is 6.6% in 1996 and 6.8% in 1997. A 1/4% change
in interest rates would affect pro forma as adjusted vehicle interest
expense by $247,000 in 1996 and $548,000 in the nine months ended September
30, 1997:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, 1996 1997
----------------- -----------------
(IN THOUSANDS)
<S> <C> <C>
Assumed interest on the new credit facility... $73,420 $69,587
Amortization of deferred financing costs...... 4,215 3,161
Interest reduction due to vehicle purchases
with net proceeds of shares sold by the
Company in the Offering (rather than with
proceeds of vehicle debt)................... (3,062) (2,366)
----------------- -----------------
Total new credit facility cost........... 74,573 70,382
Interest on historical debt, net of interest
subvention.................................. 73,001 68,383
Amortization of deferred financing costs...... 1,236 927
----------------- -----------------
74,237 69,310
----------------- -----------------
Incremental interest and deferred financing
cost........................................ $ 336 $ 1,072
============== ==============
</TABLE>
(15) Unaudited pro forma net earnings (loss) per share is calculated using
22,500,000 shares of common stock.
26
<PAGE> 28
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA OF DOLLAR THRIFTY GROUP
The selected consolidated statement of operations and operating data for
the years ended December 31, 1996, 1995 and 1994 and the consolidated balance
sheet data as of December 31, 1996, 1995 and 1994 were derived from the audited
consolidated financial statements of Dollar Thrifty Group and the related notes
thereto included in this Prospectus. The selected consolidated statement of
operations and operating data for the years ended December 31, 1993 and 1992 and
consolidated balance sheet data as of December 31, 1993 and 1992 were derived
from the audited consolidated financial statements of Dollar Thrifty Group and
the notes thereto. The selected consolidated statement of operations and
operating data for the nine months ended September 30, 1997 and 1996 and the
balance sheet data as of September 30, 1997 and 1996 are unaudited. In the
opinion of Dollar Thrifty Group management, such consolidated financial
statements have been prepared on the same basis as the audited consolidated
financial statements and include all adjustments, consisting only of normal
recurring adjustments, necessary for fair presentation. Results for the nine
months ended September 30, 1997 and 1996 are not indicative of results for a
full year. References to system-wide vehicle rental revenue include revenue
received from Dollar Thrifty Group company-owned stores and by franchisees from
the rental of vehicles.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------------- -----------------------
1992 1993 1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
(IN THOUSANDS):
Revenues:
Vehicle rental revenue................ $ 505,169 $ 476,195 $ 413,424 $ 372,508 $ 495,598 $ 382,234 $ 481,954
Vehicle leasing revenue............... 135,719 140,282 172,999 177,836 150,179 116,392 124,783
Fees and services..................... 50,603 51,433 58,966 49,382 50,475 39,969 39,018
Other................................. 15,534 12,368 8,614 9,653 9,342 7,630 7,127
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total revenues.................... 707,025 680,278 654,003 609,379 705,594 546,225 652,882
Costs and expenses:
Direct vehicle and operating.......... 296,297 273,109 234,370 190,577 245,895 187,462 219,058
Vehicle depreciation, net............. 202,817 217,727 210,975 196,367 213,143 161,440 207,452
Selling, general and administrative... 170,041 165,762 143,155 123,439 138,363 103,161 111,554
Interest expense, net................. 71,179 86,373 83,526 78,817 72,868 55,190 65,756
Amortization of cost in excess of net
assets acquired..................... 12,174 12,011 11,517 10,456 8,169 6,742 4,504
Intangible asset impairment losses.... -- -- -- -- 157,758 155,000 --
Restructuring charge (reversal)....... 95,900 (18,296) (7,000) -- -- -- --
Loss on sale of Snappy................ -- -- 40,893 -- -- -- --
Equity in earnings of unconsolidated
affiliates.......................... 6,134 457 -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total costs and expenses.......... 854,542 737,143 717,436 599,656 836,196 668,995 608,324
---------- ---------- ---------- ---------- ---------- ---------- ----------
Earnings (loss) before income taxes and
cumulative effect of accounting
change................................ (147,517) (56,865) (63,433) 9,723 (130,602) (122,770) 44,558
Income tax expense (benefit)............ (32,073) (16,083) (12,755) 9,753 16,682 18,589 20,338
---------- ---------- ---------- ---------- ---------- ---------- ----------
Earnings (loss) before cumulative effect
of accounting change.................. (115,444) (40,782) (50,678) (30) (147,284) (141,359) 24,220
Cumulative effect of accounting change
for income taxes...................... 1,059 -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net earnings (loss)(a).................. $ (114,385) $ (40,782) $ (50,678) $ (30) $ (147,284) $ (141,359) $ 24,220
========= ========= ========= ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF SEPTEMBER 30,
-------------------------------------------------------------- -----------------------
1992 1993 1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (IN THOUSANDS):
Revenue-earning vehicles, net........... $1,027,354 $1,403,568 $ 991,276 $ 958,799 $1,120,346 $1,225,478 $1,500,864
Total assets............................ 1,739,311 2,123,034 1,585,651 1,657,823 1,647,951 1,684,341 1,978,980
Total debt.............................. 1,115,638 1,488,733 1,047,065 1,128,811 1,241,558 1,291,914 1,542,742
Stockholder's equity.................... 343,134 382,352 331,159 331,189 183,883 189,702 207,986
</TABLE>
(Continued)
27
<PAGE> 29
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA OF DOLLAR THRIFTY GROUP
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------------- -----------------------
1992 1993 1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA (IN
THOUSANDS):
EBITDA(a)(b)................. $ 154,860 $ 268,974 $ 253,184 $ 304,399 $ 174,697 $ 108,442 $ 330,555
Adjusted EBITDA(a)(b)........ (110,186) (26,567) (37,836) 27,211 (110,074) (106,953) 57,966
Net cash provided by
operating activities....... 262,482 152,319 291,651 173,163 301,911 231,577 229,878
Net cash provided by (used
in) investing activities... 5,903 (598,369) 100,050 (306,386) (356,299) (370,762) (518,545)
Net cash provided by (used
in) financing activities... (265,420) 443,232 (401,479) 134,294 53,583 139,180 290,406
SYSTEM-WIDE DATA (U.S. AND
CANADA)(c):
Vehicle rental revenue (in
thousands):
Company-owned stores....... $ 439,018 $ 410,022 $ 359,951 $ 372,508 $ 495,598 $ 382,234 $ 481,954
Franchisee locations....... 480,982 530,978 558,049 556,492 502,402 398,766 400,046
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total.................. $ 920,000 $ 941,000 $ 918,000 $ 929,000 $ 998,000 $ 781,000 $ 882,000
Rental locations:
Company-owned stores....... 155 189 169 162 156 161 161
Franchise locations........ 733 753 773 720 729 741 711
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total rental
locations........... 888 942 942 882 885 902 872
Average number of vehicles
operated during the period
by company-owned stores and
franchisees................ 120,383 115,983 98,974 93,989 94,992 98,031 103,253
Peak number of vehicles
operated during the period
by company-owned stores and
franchisees................ 136,077 138,818 117,906 108,447 110,771 110,771 122,286
COMPANY-OWNED STORES DATA
(U.S. AND CANADA)(c):
Average number of vehicles
operated................... 55,873 52,990 40,083 36,246 45,037 45,695 55,103
Number of rental
transactions............... 2,847,449 2,525,697 2,230,076 2,196,611 2,817,269 2,137,301 2,554,969
Average revenue per
transaction................ $ 154 $ 163 $ 161 $ 170 $ 176 $ 179 $ 189
Monthly average revenue per
vehicle.................... $ 655 $ 645 $ 748 $ 856 $ 917 $ 929 $ 972
VEHICLE LEASING DATA (U.S.
AND CANADA)(c):
Average number of vehicles
leased..................... 33,660 37,330 41,072 34,373 30,583 31,434 33,158
Average monthly lease revenue
per unit................... $ 336 $ 313 $ 349 $ 400 $ 409 $ 411 $ 418
</TABLE>
- -------------------------
(a) Management believes it is important to note that net earnings, EBITDA and
Adjusted EBITDA for the year ended December 31, 1996 and the nine months
ended September 30, 1996 include intangible asset impairment losses of
$157,758,000 and $155,000,000, respectively, related to Chrysler's decision
in 1996 to dispose of Thrifty as a non-core asset ($155,000,000) and an
impairment loss related to Thrifty Canada Ltd. ($2,758,000).
(b) EBITDA consists of earnings (loss) before income taxes plus all net interest
expense and all depreciation and amortization expense. Adjusted EBITDA
consists of earnings (loss) before income taxes plus net interest expense
that does not relate to vehicles and depreciation and amortization expense
that does not relate to vehicles. The Company does not include EBITDA and
Adjusted EBITDA as, nor should they be considered as, alternative measures
of operating results or cash flows from operating activities (as determined
in accordance with generally accepted accounting principles). Instead, the
Company includes them because they are widely used financial measures of the
potential capacity of a company to incur and service debt. The presentation
of EBITDA and Adjusted EBITDA may not be comparable to similarly titled
measures used by other companies.
(c) Excludes 1994 data for Snappy Car Rental, Inc., which was sold in September
1994.
28
<PAGE> 30
SELECTED FINANCIAL AND OPERATING DATA OF DOLLAR
The following selected consolidated statement of operations, balance sheet
and operating data of Dollar were derived from unaudited consolidated financial
information of Dollar. In the opinion of Dollar Thrifty Group management, the
information has been prepared on the same basis as the Dollar Thrifty Group
consolidated financial statements and includes all necessary adjustments for
fair presentation of the financial position and results of operations for the
periods presented. Results for the nine months ended September 30, 1997 and 1996
are not indicative of results for a full year. References to system-wide vehicle
rental revenue include revenue received by company-owned stores and by
franchisees from the rental of vehicles.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------------- -----------------------
1992 1993 1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
(IN THOUSANDS):
Revenues:
Vehicle rental revenue....... $ 384,480 $ 349,109 $ 299,563 $ 311,267 $ 435,074 $ 334,393 $ 431,645
Vehicle leasing revenue...... 33,404 36,003 57,018 47,321 38,195 29,728 26,465
Fees and services............ 23,871 23,509 27,709 20,068 22,718 18,374 17,798
Other........................ 9,257 5,556 2,949 3,278 3,183 2,794 1,649
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total revenues............. 451,012 414,177 387,239 381,934 499,170 385,289 477,557
Costs and expenses:
Direct vehicle and
operating.................. 215,464 204,652 180,415 157,519 212,658 160,236 190,732
Vehicle depreciation, net.... 119,680 125,747 111,508 103,384 130,516 97,376 126,727
Selling, general and
administrative............. 108,244 100,542 81,236 70,099 87,739 66,739 75,364
Interest expense, net........ 40,395 53,470 49,413 42,860 45,129 33,702 42,395
Amortization of cost in
excess of net assets
acquired................... 4,074 4,837 4,800 4,556 4,696 3,531 3,723
Restructuring charge
(reversal)................. 60,900 (18,296) -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total costs and expenses... 548,757 470,952 427,372 378,418 480,738 361,584 438,941
---------- ---------- ---------- ---------- ---------- ---------- ----------
Earnings (loss) before income
taxes and cumulative effect
of accounting change......... (97,745) (56,775) (40,133) 3,516 18,432 23,705 38,616
Income tax expense (benefit)... (27,969) (20,377) (13,295) 3,399 9,108 11,828 17,369
---------- ---------- ---------- ---------- ---------- ---------- ----------
Earnings (loss) before
cumulative effect of
accounting change............ (69,776) (36,398) (26,838) 117 9,324 11,877 21,247
Cumulative effect of accounting
change for income taxes...... 2,227 -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net earnings (loss)............ $ (67,549) $ (36,398) $ (26,838) $ 117 $ 9,324 $ 11,877 $ 21,247
========== ========== ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF SEPTEMBER 30,
-------------------------------------------------------------- -----------------------
1992 1993 1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (IN THOUSANDS):
Revenue-earning vehicles,
net.......................... $ 606,041 $ 745,380 $ 513,164 $ 571,610 $ 690,069 $ 739,086 $ 934,186
Total assets................... 942,162 1,107,434 775,666 836,135 989,669 988,491 1,241,697
Total debt..................... 708,426 850,125 562,673 621,782 713,715 758,911 954,488
Stockholder's equity........... 53,778 97,380 70,542 70,659 102,383 82,535 123,630
</TABLE>
(Continued)
29
<PAGE> 31
SELECTED FINANCIAL AND OPERATING DATA OF DOLLAR
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------------- -----------------------
1992 1993 1994 1995 1996 1996 1997
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA (IN THOUSANDS):
EBITDA(a)............................... $ 76,329 $ 132,942 $ 131,901 $ 159,981 $ 205,079 $ 162,869 $ 216,548
Adjusted EBITDA(a)...................... (75,238) (36,215) (22,042) 16,047 30,117 32,392 47,688
Net cash provided by operating
activities............................ 136,811 42,019 161,998 112,718 196,491 131,327 137,901
Net cash provided by (used in) investing
activities............................ 137,760 (151,036) 72,363 (156,360) (310,465) (275,073) (379,636)
Net cash provided by (used in) financing
activities............................ (265,559) 104,446 (242,835) 44,566 113,933 143,636 241,316
SYSTEM-WIDE DATA (U.S. AND CANADA):
Vehicle rental revenue (in thousands):
Company-owned stores.................. $ 384,480 $ 349,109 $ 299,563 $ 311,267 $ 435,074 $ 334,393 $ 431,645
Franchisee locations.................. 213,520 242,891 249,437 234,733 172,926 138,607 132,355
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total vehicle rental revenue........ $ 598,000 $ 592,000 $ 549,000 $ 546,000 $ 608,000 $ 473,000 $ 564,000
Rental locations:
Company-owned stores.................. 70 93 69 78 95 90 100
Franchisee locations.................. 230 228 216 201 175 185 172
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total rental locations.............. 300 321 285 279 270 275 272
Average number of vehicles operated
during the period by company-owned
stores and franchisees................ 80,876 74,009 57,420 53,468 57,197 59,015 62,902
Peak number of vehicles operated during
the period by company-owned stores and
franchisees........................... 91,022 88,645 68,120 62,300 67,414 67,414 75,782
COMPANY-OWNED STORES DATA (U.S.):
Average number of vehicles operated..... 49,158 45,505 33,366 29,855 38,952 39,352 48,682
Number of rental transactions........... 2,453,404 2,039,582 1,801,583 1,777,630 2,409,821 1,821,238 2,229,328
Average revenue per transaction......... $ 157 $ 171 $ 166 $ 175 $ 181 $ 184 $ 194
Monthly average revenue per vehicle..... $ 652 $ 639 $ 748 $ 869 $ 931 $ 944 $ 985
VEHICLE LEASING DATA (U.S.):
Average number of vehicles leased....... 9,193 10,151 14,130 10,823 7,801 8,140 6,774
Average monthly lease revenue
per unit.............................. $ 303 $ 296 $ 336 $ 364 $ 408 $ 406 $ 434
</TABLE>
- -------------------------
(a) EBITDA consists of earnings (loss) before income taxes plus all net
interest expense and all depreciation and amortization expense. Adjusted
EBITDA consists of earnings (loss) before income taxes plus net interest
expense that does not relate to vehicles and depreciation and amortization
expense that does not relate to vehicles. The Company does not include
EBITDA and Adjusted EBITDA as, nor should they be considered as,
alternative measures of operating results or cash flows from operating
activities (as determined in accordance with generally accepted accounting
principles). Instead, the Company includes them because they are widely
used financial measures of the potential capacity of a company to incur and
service debt. The presentation of EBITDA and Adjusted EBITDA may not be
comparable to similarly titled measures used by other companies.
30
<PAGE> 32
SELECTED FINANCIAL AND OPERATING DATA OF THRIFTY
The following selected consolidated statement of operations, balance sheet
and operating data of Thrifty were derived from unaudited consolidated financial
information of Thrifty. In the opinion of Dollar Thrifty Group management, the
information has been prepared on the same basis as the Dollar Thrifty Group
consolidated financial statements and includes all necessary adjustments for
fair presentation of the financial position and results of operations for the
periods presented. Results for the nine months ended September 30, 1997 and 1996
are not indicative of the results for a full year. References to system-wide
vehicle rental revenue include revenue received from company-owned stores and by
franchisees from the rental of vehicles.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------------------------- ---------------------
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
(IN THOUSANDS):
Revenues:
Vehicle rental revenue......... $ 54,538 $ 60,913 $ 60,388 $ 61,241 $ 60,524 $ 47,841 $ 50,309
Vehicle leasing revenue........ 102,315 104,279 114,951 117,769 111,969 86,649 98,318
Fees and services.............. 25,088 26,415 29,548 28,950 27,730 21,569 21,215
Other.......................... 6,190 6,701 6,522 4,768 4,714 3,768 4,595
--------- --------- --------- --------- --------- --------- ---------
Total revenues............. 188,131 198,308 211,409 212,728 204,937 159,827 174,437
Costs and expenses:
Direct vehicle and operating... 44,600 34,484 29,335 32,270 33,242 27,204 28,317
Vehicle depreciation, net...... 68,968 77,491 87,739 85,287 82,592 64,064 80,724
Selling, general and
administrative............... 49,061 53,140 51,530 52,102 50,260 37,245 37,917
Interest expense, net.......... 23,859 26,376 29,609 30,754 26,449 20,517 22,392
Amortization of cost in excess
of net assets acquired....... 5,900 5,900 5,900 5,900 3,473 3,211 781
Intangible asset impairment
losses....................... -- -- -- -- 157,758 155,000 --
Equity in losses of
unconsolidated affiliates.... 6,134 457 -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Total costs and expenses... 198,522 197,848 204,113 206,313 353,774 307,241 170,131
--------- --------- --------- --------- --------- --------- ---------
Earnings (loss) before income
taxes and cumulative
effect of accounting change.... (10,391) 460 7,296 6,415 (148,837) (147,414) 4,306
Income tax expense (benefit)..... (1,532) 4,080 6,102 6,387 7,338 6,401 3,058
--------- --------- --------- --------- --------- --------- ---------
Earnings (loss) before cumulative
effect of accounting
change......................... (8,859) (3,620) 1,194 28 (156,175) (153,815) 1,248
Cumulative effect of accounting
change for income taxes........ (3,490) -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Net earnings (loss)(a)........... $ (12,349) $ (3,620) $ 1,194 $ 28 $(156,175) $(153,815) $ 1,248
========= ========= ========= ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF SEPTEMBER 30,
--------------------------------------------------------- ---------------------
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (IN THOUSANDS):
Revenue-earning vehicles, net.... $ 336,310 $ 547,367 $ 425,345 $ 382,137 $ 430,277 $ 486,392 $ 566,678
Total assets..................... 824,210 908,000 772,075 837,317 676,370 704,333 732,017
Total debt....................... 494,542 592,850 447,273 520,142 527,843 548,513 587,711
Stockholder's equity............. 261,187 256,990 257,670 257,756 96,159 103,815 97,288
</TABLE>
(Continued)
31
<PAGE> 33
SELECTED FINANCIAL AND OPERATING DATA OF THRIFTY
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------------------------- ---------------------
1992 1993 1994 1995 1996 1996 1997
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA (IN THOUSANDS):
EBITDA(a)(b)..................... $ 91,604 $ 112,928 $ 133,431 $ 130,385 $ (33,491) $ (57,499) $ 110,323
Adjusted EBITDA(a)(b)............ 721 7,651 13,034 8,662 (143,252) (142,404) 6,595
Net cash provided by operating
activities..................... 138,000 77,209 113,518 62,053 108,052 90,057 81,647
Net cash provided by (used in)
investing activities........... (162,765) (179,976) 31,737 (130,875) (110,261) (117,465) (139,358)
Net cash provided by (used in)
financial activities........... 20,806 103,737 (145,577) 68,769 1,644 27,712 59,868
SYSTEM-WIDE DATA (U.S. AND
CANADA):
Vehicle rental revenue (in
thousands):
Company-owned stores........... $ 54,538 $ 60,913 $ 60,388 $ 61,241 $ 60,524 $ 47,841 $ 50,309
Franchisee locations........... 267,462 288,087 308,612 321,759 329,476 260,159 267,691
--------- --------- --------- --------- --------- --------- ---------
Total vehicle rental
revenue................. $ 322,000 $ 349,000 $ 369,000 $ 383,000 $ 390,000 $ 308,000 $ 318,000
Rental locations:
Company-owned stores........... 85 96 100 84 61 71 61
Franchisee locations........... 503 525 557 519 554 556 539
--------- --------- --------- --------- --------- --------- ---------
Total rental locations..... 588 621 657 603 615 627 600
Average number of vehicles
operated during the period by
company-owned stores and
franchisees.................... 39,507 41,974 41,554 40,521 37,795 39,016 40,351
Peak number of vehicles operated
during the period by company-
owned stores and franchisees... 45,055 50,173 49,786 46,147 43,357 43,357 46,504
COMPANY-OWNED STORES DATA
(U.S. AND CANADA):
Average number of vehicles
operated....................... 6,715 7,485 6,717 6,391 6,085 6,343 6,421
Number of rental transactions.... 394,045 486,115 428,493 418,981 407,448 316,063 325,641
Average revenue per
transaction.................... $ 138 $ 125 $ 141 $ 146 $ 149 $ 151 $ 155
Monthly average revenue per
vehicle........................ $ 677 $ 678 $ 749 $ 799 $ 829 $ 838 $ 871
VEHICLE LEASING DATA
(U.S. AND CANADA):
Average number of vehicles
leased......................... 24,467 27,179 26,942 23,550 22,782 23,294 26,384
Average monthly lease revenue
per unit....................... $ 348 $ 320 $ 356 $ 417 $ 409 $ 413 $ 414
</TABLE>
- -------------------------
(a) Management believes it is important to note that net earnings, EBITDA and
Adjusted EBITDA for the year ended December 31, 1996 and the nine months
ended September 30, 1996 include intangible asset impairment losses of
$157,758,000 and $155,000,000, respectively, related to Chrysler's decision
in 1996 to dispose of Thrifty as a non-core asset ($155,000,000) and an
impairment loss related to Thrifty Canada Ltd. ($2,758,000).
(b) EBITDA consists of earnings (loss) before income taxes plus all net interest
expense and all depreciation and amortization expense. Adjusted EBITDA
consists of earnings (loss) before income taxes plus net interest expense
that does not relate to vehicles and depreciation and amortization expense
that does not relate to vehicles. The Company does not include EBITDA and
Adjusted EBITDA as, nor should they be considered as, alternative measures
of operating results or cash flows from operating activities (as determined
in accordance with generally accepted accounting principles). Instead, the
Company includes them because they are widely used financial measures of the
potential capacity of a company to incur and service debt. The presentation
of EBITDA and Adjusted EBITDA may not be comparable to similarly titled
measures used by other companies.
32
<PAGE> 34
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Dollar Thrifty Group has two vehicle rental companies, Dollar and Thrifty.
They engage in the business of renting vehicles directly to retail customers and
providing vehicle leasing and other services to franchisees that rent to
customers. The majority of Dollar's revenue is derived from renting vehicles to
customers from company-owned stores, while the majority of Thrifty's revenue is
generated from leasing vehicles and providing services to franchisees. In
September 1994, the Company sold Snappy Car Rental, Inc. ("Snappy"), which was
also engaged in the business of renting cars. Dollar Thrifty Group also leased
vehicles to non-affiliates in 1994 and 1995 through its subsidiary, Manatee
Leasing Inc. ("Manatee"), whose operations have been discontinued.
Dollar Thrifty Group's revenues consist of:
- Vehicle rentals -- revenue generated from renting vehicles to
customers, including all related charges, through company-owned
stores,
- Vehicle leasing -- revenue generated from leasing vehicles, primarily
to franchisees,
- Fees and services -- revenue generated from franchise fees and
providing reservations, insurance, supplies and other products and
services to franchisees, and
- Other -- revenue generated from franchise sales, parking income,
non-vehicle lease income and interest income derived from franchisees.
Dollar Thrifty Group's expenses consist of:
- Direct vehicle and operating -- costs related to the rental of
revenue-earning vehicles to customers and to the leasing of vehicles
to franchisees, such as leasing expenses, concessions and commissions
paid to airport authorities, commissions paid to travel agencies,
insurance and lease promotion expenses, net of certain incentives
received from vehicle manufacturers,
- Vehicle depreciation, net -- depreciation expense relating to
revenue-earning vehicles, net of gains and losses on the disposal of
such vehicles,
- Selling, general and administrative expenses, including advertising
and marketing expenses and reservations,
- Interest expense, net -- interest expense, net of interest earned on
restricted cash and working capital facility, relating primarily to
revenue-earning vehicle financing and to working capital debt, and
- Amortization of cost in excess of net assets acquired.
33
<PAGE> 35
RESULTS OF OPERATIONS
The following table sets forth, for each of the periods indicated, the
percentage of operating revenues represented by certain items in Dollar Thrifty
Group's consolidated statement of operations:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------- ------------------------
1994 1995 1996 1996 1997
-------- -------- --------- --------- --------
(PERCENTAGE OF REVENUES)
<S> <C> <C> <C> <C> <C>
Revenues:
Vehicle rentals................. 63.2% 61.1% 70.2% 70.0% 73.8%
Vehicle leasing................. 26.5 29.2 21.3 21.3 19.1
Fees and services............... 9.0 8.1 7.2 7.3 6.0
Other........................... 1.3 1.6 1.3 1.4 1.1
-------- -------- --------- --------- --------
Total revenues............. 100.0% 100.0% 100.0% 100.0% 100.0%
-------- -------- --------- --------- --------
Costs and expenses:
Direct vehicle and operating.... 35.8% 31.3% 34.8% 34.3% 33.6%
Vehicle depreciation, net....... 32.3 32.2 30.2 29.6 31.8
Selling, general and
administrative............... 21.9 20.3 19.6 18.9 17.1
Interest expense, net........... 12.8 12.9 10.3 10.1 10.1
Amortization of cost in excess
of net assets acquired....... 1.8 1.7 1.2 1.2 0.7
Intangible asset impairment
losses....................... -- -- 22.4 28.4 --
Restructuring charge reversal --
Snappy....................... (1.1) -- -- -- --
Loss on sale of Snappy.......... 6.3 -- -- -- --
-------- -------- --------- --------- --------
Total costs and expenses... 109.8% 98.4% 118.5% 122.5% 93.3%
-------- -------- --------- --------- --------
Earnings (loss) before income
taxes........................... (9.8) 1.6 (18.5) (22.5) 6.7
Income tax expense (benefit)...... (2.0) 1.6 2.4 3.4 3.1
-------- -------- --------- --------- --------
Net earnings (loss)............... (7.8)% 0.0% (20.9)%(a) (25.9)%(a) 3.6%
======== ======== ======== ======== ========
</TABLE>
- ---------------
(a) Net losses for the year ended December 31, 1996 and the nine months ended
September 30, 1996 include intangible asset impairment losses related to
Chrysler's decision in 1996 to dispose of Thrifty as a non-core asset and an
impairment loss related to Thrifty Canada Ltd.
The following table sets forth, for each of the periods indicated, a
breakdown of Dollar Thrifty Group's two major sources of revenue:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------- ---------------------
1994 1995 1996 1996 1997
-------- -------- --------- --------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Vehicle rental revenue:
Dollar................................. $299,563 $311,267 $ 435,074 $ 334,393 $431,645
Thrifty................................ 60,388 61,241 60,524 47,841 50,309
Snappy................................. 53,473 -- -- -- --
-------- -------- --------- --------- --------
Total............................. $413,424 $372,508 $ 495,598 $ 382,234 $481,954
======== ======== ======== ======== ========
Leasing revenue:
Dollar................................. $ 57,018 $ 47,321 $ 38,195 $ 29,728 $ 26,465
Thrifty................................ 114,951 117,769 111,969 86,649 98,318
Manatee and other...................... 1,030 12,746 15 15 --
-------- -------- --------- --------- --------
Total............................. $172,999 $177,836 $ 150,179 $ 116,392 $124,783
======== ======== ======== ======== ========
</TABLE>
34
<PAGE> 36
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH NINE MONTHS ENDED SEPTEMBER
30, 1996
OPERATING RESULTS
Dollar Thrifty Group had a net profit of $24.2 million for the nine months
ended September 30, 1997, compared to a net loss of $141.4 million for the same
period in 1996. The net loss for the 1996 period included the effect on Dollar
Thrifty Group of Chrysler's decision during the 1996 period to dispose of
Thrifty as a non-core asset. Chrysler took an intangible asset impairment loss
that was required under generally accepted accounting principles to be reflected
as a $155.0 million intangible asset impairment loss in Dollar Thrifty Group's
statement of operations. Excluding the effect of that loss, Dollar Thrifty Group
would have had a net profit of $13.6 million in the first nine months of 1996.
The intangible asset impairment loss had no tax or cash effect.
Dollar Thrifty Group's improved performance in the first nine months of
1997, compared with the comparable period in 1996, was mainly due to growth in
the level of vehicle rental activity and selected price increases as vehicle
rental demand strengthened, which were partially offset by higher depreciation
expenses. Thrifty did not increase vehicle lease rates enough to offset the
higher depreciation expenses related to Non-Program Vehicles, which negatively
affected operating results.
REVENUES
Dollar Thrifty Group's total revenues for the nine months ended September
30, 1997 were $652.9 million, an increase of $106.7 million, or 19.5%, compared
to the same period for 1996. Dollar's revenue was $477.6 million for the nine
months ended September 30, 1997, an increase of $92.3 million, or 24.0%,
compared to the corresponding period in 1996. Thrifty's total revenues were
$174.4 million for the nine months ended September 30, 1997, an increase of
$14.6 million, or 9.1%, compared to the same period for 1996.
The Group's vehicle rental revenue for the nine months ended September 30,
1997 was $482.0 million, a 26.1%, or $99.7 million, increase from the
corresponding 1996 period. This increase consisted of a $97.3 million, or 29.1%,
increase for Dollar and a $2.5 million, or 5.2%, increase for Thrifty. The
increase in vehicle rental revenue for Dollar was due to a 22.4% increase in the
number of transactions, of which approximately 45% related to the conversion of
several franchised locations to company-owned stores. Dollar also had a 5.4%
increase in revenue per transaction due to selected price increases.
Vehicle leasing revenue for the nine months ended September 30, 1997 was
$124.8 million, a 7.2% increase from the same period for 1996. This increase in
vehicle leasing revenue reflects an increase of $11.7 million, or 13.5%, in
Thrifty's leasing revenues due primarily to a 13.3% increase in the average
number of vehicles leased to franchisees and a decrease in Dollar's leasing
revenues of $3.3 million, or 11.0%, due to a decrease in the average number of
vehicles leased to franchisees as a result of the conversion of several
franchised locations to company-owned stores.
EXPENSES
Total expenses were $608.3 million for the nine months ended September 30,
1997, compared to $669.0 million for the same period in 1996. The 1996 expenses
included a $155.0 million intangible asset impairment loss required as a result
of Chrysler's decision to dispose of Thrifty as a non-core asset, as discussed
above. Excluding this loss, total expenses for the 1996 period were $514.0
million, or 94.1% of total revenues, and total expenses for the 1997 period were
$608.3 million, or 93.3% of total revenues.
Direct vehicle and operating expense for the nine months ended September
30, 1997 increased $31.6 million, or 16.9%, over the same period for 1996, due
to an increase in the number of vehicles operated and an increase in per unit
costs, which was partially offset by an increase in manufacturer promotional
incentives related to the acquisition of vehicles. These expenses were 33.6% of
revenue for the nine months ended September 30, 1997, compared to 34.3% of
revenue for the corresponding period in 1996. Direct vehicle and operating
expenses for Dollar increased $30.5 million, or 19.0%, for the nine months ended
September 30, 1997. Thrifty's direct vehicle and operating expenses increased
$1.1 million, or 4.1%, for the nine months ended September 30, 1997.
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Net vehicle depreciation expenses increased $46.0 million, or 28.5%, for
the nine months ended September 30, 1997 over the same period for 1996 due to an
increase in the number of vehicles in the vehicle rental and leasing fleets and
to an increase in the average depreciation expense per vehicle. Higher
depreciation expense per unit was the result of the increased cost of Program
Vehicles and losses and anticipated losses on disposition of Non-Program
Vehicles due to the deterioration in the used vehicle market in 1997. That
deterioration occurred after Thrifty had established its 1997 model year vehicle
lease rates in the summer of 1996. As a result, lease rates did not adequately
cover the higher depreciation expense incurred by Thrifty and earnings before
income taxes were reduced by $10.6 million for the nine months ended September
30, 1997 compared with the same period for 1996.
Selling, general and administrative expenses increased $8.4 million, or
8.1%, for the nine months ended September 30, 1997, compared to the same period
for 1996, primarily due to increases in personnel costs and sales and marketing
expenses that were partially offset by a reduction in bad debt and legal
expenses and to the reversal of a sales tax reserve in 1996 that was accrued
prior to 1994. As a percent of revenue, these expenses were 17.1% of revenue for
the 1997 period compared to 18.9% for the 1996 period.
Net interest expenses increased $10.6 million, or 19.1%, for the nine
months ended September 30, 1997, primarily due to increased debt levels and a
reduction of restricted cash used to finance the growth of the fleet.
As a result of the intangible asset impairment loss discussed above, the
amortization of cost in excess of net assets acquired was $2.4 million less for
the nine months ended September 30, 1997 than for the same period in 1996.
The effective income tax rate for the nine months ended September 30, 1997
was 45.6% due to the effect of amortization of costs in excess of net assets
acquired of $4.5 million and losses in Thrifty Canada Ltd. ("TCL"), for which no
income tax benefit was recorded. For the nine months ended September 30, 1996,
the Group had income tax expenses of $18.6 million even though the loss before
income taxes was $122.8 million. This unfavorable tax result was due to
non-deductible expenses related to the intangible asset loss of $155.0 million,
amortization of cost in excess of net assets acquired of $6.7 million and losses
at TCL for which no income tax benefit was recorded.
YEAR ENDED DECEMBER 31, 1996 COMPARED WITH YEAR ENDED DECEMBER 31, 1995
OPERATING RESULTS
Dollar Thrifty Group had a net loss of $147.3 million for 1996, compared to
a net loss of $30,000 for 1995. The net loss for 1996 included the effect on
Dollar Thrifty Group of Chrysler's decision during 1996 to dispose of Thrifty as
a non-core asset. Chrysler took an intangible asset impairment loss that was
required under generally accepted accounting principles to be reflected as a
$155.0 million intangible asset impairment loss in Dollar Thrifty Group's
statement of operations. Excluding the effect of that loss and an intangible
asset impairment loss related to TCL of $2.8 million, Dollar Thrifty Group would
have had a net profit of $10.5 million in 1996. The intangible asset impairment
loss had no tax or cash effect.
Dollar Thrifty Group's 1996 results reflect increased rental activity
partially offset by decreased leasing activity, compared in each case to 1995,
resulting from the conversion by Dollar of several franchisee locations to
company-owned stores and an increase in expenses comprised principally of the
intangible asset impairment loss. Direct vehicle and operating expenses, net
vehicle depreciation expense and selling and general administrative expenses
increased in 1996 due mainly to an increase in the number of vehicles operated,
increases in per unit costs and depreciation and an increase in personnel,
advertising and marketing expenses.
REVENUES
Total revenues for 1996 increased by $96.2 million, or 15.8%, to $705.6
million from $609.4 in 1995. Dollar's total revenues increased $117.2 million,
or 30.7%, to $499.2 million in 1996. Thrifty's total revenues decreased $7.8
million, or 3.7%, to $204.9 million in 1996, from $212.7 million in 1995.
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Vehicle rental revenue for 1996 was $495.6 million, an increase of $123.1
million, or 33%. This increase consisted of a $123.8 million, or 39.8%, increase
for Dollar and a $0.7 million, or 1.2%, decrease for Thrifty. The revenue
increase for Dollar was due to a $67.7 million increase related to the
conversion of several franchisee locations to company-owned stores, the most
significant of which was in Hawaii, and to a $56.1 million, or 18%, increase in
revenue for existing company-owned stores. The increase in revenue for existing
company-owned stores was due to both an increase in transactions and to an
increase in revenue per transaction.
Leasing revenue was $150.2 million for 1996, a $27.7 million decrease from
1995. Dollar's leasing revenue decreased $9.1 million, or 19.3%, to $38.2
million primarily due to a reduction in the average number of units leased to
its franchisees partially offset by higher lease rates. The conversion of
several franchisee locations to company-owned stores was the primary reason for
this decline. Thrifty's leasing revenue decreased $5.8 million, or 4.9%, to
$112.0 million due to a reduction in the average number of units leased to its
franchisees and to lower lease rates in Canada. Leasing revenue also declined by
$12.7 million due to cessation of operations of Manatee.
EXPENSES
Total expenses were $836.2 million in 1996, an increase of $236.5 million
from 1995. The 1996 expenses included a $155.0 million intangible asset
impairment loss related to Thrifty, associated with Chrysler's decision to
dispose of Thrifty as a non-core asset and an intangible asset impairment loss
of $2.8 million related to TCL. Excluding these intangible asset impairment
losses, total expenses were 96.2% of total revenues in 1996 compared to 98.4% in
1995.
Direct vehicle and operating expenses increased $55.3 million, or 29%, to
$245.9 million in 1996 due to an increase in the number of vehicles operated and
an increase in the per unit costs. These expenses were 34.8% of revenue in 1996
compared to 31.3% in 1995, due to a significant increase in the proportion of
total revenue generated by vehicle rentals through company-owned stores, which
carry additional costs not associated with leased units. Direct vehicle and
operating expenses for Dollar increased $55.1 million, or 35.0%, while these
expenses for Thrifty increased $1.0 million, or 3.0%.
Net vehicle depreciation expense increased $16.8 million, or 8.5%, to
$213.1 million in 1996 due to an increase in the number of vehicles in the
vehicle rental and leasing fleets and to an increase in depreciation per
vehicle.
Selling, general and administrative expenses were $138.4 million in 1996,
an increase of $14.9 million, or 12.1%, from 1995, due primarily to an increase
in advertising and marketing expenses, personnel costs and other general and
administrative expenses, partially offset by the reversal of a sales tax reserve
in 1996 that was recorded prior to 1994. As a percentage of total revenue,
selling, general and administrative expenses were 19.6% in 1996 compared to
20.3% in 1995.
Interest expense of $72.9 million decreased by $5.9 million, or 7.5%,
primarily due to lower average interest rates paid in 1996, partially offset by
higher debt levels to finance the growth in the vehicle fleet. In December 1995,
Thrifty established an asset backed note program that resulted in lower cost
financing.
During 1996, Chrysler decided to dispose of Thrifty as a non-core asset and
took an intangible asset impairment loss that was required under generally
accepted accounting principles to be reflected as a $155.0 million intangible
asset impairment loss in Dollar Thrifty Group's statement of operations. In
addition, Thrifty recorded an intangible asset impairment loss of $2.8 million
related to TCL.
For 1996, the Company had income tax expenses of $16.7 million even though
the loss before income taxes was $130.6 million. This unfavorable tax result was
due to non-deductible expenses related to the intangible asset impairment losses
of $157.8 million and the amortization of cost in excess of net assets acquired
of $8.2 million, and to losses at TCL for which no tax benefit was recorded. The
effective tax rate for 1995 was 100.3%, resulting from the negative impact of
non-deductible expenses related to the amortization of cost in excess of net
assets acquired of $10.5 million and to losses at TCL for which no income tax
benefit were recorded.
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YEAR ENDED DECEMBER 31, 1995 COMPARED WITH YEAR ENDED DECEMBER 31, 1994
OPERATING RESULTS
Dollar Thrifty Group had a net loss of $30,000 for 1995, compared to a net
loss of $50.6 million for 1994. The net loss for 1994 included a $40.9 million
loss on the sale of Snappy, partially offset by the reversal of $7.0 million of
restructuring charges relating to Snappy. Dollar's operating results improved in
1995, compared to 1994, primarily as a result of increased rental revenue per
transaction and a decrease in expenses resulting from a reduction in the number
of vehicles in the rental and leasing fleet.
REVENUES
Total revenues for 1995 were $609.4 million, a decrease of $44.6 million,
or 6.8%, from 1994. This decrease was primarily due to a $53.5 million reduction
in revenue contribution from Snappy, which was sold in September 1994. Revenue
for Dollar decreased by $5.3 million, or 1.4%, to $381.9 million and revenue for
Thrifty increased by $1.3 million, or 0.6%, to $212.7 million.
Vehicle rental revenue for 1995 was $372.5 million, a decrease of $40.9
million, or 9.9%, from 1994. This decline in revenue was due to $53.5 million
lower revenue for Snappy, partially offset by an increase of $11.7 million in
revenue of Dollar and a $0.9 million increase in revenue of Thrifty. The revenue
growth for both Dollar and Thrifty was due to an increase in revenue per
transaction partially offset by a reduction in the number of transactions. For
Dollar, the number of rental transactions decreased by 1.3%, while the revenue
per transaction increased 4.8%.
Leasing revenue for 1995 was $177.8 million, up $4.8 million, or 2.8%, from
1994 revenue. Leasing revenue for Dollar decreased by $9.7 million due to a
decline in vehicles leased to its franchisees, which was partially offset by
higher lease rates. Leasing revenue for Thrifty increased $2.8 million, or 2.5%,
to $117.8 million, due to higher lease rates in 1995 partially offset by a
decrease in the number of vehicles leased to its franchisees. Leasing revenue
for Manatee also increased by $11.7 million in 1995 due to an increase in the
number of vehicles leased.
Revenue from fees and services decreased $9.6 million, or 16.3%, to $49.4
million in 1995 from $59.0 million in 1994, due primarily to a reduction of the
franchise fee required to be paid by Dollar's franchisees and also to lower
revenue of Dollar's franchisees.
EXPENSES
Total expenses were $599.7 million in 1995, a $117.8 million decline from
1994. Operating expenses related to Snappy and a $40.9 million loss on its sale
represented $84.1 million of this decline. Total expenses for Dollar declined by
$49.0 million to $378.4 million, while total expenses for Thrifty increased by
$2.2 million and expenses for Manatee increased by $11.7 million.
Direct vehicle and operating expenses decreased $43.8 million, or 18.7%, to
$190.6 million in 1995 partially due to the sale of Snappy, which represented
$24.4 million of this decline. Dollar's direct vehicle and operating expenses
decreased $22.9 million due to a reduction in the number of vehicles in the
rental and leasing fleet and to an increase in manufacturer promotional
incentives related to the acquisition of the vehicles. Thrifty had an increase
in direct vehicle and operating expenses of $2.9 million due to higher bad debt
expenses related to leasing revenue, partially offset by an increase in
manufacturer promotional incentives and by a decrease in the number of vehicles
in the vehicle rental and vehicle leasing fleet.
Net vehicle depreciation expenses decreased by $14.6 million, or 6.9%, to
$196.4 million in 1995. Vehicle depreciation for Dollar decreased $8.1 million,
or 7.3%, due to a reduction in the number of vehicles in the rental and leasing
fleet, partially offset by an increase in depreciation per unit. These expenses
for Thrifty declined by $2.5 million due to a reduction in the number of
vehicles in its rental and leasing fleet, partially offset by an increase in the
depreciation per unit. Vehicle depreciation for Snappy decreased by $11.6
million due to its sale and increased by $7.6 million for Manatee due to an
increase in the number of vehicles in its leasing fleet.
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Selling, general and administrative expenses were $123.4 million in 1995,
down $19.7 million, or 13.8%, from 1994 due primarily to elimination of expenses
resulting from the sale of Snappy and a reduction in bad debt, legal and other
administration expenses partially offset by an increase in personnel expenses.
These expenses were 20.3% of total revenues in 1995 compared to 21.9% in 1994.
Net interest expense in 1995 declined by $4.7 million, or 5.6%, due
primarily to lower debt required to finance the Group's vehicle fleet, partially
offset by an increase in average interest rates from 1994.
In September 1994, the Company sold Snappy, resulting in a $40.9 million
loss. In addition, during 1994, Snappy reversed $7.0 million of restructuring
charges accrued prior to 1994.
The effective income tax rate for 1995 was 100.3%, which was negatively
impacted by the amortization of cost in excess of net assets acquired and losses
at TCL for which no income tax benefit was recorded. The effective tax benefit
rate relative to 1994 losses was 20.1%. This rate reflected the negative impact
of non-deductible expenses related to the amortization of cost in excess of net
assets acquired of $11.5 million, losses at TCL for which no income tax benefit
was recorded and the loss on the sale of Snappy.
LIQUIDITY AND CAPITAL RESOURCES
Dollar Thrifty Group's U.S. and Canadian operations are funded by cash
provided by operating activities and its financing arrangements. Its primary use
of funds is to purchase revenue-earning vehicles. For the year ended December
31, 1996, the Group used $1.616 billion to purchase vehicles, which was
partially offset by $1.242 billion in proceeds from the sale of used vehicles.
For the nine months ended September 30, 1997, the Group used $1.467 billion to
purchase vehicles, which was partially offset by $879 million in proceeds from
the sale of used vehicles. This cash requirement was financed by cash from
operations, increased vehicle financing facilities and the use of restricted
cash dedicated to vehicle purchases.
The Company expects the amount of cash required to purchase vehicles, net
of proceeds from the sale of used vehicles, to increase in 1998 because rental
fleets are increasing to meet anticipated rental demand. The Group expects to
meet these cash requirements with cash provided from operations and increased
vehicle financing facilities under the Financing Plan. The Group's need for cash
to finance vehicles is highly seasonal and typically peaks in the second and
third quarters of the year when fleet levels build up to meet seasonal rental
demand. Fleet levels are lowest in the fourth quarter when rental demand is at a
seasonal low. The Group also requires cash for non-vehicle capital expenditures.
These expenditures totaled $17.8 million in 1996 and are estimated to be
approximately $18 million in 1997 and approximately $35 million in 1998 and are
expected to be financed with cash provided from operations. The 1998 capital
expenditures include approximately $10 million for reservation, tour and other
information systems. Non-vehicle capital expenditures are expected to be
financed with cash provided from operations.
To finance its U.S. vehicle fleet requirements, Dollar Thrifty Group has
had an asset backed medium term note program and variable funding note program
and a vehicle financing line of credit from Chrysler Financial Corporation. The
Dollar fleet has been financed by the Chrysler Financial line of credit, which
provided funding, at the prime rate less 1.5%, net of interest subsidies
provided by Chrysler, of up to $1.031 billion in 1997 to finance the summer peak
fleet size. Dollar Thrifty Group intends to replace the Chrysler Financial
financing and to finance future fleet growth by expanding its existing asset
backed note program as described under "Financing Plan" below. The Thrifty fleet
is financed by an asset backed note program, which included, at September 30,
1997, $190 million of 6.6% notes, $260 million of floating rate notes that bear
interest at rates ranging from LIBOR plus .70% to LIBOR plus 1.25%, and $41
million of variable funding notes that bear interest at commercial paper rates
plus program and bank fees. The funding capacity of the existing asset backed
note program was $491 million at September 30, 1997, but had been expanded to
$521 million to finance the 1997 summer peak fleet size by temporarily
increasing the variable funding note program. The medium term notes and variable
funding notes begin amortizing in September 1998, with $233.9 million due in
1998, $48.1 million due in 1999, $126.7 million due in 2000 and $67.3 million
due in 2001. Dollar Thrifty Group intends to establish the Commercial Paper
Program to refinance a portion of these notes and purchase vehicles as described
under "Financing Plan" below.
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Dollar Thrifty Group finances its Canadian vehicle fleet under a lease
agreement with CFI Auto Lease Trust, which has committed to $91.0 million of
funding. This facility is a four-year commitment, which commenced in June 1996
and is supported by underlying bank financing that is required to be renewed
annually by the Trust. Thrifty provides bank letters of credit in amounts up to
$9.0 million to support this facility.
Dollar Thrifty Group has a $35.0 million bank line of credit to provide
additional working capital and letters of credit. At December 31, 1996, $27.0
million was drawn under this line and $3.8 million was used to provide letters
of credit. The Group also has an arrangement with Chrysler under which the Group
can advance excess cash to Chrysler as part of Chrysler's overall cash
management program and Chrysler provides the Group with a $75 million working
capital line of credit. Borrowings under the Chrysler line of credit for use by
Dollar have been provided without interest charges. At December 31, 1996, the
Group had no borrowings under the Chrysler line of credit and had advanced $38.3
million to Chrysler under the cash management program. The bank line and the
arrangements with Chrysler will be replaced in connection with the Financing
Plan.
Dollar Thrifty Group also has significant requirements for bonds and
letters of credit to support its insurance programs and airport concession
obligations. At September 30, 1997, the Group had $184 million in bonds
outstanding, of which $156 million supported insurance obligations. These bonds
have been either provided or guaranteed by Chrysler. The Group believes the
bonds that support insurance obligations could be reduced to approximately $90
million if replaced. Bonds that support airport concession and other commitments
at September 30, 1997 were approximately $28 million. The Company expects that
these financing requirements will continue to grow as airport concessions are
renewed and as its insurance obligations increase. Chrysler's support of the
Group in connection with these financing requirements will end at the time of
the Offering. See "-- Financing Plan."
The Group's core information systems are either designed to, or are being
updated to, address the "Year 2000" issues that might otherwise result if such
systems could not accommodate the date change at the turn of the century. The
estimated total costs of completion of this project are $5 million.
FINANCING PLAN
The Company is implementing the Financing Plan, which includes the sale of
shares by the Company in the Offering. The Financing Plan has the following
elements:
New Medium Term Notes
The Group will expand its existing asset backed note program through the
issuance of $900 million principal amount of New Medium Term Notes that will
begin to amortize three years after issuance. The New Medium Term Notes will be
secured by vehicles in the Group's fleet, by the Group's rights to payment under
automotive manufacturers' residual value programs, by credit enhancement
(including letters of credit issued under the Revolving Credit Facility and
letters of credit provided by Chrysler pursuant to the Chrysler Credit Support
Agreement) and by other collateral. The proceeds that the Group receives from
the New Medium Term Notes will be used to repay Dollar's existing vehicle debt
to Chrysler Financial Corporation and to purchase additional fleet vehicles from
time to time.
Commercial Paper Program and Liquidity Facility
The Company expects to establish, in the first quarter of 1998, the
Commercial Paper Program of up to $615 million through a finance subsidiary and
as part of its existing asset backed note program. The Company will use $255
million of the proceeds to refinance the portion of the Group's outstanding
asset backed notes that amortizes from September 1998 to February 1999. The
Company will use the remaining amount available under the Commercial Paper
Program for fleet financing and to refinance asset backed notes from time to
time.
The Company will be required to establish a $545 million Liquidity Facility
to support the Commercial Paper Program. The Liquidity Facility will provide the
Commercial Paper Program with a backup source of funding if the Company's
finance subsidiary is unable to refinance maturing commercial paper by issuing
new
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commercial paper. The Liquidity Facility will be backed by the same assets and
other credit enhancements that support the Commercial Paper Program.
The Company expects to establish the Liquidity Facility on the basis of
underwritten financing commitments from Credit Suisse First Boston (and its
affiliates) and The Chase Manhattan Bank. Establishment of the Liquidity
Facility is subject, among other things, to the Company's commercial paper
receiving credit ratings of A-1 from Standard & Poor's Ratings Service and P-1
from Moody's Investors Service, Inc. The ongoing availability of the Commercial
Paper Program will depend, among other things, on those ratings being
maintained, the absence of events of insolvency and compliance with certain
covenants.
Chrysler Credit Support
As part of the Financing Plan, Chrysler will provide credit support for the
Group's fleet financing in the form of a letter of credit facility. The credit
support will start at $50 million, but will be reduced to the extent the Company
receives more than $10 million in net proceeds from the exercise of the
over-allotment option. If those proceeds are $60 million or more, Chrysler's
credit support would be eliminated. The Initial Support Amount will decline
annually, beginning September 30, 1999, by the greater of 20% of the Initial
Support Amount and 50% of the Group's excess cash flow. The Company may need to
replace reductions in the Initial Support Amount with cash from operations or
with borrowings or letters of credit under the Revolving Credit Facility. To
secure reimbursement obligations under the Chrysler Credit Support Agreement,
Chrysler will have liens on certain assets of the Group. See "Description of
Certain Indebtedness."
Offering of Shares by the Company
The Company's sale of shares in the Offering is part of the Financing Plan.
The net proceeds to the Company will be used to provide collateral for the fleet
financing. If the over-allotment option granted to the U.S. Underwriters and the
Managers is exercised, the additional net proceeds will be used for general
corporate purposes. Those purposes include providing collateral for the Group's
vehicle fleet financings that could reduce or possibly eliminate Chrysler's
credit support.
Revolving Credit Facility
The Company will establish a new $215 million senior secured Revolving
Credit Facility to provide letters of credit of up to $190 million and working
capital borrowings of up to $70 million. The Group may not have more than $215
million of combined borrowings and letters of credit outstanding under the
Revolving Credit Facility at any time. The Company may be required to use up to
$130 million of letters of credit under the Revolving Credit Facility to back up
and ultimately replace existing Chrysler guarantees and bonds issued on behalf
of the Group. Borrowings under the Revolving Credit Facility will bear interest
at floating rates. See "Description of Certain Indebtedness -- The Revolving
Credit Facility."
The Company expects that the New Medium Term Notes will be issued and the
Revolving Credit Facility and the Chrysler Credit Support Agreement will be in
effect when the Offering is completed. The Company expects that the Commercial
Paper Program and the Liquidity Facility will be implemented in the first
quarter of 1998. The Company has obtained from Credit Suisse First Boston (and
its affiliates) and The Chase Manhattan Bank underwritten financing commitments,
subject to customary conditions, relating to the Revolving Credit Facility and
the Liquidity Facility.
The completion of the Offering is contingent upon the issuance of the New
Medium Term Notes and the implementation of the Chrysler Credit Support
Agreement and the Revolving Credit Facility.
See "Risk Factors -- Substantial Debt; Interest Rate Risk."
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INFLATION
The increased acquisition cost of vehicles is the primary inflationary
factor affecting the Group. Many of the Group's other operating expenses are
also expected to increase with inflation. Management does not expect that the
effect of inflation on the Group's overall operating costs will be greater for
the Group than for its competitors.
NEW ACCOUNTING STANDARDS
Recent pronouncements of the Financial Accounting Standards Board ("FASB"),
which are not required to be adopted at this date, include Statement of
Financial Accounting Standards ("SFAS") No. 131, "Disclosure about Segments of
an Enterprise and Related Information" ("SFAS No. 131"), SFAS No. 130,
"Reporting Comprehensive Income" ("SFAS No. 130"), SFAS No. 129, "Disclosure of
Information about Capital Structure" ("SFAS No. 129") and SFAS No. 128,
"Earnings Per Share" ("SFAS No. 128"). SFAS No. 131 requires that a public
business enterprise report financial and descriptive information about its
reporting segments on the same basis that it uses internally for evaluating
segment performance and deciding how to allocate resources to segments. SFAS No.
130 establishes standards for reporting and display of comprehensive income and
its components in a full set of general-purpose financial statements. SFAS Nos.
129 and 128 specify guidelines as to the method of computation as well as
presentation and disclosure requirements for earnings per share ("EPS"). The
objective of these statements is to simplify the calculation and to make the
U.S. standard for computing EPS more compatible with the EPS standards of other
countries and with that of the International Accounting Standards Committee.
Adoption of SFAS No. 128 is required for fiscal years ending after December 15,
1997. The other statements listed above are effective for fiscal years beginning
after December 15, 1997 and earlier application is not permitted. The adoption
of these statements will not have a material effect on Dollar Thrifty Group's
consolidated financial statements.
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INDUSTRY OVERVIEW
The U.S. daily vehicle rental industry has two principal markets: the
airport market and the local market. Vehicle rental companies that focus on the
airport market rent primarily to business and leisure travelers. Vehicle rentals
from airport locations account for the largest portion of vehicle rentals in the
United States. Those companies focusing on the local market rent primarily to
persons who need a vehicle periodically for personal or business use or who
require a temporary replacement vehicle. Rental companies also sell used
vehicles and ancillary products such as refueling services and loss damage
waivers. The vehicle rental industry has been seasonal. The third quarter,
during the peak summer months, has historically been the strongest quarter of
the year in terms of numbers of vehicle rentals and rental rates.
Vehicle rental companies typically incur substantial debt to finance the
ongoing turnover of their fleets. They also typically acquire a majority of
their fleets under manufacturer residual value programs that guarantee the
resale value of Program Vehicles at particular times in the future. This allows
a rental company to predict this important element of its cost structure. The
Program Vehicles and the related obligations of the manufacturers are often used
as collateral for the vehicle rental company's fleet financing.
The domestic vehicle rental industry has experienced significant revenue
growth over the past five years, following a period of reduced rental rates
prompted by excess vehicle capacity. The economic recession in the United States
from 1990 to 1992 led to decreased new vehicle demand and overcapacity among
automotive manufacturers. The manufacturers offered significant purchase
incentives to vehicle rental companies, enabling them to expand significantly
the size of their fleets. This eventually resulted in excess capacity,
intensified competition and depressed rental rates. As general economic
conditions in the United States improved, the manufacturers increased their new
vehicle prices and substantially reduced the incentives offered to fleet
purchasers. Continued competitive pressure within the rental industry, however,
constrained increases in average daily rental rates. The domestic vehicle rental
industry is now experiencing improved profitability as oversupply conditions
have lessened and average daily rental rates have increased.
There have recently been significant changes in the ownership of the
principal companies in the U.S. vehicle rental industry, several of which had
been owned by domestic automotive manufacturers. HFS Incorporated purchased Avis
Rent A Car, Inc. and subsequently sold 70% of Avis's equity to the public.
Republic Industries Inc. acquired National Car Rental System, Inc. and Alamo
Rent-a-Car, Inc. and Team Rental Group Inc. (renamed Budget Group, Inc.)
acquired Budget Rent a Car Corporation from Ford Motor Company. Ford sold a
minority interest in Hertz Corporation to the public. As a result, several of
the major companies in the industry are publicly held and only Dollar and
Thrifty remain wholly owned by a domestic automotive manufacturer. The Company
believes these changes may lead to higher average rental rates as a result of
increased industry focus on profitability and shareholder returns, rather than
on transaction volume and market share.
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BUSINESS
OVERVIEW
Dollar and Thrifty and their independent franchisees operate the Dollar and
Thrifty vehicle rental systems. The Dollar and Thrifty brands represent a
value-priced rental vehicle appealing to tourists and other leisure customers,
including foreign tourists, and to small businesses and independent business
travelers. As of September 30, 1997, Dollar and Thrifty had 872 locations in the
United States and Canada of which 161 were company-owned stores and 711 were
locations operated by franchisees. While Dollar and Thrifty have franchisees in
countries outside the United States and Canada, revenues from these franchisees
have not been material to the Group's results of operations.
The businesses of Dollar and Thrifty complement each other, although they
have different approaches to the vehicle rental market. In the United States,
Dollar's main focus is operating company-owned stores located at major airports,
and it derives substantial revenues from foreign tour and leisure rentals.
Thrifty operates mainly through franchisees serving both the airport and local
markets. Dollar derives a majority of its U.S. revenues from providing rental
vehicles and services directly to rental customers, while Thrifty derives its
revenues primarily from franchising fees and services. Thrifty's franchisees
provide vehicles and services to the rental customer. Dollar incurs the costs of
operating its company-owned stores and its revenues are directly affected by
changes in rental demand. As Thrifty operates primarily through franchisees, it
does not incur the costs of operating the franchised locations and does not
generally deal directly with rental customers. Therefore, changes in levels of
customer demand tend to affect Thrifty's results less quickly than those of
Dollar.
The Company is a Delaware corporation, wholly owned by Chrysler. It was
incorporated on November 4, 1997 in connection with the Offering. It is the
successor to Pentastar Transportation Group, Inc. Dollar was incorporated in
1965 and Thrifty was incorporated in 1950.
STRATEGY
The Company's main objectives are to increase revenues and improve
profitability by strengthening its value-priced brands. The key elements of this
strategy are:
CAPITALIZE ON CHANGING INDUSTRY DYNAMICS
The domestic vehicle rental industry is emerging from a period ending in
1995 when rental rates, including those of Dollar, Thrifty and their
franchisees, did not keep pace with rising fleet costs. In addition, there have
been recent changes in the ownership of the major U.S. vehicle rental companies,
several of which had been owned by domestic automotive manufacturers. As a
result, many of the major companies in the industry are now publicly held and
only Dollar and Thrifty remain wholly owned by a domestic automotive
manufacturer. These ownership changes may lead to higher average rental rates as
a result of increased industry focus on profitability and shareholder returns,
rather than on transaction volume and market share. The Group would benefit from
higher rental rates, particularly in markets where it has a strong position.
The Company believes there may be opportunities to add smaller independent
and regional rental operators as franchisees. Opportunities would occur to the
extent these operators decide there are benefits in becoming franchisees of a
national brand such as Dollar or Thrifty. These benefits include better access
to vehicle supply, more attractive financing, national marketing programs and
newer technology.
BUILD ON THE COMPANY'S NICHES IN THE VEHICLE RENTAL MARKET
Value-Priced Brands
The Dollar and Thrifty brands are identified with the Group's strategy of
offering value-priced rental vehicles that are comparable to those offered by
the Group's principal competitors. Dollar and Thrifty service a wide variety of
leisure and discretionary customers from airport, near airport and local market
locations.
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Dollar's Leisure Market Position
Dollar intends to build on its strong position in the leisure rental
market. Dollar focuses mainly on the leisure market and tour operators. Of
Dollar's rental revenues in 1996, approximately 80% were derived from operations
in Florida, California, Hawaii and Nevada. The Company plans to expand Dollar's
international tour business because the Company believes that the trend over the
past five years of increasing numbers of foreign tourists visiting the United
States will continue.
Dollar has significant relationships with foreign tour operators,
especially those in the United Kingdom and has systems and facilities
specifically designed to provide a high level of service to this market segment.
Dollar plans to expand and add to its relationships with major tour operators.
Rentals to tour customers have certain advantages. Tour customers tend to
reserve vehicles earlier than other customers, rent them for longer periods and
cancel reservations less frequently. Dollar plans to focus on tour operator
opportunities where its current market share is low, particularly from certain
countries in Western Europe and in Latin America.
Thrifty's Local Market Position
Thrifty's company-owned stores and its franchisees derive approximately
half of their combined rental revenues from the airport market and half from the
local market. Thrifty's competitors usually focus on only one of these markets.
The local market has grown faster than the airport market and generally has had
less pricing pressure. In addition, local market locations usually have lower
costs and a more diverse customer base. Management believes that the local
market, where competition is based on location, service and customer
relationships, is well-suited to Thrifty's franchise strategy, which emphasizes
local ownership and operation. Thrifty plans to increase its local presence
through growth in the operations of existing franchisees and addition of new
franchisees.
CAPITALIZE ON OPPORTUNITIES FOR OPERATING EFFICIENCIES
Dollar and Thrifty operate as separate companies and serve the vehicle
rental market in different ways. The Company believes that as an independent
company it can improve efficiency and reduce costs by taking advantage of its
joint ownership of Dollar and Thrifty. Opportunities include pursuing volume
discounts in connection with the purchase of advertising, insurance and certain
information systems, consolidating some administrative functions and sharing
Group facilities. Additional opportunities involve coordinating used car
disposal, transferring vehicles between fleets to address short-term variations
in regional rental demands, developing joint training programs and referring
overflow customers from one system to the other.
INVEST IN STRATEGIC INFORMATION AND RESERVATION SYSTEMS
Since the beginning of 1995, Dollar Thrifty Group has made capital
investments and other expenditures totalling $22.8 million for reservation, tour
and other information systems. It plans to make capital expenditures of
approximately $10 million in these systems during 1998. Dollar, which has a much
larger proportion of company-owned stores than Thrifty, plans to invest in
centralized rental processing, inventory control, revenue management and other
systems. These investments are intended to improve operational control, fleet
utilization, rental rates and customer service. Because Thrifty has a high
proportion of franchisees, it plans to support its franchisees' operations by
offering uniform automated systems and customer service programs. These
investments will also enable Dollar to introduce, and Thrifty to improve,
customer frequency and loyalty programs.
EXPAND INTERNATIONAL OPERATIONS
Dollar plans to pursue commercial arrangements with one or more foreign
independent vehicle rental companies to expand use of its brands abroad and to
provide additional rentals from in-bound travelers. In addition, Dollar and
Thrifty may license foreign vehicle rental companies as master franchisees for
specific countries or regions. Thrifty may also offer vehicle leasing and other
services to its international franchisees.
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DEVELOP OPPORTUNITIES FOR BUSINESS EXPANSION INTO RELATED AREAS
The Company believes that its experience in fleet leasing and management,
used car disposal and franchising provides it with opportunities for expansion.
These opportunities include leasing vehicles to small companies and individuals,
entering into joint ventures or other arrangements with publicly held new car
dealer groups, used car superstores and auto auctions and using Dollar Thrifty
Group's existing telecommunications capacity to provide telemarketing services.
Management believes the Company will be better able to pursue these
opportunities when it is an independent company.
Thrifty is developing a new brand, DriveWise, for the rental of used
vehicles. DriveWise would add a new source of franchise and related revenues.
Thrifty would enter into separate franchise arrangements for DriveWise. Thrifty
is currently conducting a pilot program for DriveWise in Louisville, Kentucky.
LINK COMPENSATION TO PERFORMANCE TO ENCOURAGE GROWTH
The Company's executive compensation program is designed to provide for
management incentives based on profitability, increases in shareholder value and
other performance criteria. In addition, Dollar and Thrifty have incentive plans
that provide for management compensation based on operating performance and that
reward company-owned stores' management based on the achievement of
performance-related objectives. The Company believes that linking incentive
compensation to such performance criteria should result in increased revenues
and improved profitability.
DOLLAR
GENERAL
Dollar's main focus is on serving the airport vehicle rental market, which
is composed of business and leisure air travelers. The majority of its locations
are on or near airport facilities. Dollar operates primarily through
company-owned stores in the United States, and also licenses its service marks
to independent franchisees in the United States and abroad. All of its Canadian
and international operations are franchised.
Dollar's line of services and products includes fleet leasing, marketing,
centralized reservations, counter automation, insurance, central billing,
supplies and training and operational support. Dollar's company-owned stores and
franchisees rent vehicles on a daily, weekend, weekly and monthly basis, at
varying rates depending on cost and other competitive factors in each location's
market. In addition to vehicle rentals, Dollar and its franchisees sell
ancillary products and rent supplemental equipment. To meet seasonal and other
demand changes, Dollar shifts vehicles among its company-owned stores and U.S.
franchisees. Revenues from Dollar's franchisees outside the United States and
Canada have not been material to its results of operations.
As of September 30, 1997, Dollar's vehicle rental system included 272
locations in the United States and Canada, consisting of 100 company-owned
stores and 172 that were operated by franchisees, and 804 international
franchisee locations. Dollar's total revenue was $499 million in 1996, of which
$439 million (88%) was generated by company-owned stores and $60 million (12%)
was revenue from Dollar franchisees for vehicle leasing fees and other service
and product fees. Company-owned store revenue was 91% of Dollar's total revenue
for the nine-month period ended September 30, 1997.
Dollar operates primarily through company-owned stores, and where
appropriate through franchisees, in the 50 largest U.S. airport vehicle rental
markets, in key U.S. leisure destinations and in other U.S. locations that it
believes can be operated profitably. Dollar has company-owned stores in 35 of
those 50 airport markets and franchisees in the remaining 15. When opportunities
arise, Dollar may acquire operations from franchisees and convert them to
company-owned stores. Dollar converted one franchised operation to a
company-owned operation in 1994, two in 1995, four in 1996 and three in the
first nine months of 1997. Dollar generally has rights of first refusal on the
sale of a franchised operation.
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COMPANY-OWNED STORES
Dollar believes that having company-owned stores in most of the largest 50
airport markets and other key markets enhances its ability to manage its vehicle
rental system and fleet. Dollar can implement company-owned store marketing and
pricing strategies to focus on discretionary leisure and business travelers,
reduce costs through bulk purchasing, apply company-owned store performance
benchmarks and develop and implement best practice company-owned store
management techniques nationwide. Its company-owned stores network also allows
Dollar to offer customers one-way rentals between stores.
Dollar divides its company-owned store operations into four U.S. regions.
Florida is a separate region due to its size and the concentration of
international tour and domestic leisure business. Due to its location, Hawaii is
also a separate region. The continental United States, apart from Florida, is
divided into East and West regions.
Vehicle rentals by customers of foreign and U.S. tour operators generated
approximately 36% of Dollar's company-owned store rental revenues in 1996. These
rentals are usually part of tour packages that also include air travel and hotel
accommodations. Rentals to tour customers have certain advantages. Tour
customers tend to reserve vehicles earlier than other customers, rent them for
longer periods and cancel reservations less frequently. Dollar has significant
relationships with foreign and domestic tour operators that resulted in $150.6
million in 1996 tour rental revenue, of which $94.5 million and $37.8 million
were derived from its Florida and Hawaii regions, respectively. Additional tour
revenue has been generated at other Dollar locations as foreign tourists have
expanded the range of U.S. destinations they visit.
Dollar is the exclusive U.S. vehicle rental company for three of its four
largest foreign tour operator accounts. Its arrangement with the remaining
foreign tour operator account is non-exclusive. The agreements for these four
accounts expire from March 31, 1998 to October 31, 2003. No single foreign tour
operator account generated in excess of 5% of the Group's 1996 revenues.
As of September 30, 1997, Dollar had vehicle rental concessions for
company-owned stores at over 53 airports in the United States. Its payments for
these concessions are usually based upon a specified percentage of
airport-generated revenue, subject to a minimum annual fee, and sometimes
include fixed rent for terminal counters or other leased properties and
facilities.
Services and Products Provided to Rental Customers
Worldwide Reservation System. Dollar has continuously staffed reservation
facilities at its headquarters in Tulsa, Oklahoma and in Plantation, Florida,
and plans to open a new reservation facility in Tahlequah, Oklahoma in 1998.
Both of Dollar's current reservation facilities, as well as the major U.S.
airline global distribution systems, are linked to Dollar's worldwide
reservation computer and telecommunications system, which is also located in
Tulsa, Oklahoma. Dollar's reservation facilities processed seven million
reservation telephone calls during 1996. Approximately half of Dollar's 1996
non-tour vehicle rentals were booked by travel agents through airline
distribution systems. Dollar has preferred supplier agreements with many major
travel agency chains and travel consortia.
Supplemental Equipment and Optional Products. Dollar rents ski racks,
mobile telephones, baby seats and other supplemental equipment and, subject to
availability and applicable local law, makes available loss damage waivers and
insurance. Dollar also offers disabled customers hand control-equipped cars at
no extra charge.
Instant Return. Dollar offers customers instant return service at the
majority of its U.S. airport company-owned stores. When a customer returns a
vehicle at one of these locations, a representative meets the customer and
provides a receipt from a hand-held computer terminal.
Information Systems
Dollar depends upon a number of core information systems to operate its
business. Its worldwide reservation system has rate management applications. The
counter automation system in Dollar's company-owned stores facilitates the sale
of additional products and services and allows Dollar to monitor its fleet and
financial assets. Dollar expects that nationwide introduction in company-owned
stores of Dollar's new rental counter automation
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system, FASTLANE, will be completed in 1998. FASTLANE is currently being adapted
to serve Dollar's tour customers. Dollar is also developing a revenue management
system with Aeronomics, Inc., a leading supplier of such systems, for
introduction in Dollar's company-owned stores starting in the first quarter of
1998 and for franchise locations starting in 1999. The initial version of this
system is being designed to enable Dollar to better determine rental demand
based on historical reservation patterns and adjust its rental rates
accordingly. Dollar will engage The SABRE Group, Inc. ("SABRE"), a leader in
electronic distribution systems for the travel industry, to manage and monitor
its data center network and its daily information processing.
Dollar's core information systems are either designed to, or are being
updated to, address the Year 2000 issues that might otherwise result if the
systems could not accommodate the date change at the turn of the century. Dollar
has secondary communications lines and a disaster recovery plan for its
worldwide reservation center and, after the SABRE transition, all of Dollar's
key systems will be housed in an underground facility in Oklahoma designed to
withstand disasters.
Customer Service and Employee Training
Dollar has programs at its headquarters and in company-owned stores to
improve customer service. Customer First!, Dollar's quality improvement program,
involves establishing a team at each vehicle rental location that is accountable
for customer satisfaction. Dollar's customer service center measures customer
satisfaction, tracks service quality trends, handles customer complaints and
provides recommendations to Dollar's senior management and vehicle rental
location supervisors. Dollar conducts initial and ongoing training for
company-owned store and franchisee employees through education centers in San
Francisco, Tulsa and Newark. Dollar plans to open additional centers in Houston,
Denver, Los Angeles and Chicago.
Orlando Operations
Central Florida, with its tourist attractions, is the most important
leisure destination for Dollar. Dollar's company-owned store at Orlando
International Airport has a mix of tour and other business. Dollar also operates
a facility at the Orlando Sanford International Airport, 25 miles north of
Orlando, which mainly serves charter flights. This facility, which was designed
to handle tour customers, has 42 rental stations and parking for approximately
1,600 vehicles.
FRANCHISING
United States and Canada
Approximately 12% of Dollar's 1996 revenues in the United States and Canada
consisted of fees and other revenues from its franchisees. Dollar sells its U.S.
franchises on an exclusive basis for specific geographic areas. Most franchisees
are located at or near airports that generate a lower volume of vehicle rentals
than the airports served by Dollar's company-owned stores. Dollar also makes a
fleet leasing program available to its U.S. franchisees, which in 1996 accounted
for 8% of Dollar's total revenue. See "-- Fleet Acquisition and Management --
Fleet Leasing Programs."
Dollar licenses its franchisees to use Dollar's service marks in the
vehicle rental and leasing, parking and used car sales businesses. Franchisees
pay Dollar an initial franchise fee generally based on the population, number of
airline passengers, total airport vehicle rental revenues and the level of any
other vehicle rental activity in the franchised territory, as well as other
factors.
System Fees. In addition to an initial franchise fee, each U.S. franchisee
is required to pay Dollar a system fee equal to 6% of gross rental revenue on a
monthly basis. Dollar has announced that system fees for substantially all of
its airport franchisees will rise to 7% in 1998 and to 8% in 1999.
Franchisee Services and Products. Dollar makes insurance coverage available
to its franchisees and provides them with training and operational assistance,
site selection guidance, vehicle damage recovery and claims management advice,
assistance and programs and sales, image and standards guidance. Dollar also
provides them with fleet planning and customer satisfaction programs and sells
them certain Dollar-branded supplies. In addition, Dollar offers its franchisees
rental rate management analysis and programs under which
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Dollar handles warranty claims processing, corporate account and tour billing
and travel agent commission payments. Dollar franchisees are connected to, and
pay Dollar a fee for, each reservation made through Dollar's worldwide
reservation system.
International
Dollar's vehicle rental locations outside the United States are operated by
master franchisees, direct franchisees and subfranchisees. Master franchisees
are authorized to use Dollar's service marks in territories in which they
operate directly or through subfranchisees, and are responsible for promoting
the Dollar brand name and its services and products and for developing and
supporting their direct operations and subfranchisees. Dollar's revenues from
international franchise operations were less than 1% of 1996 total revenue.
As of September 30, 1997, Dollar had franchised operations located abroad
in 62 countries. In Canada, Dollar's two master franchisees directly operate or
subfranchise 42 on- and off-airport locations. Dollar has agreed to terminate
the franchise arrangement with its master franchisee for Europe, Africa and the
Middle East effective January 31, 1998 for locations in certain European
countries and not later than October 31, 1998 elsewhere. Dollar intends to enter
into a commercial arrangement with an independent European vehicle rental
company to be effective February 1, 1998, to continue its representation in
Europe.
MARKETING
National Advertising and Promotion
Dollar's primary marketing objective is to convey to cost conscious leisure
and business travelers that Dollar is committed to providing lower-priced
vehicle rentals than its competitors. Dollar also emphasizes its operations in
Florida, California, Hawaii and Nevada, where Dollar has a higher share of the
leisure rental market than in other locations. Dollar's national advertising
programs build on these themes through weekly advertisements in U.S. Sunday
newspaper travel sections and weekly advertisements in USA Today. Dollar also
advertises on U.S. broadcast and cable television networks, promoting its low
rates and on-airport convenience. Dollar spends approximately 5% of its annual
total revenues on marketing, advertising, public relations and sales promotions.
Dollar has national marketing partnerships with major U.S. airlines' frequent
flier programs in order to attract customers who value frequent flier awards as
well as low vehicle rental rates.
Dollar encourages franchisees, as well as local management of company-owned
stores, to develop local market relationships and retail sales initiatives that
coordinate with Dollar's national advertising programs. Dollar makes available
print and broadcast advertising materials to franchisees for use in local
markets, and pays a promotional allowance for qualifying advertising
expenditures to the franchisees that participate in Dollar's fleet program.
Strategic Marketing Efforts
Travel agencies book slightly over 50% of Dollar vehicle rentals through
the major U.S. airline global distribution systems. Major travel agency chains
and consortia operate under preferred supplier agreements with Dollar, as they
do with other vehicle rental companies, and are supported by Dollar's sales
department. Under its preferred supplier arrangements, Dollar provides these
travel agency groups additional commissions or lower prices in return for their
featuring Dollar in their advertising or giving Dollar a priority in their
reservation systems. In general, these arrangements are not exclusive to Dollar,
and many travel agency groups have similar arrangements with other vehicle
rental companies.
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SUMMARY OPERATING DATA OF DOLLAR
<TABLE>
<CAPTION>
NINE MONTHS
YEARS ENDED DECEMBER 31, ENDED
------------------------------ SEPTEMBER 30,
1994 1995 1996 1997
-------- -------- -------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
REVENUES:
Company-owned stores (excluding Florida)........ $145,731 $155,345 $237,672 $242,630
Florida Region company-owned stores............. 157,132 159,513 201,209 191,247
U.S. and Canada franchisees..................... 80,654 64,092 55,294 38,652
International franchisees....................... 1,952 2,566 2,400 2,728
Other........................................... 1,770 418 2,595 2,300
-------- -------- -------- --------
Total revenues.................................. $387,239 $381,934 $499,170 $477,557
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
------------------------------ SEPTEMBER 30,
1994 1995 1996 1997
-------- -------- -------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
RENTAL LOCATIONS:
Company-owned stores (excluding Florida)........ 47 56 72 78
Florida Region company-owned stores............. 22 22 23 22
U.S. and Canada franchisee locations............ 216 201 175 172
FRANCHISEES:
U.S. and Canada................................. 87 78 68 73
International................................... 21 45 45 47
</TABLE>
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THRIFTY
GENERAL
Thrifty's main focus is on franchising and franchise support services.
Thrifty also operates a limited number of company-owned stores in the United
States and Canada. Thrifty's company-owned stores and its franchisees derive
approximately half of their combined rental revenues from the airport market and
half from the local market. Thrifty's approach of serving both the airport and
local markets within each territory allows many of its franchisees and
company-owned stores to have multiple locations to improve fleet utilization and
profit margins by moving vehicles among locations to better address differences
in demand between their markets. As airports have begun to institute fees for
vehicle rental companies located outside their properties, or limited these
companies' access to airport travelers, some Thrifty franchisees have moved to
on-airport locations. Thrifty believes that the local market offers Thrifty's
franchisees and company-owned stores better growth opportunities, less pricing
pressure, a lower cost structure and a more diverse customer base than the
airport market.
As of September 30, 1997, Thrifty's vehicle rental system included 600
rental locations in the United States and Canada, divided between 539 franchisee
locations and 61 company-owned stores. The Thrifty system also included 308
locations abroad, all of which were franchisee locations. Thrifty's total
revenue was $204.9 million in 1996, of which $141.4 million (69.0%) was revenue
from franchisees in the form of fleet leasing fees, commissions and other
service and product fees and $63.5 million (31.0%) of which was generated by
company-owned stores. Revenues from Thrifty's franchisees outside the United
States and Canada have not been material to its results of operations.
FRANCHISING
United States
Thrifty's U.S. franchisees are the core of its operations and are essential
to its long-term profitability and growth. Thrifty offers its franchisees a full
line of services and products not easily or cost-effectively available from
other sources. Thrifty actively promotes franchisee financial stability and
growth and seeks opportunities to enhance its vehicle rental system by improving
its services to franchisees, particularly its fleet leasing programs, and by
developing new franchisee revenue opportunities, such as airport parking, used
car sales and truck rental. Thrifty also works closely with its U.S. franchisees
in formulating and implementing marketing and operating strategies.
Thrifty licenses its U.S. franchisees to use its service marks and
participate in its various services and systems. Franchisees pay Thrifty an
initial franchise fee based on such factors as the population, the number of
airline passengers, and total airport vehicle rental revenues and the level of
any other vehicle rental activity in the franchised territory. Franchises are
sold on an exclusive basis for a specific geographical territory, usually a city
or metropolitan area. Over the past five years, Thrifty's franchisee turnover
has averaged approximately 10% per year, with an average of 19 terminations and
24 new sales (including new territories added to existing franchise agreements)
per year.
Initial Franchise Fees, System Fees and Advertising Fees. Thrifty's initial
franchise fees are negotiated on a case-by-case basis, and may be structured to
promote expansion of an existing franchisee's operations into a contiguous area.
In addition to the initial franchise fee, its U.S. franchisees pay Thrifty an
administrative fee which is generally 3.0% of base rental revenue, excluding
ancillary products.
U.S. franchisees also pay an advertising fee ranging from 2.5% to 5.0% of
base rental revenue to a separate advertising fund managed jointly by
franchisees and Thrifty management. Thrifty has implemented, and may implement
in the future, special short-term reductions in system and advertising fees to
encourage growth.
For the nine months ended September 30, 1997, Thrifty's five largest U.S.
franchisees generated administration, fleet leasing, reservation and other fees
to Thrifty totaling approximately 18.0% of Thrifty's total revenue.
Marketing to Prospective Franchisees. The number of Thrifty's U.S.
franchisees decreased from 186 at the end of 1994 to 178 at September 30, 1997,
but the number of locations increased from 423 to 433. Thrifty has developed
programs to attract additional franchisees during this period of consolidation
in the vehicle rental
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industry. Programs include attracting independent vehicle rental companies with
phased-in fees and competitive fleet leasing terms, assisting individuals
experienced in vehicle rental operations to operate their own franchises through
financial assistance, start-up fleet supply and other support, and encouraging
existing franchisees to acquire and expand into neighboring territories by
offering fleet incentives, reduced administrative and advertising fees and lower
initial franchise fees for additional territories.
Fleet Leasing Program. Thrifty has a fleet leasing program for franchisees
that it believes provides them with a competitive and flexible source of fleet
vehicles. In 1996, fleet leasing fees accounted for approximately 55% of
Thrifty's total revenue. See "-- Fleet Acquisition and Management -- Fleet
Leasing Programs."
Training and Support. Thrifty's franchisees receive required initial
orientation, and ongoing training, in areas such as customer service and hiring.
In early 1997, Thrifty began implementing its "True Blue Pride Initiative" to
identify areas requiring customer service improvements and to implement new
standards to deliver faster and friendlier service. This initiative emphasizes
the role that franchise customer service employees should have in identifying
and resolving customer complaints. New programs that have been developed as part
of the initiative include Thrifty's frequent renter program, Blue Chip, which
provides for preprinted rental contracts and expedited service.
Thrifty also publishes a comprehensive operating manual for franchisees and
provides operational support in areas such as cost control, fleet planning,
revenue management and local advertising and marketing. Thrifty also assists
franchisees on real estate matters, including site selection and airport
facility issues.
Worldwide Reservation Center and Other Information Systems. Thrifty's
franchisees benefit from Thrifty's continuously staffed worldwide reservation
center at its headquarters in Tulsa, Oklahoma, which in 1996 processed
approximately 4.4 million telephone calls and 1.4 million reservations. The
center is also linked to all of the major U.S. airline reservation systems and
through them to travel agencies in the United States, Canada and abroad. The
center is a key means of marketing the Thrifty system to consumers and travel
agents and informing them about the system's vehicle rental rates, products,
promotions and services. Thrifty franchisee payments for reservations made
through the center accounted for approximately 3% of Thrifty's 1996 total
revenues.
U.S. franchisees receiving a certain volume of reservations are required to
use an approved automated counter system, usually leasing or subleasing the
related hardware and software from Thrifty or a third-party leasing agent. In
addition to providing an electronic data link with Thrifty's worldwide
reservation center, the automated counter system prints rental agreements and
provides Thrifty and its franchisees with customer and vehicle inventory
information and financial and operating reports.
Thrifty supports its information systems through a combination of internal
resources and external technology providers. Thrifty has engaged SABRE to manage
and monitor its data center network and its daily information processing.
Reservation applications systems will continue to be serviced by Perot Systems
Corporation ("Perot"). The arrangements with Perot give Thrifty access to
technical resources through the year 2000, thereby providing a greater level of
assurance that Thrifty can meet its need to maintain and improve important
applications. Other information systems are supported by Thrifty employees.
Thrifty's core information systems are either designed to, or are being
updated to, address the Year 2000 issues that might otherwise result if the
systems could not accommodate the date change at the turn of the century.
Thrifty has secondary communications lines and a disaster recovery plan for its
worldwide reservation center and, after the SABRE transition, all of Thrifty's
key systems will be housed in an underground facility in Oklahoma designed to
withstand disasters.
Insurance, Supplies and National Account Programs. Thrifty makes available
to its franchisees for a fee insurance for death or injury to third parties,
property damage and damage to or theft of franchisee vehicles.
Thrifty makes bulk purchases of items used by its franchisees, which it
sells to franchisees at prices that are often lower than they could obtain on
their own. Thrifty also negotiates national account programs to allow its
franchisees to take advantage of volume discounts for many materials or services
used for operations such as tires, glass replacement, long distance telephone
service and overnight mail.
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Parking Services. Airport parking operations are a useful complement to
vehicle rental operations. Thrifty encourages its franchisees that have
near-airport locations to add this ancillary business. Thrifty assists its
franchisees in obtaining additional property and in planning and implementing
parking operations. Franchisees benefit since the Thrifty service marks are
already on the premises, shuttle buses are already being operated for rental
customers and parking operations increase service levels and recognition at the
airports. Franchisees with parking operations may also offer ancillary services
such as car washes and oil changes to create additional opportunities to service
the vehicle while the traveler is away.
Services and Products Provided to Rental Customers. Thrifty's franchisees
provide their customers with products and services substantially similar to
those provided to customers by Dollar's company-owned stores.
International (Except Canada)
Thrifty master franchisees operate 308 vehicle rental locations in 61
countries and territories outside the United States and Canada. Regions with
Thrifty franchisees include Latin America, Europe, the Middle East and the
Asia-Pacific region. Thrifty seeks to attract international franchisees by
emphasizing Thrifty's uniform image, brand marketing efforts, worldwide
reservation system and consistent vehicle rental system practices and
procedures.
Thrifty grants master franchises on a countrywide basis. Each master
franchisee is permitted to use directly and subfranchise others to use Thrifty's
service marks, systems and technologies within its country or territory.
COMPANY-OWNED STORES
Thrifty typically establishes company-owned stores upon the financial
failure of a franchisee. Thrifty uses company-owned stores to preserve its
presence in key markets. As opportunities arise, these locations are
refranchised. During 1996, Thrifty reduced the number of cities in which it
operates company-owned stores from ten to seven in the United States by granting
new franchises. The services and products Thrifty provides to company-owned
stores and those provided by company-owned stores to vehicle rental customers
are substantially similar to those provided to and by Thrifty's U.S.
franchisees.
CANADIAN OPERATIONS
Thrifty operates in Canada through its wholly owned subsidiary, Thrifty
Canada, Ltd. TCL operates company-owned stores in the four largest airport
vehicle rental markets in Canada and encourages franchisees to operate in the
remaining markets. As of September 30, 1997, the TCL system included 135 vehicle
rental locations, of which 106 were operated by franchisees and 29 were operated
as company-owned stores.
Company-Owned Stores
TCL's company-owned store operations include four strategic airports:
Toronto, Montreal, Vancouver and Calgary. These operations are important to
maintaining a national, airport presence in Canada, where TCL has significant
airport concession and lease commitments. Historically, TCL's operating results
have been adversely affected by losses incurred by company-owned stores. TCL
plans to improve company-owned store operations by focusing on fleet management,
personnel productivity, rate management and revenue growth.
Franchising
TCL provides services and products to its franchisees that are
substantially similar to those Thrifty provides to its U.S. franchisees,
including fleet leasing, insurance services, advertising and marketing support
and supplies. Due to the structure of the Canadian vehicle rental market, which
has a greater proportion of vehicle rental activity from on-airport locations
than off-airport locations as compared to the United States, Thrifty has sought
to strengthen its airport presence in Canada by encouraging existing and
prospective franchisees to locate on-airport.
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<PAGE> 55
Canadian franchisees pay TCL a combined monthly administrative and
advertising fee fixed in most cases at 8% of rental revenues. During 1996, TCL
incurred a $3.2 million charge for bad debts primarily as a result of
terminating 21 franchised operations in 1996 and 1997.
MARKETING
Thrifty's marketing strategy is to position the Thrifty system as an
industry leader in delivering value for cost-conscious consumers. In the United
States it implements this strategy primarily through national advertising and
promotion, assistance to U.S. franchisees in local advertising, promotion and
sales and strategic marketing partnerships.
Advertising, Promotion and Sales
Thrifty employs national advertising on U.S. broadcast and cable television
networks and in newspapers and travel industry and airline magazines. Thrifty
also sponsors sports and other events to increase national exposure and promote
local Thrifty operations. In the United States, Thrifty's national advertising
and marketing expenses are paid out of an advertising fund managed by a national
advertising committee consisting of representatives of Thrifty's franchisees and
certain members of Thrifty's management. U.S. franchisees and company-owned
stores contribute 5.0% of their base rental revenue from airport operations and
2.5% of their base rental revenue from local operations to the advertising fund.
Franchisees and company-owned stores are also required to spend an
additional 3% of their base rental revenue on local advertising and promotion.
Thrifty has a local sales department that assists franchisees in developing
their local markets. Thrifty also provides an allowance for qualifying local
advertising, promotion and sales expenditures to U.S. franchisees that
participate in Thrifty's fleet leasing program. In the 1997 model year,
franchisees and company-owned stores earned an aggregate allowance of
approximately $7.1 million.
Strategic Marketing Efforts
Thrifty's approach of targeting value-conscious consumers includes
strategic marketing partnerships, such as those it has with Montgomery Ward in
the United States, Canadian Tire in Canada and Ryder Truck Rental throughout
North America. Thrifty also has frequency-based marketing relationships with
numerous airlines and hotel chains. Since a significant portion of Thrifty's
rentals system-wide result from travel agency reservations, Thrifty maintains
its relationships with travel agency chains and consortia through preferred
supplier agreements, travel agent advertising and other efforts. Under its
preferred supplier arrangements, Thrifty provides these travel agency groups
additional commissions or lower prices in return for their featuring Thrifty in
their advertising or giving Thrifty a priority in their reservation systems. In
general, these arrangements are not exclusive to Thrifty, and many travel agency
groups have similar arrangements with other vehicle rental companies.
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SUMMARY OPERATING DATA OF THRIFTY
<TABLE>
<CAPTION>
NINE MONTHS
YEARS ENDED DECEMBER 31, ENDED
------------------------------ SEPTEMBER 30,
1994 1995 1996 1997
-------- -------- -------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
REVENUES:
U.S. and Canada franchisees..................... $144,812 $147,068 $138,809 $119,863
U.S. and Canada company-owned stores............ 64,601 63,733 63,522 52,561
International franchisees....................... 1,996 1,927 2,606 2,013
-------- -------- -------- --------
$211,409 $212,728 $204,937 $174,437
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, AS OF
------------------------------ SEPTEMBER 30,
1994 1995 1996 1997
-------- -------- -------- -------------
<S> <C> <C> <C> <C>
RENTAL LOCATIONS:
U.S. and Canada franchisee locations............ 557 519 554 539
U.S. and Canada company-owned stores............ 100 84 61 61
FRANCHISEES:
U.S. and Canada................................. 258 247 248 235
International................................... 45 48 48 59
</TABLE>
FLEET ACQUISITION AND MANAGEMENT
VEHICLE SUPPLY
For the 1997 model year, Chrysler vehicles represented over 87% of Dollar's
U.S. fleet and 99% of the vehicles in its fleet leasing program for franchisees.
Dollar also purchases vehicles from other automotive manufacturers, permitting
it to adjust somewhat the composition and overall cost of its fleet. Chrysler
vehicles made up substantially all of the vehicles in Thrifty's fleet leasing
program. The Company expects that for the 1998 model year, Chrysler vehicles
will represent over 90% of Dollar's U.S. fleet and 95% of the vehicles in its
fleet leasing program, and substantially all of the vehicles in Thrifty's fleet
leasing program.
For the 1997 model year, Chrysler Program Vehicles represented
approximately 70% of the vehicles in Dollar's and Thrifty's respective fleets
and approximately 93% and 70% of the vehicles in their respective fleet leasing
programs. Chrysler sets the terms of its residual value program before the start
of each model year. The terms include monthly depreciation rates, minimum and
maximum holding periods and mileages, model mix requirements and vehicle
condition and other return requirements. The residual value program enables
Dollar and Thrifty to limit their residual value risk with respect to Program
Vehicles because Chrysler agrees to reimburse Dollar and Thrifty for any
difference between the aggregate gross auction sale price of the Program
Vehicles for the particular model year and the vehicles' aggregate predetermined
residual value. Under the program, Dollar and Thrifty must sell the Program
Vehicles in closed auctions to Chrysler dealers. Dollar and Thrifty are
reimbursed under the program for certain transportation and auction-related
costs and have generally experienced lower depreciation rates for Program
Vehicles than if they had sold them in the used vehicle market. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
Dollar and Thrifty also purchase Non-Program Vehicles, for which they bear
the full residual risk because the vehicles are not covered by any
manufacturer's residual value program. They do so when required by manufacturers
in connection with the purchase of Program Vehicles. They also do so when they
believe there is an opportunity to lower their fleet or fleet leasing costs or
to fill model and class niches not available through residual value programs.
Chrysler, which is the main provider of Non-Program Vehicles to Dollar and
Thrifty, does not set any terms or conditions on the resale of Non-Program
Vehicles other than requiring minimum holding periods.
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<PAGE> 57
Dollar Thrifty Group's operating results are materially affected by the
depreciation rates and other purchase terms provided under Chrysler's residual
value program, as well as by other purchase incentives Chrysler provides. The
percentage of vehicles acquired under Chrysler's and other manufacturers'
residual value programs in the future will depend upon several factors,
including the availability and cost of these programs. See "Risk Factors --
Market Risk on Vehicle Disposition."
Chrysler has been Dollar's and Thrifty's principal supplier of vehicles. In
1996, Chrysler began operating under separate five-year vehicle supply
arrangements that were formalized in 1996 and 1997 in separate vehicle supply
agreements with Thrifty and Dollar ("VSAs"). Chrysler has agreed to make
specified volumes of Chrysler vehicles available to Dollar and Thrifty through
July 2001. Dollar and Thrifty may purchase them for use by company-owned stores
or in their fleet lease programs. Dollar and Thrifty have agreed to promote
Chrysler vehicles exclusively in their advertising and other promotional
materials. Chrysler has agreed to make various promotional payments to Dollar
and Thrifty, some of which vary based on the volume of vehicles purchased. These
payments are material to Dollar Thrifty Group's results of operations. See Note
5 of Notes to Consolidated Financial Statements.
The VSAs provide that Dollar and Thrifty will each purchase at least 80% of
its vehicles from Chrysler until a certain minimum level is reached. Also,
certain minimum numbers of vehicles must be Program Vehicles. While Chrysler has
the sole discretion to set the specific terms and conditions of its residual
value program for a model year, it has agreed in the VSAs to offer programs to
Dollar and Thrifty that, taken as a whole, are competitive with a residual value
program Ford or General Motors is then making generally available to domestic
vehicle rental companies.
If purchases of Chrysler vehicles by Dollar or Thrifty during any model
year exceed certain targets, Chrysler will make available to Dollar or Thrifty
additional Program Vehicles up to a maximum of 15% of the target number of
Chrysler Program Vehicles.
DOLLAR THRIFTY GROUP VEHICLE SUPPLY DATA(1)
<TABLE>
<CAPTION>
MODEL YEAR
-------------------------------------
1994 1995 1996 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Program Vehicles Purchased
Chrysler.............................................. 108,986 67,091 75,251 83,301
Other................................................. 513 17 130 --
------- ------- ------- -------
Total.............................................. 109,499 67,108 75,381 83,301
======= ======= ======= =======
Non-Program Vehicles Purchased
Chrysler.............................................. 1,432 16,506 19,974 24,065
Other................................................. 356 1,637 1,277 4,026
------- ------- ------- -------
Total.............................................. 1,788 18,143 21,251 28,091
======= ======= ======= =======
Vehicles Leased
Non-Chrysler.......................................... 6,875 11,108 5,128 6,374
------- ------- ------- -------
Total.............................................. 6,875 11,108 5,128 6,374
======= ======= ======= =======
Total................................................... 118,162 96,359 101,760 117,766
======= ======= ======= =======
</TABLE>
- -------------------------
(1) Excludes Snappy.
56
<PAGE> 58
VEHICLE DISPOSITION
Dollar and Thrifty generally hold vehicles in rental service from six
months to 18 months. The length of service is determined by taking into account
seasonal rental demand and the average monthly mileage accumulation. Most
vehicles must be removed from service before they reach 30,000 miles to avoid
significant penalties under Chrysler's residual value program. As of September
30, 1997, the average age of vehicles in Dollar's and Thrifty's fleet was less
than six months. Less than 5% of Dollar's and Thrifty's Chrysler Program
Vehicles were ineligible for return based on repair condition during 1996.
Dollar or Thrifty must bear the risk on the resale of Program Vehicles that
cannot be returned. Dollar and Thrifty dispose of Non-Program Vehicles through
auctions or directly to used car dealers or franchisees.
MAINTENANCE
Dollar and certain Thrifty franchisees have automotive maintenance centers
at certain airports and in certain urban and suburban areas. Many of these
facilities are accepted by automotive manufacturers as eligible to perform and
receive reimbursement for warranty work. Collision damage and major repairs are
generally performed by independent contractors. Dollar's and Thrifty's
franchisees are responsible for the maintenance of their fleet vehicles.
FLEET LEASING PROGRAMS
Dollar and Thrifty make fleet leasing programs available to their U.S.
franchisees in July for each new model year. The terms of their fleet leasing
programs generally mirror the requirements of various manufacturers' residual
value programs with respect to model mix, order and delivery, vehicle
maintenance and returns, but also include Non-Program Vehicles. Dollar and
Thrifty monitor the creditworthiness and operating performance of franchisees
participating in their fleet leasing programs and periodically audit
franchisees' leased fleets. As of September 30, 1997, approximately 52% and 79%
of the vehicles in the fleets of Dollar's and Thrifty's respective U.S.
franchisees had been provided through their fleet leasing programs. In 1996, 8%
of Dollar's and 55% of Thrifty's total revenue was derived from these programs.
Dollar and Thrifty set their lease rates after considering residual value
program depreciation rates for Program Vehicles, estimated Non-Program Vehicle
depreciation, interest costs, model mix and administrative costs. Average
monthly lease rates vary depending on vehicle model, and the average lease
period is between eight and ten months. Although Dollar and Thrifty lease
Non-Program Vehicles as well as Program Vehicles to their franchisees, their
fleet leasing programs eliminate the residual value risk for their franchisees.
The Thrifty franchisees may, however, elect to assume the residual value risk on
Non-Program Vehicles they lease in exchange for a lower lease rate.
Dollar and Thrifty design their fleet leasing programs to offer their
franchisees an attractive means of obtaining fleet vehicles. For the 1994, 1995
and 1996 model years, on average approximately 51% and 73% of the vehicles used
by Dollar's and Thrifty's respective U.S. franchisees were provided through
Dollar's and Thrifty's fleet leasing programs. During this period a limited
number of larger franchisees acquired their vehicles directly from
manufacturers.
57
<PAGE> 59
U.S. FLEET DATA
<TABLE>
<CAPTION>
NINE MONTHS
YEARS ENDED DECEMBER 31, ENDED
-------------------------- SEPTEMBER 30,
1994 1995 1996 1997
------ ------ ------ -------------
<S> <C> <C> <C> <C>
THRIFTY:
Average number of vehicles leased to franchisees...... 23,918 20,578 20,358 24,155
------ ------ ------ -------------
Average number of vehicles in combined fleets of
franchisees........................................ 31,007 29,806 28,122 30,296
Average number of vehicles in combined fleets of
company-owned stores............................... 5,121 4,881 3,862 3,898
------ ------ ------ -------------
Total......................................... 36,128 34,687 31,984 34,194
====== ====== ====== ==========
DOLLAR:
Average number of vehicles leased to franchisees...... 14,130 10,823 7,801 6,774
------ ------ ------ -------------
Average number of vehicles in combined fleets of
franchisees........................................ 24,054 22,716 17,132 13,000
Average number of vehicles in combined fleets of
company-owned stores............................... 33,366 29,855 38,952 48,682
------ ------ ------ -------------
Total......................................... 57,420 52,571 56,084 61,682
====== ====== ====== ==========
</TABLE>
COMPETITION
There is intense competition in the vehicle rental industry on the basis of
price, service levels, vehicle quality, vehicle availability and convenience and
condition of rental locations. Dollar's and Thrifty's principal competitors have
larger market shares and rental volumes, greater financial resources and more
sophisticated information systems. Dollar operates mainly in the U.S. airport
market, although compared to its competitors it relies more heavily on
discretionary tour and other leisure customers and business customers with no
organizational or corporate affiliation programs. Dollar's franchisees have a
similar customer profile. In any given location, Dollar may compete with
national, regional and local vehicle rental companies, many of which have
greater financial resources than the Group. Dollar's principal competitors for
discretionary business and leisure travelers are Alamo Rent-a-Car, Inc., Avis
Rent A Car, Inc., Budget Group, Inc., Hertz Corporation, National Car Rental
System, Inc. and Thrifty. Dollar competes primarily on the basis of price and
customer service.
Thrifty's U.S. franchisees and company-owned stores generally compete for
cost-conscious consumers with Alamo, Avis, Budget, Dollar, Hertz and National.
Enterprise Rent-A-Car Company and local and regional rental companies are major
competitors in the local market. They compete on the basis of location, service
and well-established customer relationships. Most Thrifty franchisees and
company-owned stores compete in the local market for retail general use business
rather than insurance replacement rentals.
The Canadian vehicle rental markets are also intensely competitive. The
vast majority of the Canadian market is operated either directly or through
franchisees of the major U.S. vehicle rental companies, including Budget, Avis,
Hertz and National, as well as Dollar and Thrifty.
INSURANCE
Dollar and Thrifty are subject to third-party liability and property damage
claims resulting from accidents involving their rental customers. For
third-party bodily injury and property damage claims arising from the use of a
vehicle in the United States, Dollar currently retains the risk of loss up to $1
million and Thrifty up to $500,000, each on a per occurrence basis (the
"self-insured retention"). In addition, Thrifty pays 15% of each loss between
$500,000 and $2 million on a per occurrence basis (the "quota share retention").
Dollar and Thrifty maintain surety bonds to secure their respective retentions.
These bonds are guaranteed by Chrysler.
For claims in excess of $1 million per occurrence for Dollar and $2 million
per occurrence for Thrifty, each is fully covered by insurance carriers for up
to $7.5 million per occurrence. For claims arising before completion of the
Offering, both Dollar and Thrifty have additional insurance above their
respective self-insured retention
58
<PAGE> 60
and insurance coverage. Dollar and Thrifty are in the process of obtaining
insurance that would be effective upon completion of the Offering in certain
amounts in excess of their respective self-insured retention levels and
coverages.
Dollar and Thrifty maintain general and garage liability insurance coverage
at the same levels of coverage as the vehicle liability insurance coverage
described above. They also maintain catastrophic and comprehensive coverage for
damage to vehicles owned by them up to $1.5 million per occurrence with a
deductible amount of $250,000.
Dollar and Thrifty each have insurance reserves relating to claims
resulting from self-insured retention and quota share retention. The amount of
the reserve is based on loss history and projections and in each case is
reviewed at least annually by an independent actuarial firm. As of September 30,
1997, Dollar's and Thrifty's reserve for liability claims was approximately
$60.8 million and $13 million, respectively. Dollar's and Thrifty's obligations
to pay these losses and indemnify the insurance carriers are collateralized by
surety bonds. As of September 30, 1997, these surety bonds totaled approximately
$96 million for Dollar and approximately $57 million for Thrifty.
Dollar and Thrifty also maintain various surety bonds to secure performance
under airport concession agreements and other obligations. Those bonds are
guaranteed by Chrysler. As of September 30, 1997, the total amount of these
bonds was approximately $26 million for Dollar and approximately $2 million for
Thrifty.
Dollar's and Thrifty's surety bonds and related Chrysler guarantees will be
replaced as part of the Financing Plan. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources -- Financing Plan."
Dollar and Thrifty also benefit from workers' compensation, excess
liability and directors' and officers' liability insurance coverage provided by
Chrysler. A portion of the premium paid by Chrysler is allocated to Dollar and
Thrifty and may not reflect their respective costs of coverage on a stand-alone
basis. In connection with the Offering, these insurance coverages will be
replaced.
PROPERTIES
The Company owns its headquarters in Tulsa, Oklahoma, which also houses its
computer data center, pending its relocation to SABRE's facility. Dollar and
Thrifty also maintain their separate headquarters at this site. Dollar and
Thrifty each own or lease real property used for company-owned stores or
subleased to franchisees or to other third parties. Dollar and Thrifty each
operate company-owned stores under concession agreements with various
governmental authorities charged with the operation of airports.
REGULATION
LOSS DAMAGE WAIVERS AND SUPPLEMENTAL LIABILITY INSURANCE
Approximately 12% and 3% of the 1996 vehicle rental revenues of Dollar and
Thrifty, respectively, were generated from the sale of loss damage waivers.
These waivers relieve customers from financial responsibility for vehicle
damage. Legislation affecting the sale of loss damage waivers has been adopted
in 25 states. These laws either require disclosure to customers that loss damage
waivers may not be necessary, limit customer liability to specified amounts,
limit the ability of vehicle rental companies to offer loss damage waivers for
sale or cap the amounts that may be charged for loss damage waivers. Adoption of
national or additional state legislation limiting the sale, or capping the
rates, of loss damage waivers could further restrict sales of this product, and
additional limitations on potential customer liability could increase costs to
Dollar, Thrifty and their franchisees.
Dollar and Thrifty and other vehicle rental companies sell customers
supplemental liability insurance ("SLI"). In 1997, Dollar, Thrifty and the other
principal vehicle rental companies entered into a consent order with the Texas
Department of Insurance in which they agreed to stop selling SLI in Texas.
Additional actions in other jurisdictions could lead to restrictions on the sale
of SLI, which would result in a reduction in the Group's revenues.
59
<PAGE> 61
FRANCHISING REGULATION
As franchisors, Dollar and Thrifty are subject to federal, state and
foreign laws regulating various aspects of franchise operations and sales. These
laws impose registration and disclosure requirements on franchisors in the offer
and sale of franchises and, in certain states, also apply substantive standards
to the relationship between the franchisor and the franchisee, including those
pertaining to default, termination and nonrenewal of franchises.
OTHER MATTERS
Certain states currently make vehicle owners (including vehicle rental
companies) vicariously liable for the actions of any person lawfully driving an
owned vehicle, regardless of fault. Some of these states, including Florida and
New York, do not limit this liability. Vehicle rental companies are also subject
to various federal, state and local consumer protection laws and regulations
including those relating to advertising and disclosure of charges to customers.
Dollar and Thrifty are subject to federal, state and local laws and
regulations relating to taxing and licensing of vehicles, franchise sales,
franchise relationships, vehicle liability, used vehicle sales, insurance,
telecommunications, vehicle rental transactions and labor matters. The Company
believes that Dollar's and Thrifty's practices and procedures are in substantial
compliance with federal, state and local laws and is not aware of any material
expenditures necessary to meet legal or regulatory requirements. Nevertheless,
given the nature and scope of Dollar's and Thrifty's businesses, it is possible
that regulatory compliance problems could be encountered in the future.
ENVIRONMENTAL MATTERS
The principal environmental regulatory requirements applicable to Dollar's
and Thrifty's operations relate to the ownership, storage or use of petroleum
products such as gasoline, diesel fuel and new and used oil; the treatment or
discharge of waste waters; the operation of automotive body shops; and the
generation, storage, transportation and off-site treatment or disposal of waste
materials. Dollar and Thrifty own 72 and lease 25 locations where petroleum
products are stored in underground tanks. For owned and leased properties,
Dollar and Thrifty have programs designed to maintain compliance with applicable
technical and operational requirements, including leak detection testing of
underground storage tanks, and to provide financial assurance for remediation of
spills or releases. The Company's management believes that Dollar's and
Thrifty's operations currently are in compliance, in all material respects, with
such regulatory requirements. Dollar and Thrifty are currently upgrading or
replacing all underground storage tanks to comply with 1998 U.S. federal and
state requirements. Management believes that costs of this project during 1997
and 1998 will be approximately $3.7 million.
The historical and current uses of the Dollar and Thrifty facilities may
have resulted in spills or releases of various hazardous materials or wastes or
petroleum products ("Hazardous Substances") that now, or in the future, could
require remediation. Dollar and Thrifty also may be subject to requirements
related to remediation of Hazardous Substances that have been released into the
environment at properties they own or operate, or owned or operated in the past,
or at properties to which they send, or have sent, Hazardous Substances for
treatment or disposal. Such remediation requirements generally are imposed
without regard to fault, and liability for any required environmental
remediation can be substantial.
Dollar and Thrifty may be eligible for reimbursement or payment of
remediation costs associated with releases from registered underground storage
tanks in U.S. states that have established funds to assist in the payment of
such remediation costs. Subject to certain deductibles, the availability of
funds, the compliance status of the tanks and the nature of the release, these
tank funds may be available to Dollar and Thrifty for use in remediating
releases from their tank systems.
At certain facilities, Dollar and Thrifty presently are investigating or
remediating soil or groundwater contamination. Based on currently available
information, the Company does not believe that the costs associated with
environmental investigation or remediation will be material. The Company has
budgeted approximately $2.5 million for 1997 and approximately $2 million for
1998 for environmental investigation and remediation
60
<PAGE> 62
expenditures, amounts that management believes are adequate. However, additional
contamination could be identified or occur in the future.
LEGAL PROCEEDINGS
On July 12, 1993, certain of Dollar's franchisees in the states of
Washington and Oregon instituted an action in the U.S. District Court for the
Western District of Washington, alleging violations by Dollar and its parent of
various state franchise statutes and breach of contract. The matter resulted in
an $8.7 million jury verdict against Dollar and its parent. Dollar has also been
enjoined from interfering with the plaintiffs' advertising of non-Chrysler
vehicles in their businesses. The verdict has been appealed to the U.S. Court of
Appeals for the Ninth Circuit. See Note 11 of Notes to Consolidated Financial
Statements.
On November 2, 1994, the City of San Jose, California filed an action in
the Superior Court of California, against Chevron, Dollar and others, seeking
unspecified compensatory and punitive damages and injunctive relief. The City of
San Jose has not served process on Dollar. The suit relates to pollution at a
site currently occupied by Dollar and formerly occupied by Chevron. Dollar has
partially remediated the affected soil, but not the allegedly affected ground
water. Dollar believes that prior uses of the site resulted in any remaining
contamination at the site.
On October 2, 1997, a purported class action suit was filed in the Circuit
Court of Coosa County, Alabama, against Dollar, Thrifty and other rental
companies. The plaintiffs in this suit alleged violations of state law in
connection with the sale by the rental companies of certain insurance products.
Dollar and Thrifty have filed answers denying the alleged violations.
In addition to the foregoing, various legal actions, claims and
governmental inquiries and proceedings are pending or may be instituted or
asserted in the future against the Company and its subsidiaries. Litigation is
subject to many uncertainties, and the outcome of the individual litigated
matters is not predictable with assurance. It is possible that certain of the
actions, claims, inquiries or proceedings, including those discussed above,
could be decided unfavorably to the Company or the subsidiaries involved.
Although the amount of liability with respect to these matters cannot be
ascertained, potential liability is not expected to materially affect the
consolidated financial position or results of operations of the Company.
EMPLOYEES
As of September 30, 1997, the Group employed a total of approximately 5,400
full-time and part-time employees of whom approximately 4,100 were employed by
Dollar and 1,300 by Thrifty. Approximately 250 of the Group's employees were
subject to collective bargaining agreements as of September 30, 1997. The
Company believes the Group's relationship with its employees is good.
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<PAGE> 63
CONTINUING RELATIONSHIP WITH CHRYSLER
The Company is a wholly owned subsidiary of Chrysler. After the Offering,
Chrysler will own no equity in the Company. Chrysler will, however, have certain
continuing financial and commercial arrangements with Dollar Thrifty Group.
VEHICLE SUPPLY
Chrysler will continue to provide vehicles to Dollar and Thrifty under
vehicle supply agreements through July 2001. The Dollar Thrifty Group was
Chrysler's largest customer for the 1997 model year. In addition to supplying
vehicles, Chrysler has agreed to offer to Dollar and Thrifty any residual value
program it makes generally available. Chrysler has also agreed to make various
promotional payments during the term of the vehicle supply agreements. Dollar
and Thrifty are required to advertise Chrysler vehicles exclusively. See
"Business -- Fleet Acquisition and Management -- Vehicle Supply."
CREDIT SUPPORT
As part of the Financing Plan, Chrysler will provide credit support for the
Group's fleet financing in the form of a letter of credit facility. The credit
support will start at $50 million, but will be reduced to the extent the Company
receives more than $10 million in net proceeds from the exercise of the
over-allotment option. If those proceeds are $60 million or more, Chrysler's
credit support would be eliminated. The Initial Support Amount will decline
annually, beginning September 30, 1999, by the greater of 20% of the Initial
Support Amount and 50% of the Group's excess cash flow. The Company may need to
replace reductions in the Initial Support Amount with cash from operations or
with borrowings or letters of credit under the Revolving Credit Facility. To
secure reimbursement obligations under the Chrysler Credit Support Agreement,
Chrysler will have liens on certain assets of the Group. The Company has agreed
to nominate a person designated by Chrysler as a director of the Company so long
as Chrysler is providing any credit support to the Group. In addition, as part
of the Company's Financing Plan, Chrysler Financial Corporation, Chrysler's
finance subsidiary, will receive repayment of vehicle debt in the amount of
approximately $812 million. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital Resources
- -- Financing Plan."
INSURANCE AND TAX MATTERS
Chrysler Insurance Corporation, a Chrysler subsidiary, provides automobile
liability insurance to the Group in excess of certain self-insured retentions
and quota share retentions. Those retentions are secured by surety bonds that
are guaranteed by Chrysler. Chrysler Insurance Corporation also provides other
surety bonds to secure various obligations of the Group, including those under
airport concession agreements. These surety bonds and the related Chrysler
guarantees will be replaced under the Financing Plan by new bonds or letters of
credit issued by third parties unaffiliated with Chrysler. Various intercompany
accounts between Chrysler and the Group will be settled in connection with the
Offering. See "Selected Consolidated Financial and Operating Data" and
"Unaudited Pro Forma Consolidated Financial Statements."
The Company and Chrysler are entering into a tax sharing agreement that
replaces their existing tax sharing arrangements upon completion of the
Offering. At that time, the Company will pay Chrysler an estimated amount to
cover federal income taxes that would have been paid by the Company and each of
its subsidiaries that is a member of Chrysler's federal consolidated group,
computed as if the Company and such subsidiaries filed a separate consolidated
federal income tax return for the period beginning on January 1, 1997 and ending
on completion of the Offering. After final returns have been filed and all taxes
have been paid for such period, payment will be made to or from the Company, as
the case may be, to reflect such taxes actually paid.
Chrysler will otherwise be responsible for all income tax liabilities of
members of Dollar Thrifty Group for periods ending on or prior to the completion
of the Offering to the extent that such members were included in consolidated or
combined returns that included Chrysler. If the tax liability of Chrysler or any
Chrysler subsidiary relating to a period ending on or prior to the completion of
the Offering is increased with the effect that a member of Dollar Thrifty Group
has a corresponding benefit with respect to a period beginning after completion
of the Offering, the Company will reimburse Chrysler for that benefit. Subject
to certain exceptions, if the federal
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<PAGE> 64
income tax liability of any member of the Dollar Thrifty Group relating to a
period beginning after completion of the Offering is increased with the effect
that Chrysler has a corresponding benefit with respect to a period ending on or
prior to the completion of the Offering, Chrysler will reimburse the Company for
that benefit. Each of the Company and its subsidiaries will be responsible for
all tax liabilities in jurisdictions where it filed separate returns. No Dollar
Thrifty Group losses incurred after completion of the Offering will be carried
back to a Chrysler tax return. The Company anticipates that it will incur an
additional $4.3 million of income tax expense as a result of the termination of
the existing tax sharing arrangements.
For additional information about the Group's relationship with Chrysler,
see "Risk Factors -- Dependence on Chrysler" and "Selected Consolidated
Financial and Operating Data."
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MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information with respect to the
Company's executive officers and directors:
<TABLE>
<CAPTION>
NAME AGE(1) POSITION(2)
---- ------ -----------
<S> <C> <C>
Joseph E. Cappy...................... 63 Chairman of the Board, Chief Executive Officer,
President and Director
Donald M. Himelfarb.................. 52 Executive Vice President and Director, and President
-- Thrifty
Gary L. Paxton....................... 51 Executive Vice President and Director, and President
-- Dollar
Steven B. Hildebrand................. 43 Vice President, Chief Financial Officer and Treasurer
Thomas P. Capo....................... 46 Director
Edward J. Hogan...................... 70 Nominee for director(3)
Edward C. Lumley..................... 58 Nominee for director(3)
John C. Pope......................... 48 Nominee for director(3)
John P. Tierney...................... 66 Nominee for director(3)
Edward L. Wax........................ 60 Nominee for director(3)
</TABLE>
- -------------------------
(1) As of October 31, 1997.
(2) The executive officers and directors were appointed or elected to their
respective positions with the Company in November 1997.
(3) The Company expects that Messrs. Hogan, Lumley, Pope, Tierney and Wax will
be elected Directors of the Company prior to completion of the Offering.
Joseph E. Cappy has served as a Vice President of Chrysler since August
1987, with responsibility for rental car operations from June 1993 to the
present, international operations from May 1990 to June 1993, brand development
from November 1989 to May 1990, and Chrysler's Jeep/Eagle Division from August
1987 to November 1989. Mr. Cappy was previously President, Chief Executive
Officer and a Director of American Motors Corporation ("AMC"), and General
Marketing Manager of Ford Motor Company's Lincoln-Mercury Division.
Donald M. Himelfarb has been President and Chief Executive Officer of
Thrifty since July 1992. Mr. Himelfarb has served as a Director of TCL since
August 1990, and served as President of TCL from August 1990 to June 1992. He
previously served as President of Car Rental and Leasing for Marks Rentals, a
holding company that owned a Thrifty franchise and other properties. Mr.
Himelfarb is a Director of the American Car Rental Association.
Gary L. Paxton has been President of Dollar since December 1990. He has
served in several senior management positions with Dollar since 1972, including
Senior Vice President of Operations and Properties and Vice President of
Properties and Facilities. Mr. Paxton is also a Director and President-Elect of
the American Car Rental Association.
Steven B. Hildebrand has been Executive Vice President and Chief Financial
Officer of Thrifty since August 1995. He has served in various senior management
positions with Thrifty and Pentastar Transportation Group, Inc. (the predecessor
of the Company) since 1987, including Vice President of Finance, and Treasurer
for Pentastar, a Director of Thrifty and a Director of TCL.
Thomas P. Capo has been the Vice President and Treasurer of Chrysler since
May 1993. He was elected Treasurer of Chrysler in November 1991. Mr. Capo is
also a Director of Chrysler Financial Corporation and Chrysler Canada Ltd.
Edward J. Hogan has been Chairman and Chief Executive Officer of Pleasant
Travel Service, a tour operator specializing in vacations in Hawaii, since April
1959. Mr. Hogan has also served as a Director of Castle & Cooke, which has large
holdings of real estate in Hawaii, since October 1993. Mr. Hogan has been a
member of the Board of Trustees of Loyola Marymount University since May 1990
and is a member of the National Advisory
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Board of the National Academy of Travel and Tourism, the United States Tour
Operators, the American Society of Travel Agents and the Hawaii Visitors Bureau.
Edward C. Lumley has been Vice Chairman of the investment banking firm
Nesbitt Burns, Inc. since August 1994. From January 1992 to August 1994, Mr.
Lumley served as Vice Chairman of the investment banking firm Burns Fry, Limited
Mr. Lumley previously served as a member of the Canadian Parliament and as
Minister of Canada's Ministries of International Trade and Industry, Trade and
Commerce, Communication, and Science and Technology. Mr. Lumley is also a
Director of Air Canada, BCE Mobile Communications, Inc., Canadian National
Company, Magna International Inc., Gendis Inc., DY4 Systems Inc. and AIT
Corporation.
John C. Pope has been the Chairman of the Board of MotivePower Industries,
Inc. since January 1996 and a Director since May 1995. Mr. Pope has served in
various executive positions with UAL Corporation ("UAL") and United Airlines,
Inc. ("United") since January 1988, including President and Chief Operating
Officer of UAL Corporation and United from April 1992 to July 1994, Executive
Vice President, Chief Financial Officer and Treasurer of UAL and Chief Financial
Officer of United from November 1990 to April 1992 and Executive Vice President,
Marketing and Planning of United from May 1989 to October 1990. Prior thereto,
Mr. Pope served as Chief Financial Officer of AMR Corporation and American
Airlines, Inc. Mr. Pope is also a Director of Federal-Mogul Corporation, Wallace
Computer Services, Inc., Medaphis Corporation, Lamalie Associates, Inc. and
Waste Management, Inc.
John P. Tierney was the Chairman and Chief Executive Officer of Chrysler
Financial Corporation, the financial services subsidiary of Chrysler, from
August 1987 until his retirement in December 1994. Prior to joining Chrysler in
1987, he was the Chief Financial Officer of AMC. Mr. Tierney is also a Director
of the American Financial Services Association, the ContiFinancial Corporation
and Charter One Financial, Inc.
Edward L. Wax has been Chairman of Saatchi & Saatchi Advertising Worldwide,
an advertising firm with considerable experience in the travel industry, since
May 1997. Mr. Wax was Chief Executive Officer of Saatchi & Saatchi Advertising
Worldwide from February 1992 to May 1997. From June 1989 to February 1992, Mr.
Wax served as Chairman and Chief Financial Officer of Saatchi & Saatchi North
America. Mr. Wax is also a Director of Golf Trust of America, Inc., the National
Council of Northeastern University and The Ad Council.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Company anticipates that it will have a Board of Directors consisting
of nine members after the Offering, a majority of whom will be "independent" as
defined under its By-Laws. In general, the By-Laws provide that an independent
director is someone who is not (i) employed by the Company (and has not been an
employee within five years prior to nomination) or (ii) affiliated with an
entity having a business relationship with the Company requiring disclosure
under various proxy rules. The Company has agreed to nominate a person
designated by Chrysler as a director of the Company so long as Chrysler is
providing credit support to the Group. See "Continuing Relationship with
Chrysler." Directors are elected to serve until the next annual meeting of
stockholders and until their successors are elected and qualified. Officers of
the Company are elected by and serve at the discretion of the Board of
Directors.
The Company's Board of Directors will establish a compensation committee
(the "Compensation Committee") and an audit committee (the "Audit Committee")
upon completion of the Offering. Both committees would be comprised solely of
independent directors. The Company anticipates that the members of the
Compensation Committee also would qualify as "outside directors" within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended. In
addition, the Board of Directors is expected to establish a corporate governance
committee (the "Governance Committee") which may include directors who are
officers of the Company as well as independent directors. The Compensation
Committee will establish remuneration levels for certain officers of Dollar
Thrifty Group and review the effectiveness of the Company's employee benefit
programs and executive compensation programs. The Audit Committee will select
and engage, on behalf of the Company, the independent public accountants to
audit the Company's annual financial statements. The Audit Committee also will
review and approve the planned scope of the annual audit. The Governance
Committee will identify for consideration nominees to serve as directors of the
Company and review and make recommendations concerning other corporate
governance matters.
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The Board of Directors may establish, from time to time, certain other
committees to facilitate the management of the Company.
DIRECTOR COMPENSATION
Directors who are not officers or employees of the Group or any of its
affiliates will be paid an annual board retainer of $20,000, payable in shares
of common stock, and an attendance fee of $1,000 for each meeting of the Board
of Directors and $1,000 for each meeting of a committee thereof ($1,500 in the
case of a committee chairman), in each case payable in cash. Each non-employee
director will also receive the use of a new vehicle each year while serving as a
director.
In addition, upon completion of the Offering non-employee directors will
receive options to purchase 3,000 shares of common stock. Thereafter,
non-employee directors will receive identical grants each year upon their re-
election at the annual meeting of stockholders. Such stock options will be
exercisable in three equal annual installments beginning on the first
anniversary of the grant date at a price equal to the fair market value of a
share of common stock on the grant date. The stock options would become
exercisable immediately in the event of a change in control of the Company.
The Company will not pay any compensation for service as a director to
directors who receive compensation as officers or employees of the Company or
any of its affiliates.
EXECUTIVE COMPENSATION
Joseph E. Cappy has served as an officer of both the Company and Chrysler
and, for periods prior to the completion of the Offering, has received and will
receive all of his compensation from Chrysler. He will retire as an officer of
Chrysler upon completion of the Offering. The Company expects that, following
completion of the Offering, Mr. Cappy will receive an annual base salary of
$450,000 and an award of stock options and performance shares under the
Company's long-term incentive plan described below. The Company anticipates that
he will be eligible to receive an annual cash bonus based on performance. See
Notes 9 and 12 of Notes to Unaudited Pro Forma Consolidated Financial
Statements.
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation earned by certain executive
officers of the Group for the fiscal year ended December 31, 1996.
<TABLE>
<CAPTION>
Annual Compensation
------------------------------------- Long Term Compensation
ALL OTHER -----------------------
NAME SALARY BONUS COMPENSATION(a) AWARDS(c) Payouts(d)
- ------------------------------------------------- -------- -------- ------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Joseph E. Cappy,................................. -- -- -- -- --
Chairman of the Board,
Chief Executive Officer
and President(b)
Gary L. Paxton,.................................. $248,000 $242,500 $32,832 $ 139,500 $ 90,725
Executive Vice President
and President - Dollar
Donald M. Himelfarb,............................. 227,000 103,853 28,560 62,312 74,146
Executive Vice President
and President - Thrifty
Steven B. Hildebrand,............................ 163,000 66,658 20,076 34,801 48,474
Vice President, Chief
Financial Officer and
Treasurer
</TABLE>
- -------------------------
(a) Represents the Group's contributions to its qualified and non-qualified
defined contribution plans.
(b) As described above, Mr. Cappy has served as an officer of the Company and
Chrysler and, for periods prior to completion of the Offering, has received
and will receive all of his compensation from Chrysler.
(c) Represents amounts earned with respect to the year ended December 31, 1996
under the Group's executive retention plan payable in three equal annual
installments commencing December 1997.
(d) Represents amounts distributed under the Group's executive retention plan
with respect to awards earned prior to the year ended December 31, 1996.
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LONG-TERM INCENTIVE PLAN
The Company anticipates adopting a long-term incentive plan (the "LTIP"),
effective upon completion of the Offering. The LTIP is intended to provide
incentives to officers and other key employees of Dollar Thrifty Group that
serve to align their interests with those of stockholders. Under the LTIP, the
Board of Directors or the Compensation Committee would be authorized to award:
(1) stock options (including both non-qualified stock options and "incentive
stock options"), (2) stock appreciation rights, (3) restricted stock, (4)
performance share awards and (5) other stock-based incentive awards. The LTIP
would be intended to qualify for the performance-based exclusion from the
deduction limitation of Section 162(m) of the Internal Revenue Code of 1986, as
amended.
Initially, 10% of the shares of the Company's common stock outstanding upon
completion of the Offering (expected to be 2,250,000 shares, or 2,587,500 shares
if the over-allotment option granted to the U.S. Underwriters and the Managers
is exercised in full) would be authorized for issuance under the LTIP.
The Company anticipates that initial awards of up to an aggregate of 6% of
the shares then outstanding would be made after completion of the Offering. The
initial awards would consist of stock options and performance shares.
Initial stock option awards are expected to be granted to approximately 170
employees, including each of the named executive officers, at an exercise price
per share equal to the public offering price. Such options would become
exercisable in three equal annual installments commencing on the first
anniversary of the grant date. Under certain circumstances, including a change
of control of the Company, the options would be exercisable immediately.
In addition, initial performance share awards are expected to be granted to
Company officers and certain key employees, including each of the named
executive officers. Such awards would establish a target number of shares that
may be earned in three equal annual installments commencing on the first
anniversary of the grant date. The number of performance shares ultimately
earned by a grantee would be expected to range from zero to 200% of the
grantee's target award, depending on the level of corporate performance each
year against business plan and stock price appreciation targets established on
the grant date. Any performance share installments not earned as of a given
anniversary date would be forfeited. Performance shares earned would be
delivered to the grantee on the third anniversary of the initial grant date,
provided the grantee is then employed by a member of the Group. Under certain
circumstances, including a change of control of the Company, the performance
shares earned would be delivered immediately.
CERTAIN TRANSACTIONS
Thomas P. Capo, who will continue to serve as a director of the Company
following completion of the Offering, is the Vice President and Treasurer of
Chrysler. After the Offering, Chrysler will have certain continuing financial
and commercial arrangements with the Group. See "Continuing Relationship with
Chrysler."
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DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company consists of 50 million shares
of common stock, par value $.01 per share, and 10 million shares of preferred
stock, $.01 par value per share. Of the 50 million shares of common stock,
22,500,000 shares are being offered in the Offering (25,875,000 shares if the
over-allotment option granted to the U.S. Underwriters and the Managers is
exercised in full) and 2,250,000 shares (2,587,500 shares if the over-allotment
option is exercised in full) are being reserved for issuance under the LTIP.
Upon completion of the Offering, no shares of preferred stock will be issued and
outstanding. The following summary description of the capital stock of the
Company is not necessarily complete and reference is hereby made to the
Company's Certificate of Incorporation filed with the registration statement of
which this Prospectus forms a part and to Delaware corporate law.
COMMON STOCK
VOTING RIGHTS
The holders of common stock have one vote per share. Holders are not
entitled to vote cumulatively for the election of directors. Generally, all
matters to be voted on by stockholders must be approved by a majority (or, in
the case of election of directors, by a plurality) of the votes entitled to be
cast by all shares of common stock present in person or represented by proxy,
voting together as a single class, subject to any voting rights granted to
holders of any then outstanding preferred stock. Except as otherwise provided by
law, amendments to the Company's Certificate of Incorporation must be approved
by a majority of the voting power of the common stock.
DIVIDENDS
Holders of common stock will share ratably in any dividend declared by the
Board of Directors, subject to the preferential rights of any preferred stock
then outstanding. Dividends consisting of shares of common stock may be paid to
holders of shares of common stock.
OTHER RIGHTS
In the event of any merger or consolidation of the Company with or into
another company in connection with which shares of common stock are converted
into or exchangeable for shares of stock, other securities or property
(including cash), all holders of common stock will be entitled to receive the
same kind and amount, on a per share of common stock basis, of such shares of
stock and other securities and property (including cash).
On liquidation, dissolution or winding up of the Company, all holders of
common stock are entitled to share ratably in any assets available for
distribution to holders of shares of common stock. No shares of common stock are
subject to redemption or have preemptive rights to purchase additional shares of
common stock.
Upon consummation of the Offering, all the outstanding shares of common
stock will be legally issued, fully paid and nonassessable.
PREFERRED STOCK
The Company's Certificate of Incorporation provides that shares of
preferred stock may be issued from time to time in one or more series. The
Company's Board of Directors is authorized to fix the voting rights, if any,
designations, powers, preferences, qualifications, limitations or restrictions
thereof, applicable to the shares of each series. The Board of Directors may,
without stockholder approval, issue preferred stock with voting and other rights
that could adversely affect the voting power and other rights of the holders of
the common stock and could have certain anti-takeover effects. The Company has
no present plans to issue any shares of preferred stock. The ability of the
Board of Directors to issue preferred stock without stockholder approval could
have the
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effect of delaying, deferring or preventing a change of control of the Company
or the removal of existing management.
CERTAIN ANTI-TAKEOVER PROVISIONS
SECTION 203
The Company is subject to Section 203 of the Delaware General Corporation
Law, which prohibits a publicly held Delaware corporation from consummating a
"business combination," except under certain circumstances, with an "interested
stockholder" for a period of three years after the date such person became an
"interested stockholder" unless (i) before such person became an interested
stockholder, the board of directors of the corporation approved the transaction
in which the interested stockholder became an interested stockholder or approved
the business combination; (ii) upon consummation of the transaction that
resulted in the interested stockholder's becoming an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding shares held by
directors who are also officers of the corporation and certain shares held by
employee stock plans); or (iii) following the transaction in which such person
became an interested stockholder, the business combination is approved by the
board of directors of the corporation and authorized at a meeting of
stockholders by the affirmative vote of the holders of 66 2/3% of the
outstanding voting stock of the corporation not owned by the interested
stockholder. The term "interested stockholder" generally is defined as a person
who, together with affiliates and associates, owns (or, within the prior three
years, owned) 15% or more of a corporation's outstanding voting stock. The term
"business combination" includes mergers, asset sales and certain other
transactions resulting in a financial benefit to an interested stockholder.
Section 203 makes it more difficult for an "interested stockholder" to effect
various business combinations with a corporation for a three-year period. A
Delaware corporation may "opt out" of Section 203 with an express provision in
its original certificate of incorporation or an express provision in its
certificate of incorporation or by-laws resulting from an amendment approved by
holders of at least a majority of the outstanding voting shares. The Company has
not "opted out" of Section 203.
INDEMNIFICATION MATTERS
The Company's Certificate of Incorporation provides that directors of the
Company will not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director except to the extent
such exemption from liability or limitation thereof is not permitted under the
Delaware General Corporation Law. The Company's Certificate of Incorporation
provides that the Company shall indemnify its directors and officers and has the
right to indemnify its employees and other agents, to the fullest extent
provided by Delaware law, against certain liabilities that may arise by reason
of their status or service as directors, officers, employees or agents of the
Company or of another entity at the request of the Company (other than
liabilities arising from actions not taken in good faith or conduct that the
person had reasonable cause to believe was unlawful). The Company shall advance
expenses incurred by indemnified individuals as a result of any proceeding
against them as to which they are entitled to be indemnified. The Company also
has directors' and officers' insurance against certain liabilities.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers or persons controlling the Company as described above, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act and is
therefore unenforceable.
At present, there is no pending material litigation or proceeding involving
any director, officer, employee or agent of the Company where indemnification
will be required or permitted.
BY-LAW PROVISIONS
The Company's By-Laws provide that special meetings of the stockholders may
be called only by the Board of Directors, the Chairman of the Board or a Vice
Chairman of the Board. The By-Laws also provide for an advance notice procedure
for the nomination, other than by or at the direction of the Board of Directors,
of candidates for election as directors as well as for other stockholder
proposals to be considered at annual meetings
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of stockholders. In general, notice of intent to nominate a director or raise
matters at such meetings must be received in writing by the Company not less
than 60 nor more than 90 days prior to the anniversary of the previous year's
annual meeting of stockholders, and must contain certain information concerning
the person to be nominated or the matters to be brought before the meeting and
concerning the stockholder submitting the proposal. These provisions would make
it more difficult for a third party to gain control of the Company. The By-Laws
also provide that any action which may be taken at any meeting of stockholders
may be taken without a meeting, without prior notice and without a vote, if
written consents approving the action are signed by the holders of outstanding
shares having not less than the minimum number of votes that would be necessary
to take such action at a meeting of stockholders.
TRADING ON THE NEW YORK STOCK EXCHANGE
The common stock has been approved for listing on the New York Stock
Exchange under the symbol DTG.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock will be .
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DESCRIPTION OF CERTAIN INDEBTEDNESS
Concurrently with the completion of the Offering, the Company, Dollar and
Thrifty will enter into the Revolving Credit Facility and a finance subsidiary
of the Company will issue the New Medium Term Notes. In addition, the Company
expects to establish the Commercial Paper Program backed by the Liquidity
Facility in the first quarter of 1998. The following is a summary of the
material terms or anticipated material terms of these facilities. Although the
material provisions described below have been accurately summarized, statements
contained herein concerning the provisions of any documents are not necessarily
complete, and in each instance reference is made to the form of such document to
be filed as an exhibit to the Registration Statement. Each such statement is
qualified in its entirety by such reference.
REVOLVING CREDIT FACILITY
The Revolving Credit Facility will consist of a five-year senior secured
revolving credit facility in the amount of $215 million. The Revolving Credit
Facility will provide that (i) up to $190 million will be available for letters
of credit and (ii) up to $70 million will be available for loans. The Group may
not, however, have more than $215 million of combined borrowings and letters of
credit outstanding under the Revolving Credit Facility. With certain exceptions,
the Company and each of its direct and indirect material subsidiaries will
guarantee the Revolving Credit Facility. The Company, Dollar and Thrifty will
use a substantial portion of the Revolving Credit Facility at the time of the
completion of the Offering. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital Resources
- -- Financing Plan -- Revolving Credit Facility." All letters of credit and loans
under the Revolving Credit Facility will mature by the fifth anniversary of the
date of the facility.
Interest will accrue on borrowings outstanding under the Revolving Credit
Facility, at the borrower's option, at a rate equal to (i) either the higher of
(A) the interest rate established by Credit Suisse First Boston as its base or
prime rate and (B) the federal funds effective rate plus 0.5%, plus a margin or
(ii) the rate at which Eurodollar deposits for one, two, three or six months (as
selected by the borrower) are offered by Credit Suisse First Boston in the
relevant interbank Eurodollar market, plus a margin. The Revolving Credit
Facility will also require the Company to pay a commitment fee, a letter of
credit fee on the aggregate amount available under outstanding letters of
credit, and a letter of credit fronting fee.
The Revolving Credit Facility will be secured, with limited exceptions, by
(a) a lien on the material assets of the Group (other than assets that are
pledged as security in respect of vehicle fleet financing programs); (b) a
subordinated lien on vehicles and related assets that are subject to one or more
finance leases pledged as collateral under the Group's vehicle fleet financing
programs; and (c) as to certain advances under letters of credit issued to
support the Group's vehicle fleet financing programs, a lien on the assets
securing the Commercial Paper Facility. Pursuant to the Chrysler Credit Support
Agreement, Chrysler will have liens on certain of these assets. See "-- Chrysler
Credit Support Agreement."
The Revolving Credit Facility will contain a number of affirmative
covenants, including covenants that require the Company, Dollar and Thrifty to
deliver financial statements and other reports; pay other obligations; maintain
corporate existence; comply with laws and contracts; maintain properties and
insurance; maintain books and records; grant the lenders certain inspection
rights; provide notices of defaults, litigation and material events; and comply
with environmental matters. The Revolving Credit Facility will also contain a
number of negative covenants, including limitations on indebtedness (including
preferred stock), liens, guarantee obligations, mergers, consolidations,
liquidations and dissolutions, sales of assets, leases, dividends and other
payments in respect of capital stock, capital expenditures, investments, loans
and advances, payments and modifications of subordinated and other debt
instruments, transactions with affiliates, changes in fiscal year, negative
pledge clauses, and changes in lines of business.
The Company, Dollar and Thrifty will be required under the Revolving Credit
Facility to meet certain financial covenants, consisting of (a) a minimum net
worth; (b) a minimum adjusted EBITDA; (c) a minimum fixed charge ratio; (d) a
maximum leverage ratio; and (e) a minimum interest coverage ratio.
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The Revolving Credit Facility will include certain events of default,
including nonpayment of principal when due; nonpayment of interest, fees or
other amounts after a grace period; material inaccuracy of representations and
warranties; violation of covenants (subject, in the case of certain affirmative
covenants, to a period to cure such violations); cross-default; bankruptcy
events; certain ERISA events; material judgments; actual or asserted invalidity
of any guarantee or security document, subordination provision or security
interest; termination of, and the failure to replace, vehicle fleet financing
programs; and a change of control of the Company.
CHRYSLER CREDIT SUPPORT AGREEMENT
As part of the Financing Plan, Chrysler will provide credit support for the
Group's fleet financing in the form of a letter of credit facility. The credit
support will start at $50 million, but will be reduced to the extent the Company
receives more than $10 million in net proceeds from the exercise of the
over-allotment option. If those proceeds are $60 million or more, Chrysler's
credit support would be eliminated. The Initial Support Amount will decline
annually, beginning September 30, 1999, by the greater of 20% of the Initial
Support Amount and 50% of the Group's excess cash flow. The Company may need to
replace reductions in the Initial Support Amount with cash from operations or
with borrowings or letters of credit under the Revolving Credit Facility. To
secure reimbursement obligations under the Chrysler Credit Support Agreement,
Chrysler will have liens on certain assets of the Group.
FLEET FINANCING FACILITIES
NEW MEDIUM TERM NOTES
Dollar Thrifty Group has outstanding medium term notes under an existing
asset backed note program. The Group will expand this program through the
issuance of $900 million principal amount of New Medium Term Notes. The New
Medium Term Notes will be secured by vehicles in the Group's fleet, by the
Group's rights to payment under automotive manufacturers' residual value
programs, by credit enhancement (including letters of credit issued under the
Revolving Credit Facility and letters of credit provided by Chrysler pursuant to
the Chrysler Credit Support Agreement) and by other collateral.
The New Medium Term Notes will have maturities ranging from three years to
seven years and will bear interest at fixed rates ranging from % to % per
annum.
The Group may from time to time issue additional series of asset backed
notes, at fixed or floating interest rates.
The agreements governing the asset backed note program include a number of
covenants that, among other things, restrict the ability of the Group's finance
subsidiary that is issuing the asset backed notes to create a lien on any of its
assets; incur indebtedness; engage in mergers; sell, lease or otherwise dispose
of any assets; acquire assets; declare or pay dividends; and make loans. In
addition, under such agreements, each of Dollar and Thrifty covenants to do all
things necessary to maintain its corporate existence, maintain complete and
accurate books and records, comply with all of its obligations under certain
vehicle depreciation and repurchase programs, comply with certain reporting
requirements, pay when due all taxes and other assessments, comply with all
requirements of law related to its businesses, maintain a separate corporate
existence, maintain certain computer files regarding liens, maintain property
useful and necessary in its business in good working order and condition, and
provide certain agents of the noteholders reasonable access to documents
regarding the collateral for the asset backed notes. Such agreements, moreover,
restrict the ability of each of Dollar and Thrifty to enter into any agreements
that would be violated by its performance under those documents, create liens on
its properties, use Program Vehicles for certain purposes, or use certain funds
for the acquisition or financing of vehicles. A default under any of these
covenants could result in acceleration of the notes, foreclosure against the
collateral or the enforcement against the Group of other rights under the
relevant agreements and applicable law.
COMMERCIAL PAPER PROGRAM AND LIQUIDITY FACILITY
The Company expects to establish, in the first quarter of 1998, the
Commercial Paper Program of up to $615 million through a finance subsidiary and
as part of its existing asset backed note program. The Company will use
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$255 million of the proceeds to refinance the portion of the Group's outstanding
asset backed notes that amortizes from September 1998 to February 1999. The
Company will use the remaining amounts available under the Commercial Paper
Program for fleet financing and to refinance asset backed notes from time to
time.
The commercial paper issued under the Commercial Paper Program will be
secured by vehicles in the Group's fleet, by the Group's rights to payments
under automotive manufacturers' residual value programs for the fleet, by credit
enhancement (including letters of credit issued under the Revolving Credit
Facility and letters of credit provided by Chrysler pursuant to the Chrysler
Credit Support Agreement) and by other collateral.
The Company will be required to establish a $545 million Liquidity Facility
to support the Commercial Paper Program. The Liquidity Facility will provide the
Commercial Paper Program with a backup source of funding if the Company's
finance subsidiary is unable to refinance maturing commercial paper by issuing
new commercial paper. The Liquidity Facility will be backed by the same Program
Vehicles, Non-Program Vehicles and related assets that support the Commercial
Paper Program.
The Company expects to establish the Liquidity Facility on the basis of
underwritten financing commitments from Credit Suisse First Boston (and its
affiliates) and The Chase Manhattan Bank. Establishment of the Liquidity
Facility is subject, among other things, to the commercial paper receiving
credit ratings of A-1 from Standard & Poor's Ratings Service and P-1 from
Moody's Investors Service, Inc. Because the Commercial Paper Program will be
part of the Group's asset backed note program, the agreements governing the
Commercial Paper Program and the Liquidity Facility will include covenants
similar to those contained in the agreements relating to the New Medium Term
Notes described above. Under the terms of such agreements, the Group will not be
able to issue new commercial paper under certain circumstances, including
failure to repay maturing commercial paper or advances under the Liquidity
Facility; breaches of representations or warranties; failure to observe certain
covenants; certain bankruptcy events; downgrade of the rating of the commercial
paper to A-2 or less by Standard & Poor's Ratings Service or P-2 or less by
Moody's Investors Service, Inc.; and defaults under certain of the Group's other
financing agreements, including the Revolving Credit Facility.
Commercial paper will be issued under the Commercial Paper Program at
interest rates prevailing in the market at the time of issuance, and the
Liquidity Facility will require the Company to pay a commitment fee on the
average daily unused portion of the Liquidity Facility. Interest will accrue on
drawings under the Liquidity Facility at floating rates.
CERTAIN U.S. TAX CONSEQUENCES TO
NON-U.S. HOLDERS OF COMMON STOCK
GENERAL
The following is a general discussion of certain U.S. federal income and
estate tax consequences of the acquisition, ownership and disposition of common
stock by a Non-U.S. Holder. For purposes of this discussion, a "Non-U.S. Holder"
is any holder of common stock that is not for U.S. federal income tax purposes
(a) an individual citizen or resident of the United States, (b) a corporation
created or organized in or under the laws of the United States or any political
subdivision thereof, (c) a domestic partnership, (d) an estate the income of
which is includible in gross income for U.S. federal income and estate tax
purposes regardless of its source or (e) a trust if a court within the United
States is able to exercise primary supervision over the administration of such
trust and one or more U.S. persons have the authority to control all substantial
decisions of such trust. This discussion does not address all aspects of U.S.
federal tax that may be relevant to Non-U.S. Holders in light of their specific
circumstances. This discussion is based upon U.S. federal income and estate tax
law now in effect, which is subject to change, possibly retroactively, and is
for general information only. PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR
TAX ADVISORS WITH RESPECT TO THE U.S. FEDERAL INCOME AND ESTATE TAX CONSEQUENCES
TO THEM OF ACQUIRING, HOLDING AND DISPOSING OF COMMON STOCK (INCLUDING THE
INVESTOR'S STATUS AS A NON-U.S. HOLDER), AS WELL AS ANY TAX CONSEQUENCES THAT
MAY ARISE UNDER THE LAWS OF ANY FOREIGN, STATE, LOCAL OR OTHER TAXING
JURISDICTION.
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<PAGE> 75
DISTRIBUTIONS
Distributions on the shares of common stock (other than distributions in
redemption of the shares subject to Section 302(b) of the U.S. Internal Revenue
Code of 1986, as amended (the "Code")) will constitute dividends for U.S.
federal income tax purposes to the extent paid from current or accumulated
earning and profits of the Company (as determined under U.S. federal income tax
principles). Dividends paid to a Non-U.S. Holder will generally be subject to
withholding of U.S. federal income tax at the rate of 30% of the gross amount of
such dividends (or at such lower rate as may be specified by an applicable
income tax treaty) unless such dividends are effectively connected with the
conduct of a trade or business within the United States by the Non-U.S. Holder,
in which case the dividends will be subject to U.S. federal income tax on net
income at regular graduated U.S. federal income tax rates (unless an applicable
income tax treaty provides otherwise). In the case of a Non-U.S. Holder that is
a corporation, such dividends might also be subject to the U.S. branch profits
tax, which is generally imposed on a foreign corporation on the repatriation
from the United States of effectively connected earnings and profits at a 30%
rate (unless the rate is reduced or eliminated by an applicable income tax
treaty and the Non-U.S. Holder is a "qualified resident" of the treaty country).
A Non-U.S. Holder may be required to satisfy certain certification
requirements in order to claim treaty benefits or otherwise obtain any reduction
of or exemption from withholding under the foregoing rules. Under U.S. Treasury
regulations currently in effect, dividends paid to an address outside the United
States are presumed to be paid to a resident of such country for purposes of the
withholding discussed above and for purposes of determining the applicability of
a tax treaty rate (unless the payor has knowledge to the contrary). However,
under amendments to the U.S. Treasury regulations published on October 14, 1997
(the "New Withholding Regulations"), a Non-U.S. Holder is required to satisfy
applicable certification and other requirements to qualify for withholding at an
applicable treaty rate. The New Withholding Regulations generally only apply to
dividends paid after December 31, 1998, subject to certain transitional rules.
SALE OR OTHER DISPOSITION OF COMMON STOCK
A Non-U.S. Holder will generally not be subject to U.S. federal income tax
on gain recognized on a sale or other disposition of common stock unless (i) the
gain is effectively connected with the conduct of a trade or business within the
United States by the Non-U.S. Holder (or by a partnership, trust or estate in
which the Non-U.S. Holder is a partner or beneficiary), (ii) in the case of a
Non-U.S. Holder who is an individual and holds common stock as a capital asset,
such holder is present in the United States for 183 days or more in the taxable
year of the sale or other disposition and certain other conditions are met,
(iii) the Non-U.S. Holder is subject to tax pursuant to the provisions of U.S.
tax law applicable to certain U.S. expatriates whose loss of U.S. citizenship
had as one of its principal purposes the avoidance of U.S. taxes or (iv) the
Company is or becomes a "U.S. real property holding corporation" for U.S.
federal income tax purposes at any time within the shorter of the five-year
period preceding such sale or other disposition and such Non-U.S. Holder's
holding period for the common stock.
A corporation is generally considered to be a U.S. real property holding
corporation if the fair market value of its "U.S. real property interests"
within the meaning of Section 897(c)(1) of the Code equals or exceeds 50% of the
sum of the fair market value of its worldwide real property interests plus the
fair market value of any other of its assets used or held for use in a trade or
business. The Company believes that it is not currently and is not likely to
become a U.S. real property holding corporation. Further, even if the Company
were to become a U.S. real property holding corporation, any gain recognized by
a Non-U.S. Holder still would not be subject to U.S. federal income tax if the
common stock were considered to be "regularly traded" on an established
securities market and the Non-U.S. Holder did not own, directly or indirectly,
at any time during the five-year period ending on the date of the sale or other
disposition, more than 5% of the common stock.
A Non-U.S. Holder described in clause (i) or (iii) of the second preceding
paragraph will generally be taxed on the net gain derived from the sale under
regular graduated U.S. federal income tax rates. In addition, if such Non-U.S.
Holder is a corporation, such net gain might be subject to the U.S. branch
profits tax described under "-- Distributions" above. A Non-U.S. Holder
described in clause (ii) of the second preceding paragraph will be subject to
tax at a flat 30% rate on the gain derived from the sale, which may be offset by
certain U.S. source
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<PAGE> 76
capital losses (unless the gain is effectively connected with the conduct of a
U.S. trade or business within the United States by the Non-U.S. Holder, in which
case it will be taxed under regular graduated U.S. federal income tax rates).
Non-U.S. Holders should consult applicable treaties, which may provide for
different rules (including the exemption of certain capital gains from tax).
BACKUP WITHHOLDING AND REPORTING REQUIREMENTS
Under U.S. Treasury regulations currently in effect, U.S. backup
withholding tax will generally not apply to dividends paid on common stock to a
Non-U.S. Holder at an address outside the United States (unless the payor has
knowledge that the payee is a U.S. person). However, under the New Withholding
Regulations, a Non-U.S. Holder that fails to certify its Non-U.S. Holder status
in accordance with the requirements of the New Withholding Regulations may be
subject to U.S. backup withholding at a rate of 31% on payments of dividends. As
noted above, the New Withholding Regulations generally only apply to dividends
paid after December 31, 1998. The Company must report annually to the Internal
Revenue Service and to each Non-U.S. Holder the amount of dividends paid to, and
the tax withheld with respect to, such holder, regardless of whether any tax was
actually withheld. This information may also be made available to the tax
authorities in the Non-U.S. Holder's country of residence under an applicable
income tax treaty.
Upon the sale or other taxable disposition of common stock by a Non-U.S.
Holder to or through a U.S. office of a broker, the broker must backup withhold
at a rate of 31% and report the sale to the Internal Revenue Service, unless the
holder certifies its Non-U.S. Holder status under penalties of perjury or
otherwise establishes an exemption. In general, backup withholding and
information reporting will not apply to a payment of the proceeds of a sale of
common stock by or through a foreign office of a foreign broker. However, upon
the sale or other taxable disposition of common stock to or through the foreign
office of a U.S. broker, or a foreign broker with certain types of relationships
to the United States, the broker must report the sale to the Internal Revenue
Service (but not backup withhold) unless the broker has documentary evidence in
its files that the seller is a Non-U.S. Holder and/or certain other conditions
are met, or the holder otherwise establishes an exemption. Amounts withheld
under the backup withholding rules are generally allowable as a refund or credit
against such Non-U.S. Holder's U.S. federal income tax liability, if any,
provided that the required information is furnished to the Internal Revenue
Service.
Non-U.S. Holders should consult their tax advisors regarding the
application of these rules to their particular situations, the availability of
an exemption therefrom, the procedure for obtaining such an exemption, if
available, and the application of the New Withholding Regulations that, among
other things, unify current certification procedures and forms and clarify
reliance standards.
FEDERAL ESTATE TAX
Common stock owned or treated as owned by an individual non-U.S. Holder at
the time of death will be included in such individual's estate for U.S. federal
estate tax purposes and be subject to such tax, except to the extent that an
applicable estate tax treaty provides otherwise.
75
<PAGE> 77
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement, dated , 1997 (the "U.S. Underwriting Agreement"), the
underwriters named below (the "U.S. Underwriters"), for whom Credit Suisse First
Boston Corporation, Goldman, Sachs & Co., J.P. Morgan Securities Inc. and
Salomon Brothers Inc are acting as representatives (the "Representatives"), have
severally but not jointly agreed to purchase from Chrysler and the Company the
following respective numbers of U.S. Shares (as defined below):
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER U.S. SHARES
------------------------------------------------------------------------ -----------
<S> <C>
Credit Suisse First Boston Corporation..................................
Goldman, Sachs & Co. ...................................................
J.P. Morgan Securities Inc. ............................................
Salomon Brothers Inc ...................................................
-----------
Total.............................................................. 19,125,000
=========
</TABLE>
Of the 22,500,000 shares of common stock being offered, 19,125,000 shares
(the "U.S. Shares") are initially being offered by the U.S. Underwriters in the
United States and Canada (the "U.S. Offering") and 3,375,000 shares (the
"International Shares") are initially being concurrently offered by the Managers
(the "Managers") outside the United States and Canada (the "International
Offering").
The U.S. Underwriting Agreement provides that the obligations of the U.S.
Underwriters are subject to certain conditions precedent and that the U.S.
Underwriters will be obligated to purchase all the U.S. Shares offered hereby
(other than those shares covered by the over-allotment option described below)
if any are purchased. The U.S. Underwriting Agreement provides that, in the
event of a default by a U.S. Underwriter, in certain circumstances the purchase
commitments of non-defaulting U.S. Underwriters may be increased or the U.S.
Underwriting Agreement may be terminated.
The Company and Chrysler have entered into a Subscription Agreement with
the Managers of the International Offering providing for the concurrent offer
and sale of the International Shares outside the United States and Canada. The
closing of the U.S. Offering is a condition to the closing of the International
Offering and vice versa.
The Company has granted to the U.S. Underwriters and the Managers an
option, exercisable by Credit Suisse First Boston Corporation, expiring at the
close of business on the 30th day after the date of this Prospectus, to purchase
up to 3,375,000 additional shares at the initial public offering price, less the
underwriting discounts and commissions. Such option may be exercised only to
cover over-allotments, if any, in the sale of the shares offered hereby. To the
extent that this option to purchase is exercised, each U.S. Underwriter and each
Manager will become obligated to purchase approximately the same percentage of
additional shares being sold to the U.S. Underwriters and the Managers as the
number of U.S. Shares set forth next to such U.S. Underwriter's name in the
preceding table and as the number set forth next to such Manager's name in the
corresponding table in the prospectus relating to the International Offering
bears to the sum of the total number of shares in such tables.
The Company and Chrysler have been advised by the Representatives that the
U.S. Underwriters propose to offer the U.S. Shares in the United States to the
public, and in Canada on a private placement basis, initially at the offering
price set forth on the cover page of this Prospectus and, through the
Representatives, to certain dealers at such price less a concession of $ per
share, and the U.S. Underwriters and such dealers may allow a discount of $
per share on sales to certain other dealers. After the initial public offering,
the public offering price and concession and discount to dealers may be changed
by the Representatives.
The public offering price, the aggregate underwriting discounts and
commissions per share and the per share concession and discount to dealers for
the U.S. Offering and the concurrent International Offering will be identical.
Pursuant to an Agreement between the U.S. Underwriters and the Managers (the
"Intersyndicate Agreement") relating to the Offering, changes in the public
offering price, the aggregate underwriting discounts and commissions per share
and the per share concession and discount to dealers will be made only upon the
76
<PAGE> 78
mutual agreement of Credit Suisse First Boston Corporation, on behalf of the
U.S. Underwriters, and Credit Suisse First Boston (Europe) Limited ("CSFBL"), on
behalf of the Managers.
Pursuant to the Intersyndicate Agreement, each of the U.S. Underwriters has
agreed that, as part of the distribution of the U.S. Shares and subject to
certain exceptions, it has not offered or sold, and will not offer or sell,
directly or indirectly, any shares or distribute any prospectus relating to the
shares to any person outside the United States or Canada or to any other dealer
who does not so agree. Each of the Managers has agreed or will agree that, as
part of the distribution of the International Shares and subject to certain
exceptions, it has not offered or sold, and will not offer or sell, directly or
indirectly, any shares or distribute any prospectus relating to the shares in
the United States or Canada or to any other dealer who does not so agree. The
foregoing limitations do not apply to stabilization transactions or to
transactions between the U.S. Underwriters and the Managers pursuant to the
Intersyndicate Agreement. As used herein, "United States" means the United
States of America (including the States and the District of Columbia), its
territories, possessions and other areas subject to its jurisdiction. "Canada"
means Canada, its provinces, territories, possessions and other areas subject to
its jurisdiction, and an offer or sale shall be in the United States or Canada
if it is made to (i) any individual resident in the United States or Canada; or
(ii) any corporation, partnership, pension, profit-sharing or other trust or
other entity (including any such entity acting as an investment adviser with
discretionary authority) whose office most directly involved with the purchase
is located in the United States or Canada.
Pursuant to the Intersyndicate Agreement, sales may be made between the
U.S. Underwriters and the Managers of such number of shares as may be mutually
agreed upon. The price of any shares so sold will be the public offering price,
less such amount as may be mutually agreed upon by Credit Suisse First Boston
Corporation, on behalf of the U.S. Underwriters, and CSFBL, on behalf of the
Managers, but not exceeding the selling concession applicable to such shares. To
the extent there are sales between the U.S. Underwriters and the Managers
pursuant to the Intersyndicate Agreement, the number of shares initially
available for sale by the U.S. Underwriters or by the Managers may be more or
less than the amount appearing on the cover page of this Prospectus. Neither the
U.S. Underwriters nor the Managers are obligated to purchase from the other any
unsold shares.
The Company and certain officers and directors of the Group have agreed
that, other than in connection with grants to be made by the Company under the
LTIP, they will not offer, sell, contract to sell, announce an intention to
sell, pledge or otherwise dispose of, directly or indirectly, or file or cause
to be filed with the Securities and Exchange Commission a registration statement
under the Securities Act relating to, any additional shares of the Company's
common stock or securities or other rights convertible into or exchangeable or
exercisable for any shares of the Company's common stock, or disclose the
intention to make any such offer, sale, pledge, disposal or filing, without the
prior written consent of Credit Suisse First Boston Corporation, until 180 days
after the date of the Offering.
The Company and Chrysler have agreed to indemnify the U.S. Underwriters and
the Managers against certain liabilities, including civil liabilities under the
Securities Act, or to contribute to payments that the U.S. Underwriters and the
Managers may be required to make in respect thereof. The Company and Chrysler
have agreed to indemnify each other against certain liabilities, including civil
liabilities under the Securities Act, or to contribute to payments that the
other may be required to make in respect thereof.
The Representatives and the Managers have informed the Company and Chrysler
that they do not expect discretionary sales by the U.S. Underwriters and the
Managers to exceed 5% of the number of shares offered hereby.
Prior to the Offering, there has been no public market for the shares. The
initial public offering price for the shares will be determined by negotiations
among the Company, Chrysler and the Representatives. In determining such price,
consideration will be given to various factors, including market conditions for
initial public offerings, the history of and prospects for the Group's business,
the past and present operations of the Group, the past and present earnings and
current financial position of the Group, an assessment of the Group's
management, the market for securities of companies in businesses similar to
those of the Group, the general condition of the securities markets and other
relevant factors. There can be no assurance that the initial public offering
price will
77
<PAGE> 79
correspond to the price at which the shares will trade in the public market
subsequent to the Offering or that an active trading market for the shares will
develop and continue after the Offering.
The Representatives, on behalf of the U.S. Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange Act
of 1934, as amended. Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position. Stabilizing
transactions permit bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the shares in the open market after the
distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the Representatives to reclaim a selling concession from a
syndicate member when the shares originally sold by such syndicate member are
purchased in a syndicate covering transaction to cover syndicate short
positions. Such stabilizing transactions, syndicate covering transactions and
penalty bids may cause the price of the shares to be higher than it would
otherwise be in the absence of such transactions. These transactions may be
effected on the New York Stock Exchange or otherwise and, if commenced, may be
discontinued at any time.
Certain of the U.S. Underwriters and Managers have from time to time
performed, and continue to perform, financial advisory, investment banking and
commercial banking services for companies in the Dollar Thrifty Group or
Chrysler, for which customary compensation has been received. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources -- Financing Plan."
78
<PAGE> 80
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the common stock in Canada is being made only on a
private placement basis exempt from the requirement that the Company and
Chrysler prepare and file a prospectus with the securities regulatory
authorities in each province where trades of common stock are effected.
Accordingly, any resale of the common stock in Canada must be made in accordance
with applicable securities laws which will vary depending on the relevant
jurisdiction, and which may require resales to be made in accordance with
available statutory exemptions or pursuant to a discretionary exemption granted
by the applicable Canadian securities regulatory authority. Purchasers are
advised to seek legal advice prior to any resale of the common stock.
REPRESENTATIONS OF PURCHASERS
Each purchaser of common stock in Canada who receives a purchase
confirmation will be deemed to represent to the Company and Chrysler and the
dealer from whom such purchase confirmation is received that (i) such purchaser
is entitled under applicable provincial securities laws to purchase such common
stock without the benefit of a prospectus qualified under such securities laws,
(ii) where required by law, such purchaser is purchasing as principal and not as
agent, and (iii) such purchaser has reviewed the text above under "Resale
Restrictions."
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of action for damages or rescission or rights of action under
the civil liability provisions of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the Company's directors and officers as well as the experts named
herein and Chrysler may be located outside of Canada and, as a result, it may
not be possible for Canadian purchasers to effect service of process within
Canada upon the issuer or such persons. All or a substantial portion of the
assets of the Company, Chrysler and such persons may be located outside of
Canada and, as a result, it may not be possible to satisfy a judgment against
the Company, Chrysler or such persons in Canada or to enforce a judgment
obtained in Canadian courts against the Company, Chrysler or such persons
outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of common stock to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
common stock acquired by such purchaser pursuant to the Offering. Such report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from the Company. Only one
such report must be filed in respect of common stock acquired on the same date
and under the same prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of common stock should consult their own legal and tax
advisers with respect to the tax consequences of an investment in the common
stock in their particular circumstances and with respect to the eligibility of
the common stock for investment by the purchaser under relevant Canadian
legislation.
79
<PAGE> 81
LEGAL MATTERS
The validity of the shares of the common stock offered hereby will be
passed upon for the Company by Debevoise & Plimpton, New York, New York, and for
the U.S. Underwriters and the Managers by Cleary, Gottlieb, Steen & Hamilton,
New York, New York. Debevoise & Plimpton and Cleary, Gottlieb, Steen & Hamilton
have in the past provided, and may continue to provide, legal services to
Chrysler and its affiliates. Debevoise & Plimpton has also represented Chrysler
in connection with the Offering and the Financing Plan.
EXPERTS
The consolidated financial statements of Dollar Thrifty Automotive Group,
Inc. and subsidiaries (successor to Pentastar Transportation Group, Inc. and
subsidiaries) as of December 31, 1995 and 1996 and for each of the three years
in the period ended December 31, 1996 included in this Prospectus, and the
related financial statement schedule included in the Registration Statement
filed with the Securities and Exchange Commission for the registration of the
common stock offered hereby, have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports appearing herein and elsewhere
in the Registration Statement, and have been so included in reliance upon the
reports of such firm given upon their authority as experts in accounting and
auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission a
registration statement on Form S-1 (together with all amendments, exhibits,
schedules and supplements thereto, the "Registration Statement"), under the
Securities Act and the rules and regulations thereunder, for the registration of
the Common Stock offered hereby. This Prospectus, which forms a part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement, certain parts of which have been omitted as permitted by
SEC rules and regulations. For further information with respect to Dollar
Thrifty Group and the Common Stock offered hereby, you should refer to the
Registration Statement. Statements contained in this Prospectus as to the
contents of any contract or other document referred to herein are not
necessarily complete. Where such contract or other document is an exhibit to the
Registration Statement, each such statement is qualified in all respects by the
provisions of such exhibit, to which reference is hereby made.
The Registration Statement can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
at Seven World Trade Center, 13th Floor, New York, New York 10048 and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of all or any portion of the Registration Statement can
be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, the
Registration Statement is publicly available through the Commission's site on
the Internet's World Wide Web, located at http://www.sec.gov.
As a result of the Offering, the Company will become subject to the full
informational requirements of the Securities Exchange Act of 1934, as amended.
The Company will fulfill its obligations with respect to such requirements by
filing periodic reports and other information with the Commission. It intends to
furnish its shareholders with annual reports containing consolidated financial
statements certified by an independent public accounting firm.
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<PAGE> 82
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Unaudited Consolidated Financial Statements:
Consolidated Balance Sheet at September 30, 1997..................................... F-2
Consolidated Statement of Operations for the Nine Months ended September 30, 1996 and
1997.............................................................................. F-3
Consolidated Statement of Cash Flows for the Nine Months ended September 30, 1996 and
1997.............................................................................. F-4
Notes to the Unaudited Consolidated Financial Statements............................. F-5
Audited Consolidated Financial Statements:
Independent Auditors' Report......................................................... F-6
Consolidated Balance Sheet at December 31, 1995 and 1996............................. F-7
Consolidated Statement of Operations for the Years Ended December 31, 1994, 1995 and
1996.............................................................................. F-8
Consolidated Statement of Stockholder's Equity for the Years Ended December 31, 1994,
1995 and 1996..................................................................... F-9
Consolidated Statement of Cash Flows for the Years Ended December 31, 1994, 1995, and
1996.............................................................................. F-10
Notes to Consolidated Financial Statements........................................... F-11
</TABLE>
F-1
<PAGE> 83
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Cash and cash equivalents................................... $ 5,164
Restricted cash and investments............................. 28,487
Accounts and notes receivable, net.......................... 83,667
Due from Parent............................................. 75,243
Prepaid expenses and other assets........................... 25,450
Revenue-earning vehicles, net............................... 1,500,864
Property and equipment, net................................. 59,907
Intangible assets, net...................................... 200,198
----------
$1,978,980
==========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Accounts payable.......................................... $ 40,812
Accrued liabilities....................................... 88,600
Income taxes payable...................................... 9,635
Public liability and property damage...................... 73,967
Debt and other obligations................................ 1,542,742
Deferred income taxes..................................... 15,238
----------
Total liabilities...................................... 1,770,994
COMMITMENTS AND CONTINGENCIES (Note 3)
STOCKHOLDER'S EQUITY:
Preferred stock, $.01 par value:
Authorized 10,000,000 shares; none outstanding......... --
Common stock, $.01 par value:
Authorized 50,000,000 shares; issued and outstanding
20,000,000 shares..................................... 200
Additional capital........................................ 628,915
Accumulated deficit....................................... (421,129)
----------
207,986
----------
$1,978,980
==========
</TABLE>
See notes to unaudited consolidated financial statements.
F-2
<PAGE> 84
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 (UNAUDITED)
<TABLE>
<CAPTION>
1996 1997
---- ----
<S> <C> <C>
REVENUES:
Vehicle rentals........................................... $ 382,234 $481,954
Vehicle leasing........................................... 116,392 124,783
Fees and services......................................... 39,969 39,018
Other..................................................... 7,630 7,127
--------- --------
Total revenues....................................... 546,225 652,882
--------- --------
COSTS AND EXPENSES:
Direct vehicle and operating.............................. 187,462 219,058
Vehicle depreciation, net................................. 161,440 207,452
Selling, general and administrative....................... 103,161 111,554
Interest expense, net of interest income of $3,711 and
$2,596................................................. 55,190 65,756
Amortization of cost in excess of net assets acquired..... 6,742 4,504
Intangible asset impairment loss.......................... 155,000 --
--------- --------
Total costs and expenses............................. 668,995 608,324
--------- --------
EARNINGS (LOSS) BEFORE INCOME TAXES......................... (122,770) 44,558
INCOME TAX EXPENSE.......................................... 18,589 20,338
--------- --------
NET EARNINGS (LOSS)......................................... $(141,359) $ 24,220
========= ========
</TABLE>
See notes to unaudited consolidated financial statements.
F-3
<PAGE> 85
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 (UNAUDITED)
<TABLE>
<CAPTION>
1996 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss)....................................... $ (141,359) $ 24,220
Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:
Depreciation......................................... 169,310 207,120
Amortization......................................... 8,717 5,787
Net loss (gain) from disposition of revenue earning
vehicles............................................ (2,005) 7,334
Provision for losses on accounts and notes
receivable.......................................... 5,158 4,090
Intangible asset impairment loss..................... 155,000 --
Change in assets and liabilities, net of acquisition:
Accounts and notes receivable..................... (1,976) (29,737)
Due from Parent................................... 26,382 9,639
Prepaid expenses and other assets................. 169 (4,507)
Intangible assets................................. (2,996) 307
Accounts payable.................................. (33,067) (26,931)
Accrued liabilities............................... 29,526 5,642
Income taxes payable.............................. 8,720 7,782
Public liability and property damage.............. 3,878 10,732
Deferred income taxes............................. 6,469 8,517
Other............................................. (349) (117)
----------- -----------
Net cash provided by operating activities.... 231,577 229,878
CASH FLOWS FROM INVESTING ACTIVITIES:
Revenue-earning vehicles:
Purchases.............................................. (1,508,820) (1,466,676)
Proceeds from sales.................................... 1,080,661 878,709
Restricted cash and investments, net...................... 63,258 75,446
Property and equipment:
Purchases.............................................. (5,861) (7,307)
Proceeds from sale..................................... -- 1,283
----------- -----------
Net cash used in investing activities........ (370,762) (518,545)
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt and other obligations:
Proceeds............................................... 966,760 1,102,575
Payments............................................... (803,657) (801,391)
Cash management/working capital -- Parent, net............ (23,266) (10,778)
Vehicle financing issue costs............................. (657) --
----------- -----------
Net cash provided by financing activities.... 139,180 290,406
----------- -----------
CHANGE IN CASH AND CASH EQUIVALENTS......................... (5) 1,739
CASH AND CASH EQUIVALENTS:
Beginning of period....................................... 4,230 3,425
----------- -----------
End of period............................................. $ 4,225 $ 5,164
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Income taxes........................................... $ 1,688 $ 2,953
=========== ===========
Interest............................................... $ 71,684 $ 67,602
=========== ===========
</TABLE>
See notes to unaudited consolidated financial statements.
F-4
<PAGE> 86
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 (UNAUDITED)
1. BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited consolidated
financial statements include all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
position at September 30, 1997, and the results of operations and cash flows for
the nine-month periods ended September 30, 1996 and 1997. The results of
operations for interim periods are not indicative of the results for a full
year.
For a summary of significant accounting policies and additional financial
information, see the Company's consolidated financial statements which are
included elsewhere in this Prospectus.
2. DEBT AND OTHER OBLIGATIONS
Debt and other obligations consist of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30,
1997
-------------
(IN
THOUSANDS)
<S> <C>
Vehicle Debt and Obligations
Chrysler Financial Corporation................................. $ 954,636
Asset backed notes, net of discount............................ 491,160
Deferred vehicle rent.......................................... 73,490
Banks and others............................................... 523
-------------
1,519,809
Other Notes Payable
Bank line of credit............................................ 22,333
Chrysler Financial Corporation and other....................... 600
-------------
22,933
-------------
Total debt and other obligations............................ $ 1,542,742
==========
</TABLE>
3. COMMITMENTS AND CONTINGENCIES
Various claims and legal proceedings have been asserted or instituted
against the Company, including some purporting to be class actions, and some
which demand large monetary damages or other relief which could result in
significant expenditures. Litigation is subject to many uncertainties, and the
outcome of individual matters is not predictable with assurance. The Company is
also subject to potential liability related to environmental matters. The
Company establishes reserves for litigation and environmental matters when the
loss is probable and reasonably estimable. It is reasonably possible that the
final resolution of some of these matters may require the Company to make
expenditures, in excess of established reserves, over an extended period of time
and in a range of amounts that cannot be reasonably estimated. The term
"reasonably possible" is used herein to mean that the chance of a future
transaction or event occurring is more than remote but less than likely.
Although the final resolution of any such matters could have a material effect
on the Company's consolidated operating results for the particular reporting
period in which an adjustment of the estimated liability is recorded, the
Company believes that any resulting liability should not materially affect its
consolidated financial position.
In 1995, a judgment was entered against Dollar and its parent for
$8,705,000 plus attorney's fees and interest, relating to certain litigation
with franchisees. Management and its legal counsel Donovan Leisure Newton &
Irvine LLP believe it is reasonably possible that the Company will ultimately
prevail in this matter on appeal. Accordingly, the Company has not established
reserves in the consolidated financial statements for the full amount of the
judgment.
F-5
<PAGE> 87
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholder of
Dollar Thrifty Automotive Group, Inc.:
We have audited the accompanying consolidated balance sheet of Dollar Thrifty
Automotive Group, Inc. and subsidiaries (successor to Pentastar Transportation
Group, Inc. and subsidiaries) as of December 31, 1995 and 1996, and the related
consolidated statements of operations, stockholder's equity and cash flows for
each of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Dollar Thrifty Automotive Group,
Inc. and subsidiaries at December 31, 1995 and 1996, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
November 6, 1997
Tulsa, Oklahoma
F-6
<PAGE> 88
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
DECEMBER 31, 1995 AND 1996
<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents............................. $ 4,230 $ 3,425
Restricted cash and investments....................... 139,173 103,933
Accounts and notes receivable, net.................... 66,277 58,020
Due from Parent....................................... 28,630 74,104
Prepaid expenses and other assets..................... 23,330 21,114
Income taxes receivable............................... 9,264 --
Revenue-earning vehicles, net......................... 958,799 1,120,346
Property and equipment, net........................... 55,620 60,888
Deferred income taxes................................. 1,905 --
Intangible assets, net................................ 370,595 206,121
---------- ----------
$1,657,823 $1,647,951
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Accounts payable.................................... $ 47,096 $ 67,743
Accrued liabilities................................. 91,378 82,958
Income taxes payable................................ -- 1,853
Public liability and property damage................ 59,349 63,235
Debt and other obligations.......................... 1,128,811 1,241,558
Deferred income taxes............................... -- 6,721
---------- ----------
Total liabilities................................ 1,326,634 1,464,068
COMMITMENTS AND CONTINGENCIES (Note 11)
STOCKHOLDER'S EQUITY:
Preferred stock, $.01 par value:
Authorized 10,000,000 shares; none outstanding...... -- --
Common stock, $.01 par value:
Authorized 50,000,000 shares; issued and outstanding
20,000,000 shares................................ 200 200
Additional capital.................................... 628,916 628,916
Accumulated deficit................................... (297,927) (445,233)
---------- ----------
331,189 183,883
---------- ----------
$1,657,823 $1,647,951
========== ==========
</TABLE>
See notes to consolidated financial statements.
F-7
<PAGE> 89
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS)
YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
REVENUES:
Vehicle rentals........................................... $413,424 $372,508 $ 495,598
Vehicle leasing........................................... 172,999 177,836 150,179
Fees and services......................................... 58,966 49,382 50,475
Other..................................................... 8,614 9,653 9,342
-------- -------- ---------
Total revenues.................................... 654,003 609,379 705,594
-------- -------- ---------
COSTS AND EXPENSES:
Direct vehicle and operating.............................. 234,370 190,577 245,895
Vehicle depreciation, net................................. 210,975 196,367 213,143
Selling, general and administrative....................... 143,155 123,439 138,363
Interest expense, net of interest income of $717, $5,077
and $5,446............................................. 83,526 78,817 72,868
Amortization of cost in excess of net assets acquired..... 11,517 10,456 8,169
Intangible asset impairment losses........................ -- -- 157,758
Restructuring charge reversal -- Snappy................... (7,000) -- --
Loss on sale of Snappy.................................... 40,893 -- --
-------- -------- ---------
Total costs and expenses.......................... 717,436 599,656 836,196
-------- -------- ---------
EARNINGS (LOSS) BEFORE INCOME TAXES......................... (63,433) 9,723 (130,602)
INCOME TAX EXPENSE (BENEFIT)................................ (12,755) 9,753 16,682
-------- -------- ---------
NET LOSS.................................................... $(50,678) $ (30) $(147,284)
======== ======== =========
</TABLE>
See notes to consolidated financial statements.
F-8
<PAGE> 90
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
<TABLE>
<CAPTION>
COMMON STOCK
$.01 PAR VALUE TOTAL
------------------- ADDITIONAL ACCUMULATED STOCKHOLDER'S
SHARES AMOUNT CAPITAL DEFICIT EQUITY
------ ------ ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1994................ 20,000,000 $200 $628,916 $(246,764) $ 382,352
Net loss.............................. -- -- -- (50,678) (50,678)
Foreign currency translation.......... -- -- -- (514) (514)
---------- ---- -------- --------- ---------
BALANCE, DECEMBER 31, 1994.............. 20,000,000 200 628,916 (297,956) 331,160
Net loss.............................. -- -- -- (30) (30)
Foreign currency translation.......... -- -- -- 59 59
---------- ---- -------- --------- ---------
BALANCE, DECEMBER 31, 1995.............. 20,000,000 200 628,916 (297,927) 331,189
Net loss.............................. -- -- -- (147,284) (147,284)
Foreign currency translation.......... -- -- -- (22) (22)
---------- ---- -------- --------- ---------
BALANCE, DECEMBER 31, 1996.............. 20,000,000 $200 $628,916 $(445,233) $ 183,883
========== ==== ======== ========= =========
</TABLE>
See notes to consolidated financial statements.
F-9
<PAGE> 91
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $ (50,678) $ (30) $ (147,284)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation............................................ 222,251 205,589 225,521
Amortization............................................ 14,869 12,948 10,394
Net gains from disposition of revenue-earning
vehicles.............................................. (4,029) (2,678) (3,484)
Losses on investments in affiliates..................... 2,100 2,533 --
Provision for losses on accounts and notes receivable... 9,737 5,434 8,404
Intangible asset impairment losses...................... -- -- 157,758
Loss on sale of Snappy.................................. 40,893 -- --
Restructuring reserve reversal.......................... (7,000) -- --
Change in assets and liabilities, net of acquisition:
Accounts and notes receivable......................... (1,693) 1,050 233
Due from Parent....................................... 11,552 (23,740) 13,033
Prepaid expenses and other assets..................... (908) (1,695) 2,873
Deferred income taxes................................. 9,402 6,771 8,626
Intangible assets..................................... (2,444) (2,732) (1,158)
Accounts payable...................................... (42,086) (13,563) 20,438
Accrued liabilities................................... 21,159 (14,785) (8,420)
Income taxes payable.................................. 70,422 (3,553) 11,117
Public liability and property damage.................. (1,382) 1,292 3,886
Other................................................. (514) 322 (26)
----------- ----------- -----------
Net cash provided by operating activities.......... 291,651 173,163 301,911
CASH FLOWS FROM INVESTING ACTIVITIES:
Revenue-earning vehicles:
Purchases............................................... (1,427,608) (1,417,437) (1,615,615)
Proceeds from sales..................................... 1,523,631 1,260,928 1,241,879
Restricted cash and investments, net...................... -- (139,173) 35,240
Proceeds from sale of investments......................... 12,504 -- --
Property and equipment:
Purchases............................................... (20,902) (7,940) (13,378)
Proceeds from sale...................................... 12,425 299 --
Acquisition of businesses, net of cash acquired........... -- (3,063) (4,425)
----------- ----------- -----------
Net cash provided by (used in) investing
activities....................................... 100,050 (306,386) (356,299)
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt and other obligations:
Proceeds................................................ 1,545,424 1,907,509 1,174,200
Payments................................................ (1,888,866) (1,833,856) (1,061,453)
Cash management/working capital -- Parent, net............ (58,037) 64,741 (58,507)
Vehicle financing issue costs............................. -- (4,100) (657)
----------- ----------- -----------
Net cash provided by (used in) financing
activities....................................... (401,479) 134,294 53,583
----------- ----------- -----------
CHANGE IN CASH AND CASH EQUIVALENTS......................... (9,778) 1,071 (805)
CASH AND CASH EQUIVALENTS:
Beginning of year......................................... 12,937 3,159 4,230
----------- ----------- -----------
End of year............................................... $ 3,159 $ 4,230 $ 3,425
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for:
Income taxes............................................ $ 494 $ 4,177 $ 2,348
=========== =========== ===========
Interest................................................ $ 96,378 $ 87,216 $ 82,180
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
F-10
<PAGE> 92
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1994, 1995, AND 1996
1. BASIS OF PRESENTATION
Dollar Thrifty Automotive Group, Inc. ("Dollar Thrifty Group" or "the
Company") was formed in November 1997 as a wholly owned subsidiary of Pentastar
Transportation Group, Inc., a wholly owned subsidiary of Chrysler Corporation
("Chrysler"). Following formation of Dollar Thrifty Group, Pentastar
Transportation Group, Inc. was merged into Dollar Thrifty Group with Dollar
Thrifty Group as the surviving corporation. Due to the common ownership and
management of the merged entities, the transaction has been accounted for at
historical cost in a manner similar to that used in pooling of interests
accounting and the consolidated financial statements have been restated to
reflect the merger.
The Company's significant wholly owned subsidiaries, including Dollar Rent
A Car Systems, Inc. ("Dollar") and Thrifty Rent-A-Car System, Inc. ("Thrifty")
were acquired in 1990 and 1989, respectively. Snappy Car Rental, Inc. ("Snappy")
was acquired in 1989 and sold in 1994. The acquisitions of Dollar, Thrifty and
Snappy were accounted for using the purchase method of accounting and the
purchase prices were allocated to the assets acquired and liabilities assumed
based on their estimated fair values which are reflected in the accompanying
consolidated financial statements. The term the "Company" is used to refer to
Dollar Thrifty Group and subsidiaries collectively and to the individual
subsidiaries of Dollar Thrifty Group. Intercompany accounts and transactions
have been eliminated in consolidation. Investments in 20% to 50% owned
affiliates are accounted for on the equity method.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business -- The subsidiaries are engaged in the business of the
daily rental of vehicles to business and leisure customers through company-owned
stores and in the business of leasing vehicles to their franchisees for use in
the daily vehicle rental business throughout the United States and Canada. The
subsidiaries are also involved in selling vehicle rental franchises worldwide
and providing sales and marketing, reservations, data processing systems,
insurance and other services to its franchisees.
Estimates -- The preparation of the Company's consolidated financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Long-Lived Assets and Long-Lived Assets to Be Disposed Of -- Effective
January 1, 1996, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of." SFAS No. 121 requires that long-lived
assets and certain identifiable intangibles to be held and used by an entity be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable based upon estimated
future undiscounted cash flows. In addition, SFAS No. 121 requires that certain
long-lived assets and identifiable intangibles to be disposed of be reported at
the lower of carrying amount or fair value less cost to sell. The initial
adoption of this new accounting standard did not have a material effect on the
Company's consolidated operating results or financial position (Note 7).
Cash and Cash Equivalents -- Cash and cash equivalents include cash on hand
and on deposit including highly liquid investments with initial maturities of
three months or less.
Restricted Cash and Investments -- Restricted cash and investments are
restricted for the acquisition of vehicles and other specified uses under the
rental car asset backed note indenture and other agreements (Note 8). These
funds are primarily held in a highly rated money market fund with investments
primarily in government and corporate obligations with a dollar-weighted average
maturity not to exceed 60 days, as permitted by the
F-11
<PAGE> 93
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
indenture. Restricted cash and investments are excluded from cash and cash
equivalents. Interest received on restricted cash and investments was $29,000
and $4,281,000 for 1995 and 1996, respectively.
Allowance for Doubtful Accounts -- An allowance for doubtful accounts is
generally established during the period in which receivables are recorded. The
allowance is maintained at a level deemed appropriate based on loss experience
and other factors affecting collectibility.
Revenue-Earning Vehicles -- Revenue-earning vehicles are stated at cost net
of related discounts and are depreciated over their estimated economic lives, or
at rates corresponding to manufacturers' guaranteed residual values, where
applicable. Depreciation rates range from approximately 1.0% to 2.0% per month.
Net gains and losses from sales of revenue-earning vehicles are recorded as an
adjustment to vehicle depreciation.
The Company changed its method of computing depreciation on revenue-earning
vehicles from the monthly method to the daily method. The new depreciation
method was adopted to match methods used by vehicle manufacturers in determining
guaranteed residual values and to more closely recognize depreciation as it is
incurred. In accordance with APB Opinion No. 20, the change has been reported
retroactively.
Property and Equipment -- Property and equipment are recorded at cost and
are depreciated or amortized using principally the straight-line basis over the
estimated useful lives of the related assets. Estimated useful lives range from
ten to 31 years for building and improvements and three to seven years for
furniture and equipment. Leasehold improvements are amortized over the shorter
of ten years or the lives of the related leases.
Intangible Assets -- Intangible assets are amortized using the
straight-line basis. Cost in excess of net assets acquired is amortized over
forty- and thirty-year periods. Licenses held for operation are stated at the
lower of amortized cost or recoverable value based upon Company estimates and
are amortized primarily over a ten-year period. Noncompete agreements and other
intangible assets are amortized over periods ranging from five to eight years.
The Company continually assesses the recoverability of the cost in excess of net
assets acquired based on estimates of the expected future cash flows of the
operations to which such amounts relate.
Public Liability and Property Damage -- Provisions for public liability and
property damage on self-insured claims are made by charges primarily to direct
vehicle and operating expense. Accruals for such charges are based upon
actuarially determined evaluations of estimated ultimate liabilities on reported
and unreported claims, prepared on at least an annual basis by an independent
actuary. Historical data related to the amount and timing of payments for
self-insured claims are utilized in preparing the actuarial evaluations. The
accrual for public liability and property damage claims is discounted based upon
the independently prepared actuarially determined estimated timing of payments
to be made in the future. Management reviews the actual timing of payments as
compared with the annual actuarial estimate of timing of payments and has
determined that there have been no material differences in the timing of
payments for each of the three years in the period ended December 31, 1996.
Foreign Currency Translation -- Foreign assets and liabilities are
translated using the exchange rate in effect at the balance sheet date, and
results of operations are translated using an average rate for the period.
Translation adjustments are accumulated and reported as a component of
stockholder's equity.
Revenue Recognition -- The Company rents revenue-earning vehicles under
short-term rental contracts. Revenues are recognized as earned under the terms
of the rental contracts. The Company also leases revenue-earning vehicles to
franchisees primarily under operating leases. Revenues are recognized as earned
over the lease term.
Initial franchise fees are recognized at the date of sale of the franchise
which coincides with commencement of operations by the franchisee. Continuing
franchise fees are reported as revenue as the fees are earned.
F-12
<PAGE> 94
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Advertising Costs -- Advertising costs are primarily expensed as incurred.
The Company incurred advertising expense of $30,375,000, $25,714,000 and
$34,958,000 for 1994, 1995 and 1996, respectively.
Thrifty's primary advertising is conducted by an affiliated entity, Thrifty
Rent-A-Car System, Inc. National Advertising Committee ("Thrifty National Ad").
Thrifty made payments of $4,580,000, $4,566,000 and $4,163,000 in 1994, 1995 and
1996, respectively, to Thrifty National Ad to support funding of advertising
campaigns, which are included in advertising costs. Thrifty also received
reimbursement from Thrifty National Ad for administrative services performed of
$1,462,000, $1,363,000 and $1,530,000 during 1994, 1995 and 1996, respectively,
which are recorded as offsets to selling, general and administrative expense.
Environmental Costs -- The Company's operations include the storage of
gasoline in underground storage tanks at certain company-owned stores.
Liabilities incurred in connection with the remediation of accidental fuel
discharges are recorded when it is probable that obligations have been incurred
and the amounts can be reasonably estimated.
Income Taxes -- The Company's U.S. operations are included in the
consolidated U.S. income tax returns of Chrysler. The Company has provided for
income taxes on its separate taxable income or loss and other tax attributes.
Deferred income taxes are provided for the temporary differences between the
financial reporting basis and the tax basis of the Company's assets and
liabilities.
New Accounting Standard -- The Company plans to adopt the provisions of
SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities" in 1997. The Company does not anticipate any
financial statement impact upon adoption of this new standard.
3. DIVESTITURE AND ACQUISITIONS
Effective September 2, 1994, the Company sold its investment in Snappy for
net proceeds of $10,000,000 which resulted in a pre-tax loss on sale of
$40,893,000.
In November 1996, Dollar acquired certain assets and assumed certain
liabilities of Trynd, Inc. and AHL, Inc., the former Denver and Dallas
franchisees of Dollar. Dollar paid $4,425,000 in cash, net of cash acquired, and
assumed net liabilities of $218,000. Effective November 30, 1995, Dollar
acquired certain assets and assumed certain liabilities of the vehicle rental
division of Pacific International Services Corporation, the former Hawaii
franchisee of Dollar. Dollar paid $3,063,000 in cash including acquisition
costs, net of cash acquired, and assumed net liabilities of $6,836,000. Cost in
excess of net assets acquired of $9,600,000 is being amortized on the
straight-line basis over 30 years. The transactions have been accounted for
using the purchase method of accounting and operating results of the acquirees
from the dates of acquisition, which are not material to the respective years of
acquisition, are included in the consolidated statement of operations of the
Company.
F-13
<PAGE> 95
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. ACCOUNTS AND NOTES RECEIVABLE AND DUE FROM PARENT
Accounts and notes receivable consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
Trade:
Accounts receivable..................................... $ 71,881 $ 63,478
Notes receivable........................................ 13,736 11,164
-------- --------
85,617 74,642
Less allowance for doubtful accounts...................... (19,340) (16,622)
-------- --------
$ 66,277 $ 58,020
======== ========
</TABLE>
Trade accounts and notes receivable are primarily due from franchisees and
tour operators and arise from billings under standard credit terms for services
provided in the normal course of business. Notes receivable are generally issued
to certain franchisees at current market interest rates with varying maturities
and are generally covered by personal guarantees of the franchisees.
Due from (to) Parent consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
Accounts receivable - Parent.............................. $ 48,870 $ 35,837
Cash management/working capital - Parent.................. (20,240) 38,267
-------- --------
$ 28,630 $ 74,104
======== ========
</TABLE>
Accounts receivable--Parent is comprised primarily of amounts due under
various incentive and promotion programs and amounts due from the sale of
revenue-earning vehicles at auction.
Cash management/working capital--Parent results from the Company's ability
to advance excess cash to Chrysler and to borrow from Chrysler under a
$75,000,000 working capital line of credit. The amounts bear interest at the
prime rate plus 2% (10.5% and 10.25% at December 31, 1995 and 1996,
respectively), and are due on demand. Net interest expense on these amounts is
partially reimbursed by Chrysler under an interest subvention program. In 1994,
1995 and 1996, the Company recorded net interest income of $717,000, $5,048,000
and $1,165,000, respectively, on the working capital line which includes
interest subvention of $1,900,000 and $2,024,000 in 1995 and 1996, respectively.
Participation in cash management programs with Chrysler resulted in
disbursements in excess of bank balances of $36,910,000 and $55,492,000, which
are included in accounts payable at December 31, 1995 and 1996, respectively.
F-14
<PAGE> 96
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. REVENUE-EARNING VEHICLES
Revenue-earning vehicles consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1995 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
Revenue-earning vehicles.............................. $1,053,479 $1,230,884
Less accumulated depreciation......................... (94,680) (110,538)
---------- ----------
$ 958,799 $1,120,346
========== ==========
</TABLE>
The Company purchases the majority of its revenue-earning vehicles from
Chrysler under vehicle supply agreements and from Chrysler Canada Ltd. Purchases
of revenue-earning vehicles from Chrysler and Chrysler Canada Ltd. were
$1,310,000,000, $1,406,523,000 and $1,612,122,000 during 1994, 1995 and 1996,
respectively. Vehicle acquisition terms provide for guaranteed residual values
or buybacks on the majority of vehicles under specified conditions. The Company
received residual value program payments of $153,932,000, $157,411,000 and
$120,520,000 in 1994, 1995 and 1996, respectively, which are included in
proceeds from sales of revenue-earning vehicles. In 1994, 1995 and 1996,
$92,564,000, $85,316,000 and $83,798,000, respectively, was received from
Chrysler Canada Ltd. for buyback of revenue-earning vehicles. Chrysler also
provided promotional payments, which are primarily amortized on the
straight-line basis over the respective model year to which the promotional
payments relate, and other incentives primarily related to the disposal of
revenue-earning vehicles. These promotional payments and other incentives, which
are reflected as offsets to direct vehicle and operating expense, amounted to
$63,989,000, $82,145,000 and $83,597,000 for 1994, 1995 and 1996, respectively.
Dollar and Thrifty entered into Vehicle Supply Agreements ("VSAs") with
Chrysler, which commenced with the 1997 model year and expire in July 2001.
Under the VSAs, Chrysler has agreed to supply certain specified volumes of
vehicles which are comprised of approximately 80% guaranteed depreciation
program vehicles ("Program Vehicles"). Dollar and Thrifty are required to
purchase at least 80% of their vehicles from Chrysler up to specified volumes of
which minimum amounts must be Program Vehicles. Under the terms of the VSAs,
Dollar and Thrifty have agreed to advertise and promote Chrysler products
exclusively, and will receive promotional payments from Chrysler for each model
year.
Rent expense for vehicles leased from unrelated vehicle manufacturers under
operating leases with terms of less than one year was approximately $11,827,000,
$20,412,000, and $16,687,000 for 1994, 1995, and 1996, respectively.
F-15
<PAGE> 97
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. PROPERTY AND EQUIPMENT
Major classes of property and equipment consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
Land...................................................... $ 14,780 $ 14,786
Buildings and improvements................................ 14,971 15,262
Furniture and equipment................................... 23,492 31,327
Leasehold improvements.................................... 26,041 27,861
Construction in progress.................................. 3,711 5,759
-------- --------
82,995 94,995
Less accumulated depreciation and amortization............ (27,375) (34,107)
-------- --------
$ 55,620 $ 60,888
======== ========
</TABLE>
7. INTANGIBLE ASSETS
Intangible assets consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
Cost in excess of net assets acquired.................... $417,688 $259,675
Trademarks and licenses held for operation............... 20,033 17,451
Software licenses, noncompete agreements and other....... 14,810 15,073
-------- --------
452,531 292,199
Less accumulated amortization............................ (81,936) (86,078)
-------- --------
$370,595 $206,121
======== ========
</TABLE>
As stated in Note 5, the Company acquires the majority of its
revenue-earning vehicle fleet from Chrysler and provides Chrysler with an outlet
for vehicles and the opportunity for related manufacturing profits to be
recognized from ultimate disposition of the vehicles. The Company's relationship
with Chrysler has provided a basis for maintaining the carrying value of the
recorded cost in excess of net assets acquired.
Consistent with Chrysler's strategy to focus on its core automotive
business, Chrysler is exploring the sale of entities not related to its core
automotive business. In 1996, Chrysler committed to a plan of disposal for
Thrifty and the Company recognized a $155 million intangible asset impairment
loss to reduce Thrifty's carrying value to estimated fair value less cost to
sell. Management's estimate of the fair value of Thrifty was based principally
on analysis of non-binding bids. The accounts of Thrifty are included in the
consolidated financial statements of the Company. Thrifty's total assets, after
the intangible asset impairment loss, and liabilities were $676,370,000 and
$580,211,000, respectively, at December 31, 1996. Thrifty's net loss for 1996,
as reflected in the consolidated statement of operations, exclusive of the
intangible asset impairment loss, was $1,185,000. Management continues to assess
the fair value of Thrifty based primarily on market and sales values of similar
entities. In addition, Chrysler is also exploring the potential disposition of
Dollar or the Company and Chrysler believes that if it were to commit to a plan
of disposal for Dollar or the Company no impairment loss related to Dollar's
carrying value would be required. Should Chrysler make further changes in its
intentions related to the Company or its subsidiaries, carrying values of the
related net assets of those companies may require further adjustment (Note 13).
F-16
<PAGE> 98
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As a result of continuing operating losses incurred by Thrifty Canada Ltd.
("TCL"), a wholly owned subsidiary of Thrifty, during 1996 management assessed
the carrying value of intangible assets related to TCL, and recorded an
intangible asset impairment loss of $2,758,000 (pre and after tax). The
intangible asset impairment loss was based on the estimated recoverable value of
Thrifty Canada utilizing historical cash flows as the basis for estimating
discounted future cash flows of that operation.
8. DEBT AND OTHER OBLIGATIONS
Debt and other obligations consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1995 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
VEHICLE DEBT AND OBLIGATIONS
Chrysler Financial Corporation...................... $ 594,758 $ 713,346
Asset backed notes, net of discount................. 449,911 449,927
Deferred vehicle rent............................... -- 48,699
Chrysler Credit Holdings............................ 45,404 --
Banks and others.................................... 2,372 1,620
---------- ----------
1,092,445 1,213,592
OTHER NOTES PAYABLE
Bank line of credit................................. 20,000 27,000
Chrysler Financial Corporation and other............ 16,366 966
---------- ----------
36,366 27,966
---------- ----------
Total debt and other obligations................. $1,128,811 $1,241,558
========== ==========
</TABLE>
VEHICLE DEBT AND OBLIGATIONS
Chrysler Financial Corporation ("Chrysler Financial") vehicle obligations
represent borrowings under collateralized credit lines totaling $987,700,000 at
both December 31, 1995 and 1996, primarily for the purchase of new Chrysler
vehicles. The interest rate for borrowings under this agreement are subvented by
Chrysler to prime less 1 1/2%. The weighted average interest rate on Chrysler
Financial vehicle obligations was 7.0% and 6.75%, net of interest subvention, at
December 31, 1995 and 1996, respectively.
Chrysler vehicle obligations are collateralized primarily by
revenue-earning vehicles and proceeds from the sale, lease or rental of
vehicles. The obligations generally have 5- to 15-month terms and require
monthly payments and a final balloon payment. The Company expects that these
obligations will generally be repaid within approximately one year from the
balance sheet date.
Asset Backed Notes represent borrowings of Thrifty Car Rental Finance
Corporation ("TFC"), a wholly owned special purpose corporation of Thrifty
formed in 1995 for the purpose of refinancing existing vehicle related debt of
Thrifty and to finance future vehicle acquisitions in the United States for use
in Thrifty's vehicle rental and vehicle leasing business. On December 22, 1995,
TFC issued $190,000,000, net of discount of $89,000, of 6.6% rental car asset
backed notes ("fixed notes") and $260,000,000 of floating rate rental car asset
backed notes ("floating notes") (collectively the "asset backed notes"). The
floating notes bear interest at rates ranging from LIBOR plus .70% to LIBOR plus
1.25% (6.65% to 7.2% at December 31, 1995 and 6.23% to 6.78% at December 31,
1996). On May 28, 1996, TFC issued $26,000,000 of variable funding notes which
bear interest at rates based on commercial paper rates and mature in 1998. There
were no amounts outstanding under this agreement at December 31, 1996. During
1997, the variable funding rates were temporarily increased to
F-17
<PAGE> 99
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
$71,000,000 to fund peak vehicle financing needs. The assets of TFC are
available first to satisfy the claims of its creditors. Thrifty leases the
vehicles from TFC under the terms of a master lease and servicing agreement. The
asset backed note indenture also provides for additional credit enhancement
through overcollateralization of the vehicle fleet and maintenance of a
liquidity reserve. Thrifty and TFC are in compliance with the terms of the
indenture. The asset backed notes mature from August 1998 through May 2001 and
are generally subject to repurchase on any payment date subject to a prepayment
penalty.
Deferred Vehicle Rent represents financing obtained in June 1996 by TCL
under a Master Concurrent Lease Agreement ("the Lease Agreement") with CFI Auto
Lease Trust ("CFI") for the TCL vehicle fleet. Under the Lease Agreement, CFI
prepays 91% of the total lease rent due to TCL at the inception of the leases.
This prepaid rent is reflected as deferred vehicle rent. The Lease Agreement has
a four-year term and allows for replacement of vehicles under lease. Monthly and
other periodic refunds of rent to CFI are required on certain leased vehicles.
Upon disposition of vehicles, the deferred vehicle rent is refundable to CFI.
TCL's beneficial interest in the vehicles leased to CFI and any amounts due to
TCL directly related to the vehicles, including payments from franchisees and
vehicle disposition programs are vested in the Lease Agreement.
This transaction included the creation of a special purpose, not-for-profit
Canadian trust ("Thrifty Trust") which concurrently leases the vehicles from TCL
for a four-year term and simultaneously leases such vehicles to the TCL
franchisees and company-owned stores. The term of the Lease Agreement is
concurrent with the term of the lease between TCL and Thrifty. Due to the nature
of the relationship between TCL and Thrifty Trust, the consolidated financial
statements include the accounts of Thrifty Trust and all material intercompany
accounts and transactions have been eliminated.
CFI has committed to funding of approximately $91,000,000 under the Lease
Agreement and TCL pays a fee of 0.1% on the unused portion of this commitment.
The Lease Agreement also provides an $8,000,000 revolving line of credit to fund
vehicle acquisitions. There were no amounts outstanding under this line at
December 31, 1996. The four year funding commitment from CFI is supported by
underlying bank financing that is required to be renewed by CFI annually. The
deferred vehicle rent as well as the revolving line of credit amounts bear
interest based on the bankers acceptance rate plus .88% or the Canadian prime
rate plus .125%. The weighted average interest rate on deferred vehicle rent at
December 31, 1996 was 4.1%.
The Lease Agreement requires the maintenance of certain letters of credit
and contains various restrictive covenants including a limitation on the
percentage of vehicles which are not covered by manufacturer repurchase programs
and the maintenance by TCL of a specified minimum tangible net worth.
Chrysler Credit Holdings, Ltd. ("Chrysler Holdings") provided TCL
collateralized vehicle credit lines of approximately $80,619,000 at December 31,
1995. The purchase of vehicles was evidenced and secured by conditional sale
contracts and by an assignment of certain franchisee security. The interest rate
for borrowings under this agreement was the 30-day bankers' acceptance rate plus
a margin (7.13% for Chrysler vehicles and 8.88% for non-Chrysler vehicles, 7.16%
weighted average rate at December 31, 1995).
Expected repayments of vehicle debt and obligations outstanding at December
31, 1996 are as follows:
<TABLE>
<CAPTION>
1997 1998 1999 2000 2001
---- ---- ---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Chrysler Financial.......................... $713,346 -- -- -- --
Asset backed notes.......................... -- $207,917 $48,083 $126,667 $67,333
Deferred vehicle rent....................... 48,699 -- -- -- --
Banks and other............................. 1,620 -- -- -- --
-------- -------- ------- -------- -------
Total....................................... $763,665 $207,917 $48,083 $126,667 $67,333
======== ======== ======= ======== =======
</TABLE>
F-18
<PAGE> 100
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
All amounts due Chrysler Financial are included in 1997 maturities as the
Company expects these obligations will generally be repaid within a year of the
balance sheet date. Deferred vehicle rents are scheduled to be refunded through
2000, however, management believes that actual refunds of amounts outstanding at
December 31, 1996 will occur in 1997 due to expected replacement of leased
vehicles as provided in the Lease Agreement.
In August 1997, the Company obtained an additional $20,000,000 bank vehicle
line of credit facility which is available through June 2001. No amounts were
outstanding under this line as of September 30, 1997.
OTHER NOTES PAYABLE
The bank line of credit represents amounts outstanding under a $30,000,000
($20,000,000 at December 31, 1995) bank line of credit agreement which expired
July 10, 1997 and was renewed to June 30, 1998 and provides for interest payable
monthly at the prime rate (8.5% and 8.25% at December 31, 1995 and 1996,
respectively) and a commitment fee of one-eighth of 1% on any unused portion of
the line. The line is collateralized by certain Thrifty U.S. accounts and notes
receivable. Thrifty was in compliance with restrictive covenants of the bank
line of credit which include, among other things, limits on the amount and type
of indebtedness Thrifty can incur, the amount of capital expenditures, and
maintenance of a minimum amount of tangible net worth and a specified ratio of
total liabilities to tangible net worth.
Notes payable to Chrysler Financial of $14,748,000 at 1995 carried interest
at prime plus 1 3/4% (10.25% at December 31, 1995) and were repaid in 1996.
Maturities of other notes payable at December 31, 1996 are as follows:
$27,525,000 (1997), $214,000 (1998), $115,000 (1999), $42,000 (2000), $41,000
(2001) and $29,000 (2002).
Total interest expense on all Chrysler vehicle and other debt, net of
interest subvention was $83,008,000, $81,214,000 and $46,332,000 for 1994, 1995
and 1996, respectively.
9. EMPLOYEE BENEFIT PLANS
The Company sponsors a profit sharing plan which incorporates the salary
reduction provisions of Section 401(k) of the Internal Revenue Code and covers
substantially all employees of the Company meeting specific age and length of
service requirements. Matching contributions from the Company are discretionary
and during 1994, 1995 and 1996 were 50% of employee contributions up to 4% of
compensation. Contributions by the Company's subsidiaries amounted to $514,000,
$721,000 and $793,000 in 1994, 1995 and 1996, respectively.
F-19
<PAGE> 101
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. INCOME TAXES
Income tax expense (benefit) consists of the following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1994 1995 1996
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal.......................................... $(22,474) $2,492 $ 6,075
State and local.................................. 96 237 1,691
Foreign.......................................... 221 253 290
-------- ------ -------
(22,157) 2,982 8,056
-------- ------ -------
Deferred:
Federal.......................................... 10,047 6,182 8,890
State and local.................................. (645) 589 (264)
-------- ------ -------
9,402 6,771 8,626
-------- ------ -------
$(12,755) $9,753 $16,682
======== ====== =======
</TABLE>
All Federal income taxes recorded in the consolidated statement of
operations are intercompany items. Intercompany tax settlements resulted in
payments from (to) Chrysler of $93,114,000, $(2,415,000) and $5,409,000 in 1994,
1995 and 1996, respectively.
Deferred tax assets (liabilities) consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1995 1996
---- ----
(IN THOUSANDS)
<S> <C> <C>
Depreciation.............................................. $(42,610) $(45,144)
Public liability and property damage...................... 20,816 24,219
Federal and state NOL credits and carryforwards........... 14,698 13,506
Canadian NOL carryforwards................................ 6,384 5,891
Other..................................................... 31,401 23,098
-------- --------
30,689 21,570
Valuation allowance....................................... (28,784) (28,291)
-------- --------
$ 1,905 $ (6,721)
======== ========
</TABLE>
The Company has net operating loss carryforwards available in certain
states to offset future state taxable income. At December 31, 1996, TCL has net
operating loss carryforwards of approximately $13,285,000 available to offset
future taxable income in Canada which expire through 2002. Valuation allowances
have been established for the estimated future tax effect of the Canadian net
operating losses. Included in the valuation allowance at 1995 and 1996 is
$22,400,000 related to certain pre-acquisition net operating loss carryforwards
which were remitted to the Company by Chrysler in 1995 related to the 1994 tax
year. No other valuation allowances have been recorded against deferred tax
assets.
F-20
<PAGE> 102
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company's effective tax rate differs from the maximum U.S. statutory
income tax rate. The following summary reconciles taxes at the maximum U.S.
statutory rate with recorded taxes:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1994 1995 1996
------------------- ----------------- -------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ ------- ------ -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Tax expense (benefit) computed
at the maximum U.S. statutory
rate.......................... $(22,202) (35.0)% $3,403 35.0% $(45,711) (35.0)%
Difference resulting from:
Amortization of cost in excess
of net assets acquired........ 4,139 6.5 4,164 42.8 2,324 1.8
State and local taxes, net of
Federal income tax benefit.... (247) (0.3) 871 9.0 1,355 1.0
Loss on sale of Snappy (net of
re-attributed NOL
carryforwards)................ 7,608 12.0 -- -- -- --
Reversal of valuation allowance
for Snappy NOL's.............. (3,458) (5.4) -- -- -- --
Valuation allowance for foreign
losses........................ 732 1.1 1,484 15.3 1,974 1.5
Foreign taxes................... 221 0.3 254 2.6 290 0.2
Non-deductible impairment
loss.......................... -- -- -- -- 55,474 42.5
Other........................... 452 0.7 (423) (4.4) 976 0.7
-------- ----- ------ ----- -------- -----
$(12,755) (20.1)% $9,753 100.3% $ 16,682 12.7%
======== ===== ====== ===== ======== =====
</TABLE>
11. COMMITMENTS AND CONTINGENCIES
The Company has certain concession agreements with airports throughout the
United States and Canada. Typically, these agreements provide airport terminal
counter space in return for a minimum rent. In many cases, the Company's
subsidiaries are also obligated to pay insurance and maintenance costs and
additional rents generally based on revenues earned at the location. Certain of
the airport locations are operated by franchisees who are obligated to make the
required rent payments under the terms of their franchise arrangements with the
Company's subsidiaries.
The Company's subsidiaries operate from various leased premises under
operating leases with terms up to fifteen years. Some of the leases contain
renewal options.
Expenses incurred under operating leases and airport concessions were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1994 1995 1996
---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C>
Rent............................................... $22,153 $21,497 $26,311
Concession expenses:
Minimum fees..................................... 10,078 9,807 12,651
Contingent fees.................................. 7,790 7,523 10,061
------- ------- -------
Total....................................... $40,021 $38,827 $49,023
======= ======= =======
</TABLE>
Rent expense is presented in the above table net of sublease rental income
of $2,358,000, $2,172,000 and $2,457,000 in 1994, 1995 and 1996, respectively.
F-21
<PAGE> 103
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
At December 31, 1996, future minimum rentals and fees under noncancelable
operating leases, net of sublease rental income of $10,495,000, and the
Company's obligation for minimum airport concession rentals were payable as
follows:
<TABLE>
<CAPTION>
AIRPORT CONCESSIONS
---------------------------
COMPANY-OWNED FRANCHISEE OPERATING
STORES LOCATIONS LEASES TOTAL
------------- ---------- --------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
1997.............................. $14,913 $2,238 $14,650 $ 31,801
1998.............................. 9,329 2,054 10,716 22,099
1999.............................. 4,509 1,980 6,702 13,191
2000.............................. 2,857 1,427 4,909 9,193
2001.............................. 999 468 3,315 4,782
Thereafter........................ 1,571 69 21,838 23,478
------------- ---------- --------- --------
$34,178 $8,236 $62,130 $104,544
============ ======== ======= ========
</TABLE>
The Company entered into additional airport concession agreements in 1997
which include additional minimum commitments totaling $72,141,000 through 2007.
In 1997, the Company also entered into a facilities operating lease with
additional minimum commitments through 2007 totaling $700,000.
At December 31, 1995 and 1996, the Company had outstanding letter of credit
obligations totaling $3,928,000 and $7,932,000, respectively.
The Company is self-insured or has policy deductibles to certain limits
with respect to liabilities for claims arising as a result of personal injury,
property damage and employee health claims. The accrual for public liability and
property damage includes amounts for incurred losses and incurred but not
reported losses. Such liabilities are necessarily based on actuarially
determined estimates and management believes that the amounts accrued are
adequate. At December 31, 1996 and 1995, these amounts have been discounted at
6% (assumed risk free rate), based upon the actuarially determined estimated
timing of payments to be made in future years. Discounting resulted in reducing
the accrual for public liability and property damage by $4,560,000 and
$6,542,000 at December 31, 1995 and 1996, respectively. Estimated payments of
public liability and property damage as of December 31, 1996 are as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C>
1997............................................................. $ 34,695
1998............................................................. 15,558
1999............................................................. 9,485
2000............................................................. 5,078
2001............................................................. 2,587
Thereafter....................................................... 2,374
-------
Aggregate undiscounted public liability and property damage...... 69,777
Effect of discounting............................................ 6,542
-------
$ 63,235
=======
</TABLE>
Liabilities include $10,240,000 and $4,541,000 at December 31, 1995 and
1996, respectively, for the estimated remaining obligations associated with
General Rent-A-Car, a former wholly owned subsidiary of Chrysler that was merged
with Dollar on January 1, 1993. The reduction in these liabilities included the
resolution of certain outstanding matters which resulted in a $5,000,000
reduction in selling, general and administrative expenses in 1996.
F-22
<PAGE> 104
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Various claims and legal proceedings have been asserted or instituted
against the Company, including some purporting to be class actions, and some
which demand large monetary damages or other relief which could result in
significant expenditures. Litigation is subject to many uncertainties, and the
outcome of individual matters is not predictable with assurance. The Company is
also subject to potential liability related to environmental matters. The
Company establishes reserves for litigation and environmental matters when the
loss is probable and reasonably estimable. It is reasonably possible that the
final resolution of some of these matters may require the Company to make
expenditures, in excess of established reserves, over an extended period of time
and in a range of amounts that cannot be reasonably estimated. The term
"reasonably possible" is used herein to mean that the chance of a future
transaction or event occurring is more than remote but less than likely.
Although the final resolution of any such matters could have a material effect
on the Company's consolidated operating results for the particular reporting
period in which an adjustment of the estimated liability is recorded, the
Company believes that any resulting liability should not materially affect its
consolidated financial position.
In 1995, a judgment was entered against Dollar and its parent for
$8,705,000 plus attorney's fees and interest, relating to certain litigation
with franchisees. Management and its legal counsel, Donovan Leisure Newton &
Irvine LLP, believe it is reasonably possible that the Company will ultimately
prevail in this matter on appeal. Accordingly, the Company has not established
reserves in the consolidated financial statements for the full amount of the
judgment.
12. CONCENTRATION OF CREDIT RISK AND FAIR VALUE INFORMATION
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of restricted cash and
investments and trade receivables. The Company limits its exposure on restricted
cash and investments by investing in highly rated funds. Concentrations of
credit risk with respect to trade receivables are limited due to the large
number of customers comprising the Company's customer base, and their dispersion
across different businesses and geographic areas.
The following estimated fair values of financial instruments have been
determined by the Company using available market information and valuation
methodologies.
Cash and Cash Equivalents, Accounts and Notes Receivable, Accounts Payable,
Accrued Liabilities and Public Liability and Property Damage -- The carrying
amounts of these items are a reasonable estimate of their fair value.
Due from Parent -- Management was not able to practicably estimate the fair
value of the due from Parent amounts due to the related party nature of the
amounts.
Debt and Other Obligations -- The carrying amounts of debt and other
obligations are a reasonable estimate of their fair value. The estimated fair
value of these obligations was based on rates expected to be available to the
Company under proposed financing arrangements (Note 13).
Letter of Credit and Guaranteed Obligations -- The estimated fair value of
these items is $3,856,000 and $2,972,000 at December 31, 1995 and 1996,
respectively.
13. SUBSEQUENT EVENTS
The Company filed a Registration Statement on Form S-1 on November 6, 1997
in connection with the proposed offering of all of the Company's outstanding
common stock which is owned by Chrysler together with certain additional shares
to be initially issued by the Company. In connection with the proposed offering,
the Company will restructure and refinance a significant portion of its vehicle
and other obligations, working capital facilities, bonds and bond guarantees.
F-23
<PAGE> 105
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Upon successful completion of the proposed offering, the Company plans to
maintain ownership of Thrifty. Accordingly, Thrifty will no longer be considered
an asset held for sale. The intangible asset impairment loss recognized in 1996
related to the Company's investment in Thrifty resulted in a new cost basis for
Thrifty. The new cost basis will remain in effect upon successful completion of
the proposed offering.
Also in connection with the proposed offering, the Company plans to adopt a
long-term incentive plan for Company management which will include provisions
for awards in the form of stock options, stock appreciation rights, restricted
stock, performance cash awards and other stock based incentives. As allowed by
SFAS No. 123, the Company intends to account for stock based compensation under
the provisions of APB Opinion No. 25.
The Company is entering into a five-year data processing services
agreement. The agreement will require annual payments of approximately
$4,200,000.
* * * * *
F-24
<PAGE> 106
------------------------------------------------------
PROSPECTIVE INVESTORS MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS. NEITHER DOLLAR THRIFTY AUTOMOTIVE GROUP, INC., CHRYSLER NOR ANY U.S.
UNDERWRITER HAS AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS WITH
INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS
NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION CONTAINED
IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS
OF THE TIME OF THE DELIVERY OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.
NO ACTION IS BEING TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES TO
PERMIT A PUBLIC OFFERING OF THE COMMON STOCK OR POSSESSION OR DISTRIBUTION OF
THIS PROSPECTUS IN ANY SUCH JURISDICTION. PERSONS WHO COME INTO POSSESSION OF
THIS PROSPECTUS IN JURISDICTIONS OUTSIDE THE UNITED STATES ARE REQUIRED TO
INFORM THEMSELVES ABOUT AND TO OBSERVE ANY RESTRICTIONS AS TO THIS OFFERING AND
THE DISTRIBUTION OF THIS PROSPECTUS APPLICABLE IN THAT JURISDICTION.
------------------
UNTIL , 1998 (25 DAYS AFTER THE COMMENCEMENT OF THE
OFFERING) ALL DEALERS THAT BUY, SELL OR TRADE THE SHARES, WHETHER OR NOT
PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS
IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
======================================================
[DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LOGOS]
22,500,000 Shares
Common Stock
PROSPECTUS
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
SALOMON BROTHERS INC
------------------------------------------------------
<PAGE> 107
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
AMENDED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE RELATED REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION OR ANY
APPLICABLE STATE SECURITIES COMMISSION BECOMES EFFECTIVE. THIS PROSPECTUS
IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED NOVEMBER 26, 1997
22,500,000 Shares
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LOGO
Common Stock
------------------
This is an initial public offering of shares of common stock of Dollar
Thrifty Automotive Group, Inc. Chrysler Corporation, which currently owns all of
the common stock, is offering 20,000,000 shares and the Company is offering
2,500,000 shares. After completion of the Offering, Chrysler will no longer own
any common stock. The Company will not receive any proceeds from the sale of
shares by Chrysler. There is currently no public market for the shares. The
Company expects that the public offering price will be between $19 and $22 per
share. The market price of the shares after the Offering may be higher or lower
than the public offering price.
The common stock has been approved for listing on the New York Stock
Exchange under the symbol DTG.
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 13.
<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- ----------
<S> <C> <C>
Public Offering Price.............................................. $ $
Underwriting Discounts and Commissions............................. $ $
Proceeds to Chrysler............................................... $ $
Proceeds to the Company............................................ $ $
</TABLE>
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The Managers are offering the shares subject to various conditions and may
reject all or part of any order.
CREDIT SUISSE FIRST BOSTON GOLDMAN SACHS INTERNATIONAL
J.P. MORGAN SECURITIES LTD. SALOMON BROTHERS INTERNATIONAL LIMITED
Prospectus dated , 1997
<PAGE> 108
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................................................................... 4
Risk Factors.......................................................................... 13
Use of Proceeds....................................................................... 19
Dividend Policy....................................................................... 19
Dilution.............................................................................. 19
Capitalization........................................................................ 20
Unaudited Pro Forma Consolidated Financial Statements................................. 21
Selected Consolidated Financial and Operating Data.................................... 27
Management's Discussion and Analysis of Financial Condition and Results of
Operations.......................................................................... 33
Industry Overview..................................................................... 43
Business.............................................................................. 44
Continuing Relationship with Chrysler................................................. 62
Management............................................................................ 64
Description of Capital Stock.......................................................... 68
Description of Certain Indebtedness................................................... 71
Certain U.S. Tax Consequences to Non-U.S. Holders of Common Stock..................... 73
Subscription and Sale................................................................. 76
Notice to Canadian Residents.......................................................... 79
Legal Matters......................................................................... 80
Experts............................................................................... 80
Additional Information................................................................ 80
Index to Consolidated Financial Statements............................................ F-1
</TABLE>
---------------------------
The Company's principal executive offices are located at 5330 East 31st
Street, Tulsa, Oklahoma 74135, (918) 660-7700.
---------------------------
As used in this Prospectus, (a) the "Company" means Dollar Thrifty
Automotive Group, Inc. (successor to Pentastar Transportation Group, Inc.), (b)
"Dollar Thrifty Group" and "Group" mean Dollar Thrifty Automotive Group, Inc.
and its consolidated subsidiaries, (c) "Dollar" means Dollar Rent A Car Systems,
Inc. and (d) "Thrifty" means Thrifty Rent-A-Car System, Inc.
"Blue Chip", "Dollar", the Dollar logo, "DriveWise", "Thrifty" and the
Thrifty logo are existing or pending trademarks or servicemarks of Dollar
Thrifty Group.
---------------------------
Some of the statements contained in this Prospectus under "Prospectus
Summary," "Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business" are forward-looking. They
include statements concerning (a) strategy, (b) liquidity and capital
expenditures, (c) the terms upon which vehicles will be acquired, (d) debt
levels and the ability to obtain financing and service debt, (e) competitive
pressures in the vehicle rental business, (f) prevailing levels of interest
rates, (g) legal proceedings and regulatory matters and (h) general economic
conditions. Actual results may differ materially from those suggested by the
forward-looking statements for various reasons, including those discussed under
"Risk Factors."
---------------------------
Shares should be ready for delivery on or about , 1997, against
payment in immediately available funds.
3
<PAGE> 109
SUBSCRIPTION AND SALE
Under the terms and subject to the conditions contained in a Subscription
Agreement, dated , 1997 (the "Subscription Agreement"), the institutions
named below (the "Managers") have severally but not jointly agreed to purchase
from Chrysler and the Company the following respective numbers of International
Shares (as defined below):
<TABLE>
<CAPTION>
NUMBER OF
MANAGER INTERNATIONAL SHARES
------------------------------------------------------------------- --------------------
<S> <C>
Credit Suisse First Boston (Europe) Limited........................
Goldman Sachs International........................................
J.P. Morgan Securities Ltd. .......................................
Salomon Brothers International Limited ............................
--------------------
Total......................................................... 3,375,000
==============
</TABLE>
Of the 22,500,000 shares of common stock being offered, 3,375,000 shares
(the "International Shares") are initially being offered by the Managers outside
the United States and Canada (the "International Offering") and 19,125,000
shares (the "U.S. Shares") are initially being concurrently offered by the U.S.
Underwriters (the "U.S. Underwriters"), for whom Credit Suisse First Boston
Corporation, Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Salomon
Brothers Inc are acting as representatives (the "Representatives"), in the
United States and Canada (the "U.S. Offering").
The Subscription Agreement provides that the obligations of the Managers
are subject to certain conditions precedent and that the Managers will be
obligated to purchase all the International Shares offered hereby (other than
those shares covered by the over-allotment option described below) if any are
purchased. The Subscription Agreement provides that, in the event of a default
by a Manager, in certain circumstances the purchase commitments of
non-defaulting Managers may be increased or the Subscription Agreement may be
terminated.
The Company and Chrysler have entered into an Underwriting Agreement with
the U.S. Underwriters providing for the concurrent offer and sale of the U.S.
Shares in the United States and Canada. The closing of the U.S. Offering is a
condition to the closing of the International Offering and vice versa.
The Company has granted to the Managers and the U.S. Underwriters an
option, exercisable by Credit Suisse First Boston Corporation, on behalf of the
U.S. Underwriters, expiring at the close of business on the 30th day after the
date of this Prospectus, to purchase up to 3,375,000 additional shares at the
initial public offering price, less the underwriting discounts and commissions.
Such option may be exercised only to cover over-allotments, if any, in the sale
of the shares offered hereby. To the extent that this option to purchase is
exercised, each Manager and each U.S. Underwriter will become obligated to
purchase approximately the same percentage of additional shares being sold to
the Managers and the U.S. Underwriters as the number of International Shares set
forth next to such Manager's name in the preceding table and as the number of
U.S. Shares set forth next to such U.S. Underwriter's name in the corresponding
table in the prospectus relating to the U.S. Offering bears to the sum of the
total number of shares in such tables.
The Company and Chrysler have been advised by Credit Suisse First Boston
Limited, on behalf of the Managers, that the Managers propose to offer the
International Shares outside the United States and Canada initially at the
public offering price set forth on the cover page of this Prospectus and,
through the Managers, to certain dealers at such price less a concession of
$ per share, and the Managers and such dealers may allow a discount of
$ per share on sales to certain other dealers. After the initial public
offering, the public offering price and concession and discount to dealers may
be changed by the Managers.
The public offering price, the aggregate underwriting discounts and
commissions per share and the per share concession and discount to dealers for
the International Offering and the concurrent U.S. Offering will be identical.
Pursuant to an Agreement between the U.S. Underwriters and the Managers (the
"Intersyndicate Agreement") relating to the Offering, changes in the public
offering price, the aggregate underwriting discounts and commissions per share
and the per share concession and discount to dealers will be made only upon the
76
<PAGE> 110
mutual agreement of Credit Suisse First Boston Limited, on behalf of the
Managers, and Credit Suisse First Boston Corporation, on behalf of the U.S.
Underwriters.
Pursuant to the Intersyndicate Agreement, each of the Managers has agreed
that, as part of the distribution of the International Shares and subject to
certain exceptions, it has not offered or sold, and will not offer or sell,
directly or indirectly, any shares or distribute any prospectus relating to the
shares to any person in the United States or Canada or to any other dealer who
does not so agree. Each of the U.S. Underwriters has agreed or will agree that,
as part of the distribution of the U.S. Shares and subject to certain
exceptions, it has not offered or sold, and will not offer or sell, directly or
indirectly, any shares or distribute any prospectus relating to the shares
outside the United States or Canada or to any other dealer who does not so
agree. The foregoing limitations do not apply to stabilization transactions or
to transactions between the Managers and the U.S. Underwriters pursuant to the
Intersyndicate Agreement. As used herein, "United States" means the United
States of America (including the States and the District of Columbia), its
territories, possessions and other areas subject to its jurisdiction. "Canada"
means Canada, its provinces, territories, possessions and other areas subject to
its jurisdiction, and an offer or sale shall be in the United States or Canada
if it is made to (i) any individual resident in the United States or Canada; or
(ii) any corporation, partnership, pension, profit-sharing or other trust or
other entity (including any such entity acting as an investment adviser with
discretionary authority) whose office most directly involved with the purchase
is located in the United States or Canada.
Pursuant to the Intersyndicate Agreement, sales may be made between the
Managers and the U.S. Underwriters of such number of shares as may be mutually
agreed upon. The price of any shares so sold will be the public offering price,
less such amount as may be mutually agreed upon by Credit Suisse First Boston
Limited, on behalf of the Managers, and Credit Suisse First Boston Corporation,
on behalf of the U.S. Underwriters, but not exceeding the selling concession
applicable to such shares. To the extent there are sales between the Managers
and the U.S. Underwriters pursuant to the Intersyndicate Agreement, the number
of shares initially available for sale by the Managers or by the U.S.
Underwriters may be more or less than the amount appearing on the cover page of
this Prospectus. Neither the Managers nor the U.S. Underwriters are obligated to
purchase from the other any unsold shares.
Each of the Managers and the U.S. Underwriters severally represents and
agrees that: (1) it has not offered or sold and prior to the date six months
after the date of issue of the shares will not offer or sell any shares to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act of 1986 with respect to
anything done by it in relation to the shares in, from or otherwise involving
the United Kingdom; and (iii) it has only issued or passed on and will only
issue or pass on in the United Kingdom any document received by it in connection
with the issue of the shares to a person who is of a kind described in Article
11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom such document may otherwise
lawfully be issued or passed on.
Purchasers of shares of common stock outside the United States may be
required to pay stamp taxes and other charges in accordance with the laws and
practices of the country of purchase in addition to the public offering price
set forth on the cover page of this Prospectus.
The Company and certain officers and directors of the Group have agreed
that, other than in connection with grants to be made by the Company under the
LTIP, they will not offer, sell, contract to sell, announce an intention to
sell, pledge or otherwise dispose of, directly or indirectly, or file or cause
to be filed with the Securities and Exchange Commission a registration statement
under the Securities Act relating to, any additional shares of the Company's
common stock or securities or other rights convertible into or exchangeable or
exercisable for any shares of the Company's common stock, or disclose the
intention to make any such offer, sale, pledge, disposal or filing, without the
prior written consent of Credit Suisse First Boston Corporation, until 180 days
after the date of the Offering.
The Company and Chrysler have agreed to indemnify the Managers and the U.S.
Underwriters against certain liabilities, including civil liabilities under the
Securities Act, or to contribute to payments that the
77
<PAGE> 111
Managers and the U.S. Underwriters may be required to make in respect thereof.
The Company and Chrysler have agreed to indemnify each other against certain
liabilities, including civil liabilities under the Securities Act, or to
contribute to payments that the other may be required to make in respect
thereof.
The Managers and the Representatives have informed the Company and Chrysler
that they do not expect discretionary sales by the Managers and the U.S.
Underwriters to exceed 5% of the number of shares offered hereby.
Prior to the Offering, there has been no public market for the shares. The
initial public offering price for the shares will be determined by negotiations
among the Company, Chrysler and Credit Suisse First Boston Corporation, on
behalf of the U.S. Underwriters, and Credit Suisse First Boston Limited, on
behalf of the Managers. In determining such price, consideration will be given
to various factors, including market conditions for initial public offerings,
the history of and prospects for the Group's business, the past and present
operations of the Group, the past and present earnings and current financial
position of the Group, an assessment of the Group's management, the market for
securities of companies in businesses similar to those of the Group, the general
condition of the securities markets and other relevant factors. There can be no
assurance that the initial public offering price will correspond to the price at
which the shares will trade in the public market subsequent to the Offering or
that an active trading market for the shares will develop and continue after the
Offering.
Certain of the Managers and U.S. Underwriters have from time to time
performed, and continue to perform, financial advisory, investment banking and
commercial banking services for companies in the Dollar Thrifty Group, for which
customary compensation has been received. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources -- Financing Plan."
78
<PAGE> 112
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses expected to be incurred in
connection with the issuance and distribution of the common stock registered
hereby, all of which expenses, except for the Commission registration fee, the
New York Stock Exchange listing fee and the NASD filing fee, are estimates:
<TABLE>
<CAPTION>
DESCRIPTION AMOUNT
- -------------------------------------------------------------------------------- ----------
<S> <C>
SEC registration fee............................................................ $ 172,500
New York Stock Exchange listing fee and expenses................................ 157,653
NASD filing fee................................................................. 30,500
Blue Sky fees and expenses (including legal fees)............................... 5,000
Printing and engraving expenses................................................. 275,000
Legal fees and expenses (other than Blue Sky)................................... 850,000
Accounting fees and expenses.................................................... 800,000
Transfer Agent and Registrar's fee.............................................. 20,000
Miscellaneous................................................................... 189,347
----------
Total...................................................................... $2,500,000
=========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware ("GCL")
provides that a corporation has the power to indemnify any director or officer,
or former director or officer, who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) against expenses (including attorney's
fees), judgments, fines or amounts paid in settlement actually and reasonably
incurred by them in connection with the defense of any action by reason of being
or having been directors or officers, if such person shall have acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceedings, provided that such person had no reasonable cause to believe his
conduct was unlawful, except that, if such action shall be in the right of the
corporation, no such indemnification shall be provided as to any claim, issue or
matter as to which such person shall have been judged to have been liable to the
corporation unless and to the extent that the Court of Chancery of the State of
Delaware, or any court in which such suit or action was brought, shall determine
upon application that, in view of all of the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as such
court shall deem proper.
As permitted by Section 102(b)(7) of the GCL, the Certificate of
Incorporation of the Company (filed herewith as Exhibit 3.1) (the "Certificate
of Incorporation") contains a provision to limit the personal liability of
directors of the Company for violations of their fiduciary duty. This provision
eliminates each director's liability for monetary damages for breach of
fiduciary duty as a director, except to the extent such exemption from liability
or limitation thereof is not permitted by the GCL as in effect from time to
time.
The Certificate of Incorporation requires the Company to indemnify its
directors and officers to the fullest extent permitted by the GCL, and requires
the Company, in the case of officers and directors, to advance or reimburse
litigation expenses upon submission by the director or officer of an undertaking
to repay such advances or reimbursements if it is ultimately determined that
indemnification is not available to such director or officer pursuant to the
Certificate of Incorporation. The Company also has insurance policies against
certain liabilities asserted against its directors and officers in their
capacities as such.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
None.
II-1
<PAGE> 113
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits. See Exhibit Index following the Appendix to this registration
statement.
(b) Financial Statement Schedules. See Schedule II, Valuation and
Qualifying Accounts, and related Independent Auditors' Report, following the
Exhibit Index. All other schedules are omitted because the information is not
required or because the information is included in the Consolidated Financial
Statements or Notes thereto.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) To provide to the underwriters at the closing specified in the
underwriting agreements, certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery to each
purchaser.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions described under
Item 14 above, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(c) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Act shall be deemed to be part of this registration statement as of
the time it was declared effective.
(d) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-2
<PAGE> 114
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused Amendment No. 1 to the registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, New York, on November 26, 1997.
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC.
By: /s/ STEVEN B. HILDEBRAND
------------------------------------
Title: Vice President, Chief
Financial Officer and
Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ----------------------------------- ------------------------------------- ------------------
<C> <S> <C>
/s/ JOSEPH E. CAPPY* Chairman of the Board, Chief November 26, 1997
- ----------------------------------- Executive Officer, President and
Joseph E. Cappy Director (Principal Executive
Officer)
/s/ DONALD M. HIMELFARB* Executive Vice President and Director November 26, 1997
- -----------------------------------
Donald M. Himelfarb
/s/ GARY L. PAXTON* Executive Vice President and Director November 26, 1997
- -----------------------------------
Gary L. Paxton
/s/ STEVEN B. HILDEBRAND Vice President, Chief Financial November 26, 1997
- ----------------------------------- Officer and Treasurer (Principal
Steven B. Hildebrand Financial Officer and Principal
Accounting Officer)
/s/ THOMAS P. CAPO* Director November 26, 1997
- -----------------------------------
Thomas P. Capo
*By: /s/ STEVEN B. HILDEBRAND Attorney-In-Fact
- -----------------------------------
Steven B. Hildebrand
</TABLE>
II-3
<PAGE> 115
APPENDIX DESCRIBING GRAPHIC MATERIAL
PURSUANT TO RULE 304 OF REGULATION S-T
INSIDE FRONT COVER
Photo at top: Dollar advertisement depicting actor Chevy Chase.
Photo at bottom left: Thrifty advertisement depicting vacation destinations and
Thrifty location.
Photo at bottom right: Thrifty advertisement depicting Chrysler vehicles.
INSIDE BACK COVER
Photo at top left: Dollar counter at Orlando Sanford International Airport.
Photo at top right: Dollar location at Newark International Airport.
Photo at bottom left: Thrifty counter at Tulsa International Airport.
Photo at bottom right: Thrifty location at Memphis International Airport.
II-4
<PAGE> 116
EXHIBIT INDEX
The Company agrees to furnish a copy of all agreements relating to
long-term debt upon request of the Commission.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -------------------------------------------------------------------------------
<C> <S>
1.1 Form of U.S. Underwriting Agreement*
1.2 Form of Subscription Agreement*
3.1 Certificate of Incorporation of the Company***
3.2 By-Laws of the Company***
4.1 Form of Certificate of Common Stock*
4.2 Base Indenture dated as of December 13, 1995 between Thrifty Car Rental Finance
Corporation and Bankers Trust Company**
4.3 Series 1995-1 Supplement to Base Indenture dated as of December 13, 1995
between Thrifty Car Rental Finance Corporation and Bankers Trust Company**
4.4 Master Motor Vehicle Lease and Servicing Agreement dated as of December 13,
1995 between Thrifty Car Rental Finance Corporation and Thrifty**
4.5 Master Collateral Agency Agreement dated as of December 13, 1995 between
Thrifty Car Rental Finance Corporation and Bankers Trust Company**
4.6 Form of Revolving Credit Agreement among the Company, Dollar, Thrifty and the
Institutions named therein*
4.7 Form of Series 1997-1 Supplement to Base Indenture between Rental Car Finance
Corp. and Bankers Trust Company*
4.8 Form of Master Motor Vehicle Lease and Servicing Agreement among the Company,
Dollar, Thrifty and Rental Car Finance Corp.*
5 Opinion of Debevoise & Plimpton regarding legality of the Common Stock*
10.1 Vehicle Supply Agreement between Chrysler and Dollar***+
10.2 Amended and Restated Vehicle Supply Agreement between Chrysler and Thrifty***+
10.3 [Reserved]
10.4 [Reserved]
10.5 [Reserved]
10.6 [Reserved]
10.7 [Reserved]
10.8 Pentastar Transportation Group, Inc. Deferred Compensation Plan***
10.9 Pentastar Transportation Group, Inc. Executive Retention Plan**
10.10 Dollar Thrifty Automotive Group, Inc. Long-Term Incentive Plan*
10.11 Tax Sharing and Disaffiliation Agreement between Chrysler Corporation and
Dollar Thrifty Automotive Group, Inc.**
10.12 Form of Indemnification Agreement between the Company and Chrysler*
21 Subsidiaries of the Company***
23.1 Consent of Deloitte & Touche LLP, Independent Auditors of the Company**
23.2 Consent of Debevoise & Plimpton (included in Exhibit 5)*
23.3 Consent of Donovan Leisure Newton & Irvine LLP**
24 Powers of Attorney***
27.1 Financial Data Schedule***
</TABLE>
- -------------------------
* To be filed by amendment
** Filed herewith
*** Previously filed
+ The Company has applied for confidential treatment of portions of this
Exhibit. Accordingly, portions thereof have been omitted and filed
separately.
II-5
<PAGE> 117
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholder of
Dollar Thrifty Automotive Group, Inc.:
We have audited the consolidated financial statements of Dollar Thrifty
Automotive Group, Inc. and subsidiaries (successor to Pentastar Transportation
Group, Inc. and subsidiaries) ("the Company") as of December 31, 1995 and 1996,
and for each of the three years in the period ended December 31, 1996, and have
issued our report thereon dated November 6, 1997 (included elsewhere in this
Registration Statement). Our audits also included the financial statement
schedule listed in Item 16 of this Registration Statement. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all material respects,
the information set forth therein.
/s/ Deloitte & Touche LLP
November 6, 1997
Tulsa, Oklahoma
<PAGE> 118
SCHEDULE II
DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. AND SUBSIDIARIES
(SUCCESSOR TO PENTASTAR TRANSPORTATION GROUP, INC. AND SUBSIDIARIES)
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
BALANCE AT ADDITIONS BALANCE AT
BEGINNING CHARGED TO END OF
OF YEAR INCOME DEDUCTIONS YEAR
---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
1996
Allowance for doubtful accounts..................... $19,340 $ 8,404 $(11,122) $16,622
======= ======= ======== =======
Public liability and property damage................ $59,349 $38,462 $(34,576) $63,235
======= ======= ======== =======
1995
Allowance for doubtful accounts..................... $19,962 $ 5,434 $ (6,056) $19,340
======= ======= ======== =======
Public liability and property damage................ $58,057 $31,036 $(29,744) $59,349
======= ======= ======== =======
1994
Allowance for doubtful accounts..................... $21,174 $ 9,737 $(10,949) $19,962
======= ======= ======== =======
Public liability and property damage................ $67,680 $32,227 $(41,850) $58,057
======= ======= ======== =======
</TABLE>
Deductions in 1994 include $1,020,000 and $9,307,000 in the allowance for
doubtful accounts and public liability and property damage, respectively, due to
the sale of Snappy Car Rental, Inc.
<PAGE> 1
EXHIBIT 4.2
[EXECUTION COPY]
THRIFTY CAR RENTAL FINANCE CORPORATION,
as Issuer
and
BANKERS TRUST COMPANY,
as Trustee
--------------------------
BASE INDENTURE
Dated as of December 13, 1995
--------------------------
Rental Car Asset Backed Notes
(Issuable in Series)
<PAGE> 2
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
1.1. Definitions.......................................................1
1.2. Cross-References..................................................2
1.3. Accounting and Financial Determinations;
No Duplication.................................................2
1.4. Rules of Construction.............................................2
ARTICLE 2.
THE NOTES
2.1. Designation and Terms of Notes....................................3
2.2. Notes Issuable in Series..........................................3
2.3. Supplement For Each Series........................................7
2.4. Execution and Authentication......................................9
2.5. Form of Notes; Book Entry Provisions............................ 10
2.6. Registrar and Paying Agent...................................... 12
2.7. Paying Agent to Hold Money in Trust............................. 12
2.8. Noteholder Lists................................................ 14
2.9. Transfer and Exchange........................................... 14
2.10. Certain Purchaser Representations and
Certifications............................................... 19
2.11. Legending of Notes.............................................. 21
2.12. Replacement Notes............................................... 22
2.13. Treasury Notes.................................................. 23
2.14. Temporary Notes................................................. 23
2.15. Cancellation.................................................... 24
2.16. Principal and Interest.......................................... 24
2.17. Book-Entry Notes................................................ 25
2.18. Notices to Clearing Agency...................................... 27
2.19. Definitive Notes................................................ 28
2.20. Tax Treatment................................................... 30
ARTICLE 3.
SECURITY
3.1. Grant of Security Interest...................................... 30
3.2. Certain Rights and Obligations of Thrifty Finance
Unaffected................................................... 32
3.3. Performance of Agreement........................................ 33
3.4. Further Assurances.............................................. 33
3.5. Release of Collateral........................................... 34
3.6. Stamp, Other Similar Taxes and Filing Fees...................... 34
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<PAGE> 3
Section Page
- ------- ----
ARTICLE 4.
ALLOCATION AND APPLICATION OF COLLECTIONS
4.1. Collection Account.............................................. 35
4.2. Collections and Allocations..................................... 37
4.3. Determination of Monthly Interest............................... 38
4.4. Determination of Monthly Principal.............................. 38
4.5. Paired Series................................................... 38
ARTICLE 5.
DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS
5.1. Distributions in General........................................ 39
5.2. Distributions to Retained Distribution Account.................. 40
5.3. Optional Repurchase of Notes.................................... 41
5.4. Monthly Noteholders' Statement.................................. 42
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES
6.1. Corporate Existence and Power................................... 44
6.2. Corporate and Governmental Authorization........................ 45
6.3. Binding Effect.................................................. 45
6.4. Litigation...................................................... 45
6.5. Employee Benefit Plans.......................................... 46
6.6. Tax Filings and Expenses........................................ 46
6.7. Disclosure...................................................... 46
6.8. Investment Company Act; Securities Act.......................... 47
6.9. Regulations G, T, U and X....................................... 47
6.10. No Consent...................................................... 47
6.11. No Violation of Charter, etc.................................... 47
6.12. Solvency........................................................ 48
6.13. Stock Ownership; Subsidiary..................................... 48
6.14. Security Interests.............................................. 48
6.15. Binding Effect of Lease......................................... 49
6.16. Non-Existence of Other Agreements............................... 49
6.17. Vehicle Disposition Programs.................................... 49
6.18. Governmental Authorization...................................... 49
6.19. Compliance with Laws............................................ 50
ARTICLE 7.
COVENANTS
7.1. Payment of Notes................................................ 50
7.2. Maintenance of Office or Agency................................. 50
7.3. Information..................................................... 51
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<PAGE> 4
Section Page
- ------- ----
7.4. Payment of Obligations.......................................... 52
7.5. Maintenance of Property......................................... 52
7.6. Maintenance of Existence; Foreign Qualification................. 53
7.7. Compliance with Laws............................................ 53
7.8. Inspection of Property, Books and Records....................... 53
7.9. Compliance with Related Documents............................... 53
7.10. Notice of Defaults.............................................. 54
7.11. Notice of Material Proceedings.................................. 54
7.12. Further Requests................................................ 54
7.13. Further Assurances.............................................. 54
7.14. Vehicle Disposition Programs; Eligible
Manufacturers................................................ 55
7.15. Liens........................................................... 57
7.16. Other Indebtedness.............................................. 57
7.17. Mergers; Consolidations......................................... 57
7.18. Sales of Assets................................................. 58
7.19. Acquisition of Assets........................................... 58
7.20. Dividends, Officers' Compensation, etc.......................... 58
7.21. Name; Principal Office.......................................... 58
7.22. Organizational Documents........................................ 59
7.23. Investments..................................................... 59
7.24. No Other Agreements............................................. 59
7.25. Other Business.................................................. 59
7.26. Maintenance of Separate Existence............................... 60
7.27. Rule 144A Information Requirement............................... 61
7.28. Acquisition of Vehicles by Thrifty Finance...................... 62
ARTICLE 8.
AMORTIZATION EVENTS AND REMEDIES
8.1. Amortization Events............................................. 62
8.2. Rights of the Trustee upon Amortization Event or
Certain Other Events of Default.............................. 64
8.3. Special Provisions Concerning Sale of Vehicles.................. 67
8.4. Other Remedies.................................................. 69
8.5. Waiver of Past Events........................................... 70
8.6. Control by Required Beneficiaries and Required
Noteholders.................................................. 70
8.7. Limitation on Suits............................................. 70
8.8. Unconditional Rights of Holders to Receive Payment.............. 71
8.9. Collection Suit by the Trustee.................................. 71
8.10. The Trustee May File Proofs of Claim............................ 71
8.11. Priorities...................................................... 72
8.12. Undertaking for Costs........................................... 72
8.13. Rights and Remedies Cumulative.................................. 73
8.14. Delay or Omission Not Waiver.................................... 73
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<PAGE> 5
Section Page
- ------- ----
ARTICLE 9.
THE TRUSTEE
9.1. Duties of the Trustee........................................... 73
9.2. Rights of the Trustee........................................... 75
9.3. Individual Rights of the Trustee................................ 76
9.4. Notice of Amortization Events and Potential
Amortization Events.......................................... 77
9.5. Compensation.................................................... 77
9.6. Replacement of the Trustee...................................... 78
9.7. Successor Trustee by Merger, etc................................ 79
9.8. Eligibility Disqualification.................................... 79
9.9. Appointment of Co-Trustee or Separate Trustee................... 79
9.10. Representations and Warranties of Trustee....................... 81
9.11. Knowledge of the Trustee........................................ 82
ARTICLE 10.
DISCHARGE OF INDENTURE
10.1. Termination of Thrifty Finance's Obligations.................... 82
10.2. Application of Trust Money...................................... 83
10.3. Repayment to Thrifty Finance.................................... 83
ARTICLE 11.
AMENDMENTS
11.1. Without Consent of the Noteholders.............................. 84
11.2. With Consent of the Noteholders................................. 85
11.3. Supplements..................................................... 87
11.4. Revocation and Effect of Consents............................... 87
11.5. Notation on or Exchange of Notes................................ 87
11.6. The Trustee to Sign Amendments, etc............................. 87
ARTICLE 12.
MISCELLANEOUS
12.1. Notices......................................................... 88
12.2. Communication by Noteholders With Other
Noteholders.................................................. 89
12.3. Certificate and Opinion as to Conditions Precedent.............. 90
12.4. Statements Required in Certificate or Opinion................... 90
12.5. Rules by the Trustee and the Paying Agent....................... 91
12.6. Duplicate Originals............................................. 91
12.7. Benefits of Indenture........................................... 91
12.8. Payment on Business Day......................................... 91
12.9. Governing Law................................................... 91
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<PAGE> 6
Section Page
- ------- ----
12.10. No Adverse Interpretation of Other Agreements................... 91
12.11. Successors...................................................... 92
12.12. Severability.................................................... 92
12.13. Counterpart Originals........................................... 92
12.14. Table of Contents, Headings, etc................................ 92
12.15. Termination; Collateral......................................... 92
12.16. No Bankruptcy Petition Against Thrifty Finance.................. 93
12.17. No Recourse..................................................... 93
12.18. Confidentiality................................................. 94
-v-
<PAGE> 7
EXHIBITS AND SCHEDULES
SCHEDULE 1.1 DEFINITIONS LIST
SCHEDULE 6.5 PENSION PLANS
SCHEDULE 6.7 DISCLOSURE
SCHEDULE 6.14 PRINCIPAL PLACE OF BUSINESS
SCHEDULE 6.14b SECURITY INTEREST FILINGS
SCHEDULE 6.14d THRIFTY FINANCE ADDRESSES
SCHEDULE 6.16 OTHER AGREEMENTS
EXHIBIT A-1 FORM OF TRANSFER CERTIFICATE (ss.2.9)
EXHIBIT A-2 RESERVED
EXHIBIT A-3 FORM OF TRANSFER CERTIFICATE FOR EXCHANGE
OR TRANSFER FROM RESTRICTED GLOBAL NOTE TO
TEMPORARY GLOBAL NOTE (ss.2.9)
EXHIBIT A-4 FORM OF TRANSFER CERTIFICATE (RESTRICTED GLOBAL
NOTE TO PERMANENT GLOBAL NOTE) (ss.2.9)
EXHIBIT A-5 FORM OF TRANSFER CERTIFICATE FOR TRANSFER OR
EXCHANGE (TEMPORARY GLOBAL NOTE TO RESTRICTED
GLOBAL NOTE) (ss.2.9)
EXHIBIT B FORM OF DEMAND NOTE
EXHIBIT C RESERVED
EXHIBIT D FORM OF MONTHLY NOTEHOLDERS' STATEMENT (ss.5.4)
EXHIBIT E FORM OF CLEARING SYSTEM CERTIFICATE
EXHIBIT F FORM OF CERTIFICATE OF BENEFICIAL OWNERSHIP
-vi-
<PAGE> 8
This BASE INDENTURE, dated as of December 13, 1995, between Thrifty
Car Rental Finance Corporation, a special purpose Oklahoma corporation, as
issuer ("Thrifty Finance") and BANKERS TRUST COMPANY, a New York banking
corporation, as trustee (in such capacity, the "Trustee").
W I T N E S S E T H:
WHEREAS, Thrifty Finance intends to refinance the Existing Fleet
(such capitalized term, together with all other capitalized terms used herein,
shall have the meanings assigned thereto in Article 1) and to purchase, and
finance the purchase of, additional Vehicles from one or more Manufacturers
pursuant to the Lease, and to lease the Vehicles to the lessee thereunder;
WHEREAS, Thrifty Finance has, in connection therewith, duly
authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of one or more series of Thrifty Finance's Rental Car
Asset Backed Notes (the "Notes"), issuable as provided in this Indenture; and
WHEREAS, all things necessary to make this Indenture a legal, valid
and binding agreement of Thrifty Finance, in accordance with its terms, have
been done, and Thrifty Finance proposes to do all the things necessary to make
the Notes, when executed by Thrifty Finance and authenticated and delivered by
the Trustee hereunder and duly issued by Thrifty Finance, the legal, valid and
binding obligations of Thrifty Finance as hereinafter provided;
NOW, THEREFORE, for and in consideration of the premises and the
receipt of the Notes by the Noteholders, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Noteholders, as follows:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
Certain capitalized terms used herein (including the preamble and
the recitals hereto) shall have the meanings assigned to such terms in the
Definitions List attached hereto as Schedule 1 (the "Definitions List"), as such
Definitions List may be amended or modified from time to time in accordance with
the provisions hereof.
<PAGE> 9
Section 1.2. Cross-References.
Unless otherwise specified, references in this Indenture and in each
other Related Document to any Article, Section or Schedule are references to
such Article, Section or Schedule of this Indenture or such other Related
Document, as the case may be, and unless otherwise specified, references in any
Article, Section, Schedule or definition to any clause are references to such
clause of such Article, Section or definition.
Section 1.3. Accounting and Financial Determinations; No
Duplication.
Unless otherwise specified, (a) all accounting terms used herein
shall be interpreted, all accounting determinations and computations hereunder
shall be made, and all financial statements required to be delivered hereunder
shall be prepared, in conformity with GAAP and (b) all accounting determinations
and computations hereunder or under any other Related Documents shall be made
without duplication.
Section 1.4. Rules of Construction.
In this Indenture, unless the context otherwise requires:
(a) the singular includes the plural and vice versa;
(b) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
this Agreement, and reference to any Person in a particular capacity only refers
to such Person in such capacity;
(c) reference to any gender includes the other gender;
(d) reference to any Requirement of Law means such Requirement of
Law as amended, modified, codified or reenacted, in whole or in part, and in
effect from time to time;
(e) "including" (and, with correlative meaning, "include") means
including without limiting the generality of any description preceding such
term;
(f) "or" is not exclusive;
(g) provisions apply to successive events and transactions; and
-2-
<PAGE> 10
(h) with respect to the determination of any period of time, "from"
means "from and including" and "to" and "through" mean "to but excluding".
ARTICLE 2.
THE NOTES
Section 2.1. Designation and Terms of Notes.
Each Series of Notes shall be substantially in the form specified in
the applicable Supplement and shall bear, upon its face, the designation for
such Series to which it belongs so selected by Thrifty Finance. Except as
specified in any Supplement for a related Series, all Notes of any Series shall
be equally and ratably entitled as provided herein to the benefits hereof
without preference, priority or distinction on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Indenture and the applicable Supplement. The aggregate
principal amount of Notes which may be authenticated and delivered under this
Indenture is unlimited. The Notes shall be in denominations of $250,000 and
integral multiples of $1,000 in excess thereof.
Section 2.2. Notes Issuable in Series.
The Notes may be issued in one or more Series. Each Series of Notes
shall be created by a Supplement. Notes of a new Series may from time to time be
executed by Thrifty Finance and delivered to the Trustee for authentication, and
thereupon the same shall be authenticated and delivered by the Trustee upon the
receipt by the Trustee of a Company Order at least three (3) Business Days in
advance of the Closing Date for such Series and upon delivery by Thrifty Finance
to the Trustee, and receipt by the Trustee, of the following:
(a) a Company Order authorizing and directing the authentication and
delivery of the Notes of such new Series by the Trustee and specifying the
designation of such new Series, the aggregate principal amount of Notes of such
new Series to be authenticated and the Note Rate (or the method for allocating
interest payments or other cash flow) with respect to such new Series;
(b) a Supplement in form reasonably satisfactory to the Trustee
executed by Thrifty Finance and the Trustee and specifying the Principal Terms
of such new Series;
-3-
<PAGE> 11
(c) with respect to the initial Series of Notes, the Master
Collateral Agency Agreement executed by each of the parties thereto;
(d) the related Enhancement Agreement, if any, executed by each of
the parties thereto, other than the Trustee;
(e) written confirmation that the Rating Agencies Condition shall
have been satisfied with respect to such issuance;
(f) an Officers' Certificate from Thrifty Finance dated as of the
applicable Closing Date to the effect that (i) no Amortization Event, Asset
Amount Deficiency, Enhancement Agreement Event of Default, if applicable, Lease
Event of Default, Manufacturer Event of Default, Potential Amortization Event,
Potential Enhancement Agreement Event of Default or Potential Lease Event of
Default is continuing or will occur as a result of the issuance of the new
Series of Notes, (ii) the issuance of the new Series of Notes will not have a
material adverse effect on the over-collateralization of any Series of Notes
with respect to which credit enhancement is provided by over-collateralization
or result in any breach of any of the terms, conditions or provisions of or
constitute a default under any indenture, mortgage, deed of trust or other
agreement or instrument to which Thrifty Finance is a party or by which it or
its property is bound or any order of any court or administrative agency entered
in any suit, action or other judicial or administrative proceeding to which
Thrifty Finance is a party or by which it or its property may be bound or to
which it or its property may be subject, (iii) all conditions precedent provided
in this Base Indenture and the related Supplement with respect to the
authentication and delivery of the new Series of Notes have been complied with
and (iv) if such new Series of Notes is a Segregated Series, the criteria used
to select the Segregated Collateral will not have a material adverse effect on
the quality of the Collateral securing any other outstanding Series of Notes;
(g) unless otherwise specified in the related Supplement, an Opinion
of Counsel, subject to the assumptions and qualifications stated therein, and in
a form reasonably acceptable to the Trustee, dated the applicable Closing Date,
substantially to the effect that:
-4-
<PAGE> 12
(i) (A) the new Series of Notes will be treated as indebtedness of
Thrifty Finance for Federal income tax purposes, and (B) the issuance of
such Series will not adversely affect the Federal income tax
characterization of the Outstanding Notes of any Series;
(ii) all instruments furnished to the Trustee conform to the
requirements of this Base Indenture and the related Supplement and
constitute all the documents required to be delivered hereunder and
thereunder for the Trustee to authenticate and deliver the new Series of
Notes, and all conditions precedent provided for in this Base Indenture
and the related Supplement with respect to the authentication and delivery
of the new Series of Notes have been complied with;
(iii) each of Thrifty Finance, Thrifty, the Servicer, and the Lessee
is duly incorporated under the jurisdiction of its incorporation and (as
applicable) has the corporate power and authority to execute and deliver
the related Supplement (and, in the case of the first Series to be
authenticated hereunder, this Base Indenture) and each other Related
Document to which it is a party and to issue the new Series of Notes;
(iv) the related Supplement, this Base Indenture and each of the
other Related Documents to which Thrifty Finance, Thrifty, the Servicer or
the Lessee is a party have been duly authorized, executed and delivered by
Thrifty Finance, Thrifty, the Servicer or the Lessee, as the case may be;
(v) the new Series of Notes has been duly authorized and executed
and, when authenticated and delivered in accordance with the provisions of
this Base Indenture and the related Supplement, will constitute valid,
binding and enforceable obligations of Thrifty Finance entitled to the
benefits of this Base Indenture and the related Supplement, subject, in
the case of enforcement, to bankruptcy, insolvency, reorganization,
moratorium and other similar
-5-
<PAGE> 13
laws affecting creditor's rights generally and to general principles of
equity;
(vi) this Base Indenture, the related Supplement and each of the
other Related Documents to which Thrifty Finance, Thrifty, the Servicer or
the Lessee is a party are legal, valid and binding agreements of Thrifty
Finance, Thrifty, the Servicer or the Lessee, as the case may be,
enforceable in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights generally and to general principles of equity;
(vii) this Base Indenture and the related Supplement are not
required to be registered under the Trust Indenture Act;
(viii) the new Series of Notes (A) is not required to be registered
under the Securities Act and (B) has been offered pursuant to a valid
exemption under the Securities Act;
(ix) as to the new Series of Notes and any Outstanding Series of
Notes, the opinions of counsel relating to (A) the validity, perfection
and priority of security interests, (B) the nature of the lease of
Acquired Vehicles pursuant to the Lease as a "true operating lease" and
not as a financing arrangement, (C) the analysis of substantive
consolidation of the assets of Thrifty Finance with the assets of the
Lessee in the event of the insolvency of the Lessee, (D) the status of
Thrifty Finance as not being an investment company or controlled by an
investment company under the Investment Company Act, (E) there being no
pending or threatened litigation which, if adversely determined, would
materially and adversely affect Thrifty Finance's ability to perform its
obligations under any of the Related Documents, and (F) the absence of any
material conflict with or violation of any court decree, injunction, writ
or order applicable to Thrifty Finance or any material breach or default
of any indenture, agreement or other instrument as a result of the
-6-
<PAGE> 14
issuance of such Series of Notes by Thrifty Finance, as furnished by
counsel retained by Thrifty Finance in connection with the issuance of the
initial Series of Notes, are reaffirmed in all respects; and
(x) such other matters as the Trustee may reasonably require; and
(h) such other matters as the Trustee may reasonably require.
Upon satisfaction of such conditions, the Trustee shall authenticate and
deliver, as provided above, such Series of Notes.
Section 2.3. Supplement For Each Series.
(a) In conjunction with the issuance of a new Series, the parties
hereto shall execute a Supplement, which shall specify the relevant terms with
respect to such new Series of Notes, which shall include, as applicable: (i) its
name or designation, (ii) the aggregate principal amount of Notes of such
Series, (iii) the Note Rate (or the method for calculating such Note Rate) with
respect to such Series, (iv) the interest payment date or dates and the date or
dates from which interest shall accrue, (v) the method of allocating Collections
with respect to such Series and the method by which the principal amount of
Notes of such Series shall amortize or accrete, (vi) the names of any accounts
to be used by such Series and the terms governing the operation of any such
account, (vii) the Servicing Fee Percentage, (viii) the terms of any
Enhancement, (ix) the Enhancement Provider, if any, (x) whether the Notes may be
issued in bearer form and any limitations imposed thereon, (xi) the Series
Termination Date, (xii) whether the Notes will be issued in multiple classes
and, if so, the method of allocating Collections among such classes, (xiii)
whether such Series of Notes shall have the benefit of Segregated Collateral and
(xiv) any other relevant terms of such Series of Notes that do not (subject to
Section 2.3(b) and Article 11 hereof) change the terms of any Outstanding Series
of Notes or otherwise materially conflict with the provisions of this Indenture
and that do not prevent the satisfaction of the Rating Agencies Condition with
respect to the issuance of such new Series (all such terms, the "Principal
Terms" of such Series);
(b) (i) A Supplement may specify that the related Series of Notes
(each, a "Segregated Series") will have Collateral and Master Collateral that is
to be segregated by the Servicer, the Master Collateral Agent and the Trustee
and be solely for the benefit of the Noteholders of such Segregated
-7-
<PAGE> 15
Series of Notes (such Collateral and Master Collateral being referred to as
"Segregated Collateral"); provided, however, that no such Segregated Series of
Notes will be issued unless (x) the Rating Agencies Condition is met, (y)
Thrifty Finance shall have delivered to the Trustee an Officers' Certificate to
the effect that the issuance of such Segregated Series of Notes will not have a
material adverse effect upon the Noteholders of any Series of Notes outstanding
at the time of the issuance of the Segregated Series of Notes, and (z) the
applicable Supplement provides, in form satisfactory to the Trustee, for the
changes and modifications to the Indenture and the other Related Documents as
are described in clause (ii) below.
(ii) In the event any Segregated Series of Notes is issued, the
related Supplement will provide that (A) the Servicer, the Master Collateral
Agent and the Trustee will segregate the Collateral and Master Collateral for
such Segregated Series of Notes such that (x) the Segregated Series of Notes
will be secured solely in part or wholly by the Segregated Collateral applicable
to such Segregated Series of Notes and (y) the Noteholders with respect to any
other Series of Notes will not be entitled to the benefit of such Segregated
Collateral, (B) the Trustee will adjust the allocations and distributions to be
made under the Indenture at the direction of the Servicer so that the
Noteholders with respect to the Segregated Series of Notes will be entitled to
allocations and distributions arising in part or wholly from the Segregated
Collateral applicable to such Segregated Series of Notes and the Noteholders
with respect to all other Series of Notes will be entitled to allocations and
distributions arising solely from the Collateral and Master Collateral other
than the Segregated Collateral, (C) the Trustee will act as collateral agent
under the Indenture and as master collateral agent under the Master Collateral
Agency Agreement (and in such capacity the Trustee and the Master Collateral
Agent, as applicable, may (x) establish and maintain a master collection
account, and one or more segregated collection accounts, into which Collections
allocated to all Series of Notes will be deposited and, after such deposit,
further allocated among one or more Segregated Series of Notes and all other
Series of Notes and, if so provided in such related Supplement, for the benefit
of the Segregated Series, and (y) hold its lien encumbering and its rights and
interests in the Collateral and Master Collateral other than the Segregated
Collateral for the benefit of all Series other than the Segregated Series of
Notes and hold its lien encumbering and its rights and interests in the
Segregated Collateral for the benefit of the Segregated Series of Notes), (D)
the Servicer and the Master Collateral Agent will each designate on its computer
system the source of the funds for the financing of each Vehicle (as between one
or more Segregated Series of Notes and the non-Segregated Series of Notes), (E)
the Noteholders of any
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Segregated Series of Notes will, subject to the limitations contained in this
Base Indenture and the related Supplement, be entitled to cause the Trustee and
the Master Collateral Agent, as applicable, to exercise remedies under the
Indenture and the Master Collateral Agency Agreement, respectively, on behalf of
such Segregated Series of Notes, (F) separate monthly reports and other
information will be furnished under the Indenture for the Segregated Collateral,
which monthly reports and other information will contain substantially the same
types of information as the monthly reports provided under the Indenture prior
to the issuance of such Segregated Series of Notes, (G) a separate segregated
Motor Vehicle Lease and Servicing Agreement pertaining, as applicable, in part
or wholly to the Segregated Collateral will be executed and delivered by Thrifty
Finance, as lessor and the Lessee, as lessee, (H) to the extent specified in the
Supplement for such Segregated Series of Notes, such actions will be taken as
are necessary to perfect the Trustee's interest on behalf of the Noteholders of
such Segregated Series of Notes in the Segregated Collateral, (I) amendments
will be made to this Indenture and the other Related Documents, if necessary, to
reflect the foregoing, which amendments will, among other things, provide for
revisions to the terms "Aggregate Asset Amount", "Collateral", "Collection
Account", "Lease", "Related Documents", "Required Asset Amount", "Required
Beneficiaries", and "Thrifty Finance Agreements" and such other terms as may be
appropriate and (J) references herein to "all" Series of Notes (other than as
specifically stated herein) shall be modified to refer to all Series of Notes
other than any Segregated Series of Notes which may hereafter be issued (or as
otherwise provided in the related Supplement).
Section 2.4. Execution and Authentication.
(a) An Authorized Officer shall execute the Notes for Thrifty
Finance by manual or facsimile signature. If an Authorized Officer whose
signature is on a Note no longer holds that office at the time the Note is
authenticated, the Note shall nevertheless be valid.
(b) At any time and from time to time after the execution and
delivery of this Indenture, Thrifty Finance may deliver Notes of any particular
Series executed by Thrifty Finance to the Trustee for authentication, together
with one or more Company Orders for the authentication and delivery of such
Notes, and the Trustee, in accordance with such Company Order and this
Indenture, shall authenticate and deliver such Notes.
(c) No Note shall be entitled to any benefit under this Indenture or
be valid for any purpose unless there appears on such Note a certificate of
authentication substantially in the form provided for herein, duly executed by
the Trustee by the
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manual signature of a Trust Officer (and the listing agent in Luxembourg (the
"Luxembourg Agent"), if such Notes are listed on the Luxembourg Stock Exchange).
Such signatures on such certificate shall be conclusive evidence, and the only
evidence, that the Note has been duly authenticated under this Indenture. The
Trustee may appoint an authenticating agent to authenticate Notes. Unless
limited by the term of such appointment, an authenticating agent may
authenticate Notes 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 an Agent to deal with
Thrifty Finance or an Affiliate of Thrifty Finance. The Trustee's certificate of
authentication shall be in substantially the following form:
This is one of the Notes of a series issued under the within
mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:
-----------------------------------
Authorized Signature
(d) Each Note shall be dated and issued as of the date of its
authentication by the Trustee.
(e) Notwithstanding the foregoing, if any Note shall have been
authenticated and delivered hereunder but never issued and sold by Thrifty
Finance, and Thrifty Finance shall deliver such Note to the Trustee for
cancellation as provided in Section 2.15, together with a written statement
(which need not comply with Section 12.3 and need not be accompanied by an
Opinion of Counsel) stating that such Note has never been issued and sold by
Thrifty Finance, for all purposes of this Indenture such Note shall be deemed
never to have been authenticated and delivered hereunder and shall not be
entitled to the benefits of this Indenture.
Section 2.5. Form of Notes; Book Entry Provisions.
(a) Restricted Global Note. Except as otherwise provided in Section
2.19, any Series of Notes, or any class of such Series to be issued and sold
initially to the Initial Purchasers, and thereafter to qualified institutional
buyers within the meaning of, and in reliance on, Rule 144A under the Securities
Act ("Rule 144A"), or to be issued and sold initially to institutional
accredited investors within the meaning of Regulation D under the Securities Act
who are qualified institutional buyers within the meaning of Rule 144A as
provided
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in the applicable Supplement, shall be issued in the form of and represented by
one or more permanent global Notes in fully registered form without interest
coupons (each, a "Restricted Global Note"), substantially in the form set forth
in the applicable Supplement, with such legends as may be applicable thereto,
which shall be deposited on behalf of the subscribers for the Notes represented
thereby with a custodian for DTC, and registered in the name of DTC or a nominee
of DTC, duly executed by Thrifty Finance and authenticated by the Trustee as
provided in Section 2.4 for credit to the accounts of the subscribers at DTC.
The aggregate initial principal amount of a Restricted Global Note may from time
to time be increased or decreased by adjustments made on the records of the
custodian for DTC, DTC or its nominee, as the case may be, as hereinafter
provided.
(b) Temporary Global Note; Permanent Global Note. Except as
otherwise provided in Section 2.19, any Series of Notes, or any class of such
Series, offered and sold in transactions outside of the United States will be
offered and sold in reliance on Regulation S ("Regulation S") under the
Securities Act and shall initially be issued in the form of one or more
temporary global Notes (each, a "Temporary Global Note") in fully registered
form without interest coupons substantially in the form set forth in the
applicable Supplement with such legends as may be applicable thereto, registered
in the name of DTC or a nominee of DTC, duly executed by Thrifty Finance and
authenticated by the Trustee as provided in Section 2.4 and deposited with a
custodian for DTC, for credit to the subscribers' accounts at Morgan Guaranty
Trust Company of New York, Brussels office, as operator of Euroclear or at
Cedel. Interests in a Temporary Global Note will be exchangeable, in whole or in
part, for interests in a permanent global note (a "Permanent Global Note") in
fully registered form without interest coupons, representing Notes of the same
Series, substantially in the form set forth in the applicable Supplement, in
accordance with the provisions of such Temporary Global Note and this Base
Indenture. Until the Exchange Date, interests in a Temporary Global Note may
only be held by the agent members of Euroclear and Cedel. The aggregate initial
principal amount of the Temporary Global Note and the Permanent Global Note may
from time to time be increased or decreased by adjustments made on the records
of the custodian for DTC, DTC or its nominee, as the case may be, as hereinafter
provided.
(c) Any Series of Notes, or any class of such Series, issued
hereunder may be issued as definitive, fully registered Notes without interest
coupons ("Definitive Notes") only in accordance with Section 2.19.
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Section 2.6. Registrar and Paying Agent.
(a) Thrifty Finance shall maintain (i) an office or agency where
Notes may be presented for registration of transfer or for exchange
("Registrar") and (ii) an office or agency where Notes may be presented for
payment ("Paying Agent"). The Registrar shall keep a register of the Notes and
of their transfer and exchange (the "Note Register"). Thrifty Finance may
appoint one or more co-registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent and the term
"Registrar" includes any co-registrars. Thrifty Finance may change any Paying
Agent or Registrar without prior notice to any Noteholder. Thrifty Finance shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. The Trustee is hereby initially appointed as the Registrar,
Paying Agent and agent for service of notices and demands in connection with the
Notes.
(b) Thrifty Finance shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. Thrifty Finance shall
notify the Trustee in writing of the name and address of any such Agent. If
Thrifty Finance fails to maintain a Registrar or Paying Agent, or fails to give
the foregoing notice, the Trustee shall act as such, and shall be entitled to
appropriate compensation in accordance with this Indenture, or shall appoint a
replacement Registrar and Paying Agent.
Section 2.7. Paying Agent to Hold Money in Trust.
(a) Thrifty Finance will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee (and if the Trustee acts as Paying Agent, it
hereby so agrees), subject to the provisions of this Section 2.7, that such
Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as herein
provided;
(ii) give the Trustee notice of any default by Thrifty Finance (or
any other obligor under the Notes) of which it has actual knowledge in the
making of any payment required to be made with respect to the Notes;
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(iii) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent, so long as the same
institution is acting as Trustee and as Paying Agent and the institution
no longer qualifies or is eligible to act as Trustee; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
(b) Thrifty Finance may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose, by
Company Order direct any Paying Agent to pay to the Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which the sums were held by such Paying Agent; and upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such sums.
(c) Subject to applicable laws with respect to escheat of funds, any
funds held by the Trustee or any Paying Agent or a Clearing Agency in trust for
the payment of any amount due with respect to any Note and remaining unclaimed
for two years after such amount has become due and payable shall be discharged
from such trust and be paid to Thrifty Finance on Company Request; and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to Thrifty Finance for payment thereof (but only to the extent of the
amounts so paid to Thrifty Finance), and all liability of the Trustee or such
Paying Agent with respect to such funds shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of Thrifty Finance cause to be published
once, in a newspaper published in the English language, customarily published on
each Business Day and of general circulation in New York City, and if the
related Series of Notes has been listed on the Luxembourg Stock Exchange, in a
newspaper customarily published on each Luxembourg business day and of general
circulation in Luxembourg City, Luxembourg, notice that such funds remain
unclaimed and that, after a date specified therein, which shall not be less than
thirty (30) days from the date of such publication, any unclaimed balance of
such funds then remaining will be repaid to Thrifty Finance. The Trustee may
also adopt and employ, at the expense of Thrifty
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Finance, any other reasonable means of notification of such repayment.
Section 2.8. Noteholder 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
Noteholders of each Series of Notes. If the Trustee is not the Registrar,
Thrifty Finance shall furnish to the Trustee at least seven (7) Business Days
before each 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 Noteholders of each Series of Notes.
Section 2.9. Transfer and Exchange.
(a) No Note may be resold, pledged or transferred (including,
without limitation, by pledges or hypothecation) unless such sale or transfer is
(1) to the Issuer (upon redemption thereof or otherwise), (2) to any person the
transferor reasonably believes is a qualified institutional buyer (as defined in
Rule 144A) in a transaction meeting the requirements of Rule 144A, (3) outside
the United States to a person who is not a U.S. Person (as such term is defined
in Regulation S) in a transaction meeting the requirements of Regulation S, (4)
pursuant to an exemption from the registration requirements of the Securities
Act provided by Rule 144 under the Securities Act and in any case, in accordance
with any applicable securities laws or "Blue Sky" laws of any state of the
United States or any other jurisdiction. Subject to provisions of clauses (i)
through (vii) of this Section 2.9(a), when a request to register a transfer or
exchange of global Notes is presented to the Registrar or co-registrar or, in
the case of Definitive Notes, when Definitive Notes of any particular Series are
presented to the Registrar or a co-registrar with a request to register a
transfer or to exchange them for an equal principal amount of Notes of other
authorized denominations of the same Series, the Registrar shall register the
transfer or make the exchange if its requirements for such transaction are met;
provided, however, that any Definitive Notes surrendered for transfer or
exchange (a) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to Thrifty Finance and the Registrar, duly
executed by the Holder thereof or its attorney, duly authorized in writing and
(b) shall be transferred or exchanged in compliance with the following
provisions, as applicable:
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(i) Restricted Global Notes. If a holder of a beneficial
interest in a Restricted Global Note registered in the name of DTC or its
nominee wishes at any time to exchange its interest in such Restricted
Global Note for a like percentage interest in such Restricted Global Note
or to transfer its interest in such Restricted Global Note to a Person who
wishes to take delivery of such interest in the form of an interest in
such Restricted Global Note, such holder may, subject to the rules and
procedures of DTC, cause the exchange or transfer of such interest for an
equivalent beneficial interest in such Restricted Global Note upon
submission to the Trustee and the Registrar of the following:
(A) if such Note is being acquired for the account of such
Holder, without transfer, a certification from such Holder to that
effect (in substantially the form of Exhibit A-1 hereto); or
(B) if such Note is being transferred to a qualified
institutional buyer (as defined in Rule 144A) in accordance with
Rule 144A, a certification to that effect (in substantially the form
of Exhibit A-1 hereto).
(ii) Temporary Global Note to Permanent Global Note. Interests
in a Temporary Global Note as to which the Trustee in its capacity as
Registrar received from Euroclear or Cedel, as the case may be, a
certificate substantially in the form of Exhibit E to the effect that
Euroclear or Cedel, as applicable, has received a certificate
substantially in the form of Exhibit F from the holder of a beneficial
interest in such Note, will be exchanged, on and after the 40th day after
the completion of the distribution of the relevant Series (the "Exchange
Date"), for interests in a Permanent Global Note. To effect such exchange,
Thrifty Finance shall execute and the Trustee shall authenticate and
deliver to DTC, or its nominee, for credit to the respective accounts of
the agent members of DTC, a duly executed and authenticated Permanent
Global Note, representing the principal amount of interests in a Temporary
Global Note initially exchanged for interests in a Permanent Global Note.
The delivery to the Trustee by Euroclear or Cedel of the certificate or
certificates referred to above may be relied upon by Thrifty Finance and
the Trustee as conclusive evidence that the certificate or certificates
referred to therein has or have been delivered to Euroclear or Cedel
pursuant to the terms of this Indenture and such Temporary Global Note so
exchanged. Upon any exchange of interests in a Temporary Global Note for
interests in a Permanent Global Note, the Trustee shall endorse such
Temporary Global Note
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to reflect the reduction in the principal amount represented thereby by
the amount so exchanged and shall endorse a Permanent Global Note to
reflect the corresponding increase in the amount represented thereby.
(iii) Restricted Global Note to Temporary Global Note Before
the Exchange Date. If, prior to the Exchange Date, a holder of a
beneficial interest in a Restricted Global Note registered in the name of
DTC or its nominee wishes at any time to exchange its interest in such
Restricted Global Note for an interest in a Temporary Global Note, or to
transfer its interest in such Restricted Global Note to a Person who
wishes to take delivery thereof in the form of an interest in the
Temporary Global Note, such holder may, subject to the rules and
procedures of DTC and the requirements set forth below, exchange or cause
the exchange or transfer of such interest for an equivalent beneficial
interest in a Temporary Global Note. Upon receipt by the Trustee of (1)
instructions given in accordance with DTC's procedures from an agent
member directing the Trustee to credit or cause to be credited a
beneficial interest in a Temporary Global Note in an amount equal to the
beneficial interest in such Restricted Global Note to be exchanged or
transferred, (2) a written order given in accordance with DTC's procedures
containing information regarding the Euroclear or Cedel account to be
credited with such increase and the name of such account, and (3) a
certificate in the form of Exhibit A-3 attached hereto given by the holder
of such beneficial interest stating that the exchange or transfer of such
interest has been made in compliance with the transfer restrictions
applicable to the Notes and pursuant to and in accordance with Regulation
S, the Trustee shall instruct DTC to reduce such Restricted Global Note by
the aggregate principal amount of the beneficial interest in such
Restricted Global Note to be so exchanged or transferred and the
Registrar, shall instruct DTC, concurrently with such reduction, to
increase the principal amount of a Temporary Global Note by the aggregate
principal amount of the beneficial interest in such Restricted Global Note
to be so exchanged or transferred, and to credit or cause to be credited
to the account of the Person specified in such instructions (who shall be
an agent member of Euroclear or Cedel, or both, as the case may be) a
beneficial interest in a Temporary Global Note equal to the reduction in
the principal amount of such Restricted Global Note to be exchanged or
transferred.
(iv) Restricted Global Note to Permanent Global Note After the
Exchange Date. If, after the Exchange Date, a holder of a beneficial
interest in a Restricted Global Note registered in the name of DTC or its
nominee wishes at
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any time to transfer its interest in such Restricted Global Note to a
Person who wishes to take delivery thereof in the form of an interest in a
Permanent Global Note, such holder may, subject to the rules and
procedures of DTC, cause the transfer of such interest for an equivalent
beneficial interest in a Permanent Global Note. Upon receipt by the
Trustee of (1) instructions given in accordance with DTC's procedures from
an agent member directing the Registrar to credit or cause to be credited
a beneficial interest in a Permanent Global Note in an amount equal to the
beneficial interest in such Restricted Global Note to be exchanged or
transferred, (2) a written order given in accordance with DTC's procedures
containing information regarding the agent member's account with DTC and,
in the case of a transfer pursuant to and in accordance with Regulation S,
the Euroclear or Cedel account to be credited with such increase and (3) a
certificate in the form of Exhibit A-4 attached hereto given by the holder
of such beneficial interest stating that the transfer of such interest has
been made in compliance with the transfer restrictions applicable to the
Notes (A) and pursuant to and in accordance with Regulation S or (B) Rule
144 under the Securities Act, the Trustee shall instruct DTC to reduce
such Restricted Global Note by the aggregate principal amount of the
beneficial interest in such Restricted Global Note to be so transferred
and the Registrar shall instruct DTC, concurrently with such reduction, to
increase the principal amount of a Permanent Global Note by the aggregate
principal amount of the beneficial interest in such Restricted Global Note
to be so transferred, and to credit or cause to be credited to the account
of the Person specified in such instructions a beneficial interest in a
Permanent Global Note equal to the reduction in the principal amount of
such Restricted Global Note to be transferred.
(v) Temporary Global Note to Restricted Global Note. If a
holder of a beneficial interest in a Temporary Global Note registered in
the name of DTC or its nominee wishes at any time to exchange its interest
in such Temporary Global Note for an interest in a Restricted Global Note,
or to transfer its interest in such Temporary Global Note to a Person who
wishes to take delivery thereof in the form of an interest in a Restricted
Global Note, such holder may, subject to the rules and procedures of
Euroclear or Cedel and DTC, as the case may be, exchange or cause the
exchange or transfer of such interest for an equivalent beneficial
interest in a Restricted Global Note. Upon receipt by the Registrar of (1)
instructions from Euroclear or Cedel or DTC, as the case may be, directing
the Registrar to credit or cause to be credited a beneficial interest in a
Restricted Global Note equal to the beneficial interest in a
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Temporary Global Note to be exchanged or transferred, such instructions to
contain information regarding the agent member's account with DTC to be
credited with such increase, and, with respect to an exchange or transfer
of an interest in a Temporary Global Note after the Exchange Date,
information regarding the agent member's account with DTC to be debited
with such decrease, and (2) with respect to an exchange or transfer of an
interest in a Temporary Global Note for an interest in a Restricted Global
Note prior to the Exchange Date, a certificate in the form of Exhibit A-5
attached hereto given by the holder of such beneficial interest and
stating that the Person transferring such interest in the Temporary Global
Note reasonably believes that the Person acquiring such interest in the
Restricted Global Note is a Qualified Institutional Buyer and is obtaining
such beneficial interest in a transaction meeting the requirements of Rule
144A, Euroclear or Cedel or the Registrar, as the case may be, shall
instruct DTC to reduce the Temporary Global Note by the aggregate
principal amount of the beneficial interest in the Temporary Global Note
to be exchanged or transferred, and the Registrar shall instruct DTC,
concurrently with such reduction, to increase the principal amount of the
Restricted Global Note by the aggregate principal amount of the beneficial
interest in the Temporary Global Note to be so exchanged or transferred,
and to credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Restricted
Global Note equal to the reduction in the principal amount of the
Temporary Global Note.
(vi) Permanent Global Note to Restricted Global Note. Interest
in the Permanent Global Note may not be transferred for interests in the
Restricted Global Note.
(vii) Other Transfers or Exchanges. In the event that a global
Note is exchanged for Notes, or Notes are otherwise issued, in definitive
registered form without interest coupons, pursuant to Section 2.19, such
Notes may be exchanged or transferred for one another only in accordance
with such procedures as are substantially consistent with the provisions
of clauses (i) through (vi) above (including the certification
requirements intended to insure that such exchanges or transfers comply
with Rule 144A or Regulation S, as the case may be) and as may be from
time to time adopted by Thrifty Finance and the Trustee.
(b) The Registrar shall not register the exchange of interests in a
global Note for a Definitive Note or the transfer of or exchange of a Note
during the period beginning on any Record Date and ending on the next following
Payment Date.
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(c) The Trustee or, if the Notes are listed on the Luxembourg Stock
Exchange, the Luxembourg Agent, as the case may be, shall, upon receipt of a
written request therefor from Thrifty Finance, send to Thrifty Finance, upon any
transfer or exchange of any Note, information reflected in the copy of the
register for the Notes maintained by the Registrar or the Luxembourg Agent, as
the case may be.
(d) To permit registrations of transfers and exchanges, Thrifty
Finance shall execute and the Trustee shall authenticate Notes, subject to such
rules as the Trustee may reasonably require. No service charge to the Noteholder
shall be made for any registration of transfer or exchange (except as otherwise
expressly permitted herein), but the Registrar (or Thrifty Finance or the
Trustee) may require payment of a sum sufficient to cover any tax or other
government charge payable in connection therewith.
(e) All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of Thrifty Finance, evidencing the same
debt, and entitled to the same benefits under this Indenture, as Notes
surrendered upon such registration of transfer or exchange.
(f) Prior to due presentment for registration of transfer of any
Note, the Trustee, any Agent and Thrifty Finance may deem and treat the Person
in whose name any Note is registered (as of the day of determination) as the
absolute owner of such Note for the purpose of receiving payment of principal of
and interest on such Note and for all other purposes whatsoever, whether or not
such Note is overdue, and neither the Trustee, any Agent nor Thrifty Finance
shall be affected by notice to the contrary.
(g) Notwithstanding any other provision of this Section 2.9, the
typewritten Note or Notes representing Book-Entry Notes for any Series may be
transferred, in whole but not in part, only to another nominee of the Clearing
Agency for such Series, or to a successor Clearing Agency for such Series
selected or approved by Thrifty Finance or to a nominee of such successor
Clearing Agency, only if in accordance with this Section 2.9 and Section 2.19.
Section 2.10. Certain Purchaser Representations and Certifications.
(a) Prior to any sale or transfer of the Notes described in clause (2) of
Section 2.9(a) above, each prospective purchaser of the Notes shall be deemed to
have represented and agreed as follows:
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(1) It is a qualified institutional buyer as defined in Rule 144A,
it is aware that any sale of the Notes to it will be made in reliance on
Rule 144A and it is acquiring the Notes for its own institutional account
or for the account of a qualified institutional buyer.
(2) The purchaser understands that the Notes are being offered in a
transaction not involving any public offering in the United States within
the meaning of the Securities Act, that the Notes have not been registered
under the Securities Act and that (A) such Notes may be offered, resold,
pledged or otherwise transferred only (i) to the Issuer, (ii) to a person
who the seller reasonably believes is a qualified institutional buyer (as
defined in Rule 144A) in a transaction meeting the requirements of Rule
144A, (iii) outside the United States to a person other than a U.S. Person
(as defined in Regulation S) in a transaction meeting the requirements of
Regulation S under the Securities Act, (iv) in a transaction exempt from
the registration requirements of the Securities Act and the applicable
securities laws of any State of the United States and any other
jurisdiction or (v) pursuant to an effective registration statement under
the Securities Act, in each such case in accordance with the Indenture and
any applicable securities laws of any State of the United States and (B)
the purchaser will, and each subsequent holder of a Note is required to,
notify any subsequent purchaser of a Note of the resale restrictions set
forth in (A) above.
(b) Prior to any direct placement of the Notes from the Issuer to an
institutional accredited investor who is a qualified institutional buyer within
the meaning of Rule 144A, the Issuer shall require each such prospective
purchaser of the Notes to represent and agree as follows:
(i) to the restrictions on transfer set forth in clause (a) (2)
above, (ii) that it is (w) a qualified institutional buyer within the
meaning of Rule 144A and an accredited investor as defined in Rule
501(a)(1),(2),(3) or (7) under the Securities Act; (x) acquiring Notes
having a minimum purchase price of not less than $250,000 for its own
account or for any separate account for which it is acting; (y) acquiring
such Notes for its own institutional account or the account of an
accredited investor as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act who is a qualified institutional buyer within the
meaning of Rule 144A; and (z) not acquiring the Notes with a view to
distribution thereof or with any present intention of offering or selling
any of the Notes in a transaction that would violate the Securities Act or
the securities laws of any State of the United States or any other
applicable
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jurisdiction; and (c) that the registrar and transfer agent for the Notes
will not be required to accept for registration of transfer any Notes
acquired by them, except upon presentation of evidence satisfactory to the
transfer agent that the restrictions on transfer set forth in clause (a)
(2) above have been complied with.
(c) In addition, the Issuer shall require such prospective purchaser
to provide additional information or certifications, as shall be reasonably
requested by the Trustee, the Issuer or the Initial Purchasers, to support the
truth and accuracy of the foregoing acknowledgements, representations and
agreements, it being understood that such additional information is not intended
to create additional restrictions on the transfer of the Notes. The Issuer, the
Initial Purchasers and the Trustee are not obligated, in their individual
capacities or as a group, to register the Notes under the Securities Act or any
state securities laws.
Section 2.11. Legending of Notes.
Unless otherwise provided for in a Supplement and except as
permitted by the following sentence, in addition to any legends required by
Section 2.17, each Note shall bear a legend in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE
SKY" LAWS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE
BENEFIT OF THRIFTY CAR RENTAL FINANCE CORPORATION (THE "COMPANY") THAT
THIS NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)
TO THE COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON WHO
THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (3) OUTSIDE THE UNITED STATES TO A NON U.S.
PERSON (AS DEFINED IN REGULATION S OF THE SECURITIES ACT) IN A TRANSACTION
IN COMPLIANCE WITH REGULATION S OF THE SECURITIES ACT OR (4) PURSUANT TO
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, IN EACH CASE IN COMPLIANCE
WITH THE INDENTURE AND ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER JURISDICTION. THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
RESALE RESTRICTIONS SET FORTH ABOVE.
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Upon any transfer, exchange or replacement of Notes bearing such legend, or if a
request is made to remove such legend on a Note, the Notes so issued shall bear
such legend, or such legend shall not be removed, as the case may be, unless
there is delivered to Thrifty Finance and the Trustee or the Luxembourg Agent,
if the Notes are listed on the Luxembourg Exchange, such satisfactory evidence,
which may include an opinion of counsel, as may be reasonably required by
Thrifty Finance that neither such legend nor the restrictions on transfer set
forth therein are required to ensure that transfers thereof comply with the
provisions of Rule 144A, Rule 144 or Regulation S. Upon provision of such
satisfactory evidence, the Trustee, at the direction of Thrifty Finance, shall
authenticate and deliver a Note that does not bear such legend.
Section 2.12. Replacement Notes.
(a) If (i) any mutilated Note is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Trustee such security or
indemnity as may be required by it to hold Thrifty Finance and its Affiliates
and the Trustee harmless, then, in the absence of notice to Thrifty Finance, the
Registrar or the Trustee that such Note has been acquired by a bona fide
purchaser, and provided that the requirements of Section 8-405 of the UCC (which
generally permit Thrifty Finance to impose reasonable requirements) are met,
Thrifty Finance shall execute and upon its request the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note; provided, however, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven (7) days shall be due and payable, instead of issuing a
replacement Note, Thrifty Finance may pay such destroyed, lost or stolen Note
when so due or payable without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Note in
lieu of which such replacement Note was issued presents for payment such
original Note, Thrifty Finance and the Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
Thrifty Finance or any Affiliate thereof or the Trustee in connection therewith.
The Holder of a Note may offer to the Trustee unsecured indemnification so long
as such Holder has a long-term debt rating or claims paying ability that is
"investment grade."
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(b) Upon the issuance of any replacement Note under this Section
2.12, the Registrar, Thrifty Finance or the Trustee may require the payment by
the Holder of such Note of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trustee) connected
therewith.
(c) Every replacement Note issued pursuant to this Section 2.12 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of Thrifty Finance, whether or not
the mutilated, destroyed, lost or stolen Note shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this Section 2.12 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.13. Treasury Notes.
In determining whether the Noteholders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by Thrifty Finance or any Affiliate of Thrifty Finance shall be considered as
though they are not Outstanding, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Notes of which the Trustee has received written notice of such
ownership shall be so disregarded. Absent written notice to the Trustee of such
ownership, the Trustee shall not be deemed to have knowledge of the identity of
the individual beneficial owners of the Notes.
Section 2.14. Temporary Notes.
(a) Pending the preparation of Definitive Notes issued under Section
2.19, Thrifty Finance may prepare and the Trustee, upon receipt of a Company
Order, shall authenticate and deliver temporary Notes of such Series. Temporary
Notes shall be substantially in the form of Definitive Notes of like Series but
may have variations that are not inconsistent with the terms of this Indenture
as the officers executing such Notes may determine, as evidenced by their
execution of such Notes.
(b) If temporary Notes are issued pursuant to Section 2.14(a) above,
Thrifty Finance will cause Definitive Notes to be prepared without unreasonable
delay. After the preparation of Definitive Notes, the temporary Notes shall be
exchangeable for
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Definitive Notes upon surrender of the temporary Notes at the office or agency
of Thrifty Finance to be maintained as provided in Section 7.2, without charge
to the Noteholder. Upon surrender for cancellation of any one or more temporary
Notes, Thrifty Finance shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of Definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as Definitive
Notes.
Section 2.15. Cancellation.
Thrifty Finance may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder which
Thrifty Finance or any of its respective Subsidiaries or Affiliates may have
acquired in any manner whatsoever or upon any repayment of the principal amount
in respect of such Notes, and all Notes so delivered shall be promptly cancelled
by the Trustee. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation. Thrifty Finance may not issue
new Notes to replace Notes that it has redeemed or paid or that have been
delivered to the Trustee for cancellation. All canceled Notes held by the
Trustee shall be disposed of in accordance with the Trustee's standard
disposition procedures.
Section 2.16. Principal and Interest.
(a) The principal of each Series of Notes shall be payable at the
times and in the amount set forth in the related Supplement in accordance with
Section 5.1.
(b) Each Series of Notes shall accrue interest as provided in the
related Supplement and such interest shall be payable on the Payment Date for
such Series in accordance with Section 5.1 and the related Supplement.
(c) Except as provided in the following sentence, the person in
whose name any Note is registered at the close of business on any Record Date
with respect to a Payment Date for such Note shall be entitled to receive the
principal and interest payable on such Payment Date notwithstanding the
cancellation of such Note upon any registration of transfer, exchange or
substitution of such Note subsequent to such Record Date. Any interest payable
at maturity shall be paid to the Person to whom the principal of such Note is
payable.
(d) If Thrifty Finance defaults in the payment of interest on the
Notes of any Series, such interest, to the extent
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paid on any date that is more than five (5) Business Days after the applicable
due date, shall, at the option of Thrifty Finance, cease to be payable to the
persons who were Noteholders of such Series at the applicable Record Date, and
in such case Thrifty Finance shall pay the defaulted interest in any lawful
manner, plus, to the extent lawful, interest payable on the defaulted interest,
to the persons who are Noteholders of such Series on a subsequent special record
date which date shall be at least five (5) Business Days prior to the payment
date, at the rate provided in this Indenture and in the Notes of such Series.
Thrifty Finance shall fix or cause to be fixed each such special record date and
payment date, and at least fifteen (15) days before the special record date,
Thrifty Finance (or, if so requested by Thrifty Finance, the Trustee, in the
name of and at the expense of Thrifty Finance) shall mail to Noteholders of such
Series a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
Section 2.17. Book-Entry Notes.
(a) For each Series of Notes to be issued in registered form,
Thrifty Finance shall duly execute the Notes, and the Trustee shall, in
accordance with Section 2.4 hereof, authenticate and deliver initially one or
more global Notes that (a) shall be registered on the Note Register in the name
of DTC or DTC's nominee, and (b) shall bear legends substantially to the
following effect:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), TO THRIFTY CAR RENTAL FINANCE
CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
("CEDE") OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE 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 SINCE THE REGISTERED OWNER HEREOF, CEDE, HAS AN
INTEREST HEREIN.
So long as DTC or its nominee is the registered owner or holder of a
global Note, DTC or its nominee, as the case may be, will be considered the sole
owner or holder of the Notes represented by such global Note for purposes of
this Indenture and such Notes. Members of, or participants in, DTC shall have no
rights under this Indenture with respect to any global Note held on their behalf
by DTC, and DTC may be treated by Thrifty Finance, the Trustee, the Registrar,
any Paying Agent and any agent of such entities as the absolute owner of such
global Note for all purposes whatsoever. Notwithstanding the foregoing,
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nothing herein shall prevent Thrifty Finance, the Trustee, the Registrar, any
Paying Agent and any agent of such entities from giving effect to any written
certification, proxy or other authorization furnished by DTC or impair, as
between DTC and its agent members, the operation of customary practices
governing the exercise of the rights of the holder of a beneficial interest any
Note.
(b) The provisions of the "Operating Procedures of the Euroclear
System" and the "Terms and Conditions Governing Use of Euroclear" and the
"Management Regulations" and "Instructions to Participants" of Cedel,
respectively, shall be applicable to the global Notes insofar as interests in a
global Note are held by the agent members of Euroclear or Cedel (which shall
only occur in the case of the Temporary Global Note and the Permanent Global
Note). Account holders or participants in Euroclear and Cedel shall have no
rights under this Indenture with respect to such global Note, and the registered
holder may be treated by Thrifty Finance, the Trustee, the Registrar and any
Paying Agent and any agent of any such entities as the owner of such global Note
for all purposes whatsoever.
(c) Title to the Notes shall pass only by registration in the Note
Register maintained by the Registrar pursuant to Section 2.6.
(d) Any typewritten Note or Notes representing Book-Entry Notes
shall provide that they represent the aggregate or a specified amount of
Outstanding Notes from time to time endorsed thereon and may also provide that
the aggregate amount of Outstanding Notes represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a typewritten Note or
Notes representing Book-Entry Notes to reflect the amount, or any increase or
decrease in the amount, or changes in the rights of Note Owners represented
thereby, shall be made in such manner and by such Person or Persons as shall be
specified therein or in the Company Order to be delivered to the Trustee
pursuant to Section 2.4. Subject to the provisions of Section 2.5, the Trustee
shall deliver and redeliver any typewritten Note or Notes representing
Book-Entry Notes in the manner and upon instructions given by the Person or
Persons specified therein or in the applicable Company Order. Any instructions
by Thrifty Finance with respect to endorsement or delivery or redelivery of a
typewritten Note or Notes representing the Book-Entry Notes shall be in writing
but need not comply with Section 12.3 hereof and need not be accompanied by an
Opinion of Counsel.
(e) Unless and until Definitive Notes have been issued to all Note
Owners pursuant to Section 2.19:
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(i) the provisions of this Section 2.17 shall be in full force and
effect;
(ii) the Paying Agent, the Registrar and the Trustee may deal with
the Clearing Agency for all purposes of this Indenture (including the
making of payments on the Notes and the giving of instructions or
directions hereunder) as the authorized representatives of the Note
Owners;
(iii) to the extent that the provisions of this Section 2.17
conflict with any other provisions of this Indenture, the provisions of
this Section 2.17 shall control;
(iv) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Outstanding principal amount of the Notes, the
applicable Clearing Agency shall be deemed to represent a percentage or
principal amount in respect of any outstanding Book-Entry Notes only to
the extent that it has received instructions to such effect from the
applicable Note Owners and/or their related Clearing Agency Participants
owning or representing, respectively, such percentage or principal amount
of the beneficial interest in the Notes and has delivered such
instructions or directions to the Trustee; and
(v) the rights of Note Owners shall be exercised only through the
applicable Clearing Agency and their related Clearing Agency Participants
and shall be limited to those established by law and agreements between
such Note Owners and their related Clearing Agency and/or the Clearing
Agency Participants. Unless and until Definitive Notes are issued pursuant
to Section 2.19, the applicable Clearing Agencies will make book-entry
transfers among their related Clearing Agency Participants and receive and
transmit payments of principal and interest on the Notes to such Clearing
Agency Participants.
Section 2.18. Notices to Clearing Agency.
Whenever notice or other communication to the Noteholders is
required under this Indenture, unless and until Definitive Notes shall have been
issued pursuant to Section 2.19, the Trustee, Thrifty Finance and the Servicer
shall give all such notices and communications specified herein to be given to
Noteholders to the applicable Clearing Agency for further distribution to the
Clearing Agency Participants and the Note
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Owners in accordance with such Clearing Agency's and Clearing Agency
Participants' customary practices and procedures with respect thereto.
Section 2.19. Definitive Notes.
(a) Conditions for Issuance. Definitive Notes shall be issued and
delivered, and interests in a Restricted Global Note or Permanent Global Note
deposited with DTC or a custodian of DTC pursuant to Section 2.5 shall be
transferred to the beneficial owners thereof in the form of Definitive Notes,
only if (i) in the case of a transfer or exchange, such transfer complies with
Section 2.9 and (ii) either (x) DTC notifies Thrifty Finance that it is
unwilling or unable to continue as depositary for such Restricted Global Note or
Permanent Global Note or at any time ceases to be a "clearing agency" registered
under the United States Securities Exchange Act of 1934, as amended, (the
"Exchange Act"), and in either case in either case a successor depositary so
registered is not appointed by Thrifty Finance within ninety (90) days of such
notice or (y) Thrifty Finance, in its sole discretion, determines that the
Restricted Global Notes or Permanent Global Notes with respect to the relevant
Series of Notes shall be exchangeable for Definitive Notes, in which case
Definitive Notes shall be issuable or exchangeable only in respect of such
global Notes or the category of Definitive Notes represented thereby or (z) any
Noteholder, purchaser or transferee of a Restricted Global Note or a Permanent
Global Note requests the same in the form of a Definitive Note and Thrifty
Finance, in its sole discretion, consents to such request (in which case a
Definitive Note shall be issuable or transferable only to such Noteholder,
purchaser or transferee), Thrifty Finance will deliver Notes in definitive
registered form, without interest coupons, in exchange for the Restricted Global
Notes or the Permanent Global Notes or, in the case of an exchange or transfer
described in clause (z) above, in exchange for the applicable beneficial
interest in one or more Global Notes. Definitive Notes shall be issued without
coupons in minimum amounts of U.S.$250,000 and integral multiples of U.S.$1,000,
subject to compliance with all applicable legal and regulatory requirements.
(b) Issuance. If interests in any Restricted Global Note or
Permanent Global Note, as the case may be, are to be transferred to the
beneficial owners thereof in the form of Definitive Notes pursuant to this
Section 2.19, such Restricted Global Note or Permanent Global Note, as the case
may be, shall be surrendered by DTC or its custodian or agent to the office or
agency of the Registrar located in the Borough of Manhattan, The City of New
York, or if the Notes are listed on the Luxembourg Stock Exchange, to the
applicable Luxembourg Agent in Luxembourg, to be so transferred, without charge.
If interests in any
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Permanent Global Note are to be transferred to the beneficial owners thereof in
the form of Definitive Notes pursuant to this Section 2.19, such Permanent
Global Note shall be surrendered by DTC or its custodian or agent to the
Registrar or its agent located in London to be so transferred, without charge.
The Trustee shall authenticate and deliver, upon such transfer of interests in
such Restricted Global Note or Permanent Global Note, an equal aggregate
principal amount of Definitive Notes of authorized denominations; provided, that
in the case of an interest in a Restricted Global Note, no such interest will be
transferred except upon delivery of a certificate substantially in the form of
Exhibit A-1 hereto. The Definitive Notes issued or transferred pursuant to this
Section 2.19 shall be executed, authenticated and delivered only in the
denominations specified in paragraph (a) above or in the related Supplement, and
Definitive Notes shall be registered in such names as DTC (in the case of a
transfer and exchange of global Notes to Definitive Notes) or Thrifty Finance
(in all other cases) shall direct in writing. The Registrar shall have at least
thirty (30) days from the date of its receipt of Definitive Notes and
registration information to authenticate and deliver such Definitive Notes. Any
Definitive Note delivered in exchange for an interest in a Restricted Global
Note or Permanent Global Note shall, except as otherwise provided by Section
2.11, bear, and be subject to, the legend regarding transfer restrictions set
forth in Section 2.11. Thrifty Finance will promptly make available to the
Registrar a reasonable supply of Definitive Notes. Thrifty Finance shall bear
the costs and expenses of printing or preparing any Definitive Notes.
(c) Transfer of Definitive Notes. Subject to the terms of Section
2.9(a), the Holder of any Definitive Note may transfer the same in whole or in
part, in an amount equivalent to an authorized denomination, by surrendering at
the office maintained by the Registrar for such purpose in the Borough of
Manhattan, The City of New York, such Note with the form of transfer endorsed on
it duly completed and executed by, or accompanied by a written instrument of
transfer in form satisfactory to Thrifty Finance and the Registrar by, the
Holder thereof and accompanied by a certificate substantially in the form of
Exhibit A-1 hereto. In exchange for any Definitive Note properly presented for
transfer, Thrifty Finance shall execute and the Trustee shall promptly
authenticate and deliver or cause to be authenticated and delivered in
compliance with applicable law, to the transferee at such office, or send by
mail (at the risk of the transferee) to such address as the transferee may
request, Definitive Notes for the same aggregate principal amount as was
transferred. In the case of the transfer of any Definitive Note in part, Thrifty
Finance shall execute and the Trustee shall also promptly authenticate and
deliver or cause to be authenticated and delivered to the transferor at such
office,
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or send by mail (at the risk of the transferor) to such address as the
transferor may request, Definitive Notes for the aggregate principal amount that
was not transferred. No transfer of any Definitive Note shall be made unless the
request for such transfer is made by the registered Holder at such office.
(d) Neither Thrifty Finance nor the Trustee shall be liable for any
delay in delivery of transfer instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Notes for such Series, the Trustee shall recognize the Holders of the
Definitive Notes as Noteholders of such Series.
Section 2.20. Tax Treatment.
Thrifty Finance has structured this Indenture and the Notes have
been (or will be) issued with the intention that the Notes will qualify under
applicable tax law as indebtedness of Thrifty Finance and any entity acquiring
any direct or indirect interest in any Note by acceptance of its Notes (or, in
the case of a Note Owner, by virtue of such Note Owner's acquisition of a
beneficial interest therein) agrees to treat the Notes (or beneficial interests
therein) for purposes of Federal, state and local and income or franchise taxes
and any other tax imposed on or measured by income, as indebtedness of Thrifty
Finance. Each Noteholder agrees that it will cause any Note Owner acquiring an
interest in a Note through it to comply with this Indenture as to treatment as
indebtedness for such tax purposes.
ARTICLE 3.
SECURITY
Section 3.1. Grant of Security Interest.
(a) To secure the Thrifty Finance Obligations and to secure
compliance with the provisions of this Indenture and any Supplement, all as
provided in this Indenture, Thrifty Finance hereby pledges, assigns, conveys,
delivers, transfers and sets over to the Trustee, for the benefit of the
Noteholders, and hereby grants to the Trustee, for the benefit of the
Noteholders, a security interest in all of Thrifty Finance's right, title and
interest in and to all of the following assets, property and interests in
property of Thrifty Finance, whether now owned or hereafter acquired or created
(all of the foregoing being referred to as the "Collateral"):
(i) the rights of Thrifty Finance under the Lease and any other
agreements relating to the Vehicles to which Thrifty Finance is a party
other than the Vehicle
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Disposition Programs and any Vehicle insurance agreements (collectively,
the "Thrifty Finance Agreements"), including, without limitation, all
monies due and to become due to Thrifty Finance from the Lessee under or
in connection with the Thrifty Finance Agreements, whether payable as
rent, guaranty payments, fees, expenses, costs, indemnities, insurance
recoveries, damages for the breach of any of the Thrifty Finance
Agreements or otherwise, and all rights, remedies, powers, privileges and
claims of Thrifty Finance against any other party under or with respect to
the Thrifty Finance Agreements (whether arising pursuant to the terms of
such Thrifty Finance Agreements or otherwise available to Thrifty Finance
at law or in equity), including the right to enforce any of the Thrifty
Finance Agreements as provided herein and to give or withhold any and all
consents, requests, notices, directions, approvals, extensions or waivers
under or with respect to the Thrifty Finance Agreements or the obligations
of any party thereunder;
(ii) (a) the Collection Account and all accounts designated in a
Series Supplement or otherwise as a sub-account or an administrative
subaccount thereof, (b) all funds on deposit therein from time to time,
(c) all certificates and instruments, if any, representing or evidencing
any or all of the Collection Account or the funds on deposit therein from
time to time, and (d) all Permitted Investments made at any time and from
time to time with the funds on deposit in the Collection Account
(including income thereon);
(iii) all additional property that may from time to time hereafter
(pursuant to the terms of any Supplement or otherwise) be subjected to the
grant and pledge hereof by Thrifty Finance or by anyone on its behalf; and
(iv) all proceeds, products, offspring, rents or profits of any and
all of the foregoing including, without limitation, payments under
insurance (whether or not the Trustee is the loss payee thereof), and
cash;
provided, however, the Collateral shall not include the Retained Distribution
Account, any funds on deposit therein from time to time, any certificates or
instruments, if any, representing or evidencing any or all of the Retained
Distribution Account or the funds on deposit therein from time to time, or any
Permitted Investments made at any time and from time to time with the funds
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on deposit in the Retained Distribution Account (including the income thereon).
(b) The Trustee, as trustee on behalf of the Noteholders,
acknowledges the foregoing grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its abilities to the end that
the interests of the Noteholders may be adequately and effectively protected.
The Collateral shall secure the Notes equally and ratably without prejudice,
priority (except, with respect to any Series of Notes, as otherwise stated in
the applicable Supplement) or distinction.
Section 3.2. Certain Rights and Obligations of Thrifty Finance
Unaffected.
(a) Notwithstanding the assignment and security interest so granted
to the Trustee, Thrifty Finance shall nevertheless be permitted, subject to the
Trustee's right to revoke such permission in the event of an Amortization Event
and subject to the provisions of Section 3.3, to give all consents, requests,
notices, directions, approvals, extensions or waivers, if any, which are
required to be given in the normal course of business (which does not include
waivers of defaults under any of the Thrifty Finance Agreements or any of the
Vehicle Disposition Programs or revocation of powers of attorney to the Lessee)
to the Lessee by Thrifty Finance and by the Lessee to the Manufacturers by the
specific terms of the Lease and each Vehicle Disposition Program, respectively.
(b) The grant of a security interest in the Collateral to the
Trustee by Thrifty Finance shall not (i) relieve Thrifty Finance from the
performance of any term, covenant, condition or agreement on Thrifty Finance's
part to be performed or observed under or in connection with any of the Thrifty
Finance Agreements or any of the Vehicle Disposition Programs or from any
liability to Thrifty or the Manufacturers, as the case may be, or (ii) impose
any obligation on the Trustee or any of the Noteholders to perform or observe
any such term, covenant, condition or agreement on Thrifty Finance's part to be
so performed or observed or impose any liability on the Trustee or any of the
Noteholders for any act or omission on the part of Thrifty Finance or from any
breach of any representation or warranty on the part of Thrifty Finance. Thrifty
Finance hereby agrees to indemnify and hold harmless the Trustee, each
Noteholder and each Note Owner (including, in each case, their respective
directors, officers, employees and agents) from and against any and all losses,
liabilities (including liabilities for penalties), claims, demands, actions,
suits, judgments, reasonable out-of-pocket costs and expenses arising out of or
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resulting from the security interest granted hereby whether arising by virtue of
any act or omission on the part of Thrifty Finance or otherwise, including,
without limitation, the reasonable out-of-pocket costs, expenses, and
disbursements (including reasonable attorneys' fees and expenses) incurred by
the Trustee, any of the Noteholders and any of the Note Owners in enforcing this
Indenture or preserving any of their respective rights to, or realizing upon,
any of the Collateral; provided, however, the foregoing indemnification shall
not extend to any action by the Trustee, a Noteholder or a Note Owner which
constitutes gross negligence or willful misconduct by the Trustee, such
Noteholder, such Note Owner or any other Indemnified Person hereunder. The
indemnification provided for in this Section 3.2 shall survive the removal of,
or a resignation by, such Person as Trustee as well as the termination of this
Indenture, any Supplement or any Assignment Agreement.
Section 3.3. Performance of Agreement.
Upon the occurrence of a Limited Liquidation Event of Default or
Liquidation Event of Default, promptly following a request from the Trustee or
the Master Collateral Agent, as applicable, to do so and at Thrifty Finance's
expense, but subject to the rights of the Eligible Franchisees under the
Subleases and the other Lessee Agreements, Thrifty Finance agrees to take all
such lawful action as permitted under this Indenture as the Trustee may request,
pursuant hereto and to the Master Collateral Agency Agreement, to compel or
secure the performance and observance by: (i) Thrifty or by any other party to
any of the Thrifty Finance Agreements or any other Related Document of its
obligations to Thrifty Finance, and (ii) a Manufacturer under a Vehicle
Disposition Program of its obligations to the Lessor or the Lessee and the
Master Collateral Agent, as assignee, in each case in accordance with the
applicable terms thereof, and to exercise any and all rights, remedies, powers
and privileges lawfully available to Thrifty Finance to the extent and in the
manner directed by the Trustee or the Master Collateral Agent, as applicable,
including, without limitation, the transmission of notices of default and the
institution of legal or administrative actions or proceedings to compel or
secure performance by Thrifty (or such party to any Thrifty Finance Agreement or
any other Related Document) or by a Manufacturer under a Vehicle Disposition
Program, of their respective obligations thereunder.
Section 3.4. Further Assurances.
Thrifty Finance (a) will from time to time, at its expense, promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable (including as may be reasonably
requested by the Trustee or the Servicer), in order to perfect, preserve and
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protect any security interest granted or purported to be granted hereby or in
any Supplement or to enable the Trustee or the Servicer to exercise and enforce
its rights and remedies hereunder or under any Supplement with respect to any
Collateral, including, without limitation, the execution of Uniform Commercial
Code financing or continuation statements, or amendments or corrections thereto,
and (b) hereby authorizes the Trustee to file one or more financing or
continuation statements and Certificates of Title, and amendments thereto,
relative to all or any part of the Collateral without the signature of Thrifty
Finance, where permitted by law. A reproduction of this Indenture or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. Thrifty Finance
agrees that all Certificates of Title (other than Certificates of Title for the
Existing Fleet) shall be duly noted to show the Lien of the Master Collateral
Agent (on behalf of the Trustee) under the Master Collateral Agency Agreement
and that all Certificates of Title (including those relating to the Existing
Fleet) shall be held in safekeeping and otherwise handled as set forth in the
Master Collateral Agency Agreement.
Section 3.5. Release of Collateral. The Lien of the Master
Collateral Agent on the Vehicles (on behalf of the Trustee, as Beneficiary under
the Master Collateral Agency Agreement) shall automatically be deemed to be
released concurrently with any release thereof as provided in Section 7 of the
Base Lease, paragraph 8 of the Operating Lease or of Section 2.7 of the Master
Collateral Agency Agreement.
Section 3.6. Stamp, Other Similar Taxes and Filing Fees.
Thrifty Finance shall indemnify and hold harmless the Trustee, the
Master Collateral Agent and each Noteholder from any present or future claim for
liability for any stamp or other similar tax and any penalties or interest with
respect thereto, that may be assessed, levied or collected by any jurisdiction
in connection with this Indenture or any Collateral. Thrifty Finance shall pay,
or reimburse the Trustee for, any and all amounts in respect of, all search,
filing, recording and registration fees, taxes, excise taxes and other similar
imposts that may be payable or determined to be payable in respect of the
execution, delivery, performance and/or enforcement of this Indenture.
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ARTICLE 4.
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.1. Collection Account.
(a) Establishment of Collection Account. The Trustee shall establish
and maintain in the name of the Trustee for the benefit of the Noteholders, or
cause to be established and maintained, an account (the "Collection Account"),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Noteholders. The Collection Account shall be
maintained (i) with a Qualified Institution, or (ii) as a segregated trust
account with the corporate trust department of a depository institution or trust
company having corporate trust powers and acting as trustee for funds deposited
in the Collection Account. If the Collection Account is not maintained in
accordance with the previous sentence, then within ten (10) Business Days after
obtaining knowledge of such fact, the Trustee shall establish a new Collection
Account which complies with such sentence and transfer into the new Collection
Account all cash and investments from the non-qualifying Collection Account.
Initially, the Collection Account will be established with the Trustee.
(b) Establishment of Retained Distribution Account. The Trustee
shall establish and maintain in the name of Thrifty, for the benefit of the
Retained Interestholder, or cause to be established and maintained, an account
(the "Retained Distribution Account") bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Retained
Interestholder. Unless otherwise instructed by Thrifty Finance, the Retained
Distribution Account shall be maintained (i) with a Qualified Institution, or
(ii) as a segregated trust account with the corporate trust department of a
depository institution or trust company having corporate trust powers and acting
as trustee for funds deposited in the Retained Distribution Account. If the
Retained Distribution Account is not maintained in accordance with the previous
sentence, then within ten (10) Business Days after obtaining knowledge of such
fact, the Trustee shall establish a new Retained Distribution Account which
complies with such sentence and transfer into the new Retained Distribution
Account all cash and investments from the non-qualifying Retained Distribution
Account. Initially, the Retained Distribution Account will be established with
the Trustee.
(c) Establishment of Additional Accounts. To the extent specified in
the Supplement with respect to any Series of Notes, the Trustee may establish
and maintain one or more additional accounts and/or administrative sub-accounts
to
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facilitate the proper allocation of Collections in accordance with the terms of
such Supplement.
(d) Administration of the Collection Account. The Servicer shall
instruct the institution maintaining the Collection Account to invest funds on
deposit in the Collection Account at all times in Permitted Investments;
provided, however, that, other than as otherwise approved in writing by the
Rating Agencies, any such investment shall mature not later than the Business
Day prior to the Payment Date following the date on which such funds were
received, except for any Permitted Investment held in the Collection Account
which is in an investment made by the Paying Agent institution, in which event
such investment may mature on such Payment Date if such funds shall be available
for withdrawal on or prior to such Payment Date; provided, further, that any
such investment described in clause (iv) of the definition of "Permitted
Investments" need not mature on or prior to such Payment Date but need only
permit withdrawals therefrom not less frequently than on each Payment Date. The
Trustee shall hold, for the benefit of the Noteholders, possession of any
negotiable instruments or securities evidencing the Permitted Investments until
their maturity. No Permitted Investment shall be disposed of prior to its
maturity; provided, however, that the Trustee may sell, liquidate or dispose of
a Permitted Investment before its maturity, at the written direction of the
Servicer, if such sale, liquidation or disposal would not result in a loss of
all or part of the principal portion of such Permitted Investment or if, prior
to the maturity of such Permitted Investment, a default occurs in the payment of
principal, interest or any other amount with respect to such Permitted
Investment.
(e) Administration of the Retained Distribution Account. Unless
otherwise instructed by the Retained Interestholder at any time and from time to
time, the Servicer shall instruct the institution maintaining the Retained
Distribution Account to invest funds on deposit in the Retained Distribution
Account at all times in Permitted Investments. Unless otherwise instructed by
the Retained Interestholder at any time, the Trustee shall hold, for the benefit
of the Retained Interestholder, possession of any negotiable instruments or
securities evidencing the Permitted Investments from the time of purchase
thereof until the time of maturity.
(f) Earnings from Collection Account. Subject to the restrictions
set forth above, the Servicer shall have the authority to instruct the Trustee
(which instructions shall be in writing) with respect to (i) the investment of
funds on deposit in the Collection Account and (ii) liquidation of such
investments. All interest and earnings (net of losses and investment expenses)
on funds on deposit in the Collection
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Account shall be deemed to be available and on deposit for distribution.
(g) Earnings from Retained Distribution. Subject to the restrictions
set forth above, the Servicer shall have the authority to instruct the Trustee
with respect to the investment of funds on deposit in the Retained Distribution
Account. All interest and earnings (net of losses and investment expenses) on
funds on deposit in the Retained Distribution Account shall be deemed to be
available and on deposit for distribution to the Retained Interestholder.
Section 4.2. Collections and Allocations.
(a) Collections in General. Until this Indenture is terminated
pursuant to Section 10.1, Thrifty Finance shall cause the Lessor, the Servicer
and the Master Collateral Agent, as applicable, to cause all Collections arising
from Collateral and Master Collateral pledged by Thrifty Finance due and to
become due (i) from the Manufacturers pursuant to Vehicle Disposition Programs
to be paid directly to the Master Collateral Account at such times as such
amounts are due under such Vehicle Disposition Programs, (ii) under the Lease to
be paid directly to the Collection Account at such times as such amounts are due
under the Lease, and (iii) from any other source to be paid directly into the
Collection Account or the Master Collateral Account, in accordance with the
Indenture and the Master Collateral Agency Agreement, as applicable, at such
times as such amounts are due. Collections deposited into the Master Collateral
Account shall be transferred to the Collection Account when, as and to the
extent provided in the Master Collateral Agency Agreement. All amounts on
deposit in the Collection Account shall be allocated and distributed as provided
herein. All monies, instruments, cash and other proceeds received by the Trustee
pursuant to this Indenture (including amounts received from the Master
Collateral Agent) shall be immediately deposited in the Collection Account and
shall be applied as provided in this Article 4.
(b) Disqualification of Institution Maintaining Collection Account.
In the event the Qualified Institution maintaining the Collection Account ceases
to be such, then, upon the occurrence of such event and the establishment of a
new Collection Account with a Qualified Institution pursuant to Section 4.1(a)
and thereafter, the Servicer and Thrifty Finance shall deposit or cause to be
deposited all Collections as set forth in Section 4.2(a) into the new Collection
Account, and in no such event shall the Servicer or an Affiliate of the Servicer
deposit any Collections thereafter into any account established, held or
maintained with the institution formerly maintaining the Collection Account
(unless it later becomes a Qualified Institution or qualified corporate trust
department).
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(c) Right of Servicer to Deduct Fees. Notwithstanding anything in
this Indenture to the contrary but subject to any limitations set forth in the
applicable Supplement, as long as the Servicer is Thrifty or an Affiliate of
Thrifty and the Retained Interest Amount equals or exceeds zero, the Servicer
(i) may make or cause to be made deposits to the Collection Account net of any
amounts which are allocable to the Retained Distribution Account and represent
amounts due and owing to the Servicer or Thrifty, and (ii) need not deposit or
cause to be deposited any amounts to be paid to the Servicer or Thrifty pursuant
to this Section 4.2 and such amounts will be deemed paid to Thrifty or the
Servicer, as the case may be, pursuant to this Section 4.2.
(d) Sharing Collections. To the extent that Principal Collections
that are allocated to any Series on a Payment Date are not needed to make
payments of principal to Noteholders of such Series or required to be deposited
in a Distribution Account for such Series on such Payment Date, such Principal
Collections may, at the direction of the Servicer, be applied to cover principal
payments due to or for the benefit of Noteholders of another Series. Any such
reallocation will not result in a reduction of the Aggregate Principal Balance
or in the Invested Amount of the Series to which such Principal Collections were
initially allocated.
(e) Unallocated Principal Collections. If, after giving effect to
Section 4.2(d), Principal Collections allocated to any Series on any Payment
Date are in excess of the amount required to pay amounts due in respect of such
Series on such Payment Date in full, then any such excess Principal Collections
shall be allocated to the Retained Distribution Account (to the extent that the
Retained Interest Amount equals or exceeds zero).
Section 4.3. Determination of Monthly Interest.
Monthly interest with respect to each Series of Notes shall be
determined, allocated and distributed in accordance with the procedures set
forth in the applicable Supplement.
Section 4.4. Determination of Monthly Principal.
Monthly principal with respect to each Series of Notes shall be
determined, allocated and distributed in accordance with the procedures set
forth in the applicable Supplement. However, all principal or interest with
respect to any Series of Notes shall be due and payable no later than the Series
Termination Date with respect to such Series.
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Section 4.5. Paired Series.
To the extent provided in a Supplement, any Series of Notes may be
paired with one or more other Series (each, a "Paired Series"). Each Paired
Series may be prefunded with an initial deposit to a pre-funding account in an
amount up to the initial principal balance of such Paired Series, primarily from
the proceeds of the sale of such Paired Series, or will have a variable
principal amount. Any such pre-funding account will be held for the benefit of
such Paired Series and not for the benefit of the Noteholders of the Series
paired therewith. As funds are accumulated in a principal funding account or
paid to Noteholders either (i) in the case of a pre-funded Paired Series, an
equal amount of funds on deposit in any pre-funding account for such pre-funded
Paired Series will be released and paid to Thrifty Finance or (ii) in the case
of a Paired Series having a variable principal amount, an interest in such
variable Paired Series in an equal or lesser amount may be sold by Thrifty
Finance and, in either case, the invested amount in Thrifty Finance of such
Paired Series will increase by up to a corresponding amount. Upon payment in
full of the Series paired to the Paired Series, assuming that there have been no
unreimbursed charge-offs with respect to any related Paired Series, the
aggregate invested amount of such related Paired Series will have been increased
by an amount up to an aggregate amount equal to the Invested Amount of such
Series paid to the Noteholders thereof. The issuance of a Paired Series may be
subject to certain conditions described in the related Supplement.
[THE REMAINDER OF ARTICLE 4 IS RESERVED AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
ARTICLE 5.
DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS
Section 5.1. Distributions in General.
(a) Unless otherwise specified in the applicable Supplement, on the
Business Day immediately preceding each Payment Date with respect to each
Outstanding Series, (i) the Paying Agent shall deposit (in accordance with the
Monthly Certificate delivered by the Servicer to the Trustee) in the
Distribution Account for each such Series the amounts on deposit in the
Collection Account allocable to Noteholders of such Series as interest and,
during an Amortization Period, principal, and (ii) to the extent provided for in
the applicable Supplement, the Trustee (in accordance with the Monthly
Certificate delivered by the Servicer to the Trustee) shall deposit in the
Distribution
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Account for each such Series the amount of Enhancement for such Series to be
drawn in connection with such Payment Date.
(b) Unless otherwise specified in the applicable Supplement, on each
Payment Date, the Paying Agent (in accordance with the Monthly Certificate
delivered by the Servicer to the Trustee) shall distribute to the Noteholders of
each Series, to the extent amounts are on deposit in the Distribution Account
for such Series, an amount sufficient to pay all principal and interest due on
such Series on such Payment Date. Such distribution shall be to each Noteholder
of record of such Series on the preceding Record Date based on such Noteholder's
pro rata share of the aggregate principal amount of the Notes of such Series
held by such Noteholder; provided, however, that, the final principal payment
due on a Note shall only be paid to the holder of a Note on due presentment of
such Note for cancellation in accordance with the provisions of the Note.
(c) Unless otherwise specified in the applicable Supplement, amounts
distributable to a Noteholder pursuant to this Section 5.1 shall be payable by
check mailed first-class postage prepaid to such Noteholder at the address for
such Noteholder appearing in the Note Register, except that with respect to
Notes registered in the name of a Clearing Agency or its nominee, such amounts
shall be payable by wire transfer of immediately available funds released by the
Paying Agent from the Distribution Account no later than 2:00 p.m. (New York
City time) for credit to the account designated by such Clearing Agency or its
nominee, as the case may be.
(d) Unless otherwise specified in the applicable Supplement (i) all
distributions to Noteholders of all classes within a Series of Notes will have
the same priority and (ii) in the event that on any date of determination the
amount available to make payments to the Noteholders of a Series is not
sufficient to pay all sums required to be paid to such Noteholders on such date,
then each class of Noteholders will receive its ratable share (based upon the
aggregate amount due to such class of Noteholders) of the aggregate amount
available to be distributed in respect of the Notes of such Series.
(e) All distributions in respect of Notes represented by a Temporary
Global Note will be made only with respect to that portion of the Temporary
Global Note in respect of which Euroclear or Cedel shall have delivered to the
Trustee a certificate or certificates substantially in the form of Exhibit E.
The delivery to the Trustee by Euroclear or Cedel of the certificate or
certificates referred to above may be relied upon by Thrifty Finance and the
Trustee as conclusive evidence that the certificate or certificates referred to
therein has or have been delivered to Euroclear or Cedel pursuant to the terms
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of this Indenture and the Temporary Global Note. No payments of interest will be
made on a Temporary Global Note after the Exchange Date therefor.
Section 5.2. Distributions to Retained Distribution Account.
Subject to the terms and conditions of the related Supplement or
Supplements, at any time and from time to time upon receipt of a duly executed
Company Order, the Trustee will transfer funds from the Collection Account to
the Retained Distribution Account; provided, however, that the Trustee will not
make any such transfer on any date other than on a Payment Date unless the
Trustee receives an Officers' Certificate from the Servicer stating that, on the
date such transfer is made and, in the reasonable anticipation of the Servicer,
on the next Payment Date, (i) the transfer of such funds from the Collection
Account to the Retained Distribution Account will not cause an Asset Amount
Deficiency to exist and (ii) the transfer of such funds from the Collection
Account to the Retained Distribution Account will not violate any restriction
contained in this Indenture or any Supplement.
Section 5.3. Optional Repurchase of Notes.
(a) On any Payment Date occurring on or after the date on which the
Aggregate Principal Balance of any Series is equal to or less than the
Repurchase Amount, if any, set forth in the Supplement related to such Series,
or class of such Series, or at such other time otherwise provided for in the
Supplement relating to such Series, Thrifty Finance shall have the option to
purchase all Outstanding Notes of such Series, or class of such Series (or any
portion thereof permitted by the related Supplement), at a purchase price
(determined after giving effect to any payment of principal and interest on such
Payment Date) equal to (unless otherwise specified in the related Supplement)
the then outstanding Aggregate Principal Balance of such Series on such Payment
Date, plus accrued and unpaid interest on the Aggregate Principal Balance of the
Notes of such Series (calculated at the interest rate set forth in the related
Supplement for such Series) through the day immediately prior to the date of
such purchase plus, if provided for in the related Supplement, any premium
payable at such time.
(b) Notice of repurchase under this Section 5.3(a) shall be given by
the Trustee by first-class mail, postage prepaid, or by facsimile mailed or
transmitted not later than ten (10) days prior to the applicable Payment Date to
each Holder of Notes, as of the close of business on the Record Date preceding
the applicable Payment Date, at such Holder's address or
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facsimile number appearing in the Note Register. All notices of repurchase shall
state:
(i) the repurchase date;
(ii) the repurchase price; and
(iii) the place where such Notes are to be surrendered for payment
of the repurchase price (which shall be an office or agency of Thrifty
Finance to be maintained as provided in Section 2.6).
Notice of repurchase of the Notes shall be given by the Trustee in the name and
at the expense of Thrifty Finance. Failure to give notice of repurchase, or any
defect therein, to any Holder of any Note shall not impair or affect the
validity of the repurchase of any other Note.
(c) Not later than 12:00 noon, New York City time, on the Business
Day prior to the applicable Payment Date, an amount equal to the purchase price
for all Notes of such Series or class (or the permitted portion thereof) on such
Payment Date will be deposited into the Distribution Account for such Series in
immediately available funds. The funds deposited into such Distribution Account
or distributed to the Paying Agent will be passed through in full to the
Noteholders on such Payment Date.
Section 5.4. Monthly Noteholders' Statement.
(a) On each Payment Date, the Trustee shall forward to each
Noteholder of record of all outstanding Series, the Paying Agent (if other than
the Trustee), any Note Owner, upon provision of evidence satisfactory to the
Trustee as to its ownership interest, and any Enhancement Provider, and the
Servicer, upon a single submission by a Note Owner of evidence satisfactory to
the Servicer as to such Note Owner's ownership interest, shall forward to such
Note Owner on each Payment Date thereafter until otherwise instructed or until
such Person ceases to be a Note Owner, a statement substantially in the form of
Exhibit D (each, a "Monthly Noteholders' Statement") prepared by the Servicer,
delivered to the Trustee and the Rating Agencies and setting forth the following
information (which, in the case of clauses (iii), (iv) and (v) below, shall be
expressed as a dollar amount per $1,000 of the original principal amount of the
Notes of such Series and, in the case of clause (viii) shall be stated on an
aggregate basis and on the basis of a dollar amount per $1,000 of the original
principal amount of the Notes of such Series):
(i) the aggregate amount of Interest Collections processed since the
prior Payment Date, the aggregate amount of Principal Collections
processed during the
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Related Month and the aggregate amount of Collections processed during
such periods;
(ii) the Invested Percentage with respect to Interest Collections
and Principal Collections for such Series on the last day of the Related
Month;
(iii) the total amount to be distributed to Noteholders of such
Series on the next succeeding Payment Date;
(iv) the amount of such distribution allocable to principal on the
Notes of such Series;
(v) the amount of such distribution allocable to interest on the
Notes of such Series;
(vi) the amount of any drawing under any Enhancement, if any, for
such Series for such Payment Date;
(vii) the amount of the Monthly Servicing Fee for such Series for
such Payment Date;
(viii) the amount available under the applicable Enhancement, if
any, for such Series as of the close of business on such Payment Date
after giving effect to any drawings on the applicable Enhancement and
payments to the applicable Enhancement Provider on such Payment Date;
(ix) the ratio of the amount available under the applicable
Enhancement, if any, to the Invested Amount for such Series as of the
close of business on such Payment Date after giving effect to any drawings
on the applicable Enhancement and payments to the applicable Enhancement
Provider on such Payment Date;
(x) the Pool Factor, if any, for such Series as of the end of the
Record Date with respect to such Payment Date;
(xi) whether, to the knowledge of the Servicer, any Liens exist with
respect to any of the Collateral which are not permitted under the Related
Documents;
(xii) the Aggregate Asset Amount and the amount of any Asset Amount
Deficiency;
(xiii) the Controlled Distribution Amount and the Carryover
Controlled Amortization Amount (as defined for any
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Series or class of Notes in the applicable Supplement) for such Payment
Date;
(xiv) the Net Book Value of Program Vehicles and the Net Book Value
of Non-Program Vehicles from each Manufacturer as of the last day of the
Related Month;
(xv) the ratios of the Non-Program Vehicles and the Program
Vehicles, respectively, to all Vehicles;
(xvi) the number of Vehicles of each Manufacturer as of the last
date of the Related Month;
(xvii) the average age of all Program Vehicles and average age of
all Non-Program Vehicles as of the last day of the Related Month;
(xviii) the average total monthly Depreciation Charges per Program
Vehicle and per Non-Program Vehicle during the Related Month; and
(xix) with respect to any Series, the information specified in the
related Supplement.
(b) Annual Noteholders' Tax Statement. On or before January 31 of
each calendar year, beginning with calendar year 1996, the Paying Agent shall
furnish to each Person who at any time during the preceding calendar year was a
Noteholder a statement prepared by the Servicer containing the information
prepared by the Servicer which is required to be contained in the regular
monthly report to Noteholders, as set forth in clauses (iii), (iv) and (v) above
aggregated for such calendar year or the applicable portion thereof during which
such Person was a Noteholder, together with such other customary information
(consistent with the treatment of the Notes as debt) as the Servicer deems
necessary or desirable to enable the Noteholders to prepare their tax returns
(each such statement, an "Annual Noteholders' Tax Statement"). Such obligations
of the Servicer to prepare and the Paying Agent to distribute the Annual
Noteholders' Tax Statement shall be deemed to have been satisfied to the extent
that substantially comparable information shall previously have been prepared by
the Servicer and distributed by the Servicer or the Paying Agent.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES
Thrifty Finance hereby represents and warrants with respect to any
Series as of the related Closing Date and such
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other dates as are specified in the related Supplement, for the benefit of the
Trustee and the Noteholders, as follows:
Section 6.1. Corporate Existence and Power.
Thrifty Finance is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, is duly qualified
to do business as a foreign corporation and in good standing under the laws of
each jurisdiction where the character of its property, the nature of its
business or the performance of its obligations make such qualification
necessary, except for jurisdictions in which failure to so qualify would not
have a Material Adverse Effect on the financial condition or operations of
Thrifty Finance or its ability to carry out the transactions contemplated in
this Indenture, any Supplement and the other Related Documents, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted and
for purposes of the transactions contemplated by this Indenture and the other
Related Documents.
Section 6.2. Corporate and Governmental Authorization.
The execution, delivery and performance by Thrifty Finance of this
Indenture, each related Supplement and the other Related Documents to which it
is a party are within Thrifty Finance's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, agency or official which has not been
obtained and do not contravene, or constitute a default in any material respect
under, any provision of applicable law or regulation or of the certificate of
incorporation or by-laws of Thrifty Finance or of any law or governmental
regulation, rule, contract, agreement, judgment, injunction, order, decree or
other instrument binding upon Thrifty Finance or any of its Assets or result in
the creation or imposition of any Lien on any Asset of Thrifty Finance, except
for Liens created by this Indenture or the other Related Documents. This
Indenture and each of the other Related Documents to which Thrifty Finance is a
party have been executed and delivered by a duly authorized officer of Thrifty
Finance.
Section 6.3. Binding Effect.
This Indenture and each other Related Document is a legal, valid and
binding obligation of Thrifty Finance enforceable against Thrifty Finance in
accordance with its terms (except as such enforceability may be limited by
bankruptcy, moratorium or other laws affecting creditors' rights generally and
subject to limitations imposed by equitable principles).
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Section 6.4. Litigation.
There is no action, suit or proceeding pending against or, to the
knowledge of Thrifty Finance, threatened against or affecting Thrifty Finance
before any court or arbitrator or any Governmental Authority in which there is a
reasonable possibility of an adverse decision that would have a Material Adverse
Effect on Thrifty Finance or which in any manner draws into question the
validity or enforceability of this Indenture, any Supplement or any other
Related Document or the ability of Thrifty Finance to comply with any of the
terms hereof or thereof.
Section 6.5. Employee Benefit Plans. (a) During the period from
Thrifty Finance's incorporation to the Closing Date and so long as any Notes are
Outstanding; (i) no steps have been taken to terminate any Pension Plan and (ii)
no contribution failure has occurred with respect to any Pension Plan sufficient
to give rise to a Lien under Section 302(f)(1) of ERISA in connection with such
Pension Plan; (b) no condition exists or event or transaction has occurred with
respect to any Pension Plan which could result in the incurrence by Thrifty
Finance or any member of its Controlled Group of fines, penalties or liabilities
for ERISA violations, which in the case of any of the events referred to in
clause (a) above or this clause (b) would have a Material Adverse Effect upon
Thrifty Finance, (c) Thrifty Finance has no material contingent liability with
respect to any post-retirement benefits under a Welfare Plan, other than
liability for continuation coverage described in Subtitle B of Part 6 of Title I
of ERISA and liabilities which would not have a Material Adverse Effect upon
Thrifty Finance, and (d) Thrifty Finance has neither established nor maintains
any Pension Plan except as explicitly disclosed by the Thrifty Finance in
Schedule 6.5.
Section 6.6. Tax Filings and Expenses.
Thrifty Finance has filed all material federal, state and local tax
returns and all other material tax returns which, to the knowledge of Thrifty
Finance, are required to be filed (whether informational returns or not), and
has paid all taxes due, if any, pursuant to said returns or pursuant to any
assessment received by Thrifty Finance, except such taxes, if any, as are not
yet delinquent or are being contested in good faith and for which adequate
reserves have been established and are being maintained in accordance with GAAP,
except where the failure to pay such taxes or maintain such reserves would not
have a Material Adverse Effect on Thrifty Finance.
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Section 6.7. Disclosure.
None of the Private Placement Memorandum, the Placement Memorandum
Supplement or any other written material as identified on Schedule 6.7 hereto
and furnished to the Trustee or any Noteholder in connection with this Indenture
or any other Related Document contains, or contained at the time so furnished,
any untrue statement of a material fact or omits, or omitted at the time so
furnished, to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
Section 6.8. Investment Company Act; Securities Act.
Thrifty Finance is not, and is not controlled by, an "investment
company" within the meaning of the Investment Company Act of 1940. It is not
necessary in connection with the issuance and sale of the Notes under the
circumstances contemplated in the Private Placement Memorandum, any Placement
Memorandum Supplement thereto and in any note purchase or similar agreement to
register any security under the Securities Act or to qualify any indenture under
the Trust Indenture Act.
Section 6.9. Regulations G, T, U and X.
No proceeds of any sale of the Notes will be used to purchase or
carry any "margin stock" (as defined in Regulations G, T, U and X of the Board
of Governors of the Federal Reserve System or any successor thereto) or to
extend credit to others for such purpose. Thrifty Finance is not engaged in the
business of extending credit for the purpose of purchasing or carrying any
margin stock.
Section 6.10. No Consent.
No consent, approval or other authorization of, or registration,
declaration or filing with, any Governmental Authority or other Person is
required for the valid execution and delivery and performance of this Indenture
or any Supplement or for the performance of any of Thrifty Finance's obligations
hereunder or thereunder or under any other Related Document other than such
consents, approvals, authorizations, registrations, declarations or filings as
shall have been obtained by Thrifty Finance prior to the initial Closing Date or
as contemplated in Section 6.14.
Section 6.11. No Violation of Charter, etc.
The execution and delivery of this Indenture, compliance with the
provisions hereof and of any Supplement and the other Related Documents and the
consummation of the
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transactions contemplated herein and therein will not result in (a) a breach or
violation of (i) any law or governmental rule or regulation applicable to
Thrifty Finance now in effect, (ii) any provisions of the certificate of
incorporation or by-laws of Thrifty Finance, (iii) any judgment, order or decree
of any Governmental Authority affecting Thrifty Finance, or (iv) any agreement
or instrument to which Thrifty Finance is a party or by which it is bound, (b)
the acceleration of any obligations of Thrifty Finance, or (c) the creation of
any lien, claim or encumbrance other than in favor of the Trustee and the Master
Collateral Agent or as permitted hereunder or under the other Related Documents.
Section 6.12. Solvency.
Both before and after giving effect to the transactions contemplated
by this Indenture and the other Related Documents, Thrifty Finance is solvent
and Thrifty Finance is not the subject of any voluntary or involuntary case or
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy or insolvency law.
Section 6.13. Stock Ownership; Subsidiary.
As of each Closing Date, all of the issued and outstanding common
stock of Thrifty Finance is owned by Thrifty, all of which common stock has been
validly issued, is fully paid and non-assessable and is owned of record by such
corporation, free and clear of all Liens. Thrifty Finance has no subsidiaries
and owns no capital stock of, or other interest in, any other Person.
Section 6.14. Security Interests.
(a) All action necessary (including the filing of UCC-1 financing
statements necessary to perfect the Trustee's security interest in the
Collateral and the Master Collateral Agent's security interest in the Master
Collateral (in each case, now in existence and hereafter acquired)), other than
the notation of the Master Collateral Agent's lien on the certificates of title
pertaining to the Existing Fleet, has been or will be duly and effectively taken
on or prior to the date of the issuance of the first Series of Notes.
(b) Except as listed on or described in Schedule 6.14b, no security
agreement, financing statement, equivalent security or lien instrument or
continuation statement listing Thrifty Finance as debtor covering all or any
part of the Collateral or the Master Collateral is on file or of record in any
jurisdiction, except such as may have been filed, recorded or made by Thrifty
Finance in favor of the Trustee or the Master
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Collateral Agent in connection with this Indenture or the Master Collateral
Agency Agreement.
(c) This Indenture will constitute a valid and continuing Lien on
the Collateral in favor of the Trustee, which Lien will be prior to all other
Liens (other than Permitted Liens to the extent provided herein and in the
Related Documents), and will be enforceable as such as against creditors of and
purchasers from Thrifty Finance in accordance with its terms, except as such
enforceability may be subject to bankruptcy or insolvency laws, creditors'
rights generally and general principles of equity. All action necessary or
desirable to perfect such security interest has been duly taken.
(d) Thrifty Finance's principal place of business and chief
executive office shall be at the addresses specified in Schedule 6.14d (as such
schedule may be amended from time to time upon 30 days prior written notice to
the Trustee and the Master Collateral Agent). Thrifty Finance does not transact,
and has not transacted, business under any other name.
(e) All authorizations in this Indenture for the Trustee to endorse
checks, instruments and securities and to execute financing statements,
continuation statements, security agreements, and other instruments with respect
to the Collateral are powers coupled with an interest and are irrevocable for so
long as the Indenture is in effect.
Section 6.15. Binding Effect of Lease.
The Lease is in full force and effect and there are no outstanding
Lease Events of Default or Manufacturer Events of Default thereunder nor have
events occurred which with the giving of notice, the passage of time or both
would constitute an Event of Default or a Manufacturer Event of Default.
Section 6.16. Non-Existence of Other Agreements.
Except as listed or described in Schedule 6.16, as of the date of
the issuance of the first Series of Notes, other than as permitted by Section
7.24 hereof (i) Thrifty Finance is not a party to any contract or agreement of
any kind or nature and (ii) Thrifty Finance is not subject to any obligations or
liabilities of any kind or nature in favor of any third party, including,
without limitation, Contingent Obligations.
Section 6.17. Vehicle Disposition Programs.
Thrifty Finance is, or on the applicable date of purchase will be,
an authorized fleet purchaser under the Vehicle Disposition Programs operated by
Chrysler, Ford and Toyota (to
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the extent it has purchased or is purchasing Vehicles manufactured by such
Manufacturers). Each of such Vehicle Disposition Programs, and any other Vehicle
Disposition Program under which Thrifty Finance owns Vehicles, is in full force
and effect (to the extent Thrifty Finance is purchasing Vehicles manufactured by
such Manufacturers) and has not been previously assigned, transferred or pledged
by Thrifty Finance (except to the Master Collateral Agent).
Section 6.18. Governmental Authorization.
Thrifty Finance has all licenses, franchises, permits and other
governmental authorizations necessary for all businesses presently carried on by
it (including owning and leasing the real and personal property owned and leased
by it), except where failure to obtain such licenses, franchises, permits and
other governmental authorizations would not have a Material Adverse Effect on
it.
Section 6.19. Compliance with Laws.
Thrifty Finance: (i) is not in violation of any law, ordinance,
rule, regulation or order of any Governmental Authority applicable to it or its
property, which violation would have a Material Adverse Effect on it, and to the
best of its knowledge, no such violation has been alleged, (ii) has filed in a
timely manner all reports, documents and other materials required to be filed by
it with any Governmental Authority (and the information contained in each of
such filings is true, correct and complete in all material respects), except
where failure to make such filings would not have a Material Adverse Effect on
it, and (iii) has retained all records and documents required to be retained by
it pursuant to any Requirement of Law, except where failure to retain such
records would not have a Material Adverse Effect on it.
ARTICLE 7.
COVENANTS
Thrifty Finance hereby covenants, for the benefit of the Trustee and
the Noteholders, as follows:
Section 7.1. Payment of Notes.
Thrifty Finance shall pay the principal of (and premium, if any) and
interest on the Notes pursuant to the provisions of this Indenture and any
applicable Supplement. Principal and interest shall be considered paid on the
date due
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if the Paying Agent holds on that date money designated for and sufficient to
pay all principal and interest then due.
Section 7.2. Maintenance of Office or Agency.
Thrifty Finance will maintain an office or agency (which may be an
office of the Trustee, Registrar or co-registrar) where Notes may be surrendered
for registration of transfer or exchange, where notices and demands to or upon
Thrifty Finance in respect of the Notes and this Indenture may be served, and
where, at any time when Thrifty Finance is obligated to make a payment of
principal and premium upon the Notes, the Notes may be surrendered for payment.
Thrifty Finance will give prompt written notice to the Trustee of the location,
and any change in the location, of such office or agency. If at any time Thrifty
Finance shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
Thrifty Finance may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
Thrifty Finance will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
Thrifty Finance hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of Thrifty Finance in accordance with this
Section 7.2.
Section 7.3. Information.
Thrifty Finance will deliver or cause to be delivered to the Trustee
and the Rating Agencies:
(a) as soon as available and in any event within one hundred ten
(110) days after the end of each fiscal year of Thrifty, a copy of the
audited consolidated balance sheet of Thrifty and its Subsidiaries as at
the end of such fiscal year, together with the related audited statements
of earnings, stockholders' equity and cash flows for such fiscal year,
prepared in reasonable detail and in accordance with GAAP, and certified
by a firm of nationally-recognized independent public accountants as
presenting fairly the financial condition and results of operations of
Thrifty, with such exceptions as may be noted in such accountants' report;
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(b) as soon as available and in any event within forty-five (45)
days after the end of each fiscal quarter (except the fourth fiscal
quarter) of Thrifty, copies of the unaudited consolidated balance sheet of
Thrifty and its Subsidiaries as at the end of such fiscal quarter and the
related unaudited statements of earnings, stockholders' equity and cash
flows for the portion of the fiscal year through such fiscal quarter (as
to the statements of earnings, for such fiscal quarter) in each case
setting forth in comparative form the figures for the corresponding
periods of the previous fiscal year, prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein and certified by the chief financial or accounting officer of
Thrifty as presenting fairly the financial condition and results of
operations of Thrifty (subject to normal year-end adjustments);
(c) from time to time such additional information regarding the
financial position, results of operations, business or prospects of
Thrifty and its Subsidiaries as the Trustee, at the direction of the
Required Noteholders of any Series of Notes, may reasonably request;
(d) on or prior to September 1 of each year (or as soon as
practicable thereafter), a certificate of the president or chief financial
officer of Thrifty certifying that Thrifty has apprised the Rating
Agencies of all material changes in the Programs occurring since the date
of this Base Indenture; and
(e) promptly upon receipt of notice of the introduction or
prospective introduction of any material prospective change in any Vehicle
Disposition Program or the introduction of any material new Vehicle
Disposition Program by an existing Manufacturer, notice of the same.
Section 7.4. Payment of Obligations.
Thrifty Finance will pay and discharge, at or before maturity, all
of its respective material obligations and liabilities, including, without
limitation, tax liabilities and other governmental claims, except where the same
may be contested in good faith by appropriate proceedings, and will maintain, in
accordance with GAAP, reserves as appropriate for the accrual of any of the
same, except where the failure to make such payments or maintain such reserves
would not have a Material Adverse Effect on Thrifty Finance.
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Section 7.5. Maintenance of Property.
Thrifty Finance will keep, or will cause to be kept, all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted; provided, however, that nothing in this Section
7.5 shall require Thrifty Finance to maintain, or to make any renewals,
replacements, additions, betterments or improvements of or to, any tangible
property, if such property, in the reasonable opinion of Thrifty Finance, is
obsolete or surplus or unfit for use or cannot be used advantageously in the
conduct of the business of Thrifty Finance.
Section 7.6. Maintenance of Existence; Foreign Qualification.
Thrifty Finance will do and cause to be done at all times all things
necessary (i) except as otherwise permitted by Section 7.17, to maintain and
preserve its existence and remain in good standing under the laws of the
jurisdiction of its incorporation; (ii) to be duly qualified to do business and
in good standing in each jurisdiction in which the failure to so qualify would
have a Material Adverse Effect on it; and (iii) to comply with all Obligations
binding upon it, except to the extent that the failure to comply therewith would
not, in the aggregate, have a Material Adverse Effect on it.
Section 7.7. Compliance with Laws.
Thrifty Finance will comply in all material respects with all
Requirements of Law and all applicable laws, ordinances, rules, regulations, and
requirements of Governmental Authorities (including, without limitation, ERISA
and the rules and regulations thereunder) except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings and
where such noncompliance would not have a Material Adverse Effect on Thrifty
Finance; provided, however, such noncompliance will not result in a Lien (other
than a Permitted Lien) on any Property of Thrifty Finance.
Section 7.8. Inspection of Property, Books and Records.
Thrifty Finance will keep proper books of record and account that
are complete and accurate in all material respects in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its Assets, business and activities in accordance with GAAP; and will permit the
Trustee to visit and inspect any of its properties, to examine and make
abstracts from any of its books and records and to discuss its affairs, finances
and accounts with its officers, directors,
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employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.
Section 7.9. Compliance with Related Documents.
Thrifty Finance will perform and comply with each and every
representation, warranty, obligation, covenant and agreement required to be
performed or observed by it in or pursuant to this Indenture and each other
Related Document to which it is a party and will not take any action which would
permit the Lessee, Thrifty or the Servicer to have the right to refuse to
perform any of its obligations under this Indenture or any Related Document.
Thrifty Finance will not amend the Lease, except in accordance with Article 11
hereof.
Section 7.10. Notice of Defaults.
(a) Promptly upon becoming aware of any Potential Amortization Event
or Amortization Event, Thrifty Finance shall give the Trustee and the Rating
Agencies written notice thereof, together with a certificate of an authorized
officer of Thrifty Finance setting forth the details thereof and any action with
respect thereto taken or contemplated to be taken by Thrifty Finance, and
(b) Promptly upon becoming aware of any default under any Related
Document or under any Vehicle Disposition Program, Thrifty Finance shall give
the Trustee, each Enhancement Provider and the Rating Agencies written notice
thereof.
Section 7.11. Notice of Material Proceedings.
Promptly upon becoming aware thereof, Thrifty Finance shall give the
Trustee and the Rating Agencies written notice of the commencement or existence
of any proceeding by or before any Governmental Authority against or affecting
Thrifty Finance which, if adversely determined, would result in a material
adverse effect on the business, condition (financial or otherwise), results of
operations, properties, performance or prospects of Thrifty Finance or the
ability of Thrifty Finance to perform its obligations under this Indenture or
under any other Related Document to which it is a party.
Section 7.12. Further Requests.
Thrifty Finance will promptly furnish to the Trustee, each
Enhancement Provider and the Rating Agencies such other information as, and in
such form as, the Trustee or such Enhancement Provider or the Rating Agencies
may reasonably request.
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Section 7.13. Further Assurances.
(a) Thrifty Finance shall do such further acts and things, and to
execute and deliver to the Trustee such additional assignments, agreements,
powers and instruments (other than noting the Lien of the Master Collateral
Agent on the Certificates of Title of the Existing Fleet), as is required or as
the Trustee or the Required Noteholders reasonably determines to be necessary to
carry into effect the purposes of this Indenture or the other Related Documents
or to better assure and confirm unto the Trustee or the Noteholders their
rights, powers and remedies hereunder and thereunder including, without
limitation, the filing of any Certificates of Title (or amendments thereto) with
respect to the Acquired Vehicles, and the filing of any financing or
continuation statements under the Uniform Commercial Code in effect in any
jurisdiction with respect to the liens and security interests granted hereby and
by the Master Collateral Agency Agreement. Thrifty Finance also hereby
authorizes the Trustee, as its attorney-in-fact and agent, to file any such
Certificate of Title (or amendment thereto) with respect to the Acquired
Vehicles, and any such financing statement or continuation statement without the
signature of Thrifty Finance to the extent permitted by applicable law. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note, chattel paper or other instrument, such
note, chattel paper or instrument shall be deemed to be held in trust and
immediately pledged to the Trustee hereunder, and shall, subject to the rights
of any Person in whose favor a prior Lien has been perfected, be duly endorsed
in a manner satisfactory to the Trustee and delivered to the Trustee promptly.
Without limiting the generality of the foregoing provisions of this Section
7.13(a), Thrifty Finance shall take all actions that are required to maintain
the security interest of the Trustee in the Collateral and of the Master
Collateral Agent in the Master Collateral as a perfected security interest
subject to no prior Liens (other than Permitted Liens to the extent provided
herein and in the Related Documents), including, without limitation, (i) filing
all Uniform Commercial Code financing statements, continuation statements and
amendments thereto necessary to achieve the foregoing and (ii) causing Servicer,
as agent for the Master Collateral Agent, to maintain possession of the
Certificates of Title for the benefit of the Trustee pursuant to Section 3.4
hereof.
(b) Thrifty Finance will warrant and defend the Trustee's right,
title and interest in and to the Collateral and the income, distributions and
proceeds thereof, for the benefit of the Noteholders and the Trustee, against
the claims and demands of all Persons whomsoever.
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(c) Nothing herein shall relieve Thrifty Finance of its
responsibility and liability with respect to its duties set forth in paragraphs
(a) and (b) of this Section 7.13 for as long as the Indenture shall be in effect
and any Thrifty Finance Obligations shall remain unpaid.
Section 7.14. Vehicle Disposition Programs; Eligible Manufacturers.
(a) With respect to any Vehicle Disposition Program for any model
year after the 1996 model year pursuant to which Thrifty Finance proposes to
acquire Vehicles, prior to Thrifty Finance's acquisition of any Vehicle from any
Manufacturer under such Vehicle Disposition Program, Thrifty Finance will (i) if
any Series of Notes is then being rated by Standard & Poor's and/or Fitch,
deliver a written confirmation from Standard & Poor's and/or Fitch that the
acquisition of Vehicles pursuant to such Vehicle Disposition Program will not
result in the reduction or withdrawal of any rating issued by Standard & Poor's
and/or Fitch in respect of such Series of Notes, (ii) if there is a change to a
Vehicle Disposition Program that is material to the interests of the Trustee and
the Master Collateral Agent during a model year, obtain written confirmation
from Standard & Poor's and/or Fitch that the acquisition of Vehicles pursuant to
such Vehicle Disposition Program will not result in the reduction or withdrawal
of any rating issued by Standard & Poor's and/or Fitch in respect of any Series
of Notes, and (iii) obtain the consent of the Required Beneficiaries if such
Vehicle Disposition Program is operated by a Manufacturer other than Chrysler,
Ford and Toyota. A copy of the rating confirmations set forth in clauses (i) and
(ii) in the preceding sentence will promptly be delivered to the Noteholders of
any outstanding Series of Notes. In no event shall Thrifty Finance agree, to the
extent any consent of Thrifty Finance is solicited or required by the
Manufacturer or any assignee of any such Vehicle Disposition Program, to any
change in such Vehicle Disposition Program that would have a Material Adverse
Effect on Thrifty Finance or would adversely affect the rights of the
Noteholders with respect to any Vehicle previously purchased or financed under
such Vehicle Disposition Program.
(b) Thrifty Finance will (i) provide the Trustee with at least
thirty (30) days' prior written notice of its intention to purchase Program or
Non-Program Vehicles from any new Manufacturer, (ii) provide the Trustee with a
copy of the Vehicle Disposition Program, if any, of such Manufacturer at the
time of such notice and (iii) certify to the Trustee and the Noteholders that
such new Manufacturer is an Eligible Manufacturer and that, as applicable, such
Vehicle Disposition Program is an Eligible Vehicle Disposition Program at such
time.
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(c) Thrifty Finance will (i) provide the Trustee with at least
thirty (30) days' prior written notice of its intention to purchase Non-Program
Vehicles from any new Manufacturer, and (ii) if any Series of Notes is then
being rated by Standard & Poor's and/or Fitch, provide the Trustee with a
written confirmation from Standard & Poor's and/or Fitch, as applicable, that
the inclusion of such Manufacturer's Vehicles under the Lease will not adversely
affect the then current rating of any Series of Notes.
Section 7.15. Liens.
Thrifty Finance will not create, incur, assume or permit to exist
any Lien upon any of its Assets (including the Collateral and the Master
Collateral), other than (i) Liens in favor of the Trustee for the benefit of the
Noteholders, (ii) Liens in favor of the Master Collateral Agent for the benefit
of the Trustee, and (iii) Liens created by or permitted under the Related
Documents (including Permitted Liens).
Section 7.16. Other Indebtedness.
Thrifty Finance will not create, assume, incur, suffer to exist or
otherwise become or remain liable in respect of any Indebtedness other than (i)
Indebtedness hereunder, including Indebtedness representing the Retained
Interest Amount; provided, however, that such Indebtedness is subject to the
restrictions provided for in Thrifty Finance's certificate of incorporation,
(ii) Indebtedness permitted under any other Related Document and (iii)
Indebtedness permitted under Thrifty Finance's certificate of incorporation.
Section 7.17. Mergers; Consolidations.
Thrifty Finance will not be a party to any merger or consolidation,
other than: (i) a merger or consolidation of any Subsidiary of Thrifty Finance
into or with Thrifty Finance (provided that Thrifty Finance is the surviving
corporation), and (ii) a merger or consolidation of Thrifty Finance into or with
another Person if:
(A) the Person formed by such consolidation or into or with which
Thrifty Finance is merged shall be a Person organized and existing under
the laws of the United States of America or any state or the District of
Columbia, and, if Thrifty Finance is not the surviving entity, shall
expressly assume, by an indenture supplemental hereto executed and
delivered to the Trustee, the performance of every covenant and obligation
of Thrifty Finance hereunder and under all other Related Documents; and
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(B) Thrifty Finance has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation or merger and such supplemental agreement comply with this
Section 7.17 and that all conditions precedent herein provided for
relating to such transaction have been complied with.
Section 7.18. Sales of Assets.
Thrifty Finance will not sell, lease, transfer, liquidate or
otherwise dispose of any Assets, except as contemplated by the Related Documents
and provided that the proceeds received by Thrifty Finance are paid directly to
the Collection Account or the Master Collateral Account.
Section 7.19. Acquisition of Assets.
Thrifty Finance will not acquire, by long-term or operating lease or
otherwise, any Assets except pursuant to the terms of the Related Documents.
Section 7.20. Dividends, Officers' Compensation, etc.
Thrifty Finance will not (i) declare or pay any dividends on any
shares of any of its capital stock or make any other distribution on, or any
purchase, redemption or other acquisition of, any of its capital stock except
out of funds in the Retained Distribution Account or in any general account of
Thrifty Finance or by cancellation of indebtedness owing by Thrifty to Thrifty
Finance (including indebtedness evidenced by the Demand Note), or (ii) pay any
wages or salaries or other compensation to officers, directors, employees or
others except out of earnings computed in accordance with GAAP and, in any case,
only from funds in the Retained Distribution Account, in any general account of
Thrifty Finance or except as expressly provided herein or in another Related
Document.
Section 7.21. Name; Principal Office.
Thrifty Finance will neither (a) change the location of its
principal office without sixty (60) days' prior notice to the Trustee and the
Master Collateral Agent nor (b) change its name without prior notice to the
Trustee and the Master Collateral Agent sufficient to allow the Trustee and the
Master Collateral Agent to make all filings (including filings of financing
statements on form UCC-1) and recordings necessary to perfect the interest of
the Trustee in the Collateral (other than in the Existing Fleet) pursuant to
this Indenture and the interest of the Master Collateral Agent in the Master
Collateral (other than in the Existing Fleet) pursuant to the Master Collateral
Agency Agreement. In the event that Thrifty Finance desires to so
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change its office or change its name, Thrifty Finance will make any required
filings and prior to actually changing its office or its name Thrifty Finance
will deliver to the Trustee and the Master Collateral Agent (i) an Officers'
Certificate and an Opinion of Counsel confirming that all required filings have
been made to continue the perfected interest of the Trustee in the Collateral
and the perfected interest of the Master Collateral Agent in the Master
Collateral in respect of the new office or new name of Thrifty Finance and (ii)
copies of all such required filings with the filing information duly noted
thereon by the office in which such filings were made.
Section 7.22. Organizational Documents.
Thrifty Finance will not amend any of its organizational documents,
including its certificate of incorporation, without the written consent of the
Rating Agencies and the Trustee, which consent shall not be sought unless and
until Thrifty Finance shall first have obtained either (i) an Opinion of Counsel
that such amendment would not cause Thrifty Finance to be subject to an
increased risk of being substantively consolidated with Thrifty in the event of
an insolvency proceeding involving Thrifty or (ii) an Opinion of Counsel
reaffirming (after such amendment) the opinion regarding substantive
consolidation furnished by Mayer, Brown & Platt in connection with the issuance
of the first Series of Notes.
Section 7.23. Investments.
Thrifty Finance will not make, incur, or suffer to exist any loan,
advance, extension of credit or other investment in any Person other than with
respect to Permitted Investments and, in addition, without limiting the
generality of the foregoing, Thrifty Finance will not cause the Trustee to make
any Permitted Investments on Thrifty Finance's behalf that would have the effect
of causing Thrifty Finance to be an "investment company" within the meaning of
the Investment Company Act.
Section 7.24. No Other Agreements.
Thrifty Finance will not (a) enter into or be a party to any
agreement, instrument other than any Related Document or any documents related
to any Enhancement or documents and agreements incidental thereto or entered
into as contemplated in Section 7.26, (b) except as provided for in Sections
11.1 or 11.2, amend, modify or waive any provision of any Related Document to
which it is a party, or (c) give any approval or consent or permission provided
for in any Related Document, except as permitted in Section 3.2(a).
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Section 7.25. Other Business.
Thrifty Finance will not engage in any business or enterprise or
enter into any transaction other than the acquisition, financing, refinancing,
leasing and disposition of Vehicles pursuant to the Lease and pursuant to the
other Related Documents, the related exercise of its rights as lessor
thereunder, the making of loans to Thrifty pursuant to the Demand Note, the
incurrence and payment of ordinary operating expenses, the issuing and selling
of the Notes and other activities related to or incidental to any of the
foregoing (including transaction or activities contemplated in Section 7.26.
Section 7.26. Maintenance of Separate Existence.
To maintain its corporate existence separate and apart from that of
Thrifty and any other Affiliates of Thrifty, Thrifty Finance will:
(a) practice and adhere to corporate formalities, such as
maintaining appropriate corporate books and records;
(b) maintain at least two corporate directors who are not officers,
directors or employees of any of its Affiliates;
(c) own or lease (including through shared arrangements with
Affiliates) all office furniture and equipment necessary to operate its
business;
(d) refrain from (i) guaranteeing or otherwise becoming liable for
any obligations of any of its Affiliates, (ii) having its obligations
guaranteed by its Affiliates (other than the limited guarantee provided by
Chrysler with respect to the security interest of the Master Collateral
Agent in the Existing Fleet), (iii) holding itself out as responsible for
debts of any of its Affiliates or for decisions or actions with respect to
the affairs of any of its Affiliates, and (iv) being directly or
indirectly named as a direct or contingent beneficiary or loss payee on
any insurance policy of any Affiliate, except to the extent that any
amounts paid as premiums on said insurance policy are directly
attributable to Thrifty Finance;
(e) maintain its deposit and other bank accounts and all of its
assets (other than any such assets constituting Master Collateral)
separate from those of any other Person other than the Trustee, the Paying
Agent and the Master Collateral Agent;
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(f) maintain its financial records and books of account separate and
apart from those of any other Person;
(g) compensate all its employees, officers, consultants and agents
for services provided to it by such Persons, or reimburse any of its
Affiliates in respect of services provided to it by employees, officers,
consultants and agents of such Affiliate, out of its own funds;
(h) maintain office space separate and apart from that of any of its
Affiliates (even if such office space is subleased from or is on or near
premises occupied by any of its Affiliates) and a separate telephone
number;
(i) account for and manage all of its liabilities separately from
those of any of its Affiliates, including, without limitation, payment
directly by Thrifty Finance of all payroll, accounting and other
administrative expenses and taxes;
(j) allocate, on an arm's-length basis, all shared corporate
operating services, leases and expenses, including, without limitation,
those associated with the services of shared consultants and agents and
shared computer and other office equipment and software;
(k) refrain from filing or otherwise initiating or supporting the
filing of a motion in any bankruptcy or other insolvency proceeding
involving Thrifty Finance or Thrifty, or any Affiliate of Thrifty Finance
or Thrifty to substantively consolidate Thrifty Finance with Thrifty or
any Affiliate of Thrifty Finance or Thrifty; and
(l) conduct all of its business (whether written or oral) solely in
its own name.
Thrifty Finance acknowledges its receipt of a copy of that certain opinion
letter issued by Mayer, Brown & Platt dated the date of issuance of the first
Series of Notes and addressing the issue of substantive consolidation as it may
relate to Thrifty Finance and the Lessee and its Affiliates. Thrifty Finance
hereby agrees to maintain in place all policies and procedures and take and
continue to take all action described in the factual assumptions set forth in
such opinion letter and relating to Thrifty Finance; provided, however, that
Thrifty Finance may cease to maintain any policy or procedure if and to the
extent that Thrifty Finance delivers to the Trustee an Opinion of Counsel
providing that such policy or procedure is no longer necessary, due to a change
in law or otherwise, for the rendering of such earlier opinion relating to the
issue of substantive consolidation.
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Section 7.27. Rule 144A Information Requirement.
For so long as any of the Notes remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, Thrifty Finance covenants and agrees that it shall, during any
period in which it is not subject to Section 13 or 15(d) under the Exchange Act,
make available to any Holder of Notes in connection with any sale thereof and
any prospective purchaser of Notes from such Holder in each case upon request,
the information specified in, and meeting the requirements of, Rule 144A(d)(4)
under the Securities Act.
Section 7.28. Acquisition of Vehicles by Thrifty Finance.
Thrifty Finance shall acquire Vehicles only by purchase directly
from a Manufacturer or through an authorized dealer of a Manufacturer. Thrifty
Finance shall use its best efforts commencing prior to or immediately upon
closing, to become an authorized fleet purchaser with Chrysler under Chrysler's
Vehicle Disposition Program.
ARTICLE 8.
AMORTIZATION EVENTS AND REMEDIES
Section 8.1. Amortization Events.
If any one of the following events shall occur during the Revolving
Period, the Accumulation Period (if any) or the Controlled Amortization Period
with respect to any Series of Notes:
(a) Thrifty Finance defaults in the payment of any interest on any
Note of a Series (or in any other payment on any Note of a Series (other
than as specified in clause (b) below)) when the same becomes due and
payable and such default continues for a period of five (5) Business Days
after the date that notice of the default is given to Thrifty Finance by
the Trustee or given to Thrifty Finance and the Trustee by the Required
Noteholders;
(b) Thrifty Finance defaults in the payment of any principal or
premium on any Note of a Series when the same becomes due and payable and
such default continues for a period of five (5) Business Days;
(c) Thrifty Finance fails to comply with any of its other agreements
or covenants in, or provisions of,
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the Notes of a Series or this Indenture and the failure to so comply
materially and adversely affects the interests of the Noteholders of any
Series and continues to materially and adversely affect the interests of
the Noteholders of such Series for a period of sixty (60) days after the
earlier of (i) the date on which a Responsible Officer of Thrifty Finance
obtains knowledge thereof or (ii) the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
Thrifty Finance by the Trustee or to Thrifty Finance and the Trustee by
the Required Noteholders of such Series; provided, however, that if such
failure cannot reasonably be cured within such sixty (60) day period, no
Amortization Event shall result therefrom so long as, within such sixty
(60) day period, Thrifty Finance (x) commences to cure same, (y) delivers
written notice to the Trustee notifying the Trustee of such failure and
setting forth the steps Thrifty Finance intends to take in order to cure
such failure, and (z) thereafter diligently prosecutes such cure to
completion and completely cures such failure on or before the ninety (90)
days after the earlier of the dates set forth in clause (i) and clause
(ii) above;
(d) any Event of Bankruptcy occurs with respect to Thrifty Finance
or Thrifty;
(e) any Lease Event of Default occurs;
(f) Thrifty Finance becomes an "investment company" or becomes under
the "control" of an "investment company" under the Investment Company Act
of 1940, as amended;
(g) subject to the provisions of Section 8.2(f) hereof, any Asset
Amount Deficiency exists and continues for a period of five (5) Business
Days;
(h) the Lease is terminated for any reason;
(i) any representation made by Thrifty Finance or Thrifty in this
Indenture or any Related Document is false in any material respect, which
false representation materially adversely affects the interests of the
Noteholders of any Series of Notes in any material respect, and such false
representation is not cured for a period of sixty (60) days after the
earlier of (i) the date on which a Responsible Officer of Thrifty or
Thrifty Finance obtains, as applicable, knowledge thereof or (ii) the date
that written notice thereof is given, as applicable, to Thrifty or Thrifty
Finance by the Trustee or to Thrifty Finance and
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the Trustee by the Required Noteholders of such Series; provided, however,
that if such failure cannot reasonably be cured within such sixty (60) day
period, no Amortization Event shall result therefrom so long as, within
such sixty (60) day period, such party (x) commences to cure same, (y)
delivers written notice to the Trustee notifying the Trustee of such
failure and setting forth the steps such party intends to take in order to
cure such failure, and (z) thereafter diligently prosecutes such cure to
completion and completely cures such failure on or before ninety (90) days
after the earlier of the dates set forth in clause (i) and clause (ii)
above; or
(j) any other event shall occur which may be specified in any
Supplement as an "Amortization Event";
then (i) in the case of any event described in clause (a), (b), (c), (e) (with
respect solely to the occurrence of any event described in Sections 17.1.1(ii),
17.1.3 and 17.1.4 of the Lease), (i) or, to the extent so specified in the
applicable Supplement, (j) above, either the Trustee (upon a Trust Officer of
the Trustee obtaining actual knowledge of such an event), by written notice to
Thrifty Finance, or the Required Noteholders of the applicable Series of Notes,
by written notice to Thrifty Finance and the Trustee, may declare that an
amortization event ("Amortization Event") has occurred with respect to such
Series as of the date of the notice, or (ii) in the case of any event described
in clauses (d), (e) (with respect solely to the occurrence of Lease Events of
Defaults other than those specified in clause (i) above), (f), (g), (h), and to
the extent so specified in the applicable Supplement, (j) above, an Amortization
Event with respect to all Series of Notes then outstanding shall immediately
occur without any notice or other action on the part of the Trustee or any
Noteholders.
Section 8.2. Rights of the Trustee upon Amortization Event or
Certain Other Events of Default.
(a) General. If and whenever an Amortization Event or certain events
of default under any Enhancement Agreement (as specified in the applicable
Supplement) shall have occurred and be continuing, the Trustee may and, at the
direction of the Required Beneficiaries shall, exercise (or direct the Master
Collateral Agent to exercise) from time to time any rights and remedies
available to it under applicable law or any Related Document (including the
Master Collateral Agency Agreement); provided, however, that if such
Amortization Event is based solely on an event described in clauses (a), (b),
(c), (i) or (j) of Section 8.1, then the Trustee's rights and remedies pursuant
to the provisions of this Section 8.2 shall, to the extent not detrimental to
the rights of the Holders of the applicable Series
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of Notes, be limited to rights and remedies pertaining only to such Series of
Notes. Any amounts obtained by the Trustee (or the Master Collateral Agent at
the direction of the Trustee) on account of or as a result of the exercise by
the Trustee of any right shall be held by the Trustee as additional Collateral
for the repayment of the Thrifty Finance Obligations and shall be applied as
provided in Article 4 hereof.
(b) Lease and Sublease. If a Liquidation Event of Default shall have
occurred and be continuing, the Trustee, at the direction of the Required
Beneficiaries, shall direct Thrifty Finance and/or the Master Collateral Agent
to exercise (and Thrifty Finance agrees to exercise) all its rights, remedies,
powers, privileges and claims against the Lessee and the Eligible Franchisees
under or in connection with the Lease and the Subleases, respectively, and any
party to any of the Related Documents, including the right or power to take any
action to compel performance or observance by the Lessee and the Eligible
Franchisees of their obligations to Thrifty Finance or of any related party with
respect to the Lease Collateral, the right to take possession of any of the
Vehicles, subject to the rights of the Eligible Franchisees under the related
Subleases, and to give any consent, request, notice, direction, approval,
extension or waiver in respect of the Lease, and any right of Thrifty Finance to
take such action independent of such direction shall be suspended.
(c) Collateral and Master Collateral. If a Liquidation Event of
Default or a Limited Liquidation Event of Default shall have occurred and be
continuing, the Trustee may, and at the direction of the Required Beneficiaries
(in the case of a Liquidation Event of Default) or at the direction of the
Required Noteholders (in the case of a Limited Liquidation Event of Default)
shall, direct Thrifty Finance and/or the Master Collateral Agent to exercise
(and Thrifty Finance agrees to exercise) all its rights, remedies, powers,
privileges and claims with respect to the Collateral and Master Collateral. Upon
the occurrence and continuation of a Liquidation Event of Default, the Trustee
shall immediately instruct Thrifty Finance and/or the Master Collateral Agent to
deliver all Program Vehicles to the related Manufacturers or the designated
Auction for repurchase or sale (after the minimum holding period specified in
the Manufacturer's Vehicle Disposition Program) and to the extent any
Manufacturer or Auction fails to accept any such Vehicles under the terms of the
applicable Vehicle Disposition Program, to sell or dispose (or cause to be sold
or disposed) such Vehicles along with all Non-Program Vehicles in accordance
with the Lease. Upon the occurrence and continuance of a Limited Liquidation
Event of Default, the Trustee shall exercise the remedies described above only
as and to the extent necessary to pay all interest and
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principal on the related Series of Notes. Thrifty Finance agrees to comply with
all such instructions.
(d) Failure of Thrifty Finance or the Master Collateral Agent to
Take Action. If Thrifty Finance or the Master Collateral Agent shall have
failed, within fifteen (15) Business Days of receiving the direction of the
Trustee, to take commercially reasonable action to accomplish directions of the
Trustee given pursuant to clauses (b) or (c) above, the Trustee may, and at the
direction of the Required Noteholders of the affected Series of Notes (with
respect to any Limited Liquidation Event of Default) or the Required
Beneficiaries (with respect to any Amortization Event or any Liquidation Event
of Default) shall, subject (as applicable) to the terms of the Master Collateral
Agency Agreement, take such previously directed action (and any related action
as permitted under this Indenture thereafter determined by the Trustee to be
appropriate without the need under this provision or any other provision under
this Indenture to direct Thrifty Finance and/or the Master Collateral Agent to
take such action) on behalf of Thrifty Finance and the Noteholders.
(e) Right to Appointment of Receiver. In the event that the Trustee
determines to take action pursuant to the provisions of clause (d) above, the
Trustee may, without notice to Thrifty Finance, the Servicer or the Lessee,
subject to the rights of Franchisees under the Subleases, direct the Master
Collateral Agent to take legal proceedings for the appointment of a receiver to
take possession of the Vehicles pending the sale thereof and in any such event
the Trustee shall be entitled to the appointment of a receiver, and neither
Thrifty Finance, the Servicer or the Lessee shall object to such appointment.
(f) Right of Thrifty Finance to Cure Asset Amount Deficiency.
Notwithstanding anything to the contrary contained in this Section 8, if (i) a
Rapid Amortization Period commences with respect to any Series of Notes as a
result of an Amortization Event described in Section 8.1(g), (ii) during such
Rapid Amortization Period (but prior to the Series Termination Date with respect
to such Series of Notes and prior to the commencement by the Trustee of its
remedies under this Section 8) the Asset Amount Deficiency is cured, (iii) no
other Amortization Event then exists and is continuing, and (iv) Thrifty Finance
delivers to the Trustee an Officers' Certificate stating that such Asset Amount
Deficiency has been cured and requesting that such Rapid Amortization Period
terminate, then such Rapid Amortization Period shall automatically terminate as
of the date the foregoing conditions are satisfied and the applicable Revolving
Period, Accumulation Period or Controlled Amortization Period that would have
been in effect if such Rapid Amortization Period had not commenced shall
commence or recommence; provided,
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however, (x) no Revolving Period, Accumulation Period or Controlled Amortization
Period shall be extended as a result of such Rapid Amortization Period
interrupting the applicable Revolving Period, Accumulation Period or Controlled
Amortization Period, (y) no Controlled Amortization Amount shall change as a
result of such Rapid Amortization Period changing the timing or amounts of
payments made during any applicable Controlled Amortization Period and Thrifty
Finance shall be obligated to pay the full amount of all Controlled Distribution
Amounts notwithstanding that such payments may cause the Controlled Amortization
Period to terminate sooner than otherwise expected, and (z) if at the time of
the termination of such Rapid Amortization Period pursuant to the provisions of
this Section 8.2 such Series of Notes would otherwise be in a Rapid Amortization
Period, then such Rapid Amortization Period will not terminate but shall
continue uninterrupted.
Section 8.3. Special Provisions Concerning Sale of Vehicles.
(a) If and to the extent that an Asset Amount Deficiency occurs
after a Manufacturer Event of Default, the Trustee shall have the right to (and
shall, upon the direction of the Required Beneficiaries) direct the Master
Collateral Agent to take such reasonable actions at reasonable expense necessary
to sell, or cause Thrifty Finance, Thrifty or the Servicer to sell, any or all
of the Vehicles owned by Thrifty Finance or Thrifty and purchased from such
Manufacturer at a public or private sale in the amount required to cure such
Asset Amount Deficiency; provided, however, that the Lessee shall have a right
of first refusal in connection with any such sale. If the Master Collateral
Agent shall have failed, within 15 Business Days of receiving the direction of
the Trustee, to take commercially reasonable action to accomplish such
directions of the Trustee, the Trustee may, subject to the terms of the Master
Collateral Agency Agreement, take such previously directed action (and any
related action as permitted under this Indenture thereafter determined by the
Trustee to be appropriate without the need under this provision or any other
provision under this Indenture to direct the Master Collateral Agent to take
such action) on behalf of Thrifty Finance and the Noteholders. The Trustee may,
subject to the rights of Franchisees under the Subleases, direct the Master
Collateral Agent to take legal proceedings for the appointment of a receiver or
receivers (to which the Trustee shall be entitled as a matter of right) to take
possession of the Vehicles pending the sale thereof pursuant either to the
powers of sale granted by this Indenture and the Master Collateral Agency
Agreement or to a judgment, order or decree made in any judicial proceeding for
the foreclosure or involving the enforcement of this Indenture and the Master
Collateral Agency Agreement.
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(b) Upon any sale of any of the Collateral or Master Collateral
directly by the Trustee or the Master Collateral Agent at the direction of the
Trustee, whether made under the power of sale given under Section 8.2(c) or this
Section 8.3 or under judgment, order or decree in any judicial proceeding for
the foreclosure or involving the enforcement of this Indenture:
(i) the Trustee, any Noteholder and/or any Enhancement Provider may
bid for and purchase the property being sold for reasonable consideration,
and upon compliance with the terms of sale may hold, retain and possess
and dispose of such property in its own absolute right without further
accountability;
(ii) the Trustee or the Master Collateral Agent at the direction of
the Trustee may make and deliver to the purchaser or purchasers a good and
sufficient deed, bill of sale and instrument of assignment and transfer of
the property sold;
(iii) the Trustee is hereby irrevocably appointed the true and
lawful attorney-in-fact of Thrifty Finance, in its name and stead, to make
all necessary deeds, bills of sale and instruments of assignment and
transfer of the property thus sold and for such other purposes as are
necessary or desirable to effectuate the provisions (including, without
limitation, this Section 8.3) of this Indenture, and for that purpose it
may execute and deliver all necessary deeds, bills of sale and instruments
of assignment and transfer, and may substitute one or more Persons with
like power, Thrifty Finance hereby ratifying and confirming all that its
said attorney, or such substitute or substitutes, shall lawfully do by
virtue hereof, but if so requested by the Trustee or by any purchaser,
Thrifty Finance shall ratify and confirm any such sale or transfer by
executing and delivering to the Trustee or to such purchaser all property,
deeds, bills of sale, instruments of assignment and transfer and releases
as may be designated in any such request;
(iv) all right, title, interest, claim and demand whatsoever, either
at law or in equity or otherwise, of Thrifty Finance of, in and to the
property so sold shall be divested; and such sale shall be a perpetual bar
both at law and in equity against Thrifty Finance, its successors and
assigns, and against any and all Persons claiming or who may claim the
property sold or any part thereof from, through or under Thrifty Finance,
its successors or assigns;
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(v) the receipt of the Trustee or of the officer thereof making such
sale shall be a sufficient discharge to the purchaser or purchasers at
such sale for his or their purchase money, and such purchaser or
purchasers, and his or their assigns or personal representatives, shall
not, after paying such purchase money and receiving such receipt of the
Trustee or of such officer therefor, be obliged to see to the application
of such purchase money or be in any way answerable for any loss,
misapplication or non-application thereof; and
(vi) to the extent that it may lawfully do so, Thrifty Finance
agrees that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any
appraisal, valuation, stay, extension or redemption laws, or any law
permitting it to direct the order in which the Vehicles shall be sold, now
or at any time hereafter in force, which may delay, prevent or otherwise
affect the performance or enforcement of this Indenture or any of the
Related Documents.
(c) In addition to any rights and remedies now or hereafter granted
hereunder or under applicable law with respect to the Collateral and the Master
Collateral, respectively, the Trustee and the Master Collateral Agent shall
(subject to the foregoing provisions in respect of the Vehicles) have all of the
rights and remedies of secured parties under the UCC as enacted in any
applicable jurisdiction.
Section 8.4. Other Remedies.
If an Amortization Event occurs and is continuing, and a Trust
Officer of the Trustee has actual knowledge thereof, the Trustee (or the Master
Collateral Agent at the direction of the Trustee) may pursue any available
remedy to collect the payment of principal or interest on the Notes (or the
applicable Series of Notes, in the case of an Amortization Event that affects
only one Series of Notes) or to enforce the performance of any provision of the
Notes, this Indenture or any Supplement. If an Amortization Event has occurred
in accordance with Section 8.1, the Trustee shall instruct Thrifty Finance to
cease issuing Notes, and the right of Thrifty Finance to issue Notes shall
automatically terminate. In addition, the Trustee may, or shall at the direction
of the Required Beneficiaries (or the Required Noteholders, in the case of an
Amortization Event that affects only one Series of Notes), direct Thrifty
Finance or the Master Collateral Agent to exercise any rights or remedies under
any Related Document or under applicable law or otherwise.
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The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding, and any such
proceeding instituted by the Trustee shall be in its own name as trustee.
Section 8.5. Waiver of Past Events.
Subject to Section 11.2 hereof, the Noteholders of any Series owning
an aggregate principal amount of Notes in excess of 66-2/3% of the aggregate
principal amount of the Outstanding Notes of such Series, by notice to the
Trustee, may waive any existing Potential Amortization Event or Amortization
Event related to clauses (a), (b) and (g) of Section 8.1 which relate to such
Series and its consequences except a continuing Potential Amortization Event or
Amortization Event in the payment of the principal of or interest on any Note.
The holders of any Series owning an aggregate principal amount in excess of 50%
of the aggregate principal amount of Outstanding Notes of such Series, by notice
to the Trustee, may waive any existing Potential Amortization Event or
Amortization Event related to clauses (c), (i) and, unless otherwise provided in
the related Series Supplement, (j) of Section 8.1 which relate to such Series
and its consequences. Upon any such waiver, such Potential Amortization Event
shall cease to exist with respect to such Series, and any Amortization Event
with respect to such Series arising therefrom shall be deemed to have been cured
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Potential Amortization Event or impair any right consequent
thereon. A Potential Amortization Event or an Amortization Event related to
clauses (d), (e), (f) and (h) of Section 8.1 shall not be subject to waiver.
Section 8.6. Control by Required Beneficiaries and Required
Noteholders.
The Required Beneficiaries and, with respect to any Series of Notes,
the Required Noteholders of such Series may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee. However, subject to Section 9.1,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that the Trustee determines may be unduly prejudicial to the rights
of other Noteholders, or that may involve the Trustee in personal liability.
Section 8.7. Limitation on Suits.
Any other provision of this Indenture to the contrary
notwithstanding, a Noteholder may pursue a remedy with respect to this Indenture
or the Notes only if:
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(a) The Noteholder gives to the Trustee written notice of a
continuing Amortization Event;
(b) The Noteholders of at least 25% in principal amount of all then
Outstanding Series of Notes make a written request to the Trustee to
pursue the remedy;
(c) Such Noteholder or Noteholders offer and, if requested, provide
to the Trustee indemnity (which indemnity may be unsecured as to any
Noteholder or Noteholders that purchase Notes from the Initial Purchasers
on the Closing Date of the initial Series of Notes) satisfactory to the
Trustee against any loss, liability or expense;
(d) The Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) During such 60-day period the Required Beneficiaries do not give
the Trustee a direction inconsistent with the request.
A Noteholder may not use this Indenture to prejudice the rights of another
Noteholder or to obtain a preference or priority over another Noteholder.
Section 8.8. Unconditional Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Noteholder of a Note to receive payment of principal and interest on the
Note, on or after the respective due dates expressed in the Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
is absolute and unconditional and shall not be impaired or affected without the
consent of the Noteholder.
Section 8.9. Collection Suit by the Trustee.
If any Amortization Event specified in clauses (a) or (b) of Section
8.1 occurs and is continuing, the Trustee is authorized to recover judgment in
its own name and as trustee of an express trust against Thrifty Finance for the
whole amount of principal and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, an interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
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Section 8.10. The Trustee May File Proofs of Claim.
The Trustee is authorized to 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 (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders allowed in any judicial proceedings relative to Thrifty Finance (or
any other obligor upon the Notes), its creditors or its property, and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Noteholder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Noteholders, to pay the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 9.5 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 9.5 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, Notes and other properties which the
Noteholders of the Notes may be entitled to receive in such proceeding, whether
in liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Noteholder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Noteholder thereof, or to authorize the Trustee to vote in
respect of the claim of any Noteholder in any such proceeding.
Section 8.11. Priorities.
If the Trustee collects any money pursuant to this Article, the
Trustee shall pay out the money in accordance with the provisions of Article 4
of this Indenture.
Section 8.12. 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 a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of any undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the
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claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Noteholder pursuant to Section 8.7, or a suit
by Noteholders of more than 10% in principal amount of all then outstanding
Notes.
Section 8.13. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Trustee
or to the holders of Notes is intended to be exclusive of any other right or
remedy, and every right or remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given under this
Indenture or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy under this Indenture, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 8.14. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any holder of any Note to
exercise any right or remedy accruing upon any Amortization Event shall impair
any such right or remedy or constitute a waiver of any such Amortization Event
or an acquiescence therein. Every right and remedy given by this Article 8 or by
law to the Trustee or to the holders of Notes may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the holders
of Notes, as the case may be.
ARTICLE 9.
THE TRUSTEE
Section 9.1. Duties of the Trustee.
(a) If an Amortization Event has occurred and is continuing and a
Trust Officer of the Trustee has received written notice thereof or has actual
knowledge and, in the case of an Amortization Event described in Section
8.1(ii), written confirmation thereof (which confirmation the Trustee shall use
its best efforts to obtain as soon as practicable upon written request by any
Noteholder), the Trustee shall exercise such of 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 man would exercise or use under the circumstances in the
conduct of his own affairs; provided, however, that the Trustee shall have no
liability in connection with any action or inaction taken, or not taken, by it
upon the deemed occurrence of an Amortization Event of which a Trust Officer has
not received notice or
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obtained actual knowledge; provided, further, however, that the preceding
sentence shall not have the effect of insulating the Trustee from liability
arising out of the Trustee's negligence or willful misconduct.
(b) Except during the occurrence and continuance of an Amortization
Event of which the Trustee has actual knowledge:
(i) The Trustee undertakes to perform only those duties that are
specifically set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) 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, 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
grossly negligent action, its own grossly negligent failure to act, or its own
willful misconduct, except that:
(i) This clause does not limit the effect of clause (b) of this
Section 9.1.
(ii) 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.
(iii) 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 8.6.
(iv) The Trustee shall not be charged with knowledge of any default
by the Servicer in the performance of its obligations under this
Indenture, the Lease or the Master Collateral Agency Agreement unless a
Trust Officer has actual knowledge thereof.
(d) Notwithstanding anything to the contrary contained in this
Indenture or any of the Related Documents, no provision of this Indenture shall
require the Trustee to expend or risk its own funds or incur any liability if
there is reasonable ground
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(as determined by the Trustee in its sole discretion) for believing that the
repayment of such funds is not reasonably assured to it by the security afforded
to it by the terms of this Indenture. The Trustee may refuse to perform any duty
or exercise any right or power unless it receives indemnity satisfactory to it
against any loss, liability or expense. The Trustee shall not be required to
perform the obligations of, to monitor or to be responsible for the manner of
performance of the Servicer under this Indenture unless the Trustee shall be
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with terms of this Indenture or any Related Document,
in which case it shall not incur any liability for acts or omissions of the
prior Servicer.
(e) In the event that the Paying Agent or Registrar is other than
the Trustee, and the Paying Agent or Registrar shall fail to perform any
obligation, duty or agreement in the manner or on the day required to be
performed by the Paying Agent or Registrar, as the case may be, under this
Indenture, the Trustee shall be obligated as soon as practicable upon actual
knowledge of a Trust Officer thereof and in each case, subject to the Trustee's
prior receipt of all information, documents and funds, if any, necessary to
perform such function, undertake such obligation, duty or agreement in the
manner so required.
(f) Subject to Section 9.3, all moneys received by the Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee may allow and credit to
Thrifty Finance interest agreed upon by Thrifty Finance and the Trustee from
time to time as may be permitted by law.
Section 9.2. Rights of the Trustee.
Except as otherwise provided by Section 9.1:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting based upon any document believed by it to be
genuine and to have been signed or presented by the proper person.
(b) The Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through agents, custodians and nominees and
shall not be responsible
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for the misconduct or negligence of any agent, custodian or nominee
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 conferred upon it by the Indenture.
(e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture or any Supplement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the Noteholders,
pursuant to the provisions of this Indenture or any Supplement, unless
such Noteholders shall have offered to the Trustee reasonable security or
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Trustee of the obligations, upon the
occurrence of an Amortization Event (which has not been cured and of which
a Trust Officer of the Trustee has received written notice or has actual
knowledge and, in the case of an Amortization Event described in Section
8.1(ii), written confirmation (which confirmation the Trustee shall use
its best efforts to obtain as soon as practicable upon written request by
any Noteholder)), to exercise such of the rights and powers vested in it
by this Indenture or any Supplement, and to use the same degree of care
and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
(f) The Trustee shall not be bound to make any investigation into
the facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do by
the Required Noteholders of any Series which could be adversely affected
if the Trustee does not perform such acts.
(g) The Trustee shall not be liable for any losses or liquidation
penalties in connection with Permitted Investments, unless such losses or
liquidation penalties were incurred through the Trustee's own willful
misconduct, negligence or bad faith.
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Section 9.3. Individual Rights of the Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with Thrifty Finance or an
Affiliate of Thrifty Finance with the same rights it would have if it were not
Trustee. Any Paying Agent may do the same with like rights. However, the Trustee
is subject to Section 9.8.
Section 9.4. Notice of Amortization Events and Potential
Amortization Events.
If an Amortization Event or a Potential Amortization Event occurs
and is continuing and if a Trust Officer of the Trustee receives written notice
thereof, the Trustee shall promptly provide the Noteholders with notice of such
Amortization Event or the Potential Amortization Event, if such Notes are
represented by a global Note, by telephone and facsimile, and, if such Notes are
represented by Definitive Notes, by first class mail.
Section 9.5. Compensation.
(a) The Servicer shall promptly pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder as set forth in the letter agreement dated December 21, 1995 between
the Servicer and the Trustee, as may be amended from time to time. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Servicer shall reimburse the Trustee promptly upon request
for all reasonable disbursements, advances and expenses incurred or made by it
in addition to the compensation for its services. Such expenses shall include
(i) the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel and (ii) the reasonable expenses of the Trustee's agents in
administering the Collateral.
(b) The indemnification provisions in favor of the Trustee and its
officers, directors, agents and employees provided for in the Lease are hereby
incorporated by reference with the same force and effect as if set forth herein
in full. The Servicer shall not be required to reimburse any expense or
indemnify the Trustee against any loss, liability, or expense to the extent
incurred by the Trustee solely through the Trustee's own willful misconduct,
gross negligence or bad faith.
(c) When the Trustee incurs expenses or renders services after an
Amortization Event occurs, the expenses and the compensation for the services
are intended to constitute expenses of administration under the Bankruptcy Code.
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(d) This Section 9.5 shall survive the termination of this
Agreement, the Lease and the Master Collateral Agency Agreement, the maturity of
the Notes, and the resignation or removal of Bankers Trust Company, as Trustee,
and/or as Master Collateral Agent.
Section 9.6. Replacement of the Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
(b) The Trustee may, after giving forty-five (45) days prior written
notice to Thrifty Finance, the Servicer and to each Noteholder, resign at any
time and be discharged from the trust hereby created by so notifying Thrifty
Finance and the Servicer; provided, however, that no such resignation of the
Trustee shall be effective until a successor trustee has assumed the obligations
of the Trustee hereunder. The Required Beneficiaries may remove the Trustee by
so notifying the Trustee, the Servicer and Thrifty Finance. Thrifty Finance or
the Servicer may remove the Trustee if:
(i) the Trustee fails to comply with Section 9.8;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee, as debtor, under any
Insolvency Law;
(iii) a custodian or public officer takes charge of the Trustee or
its property; or
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of the Trustee for any reason, Thrifty Finance or the Servicer shall
promptly appoint an alternate successor Trustee. Within one year after the
successor Trustee takes office, the Required Beneficiaries may appoint an
alternative successor Trustee to replace the successor Trustee appointed by
Thrifty Finance.
(c) If a successor Trustee does not take office within 30 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Servicer,
Thrifty Finance or any Noteholder may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(d) If the Trustee, after written request by any Noteholder who has
been a Noteholder for at least six (6) months,
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fails to comply with Section 9.8, such Noteholder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
(e) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee, the Servicer and to Thrifty Finance.
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 and any Supplement. The successor
Trustee shall mail a notice of its succession to Noteholders. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee; provided, however, that all sums owing to the Trustee
hereunder have been paid. Notwithstanding replacement of the Trustee pursuant to
this Section 9.6 or the termination of this Indenture, the Servicer's
obligations under Section 9.5 hereof shall continue for the benefit of the
retiring Trustee.
Section 9.7. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 9.8. Eligibility Disqualification.
(a) There shall at all times be a Trustee hereunder which shall be
(i) a corporation organized and doing business under the laws of the United
States of America or of any state thereof authorized under such laws to exercise
corporate trustee power, (ii) subject to supervision or examination by Federal
or state authority and shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition, (iii) a member bank of the Federal Reserve System, and (iv) if such
Trustee is other than Bankers Trust Company, acceptable to the Required
Beneficiaries.
(b) If at any time the Trustee shall cease to satisfy the
eligibility requirements of clauses (a)(i) through (a)(iii) above, the Trustee
shall resign immediately in the manner and with the effect specified in Section
9.6.
Section 9.9. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Indenture or any
Supplement, at any time, for the purpose of meeting any legal requirements of
any jurisdiction in which any part of the Collateral may at the time be located,
the Trustee shall have the power and may execute and deliver all instruments
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to appoint one or more persons to act as a co-trustee or co-trustees, or
separate trustee or separate trustees, of all or any part of the Collateral, and
to vest in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Collateral, or any part thereof, and, subject to
the other provisions of this Section 9.9, such powers, duties, obligations,
rights and trusts as the Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 9.8, and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 9.6. No co-trustee shall be appointed without the consent
of the Servicer unless such appointment is required as a matter of state law or
to enable the Trustee to perform its functions hereunder.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) The Notes of each Series shall be authenticated and delivered
solely by the Trustee or an authenticating agent appointed by the Trustee;
(ii) All rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder),
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Assets or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Trustee;
(iii) No trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iv) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then
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separate trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall refer to
this Indenture and the conditions of this Article 9. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Indenture or any Supplement, specifically including
every provision of this Indenture or any Supplement relating to the conduct of,
affecting the liability of, or affording protection to, the Trustee. Every such
instrument shall be filed with the Trustee and a copy thereof given to the
Servicer.
(d) Any separate trustee or co-trustee may at any time constitute
the Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Indenture or any Supplement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
(e) In connection with the appointment of a co-trustee, the Trustee
may, at any time, at the Trustee's sole cost and expense, without notice to the
Noteholders, delegate its duties under this Base Indenture and any Supplement to
any Person who agrees to conduct such duties in accordance with the terms
hereof; provided, however, that no such delegation shall relieve the Trustee of
it obligations and responsibilities hereunder with respect to any such delegated
duties.
Section 9.10. Representations and Warranties of Trustee.
The Trustee represents and warrants that:
(i) The Trustee is a banking corporation duly organized, validly
existing and in good standing under the laws of the State of New York;
(ii) The Trustee has full power, authority and right to execute,
deliver and perform this Indenture and any Supplement issued concurrently
with this Indenture and to authenticate the Notes, and has taken all
necessary action to authorize the execution, delivery and performance by
it of this Indenture and any Supplement issued concurrently with this
Indenture and to authenticate the Notes;
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(iii) This Indenture has been duly executed and delivered by the
Trustee;
(iv) The Trustee meets the requirements of eligibility as a trustee
hereunder set forth in Section 9.8 hereof; and
(v) The Trustee makes no representations or warranties as to the
enforceability or validity of the Notes, or the sufficiency of any
collateral in respect of such Note.
Section 9.11. Knowledge of the Trustee.
For purposes hereof, a Trust Officer of the Trustee shall not be
deemed to have "knowledge" of a matter, event or occurrence solely by reason of
such matter, event or occurrence being within the public domain as, for example,
displayed in the media (including, without limitation, newspaper, radio,
television or periodical magazine).
ARTICLE 10.
DISCHARGE OF INDENTURE
Section 10.1. Termination of Thrifty Finance's Obligations.
(a) This Indenture shall cease to be of further effect (except that
the Servicer's obligations under Section 9.5 and Thrifty Finance's, the
Trustee's and Paying Agent's obligations under Sections 10.2 and 10.3 shall
survive) when all Outstanding Notes theretofore authenticated and issued have
been delivered (other than destroyed, lost or stolen Notes which have been
replaced or paid) to the Trustee for cancellation and Thrifty Finance has paid
all sums payable hereunder.
(b) In addition, except as may be provided to the contrary in any
Supplement, Thrifty Finance may terminate all of its obligations under this
Indenture if:
(i) Thrifty Finance irrevocably deposits in trust with the Trustee
or, at the option of the Trustee, with a trustee reasonably satisfactory
to the Trustee and Thrifty Finance under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, money or U.S.
Government Obligations sufficient and available to pay when due principal
and interest on the Notes to maturity or redemption, as the case may be,
and to pay all other sums payable by it hereunder; provided, however, that
(1) the trustee of the irrevocable trust shall have been irrevocably
instructed to pay such money or the proceeds of such
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U.S. Government Obligations to the Trustee and (2) the Trustee shall have
been irrevocably instructed to apply such money or the proceeds of such
U.S. Government Obligations to the payment of said principal and interest
with respect to the Notes;
(ii) Thrifty Finance delivers to the Trustee an Officers'
Certificate stating that all conditions precedent to satisfaction and
discharge of this Indenture have been complied with, and an Opinion of
Counsel and a certificate from a firm of certified public accountants to
the same effect; and
(iii) Such termination will satisfy the Rating Agencies Condition.
(c) After such irrevocable deposit made pursuant to Section 10.1(b)
and satisfaction of the other conditions set forth therein, or the satisfaction
of the conditions set forth in Section 10.1(a), the Trustee upon request shall
acknowledge in writing the discharge of Thrifty Finance's obligations under this
Indenture except for those surviving obligations specified above.
In order to have money available on a payment date to pay principal
or interest on the Notes, the U.S. Government Obligations shall be payable as to
principal or interest at least one Business Day before such payment date in such
amounts as will provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
"U.S. Government Obligations" means direct obligations of the United
States of America, or any agency or instrumentality thereof for the payment of
which the full faith and credit of the United States of America is pledged.
Section 10.2. Application of Trust Money.
The Trustee or a trustee satisfactory to the Trustee and Thrifty
Finance shall hold in trust money or U.S. Government Obligations deposited with
it pursuant to Section 10.1. The Trustee shall apply the deposited money and the
money from U.S. Government Obligations through the Paying Agent in accordance
with this Indenture to the payment of principal and interest on the Notes.
The provisions of this Section shall survive the expiration or
earlier termination of this Indenture.
Section 10.3. Repayment to Thrifty Finance.
The Trustee and the Paying Agent shall promptly pay or return to
Thrifty Finance upon written request any excess money
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or pursuant to Sections 2.11 and 2.14 any Notes held by them at any time.
Subject to Section 2.7(c), the Trustee and the Paying Agent shall
pay to Thrifty Finance upon written request any money held by them for the
payment of principal or interest that remains unclaimed for two years after the
date upon which such payment shall have become due.
The provisions of this Section shall survive the expiration or
earlier termination of this Indenture.
ARTICLE 11.
AMENDMENTS
Section 11.1. Without Consent of the Noteholders.
Without the consent of any Noteholder but with the consent of the
Rating Agencies, Thrifty Finance, the Servicer, the Trustee, and any applicable
Enhancement Provider, at any time and from time to time, may enter into one or
more Supplements hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) to create a new Series of Notes (including, without limitation,
making such modifications to the Indenture and the other Related Documents
as may be required to issue a Segregated Series of Notes);
(b) to amend the definitions of "Eligible Vehicle Disposition
Program" or "Eligible Manufacturer" and to make changes related to such
amendments;
(c) to add to the covenants of Thrifty Finance for the benefit of
the Noteholders of all or any Series of Notes (and if such covenants are
to be for the benefit of less than all Series of Notes, stating that such
covenants are expressly being included solely for the benefit of such
Series) or to surrender any right or power herein conferred upon Thrifty
Finance (provided, however, that Thrifty Finance will not pursuant to this
subsection 11.1(c) surrender any right or power it has against the
Servicer, the Lessee or any Manufacturer);
(d) to mortgage, pledge, convey, assign and transfer to the Trustee
any property or assets as security for the Notes and to specify the terms
and conditions upon which such property or assets are to be held and dealt
with by the Trustee and to set forth
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such other provisions in respect thereof as may be required by the
Indenture or as may, consistent with the provisions of the Indenture, be
deemed appropriate by Thrifty Finance and the Trustee, or to correct or
amplify the description of any such property or assets at any time so
mortgaged, pledged, conveyed and transferred to the Trustee;
(e) to cure any mistake, ambiguity, defect, or inconsistency or to
correct or supplement any provision contained herein or in any Supplement
or in any Notes issued hereunder;
(f) to add to or change any of the provisions of the Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Notes, registrable or not registrable as to principal, and with or without
interest coupons;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes of one or more
Series and to add to or change any of the provisions of the Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee; or
(h) to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any other
provisions with respect to matters or questions arising under this
Indenture;
provided, however, that, as evidenced by an Opinion of Counsel, such action
shall not adversely affect in any material respect the interests of any
Noteholders. Upon the request of Thrifty Finance, accompanied by a resolution of
the Board of Directors of Thrifty Finance authorizing the execution of any
Supplement to effect such amendment, and upon receipt by the Trustee of the
documents described in Section 2.2 hereof, the Trustee shall join with Thrifty
Finance in the execution of any Supplement authorized or permitted by the terms
of this Indenture and shall make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into such Supplement which affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 11.2. With Consent of the Noteholders.
Except as provided in Section 11.1, the provisions of this Indenture
and any Supplement (unless otherwise provided in such Supplement) and each other
Related Document to which Thrifty Finance is a party may from time to time be
amended, modified or
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waived, if such amendment, modification or waiver is in writing and consented to
in writing by Thrifty Finance, the Servicer, the Trustee, any applicable
Enhancement Provider, the Rating Agencies, and the Required Beneficiaries (or
the Required Noteholders of a Series of Notes, in respect of any amendment,
modification or waiver to this Indenture, the Supplement with respect to such
Series of Notes or any Related Document which affects only the Noteholders of
such Series of Notes and does not affect the Noteholders of any other Series of
Notes, as substantiated by an Opinion of Counsel to such effect, which Opinion
of Counsel may, to the extent same is based on any factual matter, rely upon an
Officer's Certificate as to the truth of such factual matter). Notwithstanding
the foregoing:
(i) any modification of this Section 11.2, any requirement hereunder
that any particular action be taken by Noteholders holding the relevant
percentage in principal amount of the Notes or any change in the
definition of the terms "Aggregate Asset Amount" or "Asset Amount
Deficiency" (other than in connection with the issuance of a Segregated
Series of Notes), "Eligible Manufacturer" or "Eligible Vehicle Disposition
Program" (other than in connection with a waiver of such eligibility
requirement by the Noteholders of any Series of Notes, but only to the
extent so provided in the related Supplement in respect of such Series of
Notes), "Invested Amount", "Invested Percentage", or the applicable amount
of Enhancement or any defined term used for the purpose of any such
definitions will require the consent of each affected Noteholder or, as
applicable, Noteholders holding the relevant percentage in principal
amount of the Notes; and
(ii) any amendment, waiver or other modification that would (a)
extend the due date for, or reduce the amount of any scheduled repayment
or prepayment of principal of or interest on any Note (or reduce the
principal amount of or rate of interest on any Note) shall require the
consent of each affected Noteholder; (b) approve the assignment or
transfer by Thrifty Finance of any of its rights or obligations hereunder
or under any other Related Document to which it is a party except pursuant
to the express terms hereof or thereof will require the consent of each
Noteholder; (c) release any obligor under any Related Document to which it
is a party except pursuant to the express terms of such Related Document
will require the consent of each Noteholder; provided, however, that the
Liens on Vehicles may be released as provided in Section 3.5; (d) affect
adversely the interests, rights or obligations of any Noteholder
individually in
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comparison to any other Noteholder will require the consent of such
Noteholder; (e) release any Collateral other than in accordance with the
terms hereof and of the Related Documents; or (f) amend or otherwise
modify any Amortization Event will require the consent of each affected
Noteholder.
No failure or delay on the part of any Noteholder or the Trustee in exercising
any power or right under this Indenture or any other Related Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power or right preclude any other or further exercise thereof or the
exercise of any other power or right.
Section 11.3. Supplements.
Each amendment or other modification to this Indenture or the Notes
shall be set forth in a Supplement. Each Supplement shall require the consent of
the Rating Agencies. In addition to the manner of amendment provided in Section
11.2, each Supplement may be amended as provided for in such Supplement.
Section 11.4. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Noteholder of a Note is a continuing consent by the Noteholder and every
subsequent Noteholder of a Note or portion of a Note that evidences the same
debt as the consenting Noteholder's Note, even if notation of the consent is not
made on any Note. However, any such Noteholder or subsequent Noteholder may
revoke the consent as to his Note or portion of a Note if the Trustee receives
written notice of revocation before the date the amendment or waiver becomes
effective. An amendment or waiver becomes effective in accordance with its terms
and thereafter binds every Noteholder. Thrifty Finance may fix a record date for
determining which Noteholders must consent to such amendment or waiver.
Section 11.5. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment or
waiver on any Note thereafter authenticated. Thrifty Finance in exchange for all
Notes may issue and the Trustee shall authenticate new Notes that reflect the
amendment or waiver. Failure to make the appropriate notation or issue a new
Note shall not affect the validity and effect of such amendment or waiver.
Section 11.6. The Trustee to Sign Amendments, etc.
The Trustee shall sign any Supplement authorized pursuant to this
Article 11 if such Supplement does not adversely
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affect the rights, duties, liabilities or immunities of the Noteholders or the
Trustee. If such Supplement does not meet the condition in the preceding
sentence, the Trustee may, but need not, sign it. In signing or refusing to sign
such Supplement, the Trustee shall be entitled to receive, if requested, an
indemnity reasonably satisfactory to it and to receive and, subject to Section
9.1, shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that such Supplement is authorized or
permitted by this Indenture and that it will be valid and binding upon Thrifty
Finance in accordance with its terms. Thrifty Finance may not sign a Supplement
until its Board of Directors approves it.
ARTICLE 12.
MISCELLANEOUS
Section 12.1. Notices.
(a) Any instruction, notice or communication by Thrifty Finance or
the Trustee to the others is duly given if in writing and delivered in person or
mailed by first-class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the other's address:
If to Thrifty Finance:
5330 East 31st Street, Suite 100
Tulsa, Oklahoma 74135
Attn: Steven B. Hildebrand, President
Phone: (918) 669-2550
Fax: (918) 669-2301
If to the Trustee (with copy in each instance to the Paying Agent at
the same address or, if the Trustee is not the Paying agent, at such address as
has been provided by notice pursuant to this Section 12.1):
Bankers Trust Company
4 Albany Street
New York, New York 10006
Attn: Corporate Trust and Agency Group
Phone: (212) 250-5326
Fax: (212) 250-6439
Thrifty Finance or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications;
provided, however, Thrifty Finance may not at any time designate more than a
total of three (3) addresses to which notices must be sent in order to be
effective.
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Any notice (i) given in person shall be deemed delivered on the date
of delivery of such notice, (ii) given by first class mail shall be deemed given
five (5) days after the date that such notice is mailed, (iii) delivered by
telex or telecopier shall be deemed given on the date of delivery of such
notice, and (iv) delivered by overnight air courier shall be deemed delivered
one Business Day after the date that such notice is delivered to such overnight
courier.
Notwithstanding any provisions of this Indenture to the contrary,
the Trustee shall have no liability based upon or arising from the failure to
receive any notice required by or relating to this Indenture or the Notes.
If Thrifty Finance mails a notice or communication to Noteholders,
it shall mail a copy to the Trustee and the Master Collateral Agent (if the
Master Collateral Agent is other than the Trustee) at the same time.
(b) Where the Indenture provides for notice to Noteholders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if sent in writing and mailed, first-class postage prepaid,
to each Noteholder affected by such event, at its address as it appears in the
Note Register, not later than the latest date, and not earlier than the earliest
date, prescribed (if any) for the giving of such notice. In any case where
notice to Noteholder is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Noteholder shall
affect the sufficiency of such notice with respect to other Noteholders, and any
notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by any Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Noteholders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In the case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made that is satisfactory to the
Trustee shall constitute a sufficient notification for every purpose hereunder.
Section 12.2. Communication by Noteholders With Other Noteholders.
Noteholders may communicate with other Noteholders with respect to
their rights under this Indenture or the Notes.
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Section 12.3. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by Thrifty Finance to the Trustee to
take any action under this Indenture, Thrifty Finance shall furnish to the
Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.4) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.4) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.
Section 12.4. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, 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
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
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Section 12.5. Rules by the Trustee and the Paying Agent.
The Trustee may make reasonable rules for action by or at a meeting
of Noteholders. The Registrar or Paying Agent may institute reasonable
requirements in order to perform its functions.
Section 12.6. Duplicate Originals.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
Section 12.7. Benefits of Indenture.
Nothing in this Indenture or in the Notes, expressed or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under the Indenture.
Section 12.8. Payment on Business Day.
In any case where any Payment Date, redemption date or maturity date
of any Note shall not be a Business Day, then (notwithstanding any other
provision of this Indenture) payment of interest or principal (and premium, if
any), as the case may be, need not be made on such date but may be made on the
next succeeding Business Day with the same force and effect as if made on the
Payment Date, redemption date, or maturity date; provided, however, that no
interest shall accrue for the period from and after such Payment Date,
redemption date, or maturity date, as the case may be to and including such next
succeeding Business Day.
Section 12.9. Governing Law.
The laws of the State of New York, including, without limitation,
the UCC, but excluding any conflicts of laws, shall govern and be used to
construe this Indenture and the Notes and the rights and duties of the Trustee,
Registrar, Paying Agent, Noteholders and Note Owners.
Section 12.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of Thrifty Finance or an Affiliate of Thrifty Finance. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
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Section 12.11. Successors.
All agreements of Thrifty Finance in this Indenture and the Notes
shall bind its successor; provided, however, Thrifty Finance may not assign its
obligations or rights under this Indenture or any Related Document. All
agreements of the Trustee in this Indenture shall bind its successor.
Section 12.12. Severability.
In case any provision in this Indenture or in the Notes 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.
Section 12.13. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 12.14. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 12.15. Termination; Collateral.
This Indenture, and any grants, pledges and assignments hereunder,
shall become effective concurrently with the issuance of the first Series of
Notes and shall terminate when (a) all Thrifty Finance Obligations shall have
been fully paid and satisfied, (b) the obligations of each Enhancement Provider
under any Enhancement and related documents have terminated, and (c) any
Enhancement shall have terminated, at which time the Trustee, at the request of
Thrifty Finance and upon receipt of an Officers' Certificate from Thrifty
Finance to the effect that the conditions in clauses (a), (b) and (c) above have
been complied with and upon receipt of a certificate from each Enhancement
Provider to the effect that the conditions in clauses (a), (b) and (c) above
relating to the Thrifty Finance Obligations to the Noteholders and each
Enhancement Provider have been complied with, shall reassign (without recourse
upon, or any warranty whatsoever by, the Trustee) and deliver all Collateral and
documents then in the custody or possession of the Trustee promptly to Thrifty
Finance.
Thrifty Finance and the Noteholders hereby agree that, if any
Deposited Funds remain on deposit in the Collection
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Account after the termination of this Indenture, such amounts shall be released
by the Trustee and paid to Thrifty Finance at its written request.
Section 12.16. No Bankruptcy Petition Against Thrifty Finance.
Each of the Noteholders, the Trustee, the Servicer and the Retained
Interestholder hereby covenants and agrees that, prior to the date which is one
year and one day after the payment in full of the latest maturing Note, it will
not institute against, or join with any other Person in instituting, against
Thrifty Finance any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings, under any Federal or state
bankruptcy or similar law; provided, however, that nothing in this Section 12.16
shall constitute a waiver of any right to indemnification, reimbursement or
other payment from Thrifty Finance pursuant to this Indenture. In the event that
any such Noteholder, the Trustee or the Servicer takes action in violation of
this Section 12.16, Thrifty Finance shall file an answer with the bankruptcy
court or otherwise properly contesting the filing of such a petition by any such
Noteholder, the Trustee or the Servicer against Thrifty Finance or the
commencement of such action and raising the defense that such Noteholder, the
Trustee or the Servicer has agreed in writing not to take such action and should
be estopped and precluded therefrom and such other defenses, if any, as its
counsel advises that it may assert. The provisions of this Section 12.16 shall
survive the termination of this Indenture, and the resignation or removal of the
Servicer or the Trustee. Nothing contained herein shall preclude participation
by any Noteholder, the Trustee or the Servicer in the assertion or defense of
its claims in any such proceeding involving Thrifty Finance.
Section 12.17. No Recourse.
The obligations of Thrifty Finance under this Indenture are solely
the corporate obligations of Thrifty Finance. No recourse shall be had for the
payment of any amount owing in respect of any fee hereunder or any other
obligation or claim arising out of or based upon this Indenture against any
Affiliate, stockholder, employee, officer, director or incorporator of Thrifty
Finance or its Affiliates. Fees, expenses or costs payable by Thrifty Finance
hereunder shall be payable by Thrifty Finance to the extent and only to the
extent that Thrifty Finance is reimbursed therefor pursuant to the Lease or the
Related Documents, or funds are then available or thereafter become available
for such purpose pursuant to Article 4. Each Noteholder, by accepting a Note,
agrees to the foregoing and waives (to the extent permitted by law) any other
such rights of recourse.
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Section 12.18. Confidentiality.
The Trustee shall not disclose any Confidential Information to any
Person without the consent of Thrifty or Thrifty Finance, except as otherwise
authorized or permitted hereunder, or any documentation related hereto, or as
may be necessary for the Trustee to perform its duties hereunder, or as may be
necessary in connection with its corporate trust business and administration
(including audits, regulatory reporting, and accounting inquiries), provided,
however, that the Trustee shall require any such Person to whom the Trustee
releases Confidential Information to agree not to disclose such information to
any Person, other than (a) to any Noteholder or to the Trustee's Affiliates or
to any of their respective officers, directors, employees, agents and advisors
and to actual or prospective assignees and participants, and then only on a
confidential basis, (b) as required by any law, rule or regulation or judicial
process which may include, without limitation, a subpoena, a document request,
interrogatories, or an order of a court, magistrate, administrative body or
governmental agency or regulator, provided, however, that Thrifty or Thrifty
Finance shall be given notice to the extent practicable and (c) as requested or
required by any state, federal or foreign authority or examiner regulating such
Person. "Confidential Information" means proprietary information of Thrifty or
Thrifty Finance or other information that Thrifty or Thrifty Finance furnishes
to the Trustee on a confidential basis, but does not include any such
information that is or becomes generally available to the public or that is or
becomes available to the Trustee from a source other than Thrifty or Thrifty
Finance.
* * *
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IN WITNESS WHEREOF, the Trustee and Thrifty Finance have caused this
Base Indenture to be duly executed by their respective duly authorized officers
as of the day and year first written above.
THRIFTY CAR RENTAL FINANCE
CORPORATION, as Issuer
By: /s/ Steven B. Hildebrand
--------------------------
Name: Steven Hildebrand
Title: President
BANKERS TRUST COMPANY,
as Trustee
By: /s/ Danielle R. Furey
--------------------------
Name: Danielle R. Furey
Title: Assistant Treasurer
<PAGE> 103
SCHEDULE 1
TO THE
BASE INDENTURE
DEFINITIONS LIST
"Accrued Amounts" means, with respect to any Series of Notes (or any class
(or portion thereof) of such Series of Notes), on any date of determination, the
sum of (i) accrued and unpaid interest on the Notes of such Series of Notes (or
the applicable class thereof) as of such date, (ii) the portion of the accrued
and unpaid Monthly Servicing Fee (and any Supplemental Monthly Servicing Fee)
allocated to such Series of Notes (or the applicable class thereof) pursuant to
Section 26.1 of the Lease, if on such date, and (iii) the product of (A) all
other accrued and unpaid fees and expenses of Thrifty Finance on such date,
times (B) a fraction, the numerator of which is the Invested Amount of such
Series of Notes (or the applicable class thereof) on such date and the
denominator of which is the Aggregate Invested Amount of all Series of Notes on
such date.
"Accumulation Period" means, with respect to any Series of Notes, the
period, if any, specified in the applicable Supplement.
"Acquired Vehicle" means any Eligible Vehicle, other than a Financed
Vehicle, that is acquired by Thrifty Finance.
"Affiliate" means, with respect to any specified Person, another Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified. For purposes
of this definition, "control" means (a) the power to direct the management and
policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise or (b) beneficial ownership of 10%
or more of the voting common equity of a Person; and "controlled" and
"controlling" have meanings correlative to the foregoing.
"Agent" means any Registrar or Paying Agent.
"Aggregate Asset Amount" means, on any date of determination, without
duplication, the sum of (i) the Net Book Value of all Vehicles leased under the
Lease as of such date pursuant to Section 3.1 of the Lease, plus (ii) all
amounts receivable, as of such date, by Thrifty Finance or Thrifty from Eligible
Manufacturers under and in accordance with their respective Eligible Vehicle
Disposition Programs, or from Eligible Manufacturers as incentive payments,
allowances, premiums, supplemental payments or otherwise, in each case with
respect to Vehicles at any time owned, financed or refinanced by
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Thrifty Finance, plus (iii) all amounts (other than amounts specified in clause
(ii) above) receivable, as of such date, by Thrifty Finance or Thrifty from any
person or entity in connection with the Auction, sale or other disposition of
Eligible Vehicles at any time leased under the Lease, plus (iv) all accrued and
unpaid Monthly Base Rent and Monthly Supplemental Payments (other than amounts
specified in clauses (ii) and (iii) above), plus (v) cash and Permitted
Investments on deposit in the Collection Account and, to the extent cash and
Permitted Investments in the Master Collateral Account are allocable to the
Trustee as Beneficiary pursuant to the Master Collateral Agency Agreement and
are not distributable to or at the direction of Thrifty pursuant thereto, cash
and Permitted Investments in the Master Collateral Account, (less any portion
thereof allocated to the Retained Interestholder).
"Aggregate Invested Amount" means the sum of the Invested Amounts with
respect to all Series of Notes then Outstanding.
"Aggregate Principal Balance" means, for any date of determination and for
any Series or class of Notes, the aggregate unpaid principal amount of the
Outstanding Notes of such Series or class as of such date.
"Amortization Event" with respect to each Series of Notes, has the meaning
specified in Section 8.1 of the Base Indenture.
"Amortization Period" means, with respect to any Series of Notes, the
period following the Revolving Period (as defined in any related Supplement)
which shall be the Accumulation Period, the Controlled Amortization Period, or
the Rapid Amortization Period, each as defined in the related Supplement.
"Annual Noteholders' Tax Statement" is defined in Section 5.4(b) of the
Base Indenture.
"Annual Certificate" is defined in Section 24.4(g) of the Lease.
"Asset Amount Deficiency" means, with respect to any date of
determination, the amount, if any, by which the Required Asset Amount on such
date exceeds the Aggregate Asset Amount on such date.
"Assets" means any interest of any kind in any assets or property of any
kind (including, without limitation, any interest in Vehicles), tangible or
intangible, real, personal or mixed, now owned or hereafter acquired by Thrifty
Finance.
"Assignment Agreement" means a Vehicle Disposition Program Assignment
Agreement, in the form attached as Exhibit E to the
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Master Collateral Agency Agreement, or in such other form as is acceptable to
each Rating Agency, between Thrifty and/or Thrifty Finance, as assignor and the
Master Collateral Agent, as assignee, and acknowledged by the applicable
Manufacturer, pursuant to which Thrifty and/or Thrifty Finance assigns as
collateral to the Master Collateral Agent all of Thrifty's and/or Thrifty
Finance's right, title and interest in, to and under a Vehicle Disposition
Program.
"Auction" means the set of procedures specified in a Vehicle Disposition
Program for sale or disposition of Program Vehicles through auctions and at
auction sites designated by such Vehicles' Manufacturer pursuant to such Vehicle
Disposition Program.
"Authorized Officer" means (a) as to Thrifty Finance, any of its
President, any Vice President, the Secretary or any Assistant Secretary and (b)
as to Thrifty or the Lessee, those officers, employees and agents of Thrifty or
the Lessee, in each case whose signatures and incumbency shall have been
certified as the authentic signatures of duly qualified and elected persons
authorized to act on behalf of such entities.
"Availability Payment" is defined in Section 5.2 of the Lease.
"Bankruptcy Code" means The Bankruptcy Reform Act of 1978, as amended from
time to time, and as codified as 11 U.S.C. Section 101 et seq.
"Base Amount" means, as of any date of determination, the sum of the Net
Book Values of all Financed Vehicles leased under the Financing Lease as of such
date, each such Net Book Value calculated as of the first day contained within
both the calendar month in which such date of determination occurs and the
Vehicle Term for the related Financed Vehicle, plus all accrued and unpaid
Monthly Base Rent thereunder as of such date.
"Base Indenture" means the Indenture, dated as of December 13, 1995,
between Thrifty Finance and the Trustee, as the same may be amended, modified or
supplemented from time to time in accordance with its terms, exclusive of
Supplements creating new Series of Notes.
"Base Lease" means the Master Motor Vehicle Lease and Servicing Agreement,
dated as of December 13, 1995, between Thrifty Finance, as the lessor
thereunder, and Thrifty, as the lessee thereunder, as the same may be amended,
modified or supplemented from time to time in accordance with its terms,
exclusive of Lease Annexes.
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"Beneficiary" is defined in the preamble of the Master Collateral Agency
Agreement.
"Board of Directors" means the Board of Directors of Thrifty Finance,
Thrifty or the Lessee, as applicable, or any authorized committee of the Board
of Directors.
"Book-Entry Notes" means beneficial interests in the Notes, ownership and
transfers of which shall be evidenced or made through book entries by a Clearing
Agency as described in Section 2.17 of the Base Indenture; provided that after
the occurrence of a condition whereupon book-entry registration and transfer are
no longer permitted and Definitive Notes are issued to the Note Owners, such
Definitive Notes shall replace Book-Entry Notes.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banks are authorized by law to close in New York City, New York.
"Capitalized Cost" means, with respect to any Vehicle, the Initial
Acquisition Cost of such Vehicle minus any Incentive Payments used to reduce the
Initial Acquisition Cost of such Vehicle, in accordance with the applicable
Manufacturer incentive program or GAAP, and due from the Manufacturer with
respect to such Vehicle.
"Carrying Charges" means, as of any day, without duplication, the
aggregate of all Trustee fees, servicing fees (other than supplemental servicing
fees) and other fees and expenses and indemnity amounts, if any, payable by the
Lessor or the Servicer under the Indenture or the other Related Documents which
have accrued during the Related Month.
"Carryover Controlled Amortization Amount" means, with respect to each
Series of Notes, the amount specified as such in the related Supplement.
"Casualty" means, with respect to any Vehicle, that (i) such Vehicle is
lost, stolen (and not recovered within 60 days of being reported stolen),
destroyed, seized or otherwise rendered permanently unfit or unavailable for
use, (including vehicles that are rejected pursuant to Section 2.2 of the
Lease), or (ii) such Vehicle is not accepted for Auction or repurchase for any
reason within thirty (30) days of initial submission and is not designated a
Non-Program Vehicle pursuant to Section 14 of the Lease (other than, in the case
of clause (ii) above, the applicable Manufacturer's willful refusal or inability
to comply with its obligations under its Vehicle Disposition Program).
"Casualty Payment" is defined in Section 7 of the Lease.
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"Cede" means Cede & Co., a nominee of DTC.
"Cedel" means Cedel Bank, societe anonyme.
"Certificate of Title" means, with respect to each Vehicle, the
certificate of title applicable to such Vehicle duly issued in accordance with
the certificate of title act or statute of the jurisdiction applicable to such
Vehicle.
"Chrysler" means Chrysler Corporation, a Delaware corporation.
"Chrysler Limited Guarantee Agreement" means the Limited Guarantee
Agreement, dated as of December 13, 1995, between Chrysler and the Master
Collateral Agent, as the same may be amended, modified or supplemented from time
to time in accordance with its terms.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended, or
any successor provision thereto or Euroclear and Cedel. The initial Clearing
Agencies shall be DTC, Euroclear and Cedel.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means, with respect to any Series of Notes, the date of
issuance of such Series of Notes, as specified in the related Supplement.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any successor statute of similar
import, together with the rules and regulations promulgated or issued
thereunder, in each case as in effect from time to time. References to sections
of the Code also refer to any successor sections.
"Collateral" is defined in Section 3.1 of the Base Indenture.
"Collection Account" is defined in Section 4.1 of the Base Indenture.
"Collections" means all payments including, without limitation, all
Recoveries, by, or on behalf of (i) Thrifty under the Lease, (ii) any
Manufacturer, under its Vehicle Disposition Program or any incentive program,
with respect to any Vehicles,
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(iii) any other Person as proceeds from the sale of Vehicles, payment of
insurance proceeds or warranty payments, whether such payments are in the form
of cash, checks, wire transfers or other form of payment and whether in respect
of principal, interest, repurchase price, fees, expenses or otherwise and (iv)
all amounts earned on Permitted Investments arising out of funds in the
Collection Account and in the Master Collateral Account (to the extent allocable
to the Trustee as Beneficiary thereunder). To the extent so specified in a
Supplement, Collections shall also include all proceeds from the sale of the
Notes issued under such Supplement.
"Company Order" and "Company Request" mean a written order or request
signed in the name of Thrifty Finance by any one of its Authorized Officers and
delivered to the Trustee.
"Condition Report" means a condition report with respect to a Vehicle,
signed and dated by the Lessee or Franchise and Manufacturer or its agent in
accordance with the applicable Vehicle Disposition Program.
"Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (a) with respect to
any indebtedness, lease, dividend, letter of credit or other obligation of
another if the primary purpose or intent thereof by the Person incurring the
Contingent Obligation is to provide assurance to the obligee of such obligation
of another that such obligation of another will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss in respect
thereof or (b) under any letter of credit issued for the account of that Person
or for which that Person is otherwise liable for reimbursement thereof.
Contingent Obligation shall include (a) the direct or indirect guarantee,
endorsement (otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, and (b) any liability of such Person for
the obligations of another through any agreement (contingent or otherwise) to
(i) purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), (ii) maintain the solvency of any balance sheet item, level of
income or financial condition of another or (iii) make take-or-pay or similar
payments if required regardless of non-performance by any other party or parties
to an agreement, if in the case of any agreement described under clause (b)(i)
or (ii) of this sentence the primary purpose or intent thereof is as described
in the preceding sentence. The amount of
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any Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported.
"Contractual Obligation" means, with respect to any Person, any provision
of any security issued by that Person or of any indenture, mortgage, deed of
trust, contract, undertaking, agreement or other instrument to which that Person
is a party or by which it or any of its properties is bound or to which it or
any of its properties is subject.
"Controlled Amortization Period" means, with respect to any Series of
Notes, the period specified in the applicable Supplement.
"Controlled Distribution Amount" means, with respect to any class of
Notes, the amount (or amounts) specified in the applicable Supplement.
"Controlled Group" means, with respect to any Person, such Person, whether
or not incorporated, and any corporation, trade or business that is, along with
such Person, a member of a controlled group of corporations or a controlled
group of trades or businesses as described in Sections 414(b), (c), (m) and (o),
respectively, of the Code.
"Corporate Trust Office" shall mean the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
which office at the date of the execution of the Base Indenture is located at 4
Albany Street, New York, New York 10006 or at any other time at such other
address as the Trustee may designate from time to time by notice to the
Noteholders and Thrifty Finance.
"Court" means any court, tribunal, arbitrator or other adjudicative
authority in any proceeding.
"Daily Report" is defined in Section 24.4(a) of the Lease.
"Defaulting Manufacturer" is defined in Section 18 of the Lease.
"Definitions List" means this Definitions List, as the same may be
amended, supplemented or modified from time to time in accordance with the terms
of the Base Indenture.
"Definitive Notes" is defined in Section 2.5(c) of the Base Indenture.
"Delinquent Disposition Proceeds" means Disposition Proceeds due and owing
from the purchaser of or Auction facility for a
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Non-Program Vehicle but unpaid for a period of thirty (30) days or more from the
date of sale of such Vehicle.
"Delinquent Guaranteed Payment" means a Guaranteed Payment due and owing
from a Manufacturer but unpaid for a period of sixty (60) days or more from the
date of Auction of the related Vehicle under such Manufacturer's Vehicle
Disposition Program.
"Delinquent Incentive Payments" means Incentive Payments due and owing
from a Manufacturer but unpaid for a period of sixty (60) days or more from the
date of delivery of the related Vehicle in accordance with such Manufacturer's
incentive program, or from such other date on which the Incentive Payment
becomes due and payable as is specified in such incentive program.
"Delinquent Repurchase Payment" means a Repurchase Payment due and owing
from a Manufacturer but unpaid for a period of sixty (60) days or more from the
date of turnback of a Program Vehicle under such Manufacturer's Vehicle
Disposition Program.
"Demand Note" means the revolving note substantially in the form of
Exhibit B of the Base Indenture.
"Deposited Funds" means all funds on deposit in the Collection Account.
"Depreciation Charge" means, for any date of determination, (a) with
respect to any Program Vehicle, the scheduled daily depreciation charge for such
Vehicle set forth by the Manufacturer in its Vehicle Disposition Program for
such Vehicle, and (b) with respect to any Non-Program Vehicle, the scheduled
daily depreciation charge for such Vehicle set forth by the Servicer in the
Depreciation Schedule for such Vehicle. If such charge is expressed as a
percentage, the Depreciation Charge for such Vehicle for such day shall be such
percentage multiplied by the Capitalized Cost for such Vehicle.
"Depreciation Schedule" means a schedule of estimated daily depreciation
prepared by the Servicer, and revised from time to time in the Servicer's sole
discretion, with respect to each type of Non-Program Vehicle that is an Eligible
Vehicle and that is purchased, financed or refinanced by Thrifty Finance.
"Determination Date" means the fifth day prior to each Payment Date.
"Disposition Date" means:
(a) with respect to any Program Vehicle, (i) if such Vehicle was
sold at Auction or returned to a Manufacturer for repurchase, pursuant to
the applicable Vehicle
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Disposition Program, the date on which such Vehicle is sold at Auction or
accepted for return by such Manufacturer or its agent and, in each case,
the Depreciation Charges ceased to accrue pursuant to such Vehicle
Disposition Program, or (ii) if such Vehicle was sold to any Person (other
than to a Manufacturer pursuant to such Manufacturer's Vehicle Disposition
Program or to a third party through an Auction conducted by or through or
arranged by the Manufacturer pursuant to its Vehicle Disposition Program),
the date on which title to the Vehicle is transferred in connection with
such sale, and
(b) with respect to any Non-Program Vehicle, the date on which title
to the Vehicle is transferred in connection with such sale.
"Disposition Period" means, with respect to any Vehicle, the period
between the Minimum Term and the Maximum Term.
"Disposition Proceeds" means the net proceeds (other than Repurchase
Payments or Guaranteed Payments) from the sale or disposition of a Vehicle to
any Person, whether at Auction or otherwise.
"Distribution Account" means, with respect to any Series of Notes, an
account established as such pursuant to the related Supplement.
"Dollar" and the symbol "$" mean the lawful currency of the United States.
"DTC" means The Depository Trust Company.
"Due Date" means the second Business Day prior to each Payment Date.
"Eligible Franchisee" means a Franchisee (all of whose rental offices are
located in the United States) which meets the normal credit and other approval
criteria of Thrifty, and which may be an affiliate of Thrifty.
"Eligible Manufacturer" means, with respect to Program Vehicles, Chrysler,
Ford and Toyota, and with respect to Non-Program Vehicles, Chrysler, Ford,
General Motors and Toyota, and, in each case, any other Manufacturer that (a)
has been approved by the Rating Agencies then rating the Notes and by each or
has an Eligible Vehicle Disposition Program that has been reviewed by the Rating
Agencies and the Rating Agencies have indicated that the inclusion of such
Manufacturer's Vehicles under the Lease will not adversely affect the then
current rating of any Series of Notes, and (b) has been approved by each
Enhancement Provider,
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if any; provided, however, that upon the occurrence of a Manufacturer Event of
Default with respect to such Manufacturer, such Manufacturer shall no longer
qualify as an Eligible Manufacturer.
"Eligible Vehicle" means, on any date of determination, a Vehicle
manufactured by an Eligible Manufacturer (determined at the time of the
acquisition, financing or refinancing thereof) and satisfying any further
eligibility requirements specified by the Rating Agencies or in any Series
Supplement (other than with respect to the Maximum Non-Program Percentage and
the Maximum Manufacturer Percentage), or with respect to which all such
eligibility requirements not otherwise satisfied have been duly waived by the
Required Noteholders in accordance with the terms of the applicable Series
Supplements; provided, however, that in no event may a Vehicle be an Eligible
Vehicle after (x) in the case of a Program Vehicle, the expiration of the
applicable Maximum Term (unless such Vehicle has been designated as a Non-
Program Vehicle pursuant to Section 14 of the Lease), or (y) the date which is
twenty four (24) months after the date of the original new vehicle dealer
invoice for such Vehicle.
"Eligible Vehicle Disposition Program" means, at any time, a Vehicle
Disposition Program (a) pursuant to which the Repurchase Payment (or the
Guaranteed Payment plus Auction Proceeds, as the case may be) of each Program
Vehicle thereunder is at least equal to (i) the Capitalized Cost of such Vehicle
minus (ii) all Depreciation Charges accrued with respect to such Vehicle prior
to the date that the Vehicle is submitted for repurchase, minus (iii) Excess
Mileage Charges, minus (iv) Excess Damage Charges and minus (v) any other
charges specified in such Vehicle Disposition Program, (b) that cannot be
amended or terminated with respect to any Vehicle after the purchase of that
Vehicle, (c) that has been approved by the Rating Agencies and (d) either the
collateral assignment of the benefits of which to the Master Collateral Agent
has been acknowledged in writing by the related Manufacturer pursuant to an
Assignment Agreement or Thrifty Finance has been designated by such Manufacturer
as an authorized fleet purchaser entitled to the benefits of the Vehicle
Disposition Program, and in either case, Thrifty Finance (and the Master
Collateral Agent on behalf of Thrifty Finance) has been provided with an opinion
of counsel reasonably satisfactory to it that Thrifty Finance (and the Master
Collateral Agent on behalf of Thrifty Finance) can enforce the applicable
Manufacturer's obligations under the Vehicle Disposition Program.
"Enhancement" means, with respect to any Series of Notes, the rights and
benefits provided to the Noteholders of such Series of Notes pursuant to any
letter of credit, surety bond, cash collateral account, issuance of subordinated
Notes, overcollateralization, spread account, subordination, guaranteed
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rate agreement, maturity guaranty facility, tax protection agreement, interest
rate swap or any other similar arrangement.
"Enhancement Agreement" means any contract, agreement, instrument or
document governing the terms of any Enhancement or pursuant to which any
Enhancement is issued or outstanding.
"Enhancement Agreement Event of Default" means, with respect to any Series
of Notes, any event of default under any Enhancement Agreement specified in the
related Supplement.
"Enhancement Provider" means the Person providing any Enhancement as
designated in the applicable Supplement, other than any Noteholders the Notes of
which are subordinated to any class or Series of Notes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, reformed or otherwise modified from time to time, and any successor
statute of similar import, together with the rules and regulations promulgated
or issued thereunder, in each case as in effect from time to time. References to
sections of ERISA also refer to any successor sections.
"ERISA Affiliate", as applied to any Person, means any trade or business
(whether or not incorporated) which is a member of a group of which that Person
is a member and which is under common control within the meaning of Section 414
(b), (c), (m) or (o) of the Code and the regulations promulgated thereunder.
"Euroclear" means the Euroclear System.
"Event of Bankruptcy" shall be deemed to have occurred with respect to a
Person if:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the
like for such Person or all or any substantial part of its assets, or any
similar action with respect to such Person under any law relating to
bankruptcy, insolvency, reorganization, winding up or composition or
adjustment of debts, and any such case or proceeding shall continue
undismissed, or unstayed and in effect, for a period of 60 consecutive
days; or an order for relief in respect of such Person shall be entered in
an involuntary case under the Bankruptcy Code or any other similar law now
or hereafter in effect; or
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(b) such Person shall commence a voluntary case or other proceeding
under the Bankruptcy Code or any applicable insolvency, reorganization,
debt arrangement, dissolution or other similar law now or hereafter in
effect, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) for such Person or for any substantial part of its
property, or shall make any general assignment for the benefit of
creditors; or
(c) a corporation or similar entity or its board of directors shall
vote to implement any of the actions set forth in clause (b) above.
"Excess Damage Charges" means, with respect to any Program Vehicle, the
amount charged to Thrifty Finance (or the Lessee), or deducted from the
Repurchase Price or Guaranteed Payment, by the Manufacturer of such Vehicle due
to damage over a prescribed limit to the Vehicle at the time that the Vehicle is
disposed of at Auction or turned in to such Manufacturer or its agent for
repurchase, in either case pursuant to the applicable Vehicle Disposition
Program.
"Excess Mileage Charges" means, with respect to any Vehicle, the amount
charged to Thrifty Finance (or the Lessee), or deducted from the Repurchase
Price, by the Manufacturer of such Vehicle due to the fact that such Vehicle has
mileage over a prescribed limit at the time that such Vehicle is disposed of at
Auction or turned in to such Manufacturer or its agent for repurchase, in either
case pursuant to the applicable Vehicle Disposition Program.
"Exchange Act" is defined in Section 2.19 of the Base Indenture.
"Exchange Date" is defined in Section 2.9 of the Base Indenture.
"Existing Fleet" means Eligible Vehicles owned by Thrifty prior to the
Lease Commencement Date and refinanced by Thrifty Finance on the Lease
Commencement Date.
"Expected Final Payment Date" means, with respect to any Series of Notes,
the date stated in the related Supplement as the date on which such Series of
Notes is expected to be paid in full.
"Financed Vehicle" means an Eligible Vehicle that is (a) part of the
Existing Fleet, (b) acquired by Thrifty and financed by Thrifty Finance on or
after the Lease Commencement Date and prior to the 90th day after the Lease
Commencement Date for lease
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in any state in which Thrifty Finance has not, as of the date of acquisition of
such Vehicle, obtained all licenses and qualifications necessary to conduct its
leasing and other businesses, or (c) a Texas Vehicle.
"Financial Officer" means, with respect to any corporation, the chief
financial officer, vice-president-finance, principal accounting officer,
controller or treasurer of such corporation.
"Financing Lease" means the Base Lease supplemented by Annex B to the
Lease.
"Financing Source" is defined in the preamble of the Master Collateral
Agency Agreement.
"Fitch" means Fitch Investors Service, L.P.
"Ford" means Ford Motor Company, a Delaware corporation.
"Franchisee" means a franchisee of Thrifty.
"GAAP" means the generally accepted accounting principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors and
successors from time to time.
"General Motors" means General Motors Corporation, a Delaware corporation.
"Governmental Authority" means any Federal, state, local or foreign court
or governmental department, commission, board, bureau, agency, authority,
instrumentality or other administrative or regulatory body.
"Guaranteed Payment", with respect to any Program Vehicle subject to a
guarantee by the Manufacturer thereof regarding the Vehicle's rate of
depreciation, means a payment (which may include allowances, credits and/or
charges under the applicable Vehicle Disposition Program) from such
Manufacturer, pursuant to the Manufacturer's Vehicle Disposition Program, upon
disposition of such Vehicle by the owner thereof at an Auction.
"Incentive Payment", with respect to any Program Vehicle or Non-Program
Vehicle subject to any form of incentive program maintained by the Manufacturer
thereof, means a payment (other than a Guaranteed Payment or a Repurchase
Payment, or any allowance or credit included therein under a Vehicle Disposition
Program) from such Manufacturer, pursuant to and in accordance with the terms
and conditions of such an incentive program relating to such Vehicle.
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"Indebtedness", as applied to any Person, means, without duplication, (a)
all indebtedness for borrowed money, (b) that portion of obligations with
respect to any lease of any property (whether real, personal or mixed) that is
properly classified as a liability on a balance sheet in conformity with GAAP,
(c) notes payable and drafts accepted representing extensions of credit whether
or not representing obligations for borrowed money, (d) any obligation owed for
all or any part of the deferred purchase price for property or services, which
purchase price is (i) due more than six months from the date of incurrence of
the obligation in respect thereof or (ii) evidenced by a note or similar written
instrument, (e) all indebtedness secured by any Lien on any property or asset
owned by that Person regardless of whether the indebtedness secured thereby
shall have been assumed by that Person or is nonrecourse to the credit of that
Person, and (f) all Contingent Obligations of such Person in respect of any of
the foregoing.
"Indemnified Persons" is defined in Section 15.1 of the Lease.
"Indenture" means the Base Indenture, together with all Supplements, as
the same may be amended, modified or supplemented.
"Initial Acquisition Cost" is defined in Section 2.3 of the Lease.
"Initial Invested Amount" means, with respect to any Series of Notes, the
aggregate initial principal amount specified in the applicable Supplement.
"Initial Purchasers" means CS First Boston and Salomon Brothers Inc.
"Insolvency Laws" means the United States Bankruptcy Code or similar
applicable state or foreign laws.
"Interest Collections" means on any date of determination, all Collections
which, pursuant to the Lease, represent Monthly Variable Rent, Monthly Finance
Rent or the Availability Payment, plus any amounts earned on Permitted
Investments in the Collection Account which are available for distribution on
such date.
"Interest Period" means, with respect to any Series of Notes, the period
specified in the related Supplement between, with respect to the initial
Interest Period, the Closing Date and the first Payment Date and thereafter,
between Payment Dates during which interest will accrue.
"Invested Amount" means, with respect to each Series of Notes, the amount
specified in the applicable Supplement.
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"Invested Percentage" means, with respect to any Series of Notes, the
percentage specified in the applicable Supplement.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other Person
(excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business);
(b) any Contingent Obligation of such Person; and
(c) any ownership or similar interest held by such Person in any
other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Late Return Payments" is defined in Section 13 of the Lease.
"Lease" means the Base Lease, together with all Lease Annexes, as the same
may be amended, modified or supplemented from time to time in accordance with
its terms.
"Lease Annex" means Annex A or Annex B to the Base Lease, as the same may
be amended, supplemented or modified from time to time in accordance with its
terms.
"Lease Commencement Date" is defined in Section 3.2 of the Lease.
"Lease Event of Default" is defined in Section 17.1 of the Lease.
"Lease Expiration Date" is defined in Section 3.2 of the Lease.
"Lessee" means Thrifty, in its capacity as Lessee under the Lease, or any
successor by merger to Thrifty, in accordance with Section 25.1 of the Lease, or
any other permitted successor or assignee of Thrifty, in its capacity as Lessee,
pursuant to Section 16 of the Lease.
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"Lessee Agreements" means any and all Subleases entered into by the Lessee
the subject of which includes any Vehicle leased by the Lessor to the Lessee
under the Lease, and any and all other contracts, agreements, guarantees,
insurance, warranties, instruments or certificates entered into or delivered to
the Lessee in connection therewith.
"Lessor" means Thrifty Finance, in its capacity as the lessor under the
Lease.
"Lien" means, when used with respect to any Person, any interest in any
real or personal property, asset or other right held, owned or being purchased
or acquired by such Person which secures payment or performance of any
obligation, and shall include any mortgage, lien, pledge, encumbrance, charge,
retained security title of a conditional vendor or lessor, or other security
interest of any kind, whether arising under a security agreement, mortgage,
lease, deed of trust, chattel mortgage, assignment, pledge, retention or
security title, financing or similar statement, or notice or arising as a matter
of law, judicial process or otherwise.
"Limited Liquidation Event of Default" means, with respect to any Series
of Notes, any event specified as such in the related Supplement.
"Liquidation Event of Default" means, so long as such event or condition
continues, any of the following: (a) any event or condition with respect to
Thrifty Finance or Thrifty of the type described in Section 8.1(d) of the Base
Indenture, (b) a payment default by Thrifty Finance under the Base Indenture as
specified in Sections 8.1(a) and 8.1(b) thereof, or (c) a Lease Event of Default
as specified in Section 8.1(e) thereof (with respect solely to the occurrence of
the Lease Events of Default described in Sections 17.1.1(i), 17.1.2 and 17.1.5
under the Lease).
"Losses", with respect to any Series of Notes, has the meaning, if any,
provided for in the applicable Supplement.
"Luxembourg Agent" is defined in Section 2.4(c) of the Base Indenture.
"Manufacturer" means a manufacturer of Vehicles.
"Manufacturer Event of Default" is defined in Section 18 of the Lease.
"Master Collateral" means the collateral pledged to the Master Collateral
Agent pursuant to Section 2.1 of the Master Collateral Agency Agreement.
"Master Collateral Account" means the account(s) established and
maintained in the name of the Master Collateral Agent for the
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benefit of the Beneficiaries pursuant to Section 2.5 of the Master Collateral
Agency Agreement.
"Master Collateral Agency Agreement" means the Master Collateral Agency
Agreement, dated as of December 13, 1995 among Thrifty and Thrifty Finance, as
grantors, various Financing Sources parties thereto, various Beneficiaries
parties thereto and the Master Collateral Agent, as such agreement may be
amended, supplemented or modified from time to time in accordance with its
terms.
"Master Collateral Agent" means Bankers Trust Company in its capacity as
master collateral agent under the Master Collateral Agency Agreement, unless a
successor Person shall have become the master collateral agent pursuant to the
applicable provisions of the Master Collateral Agency Agreement, and thereafter
"Master Collateral Agent" shall mean such successor Person.
"Material Adverse Effect" means, with respect to any occurrence, event or
condition, and any Person, a material adverse effect with respect to
(a) the business, financial condition, operations or assets of such
Person or the Lessor;
(b) the ability of the such Person or the Lessee, the Master
Collateral Agent, the Trustee or the Lessor to perform its obligations
under the Lease or any other Related Document;
(c) the validity, enforceability or collectibility of amounts
payable to the Master Collateral Agent, the Trustee or the Lessor under
the Lease or the other Related Documents;
(d) the status, existence, perfection or first priority of the
interests of the Master Collateral Agent and the Trustee, as applicable,
in a material portion of the Master Collateral or the Collateral, free of
any Liens (other than Permitted Liens);
(e) the ability of the Master Collateral Agent, the Trustee or the
Lessor to liquidate or foreclose against the Collateral and the Master
Collateral; or
(f) the practical realization by the Master Collateral Agent, the
Trustee or the Lessor of any of the material benefits or security afforded
by the Lease or any other Related Document.
"Maximum Lease Commitment" means, on any date of determination, the sum of
(i) the Aggregate Principal Balances on such date for all Series of Notes, plus
(ii) with respect to all
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Series of Notes that provide for Enhancement in the form of
overcollateralization, the sum of the available subordinated amounts on such
date for each such Series of Notes, plus (iii) the aggregate Net Book Values of
all Vehicles leased under the Lease on such date that were acquired, financed or
refinanced with funds other than proceeds of Notes or available subordinated
amounts, plus (iv) any amounts held in the Retained Distribution Account that
the Lessor commits on or prior such date to invest in new Vehicles (as evidenced
by a Company Order) in accordance with the terms of the Lease and the Indenture.
"Maximum Manufacturer Percentage" means, with respect to any Series of
Notes, the percentage, if any, specified in the applicable Supplement.
"Maximum Non-Program Percentage" means, with respect to any Series of
Notes, the percentage, if any, specified in the applicable Supplement.
"Maximum Term" means, with respect to an Acquired Vehicle which is a
Program Vehicle, the maximum holding period (after which the Lessor may not
return such Vehicle to the related Manufacturer without penalty).
"Minimum Term" means, with respect to an Acquired Vehicle which is a
Program Vehicle, the minimum holding period (prior to which the Lessor may not
return such Vehicle to the related Manufacturer without penalty).
"Monthly Base Rent", with respect to the Acquired Vehicles and the
Financed Vehicles, respectively, is defined in the related Lease Annex.
"Monthly Certificate" is defined in Section 24.4(b) of the Lease.
"Monthly Finance Rent" is defined in paragraph 6 of Annex B to the Lease.
"Monthly Noteholders' Statement" is defined in Section 5.4(a) of the Base
Indenture.
"Monthly Servicing Fee" is defined in Section 26.1 of the Lease.
"Monthly Supplemental Payment" is defined in paragraph 6 of Annex B to the
Lease.
"Monthly Variable Rent" is defined in paragraph 9 of Annex A to the Lease.
"Monthly Vehicle Statement" is defined in Section 24.4(f) of the Lease.
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"Multiemployer Plan" means, with respect to any Person, a multiemployer
plan, as defined in Section 4001(a)(3) of ERISA, to which such Person or any of
its ERISA Affiliates is making or accruing an obligation to make contributions,
or has within any of the five years immediately preceding the applicable Closing
Date made or accrued an obligation to make contributions.
"Multiple Employer Plan" means, with respect to any Person, a single
employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of such Person or any of its ERISA Affiliates and at
least one Person other than such Person and its ERISA Affiliates, or (b) was so
maintained, and in respect of which such Person or any of its ERISA Affiliates
could have liability under Section 4064 or 4069 of ERISA in the event such plan
has been or were to be terminated.
"Net Book Value" means, with respect to any Vehicle, as of any date of
determination, the Capitalized Cost of such Vehicle minus the aggregate
Depreciation Charges accrued with respect to such Vehicle through the last day
of the Related Month.
"Non-Program Vehicle" means a Vehicle that, when acquired by Thrifty
Finance or Thrifty from an Eligible Manufacturer or when so designated by the
Servicer, in each case subject to the limitations described herein, is not
eligible for inclusion in any Eligible Vehicle Disposition Program.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
the beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an account with such
Clearing Agency (directly or as an indirect participant, in accordance with the
rules of such Clearing Agency).
"Note Purchase Agreement" means the Note Purchase Agreement dated December
13, 1995 between Thrifty Finance, Thrifty, CS First Boston and Salomon Brothers
Inc by which each of CS First Boston and Salomon Brothers Inc. agree to act as
initial purchasers of the Notes.
"Note Rate" means, with respect to any Series of Notes, the annual rate at
which interest accrues on the Notes of such Series of Notes (or formula on the
basis of which such rate shall be determined) as stated in the applicable
Supplement.
"Note Register" means the register maintained pursuant to Section 2.6(a)
of the Base Indenture, providing for the registration of the Notes and transfers
and exchanges thereof.
"Noteholder" and "Holder" mean the Person in whose name a Note is
registered in the Note Register.
"Notes" is defined in the recitals to the Base Indenture.
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"Notice of Claim" is defined in Section 14.4 of the Base Indenture.
"Officers' Certificate" means a certificate signed by an Authorized
Officer of Thrifty Finance or Thrifty, as the case may be.
"Operating Lease" means the Base Lease as supplemented by Annex A to the
Lease.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to
Thrifty Finance or Thrifty, as the case may be, unless the Required
Beneficiaries shall notify the Trustee of objection thereto.
"Outstanding" means, with respect to Notes, all Notes theretofore
authenticated and delivered under the Indenture, except (a) Notes theretofore
cancelled or delivered to the Note Registrar for cancellation, (b) Notes which
have not been presented for payment but funds for the payment of which are on
deposit in the Distribution Account established with respect thereto and are
available for payment of such Notes, and Notes which are considered paid
pursuant to Section 7.1 of the Base Indenture, or (c) Notes in exchange for or
in lieu of which other Notes which have been authenticated and delivered
pursuant to the Indenture unless proof satisfactory to the Trustee is presented
that any such Notes are held by a bona fide purchaser. Subject to Section 2.13
of the Base Indenture, a Note does not cease to be Outstanding because Thrifty
Finance or an Affiliate of Thrifty Finance holds the Note.
"Paired Series" is defined in Section 4.5 of the Base Indenture.
"Paying Agent" is defined in Section 2.6(a) of the Base Indenture.
"Payment Date" means, unless otherwise specified in any Supplement for the
related Series of Notes, the twenty-fifth day of each calendar month, or, if
such day is not a Business Day, the next succeeding Business Day, commencing
January 25, 1996.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to any or all of its functions under ERISA.
"Pension Plan" means any "employee pension benefit plan" (other than a
Multiemployer Plan or a Multiple Employer Plan), as such term is defined in
ERISA, which is subject to the provisions of Title IV of ERISA or Section 412 of
the Code and to which any company in the Controlled Group has liability.
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"Permanent Global Note" is defined in Section 2.5(b) of the Base
Indenture.
"Permitted Investments" means negotiable instruments or securities
maturing on or before the Payment Date next occurring after the investment
therein, represented by instruments in bearer or registered or in book-entry
form which evidence (i) obligations the full and timely payment of which are to
be made by or is fully guaranteed by the United States of America; (ii) demand
deposits of, time deposits in, or certificates of deposit issued by, any
depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by Federal or state banking or depositary institution authorities;
provided, however, that at the earlier of (x) the time of the investment and (y)
the time of the contractual commitment to invest therein, the certificates of
deposit or short-term deposits, if any, or long-term unsecured debt obligations
(other than such obligation whose rating is based on collateral or on the credit
of a Person other than such institution or trust company) of such depositary
institution or trust company shall have a credit rating from Standard & Poor's
of "A-1+" and from Fitch of at least "F-1" (if rated by Fitch), in the case of
certificates of deposit or short-term deposits, or a rating from Standard &
Poor's of at least "AA" and from Fitch of at least "A" (if rated by Fitch), in
the case of long-term unsecured debt obligations; (iii) commercial paper having,
at the earlier of (x) the time of the investment and (y) the time of the
contractual commitment to invest therein, a rating from Standard & Poor's of
"A-1+" and from Fitch of at least "F-1" (if rated by Fitch); (iv) demand
deposits or time deposits which are fully insured by the FDIC; (v) bankers'
acceptances issued by any depositary institution or trust company described in
clause (ii) above; (vi) investments in money market funds rated at least "AAm"
by Standard & Poor's or otherwise approved in writing by Standard & Poor's and
rated at least "A" by Fitch (if rated by Fitch); (vii) Eurodollar time deposits
having a credit rating from Standard & Poor's of "A-1+" and from Fitch of at
least "F-1" (if rated by Fitch); (viii) repurchase agreements involving any of
the Permitted Investments described in clauses (i) and (vii) above and the
certificates of deposit described in clause (ii) above which are entered into
with a depository institution or trust company, having a commercial paper or
short-term certificate of deposit rating of "A-1+" by Standard & Poor's and of
at least "F-1" from Fitch (if rated by Fitch) or which otherwise is approved as
to collateralization by the Rating Agencies; and (ix) any other instruments or
securities, if the Rating Agencies confirm in writing that the investment in
such instruments or securities will not adversely affect any ratings with
respect to any Series of Notes.
"Permitted Liens" is defined in Section 25.3 of the Lease.
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"Person" means any natural person, corporation, business trust, joint
venture, association, company, partnership, joint stock company, trust,
unincorporated organization or Governmental Authority.
"Placement Memorandum Supplement" means a Placement Memorandum Supplement,
which supplements the Private Placement Memorandum and relates to a Series of
the Notes.
"Plan" means any Single Employer Plan or any Multiple Employer Plan, or
either of them, as the context may require.
"Pool Factor", for any Series of Notes, means, unless any series of Notes
is issued in more than one class as stated in any related Supplement (in which
case "Pool Factor" has the meaning set forth in such Supplement), a number
carried out to eight significant decimals representing the ratio of the
applicable Invested Amount as of the end of the Related Month to the applicable
Initial Invested Amount.
"Potential Amortization Event" means any occurrence or event which, with
the giving of notice, the passage of time or both, would constitute an
Amortization Event.
"Potential Enhancement Agreement Event of Default" means an event which,
with the giving of notice, the passage or time or both would constitute an
Enhancement Agreement Event of Default under any Enhancement Agreement.
"Potential Lease Event of Default" means an event which, with the giving
of notice, the passage of time, or both, would constitute a Lease Event of
Default.
"Power of Attorney" is defined in Section 9 of the Lease.
"Principal Amount" means, with respect to an Outstanding Note, the
original principal balance of such Note on the date of its issuance, less all
payments made by the Trustee in respect of principal of such Note pursuant to
the Indenture.
"Principal Collections" means any Collections other than Interest
Collections.
"Principal Terms" is defined in Section 2.3 of the Base Indenture.
"Private Placement Memorandum" means the Private Placement Memorandum
dated December 19, 1995 relating to the Notes, as amended, modified or
supplemented.
"Program Vehicle" means any Vehicle which at the time of purchase or
financing by Thrifty Finance is eligible under an Eligible Vehicle Disposition
Program.
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"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Qualified Institution" means a depositary institution or trust company
(which may include the Trustee) organized under the laws of the United States of
America or any one of the states thereof or the District of Columbia; provided,
however, that at all times such depositary institution or trust company is a
member of the FDIC and has (i) has a long-term indebtedness rating from Standard
& Poor's of not lower than "AA" and from Fitch of not lower than "A" and a
short-term indebtedness of rating from Standard & Poor's not lower than "A-1+"
and from Fitch of not lower than "F-1", or (ii) has such other rating which has
been approved by the Rating Agencies.
"Rapid Amortization Period" means, with respect to any Series of Notes,
the period specified in the applicable Supplement.
"Rating Agencies Condition" means, with respect to any action, that each
Rating Agency shall have notified Thrifty Finance, Thrifty, any Enhancement
Provider and the Trustee in writing that such action will not result in a
reduction or withdrawal of the rating (in effect immediately before the taking
of such action) of any outstanding Series of Notes with respect to which it is a
Rating Agency and, with respect to the issuance of a Series of Notes, the
"Rating Agency Condition" also means that each Rating Agency that is referred to
in the related Placement Memorandum Supplement as being required to deliver its
rating with respect to such Series of Notes shall have notified Thrifty Finance,
Thrifty, any Enhancement Provider and the Trustee in writing that such rating
has been issued by such Rating Agency.
"Rating Agency" means, with respect to each outstanding Series of Notes,
any rating agency or agencies then issuing a rating for such Series of Notes at
the request of Thrifty Finance or Thrifty.
"Record Date" means, with respect to any Payment Date, the last day of the
Related Month.
"Recoveries" with respect to any Series of Notes, has the meaning, if any,
specified in the applicable Supplement.
"Registrar" is defined in Section 2.6(a) of the Base Indenture.
"Regulation S is defined in Section 2.5(b) of the Base Indenture.
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"Related Documents" means, collectively, the Indenture, the Notes, any
Enhancement Agreement, the Lease, the Master Collateral Agency Agreement, the
Chrysler Limited Guarantee Agreement, the Assignment Agreements, the Note
Purchase Agreement any placement agency agreement and any agreements relating to
the purchase of any of the Notes.
"Related Month" means, with respect to any Determination Date, Due Date,
Payment Date, or other date of determination, the period from and including the
first day of the calendar month preceding the month which such date falls, to
and including the last day of such calendar month; provided, however, that (for
all purposes other than determining Depreciation Charges) the initial Related
Month shall also include the period from and including the date of issuance of
the first Series of Notes to and including the last day of the calendar month in
which the issuance of the first Series of Notes occurs.
"Rent", with respect to each Acquired Vehicle and each Financed Vehicle,
is defined in paragraph 9 of Annex A to the Lease and in paragraph 6 of Annex B
to the Lease.
"Reporting Date" means the Business Day after the Determination Date.
"Repurchase Amount" means, with respect to any Series of Notes, the amount
specified in the applicable Supplement.
"Repurchase Payment", with respect to any Program Vehicle subject to
repurchase by the Manufacturer thereof, means a payment (which may include
allowances, credits and/or charges under the applicable Vehicle Disposition
Program) by such Manufacturer, pursuant to the Manufacturer's Vehicle
Disposition Program, to repurchase such Vehicle in accordance with its Vehicle
Disposition Program.
"Required Asset Amount" means, at any date of determination, the sum of
(i) the Invested Amounts for all Series of Notes that do not provide for
Enhancement in the form of overcollateralization plus (ii) the aggregate amount,
with respect to all Series of Notes that provide for Enhancement in the form of
overcollateralization, of the sum of (a) the Invested Amount for each such
Series of Notes, plus (b) the Minimum Subordinated Amount for each such Series
of Notes.
"Required Beneficiaries" means Noteholders holding in excess of 50% of the
aggregate Invested Amount of all outstanding Series of Notes (excluding, for the
purposes of making the foregoing calculation, any notes held by Thrifty, or any
Affiliate of Thrifty).
"Required Noteholders" means Noteholders holding in excess of 50% of the
aggregate Invested Amount of a Series of Notes
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(excluding, for the purposes of making the foregoing calculation, any Notes held
by Thrifty, or any Affiliate of Thrifty).
"Requirements of Law" means, with respect to any Person or any of its
property, the certificate of incorporation or articles of association and
by-laws or other organizational or governing documents of such Person, and any
law, treaty, ordinance, rule, regulation, order or determination of any
arbitrator or Governmental Authority, in each case applicable to or binding upon
such Person or any of its property or to which such Person or any of its
property is subject, whether Federal, state or local (including, without
limitation, usury laws, the Federal Truth in Lending Act and retail installment
sales acts).
"Responsible Officer" means, with respect to Thrifty Finance or Thrifty,
any President, Vice President, Assistant Vice President, Secretary, Assistant
Secretary, Treasurer or Assistant Treasurer, or any officer performing functions
similar to those customarily performed by the person who at the time shall be
such officer.
"Restricted Global Note" is defined in Section 2.5(a) of the Base
Indenture.
"Retained Amount" means, on any date of determination, the amount, if any,
by which the Aggregate Asset Amount at the end of the day immediately prior to
such date of determination, exceeds the Aggregate Invested Amount at the end of
such day.
"Retained Distribution Account" is defined in Section 4.1(b) of the Base
Indenture.
"Retained Interest" means a transferable indirect interest in Thrifty
Finance's assets held by the Retained Interestholder, including the right to
receive payments in respect of the Retained Amount.
"Retained Interestholder" means Thrifty or any permitted successor or
assign.
"Revolving Period" means, with respect to any Series of Notes, the period
specified in the applicable Supplement.
"Rule 144A" is defined in Section 2.5(a) of the Base Indenture.
"SEC" means the Securities and Exchange Commission, and any successor
agency thereto.
"Securities Act" means the Securities Act of 1933, as amended.
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"Segregated Collateral" is defined in Section 2.3(b) of the Base
Indenture.
"Segregated Series" is defined in Section 2.3(b) of the Base Indenture.
"Series of Notes" or "Series" means each Series of Notes issued and
authenticated pursuant to the Base Indenture and a related Supplement.
"Series Monthly Servicing Fee" is defined in Section 26.1 of the Lease.
"Series Supplement" or "Supplement" means a supplement to the Base
Indenture complying (to the extent applicable) with the terms of Section 2.3 or
Article 11 of the Base Indenture.
"Series Termination Date" means, with respect to any Series of Notes, the
date stated in the related Supplement as the termination date.
"Servicer" means Thrifty Rent-A-Car System, Inc., in its capacity as
servicer under Lease and the Master Collateral Agency Agreement, unless the
Master Collateral Agent shall have assumed any duties and obligations of the
Servicer pursuant to the applicable provisions of the Master Collateral Agency
Agreement, and thereafter "Servicer" shall, to such extent, include the Master
Collateral Agent.
"Servicing Fee Percentage" means, with respect to any Series of Notes, the
percentage specified in the related Supplement.
"Single Employer Plan" means, with respect to any Person, a single
employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of such Person or any of its ERISA Affiliates and no
other Person, or (b) was so maintained, and in respect to which such Person or
any of its ERISA Affiliates could have liability under Section 4069 of ERISA in
the event such plan has been or were to be terminated.
"Standard & Poor's" means Standard & Poor's Structured Ratings, a Division
of the McGraw-Hill Companies, Inc.
"Sublease" means a standardized lease agreement, for the leasing of
Vehicles, between Thrifty, as lessor, and an Eligible Franchisee, as lessee.
"Subsidiary" means, with respect to any Person (herein referred to as the
"parent"), any corporation, partnership, association or other business entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or more than 50% of
the general partnership interests are, at the time any
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determination is being made, owned, controlled or held by the parent or (b) that
is, at the time any determination is being made, otherwise controlled, by the
parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.
"Supplemental Documents" is defined in Section 2.1 of the Lease.
"Supplemental Servicing Fee" is defined in Section 26.1 of the Lease.
"Temporary Global Note" is defined in Section 2.5(b) of the Base
Indenture.
"Term" is defined in Section 3.2 of the Lease.
"Termination Payment" is defined in Section 12.3 of the Lease.
"Texas Vehicle" means an Eligible Vehicle acquired by Thrifty Finance on
or after the Lease Commencement Date for lease in the State of Texas.
"Thrifty" means Thrifty Rent-A-Car System, Inc., an Oklahoma corporation.
"Thrifty Finance" means Thrifty Car Rental Finance Corporation, a Delaware
corporation.
"Thrifty Finance Agreements" is defined in Section 3.1 of the Base
Indenture.
"Thrifty Finance Obligations" means all principal and interest, at any
time and from time to time, owing by Thrifty Finance on the Notes and all costs,
fees and expenses payable by, or obligations of, Thrifty Finance under the
Indenture or the Related Documents.
"Toyota" means Toyota Motor Sales, U.S.A., Inc., a California corporation.
"Trustee" means Bankers Trust Company in its capacity as trustee under the
Indenture, unless a successor Person shall have become the trustee pursuant to
the applicable provisions of the Indenture, and thereafter "Trustee" shall mean
such successor Person.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trust Officer" means, with respect to the Trustee, any Managing Director,
Vice President, Assistant Vice President,
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<PAGE> 130
Assistant Secretary or Assistant Treasurer of the Corporate Trust Office, or any
trust officer, or any officer customarily performing functions similar to those
performed by the person who at the time shall be such officers, or to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with a particular subject, who shall, in any case, be working in the Structured
Finance Group, or any successor thereto responsible for the administration of
the Base Indenture.
"UCC" means, with respect to a particular jurisdiction, the Uniform
Commercial Code, as in effect from time to time in such jurisdiction, or any
successor statute thereto.
"United States" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
"U.S. Government Obligations" is defined in Section 10.1 of the Base
Indenture.
"Vehicle" means a passenger automobile or truck purchased, financed or
refinanced by Thrifty Finance under the Lease and pledged under the Master
Collateral Agency Agreement for the benefit of the Trustee (on behalf of the
Noteholders), but solely during the Vehicle Term for such Vehicle.
"Vehicle Acquisition Schedule" is defined in Section 2.1 of the Lease.
"Vehicle Disposition Program" means a program pursuant to which a
Manufacturer has agreed, subject to the terms and conditions thereof, to
guarantee the maximum daily depreciation levels of, or to repurchase, Vehicles
manufactured by it or one of its Affiliates during the specified Disposition
Period.
"Vehicle Lease Commencement Date" is defined in Section 3.1 of the Lease.
"Vehicle Lease Expiration Date", with respect to each Vehicle, means the
earliest of (i) the Disposition Date for such Vehicle, (ii) if such Vehicle
becomes a Casualty, the date funds in the amount of the Net Book Value thereof
are received by the Lessor, the Master Collateral Agent or the Trustee
(including deposit into the Collection Account or the Master Collateral Account)
from the Lessee in accordance with the Lease, and (iii) the maximum Vehicle
Lease term of the Operating Lease and the Financing Lease, as applicable, as
specified in, respectively, paragraph 5 of each of Annex A and Annex B to the
Lease.
"Vehicle Order" is defined in Section 2.1 of the Lease.
"Vehicle Purchase Price" means, on any date of determination and for any
Acquired Vehicle, an amount equal to the greater of (a) the applicable Net Book
Value of the Vehicle, and (b) the
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fair market value of such Vehicle based on (x) an independent third-party data
source approved by each Rating Agency that rated any Series of Notes at the
request of the Lessor, (y) the average equipment and average mileage of each
Acquired Vehicle of such model class and model year, or (z) such other
methodology approved by each such Rating Agency.
"Vehicle Ratio" means, with respect to any calendar month or series of
calendar months, the percentage equivalent of a fraction the numerator of which
is the sum of the Initial Acquisition Costs of all Vehicles acquired or financed
during such calendar month or series of consecutive calendar months and the
denominator of which is the sum of the Initial Acquisition Costs of all Vehicles
acquired or financed during the twelve-month period ending on the last day of
the calendar month or series of consecutive calendar months with respect to
which such calculation is made.
"Vehicle Term" is defined in Section 3.1 of the Lease.
"VFR" means, for any Interest Period, an interest rate equal to the
quotient, expressed as a percentage, of (i) the amount of interest accrued
during such Interest Period with respect to all Series of Notes, divided by (ii)
the average daily aggregate Principal Amount of all Series of Notes during such
period.
"VIN" is defined in Section 18 of the Lease.
"Welfare Plan" means any "employee welfare benefit plan", as such term is
defined in ERISA.
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SCHEDULE 6.5
Pension Plans
None.
<PAGE> 133
SCHEDULE 6.7
TO BASE INDENTURE
1. Thrifty Rent-A-Car System, Inc. and subsidiaries consolidated financial
statements for each of the three years in the period ended December 31, 1994,
and independent Auditors' Report.
2. Thrifty Rent-A-Car System, Inc. and subsidiaries unaudited consolidated
balance sheet, statements of operations and cash flows for each of the two
years in the period ended December 31, 1994, and for the period September 30,
1995, year to date.
<PAGE> 134
SCHEDULE 6.14
TO BASE INDENTURE
1. Chief Executive Office and Principal Place of Business:
Thrifty Car Rental Finance Corporation
5330 East 31st Street
Tulsa, Oklahoma 74153
2. Records Locations:
Space Center III (Records Center Warehouse)
7081 East 38th Street
Tulsa, Oklahoma 74145
Storage Plus by 5R, Inc. (Records Storage Third Party)
5152 South 95th East Avenue
Tulsa, Oklahoma 74145
BMI Media Storage Security (Computer Tape Back-up Storage)
6929 South Lewis
Tulsa, Oklahoma 74136
<PAGE> 135
SCHEDULE 6.14b
Security Interest Filings
None.
<PAGE> 136
SCHEDULE 6.16
Other Agreements
1. Management Services Agreement dated December 21, 1995, between Thrifty Car
Rental Finance Corporation and Thrifty Rent-A-Car System, Inc.
2. Consent to Use of Name dated December 16, 1995, between Thrifty Car Rental
Finance Corporation and Thrifty Rent-A-car System, Inc.
<PAGE> 137
MANAGEMENT SERVICES AGREEMENT
This Management Services Agreement (the "Agreement") is made and entered
into effective as of December 21, 1995 (the "Effective Date"), by and between
THRIFTY RENT-A-CAR SYSTEM, INC., a corporation organized and existing under the
laws of Oklahoma ("Thrifty"), and THRIFTY CAR RENTAL FINANCE CORPORATION, a
corporation organized and existing under the laws of Oklahoma ("Thrifty
Finance").
W I T N E S S E T H:
WHEREAS, Thrifty is engaged in the business of franchising persons to
operate a daily car rental system and offering its franchisees a vehicle lease
to provide a source of vehicles;
WHEREAS, Thrifty Finance leases vehicles to Thrifty, pursuant to the
Master Motor Vehicle Lease and Servicing Agreement dated as of December 13, 1995
(the "Lease"), for use in Thrifty's franchise and leasing business;
WHEREAS, Thrifty performs certain administrative and servicing functions
pursuant to the Lease and other agreements between Thrifty, Thrifty Finance et
al., specifically the Base Indenture and the Master Collateral Agency Agreement,
both dated as of December 13, l995;
WHEREAS, Thrifty Finance desires to obtain additional services of Thrifty
in connection with the implementation and administration of certain of Thrifty
Finance's business functions;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreement contained herein, the parties agree as follows:
1. Services. During the term of this Agreement, Thrifty Finance shall
purchase from Thrifty and Thrifty shall provide services to Thrifty Finance
relating to the following:
(a) Telephone and Facsimile Communications
(b) Cash Management
(c) Office Facility and Furniture
(d) Copying
(e) Mail and Postage
(f) Financial Audit
(g) Insurance
(h) Legal
(i) Tax
and such other services as Thrifty Finance may from time to time request from
Thrifty.
<PAGE> 138
2. Payment.
(a) During the term of this Agreement, Thrifty Finance shall pay to
Thrifty an amount equal to all reasonable and necessary expenses incurred
by Thrifty in the performance of services under this Agreement. Reasonable
and necessary expenses shall mean actual costs of salary, insurance,
overhead and other expenses as are customarily related to the services
provided. Where expenses and costs incurred by Thrifty in the performance
of services under this Agreement are not readily quantifiable as having
been incurred specifically for the account of Thrifty Finance, Thrifty
Finance shall pay a percentage of such costs and expenses based on a
reasonable, arms-length allocation to be determined by Thrifty and Thrifty
Finance from time to time.
(b) Thrifty shall notify Thrifty Finance of the estimate of annual
allocated expenses for services to be performed pursuant to this Agreement
at least ninety (90) days prior to the commencement of each of Thrifty
Finance's fiscal years during the term of this Agreement. The allocated
expenses shall be paid by Thrifty Finance to Thrifty in twelve equal
monthly installments on the first day of each month during the term of
this Agreement. Each such payment shall be for the services rendered and
to be rendered in the month in which such payment is made.
(c) The amount of the annual allocated expenses and the amount of
corresponding monthly installment payments shall be subject to appropriate
adjustment as may be agreed upon by Thrifty Finance and Thrifty based on
any additions or reductions to the services to be performed by Thrifty
made at the request of Thrifty Finance.
(d) Thrifty shall invoice Thrifty Finance for the non-allocated
expenses and costs incurred by Thrifty which are readily quantifiable as
having been incurred specifically for the account of Thrifty Finance.
Thrifty Finance shall on the first day of each month pay the invoices
received in the preceding month.
3. Termination.
(a) The term of this Agreement shall commence on the Effective Date
and, unless and until terminated in the manner provided in this Section 3,
shall continue for an initial period of one (1) year and shall be
automatically extended without further action by the parties for
successive periods of one (1) year, each such period to commence on the
anniversary of the Effective Date.
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<PAGE> 139
(b) Either of the parties hereto may terminate this Agreement
effective ninety (90) days after written notice of its election to so
terminate is received by the other party.
4. Books, Records and Reports. Thrifty shall keep and maintain such books
and records pertaining to services provided by Thrifty to Thrifty Finance as
Thrifty Finance shall from time to time reasonably direct. Thrifty shall prepare
and disseminate to Thrifty Finance such accounting reports relating to the
services provided hereunder as may be reasonably requested by Thrifty Finance.
5. Relationship.
(a) The relationship between Thrifty and Thrifty Finance shall be
limited to the specific authority set forth herein. Neither party shall be
the general agent of the other for any purpose whatsoever, and shall have
no power or authority to make or give any promise, warranty or
representation, to execute any contract or otherwise create, issue or
assume any liability, obligation or commitment in the name of or on behalf
of the other party, except to the extent specifically authorized herein or
in writing by the other party.
(b) Neither party hereto shall be liable to any third party for any
action taken or for any failure to take any action on the part of the
other party hereto, or for any liability, obligation or commitment
incurred by the other party hereto, except to the extent specifically
agreed in writing by the parties.
(c) Nothing contained in this Agreement shall be construed so as to
create a partnership or joint venture.
6. Waiver or Modification. Any waiver, alteration, or modification of any
of the provisions of this Agreement, or cancellation or replacement of this
Agreement, shall not be valid unless made in writing and signed by the parties
hereto. No delay or omission by either party to exercise any right or power it
has under this Agreement shall impair or be construed as a waiver of such right
or power. A waiver by either party of any covenant or breach shall not be
construed to be a waiver of any succeeding breach or any other covenant.
7. Binding Effect and Assignment. The rights and obligations of the
parties under this Agreement shall be binding upon any successors or permitted
assigns of the parties. Neither party may assign this Agreement without the
prior written consent of the other, which shall not be unreasonably withheld. In
the event of any consolidation or merger of Thrifty Finance or Thrifty into or
with another legal entity, or the sale of substantially all of the assets of
Thrifty Finance or Thrifty to another legal
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<PAGE> 140
entity, such other legal entity shall assume this Agreement and shall become
obligated to perform all of the terms and conditions hereof, and the obligations
of Thrifty and Thrifty Finance hereunder, as the case may be, shall continue in
favor of such other legal entity.
8. Notices. Any notice, consent or other communication required or
permitted to be given under this Agreement shall be in writing and delivered in
person or sent by registered or certified mail or via facsimile to the addresses
of the parties set forth below, or such other addresses as shall be furnished in
writing by any such party. Any notice, consent or other communication shall be
deemed given and received, in the case of mailing, on the third day following
its deposit in the mail, and, in the case of facsimile, upon transmission if
confirmed by mail as set forth above.
Thrifty Finance: Thrifty Car Rental Finance
Corporation
5330 East 31st Street
Tulsa, OK 74135
Telephone: (918) 669-2550
Facsimile: (918) 669-2301
Attention: President
Thrifty: Thrifty Rent-A-Car System, Inc.
P. O. Box 35250
Tulsa, OK 74153-0250
Telephone: (918) 665-3930
Facsimile: (918) 669-2596
Attention: President
9. Entire Agreement. This Agreement contains all of the terms and
provisions and constitutes the entire agreement between the parties with respect
to the subject matter hereof. This Agreement supersedes all prior written, oral
and implied understandings, representations and agreements of the parties
relating to the subject matter hereof.
10. Severability. If any provision of this Agreement is held unenforceable
or invalid, the remainder of this Agreement and application of such provision to
other persons or circumstances will be interpreted so as reasonably to effect
the intent of the parties hereto. The parties further agree to replace such void
or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of the void or unenforceable provision.
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<PAGE> 141
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma (without giving effect to its
choice of law principles).
IN WITNESS WHEREOf, the parties have executed this Agreement as of the day
and year first above written.
THRIFTY CAR RENTAL FINANCE
CORPORATION
By: /s/ Steven B. Hildebrand
-------------------------------
Steven B. Hildebrand
President
THRIFTY RENT-A-CAR SYSTEM, INC.
By: /s/ Steven B. Hildebrand
-------------------------------
Steven B. Hildebrand
Executive Vice-President
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<PAGE> 142
CONSENT TO USE OF NAME
This Consent to Use of Name (the "Consent") is made and entered into
effective as of November 9, 1995, (the "Effective Date"), by and between THRIFTY
RENT-A-CAR SYSTEM, INC., a corporation organized and existing under the laws of
the Oklahoma ("Thrifty") and THRIFTY CAR RENTAL FINANCE CORPORATION, a
corporation organized and existing under the laws of the State of Oklahoma
("Thrifty Finance").
WITNESSETH:
WHEREAS, Thrifty owns and has registered on the Principal Register of the
United States Patent and Trademark Office certain trade names, service marks and
trademarks, including "Thrifty Car Rental" and "Thrifty" used in association
with the renting and leasing of vehicles;
WHEREAS, Thrifty is engaged in the business of franchising persons to
operate a daily car rental system under the Thrifty owned trade names, service
marks and trademarks, and offering its franchisees a source of vehicles;
WHEREAS, Thrifty Finance leases vehicles to Thrifty for use in Thrifty's
franchise and leasing business;
WHEREAS, Thrifty Finance is a wholly owned subsidiary of Thrifty;
WHEREAS, Thrifty desires to grant a license authorizing Thrifty Finance to
use "Thrifty Car Rental" in its corporate name in strict accordance with the
terms of the Consent.
NOW, THEREFORE, Thrifty hereby grants to Thrifty Finance a revocable,
nontransferable and nonexclusive license to utilize "Thrifty Car Rental" in its
corporate name. Thrifty Finance recognizes, acknowledges, agrees to, and agrees
never to contest at any time, Thrifty's exclusive proprietary interest in and
right to "Thrifty Car Rental" and related trade names, services marks and
trademarks. Thrifty Finance shall not engage in the rental and leasing of
vehicles to any third party. Either party may terminate the Consent at any time
by the delivery of written notice to the other party.
IN WITNESS WHEREOF, the parties have executed this Agreement the 16th day
of December ,1995.
THRIFTY RENT-A-CAR SYSTEM, INC. Attest:
By: /s/ Steven B. Hildebrand By: /s/ Randall J. Holder
- ---------------------------------------------- -----------------------------
Steven B. Hildebrand, Executive Vice-President Randall J. Holder, Secretary
THRIFTY CAR RENTAL FINANCE CORPORATION Attest:
By: /s/ Steven B. Hildebrand By: /s/ Randall J. Holder
- ---------------------------------------------- -----------------------------
Steven B. Hildebrand, Executive Vice-President Randall J. Holder, Secretary
<PAGE> 143
EXHIBIT A-1
FORM OF TRANSFER CERTIFICATE
CERTIFICATE TO BE DELIVERED UPON *|_| EXCHANGE OF A BENEFICIAL INTEREST FOR LIKE
PERCENTAGE IN RESTRICTED GLOBAL NOTE, *|_| REGISTRATION OF TRANSFER OF
RESTRICTED GLOBAL NOTES *|_| EXCHANGE OF A BENEFICIAL INTEREST IN THE RESTRICTED
GLOBAL NOTE FOR DEFINITIVE SECURITIES OR *|_| EXCHANGE OR REGISTRATION OF
TRANSFER OF DEFINITIVE SECURITIES
BANKERS TRUST COMPANY,
as Trustee
4 Albany Street, 10th Floor
New York, New York 10006
Attn: [Corporate Trust and Agency Group]
Re: Thrifty Car Rental Finance Corporation (the "Issuer") Series [ ] Rental
Car Asset Backed Notes, Class [ ] (the "Securities")
This Certificate relates to $__________ principal amount of
Securities held in *|_| book-entry or *|_| definitive form by
________________________________ (the "Transferor").
[insert name of transferor]
The Transferor has requested the Trustee by written order to exchange or
register the transfer of a Security or Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify as follows:*
|_| Such Security is being acquired for its own account, without
transfer.
|_| Such Security is being transferred to (i) a qualified
institutional buyer (as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act")) in reliance on Rule 144A, or (ii) pursuant to
Rule 144 of the Securities Act and, in each case, in accordance with applicable
state and federal securities laws.
|_| Such Security is being transferred to the Issuer (upon
redemption or otherwise).
-----------------------------------
[INSERT NAME OF TRANSFEROR]
By:
--------------------------------
Date:
* Check applicable box.
A-1-1
<PAGE> 144
EXHIBIT A-2
[RESERVED.]
A-2-1
<PAGE> 145
EXHIBIT A-3
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM RESTRICTED GLOBAL
NOTE TO TEMPORARY GLOBAL NOTE
(exchanges or transfers pursuant to
Section 2.9 of the Base Indenture)
BANKERS TRUST COMPANY,
as Trustee
4 Albany Street, 10th Floor
New York, NY 10006
Attn: Corporate Trust and Agency Group
Re: Series [ ] Thrifty Car Rental Finance Corporation ("Thrifty
Finance") -- Rental Car Asset Backed Notes, Class [ ]
Reference is hereby made to the Base Indenture, dated as of December __,
1995 (the "Base Indenture"), between THRIFTY FINANCE, as Issuer and BANKERS
TRUST COMPANY, as Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Base Indenture.
This letter relates to ________________ principal amount of Series ____
Notes, Class _____ represented by a beneficial interest in the Restricted Global
Class _____ Note (CUSIP No. ___) held with DTC by or on behalf of [transferor]
as beneficial owner (the "Transferor"). The Transferor has requested an exchange
or transfer of its beneficial interest for an interest in the Temporary Global
Class _____ Note (CUSIP (CINS) No. ___) to be held with [Euroclear] [Cedel]
(ISIN Code ___) (Common Code ___) through DTC.
In connection with such request and in respect of such Series ____ Note,
Class _____, the Transferor does hereby certify that such exchange or transfer
has been effected in accordance with the transfer restrictions set forth in the
Series ____ Notes, Class _____ and pursuant to and in accordance with Regulation
S under the Securities Act, and accordingly the Transferor does hereby certify
that:
(1) the offer of the Series ____ Notes, Class _____ was not made to
a person in the United States;
(2)(A) at the time the buy order was originated, the transferee was
outside the United States or
A-3-1
<PAGE> 146
the Transferor and any person acting on its behalf reasonably
believed that the transferee was outside the United States, or
(B) the transaction was executed in, on or through the facilities
of a designated offshore securities market and neither the
Transferor nor any person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest
being transferred as described above was held with DTC through Euroclear
or Cedel or both (Common Code ___ (ISIN Code ___)).
This certificate and the statements contained herein are made for your
benefit and the benefit of the Thrifty Finance and the Placement Agents.
[Insert Name of Transferor]
By:
-----------------------------
Name:
Title:
Dated: _________, 199_
cc: Thrifty Car Rental Finance Corporation
A-3-2
<PAGE> 147
EXHIBIT A-4
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM RESTRICTED GLOBAL
NOTE TO PERMANENT GLOBAL NOTE
(exchanges or transfers pursuant to
Section 2.9 of the Base Indenture)
BANKERS TRUST COMPANY,
as Trustee
4 Albany Street, 10th Floor
New York, NY 10006
Attn: Corporate Trust and Agency Group
Re: Series [ ] Thrifty Car Rental Finance Corporation ("Thrifty
Finance") -- Rental Car Asset Backed Notes, Class [ ]
Reference is hereby made to the Base Indenture, dated as of December __,
1995 (the "Base Indenture"), between THRIFTY FINANCE, as Issuer and BANKERS
TRUST COMPANY, as Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Base Indenture.
This letter relates to ________________ principal amount of Series ____
Notes, Class _____ represented by a beneficial interest in the Restricted Global
Class _____ Note (CUSIP No. ___) held with DTC by or on behalf of [transferor]
as beneficial owner (the "Transferor"). The Transferor has requested an exchange
or transfer of its beneficial interest for an interest in the Permanent Global
Class _____ Note (CUSIP (CINS) No.[___]) held with DTC.
In connection with such request and in respect of such Series ____ Notes,
Class _____, the Transferor does hereby certify that such exchange or transfer
has been effected in accordance with the transfer restrictions set forth in the
Series ____ Notes, Class _____ and (i) that, with respect to transfers made in
reliance on Regulation S under the Securities Act:
(1) the offer of the Series ____ Notes, Class __ was not made to a
person in the United States;
(2)(A) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person
acting on its
A-4-1
<PAGE> 148
behalf reasonably believed that the transferee was outside the
United States, or
(B) the transaction was executed in, on or through the facilities
of a designated offshore securities market and neither the
Transferor nor any person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable,
and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
or (ii) that, with respect to transfers made in reliance on Rule 144 under the
Securities Act, the Series ____ Notes, Class _____ are being transferred in a
transaction permitted by Rule 144 under the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Thrifty Finance and the Placement Agents.
[Insert Name of Transferor]
By:
-------------------------------
Name:
Title:
Dated: __________, 199_
cc: Thrifty Car Rental Finance Corporation
A-4-2
<PAGE> 149
EXHIBIT A-5
FORM OF TRANSFER CERTIFICATE FOR TRANSFER OR
EXCHANGE FROM TEMPORARY GLOBAL NOTE
TO RESTRICTED GLOBAL NOTE
(exchanges or transfers pursuant to
Section 2.9 of the Base Indenture)
BANKERS TRUST COMPANY,
as Trustee
4 Albany Street, 10th Floor
New York, NY 10006
Attn: Corporate Trust and Agency Group
Re: Series [ ] Thrifty Car Rental Finance Corporation ("Thrifty
Finance") -- Rental Car Asset Backed Medium Notes, Class [ ]
Reference is hereby made to the Base Indenture, dated as of December __,
1995 (the "Base Indenture"), between THRIFTY FINANCE, as Issuer and BANKERS
TRUST COMPANY, as Trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to __________________ principal amount of Series ____
Notes, Class ____ which are held in the form of the Permanent Global Class ____
Note (CUSIP (CINS) No. ) with Euroclear/Cedel 1/ (ISIN Code [ ]) (Common Code [
]) through DTC by or on behalf of [transferor] as beneficial owner (the
"Transferor"). The Transferor has requested an exchange or transfer of its
beneficial interest in the Series ____ Notes, Class ____ for an interest in the
Restricted Global Class ____ Note (CUSIP No. [ ]).
In connection with such request, and in respect of such Series ____ Notes,
Class ____, the Transferor does hereby certify that such Series ____, Class
_____ Notes are being transferred in accordance with the transfer restrictions
set forth in such Notes and in Rule 144A under the United States Securities Act
of 1933, as amended (the "Securities Act") to a transferee that the Transferor
reasonably believes is purchasing the Series ____ Notes, Class ____ for its own
account or the accounts of another entity and each of the transferee and any
such entity is a
- ----------
1/ Select appropriate depositary.
A-5-1
<PAGE> 150
"qualified institutional buyer" within the meaning of Rule 144A, in each case in
a transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Thrifty Finance and the Placement Agents.
[Insert Name of Transferor]
By:
--------------------------------
Name:
Title:
Dated: ________________, 199_
cc: Thrifty Car Rental Finance Corporation
A-5-2
<PAGE> 151
EXHIBIT B
Form of Demand Note
PROMISSORY NOTE
New York, New York
December __, 1995
FOR VALUE RECEIVED, the undersigned, THRIFTY RENT-A-CAR SYSTEM,
INC., an Oklahoma corporation ("Thrifty"), promises to pay to THRIFTY CAR RENTAL
FINANCE CORPORATION, an Oklahoma corporation ("Thrifty Finance"), on demand (the
"Demand Date"), the principal sum of _________________ DOLLARS ($_________).
1. Principal Payment Date. Any unpaid principal of this Note shall be paid
on the Demand Date.
2. Interest. Thrifty also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding at one-year Libor from the date
hereof until the principal amount shall be paid in full.
3. No Waiver; Amendment. No failure or delay on the part of Thrifty
Finance in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power or right
preclude any other or further exercise thereof or the exercise of any other
power or right. No amendment, modification or waiver of, or consent with respect
to, any provision of this Note shall in any event be effective unless (a) the
same shall be in writing and signed and delivered by Thrifty and Thrifty
Finance, and (b) all consents required for such actions under the Related
Documents shall have been received by the appropriate Persons.
4. No Negotiation. This Note is not negotiable.
5. Successors and Assigns. This Note shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns.
4. Governing Law. THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
B-1
<PAGE> 152
5. Captions. Paragraph captions used in this Note are provided solely for
convenience of reference only and shall not affect the meaning or interpretation
of any provision of this Note.
THRIFTY RENT-A-CAR SYSTEM, INC.
By
-----------------------------------
Name:
Title:
B-2
<PAGE> 153
PAYMENT GRID
================================================================================
Amount of Outstanding Notation
Principal Principal Principal Made
Date Amount Payment Balance By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
B-3
<PAGE> 154
EXHIBIT C
[RESERVED.]
C-1
<PAGE> 155
EXHIBIT D
FORM OF MONTHLY NOTEHOLDERS' STATEMENT
THRIFTY CAR RENTAL FINANCE CORPORATION
--------------------------------
RENTAL CAR ASSET BACKED NOTES
Series ___, Class ____
--------------------------------
Under Section 5.4 of the Base Indenture, dated as of ___________,
1995 (hereinafter as such agreement may have been, or may be from time to time,
supplemented, amended or otherwise modified, the "Base Indenture"), between
Thrifty Car Rental Finance Corporation ("Thrifty Finance"), as Issuer, and
BANKERS TRUST COMPANY, as trustee (the "Trustee"), the Servicer is required to
prepare certain information each month regarding current distributions to
Noteholders. The information which is required to be prepared with respect to
the Payment Date of __________, 199_ (the "Applicable Payment Date") is set
forth below. Certain of the information is presented on the basis of an original
principal amount of $1,000 per Note and as a percentage of the outstanding
principal balance of the Notes as of such date. Certain other information is
presented based on the aggregate amounts for Thrifty Finance as a whole.
Capitalized terms used herein have their respective meanings set forth in the
Base Indenture and the ______ Series Supplement dated as of ____________, 199_
between Thrifty Finance and the Trustee.
- --------------------------------------------------------------------------------
1. The aggregate amount of Collections processed
since the Payment Date prior to the applicable
Payment Date with respect to the Notes of all
Series..................................................... $
- --------------------------------------------------------------------------------
2. The aggregate amount of Interest Collections
processed since the Payment Date prior to the
applicable Payment Date with respect to the
Notes of all Series........................................ $
- --------------------------------------------------------------------------------
3. The aggregate amount of Principal Collections
processed during the Related Month immediately
preceding the applicable Payment Date with
respect to the Notes of all Series......................... $
- --------------------------------------------------------------------------------
D-1
<PAGE> 156
- --------------------------------------------------------------------------------
4. The Invested Percentage for Interest Collections
with respect to Series ___ Notes on the last day
of the Related Month for the applicable Payment
Date....................................................... %
- --------------------------------------------------------------------------------
5. The Invested Percentage for Principal
Collections with respect to Series ___ Notes on
the last day of the Related Month for the
applicable Payment Date.................................... $
- --------------------------------------------------------------------------------
6. The total amount of the distribution to Series
___ Noteholders on __________, 199_, per $1,000
original Note principal amount............................. $
- --------------------------------------------------------------------------------
7. The amount of the distribution set forth in
paragraph 6 above with respect to principal of
the Series ___ Notes, per $1,000 original Note
principal amount........................................... $
- --------------------------------------------------------------------------------
8. The amount of the distribution set forth in
paragraph 6 above with respect to interest on
the Series ___ Notes, per $1,000 original Note
principal amount........................................... $
- --------------------------------------------------------------------------------
9. The amount drawn under the Enhancement
(including, in respect of a series providing for
Enhancement through overcollateralization, the
amount drawn on any available subordinated
amount) for the Series ___ Notes as of the
applicable Payment Date.................................... $
- --------------------------------------------------------------------------------
10. The amount of the Series ___ Notes Monthly
Servicing Fee payable to the Servicer for the
Payment Date............................................... $
- --------------------------------------------------------------------------------
11. The amount available to be drawn under the
Enhancement for the Series ___ Notes as of the
close of business on such Payment Date, after
giving effect to any drawings on the Enhancement
and payments to the Enhancement Provider on such
Payment Date, on an aggregate basis and per
$1,000 original Note principal amount...................... $
- --------------------------------------------------------------------------------
D-2
<PAGE> 157
- --------------------------------------------------------------------------------
12. The ratio of the available Enhancement amount
(or Available Subordinated Amount plus, in the
event of a subordinated class of Notes, the
invested amount of such subordinated class of
Notes) to the Invested Amount of the Series ___
Notes as of the close of business on such
Payment Date, after giving effect to any
drawings on the Enhancement and payments to the
Enhancement Provider on such Payment Date or
drawings on such Available Subordinated Amount
or reduction in amount of such subordinated
class of Notes, or allocations of Collections in
respect thereof............................................ %
- --------------------------------------------------------------------------------
13. The Pool Factor for the Series ____ Notes as of
the end of preceding Record Date immediately
preceding the applicable Payment Date. The
amount of a Noteholders' pro rata share of the
Invested Amount can be determined by multiplying
the original denomination of the Noteholder's
Note by the Pool Factor.................................... %
- --------------------------------------------------------------------------------
14. To the knowledge of the undersigned, there are
no liens on any of the Collateral, other than
the Lien granted by the Indenture or as
otherwise permitted by the Related Documents,
except as described below:
- --------------------------------------------------------------------------------
[If applicable, insert "None".]
- --------------------------------------------------------------------------------
15. As of the applicable Payment Date, the Aggregate
Asset Amount and the amount of any Asset Amount
Deficiency................................................. $______
- --------------------------------------------------------------------------------
16. The Carryover Controlled Amortization Amount for
the Related Month immediately preceding the
applicable Payment Date with respect to the
Series _____ Notes.........................................
- --------------------------------------------------------------------------------
17. The Net Book Value of Program Vehicles from each
Manufacturer [as of the last day of the Related
Month immediately preceding the applicable
Payment Date]..............................................
a. _______________ $______
b. _______________ $______
c. _______________ $______
- --------------------------------------------------------------------------------
D-3
<PAGE> 158
- --------------------------------------------------------------------------------
18. The Net Book Value of Non-Program Vehicles from
each Manufacturer [as of the last day of the
Related Month immediately preceding the
applicable Payment Date]...................................
a. _______________ $______
b. _______________ $______
c. _______________ $______
- --------------------------------------------------------------------------------
19. With respect to any Series, the information
specified in the related Supplement to be
attached hereto............................................
================================================================================
[To the extent any Series of Notes is issued in more than one class, the
foregoing will be broken down on a class by class basis]
IN WITNESS WHEREOF, the undersigned have duly executed this
certificate this ____ day of __________, 199_.
-----------------------------------
Name:
------------------------------
Title:
-----------------------------
D-4
<PAGE> 159
EXHIBIT E
FORM OF CLEARING SYSTEM CERTIFICATE
Re: Thrifty Car Rental Finance Corporation Series [___] Rental Car Asset
Backed Notes, Class [___] (the "Securities")
If the Securities are of the category contemplated in Section 903(c)(3) of
Regulation S under the Securities Act of 1933, as amended (the "Act"), then this
is to certify with respect to the principal amount of Securities that, except as
set forth below, we have received in writing, by tested telex or by electronic
transmission, from member organizations appearing in our records as persons
being entitled to a portion of the principal amount set forth below (our "Member
Organizations"), certifications with respect to such portion substantially in
the form of Exhibit F to the Indenture.
We further certify (i) that we are not making available herewith for
exchange (or, if relevant, exercise of any rights or collection of any interest)
any portion of the Temporary Global Security excepted in such certifications and
(ii) that as of the date hereof we have not received any notification from any
of our Member Organizations to the effect that the statements made by such
Member Organizations with respect to any portion of the part submitted herewith
for exchange (or, if relevant, exercise of any rights or collection of any
interest) are no longer true and cannot be relied upon as the date hereof.
We understand that this certification is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certification is or would be relevant, we irrevocably authorize
E-1
<PAGE> 160
you to produce this certification to any interested party in such proceedings.
Dated: ____________________, 199 2/
Yours faithfully,
[MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, Brussels office, as
operator of the Euroclear System]
or
[Cedel Bank, Societe Anonyme]
By
-----------------------------------
- ----------
2/ To be dated no earlier than the earliest of the Exchange Date or the
relevant Interest Payment Date or the redemption date (as the case may
be).
E-2
<PAGE> 161
EXHIBIT F
FORM OF CERTIFICATE OF BENEFICIAL OWNERSHIP
Re: Thrifty Car Rental Finance Corporation Series [___] Rental Car Asset
Backed Notes, Class [___] (the "Securities")
If the Securities are of the category contemplated in Section 903(c)(3) of
Regulation S under the Securities Act of 1933, as amended (the "Act"), then this
is to certify that, except as set forth below, in the case of debt securities,
the Securities are beneficially owned by (a) non-U.S. persons or (b) U.S.
persons who purchased the Securities in transactions which did not require
registration under the Act. If this certification is being delivered in
connection with the exercise of warrants pursuant to Section 902(m) of
Regulation S under the Act, then this is further to certify that, except as set
forth below, the Securities are not being exercised by or on behalf of U.S.
person(s). As used in this paragraph the terms "U.S. person" has the meaning
given to it by Regulation S under the Act.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia), its territories and
possessions; and its "territories" and "possessions" include Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the Securities
held by you for our account in accordance with your operating procedures if any
applicable statement herein is not correct on such date, and in the absence of
any such notification it may be assumed that this certification applies as of
such date.
This certification excepts and does not relate to U.S.$___________ of such
interest in the above Securities in respect of which we are not able to certify
and as to which we understand exchange and delivery of definitive Securities
(or, if relevant, exercise of any rights or collection of any interest) cannot
be made until we do so certify.
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
commenced or
F-1
<PAGE> 162
threatened in connection with which this certification is or would be relevant,
we irrevocably authorize you to produce this certification to any interested
party in such proceedings.
Date: ______________, 19__3/
By:
----------------------------------------------
As, or as agent for, the beneficial owner(s)
of the Securities to which this certificate
relates.
- ----------
3/ Not earlier than 15 days prior to the certification event to which the
certification relates.
F-2
<PAGE> 1
EXHIBIT 4.3
[EXECUTION COPY]
THRIFTY CAR RENTAL FINANCE CORPORATION,
as Issuer
and
BANKERS TRUST COMPANY,
as Trustee
----------------------
SERIES 1995-1 SUPPLEMENT
dated as of December 13, 1995
to
BASE INDENTURE
dated as of December 13, 1995
----------------
Rental Car Asset Backed Notes
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE 1
DESIGNATION
ARTICLE 2
DEFINITIONS AND CONSTRUCTION
ARTICLE 3
ARTICLE 4 OF BASE INDENTURE
ARTICLE 4
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.6. Establishment of Series 1995-1 Collection
Account, Series 1995-1 Excess Funding
Account, and Series 1995-1 Accrued
Interest Account........................................ 27
Section 4.7. Allocations with Respect to the
Series 1995-1 Notes..................................... 28
Section 4.8. Monthly Payments.......................................... 37
Section 4.9. Payment of Note Interest.................................. 40
Section 4.10. Payment of Note Principal................................. 40
Section 4.11. Retained Distribution Account............................. 44
Section 4.12. Class A Distribution Account.............................. 45
Section 4.13. Class B Distribution Account.............................. 46
Section 4.14. Class B Notes Subordinate to Class A Notes................ 47
Section 4.15. Application of Liquidity Amount........................... 48
ARTICLE 4
AMORTIZATION EVENTS
Section 4.1. Series 1995-1 Amortization Events......................... 48
Section 4.2. Waiver of Past Events..................................... 49
ARTICLE 5
RIGHT TO WAIVE PURCHASE RESTRICTIONS
Section 5.1. Request for Waiver........................................ 49
Section 5.2. Consents.................................................. 51
-i-
<PAGE> 3
ARTICLE 6
FORM OF SERIES 1995-1 NOTES
Section 6.1. Class A Notes............................................. 53
Section 6.2. Class B Notes............................................. 54
ARTICLE 7
GENERAL
Section 7.1. Repurchase of Notes....................................... 55
Schedule 1 - Maximum Manufacturer Percentage
Exhibit A-1 - Form of Restricted Global Class A-1 Note
Exhibit A-2 - Form of Temporary Global Class A-1 Note
Exhibit A-3 - Form of Permanent Global Class A-1 Note
Exhibit A-4 - Form of Restricted Global Class A-2 Note
Exhibit A-5 - Form of Temporary Global Class A-2 Note
Exhibit A-6 - Form of Permanent Global Class A-2 Note
Exhibit B-1 - Form of Restricted Global Class B-1 Note
Exhibit B-2 - Form of Temporary Global Class B-1 Note
Exhibit B-3 - Form of Permanent Global Class B-1 Note
Exhibit B-4 - Form of Restricted Global Class B-2 Note
Exhibit B-5 - Form of Temporary Global Class B-2 Note
Exhibit B-6 - Form of Permanent Global Class B-2 Note
Exhibit C - Form of Consent
-ii-
<PAGE> 4
This Series 1995-1 SUPPLEMENT, dated as of December 13, 1995 (this
"Supplement") between THRIFTY CAR RENTAL FINANCE CORPORATION, an Oklahoma
corporation ("Thrifty Finance") and BANKERS TRUST COMPANY, a New York banking
corporation (together with its successors in trust thereunder as provided in the
Base Indenture referred to below, the "Trustee"), to the Base Indenture, dated
as of December 13, 1995, between Thrifty Finance and the Trustee (as amended,
modified or supplemented from time to time, exclusive of Supplements creating a
new Series of Notes, the "Base Indenture").
W I T N E S S E T H:
WHEREAS, Sections 2.2, 11.1 and 11.3 of the Base Indenture provide,
among other things, that Thrifty Finance and the Trustee may at any time and
from time to time enter into a supplement to the Base Indenture for the purpose
of authorizing the issuance of one or more Series of Notes;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DESIGNATION
(a) There is hereby created a Series of Notes to be issued pursuant
to the Base Indenture and this Supplement and such Series of Notes shall be
designated generally as Rental Car Asset Backed Notes, Series 1995-1. The Series
1995-1 Notes shall be issued in two classes. The Class A Rental Car Asset Backed
Notes shall be designated generally as the Class A Notes which are comprised of
the Class A-1 Notes and the Class A-2 Notes and the Class B Rental Car Asset
Backed Notes shall be designated generally as the Class B Notes which are
comprised of the Class B-1 Notes and the Class B-2 Notes. The Class A Notes and
the Class B Notes are referred to collectively as the "Series 1995-1 Notes".
(b) The Class B Notes are subordinated in right of payment to the
Class A Notes as set forth herein.
(c) The proceeds from the sale of the Series 1995-1 Notes shall be
deposited into the Collection Account (and allocated to the Series 1995-1
Collection Account), and shall be used (i) on the Series 1995-1 Closing Date, to
refinance the Existing Fleet, (ii) from the Series 1995-1 Closing Date to the
90th day after the Series 1995-1 Closing Date, to finance the acquisition by
Thrifty of additional Eligible Vehicles for leasing in states in which Thrifty
Finance as of the time of acquisition shall not have obtained all licenses and
qualifications necessary to conduct its leasing and other
<PAGE> 5
businesses, (iii) on and after the Series 1995-1 Closing Date, to acquire Texas
Vehicles, (iv) on and after the Series 1995-1 Closing Date, to acquire Acquired
Vehicles from certain manufacturers, and (v) in certain circumstances, to pay
principal on amortizing Notes of other Series or principal and interest on the
Series 1995-1 Notes.
(d) The Series 1995-1 Notes are a non-Segregated Series of Notes (as
more fully described in the Base Indenture).
ARTICLE 2
DEFINITIONS AND CONSTRUCTION
(a) All capitalized terms not otherwise defined herein are defined
in Schedule 1 to the Base Indenture. All Article, Section or Subsection
references herein shall refer to Articles, Sections or Subsections of the Base
Indenture, except as otherwise provided herein. Unless otherwise stated herein,
as the context otherwise requires or if such term is otherwise defined in the
Base Indenture, each capitalized term used or defined herein shall relate only
to the Series 1995-1 Notes and not to any other Series of Notes issued by
Thrifty Finance.
(b) All references in this Supplement to "all" Series of Notes (and
all references in this Supplement to terms defined in the Base Indenture that
contain references to "all" Series of Notes) shall refer to all Series of Notes
other than Segregated Series of Notes.
(c) The following words and phrases shall have the following
meanings with respect to the Series 1995-1 Notes, and the definitions of such
terms are applicable to the singular as well as the plural form of such terms
and to the masculine as well as the feminine and neuter genders of such terms:
"Carryover Controlled Amortization Amount" (as such term is used in
Section 24.4(b) of the Lease) means each of the Class A-1 Carryover Controlled
Amortization Amount, the Class A-2 Carryover Controlled Amortization Amount, the
Class B-1 Carryover Controlled Amortization Amount and the Class B-2 Carryover
Amortization Amount.
"Change of Percentage Notice" has the meaning specified in Section
5.1(a) of this Supplement.
"Class A Deficiency Amount" has the meaning specified in Section
4.8(a) of the Base Indenture.
"Class A Distribution Account" has the meaning specified in Section
4.12(a) of the Base Indenture.
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"Class A Distribution Account Collateral" has the meaning specified
in Section 4.12(d) of the Base Indenture.
"Class A Interest Amount" has the meaning specified in Section
4.8(a) of the Base Indenture.
"Class A Invested Amount" means, on any date of determination, the
sum of the Class A-1 Invested Amount and the Class A-2 Invested Amount for such
date of determination.
"Class A Invested Percentage" means, on any date of determination,
the sum of the Class A-1 Invested Percentage and the Class A-2 Invested
Percentage for such date of determination.
"Class A Investor Monthly Servicing Fee" means, on any Payment Date,
an amount equal to the product of 1/12th of 1% of the Class A Invested Amount as
of the preceding Payment Date (or, in the case of the initial Payment Date, the
sum of the Class A-1 Initial Invested Amount and the Class A-2 Initial Invested
Amount), after giving effect to any payments of principal on such date;
provided, however, that if a Rapid Amortization Period shall occur and be
continuing and if Thrifty is no longer the Servicer, the Class A Investor
Monthly Servicing Fee shall equal the greater of (x) the product of (i) a
fraction, the numerator of which is the Class A Invested Amount on such Payment
Date and the denominator of which is the aggregate invested amounts for all
outstanding Series of Notes on such Payment Date, (ii) $20 and (iii) the number
of Vehicles as of the last day of the Related Month, and (y) the amount
described in the first clause of this definition.
"Class A Monthly Supplemental Servicing Fee" means, on any Payment
Date, the product of the Supplemental Servicing Fee accrued during the preceding
Series 1995-1 Interest Period times a fraction, the numerator of which is the
Class A Invested Amount on such Payment Date and the denominator of which is the
aggregate invested amounts for all outstanding Series of Notes on such Payment
Date.
"Class A Note Rate" means, for any Series 1995-1 Interest Period,
the Class A-1 Rate or the Class A-2 Rate, as applicable.
"Class A Noteholder" means the Person in whose name a Class A Note
is registered in the Note Register.
"Class A Notes" means the Class A-1 Notes and the Class A-2 Notes.
"Class A Waiver Deficiency Adjustment Prepayments" has the meaning
specified in Section 5.2 of this Supplement.
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"Class A-1 Carryover Controlled Amortization Amount" means, with
respect to the Class A-1 Notes for any Related Month during the Class A-1
Controlled Amortization Period, (i) the excess, if any, of the Class A-1
Controlled Distribution Amount payable on the Payment Date occurring in the
Related Month over the principal amount distributed on such Payment Date with
respect to the Class A-1 Notes pursuant to Section 4.10(a) of the Base
Indenture, plus (ii) the unpaid amount, if any, of the Class A-1 Carryover
Controlled Amortization Amount for the previous Related Month; provided,
however, that for the first Related Month in the Class A-1 Controlled
Amortization Period, the Class A-1 Carryover Controlled Amortization Amount
shall be zero.
"Class A-1 Controlled Amortization Amount" means $41,583,333.
"Class A-1 Controlled Amortization Period" means the period
commencing on August 1, 1998 (or, if such day is not a Business Day, the
Business Day last preceding such day), and continuing to the earliest of (i) the
commencement of the Series 1995-1 Rapid Amortization Period, (ii) the date on
which the Class A-1 Notes are fully paid, (iii) the Series 1995-1 Termination
Date, and (iv) the termination of the Indenture.
"Class A-1 Controlled Distribution Amount" means, with respect to
any Related Month during the Class A-1 Controlled Amortization Period, an amount
equal to the sum of the Class A-1 Controlled Amortization Amount and any Class
A-1 Carryover Controlled Amortization Amount for such Related Month.
"Class A-1 Controlled Distribution Amount Deficiency" has the
meaning specified in Section 4.10(a)(i) of the Base Indenture.
"Class A-1 Expected Final Payment Date" means the February 1999
Payment Date.
"Class A-1 Initial Invested Amount" means the aggregate initial
principal amount of Class A-1 Notes, which is $249,500,000.
"Class A-1 Invested Amount" means, on any date of determination, an
amount equal to (a) the Class A-1 Initial Invested Amount, minus (b) the amount
of principal payments made to Class A-1 Noteholders on or prior to such date,
minus (c) all Losses allocated to the Class A-1 Noteholders on or prior to such
date, plus (d) all Recoveries allocated to the Class A-1 Noteholders on or prior
to such date.
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<PAGE> 8
"Class A-1 Invested Percentage" means, on any date of determination:
(a) when used with respect to Principal Collections during the
Series 1995-1 Revolving Period, the percentage equivalent of a fraction,
the numerator of which shall be the Class A-1 Invested Amount as of the
end of the second preceding Related Month or, until the end of the second
Related Month, as of the Series 1995-1 Closing Date and the denominator of
which shall be the greater of (A) the Aggregate Asset Amount as of the end
of the second preceding Related Month or, until the end of the second
Related Month, as of the Series 1995-1 Closing Date, and (B) as of the
same date as in clause (A), the sum of the numerators used to determine
(i) invested percentages for allocations with respect to Principal
Collections (for all Series of Notes and all classes of such Series of
Notes) and (ii) available subordinated amount percentages for allocations
with respect to Principal Collections (for all Series of Notes that
provide for credit enhancement in the form of overcollateralization);
(b) when used with respect to Principal Collections during the
Series 1995-1 Controlled Amortization Period and the Series 1995-1 Rapid
Amortization Period, the percentage equivalent of a fraction, the
numerator of which shall be the Class A-1 Invested Amount as of the end of
the related Series 1995-1 Revolving Period and the denominator of which
shall be the greater of (A) the Aggregate Asset Amount as of the end of
the second preceding Related Month and (B) as of the same date as in
clause (A), the sum of the numerators used to determine (i) invested
percentages for allocations with respect to Principal Collections (for all
Series of Notes and all classes of such Series of Notes) and (ii)
available subordinated amount percentages for allocations with respect to
Principal Collections (for all Series of Notes that provide for credit
enhancement in the form of overcollateralization);
(c) when used with respect to Interest Collections, the
percentage equivalent of a fraction, the numerator of which shall be the
Accrued Amounts with respect to the Class A-1 Notes on such date of
determination, and the denominator of which shall be the aggregate Accrued
Amounts with respect to all Series of Notes on such date of determination;
(d) when used with respect to Recoveries, the percentage
equivalent of a fraction, the numerator of which shall be the cumulative
amount of all unreimbursed Losses allocated to the Class A-1 Noteholders
as of the end of the second preceding Related Month and the denominator of
which
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<PAGE> 9
shall be the cumulative amount of all unreimbursed Losses for the
Noteholders of all Series of Notes and the Retained Interestholder
(including all unreimbursed Losses in respect of available subordinated
amounts, if any, for all Series) as of the end of such second preceding
Related Month; and
(e) when used with respect to Losses, the percentage
equivalent of a fraction, the numerator of which shall be the Class A-1
Invested Amount as of the end of the second preceding Related Month and
the denominator of which shall be the greater of (A) the Aggregate Asset
Amount as of the end of the second preceding Related Month and (B) as of
the same date as in clause (A), the sum of the numerators used to
determine (i) invested percentages for allocations with respect to Losses
(for all Series of Notes and all classes of such Series of Notes) and (ii)
available subordinated amount percentages for allocations with respect to
Losses (for all Series of Notes that provide for credit enhancement in the
form of overcollateralization).
"Class A-1 Noteholder" means the Person in whose name a Class A-1
Note is registered in the Note Register.
"Class A-1 Notes" means any one of the Floating Rate Rental Car
Asset Backed Notes, Class A-1, executed by Thrifty Finance and authenticated and
delivered by or on behalf of the Trustee, substantially in the form of Exhibit
A-1, Exhibit A-2 or Exhibit A-3. Definitive Class A-1 Notes shall have such
insertions and deletions as are necessary to give effect to the provisions of
Section 2.18 of the Base Indenture.
"Class A-1 Rate" means, for any Series 1995-1 Interest Period, LIBOR
for such Series 1995-1 Interest Period plus 0.70% per annum, set initially two
London business days prior to the Series 1995-1 Closing Date, for the period
from the date of issuance of the Series 1995-1 Notes to but excluding the
initial Payment Date, and reset monthly for each subsequent Series 1995-1
Interest Period.
"Class A-2 Carryover Controlled Amortization Amount" means, with
respect to the Class A-2 Notes for any Related Month during the Class A-2
Controlled Amortization Period, (i) the excess, if any, of the Class A-2 Rate
Controlled Distribution Amount payable on the Payment Date occurring in the
Related Month over the principal amount distributed on such Payment Date with
respect to the Class A-2 Notes pursuant to Section 4.10(a) of the Base
Indenture, plus (ii) the unpaid amount, if any, of the Class A-2 Carryover
Controlled Amortization Amount for the previous Related Month; provided,
however, that for the first Related Month in the Class A-2 Controlled
Amortization Period, the Class A-2 Carryover Controlled Amortization Amount
shall be zero.
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<PAGE> 10
"Class A-2 Controlled Amortization Amount" means $15,833,333.
"Class A-2 Controlled Amortization Period" means the period
commencing on May 1, 2000 (or, if such day is not a Business Day, the Business
Day last preceding such day), and continuing to the earliest of (i) the
commencement of the Series 1995-1 Rapid Amortization Period, (ii) the date on
which the Class A-2 Notes are fully paid, (iii) the Series 1995-1 Termination
Date, and (iv) the termination of the Indenture.
"Class A-2 Controlled Distribution Amount" means, with respect to
any Related Month during the Class A-2 Controlled Amortization Period, an amount
equal to the sum of the Class A-2 Controlled Amortization Amount and any Class
A-2 Carryover Controlled Amortization Amount for such Related Month.
"Class A-2 Controlled Distribution Amount Deficiency" has the
meaning specified in Section 4.10(a)(ii) of the Base Indenture.
"Class A-2 Expected Final Payment Date" means the May 2001 Payment
Date.
"Class A-2 Initial Invested Amount" means the aggregate initial
principal amount of Class A-2 Notes, which is $190,000,000.
"Class A-2 Invested Amount" means, on any date of determination, an
amount equal to (a) the Class A-2 Initial Invested Amount, minus (b) the amount
of principal payments made to Class A-2 Noteholders on or prior to such date,
minus (c) all Losses allocated to the Class A-2 Noteholders on or prior to such
date, plus (d) all Recoveries allocated to the Class A-2 Noteholders on or prior
to such date.
"Class A-2 Invested Percentage" means, on any date of determination:
(a) when used with respect to Principal Collections during the
Series 1995-1 Revolving Period, the percentage equivalent of a fraction
the numerator of which shall be the Class A-2 Invested Amount as of the
end of the second preceding Related Month or, until the end of the second
Related Month, as of the Series 1995-1 Closing Date and the denominator of
which shall be the greater of (A) the Aggregate Asset Amount as of the end
of the second preceding Related Month or, until the end of the second
Related Month, as of the Series 1995-1 Closing Date, and (B) as of the
same date as in clause (A), the sum of the numerators used to determine
(i) invested percentages for allocations with respect to Principal
Collections (for all Series of Notes and all classes of such Series of
Notes) and (ii) available
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<PAGE> 11
subordinated amount percentages for allocations with respect to Principal
Collections (for all Series of Notes that provide for credit enhancement
in the form of overcollateralization);
(b) when used with respect to Principal Collections during the
Series 1995-1 Controlled Amortization Period and the Series 1995-1 Rapid
Amortization Period, the percentage equivalent of a fraction, the
numerator of which shall be the Class A-2 Invested Amount as of the end of
the related Series 1995-1 Revolving Period and the denominator of which
shall be the greater of (A) the Aggregate Asset Amount as of the end of
the second preceding Related Month and (B) as of the same date as in
clause (A), the sum of the numerators used to determine (i) invested
percentages for allocations with respect to Principal Collections (for all
Series of Notes and all classes of such Series of Notes) and (ii)
available subordinated amount percentages for allocations with respect to
Principal Collections (for all Series of Notes that provide for credit
enhancement in the form of overcollateralization);
(c) when used with respect to Interest Collections, the
percentage equivalent of a fraction, the numerator of which shall be the
Accrued Amounts with respect to the Class A-2 Notes on such date of
determination, and the denominator of which will be the aggregate Accrued
Amounts with respect to all Series of Notes on such date of determination;
(d) when used with respect to Recoveries, the percentage
equivalent of a fraction, the numerator of which shall be the cumulative
amount of all unreimbursed Losses allocated to the Class A-2 Noteholders
as of the end of the second preceding Related Month and the denominator of
which is the cumulative amount of all unreimbursed Losses for the
Noteholders of all Series of Notes and the Retained Interestholder
(including all unreimbursed Losses in respect of available subordinated
amounts, if any, for all Series) as of the end of the second preceding
Related Month; and
(e) when used with respect to Losses, the percentage
equivalent of a fraction, the numerator of which shall be the Class A-2
Invested Amount as of the end of the second preceding Related Month and
the denominator of which shall be the greater of (A) the Aggregate Asset
Amount as of the end of the second preceding Related Month and (B) as of
the same date as in clause (A), the sum of the numerators used to
determine (i) invested percentages for allocations with respect to Losses
(for all Series of Notes and all classes of such Series of Notes) and (ii)
available subordinated amount percentages for allocations with respect
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<PAGE> 12
to Losses (for all Series of Notes that provide for credit enhancement in
the form of overcollateralization).
"Class A-2 Noteholder" means the Person in whose name a Class A-2
Note is registered in the Note Register.
"Class A-2 Notes" means any one of the 6.60% Rental Car Asset Backed
Notes, Class A-2, executed by Thrifty Finance and authenticated and delivered by
or on behalf of the Trustee, substantially in the form of Exhibit A-4, Exhibit
A-5 or Exhibit A-6. Definitive Class A-2 Notes shall have such insertions and
deletions as are necessary to give effect to the provisions of Section 2.18 of
the Base Indenture.
"Class A-2 Rate" means, for any Series 1995-1 Interest Period, 6.60%
per annum; provided, however, that the Class A-2 Rate shall in no event be
higher than the maximum rate permitted by applicable law.
"Class B Controlled Distribution Amount Deficiency" has the meaning
specified in Section 4.10(b)(i) of the Base Indenture.
"Class B Deficiency Amount" has the meaning specified in Section 4.8
of the Base Indenture.
"Class B Distribution Account" has the meaning specified in Section
4.13(a) of the Base Indenture.
"Class B Distribution Account Collateral" has the meaning specified
in Section 4.13(d) of the Base Indenture.
"Class B Interest Amount" has the meaning specified in Section
4.8(b) of the Base Indenture.
"Class B Invested Amount" means, on any date of determination, the
sum of the Class B-1 Invested Amount and the Class B-2 Invested Amount for such
date of determination.
"Class B Invested Percentage" means, on any date of determination,
the sum of the Class B-1 Invested Percentage and the Class B-2 Invested
Percentage.
"Class B Investor Monthly Servicing Fee" means, on any Payment Date,
an amount equal to the product of 1/12th of 1% of the Class B Invested Amount as
of the preceding Payment Date (or, in the case of the initial Payment Date, the
sum of the Class B-1 Initial Invested Amount and the Class B-2 Initial Invested
Amount), after giving effect to any payments of principal on such date;
provided, however, that if a Rapid Amortization Period shall occur and be
continuing and if Thrifty is no longer the Servicer, the Class B Investor
Monthly Servicing Fee shall equal
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the greater of (x) the product of (i) a fraction, the numerator of which is the
Class B Invested Amount on such Payment Date and the denominator of which is the
aggregate invested amounts for all outstanding Series of Notes on such Payment
Date, (ii) $20 and (iii) the number of Vehicles as of the last day of the
Related Month, and (y) the amount described in the first clause of this
definition.
"Class B Monthly Supplemental Servicing Fee" means, on any Payment
Date, the product of the Supplemental Servicing Fee accrued during the preceding
Series 1995-1 Interest Period times a fraction, the numerator of which is the
Class B Invested Amount on such Payment Date and the denominator of which is the
aggregate invested amounts for all outstanding Series of Notes on such Payment
Date.
"Class B Note Rate" means, for any Series 1995-1 Interest Period,
the Class B-1 Rate or the Class B-2 Rate, as applicable.
"Class B Noteholder" means the Person in whose name a Class B Note
is registered in the Note Register.
"Class B Notes" means the Class B-1 Notes and the Class B-2 Notes.
"Class B-1 Carryover Controlled Amortization Amount" means, with
respect to the Class B-1 Notes for any Related Month during the Class B-1
Controlled Amortization Period, (i) the excess, if any, of the Class B-1
Controlled Distribution Amount payable on the Payment Date occurring in the
Related Month over the principal amount distributed on such Payment Date with
respect to the Class B-1 Notes pursuant to Section 4.10(b) of the Base Indenture
plus (ii) the unpaid amount, if any, of the Class B-1 Carryover Controlled
Amortization Amount for the previous Related Month; provided, however, that for
the first Related Month in the Class B-1 Controlled Amortization Period, the
Class B-1 Carryover Controlled Amortization Amount shall be zero.
"Class B-1 Controlled Amortization Amount" means $6,500,000.
"Class B-1 Controlled Amortization Period" means the period
commencing on February 1, 1999 (or, if such day is not a Business Day, the
Business Day last preceding such day) and continuing to the earliest of (i) the
commencement of the Series 1995-1 Rapid Amortization Period, (ii) the date on
which the Class B-1 Notes are fully paid, (iii) the Series 1995-1 Termination
Date, and (iv) the termination of the Indenture.
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<PAGE> 14
"Class B-1 Controlled Distribution Amount" means, with respect to
any Related Month during the Series 1995-1 Controlled Amortization Period, an
amount equal to the sum of the Class B-1 Controlled Amortization Amount and any
Class B-1 Carryover Controlled Amortization Amount for such Related Month.
"Class B-1 Expected Final Payment Date" means the March 1999 Payment
Date.
"Class B-1 Initial Invested Amount" means the aggregate initial
principal amount of the Class B-1 Notes, which is $6,500,000.
"Class B-1 Invested Amount" means, when used with respect to any
date of determination, an amount equal to (a) the Class B-1 Initial Invested
Amount minus (b) the amount of principal payments made to Class B-1 Noteholders
on or prior to such date, minus (c) all Losses allocated to the Class B-1
Noteholders on or prior to such date, plus (d) all Recoveries allocated to the
Class B-1 Noteholders on or prior to such date.
"Class B-1 Invested Percentage" means, on any date of determination:
(a) when used with respect to Principal Collections during the
Series 1995-1 Revolving Period, the percentage equivalent of a fraction,
the numerator of which shall be the Class B-1 Invested Amount as of the
end of the second preceding Related Month or, until the end of the second
Related Month, as of the Series 1995-1 Closing Date and the denominator of
which shall be the greater of (A) the Aggregate Asset Amount as of the end
of the second preceding Related Month or, until the end of the second
Related Month, as of the Series 1995-1 Closing Date, and (B) as of the
same date as in clause (A), the sum of the numerators used to determine
(i) invested percentages for allocations with respect to Principal
Collections (for all Series of Notes and all classes of such Series of
Notes) and (ii) available subordinated amount percentages for allocations
with respect to Principal Collections (for all Series of Notes that
provide for credit enhancement in the form of overcollateralization);
(b) when used with respect to Principal Collections during the
Series 1995-1 Controlled Amortization Period and the Series 1995-1 Rapid
Amortization Period, the percentage equivalent of a fraction, the
numerator of which shall be the Class B-1 Invested Amount as of the end of
the related Series 1995-1 Revolving Period, and the denominator of which
shall be the greater of (A) the Aggregate Asset Amount as of the end of
the second preceding Related Month and (B) as of the same date as in
clause (A), the sum of the
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<PAGE> 15
numerators used to determine (i) invested percentages for allocations with
respect to Principal Collections (for all Series of Notes and all classes
of such Series of Notes) and (ii) available subordinated amount
percentages for allocations with respect to Principal Collections (for all
Series of Notes that provide for credit enhancement in the form of
overcollateralization);
(c) when used with respect to Interest Collections, the
percentage equivalent of a fraction, the numerator of which shall be the
Accrued Amounts with respect to the Class B-1 Notes on such date of
determination, and the denominator of which shall be the aggregate Accrued
Amounts with respect to all Series of Notes on such date of determination;
(d) when used with respect to Recoveries, the percentage
equivalent of a fraction, the numerator of which shall be the cumulative
amount of all unreimbursed Losses allocated to the Class B-1 Noteholders
as of the end of the second preceding Related Month and the denominator of
which shall be the cumulative amount of all unreimbursed Losses for the
Noteholders of all Series of Notes and the Retained Interestholder
(including all unreimbursed Losses in respect of available subordinated
amounts, if any, for all Series) as of the end of the second preceding
Related Month; and
(e) when used with respect to Losses, the percentage
equivalent of a fraction, the numerator of which shall be the Class B-1
Invested Amount as of the end of the second preceding Related Month and
the denominator of which shall be the greater of (A) the Aggregate Asset
Amount as of the end of the second preceding Related Month and (B) as of
the same date as in clause (A), the sum of the numerators used to
determine (i) invested percentages for allocations with respect to Losses
(for all Series of Notes and all classes of such Series of Notes) and (ii)
available subordinated amount percentages for allocations with respect to
Losses (for all Series of Notes that provide for credit enhancement in the
form of overcollateralization).
"Class B-1 Noteholder" means the Person in whose name a Class B-1
Note is registered in the Note Register.
"Class B-1 Notes" means any one of the Floating Rate Rental Car
Asset Backed Notes, Class B-1, executed by Thrifty Finance and authenticated and
delivered by or on behalf of the Trustee, substantially in the form of Exhibit
B-1, Exhibit B-2 or Exhibit B-3. Definitive Class B-1 Notes shall have such
insertions and deletions as are necessary to give effect to the provisions of
Section 2.18 of the Base Indenture.
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<PAGE> 16
"Class B-1 Rate" means, for any Series 1995-1 Interest Period, LIBOR
for such Series 1995-1 Interest Period plus 1.10% per annum, set initially two
London business days prior to the Series 1995-1 Closing Date, for the period
from the date of issuance of the Series 1995-1 Notes to but excluding the
initial Payment Date, and reset monthly for each subsequent Series 1995-1
Interest Period.
"Class B-2 Carryover Controlled Amortization Amount" means, with
respect to the Class B-2 Notes for any Related Month during the Class B-2
Controlled Amortization Period, (i) the excess, if any, of the Class B-2
Controlled Distribution Amount payable on the Payment Date occurring in the
Related Month over the principal amount distributed on such Payment Date with
respect to the Class B-2 Notes pursuant to the Indenture plus (ii) the unpaid
amount, if any, of the Class B-2 Carryover Controlled Amortization Amount for
the previous Related Month; provided, however, that for the first Related Month
in the Class B-2 Controlled Amortization Period, the Class B-2 Carryover
Controlled Amortization Amount shall be zero.
"Class B-2 Controlled Amortization Amount" means $4,000,000.
"Class B-2 Controlled Amortization Period" means the period
commencing on May 1, 2001 (or, if such day is not a Business Day, the Business
Day last preceding such day) and continuing to the earliest of (i) the
commencement of the Series 1995-1 Rapid Amortization Period, (ii) the date on
which the Class B-2 Notes are fully paid, (iii) the Series 1995-1 Termination
Date, and (iv) the termination of the Indenture.
"Class B-2 Controlled Distribution Amount" means, with respect to
any Related Month during the Series 1995-1 Controlled Amortization Period, an
amount equal to the sum of the Class B-2 Controlled Amortization Amount and any
Class B-2 Carryover Controlled Amortization Amount for such Related Month.
"Class B-2 Expected Final Payment Date" means the June 2001 Payment
Date.
"Class B-2 Initial Invested Amount" means the aggregate initial
principal amount of the Class B-2 Notes, which is $4,000,000.
"Class B-2 Invested Amount" means, when used with respect to any
date of determination, an amount equal to (a) the Class B-2 Initial Invested
Amount minus (b) the amount of principal payments made to Class B-2 Noteholders
on or prior to such date, minus (c) all Losses allocated to the Class B-1
Noteholders on or prior to such date, plus (d) all Recoveries allocated to the
Class B-2 Noteholders on or prior to such date.
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<PAGE> 17
"Class B-2 Invested Percentage" means, on any date of determination:
(a) when used with respect to Principal Collections during the
Series 1995-1 Revolving Period, the percentage equivalent of a fraction,
the numerator of which shall be the Class B-2 Invested Amount as of the
end of the second preceding Related Month or, until the end of the second
Related Month, as of the Series 1995-1 Closing Date, and the denominator
of which shall be the greater of (A) the Aggregate Asset Amount as of the
end of the second preceding Related Month or, until the end of the second
Related Month, as of the Series 1995-1 Closing Date, and (B) as of the
same date as in clause (A), the sum of the numerators used to determine
(i) invested percentages for allocations with respect to Principal
Collections (for all Series of Notes and all classes of such Series of
Notes) and (ii) available subordinated amount percentages for allocations
with respect to Principal Collections (for all Series of Notes that
provide for credit enhancement in the form of overcollateralization);
(b) when used with respect to Principal Collections during the
Series 1995-1 Controlled Amortization Period and the Series 1995-1 Rapid
Amortization Period, the percentage equivalent of a fraction, the
numerator of which shall be the Class B-2 Invested Amount as of the end of
the related Series 1995-1 Revolving Period, and the denominator of which
shall be the greater of (A) the Aggregate Asset Amount as of the end of
the second preceding Related Month and (B) as of the same date as in
clause (A), the sum of the numerators used to determine (i) invested
percentages for allocations with respect to Principal Collections (for all
Series of Notes and all classes of such Series of Notes) and (ii)
available subordinated amount percentages for allocations with respect to
Principal Collections (for all Series of Notes that provide for credit
enhancement in the form of overcollateralization);
(c) when used with respect to Interest Collections, the
percentage equivalent of a fraction, the numerator of which shall be the
Accrued Amounts with respect to the Class B-2 Notes on such date of
determination, and the denominator of which shall be the aggregate Accrued
Amounts with respect to all Series of Notes on such date of determination;
(d) when used with respect to Recoveries, the percentage
equivalent of a fraction, the numerator of which shall be the cumulative
amount of all unreimbursed Losses allocated to the Class B-2 Noteholders
as of the end of the second preceding Related Month and the denominator of
which
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shall be the cumulative amount of all unreimbursed Losses for the
Noteholders of all Series of Notes and the Retained Interestholder
(including all unreimbursed Losses in respect of available subordinated
amounts, if any, for all Series) as of the end of the second preceding
Related Month; and
(e) when used with respect to Losses, the percentage
equivalent of a fraction, the numerator of which shall be the Class B-2
Invested Amount as of the end of the second preceding Related Month and
the denominator of which shall be the greater of (A) the Aggregate Asset
Amount as of the end of the second preceding Related Month and (B) as of
the same date as in clause (A), the sum of the numerators used to
determine (i) invested percentages for allocations with respect to Losses
(for all Series of Notes and all classes of such Series of Notes) and (ii)
available subordinated amount percentages for allocations with respect to
Losses (for all Series of Notes that provide for credit enhancement in the
form of overcollateralization).
"Class B-2 Notes" means any one of the Floating Rate Rental Car
Asset Backed Notes, Class B-1, executed by Thrifty Finance and authenticated and
delivered by or on behalf of the Trustee, substantially in the form of Exhibit
B-4, Exhibit B-5 or Exhibit B-6. Definitive Class B-2 Notes shall have such
insertions and deletions as are necessary to give effect to the provisions of
Section 2.18 of the Base Indenture.
"Class B-2 Rate" means, for any Series 1995-1 Interest Period, LIBOR
for such Series 1995-1 Interest Period plus 1.25% per annum, set initially two
London business days prior to the Series 1995-1 Closing Date, for the period
from the date of issuance of the Series 1995-1 Notes to but excluding the
initial Payment Date, and reset monthly for each subsequent Series 1995-1
Interest Period.
"Consent" has the meaning specified in Section 5.1(c) of this
Supplement.
"Consent Period Expiration Date" has the meaning specified in
Section 5.1(c) of this Supplement.
"Controlled Distribution Amount" means the Class A-1 Controlled
Distribution Amount, the Class A-2 Controlled Distribution Amount, the Class B-1
Controlled Distribution Amount and the Class B-2 Controlled Distribution Amount,
collectively.
"Designated Amounts" has the meaning specified in Section 5.1(b) of
this Supplement.
"Index Maturity" for the Class A-1 Notes and the Class B Notes means
one month.
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<PAGE> 19
"Initial Purchasers" means CS First Boston and Salomon Brothers Inc.
"Interest Reset Date" means the first day of the applicable Series
1995-1 Interest Period.
"Invested Amount" means, on any date of determination, the sum of
the Class A Invested Amount and the Class B Invested Amount for such date of
determination.
"LIBOR" means, for each Series 1995-1 Interest Period, the per annum
interest rate determined by the Trustee as follows:
(i) On the second London Banking Day prior to the Interest Reset
Date for such Series 1995-1 Interest Period (a "LIBOR Determination
Date"), until the principal amount of the Class A-1 Notes and the Class B
Notes is paid in full, the Trustee will determine the arithmetic mean of
the offered rates (rounded upwards to the nearest one sixty-fourth of one
percent (1/64%)) for deposits in U.S. dollars for the period of the Index
Maturity, commencing on such Interest Reset Date, which appear on the
Reuters Screen LIBO Page at approximately 11:00 a.m., London time, on such
LIBOR Determination Date. For purposes of calculating LIBOR, "London
Banking Day" means any business day on which dealings in deposits in
United States dollars are transacted in the London interbank market, and
"Reuters Screen LIBO Page" means the display designated as page "LIBO" on
the Reuters Monitor Money Rates Service (or such other page as may replace
the LIBO page on that service for the purpose of displaying London
interbank offered rates of major banks). If at least two such offered
rates appear on the Reuters Screen LIBO Page, "LIBOR" for such Interest
Period will be the arithmetic mean of such offered rates (rounded upwards
to the nearest one sixty-fourth of one percent (1/64%)) as determined by
the Trustee.
(ii) If fewer than two offered rates appear on the Reuters Screen
LIBO Page on such LIBOR Determination Date, the Trustee will request the
principal London offices of each of four major banks in the London
interbank market selected by the Trustee to provide the Trustee with its
offered quotations for deposits in U.S. dollars for the period of the
Index Maturity, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on such LIBOR Determination Date
and in a principal amount equal to an amount of not less than $250,000
that is representative of a single transaction in such market at such
time. If at least two such quotations are provided, "LIBOR" for such
Interest Period will be the arithmetic mean of such quotations (rounded
upwards to the nearest one sixty-fourth of one percent (1/64%)). If fewer
than two such quotations are provided, "LIBOR" for such Interest
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<PAGE> 20
Period will be the arithmetic mean of rates quoted by three major banks in
The City of New York selected by the Trustee at approximately 11:00 a.m.,
New York City time, on such LIBOR Determination Date for loans in U.S.
dollars to leading European banks, for the period of the Index Maturity,
and in a principal amount equal to an amount of not less than $250,000
that is representative of a single transaction in such market at such
time; provided, however, that if the banks selected as aforesaid by the
Trustee are not quoting rates as mentioned in this sentence, "LIBOR" for
such Interest Period will be the same as LIBOR for the immediately
preceding Interest Period.
"Liquidity Amount" means, with respect to any date of determination,
the product of 1.85% times the Aggregate Principal Balance of the Series 1995-1
Notes outstanding on such date.
"Losses" means, with respect to any Related Month, the sum (without
duplication) of the following: (a) with respect to Acquired Vehicles (i) all
Manufacturer Late Payment Losses, Manufacturer Event of Default Losses and
Purchaser Late Payment Losses for such Related Month, plus (ii) the aggregate
amount of Monthly Base Rent which is not paid within five (5) Business Days
after such Rent is due, plus (iii) with respect to Disposition Proceeds received
during the Related Month from the sale or other disposition of Acquired Vehicles
(other than pursuant to Vehicle Disposition Programs) the excess, if any, of (x)
the Net Book Values of such Acquired Vehicles calculated on the dates of the
respective sales or final dispositions thereof, over (y) the aggregate amount of
such Disposition Proceeds received during the Related Month in respect thereof
by Thrifty Finance, the Master Collateral Agent or the Trustee (including by
deposit into the Collection Account or the Master Collateral Account) plus any
Termination Payments that have accrued with respect to such Vehicles, and (b)
with respect to Financed Vehicles, the aggregate amount of Monthly Base Rent and
Monthly Supplemental Payments which are not paid within five (5) Business Days
after such Rent and such payments, respectively, are due.
"Manufacturer Event of Default Losses" means, with respect to any
Related Month, in the event that a Manufacturer Event of Default occurs with
respect to any Manufacturer, all payments that are required to be made (and not
yet made) by such Manufacturer to Thrifty Finance with respect to Acquired
Vehicles that are either (i) sold at Auction or returned to such Manufacturer
under such Manufacturer's Vehicle Disposition Program, or (ii) subject to an
incentive program of such Manufacturer; provided that the grace or other similar
period for the determination of such Manufacturer Event of Default expires
during such Related Month.
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"Manufacturer Late Payment Losses" with respect to any Related
Month, means all payments required to be made by Manufacturers under such
Manufacturers' Vehicle Disposition Programs and incentive programs with respect
to Acquired Vehicles, which are not made within ninety (90) days after the
related Disposition Dates of such Vehicles and remain unpaid at the end of such
Related Month, but only to the extent that such 90 day periods expire during
such Related Month; provided that any payments considered hereunder shall be net
of amounts that are the subject of a good faith dispute as evidenced in writing
by the Manufacturer questioning the accuracy of the amounts paid or payable in
respect of any such Acquired Vehicles.
"Maximum Manufacturer Percentage" means, with respect to any
Eligible Manufacturer, the percentage amount set forth in Schedule 1 hereto (as
such schedule, subject to Rating Agency confirmation, may be amended, modified
or otherwise supplemented from time to time in accordance with the terms hereof)
specified for each Eligible Manufacturer with respect to Non-Program Vehicles
and Program Vehicles, as applicable, which percentage amount represents the
maximum percentage of Eligible Vehicles which are permitted under the Lease to
be Non-Program Vehicles or Program Vehicles, as the case may be, manufactured by
such Manufacturer.
"Maximum Non-Program Percentage" means, with respect to Non-Program
Vehicles, forty percent (40%) or such other percentage amount agreed upon by the
Lessor and the Lessee, subject to Rating Agency confirmation, which percentage
amount represents the maximum percentage of the Aggregate Asset Amount which is
permitted under the Lease to be invested in Non-Program Vehicles; provided, that
if the average of the Measurement Month Averages for any three Measurement
Months during the twelve month period preceding any date of determination shall
be less than eighty five percent (85%), no additional Non-Program Vehicles may
be leased under the Lease until the Rating Agency Condition has been satisfied.
"Measurement Month" with respect to any date, means, each calendar
month, or the smallest number of consecutive calendar months, preceding such
date in which (a) at least 250 Non-Program Vehicles were sold at Auction and (b)
at least one-twelfth of the aggregate Net Book Value of the Non-Program Vehicles
as of the last day of such calendar month or consecutive calendar months were
sold at Auction; provided that no calendar month included in a Measurement Month
shall be included in any other Measurement Month.
"Measurement Month Average" means, with respect to any Measurement
Month, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount of Disposition Proceeds of all Non-Program Vehicles sold at
auction or otherwise
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<PAGE> 22
during such Measurement Month and the denominator of which is the aggregate Net
Book Value of such Vehicles on the dates of their respective sales.
"Minimum Non-Program Subordinated Percentage" means, with respect to
any date of determination, the greatest of (a) an amount equal to (i) 15.0%
minus (ii) the percentage equivalent of a fraction, the numerator of which shall
be the Class B Invested Amount as of such date and the denominator of which
shall be the sum of (x) the Invested Amount for the Series 1995-1 Notes as of
such date plus (y) the Series 1995-1 Available Subordinated Amount as of such
date, (b) an amount equal to (i) 100% minus (ii) an amount equal (x) to the
lowest Measurement Month Average of any full Measurement Month within the
preceding twelve calendar months minus (y) 10.0%, minus (iii) the percentage
equivalent of a fraction, the numerator of which shall be the Class B Invested
Amount as of such date and the denominator of which shall be the sum of (x) the
Invested Amount for the Series 1995-1 Notes as of such date plus (y) the Series
1995-1 Available Subordinated Amount as of such date, and (c) 12.0%.
"Minimum Program Subordinated Percentage" means, with respect to any
date of determination, the greater of (a) an amount equal to (i) 9.0% minus (ii)
the percentage equivalent of a fraction, the numerator of which shall be the
Class B Invested Amount as of such date and the denominator of which shall be
the sum of (x) the Invested Amount for the Series 1995-1 Notes as of such date
plus (y) the Series 1995-1 Available Subordinated Amount as of such date, and
(b) 7.0%.
"Minimum Subordinated Amount" means, with respect to any date of
determination, the sum of (a) the product of (i) the Minimum Program
Subordinated Percentage, times (ii) a dollar amount equal to (x) the aggregate
Invested Amount for the Series 1995-1 Notes minus the product of (A) the
aggregate amount of cash and Permitted Investments in the Collection Account
and, to the extent cash and Permitted Investments in the Master Collateral
Account are allocable to the Trustee as Beneficiary pursuant to the Master
Collateral Agency Agreement and are not distributable to or at the direction of
Thrifty pursuant thereto, cash and Permitted Investments in the Master
Collateral Account, as of such date, times (B) a fraction, the numerator of
which shall be the Invested Amount for the Series 1995-1 Notes as of such date
and the denominator of which shall be the greater of (I) the Aggregate Asset
Amount as of such date and (II) the sum of the Invested Amounts for all Series
of Notes as of such date, divided by (y) an amount equal to 100% minus the
Minimum Program Subordinated Percentage as of such date, times (iii) a fraction,
the numerator of which is the aggregate Net Book Value of all Program Vehicles
as of such date and the denominator of which is the aggregate Net Book Value of
all Program Vehicles and Non-Program Vehicles as of such date, plus (b) the
product of (i) the
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<PAGE> 23
Minimum Non-Program Subordinated Percentage, times (ii) a dollar amount equal to
(x) the aggregate Invested Amount for the Series 1995-1 Notes as of such date,
minus the product of (A) the aggregate amount of cash and Permitted Investments
in the Collection Account and the Master Collateral Account as of such date,
times (B) a fraction, the numerator of which shall be the Invested Amount for
the Series 1995-1 Notes as of such date and the denominator of which shall be
the greater of (I) the Aggregate Asset Amount as of such date and (II) the sum
of the Invested Amounts for all Series of Notes as of such date, divided by (y)
an amount equal to 100% minus the Minimum Non-Program Subordinated Percentage as
of such date, times (iii) a fraction, the numerator of which is the aggregate
Net Book Value of all Non-Program Vehicles as of such date and the denominator
of which is the aggregate Net Book Value of all Program Vehicles and Non-
Program Vehicles as of such date.
"Monthly Total Principal Allocation" means the sum of all Series
1995-1 Principal Allocations with respect to a Related Month.
"Note Purchase Agreement" means the Note Purchase Agreement dated
December 13, 1995 among Thrifty Finance, Thrifty and the Initial Purchasers
pursuant to which each of the Initial Purchasers agrees to purchase the Notes
from Thrifty Finance, subject to the terms and conditions set forth therein.
"Permanent Global Class A Notes" has the meaning specified in
Section 6.1(b) of this Supplement.
"Permanent Global Class A-1 Note" has the meaning specified in
Section 6.1(b) of this Supplement.
"Permanent Global Class A-2 Note" has the meaning specified in
Section 6.1(b) of this Supplement.
"Permanent Global Class B Notes" has the meaning specified in
Section 6.2(b) of this Supplement.
"Permanent Global Class B-1 Note" has the meaning specified in
Section 6.2(b) of this Supplement.
"Permanent Global Class B-2 Note" has the meaning specified in
Section 6.2(b) of this Supplement.
"Pool Factor" means, on any Determination Date, (a) with respect to
the Class A-1 Notes, a number carried out to eight decimals representing the
ratio of the Class A-1 Invested Amount as of such date (determined after taking
into account any decreases in the Class A-1 Invested Amount which will occur on
the following Payment Date) to the Class A-1 Initial Invested Amount, (b) with
respect to the Class A-2 Notes, a number carried
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<PAGE> 24
out to eight decimals representing the ratio of the Class A-2 Invested Amount as
of such date (determined after taking into account any decreases in the Class
A-2 Invested Amount which will occur on the following Payment Date) to the Class
A-2 Initial Invested Amount, (c) with respect to the Class B-1 Notes, a number
carried out to eight decimals representing the ratio of the Class B-1 Invested
Amount as of such date (determined after taking into account any decreases in
the Class B-1 Invested Amount which will occur on the following Payment Date) to
the Class B-1 Initial Invested Amount and (d) with respect to the Class B-2
Notes, a number carried out to eight decimals representing the ratio of the
Class B-2 Invested Amount as of such date (determined after taking into account
any decreases in the Class B-2 Invested Amount which will occur on the following
Payment Date) to the Class B-2 Initial Invested Amount.
"Purchaser Late Payment Losses" means, with respect to any Related
Month, all payments required to be made by any person or entity in connection
with the sale or other final disposition of Acquired Vehicles which are not made
sixty (60) days after such payments are due, provided that such sixty (60) day
periods expire during such Related Month.
"Rating Agencies" means, with respect to the Series 1995-1 Notes,
Standard & Poor's and Fitch.
"Recoveries" means, with respect to any Related Month, the sum
(without duplication) of (i) all amounts received by Thrifty Finance, the Master
Collateral Agent or the Trustee (including by deposit into the Collection
Account or the Master Collateral Account) from any Person during such Related
Month in respect of Losses, plus (ii) the excess, if any, of (x) the aggregate
amount of Disposition Proceeds received during such Related Month by Thrifty
Finance, the Master Collateral Agent or the Trustee (including by deposit into
the Collection Account or the Master Collateral Account) and resulting from the
sale or other final disposition of Acquired Vehicles (other than pursuant to
Vehicle Disposition Programs) plus any Termination Payments that have accrued
with respect to such Vehicles over (y) the Net Book Values of such Vehicles,
calculated on the dates of the respective sales or dispositions thereof.
"Repurchase Date" has the meaning specified in Section 7.1(a) of
this Supplement.
"Repurchase Price" has the meaning specified in Section 7.1(b) of
this Supplement.
"Requisite Class A Noteholders" means Class A Noteholders holding
25% or more of the Class A Invested Amount.
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<PAGE> 25
"Retained Interest Percentage" means, on any date of determination,
when used with respect to Principal Collections, Recoveries and Losses, an
amount equal to one hundred percent minus the sum of (i) the invested
percentages for all outstanding Series of Notes and all classes of such Series
of Notes and (ii) the available subordinated amount percentages for all Series
of Notes that provide for credit enhancement in the form of
overcollateralization, in each case as such percentages are calculated on such
date with respect to Principal Collections, Recoveries or Losses, as applicable.
"Restricted Global Class A Notes" has the meaning specified in
Section 6.1(a) of this Supplement.
"Restricted Global Class A-1 Note" has the meaning specified in
Section 6.1(a) of this Supplement.
"Restricted Global Class A-2 Note" has the meaning specified in
Section 6.1(a) of this Supplement.
"Restricted Global Class B Notes" has the meaning specified in
Section 6.2(a) of this Supplement.
"Restricted Global Class B-1 Note" has the meaning specified in
Section 6.2(a) of this Supplement.
"Restricted Global Class B-2 Note" has the meaning specified in
Section 6.2(a) of this Supplement.
"Series 1995-1 Accrued Interest Account" has the meaning specified
in Section 4.6(c) of the Base Indenture.
"Series 1995-1 Available Subordinated Amount" means, for any date of
determination, an amount equal to (a) the Series 1995-1 Available Subordinated
Amount for the preceding Determination Date, minus (b) the Series 1995-1
Available Subordinated Amount Incremental Losses for the Related Month, plus (c)
the Series 1995-1 Available Subordinated Amount Incremental Recoveries for the
Related Month, plus (d) additional amounts, if any, contributed by Thrifty
Finance since the preceding Determination Date (or in the case of the first
Determination Date, since the Series 1995-1 Closing Date) to the Series 1995-1
Excess Funding Account for allocation to the Series 1995-1 Available
Subordinated Amount, plus (e) the aggregate Net Book Value of additional
Eligible Vehicles contributed by Thrifty since the preceding Determination Date
(or in the case of the first Determination Date, since the Series 1995-1 Closing
Date) as Master Collateral for allocation to the Series 1995-1 Available
Subordinated Amount pursuant to Section 4.7(d)(E), minus (f) any amounts
withdrawn from the Series 1995-1 Excess Funding Account since the preceding
Determination Date (or in the case of the first Determination Date, since the
Series 1995-1
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<PAGE> 26
Closing Date) for allocation to the Retained Distribution Account. The "Series
1995-1 Available Subordinated Amount" for the Series 1995-1 Closing Date through
the first Determination Date shall mean $35,000,000.
"Series 1995-1 Available Subordinated Amount Incremental Losses"
means, for any Related Month, the sum of all Losses that became Losses during
such Related Month and which were allocated to the Series 1995-1 Available
Subordinated Amount.
"Series 1995-1 Available Subordinated Amount Incremental Recoveries"
means, for any Related Month, the sum of all Recoveries that became Recoveries
during such Related Month and which were allocated to the Series 1995-1
Available Subordinated Amount.
"Series 1995-1 Available Subordinated Amount Maximum Increase" shall
mean 1.1% of the sum of (x) the total of the Invested Amounts of all the
outstanding Series of Notes plus (y) the sum of the minimum subordinated amounts
of all the outstanding Series of Notes that provide for credit enhancement in
the form of overcollateralization; provided, however, that if (i) a Series
1995-1 Subordination Deficiency arises out of any Losses and (ii) the Rating
Agencies shall have notified Thrifty Finance and the Trustee in writing that
after cure of such Series 1995-1 Subordination Deficiency is provided for, the
Class A Notes and the Class B Notes will each receive the same rating from the
Rating Agencies as they received prior to the occurrence of such Series 1995-1
Subordination Deficiency, then the Series 1995-1 Available Subordinated Amount
Maximum Increase applicable to the cure of such Series 1995-1 Subordination
Deficiency shall not be limited in amount.
"Series 1995-1 Available Subordinated Amount Percentage" means, on
any date of determination:
(a) when used with respect to Principal Collections during the
Series 1995-1 Revolving Period, the percentage equivalent of a fraction,
the numerator of which shall be equal to the Series 1995-1 Available
Subordinated Amount as of the end of the second preceding Related Month
or, until the end of the second Related Month, on the Series 1995-1
Closing Date and the denominator of which shall be the greater of (A) the
Aggregate Asset Amount as of the end of the second preceding Related Month
or, until the end of the second Related Month, as of the Series 1995-1
Closing Date, and (B) as of the same date as in clause (A), the sum of the
numerators used to determine (i) invested percentages for allocations with
respect to Principal Collections (for all Series of Notes and all classes
of such Series of Notes) and (ii) available subordinated amount
percentages for
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<PAGE> 27
allocations with respect to Principal Collections (for all Series of Notes
that provide for credit enhancement in the form of overcollateralization);
(b) when used with respect to Principal Collections during the
Series 1995-1 Controlled Amortization Period and the Series 1995-1 Rapid
Amortization Period, the percentage equivalent of a fraction, the
numerator of which shall be the Series 1995-1 Available Subordinated
Amount as of the end of the Series 1995-1 Revolving Period relating to the
Series 1995-1 Notes then in amortization, and the denominator of which
shall be the greater of (A) the Aggregate Asset Amount as of the end of
the second preceding Related Month and (B) as of the same date as in
clause (A), the sum of the numerators used to determine (i) invested
percentages for allocations with respect to Principal Collections (for all
Series of Notes and all classes of such Series of Notes) and (ii)
available subordinated amount percentages for allocations with respect to
Principal Collections (for all Series of Notes that provide for credit
enhancement in the form of overcollateralization);
(c) when used with respect to Recoveries, the percentage
equivalent of a fraction, the numerator of which shall be the cumulative
amount of all unreimbursed Losses allocated to the Series 1995-1 Available
Subordinated Amount as of the end of the second preceding Related Month
and the denominator of which shall be the cumulative amount of all
unreimbursed Losses for the Noteholders of all Series of Notes and the
Retained Interestholder (including all unreimbursed Losses in respect of
available subordinated amounts, if any, for all Series) as of the end of
such second preceding Related Month; and
(d) when used with respect to Losses, the percentage
equivalent of a fraction, the numerator of which shall be the Series
1995-1 Available Subordinated Amount as of the end of the second preceding
Related Month and the denominator of which shall be the greater of (A) the
Aggregate Asset Amount as of the end of the second preceding Related Month
or, until the end of the second Related Month, as of the Series 1995-1
Closing Date, and (B) as of the same date as in clause (A), the sum of the
numerators used to determine (i) invested percentages for allocations with
respect to Losses for all Series of Notes and all classes of such Series
of Notes and (ii) available subordinated amount percentages for
allocations with respect to Losses (for all Series of Notes that provide
for credit enhancement in the form of overcollateralization).
"Series 1995-1 Closing Date" means December 21, 1995.
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"Series 1995-1 Collection Account" has the meaning specified in
Section 4.6(b) of the Base Indenture.
"Series 1995-1 Controlled Amortization Period" means any or all of
the Class A-1 Controlled Amortization Period, the Class A-2 Controlled
Amortization Period, the Class B-1 Controlled Amortization Period and the Class
B-2 Controlled Amortization Period, as the context requires.
"Series 1995-1 Deposit Date" has the meaning specified in Section
4.7 of the Base Indenture.
"Series 1995-1 Excess Funding Account" has the meaning specified in
"Section 4.6(b) of the Base Indenture.
"Series 1995-1 Interest Period" means a period from a Payment Date
to the next succeeding Payment Date; provided, however, that the initial Series
1995-1 Interest Period shall be from the Series 1995-1 Closing Date to the
initial Payment Date.
"Series 1995-1 Limited Liquidation Event of Default" means, so long
as such event or condition continues, any event or condition of the type
specified in Section 4.1 of this Supplement that continues for thirty (30) days
(without double counting the five (5) Business Day cure period provided for in
said Section 4.1); provided, however, that such event or condition shall not
constitute a Series 1995-1 Limited Liquidation Event of Default if (i) within
such thirty (30) day period, Thrifty Finance shall have contributed a portion of
the Retained Interest or reallocated Eligible Vehicles from the Retained
Interest to the Series 1995-1 Available Subordinated Amount in accordance with
Section 4.7(d)(E) sufficient to cure the Series 1995-1 Subordination Deficiency
and (ii) the Rating Agencies shall have notified Thrifty Finance, Thrifty and
the Trustee in writing that after such cure of such Series 1995-1 Subordination
Deficiency is provided for, the Class A Notes and the Class B Notes will each
receive the same rating from the Rating Agencies as they received prior to the
occurrence of such Series 1995-1 Subordination Deficiency.
"Series 1995-1 Monthly Servicing Fee" means the sum of (a) the Class
A Investor Monthly Servicing Fee, plus (b) the Class B Investor Monthly
Servicing Fee, plus (c) the Class A Monthly Supplemental Servicing Fee, plus (d)
the Class B Monthly Supplemental Servicing Fee.
"Series 1995-1 Note Prepayment Premium" has the meaning specified in
Section 7.1(c) of this Supplement.
"Series 1995-1 Noteholders" means the Class A Noteholders and the
Class B Noteholders.
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"Series 1995-1 Notes" has the meaning specified in the first
paragraph of Article 1 of this Supplement.
"Series 1995-1 Principal Allocation" has the meaning specified in
Section 4.7(a)(x)(ii) of the Base Indenture.
"Series 1995-1 Rapid Amortization Period" means the period beginning
at the close of business on the Business Day immediately preceding the day on
which an Amortization Event is deemed to have occurred with respect to the
Series 1995-1 Notes and ending upon the earliest to occur of (i) the date on
which the Series 1995-1 Notes are fully paid, (ii) the Series 1995-1 Termination
Date and (iii) the termination of the Indenture.
"Series 1995-1 Revolving Period" means, with respect to any class of
the Series 1995-1 Notes, the period from and including the Series 1995-1 Closing
Date to the earlier of (i) the commencement of the Series 1995-1 Controlled
Amortization Period related to such class of Notes and (ii) the commencement of
the Series 1995-1 Rapid Amortization Period.
"Series 1995-1 Subordination Deficiency" means, with respect to any
date of determination, calculated on each Business Day, the amount, if any, by
which the Minimum Subordinated Amount exceeds the Series 1995-1 Available
Subordinated Amount.
"Series 1995-1 Termination Date" means, with respect to the Class
A-1 Notes and B-1 Notes, the November 1999 Payment Date, and with respect to the
Class A-2 Notes and the Class B-2 Notes, the August 2001 Payment Date.
"Temporary Global Class A Notes" has the meaning specified in
Section 6.1(b) of this Supplement.
"Temporary Global Class A-1 Note" has the meaning specified in
Section 6.1(b) of this Supplement.
"Temporary Global Class A-2 Note" has the meaning specified in
Section 6.1(b) of this Supplement.
"Temporary Global Class B Notes" has the meaning specified in
Section 6.2(b) of this Supplement.
"Temporary Global Class B-1 Note" has the meaning specified in
Section 6.2(b) of this Supplement.
"Temporary Global Class B-2 Note" has the meaning specified in
Section 6.2(b) of this Supplement.
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"Waiver Deficiency" means, as of the applicable Consent Period
Expiration Date, an amount, if greater than zero, calculated in accordance with
the following formula:
(CA*B) + (CA*MSA) - (CB*A) - (ASA*A)
Waiver Deficiency = ____________________________________________________
B + MSA
where "A" refers to the Class A Invested Amount, "B" refers to the Class B
Invested Amount, "MSA" refers to the Minimum Subordinated Amount, "CA" refers to
the invested amount of the Notes of the consenting Class A Noteholders, "CB"
refers to the invested amount of the Notes of the consenting Class B Noteholders
and "ASA" refers to the Series 1995-1 Available Subordinated Amount, in each
case as of such Consent Period Expiration Date.
"Waiver Event" means the occurrence of the delivery of a Change of
Percentage Notice and the subsequent waiver of the Maximum Non-Program
Percentage and/or the Maximum Manufacturer Percentage, as applicable, in
accordance with the provisions of Article 5 of this Supplement.
ARTICLE 3
ARTICLE 4 OF BASE INDENTURE
Any provisions of Article 4 of the Base Indenture which allocate and
apply Collections shall continue to apply irrespective of the issuance of the
Series 1995-1 Notes. Sections 4.1 through 4.5 of the Base Indenture shall be
read in their entirety as provided in the Base Indenture. Article 4 of the Base
Indenture (except for Sections 4.1 through 4.5 thereof) shall read in its
entirety as follows and shall be applicable only to the Series 1995-1 Notes.
ARTICLE 4
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.6. Establishment of Series 1995-1 Collection Account,
Series 1995-1 Excess Funding Account, and Series 1995-1 Accrued Interest
Account.
(a) All Collections allocable to the Class A Notes, the Class
B Notes and the Series 1995-1 Available Subordinated Amount shall be
allocated to the Collection Account.
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(b) The Trustee will create two administrative sub-accounts
within the Collection Account. One sub-account will be established for the
benefit of the Series 1995-1 Noteholders (such sub-account, the "Series
1995-1 Collection Account"); the other sub-account will be established for
the benefit of the Series 1995-1 Noteholders and the Retained
Interestholder (such sub-account, the "Series 1995-1 Excess Funding
Account").
(c) The Trustee will further divide the Series 1995-1
Collection Account by creating an additional administrative sub-account
for the Series 1995-1 Noteholders (such sub-account, the "Series 1995-1
Accrued Interest Account").
Section 4.7. Allocations with Respect to the Series 1995-1 Notes.
The proceeds from the sale of the Series 1995-1 Notes, together with any funds
deposited with Thrifty Finance by Thrifty, will, on the Series 1995-1 Closing
Date, be deposited as Collections into the Collection Account and, concurrently
with such initial deposit, allocated by the Trustee to the Series 1995-1 Excess
Funding Account. On each Business Day on which Collections are deposited into
the Series 1995-1 Collection Account (each such date, a "Series 1995-1 Deposit
Date"), the Servicer will direct the Trustee in writing to allocate all amounts
deposited into the Series 1995-1 Collection Account in accordance with the
provisions of this Section 4.7:
(a) Allocations During the Revolving Period. During the Series
1995-1 Revolving Period, the Servicer will direct the Trustee to allocate, prior
to 3:00 p.m. (New York City time) on each Series 1995-1 Deposit Date, all
amounts deposited into the Collection Account as set forth below:
(x) with respect to all Collections (including Recoveries, all
of which Recoveries shall be treated as Principal Collections):
(i) allocate to the Series 1995-1 Collection Account an
amount equal to the sum of (A) the Class A Invested Percentage
(as of such day) of the aggregate amount of Interest
Collections on such day, plus (B) the Class B Invested
Percentage (as of such day) of the aggregate amount of
Interest Collections on such day. All such amounts allocated
to the Series 1995-1 Collection Account shall be further
allocated to the Series 1995-1 Accrued Interest Account;
provided, however, that if with respect to any Related Month
the aggregate of all such amounts allocated to the Series
1995-1 Accrued Interest Account
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during such Related Month exceeds the amount of interest and
fees due and payable in respect of the Series 1995-1 Notes on
the Payment Date next succeeding such Related Month pursuant
to Sections 4.8(a), (b), and (c), then the amount of such
excess shall be allocated to the Series 1995-1 Excess Funding
Account;
(ii) allocate to the Series 1995-1 Excess Funding
Account an amount equal to the sum of (A) the Class A Invested
Percentage (as of such day) of the aggregate amount of
Principal Collections on such day, plus (B) the Class B
Invested Percentage (as of such day) of the aggregate amount
of Principal Collections on such day, plus (C) the Series
1995-1 Available Subordinated Amount Percentage (as of such
day) of the aggregate amount of Principal Collections on such
day (for any such day, the sum of (A), (B), and (C) the
"Series 1995-1 Principal Allocation"); provided, however, that
if a Waiver Event shall have occurred, then such allocation
shall be modified as provided in Article 5 of the Supplement;
and
(iii) allocate to the Retained Distribution Account an
amount equal to (x) the applicable Retained Interest
Percentage (as of such day) of the aggregate amount of
Principal Collections on such date, minus (y) any amounts,
other than Servicing Fees, which have been withheld by the
Servicer pursuant to Section 4.2(c) to the extent such amounts
withheld under Section 4.2(c) represent all or part of the
Retained Amount;
(y) with respect to all Recoveries:
(i) increase the Class A-1 Invested Amount, the Class
A-2 Invested Amount, the Class B-1 Invested Amount, the Class
B-2 Invested Amount and the Series 1995-1 Available
Subordinated Amount by an amount equal to the sum of (A) the
Class A Invested Percentage (as of such day) of the aggregate
amount of Recoveries on such day, plus (B) the Class B
Invested Percentage (as of such day) of the aggregate amount
of Recoveries on such day, plus (C) the Series 1995-1
Available Subordinated Amount Percentage (as of such day) of
the aggregate amount of Recoveries on such day, which amount
shall be applied first, to replenish the Class A-1 Invested
Amount and the Class A-2
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Invested Amount, on a pro rata basis (to the extent that the
Class A-1 Invested Amount and the Class A-2 Invested Amount
have theretofore been reduced as a result of any Losses
allocated thereto pursuant to clause (z) below and not
replenished pursuant to this clause (y)); second, to replenish
the Class B-1 Invested Amount and the Class B-2 Invested
Amount, on a pro rata basis (to the extent that the Class B-1
Invested Amount and the Class B-2 Invested Amount have
theretofore been reduced as a result of any Losses allocated
thereto pursuant to clause (z) below and not replenished
pursuant to this clause (y)); and, third, to replenish the
Series 1995-1 Available Subordinated Amount (to the extent
that the Series 1995-1 Available Subordinated Amount has
theretofore been reduced as a result of any Losses allocated
thereto pursuant to clause (z) below and not replenished
pursuant to this clause (y)); and
(ii) allocate to the Retained Amount an amount equal to
the Retained Interest Percentage (as of such day) of the
aggregate amount of Recoveries on such date (to the extent
that the Retained Amount has theretofore been reduced as a
result of any Losses allocated thereto pursuant to clause (z)
below and not replenished pursuant to this clause (y));
(z) with respect to all Losses:
(i) decrease the Class A-1 Invested Amount, the Class
A-2 Invested Amount, the Class B-1 Invested Amount, the Class
B-2 Invested Amount and the Series 1995-1 Available
Subordinated Amount by an amount equal to the sum of (A) the
Class A Invested Percentage (as of such day) of the aggregate
amount of Losses on such day, plus (B) the Class B Invested
Percentage (as of such day) of the aggregate amount of Losses
on such day, plus (C) the Series 1995-1 Available Subordinated
Amount Percentage (as of such day) of the aggregate amount of
Losses on such day, which amount shall reduce the Series
1995-1 Available Subordinated Amount and, if the Series 1995-1
Available Subordinated Amount has been reduced to zero, shall
reduce the Class B-1 Invested Amount and the Class B-2
Invested Amount on a pro rata basis and, if the Class B-1
Invested Amount and the Class B-2 Invested Amount have been
reduced to zero, shall reduce the Class A-1 Invested Amount
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and the Class A-2 Invested Amount on a pro rata
basis; and
(ii) allocate to the Retained Amount an amount equal to
the Retained Interest Percentage (as of such day) of the
aggregate amount of such Losses on such day, which amount
shall reduce the Retained Amount.
(b) Allocations During the Series 1995-1 Controlled Amortization
Period. During the Series 1995-1 Controlled Amortization Period, the Servicer
will direct the Trustee to allocate, prior to 3:00 p.m. (New York City time) on
each Series 1995-1 Deposit Date, the following amounts as set forth below:
(x) with respect to all Collections (including Recoveries, all
of which Recoveries shall be treated as Principal Collections):
(i) allocate to the Series 1995-1 Collection Account an
amount determined as set forth in Section 4.7(a)(x)(i) above
for such day, which amount shall be deposited in the Series
1995-1 Accrued Interest Account and, as to the extent provided
in Section 4.7(a)(x)(i) above, allocated to the Series 1995-1
Excess Funding Account;
(ii) (A) during the Class A-1 Controlled Amortization
Period, allocate to the Series 1995-1 Collection Account an
amount equal to the Series 1995-1 Principal Allocation for
such day, which amount shall be used to make principal
payments in respect of the Class A-1 Notes; provided, however,
that if the Monthly Total Principal Allocation exceeds the
Class A-1 Controlled Distribution Amount for the Related Month
such excess shall be allocated to the Series 1995-1 Excess
Funding Account; provided, further, that if a Waiver Event has
theretofore occurred, then such allocation shall be modified
as provided under Article 5 of the Supplement, (B) during the
Class A-2 Controlled Amortization Period, allocate to the
Series 1995-1 Collection Account an amount equal to the Series
1995-1 Principal Allocation for such day, which amount shall
be used to make principal payments in respect of the Class A-2
Notes; provided, however, that if the Monthly Total Principal
Allocation exceeds the Class A-2 Controlled Distribution
Amount for the Related Month, then such excess shall be
allocated to the Series 1995-1 Excess Funding Account;
provided, further, that if a Waiver Event has theretofore
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occurred, then such allocation shall be modified as provided
under Article 5 of the Supplement, (C) during the Class B-1
Controlled Amortization Period, allocate to the Series 1995-1
Collection Account an amount equal to the Series 1995-1
Principal Allocation for such day, which amount shall be used
to make principal payments in respect to the Class B-1 Notes;
provided, however, that if the Monthly Total Principal
Allocation exceeds the Class B-1 Controlled Distribution
Amount, then such excess shall be allocated to the Series
1995-1 Excess Funding Account for the Related Month; provided,
further, that if a Waiver Event has theretofore occurred, then
such allocation shall be modified as provided in Article 5 of
the Supplement, and (D) during the Class B-2 Controlled
Amortization Period, allocate to the Series 1995-1 Collection
Account an amount equal to the Series 1995-1 Principal
Allocation for such day which amount shall be used to make
principal payments in respect of the Class B-2 Notes;
provided, however, that if the Monthly Total Principal
Allocation exceeds the Class B-2 Controlled Distribution
Amount for the Related Month, then such excess will be
allocated to the Series 1995-1 Excess Funding Account;
provided, further, however, if a Waiver Event has theretofore
occurred, then such allocation shall be modified as provided
in Article 5 of the Supplement; and
(iii) allocate to the Retained Distribution Account an
amount determined as set forth in Section 4.7(a)(x)(iii) above
for such day;
(y) with respect to all Recoveries:
(i) increase the Class A-1 Invested Amount, the Class
A-2 Invested Amount, the Class B-1 Invested Amount, the Class
B-2 Invested Amount and the Series 1995-1 Available
Subordinated Amount by an amount equal to the sum of (A) the
Class A Invested Percentage (as of such day) of the aggregate
amount of Recoveries on such day, plus (B) the Class B
Invested Percentage (as of such day) of the aggregate amount
of Recoveries on such day, plus (C) the Series 1995-1
Available Subordinated Amount Percentage (as of such day) of
the aggregate amount of Recoveries on such day, which amount
shall be applied first, to replenish the Class A-1 Invested
Amount and the Class A-2 Invested Amount, on a pro rata basis
(to the
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extent that the Class A-1 Invested Amount and the Class A-2
Invested Amount have theretofore been reduced as a result of
any Losses allocated thereto pursuant to clause (z) below and
not replenished pursuant to this clause (y); second, to
replenish the Class B-1 Invested Amount and the Class B-2
Invested Amount on a pro rata basis (to the extent that the
Class B-1 Invested Amount and the Class B-2 Invested Amount
have theretofore been reduced as a result of any Losses
allocated thereto pursuant to clause (z) below and not
replenished pursuant to this clause (y)); and, third, to
replenish the Series 1995-1 Available Subordinated Amount (to
the extent that the Series 1995-1 Available Subordinated
Amount has theretofore been reduced as a result of any Losses
allocated thereto pursuant to clause (z) below and not
replenished pursuant to this clause (y)); and
(ii) allocate to the Retained Amount an amount equal to
the Retained Interest Percentage (as of such day) of the
aggregate amount of Recoveries on such date (to the extent
that the Retained Amount has theretofore been reduced as a
result of any Losses allocated thereto as described in clause
(z) below);
(z) with respect to all Losses:
(i) decrease the Class A-1 Invested Amount, the Class
A-2 Invested Amount, the Class B-1 Invested Amount, the Class
B-2 Invested Amount and the Series 1995-1 Available
Subordinated Amount by an amount equal to the sum of (A) the
Class A Invested Percentage (as of such day) of the aggregate
amount of Losses on such day, plus (B) the Class B Invested
Percentage (as of such day) of the aggregate amount of Losses
on such day, plus (C) the Series 1995-1 Available Subordinated
Amount Percentage (as of such day) of the aggregate amount of
Losses on such day, which amount shall reduce the Series
1995-1 Available Subordinated Amount and, if the Series 1995-1
Available Subordinated Amount has been reduced to zero, shall
reduce the Class B-1 Invested Amount and the Class B-2
Invested Amount on a pro rata basis and, if the Class B-2
Invested Amount and the Class B-2 Invested Amount have been
reduced to zero, shall reduce the Class A-1 Invested Amount
and the Class A-2 Invested Amount on a pro rata basis; and
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(ii) allocate to the Retained Amount an amount
determined as set forth in Section 4.7(a)(z)(ii) above for
such day, which amount shall reduce the Retained Amount.
(c) Allocations During the Series 1995-1 Rapid Amortization Period.
With respect to the Series 1995-1 Rapid Amortization Period, the Servicer will
direct the Trustee to allocate, prior to 3:00 p.m. (New York City time) on each
Series 1995-1 Deposit Date, the following amounts as set forth below:
(x) with respect to all Collections (including Recoveries, all
of which Recoveries shall be treated as Principal Collections):
(i) allocate to the Series 1995-1 Collection Account an
amount determined as set forth in Section 4.7(a)(x)(i) above
for such day, which amount shall be deposited in the Series
1995-1 Accrued Interest Account and, as and to the extent
provided in Section 4.7(a)(x)(i) above, allocated to the
Series 1995-1 Excess Funding Account;
(ii) allocate to the Series 1995-1 Collection Account an
amount equal to the Series 1995-1 Principal Allocation for
such day, which amount shall be used to make principal
payments on a pro rata basis in respect of the Class A Notes
and, after the Class A Notes have been paid in full, shall be
used to make principal payments in respect of the Class B
Notes; and
(iii) allocate to the Retained Distribution Account an
amount determined as set forth in Section 4.7(a)(x)(iii) above
for such day;
(y) with respect to all Recoveries:
(i) increase the Class A-1 Invested Amount, the Class
A-2 Invested Amount, the Class B-1 Invested Amount, the Class
B-2 Invested Amount and the Series 1995-1 Available
Subordinated Amount by an amount equal to the sum of (A) the
Class A Invested Percentage (as of such day) of the aggregate
amount of Recoveries on such day, plus (B) the Class B
Invested Percentage (as of such day) of the aggregate amount
of Recoveries on such day, plus (C) the Series 1995-1
Available Subordinated Amount Percentage (as of such day) of
the aggregate amount of Recoveries on such day, which amount
shall be applied first, to replenish the Class A-1 Invested
Amount and the Class A-2
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Invested Amount on a pro rata basis (to the extent that the
Class A-1 Invested Amount and the Class A-2 Invested Amount
have theretofore been reduced as a result of any Losses
allocated thereto pursuant to clause (z) below and not
replenished pursuant to this clause (y)); second, to replenish
the Class B-1 Invested Amount and the Class B-2 Invested
Amount on a pro rata basis (to the extent that the Class B-1
Invested Amount and the Class B-2 Invested Amount have
theretofore been reduced as a result of any Losses allocated
thereto pursuant to clause (z) below and not replenished
pursuant to this clause (y)), and, third, to replenish the
Series 1995-1 Available Subordinated Amount (to the extent
that the Series 1995-1 Available Subordinated Amount has
theretofore been reduced as a result of any Losses allocated
thereto pursuant to clause (z) below and not replenished
pursuant to this clause (y)); and
(ii) allocate to the Retained Amount an amount equal to
the Retained Interest Percentage (as of such day) of the
aggregate amount of Recoveries on such date (to the extent
that the Retained Amount has theretofore been reduced as a
result of any Losses allocated thereto as described in clause
(z) below and not replenished pursuant to this clause (y); and
(z) with respect to all Losses:
(i) decrease the Class A-1 Invested Amount, the Class
A-2 Invested Amount, the Class B-1 Invested Amount, the Class
B-2 Invested Amount and the Series 1995-1 Available
Subordinated Amount by an amount equal to the sum of (A) the
Class A Invested Percentage (as of such day) of the aggregate
amount of Losses on such day, plus (B) the Class B Invested
Percentage (as of such day) of the aggregate amount of Losses
on such day, plus (C) the Series 1995-1 Available Subordinated
Amount Percentage (as of such day) of the aggregate amount of
Losses on such day, which amount shall reduce the Series
1995-1 Available Subordinated Amount and, if the Series 1995-1
Available Subordinated Amount has been reduced to zero, shall
reduce the Class B-1 Invested Amount and the Class B-2
Invested Amount on a pro rata basis and, if the Class B-1
Invested Amount and the Class B-2 Invested Amount been reduced
to zero, shall reduce the Class A-1 Invested Amount
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and the Class A-2 Invested Amount on a pro rata
basis; and
(ii) allocate to the Retained Amount an amount
determined as set forth in Section 4.7(a)(z)(ii) above for
such day, which amount shall reduce the Retained Amount.
(d) Additional Allocations. Notwithstanding the foregoing provisions
of this Section 4.7,
(A) amounts in excess of the Liquidity Amount allocated to the
Series 1995-1 Excess Funding Account that are not required to make
payments under the Series 1995-1 Notes pursuant hereto may, as and to the
extent permitted in the related Supplements, be used to pay the principal
amount of other Series of Notes that are then in amortization and, after
such payment, any remaining funds in excess of the Liquidity Amount may,
at Thrifty Finance's option, be (i) used to finance or acquire Vehicles,
to the extent Eligible Vehicles have been requested by the Lessee or (ii)
transferred, on any Payment Date, to the Retained Distribution Account, to
the extent that the Retained Amount equals or exceeds zero after giving
effect to such payment and so long as no Series 1995-1 Subordination
Deficiency or Asset Amount Deficiency exists or would result therefrom;
provided, however, that funds in excess of the Liquidity Amount may be
transferred to the Retained Distribution Account on a day other than a
Payment Date if the Servicer furnishes to the Trustee an Officer's
Certificate to the effect that such transfer will not cause any of the
foregoing deficiencies to occur either on the date that such transfer is
made or, in the reasonable anticipation of the Servicer, on the next
Payment Date. Funds in the Retained Distribution Account shall, at the
option of Thrifty Finance, be available to finance or acquire Vehicles, to
the extent Eligible Vehicles have been requested by the Lessee, or for
distribution to the Retained Interestholder (including any advances made
under the Demand Note);
(B) in the event that the Servicer is not Thrifty or an Affiliate of
Thrifty, the Servicer shall not be entitled to withhold any amounts
pursuant to Section 4.2(c) and the Trustee shall deposit amounts payable
to Thrifty in the Collection Account pursuant to the provisions of Section
4.2 on each Series 1995-1 Deposit Date;
(C) any amounts withheld by the Servicer and not deposited in the
Collection Account pursuant to Section 4.2(c) shall be deemed to be
deposited in the Collection Account on the date such amounts are withheld
for
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purposes of determining the amounts to be allocated pursuant
to this Section 4.7;
(D) if there is more than one Series of Notes outstanding, then
Sections 4.7(a)(x)(iii), 4.7(b)(x)(iii) and 4.7(c)(x)(iii) above shall not
be duplicative with any similar provisions contained in any other
Supplement and the Retained Interestholder shall only be paid such amount
once with respect to any Payment Date; and
(E) Thrifty Finance may, from time to time in its sole discretion,
increase the Series 1995-1 Available Subordinated Amount by (a) (i)
allocating to the Series 1995-1 Available Subordinated Amount Eligible
Vehicles theretofore allocated to the Retained Interest and (ii)
delivering to the Trustee an Officer's Certificate affirming with respect
to such Vehicles the representations and warranties set forth in Section
6.14 (and an Opinion of Counsel to the same effect) or (b) (i) depositing
funds into the Series 1995-1 Excess Funding Account by transfer from the
Retained Distribution Account or otherwise, and (ii) delivering to the
Servicer and the Trustee an Officers' Certificate setting forth the amount
of such funds and stating that such funds shall be allocated to the Series
1995-1 Available Subordinated Amount; provided, however, that (x) Thrifty
Finance shall have no obligation to so increase the Series 1995-1
Available Subordinated Amount at any time and (y) Thrifty Finance may not
increase the Series 1995-1 Available Subordinated Amount at any time if
the amount of such increase, together with the sum of the amounts of all
prior increases, if any, of the Series 1995-1 Available Subordinated
Amount would exceed the applicable Series 1995-1 Available Subordinated
Amount Maximum Increase, excluding from such calculation any increase in
the Series 1995-1 Available Subordinated Amount (1) through Recoveries or
from funds constituting repayments of principal under the Demand Note, (2)
pursuant to Section 5.2(a) of the Supplement or (3) relating to an
increase in the Minimum Subordinated Amount that results from (a) an
increase in the ratio of Non-Program Vehicles to all Vehicles, (b) a
reduction in the aggregate amount of cash and Permitted Investments in the
Collection Account and the Master Collateral Account, or (c) a decrease in
the amount of the lowest Measurement Month Average of any full Measurement
Month within the twelve calendar months preceding the applicable
determination date.
Section 4.8. Monthly Payments.
On each Determination Date, as provided below, the Servicer shall
instruct the Paying Agent to withdraw, and on the following Payment Date the
Paying Agent, acting in accordance
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with such instructions, shall withdraw the amounts required to be withdrawn from
the Collection Account pursuant to Sections 4.8(a), (b) and (c) below in respect
of all funds available from Interest Collections processed since the preceding
Payment Date and allocated to the holders of the Series 1995-1 Notes.
(a) Note Interest with respect to the Class A Notes. On each
Determination Date, the Servicer shall instruct the Trustee or the Paying Agent
to withdraw on the next succeeding Payment Date from the Series 1995-1 Accrued
Interest Account the lesser of (i) the amount on deposit in the Series 1995-1
Accrued Interest Account and (ii) an amount (the "Class A Interest Amount")
equal to the sum of (x) an amount equal to the interest accrued for the related
Interest Period which will be equal to the sum of (A) the product of (1) the
Class A-1 Rate for the related Series 1995-1 Interest Period, (2) the Aggregate
Principal Balance of the Class A-1 Notes as of the previous Payment Date after
giving effect to any principal payments made on such Payment Date (or in the
case of the initial Payment Date, the Class A-1 Initial Invested Amount), and
(3) the actual number of days in such Series 1995-1 Interest Period divided by
360, plus (B) the product of (1) the Class A-2 Rate for the related Series
1995-1 Interest Period, (2) the Aggregate Principal Balance of the Class A-2
Notes as of the previous Payment Date after giving effect to any principal
payments made on such Payment Date (or in the case of the initial Payment Date,
the Class A-2 Initial Invested Amount), divided by twelve, plus (y) an amount
equal to the amount of any unpaid Class A Deficiency Amount (defined below) as
of the preceding Payment Date (together with any accrued interest on such Class
A Deficiency Amount). On such Determination Date, the Servicer shall further
instruct the Trustee or the Paying Agent to withdraw on the next succeeding
Payment Date from the Series 1995-1 Excess Funding Account the lesser of (i) the
amount in excess of the Liquidity Amount on deposit in the Series 1995-1 Excess
Funding Account and (ii) the excess, if any, of the Class A Interest Amount over
the amount withdrawn from the Series 1995-1 Accrued Interest Account pursuant to
the preceding sentence. If the sum of the funds available in the Series 1995-1
Accrued Interest Account and any funds in excess of the Liquidity Amount
available in the Series 1995-1 Excess Funding Account are insufficient to pay
the Class A Interest Amount on any Payment Date, payments of interest to the
Class A Noteholders will be reduced by the amount of such shortfall. The amount,
if any, of such shortfall on any Payment Date shall be referred to as the "Class
A Deficiency Amount." Interest shall accrue on the Class A Deficiency Amount at
the applicable Class A Note Rate. On the following Payment Date, the Trustee
shall withdraw the Class A Interest Amount from the Series 1995-1 Accrued
Interest Account and, to the extent provided above, from the Series 1995-1
Excess Funding Account, and shall deposit such amount in the Class A
Distribution Account.
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(b) Note Interest with respect to the Class B Notes. On each
Determination Date, the Servicer shall instruct the Trustee or the Paying Agent
to withdraw on the next succeeding Payment Date from the Series 1995-1 Accrued
Interest Account (subject to the provisions of Section 4.14) the lesser of (i)
the amount remaining on deposit in the Series 1995-1 Accrued Interest Account
after withdrawal of the amounts specified in clause (a) above and (ii) an amount
(the "Class B Interest Amount") equal to the sum of (x) an amount equal to the
interest accrued for the related Series 1995-1 Interest Period which will be
equal to the product of (A) the product of (1) the Class B-1 Rate for the
related Series 1995-1 Interest Period, (2) the Aggregate Principal Balance of
the Class B-1 Notes as of the previous Payment Date after giving effect to any
principal payments made on such Payment Date (or in the case of the initial
Payment Date, the Class B-1 Initial Invested Amount), and (3) the actual number
of days in such Series 1995-1 Interest Period divided by 360, plus (B) the
product of (1) the Class B-2 Rate for the related Series 1995-1 Interest Period,
(2) the Aggregate Principal Balance of the Class B-2 Notes as of the previous
Payment Date after giving effect to any principal payments made on such Payment
Date (or in the case of the initial Payment Date, the Class B-2 Initial Invested
Amount), and (3) the actual number of days elapsed in such Series 1995-1
Interest Period divided by 360, plus (y) an amount equal to the amount of any
unpaid Class B Deficiency Amount (defined below) as of the preceding Payment
Date (together with any accrued interest on such Class B Deficiency Amount). On
such Determination Date, the Servicer shall further instruct the Trustee or the
Paying Agent to withdraw on the next succeeding Payment Date from the Series
1995-1 Excess Funding Account the lesser of (i) the amount in excess of the
Liquidity Amount on deposit in the Series 1995-1 Excess Funding Account after
withdrawal of the amounts specified in clause (a) above and (ii) the excess, if
any, of the Class B Interest Amount over the amount withdrawn from the Series
1995-1 Accrued Interest Account pursuant to the preceding sentence. If the sum
of the funds in excess of the Liquidity Amount available in the Series 1995-1
Accrued Interest Account and any funds in excess of the Liquidity Amount
available in the Series 1995-1 Excess Funding Account (subject to the provisions
of Section 4.14) are insufficient to pay the Class B Interest Amount on any
Payment Date, payments of interest to the Class B Noteholders will be reduced by
the amount of such shortfall. The amount, if any, of such shortfall on any
Payment Date shall be referred to as the "Class B Deficiency Amount". Interest
shall accrue on the Class B Deficiency Amount at the Class B Note Rate. On the
following Payment Date, provided that all payments on account of interest that
are required to be made to the Class A Noteholders are available in the Class A
Distribution Account (including, without limitation, all accrued interest, the
Class A Deficiency Amount, and all interest accrued on such Class A Deficiency
Amount), the Trustee shall withdraw the Class B Interest Amount
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from the Series 1995-1 Accrued Interest Account and, to the extent provided
above, from the Series 1995-1 Excess Funding Account, and shall deposit such
amount in the Class B Distribution Account.
(c) Servicing Fee. On each Payment Date, the Servicer shall, after
making all distributions required to be made pursuant to Sections 4.8(a) and
(b), or in the event that on the related Determination Date Thrifty shall no
longer be the Servicer, prior to such deposits being made, instruct the Trustee
and the Paying Agent to withdraw from the Series 1995-1 Accrued Interest Account
an amount equal to (i) the Class A Investor Monthly Servicing Fee (and any Class
A Monthly Supplemental Servicing Fee) accrued during the preceding Interest
Period, plus (ii) the Class B Investor Monthly Servicing Fee (and any Class B
Monthly Supplemental Servicing Fee) accrued during the preceding Interest
Period, plus (iii) all accrued and unpaid Class A Investor Monthly Servicing
Fees (and any accrued and unpaid Class A Monthly Supplemental Servicing Fees)
and all accrued and unpaid Class B Investor Monthly Servicing Fees (and any
accrued and unpaid Class B Monthly Supplemental Servicing Fees) in respect of
previous periods. On the following Payment Date, the Trustee shall withdraw such
amount from the Series 1995-1 Accrued Interest Account and remit such amount to
the Servicer.
Section 4.9. Payment of Note Interest.
(a) Class A Notes. On each Payment Date the Paying Agent shall, in
accordance with Section 5.1 and the Servicer's most recent Monthly Certificate,
pay to the Class A Noteholders from the Class A Distribution Account the amount
deposited in the Class A Distribution Account for the payment of the Class A
Interest Amount.
(b) Class B Notes. On each Payment Date the Paying Agent shall, in
accordance with Section 5.1 and the Servicer's most recent Monthly Certificate,
but subject to Section 4.14, pay to the Class B Noteholders from the Class B
Distribution Account the amount deposited in the Class B Distribution Account
for the payment of the Class B Interest Amount.
Section 4.10. Payment of Note Principal.
(a) Class A Notes.
(i) Commencing on the second Determination Date after the
commencement of the Class A-1 Controlled Amortization Period or the
first Determination Date after the commencement of the Series 1995-1
Rapid Amortization Period, the Servicer shall instruct the Trustee
and the Paying Agent as to (x) the Class A-1 Controlled Distribution
Amount for the Related Month,
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(y) the amount allocated to the Class A-1 Notes during the Related
Month pursuant to Section 4.7(b)(x)(ii) or 4.7(c)(x)(ii) and (z) the
amount, if any, by which the amount in clause (x) above exceeds the
amount in clause (y) above (the amount of such excess the "Class A-1
Controlled Distribution Amount Deficiency"). Commencing on the
second Payment Date after the commencement of the Class A-1
Controlled Amortization Period or the first Payment Date after the
commencement of the Series 1995-1 Rapid Amortization Period, the
Trustee shall (A) withdraw from the Series 1995-1 Collection Account
an amount equal to the lesser of the amounts specified in clauses
(x) and (y) of the preceding sentence, and (B) withdraw from funds
in excess of the Liquidity Amount on deposit in the Series 1995-1
Excess Funding Account, an amount equal to the lesser of (I) the
Class A-1 Controlled Distribution Amount Deficiency and (II) the
amount of uninvested funds in excess of the Liquidated Amount on
deposit in the Series 1995-1 Excess Funding Account on such Payment
Date after giving effect to any withdrawals therefrom pursuant to
Section 4.8(a) and 4.8(b), and deposit such amounts in the Class A
Distribution Account, to be paid, pro rata, to the Class A-1
Noteholders; provided, however, that on the final Payment Date for
the Class A-1 Notes, the Trustee shall withdraw from such accounts,
as provided above, an amount which is no greater than the Class A-1
Invested Amount as of such date. The Invested Amount of all
Outstanding Class A-1 Notes shall be due and payable on the Series
1995-1 Termination Date.
(ii) Commencing on the second Determination Date after the
commencement of the Class A-2 Controlled Amortization Period or the
first Determination Date after the commencement of the Series 1995-1
Rapid Amortization Period, the Servicer shall instruct the Trustee
or the Paying Agent as to (x) the Class A-2 Controlled Distribution
Amount for the Related Month, (y) the amount allocated to the Class
A-2 Notes during the Related Month pursuant to Section 4.7(b)(x)(ii)
or 4.7(c)(x)(ii) and (z) the amount, if any, by which the amount in
clause (x) above exceeds the amount in clause (y) above (the amount
of such excess, the "Class A-2 Controlled Distribution Amount
Deficiency"). Commencing on the second Payment Date after the
commencement of the Class A-2 Controlled Amortization Period or the
first Payment Date after the commencement of the Series 1995-1 Rapid
Amortization Period, the Trustee shall (A) withdraw from the Series
1995-1 Collection Account an amount equal to the lesser of the
amounts specified in clauses (x) and (y) of the
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preceding sentence, and (B) withdraw from funds in excess of the
Liquidity Amount on deposit in the Series 1995-1 Excess Funding
Account, an amount equal to the lesser of (I) the Class A-2
Controlled Distribution Amount Deficiency and (II) the amount of
uninvested funds in excess of the Liquidity Amount on deposit in the
Series 1995-1 Excess Funding Account on such Payment Date after
giving effect to any withdrawals therefrom pursuant to Section
4.8(a) and 4.8(b) and deposit such amounts in the Class A
Distribution Account, to be paid, pro rata, to the Class A-2
Noteholders; provided, however, that on the final Payment Date for
the Class A-2 Notes, the Trustee shall withdraw from such accounts,
as provided above, an amount which is no greater than the Class A-2
Invested Amount as of the end such date. Subject to Section 4.14,
the Invested Amount of all Outstanding Class A-2 Notes shall be due
and payable on the Series 1995-1 Termination Date.
(iii) On each Payment Date occurring on or after the date a
withdrawal is made pursuant to Sections 4.10(a)(i) and (ii), the
Paying Agent shall, in accordance with Section 5.1 and the
Servicer's most recent Monthly Certificate, pay to the Class A-1
Noteholders and the Class A-2 Noteholders, respectively, the amount,
if any, deposited in the Class A Distribution Account for the
payment of principal pursuant to Sections 4.10(a)(i) and (ii) and,
to the extent necessary to pay principal on the Class A-1 Notes or
the Class A-2 Notes, amounts drawn from funds in excess of the
Liquidity Amount on deposit in the Series 1995-1 Excess Funding
Account.
(b) Class B Notes.
(i) Commencing on the second Determination Date after the
commencement of the Class B-1 Controlled Amortization Period or the
first Determination Date after the commencement of the Series 1995-1
Rapid Amortization Period, provided that the Class A Notes have been
paid in full, the Servicer shall instruct the Trustee and the Paying
Agent as to (x) the Class B-1 Controlled Distribution Amount for the
Related Month, (y) the amount allocated to the Class B-1 Notes
during the Related Month pursuant to Section 4.7(b)(x)(ii) or
4.7(c)(x)(ii) and (z) the amount, if any, by which the amount in
clause (x) above exceeds the amount in clause (y) above (the amount
of such excess, the "Class B-1 Controlled Distribution Amount
Deficiency"). Commencing on the second Payment Date after the
commencement of the Series 1995-1 Controlled
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Amortization Period or the first Payment Date after the commencement
of the Series 1995-1 Rapid Amortization Period, the Trustee shall,
subject to Section 4.14, (A) withdraw from the Series 1995-1
Collection Account an amount equal to the lesser of the amounts
specified in clauses (x) and (y) of the preceding sentence, and (B)
withdraw from funds in excess of the Liquidity Amount on deposit in
the Series 1995-1 Excess Funding Account, an amount equal to the
lesser of (I) the Class B-1 Controlled Distribution Amount
Deficiency and (II) the amount of uninvested funds in excess of the
Liquidity Amount on deposit in the Series 1995-1 Excess Funding
Account on such Payment Date after giving effect to any withdrawals
therefrom pursuant to Section 4.8(a) and 4.8(b) and deposit such
amounts in the Class B Distribution Account to be paid, pro rata, to
the Class B-1 Noteholders; provided, however, that on the final
Payment Date for the Class B-1 Notes, the Trustee shall withdraw
from such accounts, as provided above, an aggregate amount which is
no greater than the Class B-1 Invested Amount as of the end of such
date. Subject to Section 4.14, the Invested Amount of all
Outstanding Class B-1 Notes shall be due and payable on the Series
1995-1 Termination Date.
(ii) Commencing on the second Determination Date after the
commencement of the Class B-2 Controlled Amortization Period or the
first Determination Date after the commencement of the Series 1995-1
Rapid Amortization Period, the Servicer shall instruct the Trustee
or the Paying Agent as to (x) the Class B-2 Controlled Distribution
Amount for the Related Month, (y) the amount allocated to the Class
B-2 Notes during the Related Month pursuant to Section 4.7(b)(x)(ii)
or 4.7(c)(x)(ii) and (z) the amount, if any, by which the amount in
clause (x) above exceeds the amount in clause (y) above (the amount
of such excess, the "Class B-2 Controlled Distribution Amount
Deficiency"). Commencing on the second Payment Date after the
commencement of the Class B-2 Controlled Amortization Period or the
first Payment Date after the commencement of the Series 1995-1 Rapid
Amortization Period, the Trustee shall (A) withdraw from the Series
1995-1 Collection Account an amount equal to the lesser of the
amounts specified in clauses (x) and (y) of the preceding sentence,
and (B) withdraw from funds in excess of the Liquidity Amount on
deposit in the Series 1995-1 Excess Funding Account, an amount equal
to the lesser of (I) the Class A-2 Controlled Distribution Amount
Deficiency and (II) the amount of uninvested funds in excess of the
Liquidity Amount on deposit in the Series 1995-1 Excess Funding
Account on such
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Payment Date after giving effect to any withdrawals therefrom pursuant to
Section 4.8(a) and 4.8(b) and deposit such amounts in the Class B Distribution
Account, to be paid, pro rata, to the Class B-2 Noteholders; provided, however,
that on the final Payment Date for the Class B-2 Notes, the Trustee shall
withdraw from such accounts, as provided above, an amount which is no greater
than the Class B-2 Invested Amount as of the end such date. Subject to Section
4.14, the Invested Amount of all Outstanding Class B-2 Notes shall be due and
payable on the Series 1995-1 Termination Date.
(iii) On each Payment Date occurring on or after the date a
withdrawal is made pursuant to Section 4.10(b)(i) and (ii), the
Paying Agent shall, in accordance with Section 5.1 and the
Servicer's most recent Monthly Certificate, pay to the Class B-1
Noteholders and the Class B-2 Noteholders, respectively, the amount,
if any, deposited in the Class B Distribution Account for the
payment of principal pursuant to Section 4.10(b)(i) and (ii) and, to
the extent necessary to pay principal on the Class B-1 Notes or the
Class B-2 Notes, amounts drawn from funds in excess of the Liquidity
Amount on deposit in the Series 1995-1 Excess Funding Account.
(c) Notwithstanding anything to the contrary set forth in the
Indenture, for the period ending on the earlier of (x) the date that
is six months after the occurrence of an Event of Bankruptcy with
respect to Thrifty and (y) the date on which the underlying case,
application or petition with respect to such an Event of Bankruptcy
is withdrawn or dismissed or any stay thereunder in respect of the
Master Collateral is lifted, all Disposition Proceeds, Guaranteed
Payments, Repurchase Payments, and Incentive Payments received by
Thrifty Finance, the Master Collateral Agent, or the Trustee
(including by deposit into the Master Collateral Account) during the
period from and including the date of such occurrence to but
excluding the 30th day thereafter, in an amount not to exceed 4.15%
of the Invested Amount of the Series 1995-1 Notes as of the date of
such Event of Bankruptcy, shall be allocated and distributed solely
in respect of interest on the Notes as the same shall become due and
payable pursuant hereto to the extent Interest Collections allocated
and distributed pursuant to this Article IV are otherwise
insufficient to pay such amounts. Upon the expiration of the period
described in clauses (x) and (y) of this Section 4.10(c),
Disposition Proceeds, Guaranteed Payments, Repurchase Payments, and
Incentive Payments shall be allocated and distributed in accordance
with this Article 4 and Article 5 (exclusive of this Section
4.10(c)).
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Section 4.11. Retained Distribution Account. On each Payment Date,
the Servicer shall instruct the Trustee to instruct the Paying Agent to transfer
to the Retained Distribution Account (established pursuant to Section 4.1(b) of
the Base Indenture) (i) all funds in the Collection Account that have been
allocated to the Retained Distribution Account as of such Payment Date and (ii)
all funds that were previously allocated to the Retained Distribution Account
but not transferred to the Retained Distribution Account.
Section 4.12. Class A Distribution Account.
(a) Establishment of Class A Distribution Account. The Trustee shall
establish and maintain in the name of the Trustee for the benefit of the Class A
Noteholders, or cause to be established and maintained, an account (the "Class A
Distribution Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Class A Noteholders. The Class
A Distribution Account shall be maintained (i) with a Qualified Institution, or
(ii) as a segregated trust account with the corporate trust department of a
depository institution or trust company having corporate trust powers and acting
as trustee for funds deposited in the Class A Distribution Account. If the Class
A Distribution Account is not maintained in accordance with the previous
sentence, the Servicer shall establish a new Class A Distribution Account,
within ten (10) Business Days after obtaining knowledge of such fact, which
complies with such sentence, and transfer all cash and investments from the
non-qualifying Class A Distribution Account into the new Class A Distribution
Account. Initially, the Class A Distribution Account will be established with
the Trustee.
(b) Administration of the Class A Distribution Account. The Servicer
shall instruct the institution maintaining the Class A Distribution Account to
invest funds on deposit in the Class A Distribution Account at all times in
Permitted Investments; provided, however, that any such investment shall mature
not later than the Business Day prior to the Payment Date following the date on
which such funds were received, unless any Permitted Investment held in the
Class A Distribution Account is held with the Paying Agent, in which case such
investment may mature on such Payment Date provided that such funds shall be
available for withdrawal on or prior to such Payment Date. The Trustee shall
hold, for the benefit of the Class A Noteholders and the Servicer, possession of
any negotiable instruments or securities evidencing the Permitted Investments
from the time of purchase thereof until the time of maturity.
(c) Earnings from Class A Distribution Account. Subject to the
restrictions set forth above, the Servicer shall have the authority to instruct
the Trustee with respect to the investment of funds on deposit in the Class A
Distribution Account. All interest and earnings (net of losses and investment
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expenses) on funds on deposit in the Class A Distribution Account shall be
deemed to be available and on deposit for distribution.
(d) Class A Distribution Account Constitutes Additional Collateral
for Series 1995-1 Notes. In order to secure and provide for the repayment and
payment of the Thrifty Finance Obligations with respect to the Class A Notes
(but not the other Notes), Thrifty Finance hereby assigns, pledges, grants,
transfers and sets over to the Trustee, for the benefit of the Series 1995-1
Noteholders, all of Thrifty Finance's right, title and interest in and to the
following (whether now or hereafter existing and whether now owned or hereafter
acquired): (i) the Class A Distribution Account; (ii) all funds on deposit
therein from time to time; (iii) all certificates and instruments, if any,
representing or evidencing any or all of the Class A Distribution Account or the
funds on deposit therein from time to time; (iv) all Permitted Investments made
at any time and from time to time with moneys in the Class A Distribution
Account; and (v) all proceeds of any and all of the foregoing, including,
without limitation, cash (the items in the foregoing clauses (i) through (v) are
referred to, collectively, as the "Class A Distribution Account Collateral").
The Trustee shall possess all right, title and interest in all funds on deposit
from time to time in the Class A Distribution Account and in all proceeds
thereof. The Class A Distribution Account Collateral shall be under the sole
dominion and control of the Trustee, and the Paying Agent at the direction of
the Trustee, in each case for the benefit of the Series 1995-1 Noteholders.
Section 4.13. Class B Distribution Account.
(a) Establishment of Class B Distribution Account. The Trustee shall
establish and maintain in the name of the Trustee for the benefit of the Class B
Noteholders, or cause to be established and maintained, an account (the "Class B
Distribution Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Class B Noteholders. The Class
B Distribution Account shall be maintained (i) with a Qualified Institution, or
(ii) as a segregated trust account with the corporate trust department of a
depository institution or trust company having corporate trust powers and acting
as trustee for funds deposited in the Class B Distribution Account. If the Class
B Distribution Account is not maintained in accordance with the previous
sentence, the Servicer shall establish a new Class B Distribution Account,
within ten (10) Business Days after obtaining knowledge of such fact, which
complies with such sentence, and transfer all cash and investments from the
non-qualifying Class B Distribution Account into the new Class B Distribution
Account. Initially, the Class B Distribution Account will be established with
the Trustee.
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(b) Administration of the Class B Distribution Account. The Servicer
shall instruct the institution maintaining the Class B Distribution Account to
invest funds on deposit in the Class B Distribution Account at all times in
Permitted Investments; provided, however, that any such investment shall mature
not later than the Business Day prior to the Payment Date following the date on
which such funds were received, unless any Permitted Investment held in the
Class B Distribution Account is held with the Paying Agent, in which case such
investment may mature on such Payment Date provided that such funds shall be
available for withdrawal on or prior to such Payment Date. The Trustee shall
hold, for the benefit of the Class B Noteholders and the Servicer, possession of
any negotiable instruments or securities evidencing the Permitted Investments
from the time of purchase thereof until the time of maturity.
(c) Earnings from Class B Distribution Account. Subject to the
restrictions set forth above, the Servicer shall have the authority to instruct
the Trustee with respect to the investment of funds on deposit in the Class B
Distribution Account. All interest and earnings (net of losses and investment
expenses) on funds on deposit in the Class B Distribution Account shall be
deemed to be available and on deposit for distribution.
(d) Class B Distribution Account Constitutes Additional Collateral
for Series 1995-1 Notes. In order to secure and provide for the repayment and
payment of the Thrifty Finance Obligations with respect to the Class B Notes,
Thrifty Finance hereby assigns, pledges, grants, transfers and sets over to the
Trustee, for the benefit of the Series 1995-1 Noteholders, all of Thrifty
Finance's right, title and interest in and to the following (whether now or
hereafter existing and whether now owned or hereafter acquired): (i) the Class B
Distribution Account; (ii) all funds on deposit therein from time to time; (iii)
all certificates and instruments, if any, representing or evidencing any or all
of the Class B Distribution Account or the funds on deposit therein from time to
time; (iv) all Permitted Investments made at any time and from time to time with
moneys in the Class B Distribution Account; and (v) all proceeds of any and all
of the foregoing, including, without limitation, cash (the items in the
foregoing clauses (i) through (v) are referred to, collectively, as the "Class B
Distribution Account Collateral"). The Trustee shall possess all right, title
and interest in all funds on deposit from time to time in the Class B
Distribution Account and in all proceeds thereof. The Class B Distribution
Account Collateral shall be under the sole dominion and control of the Trustee,
and the Paying Agent at the direction of the Trustee, in each case for the
benefit of the Series 1995-1 Noteholders.
Section 4.14. Class B Notes Subordinate to Class A Notes.
Notwithstanding anything to the contrary contained herein
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or in any other Related Document, the Class B Notes will be subordinate as
provided in the Supplement to the Class A Notes. No payments on account of
interest shall be made with respect to the Class B Notes until all payments of
interest then due and payable with respect to the Class A Notes have been made
in full. The Class B-1 Notes will be subordinated to the Class A-1 Notes, such
that no payments on account of principal shall be made with respect to the Class
B-1 Notes until the Class A-1 Notes have been paid in full (except as may
otherwise be required in Article 5 of the Supplement in connection with a Waiver
Event), and the Class B-2 Notes will be subordinated to the Class A-2 Notes,
such that no payments on account of principal shall be made with respect to the
Class B-2 Notes until the Class A Notes have been paid in full (except as may
otherwise be required in Article 5 of the Supplement in connection with a Waiver
Event); provided, however, that with respect to (x) allocations and payments on
account of principal during a Series 1995-1 Rapid Amortization Period, (y)
allocation of Losses and Recoveries at any time, and (z) and repurchase of Notes
pursuant to Section 7.1 of the Supplement, all of the Class B Notes will be
subordinated to the Class A Notes.
Section 4.15. Application of Liquidity Amount. Notwithstanding
anything to the contrary contained herein or in any other Related Document,
funds in an amount not less than the Liquidity Amount (including such portion of
the funds deposited in the Series 1995-1 Excess Funding Account on the Series
1995-1 Closing Date pursuant to Section 4.7) shall at all times, except as
specified in this Section 4.15, be retained in the Series 1995-1 Excess Funding
Account, and such retained funds (i) shall not be used to pay the principal
amount of other Series or to finance or acquire Vehicles pursuant to 4.7(d)(A),
(ii) shall not be transferred to the Retained Distribution Account, and (iii)
shall not be used to pay interest or principal on the Series 1995-1 Notes
pursuant to Sections 4.8 through 4.10; provided, however, that upon the
occurrence and during the continuance of an Event of Bankruptcy with respect to
Thrifty or Thrifty Finance, or upon the commencement of and during the Series
1995-1 Rapid Amortization Period, funds that have been retained in the Series
1995-1 Excess Funding Account pursuant to this Section 4.15 may be used to pay
interest then currently due and payable, pursuant to the Base Indenture as
supplemented by the Supplement, in respect of the Series 1995-1 Notes.
ARTICLE 4
AMORTIZATION EVENTS
Section 4.1. Series 1995-1 Amortization Events. In addition to the
Amortization Events set forth in Section 7.1 of the Base Indenture, the
following shall be Amortization Events with respect to the Series 1995-1 Notes
(without notice or other
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action on the part of the Trustee or any Holders of the Series 1995-1 Notes):
(a) A Series 1995-1 Subordination Deficiency shall occur and
continue for at least five (5) Business Days after the Servicer obtains
actual knowledge thereof; provided, however, that such event or condition
shall not be an Amortization Event if (i) during such five (5) Business
Day period Thrifty Finance shall have increased the Series 1995-1
Available Subordinated Amount by allocating to the Series 1995-1 Available
Subordinated Amount Eligible Vehicles theretofore allocated to the
Retained Interest or by depositing funds into the Series 1995-1 Excess
Funding Account, in each case pursuant to Section 4.7(d)(E), so that the
Series 1995-1 Subordination Deficiency no longer exists;
(b) any of the Related Documents or any portion thereof shall not be
in full force and effect or enforceable in accordance with its terms or
Thrifty Finance, Thrifty or the Servicer shall so assert in writing; or
(c) All principal and interest of the Class A-1 Notes shall not be
paid in full on or before the Class A-1 Expected Final Payment Date, all
principal and interest of the Class A-2 Notes shall not be paid in full on
or before the Class A-2 Expected Final Payment Date, all principal and
interest in respect of the Class B-1 Notes shall not be paid in full on or
before the Class B-1 Expected Final Payment Date or all principal and
accrued interest in respect of the Class B-2 Notes shall not be paid in
full on or before the Class B-2 Expected Final Payment Date.
Section 4.2. Waiver of Past Events. Subject to Section 11.2 of the
Base Indenture, Series 1995-1 Noteholders holding 100% of the aggregate Invested
Amount, by notice to the Trustee, may waive any existing Potential Amortization
Event or Amortization Event related to Section 4.1(a) of this Supplement.
ARTICLE 5
RIGHT TO WAIVE PURCHASE RESTRICTIONS
Section 5.1. Request for Waiver.
(a) Notwithstanding any provision to the contrary in the Indenture
or the Related Documents, upon the Trustee's receipt of notice from Thrifty or
Thrifty Finance requesting an adjustment of either the Maximum Manufacturer
Percentage with respect to any Eligible Manufacturer or the Maximum Non-Program
Percentage with respect to Non-Program Vehicles (such notice, a
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"Change of Percentage Notice"), each Class A Noteholder may, at its option upon
any failure to obtain Rating Agency confirmation in connection with such
adjustment, waive the Maximum Manufacturer Percentage or the Maximum Non-Program
Percentage, as the case may be, if (i) no Amortization Event exists and (ii) the
Requisite Class A Noteholders consent to the waiver of such Vehicle purchase
restrictions. In addition, in such event, each Class B Noteholder may, at its
option, waive the Maximum Manufacturer Percentage or the Maximum Non-Program
Percentage, as the case may be, if (i) no Amortization Event exists and (ii) the
Requisite Class A Noteholders consent to the waiver of such Vehicle purchase
restrictions.
(b) Upon (x) receipt by the Trustee of a Change of Percentage Notice
and (y) any failure, after giving effect to the leasing of any Vehicle under the
Lease, of Thrifty Finance to satisfy the conditions in Section 4.2(a) or (b) of
the Lease, all Series 1995-1 Principal Allocations allocated to the Series
1995-1 Excess Funding Account (the "Designated Amounts") from the date the
Trustee receives a Change of Percentage Notice through the Consent Period
Expiration Date or, if the Trustee receives Consent from the Requisite Class A
Noteholders in accordance with the next following paragraph, through the date on
which the Payments described in clauses (i) through (iii) below shall have been
paid in full, will be held by the Trustee in the Series 1995-1 Collection
Account for ratable distribution as described below.
(c) Within ten (10) Business Days after the Trustee receives a
Change of Percentage Notice, the Trustee shall furnish notice thereof to the
Series 1995-1 Noteholders, which notice shall be accompanied by a form of
consent (each a "Consent") in the form of Exhibit C by which the Series 1995-1
Noteholders may, on or before the Consent Period Expiration Date, consent to the
waiver of the Vehicle purchase restrictions. If the Trustee receives Consents
from the Requisite Class A Noteholders agreeing to waiver of such percentages
within forty-five (45) days after the Trustee notifies the Series 1995-1
Noteholders of a Change of Percentage Notice (the day on which such forty-five
(45) day period expires, the "Consent Period Expiration Date"), (i) the
conditions in Section 4.2 of the Lease relating to the Maximum Non-Program
Percentage or the Maximum Manufacturer Percentage will be deemed not to include
the definition of such term set forth in Article 2 of this Series Supplement,
(ii) the Trustee will distribute the Designated Amounts as set forth below and
(iii) the Trustee shall promptly (but in any event within two days) provide the
Rating Agencies with notice of the waiver of such Vehicle purchase restrictions.
Any Class A or Class B Noteholder from whom the Trustee has not received a
Consent on or before the Consent Period Expiration Date will be deemed not to
have consented to such waiver of the Maximum Manufacturer
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Percentage and/or the Maximum Non-Program Percentage, as the case may be.
Section 5.2. Consents.
(a) If the Trustee receives Consents from the Requisite Class A
Noteholders on or before the Consent Period Expiration Date and a Waiver
Deficiency exists, then, at the option of Thrifty Finance, either (i) the Class
A Noteholders that consent to waive will (as described in the following two
paragraphs) receive early prepayment (in part) of the principal amount of their
Notes together with the Series 1995-1 Note Prepayment Premium with respect
thereto (such payment to be distributed to each such consenting Class A
Noteholder pro rata in the ratio that the aggregate principal amount of Class A
Notes held by such consenting Class A Noteholder bears to the aggregate
principal amount of all Class A Notes held by all consenting Class A
Noteholders) until the Waiver Deficiency no longer exists (such prepayments and
premiums, "Class A Waiver Deficiency Adjustment Prepayments") or (ii) Thrifty
Finance, at its option, may increase the Series 1995-1 Available Subordinated
Amount by an amount sufficient to cure such Waiver Deficiency.
(b) If the Trustee receives Consents from the Requisite Class A
Noteholders on or before the Consent Period Expiration Date, then (whether or
not a Waiver Deficiency exists) on the immediately following Payment Date, the
Trustee will pay the Designated Amounts as follows:
(i) to the non-consenting Class A Noteholders, if any, pro
rata up to the amount required to pay all Class A Notes held by such
non-consenting Class A Noteholders and the Series 1995-1 Note Prepayment
Premium in respect thereof in full;
(ii) any remaining Designated Amounts to the consenting Class
A Noteholders, if any, pro rata up to the amount required to pay all Class
A Waiver Deficiency Adjustment Prepayments, if any, in full;
(iii) any remaining Designated Amounts to the non-consenting
Class B Noteholders, if any, pro rata up to the amount required to pay all
Class B Notes held by such non-consenting Class B Noteholders and the
Series 1995-1 Note Prepayment Premium in respect thereof in full; and
(iv) any remaining Designated Amounts to the Series 1995-1
Excess Funding Account.
(c) Following such Payment Date, the Servicer will allocate to the
Series 1995-1 Collection Account on a daily basis all Designated Amounts
collected on such day until the date on
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which the payments described in clauses (i) through (iii) below shall have been
paid in full. On each following Payment Date, the Trustee, at the direction of
the Servicer, will withdraw a portion of such Designated Amounts from the Series
1995-1 Collection Account and deposit same in the Class A Distribution Account
and, to the extent the Designated Amounts available exceed the amounts required
to be distributed to the Class A Noteholders, in the Class B Distribution
Account, for distribution as follows:
(i) to the non-consenting Class A Noteholders, if any, pro
rata, in an amount equal to the sum of (A) the Class A Invested Percentage
of the Designated Amounts in the Series 1995-1 Collection Account as of
the applicable Determination Date, plus (B) the Class B Invested
Percentage of the Designated Amounts in the Series 1995-1 Collection
Account as of the applicable Determination Date, plus (C) the Series
1995-1 Available Subordinated Amount Percentage of the Designated Amounts
in the Series 1995-1 Collection Account as of the applicable Determination
Date (each of such invested percentages determined as specified with
respect to Principal Collections and as during a Rapid Amortization
Period, but, if the Waiver Event has occurred during the Revolving Period,
determined by reference to the invested amounts as of the close of
business on the Consent Period Expiration Date) up to the aggregate
principal balance of the Class A Notes held by the non-consenting Class A
Noteholders plus the applicable Series 1995-1 Note Prepayment Premium;
(ii) any remaining Designated Amounts to the consenting Class
A Noteholders, if any, pro rata in an amount equal to the sum of (A) the
Class A Invested Percentage of the Designated Amounts as of the applicable
Determination Date, plus (B) the Class B Invested Percentage of such
Designated Amounts as of the applicable Determination Date, plus (C) the
Series 1995-1 Available Subordinated Amount Percentage of such Designated
Amounts as of the applicable Determination Date (each of such invested
percentages determined as specified with respect to Principal Collections
and as during a Rapid Amortization Period, or, if the Waiver Event has
occurred during the Revolving Period, determined by reference to the
invested amounts as of the close of business on the Consent Period
Expiration Date) up to the amount required to pay all Class A Waiver
Deficiency Adjustment Prepayments, if any, in full;
(iii) any remaining Designated Amounts to the non-consenting
Class B Noteholders, if any, pro rata in an amount equal to the sum of (A)
the Class A Invested Percentage of the Designated Amounts as of the
applicable Determination Date, plus (B) the Class B Invested Percentage
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of such Designated Amounts as of the applicable Determination Date, plus
(C) the Series 1995-1 Available Subordinated Amount Percentage of such
Designated Amounts as of the applicable Determination Date (each of such
invested percentages determined as specified with respect to Principal
Collections and as during a Rapid Amortization Period, or, if the Waiver
Event has occurred during the Revolving Period, determined by reference to
the invested amounts as of the close of business on the Consent Period
Expiration Date) up to the aggregate principal balance of the Class B
Notes held by the non-consenting Class B Noteholders plus the applicable
Series 1995-1 Note Prepayment Premium; and
(iv) any remaining Designated Amounts to the Series 1995-1
Excess Funding Account.
In the event that the Series 1995-1 Rapid Amortization Period shall
commence after receipt by the Trustee of a Change of Percentage Notice, all such
Designated Amounts will thereafter be considered Principal Collections allocated
to the Series 1995-1 Noteholders.
ARTICLE 6
FORM OF SERIES 1995-1 NOTES
Section 6.1. Class A Notes.
(a) Restricted Global Class A Note. Class A Notes to be issued in
book-entry form and sold by the Initial Purchasers to qualified institutional
buyers within the meaning of, and in reliance on, Rule 144A under the Securities
Act will be represented by a permanent global Class A-1 Note and a permanent
global Class A-2 Note, each in fully registered form without interest coupons
(the "Restricted Global Class A-1 Note" and the "Restricted Global Class A-2
Note", respectively), substantially in the forms set forth in Exhibit A-1 and
Exhibit A-4 hereto respectively, with such legends as may be applicable thereto
as set forth in the Base Indenture, and shall be deposited on behalf of the
purchasers of the Class A Notes represented thereby with a custodian for DTC,
and registered in the name of Cede as DTC's nominee, duly executed by Thrifty
Finance and authenticated by the Trustee in the manner set forth in Section 2.4
of the Base Indenture. The Restricted Global Class A-1 Note and the Restricted
Global Class A-2 Note are collectively referred to herein as the "Restricted
Global Class A Notes".
(b) Temporary Global Class A Note; Permanent Global Class A Note.
Class A Notes to be offered and sold outside the United States in offshore
transactions in reliance on
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<PAGE> 57
Regulation S under the Securities Act, will initially be represented by a
temporary global Class A-1 Note and a temporary global Class A-2 Note, each in
fully registered form without interest coupons (the "Temporary Global Class A-1
Note" and the "Temporary Global Class A-2 Note", respectively), substantially in
the forms set forth in Exhibit A-2 and Exhibit A-5 hereto respectively, which
shall be deposited on behalf of the purchasers of the Class A Notes represented
thereby with a custodian for, and registered in the name of a nominee of, DTC,
for the accounts of Morgan Guaranty Trust Company of New York, Brussels office,
as operator of Euroclear, and for Cedel, duly executed by Thrifty Finance and
authenticated by the Trustee in the manner set forth in Section 2.4 of the Base
Indenture. The Temporary Global Class A-1 Note and the Temporary Global Class A-
2 Note are collectively referred to herein as the "Temporary Global Class A
Notes". Interests in a Temporary Global Class A-1 Note and in a Temporary Global
Class A-2 Note will be exchangeable, in whole or in part, for interests in a
permanent global Class A-1 Note and a permanent global Class A-2 Note,
respectively, each in registered form without interest coupons, substantially in
the form of Exhibit A-3 and Exhibit A-6 hereto, respectively (the "Permanent
Global Class A-1 Note" and the "Permanent Global Class A-2 Note", respectively),
in accordance with the provisions of such Temporary Global Class A Note and the
Base Indenture (as modified by this Supplement). The Permanent Global Class A-1
Note and the Permanent Global Class A-2 Note are collectively referred to herein
as the "Permanent Global Class A Notes". Interests in a Permanent Global Class A
Note will be exchangeable for definitive Class A Notes in accordance with the
provisions of such Permanent Global Class A Note and the Base Indenture (as
modified by this Supplement).
Section 6.2. Class B Notes.
(a) Restricted Global Class B Note. Class B Notes to be issued in
book-entry form and sold by the Initial Purchasers to qualified institutional
buyers within the meaning of, an in reliance on, Rule 144A under the Securities
Act will be represented by a permanent global Class B-1 Note and a permanent
global Class B-2 Note, each in fully registered form without interest coupons
(the "Restricted Global Class B-1 Note" and the "Restricted Global B-2 Note",
respectively), substantially in the forms set forth in Exhibit B-1 and Exhibit
B-4 hereto respectively, with such legends as may be applicable thereto as set
forth in the Base Indenture, and shall be deposited on behalf of the purchasers
of the Class B Notes represented thereby, with a custodian for DTC, and
registered in the name of Cede as DTC's nominee, duly executed by Thrifty
Finance and authenticated by the Trustee in the manner set forth in Section 2.4
of the Base Indenture. The Restricted Global Class B-1 Note and the Restricted
Global Class B-2 Note are collectively referred to herein as the "Restricted
Global Class B Notes".
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<PAGE> 58
(b) Temporary Global Class B Note; Permanent Global Class B Note.
Class B Notes to be offered and sold outside the United States in offshore
transactions in reliance on Regulation S under the Securities Act, will
initially be represented by a temporary global Class B-1 Note and a temporary
global Class B-2 Note, each in fully registered form without interest coupons
(the "Temporary Global Class B-1 Note" and the "Temporary Global Class B-2
Note", respectively), substantially in the forms set forth in Exhibit B-2 and
Exhibit B-5 hereto respectively, which shall be deposited on behalf of the
purchasers of the Class B Notes represented thereby with a custodian for, and
registered in the name of a nominee of, DTC, for the accounts of Morgan Guaranty
Trust Company of New York, Brussels office, as operator of Euroclear, and for
Cedel, duly executed by Thrifty Finance and authenticated by the Trustee in the
manner set forth in Section 2.4 of the Base Indenture. The Temporary Global
Class B-1 Note and the Temporary Global Class B- 2 Note are collectively
referred to herein as the "Temporary Global Class B Notes". Interests in a
Temporary Global Class B-1 Note and in a Temporary Global Class B-2 Note will be
exchangeable, in whole or in part, for interests in a permanent global Class B-1
Note and a permanent global Class B-2 Note, respectively, each in registered
form without interest coupons, substantially in the form of Exhibit B-3 and
Exhibit B-6 hereto, respectively (the "Permanent Global Class B-1 Note" and the
"Permanent Global Class B-2 Note", respectively), in accordance with the
provisions of such Temporary Global Class B Note and the Base Indenture (as
modified by this Supplement). The Permanent Global Class B-1 Note and the
Permanent Global Class B-2 Note are collectively referred to herein as the
"Permanent Global Class B Notes". Interests in a Permanent Global Class B Note
will be exchangeable for definitive Class B Notes in accordance with the
provisions of such Permanent Global Class B Note and the Base Indenture (as
modified by this Supplement).
ARTICLE 7
GENERAL
Section 7.1. Repurchase of Notes. The Class A Notes and Class B
Notes shall be subject to repurchase in whole, but not in part, by Thrifty
Finance at its option in accordance with Section 5.3 of the Base Indenture, as
follows:
(a) the Class A-1 Notes and the Class A-2 Notes are subject to
repurchase by the Issuer in whole, but not in part, on any Payment Date
and the Class B-1 Notes and the Class B-2 Notes are subject to repurchase
by the Issuer in whole, but not in part, on any Payment Date after the
Class A Notes have been paid in full (each such Payment Date, a
"Repurchase Date");
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(b) the purchase price for any such repurchase of Series 1995-1
Notes shall equal the Aggregate Principal Balance of such Notes
(determined after giving effect to any payment of principal on such
Payment Date), plus accrued and unpaid interest on such Aggregate
Principal Balance (the "Repurchase Price"); and
(c) in addition, a prepayment premium (the "Series 1995-1 Note
Prepayment Premium") will be payable to the holders of a class of the
Series 1995-1 Notes upon any repurchase of such class of Notes by Thrifty
Finance when the Aggregate Principal Balance of such class is greater than
(i) $24,950,000, with respect to the Class A-1 Notes, (ii) $19,000,000,
with respect to the Class A-2 Notes, (iii) $650,000, with respect to the
Class B-1 Notes and (iv) $400,000, with respect to the Class B-2 Notes.
The Series 1995-1 Note Prepayment Premium in respect of each of the Class
A-1 Notes, the Class B-1 Notes and the Class B-2 Notes will equal the
amount of interest that would have accrued on the Aggregate Principal
Balance of such class of Notes (or in the case of prepayments pursuant to
Article 5 of this Supplement, on the principal amount so prepaid) for the
period commencing with the Repurchase Date and ending on the expected
final payment date for such class of Notes, at a rate of interest equal to
0.70% with respect to the Class A-1 Notes, 1.10% with respect to the Class
B-1 Notes and 1.25% with respect to the Class B-2 Notes, discounted to
present value at an interest rate per annum equal to the corporate bond
equivalent yield to maturity on the Determination Date preceding such
Repurchase Date on the 5.50% United States Treasury Note maturing November
1998 plus 0.20%, in the case of the Class A-1 Notes, the 5.875% United
States Treasury Note maturing March 1999 plus 0.20%, in the case of the
Class B-1 Notes, and the 8.00% United States Treasury Note maturing May
2001 plus 0.25%, in the case of the Class B-2 Notes. The Series 1995-1
Note Prepayment Premium in respect of the Class A-2 Notes will equal the
excess, if any, of (i) the amount of interest that would have accrued on
the Aggregate Principal Balance of such class of Notes (or in the case of
a prepayment pursuant to Article 5 of this Supplement, on the principal
amount so prepaid) for the period commencing with the Repurchase Date and
ending on the Class A-2 Notes Expected Final Payment Date at a rate equal
to 6.60% over (ii) the corporate bond equivalent yield to maturity on the
Determination Date preceding such Repurchase Date on the 5.625% United
States Treasury Note maturing November 2000, discounted to present value
to such Repurchase Date at such corporate bond equivalent yield plus
0.25%.
Payment of Rating Agencies' Fees. Thrifty Finance agrees and
covenants with the Servicer and the Trustee to pay all
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reasonable fees and expenses of the Rating Agencies and to promptly provide all
documents and other information that the Rating Agencies may reasonably request.
Annual Ratings Letter Request. Thrifty Finance hereby agrees and
covenants that in December of each year, commencing December 1996, Thrifty
Finance shall submit in writing to Fitch a request for a letter indicating the
then current ratings ascribed to the Series 1995-1 Notes by Fitch.
Exhibits. The following exhibits attached hereto supplement the
exhibits included in the Indenture.
Exhibit A-1: Form of Restricted Global Class A-1 Note
Exhibit A-2: Form of Temporary Global Class A-1 Note
Exhibit A-3: Form of Permanent Global Class A-1 Note
Exhibit A-4: Form of Restricted Global Class A-2 Note
Exhibit A-5: Form of Temporary Global Class A-2 Note
Exhibit A-6: Form of Permanent Global Class A-2 Note
Exhibit B-1: Form of Restricted Global Class B-1 Note
Exhibit B-2: Form of Temporary Global Class B-1 Note
Exhibit B-3: Form of Permanent Global Class B-1 Note
Exhibit B-4: Form of Restricted Global Class B-2 Note
Exhibit B-5: Form of Temporary Global Class B-2 Note
Exhibit B-6: Form of Permanent Global Class B-2 Note
Exhibit C: Form of Consent
Ratification of Base Indenture. As supplemented by this Supplement,
the Base Indenture is in all respects ratified and confirmed and the Base
Indenture as so supplemented by this Series Supplement shall be read, taken, and
construed as one and the same instrument.
Counterparts. This Supplement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
Governing Law. This Supplement shall be construed in accordance with
the law (including, without limitation, the UCC) of the State of New York
(without giving effect to the provisions thereof regarding conflicts of laws),
and the obligations, rights and remedies of the parties hereto shall be
determined in accordance with such law.
Amendments. This Supplement may be modified or amended from time to
time in accordance with the terms of the Base Indenture; provided, however, that
if, pursuant to the terms of the Base Indenture or this Supplement, the consent
of the Required Noteholders is required for an amendment or modification of this
Supplement, such requirement shall be satisfied if such amendment or
modification is consented to by Noteholders representing more than 50% of the
Aggregate Principal Balance of
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the Series 1995-1 Notes affected thereby (including for purposes of determining
such aggregate outstanding principal amount, the Aggregate Principal Balance of
both the Class A Notes and the Class B Notes); provided, further, that if the
consent of the Required Noteholders is required for a proposed amendment or
modification of this Supplement that (i) affects only the Class A-1 Notes (and
does not affect in any material respect the Class A-2 Notes or the Class B
Notes, as evidenced by an Opinion of Counsel to such effect), then such
requirement shall be satisfied if such amendment or modification is consented to
by Class A-1 Noteholders representing more than 50% of the aggregate outstanding
principal amount of the Class A-1 Notes (without the necessity of obtaining the
consent of the Required Noteholders in respect of the Class A-2 Notes or the
Class B Notes), (ii) affects only the Class A-2 Notes (and does not affect in
any material respect the Class A-1 Notes or the Class B Notes, as evidenced by
an Opinion of Counsel to such effect), then such requirement shall be satisfied
if such amendment or modification is consented to by Class A-2 Noteholders
representing more than 50% of the aggregate outstanding principal amount of the
Class A-2 Notes (without the necessity of obtaining the consent of the Required
Noteholders in respect of the Class A-1 Notes or the Class B Notes), (iii)
affects only the Class A Notes (and does not affect in any material respect the
Class B Notes, as evidenced by an Opinion of Counsel to such effect), then such
requirement shall be satisfied if such amendment or modification is consented to
by Class A Noteholders representing more than 50% of the aggregate outstanding
principal amount of the Class A Notes (without the necessity of obtaining the
consent of the Required Noteholders in respect of the Class B Notes), (iv)
affects only the Class B-1 Notes (and does not affect in any material respect
the Class B-2 Notes or the Class A Notes, as evidenced by an Opinion of Counsel
to such effect), then such requirement shall be satisfied if such amendment or
modification is consented to by Class B-1 Noteholders representing more than 50%
of the aggregate outstanding principal amount of the Class B-1 Notes (without
the necessity of obtaining the consent of the Required Noteholders in respect of
the Class B-2 Notes or the Class A Notes), (v) affects only the Class B-2 Notes
(and does not affect in any material respect the Class B-1 Notes or the Class A
Notes, as evidenced by an Opinion of Counsel to such effect), then such
requirement shall be satisfied if such amendment or modification is consented to
by Class B-2 Noteholders representing more than 50% of the aggregate outstanding
principal amount of the Class B-2 Notes (without the necessity of obtaining the
consent of the Required Noteholders in respect of the Class B-1 Notes or the
Class A Notes), or (vi) affects only the Class B Notes (and does not affect in
any material respect the Class A Notes, as evidenced by an Opinion of Counsel to
such effect), then such requirement shall be satisfied if such amendment or
modification is consented to by Class B Noteholders representing more than 50%
of the aggregate
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<PAGE> 62
outstanding amount of the Class B Notes (without the necessity of obtaining the
consent of the Required Noteholders in respect of the Class A Notes). In
addition, this Supplement may be amended or modified from time to time, without
the consent of any Noteholder but with the consent of the Rating Agencies,
Thrifty, the Servicer and the Trustee to amend the following definitions:
"Maximum Manufacturer Percentage", "Measurement Month" and "Measurement Month
Average" and to make changes related to such amendments.
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IN WITNESS WHEREOF, Thrifty Finance and the Trustee have caused this
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
THRIFTY CAR RENTAL FINANCE
CORPORATION
By: /s/ Steven Hildebrand
-------------------------------------
Name: Steven Hildebrand
Title: President
BANKERS TRUST COMPANY, as Trustee
By: /s/ Danielle R. Furey
-------------------------------------
Name: Danielle R. Furey
Title: Assistant Treasurer
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Schedule 1
Schedule of Manufacturer Percentages
Manufacturer Program Vehicles Non-Program Vehicles
------------ ---------------- --------------------
Chrysler 100% 40%
Ford and Toyota Up to 10% of Up to 5%
Vehicles, combined Aggregate Asset
Amount
Non-Chrysler 10% Up to 5%
Vehicles, combined
<PAGE> 65
EXHIBIT A-1
TO
SERIES 1995-1 SUPPLEMENT
FORM OF RESTRICTED GLOBAL CLASS A-1 NOTE
REGISTERED $_____________*
No. R-
SEE REVERSE FOR CERTAIN CONDITIONS
CUSIP (CINS) NO. ___________
ISIN NO. ___________
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CLASS A-1 NOTE, AGREES FOR THE
BENEFIT OF THRIFTY CAR RENTAL FINANCE CORPORATION (THE "COMPANY") THAT THIS
CLASS A-1 NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE
COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (3) OUTSIDE THE UNITED STATES TO A NON U.S. PERSON (AS DEFINED IN
REGULATION S OF THE SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH
REGULATION S OF THE SECURITIES ACT, OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, IN EACH CASE IN COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.19 OF THE BASE INDENTURE,
THIS CLASS A-1 NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO
ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR CLEARING AGENCY OR TO A
NOMINEE OF SUCH SUCCESSOR CLEARING AGENCY. UNLESS THIS CLASS A-1 NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THRIFTY CAR RENTAL
- ----------
* Denominations of $250,000 and integral multiples of $1,000.
<PAGE> 66
FINANCE CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CLASS A-1 NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN 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.
THE PRINCIPAL OF THIS CLASS A-1 NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-1 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
Thrifty Car Rental Finance Corporation
FLOATING RATE RENTAL CAR ASSET BACKED NOTES, CLASS A-1
Thrifty Car Rental Finance Corporation, a Delaware corporation
(herein referred to as the "Company"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of
[____________________] DOLLARS, which amount shall be payable in the amounts and
at the times set forth in the Indenture, provided, however, that the entire
unpaid principal amount of this Class A-1 Note shall be due on the Series 1995-1
Termination Date, which is the ______ Payment Date. However, principal with
respect to the Class A-1 Notes may be paid earlier or later under certain
limited circumstances described in the Indenture. The Company will pay interest
on this Class A-1 Note, at the Class A-1 Rate. Such interest shall be payable on
each Payment Date until the principal of this Class A-1 Note is paid or made
available for payment, on the principal amount of this Class A-1 Note
outstanding on the preceding Payment Date (after giving effect to all payments
of principal made on the preceding Payment Date). Interest on this Class A-1
Note will accrue for each Payment Date from the most recent Payment Date on
which interest has been paid to but excluding such Payment Date or, if no
interest has yet been paid, _________ __, 199_. Interest will be computed on the
basis of the actual number of days elapsed and a 360-day year. Such principal of
and interest on this Class A-1 Note shall be paid in the manner specified on the
reverse hereof.
The principal of and interest on this Class A-1 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Company with respect to this Class A-1 Note shall be applied first to
interest due and payable on this Class A-1 Note as provided above and then to
the unpaid principal of this Class A-1 Note. This Class A-1
A-1-2
<PAGE> 67
Note does not represent an interest in, or an obligation of, the Servicer, or
any affiliate of the Servicer other than the Company.
Interests in this Class A-1 Note are exchangeable or transferable in
whole or in part for interests in a Restricted Global Note if this Class A-1
Note is a Temporary Global Note, or for interests in a Temporary Global Note or
a Permanent Global Note if this Class A-1 Note is a Restricted Global Note (each
as defined in the Base Indenture), in each case of the same Series and class,
provided that such transfer or exchange complies with Article 2 of the Base
Indenture. Interests in this Class A-1 Note may be exchangeable in whole or in
part for duly executed and issued definitive registered Notes if so provided in
Article 2 of the Base Indenture, with the applicable legends as marked therein,
subject to the provisions of the Base Indenture.
Reference is made to the further provisions of this Class A-1 Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class A-1 Note. Although a summary of
certain provisions of the Indenture are set forth below and on the reverse
hereof and made a part hereof, this Class A-1 Note does not purport to summarize
the Indenture and reference is made to the Indenture for information with
respect to the interests, rights, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Servicer and the
Trustee. A copy of the Indenture may be requested from the Trustee by writing to
the Trustee at: 4 Albany Street, New York, New York 10006, Attn: Corporate Trust
and Agency Group. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class A-1 Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-1-3
<PAGE> 68
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: ______________ THRIFTY CAR RENTAL FINANCE
CORPORATION
By:_______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Notes of a series issued under the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_______________________________________
Authorized Signature
A-1-4
<PAGE> 69
[REVERSE OF CLASS A-1 NOTE]
This Class A-1 Note is one of a duly authorized issue of Class A-1
Notes of the Company, designated as its Floating Rate Rental Car Asset Backed
Notes, Class A-1 (herein called the "Class A-1 Notes"), all issued under (i) a
Base Indenture dated as of December 13, 1995 (such Base Indenture, as amended or
modified, is herein called the "Base Indenture"), between the COMPANY and
BANKERS TRUST COMPANY, as trustee (the "Trustee", which term includes any
successor Trustee under the Base Indenture), and (ii) a Series 1995-1 Supplement
dated as of December 13, 1995 (the "Series 1995-1 Supplement") between the
Company and the Trustee. The Base Indenture and the Series 1995-1 Supplement are
referred to herein as the "Indenture". The Class A-1 Notes are subject to all
terms of the Indenture. All terms used in this Class A-1 Note that are defined
in the Indenture, as supplemented or amended, shall have the meanings assigned
to them in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes are and will be equally and ratably secured by
the Class A Collateral pledged as security therefor as provided in the Indenture
and the Series 1995-1 Supplement.
Principal of the Class A-1 Notes will be payable on each Payment
Date specified in and in the amounts described in the Indenture. "Payment Date"
means the 25th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing ______________, 199_.
As described above, the entire unpaid principal amount of this Class
A-1 Note shall be due and payable on the Series 1995-1 Termination Date.
Notwithstanding the foregoing, if an Amortization Event, Liquidation Event of
Default, Waiver Event or Series 1995-1 Limited Liquidation Event of Default
shall have occurred and be continuing then, in certain circumstances, principal
on the Class A-1 Notes may be paid earlier, as described in the Indenture. All
principal payments on the Class A-1 Notes shall be made pro rata to the
Noteholders entitled thereto.
Payments of interest on this Class A-1 Note due and payable on each
Payment Date, together with the installment of principal then due, if any, to
the extent not in full payment of this Class A-1 Note, shall be made by check
mailed first class to the Person whose name appears as the Holder of record of
this Class A-1 Note (or one or more predecessor Class A-1 Notes) on the Note
Register as of the close of business on each Record Date, except that with
respect to Class A-1 Notes registered on the Record Date in the name of the
nominee of the Clearing Agency
A-1-5
<PAGE> 70
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Class A-1 Note be submitted for notation
of payment. Any reduction in the principal amount of this Class A-1 Note (or any
one or more predecessor Class A-1 Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Class A-1 Note and
of any Class A-1 Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon or thereon. If
funds are expected to be available, as provided in the Indenture, for payment in
full of the then remaining unpaid principal amount of this Class A-1 Note on a
Payment Date, then the Trustee, in the name of and on behalf of the Company,
will notify the Person who was the registered Holder hereof as of the Record
Date preceding such Payment Date by notice mailed within five (5) days of such
Payment Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Class A-1 Note at the Trustee's principal
Corporate Trust Office.
The Company shall pay interest on overdue installments of interest
at the Class A-1 Rate to the extent lawful.
As provided in the Indenture, the Class A-1 Notes may be redeemed,
in whole, but not in part, at the option of the Company, on any Payment Date. A
Series 1995-1 Note Prepayment Premium will be payable to holders of the Class
A-1 Notes if the Company repurchases any Class A-1 Notes prior to the date on
which the Aggregate Principal Balance of the Class A-1 Notes is less than
$__________.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A-1 Note may be registered on the Note
Register upon surrender of this Class A-1 Note for registration of transfer at
the office or agency designated by the Company pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or its attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such certificates and other
documents as are required pursuant to the Indenture and as the Trustee may
reasonably require, and thereupon one or more new Class A-1 Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service
A-1-6
<PAGE> 71
charge will be charged for any registration of transfer or exchange of this
Class A-1 Note, but the transferor may be required to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Class A-1 Note or,
in the case of a Note Owner, a beneficial interest in a Class A-1 Note covenants
and agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Company, the Servicer or the Trustee on the Class A-1
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Trustee or the Servicer in its individual
capacity, (ii) any owner of a beneficial interest in the Company or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the Trustee
or the Servicer in its individual capacity, any holder of a beneficial interest
in the Company, the Servicer or the Trustee or of any successor or assign of the
Trustee or the Servicer in its individual capacity, except (a) as any such
Person may have expressly agreed and (b) any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Company for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Class A-1 Note, subject to
Section 12.17 of the Base Indenture.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
by accepting the benefits of the Indenture that such Noteholder will not for a
period of one year and one day following payment in full of all Notes institute
against the Company, or join in any institution against the Company of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Related
Documents.
Prior to the due presentment for registration of transfer of this
Class A-1 Note, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Class A-1 Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Class A-1
Note be overdue, and neither the Company, the
A-1-7
<PAGE> 72
Trustee nor any such agent shall be affected by notice to the contrary.
It is the intent of the Company and the Noteholders that, for
Federal, state and local income and franchise tax purposes only, the Class A-1
Notes will evidence indebtedness of the Company secured by the Class A
Collateral. The Noteholders, by the acceptance of this Class A-1 Note, agree to
treat this Class A-1 Note for Federal, state and local income and franchise tax
purposes as indebtedness of the Company.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Series 1995-1 Notes under the
Indenture at any time by the Company with the consent of the Holders of Series
1995-1 Notes representing more than 50% in principal amount of the Outstanding
Series 1995-1 Notes which are affected by such amendment or modification. The
Indenture also contains provisions permitting the Holders of Series 1995-1 Notes
representing specified percentages of the Outstanding Series 1995-1 Notes, on
behalf of the Holders of all the Series 1995-1 Notes, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Class A-1 Note (or any one of more predecessor Class A-1 Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class A-1 Note and of any Class A-1 Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Class A-1 Note. The Indenture also
permits the Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Series 1995-1 Notes issued
thereunder.
The term "Company" as used in this Class A-1 Note includes any
successor to the Company under the Indenture.
The Class A-1 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations set
forth therein.
This Class A-1 Note and the Indenture shall be construed in
accordance with the law of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
law.
No reference herein to the Indenture and no provision of this Class
A-1 Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and
A-1-8
<PAGE> 73
unconditional, to pay the principal of and interest on this Class A-1 Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Interests in this Class A-1 Note may be exchanged for Definitive Notes,
subject to the provisions of the Indenture.
A-1-9
<PAGE> 74
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
___________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto__________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Class A-1 Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________________, attorney, to transfer said
Class A-1 Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: ___________________ ________________________________________*
Signature Guaranteed:
_________________________________________
__________________________
- --------
* NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-1-10
<PAGE> 75
EXHIBIT A-2
TO
SERIES 1995-1 SUPPLEMENT
FORM OF TEMPORARY GLOBAL CLASS A-1 NOTE
REGISTERED $____________**
No. R-
SEE REVERSE FOR CERTAIN CONDITIONS
CUSIP (CINS) NO. __________
ISIN NO. __________
THIS CLASS A-1 NOTE IS A TEMPORARY GLOBAL NOTE, WITHOUT COUPONS,
EXCHANGEABLE FOR A PERMANENT GLOBAL NOTE WHICH IS, UNDER CERTAIN CIRCUMSTANCES,
IN TURN, EXCHANGEABLE FOR DEFINITIVE NOTES WITHOUT COUPONS. THE RIGHTS ATTACHING
TO THIS CLASS A-1 NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
EXCHANGE, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CLASS A-1 NOTE, AGREES FOR THE
BENEFIT OF THRIFTY CAR RENTAL FINANCE CORPORATION (THE "COMPANY") THAT THIS
CLASS A-1 NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE
COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (3) OUTSIDE THE UNITED STATES TO A NON U.S. PERSON (AS DEFINED IN
REGULATION S OF THE SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH
REGULATION S OF THE SECURITIES ACT, OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, IN EACH CASE IN COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
- ----------
** Denominations of $250,000 and integral multiples of $1,000.
<PAGE> 76
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.19 OF THE BASE INDENTURE,
THIS CLASS A-1 NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO
ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR CLEARING AGENCY OR TO A
NOMINEE OF SUCH SUCCESSOR CLEARING AGENCY. UNLESS THIS CLASS A-1 NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THRIFTY CAR RENTAL FINANCE CORPORATION OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS A-1 NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN 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.
THE PRINCIPAL OF THIS CLASS A-1 NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-1 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
INTERESTS IN THIS CLASS A-1 NOTE MAY ONLY BE HELD BY NON U.S.
PERSONS AS SUCH TERM IS DEFINED IN REGULATION S OF THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY ONLY BE HELD IN BOOK-ENTRY FORM THROUGH EUROCLEAR OR CEDEL.
Thrifty Car Rental Finance Corporation
FLOATING RATE RENTAL CAR ASSET BACKED NOTES, CLASS A-1
Thrifty Car Rental Finance Corporation, a Delaware corporation
(herein referred to as the "Company"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of [ ] DOLLARS, (or
such lesser amount as shall be the outstanding principal amount of this Class
A-1 Note shown in Schedule A hereto) which amount shall be payable in the
amounts and at the times set forth in the Indenture, provided, however, that the
entire unpaid principal amount of this Class A-1 Note shall be due on the Series
1995-1 Termination Date, which is the ____________ Payment Date. However,
principal with respect to the Class A-1 Notes may be paid earlier or later under
certain limited circumstances described in the Indenture. The Company will pay
interest on this Class A-1 Note at the Class A-1 Rate. Such interest shall be
payable on each Payment Date until the principal of this Class A-1 Note is paid
or made available for payment, on the principal amount of this Class A-1 Note
outstanding on the preceding Payment Date (after giving effect to all payments
of principal made on the preceding Payment Date). Interest on this Class A-1
Note will accrue for each Payment Date from the most recent
A-2-2
<PAGE> 77
Payment Date on which interest has been paid to but excluding such Payment Date
or, if no interest has yet been paid, from __________ __, 199_. Interest will be
computed on the basis of the actual number of days elapsed and a 360-day year.
Such principal of and interest on this Class A-1 Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Class A-1 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Company with respect to this Class A-1 Note shall be applied first to
interest due and payable on this Class A-1 Note as provided above and then to
the unpaid principal of this Class A-1 Note. This Class A-1 Note does not
represent an interest in, or an obligation of, the Servicer, or any affiliate of
the Servicer other than the Company.
Interests in this Class A-1 Note are exchangeable or transferable in
whole or in part for interests in a Restricted Global Note if this Class A-1
Note is a Temporary Global Note, or for interests in a Temporary Global Note or
a Permanent Global Note if this Class A-1 Note is a Restricted Global Note (each
as defined in the Base Indenture), in each case of the same Series and class,
provided that such transfer or exchange complies with Article 2 of the Base
Indenture. Interests in this Class A-1 Note may not be exchanged for definitive
registered Notes.
Reference is made to the further provisions of this Class A-1 Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class A-1 Note. Although a summary of
certain provisions of the Indenture are set forth below and on the reverse
hereof and made a part hereof, this Class A-1 Note does not purport to summarize
the Indenture and reference is made to the Indenture for information with
respect to the interests, rights, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Servicer and the
Trustee. A copy of the Indenture may be requested from the Trustee by writing to
the Trustee at: 4 Albany Street, New York, New York 10006, Attn: Corporate Trust
and Agency Group. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class A-1 Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-2-3
<PAGE> 78
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: ___________ THRIFTY CAR RENTAL FINANCE
CORPORATION
By:______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Notes of a series issued under the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:______________________________________
Authorized Signature
A-2-4
<PAGE> 79
[REVERSE OF CLASS A-1 NOTE]
This Class A-1 Note is one of a duly authorized issue of Class A-1
Notes of the Company, designated as its Floating Rate Rental Car Asset Backed
Notes, Class A-1 (herein called the "Class A-1 Notes"), all issued under (i) a
Base Indenture dated as of December 13, 1995 (such Base Indenture, as amended or
modified, is herein called the "Base Indenture"), between the COMPANY and
BANKERS TRUST COMPANY, as trustee (the "Trustee", which term includes any
successor Trustee under the Base Indenture), and (ii) a Series 1995-1 Supplement
dated as of December 13, 1995, 1994 (the "Series 1995-1 Supplement") between the
Company and the Trustee. The Base Indenture and the Series 1995-1 Supplement are
referred to herein as the "Indenture". The Class A-1 Notes are subject to all
terms of the Indenture. All terms used in this Class A-1 Note that are defined
in the Indenture, as supplemented or amended, shall have the meanings assigned
to them in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes are and will be equally and ratably secured by
the Class A Collateral pledged as security therefor as provided in the Indenture
and the Series 1995-1 Supplement.
Principal of the Class A-1 Notes will be payable on each Payment
Date specified in and in the amounts described in the Indenture. "Payment Date"
means the 25th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing __________ __, 199_.
As described above, the entire unpaid principal amount of this Class
A-1 Note shall be due and payable on the Series 1995-1 Termination Date.
Notwithstanding the foregoing, if an Amortization Event, Liquidation Event of
Default, Waiver Event or Series 1995-1 Limited Liquidation Event of Default
shall have occurred and be continuing then, in certain circumstances, principal
on the Class A-1 Notes may be paid earlier, as described in the Indenture. All
principal payments on the Class A-1 Notes shall be made pro rata to the
Noteholders entitled thereto.
Payments of interest on this Class A-1 Note due and payable on each
Payment Date, together with the installment of principal then due, if any, to
the extent not in full payment of this Class A-1 Note, shall be made by check
mailed first class to the Person whose name appears as the Holder of record of
this Class A-1 Note (or one or more predecessor Class A-1 Notes) on the Note
Register as of the close of business on each Record Date, except that with
respect to Class A-1 Notes registered on the Record Date in the name of the
nominee of the Clearing Agency
A-2-5
<PAGE> 80
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Class A-1 Note be submitted for notation
of payment. Any reduction in the principal amount of this Class A-1 Note (or any
one or more predecessor Class A-1 Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Class A-1 Note and
of any Class A-1 Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted thereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Class A-1 Note on a Payment
Date, then the Trustee, in the name of and on behalf of the Company, will notify
the Person who was the registered Holder hereof as of the Record Date preceding
such Payment Date by notice mailed within five (5) days of such Payment Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Class A-1 Note at the Trustee's principal Corporate Trust
Office.
The Company shall pay interest on overdue installments of interest
at the Class A-1 Rate to the extent lawful.
As provided in the Indenture, the Class A-1 Notes may be redeemed,
in whole, but not in part, at the option of the Servicer, on any Payment Date. A
Series 1995-1 Note Prepayment Premium will be payable to holders of the Class
A-1 Notes if the Company repurchases any Series 1995-1 Notes prior to the date
on which the Invested Amount is less than or equal to $_________.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A-1 Note may be registered on the Note
Register upon surrender of this Class A-1 Note for registration of transfer at
the office or agency designated by the Company pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the Trustee
may reasonably require, and thereupon one or more new Class A-1 Notes of
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Class A-1 Note, but
the transferor may be
A-2-6
<PAGE> 81
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Class A-1 Note or,
in the case of a Note Owner, a beneficial interest in a Class A-1 Note covenants
and agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Company, the Servicer or the Trustee on the Class A-1
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Trustee or the Servicer in its individual
capacity, (ii) any owner of a beneficial interest in the Company or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the Trustee
or the Servicer in its individual capacity, any holder of a beneficial interest
in the Company, the Servicer or the Trustee or of any successor or assign of the
Trustee or the Servicer in its individual capacity, except (a) as any such
Person may have expressly agreed and (b) any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Company for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Class A-1 Note, subject to
Section 12.17 of the Base Indenture.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
by accepting the benefits of the Indenture that such Noteholder will not for a
period of one year and one day following payment in full of all Notes institute
against the Company, or join in any institution against the Company of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Related
Documents.
Prior to the due presentment for registration of transfer of this
Class A-1 Note, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Class A-1 Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Class A-1
Note be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
A-2-7
<PAGE> 82
It is the intent of the Company and the Noteholders that, for
Federal, state and local income and franchise tax purposes only, the Class A-1
Notes will evidence indebtedness of the Company secured by the Class A
Collateral. The Noteholders, by the acceptance of this Class A-1 Note, agree to
treat this Class A-1 Note for Federal, state and local income and franchise tax
purposes as indebtedness of the Company.
Each Holder of this Class A-1 Note shall provide to the Trustee at
least annually an appropriate statement (on Internal Revenue Service Form W-8 or
suitable substitute) with respect to United States federal income tax and
withholding tax, signed under penalties of perjury, certifying that the
beneficial owner of this Class A-1 Note is a non U.S. person and providing the
Noteholder's name and address. If the information provided in the statement
changes, the Noteholder shall so inform the Trustee within thirty (30) days of
such change.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Series 1995-1 Notes under the
Indenture at any time by the Company with the consent of the Holders of Series
1995-1 Notes representing more than 50% in principal amount of the Outstanding
Series 1995-1 Notes which are affected by such amendment or modification. The
Indenture also contains provisions permitting the Holders of Series 1995-1 Notes
representing specified percentages of the Outstanding Series 1995-1 Notes, on
behalf of the Holders of all the Series 1995-1 Notes, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Class A-1 Note (or any one of more predecessor Class A-1 Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class A-1 Note and of any Class A-1 Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Class A-1 Note. The Indenture also
permits the Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Series 1995-1 Notes issued
thereunder.
The term "Company" as used in this Class A-1 Note includes any
successor to the Company under the Indenture.
The Class A-1 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations set
forth therein.
This Class A-1 Note and the Indenture shall be construed in
accordance with the law of the State of New York,
A-2-8
<PAGE> 83
without reference to its conflict of law provisions, and the obligations, rights
and remedies of the parties hereunder and thereunder shall be determined in
accordance with such law.
No reference herein to the Indenture and no provision of this Class
A-1 Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Class A-1 Note at the times, place, and rate, and in the coin
or currency herein prescribed.
Prior to the Exchange Date (as defined below), payments (if any) on
this Class A-1 Note will only be paid to the extent that there is presented by
Cedel Bank, societe anonyme ("Cedel") or Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euroclear System ("Euroclear") to the
Trustee at its office in London a certificate, substantially in the form set out
in Exhibit E to the Base Indenture, to the effect that it has received from or
in respect of a person entitled to a Note (as shown by its records) a
certificate from such person in or substantially in the form of Exhibit F to the
Base Indenture. After the Exchange Date the holder of this Class A-1 Note will
not be entitled to receive any payment hereon, until this Class A-1 Note is
exchanged in full for a Permanent Global Note. This Class A-1 Note shall in all
other respects be entitled to the same benefits as the Permanent Global Notes
under the Indenture.
On or after the date (the "Exchange Date") which is the date that is
the 40th day after the completion of the distribution of the relevant Series,
interests in this Class A-1 Note may be exchanged (free of charge) for interests
in a Permanent Global Note in the form of Exhibit A-3 to the Series 1995-1
Supplement upon presentation of this Class A-1 Note at the office in London of
the Trustee (or at such other place outside the United States of America, its
territories and possessions as the Trustee may agree). The Permanent Global Note
shall be so issued and delivered in exchange for only that portion of this Class
A-1 Note in respect of which there shall have been presented to the Trustee by
Euroclear or Cedel a certificate, substantially in the form set out in Exhibit E
to the Base Indenture, to the effect that it has received from or in respect of
a person entitled to a Note (as shown by its records) a certificate from such
person in or substantially in the form of Exhibit F the Base Indenture.
On an exchange of the whole of this Class A-1 Note, this Class A-1
Note shall be surrendered to the Trustee at its office in London. On an exchange
of part only of this Class A-1 Note, details of such exchange shall be entered
by or on behalf of the Company in Schedule A hereto and the relevant space in
Schedule A hereto recording such exchange shall be signed by or
A-2-9
<PAGE> 84
on behalf of the Company. If, following the issue of a Permanent Global Note in
exchange for some of the Notes represented by this Class A-1 Note, further Notes
of this Series are to be exchanged pursuant to this paragraph, such exchange may
be effected, without the issue of a new Permanent Global Note, by the Company or
its agent endorsing Part I of Schedule A of the Permanent Global Note previously
issued to reflect an increase in the aggregate principal amount of such
Permanent Global Note by an amount equal to the aggregate principal amount of
the additional Notes of this Series to be exchanged.
Interests in this Class A-1 Note will be transferable in accordance
with the rules and procedures for the time being of Euroclear or Cedel. Each
person who is shown in the records of Euroclear and Cedel as entitled to a
particular number of Notes by way of an interest in this Class A-1 Note will be
treated by the Company, the Trustee and any paying agent as the holder of such
number of Notes. For purposes of this Class A-1 Note, the securities account
records of Euroclear or Cedel shall, in the absence of manifest error, be
conclusive evidence of the identity of the holders of Notes and of the principal
amount of Notes represented by this Class A-1 Note credited to the securities
accounts of such holders of Notes. Any statement issued by Euroclear or Cedel to
any holder relating to a specified Note or Notes credited to the securities
account of such holder and stating the principal amount of such Note or Notes
and certified by Euroclear or Cedel to be a true record of such securities
account shall, in the absence of manifest error, be conclusive evidence of the
records of Euroclear or Cedel for the purposes of the next preceding sentence
(but without prejudice to any other means of producing such records in
evidence). Notwithstanding any provision to the contrary contained in this Class
A-1 Note, the Company irrevocably agrees, for the benefit of such holder and its
successors and assigns, that, subject to the provisions of the Indenture, each
holder or its successors or assigns may file any claim, take any action or
institute any proceeding to enforce, directly against the Company, the
obligation of the Company hereunder to pay any amount due in respect of each
Note represented by this Class A-1 Note which is credited to such holder's
securities account with Euroclear or Cedel without the production of this Class
A-1 Note.
A-2-10
<PAGE> 85
SCHEDULE A
SCHEDULE OF EXCHANGES FOR NOTES
REPRESENTED BY A PERMANENT GLOBAL NOTE
The following exchanges of a part of this Class A-1 Note for Notes represented
by a Permanent Global Note have been made:
================================================================================
Part of principal
amount of this Remaining
Class A-1 Note Principal
exchanged for Notes amount of this Notation made
Date represented by a Class A-1 Note by or on
exchange Permanent Global following such behalf of the
made Note exchange Company
- --------------------------------------------------------------------------------
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A-2-11
<PAGE> 86
EXHIBIT A-3
TO
SERIES 1995-1 SUPPLEMENT
FORM OF PERMANENT GLOBAL CLASS A-1 NOTE
REGISTERED $_____________***
No. R-
SEE REVERSE FOR CERTAIN CONDITIONS
CUSIP (CINS) NO. ___________
ISIN NO. ___________
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CLASS A-1 NOTE, AGREES FOR THE
BENEFIT OF THRIFTY CAR RENTAL FINANCE CORPORATION (THE "COMPANY") THAT THIS
CLASS A-1 NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE
COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (3) OUTSIDE THE UNITED STATES TO A NON U.S. PERSON (AS DEFINED IN
REGULATION S OF THE SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH
REGULATION S OF THE SECURITIES ACT, OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, IN EACH CASE IN COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.19 OF THE BASE INDENTURE,
THIS CLASS A-1 NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO
ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR CLEARING AGENCY OR TO A
NOMINEE OF SUCH SUCCESSOR CLEARING AGENCY. UNLESS THIS CLASS A-1 NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THRIFTY CAR RENTAL
- ----------
*** Denominations of $250,000 and integral multiples of $1,000.
<PAGE> 87
FINANCE CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CLASS A-1 NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN 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 IN AS MUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS CLASS A-1 NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-1 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
Thrifty Car Rental Finance Corporation
FLOATING RATE RENTAL CAR ASSET BACKED NOTES, CLASS A-1
Thrifty Car Rental Finance Corporation, a Delaware corporation
(herein referred to as the "Company"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of [ ] DOLLARS,
which amount shall be payable in the amounts and at the times set forth in the
Indenture, provided, however, that the entire unpaid principal amount of this
Class A-1 Note shall be due on the Series 1995-1 Termination Date, which is the
___________ Payment Date. However, principal with respect to the Class A-1 Notes
may be paid earlier or later under certain limited circumstances described in
the Indenture. The Company will pay interest on this Class A-1 Note at the Class
A-1 Rate. Such interest shall be payable on each Payment Date until the
principal of this Class A-1 Note is paid or made available for payment, on the
principal amount of this Class A-1 Note outstanding on the preceding Payment
Date (after giving effect to all payments of principal made on the preceding
Payment Date). Interest on this Class A-1 Note will accrue for each Payment Date
from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from
__________ __, 199_. Interest will be computed on the basis of the actual number
of days elapsed and a 360-day year. Such principal of and interest on this Class
A-1 Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Class A-1 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Company with respect to this Class A-1 Note shall be applied first to
interest due and payable on this Class A-1 Note as provided above and then to
the unpaid principal of this Class A-1 Note. This Class A-1
A-3-2
<PAGE> 88
Note does not represent an interest in, or an obligation of, the Servicer, or
any affiliate of the Servicer other than the Company.
Reference is made to the further provisions of this Class A-1 Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class A-1 Note. Although a summary of
certain provisions of the Indenture are set forth below and on the reverse
hereof and made a part hereof, this Class A-1 Note does not purport to summarize
the Indenture and reference is made to the Indenture for information with
respect to the interests, right, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Servicer and the
Trustee. A copy of the Indenture may be requested from the Trustee by writing to
the Trustee at: 4 Albany Street, New York, New York 10006, Attn: Corporate Trust
and Agency Group. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class A-1 Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-3-3
<PAGE> 89
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: ___________________ THRIFTY CAR RENTAL FINANCE
CORPORATION
By:_______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Notes of a series issued under the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_______________________________________
Authorized Signature
A-3-4
<PAGE> 90
[REVERSE OF CLASS A-1 NOTE]
This Class A-1 Note is one of a duly authorized issue of Class A-1
Notes of the Company, designated as its Floating Rate Rental Car Asset Backed
Notes, Class A (herein called the "Class A-1 Notes"), all issued under (i) a
Base Indenture dated as of December 13, 1995 (such Base Indenture, as amended or
modified, is herein called the "Base Indenture"), between the COMPANY and
BANKERS TRUST COMPANY, as trustee, (the "Trustee", which term includes any
successor Trustee under the Base Indenture), and (ii) a Series 1995-1 Supplement
dated as of December 13, 1995, (the "Series 1995-1 Supplement") between the
Company and the Trustee. The Base Indenture and the Series 1995-1 Supplement are
referred to herein as the "Indenture". The Class A-1 Notes are subject to all
terms of the Indenture. All terms used in this Class A-1 Note that are defined
in the Indenture, as supplemented or amended, shall have the meanings assigned
to them in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes are and will be equally and ratably secured by
the Class A Collateral pledged as security therefor as provided in the Indenture
and the Series 1995-1 Supplement.
Principal of the Class A-1 Notes will be payable on each Payment
Date specified in and in the amounts described in the Indenture. "Payment Date"
means the 25th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing ________, 199_.
As described above, the entire unpaid principal amount of this Class
A-1 Note shall be due and payable on the Series 1995-1 Termination Date.
Notwithstanding the foregoing, if an Amortization Event, Liquidation Event of
Default, Waiver Event or Series 1995-1 Limited Liquidation Event of Default
shall have occurred and be continuing then, in certain circumstances, principal
on the Class A-1 Notes may be paid earlier, as described in the Indenture. All
principal payments on the Class A-1 Notes shall be made pro rata to the
Noteholders entitled thereto.
Payments of interest on this Class A-1 Note due and payable on each
Payment Date, together with the installment of principal then due, if any, to
the extent not in full payment of this Class A-1 Note, shall be made by check
mailed first class to the Person whose name appears as the Holder of record of
this Class A-1 Note (or one or more predecessor Class A-1 Notes) on the Note
Register as of the close of business on each Record Date, except that with
respect to Class A-1 Notes registered on the Record Date in the name of the
nominee of the Clearing Agency
A-3-5
<PAGE> 91
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Class A-1 Note be submitted for notation
of payment. Any reduction in the principal amount of this Class A-1 Note (or any
one or more predecessor Class A-1 Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Class A-1 Note and
of any Class A-1 Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted thereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Class A-1 Note on a Payment
Date, then the Trustee, in the name of and on behalf of the Company, will notify
the Person who was the registered Holder hereof as of the Record Date preceding
such Payment Date by notice mailed within five (5) days of such Payment Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Class A-1 Note at the Trustee's principal Corporate Trust
Office.
The Company shall pay interest on overdue installments of interest
at the Class A-1 Rate to the extent lawful.
As provided in the Indenture, the Class A-1 Notes may be redeemed,
in whole, but not in part, at the option of the Servicer, on any Payment Date. A
Series 1995-1 Note Prepayment Premium will be payable to holders of the Class
A-1 Notes if the Company repurchases any Series 1995-1 Notes prior to the date
on which the Invested Amount is less than or equal to $__________.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A-1 Note may be registered on the Note
Register upon surrender of this Class A-1 Note for registration of transfer at
the office or agency designated by the Company pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the Trustee
may reasonably require, and thereupon one or more new Class A-1 Notes of
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Class A-1 Note, but
the transferor may be
A-3-6
<PAGE> 92
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Class A-1 Note or,
in the case of a Note Owner, a beneficial interest in a Class A-1 Note covenants
and agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Company, the Servicer or the Trustee on the Class A-1
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Trustee or the Servicer in its individual
capacity, (ii) any owner of a beneficial interest in the Company or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the Trustee
or the Servicer in its individual capacity, any holder of a beneficial interest
in the Company, the Servicer or the Trustee or of any successor or assign of the
Trustee or the Servicer in its individual capacity, except (a) as any such
Person may have expressly agreed and (b) any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Company for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Class A-1 Note, subject to
Section 12.17 of the Base Indenture.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
by accepting the benefits of the Indenture that such Noteholder will not for a
period of one year and one day following payment in full of all Notes institute
against the Company, or join in any institution against the Company of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Related
Documents.
Prior to the due presentment for registration of transfer of this
Class A-1 Note, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Class A-1 Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Class A-1
Note be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
A-3-7
<PAGE> 93
It is the intent of the Company and the Noteholders that, for
Federal, state and local income and franchise tax purposes only, the Class A-1
Notes will evidence indebtedness of the Company secured by the Class A
Collateral. The Noteholders, by the acceptance of this Class A-1 Note, agree to
treat this Class A-1 Note for Federal, state and local income and franchise tax
purposes as indebtedness of the Company.
In the event a Noteholder or Note Owner is a nonresident alien,
foreign corporation or other non-United States person (a "Foreign Person"), such
Foreign Person shall provide to the Trustee at least annually an appropriate
statement (on Internal Revenue Service Form W-8 or suitable substitute) with
respect to United States federal income tax and withholding tax, signed under
penalties of perjury, certifying that the beneficial owner of this Class A-1
Note is a Foreign Person and providing the Noteholder's name and address. If the
information provided in the statement changes, the Foreign Person shall so
inform the Trustee within thirty (30) days of such change.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Series 1995-1 Notes under the
Indenture at any time by the Company with the consent of the Holders of Series
1995-1 Notes representing more than 50% in principal amount of the Outstanding
Series 1995-1 Notes which are affected by such amendment or modification. The
Indenture also contains provisions permitting the Holders of Series 1995-1 Notes
representing specified percentages of the Outstanding Series 1995-1 Notes, on
behalf of the Holders of all the Series 1995-1 Notes, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Class A-1 Note (or any one of more predecessor Class A-1 Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class A-1 Note and of any Class A-1 Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Class A-1 Note. The Indenture also
permits the Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Series 1995-1 Notes issued
thereunder.
The term "Company" as used in this Class A-1 Note includes any
successor to the Company under the Indenture.
The Class A-1 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations set
forth therein.
A-3-8
<PAGE> 94
This Class A-1 Note and the Indenture shall be construed in
accordance with the law of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
law.
No reference herein to the Indenture and no provision of this Class
A-1 Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Class A-1 Note at the times, place, and rate, and in the coin
or currency herein prescribed.
Interests in this Class A-1 Note will be transferable in accordance
with the rules and procedures for the time being of Euroclear or Cedel. Each
person who is shown in the records of Euroclear and Cedel as entitled to a
particular number of Notes by way of an interest in this Class A-1 Note will be
treated by the Trustee and any paying agent as the holder of such number of
Notes. For purposes of this Class A-1 Note, the securities account records of
Euroclear or Cedel shall, in the absence of manifest error, be conclusive
evidence of the identity of the holders of Notes and of the principal amount of
Notes represented by this Class A-1 Note credited to the securities accounts of
such holders of Notes. Any statement issued by Euroclear or Cedel to any holder
relating to a specified Note or Notes credited to the securities account of such
holder and stating the principal amount of such Note or Notes and certified by
Euroclear or Cedel to be a true record of such securities account shall, in the
absence of manifest error, be conclusive evidence of the records of Euroclear or
Cedel for the purposes of the next preceding sentence (but without prejudice to
any other means of producing such records in evidence). Notwithstanding any
provision to the contrary contained in this Class A-1 Note, the Company
irrevocably agrees, for the benefit of such holder and its successors and
assigns, that, subject to the provisions of the Indenture, each holder or its
successors or assigns may file any claim, take any action or institute any
proceeding to enforce, directly against the Company, the obligation of the
Company hereunder to pay any amount due in respect of each Note represented by
this Class A-1 Note which is credited to such holder's securities account with
Euroclear or Cedel without the production of this Class A-1 Note.
Interests in this Class A-1 Note may be exchanged for Definitive
Notes subject to the provisions of the Indenture.
A-3-9
<PAGE> 95
EXHIBIT A-4
TO
SERIES 1995-1 SUPPLEMENT
FORM OF RESTRICTED GLOBAL CLASS A-2 NOTE
REGISTERED $ ____________****
No. R-
SEE REVERSE FOR CERTAIN CONDITIONS
CUSIP (CINS) NO. ____________
ISIN NO. ____________
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CLASS A-2 NOTE, AGREES FOR THE
BENEFIT OF THRIFTY CAR RENTAL FINANCE CORPORATION (THE "COMPANY") THAT THIS
CLASS A-1 NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE
COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (3) OUTSIDE THE UNITED STATES TO A NON U.S. PERSON (AS DEFINED IN
REGULATION S OF THE SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH
REGULATION S OF THE SECURITIES ACT, OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, IN EACH CASE IN COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.19 OF THE BASE INDENTURE,
THIS CLASS A-2 NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO
ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR CLEARING AGENCY OR TO A
NOMINEE OF SUCH SUCCESSOR CLEARING AGENCY. UNLESS THIS CLASS A-2 NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THRIFTY CAR RENTAL FINANCE CORPORATION OR ITS AGENT
FOR REGISTRATION OF TRANSFER,
- ----------
**** Denominations of $250,000 and integral multiples of $1,000.
<PAGE> 96
EXCHANGE OR PAYMENT, AND ANY CLASS A-2 NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN 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.
THE PRINCIPAL OF THIS CLASS A-2 NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-2 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
Thrifty Car Rental Finance Corporation
FLOATING RATE RENTAL CAR ASSET BACKED NOTES, CLASS A-2
Thrifty Car Rental Finance Corporation, a Delaware corporation
(herein referred to as the "Company"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of [ ] DOLLARS,
which amount shall be payable in the amounts and at the times set forth in the
Indenture, provided, however, that the entire unpaid principal amount of this
Class A-2 Note shall be due on the Series 1995-1 Termination Date, which is the
August 2001 Payment Date. However, principal with respect to the Class A-2 Notes
may be paid earlier or later under certain limited circumstances described in
the Indenture. The Company will pay interest on this Class A-2 Note, at the
Class A-2 Rate. Such interest shall be payable on each Payment Date until the
principal of this Class A-2 Note is paid or made available for payment, on the
principal amount of this Class A-2 Note outstanding on the preceding Payment
Date (after giving effect to all payments of principal made on the preceding
Payment Date). Interest on this Class A-2 Note will accrue for each Payment Date
from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from
______________ __, 199_. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. Such principal of and interest on this Class A-2
Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Class A-2 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Company with respect to this Class A-2 Note shall be applied first to
interest due and payable on this Class A-2 Note as provided above and then to
the unpaid principal of this Class A-2 Note. This Class A-2 Note does not
represent an interest in, or an obligation of, the
A-4-2
<PAGE> 97
Servicer, or any affiliate of the Servicer other than the Company.
Interests in this Class A-2 Note are exchangeable or transferable in
whole or in part for interests in a Restricted Global Note if this Class A-2
Note is a Temporary Global Note, or for interests in a Temporary Global Note or
a Permanent Global Note if this Class A-2 Note is a Restricted Global Note (each
as defined in the Base Indenture), in each case of the same Series and class,
provided that such transfer or exchange complies with Article 2 of the Base
Indenture. Interests in this Class A-2 Note may be exchangeable in whole or in
part for duly executed and issued definitive registered Notes if so provided in
Article 2 of the Base Indenture, with the applicable legends as marked therein,
subject to the provisions of the Base Indenture.
Reference is made to the further provisions of this Class A-2 Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class A-2 Note. Although a summary of
certain provisions of the Indenture are set forth below and on the reverse
hereof and made a part hereof, this Class A-2 Note does not purport to summarize
the Indenture and reference is made to the Indenture for information with
respect to the interests, rights, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Servicer and the
Trustee. A copy of the Indenture may be requested from the Trustee by writing to
the Trustee at: 4 Albany Street, New York, New York 10006, Attn: Corporate Trust
and Agency Group. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class A-2 Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
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<PAGE> 98
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: ___________________ THRIFTY CAR RENTAL FINANCE
CORPORATION
By:_______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Notes of a series issued under the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:______________________________________
Authorized Signature
A-4-4
<PAGE> 99
[REVERSE OF CLASS A-2 NOTE]
This Class A-2 Note is one of a duly authorized issue of Class A-2
Notes of the Company, designated as its Floating Rate Rental Car Asset Backed
Notes, Class A-2 (herein called the "Class A-2 Notes"), all issued under (i) a
Base Indenture dated as of December 13, 1995 (such Base Indenture, as amended or
modified, is herein called the "Base Indenture"), between the COMPANY and
BANKERS TRUST COMPANY, as trustee (the "Trustee", which term includes any
successor Trustee under the Base Indenture), and (ii) a Series 1995-1 Supplement
dated as of December 13, 1995 (the "Series 1995-1 Supplement") between the
Company and the Trustee. The Base Indenture and the Series 1995-1 Supplement are
referred to herein as the "Indenture". The Class A-2 Notes are subject to all
terms of the Indenture. All terms used in this Class A-2 Note that are defined
in the Indenture, as supplemented or amended, shall have the meanings assigned
to them in or pursuant to the Indenture, as so supplemented or amended.
The Class A-2 Notes are and will be equally and ratably secured by
the Class A Collateral pledged as security therefor as provided in the Indenture
and the Series 1995-1 Supplement.
Principal of the Class A-2 Notes will be payable on each Payment
Date specified in and in the amounts described in the Indenture. "Payment Date"
means the 25th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, ___________ __, 199_.
As described above, the entire unpaid principal amount of this Class
A-2 Note shall be due and payable on the Series 1995-1 Termination Date.
Notwithstanding the foregoing, if an Amortization Event, Liquidation Event of
Default, Waiver Event or Series 1995-1 Limited Liquidation Event of Default
shall have occurred and be continuing then, in certain circumstances, principal
on the Class A-2 Notes may be paid earlier, as described in the Indenture. All
principal payments on the Class A-2 Notes shall be made pro rata to the
Noteholders entitled thereto.
Payments of interest on this Class A-2 Note due and payable on each
Payment Date, together with the installment of principal then due, if any, to
the extent not in full payment of this Class A-2 Note, shall be made by check
mailed first class to the Person whose name appears as the Holder of record of
this Class A-2 Note (or one or more predecessor Class A-2 Notes) on the Note
Register as of the close of business on each Record Date, except that with
respect to Class A-2 Notes registered on the Record Date in the name of the
nominee of the Clearing Agency
A-4-5
<PAGE> 100
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Class A-2 Note be submitted for notation
of payment. Any reduction in the principal amount of this Class A-2 Note (or any
one or more predecessor Class A-2 Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Class A-2 Note and
of any Class A-2 Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted thereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Class A-2 Note on a Payment
Date, then the Trustee, in the name of and on behalf of the Company, will notify
the Person who was the registered Holder hereof as of the Record Date preceding
such Payment Date by notice mailed within five (5) days of such Payment Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Class A-2 Note at the Trustee's principal Corporate Trust
Office.
The Company shall pay interest on overdue installments of interest
at the Class A-2 Rate to the extent lawful.
As provided in the Indenture, the Class A-2 Notes may be redeemed,
in whole, but not in part, at the option of the Company, on any Payment Date. A
Series 1995-1 Note Prepayment Premium will be payable to holders of the Class
A-2 Notes if the Company repurchases any Series Class A-2 Notes prior to the
date on which the Aggregate Principal Balance of the Class A-2 Notes is less
than $_________.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A-2 Note may be registered on the Note
Register upon surrender of this Class A-2 Note for registration of transfer at
the office or agency designated by the Company pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such certificates and other
documents as are required pursuant to the Indenture and the Trustee may
reasonably require, and thereupon one or more new Class A-2 Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be
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<PAGE> 101
charged for any registration of transfer or exchange of this Class A-2 Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Class A-2 Note or,
in the case of a Note Owner, a beneficial interest in a Class A-2 Note covenants
and agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Company, the Servicer or the Trustee on the Class A-2
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Trustee or the Servicer in its individual
capacity, (ii) any owner of a beneficial interest in the Company or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the Trustee
or the Servicer in its individual capacity, any holder of a beneficial interest
in the Company, the Servicer or the Trustee or of any successor or assign of the
Trustee or the Servicer in its individual capacity, except (a) as any such
Person may have expressly agreed and (b) any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Company for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Class A-2 Note, subject to
Section 12.17 of the Base Indenture.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
by accepting the benefits of the Indenture that such Noteholder will not for a
period of one year and one day following payment in full of all Notes institute
against the Company, or join in any institution against the Company of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Related
Documents.
Prior to the due presentment for registration of transfer of this
Class A-2 Note, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Class A-2 Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Class A-2
Note be overdue, and neither the Company, the
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<PAGE> 102
Trustee nor any such agent shall be affected by notice to the contrary.
It is the intent of the Company and the Noteholders that, for
Federal, state and local income and franchise tax purposes only, the Class A-2
Notes will evidence indebtedness of the Company secured by the Class A
Collateral. The Noteholders, by the acceptance of this Class A-2 Note, agree to
treat this Class A-2 Note for Federal, state and local income and franchise tax
purposes as indebtedness of the Company.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Series 1995-1 Notes under the
Indenture at any time by the Company with the consent of the Holders of Series
1995-1 Notes representing more than 50% in principal amount of the Outstanding
Series 1995-1 Notes which are affected by such amendment or modification. The
Indenture also contains provisions permitting the Holders of Series 1995-1 Notes
representing specified percentages of the Outstanding Series 1995-1 Notes, on
behalf of the Holders of all the Series 1995-1 Notes, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Class A-2 Note (or any one of more predecessor Class A-2 Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class A-2 Note and of any Class A-2 Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Class A-2 Note. The Indenture also
permits the Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Series 1995-1 Notes issued
thereunder.
The term "Company" as used in this Class A-2 Note includes any
successor to the Company under the Indenture.
The Class A-2 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations set
forth therein.
This Class A-2 Note and the Indenture shall be construed in
accordance with the law of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
law.
No reference herein to the Indenture and no provision of this Class
A-2 Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and
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<PAGE> 103
unconditional, to pay the principal of and interest on this Class A-2 Note at
the times, place, and rate, and in the coin or currency herein prescribed.
Interests in this Class A-2 Note may be exchanged for Definitive Notes,
subject to the provisions of the Indenture.
A-4-9
<PAGE> 104
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_____________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Class A-2 Note and all rights thereunder, and hereby irrevocably
constitutes and appoints _________________________, attorney, to transfer said
Class A-2 Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: ______________________ ________________________________________*
Signature Guaranteed:
_________________________________________
_____________________________
- ----------
* NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-4-10
<PAGE> 105
EXHIBIT A-5
TO
SERIES 1995-1 SUPPLEMENT
FORM OF TEMPORARY GLOBAL CLASS A-2 NOTE
REGISTERED _________**
No. R-
SEE REVERSE FOR CERTAIN CONDITIONS
CUSIP (CINS) NO. ___________
ISIN NO. ___________
THIS CLASS A-2 NOTE IS A TEMPORARY GLOBAL NOTE, WITHOUT COUPONS,
EXCHANGEABLE FOR A PERMANENT GLOBAL NOTE WHICH IS, UNDER CERTAIN CIRCUMSTANCES,
IN TURN, EXCHANGEABLE FOR DEFINITIVE NOTES WITHOUT COUPONS. THE RIGHTS ATTACHING
TO THIS CLASS A-2 NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
EXCHANGE, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CLASS A-2 NOTE, AGREES FOR THE
BENEFIT OF THRIFTY CAR RENTAL FINANCE CORPORATION (THE "COMPANY") THAT THIS
CLASS A-2 NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE
COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (3) OUTSIDE THE UNITED STATES TO A NON U.S. PERSON (AS DEFINED IN
REGULATION S OF THE SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH
REGULATION S OF THE SECURITIES ACT, OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, IN EACH CASE IN COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
- ----------
** Denominations of $250,000 and integral multiples of $1,000.
<PAGE> 106
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.19 OF THE BASE INDENTURE,
THIS CLASS A-2 NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO
ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR CLEARING AGENCY OR TO A
NOMINEE OF SUCH SUCCESSOR CLEARING AGENCY. UNLESS THIS CLASS A-2 NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THRIFTY CAR RENTAL FINANCE CORPORATION OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS A-2 NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN 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.
THE PRINCIPAL OF THIS CLASS A-2 NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-2 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
INTERESTS IN THIS CLASS A-2 NOTE MAY ONLY BE HELD BY NON U.S.
PERSONS AS SUCH TERM IS DEFINED IN REGULATION S OF THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY ONLY BE HELD IN BOOK-ENTRY FORM THROUGH EUROCLEAR OR CEDEL.
Thrifty Car Rental Finance Corporation
FLOATING RATE RENTAL CAR ASSET BACKED NOTES, CLASS A-2
Thrifty Car Rental Finance Corporation, a Delaware corporation
(herein referred to as the "Company"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of [ ] DOLLARS, (or
such lesser amount as shall be the outstanding principal amount of this Class
A-2 Note shown in Schedule A hereto) which amount shall be payable in the
amounts and at the times set forth in the Indenture, provided, however, that the
entire unpaid principal amount of this Class A-2 Note shall be due on the Series
1995-1 Termination Date, which is the _______, __ Payment Date. However,
principal with respect to the Class A-2 Notes may be paid earlier or later under
certain limited circumstances described in the Indenture. The Company will pay
interest on this Class A-2 Note at the Class A-2 Rate. Such interest shall be
payable on each Payment Date until the principal of this Class A-2 Note is paid
or made available for payment, on the principal amount of this Class A-2 Note
outstanding on the preceding Payment Date (after giving effect to all payments
of principal made on the preceding Payment Date). Interest on this Class A-2
Note will accrue for each Payment Date from the most recent
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<PAGE> 107
Payment Date on which interest has been paid to but excluding such Payment Date
or, if no interest has yet been paid, from ________ __, 199_. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. Such principal
of and interest on this Class A-2 Note shall be paid in the manner specified on
the reverse hereof.
The principal of and interest on this Class A-2 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Company with respect to this Class A-2 Note shall be applied first to
interest due and payable on this Class A-2 Note as provided above and then to
the unpaid principal of this Class A-2 Note. This Class A-2 Note does not
represent an interest in, or an obligation of, the Servicer, or any affiliate of
the Servicer other than the Company.
Interests in this Class A-2 Note are exchangeable or transferable in
whole or in part for interests in a Restricted Global Note if this Class A-2
Note is a Temporary Global Note, or for interests in a Temporary Global Note or
a Permanent Global Note if this Class A-2 Note is a Restricted Global Note (each
as defined in the Base Indenture), in each case of the same Series and class,
provided that such transfer or exchange complies with Article 2 of the Base
Indenture. Interests in this Class A-2 Note may not be exchanged.
Reference is made to the further provisions of this Class A-2 Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class A-2 Note. Although a summary of
certain provisions of the Indenture are set forth below and on the reverse
hereof and made a part hereof, this Class A-2 Note does not purport to summarize
the Indenture and reference is made to the Indenture for information with
respect to the interests, rights, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Servicer and the
Trustee. A copy of the Indenture may be requested from the Trustee by writing to
the Trustee at: 4 Albany Street, New York, New York 10006, Attn: Corporate Trust
and Agency Group. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class A-2 Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
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<PAGE> 108
IN WITNESS WHEREOF, the Company has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Date: ___________________ THRIFTY CAR RENTAL FINANCE
CORPORATION
By:_______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Notes of a series issued under the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_______________________________________
Authorized Signature
A-5-4
<PAGE> 109
[REVERSE OF CLASS A-2 NOTE]
This Class A-2 Note is one of a duly authorized issue of Class A-2
Notes of the Company, designated as its Floating Rate Rental Car Asset Backed
Notes, Class A-2 (herein called the "Class A-2 Notes"), all issued under (i) a
Base Indenture dated as of December 13, 1995 (such Base Indenture, as amended or
modified, is herein called the "Base Indenture"), between the COMPANY and
BANKERS TRUST COMPANY, as trustee (the "Trustee", which term includes any
successor Trustee under the Base Indenture), and (ii) a Series 1995-1 Supplement
dated as of December 13, 1995, 1994 (the "Series 1995-1 Supplement") between the
Company and the Trustee. The Base Indenture and the Series 1995-1 Supplement are
referred to herein as the "Indenture". The Class A-2 Notes are subject to all
terms of the Indenture. All terms used in this Class A-2 Note that are defined
in the Indenture, as supplemented or amended, shall have the meanings assigned
to them in or pursuant to the Indenture, as so supplemented or amended.
The Class A-2 Notes are and will be equally and ratably secured by
the Class A Collateral pledged as security therefor as provided in the Indenture
and the Series 1995-1 Supplement.
Principal of the Class A-2 Notes will be payable on each Payment
Date specified in and in the amounts described in the Indenture. "Payment Date"
means the 25th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing ___________ ,199_.
As described above, the entire unpaid principal amount of this Class
A-2 Note shall be due and payable on the Series 1995-1 Termination Date.
Notwithstanding the foregoing, if an Amortization Event, Liquidation Event of
Default, Waiver Event or Series 1995-1 Limited Liquidation Event of Default
shall have occurred and be continuing then, in certain circumstances, principal
on the Class A-2 Notes may be paid earlier, as described in the Indenture. All
principal payments on the Class A-2 Notes shall be made pro rata to the
Noteholders entitled thereto.
Payments of interest on this Class A-2 Note due and payable on each
Payment Date, together with the installment of principal then due, if any, to
the extent not in full payment of this Class A-2 Note, shall be made by check
mailed first class to the Person whose name appears as the Holder of record of
this Class A-2 Note (or one or more predecessor Class A-2 Notes) on the Note
Register as of the close of business on each Record Date, except that with
respect to Class A-2 Notes registered on the Record Date in the name of the
nominee of the Clearing Agency
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<PAGE> 110
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Class A-2 Note be submitted for notation
of payment. Any reduction in the principal amount of this Class A-2 Note (or any
one or more predecessor Class A-2 Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Class A-2 Note and
of any Class A-2 Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted thereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Class A-2 Note on a Payment
Date, then the Trustee, in the name of and on behalf of the Company, will notify
the Person who was the registered Holder hereof as of the Record Date preceding
such Payment Date by notice mailed within five (5) days of such Payment Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Class A-2 Note at the Trustee's principal Corporate Trust
Office.
The Company shall pay interest on overdue installments of interest
at the Class A-2 Rate to the extent lawful.
As provided in the Indenture, the Class A-2 Notes may be redeemed,
in whole, but not in part, at the option of the Company, on any Payment Date. A
Series 1995-1 Note Prepayment Premium will be payable to holders of the Class
A-2 Notes if the Company repurchases any Class A-2 Notes prior to the date on
which the Aggregate Principal Balance of the Class A-2 Notes is less than or
equal to $___________.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A-2 Note may be registered on the Note
Register upon surrender of this Class A-2 Note for registration of transfer at
the office or agency designated by the Company pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such certificates and other
documents as are required pursuant to the Indenture and as the Trustee may
reasonably require, and thereupon one or more new Class A-2 Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service
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<PAGE> 111
charge will be charged for any registration of transfer or exchange of this
Class A-2 Note, but the transferor may be required to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Class A-2 Note or,
in the case of a Note Owner, a beneficial interest in a Class A-2 Note covenants
and agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Company, the Servicer or the Trustee on the Class A-2
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Trustee or the Servicer in its individual
capacity, (ii) any owner of a beneficial interest in the Company or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the Trustee
or the Servicer in its individual capacity, any holder of a beneficial interest
in the Company, the Servicer or the Trustee or of any successor or assign of the
Trustee or the Servicer in its individual capacity, except (a) as any such
Person may have expressly agreed and (b) any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Company for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Class A-2 Note, subject to
Section 12.17 of the Base Indenture.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
by accepting the benefits of the Indenture that such Noteholder will not for a
period of one year and one day following payment in full of all Notes institute
against the Company, or join in any institution against the Company of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Related
Documents.
Prior to the due presentment for registration of transfer of this
Class A-2 Note, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Class A-2 Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Class A-2
Note be overdue, and neither the Company, the
A-5-7
<PAGE> 112
Trustee nor any such agent shall be affected by notice to the contrary.
It is the intent of the Company and the Noteholders that, for
Federal, state and local income and franchise tax purposes only, the Class A-2
Notes will evidence indebtedness of the Company secured by the Class A
Collateral. The Noteholders, by the acceptance of this Class A-2 Note, agree to
treat this Class A-2 Note for Federal, state and local income and franchise tax
purposes as indebtedness of the Company.
Each Holder of this Class A-2 Note shall provide to the Trustee at
least annually an appropriate statement (on Internal Revenue Service Form W-8 or
suitable substitute) with respect to United States federal income tax and
withholding tax, signed under penalties of perjury, certifying that the
beneficial owner of this Class A-2 Note is a non U.S. person and providing the
Noteholder's name and address. If the information provided in the statement
changes, the Noteholder shall so inform the Trustee within thirty (30) days of
such change.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Series 1995-1 Notes under the
Indenture at any time by the Company with the consent of the Holders of Series
1995-1 Notes representing more than 50% in principal amount of the Outstanding
Series 1995-1 Notes which are affected by such amendment or modification. The
Indenture also contains provisions permitting the Holders of Series 1995-1 Notes
representing specified percentages of the Outstanding Series 1995-1 Notes, on
behalf of the Holders of all the Series 1995-1 Notes, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Class A-2 Note (or any one of more predecessor Class A-2 Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class A-2 Note and of any Class A-2 Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Class A-2 Note. The Indenture also
permits the Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Series 1995-1 Notes issued
thereunder.
The term "Company" as used in this Class A-2 Note includes any
successor to the Company under the Indenture.
The Class A-2 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations set
forth therein.
A-5-8
<PAGE> 113
This Class A-2 Note and the Indenture shall be construed in
accordance with the law of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
law.
No reference herein to the Indenture and no provision of this Class
A-2 Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Class A-2 Note at the times, place, and rate, and in the coin
or currency herein prescribed.
Prior to the Exchange Date (as defined below), payments (if any) on
this Class A-2 Note will only be paid to the extent that there is presented by
Cedel Bank, societe anonyme ("Cedel") or Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euroclear System ("Euroclear") to the
Trustee at its office in London a certificate, substantially in the form set out
in Exhibit E to the Base Indenture, to the effect that it has received from or
in respect of a person entitled to a Note (as shown by its records) a
certificate from such person in or substantially in the form of Exhibit F to the
Base Indenture. After the Exchange Date the holder of this Class A-2 Note will
not be entitled to receive any payment hereon, until this Class A-2 Note is
exchanged in full for a Permanent Global Note. This Class A-2 Note shall in all
other respects be entitled to the same benefits as the Permanent Global Notes
under the Indenture.
On or after the date (the "Exchange Date") which is the date that is
the 40th day after the later of the Closing Date and the completion of the
distribution of the relevant Series, interests in this Class A-2 Note may be
exchanged (free of charge) for interests in a Permanent Global Note in the form
of Exhibit A-3 to the Series 1995-1 Supplement upon presentation of this Class
A-2 Note at the office in London of the Trustee (or at such other place outside
the United States of America, its territories and possessions as the Trustee may
agree). The Permanent Global Note shall be so issued and delivered in exchange
for only that portion of this Class A-2 Note in respect of which there shall
have been presented to the Trustee by Euroclear or Cedel a certificate,
substantially in the form set out in Exhibit E to the Base Indenture, to the
effect that it has received from or in respect of a person entitled to a Note
(as shown by its records) a certificate from such person in or substantially in
the form of Exhibit F the Base Indenture.
On an exchange of the whole of this Class A-2 Note, this Class A-2
Note shall be surrendered to the Trustee at its office in London. On an exchange
of part only of this Class A-2 Note, details of such exchange shall be entered
by or on behalf
A-5-9
<PAGE> 114
of the Company in Schedule A hereto and the relevant space in Schedule A hereto
recording such exchange shall be signed by or on behalf of the Company. If,
following the issue of a Permanent Global Note in exchange for some of the Notes
represented by this Class A-2 Note, further Notes of this Series are to be
exchanged pursuant to this paragraph, such exchange may be effected, without the
issue of a new Permanent Global Note, by the Company or its agent endorsing Part
I of Schedule A of the Permanent Global Note previously issued to reflect an
increase in the aggregate principal amount of such Permanent Global Note by an
amount equal to the aggregate principal amount of the additional Notes of this
Series to be exchanged.
Interests in this Class A-2 Note will be transferable in accordance
with the rules and procedures for the time being of Euroclear or Cedel. Each
person who is shown in the records of Euroclear and Cedel as entitled to a
particular number of Notes by way of an interest in this Class A-2 Note will be
treated by the Company, the Trustee and any paying agent as the holder of such
number of Notes. For purposes of this Class A-2 Note, the securities account
records of Euroclear or Cedel shall, in the absence of manifest error, be
conclusive evidence of the identity of the holders of Notes and of the principal
amount of Notes represented by this Class A-2 Note credited to the securities
accounts of such holders of Notes. Any statement issued by Euroclear or Cedel to
any holder relating to a specified Note or Notes credited to the securities
account of such holder and stating the principal amount of such Note or Notes
and certified by Euroclear or Cedel to be a true record of such securities
account shall, in the absence of manifest error, be conclusive evidence of the
records of Euroclear or Cedel for the purposes of the next preceding sentence
(but without prejudice to any other means of producing such records in
evidence). Notwithstanding any provision to the contrary contained in this Class
A-2 Note, the Company irrevocably agrees, for the benefit of such holder and its
successors and assigns, that, subject to the provisions of the Indenture, each
holder or its successors or assigns may file any claim, take any action or
institute any proceeding to enforce, directly against the Company, the
obligation of the Company hereunder to pay any amount due in respect of each
Note represented by this Class A-2 Note which is credited to such holder's
securities account with Euroclear or Cedel without the production of this Class
A-2 Note.
A-5-10
<PAGE> 115
SCHEDULE A
SCHEDULE OF EXCHANGES FOR NOTES
REPRESENTED BY A PERMANENT GLOBAL NOTE
The following exchanges of a part of this Class A-2 Note for Notes represented
by a Permanent Global Note have been made:
================================================================================
Part of principal
amount of this Remaining
Class A-2 Note Principal
exchanged for Notes amount of this Notation made
Date represented by a Class A-2 Note by or on
exchange Permanent Global following such behalf of the
made Note exchange Company
- --------------------------------------------------------------------------------
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A-5-11
<PAGE> 116
EXHIBIT A-6
TO
SERIES 1995-1 SUPPLEMENT
FORM OF PERMANENT GLOBAL CLASS A-2 NOTE
REGISTERED $__________***
No. R-
SEE REVERSE FOR CERTAIN CONDITIONS
CUSIP (CINS) NO. __________
ISIN NO. __________
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CLASS A-2 NOTE, AGREES FOR THE
BENEFIT OF THRIFTY CAR RENTAL FINANCE CORPORATION (THE "COMPANY") THAT THIS
CLASS A-2 NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE
COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (3) OUTSIDE THE UNITED STATES TO A NON U.S. PERSON (AS DEFINED IN
REGULATION S OF THE SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH
REGULATION S OF THE SECURITIES ACT, OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, IN EACH CASE IN COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.19 OF THE BASE INDENTURE,
THIS CLASS A-2 NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO
ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR CLEARING AGENCY OR TO A
NOMINEE OF SUCH SUCCESSOR CLEARING AGENCY. UNLESS THIS CLASS A-2 NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
- ----------
*** Denominations of $250,000 and integral multiples of $1,000.
<PAGE> 117
COMPANY, A NEW YORK CORPORATION ("DTC"), TO THRIFTY CAR RENTAL FINANCE
CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CLASS A-2 NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN 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 IN AS MUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS CLASS A-2 NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A-2 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
Thrifty Car Rental Finance Corporation
FLOATING RATE RENTAL CAR ASSET BACKED NOTES, CLASS A-2
Thrifty Car Rental Finance Corporation, a Delaware corporation
(herein referred to as the "Company"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of [_______________]
DOLLARS, which amount shall be payable in the amounts and at the times set forth
in the Indenture, provided, however, that the entire unpaid principal amount of
this Class A-2 Note shall be due on the Series 1995-1 Termination Date, which is
the _________ Payment Date. However, principal with respect to the Class A-2
Notes may be paid earlier or later under certain limited circumstances described
in the Indenture. The Company will pay interest on this Class A-2 Note at the
Class A-2 Rate. Such interest shall be payable on each Payment Date until the
principal of this Class A-2 Note is paid or made available for payment, on the
principal amount of this Class A-2 Note outstanding on the preceding Payment
Date (after giving effect to all payments of principal made on the preceding
Payment Date). Interest on this Class A-2 Note will accrue for each Payment Date
from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from
___________ __, 199_. Interest will be computed on the basis of a 360-day year
of twelve 30-day months. Such principal of and interest on this Class A-2 Note
shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Class A-2 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Company with respect to this Class A-2 Note shall be applied first to
interest due and payable on this Class A-2 Note as provided above and then
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<PAGE> 118
to the unpaid principal of this Class A-2 Note. This Class A-2 Note does not
represent an interest in, or an obligation of, the Servicer, or any affiliate of
the Servicer other than the Company.
Reference is made to the further provisions of this Class A-2 Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class A-2 Note. Although a summary of
certain provisions of the Indenture are set forth below and on the reverse
hereof and made a part hereof, this Class A-2 Note does not purport to summarize
the Indenture and reference is made to the Indenture for information with
respect to the interests, right, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Servicer and the
Trustee. A copy of the Indenture may be requested from the Trustee by writing to
the Trustee at: 4 Albany Street, New York, New York 10006, Attn: Corporate Trust
and Agency Group. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class A-2 Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-6-3
<PAGE> 119
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: ___________________ THRIFTY CAR RENTAL FINANCE
CORPORATION
By:_______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Notes of a series issued under the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_______________________________________
Authorized Signature
A-6-4
<PAGE> 120
[REVERSE OF CLASS A-2 NOTE]
This Class A-2 Note is one of a duly authorized issue of Class A-2
Notes of the Company, designated as its Floating Rate Rental Car Asset Backed
Notes, Class A (herein called the "Class A-2 Notes"), all issued under (i) a
Base Indenture dated as of December 13, 1995 (such Base Indenture, as amended or
modified, is herein called the "Base Indenture"), between the COMPANY and
BANKERS TRUST COMPANY, as trustee, (the "Trustee", which term includes any
successor Trustee under the Base Indenture), and (ii) a Series 1995-1 Supplement
dated as of December 13, 1995, (the "Series 1995-1 Supplement") between the
Company and the Trustee. The Base Indenture and the Series 1995-1 Supplement are
referred to herein as the "Indenture". The Class A-2 Notes are subject to all
terms of the Indenture. All terms used in this Class A-2 Note that are defined
in the Indenture, as supplemented or amended, shall have the meanings assigned
to them in or pursuant to the Indenture, as so supplemented or amended.
The Class A-2 Notes are and will be equally and ratably secured by
the Class A Collateral pledged as security therefor as provided in the Indenture
and the Series 1995-1 Supplement.
Principal of the Class A-2 Notes will be payable on each Payment
Date specified in and in the amounts described in the Indenture. "Payment Date"
means the 25th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing ________________ __, 199_.
As described above, the entire unpaid principal amount of this Class
A-2 Note shall be due and payable on the Series 1995-1 Termination Date.
Notwithstanding the foregoing, if an Amortization Event, Liquidation Event of
Default, Waiver Event or Series 1995-1 Limited Liquidation Event of Default
shall have occurred and be continuing then, in certain circumstances, principal
on the Class A-2 Notes may be paid earlier, as described in the Indenture. All
principal payments on the Class A-2 Notes shall be made pro rata to the
Noteholders entitled thereto.
Payments of interest on this Class A-2 Note due and payable on each
Payment Date, together with the installment of principal then due, if any, to
the extent not in full payment of this Class A-2 Note, shall be made by check
mailed first class to the Person whose name appears as the Holder of record of
this Class A-2 Note (or one or more predecessor Class A-2 Notes) on the Note
Register as of the close of business on each Record Date, except that with
respect to Class A-2 Notes registered on the Record Date in the name of the
nominee of the Clearing Agency
A-6-5
<PAGE> 121
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Class A-2 Note be submitted for notation
of payment. Any reduction in the principal amount of this Class A-2 Note (or any
one or more predecessor Class A-2 Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Class A-2 Note and
of any Class A-2 Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted thereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Class A-2 Note on a Payment
Date, then the Trustee, in the name of and on behalf of the Company, will notify
the Person who was the registered Holder hereof as of the Record Date preceding
such Payment Date by notice mailed within five (5) days of such Payment Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Class A-2 Note at the Trustee's principal Corporate Trust
Office.
The Company shall pay interest on overdue installments of interest
at the Class A-2 Rate to the extent lawful.
As provided in the Indenture, the Class A-2 Notes may be redeemed,
in whole, but not in part, at the option of the Company, on any Payment Date. A
Series 1995-1 Note Prepayment Premium will be payable to holders of the Class
A-2 Notes if the Company repurchases any Class A-2 Notes prior to the date on
which the Aggregate Principal Balance of the Class A-2 Notes is less than or
equal to $___________.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A-2 Note may be registered on the Note
Register upon surrender of this Class A-2 Note for registration of transfer at
the office or agency designated by the Company pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such certificates and other
documents are required pursuant to the Indenture and as the Trustee may
reasonably require, and thereupon one or more new Class A-2 Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service
A-6-6
<PAGE> 122
charge will be charged for any registration of transfer or exchange of this
Class A-2 Note, but the transferor may be required to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Class A-2 Note or,
in the case of a Note Owner, a beneficial interest in a Class A-2 Note covenants
and agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Company, the Servicer or the Trustee on the Class A-2
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Trustee or the Servicer in its individual
capacity, (ii) any owner of a beneficial interest in the Company or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the Trustee
or the Servicer in its individual capacity, any holder of a beneficial interest
in the Company, the Servicer or the Trustee or of any successor or assign of the
Trustee or the Servicer in its individual capacity, except (a) as any such
Person may have expressly agreed and (b) any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Company for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Class A-2 Note, subject to
Section 12.17 of the Base Indenture.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
by accepting the benefits of the Indenture that such Noteholder will not for a
period of one year and one day following payment in full of all Notes institute
against the Company, or join in any institution against the Company of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Related
Documents.
Prior to the due presentment for registration of transfer of this
Class A-2 Note, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Class A-2 Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Class A-2
Note be overdue, and neither the Company, the
A-6-7
<PAGE> 123
Trustee nor any such agent shall be affected by notice to the contrary.
It is the intent of the Company and the Noteholders that, for
Federal, state and local income and franchise tax purposes only, the Class A-2
Notes will evidence indebtedness of the Company secured by the Class A
Collateral. The Noteholders, by the acceptance of this Class A-2 Note, agree to
treat this Class A-2 Note for Federal, state and local income and franchise tax
purposes as indebtedness of the Company.
In the event a Noteholder or Note Owner is a nonresident alien,
foreign corporation or other non-United States person (a "Foreign Person"), such
Foreign Person shall provide to the Trustee at least annually an appropriate
statement (on Internal Revenue Service Form W-8 or suitable substitute) with
respect to United States federal income tax and withholding tax, signed under
penalties of perjury, certifying that the beneficial owner of this Class A-2
Note is a Foreign Person and providing the Noteholder's name and address. If the
information provided in the statement changes, the Foreign Person shall so
inform the Trustee within thirty (30) days of such change.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Series 1995-1 Notes under the
Indenture at any time by the Company with the consent of the Holders of Series
1995-1 Notes representing more than 50% in principal amount of the Outstanding
Series 1995-1 Notes which are affected by such amendment or modification. The
Indenture also contains provisions permitting the Holders of Series 1995-1 Notes
representing specified percentages of the Outstanding Series 1995-1 Notes, on
behalf of the Holders of all the Series 1995-1 Notes, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Class A-2 Note (or any one of more predecessor Class A-2 Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class A-2 Note and of any Class A-2 Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Class A-2 Note. The Indenture also
permits the Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Series 1995-1 Notes issued
thereunder.
The term "Company" as used in this Class A-2 Note includes any
successor to the Company under the Indenture.
A-6-8
<PAGE> 124
The Class A-2 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations set
forth therein.
This Class A-2 Note and the Indenture shall be construed in
accordance with the law of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
law.
No reference herein to the Indenture and no provision of this Class
A-2 Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Class A-2 Note at the times, place, and rate, and in the coin
or currency herein prescribed.
Interests in this Class A-2 Note will be transferable in accordance with
the rules and procedures for the time being of Euroclear or Cedel. Each person
who is shown in the records of Euroclear and Cedel as entitled to a particular
number of Notes by way of an interest in this Class A-2 Note will be treated by
the Trustee and any paying agent as the holder of such number of Notes. For
purposes of this Class A-2 Note, the securities account records of Euroclear or
Cedel shall, in the absence of manifest error, be conclusive evidence of the
identity of the holders of Notes and of the principal amount of Notes
represented by this Class A-2 Note credited to the securities accounts of such
holders of Notes. Any statement issued by Euroclear or Cedel to any holder
relating to a specified Note or Notes credited to the securities account of such
holder and stating the principal amount of such Note or Notes and certified by
Euroclear or Cedel to be a true record of such securities account shall, in the
absence of manifest error, be conclusive evidence of the records of Euroclear or
Cedel for the purposes of the next preceding sentence (but without prejudice to
any other means of producing such records in evidence). Notwithstanding any
provision to the contrary contained in this Class A-2 Note, the Company
irrevocably agrees, for the benefit of such holder and its successors and
assigns, that, subject to the provisions of the Indenture, each holder or its
successors or assigns may file any claim, take any action or institute any
proceeding to enforce, directly against the Company, the obligation of the
Company hereunder to pay any amount due in respect of each Note represented by
this Class A-2 Note which is credited to such holder's securities account with
Euroclear or Cedel without the production of this Class A-2 Note.
Interests in this Class A-2 Note may be exchanged for Definitive Notes
subject to the provisions of the Indenture.
A-6-9
<PAGE> 125
EXHIBIT B-1
TO
SERIES 1995-1 SUPPLEMENT
FORM OF RESTRICTED GLOBAL CLASS B-1 NOTE
REGISTERED Up to $____________****
No. R-
SEE REVERSE FOR CERTAIN CONDITIONS
CUSIP (CINS) NO. __________
ISIN NO. __________
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CLASS B-1 NOTE, AGREES FOR THE
BENEFIT OF THRIFTY CAR RENTAL FINANCE CORPORATION (THE "COMPANY") THAT THIS
CLASS B-1 NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE
COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (3) OUTSIDE THE UNITED STATES TO A NON U.S. PERSON (AS DEFINED IN
REGULATION S OF THE SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH
REGULATION S OF THE SECURITIES ACT, OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, IN EACH CASE IN COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.19 OF THE BASE INDENTURE,
THIS CLASS B-1 NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO
ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR CLEARING AGENCY OR TO A
NOMINEE OF SUCH SUCCESSOR CLEARING AGENCY. UNLESS THIS CLASS B-1 NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THRIFTY CAR RENTAL FINANCE CORPORATION OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS B-1 NOTE ISSUED
IS REGISTERED
- ----------
**** Denominations of $250,000 and integral multiples of $1,000.
<PAGE> 126
IN THE NAME OF CEDE & CO. OR IN 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.
THE PRINCIPAL OF THIS CLASS B-1 NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
B-1 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
Thrifty Car Rental Finance Corporation
FLOATING RATE RENTAL CAR ASSET BACKED NOTES, CLASS B-1
Thrifty Car Rental Finance Corporation, a Delaware corporation
(herein referred to as the "Company"), for value received, hereby promises to
pay to Cede & Co. or registered assigns, the principal sum of [_______________]
amount shall be payable in the amounts and at the times set forth in the
Indenture, provided, however, that the entire unpaid principal amount of this
Class B-1 Note shall be due on the Series 1995-1 Termination Date, which is the
_____________, 199_ Payment Date. However, principal with respect to the Class
B-1 Notes may be paid earlier or later under certain limited circumstances
described in the Indenture. The Company will pay interest on this Class B-1
Note, at the Class B-1 Rate. Such interest shall be payable on each Payment Date
until the principal of this Class B-1 Note is paid or made available for
payment, on the principal amount of this Class B-1 Note outstanding on the
preceding Payment Date (after giving effect to all payments of principal made on
the preceding Payment Date). Interest on this Class B-1 Note will accrue for
each Payment Date from the most recent Payment Date on which interest has been
paid to but excluding such Payment Date or, if no interest has yet been paid,
from _______ __, 199_. Interest will be computed on the basis of the actual
number of days elapsed and a 360-day year. Such principal of and interest on
this Class B-1 Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Class B-1 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Company with respect to this Class B-1 Note shall be applied first to
interest due and payable on this Class B-1 Note as provided above and then to
the unpaid principal of this Class B-1 Note. This Class B-1 Note does not
represent an interest in, or an obligation of, the
B-1-2
<PAGE> 127
Servicer, or any affiliate of the Servicer other than the Company.
Interests in this Class B-1 Note are exchangeable or transferable in
whole or in part for interests in a Restricted Global Note if this Class B-1
Note is a Temporary Global Note, or for interests in a Temporary Global Note or
a Permanent Global Note if this B-1 Note is a Restricted Global Note (each as
defined in the Base Indenture), in each case of the same Series and class,
provided that such transfer or exchange complies with Article 2 of the Base
Indenture. Interests in this Class B-1 Note may be exchangeable in whole or in
part for duly executed and issued definitive registered Notes if so provided in
Article 2 of the Base Indenture, with the applicable legends as marked therein,
subject to the provisions of the Base Indenture.
Reference is made to the further provisions of this Class B-1 Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class B-1 Note. Although a summary of
certain provisions of the Indenture are set forth below and on the reverse
hereof and made a part hereof, this Class B-1 Note does not purport to summarize
the Indenture and reference is made to the Indenture for information with
respect to the interests, rights, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Servicer and the
Trustee. A copy of the Indenture may be requested from the Trustee by writing to
the Trustee at: 4 Albany Street, New York, New York 10006, Attn: Corporate Trust
and Agency Group. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class B-1 Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
B-1-3
<PAGE> 128
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: ___________________ THRIFTY CAR RENTAL FINANCE
CORPORATION
By:_______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B-1 Notes of a series issued under the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_______________________________________
Authorized Signature
B-1-4
<PAGE> 129
[REVERSE OF CLASS B-1 NOTE]
This Class B-1 Note is one of a duly authorized issue of Class B-1
Notes of the Company, designated as its Floating Rate Rental Car Asset Backed
Notes, Class B (herein called the "Class B-1 Notes"), all issued under (i) a
Base Indenture dated as of December 13, 1995 (such Base Indenture, as amended or
modified, is herein called the "Base Indenture"), between the COMPANY and
BANKERS TRUST COMPANY, as trustee (the "Trustee", which term includes any
successor Trustee under the Base Indenture), and (ii) a Series 1995-1 Supplement
dated as of December 13, 1995 (the "Series 1995-1 Supplement") between the
Company and the Trustee. The Base Indenture and the Series 1995-1 Supplement are
referred to herein as the "Indenture". The Class B-1 Notes are subject to all
terms of the Indenture. All terms used in this Class B-1 Note that are defined
in the Indenture, as supplemented or amended, shall have the meanings assigned
to them in or pursuant to the Indenture, as so supplemented or amended.
The Class B-1 Notes are and will be equally and ratably secured by
the Class B Collateral pledged as security therefor as provided in the Indenture
and the Series 1995-1 Supplement.
Principal of the Class B-1 Notes will be payable on each Payment
Date specified in and in the amounts described in the Indenture. "Payment Date"
means the 25th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing __________ __, 199_.
As described above, the entire unpaid principal amount of this Class
B-1 Note shall be due and payable on the Series 1995-1 Termination Date.
Notwithstanding the foregoing, if an Amortization Event, Liquidation Event of
Default, Waiver Event or Series 1995-1 Limited Liquidation Event of Default
shall have occurred and be continuing then, in certain circumstances, principal
on the Class B-1 Notes may be paid earlier, as described in the Indenture. All
principal payments on the Class B-1 Notes shall be made pro rata to the
Noteholders entitled thereto.
Payments of interest on this Class B-1 Note due and payable on each
Payment Date, together with the installment of principal then due, if any, to
the extent not in full payment of this Class B-1 Note, shall be made by check
mailed first class to the Person whose name appears as the Holder of record of
this Class B-1 Note (or one or more predecessor Class B-1 Notes) on the Note
Register as of the close of business on each Record Date, except that with
respect to Class B-1 Notes registered on the Record Date in the name of the
nominee of the Clearing Agency
B-1-5
<PAGE> 130
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Class B-1 Note be submitted for notation
of payment. Any reduction in the principal amount of this Class B-1 Note (or any
one or more predecessor Class B-1 Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Class B-1 Note and
of any Class B-1 Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted thereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Class B-1 Note on a Payment
Date, then the Trustee, in the name of and on behalf of the Company, will notify
the Person who was the registered Holder hereof as of the Record Date preceding
such Payment Date by notice mailed within five days of such Payment Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Class B-1 Note at the Trustee's principal Corporate Trust
Office.
As provided in the Indenture, the Class B-1 Notes are subordinate to
the Class A-1 Notes and, accordingly, except as may be required in connection
with a Waiver Event, no payments of principal will be made with respect to this
Class B-1 Note until all of the Class A-1 Notes have been paid in full. No
payments of interest will be made with respect to this Class B-1 Note on any
given date until all payments of interest under any of the Class A Notes that
are due and payable on such date have been paid in full.
The Company shall pay interest on overdue installments of interest
at the Class B-1 Rate to the extent lawful.
As provided in the Indenture, the Class B-1 Notes may be redeemed,
in whole, but not in part, at the option of the Company, on any Payment Date on
or after the Payment Date on which the Class A Notes have been paid in full.
A Series 1995-1 Note Prepayment Premium will be payable to holders
of the Class B-1 Notes if the Company repurchases any Class B-1 Notes prior to
the date on which the Invested Amount of the Class B-1 Notes is less than or
equal to $_________.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class B-1 Note may be registered on the Note
Register upon surrender of this Class B-1 Note for registration of transfer at
the office or agency designated by the Company pursuant to the Indenture, duly
B-1-6
<PAGE> 131
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the Trustee
may reasonably require, and thereupon one or more new Class B-1 Notes of
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Class B-1 Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Class B-1 Note or,
in the case of a Note Owner, a beneficial interest in a Class B-1 Note covenants
and agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Company, the Servicer or the Trustee on the Class B-1
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Trustee or the Servicer in its individual
capacity, (ii) any owner of a beneficial interest in the Company or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the Trustee
or the Servicer in its individual capacity, any holder of a beneficial interest
in the Company, the Servicer or the Trustee or of any successor or assign of the
Trustee or the Servicer in its individual capacity, except (a) as any such
Person may have expressly agreed and (b) any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Company for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Class B-1 Note, subject to
Section 12.17 of the Base Indenture.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
by accepting the benefits of the Indenture that such Noteholder will not for a
period of one year and one day following payment in full of all Notes institute
against the Company, or join in any institution against the Company of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any
B-1-7
<PAGE> 132
obligations relating to the Notes, the Indenture or the Related Documents.
Prior to the due presentment for registration of transfer of this
Class B-1 Note, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Class B-1 Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Class B-1
Note be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
It is the intent of the Company and the Noteholders that, for
Federal, state and local income and franchise tax purposes only, the Class B-1
Notes will evidence indebtedness of the Company secured by the Class B
Collateral. The Noteholders, by the acceptance of this Class B-1 Note, agree to
treat this Class B-1 Note for Federal, state and local income and franchise tax
purposes as indebtedness of the Company.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Series 1995-1 Notes under the
Indenture at any time by the Company with the consent of the Holders of Series
1995-1 Notes representing more than 50% in principal amount of the Outstanding
Series 1995-1 Notes which are affected by such amendment or modification. The
Indenture also contains provisions permitting the Holders of Series 1995-1 Notes
representing specified percentages of the Outstanding Series 1995-1 Notes, on
behalf of the Holders of all the Series 1995-1 Notes, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Class B-1 Note (or any one of more predecessor Class B-1 Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class B-1 Note and of any Class B-1 Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Class B-1 Note. The Indenture also
permits the Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Series 1995-1 Notes issued
thereunder.
The term "Company" as used in this Class B-1 Note includes any
successor to the Company under the Indenture.
The Class B-1 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations set
forth therein.
B-1-8
<PAGE> 133
This Class B-1 Note and the Indenture shall be construed in
accordance with the law of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
law.
No reference herein to the Indenture and no provision of this Class
B-1 Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Class B-1 Note at the times, place, and rate, and in the coin
or currency herein prescribed.
Interests in this Class B-1 Note may be exchanged for Definitive
Notes, subject to the provisions of the Indenture.
B-1-9
<PAGE> 134
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_____________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Class B-1 Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ___________________________, attorney, to transfer said
Class B-1 Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: ______________________ ________________________________________*
Signature Guaranteed:
_________________________________________
_____________________________
- ----------
* NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
B-1-10
<PAGE> 135
EXHIBIT B-2
TO
SERIES 1995-1 SUPPLEMENT
FORM OF TEMPORARY GLOBAL CLASS B-1 NOTE
REGISTERED $_________**
No. R-
SEE REVERSE FOR CERTAIN CONDITIONS
CUSIP (CINS) NO. _________
ISIN NO. _________
THIS CLASS B-1 NOTE IS A TEMPORARY GLOBAL NOTE, WITHOUT COUPONS,
EXCHANGEABLE FOR A PERMANENT GLOBAL NOTE WHICH IS, UNDER CERTAIN CIRCUMSTANCES,
IN TURN, EXCHANGEABLE FOR DEFINITIVE NOTES WITHOUT COUPONS. THE RIGHTS ATTACHING
TO THIS B-1 NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE, ARE
AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CLASS B-1 NOTE, AGREES FOR THE
BENEFIT OF THRIFTY CAR RENTAL FINANCE CORPORATION (THE "COMPANY") THAT THIS
CLASS B-1 NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE
COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (3) OUTSIDE THE UNITED STATES TO A NON U.S. PERSON (AS DEFINED IN
REGULATION S OF THE SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH
REGULATION S OF THE SECURITIES ACT, OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, IN EACH CASE IN COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
- ----------
** Denominations of $250,000 and integral multiples of $1,000.
<PAGE> 136
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.19 OF THE BASE INDENTURE,
THIS CLASS B-1 NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO
ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR CLEARING AGENCY OR TO A
NOMINEE OF SUCH SUCCESSOR CLEARING AGENCY. UNLESS THIS CLASS B-1 NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THRIFTY CAR RENTAL FINANCE CORPORATION OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS B-1 NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN 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 IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THE PRINCIPAL OF THIS CLASS B-1 NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
B-1 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
INTERESTS IN THIS CLASS B-1 NOTE MAY ONLY BE HELD BY NON U.S.
PERSONS AS SUCH TERM IS DEFINED IN REGULATION S OF THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY ONLY BE HELD IN BOOK-ENTRY FORM THROUGH EUROCLEAR OR CEDEL.
Thrifty Car Rental Finance Corporation
FLOATING RATE RENTAL CAR ASSET BACKED NOTES, CLASS B-1
Thrifty Car Rental Finance Corporation, a Delaware corporation
(herein referred to as the "Company"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of [_____________]
DOLLARS, (or such lesser amount as shall be the outstanding principal amount of
this Class B-1 Note shown in Schedule A hereto) which amount shall be payable in
the amounts and at the times set forth in the Indenture, provided, however, that
the entire unpaid principal amount of this Class B-1 Note shall be due on the
Series 1995-1 Termination Date, which is the ________ Payment Date. However,
principal with respect to the Class B-1 Notes may be paid earlier or later under
certain limited circumstances described in the Indenture. The Company will pay
interest on this Class B-1 Note at the Class B-1 Rate. Such interest shall be
payable on each Payment Date until the principal of this Class B-1 Note is paid
or made available for payment, on the principal amount of this Class B-1 Note
outstanding on the preceding Payment Date (after giving effect to all payments
of principal made on the preceding Payment Date). Interest on this Class B-1
Note will accrue for each Payment Date from the most recent Payment Date on
which
B-2-2
<PAGE> 137
interest has been paid to but excluding such Payment Date or, if no interest has
yet been paid, from __________ __, 199_. Interest will be computed on the basis
of the actual number of days elapsed and a 360-day year. Such principal of and
interest on this Class B-1 Note shall be paid in the manner specified on the
reverse hereof.
The principal of and interest on this Class B-1 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Company with respect to this Class B-1 Note shall be applied first to
interest due and payable on this Class B-1 Note as provided above and then to
the unpaid principal of this Class B-1 Note. This Class B-1 Note does not
represent an interest in, or an obligation of, the Servicer, or any affiliate of
the Servicer other than the Company.
Interests in this Class B-1 Note are exchangeable or transferable in whole
or in part for interests in a Restricted Global Note if this Class B-1 Note is a
Temporary Global Note, or for interests in a Temporary Global Note or a
Permanent Global Note if this Class B-1 Note is a Restricted Global Note (each
as defined in the Base Indenture), in each case of the same Series and class,
provided that such transfer or exchange complies with Article 2 of the Base
Indenture. Interests in this Class B-1 Note may not be exchanged for definitive
registered Notes.
Reference is made to the further provisions of this Class B-1 Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class B-1 Note. Although a summary of
certain provisions of the Indenture are set forth below and on the reverse
hereof and made a part hereof, this Class B-1 Note does not purport to summarize
the Indenture and reference is made to the Indenture for information with
respect to the interests, rights, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Servicer and the
Trustee. A copy of the Indenture may be requested from the Trustee by writing to
the Trustee at: 4 Albany Street, New York, New York 10006, Attn: Corporate Trust
and Agency Group. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class B-1 Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
B-2-3
<PAGE> 138
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: ___________________ THRIFTY CAR RENTAL FINANCE
CORPORATION
By:_______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B-1 Notes of a series issued under the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_______________________________________
Authorized Signature
B-2-4
<PAGE> 139
[REVERSE OF CLASS B-1 NOTE]
This Class B-1 Note is one of a duly authorized issue of Class B-1
Notes of the Company, designated as its Floating Rate Rental Car Asset Backed
Notes, Class B-1 (herein called the "Class B-1 Notes"), all issued under (i) a
Base Indenture dated as of December 13, 1995 (such Base Indenture, as amended or
modified, is herein called the "Base Indenture"), between the COMPANY and
BANKERS TRUST COMPANY, as trustee (the "Trustee", which term includes any
successor Trustee under the Base Indenture), and (ii) a Series 1995-1 Supplement
dated as of December 13, 1995 (the "Series 1995-1 Supplement") between the
Company and the Trustee. The Base Indenture and the Series 1995-1 Supplement are
referred to herein as the "Indenture". The Class B-1 Notes are subject to all
terms of the Indenture. All terms used in this Class B-1 Note that are defined
in the Indenture, as supplemented or amended, shall have the meanings assigned
to them in or pursuant to the Indenture, as so supplemented or amended.
The Class B-1 Notes are and will be equally and ratably secured by
the Class B Collateral pledged as security therefor as provided in the Indenture
and the Series 1995-1 Supplement.
Principal of the Class B-1 Notes will be payable on each Payment
Date specified in and in the amounts described in the Indenture. "Payment Date"
means the 25th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing ____________ __, 199_.
As described above, the entire unpaid principal amount of this Class
B-1 Note shall be due and payable on the Series 1995-1 Termination Date.
Notwithstanding the foregoing, if an Amortization Event, Liquidation Event of
Default, Waiver Event or Series 1995-1 Limited Liquidation Event of Default
shall have occurred and be continuing then, in certain circumstances, principal
on the Class B-1 Notes may be paid earlier, as described in the Indenture. All
principal payments on the Class B-1 Notes shall be made pro rata to the
Noteholders entitled thereto.
Payments of interest on this Class B-1 Note due and payable on each
Payment Date, together with the installment of principal then due, if any, to
the extent not in full payment of this Class B-1 Note, shall be made by check
mailed first class to the Person whose name appears as the Holder of record of
this Class B-1 Note (or one or more predecessor Class B-1 Notes) on the Note
Register as of the close of business on each Record Date, except that with
respect to Class B-1 Notes registered on the Record Date in the name of the
nominee of the Clearing Agency
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(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Class B-1 Note be submitted for notation
of payment. Any reduction in the principal amount of this Class B-1 Note (or any
one or more predecessor Class B-1 Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Class B-1 Note and
of any Class B-1 Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted thereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Class B-1 Note on a Payment
Date, then the Trustee, in the name of and on behalf of the Company, will notify
the Person who was the registered Holder hereof as of the Record Date preceding
such Payment Date by notice mailed within five (5) days of such Payment Date and
the amount then due and payable shall be payable only upon presentation and
surrender of this Class B-1 Note at the Trustee's principal Corporate Trust
Office.
As provided in the Indenture, the Class B-1 Notes are subordinate to
the Class A-1 Notes and, accordingly, except as may be required in connection
with a Waiver Event, no payments of principal will be made with respect to this
Class B-1 Note until all of the Class A-1 Notes have been paid in full. No
payments of interest will be made with respect to this Class B-1 Note on any
given date until all payments of interest under any of the Class A Notes that
are due and payable on such date have been paid in full.
The Company shall pay interest on overdue installments of interest
at the Class B-1 Rate to the extent lawful.
As provided in the Indenture, the Class B-1 Notes may be redeemed,
in whole, but not in part, at the option of the Company, on any Payment Date on
or after the Payment Date on which the Class A Notes have been paid in full.
A Series 1995-1 Note Prepayment Premium will be payable to holders
of the Class B-1 Notes if the Company repurchases any Class B-1 Notes prior to
the date on which the Aggregate Principal Balance of the Class B-1 Notes is less
than or equal to $___________.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class B-1 Note may be registered on the Note
Register upon surrender of this Class B-1 Note for registration of transfer at
the office or
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agency designated by the Company pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by a commercial bank or trust company
located, or having a correspondent located, in The City of New York or the city
in which the Corporate Trust Office is located, or a member firm of a national
securities exchange, and such certificates and other documents as are required
pursuant to the Indenture and as the Trustee may reasonably require, and
thereupon one or more new Class B-1 Notes of authorized denominations and in the
same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of transfer
or exchange of this Class B-1 Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Class B-1 Note or,
in the case of a Note Owner, a beneficial interest in a Class B-1 Note covenants
and agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Company, the Servicer or the Trustee on the Class B-1
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Trustee or the Servicer in its individual
capacity, (ii) any owner of a beneficial interest in the Company or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the Trustee
or the Servicer in its individual capacity, any holder of a beneficial interest
in the Company, the Servicer or the Trustee or of any successor or assign of the
Trustee or the Servicer in its individual capacity, except (a) as any such
Person may have expressly agreed and (b) any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Company for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Class B-1 Note, subject to
Section 12.17 of the Base Indenture.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
by accepting the benefits of the Indenture that such Noteholder will not for a
period of one year and one day following payment in full of all Notes institute
against the Company, or join in any institution against the Company of, any
bankruptcy, reorganization, arrangement,
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<PAGE> 142
insolvency or liquidation proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the Related Documents.
Prior to the due presentment for registration of transfer of this
Class B-1 Note, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Class B-1 Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Class B-1
Note be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
It is the intent of the Company and the Noteholders that, for
Federal, state and local income and franchise tax purposes only, the Class B-1
Notes will evidence indebtedness of the Company secured by the Class B
Collateral. The Noteholders, by the acceptance of this Class B-1 Note, agree to
treat this Class B-1 Note for Federal, state and local income and franchise tax
purposes as indebtedness of the Company.
Each Holder of this Class B-1 Note shall provide to the Trustee at
least annually an appropriate statement (on Internal Revenue Service Form W-8 or
suitable substitute) with respect to United States federal income tax and
withholding tax, signed under penalties of perjury, certifying that the
beneficial owner of this Class B-1 Note is a non U.S. person and providing the
Noteholder's name and address. If the information provided in the statement
changes, the Noteholder shall so inform the Trustee within thirty (30) days of
such change.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Series 1995-1 Notes under the
Indenture at any time by the Company with the consent of the Holders of Series
1995-1 Notes representing more than 50% in principal amount of the Outstanding
Series 1995-1 Notes which are affected by such amendment or modification. The
Indenture also contains provisions permitting the Holders of Series 1995-1 Notes
representing specified percentages of the Outstanding Series 1995-1 Notes, on
behalf of the Holders of all the Series 1995-1 Notes, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Class B-1 Note (or any one of more predecessor Class B-1 Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class B-1 Note and of any Class B-1 Note issued upon the registration of
transfer hereof or in
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<PAGE> 143
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Class B-1 Note. The Indenture also permits the Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of Holders of the Series 1995-1 Notes issued thereunder.
The term "Company" as used in this Class B-1 Note includes any
successor to the Company under the Indenture.
The Class B-1 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations set
forth therein.
This Class B-1 Note and the Indenture shall be construed in
accordance with the law of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
law.
No reference herein to the Indenture and no provision of this Class
B-1 Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Class B-1 Note at the times, place, and rate, and in the coin
or currency herein prescribed.
Prior to the Exchange Date (as defined below), payments (if any) on
this Class B-1 Note will only be paid to the extent that there is presented by
Cedel Bank, societe anonyme ("Cedel") or Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euroclear System ("Euroclear") to the
Trustee at its office in London a certificate, substantially in the form set out
in Exhibit E to the Base Indenture, to the effect that it has received from or
in respect of a person entitled to a Note (as shown by its records) a
certificate from such person in or substantially in the form of Exhibit F to the
Base Indenture. After the Exchange Date the holder of this Class B-1 Note will
not be entitled to receive any payment hereon, until this Class B-1 Note is
exchanged in full for a Permanent Global Note. This Class B-1 Note shall in all
other respects be entitled to the same benefits as the Permanent Global Notes
under the Indenture.
On or after the date (the "Exchange Date") which is the date that is
the 40th day after the later of the Closing Date and the completion of the
distribution of the relevant Series, interests in this Class B-1 Note may be
exchanged (free of charge) for interests in a Permanent Global Note in the form
of Exhibit B-3 to the Series 1995-1 Supplement upon presentation of this Class
B-1 Note at the office in London of the Trustee (or at such other place outside
the United States of America, its territories and possessions as the Trustee may
agree). The
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<PAGE> 144
Permanent Global Note shall be so issued and delivered in exchange for only that
portion of this Class B-1 Note in respect of which there shall have been
presented to the Trustee by Euroclear or Cedel a certificate, substantially in
the form set out in Exhibit E to the Base Indenture, to the effect that it has
received from or in respect of a person entitled to a Note (as shown by its
records) a certificate from such person in or substantially in the form of
Exhibit F to the Base Indenture.
On an exchange of the whole of this Class B-1 Note, this Class B-1
Note shall be surrendered to the Trustee at its office in London. On an exchange
of part only of this Class B-1 Note, details of such exchange shall be entered
by or on behalf of the Company in Schedule A hereto and the relevant space in
Schedule A hereto recording such exchange shall be signed by or on behalf of the
Company. If, following the issue of a Permanent Global Note in exchange for some
of the Notes represented by this Class B-1 Note, further Notes of this Series
are to be exchanged pursuant to this paragraph, such exchange may be effected,
without the issue of a new Permanent Global Note, by the Company or its agent
endorsing Part I of Schedule A of the Permanent Global Note previously issued to
reflect an increase in the aggregate principal amount of such Permanent Global
Note by an amount equal to the aggregate principal amount of the additional
Notes of this Series to be exchanged.
Interests in this Class B-1 Note will be transferable in accordance
with the rules and procedures for the time being of Euroclear or Cedel. Each
person who is shown in the records of Euroclear and Cedel as entitled to a
particular number of Notes by way of an interest in this Class B-1 Note will be
treated by the Company, the Trustee and any paying agent as the holder of such
number of Notes. For purposes of this Class B-1 Note, the securities account
records of Euroclear or Cedel shall, in the absence of manifest error, be
conclusive evidence of the identity of the holders of Notes and of the principal
amount of Notes represented by this Class B-1 Note credited to the securities
accounts of such holders of Notes. Any statement issued by Euroclear or Cedel to
any holder relating to a specified Note or Notes credited to the securities
account of such holder and stating the principal amount of such Note or Notes
and certified by Euroclear or Cedel to be a true record of such securities
account shall, in the absence of manifest error, be conclusive evidence of the
records of Euroclear or Cedel for the purposes of the next preceding sentence
(but without prejudice to any other means of producing such records in
evidence). Notwithstanding any provision to the contrary contained in this Class
B-1 Note, the Company irrevocably agrees, for the benefit of such holder and its
successors and assigns, that, subject to the provisions of the Indenture, each
holder or its successors or assigns may file any claim, take any action or
institute any proceeding to
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<PAGE> 145
enforce, directly against the Company, the obligation of the Company hereunder
to pay any amount due in respect of each Note represented by this Class B-1 Note
which is credited to such holder's securities account with Euroclear or Cedel
without the production of this Class B-1 Note.
B-2-11
<PAGE> 146
SCHEDULE A
SCHEDULE OF EXCHANGES FOR NOTES
REPRESENTED BY A PERMANENT GLOBAL NOTE
The following exchanges of a part of this Class B-1 Note for Notes represented
by a Permanent Global Note have been made:
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Part of principal
amount of this Remaining
Class B-1 Note Principal
exchanged for Notes amount of this Notation made
Date represented by a Class B-1 Note by or on
exchange Permanent Global following such behalf of the
made Note exchange Company
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<PAGE> 147
EXHIBIT B-3
TO
Series 1995-1 Supplement
FORM OF PERMANENT GLOBAL CLASS B-1 NOTE
REGISTERED $__________***
No. R-
SEE REVERSE FOR CERTAIN CONDITIONS
CUSIP (CINS) NO. __________
ISIN NO. __________
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CLASS B-1 NOTE, AGREES FOR THE
BENEFIT OF THRIFTY CAR RENTAL FINANCE CORPORATION (THE "COMPANY") THAT THIS
CLASS B-1 NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE
COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (3) OUTSIDE THE UNITED STATES TO A NON U.S. PERSON (AS DEFINED IN
REGULATION S OF THE SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH
REGULATION S OF THE SECURITIES ACT, OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, IN EACH CASE IN COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.19 OF THE BASE INDENTURE,
THIS CLASS B-1 NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO
ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR CLEARING AGENCY OR TO A
NOMINEE OF SUCH SUCCESSOR CLEARING AGENCY. UNLESS THIS CLASS B-1 NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THRIFTY CAR RENTAL FINANCE CORPORATION OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS B-1 NOTE ISSUED
IS REGISTERED
- ----------
*** Denominations of $250,000 and integral multiples of $1,000.
<PAGE> 148
IN THE NAME OF CEDE & CO. OR IN 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 IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS CLASS B-1 NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
B-1 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
Thrifty Car Rental Finance Corporation
FLOATING RATE RENTAL CAR ASSET BACKED NOTES, CLASS B-1
Thrifty Car Rental Finance Corporation, a Delaware corporation
(herein referred to as the "Company"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of [ ] DOLLARS,
which amount shall be payable in the amounts and at the times set forth in the
Indenture, provided, however, that the entire unpaid principal amount of this
Class B-1 Note shall be due on the Series 1995-1 Termination Date, which is the
____________ Payment Date. However, principal with respect to the Class B-1
Notes may be paid earlier or later under certain limited circumstances described
in the Indenture. The Company will pay interest on this Class B-1 Note at the
Class B-1 Rate. Such interest shall be payable on each Payment Date until the
principal of this Class B-1 Note is paid or made available for payment, on the
principal amount of this Class B-1 Note outstanding on the preceding Payment
Date (after giving effect to all payments of principal made on the preceding
Payment Date). Interest on this Class B-1 Note will accrue for each Payment Date
from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from ________
__, 199__. Interest will be computed on the basis of the actual number of days
elapsed and a 360-day year. Such principal of and interest on this Class B-1
Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Class B-1 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Company with respect to this Class B-1 Note shall be applied first to
interest due and payable on this Class B-1 Note as provided above and then to
the unpaid principal of this Class B-1 Note. This Class B-1
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<PAGE> 149
Note does not represent an interest in, or an obligation of, the Servicer, or
any affiliate of the Servicer other than the Company.
Reference is made to the further provisions of this Class B-1 Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class B-1 Note. Although a summary of
certain provisions of the Indenture are set forth below and on the reverse
hereof and made a part hereof, this Class B-1 Note does not purport to summarize
the Indenture and reference is made to the Indenture for information with
respect to the interests, right, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Servicer and the
Trustee. A copy of the Indenture may be requested from the Trustee by writing to
the Trustee at: 4 Albany Street, New York, New York 10006, Attn: Corporate Trust
and Agency Agreement. To the extent not defined herein, the capitalized terms
used herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class B-1 Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
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<PAGE> 150
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: ___________________ THRIFTY CAR RENTAL FINANCE
CORPORATION
By:_______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B-1 Notes of a series issued under the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_______________________________________
Authorized Signature
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<PAGE> 151
[REVERSE OF CLASS B-1 NOTE]
This Class B-1 Note is one of a duly authorized issue of Class B-1
Notes of the Company, designated as its Floating Rate Rental Car Asset Backed
Notes, Class B-1 (herein called the "Class B-1 Notes"), all issued under (i) a
Base Indenture dated as of December 13, 1995 (such Base Indenture, as amended or
modified, is herein called the "Base Indenture"), between the COMPANY and
BANKERS TRUST COMPANY, as trustee (the "Trustee", which term includes any
successor Trustee under the Base Indenture), and (ii) a Series 1995-1 Supplement
dated as of December 13, 1995 (the "Series 1995-1 Supplement") between the
Company and the Trustee. The Base Indenture and the Series 1995-1 Supplement are
referred to herein as the "Indenture". The Class B-1 Notes are subject to all
terms of the Indenture. All terms used in this Class B-1 Note that are defined
in the Indenture, as supplemented or amended, shall have the meanings assigned
to them in or pursuant to the Indenture, as so supplemented or amended.
The Class B-1 Notes are and will be equally and ratably secured by
the Class B Collateral pledged as security therefor as provided in the Indenture
and the Series 1995-1 Supplement.
Principal of the Class B-1 Notes will be payable on each Payment
Date specified in and in the amounts described in the Indenture. "Payment Date"
means the 25th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing ____________, 199__.
As described above, the entire unpaid principal amount of this Class
B-1 Note shall be due and payable on the Series 1995-1 Termination Date.
Notwithstanding the foregoing, if an Amortization Event, Liquidation Event of
Default, Waiver Event or Series 1995-1 Limited Liquidation Event of Default
shall have occurred and be continuing then, in certain circumstances, principal
on the Class B-1 Notes may be paid earlier, as described in the Indenture. All
principal payments on the Class B-1 Notes shall be made pro rata to the
Noteholders entitled thereto.
Payments of interest on this Class B-1 Note due and payable on each
Payment Date, together with the installment of principal then due, if any, to
the extent not in full payment of this Class B-1 Note, shall be made by check
mailed first class to the Person whose name appears as the Holder of record of
this Class B-1 Note (or one or more predecessor Class B-1 Notes) on the Note
Register as of the close of business on each Record
B-3-5
<PAGE> 152
Date, except that with respect to Class B-1 Notes registered on the Record Date
in the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Class
B-1 Note be submitted for notation of payment. Any reduction in the principal
amount of this Class B-1 Note (or any one or more predecessor Class B-1 Notes)
effected by any payments made on any Payment Date shall be binding upon all
future Holders of this Class B-1 Note and of any Class B-1 Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted thereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Class B-1 Note on a Payment Date, then the Trustee, in the name of and on
behalf of the Company, will notify the Person who was the registered Holder
hereof as of the Record Date preceding such Payment Date by notice mailed within
five days of such Payment Date and the amount then due and payable shall be
payable only upon presentation and surrender of this Class B-1 Note at the
Trustee's principal Corporate Trust and Agency Group.
As provided in the Indenture, the Class B-1 Notes are subordinate to
the Class A-1 Notes and, accordingly, except as may be required in connection
with a Waiver Event, no payments of principal will be made with respect to this
Class B-1 Note until all of the Class A-1 Notes have been paid in full. No
payments of interest will be made with respect to this Class B-1 Note on any
given date until all payments of interest under any of the Class A Notes that
are due and payable on such date have been paid in full.
The Company shall pay interest on overdue installments of interest
at the Class B-1 Rate to the extent lawful.
As provided in the Indenture, the Class B-1 Notes may be redeemed,
in whole, but not in part, at the option of the Company, on any Payment Date on
or after the Payment Date on which the Class A Notes have been paid in full.
A Series 1995-1 Note Prepayment Premium will be payable to holders
of the Class B-1 Notes if the Company repurchases any Class B-1 Notes prior to
the date on which the Aggregate Principal Balance of the Class B-1 Notes is less
than $__________.
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<PAGE> 153
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class B-1 Note may be registered on the Note
Register upon surrender of this Class B-1 Note for registration of transfer at
the office or agency designated by the Company pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such certificates and other
documents as are required pursuant to the Indenture and as the Trustee may
reasonably require, and thereupon one or more new Class B-1 Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Class B-1 Note, but the transferor
may be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.
Each Noteholder or Note Owner, by acceptance of a Class B-1 Note or,
in the case of a Note Owner, a beneficial interest in a Class B-1 Note covenants
and agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Company, the Servicer or the Trustee on the Class B-1
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Trustee or the Servicer in its individual
capacity, (ii) any owner of a beneficial interest in the Company or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the Trustee
or the Servicer in its individual capacity, any holder of a beneficial interest
in the Company, the Servicer or the Trustee or of any successor or assign of the
Trustee or the Servicer in its individual capacity, except (a) as any such
Person may have expressly agreed and (b) any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Company for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Class B-1 Note, subject to
Section 12.17 of the Base Indenture.
B-3-7
<PAGE> 154
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
by accepting the benefits of the Indenture that such Noteholder will not for a
period of one year and one day following payment in full of all Notes institute
against the Company, or join in any institution against the Company of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Related
Documents.
Prior to the due presentment for registration of transfer of this
Class B-1 Note, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Class B-1 Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Class B-1
Note be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
It is the intent of the Company and the Noteholders that, for
Federal, state and local income and franchise tax purposes only, the Class B-1
Notes will evidence indebtedness of the Company secured by the Class B
Collateral. The Noteholders, by the acceptance of this Class B-1 Note, agree to
treat this Class B-1 Note for Federal, state and local income and franchise tax
purposes as indebtedness of the Company.
In the event a Noteholder or Note Owner is a nonresident alien,
foreign corporation or other non-United States person (a "Foreign Person"), such
Foreign Person shall provide to the Trustee at least annually an appropriate
statement (on Internal Revenue Service Form W-8 or suitable substitute) with
respect to United States federal income tax and withholding tax, signed under
penalties of perjury, certifying that the beneficial owner of this Class B-1
Note is a Foreign Person and providing the Noteholder's name and address. If the
information provided in the statement changes, the Foreign Person shall so
inform the Trustee within thirty (30) days of such change.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Series 1995-1 Notes under the
Indenture at any time by the Company with the consent of the Holders of Series
1995-1 Notes representing more than 50% in principal amount of the Outstanding
Series 1995-1 Notes which are affected by such
B-3-8
<PAGE> 155
amendment or modification. The Indenture also contains provisions permitting the
Holders of Series 1995-1 Notes representing specified percentages of the
Outstanding Series 1995-1 Notes, on behalf of the Holders of all the Series
1995-1 Notes, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Class B-1 Note (or any one of
more predecessor Class B-1 Notes) shall be conclusive and binding upon such
Holder and upon all future Holders of this Class B-1 Note and of any Class B-1
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Class B-1 Note. The Indenture also permits the Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of Holders
of the Series 1995-1 Notes issued thereunder.
The term "Company" as used in this Class B-1 Note includes any
successor to the Company under the Indenture.
The Class B-1 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations set
forth therein.
This Class B-1 Note and the Indenture shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
laws.
No reference herein to the Indenture and no provision of this Class
B-1 Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Class B-1 Note at the times, place, and rate, and in the coin
or currency herein prescribed.
Interests in this Class B-1 Note will be transferable in accordance
with the rules and procedures for the time being of Euroclear or Cedel. Each
person who is shown in the records of Euroclear and Cedel as entitled to a
particular number of Notes by way of an interest in this Class B-1 Note will be
treated by the Trustee and any paying agent as the holder of such number of
Notes. For purposes of this Class B-1 Note, the securities account records of
Euroclear or Cedel shall, in the absence of manifest error, be conclusive
evidence of the identity of the holders of Notes and of the principal amount of
Notes represented by this Class B-1 Note credited to the securities accounts of
such holders of Notes. Any statement issued by Euroclear or
B-3-9
<PAGE> 156
Cedel to any holder relating to a specified Note or Notes credited to the
securities account of such holder and stating the principal amount of such Note
or Notes and certified by Euroclear or Cedel to be a true record of such
securities account shall, in the absence of manifest error, be conclusive
evidence of the records of Euroclear or Cedel for the purposes of the next
preceding sentence (but without prejudice to any other means of producing such
records in evidence). Notwithstanding any provision to the contrary contained in
this Class B-1 Note, the Company irrevocably agrees, for the benefit of such
holder and its successors and assigns, that, subject to the provisions of the
Indenture, each holder or its successors or assigns may file any claim, take any
action or institute any proceeding to enforce, directly against the Company, the
obligation of the Company hereunder to pay any amount due in respect of each
Note represented by this Class B-1 Note which is credited to such holder's
securities account with Euroclear or Cedel without the production of this Class
B-1 Note.
Interests in this Class B-1 Note may be exchanged for Definitive
Notes subject to the provisions of the Indenture.
B-3-10
<PAGE> 157
EXHIBIT B-4
TO
Series 1995-1 Supplement
FORM OF RESTRICTED GLOBAL CLASS B-2 NOTE
REGISTERED $_____________****
No. R-
SEE REVERSE FOR CERTAIN CONDITIONS
CUSIP (CINS) NO. __________
ISIN NO. __________
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CLASS B-2 NOTE, AGREES FOR THE
BENEFIT OF THRIFTY CAR RENTAL FINANCE CORPORATION (THE "COMPANY") THAT THIS
CLASS B-1 NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE
COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (3) OUTSIDE THE UNITED STATES TO A NON U.S. PERSON (AS DEFINED IN
REGULATION S OF THE SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH
REGULATION S OF THE SECURITIES ACT, OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, IN EACH CASE IN COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.19 OF THE BASE INDENTURE,
THIS CLASS B-2 NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO
ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR CLEARING AGENCY OR TO A
NOMINEE OF SUCH SUCCESSOR CLEARING AGENCY. UNLESS THIS CLASS B-2 NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THRIFTY CAR RENTAL FINANCE CORPORATION OR ITS AGENT
FOR REGISTRATION OF TRANSFER,
- ----------
**** Denominations of $250,000 and integral multiples of $1,000.
<PAGE> 158
EXCHANGE OR PAYMENT, AND ANY CLASS B-2 NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN 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.
THE PRINCIPAL OF THIS CLASS B-2 NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
B-2 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
Thrifty Car Rental Finance Corporation
FLOATING RATE RENTAL CAR ASSET BACKED NOTES, CLASS B-2
Thrifty Car Rental Finance Corporation, a Delaware corporation
(herein referred to as the "Company"), for value received, hereby promises to
pay to Cede & Co. or registered assigns, the principal sum of [ ] DOLLARS, which
amount shall be payable in the amounts and at the times set forth in the
Indenture, provided, however, that the entire unpaid principal amount of this
Class B-2 Note shall be due on the Series 1995-1 Termination Date, which is the
____________ Payment Date. However, principal with respect to the Class B-2
Notes may be paid earlier or later under certain limited circumstances described
in the Indenture. The Company will pay interest on this Class B-2 Note, at the
Class B-2 Rate. Such interest shall be payable on each Payment Date until the
principal of this Class B-2 Note is paid or made available for payment, on the
principal amount of this Class B-2 Note outstanding on the preceding Payment
Date (after giving effect to all payments of principal made on the preceding
Payment Date). Interest on this Class B-2 Note will accrue for each Payment Date
from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from ________
__, 199__. Interest will be computed on the basis of the actual number of days
elapsed and a 360-day year. Such principal of and interest on this Class B-2
Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Class B-2 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Company with respect to this Class B-2 Note shall be applied first to
interest due and payable on this Class B-2 Note as provided above and then
B-4-2
<PAGE> 159
to the unpaid principal of this Class B-2 Note. This Class B-2 Note does not
represent an interest in, or an obligation of, the Servicer, or any affiliate of
the Servicer other than the Company.
Interests in this Class B-2 Note are exchangeable or transferable in
whole or in part for interests in a Restricted Global Note if this Class B-2
Note is a Temporary Global Note, or for interests in a Temporary Global Note or
a Permanent Global Note if this Class B-2 Note is a Restricted Global Note (each
as defined in the Base Indenture), in each case of the same Series and class,
provided that such transfer or exchange complies with Article 2 of the Base
Indenture. Interests in this Class B-2 Note may be exchangeable in whole or in
part for duly executed and issued definitive registered Notes if so provided in
Article 2 of the Base Indenture, with the applicable legends as marked therein,
subject to the provisions of the Base Indenture.
Reference is made to the further provisions of this Class B-2 Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class B-2 Note. Although a summary of
certain provisions of the Indenture are set forth below and on the reverse
hereof and made a part hereof, this Class B-2 Note does not purport to summarize
the Indenture and reference is made to the Indenture for information with
respect to the interests, rights, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Servicer and the
Trustee. A copy of the Indenture may be requested from the Trustee by writing to
the Trustee at: 4 Albany Street, New York, New York 10006, Attn: Corporate Trust
and Agency Group. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class B-2 Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
B-4-3
<PAGE> 160
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: ___________________ THRIFTY CAR RENTAL FINANCE
CORPORATION
By:_______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B-2 Notes of a series issued under the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_______________________________________
Authorized Signature
B-4-4
<PAGE> 161
[REVERSE OF CLASS B-2 NOTE]
This Class B-2 Note is one of a duly authorized issue of Class B-2
Notes of the Company, designated as its Floating Rate Rental Car Asset Backed
Notes, Class B (herein called the "Class B-2 Notes"), all issued under (i) a
Base Indenture dated as of December 13, 1995 (such Base Indenture, as amended or
modified, is herein called the "Base Indenture"), between the COMPANY and
BANKERS TRUST COMPANY, as trustee (the "Trustee", which term includes any
successor Trustee under the Base Indenture), and (ii) a Series 1995-1 Supplement
dated as of December 13, 1995 (the "Series 1995-1 Supplement") between the
Company and the Trustee. The Base Indenture and the Series 1995-1 Supplement are
referred to herein as the "Indenture". The Class B-2 Notes are subject to all
terms of the Indenture. All terms used in this Class B-2 Note that are defined
in the Indenture, as supplemented or amended, shall have the meanings assigned
to them in or pursuant to the Indenture, as so supplemented or amended.
The Class B-2 Notes are and will be equally and ratably secured by
the Class B Collateral pledged as security therefor as provided in the Indenture
and the Series 1995-1 Supplement.
Principal of the Class B-2 Notes will be payable on each Payment
Date specified in and in the amounts described in the Indenture. "Payment Date"
means the 25th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing _________ __, 199__.
As described above, the entire unpaid principal amount of this Class
B-2 Note shall be due and payable on the Series 1995-1 Termination Date.
Notwithstanding the foregoing, if an Amortization Event, Liquidation Event of
Default, Waiver Event or Series 1995-1 Limited Liquidation Event of Default
shall have occurred and be continuing then, in certain circumstances, principal
on the Class B-2 Notes may be paid earlier, as described in the Indenture. All
principal payments on the Class B-2 Notes shall be made pro rata to the
Noteholders entitled thereto.
Payments of interest on this Class B-2 Note due and payable on each
Payment Date, together with the installment of principal then due, if any, to
the extent not in full payment of this Class B-2 Note, shall be made by check
mailed first class to the Person whose name appears as the Holder of record of
this Class B-2 Note (or one or more predecessor Class B-2 Notes) on the Note
Register as of the close of business on each Record
B-4-5
<PAGE> 162
Date, except that with respect to Class B-2 Notes registered on the Record Date
in the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Class
B-2 Note be submitted for notation of payment. Any reduction in the principal
amount of this Class B-2 Note (or any one or more predecessor Class B-2 Notes)
effected by any payments made on any Payment Date shall be binding upon all
future Holders of this Class B-2 Note and of any Class B-2 Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted thereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Class B-2 Note on a Payment Date, then the Trustee, in the name of and on
behalf of the Company, will notify the Person who was the registered Holder
hereof as of the Record Date preceding such Payment Date by notice mailed within
five days of such Payment Date and the amount then due and payable shall be
payable only upon presentation and surrender of this Class B-2 Note at the
Trustee's principal Corporate Trust Office.
As provided in the Indenture, the Class B-2 Notes are subordinate to
the Class A-1 Notes and, accordingly, except as may be required in connection
with a Waiver Event, no payments of principal will be made with respect to this
Class B-2 Note until all of the Class A-1 Notes have been paid in full. No
payments of interest will be made with respect to this Class B-2 Note on any
given date until all payments of interest under any of the Class A Notes that
are due and payable on such date have been paid in full.
The Company shall pay interest on overdue installments of interest
at the Class B-2 Rate to the extent lawful.
As provided in the Indenture, the Class B-2 Notes may be redeemed,
in whole, but not in part, at the option of the Company, on any Payment Date on
or after the Payment Date on which the Class A Notes have been paid in full.
A Series 1995-1 Note Prepayment Premium will be payable to holders
of the Class B-2 Notes if the Company repurchases any Class B-2 Notes prior to
the date on which the Aggregate Principal Balance of the Class B-2 Notes is less
than $__________.
B-4-6
<PAGE> 163
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class B-2 Note may be registered on the Note
Register upon surrender of this Class B-2 Note for registration of transfer at
the office or agency designated by the Company pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such certificates and other
documents as are required pursuant to the Indenture and as the Trustee may
reasonably require, and thereupon one or more new Class B-2 Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Class B-2 Note, but the transferor
may be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.
Each Noteholder or Note Owner, by acceptance of a Class B-2 Note or,
in the case of a Note Owner, a beneficial interest in a Class B-2 Note covenants
and agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Company, the Servicer or the Trustee on the Class B-2
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Trustee or the Servicer in its individual
capacity, (ii) any owner of a beneficial interest in the Company or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the Trustee
or the Servicer in its individual capacity, any holder of a beneficial interest
in the Company, the Servicer or the Trustee or of any successor or assign of the
Trustee or the Servicer in its individual capacity, except (a) as any such
Person may have expressly agreed and (b) any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Company for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Class B-2 Note, subject to
Section 12.17 of the Base Indenture.
B-4-7
<PAGE> 164
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
by accepting the benefits of the Indenture that such Noteholder will not for a
period of one year and one day following payment in full of all Notes institute
against the Company, or join in any institution against the Company of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Related
Documents.
Prior to the due presentment for registration of transfer of this
Class B-2 Note, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Class B-2 Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Class B-2
Note be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
It is the intent of the Company and the Noteholders that, for
Federal, state and local income and franchise tax purposes only, the Class B-2
Notes will evidence indebtedness of the Company secured by the Class B
Collateral. The Noteholders, by the acceptance of this Class B-2 Note, agree to
treat this Class B-2 Note for Federal, state and local income and franchise tax
purposes as indebtedness of the Company.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Series 1995-1 Notes under the
Indenture at any time by the Company with the consent of the Holders of Series
1995-1 Notes representing more than 50% in principal amount of the Outstanding
Series 1995-1 Notes which are affected by such amendment or modification. The
Indenture also contains provisions permitting the Holders of Series 1995-1 Notes
representing specified percentages of the Outstanding Series 1995-1 Notes, on
behalf of the Holders of all the Series 1995-1 Notes, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Class B-2 Note (or any one of more predecessor Class B-2 Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Class B-2 Note and of any Class B-2 Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such
B-4-8
<PAGE> 165
consent or waiver is made upon this Class B-2 Note. The Indenture also permits
the Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Series 1995-1 Notes issued
thereunder.
The term "Company" as used in this Class B-2 Note includes any
successor to the Company under the Indenture.
The Class B-2 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations set
forth therein.
This Class B-2 Note and the Indenture shall be construed in
accordance with the law of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
law.
No reference herein to the Indenture and no provision of this Class
B-2 Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Class B-2 Note at the times, place, and rate, and in the coin
or currency herein prescribed.
Interests in this Class B-2 Note may be exchanged for Definitive
Notes, subject to the provisions of the Indenture.
B-4-9
<PAGE> 166
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_____________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________________________________________
________________________________________________________________________________
(name and address of assignee)
the within Class B-2 Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ___________________, attorney, to transfer said Class
B-2 Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: ______________________ ________________________________________*
Signature Guaranteed:
_________________________________________
_____________________________
- ----------
* NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
B-4-10
<PAGE> 167
EXHIBIT B-5
TO
Series 1995-1 Supplement
FORM OF TEMPORARY GLOBAL CLASS B-2 NOTE
REGISTERED Up to $_____________**
No. R-
SEE REVERSE FOR CERTAIN CONDITIONS
CUSIP (CINS) NO. ___________
ISIN NO. ___________
THIS CLASS B-2 NOTE IS A TEMPORARY GLOBAL NOTE, WITHOUT COUPONS,
EXCHANGEABLE FOR A PERMANENT GLOBAL NOTE WHICH IS, UNDER CERTAIN CIRCUMSTANCES,
IN TURN, EXCHANGEABLE FOR DEFINITIVE NOTES WITHOUT COUPONS. THE RIGHTS ATTACHING
TO THIS CLASS B-2 NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
EXCHANGE, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CLASS B-2 NOTE, AGREES FOR THE
BENEFIT OF THRIFTY CAR RENTAL FINANCE CORPORATION (THE "COMPANY") THAT THIS
CLASS B-1 NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE
COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (3) OUTSIDE THE UNITED STATES TO A NON U.S. PERSON (AS DEFINED IN
REGULATION S OF THE SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH
REGULATION S OF THE SECURITIES ACT, OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, IN EACH CASE IN COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
- ----------
** Denominations of $250,000 and integral mutplies of $1,000.
<PAGE> 168
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.19 OF THE BASE INDENTURE,
THIS CLASS B-2 NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO
ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR CLEARING AGENCY OR TO A
NOMINEE OF SUCH SUCCESSOR CLEARING AGENCY. UNLESS THIS CLASS B-2 NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THRIFTY CAR RENTAL FINANCE CORPORATION OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS B-2 NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN 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 IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THE PRINCIPAL OF THIS CLASS B-2 NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
B-2 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
INTERESTS IN THIS CLASS B-2 NOTE MAY ONLY BE HELD BY NON U.S.
PERSONS AS SUCH TERM IS DEFINED IN REGULATION S OF THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY ONLY BE HELD IN BOOK-ENTRY FORM THROUGH EUROCLEAR OR CEDEL.
Thrifty Car Rental Finance Corporation
FLOATING RATE RENTAL CAR ASSET BACKED NOTES, CLASS B-2
Thrifty Car Rental Finance Corporation, a Delaware corporation
(herein referred to as the "Company"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of [ ] DOLLARS, (or
such lesser amount as shall be the outstanding principal amount of this Class
B-2 Note shown in Schedule A hereto) which amount shall be payable in the
amounts and at the times set forth in the Indenture, provided, however, that the
entire unpaid principal amount of this Class B-2 Note shall be due on the Series
1995-1 Termination Date, which is the ____________ Payment Date. However,
principal with respect to the Class B-2 Notes may be paid earlier or later under
certain limited circumstances described in the Indenture. The Company will pay
interest on this Class B-2 Note at the Class B-2 Rate. Such interest shall be
payable on each Payment Date until the principal of this Class B-2 Note is paid
or made available for payment, on the principal amount of this Class B-2 Note
outstanding on the preceding Payment Date (after giving effect to all payments
of principal
B-5-2
<PAGE> 169
made on the preceding Payment Date). Interest on this Class B-2 Note will accrue
for each Payment Date from the most recent Payment Date on which interest has
been paid to but excluding such Payment Date or, if no interest has yet been
paid, from __________ __, 199__. Interest will be computed on the basis of the
actual number of days elapsed and a 360-day year. Such principal of and interest
on this Class B-2 Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Class B-2 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Company with respect to this Class B-2 Note shall be applied first to
interest due and payable on this Class B-2 Note as provided above and then to
the unpaid principal of this Class B-2 Note. This Class B-2 Note does not
represent an interest in, or an obligation of, the Servicer, or any affiliate of
the Servicer other than the Company.
Interests in this Class B-2 Note are exchangeable or transferable in
whole or in part for interests in a Restricted Global Note if this Class B-2
Note is a Temporary Global Note, or for interests in a Temporary Global Note or
a Permanent Global Note if this Class B-2 Note is a Restricted Global Note (each
as defined in the Base Indenture), in each case of the same Series and class,
provided that such transfer or exchange complies with Article 2 of the Base
Indenture. Interests in this Class B-2 Note may not be exchanged for definitive
registered Notes.
Reference is made to the further provisions of this Class B-2 Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class B-2 Note. Although a summary of
certain provisions of the Indenture are set forth below and on the reverse
hereof and made a part hereof, this Class B-2 Note does not purport to summarize
the Indenture and reference is made to the Indenture for information with
respect to the interests, rights, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Servicer and the
Trustee. A copy of the Indenture may be requested from the Trustee by writing to
the Trustee at: 4 Albany Street, New York, New York 10006, Attn: Corporate Trust
and Agency Group. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class B-2 Note
shall not be entitled to any
B-5-3
<PAGE> 170
benefit under the Indenture referred to on the reverse hereof, or be valid or
obligatory for any purpose.
B-5-4
<PAGE> 171
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: ___________________ THRIFTY CAR RENTAL FINANCE
CORPORATION
By:_______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B-2 Notes of a series issued under the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_______________________________________
Authorized Signature
B-5-5
<PAGE> 172
[REVERSE OF CLASS B-2 NOTE]
This Class B-2 Note is one of a duly authorized issue of Class B-2
Notes of the Company, designated as its Floating Rate Rental Car Asset Backed
Notes, Class B-2 (herein called the "Class B-2 Notes"), all issued under (i) a
Base Indenture dated as of December 13, 1995 (such Base Indenture, as amended or
modified, is herein called the "Base Indenture"), between the COMPANY and
BANKERS TRUST COMPANY, as trustee (the "Trustee", which term includes any
successor Trustee under the Base Indenture), and (ii) a Series 1995-1 Supplement
dated as of December 13, 1995 (the "Series 1995-1 Supplement") between the
Company and the Trustee. The Base Indenture and the Series 1995-1 Supplement are
referred to herein as the "Indenture". The Class B-2 Notes are subject to all
terms of the Indenture. All terms used in this Class B-2 Note that are defined
in the Indenture, as supplemented or amended, shall have the meanings assigned
to them in or pursuant to the Indenture, as so supplemented or amended.
The Class B-2 Notes are and will be equally and ratably secured by
the Class B Collateral pledged as security therefor as provided in the Indenture
and the Series 1995-1 Supplement.
Principal of the Class B-2 Notes will be payable on each Payment
Date specified in and in the amounts described in the Indenture. "Payment Date"
means the 25th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing _________ __, 199__.
As described above, the entire unpaid principal amount of this Class
B-2 Note shall be due and payable on the Series 1995-1 Termination Date.
Notwithstanding the foregoing, if an Amortization Event, Liquidation Event of
Default, Waiver Event or Series 1995-1 Limited Liquidation Event of Default
shall have occurred and be continuing then, in certain circumstances, principal
on the Class B-2 Notes may be paid earlier, as described in the Indenture. All
principal payments on the Class B-2 Notes shall be made pro rata to the
Noteholders entitled thereto.
Payments of interest on this Class B-2 Note due and payable on each
Payment Date, together with the installment of principal then due, if any, to
the extent not in full payment of this Class B-2 Note, shall be made by check
mailed first class to the Person whose name appears as the Holder of record of
this Class B-2 Note (or one or more predecessor Class B-2 Notes) on the Note
Register as of the close of business on each Record
B-5-6
<PAGE> 173
Date, except that with respect to Class B-2 Notes registered on the Record Date
in the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Class
B-2 Note be submitted for notation of payment. Any reduction in the principal
amount of this Class B-2 Note (or any one or more predecessor Class B-2 Notes)
effected by any payments made on any Payment Date shall be binding upon all
future Holders of this Class B-2 Note and of any Class B-2 Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted thereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Class B-2 Note on a Payment Date, then the Trustee, in the name of and on
behalf of the Company, will notify the Person who was the registered Holder
hereof as of the Record Date preceding such Payment Date by notice mailed within
five (5) days of such Payment Date and the amount then due and payable shall be
payable only upon presentation and surrender of this Class B-2 Note at the
Trustee's principal Corporate Trust Office.
As provided in the Indenture, the Class B-2 Notes are subordinate to
the Class A-1 Notes and, accordingly, except as may be required in connection
with a Waiver Event, no payments of principal will be made with respect to this
Class B-2 Note until all of the Class A-1 Notes have been paid in full. No
payments of interest will be made with respect to this Class B-2 Note on any
given date until all payments of interest under any of the Class A Notes that
are due and payable on such date have been paid in full.
The Company shall pay interest on overdue installments of interest
at the Class B-2 Rate to the extent lawful.
As provided in the Indenture, the Class B-2 Notes may be redeemed,
in whole, but not in part, at the option of the Company, on any Payment Date on
or after the Payment Date on which the Class A Notes have been paid in full.
A Series 1995-1 Note Prepayment Premium will be payable to holders
of the Class B-2 Notes if the Company repurchases any Class B-2 Notes prior to
the date on which the Aggregate Principal Balance of the Class B-2 Notes is less
than $__________.
B-5-7
<PAGE> 174
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class B-2 Note may be registered on the Note
Register upon surrender of this Class B-2 Note for registration of transfer at
the office or agency designated by the Company pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such other documents as the Trustee
may reasonably require, and thereupon one or more new Class B-2 Notes of
authorized denominations and in the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Class B-2 Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Class B-2 Note or,
in the case of a Note Owner, a beneficial interest in a Class B-2 Note covenants
and agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Company, the Servicer or the Trustee on the Class B-2
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Trustee or the Servicer in its individual
capacity, (ii) any owner of a beneficial interest in the Company or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the Trustee
or the Servicer in its individual capacity, any holder of a beneficial interest
in the Company, the Servicer or the Trustee or of any successor or assign of the
Trustee or the Servicer in its individual capacity, except (a) as any such
Person may have expressly agreed and (b) any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Company for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Class B-2 Note, subject to
Section 12.17 of the Base Indenture.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note
B-5-8
<PAGE> 175
covenants and agrees that by accepting the benefits of the Indenture that such
Noteholder will not for a period of one year and one day following payment in
full of all Notes institute against the Company, or join in any institution
against the Company of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Notes, the
Indenture or the Related Documents.
Prior to the due presentment for registration of transfer of this
Class B-2 Note, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Class B-2 Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Class B-2
Note be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
It is the intent of the Company and the Noteholders that, for
Federal, state and local income and franchise tax purposes only, the Class B-2
Notes will evidence indebtedness of the Company secured by the Class B
Collateral. The Noteholders, by the acceptance of this Class B-2 Note, agree to
treat this Class B-2 Note for Federal, state and local income and franchise tax
purposes as indebtedness of the Company.
Each Holder of this Class B-2 Note shall provide to the Trustee at
least annually an appropriate statement (on Internal Revenue Service Form W-8 or
suitable substitute) with respect to United States federal income tax and
withholding tax, signed under penalties of perjury, certifying that the
beneficial owner of this Class B-2 Note is a non U.S. person and providing the
Noteholder's name and address. If the information provided in the statement
changes, the Noteholder shall so inform the Trustee within thirty (30) days of
such change.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Series 1995-1 Notes under the
Indenture at any time by the Company with the consent of the Holders of Series
1995-1 Notes representing more than 50% in principal amount of the Outstanding
Series 1995-1 Notes which are affected by such amendment or modification. The
Indenture also contains provisions permitting the Holders of Series 1995-1 Notes
representing specified percentages of the Outstanding Series 1995-1 Notes, on
behalf of the Holders of all the Series 1995-1
B-5-9
<PAGE> 176
Notes, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Class B-2 Note (or any one of
more predecessor Class B-2 Notes) shall be conclusive and binding upon such
Holder and upon all future Holders of this Class B-2 Note and of any Class B-2
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Class B-2 Note. The Indenture also permits the Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of Holders
of the Series 1995-1 Notes issued thereunder.
The term "Company" as used in this Class B-2 Note includes any
successor to the Company under the Indenture.
The Class B-2 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations set
forth therein.
This Class B-2 Note and the Indenture shall be construed in
accordance with the law of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
law.
No reference herein to the Indenture and no provision of this Class
B-2 Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Class B-2 Note at the times, place, and rate, and in the coin
or currency herein prescribed.
Prior to the Exchange Date (as defined below), payments (if any) on
this Class B-2 Note will only be paid to the extent that there is presented by
Cedel Bank, societe anonyme ("Cedel") or Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euroclear System ("Euroclear") to the
Trustee at its office in London a certificate, substantially in the form set out
in Exhibit E to the Base Indenture, to the effect that it has received from or
in respect of a person entitled to a Note (as shown by its records) a
certificate from such person in or substantially in the form of Exhibit F to the
Base Indenture. After the Exchange Date the holder of this Class B-2 Note will
not be entitled to receive any payment hereon, until this Class B-2 Note is
exchanged in full for a Permanent Global Note. This Class B-2 Note shall in all
other respects be entitled to the same benefits as the Permanent Global Notes
under the Indenture.
B-5-10
<PAGE> 177
On or after the date (the "Exchange Date") which is the date that is
the 40th day after the later of the Closing Date and the completion of the
distribution of the relevant Series, interests in this Class B-2 Note may be
exchanged (free of charge) for interests in a Permanent Global Note in the form
of Exhibit B-3 to the Series 1995-1 Supplement upon presentation of this Class
B-2 Note at the office in London of the Trustee (or at such other place outside
the United States of America, its territories and possessions as the Trustee may
agree). The Permanent Global Note shall be so issued and delivered in exchange
for only that portion of this Class B-2 Note in respect of which there shall
have been presented to the Trustee by Euroclear or Cedel a certificate,
substantially in the form set out in Exhibit E to the Base Indenture, to the
effect that it has received from or in respect of a person entitled to a Note
(as shown by its records) a certificate from such person in or substantially in
the form of Exhibit F to the Base Indenture.
On an exchange of the whole of this Class B-2 Note, this Class B-2
Note shall be surrendered to the Trustee at its office in London. On an exchange
of part only of this Class B-2 Note, details of such exchange shall be entered
by or on behalf of the Company in Schedule A hereto and the relevant space in
Schedule A hereto recording such exchange shall be signed by or on behalf of the
Company. If, following the issue of a Permanent Global Note in exchange for some
of the Notes represented by this Class B-2 Note, further Notes of this Series
are to be exchanged pursuant to this paragraph, such exchange may be effected,
without the issue of a new Permanent Global Note, by the Company or its agent
endorsing Part I of Schedule A of the Permanent Global Note previously issued to
reflect an increase in the aggregate principal amount of such Permanent Global
Note by an amount equal to the aggregate principal amount of the additional
Notes of this Series to be exchanged.
Interests in this Class B-2 Note will be transferable in accordance
with the rules and procedures for the time being of Euroclear or Cedel. Each
person who is shown in the records of Euroclear and Cedel as entitled to a
particular number of Notes by way of an interest in this Class B-2 Note will be
treated by the Company, the Trustee and any paying agent as the holder of such
number of Notes. For purposes of this Class B-2 Note, the securities account
records of Euroclear or Cedel shall, in the absence of manifest error, be
conclusive evidence of the identity of the holders of Notes and of the principal
amount of Notes represented by this Class B-2 Note credited to the securities
accounts of such holders of Notes. Any statement issued by Euroclear or Cedel to
any holder relating to a specified Note or Notes credited to the securities
account of such holder and
B-5-11
<PAGE> 178
stating the principal amount of such Note or Notes and certified by Euroclear or
Cedel to be a true record of such securities account shall, in the absence of
manifest error, be conclusive evidence of the records of Euroclear or Cedel for
the purposes of the next preceding sentence (but without prejudice to any other
means of producing such records in evidence). Notwithstanding any provision to
the contrary contained in this Class B-2 Note, the Company irrevocably agrees,
for the benefit of such holder and its successors and assigns, that, subject to
the provisions of the Indenture, each holder or its successors or assigns may
file any claim, take any action or institute any proceeding to enforce, directly
against the Company, the obligation of the Company hereunder to pay any amount
due in respect of each Note represented by this Class B-2 Note which is credited
to such holder's securities account with Euroclear or Cedel without the
production of this Class B-2 Note.
B-5-12
<PAGE> 179
SCHEDULE A
SCHEDULE OF EXCHANGES FOR NOTES
REPRESENTED BY A PERMANENT GLOBAL NOTE
The following exchanges of a part of this Class B-2 Note for Notes represented
by a Permanent Global Note have been made:
================================================================================
Part of principal
amount of this Remaining
Class B-2 Note Principal
exchanged for Notes amount of this Notation made
Date represented by a Class B-2 Note by or on
exchange Permanent Global following such behalf of the
made Note exchange Company
- --------------------------------------------------------------------------------
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B-5-13
<PAGE> 180
EXHIBIT B-6
TO
Series 1995-1 Supplement
FORM OF PERMANENT GLOBAL CLASS B-2 NOTE
REGISTERED $__________***
No. R-
SEE REVERSE FOR CERTAIN CONDITIONS
CUSIP (CINS) NO. __________
ISIN NO. __________
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CLASS B-2 NOTE, AGREES FOR THE
BENEFIT OF THRIFTY CAR RENTAL FINANCE CORPORATION (THE "COMPANY") THAT THIS
CLASS B-1 NOTE IS BEING ACQUIRED FOR ITS OWN ACCOUNT AND NOT WITH A VIEW TO
DISTRIBUTION AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE
COMPANY (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO A PERSON WHO THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (3) OUTSIDE THE UNITED STATES TO A NON U.S. PERSON (AS DEFINED IN
REGULATION S OF THE SECURITIES ACT) IN A TRANSACTION IN COMPLIANCE WITH
REGULATION S OF THE SECURITIES ACT, OR (4) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT, IN EACH CASE IN COMPLIANCE WITH THE INDENTURE AND ALL APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.19 OF THE BASE INDENTURE,
THIS CLASS B-2 NOTE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO
ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR CLEARING AGENCY OR TO A
NOMINEE OF SUCH SUCCESSOR CLEARING AGENCY. UNLESS THIS CLASS B-2 NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THRIFTY CAR RENTAL FINANCE CORPORATION OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS B-2 NOTE ISSUED
IS REGISTERED
- ----------
*** Denominations of $250,000 and integral multiples of $1,000.
<PAGE> 181
IN THE NAME OF CEDE & CO. OR IN 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 IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS CLASS B-2 NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
B-2 NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
Thrifty Car Rental Finance Corporation
FLOATING RATE RENTAL CAR ASSET BACKED NOTES, CLASS B-2
Thrifty Car Rental Finance Corporation, a Delaware corporation
(herein referred to as the "Company"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of [ ] DOLLARS,
which amount shall be payable in the amounts and at the times set forth in the
Indenture, provided, however, that the entire unpaid principal amount of this
Class B-2 Note shall be due on the Series 1995-1 Termination Date, which is the
____________ Payment Date. However, principal with respect to the Class B-2
Notes may be paid earlier or later under certain limited circumstances described
in the Indenture. The Company will pay interest on this Class B-2 Note at the
Class B-2 Rate. Such interest shall be payable on each Payment Date until the
principal of this Class B-2 Note is paid or made available for payment, on the
principal amount of this Class B-2 Note outstanding on the preceding Payment
Date (after giving effect to all payments of principal made on the preceding
Payment Date). Interest on this Class B-2 Note will accrue for each Payment Date
from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from
___________ __, 199__. Interest will be computed on the basis of the actual
number of days elapsed and a 360-day year. Such principal of and interest on
this Class B-2 Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Class B-2 Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Company with respect to this Class B-2 Note shall be applied first to
interest due and payable on this Class B-2 Note as provided above and then to
the unpaid principal of this Class B-2 Note. This Class B-2
B-6-2
<PAGE> 182
Note does not represent an interest in, or an obligation of, the Servicer, or
any affiliate of the Servicer other than the Company.
Reference is made to the further provisions of this Class B-2 Note
set forth on the reverse hereof, which shall have the same effect as though
fully set forth on the face of this Class B-2 Note. Although a summary of
certain provisions of the Indenture are set forth below and on the reverse
hereof and made a part hereof, this Class B-2 Note does not purport to summarize
the Indenture and reference is made to the Indenture for information with
respect to the interests, right, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Servicer and the
Trustee. A copy of the Indenture may be requested from the Trustee by writing to
the Trustee at: 4 Albany Street, New York, New York 10006, Attn: Corporate Trust
and Agency Agreement. To the extent not defined herein, the capitalized terms
used herein have the meanings ascribed to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class B-2 Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
B-6-3
<PAGE> 183
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: ___________________ THRIFTY CAR RENTAL FINANCE
CORPORATION
By:_______________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B-2 Notes of a series issued under the
within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By:_______________________________________
Authorized Signature
B-6-4
<PAGE> 184
[REVERSE OF CLASS B-2 NOTE]
This Class B-2 Note is one of a duly authorized issue of Class B-2
Notes of the Company, designated as its Floating Rate Rental Car Asset Backed
Notes, Class B-2 (herein called the "Class B-2 Notes"), all issued under (i) a
Base Indenture dated as of December 13, 1995 (such Base Indenture, as amended or
modified, is herein called the "Base Indenture"), between the COMPANY and
BANKERS TRUST COMPANY, as trustee (the "Trustee", which term includes any
successor Trustee under the Base Indenture), and (ii) a Series 1995-1 Supplement
dated as of December 13, 1995 (the "Series 1995-1 Supplement") between the
Company and the Trustee. The Base Indenture and the Series 1995-1 Supplement are
referred to herein as the "Indenture". The Class B-2 Notes are subject to all
terms of the Indenture. All terms used in this Class B-2 Note that are defined
in the Indenture, as supplemented or amended, shall have the meanings assigned
to them in or pursuant to the Indenture, as so supplemented or amended.
The Class B-2 Notes are and will be equally and ratably secured by
the Class B Collateral pledged as security therefor as provided in the Indenture
and the Series 1995-1 Supplement.
Principal of the Class B-2 Notes will be payable on each Payment
Date specified in and in the amounts described in the Indenture. "Payment Date"
means the 25th day of each month, or, if any such date is not a Business Day,
the next succeeding Business Day, commencing _________ __, 199__.
As described above, the entire unpaid principal amount of this Class
B-2 Note shall be due and payable on the Series 1995-1 Termination Date.
Notwithstanding the foregoing, if an Amortization Event, Liquidation Event of
Default, Waiver Event or Series 1995-1 Limited Liquidation Event of Default
shall have occurred and be continuing then, in certain circumstances, principal
on the Class B-2 Notes may be paid earlier, as described in the Indenture. All
principal payments on the Class B-2 Notes shall be made pro rata to the
Noteholders entitled thereto.
Payments of interest on this Class B-2 Note due and payable on each
Payment Date, together with the installment of principal then due, if any, to
the extent not in full payment of this Class B-2 Note, shall be made by check
mailed first class to the Person whose name appears as the Holder of record of
this Class B-2 Note (or one or more predecessor Class B-2 Notes) on the Note
Register as of the close of business on each Record
B-6-5
<PAGE> 185
Date, except that with respect to Class B-2 Notes registered on the Record Date
in the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Class
B-2 Note be submitted for notation of payment. Any reduction in the principal
amount of this Class B-2 Note (or any one or more predecessor Class B-2 Notes)
effected by any payments made on any Payment Date shall be binding upon all
future Holders of this Class B-2 Note and of any Class B-2 Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted thereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Class B-2 Note on a Payment Date, then the Trustee, in the name of and on
behalf of the Company, will notify the Person who was the registered Holder
hereof as of the Record Date preceding such Payment Date by notice mailed within
five days of such Payment Date and the amount then due and payable shall be
payable only upon presentation and surrender of this Class B-2 Note at the
Trustee's principal Corporate Trust and Agency Group.
As provided in the Indenture, the Class B-2 Notes are subordinate to
the Class A-1 Notes and, accordingly, except as may be required in connection
with a Waiver Event, no payments of principal will be made with respect to this
Class B-2 Note until all of the Class A-1 Notes have been paid in full. No
payments of interest will be made with respect to this Class B-2 Note on any
given date until all payments of interest under any of the Class A Notes that
are due and payable on such date have been paid in full.
The Company shall pay interest on overdue installments of interest
at the Class B-2 Rate to the extent lawful.
As provided in the Indenture, the Class B-2 Notes may be redeemed,
in whole, but not in part, at the option of the Company, on any Payment Date on
or after the Payment Date on which the Class A Notes have been paid in full.
A Series 1995-1 Note Prepayment Premium will be payable to holders
of the Class B-2 Notes if the Company repurchases any Class B-2 Notes prior to
the date on which the Aggregate Principal Balance of the Class B-2 Notes is less
than $__________.
B-6-6
<PAGE> 186
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class B-2 Note may be registered on the Note
Register upon surrender of this Class B-2 Note for registration of transfer at
the office or agency designated by the Company pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, with such signature guaranteed by a commercial bank
or trust company located, or having a correspondent located, in The City of New
York or the city in which the Corporate Trust Office is located, or a member
firm of a national securities exchange, and such certificate and other documents
as are required pursuant to the Indenture and as the Trustee may reasonably
require, and thereupon one or more new Class B-2 Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Class B-2 Note, but the transferor
may be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.
Each Noteholder or Note Owner, by acceptance of a Class B-2 Note or,
in the case of a Note Owner, a beneficial interest in a Class B-2 Note covenants
and agrees that no recourse may be taken, directly or indirectly, with respect
to the obligations of the Company, the Servicer or the Trustee on the Class B-2
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Trustee or the Servicer in its individual
capacity, (ii) any owner of a beneficial interest in the Company or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the Trustee
or the Servicer in its individual capacity, any holder of a beneficial interest
in the Company, the Servicer or the Trustee or of any successor or assign of the
Trustee or the Servicer in its individual capacity, except (a) as any such
Person may have expressly agreed and (b) any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Company for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Class B-2 Note, subject to
Section 12.17 of the Base Indenture.
B-6-7
<PAGE> 187
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note covenants and agrees that
by accepting the benefits of the Indenture that such Noteholder will not for a
period of one year and one day following payment in full of all Notes institute
against the Company, or join in any institution against the Company of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Related
Documents.
Prior to the due presentment for registration of transfer of this
Class B-2 Note, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Class B-2 Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Class B-2
Note be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
It is the intent of the Company and the Noteholders that, for
Federal, state and local income and franchise tax purposes only, the Class B-2
Notes will evidence indebtedness of the Company secured by the Class B
Collateral. The Noteholders, by the acceptance of this Class B-2 Note, agree to
treat this Class B-2 Note for Federal, state and local income and franchise tax
purposes as indebtedness of the Company.
In the event a Noteholder or Note Owner is a nonresident alien,
foreign corporation or other non-United States person (a "Foreign Person"), such
Foreign Person shall provide to the Trustee at least annually an appropriate
statement (on Internal Revenue Service Form W-8 or suitable substitute) with
respect to United States federal income tax and withholding tax, signed under
penalties of perjury, certifying that the beneficial owner of this Class B-2
Note is a Foreign Person and providing the Noteholder's name and address. If the
information provided in the statement changes, the Foreign Person shall so
inform the Trustee within thirty (30) days of such change.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Series 1995-1 Notes under the
Indenture at any time by the Company with the consent of the Holders of Series
1995-1 Notes representing more than 50% in principal amount of the Outstanding
Series 1995-1 Notes which are affected by such
B-6-8
<PAGE> 188
amendment or modification. The Indenture also contains provisions permitting the
Holders of Series 1995-1 Notes representing specified percentages of the
Outstanding Series 1995-1 Notes, on behalf of the Holders of all the Series
1995-1 Notes, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Class B-2 Note (or any one of
more predecessor Class B-2 Notes) shall be conclusive and binding upon such
Holder and upon all future Holders of this Class B-2 Note and of any Class B-2
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Class B-2 Note. The Indenture also permits the Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of Holders
of the Series 1995-1 Notes issued thereunder.
The term "Company" as used in this Class B-2 Note includes any
successor to the Company under the Indenture.
The Class B-2 Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations set
forth therein.
This Class B-2 Note and the Indenture shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
laws.
No reference herein to the Indenture and no provision of this Class
B-2 Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Class B-2 Note at the times, place, and rate, and in the coin
or currency herein prescribed.
Interests in this Class B-2 Note will be transferable in accordance
with the rules and procedures for the time being of Euroclear or Cedel. Each
person who is shown in the records of Euroclear and Cedel as entitled to a
particular number of Notes by way of an interest in this Class B-2 Note will be
treated by the Trustee and any paying agent as the holder of such number of
Notes. For purposes of this Class B-2 Note, the securities account records of
Euroclear or Cedel shall, in the absence of manifest error, be conclusive
evidence of the identity of the holders of Notes and of the principal amount of
Notes represented by this Class B-2 Note credited to the securities accounts of
such holders of Notes. Any statement issued by Euroclear or
B-6-9
<PAGE> 189
Cedel to any holder relating to a specified Note or Notes credited to the
securities account of such holder and stating the principal amount of such Note
or Notes and certified by Euroclear or Cedel to be a true record of such
securities account shall, in the absence of manifest error, be conclusive
evidence of the records of Euroclear or Cedel for the purposes of the next
preceding sentence (but without prejudice to any other means of producing such
records in evidence). Notwithstanding any provision to the contrary contained in
this Class B-2 Note, the Company irrevocably agrees, for the benefit of such
holder and its successors and assigns, that, subject to the provisions of the
Indenture, each holder or its successors or assigns may file any claim, take any
action or institute any proceeding to enforce, directly against the Company, the
obligation of the Company hereunder to pay any amount due in respect of each
Note represented by this Class B-2 Note which is credited to such holder's
securities account with Euroclear or Cedel without the production of this Class
B-2 Note.
Interests in this Class B-2 Note may be exchanged for Definitive
Notes subject to the provisions of the Indenture.
B-6-10
<PAGE> 190
EXHIBIT C
TO
Series 1995-1 SUPPLEMENT
FORM OF CONSENT
BANKERS TRUST COMPANY,
as Trustee
4 Albany Street
New York, NY 10006
Attn: Corporate Trust and Agency Group
Thrifty Car Rental Finance Corporation
5330 East 31st Street
Suite 100
Tulsa, Oklahoma 74153
Attn:
This Consent is delivered pursuant to the Change of Percentage
Notice dated _________, 19___ (the "Notice") and the Series 1995-1 Supplement,
dated as of December __, 1995 (as amended, modified or supplemented from time to
time, the "Series 1995-1 Supplement") between Thrifty Car Rental Finance
Corporation, an Oklahoma corporation ("Thrifty Finance") and BANKERS TRUST
COMPANY, a New York banking corporation ("Trustee"). Terms used herein have the
meaning provided in the Series 1995-1 Supplement.
Pursuant to Article 5 of the Series 1995-1 Supplement, the Trustee
has delivered a Notice indicating that there be an adjustment of either the
Maximum Manufacturer Percentage with respect to any Eligible Manufacturer or the
Maximum Non-Program Percentage with respect to Non-Program Vehicles. The
undersigned hereby waives such Vehicle purchase restrictions. The undersigned
understands that this Consent will only be effective if the Trustee receives
Consents from Noteholders representing not less than 25% of the aggregate unpaid
principal amount of the Class A Notes on or before _________, 19__.
The undersigned hereby represents and warrants that it is the
beneficial owner of $_________ in principal amount of Class [A] [B] Notes.
[Name]
By:______________________________________
<PAGE> 1
EXHIBIT 4.4
[EXECUTION COPY]
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
dated as of December 13, 1995,
between
THRIFTY CAR RENTAL FINANCE CORPORATION,
as Lessor, and
THRIFTY RENT-A-CAR SYSTEM, INC.,
as Lessee and Servicer
<PAGE> 2
TABLE OF CONTENTS
Page
----
SECTION 1. CERTAIN DEFINITIONS.............................................. 1
Section 1.1. Certain Definitions................................... 1
Section 1.2. Accounting and Financial Determinations............... 1
Section 1.3. Cross References; Headings............................ 2
Section 1.4. Interpretation........................................ 2
SECTION 2. GENERAL AGREEMENT................................................ 2
Section 2.1. Leasing of Vehicles................................... 3
Section 2.2. Right of Lessee to Act as Lessor's Agent.............. 4
Section 2.3. Payment of Purchase Price by Lessor................... 4
Section 2.4. Non-liability of Lessor............................... 5
SECTION 3. TERM............................................................. 6
Section 3.1. Vehicle Lease Commencement Date....................... 6
Section 3.2. Lease Commencement Date............................... 6
SECTION 4. CONDITIONS PRECEDENT............................................. 6
Section 4.1. No Default............................................ 6
Section 4.2. Limitations of the Acquisition of Certain
Vehicles.............................................. 6
SECTION 5. RENT AND CHARGES................................................. 7
Section 5.1. Payment of Rent....................................... 7
Section 5.2. Payment of Availability Payment....................... 7
Section 5.3. Payment of Monthly Supplemental Payments.............. 7
Section 5.4. Payment of Termination Payments, Casualty
Payments, and Late Return Payments.................... 8
Section 5.5. Late Payment.......................................... 8
SECTION 6. INSURANCE........................................................ 8
Section 6.1. Fleet Insurance....................................... 8
Section 6.2. Information........................................... 8
SECTION 7. CASUALTY OBLIGATION.............................................. 8
SECTION 8. VEHICLE USE...................................................... 9
SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES;
PENALTIES AND FINES............................................. 10
SECTION 10. MAINTENANCE AND REPAIRS.......................................... 11
SECTION 11. VEHICLE WARRANTIES............................................... 11
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<PAGE> 3
Page
----
SECTION 12. PROGRAM VEHICLE USAGE REQUIREMENTS AND
DISPOSITION.................................................... 12
Section 12.1. Usage................................................ 12
Section 12.2. Disposition Procedure................................ 12
Section 12.3. Termination Payments................................. 12
SECTION 13. LATE RETURN PAYMENTS............................................ 13
SECTION 14. REDESIGNATION OF VEHICLES....................................... 13
SECTION 15. GENERAL INDEMNITY............................................... 14
Section 15.1. Indemnity of the Lessor.............................. 14
Section 15.2. Indemnification of the Trustee....................... 16
Section 15.3. Reimbursement Obligation by the Lessee............... 16
Section 15.4. Notice to Lessee of Claims........................... 17
Section 15.5. Defense of Claims.................................... 17
SECTION 16. ASSIGNMENT...................................................... 17
SECTION 17. DEFAULT AND REMEDIES THEREFOR................................... 18
Section 17.1. Events of Default.................................... 18
Section 17.2. Effect of Lease Event of Default..................... 19
Section 17.3. Rights of Lessor Upon Lease Event of
Default............................................ 19
Section 17.4. Measure of Damages................................... 20
Section 17.5. Application of Proceeds.............................. 21
SECTION 18. MANUFACTURER EVENTS OF DEFAULT.................................. 22
SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE.......................... 22
SECTION 20. SURVIVAL........................................................ 23
SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL
AGENT AND TRUSTEE.............................................. 23
SECTION 22. MODIFICATION AND SEVERABILITY................................... 25
SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES.......................... 25
Section 23.1. Due Organization, Authorization, No
Conflicts, Etc..................................... 25
Section 23.2. Financial Information; Financial Condition........... 25
Section 23.3. Litigation........................................... 26
Section 23.4. Liens................................................ 26
Section 23.5. Necessary Actions.................................... 26
Section 23.6. Employee Benefit Plans............................... 27
Section 23.7. Investment Company Act............................... 27
Section 23.8. Regulations G, T, U and X............................ 28
-ii-
<PAGE> 4
Page
----
Section 23.9. Business Locations; Trade Names; Principal
Places of Business Locations....................... 28
Section 23.10. Taxes................................................ 28
Section 23.11. Governmental Authorization........................... 28
Section 23.12. Compliance with Laws................................. 28
Section 23.13. Eligible Vehicles; Eligible Franchisees.............. 29
Section 23.14. Supplemental Documents True and Correct.............. 29
SECTION 24. CERTAIN AFFIRMATIVE COVENANTS................................... 29
Section 24.1. Corporate Existence; Foreign Qualification........... 29
Section 24.2. Books, Records and Inspections....................... 29
Section 24.3. Vehicle Disposition Programs......................... 30
Section 24.4. Reporting Requirements............................... 30
Section 24.5. Taxes and Liabilities................................ 35
Section 24.6. Compliance with Laws................................. 36
Section 24.7. Maintenance of Separate Existence.................... 36
Section 24.8. Master Collateral Agent as Lienholder................ 36
Section 24.9. Maintenance of Property.............................. 36
Section 24.10. Access to Certain Documentation and
Information Regarding the Collateral............... 36
SECTION 25. CERTAIN NEGATIVE COVENANTS...................................... 38
Section 25.1. Mergers, Consolidations.............................. 38
Section 25.2. Other Agreements..................................... 38
Section 25.3. Liens................................................ 38
Section 25.4. Use of Vehicles...................................... 39
Section 25.5. Acquisition and Financing of Vehicles................ 39
SECTION 26. SERVICING COMPENSATION.......................................... 39
SECTION 27. BANKRUPTCY PETITION AGAINST LESSOR.............................. 40
SECTION 28. SUBMISSION TO JURISDICTION...................................... 41
SECTION 29. GOVERNING LAW................................................... 41
SECTION 30. JURY TRIAL...................................................... 42
SECTION 31. NOTICES......................................................... 42
SECTION 32. HEADINGS........................................................ 42
SECTION 33. EXECUTION IN COUNTERPARTS....................................... 42
SECTION 34. EFFECTIVENESS................................................... 43
-iii-
<PAGE> 5
SCHEDULES AND ATTACHMENTS
Schedule 1 Litigation Claims
Schedule 2 Pension Plans
Schedule 3 Business Locations
Schedule 4 Liens
ATTACHMENT A-1 Information on Existing Fleet
ATTACHMENT A-2 Vehicle Acquisition Schedule
ATTACHMENT B Form of Power of Attorney
ATTACHMENT C Form of Certification of Trade or Business Use
-iv-
<PAGE> 6
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
This Master Motor Vehicle Lease and Servicing Agreement (the "Base Lease"
and, as supplemented by the Lease Annexes, this "Agreement" or "Lease"), dated
as of December 13, 1995, by and between THRIFTY CAR RENTAL FINANCE CORPORATION,
an Oklahoma corporation (the "Lessor"), and THRIFTY RENT-A-CAR SYSTEM, INC., an
Oklahoma corporation ("Thrifty"), in its capacity as lessee (the "Lessee") and
as servicer (the "Servicer").
W I T N E S S E T H:
WHEREAS, the Lessor (such capitalized term, together with all other
capitalized terms used herein, shall have the meaning assigned thereto in
Section 1) intends to refinance the Existing Fleet and to purchase, and finance
the purchase of, additional Eligible Vehicles from one or more Manufacturers
with the proceeds obtained by the issuance of its Rental Car Asset Backed Notes
and with certain other funds; and
WHEREAS, the Lessor desires to lease to the Lessee, and the Lessee desires
to lease from the Lessor, Vehicles for use in the Lessee's business of
subleasing Vehicles to Eligible Franchisees;
NOW, THEREFORE, in consideration of the foregoing premises, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
Section 1.1. Certain Definitions. As used in this Agreement and unless the
context requires a different meaning, capitalized terms not otherwise defined
herein shall have the meanings assigned to such terms in the Definitions List,
attached as Schedule 1 to the Base Indenture, dated as of December 13, 1995 (as
such agreement may be amended, supplemented, restated or otherwise modified from
time to time in accordance with its terms, the "Base Indenture"), between
Thrifty Finance and Bankers Trust Company, as trustee, as in effect on the date
hereof and as such Schedule 1 may be amended, supplemented or modified from time
to time in accordance with the terms of the Base Indenture (the "Definitions
List").
Section 1.2. Accounting and Financial Determinations. Where the character
or amount of any asset or liability or item of income or expense is required to
be determined, or any accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall be made, to
the extent applicable and except as otherwise specified in
<PAGE> 7
this Agreement, in accordance with GAAP. When used herein, the term "financial
statement" shall include the notes and schedules thereto.
Section 1.3. Cross References; Headings. The words "hereof", "herein" and
"hereunder" and words of a similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Annex, Section, Schedule and Exhibit references contained in this
Agreement are references to Annexes, Sections, Schedules and Exhibits in or to
this Agreement unless otherwise specified. Any reference in any Section or
definition to any clause is, unless otherwise specified, to such clause of such
Section or definition. The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
Section 1.4. Interpretation. In this Agreement, unless the context
otherwise requires:
(a) the singular includes the plural and vice versa;
(b) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to any Person in a particular
capacity only refers to such Person in such capacity;
(c) reference to any gender includes the other gender;
(d) reference to any Requirement of Law means such Requirement of
Law as amended, modified, codified or reenacted, in whole or in part, and
in effect from time to time;
(e) "including" (and, with correlative meaning, "include") means
including without limiting the generality of any description preceding
such term;
(f) "or" is not exclusive;
(g) provisions apply to successive events and transactions; and
(h) with respect to the determination of any period of time, "from"
means "from and including" and "to" and "through" mean "to but excluding".
SECTION 2. GENERAL AGREEMENT. (a) As specified in the Lease Annexes, the
Lessee and the Lessor intend that this Agreement be (i) an operating lease with
respect to the Acquired
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<PAGE> 8
Vehicles and (ii) a financing arrangement with respect to the Financed Vehicles.
(b) If, notwithstanding the intent of the parties to this Agreement, this
Agreement is deemed by any court, tribunal, arbitrator or other adjudicative
authority in any proceeding (each, a "Court") to constitute a financing
arrangement or otherwise not to constitute a "true lease" with respect to the
Acquired Vehicles, then it is the intention of the parties that this Agreement
together with the Master Collateral Agency Agreement, as such agreements apply
to the Acquired Vehicles, shall constitute a security agreement under applicable
law, and it is the intention of the parties that this Agreement together with
the Master Collateral Agency Agreement, as such agreements apply to the Financed
Vehicles, shall in all events constitute a security agreement under applicable
law. The Lessee hereby acknowledges that it has granted to the Master Collateral
Agent, pursuant to the Master Collateral Agency Agreement, for the benefit of
the Trustee, a first priority security interest in all of Thrifty's right, title
and interest in and to the Thrifty Master Collateral (as defined therein) as
collateral security for the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of all of the
obligations and liabilities of the Lessee to the Lessor and the Trustee, whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred (including interest accruing after the Lease
Expiration Date and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding), which may arise under, out of, or in connection with, this
Agreement and any other document made, delivered or given in connection
herewith, whether on account of rent, principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees and
disbursements of counsel to the Lessor or the Trustee that are required to be
paid by the Lessee pursuant to the terms hereof).
Section 2.1. Leasing of Vehicles. From time to time, subject to the terms
and conditions hereof, the Lessor agrees to lease to the Lessee and the Lessee
agrees to lease from the Lessor the Existing Fleet and each additional Acquired
Vehicle or Financed Vehicle identified in Vehicle order summaries (each, a
"Vehicle Order") produced from time to time by the Lessee, listing Vehicles
ordered by the Lessee from Eligible Manufacturers, for itself or as agent for
the Lessor, pursuant to the terms of any applicable Eligible Vehicle Disposition
Programs or otherwise. The Lessor shall, subject to Section 4 and to compliance
with the terms of the Indenture, make available to the Lessee under this Lease
financing for Financed Vehicles (other than Texas Vehicles) in an aggregate
amount, and Acquired Vehicles and Texas Vehicles for lease to the Lessee
hereunder in
-3-
<PAGE> 9
an aggregate Net Book Value, which collectively shall not exceed the Maximum
Lease Commitment. The Lessee shall make available to the Lessor (a) a schedule
as set forth in Attachment A-1 hereto containing information concerning the
Existing Fleet of a scope agreed upon by the Lessor and the Lessee, and (b) if
requested by the Lessor, each Vehicle Order, together with a schedule containing
the information with respect to the Vehicles included within such Vehicle Order
as is set forth in Attachment A-2 hereto, or in such form as is otherwise
requested by the Lessor (each, a "Vehicle Acquisition Schedule"). In addition,
the Lessee shall provide such other information regarding such Vehicles as the
Lessor may reasonably require from time to time. The Lessor shall lease to the
Lessee, and the Lessee shall lease from the Lessor, only Vehicles that are
Eligible Vehicles. This Agreement, together with the Vehicle Disposition
Programs and other incentive programs relating to the Vehicles and any other
related documents attached to this Agreement or submitted with a Vehicle Order
(collectively, the "Supplemental Documents"), will constitute the entire
agreement regarding the leasing of Vehicles by the Lessor to the Lessee.
Section 2.2. Right of Lessee to Act as Lessor's Agent. The Lessor agrees
that the Lessee may act as the Lessor's agent in placing Vehicle Orders on
behalf of the Lessor, as well as filing claims on behalf of the Lessor for
damage in transit, and other Manufacturer delivery claims related to the
Vehicles leased hereunder; provided, however, that the Lessor may hold the
Lessee liable for losses due to the Lessee's actions in performing as the
Lessor's agent hereunder. In addition, the Lessor agrees that the Lessee may
make arrangements for delivery of Vehicles to a location selected by the Lessee
at the Lessee's expense. The Lessee or any Sublessee, as applicable, may accept
or reject Eligible Vehicles upon delivery in accordance with the Lessee's
customary business practices, and any Eligible Vehicle, if rejected, will be
deemed a Casualty hereunder. The Lessee, acting as agent for the Lessor, shall
be responsible for pursuing any rights of the Lessor with respect to the return
of any Eligible Vehicle to the Manufacturer thereof pursuant to the preceding
sentence. The Lessee agrees that all vehicles ordered as provided herein shall
be Eligible Vehicles and shall be ordered utilizing the procedures consistent
with the applicable Vehicle Disposition Program or any guidelines of the
Manufacturer for the ordering or purchasing of Non-Program Vehicles, in each
case as and to the extent applicable.
Section 2.3. Payment of Purchase Price by Lessor. Upon receipt of the
Manufacturer's invoice and certificate of origin in respect of any Vehicle, the
Lessor or its agent shall pay or cause to be paid to the dealer or the related
Manufacturer, as applicable, the costs and expenses incurred in connection with
the acquisition of such Vehicle under the applicable Vehicle
-4-
<PAGE> 10
Disposition Program (in the case of a Program Vehicle) or otherwise (in the case
of a Non-Program Vehicle) as established by the invoice of the dealer or the
Manufacturer, as the case may be (the "Initial Acquisition Cost"), for such
Vehicle and the Lessee shall pay all applicable costs and expenses of freight,
packing, handling, storage, shipment and delivery of such Vehicle to the extent
that the same have not been included within the Initial Acquisition Cost;
provided that solely in the case of the Existing Fleet, the Lessor shall pay to
Chrysler Credit Corporation on the Lease Commencement Date an amount equal to
the aggregate Net Book Value as of the Lease Commencement Date of the Existing
Fleet.
Section 2.4. Non-liability of Lessor. The Lessor shall not be liable to
the Lessee for any failure or delay in obtaining Vehicles or making delivery
thereof. AS BETWEEN THE LESSOR AND THE LESSEE, ACCEPTANCE FOR LEASE OF THE
VEHICLES SHALL CONSTITUTE THE LESSEE'S ACKNOWLEDGMENT AND AGREEMENT THAT THE
LESSEE HAS FULLY INSPECTED SUCH VEHICLES, THAT THE VEHICLES ARE IN GOOD ORDER
AND CONDITION AND ARE OF THE MANUFACTURE, DESIGN, SPECIFICATIONS AND CAPACITY
SELECTED BY THE LESSEE, THAT THE LESSEE IS SATISFIED THAT THE SAME ARE SUITABLE
FOR THIS USE AND THAT THE LESSOR IS NOT A MANUFACTURER, AN AGENT OF THE
MANUFACTURER OR OTHERWISE ENGAGED IN THE SALE OR DISTRIBUTION OF VEHICLES, AND
HAS NOT MADE AND DOES NOT HEREBY MAKE ANY REPRESENTATION, WARRANTY OR COVENANT,
EXPRESS OR IMPLIED, WITH RESPECT TO MERCHANTABILITY, CONDITION, QUALITY,
CAPABILITY, WORKMANSHIP, DURABILITY OR SUITABILITY OF THE VEHICLE IN ANY RESPECT
OR IN CONNECTION WITH OR FOR THE PURPOSES OR USES OF THE LESSEE, OR ANY WARRANTY
THAT THE LEASED VEHICLES WILL SATISFY THE REQUIREMENTS OF ANY LAW OR ANY
CONTRACT SPECIFICATION, OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT OF ANY
KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT THERETO AND AS BETWEEN THE
LESSOR AND THE LESSEE, THE LESSEE AGREES TO BEAR ALL SUCH RISKS AT ITS SOLE COST
AND EXPENSE. THE LESSEE SPECIFICALLY WAIVES ALL RIGHTS TO MAKE CLAIMS AGAINST
THE LESSOR AND ANY LEASED VEHICLE FOR BREACH OF ANY WARRANTY OF ANY KIND
WHATSOEVER AND, AS TO THE LESSOR, THE LESSEE LEASES THE LEASED VEHICLES "AS IS."
The Lessor shall not be liable for any failure or delay in delivering any
Vehicle ordered for lease pursuant to this Agreement, or for any failure to
perform any provision hereof, resulting from fire or other casualty, natural
disaster, riot, strike or other labor difficulty, governmental regulation or
restriction, or any cause beyond the Lessor's direct control. IN NO EVENT SHALL
THE LESSOR BE LIABLE FOR ANY INCONVENIENCES, LOSS OF PROFITS OR ANY OTHER
CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES, WHATSOEVER OR HOWSOEVER CAUSED,
WHETHER RESULTING FROM ANY DEFECT IN OR ANY THEFT, DAMAGE, LOSS OR FAILURE OF
ANY VEHICLE, OR OTHERWISE, AND THERE SHALL BE NO ABATEMENT OF RENT BECAUSE OF
THE SAME.
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SECTION 3. TERM.
Section 3.1. Vehicle Lease Commencement Date. The "Vehicle Lease
Commencement Date" shall mean, (i) for each Vehicle in the Existing Fleet, the
Closing Date for the first Series of Notes issued under the Indenture, and (ii)
for each other Vehicle, the date referenced in the Vehicle Acquisition Schedule
with respect to such Vehicle, which in no event shall be later than the date
that funds are expended by the Lessor to acquire or finance the acquisition of
such Vehicle. A vehicle shall be deemed hereunder to be a Vehicle leased under
the Lease on each day during the period (the "Vehicle Term") from and including
the Vehicle Lease Commencement Date to but excluding the Vehicle Lease
Expiration Date.
Section 3.2. Lease Commencement Date. The "Lease Commencement Date" shall
mean the Closing Date for the first Series of Notes issued under the Indenture.
The "Lease Expiration Date" shall mean the later of (i) the date of the payment
in full of all Series of Notes and all outstanding Carrying Charges and (ii) the
Vehicle Lease Expiration Date for the last Vehicle subject to lease by the
Lessee hereunder. The "Term" of this Agreement shall mean the period commencing
on the Lease Commencement Date and ending on the Lease Expiration Date.
SECTION 4. CONDITIONS PRECEDENT. The agreement of the Lessor to make
available any Acquired Vehicle for lease to the Lessee, and to make available
Texas Vehicles or financing for the acquisition of any other Financed Vehicle
(other than Vehicles in the Existing Fleet) for lease to the Lessee upon the
Lessee's placement of a Vehicle Order, for itself or as agent of the Lessor, is
subject to the terms and conditions of the Indenture and subject to the
satisfaction of the following conditions precedent as of the Vehicle Lease
Commencement Date for such Vehicle:
Section 4.1. No Default. No Lease Event of Default or Amortization Event
shall have occurred and be continuing on such date.
Section 4.2. Limitations of the Acquisition of Certain Vehicles. Unless
otherwise specified in the related Series Supplement or unless waived by the
Required Noteholders as specified in the related Series Supplement, (a) the
quotient (expressed as a percentage) obtained by dividing (x) the aggregate Net
Book Value of all Non-Program Vehicles (or such portion thereof as is specified
in the related Series Supplement) leased under this Lease as of such date (after
giving effect to the inclusion of such Vehicle under the Lease) by (y) the
Aggregate Asset Amount (or such portion thereof as is specified in the related
Series Supplement) as of such date (after giving
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effect to the inclusion of such Vehicle under the Lease), shall not exceed any
applicable Maximum Non-Program Percentage, (b) the quotient (expressed as a
percentage) obtained by dividing (x) the aggregate Net Book Value of all Program
Vehicles or Non-Program Vehicles, as the case may be (or such portion thereof as
is specified in the related Series Supplement), manufactured by any Manufacturer
and leased under this Lease as of such date (after giving effect to the
inclusion of such Vehicle under the Lease) by (y) the Aggregate Asset Amount (or
such portion thereof as is specified in the related Series Supplement) as of
such date (after giving effect to the inclusion of such Vehicle under the Lease)
shall not exceed any applicable Maximum Manufacturer Percentage, (c) any excess
of such quotients over any applicable Maximum Non-Program Percentage or Maximum
Manufacturer Percentage, as described in clauses (a) and (b) above, shall not
increase after giving effect to the inclusion of such Vehicle, if such an excess
has occurred and is continuing on such date prior to giving effect to the
inclusion of such Vehicle, and (d) after giving effect to the inclusion of such
Vehicle under the Lease, there shall not be a failure or violation of any other
conditions, requirements, or restrictions with respect to the leasing of
Eligible Vehicles under the Lease as is specified in any related Series
Supplement.
SECTION 5. RENT AND CHARGES. The Lessee will pay Rent and certain other
charges on a monthly basis as set forth in this Section 5:
Section 5.1. Payment of Rent. On each Due Date, the Lessee shall pay to
the Lessor the aggregate of all Rent that has accrued during the Related Month
with respect to the Vehicles, as provided in the related Lease Annexes.
Section 5.2. Payment of Availability Payment. On each Due Date, the Lessee
shall pay to the Lessor an amount (the "Availability Payment") in respect of the
unutilized portion of the Maximum Lease Commitment. "Availability Payment" with
respect to each Due Date shall equal (a) the aggregate interest due on the
Outstanding Notes of all Series as of the Payment Date next succeeding such Due
Date, plus (b) an amount equal to all Carrying Charges for the Related Month,
less (c) the sum of (i) any Monthly Variable Rent due on such Due Date, (ii) any
Monthly Finance Rent due on such Due Date, and (iii) any earnings on Permitted
Investments (less any portion thereof allocated to the Retained Interestholder)
accruing through the Determination Date occurring prior to such Due Date and not
included in the calculation of Availability Payments with respect to any prior
Due Date.
Section 5.3. Payment of Monthly Supplemental Payments. On each Due Date,
the Lessee shall pay to the Lessor the Monthly
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Supplemental Payments that have accrued during the Related Month with respect to
the Financed Vehicles, as provided in Sections 6 and 7 of Annex B.
Section 5.4. Payment of Termination Payments, Casualty Payments, and Late
Return Payments. On each Due Date, the Lessee shall pay to the Lessor all
Termination Payments, Casualty Payments and Late Return Payments that have
accrued with respect to the Acquired Vehicles, as provided in, respectively,
Sections 7, 12.3 and 13.
Section 5.5. Late Payment. In the event the Lessee fails to remit payment
of any amount due under the Lease on or before the Due Date, the amount not paid
will be considered delinquent and the Lessee will pay a late charge equal to the
product of (a) the VFR plus 1%, times (b) the delinquent amount for the period
from the Due Date to the date on which such delinquent amount is received by the
Trustee, times (c) the actual number of days elapsed during such period divided
by 360.
SECTION 6. INSURANCE.
Section 6.1. Fleet Insurance. The Lessee shall at all times maintain or
cause to be maintained, with financially sound and reputable insurers, (a)
personal injury and damage insurance with respect to the Vehicles, and (b)
insurance with respect to properties and business against loss or damage of the
kinds customarily insured against by corporations of established reputation
engaged in the same or similar businesses and similarly situated, of such types
and in such amounts as are customarily carried under similar circumstances by
such other corporations. The Lessee may, in lieu of maintaining such insurance
with insurers, self-insure.
Section 6.2. Information. The Lessee shall, from time to time upon the
Lessor's or the Trustee's reasonable request, deliver to the Lessor and the
Trustee copies of certificates describing all insurance required by Section 6.1
which is then in effect.
SECTION 7. CASUALTY OBLIGATION. If a Vehicle becomes a Casualty, then the
Lessee shall (a) promptly notify the Lessor of such occurrence, and (b) in the
case of an Acquired Vehicle, on the Due Date next succeeding the last day of the
Related Month in which the Lessee obtains actual knowledge that such Vehicle has
become a Casualty, pay to the Lessor an amount (a "Casualty Payment") equal to
the Net Book Value of such Vehicle, calculated as of the first day of such
Related Month. Upon payment by the Lessee to the Lessor in accordance herewith
of the Casualty Payment for any Acquired Vehicle that has become a Casualty, (i)
the Lessor shall cause title to such Vehicle to be
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transferred to the Lessee to facilitate liquidation of such Vehicle by the
Lessee, (ii) the Lessee shall be entitled to any physical damage insurance
proceeds applicable to such Acquired Vehicle (if at such time the Lessee carries
such insurance coverage), and (iii) the Lien of the Master Collateral Agent on
such Vehicle shall be released thereby.
SECTION 8. VEHICLE USE. So long as no Lease Event of Default has occurred,
the Lessee may use Vehicles leased hereunder in the regular course of business
of the Lessee, including, from time to time, subleasing such Vehicles to
Eligible Franchisees pursuant to Lessee Agreements, including Subleases, used in
the ordinary course of Lessee's business. Notwithstanding any such Lessee
Agreement, the Lessee shall remain fully liable for its obligations under this
Agreement and the other Related Documents (including any obligation hereunder or
thereunder that it may cause any Franchisee to perform or fulfill). The Lessee
shall cause all payments under the Lessee Agreements, to the extent such
payments relate to vehicles comprising the Master Collateral, to be deposited
directly into the Master Collateral Account, and upon the occurrence and during
the continuance of a Lease Event of Default, Liquidation Event of Default or
Limited Liquidation Event of Default, the Servicer shall promptly specify to the
Master Collateral Agent the allocation of such payments among Financing Sources.
Vehicle use shall be confined primarily to the United States, with limited use
outside the United States; provided, however, that the principal place of
business or rental office of the Eligible Franchisee with respect to any
Vehicles used outside the United States shall be located in the United States.
The Lessee shall promptly and duly execute, deliver, file and record all such
documents, statements, filings and registrations, and take such further actions
as the Lessor, the Master Collateral Agent, the Servicer or the Trustee shall
from time to time reasonably request in order to establish, perfect and maintain
the Lessor's title to and interest in the Acquired Vehicles and the related
Certificates of Title as against the Lessee or any third party in any applicable
jurisdiction and to establish, perfect and maintain the Master Collateral
Agent's lien on the Vehicles and the related Certificates of Title (other than
recordation of liens with respect to the Existing Fleet) as a perfected lien in
any applicable jurisdiction. The Lessee may, at the Lessee's sole expense,
change the place of principal location of any Vehicles. After any such change of
location, the Lessee shall take all actions necessary (i) to maintain the Lien
of the Master Collateral Agent on such Vehicles and the Certificates of Title
with respect to such Vehicles (other than recordation of liens with respect to
the Existing Fleet), and (ii) to meet or obtain all material legal requirements
applicable to such Vehicles. Following a Lease Event of Default or Manufacturer
Event of Default, and upon the Lessor's request, the Lessee shall advise
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the Lessor in writing where all Vehicles leased hereunder as of such date are
principally located. The Lessee shall not knowingly use any Vehicles, or
knowingly permit the same to be used, for any unlawful purpose. The Lessee shall
and shall require the Franchisees to use reasonable precautions to prevent loss
or damage to Vehicles. The Lessee shall or shall cause the Franchisees to comply
with all applicable statutes, decrees, ordinances and regulations regarding
acquiring, titling, registering, leasing, insuring and disposing of Vehicles and
shall or shall require the Franchisees to take reasonable steps to ensure that
operators are licensed. The Lessee shall or shall cause the Franchisees to
perform, at its or their own expense, such vehicle preparation and conditioning
services with respect to Vehicles as are customary. The Lessor, the Master
Collateral Agent or the Trustee or any authorized representative of the Lessor,
the Master Collateral Agent or the Trustee may during reasonable business hours
from time to time, without disruption of the Lessee's or the Franchisee's
business, subject to applicable law, inspect Vehicles and registration
certificates, Certificates of Title and related documents covering Vehicles
wherever the same be located.
SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES.
The Lessee, at its expense, shall be responsible for proper registration and
licensing of Vehicles, and titling of Vehicles in the name of the Lessor (in the
case of Acquired Vehicles and Texas Vehicles) or the Lessee (in the case of all
other Financed Vehicles), in each case (other than with respect to the Existing
Fleet) with the Lien of the Master Collateral Agent noted thereon, and where
required, the Lessee shall or shall cause the Franchisees to have Vehicles
inspected by any appropriate governmental authority; provided, however, that
notwithstanding the foregoing, unless a Liquidation Event of Default shall have
occurred and be continuing, possession of all Certificates of Title shall remain
with the Servicer. The Lessee shall pay or cause to be paid all registration
fees, title fees, license fees, traffic summonses, penalties, judgments and
fines incurred with respect to any Vehicle during the Vehicle Term for such
Vehicle or imposed during the Vehicle Term for such Vehicle by any governmental
authority or any court of law or equity with respect to Vehicles in connection
with the Lessee's operation of Vehicles, and any such amounts paid by the
Lessor, in its discretion, on the Lessee's behalf will be reimbursed within
thirty (30) days of the Lessor notifying the Lessee of such payment. The Lessor
agrees to execute a power of attorney substantially in the form of Attachment B
hereto (a "Power of Attorney"), and such other documents as may be necessary in
order to allow the Lessee to title, register and dispose of the Acquired
Vehicles and the Texas Vehicles; and the Lessee acknowledges and agrees that
with respect to the Acquired Vehicles, it has no right, title or interest in or
with respect
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to any Certificate of Title. Notwithstanding anything herein to the contrary,
the Lessor may terminate such Power of Attorney as provided in Section 17.3.
SECTION 10. MAINTENANCE AND REPAIRS. The Lessee shall or shall cause the
Franchisees to pay for all maintenance and repairs to keep Vehicles in good
working order and condition, and shall or shall cause the Franchisees to
maintain Vehicles as required in order to keep the Manufacturer's warranty in
force. The Lessee shall or shall cause the Franchisees to return each Vehicle to
an authorized Manufacturer facility or the applicable Manufacturer's authorized
warranty station for warranty work. The Lessee shall or shall cause the
Franchisees to comply with any Manufacturer's recall of any Vehicle. The Lessee
shall or shall cause the Franchisees to pay, or cause to be paid, all usual and
routine expenses incurred in the use and operation of Vehicles including, but
not limited to, fuel, lubricants, and coolants. The Lessor, upon thirty (30)
days' prior notice to the Lessee, may pay any such expenses that have not
otherwise been paid by, or on behalf of, the Lessee (including any failure by a
Franchisee to pay any such expenses), and any expenses incurred by the Lessor on
the Lessee's behalf for maintenance, repair, operation or use by the Lessee of
Vehicles will promptly be reimbursed (in any event no later than the next
monthly Due Date following such payment) by the Lessee to the Lessor in the
amount paid by the Lessor. The Lessee shall not make any material alterations to
any Vehicles without the prior consent of the Lessor. Any improvements or
additions to an Acquired Vehicle shall become and remain the property of the
Lessor, except that any addition or improvement to such a Vehicle made by the
Lessee shall remain the property of the Lessee if it can be disconnected or
removed from the Vehicle without impairing the functioning of or resale value
thereof, other than any function or value provided by such addition or
improvement.
SECTION 11. VEHICLE WARRANTIES. If a Vehicle is covered by a
Manufacturer's warranty, the Lessee, during the Vehicle Term, shall have the
right to make any claims under such warranty which the Lessor could make and
shall direct any payment thereunder to be made to the Master Collateral Account,
for distribution to the Lessee in accordance with the Master Collateral Agency
Agreement. As provided in Section 2.4, the Lessor makes no warranty or
representation whatsoever, express or implied, with respect to any Vehicle.
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SECTION 12. PROGRAM VEHICLE USAGE REQUIREMENTS AND DISPOSITION.
Section 12.1. Usage. As used herein, the term "vehicle turn-in condition"
with respect to each Program Vehicle means a set of criteria for evaluating
Program Vehicles upon their delivery at the end of the applicable Vehicle Terms,
which criteria will be determined in accordance with the related Vehicle
Disposition Program. Program Vehicles not meeting the applicable Vehicle
Disposition Program's vehicle turn-in condition requirements will, unless
redesignated as a Non-Program Vehicle in accordance with Section 14, be
purchased by the Lessee in accordance with the Casualty procedure set forth in
Section 7 or otherwise disposed of in accordance with the late delivery
procedure set forth in Section 13, as applicable.
Section 12.2. Disposition Procedure. Prior to the end of the Vehicle Term,
the Lessee will or will cause the related Franchisee to deliver each Program
Vehicle (other than a Casualty) to the nearest related Manufacturer official
auction or other facility designated by such Manufacturer at the Lessee's sole
expense and in accordance with the terms of the applicable Vehicle Disposition
Program. Any transportation allowance (for delivery costs) and any rebates or
credits applicable to the unexpired term of any license plates for a Vehicle
shall inure to the benefit of and, upon receipt thereof by the Lessor, the
Trustee or the Master Collateral Agent, shall promptly be paid over to the
Lessee. The Lessee will comply with the requirements of law and the requirements
of the Vehicle Disposition Programs in connection with, among other things, the
delivery of Certificates of Title, documents of transfer signed as necessary,
signed Condition Reports, and signed odometer statements for the Program
Vehicles.
Section 12.3. Termination Payments. On the Due Date next succeeding the
earlier of (a) the last day of the Related Month in which the Repurchase Payment
or the Guaranteed Payment, as the case may be, from a Manufacturer pursuant to
its Vehicle Disposition Program with respect to any Acquired Vehicle that is a
Program Vehicle, is received by the Lessor, the Master Collateral Agent or the
Trustee (including by deposit into the Collection Account or the Master
Collateral Account), and (b) the thirtieth (30th) day after the expiration of
the Maximum Term for such Vehicle, the Lessee shall pay to the Lessor in respect
of such Vehicle any Excess Damage Charges, Excess Mileage Charges, early
turnback surcharges and any other similar charges and penalties (collectively, a
"Program Vehicle Termination Payment") as determined by the Manufacturer or its
agent in accordance with the applicable Vehicle Disposition Program; and on the
Due Date next succeeding the earlier of (i) the last day of the Related Month in
which Disposition Proceeds from the sale or other
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disposition of an Acquired Vehicle that is a Non-Program Vehicle, but is not a
Casualty, are received by the Lessor, the Master Collateral Agent or the Trustee
(including by deposit into the Collection Account or the Master Collateral
Account), and (ii) the thirtieth (30th) day after the date which is twenty-four
(24) months after the date of the original new dealer invoice for such Vehicle,
the Lessee shall pay to the Lessor in respect of such Vehicle an amount (a
"Non-Program Vehicle Termination Payment") equal to the quotient of (x) the sum
of all Program Vehicle Termination Payments for the Related Month, divided by
(y) the number of Acquired Vehicles in respect of which such Program Vehicle
Termination Payments are payable (Program Vehicle Termination Payments and
Non-Program Vehicle Termination Payments collectively, "Termination Payments").
The provisions of this Section 12.3 will survive the expiration or earlier
termination of the Term.
SECTION 13. LATE RETURN PAYMENTS. If an Acquired Vehicle which is a
Program Vehicle is not returned to the Manufacturer or sold at Auction prior to
the expiration of the Maximum Term for such Vehicle in accordance with Section
12.2, the Lessee shall, unless such Vehicle has been redesignated as a
Non-Program Vehicle in accordance with Section 14, (a) promptly notify the
Lessor of its failure to return such Vehicle to the Manufacturer or to sell such
Vehicle at Auction during the Vehicle Term, (b) use commercially reasonable
efforts to sell or otherwise dispose of such Vehicle in a manner reasonably
likely to maximize proceeds from such disposition and consistent with industry
practice, (c) cause the Disposition Proceeds, if any, from any such sale or
disposition to be paid to the Master Collateral Agent, in accordance with
paragraph 10(d) of Annex A, and (d) on the Due Date next succeeding the earlier
of (i) the last day of the Related Month in which such Disposition Proceeds are
received by the Lessor, the Master Collateral Agent or the Trustee (including by
deposit into the Collection Account or the Master Collateral Account), and (ii)
the thirtieth (30th) day after the expiration of the Maximum Term for such
Vehicle, pay to the Lessor an amount (a "Late Return Payment") equal to the
excess of (x) the Net Book Value of such Vehicle, calculated as of the first day
of the calendar month in which such Maximum Term expired, over (y) the dollar
amount of such Disposition Proceeds (which dollar amount may be equal to, but
not less than, zero dollars).
SECTION 14. REDESIGNATION OF VEHICLES. Upon a Program Vehicle's becoming
ineligible for repurchase by its Manufacturer or for sale at Auction under the
applicable Vehicle Disposition Program, due to physical damage, repair charges
or accrued mileage, in each case in excess of that permitted under the related
Vehicle Disposition Program, or due to any failure or inability to return the
Vehicle to the Manufacturer or the
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designated Auction prior to the expiration of the Maximum Term, or due to any
other event or circumstance, the Servicer may designate the related Vehicle as a
Non-Program Vehicle if such Vehicle, as a Non-Program Vehicle, will be an
Eligible Vehicle and if either (a) such designation meets the conditions of, as
applicable, Sections 4.2(a) and (c) (as Section 4.2(c) relates to the Maximum
Non-Program Percentage), or (b) the Noteholders holding the requisite Invested
Amount of each applicable Series of Notes waive, in each case as and to the
extent permitted under the related Series Supplement, the requirements of
Sections 4.2(a) or (c) (as Section 4.2(c) relates to the Maximum Non-Program
Percentage), in each case as applied to this Section 14 and all such other
conditions, requirements or restrictions with respect to which a failure or
violation has occurred; provided, in each case, that (x) any additional Monthly
Base Rent due with respect to each such Vehicle, relating to the decrease, if
any, of the Net Book Value of such Vehicle under the newly applicable
Depreciation Schedule, shall be paid on the next succeeding Due Date, and (y)
the minimum level of Enhancement required under the applicable Series
Supplement, after giving effect to such designation, shall be satisfied on the
date of designation.
SECTION 15. GENERAL INDEMNITY.
Section 15.1. Indemnity of the Lessor. The Lessee agrees to indemnify and
hold harmless the Lessor and the Lessor's directors, officers, agents and
employees (collectively, together with the Persons subject to indemnity under
Section 15.2, the "Indemnified Persons") against any and all claims, demands and
liabilities of whatsoever nature, and all costs and expenses, relating to or in
any way arising out of:
Section 15.1.1. the ordering, delivery, acquisition, title on
acquisition, rejection, installation, possession, titling, retitling,
registration, re-registration, custody by the Lessee of title and
registration documents, use, non-use, misuse, operation, deficiency,
defect, transportation, repair, control or disposition of any Vehicle
leased hereunder or to be leased hereunder, including, without limitation,
any such Vehicle subleased to a Franchisee and any of the foregoing
actions, events or circumstances occurring or arising in connection with
such subleasing, any Lessee Agreement, any Franchisee or any customer of
any Franchisee. The foregoing shall include, without limitation, any
liability (or any alleged liability) of the Lessor to any third party
arising out of any of the foregoing, including, without limitation, all
legal fees, costs and disbursements arising out of such liability (or
alleged liability);
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Section 15.1.2. all (i) federal, state, county, municipal, foreign
or other fees and taxes of whatsoever nature, including but not limited to
license, qualification, registration, franchise, sales, use, gross
receipts, ad valorem, business, property (real or personal), excise, motor
vehicle, and occupation fees and taxes, and all federal, state, local and
foreign income taxes (including any taxes payable by the Lessor as a
result of its being a member of any group of corporations including the
Lessee that file any tax returns on a consolidated or combined basis), and
penalties and interest thereon, whether assessed, levied against or
payable by the Lessor or otherwise, with respect to any Vehicle or the
acquisition, purchase, sale, lease, sublease, rental, use, operation,
control, ownership or disposition of any Vehicle by any Person or measured
in any way by the value thereof or by the business of, investment by, or
ownership by the Lessor or the Lessee with respect thereto, and (ii)
documentary, stamp, filing, recording, mortgage or other taxes, if any,
which may be payable by the Lessor or the Lessee in connection with this
Agreement or the other Related Documents or the Lessee Agreements and any
penalties or interest with respect thereto;
Section 15.1.3. any violation by the Lessee of this Agreement or of
any Related Documents or Lessee Agreements to which the Lessee is a party
or by which it is bound or any laws, rules, regulations, orders, writs,
injunctions, decrees, consents, approvals, exemptions, authorizations,
licenses and withholdings of objecting of any governmental or public body
or authority and all other requirements having the force of law applicable
at any time to any Vehicle or any action or transaction by the Lessee with
respect thereto or pursuant to this Agreement;
Section 15.1.4. all out of pocket costs of the Lessor (including, to
the extent not satisfied by the Initial Purchasers, the fees and out of
pocket expenses of counsel for the Lessor) in connection with the
execution, delivery and performance of this Agreement and the other
Related Documents, including, without limitation, overhead expenses and
any and all fees of the Trustee, Paying Agent, Clearing Agencies and
Master Collateral Agent, all fees payable in connection with any
Enhancement, any and all fees of the Servicer under the Indenture, fees
payable to the Rating Agencies and any underwriting or placement agency
fees incurred in connection with the sale of the Notes;
Section 15.1.5. all out of pocket costs and expenses (including
reasonable attorneys' fees and legal expenses) incurred by the Lessor, the
Master Collateral Agent, the
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Trustee or the Noteholders in connection with the administration,
enforcement, waiver or amendment of this Agreement and any other Related
Documents, and all indemnification obligations of the Lessor under the
Related Documents; and
Notwithstanding the foregoing, the Lessee shall have no duty to indemnify
any Indemnified Person for any consequential or punitive damages or claims,
demands, liabilities, costs, or expenses to the extent such claim, demand,
liability, cost or expense arises out of or is due to such Person's gross
negligence or willful misconduct.
Section 15.2. Indemnification of the Trustee. The Lessee agrees to
indemnify and hold harmless the Trustee and the Trustee's officers, directors,
agents and employees against any and all claims, demands and liabilities of
whatsoever nature, and all costs and expenses, relating to or in any way arising
out of: (i) any acts or omissions of the Lessee pursuant to this Agreement and
(ii) the Trustee's appointment under the Indenture and the Trustee's performance
of its obligations thereunder, or any document pertaining to any of the
foregoing to which the Trustee is a signatory, including, but not limited to any
judgment, award, settlement, reasonable attorneys' fees and other costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided, however, the Lessee shall have no duty to
indemnify the Trustee, or any other Indemnified Person pursuant to this Section
15.2 to the extent such claim, demand, liability, cost or expense arises out of
or is due solely to the Trustee's or such Indemnified Person's gross negligence
or willful misconduct. Any such indemnification shall not be payable from the
assets of Thrifty Finance. The provisions of this indemnity shall run directly
to and be enforceable by the Trustee or any other Indemnified Person subject to
the limitations hereof. The indemnification provided for in this Section 15.2
shall be in addition to any other indemnities available to the Trustee and shall
survive the termination of the duties of the Lessee hereunder and the
termination of this Agreement or a document to which the Trustee is a signatory
or the resignation or removal of the Trustee.
Section 15.3. Reimbursement Obligation by the Lessee. The Lessee shall
forthwith upon demand reimburse the Lessor or the Trustee, as the case may be,
for any sum or sums expended with respect to any of the foregoing, or shall pay
such amounts directly upon request from the Lessor or the Trustee; provided,
however, that, if so requested by the Lessee, the Lessor or the Trustee shall
submit to the Lessee a statement documenting any such demand for reimbursement
or prepayment. To the extent that the Lessee in fact indemnifies the Lessor or
the Trustee under the indemnity provisions of this Agreement, the Lessee shall
be
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subrogated to the rights of the Lessor or the Trustee, as the case may be, in
the affected transaction and shall have a right to determine the settlement of
claims therein. The foregoing indemnity as contained in this Section 15 shall
survive the expiration or earlier termination of this Agreement or any lease of
any Vehicle hereunder; provided, however, that the factual or legal
circumstances giving rise to the Lessor's exposure to liability occur during the
period that the Lease is in effect as to the Vehicle for which such exposure to
liability arose.
Section 15.4. Notice to Lessee of Claims. The Lessor or the Trustee, as
the case may be, shall notify the Lessee in writing (a "Notice of Claim") of the
pendency of any such claim, action or facts referred to in this Section 15 for
which indemnity may be required.
Section 15.5. Defense of Claims. Defense of any claim referred to in this
Section 15 for which indemnity may be required shall, at the option and request
of the Lessee, be conducted by the Lessee. Following receipt of any Notice of
Claim, the Lessee will inform the Indemnified Person of its election to defend
such claim. Such Indemnified Person may participate in any such defense at its
own expense, provided such participation does not interfere with the Lessee's
defense. The Lessee agrees that no Indemnified Person will be liable to the
Lessee for any claim caused directly or indirectly by the inadequacy of any
Vehicle for any purpose or any deficiency or defect therein or the use or
maintenance thereof or any repairs, servicing or adjustments thereto or any
delay in providing or failure to provide such or any interruption or loss of
service or use thereof or any loss of business, all of which shall be the risk
and responsibility of the Lessee, except to the extent that any of the foregoing
is caused by the gross negligence or willful misconduct of such Indemnified
Person. The rights and indemnities of each Indemnified Person hereunder are
expressly made for the benefit of, and will be enforceable by, each Indemnified
Person notwithstanding the fact that such Indemnified Person is not or is no
longer a party to (or entitled to receive the benefits of) this Agreement. This
general indemnity shall not affect any claims of the type discussed above which
the Lessee may have against the Manufacturer.
SECTION 16. ASSIGNMENT. The Lessee shall not, except as provided in the
Indenture, without prior written consent of the Lessor and the Trustee, assign
this Agreement or any of its rights hereunder to any other party; provided,
however, the Lessee may sublease or rent the Vehicles under the terms of the
Lessee's normal Sublease agreements to Eligible Franchisees, and the Lessee and
such Eligible Franchisees may rent such Vehicles to consumers in the ordinary
course of their daily rental programs. Any purported assignment in violation of
this
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Section 16 shall be void and of no force or effect. Nothing contained herein
shall be deemed to restrict the right of the Lessee to acquire or dispose of, by
purchase, lease, financing, or otherwise, motor vehicles that are not subject to
the provisions of this Agreement.
SECTION 17. DEFAULT AND REMEDIES THEREFOR.
Section 17.1. Events of Default. Any one or more of the following will
constitute an event of default (a "Lease Event of Default") as that term is used
herein:
Section 17.1.1. there occurs (i) a default in the payment of any
Monthly Base Rent, Monthly Variable Rent, Monthly Finance Rent,
Termination Payment, Casualty Payment, Late Return Payment, Monthly
Supplemental Payment or Availability Payment, and the continuance thereof
for five (5) Business Days after notice thereof by the Lessor, the Master
Collateral Agent or the Trustee to the Lessee, or (ii) a default in the
payment of any amount payable under this Agreement (other than amounts
described in clause (i) above) and the continuance thereof for five (5)
Business Days after notice thereof by the Lessor, the Master Collateral
Agent or the Trustee to the Lessee;
Section 17.1.2. any unauthorized assignment or transfer of this
Agreement by the Lessee occurs;
Section 17.1.3. the failure of the Lessee to observe or perform any
other covenant, condition, agreement or provision hereof, which failure
has a Material Adverse Effect on the Lessor, and such default continues
for more than sixty (60) days after the earlier to occur of (a) the date a
Responsible Officer of the Lessee obtains knowledge of such default or (b)
the date written notice thereof is delivered by the Lessor, the Master
Collateral Agent or the Trustee to the Lessee; provided, however, that if
such failure cannot reasonably be cured within such sixty (60) day period,
no Lease Event of Default shall result therefrom so long as, within such
sixty (60) day period, the Lessee (i) commences to cure same, (ii)
delivers written notice to the Lessor, the Master Collateral Agent and the
Trustee notifying the Lessor, the Master Collateral Agent and the Trustee
of such default and setting forth the steps the Lessee intends to take in
order to cure such default and (iii) thereafter diligently prosecutes such
cure to completion and completely cures such default on or before the
ninetieth (90th) day after the earlier of the dates set forth in clause
(a) and clause (b) above;
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Section 17.1.4. if any representation or warranty made by the Lessee
proves untrue in any respect as of the date of the issuance or making
thereof, which inaccuracy or falsehood has a Material Adverse Effect on
the Lessor, and such inaccuracy or falsehood is not cured within sixty
(60) days after notice thereof from the Lessor, the Master Collateral
Agent or the Trustee to the Lessee; or
Section 17.1.5. an Event of Bankruptcy occurs with respect to the
Lessee.
Section 17.2. Effect of Lease Event of Default. If (i) a Lease Event of
Default described in Section 17.1.1(i), 17.1.2 or 17.1.5 shall occur, then the
Monthly Base Rent, the Monthly Supplemental Payment and Casualty Payments (in
each case calculated as if all Vehicles had become a Casualty for the Related
Month), the Monthly Variable Rent, the Availability Payment and the Monthly
Finance Rent (in each case calculated as if the full amount of interest,
principal and other charges under all outstanding Series of Notes were then due
and payable in full), Termination Payments and Late Return Payments shall,
automatically, without further action by the Lessor or the Trustee, become
immediately due and payable or (ii) any other Lease Event of Default shall
occur, the Lessor or the Trustee may declare the Rent and all other charges and
payments (calculated as described in clause (i) above) to be due and payable,
whereupon such Rent and such other charges and payments (as so calculated)
shall, subject to Section 17.4, become immediately due and payable.
Section 17.3. Rights of Lessor Upon Lease Event of Default. If a Lease
Event of Default shall occur, then the Lessor at its option may:
(i) Proceed by appropriate court action or actions, either at law or
in equity, to enforce performance by the Lessee of the applicable
covenants and terms of this Agreement or to recover damages for the breach
hereof calculated in accordance with Section 17.4; or
(ii) Subject to the rights of the Franchisees under the Subleases,
by notice in writing to the Lessee, terminate this Agreement in its
entirety and/or the right of possession hereunder of the Lessee as to the
Vehicles, and the Lessor may direct delivery by the Lessee of documents of
title to the Vehicles, whereupon all rights and interests of the Lessee to
the Vehicles (except as otherwise provided herein) will cease and
terminate (but the Lessee will remain liable hereunder as herein provided,
calculated in accordance with Section 17.4); and thereupon, the Lessor or
its agents may, subject in each case to the rights of the
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Franchisees under the applicable Subleases, peaceably enter upon the
premises of the Lessee or other premises where the Vehicles may be located
and take possession of them and thenceforth hold, possess and enjoy the
same free from any right of the Lessee, or their successors or assigns
(other than the Franchisees), to employ the Vehicles for any purpose
whatsoever consistent with the mitigation of losses and damages, and the
Lessor will, nevertheless, have a right to recover from the Lessee any and
all amounts which under the terms of Section 17.2 (as limited by Section
17.4) of this Agreement may be then due. The Lessor will provide the
Lessee with written notice of the place and time of any sale of Financed
Vehicles pursuant to this Section 17.3 at least five (5) days prior to the
proposed sale, which shall be deemed commercially reasonable, and the
Lessee may purchase the Vehicle(s) at the sale. Each and every power and
remedy hereby specifically given to the Lessor will be in addition to
every other power and remedy hereby specifically given or now or hereafter
existing at law, in equity or in bankruptcy and each and every power and
remedy may be exercised from time to time and simultaneously and as often
and in such order as may be deemed expedient by the Lessor; provided,
however, that the measure of damages recoverable against the Lessee will
in any case be calculated in accordance with Section 17.4. All such powers
and remedies will be cumulative, and the exercise of one will not be
deemed a waiver of the right to exercise any other or others. No delay or
omission of the Lessor in the exercise of any such power or remedy and no
renewal or extension of any payments due hereunder will impair any such
power or remedy or will be construed to be a waiver of any default or any
acquiescence therein. Any extension of time for payment hereunder or other
indulgence duly granted to the Lessee will not otherwise alter or affect
the Lessor's rights or the obligations hereunder of the Lessee. The
Lessor's acceptance of any payment after it will have become due hereunder
will not be deemed to alter or affect the Lessor's rights hereunder with
respect to any subsequent payments or defaults therein; or
(iii) By notice in writing to the Lessee, terminate the Power of
Attorney.
Section 17.4. Measure of Damages. If a Lease Event of Default occurs and
the Lessor, the Master Collateral Agent or the Trustee exercises the remedies
granted to the Lessor, the Master Collateral Agent or the Trustee under this
Section 17 or under Section 8.2 of the Indenture, the amount that the Lessor
shall be permitted to recover shall be equal to:
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(i) all Rent and payments under this Agreement (calculated as
provided in Section 17.2); plus
(ii) any damages and expenses (other than punitive and consequential
damages), which the Lessor, the Master Collateral Agent or the Trustee
will have sustained by reason of the Lease Event of Default, together with
reasonable sums for such attorneys' fees and such expenses as will be
expended or incurred in the seizure, storage, rental or sale of the
Vehicles or in the enforcement of any right or privilege hereunder or in
any consultation or action in such connection; plus
(iii) all other amounts due and payable under this Agreement; plus
(iv) interest from time to time on amounts due and unpaid under this
Agreement at the VFR plus 1%, computed from the date of the Lease Event of
Default or the date payments were originally due the Lessor under this
Agreement or from the date of each expenditure by the Lessor which is
recoverable from the Lessee pursuant to this Section 17, as applicable, to
and including the date payments are made by the Lessee; minus
(v) an amount equal to all sums realized by the Lessor, the Master
Collateral Agent and the Trustee from the liquidation of the Financed
Vehicles (other than the Texas Vehicles) leased hereunder (either by
receipt of payment from the Manufacturers under Vehicle Disposition
Programs, from sales of Vehicles to third parties, or otherwise),
provided, however, that if a Financed Vehicle other than a Texas Vehicle)
is delivered to the Manufacturer or the designated Auction for repurchase
by the Manufacturer or sale at Auction under the applicable Vehicle
Disposition Program, and such Vehicle is accepted for repurchase by such
Manufacturer (as evidenced by a Condition Report indicating that such
Vehicle conforms to the requirements for repurchase under such Vehicle
Disposition Program) or is sold by such Auction, the Lessor and the
Trustee shall be deemed to have received thirty (30) days after the date
of such acceptance or sale on account of this clause (v) an amount equal
to the Net Book Value of such Vehicle, calculated as of its Disposition
Date (less any Termination Payments payable in respect of such Vehicle).
Section 17.5. Application of Proceeds. The proceeds of any sale or other
disposition of any Financed Vehicles pursuant to Section 17.3 shall be applied
in the following order: (i) to the reasonable costs and expenses incurred by the
Lessor in connection with such sale or disposition, including any
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reasonable costs associated with repairing such Vehicles, and reasonable
attorneys' fees in connection with the enforcement of this Agreement, (ii) to
the payment of outstanding Rent and payments under the Lease (such proceeds to
be applied first, to outstanding Monthly Variable Rent and Monthly Finance Rent
pro rata, second, to outstanding Availability Payments, third, to outstanding
Base Rent and Monthly Supplemental Payments pro rata, fourth, to outstanding
Termination Payments, Casualty Payments and Late Return Payments pro rata and
fifth, to outstanding late charges pursuant to Sections 5.5 and 17.4(iv)), (iii)
to the payment of all other amounts due hereunder, (iv) to the payment of any
amounts to the Lessor, or such Person(s) as may be lawfully entitled thereto,
and (v) any remaining proceeds to the Lessee.
SECTION 18. MANUFACTURER EVENTS OF DEFAULT. Upon the occurrence of any of
the following events (each, a "Manufacturer Event of Default") with respect to a
Manufacturer, the Lessee on behalf of the Lessor (a) shall no longer place
Vehicle Orders for additional Program Vehicles from such Manufacturer (each, a
"Defaulting Manufacturer") and (b) shall cancel any Vehicle Order with such
Defaulting Manufacturer to which a vehicle identification number (a "VIN") has
not been assigned as of the date such Manufacturer Event of Default occurs:
Section 18.1. The failure of such Manufacturer to pay Guaranteed Payments,
Repurchase Payments and/or Incentive Payments due under, respectively, such
Manufacturer's Vehicle Disposition Programs and its incentive programs, in an
aggregate amount in excess of $15,000,000 (net of amounts that are the subject
of a good faith dispute, as evidenced in writing by either the Lessee or the
Manufacturer questioning the accuracy of the amounts paid or payable in respect
of any such Vehicle Disposition Programs or incentive programs), which failure,
in the case of each such Guaranteed Payment, Repurchase Payment and/or Incentive
Payment included in such amount in excess of $15,000,000, continues for more
than ninety (90) days following the Disposition Date of the related Vehicle.
Section 18.2. The occurrence of an Event of Bankruptcy with respect to
such Manufacturer.
SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE. Pursuant to Section
7701 of the Code and as set forth in Attachment C hereto, the Lessee will
warrant and certify that (1) the Lessee intends to use the Acquired Vehicles in
a trade or business of the Lessee, and (2) the Lessee has been advised that it
will not be treated as the owner of the Acquired Vehicles for federal income tax
purposes.
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SECTION 20. SURVIVAL. In the event that, during the term of this
Agreement, the Lessee becomes liable for the payment or reimbursement of any
obligations, claims or taxes pursuant to any provision hereof, such liability
will continue, notwithstanding the expiration or termination of this Agreement,
until all such amounts are paid or reimbursed by the Lessee.
SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL AGENT AND
TRUSTEE. Notwithstanding anything to the contrary contained in this Agreement,
the Lessee acknowledges that each of the Lessee and the Lessor, pursuant to the
Master Collateral Agency Agreement, has granted a security interest to the
Master Collateral Agent, for the benefit of the Trustee, in all of its right,
title and interest in, to and under the Vehicles, the related Vehicle
Disposition Programs, the Master Collateral Account and all other Master
Collateral specified in the Master Collateral Agency Agreement as being pledged
by Thrifty and Thrifty Finance, and further acknowledges that the Lessor,
pursuant to the Indenture, has granted a security interest to the Trustee in all
of its right, title and interest in, to and under the Thrifty Finance
Agreements, the Collection Account and the other Collateral described in the
Indenture. Accordingly, the Lessee agrees that:
(i) Subject to the terms of the Indenture, the Trustee shall have
all the rights, powers, privileges and remedies of the Lessor hereunder.
Specifically, the Lessee agrees that, upon the occurrence of an
Amortization Event, the Trustee or, with respect to any Master Collateral,
the Master Collateral Agent (for and on behalf of the Trustee) may
exercise any right or remedy against the Lessee provided for herein or in
the Indenture or the Master Collateral Agency Agreement and the Lessee
will not interpose as a defense that such claim should have been asserted
by the Lessor;
(ii) Upon the delivery by the Master Collateral Agent or the Trustee
of any notice to the Lessee stating that a Lease Event of Default or an
Amortization Event with respect to the Lessee has occurred, then the
Lessee, will, if so requested by the Master Collateral Agent (with respect
to the Master Collateral) or the Trustee (with respect to the Collateral),
treat the Master Collateral Agent or the Trustee or the Master Collateral
Agent's or the Trustee's designee, as the case may be, for all purposes as
the Lessor hereunder and in all respects comply with all obligations under
this Agreement that are asserted by the Master Collateral Agent or the
Trustee as the successor to the Lessor hereunder, irrespective of whether
the Lessee has received any such notice from the Lessor;
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(iii) The Lessee acknowledges that pursuant to the Indenture, the
Lessor has irrevocably authorized and directed the Lessee to, and the
Lessee shall, make payments of Rent hereunder directly to the Trustee for
deposit in the Collection Account established by the Trustee for receipt
of such payments pursuant to the Indenture, and such payments shall
discharge the obligation of the Lessee to the Lessor hereunder with
respect to Rent to the extent of such payments. The Lessee further
acknowledges that pursuant to the Master Collateral Agency Agreement, the
Lessor has irrevocably authorized and directed the Lessee to, and the
Lessee shall, cause all payments under the Lessee Agreements, the Vehicle
Disposition Programs, and all other Master Collateral pledged by the
Lessee for the benefit of the Trustee, to be made directly to the Master
Collateral Agent for deposit in the Master Collateral Account established
by the Lessor for receipt of such payments pursuant to the Master
Collateral Agency Agreement, and each such payment (other than any payment
that is subject to distribution to the Lessee or its designee pursuant to
Section 2.5(b) of the Master Collateral Agency Agreement and that is not
transferred to the Collection Account) shall constitute a prepayment in
respect of the obligation of the Lessee to pay the Rent due hereunder on
the next succeeding Due Date. Upon written notice to the Lessee of a sale
or assignment by the Trustee or Master Collateral Agent of its right,
title and interest in moneys due under this Agreement or the Master
Collateral Agency Agreement to a successor Trustee or Master Collateral
Agent, the Lessee shall thereafter make payments of Rent hereunder or
payments in respect of the Master Collateral, as applicable, to the party
specified in such notice;
(iv) Upon request made by the Master Collateral Agent at any time,
the Lessee will take such actions (other than recordation of liens with
respect to the Existing Fleet) as are requested by the Master Collateral
Agent to assist the Master Collateral Agent in maintaining the Master
Collateral Agent's perfected security interest in the Vehicles leased
under this Agreement, the Certificates of Title with respect thereto and
the Master Collateral pursuant to the Master Collateral Agency Agreement;
and
(v) A security interest in the Lessor's rights under this Agreement
has been granted by the Lessor to the Trustee pursuant to the Indenture as
collateral security only for all Series of Notes that do not provide for
wholly segregated collateral and, accordingly, all references herein to
"all" Series of Notes shall refer only to all Series of Notes that do not
provide for wholly segregated collateral.
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SECTION 22. MODIFICATION AND SEVERABILITY. The terms of this Agreement
will not be waived, altered, modified, amended, supplemented or terminated in
any manner whatsoever except by a written instrument signed by the Lessor and
the Lessee and consented to in writing by the Master Collateral Agent and the
Trustee. If any part of this Agreement is not valid or enforceable according to
law, all other parts will remain enforceable. The Lessor shall provide prompt
written notice to each Rating Agency of any such waiver, modification or
amendment.
SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES. The Lessee represents
and warrants to the Lessor that as of the Closing Date with respect to the first
Series of Notes:
Section 23.1. Due Organization, Authorization, No Conflicts, Etc. The
Lessee is a corporation duly organized and validly existing and in good standing
under the laws of the jurisdiction of its incorporation and is duly qualified
and in good standing in each jurisdiction where, because of the nature of its
activities or properties, the failure so to qualify would have a Material
Adverse Effect on the Lessee. The execution, delivery and performance by the
Lessee of this Agreement and the other Related Documents to be executed and
delivered by it are within its corporate powers, have been duly authorized by
all necessary corporate action (including shareholder approval, if required),
have received all necessary governmental and other consents, approvals (in each
case if any shall be required), and do not and will not contravene or conflict
with, or create a default, breach, Lien or right of termination or acceleration
under, any Requirement of Law or Contractual Obligation binding upon it, other
than such default, breach, Lien or right of termination or acceleration which
does not have a Material Adverse Effect on the Lessee, as applicable. This
Agreement and each other Related Document to be executed and delivered by the
Lessee are (or when executed and delivered will be) the legal, valid, and
binding obligations of the Lessee, enforceable against the Lessee in accordance
with their respective terms, subject to bankruptcy, insolvency and other laws
affecting the enforcement of creditors' rights.
Section 23.2. Financial Information; Financial Condition. All balance
sheets, all statements of operations, of shareholders' equity and of cash flow,
and other financial data which have been or shall hereafter be furnished to the
Lessor or the Trustee for the purposes of or in connection with this Agreement
or the Related Documents have been and will be prepared in accordance with GAAP
and do and will present fairly the financial condition of the entities involved
as of the dates thereof and the results of their operations for the periods
covered thereby and that there has been no material change in the financial
condition or results of operation since the respective
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dates of such balance sheets, statements and other financial data. Such
financial data include the following financial statements and reports which have
been furnished to the Lessor and the Trustee on or prior to such Closing Date:
(a) the audited balance sheet of the Lessee as of December 31, 1994
and the related statements of operations, stockholders' equity and cash
flows for the fiscal year ending on such date; and
(b) the unaudited balance sheets of the Lessee and statement of
operations, accompanied by an Officer's Certificate verifying the accuracy
and completeness thereof signed by an Authorized Officer of the Lessee,
for the nine (9) month period ending September 30, 1995.
Section 23.3. Litigation. Except for (i) claims set forth in Schedule 1
and (ii) claims which are fully covered by insurance, no claims, litigation
(including, without limitation, derivative actions), arbitration, governmental
investigation or proceeding or inquiry is pending or, to the best of the
Lessee's knowledge, threatened against the Lessee which would, if adversely
determined, have a Material Adverse Effect on the Lessee.
Section 23.4. Liens. As of the date hereof, there is no financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) covering or purporting to cover any interest of any kind in
the Vehicles (other than (x) those created in connection with the indebtedness
of the Lessee to Chrysler Credit Corporation (with respect to which the security
interest perfected thereby has been assigned to the Lessor on or prior to this
date), (y) those set forth in Schedule 4, and (z) other Permitted Liens).
Section 23.5. Necessary Actions. Upon the Servicer causing the Lien of the
Master Collateral Agent to be noted on the Certificates of Title with respect to
the Vehicles (other than the Vehicles in the Existing Fleet) or as otherwise
provided for by the Master Collateral Agency Agreement or the Indenture, all
filings, registrations and recordings necessary or appropriate to create,
preserve, protect and perfect the security interest granted to the Master
Collateral Agent in respect of the Master Collateral (other than the Vehicles in
the Existing Fleet) have been accomplished and, assuming the delivery to, and
continuing possession by, the Lessor or its agents or assignees of all
instruments and documents (in each case as defined in the UCC as in effect in
New York) a security interest in which is perfected by possession (except with
regard to property constituting fixtures, any reserved rights of the United
States government as required by law, Liens upon patents, patent licenses,
trademarks,
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service marks and trademark licenses, to the extent that such Liens cannot be
perfected by the filing of financing statements under the Uniform Commercial
Code as in effect in the applicable jurisdiction, Liens on uncertified
securities, Liens on Master Collateral the perfection of which requires filings
in or other actions under the laws of jurisdictions outside of the United States
of America, any State, territory or dependency thereof or the District of
Columbia, and Liens on general intangibles or accounts (in each case as defined
in the UCC as in effect in New York) on which the United States of America or
any department, agency, or instrumentality thereof is the obligor), and assuming
that the Lessee has rights in the Master Collateral within the meaning of the
UCC as in effect in New York, the security interest granted to the Master
Collateral Agent pursuant to the Master Collateral Agency Agreement in and to
the Master Collateral (other than the Vehicles in the Existing Fleet)
constitutes a perfected security interest therein (but as to the copyrights and
copyright licenses and accounts arising therefrom, only to the extent the UCC of
the relevant jurisdiction, from time to time in effect, is applicable), prior to
the rights of all other Persons therein and subject to no other Liens other than
Permitted Liens (except, with respect to goods (as defined in the UCC), buyers
in the ordinary course of business to the extent provided in Section 9-307(1) of
the UCC as from time to time in effect in the applicable jurisdiction) and is
entitled to all rights, priorities and benefits afforded to perfected security
interests by the UCC or other relevant law as enacted in any relevant
jurisdiction.
Section 23.6. Employee Benefit Plans. (a) During the twelve consecutive
month period prior to the Closing Date: (i) no steps have been taken to
terminate any Pension Plan and (ii) no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a Lien under Section
302(f)(1) of ERISA in connection with such Pension Plan; (b) no condition exists
or event or transaction has occurred with respect to any Pension Plan which
could result in the incurrence by the Lessee or any member of the Controlled
Group of fines, penalties or liabilities for ERISA violations, which in the case
of any of the events referred to in clause (a) above or this clause (b) would
have a Material Adverse Effect upon the Lessee, and (c) the Lessee has no
material contingent liability with respect to any post-retirement benefits under
a Welfare Plan, other than liability for continuation coverage described in
Subtitle B of Part 6 of Title I of ERISA and liabilities which would not have a
Material Adverse Effect upon the Lessee.
Section 23.7. Investment Company Act. The Lessee is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
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Section 23.8. Regulations G, T, U and X. The Lessee is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations G, T, U and X of the Board of Governors of the Federal
Reserve System).
Section 23.9. Business Locations; Trade Names; Principal Places of
Business Locations. Schedule 3 lists each of the locations where the Lessee
maintains a chief executive office, principal place of business, or any records;
and Schedule 3 also lists the Lessee's legal name, each name under or by which
the Lessee conducts its business, each state in which the Lessee conducts
business and the state in which the Lessee has its principal place of business.
Section 23.10. Taxes. The Lessee has filed all material tax returns that
are required to be filed by it, and has paid or provided adequate reserves for
the payment of all taxes, including, without limitation, all payroll taxes and
federal and state withholding taxes, and all assessments payable by it that have
become due, other than those that are not yet delinquent or are being contested
in good faith by appropriate proceedings and with respect to which adequate
reserves have been established, and are being maintained, in accordance with
GAAP. As of such Closing Date, there is no ongoing material audit (other than
routine sales tax audits and other routine audits) or, to the Lessee's
knowledge, material tax liability for any period for which returns have been
filed or were due, other than those contested in good faith by appropriate
proceedings and with respect to which (x) adequate reserves have been
established and are being maintained in accordance with GAAP and (y) the failure
to pay such taxes would not, individually or in the aggregate, have a Material
Adverse Effect on the Lessee or a material adverse effect on the Noteholders.
Section 23.11. Governmental Authorization. The Lessee has all licenses,
franchises, permits and other governmental authorizations necessary for all
businesses presently carried on by it (including owning and leasing the real and
personal property owned and leased by it), except where failure to obtain such
licenses, franchises, permits and other governmental authorizes would not have a
Material Adverse Effect on the Lessee.
Section 23.12. Compliance with Laws. The Lessee: (i) is not in violation
of any Requirement of Law, which violation would have a Material Adverse Effect
on the Lessee, and to the best knowledge of the Lessee, no such violation has
been alleged; (ii) has filed in a timely manner all reports, documents and other
materials required to be filed by it with any Governmental Agency (and the
information contained in each of such filings is
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true, correct and complete in all material respects), except where failure to
make such filings would not have a Material Adverse Effect on the Lessee, as
applicable; and (iii) has retained all records and documents required to be
retained by it pursuant to any Requirement of Law, except where failure to
retain such records would not have a Material Adverse Effect on the Lessee, as
applicable.
Section 23.13. Eligible Vehicles; Eligible Franchisees. Each Vehicle is or
will be, as the case may be, on the Vehicle Lease Commencement Date with respect
to such Vehicle, an Eligible Vehicle, and each Franchisee leasing an Eligible
Vehicle from the Lessor is or will be, as the case may be, on the sublease
commencement date with respect to such Eligible Vehicle, an Eligible Franchisee.
Section 23.14. Supplemental Documents True and Correct. All information
contained in any Vehicle Order or other Supplemental Document which has been
submitted, or which may hereafter be submitted by the Lessee to the Lessor is,
or will be, true, correct and complete.
Each of the foregoing representations and warranties will be deemed to be
remade as of the Closing Date with respect to each Series of Notes.
SECTION 24. CERTAIN AFFIRMATIVE COVENANTS. The Lessee and, as applicable,
the Servicer each covenants and agrees that, until the expiration or termination
of this Agreement, and thereafter until the obligations of the Lessee and the
Servicer under this Agreement and the Related Documents are satisfied in full,
unless at any time the Lessor, the Trustee shall otherwise expressly consent in
writing, it will:
Section 24.1. Corporate Existence; Foreign Qualification. Do and cause to
be done at all times all things necessary to (i) maintain and preserve the
corporate existence of the Lessee (except as permitted under Section 25.1); (ii)
be duly qualified to do business and in good standing as a foreign corporation
in each jurisdiction where the nature of its business makes such qualification
necessary and the failure to so qualify would have a Material Adverse Effect on
the Lessee; and (iii) comply with all Contractual Obligations and Requirements
of Law binding upon it, except to the extent that the failure to comply
therewith would not, in the aggregate, have a Material Adverse Effect on the
Lessee.
Section 24.2. Books, Records and Inspections. (i) Maintain books and
records that are complete and accurate in all material respects with respect to
the Vehicles leased by it under this Agreement; and (ii) at any time and from
time to time during
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regular business hours, and with reasonable prior notice from the Lessor, the
Master Collateral Agent or the Trustee, permit the Lessor, the Master Collateral
Agent or the Trustee (or such other person who may be designated from time to
time by the Lessor, the Master Collateral Agent or the Trustee), or its agents
or representatives to examine and make copies of all books, records and
documents in the possession or under the control of the Lessee relating to the
Vehicles leased under this Agreement, including without limitation, in
connection with the Master Collateral Agent's or the Trustee's satisfaction of
any requests of a Manufacturer performing an audit under its Vehicle Disposition
Program.
Section 24.3. Vehicle Disposition Programs. With respect to each Program
Vehicle leased by the Lessee, comply, or cause the related Franchisee to comply,
as appropriate, with all of its obligations under the applicable Vehicle
Disposition Program relating to such Vehicle.
Section 24.4. Reporting Requirements. Furnish, or cause to be furnished to
the Lessor (or to such other Persons as are specified below):
(a) Daily Reports. Daily reports of the Servicer as follows: On each
Business Day commencing on the Lease Commencement Date, the Servicer shall
prepare and maintain at the office of the Servicer, a record (each, a
"Daily Report") setting forth the aggregate amount of (i) Guaranteed
Payments, Repurchase Payments, Disposition Proceeds and Incentive Payments
received from Manufacturers under Vehicle Disposition Programs or
incentive programs, or from other Persons in connection with the sale or
disposition of Vehicles, (ii) insurance proceeds, (iii) payments in
respect of Lessee Agreements, and (iv) any other Collections in respect of
the Master Collateral, and in each case deposited in the Master Collateral
Account and reported to the Servicer by the Master Collateral Agent, in
accordance with Section 2.5(b) of the Master Collateral Agreement, not
more than the second Business Day preceding such Daily Report, and such
Daily Report shall set forth additionally (x) the aggregate dollar amount
of such Collections allocable to each Beneficiary and to the Master
Collateral pledged thereto, (y) during the continuance of a Lease Event of
Default or a Liquidation Event of Default, and as needed under Section
2.5(c) or (d) of the Master Collateral Agency Agreement or, in the sole
judgment of the Master Collateral Agent, as otherwise needed, the portion
of such Collections derived from the Master Collateral pledged by the
Lessor and the portion pledged by the Lessee, and (z) the aggregate dollar
amount of Sublease payments, insurance payments, warranty payments, and
other payments
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which, so long as no Lease Event of Default or Liquidation Event of
Default has occurred and is continuing, may be withdrawn from the Master
Collateral Account and distributed to the Lessee, as set forth in Section
2.5(b) of the Master Collateral Agency Agreement. Before 3:00 p.m. on each
such Business Day, the Servicer shall deliver a copy of the Daily Report
to the Master Collateral Agent and the Trustee.
(b) Monthly Certificate. Monthly certificates of the Servicer as
follows: On each Reporting Date, the Servicer shall forward to the Lessee,
the Lessor, the Trustee, the Paying Agent, the Rating Agencies and any
applicable Credit Enhancement Provider, an Officers' Certificate of the
Servicer substantially in the form of Exhibit A (each, a "Monthly
Certificate") setting forth, inter alia, the following information (which,
in the cases of clauses (iii), (iv) and (v) below, will be expressed as a
dollar amount per $1,000 of the original principal amount of such Notes
and as a percentage of the outstanding principal balance of the Notes as
of such date): (i) the aggregate amount of payments received from the
Manufacturers under Vehicle Disposition Programs and deposited in the
Master Collateral Account and the aggregate amount of other Collections
processed for the Related Month with respect to such Reporting Date; (ii)
the Invested Percentage on the last day of the second preceding Related
Month of each Series of Notes (or, until the end of the second Related
Month for such Series of Notes, as of the Closing Date for such Series);
(iii) for each Series, the total amount to be distributed to Noteholders
on the next succeeding Payment Date; (iv) for each Series, the amount of
such distribution allocable to principal on the Notes; (v) for each
Series, the amount of such distribution allocable to interest on the
Notes; (vi) for each Series, the amount of Enhancement used or drawn (or
to be used or drawn) in connection with the distribution to Noteholders of
such Series on the next succeeding Payment Date, together with the
aggregate amount of remaining Enhancement not theretofore used or drawn;
(vii) for each Series, the Series Monthly Servicing Fee for the next
succeeding Payment Date; (viii) for each Series, the existing Carryover
Controlled Amortization Amount, if any; (ix) for each Series or Class of
Notes, the applicable Pool Factors with respect to such Related Month; (x)
the Aggregate Asset Amount and the amount of the Asset Amount Deficiency,
if any, at the close of business on the last day of the Related Month;
(xi) if Enhancement is provided for any Series of Notes by means of
overcollateralization, the amount of recoveries and losses for the Related
Month and the amount of any excess funds available for such
overcollateralization; and (xii) whether, to the knowledge of the
Servicer, any Lien exists on any of the Collateral
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(other than Permitted Liens). The Trustee shall be under no duty to
recalculate, verify or recompute the information supplied to it under this
Section 24.4(b).
(c) Audit Report. As soon as available and in any event within one
hundred ten (110) days after the end of each fiscal year of the Lessee, a
copy of the consolidated balance sheet of the Lessee and its Subsidiaries
as at the end of such fiscal year, together with the related statements of
earnings, stockholders' equity and cash flows for such fiscal year,
prepared in reasonable detail and in accordance with GAAP, and certified
by Deloitte & Touche (or such other independent certified public
accountants of recognized national standing as shall be selected by the
Lessee) as presenting fairly the financial condition and results of
operations of the Lessor, with such exceptions as may be noted in such
accountants' report;
(d) Quarterly Statements. As soon as available, but in any event
within forty-five (45) days after the end of each fiscal quarter (except
the fourth fiscal quarter) of the Lessee, copies of the unaudited
consolidated balance sheet of the Lessee and its Subsidiaries as at the
end of such fiscal quarter and the related unaudited statements of
earnings, stockholders' equity and cash flows for the portion of the
fiscal year through such fiscal quarter (and as to the statements of
earnings for such fiscal quarter) in each case setting forth in
comparative form the figures for the corresponding periods of the previous
fiscal year, prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and
certified by the chief financial or accounting officer of the Lessee as
presenting fairly the financial condition and results of operations of the
Lessee and its Subsidiaries (subject to normal year-end adjustments);
(e) Lease Events of Defaults. Promptly after the Lessee has actual
knowledge of the occurrence of any Lease Event of Default, Potential Lease
Event of Default, Manufacturer Event of Default, Potential Manufacturer
Event of Default, a written statement of an Authorized Officer describing
such event and the action that the Lessee proposes to take with respect
thereto;
(f) Monthly Vehicle Statements. On or before the third Reporting
Date, and on each Reporting Date thereafter, a monthly vehicle statement
(each, a "Monthly Vehicle Statement") in a form acceptable to the Lessor,
which shall specify (i) the last eight digits of the VIN for the Vehicles
leased hereunder during the Related Month by the Lessee, (ii) whether such
Vehicle is leased under Annex A or
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Annex B hereto; (iii) the Capitalized Cost for such Vehicles, (iv) the
aggregate Net Book Value of such Vehicles as of the end of the Related
Month, (v) the VINs for those Vehicles that have been delivered to
Manufacturers or designated Auctions pursuant to the applicable Vehicle
Disposition Program, or that have been otherwise sold, during the Related
Month, (vi) those Vehicles that have become a Casualty during the Related
Month and their respective Net Book Values (as of the first day of the
calendar month in which such Vehicle becomes a Casualty), (vii) the total
amount of Monthly Base Rents, Monthly Variable Rents, Monthly Finance
Rents, Monthly Supplemental Payments, Availability Payment, Termination
Payments and Late Return Payments due for the Related Month on such Due
Date, (viii) all prepayments of Rent received during the Related Month
from Guaranteed Payments, Repurchase Payments, Disposition Proceeds and
Incentive Payments received by the Lessor during the Related Month from
the Manufacturers, Auctions and other Persons, as the case may be, (ix)
the aggregate Depreciation Charges for all Vehicles continuing in the
possession of the Lessee, (x) information with respect to the Lessee
necessary for the Servicer to compute the Aggregate Asset Amount as of the
end of the Related Month, (xi) information with respect to the Lessee
necessary for the Servicer to compute the Availability Payment for the
Lessee with respect to the Related Month, and (xii) any other charges
owing from, and credits due to, the Lessee under this Agreement;
(g) Annual Certificate. Annual Officers' Certificates of the Lessee
as follows: The Lessee will deliver to Thrifty Finance, the Trustee, any
applicable Enhancement Provider under the Indenture, and the Rating
Agencies rating any outstanding Series of Notes, on or before April 15 of
each calendar year, beginning with April 15, 1996, an Officers'
Certificate substantially in the form of Exhibit B (each, an "Annual
Certificate") (a) stating that a review of the activities of the Lessee
during the preceding calendar year (or during the initial period from the
initial Closing Date until April 15, 1996) and of its performance under
this Agreement and the other Related Documents to which the Lessee is a
party was made under the supervision of the officers signing such
certificate, (b) stating that to the best of such officers' knowledge,
based on such review, either there has occurred no event which, with the
giving of notice or passage of time or both, would constitute a Lease
Event of Default or Amortization Event and that the Lessee has fully
performed all its obligations under this Agreement and such other Related
Documents throughout such year, or, if there has occurred such event or a
Lease Event of Default or Amortization Event, specifying each such event
known to
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such officers and the nature and status thereof, and (c) stating (and
containing an Opinion of Counsel to the effect) that all necessary Uniform
Commercial Code continuation statements and other Uniform Commercial Code
filings have been completed (including, without limitation, any
"precautionary filings" made by the Lessees in favor of the Lessor), all
necessary Assignment Agreements have been executed and delivered pursuant
to Section 2.1 of the Master Collateral Agency Agreement, and all other
actions, if any, required to maintain the perfected security interest of
the Trustee or the Master Collateral Agent on behalf of the Trustee in the
Collateral and in the Master Collateral (except for noting the Lien of the
Master Collateral Agent on the Certificates of Title for the Existing
Fleet), have been taken and that the Trustee or the Master Collateral
Agent continues to have a perfected security interest in the Collateral
and Master Collateral;
(h) Annual Report. Annual reports of independent public accountants
as follows: On or before April 15 of each calendar year, beginning with
April 15, 1996, the Lessee shall cause a firm of nationally recognized
independent public accountants (who may also render other services to the
Servicer) to furnish a report to Thrifty Finance, the Trustee, the Rating
Agencies and any Enhancement Provider to the effect that (i) they have
compared the mathematical calculations of each amount set forth in the
monthly certificates forwarded by the Lessee pursuant to this Agreement
and the Master Collateral Agency Agreement during the period covered by
such report (which shall be the period from January 1 to and including
December 31 of the prior calendar year or for the calendar year ending
December 31, 1995 from the initial Closing Date to December 31, 1995) with
the Lessee's computer reports which were the source of such amounts and
that on the basis of such comparison, such accountants are of the opinion
that such amounts are in agreement, except for such exceptions as they
believe to be immaterial and such other exceptions as shall be set forth
in such statement and (ii) they have examined certain documents and the
records relating to the servicing of the Vehicles under this Agreement and
the other Related Documents to which the Lessee is a party and that, on
the basis of such examination, nothing has come to the attention of such
accountants that would cause such accountants to believe that such
servicing (including the allocations of Collections under the Indenture)
has not been completed in compliance with all of the terms and conditions
set forth in the Indenture, any Supplement, this Agreement and the Master
Collateral Agency Agreement, except for (a) such exceptions as such
accountants believe to be
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immaterial and (b) such other exceptions as shall be set forth in such
report; and
(i) Quarterly Non-Program Vehicle Report. Quarterly reports of
independent public accountants as follows: On or before the second
Determination Date immediately following each March 31, June 30, September
30, and December 31, of each year, beginning with March 31, 1995, the
Servicer shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer and who is
acceptable to the Rating Agencies) to furnish a report (the "Quarterly
Non-Program Vehicle Report") to the Lessor, the Trustee, the Rating
Agencies, and the Master Collateral Agent to the effect that they have
performed certain agreed upon procedures with respect to the calculation
of Disposition Proceeds obtained from the sale or other disposition of all
Non-Program Vehicles (other than Casualties) sold or otherwise disposed of
during each Related Month in such period and compared such calculations of
Disposition Proceeds with the corresponding amounts set forth in the Daily
Reports prepared by the Servicer pursuant to clause (a) above and that on
the basis of such comparison such accountants are of the opinion that such
amounts are in agreement, except for such exceptions as they believe to be
material and such other exceptions as shall be set forth in such report.
(j) Other. From time to time, such other information, documents, or
reports regarding the Vehicles or the financial position, the results of
operations or business of the Lessee as the Lessor, the Master Collateral
Agent or the Trustee may from time to time reasonably request in order to
protect the interests of the Lessor, the Master Collateral Agent or the
Trustee under or as contemplated by this Agreement or any other Related
Document.
Section 24.5. Taxes and Liabilities. Pay when due all taxes, assessments
and other material (determined on a consolidated basis) liabilities (including,
without limitation, taxes, titling fees and registration fees payable with
respect to Vehicles), except as contested in good faith and by appropriate
proceedings (but only if and so long as forfeiture of any material part of the
Vehicles leased under this Agreement will not result from the failure to pay any
such taxes, assessments or other material liabilities during the period of any
such contest) and with respect to which (a) adequate reserves have been
established, and are being maintained, in accordance with GAAP and (b) the
failure to make such payments and the maintaining of such reserves would not
have a Material Adverse Effect on the Lessee or a material adverse effect on the
Noteholders.
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Section 24.6. Compliance with Laws. Comply with all Requirements of Law
related to its businesses if the failure so to comply would have a Material
Adverse Effect on the Lessee.
Section 24.7. Maintenance of Separate Existence. Maintain certain policies
and procedures relating to its existence as a separate corporation as follows:
The Lessee acknowledges its receipt of a copy of that certain opinion letter
issued by Mayer, Brown & Platt, dated as of the Closing Date and addressing the
issue of substantive consolidation as it may relate to the Lessee and the
Lessor. The Lessee hereby agrees to maintain in place all policies and
procedures, and take and continue to take all actions, described in the factual
assumptions set forth in such opinion letter and relating to the Lessee;
provided, however, that the Lessee may cease to maintain any policy or procedure
if and to the extent that the Lessee delivers to the Lessor and the Trustee an
Opinion of Counsel providing that such policy or procedure is no longer
necessary, due to a change in law or otherwise, for the rendering of such
earlier opinion relating to the issue of substantive consolidation.
Section 24.8. Master Collateral Agent as Lienholder. Maintain certain
computer records as follows: Concurrently with each leasing of a Vehicle under
this Agreement, the Servicer shall indicate on its computer records that the
Master Collateral Agent as assignee of the Lessor or the Lessee, as the case may
be, is the holder of a Lien on such Vehicle for the benefit of the Trustee
pursuant to the terms of the Master Collateral Agency Agreement.
Section 24.9. Maintenance of Property. Keep, or cause to be kept, all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted; provided, that nothing in this
Section 24.9 shall require it to maintain, or to make any renewals,
replacements, additions, betterment or improvements of or to, any tangible
property if such property, in its reasonable opinion, is obsolete or surplus or
unfit for use or cannot be used advantageously in the conduct of its business.
Section 24.10. Access to Certain Documentation and Information Regarding
the Collateral. Provide to the Trustee and the Master Collateral Agent
reasonable access to the documentation regarding the Collateral and the Master
Collateral, such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii) subject to the
normal security and confidentiality procedures of the Lessee or the Servicer, as
the case may be, and (iv) at offices in the continental United States designated
by the Lessee or the Servicer, as the case may be, which, if they
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are not the offices where such documentation normally is kept, shall be
accessible without unreasonable effort or expense.
In addition, commencing on the date ten (10) days after the date that the
Lessee receives from the Trustee or any Note Owner a written request therefor,
which request shall (x) contain a certification of such Note Owner that such
person is a Note Owner and (y) provide an address for delivery, then and
thereafter, unless and until the Lessee receives from such Note Owner a request
to discontinue same, the Lessee shall deliver the information specified below
directly to such Note Owner (and, if requested, to one other person as may be
specified in such Note Owner's written request) substantially concurrently with
the delivery by the Lessee of such information to any of the Trustee, any
Noteholder or Thrifty Finance, provided, however, if the Lessee is not otherwise
obligated hereunder to deliver such information to the Trustee, any Noteholder
or Thrifty Finance on a periodic basis, then, unless otherwise specified below,
the Lessee shall deliver the following information to such Note Owner on a
monthly basis on the same date as the date on which the Monthly Certificate
delivered pursuant to Section 24.4(b) is delivered:
(i) the Monthly Certificate delivered pursuant to Section 24.4(b);
(ii) the average age of Thrifty Finance's fleet;
(iii) copies of any new Vehicle Disposition Programs entered into by
Thrifty Finance during the Related Month;
(iv) a statement as to whether a Manufacturer Event of Default or
Lease Event of Default occurred during the Related Month;
(v) any financial reports required to be delivered under the Lease
(vi) the Annual Certificate delivered hereunder;
(vii) the Annual Report delivered hereunder;
(viii) the Quarterly Non-Program Vehicle Report; and
(ix) within ten (10) days after written request, such other
information as is reasonably requested by such Note Owner in order
to satisfy any regulatory requirements of such Note Owner.
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SECTION 25. CERTAIN NEGATIVE COVENANTS. Until the expiration or
termination of this Agreement and thereafter until the obligations of the Lessee
are paid in full, the Lessee agrees that, unless at any time the Lessor, the
Master Collateral Agent and the Trustee shall otherwise expressly consent in
writing, it will not:
Section 25.1. Mergers, Consolidations. Be a party to any merger or
consolidation, other than a merger or consolidation of the Lessee into or with
another entity if:
(a) the Person formed by such consolidation or into or with which
the Lessee is merged shall be a Person organized and existing under the
laws of the United States of America or any State or the District of
Columbia, and, if the Lessee is not the surviving entity, shall expressly
assume, by an agreement supplemental hereto executed and delivered to the
Trustee, the performance of every covenant and obligation of the Lessee
hereunder and under all other Related Documents;
(b) the Lessee has delivered to the Trustee an officer's certificate
and an opinion of counsel each stating that such consolidation or merger
and such supplemental agreement comply with this Section 25.1 and that all
conditions precedent herein provided for relating to such transaction have
been complied with; and
(c) the Rating Agency Condition shall be met with respect to such
assignment and succession.
Section 25.2. Other Agreements. Enter into any agreement containing any
provision which would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by it hereunder or in connection herewith.
Section 25.3. Liens. Create or permit to exist any Lien with respect to
any Vehicle leased hereunder now or hereafter existing or acquired, except Liens
in favor of the Lessor, the Master Collateral Agent or the Trustee, the lien on
the Existing Fleet in favor of Chrysler Credit Corporation, and the Liens set
forth in Schedule 4, and the following Liens to the extent such liens in the
aggregate would not have a Material Adverse Effect on the Lessor, the Master
Collateral Agent or the Trustee or the Noteholders under this Agreement or the
Indenture (all the foregoing Liens collectively, the "Permitted Liens"): (i)
Liens for current taxes not delinquent or for taxes being contested in good
faith and by appropriate proceedings, and with respect to which adequate
reserves have been established, and are being maintained, in accordance with
GAAP, (ii) Liens, including judgment liens, arising in the ordinary course of
business being
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contested in good faith and by appropriate proceedings, and with respect to
which adequate reserves have been established, and are being maintained, in
accordance with GAAP, (iii) Liens incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other forms of
governmental insurance or benefits, and (iv) mechanics' materialmen's,
landlords', warehousemen's and carrier's Liens, and other Liens imposed by law,
securing obligations arising in the ordinary course of business that are being
contested in good faith and by appropriate proceedings and with respect to which
adequate reserves have been established, and are being maintained, in accordance
with GAAP.
Section 25.4. Use of Vehicles. Knowingly use or allow the Program Vehicles
to be used in any manner that would (i) make any such Program Vehicles
ineligible for repurchase by their respective Manufacturers or for sale at
Auction under an Eligible Vehicle Disposition Program, except with respect to
the permitted redesignation of Program Vehicles as Non-Program Vehicles,
pursuant to Section 14, or (ii) subject the Vehicles to confiscation.
Section 25.5. Acquisition and Financing of Vehicles. Use funds on deposit
in or required to be deposited into the Excess Funding Account (as defined in
the related Supplement) or the Retained Distribution Account to acquire or
finance Vehicles during any calendar month or series of consecutive calendar
months if the Vehicle Ratio for such month or series of months exceeds the
following amounts:
For any month 30%
For any two consecutive months 50%
For any three consecutive months 70%
For any four consecutive months 80%
For any five consecutive months 90%
SECTION 26. SERVICING COMPENSATION.
Section 26.1. As compensation for its servicing activities hereunder and
reimbursement for its expenses as set forth in Section 26.2, the Servicer shall
be entitled to receive from the Lessor a monthly servicing fee (the "Monthly
Servicing Fee"), payable in arrears on each Payment Date prior to the
termination of this Lease, the Indenture and the Master Collateral Agency
Agreement in an amount equal to the sum of the monthly servicing fees for all
Series of Notes. Except as otherwise specified in the related Supplement, the
Monthly Servicing Fee for each Series of Notes (each, a "Series Monthly
Servicing Fee") on each Payment Date shall be equal to (i) the portion of the
Supplemental Servicing Fee allocated to such Series of Notes pursuant to the
related Supplement, plus (ii) one-twelfth of the product of
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(A) the Servicing Fee Percentage for such Series and (B) the Invested Amount of
such Series as of the preceding Payment Date (after giving effect to any
payments of principal on such date). The Series Monthly Servicing Fee for each
Series shall be paid to the Servicer pursuant to the procedures set forth in the
applicable Supplement. The supplemental servicing fee (the "Supplemental
Servicing Fee") for any period shall be equal to all Carrying Charges comprising
payments due from the Servicer under Section 26.2 hereof.
Section 26.2. The Servicer's expenses include, and the Servicer agrees to
pay, the amounts due to the Trustee pursuant to Section 9.5 of the Indenture,
plus the reasonable fees and disbursements of independent accountants in
connection with reports furnished pursuant to Sections 24.4(h) and (i), plus all
other fees, expenses and indemnities incurred by the Servicer or the Lessor in
connection with the Servicer's activities hereunder or under the Related
Documents. The Servicer, however, shall not be liable for any liabilities, costs
or expenses of the Lessor, the Trustee or the Noteholders arising under any tax
law, including without limitation any Federal, state or local income or
franchise taxes or any other tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a failure to comply
therewith), except to the extent incurred as a result of the Servicer's
violation of the provisions of this Lease or of the Related Documents; provided,
however, the foregoing provisions of this sentence shall not affect the
indemnification obligations of the Lessee under Section 15 of the Lease. In the
event that the Servicer fails to pay any amount due to the Trustee pursuant to
Section 9.5 of the Base Indenture, the Trustee will be entitled to receive such
amounts due from the Monthly Servicing Fee prior to payment thereof to the
Servicer.
SECTION 27. BANKRUPTCY PETITION AGAINST LESSOR. The Lessee hereby
covenants and agrees that, prior to the date which is one year and one day after
the payment in full of all Series of Notes, it will not institute against, or
join any other Person in instituting against, the Lessor any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States. In the event that the Lessee (or any sublessee thereof) takes
action in violation of this Section 27, the Lessor agrees, for the benefit of
the Noteholders, that it shall file an answer with the bankruptcy court or
otherwise properly contest the filing of such a petition by the Lessee against
the Lessor or the commencement of such action and raise the defense that the
Lessee has agreed in writing not to take such action and should be estopped and
precluded therefrom and such other defenses, if any, as its
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counsel advises that it may assert. The provisions of this Section 27 shall
survive the termination of this Agreement.
SECTION 28. SUBMISSION TO JURISDICTION. THE LESSOR, THE MASTER COLLATERAL
AGENT AND THE TRUSTEE MAY ENFORCE ANY CLAIM ARISING OUT OF THIS AGREEMENT IN ANY
STATE OR FEDERAL COURT HAVING SUBJECT MATTER JURISDICTION, INCLUDING, WITHOUT
LIMITATION, ANY STATE OR FEDERAL COURT LOCATED IN THE STATE OF NEW YORK IN THE
BOROUGH OF MANHATTAN IN NEW YORK CITY. FOR THE PURPOSE OF ANY ACTION OR
PROCEEDING INSTITUTED WITH RESPECT TO ANY SUCH CLAIM, THE LESSEE HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS. THE LESSEE HEREBY
IRREVOCABLY DESIGNATES CT CORPORATION SYSTEM, INC., 1633 BROADWAY, NEW YORK, NEW
YORK 10019, TO RECEIVE FOR AND ON BEHALF OF THE LESSEE SERVICE OF PROCESS IN NEW
YORK. THE LESSEE FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF
SAID COURTS BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO
THE LESSEE AND AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW,
(I) SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY
SUCH SUIT, ACTION OR PROCEEDING AND (II) SHALL BE TAKEN AND HELD TO BE VALID
PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO IT. Nothing herein contained
shall affect the right of the Lessor to serve process in any other manner
permitted by law or preclude the Lessor, the Master Collateral Agent or the
Trustee from bringing an action or proceeding in respect hereof in any other
country, state or place having jurisdiction over such action. THE LESSEE HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT LOCATED IN THE STATE OF NEW YORK IN THE
BOROUGH OF MANHATTAN IN NEW YORK CITY AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 29. GOVERNING LAW. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. All obligations of the
Lessee and all rights of the Lessor, the Master Collateral Agent or the Trustee
expressed herein shall be in addition to and not in limitation of those provided
by applicable law or in any other written instrument or agreement.
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<PAGE> 47
SECTION 30. JURY TRIAL. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT TO WHICH IT IS A
PARTY, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM ANY
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED
TRANSACTION, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE
A COURT AND NOT BEFORE A JURY.
SECTION 31. NOTICES. All notices, requests and other communications to any
party or signatory hereunder shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party or signatory,
addressed to it, at its address or facsimile number set forth on the signature
pages below, or at such other address or facsimile number as such party may
hereafter specify for such purpose by notice (in accordance with this Section
31) to the other parties and signatories hereto. In each case, a copy of all
notices, requests and other communications (other than any such notices,
requests and other communications in the ordinary course of business) that are
sent by any party or signatory hereunder shall be sent to the Trustee. Copies of
notices, requests and other communications delivered to the Trustee pursuant to
the foregoing sentence shall be sent to the following address:
BANKERS TRUST COMPANY
4 Albany Street
New York, New York 10006
Attention: Corporate Trust and
Agency Group/Structured Finance
Telephone: (212) 250-6533
Facsimile: (212) 250-6439
Each such notice, request or communication shall be effective when received at
the address specified below. Copies of all facsimile notices must be sent by
first class mail promptly after such transmission by facsimile.
SECTION 32. HEADINGS. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
SECTION 33. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute one and the same Agreement.
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<PAGE> 48
SECTION 34. EFFECTIVENESS. This Agreement shall become effective on the
Lease Commencement Date.
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<PAGE> 49
IN WITNESS WHEREOF, the parties have executed this Agreement or caused it
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
LESSOR:
THRIFTY CAR RENTAL FINANCE CORPORATION
By: /s/ Steven B. Hildebrand
----------------------------------
Name: Steven B. Hildebrand
Title: President
Address: 5330 East 31st Street
Suite 100
Tulsa Oklahoma 74135
Attention: Steven B. Hildebrand
Telephone: (918) 669-2550
Facsimile: (918) 669-2301
LESSEE AND SERVICER:
THRIFTY RENT-A-CAR SYSTEM, INC.
By: /s/ Steven B. Hildebrand
----------------------------------
Name: Steven B. Hildebrand
Title: Vice President
Address: 5330 East 31st Street
Suite 100
Tulsa Oklahoma 74135
Attention: Steven B. Hildebrand
Telephone: (918) 669-2267
Facsimile: (918) 669-2301
<PAGE> 50
Acknowledged by:
MASTER COLLATERAL AGENT
Bankers Trust Company
By: /s/ Danielle R. Furey
-------------------------------
Name: Danielle R. Furey
Title: Assistant Treasurer
Address: 4 Albany Street, 10th Floor
New York, New York 10006
Attention: Corporate Trust Agency Group/
Structured Finance
Telephone: (212) 250-6533
Facsimile: (212) 250-6439
<PAGE> 51
ANNEX A
ANNEX
to the
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
Dated as of December 13, 1995
between
THRIFTY CAR RENTAL FINANCE CORPORATION,
as Lessor,
and
THRIFTY RENT-A-CAR SYSTEM, INC.,
as Lessee and Servicer
<PAGE> 52
1. Scope of Annex. This Annex A shall apply only to the acquisition,
leasing and servicing of the Acquired Vehicles by Thrifty Finance pursuant to
the Base Lease, as supplemented by this Lease Annex (collectively, the
"Operating Lease").
2. General Agreement. With respect to the Acquired Vehicles, the Lessee
and the Lessor each intend that the Base Lease, as supplemented by this Lease
Annex, is an operating lease and that the relationship between the Lessor and
the Lessee pursuant thereto and hereto shall always be only that of lessor and
lessee, and the Lessee hereby declares, acknowledges and agrees that the Lessor
has title to and is the owner of the Acquired Vehicles. The Lessee shall not
acquire by virtue of the Lease any right, equity, title or interest in or to any
Acquired Vehicles, except the right to use the same under the terms of the
Operating Lease hereof. The parties agree that the Operating Lease is a "true
lease" for all legal, accounting, tax and other purposes and agree to treat the
Operating Lease, as it applies to the Acquired Vehicles, as an operating lease
for all purposes, including tax, accounting and otherwise. The parties will file
all federal, state and local tax returns and reports in a manner consistent with
the preceding sentence.
3. Operating Lease Commitment. (a) Upon the execution and delivery of this
Operating Lease, the Lessor shall, subject to the terms and conditions of the
Agreement, purchase from time to time on or after the Lease Commencement Date
and prior to the Lease Expiration Date, all Acquired Vehicles identified in
Vehicle Orders placed by the Lessee for a purchase price equal to the Initial
Acquisition Cost thereof, and simultaneously therewith, the Lessor shall under
the Operating Lease enter into operating leases with the Lessee with respect to
such Vehicles; provided, that the aggregate Net Book Value of Acquired Vehicles
leased hereunder on any date shall not exceed (a) the Maximum Lease Commitment,
less (b) the Base Amount as of such date with respect to the Financing Lease.
4. Lease Procedures. In connection with the Lease of any Acquired Vehicles
to be leased on or after the Lease Commencement Date, to evidence the
acquisition of such Acquired Vehicles by the Lessor, the Lessee shall deliver to
the Lessor the following:
(a) a Vehicle Order (including a Vehicle Acquisition Schedule) with
respect to all Acquired Vehicles to be leased by the Lessor on the Lease
Commencement Date;
(b) UCC termination statements terminating, or UCC partial releases
releasing, any security interests and other liens (other than Permitted
Liens) in favor of any Person with respect to each Acquired Vehicle leased
on the Lease
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<PAGE> 53
Commencement Date and identified in such Vehicle Order, and any related
Vehicle Disposition Programs;
(c) with respect to the initial lease of Acquired Vehicles, a fully
executed Assignment Agreement covering each Acquired Vehicle leased on the
Lease Commencement Date or to be leased on any date thereafter, the
related Vehicle Disposition Programs, and any other Master Collateral
relating to such Vehicles.
The Lessee hereby agrees that each such delivery of a Vehicle Order shall
be deemed hereunder to constitute a representation and warranty by the Lessee,
to and in favor of the Lessor and the Trustee, that all the conditions precedent
to the acquisition and leasing of the Vehicles identified in such Vehicle Order
have been satisfied as of the date of such Vehicle Order.
5. Maximum Vehicle Lease Term. The maximum Vehicle lease term of the
Operating Lease as it relates to each Acquired Vehicle leased hereunder shall be
from the Vehicle Lease Commencement Date to the date that is 24 months from the
Vehicle Lease Commencement Date. On the occurrence of such date for a Vehicle
not previously disposed of, the Lessee shall, (a) on behalf of the Lessor,
promptly dispose of such Vehicle in accordance with the terms hereof and in
accordance with any instructions of the Lessor for such disposition, (b) in each
case, provide that Disposition Proceeds be paid directly to the Master
Collateral Account for the benefit of the Trustee and (c) pay to the Master
Collateral Agent or the Trustee, in accordance with this Operating Lease, any
other amounts unpaid and owing from the Lessee under the Lease in respect of
such Vehicle.
6. Lessee's Rights to Purchase Vehicles. The Lessee will have the option,
exercisable with respect to any Acquired Vehicle during the Vehicle Term with
respect to such Acquired Vehicle, to purchase any Vehicles leased under this
Agreement at the Vehicle Purchase Price, in which event the Lessee will pay the
Vehicle Purchase Price to the Master Collateral Agent on or before the Due Date
next succeeding such purchase by the Lessee plus all accrued and unpaid Monthly
Base Rent and Monthly Variable Rent with respect to such Vehicle through the
date of such purchase. The Lessor shall cause title to any such Vehicle to be
transferred to the Lessee, and the Servicer shall cause the Master Collateral
Agent to cause its lien to be removed from the certificate of title for such
Vehicle, concurrently with or promptly after the Vehicle Purchase Price for such
Vehicle (and any unpaid Monthly Base Rent and unpaid Monthly Variable Rent) is
paid by the Lessee to the Master Collateral Agent.
-3-
<PAGE> 54
7. Vehicle Disposition. The Lessor and the Lessee agree that, with respect
to Acquired Vehicles, the Lessee shall use its commercially reasonable efforts
to deliver each Program Vehicle for sale at Auction or to return each Program
Vehicle to the related Manufacturer (a) not prior to the end of the Minimum Term
for such Vehicle, and (b) not later than the end of the Maximum Term for such
Vehicle; provided, however, if for any reason, the Lessee fails to deliver such
a Program Vehicle to the applicable Manufacturer for repurchase by the
Manufacturer or to an Auction for sale, in each case in accordance with the
applicable Vehicle Disposition Program, during the time period between the
expiration of the Minimum Term and the expiration of the Maximum Term, the
Lessee shall be obligated to sell or otherwise dispose of such Program Vehicle
and pay a Late Return Payment with respect thereto, in each case as provided in
Section 13 of the Base Lease. The Lessee shall, with respect to Acquired
Vehicles, pay the equivalent of the Rent for the Minimum Term for Program
Vehicles returned before the Minimum Term, regardless of actual usage, unless
such a Program Vehicle is a Casualty, which will be handled in accordance with
Section 7 of the Base Lease. All Disposition Proceeds, Repurchase Payments and
Guaranteed Payments due from the disposition of Program Vehicles pursuant to
this Section shall be due and payable to the Lessor. The Lessor and the Lessee
agree, with respect to Acquired Vehicles, that the Lessee shall use its
commercially reasonable efforts to dispose of each Non-Program Vehicle (a) in a
manner most likely to maximize proceeds from such disposition and consistent
with industry practice and (b) within twenty-four (24) months after the date of
the original new vehicle dealer invoice for such Vehicle. All Disposition
Proceeds due from the disposition of Non-Program Vehicles pursuant to this
Section shall be due and payable to the Lessor.
8. Lessor's Right to Cause Vehicles to be Sold. Notwithstanding anything
to the contrary contained in the Agreement, the Lessor shall have the right, at
any time after the date thirty (30) days prior to the expiration of the Maximum
Term for any Program Vehicle leased under this Annex A, to require that the
Lessee deliver such Program Vehicle to the Manufacturer for repurchase or, as
applicable, to the designated Auction for sale, or exercise commercially
reasonable efforts to arrange for the sale of such Program Vehicle to a third
party for a price greater than the Net Book Value thereof, in which event the
Lessee shall, prior to the expiration of such Maximum Term, deliver such Vehicle
to its Manufacturer or the designated Auction or arrange for the sale of such
Program Vehicle to a third party for a price greater than the Net Book Value (or
purchase the Program Vehicle itself from the Lessor for the Vehicle Purchase
Price). If a sale of the Program Vehicle is arranged by the Lessee prior to the
expiration of such Maximum Term, then the Lessee shall deliver the Program
Vehicle to the
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<PAGE> 55
purchaser thereof, the Lien of the Master Collateral Agent on the Certificate of
Title of such Program Vehicle shall be released, and the Lessee shall cause to
be delivered to the Lessor the funds paid for such Program Vehicle by the
purchaser. If the Lessee is unable to arrange for a sale of the Program Vehicle
prior to the expiration of such Maximum Term, then the Lessee shall cease
attempting to arrange for such a sale and shall return such Program Vehicle to
the applicable Manufacturer or tender such Program Vehicle for Auction or
purchase such Vehicle as herein provided. In no event may any Program Vehicle be
sold pursuant to this paragraph 8 (other than pursuant to a Vehicle Disposition
Program) unless the funds to be paid to the Lessor arising out of such sale
exceed the Net Book Value of such Vehicle less reasonably predictable Excess
Mileage charges, Excess Damage Charges and other similar charges imposed by the
Manufacturer.
9. Calculation of Rent. Rent shall be due and payable on a monthly basis
as set forth in this paragraph 9:
"Monthly Base Rent", with respect to each Due Date and each Acquired
Vehicle leased under the Lease on any day during the Related Month, shall
be the sum of all Depreciation Charges that have accrued with respect to
such Vehicle during the Related Month.
"Monthly Variable Rent", with respect to each Due Date and each
Acquired Vehicle leased under the Lease on any day during the Related
Month, shall equal the sum, without double counting, of (a) the product of
(i) an amount equal to the Net Book Value of such Acquired Vehicle on the
first day contained within both the Related Month and the Vehicle Term
with respect to such Vehicle multiplied by the VFR for the Interest Period
ending on the next succeeding Payment Date and (ii) the quotient obtained
by dividing (A) the number of days contained within both the Related Month
and the Vehicle Term with respect to such Acquired Vehicle by (B) the
total number of days in the Related Month, plus (b) the product of (i) an
amount equal to all Carrying Charges for the Related Month, and (ii) the
quotient obtained by dividing the Net Book Value of such Acquired Vehicle
as of the first day of the Related Month by the Net Book Value of all
Vehicles leased under the Lease as of the first day of the Related Month.
"Rent" means Monthly Base Rent plus Monthly Variable Rent.
10. Payment of Rent and Other Payments.
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<PAGE> 56
(a) Monthly Base Rent. On each Due Date, the Lessee shall pay to the
Lessor the Monthly Base Rents that have accrued during the Related Month
with respect to all Vehicles that were leased under the Operating Lease on
any day during the Related Month;
(b) Monthly Variable Rent. On each Due Date, the Lessee shall pay to
the Lessor the Monthly Variable Rents that have accrued during the Related
Month with respect to all Vehicles that were leased under the Operating
Lease on any day during the Related Month;
(c) Termination Payments, Casualty Payments and Late Return
Payments. On each Due Date, the Lessee shall pay to the Lessor all
Termination Payments, Casualty Payments and Late Return Payments as
provided in Section 5.4 of the Base Lease; and
(d) Certain Other Payments. The Lessee shall cause all Disposition
Proceeds, Repurchase Payments, Guaranteed Payments and Incentive Payments
payable in respect of Acquired Vehicles to be paid directly to the Master
Collateral Agent for the benefit of the Trustee. The Servicer and the
Lessee each agree that in the event that the Servicer or the Lessee shall
receive directly any such payment, including cash, securities, obligations
or other property, the Servicer or the Lessee, as the case may be, shall
accept the same as the Master Collateral Agent's agent and shall hold the
same in trust on behalf of and for the benefit of the Master Collateral
Agent, and shall deposit the same, within two (2) Business Days after
receipt thereof, into the Master Collateral Account in the same form
received, with the endorsement of the Servicer or the Lessee, as the case
may be, when necessary or appropriate.
11. Net Lease. THE OPERATING LEASE SHALL BE A NET LEASE, AND THE LESSEE'S
OBLIGATION TO PAY ALL RENT AND OTHER SUMS HEREUNDER SHALL BE ABSOLUTE AND
UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY ABATEMENT OR REDUCTION FOR ANY
REASON WHATSOEVER. The obligations and liabilities of the Lessee hereunder shall
in no way be released, discharged or otherwise affected (except as may be
expressly provided herein including, without limitation, the right of the Lessee
to reject Vehicles pursuant to Section 2.2 of the Base Lease) for any reason,
including without limitation: (i) any defect in the condition, merchantability,
quality or fitness for use of the Vehicles or any part thereof; (ii) any damage
to, removal, abandonment, salvage, loss, scrapping or destruction of or any
requisition or taking of the Vehicles or any part thereof; (iii) any
restriction, prevention or curtailment of or interference with any use of the
Vehicles or any part thereof; (iv) any defect in or any Lien on title to the
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<PAGE> 57
Vehicles or any part thereof; (v) any change, waiver, extension, indulgence or
other action or omission in respect of any obligation or liability of the Lessee
or the Lessor; (vi) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to the
Lessee, the Lessor or any other Person, or any action taken with respect to the
Operating Lease by any trustee or receiver of any Person mentioned above, or by
any court; (vii) any claim that the Lessee has or might have against any Person,
including without limitation the Lessor; (viii) any failure on the part of the
Lessor to perform or comply with any of the terms hereof or of any other
agreement; (ix) any invalidity or unenforceability or disaffirmance of the
Operating Lease or any provision hereof or any of the other Related Documents or
any provision of any thereof, in each case whether against or by the Lessee or
otherwise; (x) any insurance premiums payable by the Lessee with respect to the
Vehicles; or (xi) any other occurrence whatsoever, whether similar or dissimilar
to the foregoing, whether or not the Lessee shall have notice or knowledge of
any of the foregoing and whether or not foreseen or foreseeable. The Operating
Lease shall be noncancelable by the Lessee and, except as expressly provided
herein, the Lessee, to the extent permitted by law, waives all rights now or
hereafter conferred by statute or otherwise to quit, terminate or surrender the
Operating Lease, or to any diminution or reduction of Rent payable by the Lessee
hereunder. All payments by the Lessee made hereunder shall be final (except to
the extent of adjustments provided for herein), absent manifest error and,
except as otherwise provided herein, the Lessee shall not seek to recover any
such payment or any part thereof for any reason whatsoever, absent manifest
error. If for any reason whatsoever the Operating Lease shall be terminated in
whole or in part by operation of law or otherwise except as expressly provided
herein, the Lessee shall nonetheless pay an amount equal to each Rent payment at
the time and in the manner that such payment would have become due and payable
under the terms of the Operating Lease as if it had not been terminated in whole
or in part. All covenants and agreements of the Lessee herein shall be performed
at its cost, expense and risk unless expressly otherwise stated.
12. Liens. Except for Permitted Liens, the Lessee shall keep all Vehicles
leased by it free of all Liens arising during the Term. Upon the Vehicle Lease
Expiration Date for each Vehicle leased hereunder, the Lessor may, in its
discretion, remove any such Lien and any sum of money that may be paid by the
Lessor in release or discharge thereof, including attorneys' fees and costs,
will be paid by the Lessee upon demand by the Lessor. The Lessor may grant
security interests in the Vehicles without consent of the Lessee; provided,
however, that if any such Liens would interfere with the rights of the Lessee
under the Operating Lease or any sublessee of the Lessee, the Lessor must obtain
the
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<PAGE> 58
prior written consent of the Lessee. The Lessee acknowledges that the granting
of Liens and the taking of other actions pursuant to the Indenture and the
Related Documents does not interfere with the rights of the Lessee under the
Operating Lease.
13. Non-Disturbance. So long as the Lessee satisfies its obligations
hereunder, its quiet enjoyment, possession and use of the Vehicles will not be
disturbed during the Term subject, however, to paragraph 8 of Annex A to the
Lease and except that the Lessor, the Master Collateral Agent and the Trustee
each retains the right, but not the duty, to inspect the Vehicles without
disturbing the ordinary conduct of the Lessee's business. Upon the request of
the Lessor, the Master Collateral Agent or the Trustee, from time to time, the
Lessee will make reasonable efforts to confirm to the Lessor, the Master
Collateral Agent and the Trustee the location, mileage and condition of each
Vehicle and to make available for the Lessor's, the Master Collateral Agent's or
the Trustee's inspection within a reasonable time period, not to exceed
forty-five (45) days, the Vehicles at the location where the Vehicles are
normally domiciled. Further, the Lessee (and each Franchisee) will, during
normal business hours and with a notice of three (3) Business Days, make its
records pertaining to the Vehicles available to the Lessor, the Master
Collateral Agent or the Trustee for inspection at the location where the
Lessee's (and each Franchisee's) records are normally domiciled.
14. Certain Risks of Loss Borne by Lessee. Upon delivery of each Vehicle
to the Lessee, as between the Lessor and the Lessee, the Lessee assumes and
bears the risk of loss, damage, theft, taking, destruction, attachment, seizure,
confiscation or requisition and all other risks and liabilities with respect to
such Vehicle, including personal injury or death and property damage, arising
with respect to any Vehicle due to the manufacturer, purchase, acceptance,
rejection, delivery, leasing, subleasing, possession, use, inspection,
registration, operation, condition, maintenance, repair or storage of such
Vehicle, howsoever arising.
15. Title. This is an agreement to lease only, and title to the Acquired
Vehicles will at all times remain in the Lessor's name. The Lessee will not have
any rights or interest in such Vehicles whatsoever other than the rights of
possession and use and the right to sublease such Vehicles as provided by this
Agreement. In addition, the Lessee, by its execution hereof, acknowledges and
agrees that (i) the Lessor is the sole owner and holder of all right, title and
interest in and to the Vehicle Disposition Programs as they relate to the
Vehicles leased hereunder and (ii) the Lessee has no right, title or interest in
any Vehicle Disposition Program as it relates to any Vehicle
-8-
<PAGE> 59
leased hereunder. To confirm the foregoing, the Lessee, by its execution hereof,
hereby assigns and transfers to the Lessor any rights that the Lessee may have
in respect of any Vehicle Disposition Programs as they relate to the Vehicles
leased hereunder.
* * *
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<PAGE> 60
ANNEX B
ANNEX
to the
MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT
Dated as of December 13, 1995
between
THRIFTY CAR RENTAL FINANCE CORPORATION,
as Lessor,
and
THRIFTY RENT-A-CAR SYSTEM, INC.,
as Lessee and Servicer
<PAGE> 61
1. Scope of Annex. This Annex B shall apply only to the acquisition or
financing, leasing and servicing of the Financed Vehicles by Thrifty Finance
pursuant to the Base Lease, as supplemented by this Lease Annex (collectively,
the "Financing Lease").
2. General Agreement. With respect to the Financed Vehicles, the Lessee
and the Lessor each intend that the Base Lease, as supplemented by this Lease
Annex, constitute a financing arrangement and that the relationship between the
Lessor and the Lessee pursuant thereto and hereto shall always be only that of
lessor and lessee, and the Lessor hereby declares, acknowledges and agrees that
the ownership of the Financed Vehicles rests solely with the Lessee subject to
the security interest granted hereunder to the Lessor.
3. Financing Lease Commitment. Subject to the terms and conditions of the
Financing Lease, upon execution and delivery of the Financing Lease, the Lessor
shall (i) on the Lease Commencement Date purchase from the Lessee the Existing
Fleet for a purchase price equal to the aggregate Net Book Value thereof, and
(ii) from time to time on or after the Lease Commencement Date and prior to the
Lease Expiration Date purchase all other Financed Vehicles identified in Vehicle
Orders placed by the Lessee for a purchase price equal to the Initial
Acquisition Cost thereof, and in each case simultaneously therewith enter into
this Financing Lease with the Lessee with respect to the Existing Fleet and
other Financed Vehicles, as the case may be; provided, that the aggregate
outstanding Base Amount of the Financing Lease shall not on any date exceed (a)
the Maximum Lease Commitment, less (b) the sum of (x) the sum of the Net Book
Values of Acquired Vehicles leased under the Operating Lease on such date, each
such Net Book Value calculated as of the first day contained within both the
calendar month in which such date of determination occurs and the Vehicle Term
for the related Acquired Vehicle, plus (y) accrued and unpaid Monthly Base Rent
under the Operating Lease as of such date.
4. Lease Procedures.
(a) Initial Lease. In connection with the Lease of the Existing
Fleet and any other Financed Vehicles to be leased on the Lease
Commencement Date, to evidence the refinancing of the Vehicles in the
Existing Fleet and the acquisition and financing of such other Financed
Vehicles by the Lessor on the Lease Commencement Date and the conveyance
on such date of a security interest in such Financed Vehicles to the
Master Collateral Agent, the Lessee shall deliver to the Lessor on or
prior to the Lease Commencement Date the following:
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<PAGE> 62
(i) a schedule concerning the Existing Fleet as specified in
Section 2.1 of the Base Lease, in the case of all Vehicles in the
Existing Fleet, or a Vehicle Order (including a Vehicle Acquisition
Schedule) with respect to all other Financed Vehicles to be leased
by the Lessor on the Lease Commencement Date;
(ii) a report of the results of a search of the appropriate
records of the county and state in which the Existing Fleet are
located and the county and state in which the Lessee's principal
office is located, which shall show no liens or other security
interests (other than Permitted Liens and the lien of Chrysler
Credit Corporation in the Existing Fleet) with respect to such
Vehicles or, in the event that such search reveals any such
non-permitted Lien or security interest, there shall be delivered to
the Trustee a termination of such Lien or security interest as
provided below;
(iii) confirmation from each lender holding a security
interest in any Vehicle in the Existing Fleet stating
unconditionally (A) that, if any sums are to be paid to such lender
in connection with the lease of the Existing Fleet, such lender has
been paid the full amount due to it in connection with such
refinancing and (B) that any lien or security interest of such
lender in such Vehicle has been released;
(iv) UCC termination statements terminating, or UCC partial
releases releasing, any security interests and other liens (other
than Permitted Liens and the lien of Chrysler Credit Corporation in
the Existing Fleet) in favor of any Person with respect to each
Vehicle in the Existing Fleet identified in such schedule and any
related Vehicle Disposition Programs;
(v) a fully executed Assignment Agreement covering each
Vehicle in the Existing Fleet and each other Financed Vehicle leased
on the Lease Commencement Date or leased on any date thereafter
under the Lease, the related Vehicle Disposition Programs, and any
other Master Collateral relating to such Vehicles; and
(vi) an Officer's Certificate stating that all the conditions
precedent under the Lease to the leasing of such Vehicles on the
Lease Commencement Date have been satisfied.
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<PAGE> 63
(b) Subsequent Leases. In connection with each Lease of a Financed
Vehicle after the Lease Commencement Date, to evidence the acquisition or
financing of such Financed Vehicle by the Lessor and the conveyance of a
security interest in such Financed Vehicles to the Master Collateral
Agent, the Lessee shall deliver to the Lessor a Vehicle Order (including a
Vehicle Acquisition Schedule) with respect to all Financed Vehicles to be
leased by the Lessor on the date specified therein. The Lessee hereby
agrees that each such delivery of a Vehicle Order shall be deemed
hereunder to constitute a representation and warranty by the Lessee, to
and in favor of the Lessor and the Trustee, that all the conditions
precedent to the acquisition or financing and leasing of the Vehicles
identified in such Vehicle Order have been satisfied as of the date of
such Vehicle Order.
5. Maximum Vehicle Lease Term. The maximum Vehicle lease term of the
Financing Lease as it relates to each Financed Vehicle leased hereunder shall be
from the Vehicle Lease Commencement Date to the date that is 60 months from the
Vehicle Lease Commencement Date. On the occurrence of such date, the Lessee
shall pay to the Master Collateral Agent or the Trustee, in accordance with this
Financing Lease, any amounts unpaid and owing under the Lease in respect of such
Vehicle.
6. Calculation of Rent and Monthly Supplemental Payment. Rent and the
Monthly Supplemental Payment shall be due and payable on a monthly basis as set
forth in this paragraph 6:
"Monthly Base Rent", with respect to each Due Date and each Financed
Vehicle leased under the Lease on any day during the Related Month, shall
be the sum of all Depreciation Charges that have accrued with respect to
such Vehicle during the Related Month.
"Monthly Finance Rent", with respect to each Due Date and each
Financed Vehicle leased under the Lease on any day during the Related
Month, shall equal the sum, without double counting, of (a) the product of
(i) an amount equal to the Net Book Value of such Financed Vehicle on the
first day contained within both the Related Month and the Vehicle Term
with respect to such Vehicle multiplied by the VFR for the Interest Period
ending on the next succeeding Payment date and (ii) the quotient obtained
by dividing (A) the number of days contained within both the Related Month
and the Vehicle Term with respect to such Financed Vehicle by (B) the
total number of days in the Related Month, plus (b) the product of (i) an
amount equal to all Carrying Charges for the Related Month, and (ii) the
quotient obtained by dividing the Net Book Value of such Financed Vehicle
as of the first day of the Related Month by the Net
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<PAGE> 64
Book Value of all Vehicles leased under the Lease as of the first day of
the Related Month.
"Monthly Supplemental Payment" with respect to each Due Date and
each Financed Vehicle shall be an amount equal to (a) the sum of, as
applicable, (i) the aggregate amount of any Guaranteed Payment, Repurchase
Payment, Disposition Proceeds and Incentive Payments received by the
Lessor, the Master Collateral Agent or the Trustee (including by deposit
into the Collection Account or the Master Collateral Account) during the
Related Month with respect to such Vehicle, (ii) the amount of any unpaid
Guaranteed Payment or unpaid Repurchase Payment with respect to such
Vehicle becoming a Delinquent Guaranteed Payment or Delinquent Repurchase
Payment, as the case may be, during the Related Month, (iii) the amount of
any Disposition Proceeds with respect to such Vehicle becoming Delinquent
Disposition Proceeds during the Related Month, (iv) the amount of any
unpaid Incentive Payments with respect to such Vehicle becoming Delinquent
Incentive Payments during the Related Month, (v) if such Vehicle becomes a
Casualty or ceases to be an Eligible Vehicle (other than as a result of
the sale or other disposition thereof), in each case during the Related
Month, the Net Book Value of such Vehicle calculated as of the first day
of the Related Month, and (vi) if such Vehicle was returned to its
Manufacturer for repurchase or sold to any Person or otherwise disposed
of, in each case during the Related Month, the excess, if any, of (A) the
Net Book Value of such Vehicle, calculated as of the applicable Vehicle
Lease Expiration Date, over (B) the sum of all amounts (other than
Incentive Payments) payable in respect of such Vehicle pursuant to clause
(i) above, less (b) the excess, if any, of (i) the aggregate amount of
Disposition Proceeds from the sale or other disposition of such Vehicle
(other than pursuant to an Eligible Vehicle Disposition Program) received
by the Lessor, the Master Collateral Agent or the Trustee (including by
deposit into the Collection Account or the Master Collateral Account)
during such Related Month over (ii) the Net Book Value of such Vehicle,
calculated as of the applicable Vehicle Lease Expiration Date.
"Rent" means Monthly Base Rent plus Monthly Finance Rent.
7. Payment of Rent and Other Payments. (a) On each Due Date:
(i) Monthly Base Rent. The Lessee shall pay to the Lessor the
Monthly Base Rents that have accrued during the Related Month with respect
to all Vehicles that were leased
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<PAGE> 65
under the Finance Lease on any day during the Related Month; provided,
however, that in the event that delinquent payments of Guaranteed
Payments, Repurchase Payments, Disposition Proceeds and/or Incentive
Payments are received by the Lessor, the Master Collateral Agent or the
Trustee (including by deposit into the Collection Account or the Master
Collateral Account) during the Related Month, such payments may be netted
against the Monthly Base Rents to be paid on such Due Date to the extent
(but only to the extent) that Monthly Base Rent has already been received
by any of such Persons in respect of such delinquent payment obligations
pursuant to any or all of clauses (a)(ii), (iii) and (iv) of the
definition of Monthly Supplemental Payment set forth in this Annex B;
(ii) Monthly Finance Rent. The Lessee shall pay to the Lessor the
Monthly Finance Rents that have accrued during the Related Month with
respect to all Vehicles that were leased under the Finance Lease on any
day during the Related Month.
(iii) Monthly Supplemental Payments. The Lessee shall pay to the
Lessor the Monthly Supplemental Payments that have accrued during the
Related Month with respect to all Vehicles that were leased under the
Finance Lease on any day during the Related Month; provided, however, that
in the event that the Monthly Supplemental Payment accrued during a
Related Month is a negative dollar amount, such amount may be netted
against other payments to be paid on such Due Date pursuant to this
paragraph 7.
(b) On the expiration of the term of the Lease with respect to a Financed
Vehicle, any remaining Base Amount, plus all other amounts payable by the Lessee
under the Financing Lease with respect to such Vehicle shall be immediately due
and payable.
(c) The Lessee may from time to time prepay the Base Amount of the
Financing Lease with respect to a Financed Vehicle, in whole or in part, on any
date, provided that the Lessee shall give the Lessor and the Trustee not less
than one (1) Business Day's prior notice of any prepayment, specifying the date
and amount of such prepayment, and the Financed Vehicles to which such
prepayment relates.
8. Risk of Loss Borne by Lessee. Upon delivery of each Vehicle to the
Lessee, as between the Lessor and the Lessee, the Lessee assumes and bears the
risk of loss, damage, theft, taking, destruction, attachment, seizure,
confiscation or requisition with respect to such Vehicle, however caused or
occasioned, and all other risks and liabilities, including personal injury or
death and property damage, arising with respect to any Vehicle or
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<PAGE> 66
the manufacture, purchase, acceptance, rejection, ownership, delivery, leasing,
subleasing, possession, use, inspection, registration, operation, condition,
maintenance, repair, storage, sale, return or other disposition of such Vehicle,
howsoever arising.
9. Mandatory Repurchase of Texas Vehicles. Prior to the Vehicle Lease
Expiration Date with respect to each Texas Vehicle (other than a Vehicle Lease
Expiration Date arising in connection with the purchase of such Texas Vehicle
pursuant to this paragraph 9) and, in the case of each Texas Vehicle which is a
Program Vehicle, prior to the expiration of the Maximum Term applicable thereto
(unless such Vehicle has been redesignated as a Non-Program Vehicle in
accordance with Section 14 of the Base Lease), the Lessee shall purchase such
Texas Vehicle (including any such Vehicle which has become a Casualty) at a
purchase price equal to the Net Book Value of such Vehicle calculated as of the
date of purchase (or, in the case of a Casualty, at a purchase price equal to
the Monthly Supplemental Payments accruing in respect of such Casualty during
the Related Month in which such Vehicle became a Casualty), which shall be
payable to the Master Collateral Agent (together with all accrued and unpaid
Rent and other payments due and payable on such Due Date with respect to such
Texas Vehicle through the date of such purchase) on or prior to the Due Date
next succeeding such purchase by the Lessee. The Lessor shall cause title to
each Texas Vehicle to be transferred to the Lessee, and the Servicer shall cause
the Master Collateral Agent to cause its lien to be removed from the Certificate
of Title for such Vehicle, concurrently with or promptly after such purchase
price for such Texas Vehicle (and any such unpaid Rent and payments) is paid by
the Lessee to the Master Collateral Agent. Notwithstanding anything to the
contrary in this Agreement, no Texas Vehicle may be sold or otherwise disposed
of (other than pursuant to Section 17.3 of the Base Lease), including at Auction
or by return to its Manufacturer pursuant to a Vehicle Disposition Program,
prior to its purchase by the Lessee pursuant to and in accordance with this
paragraph 9.
* * *
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused it
to be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
LESSOR:
THRIFTY CAR RENTAL FINANCE CORPORATION
By: /s/ Steven B. Hildebrand
----------------------------------
Name: Steven B. Hildebrand
Title: President
Address: 5330 East 31st Street
Suite 100
Tulsa Oklahoma 74135
Attention: Steven B. Hildebrand
Telephone: (918) 669-2550
Facsimile: (918) 669-2301
LESSEE AND SERVICER:
THRIFTY RENT-A-CAR SYSTEM, INC.
By: /s/ Steven B. Hildebrand
----------------------------------
Name: Steven B. Hildebrand
Title: Executive Vice President
Address: 5330 East 31st Street
Suite 100
Tulsa Oklahoma 74135
Attention: Steven B. Hildebrand
Telephone: (918) 669-2267
Facsimile: (918) 669-2301
<PAGE> 68
Schedule 1
Litigation Claims
<PAGE> 69
SCHEDULE 1
to Master Motor Vehicle Lease and Services Agreement
1. APCO Enterprises, Inc. v. Thrifty Rent-A-Car System, Inc., Case No.
95-C-691-E, U.S. District Court for the Northern District of Oklahoma
2. David Zimomra, et al. v. Alamo, et al, Case No. 94-S-2148, U.S. District
Court for the District of Colorado
3. Fogerty v. Exxon Corporation, Thrifty Rent-A-Car System, Inc., et al, Case
No. 648521, Superior Court, State of California
4. Rodolfo Browne v. KAM Cars dba Thrifty Car Rental, Case No. 95-0228, U.S.
District Court, Southern District of Florida
5. Thrifty Rent-A-Car System, Inc. v. Wakely Enterprises, Inc., Patrick
Wakely and T. Helland Wakely, Case No. 95 C 686B, U.S. District Court for
the Northern District of Oklahoma
6. Thrifty Rent-A-Car System, Inc., et al. and AFL-CIO, Case No. 6-CA-26998,
Before the Nation Labor Relations Board, Region Six
7. Thrifty Canada, Ltd. v. Lakeside Management Group Limited, Lakeside
Management Holdings Ltd., Donald Keats, Bruce Keats and Gerald White, in
Winnipeg, Manitoba, Canada
8. MCAIC in Receivership
9. All matters which are recorded as accrual, reserve or obligation on the
books of Thrifty Rent-A-Car System, Inc. and its subsidiaries
10. Thrifty Rent-A-Car System, Inc., v. CRS Leasing, Inc., et al, Case No. 95
C 703C, U.S. District Court for the Northern District of Oklahoma
11. CRS Leasing v. Thrifty Rent-A-Car System, Inc., Case No. 95 CVS 7331,
General Court of Justice Superior Court Division
12. Thrifty Rent-A-Car System, Inc., v. John Walden Company, et al, Case No.
94-cv-1036-H, U.S. District Court, Northern District of Oklahoma
<PAGE> 70
13. Thrifty Rent-A-Car System, Inc., v. Newco Corporation and Allan G. Holms,
Case No. 95 C 265H, U.S. District Court for the Northern District of
Oklahoma
14. Thrifty Rent-A-Car System, Inc. v. Michael E. Erbaugh, Inc., et al, Case
No. 95-C-233-K, U.S. District Court for the Northern District of Oklahoma
15. Gateway Rentals, Inc. matter
<PAGE> 71
Schedule 2
Pension Plans
<PAGE> 72
SCHEDULE 2
to Master Motor Vehicle lease and Services Agreement
1. Deferred Contribution Plan pursuant to Section 401(k) of the Internal
Revenue code
2. Non-qualified Deferred Compensation Plan
<PAGE> 73
SCHEDULE 3
to Master Motor Vehicle Lease and Services Agreement
1. Chief Executive Office and Principal Place of Business:
Thrifty Rent-A-Car System, Inc.
5330 East 31st Street
Tulsa, Oklahoma 74153
2. Records Locations:
Space Center III (Records Center Warehouse)
7081 East 38th Street
Tulsa, Oklahoma 74145
Storage Plus by 5R, Inc. (Records Storage Third Party)
5152 South 95th East Avenue
Tulsa, Oklahoma 74145
BMI Media Storage Security (Computer Tape Back-up Storage)
6929 South Lewis
Tulsa, Oklahoma 74136
3. Legal Name:
Thrifty Rent-A-Car System, Inc.
4. Names under which business is conducted:
Thrifty Rent-A-Car
Thrifty Car Rental
Thrifty (used also with subtitles; i.e., car rental, truck rental,
parking, airport parking, used car sales and leasing)
Montgomery Ward Car Rental
5. States in which business is conducted:
Each of the 50 states from time to time
<PAGE> 74
Schedule 4
Liens
<PAGE> 1
EXHIBIT 4.5
[EXECUTION COPY]
================================================================================
MASTER COLLATERAL AGENCY AGREEMENT
among
THRIFTY RENT-A-CAR SYSTEM, INC.,
as a grantor and as Servicer,
THRIFTY CAR RENTAL FINANCE CORPORATION, as a grantor,
as a Financing Source and as a Beneficiary,
VARIOUS FINANCING SOURCES PARTIES HERETO,
VARIOUS BENEFICIARIES PARTIES HERETO,
and
BANKERS TRUST COMPANY,
not in its individual capacity but solely
as Master Collateral Agent
Dated as of December 13, 1995
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Section Page
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ARTICLE I
CERTAIN DEFINITIONS
1.1. Certain Definitions................................................ 2
1.2. Cross References; Headings......................................... 11
1.3. Interpretation..................................................... 11
ARTICLE II
MASTER COLLATERAL AGENT AS LIENHOLDER
FOR THE BENEFICIARIES
2.1. Security Interest.................................................. 12
2.2. Designation of Beneficiaries; Beneficiaries' Rights
Limited........................................................ 16
2.3. Redesignation of Beneficiaries..................................... 17
2.4. Servicer's Fleet Report............................................ 19
2.5. Master Collateral Account.......................................... 19
2.6. Certificates of Title.............................................. 22
2.7. Notation of Liens; Release of Collateral........................... 23
2.8. Power of Attorney.................................................. 24
ARTICLE III
THE SERVICER
3.1. Acceptance of Appointment.......................................... 24
3.2. Servicer Functions................................................. 24
3.3. The Servicer Not to Resign......................................... 25
3.4. Servicing Rights of Master Collateral Agent........................ 26
3.5. Incumbency Certificate............................................. 26
ARTICLE IV
THE MASTER COLLATERAL AGENT
4.1. Appointment........................................................ 26
4.2. Representations.................................................... 28
4.3. Exculpatory Provisions............................................. 29
4.4. Limitations on Powers and Duties of the Master Collateral
Agent.......................................................... 29
4.5. Resignation and Removal of Master Collateral Agent................. 32
4.6. Status of Successors to Master Collateral.......................... 34
4.7. Merger of the Master Collateral Agent.............................. 34
4.8. Compensation and Expenses.......................................... 34
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<PAGE> 3
4.9. Stamp, Other Similar Taxes and Filing Fees......................... 35
4.10. Indemnification.................................................... 35
ARTICLE V
MISCELLANEOUS
5.1. Amendments, Supplements and Waivers................................ 36
5.2. Notices............................................................ 36
5.3. Severability....................................................... 37
5.4. Counterparts....................................................... 37
5.5. Conflicts with Financing Documents; Reservation of
Rights......................................................... 37
5.6. Binding Effect..................................................... 37
5.7. Governing Law...................................................... 38
5.8. Effectiveness...................................................... 38
5.9. Termination of Beneficiary......................................... 38
5.10. Termination of this Agreement...................................... 38
5.11. Assignment by Financing Sources.................................... 38
5.12. Thrifty Finance Related Documents.................................. 38
5.13. No Bankruptcy Petition Against Financing Sources................... 39
5.14. Jurisdiction; Consent to Service of Process........................ 39
5.15. Waiver of Jury Trial............................................... 40
5.16. Insurance Notification............................................. 40
EXHIBITS
Exhibit A Supplement
Exhibit B Servicer's Fleet Report
Exhibit C Certificate of Title Locations
Exhibit D Power of Attorney
Exhibit E Assignment Agreement
Exhibit F List of New York, New York and Tulsa, Oklahoma
Bank Holidays
Exhibit G Investment Standing Instruction
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<PAGE> 4
MASTER COLLATERAL AGENCY AGREEMENT
This MASTER COLLATERAL AGENCY AGREEMENT, dated as of December 13, 1995,
among THRIFTY RENT-A-CAR SYSTEM, INC., an Oklahoma corporation ("Thrifty"), as
servicer (in such capacity, the "Servicer") and as a grantor, THRIFTY CAR RENTAL
FINANCE CORPORATION, an Oklahoma corporation ("Thrifty Finance"), as a grantor,
Thrifty Finance and all other parties which from time to time execute a
Supplement hereto as a Financing Source (each, a "Financing Source" and
collectively, the "Financing Sources"), BANKERS TRUST COMPANY (in its capacity
as trustee under the Indenture (defined herein)), Thrifty Finance and all other
parties which from time to time execute a Supplement hereto as a Beneficiary
(each, a "Beneficiary" and collectively, the "Beneficiaries"), and BANKERS TRUST
COMPANY, not in its individual capacity but solely as master collateral agent
for the Beneficiaries (in such capacity, the "Master Collateral Agent").
BACKGROUND
1. Thrifty owns, and will from time to time hereafter acquire or lease,
certain motor vehicles for use in its franchise and leasing business.
2. Thrifty Finance may on the date hereof and from time to time hereafter
(a) extend financing to Thrifty secured by, among other things, certain motor
vehicles and related rights, and (b) acquire certain motor vehicles to be leased
to Thrifty for use in its franchise and leasing business.
3. Each of Thrifty and Thrifty Finance may from time to time obtain
financing with respect to such motor vehicles acquired by it or obtain credit
enhancement to support such financing from other Persons (including, with
respect to Thrifty, Thrifty Finance) which are or shall hereafter become parties
hereto as Financing Sources or which are or shall hereafter be named as
Beneficiaries with respect to a Financing Source.
4. Bankers Trust Company has agreed to act as Master Collateral Agent, and
in its capacity as Master Collateral Agent to be named as the lienholder on the
Certificates of Title for the vehicles (other than the Existing Fleet) in which
an interest is granted hereunder, for the benefit of the Beneficiaries from time
to time.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
<PAGE> 5
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.1. Certain Definitions. As used in this Agreement, the following
terms have the respective meanings set forth below, or set forth in another
section hereof or in any other agreement, as indicated below.
"Affiliate" means, with respect to any specified Person, another Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified. For purposes
of this definition, "control" means (a) the power to direct the management and
policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise or (b) beneficial ownership of 10%
or more of the voting common equity of a Person; and "controlled" and
"controlling" have meanings correlative to the foregoing.
"Agreement" means this Master Collateral Agency Agreement.
"Assignment Agreement" means a Vehicle Disposition Program Assignment
Agreement, substantially in the form attached as Exhibit E hereto, or in such
other form as is acceptable to each Rating Agency, between either Thrifty
Finance or Thrifty, as assignor and the Master Collateral Agent, as assignee,
and acknowledged by the applicable Manufacturer, pursuant to which Thrifty
Finance or Thrifty will assign to the Master Collateral Agent all of its right,
title and interest in, to and under each Vehicle Disposition Program described
therein, to the extent related to the Master Collateral Vehicles.
"Auction" means the set of procedures specified in a Vehicle Disposition
Program for sale or disposition of Program Vehicles through auctions and at
auction sites designated by such Vehicles' Manufacturer pursuant to such Vehicle
Disposition Program.
"Bankruptcy Code" means The Bankruptcy Reform Act of 1978, as amended from
time to time, and as codified as 11 U.S.C. Section 101 et seq.
"Beneficiary" has the meaning set forth in the preamble.
"BOK" means the Bank of Oklahoma, National Association, a national banking
association.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banking institutions in New York, New York, Tulsa, Oklahoma and
in the city in which the
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<PAGE> 6
Corporate Trust Office is located are authorized or obligated by law or
executive order to be closed. The attached Exhibit F, to be updated each
December 31st by the Servicer, lists the bank holidays in New York, New York and
Tulsa, Oklahoma.
"Capitalized Cost" means, with respect to Master Collateral Vehicle, the
Initial Acquisition cost of such Master Collateral Vehicle, less any Incentive
Payments used to reduce the Initial Acquisition cost of such Vehicle, in
accordance with the applicable Manufacturer incentive program or generally
accepted accounting principles, and due from the Manufacturer with respect to
such Master Collateral Vehicle.
"Certificate of Title" means, with respect to each Master Collateral
Vehicle, the certificate of title applicable to such Master Collateral Vehicle
duly issued in accordance with the certificate of title act or statute of the
jurisdiction applicable to such Master Collateral Vehicle.
"Chrysler" means Chrysler Corporation, a Delaware corporation.
"Closing Date" means December 21, 1995.
"Corporate Trust Office" means the principal corporate trust office of the
Master Collateral Agent, located, on the date of the execution of this
Agreement, at 4 Albany Street, 10th Floor, New York, New York 10006, Attn:
Corporate Trust and Agency Group Attn: (Structured Finance) or at such other
address as the Master Collateral Agent may designate from time to time by notice
to Thrifty.
"Default" means any event of default or amortization event or any default
or any event, act or condition which with the lapse of time or notice or both
would become an event of default or amortization event (other than any scheduled
amortization event) under any of the Financing Documents.
"Depreciation Charge" means with respect to any Master Collateral Vehicle
which is a Related Vehicle of a Beneficiary, Depreciation Charge as defined in
the Financing Documents related to such Beneficiary, and if Depreciation Charge
is not defined in such Financing Documents, "Depreciation Charge" means, for any
date of determination, (a) with respect to any Program Vehicle, the scheduled
daily depreciation charge set forth by the Manufacturer in its Vehicle
Disposition Program for such Master Collateral Vehicle calculated as set forth
in such Vehicle Disposition Program, and (b) with respect to any Non-Program
Vehicle, the scheduled daily depreciation charge for such Master Collateral
Vehicle set forth by the Servicer in the Depreciation Schedule for such Master
Collateral Vehicle. If such charge is
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<PAGE> 7
expressed as a percentage, the Depreciation Charge for such Master Collateral
Vehicle for such day shall be such percentage multiplied by the Capitalized Cost
for such Master Collateral Vehicle.
"Depreciation Schedule" means a schedule of estimated daily depreciation
prepared by the Servicer, and revised from time to time in the Servicer's sole
discretion, with respect to each type of Non-Program Vehicle that is a Master
Collateral Vehicle.
"Determination Date" means the fifth Business Day prior to the
twenty-fifth (25th) day of each calendar month.
"Disposition Date" means:
(a) with respect to any Program Vehicle, (i) if such Vehicle was
sold at Auction or returned to a Manufacturer for repurchase, pursuant to
the applicable Vehicle Disposition Program, the date on which such Program
Vehicle is sold at Auction or accepted for return by such Manufacturer or
its agent and, in each case, the Depreciation Charges ceased to accrue
pursuant to such Vehicle Disposition Program, or (ii) if such Program
Vehicle was sold to any Person (other than to a Manufacturer pursuant to
such Manufacturer's Vehicle Disposition Program or to a third party
through an Auction conducted by or through or arranged by the Manufacturer
pursuant to its Vehicle Disposition Program), the date on which title to
the Master Collateral Vehicle is transferred in connection with such sale,
and
(b) with respect to any Non-Program Vehicle, the date on which title
to the Master Collateral Vehicle is transferred in connection with such
sale.
"Disposition Period" means, with respect to any Master Collateral Vehicle,
the period between the minimum holding period (prior to which Thrifty may not
return such Master Collateral Vehicle without a penalty) and the maximum holding
period (after which Thrifty may not return such Master Collateral Vehicle
without a penalty) specified in the related Vehicle Disposition Program.
"Disposition Proceeds" means the net proceeds from the sale or disposition
of a Master Collateral Vehicle to any Person.
"Eligible Vehicle" means a Master Collateral Vehicle meeting the
requirements for, as applicable, acquisition, financing, refinancing and/or
leasing under the Financing Documents relating thereto.
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<PAGE> 8
"Eligible Vehicle Disposition Program" means a Vehicle Disposition Program
offered by an Eligible Manufacturer that meets the eligibility criteria
specified in the Financing Documents relating thereto.
"Existing Fleet" means Master Collateral Vehicles owned by Thrifty prior
to the commencement of this Agreement.
"FDIC" means the Federal Deposit Insurance Corporation.
"Financing Documents" means any and all agreements, instruments and
contracts evidencing or related to any financing arrangements between Thrifty or
Thrifty Finance and a Financing Source providing for the making of loans to
Thrifty or Thrifty Finance, the purchase of assets or undivided interests in
assets, the lease to Thrifty of Master Collateral Vehicles, or any other
arrangement providing for the financing of Master Collateral Vehicles, as the
same may be amended, supplemented, extended or otherwise modified from time to
time in accordance with their respective terms.
"Financing Source" means any party to this Agreement designated as a
"Financing Source" on the signature page hereof or added as a Financing Source
party hereto by the execution and delivery of a Supplement.
"Fitch" means Fitch Investors Service, L.P.
"Fleet Report" means the monthly report substantially in the form of
Exhibit B hereto required to be delivered by the Servicer to the Master
Collateral Agent pursuant to Section 2.4 hereof.
"Franchise Agreement" means a franchise agreement, license agreement or
other similar agreement (however designated) between Thrifty and a Franchisee in
connection with the operation of a rental car business and related business
activities in a designated territory using the Thrifty name and marks, whether
now existing or hereafter made or entered into, including any amendments,
modifications or supplements thereto or restatements thereof, but excluding any
Sublease.
"Franchisee" means any Person licensed under a Franchise Agreement.
"Guaranteed Payment" means a payment from the applicable Manufacturer
pursuant to such Manufacturer's Vehicle Disposition Program, upon disposition of
such Master Collateral Vehicle by the owner thereof at an Auction.
"Incentive Payment", with respect to any Program Vehicle or Non-Program
Vehicle subject to any form of incentive program maintained by the Manufacturer
thereof, means a payment (other
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<PAGE> 9
than a Guaranteed Payment or a Repurchase Payment) from such Manufacturer,
pursuant to and in accordance with the terms and conditions of such an incentive
program relating to such Program Vehicle or Non-Program Vehicle.
"Incumbency Certificate" has the meaning set forth in Section 3.5.
"Indenture" means the Base Indenture, dated as of December 13, 1995,
between Thrifty Finance and Bankers Trust Company, as trustee, as the same may
be amended, modified or supplemented from time to time in accordance with its
terms, together with all of its supplements, as the same may be amended,
modified or supplemented from time to time in accordance with the terms of the
Indenture.
"Initial Acquisition Cost" means, with respect to each Master Collateral
Vehicle, the costs and expenses incurred in connection with the acquisition of
such Master Collateral Vehicle by Thrifty or Thrifty Finance from the dealer
selling such Master Collateral Vehicle, as more specifically defined in the
Financing Documents related to the applicable Financing Source.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Investment Standing Instruction" has the meaning set forth in Section
2.5(f) hereof.
"Lease" means the Master Motor Vehicle Lease and Servicing Agreement, as
supplemented by the lease annexes, dated as of December 13, 1995, by and between
Thrifty Finance, as the lessor and Thrifty, in its capacity as lessee and as
servicer.
"Lien" means, when used with respect to any Person, any interest in any
real or personal property, asset or other right held, owned or being purchased
or acquired by such Person which secures payment or performance of any
obligation, and shall include any mortgage, lien, pledge, encumbrance, charge,
retained security title of a conditional vendor or lessor, or other security
interest of any kind, whether arising under a security agreement, mortgage,
lease, deed of trust, chattel mortgage, assignment, pledge, retention or
security title, financing or similar statement, or notice or arising as a matter
of law, judicial process or otherwise.
"Manufacturer" means a manufacturer of Master Collateral Vehicles.
"Master Collateral" has the meaning set forth in Section 2.1(b).
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"Master Collateral Account" has the meaning set forth in Section 2.5.
"Master Collateral Agent" has the meaning set forth in the preamble, and
includes any permitted successor to Bankers Trust Company in its capacity as
Master Collateral Agent.
"Master Collateral Vehicles" means the Thrifty Master Collateral Vehicles
and the Thrifty Finance Master Collateral Vehicles.
"Net Book Value" means, with respect to any Master Collateral Vehicle, as
of any date of determination, the Capitalized Cost of such Master Collateral
Vehicle minus the aggregate Depreciation Charges accrued with respect to such
Master Collateral Vehicle through the last day of the Related Month and/or as
more specifically calculated in accordance with the Financing Documents for the
related Financing Source.
"Non-Program Vehicle" means a Master Collateral Vehicle that, when
acquired by Thrifty Finance or Thrifty from a Manufacturer eligible under the
related Financing Documents or when so designated by the Servicer, in each case
subject to certain limitations described in the applicable Financing Documents,
is not eligible for inclusion in any Eligible Vehicle Disposition Program.
"Notes" means the notes issued by Thrifty Finance pursuant to the
Indenture.
"Officer's Certificate" means, with respect to any Person, a certificate
signed by the President, any Vice President, the Secretary, the Treasurer or any
other person designated as an authorized officer by the board of directors of
such Person.
"Permitted Investments" means negotiable instruments or securities
maturing on or before the Payment Date next occurring after the investment
therein, represented by instruments in bearer, registered or book-entry form
which evidence (i) obligations the full and timely payment of which are to be
made by or is fully guaranteed by the United States of America; (ii) demand
deposits of, time deposits in, or certificates of deposit issued by, any
depositary institution or trust company incorporated under the laws of the
United States of America or any state thereof and subject to supervision and
examination by Federal or state banking or depositary institution authorities;
provided, however, that at the earlier of (x) the time of the investment and (y)
the time of the contractual commitment to invest therein, the certificates of
deposit or short-term deposits, if any, or long-term unsecured debt obligations
(other than such obligation whose rating is based on collateral or on
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the credit of a Person other than such institution or trust company) of such
depositary institution or trust company shall have a credit rating from Standard
& Poor's of "A-1+" and from Fitch of at least "F-1" (if rated by Fitch), in the
case of certificates of deposit or short-term deposits, or a rating from
Standard & Poor's of at least "AA" and from Fitch of at least "A" (if rated by
Fitch), in the case of long-term unsecured debt obligations; (iii) commercial
paper having, at the earlier of (x) the time of the investment and (y) the time
of the contractual commitment to invest therein, a rating from Standard & Poor's
of "A-1+" and from Fitch of at least "F-1" (if rated by Fitch); (iv) demand
deposits or time deposits which are fully insured by the FDIC; (v) bankers'
acceptances issued by any depositary institution or trust company described in
clause (ii) above; (vi) investments in money market funds rated at least "AAm"
by Standard & Poor's or otherwise approved in writing by Standard & Poor's and
rated at least "A" by Fitch (if rated by Fitch); (vii) Eurodollar time deposits
having a credit rating from Standard & Poor's of "A-1+" and from Fitch of at
least "F-1" (if rated by Fitch); (viii) repurchase agreements involving any of
the Permitted Investments described in clauses (i) and (vii) above and the
certificates of deposit described in clause (ii) above which are entered into
with a depository institution or trust company having a commercial paper or
short-term certificate of deposit rating of "A-1+" by Standard & Poor's and of
at least "F-1" from Fitch (if rated by Fitch) or which otherwise is approved as
to collateralization by the Rating Agencies; and (ix) any other instruments or
securities, if the Rating Agencies confirm in writing that the investment in
such instruments or securities will not adversely affect any ratings with
respect to any series of Notes.
"Person" means any natural person, corporation, business trust, joint
venture, association, company, partnership, joint stock company, trust,
unincorporated organization, or any Federal, state, local or foreign court or
governmental department, commission, board, bureau, agency, authority,
instrumentality or regulatory body.
"Program Vehicle" means any Master Collateral Vehicle which, at the time
of its acquisition by Thrifty or Thrifty Finance or any other Financing Source
under the applicable Financing Documents, is eligible under an Eligible Vehicle
Disposition Program offered by its Manufacturer.
"Pro rata" means, at any time as to any interest or amount with respect to
any Beneficiary, a fraction, the numerator of which is the aggregate
indebtedness and other obligations of each of Thrifty and Thrifty Finance, as
applicable, then owing to the applicable Financing Source for the benefit of
such Beneficiary and the denominator of which is the aggregate indebtedness and
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other obligations of each of Thrifty and Thrifty Finance, as applicable, then
owing to all Financing Sources; provided, however, that if a Beneficiary must
return any amount paid with respect to such obligations for any reason, such
returned amounts shall be reinstated as obligations for purposes of the
foregoing calculation.
"Qualified Institution" means a depositary institution or trust company
(which may include the Master Collateral Agent) organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia; provided, however, that at all times such depositary institution or
trust company is a member of the FDIC and (i) has a long-term indebtedness
rating from Standard & Poors of not lower than "AA" and from Fitch of not lower
than "A" and a short-term indebtedness rating from Standard & Poor's of not
lower than "A-1+" and from Fitch of not lower than "F-1", or (ii) has such
other rating which has been approved by the Rating Agencies, or (iii) is
otherwise approved by the Rating Agencies.
"Rating Agencies" means, at any time of determination, any rating agency,
to the extent such agency, at the request of Thrifty or Thrifty Finance pursuant
to the applicable Financing Documents, is then rating the outstanding securities
or indebtedness of any Financing Source.
"Redesignation" has the meaning set forth in Section 2.2.
"Related Master Collateral" has the meaning set forth in Section 2.2.
"Related Month" means, with respect to any date, the period from and
including the first day of the calendar month preceding the month in which such
date falls, to and including the last day of such calendar month; provided,
however, that (for all purposes other than determining Depreciation Charges) the
initial Related Month shall also include the period from and including the date
of issuance of the first series of Notes to and including the last day of the
calendar month in which the issuance of the first series of Notes occurs.
"Related Vehicles" has the meaning set forth in Section 2.2.
"Reporting Date" means the Business Day next succeeding the Determination
Date.
"Repurchase Payment", with respect to any Program Vehicle subject to
repurchase by the Manufacturer thereof, means a payment by such Manufacturer,
pursuant to the Manufacturer's Vehicle Disposition Program, to repurchase such
Vehicle in accordance with its Vehicle Disposition Program.
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"Required Beneficiaries" means, at any time, Beneficiaries (other than
Thrifty, if applicable) that are beneficiaries in respect of, or that represent
or act on behalf of Financing Sources (other than Thrifty, if applicable) that
hold (including by way of pledge or assignment), more than 50% of the
outstanding principal amount of indebtedness of Thrifty or Thrifty Finance under
the Financing Documents at such time (excluding any retained interest of Thrifty
or Thrifty Finance thereunder).
"Responsible Officer" means, with respect to the Master Collateral Agent,
any Managing Director, Vice President, Assistant Vice President, Secretary,
Assistant Secretary, Treasurer or Assistant Treasurer, or any officer performing
functions similar to those customarily performed by the person who at the time
shall be such officer.
"Servicer" has the meaning set forth in the preamble.
"Standard & Poor's" means Standard & Poor's Structured Ratings, a division
of the McGraw-Hill Companies, Inc.
"Sublease" means a standardized lease agreement, for the leasing of Master
Collateral Vehicles, between Thrifty, as lessor, and a Franchisee of Thrifty
that meets the normal credit and other approval criteria of Thrifty and which
may be an affiliate of Thrifty, as lessee.
"Supplement" means a supplement to this Agreement, substantially in the
form of Exhibit A hereto.
"Thrifty" has the meaning set forth in the preamble.
"Thrifty Agents" has the meaning set forth in Section 3.5.
"Thrifty Finance" has the meaning set forth in the preamble.
"Thrifty Finance Master Collateral" has the meaning set forth in Section
2.1(b).
"Thrifty Finance Master Collateral Vehicles" has the meaning set forth in
Section 2.1(b)(i).
"Thrifty Master Collateral" has the meaning set forth in Section 2.1(a).
"Thrifty Master Collateral Vehicles" has the meaning set forth in Section
2.1(a)(i).
"Trustee" means Bankers Trust Company in its capacity as trustee under the
Indenture unless a successor Person shall have become the trustee pursuant to
the applicable provisions of the
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Indenture, and thereafter "Trustee" shall mean such successor Person.
"Uniform Commercial Code" or "UCC" means, with respect to a particular
jurisdiction, the Uniform Commercial Code as in effect from time to time in such
jurisdiction, or any successor statute thereto.
"Vehicle Disposition Program" means a program pursuant to which a
Manufacturer has agreed, subject to the terms and conditions thereof, to
guarantee the maximum daily depreciation levels of, or to repurchase, Master
Collateral Vehicles manufactured by it or one of its Affiliates during the
specified Disposition Period.
"Vehicle Term", with respect to each Master Collateral Vehicle, will have
the meaning set forth in the Financing Documents for the Financing Source with
respect to such Master Collateral Vehicle.
SECTION 1.2. Cross References; Headings. The words "hereof", "herein" and
"hereunder" and words of a similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Annex, Section, Schedule and Exhibit references contained in this
Agreement are references to Annexes, Sections, Schedules and Exhibits in or to
this Agreement unless otherwise specified. Any reference in any Section or
definition to any clause is, unless otherwise specified, to such clause of such
Section or definition. The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
SECTION 1.3. Interpretation. In this Agreement, unless the context
otherwise requires:
(a) the singular includes the plural and vice versa;
(b) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to any Person in a particular
capacity only refers to such Person in such capacity;
(c) reference to any gender includes the other gender;
(d) "including" (and, with correlative meaning, "include") means
including without limiting the generality of any description preceding
such term;
(e) "or" is not exclusive;
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(f) provisions apply to successive events and transactions; and
(g) with respect to the determination of any period of time, "from"
means "from and including" and "to" and "through" mean "to but excluding".
ARTICLE II
MASTER COLLATERAL AGENT AS LIENHOLDER
FOR THE BENEFICIARIES
SECTION 2.1. Security Interest.
(a) Grant by Thrifty. As security for the payment of the respective
obligations from time to time owing by Thrifty to each Financing Source (or any
Beneficiary as assignee thereof) under the related Financing Documents, Thrifty
hereby grants, pledges and assigns to the Master Collateral Agent, for the
benefit of the Beneficiaries (to the extent set forth in Sections 2.2 and 2.3),
subject to the provisions of subsection (c) below, a continuing, first priority
Lien on all right, title and interest of Thrifty in, to and under the following,
whether now or hereafter existing or acquired (the "Thrifty Master Collateral"):
(i) all vehicles (A) acquired, financed or refinanced with funds
provided by any Financing Source or Beneficiary and identified as Thrifty
Master Collateral Vehicles in any Fleet Reports delivered to the Master
Collateral Agent and/or (B) identified as being owned by Thrifty and
subject to the lien of the Master Collateral Agent in each case on the
Certificates of Title thereof (collectively, the "Thrifty Master
Collateral Vehicles"), and all Certificates of Title with respect thereto;
(ii) the Master Collateral Account, all funds on deposit therein
from time to time, all certificates and instruments, if any, representing
or evidencing any or all of the Master Collateral Account or the funds on
deposit therein from time to time, and all Permitted Investments made at
any time and from time to time with the funds on deposit in the Master
Collateral Account (including income thereon) and all certificates and
instruments, if any, representing or evidencing such Permitted
Investments;
(iii) all Vehicle Disposition Programs and incentive programs
applicable to Thrifty Master Collateral Vehicles, to the extent such
right, title and interest relates to such Thrifty Master Collateral
Vehicles, including any amendments thereof and all monies due and to
become due in respect of
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such Thrifty Master Collateral Vehicles under or in connection with each
such Vehicle Disposition Program and incentive program, whether payable as
Repurchase Payments, Guaranteed Payments, Disposition Proceeds, Incentive
Payments, auction sales proceeds, fees, expenses, costs, indemnities,
insurance recoveries, damages for breach of any Vehicle Disposition
Program or otherwise and all rights to compel performance and otherwise
exercise rights and remedies thereunder;
(iv) all Subleases entered into by Thrifty the subject of which
includes any Master Collateral Vehicle leased by Thrifty Finance to
Thrifty under the Lease, and all other contracts, agreements, guarantees,
insurance, warranties, instruments or certificates entered into or
delivered to Thrifty in connection with any such Sublease, in each case
only to the extent directly relating to any Master Collateral Vehicle,
including (but only to such extent), without limitation, all monies due
and to become due to Thrifty under or in connection with such agreements
whether payable as rent, guaranty payments, fees, expenses, costs,
indemnities, insurance recoveries, damages for the breach of any of the
agreements or otherwise, and all rights, remedies, powers, privileges and
claims of Thrifty against any other party under or with respect to such
agreements (whether arising pursuant to the terms of such agreements or
otherwise available to Thrifty at law or in equity), including the right
to enforce any of the agreements as provided herein and to give or
withhold any and all consents, requests, notices, directions, approvals,
extensions or waivers under or with respect to the agreements or the
obligations of any party thereunder, all liens and property from time to
time purporting to secure payment arising under or in connection with such
agreements, or assigned to, Thrifty describing any collateral securing
such obligations or liabilities and all guarantees, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such obligations and liabilities due to
Thrifty pursuant to such agreements);
(v) all Assignment Agreements entered into by Thrifty;
(vi) all payments under insurance policies (whether or not the
Master Collateral Agent is named as the loss payee thereof) with respect
to, and all warranties payable by reason of loss or damage to, or
otherwise with respect to, any of the Thrifty Master Collateral Vehicles;
(vii) all additional property that may on the Closing Date or from
time to time hereafter be subjected to the
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grant and pledge under this Agreement, as the same may be modified or
supplemented from time to time, by Thrifty or by anyone on its behalf; and
(viii) any and all proceeds, products, offspring, rents or profits
of any and all of the foregoing.
(b) Grant by Thrifty Finance. As security for the payment of the
respective obligations from time to time owing by Thrifty Finance to each other
Financing Source (or any Beneficiary as assignee thereof) under the related
Financing Documents, Thrifty Finance hereby grants, pledges and assigns to the
Master Collateral Agent, for the benefit of the Beneficiaries (to the extent set
forth in Sections 2.2 and 2.3), a continuing, first priority Lien on all right,
title and interest of Thrifty Finance in, to and under the following, whether
now or hereafter existing or acquired (the "Thrifty Finance Master Collateral"
and, together with the Thrifty Master Collateral, the "Master Collateral"):
(i) all vehicles (A) acquired, financed or refinanced with funds
provided by any Financing Source or Beneficiary and identified as Thrifty
Finance Master Collateral Vehicles in any Fleet Report delivered to the
Master Collateral Agent and/or (B) identified as being owned by Thrifty
Finance and subject to the lien of the Master Collateral Agent on the
Certificates of Title thereof (collectively, the "Thrifty Finance Master
Collateral Vehicles"), and all Certificates of Title with respect thereto;
(ii) the Master Collateral Account, all funds on deposit therein
from time to time, all certificates and instruments, if any, representing
or evidencing any or all of the Master Collateral Account or the funds on
deposit therein from time to time, and all Permitted Investments made at
any time and from time to time with the funds on deposit in the Master
Collateral Account (including income thereon) and all certificates and
instruments, if any, representing or evidencing such Permitted
Investments;
(iii) all Vehicle Disposition Programs and incentive programs
applicable to the Thrifty Finance Master Collateral Vehicles to the extent
such right, title and interest relates to such Thrifty Finance Master
Collateral Vehicles, including any amendments thereof and all monies due
and to become due in respect of such Thrifty Finance Master Collateral
Vehicles under or in connection with each such Vehicle Disposition
Program, whether payable as Repurchase Payments, Guaranteed Payments,
Disposition Proceeds, Incentive Payments, auction sales proceeds, fees,
expenses, costs, indemnities, insurance recoveries, damages for breach
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of the Vehicle Disposition Program or otherwise and all rights to compel
performance and otherwise exercise rights and remedies thereunder;
(iv) all Assignment Agreements entered into by Thrifty Finance;
(v) all payments under insurance policies (whether or not the Master
Collateral Agent is named as the loss payee thereof) with respect to, and
all warranties payable by reason of loss or damage to, or otherwise with
respect to, any of the Master Collateral Vehicles;
(vi) all additional property that may on the Closing Date or from
time to time hereafter be subjected to the grant and pledge under this
Agreement, as the same may be modified or supplemented from time to time,
by Thrifty or by anyone on its behalf; and
(vii) any and all proceeds, products, offspring, rents, or profits
of any of the foregoing.
Thrifty, Thrifty Finance, each other Financing Source and each Beneficiary
hereby authorizes the Master Collateral Agent to be named as the first
lienholder on the Certificates of Title for the Master Collateral Vehicles
(other than the Existing Fleet), in a representative capacity, as Master
Collateral Agent for the Beneficiaries. The Master Collateral Agent agrees that
all of its right, title and interest in and to the Master Collateral shall be
solely for the respective benefit of each Beneficiary.
Each Financing Source and each Beneficiary hereby directs the Master Collateral
Agent to execute and deliver as of the date hereof in its capacity as Master
Collateral Agent hereunder the Chrysler Assignment Agreement. Each Financing
Source and each Beneficiary hereby directs the Master Collateral to execute and
deliver as of the date set forth therein in its capacity as Master Collateral
Agent hereunder each additional Assignment Agreement hereafter entered into by
Thrifty Finance or Thrifty.
(c) Exclusions. Notwithstanding the provisions of Section 2.1(a), it is
expressly acknowledged and agreed that the Thrifty Master Collateral does not
and shall not in any event include any of the following items or types of
property:
(i) any Franchise Agreement, or any monies due or to become due to
Thrifty under any Franchise Agreement, including, without
limitation, monies due or to become due to Thrifty on account of,
relating to or in connection with (a) administrative fees,
advertising fees and license or franchise fees under or in
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connection with any Franchise Agreements, (b) the grant, transfer,
sale or other disposition, in whole or in part, of any Franchise
Agreement, (c) the sale, lease or other offering by Thrifty of
goods, supplies or products (excluding, however, Master Collateral
Vehicles) to any Franchisee or the performance of services by
Thrifty for any Franchisee, (d) insurance programs for Franchisees
offered under or in connection with any Franchise Agreement, (e)
credit card services provided in connection with any Franchise
Agreement, and (f) promissory notes delivered pursuant to or in
connection with any Franchise Agreement, or any other accounts,
general intangibles, chattel paper, documents and instruments
relating to or arising out of or in connection any Franchise
Agreement;
(ii) any advertising or promotional allowances payable to
Thrifty by any Manufacturer; or
(iii) any monies due or to become due to any Franchisee or
Affiliate of Thrifty from the retail rental of vehicles;
Each Financing Source and each Beneficiary hereby disclaims and affirmatively
waives any right, title or interest in and to any of the foregoing items or
types of property under or pursuant to this Agreement.
SECTION 2.2. Designation of Beneficiaries; Beneficiaries' Rights Limited.
Each of the Trustee, Thrifty Finance and any other Person who from time to time
executes a Supplement as a beneficiary is hereby designated as a Beneficiary
with respect to the Master Collateral Vehicles designated on the Servicer's
computer system as Master Collateral Vehicles acquired by or financed with the
proceeds advanced by the Financing Source relating to such Beneficiary or as
otherwise provided in a Supplement with respect to such Beneficiary ("Related
Vehicles") and the other Master Collateral related thereto (the "Related Master
Collateral"). The designation of Related Vehicles with respect to each
Beneficiary on the Servicer's computer system shall be considered prima facie
evidence of such Beneficiary's rights with respect to such Related Vehicles and
the Related Master Collateral. If at any time a Beneficiary reasonably believes
that such designation by the Servicer is incorrect, it may dispute such
designation by delivering a written notice to the Master Collateral Agent
setting forth its claim as to the correct designation of its Related Vehicles
(each a "Redesignation"). The Master Collateral Agent shall, promptly upon
receipt of such notice, distribute a copy thereof to Thrifty, each Financing
Source and each Beneficiary (other than the Beneficiary disputing the Servicer's
designation of Related
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Vehicles). Each such Financing Source and Beneficiary shall, within ten (10)
Business Days of receipt of such notice from the Master Collateral Agent, notify
the Master Collateral Agent in writing as to whether it consents to the
disputing Beneficiary's Redesignation. If the Master Collateral Agent receives
written notice from each such Beneficiary and Financing Source containing its
consent to the disputing Beneficiary's Redesignation within the period set forth
above, it shall promptly notify the Servicer and the Servicer shall effect such
Redesignation. Each Beneficiary shall be entitled to the benefits of this
Agreement only with respect to its Related Vehicles and Related Master
Collateral. No Beneficiary shall have any interest in (i) any Master Collateral
Vehicle which is not a Related Vehicle as to such Beneficiary, (ii) any funds in
the Master Collateral Account that are proceeds of any Master Collateral Vehicle
which is not a Related Vehicle as to such Beneficiary, (iii) rights under any
Vehicle Disposition Program with respect to any Master Collateral Vehicle which
is not a Related Vehicle as to such Beneficiary or (iv) any other Master
Collateral which is not Related Master Collateral as to such Beneficiary, in
each case regardless of the time, order, manner or nature of attachment or
perfection of security interests in Master Collateral Vehicles (including the
giving of or failure to give notice of any purchase money security interest or
other notice, or the order of filing financing statements), or any provision of
the Uniform Commercial Code, the federal Bankruptcy Code, or other applicable
law.
SECTION 2.3. Redesignation of Beneficiaries. Each of Thrifty Finance, with
respect to the Thrifty Finance Master Collateral Vehicles, and Thrifty, with
respect to the Thrifty Master Collateral Vehicles, may from time to time
refinance Master Collateral Vehicles related to a particular Financing Source
with proceeds from a different Financing Source. In connection therewith, the
Servicer shall designate on its computer system the Financing Source the
proceeds of which are used to finance or refinance such Master Collateral
Vehicles, and, upon repayment of the Financing Source being refinanced, (x) such
Master Collateral Vehicles shall automatically constitute Related Vehicles of
the specified Beneficiary related to such refinancing Financing Source, and (y)
such Master Collateral Vehicles shall cease to be Related Vehicles of the
Beneficiary related to the refinanced Financing Source. In addition, the
Servicer may from time to time redesignate on its computer system, to a new
Beneficiary related to a Financing Source, one or more Master Collateral
Vehicles that are Related Vehicles of another Beneficiary related to such
Financing Source. Notwithstanding the foregoing, the right of the Servicer to
redesignate Master Collateral Vehicles that will, after such a refinancing,
cease to be Related Vehicles with respect to a Beneficiary shall be subject to
the conditions that immediately after giving effect to such redesignation:
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(a) no Default shall exist under the Financing Documents related to
such Beneficiary (provided, however, that the Servicer shall have the
right to make such redesignation for the purpose of curing such a
Default); and
(b) such Beneficiary shall have designated to it Related Vehicles
with a collateral value (as determined, in accordance with the Financing
Documents relating to the Financing Source with respect to such
Beneficiary, by the Person specified therein or, if no such Person is so
specified, by the Servicer) not less than the collateral value required in
such Financing Documents to support the outstanding loans or securities
issued under such Financing Documents.
Each designation of a Beneficiary pursuant to Section 2.2, and each
redesignation by the Servicer pursuant to this Section 2.3, shall automatically
constitute a representation and warranty by the Servicer for the benefit of the
Beneficiary to which the Master Collateral Vehicle is being designated or
redesignated that (a) with respect to such a redesignation, the conditions in
Sections 2.3(a) and 2.3(b) have been met, (b) with respect to such a
redesignation, the loans or securities of the original Financing Source with
respect to such refinanced Master Collateral Vehicles have been repaid, and (c)
with respect to any such designation or redesignation, all Related Vehicles of
such Beneficiary constitute Eligible Vehicles under the relevant Financing
Documents. Master Collateral Vehicles shall be redesignated hereunder at their
respective Net Book Values, calculated in accordance with the Financing
Documents relating to the Financing Source with respect to the applicable
Beneficiary. Except as provided in Section 2.5(c), no Beneficiary shall have any
interest in any Master Collateral Vehicle or other Master Collateral for which
it is no longer designated as the Beneficiary, it being understood that, subject
to the satisfaction of the conditions set forth in Sections 2.3(a) and 2.3(b)
and repayment of the loans or securities of the original Financing Source with
respect to refinanced Master Collateral Vehicles, any such redesignation shall
automatically constitute a release by such Beneficiary of any interest therein.
SECTION 2.4. Servicer's Fleet Report. On or prior to the Reporting Date,
the Servicer shall furnish to the Master Collateral Agent a report (which may be
on diskette, magnetic tape or other electronic medium acceptable to the Master
Collateral Agent) substantially in the form of Exhibit B ("Fleet Report"),
showing for each Financing Source and each Related Vehicle designated thereto,
as of the last day of the immediately preceding calendar month and after giving
effect to the most recent redesignation of Master Collateral Vehicles (i) the
related Beneficiary in respect thereof, (ii) whether such Related
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Vehicle is a Thrifty Master Collateral Vehicle or a Thrifty Finance Master
Collateral Vehicle, (iii) the last eight digits of the vehicle identification
numbers with respect to such Related Vehicle, and (iv) the Capitalized Cost and
Net Book Value of such Related Vehicle (calculated in accordance with the
Financing Documents relating to the applicable Financing Source). The Master
Collateral Agent shall make the Fleet Report available for inspection by any
Financing Source or Beneficiary at the Corporate Trust Office, during normal
business hours, upon such Financing Source or Beneficiary's written request.
Each Fleet Report shall, upon delivery thereof to the Master Collateral Agent,
become Exhibit B hereto and shall replace and supersede all prior Fleet Reports
in such capacity. The Master Collateral Agent's sole responsibility with respect
to such Fleet Report shall be custodial.
SECTION 2.5. Master Collateral Account. (a) The Master Collateral Agent
shall establish and maintain, or cause to be established and maintained, in the
name of Master Collateral Agent for the benefit of the Beneficiaries, one or
more accounts (collectively, the "Master Collateral Account"), each bearing a
designation clearly indicating that the funds deposited therein are held for the
respective benefit of each Beneficiary and, in each case, as to which sole
dominion and control shall be vested in the Master Collateral Agent. The Master
Collateral Account shall be maintained (i) with one or more Qualified
Institutions, or (ii) as segregated trust accounts with the corporate trust
departments of depository institutions or trust companies having corporate trust
powers so long as each such institution has a credit rating for its unsecured
long-term debt not lower than investment grade by Standard & Poor's. If the
Master Collateral Account (or any subaccount thereof) is not maintained in
accordance with the previous sentence, then within ten (10) Business Days after
a Responsible Officer has received written notice from any related Beneficiary
or Financing Source to establish a new Master Collateral Account or subaccount
thereof or has actual notice followed by written confirmation (which
confirmation the Master Collateral Agent shall use its best efforts to obtain as
soon as practicable at the request of the related Beneficiary or Financing
Source) of such fact, the Master Collateral Agent shall establish a new Master
Collateral Account (or a new subaccount) which complies with such sentence and
transfer into the new Master Collateral Account (or subaccount) all funds from
the non-qualifying Master Collateral Account (or subaccount). Initially, the
Master Collateral Account will be established with BOK and Bankers Trust
Company.
(b) The Servicer and the Financing Sources shall direct all payments
representing (i) Disposition Proceeds, (ii) Guaranteed Payments and Repurchase
Payments under Vehicle Disposition Programs, (iii) Incentive Payments under
incentive programs, (iv)
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all payments under the Subleases and (v) all other payments or other proceeds
arising from the Master Collateral to be deposited directly into the Master
Collateral Account. In the event that the Servicer or any Financing Source shall
receive directly any such payments or proceeds, including cash, securities,
obligations or other property, the Servicer or the Financing Source, as the case
may be, shall accept in constructive trust for the Master Collateral Agent, and
hold and deposit into the Master Collateral Account at Bankers Trust Company
within two (2) Business Days of receipt thereof, any of the foregoing payments
or proceeds received directly by the Servicer or such Financing Source in
respect of the Master Collateral, with the endorsement or other evidence of
transfer of the Servicer or the Financing Source, as the case may be, when
necessary or appropriate. Each of Thrifty Finance and Thrifty shall designate
the Master Collateral Agent as loss payee on its physical damage and
comprehensive insurance policies on the Master Collateral Vehicles. The Master
Collateral Agent shall, within one (1) Business Day after the receipt thereof,
notify the Servicer when funds are deposited in the Master Collateral Account
and the amount of such funds and promptly thereafter, but in no event more than
two (2) Business Days after the receipt of such notice from the Master
Collateral Agent, the Servicer shall instruct the Master Collateral Agent in
writing (upon which instruction the Master Collateral Agent is entitled to
conclusively rely) with respect to funds received hereunder as to (i) the
aggregate amount thereof which represents payments or other proceeds arising
from the Related Vehicles and Related Master Collateral of each Beneficiary,
(ii) upon the occurrence and during the continuance of a Default and as needed
under clause (c) or (d) below or, in the sole judgement of the Servicer, as
otherwise needed, the dollar amount thereof that is derived from Thrifty Master
Collateral and from Thrifty Finance Master Collateral, (iii) the dollar amount
of Sublease payments, insurance payments, warranty payments and other payments,
as set forth below, in each case relating to Master Collateral Vehicles, which,
so long as no Default under the related Financing Documents has occurred and is
continuing or would result therefrom, may be withdrawn from the Master
Collateral Account and distributed to Thrifty, (iv) the dollar amount of funds
not constituting Master Collateral (which may be distributed at any time to the
Person entitled thereto), and (v) any additional information provided by the
Servicer pursuant to and in accordance with Section 24.4(a) of the Lease. The
Master Collateral Agent shall promptly after receipt of instructions from the
Servicer (upon which instructions the Master Collateral Agent may conclusively
rely), but in no event later than ten (10) days after any such payments or
proceeds are first received by Thrifty Finance, Thrifty, the Trustee or the
Master Collateral Agent (including by deposit in the Master Collateral Account),
distribute or cause to be distributed to each Beneficiary, in an amount
specified by the Servicer as
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provided above, the funds in the Master Collateral Account representing payments
or other proceeds arising from the Related Vehicles and Related Master
Collateral of such Beneficiary, to an account previously specified in writing by
such Beneficiary to the Master Collateral Agent; provided, however, that the
Servicer shall not direct the Master Collateral Agent to so remit any amount in
respect of Thrifty Master Collateral or Thrifty Finance Master Collateral, as
the case may be, that would exceed the amount required to pay all amounts owing
to such Beneficiary or to the Financing Source related to such Beneficiary by
Thrifty Finance or Thrifty, respectively; and provided, further, that so long as
no Default has occurred and is continuing or would result therefrom, all funds
representing (x) payments under a Sublease or under any contract, agreement,
guaranty, insurance, warranty, instrument or certificate entered into by or
delivered to Thrifty in connection with a Sublease, or (y) payments under
insurance policies or warranties payable by reason of loss or damage to, or
otherwise with respect to, any of the Master Collateral Vehicles, shall promptly
be distributed to Thrifty, to an account previously specified in writing by
Thrifty, or as Thrifty shall otherwise direct. Notwithstanding the foregoing,
the Servicer may at any time instruct the Master Collateral Agent to release any
funds not constituting Master Collateral to the Person entitled thereto.
(c) At such time as no further distributions from Thrifty to a Financing
Source, pursuant to the Financing Documents, are required or will be required to
be made to a Beneficiary in accordance with Section 2.5(b), and any applicable
bankruptcy preference period has expired, all remaining funds deposited in
respect of Thrifty Master Collateral in the Master Collateral Account and
allocated to such Beneficiary shall promptly be distributed to Thrifty upon the
written direction of the Servicer.
(d) At such time as no further distributions from Thrifty Finance to a
Financing Source, pursuant to the Financing Documents, are required or will be
required to be made to a Beneficiary in accordance with Section 2.5(b), and any
applicable bankruptcy preference period has expired, all remaining funds
deposited in respect of Thrifty Finance Master Collateral in the Master
Collateral Account and allocated to such Beneficiary shall promptly be
distributed to Thrifty Finance upon the written direction of the Servicer.
(e) If at any time the Master Collateral Agent or the Servicer shall
receive any funds to which it is not entitled pursuant to the provisions of this
Agreement, the Servicer shall so advise the Master Collateral Agent (upon which
advice the Master Collateral Agent may conclusively rely) and the Master
Collateral Agent or the Servicer, as the case may be, shall
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forthwith take reasonable steps to ensure that such funds are remitted to the
Person so entitled thereto, such remittance to be made promptly after the
determination thereof and if by the Master Collateral Agent, as directed in
writing by the Servicer.
(f) The Servicer shall instruct (upon which instruction the Master
Collateral Agent may conclusively rely) the Master Collateral Agent in writing
to invest funds on deposit in the Master Collateral Account in Permitted
Investments. If the Master Collateral Agent does not receive instructions from
the Servicer prior to 11:00 a.m., New York City time, on any day as to the
distribution or investment of any funds in the Master Collateral Account, then
the Master Collateral Agent shall invest such funds in Permitted Investments set
forth in Exhibit G, as the same may be from time to time revised by the Servicer
upon three (3) Business Days' prior written notice to the Master Collateral
Agent (the "Investment Standing Instruction"). All such investments shall be
redeemable or mature on the next Business Day. Neither the Servicer nor the
Master Collateral Agent shall be responsible for any losses incurred on any
investments made pursuant to and in accordance with this paragraph (f). The
Master Collateral Agent shall, in accordance herewith, be entitled to rely upon
the most recent Investment Standing Instruction or other written instruction
received pursuant to this Section 2.5(f).
SECTION 2.6. Certificates of Title. The Servicer shall hold all
Certificates of Title in trust, as agent of and as custodian for the Master
Collateral Agent. The Servicer shall (i) hold all such Certificates of Title
under lock and key, in a safe fireproof location at one or more of the offices
specified in Exhibit C (as the same may be from time to time revised by the
Servicer upon thirty (30) days' prior written notice to the parties hereto), and
(ii) not release or surrender any Certificate of Title except in accordance with
this Agreement (and in any event not release or surrender any of the
Certificates of Title other than Certificates of Title as to which the Lien of
the Master Collateral Agent has been released in accordance with this
Agreement). The Servicer shall cause the Certificates of Title with respect to
each Thrifty Master Collateral Vehicle (other than the Existing Fleet) to show
Thrifty, and with respect to each Thrifty Finance Master Collateral Vehicle to
show Thrifty Finance, as the registered owner thereof and to show Bankers Trust
Company, as agent (or as otherwise required under governing law to perfect the
Lien of the Master Collateral Agent), as the first lienholder at the address
referred to in the next sentence. The Master Collateral Agent has established a
post office box in New York City at an address specified in Section 5.2 hereof,
to be used as its exclusive address as first lienholder noted on the
Certificates of Title. The Master Collateral Agent shall, on a semi-weekly
basis,
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forward to Thrifty at its address set forth in Section 5.2 hereof, all
Certificates of Title received at such post office box address titled in the
name of Thrifty, and forward to Thrifty Finance at its address set forth in
Section 5.2 hereof, all Certificates of Title received at such post office box
address titled in the name of Thrifty Finance.
SECTION 2.7. Notation of Liens; Release of Collateral. (a) The Master
Collateral Agent hereby grants to the Servicer a limited power of attorney, with
full power of substitution, to take any and all actions, in the name of the
Master Collateral Agent, (i) to note the Master Collateral Agent as the holder
of a first lien on the Certificates of Title, and/or otherwise ensure that the
first Lien shown on any and all Certificates of Title (other than any
Certificates of Title relating to the Existing Fleet) is in the name of the
Master Collateral Agent, (ii) to release the Master Collateral Agent's Lien on
any Certificate of Title in connection with the sale or disposition of the
related Master Collateral Vehicle permitted pursuant to the provisions of the
Financing Documents relating to such Master Collateral Vehicle; and (iii) to
release the Master Collateral Agent's Lien on any Certificate of Title with
respect to any Master Collateral Vehicle which is not a Related Vehicle with
respect to any Beneficiary or with respect to which all obligations to the
related Beneficiary have been satisfied in full (and any applicable bankruptcy
preference period has expired). Nothing in this Agreement shall be construed as
authorization from the Master Collateral Agent to the Servicer to release any
Lien on any Certificate of Title except upon compliance with this Agreement.
(b) Each Beneficiary may cause the Master Collateral Agent to terminate
the limited power of attorney referred to in Section 2.7(a) (including the
related power granted under Section 2.8) with respect to such Beneficiary's
Related Vehicles after the occurrence, and during the continuance, of a Default
(after giving effect to any cure period or grace period) under the Financing
Documents relating to the Financing Source with respect to such Beneficiary by
giving written notice to such effect to the Servicer and the Master Collateral
Agent. The Master Collateral Agent agrees that upon receipt of any such notice
it shall promptly terminate such power of attorney with respect to such
Beneficiary's Related Vehicles by giving written notice to such effect to the
Servicer and Thrifty. The power of attorney referred to in Section 2.7(a)
(including the related power granted under Section 2.8) will also terminate
following the resignation or removal of the Master Collateral Agent pursuant to
Section 4.5. The Master Collateral Agent will follow the direction (upon which
direction the Master Collateral Agent may conclusively rely) of the Servicer to
release liens on Master Collateral Vehicles unless either a contrary direction
is
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received from a Financing Source or Beneficiary or the Financing Documents
require direction to be given by another party. In connection with any release
permitted under this Section 2.7, the Master Collateral Agent and each
Beneficiary agrees to execute such further documents, if any, as may be
reasonably requested by the Servicer to effect such release.
SECTION 2.8. Power of Attorney. To further evidence the limited power of
attorney referred to in Section 2.7, the Master Collateral Agent agrees that
upon request of the Servicer it will execute a separate power of attorney
substantially in the form of Exhibit D.
ARTICLE III
THE SERVICER
SECTION 3.1. Acceptance of Appointment. Each Financing Source and each
Beneficiary hereby appoints Thrifty, and Thrifty hereby accepts such appointment
and agrees to act, as the initial Servicer under this Agreement. The Master
Collateral Agent acknowledges such appointment.
SECTION 3.2. Servicer Functions. The Servicer shall service and administer
the Master Collateral Vehicles, and without limitation of the foregoing, the
Servicer shall: (i) cause the Master Collateral Agent to be shown as the first
lienholder on all Certificates of Title with respect to the Master Collateral
Vehicles (other than Certificates of Title relating to the Existing Fleet), (ii)
in accordance with the requirements of the Financing Documents related to a
Financing Source and as applicable thereunder, designate as Related Vehicles on
its computer system with respect to each Beneficiary related to such Financing
Source and in accordance with Sections 2.2 and 2.3 hereof, Master Collateral
Vehicles (a) that have been purchased by or purchased, financed or refinanced
with funds provided by such Financing Source or as otherwise provided in a
Supplement with respect to such Beneficiary, or (b) with a collateral value (as
determined under the relevant Financing Documents relating to the Financing
Source with respect to such Beneficiary) not less than the collateral value
required in such Financing Documents to be allocated to such Beneficiary to
support the outstanding loans or securities issued or obligations arising under
such Financing Documents, (iii) direct payments and other proceeds due under the
Vehicle Disposition Programs and payments and other proceeds with respect to
other Master Collateral to be deposited directly into the Master Collateral
Account by the Manufacturers, related auction dealers, eligible franchisees and
any other Person making such a payment, in accordance with this Agreement and
allocate such payments to the
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various Beneficiaries, (iv) furnish the Servicer's Fleet Report as provided in
Section 2.4, (v) instruct the Master Collateral Agent to make distributions,
withdrawals and payments from the Master Collateral Account in accordance with
Sections 2.5(b) through 2.5(d) in accordance with the related Financing
Documents, (vi) execute and deliver, for the benefit of the Beneficiaries, any
and all documents with respect to the Master Collateral Vehicles and the Vehicle
Disposition Programs and, to the extent permitted under and in compliance with
applicable law and regulations, commence enforcement proceedings with respect to
such Vehicle Disposition Programs,(vii) perform the functions described in
Section 2.7, and (viii) otherwise administer and service (or cause to be
administered or serviced) Master Collateral Vehicles in accordance with this
Agreement and the Financing Documents and duly perform all of its obligations
specified herein and therein. The Servicer shall have full power and authority,
acting alone or through any party properly designated by it hereunder, to do any
and all things in connection with its servicing and administration duties which
it may deem necessary or desirable to accomplish such servicing and
administration duties and which does not materially adversely affect the
interests of any Beneficiary, unless otherwise prohibited by applicable
Financing Documents or applicable law and regulations. Nothing in this Agreement
shall at any time prevent the Servicer from in good faith taking any action to
assure that its systems and records relating to the Master Collateral Vehicles
and the Financing Sources are at all times accurate.
SECTION 3.3. The Servicer Not to Resign. Without the prior written consent
of the Master Collateral Agent, each of the Financing Sources and Beneficiaries,
and the Rating Agencies, the Servicer shall not resign from the obligations and
duties imposed on it hereunder.
SECTION 3.4. Servicing Rights of Master Collateral Agent. If the Servicer
resigns or shall fail to perform any of its obligations hereunder, which failure
adversely affects one or more Beneficiaries to a material degree, the Master
Collateral Agent, at the direction and at the expense of the Beneficiaries so
adversely affected thereby, shall take such action or cause such action to be
taken (pursuant to Section 4.1(d)), to perform such obligations as shall be so
directed by such Beneficiaries, whereupon the Master Collateral Agent shall have
full right and authority to take or cause to be taken such action so directed,
provided, that, such action or direction is permitted by the related Financing
Documents or this Agreement and that the Master Collateral Agent is indemnified
to its satisfaction in connection therewith.
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SECTION 3.5. Incumbency Certificate. With the delivery of this Master
Collateral Agency Agreement and from time to time thereafter, each of Thrifty,
Thrifty Finance and the Servicer shall furnish to the Master Collateral Agent a
certificate (each, an "Incumbency Certificate") certifying as to the incumbency
and specimen signatures of officers of Thrifty and Thrifty Finance and the
Servicer, respectively (the "Thrifty Agents"), authorized to act, and to give
instructions and notices, on behalf of Thrifty, Thrifty Finance and the
Servicer, respectively, hereunder. Until the Master Collateral Agent receives a
subsequent Incumbency Certificate, the Master Collateral Agent shall be entitled
to rely on the last such Incumbency Certificate delivered to it for purposes of
determining the authorized Thrifty Agents.
ARTICLE IV
THE MASTER COLLATERAL AGENT
SECTION 4.1. Appointment. (a) Each Financing Source and each Beneficiary,
by its execution of this Agreement, appoints Bankers Trust Company as the Master
Collateral Agent under and for purposes of this Agreement. Each Financing Source
and each Beneficiary authorizes the Master Collateral Agent to act on behalf of
such Financing Source and Beneficiary under this Agreement and, in the absence
of other written instructions from a Beneficiary with respect to its Related
Vehicles and Related Master Collateral as may be received from time to time by
the Master Collateral Agent (with respect to which the Master Collateral Agent
agrees that it will comply), subject to the other provisions of this Article IV,
to exercise such powers hereunder as are specifically delegated to or required
of the Master Collateral Agent by the terms hereof and to exercise such powers
as are provided to each Financing Source and Beneficiary with respect to its
Related Vehicles and other Related Master Collateral under the related Financing
Documents, along with such powers as may be reasonably incidental thereto. The
Master Collateral Agent is hereby irrevocably appointed the true and lawful
attorney-in-fact of each of the Beneficiaries, in its name and stead, for such
purposes as are necessary or desirable to effectuate the provisions of this
Agreement, including, without limitation, in exercising remedies upon or
otherwise dealing with the Master Collateral. Each such power of attorney is
irrevocable and coupled with an interest.
(b) If and whenever a Default shall have occurred and be continuing, the
Master Collateral Agent may and, at the direction of the applicable related
Beneficiary (as provided in the next succeeding sentence) shall, exercise from
time to time any rights and remedies available to it under applicable law or any
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Financing Document. If any Beneficiary notifies the Master Collateral Agent in
writing that it or the Master Collateral Agent has the right to act with respect
to the Beneficiary's related Master Collateral pursuant to its related Financing
Documents or pursuant to the UCC as in effect in the applicable jurisdiction,
then the Master Collateral Agent, if it has been indemnified to its satisfaction
and is legally able to do so, shall exercise or arrange for the exercise of any
and all rights, remedies, powers and privileges available to such Beneficiary or
the Master Collateral Agent with respect to the Beneficiary's related Master
Collateral to the extent and in the manner directed by such Beneficiary, at such
Beneficiary's expense and subject to the other provisions of this Agreement
(including, without limitation, Section 4.4(g)), as permitted under the related
Financing Documents and under relevant law and regulations, including, without
limitation, the transmission of notices of default, repossession of Related
Vehicles, and the institution of legal or administrative actions or proceedings.
Each of Thrifty, the Beneficiaries and the Financing Sources agrees that the
Master Collateral Agent may exercise such rights, remedies, powers and
privileges assigned to it or in lieu of a Beneficiary in accordance with the
preceding sentence and agrees that Thrifty shall reimburse the Master Collateral
Agent for such enforcement expenses only to the same extent that it would be
obligated to reimburse the Master Collateral Agent or the applicable Beneficiary
for such enforcement expenses pursuant to the related Financing Documents.
(c) Instructions given to the Master Collateral Agent by any Beneficiary
shall comply (and delivery of any such instructions by a Beneficiary to the
Master Collateral Agent shall be deemed to be a representation and warranty by
such Beneficiary that such instructions comply) with the Financing Documents of
such Beneficiary and with applicable law and regulations.
(d) The Master Collateral Agent may at any time delegate any duties or
obligations hereunder (including, but not limited to, any duties or obligations
arising pursuant to Section 3.4 or 4.1(b) hereof) to any Person (other than,
with respect to any actions as agent of the Beneficiaries as secured parties,
any Person with any other interest in the Master Collateral) who agrees to
conduct such duties in accordance with the terms hereof. Any such delegation
shall not constitute a resignation within the meaning of Section 4.5 hereof and
the Master Collateral Agent shall not be liable for the negligence, acts or
omissions of such Persons so long as such Persons are selected with due care. If
any such delegation occurs, notification of the identity of such Person shall be
given to the Servicer, the Beneficiaries and the Rating Agencies.
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(e) If, at the time a Default exists under the Financing Documents related
to a Beneficiary, the Master Collateral Agent shall default in its obligation or
for any reason be unwilling or legally unable to exercise the rights, remedies,
powers or privileges with respect to the Related Master Collateral of a
Beneficiary in accordance with the direction of such Beneficiary (including any
rights under Section 3.4 or 4.1(b)), the Master Collateral Agent shall, upon the
written request of such Beneficiary, assign (without recourse to the Master
Collateral Agent) to such Beneficiary the Master Collateral Agent's security
interest in such Beneficiary's Master Collateral and shall prepare and execute
those instruments and documents necessary to effectuate such assignment
(including, if necessary, the execution of documents necessary to change the
name of the first lienholder on Certificates of Title for such Beneficiary's
Related Vehicles to such Beneficiary or its agent or assignee).
(f) Bankers Trust Company, in its individual or in any other capacity
(including as Trustee), may be a Beneficiary hereunder and as such shall be
entitled to all of the protections and rights of a Beneficiary under this
Agreement without regard to its capacity as Master Collateral Agent hereunder.
(g) Within three (3) Business Days of receipt by the Master Collateral
Agent from a Manufacturer of any material information pertaining to payments of
Disposition Proceeds, Guaranteed Payments, Repurchase Payments, or Incentive
Payments, or any payments arising under the Subleases, made or to be made to the
Master Collateral Account, the Master Collateral Agent shall provide such
information to Thrifty.
SECTION 4.2. Representations. Bankers Trust Company hereby represents and
warrants that (i) it has all requisite corporate power and authority to enter
into and perform its obligations under this Agreement and (ii) the execution,
delivery and performance by it of this Agreement have been duly authorized by
all necessary corporate action on its part, and this Agreement is the legal,
valid and binding obligation of Bankers Trust Company, enforceable against it in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally and by the application of equitable principles.
SECTION 4.3. Exculpatory Provisions. The Master Collateral Agent makes no
representations as to the value or condition of the Master Collateral or any
part thereof, the status or designation of any Master Collateral Vehicle as a
Related Vehicle to any Beneficiary pursuant to Section 2.2 hereof, as to the
title of Thrifty or Thrifty Finance thereto, as to the protection afforded by
this Agreement, as to the Fleet Report, any statements, representations or
warranties made by any other
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Person in or in connection with this Agreement or any Financing Document, as to
the validity, execution (except its own execution), enforceability of this
Agreement (except as against itself), priority, perfection, legality or
sufficiency of this Agreement or any Financing Document or any documents or
instruments referred to therein, or the sufficiency or effectiveness or
perfection or priority of any Lien on any collateral described in this
Agreement, or as to the validity or collectibility of any obligation
contemplated by this Agreement, and the Master Collateral Agent shall incur no
liability or responsibility in respect of any such matters; provided, however,
that the Master Collateral Agent shall not be relieved from liability for its
own gross negligence or willful misconduct. The Master Collateral Agent shall
not be charged with knowledge of the contents of any Fleet Report or any
Financing Document. The Master Collateral Agent shall not be responsible for
insuring the Master Collateral. Any reference herein to actual knowledge of the
Master Collateral Agent shall mean actual knowledge of a Responsible Officer of
the Master Collateral Agent assigned to and working in its Corporate Trust
Office.
SECTION 4.4. Limitations on Powers and Duties of the Master Collateral
Agent. (a) The Master Collateral Agent undertakes to perform only the duties
expressly set forth herein and no implied duties shall be read into this
Agreement.
(b) The Master Collateral Agent may exercise the rights and powers granted
to it by this Agreement, together with such powers as are reasonably incidental
thereto, but only pursuant to the terms of this Agreement.
(c) The Master Collateral Agent's duty of care shall be solely to deal
with the Master Collateral as it would with property of its own.
(d) The Master Collateral Agent shall have no authority to grant, convey
or assign the Certificates of Title or change the notation of a security
interest thereon or deal with the Certificates of Title in any way except as
expressly provided herein.
(e) The Master Collateral Agent shall have no liability or responsibility
for (i) any release of Master Collateral or other act or omission by the
Servicer pursuant to Section 2.7 or 2.8, (ii) any act of the Servicer taken in
its own name or the name of the Master Collateral Agent, or (iii) custody of any
Certificates of Title not delivered to it and required to be held by it in
connection with this Agreement.
(f) The Master Collateral Agent shall have no duty to calculate, compute
or verify, and shall not be held in any manner
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responsible for the content of the Servicer's Fleet Report, except to verify
that the certificate filed therewith conforms to the form of Exhibit B.
(g) Except as required by the specific terms of this Agreement, the Master
Collateral Agent shall have no duty to exercise or to refrain from exercising
any right, power, remedy or privilege granted to it hereby, or to take any
affirmative action or refrain from taking any affirmative action hereunder,
unless directed to do so by Beneficiaries specified herein as being entitled to
direct the Master Collateral Agent hereunder (and shall be fully protected in
acting or refraining from acting pursuant to or in accordance with such
directions, which shall be binding on Thrifty, each of the Financing Sources and
Beneficiaries). Notwithstanding anything herein to the contrary, the Master
Collateral Agent shall not be required to take any action that is or may be
contrary to law or to the terms of this Agreement, any Financing Document or any
other agreement or instrument relating to the Master Collateral, or which might
subject it or any of its directors, officers, employees or agents to personal or
financial liability. If any indemnity provided should become, in the
determination of the Master Collateral Agent, inadequate, the Master Collateral
Agent may call for additional indemnity and cease to act until and unless such
additional indemnity is given.
(h) The Master Collateral Agent may, in its sole discretion, retain
counsel, agents, independent accountants and other experts selected by it and
may act in reliance upon the advice of such counsel, independent accountants and
other experts concerning all matters pertaining to the agencies hereby created
and its duties hereunder, and shall be held harmless and shall not be liable for
any action taken or omitted to be taken by it in good faith in reliance upon or
in accordance with the statements and advice of such counsel, agents,
accountants and other experts. The Master Collateral Agent shall have the right
at any time to seek instructions concerning its duties and actions under this
Agreement from any court of competent jurisdiction.
(i) If the Master Collateral Agent receives unclear or conflicting
instructions, it shall be entitled to refrain from taking action until clear or
non-conflicting instructions are received, but shall inform the instructing
party or parties promptly of its decision to refrain from taking such action.
Without limiting the foregoing, in the event that the Master Collateral Agent
receives unclear or conflicting instructions from Beneficiaries hereunder or
there is any other disagreement between the other parties hereto resulting in
adverse claims and demands being made in connection with the Master Collateral,
or in the event that the Master Collateral Agent in good faith is in
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doubt as to what action it should take hereunder, the Master Collateral Agent
shall be entitled to retain the Master Collateral until the Master Collateral
Agent shall have received (i) a final nonappealable order of a court of
competent jurisdiction directing delivery of the Master Collateral or (ii) a
written agreement executed by all the other parties hereto directing delivery of
the Master Collateral in which event the Master Collateral Agent shall disburse
the Master Collateral in accordance with such order or agreement. Any court
order shall be accompanied by a legal opinion by counsel for the presenting
party satisfactory to the Master Collateral Agent to the effect that such order
is final and nonappealable.
(j) The Master Collateral Agent shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement, any Financing Document or any other agreements or
instruments relating to the Master Collateral on the part of any party hereto or
thereto or to inspect any books and records relating to the Master Collateral.
(k) The Master Collateral Agent shall be entitled to rely on any
communication, certificate, instrument, opinion, report, notice, paper or other
document reasonably believed by it to be genuine and correct and to have been
signed, given or sent by the proper Person or Persons. The Master Collateral
Agent shall be entitled to assume that no Default shall have occurred and be
continuing and that the Master Collateral Account, and any funds on deposit in
or to the credit of such Master Collateral Account, are not subject to any writ,
order, judgment, warrant of attachment, execution or similar process
(collectively a "writ"), unless (i) a Responsible Officer of the Master
Collateral Agent has actual knowledge thereof or (ii) the Master Collateral
Agent has received written notice from Thrifty, a Beneficiary or a Financing
Source that such a Default has occurred or such writ has been issued and, in
each case, continues to be in effect, which notice specifies the nature thereof.
(l) Bankers Trust Company, in its individual capacity, may accept deposits
from, lend money to and generally engage in any kind of business with Thrifty,
any Financing Source, any Manufacturer and their respective affiliates as if it
were not the agent of the Beneficiaries or the Financing Sources.
(m) The Master Collateral Agent shall not be accountable for the use or
application by any person of disbursements properly made by the Master
Collateral Agent in conformity with the provisions of this Agreement.
(n) The Master Collateral Agent may exercise any of its duties hereunder
by or through agents or employees in accordance
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with Section 4.1(d). The possession of the Master Collateral by such agents or
employees shall be deemed to be the possession of the Master Collateral Agent.
No provision of this Agreement shall require the Master Collateral Agent to
expend or risk its own funds or otherwise incur any financial or other liability
in the performance of any duties hereunder or in the exercise of any rights and
powers hereunder unless the Master Collateral Agent is provided with an
indemnity from one or more Beneficiaries, satisfactory to the Master Collateral
Agent in its sole discretion.
SECTION 4.5. Resignation and Removal of Master Collateral Agent. (a) The
Master Collateral Agent may, at any time with or without cause by giving
forty-five (45) days' prior written notice to Thrifty, Thrifty Finance, the
Financing Sources and the Beneficiaries, resign and be discharged of its
responsibilities hereunder created, such resignation to become effective upon
the appointment by Thrifty and Thrifty Finance of a successor Master Collateral
Agent with the approval of the Required Beneficiaries (which approval shall not
be unreasonably withheld) and the acceptance of such appointment by such
successor Master Collateral Agent or the appointment thereof by a court of
competent jurisdiction (as and to the extent provided in the related Financing
Documents). Thrifty and Thrifty Finance shall, promptly upon receipt thereof,
provide a copy of the notice from the Master Collateral Agent referred to in the
preceding sentence to each Rating Agency. The Master Collateral Agent may be
removed by Thrifty or Thrifty Finance at any time (with or without cause) upon
thirty (30) days' written notice by Thrifty or Thrifty Finance, as the case may
be, to the Master Collateral Agent and each of the Rating Agencies, and the
approval of the successor Master Collateral Agent by the Required Beneficiaries,
which approval will not be unreasonably withheld; provided, however, that if
either Thrifty or Thrifty Finance is in default under this Agreement or any
Financing Document and such default has a material adverse effect on the
Beneficiaries, then so long as such default continues, the right of Thrifty or
Thrifty Finance, as applicable, to remove the Master Collateral Agent shall
cease and the non-defaulting grantor shall have, or if both Thrifty and Thrifty
Finance are then in default, then the Required Beneficiaries shall have the
right to remove the Master Collateral Agent (with or without cause) upon thirty
(30) days' written notice to Thrifty, Thrifty Finance, the Master Collateral
Agent and each of the Rating Agencies; provided, further, that no removal of the
Master Collateral Agent shall be effective until the appointment of a successor
Master Collateral Agent and acceptance of such appointment by such Master
Collateral Agent. Any removed Master Collateral Agent shall be entitled to its
reasonable fees and expenses to the date the successor Master Collateral Agent
assumes the Master Collateral Agent's duties hereunder. The indemnification of
Section 4.10 shall survive the
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<PAGE> 36
termination of the other provisions of this Agreement as to the predecessor
Master Collateral Agent. If no successor Master Collateral Agent shall be
appointed and approved within thirty (30) days from the date of the giving of
the aforesaid notice of resignation or within thirty (30) days from the date of
such notice of removal, the Master Collateral Agent, on behalf of Thrifty and
Thrifty Finance, each Financing Source and each Beneficiary may appoint a
successor Master Collateral Agent to act until such time, if any, as a successor
Master Collateral Agent shall be appointed as above provided. If a successor
Master Collateral Agent does not take office within thirty (30) days after the
retiring Master Collateral Agent resigns or is removed, the retiring Master
Collateral Agent, on behalf of Thrifty and Thrifty Finance, each Financing
Source and each Beneficiary may petition any court of competent jurisdiction for
the appointment of a successor Master Collateral Agent. Any successor Master
Collateral Agent so appointed by such court shall immediately without further
act supersede any predecessor Master Collateral Agent. Upon the appointment of a
successor Master Collateral Agent hereunder, the predecessor Master Collateral
Agent shall be discharged of and from any and all further obligations arising in
connection with this Agreement.
(b) The appointment and designation referred to in Section 4.5(a) shall,
after any required filing, be full evidence of the right and authority to make
the same and of all the facts therein recited, and this Agreement shall vest in
such successor Master Collateral Agent, without any further act, deed or
conveyance, all of the estate and title of its predecessors and upon such filing
for record the successor Master Collateral Agent shall become fully vested with
all the estates, properties, rights, powers, duties, authority and title of its
predecessors; but any predecessor Master Collateral Agent shall, nevertheless,
on payment of its charges and on the written request of the Required
Beneficiaries, Thrifty, Thrifty Finance or any successor Master Collateral Agent
empowered to act as such at the time any such request is made, execute and
deliver an instrument without recourse or representation transferring to such
successor all the estates, properties, rights, powers, duties, authority and
title of such predecessor hereunder and shall deliver all securities, deposits
and monies held by it to such successor Master Collateral Agent.
SECTION 4.6. Status of Successors to Master Collateral Agent. Every
successor to the Master Collateral Agent appointed pursuant to Section 4.5 shall
be a bank or trust company in good standing and having power so to act and
incorporated under the laws of the United States or any State thereof or the
District of Columbia, and shall also have capital, surplus and undivided profits
of not less than $50,000,000 if there be such an institution with such capital,
surplus and undivided profits
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<PAGE> 37
willing, qualified and able to accept the trust upon reasonable or customary
terms. The Servicer shall give the Rating Agencies written notice prior to any
successor Master Collateral Agent being appointed pursuant to Section 4.5.
SECTION 4.7. Merger of the Master Collateral Agent. Any corporation into
which the Master Collateral Agent shall be merged, or with which it shall be
converted or consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Master Collateral Agent shall be a
party shall be the Master Collateral Agent under this Agreement without the
execution or filing of any paper or any further act on the part of the parties
hereto. The Master Collateral Agent shall give the Rating Agencies, Thrifty,
Thrifty Finance and the Servicer prior written notice of any such merger,
conversion or consolidation.
SECTION 4.8. Compensation and Expenses. Thrifty shall pay to the Master
Collateral Agent, from time to time (i) compensation for its services hereunder
for administering the Master Collateral as set forth in the fee letter dated as
of December 21, 1995, between Thrifty and the Master Collateral Agent, as such
letter may be amended, modified or supplemented from time to time, and (ii) all
reasonable fees and out-of-pocket expenses (including the fees and expenses of
counsel) of the Master Collateral Agent (A) arising in connection with the
preparation, execution, delivery, or modification of this Agreement and/or the
enforcement of any of the provisions hereof or (B) incurred in connection with
the administration of the Master Collateral, the sale or other disposition of
Master Collateral pursuant to this Agreement or to any Financing Document and/or
the preservation, protection or defense of the Master Collateral Agent's rights
under this Agreement and the Financing Documents and in and to the Master
Collateral.
SECTION 4.9. Stamp, Other Similar Taxes and Filing Fees. Thrifty shall
indemnify and hold harmless the Master Collateral Agent from any present or
future claim for liability for any stamp or other similar tax and any penalties
or interest with respect thereto, that may be assessed, levied or collected by
any jurisdiction in connection with this Agreement or any Master Collateral.
Thrifty shall pay, or reimburse the Master Collateral Agent for, any and all
amounts in respect of all search, filing, recording and registration fees,
taxes, excise taxes and other similar imposts that may be payable or determined
to be payable in respect of the execution, delivery, performance and/or
enforcement of this Agreement. Nothing in this Section 4.9 shall relieve Thrifty
of its responsibility and liability for filings and recordings with respect to
this Agreement and the Master Collateral.
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<PAGE> 38
SECTION 4.10. Indemnification. Thrifty shall pay, and indemnify and hold
the Master Collateral Agent and each of the officers, employees, directors and
agents thereof harmless from and against, any and all liabilities (including
liabilities for penalties and liabilities arising or resulting from actions or
suits), obligations, losses, judgments, demands, damages, claims, costs or
expenses of any kind or nature whatsoever that may at any time be imposed on,
incurred by, or asserted against, the Master Collateral Agent or any such
officers, employees, directors or agents in any way relating to or arising out
of the execution, delivery, amendment, enforcement, performance and/or
administration of this Agreement, including reasonable fees and expenses of
counsel and other experts, and Thrifty shall reimburse each Beneficiary for any
payments made by such Beneficiary to the Master Collateral Agent or any such
officers, employees, directors or agents for any of the foregoing; provided,
however, that Thrifty shall not be liable for the payment of any portion of such
liabilities (including liabilities for penalties and liabilities arising or
resulting from actions or suits), obligations, losses, judgments, demands,
damages, claims, costs or expenses of the Master Collateral Agent or any such
officers, employees, directors or agents which resulted from the gross
negligence or willful misconduct of the Master Collateral Agent or any such
agent.
Each of the Beneficiaries (other than the Trustee) agrees, in accordance
with its pro rata portion of the Master Collateral, to indemnify and hold the
Master Collateral Agent and each of its officers, employees, directors and
agents harmless to the same extent as Thrifty in accordance with the foregoing
paragraph but only to the extent that the Master Collateral Agent has not been
paid by Thrifty pursuant to such paragraph. This Section 4.10 shall survive the
termination of this Agreement and the resignation or removal of the Master
Collateral Agent.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Amendments, Supplements and Waivers. This Agreement may be
amended, waived, terminated, supplemented or otherwise modified pursuant to a
writing executed by the Master Collateral Agent, each Beneficiary, each
Financing Source, Thrifty, Thrifty Finance and the Servicer; provided, however,
that (i) the consent of each Beneficiary and each Financing Source need not be
obtained in connection with the execution of a supplement or amendment that only
adds a Financing Source or Beneficiary as a party to this Agreement and (ii) an
amendment may be executed without the consent of any Beneficiary or any
Financing Source if such amendment is effected only to cure an
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<PAGE> 39
ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein or which is otherwise defective, or
to make any other provisions with respect to matters or questions arising under
this Agreement which shall not be inconsistent with the provisions of this
Master Collateral Agency Agreement or any other such Related Document; provided,
that such action pursuant to this clause shall not have a material adverse
effect on the interests of any Beneficiary or any Financing Source in any
material respect. Additional Financing Sources or Beneficiaries may from time to
time become parties hereto and Financing Sources or Beneficiaries hereunder by
the execution of a Supplement by such additional Financing Source or
Beneficiary, the Master Collateral Agent, the Servicer and Thrifty. The Servicer
shall give the Rating Agencies prior written notice of any amendment,
supplement, waiver or modification of this Agreement. The Master Collateral
Agent shall be entitled to receive upon request an Opinion of Counsel stating
that such amendment, supplement, waiver or modification of this Agreement is in
compliance with and is not prohibited by this Agreement and the Financing
Documents. Upon execution of a Supplement, the Servicer shall furnish a copy
thereof to the other parties hereto.
SECTION 5.2. Notices. All notices, requests, demands and other
communications provided for or permitted hereunder shall, unless otherwise
stated herein, be in writing (including facsimile communications) and shall be
sent by registered or certified mail, return receipt requested, facsimile or
hand delivery
(a) if to Thrifty, the Servicer, Thrifty Finance or the Master
Collateral Agent, at the address specified for such party on the signature
pages hereto; or
(b) if to any other Beneficiary, Financing Source or other Person
specified in a Supplement, at the address specified in such Supplement;
or, in each case, at such other address as shall be designated by it in a
written notice to each other party hereto. Any notice, if mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service or if transmitted by facsimile shall be deemed given when
received.
Notwithstanding the foregoing, any notice, request, demand or
communication to the Master Collateral Agent, in its capacity as the first
lienholder noted on the Certificate of Title, shall be mailed, postage prepaid,
to the following address:
Re: "Thrifty"
c/o Bankers Trust Company
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<PAGE> 40
P.O. Box 318
Church Street
New York, New York 10008
SECTION 5.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 5.4. Counterparts. This Agreement may be executed in separate
counterparts and by the different parties on different counterparts, each of
which shall be an original and all of which taken together shall constitute one
and the same instrument.
SECTION 5.5. Conflicts with Financing Documents; Reservation of Rights.
The parties agree that in the event of any conflict between the provisions of
this Agreement and the provisions of any Financing Documents, the provisions of
this Agreement shall control. Except as expressly provided herein, nothing
contained in this Agreement is intended to affect or limit, in any way, the
rights that each of the Beneficiaries has insofar as the rights of such parties
and third parties are involved. Except as expressly provided herein, the
Beneficiaries specifically reserve all their respective rights against Thrifty,
any Financing Source and/or any third party.
SECTION 5.6. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of each of the parties hereto and their respective
successors and assigns. Nothing herein is intended or shall be construed to give
any other Person any right, remedy or claim under, to or in respect of this
Agreement or the Master Collateral.
SECTION 5.7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
SECTION 5.8. Effectiveness. This Agreement shall become effective on the
execution and delivery hereof and shall remain in effect until no amounts are
owed to any Financing Source under any Financing Document and no Beneficiary or
Financing Source shall have any claim on the Master Collateral.
SECTION 5.9. Termination of Beneficiary. Upon receipt by the Master
Collateral Agent of a notice from a Beneficiary to the effect that (i) (A) such
Beneficiary then has no Related Vehicles hereunder, no amounts are then owing to
the related Financing
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<PAGE> 41
Source under its Financing Documents and such Financing Documents have been
terminated and are of no further force or effect or (B) the Master Collateral
Agent's security interest has been reassigned to such Beneficiary pursuant to
Section 4.1(e) and (ii) such Beneficiary has elected to terminate this
Agreement, this Agreement shall terminate as to such Beneficiary.
SECTION 5.10. Termination of this Agreement. At any time that there are no
Beneficiaries, Thrifty and Thrifty Finance may terminate this Agreement upon
notice to the Master Collateral Agent, and the Master Collateral Agent shall
take all actions reasonably requested by Thrifty and Thrifty Finance, at
Thrifty's expense, to evidence the termination of this Agreement and the Master
Collateral Agent's interest in the Master Collateral, including, without
limitation, execute such documents and instruments as Thrifty may prepare and
reasonably request to be executed by the Master Collateral Agent in connection
with such reassignment; provided, however, that Sections 4.3, 4.4(a), (c), and
(e) through (n), 4.8, and the indemnification set forth in Sections 4.9 and 4.10
shall survive the termination of this Agreement.
SECTION 5.11. Assignment by Financing Sources. Each Financing Source
acknowledges that it has assigned and does hereby assign to its related
Beneficiary or Beneficiaries all of its rights and interests under this
Agreement and further acknowledges that its related Beneficiary or Beneficiaries
may exercise all of such Financing Source's rights hereunder assigned thereto.
SECTION 5.12. Thrifty Finance Related Documents. To the extent that this
Agreement affects the secured parties under Thrifty Finance's Financing
Documents, it shall be considered a Related Document (as defined in Thrifty
Finance's Financing Documents) for all purposes except voting provisions.
SECTION 5.13. No Bankruptcy Petition Against Financing Sources. The Master
Collateral Agent hereby covenants and agrees that, prior to the date which is
one year and one day after the payment in full of the latest maturing debt
security issued by a Financing Source, it will not institute against, or join
with any other Person in instituting against, such Financing Source, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any Federal or state bankruptcy or similar law;
provided, however, that nothing in this Section 5.13 shall constitute a waiver
of any right to indemnification, reimbursement or other payment from any
Financing Source or Beneficiary pursuant to this Agreement; provided, further,
that this Section 5.13 shall only be effective with respect to a Financing
Source for which the related Financing Documents contain a "no bankruptcy
petition" provision
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<PAGE> 42
similar to this Section 5.13. In the event that the Master Collateral Agent
takes action in violation of this Section 5.13, each affected Financing Source
agrees that it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such a petition by the Master Collateral Agent
against such Financing Source or the commencement of such action and raise the
defense that the Master Collateral Agent has agreed in writing not to take such
action and should be estopped and precluded therefrom and such other defenses,
if any, as its counsel advises that it may assert. The provisions of this
Section 5.13 shall survive the termination of this Agreement, and the
resignation or removal of the Master Collateral Agent.
SECTION 5.14. Jurisdiction; Consent to Service of Process. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST THRIFTY, THE MASTER COLLATERAL AGENT, ANY FINANCING
SOURCE OR ANY BENEFICIARY WITH RESPECT TO THIS AGREEMENT OR ANY OTHER RELATED
DOCUMENT MAY BE BROUGHT IN ANY STATE OR (TO THE EXTENT PERMITTED BY LAW) FEDERAL
COURT OF COMPETENT JURISDICTION IN THE BOROUGH OF MANHATTAN, IN NEW YORK CITY,
IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
THRIFTY, THE MASTER COLLATERAL AGENT, EACH FINANCING SOURCE AND EACH BENEFICIARY
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT. THRIFTY, EACH FINANCING SOURCE AND EACH BENEFICIARY (OTHER
THAN THE TRUSTEE) DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, INC., 1633
BROADWAY, NEW YORK, NEW YORK 10019, AND SUCH OTHER PERSONS AS MAY HEREAFTER BE
SELECTED BY THRIFTY, ANY FINANCING SOURCE OR ANY BENEFICIARY AND AS SHALL
IRREVOCABLY AGREE IN WRITING TO SERVE, AS ITS AGENT TO RECEIVE ON ITS BEHALF
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE
BEING HEREBY ACKNOWLEDGED BY THRIFTY, EACH FINANCING SOURCE AND EACH BENEFICIARY
TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF SUCH PROCESS SO
SERVED SHALL BE MAILED BY REGISTERED MAIL TO THRIFTY, SUCH FINANCING SOURCE OR
SUCH BENEFICIARY SO SERVED AT ITS ADDRESS PROVIDED IN THE APPLICABLE SIGNATURE
PAGE HERETO, EXCEPT THAT, UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY
FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS.
IF ANY AGENT APPOINTED BY THRIFTY, SUCH FINANCING SOURCE OR SUCH BENEFICIARY
REFUSES TO ACCEPT SERVICE, THRIFTY, EACH FINANCING SOURCE AND EACH BENEFICIARY
HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.
NOTHING HEREIN SHALL AFFECT THE RIGHTS TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY FINANCING SOURCE OR BENEFICIARY
TO BRING PROCEEDINGS AGAINST THRIFTY IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 5.15. Waiver of Jury Trial. THE MASTER COLLATERAL AGENT, EACH
FINANCING SOURCE, EACH BENEFICIARY AND THRIFTY HEREBY
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<PAGE> 43
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
OR ACTIONS OF THE MASTER COLLATERAL AGENT, ANY FINANCING SOURCE, ANY BENEFICIARY
OR THRIFTY IN CONNECTION HEREWITH OR THEREWITH. THRIFTY ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND
EACH OTHER PROVISION OF EACH OTHER RELATED DOCUMENT TO WHICH IT IS A PARTY) AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE MASTER COLLATERAL AGENT,
EACH FINANCING SOURCE AND EACH BENEFICIARY ENTERING INTO THIS AGREEMENT AND EACH
SUCH OTHER RELATED DOCUMENT.
SECTION 5.16. Insurance Notification. The Master Collateral Agent shall,
promptly upon its receipt of notification of any termination of or proposed
cancellation or nonrenewal of any insurance policies required to be maintained
under any of the Financing Documents, notify the Beneficiary thereof of any such
termination, proposed cancellation or nonrenewal.
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<PAGE> 44
IN WITNESS WHEREOF, each party hereto has executed this Agreement or
caused this Agreement to be duly executed by its officer thereunto duly
authorized as of the day and year first above written.
THRIFTY RENT-A-CAR SYSTEM, INC.,
as grantor and as Servicer
By: /s/ Steven B. Hildebrand
---------------------------------------
Name: Steven B. Hildebrand
Title: Executive Vice President
Address: 5330 East 31st Street
Suite 100
Tulsa, Oklahoma 74135
THRIFTY CAR RENTAL FINANCE
CORPORATION, as grantor
By: /s/ Steven B. Hildebrand
---------------------------------------
Name: Steven B. Hildebrand
Title: President
Address: 5330 East 31st Street
Suite 100
Tulsa, Oklahoma 74135
<PAGE> 45
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Master Collateral
Agent
By: /s/ Lillian K. Rancic
---------------------------------------
Name: Lillian K. Rancic
Title: Assistant Treasurer
Address: 4 Albany Street
10th Floor
New York, New York 10006
<PAGE> 46
THE FINANCING SOURCES
THRIFTY RENT-A-CAR SYSTEM, INC.
By: /s/ Steven B. Hildebrand
---------------------------------------
Name: Steven B. Hildebrand
Title: Executive Vice President
Address: 5330 East 31st Street
Suite 100
Tulsa, Oklahoma 74135
THRIFTY CAR RENTAL FINANCE
CORPORATION
By: /s/ Steven B. Hildebrand
---------------------------------------
Name: Steven B. Hildebrand
Title: President
Address: 5330 East 31st Street
Suite 100
Tulsa, Oklahoma 74135
<PAGE> 47
THE BENEFICIARIES
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Trustee
By: /s/ Lillian K. Rancic
---------------------------------------
Name: Lillian K. Rancic
Title: Assistant Treasurer
Address: 4 Albany Street
10th Floor
New York, New York 10006
<PAGE> 48
THE BENEFICIARIES
THRIFTY CAR RENTAL FINANCE
CORPORATION
By: /s/ Steven B. Hildebrand
---------------------------------------
Name: Steven B. Hildebrand
Title: President
Address: 5330 East 31st Street
Suite 100
Tulsa, Oklahoma 74135
<PAGE> 49
EXHIBIT A
SUPPLEMENT TO
MASTER COLLATERAL AGENCY AGREEMENT
This SUPPLEMENT, dated as of _______, 19__ ("Supplement"), to the Master
Collateral Agency Agreement, dated as of December 13, 1995 (as heretofore
amended, modified or supplemented, the "Master Collateral Agency Agreement"),
among THRIFTY RENT-A-CAR SYSTEM, INC., an Oklahoma corporation ("Thrifty"), as
servicer (in such capacity the "Servicer") and as a grantor, THRIFTY CAR RENTAL
FINANCE CORPORATION, an Oklahoma corporation ("Thrifty Finance"), as a grantor,
Thrifty Finance and all other parties which have heretofore executed a
supplement thereto as a Financing Source (each, a "Financing Source" and
collectively, the "Financing Sources"), BANKERS TRUST COMPANY (in its capacity
as trustee under the Indenture (as defined in the Master Collateral Agency
Agreement)), Thrifty Finance and all other parties which have heretofore
executed a supplement thereto as a Beneficiary (each, a "Beneficiary" and
collectively, the "Beneficiaries"), and BANKERS TRUST COMPANY, not in its
individual capacity but solely as master collateral agent for the Beneficiaries
(in such capacity, the "Master Collateral Agent"), ________ ("New Financing
Source") and ______________ ("New Beneficiary").
WHEREAS, the Master Collateral Agent, the Servicer, Thrifty, Thrifty
Finance and other parties have entered into the Master Collateral Agency
Agreement and now desire to add an additional party to such Agreement.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. Master Collateral Agency Agreement. Each of New Financing
Source and New Beneficiary hereby acknowledges receipt of an executed copy of
the Master Collateral Agency Agreement. New Beneficiary hereby becomes (and is
hereby designated by the Servicer) a Beneficiary under the Master Collateral
Agency Agreement. New Financing Source hereby becomes (and is hereby designated
by the Servicer) a Financing Source under the Master Collateral Agency
Agreement. Each of New Financing Source and New Beneficiary agrees to be bound
by the terms thereof and hereby authorizes the Master Collateral Agent to act on
its behalf under the Master Collateral Agency Agreement with respect to its
Related Vehicles and Related Master Collateral.
SECTION 2. Notice Addresses. Any notice to be given to New Beneficiary or
New Financing Source shall be sent as set forth in
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<PAGE> 50
the Master Collateral Agency Agreement to New Financing Source or New
Beneficiary, as the case may be, at the following address:
[New Financing Source]
----------------------
----------------------
[New Beneficiary]
----------------------
----------------------
SECTION 3. Counterparts. This Supplement may be executed in separate
counterparts and by the different parties on different counterparts, each of
which shall constitute an original and all of which when taken together shall
constitute one and the same agreement.
SECTION 4. GOVERNING LAW. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
IN WITNESS WHEREOF, each party hereto has executed this Supplement or
caused this Supplement to be duly executed by their respective officers duly
authorized as of the day and year first above written.
THRIFTY RENT-A-CAR SYSTEM, INC.,
individually and as Servicer
By:
------------------------------------
Name:
Title:
Address: 5330 East 31st Street
Suite 100
Tulsa, Oklahoma 74135
THRIFTY CAR RENTAL FINANCE
CORPORATION
By:
------------------------------------
Name:
Title:
Address: 5330 East 31st Street
Suite 100
Tulsa, Oklahoma 74135
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<PAGE> 51
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Master Collateral Agent
By:
------------------------------------
Name:
Title:
Address: 4 Albany Street
10th Floor
New York, New York 10006
[NEW FINANCING SOURCE]
By:
------------------------------------
Name:
Title:
Address:
[NEW BENEFICIARY]
By:
------------------------------------
Name:
Title:
Address:
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<PAGE> 52
EXHIBIT B
SERVICER'S FLEET REPORT
Month ending __________, 19__
Pursuant to Section 2.4 of the Master Collateral Agency Agreement dated as
of December 13, 1995, among Thrifty Rent-A-Car System, Inc., individually and as
Servicer, Thrifty Car Rental Finance Corporation and Bankers Trust Company, not
in its individual capacity but solely as Master Collateral Agent, and the other
parties thereto (as amended, supplemented or otherwise modified from time to
time, the "Master Collateral Agency Agreement"), the Servicer hereby certifies
that attached hereto is a report which shows for the month referred to above for
each Financing Source and each Related Vehicle designated thereto as of the last
day of each such month and after giving effect to the most recent redesignation
of Master Collateral Vehicle (i) the related Beneficiary in respect thereof,
(ii) whether such Related Vehicle is a Thrifty Master Collateral Vehicle or a
Thrifty Finance Master Collateral Vehicle, (iii) the last eight digits of the
vehicle identification numbers with respect to such Related Vehicle, and (iv)
the Capitalized Cost and Net Book Value of such Related Vehicle (calculated in
accordance with the Financing Documents relating to the applicable Financing
Source). Capitalized terms used and not otherwise defined herein have the
meanings ascribed to such terms in the Master Collateral Agency Agreement.
Duly certified and executed, this __ day of __________, 19__.
Thrifty Rent-A-Car System, Inc.,
as Servicer
By:
------------------------------------
Name:
Title:
<PAGE> 53
EXHIBIT C
CERTIFICATE OF TITLE LOCATIONS
Certificates of Title will be received by:
BANKERS TRUST COMPANY, as Master Collateral Agent
Address: 4 Albany Street
10th Floor
New York, New York 10006
and subsequently transferred to:
THRIFTY RENT-A-CAR SYSTEM, INC., as Servicer
5330 East 31st Street
Suite 100
Tulsa, Oklahoma 74135
<PAGE> 54
EXHIBIT D
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that Bankers Trust Company as Master
Collateral Agent (the "Master Collateral Agent") under that certain Master
Collateral Agency Agreement dated as of December 13, 1995, (as amended,
supplemented or otherwise modified from time to time, the "Master Collateral
Agency Agreement") among Thrifty Rent-A-Car System, Inc. ("Thrifty"), as
servicer (in such capacity, the "Servicer"), Thrifty Car Rental Finance
Corporation, various Financing Sources parties thereto, various Beneficiaries
parties thereto, and the Master Collateral Agent, does hereby make, constitute
and appoint Thrifty Rent-A-Car System, Inc. its true and lawful
Attorney(s)-in-Fact for it and in its name, stead and behalf to execute any and
all documents and instruments, but only in connection with the following: (i) to
note the Master Collateral Agent as the holder of a first Lien on the
Certificate of Title, and/or otherwise ensure that the first Lien shown on any
and all Certificates of Title (other than any Certificates of Title relating to
the Existing Fleet) is in the name of the Master Collateral Agent, (ii) to
release the Master Collateral Agent's Lien on any Certificate of Title in
connection with the sale or disposition of any related Master Collateral Vehicle
permitted pursuant to the provisions of the Financing Documents relating to such
Master Collateral Vehicle, (iii) to release the Master Collateral Agent's Lien
on any Certificate of Title with respect to any Master Collateral Vehicle which
is not a Related Vehicle with respect to any Beneficiary or with respect to
which all obligations to the related Beneficiary have been satisfied in full
(and any applicable bankruptcy preference period has expired) and (iv) to
appoint individual representatives of Thrifty as attorneys-in-fact to act on
behalf of Thrifty to fulfill the purposes of this Power of Attorney. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
ascribed to such terms in the Master Collateral Agency Agreement.
The powers and authority granted hereunder shall, unless sooner revoked by
the Master Collateral Agent in accordance with Section 2.7 of the Master
Collateral Agency Agreement or following the resignation or removal of the
Master Collateral Agent under the Master Collateral Agency Agreement, cease upon
the termination of the Master Collateral Agency Agreement.
<PAGE> 55
IN WITNESS WHEREOF, the undersigned has caused this instrument to be
executed on its behalf on this ___ day ________, 1995.
BANKERS TRUST COMPANY,
not in its individual
capacity, but solely as
Master Collateral Agent,
By:
----------------------------------
Name:
Title:
STATE OF NEW YORK )
:
COUNTY OF NEW YORK )
Subscribed and sworn before me, a notary public, in and for said county
and state, this ____ day of _________, 1995.
----------------------------------
Notary Public
My Commission Expires:
D-2
<PAGE> 56
EXHIBIT E
COLLATERAL ASSIGNMENT OF GUARANTEED DEPRECIATION PROGRAM
THIS COLLATERAL ASSIGNMENT OF GUARANTEED DEPRECIATION PROGRAM, dated as of
December 13, 1995 (this "Collateral Assignment") is made by THRIFTY RENT-A-CAR
SYSTEM, INC., an Oklahoma corporation ("Thrifty") and THRIFTY CAR RENTAL FINANCE
CORPORATION, an Oklahoma corporation ("Thrifty Finance" and, together with
Thrifty, the "Assignors"), in favor of BANKERS TRUST COMPANY, a New York banking
corporation, as master collateral agent on behalf of Thrifty and Thrifty Finance
(the "Assignee"), as so acknowledged, consented to and agreed to by the
Assignee, and CHRYSLER CORPORATION, a Delaware corporation (the "Manufacturer").
W I T N E S E T H:
WHEREAS, the Assignors are each participants in the Guaranteed
Depreciation Program offered by the Manufacturer to the Assignors with respect
to the purchase of new 1995 and 1996 model year vehicles from Manufacturer,
including all terms and conditions now or hereafter in effect thereunder (the
"Manufacturer Program");
WHEREAS, pursuant to that certain Master Collateral Agreement, dated as of
December 13, 1995 (the "Master Collateral Agreement") among the Assignee, as
Master Collateral Agent, the Assignors, and certain lenders named therein as
financing sources for the Assignors' fleet of vehicles, each Assignor has
pledged, assigned, conveyed, delivered, transferred and set over to the
Assignee, and granted to the Assignee a security interest in, all such
Assignor's right, title and interest in, to and under, among other collateral,
the Manufacturer Program; and
WHEREAS, this Agreement is intended to transfer to the Assignee each
Assignor's interest in the Manufacturer Program and to evidence the
Manufacturer's consent to such transfer.
NOW, THEREFORE, in consideration of the foregoing premises, and other good
and valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), each Assignor and Assignee agree as follows:
1. Assignment. Each Assignor hereby irrevocably pledges, assigns, conveys,
delivers, transfers and sets over to the Assignee, and grants to the Assignee
all such Assignor's right, title and interest in, to and under the Manufacturer
Program (whether now existing or hereafter arising) and all monies due and to
become due thereunder or in connection therewith, whether payable as guaranteed
depreciation payments, fees, expenses,
<PAGE> 57
costs, indemnities, insurance recoveries, damages for breach of the Manufacturer
Program or otherwise (exclusive of any payments payable as an advertising and
promotional allowance pursuant to and in accordance with the terms of the
Manufacturer Program).
2. Representations and Warranties. Each Assignor hereby represents and
warrants to the Assignee that (a) such Assignor's right, title and interest in,
to and under the Manufacturer Program is not subject to any other pledge,
assignment, encumbrance or hypothecation, and no other security interest exists
therein (other than with respect to Thrifty's existing fleet, the security
interests held by Chrysler Credit Corporation), and (b) the Manufacturer Program
is in full force and effect and there exists no default thereunder.
3. Manufacturer's Consent. The Manufacturer hereby acknowledges and
consents to the assignment, pledge and grant of all right, title and interest of
each Assignor in and to the Manufacturer Program to the Assignee and hereby
agrees to recognize the Assignee as the holder of the interest of each Assignor
under the Manufacturer Program from and after the date of this Agreement and
hereby acknowledges that the Assignee has the right to enforce the Manufacturer
Program against the Manufacturer. Each Assignor irrevocably instructs the
Manufacturer to pay directly to the Assignee, to the account specified by the
Assignee, all amounts now or hereafter payable to such Assignor under the
Manufacturer Program. Each Assignor waives all claims against the Manufacturer
and releases it from all liability arising in connection with any such payments
by the Manufacturer to the Assignee.
4. Manufacturer Program in Full Force and Effect. The Manufacturer
acknowledges and agrees that (i) the Manufacturer Program is in full force and
effect, (ii) the Manufacturer Program has been duly authorized by the
Manufacturer and is a legal, valid and binding obligation of the Manufacturer
enforceable in accordance with its terms, and (iii) each of the Assignors is a
duly authorized fleet purchaser under the Manufacturer Program entitled to the
benefits provided by such Manufacturer Program.
5. No Amendments. The Manufacturer agrees that it will not modify, amend,
alter or otherwise change the provisions of the Manufacturer Program in any way
that would reduce the amount payable by the Manufacturer thereunder in respect
of the interest of the Assignors assigned to Assignee under this Agreement. The
Manufacturer agrees that it will not otherwise reduce any amount payable by it
in respect of turned-back Vehicles purchased by the Assignors under the
Manufacturer Program for any reason other than charges expressly contemplated in
the Manufacturer Program.
E-2
<PAGE> 58
6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which taken together
shall constitute one instrument.
7. Further Assurances. The parties hereby agree that, upon request of any
party, each of them will execute and deliver such further documents and
instruments as may reasonably be requested in order to carry out the purposes of
this Agreement.
8. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
9. Notices to Manufacturer. Any notice provided hereunder to the
Manufacturer shall be in writing and, if mailed, shall be deemed to be given
upon receipt thereof, and shall be sent by registered or certified mail, postage
prepaid, and addressed to the Manufacturer at its address set forth below, or at
such other address as the Manufacturer may, by written notice, designate as its
address for purposes of notice hereunder.
Chrysler Corporation
Fleet Operations
American Center - 19th Floor
17777 Franklin Road
Southfield, MI 48034
Attention: General Manager
Telecopy: _________________
with a copy to:
Chrysler Corporation
12000 Chrysler Drive
Highland Park, MI 48388-0001
Attention: Vice President, General
Counsel & Secretary
Telecopy: _____________________
E-3
<PAGE> 59
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed and agreed to and accepted by their respective duly authorized officers
as of the day and year first above written.
THRIFTY RENT-A-CAR SYSTEM, INC.,
as Assignor
By:
----------------------------------------
THRIFTY CAR RENTAL FINANCE
CORPORATION, as Assignor
By:
----------------------------------------
BANKERS TRUST COMPANY,
as Assignee
By:
----------------------------------------
Name:
Title:
MANUFACTURER:
Acknowledged, Consented to and
Agreed to:
CHRYSLER CORPORATION
By:
---------------------------------
Name:
Title:
E-4
<PAGE> 60
EXHIBIT F
LIST OF NEW YORK, NEW YORK AND TULSA, OKLAHOMA BANK HOLIDAYS
(to be attached)
<PAGE> 61
EXHIBIT G
INVESTMENT STANDING INSTRUCTION
Thrifty Car Rental Finance Corporation
5330 East 31st Street
Suite 100
Tulsa, Oklahoma 74135
____________________, 199__
Bankers Trust Company
as Master Collateral Agent
4 Albany Street, 10th Floor
New York, New York 10065
Re: Permitted Investments
Ladies and Gentlemen:
Reference is made to the Master Collateral Agency Agreement (the
"Master Collateral Agency Agreement"), dated as of December 13, 1995, among
Thrifty Rent-A-Car System, Inc., as Servicer, Thrifty Car Rental Finance
Corporation, various Financing Sources parties thereto, various Beneficiaries
parties thereto, and the Master Collateral Agent. Capitalized terms used herein
and not otherwise defined shall have the meanings ascribed thereto in the Master
Collateral Agency Agreement.
Pursuant to Section 2.5(f) of the Master Collateral Agency
Agreement, you are hereby authorized and instructed to invest funds from time to
time on deposit in the Master Collateral Account (and not otherwise
distributable in accordance with the terms of the Master Collateral Agency
Agreement) in the Permitted Investments described in Schedule 1 hereto.
Thrifty Rent-A-Car System, Inc.,
as Servicer under the Master
Collateral Agency Agreement
By:
-------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 10.9
PENTASTAR TRANSPORTATION GROUP, INC.
EXECUTIVE RETENTION PLAN
INTRODUCTION
The affiliated companies ("Employer" or "Employers") of Pentastar
Transportation Group, Inc. ("Company") listed on Exhibit A hereto have adopted
this Plan to provide an incentive to retain certain key employees.
The Plan is intended to be an unfunded plan that is maintained by the
Employers primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees, also referred to as
key employees.
ARTICLE 1
ADMINISTRATION
The Administrator shall be the Company which shall oversee the
administration of the Plan. The Administrator shall have complete control and
authority to determine all rights, benefits, claims, demands and actions arising
out of the provisions of the Plan for any participant, deceased participant,
beneficiary, or other person having or claiming to have any interest under the
Plan. The Administrator shall have complete discretion to interpret the Plan and
any ambiguities under the Plan. The Administrator shall have complete discretion
to decide all matters under the Plan. Such interpretation and decision shall be
final, conclusive and binding on all Plan participants and any person claiming
under or through any Plan participant, in the absence of clear and convincing
evidence that the Administrator acted arbitrarily and capriciously.
ARTICLE 2
ELIGIBLE EMPLOYEES
An employee of the Employer will be eligible to participate in this Plan if
he or she is a key employee of an Employer and is selected by the Employer for
participation in the Plan. An eligible employee shall be a Plan "participant."
ARTICLE 3
BENEFITS
A participant shall be granted an award based on a percentage of his or her
base salary as of December 31 of each Plan year. The percentage shall be
determined by the Employer's target performance objectives (target operating
profit) as determined by the Employer for each such year as compared against the
Employer's actual performance (actual operating profit) for that year. The
Employee's target award shall be adjusted upward or downward based on the
individual Employer's
<PAGE> 2
actual operating performance compared to such Employer's target operating profit
objective for that year.
ARTICLE 4
PAYMENT OF BENEFITS
The payment of the award for each year shall be made to the participant
(or in the event of his or her death to his or her designated beneficiary, or
if none, to his or her estate) in cash in three equal installments in each of
the three succeeding years following the year of the award. For example, any
1995 award under this Plan would be payable in years 1996, 1997, and 1998.
Generally, payments of the award will only be made to a participant if he or
she is in the employ of the individual Employer on December 31 of the year in
which the payment is to be made.
ARTICLE 5
PLAN TERMINATION
This Plan shall terminate with the last year for which awards shall be
granted which is the calendar year 1997. However, payments under this Plan shall
continue beyond that year in accordance with Article 4 above. The Employer has
discretion to accelerate such payments hereunder.
ARTICLE 6
UNFUNDED PLAN
It is intended that the obligations of the Employers under this Plan will
constitute a mere promise of the individual Employer to make benefit payments
in the future. No participant shall have rights against the Company, Employer,
or any other person with respect to payments under the Plan other than those
given by law to general unsecured creditors of the Employer. In all events, it
is the intent of the Company and the Employers that the Plan be treated as
unfunded for tax purposes and for purposes of Title I of ERISA.
ARTICLE 7
TAX WITHHOLDING
The Company shall deduct from all cash payments hereunder to participants
any federal, state or local taxes required by law to be withheld.
-2-
<PAGE> 3
ARTICLE 8
NONASSIGNABILITY OF RIGHTS
The right of any participant to receive any benefits under the Plan shall
not be alienable by the participant by assignment or any other method, and
shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of the
participant or the participant's beneficiary.
-3-
<PAGE> 4
EXHIBIT A
Thrifty Rent-A-Car System, Inc.
Dollar Rent A Car Systems, Inc.
-4-
<PAGE> 1
EXHIBIT 10.11
TAX SHARING AND DISAFFILIATION AGREEMENT
BETWEEN CHRYSLER CORPORATION AND DOLLAR
THRIFTY AUTOMOTIVE GROUP, INC.
WHEREAS, Chrysler Corporation ("Chrysler") is the common
parent of an affiliated group of corporations (the "Chrysler Group") within the
meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the
"Code") which files a consolidated federal income Tax return pursuant to Section
1501 of the Code;
WHEREAS, Chrysler or another member of the Chrysler Group has
filed income Tax returns on a consolidated, combined, unitary or similar group
basis in certain state, local or other jurisdictions with certain other
affiliated companies (each group with which such Chrysler Group member so filed,
a "Chrysler Combined Group");
WHEREAS, Chrysler owns 100% of the common stock of Dollar
Thrifty Automotive Group, Inc., a Delaware corporation;
WHEREAS, Dollar Thrifty Automotive Group, Inc., a Delaware
corporation, (or its predecessor, Pentastar Transportation Group, Inc., an
Oklahoma corporation) and certain of its subsidiaries have been included in the
consolidated federal income Tax returns filed by the Chrysler Group for
preceding taxable years of the Chrysler Group (each of Dollar Thrifty Automotive
Group, Inc., and its predecessor, Pentastar Transportation Group, Inc.,
hereinafter designated "DTAG"
<PAGE> 2
and, together with all of their subsidiaries that have been members of the
Chrysler Group, the "DTAG Group");
WHEREAS, certain of the members of the DTAG Group have been
included in certain Chrysler Combined Groups;
WHEREAS, an initial public offering (the "Offering") of all of
the stock of DTAG is proposed to be made (such Offering to be completed on the
"Completion Date");
WHEREAS, following the Offering, on the day next following the
Completion Date, the members of the DTAG Group will no longer be eligible to
join in the consolidated federal income Tax return of the Chrysler Group, will
no longer be members of the Chrysler Group, and will no longer be members of any
Chrysler Combined Group;
WHEREAS, Chrysler and DTAG desire to agree on the
responsibilities of each party relating to Taxes. For purposes of this
Agreement, the term "Tax" shall mean any federal, state, local, foreign and
other income, profits, franchise, capital, withholding, unemployment insurance,
social security, occupational, production, severance, gross receipts, value
added, sales, use, excise, real and personal property, ad valorem, occupancy,
transfer, employment, disability, workers' compensation or other similar tax,
duty or other governmental charge (including all interest and penalties thereon
and additions thereto).
2
<PAGE> 3
NOW, THEREFORE, Chrysler and DTAG agree as follows:
Section 1. Prior Tax Sharing Arrangements.
(a) Generally. Except as otherwise provided in this Agreement,
all Tax indemnification agreements, Tax sharing agreements and similar
arrangements, whether formal or informal, between any member of the Chrysler
Group, on the one side, and any member of the DTAG Group, on the other side,
entered into prior to the Completion Date shall terminate as of the Completion
Date and no additional payments shall be made thereunder.
(b) 1996 Tax Return. Before the Completion Date, the parties
will make the appropriate tax sharing payment (whether by adjustment to
intercompany accounts or otherwise) with respect to the federal income taxes of
the DTAG Group for the taxable year ended December 31, 1996, which payment shall
be determined in accordance with past practice and based on the assumption that
any available alternative minimum tax credits (such available credits being $3.6
million) were fully utilized by the Chrysler Group in such taxable year. For the
avoidance of doubt, all other tax sharing arrangements with respect to such
taxable year shall be governed by this Agreement.
3
<PAGE> 4
Section 2. Tax Indemnification
(a) Chrysler's Responsibility. Except as otherwise provided
under this Agreement (including under Section 4), Chrysler shall pay or cause to
be paid, and shall indemnify, hold harmless and reimburse DTAG for and against
(i) all federal income Taxes of the Chrysler Group and (ii) all income Taxes of
the Chrysler Combined Groups.
(b) DTAG's Responsibility. DTAG shall pay or cause to be paid,
and shall indemnify, hold harmless and reimburse Chrysler for all Taxes payable
by or with respect to any member of the DTAG Group that are not described as
being the responsibility of Chrysler in Section 2(a), including, without
limitation, (i) all federal income Taxes on the income of any member of the DTAG
Group not includible in a federal consolidated income Tax return of the Chrysler
Group, (ii) state, local or foreign income Taxes on the income of any member of
the DTAG Group not includible in a return of a Chrysler Combined Group, and
(iii) all Taxes of any member of the DTAG Group other than income Taxes.
Section 3. Returns.
(a) Chrysler's Responsibility. Chrysler and DTAG shall cause
each member of the DTAG Group, to the extent permitted by law, to join, for all
taxable periods ending on or before the Completion Date, in the consolidated
federal income Tax
4
<PAGE> 5
returns of the Chrysler Group and in the return of each Chrysler Combined Group
of which it is a member. The income, deductions and credits of any such member
of the DTAG Group for periods ending on or before the Completion Date shall be
included in such consolidated federal income Tax returns and the returns of any
applicable Chrysler Combined Groups. Chrysler shall timely file, or cause to be
timely filed, all such consolidated federal income Tax returns and all such
returns of the Chrysler Combined Groups.
(b) DTAG's Responsibility. DTAG shall file, or cause to be
filed, all returns relating to the business or assets of any member of the DTAG
Group other than those returns described in Section 3(a). The income, deductions
and credits of any member of the DTAG Group, other than those required to be
included in the returns described in Section 3(a), shall be included in the
returns described in the immediately preceding sentence, including, without
limitation, all items for taxable periods or portions thereof beginning after
the Completion Date.
Section 4. Stub Period Liability.
(a) With respect to the taxable period of the DTAG Group
ending on the Completion Date, Chrysler and DTAG shall determine prior to the
Completion Date, using the best information available as of the date of such
determination, the "DTAG Estimated Tax Liability," which shall be the amount of
federal income Tax that the
5
<PAGE> 6
DTAG Group would have paid if the DTAG Group had filed a separate consolidated
federal income Tax return for such taxable period, such liability (i) to be
based on the same elections made or intended to be made on the consolidated
federal income Tax return filed or to be filed by the Chrysler Group with
respect to such period, (ii) to be based on the assumption that no member of the
DTAG Group is entitled to any alternative minimum tax credit, investment tax
credit, net operating loss or other carryforward from any prior taxable period,
(iii) to be determined without regard to Section 168(d)(3) of the Code unless
the Chrysler Group is subject to such Section, (iv) to include, without
limitation, liability for federal income Taxes arising out of intercompany
transactions with respect to which deferred gain or loss of any member of the
DTAG Group will be restored upon the members of the DTAG Group ceasing to be
members of the Chrysler Group on the Completion Date, and (v) to reflect DTAG's
pro rata share for such period of the net operating loss of Snappy Car Rental
Inc. ("Snappy") that was reattributed to Chrysler pursuant to Treasury
regulation section 1.1502-20(g)(1) upon the sale of Snappy by DTAG on September
2, 1994 (which the parties agree shall be an amount equal to $2,143,100
multiplied by a fraction the numerator of which is the number of days from
January 1, 1997 to and including the Completion Date and the denominator of
which is 365 (such amount, the "Snappy NOL")).
6
<PAGE> 7
(b) If for the taxable period described in Section 4(a), the
DTAG Estimated Tax Liability exceeds the total Tax sharing payments made by DTAG
to Chrysler (whether through adjustment of intercompany accounts or otherwise)
with respect to such taxable period, DTAG shall pay the amount of such excess to
Chrysler. If the total Tax sharing payments made by DTAG to Chrysler (whether
through adjustment of intercompany accounts or otherwise) for such taxable
period exceed the DTAG Estimated Tax Liability for such period, Chrysler shall
refund the excess to DTAG. The payments from DTAG to Chrysler (or a designated
subsidiary of Chrysler) or the refund from Chrysler to DTAG (or a designated
subsidiary of DTAG) under this Section 4(b) shall be made without interest and
shall occur on or prior to the Completion Date.
(c) Payments made under Section 4(b) shall be fixed on or
prior to the Completion Date at a sum certain reflecting the parties' best
estimate of the DTAG Estimated Tax Liability and, except as provided in Section
4(d), shall not be adjusted for any reason after the Completion Date, including
as a result of any audit or other proceeding concerning Taxes.
(d) If, upon preparation by Chrysler of its final consolidated
federal income Tax return for the taxable year ended December 31, 1997, the
actual amount of federal income Tax that the DTAG Group would have paid if the
DTAG Group had filed a separate consolidated federal income Tax return for the
taxable period ending on
7
<PAGE> 8
the Completion Date (as determined in good faith, subject to Section 11, by
Chrysler and DTAG), such amount (i) to be based on the same elections made or
intended to be made on the consolidated federal income Tax return filed or to be
filed by the Chrysler Group with respect to such period, (ii) to be based on the
assumption that no member of the DTAG Group is entitled to any alternative
minimum tax credit, investment tax credit, net operating loss or other
carryforward from any prior taxable period, (iii) to be determined without
regard to Section 168(d)(3) of the Code unless the Chrysler Group is subject to
such Section, (iv) to include, without limitation, liability for federal income
Taxes arising out of intercompany transactions with respect to which deferred
gain or loss of any member of the DTAG Group will be restored upon the members
of the DTAG Group ceasing to be members of the Chrysler Group on the Completion
Date, and (v) to reflect the Snappy NOL (the "DTAG Actual Tax Liability")
exceeds the DTAG Estimated Tax Liability, DTAG shall pay to Chrysler an amount
equal to such excess. If the DTAG Estimated Tax Liability exceeds the DTAG
Actual Tax Liability, Chrysler shall pay to DTAG an amount equal to such excess.
Payment under this Section 4(d) shall be made no later than ninety (90) days
after the date on which Chrysler files its final consolidated federal income tax
return for the taxable year ended December 31, 1997 with the Internal Revenue
Service (the "Final Settlement Date"). Any amount paid pursuant to this Section
4(d) shall be treated by the parties for all Tax purposes as an inter-company
settlement of liabilities existing on the Completion Date.
8
<PAGE> 9
(e) Payments made under Section 4(d) shall not be adjusted for
any reason after the Final Settlement Date, including as a result of any audit
or other proceeding concerning Taxes.
Section 5. Conduct of Business on Completion Date.
DTAG shall cause each member of the DTAG Group to carry on its
business on the Completion Date only in the ordinary course and in substantially
the same manner as theretofore conducted.
Section 6. Audits.
Chrysler shall have the right to exercise, at Chrysler's
expense, complete control at any time over the handling, disposition and/or
settlement of any issue raised in any official inquiry, audit, examination,
court proceeding or other proceeding regarding (i) federal income Taxes of (x)
the Chrysler Group for any taxable year and (y) any member of the DTAG Group for
any taxable year ending on or before the Completion Date or (ii) income Taxes
reported by any Chrysler Combined Group. Furthermore, each of Chrysler and DTAG
shall notify the other in writing within 30 days of learning that any issue that
could have an effect on the income Taxes of the other has been raised in the
course of any official examination, inquiry or proceeding
9
<PAGE> 10
and shall keep such other company informed of material developments concerning
such issue.
Section 7. No Carrybacks.
To the extent permitted by applicable law or regulations, each
member of the DTAG Group, as applicable, shall elect to relinquish the carryback
period with respect to any loss or credit from a taxable year of such member
beginning after the Completion Date to a consolidated return year of the
Chrysler Group. To the extent that any such carryback is not so relinquished,
Chrysler shall be entitled to retain any refund of Tax or other benefit
resulting from such carryback.
Section 8. Refunds and Timing Adjustments.
(a) Refunds. Any refunds or credits of federal income Taxes or
Taxes included in a return of a Chrysler Combined Group, in either case,
relating to any member of the DTAG Group (including, without limitation, refunds
and credits arising by reason of amended returns filed after the Completion
Date) received after the Completion Date shall be for the account of Chrysler if
the refunds or credits are received in respect of taxable periods or portions
thereof ending on or before the Completion Date and shall be for the account of
DTAG (or the applicable member of the DTAG Group) in all other cases. Any party
receiving a refund or credit that is for
10
<PAGE> 11
the account of the other party hereunder shall promptly pay to the other party
an amount equal to the amount of such refund or credit after the receipt thereof
plus any interest received or credited with respect thereto from the applicable
taxing authority.
(b) Timing Adjustments. If as the result of a Final
Determination the Tax liability of any member of the Chrysler Group or a
Chrysler Combined Group with respect to a taxable period or portion thereof
ending on or before the Completion Date is increased because of the erroneous
treatment of any item of income, deduction, credit or other factor affecting the
determination of Tax liability, which, when corrected, produces a Tax benefit to
any member of the DTAG Group with respect to a taxable period beginning after
the Completion Date, DTAG shall pay to Chrysler upon its receipt or application
of all or any portion of such related Tax benefit an amount equal to the amount
of such benefit or portion thereof. If as the result of a Final Determination
the federal income Tax liability of any member of the DTAG Group with respect to
a taxable period or portion thereof beginning after the Completion Date is
increased because of the erroneous treatment of any item of income, deduction,
credit or other factor affecting the determination of federal income Tax
liability, which, when corrected, produces a federal income Tax benefit to the
Chrysler Group with respect to a taxable period ending on or before the
Completion Date, Chrysler shall pay to DTAG upon its receipt or application of
all or any portion of such related federal income Tax benefit an amount equal to
the amount of such benefit or portion thereof;
11
<PAGE> 12
provided that this sentence shall have no application with respect to any item
or issue that has been raised or has been the subject of discussion or agreement
between any member of the Chrysler Group and the Internal Revenue Service or
between any member of the DTAG Group and any member of the Chrysler Group prior
to the date hereof. For purposes of this Agreement, Final Determination shall
mean (i) a decision, judgment, decree or other order by any court of competent
jurisdiction that has become final and unappealable or (ii) a closing agreement
or other settlement in connection with an administrative or judicial proceeding
which is not subject to further review or approval.
Section 9. Cooperation.
Chrysler and DTAG shall each provide the other with such
assistance and information as the other shall reasonably request in connection
with the preparation or filing of any Tax return or report or claim for refund,
or in connection with any audit or other proceeding in respect of Taxes. Such
assistance and information shall include, without limitation, providing copies
of all relevant Tax returns or reports, together with the accompanying schedules
and related work papers, documents related to rulings or other determinations by
taxing authorities, records concerning the ownership and Tax basis of property
which either party may possess. With respect to the DTAG Actual Tax Liability,
DTAG shall provide the relevant federal income Tax information to Chrysler, in a
timely manner and in substantially the same format and
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with the same level of completeness as the federal income Tax information with
respect to the DTAG Group provided by DTAG (or any other member of the DTAG
Group) to Chrysler for prior taxable years in which the DTAG Group was included
in the Chrysler Group. With respect to non-federal income Taxes of any member of
the DTAG Group for any period when such member was included in a Chrysler
Combined Group for which such Chrysler Combined Group has not yet filed a final
return, DTAG shall provide the relevant non-federal income Tax information to
Chrysler, in a timely manner and in substantially the same format and with the
same level of completeness as the non-federal income Tax information with
respect to such member provided by DTAG (or any other member of the DTAG Group)
to Chrysler for prior taxable years in which such member was included in such
Chrysler Combined Group. Each party shall make its employees available on a
mutually convenient basis to provide explanation of any documents or information
provided hereunder. Each party will retain all Tax returns and reports, related
schedules and work papers, and all material records and other documents relating
thereto, until the expiration of the statute of limitation (including
extensions) of the taxable years to which such Tax returns, reports and other
documents relate and, unless such Tax returns, reports and other documents are
offered to the other party, until the Final Determination of any payments which
may be required in respect to such years under this Agreement. Any information
obtained under this Section 9 shall be kept confidential, except as may be
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otherwise necessary in connection with the filing of Tax returns or reports or
claims for refunds or in connection with any audit or other proceeding.
Section 10. Payment of Claims.
(a) Except as provided in Section 4, any party seeking
payments under this Agreement at any time and from time to time shall give the
other party written notice of its claim, which notice shall include a
calculation, reasonably satisfactory to such other party, of the amount of the
requested payment. Subject to Section 11 of this Agreement, the other party
shall make the applicable payment within thirty (30) business days of its
receipt of such notice. Failure to give any party required to make payments
hereunder timely notice thereof will not affect such party's obligations
hereunder except to the extent that, but for such failure, such party could have
avoided all or any portion of such obligation.
(b) If any party fails to make a payment under this Agreement
when due, interest shall accrue on the amount of such payment, at a rate per
annum equal to the "prime rate" as quoted by Citibank, N.A. in effect at its
principal office in New York City on the business day immediately preceding the
date such payment was due plus 200 basis points, from the date such payment was
due to the date such payment is made.
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Section 11. Dispute Resolution.
This Agreement shall be governed by the laws of the State of
New York. Any dispute arising under this Agreement shall be resolved as follows:
(a) the parties will in good faith attempt to negotiate a settlement of the
dispute; (b) if the parties are unable to negotiate a resolution of the dispute
within 30 days, the dispute will be submitted for resolution by the national
office of Ernst and Young or other firm of independent accountants of nationally
recognized standing reasonably satisfactory to the parties (the "Neutral
Accountants"); (c) the Neutral Accountants will promptly resolve the dispute, in
a fair and equitable manner and in accordance with the applicable Tax law, and
the decision of the Neutral Accountants shall be final, conclusive and binding
on the parties; (d) any payment to be made as a result of the resolution of a
dispute shall be made, and any other action to be taken as a result of the
resolution of a dispute shall be taken, on or before the later of (i) the date
on which such payment or action would otherwise be required and (ii) the third
Business Day following the date on which the parties receive notification from
the Neutral Accountants of the resolution of the dispute; and (e) the fees and
expenses of the Neutral Accountants in resolving a dispute will be borne equally
by Chrysler and DTAG.
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Section 12. Notices.
All notices, requests and communications to any party
hereunder shall be in writing and shall be delivered at the address specified in
this Section:
If to the Chrysler Group:
Chrysler Corporation
1000 Chrysler Drive
Auburn Hills, Michigan 48326-2766
Attention: Corporate Secretary
Telecopy: (810) 512-1772
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention: Paul H. Wilson, Jr., Esq.
Telecopy: (212) 909-6836
Confirmation: (212) 909-6407
If to DTAG:
Dollar Thrifty Automotive Group, Inc.
5330 East 31st Street
Tulsa, Oklahoma 74153
Attention: Chief Financial Officer
Telecopy: (918) 669-2934
with a copy to:
Hall, Estill, Hardwick, Gable, Golden & Nelson
320 South Boston Avenue
Suite 400
Tulsa, Oklahoma 74103-3708
Attention: Stephen W. Ray
Telecopy: (918) 594-0505
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Section 13. Term.
This Agreement shall commence on the date of execution
indicated below and shall continue in effect until otherwise agreed to in
writing by Chrysler and DTAG, or their successors; provided that this Agreement
shall be appropriately amended if the Completion Date is on or after January 1,
1998 and shall have no effect if the Offering is abandoned.
Section 14. Severability.
If any term, provision or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions and restrictions shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 15. Counterparts.
This Agreement may be executed in any number of counterparts
each of which shall be an original; but such counterparts shall together
constitute one and the same instrument.
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Section 16. Assignment.
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns, but
shall not be assignable, by operation of law or otherwise, by any party hereto
without the prior written consent of the other parties.
Section 17. No Third Party Beneficiaries.
Except as otherwise provided herein, nothing in this Agreement
shall confer any rights upon any Person which is not a party or a successor or
permitted assignee of a party to this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers as of the 24th day of November, 1997.
CHRYSLER CORPORATION
By: /s/ Thomas P. Capo
----------------------------
Title: Treasurer
DOLLAR THRIFTY AUTOMOTIVE
GROUP, INC.
By: /s/ Steven B. Hildebrand
----------------------------
Title: Vice President, Chief
Financial Officer
and Treasurer
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Amendment No. 1 to Registration Statement No.
333-39661 of Dollar Thrifty Automotive Group, Inc. and subsidiaries (successor
to Pentastar Transportation Group, Inc. and subsidiaries) on Form S-1 of our
report dated November 6, 1997, appearing in the Prospectus, which is part of
this Registration Statement, and of our report dated November 6, 1997 relating
to the financial statement schedule appearing elsewhere in this Registration
Statement.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ Deloitte & Touche LLP
November 24, 1997
Tulsa, Oklahoma
<PAGE> 1
EXHIBIT 23.3
Consent of Donovan Leisure Newton & Irvine
We consent to the reference to our firm name Donovan Leisure Newton & Irvine in
the Registration Statement of Dollar Thrifty Automotive Group, Inc.,
Registration No. 333-39661.
Los Angeles, California
November 21, 1997
/s/ James B. Hicks
----------------------------------
James B. Hicks
For Donovan Leisure Newton & Irvine
