TEAM RENTAL GROUP INC, S-1/A, 1997-03-28

TEAM RENTAL GROUP INC
S-1/A, 1997-03-28
AUTO RENTAL & LEASING (NO DRIVERS)

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 28, 1997

REGISTRATION NO. 333-21691

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

AMENDMENT NO. 1 TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------

TEAM RENTAL GROUP, INC.
(Exact Name of Registrant as Specified in Charter)

<TABLE>
<S> <C> <C>
DELAWARE 7514 59-3227576
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

125 BASIN STREET
SUITE 210
DAYTONA BEACH, FLORIDA 32114
(904) 238-7035
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)

SANFORD MILLER
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
TEAM RENTAL GROUP, INC.
125 BASIN STREET
SUITE 210
DAYTONA BEACH, FLORIDA 32114
(904) 238-7035
(Name, address, including zip code, and telephone number, including area code of
agent for service)

COPIES TO:

<TABLE>
<C> <C>
JEFFREY M. STEIN KRIS F. HEINZELMAN
KING & SPALDING CRAVATH, SWAINE & MOORE
191 PEACHTREE STREET 825 EIGHTH AVENUE
ATLANTA, GEORGIA 30303 NEW YORK, NEW YORK 10019
(404) 572-4600 (212) 474-1000
</TABLE>

---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of the Registration Statement.
---------------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _________________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]____________________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
=======================================================================================================================
PROPOSED
TITLE OF CLASS AMOUNT MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED(1) PER SHARE OFFERING PRICE(2) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, par value $.01
per share............................ 7,475,000 shares $23.00 $171,925,000 $52,099(3)
=======================================================================================================================
</TABLE>

(1) Includes 975,000 shares which the Underwriters have the option to purchase
solely to cover over-allotments.

(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(a).

(3) A filing fee of $52,273 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 WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2

TEAM RENTAL GROUP, INC.
---------------------

CROSS-REFERENCE SHEET SHOWING THE LOCATION IN THE
PROSPECTUS OF CERTAIN ITEMS OF FORM S-1

<TABLE>
<CAPTION>
ITEM NO. LOCATION IN PROSPECTUS
-------- ----------------------
<S> <C> <C>
1. Forepart of the Registration Statement and Outside Front
Cover Page of Prospectus.............................. Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages of
Prospectus............................................ Inside Front Cover Page; Outside
Back Cover Page; Available
Information
3. Summary Information, Risk Factors and Ratio of Earnings
to Fixed Charges...................................... Prospectus Summary; Risk Factors
4. Use of Proceeds......................................... Prospectus Summary; Use of
Proceeds
5. Determination of Offering Price......................... Outside Front Cover Page;
Underwriting
6. Dilution................................................ *
7. Selling Security Holders................................ *
8. Plan of Distribution.................................... Outside Front Cover Page;
Underwriting
9. Description of Securities to be Registered.............. Outside Front Cover Page; Dividend
Policy; Capitalization;
Prospectus Summary; Description
of Capital Stock; Shares
Eligible for Future Sale
10. Interests of Named Experts and Counsel.................. Legal Matters; Experts
11. Information with Respect to the Registrant.............. Outside Front Cover Page;
Prospectus Summary; Risk Factors;
Use of Proceeds; Dividend
Policy; Capitalization; Pro
Forma Consolidated Financial
Statements of Budget Group;
Selected Financial Data of TEAM;
Management's Discussion and
Analysis of Financial Condition
and Results of Operations of
TEAM; Selected Financial Data of
BRACC; Management's Discussion
and Analysis of Financial
Condition and Results of
Operations of BRACC; Business of
Budget Group; The Budget
Acquisition; Management;
Principal Stockholders; Certain
Transactions; Description of
Capital Stock; Description of
Certain Indebtedness; Shares
Eligible for Future Sale;
Financial Statements
12. Disclosure of Commission Position on Indemnification for
Securities Act Liabilities............................ *
</TABLE>

- ---------------

* Item is omitted because response is negative or item is inapplicable.
<PAGE> 3

EXPLANATORY NOTE

This Registration Statement contains a prospectus relating to a public
offering in the United States and Canada (the "U.S. Offering") of an aggregate
of 5,200,000 shares of Class A Common Stock, par value $.01 per share ("Class A
Common Stock"), of Team Rental Group, Inc., together with separate prospectus
pages relating to a concurrent offering outside the United States and Canada
(the "International Offering") of an aggregate of 1,300,000 shares of Class A
Common Stock. The complete prospectus for the U.S. Offering follows immediately
after this Explanatory Note. After such prospectus are the following alternate
pages for the International Offering: the alternate front cover page for the
International Offering, a front inside cover page and the pages containing the
captions "Risk Factors -- Shares Eligible for Future Sale," "Shares Eligible for
Future Sale" and "Subscription and Sale." All other pages of the prospectus for
the U.S. Offering are to be used for both the U.S. Offering and the
International Offering, except the outside back cover page, which will be blank
in the prospectus for the International Offering, and information appearing
under "Notice to Canadian Residents," which will not be included in the
prospectus for the International Offering.

<PAGE> 4

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED MARCH 28, 1997

6,500,000 Shares

(TEAM RENTAL GROUP LOGO)
TEAM RENTAL GROUP, INC.

Class A Common Stock
($.01 par value)
---------------------

The 6,500,000 shares of Class A Common Stock of Team Rental Group, Inc. ("TEAM")
offered hereby are being sold by TEAM in connection with the acquisition by TEAM
of all the outstanding capital stock of Budget Rent a Car Corporation (the
"Budget Acquisition"). The net proceeds of the Offering, together with a portion
of the net proceeds of concurrent financing transactions, will be used to
finance the Budget Acquisition.

Of the 6,500,000 shares of Class A Common Stock being offered, 5,200,000 shares
(the "U.S. Shares") are initially being offered in the United States and Canada
by the U.S. Underwriters (the "U.S. Offering") and 1,300,000 shares (the
"International Shares") are initially being concurrently offered outside the
United States and Canada by the Managers (the "International Offering" and,
together with the U.S. Offering, the "Offering"). The offering price and
underwriting discounts and commissions of the U.S. Offering and the
International Offering will be identical.

The Class A Common Stock is listed on The Nasdaq Stock Market's National Market
under the symbol "TBUD." TEAM has made application for the Class A Common Stock
to be listed on the New York Stock Exchange ("NYSE") under the symbol "BD." On
March 21, 1997, the last reported sale price of the Class A Common Stock on The
Nasdaq National Market was $22.375 per share. See "Price Range of Common Stock."

TEAM has two classes of Common Stock, the Class A Common Stock, par value $.01
per share (the "Class A Common Stock"), and the Class B Common Stock, par value
$.01 per share (the "Class B Common Stock"). Holders of the Class A Common Stock
are entitled to one vote per share and holders of the Class B Common Stock are
entitled to ten votes per share. Upon completion of the Offering, the principal
executive officers of TEAM will retain 55.4% of the combined voting power of
both classes of Common Stock. See "Principal Stockholders."

TEAM has arranged to place, concurrently with the consummation of the Offering,
(i) $50,000,000 aggregate principal amount of % Convertible Subordinated
Notes, Series B, due 2007 and (ii) $125,000,000 aggregate principal amount of
% Guaranteed Senior Notes due 2007 (collectively, the "Debt Placements").
The Debt Placements are private offerings and will not be registered with the
Securities and Exchange Commission. TEAM is also concurrently entering into new
credit facilities for fleet financings (the "New Fleet Financings") with an
aggregate commitment of $1.3 billion. Consummation of the Offering will occur
concurrently with, and is conditioned upon, consummation of the Budget
Acquisition, the Debt Placements and the New Fleet Financings.

FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN INVESTMENT IN THE CLASS A COMMON STOCK, SEE "RISK FACTORS" BEGINNING ON PAGE
14.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS TEAM(1)
----------- ------------- -----------
<S> <C> <C> <C>
Per Share............................................ $ $ $
Total(2)............................................. $ $ $
</TABLE>

(1) Before deduction of expenses payable by TEAM estimated at $800,000.

(2) TEAM has granted the U.S. Underwriters and the Managers an option,
exercisable by Credit Suisse First Boston Corporation for 30 days from the
date of this Prospectus, to purchase a maximum of 975,000 additional shares
of Class A Common Stock solely to cover over-allotments of shares, if any.
If the option is exercised in full, the total Price to Public will be
$ , Underwriting Discounts and Commissions will be $
and Proceeds to TEAM will be $ .

The U.S. Shares are offered by the several U.S. Underwriters when, as and
if issued by TEAM, delivered to and accepted by the U.S. Underwriters and
subject to their right to reject orders in whole or in part. It is expected that
the U.S. Shares will be ready for delivery on or about , 1997,
against payment in immediately available funds.

CREDIT SUISSE FIRST BOSTON
ABN AMRO CHICAGO CORPORATION

ALEX. BROWN & SONS
INCORPORATED
MCDONALD & COMPANY
SECURITIES, INC.
Prospectus dated , 1997.
<PAGE> 5

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS, PENALTY BIDS AND PASSIVE MARKET MAKING. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

2
<PAGE> 6

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the financial statements
and notes thereto appearing elsewhere in this Prospectus. As used in this
Prospectus, unless the context otherwise requires, (i) "TEAM" refers to Team
Rental Group, Inc. and its subsidiaries prior to the Budget Acquisition; (ii)
"BRACC" refers to Budget Rent a Car Corporation and its subsidiaries prior to
the Budget Acquisition; (iii) "Budget Group" refers to TEAM (including BRACC)
after giving effect to the Budget Acquisition; and (iv) the "Budget System" or
"Budget" refers to the business of renting cars and trucks and retailing late
model vehicles conducted by BRACC and its franchisees (including TEAM). Upon
completion of the Budget Acquisition, Team Rental Group, Inc. will change its
name to "Budget Group, Inc." Consummation of the Offering will occur
concurrently with, and is conditioned upon, consummation of the Budget
Acquisition, the Debt Placements and the New Fleet Financings. The information
set forth herein assumes no exercise of the Underwriters' over-allotment option.
"Common Stock," as used herein, refers collectively and without distinction to
the Class A Common Stock and the Class B Common Stock of TEAM.

BUDGET GROUP

Budget Group and its franchisees operate the third largest worldwide
general use car and truck rental system, with approximately 3,200 locations and
a peak fleet size during 1996 of 266,000 cars and 18,000 trucks. The Budget
System includes locations in both the airport and local (downtown and suburban)
markets in all major metropolitan areas in the United States, in many other
small and mid-size U.S. markets and in more than 110 countries worldwide. Pro
forma for the Budget Acquisition, the Budget System included approximately 455
company-owned locations in the United States at December 31, 1996, accounting
for approximately 76% of 1996 U.S. system-wide revenues. In addition, Budget
franchisees operated approximately 500 royalty-paying franchise locations in the
United States at December 31, 1996. Budget is one of only three vehicle rental
systems that offer rental vehicles throughout the world under a single brand
name, with locations in Europe, Canada, Latin America, the Middle East,
Asia/Pacific and Africa. The Budget System currently maintains more local market
rental locations throughout the world than its major competitors. The Budget
System is also unique among major car rental systems in that it rents trucks in
most major markets worldwide. The Budget System's consumer truck rental fleet is
the fourth largest in the United States.

Budget Group is also one of the largest independent retailers of late model
vehicles in the United States, operating 22 retail car sales facilities with pro
forma revenues of $257.8 million for 1996. Upon consummation of the Budget
Acquisition, Budget Group will continue to operate its retail car sales
facilities under the name "Budget Car Sales."

BACKGROUND

On January 13, 1997, TEAM (the largest Budget franchisee in the United
States) entered into stock purchase agreements (the "Stock Purchase Agreements")
with Ford Motor Company ("Ford"), BRACC and the common stockholder of BRACC,
pursuant to which TEAM agreed to acquire the capital stock of BRACC. The total
amount of funds required by TEAM to consummate the Budget Acquisition is
expected to be approximately $275.0 million, which will be financed in part
through the sale of the Class A Common Stock offered hereby. TEAM will also
issue to Ford approximately 4,500 shares of a new series of non-voting preferred
stock (the "Series A Convertible Preferred Stock"), which does not carry a
dividend and which will be convertible into 4,500,000 shares of Class A Common
Stock (subject to adjustment in certain cases), representing upon conversion
approximately 22.1% of the outstanding Class A Common Stock after giving effect
to the Offering. Each share of Series A Convertible Preferred Stock will
automatically be converted into 1,000 shares of Class A Common Stock at such
time as the record ownership of such share of Series A Convertible Preferred
Stock is transferred to or held by any person or any entity other than Ford or
any affiliate of Ford. TEAM is also obligated under the Stock Purchase
Agreements to refinance approximately $856.2 million of indebtedness outstanding
under BRACC's existing fleet financing facilities. See "The Budget Acquisition"
and "Use of Proceeds." For information with respect to the operations of TEAM
and BRACC prior to the Budget Acquisition, see "Business of Budget Group."

3
<PAGE> 7

STRATEGY

Management's long-term strategy is to create an automotive services company
which leverages the asset base and expertise of Budget Group. Budget Group's
assets include a trade name that is recognized around the world; locations for
the rental, sale and maintenance of vehicles; a workforce that is proficient in
acquiring, financing, monitoring, maintaining and selling cars and trucks; and
advanced information systems to support these operations. Increasing the
utilization of these assets by acquiring automobile-related businesses would
reduce Budget Group's unit costs and increase profitability. In the near term,
management has developed a business strategy designed to increase the revenues
and improve the profitability of Budget Group. Key elements of this strategy are
as follows:

Enhance the Budget Brand. Following the Budget Acquisition, the
Budget System will be approximately 76% company-owned in the United States,
giving Budget Group a percentage of company-owned locations that management
believes to be higher than many of its principal competitors. Management
believes this high level of corporate ownership is a competitive advantage
in the marketplace. It facilitates more consistent delivery of high quality
services and improved operations and communications, thereby strengthening
the Budget brand name among customers. In addition, Budget Group's
structure will facilitate national advertising and marketing programs
designed to increase the public's awareness of the Budget brand. Management
believes that there will be continuing opportunities to further consolidate
the Budget System by acquiring additional franchise operations, and that
such consolidation will further strengthen the Budget brand.

Improve the Performance of Car Rental Operations. Historically, TEAM
has enhanced the profitability of its acquired franchise territories by
reducing operating costs and increasing rental revenue. Similarly, in 1996,
BRACC began initiatives that are already significantly improving the
performance of its company-owned operations. Upon completion of the Budget
Acquisition, management believes Budget Group will be able to combine key
elements of the TEAM and BRACC strategies to achieve even greater operating
efficiencies. Budget Group expects to undertake significant initiatives to
(i) enhance the performance of its U.S. car rental operations, (ii)
capitalize on the increased level of company-owned locations, (iii)
increase its marketing to corporate accounts, (iv) place increased emphasis
on the leisure and local rental markets, and (v) expand and improve
Budget's international operations.

Continue to Expand Retail Car Sales Operations. The increased cost of
new cars and the improved reliability of low-mileage, late model cars have
contributed to greater market demand for late model cars in recent years.
Budget Group, with 22 retail car sales facilities and pro forma car sales
revenues of $257.8 million for 1996, will be one of the largest independent
retailers of late model vehicles in the United States. Budget Group plans
to establish a nationally recognized retail car sales operation which will
provide low-mileage, late model vehicles to consumers in a new car sales
environment under the Budget Car Sales brand.

Expand Truck Rental Operations. The Budget System is unique among
major car rental systems in that it rents trucks to consumers and
commercial users in most major markets worldwide, with the fourth largest
consumer truck rental fleet in the United States. Management expects Budget
Group to add truck rental locations in various markets, particularly in
conjunction with the addition of new local market locations. Management
believes that adding truck rental locations will leverage certain fixed
costs and increase consumer awareness of the Budget brand, while favorable
pricing trends in the truck rental market are expected to provide
attractive returns on invested capital.
---------------------

Sanford Miller (Chairman and Chief Executive Officer), John P. Kennedy
(President and Chief Operating Officer) and Jeffrey D. Congdon (Chief Financial
Officer and Secretary) (collectively, the "Principal Executive Officers")
together have over 75 years of experience in the vehicle rental business and
have acquired and operated 54 Budget franchises over the past 15 years. In
addition, Messrs. Miller and Congdon together have over 25 years of experience
operating retail car sales facilities.

The principal executive offices of TEAM are located at 125 Basin Street,
Suite 210, Daytona Beach, Florida 32114, and its telephone number at that
location is (904) 238-7035.
4
<PAGE> 8

THE BUDGET ACQUISITION

On January 13, 1997, TEAM entered into the Stock Purchase Agreements,
pursuant to which TEAM agreed to acquire the capital stock of BRACC. The
consideration to be paid by TEAM pursuant to the Stock Purchase Agreements
consists of (i) approximately $275.0 million in cash (the "Cash Consideration")
and (ii) the issuance to Ford of 4,500 shares of TEAM's newly created Series A
Convertible Preferred Stock (the "Equity Consideration"), each subject to
adjustment as described herein. See "The Budget Acquisition." Each share of
Series A Convertible Preferred Stock will be non-voting, will not carry a
dividend and will automatically be converted into 1,000 shares of Class A Common
Stock at such time as the record ownership of such share of Series A Convertible
Preferred Stock is transferred to or held by any person or any entity other than
Ford or any affiliate of Ford. Under the Stock Purchase Agreements, BRACC will
be obligated to repay a portion of its outstanding indebtedness to Ford (as
described in note (d) below), and Ford will cancel a portion of the remaining
outstanding BRACC indebtedness (as described in note (c) below). The obligations
of TEAM, Ford, BRACC and the other parties to the Stock Purchase Agreements to
consummate the Budget Acquisition are subject to the satisfaction (or waiver) of
certain conditions. The consummation of the Offering will occur concurrently
with, and is conditioned upon, consummation of the Budget Acquisition, the Debt
Placements and the New Fleet Financings, and will provide a portion of the
financing for the Budget Acquisition.

The estimated sources and uses of consideration required to complete the
Budget Acquisition are presented in the following table (assuming consummation
of the Transactions (as defined in "Pro Forma Consolidated Financial Statements
of Budget Group") on March 21, 1997):

<TABLE>
<CAPTION>
AMOUNT
-------------
(IN MILLIONS)
<S> <C>
SOURCES:
Class A Common Stock offered hereby(a).................... $145.4
Series A Convertible Preferred Stock(b)................... 100.7
% Convertible Subordinated Notes, Series B, due
2007................................................... 50.0
% Guaranteed Senior Notes due 2007................. 125.0
New Fleet Financings(c)................................... 835.8
---------
Total sources..................................... $1,256.9
=========
USES:
Budget Acquisition(d)..................................... $375.7
Repayment of BRACC Fleet Financing Facilities(e).......... 856.2
Fees and expenses(f)...................................... 25.0
---------
Total uses........................................ $1,256.9
=========
</TABLE>

- ---------------

(a) Assumes a public offering price of $22.375 per share (based on the closing
price of the Class A Common Stock on March 21, 1997).

(b) Represents the value of the 4,500 shares of Series A Convertible Preferred
Stock based on the closing price of the Class A Common Stock on March 21,
1997. See "The Budget Acquisition -- Terms of the Stock Purchase
Agreement -- Consideration."

(c) Represents the amount drawn at closing under the New Fleet Financings
assuming a fleet size for Budget Group equivalent to the combined fleet size
of TEAM and BRACC at March 21, 1997.

(d) Represents (i) $275.0 million to purchase common stock of BRACC (of which
$274.0 million will be paid to BRACC for newly issued shares of BRACC common
stock and $1.0 million will be paid to the common stockholder of BRACC) and
(ii) $100.7 million of Series A Convertible Preferred Stock to be issued to
Ford (based on the value of 4,500,000 shares of Class A Common Stock as of
March 21, 1997). BRACC will use the $274.0 million in cash that it receives
as follows: (i) $269.0 million to repay outstanding indebtedness of BRACC to
Ford and (ii) $5.0 million to redeem outstanding Series X Preferred Stock
(the "Series X Preferred Stock"). In addition, concurrently with the Budget
Acquisition, Ford will cancel $128.3 million of additional outstanding BRACC
indebtedness.

(e) Represents (i) $370.7 million outstanding under a commercial paper facility,
(ii) $366.2 million of the vehicle facility provided by Ford to finance
non-Ford vehicles and (iii) $198.3 million of the vehicle facility provided
by Ford to finance Ford vehicles, net of $79.0 million of fleet indebtedness
to be forgiven by Ford, which represents the remaining portion of the $128.3
million of outstanding BRACC indebtedness to be cancelled by Ford which was
first applied to extinguish the existing working capital facility balance of
$419.0 million. See "Capitalization."

(f) Includes underwriting discounts and commissions in connection with the
Offering, the Debt Placements and the New Fleet Financings.

5
<PAGE> 9

THE OFFERING

<TABLE>
<S> <C> <C>
Class A Common Stock offered:
U.S. Offering.............................. 5,200,000 shares
International Offering..................... 1,300,000 shares
----------
Total(a)........................... 6,500,000 shares
==========

Shares to be outstanding after the Offering:
Class A Common Stock....................... 15,820,383 shares
Class B Common Stock....................... 1,936,600 shares
----------
Total(a)(b)........................ 17,756,983 shares
==========
Voting rights................................ Holders of the Class A Common Stock are entitled to
one vote per share and holders of the Class B Common
Stock are entitled to ten votes per share.

Concurrent financings........................ TEAM has arranged to place, concurrently with the
Offering, (i) $50,000,000 aggregate principal amount
of % Convertible Subordinated Notes, Series B,
due 2007 (the "Series B Convertible Notes") and (ii)
$125,000,000 aggregate principal amount of %
Guaranteed Senior Notes due 2007 (the "Guaranteed
Senior Notes"). The Debt Placements are private
offerings and will not be registered with the
Securities and Exchange Commission. TEAM is also
concurrently entering into new credit facilities for
fleet financings with an aggregate commitment of $1.3
billion. Consummation of the Offering will occur
concurrently with, and is conditioned upon,
consummation of the Budget Acquisition, the Debt
Placements and the New Fleet Financings. See
"Management's Discussion and Analysis of Financial
Condition and Results of Operations of TEAM --
Liquidity and Capital Resources -- Pro Forma Liquidity
and Capital Resources for Budget Group."

Use of proceeds.............................. The proceeds from the Offering will be used to provide
a portion of the financing for the Budget Acquisition.
See "Use of Proceeds" and "The Budget Acquisition."

Nasdaq National Market symbol................ TBUD

Proposed NYSE symbol......................... BD
</TABLE>

- ---------------

(a) In the event the over-allotment option is exercised in full, the total
number of shares of Class A Common Stock to be offered and the total number
of shares of Class A Common Stock to be outstanding after the Offering
would be 7,475,000 and 16,795,383, respectively.

(b) Does not include (i) 3,986,049 shares of Class A Common Stock issuable upon
conversion of TEAM's outstanding 7.0% Convertible Subordinated Notes,
Series A, due 2007 (the "Series A Convertible Notes"; together with the
Series B Convertible Notes, the "Convertible Subordinated Notes"); (ii)
1,428,571 shares of Class A Common Stock issuable upon conversion of the
Series B Convertible Notes; (iii) 4,500,000 shares of Class A Common Stock
issuable upon conversion of the Series A Convertible Preferred Stock to be
issued to Ford in the Budget Acquisition; (iv) 1,893,800 shares of Common
Stock reserved for issuance under TEAM's stock option plans (subject to
stockholder approval as described under "Description of Capital Stock"), of
which options to purchase 635,850 shares of Class A Common Stock and
164,000 shares of Class B Common Stock are outstanding; (v) 362,500 shares
of the Class A Common Stock reserved for issuance upon exercise of
outstanding warrants; and (vi) 36,667 shares of Class A Common Stock
repurchased by TEAM. See "Management -- Benefit Plans" and "Description of
Capital Stock -- Warrants."

6
<PAGE> 10

SUMMARY PRO FORMA FINANCIAL DATA OF BUDGET GROUP

The following tables set forth summary unaudited pro forma financial data
of Budget Group, which data were derived from the Pro Forma Consolidated
Statement of Operations for the year ended December 31, 1996 and the Pro Forma
Consolidated Balance Sheet as of December 31, 1996 included elsewhere in this
Prospectus. The pro forma statement of operations data and other data give
effect to the 1996 TEAM Transactions and the Budget Acquisition Transactions
(each as defined under "Pro Forma Consolidated Financial Statements of Budget
Group") as if they each had occurred at January 1, 1996 and the pro forma
balance sheet data give effect to the Budget Acquisition Transactions as if they
each had occurred on December 31, 1996. The information below should be read in
conjunction with the Pro Forma Consolidated Financial Statements and the notes
thereto included elsewhere in this Prospectus. The summary unaudited pro forma
financial data set forth below are presented for information purposes only and
do not purport to represent what Budget Group's results of operations or
financial condition would have been had the Transactions actually occurred on
the dates indicated or to predict Budget Group's results of operations or
financial condition in the future.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
-------------------------------------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenue:
Vehicle rental revenue.................................... $1,197,888
Royalty fees.............................................. 52,711
Retail car sales revenue.................................. 246,936
Other..................................................... 14,693
------------
Total operating revenues........................... 1,512,228
------------
Operating costs and expenses:
Direct vehicle and operating.............................. 152,039
Depreciation -- vehicle................................... 327,436
Depreciation -- non-vehicle............................... 29,577
Cost of car sales......................................... 212,330
Sales, general and administrative......................... 613,769
Amortization.............................................. 8,826
------------
Total operating costs and expenses................. 1,343,977
------------
Operating income............................................ 168,251
------------
Other (income) expense:
Vehicle interest expense.................................. 104,294
Non-vehicle interest expense.............................. 20,954
Interest income -- restricted cash........................ (1,818)
------------
Total other (income) expense....................... 123,430
------------
Income before income taxes.................................. 44,821
Provision for income taxes................................ 18,821
------------
Net income......................................... $ 26,000
============
Weighted average common and common equivalent shares
outstanding:
Primary................................................... 22,454
Fully diluted............................................. 26,493
Earnings per common and common equivalent share:
Primary................................................... $ 1.16
Fully diluted............................................. 1.11
============
OTHER DATA:
EBITDA(a)................................................... 535,908
Adjusted EBITDA(a).......................................... 104,178
Ratio of Adjusted EBITDA to non-vehicle interest expense.... 5.0x
</TABLE>

7
<PAGE> 11

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
1996
------------------
(IN THOUSANDS)
<S> <C>
BALANCE SHEET DATA:
Revenue earning vehicles, net............................. $1,623,232
Vehicle inventory......................................... 30,712
Total assets.............................................. 2,648,619
Fleet financing facilities................................ 1,621,519
Notes payable............................................. 319,538
Total debt................................................ 1,941,637
Stockholders' equity...................................... 328,889
</TABLE>

- ---------------

(a) EBITDA consists of income before income taxes plus (i) vehicle interest
expense, (ii) non-vehicle interest expense, (iii) vehicle depreciation
expense and (iv) non-vehicle depreciation and amortization expenses.
Adjusted EBITDA consists of income before income taxes plus (i) non-vehicle
depreciation and amortization expenses and (ii) non-vehicle interest
expense. EBITDA and Adjusted EBITDA are not presented as, and should not be
considered, alternative measures of operating results or cash flows from
operations (as determined in accordance with generally accepted accounting
principles), but are presented because they are widely accepted financial
indicators of a company's ability to incur and service debt.

8
<PAGE> 12

SUMMARY OPERATING DATA FOR THE BUDGET SYSTEM

The following tables set forth summary operating data of the Budget System
for the year ended, and as of, December 31, 1996. References to revenues of the
Budget System include revenues received by BRACC and its franchisees for the
rental of cars and trucks. The respective revenue contributions of locations
owned by Budget Group or BRACC (referred to as "company-owned" locations) have
been determined by reference to the size of the vehicle fleet operated from
those locations, in that fleet size generally corresponds to revenue
contribution for any particular period. Company-owned and franchised Budget
locations operate within the integrated Budget System and management believes
that system-wide data are useful in analyzing the operations and market position
of the overall Budget System, as well as the relative contributions of
company-owned and franchised locations. Operations and operating data for
franchisees set forth or reflected in system-wide data are based on reports
provided to BRACC by franchisees in accordance with their franchise agreements
and are not based on audited historical financial statements of those
franchisees.

<TABLE>
<CAPTION>
YEAR ENDED PERCENT OF
DECEMBER 31, 1996 BUDGET SYSTEM
----------------- ----------------
(IN THOUSANDS)
<S> <C> <C>
SYSTEM-WIDE DATA:
Vehicle rental revenues:
United States:
BRACC-owned......................................... $ 871,841 61.0%
TEAM-owned.......................................... 234,124(a) 16.4
Other franchisees................................... 323,818 22.6
---------- ------
Total United States ............................. 1,429,783 100.0%
---------- ======
International:
BRACC-owned......................................... 91,923 8.5%
Franchisees......................................... 984,368 91.5
---------- ------
Total International.............................. 1,076,291 100.0%
---------- ======
Total Budget System............................ $2,506,074
==========
Car sales revenues:
BRACC................................................. $ 91,503
TEAM.................................................. 155,433(b)
----------
Total Budget Group............................... $ 246,936
==========
</TABLE>

<TABLE>
<CAPTION>
AS OF PERCENT OF
DECEMBER 31, 1996 BUDGET SYSTEM
----------------- ----------------
<S> <C> <C>
RENTAL LOCATIONS IN OPERATION:
United States:
BRACC-owned........................................... 304 31.8%
TEAM-owned............................................ 152 15.9
Other franchisees..................................... 500 52.3
------- ------
Total United States ............................. 956 100.0%
======= ======
International:
BRACC-owned........................................... 70 3.1%
Franchisees........................................... 2,182 96.9
------- ------
Total International.............................. 2,252 100.0%
======= ======
</TABLE>

- ---------------

(a) Pro forma to give effect to the acquisition of VPSI, Inc. ("Van Pool") and
the Phoenix Acquisition (as hereinafter defined) as if such acquisitions had
been consummated on January 1, 1996.

(b) Pro forma to give effect to the ValCar Acquisition (as hereinafter defined)
as if such acquisition had been consummated on January 1, 1996.

9
<PAGE> 13

SUMMARY FINANCIAL DATA OF TEAM

The following tables set forth summary historical consolidated financial
data for TEAM, which data were derived from the audited Consolidated Financial
Statements of TEAM, except for the Rental Data and Retail Car Sales Data. The
information below should be read in conjunction with the Consolidated Financial
Statements of TEAM and the notes thereto included elsewhere in this Prospectus
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations of TEAM."

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1994 1995 1996
-------- -------- ----------
(DOLLARS IN THOUSANDS EXCEPT PER
SHARE AND RENTAL DATA)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenue:
Vehicle rental revenue(a)....................... $ 38,642 $107,067 $ 223,250
Retail car sales revenue........................ -- 42,662 134,120
-------- -------- ----------
Total operating revenue.................... 38,642 149,729 357,370
Depreciation -- vehicle............................ 7,382 27,476 60,735
Operating income................................... 4,196 14,180 35,267
Vehicle interest expense........................... 3,909 13,874 25,336
Non-vehicle interest expense (income), net......... (139) (716) 838
Income before income taxes......................... 426 1,022 7,818
Net income......................................... 250 337 4,497
Weighted average common and common equivalent
shares outstanding (000s):
Primary......................................... 3,704 6,369 9,488
Fully diluted................................... 3,704 6,369 9,552
Earnings per common and common equivalent share:
Primary......................................... $ 0.07 $ 0.05 $ 0.47
Fully diluted................................... 0.07 0.05 0.47
OPERATING DATA:
EBITDA(b).......................................... $ 12,923 $ 45,204 $ 101,215
Adjusted EBITDA(b)................................. 1,632 3,854 15,144
Net cash provided by operating activities.......... 3,660 16,148 54,379
Net cash used in investing activities.............. (122,291) (46,298) (62,806)
Net cash provided by financing activities.......... 119,006 29,629 58,560
RENTAL DATA:(c)
Locations in operation at period end............... 63 133 152
Number of usable vehicles at period end(d)......... 5,044 11,143 14,761
Rental transactions(e)............................. 276,000 689,000 1,166,000
Daily dollar average(f)............................ $ 37.32 $ 41.26 $ 41.19
Vehicle utilization(g)............................. 80.6% 80.0% 80.9%
Average monthly revenue per unit(h)................ $ 909 $ 1,007 $ 1,017
RETAIL CAR SALES DATA:
Locations in operation at period end............... -- 7 11
Average monthly vehicles sold...................... -- 351 752
Average monthly sales revenue...................... $ -- $ 4,883 $ 12,757
</TABLE>

10
<PAGE> 14

<TABLE>
<CAPTION>
AS OF
DECEMBER 31, 1996
-----------------
(IN THOUSANDS)
<S> <C>
BALANCE SHEET DATA:
Revenue earning vehicles, net............................. $319,257
Vehicle inventory......................................... 16,413
Total assets.............................................. 587,223
Fleet financing facilities................................ 360,120
Other notes payable....................................... 93,989
Total debt................................................ 454,689
Common stock warrant...................................... 2,000
Stockholders' equity...................................... 92,001
</TABLE>

- ---------------

(a) Includes revenue from vehicle rentals and related products (such as
insurance and loss damage waivers).

(b) EBITDA consists of income before income taxes plus (i) vehicle interest
expense, (ii) non-vehicle interest expense, (iii) vehicle depreciation
expense and (iv) non-vehicle depreciation and amortization expenses.
Adjusted EBITDA consists of income before income taxes plus (i) non-vehicle
depreciation and amortization expenses and (ii) non-vehicle interest
expense. EBITDA and Adjusted EBITDA are not presented as, and should not be
considered, alternative measures of operating results or cash flows from
operations (as determined in accordance with generally accepted accounting
principles), but are presented because they are widely accepted financial
indicators of a company's ability to incur and service debt.

(d) Represents vehicles available for rent.
(e) Rounded to the nearest thousand.
(f) Represents rental revenue divided by the number of days that vehicles were
actually rented.
(g) Represents the number of days vehicles were actually rented divided by the
number of days vehicles were available for rent.

(h) Represents average monthly revenue divided by average monthly fleet.

11
<PAGE> 15

SUMMARY FINANCIAL DATA OF BRACC

The following tables set forth summary historical consolidated financial
data for BRACC, which data were derived from the audited Consolidated Financial
Statements of BRACC. The financial data for all periods presented have been
reclassified to conform to the financial statement presentation of TEAM. The
information below should be read in conjunction with the Consolidated Financial
Statements of BRACC and the notes thereto included elsewhere in this Prospectus
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations of BRACC."

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------
1994 1995 1996
---------- ---------- ----------
(DOLLARS IN THOUSANDS EXCEPT RENTAL
DATA)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenue:
Vehicle rental revenue(a)....................... $1,011,203 $1,034,873 $ 963,764
Retail car sales revenue........................ 77,999 83,795 91,503
Other revenue................................... 66,564 74,802 77,554
---------- ---------- ----------
Total operating revenue.................... 1,155,766 1,193,470 1,132,821
Vehicle depreciation expense....................... 257,356 323,619 263,846
Operating income................................... 110,075 18,583 124,651
Vehicle interest expense........................... 86,127 124,758 92,738
Non-vehicle interest expense....................... 18,823 25,151 31,444
Income (loss) from continuing operations
before income taxes............................. 5,125 (131,326) 469
Net income (loss).................................. 1,125 (132,640) (2,531)
OPERATING DATA:
EBITDA(b).......................................... $ 405,715 $ 378,728 $ 432,111
Adjusted EBITDA(b)................................. 62,232 (69,649) 75,527
Net cash provided by operating activities.......... 280,793 173,944 256,290
Net cash used in investing activities.............. (411,810) (180,938) (205,054)
Net cash provided by (used in) financing
activities...................................... 173,789 35,661 (87,561)
RENTAL DATA (U.S. UNLESS NOTED):
Locations in operation at period end (worldwide)... 447 390 374
Number of usable vehicles at period end(c)......... 75,467 68,148 67,137
Rental transactions(d)............................. 6,030,000 5,909,000 5,346,000
Daily dollar average(e)............................ $ 38.43 $ 39.58 $ 41.26
Vehicle utilization(f)............................. 77.4% 75.1% 76.7%
Average monthly revenue per unit(g)................ $ 904 $ 904 $ 966
RETAIL CAR SALES DATA:
Locations in operation at period end............... 8 9 11
Average monthly vehicles sold...................... 462 449 491
Average monthly sales revenue...................... $ 6,500 $ 6,983 $ 7,625
</TABLE>

<TABLE>
<CAPTION>
AS OF
DECEMBER 31, 1996
------------------
(IN THOUSANDS)
<S> <C>
BALANCE SHEET DATA:
Revenue earning vehicles, net............................. $1,303,975
Vehicle inventory......................................... 14,299
Total assets.............................................. 2,328,115
Fleet financing facilities................................ 1,361,619
Other notes payable....................................... 468,767
Total debt................................................ 1,830,386
Mandatory redeemable preferred stock...................... 5,178
Stockholders' equity...................................... 143,965
</TABLE>

12
<PAGE> 16

- ---------------

(a) Includes revenue from vehicle rentals and related products (such as
insurance and loss damage waivers).

(c) Represents vehicles available for rent.
(d) Rounded to the nearest thousand.
(e) Represents rental revenue divided by the number of days that vehicles were
actually rented.
(f) Represents the number of days vehicles were actually rented divided by the
number of days vehicles were available for rent.
(g) Represents average monthly revenue divided by average monthly fleet.

FORWARD-LOOKING STATEMENTS

This Prospectus contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 with respect to
the financial condition, results of operations and business of TEAM and BRACC,
including statements under the captions "Pro Forma Consolidated Financial
Statements of Budget Group," "Management's Discussion and Analysis of Financial
Condition and Results of Operations of TEAM" and "Business of Budget Group."
These forward-looking statements involve certain risks and uncertainties. No
assurance can be given that any of such matters will be realized. Factors that
may cause actual results to differ materially from those contemplated by such
forward-looking statements include, among others, the following: (a) Budget
Group's ability to service its debt or to obtain financing for its fleet
vehicles; (b) management and integration of the operations of TEAM and BRACC
following the Budget Acquisition and the success of initiatives undertaken by
Budget Group to increase its revenues and improve its profitability; (c)
competitive pressure in the vehicle rental and retail car sales industries; and
(d) general economic conditions. For further information on other factors which
could affect the financial results of TEAM and such forward-looking statements,
see "Risk Factors."

13
<PAGE> 17

RISK FACTORS

Prospective investors should consider carefully the following factors in
addition to other information included in this Prospectus before purchasing any
of the shares of Class A Common Stock.

SUBSTANTIAL LEVERAGE; ABILITY TO SERVICE DEBT

Following consummation of the Budget Acquisition Transactions (as defined
in "Pro Forma Consolidated Financial Statements of Budget Group"), Budget Group
will have substantial indebtedness and will have significant debt service
requirements. As of December 31, 1996, pro forma for the Budget Acquisition
Transactions, Budget Group's total indebtedness would have been approximately
$1,941.1 million (representing 85.3% of its total capitalization), of which
$1,621.5 million represented senior secured indebtedness for the purchase of
vehicles and $319.5 million represented unsecured non-vehicle indebtedness
(representing 14.0% of its total capitalization). As of December 31, 1996, on a
pro forma basis, Budget Group had $849.2 million of incremental availability
under its vehicle financing facilities to finance the purchase of fleet
vehicles. The degree to which Budget Group is leveraged will have important
consequences for holders of the Class A Common Stock, including the following:
(i) the ability of Budget Group to obtain additional financing in the future,
whether for working capital, fleet purchases, acquisitions or other purposes,
may be impaired; (ii) a substantial portion of Budget Group's cash flow from
operations will be required to be dedicated to the payment of principal and
interest on its indebtedness, thereby reducing funds available to Budget Group
for other purposes; (iii) Budget Group's flexibility in planning for or reacting
to changes in market conditions may be limited; (iv) Budget Group may be more
vulnerable in the event of a downturn in its business; and (v) because a
substantial portion of its indebtedness will bear interest at floating rates,
any increase in prevailing interest rates would result in an increase in
interest expense incurred by Budget Group, which could have an adverse effect on
its results of operations. See "Capitalization," "Management's Discussion and
Analysis of Financial Condition and Results of Operations of TEAM -- Liquidity
and Capital Resources -- Pro Forma Liquidity and Capital Resources for Budget
Group" and "Description of Certain Indebtedness."

The ability of Budget Group to meet its debt service obligations will
depend on its future operating performance and financial results, which will be
subject in part to factors beyond the control of Budget Group. Although
management believes that Budget Group's cash flow will be adequate to meet its
interest and principal payments, there can be no assurance that Budget Group
will continue to generate earnings in the future sufficient to cover its fixed
charges. If Budget Group is unable to generate earnings in the future sufficient
to cover its fixed charges and is unable to borrow sufficient funds under its
existing credit lines or from other sources, it may be required to refinance all
or a portion of its existing indebtedness or to sell all or a portion of its
assets. There can be no assurance that a refinancing would be possible, nor can
there be any assurance as to the timing of any asset sales or the proceeds which
Budget Group could realize therefrom. In addition, the terms of certain
indebtedness of Budget Group restrict the ability of Budget Group to sell assets
and the use of the proceeds therefrom. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations of TEAM -- Liquidity and
Capital Resources -- Pro Forma Liquidity and Capital Resources for Budget
Group."

If for any reason, including a shortfall in anticipated operating results
or proceeds from asset sales, Budget Group were unable to meet its debt service
obligations, it would be in default under the terms of its indebtedness. In the
event of such a default, the holders of such indebtedness could elect to declare
all of such indebtedness immediately due and payable, including accrued and
unpaid interest, and to terminate their commitments (if any) with respect to
funding obligations under such indebtedness. In addition, such holders could
proceed against their collateral, which, in the case of the fleet financing
facilities, consists of substantially all of Budget Group's fleet. Any default
with respect to any of Budget Group's indebtedness could result in a default
under other indebtedness or result in a bankruptcy of Budget Group.

AVAILABILITY OF FINANCING

TEAM and BRACC depend upon third-party financing to purchase their fleet
vehicles. Continued availability of such financing on favorable terms will be
critical to Budget Group's operations. As of December 31, 1996, on a pro forma
basis, 66.0% of Budget Group's indebtedness was incurred in connection with
major vehicle manufacturers' vehicle repurchase programs. As a result, a
significant change in the credit

14
<PAGE> 18

quality of the vehicle manufacturers, particularly Ford, would significantly
affect Budget Group's ability to obtain such financing on favorable terms. In
addition, certain events, such as a material increase in damage to vehicles,
could reduce the value of the collateral securing Budget Group's fleet financing
facilities and cause the acceleration of the repayment of such facilities. An
inability of Budget Group to obtain vehicle financing on favorable terms would
have a material adverse effect on Budget Group's financial condition and results
of operations. There can be no assurance that the sources of financing utilized
by TEAM and BRACC or alternative financing will remain or become available to
Budget Group or that such financing will be available on terms acceptable to
Budget Group. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations of TEAM -- Liquidity and Capital Resources -- Pro
Forma Liquidity and Capital Resources for Budget Group."

MANAGEMENT OF BUDGET GROUP

The Budget Acquisition is significantly larger than any of TEAM's previous
acquisitions and the combination and integration of the respective operations of
TEAM and BRACC will be of a substantially greater scale than previously
undertaken by either company. The difficulties of managing such combination and
integration may be increased by the necessity of coordinating the operations of
geographically diverse organizations, of integrating different strategies and
operating systems, of integrating management and operating personnel from both
companies and of managing a worldwide franchise system. The success of Budget
Group following the Budget Acquisition will depend on the ability of Budget
Group's management team to: (a) manage a significantly larger organization than
TEAM's existing business, (b) maintain and further develop relationships with
Budget franchisees and (c) conduct operations on a worldwide basis. There can be
no assurance that Budget Group's management team will be able to successfully
manage the combined operations of TEAM and BRACC. An inability to successfully
manage the integration of TEAM and BRACC would have a material adverse effect on
Budget Group's results of operations and financial condition.

GROWTH STRATEGY

Following the Budget Acquisition, management expects Budget Group to
undertake initiatives to increase its revenues and improve its profitability.
Management expects to increase the size of Budget Group's operations by
acquiring the operations of certain franchisees, enhancing its operations
outside the United States, expanding its retail car sales operations, adding car
rental locations in its existing markets, adding truck rental locations and
expanding its truck rental fleet, and increasing its marketing efforts to
corporate accounts. In addition, management expects Budget Group to realize
certain cost savings and other operating efficiencies as a result of the
implementation of its business strategy. Increasing the revenues of Budget
Group, and realizing cost savings and other operating efficiencies, could be
affected by a number of factors beyond Budget Group's control, such as general
economic conditions, increased operating costs, competitive conditions in the
vehicle rental industry and regulatory developments. See "Business of Budget
Group -- Strategy." Each of these initiatives will involve risks to Budget
Group, and there can be no assurance that Budget Group will be successful in
growing its business after completion of the Budget Acquisition or that Budget
Group will achieve the expected cost savings and other operating efficiencies.
In addition, Budget Group's substantial leverage could affect its success in
growing its business. See "-- Substantial Leverage; Ability to Service Debt."

COMPETITION

The vehicle rental industry is characterized by intense competition,
particularly with respect to price and service. In any geographic market, Budget
Group may encounter competition from national, regional and local vehicle rental
companies. Budget's main competitors in the car rental market are The Hertz
Corporation ("Hertz"), Avis, Inc. ("Avis"), Alamo Rent-A-Car, Inc. ("Alamo"),
National Car Rental System, Inc. ("National"), and Enterprise Rent-A-Car Company
("Enterprise"). In consumer truck rentals, Budget faces competition from U-Haul
International, Inc. ("U-Haul"), Ryder TRS, Inc. ("Ryder") and Penske Truck
Rental ("Penske"). There have been occasions when the major vehicle rental
companies have been adversely affected by industry-wide price cutting, and TEAM
and BRACC have on such occasions lowered their prices in response.

15
<PAGE> 19

Budget Group will not generally be able to unilaterally raise its prices or to
maintain its prices in times of industry-wide price cutting. See "Business of
Budget Group -- Competition."

The retail car sales industry also is characterized by intense competition,
consisting primarily of local new car dealerships selling new and late model
cars. Budget Group believes that competition for the customer seeking to
purchase a late model car is based primarily on price and selection, while a
customer originally intending to purchase a new car may select a late model car
based on perceived value. In addition to local dealerships, Budget Group may
face competition from retailers such as CarMax and AutoNation that compete on
the basis of large inventory size, no-haggle pricing and after-sale service.

RESTRICTIONS IMPOSED BY INDEBTEDNESS

The terms of Budget Group's indebtedness include a number of significant
covenants that, among other things, will restrict the ability of Budget Group to
dispose of assets, incur additional indebtedness, create liens, repay other
indebtedness, pay dividends, make certain investments or acquisitions,
repurchase or redeem capital stock, engage in mergers or consolidations, or
engage in certain transactions with affiliates and otherwise restrict corporate
activities. There can be no assurance that such restrictions will not adversely
affect Budget Group's ability to finance its future operations or capital needs
or to engage in other business activities that may be in the interest of Budget
Group. In addition, the terms of certain of such indebtedness will also require
Budget Group to comply with certain financial tests. The ability of Budget Group
to comply with such covenants may be affected by events beyond Budget Group's
control. A breach of any of these covenants or the inability of Budget Group to
comply with the required financial ratios could result in a default under such
indebtedness. In the event of any such default, the lenders under such
indebtedness could elect to declare all borrowings outstanding under such
indebtedness, together with accrued interest and other fees, to be due and
payable, to require Budget Group to apply all of its available cash to repay
such borrowings or to prevent Budget Group from making scheduled debt service
payments. If Budget Group were unable to repay any such borrowings when due, the
lenders could proceed against their collateral. If the indebtedness of Budget
Group under such collateralized indebtedness or other indebtedness were to be
accelerated, there can be no assurance that the assets of Budget Group would be
sufficient to repay such indebtedness in full. In certain previous instances,
TEAM has failed to comply with certain covenants under its working capital
facility and has obtained waivers from the lenders thereunder. See Note 6 of
Notes to the Consolidated Financial Statements of TEAM. There can be no
assurance that Budget Group will be able to comply with these covenants in the
future or that it will continue to be able to obtain any necessary waivers. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of TEAM -- Liquidity and Capital Resources -- Pro Forma Liquidity and
Capital Resources for Budget Group" and "Description of Certain Indebtedness."

POTENTIAL CHANGES IN MANUFACTURERS' REPURCHASE PROGRAMS

Approximately 85% of the vehicles purchased by TEAM and approximately 88%
of the vehicles purchased by BRACC in model year 1996 were eligible for
repurchase by specified automobile manufacturers at fixed prices on designated
dates pursuant to such manufacturers' vehicle repurchase programs ("Program
Vehicles"). The availability of Program Vehicles limits a car rental company's
risk of a decline in residual value at the time of disposition and enables it to
fix its depreciation expense in advance. Vehicle depreciation is the largest
cost factor in the vehicle rental operations of TEAM and BRACC. Management
believes that manufacturers' repurchase programs enable the manufacturers to
stimulate fleet sales in times of weak consumer demand for new automobiles. In
response to strong U.S. consumer demand for passenger vehicles in 1993 and 1994,
the major U.S. automobile manufacturers reduced the number of vehicles subject
to repurchase programs and the financial incentives associated with these
programs. U.S. consumer demand for passenger vehicles began to weaken during the
second quarter of 1995, and this weakness continued through 1996. In response to
these market conditions, there was an increase in the availability of repurchase
programs with respect to 1996 model year vehicles, particularly repurchase
programs for imported vehicles, and these programs have continued for 1997 model
year vehicles. However, Budget Group could be adversely affected if automobile
manufacturers reduce the availability of Program Vehicles or related incentives.
See "The Budget Acquisition -- Related Agreements -- Supply Agreement."

16
<PAGE> 20

SEASONALITY

The third quarter, during the peak summer travel months, has historically
been the strongest quarter of the year for both TEAM and BRACC. As a result, any
occurrence that disrupts travel patterns during the summer period could have a
material adverse effect on Budget Group's annual performance. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations of
TEAM -- Seasonality."

REGULATORY AND ENVIRONMENTAL MATTERS

TEAM and BRACC are subject to various foreign, federal, state and local
laws and regulations that affect the conduct of their operations, including
those relating to the sale of loss damage waivers, vicarious liability of
vehicle owners, consumer protection, advertising, used vehicle sales, the taxing
and licensing of vehicles, franchising operations and sales, and environmental
protection and clean-up. There can be no assurance that compliance with these
laws and regulations or the adoption of modified or additional laws and
regulations will not require material expenditures by Budget Group or otherwise
have a material adverse effect on its results of operations or financial
condition. See "Business of Budget Group -- Regulatory and Environmental
Matters."

DEPENDENCE ON PRINCIPAL SUPPLIER

For many years, Ford has been BRACC's principal supplier of vehicles. The
number of vehicles purchased from Ford varies from year to year. In model year
1996, approximately 79% of BRACC's U.S. vehicle purchases were comprised of Ford
vehicles. Under the terms of a supply agreement to be entered into concurrently
with the Budget Acquisition, BRACC and its affiliates (including TEAM) will
agree to purchase or lease Ford vehicles in such quantity that the percentage of
new Ford vehicles purchased or leased by Budget Group in the United States,
Canada, and other countries outside the European Union represents at least 70%
of the total new vehicle purchases by Budget Group, with a minimum quantity of
at least 80,000 vehicles in the United States in each model year. See "The
Budget Acquisition -- Related Agreements -- Supply Agreement." Given the volume
of vehicles purchased from Ford by BRACC, shifting significant portions of the
fleet purchases to other manufacturers would require lead time and certain
operational changes. As a result, if Ford were unable to supply Budget Group
with the planned number and types of vehicles, or if the quality and customer
satisfaction with respect to Ford vehicles declines significantly, it could have
a material adverse effect on Budget Group's financial condition and results of
operations.

INTERNATIONAL OPERATIONS

For 1996, on a pro forma basis, 8.9% of Budget Group's revenues were
derived from its international operations. Budget Group's international vehicle
rental operations will be subject to certain risks, including adverse
developments in the foreign political and economic environment, varying
governmental regulations, foreign currency fluctuations, potential difficulties
in staffing and managing foreign operations and potential adverse tax
consequences. There can be no assurance that any of these factors will not have
a material adverse effect on Budget Group's results of operations or financial
condition.

DEPENDENCE ON PRINCIPAL EXECUTIVE OFFICERS

Budget Group's existing operations and continued future development are
dependent in part on the active participation of Messrs. Miller, Kennedy and
Congdon. The loss of the services of one or more of these individuals could have
a material adverse effect on Budget Group. Budget Group has no employment
agreements or covenants not to compete with any of its executive officers or
significant employees. See "Management."

SHARES ELIGIBLE FOR FUTURE SALE

A substantial number of shares of Class A Common Stock currently
outstanding, or issuable upon conversion of TEAM's outstanding convertible notes
or convertible preferred stock, or upon exercise of stock options and stock
purchase warrants, are or will become eligible for future sale in the public
market at prescribed times pursuant to registration rights of certain security
holders or applicable regulations. Among other agreements, TEAM has granted Ford
certain demand and "piggyback" registration rights for the 4,500,000

17
<PAGE> 21

shares of Class A Common Stock (subject to adjustment) issuable upon conversion
of the Series A Convertible Preferred Stock. See "The Budget
Acquisition -- Terms of the Stock Purchase Agreements -- Consideration." TEAM
has also agreed to file a shelf registration statement relating to the 3,986,049
shares of Class A Common Stock issuable upon conversion of the outstanding
Series A Convertible Notes, and TEAM will enter into a similar agreement with
respect to the shares of Class A Common Stock that will be issuable upon
conversion of the Series B Convertible Notes. TEAM's directors and executive
officers, who in the aggregate beneficially own 2,824,305 shares of Common
Stock, have agreed that for a period of 90 days after the date of this
Prospectus, and TEAM has agreed that for a period of 180 days after the date of
this Prospectus, they will not sell or otherwise dispose of any shares of Common
Stock without the prior written consent of Credit Suisse First Boston
Corporation. See "Underwriting." Significant sales of the Class A Common Stock
in the public market following the Offering could adversely affect prevailing
market prices. See "Shares Eligible for Future Sale."

VOTING CONTROL BY PRINCIPAL EXECUTIVE OFFICERS

TEAM has two classes of Common Stock: Class A Common Stock, which is
entitled to one vote per share, and Class B Common Stock, which is entitled to
ten votes per share. Messrs. Miller, Kennedy and Congdon own all of the
outstanding shares of Class B Common Stock, which, following the Offering, will
represent approximately 55.4% of the combined voting power of both classes of
Common Stock. As a result, following the Budget Acquisition and prior to the
conversion of the Convertible Subordinated Notes or the Series A Convertible
Preferred Stock such officers will continue to be able to elect all of Budget
Group's Board of Directors, thereby ensuring that members elected by them will
continue to direct the business, policies and management of Budget Group. See
"Principal Stockholders."

POTENTIAL ANTI-TAKEOVER EFFECTS OF CHARTER AND BYLAW PROVISIONS; POSSIBLE
ISSUANCES OF PREFERRED STOCK

Certain provisions of Delaware law, TEAM's Amended and Restated Certificate
of Incorporation (in particular, the voting rights of the Class B Common Stock)
and TEAM's Bylaws could delay or impede the removal of incumbent directors and
could make it more difficult for a third party to acquire, or could discourage a
third party from attempting to acquire, control of Budget Group. Such provisions
could limit the price that certain investors might be willing to pay in the
future for shares of the Class A Common Stock. In addition, shares of preferred
stock may be issued by the Board of Directors without stockholder approval on
such terms and conditions, and having such rights, privileges and preferences,
as the Board of Directors may determine. The rights of the holders of the Class
A Common Stock will be subject to, and may be adversely affected by, the rights
of the holders of any preferred stock that may be issued in the future. Budget
Group has no current plans to issue any shares of preferred stock, other than
the shares of Series A Convertible Preferred Stock to be issued to Ford in
connection with the Budget Acquisition. See "Description of Capital Stock --
Preferred Stock" and "Description of Capital Stock -- Section 203."

18
<PAGE> 22

USE OF PROCEEDS

The net proceeds to TEAM from the Offering are estimated to be
approximately $136.6 million (approximately $157.3 million if the over-allotment
option is exercised in full), based on an assumed offering price of $22.375 per
share, after deducting underwriting discounts and commissions and estimated
offering expenses.

TEAM intends to use these net proceeds, together with the net proceeds of
the Debt Placements and the New Fleet Financings, to finance the Budget
Acquisition. See "The Budget Acquisition." The following table sets forth the
estimated sources and uses of consideration required to complete the Budget
Acquisition (assuming consummation of the Transactions on March 21, 1997):

<TABLE>
<CAPTION>
AMOUNT
-------------
(IN MILLIONS)
<S> <C>
SOURCES:
Class A Common Stock offered hereby(a).................... $ 145.4
Series A Convertible Preferred Stock(b)................... 100.7
% Convertible Subordinated Notes, Series B, due 2007.... 50.0
% Guaranteed Senior Notes due 2007...................... 125.0
New Fleet Financings(c)................................... 835.8
---------
Total sources..................................... $ 1,256.9
=========
USES:
Budget Acquisition(d)..................................... $ 375.7
Repayment of BRACC Fleet Financing Facilities(e).......... 856.2
Fees and expenses(f)...................................... 25.0
---------
Total uses........................................ $ 1,256.9
=========
</TABLE>

- ---------------

(a) Assumes a public offering price of $22.375 per share (based on the closing
price of the Class A Common Stock on March 21, 1997).

(c) Represents the amount drawn at closing under the New Fleet Financings
assuming a fleet size for Budget Group equivalent to the combined fleet
size of TEAM and BRACC at March 21, 1997.

(d) Represents (i) $275.0 million to purchase common stock of BRACC (of which
$274.0 million will be paid to BRACC for newly issued shares of BRACC
common stock and $1.0 million will be paid to the common stockholder of
BRACC) and (ii) $100.7 million of Series A Convertible Preferred Stock to
be issued to Ford (based on the value of 4,500,000 shares of Class A Common
Stock as of March 21, 1997). BRACC will use the $274.0 million in cash that
it receives as follows: (i) $269.0 million to repay outstanding
indebtedness of BRACC to Ford and (ii) $5.0 million to redeem outstanding
Series X Preferred Stock. In addition, concurrently with the Budget
Acquisition, Ford will cancel $128.3 million of additional outstanding
BRACC indebtedness.

(e) Represents (i) $370.7 million outstanding under a commercial paper facility,
(ii) $366.2 million of the vehicle facility provided by Ford to finance
non-Ford vehicles and (iii) $198.3 million of the vehicle facility provided
by Ford to finance Ford vehicles, net of $79.0 million of fleet
indebtedness to be forgiven by Ford, which represents the remaining portion
of the $128.3 million of outstanding BRACC indebtedness to be cancelled by
Ford which was first applied to extinguish the existing working capital
facility balance of $419.0 million. See "Capitalization."

(f) Includes underwriting discounts and commissions in connection with the
Offering, the Debt Placements and the New Fleet Financings.

19
<PAGE> 23

PRICE RANGE OF COMMON STOCK

The Class A Common Stock is listed on The Nasdaq National Market under the
symbol "TBUD." TEAM has made application for the Class A Common Stock to be
listed on the NYSE under the symbol "BD." The following table sets forth the
high and low sale prices per share for the Class A Common Stock as reported to
TEAM by The Nasdaq National Market for the periods indicated:

<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
1995
First Quarter............................................. $ 9.75 $ 8.00
Second Quarter............................................ 9.00 7.25
Third Quarter............................................. 11.375 6.50
Fourth Quarter............................................ 10.75 8.125
1996
First Quarter............................................. 10.50 8.25
Second Quarter............................................ 17.50 9.25
Third Quarter............................................. 20.25 12.375
Fourth Quarter............................................ 20.25 15.25
1997
First Quarter (through March 21, 1997).................... 29.50 16.50
</TABLE>

On March 21, 1997, the last sale price of the Class A Common Stock as
reported on The Nasdaq National Market was $22.375 per share. As of March 21,
1997, there were approximately 73 holders of record of the Class A Common Stock.

DIVIDEND POLICY

Although TEAM is currently able to pay dividends, subject to limitations
under the terms of its indebtedness, TEAM has never declared or paid dividends
on its Common Stock, and it is the current policy of the Board of Directors of
TEAM to retain earnings for use in the business and not to pay any cash
dividends on the Common Stock. Any declaration and payment of cash dividends on
the Common Stock will be subject to the discretion of TEAM's Board of Directors
and will be dependent upon TEAM's financial condition, results of operations,
cash requirements and future prospects, the limitations under the terms of its
indebtedness and other factors deemed relevant by TEAM's Board of Directors.
There can be no assurance that any such dividends will be declared or paid.

20
<PAGE> 24

CAPITALIZATION

The following table sets forth (i) the actual capitalization of TEAM as of
December 31, 1996; (ii) the actual capitalization of BRACC as of December 31,
1996; (iii) adjustments to the capitalization of TEAM and BRACC to give pro
forma effect to the Budget Acquisition Transactions (as defined in "Pro Forma
Consolidated Statements of Budget Group"); and (iv) the resulting pro forma
capitalization of Budget Group. See "Use of Proceeds," "Pro Forma Consolidated
Financial Statements of Budget Group," "Management's Discussion and Analysis of
Financial Condition and Results of Operations of TEAM -- Liquidity and Capital
Resources" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations of BRACC -- Liquidity and Capital Resources."

<TABLE>
<CAPTION>
AT DECEMBER 31, 1996
-------------------------------------------------------
ADJUSTMENTS
FOR BUDGET PRO FORMA
HISTORICAL HISTORICAL ACQUISITION BUDGET
TEAM BRACC TRANSACTIONS GROUP
---------- ---------- --------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Vehicle debt:
TEAM fleet financing facilities:
Asset-backed notes(a).............................. $321,682 -- -- $ 321,682
New Fleet Financings(b)............................ -- -- $ 693,666 693,666
Other TEAM fleet obligations....................... 38,438 -- -- 38,438
BRACC fleet financing facilities:
Commercial paper facility.......................... -- $ 367,516 (367,516) --
BFF term facility.................................. -- 500,000 -- 500,000
Other BRACC fleet obligations...................... -- 494,103 (426,370) 67,733
-------- ---------- --------- -----------
Total vehicle debt............................ 360,120 1,361,619 (100,220) 1,621,519
Non-vehicle debt:
% Guaranteed Senior Notes due 2007............... -- -- 125,000 125,000
Convertible Subordinated Notes....................... 80,000 -- 50,000 130,000
Other notes payable.................................. 13,989 468,767 (418,218) 64,538
Capital lease obligations............................ 580 -- -- 580
-------- ---------- --------- -----------
Total non-vehicle debt........................ 94,569 468,767 (243,218) 320,118
-------- ---------- --------- -----------
Total debt.................................. 454,689 1,830,386 (343,438) 1,941,637
Common Stock Warrant................................... 2,000 -- (2,000) --
Mandatory Redeemable Series X Preferred Stock.......... -- 5,178 (5,178) --
-------- ---------- --------- -----------
Stockholders' equity:
Series A Convertible Preferred Stock, $.01 par value,
10,000 shares authorized, no shares issued and
outstanding; 4,500 shares issued and outstanding
pro forma.......................................... -- -- 105,750 105,750
Class A Common Stock, $.01 par value, one vote per
share, 17,500,000 shares authorized(c); 9,357,050
shares issued and 9,320,383 shares outstanding;
15,857,050 shares issued and 15,820,383 shares
outstanding pro forma(d)........................... 93 -- 65 158
Class B Common Stock, $.01 par value, ten votes per
share, 2,500,000 shares authorized; 1,936,600
shares issued and outstanding...................... 19 -- -- 19
Additional paid-in capital............................. 89,856 555,439 (424,366) 220,929
Pension liability adjustment........................... -- (12,409) 12,409 --
Foreign currency translation adjustment................ -- (7,497) 7,497 --
Retained earnings (deficit)............................ 2,363 (391,568) 391,568 2,363
Treasury stock (at cost)............................... (330) -- -- (330)
-------- ---------- --------- -----------
Total stockholders' equity.................... 92,001 143,965 92,923 328,889
-------- ---------- --------- -----------
Total capitalization........................ $548,690 $1,979,529 $(257,693) $ 2,270,526
======== ========== ========= ===========
</TABLE>

(footnotes on following page)

21
<PAGE> 25

- ---------------

(a) Consists of the "First Fleet Financing Facility," the "Second Fleet
Financing Facility" and the "Third Fleet Financing Facility," as described
and defined under "Management's Discussion and Analysis of Financial
Conditions and Results of Operations of TEAM -- Liquidity and Capital
Resources -- Historic for TEAM."

(b) See "Management's Discussion and Analysis of Financial Condition and Results
of Operations of TEAM -- Liquidity and Capital Resources -- Pro Forma
Liquidity and Capital Resources for Budget Group" for a description of the
New Fleet Financings.

(c) At the 1997 Annual Meeting of Stockholders, TEAM will seek stockholder
approval to increase its authorized shares of Class A Common Stock to
35,000,000 shares.

(d) Does not include (i) 3,986,049 shares of Class A Common Stock issuable upon
conversion of the Series A Convertible Notes; (ii) 1,428,571 shares of Class
A Common Stock issuable upon conversion of the Series B Convertible Notes;
(iii) 4,500,000 shares of Class A Common Stock issuable upon conversion of
the Series A Convertible Preferred Stock to be issued to Ford in the Budget
Acquisition; (iv) 1,893,800 shares of Common Stock reserved for issuance
under TEAM's stock option plans (subject to stockholder approval as
described under "Description of Capital Stock"), of which options to
purchase 585,850 shares of Class A Common Stock and 164,000 shares of Class
B Common Stock were outstanding at December 31, 1996; (v) 362,500 shares of
the Class A Common Stock reserved for issuance upon exercise of outstanding
warrants; and (vi) 36,667 shares of Class A Common Stock repurchased by
TEAM. See "Management -- Benefit Plans" and "Description of Capital
Stock -- Warrants."

22
<PAGE> 26

PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS OF BUDGET GROUP

The following unaudited pro forma consolidated financial statements (the
"Pro Forma Consolidated Financial Statements") are based on the historical
financial statements of TEAM and BRACC as of and for the year ended December 31,
1996, adjusted to give effect to the transactions described below. The Pro Forma
Consolidated Statement of Operations gives effect to the following transactions
as if they had occurred on January 1, 1996: (i) certain transactions effected by
TEAM during 1996 that are more fully described below (the "1996 TEAM
Transactions") and (ii) the Budget Acquisition and certain related transactions
that are more fully described below (the "Budget Acquisition Transactions" and,
together with the 1996 TEAM Transactions, the "Transactions"). The Pro Forma
Consolidated Balance Sheet gives effect to the Budget Acquisition Transactions
as if they had occurred on December 31, 1996.

The 1996 TEAM Transactions consist of the following: (i) TEAM's acquisition
of Van Pool, which was effective on February 1, 1996, TEAM's acquisition of the
Phoenix Budget franchise (the "Phoenix Acquisition"), which was effective on
March 1, 1996, and TEAM's acquisition of ValCar Rental Car Sales, Inc.
("ValCar"), which was effective on August 1, 1996 (the "ValCar Acquisition");
(ii) the sale of 3,821,007 shares of Class A Common Stock by TEAM in a public
offering in July 1996 (the "July 1996 Public Offering"); (iii) the partial
refinancing of TEAM's vehicle rental fleet in December 1996 through the $176.0
million aggregate principal amount Third Fleet Financing Facility; (iv) the
private placement of $80.0 million aggregate principal amount of Series A
Convertible Notes in December 1996; and (v) the repayment of certain of TEAM's
outstanding indebtedness from the proceeds of (ii), (iii) and (iv) above. The
Budget Acquisition Transactions consist of the following: (i) the Budget
Acquisition, including the repayment, purchase and forgiveness of certain
indebtedness and the necessary purchase accounting and elimination entries; (ii)
the Offering and the application of the net proceeds thereof; (iii) the Debt
Placements and the application of the net proceeds thereof; and (iv) the New
Fleet Financings and the application of the net proceeds thereof and the
repayment of certain of BRACC's outstanding indebtedness to Ford from the net
proceeds thereof. All acquisitions, including the Budget Acquisition, have been
accounted for using the purchase method of accounting.

The Pro Forma Consolidated Financial Statements do not purport to represent
what Budget Group's results of operations or financial condition would have been
had the Transactions actually occurred on the dates indicated or to predict
Budget Group's results of operations or financial condition in the future. These
statements are qualified in their entirety by, and should be read in conjunction
with, the historical financial statements of TEAM and BRACC and the notes
thereto included elsewhere in this Prospectus and "Management's Discussion and
Analysis of Financial Condition and Results of Operations of TEAM" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of BRACC."

The Pro Forma Consolidated Financial Statements give effect only to the
adjustments set forth in the accompanying notes and do not reflect any other
benefits anticipated by management as a result of the Budget Acquisition
Transactions and the implementation of its business strategy or the possible
effects of the Supply Agreement and Advertising Agreement.

23
<PAGE> 27

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 1996

(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)

<TABLE>
<CAPTION>
ADJUSTMENTS ADJUSTMENTS
FOR 1996 PRO FORMA FOR BUDGET PRO FORMA
HISTORICAL TEAM HISTORICAL HISTORICAL ACQUISITION BUDGET
TEAM TRANSACTIONS(A) TEAM BRACC TRANSACTIONS GROUP
---------- --------------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Operating revenue:
Vehicle rental revenue....... $223,250 $10,874 $234,124 $ 963,764 $ -- $1,197,888
Royalty fees................. -- -- -- 60,352 (7,641)(k) 52,711
Retail car sales revenue..... 134,120 21,313 155,433 91,503 -- 246,936
Other........................ -- -- -- 17,202 (2,509)(k) 14,693
-------- ------- -------- ---------- -------- ----------
Total operating
revenue............. 357,370 32,187 389,557 1,132,821 (10,150) 1,512,228
Operating costs and expenses:
Direct vehicle and
operating.................. 35,098 2,372 37,470 121,288 (6,719)(k) 152,039
Depreciation -- vehicle...... 60,735 2,855 63,590 263,846 -- 327,436
Depreciation -- non-vehicle... 2,589 343 2,932 26,645 -- 29,577
Cost of car sales............ 113,747 19,639 133,386 78,944 -- 212,330
Advertising, promotion and
selling.................... 22,983 915 23,898 83,304 (2,509)(k) 104,693
Facilities................... 20,406 871 21,277 114,325 -- 135,602
Personnel.................... 53,097 1,955(b) 55,052 248,655 -- 303,707
General and administrative... 11,605 3,968(c) 15,573 54,194 -- 69,767
Amortization................. 1,843 90(d) 1,933 16,969 (10,076)(1) 8,826
-------- ------- -------- ---------- -------- ----------
Total operating costs
and expenses........ 322,103 33,008 355,111 1,008,170 (19,304) 1,343,977
-------- ------- -------- ---------- -------- ----------
Operating income (loss)........ 35,267 (821) 34,446 124,651 9,154 168,251
-------- ------- -------- ---------- -------- ----------
Other (income) expense:
Vehicle interest expense..... 25,336 (4,419)(e) 20,917 92,738 (9,361)(m)(n)(o) 104,294
Non-vehicle interest
expense.................... 1,501 4,292(f) 5,793 31,444 (16,283)(o)(p)(q) 20,954
Interest income -- restricted
cash....................... (781) (929)(g) (1,710) -- (108)(r) (1,818)
Non-recurring bank fees...... 1,275 (1,275)(h) -- -- -- --
Related party interest....... 118 (118)(i) -- -- -- --
-------- ------- -------- ---------- -------- ----------
Total other (income)
expense............. 27,449 (2,449) 25,000 124,182 (25,752) 123,430
Income before income taxes..... 7,818 1,628 9,446 469 34,906 44,821
Provision for income taxes... 3,321 651(j) 3,972 3,000 11,849(s) 18,821
-------- ------- -------- ---------- -------- ----------
Net income (loss)..... $ 4,497 $ 977 $ 5,474 $ (2,531) $ 23,057 $ 26,000
======== ======= ======== ========== ======== ==========
Weighted average common and
common equivalent shares
outstanding:
Primary...................... 9,488 11,515 22,454
==========
Fully diluted................ 9,552 11,578 26,493
==========
Earnings per common and common
equivalent share:
Primary...................... $ 0.47 $ 0.48 $ 1.16(t)
==========
Fully diluted................ $ 0.47 $ 0.47 $ 1.11
==========
</TABLE>

24
<PAGE> 28

NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(AMOUNTS IN THOUSANDS)

Adjustments for 1996 TEAM Transactions:

(a) Reflects the inclusion of the operations of Van Pool, the Phoenix Budget
franchise, and ValCar from January 1, 1996, to their respective dates of
acquisition by TEAM of February 1, March 1, and August 1, 1996,
respectively, as reflected in the table below.

<TABLE>
<CAPTION>
VAN POOL PHOENIX VALCAR TOTAL
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Operating revenue:
Vehicle rental revenue.............................. $2,660 $8,214 -- $10,874
Retail car sales revenue............................ -- -- $21,313 21,313
------ ------ ------- -------
Total operating revenues....................... 2,660 8,214 21,313 32,187
------ ------ ------- -------
Operating costs and expenses:
Direct vehicle and operating........................ 893 1,479 -- 2,372
Depreciation -- vehicle............................. 676 2,179 -- 2,855
Depreciation -- non-vehicle......................... 8 229 106 343
Cost of car sales................................... -- -- 19,639 19,639
Advertising, promotion and selling.................. -- 915 -- 915
Facilities.......................................... 33 838 -- 871
Personnel........................................... 379 1,913 -- 2,292
General and administrative.......................... 148 436 3,421 4,005
Amortization of franchise rights.................... -- 8 -- 8
------ ------ ------- -------
Total operating costs and expenses............. 2,137 7,997 23,166 33,300
------ ------ ------- -------
Operating income (loss)............................... 523 217 (1,853) (1,113)
Other (income) expense:
Vehicle interest expense............................ 232 991 318 1,541
Non-vehicle interest expense (income), net.......... (21) 2 -- (19)
------ ------ ------- -------
Total other expense............................ 211 993 318 1,522
Income (loss) before taxes............................ 312 (776) (2,171) (2,635)
Provision (benefit) for income taxes................ 125 (310) (869) (1,054)
------ ------ ------- -------
Net income (loss)..................................... $ 187 $ (466) $(1,302) $(1,581)
====== ====== ======= =======
</TABLE>

(b) Reflects the net increase in personnel expense of $1,955 attributable to:

<TABLE>
<S> <C>
Operations of purchased businesses as reflected in note
(a).................................................... $2,292
Reduction relating to salaries and bonuses previously
paid to officers of the
Phoenix Budget franchise.............................. (312)
Reduction resulting from the elimination of a retirement
plan................................................... (25)
------
Net increase in personnel expense.................. $1,955
======
</TABLE>

<TABLE>
<S> <C>
Operations of purchased businesses as reflected in note
(a).................................................... $ 4,005
Elimination of management fees paid to former
shareholders of ValCar................................. (108)
Royalty payments made by ValCar to BRACC for the right
to use the "Budget" trade name for its retail car sales
facilities during the preacquisition period............ 71
-------
Net increase in general and administrative
expense........................................... $ 3,968
=======
</TABLE>

(d) Reflects the net increase in amortization expense of $90 attributable to:

<TABLE>
<S> <C>
Operations of purchased businesses as reflected in note
(a).................................................... $ 8
Amortization of franchise rights resulting from the
Phoenix Acquisition.................................... 60
Amortization of franchise rights resulting from the
ValCar Acquisition..................................... 22
-------
Net increase in amortization expense............... $ 90
=======
</TABLE>

25
<PAGE> 29

NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS -- (CONTINUED)
(AMOUNTS IN THOUSANDS)

(e) Reflects the net decrease in vehicle interest expense of $4,419
attributable to:

<TABLE>
<S> <C>
Operations of purchased businesses as reflected in note
(a).................................................... $ 1,541
Amortization of costs incurred in connection with the
Third Fleet Financing Facility......................... 260
Interest savings due to the refinancing of debt at
reduced interest rates under the Third Fleet Financing
Facility............................................... (6,220)
-------
Net decrease in vehicle interest expense........... $(4,419)
=======
</TABLE>

(f) Reflects the net increase in non-vehicle interest expense of $4,292
attributable to:

<TABLE>
<S> <C>
Operations of purchased businesses as reflected in note
(a).................................................... $ (19)
Interest expense that would have been incurred on
borrowings of $15.0 million to effect the Phoenix
Acquisition............................................ 217
Interest expense incurred on the Series A Convertible
Notes.................................................. 3,901
Amortization of costs incurred in connection with the
issuance of Series A Convertible Notes................. 193
-------
Net increase in non-vehicle interest expense....... $ 4,292
=======

Because the Series A Convertible Notes are unsecured indebtedness,
the entire interest expense is included in non-vehicle interest
expense, even though a portion of the proceeds have been used to fund
the fleet. Based on the average fleet debt outstanding during the
period that could have been funded by the Series A Convertible Notes,
approximately $3,000 of the interest cost incurred is attributable to
funding the fleet.
</TABLE>

(g) Reflects the $929 increase in interest income -- restricted cash earned on
restricted cash balances remaining in TEAM's restricted cash account after
application of the proceeds received from the Third Fleet Financing
Facility, the Series A Convertible Notes and the July 1996 Public Offering
to TEAM's outstanding indebtedness. Under the terms of the Third Fleet
Financing Facility, specified amounts of cash are required to be maintained
in a restricted cash account, with such amounts earning interest at a rate
of 4.5% per annum.

(h) Reflects the elimination of $1,275 in non-recurring financing fees related
to bridge loans that were repaid with the proceeds of the July 1996 Public
Offering and that would not have been incurred on a pro forma basis.

(i) Reflects the elimination of $118 of related party interest due to repayment
of the related party debt.

(j) Reflects the tax effect of the pro forma adjustments, based on an effective
tax rate of approximately 40%.

Adjustments for Budget Acquisition Transactions:

(k) Reflects the elimination of the following transactions between TEAM and
BRACC:

<TABLE>
<S> <C>
Advertising fees paid by TEAM which were recognized as
other revenue by BRACC................................. $2,509
Royalty expenses paid by TEAM which were recognized as
royalty fees by BRACC.................................. 6,241
</TABLE>

Also reflects the elimination of the current year effect of $1,400 royalty
fees recognized by BRACC and $478 royalty expense recognized by TEAM
related to the warrant to purchase shares of Class A Common Stock of TEAM
held by BRACC (the "BRACC Warrant"). See "Description of Capital
Stock -- Warrants."

(l) Reflects the elimination of $16,969 of amortization of BRACC's existing
goodwill and records an increase of $6,893 amortization on the net goodwill
established through purchase accounting adjustments.

(m) Reflects the increase in vehicle interest expense attributable to:

<TABLE>
<S> <C>
Interest expense related to the New Fleet Financings.... $32,084
Amortization of costs incurred in connection with the
New Fleet Financings................................... 1,436
-------
Increase in vehicle interest expense............... $33,520
=======
</TABLE>

26
<PAGE> 30

NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS -- (CONTINUED)
(AMOUNTS IN THOUSANDS)

(n) Reflects the decrease in vehicle interest expense attributable to:

<TABLE>
<S> <C>
Interest savings on vehicle debt refinanced through the
New Fleet Financings................................... $34,869
Interest savings on vehicle debt to Ford paid down by
BRACC in connection with
the Budget Acquisition................................ 8,012
-------
Decrease in vehicle interest expense............... $42,881
=======
</TABLE>

(o) In calculating the interest expense adjustments arising from the Budget
Acquisition Transactions, the assumed rates of interest for the new debt
facilities are as follows:

<TABLE>
<CAPTION>
HISTORICAL
WEIGHTED ASSUMED
AVERAGE INTEREST
RATE RATE
---------- --------
<S> <C> <C>
% Guaranteed Senior Notes due 2007................ --% 8.55%
Series B Convertible Notes.............................. -- 6.60
New Fleet Financings --
Asset-Backed Notes.................................... 7.48 6.68
Commercial Paper Facility............................. 5.43 5.43
Working Capital Facility.............................. 7.84 6.68
</TABLE>

An increase or decrease in the interest rate of one-quarter of one percent
(0.25%) with respect to the pro forma balances on the above debt facilities
would increase or decrease interest expense and income before income taxes
by $2,505 based on the average outstanding balance of the debt to be
refinanced.

(p) Reflects the increase in non-vehicle interest expense attributable to:

<TABLE>
<S> <C>
Interest expense related to the Debt Placements......... $13,987
Amortization of costs incurred in connection with the
Debt Placements........................................ 392
-------
Increase in non-vehicle interest expense........... $14,379
=======
</TABLE>

(q) Reflects the decrease in non-vehicle interest expense attributable to:

<TABLE>
<S> <C>
Elimination of interest on BRACC indebtedness to Ford
purchased by TEAM through the issuance of Series A
Convertible Preferred Stock............................... $ 7,898
Elimination of interest on working capital debt of $128,317
forgiven by Ford.......................................... 10,066
Elimination of interest on BRACC indebtedness to Ford paid
down by BRACC using the proceeds from BRACC's sale of
newly issued common stock to TEAM......................... 12,698
-------
Decrease in non-vehicle interest expense................ $30,662
=======
</TABLE>

(r) Reflects $108 of interest income -- restricted cash on the $2,400 increase
in restricted cash resulting from the receipt of Ford's funding of the
employee bonus pool to be created in connection with the Budget Acquisition.
See "The Budget Acquisition -- Terms of the Stock Purchase
Agreements -- Special Bonus Program."

(s) Reflects a tax provision resulting in an overall effective rate of
approximately 42% for Budget Group due to the nondeductibility of goodwill
for tax reporting purposes.

(t) Unaudited pro forma earnings per common and common equivalent share data for
Budget Group are calculated using 22,453,786 shares of Common Stock, which
includes the following: (i) 6,500,000 shares of Class A Common Stock offered
hereby and (ii) 4,500,000 shares of Class A Common Stock into which Ford's
Series A Convertible Preferred Stock is convertible. The grant of stock
options in connection with the Budget Acquisition to fund the BRACC employee
bonus pool to be created pursuant to the Stock Purchase Agreements, with an
exercise price equal to the fair market value of TEAM's Class A Common Stock
on the date of grant, will have no dilutive effect on the pro forma earnings
per common and common equivalent share data for Budget Group.

27
<PAGE> 31

PRO FORMA CONSOLIDATED BALANCE SHEET

DECEMBER 31, 1996

(AMOUNTS IN THOUSANDS)

(UNAUDITED)

<TABLE>
<CAPTION>
ADJUSTMENTS
FOR BUDGET PRO FORMA
HISTORICAL HISTORICAL ACQUISITION BUDGET
TEAM BRACC TRANSACTIONS GROUP
---------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
ASSETS
Cash and short-term investments................. $ 50,490 $ 59,547 $ 2,526(a) $ 112,563
Restricted cash................................. 66,336 -- -- 66,336
Trade and vehicle receivables, net.............. 31,302 202,563 (3,520)(b)(c) 230,345
Accounts receivable, related parties............ 58 -- -- 58
Vehicle inventory............................... 16,413 14,299 -- 30,712
Revenue earning vehicles, net................... 319,257 1,303,975 -- 1,623,232
Property and equipment, net..................... 18,502 114,537 -- 133,039
Franchise rights, net........................... 68,469 -- -- 68,469
Deferred financing fees, net.................... 3,950 1,626 10,900(a) 16,476
Other assets.................................... 10,022 101,622 (739)(b) 110,905
Investment in BRACC............................. -- -- --(a)(d) --
Deferred income taxes........................... -- -- -- --
Intangibles -- net.............................. 2,424 529,946 (275,886)(d)(e) 256,484
-------- ---------- ---------- ----------
Total assets............................. $587,223 $2,328,115 $ (266,719) $2,648,619
======== ========== ========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Fleet financing facilities...................... $360,120 $1,361,619 $ (100,220)(a) $1,621,519
% Guaranteed Senior Notes due 2007.......... -- -- 125,000(a) 125,000
Convertible Subordinated Notes.................. 80,000 -- 50,000(a) 130,000
Other notes payable............................. 13,989 468,767 (418,218)(a)(e)(f) 64,538
Capital lease obligations....................... 580 -- -- 580
Accounts payable................................ 14,601 61,896 (1,520)(c) 74,977
Deferred income taxes........................... 7,406 -- (7,406)(d) --
Accrued and other liabilities................... 16,526 286,690 (100)(b)(d)(g) 303,116
-------- ---------- ---------- ----------
Total liabilities........................ 493,222 2,178,972 (352,464) 2,319,730
-------- ---------- ---------- ----------
Common stock warrant.............................. 2,000 -- (2,000)(b) --
-------- ---------- ---------- ----------
Mandatory redeemable series X preferred stock..... -- 5,178 (5,178)(a)(d) --
-------- ---------- ---------- ----------
Stockholders' equity
Common stock.................................... 112 -- 65(a)(d) 177
Preferred stock................................. -- -- 105,750(e) 105,750
Additional paid-in capital...................... 89,856 555,439 (424,366)(a)(d)(g) 220,929
Pension liability adjustment.................... -- (12,409) 12,409(d) --
Foreign currency translation adjustment......... -- (7,497) 7,497(d) --
Retained earnings (deficit)..................... 2,363 (391,568) 391,568(d)(f) 2,363
Treasury stock.................................. (330) -- -- (330)
-------- ---------- ---------- ----------
Total stockholders' equity............... 92,001 143,965 92,923 328,889
-------- ---------- ---------- ----------
Total liabilities and stockholders'
equity............................. $587,223 $2,328,115 $ (266,719) $2,648,619
======== ========== ========== ==========
</TABLE>

28
<PAGE> 32

NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET

(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

Adjustments for Budget Acquisition Transactions:

(a)Reflects the cash effects of certain Budget Acquisition Transactions:

<TABLE>
<CAPTION>
CASH
---------
<S> <C>
Investment in BRACC--
Purchase by TEAM of 2,740,000 newly issued shares of BRACC
common stock............................................ $(274,000)
Purchase by TEAM of 2.31 shares of BRACC Series X
Cumulative Preferred Stock from Ford.................... (2)
Receipt of funding from Ford for the employee bonus
pool.................................................... 2,400
Purchase by TEAM of 10,000 outstanding shares of BRACC
common stock............................................ (1,000)
---------
(272,602)
---------
Deferred financing fees--
Reduction in proceeds from Debt Placements for expenses of
issuance proceeds....................................... (3,000)
Payment of costs incurred in connection with the New Fleet
Financings.............................................. (7,900)
---------
(10,900)
---------
Fleet financing facilities--
Repayment of certain BRACC indebtedness to Ford from
proceeds received by BRACC from issuance of common stock
to TEAM................................................. (79,782)
Receipt of proceeds from the New Fleet Financings......... 693,666
Repayment of Ford indebtedness by BRACC from proceeds
received from New Fleet Financings...................... (714,104)
---------
(100,220)
---------
Receipt of gross proceeds from Debt Placements --
% Guaranteed Senior Notes due 2007........................ 125,000
% Convertible Subordinated Notes, Series B, due 2007...... 50,000
Other notes payable--
Repayment of certain BRACC indebtedness to Ford from
proceeds received by BRACC from issuance of common stock
to TEAM................................................. (189,214)
---------
Stockholders' equity--
Sale of 2,740,000 newly issued shares of BRACC common
stock to TEAM........................................... 274,000
Public offering of 6,500,000 shares of TEAM Class A Common
Stock, net of $7,999 of underwriting discounts and
commissions (estimated at 5.5% of gross proceeds) and
offering expenses estimated at $800..................... 136,638
Redemption of 5,004.15 shares of Series X Cumulative
Preferred Stock of BRACC plus cumulative dividends...... (5,176)
Acquisition advisory fee.................................. (5,000)
---------
400,462
---------
$ 2,526
=========
</TABLE>

(b)Reflects the elimination of the $2,000 BRACC Warrant, including the related
prepaid royalty and unearned revenue balances of $739.

(c)Reflects the elimination of the $1,520 payable and receivable arising from
the royalty fees charged by BRACC to TEAM and amounts arising from fee
sharing arrangements that were unpaid at December 31, 1996.

(d)Reflects the elimination of TEAM's investment in BRACC of $272,602 against
BRACC's fully adjusted stockholders' equity as of December 31, 1996, which
was applied as follows:

<TABLE>
<S> <C>
Preferred stock............................................. $ (2)
Common stock................................................ (27)
Paid-in capital............................................. (829,412)
Accumulated deficit......................................... 283,158
</TABLE>

Additionally, to record the $273,543 reduction in BRACC's intangibles as a
result of certain purchase accounting adjustments, the reduction in the
deferred tax valuation allowance recorded by BRACC of $7,406 due to TEAM's
deferred tax position, and the elimination of $139 of unearned revenue
related to the BRACC Warrant.

(e)Reflects the reduction in BRACC's indebtedness to Ford attributable to the
issuance of 4,500 shares of Series A Convertible Preferred Stock of TEAM. The
fair market value of the debt purchased of $100,687 was determined in
accordance with the terms of the Stock Purchase Agreements and is based on
the underlying value of the 4,500,000 shares of Class A Common Stock into
which the Series A

29
<PAGE> 33

NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET -- (CONTINUED)

(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

Convertible Preferred Stock is convertible. Under the Stock Purchase
Agreements, the underlying value of the shares of Class A Common Stock is
determined based on the preceding ten-day average stock price as of the
closing date (assumed to be March 21, 1997 for computational purposes).
However, generally accepted accounting principles that address the
determination of the market value of securities issued in a purchase business
combination require that the value assigned to such securities be determined
using the market price for a reasonable period before and after the date the
terms of the acquisition are agreed to and publicly announced. Accordingly,
the market value of the underlying 4,500,000 shares of Class A Common Stock
for the three-day period surrounding January 13, 1997 (the date the Budget
Acquisition was publicly announced) was used to determine the value of
$105,750 to be assigned to the Series A Convertible Preferred Stock. The
difference between the value assigned to the debt purchased and the value
assigned to the Series A Convertible Preferred Stock will be treated as an
adjustment to goodwill.

(f)Reflects the forgiveness by Ford of $128,317 of indebtedness due from BRACC.

(g)Reflects an accrual of $500 for the estimated costs to register the shares of
Class A Common Stock into which the Series A Convertible Preferred Stock is
convertible.

30
<PAGE> 34

SELECTED FINANCIAL DATA OF TEAM

The following table sets forth selected consolidated statement of
operations data and selected consolidated balance sheet data of TEAM for the
five years ended December 31, 1996. Such data were derived from the audited
Consolidated Financial Statements of TEAM. The Consolidated Financial Statements
of TEAM and the notes thereto for each of the three years in the period ended
December 31, 1996 are included elsewhere in this Prospectus. The selected
consolidated financial data set forth below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of TEAM" and the Consolidated Financial Statements of TEAM and the
notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1992 1993 1994 1995 1996
------- ------- ------- -------- --------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenue:
Vehicle rental revenue(a).......................... $21,968 $22,321 $38,642 $107,067 $223,250
Retail car sales revenue........................... -- -- -- 42,662 134,120
------- ------- ------- -------- --------
Total operating revenue..................... 21,968 22,321 38,642 149,729 357,370
------- ------- ------- -------- --------
Operating costs and expenses:
Direct vehicle and operating....................... 5,989 5,452 9,439 13,704 35,098
Depreciation -- vehicle............................ 2,832 4,358 7,382 27,476 60,735
Depreciation -- non-vehicle........................ 212 229 446 1,341 2,589
Cost of car sales.................................. -- -- -- 38,021 113,747
Advertising, promotion and selling................. 1,477 1,658 3,090 11,826 22,983
Facilities......................................... 2,662 2,695 4,398 11,121 20,406
Personnel.......................................... 4,292 4,537 7,947 24,515 53,097
General and administrative......................... 736 790 1,515 6,686 11,605
Amortization....................................... 151 152 229 859 1,843
------- ------- ------- -------- --------
Total operating costs and expenses.......... 18,351 19,871 34,446 135,549 322,103
------- ------- ------- -------- --------
Operating income..................................... 3,617 2,450 4,196 14,180 35,267
------- ------- ------- -------- --------
Other (income) expense:
Vehicle interest expense........................... 2,440 2,462 3,909 13,874 25,336
Non-vehicle interest expense (income), net......... 619 401 (139) (716) 838
Non-recurring expense (income)..................... -- (1,023) -- -- 1,275
------- ------- ------- -------- --------
Total other expense......................... 3,059 1,840 3,770 13,158 27,449
------- ------- ------- -------- --------
Income before income taxes........................... 558 610 426 1,022 7,818
Provision for income taxes........................... -- 182 176 685 3,321
------- ------- ------- -------- --------
Net income........................................... $ 558 $ 428 $ 250 $ 337 $ 4,497
======= ======= ======= ======== ========
Weighted average common and common equivalent shares
outstanding:
Primary............................................ -- -- 3,704 6,369 9,488
Fully diluted...................................... -- -- 3,704 6,369 9,552
Earnings per common and common equivalent share:
Primary............................................ -- -- $ 0.07 $ 0.05 $ 0.47
Fully diluted...................................... -- -- 0.07 0.05 0.47
</TABLE>

31
<PAGE> 35

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1994 1995 1996
-------- -------- ----------
(DOLLARS IN THOUSANDS EXCEPT
RENTAL DATA)
<S> <C> <C> <C>
OPERATING DATA:
EBITDA(b)................................................. $ 12,923 $ 45,204 $ 101,215
Adjusted EBITDA(b)........................................ 1,632 3,854 15,144
Net cash provided by operating activities................. 3,660 16,148 54,379
Net cash used in investing activities..................... (122,291) (46,298) (62,806)
Net cash provided by financing activities................. 119,006 29,629 58,560
RENTAL DATA:(C)
Locations in operation at period end...................... 63 133 152
Number of usable vehicles at period end(d)................ 5,044 11,143 14,761
Rental transactions(e).................................... 276,000 689,000 1,166,000
Daily dollar average(f)................................... $ 37.32 $ 41.26 $ 41.19
Vehicle utilization(g).................................... 80.6% 80.0% 80.9%
Average monthly revenue per unit(h)....................... $ 909 $ 1,007 $ 1,017
RETAIL CAR SALES DATA:
Locations in operation at period end...................... -- 7 11
Average monthly vehicles sold............................. -- 351 752
Average monthly sales revenue............................. $ -- $ 4,883 $ 12,757
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------------------------
1992 1993 1994 1995 1996
------- ------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Revenue earning vehicles, net......................... $23,343 $23,577 $ 97,127 $219,927 $319,257
Vehicle inventory..................................... -- -- 943 8,938 16,413
Total assets.......................................... 32,027 33,325 162,991 386,323 587,223
Fleet financing facilities............................ 28,390 23,857 123,779 295,647 360,120
Other notes payable................................... 3,795 1,824 2,785 22,586 93,989
Total debt............................................ 27,880 28,533 127,187 319,017 454,689
Redeemable preferred stock............................ 2,747 2,747 -- -- --
Common stock warrant.................................. -- -- 2,000 2,000 2,000
Stockholders' equity (deficit)........................ (1,344) (1,251) 26,748 39,592 92,001
</TABLE>

- ---------------

(a) Includes revenue from vehicle rentals and related products (such as
insurance and loss damage waivers).

(d) Represents vehicles available for rent.
(e) Rounded to the nearest thousand.
(f) Represents rental revenue divided by the number of days that vehicles were
actually rented.
(g) Represents number of days vehicles were actually rented divided by the
number of days vehicles were available for rent.

(h) Represents the average monthly revenue divided by average monthly fleet.

32
<PAGE> 36

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF TEAM

GENERAL

Team Rental Group, Inc. is the largest Budget franchisee in the United
States and is one of the largest independent retailers of late model automobiles
in the United States. In 1994, TEAM embarked on a strategy to significantly
expand its Budget franchise base and to develop a branded retail car sales
operation within its Budget franchise territories. This strategy both leverages
management's experience and creates certain operating efficiencies between these
complementary businesses. Through its 152 vehicle rental locations, TEAM had pro
forma 1996 vehicle rental revenues of $234.1 million and, through its 11 retail
car sales facilities, TEAM had pro forma 1996 sales revenue of $155.4 million.

TEAM's retail car sales business has represented an increasing portion of
TEAM's revenues since the opening of TEAM's first retail car sales facility in
November 1994. TEAM added six retail car sales facilities during 1995, with the
retail car sales business producing $42.6 million of revenue for 1995
(representing 28.5% of TEAM's total historical revenue for the year), and added
four facilities during 1996, with the retail car sales business producing $134.1
million of revenue for 1996 (representing 37.5% of TEAM's total historical
revenue for the year and 34.4% of TEAM's total pro forma revenue for the year).
TEAM's retail car sales business produced $1,254 of operating income in 1995
(representing 8.8% of TEAM's total operating income) and $1,857 of operating
income in 1996 (representing 5.3% of TEAM's total operating income). At December
31, 1995 and 1996, the retail car sales business represented 7.8% and 8.3% of
TEAM's total identifiable assets, respectively. See Note 15 of the Notes to the
Consolidated Financial Statements of TEAM.

The 1994 results of operations reported herein include the consolidated
accounts of the San Diego, California, Richmond, Virginia and Albany and
Rochester, New York Budget franchises and the acquired operations of the
Pittsburgh and Philadelphia, Pennsylvania, Cincinnati, Ohio and Fort Wayne,
Indiana Budget franchises from their respective acquisition dates through
December 31, 1994. The 1995 results of operations reported herein include the
consolidated operations of the entities comprising TEAM at December 31, 1994 and
the acquired operations of the Dayton, Ohio, Charlotte, North Carolina,
Hartford, Connecticut, and Los Angeles, California Budget franchises from their
respective acquisition dates through December 31, 1995. The 1996 results of
operations reported herein include the acquired operations of the Phoenix Budget
franchise, Van Pool and ValCar from their respective acquisition dates through
December 31, 1996.

On January 13, 1997, TEAM entered into the Stock Purchase Agreements,
pursuant to which TEAM agreed to acquire the stock of BRACC. The consideration
to be paid by TEAM pursuant to the Stock Purchase Agreements consists of (i)
approximately $275.0 million in cash and (ii) the issuance to Ford of 4,500
shares of TEAM's newly created Series A Convertible Preferred Stock (subject to
adjustment), which does not carry a dividend and which will be convertible into
4,500,000 shares of Class A Common Stock.

33
<PAGE> 37

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the percentage
of operating revenues represented by certain items in TEAM's consolidated
statements of operations.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1994 1995 1996
----- ----- -----
<S> <C> <C> <C>
Vehicle rental revenue...................................... 100.0% 71.5% 62.5%
Retail car sales revenue.................................... -- 28.5 37.5
----- ----- -----
Total operating revenue................................... 100.0 100.0 100.0
Direct vehicle and operating expenses....................... 24.4 9.2 9.8
Cost of car sales........................................... -- 25.4 31.9
Vehicle depreciation expense................................ 19.1 18.4 17.0
Non-vehicle depreciation expense............................ 1.2 0.9 0.7
Advertising, promotion and selling.......................... 8.0 7.9 6.4
Facilities.................................................. 11.4 7.4 5.7
Personnel................................................... 20.6 16.3 14.9
General and administrative expenses......................... 3.9 4.5 3.2
Amortization of franchise rights............................ 0.6 0.5 0.5
----- ----- -----
Operating income............................................ 10.8 9.5 9.9
Vehicle interest expense.................................... 10.1 9.3 7.1
Non-vehicle interest expense (income), net.................. (0.4) (0.5) 0.2
Nonrecurring expense (income)............................... -- -- 0.4
----- ----- -----
Income before income taxes.................................. 1.1 0.7 2.2
Provision for income taxes.................................. 0.5 0.5 0.9
----- ----- -----
Net income.................................................. 0.6% 0.2% 1.3%
===== ===== =====
</TABLE>

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995.

General Operating Results. Net income for 1996 increased $4.2 million, or
1,234.4%, to $4.5 million from $337,000 for 1995. Income before provision for
income taxes increased over seven times from $1.0 million in 1995 to $7.8
million for 1996. This increase was due to TEAM's acquisition activity and the
growth of TEAM's car sales operations from seven locations at December 31, 1995
to 11 locations at December 31, 1996. Operating income for 1996 increased $21.1
million, or 148.7%, from $14.2 million for 1995 to $35.3 million for 1996, due
primarily to an increase in the vehicle fleet resulting from the acquisitions of
the Budget franchises in Arizona and Southern California and Van Pool. The daily
average rental rate remained relatively constant at $41.19 in 1996 and $41.26 in
1995.

Operating Revenues. Vehicle rental revenues for 1996 increased $116.2
million from $107.1 million in 1995 to $223.3 million in 1996. The increase in
rental revenues was due primarily to the increase in the size of TEAM from
operating 133 rental locations in 12 franchise areas at December 31, 1995 to
operating 152 locations in 13 franchise territories at December 31, 1996, and to
the acquisition of Van Pool in February 1996. Revenues from TEAM's retail car
sales operations increased $91.5 million from $42.7 million in 1995 to $134.1
million in 1996 due to the expansion of TEAM's car sales facilities from seven
locations at December 31, 1995 to 11 locations at December 31, 1996.

Operating Expenses. Operating expenses increased approximately $186.6
million, or 137.6%, to $322.1 million for 1996 as compared to $135.5 million for
1995. The growth of TEAM's vehicle rental operations through the acquisitions
discussed above was the principal cause of all the increases in TEAM's operating
expenses. Vehicle depreciation increased approximately $33.3 million, or 121.0%,
in 1996 due to an increase in fleet of 7,800 vehicles. Advertising expenses
increased from $11.8 million in 1995 to $23.0 million for 1996 due to the
increase in the size of the rental operations and due to the growth of the
retail car sales operations from five markets at December 31, 1995 to 11 markets
at December 31, 1996. The retail car sales business typically incurs greater
advertising expense than the car rental business. Facilities' expense increased
$9.3 million, or 83.5%, in 1996 as compared to 1995 due to the addition of 19
locations since December 31, 1995. Personnel costs increased approximately
116.6% in 1996 as compared to 1995 due to an increase of approximately 800

34
<PAGE> 38

employees since December 31, 1995. Other operating expense increased due to a
greater volume of rental business resulting from the 1995 and 1996 acquisitions.

Other (Income) Expense, Net. Interest expense, net of interest income,
increased from $13.2 million for 1995 to $27.4 million for 1996. Vehicle
interest expense increased approximately $11.5 million in 1996 due to the
increase in the size of TEAM's rental fleet from approximately 7,800 vehicles at
December 31, 1995 to approximately 15,600 vehicles at December 31, 1996.
Non-vehicle interest (income) expense changed from income of $716,000 in 1995 to
$838,000 of expense in 1996. This increase was primarily due to non-vehicle
interest paid on financing for the acquisition of the Phoenix Budget franchise.

Provision for Income Taxes. The provision for income taxes increased $2.6
million from $685,000 for 1995 to $3.3 million for 1996. The tax provision is
calculated at a rate of approximately 42.5%. The increase in provision is due to
the enhanced profitability of TEAM in 1996 as compared to 1995.

Year Ended December 31, 1995 Compared to the Year Ended December 31, 1994.

General Operating Results. Net income for 1995 increased $87,000, or
34.8%, to $337,000 from $250,000 in 1994. Income before income taxes more than
doubled to $1.0 million in 1995 from $426,000 in 1994. The increase in pre-tax
income was due to an increase in operating income of $10.0 million resulting
from the growth of TEAM's retail car sales operations from one facility at
December 31, 1994 to seven facilities at December 31, 1995 and the acquisition
of four additional Budget vehicle rental operations, which was offset by
increases in interest expense of $9.4 million, due primarily to the increased
size of the fleet throughout 1995 as a result of the acquisitions occurring
between August 1994 and October 1995, described above. The provision for income
taxes increased from $176,000 in 1994 to $685,000 in 1995 due to the enhanced
profitability of TEAM, nondeductible amortization expense, and state income
taxes. The daily average rental rate increased to $41.26 in 1995 from $37.32 in
1994, an increase of 10.6%, due to rental rate increases.

Operating Revenues. Operating revenues increased 287.8% in 1995 to $149.7
million from $38.6 million in 1994. This increase was primarily due to the
acquisitions discussed above and to an increased volume of vehicle rental
business in 1995, resulting in an increase in the number of rental revenue days
to 2,590,000 days in 1995 from 1,027,000 days in 1994. The daily average rental
rate increased 11% from $37.32 in 1994 to $41.26 in 1995; the average rental
term experienced a slight decrease from 3.82 days in 1994 to 3.76 days in 1995.

Operating Expenses. Operating expenses increased approximately $101.1
million, or 293.5%, to $135.5 million for 1995 from $34.4 million in 1994. This
increase was due in large measure to the growth of TEAM's retail car sales
operations, which included $38.0 million of cost of sales for which there was no
significant comparable expense in 1994, as well as to increases resulting from
the increase in fleet and personnel due to the four acquisitions occurring
during 1995. Direct vehicle and operating expense increased $4.3 million or
45.2% to $13.7 million from $9.4 million, due to the increase in the size of the
fleet from 5,044 vehicles at December 31, 1994 to 11,144 vehicles at December
31, 1995. The increased costs for vehicle maintenance recorded to direct vehicle
and operating expenses were partially offset by a decrease in the number of
leased vehicles during the period, as expenses for owned vehicles are charged to
both vehicle depreciation and interest expense, whereas leased vehicles are
charged to direct vehicle and operating expense. Vehicle depreciation expense
increased $20.1 million, or 272.2%, to $27.5 million due to an increase in fleet
size of 121% to 11,144 vehicles at December 31, 1995. Personnel expenses
increased 208.5% to $24.5 million due to the 226% increase in the employee base
from 525 employees at December 31, 1994 to 1,709 employees at December 31, 1995.
The number of locations from which TEAM rented vehicles increased from 63
locations at December 31, 1994 to 133 locations at December 31, 1995.

Other Income and Expense. Other expense-net increased approximately $9.4
million, or 249.0%, in 1995 due primarily to interest expense on the increased
vehicle fleet operated by TEAM in 1995. Vehicle interest increased $10.0 million
due to the increased size of the vehicle fleet throughout 1995. This increase
was offset by an increase in interest income of $0.7 million earned on cash
restricted for acquiring vehicles under TEAM's existing fleet financing
facilities.

35
<PAGE> 39

Provision for Income Taxes. The provision for income taxes increased
289.2% to $685,000 in 1995 from $176,000 in 1994. TEAM's effective tax rate
increased from 41.3% in 1994 to 67.0% in 1995. The increase in the tax provision
was due to the enhanced profitability of TEAM in 1995, certain amortization
expense that was not deductible for income taxes purposes, and state income
taxes.

LIQUIDITY AND CAPITAL RESOURCES

Historic for TEAM

Historically, TEAM's operations have been funded by cash provided from
operating activities and by financing provided under asset-backed notes issued
under the First, Second and Third Fleet Financing Facilities (collectively, the
"Fleet Financing Facilities") and by banks, automobile manufacturers' captive
finance companies and leasing companies. TEAM intends to continue to fund its
operations through these sources and other similar sources.

Net cash provided by operating activities for 1996 increased 237.9% to
$54.4 million from $16.1 million in 1995. Net cash provided by operating
activities for 1995 increased 341.2% to $16.1 million from $3.7 million in 1994.
In each period, TEAM experienced increases in cash received from rentals which
were offset to some extent by increases in cash paid to vendors and employees
and in interest expenses.

Net cash used in investing activities is primarily attributable to cash
paid to suppliers of revenue vehicles and, to a lesser extent, capital
expenditures. This cash use is mainly offset by cash received from the sale of
vehicles (most of which sales were pursuant to manufacturers' vehicle repurchase
programs). Cash received from the sale of vehicles was $460.6 million, $293.9
million and $73.7 million for 1996, 1995 and 1994, respectively. Cash paid to
suppliers of revenue vehicles was $517.1 million, $315.9 million and $155.2
million for 1996, 1995 and 1994, respectively. The increase in cash paid to
suppliers of revenue vehicles during 1996 was a result of the increased number
of operating locations throughout 1996. Payment for acquisitions, net of assets
acquired, amounted to $5.1 million, $6.5 million and $5.7 million for 1996, 1995
and 1994, respectively.

Net cash provided by financing activities for 1996 increased 98.0% to $58.6
million from $29.6 million in 1995, due primarily to proceeds received from the
issuance of Common Stock and convertible subordinated debentures, which was
partially offset by the utilization of a portion of these proceeds to repay
existing vehicle and non-vehicle debt. Net cash provided by financing activities
for 1995 decreased 75.1% to $29.6 million from $119.0 million in 1994, due
primarily to the receipt of proceeds from a public offering and a vehicle
financing facility in 1994 for which there were no corresponding receipts in
1995.

Fleet Financing Facilities. At December 31, 1996, amounts outstanding
under the Fleet Financing Facilities were comprised of $105.7 million of
asset-backed notes issued by TEAM's special purpose finance subsidiary, Team
Fleet Financing Corporation ("TFFC"), in August 1994 (the "First Fleet Financing
Facility"), $40.0 million of asset-backed notes assumed by TEAM in connection
with the acquisition of the Los Angeles, California Budget franchise in October
1995 (the "Second Fleet Financing Facility") and $176.0 million of asset-backed
notes issued by TFFC in December 1996 (the "Third Fleet Financing Facility").
These facilities have been utilized to finance Program Vehicles. Proceeds from
these facilities that are temporarily unutilized for vehicle financing are
maintained in restricted cash accounts with the trustee and are not available
for other purposes. The notes issued under these facilities are collateralized
by the financed vehicles and the restricted cash accounts, with the vehicles
being leased to TEAM's operating subsidiaries.

The First Fleet Financing Facility is comprised of senior and subordinated
notes. The senior notes require monthly interest payments at an annual rate of
average LIBOR, as defined, plus 0.75% (6.4% at December 31, 1996). Monthly
principal payments of $16,667,000 commence in June 1999 with the last payment
due in November 1999. The subordinated notes included in the First Fleet
Financing Facility require monthly interest payments at an annual rate of
average LIBOR, as defined, plus 1.30% (6.9% at December 31, 1996) and are
payable in full in December 1999.

The Second Fleet Financing Facility is comprised of senior and subordinated
notes. The senior notes require monthly interest payments at an annual rate of
average LIBOR, as defined, plus 0.60% (6.2% at December 31, 1996). Monthly
principal payments of $4,812,000 commence in November 1997 with the last payment
due in

36
<PAGE> 40

June 1998. The subordinated notes included in the Second Fleet Financing
Facility require monthly interest payments at an annual rate of average LIBOR,
as defined, plus 1.0% (6.6% at December 31, 1996) and are payable in full in
July 1998.

The Third Fleet Financing Facility is comprised of senior and subordinated
notes. The senior notes require monthly interest payments at an annual rate of
6.65%. Monthly principal payments of $13,833,334 commence in 2001 with the last
payment due in 2002. The subordinated notes included in the Third Fleet
Financing Facility require monthly interest payments at an annual rate of 7.10%
and are payable in full in June 2002. Up to $100 million of the Third Fleet
Financing may be used to finance vehicles that are not Program Vehicles.

Convertible Subordinated Notes. In December 1996, TEAM issued $80.0
million aggregate principal amount of Series A Convertible Notes. At a
conversion price of $20.07, the Series A Convertible Notes are convertible into
3,986,049 shares of Class A Common Stock. For a description of the Series B
Convertible Notes to be issued in connection with the Budget Acquisition, see
"Description of Certain Indebtedness -- Convertible Subordinated Notes." In
connection with the issuance of the Series B Convertible Notes, the maturity of
the Series A Convertible Notes will be extended to April 2007.

Vehicle Obligations. Vehicle obligations consist of outstanding lines of
credit to purchase rental vehicles and retail car sales inventory.
Collateralized lines of credit at December 31, 1996 consisted of $203 million
for rental vehicles and $26 million for retail car sales inventory with maturity
dates ranging from April 1997 to May 1998. Vehicle obligations are
collateralized by revenue earning vehicles financed under these credit
facilities and proceeds from the sale, lease or rental of rental vehicles and
retail car sales inventory.

Vehicle obligations relating to the rental fleet are generally amortized
over 5 to 15 months with monthly principal payments ranging from 2% to 3% of the
capitalized vehicle cost. When rental vehicles are sold, the related unpaid
obligation is due. Interest payments for rental fleet facilities are due monthly
at annual interest rates ranging from 7.0% to 8.75% at December 31, 1996.
Management expects vehicle obligations will generally be repaid within one year
with proceeds received from either the repurchase of the vehicles by the
manufacturers in accordance with the terms of the manufacturers' rental fleet
programs or from the sale of the vehicles.

In November 1996, Team Fleet Services Corporation ("TFSC") and VPSI, wholly
owned subsidiaries of TEAM, entered into Revolving Credit Agreements with
NationsBank, National Association (South), as Agent (the "Agent") for the
lenders party thereto, providing for up to $100.0 million and $50.0 million,
respectively, of financing for the acquisition of vehicles (the "Revolving
Credit Facilities"). The interest rates of loans under the Revolving Credit
Facilities are, at the option of TFSC and VPSI and up to certain amounts, based
on the Agent's prime rate, LIBOR or CD rates.

Monthly payments of interest only on obligations relating to retail car
sales inventory are required at the prime rate plus .25% (8.5% at December 31,
1996). Retail car sales inventory obligations are paid when the inventory is
sold but in no event later than 120 days after the date of purchase.

Working Capital Facilities. At December 31, 1996, TEAM had an unutilized
working capital facility of $10.0 million, which requires monthly interest
payments on the outstanding balance at LIBOR plus 2.50% (8.125% at December 31,
1996). This facility, which expires in April 1997, is collateralized by accounts
receivable, vehicle inventory, equipment, certain intangibles, investments and
all other personal property of TEAM and guarantees of certain TEAM subsidiaries.
This agreement is subject to certain covenants, the most restrictive of which
requires TEAM to maintain certain financial ratios and minimum tangible net
worth and prohibits the payment of cash dividends.

Pro Forma Liquidity and Capital Resources for Budget Group

Budget Group's operations will be funded by cash provided from operating
activities and by financing provided under (a) existing TEAM credit facilities,
(b) existing BRACC credit facilities assumed by TEAM, (c) new Budget Group fleet
financing facilities, (d) the Series B Convertible Notes and Guaranteed Senior
Notes to be issued in the Debt Placements, and (e) a new working capital
facility to be entered into by BRACC. For a description of material terms of
Budget Group's financing facilities, see "Description of Certain Indebtedness."

37
<PAGE> 41

Existing TEAM Facilities

Asset-backed notes issued under the Fleet Financing Facilities, as well as
the Series A Convertible Notes, will remain outstanding following the
consummation of the Budget Acquisition. See "-- Liquidity and Capital
Resources -- Historic for TEAM."

BRACC Facilities Assumed by TEAM

Budget Fleet Finance Corporation Notes -- The Budget Fleet Finance
Corporation Notes are comprised of $500 million of senior notes requiring
monthly interest payments at LIBOR plus 0.50% (6.125% at December 31,
1996). Six monthly principal payments of $83.3 million commence in April
1999 with the last payment due in September 1999.

The WizCom Note -- Budget Group will assume a $35.9 million note
payable to WizCom International, Ltd. ("WizCom"), a wholly owned subsidiary
of HFS Incorporated, which finances BRACC's acquisition of a limited
license to use the WizCom reservations system. Interest is payable monthly
at an annual rate of 6.20% through December 1998.

New Budget Group Fleet Financing Facilities

In addition to TEAM's existing fleet financing facilities and BRACC's fleet
financing facilities to be assumed by Budget Group upon consummation of the
Budget Acquisition, TEAM is conducting discussions with a limited number of
major commercial and investment banks with regard to the New Fleet Financing
Facilities. It is anticipated that the New Fleet Financing Facilities will
provide financing for $1.3 billion of vehicles. The New Fleet Financing
Facilities will consist of an $800.0 million commercial paper facility and an
additional $500.0 million financing facility that will be a structured finance
facility, and a $300 million bank working capital facility.

The Debt Placements

Concurrently with the consummation of the Offering, Budget Group will issue
$50.0 million aggregate principal amount of Series B Convertible Notes, and
BRACC will issue $125.0 million aggregate principal amount of Guaranteed Senior
Notes, which will be guaranteed by Budget Group and certain subsidiaries of
Budget Group. In addition, the note purchase agreements relating to the Series A
Convertible Notes will be amended to extend the maturity of the Series A
Convertible Notes to April 2007 and conform other terms to the terms of the
Series B Convertible Notes. See "Description of Certain Indebtedness."

New Working Capital Facility

BRACC will enter into a $250.0 million five-year secured credit facility,
which will be guaranteed by Budget Group. See "Description of Certain
Indebtedness -- The New Working Capital Facility."

INFLATION

The increased acquisition cost of vehicles is the primary inflationary
factor affecting TEAM's operations. Many of TEAM's other operating expenses are
inflation sensitive, with increases in inflation generally resulting in
increased costs of operations. The effect of inflation-driven cost increases on
TEAM's overall operating costs is not expected to be greater for TEAM than for
its competitors.

SEASONALITY

Generally, in the vehicle rental industry, revenues increase in the spring
and summer months (with the exception of resort destinations) due to the overall
increase in business and leisure travel during this season. TEAM increases the
size of its fleet and work force in the spring and summer to accommodate
increased rental activity during these periods and decreases its fleet and work
force in the fall and winter. However, many of TEAM's operating expenses (such
as rent, insurance and administrative personnel) are fixed and cannot be reduced
during the fall and winter. The retail car sales business is subject to seasonal
effects, with lower sales during the winter months. See "Risk
Factors -- Seasonality."

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<PAGE> 42

SELECTED FINANCIAL DATA OF BRACC

The following table sets forth selected consolidated statement of
operations data and selected consolidated balance sheet data of BRACC for the
five years ended December 31, 1996. Such data were derived from the audited
Consolidated Financial Statements of BRACC. The financial data for all periods
presented have been adjusted to conform to the financial statement presentation
of TEAM. The Consolidated Financial Statements of BRACC and the notes thereto
for each of the three years in the period ended December 31, 1996 are included
elsewhere in this Prospectus. The selected consolidated financial data set forth
below should be read in conjunction with "Management's Discussion and Analysis
of Financial Condition and Results of Operations of BRACC" and the Consolidated
Financial Statements of BRACC and the notes thereto included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1992 1993 1994 1995 1996
---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenue:
Vehicle rental revenue(a).................... $1,080,700 $ 954,188 $1,011,203 $1,034,873 $ 963,764
Retail car sales revenue..................... 72,253 63,596 77,999 83,795 91,503
Other revenue................................ 61,435 61,903 66,564 74,802 77,554
---------- ---------- ---------- ---------- ----------
Total operating revenue............... 1,214,388 1,079,687 1,155,766 1,193,470 1,132,821
Operating costs and expenses:
Direct vehicle and operating................. 221,239 176,252 134,126 153,081 121,288
Depreciation -- vehicle...................... 278,344 206,271 257,356 323,619 263,846
Depreciation -- non-vehicle.................. 25,297 20,431 21,410 19,520 26,645
Cost of car sales............................ 64,639 54,969 67,314 72,416 78,944
Advertising, promotion and selling........... 108,978 99,879 99,738 106,446 83,304
Facilities................................... 115,155 108,741 110,386 113,286 114,325
Personnel.................................... 274,081 248,947 269,370 280,901 248,655
General and administrative................... 85,625 82,731 69,117 88,612 54,194
Intangible amortization...................... 17,223 17,852 16,874 17,006 16,969
---------- ---------- ---------- ---------- ----------
Total operating costs and expenses.... 1,190,581 1,016,073 1,045,691 1,174,887 1,008,170
Operating income............................... 23,807 63,614 110,075 18,583 124,651
Other expense:
Vehicle interest expense..................... 101,032 78,205 86,127 124,758 92,738
Non-vehicle interest expense................. 18,923 16,283 18,823 25,151 31,444
---------- ---------- ---------- ---------- ----------
Income (loss) before provision for income
taxes........................................ (96,148) (30,874) 5,125 (131,326) 469
Provision for income taxes..................... (4,900) -- 4,000 1,314 3,000
---------- ---------- ---------- ---------- ----------
Net income (loss).............................. $ (91,248) $ (30,874) $ 1,125 $ (132,640) $ (2,531)
========== ========== ========== ========== ==========
</TABLE>

39
<PAGE> 43

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1994 1995 1996
---------- ---------- ----------
(DOLLARS IN THOUSANDS EXCEPT RENTAL
DATA)
<S> <C> <C> <C>
OPERATING DATA:
EBITDA(b)................................................ $ 405,715 $ 378,728 $ 432,111
Adjusted EBITDA(b)....................................... 62,232 (69,649) 75,527
Net cash provided by operating activities................ 280,793 173,944 256,290
Net cash used in investing activities.................... (411,810) (180,938) (205,054)
Net cash provided by (used in) financing activities...... 173,789 35,661 (87,561)
RENTAL DATA (U.S. UNLESS NOTED):
Locations in operation at period end (worldwide)......... 447 390 374
Number of usable vehicles at period end(c)............... 75,467 68,148 67,137
Rental transactions(d)................................... 6,030,000 5,909,000 5,346,000
Daily dollar average(e).................................. $ 38.43 $ 39.58 $ 41.26
Vehicle utilization(f)................................... 77.4% 75.1% 76.7%
Average monthly revenue per unit(g)...................... $ 904 $ 904 $ 966
RETAIL CAR SALES DATA:
Locations in operation at period end..................... 8 9 11
Average monthly vehicles sold............................ 462 449 491
Average monthly sales revenue............................ $ 6,500 $ 6,983 $ 7,625
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------------------------------------------
1992 1993 1994 1995 1996
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Revenue earning vehicles, net...... $1,362,548 $1,339,000 $1,543,661 $1,353,989 $1,303,975
Vehicle inventory.................. 5,753 7,396 9,674 11,756 14,299
Total assets....................... 2,590,002 2,405,204 2,602,374 2,488,115 2,328,115
Fleet financing facilities......... 1,628,190 1,462,783 1,614,247 1,465,472 1,361,619
Other notes payable................ 216,326 245,714 268,039 452,475 468,767
Total debt......................... 1,844,516 1,708,497 1,882,286 1,917,947 1,830,386
Mandatory redeemable preferred
stock........................... 206,250 221,250 236,250 251,250 5,178
Stockholders' equity............... 111,934 59,558 49,909 (106,102) 143,965
</TABLE>

- ---------------

(a) Includes revenue from vehicle rentals and related products (such as
insurance and loss damage waivers).

40
<PAGE> 44

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF BRACC

GENERAL

Budget Rent a Car Corporation is the owner of the "Budget" trademark on a
worldwide basis and is the international franchisor of the Budget System, which
is the third largest worldwide general use car and truck rental system with
approximately 3,000 locations.

BRACC was established in 1958 as a vehicle rental company serving the
downtown and suburban markets of cities in the United States and Canada. In
1960, BRACC began its franchising activities and positioned itself as the value
leader among the competing car rental companies. BRACC remained primarily a
franchise system until the 1980s when it undertook a strategic shift to acquire
franchisees with a view to becoming an operating company. Management believes
that company-owned locations provide enhanced customer service and earnings on a
long-term basis. Additionally, BRACC believes that its identification as a lower
cost provider of rental vehicles may protect its competitive position in the
event of negative economic developments.

For the year ended December 31, 1996, BRACC had 304 company-owned locations
which accounted for more than 60% of the Budget System's U.S. fleet.
Additionally, BRACC has expanded its operating strategy to international markets
and has company-owned locations in the United Kingdom, France, Switzerland,
Australia and New Zealand which account for more than 8% of the Budget System's
international rental revenue.

BRACC's international operations have historically been largely franchised.
For 1994, 1995 and 1996 royalty fees from international franchisees were 21.2%,
21.9% and 22.6% of BRACC's total international revenue and represented 45.9%,
49.0% and 50.4% of BRACC's total royalty fees, respectively. During 1994, 1995
and 1996, total operating expenses have remained stable at 88.8%, 87.4% and
87.8% of BRACC's total international revenue, respectively. As a result, BRACC
had consistent, positive earnings from its international operations of $8.3
million, $9.6 million and $11.4 million for 1994, 1995 and 1996, respectively.
The franchised nature of BRACC's operations also lowers its funding and overall
capital requirements. At December 31, 1994, 1995 and 1996, BRACC's international
operations accounted for 6.2%, 6.8% and 8.0% of BRACC's total assets,
respectively, while the percent of BRACC's total debt represented by these
operations was 3.1%, 3.1% and 3.9%, respectively. See Note 16 of the Notes to
the Consolidated Financial Statements of BRACC.

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated the percentage of
operating revenues represented by certain items in BRACC's combined statements
of operations.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1994 1995 1996
----- ----- -----
<S> <C> <C> <C>
Vehicle rental revenue...................................... 87.5% 86.7% 85.1%
Royalty fee revenue......................................... 4.6 4.9 5.3
Retail car sales revenue.................................... 6.7 7.0 8.1
Other revenue............................................... 1.2 1.4 1.5
----- ----- -----
Total operating revenue........................... 100.0 100.0 100.0
Direct vehicle and operating expenses....................... 11.6 12.8 10.7
Depreciation -- vehicles.................................... 22.3 27.1 23.3
Depreciation -- non-vehicle................................. 1.9 1.6 2.4
Cost of vehicles sold at retail............................. 5.8 6.1 7.0
Advertising, promotion and selling expenses................. 8.6 8.9 7.3
Facilities.................................................. 9.5 9.5 10.1
Personnel................................................... 23.3 23.5 21.9
General and administrative expenses......................... 6.0 7.5 4.8
Intangible amortization..................................... 1.5 1.4 1.5
----- ----- -----
Earnings before interest and income taxes................... 9.5 1.6 11.0
Interest expense............................................ 9.1 12.6 11.0
----- ----- -----
Income (loss) before income taxes........................... 0.4 (11.0) 0.0
Provision for income taxes.................................. 0.3 0.1 0.2
----- ----- -----
Net income (loss)........................................... 0.1% (11.1)% (0.2)%
===== ===== =====
</TABLE>

41
<PAGE> 45

Year Ended December 31, 1996 Compared to Year Ended December 31, 1995

General Operating Results. BRACC had a net loss of $2.5 million for 1996
compared to a net loss of $132.6 million for 1995. Income before income taxes
increased to $469,000 for 1996 from a loss of $131.3 million for 1995. This
improvement reflects the changes BRACC implemented during 1996 by placing a
greater focus on cost reductions, location and segment profitability, customer
service and operational consistency.

Operating Revenues. Operating revenues decreased $60.7 million, or 5.1%,
to $1,132.8 million for 1996 from $1,193.4 million for 1995. Vehicle rental
revenues decreased $71.1 million, or 6.9%, to $963.8 million for 1996 from
$1,034.9 million for 1995, primarily due to a change in fleet mix, which reduced
the number of higher priced luxury and specialty vehicles, and the elimination
of unprofitable segments of the business, including selected low margin
government and tour businesses. The daily average rental rate increased to
$41.26 in 1996 from $39.58 in 1995, an increase of 4.2%, partly reflective of
the reduction in low margin business and an upward movement in the daily rental
prices. Royalty fees increased $2.5 million, or 4.3%, to $60.4 million in 1996
from $57.9 million in 1995 due to growth in international markets. Retail car
sales revenue increased $7.7 million, or 9.2%, to $91.5 million for 1996 from
$83.8 million for 1995 largely due to a 9.4% increase in the number of units
sold.

Operating Expenses. Operating expenses decreased $166.7 million, or 14.2%,
to $1,008.2 million for 1996 from $1,174.9 million for 1995. Vehicle
depreciation expense decreased $59.8 million, or 18.5%, to $263.8 million for
1996 from $323.6 million for 1995, as a result of more closely aligning fleet
mix with customer demand, a lower depreciation rate on purchased risk vehicles
for depreciated values to reflect the fair market wholesale values for vehicles
to be sold (due to a strong used car and truck wholesale environment), and a
13.7% reduction in average fleet size resulting from an 11.6% reduction in
rental volume. The smaller fleet size reduced vehicle depreciation by
approximately $44.2 million while the risk vehicle depreciation change, the
change in fleet mix and all other changes provided the remaining $15.6 million
decrease from 1995. Direct vehicle and operating expenses decreased $31.8
million, or 20.8%, to $121.3 million in 1996 from $153.1 million in 1995,
largely due to the reduction in average fleet size. The change in fleet mix,
which reduced the number of higher priced luxury and specialty vehicles, and
continued improvement in risk management expenses, reflecting ongoing efforts to
minimize the exposure to higher risk renters, together contributed to an $11.7
million reduction in vehicle damage expenses and a $14.2 million reduction in
vehicle insurance expenses. Non-vehicle depreciation expense increased $7.1
million, or 36.5% to $26.6 million for 1996 from $19.5 million for 1995, largely
due to amortization of a new reservation system installed in the fourth quarter
of 1995. Cost of vehicles sold at retail increased $6.5 million, or 9.0% to
$78.9 million for 1996 from $72.4 million for 1995 largely due to the higher
number of units sold. Advertising, promotion and selling expenses decreased
$23.1 million, or 21.7%, to $83.3 million in 1996 from $106.4 million in 1995,
primarily due to the improvement in marketing focus to fewer programs with
stronger impact resulting in a $7.4 million decrease in advertising spending and
$14.9 million in lower selling costs associated with lower revenues. Facilities
expenses remained relatively constant for 1996 and 1995. Personnel expenses
decreased $32.2 million, or 11.5%, to $248.7 million in 1996 from $280.9 million
in 1995, $12.6 million of which was due to a substantial salary reduction
resulting from a decrease in the U.S. salaried workforce initiated in late 1995,
$9.3 million of which was due to a 1995 charge against earnings for the
reduction of U.S. salaried workforce and centralization of accounting functions,
and approximately $8.3 million of which was due to a reduction in rental volume
and corresponding variable labor costs. General and administrative expenses
decreased $34.4 million, or 38.8%, to $54.2 million in 1996 from $88.6 million
in 1995, due to the reduction in salaried headcount, a continued emphasis on
controlling discretionary expenses and the impact of centralization charges
recorded in 1995. Specifically, travel related expenses decreased $5.8 million,
outside professional services decreased $3.5 million, bad debt expense decreased
$5.6 million, and the year to year impact of centralization charges decreased by
$7.5 million. Intangible amortization expense remained relatively constant for
1996 and 1995.

Interest Expense. Interest expense decreased $25.7 million, or 17.2%, to
$124.2 million for 1996 from $149.9 million in 1995. A reduction in the average
borrowing rate resulted in a $7.6 million decrease while all other changes,
largely lower borrowing levels, reflective of the reduction in average fleet
size and mix changes, resulted in a reduction of $18.1 million.

42
<PAGE> 46

Provision for Income Taxes. The provision for income taxes increased to
$3.0 million for 1996 from $1.3 million in 1995 due to higher foreign income
taxes, primarily in the United Kingdom.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

General Operating Results. BRACC had a net loss of $132.6 million for 1995
compared to net income of $1.1 million for 1994. Loss before income taxes was
$131.3 million for 1995 compared to income before income taxes of $5.1 million
for 1994. These losses were due to substantially higher operating costs and
greater interest expense which were not fully offset through higher revenue.

Operating Revenues. Operating revenues increased by $37.7 million, or
3.3%, to $1,193.5 million in 1995 from $1,155.8 million in 1994. Vehicle rental
revenues increased $23.7 million, or 2.3% to $1,034.9 million in 1995 from
$1,011.2 million in 1994. This increase was due to a 3.0% increase in the daily
average rental rate, partially offset by a 1.1% reduction in vehicle rental
days. Retail car sales revenue increased $5.8 million, or 7.4%, to $83.8 million
for 1995 from $78.0 million for 1994, primarily due to a change to higher priced
units in the mix of vehicles sold. Royalty fees increased $4.7 million, or 8.9%,
to $57.9 million in 1995 from $53.2 million in 1994, primarily due to growth in
international markets. Other revenues increased $3.5 million, or 26.3%, to $16.9
million in 1995 from $13.4 million in 1994 largely due to improvements in credit
card processing income. The daily average rental rate increased to $39.58 in
1995 from $38.43 in 1994, an increase of 3.0%.

Operating Expenses. Operating expenses increased $129.2 million, or 12.4%
to $1,174.9 million in 1995 from $1,045.7 million in 1994. Vehicle depreciation
expense increased $66.3 million, or 25.8%, to $323.6 million in 1995 from $257.3
million in 1994, due to higher manufacturer depreciation rates for Program
Vehicles, a change in fleet mix to include more specialty vehicles and a 1.8%
increase in average fleet size. The higher manufacturer program rates resulted
in increased depreciation expense of approximately $59.9 million and the
remaining $6.4 million increase was primarily due to larger fleet size. Direct
vehicle and operating expenses increased $19.0 million, or 14.1%, to $153.1
million in 1995 from $134.1 million in 1994, primarily due to higher
salvage/wreck and theft expense, the change in fleet mix to include more luxury
and specialty vehicles and a higher average fleet size. Non-vehicle depreciation
expense decreased $1.9 million, or 8.8%, to $19.5 million in 1995 from $21.4
million in 1994. Cost of vehicles sold at retail increased $5.1 million, or
7.6%, to $72.4 million in 1995 from $67.3 million in 1994 reflecting a more
costly mix of vehicles. Advertising, promotion and selling expenses increased
$6.7 million, or 6.7%, to $106.4 million in 1995 from $99.7 million in 1994,
primarily due to $2.2 million of higher selling costs associated with higher
revenues, $3.5 million of marketing costs for credential reissuance in
conjunction with the new corporate logo and the remainder due to other net
marketing expenditures, largely frequent flyer programs. Facilities expenses
increased $2.9 million, or 2.6%, to $113.3 million in 1995 from $110.4 million
in 1994, due to minor increases in several areas, such as $2.5 million in lease
expense for rental and administrative facilities and $.5 million for repairs and
maintenance. Personnel expenses increased $11.5 million, or 4.3%, to $280.9
million in 1995 from $269.4 million in 1994, largely due to a $9.3 million one-
time charge taken in 1995 in conjunction with the reduction in the U.S. salaried
workforce and the centralization of accounting functions. General and
administrative expenses increased $19.5 million, or 28.2%, to $88.6 million in
1995 from $69.1 million in 1994, due to a $5.3 million one-time restructuring
charge related to a reduction in BRACC's workforce in 1995 and centralization of
accounting functions, $3.0 million due to the non-recurrence of a legal
settlement in 1994 related to a contract dispute regarding the failed attempt to
design and build a multi-user reservation processing system, and increases in
other general expenses, including travel related costs of $2.0 million and bad
debt of $1.4 million. Intangible amortization expenses remained relatively
constant for 1995 and 1994.

Interest Expense. Interest expense increased $44.9 million, or 42.8%, to
$149.9 million for 1995 from $105.0 million in 1994. An increase in the average
borrowing rate resulted in a $30.8 million increase while the remaining increase
of $14.1 million was largely due to higher borrowing levels reflective of the
increase in average fleet size and mix changes.

Provision for Income Taxes. The provision for income taxes decreased to
$1.3 million for 1995 from $4.0 million in 1994 primarily due to lower deferred
federal and foreign income taxes.

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<PAGE> 47

LIQUIDITY AND CAPITAL RESOURCES OF BRACC

Historically, BRACC's operations have been funded by cash provided from
operating activities and by financing provided by banks, automobile
manufacturers' captive finance companies and leasing companies. BRACC's existing
indebtedness at December 31, 1996 was $1,830.4 million and had interest rates
ranging from 4.06% to 12.00%. Below is a general description of the debt
facilities which BRACC currently utilizes.

Vehicle Asset Backed Facilities

Medium Term Notes. The medium term notes include notes issued by Budget
Fleet Finance Corporation ("BFFC") in June 1994. BFFC is a special purpose
bankruptcy remote corporation. The BFFC notes are comprised of medium term notes
requiring monthly interest payments at a floating rate of LIBOR, as defined,
plus 0.50%. The BFFC notes total $500 million and have a maturity of five years
from the inception of the facility. Monthly principal payments of $83.3 million
commence in April 1999 with the last payment due in September 1999.

Commercial Paper. The commercial paper program, which was established in
July 1993, is an $845 million program with a 90-day maximum maturity on all
commercial paper issued. The commercial paper is sold through Budget Funding
Corporation ("BFC"), which is a special purpose bankruptcy remote corporation.
Interest is payable monthly at the market rate when the commercial paper is
issued. The average interest rate for 1996 was 5.43%.

Other Vehicle Debt

Ford Vehicle Facility. This facility was established with Ford Motor
Credit Company ("FMCC") to finance program and risk vehicles and light and
medium duty trucks which are all manufactured by Ford. There is $500 million
available under this facility and interest is paid monthly at the one-month
commercial paper rate plus 2.00%. The collateral for this facility is all
vehicles financed plus all revenue streams and proceeds from sales.

Non-Ford Vehicle Facility. This facility was established with FMCC to
finance program and risk vehicles and light and medium duty trucks which are not
manufactured by Ford. There is $500 million available under this facility and
interest is paid quarterly at the one-month commercial paper rate plus 2.25%.
The collateral for this facility is all vehicles financed plus all revenue
streams and proceeds from sales.

The amount outstanding under these facilities cannot exceed $800 million.

Other Debt

Working Capital Facility. The working capital facility of $525 million is
funded by FMCC. This facility is primarily used to provide cash for daily
operating activities. Interest is paid quarterly to FMCC based upon a monthly
commercial paper interest rate plus 2.50%.

Other Notes Payable. Other notes payable consist primarily of the WizCom
note, which had a balance of $35.9 million and an interest rate of 6.20% at
December 31, 1996. The entire note will be paid in full by December 1998.

In addition, BRACC's international operations have debt facilities with
certain financial institutions and vehicle manufacturers. The majority of these
debt facilities are fleet related where the vehicles are used as collateral. As
of December 31, 1996, fleet obligations were $67.7 million.

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<PAGE> 48

BUSINESS OF BUDGET GROUP

GENERAL

BACKGROUND

BRACC. In 1960, BRACC began franchising car and truck rental operations
serving the downtown and suburban areas of cities in the United States and
Canada. Budget established its first major airport location in 1967, but
maintained a marketing strategy of offering good value to price-sensitive
personal renters. Historically, BRACC has operated the broadest distribution
system in the industry, with more full-service local market locations in the
United States and worldwide than its major competitors and the largest
integrated system offering both cars and trucks in most markets worldwide.
During the 1980's, BRACC undertook a strategic shift from being structured as a
franchising company to functioning as an operating company.

For the year ended December 31, 1996, BRACC's 304 company-owned locations
in the United States accounted for approximately 61.4% of the Budget System's
vehicle rental U.S. revenues, while its 70 company-owned locations outside the
United States accounted for approximately 8.3% of the Budget System's
international vehicle rental revenues. For the year ended December 31, 1996,
BRACC's company-owned locations accounted for approximately 38.0% of total
worldwide Budget System revenues. At December 31, 1996, Budget franchisees
(including TEAM) maintained 651 locations in the United States and 2,182
locations internationally.

TEAM. TEAM is the largest U.S. Budget franchisee and is one of the largest
independent retailers of late model automobiles in the United States. TEAM
became a publicly held corporation in August 1994, with 23 locations in four
franchise territories, and embarked on a strategy to significantly expand its
Budget franchise base by further consolidating Budget franchise operations and
to develop a branded retail car sales operation within its Budget franchise
territories. Since that time, TEAM has pursued an aggressive growth strategy in
both its vehicle rental and retail car sales operations. Since its initial
public offering, TEAM has added an additional nine Budget franchise territories.
With 152 locations as of December 31, 1996, TEAM accounted for approximately
14.8% of the Budget System's 1996 U.S. revenues. Concurrently with the
development of its Budget franchise business, TEAM has developed or acquired 11
retail car sales facilities.

Sanford Miller (Chairman and Chief Executive Officer), John P. Kennedy
(President and Chief Operating Officer) and Jeffrey D. Congdon (Chief Financial
Officer and Secretary) together have over 75 years of experience in the vehicle
rental business and have acquired and operated 54 Budget franchises over the
past 15 years. In addition, Messrs. Miller and Congdon together have over 25
years of experience operating retail car sales facilities.

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<PAGE> 49

Budget Group. Upon completion of the Budget Acquisition, Budget Group will
consist of 455 company-owned locations in the United States, including 21 of the
25 largest airport rental markets in the United States. In addition, Budget
Group will account for approximately 76% of the Budget System's 1996 U.S.
system-wide revenues. Accordingly, the Budget Acquisition will mark a
significant furtherance of the initiative undertaken by BRACC approximately 10
years ago to make the transition from being a franchising company to being an
operating company as well as furtherance of TEAM's strategy of consolidating the
Budget System. Budget Group believes that its increased level of company-owned
operations will enable it to improve the performance of the Budget System and to
compete more effectively in both the corporate and consumer segments of the
vehicle rental industry. Budget Group will be managed by officers having
significant experience with BRACC and TEAM, who will utilize operating
strategies and systems that have proven most effective for BRACC and TEAM.

STRATEGY

- Enhance the Budget brand

- Improve the performance of car rental operations

- Continue to expand retail car sales operations

- Expand truck rental operations

Enhance the Budget Brand

Following the Budget Acquisition, the Budget System will be approximately
76% company-owned in the United States, giving Budget Group a percentage of
company-owned locations that management believes to be higher than many of its
principal competitors. Management believes this high level of corporate
ownership is a competitive advantage in the marketplace. It facilitates more
consistent delivery of high quality services and improved operations and
communications, thereby strengthening the Budget brand name among customers.
Improved "front counter" systems will be designed to present a more consistent
image to Budget customers, both corporate and individual, with an increased
emphasis on quality of service and customer satisfaction. Budget Group's
structure will facilitate national advertising and marketing programs designed
to increase the public's awareness of the Budget brand. In addition, management
believes that there will be continuing opportunities to further consolidate the
Budget System by acquiring additional franchise operations, and that such
consolidation will further strengthen the Budget brand.

Improve the Performance of Car Rental Operations

Historically, TEAM has enhanced the profitability of its acquired franchise
territories by reducing operating costs and increasing rental revenue.
Similarly, in 1996, BRACC began initiatives that are already significantly
improving the performance of its company-owned operations. Upon completion of
the Budget Acquisition, management believes Budget Group will be able to combine
key elements of the TEAM and BRACC strategies to achieve even greater operating
efficiencies. Budget Group expects to undertake significant initiatives to (i)
enhance the performance of its U.S. car rental operations, (ii) capitalize on
the increased level of company-owned locations, (iii) increase its marketing to
corporate accounts, (iv) place increased emphasis on the leisure and local
rental markets, and (v) expand and improve Budget's international operations.

Enhance the Performance of U.S. Car Rental Operations. TEAM and BRACC have
each successfully enhanced the profitability of their operations by implementing
cost reduction strategies. These strategies have

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<PAGE> 50

included centralizing certain corporate functions (such as credit card and
warranty processing), extending their fleet management practices in order to
improve fleet utilization and per unit cost versus yield, improving the timing
and processing of fleet deliveries and dispositions, reducing fleet downtime,
and improving fleet make/model composition to better match customer demand. TEAM
and BRACC have each also implemented cost management practices to reduce overall
personnel costs, lower vehicle maintenance expense and damage repair costs and
increase the effectiveness of their servicing procedures. In order to increase
revenues of its acquired operations, TEAM and BRACC have utilized various yield
management models to optimize pricing and fleet utilization (for example, by
tracking demand patterns and allowing local managers to shift fleet inventory
between locations). The Budget Group believes that it will be able to utilize
various elements of these operating strategies to enhance the performance of the
combined TEAM/BRACC operations.

Capitalize on the Increased Level of Company-Owned Locations. Management
believes that the addition of the 151 locations that TEAM operates in its 13
franchise territories to the 304 locations operated by BRACC in the United
States will significantly improve the car rental operations of Budget Group in
the United States. Specifically, the increased level of company-owned operations
will facilitate a more consistent delivery of services, uniform prices and
communications to customers and allow Budget Group to improve its yields and
fleet utilization in many of its locations. Management believes that the
combination of TEAM and BRACC operations in contiguous markets will
significantly improve the marketing programs and operating efficiency of the
combined company. For example, Budget Group will be able to achieve increased
efficiencies by integrating BRACC's operations at Los Angeles International
Airport with TEAM's operations throughout Southern California, BRACC's
operations in the New York City area with TEAM's operation in Philadelphia, and
BRACC's operation in Boston with TEAM's operation in Hartford. Combining the
operations of TEAM and BRACC, Budget Group will operate in 21 of the 25 largest
airport rental markets in the United States. Budget Group will seek to manage
the combined companies more efficiently by integrating critical management
information systems, developing more comprehensive customer data and combining
the two companies' regional management organizations.

Increase Marketing to Corporate Accounts. For the year ended December 31,
1996, approximately one-half of Budget Group's car rental revenue was derived
from corporate accounts, with this customer base accounting for approximately
one-half of Budget Group's rentals from airport locations. Management believes
that it will be able to increase the contribution from corporate accounts, both
in absolute dollars and as a percentage of its car rental revenues, by
significantly increasing its marketing efforts to corporate accounts.
Specifically, management believes that middle market companies (companies that
would have accounts in the $500,000 to $1.0 million annual revenue range)
provide usage and yield characteristics that are favorable for Budget Group.
Management expects to broaden Budget Group's marketing effort to this targeted
customer base by adding additional marketing personnel and believes that the
improved consistency of service and pricing throughout the Budget System, driven
in significant part by the higher proportion of company-owned locations, will be
particularly important in marketing to this customer base.

Place Increased Emphasis on the Leisure and Local Markets. Budget Group
intends to place an increased emphasis on the leisure and local markets upon
completion of the Budget Acquisition. Budget's success in the leisure market has
been driven by its reputation for offering vacation travelers favorable rates on
high quality cars and the strength of its operations at airports in travel
destinations. Management believes that corporate ownership of Budget's
operations in Florida, Hawaii, Southern California and Phoenix will improve
Budget Group's ability to market Budget's services to tour operators, travel
agents, travel wholesalers and cruise lines.

The local segment of the car rental industry consists of facilities located
near downtown or suburban areas and is directed toward individuals renting cars
while their automobiles are being repaired, for out of town travel or for
special occasions, and toward businesses seeking automobiles or vans for
occasional local use. Budget was founded in 1958 in order to serve this segment,
and enhanced its position through an affiliation with Sears, Roebuck & Co.
("Sears") in 1970 (which allows Budget to rent cars and trucks under the Sears
name ("Sears Car and Truck Rental") at over 900 locations throughout the United
States). BRACC currently maintains more full-service local market locations
worldwide than its major competitors. Maintaining a strong position in the local
market significantly improves Budget's fleet utilization, as cars may be
shuttled from airports to downtown and suburban locations for weekend use.
Management believes that it will be able to improve its performance in

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<PAGE> 51

the local market segment by adding locations in certain existing local markets,
which should allow Budget Group to generate additional revenues with relatively
small increases in administrative overhead. Additionally, such locations
typically have less intense rate competition and fewer corporate customers
utilizing negotiated rate structures.

Expand and Improve International Operations. Budget is one of only three
systems that offers rental vehicles throughout the world under a single brand
name and Budget is recognized as a market leader in several key foreign markets,
including Canada, Germany and many Latin American and Caribbean countries.
Management believes that the strength of the Budget System in foreign markets
has important value in name recognition and serving the needs of local customers
and international travelers. For 1996, approximately 44.1% of the Budget
System's worldwide revenues were derived from its 2,252 locations in more than
110 countries. Company-owned operations at international locations in the United
Kingdom, France, Switzerland, Australia and New Zealand accounted for
approximately 8.3% of the Budget System's 1996 international revenues, with the
remainder attributable to the operations of approximately 2,182 franchised
locations. Management believes that it will be able to improve Budget Group's
international operations by implementing programs through which underperforming
franchisees will be able to improve their operating results. Management also
believes that certain emerging markets, such as the Pacific Rim and Southeast
Asia, provide growth opportunities for the Budget System, and that it will be
able to add locations in these markets, either directly or through franchisees.

Continue to Expand Retail Car Sales Operations

The increased cost of new cars and the improved reliability of low-mileage,
late model cars have contributed to greater market demand for late model cars in
recent years. Notwithstanding this growth, the retail car sales market remains
highly fragmented, with most late model cars being sold through the used car
operations of local or regional new car dealerships. Management believes that
the market for late model cars is currently undergoing significant changes, with
the emergence of companies retailing late model cars on a national or regional
basis.

TEAM's Principal Executive Officers have more than 25 years of experience
in acquiring and selling low-mileage, late model cars. Budget Group, with 22
retail car sales facilities and pro forma car sales revenues of $257.8 million
for 1996, will be one of the largest independent retailers of late model cars in
the United States. Management believes that it will be able to improve the
performance of the acquired BRACC retail sales facilities by incorporating
certain systems that TEAM has utilized in its retail car sales operations and
that it will be able to achieve efficiencies by combining and centralizing
certain functions.

Budget Group plans to establish a nationally recognized and branded retail
car sales operation which will provide low mileage, late model cars to consumers
in a new car sales environment under the Budget Car Sales brand. Management
expects Budget Group to establish multiple sales facilities in many of its
markets, which will allow Budget Group to benefit from shared administration and
marketing programs with its vehicle rental business.

Expand Truck Rental Operations

The Budget System is unique among major car rental systems in that it rents
trucks to consumers and commercial users in most major markets worldwide, with
the fourth largest consumer truck rental fleet in the United States. Budget has
long been considered an innovator in the truck rental market, having introduced
the first all-diesel-equipped and all-automatic-transmission fleets for consumer
use, as well as four-door versions of moving trucks that provide seating for a
family or moving crew. TEAM has implemented a strategy of expanding its truck
rental operations in its franchised territories, and management believes Budget
Group will be able to significantly expand Budget's truck rental business
following the Budget Acquisition. Management expects Budget Group to add truck
rental locations in various markets, particularly in conjunction with the
addition of new local market locations. Management believes that adding truck
rental locations will leverage certain fixed costs and increase consumer
awareness of the Budget brand, while favorable pricing trends in the truck
rental market are expected to provide attractive returns on invested capital.

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THE BUDGET SYSTEM

BRACC provides consistent system-wide services, a state-of-the-art
reservation system and other opportunities to all vehicle rental locations
within the Budget System. For 1996, pro forma for the consummation of the Budget
Acquisition, Budget Group constituted approximately 76% of the U.S. revenues of
the Budget System.

System-Wide Services. BRACC provides the Budget System with: (i) national
promotion, advertising and public relations; (ii) reservations and information
systems; (iii) data processing support; (iv) marketing programs with hotels and
airlines; (v) Sears Car and Truck Rental concessions; (vi) a sales staff for
marketing to corporate customers and the travel community; (vii) credit card
services for commercial customers; (viii) training in local marketing
techniques; (ix) operation, training and support; (x) fleet purchasing programs;
and (xi) a company-owned fleet of cars and trucks for one-way rentals. In
general, pursuant to its agreements with its franchisees, BRACC is required to
expend a certain percentage of franchise royalties that it receives on
advertising and promotion. In addition, BRACC negotiates with automobile
manufacturers to develop vehicle acquisition and disposition programs that are
available to franchisees as well as to company-owned locations.

BRACC facilitates one-way car rentals between approximately 325 selected
company-owned and franchised locations in the United States. This one-way
program is also in place for truck rentals at approximately 325 locations. A
limited fleet of vehicles owned by BRACC is dedicated to supplement the one-way
vehicle rental capacity of the participating locations. This program enables the
Budget System to operate more fully as an integrated network of locations.

Reservations System. BRACC operates a state-of-the-art computerized
reservation system through WizCom. Budget's main reservation facility is located
in the Dallas metropolitan area and has over 400 employees. Auxiliary centers
are located in Toronto, Canada, the United Kingdom, Australia and New Zealand.
These centers are linked with the major airline and travel industry reservation
systems through the worldwide Budget reservation network. The main reservation
facility accepts inquiries and reservations for Budget System locations
worldwide on a 24-hour basis, 365 days a year. The reservation centers utilize
an extensive database maintained on rates and vehicles available for nearly all
Budget System locations, a special file of pertinent information on frequent
renters and other information that facilitates the Budget System's business.

Sears Car and Truck Rental. In 1970, BRACC established a contractual
relationship with Sears which allows Budget operating locations to provide car
and truck rental under the Sears name. Sears Car and Truck Rental customers may
use their Sears charge card for payment of rental charges. Sears Car and Truck
Rental is available at approximately 900 Budget locations in the United States.

MANAGEMENT STRUCTURE

Budget Group will be managed by a combination of managers from TEAM and
BRACC. Sanford Miller, the Chairman and Chief Executive Officer of TEAM, will be
the Chairman and Chief Executive Officer of Budget Group. The existing
managements of TEAM and BRACC will be integrated to create an effective and
experienced management team for Budget Group which draws upon the knowledge and
strengths of the two organizations. TEAM management anticipates that the
majority of BRACC's corporate functions will continue to be managed by existing
BRACC personnel. See "Management." Budget Group's primary corporate functions
will be centralized in its headquarters in Lisle, Illinois, the worldwide
headquarters of BRACC. TEAM previously maintained a decentralized management
structure of its day-to-day rental operations. As part of the Budget
Acquisition, TEAM's rental operations will be merged into BRACC's and
centralized to take advantage of cost benefits associated with centralization.

TEAM coordinates vehicle purchases among its franchised territories to
enable it to benefit from volume purchases of vehicles. TEAM handles billing and
collection on a decentralized basis, but employs centralized cash management to
permit optimal use of its financial resources. TEAM's corporate staff manages
the acquisition and financing of new operating locations and general managers
develop local vehicle rental markets.

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RENTAL OPERATIONS

Budget rents a wide variety of automobiles and trucks, most of which
consist of the current and immediately preceding model years. Vehicle rentals
are generally made on a daily, weekly or monthly basis and generally include
unlimited mileage. Rental charges are computed on the basis of the length of the
rental or, in some cases, on the length of the rental plus a mileage charge.
Rates vary at different locations depending on the type of vehicle rented, the
local market and competitive and cost factors. Most rentals are made utilizing
rate plans under which the customer is responsible for gasoline used during the
rental. Budget also generally offers its customers the convenience of leaving a
rented vehicle at a Budget location in a city other than the one in which it was
rented, although, consistent with industry practices, a drop-off charge or
special intercity rate may be imposed.

The following table sets forth for the periods indicated the number of
owned and franchised locations of Budget in North America and at international
locations and certain other data of Budget Group:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------
1995 1996
------- -------
<S> <C> <C>
Locations in operation at end of period:
United States:
BRACC-owned............................................ 311 304
TEAM-owned............................................. 133 152
Other franchisees...................................... 560 500
------- -------
Total U.S......................................... 1,004 956
International:
BRACC-owned............................................ 79 70
Franchisees............................................ 2,027 2,182
------- -------
Total International............................... 2,106 2,252
------- -------
Budget System................................ 3,110 3,208
Average fleet size(a)....................................... 233,081 235,874
</TABLE>

- ---------------

(a) Average fleet size is the number of vehicles (both cars and trucks) owned or
leased by Budget each day of the period divided by the number of days in the
period.

North American Operations

At December 31, 1996, BRACC owned and operated 304 Budget locations in the
United States, and franchisees (including TEAM) owned and operated 651 Budget
locations in the United States and 390 Budget locations in Canada. Of the U.S.
facilities, nearly 300 primarily serve airport business and more than 650 serve
local market (downtown and suburban) locations. Budget's mix of business
consists of approximately 65% in the airport segment and 35% in the local
segment. In addition, BRACC rents trucks at 137 of its company-owned locations.

Budget is in many cases one of five to seven vehicle concessionaires at the
airports in which it operates. In general, concession fees for airport locations
are based on a percentage of total commissionable revenues (as determined by
each airport authority), subject to minimum annual guaranteed amounts.
Concessions are typically awarded by airport authorities every three to five
years based upon competitive bids. Budget's concession arrangements with the
various airport authorities generally impose certain minimum operating
requirements, provide for relocation in the event of future construction and
provide for abatement of the minimum annual guarantee in the event of extended
low passenger volume.

International Operations

At December 31, 1996, BRACC owned and operated 70 international Budget
locations, consisting of 36 European locations (including the Middle East and
Africa) and 34 locations in the Asia/Pacific region, and franchisees owned and
operated 2,182 international Budget locations, consisting of 1,140 European
locations, (including the Middle East and Africa), 263 Latin American locations
and 389 locations in the Asia/Pacific

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region. Budget locations can be found in more than 110 countries outside the
United States. Budget is recognized as a market leader in Canada, Germany and
many Latin American and Caribbean countries.

Van Pooling Operations

Van Pool, TEAM's commuter van pooling subsidiary, was acquired by TEAM in
February 1996 and maintains offices in 21 cities located in 15 states and the
District of Columbia. Founded in 1977, Van Pool provides van pooling services to
individuals, corporations and municipalities. Pursuant to van pool agreements
between TEAM and either the volunteer driver, corporation or municipality (the
"contracting party"), the contracting party agrees to drive or arrange a van
pool which travels a fixed route set by TEAM. TEAM sets the fees, which are
collected by the driver and remitted to TEAM. Van Pool employs approximately 40
individuals at its home office in Troy, Michigan and approximately 40
individuals in its local markets, and at December 31, 1996 operated a fleet of
approximately 3,250 passenger vans.

RENTAL VEHICLE PURCHASING

Budget participates in a variety of vehicle purchase programs with major
domestic and foreign vehicle manufacturers. On average during model year 1996,
79% of BRACC's vehicle purchases consisted of Ford vehicles, 5% of Toyota
vehicles, and the remaining 16% of General Motors, Mazda and Chrysler vehicles.
These percentages vary among BRACC's operations and will most likely change from
year to year. The average price for automobiles purchased by BRACC in 1996 for
its rental fleet was approximately $18,300. TEAM also participates in a variety
of vehicle purchase programs with major domestic and foreign manufacturers. On
average during 1996, 42% of the automobile purchases consisted of Chrysler
vehicles, 15% of Ford vehicles and 21% of Nissan vehicles. The average price for
automobiles purchased by TEAM in 1996 for its rental fleet was approximately
$18,100.

Budget's principal relationship has historically been with Ford, with an
emphasis on products from the Lincoln-Mercury Division of Ford. In 1988, Budget
entered into a ten-year supply agreement with Ford, which committed Budget to
acquire 70% of its vehicle requirements for company-owned rental locations from
Ford. Under this agreement, Ford agreed to remain competitive in products and
vehicle programs offered to Budget. Concurrently with the Budget Acquisition,
BRACC will enter into a new ten-year Supply Agreement with Ford. Under the new
Supply Agreement, BRACC and its affiliates (including TEAM) will agree (i) to
purchase or lease at least 70% of the total number of vehicles leased or
purchased by it in each model year from Ford and (ii) to purchase or lease at
least 80,000 new Ford vehicles in each model year in the United States. See "The
Budget Acquisition -- Related Agreements -- Supply Agreement."

FLEET UTILIZATION AND SEASONALITY

Budget's business is subject to seasonal variations in customer demand,
with the summer vacation period representing the peak season for vehicle
rentals. The general seasonal variation in demand, along with more localized
changes in demand at each of BRACC's locations, causes BRACC to vary its fleet
size over the course of the year. For the year ended December 31, 1996, BRACC's
average monthly fleet size ranged from a low of 64,400 vehicles in January to a
high of 88,600 vehicles in August. Fleet utilization, which is based on the
average number of days vehicles are rented compared to the total number of days
vehicles are available for rental, ranged from 73% in January to 83% in August
and averaged 77% for the year ended December 31, 1996.

In 1996, TEAM's average monthly fleet size (excluding Van Pool) ranged from
a low of 10,694 vehicles in January to a high of 18,870 vehicles in July. Fleet
utilization ranged from 79% in June to 85% in August and averaged 81% for the
year ended December 31, 1996.

RENTAL RELATED PRODUCTS

Although the dominant source of Budget Group's total revenue is time and
mileage charges from the rental of vehicles and franchise payments from its
franchisees, Budget Group also generates revenue from rental related products
such as loss damage waivers, personal accident insurance, personal effects
protection, additional liability insurance, other travel related insurance
coverages and travel related products. The travel related products from

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which Budget Group generates revenue include vehicle upgrades, gasoline sales,
intercity drop-off charges and miscellaneous items such as baby seats, ski
racks, cellular phones and additional driver fees.

MARKETING

BRACC's promotional and marketing activities are designed to promote Budget
as a value service provider and to promote brand loyalty. BRACC has a sales
force of approximately 200 employees worldwide. Budget's national advertising
program is implemented through a variety of media, including national and local
television, radio, newspapers, magazines, airline ticket jackets, airline
in-flight magazines and strategically located billboards, an Internet site,
counter and store collateral materials and merchandise. BRACC also has
cooperative advertising arrangements with airlines, hotels, travel agency
consortia and others in the travel industry. Budget participates in a number of
airline frequent flyer programs (including United Airlines, Southwest Airlines,
Alaska Airlines, Aeromexico and Lufthansa), as well as certain hotel programs,
theme park programs and credit card affinity programs. Budget also has a
frequent renter program, Awards Plus, which gives renters a strong incentive to
bring all of their car rental business to Budget. In addition, BRACC has
contracts with a number of airlines, hotels and other organizations pursuant to
which such organizations agree to recommend Budget's services during their
reservation calls and to transfer interested customers to a Budget reservation
agent. In addition, in connection with the Budget Acquisition BRACC will
undertake to carry out promotional programs that feature and promote the rental
of Ford vehicles. See "The Budget Acquisition -- Related
Agreements -- Advertising Agreement."

CUSTOMER SERVICE

Budget's commitment to delivering a consistently high level of customer
service is a critical element of its success strategy. Each month, over 3,000
Budget customers are randomly surveyed to measure service levels by location.
Budget identifies specific areas of achievement and opportunity from these
surveys. Areas of improvement are addressed on a system-wide level and standard
methods and measures are developed. To drive improvement, the service standards
are audited routinely by management and service delivery standards accessors.
The major areas of these assessments include: (i) speed of rental/return process
including busing where applicable, (ii) vehicle condition and availability,
(iii) customer interaction including helpfulness and courtesy and (iv) location
image. In addition, Budget utilizes a toll-free "800" number that allows
customers to report problems directly to the Customer Relations department.
Monthly reports of the types and number of complaints received are used in
conjunction with the customer satisfaction reports by location management as
feedback of customer service delivery. Furthermore, Budget participates in the
annual J.D. Power and Associates survey process to ensure that competitive
levels of performance are achieved.

INFORMATION TECHNOLOGY

BRACC's information technology is designed to provide Budget worldwide with
high quality, cost effective systems and services on a timely basis. In late
1995, BRACC implemented its state-of-the-art reservation system, which consists
of a highly integrated mainframe system with an intelligent workstation
component for reservation agents, allowing them to access pertinent information
in a fast and user-friendly manner. The reservation system has direct interfaces
to the airline system and captures key corporate and customer information.

BRACC's rental counter and back-office system, BEST I, supports both
company-owned and franchisee operations. BRACC's fleet system supports fleet
finance, dealership accounting and ordering for all brands of vehicles including
direct ordering lines to Ford, Toyota, Nissan and Mazda. BRACC's human
resources, benefits and payroll interface is supported by a client server system
that automatically feeds to an outsourced payroll system. In 1997 and 1998,
Budget Group intends to continue to enhance and consolidate its information
technology systems allowing Budget to deliver consistent customer service at all
of its locations.

VEHICLE RENTAL FACILITIES

TEAM and BRACC lease substantially all of their U.S. airport and local
market rental facilities and operated from 455 rental locations at December 31,
1996. The airport facilities are located on airport property owned by

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airport authorities or located near the airport in locations convenient for bus
transport of customers to the airport. Each airport facility includes vehicle
storage areas, a vehicle maintenance facility, a car wash, a refueling station
and rental and return facilities. Local market rental facilities generally
consist of a limited parking facility and a rental and return desk and are
generally subject to fixed-term leases with renewal options. Certain of these
leases also have purchase options at the end of their terms.

FRANCHISING

Of Budget's 3,208 locations at December 31, 1996, 2,833 are owned and
operated by franchisees with franchisees representing 62% of 1996 system-wide
revenues. As of December 31, 1996, BRACC maintained over 800 separate franchise
agreements with almost 600 franchisees (including TEAM). BRACC has franchise
locations in more than 110 countries worldwide. Franchised locations range from
large operations in major airport markets with fleet sizes in excess of 4,000
vehicles and franchise territories within an entire country to operations in
small markets with fleets of fewer than 50 vehicles.

BRACC considers its relationships with its franchisees to be excellent. It
works closely with franchise advisory councils (which have historically included
TEAM management) in formulating and implementing sales, advertising and
promotion, and operating strategies and meets regularly with these advisors and
other franchisees at regional, national and international meetings. BRACC has an
ongoing growth strategy of adding new franchises worldwide when opportunities
arise. Incremental franchises provide BRACC with a source of high margin revenue
as there are relatively few additional fixed costs associated with fees paid by
new franchisees to BRACC.

BRACC's relationship with each Budget franchisee is governed by franchise
agreements (the "Franchise Agreements"), which grant to the franchisees certain
exclusive territories in which to operate the Budget vehicle rental business.
The Franchise Agreements provide BRACC with significant rights regarding the
business and operations of each franchise and impose restrictions on the
transfer of the franchise and on the transfer of the franchisee's capital stock
without the consent of BRACC. Each franchisee is required to operate each of its
franchises in accordance with certain standards contained in the Budget
operating manual (the "Operating Manual"). BRACC has the right to monitor the
operations of franchisees and any default by a franchisee under a Franchise
Agreement or the Operating Manual may give BRACC the right to terminate the
underlying franchise.

In general, the Franchise Agreements grant the franchisees the exclusive
right to operate a Budget Rent a Car and/or Budget Rent a Truck business in a
particular geographic area for a stated period. Franchise Agreements generally
provide for an unlimited number of renewal terms. Upon renewal, the terms and
conditions of Franchise Agreements (other than with respect to royalty fees) may
be amended from those contained in the existing Franchise Agreements. The
standard royalty fee payable to BRACC under Franchise Agreements is 7.5% of
gross rental revenues in the United States and 5% of gross rental revenues in
international markets, but certain of the BRACC franchisees have franchise
agreements with different royalty fee structures.

Pursuant to each Franchise Agreement, the franchisee must meet certain
guidelines relating to the number of rental offices in the franchised territory,
the number of vehicles maintained for rental and the amount of advertising and
promotion expenditures. In general, each Franchise Agreement provides that the
franchisee shall not engage in any other vehicle rental business within the
franchise territory during the term of such agreement and for 12 months
thereafter. In addition, franchisees agree not to use the word "Budget" or any
other Budget trademark other than in their vehicle rental business.

RENTAL VEHICLE DISPOSITION

BRACC's operating strategy is to maintain its fleet at an average age of
four months or less, and TEAM's operating strategy has been to maintain its
fleet at an average age of six months or less. Approximately 88% of the vehicles
purchased by BRACC and approximately 85% of the vehicles purchased by TEAM in
model year 1996 were Program Vehicles. These programs currently require that
TEAM and BRACC maintain Program Vehicles in their fleets for a minimum number of
months and impose numerous return conditions, including those related to mileage
and repair condition. More than 97% of the Program Vehicles purchased by Budget
Group and scheduled to be returned in 1996 were eligible for return. At the time
of return to the manufacturer, BRACC and

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TEAM receive the price guaranteed at the time of purchase and are thus protected
from fluctuations in the prices of previously-owned vehicles in the wholesale
market at the time of disposition. The future percentages of Program Vehicles in
Budget Group's fleet will be dependent on the availability and attractiveness of
manufacturers' repurchase programs, over which Budget Group has no control. See
"Risk Factors -- Potential Changes in Manufacturers' Repurchase Programs."

In addition to manufacturers' repurchase programs, BRACC and TEAM dispose
of their rental fleet through automobile auctions, sales to wholesalers and
internal retail car sales operations. While the disposal of rental vehicles
through internal retail car sales operations has been limited to date,
management believes that such dispositions may increase as Budget retail car
sales operations continue to grow and as management evaluates the mix of Budget
Group's Program Vehicles and vehicles not subject to manufacturers' repurchase
programs.

RETAIL CAR SALES OPERATIONS

As of December 31, 1996, TEAM operated 11 retail car sales facilities,
establishing TEAM as one of the largest independent retailers of late model cars
in the United States, with 1996 revenues of approximately $134.1 million. As of
December 31, 1996, BRACC operated 11 retail car sales facilities, with 1996
revenues of approximately $91.5 million. TEAM and BRACC sell cars, sport utility
vehicles and trucks through their retail car sales facilities.

Retail Car Sales Inventory. In 1996, the vehicles sold at Budget retail
car sales facilities consisted primarily of 1996 model year automobiles and
passenger vans, with some 1995 model year vehicles and very few 1994 model year
vehicles. TEAM and BRACC have historically acquired most of their retail car
sales inventory at auctions, although they have acquired some cars from their
rental fleets. In the future, Budget Group expects to increase its acquisitions
of cars from the disposition of cars used in its rental fleet and to purchase a
smaller portion from auctions. TEAM and BRACC coordinate car purchases among
their retail car sales locations to enable them to benefit from volume purchases
of cars.

Trademarks. TEAM and BRACC operate their retail car sales operations under
the name "Budget Car Sales," and Budget Group intends to continue to operate its
retail car sales facilities under that name after the Budget Acquisition.

Vehicle Pricing and Financing. While many cars display stickers indicating
their "blue book" value, customers are permitted to negotiate pricing terms with
the sales managers. Various local enterprises provide financing to customers of
TEAM and BRACC on a non-exclusive basis. To supplement its sale of vehicles,
TEAM and BRACC sell extended service contracts and related consumer products to
their customers.

Retail Car Sales/Service Facilities. Each of TEAM's retail car sales
facilities consists of a showroom and an outdoor display area, which together
accommodate the on-site display of at least 100 cars, and a service area.
Although certain of TEAM's retail car sales facilities have been converted from
facilities that were used in other businesses, TEAM prefers to build its own
retail car sales facilities and believes that such facilities can be built at an
average cost of approximately $1.2 million. The service departments operated at
each retail car sales facility are responsible for inspecting a car's condition
and for providing necessary reconditioning and maintenance services before sale.
These services are provided uniformly for its retail car sales facilities in
accordance with an inspection checklist developed by TEAM. Service departments
also provide after-sale service for TEAM's customers. BRACC's retail car sales
facilities are typically smaller than TEAM's car sales facilities and do not
include service departments.

COMPETITION

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cutting, and TEAM and BRACC have on such occasions lowered their prices in
response. Budget Group will not generally be able to unilaterally raise its
prices or to maintain its prices in times of industry price cutting.

The retail car sales business is also characterized by intense competition
from a range of regional and local car dealerships and other retailers of
previously-owned vehicles. Management believes that Budget Group competes
primarily against new car dealers retailing previously-owned cars. Budget
Group's retail car sales facilities are located among similar facilities and, in
some instances, together with Budget Group's rental operations. The entry of
large, well-capitalized retailers of late model previously-owned cars may
provide Budget Group with significant additional competition. See "Risk
Factors -- Competition."

INSURANCE

TEAM currently has insurance coverage in an amount of up to $6.0 million,
with a $500,000 retention per occurrence, with respect to personal injury and
damage claims arising from the use of its vehicles, except with respect to
vehicles rented through its Los Angeles, San Diego, Albany and Rochester
operations. Under California law, vehicle rental customers are primarily liable
for damages arising from the use of rental vehicles. Vehicle rental companies
are secondarily liable for such damages up to an amount limited by California
law to $35,000 per occurrence, unless the vehicle rental company has negligently
maintained the vehicle or has "negligently entrusted" the vehicle to a rental
customer. Accordingly, TEAM does not maintain third party insurance coverage in
California. In New York, TEAM maintains insurance coverage with a third party
insurer, with no applicable deductible. TEAM's workers compensation insurance
coverage is subject to a $500,000 self-insurance retention. TEAM's general
liability coverage is $1.0 million per occurrence, $2.0 million aggregate
coverage with no retention.

BRACC currently has excess liability insurance coverage in an amount of up
to $3.0 million in excess of a $2.0 million self-insured retention on a per
occurrence basis in the United States and a $1.0 million self-insured retention
in the United Kingdom with respect to general liability claims and with respect
to personal injury and property damage claims arising from the use of vehicles
rented from company-owned locations. There is no self-insured retention for the
BRACC operation in France and only a $1,000 and $5,000 self-insured retention
for Australia and New Zealand operations, respectively. Claims resulting from
accidents occurring in the United States are administered by BRACC employees,
while claims resulting from accidents occurring at any international BRACC
locations are administered by third-party claim handling services. BRACC has
worker's compensation insurance with a $500,000 self-insurance retention, as
well as $100 million property insurance coverage subject to a $1.0 million
aggregate deductible with $250,000 per occurrence maintenance deductibles.

REGULATORY AND ENVIRONMENTAL MATTERS

TEAM and BRACC are subject to federal, state and local laws and
regulations, including those relating to taxing and licensing of vehicles,
franchising, consumer credit, environmental protection, retail vehicle sales and
labor matters.

Matters Affecting the Vehicle Rental Industry

Approximately 7.1% and 6.4% of the 1996 car rental revenues of TEAM and
BRACC, respectively, were generated from the sale of loss damage waivers. The
United States House of Representatives has from time to time contemplated
legislation that would regulate the conditions under which loss damage waivers
may be sold by car rental companies. For example, in January 1995, a bill was
introduced in the United States House of Representatives which seeks to prohibit
the imposition of liability on renters for loss of, or damage to, rented
vehicles, except in certain circumstances, and, if passed, would prohibit the
sale of loss damage waivers. To date, no action has been taken on this bill. In
addition, approximately 40 states have considered legislation affecting the sale
of loss damage waivers. To date, 18 of those states have enacted legislation
requiring disclosure to each customer at the time of rental that a loss damage
waiver may not be necessary; certain states have enacted legislation limiting
rental car companies' right to offer loss damage waivers for sale and limiting
potential customer liability to specified amounts; and other states have capped
the rates that may be charged for loss damage waivers to stated amounts per day.
Adoption of national or additional state legislation limiting the sale, or

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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 Budget Group. 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. 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. The National Association of Attorneys
General has promulgated suggested guidelines for car rental advertisements.

Environmental Matters

The principal environmental regulatory requirements applicable to TEAM and
BRACC operations relate to the ownership or use of tanks for the storage of
petroleum products, such as gasoline, diesel fuel and waste oils; the treatment
or discharge of waste waters; and the generation, storage, transportation and
off-site treatment or disposal of waste materials. TEAM and BRACC operate at
approximately 170 locations where petroleum products are stored in underground
or aboveground tanks. TEAM and BRACC each maintain environmental compliance
programs designed to maintain compliance with applicable technical and
operational requirements, including periodic integrity testing of underground
storage tanks and providing financial assurance for remediation of spills or
releases. TEAM and BRACC believe that their respective operations currently are
in compliance, in all material respects, with such regulatory requirements.
However, there are several technical specifications regarding underground
storage tanks applicable to the TEAM and BRACC facilities in the United States,
many of which will become effective in 1998. Although the exact cost of
complying with those requirements has not been estimated, such expenditures
could, in the aggregate, be significant.

The historical and current uses of the TEAM and BRACC facilities may have
resulted in spills or releases of various hazardous substances or petroleum
products which now, or in the future, could require remediation. TEAM and BRACC
also may be subject to requirements related to the remediation of, or the
liability for remediation of, hazardous substances that have been released to
the environment at properties they own or operate or at properties to which they
send hazardous substances for treatment or disposal. Such remediation
requirements generally are imposed without regard to fault and liability for any
required environmental remediation, and can be substantial. TEAM and BRACC may
be eligible for reimbursement or payment of remediation costs associated with
releases from registered underground storage tanks in states that have
established funds to assist in the payment of such remediation costs. Subject to
certain deductibles, the availability of funds, compliance status of the tanks
and the nature of the release, these tank funds may be available to TEAM and
BRACC for use in remediating releases from their tank systems.

TEAM Locations. Certain of the TEAM locations have been the subject of
environmental remediation as a consequence of leaks or spills and continue to
have some level of environmental impairment that may require further
remediation. In connection with the acquisition of franchise territories in
Philadelphia, Pittsburgh and Cincinnati, the seller, Chrysler Credit
Corporation, Inc. ("CCC"), agreed to provide up to $873,750 through 1997 for
remediation activities at sites in those areas shown to be impaired by
assessments performed under the supervision of TEAM. Although the ultimate cost
of these remediation activities is currently unknown, management believes that
the amount of funding to be provided by CCC will be sufficient to cover the cost
of these remediation activities.

BRACC Locations. Approximately 140 BRACC-owned rental facilities contain
underground storage tanks. In connection with the Budget Acquisition, Ford has
agreed to indemnify TEAM against losses arising out of or resulting from
breaches by BRACC of BRACC representations and warranties in its Stock Purchase
Agreement (including those relating to environmental matters) incurred by TEAM,
to the extent such losses are not covered by an insurance policy or a reserve
established by BRACC, relating to any action by a third party in connection with
environmental matters. However, Ford is not required to indemnify TEAM unless
such loss individually exceeds $15,000 and the breach of all representations and
warranties (including those relating to environmental matters) has resulted in
aggregate losses in excess of $2.0 million, except that Ford will not be
required to pay the first $2.0 million of aggregate losses (including those
relating to environmental matters). Although the potential cost of any necessary
remediation at those facilities is not precisely known, it is not expected to
exceed $10 million over the next three to five years.

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See "Risk Factors -- Regulatory and Environmental Matters."

Franchise Matters

As a franchisor, BRACC is 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

Regulations enacted by various federal and state authorities affect Budget
Group's businesses. The financing activities of Budget Group's retail car sales
operations are subject to federal truth in lending, consumer leasing and equal
credit opportunity regulations, as well as state and local motor vehicle finance
laws, installment finance laws, insurance laws, usury laws, installment sales
laws and other consumer protection regulations.

LEGAL MATTERS

From time to time, TEAM and BRACC are subject to routine litigation
incidental to their businesses. Neither TEAM nor BRACC is currently involved in
any legal proceeding which it believes would have a material adverse effect upon
its financial condition or operations.

EMPLOYEES

TEAM had approximately 2,000 employees at December 31, 1996, including
part-time and "on call" employees who shuttle vehicles between locations. At
December 31, 1996, 50 employees in San Diego, 50 employees in Pittsburgh and 46
employees in Philadelphia were subject to collective bargaining agreements. The
collective bargaining agreement covering the San Diego employees expires in
October 1997, the collective bargaining agreement covering the Pittsburgh
employees expires in November 1998 and the collective bargaining agreement
covering the Philadelphia employees expires in October 1998. TEAM believes that
its employee relations are good.

BRACC had approximately 9,800 employees at December 31, 1996, including
part-time and "on call" employees who shuttle vehicles between locations. At
December 31, 1996, 1,021 employees in various locations throughout the United
States were subject to collective bargaining agreements. These collective
bargaining agreements expire between 1997 and 1999. BRACC believes that its
employee relations are good.

HEADQUARTERS

TEAM's headquarters facility consists of 2,500 square feet of leased space
in Daytona Beach, Florida. BRACC's headquarters facility consists of 149,088
square feet of leased office space plus 11,400 square feet of space for a data
center in Lisle, Illinois, a suburb of Chicago. Other significant BRACC
properties include a 69,300 square foot reservations center in Carrollton,
Texas, which is owned by BRACC, a 61,168 square foot leased administrative
center in Orlando, Florida, and a 21,600 square foot leased international
headquarters facility in Hemel Hempstead, England, a suburb of London.
Management believes that these facilities are sufficient for the needs of Budget
Group.

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THE BUDGET ACQUISITION

GENERAL

On January 13, 1997, TEAM entered into the Stock Purchase Agreements with
Ford, BRACC and John J. Nevin (the common stockholder of BRACC), pursuant to
which, upon the terms and subject to the conditions thereof, TEAM will acquire
the capital stock of BRACC. Consummation of the Offering will occur concurrently
with, and is conditioned upon, consummation of the Budget Acquisition, the Debt
Placements and the New Fleet Financings, and will provide a portion of the
financing for the Budget Acquisition.

TERMS OF THE STOCK PURCHASE AGREEMENT

Consideration. The consideration to be paid by TEAM pursuant to the Stock
Purchase Agreements consists of (i) approximately $275.0 million of Cash
Consideration (subject to adjustment under circumstances) and (ii) the issuance
to Ford of the Equity Consideration. The Equity Consideration will be the
greater of (i) 4,500 shares of the newly created Series A Convertible Preferred
Stock and (ii) a number of shares of Series A Convertible Preferred Stock equal
to the product of (x) .001 and (y) the quotient obtained by dividing 75,000,000
by the average of the closing prices of the Class A Common Stock for the ten
consecutive trading days immediately preceding the second trading day prior to
the closing date of the Budget Acquisition. Each share of Series A Convertible
Preferred Stock will be non-voting, will not carry a dividend and will
automatically convert into 1,000 shares of Class A Common Stock at such time as
the record ownership of such share of Series A Convertible Preferred Stock is
transferred to or held by any person or any entity other than Ford or any
affiliate of Ford. In addition, based upon the closing price of the Class A
Common Stock on The Nasdaq National Market on March 21, 1997, TEAM is obligated
under the Stock Purchase Agreements to purchase approximately $100.7 million of
the currently outstanding indebtedness of BRACC to Ford and Ford is obligated to
cancel an additional $128.3 million of outstanding BRACC indebtedness. Based
upon the closing price of the Class A Common Stock on The Nasdaq National Market
on January 13, 1997, the date of execution of the Stock Purchase Agreements, the
amount of BRACC indebtedness that TEAM agreed to purchase would have been $105.8
million and the amount of BRACC indebtedness that Ford agreed to cancel would
have been $123.3 million. TEAM is also obligated under the Stock Purchase
Agreements to refinance approximately $856.2 million of indebtedness outstanding
under BRACC's existing fleet financing facilities. See "Use of Proceeds."

Special Bonus Program. Pursuant to the Stock Purchase Agreements,
concurrently with the consummation of the Budget Acquisition, Ford is required
to contribute $2.4 million in cash to BRACC or TEAM in connection with the
establishment of a special bonus program (the "Special Bonus Program") providing
for bonus payments to BRACC employees with an aggregate value equal to $4.8
million. The Special Bonus Program will be on such terms as Ford and TEAM agree
after good faith negotiations and, in any event, will provide for broad
participation by employees of BRACC. TEAM may, at its option, fund one-half of
the Special Bonus Program in options to purchase Common Stock of TEAM. TEAM
currently plans to satisfy a portion of its obligations with respect to the
Special Bonus Program by issuing options under TEAM's 1994 Option Plan.

Conditions to the Closing. The obligations of TEAM, Ford, BRACC and the
other parties to the Stock Purchase Agreements to consummate the Budget
Acquisition are subject to the satisfaction or, where legally permitted, waiver
of certain conditions, including among others (i) the absence of any temporary
restraining order, preliminary or permanent injunction or other order or other
legal restraint or prohibition preventing the consummation of the transactions
contemplated by the Stock Purchase Agreements, (ii) the expiration or
termination of the waiting period applicable to the consummation of the Budget
Acquisition under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as
amended, (iii) redemption by BRACC of its outstanding Series X Preferred Stock
and (iv) termination of the existing stockholders' agreement between Ford and
the common stockholder of BRACC. The closing of each of the transactions
contemplated by the Stock Purchase Agreements is conditioned upon the concurrent
consummation of all of the transactions contemplated by the Stock Purchase
Agreements.

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Stockholder Approval. Simultaneously with the execution of the Stock
Purchase Agreements, the holders of all of the outstanding Class B Common Stock
of TEAM executed a written consent action approving the issuance of the Equity
Consideration. No other approval of the stockholders of TEAM is required in
connection with the Budget Acquisition.

Termination. The Stock Purchase Agreements may be terminated under certain
circumstances, including, among others, if the closing of the transactions
contemplated by the Stock Purchase Agreements shall not have occurred on or
prior to October 15, 1997 or by mutual written agreement of the parties to the
Stock Purchase Agreements.

Indemnification. Under the terms of the Stock Purchase Agreements, subject
to certain limitations described below, Ford has agreed to indemnify TEAM
against losses arising out of or resulting from (a) any breach by Ford of a
representation or warranty contained in the Stock Purchase Agreements, (b) any
breach by BRACC of any BRACC representation or warranty (without giving effect
(other than with respect to representations on environmental liabilities) to any
exception contained therein for matters that would or would not, as the case may
be, have a material adverse effect on BRACC), (c) any breach by the common
stockholder of BRACC of a representation, warranty or covenant contained in its
Stock Purchase Agreement or (d) any failure by Ford to perform any agreement or
covenant contained in the Stock Purchase Agreements. Ford will not be required
to indemnify TEAM for any losses except to the extent that (i) the breach of the
particular representations and warranties as to which indemnification is sought
has resulted in losses, individually, in excess of $15,000 and (ii) the breach
of all such representations and warranties as to which indemnification is sought
has resulted in aggregate losses in excess of $2.0 million (subject to limited
exceptions with respect to tax and environmental matters). Ford will not, in any
event, be required to pay (x) the first $2.0 million of losses incurred by TEAM
or (y) any losses of TEAM under the Stock Purchase Agreements or otherwise to
the extent that the aggregate amount of losses incurred by TEAM theretofore paid
by Ford exceeds $40.0 million. The $40.0 million limitation will not apply with
respect to any claim for indemnification in respect of a breach by BRACC of its
representations and warranties with respect to employee programs and taxes.
Claims for breaches of representations and warranties must be brought prior to
the first anniversary of the closing date of the Budget Acquisition (subject to
certain limited exceptions, including representations with respect to tax,
environmental and employee benefit matters).

TEAM has agreed to indemnify Ford against, and agreed to protect, save and
keep harmless Ford from payment of, and assumed liability for the payment of,
all losses arising out of or resulting from (i) any breach by TEAM of a
representation or warranty contained in the Stock Purchase Agreements or (ii)
any failure by TEAM to perform any agreement or covenant contained in the Stock
Purchase Agreements.

EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES TO BE ADDED IN CONNECTION WITH THE
BUDGET ACQUISITION

In connection with the Budget Acquisition, certain executive officers and
significant employees of BRACC are expected to join the management team of
Budget Group. See "Management."

INTEREST OF CERTAIN PERSONS IN THE BUDGET ACQUISITION

Series A Convertible Preferred Stock. Upon consummation of the Budget
Acquisition and the Offering, Ford will beneficially own an aggregate of
approximately 22.1% of the total outstanding shares of the Company's Class A
Common Stock (assuming conversion of all of the shares of Series A Convertible
Preferred Stock into shares of Class A Common Stock, but assuming no conversion
of any outstanding stock options, warrants, convertible notes or shares of Class
B Common Stock into Class A Common Stock). The Series A Convertible Preferred
Stock to be issued to Ford as the Equity Consideration will be automatically
converted into 4,500,000 shares of Class A Common Stock in the event that the
beneficial or record ownership of such shares of Series A Convertible Preferred
Stock is transferred to or held by any person or entity that is not Ford or an
affiliate of Ford. Ford may elect to transfer the Series A Convertible Preferred
Stock and thereby effect a conversion of the Series A Convertible Preferred
Stock into Class A Common Stock at any time. See "Description of Capital Stock."

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Preferred Stockholders Agreement. In connection with the consummation of
the Budget Acquisition, Ford and TEAM will enter into the Preferred Stockholders
Agreement (the "Preferred Stockholders Agreement"). Pursuant to the terms of the
Preferred Stockholders Agreement, Ford will agree that, during the period
commencing on the closing date of the Budget Acquisition and terminating on the
first anniversary of such closing date, Ford and its affiliates will not,
directly or indirectly, (i) purchase or otherwise acquire, or propose or offer
to purchase or otherwise acquire, any equity securities of TEAM if, immediately
after such purchase or acquisition, Ford's equity interest in TEAM would equal
or exceed the equity interest of Ford in TEAM as of the closing date of the
Budget Acquisition, or (ii) propose or offer to enter into certain Business
Combinations (the "Standstill Agreement"). "Business Combination" means any one
of the following transactions: (i) any merger or consolidation of BRACC or any
subsidiary of BRACC with Ford or any affiliate of Ford; (ii) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition by BRACC in one or a
series of transactions to or with Ford or any affiliate of Ford of all or a
substantial part of the consolidated assets of BRACC; (iii) the adoption of any
plan or proposal for the liquidation or dissolution of BRACC proposed by or on
behalf of Ford or any affiliate of Ford; or (iv) any reclassification of
securities, recapitalization of BRACC or any merger or consolidation of BRACC
with any subsidiary of BRACC or any other transaction to which BRACC is a party
which has the effect of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the Company or any
subsidiary of BRACC which is owned by Ford or any affiliate of Ford. The
Standstill Agreement will not apply during any period in which Ford's equity
interest in TEAM is less than ten percent, to any issuance and sale of new
equity securities by TEAM to Ford or any Ford affiliate, or to certain other
permitted acquisition transactions. Additionally, Ford will agree that it will
not, directly or indirectly, sell, transfer or otherwise dispose of any equity
securities of TEAM beneficially owned by Ford except pursuant to a registered
underwritten public offering, pursuant to an applicable exemption from the
registration requirements of the Securities Act, to TEAM or a subsidiary
thereof, or to a Ford affiliate. TEAM will agree that, during the period
beginning on the date of the Preferred Stockholders Agreement and ending on the
earliest of (i) nine months following the date thereof, (ii) the date on which
Ford's equity interest in TEAM is less than 50% of its equity interest as of the
closing date of the Budget Acquisition and (iii) if, on the date eight months
from the date of the Preferred Stockholders Agreement, there is not pending a
request for registration pursuant to Ford's demand registration rights
(including a request in connection with which securities registered pursuant to
a registration statement in connection with a Ford demand registration request
have not all been offered or fully distributed), then, on the eight-month
anniversary of the closing date of the Budget Acquisition, TEAM will not (x)
issue or sell TEAM equity securities (subject to certain exceptions), (y)
acquire control of any person or assets or business for cash consideration in
excess of $20 million or (z) make any acquisition in a transaction involving
TEAM equity securities (subject to certain exceptions) without the written
consent of Ford. Pursuant to the Preferred Stockholders Agreement, TEAM will
grant to Ford certain registration rights with respect to the equity securities
of TEAM held by Ford and its affiliates. See "Description of Capital
Stock -- Registration Rights."

RELATED AGREEMENTS

Supply Agreement. Concurrently with the consummation of the Budget
Acquisition, BRACC will enter into a supply agreement with Ford (the "Supply
Agreement"). Under the terms of the Supply Agreement, BRACC and its affiliates
(which term includes TEAM but does not include other Budget franchisees) will
agree to purchase or lease Ford vehicles in such quantity in the United States,
Canada and other countries outside the European Union so that the percentage of
Ford vehicles purchased or leased in each country will be at least 70% of the
total number of vehicles leased or purchased in each model year by BRACC and its
affiliates. In the United States, BRACC and its affiliates and franchisees will
purchase or lease at least 80,000 Ford vehicles in each model year. Under the
terms of the Supply Agreement, Ford and its affiliates will agree to offer to
BRACC and its affiliates and franchisees, for each model year, vehicles and
fleet programs that are generally competitive with the vehicles and fleet
programs of other automotive manufacturers. Ford also will agree to make
reasonable allocations of Ford vehicles available to BRACC and its affiliates
and franchisees, and such allocation in the United States in any model year must
be at least 80,000 vehicles. The Supply Agreement will be effective from
September 1, 1997 through August 31, 2007, and is subject to exceptions and
revisions upon the occurrence of force majeure events.

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<PAGE> 64

Under the terms of the Supply Agreement, Budget Group has agreed to pay
Ford, on September 1, 1998 and on each anniversary through September 1, 2004, an
annual royalty equal to the greater of (i) one percent of net vehicle revenue of
BRACC for the prior model year, or (ii) a specified minimum amount (equal to
$9.9 million for the September 1, 1998 annual royalty payment and subject to
adjustment for each annual period thereafter, based upon changes in the consumer
price index). The minimum royalty payable with respect to each model year will
be reduced by a stated amount for each Ford vehicle purchased by BRACC and its
affiliates and franchisees in excess of 123,000 Ford vehicles. The aggregate of
all royalties paid to Ford over the term of the Supply Agreement is subject to a
limit of $100 million.

Advertising Agreement. Concurrently with the consummation of the Budget
Acquisition, BRACC will enter into a 10-year advertising agreement with Ford
(the "Advertising Agreement") under which BRACC will undertake to carry out
promotional programs that feature and promote the rental of Ford vehicles. Such
promotional programs include a wide variety of advertising and promotional
activities to promote Ford products. Under the terms of the Advertising
Agreement, Ford will pay to Budget for such advertising and promotional
activities a stated base amount for each model year with an annual consumer
price index adjustment. The base amount is fixed for the first five model years
(beginning with model year 1998) and Ford and Budget agree to negotiate in good
faith to determine the base amount for the last five years of the Advertising
Agreement. Ford will not be required to pay the amount specified under the
Advertising Agreement for any model year if the percentage of Ford vehicles
acquired during the model year falls below 55%, subject to certain exceptions
set forth in the Advertising Agreement, and will be required to pay more than
the base amount if the percentage of Ford vehicles acquired during the model
year exceeds 55%. Payments by Ford under the Advertising Agreement are also
subject to reduction if the total of Ford vehicles acquired in any model year
falls below the total of Ford vehicles acquired in model year 1997.

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<PAGE> 65

MANAGEMENT

EXECUTIVE OFFICERS, DIRECTORS AND SIGNIFICANT EMPLOYEES

The following table sets forth certain information with respect to persons
who are expected to serve as executive officers, directors and significant
employees of Budget Group and its subsidiaries upon completion of the Budget
Acquisition:

<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE COMPANY
---- --- --------------------------
<S> <C> <C>
Sanford Miller.................................. 44 Chairman of the Board of Directors, Chief
Executive Officer and Director
John P. Kennedy................................. 52 President, Chief Operating Officer and Director
Jeffrey D. Congdon.............................. 54 Chief Financial Officer, Secretary and Director
Scott R. White.................................. 33 Executive Vice President, Corporate Development
Robert L. Aprati................................ 52 Senior Vice President & General Counsel --BRACC
Sandra S. Hughes................................ 48 Vice President, Licensee Integration -- BRACC
Donald J. Norwalk............................... 32 Vice President and Treasurer
Dennis M. O'Gara................................ 45 Vice President, Worldwide Sales -- BRACC
Karl H. Ottolini................................ 40 Vice President, Financial Planning &
Analysis -- BRACC
Mark R. Sotir................................... 32 Vice President, Worldwide Marketing -- BRACC
James J. Sweeney................................ 45 Vice President, Fleet Operations -- BRACC
L. Scott Tiemann................................ 38 Vice President and Corporate Controller
Stephen G. Worthley............................. 53 Vice President and Treasurer -- BRACC
Thomas B. Zorn.................................. 34 Vice President, Truck Operations -- BRACC
Ronald D. Agronin............................... 59 Director
James F. Calvano................................ 60 Director
Martin P. Gregor................................ 33 Director
Alan D. Liker................................... 59 Director
Jeffrey R. Mirkin............................... 44 Director
Dr. Stephen L. Weber............................ 55 Director
</TABLE>

Directors are elected annually to serve until the next annual meeting of
stockholders and until their successors are elected and qualified. Officers are
elected by and serve at the discretion of the Board of Directors.

Sanford Miller has been the Chairman of the Board of Directors and Chief
Executive Officer of TEAM since April 1994. From August 1991 to August 1994, he
was Vice President of Tranex Rental of New York, Inc. ("Tranex"), which operated
the Albany and Rochester Budget franchises, and from December 1991 to August
1994, was Vice President of Capital City Leasing, Inc. ("Capital City"), which
operated the Richmond, Virginia Budget franchise. From 1989 to 1991, Mr. Miller
served as Director of Marketing, Special Accounts for BRACC. From 1981 to 1989,
Mr. Miller was an executive officer and principal stockholder of corporations
that owned and operated 30 Budget franchises that were sold to BRACC in 1989.
From 1979 to 1981, he was a North East Regional Field Operations Manager for
BRACC. Mr. Miller served as President of the American Car Rental Association, a
nation-wide industry trade association, in 1993 and as Chairman of the Licensee
Local Market Advisory Board of the Budget System in 1989 and 1990. Mr. Miller is
also a director of MoneyGram Payment Systems, Inc. ("MoneyGram") and Colonial
Bank of Volusia County. Mr. Miller is the first cousin of Mr. Agronin.

John P. Kennedy has been President, Chief Operating Officer and a director
of TEAM since April 1994. From November 1991 to August 1994, he was President of
Metro West, Inc., whose wholly owned subsidiary previously owned TEAM's San
Diego airport operations. From September 1989 to October 1991, he was an
independent consultant to the vehicle rental industry. From July 1985 to August
1989, he served as President of NYRAC, Inc. d/b/a Budget Rent a Car of Kennedy
and La Guardia Airports. From 1968 to 1984, he served in various capacities with
Avis, including as Vice President of Operations.

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<PAGE> 66

Jeffrey D. Congdon has been the Chief Financial Officer, Secretary and a
director of TEAM since April 1994. Since December 1990, he has been Secretary
and Treasurer of Tranex Credit Corporation, which provides financing for
purchases of previously owned vehicles. From 1980 to 1989, he was an executive
officer and principal stockholder of corporations that owned and operated 30
Budget franchises that were sold to BRACC in 1989. From 1982 to 1996, Mr.
Congdon owned and operated retail new and/or used car sales operations in
Indianapolis, Indiana.

Scott R. White has been Executive Vice President, Corporate Development of
TEAM since February 1997. From August 1992 to February 1997, he worked in the
Investment Banking Department of Credit Suisse First Boston Corporation, most
recently as a Vice President. Mr. White received his J.D. degree from the
University of Texas School of Law in May 1992 and is a member of the State Bar
of Texas. In addition, he was a Financial Analyst at The First Boston
Corporation from July 1986 to July 1989.

Robert L. Aprati has been the Senior Vice President & General Counsel of
BRACC since January 1988. Mr. Aprati is director of the American Car Rental
Association.

Sandra S. Hughes has been Vice President, Licensee Integration of BRACC
since November 1996. From January 1993 to November 1996, she was Vice President,
Market Development, and from March 1988 to January 1993, she was Vice President
of Corporate Field Marketing of BRACC.

Donald J. Norwalk has been Vice President and Treasurer of TEAM since July
1994. From January 1994 to July 1994, he was the SEC Reporting and Compliance
Officer for FFLC Bancorp, Inc., a bank holding company. From January 1989 to
January 1994, he was an auditor for Deloitte & Touche LLP, serving clients
primarily in the financial, manufacturing and real estate industries.

Dennis M. O'Gara has been Vice President, Worldwide Sales of BRACC since
June 1996. From November 1994 to June 1996, he was Vice President of Operations,
with responsibility for all aspects of truck operations. From June 1993 to
November 1994, Mr. O'Gara was Director of Operations -- Florida, and from
November 1991 to June 1993 he was Regional Director of Finance -- Florida. Mr.
O'Gara joined BRACC in 1990 as truck manager for the Florida region.

Karl H. Ottolini has been Vice President, Financial Planning and Analysis
of BRACC since June 1995 and has been a member of BRACC's management committee
since June 1996. From January 1992 to June 1995, he was Director, Financial
Analysis and Reporting of BRACC.

Mark R. Sotir has been Vice President, Worldwide Marketing of BRACC since
June 1996 and from April 1995 to June 1996, he was Vice President, Market
Planning. From 1989 to April 1995, Mr. Sotir was employed by The Coca-Cola
Company, most recently as group marketing manager.

James J. Sweeney has been Vice President, Fleet Operations of BRACC since
February 1989. From May 1987 to February 1989, he was Assistant Vice President
of Fleet Operations.

L. Scott Tiemann has been Vice President and Corporate Controller of TEAM
since July 1994. From March 1992 to July 1994, he was employed by BRACC as the
Business Manager for its Philadelphia, Pittsburgh and Cincinnati operations.
From November 1989 to March 1992, he was a city controller for BRACC.

Stephen G. Worthley has been Vice President and Treasurer of BRACC since
July 1987 and is responsible for arranging financing for the operations of BRACC
and managing BRACC's treasury function.

Thomas B. Zorn has been Vice President, Truck Operations of BRACC since
December 1996. From July 1996 to December 1996, Mr. Zorn was Vice President,
Operations Planning of BRACC. From February 1992 to July 1996, Mr. Zorn was
employed by Ford in various managerial positions, most recently as Special
Studies Manager, Corporate Finance.

Ronald D. Agronin was elected as a director of TEAM in April 1994. Since
1993, Mr. Agronin has served as Vice Chairman of Black Clawson Company ("Black
Clawson"), a manufacturer of paper making machinery, and as President and Chief
Executive Officer of United Container Machinery, Inc. ("United Container
Machinery"), a corrugating machinery manufacturer. He served as Executive Vice
President and Chief Operating

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<PAGE> 67

Officer of Black Clawson from 1987 to 1993. He currently serves as a director of
Black Clawson and United Container Machinery. Mr. Agronin is the first cousin of
Mr. Miller.

James F. Calvano was elected as a director of TEAM in August 1994. Since
October 1996, Mr. Calvano has been the Chairman and Chief Executive Officer of
MoneyGram, a provider of electronic money transfer services, and from February
1996 to October 1996, he was President and Chief Executive Officer of MoneyGram.
From February 1991 to February 1996, he was Executive Vice President of
Marketing for Travelers Group, a subsidiary of Travelers, Inc. From November
1993 to February 1995, he was Chief Administrative Officer of Travelers
Insurance Companies. From June 1991 to May 1993, Mr. Calvano was President and
Chief Operating Officer of New Valley Corp. Two months before he assumed this
position, New Valley Corp. suspended payments on its publicly held debt. An
involuntary bankruptcy petition under Title 11 of the U.S. Code was filed
against New Valley Corp. in November 1991 and a voluntary bankruptcy petition
under Title 11 was filed by New Valley Corp. in March 1993. From January 1989 to
December 1990, Mr. Calvano was President and Chief Executive Officer of Carlson
Travel Group and Executive Vice President of Carlson Companies Inc. From
November 1986 to December 1988, he served as President of Commercial Credit
Corp. and Executive Vice President of Primerica Corp. Mr. Calvano served
American Express Travel Related Services Co., Inc. as its Vice Chairman,
President of Payment Systems Division, USA and President of Consumer Financial
Services Division, USA between October 1981 and November 1986. From 1972 to
1981, Mr. Calvano was employed by Avis and served in various capacities,
including President and Chief Executive Officer, Executive Vice President and
Chief Operating Officer and Group Vice President, Western Hemisphere.

Martin P. Gregor was elected as a director of TEAM in December 1996. Since
December 1989, Mr. Gregor has served as Senior Vice President and Resident
Manager of McDonald & Company Securities, Inc.

Alan D. Liker was elected as a director of TEAM in October 1995. He has
served as a business advisor to a number of individuals and companies during the
past five years, including as Vice President of Budget Rent-A-Car of Southern
California ("SoCal"), a licensee of BRACC and, through its wholly owned
subsidiary, an operator of Budget locations in Southern California since
February 1992. Mr. Liker is also a director of Herbalife International. Mr.
Liker was a director of Shaklee Corporation and its Japanese affiliate, Shaklee
KK until their sale in 1989. From 1976 to 1980, he was a principal of Xerox
Development Corporation, a strategic planning unit of Xerox Corporation. Mr.
Liker was previously a law professor at Harvard University, University of
California (Los Angeles) and University of Southern California law schools.
Previously he was a director of First Charter Bank and Shop Television Network.
See "Certain Transactions."

Jeffrey R. Mirkin was elected as a director of TEAM in October 1995. Since
1985, Mr. Mirkin has been the Chief Executive Officer of SoCal, a licensee of
BRACC and, through its wholly owned subsidiary, an operator of Budget locations
in Southern California. See "Certain Transactions."

Dr. Stephen L. Weber was elected as a director of TEAM in April 1994. Since
June 1996, Dr. Weber has been the President of San Diego State University. From
August 1995 to June 1996, he was the Interim Provost at the State University of
New York System Office. From 1988 to June 1996, he was President of State
University of New York at Oswego.

TEAM's Board of Directors has a Compensation Committee and an Audit/Finance
Committee. The Compensation Committee, composed of Mr. Agronin and Dr. Weber,
establishes salaries, incentives and other forms of compensation for directors,
officers and other employees of TEAM, administers various incentive compensation
and benefit plans and recommends policies relating to such plans. The
Audit/Finance Committee, composed of Messrs. Agronin and Calvano, reviews TEAM's
accounting practices, internal accounting controls and financial results and
oversees the engagement of TEAM's independent auditors. Nonemployee directors
receive an annual retainer of $12,000 and participate in the 1994 Directors'
Stock Option Plan (as hereinafter defined). TEAM also pays the reasonable
out-of-pocket expenses of each director in connection with his attendance at
each Board or committee meeting.

In connection with TEAM's acquisition of the Los Angeles, California Budget
franchise (the "Los Angeles Acquisition"), TEAM and the Principal Executive
Officers agreed that for so long as SoCal and its general partners own 500,000
or more shares of the Class A Common Stock received in the Los Angeles
Acquisition,

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<PAGE> 68

TEAM and the Principal Executive Officers will nominate and use their best
efforts to elect to TEAM's Board of Directors two persons designated by SoCal
and further, for so long as SoCal and its general partners own less than 500,000
but more than 250,000 shares of Class A Common Stock, TEAM and the Principal
Executive Officers agreed to nominate to TEAM's Board of Directors one person
designated by SoCal. Following the Los Angeles Acquisition, Messrs. Mirkin and
Liker were designated by SoCal and thereafter elected to the Board of Directors
of TEAM.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth a summary of the compensation paid by TEAM
during the last three fiscal years to the Chief Executive Officer and the other
executive officers of TEAM whose salary and bonus exceeded $100,000 for 1996
(the "Named Executive Officers").

<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------- ---------------------
OTHER ANNUAL SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY COMPENSATION OPTIONS
--------------------------- ---- -------- ------------- ---------------------
<S> <C> <C> <C> <C>
Sanford Miller........................... 1996 $208,250 $ -- 60,000
Chairman of the Board and Chief 1995 $183,667 $ -- 30,000
Executive
Officer 1994 $ 91,108(1) $14,067(2) --
John P. Kennedy.......................... 1996 $197,500 $ -- 52,000
President and Chief Operating Officer 1995 $173,333 $ -- 25,000
1994 $ 94,558 $ -- --
Jeffrey D. Congdon....................... 1996 $197,292 $ -- 52,000
Chief Financial Officer and Secretary 1995 $173,333 $ -- 25,000
1994 $ 26,250(3) $ -- --
</TABLE>

- ---------------

(1) Does not include $6,924 of cash dividends paid by Tranex and Capital City to
Mr. Miller in 1994.

(2) Other annual compensation consists of $12,476 of payments made by TEAM with
respect to vehicles used by Mr. Miller in 1994 and $1,591 of gasoline
expenses in connection with the use of these vehicles in 1994.

(3) Represents salary for the period from August 24, 1994 through December 31,
1994.

OPTION GRANTS DURING 1996 AND YEAR END OPTION VALUES

The following table describes the stock options granted to the Named
Executive Officers of TEAM during 1996.

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
-------------------------------------------------------- ------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(A) FISCAL YEAR PER SHARE DATE 5% 10%
---- ---------- ---------------- ----------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mr. Miller................. 60,000 13.3% $11.25 04/15/06 $424,504 $1,075,776
Mr. Kennedy................ 52,000 10.4 11.25 04/15/06 367,906 932,314
Mr. Congdon................ 52,000 10.4 11.25 04/15/06 367,906 932,314
</TABLE>

- ---------------

(a) Represents options to purchase shares of Class B Common Stock.

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<PAGE> 69

The following table describes the value of unexercised options that were
held by the Named Executive Officers of TEAM as of December 31, 1996.

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT DECEMBER 31, 1996 AT DECEMBER 31, 1996(A)
--------------------------------- ---------------------------------
NAME EXERCISABLE(B) UNEXERCISABLE(C) EXERCISABLE(B) UNEXERCISABLE(C)
---- -------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
Mr. Miller............................... 30,000 60,000 $198,750 $292,500
Mr. Kennedy.............................. 25,000 52,000 165,625 253,500
Mr. Congdon.............................. 25,000 52,000 165,625 253,500
</TABLE>

- ---------------

(a) Based upon the closing price of Class A Common Stock on December 31, 1996 of
$16.125.

(b) Represents options to purchase shares of Class A Common Stock.

No options were exercised by the Named Executive Officers in 1996.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee is composed of Mr. Agronin and Dr. Weber,
neither of whom has ever been an officer or employee of TEAM or any of its
subsidiaries or entered into a related party transaction with TEAM.

BENEFIT PLANS

1994 Option Plan. The 1994 Option Plan provides for the grant to selected
key employees of TEAM and its subsidiaries of either incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986 (the
"Code") or nonqualified options (intended not to qualify as incentive stock
options) to purchase Common Stock. The 1994 Option Plan is administered by the
Compensation Committee of the Board of Directors. The maximum number of shares
of Common Stock that may be made subject to options granted pursuant to the 1994
Option Plan is 1,750,000 (subject to stockholder approval as described under
"Shares Eligible for Future Sale"), subject to adjustments for certain changes
in TEAM's capitalization. The price per share of a stock option must be at least
the fair market value per share as of the date of grant. In the case of an
employee who owns more than 10% of the voting power of TEAM, the price per share
under an incentive stock option must be at least 110% of the fair market value
per share as of the date of grant. No option may be exercised within six months
from the date of grant, except that an option will be immediately exercisable
upon the occurrence of certain events, including a "change in control" of TEAM
as defined in the 1994 Option Plan. The Budget Acquisition will not result in a
change in control under the 1994 Option Plan. Except in the event of the death
or disability of a holder of nonqualified stock options, no option may be
exercised more than 10 years after its date of grant (and, in the case of an
employee who owns more than 10% of the voting power of TEAM, an incentive stock
option held by such employee may not be exercised more than five years after its
date of grant). Unless sooner terminated, the 1994 Option Plan terminates on
April 24, 2004. As of the date of this Prospectus, 729,850 options are
outstanding under the 1994 Option Plan (including 164,000 options to purchase
shares of Class B Common Stock).

1994 Directors' Stock Option Plan. TEAM's 1994 Directors' Stock Option
Plan (the "1994 Directors' Plan") provides for the grant to directors of TEAM
who are not employees of TEAM of options to purchase Class A Common Stock. The
1994 Directors' Plan is administered by the Board of Directors. The maximum
number of shares of the Class A Common Stock subject to options granted pursuant
to the 1994 Directors' Plan is 150,000 (subject to stockholder approval of an
amendment to the plan). The exercise price per share under an option is the fair
market value per share as of the date of grant. The options are exercisable in
full beginning six months after the date of grant, except that an option will be
immediately exercisable upon the occurrence of certain events, including a
"change in control" of TEAM as defined in the 1994 Directors' Plan. Except in
the event of a holder's death or disability, no option may be exercised more
than 10 years after its date of grant. Unless sooner terminated, the 1994
Directors' Plan will terminate on April 24, 2004. As of the date of this

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<PAGE> 70

Prospectus, 70,000 options are outstanding under the 1994 Directors' Plan
(subject to stockholder approval as described under "Shares Eligible for Future
Sale").

CERTAIN TRANSACTIONS

Concurrently with the completion of TEAM's initial public offering in
August 1994, the Principal Executive Officers and certain current and former
employees of TEAM (the "Exchange Stockholders"), who were the stockholders of
certain of the corporations that owned the Albany and Rochester, New York,
Richmond, Virginia and San Diego, California Budget franchises, exchanged all of
their shares of these corporate entities for an aggregate of 563,400 shares of
the Class A Common Stock and 1,936,450 shares of the Class B Common Stock (the
"Share Exchange"). The Principal Executive Officers thereby acquired 100% of the
shares of the Class B Common Stock that have been issued by TEAM. Upon
consummation of the Share Exchange and the redemption of the preferred stock of
TEAM's subsidiary that operates the San Diego airport franchise, all of the
Albany, Rochester, Richmond and San Diego operating companies became wholly
owned subsidiaries of TEAM. See "Shares Eligible for Future Sale."

Pursuant to an agreement dated as of November 1, 1994, Team Rental of Ft.
Wayne, Inc. a wholly owned subsidiary of TEAM, purchased all of the shares of
capital stock of Ft. Wayne Rental Group, Inc. ("Ft. Wayne"). Ft. Wayne, which
was owned by Mr. Miller and others, including a former TEAM employee, acquired
the assets comprising the Ft. Wayne business in June 1993 for approximately
$26,000, plus the assumption of approximately $66,000 of liabilities. The total
purchase price for the stock of Ft. Wayne was 18,500 shares of the Class A
Common Stock valued at approximately $200,000 (plus a de minimis amount of cash
to prevent the issuance of fractional shares of stock). Mr. Miller received
7,400 shares of Class A Common Stock in exchange for his shares of Ft. Wayne
stock. Prior to the acquisition of Ft. Wayne, Tranex, which became a subsidiary
of TEAM in the Share Exchange, leased vehicles to Ft. Wayne. The aggregate
payments under this lease amounted to approximately $366,000 in 1994.

The Principal Executive Officers have guaranteed the performance of the
obligations of some or all of TEAM's subsidiaries under their respective
Franchise Agreements. In connection with TEAM's initial public offering in
August 1994, TEAM's franchisors agreed to release these individuals from their
guarantees under the Franchise Agreements and substitute TEAM's guarantee
therefor, provided that TEAM maintains tangible net worth of $15.0 million. In
the event that TEAM's net worth falls below this level, TEAM has the option to
provide the franchisors with a $5 million letter of credit that could be drawn
on in the event of a monetary default under the Franchise Agreements or, in the
alternative, to allow the personal guarantees to be reinstated. In connection
with the Budget Acquisition, these franchise agreements with BRACC will be
eliminated.

TEAM's Richmond, Virginia airport facility is leased from a partnership
formed by Mr. Miller and an employee of TEAM (the "Richmond Partnership"). This
lease terminates in 1998, subject to renewal. Rental payments under the lease
agreement amounted to approximately $95,000, $97,000 and $100,000 in 1994, 1995
and 1996, respectively. The monthly base rent under this lease (approximately
$7,900, $8,100 and $8,300 in 1994, 1995 and 1996, respectively) escalates by
approximately 3% per annum. TEAM has entered into another lease for a
non-airport facility located in Chesterfield County, Virginia that is owned by
the Richmond Partnership. This lease commenced in June 1994 and terminates in
May 1999, subject to renewal. Rental payments under the lease agreement amounted
to approximately $24,000, $33,000 and $43,000 in 1994, 1995 and 1996,
respectively. The monthly base rent under this lease was approximately $3,400,
$3,500 and $3,600 in 1994, 1995 and 1996, respectively and escalates by
approximately 3% per annum. TEAM's Rochester, New York airport facility is
leased from a partnership formed by Mr. Miller and a former employee of TEAM.
This lease terminates in 2003, subject to renewal. The monthly base rent under
this lease (approximately $6,700, $6,800 and $7,000 in 1994, 1995 and 1996,
respectively) escalated by 5% per annum until August 30, 1996, and thereafter
annual increases will be the higher of 5% or the amount of the increase in the
consumer price index. Rental payments under the lease amounted to $75,000,
$81,000 and $84,000 in 1994, 1995 and 1996, respectively. All of these leases
are on a triple net basis (i.e., TEAM is responsible for the payment of taxes,
insurance and utilities and for the general maintenance of these facilities in
addition to its obligations to pay base rent). All of these

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leases provide for an initial term of ten years and two five-year renewal terms.
TEAM believes that these leases are on terms no less favorable to TEAM than
could be obtained from unaffiliated third parties.

TEAM's Philadelphia, Pennsylvania retail vehicle sales facility, regional
administrative headquarters and vehicle maintenance facility are leased from MCK
Real Estate Corporation ("MCK"), which is owned by the Principal Executive
Officers. This lease terminates in September 2002, subject to renewal. Rental
payments under the lease were approximately $168,000 and $316,000 for 1995 and
1996, respectively. The monthly base rent (approximately $26,000 per month in
1995) escalates by 3% per annum. TEAM's Richmond, Virginia retail car sales
facility is leased from MCK. This lease terminates in October 2000, subject to
renewal. Rental payments under the lease were approximately $10,000 and $121,000
for 1995 (one month) and 1996, respectively. The monthly base rent under this
lease (approximately $10,000 per month in 1996) escalates by 3% per annum.
TEAM's Dayton, Ohio retail car sales facility, which opened in April 1996, is
leased from MCK. This lease terminates in March 2001, subject to renewal. The
monthly base rent under this lease (approximately $10,000 per month in 1996)
escalates by 3% per annum. All of these leases are on a triple net basis. TEAM
believes that these leases are on terms no less favorable to TEAM than could be
obtained from unaffiliated third parties.

Prior to TEAM's initial public offering, TEAM's subsidiaries funded their
operations in part through loans from TEAM's executive officers. From December
1989 to June 1994, TEAM was provided loans by the Principal Executive Officers,
all of which, together with accrued interest, were repaid upon the completion of
TEAM's initial public offering. At that time, TEAM repaid loans previously made
by Mr. Miller in the aggregate principal amount of $1,052,257 with a weighted
average interest rate of 12.7%, loans previously made by Mr. Congdon in the
aggregate principal amount of $1,156,257 with a weighted average interest rate
of 12.4%, and loans previously made by Mr. Kennedy in the aggregate principal
amount of $690,000 with a weighted average interest rate of 13.3%.

In addition, in order to finance the organizational expenses incurred by
TEAM prior to its initial public offering, Messrs. Miller, Congdon and Kennedy
advanced the following amounts: Mr. Miller -- $41,289 at prime plus 1.5%;
$3,300, non-interest bearing; Mr. Congdon -- $14,266 at prime plus 1.5%; $1,800,
non-interest bearing; and Mr. Kennedy -- $14,266 at prime plus 1.5%; $1,800,
non-interest bearing. All of these advances, together with accrued interest,
were repaid upon completion of the initial public offering.

In connection with the Los Angeles Acquisition, TEAM entered into a
franchise agreement with SoCal, under which TEAM agreed to pay to the seller,
SoCal, a royalty equal to 5% of the monthly gross revenues derived from those
operations, subject to a minimum amount. In addition, TEAM issued a note to
SoCal in the principal amount of approximately $4,750,000 (the "SoCal Note"),
assumed the obligations of SoCal under a note in the principal amount of
approximately $4,700,000 which was secured by the personal guaranty of Jeffrey
R. Mirkin (the "SoCal Bank Note") and assumed certain other indebtedness that
was personally guaranteed by Mr. Mirkin. Mr. Mirkin is the Chief Executive
Officer and a general partner of SoCal and, upon consummation of the Los Angeles
Acquisition, became a director of TEAM. TEAM operates as a sub-franchisee of
SoCal in the San Diego territory and pays royalty fees to SoCal based on rental
revenues for vehicles other than trucks. In 1994, 1995 and 1996, TEAM paid SoCal
approximately $1,000,000, $1,200,000 and $3,700,000 in royalty fees,
respectively. Except as described above, prior to the Los Angeles Acquisition,
there was no material relationship between TEAM and SoCal. The SoCal Note,
together with accrued interest of $103,906, and the SoCal Bank Note were repaid
in April 1996. There was approximately $700,000 of other indebtedness payable by
TEAM to SoCal at December 31, 1996.

In connection with the acquisition of ValCar in August 1996, TEAM assumed
an unsecured note payable to Jeffrey D. Congdon in the amount of $1.5 million.
The note is due on demand and bears interest at the prime rate plus 2%. Pursuant
to this note, TEAM made payments to Mr. Congdon in the amount of $64,449 in
1996.

Sanford Miller is a member of the board of directors of Colonial Bank of
Volusia County in Ormond Beach, Florida. TEAM maintains a checking account at
that bank with an average balance of $100,000.

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<PAGE> 72

PRINCIPAL STOCKHOLDERS

The table below sets forth, as of February 27, 1997, certain information
with respect to the beneficial ownership of Common Stock by (i) each person who
is known by TEAM to be the beneficial owner of more than 5% of either class of
Common Stock of TEAM and (ii) each of the directors and Named Executive Officers
of TEAM and all directors and executive officers as a group. As of that date,
TEAM had outstanding 9,320,383 shares of Class A Common Stock and 1,936,600
shares of Class B Common Stock. The Class B Common Stock is convertible into
Class A Common Stock on a share-for-share basis at the option of the holder.
Each share of Class A Common Stock is entitled to one vote and each share of
Class B Common Stock is entitled to ten votes. This table also gives effect to
shares that may be acquired pursuant to options, convertible notes and
convertible preferred stock, as described in the footnotes below.

<TABLE>
<CAPTION>
CLASS A COMMON STOCK CLASS B COMMON STOCK
---------------------------------------------------- -----------------------------------------
PERCENT OF
CLASS A SHARES
NUMBER OF BENEFICIALLY OWNED NUMBER OF PERCENT OF
CLASS A ---------------------------- CLASS B CLASS B
DIRECTORS AND EXECUTIVE SHARES BENEFICIALLY PRIOR TO AFTER SHARES BENEFICIALLY SHARES BENEFICIALLY
OFFICERS OWNED(A) THE OFFERING THE OFFERING OWNED OWNED
- ----------------------- ------------------- ------------ ------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C>
Sanford Miller.......... 952,500(b) 9.3% 5.7% 905,800 46.8%
Jeffrey D. Congdon...... 560,350(c) 5.7 3.4 515,400 26.6
John P. Kennedy......... 548,500(d) 5.6 3.3 515,400 26.6
Ronald D. Agronin....... 14,500(e) * * -- --
James Calvano........... 12,500(e) * * -- --
Martin P. Gregor........ 8,305 * * -- --
Alan D. Liker........... 71,003(f) * * -- --
Jeffrey R. Mirkin....... 662,500(g) 7.1 4.2 -- --
Dr. Stephen L. Weber.... 15,600(e) * * -- --
All directors and
executive officers as
a group (12
persons).............. 2,824,305(h) 24.7 15.8 1,936,600 100.0
OTHER FIVE PERCENT
STOCKHOLDERS
- ------------------------
Ford Motor Company...... --(i) -- 22.1 -- --
Metropolitan Life
Insurance Company..... 1,937,640(j) 18.3 11.4 -- --
The Equitable Companies
Incorporated.......... 1,522,500(k) 16.3 9.6 -- --
John Hancock Mutual Life
Insurance Company..... 1,245,640(l) 11.8 7.3 -- --
New York Life Insurance
Company............... 996,512(m) 9.7 5.9 -- --
State Street Research &
Management Company.... 692,000(n) 7.4 4.4 -- --
U.S. Bancorp............ 577,700(o) 6.2 3.6 -- --
The Kaufmann Fund,
Inc................... 539,500(p) 5.8 3.4 -- --
Putnam Investments,
Inc................... 981,400(q) 10.5 6.2 -- --

PERCENT OF TOTAL
VOTING POWER OF
DIRECTORS AND EXECUTIVE COMMON STOCK
OFFICERS AFTER THE OFFERING
- ----------------------- ------------------
<S> <C>
Sanford Miller.......... 25.9%
Jeffrey D. Congdon...... 14.8
John P. Kennedy......... 14.7
Ronald D. Agronin....... *
James Calvano........... *
Martin P. Gregor........ *
Alan D. Liker........... *
Jeffrey R. Mirkin....... 1.9
Dr. Stephen L. Weber.... *
All directors and
executive officers as
a group (12
persons).............. 57.3
OTHER FIVE PERCENT
STOCKHOLDERS
- ------------------------
Ford Motor Company...... 11.3
Metropolitan Life
Insurance Company..... 5.3
The Equitable Companies
Incorporated.......... 4.3
John Hancock Mutual Life
Insurance Company..... 3.4
New York Life Insurance
Company............... 2.8
State Street Research &
Management Company.... 2.0
U.S. Bancorp............ 1.6
The Kaufmann Fund,
Inc................... 1.5
Putnam Investments,
Inc................... 2.8
</TABLE>

- ---------------
* Less than 1%.
(a) In determining the number and percent of shares beneficially owned by each
person, shares that may be acquired by such person pursuant to options,
convertible notes or convertible preferred stock exercisable or convertible
within 60 days of the date hereof are deemed outstanding for purposes of
determining the total number of outstanding shares for such person and are
not deemed outstanding for such purpose for all other stockholders. To the
best of TEAM's knowledge, except as otherwise indicated, beneficial
ownership includes sole voting and dispositive power with respect to all
shares.
(b) Includes (i) 905,800 shares of Class A Common Stock issuable upon conversion
of Class B Common Stock, (ii) 30,000 shares of Class A Common Stock issuable
upon exercise of options and (iii) 4,000 shares of Class A Common Stock
owned by Mr. Miller's children. Mr. Miller's address is 125 Basin Street,
Dayton Beach, Florida 32114.
(c) Includes (i) 515,400 shares of Class A Common Stock issuable upon conversion
of Class B Common Stock and (ii) 25,000 shares of Class A Common Stock
issuable upon exercise of options. Mr. Congdon's address is 2445 Directors
Row, Suite K, Indianapolis, Indiana 46241.
(d) Includes (i) 515,400 shares of Class A Common Stock issuable upon conversion
of Class B Common Stock and (ii) 25,000 shares of Class A Common Stock
issuable upon exercise of options. Mr. Kennedy's address is 18 King's
Highway, Westport, Connecticut 06880.

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<PAGE> 73

(e) Includes 12,500 shares of Class A Common Stock issuable upon exercise of
options.
(f) Includes (i) 46,003 shares of Class A Common Stock that may be acquired by
Mr. Liker pursuant to an option granted by SoCal to Mr. Liker and (ii)
12,500 shares of Class A Common Stock issuable upon exercise of options.
(g) Represents (i) 650,000 shares of Class A Common Stock beneficially owned by
SoCal, a general partnership, of which Mr. Mirkin is a general partner and
the trustee of certain trusts which are general partners of SoCal and (ii)
12,500 shares of Class A Common Stock issuable upon exercise of options.
Mr. Mirkin's address is 150 South Doheny Drive, Beverly Hills, California
90211.

(h) Includes (i) 1,936,600 shares of Class A Common Stock issuable upon
conversion of Class B Common Stock and (ii) 166,500 shares issuable upon
the exercise of options.

(i) In connection with the Budget Acquisition, Ford will acquire 4,500 shares
of Series A Convertible Preferred Stock (subject to adjustment), which
automatically will be converted into an aggregate of 4,500,000 shares of
Class A Common Stock at such time as the record ownership of such shares of
Series A Convertible Preferred Stock is transferred to or held by any
person or any entity other than Ford or any affiliate of Ford.

(j) Includes 1,245,640 shares of Class A Common Stock issuable upon conversion
of Series A Convertible Notes as described under "Description of Certain
Indebtedness -- Convertible Subordinated Notes." This information is
included in reliance upon a Schedule 13G filed by Metropolitan Life
Insurance Company ("Metropolitan") with the Securities and Exchange
Commission (the "Commission") on February 11, 1997. Upon consummation of
the Offering, TEAM expects this holder to purchase Series B Convertible
Notes, which will be convertible into shares of Class A Common Stock, in
the Debt Placements. Metropolitan's address is 334 Madison Avenue, Convent
Station, New Jersey 07961.

(k) Represents shares of Class A Common Stock owned by subsidiaries of The
Equitable Companies Incorporated ("The Equitable") as follows: (i) 9,500
shares of Class A Common Stock held by The Equitable Life Assurance Society
of the United States, (ii) 1,483,000 shares of Class A Common Stock held by
Alliance Capital Management L.P. and (iii) 30,000 shares of Class A Common
Stock held by Donaldson Lufkin & Jenrette Securities Corporation. This
information is included in reliance upon a Schedule 13G filed by The
Equitable with the Commission on February 14, 1997. The Equitable's address
is 787 Seventh Avenue, New York, New York 10019.

(l) Represents shares of Class A Common Stock issuable upon conversion of
Series A Convertible Notes. Upon consummation of the Offering, TEAM expects
this holder to purchase Series B Convertible Notes, which will be
convertible into shares of Class A Common Stock, in the Debt Placements.
John Hancock Mutual Life Insurance Company's address is John Hancock Place,
200 Clarendon Street, Boston, Massachusetts 02117.

(m) Represents shares of Class A Common Stock issuable upon conversion of
Series A Convertible Notes. Upon consummation of the Offering, TEAM
expects this holder to purchase Series B Convertible Notes, which will be
convertible into shares of Class A Common Stock, in the Debt Placements.
New York Life Insurance Company's address is 51 Madison Avenue, New York,
New York 10010.

(n) This information is included in reliance upon a Schedule 13G filed by State
Street Research & Management Company ("State Street") with the Commission
on February 14, 1997. State Street's address is One Financial Center, 30th
Floor, Boston, Massachusetts 02111-2690.

(o) This information is included in reliance upon a Schedule 13G filed by U.S.
Bancorp with the Commission on February 13, 1997. U.S. Bancorp's address is
111 S.W. Fifth Avenue, Portland, Oregon 97204.

(p) This information is included in reliance upon a Schedule 13G filed by The
Kaufmann Fund with the Commission on February 19, 1997. The Kaufmann Fund's
address is 140 E. 45th Street, 43rd Floor, New York, New York 10017.

(q) Represents shares of Class A Common Stock owned by subsidiaries of Putnam
Investments, Inc. ("Putnam"), which is a subsidiary of Marsh & McLennan
Companies, Inc. ("Marsh & McLennan"), as follows: (i) 597,680 shares of
Class A Common Stock held by Putnam Investment Management, Inc. ("PIM"), as
to which PIM has shared dispositive power, and (ii) 383,800 shares of Class
A Common Stock held by The Putnam Advisory Company, Inc. ("PAC"); PAC
shares voting power with respect to 332,500 of such shares and shares
dispositive power with respect to all of such shares. This information is
included in reliance upon a Schedule 13G filed by Marsh & McLennan, Putnam,
PIM and PAC with the Commission on March 7, 1997. The address of Marsh &
McLennan is 1166 Avenue of the Americas, New York, New York 10036. The
address of Putnam, PIM and PAC is One Post Office Square, Boston,
Massachusetts 02109.

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<PAGE> 74

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of TEAM consists of 17,500,000 shares of the
Class A Common Stock, 2,500,000 shares of the Class B Common Stock and 250,000
shares of the preferred stock, $.01 par value per share (the "Preferred Stock").
At the 1997 Annual Meeting of Stockholders to be held on April 22, 1997, the
stockholders will vote upon a proposal to amend TEAM's Amended and Restated
Certificate of Incorporation to, among other things, increase the number of
shares of Class A Common Stock TEAM is authorized to issue to 35,000,000 shares.
Immediately prior to the date of this Prospectus, there were 9,320,383 shares of
the Class A Common Stock, 1,936,600 shares of the Class B Common Stock and no
shares of the Preferred Stock outstanding. All of the outstanding shares of
Class B Common Stock are held by the Principal Executive Officers.

CLASS A COMMON STOCK AND CLASS B COMMON STOCK

Voting Rights. Each share of the Class A Common Stock is entitled to one
vote and each share of the Class B Common Stock is entitled to ten votes on all
matters submitted to a vote of the stockholders. The Class A Common Stock and
the Class B Common Stock vote together as a single class on all matters
presented for a vote of the stockholders, except as noted below and as provided
under the Delaware General Corporation Law. Immediately following the Offering,
the holders of the Class B Common Stock will have approximately 55.4% of the
combined voting power of the outstanding Class A and Class B Common Stock. As a
result, following the Budget Acquisition and prior to the conversion of the
Convertible Subordinated Notes or the Series A Convertible Preferred Stock, the
Principal Executive Officers will continue to be able to elect all of Budget
Group's Board of Directors, thereby ensuring that members elected by them will
continue to direct the business, policies and management of Budget Group.

TEAM's Amended and Restated Certificate of Incorporation requires a vote of
60% of the number of shares of the Class B Common Stock outstanding, voting
separately as a class, and a majority of the shares of the Class A Common Stock,
voting separately as a class, to approve any modification to the rights and
privileges of the Class A Common Stock or the Class B Common Stock or any
reclassification or recapitalization of TEAM's outstanding capital stock.

Dividends. Each share of the Class A Common Stock is entitled to receive
dividends if, as and when declared by the Board of Directors of TEAM out of
funds legally available therefor. Identical dividends, if any, must be paid on
both the Class A Common Stock and the Class B Common Stock at any time that
dividends are paid on either, except that stock dividends payable on shares of
the Class B Common Stock are payable only in shares of the Class B Common Stock
and stock dividends payable on shares of the Class A Common Stock are payable
only in shares of the Class A Common Stock. If a dividend or distribution
payable in the Class A Common Stock is made on the Class A Common Stock, TEAM
must also make a pro rata and simultaneous dividend or distribution of shares of
Class B Common Stock on the Class B Common Stock. If a dividend or distribution
payable in Class B Common Stock is made on the Class B Common Stock, TEAM must
also make a pro rata and simultaneous dividend or distribution of shares of
Class A Common Stock on the Class A Common Stock.

Convertibility. Each share of the Class B Common Stock is convertible at
any time at the option of the holder into the Class A Common Stock on a
share-for-share basis. Shares of the Class B Common Stock will be automatically
converted into shares of the Class A Common Stock on a share-for-share basis in
the event that the record or beneficial ownership of such shares of the Class B
Common Stock shall be transferred (including, without limitation, by way of
gift, settlement, will or intestacy) to any person or entity that was not a
holder of Class B Common Stock at the time of transfer. Therefore, the shares of
Class B Common Stock will only exist so long as they are held by one or more of
the Principal Executive Officers. Shares of the Class A Common Stock are not
convertible.

Liquidation Rights. In the event of the dissolution of TEAM, after
satisfaction of amounts payable to creditors and distribution to the holders of
outstanding Preferred Stock, if any, of amounts to which they may be
preferentially entitled, holders of the Class A Common Stock and the Class B
Common Stock are entitled to share ratably in the assets available for
distribution to the stockholders.

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<PAGE> 75

Other Provisions. There are no preemptive rights to subscribe for any
additional securities which TEAM may issue and there are no redemption
provisions or sinking fund provisions applicable to the Class A Common Stock or
the Class B Common Stock, nor is either class subject to calls or assessments by
TEAM. All outstanding shares of Common Stock are, and all shares to be
outstanding upon completion of the Offering will be, legally issued, fully paid
and nonassessable.

PREFERRED STOCK

General

The Board of Directors of TEAM has the authority, without further action by
the stockholders, to cause TEAM to issue up to 250,000 shares of preferred stock
(the "Preferred Stock") in one or more series and to fix the rights,
preferences, privileges and restrictions granted to or imposed upon any unissued
shares of Preferred Stock and to fix the number of shares comprising any series
and the designations of such series. The issuance of Preferred Stock, while
providing flexibility in connection with possible financings, acquisitions and
other corporate transactions, could, among other things, adversely affect the
voting power of the holders of Common Stock and, under certain circumstances,
make it more difficult for a third party to gain control of TEAM, deny
stockholders the receipt of a premium on their Common Stock and have an adverse
effect on market price of the Common Stock.

Series A Convertible Preferred Stock

In January 1997, the Board of Directors authorized the issuance of 10,000
shares of Preferred Stock, par value $0.01 per share, designated as the "Series
A Convertible Preferred Stock." In connection with the Budget Acquisition, 4,500
shares of Series A Convertible Preferred Stock will be issued to Ford as the
Equity Consideration (subject to adjustment, as described under "The Budget
Acquisition -- Terms of the Stock Purchase Agreements").

Rank. The Series A Convertible Preferred Stock ranks, with respect to
dividend rights and rights on liquidation, senior to the Common Stock.

Voting Rights. The holders of the Series A Convertible Preferred Stock
will not be entitled to any voting rights, except as otherwise provided by law
or as noted below. The affirmative vote of a majority of the shares of Series A
Convertible Preferred Stock, voting as a separate class, will be required to
amend the Amended and Restated Certificate of Incorporation if such amendment
affects materially and adversely the specified rights, preferences, privileges
or voting rights of the Series A Convertible Preferred Stock.

Dividends. Each share of the Series A Convertible Preferred Stock is
entitled to receive dividends if, as and when declared by the Board of Directors
of TEAM out of funds legally available therefor. Each share of Series A
Convertible Preferred Stock is also entitled to receive cumulative cash
dividends in respect of each share of Series A Convertible Preferred Stock in
such amount as the holder thereof would receive if such share were converted
into a share of Class A Common Stock immediately prior to the record date for
payment of any cash dividend on the Class A Common Stock. No dividends may be
declared by the Board of Directors on the Common Stock or any other class of
stock ranking junior to the Series A Convertible Preferred Stock unless full
cumulative dividends have been or contemporaneously are declared and paid with
respect to the Series A Convertible Preferred Stock.

Convertibility. Each share of Series A Convertible Preferred Stock will
automatically be converted into 1,000 shares of Class A Common Stock (subject to
adjustment in the case of stock dividends, subdivisions, reverse stock splits or
reclassifications of outstanding Class A Common Stock) in the event that the
record ownership of such Series A Convertible Preferred Stock is transferred to
any person other than Ford or an affiliate of Ford.

Liquidation Rights. In the event of the dissolution, liquidation or
winding up of the affairs of TEAM, after satisfaction of amounts payable to
creditors, holders of shares of Series A Convertible Preferred Stock are
entitled to receive distributions in the same amount that such holders would
receive if such shares were converted into shares of Class A Common Stock
immediately prior to the dissolution, liquidation or winding up of the affairs
of

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<PAGE> 76

TEAM, in preference to any payment to holders of Common Stock or any other
securities ranking junior to the Series A Convertible Preferred Stock.

Other Provisions. There are no preemptive rights to subscribe for any
additional securities which TEAM may issue and there are no redemption
provisions or sinking fund provisions applicable to the Series A Convertible
Preferred Stock, nor is the Series A Convertible Preferred Stock subject to
calls or assessments by TEAM.

CONVERTIBLE SUBORDINATED NOTES

In December 1996, TEAM issued $80.0 million aggregate principal amount of
Series A Convertible Notes. The Series A Convertible Notes are convertible, at
the option of the holders, into Class A Common Stock at a conversion price of
$20.07 per share. The outstanding Series A Convertible Notes are convertible
into an aggregate of 3,986,049 shares of Class A Common Stock. For a description
of the Series B Convertible Notes to be issued in connection with the Budget
Acquisition, see "Description of Certain Indebtedness -- Convertible
Subordinated Notes -- Series B Notes."

WARRANTS

In connection with TEAM's initial public offering and acquisition of the
Budget operations in Philadelphia, Pittsburgh and Cincinnati, TEAM issued to
BRACC a warrant (the "BRACC Warrant") to purchase 175,000 shares of the Class A
Common Stock at the price of the shares in the initial public offering ($9.50
per share). The BRACC Warrant is exercisable commencing August 1996 and expires
in August 1999. After August 24, 1998 and prior to August 24, 1999, the holder
of the BRACC Warrant will have the right to cause TEAM to repurchase the BRACC
Warrant for $2.0 million. In connection with financing provided to TEAM in April
1996, TEAM issued to NationsBank, National Association (South) a warrant (the
"NationsBank Warrant") to purchase 187,500 shares of Class A Common Stock at the
then current market price ($10.87 per share). The NationsBank Warrant is
exercisable from the date of its issuance and expires in April 2001.

BYLAW PROVISIONS

TEAM's Bylaws provide that special meetings of the stockholders may be
called only by the Board of Directors, the Chairman of the Board, the Chief
Executive Officer, the President or the Secretary of TEAM, or by one or more
stockholders holding shares entitled to cast not less than a majority of the
aggregate votes entitled to be cast at such meeting. The Bylaws also provide
that any action which may be taken at any meeting of stockholders may be taken
without a meeting and without prior notice 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. These provisions will make it more difficult for a third party
to gain control of TEAM.

REGISTRATION RIGHTS

Concurrently with the consummation of the Budget Acquisition, TEAM and Ford
entered into the Preferred Stockholders Agreement, pursuant to which
registration rights were granted to Ford with respect to any Series A
Convertible Preferred Stock or Class A Common Stock issued to Ford as part of
the Equity Consideration (the "Ford Registrable Securities"). The Preferred
Stockholders Agreement provides that the holders of Ford Registrable Securities
may, at any time after the date of the Preferred Stockholders Agreement, require
TEAM to register such shares under the Securities Act, provided that such
requesting holders have a good faith intention to offer and sell at least 33% of
the Ford Registrable Securities held by such holders (subject to certain limited
exceptions). The holders of Ford Registrable Securities may also, at any time
that TEAM is eligible to file a registration statement on Form S-3, request TEAM
to file a shelf registration statement to effect the registration and offering
of the Ford Registrable Securities. The Preferred Stockholders Agreement also
provides that at any time Common Stock is to be registered by TEAM under the
Securities Act, TEAM must notify the holders of Ford Registrable Securities to
allow their participation in the registration, unless the lead managing
underwriter of the offering determines that the total number of such securities
to be registered, along with the securities to be

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<PAGE> 77

sold by TEAM, will exceed the maximum number of TEAM's securities that can
reasonably be sold. In such case, the securities proposed to be included by the
holders of Ford Registrable Securities will be reduced on a pro rata basis. TEAM
may defer the registration of the Ford Registrable Securities pursuant to a
request for registration under certain circumstances. Notwithstanding the
foregoing, TEAM will not be required (i) to cause to be declared effective any
registration of Ford Registrable Securities prior to the date three months after
the date of the Preferred Stockholders Agreement and (ii) unless waived by the
managing underwriter of such offering, to effect any registration of Ford
Registrable Securities during the period starting with the date of filing by
TEAM of, and ending on a date 90 days following the effective date of, any other
registration statement filed to effect a demand registration or shelf
registration of Ford Registrable Securities or any other registration statement
in which holders of Ford Registrable Securities were entitled to participate
pursuant to their incidental registration rights, provided that TEAM must
actively employ in good faith all reasonable efforts to cause any such
registration statement to become effective as soon as possible. TEAM will not be
required to file more than four demand registration statements for the
registration of Ford Registrable Securities. TEAM has agreed to pay the costs
and expenses incurred in connection with each incidental registration and the
first three demand registrations, other than underwriting discounts and
commissions.

In connection with the sale of the Series A Convertible Notes in December
1996, TEAM entered into a registration rights agreement granting holders
registration rights with respect to the shares of Class A Common Stock into
which the notes are convertible and TEAM will enter into a new registration
rights agreement in connection with the sale of the Series B Convertible Notes
(collectively, the "Notes Registration Rights Agreement"). The Notes
Registration Rights Agreement provides that TEAM will file a shelf registration
statement relating to the shares of Class A Common Stock issuable upon
conversion of the Convertible Subordinated Notes at the earlier of three years
from the date of issuance or promptly after the disposition by Ford of at least
2.25 million shares of Class A Common Stock. The holders may require TEAM to
effect an underwritten public offering pursuant to the shelf registration
statement. TEAM may prohibit offers and sales of securities pursuant to the
shelf registration statement under certain circumstances. In addition, the
holders of an agreed percentage of Convertible Subordinated Notes will be
entitled to make one demand, at the time of the shelf registration or
thereafter, for TEAM to cause the Convertible Subordinated Notes to be
registered for an underwritten offering. TEAM has also agreed to pay the costs
and expenses of each registration effected under the Notes Registration Rights
Agreement, other than underwriting discounts and commissions.

Concurrently with completion of its initial public offering in August 1994,
TEAM and the Exchange Stockholders entered into the registration rights
agreement (the "Registration Rights Agreement") granting such holders
registration rights with respect to the shares of Common Stock received by them
as a result of the Share Exchange. The Registration Rights Agreement provides
that the holders of at least 33% of the outstanding shares received in the Share
Exchange may require TEAM to register such shares under the Securities Act of
1933 (the "Securities Act") on two occasions, provided that the aggregate
offering price of the shares so registered is not less than $1 million on each
occasion. The Registration Rights Agreement also provided that at any time Class
A Common Stock is to be registered by TEAM under the Securities Act, TEAM must
notify the Exchange Stockholders to allow their participation in the
registration, unless the managing underwriters of the offering determine in good
faith that the total number of such securities to be registered, along with any
securities to be sold by TEAM or any other persons having rights to participate
in the offering, is such as to materially and adversely affect the success of
the offering. In such case, the securities proposed to be included by the
Exchange Stockholders will be reduced on a pro rata basis. TEAM has agreed to
refrain from selling its securities during the 10-day period prior to, and the
180-day period following, the consummation of each underwritten offering made
pursuant to the Registration Rights Agreement. TEAM has also agreed to pay the
costs and expenses of each registration effected under the Registration Rights
Agreement, other than underwriting discounts and commissions. The Registration
Rights Agreement was amended in November 1, 1994 to include the signatories to
the Ft. Wayne stock purchase agreement.

The holders of shares issuable upon the exercise of the BRACC Warrant are
also entitled to two demand and unlimited "piggyback" registration rights with
respect to the shares issuable upon its exercise, and the holders of shares
issuable upon exercise of the NationsBank Warrant are entitled to one demand and
unlimited "piggyback" registration rights. TEAM will bear the expenses of
registering such shares, other than underwriting discounts and

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<PAGE> 78

commissions. In connection with the Los Angeles Acquisition, TEAM and SoCal
entered into a registration rights agreement granting SoCal and its affiliated
entities unlimited "piggyback" registration rights subject to certain
conditions. TEAM will bear the expenses of registering such shares, other than
underwriting discounts and commissions.

INDEMNIFICATION MATTERS

As permitted by the Delaware General Corporation Law, TEAM's Amended and
Restated Certificate of Incorporation provides that directors of TEAM will not
be personally liable to TEAM or its stockholders for monetary damages for breach
of fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to TEAM or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, relating to prohibited dividends, distributions and repurchases or
redemptions of stock, or (iv) for any transaction from which the director
derives an improper personal benefit. TEAM's Bylaws provide that TEAM shall
indemnify its directors, officers, employees and other agents, to the fullest
extent provided by Delaware law. TEAM has also entered into indemnification
agreements with certain of its executive officers and directors. The
indemnification agreements require TEAM, among other things, to indemnify such
directors and officers against certain liabilities that may arise by reason of
their status or service as directors or officers (other than liabilities arising
from willful misconduct of a culpable nature), and to advance their expenses
incurred as a result of any proceeding against them as to which they could be
indemnified. TEAM maintains directors' and officers' insurance against certain
liabilities.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling TEAM pursuant to
the arrangements described above, TEAM has been advised that in the opinion of
the Commission, such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.

At present, there is no pending material litigation or proceeding involving
any director, officer, employee or agent of TEAM where indemnification will be
required or permitted.

SECTION 203

TEAM 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. An "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. A "business
combination" includes mergers, asset sales and certain other transactions
resulting in a financial benefit to an interested stockholder.

TRANSFER AGENT

The transfer agent and registrar for the Class A Common Stock is
ChaseMellon Shareholder Services.

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DESCRIPTION OF CERTAIN INDEBTEDNESS

THE NEW WORKING CAPITAL FACILITY

Concurrently with consummation of the Offering, BRACC will enter into a new
working capital facility (the "New Working Capital Facility"), for which Credit
Suisse First Boston is acting as agent, to replace TEAM's $10.0 million working
capital facility. TEAM and each of the direct and indirect subsidiaries of BRACC
will guarantee the New Working Capital Facility, subject to certain exceptions
to be mutually agreed upon. The following is a summary of the material terms and
conditions of the New Working Capital Facility.

The New Working Capital Facility will consist of a five-year senior,
secured revolving credit facility in the amount of $300 million or the
equivalent thereof in foreign currencies under a multi-currency subfacility. The
New Working Capital Facility will provide that (i) up to $100 million will be
available for loans, (ii) up to $40 million will be available under the
multi-currency subfacility, (iii) up to $225 million will be available for
letters of credit for credit enhancement of commercial paper or similar fleet
financing programs and (iv) $300 million will be available for letters of
credit. In addition, aggregate borrowings outstanding under the New Working
Capital Facility will be subject to a borrowing base limitation and may not at
any time exceed the sum of 85% of eligible receivables, 100% of eligible
repurchase vehicles (as defined), 85% of eligible risk vehicles, and 100% of
eligible cash and cash equivalents (as defined). All borrowings outstanding
under the New Working Capital Facility will mature on the fifth anniversary of
the date of the loan agreement.

Interest will accrue on borrowings outstanding under the New Working
Capital Facility, at TEAM's option, at a rate equal to (i) either the higher of
(A) the interest rate established by Credit Suisse as its base or prime rate in
effect at its principal office in New York City and (B) the federal funds
effective rate from time to time plus 0.5% (the higher of these being known as
the "ABR") plus the applicable margin for ABR loans (which margin shall range
from approximately 0.25% to 1.25%) or (ii) the rate at which Eurocurrency
deposits in the relevant denomination currency for one, two, three or six months
(as selected by TEAM) are offered by Credit Suisse in the relevant interbank
Eurocurrency market plus the applicable margin for the Eurocurrency rate (which
margin shall range from 1.25% to 2.25%). The New Working Capital Facility will
require TEAM to pay the following fees: (i) a commitment fee based on the
adjusted EBITDA of TEAM and ranging from 0.25% to 0.375% per annum; (ii) a
letter of credit fee on the aggregate amount available under outstanding letters
of credit equal to a rate per annum which is the same as the applicable margin
for Eurocurrency loans from time to time in effect; and (iii) a letter of credit
fronting fee equal to a rate per annum of 1/8% of the aggregate amount available
under each letter of credit issued.

The New Working Capital Facility will be secured by (a) a first-priority
lien on (i) the capital stock of BRACC and each direct and indirect subsidiary
of BRACC (with respect to the international subsidiaries, no more than 65% of
the stock of each subsidiary will be required to be pledged in the event that a
pledge of a greater percentage would result in material increased tax or similar
liabilities for BRACC and its subsidiaries on a consolidated basis; (ii) all
property and assets of BRACC and its subsidiaries (other than (A) assets pledged
as security in respect of a vehicle financing program, (B) real property assets,
(C) equipment and (D) assets which do not comprise working capital or
intellectual property); and (iii) all assets included in the borrowing base and
(b) as to letters of credit issued as credit and/or liquidity enhancement for
TEAM's commercial paper program, a subordinated perfected lien on the assets
surrounding the commercial paper issued pursuant to the commercial paper
program.

The New Working Capital Facility will contain a number of customary
financial and other covenants, including (i) a specified minimum consolidated
net worth ratio, (ii) a maximum consolidated leverage ratio, (iii) a minimum
consolidated interest coverage ratio and (iv) a minimum debt service coverage
ratio. In addition, the New Working Capital Facility will generally limit TEAM's
ability to incur additional debt, engage in certain sales of assets and make
dividend and other payments in excess of certain levels, and will contain other
customary negative covenants.

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<PAGE> 80

CONVERTIBLE SUBORDINATED NOTES

Series A Convertible Notes. In December 1996, TEAM issued $80.0 million
aggregate principal amount of 7.0% Convertible Subordinated Notes, Series A, due
2003 (the "Series A Convertible Notes"). At a conversion price of $20.07 per
share, the Series A Convertible Notes are convertible into an aggregate of
3,986,049 shares of Class A Common Stock. Concurrently with the consummation of
the Offering, the note purchase agreements relating to the Series A Convertible
Notes will be amended to extend the maturity of the notes to 2007 and to conform
certain terms of the notes to the terms of the Series B Convertible Notes.

Series B Convertible Notes. Concurrently with the consummation of the
Offering, Budget Group will issue $50.0 million aggregate principal amount of
% Convertible Subordinated Notes, Series B, due 2007 (the "Series B
Convertible Notes"). The Series A Convertible Notes and the Series B Convertible
Notes will be treated as a single class of notes for all purposes. The Series B
Convertible Notes will be offered on a pro rata unit basis with the Guaranteed
Senior Notes, as defined below. The Series B Convertible Notes will be
convertible, at the option of the holders, into shares of Class A Common Stock
after the earlier of the third anniversary of the date of issuance or the
disposition by Ford of at least 2.25 million shares of Class A Common Stock at a
conversion price to be determined.

Redemption. The Convertible Subordinated Notes will be redeemable, in
whole or in part, at the option of Budget Group, at a premium equal to the
coupon on the notes of such series declining in equal amounts to par in April
2006, plus accrued and unpaid interest to the redemption date, provided that
prior to April 2002, no such redemption of the Convertible Subordinated Notes
will be permitted unless the closing price of the Class A Common Stock for at
least ten consecutive trading days (commencing 20 trading days before Budget
Group's notice of redemption) was at least 150% of the conversion price for the
notes of such series.

Registration Rights. TEAM has granted registration rights to the holders
of the Series A Convertible Notes and will grant registration rights to the
holders of the Series B Convertible Notes. For a description of such
registration rights, see "Description of Capital Stock -- Registration Rights."

Covenants. The Series A Convertible Notes contain, and the Series B
Convertible Notes will contain, covenants limiting consolidation or merger and
limiting the sale, lease or conveyance of all or substantially all of Budget
Group's assets. In addition, upon a change of control (as defined in the note
purchase agreements), each noteholder may require Budget Group to repurchase the
Convertible Subordinated Notes held by such holder at 101% of the principal
amount thereof plus accrued interest to the date of repurchase.

GUARANTEED SENIOR NOTES

Concurrently with the consummation of the Offering, BRACC will issue up to
$150.0 million aggregate principal amount of % Guaranteed Senior Notes due
2007 (the "Guaranteed Senior Notes"). The Guaranteed Senior Notes will be
offered on a pro rata unit basis with the Series B Convertible Notes. The
Guaranteed Senior Notes will be guaranteed by Budget Group and certain
subsidiaries of BRACC.

Mandatory Redemption. The Guaranteed Senior Notes will require annual
principal payments equal to approximately 14.3% of the aggregate principal
amount of the notes commencing on the fourth anniversary of the date of
issuance.

Optional Redemption. The Guaranteed Senior Notes will be redeemable at any
time at the option of BRACC, in whole or in part, at a price equal to the
greater of par or the present value of the future debt service on such notes,
discounted at 100 basis points above the then current yield to maturity of a
U.S. Treasury security with a maturity comparable to the remaining weighted
average life of the notes.

Repurchase. BRACC or Budget Group may repurchase all or a portion of the
Guaranteed Senior Notes at any time provided that (i) the offer to repurchase is
made pro rata to all holders of the notes so repurchased and (ii) any notes so
repurchased are thereafter canceled.

Covenants. The Guaranteed Senior Notes will contain covenants limiting
liens, sale and leaseback transactions, restricted subsidiary debt, consolidated
funded debt, maintenance of consolidated stockholders' equity, sale of assets,
merger or consolidation and transactions with affiliates. In addition, upon a
change of

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<PAGE> 81

control (as defined in the note purchase agreement), each noteholder may require
BRACC to repurchase the notes held by such holder at 101% of the principal
amount thereof plus accrued interest to the date of repurchase.

FLEET FINANCING FACILITIES

For a description of Budget Group's Fleet Financing Facilities, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of TEAM -- Liquidity and Capital Resources -- Pro Forma Liquidity and
Capital Resources for Budget Group."

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, TEAM will have outstanding 15,820,383
shares of the Class A Common Stock and 1,936,600 shares of the Class B Common
Stock (assuming the over-allotment option described below is not exercised). The
Class B Common Stock is convertible into Class A Common Stock on a
share-for-share basis and must be converted to effect any public sale of such
stock. Of these shares, 14,523,933 shares, including the 6,500,000 shares of
Class A Common Stock sold in the Offering, will be freely tradeable without
restriction under the Securities Act, except for any shares purchased by an
"affiliate" of TEAM (as that term is defined in the Securities Act), which will
be subject to the resale limitations of Rule 144 (as amended effective April 30,
1997) under the Securities Act.

The remaining 1,296,450 shares of the Class A Common Stock, all shares of
the Class B Common Stock and all shares of the Series A Convertible Preferred
Stock are "restricted" securities within the meaning of Rule 144 and may not be
resold in a public distribution, except in compliance with the registration
requirements of the Securities Act or pursuant to Rule 144. All these shares of
Class A Common Stock and all outstanding shares of Class B Common Stock are
eligible for sale under Rule 144 (as amended effective April 30, 1997). All the
shares of Series A Convertible Preferred Stock will become eligible for sale
under Rule 144 (as amended effective April 30, 1997) one year after the issuance
of those shares in the Budget Acquisition. TEAM's directors and executive
officers, who in the aggregate beneficially own 2,824,305 shares of Common
Stock, have agreed that they will not sell, contract or offer to sell or
otherwise dispose of, directly or indirectly, any shares of capital stock of
TEAM for a period of 90 days from the date of this Prospectus without the prior
written consent of Credit Suisse First Boston Corporation, on behalf of the
Underwriters. See "Underwriting." After such date, certain of these stockholders
have the right to demand that TEAM register their shares under the Securities
Act in accordance with agreements between such holders and TEAM and may be able
to dispose of their shares in a registered public offering effected thereunder.
In addition, certain stockholders and holders of stock purchase warrants possess
certain demand and/or "piggyback" registration rights. See "Description of
Capital Stock -- Registration Rights" and "Management -- Benefit Plans."

Subject to stockholder approval of amendments to TEAM's option plans at the
1997 Annual Meeting of Stockholders (to be held April 22, 1997), TEAM has
reserved 1,750,000 shares of Common Stock for issuance under the 1994 Option
Plan (which may be either Class A Common Stock or Class B Common Stock) and
150,000 shares of Class A Common Stock for issuance under the 1994 Directors'
Plan. There are 729,850 stock options currently issued and outstanding under the
1994 Option Plan (of which 164,000 are options to purchase Class B Common Stock)
and 70,000 stock options issued and outstanding under the 1994 Directors' Plan.
TEAM filed a Form S-8 Registration Statement under the Securities Act to
register 760,000 shares of the Common Stock issuable under the 1994 Option Plan
and 25,000 shares of Class A Common Stock issuable under the 1994 Directors'
Plan. Shares issued upon the exercise of stock options after the effective date
of the Form S-8 registration statement became eligible for resale in the public
market without restriction, subject to Rule 144 limitations applicable to
affiliates and the lock-up agreements applicable to certain shares and options.
TEAM expects to file a Form S-8 Registration Statement with respect to the
remaining 990,000 shares of Common Stock issuable under the 1994 Option Plan and
125,000 shares of Class A Common Stock issuable under the 1994 Directors' Plan.
TEAM has further reserved 362,500 shares of Class A Common Stock for issuance
upon the exercise of stock purchase warrants.

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CERTAIN U.S. TAX CONSEQUENCES TO NON-U.S.
HOLDERS OF CLASS A COMMON STOCK

GENERAL

The following is a general discussion of U.S. Federal income and estate tax
consequences of the ownership and disposition of Class A Common Stock by a
Non-U.S. Holder (as defined below). This discussion does not address all aspects
of U.S. Federal income and estate taxes and does not address any foreign, state
or local tax consequences. Furthermore, this discussion is based on provisions
of the Code, existing, temporary and proposed regulations promulgated thereunder
and administrative and judicial interpretations thereof, all as in effect or
proposed on the date hereof and all of which are subject to change, possibly
with retroactive effect, or different interpretations. Each prospective
purchaser of Class A Common Stock is advised to consult a tax advisor with
respect to current and possible future U.S. Federal income and estate tax
consequences of holding and disposing of Class A Common Stock as well as any tax
consequences that may arise under the laws of any state, local, foreign or other
taxing jurisdiction. For purposes of this summary, a "U.S. Holder" with respect
to Class A Common Stock is (i) an individual who is a citizen or resident of the
United States, (ii) a corporation or other entity taxable as a corporation
created or organized in the United States or under the laws of the United States
or of any state thereof (including the District of Columbia), (iii) an estate or
trust the income of which is includable in gross income for U.S. Federal income
tax purposes regardless of its source or (iv) a person otherwise subject to U.S.
Federal income taxation on a net income basis with respect to worldwide income;
and a "Non-U.S. Holder" is any person other than a U.S. Holder.

DISTRIBUTIONS

Distributions on the shares of Class A Common Stock (other than
distributions in redemption of the shares of Class A Common Stock subject to
Section 302(b) of the Code) will constitute dividends for U.S. Federal income
tax purposes to the extent paid from current or accumulated earnings and profits
of TEAM (as determined under U.S. Federal income tax principles). Dividends paid
to a Non-U.S. Holder of Class A Common Stock that are not effectively connected
with a U.S. trade or business of the Non-U.S. Holder will be subject to U.S.
withholding tax at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty. Under the terms of the tax treaty between Canada
and the United States (the "Treaty"), dividends paid to a Non-U.S. Holder owning
less than 10% of TEAM's Class A Common Stock are subject to withholding tax at
the reduced rate of 15%, provided that such Non-U.S. Holder is entitled to the
benefits of the Treaty. Moreover, under United States Treasury regulations which
are currently in effect, withholding is generally imposed on the gross amount of
the distribution, without regard to whether the corporation has sufficient
earnings and profits to cause the distribution to be a dividend for U.S. Federal
income tax purposes. Dividends that are effectively connected with the conduct
of a trade or business within the United States or, if a tax treaty applies, are
attributable to a U.S. permanent establishment of a Non-U.S. Holder, are exempt
from U.S. Federal withholding tax but are subject to U.S. Federal income tax on
a net income basis at applicable graduated individual or corporate rates. Any
such dividends effectively connected with the conduct of a trade or business
within the United States or attributable to a U.S. permanent establishment
received by a foreign corporation may, under certain circumstances, be subject
to an additional "branch profits tax" at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty. Certain certification and
disclosure requirements must be complied with in order to be exempt from
withholding under the effectively connected income or permanent establishment
exemptions.

Under current United States Treasury regulations, 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, under the current
interpretation of United States Treasury regulations, for purposes of
determining the applicability of a tax treaty rate. Under proposed United States
Treasury regulations (the "Proposed Regulations") not currently in effect,
however, a Non-U.S. Holder of Class A Common Stock would be required to satisfy
applicable certification and other requirements to qualify for withholding at an
applicable treaty rate. The Proposed Regulations would require a Non-U.S. Holder
to file a beneficial owner withholding certification, e.g., a Form W-8, to
obtain the lower treaty rate. The Proposed Regulations would apply to dividends
paid after December 31, 1997, subject to certain transitional rules.

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A Non-U.S. Holder of Class A Common Stock may obtain a refund of any excess
amounts withheld by filing an appropriate claim for refund with the Internal
Revenue Service (the "IRS").

GAIN ON DISPOSITION OF CLASS A COMMON STOCK

A Non-U.S. Holder will generally not be subject to U.S. Federal income tax
with respect to gain recognized on a sale or other disposition of Class A Common
Stock unless (i) the gain is effectively connected with a trade or business of
the Non-U.S. Holder in the United States, (ii) in the case of a Non-U.S. Holder
who is an individual and holds Class A Common Stock as a capital asset, such
holder is present in the United States for 183 or more days in the taxable year
of the sale or other disposition and certain other conditions are met, or (iii)
TEAM is or has been a "U.S. real property holding corporation" for U.S. Federal
income tax purposes at any time during the five-year period ending on the date
of the disposition, or, if shorter, the period during which the Non-U.S. Holder
held the Class A Common Stock (the "applicable period"), and the Non-U.S. Holder
owns, actually or constructively, at any time during the applicable period more
than five percent of the Class A Common Stock. Management believes that it is
not currently a "U.S. real property holding corporation" for U.S. Federal income
tax purposes.

FEDERAL ESTATE TAX

Class A Common Stock held by an individual Non-U.S. Holder at the time of
death will be included in such holder's gross estate for U.S. Federal estate tax
purposes, unless an applicable estate tax treaty provides otherwise.

INFORMATION REPORTING AND BACKUP WITHHOLDING TAX

Under Treasury regulations, TEAM must report annually to the IRS and to
each Non-U.S. Holder the amount of dividends paid to such holder and the tax
withheld with respect to such dividends. These information reporting
requirements apply even if withholding was not required because the dividends
were effectively connected with a U.S. trade or business in the United States of
the Non-U.S. Holder or withholding was reduced or eliminated by an applicable
income tax treaty. Copies of the information returns reporting such dividends
and withholding may also be made available to the tax authorities in the country
in which the Non-U.S. Holder resides under the provisions of an applicable
income tax treaty.

Backup withholding (which generally is a withholding tax imposed at the
rate of 31% on certain payments to persons who fail to furnish certain
information under the U.S. information reporting requirements) will generally
not apply to dividends paid to Non-U.S. Holders that either are subject to the
U.S. withholding tax, whether at 30% or a reduced treaty rate, or that are
exempt from such withholding of effectively connected income. As a general
matter, information reporting and backup withholding will not apply to a payment
by or through a foreign office of a foreign broker of the proceeds of a sale of
Class A Common Stock effected outside the United States. However, information
reporting requirements (but not backup withholding) will apply to a payment by
or through a foreign office of a broker of the proceeds of a sale of Class A
Common Stock effected outside the United States where that broker (i) is a U.S.
person, (ii) is a foreign person that derives 50% or more of its gross income
for certain periods from the conduct of a trade or business in the United States
or (iii) is a "controlled foreign corporation" as defined in the Code
(generally, a foreign corporation controlled by certain U.S. shareholders),
unless the broker has documentary evidence in its records that the holder is a
Non-U.S. Holder and certain conditions are met or the holder otherwise
establishes an exemption. Payment by a U.S. office of a broker of the proceeds
of a sale of Class A Common Stock is subject to both backup withholding and
information reporting unless the holder certifies to the payor in the manner
required as to its non-U.S. status under penalties of perjury or otherwise
establishes an exemption.

Amounts withheld under the backup withholding rules do not constitute a
separate U.S. Federal income tax. Rather, any amounts withheld under the backup
withholding rules will be refunded or allowed as a credit against the holder's
U.S. Federal income tax liability, if any, provided the required information or
appropriate claim for refund is filed with the IRS.

THE FOREGOING DISCUSSION IS A SUMMARY OF THE PRINCIPAL U.S. FEDERAL INCOME AND
ESTATE TAX CONSEQUENCES OF THE OWNERSHIP, SALE OR OTHER DISPOSITION OF THE CLASS
A COMMON STOCK BY NON-U.S. HOLDERS. ACCORDINGLY, INVESTORS ARE URGED TO CON-

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SULT WITH THEIR TAX ADVISORS WITH RESPECT TO THE U.S. FEDERAL INCOME TAX
CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF CLASS A COMMON STOCK INCLUDING
THE APPLICATION AND EFFECT OF THE LAWS OF ANY STATE, LOCAL, FOREIGN OR OTHER
TAXING JURISDICTION.

UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated , 1997 among TEAM and the U.S. Underwriters (the
"Underwriting Agreement"), the underwriters named below (the "U.S.
Underwriters") have severally but not jointly agreed to purchase from TEAM the
following respective numbers of U.S. Shares:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
Credit Suisse First Boston Corporation......................
ABN AMRO Chicago Corporation................................
Alex. Brown & Sons Incorporated.............................
McDonald & Company Securities, Inc..........................

---------
Total............................................. 5,200,000
=========
</TABLE>

The 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 (other than those
U.S. Shares covered by the over-allotment option described below) if any are
purchased. The Underwriting Agreement provides that, in the event of a default
by a U.S. Underwriter, in certain circumstances, the purchase commitments of
nondefaulting U.S. Underwriters may be increased or the Underwriting Agreement
may be terminated. Credit Suisse First Boston Corporation, ABN AMRO Chicago
Corporation, Alex. Brown & Sons Incorporated and McDonald & Company Securities,
Inc. are acting as representatives (the "Representatives") of the U.S.
Underwriters.

TEAM has entered into a Subscription Agreement (the "Subscription
Agreement") with the Managers of the International Offering (the "Managers")
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.

TEAM 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
975,000 additional shares of Class A Common Stock at the public offering price
less underwriting discounts and commissions, all as set forth on the cover page
of this Prospectus. Such option may be exercised only to cover over-allotments,
if any, in the sale of the shares of Class A Common Stock. To the extent such
option is exercised, each U.S. Underwriter and each Manager will become
obligated, subject to certain conditions, 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 total number of shares of Class A Common Stock in such
tables.

TEAM has been advised by the U.S. Underwriters that the U.S. Underwriters
propose to offer the U.S. Shares in the United States and Canada to the public
initially at the public offering price set forth on the cover page of this
Prospectus and, through the U.S. Underwriters, 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

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certain other dealers. After the public offering, the public offering price,
concession and discount to dealers may be changed by the U.S. Underwriters.

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
mutual agreement of Credit Suisse First Boston Corporation, on behalf of the
U.S. Underwriters, and Credit Suisse First Boston (Europe) Limited, 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 of Class A Common Stock or distribute any
prospectus relating to the Class A Common Stock 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 of Class A
Common Stock or distribute any prospectus relating to the Class A Common Stock
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) an individual resident in the United States or Canada or
(ii) a 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 of Class A Common
Stock as may be mutually agreed. The price of any shares so sold shall 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 Credit
Suisse First Boston (Europe) Limited, 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 of Class A Common Stock 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 of Class A Common Stock.

This Prospectus may be used by underwriters and dealers in connection with
sales of International Shares to persons located in the United States, to the
extent such sales are permitted by the contractual limitations on sales
described above.

TEAM and its officers and directors and certain other holders of Class A
Common Stock have agreed that they will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or, in the case of TEAM,
file with the Commission a registration statement under the Securities Act
relating to any additional shares of TEAM's Common Stock or securities
convertible into or exchangeable or exercisable for any shares of TEAM'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, in the case of TEAM's officers and directors and such other
holders, for a period of 90 days and, in the case of TEAM, for a period of 180
days, after the date of this Prospectus, except issuances pursuant to the
exercise of stock options granted under the 1994 Option Plan.

TEAM has 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 which the U.S. Underwriters and the Managers may be
required to make in respect thereof.

82
<PAGE> 86

Credit Suisse First Boston Corporation has acted as placement agent in
connection with each of the Fleet Financing Facilities, the offering of the
Series A Convertible Notes and the Debt Placements, and as underwriter for
TEAM's initial public offering and its public offering in July 1996. In
addition, Credit Suisse First Boston Corporation acted as placement agent for a
fleet financing by SoCal shortly before it was acquired by TEAM. Credit Suisse
First Boston Corporation is acting as financial advisor to TEAM in connection
with the Budget Acquisition. Credit Suisse First Boston, a Swiss bank and an
affiliate of Credit Suisse First Boston Corporation, is the agent for the New
Working Capital Facility.

The Representatives, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions,
penalty bids and "passive" market making in accordance with Regulation M under
the Exchange Act. 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 Class A Common Stock in the open market
after the distribution has been completed in order to cover syndicate short
positions. In "passive" market making, market makers in the Class A Common Stock
who are Underwriters or prospective underwriters may, subject to certain
limitations, make bids for or purchases of the Class A Common Stock until the
time, if any, at which a stabilizing bid is made. Penalty bids permit the
Representatives to reclaim a selling concession from a syndicate member when the
shares of Class A Common Stock 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 Class A Common Stock to be higher than
it would otherwise be in the absence of such transactions. These transactions
may be effected on The Nasdaq National Market or otherwise and, if commenced,
may be discontinued at any time.

83
<PAGE> 87

NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of the Class A Common Stock in Canada is being made only
on a private placement basis exempt from the requirement that TEAM prepare and
file a prospectus with the securities regulatory authorities in each province
where trades of Class A Common Stock are effected. Accordingly, any resale of
the Class A 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 Class A Common Stock.

REPRESENTATIONS OF PURCHASERS

Each purchaser of Class A Common Stock in Canada who receives a purchase
confirmation will be deemed to represent to TEAM and the dealer from whom such
purchase confirmation is received that (i) such purchaser is entitled under
applicable provincial securities laws to purchase such Class A 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 TEAM's directors and officers as well as the experts named herein
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 TEAM and such
persons may be located outside of Canada and, as a result, it may not be
possible to satisfy a judgment against TEAM or such persons in Canada or to
enforce a judgment obtained in Canadian courts against TEAM or such persons
outside of Canada.

NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of Class A 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 Class A 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 TEAM.
Only one such report must be filed in respect of Class A Common Stock acquired
on the same date and under the same prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

Canadian purchasers of Class A Common Stock should consult their own legal
and tax advisers with respect to the tax consequences of an investment in the
Class A Common Stock in their particular circumstances and with respect to the
eligibility of the Class A Common Stock for investment by the purchaser under
relevant Canadian legislation.

84
<PAGE> 88

LEGAL MATTERS

The validity of the shares of the Class A Common Stock offered hereby will
be passed upon for TEAM by King & Spalding, Atlanta, Georgia. The U.S.
Underwriters and the Managers have been represented by Cravath, Swaine & Moore,
New York, New York.

EXPERTS

The consolidated financial statements of Team Rental Group, Inc. as of and
for the year ended December 31, 1996, included in this Prospectus and elsewhere
in the Registration Statement have been audited by Arthur Andersen LLP,
independent certified public accountants, as indicated in their report with
respect thereto and are included herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said report.

The consolidated financial statements of Team Rental Group, Inc. as of
December 31, 1995 and for each of the two years in the period ended December 31,
1995 included in this Prospectus and the related financial statement schedules
included elsewhere in the Registration Statement have been audited by Deloitte &
Touche LLP ("D&T"), independent auditors, as stated in their reports appearing
herein and elsewhere in the Registration Statement and are included in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.

The consolidated financial statements of BRACC as of December 31, 1995 and
1996 and for each of the three years in the period ended December 31, 1996 have
been included in the Registration Statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, appearing elsewhere
herein and upon the authority of said firm as experts in accounting and
auditing.

On November 26, 1996, TEAM appointed Arthur Andersen LLP as its independent
accounting firm for the remainder of 1996. TEAM's Audit Committee recommended
the appointment, which was approved by the Board of Directors. Concurrently, the
Board of Directors elected to dismiss D&T, TEAM's former independent accounting
firm. The report of D&T on TEAM's financial statements for the two years ended
December 31, 1995 contained no adverse opinion or disclaimer of opinion, and was
not qualified or modified as to uncertainty, audit scope or accounting
principles. Since TEAM's inception, D&T's reports on TEAM's financial statements
have not contained an adverse opinion or a disclaimer of opinion, nor were the
opinions qualified or modified as to uncertainty, audit scope or accounting
principles, nor were there any events of the type requiring disclosure under
Item 304(a)(1)(v) of Regulation S-K under the Securities Act.

With regard to Item 304(a)(1)(iv) of Regulation S-K, TEAM has previously
reported the following: (i) On February 2, 1996, TEAM announced that it would
restate its financial statements for all periods since its initial public
offering in 1994. This restatement resulted from a change in the accounting
treatment of the BRACC Warrant issued to BRACC concurrently with TEAM's initial
public offering in August 1994. This change in accounting treatment was the
subject of numerous discussions between officers of TEAM and representatives of
D&T (including discussions between D&T and the Audit Committee of the Company's
Board of Directors, which occurred in January 1996), and was approved by the
Audit Committee and announced to the public on February 2, 1996. TEAM believes
this matter was resolved to the satisfaction of D&T; (ii) in late 1995, TEAM
received funds from a vehicle manufacturer that it accounted for in a manner
similar to funds it had received from a vehicle manufacturer in 1993. In March
1996, D&T advised TEAM that it did not deem the 1995 transaction analogous to
the 1993 transaction. D&T discussed this matter with officers of TEAM, and TEAM
issued its financial statements in accordance with the recommendation of D&T. In
connection with the resolution this matter, neither the Board of Directors nor
any committee thereof formally discussed this matter with D&T. TEAM believes
that this matter was resolved to the satisfaction of D&T.

TEAM has provided D&T with a copy of the disclosures contained herein and
D&T has indicated in a letter to the Commission that it agrees with these
disclosures. A copy of such letter is filed as an exhibit to the Registration
Statement. Neither TEAM nor anyone acting on its behalf consulted with Arthur
Andersen LLP regarding any of the matters referred to in Item 304(a)(2) of
Regulation S-K prior to its appointment.

85
<PAGE> 89

ADDITIONAL INFORMATION

TEAM is subject to the informational requirements of the Exchange Act and,
in accordance therewith, files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information filed
by TEAM with the Commission can be inspected and copied at the public reference
section of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, or at its Regional Offices located at 7 World Trade Center, Suite 1300,
New York, New York 10048, and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, and copies of such materials can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission maintains a World Wide Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants such as TEAM which file electronically
with the Commission.

TEAM has filed with the Commission a Registration Statement on Form S-1
under the Securities Act with respect to the Class A Common Stock offered
hereby. This Prospectus, which is a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement. For
further information with respect to TEAM and the Class A Common Stock, reference
is made to the Registration Statement and the exhibits and schedules filed as a
part thereof. The Company believes that all statements made herein that
summarize the provisions of any documents accurately describe the material
provisions of all such referenced documents. The Registration Statement and the
exhibits and schedules thereto may be inspected, without charge, at the public
reference section or regional offices of the Commission at the addresses
indicated above. Copies of the Registration Statement can be obtained from the
public reference section of the Commission upon payment of prescribed fees.

86
<PAGE> 90

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
TEAM RENTAL GROUP, INC.
- ---------------------------
Report of Independent Certified Public Accountants.......... F-2
Independent Auditors' Report................................ F-3
Consolidated Balance Sheets As of December 31, 1995 and
1996...................................................... F-4
Consolidated Statements of Income For Each of the Three
Years in the Period Ended December 31, 1996............... F-5
Consolidated Statements of Stockholders' Equity (Deficit)
For Each of the Three Years in the Period Ended December
31, 1996.................................................. F-6
Consolidated Statements of Cash Flows For Each of the Three
Years in the Period Ended December 31, 1996............... F-7
Notes to Consolidated Financial Statements.................. F-8
BUDGET RENT A CAR CORPORATION
- -----------------------------------
Independent Auditors' Report................................ F-24
Consolidated Balance Sheets -- December 31, 1995 and 1996... F-25
Consolidated Statements of Operations -- December 31, 1994,
1995 and 1996............................................. F-26
Consolidated Statements of Stockholders' Equity -- Years
ended December 31, 1994, 1995 and 1996.................... F-27
Consolidated Statements of Cash Flows -- December 31, 1994,
1995 and 1996............................................. F-28
Notes to Consolidated Financial Statements.................. F-29
</TABLE>

F-1
<PAGE> 91

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To Team Rental Group, Inc.:

We have audited the accompanying consolidated balance sheet of Team Rental
Group, Inc. (a Delaware corporation) and subsidiaries as of December 31, 1996,
and the related consolidated statements of income, stockholders' equity
(deficit) and cash flows for the year then ended. 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 audit. The financial
statements of Team Rental Group, Inc. as of December 31, 1995, and for each of
the two years in the period then ended were audited by other auditors whose
report dated April 12, 1996, expressed an unqualified opinion on those
statements.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Team Rental
Group, Inc. and subsidiaries as of December 31, 1996, and the consolidated
results of their operations and their cash flows for the year then ended in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Orlando, Florida,
March 14, 1997

F-2
<PAGE> 92

INDEPENDENT AUDITORS' REPORT

To the Stockholders and Board of Directors of
Team Rental Group, Inc.:

We have audited the consolidated balance sheet of Team Rental Group, Inc.
as of December 31, 1995, and the related consolidated statements of income,
stockholders' equity (deficit) and cash flows for each of the two years in the
period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the consolidated 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 consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated 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 Team Rental Group, Inc. as of
December 31, 1995, and the results of their operations and their cash flows for
each of the two years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Indianapolis, Indiana
April 12, 1996

F-3
<PAGE> 93

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1995 AND 1996

(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
1995 1996
-------- --------
<S> <C> <C>
ASSETS
Cash and cash equivalents................................... $ 357 $ 50,490
Restricted cash............................................. 67,731 66,336
Trade and vehicle receivables, net of allowance for doubtful
accounts of $2,297 and $4,008............................. 20,928 31,302
Accounts receivable, related parties........................ 61 58
Vehicle inventory........................................... 8,938 16,413
Revenue earning vehicles, net............................... 219,927 319,257
Property and equipment, net................................. 12,503 18,502
Deferred financing fees, net of accumulated amortization of
$425 and $791............................................. 2,266 3,950
Franchise rights, net of accumulated amortization of $1,500
and $3,250................................................ 46,670 68,469
Other assets................................................ 6,942 10,022
Other intangible assets, net of accumulated amortization of
$35 in 1996............................................... -- 2,424
-------- --------
Total assets...................................... $386,323 $587,223
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Notes payable............................................... $318,233 $454,109
Capital lease obligations................................... 784 580
Accounts payable............................................ 14,698 14,601
Accrued and other liabilities............................... 9,315 16,526
Deferred income taxes....................................... 1,701 7,406
-------- --------
Total liabilities................................. 344,731 493,222
-------- --------
COMMITMENTS AND CONTINGENCIES
COMMON STOCK WARRANT........................................ 2,000 2,000
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value, 250,000 shares authorized,
no shares issued or outstanding........................... -- --
Class A common stock, $.01 par value, one vote per share,
17,500,000 shares authorized, 5,257,116 and 9,357,050
shares issued............................................. 53 93
Class B common stock, $.01 par value, 10 votes per share,
2,500,000 shares authorized, 1,936,600 shares issued...... 19 19
Additional paid-in capital.................................. 41,984 89,856
Retained earnings (deficit)................................. (2,134) 2,363
Treasury stock, at cost (36,667 shares of Class A common
stock).................................................... (330) (330)
-------- --------
Total stockholders' equity........................ 39,592 92,001
-------- --------
Total liabilities and stockholders' equity........ $386,323 $587,223
======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated balance
sheets.

F-4
<PAGE> 94

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996

(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
1994 1995 1996
------- -------- --------
<S> <C> <C> <C>
Operating revenue:
Vehicle rental revenue.................................... $38,642 $107,067 $223,250
Retail car sales revenue.................................. -- 42,662 134,120
------- -------- --------
Total operating revenue........................... 38,642 149,729 357,370
------- -------- --------
Operating costs and expenses:
Direct vehicle and operating.............................. 9,439 13,704 35,098
Depreciation -- vehicles.................................. 7,382 27,476 60,735
Depreciation -- non-vehicle............................... 446 1,341 2,589
Cost of vehicle sales..................................... -- 38,021 113,747
Advertising, promotion and selling........................ 3,090 11,826 22,983
Facilities................................................ 4,398 11,121 20,406
Personnel................................................. 7,947 24,515 53,097
General and administrative................................ 1,515 6,686 11,605
Amortization.............................................. 229 859 1,843
------- -------- --------
Total operating costs and expenses................ 34,446 135,549 322,103
------- -------- --------
Operating income............................................ 4,196 14,180 35,267
------- -------- --------
Other (income) expense:
Vehicle interest expense.................................. 3,909 13,874 25,336
Non-vehicle interest expense.............................. 341 473 1,501
Interest income -- restricted cash........................ (670) (1,348) (781)
Non-recurring bank fees................................... -- -- 1,275
Related party interest expense............................ 190 159 118
------- -------- --------
Total other expense............................... 3,770 13,158 27,449
------- -------- --------
Income before income taxes.................................. 426 1,022 7,818
Provision for income taxes.................................. 176 685 3,321
------- -------- --------
Net income.................................................. $ 250 $ 337 $ 4,497
======= ======== ========
Weighted average common and common equivalent shares
outstanding............................................... 3,704 6,369 9,488
======= ======== ========
Earnings per common and common equivalent share............. $ 0.07 $ 0.05 $ 0.47
======= ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-5
<PAGE> 95

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF
STOCKHOLDERS' EQUITY (DEFICIT)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996

(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
TOTAL
ADDITIONAL RETAINED STOCKHOLDERS'
COMMON PAID-IN EARNINGS TREASURY EQUITY
STOCK CAPITAL (DEFICIT) STOCK (DEFICIT)
------ ---------- --------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1994...................... $ 15 $ 239 $(1,505) $ -- $(1,251)
Net income.................................. -- -- 250 -- 250
Distributions on redeemable preferred
stock.................................... -- (183) -- -- (183)
Dividends to common stockholders............ -- -- (47) -- (47)
Net proceeds from initial public offering... 45 28,903 -- -- 28,948
Deferred taxes due to a change in tax status
from nontaxable to taxable............... -- -- (1,169) -- (1,169)
Shares issued in business combination....... -- 200 -- -- 200
---- ------- ------- ----- -------
Balance, December 31, 1994.................... 60 29,159 (2,471) -- 26,748
Net income.................................. -- -- 337 -- 337
Shares issued in business combinations...... 12 12,825 -- -- 12,837
Class A common stock acquired for
treasury................................. -- -- -- (330) (330)
---- ------- ------- ----- -------
Balance, December 31, 1995.................... 72 41,984 (2,134) (330) 39,592
Net income.................................. -- -- 4,497 -- 4,497
Shares issued in business combination....... 2 2,725 -- -- 2,727
Warrants issued in conjunction with
financing................................ -- 686 -- -- 686
Net proceeds from stock offering............ 38 44,402 -- -- 44,440
Proceeds from exercise of stock options..... -- 59 -- -- 59
---- ------- ------- ----- -------
Balance, December 31, 1996.................... $112 $89,856 $ 2,363 $(330) $92,001
==== ======= ======= ===== =======
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-6
<PAGE> 96

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996

(AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
1994 1995 1996
--------- --------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 250 $ 337 $ 4,497
Adjustments to reconcile net income to net cash provided
by operating activities --
Depreciation............................................ 7,828 28,817 63,324
Amortization............................................ 534 1,761 2,396
Deferred income tax provision........................... (8) 540 2,479
Warrants issued in connection with financing............ -- -- 686
Provision for doubtful accounts......................... (282) 1,796 320
Changes in certain assets and liabilities, net of effects
of 1994, 1995 and 1996 acquisitions --
Receivables............................................. (871) (11,189) (6,230)
Vehicle inventory....................................... -- (7,995) (3,463)
Other assets............................................ (1,788) 387 (1,350)
Accounts payable........................................ (2,259) 9,484 (9,469)
Accrued and other liabilities........................... 256 (7,790) 1,189
--------- --------- ---------
Net cash provided by operating activities........... 3,660 16,148 54,379
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in restricted cash balance......................... (32,691) (13,271) 1,395
Proceeds from sale of revenue earning vehicles............ 73,728 293,905 460,550
Proceeds from sale of property and equipment.............. 51 -- --
Purchases of revenue earning vehicles..................... (155,176) (315,863) (517,079)
Purchases of property and equipment....................... (637) (4,562) (2,608)
Purchases of franchise rights............................. (1,839) -- --
Payment for acquisitions, net of cash acquired............ (5,727) (6,507) (5,064)
--------- --------- ---------
Net cash used in investing activities............... (122,291) (46,298) (62,806)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales of stock, net......................... 28,948 -- 44,499
Net increase (decrease) in vehicle obligations............ (5,760) 20,947 (220,901)
Net increase (decrease) in working capital facilities..... -- 6,890 (9,500)
Proceeds from notes payable --
Medium term notes....................................... 105,682 -- 176,000
Convertible subordinated notes.......................... -- -- 80,000
Related party........................................... 1,392 -- --
Other................................................... 2,610 3,399 --
Principal payments --
Related party........................................... (3,200) (276) (4,900)
Other................................................... (5,665) (259) (4,197)
Capital leases.......................................... (410) (666) (204)
Payment of financing fees................................. (1,614) (76) (2,237)
Distributions on redeemable preferred stock............... (183) -- --
Repayment of redeemable preferred stock................... (2,747) -- --
Dividends to common stockholders.......................... (47) -- --
Purchase of treasury stock................................ -- (330) --
--------- --------- ---------
Net cash provided by financing activities........... 119,006 29,629 58,560
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents........ 375 (521) 50,133
Cash and cash equivalents, beginning of year................ 503 878 357
--------- --------- ---------
Cash and cash equivalents, end of year...................... $ 878 $ 357 $ 50,490
========= ========= =========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-7
<PAGE> 97

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Team Rental Group, Inc. (the "Company") engages in the business of the
daily rental of vehicles, including cars, trucks and passenger vans and the sale
of late-model used vehicles. The Company is the largest United States franchisee
of Budget Rent a Car ("Budget"), operating franchises granted by Budget Rent a
Car Corporation ("BRACC") through its operating subsidiaries serving thirteen
metropolitan regions in the United States. These franchises include Philadelphia
and Pittsburgh, Pennsylvania; San Diego, California; Southern California
(excluding San Diego); Phoenix, Arizona; Cincinnati and Dayton, Ohio; Albany and
Rochester, New York; Charlotte, North Carolina; Richmond, Virginia; Hartford,
Connecticut and Fort Wayne, Indiana. The Company engages in the sale of
late-model used vehicles in San Diego and Los Angeles, California; Dayton and
Cincinnati, Ohio; Philadelphia, Pennsylvania; Charlotte, North Carolina;
Richmond, Virginia and Indianapolis, Indiana. MCK Realty, Inc. ("MCK") leases
certain facilities to the Company and is owned by the Company's principal
stockholders. Because MCK is controlled by the Company and the Company has
guaranteed the lease payments assigned to a bank, MCK is included in the
consolidated financial statements of the Company.

Basis of Presentation

Concurrent with the Company's 1994 initial public offering (Note 2), the
Company exchanged 563,400 shares of Class A common stock and 1,936,450 shares of
Class B common stock for all of the outstanding common stock of its San Diego,
Albany, Richmond and Rochester franchises ("the combined companies") which,
accordingly, became wholly owned subsidiaries (the "Share Exchange"). The 1994,
1995 and 1996 consolidated financial statements include the accounts of Team
Rental Group, Inc., its wholly owned subsidiaries and MCK. All significant
intercompany accounts have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management of the Company to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments including money market
funds, commercial paper and time deposits purchased with an original maturity of
three months or less to be cash equivalents.

Restricted Cash

Restricted cash consists of Medium Term Notes proceeds not currently
invested in eligible revenue earning vehicles. Under the terms of the Medium
Term Notes Indentures, the Company is required to purchase revenue earning
vehicles with the proceeds or maintain the excess as restricted cash.

Vehicle Inventory

Vehicle inventory is stated at the lower of cost (determined based on
specific identification) or market.

F-8
<PAGE> 98

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

Revenue Earning Vehicles

Revenue earning vehicles are stated at cost less related discounts and
manufacturers' incentives and are depreciated over their estimated economic
lives or at rates corresponding to manufacturers' repurchase program guidelines,
where applicable. Depreciation rates generally range from 1.0% to 2.5% per
month. Management periodically reviews depreciable lives and rates based on a
variety of factors including general economic conditions and estimated holding
periods of the vehicles. Gains and losses upon the sale of revenue earning
vehicles are recorded as an adjustment to depreciation expense.

Property and Equipment

Property and equipment is recorded at cost. Depreciation is being provided
on the straight-line method over the following estimated useful lives:

<TABLE>
<S> <C>
Buildings................................ 10-23 years
Equipment, furniture and fixtures........ 3-10 years
Capital leases and leasehold
improvements........................... Lesser of estimated useful lives or terms
of related leases
</TABLE>

Deferred Financing Fees

Direct costs incurred in connection with the Company's borrowings have been
deferred and are being amortized over the terms of the related loan agreements
on the straight-line method.

On July 9, 1996, the Company utilized proceeds from its public offering of
Class A common stock to repay a $10,000 bridge financing facility it had
obtained from a bank in the second quarter of 1996. In conjunction with this
bank financing, the Company issued warrants valued at $700, which are included
in additional paid-in capital, and paid additional fees of approximately $1,000.
As a result of this repayment, the Company wrote off all unamortized fees
related to this financing, totaling $1,275.

Prepaid Royalty Fees

Prepaid royalty fees of $1,217 and $739 (net of accumulated amortization of
$783 and $1,261) at December 31, 1995 and 1996, respectively, are related to the
abatement of fees at the Company's Philadelphia operations through June 15, 1999
and are recorded in other assets. The prepaid fees are being amortized using an
accelerated method over the royalty abatement period of five years. Amortization
of the prepaid royalty fees of $203, $580 and $478 is reflected in direct
vehicle and operating expenses in the accompanying consolidated statements of
income for the years ended December 31, 1994, 1995 and 1996, respectively.

Franchise Rights

Franchise agreements are renewable for an unlimited number of one- and
five-year periods, subject to certain terms and conditions. Fees paid for
franchise rights are capitalized and amortized using the straight-line method
over forty years. The Company believes that the vehicle rental industry and,
therefore, vehicle rental franchises have an expected life in excess of forty
years and the industry will continue as long as the automobile is an accepted
method of transportation. The specific markets the Company serves are considered
to be stable and are locations which are major national or regional commercial
centers that attract business and leisure travelers who need rental vehicles.
Circumstances that would indicate possible impairment to franchise rights
include the failure of BRACC to maintain its international network of rental car
franchises, the termination of the Company's presence in one or more major
airport markets, or a significant permanent decline in cash flows from rental

F-9
<PAGE> 99

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

operations. The impairment would be measured as the amount by which the carrying
value of the related asset exceeds the present value of estimated future annual
cash flows generated by the franchise operations utilizing an appropriate
discount rate. Management has determined that no material impairment of
franchise rights existed at December 31, 1995 or 1996.

Other Intangible Assets

Other intangible assets consists of the goodwill recorded related to the
ValCar acquisition (see Note 3). Goodwill is amortized using the straight-line
method over forty years. Amortization expense of $35 is reflected in the
accompanying consolidated statement of income for the year ended December 31,
1996. The Company evaluates the realizability of its goodwill based upon the
nondiscounted cash flows and operating income expected to be generated by the
assets purchased in the acquisition giving rise to the goodwill. Any impairment
would be measured as the amount by which the carrying value of the goodwill
exceeds the present value of estimated future annual cash flows generated by the
assets purchased utilizing an appropriate discount rate. Management has
determined that no material impairment of goodwill existed at December 31, 1996.

Advertising, Promotion and Selling

Advertising, promotion and selling expense are charged to expense as
incurred. The Company incurred advertising expense of $412, $2,347 and $6,912 in
1994, 1995 and 1996, respectively.

Income Taxes

The Company accounts for income taxes using an asset and liability approach
that requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in the
Company's financial statements or tax returns. In estimating future tax
consequences, the Company generally considers all expected future events other
than enactments of changes in the tax law or rates. Changes in tax laws or rates
will be recognized in the future years in which they occur.

Earnings Per Common and Common Equivalent Share

Earnings per common and common equivalent share for the year ended December
31, 1994, was computed assuming all of the outstanding common stock of the
combined companies (which totaled 2,500,000 shares) was outstanding the entire
year and the shares issued in connection with the initial public offering and
the Fort Wayne acquisition were outstanding from the dates issued. Earnings per
common and common equivalent share for the years ended December 31, 1995 and
1996, were based on the weighted average number of common shares outstanding
during the year considering the acquisitions in each respective year and the
purchase of treasury stock.

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No.
128"). SFAS No. 128 establishes new standards for computing and presenting
earnings per share ("EPS"). Specifically, SFAS No. 128 replaces the presentation
of primary EPS with a presentation of basic EPS, requires dual presentation of
basic and diluted EPS on the face of the income statement for all entities with
complex capital structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and denominator of the
diluted EPS computation. SFAS No. 128 is effective for financial statements
issued for periods ending after December 15, 1997; earlier application is not
permitted. Management has determined that the adoption of SFAS No. 128 will not
have a material effect on the accompanying consolidated financial statements.

F-10
<PAGE> 100

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

Retention of Self Insured Risks

At December 31, 1996, the Company has automobile liability insurance
coverage of up to $6,000, with a $500 retention per occurrence with respect to
personal injury and damage claims arising from the use of its vehicles, except
with respect to vehicles rented through its Los Angeles, San Diego and Phoenix
operations. Under California law, vehicle rental customers are primarily liable
for damages arising from the use of rental vehicles. Vehicle rental companies
are secondarily liable for such damages up to an amount limited by California
law to $35 per occurrence, unless the vehicle rental company has negligently
maintained the vehicle or has "negligently entrusted" the vehicle to a rental
customer. In addition, a vehicle rental company can be held liable for damages
arising from use of its vehicles by its employees. The Company's Phoenix
operations are self-insured, with a $500 retention. The Company's workers
compensation coverage is subject to a $500 retention. The Company's general
liability coverage is $1,000 per occurrence, $2,000 aggregate coverage with no
retention.

The Company provides reserves on reported claims and claims incurred but
not reported at each balance sheet date based on actuarial estimates. The
actuarially determined reserves are necessarily based on estimates, and while
management believes that the amounts are adequate, the ultimate liability may be
in excess of, or less than, the amounts provided. Such estimates are reviewed
and evaluated in light of claim experience and existing circumstances. Any
changes in estimates from this review process are reflected in operations
currently.

Environmental Costs

The Company's operations include the storage and dispensing of gasoline.
Expenses in connection with the remediation of accidental fuel discharges at
various locations are provided for when it is probable that obligations have
been incurred and amounts can be reasonably estimated. The Company has made no
material payments for environmental remediation that have not been reimbursed by
responsible parties.

Stock Options

In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, Accounting for Stock-Based Compensation ("SFAS No. 123"), which encourages,
but does not require, companies to adopt the fair value based method of
accounting for stock-based employee compensation plans. Under the fair value
method, compensation cost is measured at the grant date based on the fair value
of the award and is recognized over the service period, which is usually the
vesting period. Companies are also permitted to continue to account for such
transactions under Accounting Principles Board ("APB") Opinion No. 25, but are
required to disclose on a pro forma basis, net income and, if presented,
earnings per share, as if the fair value based method of accounting had been
applied.

Effective January 1, 1996, the Company elected to adopt only the disclosure
requirements of SFAS No. 123. Accordingly, the Company will continue to account
for stock based employee compensation under APB Opinion No. 25.

2. PUBLIC STOCK OFFERINGS

The Company sold 3,300,000 shares of Class A common stock on August 25,
1994 and 154,400 shares of Class A common stock on September 19, 1994 at $9.50
per share to investors in an initial public offering resulting in gross proceeds
of $32,800 to the Company. Net proceeds to the Company after offering expenses
were $28,948. The net proceeds were used to acquire certain assets (certain
liabilities were also assumed) of Freedom River, Inc. ("Freedom River"),
capitalize Team Fleet Finance Corporation ("TFFC"), a wholly owned subsidiary,
acquire vehicles under operating leases, redeem the outstanding redeemable
preferred stock, acquire

F-11
<PAGE> 101

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

the Budget Rent a Truck franchise rights for San Diego, California, repay loans
and accrued interest to related and non-related third parties, and purchase
equipment leased from related parties.

The Company sold an additional 3,821,007 shares of Class A common stock on
July 2, 1996 at $13.00 per share to investors in a public offering resulting in
gross proceeds of $49,673 to the Company. Net proceeds to the Company after
offering expenses were $44,440. The net proceeds were used to repay certain
outstanding indebtedness and for general corporate purposes.

3. ACQUISITIONS

During 1994, 1995 and 1996, the Company acquired certain Budget franchise
operations, a retail vehicle sales operation and a commuter van pooling
operation. The acquisitions have been accounted for under the purchase method of
accounting and, accordingly, the Company has allocated the cost of the
acquisitions on the basis of the estimated fair value of the assets acquired and
liabilities assumed. The 1996 allocation for the ValCar Acquisition, as further
discussed below, is based on a preliminary estimate related to litigation claims
and may be revised at a later date. The accompanying consolidated statements of
income and cash flows reflect the operations of the acquired companies from
their respective acquisition dates.

1994 ACQUISITIONS

Freedom River

Concurrent with the initial public offering, the Company acquired certain
assets and assumed certain operating liabilities of Freedom River from Chrysler
Credit Corporation ("CCC"), a secured creditor of Freedom River, pursuant to a
private foreclosure sale conducted by CCC. The assets acquired consisted of the
Budget vehicle rental operations in the Philadelphia and Pittsburgh,
Pennsylvania and Cincinnati, Ohio metropolitan areas. Substantially all of
Freedom River's assets, other than its fleet, were purchased for approximately
$10,600.

Fort Wayne Franchise

In November 1994, the Company exchanged 18,500 shares of Class A common
stock for all of the outstanding common stock of Fort Wayne Rental Group, Inc.
located in Fort Wayne, Indiana. A principal stockholder and director of the
Company, who was a stockholder of Fort Wayne Rental Group, Inc., received 7,400
shares of Class A common stock in this transaction.

1995 ACQUISITIONS

Dayton Franchise

In January 1995, the Company purchased all of the outstanding stock of Don
Kremer, Inc. located in Dayton, Ohio, for $1,300. The acquisition funding
consisted of $650 cash and two notes totaling $650.

Charlotte Franchise

In January 1995, the Company purchased all of the outstanding stock of
MacKay Car & Truck Rentals, Inc., located in Charlotte, North Carolina, for
approximately $8,405, consisting of cash of $8,277 and 13,483 shares of Class A
common stock.

Hartford Franchise

In March 1995, the Company purchased all of the outstanding stock of Rental
Car Resources, Inc., located in Hartford, Connecticut, for approximately $1,475
by issuing 157,333 shares of Class A common stock.

F-12
<PAGE> 102

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

BRAC-OPCO Franchise

In October 1995, the Company purchased all of the outstanding stock of
BRAC-OPCO, Inc., which operates Budget franchises in the greater Los Angeles
area, excluding the vehicle rental operations at Los Angeles International
Airport, for approximately $11,234 by issuing 1,050,000 shares of Class A common
stock.

1996 ACQUISITIONS

Van Pool Operations

In February 1996, the Company purchased for a nominal amount all of the
outstanding stock of VPSI, Inc. ("VPSI"), located in Detroit, Michigan. VPSI
provides commuter van pooling services to business commuters in 22 states, and
operated a rental fleet of approximately 3,400 vans as of December 31, 1996.

Phoenix Franchise

In March 1996, the Company purchased all of the outstanding stock of
Arizona Rent-A-Car Systems, Inc., located in Phoenix, Arizona, for approximately
$18,000, consisting of cash of $5,000, promissory notes of $10,000 and 272,727
shares of Class A common stock.

ValCar Rental Car Sales, Inc.

On August 1, 1996, the Company acquired all of the outstanding stock of
ValCar Rental Car Sales, Inc. for $400 cash. ValCar owns and operates four
retail vehicle sales facilities in Indianapolis, Indiana, and was formerly owned
by a director and officer of the Company.

If the 1995 and 1996 acquisitions had occurred at the beginning of 1995,
the Company's results of operations would have been as shown in the following
table. The unaudited pro forma results are not necessarily indicative of the
actual results of operations that would have occurred had the acquisitions
actually been made at the beginning of 1995.

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------------
1995 1996
--------- ---------
(UNAUDITED)
<S> <C> <C>
Operating revenue........................................... $ 337,926 $ 389,557
Net income.................................................. $ 3,512 $ 2,961
Earnings per common share................................... $ 0.46 $ 0.31
</TABLE>

4. REVENUE EARNING VEHICLES

Revenue earning vehicles consist of the following at December 31:

<TABLE>
<CAPTION>
1995 1996
-------- --------
<S> <C> <C>
Revenue earning vehicles.................................... $245,849 $335,461
Less -- accumulated depreciation and amortization........... (25,922) (16,204)
-------- --------
$219,927 $319,257
======== ========
</TABLE>

F-13
<PAGE> 103

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

5. PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31:

<TABLE>
<CAPTION>
1995 1996
------- --------
<S> <C> <C>
Land and buildings.......................................... $10,160 $ 13,729
Leasehold improvements...................................... 3,994 7,379
Furniture, fixtures and office equipment.................... 7,069 13,167
------- --------
21,223 34,275
Less -- accumulated depreciation and amortization........... (8,720) (15,773)
------- --------
$12,503 $ 18,502
======= ========
</TABLE>

Included in property and equipment at December 31, 1995 and 1996, are $827
and $580, respectively, of assets held under capital leases.

6. NOTES PAYABLE

Notes payable consist of the following at December 31:

<TABLE>
<CAPTION>
1995 1996
-------- --------
<S> <C> <C>
Medium term notes:
Senior.................................................... $138,500 $304,500
Subordinated.............................................. 7,182 17,182
Convertible subordinated notes.............................. -- 80,000
Vehicle obligations......................................... 149,965 38,438
Working capital facilities.................................. 9,500 --
Related party obligations................................... 5,792 892
Other notes payable......................................... 7,294 13,097
-------- --------
$318,233 $454,109
======== ========
</TABLE>

Medium Term Notes

Medium term notes are comprised of notes issued by TFFC in August 1994
("TFFC-94 notes"), notes assumed in the acquisition of BRAC-OPCO, Inc. in
October 1995 ("OPCO notes") and notes issued by TFFC in December 1996 ("TFFC-96
notes")(collectively, "MTN notes"). MTN notes are secured by the underlying
vehicles and restricted cash of $66,336 at December 31, 1996.

The TFFC-94 notes consist of senior notes and subordinated notes. The
senior notes, with an aggregate principal balance of $100,000 at December 31,
1995 and 1996, bear interest at an average LIBOR rate, as defined, plus 0.75%
(6.38% per annum at December 31, 1996). Monthly principal payments of $16,667
commence in June 1999 with the last payment due in November 1999. The
subordinated notes, with an aggregate principal balance of $5,682 at December
31, 1995 and 1996, bear interest at an average LIBOR rate, as defined, plus
1.30% (6.93% per annum at December 31, 1996) and are payable in full in December
1999. Interest on the TFFC-94 notes is payable monthly.

The OPCO notes consist of senior notes and subordinated notes. The senior
notes, with an aggregate principal balance of $38,500 at December 31, 1995 and
1996, bear interest at an average LIBOR rate, as defined, plus 0.60% (6.23% per
annum at December 31, 1996). Monthly principal payments of $4,812 commence in
November 1997 with the last payment due in June 1998. The subordinated notes,
with an aggregate principal

F-14
<PAGE> 104

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

balance of $1,500 at December 31, 1995 and 1996, bear interest at an average
LIBOR rate, as defined, plus 1.0% (6.63% per annum at December 31, 1996) and are
payable in full in December 1998. Interest on the OPCO notes is payable monthly.

The TFFC-96 notes consist of senior notes and subordinated notes. The
senior notes, with an aggregate principal balance of $166,000 at December 31,
1996, bear interest at 6.65% per annum. Monthly principal payments of $13,833
commence in 2001 with the last payment due in 2002. The subordinated notes, with
an aggregate principal balance of $10,000 at December 31, 1996, bear interest at
7.10% per annum and are payable in full in 2002. Interest on the TFFC-96 notes
is payable monthly.

Convertible Subordinated Notes

In December 1996, the Company issued convertible subordinated notes with an
aggregate principal amount of $80,000 bearing interest at 7% per annum due 2003.
At a conversion price of $20.07, the convertible subordinated notes are
convertible into 3,986,049 shares of Class A Common Stock. See Note 16.

Vehicle Obligations

Vehicle obligations consist of outstanding lines of credit to purchase
rental vehicles and retail car sales inventory. Collateralized lines of credit
at December 31, 1996, consist of $203,000 for rental vehicles and $26,000 for
retail car sales inventory with maturity dates ranging from April 1997 to May
1998. Vehicle obligations are collateralized by revenue earning vehicles
financed under these credit facilities and proceeds from the sale, lease or
rental of rental vehicles and retail car sales inventory.

In November 1996, Team Fleet Services Corporation ("TFSC") and VPSI, wholly
owned subsidiaries of the Company, entered into Revolving Credit Agreements with
NationsBank, National Association (South), as Agent (the "Agent") for the
lenders party thereto, providing for up to $100,000 and $50,000, respectively,
of financing for the acquisition of program vehicles (the "Revolving Credit
Facilities"). The interest rates of loans under the Revolving Credit Facilities
are, at the option of TFSC and VPSI and up to certain amounts, based on the
Agent's prime rate, LIBOR or CD rates. The weighted average interest rate of
loans outstanding under the Revolving Credit Facilities at December 31, 1996,
was 7.125%.

Monthly payments of interest are required on obligations relating to
vehicle inventory at prime plus .25% (8.50% per annum at December 31, 1996).
Vehicle inventory obligations are paid when the inventory is sold but in no
event later than 120 days after the date of purchase.

Working Capital Facilities

At December 31, 1996, the Company had an unutilized working capital
facility of $10,000, which requires monthly interest payments on the outstanding
balance at LIBOR plus 2.50% (8.125% at December 31, 1996). This facility, which
expires in April 1997, is collateralized by accounts receivable, vehicle
inventory, property and equipment, certain intangibles, investments and all
other personal property of the Company and guarantees of certain subsidiaries.
This agreement is subject to certain covenants, the most restrictive of which
requires the

F-15
<PAGE> 105

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

Company to maintain certain financial ratios and minimum tangible net worth and
prohibits the payment of cash dividends. At December 31, 1996, the Company was
in compliance with all covenants.

Future principal payments of notes payable at December 31, 1996 are as
follows:

<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31, AMOUNT
- ------------ --------
<S> <C>
1997........................................................ $ 61,906
1998........................................................ 30,376
1999........................................................ 105,682
2000........................................................ 145
2001........................................................ 110,667
Thereafter.................................................. 145,333
--------
$454,109
========
</TABLE>

7. RELATED PARTY TRANSACTIONS

The Company leases facilities from entities owned by certain stockholders.
Operating lease payments for the years ended December 31, 1994, 1995 and 1996,
were $196, $220 and $227, respectively. MCK has assigned lease payments from the
Company to a bank.

Prior to the acquisition of the Fort Wayne operations (see Note 3), the
Company leased fleet vehicles to Fort Wayne Rental Group, Inc. for approximately
$366 for the year ended December 31, 1994.

At December 31, 1995 and 1996, the Company had non-interest bearing notes
receivable totaling $61 and $58 due from a stockholder and director which are
payable on demand. Additionally, at December 31, 1996, the Company had a payable
to a stockholder and director in the amount of $1,500 which is included in
accrued and other liabilities on the accompanying consolidated balance sheet.
The outstanding balance bears interest at prime plus 2.0% (10.25% per annum at
December 31, 1996), is unsecured and is payable on demand.

Approximately $564 and $4,013 of cash and cash equivalents are on deposit
with or are being held as agent for the Company by a bank at December 31, 1995
and 1996, respectively. A stockholder and director of the Company serves on the
bank's board of directors.

In connection with the Los Angeles acquisition, the Company entered into a
franchise agreement with the seller to pay a royalty of 5% of the monthly gross
revenues derived from those operations, as well as the Company's San Diego
operations. A director of the Company is the Chief Executive Officer and a
general partner of the seller. In 1996, the Company paid the seller
approximately $3,700 in royalty fees in accordance with this agreement.

8. LEASES

The Company leases certain revenue earning vehicles and facilities under
leases that expire at various dates through May 2014. Generally, the facility
leases are subject to payment increases based on cost of living indices and
require the Company to pay taxes, maintenance, insurance and certain other
operating expenses. Certain facility leases require the Company to pay fixed
amounts plus contingent rentals based on gross rental revenues, as defined, and
gasoline sales.

F-16
<PAGE> 106

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

Future minimum payments under noncancellable leases at December 31, 1996
are as follows:

<TABLE>
<CAPTION>
YEAR ENDING CAPITAL OPERATING
DECEMBER 31, LEASES LEASES
------------ ------- ---------
<S> <C> <C>
1997...................................................... $ 210 $10,935
1998...................................................... 172 8,654
1999...................................................... 167 7,704
2000...................................................... 137 5,934
2001...................................................... 3 2,549
Thereafter................................................ -- 9,208
----- -------
$ 689 $44,984
=======
Less -- amounts representing interest..................... (109)
-----
$ 580
=====
</TABLE>

Rent expense consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1994 1995 1996
------ ------- --------
<S> <C> <C> <C>
Revenue earning vehicles................................... $3,121 $ 1,518 $ 1,555
Facilities:
Minimum rentals.......................................... 1,990 5,914 14,422
Contingent rentals....................................... 1,923 3,502 3,353
------ ------- --------
Total............................................ $7,034 $10,934 $ 19,330
====== ======= ========
</TABLE>

9. INCOME TAXES

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1994 1995 1996
----- ----- -------
<S> <C> <C> <C>
Current:
Federal................................................... $184 $ -- $ 92
State..................................................... -- 145 750
Deferred:
Federal................................................... (23) 470 2,161
State..................................................... 15 70 318
---- ---- ------
$176 $685 $3,321
==== ==== ======
</TABLE>

F-17
<PAGE> 107

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

The provision for income taxes differs from the amount computed using the
statutory federal income tax rate as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1994 1995 1996
----- ----- -------
<S> <C> <C> <C>
Income tax provision at federal statutory rate.............. $130 $348 $2,658
Effect of (earnings) losses of nontaxable (subchapter S)
companies................................................. 645 -- (87)
Nondeductible portion of amortization of franchise rights
and goodwill.............................................. 12 94 306
State tax provision, net of federal benefit................. 30 215 391
Benefit of net operating loss carryforwards................. (645) -- --
Other....................................................... 4 28 53
---- ---- ------
$176 $685 $3,321
==== ==== ======
</TABLE>

The tax effects of temporary differences that give rise to the Company's
deferred tax assets and liabilities are as follows at December 31:

<TABLE>
<CAPTION>
1995 1996
------- -------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards.......................... $13,195 $16,846
Non-deductible reserves................................... 2,267 5,459
Alternative minimum tax carryforward...................... 197 966
Valuation allowance....................................... (7,378) (9,515)
------- -------
8,281 13,756
------- -------
Deferred tax liabilities:
Difference between book and tax bases of revenue earning
vehicles and property and equipment.................... 8,690 19,327
Franchise rights.......................................... 1,292 1,835
------- -------
9,982 21,162
------- -------
Net deferred tax liability................................ $ 1,701 $ 7,406
======= =======
</TABLE>

Concurrent with the Share Exchange in 1994, the nontaxable status of the
commonly owned companies was terminated and a deferred tax liability of
approximately $1,169 was recorded with a corresponding charge to the accumulated
deficit.

At December 31, 1996, the Company and its subsidiaries have federal tax
loss carryforwards of approximately $43,360 expiring between December 2005 and
December 2011. The Company has recorded a valuation allowance for a portion of
the acquired net operating loss carryforwards due to the uncertainty of their
ultimate realization. Any subsequently recognized tax benefits attributed to the
change in the valuation allowance will reduce franchise rights. The increase in
the valuation allowance during 1996 resulted from an increase related to net
operating loss carryforwards and uncertainty regarding their ultimate
realization.

The Internal Revenue Code places limitations on the utilization of net
operating losses and similar tax attributes by a corporation in the event of a
stock ownership change aggregating more than 50% over a specified time period.
Net operating loss carryforwards in existence when ownership changes occur are
subject to an annual utilization limitation that may restrict the future
utilization of the net operating losses. Similarly, utilization of losses
generated during years when separate returns have been filed may be limited in
the future. Such limitations have been considered in the determination of
deferred income taxes.

F-18
<PAGE> 108

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

10. BENEFIT PLANS

Stock Options

On April 25, 1994, the Company adopted the 1994 Incentive Stock Option Plan
(the "ISO Plan") and the 1994 Directors' Stock Option Plan (the "Directors'
Plan"). The Company accounts for these plans under APB Opinion No. 25 under
which no compensation cost has been recognized. Had compensation cost been
determined consistent with SFAS No. 123, the Company's net income and EPS would
have been reduced to the following unaudited pro forma amounts:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
------------------
1995 1996
------- -------
<S> <C> <C> <C>
Net Income........................ As Reported....................... $ 377 $4,497
Pro Forma......................... (36) 3,375
Primary Earnings Per
Common and Common
Equivalent Share................ As Reported....................... 0.05 0.47
Pro Forma......................... (0.01) 0.36
</TABLE>

Because the SFAS No. 123 method of accounting has only been applied to
options granted in 1995 and 1996, the resulting pro forma compensation cost may
not be representative of that to be expected in future years.

The ISO Plan provides for the issuance of up to 760,000 shares of Class A
or Class B common stock to key employees. The ISO Plan stock options may be
either incentive stock options or nonqualified options and expire ten years
after the date of grant. The exercise price of incentive stock options may not
be less than the fair market value of the underlying shares at the date of
grant. The exercise price for nonqualified options may not be less than 85% of
the fair market value of the underlying shares or, if greater, the book value of
the underlying shares at the date of grant.

The Directors' Plan provides for the issuance of shares of Class A common
stock to directors of the Company who are not employees of the Company. The
Directors' Plan stock options are nonqualified, vest six months following the
date of grant and expire ten years after the date of grant. The exercise price
of the nonqualified options under the Directors' Plan is the fair market value
of the underlying shares at the date of grant.

A summary of the status of the Company's two stock option plans at December
31, 1995 and 1996, and activity during the years then ended is presented in the
table and narrative below:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
SHARES EXERCISE PRICE
------- ----------------
<S> <C> <C>
Outstanding -- December 31, 1994............................ 15,000 $ 9.50
Granted................................................... 202,000 9.50
-------
Outstanding -- December 31, 1995............................ 217,000 9.50
Granted................................................... 547,650 11.70
Exercised................................................. (6,200) 9.50
Forfeited................................................. (8,600) 11.13
-------
Outstanding -- December 31, 1996............................ 749,850 11.09
=======
</TABLE>

As of December 31, 1996, options for 585,850 shares and 164,000 shares of
Class A and Class B common stock, respectively, remained outstanding under the
Company's stock option plans.

F-19
<PAGE> 109

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
1995 1996
------ -------
<S> <C> <C>
Exercisable at end of year --
Shares.................................................... 15,000 247,700
Weighted average exercise price........................... $9.50 $9.76
Weighted average fair value of options granted during the
year...................................................... $4.52 $5.48
</TABLE>

At December 31, 1996, 62,500 of the 749,850 options outstanding have
exercise prices between $9.50 and $11.25 with a weighted average exercise price
of $10.55 and a weighted average remaining contractual life of 8.8 years. All of
these options are exercisable. The remaining 687,350 options have exercise
prices between $9.50 and $17.50, with a weighted average exercise price of
$11.14 and a weighted average remaining contractual life of 9.0 years. Of these
options, 185,200 are exercisable; their weighted average exercise price is
$9.50.

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model. For options granted under the ISO Plan,
a risk-free rate of return of 6.21% and an expected life of three years were
assumed. For options granted under the Directors' Plan, a risk free rate of
return of 6.49% and an expected life of seven years were assumed. Additionally,
for each option plan there was no expected dividend yield and an expected
volatility of 60%.

Profit Sharing Plan

The Company adopted a Profit Sharing Plan with a 401(k) arrangement under
the Internal Revenue Code effective January 1, 1996. Employees are eligible to
participate after completing one year of service and attaining age 21.
Participants may contribute 1%-15% of their gross compensation. The Company may
make discretionary contributions not to exceed 15% of the total plan
compensation. During 1996, the Company made discretionary contributions of
approximately $146.5 to the Profit Sharing Plan.

11. COMMON STOCK WARRANT

Concurrently with the Freedom River acquisition and in consideration of the
abatement of certain future royalty fees to BRACC with respect to Freedom
River's Philadelphia vehicle rental operation and other consideration received
from BRACC, the Company issued a warrant to BRACC (the "Common Stock Warrant")
to purchase 175,000 shares of Class A common stock at the initial public
offering price. The warrant became exercisable on August 24, 1996, and expires
on August 24, 1999. Subsequent to August 24, 1998, and prior to August 24, 1999,
BRACC will have the right to cause the Company to repurchase the Common Stock
Warrant for $2,000. The Company has reserved Class A common stock for the Common
Stock Warrant.

12. COMMITMENTS AND CONTINGENCIES

Franchise Agreements

The Company has various franchise agreements with BRACC which require the
payment of monthly royalty fees. These fees vary from a flat fee of $13.25 per
car to 7.5% of gross rental revenues, as defined in the franchise agreements.
The above franchise agreements are renewable for an unlimited number of
five-year periods, subject to certain terms and conditions.

Concurrent with the initial public offering, the Company purchased for
$1,750 the direct franchise rights for Budget Rent a Truck facilities to operate
in certain geographic locations in San Diego County and Imperial County,
California. This reduced substantially all truck rental royalty fees to 5% of
gross rental revenues, as defined. Prior to the purchase of the direct franchise
rights, the Company paid royalty fees of 12% of gross rental revenue.

F-20
<PAGE> 110

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

The Company also participates in a "One-Way" truck rental program in San
Diego County and Imperial County, California sponsored by BRACC whereby trucks
owned by BRACC are stationed at the Company's facilities for one-way rental by
outside parties. The Company retains fees for Budget "One Way" truck rental
revenue of 20%. Revenues from the "One-Way" truck rental program for the years
ended December 31, 1994, 1995 and 1996 were $558, $1,027, and $1,451,
respectively.

Sublicense Agreements

The Company has sublicense agreements with Budget of Southern California
which entitles the Company to operate Budget Car Rental facilities in Southern
California. Sublicense fees to Budget of Southern California range from 5% to
6.5% of gross revenues as defined in the sublicense agreements.

The Company also has a sublicense agreement with Transportation Storage
Associates ("TSA") for the right to rent trucks in and around Los Angeles
County. Fees to TSA are 12% of gross revenues as defined in the sublicense
agreement.

Royalty and sublicense fees expensed by the Company for the years ended
December 31, 1994, 1995 and 1996 were $2,348, $5,715 and $9,598, respectively.
Budget reservation fees expensed by the Company for the years ended December 31,
1994, 1995 and 1996 were $1,574, $3,904 and $6,375, respectively.

Regulatory and Environmental Matters

The Company is subject to various federal, state and local laws and
regulations that affect its operations, including those relating to the sale of
loss damage waivers, vicarious liability of vehicle owners, consumer protection,
advertising, used vehicle sales, the taxing and licensing of vehicles,
franchising operations and sales, and environmental protection and clean-up.

The Company maintains an environmental compliance program designed to
maintain compliance with applicable technical and operational requirements,
including periodic integrity testing of underground storage tanks and providing
financial assurance for remediation of spills or releases. The Company believes
that its operations currently are in compliance, in all material respects, with
such regulatory requirements. However, there are several technical
specifications regarding underground storage tanks applicable to the Company's
facilities, many of which will become effective in 1998. Although the exact cost
of complying with those requirements has not been estimated, such expenditures
could, in the aggregate, be significant.

Litigation

The Company has contingencies with respect to litigation arising in the
ordinary course of business. In the opinion of management, such litigation will
not result in any loss which would materially affect the financial position or
results of operations of the Company.

13. FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
Disclosure about Fair Value of Financial Instruments. The estimated fair value
amounts are determined by the Company, using available market information and
appropriate valuation methodologies. However, considerable judgment is required
in interpreting market data to develop the estimates of fair value. Accordingly,
the estimates presented herein are not necessarily indicative of the amounts the
Company could realize in a current market exchange. The use of different market
assumptions and/or estimation methodologies may have a material effect on the
estimated fair value amount.

F-21
<PAGE> 111

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

Cash and Cash Equivalents, Restricted Cash, Receivables and Accounts Payable

The carrying amounts of these financial assets and liabilities at December
31, 1995 and 1996, approximate fair value because of the short maturity of these
instruments.

Notes Payable

The carrying amount of a portion of the Company's notes payable
approximates fair value at December 31, 1995 and 1996, since the debt is at
floating interest rates. The carrying amount of the Company's fixed-rate notes
payable approximates fair value at December 31, 1996, due to the recent issuance
of such debt.

Common Stock Warrant

The estimated fair value is based on a pricing model which considers stock
volatility and the put feature of the Common Stock Warrant. The estimated fair
value was $1,750 at December 31, 1996.

14. SUPPLEMENTAL CASH FLOW DISCLOSURES

In 1996, the Company issued approximately 272,727 shares of Class A common
stock with a value of $2,727 and notes payable of $10,000 for the 1996
acquisitions. The Company issued approximately 1,220,816 shares of Class A
common stock with a value of $12,837 and notes payable of $650 for the 1995
acquisitions.

In 1994, $525 of revenue earning vehicles and property and equipment were
financed through capital leases. The terms of a capital lease with certain
stockholders and a director were modified and, therefore, the capital lease
asset and obligation of $536 were eliminated. The net book value of the facility
lease and capital lease obligation of $536 was deducted from proceeds from the
sale of property and equipment and principal payments of capital lease
obligations, respectively. The Company also issued $200 of Class A common stock
to acquire the Fort Wayne franchise. In addition, property and equipment of
$4,441 were acquired and notes payable of $4,016 were assumed in connection with
the Freedom River acquisition.

In 1994, the Company recorded prepaid royalty fees and the Common Stock
Warrant of $2,000 for the abatement of certain fees (see Note 11).

The Company paid interest of $4,091, $13,764 and $26,955 in 1994, 1995 and
1996, respectively.

Income taxes of $182, $346 and $1,017 were paid in 1994, 1995 and 1996,
respectively.

15. SEGMENT INFORMATION

The Company is engaged in the business of the daily rental of vehicles,
principally cars, trucks, and passenger vans, and the retail sale of used
vehicles. Segment information for the year ended December 31, 1996, is as
follows:

<TABLE>
<CAPTION>
RETAIL VEHICLE VEHICLE
SALES RENTAL CONSOLIDATED
-------------- -------- ------------
<S> <C> <C> <C>
Sales to unaffiliated customers..................... $134,120 $223,250 $357,370
Depreciation and amortization....................... 1,482 63,685 65,167
Operating income.................................... 1,857 33,410 35,267
Income before provision for income taxes............ 409 7,409 7,818
Identifiable assets................................. 48,885 538,338 587,223
Capital expenditures -- revenue earning vehicles.... -- 517,079 517,079
</TABLE>

F-22
<PAGE> 112

TEAM RENTAL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1996
(DOLLAR AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)

Segment information for the year ended December 31, 1995, is as follows:

<TABLE>
<CAPTION>
RETAIL VEHICLE VEHICLE
SALES RENTAL CONSOLIDATED
-------------- -------- ------------
<S> <C> <C> <C>
Sales to unaffiliated customers..................... $42,662 $107,067 $149,729
Depreciation and amortization....................... 193 29,483 29,676
Operating income.................................... 1,254 12,926 14,180
Income (loss) before provision for income taxes..... 1,869 (847) 1,022
Identifiable assets................................. 30,195 356,128 386,323
Capital expenditures -- revenue earning vehicles.... -- 315,863 315,863
</TABLE>

The Company operated in only the rental segment for the year ended December
31, 1994.

16. SUBSEQUENT EVENT

On January 13, 1997, the Company entered into stock purchase agreements
(the "Stock Purchase Agreements") with Ford Motor Company ("Ford"), BRACC and
the other stockholder of BRACC, pursuant to which the Company agreed to acquire
the capital stock of BRACC. The total amount of funds required by the Company to
consummate this acquisition (the "Budget Acquisition") is expected to be
approximately $275,000, which the Company intends to finance through the sale of
additional shares of Class A common stock and the issuance of senior and
convertible debt. The Company will also issue to Ford 4,500 shares of a new
series of non-voting preferred stock, which does not carry a dividend and will
be convertible into 4,500,000 shares of Class A common stock, subject to
adjustment in certain cases. Concurrent with the Budget Acquisition, the Company
will be required to refinance certain outstanding indebtedness of BRACC under
its existing fleet financing facilities with an aggregate principal balance of
$714,104 at December 31, 1996.

In connection with the financing of the Budget Acquisition, the Company may
extend the maturity of the Convertible Subordinated Notes (see Note 6) to 2007.

F-23
<PAGE> 113

INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors of
Budget Rent a Car Corporation:

We have audited the accompanying consolidated balance sheets of Budget Rent
a Car Corporation and subsidiaries as of December 31, 1995 and 1996 and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1996.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
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, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Budget Rent
a Car Corporation and subsidiaries as of December 31, 1995 and 1996 and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1996 in conformity with generally accepted
accounting principles.

KPMG Peat Marwick LLP

Chicago, Illinois
February 18, 1997

F-24
<PAGE> 114

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
1995 1996
---------- ----------
IN THOUSANDS EXCEPT SHARE
DATA)
<S> <C> <C>
ASSETS
Cash and cash equivalents................................... $ 95,872 $ 59,547
Receivables:
Vehicle rental and sales, less allowance of $29,133 in
1995 and $36,271 in 1996................................ 90,707 79,296
Royalty fees and other amounts due from franchisees, less
allowance of $9,000 in 1995 and $5,458 in 1996.......... 38,186 31,656
Installment notes, $617 in 1995 and $835 in 1996, due
within one year......................................... 6,758 8,071
Vehicle related programs -- Ford.......................... 89,283 67,192
Vehicle related programs -- other......................... 5,292 2,155
Other..................................................... 10,806 14,193
---------- ----------
241,032 202,563
Prepaid expenses and taxes, inventories and deposits........ 53,452 50,146
Vehicles held for sale...................................... 11,756 14,299
Vehicles, at cost........................................... 1,498,060 1,449,476
Less accumulated depreciation............................. (144,071) (145,501)
---------- ----------
1,353,989 1,303,975
Property and equipment, at cost:
Land...................................................... 31,990 32,652
Buildings and leasehold improvements...................... 113,863 120,900
Furniture and equipment................................... 102,991 107,275
Construction in progress.................................. 3,068 5,525
---------- ----------
251,912 266,352
Less accumulated depreciation and amortization.......... (140,030) (151,815)
---------- ----------
111,882 114,537
Other assets................................................ 75,920 53,102
Intangibles, including goodwill, less accumulated
amortization of $109,746 in 1995 and $126,715 in 1996..... 544,212 529,946
---------- ----------
$2,488,115 $2,328,115
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses, including outstanding
checks of $31,840 in 1995 and $27,410 in 1996............. $ 246,694 $ 207,531
Accounts payable -- Ford.................................... 22,909 2,994
Current income taxes payable................................ 93 812
Self-insurance liability.................................... 155,324 137,249
Notes payable -- Ford....................................... 989,646 846,708
Notes payable -- other...................................... 928,301 983,678
Mandatory Redeemable Preferred Stock:
Series A, 10% cumulative, redeemable, par value $.01,
stated value $1,000; 150,000 shares authorized; 150,000
shares issued and outstanding, including $101,250 ($675
per share) in 1995 of dividends in arrears.............. 251,250 --
Series X, 7.5% cumulative, redeemable, par value $.01,
stated value $1,000; 291,000 shares authorized, 5,006.46
shares issued and outstanding, including $172 ($34 per
share) in 1996 of dividends in arrears.................. -- 5,178
Stockholders' equity:
Preferred stock:
Series B, cumulative, participating, par value $.01,
stated value $1,000; 309,000 shares authorized; 309,000
shares issued and outstanding in 1995.................. 309,000 --
Common stock, par value $.01; 10,000 shares authorized,
issued and outstanding.................................. -- --
Additional paid-in capital................................ 1,000 564,994
Costs incurred for raising equity capital................. (9,555) (9,555)
Pension liability adjustment.............................. (15,110) (12,409)
Foreign currency translation adjustment................... (11,322) (7,497)
Accumulated deficit....................................... (380,115) (391,568)
---------- ----------
(106,102) 143,965
---------- ----------
$2,488,115 $2,328,115
========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.

F-25
<PAGE> 115

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
DECEMBER 31, 1994, 1995 AND 1996

<TABLE>
<CAPTION>
1994 1995 1996
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Revenue:
Vehicle rental........................................... $1,011,203 1,034,873 963,764
Retail car sales......................................... 77,999 83,795 91,503
Royalty fees............................................. 53,147 57,861 60,352
Other.................................................... 13,417 16,941 17,202
---------- ---------- ----------
1,155,766 1,193,470 1,132,821
---------- ---------- ----------
Expenses:
Direct vehicle and operating............................. 134,126 153,081 121,288
Depreciation -- vehicles................................. 257,356 323,619 263,846
Depreciation and amortization -- nonvehicle.............. 21,410 19,520 26,645
Cost of vehicles sold at retail.......................... 67,314 72,416 78,944
Advertising, promotion and selling....................... 99,738 106,446 83,304
Occupancy................................................ 110,386 113,286 114,325
Personnel................................................ 269,370 280,901 248,655
General and administrative............................... 69,117 88,612 54,194
Intangible amortization.................................. 16,874 17,006 16,969
---------- ---------- ----------
1,045,691 1,174,887 1,008,170
---------- ---------- ----------
Earnings before interest and income taxes.................. 110,075 18,583 124,651
Interest expense........................................... 104,950 149,909 124,182
---------- ---------- ----------
Income (loss) before income taxes.......................... 5,125 (131,326) 469
Provision for income taxes................................. 4,000 1,314 3,000
---------- ---------- ----------
Net income (loss).......................................... $ 1,125 (132,640) (2,531)
========== ========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.

F-26
<PAGE> 116

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

<TABLE>
<CAPTION>
COSTS
INCURRED FOREIGN
ADDITIONAL FOR RAISING PENSION CURRENCY
PREFERRED COMMON PAID-IN EQUITY LIABILITY TRANSLATION ACCUMULATED
STOCK STOCK CAPITAL CAPITAL ADJUSTMENT ADJUSTMENT DEFICIT
--------- -------- ---------- ----------- ---------- ----------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December
31, 1993............ $309,000 $ -- $ 1,000 $(9,555) $ (6,388) $(15,899) $(218,600)
Dividends in
arrears.......... -- -- -- -- -- -- (15,000)
Net income.......... -- -- -- -- -- -- 1,125
Pension liability
adjustment....... -- -- -- -- 144 -- --
Foreign currency
translation...... -- -- -- -- -- 4,082 --
-------- -------- -------- ------- -------- -------- ---------
Balance at December
31, 1994............ 309,000 -- 1,000 (9,555) (6,244) (11,817) (232,475)
Dividends in
arrears.......... -- -- -- -- -- -- (15,000)
Net loss............ -- -- -- -- -- -- (132,640)
Pension liability
adjustment....... -- -- -- -- (8,866) -- --
Foreign currency
translation...... -- -- -- -- -- 495 --
-------- -------- -------- ------- -------- -------- ---------
Balance at December
31, 1995............ 309,000 -- 1,000 (9,555) (15,110) (11,322) (380,115)
Dividends in
arrears:......... -- -- -- -- -- -- --
Series A......... -- -- -- -- -- -- (8,750)
Series X......... -- -- -- -- -- -- (172)
Net loss............ -- -- -- -- -- -- (2,531)
Exchange of
preferred
stock............ (309,000) -- 563,994 -- -- -- --
Pension liability
adjustment....... -- -- -- -- 2,701 -- --
Foreign currency
translation...... -- -- -- -- -- 3,825 --
-------- -------- -------- ------- -------- -------- ---------
Balance at December
31, 1996............ $ -- $ -- $564,994 $(9,555) $(12,409) $ (7,497) $(391,568)
======== ======== ======== ======= ======== ======== =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-27
<PAGE> 117

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

DECEMBER 31, 1994, 1995 AND 1996

<TABLE>
<CAPTION>
1994 1995 1996
------------ ----------- ------------
<S> <C> <C> <C>
Operating activities:
Net income (loss).................................... $ 1,125 $ (132,640) $ (2,531)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization..................... 278,766 343,140 290,491
Intangible amortization........................... 16,874 17,006 16,969
Gain on sale of vehicles and equipment............ (25,389) (20,333) (14,137)
Provision for losses on accounts receivable....... 9,205 9,581 6,350
Equity in (earnings) loss of equity investees..... 61 (1,665) --
Changes in operating assets and liabilities, net
of effects from franchise acquisitions:
Receivables..................................... (12,537) (23,998) 32,118
Prepaid expenses and taxes, inventories and
deposits..................................... (3,065) 2,710 3,306
Vehicles held for sale.......................... (2,278) (2,082) (2,543)
Accounts payable and accrued expenses........... 34,458 (2,674) (56,377)
Current income taxes payable.................... 434 (341) 719
Estimated self-insurance liability.............. (16,861) (14,760) (18,075)
------------ ----------- ------------
Net cash provided by operating activities.............. 280,793 173,944 256,290
------------ ----------- ------------
Investing activities:
Purchase of vehicles................................. (2,841,717) (2,783,295) (2,196,399)
Proceeds from sale of vehicles....................... 2,402,724 2,666,523 2,000,129
Purchase of property and equipment................... (14,692) (19,144) (25,265)
Proceeds from the sale of property and equipment..... 8,846 8,940 7,180
Changes in other assets.............................. 33,029 (53,962) 9,301
------------ ----------- ------------
Net cash used in investing activities.................. (411,810) (180,938) (205,054)
------------ ----------- ------------
Financing activities:
Proceeds from revolving credit facility and other
notes payable..................................... 2,130,732 2,101,462 839,349
Principal payments on revolving credit facility and
other notes payable............................... (2,108,407) (1,917,026) (823,057)
Proceeds from fleet lender notes..................... 2,021,290 1,739,199 2,194,033
Principal payments on fleet lender notes............. (2,114,124) (1,833,544) (2,353,082)
Proceeds from commercial paper....................... 10,098,459 7,777,064 10,878,540
Principal payments on commercial paper............... (10,354,161) (7,831,494) (10,823,344)
Proceeds from notes payable to other vehicle
lenders........................................... 500,000 -- --
------------ ----------- ------------
Net cash provided by (used in) financing activities.... 173,789 35,661 (87,561)
------------ ----------- ------------
Increase (decrease) in cash and cash equivalents....... 42,772 28,667 (36,325)
Cash and cash equivalents at beginning of year......... 24,433 67,205 95,872
------------ ----------- ------------
Cash and cash equivalents at end of year............... $ 67,205 $ 95,872 $ 59,547
============ =========== ============
</TABLE>

See accompanying notes to consolidated financial statements.

F-28
<PAGE> 118

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1995 AND 1996
(DOLLARS IN THOUSANDS)

(1) SIGNIFICANT ACCOUNTING POLICIES

General

On March 30, 1989, pursuant to an agreement and plan of merger, as amended,
Budget Rent a Car Corporation (the Company) became a wholly owned subsidiary of
Beech Holdings Corp. (Holdings). Effective December 31, 1995, Holdings was
merged with and into the Company (the Merger). All shares of Holdings stock
outstanding prior to the Merger were retired and new shares of Company stock,
with rights and preferences similar to the retired Holdings shares, were issued
to the stockholders of Holdings. The accompanying financial statements are
presented as if the Merger had taken place on January 1, 1994. The most
significant impact of the Merger on the consolidated financial statements of the
Company was to increase intangible assets (and amortization expense) and to
increase stockholders' equity.

On July 16, 1996, pursuant to a Recapitalization Plan approved by the
Company's Board of Directors and stockholders, the Company exchanged all
previously issued and outstanding shares of Preferred A and Preferred B stock
for 5,006.46 shares of a new series (Series X) of mandatory redeemable preferred
stock. As a result of the exchange, additional paid-in capital increased
$563,994, while Series B preferred stock, at stated value, decreased $309,000
and mandatory redeemable preferred stock (Series A) was reduced by $260,000. See
note 11 to the consolidated financial statements.

Description of Business

The Company is engaged in the business of vehicle rental through both owned
and franchised operations. Company owned vehicle rental operations are located
primarily throughout the United States and Western Europe. The largest
concentration (approximately 25%) of vehicle rental assets is located in the
highly competitive Florida market. Franchised vehicle operations are located
worldwide. Customers are mainly business and leisure travelers. No customer
accounts for more than 10% of the Company's revenues.

Principles of Consolidation

The consolidated financial statements include the accounts and operations
of the Company and its majority-owned subsidiaries. All significant intercompany
transactions and accounts have been eliminated in consolidation. Investments in
less than majority-owned entities are accounted for using the equity method,
under which the Company's share of operating results are reflected in income as
earned and dividends are credited against the investment when received.

Cash and Cash Equivalents

Cash equivalents include all highly liquid investments with an original
maturity of three months or less.

Computer Software Systems

License fees related to the Company's purchased reservation system and
associated applications and databases are capitalized and amortized over ten
years. Costs associated with the internal development of other computer software
systems and system enhancements are capitalized and amortized over three years.

Intangibles, Including Goodwill

Costs in excess of the fair value of net assets acquired as a result of the
acquisition of the Company and in conjunction with acquisitions of franchise
vehicle rental operations are capitalized and amortized over 40 years on the
straight-line method.

F-29
<PAGE> 119

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The carrying value of goodwill is reviewed whenever events or changes in
circumstances indicate that the carrying value may not be recoverable through
projected undiscounted future operating cash flows. Although no impairment is
indicated at December 31, 1996, the assessment of recoverability will be
impacted if estimated projected undiscounted operating cash flows are not
achieved.

Other Revenues

Other revenues largely consist of income before interest and taxes for
insurance and credit card processing operations, the Company's share of
operating results of equity investees and revenues generated from miscellaneous
services provided to the Company's franchisees.

Vehicle Dispositions

Repurchase programs with vehicle manufacturers require the manufacturers to
repurchase the vehicles after varying time frames at agreed upon prices (subject
to defined condition and mileage standards). Vehicles subject to these programs
are capitalized and depreciated such that no gain or loss is realized upon
disposition.

Gains or losses realized on vehicles sold through the wholesale market are
recorded as adjustments to depreciation expense.

Depreciation and Amortization

Depreciation is computed using the straight-line method over the estimated
useful lives of the related assets. Estimated useful lives range from 25 years
for buildings to three to seven years for furniture and equipment. Costs of
leasehold improvements are amortized on the straight-line method over the
shorter of the lease term or the estimated useful life of the related assets.
Vehicles are depreciated at rates ranging from 1.0% to 2.5% per month, depending
on vehicle type.

Advertising, Promotion and Selling

Advertising, promotion and selling costs are expensed as incurred. The
Company incurred advertising expenses of $33,326, $38,552 and $31,201 in 1994,
1995 and 1996, respectively.

Environmental Costs

Environmental remediation costs are recorded in accrued expenses based on
estimates of known environmental remediation exposures when it becomes probable
that a liability has been incurred. Environmental exposures are largely related
to underground storage tanks.

Expenditures are expected to be made over the next three years. A
receivable is recorded for amounts recoverable from third-parties when
collection becomes probable.

Self-insurance Liability

The Company is self-insured with respect to personal and property liability
claims up to specified limits. Third-party insurance is maintained for claims in
excess of the limits. A liability is recorded for known claims and for incurred
but not reported incidents based on actuarially computed estimates of expected
loss. The liability recorded as a result of these actuarially computed estimates
may experience material changes from year to year as incurred but not reported
incidents become known and known claims are settled.

The Company maintains unused letters of credit amounting to $122,324 and
$89,272 at December 31, 1995 and 1996, respectively, largely in support of its
insurance liability in certain states and supporting the reimbursement of claims
paid by third-party claims administrators.

F-30
<PAGE> 120

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Income Taxes

Deferred taxes are recognized to the extent they are expected to be payable
upon distribution of earnings of foreign and unconsolidated subsidiaries. The
Company uses a September 30 fiscal year for U.S. Federal income tax purposes.

The Company uses the asset and liability method of accounting for income
taxes. Under this method, deferred tax assets and liabilities are determined
based on the difference between the financial statement and tax bases of assets
and liabilities, as measured by the enacted tax rates which will be in effect
when those temporary differences are expected to be recovered or settled.
Deferred tax expense is the result of changes in the net deferred tax assets and
liabilities. The effect of a change in tax rates is recognized in the period
that includes the enactment date.

Translation of Foreign Financial Statements

The financial statements of the Company's foreign affiliates have been
translated into U.S. dollars in accordance with SFAS No. 52. Accordingly, assets
and liabilities of foreign operations are translated at period-end rates of
exchange, with any resultant translation adjustments reported as a separate
component of stockholders' equity. Income statement accounts are translated at
average exchange rates for the period and gains and losses from foreign currency
transactions are included in net income.

Derivatives

Premiums paid for purchased interest rate cap agreements are amortized to
interest expense over the terms of the cap. Unamortized premiums are included in
prepaid expenses in the balance sheet. Accounts receivable under cap agreements
are accrued with a corresponding reduction of interest expense.

Gains and losses on foreign exchange contracts and futures related to
qualifying hedges of firm commitments or anticipated transactions are deferred
and are recognized in income when the hedged transaction occurs. The Company
does not engage in speculative derivatives.

Use of Estimates

The preparation of 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
disclosure of contingent liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Changes in Accounting Estimates

During 1994, 1995 and 1996 the Company recorded adjustments related to
prior year actuarial estimates of its self-insurance liability. The effect of
these adjustments was to increase income before taxes by approximately $8,000 in
1994, to decrease income before taxes by approximately $15,000 in 1995 and to
increase income before taxes by approximately $19,000 in 1996.

Reclassifications

Certain amounts in the 1994 and 1995 consolidated financial statements have
been reclassified to conform with the current year presentation.

(2) VEHICLES, AT COST

Vehicles, at cost largely represent revenue earning cars and trucks. At
December 31, 1995 and 1996 the net book value of vehicles subject to repurchase
programs was approximately $1,077,000 and $940,047, respectively.

F-31
<PAGE> 121

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(3) REORGANIZATION AND CENTRALIZATION

The accompanying financial statements for 1995 include charges and accruals
of approximately $14,600 ($9,300 in personnel expense and $5,300 in general and
administrative expense) related to a reorganization and centralization primarily
of the finance and administrative functions of the Company (the
"Reorganization"). In conjunction with the Reorganization, approximately 450
employees were identified for termination, primarily in finance and operations
management. As of December 31, 1996, all affected employees have been terminated
or accepted other open positions.

At December 31, 1996, the remaining accruals relating to the Reorganization
totaled approximately $2,300. During 1996, amounts paid and non-cash accrual
reductions totaled approximately $11,000 and $1,300, respectively.

(4) OTHER ASSETS

Other assets include purchased software and capitalized software systems
development costs, net of accumulated amortization, which amount to
approximately $65,351 and $53,101 at December 31, 1995 and 1996, respectively.
In addition, other assets includes the Company's 50% investment in Compass
Computer Services, Inc. (Compass) and a 20% investment in a foreign rental
operation. Compass provides, among other services, reservation data processing.

The Company received dividends from Compass of $850, $150 and $8,088 during
1994, 1995 and 1996, respectively. In 1996, $5,000 of the dividends represents
the fair value of property and equipment received. The combined revenues of the
Company's investees during 1994, 1995 and 1996 amount to less than 10% of
consolidated revenues. At December 31, 1996, the amount of undistributed
earnings of Compass included in consolidated accumulated deficit is not
significant.

(5) NOTES PAYABLE

Notes payable at December 31 consist of the following:

<TABLE>
<CAPTION>
FINAL
INTEREST RATE MATURITY 1995 1996
---------------- -------------- ---------- ----------
<S> <C> <C> <C> <C>
Fleet lender revolving
notes...................... 7.23% to 8.40% 1997 $598,710 $426,370
Commercial paper payable..... 5.20% to 6.35% 1997 312,320 367,516
Vehicle lender term notes.... 6.02% 1999 500,000 500,000
Revolving credit facility.... 7.73% 1997 392,718 418,218
Foreign notes................ 4.06% to 11.55% 1997 to 2012 58,893 71,676
Note payable to vendor....... 6.20% 1998 39,975 35,875
Notes payable to former
owners of franchises
purchased by the Company... 10.00% to 12.00% 1997 to 1999 2,038 1,562
Other........................ 5.48% to 9.00% 1997 to 2007 13,293 9,169
---------------- -------------- ---------- ----------
$1,917,947 $1,830,386
========== ==========
</TABLE>

Fleet lender revolving notes: The fleet lender revolving notes are secured
by the applicable vehicles and vehicle program receivables. The notes bear
interest at rates that vary with commercial paper rates or the prime rate. The
Company makes monthly principal payments based on depreciation of the related
vehicles adjusted for net additions or disposals. It is the Company's intention
and ability to renew the fleet lender revolving notes or to obtain financing
under similar terms when the present agreements expire. At December 31, 1995 and
1996, $593,937 and $426,370, respectively, are due to Ford.

F-32
<PAGE> 122

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Commercial paper payable: The commercial paper payable (the "paper") is
secured by the applicable vehicles and vehicle program receivables. Under
limited circumstances the paper may be repaid by draws under a related, bank
provided liquidity facility ($725,000) or a related letter of credit ($120,000).
The paper is issued periodically with maturities up to 90 days. It is the
Company's intention and ability to renew the liquidity facility and letter of
credit or to obtain financing under similar terms when the present agreements
expire in July 1997 and July 1998, respectively.

Vehicle lender term notes: The vehicle lender term notes (the "notes") are
secured by the applicable vehicles and vehicle program receivables. Under
limited circumstances the notes may be repaid by draws under a related letter of
credit ($25,000).

Revolving credit facility: The revolving credit facility, which provides
funding of working capital, bears interest at rates that vary with commercial
paper rates and is due to Ford. The unused and available commitment of the
credit facility was $57,282 and $106,782 at December 31, 1995 and 1996,
respectively.

Foreign notes: The foreign notes primarily provide financing for vehicle
purchases and the funding of working capital. At December 31, 1995 and 1996,
approximately $53,917 and $67,733, respectively, relate to vehicle debt while
$4,976 and $3,943, respectively, relate to the funding of working capital and
various other debt. At December 31, 1995 and 1996, $2,991 and $2,120,
respectively, are due to Ford.

Notes payable to vendor: The note payable to vendor relates to the
Company's license agreement for the reservation system and associated
applications and databases.

Substantially all of the Company's assets serve as collateral under the
various credit agreements. Cash deposits restricted as to use amounted to
$52,471 and $28,359 at December 31, 1995 and 1996, respectively. The fleet
lender revolving notes, liquidity facility, vehicle lender term notes and
revolving credit facility each contain restrictive covenants relating to, among
other things, incurring liens, paying dividends or selling certain assets.
Additionally, the revolving credit facility has specific covenants relating to
net worth, leverage and capital expenditures. Compliance with these covenants
has been waived.

Maturities: Scheduled aggregate maturities of notes payable at December 31
are as follows:

<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
1996........................................................ $1,375,455 $ --
1997........................................................ 4,629 1,308,854
1998........................................................ 7,977 18,976
1999........................................................ 505,159 501,207
2000........................................................ 4,567 496
2001........................................................ 4,596 368
Thereafter.................................................. 15,564 485
---------- ----------
$1,917,947 $1,830,386
========== ==========
</TABLE>

Interest payments amounted to $105,214, ($63,038 to Ford) $149,219 ($83,627
to Ford) and $124,483 ($74,815 to Ford) in the years ended December 31, 1994,
1995 and 1996, respectively. In 1995 the Company capitalized $1,233 of interest
costs incurred.

(6) FINANCIAL INSTRUMENTS

Interest Rate Caps: The Company enters into interest rate cap agreements
to limit its exposure to increases in interest rates. Under these agreements,
the Company will receive payment in the event that 30 day commercial paper rates
exceed levels varying from 5.00% to 5.75%.

F-33
<PAGE> 123

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company had interest rate cap agreements outstanding in the notional
amount of $500,000 at December 31, 1995 and 1996, respectively. In 1996, fees of
approximately $3,600 have been paid to the counterparties (major banks) and are
amortized on the straight-line method to interest expense over the protection
period (through December 1997). At December 31, 1995 and 1996, the unamortized
fees amounted to approximately $3,390 and $3,600, respectively.

The Company is exposed to credit-related loss, to the extent of the fair
value of the contracts, in the event of nonperformance by the counterparties to
the agreements, but believes this risk to be minimal given the high credit
ratings of the counterparties.

Foreign exchange contracts: The Company employs forward foreign exchange
contracts to limit its exposure to currency fluctuations on certain intercompany
loans between foreign operations. Under these agreements, the Company is
obligated to sell foreign currencies (primarily European) in exchange for
British Sterling or U.S. dollars at dates several months into the future. These
contracts are subject to the creditworthiness of the counterparties (large
banks), but the Company believes this risk to be minimal given the high credit
ratings of the counterparties. At December 31, 1995, no foreign exchange
contracts were outstanding. At December 31, 1996, the Company had approximately
$7,254 in forward foreign exchange contracts outstanding and had deferred
expenses of approximately $77.

(7) PENSION AND OTHER BENEFIT PLANS

Substantially all employees of the United Kingdom and certain employees in
the U.S. are covered under noncontributory pension plans. Plan benefits are
based on final average compensation. The Company's funding policy for the
domestic pension plan is to contribute the minimum ERISA contribution required
under the projected unit credit actuarial cost method. Effective December 31,
1991, the Company suspended its domestic defined benefit pension plan. As a
result of this suspension, employees will earn no additional benefits under the
plan. The domestic plan is supplemented by an unfunded, nonqualified plan
providing benefits (as computed under the benefit formula) in excess of limits
imposed by Federal tax law. The cost of the supplemental plan was approximately
$1,009, $1,053 and $1,005 in 1994, 1995 and 1996, respectively.

Effective August 1996 the Company established an unfunded, nonqualified
plan providing benefits to its officers, (the Executive Protection Plan) based
on a percentage of final compensation. The cost of the Executive Protection Plan
was approximately $87 in 1996.

The Company also maintains a Savings Plus Plan. Under this plan, an
eligible employee of the Company, or its participating subsidiaries, who has
completed one year of continuous service and enrolls in the plan may elect to
defer from 1% to 15% of specified compensation under a "cash or deferred
arrangement" under Section 401(k) of the Internal Revenue Code, subject to
certain limitations. The Company contributes varying amounts (25% to 75%) on the
first 6% of each participating employees eligible salary deferrals to various
funds established by the plan. The cost of the plan was approximately $2,436,
$2,657 and $2,332 in 1994, 1995 and 1996, respectively.

The Company maintains a defined contribution benefit plan covering all
employees eligible under the Savings Plus Plan. The amount of funds contributed
to the plan each year, if any, is at the discretion of the Board of Directors,
based on a percentage of an employee's total cash compensation. The cost of the
plan was approximately $5,368, $3,096 and $2,761 in 1994, 1995 and 1996,
respectively.

F-34
<PAGE> 124

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Each of the Company's defined benefit plan's accumulated benefits exceed
the plan's assets at December 31, 1996 and 1995. The following table sets forth
the domestic and foreign pension plans' funded status and amounts recognized in
the Company's consolidated financial statements at December 31:

<TABLE>
<CAPTION>
1995 1996
------------------ ------------------
DOMESTIC FOREIGN DOMESTIC FOREIGN
PLANS PLAN PLANS PLAN
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits.............................. $(27,328) $(3,123) $(27,615) $(4,685)
Nonvested benefits........................... (1,033) (52) (1,103) (69)
-------- ------- -------- -------
Accumulated benefit obligation................. $(28,361) $(3,175) $(28,718) (4,754)
======== ======= ======== =======
Projected benefit obligation for service
rendered to date............................. (28,361) (3,920) (28,767) (5,768)
Plan assets at fair value, primarily
participation in common trust funds.......... 14,650 6,185 16,183 7,936
-------- ------- -------- -------
Excess (deficiency) of plan assets over
projected benefit obligation................. (13,711) 2,265 (12,584) 2,168
Unrecognized net asset at transition........... -- (3) 1,217 (3)
Unrecognized net loss (gain)................... 15,110 (200) 12,458 398
Adjustment required to recognize minimum
liability.................................... (15,110) -- (13,626) --
-------- ------- -------- -------
Prepaid (accrued) pension cost................. $(13,711) $ 2,062 $(12,535) 2,563
======== ======= ======== =======
</TABLE>

<TABLE>
<CAPTION>
1994 1995 1996
------------------ ------------------ ------------------
DOMESTIC FOREIGN DOMESTIC FOREIGN DOMESTIC FOREIGN
PLANS PLAN PLANS PLAN PLANS PLAN
-------- ------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Service cost for benefits earned
during the period................ $ -- $ 149 $ -- $ 158 $ 24 $ 447
Interest cost on projected benefit
obligation....................... 1,639 224 1,809 253 1,916 344
Return on plan assets.............. 334 (520) (2,728) (526) (1,904) (666)
Net amortization and deferral...... (1,141) (43) 1,996 (3) 1,335 --
------- ----- ------- ----- ------- -----
Pension expense (income)........... $ 832 $(190) $ 1,077 $(118) $ 1,371 $ 125
======= ===== ======= ===== ======= =====
</TABLE>

The weighted-average discount rate used in determining the actuarial
present value of the projected benefit obligation for 1995 and 1996 was 6.8% and
7.1%, respectively. No compensation increase has been assumed as no additional
benefits will be earned under the domestic plans. The assumed compensation
increase under the Executive Protection Plan and foreign plan was 5% and 4%,
respectively. The expected long-term rate of return on plan assets for 1995 and
1996 was 10% and 9.5%, respectively.

The Company has recognized additional liabilities related to each of its
domestic plans as the unfunded liability recognized as accrued pension cost is
less than the actuarially determined accumulated benefit obligation. The
additional liability is reflected in the accompanying balance sheets as follow
at December 31:

<TABLE>
<CAPTION>
1995 1996
------- -------
<S> <C> <C>
Unrecognized prior service cost (increase intangible
assets)................................................... $ -- $ 1,217
Additional liability in excess of unrecognized prior service
cost (decrease stockholders' equity)...................... 15,110 12,409
------- -------
Additional liability (increase accounts payable and accrued
expenses)................................................. $15,110 $13,626
======= =======
</TABLE>

F-35
<PAGE> 125

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(8) INCOME TAXES

The provision for income taxes for the years ended December 31 consists of
the following:

<TABLE>
<CAPTION>
1994 1995 1996
------ ------ ------
<S> <C> <C> <C>
Current:
State..................................................... $ 823 $ 448 $1,148
Foreign 1,676 866 1,852
------ ------ ------
2,499 1,314 3,000
Deferred.................................................... 1,501 -- --
------ ------ ------
$4,000 $1,314 $3,000
====== ====== ======
</TABLE>

Net income tax payments amounted to $102, $1,640 and $2,196 in the years
ended December 31, 1994, 1995 and 1996, respectively.

Reconciliations of income taxes at the statutory U.S. Federal income tax
rate and the effective tax rate for the years ended December 31 are as follows:

<TABLE>
<CAPTION>
1994 1995 1996
------- -------- -------
<S> <C> <C> <C>
Federal income tax provision at statutory rate............ $ 1,794 $(45,964) $ 164
Intangible amortization and adjustments................... 3,856 6,070 5,884
Provision for state taxes net of federal benefit.......... 535 -- 746
Change in the beginning of the year valuation allowance
for deferred tax assets allocated to income tax
expense................................................. (1,345) 44,383 (684)
Effect of foreign operations.............................. (1,170) (2,625) (3,199)
Other..................................................... 330 (550) 89
------- -------- -------
$ 4,000 $ 1,314 $ 3,000
======= ======== =======
</TABLE>

Income (loss) before income tax expense from foreign sources was $5,216,
$7,049 and $8,436 for the years ended December 31, 1994, 1995 and 1996,
respectively.

The significant components of deferred income tax expense for the years
ended December 31 are as follows:

<TABLE>
<CAPTION>
1994 1995 1996
------- -------- -----
<S> <C> <C> <C>
Deferred tax expense (benefit) (arising from changes in
deferred tax assets and liabilities)...................... $ 2,845 $(47,010) $ 684
Increase (decrease) in beginning-of-the-year balance of the
valuation allowance for deferred tax assets............... (1,344) 47,010 (684)
------- -------- -----
$ 1,501 $ -- $ --
======= ======== =====
</TABLE>

F-36
<PAGE> 126

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred liabilities at December 31
relate to the following:

<TABLE>
<CAPTION>
1995 1996
--------- ---------
<S> <C> <C>
Deferred tax assets:
Estimated self-insurance liability........................ $ 59,859 $ 54,060
Accrued expenses-pension.................................. (217) 800
Accounts receivable, principally due to allowance for
doubtful accounts...................................... 5,600 6,391
Accrued salaries and bonuses.............................. 4,225 2,103
Accrued expenses -- other................................. 881 (1,315)
Net operating loss carryforwards.......................... 87,952 76,672
Business tax credit carryforwards......................... 5,881 5,881
Alternative minimum tax credit carryforwards.............. 2,811 2,811
Foreign tax credit carryforwards.......................... 3,035 4,319
Foreign tax assets and net operating loss carryforwards... 245 1,308
Other..................................................... 479 479
--------- ---------
Total gross deferred tax assets........................ 170,751 153,509
Less valuation allowance............................... (112,697) (112,013)
--------- ---------
Net deferred tax assets................................ 58,054 41,496
Deferred tax liabilities:
Vehicles, principally due to differences in
depreciation........................................... (19,515) (2,986)
Other assets, principally due to research and
development............................................ (23,196) (22,714)
Intangibles, principally due to amortization of
identifiable items..................................... (12,483) (13,387)
Other..................................................... (2,860) (2,409)
--------- ---------
Total gross deferred tax liabilities...................... (58,054) (41,496)
--------- ---------
Net deferred tax asset...................................... $ -- $ --
========= =========
</TABLE>

At December 31, 1996, the Company has net operating loss carryforwards for
federal income tax purposes of $207,222 which are available to offset future
federal taxable income through 2011. The Company's business tax credit
carryforwards for federal income tax purposes are available to reduce future
federal income taxes through 2011 and the Company's alternative minimum tax
credit carryforwards are available to reduce future federal regular income
taxes, if any, over an indefinite period. The foreign tax credits, available to
reduce future federal income taxes, if any, expire from 1997 through 2001.
During the year, as a result of the Recapitalization Plan, the Company
experienced a change of ownership for income tax purposes which may limit the
availability of the above carryover in future years.

Subsequently recognized tax benefits relating to the valuation allowance
for deferred tax assets as of December 31, 1996 will be allocated as follows:

<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
Income tax benefit that would be reported in the
consolidated statements of operations..................... $ 95,764
Reduction of intangibles, including goodwill................ 16,249
--------
$112,013
========
</TABLE>

(9) LITIGATION

The Company was a defendant in a lawsuit (in which it filed counter claims)
that sought unspecified damages for alleged breach of contract related to its
interest in the INTRICO Partnership (a joint venture partnership, which was
created to develop a new state of the art hotel and vehicle rental reservation
system). In January 1994 the Company reached a settlement in this matter.
Amounts received in the settlement were sufficient to reimburse the Company for
its investment in the partnership, capitalized expenditures and capitalized
interest and had no other material impact on the Company's consolidated
financial condition.

F-37
<PAGE> 127

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Other litigation arising in the normal course of business is pending
against the Company. Management believes that the Company has meritorious
defenses to all significant litigation and that the ultimate outcome of the
litigation will not have a material adverse effect on the Company's consolidated
financial position or results of operations.

(10) LEASES AND AIRPORT CONCESSION FEES

Expenses for operating leases and airport concession fees for the years
ended December 31 amount to:

<TABLE>
<CAPTION>
1994 1995 1996
------- ------- -------
<S> <C> <C> <C>
Minimum fees.......................................... $73,401 $66,439 $71,540
Contingent fees....................................... 24,855 32,113 28,340
------- ------- -------
$98,256 $98,552 $99,880
======= ======= =======
</TABLE>

Vehicle leasing expenses of $20,154, $20,937 and $24,713 for the years
ended December 31, 1994, 1995 and 1996, respectively, are not included in the
table above.

Contingent fees are largely based on a percentage of revenues at certain
locations. The Company is required by most of the leases for its operating
facilities to pay real estate taxes, insurance and other occupancy expenses. In
addition, the Company guarantees airport concession fees on behalf of certain
franchisees.

Future minimum commitments as of December 31, 1996 for noncancelable leases
and concession agreements are as follows:

<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
1997........................................................ $ 58,146
1998........................................................ 35,767
1999........................................................ 23,092
2000........................................................ 16,923
2001........................................................ 12,977
Thereafter.................................................. 61,640
--------
$208,545
========
</TABLE>

Several of the Company's leases include renewal options for varying
periods.

(11) MANDATORY REDEEMABLE PREFERRED STOCK

Series X preferred stock (Series X): The Series X is entitled to cumulative
dividends, payable quarterly, when and if declared by the Board of Directors, at
an annual rate of 7.5% of its stated value. The Series X is subject to mandatory
redemption in March 2004 at its then liquidation value (stated value plus any
unpaid accumulated dividends). The Series X ranks prior to all other equity
securities of the Company with respect to dividends rights and rights upon
liquidation.

The Series X stockholders may vote only with respect to matters which would
alter or change the powers, preferences or special rights of the shares
including authorization to issue any stock ranking equal or prior to the Series
X. A majority of Series X shares are required to approve any matters brought to
a vote.

Series A preferred stock (Series A): The Series A is entitled to cumulative
dividends, payable quarterly, when and if declared by the Board of Directors, at
an annual rate of 10% of its stated value. The Series A is subject to mandatory
redemption in March 2004 at its then liquidation value (stated value plus any
unpaid accumulated dividends). The Series A ranks prior to all other equity
securities of the Company other than Series X with respect to dividend rights
and rights upon liquidation.

F-38
<PAGE> 128

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Series A stockholders may vote only with respect to matters which would
alter or change the powers, preferences or special rights of the shares
including authorization to issue any stock ranking equal or prior to the Series
A. A majority of Series A shares are required to approve any matters brought to
a vote. The affirmative vote of the original purchaser is required to approve
these matters as long as the original purchaser owns shares of Series A and
Series B preferred stock which collectively have an aggregate stated value of at
least $1,000.

(12) STOCKHOLDERS' EQUITY

Series B preferred stock (Series B): The Series B is entitled to cumulative
dividends, payable quarterly, when and if declared by the Board of Directors,
equal to 100% of earnings, after deduction of dividends on the Series A, up to a
maximum annual dividend of $25,000. The Series B ranks prior to the common stock
with respect to rights upon liquidation.

The Series B stockholders may vote only with respect to matters which would
alter or change the powers, preferences or special rights of the shares
including authorization to issue any stock ranking equal or prior to the Series
B. A majority of Series B shares is required to approve any matters brought to a
vote.

(13) ENVIRONMENTAL MATTERS

The Company has recorded amounts which, in management's best estimate, will
be sufficient to satisfy anticipated costs of known remediation requirements. At
December 31, 1996 the Company has accrued $3,400 for estimated environmental
remediation costs and expects to expend approximately $1,900 during 1997.
Amounts receivable from third parties for reimbursement of remediation
expenditures is not significant.

Due to factors such as continuing changes in environmental laws and
regulatory requirements, the availability and application of technology, the
identification of presently unknown remediation sites and changes in the extent
of expected remediation efforts, estimated costs for future environmental
compliance and remediation are subject to uncertainty and it is difficult to
predict the amount or timing of future remediation requirements. The Company
does not expect such future costs to have a material adverse effect on the
Company's consolidated financial position or results of operations.

(14) RELATED-PARTY TRANSACTIONS

Prior to the Recapitalization Plan, Ford Motor Company (Ford) and its
affiliates held all of the outstanding preferred stock of the Company and hold a
minimal amount of Series X at December 31, 1996. Ford and the Company are
parties to a vehicle supply agreement, effective through August 1998, pursuant
to which owned locations are to acquire at least 70% of their annual vehicle
purchases from Ford. The agreement provides that Ford vehicles will be
competitive with vehicles of other manufacturers in terms of price and other
factors. A related agreement between Ford and the Company, effective through
August 2007, provides for certain incentives to be paid by Ford to the Company
dependent on the attainment of certain volume purchase requirements. Ford
represents the Company's largest debtor and creditor at December 31, 1995 and
1996.

(15) DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash and cash equivalents, receivables and accounts payable and accrued
expenses: The carrying amounts approximate fair value due to the short maturity
of these instruments.

Notes payable: The carrying amounts approximate fair value as a majority
of the obligations incur interest at a floating, market rate that is reset
monthly. In addition, the significant terms of fixed rate obligations do not
differ materially from those currently available to the Company.

Interest rate cap agreements: As described in note 6 to the consolidated
financial statements, the Company has recorded $3,600 in capitalized fees
related to various interest rate cap agreements. The fair value of these

F-39
<PAGE> 129

BUDGET RENT A CAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

agreements at December 31, 1996, based on a sampling of financial institutions'
and brokers' quotes is approximately $2,020.

(16) GEOGRAPHICAL SEGMENT INFORMATION

The Company operates in two major geographical areas; North America and
International.

Information by area for the years ended December 31 is as follows:

<TABLE>
<CAPTION>
1994 1995 1996
---------- ---------- ----------
<S> <C> <C> <C>
Revenue:
North America.................................... $1,040,847 $1,064,182 $ 997,907
International.................................... 114,919 129,288 134,914
---------- ---------- ----------
Total.................................... $1,155,766 $1,193,470 $1,132,821
========== ========== ==========
Income Before Taxes:
North America.................................... $ (3,209) $ (140,921) $ (10,882)
International.................................... 8,334 9,595 11,351
---------- ---------- ----------
Total.................................... $ 5,125 $ (131,326) $ 469
========== ========== ==========
Identifiable Assets:
North America.................................... $2,440,040 $2,318,120 $2,142,798
International.................................... 162,334 169,995 185,317
---------- ---------- ----------
Total.................................... $2,602,374 $2,488,115 $2,328,115
========== ========== ==========
</TABLE>

(17) SUBSEQUENT EVENT -- SALE OF THE COMPANY

On January 13, 1997, Team Rental Group, Inc. and its subsidiaries (TEAM)
entered into stock purchase agreements (the Agreements) with Ford, the common
stockholder of the Company and the Company, pursuant to which TEAM agreed to
acquire the capital stock of the Company. Under the Agreements, all outstanding
fleet lender revolving notes and commercial paper payable will be refinanced. In
addition, the Company will be obligated to repay a portion of its outstanding
indebtedness under the revolving credit facility and Ford will cancel a portion
of the indebtedness.

F-40
<PAGE> 130

------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY TEAM OR ANY U.S. UNDERWRITER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF TEAM SINCE
SUCH DATE.
------------------
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 14
Use of Proceeds....................... 19
Price Range of Common Stock........... 20
Dividend Policy....................... 20
Capitalization........................ 21
Pro Forma Consolidated Financial
Statements of Budget Group.......... 23
Selected Financial Data of TEAM....... 31
Management's Discussion and Analysis
of Financial Condition and Results
of Operations of TEAM............... 33
Selected Financial Data of BRACC...... 39
Management's Discussion and Analysis
of Financial Condition and Results
of Operations of BRACC.............. 41
Business of Budget Group.............. 45
The Budget Acquisition................ 58
Management............................ 62
Certain Transactions.................. 67
Principal Stockholders................ 69
Description of Capital Stock.......... 71
Description of Certain Indebtedness... 76
Shares Eligible for Future Sale....... 78
Certain U.S. Tax Consequences to Non-
U.S. Holders of Class A Common
Stock............................... 79
Underwriting.......................... 81
Notice to Canadian Residents.......... 84
Legal Matters......................... 85
Experts............................... 85
Additional Information................ 86
Index to Financial Statements......... F-1
</TABLE>

------------------------------------------------------

Budget (Logo)

TEAM RENTAL GROUP, INC.

6,500,000 Shares

Class A Common Stock
($.01 par value)
PROSPECTUS
CREDIT SUISSE FIRST BOSTON

ABN AMRO CHICAGO CORPORATION

ALEX. BROWN & SONS
INCORPORATED

MCDONALD & COMPANY
SECURITIES, INC.
------------------------------------------------------
<PAGE> 131

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

SUBJECT TO COMPLETION, DATED MARCH 28, 1997

6,500,000 Shares

Team Rental Group (Logo)
TEAM RENTAL GROUP, INC.

Class A Common Stock
($.01 par value)
---------------------

The 6,500,000 shares of Class A Common Stock of Team Rental Group, Inc. ("TEAM")
offered hereby are
being sold by TEAM in connection with the acquisition by TEAM of all the
outstanding capital stock
of Budget Rent a Car Corporation (the "Budget Acquisition"). The net proceeds of
the
Offering, together with a portion of the net proceeds of concurrent financing
transactions, will be used to finance the Budget Acquisition.

Of the 6,500,000 shares of Class A Common Stock being offered, 1,300,000 shares
(the "International Shares") are initially being offered outside the United
States and Canada by the Managers (the "International Offering") and 5,200,000
shares (the "U.S. Shares") are initially being concurrently offered in the
United States and Canada by the U.S. Underwriters (the "U.S. Offering" and,
together with the International Offering, the "Offering"). The offering price
and underwriting discounts and commissions of the International Offering and the
U.S. Offering will be identical.

FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN INVESTMENT IN THE CLASS A COMMON STOCK, SEE "RISK FACTORS" BEGINNING ON PAGE
14 HEREIN.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

(1) Before deduction of expenses payable by TEAM estimated at $800,000.

(2) TEAM has granted the Managers and the U.S. Underwriters an option,
exercisable by Credit Suisse First Boston Corporation for 30 days from the
date of this Prospectus, to purchase a maximum of 975,000 additional shares
of Class A Common Stock solely to cover over-allotments of shares, if any.
If the option is exercised in full, the total Price to Public will be
$ , Underwriting Discounts and Commissions will be $ and
Proceeds TEAM will be $ .

The International Shares are offered by the several Managers when, as and if
issued by TEAM, delivered to and accepted by the Managers and subject to their
right to reject orders in whole or in part. It is expected that the
International Shares will be ready for delivery on or about
, 1997, against payment in immediately available funds.

CREDIT SUISSE FIRST BOSTON ABN AMRO ROTHSCHILD

ALEX. BROWN & SONS MCDONALD & COMPANY

INTERNATIONAL SECURITIES, INC.

Prospectus dated , 1997.

<PAGE> 132

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY TEAM OR ANY MANAGER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF TEAM SINCE
SUCH DATE.

In this Prospectus, references to "dollars" and "$" are to United States
dollars.

TEAM intends to furnish its shareholders with annual reports containing
consolidated financial statements audited by an independent public accounting
firm and quarterly reports for the first three quarters of each fiscal year
containing unaudited interim financial information.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Summary............................ 3
Risk Factors.................................. 14
Use of Proceeds............................... 19
Price Range of Common Stock................... 20
Dividend Policy............................... 20
Capitalization................................ 21
Pro Forma Consolidated Financial Statements of
Budget Group................................ 23
Selected Financial Data of TEAM............... 31
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of TEAM.......................... 33
Selected Financial Data of BRACC.............. 39
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of BRACC......................... 41
Business of Budget Group...................... 45
</TABLE>

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
The Budget Acquisition........................ 58
Management.................................... 62
Certain Transactions.......................... 67
Principal Stockholders........................ 69
Description of Capital Stock.................. 71
Description of Certain Indebtedness........... 76
Shares Eligible for Future Sale............... 78
Certain U.S. Tax Consequences to Non-U.S.
Holders of Class A Common Stock............. 79
Subscription and Sale......................... 81
Notice to Canadian Residents.................. 84
Legal Matters................................. 85
Experts....................................... 85
Additional Information........................ 86
Index to Financial Statements................. F-1
</TABLE>

2
<PAGE> 133

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

shares of Class A Common Stock (subject to adjustment) issuable upon conversion
of the Series A Convertible Preferred Stock. See "The Budget
Acquisition -- Terms of the Stock Purchase Agreements -- Consideration." TEAM
has also agreed to file a shelf registration statement relating to the 3,986,049
shares of Class A Common Stock issuable upon conversion of the outstanding
Series A Convertible Notes, and TEAM will enter into a similar agreement with
respect to the shares of Class A Common Stock that will be issuable upon
conversion of the Series B Convertible Notes. TEAM's directors and executive
officers, who in the aggregate beneficially own 2,824,305 shares of Common
Stock, have agreed that for a period of 90 days after the date of this
Prospectus, and TEAM has agreed that for a period of 180 days after the date of
this Prospectus, they will not sell or otherwise dispose of any shares of Common
Stock without the prior written consent of Credit Suisse First Boston
Corporation. See "Subscription and Sale." Significant sales of the Class A
Common Stock in the public market following the Offering could adversely affect
prevailing market prices. See "Shares Eligible for Future Sale."

VOTING CONTROL BY PRINCIPAL EXECUTIVE OFFICERS

POTENTIAL ANTI-TAKEOVER EFFECTS OF CHARTER AND BYLAW PROVISIONS; POSSIBLE
ISSUANCES OF PREFERRED STOCK

Certain provisions of Delaware law, TEAM's Amended and Restated Certificate
of Incorporation (in particular, the voting rights of the Class B Common Stock)
and TEAM's Bylaws could delay or impede the removal of incumbent directors and
could make it more difficult for a third party to acquire, or could discourage a
third party from attempting to acquire, control of Budget Group. Such provisions
could limit the price that certain investors might be willing to pay in the
future for shares of the Class A Common Stock. In addition, shares of preferred
stock may be issued by the Board of Directors without stockholder approval on
such terms and conditions, and having such rights, privileges and preferences,
as the Board of Directors may determine. The rights of the holders of the Class
A Common Stock will be subject to, and may be adversely affected by, the rights
of the holders of any preferred stock that may be issued in the future. Budget
Group has no current plans to issue any shares of preferred stock, other than
the shares of Series A Convertible Preferred Stock to be issued to Ford in
connection with the Budget Acquisition. See "Description of Capital
Stock -- Preferred Stock" and "Description of Capital Stock -- Section 203."

18
<PAGE> 134

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

FLEET FINANCING FACILITIES

SHARES ELIGIBLE FOR FUTURE SALE

The remaining 1,296,450 shares of the Class A Common Stock, all shares of
the Class B Common Stock and all shares of the Series A Convertible Preferred
Stock are "restricted" securities within the meaning of Rule 144 and may not be
resold in a public distribution, except in compliance with the registration
requirements of the Securities Act or pursuant to Rule 144. All of these shares
of Class A Common Stock and all outstanding shares of Class B Common Stock are
eligible for sale under Rule 144 (as amended effective April 30, 1997). All the
shares of Series A Convertible Preferred Stock will become eligible for sale
under Rule 144 (as amended effective April 30, 1997) one year after the issuance
of those shares in the Budget Acquisition. TEAM's directors and executive
officers, who in the aggregate beneficially own 2,824,305 shares of Common
Stock, have agreed that they will not sell, contract or offer to sell or
otherwise dispose of, directly or indirectly, any shares of capital stock of
TEAM for a period of 90 days from the date of this Prospectus without the prior
written consent of Credit Suisse First Boston Corporation, on behalf of the
Underwriters. See "Subscription and Sale." After such date, certain of these
stockholders have the right to demand that TEAM register their shares under the
Securities Act in accordance with agreements between such holders and TEAM and
may be able to dispose of their shares in a registered public offering effected
thereunder. In addition, certain stockholders and holders of stock purchase
warrants possess certain demand and/or "piggyback" registration rights. See
"Description of Capital Stock -- Registration Rights" and "Management -- Benefit
Plans."

78
<PAGE> 135

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

SUBSCRIPTION AND SALE

The institutions named below (the "Managers") have, pursuant to a
Subscription Agreement dated , 1997 (the "Subscription Agreement"),
severally and not jointly, agreed with TEAM to subscribe and pay for the
following respective numbers of International Shares as set forth opposite their
names:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
Credit Suisse First Boston (Europe) Limited.................
ABN AMRO Rothschild.........................................
Alex. Brown & Sons International............................
McDonald & Company Securities, Inc..........................

---------
Total............................................. 1,300,000
=========
</TABLE>

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 (other than those
International 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.

TEAM has entered into an Underwriting Agreement (the "Underwriting
Agreement") with the U.S. Underwriters of the U.S. Offering (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 International Offering is a
condition to the closing of the U.S. Offering and vice versa.

TEAM has granted to the Managers and the U.S. Underwriters 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
975,000 additional shares of Class A Common Stock at the public offering price
less underwriting discounts and commissions, all as set forth on the cover page
of this Prospectus. Such option may be exercised only to cover over-allotments,
if any, in the sale of the shares of Class A Common Stock. To the extent such
option is exercised, each Manager and each U.S. Underwriter will become
obligated, subject to certain conditions, 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 set forth next to such
U.S. Underwriters's name in the corresponding table in the Prospectus relating
to the U.S. Offering bears to the total number of shares of Class A Common Stock
in such tables.

TEAM has been advised by Credit Suisse First Boston (Europe) Limited, on
behalf of the Managers, that the Managers propose to offer the International
Shares outside the United States and Canada to the public 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 commission of
$ per share and that the Managers may reallow a commission of
$ per share on sales to certain other dealers. After the public
offering, the public offering price, commission and reallowance may be changed.

81
<PAGE> 136

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

The public offering price, the aggregate underwriting discounts and
commissions per share and the per share commission and re-allowance 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 re-allowance to dealers will be made
only upon the mutual agreement of Credit Suisse First Boston (Europe) 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 of Class A Common Stock or distribute any
prospectus relating to the Class A Common Stock in the United States or Canada
or to any other dealer who does not so agree. 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 of Class A Common Stock or distribute any
prospectus relating to the Class A Common Stock to any person 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) an individual resident in the United States or Canada or (ii) a
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 of Class A Common
Stock as may be mutually agreed. The price of any shares so sold shall be the
public offering price, less such amount as may be mutually agreed upon by Credit
Suisse First Boston (Europe) 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 of Class A Common Stock 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 of Class A Common Stock.

Each of the Managers and the U.S. Underwriters severally represents and
agrees that (i) it has not offered or sold, and prior to the date six months
after the date of issuance of the Class A Common Stock offered hereby will not
offer or sell, any shares of Class A Common Stock 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
Class A Common Stock 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 issuance of
the Class A Common Stock to a person who is of a kind described in Article 11(3)
of the Financial Services Act of 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 Class A 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.

82
<PAGE> 137

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

TEAM and its officers and directors and certain other holders of Class A
Common Stock have agreed that they will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or, in the case of TEAM,
file with the Commission a registration statement under the Securities Act
relating to any additional shares of TEAM's Common Stock or securities
convertible into or exchangeable or exercisable for any shares of TEAM'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, in the case of the Company's officers and directors and such other
holders, for a period of 90 days and, in the case of TEAM, for a period of 180
days, after the date of this Prospectus, except issuances pursuant to the
exercise of stock options granted under the 1994 Option Plan.

TEAM has 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 which the Managers and the U.S. Underwriters may be
required to make in respect thereof.

Credit Suisse First Boston Corporation has acted as placement agent in
connection with each of the Fleet Financing Facilities, the offering of the
Series A Convertible Notes and the Debt Placements, and as underwriter for
TEAM's initial public offering and its public offering in July 1996. In
addition, Credit Suisse First Boston Corporation acted as placement agent for a
fleet financing by SoCal shortly before it was acquired by TEAM. Credit Suisse
First Boston Corporation is acting as financial advisor to TEAM in connection
with the Budget Acquisition. Credit Suisse First Boston, a Swiss Bank and an
affiliate of Credit Suisse First Boston Corporation, is the agent for the New
Working Capital Facility.

The Representatives, on behalf of the Managers and the U.S. Underwriters,
may engage in over-allotment, stabilizing transactions, syndicate covering
transactions, penalty bids and "passive" market making in accordance with
Regulation M under the Securities Exchange Act of 1934 (the "Exchange Act").
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
Class A Common Stock in the open market after the distribution has been
completed in order to cover syndicate short positions. In "passive" market
making, market makers in the Class A Common Stock who are Managers or U.S.
Underwriters or prospective underwriters may, subject to certain limitations,
make bids for or purchases of the Class A Common Stock until the time, if any,
at which a stabilizing bid is made. Penalty bids permit the Representatives to
reclaim a selling concession from a syndicate member when the shares of Class A
Common Stock 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 Class A Common Stock to be higher than it would otherwise
be in the absence of such transactions. These transactions may be effected on
The Nasdaq National Market or otherwise and, if commenced, may be discontinued
at any time.

83
<PAGE> 138

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the fees and expenses in connection with the
issuance and distribution of the securities being registered hereunder. Except
for the SEC registration fee and NASD filing fee, all amounts are estimates.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 52,273
NYSE filing fee and expenses................................ 17,750
Nasdaq National Market listing fee.......................... 127,000
Blue Sky qualification fees and expenses.................... 5,000
Transfer agents' fees....................................... 10,000
Printing and engraving expenses............................. 140,000
Legal fees and expenses..................................... 200,000
Accounting fees and expenses................................ 190,000
Miscellaneous............................................... 57,977
--------
Total............................................. $800,000
========
</TABLE>

- ---------------

* To be provided by amendment.

ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS.

Section 145 of the General Corporation Law of the State of Delaware
("DGCL") 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 the expenses,
(including attorneys' 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 proceeding, 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 DGCL, the Amended and Restated
Certificate of Incorporation of the Company (filed herewith as Exhibit 3.2) (the
"Restated Certificate of Incorporation") provides that no director shall be
liable to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director other than (i) for breaches of the director's duty
of loyalty to the Company and its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for the unlawful payment of dividends or unlawful stock purchases or
redemptions under Section 174 of the DGCL, and (iv) for any transaction from
which the director derived an improper personal benefit.

The Company's Bylaws provide indemnification of the Company's directors and
officers, both past and present, to the fullest extent permitted by the DGCL,
and allow the Company 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 Bylaws. The Company's
Bylaws will also authorize the Company to purchase and maintain insurance on
behalf of an officer or director, past or present, against any liability
asserted against him in any such capacity whether or

II-1
<PAGE> 139

not the Company would have the power to indemnify him against such liability
under the provisions of the Restated Certificate of Incorporation or Section 145
of the DGCL.

The Company has entered into indemnification agreements with each of its
directors and certain of its executive officers. The indemnification agreements
require the Company, among other things, to indemnify such directors and
officers against certain liabilities that may arise by reason of their status or
service as directors or officers (other than liabilities arising from willful
misconduct of a culpable nature), and to advance their expenses incurred as a
result of any proceeding against them as to which they could be indemnified.

The Underwriting Agreement filed herewith as Exhibit 1.1 provides for the
indemnification by the Underwriters of directors and certain officers of the
Company against certain liabilities.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On April 21, 1994, Messrs. Miller, Kennedy and Congdon each subscribed for
50 shares of the Class B Common Stock, at a price per share of $2.00 per share
(the "Initial Share Subscription").

The Initial Share Subscription has been effected pursuant to the exemption
from registration under Section 4(2) of the Securities Act in reliance, in part,
on each of the subscribers' representations and warranties set forth in their
respective subscription agreements and based on their status as the Principal
Executive Officers of the Company.

The Company and the Exchange Stockholders entered into the Exchange
Agreement providing for the exchange of all of the shares of common stock of the
corporations that owned the Albany and Rochester, New York, Richmond, Virginia
and San Diego, California Budget franchise operations for shares of Common
Stock. Pursuant to the Exchange Agreement, the Exchange Stockholders received
the following shares of Common Stock:

<TABLE>
<CAPTION>
STOCKHOLDER SHARES
----------- ------
<S> <C>
Sanford Miller........................................ 905,750 Class B Common Stock
Jeffrey Congdon....................................... 515,350 Class B Common Stock
John Kennedy.......................................... 515,350 Class B Common Stock
Brian Britton......................................... 215,000 Class A Common Stock
Richard Hinkle........................................ 150,000 Class A Common Stock
Richard Sapia......................................... 198,400 Class A Common Stock
</TABLE>

The Share Exchange was effected pursuant to the exemption from registration
under Section 4(2) of the Securities Act in reliance, in part, on each of the
Exchange Stockholders' representations and warranties set forth in the Exchange
Agreement and based on their status as executive managers of the Company.

In November 1994, the Company issued an aggregate of 18,500 shares of Class
A Common Stock to the stockholders of Fort Wayne Rental Group, Inc. ("Fort
Wayne") in exchange for all of the outstanding shares of capital stock of Fort
Wayne (the "Fort Wayne Acquisition"). The Class A Common Stock issued in the
Fort Wayne Acquisition were issued to the following persons: Sanford
Miller -- 7,400 shares, Richard Sapia -- 6,475 shares, and Andrew Klein -- 4,625
shares. Such shares of Class A Common Stock were issued pursuant to the
exemption from registration under Section 4(2) of the Securities Act in
reliance, in part, on the representations and warranties set forth in the Fort
Wayne Acquisition agreement.

In January 1995, the Company issued 13,483 shares of Class A Common Stock
to MacKay Car & Truck Rentals, Inc. in partial consideration for all of the
outstanding shares of capital stock of McKay Car & Truck Rentals, Inc. (the
"Charlotte Acquisition"). The shares of Class A Common Stock issued in the
Charlotte Acquisition were issued pursuant to the exemption registration under
Section 4(2) of the Securities Act in reliance, in part, upon the
representations and warranties set forth in the Charlotte Acquisition agreement.

In March 1995, the Company issued 157,333 shares of Class A Common Stock to
the shareholders of Rental Car Resources, Inc. ("Resources") in exchange for all
of the outstanding shares of Rental Car Resources, Inc. (the "Hartford
Acquisition"). The shares of Class A Common Stock issued in the Hartford
Acquisition were

II-2
<PAGE> 140

issued pursuant to the exemption from registration under Section 4(2) of the
Securities Act in reliance, in part, on the representations and warranties set
forth in the Hartford Acquisition agreement.

In October 1995, the Company issued 1,050,000 shares of Class A Common
Stock to Budget Rent a Car of Southern California ("SoCal") in exchange for all
of the outstanding shares of BRAC-OPCO, Inc. (the "Los Angeles Acquisition").
The shares of Class A Common Stock issued in the Los Angeles Acquisition were
issued pursuant to the exemption from registration under Section 4(2) of the
Securities Act in reliance, in part, on SoCal's representations and warranties
set forth in the Los Angeles Acquisition agreement.

In February 1996, the Company issued 272,727 shares of Class A Common Stock
to Katzin Investments L.C. in partial consideration for all of the outstanding
shares of capital stock of Arizona Rent-A-Car Systems, Inc. (the "Phoenix
Acquisition"). The shares of Class A Common Stock issued in the Phoenix
Acquisition were issued pursuant to the exemption from registration under
Section 4(2) of the Securities Act in reliance, in part, upon the
representations and warranties set forth in the Phoenix Acquisition agreement.

In December 1996, the Company issued $80,000,000 of 7.0% Convertible
Subordinated Notes due 2003 (the "Convertible Subordinated Notes") in a private
transaction to certain insurance companies. The Convertible Subordinated Notes
are convertible into 3,986,049 shares of Class A Common Stock of the Company.
The Convertible Subordinated Notes were issued pursuant to the exemption from
registration under Section 4(2) of the Securities Act in reliance, in part, upon
the representations and warranties set forth in the Note Purchase Agreement.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits:

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------- -----------
<C> <C> <S>
*1.1 -- Form of Underwriting Agreement.
2.1 -- Share Exchange Agreement dated April 25, 1994 among Team
Rental Group, Inc., Sanford Miller, Jeffrey Congdon, John
Kennedy, Brian Britton, Richard Hinkle and Richard Sapia
(incorporated by reference to Exhibit 10.24 to the Company's
Registration Statement on Form S-1, File No. 33-78274, dated
April 28, 1994).
2.2 -- First Amendment to Share Exchange Agreement dated June 13,
1994 among Team Rental Group, Inc., Sanford Miller, Jeffrey
Congdon, John Kennedy, Brian Britton, Richard Hinkle and
Richard Sapia (incorporated by reference to Exhibit 10.36 to
Amendment No. 1 to the Company's Registration Statement on
Form S-1, File No. 33-78274, dated June 17, 1994).
2.3 -- Second Amendment to Share Exchange Agreement dated July 5,
1994 among Team Rental Group, Inc., Sanford Miller, Jeffrey
Congdon, John Kennedy, Brian Britton, Richard Hinkle and
Richard Sapia (incorporated by reference to Exhibit 10.38 to
Amendment No. 2 to the Company's Registration Statement on
Form S-1, File No. 33-78274, dated July 7, 1994).
2.4 -- Agreement, dated October 20, 1995, among Team Rental Group,
Inc., Team Rental of Southern California, Inc., BRAC-OPCO,
Inc., and Budget Rent-A-Car of Southern California
(incorporated by reference to Exhibit 2.5 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1995).
2.5 -- Stock Purchase Agreement, dated as of December 21, 1995, by
and among the Company, Arizona Rent-A-Car Systems, Inc.,
David Katzin, Michael Katzin, Jon David Katzin, Gabrielle De
Lavigne, the David Katzin Irrevocable Trust (dated November
17, 1989) and Katzin Investments L.C. (incorporated by
reference to Exhibit 2.1 to the Company's Current Report on
Form 8-K dated December 21, 1995).
2.6 -- Stock Purchase Agreement, dated as of November 1, 1994, by
and between Team Rental of Ft. Wayne, Inc., Sanford Miller,
Richard Sapia and Andrew Klein (incorporated by reference to
Exhibit 10.38 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994).
</TABLE>

II-3
<PAGE> 141

<TABLE>
<C> <C> <S>
2.7 -- Common Stock Purchase Agreement, dated as of January 13, 1997, between John J. Nevin and Team Rental
Group, Inc.
2.8 -- Budget Stock Purchase Agreement, dated as of January 13, 1997, between Budget Rent A Car Corporation
and Team Rental Group, Inc.
2.9 -- Preferred Stock Purchase Agreement, dated as of January 13, 1997, between Ford Motor Company and Team
Rental Group, Inc.
2.10 -- Form of Preferred Stockholders Agreement between Ford Motor Company and Team Rental Group, Inc.
3.1 -- Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to
Exhibit 3.1 to the Company's Registration Statement on Form S-1, File No. 33-78274, dated April 28,
1994).
3.2 -- Amendment to Amended and Restated Certificate of Incorporation of the Company (incorporated by
reference to Exhibit 3.2 to Amendment No. 2 to the Company's Registration Statement on Form S-1, File
No. 333-4507, dated June 28, 1996).
**3.3 -- Form of Amendment to Amended and Restated Certificate of Incorporation of the Company.
*3.4 -- Form of Team Rental Group, Inc. Series A Preferred Stock Certificate of Designations.
3.5 -- By-Laws of the Company (incorporated by reference to Exhibit 3.2 to the Company's Registration
Statement on Form S-1, File No. 33-78274, dated April 28, 1994).
4.1 -- Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1995).
4.2 -- Base Indenture between Team Fleet Financing Corporation, as Issuer, Team Rental Group, Inc., as
Servicer and Team Interestholder, and Bankers Trust Company, as Trustee, relating to Rental Car Asset
Backed Notes (incorporated by reference to Exhibit 4.1 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1994).
4.3 -- Supplemental Indenture relating to Rental Car Asset Backed Notes (incorporated by reference to
Exhibit 4.2 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994).
4.4 -- Base Indenture among BRAC SOCAL Funding Corporation, as Issuer, BRAC-OPCO, Inc., as Servicer and
Retained Interestholder, and Bankers Trust Company, as Trustee (incorporated by reference to Exhibit
4.5 to the Company's Annual Report on Form 10-K for the year ended December 31, 1995)
4.5 -- Series 1995-1 Supplement to Base Indenture among BRAC SOCAL Funding Corporation, as Issuer,
BRAC-OPCO, Inc., as Servicer and Retained Interestholder, and Bankers Trust Company, as Trustee
(incorporated by reference to Exhibit 4.6 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995).
4.6 -- Supplement No. 1 to Indenture, dated as of October 20, 1995, among BRAC SOCAL Funding Corporation,
BRAC-OPCO, Inc., Team Rental of Southern California, Inc. and Bankers Trust Company, as Trustee
(incorporated by reference to Exhibit 4.7 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995).
4.8 -- Registration Rights Agreement, dated as of August 25, 1994, among the Company, Brian Britton, Jeffrey
Congdon, Richard Hinkle, John Kennedy, Sanford Miller and Richard Sapia (incorporated by reference to
Exhibit 10.23 to the Company's Annual Report on Form 10-K for the year ended December 31, 1994).
4.9 -- First Amendment to Registration Rights Agreement, dated as of November 1, 1994, among the Company,
Brian Britton, Jeffrey Congdon, Richard Hinkle, John Kennedy, Sanford Miller and Richard Sapia
(incorporated by reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994).
4.10 -- Letter Agreement, dated as of November 1, 1994, between Andrew Klein and the Company acknowledging
that Andrew Klein is a party to the Registration Rights Agreement, dated as of August 25, 1994, as
amended (incorporated by reference to Exhibit 10.25 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1994).
</TABLE>

II-4
<PAGE> 142

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------- -----------
<C> <C> <S>
4.11 -- Registration Rights Agreement, dated as of October 20, 1995,
between Team Rental Group, Inc. and Budget Rent-A-Car of
Southern California (incorporated by reference to Exhibit
4.12 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995).
4.12 -- Registration Rights Agreement, dated as of December 1, 1996,
between Team Rental Group, Inc. and the holders of the
Convertible Subordinated Notes
4.13 -- Warrant No. 1-1994, dated as of August 24, 1994, to purchase
175,000 shares of Class A Common Stock, par value $.01 per
share, of the Company, issued to Budget Rent-A-Car
Corporation (incorporated by reference to Exhibit 10.26 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1994).
4.14 -- NationsBank Warrant dated as of April 26, 1996.
**4.15 -- Amended and Restated Base Indenture dated as of December 1,
1996 among Team Fleet Financing Corporation, as Issuer, Team
Rental Group, Inc., as Servicer and Team Interestholder, and
Bankers Trust Company, as Trustee.
**4.16 -- Series 1996-1 Supplement to the Amended and Restated Base
Indenture dated as of December 1, 1996 among Team Fleet
Financing Corporation, as Issuer, Team Rental Group, Inc.,
as Servicer and Team Interestholder, and Bankers Trust
Company, as Trustee.
**4.17 -- Amended and Restated Master Motor Vehicle Lease Agreement
dated as of December 1, 1996 among Team Fleet Financing
Corporation, as Lessor, Team Rental Group, Inc., as
Guarantor, and certain subsidiaries of Team Rental Group,
Inc., as lessees.
**4.18 -- Motor Vehicle Lease Agreement Series 1996-1 dated as of
December 1, 1996 among Team Fleet Financing Corporation, as
Lessor, Team Rental Group, Inc., as Guarantor, and certain
subsidiaries of Team Rental Group, Inc., as lessees.
**5.1 -- Opinion of King & Spalding.
10.1 -- Amended and Restated Sublicense Agreement, dated as of
October 20, 1995, between Budget Rent-A-Car of Southern
California and Team Rental of Southern California, Inc.,
along with Corporate Guaranty of Team Rental Group, dated as
of October 20, 1995 (incorporated by reference to Exhibit
10.11 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995).
10.2 -- Lease Agreement dated September 1, 1993 between Miller and
Hinkle, a Florida general partnership, and Capital City
Leasing, Inc., as amended by First Amendment dated as of
July 1, 1994 (Henrico County, Virginia) (incorporated by
reference to Exhibit 10.41 to Amendment No. 3 to the
Company's Registration Statement on Form S-1, File No.
33-78274, dated August 12, 1994).
10.3 -- Lease Agreement dated June 1, 1994 between Miller and
Hinkle, a Florida general partnership, and Capital City
Leasing, Inc. (Chesterfield County, Virginia) (incorporated
by reference to Exhibit 10.25 to Amendment No. 1 to the
Company's Registration Statement on Form S-1, File No.
333-4507, dated June 13, 1996).
10.4 -- Lease Agreement dated as of September 12, 1995 between MCK
Real Estate Corporation, Team Car Sales of Richmond, Inc.
and Team Rental Group, Inc. (incorporated by reference to
Exhibit 10.24 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1995).
10.5 -- Agreement of Lease dated as of August 31, 1995 between MCK
Real Estate Corporation and Team Rental of Philadelphia,
Inc. (incorporated by reference to Exhibit 10.25 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1995).
+**10.6 -- Form of Supply Agreement among Ford Motor Company, Team
Rental Group, Inc. and Budget Rent A Car Corporation.
+**10.7 -- Form of Advertising Agreement between Ford Motor Company and
Budget Rent A Car Corporation.
10.8 -- Credit Agreement dated May 16, 1995 by and among Team Rental
Group, Inc., Team Fleet Services Corporation and BankOne
Indianapolis, N.A. (incorporated by reference to Exhibit
10.42 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995).
</TABLE>

II-5
<PAGE> 143

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------- -----------
<C> <C> <S>
10.9 -- First Amendment to BankOne Credit Agreement dated November
1, 1995 (incorporated by reference to Exhibit 10.43 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1995).
10.10 -- Second Amendment to BankOne Credit Agreement dated February
2, 1996 (incorporated by reference to Exhibit 10.44 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1995).
10.11 -- Form of World Omni, Inc. Term Note (incorporated by
reference to Exhibit 10.45 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995).
10.12 -- Promissory Note, dated October 20, 1995, from Team Rental of
Southern California, Inc. to Budget Rent-A-Car of Southern
California in the principal amount of approximately
$4,775,000 (incorporated by reference to exhibit 10.46 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1995).
10.13 -- Promissory Note, dated February 27, 1996, from the Company
to Katzin Investments L.C. in the aggregate principal amount
of $10,000,000 (incorporated by reference to Exhibit 10.47
to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995).
10.14 -- Term Note dated February 27, 1996 from NationsBank, N.A.
(South) to the Company (incorporated by reference to exhibit
10.48 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995).
10.15 -- Amendment No. 1 to Term Note dated April 2, 1996 from
NationsBank, N.A. (South) to the Company (incorporated by
reference to exhibit 10.2 to Form 10-Q for the quarter ended
March 31, 1996).
10.16 -- Amendment No. 2 to Term Note dated May 27, 1996 from
NationsBank, N.A. (South to the Company (incorporated by
reference to Exhibit 10.47 to Amendment No. 1 to the
Company's Registration Statement on Form S-1, File No.
333-4507, dated June 13, 1996).
10.17 -- Revolving Credit Agreement by and between VPSI, Inc. and
NationsBank, N.A. (South) dated February 6, 1996
(incorporated by reference to exhibit 10.4 to the Company's
Form 10-Q for the quarter ended March 31, 1996).
10.18 -- Amendment and Waiver No. 1 to the Revolving Credit Agreement
and Security Agreement by and between VPSI, Inc. and
NationsBank, N.A. (South) dated March 28, 1996 (incorporated
by reference to Exhibit 10.5 to the Company's Form 10-Q for
the quarter ended March 31, 1996).
10.19 -- Revolving Credit Agreement dated as of May 31, 1996 among
Team Fleet Services Corporation, NationsBank, N.A. (South
and certain Lenders (incorporated by reference to Exhibit
10.50 to Amendment No. 1 to the Company's Registration
Statement on Form S-1, File No. 333-4507, dated June 13,
1996).
10.20 -- Subordinated Notes Purchase Agreement, dated as of December
1, 1996, by and between the Company and the investors listed
therein.
10.21 -- Subordination Agreement, dated as of October 20, 1995, among
Budget Rent-A-Car of Southern California, BRAC-OPCO, Inc.,
Team Rental Group, Inc. and Team Rental of Southern
California (incorporated by reference to Exhibit 10.49 to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1995).
10.22 -- Shareholders' Agreement, dated as of October 20, 1995, by
and among Team Rental Group , Inc., the holders of the
Company's Class B Common Stock, and Budget Rent-A-Car of
Southern California (incorporated by reference to Exhibit
10.50 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995)
10.23 -- 1994 Incentive Stock Option Plan (incorporated by reference
to Exhibit 10.27 to the Company's Registration Statement on
Form S-1, File No. 33-78274, dated April 28, 1994).
10.24 -- Amendment No. 1 to 1994 Incentive Stock Option Plan
(incorporated by reference to Exhibit 10.54 to Amendment No.
2 to the Company's Registration Statement on Form S-1, File
No. 333-4507, dated June 28, 1996).
10.25 -- 1994 Director's Plan (incorporated by reference to Exhibit
10.28 to the Company's Registration Statement on Form S-1,
File No. 33-78274, dated April 28, 1994).
</TABLE>

II-6
<PAGE> 144

<TABLE>
<C> <C> <S>
10.26 -- Indemnification Agreement dated April 25, 1994 between the Company and Sanford Miller (incorporated
by reference to Exhibit 10.29 to the Company's Registration Statement on Form S-1, File No. 33-78274,
dated April 28, 1994).
10.27 -- Indemnification Agreement dated April 25, 1994 between the Company and John Kennedy (incorporated by
reference to Exhibit 10.30 to the Company's Registration Statement on Form S-1, File No. 33-78274,
dated April 28, 1994).
10.28 -- Indemnification Agreement dated April 25, 1994 between the Company and Jeffrey Congdon (incorporated
by reference to Exhibit 10.31 to the Company's Registration Statement on Form S-1, File No. 33-78274,
dated April 28, 1994).
10.29 -- Indemnification Agreement dated April 25, 1994 between the Company and Ronald Agronin (incorporated
by reference to Exhibit 10.32 to the Company's Registration Statement on Form S-1, File No. 33-78274,
dated April 28, 1994).
10.30 -- Indemnification Agreement dated April 25, 1994 between the Company and Stephen Weber (incorporated by
reference to Exhibit 10.33 to the Company's Registration Statement on Form S-1, File No. 33-78274,
dated April 28, 1994).
16.1 -- Letter re: Change in Certifying Accountant (incorporated by reference to Exhibit 16 to the Company's
Current Report on Form 8-K dated November 26, 1996, as amended).
21.1 -- Subsidiaries of the Company.
**23.1 -- Consent of Deloitte & Touche LLP.
**23.2 -- Consent of Arthur Andersen LLP.
**23.3 -- Consent of KPMG Peat Marwick LLP.
**23.4 -- Consent of King & Spalding (included in Exhibit 5.1).
**27.1 -- Financial data schedule (for SEC reporting purposes only)
</TABLE>

- ---------------

* To be filed by amendment.

** Filed herewith.

+ The Company has applied for confidential treatment of portions of this
Exhibit. Accordingly, portions thereof have been omitted and filed separately
with the Commission.

(b) Financial Statement Schedules of TEAM Rental Group, Inc. and
Subsidiaries:

All schedules are omitted because the information is not required or
because the information is included in the combined financial statements or
notes thereto.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions 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.

II-7
<PAGE> 145

The undersigned registrant hereby undertakes that:

1. For purposes of determining any liability under the Securities Act
of 1933, 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 Securities Act shall be deemed to be a part of this
registration statement as of the time it was declared effective.

2. For the purpose of determining any liability under the Securities
Act of 1933, 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-8
<PAGE> 146

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Atlanta, State of Georgia
on March 27, 1997.

TEAM RENTAL GROUP, INC.

By: /s/ SANFORD MILLER

------------------------------------

Sanford Miller

Chairman of the Board and

Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on this 27th day of March, 1997.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>

/s/ SANFORD MILLER Chairman of the Board and Chief Executive
- ----------------------------------------------------- Officer (Principal Executive Officer) and
Sanford Miller Director

* President, Chief Operating Officer and
- ----------------------------------------------------- Director
John Kennedy

* Chief Financial Officer (Principal Financial
- ----------------------------------------------------- and Accounting Officer) and Director
Jeffrey Congdon

* Director
- -----------------------------------------------------
Ronald D. Agronin

* Director
- -----------------------------------------------------
Stephen L. Weber

* Director
- -----------------------------------------------------
Jeffrey Mirkin

* Director
- -----------------------------------------------------
Alan Liker

* Director
- -----------------------------------------------------
James F. Calvano

* Director
- -----------------------------------------------------
Martin P. Gregor

*By: /s/ SANFORD MILLER
-----------------------------------------------
Sanford Miller
Attorney-in-fact
</TABLE>

II-9

<PAGE> 1

EXHIBIT 3.3

TEXT OF PROPOSED
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
TEAM RENTAL GROUP, INC.

Team Rental Group, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:

1. That pursuant to an action duly and properly taken by the Board of
Directors of the Corporation, resolutions were duly adopted setting forth a
proposed amendment of the Amended and Restated Certificate of Incorporation
of the Corporation, declaring said amendment to be advisable and referring
said amendment to the stockholders of the Corporation for consideration
thereof and approval and adoption by the stockholders at the annual meeting
of the stockholders of the Corporation to be duly called by the Board of
Directors of the Corporation (the "Annual Meeting"). The resolution setting
forth the proposed amendment (the "Amendment") is as follows:

NOW, THEREFORE, BE IT RESOLVED, that Section FIRST of the Company's
Certificate of Incorporation is hereby amended by deleting Section FIRST
in its entirety and replacing it with the following:

"FIRST: Name. The name of the Corporation is Budget Group, Inc."

FURTHER RESOLVED, that Section FOURTH of the Company's Certificate
of Incorporation is hereby amended by deleting paragraph A of Section
FOURTH in its entirety and replacing it with the following:

"FOURTH: A. Authorized Capital.

The Corporation is authorized to issue 37,750,000 shares of
capital stock, consisting of 37,500,000 shares of common stock, par
value $.01 per share (the "Common Stock"), and 250,000 shares of
preferred stock, par value $.01 per share (the "Preferred Stock"). Of
the shares of Common Stock, 35,000,000 shares shall be designated
"Class A Common Stock" and 2,500,000 shares shall be designated
"Class B Common Stock." The rights, preferences, privileges and
restrictions granted and imposed upon the Preferred Stock, the Class
A Common Stock and the Class B Common Stock are set forth below."

2. That thereafter, pursuant to a resolution of the Board of Directors
calling for the Amendment to be submitted to a vote of the stockholders at
the Annual Meeting, the Amendment was approved and adopted by the
stockholders at the Annual Meeting, at which meeting the necessary number
of shares were voted in favor of the Amendment in accordance with Section
242 of the General Corporation Law of the State of Delaware.

3. That the Amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.

4. The undersigned officer of the Corporation hereby acknowledges that
the foregoing is the act and deed of the Corporation and that the facts
stated herein are true.
<PAGE> 2

IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed to this Certificate and has caused this Certificate to be signed this
day of April, 1997.

By:

------------------------------------
Sanford Miller
Chairman and Chief Executive Officer

<PAGE> 1
EXHIBIT 4.15

TEAM FLEET FINANCING CORPORATION,
as Issuer

TEAM RENTAL GROUP, INC.,
as Servicer

TEAM RENTAL GROUP, INC.,
as Team Interestholder,

and

BANKERS TRUST COMPANY,

as Trustee

____________________________________

AMENDED AND RESTATED

BASE INDENTURE

Dated as of December 1, 1996

____________________________________

Rental Car Asset Backed Notes
(Issuable in Series)

<PAGE> 2

TABLE OF CONTENTS

ARTICLE 1.

DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Cross-References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3. Accounting and Financial Determinations; No Duplication . . . . . . . . . . . . . . . . . . 2
Section 1.4. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE 2.

THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.1. Designation and Terms of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.2. Notes Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.3. Supplement For Each Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.4. Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.5. Form of Notes; Book Entry Provisions;
Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.6. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.7. Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.8. Noteholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.9. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.10. Legending of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.11. Replacement Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.12. Treasury Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.13. Temporary Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.14. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.15. Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.16. Book-Entry Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.17. Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.18. Definitive Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.19. Acquisition of Notes by Lessee Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

ARTICLE 3.

SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.1. Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.2. Certain Rights and Obligations
of TFFC Unaffected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 3.3. Performance of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 3.4. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 3.5. Certificates of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 3.6. Release of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

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Section 3.7. Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 3.8. Stamp, Other Similar Taxes
and Filing Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

ARTICLE 4.

THE SERVICER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 4.1. Acceptance of Appointment and Other Matters Relating to the Servicer . . . . . . . . . . . 34
Section 4.2. Servicing Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 4.3. Representations, Warranties and
Covenants of the Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.4. Reports and Records for the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.5. Annual Servicer's Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 4.6. Annual Servicing Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 4.7. Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.8. Notices to Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.9. Liability of the Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.10. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer . . . . . . . 43
Section 4.11. Limitation on Liability of the Servicer and Others . . . . . . . . . . . . . . . . . . . . 44
Section 4.12. Indemnification of TFFC and the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.13. The Servicer Not to Resign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 4.14. Access to Certain Documentation and Information Regarding the Collateral . . . . . . . . . 46
Section 4.15. Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 4.16. Servicer Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 4.17. Trustee to Act; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 4.18. Notification to Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.19. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

ARTICLE 5.

ALLOCATION AND APPLICATION OF COLLECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.1. Collection Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 5.2. Collections and Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 5.3. Determination of Monthly Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 5.4. Determination of Monthly Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 5.5. Paired Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

ARTICLE 6.

DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS . . . . . . . . . . . . . . . . . . 58
Section 6.1. Distributions in General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 6.2. Distributions to Team Distribution Account . . . . . . . . . . . . . . . . . . . . . . . . 59

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Section 6.3. Optional Repurchase of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 6.4. Monthly Noteholders' Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

ARTICLE 7.

REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 7.1. Corporate Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 7.2. Corporate and Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.3. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.4. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.5. No ERISA Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.6. Tax Filings and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.7. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.8. Investment Company Act; Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.9. Regulations G, T, U and X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.10. No Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.11. No Violation of Charter, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.12. Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.13. Stock Ownership; Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.14. Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 7.15. Binding Effect of the Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.16. Non-Existence of Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.17. Repurchase Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

ARTICLE 8.

COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 8.1. Payment of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 8.2. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 8.3. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 8.4. Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 8.5. Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 8.6. Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . 70
Section 8.7. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.8. Inspection of Property, Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.9. Compliance with Related Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 8.10. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.11. Notice of Material Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.12. Further Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.13. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 8.15. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 8.16. Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 8.17. Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 8.18. Sales of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 8.19. Acquisition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 8.20. Dividends, Officers' Compensation, etc . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 8.21. Name; Principal Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

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Section 8.22. Organizational Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 8.23. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 8.24. No Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 8.25. Other Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 8.26. Maintenance of Separate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 8.27. Rule 144A Information Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.28. Acquisition of Vehicles by TFFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.29. Maintenance of Rating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

ARTICLE 9.

AMORTIZATION EVENTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 9.1. Amortization Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 9.2. Rights of the Trustee upon Amortization Event or Certain Other Events of Default . . . . . 80
Section 9.3. Special Provisions Concerning Remedies and Sale Upon Manufacturer Event of Default or
Inability to Turn Back under Repurchase Program . . . . . . . . . . . . . . . . . . . . . . 83
Section 9.4. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 9.5. Waiver of Past Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 9.6. Control by Required Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 9.7. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 9.8. Unconditional Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . 87
Section 9.9. Collection Suit by the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 9.10. The Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 9.11. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 9.12. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 9.13. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 9.14. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 9.15. Reassignment of Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

ARTICLE 10.

THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 10.1. Duties of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 10.2. Rights of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 10.3. Individual Rights of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Section 10.4. The Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Section 10.5. Notice of Potential Amortization Events . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 10.6. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 10.7. Replacement of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 10.8. Successor Trustee by Merger, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 10.9. Eligibility Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 10.10. Appointment of Co-Trustee or Separate Trustee . . . . . . . . . . . . . . . . . . . . . . . 95

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Section 10.11. Representations and Warranties of
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 10.12. Knowledge of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

ARTICLE 11.

DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 11.1. Termination of TFFC's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 11.2. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
Section 11.3. Repayment to TFFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

ARTICLE 12.

AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Section 12.1. Without Consent of the Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Section 12.2. With Consent of the Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Section 12.3. Supplements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 12.4. Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 12.5. Notation on or Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 12.6. The Trustee to Sign Amendments, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

ARTICLE 13.

MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 13.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 13.2. Communication by Noteholders With Other Noteholders . . . . . . . . . . . . . . . . . . . . 105
Section 13.3. Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . . . 106
Section 13.4. Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . . 106
Section 13.5. Rules by the Trustee and the Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . 106
Section 13.6. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 13.7. Duplicate Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 13.8. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 13.9. Payment on Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 13.10. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Section 13.11. No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . . . . . . . . . 107
Section 13.12. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 13.13. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 13.14. Counterpart Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 13.15. Table of Contents, Headings, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 13.16. Termination; Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section 13.17. No Bankruptcy Petition Against TFFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Section 13.18. No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Section 13.19. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Section 13.20. Special Provision Regarding Filing of Certificates of Title . . . . . . . . . . . . . . . . 110

</TABLE>
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<PAGE> 7

<TABLE>
<S> <C> <C>
Section 13.21. Special Provision Regarding Affiliate Sale Transactions . . . . . . . . . . . . . . . . . . 111
Section 13.22. Special Provision Regarding Auction Acquired Vehicles . . . . . . . . . . . . . . . . . . . 113
</TABLE>

EXHIBITS AND SCHEDULES

SCHEDULE 1 DEFINITIONS LIST (Section 1.1)

EXHIBIT A-1 FORM OF TRANSFER CERTIFICATE (Section 2.8)

EXHIBIT A-2 FORM OF OPINION OF COUNSEL

EXHIBIT A-3 FORM OF TRANSFER CERTIFICATE FOR EXCHANGE OR TRANSFER FROM
RESTRICTED GLOBAL NOTE TO TEMPORARY GLOBAL NOTE (Section 2.9)

EXHIBIT A-4 FORM OF TRANSFER CERTIFICATE (RESTRICTED GLOBAL NOTE TO
PERMANENT GLOBAL NOTE) (Section 2.9)

EXHIBIT A-5 FORM OF TRANSFER CERTIFICATE FOR TRANSFER OR EXCHANGE FROM
TEMPORARY GLOBAL NOTE TO RESTRICTED GLOBAL NOTE)

EXHIBIT B FORM OF MONTHLY SERVICER'S CERTIFICATE (Section 4.4(b))

EXHIBIT C FORM OF ANNUAL SERVICER'S CERTIFICATE (Section 4.5)

EXHIBIT D FORM OF MONTHLY NOTEHOLDERS' STATEMENT (Section 6.4)

EXHIBIT E FORM OF CLEARING SYSTEM CERTIFICATE

EXHIBIT F FORM OF CERTIFICATE OF BENEFICIAL OWNERSHIP

EXHIBIT G CERTIFICATE OF TITLE LOCATIONS

EXHIBIT H FORM OF POWER OF ATTORNEY

EXHIBIT I FORM OF ASSIGNMENT AGREEMENT

EXHIBIT J CERTIFICATE RE: SECTION 13.20(a)

- vi -
<PAGE> 8

AMENDED AND RESTATED BASE INDENTURE (this "Indenture"), dated
as of December 1, 1996, among TEAM FLEET FINANCING CORPORATION, a Delaware
corporation, as issuer ("TFFC"), TEAM RENTAL GROUP, INC., a Delaware
corporation ("Team"), as servicer (in such capacity, the "Servicer"), Team, as
the holder of the Team Interest (as hereinafter defined) (in such capacity, the
"Team Interestholder"), 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, TFFC, Team and the Trustee are parties to a Base
Indenture, dated as of July 1, 1994 (the "Prior Indenture");

WHEREAS, TFFC and Team desire to amend and restate the Prior
Indenture in its entirety as hereinafter set forth, and the Trustee hereby
consents thereto;

WHEREAS, TFFC has duly authorized the execution and delivery
of this Indenture to provide for the issuance from time to time of one or more
series of TFFC'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 TFFC, in accordance with its terms, have been
done, and TFFC proposes to do all the things necessary to make the Notes, when
executed by TFFC and authenticated and delivered by the Trustee hereunder and
duly issued by TFFC, the legal, valid and binding obligations of TFFC 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, that the
Prior Indenture be amended and restated in its entirety 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

<PAGE> 9

be amended or modified from time to time in accordance with the provisions
hereof.

Section 1.2. Cross-References.

Unless otherwise specified, references in this Indenture and
in each other Related Document to any Article or Section are references to such
Article or Section of this Indenture or such other Related Document, as the
case may be and, unless otherwise specified, references in any Article, Section
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.

Unless the context otherwise requires: (a) a term has the
meaning assigned to it; (b) "or" is not exclusive; (c) words in the singular
include the plural, and in the plural include the singular; and (d) provisions
apply to successive events and transactions.

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 TFFC. 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

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<PAGE> 10

Indenture is unlimited. The Notes shall be in denominations of $1,000,000 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 TFFC 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 Request at least three (3) Business Days in
advance of the Closing Date for such Series and upon delivery by TFFC 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 satisfactory to the Trustee
executed by TFFC, the Team Interestholder, the Servicer and the
Trustee and specifying the Principal Terms of such new Series;

(d) written confirmation that the Rating Agency Condition
shall have been satisfied with respect to such issuance;

(e) an Officers' Certificate 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, Lessee Partial Wind-Down Event,
Manufacturer Event of Default, Potential Amortization Event, Potential
Enhancement Agreement Event of Default, Potential Lease Event of
Default, Potential Lessee Partial Wind-Down Event or Potential
Manufacturer 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
overcollateralization of any Series of Notes with respect to which
credit enhancement is provided by overcollateralization or result

- 3 -
<PAGE> 11

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 TFFC 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 TFFC 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;

(f) unless otherwise specified in the related Supplement,
an Opinion of Counsel, subject to the assumptions and qualifications
stated therein, and in a form substantially acceptable to the Trustee,
dated the applicable Closing Date, substantially to the effect that:

(i) (x) the new Series of Notes will be treated
as indebtedness of TFFC for Federal and Virginia state income
tax purposes, (y) the issuance of such Series will not
adversely affect the Federal or Virginia state income tax
characterization of the Outstanding Notes of any Series, and
(z) if the Servicer then performs any of its servicing
obligations within the State of Florida (a) if a Noteholder
has no nexus with the State of Florida for purposes of the
Florida intangible personal property tax, the purchase of the
Notes from TFFC will not cause the Notes to be subject to the
Florida intangible personal property tax, (b) a Noteholder has
no nexus with the State of Florida for purposes of the Florida
intangible personal property tax when such Noteholder is not
domiciled in Florida, does not have a residence or office in
Florida, is not an entity organized or created under the laws
of Florida, does not transact business of any kind in Florida,
and does not own, manage or control the Notes from Florida,
and (c) the ownership of the Notes, in and of itself, would
not cause a Noteholder to be transacting business in Florida,
nor would a nexus with Florida, if any, on the part of TFFC or
the Servicer affect the determination of whether a Noteholder
owns, manages or controls the Notes from Florida;

- 4 -
<PAGE> 12

(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 TFFC, the Servicer and each Lessee is
duly incorporated under the jurisdiction of its incorporation
and 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 TFFC, the
Servicer or any Lessee is a party have been duly authorized,
executed and delivered by TFFC, the Servicer or each 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 TFFC 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 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 TFFC, the
Servicer or any Lessee is a party are legal, valid and binding
agreements of TFFC, the Servicer or each 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;

- 5 -
<PAGE> 13

(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 each of the Leases as a "true
lease" and not as a financing vehicle, (C) the analysis of
substantive consolidation of the assets of TFFC with the
assets of Team or any of the Lessees in the event of the
insolvency of Team or any of the Lessees, (D) the status of
TFFC 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 TFFC'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 TFFC or any material breach or default of any
indenture, agreement or other instrument as a result of the
issuance of such Series of Notes by TFFC, as furnished by
Dechert Price & Rhoads (or other counsel retained by TFFC) 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;

(g) in respect of the first Series of Notes to be issued
under this Indenture, the Trustee shall have received an Officers'
Certificate dated the date of the issuance of such first Series of
Notes, in form satisfactory to the Trustee, that all Concurrent
Transactions (as such term is defined in the Placement Memorandum with
respect to such Series of Notes) have been completed and all Lessee
Sale Transactions intended to be completed pursuant to Section 2.1(b)
of each of the Leases on the date of the issuance of the first Series
of Notes have been completed; and

(h) such other matters as the Trustee may reasonably
require.

Upon satisfaction of such conditions, the Trustee shall authenticate and issue,
as provided above, such Series of Notes.

- 6 -
<PAGE> 14

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 12 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 Agency 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 that is to be
segregated by the Servicer and the Trustee and be solely for the benefit of the
Noteholders of such Segregated Series of Notes (such Collateral being referred
to as "Segregated Collateral"); provided, however, that no such Segregated
Series of Notes will be issued unless (x) the Rating Agency Condition is met,
(y) the Servicer 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 and the
Trustee will segregate the Collateral for such

- 7 -
<PAGE> 15

Segregated Series of Notes such that (x) the Segregated Series of Notes will be
secured solely 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 solely from the Segregated Collateral applicable to such
Segregated Series of Notes and the Noteholders with respect to the
non-Segregated Series of Notes will be entitled to allocations and
distributions arising solely from the non-Segregated Collateral, (C) the
Trustee will act as collateral agent under the Indenture (and in such capacity
the Trustee 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 the non-Segregated Series of
Notes and (y) hold its lien encumbering the non-Segregated Collateral for the
benefit of the non-Segregated Series of Notes and hold its lien encumbering the
Segregated Collateral for the benefit of the Segregated Series of Notes), (D)
the Servicer will 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, the "Financing Source" with
respect to such Series of Notes), (E) the Noteholders of any Segregated Series
of Notes will, subject to the limitations contained in this Base Indenture and
the applicable Supplement, be entitled to cause the Trustee to exercise
remedies under the Indenture solely on behalf of such Segregated Series of
Notes, (F) separate monthly reports and other information will be furnished
under the Indenture by the Trustee or the Servicer for the Segregated
Collateral, which monthly reports and other information will contain
substantially the same type 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 Agreement pertaining solely to
the Segregated Collateral will be executed and delivered by TFFC, as lessor,
the Lessees, as lessees, and Team, as guarantor, (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 "TFFC

- 8 -
<PAGE> 16

Agreements" and such other terms as may be appropriate, which revisions will
generally modify each such term to be two (or more in the event of multiple
Segregated Series of Notes) separate defined terms, one such defined term
pertaining to all non-Segregated Series of Notes and the other such defined
term (or terms) pertaining to the Segregated Series of Notes, 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.

Section 2.4. Execution and Authentication.

(a) An Authorized Officer shall sign the Notes for TFFC
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, TFFC may deliver Notes of any particular Series
executed by TFFC 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 manual signature of a Trust Officer (and
the Luxembourg agent (the "Luxembourg Agent"), if such Notes are listed on the
Luxembourg 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
acceptable to TFFC 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 TFFC or an Affiliate of TFFC. The
Trustee's certificate of authentication shall be in substantially the following
form:

- 9 -
<PAGE> 17

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 TFFC,
and TFFC shall deliver such Note to the Trustee for cancellation as provided in
Section 2.14 together with a written statement (which need not comply with
Section 13.3 and need not be accompanied by an Opinion of Counsel) stating that
such Note has never been issued and sold by TFFC, 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; Title.

(a) Restricted Global Note. Any Series of Notes, or any
class of such Series to be issued in the United States will be in registered
form and sold initially to institutional accredited investors within the
meaning of Regulation D under the Securities Act in reliance on an exemption
from the registration requirements of the Securities Act and thereafter to
qualified institutional buyers within the meaning of, and in reliance on, Rule
144A under the Securities Act ("Rule 144A") as provided in the applicable
Supplement and 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 TFFC 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.

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<PAGE> 18

(b) Temporary Global Note; Permanent Global Note. Any
Series of Notes, or any class of such Series, offered and sold 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 TFFC and
authenticated by the Trustee as provided in Section 2.4, for credit to the
subscribers' accounts at Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of Euroclear or 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 the Temporary Global Note and this Agreement. 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 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.

Section 2.6. Registrar and Paying Agent.

(a) TFFC 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"). TFFC 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. TFFC may change any Paying Agent or Registrar without prior
notice to any Noteholder. TFFC 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) TFFC 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. TFFC shall notify
the Trustee in writing of the name and address of any such Agent. If TFFC
fails to

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<PAGE> 19

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) TFFC 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, 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 TFFC (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;

(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 and forthwith
pay to the Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be
met by a Trustee hereunder at the time of its appointment; 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) TFFC 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

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<PAGE> 20

any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.

(c) Subject to applicable laws with respect to escheat of
funds, any money 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 TFFC on Company Request; and
the Holder of such Note shall thereafter, as an unsecured general creditor,
look only to TFFC for payment thereof (but only to the extent of the amounts so
paid to TFFC), and all liability of the Trustee or such Paying Agent with
respect to such trust money 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 TFFC 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, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to TFFC. The Trustee may also adopt and employ, at
the expense of TFFC, 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, TFFC shall furnish to the Trustee at least seven Business Days
before each Distribution 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.

When 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 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 the
Notes surrendered for transfer or exchange (a) shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to TFFC
and the Registrar, duly executed by the holder thereof or its attorney, duly
authorized in writing

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<PAGE> 21

and (b) shall be transferred or exchanged in compliance with the following
provisions:

(a) Transfer of Restricted Global Notes.

(i) 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

(ii) if such Note is being transferred to a
qualified institutional buyer (as defined in Rule 144A) in accordance
with Rule 144A or pursuant to an exemption from registration in
accordance with Regulation S, a certification to that effect (in
substantially the form of Exhibit A-1 hereto); or

(iii) if such Note is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act, a certification to that effect (in substantially the
form of Exhibit A-1 hereto) and an opinion of counsel acceptable to
TFFC and to the Registrar to the effect that such transfer is in
compliance with the Securities Act (in substantially the form of
Exhibit A-2 hereto).

(iv) Temporary Global Note to Permanent Global
Note. Interests in a Temporary Global Note as to which the Trustee has
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 TFFC shall execute and the Trustee shall authenticate and
deliver to DTC, or its nominee, for credit to the respective accounts
of the holders of Notes, a duly executed and authenticated Permanent
Global Note, representing the principal amount of interests in the
Temporary Global Note initially exchanged for interests in the
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 TFFC 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 the Temporary Global Note. Upon any exchange of
interests in a Temporary Global Note for interests in a Permanent
Global

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<PAGE> 22

Note, the Trustee shall endorse the Temporary Global Note to reflect
the reduction in the principal amount represented thereby by the
amount so exchanged and shall endorse the Permanent Global Note to
reflect the corresponding increase in the amount represented thereby.
The Temporary Global Note or the Permanent Global Note shall also be
endorsed upon any cancellation of principal amounts upon surrender of
Notes purchased by TFFC or any of its respective subsidiaries or
affiliates or upon any repayment of the principal amount represented
thereby or any payment of interest in respect of such Notes.

(v) Restricted Global Note to Temporary Global
Note During the Restricted Period. If, prior to the Exchange Date, a
holder of a beneficial interest in the 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 the Temporary Global Note, such holder may, subject to the rules
and procedures of DTC, exchange or cause the exchange or transfer of
such interest for an equivalent beneficial interest in the Temporary
Global Note. Upon receipt by the Trustee as Transfer Agent ("Transfer
Agent") of (1) instructions given in accordance with DTC's procedures
from an agent member directing the Trustee as Transfer Agent to credit
or cause to be credited a beneficial interest in the Temporary Global
Note in an amount equal to the beneficial interest in the 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 Transfer
Agent shall instruct DTC to reduce the Restricted Global Note by the
aggregate principal amount of the beneficial interest in the
Restricted Global Note to be so exchanged or transferred and the
Transfer Agent, shall instruct DTC, concurrently with such reduction,
to increase the principal amount of the Temporary Global Note by the
aggregate principal amount of the beneficial interest in the
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 the agent member of Euroclear or
Cedel, or both, as the case may be) a beneficial interest in the
Temporary Global Note equal

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<PAGE> 23

to the reduction in the principal amount of the Restricted Global
Note.

(vi) Restricted Global Note to Permanent Global
Note After the Restricted Period. If, after the Restricted Period, a
holder of a beneficial interest in the 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 the Permanent 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 Permanent Global Note, such holder
may, subject to the rules and procedures of DTC, exchange or cause the
exchange or transfer of such interest for an equivalent beneficial
interest in the Permanent Global Note. Upon receipt by the Transfer
Agent of (I) 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 the Permanent Global Note in an
amount equal to the beneficial interest in the Restricted Global Note
to be exchanged or transferred, (2) a written order given in
accordance with DTC's procedures containing information regarding the
participant account of 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 exchange or 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) and that the Note being exchanged or transferred is not a
"restricted security" as defined in Rule 144, the Trustee shall
instruct DTC to reduce the Restricted Global Note by the aggregate
principal amount of the beneficial interest in the Restricted Global
Note to be so exchanged or transferred and the Transfer Agent shall
instruct DTC, concurrently with such reduction, to increase the
principal amount of the Permanent Global Note by the aggregate
principal amount of the beneficial interest in the 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 a
beneficial interest in the Permanent Global Note equal to the
reduction in the principal amount of the Restricted Global Note.

(vii) Temporary Global Note to Restricted Global
Note. If a holder of a beneficial interest in the Temporary Global
Note registered in the name of DTC or its nominee wishes at any time
to exchange its interest in such

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<PAGE> 24

Temporary Global Note for an interest in the 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 the
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 the Restricted Global Note. Upon receipt by
the Transfer Agent of (1) instructions from Euroclear or Cedel or DTC,
as the case may be, directing the Trustee to credit or cause to be
credited a beneficial interest in the Restricted Global Note equal to
the beneficial interest in the 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 the
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 the
Temporary Global Note for an interest in the 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
Trustee, 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 Transfer Agent 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.

(viii) Permanent Global Note to Restricted Global
Note. Interest in the Permanent Global Note may not be transferred for
interests in the Restricted Global Note.

(ix) Other Transfers or Exchanges. In the event
that a Global Note is exchanged for Notes in definitive registered
form without interest coupons, pursuant to

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<PAGE> 25

Section 2.18 hereof, 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 TFFC and the Trustee.

(b) The Trustee shall not register the exchange of
interests in a Note for a definitive Note or the transfer of or exchange of
Note during the period beginning on any Record Date and ending on the next
following Distribution Date.

(c) TFFC or the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any exchange or registration of transfer of Notes. No service
charge shall be made for any such transaction.

(d) If the Notes are listed on the Luxembourg Exchange,
the Trustee or the Luxembourg Agent, as the case may be, shall send to TFFC
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.

(e) To permit registrations of transfers and exchanges,
TFFC 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 may require payment
of a sum sufficient to cover any transfer tax or similar government charge
payable in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Section 2.13 hereof in
which event the Registrar will be responsible for the payment of any such
taxes.)

(f) All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of TFFC, evidencing the same
debt, and entitled to the same benefits under this Indenture, as Notes
surrendered upon such registration of transfer or exchange.

(g) Prior to due presentment for registration of transfer
of any Note, the Trustee, any Agent and TFFC 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

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<PAGE> 26

such Note and for all other purposes whatsoever, whether or not such Note is
overdue, and neither the Trustee, any Agent nor TFFC shall be affected by
notice to the contrary.

(h) 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 TFFC or to a nominee of such successor Clearing
Agency, only if in accordance with this Section 2.9 and Section 2.18.

Section 2.10. Legending of Notes.

Unless otherwise provided for in a Supplement and except as
permitted by the following sentence, each Note shall bear a legend in
substantially 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 TEAM FLEET FINANCING 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 144A, (3)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION IN
COMPLIANCE WITH REGULATION S OF THE SECURITIES ACT, OR (4) IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE RECEIPT OF THE REGISTRAR OF A
CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE
EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, IN
EACH CASE SUCH TRANSFER SHALL BE MADE IN COMPLIANCE WITH THE INDENTURE
AND ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE RESALE RESTRICTIONS SET FORTH ABOVE.

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 TFFC and the Trustee or the Luxembourg Agent, if
the Notes are listed on the Luxembourg Exchange, such satisfactory evidence,

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<PAGE> 27

which may include an opinion of counsel, as may be reasonably required by TFFC
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 TFFC, shall authenticate and deliver a Note
that does not bear such legend.

Section 2.11. 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 TFFC and
the Trustee harmless then, in the absence of notice to TFFC, 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 TFFC to impose reasonable requirements) are met, TFFC 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 days shall be due and
payable, instead of issuing a replacement Note, TFFC 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, TFFC 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 TFFC 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."

(b) Upon the issuance of any replacement Note under this
Section, TFFC 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.

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<PAGE> 28

(c) Every replacement Note issued pursuant to this
Section in replacement of any mutilated, destroyed, lost or stolen Note shall
constitute an original additional contractual obligation of TFFC, 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 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 2.12. 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 TFFC or any Affiliate of TFFC 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. In the event that any Affiliate
of TFFC acquires any Note, TFFC shall promptly notify the Trustee thereof.

Section 2.13. Temporary Notes.

(a) Pending the preparation of Definitive Notes issued
under Section 2.18 hereof, TFFC 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
2.13(a) above, TFFC will cause Definitive Notes to be prepared without
unreasonable delay. After the preparation of Definitive Notes, the temporary
Notes shall be exchangeable for Definitive Notes upon surrender of the
temporary Notes at the office or agency of TFFC to be maintained as provided in
Section 8.2, without charge to the Noteholder. Upon surrender for cancellation
of any one or more temporary Notes, TFFC shall execute and the Trustee shall
authenticate and deliver in

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<PAGE> 29

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 2.14. Cancellation.

TFFC may at any time deliver to the Trustee for cancellation
any Notes previously authenticated and delivered hereunder which TFFC may have
acquired in any manner whatsoever, 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. TFFC 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 unless by a written order, signed by two Authorized
Officers, TFFC shall direct that canceled Notes be returned to it.

Section 2.15. 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 6.1.

(b) Each Series of Notes shall accrue interest as
provided in the related Supplement and such interest shall be payable on the
Distribution Date for such Series in accordance with Section 6.1 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 Distribution Date for such Note shall be entitled
to receive the principal and interest payable on such Distribution 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 TFFC defaults in the payment of interest on the
Notes of any Series, such interest may, at the option of TFFC, cease to be
payable to the persons who were Noteholders of such Series at the applicable
Record Date and TFFC shall pay the defaulted interest in any lawful manner,
plus, to the extent lawful, interest payable on the defaulted interest, to the

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<PAGE> 30

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. TFFC
shall fix or cause to be fixed each such special record date and payment date,
and at least 15 days before the special record date, TFFC (or the Trustee, in
the name of and at the expense of TFFC) 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 2.16. Book-Entry Notes.

(a) For each Series of Notes to be issued in registered
form, TFFC 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 TFFC 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 TFFC,
the Trustee, any Paying Agent and any agent of such entities as the absolute
owner of such Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent TFFC, the Trustee, 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 a holder of any Note.

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<PAGE> 31

(b) Subject to Section 2.9(g), 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 Note
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 TFFC, the Trustee
and any agent of TFFC or the Trustee as the owner of such Global Note for all
purposes whatsoever.

(d) Title to the Notes shall pass only by registration in
the Note Register maintained by the Registrar pursuant to Section 2.6.

(e) 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 TFFC 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 13.3 hereof and need not be accompanied by an Opinion
of Counsel.

(f) Unless and until definitive, fully registered Notes
("Definitive Notes") have been issued to Note Owners pursuant to Section 2.18:

(i) the provisions of this Section 2.16 shall be
in full force and effect;

(ii) the Paying Agent, the Registrar and the
Trustee may deal with the Clearing Agency and the Clearing

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<PAGE> 32

Agency Participants 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 2.16 conflict with any other provisions of this Indenture, the
provisions of this Section 2.16 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 such percentage only to the extent that it has
received instructions to such effect from Note owners and/or their
related Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in
the Notes and has delivered such instructions 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 2.18, 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 2.17. 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 to Note Owners pursuant to Section 2.18, the Trustee, TFFC and the
Servicer shall give all such notices and communications specified herein to be
given to Noteholders to the applicable Clearing Agency for distribution to the
Note Owners.

Section 2.18. Definitive Notes.

(a) Conditions for Issuance. Interests in a Restricted
Global Note or Permanent Global Note deposited with DTC pursuant to Section 2.5
shall be transferred to the beneficial owners thereof in the form of definitive
registered Notes only if such transfer complies with Section 2.9 and (x) DTC

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<PAGE> 33

notifies TFFC 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 a successor depositary so
registered is not appointed by TFFC within 90 days of such notice or (y) TFFC
determines that the Restricted Global Note or Permanent Global Note with
respect to the relevant Series of Notes shall be exchangeable for definitive
registered Notes. Definitive registered Notes shall be issued without coupons
in amounts of U.S.$l,000,000 and integral multiples of U.S.$l,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 registered Notes pursuant
to this Section 2.18, such Restricted Global Note or Permanent Global Note, as
the case may be, shall be surrendered by DTC to the office or agency of the
Transfer Agent 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 Permanent Global Note are to be transferred to the beneficial
owners thereof in the form of definitive Notes pursuant to this Section 2.18,
such Permanent Global Note shall be surrendered by the custodian for DTC to the
Transfer Agent 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 registered Notes of authorized
denominations. The definitive Notes transferred pursuant to this Section 2.18
shall be executed, authenticated and delivered only in the denominations
specified in paragraph (a) above or in the related Supplement, and definitive
registered Notes shall be registered in such names as DTC shall direct in
writing. The Transfer Agent shall have at least 30 days from the date of its
receipt of definitive Notes and registration information to authenticate and
deliver such definitive Notes. Any definitive registered Note delivered in
exchange for an interest in a Restricted Global Note or Permanent Global Note
shall, except as otherwise provided by Section 2.10, bear, and be subject to,
the legend regarding transfer restrictions set forth in Section 2.10. TFFC
will promptly make available to the Transfer Agent a reasonable supply of
definitive Notes. TFFC shall bear the costs and expenses of printing or
preparing any definitive Notes.

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<PAGE> 34

(c) Transfer of Definitive Notes. Subject to the terms
of this Indenture, the holder of any definitive registered 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 Transfer Agent
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 TFFC
and the Transfer Agent by, the holder thereof. In exchange for any definitive
registered Note properly presented for transfer, TFFC 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 registered Notes for the same aggregate
principal amount as was transferred. In the case of the transfer of any
definitive registered Note in part, TFFC shall execute and the Trustee shall
also promptly authenticate and deliver or cause to be authenticated and
delivered to the transferor at such office, or send by mail (at the risk of the
transferor) to such address as the transferor may request, definitive
registered Notes for the aggregate principal amount that was not transferred.
No transfer of any definitive registered Note shall be made unless the request
for such transfer is made by the registered holder at such office.

(d) Neither TFFC nor the Trustee shall be liable for any
delay in delivery of such 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 2.19. Acquisition of Notes by Lessee Group. Neither
Team nor any Affiliate of Team shall acquire any indebtedness outstanding under
the Notes (whether by direct purchase of a Note, acquisition of a participation
interest in any Note, or otherwise) unless such acquisition is accomplished in
a manner such that all of the Noteholders have an equal opportunity to sell all
or a portion of the indebtedness under their respective Notes pro rata to their
respective Invested Percentages.

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<PAGE> 35

ARTICLE 3.

SECURITY

Section 3.1. Grant of Security Interest.

(a) To secure the TFFC Obligations and all amounts owing
in respect of the Team Interest, TFFC hereby pledges, assigns, conveys,
delivers, transfers and sets over to the Trustee, for the benefit of the
Noteholders, the Note Owners and the holder of the Team Interest (the
Noteholders, the Note Owners and the holder of the Team Interest being referred
to as the "Secured Parties"), and hereby grants to the Trustee, for the benefit
of the Secured Parties, a security interest in all of TFFC's right, title and
interest in and to all of TFFC's assets, property and interests in property of
any kind or nature whatsoever (other than as specified below) whether now owned
or hereafter acquired or created (all of the foregoing being referred to as the
"Collateral"), including without limitation, all of the following property and
interests in property:

(i) the rights of TFFC under the Repurchase Vehicle Lease
(including rights against any guarantor of obligations of the Lessees
thereunder) and any other agreements to which TFFC is a party other
than the Repurchase Programs (collectively, the "TFFC Agreements"),
including, without limitation, all monies due and to become due to
TFFC from Team and the Lessees under or in connection with the TFFC
Agreements, whether payable as rent, guaranty payments, fees,
expenses, costs, indemnities, insurance recoveries, damages for the
breach of any of the TFFC Agreements or otherwise, and all rights,
remedies, powers, privileges and claims of TFFC against any other
party under or with respect to the TFFC Agreements (whether arising
pursuant to the terms of such TFFC Agreements or otherwise available
to TFFC at law or in equity), including the right to enforce any of
the TFFC 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 TFFC Agreements or the
obligations of any party thereunder;

(ii) (a) all Repurchase Vehicles (other than
Segregated Repurchase Vehicles) owned by TFFC as of the Closing Date
of the first Series of Notes and all Repurchase Vehicles (other than
Segregated Repurchase Vehicles) acquired by TFFC during the term of
this Indenture, and all Certificates of Title with respect to such
Vehicles, (b) all Liens and property from time to time purporting to
secure payment of any of the obligations or liabilities of the

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<PAGE> 36

Lessees or Team arising under or in connection with the Repurchase
Vehicle Lease, together with all financing statements filed in favor
of, or assigned to, TFFC describing any collateral securing such
obligations or liabilities, and (c) all guarantees, insurance and
other agreements or arrangements of whatever character from time to
time supporting or securing payment of such obligations and
liabilities of the Lessees or Team pursuant to the Repurchase Vehicle
Lease;

(iii) all right, title and interest of TFFC in, to
and under any Repurchase Programs relating to, and all monies due and
to become due in respect of, the Repurchase Vehicles (other than
Segregated Repurchase Vehicles) purchased from the Manufacturers under
or in connection with the Repurchase Programs whether payable as
Repurchase Vehicle repurchase prices, fees, expenses, costs,
indemnities, insurance recoveries, damages for breach of the
Repurchase Programs or otherwise;

(iv) (a) the Repurchase Collection Account, (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
Repurchase 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 moneys in the Repurchase Collection Account
(including income thereon);

(v) all additional property that may from time to
time hereafter (pursuant to the terms of any Supplement or otherwise
(other than any Supplement in respect of a Segregated Series of
Notes)) be subjected to the grant and pledge hereof by TFFC or by
anyone on its behalf; and

(vi) all proceeds 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 Team Distribution
Account, any funds on deposit therein from time to time, any certificates or
instruments, if any, representing or evidencing any of all of the Team
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 moneys in
the Team Distribution Account (including the income thereon).

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<PAGE> 37

(b) Each of the Secured Parties, by its execution of this
Indenture, hereby appoints the Trustee as its collateral agent under and for
the purposes of this Indenture. Each Secured Party authorizes the Trustee as
collateral agent to act on behalf of such Secured Party under this Indenture
and, in the absence of other written instructions from a Secured Party as may
be received from time to time by the Trustee from the Secured Parties (with
respect to which the Trustee agrees that it will comply, except as otherwise
provided in this Indenture or any Supplement or as otherwise advised by
counsel), to exercise such powers hereunder as are specifically delegated to or
required of the Trustee as collateral agent by the terms hereof and with such
powers as may be reasonably incidental thereto. In furtherance of the
foregoing, TFFC and the Secured Parties hereby authorize the Trustee to be
named as the first lienholder on the Certificates of Title for the Vehicles
referred to in clause (ii) above, in a representative capacity, as collateral
agent for the Secured Parties. The Trustee agrees that all of its right, title
and interest in and to the Collateral shall be solely for the benefit of the
Secured Parties.

(c) The foregoing grant is made in trust to secure the
TFFC Obligations and the Team Interest, and to secure compliance with the
provisions of this Indenture and any Supplement, all as provided in this
Indenture. The Trustee, as Trustee on behalf of the Secured Parties,
acknowledges such 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 (other than in respect of Notes under a Segregated
Series).

Section 3.2. Certain Rights and Obligations of TFFC
Unaffected.

(a) Notwithstanding the assignment and security interest
so granted to the Trustee, TFFC 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 hereof, 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 TFFC Agreements or any of the
Repurchase Programs or revocation of powers of attorney to Team and the
Lessees) to Team, TFFC or the Lessees by TFFC and by Team or the Lessees to

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<PAGE> 38

the Manufacturers by the specific terms of each of the Leases and each
Repurchase Program, respectively.

(b) The assignment of the Collateral to the Trustee shall
not (i) relieve TFFC from the performance of any term, covenant, condition or
agreement on TFFC's part to be performed or observed under or in connection
with any of the TFFC Agreements or any of the Repurchase Programs or from any
liability to Team or the Manufacturers, as the case may be, or (ii) impose any
obligation on the Trustee or any of the Secured Parties to perform or observe
any such term, covenant, condition or agreement on TFFC's part to be so
performed or observed or impose any liability on the Trustee or any of the
Secured Parties for any act or omission on the part of TFFC or from any breach
of any representation or warranty on the part of TFFC. TFFC 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 resulting from the
assignment granted hereby or by any Assignment Agreement, whether arising by
virtue of any act or omission on the part of TFFC 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 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 and/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
to do so and at Team's expense, TFFC agrees to take all such lawful action as
permitted under this Indenture as the Trustee may request to compel or secure
the performance and observance by: (i) Team or by any party to any TFFC
Agreement or any other Related Document of its obligations to TFFC, and (ii) a
Manufacturer under a Repurchase Program of its obligations to Team, the Lessees
and TFFC, as assignee, in each case in accordance with the applicable terms
thereof, and to

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<PAGE> 39

exercise any and all rights, remedies, powers and privileges lawfully available
to TFFC to the extent and in the manner directed by the Trustee, 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 Team (or such party to any TFFC Agreement or any other Related
Document) or by a Manufacturer under a Repurchase Program, of their respective
obligations thereunder.

Section 3.4. Further Assurances.

TFFC (a) will from time to time, at the expense of TFFC,
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 and
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, Certificates of Title, 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 TFFC, 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. TFFC agrees that
all Certificates of Title shall be duly noted to show the Lien of the Trustee
and shall be held in safekeeping and otherwise handled as set forth in Section
3.5 hereof.

Section 3.5. Certificates of Title. Team, as Servicer, shall
hold all Certificates of Title, in trust, as agent of, and custodian for, the
Trustee. Team, as Servicer, shall (i) hold all such Certificates of Title,
under lock and key, in a safe fireproof location at one or more of the regional
offices specified in Exhibit G (as the same may be from time to time revised by
the Servicer on 30 days' prior written notice to the parties hereto), and (ii)
not release or surrender any Certificate of Title except in accordance with
this Indenture (and in any event not release or surrender to any Lessee any of
the Certificates of Title other than Certificates of Title as to which the Lien
of the Trustee has been released in accordance with this Indenture).

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<PAGE> 40

Section 3.6. Release of Collateral.

(a) The Trustee hereby grants to the Servicer a power of
attorney, with full power of substitution to take any and all actions, in the
name of the Trustee, (i) to note the Trustee 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 is in the name of the Trustee and (ii) to
release the Trustee's Lien on any Certificate of Title in connection with the
sale or disposition of the related Vehicle permitted pursuant to the provisions
of any of the Leases. Nothing in this Agreement shall be construed as
authorization from the Trustee to the Servicer to release any Lien on the
Certificates of Title except upon compliance with this Agreement.

(b) The Trustee shall have the right to terminate the
power of attorney referred to in Section 3.6(a)(ii) (including the related
power granted under Section 3.7) after the occurrence, and during the
continuance, of an Amortization Event or a Servicer Default by giving written
notice to such effect to the Servicer.

Section 3.7. Power of Attorney. To further evidence the
power of attorney referred to in Section 3.6(a)(ii), the Trustee agrees that
upon request of the Servicer it will execute a separate power of attorney
substantially in the form of Exhibit H.

Section 3.8. Stamp, Other Similar Taxes and Filing Fees.
TFFC and Team shall jointly and severally indemnify and hold harmless the
Trustee 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. TFFC and Team 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.

THE SERVICER

Section 4.1. Acceptance of Appointment and Other Matters
Relating to the Servicer.

(a) Team hereby agrees to act as the initial Servicer
under this Indenture. The Noteholders by their acceptance of the Notes consent
to Team acting as Servicer.

(b) The Servicer shall (i) cause the Trustee to be shown
as the first lienholder on all Certificates of Title with respect to Vehicles
owned by TFFC, (ii) direct payments due under Repurchase Programs in respect of
Repurchase Vehicles (other than Segregated Repurchase Vehicles) to be deposited
into the Collection Account, (iii) direct payments due in connection with any
Non-Repurchase Vehicles to be deposited in the Collection Account, (iv) direct
payments due in connection with any Segregated Repurchase Vehicles to be
deposited in the Collection Account, (v) turn in (or cause to be turned in)
Repurchase Vehicles owned by TFFC (unless previously sold in accordance with
the Related Documents) to the relevant Manufacturer within the Repurchase
Period and comply and cause TFFC (or, if applicable, the Lessees) to comply
with all of their respective obligations under the Repurchase Programs, (vi)
prepare the monthly Fleet Report, the Daily Report, the Monthly Servicer's
Certificate, the Monthly Noteholders' Statement, the Annual Noteholders' Tax
Statement and the Annual Servicer's Certificate, and cause to be furnished the
report required to be delivered pursuant to Section 4.6 hereof, (vii) instruct
the Trustee to make withdrawals and payments from the Collection Accounts in
accordance with the provisions of this Agreement and any related Supplement,
(viii) execute and deliver for the benefit of the Secured Parties any and all
documents with respect to the Vehicles owned by TFFC and the Repurchase
Programs and, to the extent permitted by applicable law, commence enforcement
proceedings with respect to such Repurchase Programs, (ix) release (or cause
the Trustee to release) the Trustee's lien on any Certificate of Title with
respect to any Vehicle in connection with the sale or disposition of such
Vehicle in accordance with the terms of the related Lease and this Indenture,
(x) maintain or cause to be maintained in good repair, working order, and
condition all of the Vehicles owned by TFFC and otherwise service and
administer the Vehicles, and 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 such servicing and administration which
it may deem necessary or desirable to accomplish such servicing and
administrative functions, (xi) hold all Certificates of Title in accordance
with Section 3.5 hereof,

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<PAGE> 42

and (xii) perform all its other obligations set forth in this Base Indenture
and the other Related Documents. Without limiting the generality of the
foregoing and subject to Section 4.16 and any limitations set forth in the
applicable Supplement, the Servicer is hereby authorized and empowered:

(i) to instruct the Trustee or Paying Agent, as
applicable, to make withdrawals and payments from the Collection
Accounts in accordance with such instructions as are set forth in this
Indenture and the applicable Supplement,

(ii) to the extent permitted under and in
compliance with applicable laws and regulations, to execute and
deliver, for the benefit of the Noteholders, any and all instruments
necessary or appropriate to commence or maintain enforcement
proceedings with respect to Repurchase Programs or any Enhancement,

(iii) to make any filings, reports, notices,
applications, or registrations with, and to seek any consents or
authorizations from the SEC and any state securities laws authority on
behalf of TFFC as may be necessary or advisable to comply with any
Federal or state securities laws or reporting requirements or laws,
and

(iv) to perform such other functions as are
provided for under this Indenture or any Related Document.

(c) Subject to Section 4.16, the Trustee and the Paying
Agent shall promptly follow the instructions of the Servicer to withdraw funds
from the Collection Accounts and make drawings under any Enhancement, as
provided in the applicable Supplement. The Trustee shall furnish the Servicer
with documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder.

(d) The Servicer shall be obligated to use substantially
the same servicing procedures, offices, employees and amounts for servicing the
Vehicles as those used by the Servicer in connection with servicing other
vehicles, whether for its own account or that of other parties.

(e) The Servicer agrees that if any amounts are received
by the Servicer which pursuant to Section 5.2(a) should, at or before such
time, have been paid to any of the Collection Accounts, such amounts will not
be commingled by the Servicer with any of its other funds or property but will
be held separate and apart therefrom and shall be held in trust by the Servicer
for, and immediately paid over, but in any event within two

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<PAGE> 43

Business Days from receipt, to the appropriate Collection Account, with any
necessary endorsement.

Section 4.2. Servicing Compensation.

(a) As compensation for its servicing activities
hereunder and reimbursement for its expenses as set forth in Section 4.2(b),
the Servicer shall be entitled to receive a monthly servicing fee (the "Monthly
Servicing Fee"), payable in arrears on each Distribution Date prior to the
termination of this Indenture pursuant to Section 11.1 in an amount equal to
the sum of the Monthly Servicing Fees for all Series. Except as otherwise
specified in a Supplement, the Monthly Servicing Fee for each Series of Notes
(each, a "Series Monthly Servicing Fee") on each Distribution 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 (A) the Servicing Fee Percentage for such Series and (B) the
aggregate outstanding principal amount of such Series on the Business Day
preceding such Distribution 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 for such
period (exclusive of amounts payable under clause (ii) above).

(b) The Servicer's expenses include, and the Servicer
agrees to pay, the amounts due to the Trustee pursuant to Section 10.6, plus
the reasonable fees and disbursements of independent accountants, plus all
other expenses incurred by the Servicer or TFFC in connection with its
activities hereunder or under the Related Documents, and include, without
limitation, all fees and expenses of TFFC provided for in Section 4.12 hereof,
all other fees and expenses whatsoever of TFFC other than interest, and all
Carrying Charges, to the extent not included within the foregoing. The
Servicer, however, shall not be liable for any liabilities, costs or expenses
of TFFC, 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 Indenture; provided, however, the foregoing provisions of this sentence
shall not affect the indemnification obligations of Team or the Lessees under
Section 16 of any of the Leases. In the event that the Servicer fails to pay
any amount due to the Trustee pursuant to Section 10.6 hereof, the Trustee will
be

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<PAGE> 44

entitled to receive such amounts due from the Monthly Servicing Fee prior to
payment thereof to the Servicer.

Section 4.3. Representations, Warranties and Covenants of the
Servicer.

The Servicer hereby makes, and any Successor Servicer by its
appointment hereunder shall make, the following representations and warranties
with respect to the issuance of any Series of Notes, as of the related Closing
Date, unless otherwise stated in the Supplement:

(a) Organization and Good Standing. The Servicer is a
corporation duly organized, validly existing and in good standing
under the laws of Delaware, and has full corporate power, authority
and legal right to own its properties and conduct its business as such
properties are presently owned and such business is presently
conducted, and to execute, deliver and perform its obligations under
this Indenture, any Supplement and any of the other Related Documents
to which it is a party.

(b) Due Qualification. The Servicer is duly qualified to
do business and is in good standing (or is exempt from such
requirements) as a foreign corporation in any state where such
qualification is necessary in order to perform its obligations as
required by this Indenture, any Supplement and any of the other
Related Documents to which it is a party and has obtained all
necessary licenses and approvals as required under Federal and state
law, and if the Servicer shall be required by any Requirement of Law
to so qualify or register or obtain such license or approval, then it
shall do so except where the failure to obtain such license,
qualification or approval does not materially affect the Servicer's
ability to perform its obligations hereunder.

(c) Due Authorization. The execution, delivery, and
performance of this Indenture, any Supplement and any other Related
Document to which the Servicer is a party, and the consummation of the
transactions provided for hereby and thereby have been duly authorized
by the Servicer by all necessary corporate action on the part of the
Servicer.

(d) Binding Obligation. This Indenture, any Supplement
and any other Related Document to which the Servicer is a party
constitute (or, in the case of any Supplement, will upon due execution
constitute) legal, valid and binding obligations of the Servicer,
enforceable in accordance with their terms, subject to applicable

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<PAGE> 45

bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereinafter in effect, affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity).

(e) No Violation. The execution and delivery by the
Servicer of this Indenture, any Supplement and any other Related
Document to which the Servicer is a party, and the performance of the
transactions contemplated hereby and thereby and the fulfillment of
the terms thereof applicable to the Servicer, will not conflict with,
violate, result in any breach of any of the terms and provisions of,
or constitute with or without notice or lapse of time or both) a
material default under, any Requirement of Law applicable to the
Servicer or any material indenture, contract, agreement, mortgage,
deed of trust or other instrument to which the Servicer is a party or
by which it is bound.

(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of the Servicer,
threatened against the Servicer before any court, regulatory body,
administrative agency or other tribunal or governmental
instrumentality seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Indenture
or any Supplement, seeking any determination or ruling that, in the
reasonable judgment of the Servicer, would materially and adversely
affect the performance by the Servicer of its obligations under this
Indenture, any Supplement or any other Related Document to which the
Servicer is a party, or seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Indenture, any Supplement or any other Related Document to which the
Servicer is a party or the federal or state income, excise, franchise
or similar tax attributes of the Notes.

(g) Compliance with Requirements of Law. The Servicer
shall maintain in effect all material qualifications required under
Requirements of Law in order to perform its obligations hereunder and
will comply in all material respects with all other Requirements of
Law, the failure to comply with which would have a material adverse
effect on the Noteholders.

(h) All Consents Required. All approvals,
authorizations, consents, orders or other actions of any Person or of
any governmental body or official required in connection with the
execution and delivery by the Servicer

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<PAGE> 46

of this Indenture, the performance by the Servicer of the transactions
contemplated by this Indenture and the fulfillment by the Servicer of
the terms hereof, have been obtained, except such as are required by
state securities or "Blue Sky" laws in connection with the
distribution of the Notes.

Section 4.4. Reports and Records for the Trustee.

(a) Daily Reports. On each Business Day commencing on
the initial Closing Date, the Servicer shall prepare and maintain at the office
of the Servicer a record (each, a "Daily Report") setting forth (i) the
aggregate amount of payments received from Manufacturers under Repurchase
Programs related to the Repurchase Vehicles and deposited in the Repurchase
Collection Account, (ii) the aggregate amount of payments received with respect
to the Non- Repurchase Vehicles and deposited in the Non-Repurchase Collection
Account, (iii) the aggregate amount of payments received with respect to
Segregated Repurchase Vehicles and deposited in the Collection Account, and
(iv) the aggregate amount of other Collections processed by the Servicer on the
immediately preceding Business Day. Within one Business Day after request
therefor is made by the Trustee, the Servicer shall deliver a copy of the Daily
Report for any Business Day to the Trustee.

(b) Monthly Servicer's Certificate. On each
Determination Date, the Servicer shall forward to TFFC, 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 B
(each, a "Monthly Servicer's 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): (i) the aggregate amount of payments received
from the Manufacturers under Repurchase Programs and deposited in the
Repurchase Collection Account, the aggregate amount of payments received in
connection with the Non-Repurchase Vehicles and deposited in the Non-
Repurchase Collection Account, the aggregate amount of payments received in
connection with the Segregated Repurchase Vehicles and deposited in the
Collection Account and the aggregate amount of other Collections processed for
the Related Month with respect to such Determination Date; (ii) the Invested
Percentage on the last day of the Related Month of each Series of Notes; (iii)
for each Series, the total amount to be distributed to Noteholders on the next
succeeding Distribution 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

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<PAGE> 47

Enhancement used or drawn in connection with the distribution to Noteholders of
such Series on the next succeeding Distribution 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
Distribution Date; (viii) for each Series, the existing Carryover Controlled
Amortization Amount, if any; (ix) the Pool Factor with respect to such Related
Month; (x) a list of all Vehicles owned by TFFC at the close of business on the
last day of the Related Month; (xi) the Aggregate Asset Amount at the close of
business on the last day of the Related Month; (xii) 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; (xiii) the Liquidity Amount; (xiv)
the existence of any Series 1996-1 Credit Support Deficiency; and (xv) whether,
to the knowledge of the Servicer, any Lien exists on any of the Collateral
(other than Liens granted pursuant to this Indenture and the other Related
Documents or permitted thereunder). The Trustee shall be under no duty to
recalculate, verify or recompute the information supplied to it under this
Section 4.4.

(c) Servicer's Fleet Report. On or before each
Determination Date, the Servicer shall furnish to the Trustee a report (which
may be on diskette, magnetic tape or other electronic medium) (each, a "Fleet
Report") showing as of the last day of the Related Month (i) the vehicle
identification numbers with respect to all Vehicles owned by TFFC; (ii) the
Capitalized Cost of Vehicles that are Manufacturer Acquired Vehicles, the Net
Book Value at the time of acquisition of Repurchase Vehicles that are Team
Acquired Vehicles and Auction Acquired Vehicles and the Non- Repurchase Vehicle
Acquisition Price of all Non-Repurchase Vehicles that are Team Acquired
Vehicles and Auction Acquired Vehicles; (iii) the Net Book Value of such
Vehicles that are Repurchase Vehicles and the Non-Repurchase Vehicle Value of
such Vehicles that are Non-Repurchase Vehicles, in each case as of the end of
the Related Month; (iv) those Vehicles that have been turned back to
Manufacturers or delivered to an authorized auction pursuant to the applicable
Repurchase Program during the Related Month; (v) Vehicles that have become
Casualties during the Related Month; (vi) the Net Book Value of Repurchase
Vehicles that have become Casualties and the Non-Repurchase Vehicle Value of
Non-Repurchase Vehicles that have become Casualties, in each case as of the
date immediately preceding the date on which such Vehicles became Casualties;
(vii) the aggregate Repurchase Prices and Guaranteed Payments scheduled to be
received by TFFC during the Related Month from the Manufacturers; (viii) the
Disposition Proceeds of Non-Repurchase Vehicles sold or delivered to auction
pursuant to a Non-Repurchase Vehicle Lease during the Related Month; (ix) the

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<PAGE> 48

aggregate Depreciation Charges for all Vehicles continuing in the possession of
TFFC; (x) the total amount of Rent being paid on such date under each of the
Leases; (xi) information with respect to each Lessee necessary to compute the
Aggregate Asset Amount as of the end of the Related Month; (xii) the charges
owing from and credits due to the Lessees pursuant to each of the Leases; and
(xiii) those Repurchase Vehicles that are Segregated Repurchase Vehicles. The
Trustee shall make the Fleet Report available for inspection by any Noteholder
at the Corporate Trust Office, during normal business hours, upon such
Noteholder's written request.

(d) Monthly Noteholders' Statement. On or before each
Distribution Date, the Servicer shall furnish to the Trustee and each
Noteholder which requests a copy thereof a Monthly Noteholders' Statement.

(e) Notice of Amortization Events and Defaults. Promptly
upon becoming aware of any Potential Amortization Event or Amortization Event
or any default under this Indenture or any Related Document, the Servicer shall
give the Trustee and each Noteholder which requests a copy thereof, each
Enhancement Provider and the Rating Agencies notice thereof.

(f) Electronic Data. On or before each Determination
Date, the Servicer shall furnish to the Trustee, on diskette, magnetic tape or
other electronic medium, the data in respect of the Vehicles and each of the
Leases used by the Servicer in performing its obligations as Servicer hereunder
and under each of the Leases during the Related Month.

Section 4.5. Annual Servicer's Certificate.

The Servicer will deliver to TFFC, the Trustee, each
Noteholder which requests a copy thereof, the Paying Agent, any applicable
Credit Enhancement Provider, and the Rating Agencies on or before April 15 of
each calendar year, beginning with April 15, 1997, an Officers' Certificate
substantially in the form of Exhibit C (each, an "Annual Servicer's
Certificate") (a) stating that a review of the activities of the Servicer
during the preceding calendar year (or during the initial period from the
initial Closing Date until April 15, 1997) and of its performance under this
Indenture and the other Related Documents to which the Servicer 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 Servicer Default and the Servicer has fully
performed all its obligations under this Indenture and such other Related
Documents throughout such year,

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<PAGE> 49

or, if there has occurred such event or an Amortization Event, specifying each
such event known to such officers and the nature and status thereof, and (c)
stating (and containing an Opinion of Counsel to the effect) that all necessary
Uniform Commercial Code continuation statements and other Uniform Commercial
Code filings have been completed (including, without limitation, any
"precautionary filings" made by the Lessees in favor of the Lessor), all
necessary Repurchase Program Collateral Assignment Agreements have been
executed and delivered pursuant to Section 8.14(a) hereof, and all other
actions, if any, required to maintain the perfected security interest of the
Trustee in the Collateral, have been taken and that the Trustee continues to
have a perfected security interest in the Collateral. A copy of such
certificate may be obtained by any Noteholder by a request in writing to the
Trustee addressed to the Corporate Trust Office.

Section 4.6. Annual Servicing Report.

On or before April 15 of each calendar year, beginning with
April 15, 1997, the Servicer shall cause one of the Big Six Accounting Firms
(who may also render other services to the Servicer) to furnish a report to
TFFC, the Trustee, each Noteholder which requests a copy thereof, 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 Servicer pursuant to Section 4.4(b) of this
Indenture 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, 1996 from the initial Closing Date to
December 31, 1996) with the Servicer'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 Indenture and the
other Related Documents to which the Servicer 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 the terms and conditions set forth in Section 3.5, Section 3.6,
Section 4.1, Section 4.4, Article 5 and Section 6.4 of this Indenture, the
terms and conditions of any Supplement, and the terms and conditions of each of
the Leases except for (a) such exceptions as such accountants believe to be
immaterial and (b) such other exceptions as shall be set forth in such report.
A

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<PAGE> 50

copy of such report may be obtained by any Noteholder by a request in writing
to the Trustee addressed to the Corporate Trust Office.

Section 4.7. Tax Treatment.

TFFC 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 TFFC 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 TFFC. 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.

Section 4.8. Notices to Team.

In the event that Team is no longer acting as Servicer, any
Successor Servicer appointed pursuant to Section 4.17 shall deliver or make
available to Team and TFFC each certificate and report required to be prepared,
forwarded or delivered thereafter pursuant to Sections 4.4, 4.5 and 4.6.

Section 4.9. Liability of the Servicer.

The Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken by the Servicer in such
capacity herein.

Section 4.10. Merger or Consolidation of, or Assumption of
the Obligations of, the Servicer.

The Servicer shall not consolidate with or merge into any
other corporation or convey or transfer its properties and assets substantially
as an entirety to any Person, unless:

(i) the corporation formed by such consolidation or into
which the Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Servicer
substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America or any State
or the District of Columbia, and, if the Servicer is not the surviving
entity, shall expressly assume, by an agreement supplemental hereto,

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<PAGE> 51

executed and delivered to the Trustee, the performance of every
covenant and obligation of the Servicer hereunder;

(ii) the Servicer has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental
agreement comply with this Section 4.10 and that all conditions
precedent herein provided for relating to such transaction have been
complied with and the Opinion of Counsel further stating that the
assumption of the performance of every covenant and obligation of the
Servicer by such Person is a legal, valid and binding obligation of
such Person; and

(iii) the Rating Agency Condition shall have been
satisfied.

Section 4.11. Limitation on Liability of the Servicer and
Others.

The directors, officers, employees or agents of the Servicer
shall not be under any liability to TFFC, the Trustee, the Noteholders, any
Enhancement Provider or any other Person hereunder or pursuant to any document
delivered hereunder, it being expressly understood that all such liability is
expressly waived and released as a condition of, and as consideration for, the
execution of this Indenture and any Supplement and the issuance of the Notes.
Except as provided in Section 4.12, any other provision of this Base Indenture
or any other Related Document, and except for its negligence or willful
misconduct, the Servicer shall not be under any liability to TFFC, the Trustee,
the Noteholders or any other Person for any action taken or for refraining from
the taking of any action in its capacity as Servicer pursuant to this Indenture
or any Supplement whether arising from express or implied duties under this
Indenture or any Supplement. The Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
other than the Servicer respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties under this Indenture or any
Supplement which in its reasonable opinion may involve it in any expense or
liability.

Section 4.12. Indemnification of TFFC and the Trustee.

The Servicer shall indemnify and hold harmless TFFC, the
Noteholders, the Note Owners, and the Trustee (and their respective officers,
directors, employees and agents) from and against any loss, liability, expense,
damage or injury suffered

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<PAGE> 52

or sustained by reason of, or arising out of or in connection with: (i) any
acts or omissions of the Servicer pursuant to this Indenture and any Supplement
and (ii) the Trustee's appointment hereunder and the Trustee's performance of
its obligations under this Indenture, any Supplement, 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 Servicer shall have no duty to indemnify the Trustee to the extent
such loss, liability, expense, damage or injury suffered or sustained is due to
the Trustee's negligence or willful misconduct. Any such indemnification shall
not be payable from the assets of TFFC. The provisions of this indemnity shall
run directly to and be enforceable by an injured party subject to the
limitations hereof. The indemnification provided for in this Section 4.12
shall survive the termination of, or a resignation by, such Person as Servicer
as well as the termination of this Indenture, any Supplement or any other
document to which the Trustee is a signatory or the resignation or removal of
the Trustee.

Section 4.13. The Servicer Not to Resign.

(a) The Servicer shall not resign from the obligations
and duties hereby imposed on it as such except:

(i) upon determination that (x) the performance
of its duties hereunder is or becomes impermissible under applicable
law and (y) there is no reasonable action which the Servicer could
take to make the performance of its duties hereunder permissible under
applicable law, or

(ii) upon the satisfaction of the following
conditions: (a) the assumption, by an agreement supplemental hereto,
executed by and delivered to the Trustee, of the obligations and
duties of the Servicer hereunder by the proposed successor Servicer,
(b) the written confirmation by the Rating Agencies that the then
current rating of any Series of Notes then outstanding will not,
solely as a result of such transfer, be reduced or withdrawn, and (c)
the delivery to the Trustee of an Opinion of Counsel substantially to
the effect that such transfer will not adversely affect the treatment
of any Series of Notes then outstanding after such transfer as debt
for Federal and Virginia state income tax purposes.

Any determination pursuant to clause (a)(i) of this Section permitting the
resignation of the Servicer shall be evidenced as

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<PAGE> 53

to clause (a)(i) of this Section by an Opinion of Counsel to such effect
delivered to the Trustee.

(b) Upon the satisfaction of the preceding conditions set
forth in clause (a)(i) or (a)(ii) above, the Servicer shall notify the Trustee
of its intent to resign ("Resignation Notice"). Notwithstanding anything in
this Indenture or any Supplement to the contrary, any Successor Servicer
appointed under Section 4.13(a)(ii) shall be deemed to be a Successor Servicer
as defined hereunder. No such resignation shall become effective until the
Trustee or its duly appointed agent (which may not be the outgoing Servicer) or
a Successor Servicer shall have assumed the responsibilities and obligations of
the Servicer in accordance with Section 4.17 hereof. If the Trustee is unable
within 120 days of the date of such determination to appoint a Successor
Servicer, the Trustee or its duly appointed agent (which may not be the
outgoing Servicer) shall serve as Successor Servicer hereunder but the Trustee
shall have continued authority to appoint another Person as Successor Servicer.

Section 4.14. Access to Certain Documentation and Information
Regarding the Collateral.

The Servicer shall provide to the Trustee reasonable access to
the documentation regarding the Collateral, such access being afforded without
charge but only (i) upon reasonable request, (ii) during normal business hours,
(iii) subject to the Servicer's normal security and confidentiality procedures
and (iv) at offices in the continental United States designated by the Servicer
which, if they 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 Servicer receives from 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 Servicer receives from such Note Owner a
request to discontinue same, the Servicer 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 Servicer of such information to any of
the Trustee, any Noteholder or the Issuer, provided, however, if the Servicer
is not otherwise obligated hereunder to deliver such information to the
Trustee, any Noteholder or the Issuer on a periodic basis, then, unless
otherwise specified below, the Servicer shall deliver the following information
to such Note Owner on a monthly

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<PAGE> 54

basis on the same date as the date on which the Monthly Servicer's Certificate
is delivered:

(i) the Monthly Servicer's Certificate;

(ii) the Monthly utilization rate of the Vehicles, the
Monthly revenue per Vehicle for the Related Month
and the preceding Related Month, and the average
age of TFFC's fleet;

(iii) copies of any new Repurchase Programs entered into
by TFFC 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, including each Annual Report, on
Form 10-K of the Guarantor, each Quarterly Report
on Form 10-Q of the Guarantor and each Report on
Form 8-K of the Guarantor;

(vi) the Annual Servicer's Certificate;

(vii) the Annual Servicing Report;

(viii) 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; and

(ix) copies of any reports required to be delivered by
any Lessee to the Lessor under any of the Leases.

Section 4.15. Delegation of Duties.

It is understood and agreed by the parties hereto that the
Servicer may, in the ordinary course of business, at any time delegate any
duties hereunder to any Person who agrees to conduct such duties in accordance
with the terms hereof. The fees of any Person to whom such duties are
delegated shall be for the account of the Servicer and shall not be included
within any Supplemental Servicing Fee. Any such delegation shall not relieve
the Servicer of its liability and responsibility with respect to such duties,
and shall not constitute a resignation within the meaning of Section 4.13
hereof. If any such delegation occurs, notification thereof shall be given to
any Enhancement Provider, the Trustee, the Paying Agent and the Rating
Agencies.

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<PAGE> 55

Section 4.16. Servicer Defaults. (a) Except as otherwise
provided in the Supplement for any Series of Notes, if any one of the following
events (each, a "Servicer Default") shall occur and be continuing:

(i) failure by the Servicer to make any payment,
transfer or deposit or to give instructions or to give notice to the
Trustee to make such payment, transfer or deposit or to give notice to
the Trustee as to any required drawing or payment under any
Enhancement on or before the date occurring five days after the date
such payment, transfer or deposit or such instruction or notice is
required to be made or given, as the case may be, under the terms of
this Indenture or any Supplement;

(ii) (A) the failure on the part of the Servicer duly
to observe or perform any covenant or agreement set forth in Section
4.3(b) or 4.3(g) hereof, or (B) failure on the part of the Servicer
duly to observe or perform any other covenants or agreements of the
Servicer set forth herein or in any Supplement which has a material
adverse effect on the Noteholders, and which in the case of either
clause (A) or clause (B) continues unremedied for a period of 30 days
after the earlier of (1) the date on which a Responsible Officer of
the Servicer obtains knowledge of such failure or (2) the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee or to
the Servicer and the Trustee by the Required Noteholders of any Series
of Notes adversely affected thereby; provided, however, that if such
failure cannot reasonably be cured within such thirty (30) day period,
no Servicer Default shall result therefrom so long as, within such
thirty (30) day period, the Servicer (x) commences to cure same, (y)
delivers written notice to the Trustee notifying the Trustee of such
failure and setting forth the steps the Servicer 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 fiftieth (50th) day after the earlier of the dates set forth in
clause (1) and clause (2) above;

(iii) the Servicer shall assign its duties under this
Indenture, except as permitted by Sections 4.10 or 4.15 of this
Indenture;

(iv) (A) any representation or warranty contained in Section
4.3(f) hereof shall prove to have been incorrect when made and shall
continue to be incorrect for a period of thirty (30) days after the
earlier of (1) the date a

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<PAGE> 56

Responsible Officer of the Servicer obtains knowledge thereof or (2)
the date on which written notice thereof, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee, or to
the Servicer and the Trustee by the Required Noteholders of any Series
of Notes adversely affected thereby; provided, however, that if such
failure cannot reasonably be cured within such thirty (30) day period,
no Servicer Default shall result therefrom so long as, within such
thirty (30) day period, the Servicer (x) commences to cure same, (y)
delivers written notice to the Trustee notifying the Trustee of such
failure and setting forth the steps the Servicer 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 fiftieth (50th) day after the earlier of the dates set forth in
clause (1) and clause (2) above, or (B) any other representation,
warranty or certification made by the Servicer in this Indenture or
any Supplement or in any certificate delivered pursuant to this
Indenture or any Supplement shall prove to have been incorrect when
made, which has a material adverse effect on the rights of the
Noteholders of any Series of Notes and which material adverse effect
continues for a period of thirty (30) days after the date on which
written notice thereof, requiring the same to be remedied, shall have
been given to the Servicer by the Trustee, or to the Servicer and the
Trustee by the Required Noteholders of any Series of Notes adversely
affected thereby; or

(v) an Event of Bankruptcy shall occur with respect to
the Servicer;

then, in the event of any Servicer Default, so long as the Servicer Default
shall not have been remedied, either the Trustee, or the Required Beneficiaries
by notice then given in writing to the Servicer (and to the Trustee if given by
the Noteholders) (a "Termination Notice"), may terminate all but not less than
all of the rights and obligations of the Servicer as Servicer under this
Indenture (other than any indemnities which by their terms survive any such
termination).

(b) After receipt by the Servicer of a Termination
Notice, and on the date that a Successor Servicer shall have been appointed by
the Trustee pursuant to Section 4.17 of this Indenture, all authority and power
of the Servicer under this Indenture shall pass to and be vested in a Successor
Servicer (a "Service Transfer"); and, without limitation, the Trustee is hereby
authorized and empowered (upon the failure of the Servicer to cooperate) to
execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, all documents and other

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<PAGE> 57

instruments upon the failure of the Servicer to execute or deliver such
documents or instruments, and to do and accomplish all other acts or things
necessary or appropriate to effect the purposes of such Service Transfer.

(c) The Servicer agrees to cooperate with the Trustee
and such Successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing hereunder,
including, without limitation, the transfer to such Successor Servicer of (i)
all authority to service the Vehicles provided for under this Indenture, (ii)
all authority over all Collections which shall on the date of transfer be held
by the Servicer for deposit, or which have been deposited by the Servicer in
the Collection Accounts, or which shall thereafter be received with respect to
the Vehicles, and (iii) all authority to direct the Trustee with respect to the
allocation of payments received from Manufacturers pursuant to Repurchase
Programs. The Servicer shall promptly transfer its electronic records relating
to the Vehicles to the Successor Servicer in such electronic form as the
successor Servicer may reasonably request and shall promptly transfer to the
Successor Servicer all of its records, correspondence and documents necessary
for the continued servicing of the Vehicles in the manner and at such times as
the Successor Servicer shall reasonably request. To the extent that the
compliance with this Section 4.16 shall require the Servicer to disclose to the
Successor Servicer information of any kind which the Servicer reasonably deems
to be confidential, the Successor Servicer shall be required to enter into such
customary licensing and confidentiality agreements as the Servicer shall
reasonably deem necessary to protect its interest.

Section 4.17. Trustee to Act; Appointment of Successor.

(a) On and after the receipt by the Servicer of a
Termination Notice pursuant to Section 4.16 or receipt by the Trustee of a
Resignation Notice pursuant to Section 4.13, the Servicer shall continue to
perform all servicing functions under this Indenture until a Successor Servicer
shall have been appointed or in the case of a Termination Notice, until the
date specified in the Termination Notice or agreed upon by the Servicer and
Trustee. The Trustee shall as promptly as possible after the receipt of a
Resignation Notice or the giving of a Termination Notice, with the consent of
any Enhancement Provider (unless the applicable Supplement specifies
otherwise), which consent shall not be unreasonably withheld, appoint a
successor servicer (the "Successor Servicer"), and such Successor Servicer
shall accept its appointment by a written assumption in a form acceptable to
the Trustee. Within one year after the Successor Servicer appointed by the
Trustee accepts its appointment, the

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Required Beneficiaries may appoint a Successor Servicer to replace the
Successor Servicer appointed by the Trustee. In the event that a Successor
Servicer has not been appointed or has not accepted its appointment at the time
when the Servicer ceases to act as Servicer (whether pursuant to Section 4.16
or Section 4.13), the Trustee without further action shall automatically be
appointed the Successor Servicer. The Trustee, as Successor Servicer, may
delegate any of its servicing obligations to an affiliate or agent in
accordance with Section 4.15 hereof. Notwithstanding the above, the Trustee
shall, if it is legally unable so to act or is unwilling so to act, petition a
court of competent jurisdiction to appoint a Successor Servicer as the
Successor Servicer hereunder, in which event the Trustee shall act as Servicer
until the Successor Servicer is appointed. The Trustee shall immediately give
notice to the Rating Agencies upon the appointment of a Successor Servicer.

(b) Upon its appointment, the Successor Servicer shall
be the successor in all respects to the Servicer with respect to servicing
functions under this Indenture and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof, and all references in this
Indenture to the Servicer shall be deemed or refer to the Successor Servicer
except for the references in Sections 4.12 and 10.6 hereof which shall continue
to refer to Team as well as to the Successor Servicer; provided, however, that
(i) Team shall not indemnify the Trustee if the acts, omissions or alleged acts
or omissions upon which a claim for indemnification arises pursuant to Section
4.12 hereof constitute fraud, negligence, breach of fiduciary duty or
misconduct by a Successor Servicer (which obligation shall be assumed by the
Successor Servicer) and (ii) Team shall not pay or reimburse the Trustee
pursuant to Section 10.6 hereof for any expense, reimbursement or advance of
the Trustee related to or arising as a result of the negligence or bad faith of
the Successor Servicer (which obligation shall be assumed by the Successor
Servicer). The Successor Servicer shall expressly be authorized, subject to
Section 4.15 hereof, to delegate any of its duties hereunder to Team on and
after the date any such Successor Servicer is appointed pursuant to this
Article 4. Any Successor Servicer, by its acceptance of its appointment, will
automatically agree to be and by the terms and provisions of any agreement
under which an Enhancement Provider agrees to provide Enhancement for a Series.

(c) In connection with any Termination Notice, the
Trustee will review any bids which it obtains and shall be permitted to appoint
any successor servicer submitting such a bid is a Successor Servicer for
servicing compensation not in excess of the Monthly Servicing Fee pursuant to
Section 4.2(a).

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(d) All authority and power granted to the Successor
Servicer under this Indenture shall automatically cease and terminate upon
termination of this Indenture pursuant to Section 11.1, and shall pass to and
be vested in TFFC and, without limitation, TFFC is hereby authorized and
empowered to execute and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other instruments, and to do
and accomplish all other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights. The Successor Servicer agrees
to cooperate with TFFC in effecting the termination of the responsibilities and
rights of the Successor Servicer. The Successor Servicer shall transfer its
electronic records relating to the Vehicles to TFFC in such electronic form as
TFFC may reasonably request and shall transfer all Certificates of Title held
by the Servicer and shall transfer all other records, correspondence and
documents to TFFC in the manner and at such times as TFFC shall reasonably
request. To the extent that compliance with this Section 4.17 shall require
the Successor Servicer to disclose to TFFC information of any kind which the
Successor Servicer deems to be confidential, TFFC shall be required to enter
into such customary licensing and confidentiality agreements as the Successor
Servicer shall deem necessary to protect its interests.

Section 4.18. Notification to Noteholders.

Upon the occurrence of any Servicer Default, the Servicer
shall give prompt written notice thereof to TFFC, the Trustee and the Rating
Agencies and the Trustee shall give notice to the Noteholders at their
respective addresses appearing in the Note Register. Upon any termination or
appointment of a Successor Servicer pursuant to this Article 4, the Trustee
shall give prompt written notice thereof to the Rating Agencies and to
Noteholders at their respective addresses appearing in the Note Register.

Section 4.19. Waiver of Past Defaults.

Noteholders owning an aggregate principal amount of Notes in
excess of 66-2/3% of the aggregate principal amount of all Outstanding Notes
(including all Segregated Series of Notes), on behalf of all Noteholders, may
waive any default by the Servicer in the performance of its obligations
hereunder and its consequences except for a default in the failure to make any
required deposits or payments of interest or principal with respect to any
Series of Notes. Upon any such waiver of a past default, such default shall
cease to exist, and any default arising therefrom shall be deemed to have been
remedied for every purpose of this Indenture. No such waiver shall extend to
any

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subsequent or other default or impair any right consequent thereon except to
the extent expressly so waived.

ARTICLE 5.

ALLOCATION AND APPLICATION OF COLLECTIONS

Section 5.1. Collection Account.

(a) Establishment of Collection Account. (i) The
Trustee shall establish and maintain in the name of the Trustee for the benefit
of the Secured Parties, 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 Secured Parties. 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 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.

(ii) The Servicer will instruct the Trustee as to which
account formed pursuant to this Indenture and any Series Supplement shall be
credited with respect to Collections and other funds which are to be deposited
for such Series of Notes.

(b) Establishment of Team Distribution Account. The
Trustee shall establish and maintain in the name of Team, for the benefit of
Team in its capacity as Team Interestholder, or cause to be established and
maintained, an account (the "Team Distribution Account") bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
Team, in its capacity as Team Interestholder. Unless otherwise instructed by
TFFC, the Team 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 Team Distribution
Account. If the Team Distribution Account is not maintained in accordance with
the previous sentence, then within 10 Business Days after obtaining knowledge
of such fact, the Trustee shall establish a new Team Distribution Account which

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complies with such sentence and transfer into the new Team Distribution Account
all cash and investments from the non- qualifying Team Distribution Account.
Initially, the Team 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 facilitate the proper allocation of Collections
in accordance with the terms of such Supplement.

(d) Administration of the Collection Accounts. The
Servicer shall instruct each institution maintaining a Collection Account to
invest funds on deposit in such Collection Account at all times in Permitted
Investments; provided, however, that any such investment shall mature not later
than the Business Day prior to the Distribution Date following the date on
which such funds were received, unless any Permitted Investment held in such
Collection Account is held with the Paying Agent, in which event such
investment may mature on such Distribution Date and such funds shall be
available for withdrawal on or prior to such Distribution Date. The Trustee
shall hold, for the benefit of the Secured Parties, possession of the
negotiable instruments or securities evidencing the Permitted Investments
described in clause (i) of the definition thereof from the time of purchase
thereof until the time of maturity.

(e) Administration of the Team Distribution Account.
Unless otherwise instructed by the Team Interestholder at any time and from
time to time, the Servicer shall instruct the institution maintaining the Team
Distribution Account to invest funds on deposit in the Team Distribution
Account at all times in Permitted Investments. Unless otherwise instructed by
the Team Interestholder at any time, the Trustee shall hold, for the benefit of
the Team 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 Accounts. 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
Collection Accounts. All interest and earnings (net of losses and investment
expenses) on funds on deposit in a Collection Account shall be deemed to be
available and on deposit for distribution from such account.

(g) Earnings from Team Distribution Account. Subject
to the restrictions set forth above, the Servicer shall have the authority to
instruct the Trustee with respect to the

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investment of funds on deposit in the Team Distribution Account. All interest
and earnings (net of losses and investment expenses) on funds on deposit in the
Team Distribution Account shall be deemed to be available and on deposit for
distribution.

Section 5.2. Collections and Allocations.

(a) Collections in General. Until this Indenture is
terminated pursuant to Section 11.1, TFFC and the Servicer shall (i) cause all
Repurchase Collections due and to become due to TFFC (A) from the Manufacturers
pursuant to Repurchase Programs to be paid directly to the Collection Account
at such times as such amounts are due under such Repurchase Programs, (B) under
the Repurchase Vehicle Lease to be paid directly to the Collection Account at
such time as such amounts are due under the Repurchase Vehicle Lease, and (C)
from any other source in respect of Repurchase Vehicles leased under the
Repurchase Vehicle Lease to be paid directly to the Collection Account at such
times as such amounts are due, (ii) cause all Non-Repurchase Collections due
and to become due to TFFC (A) under any Non-Repurchase Vehicle Lease to be paid
directly to the Collection Account at such time as such amounts are due under
such Non-Repurchase Vehicle Lease and (B) from any other source in respect of
Non-Repurchase Vehicles to be paid directly to the Collection Account at such
times as such amounts are due and (iii) cause all Segregated Repurchase
Collections due and to become due to TFFC (A) under any Non-Repurchase Vehicle
Lease to be paid directly to the Collection Account at such time as such
amounts are due under such Non-Repurchase Vehicle Lease and (B) from any other
source in respect of Segregated Repurchase Vehicles to be paid directly to the
Collection Account at such times as such amounts are due. All amounts on
deposit in the Collection Account shall be allocated and distributed to the
Noteholders and the Team Interestholder as provided herein. All monies,
instruments, cash and other proceeds received by the Trustee pursuant to this
Indenture shall be immediately deposited in the Collection Account and shall be
applied as provided in this Article 5.

(b) Disqualification of Institution Maintaining
Collection Account. In the event that a 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, as appropriate, with a
Qualified Institution pursuant to Section 5.1(a) and thereafter, the Servicer
and TFFC shall deposit or cause to be deposited all Collections as set forth in
Section 5.2(a) into such 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

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Collection Account, as applicable (unless it later becomes a Qualified
Institution or qualified corporate trust department).

(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 Team or an
Affiliate of Team, the Team Interest Amount equals or exceeds zero and there is
no Servicer Default which has occurred and is continuing, the Servicer (i) may
make or cause to be made deposits to the Collection Accounts net of any amounts
which are allocable to the Team Distribution Account and represent amounts due
and owing to the Servicer or Team, and (ii) need not deposit or cause to be
deposited any amounts to be paid to the Servicer or Team pursuant to this
Section and such amounts will be deemed paid to Team or the Servicer, as the
case may be, pursuant to this Section. The Servicer shall restore to a
Collection Account any amounts so withheld to the extent that, on the
succeeding Distribution Date, there are insufficient funds in such Collection
Account to pay all amounts payable on such date with respect to all
Noteholders.

(d) Sharing Collections. To the extent that Principal
Collections that are allocated to any non-Segregated Series on a Distribution
Date are not needed to make payments to Noteholders of such non-Segregated
Series or required to be deposited in a Distribution Account for such
non-Segregated Series on such Distribution 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 non-Segregated Series. Any such
reallocation will not result in a reduction in the Invested Amount of the
non-Segregated Series to which such Principal Collections were initially
allocated.

(e) Unallocated Principal Collections. If, after
giving effect to Section 5.2(d), Principal Collections allocated to any Series
on any Distribution Date are in excess of the amount required to pay such
Series in full, then, any such excess Principal Collections shall be allocated
to the Team Distribution Account to the extent that the Team Interest Amount
equals or exceeds zero.

Section 5.3. 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.

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Section 5.4. 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.

Section 5.5. 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 TFFC 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 TFFC and, in either case, the invested amount in TFFC of such
Paired Series will increase by 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.

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ARTICLE 6.

DISTRIBUTIONS AND REPORTS TO NOTEHOLDERS

Section 6.1. Distributions in General.

(a) Unless otherwise specified in the applicable
Supplement, on each Distribution Date with respect to each Outstanding Series,
(i) the Paying Agent shall deposit (in accordance with the certificate
delivered by the Servicer to the Trustee pursuant to Section 4.4(b)) 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, if
during an Amortization Period, principal, and (ii) to the extent provided for
in the applicable Supplement, the Trustee shall deposit in the Distribution
Account for each such Series the amount of Enhancement for such Series to be
drawn in connection with such Distribution Date.

(b) Unless otherwise specified in the applicable
Supplement, on each Distribution Date, the Paying Agent 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 Distribution 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.

(c) Unless otherwise specified in the applicable
Supplement, amounts distributable to a Noteholder pursuant to this Section 6.1
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 the nominee of a Clearing
Agency, such amount 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
nominee.

(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

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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 TFFC and
the Trustee as conclusive evidence that the certificate or certificates
refereed to therein has or have been delivered to Euroclear or Cedel pursuant
to the terms 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 6.2. Distributions to Team Distribution Account. At
any time and from time to time upon request in writing made by the Team
Interestholder, the Trustee will transfer funds from the Collection Accounts to
the Team Distribution Account; provided, however, that the Trustee will not
make any such transfer on any date other than on a Distribution 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 Distribution Date, (i) the transfer of such funds from
any Collection Account to the Team Distribution Account will not cause an Asset
Amount Deficiency to exist and (ii) the transfer of such funds from any
Collection Account to the Team Distribution Account will not violate any
restriction contained in this Indenture or any Supplement.

Section 6.3. Optional Repurchase of Notes.

On the Distribution Date occurring on or after the date on
which the Invested Amount 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, TFFC shall have the option to purchase all Outstanding Notes of
such Series, or class of such Series, at a purchase price (determined after
giving effect to any payment of principal and interest on such Distribution
Date) equal to (unless otherwise specified in the related Supplement) the
Invested Amount of such Series on such Distribution Date, plus accrued and
unpaid interest on the unpaid balance of the Notes of such Series (calculated
on the basis of the outstanding principal balance of the Notes of such Series
and the Note Rate of such Series) through the day immediately prior to the date
of such purchase. TFFC shall give the Servicer and

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the Trustee at least 30 days prior written notice of the date on which TFFC
intends to exercise such option to purchase. Not later than 12:00 noon, New
York City time, on such Distribution Date, an amount of the purchase price
equal to the Invested Amount of all Notes of such Series on such Distribution
Date and the amount of accrued and unpaid interest with respect to such Notes
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 Distribution Date.

Section 6.4. Monthly Noteholders' Statement.

(a) On each Distribution Date, the Trustee shall
forward to each Noteholder of record of all outstanding Series, the Rating
Agencies, the Paying Agent (if other than the Trustee) and any Enhancement
Provider a statement substantially in the form of Exhibit D (each, a "Monthly
Noteholders' Statement") prepared by the Servicer 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) below 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 Distribution Date, the aggregate amount of
Principal Collections processed during the 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 Distribution Date;

(iv) the amount of such distribution allocable to
principal on each Class of the Notes of such Series;

(v) the amount of such distribution allocable to
interest on each Class of the Notes of such Series;

(vi) the amount of any drawing under any Enhancement,
if any, for such Series for such Distribution Date;

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(vii) the amount of the Monthly Servicing Fee for such
Series for such Distribution Date;

(viii) the amount available under the applicable
Enhancement, if any, for such Series as of the close of business on
such Distribution Date after giving effect to any drawings on the
applicable Enhancement and payments to the applicable Enhancement
Provider on such Distribution 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 Distribution Date after giving
effect to any drawings on the applicable Enhancement and payments to
the applicable Enhancement Provider on such Distribution Date;

(x) the Pool Factor, if any, for such Series as of the
end of the Record Date with respect to such Distribution 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, the Aggregate
Non-Repurchase Asset Amount, the Aggregate Segregated Asset Amount and
the amount of any Asset Amount Deficiency;

(xiii) the Carryover Controlled Amortization Amount and
the Controlled Amortization Amount (as such terms are defined for any
Series or class of Notes in the related Placement Supplement) for such
Distribution Date;

(xiv) the Net Book Value of Repurchase Vehicles
(including the Net Book Value of Segregated Repurchase Vehicles for
each Segregated Series of Notes) and the Net Book Value and
Non-Repurchase Vehicle Value of Non-Repurchase Vehicles as of the last
day of the Related Month;

(xv) the ratios of the Net Book Value of Non-Repurchase
Vehicles and the Repurchase Vehicles, respectively, to the Net Book
Value of all Vehicles;

(xvi) the Net Book Value of Vehicles of each
Manufacturer as of the last date of the Related Month;

(xvii) the average age of all Repurchase Vehicles and
average age of all Non-Repurchase Vehicles as of the last day of the
Related Month;

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<PAGE> 69

(xviii) the average total monthly Depreciation Charges per
Repurchase Vehicle and per Non- Repurchase Vehicle during the Related
Month;

(xix) the Net Book Value of any Vehicles identified as
stolen or a Casualty during the Related Month;

(xx) the Net Book Value of any Vehicles manufactured by
Mazda; and

(xxi) with respect to any Series, such additional
information specified in the related Supplement.

(b) Annual Noteholders' Tax Statement. On or before
January 31 of each calendar year, beginning with calendar year 1997, 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 be
provided by the Paying Agent pursuant to any requirements of the Code as from
time to time in effect.

ARTICLE 7.

REPRESENTATIONS AND WARRANTIES

TFFC hereby represents and warrants, for the benefit of the
Trustee and the Noteholders, as follows:

Section 7.1. Corporate Existence and Power.

TFFC 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

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failure to so qualify would not materially and adversely affect the financial
condition or operations of TFFC 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 7.2. Corporate and Governmental Authorization.

The execution, delivery and performance by TFFC of this
Indenture, the related Supplement and the other Related Documents to which it
is a party is within TFFC's corporate powers, has been duly authorized by all
necessary corporate action, requires 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 TFFC or of any law or governmental regulation,
rule, contract, agreement, judgment, injunction, order, decree or other
instrument binding upon TFFC or any of its Assets or result in the creation or
imposition of any Lien on any Asset of TFFC, except for Liens created by this
Indenture or the other Related Documents. This Indenture and each of the other
Related Documents to which TFFC is a party has been executed and delivered by a
duly authorized officer of TFFC.

Section 7.3. Binding Effect.

This Indenture and each other Related Document is a legal,
valid and binding obligation of TFFC enforceable against TFFC 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).

Section 7.4. Litigation.

There is no action, suit or proceeding pending against or, to
the knowledge of TFFC, threatened against or affecting TFFC before any court or
arbitrator or any Governmental Authority in which there is a reasonable
possibility of an adverse decision that would materially adversely affect the
consolidated financial position, consolidated results of operations, business,
properties, performance, prospects or condition (financial or otherwise) of
TFFC 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 TFFC to comply with any of the terms hereof or thereof.

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Section 7.5. No ERISA Plan.

TFFC has not established and does not maintain or contribute
to any Plan that is covered by Title IV of ERISA and will not do so, so long as
any Notes are Outstanding.

Section 7.6. Tax Filings and Expenses.

TFFC has filed all material federal, state and local tax
returns and all other material tax returns which, to the knowledge of TFFC, 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 TFFC, except such taxes, if any, as are being contested in good
faith and for which adequate reserves have been set aside on its books, except
where the failure to pay such taxes or maintain such reserves would not
materially and adversely affect the condition, financial or otherwise,
operations, performance, properties or prospects of TFFC or its ability to
carry out the transactions contemplated in this Indenture and each other
Related Document to which it is a party. TFFC has paid all fees and expenses
required to be paid by it in connection with the conduct of its business, the
maintenance of its corporate existence and its qualification as a foreign
corporation authorized to do business in each State.

Section 7.7. Disclosure.

None of the Private Placement Memorandum, any Placement
Memorandum Supplement or any material 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 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 7.8. Investment Company Act; Securities Act.

TFFC is not, and is not controlled by, an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for 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.

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Section 7.9. Regulations G, T, U and X.

The proceeds of the Notes will not be used for any purpose
which might cause a violation of any regulation of the Board of Governors of
the Federal Reserve System, including Regulations G, T, U and X thereof. TFFC
is not engaged in the business of extending credit for the purpose of
purchasing or carrying any margin stock.

Section 7.10. 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 TFFC'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 TFFC prior to the initial Closing Date or as
contemplated in Section 7.14.

Section 7.11. 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 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 TFFC now in effect, (ii) any provisions of the
certificate of incorporation or by-laws of TFFC, (iii) any judgment, order or
decree of any Governmental Authority affecting TFFC, or (iv) any agreement or
instrument to which TFFC is a party or by which it is bound, (b) the
acceleration of any obligations of TFFC, or (c) the creation of any lien, claim
or encumbrance other than in favor of the Trustee or as permitted hereunder or
under the other Related Documents.

Section 7.12. Solvency.

Both before and after giving effect to the transactions
contemplated by this Indenture and the other Related Documents, TFFC is solvent
and TFFC 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 7.13. Stock Ownership; Subsidiary.

As of each Closing Date, all of the issued and outstanding
common stock of TFFC is owned by Team, all of which

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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. TFFC has no
Subsidiaries and owns no capital stock of, or other interest in, any other
Person.

Section 7.14. Security Interests.

(a) All action necessary (including the filing of
UCC-1 financing statements and the notation on the Vehicle Certificates of
Title of the Trustee's Lien for the benefit of the Secured Parties) to protect
and perfect the Trustee's security interest in the Collateral now in existence
and hereafter acquired or created has been duly and effectively taken.

(b) No security agreement, financing statement,
equivalent security or lien instrument or continuation statement listing TFFC
as debtor covering all or any part of the Collateral is on file or of record in
any jurisdiction, except such as may have been filed, recorded or made by TFFC
in favor of the Trustee in connection with this Indenture.

(c) Upon the completion of the noting of the lien of
the Trustee upon the Certificates of Title with respect to the Vehicles, 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, and will be
enforceable as such as against creditors of and purchasers from TFFC 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 prior
security interest has been duly taken.

(d) TFFC's principal place of business and chief
executive office shall be at: 5851 Lewis Road, Sandston, Virginia, 23150, and
the place where its records concerning the Collateral are kept is at 5851 Lewis
Road, Sandston, Virginia, 23150. TFFC 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, Certificates of
Title, and other instruments with respect to the Collateral are powers coupled
with an interest and are irrevocable.

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Section 7.15. Binding Effect of the Leases.

Each of the Leases operative on the date hereof is in full
force and effect and there are no outstanding Lease Events of Default, Lessee
Partial Wind-Down Events 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, a Lessee Partial Wind-Down Event or a
Manufacturer Event of Default.

Section 7.16. Non-Existence of Other Agreements.

As of the date of the issuance of the first Series of Notes,
other than as permitted by Section 8.24 hereof (i) TFFC is not a party to any
contract or agreement of any kind or nature and (ii) TFFC 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 7.17. Repurchase Programs.

TFFC is an authorized fleet purchaser under the Repurchase
Programs operated by Ford, Chrysler, General Motors, Saab and Toyota (to the
extent it is purchasing Vehicles manufactured by such Manufacturers); provided,
however, that TFFC shall not purchase Vehicles under the Repurchase Program of
any such Manufacturer unless the Repurchase Program for the applicable model
year has previously been approved by the Rating Agencies. Each of such
Repurchase Programs, and any other Repurchase Program under which TFFC owns
Vehicles is in full force and effect (to the extent TFFC is purchasing Vehicles
manufactured by such Manufacturers) and has not been previously assigned,
transferred or pledged by TFFC (except to the Trustee).

ARTICLE 8.

COVENANTS

Section 8.1. Payment of Notes.

TFFC 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 if the Paying Agent holds on that date money designated for and
sufficient to pay all principal and interest then due.

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Section 8.2. Maintenance of Office or Agency.

TFFC 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 TFFC
in respect of the Notes and this Indenture may be served, and where, at any
time when TFFC is obligated to make a payment of principal and premium upon the
Notes, the Notes may be surrendered for payment. TFFC 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 TFFC 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.

TFFC 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. TFFC
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.

TFFC hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of TFFC in accordance with Section 2.13.

Section 8.3. Information.

TFFC 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 days after the end of each fiscal year of Team, a copy of
the Report of Team on Form 10-K as furnished by Team to the Securities
Exchange Commission;

(b) as soon as available, but in any event within 45
days after the end of each fiscal quarter (except the fourth fiscal
quarter) of Team, a copy of the Report of Team on Form 10-Q as
furnished by Team to the Securities Exchange Commission;

(c) within ten (10) days after filing of same with the
Securities Exchange Commission, a copy of any Report of Team on Form
8-K filed by Team with the Securities Exchange Commission;

(d) from time to time such additional information
regarding the financial position, results of operations, business or
prospects of Team and its Subsidiaries as the

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Trustee, at the direction of the Required Noteholders of any Series of
Notes, may reasonably request;

(e) at the time of delivery of the items described in
clauses (a) and (b) above, an unaudited consolidating balance sheet
and statement of earnings in respect of Team and its Subsidiaries as
of such date or for the year to date period ending on such date;

(f) on or prior to June 30 of each year, a certificate
of the president or chief financial officer of TFFC certifying that
TFFC has apprised the Rating Agencies of all material changes in the
Repurchase Programs occurring since the date of this Indenture; and

(g) (i) at least 30 days prior to the introduction of
any material prospective change in any Repurchase Program or the
introduction of any material new Repurchase Program by an existing
Manufacturer, notice of the same and notice thereof to the Rating
Agencies describing the principal terms thereof, and (ii) at least
annually a copy of each Repurchase Program to the Rating Agencies.

Section 8.4. Payment of Obligations.

TFFC 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 materially and adversely affect the condition, financial or
otherwise, operations, performance, properties or prospects of TFFC or its
ability to carry out the transactions contemplated in this Indenture and each
other Related Document to which it is a party.

Section 8.5. Maintenance of Property.

TFFC 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 8.5
shall require TFFC 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 TFFC, is obsolete or surplus or unfit
for use or cannot be used advantageously in the conduct of the business of
TFFC.

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Section 8.6. Conduct of Business and Maintenance of Existence.

TFFC will maintain its corporate existence as a corporation
validly existing and in good standing under the laws of the State of Delaware
and duly qualified as a foreign corporation licensed under the laws of each
state in which the failure to so qualify would have a material adverse effect
on the business and operations of TFFC.

Section 8.7. Compliance with Laws.

TFFC 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 materially and adversely affect the
condition, financial or otherwise, operations, performance, properties or
prospects of TFFC or its ability to carry out the transactions contemplated in
this Indenture and each other Related Document; provided, however, such
noncompliance will not result in a Lien (other than a Permitted Lien) on any
Property of TFFC.

Section 8.8. Inspection of Property, Books and Records.

TFFC will keep proper books of record and account 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, employees and
independent public accountants, all at such reasonable times and as often as
may reasonably be desired.

Section 8.9. Compliance with Related Documents.

TFFC 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 any of the Lessees, Team or the Servicer to have the right to
refuse to perform any of its obligations under this Indenture or any Related
Document. TFFC will not amend any Lease, except in accordance with Article XII
hereof.

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Section 8.10. Notice of Defaults.

(a) Promptly upon becoming aware of any Potential
Amortization Event or Amortization Event, TFFC shall give the Trustee and the
Rating Agencies notice thereof, together with a certificate of the President,
Vice President or the principal Financial Officer of TFFC setting forth the
details thereof and any action with respect thereto taken or contemplated to be
taken by TFFC, and

(b) Promptly upon becoming aware of any default under
any Related Document or under any Repurchase Program, TFFC shall give the
Trustee, each Enhancement Provider and the Rating Agencies notice thereof.

Section 8.11. Notice of Material Proceedings.

Promptly upon becoming aware thereof, TFFC 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
TFFC 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 TFFC or the ability of TFFC to perform
its obligations under this Indenture or under any other Related Document to
which it is a party.

Section 8.12. Further Requests.

TFFC 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.

Section 8.13. Further Assurances.

(a) TFFC shall do such further acts and things, and
shall execute and deliver to the Trustee such additional assignments,
agreements, powers and instruments, 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
including, without limitation, the filing of any Certificates of Title (or
amendments thereto), 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. TFFC also hereby authorizes
the Trustee to file any such Certificate of Title (or

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amendment thereto), and any such financing statement or continuation statement
without the signature of TFFC 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
8.13(a), TFFC shall take all actions that are required to maintain the security
interest of the Trustee in the Collateral as a perfected security interest
subject to no prior Liens, including, without limitation (i) filing all Uniform
Commercial Code financing statements, continuation statements and amendments
thereto necessary to achieve the foregoing and (ii) causing the Servicer to
maintain possession of the Certificates of Title for the benefit of the Trustee
pursuant to Section 3.5 hereof.

(b) TFFC 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.

Section 8.14. Repurchase Programs.

(a) With respect to any Repurchase Program for any
model year after the 1994 model year pursuant to which TFFC proposes
to acquire Vehicles, prior to TFFC's acquisition of any Vehicle from
any Manufacturer under such Repurchase Program, TFFC will (i) execute
and deliver in favor of the Trustee an Assignment Agreement, (ii) if
any Series of Notes is then being rated by Standard & Poor's or DCR,
deliver a written confirmation from Standard & Poor's or DCR, as the
case may be, that the acquisition of Vehicles pursuant to such
Repurchase Program will not result in the reduction or withdrawal of
any rating issued by Standard & Poor's or DCR in respect of such
Series of Notes and (iii) obtain the consent of the Required
Beneficiaries if such Repurchase Program is operated by a Manufacturer
other than Ford, General Motors or Chrysler which has a long-term
unsecured debt rating of "A" or less from Standard & Poors.

(b) TFFC will (a) provide the Trustee with at least 30
days' prior written notice of its intention to purchase Vehicles from
any new Manufacturer, (b) provide the Trustee with a copy of the
Repurchase Program of such Manufacturer

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at the time of such notice and (c) certify to the Trustee and the
Noteholders that such new Manufacturer is an Eligible Manufacturer and
that such Repurchase Program is an Eligible Repurchase Program at such
time. In no event shall TFFC agree, to the extent any consent of TFFC
is solicited or required by the Manufacturer or any assignor of such
Repurchase Program, to any change in any Repurchase Program that would
adversely affect its rights or the rights of the Noteholders with
respect to any Vehicle previously purchased or financed under such
Repurchase Program.

(c) The parties hereto expressly acknowledge that the
Trustee was directed by TFFC and Team to enter into the Assignment
Agreements and that the Trustee shall be held harmless by TFFC and
Team in connection with its execution of or consent to such
documentation, other than for actions by the Trustee that constitute
negligence or willful misconduct. All Noteholders, by their
acceptance of their respective Notes, consent to the Trustee's
execution and delivery of such Assignment Agreements.

Section 8.15. Liens.

TFFC will not create, incur, assume or permit to exist any
Lien upon any of its Assets (including the Collateral), other than (i) Liens in
favor of the Trustee for the benefit of the Secured Parties, and (ii) Liens
created by or permitted under the Related Documents.

Section 8.16. Other Indebtedness.

TFFC 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 Team Interest
Amount, provided, however, that such Indebtedness is subject to the
restrictions provided for in TFFC's Certificate of Incorporation, (ii)
Indebtedness permitted under any other Related Document and (iii) Indebtedness
permitted under TFFC's Certificate of Incorporation.

Section 8.17. Mergers.

TFFC will not merge or consolidate with or into any other
Person.

Section 8.18. Sales of Assets.

TFFC will not sell, lease, transfer, liquidate or otherwise
dispose of any Assets, except as contemplated by the

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Related Documents and provided that the proceeds received by TFFC are paid
directly to the Collection Accounts.

Section 8.19. Acquisition of Assets.

TFFC will not acquire, by long-term or operating lease or
otherwise, any Assets except pursuant to the terms of the Related Documents.

Section 8.20. Dividends, Officers' Compensation, etc.

TFFC will not (i) declare or pay any dividends on any shares
of its capital stock or make any other distribution on, or any purchase,
redemption or other acquisition of, any shares of its capital stock except out
of funds in the Team Distribution Account, 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 Team Distribution Account.

Section 8.21. Name; Principal Office.

TFFC will neither (a) change the location of its principal
office without sixty (60) days' prior notice to the Trustee nor (b) change its
name without prior notice to the Trustee sufficient to allow the Trustee 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
pursuant to this Indenture. In the event that TFFC desires to so change its
office or change its name, TFFC will make any required filings and prior to
actually changing its office or its name TFFC will deliver to the Trustee (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 in respect of the new office or new name of TFFC 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 8.22. Organizational Documents.

TFFC will not amend any of its organizational documents,
including its Certificate of Incorporation or By-Laws, without the written
consent of the Rating Agencies and the Trustee which consent shall not be
sought unless and until TFFC shall first have obtained either (i) an Opinion of
Counsel that such amendment would not cause TFFC to be subject to an increased
risk of being substantively consolidated with Team or any Lessee in the event
of an insolvency proceeding involving Team or any Lessee or (ii) an Opinion of
Counsel reaffirming (after such

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amendment) the opinion regarding substantive consolidation furnished by Dechert
Price & Rhoads in connection with the issuance of the first Series of Notes.

Section 8.23. Investments.

TFFC 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, TFFC will not cause the Trustee to make any
Permitted Investments on TFFC's behalf that would have the effect of causing
TFFC to be an "investment company" within the meaning of the Investment Company
Act.

Section 8.24. No Other Agreements.

TFFC will not (a) enter into or be a party to any agreement or
instrument other than any Related Document or any documents related to any
Enhancement or documents and agreements incidental thereto or (b) except as
provided for in Sections 12.1 or 12.2, 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).

Section 8.25. Other Business.

TFFC will not engage in any business or enterprise or enter
into any transaction other than the leasing of Vehicles pursuant to the Leases,
the related exercise of its rights as lessor thereunder, the incurrence and
payment of ordinary course operating expenses, the issuing and selling of the
Notes and other activities related to or incidental to either of the foregoing.

Section 8.26. Maintenance of Separate Existence.

TFFC will do all things necessary to maintain its corporate
existence separate and apart from that of Team and any other Affiliates of
Team, including, without limitation,

(a) practicing and adhering to corporate formalities,
such as maintaining appropriate corporate books and records;

(b) maintaining at least two corporate directors who
are not officers, directors or employees of any of its Affiliates;

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(c) owning or leasing (including through shared
arrangements with Affiliates) all office furniture and equipment
necessary to operate its business;

(d) refraining from (i) guaranteeing or otherwise
becoming liable for any obligations of any of its Affiliates, (ii)
having obligations of TFFC guaranteed by its Affiliates, (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;

(e) maintaining its deposit and other bank accounts
and all of its assets separate from those of any other Person;

(f) maintaining its financial records separate and
apart from those of any other Person;

(g) compensating all its employees, officers,
consultants and agents for services provided to it by such Persons, or
reimbursing 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) maintaining 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) accounting for and managing all of its liabilities
separately from those of any of its Affiliates, including, without
limitation, payment directly by TFFC of all payroll, accounting and
other administrative expenses and taxes;

(j) allocating, 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) refraining from filing or otherwise initiating or
supporting the filing of a motion in any bankruptcy or other
insolvency proceeding involving TFFC, Team or any Affiliate of TFFC or
Team to substantively consolidate TFFC with Team or any Affiliate of
TFFC or Team;

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(l) remaining solvent; and

(m) conducting all of its business (whether written or
oral) solely in its own name.

TFFC acknowledges its receipt of a copy of that certain opinion letter issued
by Dechert Price & Rhoads dated December 19, 1996 and addressing the issue of
substantive consolidation as it may relate to TFFC and each of Team, each
Lessee and each of their Affiliates. TFFC 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 TFFC.

Section 8.27. 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, TFFC 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 8.28. Acquisition of Vehicles by TFFC. Except as
permitted by Section 2.1(b) of each Lease, TFFC shall acquire Vehicles only (i)
by purchase directly from a Manufacturer, (ii) through an authorized dealer of
a Manufacturer or (iii) in the case of any Lease executed in connection with
any Segregated Series of Notes, at an auction held by an automobile dealer
which is not an Affiliate of Team.

Section 8.29. Maintenance of Rating. In the event that a
Series of Notes (or a class of a Series of Notes) is at any time not rated by
any Rating Agency (either as a result of the withdrawal of an existing rating
on such Series of Notes (or such class of such Series of Notes) or for any
other reason), then TFFC and Team shall promptly take reasonable actions to
obtain a rating from a Rating Agency; provided, however, the failure of TFFC
and Team to obtain such a new rating for such Series of Notes (or such class of
such Series of Notes) shall not be deemed to be a breach of any covenant or
obligation hereunder of TFFC or the Servicer. In the event that no rating is
obtained for such Series of Notes for a period of thirty (30) days after the
date that such non-rating commences, then the Required Noteholders with respect
to such unrated Series of Notes may obtain a rating for such Series of Notes,
in which case TFFC and Team shall reimburse the Required Noteholders for the
cost of

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obtaining such rating (including, without limitation, attorneys' fees, costs
and disbursements incurred in connection therewith).

ARTICLE 9.

AMORTIZATION EVENTS AND REMEDIES

Section 9.1. Amortization Events.

If any one of the following events shall occur during the
Revolving Period, the Accumulation Period or the Controlled Amortization Period
with respect to any Series of Notes:

(a) TFFC defaults in the payment of any interest on
any Note of a Series (or in any other payment on any Notes 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)
days;

(b) TFFC 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 1 Business Day;

(c) TFFC fails to comply with any of its other
agreements or covenants in, or provisions of, 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 thirty (30) days after the earlier of (i)
the date on which a Responsible Officer of TFFC 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 TFFC by
the Trustee or to TFFC and the Trustee by the Required Noteholders of
such Series; provided, however, that if such failure cannot reasonably
be cured within such thirty (30) day period, no Amortization Event
shall result therefrom so long as, within such thirty (30) day period,
TFFC (x) commences to cure same, (y) delivers written notice to the
Trustee notifying the Trustee of such failure and setting forth the
steps TFFC 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 fiftieth (50th) day
after the earlier of the dates set forth in clause (i) and clause (ii)
above;

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(d) the occurrence of an Event of Bankruptcy, with
respect to TFFC or Team;

(e) any Lease Event of Default shall occur;

(f) TFFC shall have become an "investment company" or
shall have become under the "control" of an "investment company" under
the Investment Company Act of 1940, as amended;

(g) subject to the provisions of Section 9.2(g)
hereof, any Asset Amount Deficiency exists and continues for a period
of 10 days;

(h) any of the Leases is terminated for any reason;

(i) any representation made by any member of the Team
Group 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 thirty (30) days after the earlier of (i) the date on which
a Responsible Officer of such member of the Team Group or TFFC obtains
knowledge thereof or (ii) the date that written notice thereof is
given to TFFC by the Trustee or to TFFC and the Trustee by the
Required Noteholders of such Series; provided, however, that if such
failure cannot reasonably be cured within such thirty (30) day period,
no Amortization Event shall result therefrom so long as, within such
thirty (30) 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
the fiftieth (50th) day 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), (i) or
(unless otherwise specified in the related Supplement) (j) above either the
Trustee, by written notice to TFFC, or the Required Noteholders of the
applicable Series of Notes, by written notice to TFFC 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) through (h)

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<PAGE> 87

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; provided, however, that the Trustee
shall have no liability in connection with any action or inaction taken, or not
taken by it upon the occurrence of an Amortization Event unless the Trustee has
actual knowledge of such Amortization Event; and, provided, further, that the
provisions of this sentence shall not insulate the Trustee from liability
arising out of its negligence or willful misconduct.

Section 9.2. 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 from
time to time any rights and remedies available to it under applicable law or
any Related Document; provided, however, that if such Amortization Event is
based solely on an event described in clauses (a), (b), (c), (i) or (j) of
Section 9.1, then the Trustee's rights and remedies pursuant to the provisions
of this Section 9.2 shall, to the extent not detrimental to the rights of the
holders of the applicable Series of Notes, be limited to rights and remedies
pertaining only to such Series of Notes. Any amounts obtained by 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 TFFC
Obligations and shall be applied as provided in Article 5 hereof.

(b) Leases. If a Liquidation Event of Default shall
have occurred and be continuing, the Trustee, at the direction of the Required
Beneficiaries, shall direct TFFC or the Servicer to exercise (and TFFC and the
Servicer each agree to exercise) all rights, remedies, powers, privileges and
claims of TFFC against Team and/or any Lessee under or in connection with such
Lease and any party to any of the Related Documents, including the right or
power to take any action to compel performance or observance by Team or any
such party of its obligations to TFFC, the right to take possession of any of
the Vehicles, and to give any consent, request, notice, direction, approval,
extension or waiver in respect of such Lease, and any right of TFFC to take
such action independent of such direction shall be suspended.

(c) Repurchase Programs; Non-Repurchase Leases. If a
Liquidation Event of Default or a Limited Liquidation Event of Default shall
have occurred and be continuing under a Lease, the Trustee may, and at the
direction of the Required Beneficiaries

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(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 TFFC or the Servicer to exercise (and TFFC and the Servicer each
agree to exercise) all rights, remedies, powers, privileges and claims of Team,
any Lessee and TFFC against the Manufacturers under or in connection with each
Repurchase Program relating to a Repurchase Vehicle leased under a Lease or, in
the case of a Limited Liquidation Event of Default, under the related Lease.
Upon the occurrence of a Liquidation Event of Default, the Trustee shall
promptly instruct TFFC or the Servicer to return the Repurchase Vehicles to the
related Manufacturers and then, to the extent any Manufacturer fails to accept
any such Repurchase Vehicles under the terms of the applicable Repurchase
Program, to direct TFFC or the Servicer to liquidate such Repurchase Vehicles
in accordance with the rights of TFFC under each Lease. In addition, upon the
earlier of actual knowledge of or receipt of notice of the occurrence of a
Liquidation Event of Default, the Trustee shall promptly direct TFFC or the
Servicer to liquidate Non-Repurchase Vehicles in accordance with the rights of
TFFC under each Non-Repurchase Lease. Upon the earlier of actual knowledge of
or receipt of notice of the occurrence of a Limited Liquidation Event of
Default, the Trustee shall promptly instruct TFFC or the Servicer to return the
Repurchase Vehicles leased under the related Lease to the related Manufacturers
in an amount sufficient, together with the Disposition Proceeds from
Non-Repurchase Vehicles, to pay all interest and principal on the related
Series of Notes, and to the extent that any Manufacturer fails to accept any
such Repurchase Vehicles under the terms of the applicable Repurchase Program,
to direct TFFC or the Servicer to liquidate such Repurchase Vehicles in
accordance with the rights of TFFC under the related Lease. TFFC and the
Servicer each agrees to comply with all such instructions. In addition, upon
the earlier of actual knowledge of or receipt of notice of the occurrence of a
Limited Liquidation Event of Default under a Non-Repurchase Vehicle Lease, the
Trustee shall promptly instruct TFFC or the Servicer to liquidate the related
Non-Repurchase Vehicles in accordance with the rights of TFFC under such
Non-Repurchase Vehicle Lease, in an amount sufficient, together with the
Disposition Proceeds from Repurchase Vehicles liquidated as described above, to
pay all interest and principal on the related Series of Notes.

(d) Lessee Partial Wind-Down Event. Upon the
occurrence of a Lessee Partial Wind-Down Event under a Lease, the Trustee, at
the direction of the Required Beneficiaries, shall direct TFFC or the Servicer
to exercise (and TFFC and the Servicer each agree to exercise) all rights,
remedies, powers, privileges and claims of TFFC against the Defaulting Lessee
under or in connection with such Lease or the Related Documents,

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including (i) the right or power to take any action to compel performance or
observance by the Defaulting Lessee or any such party of its obligations to
TFFC, the right to take possession of any of the Vehicles leased by the
Defaulting Lessee, and to give any consent, request, notice, direction,
approval, extension or waiver in respect of such Lease, and any right of TFFC
to take such action independent of such direction shall be suspended and (ii)
the right to cause the Defaulting Lessee to return to the applicable
Manufacturer (in the case of Repurchase Vehicles leased under such Lease), or
to sell, or cause the Servicer to sell, any or all of the Repurchase Vehicles
and Non-Repurchase Vehicles owned by TFFC and leased under such Lease to the
Defaulting Lessee at a public or private sale; provided, however, that the
applicable Defaulting Lessee shall have a right of first refusal in connection
with any such sale.

(e) Failure of TFFC or Servicer to Take Action. If
TFFC or the Servicer shall have failed, within 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), (c) or (d)
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, 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 TFFC or the
Servicer to take such action) on behalf of TFFC and the Noteholders.

(f) Right to Appointment of Receiver. In the event
that the Trustee determines to take action pursuant to the provisions of clause
(e) above, the Trustee may, without notice to TFFC, the Servicer or any Lessee,
take legal proceedings for the appointment of a receiver to take possession of
the applicable Vehicles pending the sale thereof and in any such event the
Trustee shall be entitled to the appointment of a receiver and neither TFFC,
the Servicer or any Lessee shall object to such appointment.

(g) Right of TFFC to Cure Asset Amount Deficiency.
Notwithstanding anything to the contrary contained in this Section 9, if (i) a
Rapid Amortization Period commences with respect to any Series of Notes as a
result of an Amortization Event described in Section 9.1(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 9)

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<PAGE> 90

the Asset Amount Deficiency is cured, (iii) no other Amortization Event then
exists and is continuing, and (iv) TFFC 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 recommence; provided,
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 TFFC 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 the otherwise expected,
and (z) if at the time of the termination of such Rapid Amortization Period
pursuant to the provisions of this Section 9.2 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 9.3. Special Provisions Concerning Remedies and Sale
Upon Manufacturer Event of Default or Inability to Turn Back under Repurchase
Program.

(a) Upon the occurrence of a Manufacturer Event of
Default, the Trustee shall have the right to (and shall, upon the direction of
the Required Beneficiaries) direct TFFC, or the Servicer to take such
reasonable actions at reasonable expense necessary to sell, or cause the
Servicer to sell, or cause the Servicer to sell, any or all of the Repurchase
Vehicles owned by TFFC and originated by such Manufacturer at a public or
private sale; provided, however, that the applicable Lessee shall have a right
of first refusal in connection with any such sale. If TFFC or the Servicer
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 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 TFFC to take such action) on behalf of
TFFC and the Noteholders. The Trustee may 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

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<PAGE> 91

Repurchase Vehicles pending the sale thereof pursuant either to the powers of
sale granted by this Indenture or to a judgment, order or decree made in any
judicial proceeding for the foreclosure or involving the enforcement of this
Indenture.

(b) Upon any sale of any of the Collateral directly by
the Trustee, whether made under the power of sale given under this Section 9.3
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, 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 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 TFFC, 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 9.3) 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, TFFC 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, TFFC 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 TFFC 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 TFFC, 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 TFFC, its
successors or assigns;

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<PAGE> 92

(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
wise answerable for any loss, misapplication or non-application
thereof; and

(vi) to the extent that it may lawfully do so, TFFC
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 Repurchase 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.

(c) In addition to any rights and remedies now or
hereafter granted hereunder or under applicable law with respect to the
Collateral, the Trustee shall (subject to the foregoing provisions in respect
of the Repurchase Vehicles) have all of the rights and remedies of a secured
party under the UCC as enacted in any applicable jurisdiction.

Section 9.4. Other Remedies.

If an Amortization Event or a Servicer Default occurs and is
continuing, 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
9.1, the Trustee shall instruct TFFC to cease issuing Notes and the right of
TFFC 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 TFFC to exercise any rights or remedies under any Related
Document or under applicable law or otherwise.

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. A delay or omission by the

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Trustee or any Noteholder in exercising any right or remedy accruing upon an
Amortization Event shall not impair the right or remedy or constitute a waiver
of or acquiescence in the Amortization Event. All remedies are cumulative to
the extent permitted by law.

Section 9.5. Waiver of Past Events.

Subject to Section 12.2 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), (c), (i) and (j) of Section 9.1
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. 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) through (h) of Section 9.1 shall not be subject to
waiver.

Section 9.6. Control by Required Beneficiaries.

The Required Beneficiaries 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 10.1, 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 9.7. 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:

(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;

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(c) Such Noteholder or Noteholders offer and, if
requested, provide to the Trustee indemnity 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 9.8. 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 9.9. Collection Suit by the Trustee.

If any Amortization Event specified in clauses (a) or (b) of
Section 9.1 occurs and is continuing, the Trustee is authorized to recover
judgment in its own name and as trustee of an express trust against TFFC for
the whole amount of principal and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, 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.

Section 9.10. 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 TFFC (or
any other obligor upon the Notes), its creditors or its property, and shall be
entitled and empowered to collect, receive and

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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 10.6 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 10.6 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 9.11. 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 5 of this Indenture.

Section 9.12. 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 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 9.7, or a suit by Noteholders of more than 10%
in principal amount of all then outstanding Notes.

Section 9.13. 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

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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 9.14. 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
9 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.

Section 9.15. Reassignment of Surplus.

After termination of this Indenture and the payment in full of
the TFFC Obligations, any proceeds of all the Collateral received or held by
the Trustee shall be turned over to TFFC and the Collateral shall be reassigned
to TFFC by the Trustee without recourse to the Trustee and without any
representations, warranties or agreements of any kind.

ARTICLE 10.

THE TRUSTEE

Section 10.1. Duties of the Trustee.

(a) If an Amortization Event or Servicer Default has
occurred and is continuing, 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 the Trustee has not received notice; and, provided, further, 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.

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(b) Except during the continuance of an Amortization
Event or Servicer Default:

(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 negligent action, its own 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 10.1.

(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 9.4.

(iv) The Trustee shall not be charged with knowledge of
any default by the Servicer in the performance of its obligations
under this Indenture, unless a Trust Officer of the Trustee obtains
actual knowledge of such failure or the Trustee receives written
notice of such failure from the Servicer or any Holders of Notes
evidencing not less than 10% of the aggregate principal amount of the
Notes of any Series adversely affected thereby.

(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 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

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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, or 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 Supplement.

(e) In the event that the Paying Agent or the Transfer
Agent and 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 the
Transfer Agent and 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 receipt of appropriate records and information, if
any, to perform such obligation, duty or agreement in the manner so required.

(f) Subject to Section 10.3, 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 TFFC interest agreed upon by TFFC and the Trustee from time to time
as may be permitted by law.

Section 10.2. Rights of the Trustee.

Except as otherwise provided by Section 10.1:

(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 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

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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 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 a Servicer Default (which has not
been cured), 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.

Section 10.3. 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 TFFC or an Affiliate
of TFFC 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 10.9.

Section 10.4. The Trustee's Disclaimer.

Except as set forth in Section 10.11, the Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, any Supplement, any Assignment or the Notes, it shall not be
accountable for TFFC's use of the proceeds from the Notes or any money paid to
TFFC or upon TFFC's direction under any provision hereof, and it shall not be
responsible for any statement or recital herein or therein or any statement in
the Notes or any other document in connection with the sale of Notes or
pursuant to this Indenture, any

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Supplement or any Assignment Agreement, other than its certificate of
authentication.

Section 10.5. Notice of Potential Amortization Events.

If a Potential Amortization Event occurs and is continuing and
if a Trust Officer of the Trustee obtains actual knowledge thereof, the Trustee
shall mail to Noteholders a notice of the Potential Amortization Event within
30 days after the Trustee obtains knowledge thereof.

Section 10.6. Compensation.

(a) The Servicer shall pay to the Trustee from time to
time reasonable compensation for its acceptance of this Indenture and services
hereunder as set forth in a letter agreement between the Servicer and the
Trustee. 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.
If the Trustee is appointed Successor Servicer pursuant to Section 4.17 of this
Indenture, the provisions of this Section 10.6 shall not apply to expenses,
disbursements and advances made or incurred by the Trustee as Successor
Servicer, which shall be covered out of the Servicing Fee.

(b) The Servicer shall not be required to reimburse
any expense or indemnify the Trustee against any loss, liability, or expense
incurred by the Trustee through the Trustee's own willful misconduct,
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.

Section 10.7. 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 sixty (60) days
prior written notice to TFFC and to each Noteholder, resign at

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any time and be discharged from the trust hereby created by so notifying TFFC
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 TFFC. TFFC or the Servicer may remove
the Trustee if:

(i) the Trustee fails to comply with Section 10.9;

(ii) the Trustee is adjudged a bankrupt or an insolvent
or an order for relief is entered with respect to the Trustee under
the Bankruptcy Code;

(iii) a custodian or public officer takes charge of the
Trustee or its property; or

(iv) the Trustee becomes incapable of acting;

provided, however, that if a Servicer Default then exists and has a material
adverse effect on the Noteholders of any Series of Notes, then for so long as
such Servicer Default continues, the Servicer's right to remove the Trustee
will cease and the Required Beneficiaries will have the right to remove the
Trustee upon written notice to the Servicer, TFFC and the Trustee.

If the Trustee resigns or is removed or if a vacancy exists in
the office of the Trustee for any reason, TFFC or the Servicer shall promptly
appoint a successor Trustee. Within one year after the successor
Trustee takes office, the Required Beneficiaries may appoint a successor
Trustee to replace the successor Trustee appointed by TFFC.

(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; TFFC or any Secured Party 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 months fails to comply
with Section 10.9, 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
TFFC. 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

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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
and subject to the Lien provided for in Section 10.6. Notwithstanding
replacement of the Trustee pursuant to this Section 10.7, the Servicer's
obligations under Section 10.6 hereof shall continue for the benefit of the
retiring Trustee.

Section 10.8. 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 10.9. 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, and (iii) subject to TIA Section 310(b), including the optional
provision permitted by the second sentence TIA Section 310(b)(9); it being
understood that for the purposes of the Indenture, with respect to Notes of any
Series, the provisions of TIA Section 301(b) with respect to conflicting
interests relating to "other securities" shall be interpreted to include Notes
of each other Series and with respect to "other indentures" shall include the
provisions of the Indenture relating to the Notes of such other Series. In
determining whether the Trustee has a conflicting interest as defined in TIA
Section 310(b)(1), the indentures set forth in the Indenture, if any, are
excluded.

(b) 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
10.7.

Section 10.10. 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

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shall have the power and may execute and deliver all instruments 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 10.10, 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 10.9 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 10.7 of this Base Indenture. 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 or as successor to the
Servicer 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.

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<PAGE> 104

(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then 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 10. 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
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 10.11. Representations and Warranties of Trustee.
The Trustee represents and warrants that:

(i) The Trustee is a banking corporation organized,
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; and

(iv) The Trustee meets the requirements of eligibility
as a trustee hereunder set forth in Section 10.9 hereof.

Section 10.12. 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 11.

DISCHARGE OF INDENTURE

Section 11.1. Termination of TFFC's Obligations.

(a) This Indenture shall cease to be of further effect
(except that the Servicer's obligations under Sections 4.12 and 10.6 and
TFFC's, the Trustee's and Paying Agent's obligations under Section 11.3 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 TFFC has paid all sums
payable hereunder.

(b) In addition, except as may be provided to the
contrary in any Supplement, TFFC may terminate all of its obligations under
this Indenture if:

(i) TFFC irrevocably deposits in trust with the Trustee
or at the option of the Trustee, with a trustee reasonably
satisfactory to the Trustee and TFFC under the terms of an
irrevocable trust agreement in form and substance satisfactory to the
Trustee, money or U.S. Government Obligations sufficient 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 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

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of said principal and interest with respect to the Notes; and

(ii) TFFC 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 to the same effect.

Then, this Indenture shall cease to be of further effect (except as provided in
this paragraph), and the Trustee, on demand of TFFC, shall execute proper
instruments acknowledging confirmation of and discharge under this Indenture.

(c) After such irrevocable deposit made pursuant to
Section 11.1(b) and satisfaction of the other conditions set forth herein, the
Trustee upon request shall acknowledge in writing the discharge of TFFC'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 11.2. Application of Trust Money.

The Trustee or a trustee satisfactory to the Trustee and TFFC
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to Section 11.1. 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 11.3. Repayment to TFFC.

The Trustee and the Paying Agent shall promptly pay to TFFC
upon written request any excess money or Notes held by them at any time.

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Subject to Section 2.7(c), the Trustee and the Paying Agent
shall pay to TFFC 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 12.

AMENDMENTS

Section 12.1. Without Consent of the Noteholders.

Without the consent of any Noteholder but with the consent of
the Rating Agencies, TFFC, 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 add to the covenants of TFFC 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 TFFC (provided, however, that TFFC will not pursuant
to this subsection 12.1(b) surrender any right or power it has
against the Servicer, the Guarantor, any Lessee or any Manufacturer);

(c) 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 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 TFFC 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;

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<PAGE> 108

(d) to cure any ambiguity, defect, or inconsistency or
to correct or supplement any provision contained herein or in any
Supplement or in any Notes issued hereunder;

(e) to provide for uncertificated Notes in addition to
certificated Notes;

(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 TFFC, accompanied by a resolution of the
Board of Directors authorizing the execution of any Supplement to effect such
amendment, and upon receipt by the Trustee and the Servicer of the documents
described in Section 2.2 hereof, the Trustee and the Servicer shall join with
TFFC 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 12.2. With Consent of the Noteholders.

Except as provided in Section 12.1, the provisions of this
Indenture and any Supplement (unless otherwise provided in such Supplement) and
each other Related Document to which TFFC is a party may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in
writing and consented to in writing by TFFC, 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 to this Indenture, the

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<PAGE> 109

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 Officers' Certificate as to the truth
of such factual matter). Notwithstanding the foregoing:

(i) any modification of this Section 12.2, any
requirement hereunder that any particular action be taken by
Noteholders holding a certain 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 Repurchase 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 shall require the consent of each affected
Noteholder; 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 TFFC 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
shall 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 shall require the consent
of each Noteholder; provided, however, that the Liens on Vehicles may
be released as provided in Section 3.6; (d) affect adversely the
interests, rights or obligations of any Noteholder individually in
comparison to any other Noteholder shall require the consent of such
Noteholder; or (e) amend or otherwise modify any Amortization Event
shall 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

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<PAGE> 110

preclude any other or further exercise thereof or the exercise of any other
power or right.

Section 12.3. 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 provided in Section
12.2, each Supplement may be amended as provided for in such Supplement.

Section 12.4. 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. TFFC may fix a record date
for determining which Noteholders must consent to such amendment or waiver.

Section 12.5. Notation on or Exchange of Notes.

The Trustee may place an appropriate notation about an
amendment or waiver on any Note thereafter authenticated. TFFC 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 12.6. The Trustee to Sign Amendments, etc.

The Trustee shall sign any Supplement authorized pursuant to
this Article 12 if the Supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but
need not, sign it. In signing 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 10.1, 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 TFFC in accordance with

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its terms. TFFC may not sign a Supplement until its Board of Directors
approves it.

ARTICLE 13.

MISCELLANEOUS

Section 13.1. Notices.

(a) Any notice or communication by TFFC or the Trustee
to the others shall be 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 TFFC:

5851 Lewis Road
Sandston, Virginia 23150
Attn: Mr. Donald J. Norwalk
Phone: (804) 222-5310
Fax: (804) 222-8998

If to the Trustee:

Bankers Trust Company
4 Albany Street
New York, New York 10006
Attn: Corporate Trust and Agency Group/Structured Finance
Phone: (212) 250-6137
Fax: (212) 250-6439

If to Team:

125 Basin Street, Suite 210
Daytona Beach, Florida 32114
Attn: Mr. Donald J. Norwalk
Phone: (904) 238-7035
Fax: (904) 238-7461

TFFC or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications;
provided, however, TFFC 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 TFFC mails a notice or communication to Noteholders, it
shall mail a copy to 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 13.2. 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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<PAGE> 113

Section 13.3. Certificate and Opinion as to Conditions
Precedent.

Upon any request or application by TFFC to the Trustee to take
any action under this Indenture, TFFC 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 13.4) 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 13.4) stating that, in the opinion of
such counsel, all such conditions precedent and covenants have been
complied with.

Section 13.4. 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.

Section 13.5. Rules by the Trustee and the Paying Agent.

The Trustee may make reasonable rules for action by or at a
meeting of Noteholders.

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<PAGE> 114

Section 13.6. No Recourse Against Others.

A director, Authorized Officer, employee or stockholder of
TFFC, as such, shall not have any liability for any obligations of TFFC under
the Notes or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Noteholder by accepting a
Note waives and releases all such liability.

Section 13.7. Duplicate Originals.

The parties may sign any number of copies of this Indenture.
One signed copy is enough to prove this Indenture.

Section 13.8. 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 13.9. Payment on Business Day.

In any case where any Distribution 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 land
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 Distribution Date, redemption date, or maturity date; provided,
however, that no interest shall accrue for the period from and after such
Distribution Date, redemption date, or maturity date, as the case may be.

Section 13.10. 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 13.11. No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret another indenture,
loan or debt agreement of TFFC or an Affiliate of TFFC. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.

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<PAGE> 115

Section 13.12. Successors.

All agreements of TFFC in this Indenture and the Notes shall
bind its successor; provided, however, TFFC 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 13.13. 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 13.14. 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 13.15. 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 13.16. 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 TFFC 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
TFFC and upon receipt of an Officers' Certificate from TFFC to the effect that
the conditions in clauses (a), (b) and (c) above have been complied with and
upon receipt of a certificate from the Trustee and each Enhancement Provider to
the effect that the conditions in clauses (a), (b) and (c) above relating to
the TFFC 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 TFFC.

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<PAGE> 116

TFFC and the Secured Parties hereby agree that, if any
Deposited Funds remain on deposit in the Collection Account after the
termination of this Indenture, such amounts shall be released by the Trustee
and paid to TFFC.

Section 13.17. No Bankruptcy Petition Against TFFC.

Each of the Secured Parties, the Trustee and the Servicer
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 TFFC
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 13.17 shall
constitute a waiver of any right to indemnification, reimbursement or other
payment from TFFC pursuant to this Indenture. In the event that any such
Secured Party, the Trustee or the Servicer takes action in violation of this
Section 13.17, TFFC shall file an answer with the bankruptcy court or otherwise
properly contesting the filing of such a petition by any such Secured Party,
the Trustee or the Servicer against TFFC or the commencement of such action and
raising the defense that such Secured Party, the Trustee or the Servicer has
agreed in writing not to take such action and should be estopped and precluded
thereof rom and such other defenses, if any, as its counsel advises that it may
assert. The provisions of this Section 13.17 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 Secured Party, the
Trustee or the Servicer in the assertion or defense of its claims in any such
proceeding involving TFFC.

Section 13.18. No Recourse.

The obligations of TFFC under this Indenture are solely the
corporate obligations of TFFC. 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 stockholder, employee,
officer, director or incorporator of TFFC. Fees, expenses or costs payable by
TFFC hereunder shall be payable by TFFC to the extent and only to the extent
that TFFC 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 5.

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<PAGE> 117

Section 13.19. Confidentiality.

The Trustee shall not disclose any Confidential Information to
any Person without the consent of Team or TFFC, other than (a) to any Secured
Party 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 and (c) as
requested or required by any state, federal or foreign authority or examiner
regulating such Person. "Confidential Information" means proprietary
information of Team or TFFC or other information that Team or TFFC 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 Team or TFFC.

Section 13.20. Special Provision Regarding Filing of
Certificates of Title. (a) Notwithstanding anything to the contrary contained
in this Indenture or any Related Document, including, without limitation, any
representation or warranty of TFFC contained in this Indenture or any Related
Document Vehicles owned by TFFC on the date of the issuance of the first Series
of Notes and/or Vehicles transferred to TFFC by an Affiliate (including a
Subsidiary) of Team as of such date pursuant to Section 2.1(b) of a Lease
and/or Vehicles purchased by TFFC at an auction shall, for the period
commencing on such date of issuance and ending on the date thirty (30) days
thereafter, constitute either "Eligible Repurchase Vehicles" or "Eligible
Non-Repurchase Vehicles," as applicable, notwithstanding the fact that the
Trustee's lien is not on such date noted as a first lien on the Certificates of
Title with respect to such Vehicles and notwithstanding the fact that TFFC is
not on such date noted on the Certificates of Title with respect to such
Vehicles as the owner of such Vehicles (or that such additional steps as may be
required to perfect the first Lien of the Trustee shall not have been taken in
any state in which notation on the Certificate of Title of TFFC as owner and
the Trustee as the holder of a first Lien are not sufficient to cause the
Trustee's Lien hereunder to be perfected); provided, however, that as a
condition to such Vehicles remaining as Eligible Repurchase Vehicles or
Eligible Non-Repurchase Vehicles, as applicable, (x) the Servicer and TFFC, in
accordance with the terms of the related Lease, shall promptly and diligently
take such steps as are necessary to cause all such Certificates of Title to be
changed so that TFFC is noted thereon as the owner of all such Vehicles and the
Trustee is noted thereon as the holder of a first Lien thereon (and to cause
such Lien of the Trustee to be perfected) or, if such steps cannot be taken
after such exercise of diligent efforts, cause

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<PAGE> 118

sufficient Vehicles to be repurchased by Lessees for the applicable Net Book
Value, with respect to Repurchase Vehicles, or the applicable Non-Repurchase
Vehicle Value, with respect to Non-Repurchase Vehicles, prior to the expiration
of such 30 day time period such that the conditions of this Section 13.20(a)
are satisfied, and (y) the Servicer and TFFC shall deliver an Officers'
Certificate to the Trustee regarding the status of such Vehicles in the form
annexed hereto as Exhibit J on or prior to the expiration of such thirty (30)
day period; and provided, further, however, that nothing in this Section
13.20(a) shall have any effect as applied to any Vehicle in the event that such
Vehicle is not an "Eligible Repurchase Vehicle" or an "Eligible Non-Repurchase
Vehicle," as applicable, for any reason other than as set forth in this Section
13.20(a).

(b) If the Servicer and TFFC fail to satisfy the
conditions set forth in Section 13.20(a) within the thirty (30) day period set
forth therein, same shall be an Amortization Event under clause (c) of Section
9.1; provided, however, such failure shall be deemed to materially and
adversely affect the interests of the Noteholders and TFFC shall not receive
the benefit of the thirty (30) day or fifty (50) day grace period provided in
such clause (c).

(c) Any Note Owner shall be entitled to examine copies
of up to 100 of the Certificates of Title (and the related applications to show
TFFC as the owner of such Vehicle and to note the lien of the Trustee thereon)
for Vehicles owned by TFFC on the date of the issuance of the first Series of
Notes (or Vehicles transferred to TFFC by an Affiliate (including a Subsidiary)
of Team, or Vehicles acquired by TFFC at an auction as of the date of the
issuance of the first Series of Notes pursuant to Section 2.1(b) of a Lease) if
such Note Owner first delivers to the Servicer a written request to review
copies of such Certificates of Title, which request shall (i) be delivered
after the twentieth day after the date of the issuance of the first Series of
Notes, (ii) contain a certification of such Note Owner that such person is a
Note Owner, (iii) specify the Vehicles for which copies of Certificates of
Title (and related applications) are desired and (iv) provide an address for
delivery of copies of such Certificates of Title (and related applications).
Within ten (10) days after receipt of notice as aforesaid, the Servicer shall
forward copies of such Certificates of Title (together with copies of the
related applications to show TFFC as the owner of the Vehicle and to note the
lien of the Trustee thereon, if required).

Section 13.21. Special Provision Regarding Affiliate Sale
Transactions. (a) In the event that, after the date of the issuance of the
first Series of Notes hereunder, the Issuer and a

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<PAGE> 119

Lessee desire that an Affiliate Sale Transaction occur pursuant to Section
2.1(b) of a Lease, then the Issuer shall deliver to the Trustee not less than
thirty (30) days prior written notice of such Affiliate Sale Transaction and
shall deliver to the Trustee, not later than five (5) Business Days prior to
the date of the closing of such Lessee Sale Transaction, the following:

(i) all deliveries required to be delivered by the
Selling Affiliate to the Lessor pursuant to Section 2.1(b) of the
related Lease;

(ii) an Officers' Certificate from each of the Servicer
and TFFC undertaking to comply with the provisions of this Section
13.21 in the form of the Officers' Certificate delivered to the
Trustee by the Servicer and TFFC in connection with the issuance of
the first Series of Notes;

(iii) a "true sale" Opinion of Counsel regarding the
transfer of the Team Acquired Vehicles from the Selling Affiliate to
the Lessor in substantially the same form as the opinion delivered to
the Trustee by Dechert Price & Rhoads in connection with the
Affiliate Sale Transactions that took place concurrently with the
issuance of the first Series of Notes; and

(iv) an Opinion of Counsel regarding the perfection of
the Trustee's security interest in the Affiliate Acquired Vehicles
and the priority of such interest in respect of the Liens of other
parties (other than Permitted Liens) upon the completion of the
retitling of the Vehicles into the name of the Issuer and the noting
of the Lien of the Trustee on the Certificates of Title with respect
thereto, substantially in the same form as the opinion delivered to
the Trustee by Dechert Price & Rhoads in connection with the
Affiliate Sale Transactions that took place concurrently with the
issuance of the first Series of Notes.

(b) All Team Acquired Vehicles acquired by the Issuer in
connection therewith shall, for the period commencing on the closing date of
such Affiliate Sale Transaction and ending on the date thirty (30) days
thereafter, be deemed to be "Eligible Repurchase Vehicles" or "Eligible
Non-Repurchase Vehicles," as appropriate, notwithstanding the fact that the
Trustee's lien is not noted as a first lien on the Certificates of Title with
respect to such Vehicles and notwithstanding the fact that TFFC is not on such
date noted on the Certificates of Title with respect to such Team Acquired
Vehicles as the owner of such Vehicles (or that such additional steps as may be
required to

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<PAGE> 120

perfect the first Lien of the Trustee shall not have been taken in any state in
which notation on the Certificate of Title of TFFC as owner and the Trustee as
the holder of a first Lien is not sufficient to cause the Trustee's Lien
hereunder to be perfected); provided, however, as a condition to such Team
Acquired Vehicles remaining "Eligible Repurchase Vehicles" or "Eligible
Non-Repurchase Vehicles," as appropriate, as set forth above, (x) the Servicer
and TFFC in accordance with the terms of the related Lease shall promptly and
diligently take such steps as are necessary to cause all such Certificates of
Title to be changed so that TFFC is noted thereon as the owner of all such Team
Acquired Vehicles and the Trustee is noted thereon as the holder of a first
Lien thereon (and to cause the Trustee's Lien to be perfected) or, if such
steps cannot be taken after such exercise of reasonable efforts, cause
sufficient Team Acquired Vehicles to be repurchased by Lessees for the
applicable Net Book Value prior to the expiration of the foregoing thirty (30)
day period so that the foregoing conditions are satisfied and (y) TFFC and the
Servicer shall deliver an Officers' Certificate to the Trustee regarding the
status of such Team Acquired Vehicles in the form annexed hereto as Exhibit J
on or prior to the expiration of the foregoing thirty (30) day period; and
provided, further, however, the foregoing provisions of this Section 13.21(b)
shall have no effect as applied to any Team Acquired Vehicle in the event that
such Team Acquired Vehicle is not an "Eligible Repurchase Vehicle" or "Eligible
Non-Repurchase Vehicle," as appropriate, for any reason other than as set forth
in the foregoing provisions of this Section 13.21(b).

(c) If the Servicer and TFFC fail to satisfy the
conditions set forth in Section 13.21(b) within the thirty (30) day period
provided for therein, same shall be an Amortization Event under clause (c) of
Section 9.1; provided, however, such failure shall be deemed to materially and
adversely affect the interests of the Noteholders and TFFC shall not receive
the benefit of the thirty (30) day or fifty (50) day grace period provided in
such clause (c).

Section 13.22. Special Provision Regarding Auction Acquired
Vehicles. (a) In the event that, after the date of the issuance of the first
Series of Notes hereunder, the Issuer and a Lessee desire that the Issuer
acquire a Vehicle at an auction conducted by a dealer not affiliated with Team
pursuant to the terms of a Lease, then the Issuer shall deliver to the Trustee
not less than thirty (30) days prior written notice of such auction and shall
deliver to the Trustee, not later than five (5) Business Days prior to the date
of such auction, the following:

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<PAGE> 121

(i) all deliveries required to be delivered by the
Lessee requesting the acquisition of such Vehicle or Vehicles at
auction pursuant to the related Lease;

(ii) an Officers' Certificate from each of the Servicer
and TFFC undertaking to comply with the provisions of this Section
13.22 in the form of the Officers' Certificate delivered to the
Trustee by the Servicer and TFFC in connection with the issuance of
the first Series of Notes; and

(iii) an Opinion of Counsel regarding the perfection of
the Trustee's security interest in the Vehicles acquired at auction
and the priority of such interest in respect of the Liens of other
parties (other than Permitted Liens) upon the completion of the
retitling of the Vehicles into the name of the Issuer and the noting
of the Lien of the Trustee on the Certificates of Title with respect
thereto, substantially in the same form as the opinion delivered to
the Trustee by Dechert Price & Rhoads in connection with the
Affiliate Sale Transactions that took place concurrently with the
issuance of the first Series of Notes.

(b) All Auction Acquired Vehicles acquired by the Issuer
shall, for the period commencing on the closing date of such Affiliate auction
and ending on the date twenty (20) days thereafter, be deemed to be "Eligible
Repurchase Vehicles" or "Eligible Non-Repurchase Vehicles," as appropriate,
notwithstanding the fact that the Trustee's lien is not noted as a first lien
on the Certificates of Title with respect to such Vehicles and notwithstanding
the fact that TFFC is not on such date noted on the Certificates of Title with
respect to such Auction Acquired Vehicles as the owner of such Vehicles (or
that such additional steps as may be required to perfect the first Lien of the
Trustee shall not have been taken in any state in which notation on the
Certificate of Title of TFFC as owner and the Trustee as the holder of a first
Lien is not sufficient to cause the Trustee's Lien hereunder to be perfected);
provided, however, as a condition to such Auction Acquired Vehicles remaining
"Eligible Repurchase Vehicles" or "Eligible Non-Repurchase Vehicles," as
appropriate, as set forth above, (x) the Servicer and TFFC in accordance with
the terms of the related Lease shall promptly and diligently take such steps as
are necessary to cause all such Certificates of Title to be changed so that
TFFC is noted thereon as the owner of all such Auction Acquired Vehicles and
the Trustee is noted thereon as the holder of a first Lien thereon (and to
cause the Trustee's Lien to be perfected) or, if such steps cannot be taken
after such exercise of reasonable efforts, cause sufficient Auction Acquired
Vehicles

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<PAGE> 122

to be repurchased by Lessees for the applicable Net Book Value prior to the
expiration of the foregoing twenty (20) day period so that the foregoing
conditions are satisfied and (y) TFFC and the Servicer shall deliver an
Officers' Certificate to the Trustee regarding the status of such Team Acquired
Vehicles in the form annexed hereto as Exhibit J on or prior to the expiration
of the foregoing twenty (20) day period; and provided, further, however, the
foregoing provisions of this Section 13.22(b) shall have no effect as applied
to any Auction Acquired Vehicle in the event that such Auction Acquired Vehicle
is not an "Eligible Repurchase Vehicle" or "Eligible Non-Repurchase Vehicle,"
as appropriate, for any reason other than as set forth in the foregoing
provisions of this Section 13.22(b).

(c) If the Servicer and TFFC fail to satisfy the
conditions set forth in Section 13.22(b) within the twenty (20) period provided
for therein, same shall be an Amortization Event under clause (c) of Section
9.1; provided, however, such failure shall be deemed to materially and
adversely affect the interests of the Noteholders and TFFC shall not receive
the benefit of the thirty (30) day or fifty (50) day grace period provided in
such clause (c).

* * *

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<PAGE> 123

IN WITNESS WHEREOF, the Trustee, the Servicer, Team, as Team
Interestholder, and TFFC have caused this Amended and Restated Base Indenture
to be duly executed by their respective duly authorized officers as of the day
and year first written above.

TEAM FLEET FINANCING CORPORATION,
as Issuer

By: Sanford Miller
--------------------------------
Name: Sanford Miller
Title: Chairman and Chief
Executive Officer and
President

TEAM RENTAL GROUP, INC., as Servicer

By: Sanford Miller
--------------------------------
Name: Sanford Miller
Title: Chief Executive Officer

TEAM RENTAL GROUP, INC.,
as Team Interestholder

By: Sanford Miller
---------------------------------
Name: Sanford Miller
Title: Chief Executive Officer

BANKERS TRUST COMPANY, as Trustee

By: Lillian K. Peros
--------------------------------
Name: Lillian K. Peros
Title: Assistant Treasurer

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<PAGE> 1

EXHIBIT 4.16

SERIES 1996-1 SUPPLEMENT

dated as of December 1, 1996
to the

AMENDED AND RESTATED BASE INDENTURE
dated as of December 1, 1996

among

TEAM FLEET FINANCING CORPORATION
the Issuer

TEAM RENTAL GROUP, INC.
the Servicer

TEAM RENTAL GROUP, INC.
the Team Interestholder

and

BANKERS TRUST COMPANY
the Trustee

<PAGE> 2

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 1

DESIGNATION . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 2

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 2

Section 2.1 Incorporation of Schedule 1, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.2 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE 3

SECURITY; REPORTS; COVENANT . . . . . . . . . . . . . . . . . . . . . 28

Section 3.1 Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.2 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 3.3 Auction Acquired Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

ARTICLE 4

SERIES 1996-1 ALLOCATIONS . . . . . . . . . . . . . . . . . . . . . 30

Section 4.1 Establishment of Series 1996-1 Collection Account, Series 1996-1 Excess
Funding Account and Series 1996-1 Accrued Interest Account . . . . . . . . . . . . 30
Section 4.2 Allocations with respect to the Series 1996-1 Notes . . . . . . . . . . . . . . . . 31
Section 4.3 Monthly Payments from the Series 1996-1 Accrued Interest Account . . . . . . . . . 46
Section 4.4 Payment of Note Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 4.5 Payment of Note Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 4.6 Servicer's or Team's Failure to Make a Deposit or Payment . . . . . . . . . . . . . 52
Section 4.7 Team Distribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.8 Class A Distribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 4.9 Class B Distribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 4.10 Class B Notes Subordinate to Class A Notes . . . . . . . . . . . . . . . . . . . . 55
Section 4.11 Application of Liquidity Amount; Allocation of Certain Amounts to Interest . . . . 55

</TABLE>

- i -
<PAGE> 3

<TABLE>
<S> <C> <C>
ARTICLE 5

RIGHT TO WAIVE PURCHASE RESTRICTIONS . . . . . . . . . . . . . . . . . . . 56

Section 5.1 Request for Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 5.2 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

ARTICLE 6

AMORTIZATION EVENTS . . . . . . . . . . . . . . . . . . . . . . . 60

ARTICLE 7

FORM OF SERIES 1996-1 NOTES . . . . . . . . . . . . . . . . . . . . . 61

Section 7.1 Class A Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 7.2 Class B Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

ARTICLE 8

GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . 63

</TABLE>
Exhibit A-1 - Form of Restricted Global Class A Note
Exhibit A-2 - Form of Temporary Global Class A Note
Exhibit A-3 - Form of Permanent Global Class A Note
Exhibit B-1 - Form of Restricted Global Class B Note
Exhibit B-2 - Form of Temporary Global Class B Note
Exhibit B-3 - Form of Permanent Global Class B Note
Exhibit C - Form of Consent

- ii -
<PAGE> 4

Series 1996-1 Supplement, dated as of December 1, 1996 (this
"Supplement"), among Team Fleet Financing Corporation, a Delaware corporation
("TFFC" or the "Issuer"), Team Rental Group, Inc., a Delaware corporation
("Team"), as the Servicer (in such capacity, the "Servicer"), Team, as the
holder of the Team Interest (in such capacity, the "Team Interestholder"), and
Bankers Trust Company, a banking corporation organized and existing under the
laws of the State of New York, as Trustee (the "Trustee") under the Amended and
Restated Base Indenture, dated as of December 1, 1996, among TFFC, the
Servicer, Team, as the Team Interestholder, and the Trustee (as amended,
supplemented or otherwise modified from time to time, exclusive of Supplements
creating a new Series of Notes, the "Base Indenture").

PRELIMINARY STATEMENT

WHEREAS, Sections 2.2 and 12.1 of the Base Indenture provide,
among other things, that TFFC, the Servicer 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

There is hereby created a Series of Notes to be issued
pursuant to the Base Indenture and this Supplement and such Series of Notes (as
defined below) shall be designated generally as Fixed Rate Rental Car Asset
Backed Notes, Series 1996-1. The Series 1996-1 Notes shall be issued in two
classes. The Class A Rental Car Asset Backed Notes shall be designated
generally as the Class A Notes and the Class B Rental Car Asset Backed Notes
shall be designated generally as the Class B Notes. The Class A Notes and the
Class B Notes are referred to collectively as the "Series 1996-1 Notes".

The Class B Notes are subordinated in right of payment to the
Class A Notes to the extent set forth herein.

The proceeds from the sale of the Series 1996-1 Notes shall be
deposited in the Series 1996-1 Collection Account (and allocated by the Trustee
to the Series 1996-1 Excess Funding Account) and shall be paid to TFFC and used
to purchase Vehicles for leasing to the Lessees under the Series 1996-1 Lease
to the extent that Vehicles are available thereunder on the date hereof.

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Any proceeds not so used to purchase Vehicles shall be deemed to be Principal
Collections.

The Series 1996-1 Notes are a Segregated Series of Notes (as
more fully described in the Base Indenture). 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.

ARTICLE 2

DEFINITIONS

Section 2.1 Incorporation of Schedule 1, Etc. 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
1996-1 Notes and not to any other Series of Notes issued by TFFC.

Section 2.2 Defined Terms. The following words and phrases
shall have the following meanings with respect to the Series 1996-1 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:

"Asset Amount Deficiency" with respect to the Series 1996-1
Notes, will occur if, at any time, either the Series 1996-1 Required Asset
Amount exceeds the Series 1996-1 Aggregate Asset Amount or the sum of (i) the
Net Book Value of all Series 1996-1 Segregated Repurchase Vehicles owned by the
Issuer plus (ii) all cash and Permitted Investments on deposit in the Series
1996-1 Collection Account is less than 50% of the Series 1996-1 Aggregate Asset
Amount.

"Base Indenture" has the meaning set forth in the preamble.

"Change of Percentage Notice" has the meaning set forth in
Section 5.1(a) of this Supplement.

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"Class A Carryover Controlled Amortization Amount" means, with
respect to the Class A Notes for any Related Month during the Class A
Controlled Amortization Period, the sum of (x) the amount, if any, by which the
portion of the Monthly Total Principal Allocation allocable to the Class A
Notes for the previous Related Month plus any amounts in excess of the
Liquidity Amount drawn from the Series 1996-1 Excess Funding Account on account
of the related Class A Controlled Distribution Amount was less than the Class A
Controlled Amortization Amount for such previous Related Month, and (y) the sum
of the deficiencies, to the extent unpaid, for each Related Month prior
thereto; provided, however, that for the first Related Month in the Class A
Controlled Amortization Period, the Class A Carryover Controlled Amortization
Amount shall be zero.

"Class A Collateral" means the Series 1996-1 Collateral and
the Class A Distribution Account Collateral.

"Class A Controlled Amortization Amount" means with respect to
any Related Month during the Class A Controlled Amortization Period,
$13,833,334.

"Class A Controlled Amortization Period" means the period
commencing at the close of business on May 1, 2001 (or, if such day is not a
Business Day, the Business Day immediately preceding such day) and continuing
to the earliest of (i) the commencement of the Series 1996-1 Rapid Amortization
Period, (ii) the date on which the Class A Notes are fully paid, (iii) the
Series 1996-1 Termination Date, and (iv) the termination of the Indenture.

"Class A Controlled Distribution Amount" means, with respect
to any Related Month during the Class A Controlled Amortization Period, an
amount equal to the sum of the Class A Controlled Amortization Amount and any
Class A Carryover Controlled Amortization Amount for such Related Month.

"Class A Deficiency Amount" has the meaning specified in
Section 4.3(c) of this Supplement.

"Class A Distribution Account" has the meaning specified in
Section 4.8(a) of this Supplement.

"Class A Distribution Account Collateral" has the meaning
specified in Section 4.8(d) of this Supplement.

"Class A Expected Final Distribution Date" means the May 2002
Distribution Date.

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"Class A Initial Invested Amount" means the aggregate initial
principal amount of the Class A Notes, which is $166,000,000.

"Class A Invested Amount" means, when used with respect to any
date, an amount equal to (a) the Class A Initial Invested Amount minus (b) the
amount of principal payments made to Class A Noteholders on or prior to such
date minus (c) all Losses allocated to the Class A Noteholders plus (d) all
Recoveries allocated to the Class A Noteholders on or prior to such date.

"Class A Investor Monthly Servicing Fee" means, on any
Distribution Date, 1/12th of 1% of the Class A Invested Amount as of the
preceding Distribution Date (or the Series 1996-1 Issuance Date, in the case of
the initial Distribution Date).

"Class A Monthly Supplemental Servicing Fee" means, on any
Distribution Date, the product of the Supplemental Servicing Fee accrued on
such date and a fraction, the numerator of which shall be the Class A Invested
Amount on such Distribution Date and the denominator of which shall be the sum
of (x) the aggregate of the invested amounts for all outstanding Series of
Notes on such Distribution Date plus (y) the Team Interest (including available
subordinated amounts, if any, for all Series).

"Class A Non-Repurchase Percentage" means on any date of
determination:

(a) when used with respect to Non-Repurchase
Principal Collections during the Series 1996- 1 Revolving Period, the
percentage equivalent of a fraction the numerator of which shall be
equal to the product of (A) the Class A Invested Amount as of the end
of the Related Month or, until the end of the initial Related Month,
on the Series 1996-1 Issuance Date and (B) the Series 1996-1
Non-Repurchase Percentage for such day, and the denominator of which
shall be the greater of (I) the Series 1996-1 Aggregate Non-Repurchase
Asset Amount as of the end of the Related Month or, until the end of
the initial Related Month, as of the Series 1996-1 Issuance Date, and
(II) as of the same date as in clause (I), the sum of the numerators
used to determine (i) invested percentages for allocations with
respect to Non-Repurchase Principal Collections (for all Segregated
Series of Notes and all classes of such Series of Notes) and (ii)
available subordinated amount percentages for allocations with respect
to Non-Repurchase Principal Collections (for all Segregated Series of
Notes that provide for credit enhancement in the form of
overcollateralization);

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(b) when used with respect to Non-Repurchase
Principal Collections during the Series 1996- 1 Controlled
Amortization Period and the Series 1996-1 Rapid Amortization Period,
the percentage equivalent of a fraction the numerator of which shall
be the product of (A) the Class A Invested Amount as of the end of the
Series 1996-1 Revolving Period and (B) the Series 1996-1
Non-Repurchase Percentage for such day, and the denominator of which
shall be the greater of (I) the Aggregate Non-Repurchase Asset Amount
as of the end of the Related Month or, until the end of the initial
Related Month, as of the Series 1996-1 Issuance Date, and (II) as of
the same date as in clause (I), the sum of the numerators used to
determine (i) invested percentages for allocations with respect to
Non-Repurchase Principal Collections (for all Segregated Series of
Notes and all classes of such Series of Notes) and (ii) available
subordinated amount percentages for allocations with respect to
Non-Repurchase Principal Collections (for all Segregated 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 Non-Repurchase Losses
allocated to the Class A Noteholders as of the end of the Related
Month and the denominator of which shall be the cumulative amount of
all unreimbursed Non-Repurchase Losses for the Noteholders of all
Segregated Series of Notes and the Team Interestholder (including all
unreimbursed Non-Repurchase Losses in respect of available
subordinated amounts, if any, for all Segregated Series) as of the end
of such Related Month;

(d) when used with respect to Non-Repurchase
Losses, the percentage equivalent of a fraction, the numerator of
which shall be the product of (A) the Class A Invested Amount as of
the end of the Related Month and (B) the Series 1996-1 Non-Repurchase
Percentage for such day, and the denominator of which shall be the
greater of (I) the Aggregate Non-Repurchase Asset Amount as of the end
of the Related Month or, until the end of the initial Related Month,
as of the Series 1996-1 Issuance Date, and (II) as of the same date as
in clause (I), the sum of the numerators used to determine (i)
invested percentages for allocations with respect to Non-Repurchase
Losses (for all Segregated Series of Notes and all classes of such
Series of Notes) and (ii) available subordinated amount percentages
for allocations with respect to Non-Repurchase Losses (for all
Segregated Series of Notes that provide for credit enhancement in the
form of overcollateralization); and

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(e) when used with respect to Non-Repurchase
Interest Collections, the percentage equivalent of a fraction the
numerator of which shall be the Accrued Amounts with respect to the
Class A Notes on such date of determination, and the denominator of
which shall be the aggregate Accrued Amounts with respect to all
Segregated Series of Notes on such date of determination.

"Class A Note Rate" means, for any Series 1996-1 Interest
Period, 6.65% per annum; provided, however, that the Class A Note Rate will in
no event be higher than the maximum rate permitted by applicable law.

"Class A Noteholder" means the Person in whose name a Class A
Note is registered in the Note Register.

"Class A Notes" means any one of the Fixed Rate Rental Car
Asset Backed Notes, Class A, executed by TFFC 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 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 Repurchase Amount" has the meaning specified in
Article 8 of this Supplement.

"Class A Segregated Repurchase Percentage" means on any date
of determination:

(a) when used with respect to Segregated
Repurchase Principal Collections during the Series 1996-1 Revolving
Period, the percentage equivalent of a fraction the numerator of which
shall be equal to the product of (A) the Class A Invested Amount as of
the end of the Related Month or, until the end of the initial Related
Month, on the Series 1996-1 Issuance Date and (B) the Series 1996-1
Segregated Repurchase Percentage for such day, and the denominator of
which shall be the greater of (I) the Aggregate Segregated Repurchase
Asset Amount as of the end of the Related Month or, until the end of
the initial Related Month, as of the Series 1996-1 Issuance Date, and
(II) as of the same date as in clause (I), the sum of the numerators
used to determine (i) the invested percentages for allocations with
respect to Segregated Repurchase Principal Collections (for all
Segregated Series of Notes and all classes of such Series of Notes)
and (ii) the available subordinated amount percentages for allocations
with respect to Segregated Repurchase Principal Collections (for all
Segregated Series of Notes that provide for credit enhancement in the
form of overcollateralization);

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(b) when used with respect to Segregated
Repurchase Principal Collections during the Series 1996-1 Controlled
Amortization Period and the Series 1996-1 Rapid Amortization Period,
the percentage equivalent of a fraction the numerator of which shall
be the product of (A) the Class A Invested Amount as of the end of the
Series 1996-1 Revolving Period and (B) the Series 1996-1 Segregated
Repurchase Percentage for such day, and the denominator of which shall
be the greater of (I) the Aggregate Segregated Repurchase Asset Amount
as of the end of the Related Month or, until the end of the initial
Related Month, as of the Series 1996-1 Issuance Date, and (II) as of
the same date as in clause (I), the sum of the numerators used to
determine (i) the invested percentages for allocations with respect to
Segregated Repurchase Principal Collections (for all Segregated Series
of Notes and all classes of such Series of Notes) and (ii) the
available subordinated amount percentages for allocations with respect
to Segregated Repurchase Principal Collections (for all Segregated
Series of Notes that provide for credit enhancement in the form of
overcollateralization);

(c) when used with respect to Segregated
Repurchase Recoveries, the percentage equivalent of a fraction, the
numerator of which will be the cumulative amount of all unreimbursed
Segregated Repurchase Losses allocated to the Class A Noteholders as
of the end of the Related Month and the denominator of which will be
the cumulative amount of all unreimbursed Segregated Repurchase Losses
for the Noteholders of all Segregated Series of Notes and the Team
Interestholder (including all unreimbursed Segregated Repurchase
Losses in respect of available subordinated amounts, if any, for all
Segregated Series) as of the end of such Related Month;

(d) when used with respect to Segregated
Repurchase Losses, the percentage equivalent of a fraction, the
numerator of which shall be the product of (A) the Class A Invested
Amount as of the end of the Related Month and (B) the Series 1996-1
Segregated Repurchase Percentage for such day, and the denominator of
which shall be the greater of (I) the Aggregate Segregated Repurchase
Asset Amount as of the end of the Related Month or, until the end of
the initial Related Month, as of the Series 1996-1 Issuance Date, and
(II) as of the same date as in clause (I), the sum of the numerators
used to determine (i) invested percentages for allocations with
respect to Segregated Repurchase Losses (for all Segregated Series of
Notes and all classes of such Series of Notes) and (ii) available
subordinated amount percentages for allocations with respect to
Segregated Repurchase Losses (for all Segregated Series of Notes that

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provide for credit enhancement in the form of overcollateralization);
and

(e) when used with respect to Segregated
Repurchase Interest Collections, the percentage equivalent of a
fraction the numerator of which shall be the Accrued Amounts with
respect to the Class A Notes on such date of determination, and the
denominator of which shall be the aggregate Accrued Amounts with
respect to all Segregated Series of Notes on such date of
determination.

"Class A Waiver Deficiency Adjustment Prepayments" has the
meaning set forth in Section 5.2(a) of this Supplement.

"Class B Carryover Controlled Amortization Amount" means, with
respect to the Class B Notes for any Related Month during the Class B
Controlled Amortization Period, the sum of (x) the amount, if any, by which the
portion of the Monthly Total Principal Allocation allocable to the Class B
Notes for the previous Related Month plus any amounts in excess of the
Liquidity Amount drawn from the Series 1996-1 Excess Funding Account on account
of the related Class B Controlled Distribution Amount was less than the Class B
Controlled Amortization Amount for such previous Related Month, and (y) the sum
of such deficiencies, to the extent unpaid, for each Related Month prior
thereto; provided, however, that for the first Related Month in the Class B
Controlled Amortization Period, the Class B Carryover Controlled Amortization
Amount shall be zero.

"Class B Collateral" means the Series 1996-1 Collateral and
the Class B Distribution Account Collateral.

"Class B Controlled Amortization Amount" means, with respect
to any Related Month during the Class B Controlled Amortization Period,
$10,000,000.

"Class B Controlled Amortization Period" means the period
commencing as of the close of business on May 1, 2002 (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 1996-1 Rapid Amortization
Period, (ii) the date on which the Class B Notes are fully paid, (iii) the
Series 1996-1 Termination Date, and (iv) the termination of the Indenture.

"Class B Controlled Distribution Amount" means, with respect
to any Related Month during the Class B Controlled Amortization Period, an
amount equal to the sum of the Class B Controlled Amortization Amount and any
Class B Carryover Controlled Amortization Amount for such Related Month.

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"Class B Deficiency Amount" has the meaning specified in
Section 4.3(d) of this Supplement.

"Class B Distribution Account" has the meaning specified in
Section 4.9 of this Supplement.

"Class B Distribution Account Collateral" has the meaning
specified in Section 4.9 of this Supplement.

"Class B Expected Final Distribution Date" means the June 2002
Distribution Date.

"Class B Initial Invested Amount" means the aggregate initial
principal amount of the Class B Notes, which is $10,000,000.

"Class B Invested Amount" means, when used with respect to any
date, an amount equal to (a) the Class B Initial Invested Amount minus (b) the
amount of principal payments made to Class B Noteholders on or prior to such
date minus (c) all Losses allocated to the Class B Noteholders plus (d) all
Recoveries allocated to the Class B Noteholders on or prior to such date.

"Class B Investor Monthly Servicing Fee" means, on any
Distribution Date, 1/12 of 1% of the Class B Invested Amount as of the
preceding Distribution Date (or the Series 1996-1 Issuance Date, in the case of
the initial Distribution Date).

"Class B Monthly Supplemental Servicing Fee" means, on any
Distribution Date, the product of the Supplemental Servicing Fee accrued on
such date times a fraction, the numerator of which shall be the Class B
Invested Amount on such Distribution Date and the denominator of which shall be
the sum of (x) the aggregate of the invested amounts for all outstanding Series
of Notes on such Distribution Date plus (y) the Team Interest (including
available subordinated amounts, if any, for all Series).

"Class B Non-Repurchase Percentage" means on any date of
determination:

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or, until the end of the initial Related Month, as of the Series
1996-1 Issuance Date, and (II) as of the same date as in clause (I),
the sum of the numerators used to determine (i) invested percentages
for allocations with respect to Non-Repurchase Principal Collections
(for all Segregated Series of Notes and all classes of such Series of
Notes) and (ii) available subordinated amount percentages for
allocations with respect to Non- Repurchase Principal Collections (for
all Segregated Series of Notes that provide for credit enhancement in
the form of overcollateralization);

(b) when used with respect to Non-Repurchase
Principal Collections during the Series 1996- 1 Controlled
Amortization Period and the Series 1996-1 Rapid Amortization Period,
the percentage equivalent of a fraction the numerator of which shall
be the product of (A) the Class B Invested Amount as of the end of the
Series 1996-1 Revolving Period and (B) the Series 1996-1
Non-Repurchase Percentage for such day, and the denominator of which
shall be the greater of (I) the Aggregate Non-Repurchase Asset Amount
as of the end of the Related Month or, until the end of the initial
Related Month, as of the Series 1996-1 Issuance Date, and (II) as of
the same date as in clause (I), the sum of the numerators used to
determine (i) the invested percentages for allocations with respect to
Non-Repurchase Principal Collections (for all Segregated Series of
Notes and all classes of such Series of Notes) and (ii) available
subordinated amount percentages for allocations with respect to
Non-Repurchase Principal Collections (for all Segregated 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 will be
the cumulative amount of all unreimbursed Non-Repurchase Losses
allocated to the Class B Noteholders as of the end of the Related
Month and the denominator of which will be the cumulative amount of
all unreimbursed Non-Repurchase Losses for the Noteholders of all
Segregated Series of Notes and the Team Interestholder (including all
unreimbursed Non-Repurchase Losses in respect of available
subordinated amounts, if any, for all Segregated Series) as of the end
of such Related Month;

(d) when used with respect to Non-Repurchase
Losses, the percentage equivalent of a fraction, the numerator of
which shall be the product of (A) the Class B Invested Amount as of
the end of the Related Month and (B) the Series 1996-1 Non-Repurchase
Percentage for such day, and the denominator of which shall be the
greater of (I) the

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Aggregate Non-Repurchase Asset Amount as of the end of the Related
Month or, until the end of the initial Related Month, as of the Series
1996-1 Issuance Date, and (II) 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 Non-Repurchase Losses (for all
Segregated Series of Notes and all classes of such Series of Notes)
and (ii) available subordinated amount percentages for allocations
with respect to Non-Repurchase Losses (for all Segregated Series of
Notes that provide for credit enhancement in the form of
overcollateralization); and

(e) when used with respect to Non-Repurchase
Interest Collections, the percentage equivalent of a fraction the
numerator of which shall be the Accrued Amounts with respect to the
Class B Notes on such date of determination, and the denominator of
which shall be the aggregate Accrued Amounts with respect to all
Segregated Series of Notes on such date of determination.

"Class B Note Rate" means, for any Series 1996-1 Interest
Period, 7.10% per annum; provided, however, that the Class B Note Rate will in
no event be higher than the maximum rate permitted by applicable law.

"Class B Noteholder" means the Person in whose name a Class A
Note is registered in the Note Register.

"Class B Notes" means any one of the Fixed Rate Rental Car
Asset Backed Notes, Class B, executed by TFFC 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 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 Repurchase Amount" has the meaning specified in
Article 8 of this Supplement.

"Class B Segregated Repurchase Percentage" means on any date
of determination:

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Aggregate Segregated Repurchase Asset Amount as of the end of the
Related Month or, until the end of the initial Related Month, as of
the Series 1996-1 Issuance Date, and (II) as of the same date as in
the clause (I), the sum of the numerators used to determine (i)
invested percentages for allocations with respect to Segregated
Repurchase Principal Collections (for all Segregated Series of Notes
and all classes of such Series of Notes) and (ii) available
subordinated amount percentages for allocations with respect to
Segregated Repurchase Principal Collections (for all Segregated Series
of Notes that provide for credit enhancement in the form of
overcollateralization);

(b) when used with respect to Segregated
Repurchase Principal Collections during the Series 1996-1 Controlled
Amortization Period and the Series 1996-1 Rapid Amortization Period,
the percentage equivalent of a fraction the numerator of which shall
be the product of (A) the Class B Invested Amount as of the end of the
Series 1996-1 Revolving Period and (B) the Series 1996-1 Segregated
Repurchase Percentage for such day, and the denominator of which shall
be the greater of (I) the Aggregate Segregated Repurchase Asset Amount
as of the end of the Related Month and (II) as of the same date as in
clause (I), the sum of the numerators used to determine (i) invested
percentages for allocations with respect to Segregated Repurchase
Principal Collections (for all Segregated Series of Notes and all
classes of such Series of Notes) and (ii) available subordinated
amount percentages for allocations with respect to Segregated
Repurchase Principal Collections (for all Segregated Series of Notes
that provide for credit enhancement in the form of
overcollateralization);

(c) when used with respect to Segregated
Repurchase Recoveries, the percentage equivalent of a fraction, the
numerator of which will be the cumulative amount of all unreimbursed
Segregated Repurchase Losses allocated to the Class B Noteholders as
of the end of the Related Month and the denominator of which will be
the cumulative amount of all unreimbursed Segregated Repurchase Losses
for the Noteholders of all Segregated Series of Notes and the Team
Interestholder (including all unreimbursed Segregated Repurchase
Losses in respect of available subordinated amounts, if any, for all
Segregated Series) as of the end of such Related Month;

(d) when used with respect to Segregated
Repurchase Losses, the percentage equivalent of a fraction, the
numerator of which shall be the product of (A) the Class B Invested
Amount as of the end of the Related Month and (B) the Series 1996-1
Segregated Repurchase Percentage as of the

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end of the Related Month and the denominator of which shall be the
greater of (I) the Aggregate Segregated Repurchase Asset Amount as of
the end of the Related Month or, until the end of the initial Related
Month, as of the Series 1996-1 Issuance Date and (II) as of the same
date as in clause (I), the sum of the numerators used to determine (i)
invested percentages for allocations with respect to Segregated
Repurchase Losses (for all Segregated Series of Notes and all classes
of such Series of Notes) and (ii) available subordinated amount
percentages for allocations with respect to Segregated Repurchase
Losses (for all Segregated Series of Notes that provide for credit
enhancement in the form of overcollateralization); and

(e) when used with respect to Segregated
Repurchase Interest Collections, the percentage equivalent of a
fraction the numerator of which shall be the Accrued Amounts with
respect to the Class B Notes on such date of determination, and the
denominator of which shall be the aggregate Accrued Amounts with
respect to all Segregated Series of Notes on such date of
determination.

"Collateral" means the Series 1996-1 Collateral.

"Collections" means Non-Repurchase Collections and Segregated
Repurchase Collections.

"Consent" has the meaning set forth in Section 5.1(c) of this
Supplement.

"Consent Period Expiration Date" has the meaning set forth in
Section 5.1(c) of this Supplement.

"Designated Amounts" has the meaning set forth in Section
5.1(b) of this Supplement.

"Determination Date" means the second Business Day prior to
each Distribution Date.

"Disposition Proceeds" means the net proceeds (other than the
portion of the Repurchase Price payable by the related Manufacturer or
Guaranteed Payments) from the sale or disposition of a Vehicle to any Person,
whether at auction or otherwise; provided, however, that Disposition Proceeds
shall not include Termination Payments.

"Eligible Manufacturer" means Ford, Chrysler, General Motors,
SAAB and Toyota and any other Manufacturer that (a) has an Eligible Repurchase
Program, (b) has been approved by the Rating Agencies or has been reviewed by
the Rating Agencies and the Rating Agencies have indicated that the inclusion
of such

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Manufacturer as an Eligible Manufacturer will not adversely affect the current
rating of any Series of Notes, (c) if such Manufacturer has an unsecured
long-term debt rating of less than "A" from Standard & Poor's or "A" from DCR,
has been approved by the Required Beneficiaries, and (d) has been approved by
each Enhancement Provider; 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; and,
provided, further, that Vehicles manufactured by Mazda may not comprise more
than 15% in the aggregate of the Series 1996-1 Aggregate Asset Amount.

"Eligible Non-Repurchase Manufacturer" means each Eligible
Manufacturer, Mazda and Nissan.

"Eligible Non-Repurchase Vehicle" means any automobile, van or
truck, (a) which is owned by TFFC, (b) the Manufacturer of which is an Eligible
Non-Repurchase Manufacturer, and (c) with respect to which either (i) the
Trustee is noted as the first lienholder on the Certificate of Title therefor,
(ii) the Certificate of Title has been submitted to the appropriate state
authorities for such notation or (iii) for which the Lessee has commenced the
process to note the lien of the Trustee on the Certificate of Title within the
time period specified in the related Lease; provided, however, if the actions
provided in clauses (i) or (ii) are not sufficient in any state to cause the
Trustee's Lien upon such Vehicles to be a perfected first Lien, then in order
for a Vehicle titled in such state to be an "Eligible Non-Repurchase Vehicle",
such action as is required to cause the Trustee's Lien to be a perfected first
Lien shall have been taken by the Servicer.

"Eligible Repurchase Program" means, at any time, a Repurchase
Program offered by an Eligible Manufacturer (a) pursuant to which the
Repurchase Price (or the price guaranteed to be received at an auction
conducted by or under the control of the Eligible Manufacturer) is at least
equal to the Capitalized Cost of each Vehicle, minus all Depreciation Charges
accrued with respect to such Vehicle prior to the date that the Vehicle is
submitted for repurchase, minus Excess Mileage Charges, minus Excess Damage
Charges and minus any other charges specified in such Repurchase Program, (b)
that cannot be amended or terminated with respect to any Vehicle after the
purchase of that Vehicle, and (c) the collateral assignment of the benefits of
which to the Trustee has been acknowledged in writing by the related
Manufacturer pursuant to an Assignment Agreement, and TFFC (and the Trustee on
behalf of TFFC) has been provided with an opinion of counsel reasonably
satisfactory to the Trustee that TFFC (and the Trustee on behalf of TFFC) can
enforce the applicable Manufacturer's obligations thereunder; provided,
however, that with respect to a Repurchase Program for any model year beginning

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<PAGE> 18

with 1996 and thereafter, if the Series 1996-1 Notes are then being rated by
Standard & Poor's or DCR, TFFC shall have received (i) confirmation by Standard
& Poor's or DCR, as the case may be, that the acquisition of Vehicles pursuant
to such Repurchase Program will not result in the reduction or withdrawal of
any rating issued by Standard & Poor's or DCR in respect of such Series of
Notes, and (ii) if there is a major change to a Repurchase Program during a
model year, a written confirmation from each Rating Agency that the acquisition
of Vehicles pursuant to such Repurchase program will not result in a reduction
or withdrawal of any rating issued by each Rating Agency in respect of such
Series of Notes.

"Eligible Repurchase Vehicle" means any automobile or light
truck, (a) which at the time of purchase or financing by TFFC is eligible under
an Eligible Repurchase Program, (b) which is owned by TFFC, and (c) with
respect to which either (i) the Trustee is noted as the first lienholder on the
Certificate of Title therefor or (ii) the Certificate of Title has been
submitted to the appropriate state authorities for such notation; provided,
however, if the actions provided in clauses (i) or (ii) are not sufficient in
any state to cause the Trustee's Lien upon such Vehicles to be a perfected
first Lien, then in order for a Vehicle titled in such state to be an "Eligible
Repurchase Vehicle", such action as is required to cause the Trustee's Lien to
be a perfected first Lien shall have been taken by the Servicer.

"Enhancement Percentage" means (for purposes of determining
the Series 1996-1 Required Asset Amount) on any day, the percentage equal to
the sum of (i) 20% times the Series 1996-1 Non-Repurchase Percentage on such
day plus (ii) 14% times the Series 1996-1 Segregated Repurchase Percentage on
such day.

"Excess Team Collections" has the meaning specified in Section
4.3(f) of this Supplement.

"Liquidity Amount" means, with respect to any date of
determination, an amount equal to the product of 2.0% times the Aggregate
Principal Balance of the Series 1996-1 Notes outstanding on the Series 1996-1
Issuance Date.

"Losses" means, on any date of determination, the sum of all
Non-Repurchase Losses and Segregated Repurchase Losses.

"Maximum Manufacturer Percentage" means, with respect to any
Eligible Manufacturer, the percentage amount set forth in Schedule 1 to this
Supplement (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

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<PAGE> 19

Non-Repurchase Vehicles and Repurchase Vehicles, as applicable, which
percentage amount represents the maximum percentage of Eligible Vehicles which
are permitted under the Series 1996-1 Lease to be Non-Repurchase Vehicles or
Repurchase Vehicles, as the case may be, manufactured by such Manufacturer.

"Maximum Non-Repurchase Percentage" means, with respect to
Non-Repurchase Vehicles, fifty percent (50%) or such other percentage amount
agreed upon by the Lessor and the Lessees, subject to Rating Agency
confirmation and the consent provisions of Section 5.1 of this Supplement,
which percentage amount represents the maximum percentage of the Series 1996-1
Aggregate Asset Amount which is permitted under the Series 1996-1 Lease to be
invested in Non-Repurchase Vehicles.

"Mazda" means Mazda Motor Corporation.

"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 47 Non-Repurchase Vehicles were
sold at auction and (b) at least one-twelfth of the aggregate Net Book Value of
the Non- Repurchase Vehicles as of the last day of such calendar month or
consecutive calendar months were sold at auction; provided, however, 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 and Termination Payments
of all Non- Repurchase Vehicles sold at auction or otherwise 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.

"Monthly Total Principal Allocation" means the sum of all
Segregated Series 1996-1 Principal Allocations with respect to a Related Month.

"Nissan" means Nissan Motor Co.

"Permanent Global Class A Note" has the meaning specified in
Section 7.1(b) of this Supplement.

"Permanent Global Class B Note" has the meaning specified in
Section 7.2(b) of this Supplement.

"Permitted Investments" means negotiable instruments or
securities maturing on or before the related Distribution Date represented by
instruments in bearer or registered or in book-entry form which evidence (i)
obligations the full and timely

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<PAGE> 20

payment of which is to be made by or is fully guaranteed by the united States
of America; (ii) demand deposits, 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 time of the investment
or 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 DCR of at least D-1, in the case of certificates of deposit or
short-term deposits, or a rating from Standard & Poor's not lower than AA- or
from DCR not lower than AA, in the case of long-term unsecured debt
obligations; (iii) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from Standard & Poor's of at
least A-1 and from DCR of at least D-1; (iv) demand deposits or time deposits
which are fully insured by the Federal Deposit Insurance Corporation; (v)
bankers' acceptances issued by any depositary institution or trust company
described in clause (ii) above; (vi) investments in money market funds rated AA
or AAm by Standard & Poor's or otherwise approved in writing by Standard &
Poor's and a comparable rating from DCR or otherwise approved in writing by
DCR; (vii) Eurodollar time deposits having a credit rating from Standard &
Poor's of A-1 and from DCR of at least D-1; (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 at least D-1 by DCR or 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 such investment in
such instruments or securities will not adversely affect any ratings with
respect to any Series of Notes.

"Rating Agencies" means, with respect to the Series 1996-1
Notes, Standard & Poor's and DCR.

"Recoveries" means, on any date of determination, the sum of
all Non-Repurchase Recoveries and Segregated Repurchase Recoveries.

"Related Documents" means the collective reference to the
documents referred to in clause (i) of the definition of

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<PAGE> 21

Related Documents in Schedule 1 to the Indenture and the Series 1996-1 Lease.

"Requisite Class A Noteholders" means Class A Noteholders
holding 25% or more of the Class A Invested Amount.

"Restricted Global Class A Note" has the meaning specified in
Section 7.1(a) of this Supplement.

"Restricted Global Class B Note" has the meaning specified in
Section 7.2(a) of this Supplement.

"SAAB" means SAAB Cars USA, Inc.

"Series 1996-1 Accrued Interest Account" has the meaning
specified in Section 4.1(c) of this Supplement.

"Series 1996-1 Aggregate Asset Amount" means, with respect to
the Series 1996-1 Notes, for any date of determination, the sum, rounded to the
nearest $100,000, of the Series 1996-1 Aggregate Non-Repurchase Asset Amount
and the Series 1996-1 Aggregate Segregated Repurchase Asset Amount.

"Series 1996-1 Aggregate Non-Repurchase Asset Amount" means,
for any date of determination, the sum, rounded to the nearest $100,000, of (i)
the lesser of (a) the Net Book Value of all Series 1996-1 Non-Repurchase
Vehicles as of such date owned by the Issuer and (b) the Series 1996-1
Non-Repurchase Fleet Market Value, plus (ii) all amounts receivable as of such
date with respect to any Series 1996-1 Non-Repurchase Vehicles which have been
sold or deemed to be sold under the Related Documents plus (iii) with respect
to any Series 1996-1 Non-Repurchase Vehicles that have been sold, any accrued
and unpaid payments of Base Rent and Additional Base Rent under the Series
1996-1 Vehicle Lease with respect to such Series 1996-1 Non-Repurchase Vehicles
(net of amounts set forth in clause (ii) above), plus (iv) cash and Permitted
Investments allocable to the Series 1996-1 Notes on deposit in the
Non-Repurchase Collection Account.

"Series 1996-1 Aggregate Segregated Repurchase Asset Amount"
means, for any date of determination, the sum, rounded to the nearest $100,000,
of (i) the Net Book Value of all Series 1996-1 Segregated Repurchase Vehicles
as of such date owned by the Issuer and not turned in to the Manufacturer
thereof pursuant to its Repurchase Program or not otherwise sold or deemed to
be sold under the Related Documents, plus (ii) all amounts (with certain
limited exceptions) receivable as of such date from Manufacturers under
Repurchase Programs with respect to Series 1996-1 Segregated Repurchase
Vehicles turned in to such Manufacturers pursuant to any such Repurchase
Program or delivered to an authorized auction, pursuant to any Repurchase

- 18 -
<PAGE> 22

Program, plus (iii) all amounts receivable with respect to the disposition of
Series 1996-1 Segregated Repurchase Vehicles as of such date from any other
Person with respect to Series 1996-1 Segregated Repurchase Vehicles including,
without limitation, from the sale of any ineligible Repurchase Vehicles, plus
(iv) with regard to Series 1996-1 Segregated Repurchase Vehicles that have been
turned in to the Manufacturer or otherwise sold, any accrued and unpaid Base
Rent under the Series 1996-1 Vehicle Lease with respect to such Series 1996-1
Segregated Repurchase Vehicles (net of amounts set forth in clauses (ii) and
(iii) above), plus (v) cash and Permitted Investments allocable to the Series
1996-1 Notes on deposit in the Segregated Repurchase Collection Account.

"Series 1996-1 Available Subordinated Amount" means for any
date of determination, the excess of (a) the sum of (i) the Series 1996-1
Available Subordinated Amount for the preceding Determination Date (or, in the
case of the initial Determination Date, as of the Series 1996-1 Issuance Date),
(ii) the Series 1996-1 Available Subordinated Amount Incremental Recoveries for
the Related Month and (iii) any other additional amounts contributed by TFFC to
the Series 1996-1 Excess Funding Account or otherwise for allocation to the
Series 1996-1 Available Subordinated Amount since the preceding Determination
Date (or, in the case of the first Determination Date, since the Series 1996-1
Issuance Date) over (b) the sum of (i) the Series 1996-1 Available Subordinated
Amount Incremental Losses for the Related Month and (ii) any amounts withdrawn
from the Series 1996-1 Excess Funding Account and allocated to the Team
Distribution Account; provided, however, that the Series 1996-1 Available
Subordinated Amount for the period from the Series 1996-1 Issuance Date to the
first Determination Date shall be $19,702,959.65.

"Series 1996-1 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 1996-1
Available Subordinated Amount.

"Series 1996-1 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
1996-1 Available Subordinated Amount.

"Series 1996-1 Available Subordinated Amount Maximum Increase"
means $1,760,000; provided, however, if (i) a Series 1996-1 Credit Support
Deficiency arises out of any Losses and (ii) the Rating Agencies shall have
notified TFFC, Team and the Trustee in writing that after the cure of such
Series 1996-1

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<PAGE> 23

Credit Support Deficiency is provided for, the Class A Notes and the Class B
Notes will each receive the same rating from the Rating Agency as they received
prior to the occurrence of such Series 1996-1 Credit Support Deficiency, then
the Series 1996-1 Available Subordinated Amount Maximum Increase shall not be
limited in amount.

"Series 1996-1 Collateral" is defined in Section 3.1(a) of
this Supplement.

"Series 1996-1 Collection Account" is defined in Section
4.1(b) of this Supplement.

"Series 1996-1 Controlled Amortization Period" means the Class
A Controlled Amortization Period or the Class B Controlled Amortization Period,
or both, as the context requires.

"Series 1996-1 Credit Support Amount" means, for any date of
determination, the Series 1996-1 Available Subordinated Amount.

"Series 1996-1 Credit Support Deficiency" means, with respect
to any date of determination, the amount, if any, by which the Series 1996-1
Minimum Credit Support Amount exceeds the Series 1996-1 Credit Support Amount.

"Series 1996-1 Deposit Date" is defined in Section 4.2 of this
Supplement.

"Series 1996-1 Excess Funding Account" is defined in Section
4.1(c) of this Supplement.

"Series 1996-1 Interest Allocation" has the meaning specified
in Section 4.2(a)(i) of this Supplement.

"Series 1996-1 Interest Period" means a period commencing on a
Distribution Date and ending on the day preceding the next succeeding
Distribution Date; provided, however, that the initial Series 1996-1 Interest
Period shall commence on the Series 1996-1 Issuance Date and end on February
16, 1997 and the second Series 1996-1 Interest Period shall commence on
February 17, 1997 and end on the day preceding the next Distribution Date.

"Series 1996-1 Invested Amount" means, on any date of
determination, the sum of the Class A Invested Amount and the Class B Invested
Amount.

"Series 1996-1 Issuance Date" means December 19, 1996.

"Series 1996-1 Lease" means the Non-Repurchase Vehicle Lease,
dated as of the date hereof, executed in connection with

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<PAGE> 24

the issuance of the Series 1996-1 Notes, among TFFC, as lessor, certain
subsidiaries and affiliates of Team and certain non-affiliates of Team, as
lessees, and Team, as guarantor, as amended, supplemented or otherwise modified
from time to time.

"Series 1996-1 Lease Payment Deficit" means, on any
Distribution Date, an amount equal to the excess, if any, of (a) the aggregate
amount of Principal Collections and Interest Collections that would have been
allocated with respect to the Related Month in respect of the Series 1996-1
Notes if all payments required to be made under the Leases with respect to the
Related Month were paid in full, over (b) the aggregate amount of Principal
Collections and Interest Collections with respect to the Related Month which
were actually allocated in respect of the Series 1996-1 Notes.

"Series 1996-1 Limited Liquidation Event of Default" means, so
long as such event or condition continues, any event or condition of the type
specified in Section 6(a) of this Supplement that continues for thirty (30)
days (without double counting the one (1) Business Day cure period provided for
in said Section 5(a); provided, however, that such event or condition shall not
constitute a Series 1996-1 Limited Liquidation Event of Default if (i) within
such thirty (30) day period, TFFC shall have contributed a portion of the Team
Interest to the Series 1996-1 Available Subordinated Amount sufficient to cure
the Series 1996-1 Credit Support Deficiency and (ii) the Rating Agency shall
have notified TFFC, Team and the Trustee in writing that after such cure of
such Series 1996-1 Credit Support Deficiency is provided for, the Class A Notes
and the Class B Notes will each receive the same rating from the Rating Agency
as they received prior to the occurrence of such Series 1996-1 Credit Support
Deficiency.

"Series 1996-1 Minimum Credit Support Amount" means, (a) the
product of (i) the Series 1996-1 Minimum Non-Repurchase Credit Support
Percentage times (ii) a dollar amount equal to (x) the Series 1996-1 Invested
Amount as of such date, minus the product of (A) the aggregate amount of cash
and Permitted Investments in the Collection Account allocable to Series 1996-1
Non-Repurchase Vehicles as of such date, times (B) a fraction, the numerator of
which shall be the product of (1) the sum of the Series 1996-1 Invested Amount
as of such date and the Series 1996-1 Available Subordinated Amount as of such
date, and (2) the Series 1996-1 Non-Repurchase Percentage, and the denominator
of which shall be the greater of (I) the Aggregate Non-Repurchase Asset Amount
as of such date and (II) the sum of the numerators used to determine the
minimum credit support amounts relating to Non-Repurchase Vehicles for all
Segregated Series of Notes as of such date, divided by (y) an amount equal to
100% minus the Series 1996-1 Minimum Non-Repurchase Credit Support Percentage
as

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<PAGE> 25

of such date, times (iii) the Series 1996-1 Non-Repurchase Percentage, plus (b)
the product of (i) the Series 1996-1 Minimum Segregated Repurchase Credit
Support Percentage, times (ii) a dollar amount equal to (x) the Series 1996-1
Invested Amount minus the product of (A) the aggregate amount of cash and
Permitted Investments in the Collection Account allocable to Series 1996-1
Segregated Repurchase Vehicles as of such date, times (B) a fraction, the
numerator of which shall be the product of (1) the sum of the Series 1996-1
Invested Amount as of such date and the Series 1996-1 Available Subordinated
Amount as of such date, and (2) the Series 1996-1 Segregated Repurchase
Percentage, and the denominator of which shall be the greater of (I) the
Aggregate Segregated Repurchase Asset Amount as of such date and (II) the sum
of the numerators used to determine the minimum credit support amounts relating
to Segregated Repurchase Vehicles for all Series of Notes as of such date,
divided by (y) an amount equal to 100% minus the Series 1996-1 Minimum
Segregated Repurchase Credit Support Percentage as of such date, times (iii)
the Series 1996-1 Segregated Repurchase Percentage.

"Series 1996-1 Minimum Non-Repurchase Credit Support
Percentage" means, with respect to any date of determination, the greatest of
(a) an amount equal to (i) 20% 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 Series
1996-1 Invested Amount as of such date plus (y) the Series 1996-1 Available
Subordinated Amount as of such date, (b) an amount equal to (i) 100% minus (ii)
an amount equal to (x) to the lowest Measurement Month Average of any full
Measurement Month within the preceding twelve calendar months minus (y) 20%
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 Series 1996-1 Invested Amount as of such date
plus (y) the Series 1996- 1 Available Subordinated Amount as of such date, and
(c) 14.5%.

"Series 1996-1 Minimum Segregated Repurchase Credit Support
Percentage" means, with respect to any date of determination, the greater of
(a) an amount equal to (i) 14% 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 Series
1996-1 Invested Amount as of such date plus (y) the Series 1996-1 Available
Subordinated Amount as of such date, and (b) 9.5%.

"Series 1996-1 Non-Repurchase Available Subordinated Amount
Percentage" means, on any date of determination:

(a) when used with respect to Non-Repurchase
Principal Collections during the Series 1996- 1 Revolving

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<PAGE> 26

Period, the percentage equivalent of a fraction the numerator of which
shall be equal to the product of (A) the Series 1996-1 Available
Subordinated Amount as of the end of the Related Month or, until the
end of the initial Related Month, on the Series 1996-1 Issuance Date
and (B) the Series 1996-1 Non-Repurchase Percentage for such day, and
the denominator of which shall be the greater of (I) the Aggregate
Non-Repurchase Asset Amount as of the end of the Related Month or,
until the end of the initial Related Month, as of the Series 1996-1
Issuance Date, and (II) as of the same date as in clause (I), the sum
of the numerators used to determine (i) invested percentages for
allocations with respect to Non-Repurchase Principal Collections (for
all Segregated Series of Notes and all classes of such Series of
Notes) and (ii) available subordinated amount percentages for
allocations with respect to Non-Repurchase Principal Collections (for
all Segregated Series of Notes that provide for credit enhancement in
the form of overcollateralization);

(b) when used with respect to Non-Repurchase
Principal Collections during the Series 1996-1 Controlled Amortization
period and the Series 1996-1 Rapid Amortization Period, the percentage
equivalent of a fraction the numerator of which shall be the product
of (A) the Series 1996-1 Available Subordinated Amount as of the end
of the Series 1996-1 Revolving Period, and (B) the Series 1996-1
Non-Repurchase Percentage for such day, and the denominator of which
shall be the greater of (I) the Aggregate Non-Repurchase Asset Amount
as of the end of the Related Month or, until the end of the initial
Related Month, on the Series 1996-1 Issuance Date and (II) as of the
same date as in clause (I), the sum of the numerators used to
determine (i) invested percentages for allocations with respect to
Non-Repurchase Principal Collections (for all Segregated Series of
Notes and all classes of such Series of Notes) and (ii) available
subordinated amount percentages for allocations with respect to
Non-Repurchase Principal Collections (for all Segregated 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 Non-Repurchase Losses
allocated to the Series 1996-1 Available Subordinated Amount as of the
end of the Related Month and the denominator of which shall be the
cumulative amount of all unreimbursed Non-Repurchase Losses for the
Noteholders of all Segregated Series of Notes and the Team
Interestholder (including all unreimbursed Non-Repurchase

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<PAGE> 27

Losses in respect of available subordinated amounts, if any, for all
Segregated Series) as of the end of the Related Month; and

(d) when used with respect to Non-Repurchase
Losses, the percentage equivalent of a fraction, the numerator of
which shall be the product of (A) the Series 1996-1 Available
Subordinated Amount as of the end of the Related Month and (B) the
Series 1996-1 Non-Repurchase Percentage for such day and the
denominator of which shall be the greater of (I) the Aggregate
Non-Repurchase Asset Amount as of the end of the Related Month or,
until the end of the initial Related Month, on the Series 1996-1
Issuance Date and (II) as of the same date as in clause (I), the sum
of the numerators used to determine (i) invested percentages for
allocations with respect to Non-Repurchase Losses (for all Segregated
Series of Notes and all classes of such Series of Notes) and (ii)
available subordinated amount percentages for allocations with respect
to Non- Repurchase Losses (for all Segregated Series of Notes that
provide for credit enhancement in the form of overcollateralization).

"Series 1996-1 Non-Repurchase Fleet Market Value" means, with
respect to all Series 1996-1 Non- Repurchase Vehicles, as of any date of
determination, the sum of the respective Fair Market Values of each Series
1996-1 Non-Repurchase Vehicle.

"Series 1996-1 Non-Repurchase Percentage" means, on any date
of determination, the percentage equivalent of a fraction, the numerator of
which will be the aggregate Non-Repurchase Vehicle Value of all Series 1996-1
Non-Repurchase Vehicles as of such date and the denominator of which will be
the sum of the aggregate Net Book Value of all Series 1996-1 Segregated
Repurchase Vehicles and the aggregate Non-Repurchase Vehicle Values of all
Series 1996-1 Non-Repurchase Vehicles as of such date.

"Series 1996-1 Non-Repurchase Principal Allocation" has the
meaning specified in Section 4.2(a)(iii) of this Supplement.

"Series 1996-1 Non-Repurchase Vehicles" means the
Non-Repurchase Vehicles leased under the Series 1996- 1 Lease.

"Series 1996-1 Noteholders" means the Class A Noteholders and
the Class B Noteholders.

"Series 1996-1 Principal Allocation" has the meaning specified
in Section 4.2(a)(s)(iii) of this Supplement.

"Series 1996-1 Rapid Amortization Period" means the period
beginning at the close of business on the Business Day

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<PAGE> 28

immediately preceding the day on which an Amortization Event is deemed to have
occurred with respect to the Series 1996- 1 Notes and ending upon the earliest
to occur of (i) the date on which the Series 1996-1 Notes are fully paid, (ii)
the Series 1996-1 Termination Date and (iii) the termination of the Indenture.

"Series 1996-1 Required Asset Amount" means, at any time, the
quotient of (a) the Class A Invested Amount at such time divided by (b) an
amount equal to one hundred percent minus the Enhancement Percentage at such
time.

"Series 1996-1 Revolving Period" means the period from and
including the Series 1996-1 Issuance Date to the earlier of (i) the
commencement of the Series 1996-1 Controlled Amortization Period and (ii) the
commencement of the Series 1996-1 Rapid Amortization Period.

"Series 1996-1 Segregated Repurchase Available Subordinated
Amount Percentage" means on any date of determination:

(a) when used with respect to Segregated Repurchase
Principal Collections during the Series 1996-1 Revolving Period, the
percentage equivalent of a fraction the numerator of which shall be
equal to the product of (A) the Series 1996-1 Available Subordinated
Amount as of the end of the Related Month or, until the end of the
initial Related Month, on the Series 1996-1 Issuance Date and (B) the
Series 1996-1 Segregated Repurchase Percentage for such day, and the
denominator of which shall be the greater of (I) the Aggregate
Segregated Repurchase Asset Amount as of the end of the Related Month
or, until the end of the initial Related Month, as of the Series
1996-1 Issuance Date, and (II) as of the same date as in the clause
(I), the sum of the numerators used to determine (i) invested
percentages for allocations with respect to Segregated Repurchase
Principal Collections (for all Segregated Series of Notes and all
classes of such Series of Notes) and (ii) available subordinated
amount percentages for allocations with respect to Segregated
Repurchase Principal Collections (for all Segregated Series of Notes
that provide for credit enhancement in the form of
overcollateralization);

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<PAGE> 29

denominator of which shall be the greater of (I) the Aggregate
Segregated Repurchase Asset Amount as of the end of the Related Month
and (II) as of the same date as in clause (I), the sum of the
numerators used to determine (i) invested percentages for allocations
with respect to Segregated Repurchase Principal Collections (for all
Segregated Series of Notes and all classes of such Series of Notes)
and (ii) available subordinated amount percentages for allocations
with respect to Segregated Repurchase Principal Collections (for all
Segregated Series of Notes that provide for credit enhancement in the
form of overcollateralization);

(c) when used with respect to Segregated Repurchase
Recoveries, the percentage equivalent of a fraction the numerator of
which shall be the cumulative amount of all unreimbursed Segregated
Repurchase Losses allocated to the Series 1996-1 Available
Subordinated Amount as of the end of the Related Month and the
denominator of which shall be the cumulative amount of all
unreimbursed Segregated Repurchase Losses for the Noteholders of all
Segregated Series of Notes and the Team Interestholder (including all
unreimbursed Segregated Repurchase Losses in respect of available
subordinated amounts, if any, for all Segregated Series) as of the end
of the Related Month; and

(d) when used with respect to Segregated Repurchase
Losses, the percentage equivalent of a fraction, the numerator of
which shall be the product of (A) the Series 1996-1 Available
Subordinated Amount as of the end of the Related Month and (B) the
Series 1996-1 Segregated Repurchase Percentage for such day, and the
denominator of which shall be the greater of (I) the Aggregate
Segregated Repurchase Asset Amount as of the end of the Related Month
or, until the end of the initial Related Month, on the Series 1996-1
Issuance Date and (II) as of the same date as in clause (I), the sum
of the numerators used to determine (i) invested percentages for
allocations with respect to Segregated Repurchase Losses (for all
Segregated Series of Notes and all classes of such Series of Notes)
and (ii) available subordinated amount percentages for allocations
with respect to Segregated Repurchase Losses (for all Segregated
Series of Notes that provide for credit enhancement in the form of
overcollateralization).

"Series 1996-1 Segregated Repurchase Percentage" means, on any
date of determination, the percentage equivalent of a fraction, the numerator
of which will be the aggregate Net Book Value of all Series 1996-1 Segregated
Repurchase Vehicles as of such date and the denominator of which will be the
sum of the aggregate Net Book Value of all Series 1996-1 Segregated

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<PAGE> 30

Repurchase Vehicles and the aggregate Non-Repurchase Vehicle Value of all
Series 1996-1 Non-Repurchase Vehicles as of such date.

"Series 1996-1 Segregated Repurchase Vehicles" means the
Segregated Repurchase Vehicles leased under the Series 1996-1 Lease.

"Series 1996-1 Termination Date" means the December 2002
Distribution Date.

"Series 1996-1 TFFC Agreements" has the meaning specified in
Section 3.1(a)(i) of this Supplement.

"Series 1996-1 Vehicles" means Series 1996-1 Segregated
Repurchase Vehicles and Series 1996-1 Non- Repurchase Vehicles.

"Team Percentage" means on any date of determination, (a) when
used with respect to Non-Repurchase Principal Collections (including
Recoveries), Non-Repurchase Recoveries and Non-Repurchase Losses, an amount
equal to one hundred percent minus the sum of (i) the invested percentages on
such date (for all outstanding Segregated Series of Notes and all Classes of
such Series of Notes) and (ii) the available subordinated amount percentages on
such date (for all Segregated 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 Non-Repurchase
Principal Collections, Non-Repurchase Recoveries or Non-Repurchase Losses, as
applicable; and (b) when used with respect to Segregated Repurchase Principal
Collections (including Segregated Repurchase Recoveries), Segregated Repurchase
Recoveries and Segregated Repurchase Losses, an amount equal to one hundred
percent minus the sum of (i) the invested percentages on such date (for all
outstanding Segregated Series of Notes and all classes of such Series of Notes)
and (ii) the available subordinated amount percentages on such date (for all
Segregated 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 Segregated Repurchase Principal Collections, Segregated
Repurchase Recoveries or Segregated Repurchase Losses, as applicable.

"Temporary Global Class A Note" has the meaning specified in
Section 7.1(b) of this Supplement.

"Temporary Global Class B Note" has the meaning specified in
Section 7.2(b) of this Supplement.

"TFFC Agreements" means the collective reference to the
documents referred to in clause (i) of the definition of TFFC

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<PAGE> 31

Agreements in Schedule 1 to the Indenture and the Series 1996-1 TFFC
Agreements.

"Toyota" means Toyota Motor Sales, U.S.A., Inc.

"Vehicle" means a passenger automobile, van or truck purchased
by TFFC and leased to a Lessee pursuant to the Series 1996-1 Lease.

"Waiver Deficiency" means, as of the applicable Consent Period
Expiration Date, an amount, if greater than zero, calculated in accordance with
the following formula:

Waiver Deficiency = (CA x B) + (CA x MSA) - (CB x A) - (ASA x A)
--------------------------------------------
B + MSA

where "A" refers to the Class A Invested Amount, "B" refers to the Class B
Invested Amount, "MSA" refers to the Series 1996-1 Minimum Credit Support
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 1996-1 Available
Subordinated Amount, in each case as of such Consent Period Expiration Date.

ARTICLE 3

SECURITY; REPORTS; COVENANT

Section 3.1 Grant of Security Interest.

(a) To secure the Series 1996-1 Notes, TFFC hereby
pledges, assigns, conveys, delivers, transfers and sets over to the Trustee,
for the benefit of the Series 1996-1 Noteholders and the holder of the Team
Interest (the Series 1996-1 Noteholders and the holder of the Team Interest
being referred to in this Section 3.1 as the "Secured Parties"), and hereby
grants to the Trustee, for the benefit of the Secured Parties, a security
interest in all of TFFC's right, title and interest in and to all of the
following assets, property and interests of TFFC (other than as specified
below) whether now owned or hereafter acquired or created (all of the
foregoing, other than with respect to clause (v) below, being referred to as
the "Series 1996-1 Collateral"):

(i) the rights of TFFC under the Series 1996-1
Lease (including rights against any guarantor of obligations of the
Lessees thereunder) and any other agreements to which TFFC is a party
other than the Repurchase Programs

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<PAGE> 32

(collectively, the "Series 1996-1 TFFC Agreements"), including,
without limitation, all monies due and to become due to TFFC from Team
and the Lessees under or in connection with the TFFC Agreements,
whether payable as rent, guaranty payments, fees, expenses, costs,
indemnities, insurance recoveries, damages for the breach of any of
the Series 1996-1 TFFC Agreements or otherwise, and all rights,
remedies, powers, privileges and claims of TFFC against any other
party under or with respect to the Series 1996-1 TFFC Agreements
(whether arising pursuant to the terms of such Series 1996-1 TFFC
Agreements or otherwise available to TFFC at law or in equity),
including the right to enforce any of the Series 1996-1 TFFC
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 Series 1996-1 TFFC Agreements or
the obligations of any party thereunder;

(ii) (a) all Series 1996-1 Segregated Repurchase
Vehicles owned by TFFC as of the Series 1996-1 Issuance Date and all
Series 1996-1 Segregated Repurchase Vehicles acquired by TFFC during
the term of the Indenture, and all Certificates of Title with respect
to such Vehicles, (b) all Series 1996-1 Non- Repurchase Vehicles owned
by TFFC as of the Series 1996-1 Issuance Date and all Series 1996-1
Non-Repurchase Vehicles acquired by TFFC during the term of the
Indenture, and all Certificates of Title with respect to such
Vehicles, (c) all Liens and property from time to time purporting to
secure payment of any of the obligations or liabilities of the Lessees
or Team arising under or in connection with the Series 1996-1 Lease,
together with all financing statements filed in favor of, or assigned
to, TFFC describing any collateral securing such obligations or
liabilities, and (d) all guarantees, insurance and other agreements or
arrangements of whatever character from time to time supporting or
securing payment of such obligations and liabilities of the Lessees or
Team pursuant to the Series 1996-1 Lease;

(iii) all right, title and interest of TFFC in, to
and under any Repurchase Programs relating to, and all monies due and
to become due in respect of, the Series 1996-1 Segregated Repurchase
Vehicles purchased from the Manufacturers under or in connection with
the Repurchase Programs whether payable as Repurchase Vehicle
repurchase prices, fees, expenses, costs, indemnities, insurance
recoveries, damages for breach of the Repurchase Programs or
otherwise;

(iv) (a) the Collection Account, (b) all funds on
deposit therein allocable to Series 1996- 1 Vehicles from

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<PAGE> 33

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 allocable to Series 1996-1 Vehicles from time
to time, and (d) all Permitted Investments made at any time and from
time to time with the moneys allocable to Series 1996-1 Vehicles in
the Collection Account (including in each case income thereon); and

(v) all proceeds 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 Series 1996-1 Collateral shall not include the Team
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 Team 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 moneys in the Team Distribution Account (including the income thereon).

Section 3.2 Reports. Not later than the second Business Day
immediately preceding each Distribution Date, the Servicer shall furnish to the
Trustee a Monthly Servicer's Certificate (which shall include the Liquidity
Amount as of the last Business Day of the Related Month) and a Fleet Report
with respect to the Series 1996-1 Collateral.

Section 3.3 Auction Acquired Vehicles. TFFC shall not be
permitted to acquire any Auction Acquired Vehicle for which it does not have a
new Certificate of Title if after giving to such acquisition the aggregate Net
Book Value of all such Auction Acquired Vehicles exceeds 5% of the Series
1996-1 Aggregate Asset Amount.

ARTICLE 4

SERIES 1996-1 ALLOCATIONS

With respect to the Series 1996-1 Notes only, the following
shall apply:

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<PAGE> 34

Section 4.1 Establishment of Series 1996-1 Collection
Account, Series 1996-1 Excess Funding Account and Series 1996-1 Accrued
Interest Account.

(a) All Non-Repurchase Collections and Segregated
Repurchase Collections allocable to the Class A Notes, the Class B Notes and
the Series 1996-1 Available Subordinated Amount shall be allocated to the
Collection Account.

(b) The Trustee will establish and maintain a segregated
trust account for the benefit of the Series 1996-1 Noteholders (the " Series
1996-1 Collection Account"). This account shall be invested in accordance with
Section 5.1(d) and (f) of the Base Indenture.

(c) The Trustee will establish and maintain two
administrative sub-accounts within the Series 1996- 1 Collection Account. One
sub-account will be established for the benefit of the Series 1996-1
Noteholders and the Team Interestholder (such sub-account, the "Series 1996-1
Excess Funding Account"); the other sub-account established solely for
administrative purposes (such sub-account, the "Series 1996-1 Accrued Interest
Account").

Section 4.2 Allocations with respect to the Series 1996-1
Notes. The proceeds from the sale of the Series 1996-1 Notes, together with
approximately $19,702,959.65 deposited with TFFC by Team as additional
capitalization, will initially be deposited by the Trustee in the Series 1996-1
Collection Account and, concurrently with such initial deposit, allocated by
the Trustee to the Series 1996-1 Excess Funding Account. On each Business Day
on which amounts allocable to the Series 1996-1 Vehicles are deposited into the
Collection Account (each such date, a "Deposit Date"), the Servicer will direct
the Trustee to allocate all such amounts deposited into the Collection Account
in accordance with the provisions of this Section 4.2.

(a) Allocations of Collections During the Revolving
Period. During the Series 1996-1 Revolving Period, the Servicer will
direct the Trustee to allocate, prior to 1:00 p.m. (New York City
time) on each Deposit Date, all amounts deposited into the Collection
Account (including Recoveries, which will be treated as Principal
Collections) allocable to Series 1996-1 Vehicles as set forth below:

(s) with respect to all Collections (including
Recoveries, all of which Recoveries shall be treated as
Principal Collections).

(i) allocate to the Series 1996-1 Collection
Account an amount equal to (x) the sum of (A) the
Class A Non-Repurchase Percentage (as of such day)

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<PAGE> 35

of the aggregate amount of Non-Repurchase Interest
Collections on such day and (B) the Class B
Non-Repurchase Percentage (as of such day) of the
aggregate amount of Non-Repurchase Interest
Collections on such day, plus (y) the sum of (A)
the Class A Segregated Repurchase Percentage (as of
such day) of the aggregate amount of Segregated
Repurchase Interest Collections on such day and (B)
the Class B Segregated Repurchase Percentage (as of
such day) of the aggregate amount of Segregated
Repurchase Interest Collections on such day, which
amounts will be further allocated to the Series
1996-1 Accrued Interest Account (for any such day,
the sum of (x), (y) and (z), the "Series 1996-1
Interest Allocation");

(ii) allocate to the Series 1996-1 Excess
Funding Account, an amount equal to the sum of (A)
the Class A Non-Repurchase Percentage (as of such
day) of the aggregate amount of such Collections
which are Non-Repurchase Principal Collections on
such day plus, (B) the Class B Non-Repurchase
Percentage (as of such day) of the aggregate amount
of such Collections which are Non-Repurchase
Principal Collections on such day plus (C) the Series
1996-1 Non-Repurchase Available Subordinated Amount
Percentage (as of such day) of the aggregate amount
of such Collections which are Non-Repurchase
Principal Collections (for any such day, the sum of
(A), (B) and (C), the "Series 1996-1 Non-Repurchase
Principal Allocation");

(iii) allocate to the Series 1996-1 Excess
Funding Account, an amount equal to the sum of (A)
the Class A Segregated Repurchase Percentage (as of
such day) of the aggregate amount of such Collections
which are Segregated Repurchase Principal
Collections, (B) the Class B Segregated Repurchase
Percentage (as of such day) of the aggregate amount
of such Collections which are Segregated Repurchase
Principal Collections and (C) the Series 1996-1
Segregated Repurchase Available Subordinated Amount
Percentage (as of such day) of the aggregate amount
of Segregated Repurchase Principal Collections on
such day (for any such day, the sum of (A), (B) and
(C), the "Series 1996-1 Segregated Repurchase
Principal Allocation" and together with the Series
1996-1 Repurchase Principal Allocation and the Series
1996-1 Non-Repurchase Principal Allocation, the
"Series 1996-1 Principal Allocation"); and

- 32 -
<PAGE> 36

(iv) allocate to the Team Distribution
Account an amount equal to sum of (A) the Team
Percentage (as of such day) of the aggregate amount
of Non-Repurchase Principal Collections on such date
plus (B) the Team Percentage (as of such day) of the
aggregate amount of Segregated Repurchase Principal
Collections on such day minus (C) any amounts, other
than Servicing Fees, which have been withheld by the
Servicer pursuant to Section 5.2(c) of the Base
Indenture, to the extent that such amounts withheld
under Section 5.2(c) of the Base Indenture represent
all or part of the Team Interest Amount.

(t) with respect to Non-Repurchase Recoveries:

(i) allocate to the Class A Invested
Amount, the Class B Invested Amount and the Series
1996-1 Available Subordinated Amount an amount equal
to the sum of (i)(x) the Class A Non-Repurchase
Percentage (as of such day) of the aggregate amount
of Non-Repurchase Recoveries on such day and (y) the
Class B Non-Repurchase Percentage (as of such day) of
the aggregate amount of Non-Repurchase Recoveries
plus (ii) the Series 1996-1 Non-Repurchase Available
Subordinated Amount Percentage (as of such day) of
the aggregate amount of Non-Repurchase Recoveries on
such day, which Non-Repurchase Recoveries shall be
used first to reinstate the Class A Invested Amount
(to the extent that the Class A Invested Amount has
theretofore been reduced as a result of any
Non-Repurchase Losses allocated thereto as described
in clause (v) below and has not been subsequently
replenished); second to reinstate the Class B
Invested Amount (to the extent that the Class B
Invested Amount has theretofore been reduced as a
result of any Non-Repurchase Losses allocated thereto
as described in clause (v) below and has not been
subsequently replenished); and third to reinstate the
Series 1996-1 Available Subordinated Amount (to the
extent that the Series 1996-1 Available Subordinated
Amount has theretofore been reduced as a result of
any Non-Repurchase Losses allocated thereto as
described in clause (v) below and has not been
subsequently replenished); and

(ii) allocate to the Team Interest Amount
an amount equal to the Team Percentage (as of such
day) of the aggregate amount of Non-Repurchase
Recoveries on such day to reinstate the Team

- 33 -
<PAGE> 37

Interest Amount (to the extent that the Team Interest
Amount has theretofore been reduced as a result of
any Non-Repurchase Losses allocated thereto as
described in clause (v) below and has not been
subsequently replenished).

(u) with respect to Segregated Repurchase
Recoveries:

(i) allocate to the Class A Invested
Amount, the Class B Invested Amount and the Series
1996-1 Available Subordinated Amount an amount equal
to the sum of (i)(x) the Class A Segregated
Repurchase Percentage (as of such day) of the
aggregate amount of Segregated Repurchase Recoveries
on such day and (y) the Class B Segregated Repurchase
Percentage (as of such day) of the aggregate amount
of Segregated Repurchase Recoveries on such day plus
(ii) the Series 1996-1 Segregated Repurchase
Available Subordinated Amount Percentage (as of such
day) of the aggregate amount of Segregated Repurchase
Recoveries on such day, which Segregated Repurchase
Recoveries shall be used first to reinstate the Class
A Invested Amount (to the extent that the Class A
Invested Amount has theretofore been reduced as a
result of any Segregated Repurchase Losses allocated
thereto as described in clause (w) below and has not
been subsequently replenished); second to reinstate
the Class B Invested Amount (to the extent that the
Class B Invested Amount has theretofore been reduced
as a result of any Segregated Repurchase Losses
allocated thereto as described in clause (w) below
and has not been subsequently replenished); and third
to reinstate the Series 1996-1 Available Subordinated
Amount (to the extent that the Series 1996-1
Available Subordinated Amount has theretofore been
reduced as a result of any Segregated Repurchase
Losses allocated thereto as described in clause (w)
below and has not been subsequently replenished); and

(ii) allocate to the Team Interest Amount
an amount equal to the Team Percentage (as of such
day) of the aggregate amount of Segregated Repurchase
Recoveries on such day to reinstate the Team Interest
Amount (to the extent that the Team Interest Amount
has theretofore been reduced as a result of any
Segregated Repurchase Losses

- 34 -
<PAGE> 38

allocated thereto as described in clause (w) below
and has not been subsequently replenished).

(v) with respect to Non-Repurchase Losses (except
as otherwise contemplated in the definition of Non-Repurchase
Losses):

(i) allocate to the Class A Invested
Amount, the Class B Invested Amount, and the Series
1996-1 Available Subordinated Amount an amount equal
to the sum of (A) the Class A Non- Repurchase
Percentage (as of such day) of the aggregate amount
of Non-Repurchase Losses on such day plus (B) the
Class B Non-Repurchase Percentage (as of such day) of
the aggregate amount of Non-Repurchase Losses on such
day plus (C) the Series 1996-1 Non-Repurchase
Available Subordinated Amount Percentage (as of such
day) of the aggregate amount of Non-Repurchase Losses
on such day, which amounts shall reduce the Series
1996-1 Available Subordinated Amount and, if the
Series 1996-1 Available Subordinated Amount has been
reduced to zero, will reduce the Class B Invested
Amount and, if the Class B Invested Amount has been
reduced to zero, will reduce the Class A Invested
Amount; and

(ii) allocate to the Team Interest Amount an
amount equal to the Team Percentage (as of such day)
of the aggregate amount of Non-Repurchase Losses on
such day, which shall reduce the Team Interest
Amount.

(w) with respect to Segregated Repurchase Losses
(except as otherwise contemplated in the definition of
Segregated Repurchase Losses):

(i) allocate to the Class A Invested
Amount, the Class B Invested Amount and the Series
1996-1 Available Subordinated Amount an amount equal
to the sum of (A) the Class A Segregated Repurchase
Percentage (as of such day) of the aggregate amount
of Segregated Repurchase Losses on such day plus (B)
the Class B Segregated Repurchase Percentage (as of
such day) of the aggregate amount of Segregated
Repurchase Losses on such day plus (C) the Series
1996-1 Segregated Repurchase Available Subordinated
Amount Percentage (as of such day) of the aggregate
amount of Segregated Repurchase Losses on such day,
which amount shall reduce the Series 1996-1 Available
Subordinated

- 35 -
<PAGE> 39

Amount and, if the Series 1996-1 Available
Subordinated Amount has been reduced to zero, will
reduce the Class B Invested Amount and, if the Class
B Invested Amount has been reduced to zero, will
reduce the Class A Invested Amount; and

(ii) allocate to the Team Interest Amount
an amount equal to the Team Percentage (as of such
day) of the aggregate amount of Segregated Repurchase
Losses on such day, which shall reduce the Team
Interest Amount.

(b) Allocations During the Series 1996-1 Controlled
Amortization Period. During the Series 1996-1 Controlled Amortization
Period, the Servicer will direct the Trustee to allocate, prior to
1:00 pm. (New York City time) on each Deposit Date, all amounts
deposited in the Collection Account (including Recoveries, which will
be treated as Principal Collections) allocable to Series 1996-1
Vehicles as set forth below:

(s) with respect to all Collections (including
Recoveries, all of which Recoveries shall be treated as
Principal Collections):

(i) allocate to the Series 1996-1 Collection
Account an amount equal to the Series 1996-1 Interest
Allocation for such day as set forth in Section
4.2(a)(s)(i) above, which amount shall be further
allocated to the Series 1996-1 Accrued Interest
Account;

(ii) (A) during the Class A Controlled
Amortization Period, allocate to the Series 1996-1
Collection Account an amount equal to the Series
1996-1 Principal Allocation for such day, which
amount shall be used to make principal payments in
respect of the Class A Notes; provided, however, that
if the Monthly Total Principal Allocation exceeds the
Class A Controlled Distribution Amount, then the
amount of such excess shall be allocated to the
Series 1996-1 Excess Funding Account; and (B) during
the Class B Controlled Amortization Period, allocate
to the Series 1996-1 Collection Account an amount
equal to the Series 1996-1 Principal Allocation for
such day, which amount shall be used to make
principal payments in respect of the Class B Notes;
provided, however, that if the Monthly Total
Principal Allocation exceeds the Class B Controlled
Distribution

- 36 -
<PAGE> 40

Amount, then such excess will be allocated to the
Series 1996-1 Excess Funding Account; and

(iii) allocate to the Team Distribution
Account an amount determined as set forth in Section
4.2(a)(s)(iv) above for such day.

(t) with respect to Non-Repurchase Recoveries:

(ii) allocate to the Team Interest Amount
an amount equal to the Team Percentage (as of such
day) of the aggregate amount of Non-Repurchase
Recoveries on such day to reinstate the Team Interest
Amount (to the extent that the Team Interest Amount
has theretofore been reduced as a result of any
Non-Repurchase Losses allocated thereto as described
in clause (v) below and has not been subsequently
replenished).

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<PAGE> 41

(u) with respect to Segregated Repurchase
Recoveries:

(i) allocate to the Class A Invested
Amount, the Class B Invested Amount and the Series
1996-1 Available Subordinated Amount an amount equal
to the sum of (i)(x) the Class A Segregated
Repurchase Percentage (as of such day) of the
aggregate amount of Segregated Repurchase Recoveries
on such day and (y) the Class B Segregated Repurchase
Percentage (as of such day) of the aggregate amount
of Segregated Repurchase Recoveries on such day plus
(ii) the Series 1996-1 Segregated Repurchase
Available Subordinated Amount Percentage (as of such
day) of the aggregate amount of Segregated Repurchase
Recoveries on such day, which Segregated Repurchase
Recoveries shall be used first to reinstate the Class
A Invested Amount (to the extent that the Class A
Invested Amount has theretofore been reduced as a
result of any Segregated Repurchase Losses allocated
thereto as described in clause (w) below and has not
been subsequently replenished); second to reinstate
the Class B Invested Amount (to the extent that the
Class B Invested Amount has theretofore been reduced
as a result of any Segregated Repurchase Losses
allocated thereto as described in clause (w) below
and has not been subsequently replenished); and third
to reinstate the Series 1996-1 Available Subordinated
Amount (to the extent that the Series 1996-1
Available Subordinated Amount has theretofore been
reduced as a result of any Segregated Repurchase
Losses allocated thereto as described below and has
not been subsequently replenished); and

(v) with respect to Non-Repurchase Losses (except
as otherwise contemplated in the definition of Non-Repurchase
Losses):

- 38 -
<PAGE> 42

(i) allocate to the Class A Invested
Amount, the Class B Invested Amount and the Series
1996-1 Available Subordinated Amount an amount equal
to the sum of (A) the Class A Non- Repurchase
Percentage (as of such day) of the aggregate amount
of Non-Repurchase Losses on such day plus (B) the
Class B Non-Repurchase Percentage (as of such day) of
the aggregate amount of Non-Repurchase Losses on such
day plus (C) the Series 1996-1 Non-Repurchase
Available Subordinated Amount Percentage (as of such
day) of the aggregate amount of Non-Repurchase Losses
on such day, which amount shall reduce the Series
1996-1 Available Subordinated Amount and, if the
Series 1996-1 Available Subordinated Amount has been
reduced to zero, will reduce the Class B Invested
Amount and, if the Class B Invested Amount has been
reduced to zero, will reduce the Class A Invested
Amount; and

(ii) allocate to the Team Interest Amount
an amount equal to the Team Percentage (as of such
day) of the aggregate amount of Non-Repurchase Losses
on such day, which shall reduce the Team Interest
Amount.

(w) with respect to Segregated Repurchase Losses
(except as otherwise contemplated in the definition of
Segregated Repurchase Losses):

- 39 -
<PAGE> 43

(c) Allocations During the Series 1996-1 Rapid
Amortization Period. With respect to the Series 1996-1 Rapid Amortization
Period, the Servicer will direct the Trustee to allocate, prior to 1:00 pm.
(New York City time) on any Deposit Date, the following amounts as set forth
below:

(s) with respect to all Collections (including
Recoveries, all of which Recoveries shall be treated as
Principal Collections):

(i) allocate to the Series 1996-1
Collection Account an amount equal to the Series
1996-1 Interest Allocation for such day as set forth
in Section 4.2(a)(s)(i) above for such day, which
amount shall be further allocated to the Series
1996-1 Accrued Interest Account;

(ii) allocate to the Series 1996-1
Collection Account an amount equal to the Series
1996-1 Principal Allocation for such day, which
amount shall be used to make principal payments 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 Team Distribution
Account an amount determined as set forth in Section
4.2(a)(s)(iv) above for such day.

(t) with respect to Non-Repurchase Recoveries:

- 40 -
<PAGE> 44

first to reinstate the Class A Invested Amount (to
the extent that the Class A Invested Amount has
theretofore been reduced as a result of any
Non-Repurchase Losses allocated thereto as described
in clause (v) below and has not been subsequently
replenished); second to reinstate the Class B
Invested Amount (to the extent that the Class B
Invested Amount has theretofore been reduced as a
result of any Non-Repurchase Losses allocated thereto
as described in clause (v) below and has not been
subsequently replenished); and third to reinstate the
Series 1996-1 Available Subordinated Amount (to the
extent that the Series 1996-1 Available Subordinated
Amount has theretofore been reduced as a result of
any Non-Repurchase Losses allocated thereto as
described in clause (v) below and has not been
subsequently replenished); and

(u) with respect to Segregated Repurchase
Recoveries:

- 41 -
<PAGE> 45

subsequently replenished); second to reinstate the
Class B Invested Amount (to the extent that the Class
B Invested Amount has theretofore been reduced as a
result of any Segregated Repurchase Losses allocated
thereto as described in clause (w) below and has not
been subsequently replenished); and third to
reinstate the Series 1996-1 Available Subordinated
Amount (to the extent that the Series 1996-1
Available Subordinated Amount has theretofore been
reduced as a result of any Segregated Repurchase
Losses allocated thereto as described in clause (w)
below and has not been subsequently replenished); and

(v) with respect to Non-Repurchase Losses (except
as otherwise contemplated in the definition of Non-Repurchase
Losses):

(i) allocate to the Class A Invested Amount,
the Class B Invested Amount and the Series 1996-1
Available Subordinated Amount an amount equal to the
sum of (A) the Class A Non- Repurchase Percentage (as
of such day) of the aggregate amount of Non-Purchase
Losses on such day plus (B) the Class B
Non-Repurchase Percentage (as of such day) of the
aggregate amount of Non-Repurchase Losses on such day
plus (C) the Series 1996-1 Non-Repurchase Available
Subordinated Amount Percentage (as of such day) of
the aggregate amount of Non-Repurchase Losses on such
day, which amounts shall reduce the Series 1996-1
Available Subordinated and, if the Series 1996-1
Available Subordinated Amount has been reduced to
zero, will reduce the Class B Invested Amount and, if
the Class B Invested Amount has been reduced to zero,
will reduce the Class A Invested amount; and

(ii) allocate to the Team Amount, an amount
equal to the Team Percentage (as of such day) of the
aggregate amount of Non-Repurchase Losses on

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<PAGE> 46

such day, which shall reduce the Team Interest
Amount.

(w) with respect to Segregated Repurchase Losses
(except as otherwise contemplated in the definition of
Segregated Repurchase Losses):

(ii) allocable to the Team Interest
Amount an amount equal to the Team Percentage (as of
such day) of the aggregate amount of Segregated
Repurchase Losses on such day, which shall reduce the
Team Interest Amount.

(d) Allocation Adjustments. Notwithstanding the
foregoing provisions of this Section 4.2:

(A) amounts in excess of the Liquidity Amount allocated to the
Series 1996-1 Excess Funding Account that are not required to make
payments with respect to the Series 1996-1 Notes may 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 TFFC's option, be (i) used to acquire
Vehicles, to the extent Vehicles have been requested by the Lessees or
(ii) transferred on any Distribution Date to the Team Distribution
Account, to the extent that the Team Interest Amount equals or exceeds
zero after giving effect to such payment and so long as no Series
1996-1 Credit Support Deficiency or Asset Amount Deficiency would
result therefrom as indicated in the related Monthly Servicer's
Certificate; provided, however, that funds in excess of the

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<PAGE> 47

Liquidity Amount may be transferred to the Team Distribution Account
on a day other than a Distribution Date if the Servicer furnishes to
the Trustee an Officers' 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 Distribution Date. Funds in the Team
Distribution Account shall, at the option of TFFC, be available to
acquire Vehicles, to the extent Eligible Vehicles have been requested
by the Lessees, or for distribution to the Team Interestholder;

(B) in the event that the Servicer is not Team or an
Affiliate of Team or if a Servicer Default has occurred and is
continuing, the Servicer shall not be entitled to withhold any amounts
pursuant to Section 5.2(c) of the Base Indenture and the Trustee shall
deposit amounts payable to Team in the Collection Accounts pursuant to
the provisions of Section 5.2 of the Base Indenture on each Series
1996-1 Deposit Date;

(C) any amounts withheld by the Servicer and not
deposited in the Series 1996-1 Collection Account pursuant to Section
5.2(c) of the Base Indenture shall be deemed to be deposited in the
Series 1996-1 Collection Account on the date such amounts are withheld
for purposes of determining the amounts to be allocated pursuant to
this Section 4.2;

(D) if there is more than one Series of Notes
outstanding, then Sections 4.2(a)(s)(iv), 4.2(b)(s)(iii) and
4.2(c)(s)(iii) above shall not be duplicated with any similar
provisions contained in any other Supplement and Team shall only be
paid such amount once with respect to any Distribution Date;

(E) TFFC may, from time to time in its sole discretion,
increase the Series 1996-1 Available Subordinated Amount by (i)
transferring funds to the Series 1996-1 Excess Funding Account and
(ii) delivering to the Servicer and the Trustee an Officers'
Certificate setting forth the amount of such transferred funds and
stating that such transferred funds shall be allocated to the Series
1996-1 Available Subordinated Amount; provided, however, (a) TFFC
shall have no obligation to so increase the Series 1996-1 Available
Subordinated Amount and (b) TFFC may not increase the Series 1996-1
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 1996-1 Available Subordinated Amount, would
exceed the Series 1996-1 Available Subordinated Amount Maximum
Increase; and

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<PAGE> 48

(F) in the event that the Series 1996-1 Credit Support
Amount is reduced to less than the Series 1996-1 Minimum Credit
Support Amount, an Amortization Event and a Series 1996-1 Limited
Liquidation Event of Default shall be deemed to have occurred with
respect to the Series 1996-1 Notes only if, after any applicable grace
period, either the Trustee, by written notice to the Issuer, or the
Required Noteholders, by written notice to the Issuer and the Trustee,
declare that an Amortization Event has occurred; provided, however,
(i) the Issuer may prevent an Amortization Event from occurring if,
within one (1) Business Day after the occurrence of such Series 1996-1
Credit Support Deficiency, the Issuer contributes a portion of the
Team Interest in an amount sufficient, in the aggregate, to eliminate
such Series 1996-1 Credit Support Deficiency; provided, however, the
amount of such contribution (together with the sum of the amounts of
all prior contributions) shall not exceed the Series 1996-1 Available
Subordinated Amount Maximum Increase, excluding from such calculation
any increase in the Series 1996-1 Available Subordinated Amount (1)
through Recoveries or from funds constituting repayments of principal
under any intercompany demand note made by the Issuer in favor of
Team, or (2) relating to an increase in the Series 1996-1 Minimum
Credit Support Amount that results from (a) an increase in the ratio
of Non-Repurchase Vehicles to all Vehicles, (b) a reduction in the
aggregate amount of cash and Permitted Investments allocable to Series
1996-1 Vehicles in the Collection Account, or (c) a decline in the
resale performance of Non-Repurchase Vehicles within the twelve
calendar months preceding the applicable determination date, and (ii)
the Issuer may prevent a Series 1996-1 Limited Liquidation Event of
Default from occurring if within the thirty (30) day period after the
occurrence of such Series 1996-1 Credit Support Deficiency (x) the
Issuer contributes a portion of the Team Interest sufficient to
eliminate such Series 1996-1 Credit Support Deficiency and (y) obtains
written notice from the Rating Agencies to the Issuer, Team and the
Trustee that after such cure of such Series 1996-1 Credit Support
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 1996-1 Credit Support
Deficiency.

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<PAGE> 49

Section 4.3 Monthly Payments from the Series 1996-1 Accrued
Interest Account.

On each Determination Date, as provided below, the Servicer
shall instruct the Trustee or the Paying Agent to withdraw, and on the
following Distribution Date the Trustee or the Paying Agent, acting in
accordance with such instructions, shall withdraw the amounts required to be
withdrawn from the Series 1996-1 Collection Account pursuant to Sections
4.3(a), (b), (c), (d), (e) and (f) below in respect of all funds available from
Interest Collections processed since the preceding Distribution Date and
allocated to the holders of the Series 1996-1 Notes.

(a) Noteholder Counsel Fees and Disbursements. On each
Determination Date after the occurrence and during the continuance of an Event
of Bankruptcy with respect to Team, and before any deposits required to be made
on such date to the Class A Distribution Account and the Class B Distribution
Account have been made, the Servicer shall instruct the Trustee to withdraw
from the Series 1996-1 Accrued Interest Account, to the extent funds are
available from Interest Collections allocable to the Series 1996-1 Notes, for
payment to counsel to the Series 1996-1 Noteholders, up to $500,000 in the
aggregate in respect of legal fees and disbursements of such counsel, and remit
such amount to such counsel. If sufficient funds are not available in the
Series 1996-1 Accrued Interest Account, then the Trustee may withdraw funds
pursuant to Section 4.11 for such purpose.

(b) Successor Servicer Fees. On each Distribution Date
where Team is not the Servicer, and after the deposit (if applicable) described
in Section 4.3(a), and before any deposits required to be made on such date to
the Class A Distribution Account and the Class B Distribution Account have been
made, the Servicer shall instruct the Trustee and the Paying Agent as to the
amount to be withdrawn from the Series 1996-1 Accrued Interest Account to the
extent funds are available from Interest Collections allocable to the Series
1996-1 Notes processed since the preceding Distribution Date in respect of an
amount equal to (i) the Class A Investor Monthly Servicing Fee (and any Class A
Monthly Supplemental Servicing Fee) accrued since the preceding Distribution
Date, plus (ii) the Class B Investor Monthly Servicing Fee (and any Class B
Monthly Supplemental Servicing Fee) accrued since the preceding Distribution
Date, plus (iii) all accrued and unpaid Class A Investor Monthly Servicing Fees
(and any Class A Monthly Supplemental Servicing Fees) and Class B Investor
Monthly Servicing Fees (and any Class B Monthly Supplemental Servicing Fees) in
respect of previous periods, minus (iv) the amount of any Class A Investor
Monthly Servicing Fees and Class B Investor Monthly Servicing Fees (and Class A
Monthly Supplemental Servicing Fees and Class B Monthly

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<PAGE> 50

Supplemental Servicing Fees) withheld by the Servicer since the preceding
Distribution Date pursuant to Section 5.2(c) of the Base Indenture. On the
following Distribution Date, the Trustee shall withdraw such amount from the
Series 1996- 1 Accrued Interest Account and remit such amount to the Servicer.

(c) Note Interest with respect to the Class A Notes. On
each Determination Date, the Servicer shall, after making all distributions
required to be made pursuant to Sections 4.3(a) and (b), instruct the Trustee
and the Paying Agent as to the amount to be withdrawn from the Series 1996-1
Accrued Interest Account to the extent funds will be available from Interest
Collections allocable to the Series 1996-1 Notes processed from but not
including the preceding Distribution Date through the succeeding Distribution
Date in respect of (x) first, an amount equal to interest accrued for the
related Interest Period which will be equal to the product of (i) the Class A
Note Rate for the related Series 1996-1 Interest Period, and (ii) the Class A
Invested Amount as of the previous Distribution Date after giving effect to any
principal payments made and Losses and Recoveries allocated on such
Distribution Date (or in the case of the initial Distribution Date, the Class A
Initial Invested Amount), divided by twelve, and (y) then, an amount equal to
the amount of any unpaid Class A Deficiency Amounts, as defined below, as of
the preceding Distribution Date (together with any accrued interest on such
class A Deficiency Amounts). If the amounts described in this Section 4.3(c)
are insufficient, after taking into account amounts, if any, on deposit in the
Series 1996-1 Excess Funding Account in excess of the Liquidity Amount, to pay
such interest on any Distribution Date, payments of interest to the Class A
Noteholders will be reduced by the amount of such deficiency. The amount, if
any, of such deficiency on any Distribution Date shall be referred to as the
"Class A Deficiency Amount." Interest shall accrue on the Class A Deficiency
Amount at the Class A Note Rate. On the following Distribution Date, the
Trustee shall withdraw the accrued interest on the Class A Notes (as determined
above) and the Class A Deficiency Amount (together with accrued interest
thereon) from the Series 1996-1 Accrued Interest Account and deposit such
amount in the Class A Distribution Account.

(d) Note Interest with respect to the Class B Notes. On
each Determination Date, subject to Section 4.10 of this Supplement, 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, and no
payments on account of principal are then required to be made to the Class A
Noteholders (including, without limitation, all accrued interest, all interest
accrued on such accrued interest and any Class A Deficiency Amounts), the
Servicer shall, after making all distributions required to be made pursuant to
Sections 4.3(a) and

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<PAGE> 51

(b), instruct the Trustee and the Paying Agent as to the amount to be withdrawn
from the Series 1996-1 Accrued Interest Account to the extent funds will be
available from Interest Collections allocable to the Class B Notes which will
have been processed from but not including the preceding Distribution Date
through the succeeding Distribution Date, which amount shall be withdrawn in
respect of (x) first, an amount equal to interest accrued for the related
Series 1996-1 Interest Period which will be equal to the product of (i) the
Class B Note Rate for the related Series 1996-1 Interest Period, and (ii) the
Class B Invested Amount as of the previous Distribution Date after giving
effect to any principal payments made and Losses and Recoveries allocated on
such Distribution Date (or in the case of the initial Distribution Date, the
Class B Initial Invested Amount), divided by twelve, and (y) then, an amount
equal to the amount of any unpaid Class B Deficiency Amounts, as defined below,
as of the preceding Distribution Date (together with any accrued interest on
such Class B Deficiency Amounts). If the amounts described in this Section
4.3(d) are insufficient, after taking into account any funds in excess of the
Liquidity Amount available in the Series 1996-1 Excess Funding Account in
excess of the Liquidity Amount (subject to the provisions of Section 4.10 of
this Supplement), to pay such interest on any Distribution Date, payments of
interest to the Class B Noteholders will be reduced by the amount of such
deficiency. The amount, if any, of such deficiency on any Distribution 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
Distribution Date, the Trustee shall withdraw the accrued interest on the Class
B Notes (as determined above) and the Class B Deficiency Amount (together with
accrued interest thereon) from the Series 1996-1 Accrued Interest Account and
deposit such amount in the Class B Distribution Account.

(e) Servicing Fee. On each Distribution Date where Team
is the Servicer, the Servicer shall, after making all distributions required to
be made pursuant to Sections 4.3 (a), (c) and (d) of this Supplement, instruct
the Trustee and the Paying Agent as to the amount to be withdrawn from the
Series 1996-1 Accrued Interest Account to the extent funds are available from
Interest Collections allocable to the Series 1996-1 Notes processed since the
preceding Distribution Date in respect of an amount equal to (i) the Class A
Investor Monthly Servicing Fee (and any Class A Monthly Supplemental Servicing
Fee) accrued since the preceding Distribution Date, plus (ii) the Class B
Investor Monthly Servicing Fee (and any Class B Monthly Supplemental Servicing
Fee) accrued since the preceding Distribution Date, plus (iii) all accrued and
unpaid Class A Investor Monthly Servicing Fees (and any Class A Monthly
Supplemental Servicing Fees) and Class B Investor Monthly Servicing Fees (and
any Class B Monthly Supplemental Servicing

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<PAGE> 52

Fees) in respect of previous periods, minus (iv) the amount of any Class A
Investor Monthly Servicing Fees and Class B Investor Monthly Servicing Fees
(and Class A Monthly Supplemental Servicing Fees and Class B Monthly
Supplemental Servicing Fees) withheld by the Servicer since the preceding
Distribution Date pursuant to Section 5.2(c) of the Base Indenture. On the
following Distribution Date, the Trustee shall withdraw such amount from the
Series 1996-1 Accrued Interest Account and remit such amount to the Servicer.

(f) Balance. On each Distribution Date, the Servicer
shall instruct the Trustee and the Paying Agent as to the balance (after making
the payments required in Sections 4.3(a), (b), (c), (d) and (e) of this
Supplement and any required payments of interest in respect of any other Series
of Notes), if any, of the Interest Collections allocated to holders of the
Series 1996-1 Notes since the preceding Distribution Date ("Excess Team
Collections"). On the following Distribution Date (or, subject to compliance
with the requirements of Section 4.2(d)(A)(ii) of this Supplement on any other
day), the Paying Agent shall withdraw such balance from the Series 1996-1
Accrued Interest Account and pay such balance to the Team Distribution Account,
to the extent that, after giving effect to such transfer, the Team Interest
Amount equals or exceeds zero and provided that such payment will not cause an
Asset Amount Deficiency or a Series 1996-1 Credit Support Deficiency to exist,
as indicated on the Monthly Servicer's Certificate.

Section 4.4 Payment of Note Interest.

(a) Class A Notes. On each Distribution Date, the Paying
Agent shall, in accordance with Section 6.1 of the Base Indenture, 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 interest pursuant to
Section 4.3(c) of this Supplement and, to the extent necessary to pay interest
on the Class A Notes, amounts, if any, on deposit in the Series 1996-1 Excess
Funding Account in excess of the Liquidity Amount.

(b) Class B Notes. On each Distribution Date, the Paying
Agent shall, in accordance with Section 6.1 of the Base indenture but subject
to Section 4.10 of this Supplement, 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 interest pursuant to Section 4.3(d) of this
Supplement and, to the extent necessary to pay interest on the Class B Notes
(subject to Section 4.10 of this Supplement), amounts, if any, on deposit in
the Series 1996-1 Excess Funding Account in excess of the Liquidity Amount.

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<PAGE> 53

Section 4.5 Payment of Note Principal.

(a) Class A Notes.

(i) Commencing on the second Determination Date after
the commencement of the Class A Controlled Amortization Period
or the first Determination Date after the commencement of the
Series 1996-1 Rapid Amortization Period, the Servicer shall
instruct the Trustee and the Paying Agent as to the amount of
Principal Collections allocated to the Class A Notes during
the Related Month pursuant to Section 4.2(b)(s)(ii) or
4.2(c)(s)(ii) of this Supplement. Commencing on the second
Distribution Date after the commencement of the Series 1996-1
Controlled Amortization Period or the first Distribution Date
after the commencement of the Series 1996-1 Rapid Amortization
Period the Trustee shall withdraw such amount from the Series
1996-1 Collection Account and deposit such amount in the Class
A Distribution Account, to be paid pro rata to the holders of
the Class A Notes on account of payment of principal and, to
the extent necessary to pay such principal, withdraw funds, if
any, on deposit in the Series 1996-1 Excess Funding Account in
excess of the Liquidity Amount; provided, however, that with
respect to the final Distribution Date, the Trustee shall, in
accordance with the written instructions of the Servicer,
withdraw from the Series 1996-1 Collection Account an amount
which (in the aggregate) is no greater than the Class A
Invested Amount as of the end of the day on the preceding
Record Date. The entire principal amount of all Outstanding
Class A Notes shall be due and payable on the Series 1996-1
Termination Date.

(ii) On each Distribution Date occurring on or
after the date a withdrawal is made pursuant to Section
4.5(a)(i) of this Supplement, the Paying Agent shall, in
accordance with Section 6.1 of the Base Indenture, pay to the
Class A Noteholders the amount deposited in the Class A
Distribution Account for the payment of principal pursuant to
Section 4.5(a)(i) of this Supplement and, to the extent
necessary to pay principal on the Class A Notes, amounts, if
any, on deposit in the Series 1996-1 Excess Funding Account in
excess of the Liquidity Amount.

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<PAGE> 54

(b) Class B Notes.

(i) Commencing on the second Determination Date
after the commencement of the Class B Controlled Amortization
Period or the first Determination Date after the commencement
of the Series 1996-1 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 the amount
allocated to the Class B Notes during the Related Month
pursuant to Section 4.2(b)(s)(ii) and 4.2(c)(s)(ii) of this
Supplement. Commencing on the second Distribution Date after
the commencement of the Series 1996-1 Controlled Amortization
Period or the first Distribution Date after the commencement
of the Series 1996-1 Rapid Amortization period, the Trustee
shall, subject to Section 4.10 of this Supplement, withdraw
such amount from the Series 1996-1 Collection Account and
deposit such amount in the Class B Distribution Account, to be
paid pro rata to the holders of the Class B Notes on account
of payment of principal and, to the extent necessary to pay
such principal, withdraw funds, if any, on deposit in the
Series 1996-1 Excess Funding Account in excess of the
Liquidity Amount; provided, however, that with respect to the
final Distribution Date, the Trustee shall withdraw from the
Series 1996-1 Collection Account and the Series 1996-1
Non-Repurchase Collection Account an amount which (in the
aggregate) is no greater than the Class B Invested Amount as
of the end of the day on the preceding Record Date. Subject
to Section 4.10 of this Supplement, the entire principal
amount of all Outstanding Class B Notes shall be due and
payable on the Series 1996-1 Termination Date.

(ii) On each Distribution Date occurring on or
after the date a withdrawal is made pursuant to Section
4.5(b)(i) of this Supplement, the Paying Agent shall, in
accordance with Section 6.1 of the Base Indenture, pay to the
Class B Noteholders the amount deposited in the Class B
Distribution Account for the payment of principal pursuant to
Section 4.5(b)(i) of this Supplement and, to the extent
necessary to pay principal on the Class B Notes, amounts, if
any, on deposit in the Series 1996-1 Excess Funding Account in
excess of the Liquidity Amount (subject to Section 4.10 of
this Supplement).

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<PAGE> 55

Section 4.6 Servicer's or Team's Failure to Make a Deposit or
Payment.

If the Servicer or Team fails to make, or give notice or
instructions to make, any payment from or deposit to the Collection Account,
the Series 1996-1 Collection Account or the Series 1996-1 Accrued Interest
Account required to be made or given by the Servicer or Team, respectively, at
the time specified in the Indenture (including applicable grace periods), the
Servicer shall, upon request of the Trustee, promptly provide the Trustee with
all information necessary to allow the Trustee, in the event it elects to do
so, to make such a payment. Such funds shall be applied by the Trustee in the
manner in which such payment or deposit should have been made by the Servicer.

Section 4.7 Team Distribution Account. On each Distribution
Date, the Trustee shall instruct the Paying Agent to transfer to the Team
Distribution Account (i) all funds in the Collection Account allocable to
Series 1996-1 Vehicles that have been allocated to the Team Distribution
Account as of such Distribution Date and (ii) all funds that were previously
allocated to the Team Distribution Account but not transferred to the Team
Distribution Account.

Section 4.8 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

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<PAGE> 56

mature not later than the Business Day prior to the Distribution 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, then
such investment may mature on such Distribution Date and such funds shall be
available for withdrawal on or prior to such Distribution Date. The Trustee
shall hold, for the benefit of the Class A Noteholders and the Servicer,
possession of the negotiable instruments or securities evidencing the Permitted
Investments described in clause (i) of the definition thereof 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 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 Class A Notes. In order to secure and provide for the repayment
and payment of the TFFC Obligations with respect to the Class A Notes (but not
the other Notes), TFFC hereby assigns, pledges, grants, transfers and sets over
to the Trustee, for the benefit of the Class A Noteholders, all of TFFC'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 for the benefit of the Class A Noteholders.

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<PAGE> 57

Section 4.9 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.

(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
Distribution 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, then such investment may mature on such Distribution Date and
such funds shall be available for withdrawal on or prior to such Distribution
Date. The Trustee shall hold, for the benefit of the Class B Noteholders and
the Servicer, possession of the negotiable instruments or securities evidencing
the Permitted Investments described in clause (i) of the definition thereof
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 Class B Notes. In order to secure and provide for the repayment
and payment of the TFFC Obligations with respect to the Class B Notes (but not
the other Notes), TFFC

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<PAGE> 58

hereby assigns, pledges, grants, transfers and sets over to the Trustee, for
the benefit of the Class B Noteholders, all of TFFC'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
for the benefit of the Class B Noteholders.

Section 4.10 Class B Notes Subordinate to Class A Notes.
Notwithstanding anything to the contrary contained herein or in any other
Related Document, the Class B Notes will be subordinate in all respects to the
Class A Notes. No payments on account of principal shall be made with respect
to the Class B Notes until the Class A Notes have been paid in full and 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 (including, without limitation, all accrued interest, all interest
accrued on such accrued interest, and all Class A Deficiency Amounts) have been
paid in full.

Section 4.11 Application of Liquidity Amount; Allocation of
Certain Amounts to Interest.

(a) 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 1996-1 Excess Funding Account on the Series 1996-1
Issuance Date pursuant to Section 4.2) shall at all times, except as specified
in this Section 4.11, be retained in the Series 1996-1 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 Section 4.2(d)(A),
(ii) shall not be transferred to the Team Interest Account, and (iii) shall not
be used to pay interest or principal on the Series 1996-1 Notes pursuant to
Sections 4.3 through 4.6; provided, however, that upon the occurrence and
during the continuance of an Event of Bankruptcy with respect to Team or the
Issuer, or upon the

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<PAGE> 59

commencement of and during the Series 1996-1 Rapid Amortization Period, funds
that have been retained in the Series 1996-1 Excess Funding Account pursuant to
this Section 4.11 may be used to pay interest, the $500,000 legal fees and
disbursements reserve provided for in Section 4.3(a) of this Supplement and the
fees of any successor Servicer provided for in Section 4.3(b) of this
Supplement then currently due and payable, pursuant to the Base Indenture as
supplemented by this Supplement, in respect of the Series 1996-1 Notes.

(b) Allocation of Certain Amounts to Interest. Notwithstanding
anything to the contrary set forth in the Indenture, for the period ending on
the earlier of (x) the date that is five months after the occurrence of an
Event of Bankruptcy with respect to Team and (y) the date on which the
underlying case, application or petition with respect to such Event of
Bankruptcy is withdrawn or dismissed or any stay thereunder in respect of the
Trustee is lifted, all Disposition Proceeds, Guaranteed Payments and Repurchase
Prices received by the Issuer or the Trustee (including by deposit into the
Series 1996-1 Collection 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 2% of the Invested Amount of the Series 1996-1 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 4 are otherwise insufficient to pay such amounts.
Upon the expiration of the period described in clauses (x) and (y) of this
Section 4.11(b), Disposition Proceeds, Guaranteed Payments and Repurchase
Prices shall be allocated and distributed in accordance with this Article 4
(exclusive of this Section 4.11(b)).

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
the Issuer requesting an adjustment of either the Maximum Manufacturer
Percentage with respect to any Eligible Manufacturer or the Maximum
Non-Repurchase Percentage with respect to Non-Repurchase Vehicles (such notice,
a "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-Repurchase Percentage, as the case

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<PAGE> 60

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-Repurchase 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 Series 1996-1 Lease, of the Lessees to satisfy the
conditions in Section 2.7 of the Series 1996-1 Lease, all Series 1996-1
Principal Allocations allocated to the Series 1996-1 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, shall be held by
the Trustee in the Series 1996-1 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 1996-1 Noteholders, which notice shall be accompanied by
a form of consent (each a "Consent") in the form of Exhibit C hereto by which
the Series 1996-1 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 1996-1 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 2.7 of the Series
1996-1 Lease relating to the Maximum Non-Repurchase 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 Percentage and/or the Maximum
Non-Repurchase Percentage, as the case may be.

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<PAGE> 61

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 the Issuer, 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 (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 Noteholders 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) the
Issuer, at its option, may increase the Series 1996-1 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
Distribution 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 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
nonconsenting Class B Noteholders in full; and

(iv) any remaining Designated Amounts to the
Series l996-1 Excess Funding Account.

(c) Following such Distribution Date, the Servicer will
allocate to the Series 1996-1 Collection Account on a daily basis all
Designated Amounts collected on such day until the date on which the payments
described in clauses (i) through (iii) below shall have been paid in full. On
each following Distribution Date, the Trustee, at the direction of the
Servicer, will withdraw a portion of such Designated Amounts from the Series
1996-1 Collection Account and deposit same in the Class A

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<PAGE> 62

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
1996-1 Collection Account as of the applicable Determination
Date, plus (B) the Class B Invested Percentage of the
Designated Amounts in the Series 1996-1 Collection Account as
of the applicable Determination Date, plus (C) the Series
1996-1 Available Subordinated Amount Percentage of the
Designated Amounts in the Series 1996-1 Collection Account as
of the applicable Determination Date (each of such invested
percentages determined as specified with respect to Principal
Collections and as during the Series 1996-1 Rapid Amortization
Period, but, if the Waiver Event has occurred during the
Series 1996-1 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;

(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 1996-1 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 the Series
1996-1 Rapid Amortization Period, or, if the Waiver Event has
occurred during the Series 1996-1 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 of such
Designated Amounts as of

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<PAGE> 63

the applicable Determination Date, plus (C) the Series 1996-1
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 the Series 1996-1 Rapid Amortization Period,
or, if the Waiver Event has occurred during the Series 1996-1
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; and

(iv) any remaining Designated Amounts to the
Series 1996-1 Excess Funding Account.

In the event that the Series 1996-1 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 1996-1 Noteholders.

ARTICLE 6

AMORTIZATION EVENTS

In addition to the Amortization Events set forth in Section
9.1 of the Base Indenture, the following shall be Amortization Events with
respect to the Series 1996-1 Notes (without notice or other action on the part
of the Trustee or any holders of the Series 1996-1 Notes):

(a) A Series 1996-1 Credit Support Deficiency shall occur
and exist for more than one (1) Business Day unless during such one (1)
Business Day period the Issuer or the Servicer shall have cured the Series
1996-1 Credit Support Deficiency in accordance with the terms and conditions of
this Supplement; or

(b) if all principal and interest of the Class A Notes or
the Class B Notes is not paid in full on or before the applicable Expected
Final Distribution Date; or

In the case of any event described in clause (a) through (c),
an Amortization Event will be deemed to have occurred with respect to the
Series 1996-1 Notes only if, after any applicable grace period described in
such clause, either the

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<PAGE> 64

Trustee, by written notice to the Issuer, or the Required Noteholders of such
Series, by written notice to the Issuer and the Trustee, declare as of the date
of such notice, an Amortization Event has occurred.

The occurrence of the event described in clause (a) above
shall also be a Series 1996-1 Limited Liquidation Event of Default unless (i)
during the thirty (30) day period after the occurrence of the Series 1996-1
Credit Support Deficiency the Issuer or the Servicer shall have cured the
Series 1996-1 Credit Support Deficiency and (ii) the Rating Agencies shall have
notified the Issuer, Team and the Trustee in writing that after the cure of
such Series 1996-1 Credit Support Deficiency is provided for, the Class A Notes
and the Class B Notes will each receive the same ratings from the Rating
Agencies as they received prior to the occurrence of such Series 1996-1 Credit
Support Deficiency.

ARTICLE 7

FORM OF SERIES 1996-1 NOTES

Section 7.1 Class A Notes.

(a) Restricted Global Class A Note. Class A Notes to be
issued in the United States will be issued in book-entry form of and
represented by a permanent global Class A Note in fully registered form without
interest coupons (the "Restricted Global Class A Note"), substantially in the
form set forth in Exhibit A-1 hereto, with such legends as may be applicable
thereto as set forth in the Base Indenture, and will be sold initially to
institutional accredited investors within the meaning of Regulation D under the
Securities Act in reliance on an exemption from the registration requirements
of the Securities Act and thereafter to qualified institutional buyers within
the meaning of, and in reliance on, Rule 144A under the Securities Act 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 TFFC and authenticated by the Trustee in the manner
set forth in Section 2.4 of the Base Indenture.

(b) Temporary Global Class A Note; Permanent Global Class
A Note. Class A Notes to be issued outside the United States will be issued
and sold in transactions outside the United States in reliance on Regulation S
under the Securities Act, as provided in the applicable placement agreement,
and shall initially be issued in the form of a temporary global Class A Note
in registered form without interest coupons, substantially in the form of
Exhibit A- 2 hereto (the "Temporary Global Class A

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<PAGE> 65

Note"), 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 TFFC
and authenticated by the Trustee in the manner set forth in Section 2.4 of the
Base Indenture. Interests in a Temporary Global Class A Note will be
exchangeable, in whole or in part, for interests in a permanent global Class A
Note in registered form without interest coupons, substantially in the form of
Exhibit A-3 hereto (the "Permanent Global Class A Note"), in accordance with
the provisions of such Temporary Global Class A Note and the Base Indenture (as
modified by this Supplement). 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 7.2 Class B Notes.

(a) Restricted Global Class B Note. Class B Notes to be
issued in the United States will be issued in book-entry form of and
represented by a permanent global Class B Note in fully registered form without
interest coupons (the "Restricted Global Class B Note"), substantially in the
form set forth in Exhibit B-1 hereto, with such legends as may be applicable
thereto as set forth in the Base Indenture, and will be sold initially to
institutional accredited investors within the meaning of Regulation D under the
Securities Act in reliance on an exemption from the registration requirements
of the Securities Act and thereafter to qualified institutional buyers within
the meaning of, an in reliance on, Rule 144A under the Securities Act 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 TFFC and authenticated by the Trustee in the manner
set forth in Section 2.4 of the Base Indenture.

(b) Temporary Global Class B Note; Permanent Global Class
B Note. Class B Notes to be issued outside the United States will be issued
and sold in transactions outside the United States in reliance on Regulation S
under the United States Securities Act, as provided in the applicable placement
agreement, and shall initially be issued in the form of a temporary global
Class B Note in registered form without interest coupons, substantially in the
form of Exhibit B-2 hereto (the "Temporary Global Class B Note"), 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,

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<PAGE> 66

duly executed by TFFC and authenticated by the Trustee in the manner set forth
in Section 2.4 of the Base Indenture. Interests in a Temporary Global Class A
Note will be exchangeable, in whole or in part, for interests in a permanent
global Class B Note in registered form without interest coupons, substantially
in the form of Exhibit B-3 hereto (the "Permanent Global Class B Note"), in
accordance with the provisions of such Temporary Global Class a Note and the
Base Indenture (as modified by this Supplement). 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.

ARTICLE 8

GENERAL

The Class A Notes shall be subject to repurchase by TFFC at
its option in accordance with Section 6.3 of the Base Indenture on any
Distribution Date after the Class A Invested Amount is reduced to an amount
less than or equal to 10% of the Class A Initial Invested Amount (the "Class A
Repurchase Amount"). The repurchase price for any Class A Note shall equal the
aggregate outstanding principal balance of such Class A Note (determined after
giving effect to any payments of principal and interest and any allocations of
Losses or Recoveries on such Distribution Date), plus accrued and unpaid
interest on such outstanding principal balance. The Class B Notes shall be
subject to repurchase by TFFC at its option in accordance with Section 6.3 of
the Base Indenture on any Distribution Date after the Class B Invested Amount
is reduced to an amount less than or equal to 10% for the Class A Initial
Invested Amount (the "Class B Repurchase Amount"). The repurchase price for
any Class B Note shall equal the aggregate outstanding principal balance of
such Class B Note (determined after giving effect to any payments of principal
and interest and any allocations of Losses or Recoveries on such Distribution
Date), plus accrued and unpaid interest on such outstanding principal balance.

Payment of Rating Agency Fees. TFFC agrees and covenants with
the Servicer to pay all reasonable fees and expenses of the Rating Agencies and
to promptly provide all documents and other information that the Rating
Agencies may reasonably request.

Exhibits. The following exhibits attached hereto supplement
the exhibits included in the Indenture.

Exhibit A-1: Form of Restricted Global Class A Note
Exhibit A-2: Form of Temporary Global Class A Note
Exhibit A-3: Form of Permanent Global Class A Note

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<PAGE> 67

Exhibit B-1: Form of Restricted Global Class B Note
Exhibit B-2: Form of Temporary Global Class B Note
Exhibit B-3: Form of Permanent Global Class B 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 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 outstanding principal amount of the
Series 1996-1 Notes affected thereby (including for purposes of determining
such aggregate outstanding principal amount, the aggregate outstanding
principal amounts of both the Class A Notes and the Class B Notes); and,
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 Notes (and does not affect the Class B Notes in any material
respect, 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 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 or (ii)
affects only the Class B Notes (and does not affect the Class A Notes in any
material respect, 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 Noteholders representing more than 50% of the aggregate
outstanding principal amount of the Class B Notes (without the necessity of
obtaining the consent of the Required Noteholders in respect of the Class A
Notes).

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<PAGE> 68

Discharge of Indenture. Notwithstanding anything to the
contrary contained in the Base Indenture, no discharge of the Indenture
pursuant to Section 11.1(b) of the Base Indenture will be effective as to the
Series 1996-1 Notes without the consent of the Required Noteholders.

* * * *

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<PAGE> 69

IN WITNESS WHEREOF, TFFC, the Servicer, Team, as Team
Interestholder, 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.

TEAM FLEET FINANCING CORPORATION

By: Sanford Miller
--------------------------------------
Name: Sanford Miller
Title: Chairman and Chief
Executive Officer and President

TEAM RENTAL GROUP, INC., as
Servicer

By: Sanford Miller
--------------------------------------
Name: Sanford Miller
Title: Chief Executive Miller

TEAM RENTAL GROUP, INC.,
as Team Interestholder

By: Sanford Miller
--------------------------------------
Name: Sanford Miller
Title: Chief Executive Officer

BANKERS TRUST COMPANY,
as Trustee

By: Lillian Peros
--------------------------------------
Name: Lillian Peros
Title: Assistant Treasurer

- 66 -

<PAGE> 1
EXHIBIT 4.17

TEAM FLEET FINANCING CORPORATION
AS LESSOR

TEAM RENTAL GROUP, INC.
AS GUARANTOR

Those Subsidiaries of Team
Rental Group, Inc.
named on Schedule 1 hereto
as LESSEES

AMENDED AND RESTATED MASTER
MOTOR VEHICLE LEASE
AGREEMENT
Dated as of December 1, 1996
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2. GENERAL AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1. Acquisition of Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2. Right of Lessees to Act as Lessor's Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3. Payment of Capitalized Cost by Lessor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.4. Non-liability of Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.5. Lessees' Rights to Purchase Vehicles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.6. Lessor's Right to Cause vehicles to be Sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

3. TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1. The "Vehicle Lease Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2. The "Lease Commencement Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

4. RENT AND CHARGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1. Certain Definition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2. Payment of Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3. Late Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.4. Net Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

5. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.1. Personal Injury and Damage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.2. Delivery of Certificate of Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.3. Changes in Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

6. RISK OF LOSS AND CASUALTY OBLIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.1. Risk of Loss Borne by Lessee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.2. Casualty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

7. VEHICLE USE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

8. LIENS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

9. NON-DISTURBANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

10. REGISTRATION: LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES. . . . . . . . . . . . . . . . . . . . . . . . . . 16

11. MAINTENANCE AND REPAIRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

12. VEHICLE WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
12.1. No Lessor Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
12.2. Manufacturer's Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

</TABLE>

<PAGE> 3

<TABLE>
<S> <C> <C>
13. VEHICLE USAGE GUIDELINES AND RETURN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
13.1. Usage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
13.2. Return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
13.3. Termination Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
13.4. Repurchase Price Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

14. DISPOSITION PROCEDURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

15. ODOMETER DISCLOSURE REQUIREMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

16. GENERAL INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
16.1. Indemnity by the Lessee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
16.2. Reimbursement Obligation by the Lessee Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
16.3. Defense of Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

17. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
17.1. Right of the Lessor to Assign this Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
17.2. Limitations on the Right of the Lessee to Assign this Agreement. . . . . . . . . . . . . . . . . . . 22

18. DEFAULT AND REMEDIES THEREFOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
18.1. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
18.2. Effect of Lease Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
18.3. Rights of Lessor Upon Lease Event of Default, Liquidation Event of Default or Limited
Liquidation Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
18.4. Rights of Trustee Upon Liquidation Event of Default, Limited Liquidation Event of Default and
Non-Performance of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
18.5. Measure of Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
18.6. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

19. MANUFACTURER EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

20. LESSEE PARTIAL WIND-DOWN EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

21. ELIGIBILITY WAIVER EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

22. CERTIFICATION OF TRADE OR BUSINESS USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

23. SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

24. ADDITIONAL LESSEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

25. TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

26. GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
26.1. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
26.2. Scope of Guarantor's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
26.3. Lessor's Right to Amend this Agreement, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
26.4. Waiver of Certain Rights by Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

</TABLE>

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<PAGE> 4

<TABLE>
<S> <C> <C>
26.5. Lessees' Obligations to Guarantor and Guarantor's Obligations to Lessees Subordinated . . . . . . . . 34
26.6. Guarantor to Pay Lessor's Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
26.7. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
26.8. Pari Passu Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

27. RIGHTS OF LESSOR ASSIGNED TO TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

28. RIGHT OF LESSEE TO DELEGATE RIGHTS AND OBLIGATIONS HEREUNDER TO GUARANTOR . . . . . . . . . . . . . . . . . . . 38

29. MODIFICATION AND SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

30. CERTAIN REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
30.1. Due Organization, Authorization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
30.2. Financial Information; Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
30.3. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
30.4. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
30.5. Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
30.6. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
30.7. Regulations G, U and X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
30.8. Business Locations: Trade Names: Principal Places of Business Locations . . . . . . . . . . . . . . . 40
30.9. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
30.10. Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
30.11. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
30.12. Eligible Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
30.13. Supplemental Documents True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

31. CERTAIN AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
31.1. Corporate Existence: Foreign Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
31.2. Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
31.3. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
31.4. Repurchase Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
31.5. Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
31.6. Taxes and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
31.7. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
31.8. Maintenance of Separate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
31.9. Trustee as Lienholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

32. CERTAIN NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
32.1. Mergers, Consolidations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
32.2. Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
32.3. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
32.4. Use of Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

33. BANKRUPTCY PETITION AGAINST LESSOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

34. SUBMISSION TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

35. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

</TABLE>

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<PAGE> 5

<TABLE>
<S> <C> <C>
36. JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

37. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

38. LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

39. TITLE TO REPURCHASE PROGRAMS IN LESSOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

40. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

41. EXECUTION IN COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

42. EFFECTIVENESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

</TABLE>

Schedule 1 Lessees on Date of Execution of Lease
Schedule 2 Lessees Selling Lessee Acquired
Vehicles on Date of Execution of Lease
Schedule 30.8 Business Locations

ATTACHMENT A Vehicle Acquisition Schedule
ATTACHMENT B FORM OF POWER OF ATTORNEY
ATTACHMENT C FORM OF JOINDER IN LEASE
ATTACHMENT D FORM OF BILL OF SALE
SCHEDULE 1 TO BILL OF SALE VEHICLE

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<PAGE> 6

AMENDED AND RESTATED MASTER MOTOR VEHICLE LEASE AGREEMENT

This Amended and Restated Master Motor Vehicle Lease Agreement (this
"Agreement"), dated as of December 1, 1996, by and among TEAM FLEET FINANCING
CORPORATION, a Delaware corporation ("Lessor"), those direct or indirect
subsidiaries of Team Rental Group, Inc., a Delaware corporation ("Team") that
are listed on Schedule 1 hereto and those that become party to this Agreement
pursuant to the provisions of Section 24 hereof (individually, a "Lessee" and,
collectively, the "Lessees"), and TEAM RENTAL GROUP, INC., as guarantor (Team,
in such capacity, is referred to as the "Guarantor"; the Guarantor, together
with the Lessees is from time to time referred to as the "Lessee Group").

W I T N E S S E T H:

WHEREAS, the Lessor and the Lessees are parties to a Master Motor
Vehicle Lease and Servicing Agreement, dated July 1, 1994 (the "Prior
Agreement");

WHEREAS, the Lessor and the Lessees desire to amend and restate the
Prior Agreement in its entirety as hereinafter set forth;

WHEREAS, the Lessor has purchased or will purchase Vehicles from one
or more Manufacturers pursuant to such Manufacturers, respective Repurchase
Programs;

WHEREAS, the Lessor desires to lease to the Lessees and the Lessees
desire to lease from the Lessor Vehicles acquired by the Lessor pursuant to
such Repurchase Programs for use in the daily rental car businesses of the
Lessees; and

WHEREAS, the Guarantor has, pursuant to Section 26 hereof, guaranteed
the obligations of the Lessees under this Agreement.

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:

1. DEFINITIONS. Certain capitalized terms used herein (including the
preamble and the recitals hereto) shall have the meanings ascribed to such
terms in the Definitions List attached

<PAGE> 7

as Schedule 1 to the Base Indenture (the "Definitions List"), as such
Definitions List may be amended or modified from time to time in accordance
with the provisions of the Indenture.

2. GENERAL AGREEMENT. (a) Each Lessee and the Lessor intend that
this Agreement is a lease and that the relationship between the Lessor and the
Lessees pursuant hereto shall always be only that of lessor and lessee and each
Lessee hereby declares, acknowledges and agrees that the Lessor has title to
and is the owner of the Vehicles. No Lessee shall acquire by virtue of this
Agreement any right, equity, title or interest in or to any Vehicles, except
the right to use the same under the terms hereof. The parties agree that this
Agreement is a "true lease," and agree to treat this Agreement as a lease for
all purposes, including tax, accounting and otherwise.

(b) If, notwithstanding the intent of the parties to this Agreement,
this Agreement is characterized by any third party as a financing arrangement
or as otherwise not constituting a "true lease," then it is the intention of
the parties that this Agreement shall constitute a security agreement under
applicable law, and each Lessee hereby grants to the Lessor a first priority
security interest in all of such Lessee's right, title and interest, if any, in
and to all of the following assets, property and interests in property, whether
now owned or hereafter acquired or created:

(i) the rights of such Lessee under this Agreement, as same
may be amended, modified or supplemented from time to time in
accordance with its terms, and any other agreements related to or in
connection with this Agreement to which such Lessee is a party (the
"Lessee Agreements"), including, without limitation, (a) all monies
due and to become due to such Lessee from the Guarantor and the
Lessees under or in connection with the Lessee Agreements, whether
payable as rent, guaranty payments, fees, expenses, costs,
indemnities, insurance recoveries, damages for the breach of any of
the Lessee Agreements or otherwise, (b) all rights, remedies, powers,
privileges and claims of such Lessee against any other party under or
with respect to the Lessee Agreements (whether arising pursuant to the
terms of such Agreements or otherwise available to such Lessee at law
or in equity), including the right to enforce any of the Lessee
Agreements and to give or withhold any and all consents, requests,
notices, directions, approvals, extensions or waivers under or with
respect to the Lessee Agreements or the obligations of any party
thereunder, (c) all liens and property from time to time purporting to
secure payment arising under or in connection with the Lessee
Agreements, or assigned to, such Lessee describing any collateral
securing such obligations or liabilities and (d) all guarantees,
insurance

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<PAGE> 8

and other agreements or arrangements of whatever character from time
to time supporting or securing payment of such obligations and
liabilities of such Lessee pursuant to the Lessee Agreements;

(ii)(a) all vehicles leased by such Lessee from the Lessor
which, notwithstanding that this Agreement is intended to convey only
a leasehold interest, are determined to be owned by such Lessee, and
all Certificates of Title with respect to such Vehicles;

(iii) all right, title and interest of such Lessee in, to and
under any Repurchase Programs and all monies due and to become due
thereunder in respect of Vehicles leased under this Agreement which,
notwithstanding that this Agreement is intended to convey only a
leasehold interest, are determined to be owned by such Lessee, whether
payable as Vehicle repurchase prices, fees, expenses, costs,
indemnities, insurance recoveries, damages for breach of the
Repurchase Programs or otherwise;

(iv) the Collection Account; (a) all funds on deposit therein
from time to time; (b) 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 (c) all investments
made at any time and from time to time with the moneys in the
Collection Account (including income thereon);

(v) all additional property that may from time to time
hereafter be subjected to the grant and pledge under this Agreement,
as same may be modified or supplemented from time to time, by such
Lessee or by anyone on its behalf; and

(vi) all proceeds of any and all of the foregoing including,
without limitation, payments under insurance (whether or not the
Lessor is the loss payee thereof) and cash.

2.1. Acquisition of Vehicles. (a) From time to time, at the
discretion of the Lessor and the Lessees, subject to the terms and provisions
hereof, the Lessor agrees to lease to each Lessee and each Lessee agrees to
lease from the Lessor, subject to the terms hereof, the Vehicles identified in
Vehicle orders placed by the Lessees pursuant to the terms of the Repurchase
Programs (each, a "Vehicle Order"). If requested by the Lessor, each Lessee
shall make each Vehicle Order available to the Lessor, together with a schedule
containing the information with respect to the Vehicles included within such
Vehicle Order as is set forth in Attachment A hereto (each, a "Vehicle
Acquisition Schedule"), or in such form as is otherwise requested by the

- 3 -
<PAGE> 9

Lessor. In addition, each Lessee leasing Vehicles pursuant to such Vehicle
Order agrees to provide such other information regarding such Vehicles as the
Lessor may require from time to time. The Lessees and the Lessor acknowledge
that concurrently with the execution and delivery of this Agreement, the
Lessees specified on Schedule 1 have made available to the Lessor Vehicle
Orders to lease the Vehicles currently owned by the Lessor pursuant to this
Agreement, together with the required Vehicle Acquisition Schedules in respect
of such Vehicle Orders. Subject to the provisions of Section 21 hereof
(regarding Eligibility Waiver Events), the Lessor shall lease to the Lessees,
and the Lessees shall lease from the Lessor, only Vehicles purchased by the
Lessor pursuant to the terms of Eligible Repurchase Programs. This Agreement,
together with the Repurchase Programs 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 Lessees.

(b) The Lessor and the Lessees each acknowledge that either
concurrently with the execution and delivery of this Agreement, or after the
date of this Agreement on not less than thirty (30) days written notice to the
Lessor and the Trustee, any Lessee (each, a "Selling Lessee") may sell Vehicles
(the "Lessee Acquired Vehicles") to the Lessor for a price equal to the Net
Book Value of such Lessee Acquired Vehicles, in which event such Lessee shall,
immediately upon the consummation of such sale, lease such Lessee Acquired
Vehicles from the Lessor pursuant to this Agreement (each such transaction is
referred to as "Lessee Sale Transaction"). Concurrently with the execution and
delivery of this Agreement, the Lessees listed on Schedule 2 hereto are selling
to the Lessor certain Lessee Acquired Vehicles. In connection with each Lessee
Sale Transaction, to evidence the conveyance of the Lessee Acquired Vehicles
from the Selling Lessee to the Lessor, the applicable Selling Lessee shall
deliver to the Lessor the following:

(i) a Vehicle Order (including a Vehicle Acquisition
Schedule) with respect to all Lessee Acquired Vehicles covered by such
Lessee Sale Transaction;

(ii) a report of the results of a search of the appropriate
records of the county and state in which the Lessee Acquired Vehicles
covered by such Lessee Sale Transaction are located and the county and
state in which the Selling Lessee's principal office is located, which
shall show no liens or other security interests (other than Permitted
Liens) with respect to the Lessee Acquired Vehicles covered by such
Lessee Sale Transaction or, in the event that such search reveals any
such Lien or security interest, there shall be delivered to the
Trustee a

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<PAGE> 10

termination of such Lien or security interest in form acceptable for
filing;

(iii) confirmation from each lender holding a security
interest in any Lessee Acquired Vehicle covered by such Lessee Sale
Transaction stating unconditionally (A) that, if any sums are to be
paid to such lender in connection with such Lessee Sale Transaction,
such lender has been paid the full amount due to it in connection with
such Lessee Sale Transaction and (B) that any lien or security
interest of such lender in any such Lessee Acquired Vehicle has been
released;

(iv) the original Certificate of Title for each Lessee
Acquired Vehicle together with a completed application to retitle such
Lessee Acquired Vehicle in the name of the Lessor and to have noted
thereon the Trustee's security interest in such Lessee Acquired
Vehicle pursuant to the Indenture;

(v) Uniform Commercial Code termination statements
terminating, or Uniform Commercial Code partial releases releasing,
any security interests and other liens (other than Permitted Liens) in
favor of any Person with respect to each Lessee Acquired Vehicle
covered by such Lessee Sale Transaction and any related Repurchase
Program rights;

(vi) a bill of sale, substantially in the form attached
hereto as Attachment D (each, a "Lessee Bill of Sale"), conveying
title to the Lessee Acquired Vehicles, and all right, title and
interest of the Selling Lessee to the applicable Repurchase Program
from the Selling Lessee to the Lessor; and

(vii) written confirmation from the applicable Manufacturer
that the Lessor will be authorized to return such Lessee Acquired
Vehicles to the Manufacturer under the Lessor's Repurchase Program.

In addition, the applicable Lessee shall deliver to the Trustee the
items required to be delivered to the Trustee pursuant to the provisions of
Section 13.21 of the Base Indenture.

(c) In order to induce the Lessor to purchase Lessee Acquired
Vehicles, each Selling Lessee shall be deemed to have represented and warranted
to and in favor of the Lessor and the Trustee, as of the date hereof or, with
respect to a Lessee Sale Transaction that takes place after the date of this
Agreement, as of the date of such Lessee Sale Transaction, as follows:

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<PAGE> 11

(i) The Selling Lessee is the true and lawful owner of all
Lessee Acquired Vehicles listed on Schedule 1 to the applicable Bill
of Sale as being owned by such Selling Lessee;

(ii) The Lessee Acquired Vehicles listed on Schedule 1 to the
applicable Bill of Sale as being owned by such Selling Lessee are not
subject to any lien, security interest or rights of any other party,
other than Permitted Liens;

(iii) The Lessee Acquired Vehicles listed on Schedule 1 to
the applicable Bill of Sale as being owned by such Selling Lessee are
Eligible Vehicles and have not been held beyond the Maximum Term
applicable thereto;

(iv) All representations and warranties contained in this
Agreement with respect to "Vehicles" owned by "Lessees" are true and
correct as applied to the Lessee Acquired Vehicles listed on Schedule
1 to the applicable Bill of Sale as being owned by such Selling
Lessee; and

(v) The purchase price being paid by the Lessor for the
Lessee Vehicles is listed on Schedule 1 to the applicable Bill of Sale
and such price constitutes, with respect to each Vehicle, the Net Book
Value of such Vehicle.

Other than Lessee Sale Transactions complying with the provisions of this
Section 2.1, the Lessor shall not purchase any Vehicles from any Lessee. After
any purchase of Lessee Vehicles by the Lessor, such Lessee Vehicles will be
subject to all the terms and conditions of this Agreement.

2.2. Right of Lessees to Act as Lessor's Agent. The Lessor agrees
that any member of the Lessee Group 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 Group liable for losses due to such member of the Lessee
Group's actions in performing as the Lessor's agent hereunder. In addition,
the Lessor agrees that each Lessee may make arrangements for delivery of
Vehicles to a location selected by the relevant Lessee at such Lessee's
expense. Each Lessee agrees to accept Vehicles as produced and delivered
except each Lessee will have the option to reject any Vehicle that may be
rejected pursuant to the terms of the applicable Repurchase Program. The
relevant Lessee, acting as agent for the Lessor, shall be responsible for
pursuing any rights of the Lessor with respect to the return of any Vehicle to
the Manufacturer pursuant to the preceding sentence. Subject to the provisions
of Section

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<PAGE> 12

21 hereof regarding Eligibility Waiver Events), any member of the Lessee Group
that places a Vehicle Order pursuant to this Agreement agrees that all Vehicles
ordered as provided herein shall be ordered utilizing the procedures consistent
with an Eligible Repurchase Program.

2.3. Payment of Capitalized Cost by Lessor. Upon delivery of any
Vehicle, the Lessor shall pay to the Manufacturer the costs and expenses
incurred by it in connection with the acquisition of Vehicles under the
Repurchase Program as established by the Manufacturer's invoice (the
"Capitalized Cost") for such Vehicle and the relevant 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 Capitalized Cost.

2.4. Non-liability of Lessor. The Lessor shall not be liable to any
of the Lessees for any failure or delay in obtaining Vehicles or making
delivery thereof. AS BETWEEN THE LESSOR AND EACH LESSEE, ACCEPTANCE FOR LEASE
OF THE VEHICLES SHALL CONSTITUTE SUCH LESSEE'S ACKNOWLEDGMENT AND AGREEMENT
THAT SUCH 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 SUCH LESSEE IS SATISFIED THAT THE SAME
ARE SUITABLE FOR THIS USE AND THAT THE LESSOR IS NOT A MANUFACTURER OR ENGAGED
IN THE SALE OR DISTRIBUTION OF VEHICLES, AND HAS NOT MADE AND DOES NOT HEREBY
MAKE ANY REPRESENTATION, WARRANTY OR COVENANT WITH RESPECT TO MERCHANTABILITY,
CONDITION, QUALITY, DURABILITY OR SUITABILITY OF THE VEHICLE IN ANY RESPECT OR
IN CONNECTION WITH OR FOR THE PURPOSES OR USES OF SUCH LESSEE, OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, WITH RESPECT THERETO. 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 RESULTING FROM ANY DEFECT IN OR ANY THEFT, DAMAGE, LOSS OR
FAILURE OF ANY VEHICLE, AND THERE SHALL BE NO ABATEMENT OF RENT BECAUSE OF THE
SAME.

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<PAGE> 13

or, if such "Black Book" is no longer published, a national publication then
currently accepted in the United States automobile rental industry for the
valuation of Vehicles, which is proposed by the Servicer and approved by the
Lessor, such approval not to be unreasonably withheld or delayed (the greater
of such amounts being referred to as the "Vehicle Purchase Price"), in which
event such Lessee will pay the Vehicle Purchase Price to the Lessor on or
before the Due Date next succeeding such purchase by the relevant 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 relevant Lessee, and the
Servicer shall cause the Trustee 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 such unpaid Monthly Base Rent
and Monthly Variable Rent) is paid by such Lessee to the Trustee.

2.6. Lessor's Right to Cause vehicles to be Sold. Notwithstanding
anything to the contrary contained herein, the Lessor shall have the right, at
any time prior to the date thirty (30) days prior to the expiration of the
Maximum Term for any Vehicle, to require that the Lessee leasing such Vehicle
from the Lessor hereunder exercise commercially reasonable efforts to arrange
for the sale of such Vehicle to a third party for a price greater than the Net
Book Value thereof, in which event such Lessee shall, until not later than the
date thirty (30) days prior to the expiration of such Maximum Term, exercise
commercially reasonable efforts to arrange for the sale of such Vehicle to a
third party for a price greater than the Net Book Value or purchase the Vehicle
from the Lessor for the Vehicle Purchase Price. If a sale of the Vehicle is
arranged by the Lessee prior to such date thirty (30) days prior to the
expiration of such Maximum Term, then the Lessee shall deliver the vehicle to
the purchaser thereof, the Lien of the Trustee on the Certificate of Title of
such Vehicle shall be released, and the Lessee shall cause to be delivered to
the Lessor the funds paid for such Vehicle by the purchaser. If the Lessee is
unable to arrange for a sale of the Vehicle prior to such date thirty (30) days
prior to the expiration of such Maximum Term, then the Lessee shall cease
attempting to arrange for such a sale and shall return such vehicle to the
applicable Manufacturer as herein provided. In no event may any Vehicle be
sold pursuant to this Section 2.6 unless the funds to be paid to the Lessor
arising out of such sale exceed the Net Book Value of such Vehicle.

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<PAGE> 14

3. TERM.

3.1. The "Vehicle Lease Commencement Date" for each Vehicle shall
mean the day as referenced in the Vehicle Acquisition Schedule with respect to
such Vehicle but in no event beyond the date that funds are expended by the
Lessor to acquire such Vehicle. The "Vehicle Term" with respect to each
Vehicle shall extend from the Vehicle Lease Commencement Date through the
earliest of (i) the Turnback Date for such Vehicle, (ii) if the Vehicle is sold
to a third party (other than through an auction conducted by or through or
arranged by the Manufacturer pursuant to its Repurchase Program), the date on
which such funds in respect of such sale are received by the Trustee (from such
third party or from any member of the Lessee Group on behalf of such third
party) and such funds equal or exceed the Net Book Value of such vehicle, (iii)
if the Vehicle becomes a Casualty, the date funds in the amount of the Net Book
Value thereof are received by the Trustee from the applicable Lessee, or (iv)
the date that the Vehicle is purchased by the applicable Lessee pursuant to
Section 2.5 hereof and the Vehicle Purchase Price with respect to such purchase
(and any unpaid Monthly Base Rent and Monthly Variable Rent with respect to
such Vehicle) is received by the Trustee (the earliest of such four dates being
referred to as the "Vehicle Lease Expiration Date"). The Lessor and each
Lessee agree that each Lessee shall use its commercially reasonable efforts to
return each Vehicle to the related Manufacturer (a) not prior to the end of the
minimum holding period specified in the related Repurchase Program (prior to
which the Lessor may not return such Vehicle without penalty (the "Minimum
Term")) and (b) not later than the end of the maximum holding period (after
which the Lessor may not return such vehicle without penalty (the "Maximum
Term")); provided, however, if for any reason, a Lessee fails to return a
Vehicle to the applicable Manufacturer during the time period between the
expiration of the Minimum Term and the expiration of the Maximum Term, such
Lessee shall be obligated to purchase such Vehicle from the Lessor on the first
Due Date after the expiration of the Maximum Term for an amount equal to the
Vehicle Purchase Price with respect to such Vehicle. Each Lessee will pay the
equivalent of the Rent for the Minimum Term for Vehicles returned before the
Minimum Term, regardless of actual usage, unless a Vehicle is a Casualty which
will be handled in accordance with Section 6 hereof.

3.2. The "Lease Commencement Date" shall mean the earlier of (i) the
date of the issuance of the first Series of Notes or (ii) the date of the
Vehicle Lease Commencement Date for the first Vehicle leased by a Lessee
hereunder. 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 leased by a
Lessee hereunder. The "Term" of

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<PAGE> 15

this Agreement shall mean the period commencing on the Lease Commencement Date
and ending on the Lease Expiration Date.

4. RENT AND CHARGES. Each Lessee will pay Rent on a monthly basis as
set forth in this Section 4:

4.1. Certain Definition. As used herein the following terms have the
following meanings:

"Monthly Base Rent" with respect to each Due Date and each
Vehicle shall equal the sum of the following, without double counting,
(a) the Depreciation Charge for the Related Month for such Vehicle
plus (b) the aggregate Net Book Value of such Vehicle, if such Vehicle
became a Casualty during the Related Month or was sold to any person
(other than to a Manufacturer pursuant to such Manufacturer's
Repurchase Program or to a third party pursuant to an auction
conducted through a Manufacturer's Repurchase Program) plus (c) the
aggregate Net Book Value of such Vehicle, if such Vehicle was returned
to the applicable Manufacturer and such Manufacturer paid the
Repurchase Price during the Related Month to a Lessee minus (d) any
amount received by the Lessor or the Trustee, and deposited into the
Collection Account, during the Related Month from the applicable
Manufacturer as the Repurchase Price for the repurchase of such
Vehicle or from a third party other than a Manufacturer for the
purchase of such Vehicle plus (e) the aggregate amount of Termination
Payments that became due during the Related Month with respect to such
Vehicle plus (f) the aggregate amount of Repurchase Price Interest
that became due during the Related Month with respect to such Vehicle.

"Monthly Supplemental Rent" with respect to each Due Date
shall be equal to (x) the accrued interest on all Series of Notes for
the Related Month, plus (y) the Carrying Charges for the Related
Month, minus (z) the aggregate of all Monthly Variable Rent accrued
with respect to the Related Month for all Vehicles.

"Monthly Variable Rent" with respect to each Due Date and with
respect to each Vehicle shall equal the sum of (a) an amount equal to
the Net Book Value of such Vehicle during the Related Month multiplied
by the VFR for a one year interest period, multiplied by a fraction,
the numerator of which shall be 30 and the denominator of which shall
be 360 and (b) the product of (i) an amount equal to (x) all Carrying
Charges for the Related Month less (y) any accrued earnings on
Permitted Investments in the Collection Account which are available
for distribution on the last Business Day of the Related Month and
(ii) a fraction, the numerator of which is the Net Book Value of such
vehicle and the

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<PAGE> 16

denominator of which is the Net Book Value of all Vehicles. In the
event the Vehicle Lease Commencement Date occurs with respect to such
Vehicle on a day other than the last day of a Related Month, the
Monthly Variable Rent for such Vehicle shall be equal to the product
of (a) the Monthly Variable Rent otherwise payable with respect to
such Vehicle, multiplied by (b) a fraction the numerator of which is
12 and the denominator of which is 360, multiplied by (c) the number
of days in such Related Month from, after and including such Vehicle
Lease Commencement Date through and including the last day of such
Related Month. In the event the Vehicle Lease Expiration Date occurs
with respect to such Vehicle during a Related Month, the Monthly
Variable Rent for such Vehicle shall be equal to the product of (a)
the Monthly Variable Rent otherwise payable with respect to such
Vehicle for the Related Month, multiplied by (b) a fraction the
numerator of which is 12 and the denominator of which is 360,
multiplied by (c) the number of days in such Related Month from, after
and including the first day of such Related Month through and
including the Vehicle Lease Expiration Date.

"Rent" means Monthly Base Rent, Monthly Variable Rent and
Monthly Supplemental Rent.

"VFR" for any period, is an interest rate equal to (i) the
amount of interest accrued during such period with respect to all
Series of Notes divided by (ii) the average daily Invested Amounts of
all Series of Notes during such period.

4.2. Payment of Rent. On each Due Date:

4.2.1. Monthly Base Rent. Each Lessee shall pay to the Lessor all
Monthly Base Rent that has accrued during the Related Month with respect to
each Vehicle leased hereunder by such Lessee;

4.2.2. Monthly Variable Rent. Each Lessee shall pay to the Lessor
all Monthly Variable Rent that has accrued during the Related Month with
respect to each Vehicle leased hereunder by such Lessee; and

4.2.3. Monthly Supplemental Rent. Each Lessee shall pay such
Lessee's Share of the Monthly Supplemental Rent that has accrued during the
Related Month less any earnings on Permitted Investments not taken into account
in the calculation of Monthly Variable Rent.

4.3. Late Payment. In the event the relevant Lessee fails to remit
payment of any amount due on or before the Due Date, the

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<PAGE> 17

amount not paid will be considered delinquent and such Lessee will pay a late
charge equal to the VFR plus 1%, times the delinquent amount for the period
from the Due Date until such delinquent amount is received by the Trustee.

4.4. Net Lease. THIS AGREEMENT SHALL BE A NET LEASE, AND EACH
LESSEE'S OBLIGATION TO PAY ALL RENT AND OTHER SUMS HEREUNDER SHALL BE ABSOLUTE
AND UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY ABATEMENT OR REDUCTION FOR
ANY REASON WHATSOEVER. The obligations and liabilities of each 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
each Lessee to reject vehicles pursuant to Section 2.2 hereof) for any reason,
including without limitation: (i) any defect in the condition, merchantability,
quality or fitness for use of the Vehicles or any part thereof; (ii) any damage
to, removal, abandonment, salvage, loss, scrapping or destruction of or any
requisition or taking of the Vehicles or any part thereof; (iii) any
restriction, prevention or curtailment of or interference with any use of the
Vehicles or any part thereof; (iv) any defect in or any Lien on title to the
Vehicles or any part thereof; (v) any change, waiver, extension, indulgence or
other action or omission in respect of any obligation or liability of the
relevant Lessee or the Lessor; (vi) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to the relevant Lessee, the Lessor or any other Person, or any action
taken with respect to this Agreement by any trustee or receiver of any Person
mentioned above, or by any court; (vii) any claim that the relevant Lessee has
or might have against any Person, including without limitation the Lessor;
(viii) any failure on the part of the Lessor to perform or comply with any of
the terms hereof or of any other agreement; (ix) any invalidity or
unenforceability or disaffirmance of this Agreement 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 relevant Lessee or otherwise; (x) any insurance
premiums payable by the relevant Lessee with respect to the Vehicles; or (xi)
any other occurrence whatsoever, whether similar or dissimilar to the
foregoing, whether or not the relevant Lessee shall have notice or knowledge of
any of the foregoing and whether or not foreseen or foreseeable. This
Agreement shall be noncancelable by the Lessees and, except as expressly
provided herein, each Lessee, to the extent permitted by law, waives all rights
now or hereafter conferred by statute or otherwise to quit, terminate or
surrender this Agreement, or to any diminution or reduction of Rent payable by
each Lessee hereunder. All payments by each Lessee made hereunder shall be
final (except to the extent of adjustments provided for herein), absent
manifest error and, except as otherwise provided herein, each Lessee shall not
seek to recover any such payment or any part thereof for any reason whatsoever,

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<PAGE> 18

absent manifest error. If for any reason whatsoever this Agreement shall be
terminated in whole or in part by operation of law or otherwise except as
expressly provided herein, each Lessee shall nonetheless pay an amount equal to
each Rent payment at the time and in the manner that such payment would have
become due and payable under the terms of this Agreement as if it had not been
terminated in whole or in part. All covenants and agreements of each Lessee
herein shall be performed at its cost, expense and risk unless expressly
otherwise stated.

5. INSURANCE. Each Lessee represents that it shall at all times
maintain insurance coverage in force as follows:

5.1. Personal Injury and Damage. Insurance coverage (i) in an amount
not less than $10,000,000 per occurrence with respect to personal injury and
damage claims arising from the use of the Vehicles, except that with respect to
Vehicles used in connection with any member of the Lessee Group's San Diego
operations, the Lessee Group will be permissively uninsured (i.e., the Lessee
Group will self-insure) under California law up to the first $35,000 of
liability per occurrence, (ii) in respect of the Lessee Group's San Diego
operations, in an amount not less than $10,000,000 per occurrence for damages
arising from its employees' use of Vehicles and negligent maintenance of
Vehicles, and (iii) in respect of the Lessee Group's San Diego operations, in
an amount not less than $1,000,000 per occurrence for damages arising out of
negligent entrustment (less a $35,000 deductible in respect of negligent
entrustment).

5.2. Delivery of Certificate of Insurance. Within 10 days after the
date the first Series of Notes is issued (or, with respect to any additional
party becoming a "Lessee" hereunder pursuant to the provisions of Section 24
hereof, within 10 days after such party becomes a "Lessee," hereunder), the
Lessee Group shall deliver to the Lessor a certificate(s) of insurance naming
the Lessor and the Trustee as additional insureds as to the items required by
Section 5.1 hereinabove. Such insurance shall not be changed or canceled
except as provided below in Section 5.3.

5.3. Changes in Insurance Coverage. No changes shall be made in any
of the foregoing insurance unless the prior written consent of the Lessor and
the Trustee are first obtained. The Lessor may grant or withhold its consent
to any proposed change in such insurance in its sole discretion. The Trustee
shall be required to grant its consent to any proposed change in such insurance
upon compliance with the following conditions:

(i) The Lessee Group shall deliver not less than 30 days
written notice of any proposed change in such insurance to the
Trustee, which notice shall contain a certification of a reputable
insurance broker that is not affiliated with

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<PAGE> 19

any member of the Lessee Group that the insurance program maintained
by the Lessee Group (after the taking effect of such proposed change)
comports with industry standards for persons engaged in the rental car
business and having net worth and operating income similar to that of
the Lessee Group; and

(ii) The Lessee Group shall furnish to the Trustee a letter
from each Rating Agency with respect to each outstanding Series of
Notes to the effect that such proposed change will not cause a
reduction in or a withdrawal of such rating.

6. RISK OF LOSS AND CASUALTY OBLIGATION.

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

6.2. Casualty. If a Vehicle becomes a Casualty, then the Lessee that
is leasing such Vehicle will (i) promptly notify the Lessor thereof and (ii)
promptly, but in no event more than fifteen (15) days after such Vehicle
becomes a Casualty, pay to the Lessor the Net Book Value of such Vehicle. Upon
payment by the Lessee to the Lessor of the Net Book value of any Vehicle that
has become a Casualty (i) the Lessor shall cause title to such Vehicle to be
transferred to the relevant Lessee to facilitate liquidation of such Vehicle by
the Lessee, (ii) such Lessee shall be entitled to any physical damage insurance
proceeds applicable to such vehicle, and (iii) the Lien of the Trustee on such
Vehicle shall be released by the Servicer.

7. VEHICLE USE. So long as no Lease Event of Default has occurred
and so long as no Lessee Partial Wind-Down Event has occurred with respect to
the relevant Lessee (subject, however, to Section 2.6 hereof), such Lessee may
use Vehicles leased hereunder in the regular course of business of such Lessee.
Such use shall be confined primarily to the United States, with limited use in
Canada and Mexico; provided, however, that the principal place of business or
rental office of such Lessee with respect to the Vehicles is located in the
United States. The relevant Lessee shall promptly and duly execute, deliver,
file

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<PAGE> 20

and record all such documents, statements, filings and registrations, and take
such further actions as the Lessor, 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 Vehicles and the Certificates of Title as
against such Lessee or any third party in any applicable jurisdiction and to
establish, perfect and maintain the Trustee's lien on the Vehicles and the
Certificates of Title as a perfected first lien in any applicable jurisdiction.
Each Lessee may, at the relevant Lessee's sole expense, change the place of
principal location of any Vehicles. Notwithstanding the foregoing, no change
of location shall be undertaken unless and until (i) all actions necessary to
maintain the Lien of the Trustee on such Vehicles and the Certificates of Title
with respect to such Vehicles shall have been taken and (ii) all legal
requirements applicable to such Vehicles shall have been met or obtained.
Following a Lease Event of Default, Lessee Partial Wind-Down Event or
Manufacturer Event of Default, and upon the Lessor's request, the relevant
Lessee shall advise 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.
Each Lessee shall use reasonable precautions to prevent loss or damage to
Vehicles. Each Lessee shall comply with all applicable statutes, decrees,
ordinances and regulations regarding acquiring, titling, registering, leasing,
insuring and disposing of Vehicles and shall take reasonable steps to ensure
that operators are licensed. Each Lessee and the Lessor agree that each Lessee
shall perform, at its own expense, such Vehicle preparation and conditioning
services with respect to Vehicles purchased by the Lessor from the
Manufacturers as are customary. The Lessor or the Trustee or any authorized
representative of the Lessor or the Trustee may during reasonable business
hours from time to time, without disruption of each Lessee's business, subject
to applicable law, inspect Vehicles and registration certificates, Certificates
of Title and related documents covering Vehicles wherever the same be located.
Each Lessee shall not sublease any Vehicles, nor shall such Lessee assign any
right or interest herein or in any Vehicles; provided, however, that the
foregoing shall not be deemed to prohibit the Lessees from renting Vehicles to
third party customers in the ordinary course of their car rental businesses.

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<PAGE> 21

interests in the Vehicles without consent of the relevant Lessee; provided,
however, that if any such Liens would interfere with the rights of such Lessee
under this Agreement, the Lessor must obtain the prior written consent of such
Lessee. Each Lessee acknowledges that the granting of Liens and the taking of
other actions pursuant to the Indenture and the Related Documents does not
interfere with the rights of such Lessee under this Agreement.

9. NON-DISTURBANCE. So long as each Lessee satisfies its obligations
hereunder, its quiet enjoyment, possession and use of the Vehicles will not be
disturbed during the Term subject, however, to Section 2.6 hereof and except
that the Lessor and the Trustee each retains the right but not the duty, to
inspect the Vehicles without disturbing the ordinary conduct of such Lessee's
business. Upon the request of the Lessor or the Trustee from time to time,
each Lessee will make reasonable efforts to confirm to the Lessor and the
Trustee the location, mileage and condition of each Vehicle and to make
available for the Lessor's or the Trustee's inspection within a reasonable time
period, not to exceed 45 days, the Vehicles at the location where the Vehicles
are normally domiciled. Further, each Lessee will, during normal business
hours and with a notice of 3 Business Days, make its records pertaining to the
Vehicles available to the Lessor or the Trustee for inspection at the location
where the Lessee's records are normally domiciled.

10. REGISTRATION: LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES.
The Lessee Group, at its expense, shall be responsible for proper registration
and licensing of Vehicles, and titling of Vehicles in the name of the Lessor
(with the Lien of the Trustee noted thereon) and, where required, shall have
Vehicles inspected by any appropriate governmental authority; provided,
however, that notwithstanding the foregoing, possession of all Certificates of
Title shall at all time remain with the Servicer in accordance with the
provisions of the Indenture. The Lessee leasing such Vehicle shall be
responsible for the payment of 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 relevant Lessee's
operation of Vehicles, and any such amounts paid by the Lessor, in its
discretion, on the relevant Lessee's behalf will be reimbursed within 30 days
of the Lessor notifying such Lessee of such payment. The Lessor agrees to
execute a power of attorney in the form of Attachment B hereto (each, a "Power
of Attorney"), and such other documents as may be necessary in order to allow
the Lessees to title, register and dispose of the Vehicles; provided, however,
that possession of all Certificates of Title shall at all times remain with the

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<PAGE> 22

Servicer in accordance with the provisions of the Indenture and each Lessee
acknowledges and agrees that it has no right, title or interest in or with
respect to any Certificate of Title. Notwithstanding anything herein to the
contrary, the Lessor may terminate such Power of Attorney as provided in
Section 18 hereof.

11. MAINTENANCE AND REPAIRS. Each Lessee shall pay for all
maintenance and repairs to keep Vehicles in good working order and condition,
and will maintain Vehicles as required in order to keep the Manufacturer's
warranty in force. Each Lessee will return Vehicles to an authorized
Manufacturer facility or the relevant Lessee's Manufacturer authorized warranty
station for warranty work. Each Lessee will comply with any Manufacturer's
recall of any Vehicle. Each Lessee will 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. Any such expenses not paid
by, or on behalf of, the relevant Lessee may, after 30 days notice to such
Lessee, be paid by the Lessor and any expenses incurred by the Lessor on such
Lessee's behalf for maintenance, repair, operation or use of Vehicles by such
Lessee will be promptly reimbursed (in any event no later than the next monthly
Due Date following such notice) by such Lessee to the Lessor in the amount paid
by the Lessor. Each Lessee shall not make any material alterations to any
vehicles without the prior consent of the Lessor. Any improvements or
additions to any Vehicles shall become and remain the property of the Lessor,
except that any addition to Vehicles made by the relevant Lessee shall remain
the property of such Lessee if it can be disconnected from Vehicles without
impairing the functioning of such Vehicles or its resale value, excluding such
addition.

12. VEHICLE WARRANTIES.

12.1. No Lessor Warranties. EACH LESSEE ACKNOWLEDGES THAT THE LESSOR
IS NOT THE MANUFACTURER, THE AGENT OF THE MANUFACTURER, OR THE DISTRIBUTOR OF
THE VEHICLES LEASED HEREUNDER. THE LESSOR MAKES NO WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, AS TO THE FITNESS, SAFENESS, DESIGN, MERCHANTABILITY,
CONDITION, QUALITY, CAPACITY OR WORKMANSHIP OF THE LEASED VEHICLES NOR ANY
WARRANTY THAT THE LEASED VEHICLES WILL SATISFY THE REQUIREMENTS OF ANY LAW OR
ANY CONTRACT SPECIFICATION, AND AS BETWEEN THE LESSOR AND EACH LESSEE, EACH
LESSEE AGREES TO BEAR ALL SUCH RISKS AT ITS SOLE COST AND EXPENSE. EACH LESSEE
SPECIFICALLY WAIVES ALL RIGHTS TO MAKE CLAIMS AGAINST THE LESSOR AND ANY LEASED
VEHICLE FOR BREACH OF ANY WARRANTY OF ANY KIND WHATSOEVER AND, AS TO THE
LESSOR, EACH LESSEE LEASES THE LEASED VEHICLES "AS IS." IN NO EVENT SHALL THE
LESSOR BE LIABLE FOR SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, WHATSOEVER
OR HOWSOEVER CAUSED.

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<PAGE> 23

12.2. Manufacturer's Warranties. If a Vehicle is covered by a
Manufacturer's warranty, each Lessee, during the Vehicle Term, shall have the
right to make any claims under such warranty which the Lessor could make.

13. VEHICLE USAGE GUIDELINES AND RETURN.

13.1. Usage. As used herein "vehicle turn-in condition" with respect
to each Vehicle will be determined in accordance with the related Repurchase
Program. Vehicles not meeting the applicable Repurchase Program's vehicle
turn- in condition guidelines will be purchased by the relevant Lessee in
accordance with the Casualty procedure set forth in Section 6.2.

13.2. Return. Each Lessee will return each Vehicle (other than a
Casualty) to the nearest related Manufacturer official auction or other
facility designated by such manufacturer at the relevant Lessee's sole expense.
Each Lessee agrees that the Vehicles will be in vehicle turn-in condition as
specified in the applicable Repurchase Program. Any rebates or credits
applicable to the unexpired term of any license plates for a Vehicle shall
inure to the benefit of the relevant Lessee.

13.3. Termination Payments. Upon receipt of payment of the
Repurchase Price of each Vehicle from the Manufacturer (or the receipt of
payment of the Repurchase Price of each Vehicle through an auction conducted by
or through a Manufacturer), the Lessor will charge the relevant Lessee for any
Excess Damage Charges, Excess Mileage Charges or early turnback surcharges as
determined by the Manufacturer or its agent in accordance with the applicable
Repurchase Program (any such charges are referred to as "Termination Payment").
The provisions of this Section 13.3 will survive the expiration or earlier
termination of the Term.

13.4. Repurchase Price Interest. The applicable Lessee shall pay to
the Lessor, as part of the Monthly Base Rent, interest accrued at a rate equal
to the VFR on the Repurchase Price of each Vehicle for the period between the
Turnback Date for such Vehicle and receipt of such Repurchase Price by the
Lessor from the Manufacturer ("Repurchase Price Interest"). The provisions of
this Section 13.4 will survive the expiration or earlier termination of the
Term.

14. DISPOSITION PROCEDURE. Each Lessee will comply with the
requirements of law and the requirements of the Repurchase Programs in
connection with, among other things, the delivery of Certificates of Title and
documents of transfer signed as necessary, signed Condition Report, and signed
odometer statement to be submitted with the Vehicles and accepted by the
Manufacturer or its agent at the time of Vehicle return. If a

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<PAGE> 24

Vehicle is not returned to the Manufacturer and accepted by the Manufacturer
prior to the Maximum Term with respect to such Vehicle, the relevant Lessee
shall purchase such Vehicle for the appropriate Vehicle Purchase Price and pay
the Lessor such amount within fifteen (15) days after the end of the Maximum
Term (together with any Repurchase Price Interest accrued from the last day of
the Maximum Term to the date that such payment is received by the Lessor).

15. ODOMETER DISCLOSURE REQUIREMENT. Each Lessee agrees to comply
with all requirements of law and all Repurchase Program requirements in
connection with the transfer of ownership of any Vehicle by the Lessor,
including, without limitation, the submission of any required odometer
disclosure statement at the time of any such transfer of ownership.

16. GENERAL INDEMNITY.

16.1. Indemnity by the Lessee. Each member of the Lessee Group
agrees jointly and severally to indemnify and hold harmless the Lessor and the
Lessor's directors, officers, agents and employees (collectively, 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:

16.1.1. the ordering, delivery, acquisition, title on
acquisition, rejection, installation, possession, titling, retitling,
registration, re-registration, custody by the Lessee Group of title
and registration documents, use, nonuse, misuse, operation,
deficiency, defect, transportation, repair, control or disposition of
any Vehicle leased hereunder or to be leased hereunder pursuant to a
request by the relevant Lessee. 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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<PAGE> 25

operation, control, ownership or disposition of any Vehicle or
measured in any way by the value thereof or by the business of,
investment in, or ownership by the Lessor with respect thereto and
(ii) documentary, stamp, filing, recording, mortgage or other taxes,
if any, which may be payable by the Lessor in connection with this
Agreement or the other Related Documents;

16.1.3. any violation by the relevant member of the Lessee
Group of this Agreement or of any Related Documents to which such
member of the Lessee Group 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
such member of the Lessee Group with respect thereto or pursuant to
this Agreement;

16.1.4. all-out-of-pocket costs of the Lessor (including 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, 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;

16.1.5. all out-of-pocket costs and expenses (including
reasonable attorneys' fees and legal expenses) incurred by the Lessor,
the 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

16.1.6. all costs, fees, expenses, damages and liabilities
(including, without limitation, the fees and out-of-pocket expenses of
counsel) in connection with, or arising out of, any claim made by any
third party against the Lessor for any reason (including, without
limitation in connection with any audit or investigation conducted by
a Manufacturer under its Repurchase Program).

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<PAGE> 26

from the Lessor; provided, however, that, if so requested by the relevant
member of the Lessee Group, the Lessor shall submit to such member of the
Lessee Group a statement documenting any such demand for reimbursement or
prepayment. To the extent that the relevant member of the Lessee Group in fact
indemnities the Lessor under the indemnity provisions of this Agreement, such
member of the Lessee Group shall be subrogated to the Lessor's rights in the
affected transaction and shall have a right to determine the settlement of
claims therein. The foregoing indemnity as contained in this Section 16 shall
survive the expiration or earlier termination of this Agreement or any lease of
any Vehicle hereunder.

16.3. Defense of Claims. Defense of any claim referred to in this
Section 16 for which indemnity may be required shall, at the option and request
of the Indemnified Person, be conducted by the relevant member of the Lessee
Group. The relevant member of the Lessee Group will inform the Indemnified
Person of any such claim and of the defense thereof and will provide copies of
material documents relating to any such claim or defense to such Indemnified
Person upon request. Such Indemnified Person may participate in any such
defense at its own expense provided such participation does not interfere with
the relevant member of the Lessee Group's assertion of such claim or defense.
The relevant member of the Lessee Group agrees that no Indemnified Person will
be liable to such member of the Lessee Group for any claim caused directly or
indirectly by the inadequacy of any Vehicle for any purpose or any deficiency
or defect therein or the use or maintenance thereof or any repairs, servicing
or adjustments thereto or any delay in providing or failure to provide such or
any interruption or loss of service or use thereof or any loss of business, all
of which shall be the risk and responsibility of such member of the Lessee
Group. 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 either no
longer a party to (or entitled to receive the benefits of) this Agreement, or
was not a party to (or entitled to receive the benefits of) this Agreement at
its outset. Except as otherwise set forth herein, nothing herein shall be
deemed to require the relevant member of the Lessee Group to indemnify the
Lessor for any of the Lessor's acts or omissions which constitute gross
negligence or willful misconduct. This general indemnity shall not affect any
claims of the type discussed above which the relevant member of the Lessee
Group may have against the Manufacturer.

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<PAGE> 27

17. ASSIGNMENT

17.1. Right of the Lessor to Assign this Agreement. The Lessor shall
have the right to finance the acquisition and ownership of Vehicles by selling
or assigning its right, title and interest in moneys due from each Lessee and
any third party under this Agreement; provided, however, that any such sale or
assignment shall be subject to the rights and interest of the relevant Lessee
in such Vehicles, including but not limited to such Lessee's right of quiet and
peaceful possession of the Vehicles as set forth in Section 9 hereof, and under
this Agreement.

17.2. Limitations on the Right of the Lessee to Assign this
Agreement. Each 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 relevant
Lessee may rent such vehicles under the terms of such Lessee's normal daily
rental programs. Any purported assignment in violation of this Section 17.2
shall be void and of no force or effect. Nothing contained herein shall be
deemed to restrict the right of any Lessee to acquire or dispose of, by
purchase, lease, financing, or otherwise, motor vehicles that are not subject
to the provisions of this Agreement.

18. DEFAULT AND REMEDIES THEREFOR.

18.1. 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:

18.1.1. there occurs (i) a default in the payment of any
Monthly Base Rent and the continuance thereof for a period of five
days, (ii) a default in the payment of any Monthly Variable Rent or
Monthly Supplemental Rent and the continuance thereof for five days or
(iii) a default and continuance thereof for five Business Days after
notice thereof by the Lessor or the Trustee to the Lessee Group in the
payment of any amount payable under this Agreement (other than amounts
described in clause (i) or (ii) or above);

18.1.2. any unauthorized assignment or transfer of this
Agreement by any member of the Lessee Group occurs;

18.1.3. the failure, in any material respect, of the Lessee
Group to maintain, or cause to be maintained, insurance as required in
Section 5 or Section 31.3;

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<PAGE> 28

18.1.4. subject to the provisions of Section 20 hereof
regarding Lessee Partial Wind-Down Events, the failure of the Lessee
Group to observe or perform any other material covenant, condition,
agreement or provision hereof, including, but not limited to, usage,
and maintenance, and such default continues for more than thirty (30)
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 or the Trustee to
such Lessee; provided, however, that if such failure cannot reasonably
be cured within such thirty (30) day period, no Lease Event of Default
shall result therefrom so long as, within such thirty (30) day period,
such Lessee (i) commences to cure same, (ii) delivers written notice
to the Lessor and the Trustee notifying the Lessor and the Trustee of
such default and setting forth the steps such Lessee intends to take
in order to cure such default and (iii) thereafter diligently
prosecutes such cure to completion and completely cures such default
on or before the fiftieth (50th) day after the earlier of the dates
set forth in clause (a) and clause (b) above.

18.1.5. subject to the provisions of Section 20 hereof
regarding Lessee Partial Wind-Down Events, if any representation or
warranty made by the Lessee Group herein proves untrue in any material
respect as of the date of the issuance or making thereof and is not
cured within 30 days after notice thereof from the Lessor or the
Trustee to the Lessee Group; or

18.1.6. subject to the provisions of Section 20 hereof
regarding Lessee Partial Wind-Down Events, an Event of Bankruptcy
occurs with respect to any member of the Lessee Group.

18.1.7. a Lease Event of Default occurs under any
Non-Repurchase Vehicle Lease between the Lessor and the Lessees.

18.2. Effect of Lease Event of Default. If (i) a Lease Event of
Default described in Section 18.1.1, 18.1.2 or 18.1.6 shall occur, then the
Monthly Base Rent (calculated as if all Vehicles had become a Casualty for the
Related Month), the Monthly Variable Rent (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) and the Monthly Supplemental Rent
(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) shall,
automatically, without further action by the Lessor or the Trustee, become
immediately due and payable or (ii) any other Lease Event of Default or any
Liquidation Event of Default shall

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<PAGE> 29

occur, the Lessor or the Trustee may declare the Rent (calculated as described
in clause (i) above) to be due and payable, whereupon such Rent (as so
calculated) shall, subject to Section 18.5, become immediately due and payable.

18.3. Rights of Lessor Upon Lease Event of Default, Liquidation Event
of Default or Limited Liquidation Event of Default. If a Lease Event of
Default, Limited Liquidation Event of Default or Liquidation 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 Group (or such
member(s) thereof against which the Lessor determines to exercise its
remedies hereunder) of the applicable covenants and terms of this
Agreement or to recover damages for the breach hereof calculated in
accordance with Section 18.5; or

(ii) By notice in writing to the Lessee Group (or such
member(s) thereof against which the Lessor determines to exercise its
remedies hereunder) following the occurrence of a Lease Event of
Default, terminate this Agreement in its entirety (or in respect only
of the applicable member(s) thereof) and/or the right of possession
hereunder of the Lessee Group (or the applicable member(s) thereof) as
to the Vehicles, and the Lessor may direct delivery by the Lessee
Group (or the applicable member(s) thereof) of documents of title to
the Vehicles, whereupon all rights and interests of the Lessee Group
(or the applicable member(s) thereof) to the Vehicles will cease and
terminate (but the Lessee Group (or the applicable member(s) thereof)
will remain liable hereunder as herein provided, however, the Lessee
Group's liability will be calculated in accordance with Section 18.5);
and thereupon, the Lessor or its agents may peaceably enter upon the
premises of the applicable Lessee(s) 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
Group (or the applicable member(s) thereof), or their successors or
assigns, to use the Vehicles for any purpose whatsoever, and the
Lessor will, nevertheless, have a right to recover from the Lessee
Group (or the applicable member(s) thereof) any and all amounts which
under the terms of Section 18.2 (as limited by Section 18.5) of this
Agreement may be then due. The Lessor will provide the Lessee Group
(or the applicable member(s) thereof) with written notice of the place
and time of the sale at least five days prior to the proposed sale,
which shall be deemed commercially reasonable, and any Lessee may
purchase the Vehicle(s) at the sale. Each and every power and remedy
hereby specifically given to the

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<PAGE> 30

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 Lessees will in any case be
calculated in accordance with Section 18.5. All such powers and
remedies will be cumulative, and the exercise of one will not be
deemed a waiver of the right to exercise any other or others. No
delay or omission of the Lessor in the exercise of any such power or
remedy and no renewal or extension of any payments due hereunder will
impair any such power or remedy or will be construed to be a waiver of
any default or any acquiescence therein. Any extension of time for
payment hereunder or other indulgence duly granted to the Lessee Group
(or the applicable member(s) thereof) will not otherwise alter or
affect the Lessor's rights or the obligations hereunder of the Lessee
Group (or the applicable member(s) thereof). 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 Group (or such
member(s) thereof against which the Lessor determines to exercise its
remedies hereunder), terminate the Power of Attorney.

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

(i) If a Liquidation Event of Default, a Limited Liquidation
Event of Default or Manufacturer Event of Default shall have occurred
and be continuing, the Lessor and the Trustee, to the extent provided
in the Indenture, shall have the rights against the Guarantor, each
Lessee, each Manufacturer and the Collateral provided in the Indenture
(including, without limitation, the rights granted under Section 9.3
of the Indenture) upon a Liquidation Event of Default or Limited
Liquidation Event of Default, including the right to take possession
of all Vehicles immediately from the Lessees.

(ii) If the Guarantor or any Lessee shall default in the due
performance and observance of any of its obligations under Section
31.3, 31.4, 31.5(iv), 31.8, 32.3 or 32.4 hereof, and such default
shall continue unremedied for a period of 30 days after notice thereof
shall have been given to the Guarantor by the Lessor, the Lessor or
the Trustee,

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<PAGE> 31

as assignee of the Lessor's rights hereunder, shall have the ability
to exercise all rights, remedies, powers, privileges and claims of the
Guarantor or any Lessee against the Manufacturers under or in
connection with the Repurchase Programs with respect to (i) Vehicles
the Guarantor or any Lessee has determined to turn back to the
Manufacturers under such Repurchase Programs and (ii) whether or not
the Guarantor or any Lessee shall then have determined to turn back
such Vehicles, any Vehicles for which the applicable Repurchase Period
will end within one week or less.

(iii) Upon a default in the performance (after giving effect
to any grace periods provided herein) by the Guarantor or any Lessee
of its obligations hereunder to keep the Vehicles free of Liens and to
maintain the Trustee's Lien perfected on the Collateral, the Trustee
shall have the right to take actions reasonably necessary to correct
such default with respect to the subject Vehicles including the
execution of UCC financing statements with respect to Repurchase
Programs and other general intangibles and the completion of Vehicle
Perfection and Documentation Requirements on behalf of the Guarantor
or the Lessee as applicable.

(iv) Upon the occurrence of a Liquidation Event of Default or
Limited Liquidation Event of Default, the Guarantor and each Lessee
will return any Vehicles to the related Manufacturer in accordance
with the instructions of the Lessor. To the extent any Manufacturer
fails to accept any such Vehicles under the terms of the applicable
Repurchase Program, the Lessor shall have the right to otherwise
dispose of such Vehicles and to direct the Guarantor or the applicable
Lessee to dispose of such Vehicles in accordance with its
instructions. In addition, the Lessor shall have all of the rights,
remedies, powers, privileges and claims vis-a-vis the Guarantor or any
Lessee, necessary or desirable to allow the Trustee to exercise the
rights, remedies, powers, privileges and claims given to the Trustee
pursuant to Sections 9.2 and 9.3 of the Base Indenture and the
Guarantor and each Lessee acknowledges that it has hereby granted to
the Lessor all of the rights, remedies, powers, privileges and claims
granted to the Trustee pursuant to Article 9 of the Base Indenture and
that, under certain circumstances set forth in the Base Indenture, the
Trustee may act in lieu of the Lessor in the exercise of such rights,
remedies, powers, privileges and claims.

18.5. Measure of Damages. If a Lease Event of Default, Liquidation
Event of Default or Limited Liquidation Event of Default occurs and the Lessor
or the Trustee exercises the

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<PAGE> 32

remedies granted to the Lessor or the Trustee under this Article 18, the amount
that the Lessor shall be permitted to recover shall be equal to:

(i) all Rent under this Agreement (calculated as provided in
Section 18.2) plus

(ii) any damages and expenses, including reasonable
attorneys' fees and expenses (and including net after-tax losses of
federal and state income tax benefits to which the Lessor would
otherwise be entitled under this Agreement), which the Lessor or the
Trustee will have sustained by reason of the Lease Event of Default,
Liquidation Event of Default or Limited Liquidation Event of Default,
together with reasonable sums for such attorneys' fees and such
expenses as will be expended or incurred in the seizure, storage,
rental or sale of the Vehicles or in the enforcement of any right or
privilege hereunder or in any consultation or action in such
connection; plus

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

(iv) interest on amounts due and unpaid under this Agreement
at the VFR plus 1% from time to time computed from the date of the
Lease Event of Default, Liquidation Event of Default or Limited
Liquidation Event of Default or the date payments were originally due
the Lessor under this Agreement or from the date of each expenditure
by the Lessor which is recoverable from the Lessees pursuant to this
Section 18, as applicable, to and including the date payments are made
by the Lessees; minus

(v) an amount equal to all sums realized by the Lessor or the
Trustee from the liquidation of the Vehicles leased hereunder (either
by receipt of payment from the Manufacturers under Repurchase
Programs, from sales of Vehicles to third parties, or otherwise),
provided, however, if an Eligible Vehicle is turned back to the
Manufacturer under the applicable Repurchase Program and accepted for
repurchase by such Manufacturer (as evidenced by a Condition Report
indicating that such Vehicle conforms to the requirements for
repurchase under such Repurchase Program) the Lessor and the Trustee
shall be deemed to have received on account of this clause (y) an
amount equal to the Net Book Value of such Vehicle (less (a) any
Termination Payments and (b) Repurchase Price Interest (calculated
assuming that payment of the Repurchase Price will be received on the
60th day after the Turnback Date)) payable in respect of such
Vehicle).

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<PAGE> 33

18.6. Application of Proceeds. The proceeds of any sale or other
disposition pursuant to Section 18.2 or 18.3 shall be applied in the following
order: (i) to the reasonable costs and expenses incurred by the Lessor in
connection with such sale or disposition, including any reasonable costs
associated with repairing any Vehicles, and reasonable attorneys' fees in
connection with the enforcement of this Agreement, (ii) to the payment of
outstanding Rent (such payments to be applied first to outstanding Variable
Rent, then to outstanding Supplemental Rent and then to outstanding Base Rent),
(iii) to the payment of all other amounts due hereunder, and (iv) any remaining
amounts to the Lessor, or such Person(s) as may be lawfully entitled thereto.

19. MANUFACTURER EVENTS OF DEFAULT. Upon the occurrence of any of
the following events (each, a "Manufacturer Event of Default") with respect to
any Manufacturer (subject to the provisions of Section 21 hereof regarding
Eligibility Waiver Events), the relevant Lessee on behalf of the Lessor (a)
shall no longer place Vehicle Orders for additional Vehicles from such
Manufacturer (each, a "Defaulting Manufacturer") and (b) shall cancel any
Vehicle Order with such Defaulting Manufacturer to which a VIN has not been
assigned as of the date such Manufacturer Event of Default occurs:

19.1. The failure of such Manufacturer to pay any amount when due
pursuant to the related Repurchase Program with respect to a Vehicle turned in
to such Manufacturer; provided, however, that such failure continues for more
than ninety (90) days following the Turnback Date such that the aggregate of
any such amounts not paid are in the aggregate in excess of $2,000,000 net of
amounts that are the subject of a good faith dispute as evidenced in writing by
either a member of the Lessee Group or the Manufacturer questioning the
accuracy of the amounts paid or payable in respect of certain Vehicles tendered
for repurchase under a Repurchase Program.

19.2. The termination of such Manufacturer's Repurchase Program
(subject to the provisions of Section 21 hereof regarding Eligibility Waiver
Events).

19.3. The occurrence of an Event of Bankruptcy with respect to such
Manufacturer.

19.4. Such Manufacturer is no longer an Eligible Manufacturer or the
Repurchase Program of such Manufacturer shall no longer be an Eligible
Repurchase Program (subject, in each case, to the provisions of Section 21
hereof regarding Eligibility Waiver Events).

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<PAGE> 34

20. LESSEE PARTIAL WIND-DOWN EVENTS. Upon the occurrence of any of
the events described in Sections 18.1.4, 18.1.5, or 18.1.6 with respect to any
member (such member, the "Defaulting Lessee") of the Lessee Group other than
the Guarantor (a "Lessee Partial Wind-Down Event"), then such Defaulting Lessee
shall (a) no longer place Vehicle Orders for additional Vehicles from any
Manufacturer and (b) shall cancel vehicle Orders for Vehicles to which a VIN
has not been assigned by the Manufacturer as of the date such Lessee Partial
Wind-Down Event occurs. In the case of a Lessee Partial Wind-Down Event, the
Lessor may (i) exercise any right or remedy in respect only of such Defaulting
Lessee provided for pursuant to the provisions of Section 18.3 or 18.4 hereof
and (ii) terminate the Power of Attorney with respect to such Defaulting
Lessee; provided, however, if and for so long as no Lease Event of Default
shall have occurred (other than the Lease Event of Default that caused such
Lessee Partial Wind-Down Event), the Lessor shall not exercise any such remedy
or terminate such Power of Attorney in respect of any Lessee (other than the
Defaulting Lessee) solely as a result of such Lessee Partial Wind-Down Event.

21. ELIGIBILITY WAIVER EVENTS. In the event that a Manufacturer
Event of Default occurs by reason of an event stated in Section 19.2 or 19.4 (a
"Manufacturer Wind-Down Event"), then if (i) the Series Supplement for any
Series of Notes outstanding under the Indenture provides for the right of all
or less than all of the Noteholders to waive such Manufacturer Wind-Down Event
and (ii) the Requisite Noteholders in respect of any Series of Notes waives
such Manufacturer Wind-Down Event, the Lessees may continue to place Vehicle
Orders for the purchase of Vehicles from such Defaulting Manufacturer through
this Agreement; provided, however, the total Net Book Value of all Vehicles
leased hereunder through any Defaulting Manufacturer shall not exceed the
Maximum Defaulting Manufacturer Percentage of the Net Book Value of all
Vehicles leased under this Agreement. Any such waiver by any such Requisite
Noteholders shall be referred to as an "Eligibility Waiver Event".

22. CERTIFICATION OF TRADE OR BUSINESS USE. Each Lessee hereby
warrants and certifies, under penalties of perjury, that (1) such Lessee
intends that more than 50 percent of the use of the Vehicles listed on the
Supplemental Document(s), attached hereto and made a part hereof, which are
subject to this Agreement, are to be used in a trade or business of such
Lessee, and (2) such Lessee has been advised that it will not be treated as the
owner of the Vehicle(s) for federal income tax purposes.

23. SURVIVAL. In the event that, during the term of this Agreement,
any member of the Lessee Group becomes liable for the payment or reimbursement
of any obligations, claims or taxes pursuant to any provision hereof, such
liability will continue,

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<PAGE> 35

notwithstanding the expiration or termination of this Agreement, until all such
amounts are paid or reimbursed by such Lessee.

24. ADDITIONAL LESSEES. Any direct or indirect Subsidiary of the
Guarantor (each, a "Guarantor Subsidiary") shall have the right to become a
"Lessee" under and pursuant to the terms of this Agreement by complying with
the provisions of this Section 24. In the event a Guarantor Subsidiary desires
to become a "Lessee" under this Agreement, then the Guarantor and such
Guarantor Subsidiary shall execute (if appropriate) and deliver to the Lessor
and the Trustee:

(i) a Joinder in Lease Agreement in the form attached hereto
as Attachment C (each, a "Joinder in Lease");

(ii) the certificate of incorporation for such Guarantor
Subsidiary, duly certified by the Secretary of State of the
jurisdiction of such Guarantor Subsidiary's incorporation, together
with a copy of the by-laws of such Subsidiary Guarantor, duly
certified by a Secretary or Assistant Secretary of such Guarantor
Subsidiary;

(iii) copies of resolutions of the Board of Directors of such
Guarantor Subsidiary authorizing or ratifying the execution, delivery
and performance, respectively, of those documents and matters required
of it with respect to this Agreement, duly certified by the Secretary
or Assistant Secretary of such Guarantor Subsidiary;

(iv) a certificate of the Secretary or Assistant Secretary of
such Guarantor Subsidiary certifying the names of the individual or
individuals authorized to sign the Joinder in Lease Agreement and the
other Related Documents to be executed by it, together with samples of
the true signatures of each such individual;

(v) a good standing certificate for such Guarantor Subsidiary
in the jurisdiction of its incorporation and the jurisdiction of its
principal place of business;

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

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<PAGE> 36

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

(viii) an Officer's Certificate and an opinion of counsel
each stating that such joinder by such Guarantor Subsidiary complies
with this Section 24 and that all conditions precedent herein provided
for relating to such transaction have been complied with;

(ix) a statement from each of the Rating Agencies that such
Guarantor Subsidiary becoming a "Lessee" under this Agreement will not
cause a failure to meet the Rating Agency Condition; and

(x) any additional documentation that the Lessor or the
Trustee may require to evidence the assumption by such Guarantor
Subsidiary of the obligations and liabilities set forth in this
Agreement.

Upon satisfaction of the foregoing conditions and receipt by such Guarantor
Subsidiary of the applicable Joinder in Lease executed by the Lessor, such
Guarantor Subsidiary shall for all purposes be deemed to be a "Lessee" for
purposes of this Agreement and shall be entitled to the benefits and subject to
the liabilities and obligations of a Lessee hereunder.

25. TITLE. This is an agreement to lease only and title to Vehicles
will at all times remain in the Lessor's name. No member of the Lessee Group
will have any rights or interest in Vehicles whatsoever other than the right of
possession and use as provided by this Agreement.

26. GUARANTY.

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<PAGE> 37

under the guaranty contained in this Section 26 (this "Guaranty") will be
absolute and unconditional under all circumstances. This Guaranty shall be a
guaranty of payment and not of collection, and the Guarantor hereby agrees that
it shall not be required that the Lessor or the Trustee assert or enforce any
rights against any of the Lessees or any other person before or as a condition
to the obligations of the Guarantor pursuant to this Guaranty.

26.2. Scope of Guarantor's Liability. The Guarantor's obligations
hereunder are independent of the obligations of the Lessees, any other
guarantor or any other Person, and the Lessor may enforce any of its rights
hereunder independently of any other right or remedy that the Lessor may at any
time hold with respect to this Agreement or any security or other guaranty
therefor. Without limiting the generality of the foregoing, the Lessor may
bring a separate action against the Guarantor without first proceeding against
any of the Lessees, any other guarantor or any other Person, or any security
held by the Lessor, and regardless of whether the Lessees or any other
guarantor or any other Person is joined in any such action. The Guarantor's
liability hereunder shall at all times remain effective with respect to the
full amount due from the Lessees hereunder, notwithstanding any limitations on
the liability of the Lessees to the Lessor contained in any of the Related
Documents or elsewhere. The Lessor's rights hereunder shall not be exhausted
by any action taken by the Lessor until all Guaranteed obligations have been
fully paid and performed. The liability of the Guarantor hereunder shall be
reinstated and revived, and the rights of the Lessor shall continue, with
respect to any amount at any time paid on account of the Guaranteed Obligations
which shall thereafter be required to be restored or returned by the Lessor
upon the bankruptcy, insolvency or reorganization of any of the Lessees, any
other guarantor or any other Person, or otherwise, all as though such amount
had not been paid.

26.3. Lessor's Right to Amend this Agreement, Etc. The Guarantor
authorizes the Lessor, at any time and from time to time without notice and
without affecting the liability of the Guarantor hereunder, to: (a) alter the
terms of all or any part of the Guaranteed Obligations and any security and
guaranties therefor including without limitation modification of times for
payment and rates of interest; (b) accept new or additional instruments,
documents, agreements, security or guaranties in connection with all or any
part of the Guaranteed Obligations; (c) accept partial payments on the
Guaranteed Obligations; (d) waive, release, reconvey, terminate, abandon,
subordinate, exchange, substitute, transfer, compound, compromise, liquidate
and enforce all or any part of the Guaranteed Obligations and any security or
guaranties therefor, and apply any such security and direct the order or manner
of sale thereof (and bid and purchase

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<PAGE> 38

at any such sale), as the Lessor in its discretion may determine; (e) release
any Lessee, any guarantor or any other Person from any personal liability with
respect to all or any part of the Guaranteed Obligations; and (f) assign its
rights under this Guaranty in whole or in part.

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

(a) all statutes of limitation as a defense to any action
brought by the Lessor against the Guarantor;

(b) any defense based upon:

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

(ii) any act or omission of the Lessor or any other
Person that directly or indirectly results in the discharge or
release of any of the Lessees or any other Person or any of
the Guaranteed Obligations or any security therefor; or

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

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

(i) accelerate the Guaranteed Obligations;

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

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

(d) all rights of subrogation, all rights to enforce any
remedy that the Lessor now or hereafter has against any Lessee or any
other Person, and any benefit of, and right to

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<PAGE> 39

participate in, any security now or hereafter held by the Lessor with
respect to the Guaranteed Obligations;

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

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

(g) all other rights and defenses the assertion or exercise
of which would in any way diminish the liability of the Guarantor
hereunder.

26.5. Lessees' Obligations to Guarantor and Guarantor's
Obligations to Lessees Subordinated. Until all of the Guaranteed Obligations
have been paid in full, the Guarantor agrees that all existing and future
debts, obligations and liabilities of the Lessees to the Guarantor or the
Guarantor to any of the Lessees (hereinafter collectively referred to as
"Subordinated Debt") shall be and hereby are expressly subordinated to the
Guaranteed Obligations on the terms set forth in clauses (a) through (e) below,
and the payment thereof is expressly deferred in right of payment to the prior
payment in full of the Guaranteed Obligations. For purposes of this Section
26.5, to the extent the Guaranteed Obligations consist of the obligation to pay
money, the Guaranteed Obligations shall not be deemed paid in full unless and
until paid in full in cash.

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

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

(ii) any payment by, or distribution of assets of,
the Guarantor or such Lessee of any kind of character, whether
in cash, property or securities, to which such Lessee or the
Guarantor would be entitled except for this subordination
shall be paid or delivered by the Person making such payment
or distribution, whether a trustee in bankruptcy, a

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<PAGE> 40

receiver or liquidating trustee, or otherwise, directly to the holders
of the Guaranteed Obligations to be held as additional security for
the Guaranteed Obligations in an interest bearing account until the
Guaranteed Obligations have been paid in full; and

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

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

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

(d) Nothing express or implied herein shall give any Person
other than the Lessees, the Lessor, the Trustee and the Guarantor any
benefit or any legal or equitable right, remedy or claim hereunder.

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

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<PAGE> 41

26.6. Guarantor to Pay Lessor's Expenses. The Guarantor agrees to
pay to the Lessor, on demand, all costs and expenses, including attorneys' and
other professional and paraprofessional fees, incurred by the Lessor in
exercising any right, power or remedy conferred by this Guaranty, or in the
enforcement of this Guaranty, whether or not any action is filed in connection
therewith. Until paid to the Lessor, such amounts shall bear interest,
commencing with the Lessor's demand therefor, at the VFR plus 1%.

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

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

27. RIGHTS OF LESSOR ASSIGNED TO TRUSTEE. Notwithstanding anything
to the contrary contained in this Agreement, each member of the Lessee Group
acknowledges that the Lessor has assigned all of its rights under this
Agreement to the Trustee. Accordingly, each member of the Lessee Group 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 and the Guarantor's and the relevant Lessee's obligations
hereunder shall not be subject to any claim or defense which the
Guarantor or such Lessee may have against the Lessor (other than the
defense of payment actually made). Specifically, each member of the
Lessee Group agrees that, upon the occurrence of an Amortization Event
or, subject to the provisions of Section 20 hereof, a Lessee Partial
Wind-Down Event or, subject to the provisions of Section 19 hereof, a
Manufacturer Event of Default, the Trustee may exercise (for and on
behalf of the Lessor) any right or remedy against any member of the
Lessee Group provided for herein and no member of the Lessee Group
will

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<PAGE> 42

interpose as a defense that such claim should have been asserted by
the Lessor;

(ii) Upon the delivery by the Trustee of any notice to any
member of the Lessee Group stating that a Manufacturer Event of
Default, an Amortization Event or Lessee Partial Wind-Down Event with
respect to such Lessee has occurred, then such member of the Lessee
Group, will, if so requested by the Trustee, treat the Trustee or the
Trustee's designee for all purposes as the lessor hereunder and in all
respects comply with all obligations under this Agreement that are
asserted by the Trustee as the successor to the Lessor hereunder,
irrespective of whether such member of the Lessee Group has received
any such notice from the Lessor; provided, however, the Trustee, shall
in no event be liable to any Lessee for any action taken by it in its
capacity as successor to the Lessor other than actions that constitute
negligence or willful misconduct;

(iii) Each member of the Lessee Group acknowledges that
pursuant to the Indenture the Lessor has irrevocably authorized and
directed such member of the Lessee Group to, and each such member of
the Lessee Group shall, make payments of Rent hereunder (and any other
payments 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 such member of the Lessee Group to the Lessor
hereunder to the extent of such payments. Upon written notice to the
relevant member of the Lessee Group of a sale or assignment by the
Trustee of its right, title and interest in moneys due under this
Agreement to a successor Trustee, such member of the Lessee Group
shall thereafter make payments of all Rent (and any other payments
hereunder) to the party specified in such notice;

(iv) Upon request made by the Trustee at any time, each
member of the Lessee Group will take such actions as are requested by
the Trustee to assist the Trustee in maintaining the Trustee's
perfected security interest in the Vehicles leased under this
Agreement, the Certificates of Title with respect thereto, the
Collateral pursuant to the Indenture and the collateral granted to the
Lessor pursuant to Section 2(b) (such grant of collateral to be
effective as of the date of this Agreement, but only in the event that
this Agreement is recharacterized as described in such Section 2(b));
and

(v) This Agreement has been assigned by the Lessor to the
Trustee pursuant to the Indenture as collateral security only for all
Series of Notes that do not provide for

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<PAGE> 43

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 segregated collateral.

28. RIGHT OF LESSEE TO DELEGATE RIGHTS AND OBLIGATIONS HEREUNDER TO
GUARANTOR. If and for so long as the Guarantor is acting as the Servicer under
the Indenture, any Lessee shall be permitted to delegate to the Guarantor
(acting in such capacity) its rights and obligations under this Agreement,
including, without limitation, its rights and obligations under Sections 10 and
11 hereof. No such delegation of rights or obligations shall, however, operate
in any manner to release any such delegating Lessee from any of its obligations
under this Agreement.

29. MODIFICATION AND SEVERABILITY. The terms of this Agreement will
not be waived, altered, modified, amended, supplemented or terminated in any
manner whatsoever except by written instrument signed by the Lessor and each
Lessee and consented to in writing by 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.

30. CERTAIN REPRESENTATIONS AND WARRANTIES. Each Lessee represents
and warrants to the Lessor and the Trustee as to itself and as to each other
Lessee, and the Guarantor represents and warrants to the Lessor and the Trustee
as to itself and as to each Lessee, that as of the Closing Date with respect to
the first Series of Notes:

30.1. Due Organization, Authorization, etc. The Guarantor and each
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 such Lessee or the Guarantor, as applicable. The
execution, delivery and performance by the Guarantor and each 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, without limitation, shareholder approval, if
required), have received all necessary governmental and other consents and
approvals (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

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<PAGE> 44

termination or acceleration which does not have a Material Adverse Effect on
the Guarantor or such Lessee, as applicable. This Agreement and each other
Related Document to be executed and delivered by it are (or when executed and
delivered will be) the legal, valid, and binding obligations of the Guarantor
or such Lessee, enforceable against the Guarantor or such Lessee, as the case
may be, in accordance with their respective terms, subject to bankruptcy,
insolvency and other laws affecting the enforcement of creditors' rights. Each
Lessee is a direct or indirect Subsidiary of the Guarantor.

30.2. Financial Information; Financial Condition. All balance
sheets, all statements of operations, of stockholders' equity and of cash flow,
and other financial data (other than projections and the financial statements
referred to in clause (b) below) 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. 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 combined balance sheet of "Team Rental Group"
as of December 31, 1993 and the related statements of operations,
stockholders' deficit and cash flows for the fiscal year ending on
such date; and

(b) the unaudited pro forma consolidated balance sheets of
the Guarantor and the Lessees and statement of operations, accompanied
by an Officer's Certificate verifying the accuracy and completeness
thereof signed by an Authorized Officer of the Guarantor, for the 3
month period ending March 31, 1994.

30.3. Litigation. Except for 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 Guarantor's or such Lessee's knowledge,
threatened against the Guarantor or any Lessee which would, if adversely
determined, have a Material Adverse Effect on the Guarantor or such Lessee, as
applicable.

30.4. Liens. The Vehicles are free and clear of all Liens other than
(i) Permitted Liens, (ii) Liens in favor of the Trustee, and (iii) during only
the period commencing on such Closing Date and expiring on the date 60 days
thereafter, Liens in favor of lenders to the Lessor that have been paid in
full.

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<PAGE> 45

The Trustee has obtained, and will continue to obtain, as security for the
liabilities under the Indenture and the Notes, a first priority perfected Lien
on all Vehicles leased under this Agreement. Except as otherwise permitted
under the Indenture, all Vehicle Perfection and Documentation Requirements with
respect to all Vehicles on or after the date hereof have and will continue to
be satisfied.

30.5. Employee Benefit Plans. (a) During the twelve consecutive
month period prior to such Closing Date: (i) no steps have been taken by the
Guarantor or any Lessee 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 Guarantor or
any 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 Guarantor or such Lessee, as applicable, and (c)
neither the Guarantor nor any Lessee has any material contingent liability with
respect to any post-retirement benefits under a Welfare Plan, other than
liability for continuation coverage described in Subtitle B of Part 6 of Title
I of ERISA and liabilities which would not have a Material Adverse Effect upon
the Guarantor or such Lessee, as applicable.

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

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

30.8. Business Locations: Trade Names: Principal Places of Business
Locations. Schedule 30.8 lists each of the locations where each Lessee and the
Guarantor maintains a chief executive office, principal place of business, or
any records; and Schedule 30.8 also lists each Lessee's and the Guarantor's
legal name, each name under or by which each Lessee and the Guarantor conducts
its business, each state in which each Lessee and the Guarantor conducts
business and each state in which each Lessee and the Guarantor has its
principal place of business.

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<PAGE> 46

30.9. Taxes. Each of the Guarantor and each Lessee has filed all 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 the Closing Date, there is no
ongoing material audit (other than routine sales tax audits and other routine
audits) or, to the Guarantor's or any 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 adequate reserves have been established and are being maintained in
accordance with GAAP.

30.10. Governmental Authorization. The Guarantor and each 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 Guarantor or such
Lessee, as applicable.

30.11. Compliance with Laws. The Guarantor and each
Lessee: (i) is not in violation of any Requirement of Law, which violation
would have a Material Adverse Effect on the Guarantor or such Lessee, as
applicable, and to the best knowledge of the Guarantor and the Lessees, 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 true, correct
and complete in all material respects), except where failure to make such
filings would not have a Material Adverse Effect on the Guarantor or such
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
Guarantor or such Lessee, as applicable.

30.12. Eligible Vehicles. 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 (subject to the provisions of Section 21 hereof regarding
Eligibility Waiver Requirements).

30.13. 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

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<PAGE> 47

submitted by a 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.

31. CERTAIN AFFIRMATIVE COVENANTS. Each Lessee covenants and agrees
as to itself and as to each other Lessee, and the Guarantor covenants and
agrees as to itself and as to each Lessee that, until the expiration or
termination of this Agreement, and thereafter until the obligations of such
Lessee or the Guarantor under this Agreement and the Related Documents are
satisfied in full, unless at any time the Lessor and the Trustee shall
otherwise expressly consent in writing, it will (and, in the case of the
Guarantor, will cause each Lessee to):

31.1. 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 Guarantor and each Lessee (it being understood that
subject to Section 32.1(i) each Lessee shall remain a direct or indirect
wholly- owned Subsidiary of the Guarantor); (ii) be, and ensure that each
Lessee is, 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 Guarantor or such Lessee, as applicable; 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 Guarantor or such Lessee, as
applicable.

31.2. Books, Records and Inspections. (i) Maintain complete and
accurate books and records with respect to the Vehicles leased by it under this
Agreement; (ii) at any time and from time to time during regular business
hours, and with reasonable prior notice from the Lessor or the Trustee, permit
the Lessor or the Trustee (or such other person who may be designated from time
to time by the Lessor 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 Guarantor or such Lessee relating to the Vehicles
leased under this Agreement, including without limitation, in connection with
the Trustee's satisfaction of any requests of a Manufacturer performing an
audit under its Repurchase Program; and (iii) visit the office and properties
of the Guarantor or such Lessee for the purpose of examining such materials,
and to discuss matters relating to the Vehicles leased hereunder or the
Guarantor's or such Lessee's performance under this Agreement

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<PAGE> 48

with any of the officers or employees of the Guarantor or such Lessee having
knowledge of such matters.

31.3. Insurance. In addition to its obligations set forth in Section
5 hereof, each Lessee shall maintain or cause to be maintained, with
financially sound and reputable insurers satisfactory to the Lessor, insurance
with respect to their respective properties and businesses 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, and the Guarantor and the Lessee
shall, from time to time upon the Lessor's or the Trustee's reasonable request,
deliver to the Lessor and Trustee, copies of certificates describing all
insurance then in effect. All self-insurance maintained by any member of the
Lessee Group shall be maintained in a financially prudent manner.

31.4. Repurchase Programs. With respect to each Vehicle leased by
each Lessee (a) unless previously purchased by such Lessee pursuant to this
Agreement, turn in such Vehicle to the relevant Manufacturer within the
Repurchase Period therefor, (b) dispose of such Vehicle under the applicable
Repurchase Program according to its historical practice and in accordance with
the requirements of such Repurchase Program, and (c) comply with all of its
(and the Lessor's) obligations under the applicable Repurchase Program.

31.5. Reporting Requirements. Furnish, or cause to be furnished to
the Lessor:

(i) Audit Report. As soon as available and in any event
within one hundred ten days after the end of each fiscal year of the
Guarantor, a copy of the consolidated balance sheet of the Guarantor
and its Subsidiaries as at the end of such fiscal year, together with
the related statements of earnings, stockholders' equity and cash
flows for such fiscal year, prepared in reasonable detail and in
accordance with GAAP certified by Deloitte & Touche (or such other
independent certified public accountants of recognized national
standing as shall be selected by the Guarantor);

(ii) Quarterly Statements. As soon as available, but in any
event within 45 days after the end of each fiscal quarter (except the
fourth fiscal quarter) of the Guarantor, copies of the unaudited
consolidated balance sheet of the Guarantor 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

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<PAGE> 49

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 Guarantor as presenting fairly the financial condition
and results of operations of the Guarantor and its Subsidiaries
(subject to normal year-end adjustments);

(iii) Lease Events of Default; Wind-Down Events. As soon as
possible but in any event within two Business Days after the Guarantor
or any Lessee has knowledge of the occurrence of any Lease Event of
Default, Potential Lease Event of Default, Manufacturer Event of
Default, Potential Manufacturer Event of Default, Lessee Partial
Wind-Down Event or Potential Lessee Partial Wind-Down Event, a written
statement of an authorized Officer describing such event and the
action that the Guarantor or a Lessee, as the case may be, proposes to
take with respect thereto;

(iv) Monthly Vehicle Statements. On or before the third
Business Day prior to each Due Date, a monthly vehicle statement
(each, a "Monthly Vehicle Statement") in a form acceptable to the
Lessor, which shall specify (i) the vehicle identification numbers
(the "VIN") for the Vehicles leased hereunder during the Related Month
by such Lessee, (ii) the Capitalized Cost for such Vehicles, (iii) the
Net Book Value of such Vehicles as of the end of the Related Month,
(iv) those Vehicles that have been turned back to Manufacturers
pursuant to the applicable Repurchase Program during the Related Month
and the Repurchase Prices therefor, (v) those Vehicles that have
suffered a Casualty during the Related Month and their respective Net
Book Values, (vi) the aggregate Repurchase Prices scheduled to be
received by the Lessor during the Related Month from the
Manufacturers, (vii) the aggregate Depreciation Charges for all
Vehicles continuing in the possession of the Lessee, (viii) the total
amount of Monthly Base Rent and Monthly Variable Rent being paid on
such date, (ix) information with respect to such Lessee necessary for
the Servicer to compute the Aggregate Asset Amount as of the end of
the Related Month, (x) information with respect to such Lessee
necessary for the Servicer to compute the Monthly Supplemental Rent
for such Lessee with respect to the Related Month, and (xi) any other
charges owing from, and credits due to, the Lessee submitting such
Statement under this Agreement; and

(v) Other. Promptly, from time to time, such other
information, documents, or reports respecting the Vehicles leased
under this Agreement or the condition or operations,

- 44 -
<PAGE> 50

financial or otherwise, of the Guarantor or the Lessees as the Lessor
or the Trustee may from time to time reasonably request in order to
protect the interests of the Lessor or the Trustee under or as
contemplated by this Agreement or any other Related Document.

31.6. 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 with respect to which adequate reserves have been established, and
are being maintained, in accordance with GAAP if and so long as forfeiture of
any 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.

31.7. 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 Guarantor or such Lessee, as applicable.

31.8. Maintenance of Separate Existence. The Guarantor and each
Lessee acknowledges its receipt of a copy of that certain opinion letter issued
by Dechert Price & Rhoads, dated August 25, 1994 and addressing the issue of
substantive consolidation as it may relate to the Guarantor, each Lessee and
the Lessor. The Guarantor and each Lessee hereby agrees to maintain in place
all policies and procedures, and take and continue to take all action,
described in the factual assumptions set forth in such opinion letter and
relating to such Person.

31.9. Trustee as Lienholder. Concurrently with each leasing of a
Vehicle under this Agreement, the Servicer shall indicate on its computer
records that the Trustee as assignee of the Lessor is the holder of a Lien on
such Vehicle pursuant to the terms of the Indenture.

32. CERTAIN NEGATIVE COVENANTS. Until the expiration or termination
of this Agreement and thereafter until the obligations of each Lessee and the
Guarantor are paid in full, the Guarantor and each Lessee agrees that, unless
at any time the Lessor and the Trustee shall otherwise expressly consent in
writing, it will not (and, in the case of the Guarantor, will not permit any
Lessee to):

- 45 -
<PAGE> 51

merger or consolidation of any Subsidiary of the Guarantor with or into another
Subsidiary of the Guarantor, and (ii) a merger or consolidation of the
Guarantor into or with another entity if:

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

(b) the Guarantor 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 32.1 and that all conditions precedent herein provided
for relating to such transaction have been complied with; and

32.2. 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.

32.3. 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 or the Trustee or the Secured Parties and the following
Liens to the extent such liens in the aggregate would not materially adversely
affect the interests of the Lessor or the Trustee or the Secured Parties under
this Agreement or the Indenture or the likelihood of payment of Rent hereunder
or the Notes thereunder (herein collectively called the "Permitted Liens"): (i)
Liens for current taxes not delinquent or for taxes being contested in good
faith and by appropriate proceedings, and with respect to which adequate
reserves have been established, and are being maintained, in accordance with
GAAP, (ii) Liens, including judgment liens, arising in the ordinary course of
business being contested in good faith and by appropriate proceedings, and with
respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP, (iii) Liens incurred in the ordinary
course of business in connection with worker's compensation, unemployment
insurance or other forms of governmental insurance or benefits, and (iv)
mechanics', materialmen's, landlords', warehousemen's and carriers' Liens,

- 46 -
<PAGE> 52

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.

32.4. Use of Vehicles. Knowingly use or allow the Vehicles to be
used in any manner that would (i) make such Vehicles ineligible for repurchase
under an Eligible Repurchase Program (subject to the provisions of Section 21
hereof regarding Eligibility Waiver Events) or (ii) subject the Vehicles to
confiscation.

33. BANKRUPTCY PETITION AGAINST LESSOR. The Guarantor and each
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 Guarantor or any Lessee
takes action in violation of this Section 33, 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
Guarantor or any such Lessee against the Lessor or the commencement of such
action and raise the defense that the Guarantor or any such 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 counsel advises that it may
assert. The provisions of this Section 33 shall survive the termination of
this Agreement.

- 47 -
<PAGE> 53

Trustee and the Lessor to serve process in any other manner permitted by law or
preclude the Lessor 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 Guarantor and each Lessee hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may have 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 and any claim that any such
suit, action or proceeding brought in such a court has been brought in an
inconvenient forum.

35. 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 Guarantor and each Lessee and all
rights of the Lessor 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.

36. 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.

37. NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile transmission or
similar writing) and shall be given to such party, addressed to it, at its
address or telephone number set forth on the signature pages below, or at such
other address or telephone number as such party may hereafter specify for the
purpose by notice to the other party. In each case, a copy of all notices,
requests and other communications that are sent by any party hereunder shall be
sent to the Trustee and a copy of all notices, requests and other
communications that are sent by any Lessee or the Guarantor to the Guarantor or
any other Lessee that pertain to this Agreement shall be sent to the Lessor and
the Trustee. Copies of notices, requests and other communications delivered to
the Trustee and/or

- 48 -
<PAGE> 54

the Lessor pursuant to the foregoing sentence shall be sent to the following
addresses:

TRUSTEE: Bankers Trust Company
4 Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency
Group/Structured Finance
Telephone: (212) 250-6533
Fax: (212) 250-6439

LESSOR: Team Fleet Financing Corporation
5851 Lewis Road
Sandston, Virginia 23150
Attention: Donald J. Norwalk
Telephone: (804) 222-5310
Fax: (804) 222-8998

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

38. LIABILITY. Each member of the Lessee Group shall be held jointly
and severally liable for all of the obligations of each other member of the
Lessee Group hereunder.

39. TITLE TO REPURCHASE PROGRAMS IN LESSOR. Each Lessee, by its
execution hereof, acknowledges and agrees that (i) the Lessor is the sole owner
and holder of all right, title and interest in and to the Repurchase Programs
and (ii) such Lessee has no right, title or interest in any Repurchase Program.
To confirm the foregoing, each Lessee, by its execution hereof, hereby assigns
and transfers to the Lessor any rights that such Lessee may have in respect of
any Repurchase Programs.

40. HEADINGS. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.

41. 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.

42. EFFECTIVENESS. This Agreement shall become effective
concurrently with the issuance of the first Series of Notes.

- 49 -
<PAGE> 55

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:

TEAM FLEET FINANCING CORPORATION

By: Sanford Miller
-------------------------------
Sanford Miller
Chairman and Chief
Executive Officer

Address: 5851 Lewis Road
Sandston, Virginia 23150
Attention: Donald J. Norwalk
Telephone: (804) 222-5310
Telefax: (804) 222-8998

LESSEES:

TRANEX RENTALS OF NEW YORK, INC.

By: Sanford Miller
-------------------------------
Sanford Miller
President

Address: 875 Albany Shaker Road
Latham, New York 12110
Attention: Mr. Richard Sapia
Telephone: (518) 785-4716
Telefax: (518) 784-5872

CAPITAL CITY LEASING, INC.

By: Sanford Miller
-------------------------------
Sanford Miller
President

Address: 5851 Lewis Road
Sandston, Virginia 23150
Attention: Mr. Ken Carpenter
Telephone: (804) 222-5310
Telefax: (804) 222-8998

- 50 -
<PAGE> 56

LEE-AL, INC.

By: Sanford Miller
-------------------------------
Sanford Miller
Vice President

Address: 2585 Pacific Highway
San Diego, CA 92101
Attention: Mr. Steve Vaughn
Telephone: (619) 235-8313
Telefax: (619) 235-8734

WESTEAM ENTERPRISES, INC.

By: Sanford Miller
-------------------------------
Sanford Miller
President

Address: 2554 California Street
San Diego, CA 92103
Attention: Mr. Steve Vaughn
Telephone: (619) 235-8313
Telefax: (619) 235-8734

TEAM RENTAL OF PHILADELPHIA, INC.

By: Sanford Miller
-------------------------------
Sanford Miller
President

Address: Arrivals Road
Philadelphia Int'l
Airport
Philadelphia, PA 19153
Attention: Mr. John Umina
Telephone: (215) 492-9442
Telefax: (215) 492-8401

- 51 -
<PAGE> 57

TEAM RENTAL OF PITTSBURGH, INC.

By: Sanford Miller
------------------------------------
Sanford Miller
President

Address: Car Rental Access Road
Lot #6
Pittsburgh, PA 15231
Attention: Mr. Ashok Khambhla
Telephone: (412) 472-5083
Telefax: (412) 472-5084

TEAM RENTAL OF CINCINNATI, INC.

By: Sanford Miller
------------------------------------
Sanford Miller
President

Address: 2667 Donaldson Road
Hebron, Kentucky 41048
Attention: Mr. Joseph Collins
Telephone: (606) 767-3100
Telefax: (606) 282-1828

GUARANTOR:

TEAM RENTAL GROUP, INC.

By: Sanford Miller
------------------------------------
Sanford Miller
Chairman and Chief Executive
Officer

Address: 125 Basin Street, Suite 210
Daytona Beach, FL 32114
Attention: Mr. Sanford Miller
Telephone: (904) 238-7035
Telefax: (904) 238-7461

- 52 -
<PAGE> 58

SCHEDULE 1

Lessees on Date of Execution of Lease

TRANEX RENTALS OF NEW YORK, INC.
CAPITAL CITY LEASING, INC.
LEE-AL, INC.
WESTEAM ENTERPRISES, INC.
TEAM RENTAL OF PHILADELPHIA, INC.
TEAM RENTAL OF PITTSBURGH, INC.
TEAM RENTAL OF CINCINNATI, INC.

<PAGE> 59

SCHEDULE 2

Lessees Selling Lessee Acquired Vehicles
on Date of Execution of Lease

TRANEX RENTALS OF NEW YORK, INC.
CAPITAL CITY LEASING, INC.
LEE-AL, INC.
WESTEAM ENTERPRISES, INC.

<PAGE> 60

SCHEDULE 30.8

Business Locations
<TABLE>
<CAPTION>
STATES
STATE OF IN
PRINCIPAL WHICH
PLACE OF CONDUCTS
BUSINESS LOCATION BUSINESS BUSINESS
----------------- -------- --------
<S> <C> <C> <C>
TEAM RENTAL GROUP, INC. P.O. Box 15225 Florida Florida
1028 Dr. Mary McLoud Bethune Blvd.
Daytona Beach, Florida 32114

TRANEX RENTALS OF NEW YORK, INC. 875 Albany Shaker Road New York New York
Latham, New York 12110

Trade Names:

Budget Rent a Car of Albany

Budget Rent a Car of Rochester

CAPITAL CITY LEASING, INC. 5851 Lewis Road Virginia Virginia
Sandston, Virginia 23150

Trade Names:

Budget Rent a Car of Richmond

LEE-AL, INC. 2585 Pacific Highway California California
San Diego, California 92101

Trade Names:

Budget Rent a Car

Budget of San Diego

Budget Rent a Car of San Diego

WESTEAM ENTERPRISES, INC. 2554 California Street California California
San Diego, California 92103

</TABLE>

<PAGE> 61

<TABLE>
<CAPTION>
STATES
STATE OF IN
PRINCIPAL WHICH
PLACE OF CONDUCTS
BUSINESS LOCATION BUSINESS BUSINESS
----------------- -------- --------
<S> <C> <C> <C>
Trade Names;

Budget Car and Truck Rental
of San Diego County

Budget of San Diego County

Budget Car and Truck Rental

TEAM RENTAL OF PHILADELPHIA, INC. Arrivals Road Pennsylvania Pennsylvania
Pennsylvania International Airport
Pennsylvania, Pennsylvania 19153

Trade Names:

Budget Rent a Car of Pennsylvania

TEAM RENTAL OF PITTSBURGH, INC. Car Rental Access Road Pennsylvania Pennsylvania
Lot #6
Pittsburgh, Pennsylvania 15231

Trade Names:

Budget Rent a Car of Pittsburgh

TEAM RENTAL OF CINCINNATI, INC. 2667 Donaldson Road Kentucky Kentucky
Hebron, Kentucky 41048 Ohio

Trade Names:

Budget Rent a Car of Cincinnati

</TABLE>

- 2 -
<PAGE> 62

ATTACHMENT A

Vehicle Acquisition Schedule

1 Vehicle Group Number (Vehicle Model)
2 Vehicle Identification Number (VIN)
3 Vehicle Lease Commencement Date
4 Capitalized Cost
5 Monthly Base Rent
6 Garaging State

A-1
<PAGE> 63

ATTACHMENT B

FORM OF POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that Team Fleet Financing
Corporation does hereby make, constitute and appoint ______________________
___________-____________________________ its true and lawful
Attorney(s)-in-fact for it and in its name, stead and behalf, to execute any
and all documents pertaining to the titling of motor vehicles in the name of
Team Fleet Financing Corporation, the noting of the lien of Bankers Trust
Company, as trustee, as the first lienholder on certificates of title, the
licensing and registration of motor vehicles and the transfer of title to the
Manufacturer and to ______________. This power is limited to the foregoing and
specifically does not authorize the creation of any liens or encumbrances on
any of said motor vehicles.

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

IN WITNESS WHEREOF, Team Fleet Financing Corporation has
caused this instrument to be executed on its behalf by its Vice President and
Treasurer this ______ day of _________, 19__.

Team Fleet Financing Corporation

By: ___________________________
Sanford Miller
Chairman and Chief Executive
Officer

State of _____________ )
)
County of ____________ )

Subscribed and sworn before me, a notary public, in and for
said county and state, this _________ day of _________, 19__.

__________________________________
Notary Public

My Commission Expires:_____________

B-1
<PAGE> 64

ATTACHMENT C

FORM OF JOINDER IN LEASE

THIS JOINDER IN LEASE AGREEMENT (this "Joinder") is executed
as of ________________ __, 19__, by ________________, a ______________________
("Joining Party"), and delivered to Team Fleet Financing Corporation, a
Delaware corporation ("TFFC"), as lessor pursuant to the Master Motor Vehicle
Lease and Servicing Agreement, dated as of July 1, 1994 (as amended,
supplemented or otherwise modified from time to time, the "Lease"), among
TFFC, those direct or indirect subsidiaries of Team Rental Group, Inc., a
Delaware corporation ("Team") that are listed on Schedule 1 to the Agreement
and those that become party to the Agreement pursuant to the provisions of
Section 24 thereof (individually, a "Lessee" and, collectively, the "Lessees"),
and Team, as guarantor. Capitalized terms used herein but not defined herein
shall have the meanings provided for in the Agreement.

R E C I T A L S:

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

WHEREAS, the Joining Party desires to become a "Lessee" under
and pursuant to the Agreement.

NOW, THEREFORE, the Joining Party agrees as follows:

A G R E E M E N T:

1. The Joining Party hereby represents and warrants to and in
favor of TFFC and the Trustee that (i) the Joining Party is a direct or
indirect Subsidiary of Team, (ii) all of the conditions required to be
satisfied pursuant to Section 24 of the Agreement in respect of the Joining
Party becoming a Lessee thereunder have been satisfied, and (iii) all of the
representations and warranties contained in Section 30 of the Agreement with
respect to the Lessees are true and correct as applied to the Joining Party as
of the date hereof.

C-1
<PAGE> 65

2. The Joining Party hereby agrees to assume all of the
obligations of a "Lessee" under the Agreement and agrees to be bound by all of
the terms, covenants and conditions therein.

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

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

[Name of Joining Party]

By: ________________________
Name:
Title:

Accepted and Acknowledged by:

TEAM FLEET FINANCING CORPORATION

By: ___________________________
Name:
Title:

C-2
<PAGE> 66

ATTACHMENT D

FORM OF BILL OF SALE

IN CONSIDERATION OF the payment of $ ________________, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, [SELLER], a [state of incorporation] corporation (the
"Seller"), does hereby sell, assign, transfer, convey, grant, bargain, set
over, release, deliver and confirm unto Team Fleet Financing Corporation, a
Delaware corporation (the "Buyer"), its successors and assigns, forever, the
entire right, title and interest of the Seller in, to and under all the
vehicles listed and described in Schedule 1 attached hereto (the "Vehicles"),
the Seller's interest in Repurchase Programs with respect to the Vehicles, all
moneys due or to become due and all amounts received or receivable with respect
thereto and all proceeds thereof (collectively, the "Transferred Assets").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Base Indenture, dated as of July 1, 1994
among the Buyer, as issuer, Team Rental Group, Inc. ("Team"), as servicer and
as Team Interestholder and Bankers Trust Company, as trustee.

The Seller hereby constitutes and appoints the Buyer, its
successors and assigns, the true and lawful attorney of the Seller, with full
power of substitution, in the name of the Buyer or in the name of the Seller,
but for the benefit and at the expense of the Buyer, to collect, demand and
receive any and all Transferred Assets, to collect any accounts receivable
included in the Transferred Assets and to endorse in the name of the Seller any
checks or drafts received in payment thereof and to enforce by appropriate
proceedings any claim, right or title of any kind in or to the Transferred
Assets. The foregoing shall include, without limitation, the right to change
the holder of title on the certificates of title included within the
Transferred Assets. The Seller acknowledges that the foregoing powers are
coupled with an interest and shall be irrevocable by the Seller for any reason.

From and after the date hereof, upon request of the Buyer, the
Seller, at its own expense, shall do such further and other acts and execute
such further and other agreements, assignments, bills of sale, certificates
(including Certificates of Title), powers, instruments and other documents as
the Buyer may deem necessary, desirable or appropriate to vest in the Buyer or
further assure to the Buyer all right, title and interest of the Seller in, to
and under the Transferred Assets.

D-1
<PAGE> 67

IN WITNESS WHEREOF, the Seller has executed this Bill of Sale
as of ________________, 1994.

[SELLER]

By: ________________________
Name:
Title:

D-2
<PAGE> 68

SCHEDULE 1
TO BILL OF SALE

VEHICLES

VIN NUMBER NET BOOK VALUE

___________ ________________

Total: $
================

D-3

<PAGE> 1

EXHIBIT 4.18

TEAM FLEET FINANCING CORPORATION
AS LESSOR

TEAM RENTAL GROUP, INC.
AS GUARANTOR

Those Subsidiaries, Affiliates
and Non-Affiliates of Team Rental Group, Inc.
named on Schedule 1 hereto
as Lessees

MOTOR VEHICLE LEASE AGREEMENT
SERIES 1996-1

Dated as of December 1, 1996

<PAGE> 2

TABLE OF CONTENTS

Page
<S> <C> <C>
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2. GENERAL AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1. Acquisition of Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2. Right of Lessees to Act as Lessor's Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3. Payment of Capitalized Cost by Lessor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4. Non-liability of Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.5. Lessees' Rights to Purchase Vehicles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6. Disposition of Vehicles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.7. Limitations of the Acquisition of Certain
Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

3. TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.1. Vehicle Term: Repurchase Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.2. Vehicle Term: Non-Repurchase Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.3. The "Lease Commencement Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

4. RENT AND CHARGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2. Payment of Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.3. Late Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.4. Net Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

5. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1. Personal Injury and Damage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.2. Delivery of Certificate of Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.3. Changes in Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

6. RISK OF LOSS AND CASUALTY OBLIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.1. Risk of Loss Borne by Lessee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2. Casualty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

7. VEHICLE USE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

8. LIENS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

9. NON-DISTURBANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

10. REGISTRATION; LICENSE; TRAFFIC SUMMONSES;
PENALTIES AND FINES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

11. MAINTENANCE AND REPAIRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

12. VEHICLE WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
12.1. No Lessor Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
12.2. Manufacturer's Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

</TABLE>

<PAGE> 3

<TABLE>
<S> <C> <C>
13. REPURCHASE VEHICLE USAGE GUIDELINES AND RETURN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.1. Usage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.2. Return. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.3. Termination Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
13.4. Repurchase Price Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

14. DISPOSITION PROCEDURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

15. ODOMETER DISCLOSURE REQUIREMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

16. GENERAL INDEMNITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16.1. Indemnity by the Lessee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16.2. Reimbursement Obligation by
the Lessee Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
16.3. Defense of Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

17. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
17.1. Right of the Lessor to Assign
this Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
17.2. Limitations on the Right of the
Lessee to Assign this Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

18. DEFAULT AND REMEDIES THEREFOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
18.1. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
18.2. Effect of Lease Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
18.3. Rights of Lessor Upon Lease Event of Default,
Liquidation Event of Default or Limited
Liquidation Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
18.4. Rights of Trustee Upon Liquidation
Event of Default, Limited Liquidation
Event of Default and Non-Performance of
Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
18.5. Measure of Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
18.6. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

19. MANUFACTURER EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

20. LESSEE PARTIAL WIND-DOWN EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

21. ELIGIBILITY WAIVER EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

22. CERTIFICATION OF TRADE OR BUSINESS USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

23. SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

24. ADDITIONAL LESSEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
24.1. Additional Affiliate and Subsidiary Lessees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
24.2. Additional Non-Affiliate Lessees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

25. TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

26. GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
26.1. Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
26.2. Scope of Guarantor's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

</TABLE>

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<PAGE> 4

26.3. Lessor's Right to Amend this Agreement, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
26.4. Waiver of Certain Rights by Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
26.5. Lessees' Obligations to Guarantor and
Guarantor's Obligations to Lessees
Subordinated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
26.6. Guarantor to Pay Lessor's Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
26.7. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
26.8. Pari Passu Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

27. RIGHTS OF LESSOR ASSIGNED TO TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

28. RIGHT OF LESSEE TO DELEGATE RIGHTS AND
OBLIGATIONS HEREUNDER TO GUARANTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

29. MODIFICATION AND SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

30. CERTAIN REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
30.1. Due Organization, Authorization, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
30.2. Financial Information; Financial
Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
30.3. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
30.4. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
30.5. Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
30.6. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
30.7. Regulations G, T, U and X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
30.8. Business Locations; Trade Names;
Principal Places of Business
Locations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
30.9. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
30.10. Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
30.11. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
30.12. Eligible Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
30.13. Supplemental Documents True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

31. CERTAIN AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
31.1. Corporate Existence;
Foreign Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
31.2. Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
31.3. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
31.4. Repurchase Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
31.5. Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
31.6. Taxes and Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
31.7. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
31.8. Maintenance of Separate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
31.9. Trustee as Lienholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
31.10. Retitling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

32. CERTAIN NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
32.1. Mergers, Consolidations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
32.2. Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
32.3. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
32.4. Use of Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

33. BANKRUPTCY PETITION AGAINST LESSOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

</TABLE>

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<PAGE> 5

<TABLE>
<S> <C> <C>
34. SUBMISSION TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

35. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

36. JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

37. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

38. LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

39. TITLE TO REPURCHASE PROGRAMS IN LESSOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

40. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

41. EXECUTION IN COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

42. EFFECTIVENESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

</TABLE>

Schedule 1 Lessees on Date of Execution of Lease
Schedule 2 Lessees Selling Team Acquired Vehicles
on Date of Execution of Lease
Schedule 30.8 Business Locations

ATTACHMENT A VEHICLE ACQUISITION SCHEDULE
ATTACHMENT B FORM OF POWER OF ATTORNEY
ATTACHMENT C-1 FORM OF AFFILIATE JOINDER IN LEASE
ATTACHMENT C-2 FORM OF NON-AFFILIATE JOINDER IN LEASE
ATTACHMENT D FORM OF BILL OF SALE

- iv -

<PAGE> 6

MOTOR VEHICLE LEASE AGREEMENT

This Motor Vehicle Lease Agreement - Series 1996-1 (this "Agreement"),
dated as of December 1, 1996, by and among TEAM FLEET FINANCING CORPORATION, a
Delaware corporation ("Lessor"), those direct or indirect Subsidiaries (the
"Team Lessees") of Team Rental Group, Inc., a Delaware corporation ("Team"),
those Affiliates (other than the Team Lessees) and non-Affiliates of Team (such
Affiliates and non-Affiliates, the "Non-Team Lessees") that are listed on
Schedule 1 hereto and those that become party to this Agreement pursuant to the
provisions of Section 24 hereof (individually, each Team Lessee and each
Non-Team Lessee, a "Lessee" and, collectively, the "Lessees"), and TEAM RENTAL
GROUP, INC., as guarantor (Team, in such capacity, is referred to as the
"Guarantor"; the Guarantor, together with the Lessees is from time to time
referred to as the "Lessee Group").

W I T N E S S E T H:

WHEREAS, the Lessor has purchased or will purchase Repurchase Vehicles
and Non-Repurchase Vehicles from Manufacturers through dealers authorized by
such Manufacturers, at auctions conducted by automobile dealers not affiliated
with Team or from Affiliates of Team;

WHEREAS, the Lessor desires to lease to the Lessees and the Lessees
desire to lease from the Lessor Repurchase Vehicles and Non-Repurchase Vehicles
so acquired by the Lessor for use in the daily rental car businesses of the
Lessees; and

WHEREAS, the Guarantor has, pursuant to Section 26 hereof, guaranteed
the obligations of the Lessees under this Agreement.

1. DEFINITIONS. Certain capitalized terms used herein (including the
preamble and the recitals hereto) shall have the meanings ascribed to such
terms in the Definitions List (the "Definitions List") attached as Schedule 1
to the Amended and Restated Base Indenture, dated as of December 1, 1996, among
the Lessor, the Guarantor and Bankers Trust Company, a New York

<PAGE> 7

banking corporation, as trustee, as such Definitions List may be amended or
modified from time to time in accordance with the provisions of the Indenture,
and in the Series 1996-1 Supplement thereto.

(i) the rights of such Lessee under this Agreement, as the
same may be amended, modified or supplemented from time to time in
accordance with its terms, and any other agreements related to or in
connection with this Agreement to which such Lessee is a party (the
"Lessee Agreements"), including, without limitation, (a) all monies
due and to become due to such Lessee from the Guarantor and the
Lessees under or in connection with the Lessee Agreements, whether
payable as rent, guaranty payments, fees, expenses, costs,
indemnities, insurance recoveries, damages for the breach of any of
the Lessee Agreements or otherwise, (b) all rights, remedies, powers,
privileges and claims of such Lessee against any other party under or
with respect to the Lessee Agreements (whether arising pursuant to the
terms of such Agreements or otherwise available to such Lessee at law
or in equity), including the right to enforce any of the Lessee
Agreements and to give or withhold any and all consents, requests,
notices, directions, approvals, extensions or waivers under or with
respect to the Lessee Agreements or the obligations of any party
thereunder, (c) all liens and property from time to time purporting to
secure payment arising under or in connection with the Lessee
Agreements, or assigned to, such Lessee describing any collateral

- 3 -
<PAGE> 8

securing such obligations or liabilities and (d) all guarantees,
insurance and other agreements or arrangements of whatever character
from time to time supporting or securing payment of such obligations
and liabilities of such Lessee pursuant to the Lessee Agreements;

(ii) all Vehicles leased by such Lessee from the Lessor
pursuant to this Agreement which, notwithstanding that this Agreement
is intended to convey only a leasehold interest, are determined to be
owned by such Lessee, and all Certificates of Title with respect to
such Vehicles;

(iii) all right, title and interest of such Lessee in, to and
under any Repurchase Programs and all monies due and to become due
thereunder in respect of Repurchase Vehicles leased under this
Agreement which, notwithstanding that this Agreement is intended to
convey only a leasehold interest, are determined to be owned by such
Lessee, whether payable as Vehicle repurchase prices, fees, expenses,
costs, indemnities, insurance recoveries, damages for breach of the
Repurchase Programs or otherwise;

(iv) the Series 1996-1 Collection Account; (a) all funds on
deposit therein from time to time; (b) all certificates and
instruments, if any, representing or evidencing any or all of the
Series 1996-1 Collection Account or the funds on deposit therein from
time to time; and (c) all investments made at any time and from time
to time with the moneys in the Series 1996-1 Collection Account
(including income thereon);

(v) all additional property that may 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 such
Lessee or by anyone on its behalf; and

(vi) all proceeds of any and all of the foregoing including,
without limitation, payments under insurance (whether or not the
Lessor is the loss payee thereof) and cash.

2.1. Acquisition of Vehicles. (a) From time to time, at the
discretion of the Lessor and the Lessees, subject to the terms and provisions
hereof, the Lessor agrees to lease to each Lessee and each Lessee agrees to
lease from the Lessor, subject to the terms hereof, the Repurchase Vehicles and
Non-Repurchase Vehicles that are Manufacturer Acquired Vehicles identified in
certain vehicle orders (each, a "Series 1996-1 Vehicle Order") and purchased by
the Lessor in accordance with Section 2.3 hereof. If requested by the Lessor,
each Lessee shall make each Series 1996-1 Vehicle Order available to the
Lessor, together

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<PAGE> 9

with a schedule containing the information with respect to the Vehicles
included within such Series 1996-1 Vehicle Order as is set forth in Attachment
A hereto (each, a "Series 1996-1 Vehicle Acquisition Schedule"), or in such
form as is otherwise requested by the Lessor. In addition, each Lessee leasing
Vehicles pursuant to such Series 1996-1 Vehicle Order agrees to provide such
other information regarding such Vehicles as the Lessor may require from time
to time. The Lessees and the Lessor acknowledge that concurrently with the
execution and delivery of this Agreement, the Lessees specified on Schedule 1
hereto have made available to the Lessor Series 1996-1 Vehicle Orders to lease
Vehicles currently owned by the Lessor pursuant to this Agreement, together
with the required Series 1996-1 Vehicle Acquisition Schedules in respect of
such Series 1996-1 Vehicle Orders. This Agreement, together with any other
related documents attached to this Agreement or submitted with a Series 1996-1
Vehicle Order, including without limitation any documents in connection with an
Eligible Repurchase Program (collectively, the "Supplemental Documents"), will
constitute the entire agreement regarding the leasing of Vehicles that are
Manufacturer Acquired Vehicles by the Lessor to the Lessees.

(b) The Lessor and the Lessees each acknowledge that either
concurrently with the execution and delivery of this Agreement or after the
date of this Agreement on not less than thirty (30) days written notice to the
Lessor and the Trustee, any Lessee may request that the Lessor purchase a
Vehicle from an Affiliate or Subsidiary of Team (the "Team Acquired Vehicles")
for a purchase price equal to (i) with respect to Repurchase Vehicles, the Net
Book Value of such Repurchase Vehicle and (ii) with respect to Non-Repurchase
Vehicles, the lesser of (A) the Net Book Value of such Vehicle and (B) the Fair
Market Value of such Vehicle (such amount, the "Non-Repurchase Vehicle
Acquisition Price"), in which event such Lessee shall, immediately upon the
consummation of such sale, lease such Team Acquired Vehicles from the Lessor
pursuant to this Agreement (each such transaction is referred to as an
"Affiliate Sale Transaction"). Concurrently with the execution and delivery of
this Agreement, the Affiliates and/or Subsidiaries listed on Schedule 2 hereto
are selling to the Lessor certain Team Acquired Vehicles (such Affiliates and
Subsidiaries, the "Selling Affiliates"). In connection with each Affiliate
Sale Transaction, to evidence the conveyance of the Team Acquired Vehicles from
the Selling Affiliate to the Lessor, the applicable Lessee shall deliver to the
Lessor the following:

(i) a Series 1996-1 Vehicle Order (including a Series 1996-1
Vehicle Acquisition Schedule) with respect to all Team Acquired
Vehicles covered by such Affiliate Sale Transaction;

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<PAGE> 10

(ii) a report of the results of a search of the appropriate
records of the county and state in which the Team Acquired Vehicles
covered by such Affiliate Sale Transaction are located and the county
and state in which the Selling Affiliate's principal office is
located, which shall show no liens or other security interests (other
than Permitted Liens) with respect to the Team Acquired Vehicles
covered by such Affiliate Sale Transaction or, in the event that such
search reveals any such Lien or security interest, there shall be
delivered to the Trustee a termination of such Lien or security
interest in form acceptable for filing;

(iii) confirmation from each lender holding a security
interest in any Team Acquired Vehicle covered by such Affiliate Sale
Transaction stating unconditionally (A) that, if any sums are to be
paid to such lender in connection with such Affiliate Sale
Transaction, such lender has been paid the full amount due to it in
connection with such Affiliate Sale Transaction and (B) that any lien
or security interest of such lender in any such Team Acquired Vehicle
has been released;

(iv) the original Certificate of Title for each Team Acquired
Vehicle together with a completed application to retitle such Team
Acquired Vehicle in the name of the Lessor and to have noted thereon
the Trustee's security interest in such Team Acquired Vehicle pursuant
to the Indenture;

(v) Uniform Commercial Code termination statements
terminating, or Uniform Commercial Code partial releases releasing,
any security interests and other liens (other than Permitted Liens) in
favor of any Person with respect to each Team Acquired Vehicle covered
by such Affiliate Sale Transaction and, with respect to any Repurchase
Vehicles, any related Repurchase Program rights;

(vi) a bill of sale, substantially in the form attached
hereto as Attachment D (each, an "Affiliate Bill of Sale"), conveying
title to the Team Acquired Vehicles from the Selling Affiliate to the
Lessor and, with respect to any Repurchase Vehicles, all right, title
and interest of the Selling Affiliate to any applicable Repurchase
Program from the Selling Affiliate to the Lessor; and

(vii) with respect to Repurchase Vehicles, written
confirmation from the applicable Manufacturer that the Lessor will be
authorized to return such Repurchase Vehicles to the Manufacturer
under the Lessor's Repurchase Program.

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<PAGE> 11

In addition, the applicable Lessee shall deliver to the Trustee the
items required to be delivered to the Trustee pursuant to the provisions of
Section 13.21 of the Base Indenture.

(c) In order to induce the Lessor to purchase Team Acquired Vehicles,
the applicable Lessee shall require the Selling Affiliate to deliver to the
Lessor a certificate of an authorized officer of the Selling Affiliate in which
the Selling Affiliate shall represent and warrant to and in favor of the Lessor
and the Trustee, as of the date hereof or, with respect to an Affiliate Sale
Transaction that takes place after the date of this Agreement, as of the date
of such Affiliate Sale Transaction, as follows:

(i) The Selling Affiliate is, immediately prior to the
consummation of the sale thereof, the true and lawful owner of all
Team Acquired Vehicles listed on Schedule 1 to the applicable bill of
sale as being owned by such Selling Affiliate;

(ii) The Team Acquired Vehicles listed on Schedule 1 to the
applicable bill of sale as being owned by such Selling Affiliate are
not subject to any lien, security interest or rights of any other
party, other than Permitted Liens;

(iii) The Team Acquired Vehicles listed on Schedule 1 to the
applicable Bill of Sale as being owned by such Selling Affiliate are
either Eligible Repurchase Vehicles or Eligible Non-Repurchase
Vehicles and, with respect to the Eligible Repurchase Vehicles, such
Repurchase Vehicles have not been held beyond the Maximum Term
applicable thereto;

(iv) All representations and warranties contained in this
Agreement with respect to Non-Repurchase Vehicles and Repurchase
Vehicles owned by Affiliates of Team are true and correct as applied
to the Team Acquired Vehicles listed on Schedule 1 to the applicable
Bill of Sale as being owned by such Selling Affiliate; and

(v) The purchase price being paid by the Lessor for the Team
Acquired Vehicles is listed on Schedule 1 to the applicable Bill of
Sale and such price constitutes, with respect to each Repurchase
Vehicle, the Net Book Value of such Repurchase Vehicle, and with
respect to each Non-Repurchase Vehicle, the Non-Repurchase Vehicle
Acquisition Price of such Non-Repurchase Vehicle.

Other than Affiliate Sale Transactions complying with the provisions of this
Section 2.1, the Lessor shall not purchase any

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<PAGE> 12

Vehicles from any Affiliate or Subsidiary of Team. After any purchase of
Vehicles from an Affiliate or Subsidiary of Team by the Lessor, such Vehicles
will be subject to all the terms and conditions of this Agreement.

(d) The Lessor and the Lessees each acknowledge that either
concurrently with the execution and delivery of this Agreement or after the
date of this Agreement on not less than five (5) days written notice to the
Lessor and the Trustee, any Lessee may request that the Lessor purchase a
Non-Repurchase Vehicle from an independent dealer through an auction (the
"Auction Acquired Vehicles") for a purchase price equal to the Capitalized Cost
of such Auction Acquired Vehicle, in which event such Lessee shall, immediately
upon the consummation of such sale, lease such Auction Acquired Vehicle from
the Lessor pursuant to this Agreement (each such transaction is referred to as
an "Auction Sale Transaction"). In connection with each Auction Sale
Transaction, to evidence the conveyance of the Auction Acquired Vehicles from
the applicable dealer to the Lessor, the applicable Lessee shall deliver to the
Lessor the following:

(i) a Series 1996-1 Vehicle Order (including a Series 1996-1
Vehicle Acquisition Schedule) with respect to all Auction Acquired
Vehicles covered by such Auction Sale Transaction;

(ii) a report of the results of a search of the appropriate
records of the county and state in which the Auction Acquired Vehicles
covered by such Lessee Sale Transaction are located and the county and
state in which the selling dealer's principal office is located, which
shall show no liens or other security interests (other than Permitted
Liens) with respect to the Auction Acquired Vehicles covered by such
Auction Sale Transaction or, in the event that such search reveals any
such Lien or security interest, there shall be delivered to the
Trustee a termination of such Lien or security interest in form
acceptable for filing;

(iii) the original Certificate of Title for each Auction
Acquired Vehicle together with a completed application to retitle such
Auction Acquired Vehicle in the name of the Lessor and to have noted
thereon the Trustee's security interest in such Auction Acquired
Vehicle pursuant to the Indenture; and

(iv) a bill of sale, substantially in the form attached
hereto as Attachment D-1 (each, an "Auction Bill of Sale"), conveying
title to the Auction Acquired Vehicles, and copies of any certificate
given by the related auction

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<PAGE> 13

house regarding the absence of liens and/or the ownership of each such
Vehicle.

Other than Auction Sale Transactions complying with the provisions of this
Section 2.1, the Lessor shall not purchase any Non-Repurchase Vehicles from any
independent dealer at an auction. After any purchase of Vehicles by the Lessor
at auction, such Vehicles will be subject to all the terms and conditions of
this Agreement.

2.2. Right of Lessees to Act as Lessor's Agent. The Lessor agrees
that any member of the Lessee Group may act as the Lessor's agent in placing
Series 1996-1 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 Group liable for losses due to such member of the
Lessee Group's actions in performing as the Lessor's agent hereunder. In
addition, the Lessor agrees that each Lessee may make arrangements for delivery
of Vehicles to a location selected by the relevant Lessee at such Lessee's
expense. Each Lessee agrees to accept Non-Repurchase Vehicles as produced and
delivered, subject to the right of such Lessee to reject any such
Non-Repurchase Vehicles damaged in transit or not conforming to the related
Vehicle Order. Each Lessee agrees to accept Repurchase Vehicles as produced
and delivered except each Lessee will have the option to reject any Repurchase
Vehicle that may be rejected pursuant to the terms of the applicable Repurchase
Program. The relevant Lessee, acting as agent for the Lessor, shall be
responsible for pursuing any rights of the Lessor with respect to the return of
any Repurchase Vehicle to the Manufacturer pursuant to the preceding sentence.
Subject to the provisions of Section 21 hereof (regarding Eligibility Waiver
Events), any member of the Lessee Group that places a Vehicle Order for a
Repurchase Vehicle pursuant to this Agreement agrees that all Repurchase
Vehicles ordered as provided herein shall be ordered utilizing the procedures
consistent with the applicable Eligible Repurchase Program.

2.3. Payment of Capitalized Cost by Lessor. Upon delivery of any
Manufacturer Acquired Vehicle, the Lessor shall pay to the dealer selling the
Manufacturer Acquired Vehicle the costs and expenses incurred by it in
connection with the acquisition of such Vehicle as established by the invoice
delivered in connection with such Vehicle (the "Capitalized Cost") and the
relevant 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 Capitalized Cost.

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<PAGE> 14

2.5. Lessees' Rights to Purchase Vehicles. Each Lessee will have the
option, exercisable with respect to any Vehicle during the Vehicle Term with
respect to such Vehicle, to purchase any Vehicles leased under this Agreement
at the greater of (i) the applicable Net Book Value or (ii) the Fair Market
Value of the Vehicle (the greater of such amounts being referred to as the
"Vehicle Purchase Price", with respect to Repurchase Vehicles, and the
"Non-Repurchase Vehicle Value", with respect to Non-Repurchase Vehicles), in
which event such Lessee will pay the Vehicle Purchase Price or the
Non-Repurchase Vehicle Value, as applicable, to the Lessor on or before the Due
Date next succeeding such purchase by the relevant 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 relevant Lessee, and the Servicer shall cause
the Trustee to cause its lien to be removed from the certificate of title for
such Vehicle, concurrently with or promptly after the Vehicle Purchase Price or
the Non-Repurchase Vehicle Value, as applicable, for such Vehicle (and any such
unpaid Monthly Base Rent and Monthly Variable Rent) is paid by such Lessee to
the Trustee.

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<PAGE> 15

2.6. Disposition of Vehicles. Notwithstanding anything to the
contrary contained herein, the Lessor shall have the right, at any time prior
to the date thirty (30) days prior to the expiration of the Maximum Term for
any Repurchase Vehicle, or at any time, with respect to Non-Repurchase
Vehicles, to require that the Lessee leasing such Vehicle from the Lessor
hereunder exercise commercially reasonable efforts to arrange for the sale of
such Vehicle to a third party, in which event such Lessee shall (i) until not
later than the date thirty (30) days prior to the expiration of such Maximum
Term, with respect to Repurchase Vehicles, or promptly thereafter, with respect
to Non-Repurchase Vehicles, exercise commercially reasonable efforts to arrange
for the sale of such Vehicle to a third party for a price greater than the Net
Book Value, with respect to Repurchase Vehicles, or for the Non-Repurchase
Vehicle Value, with respect to Non-Repurchase Vehicles, or (ii) purchase such
Vehicle from the Lessor for the Vehicle Purchase Price, with respect to
Repurchase Vehicles, or the Non-Repurchase Vehicle Value, with respect to
Non-Repurchase Vehicles. If a sale of the Vehicle is arranged by the Lessee,
then the Lessee shall deliver the Vehicle to the purchaser thereof, the Lien of
the Trustee on the Certificate of Title of such Vehicle shall be released, and
the Lessee shall cause to be delivered to the Lessor the funds paid for such
Vehicle by the purchaser. If the Lessee is unable to arrange for a sale of a
Repurchase Vehicle prior to such date thirty (30) days prior to the expiration
of the Maximum Term of such Repurchase Vehicle, then the Lessee shall cease
attempting to arrange for such a sale and shall return such Repurchase Vehicle
to the applicable Manufacturer as herein provided. If the Lessee is unable to
arrange for a sale of a Non-Repurchase Vehicle for an amount in excess of the
Non-Repurchase Vehicle Value thereof prior to the end of the twenty-four month
period referred to in the proviso clause contained in Section 3.2 hereof, or
such longer period as may be approved by the Rating Agencies, then the Lessee
shall cease attempting to arrange for such sale and shall arrange for the sale
of such Vehicle at auction with commercially reasonable efforts to maximize the
sale price. If any period for which a Vehicle's age is unknown, such period
shall be determined by dividing the number of miles on the odometer of such
Vehicle at the time of its purchase by the Issuer by 1500. Notwithstanding the
foregoing, the age for any Vehicle shall in no event start earlier than
September 1 of the year prior to the model year of such Vehicle.

2.7. 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-Repurchase Vehicles (or such portion thereof as is
specified in the related Series Supplement) leased under this

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<PAGE> 16

Lease as of such date (after giving effect to the inclusion of such Vehicle
under this Lease) by (y) the Series 1996-1 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 this Lease),
shall not exceed any applicable Maximum Non-Repurchase Percentage, (b) the
quotient (expressed as a percentage) obtained by dividing (x) the aggregate Net
Book Value of all Repurchase Vehicles or Non-Repurchase 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 this
Lease) by (y) the Series 1996-1 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 this Lease) shall not exceed any
applicable Maximum Manufacturer Percentage, (c) any excess Maximum
Non-Repurchase 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 this 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 this Lease
as is specified in any related Series Supplement.

3. TERM.

3.1. Vehicle Term: Repurchase Vehicles. The "Vehicle Lease
Commencement Date" for each Repurchase Vehicle shall mean the day referenced as
such in the Series 1996-1 Acquisition Schedule with respect to such Repurchase
Vehicle but in no event beyond the date that funds are expended by the Lessor
to acquire such Repurchase Vehicle. The "Vehicle Term" with respect to each
Repurchase Vehicle shall extend from the Vehicle Lease Commencement Date
through the earliest of (i) the Turnback Date for such Repurchase Vehicle, (ii)
the date the Vehicle is sold to a third party through any means other than an
auction conducted by or through or arranged by the Manufacturer pursuant to its
Repurchase Program and the funds in respect of such sale are received by the
Trustee (from such third party or from any member of the Lessee Group on behalf
of such third party), (iii) if the Vehicle becomes a Casualty, the date funds
in the amount of the Net Book Value thereof are received by the Trustee from
the applicable Lessee, or (iv) the date that the Vehicle is purchased by the
applicable Lessee pursuant to Section 2.5 or 2.6 hereof and the Vehicle
Purchase Price with respect to such purchase (and any unpaid Monthly Base Rent
and Monthly Variable Rent with respect to such Vehicle) is received by the
Trustee (the earliest

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<PAGE> 17

of such four dates being referred to as the "Vehicle Lease Expiration Date").
The Lessor and each Lessee agree that each Lessee shall use its commercially
reasonable efforts to deliver each Repurchase Vehicle to the related
Manufacturer or the designated auction site, as applicable, (a) not prior to
the end of the minimum holding period specified in the related Repurchase
Program (prior to which the Lessor may not deliver such Repurchase Vehicle
without penalty (the "Minimum Term")) and (b) not later than the end of the
maximum holding period (after which the Lessor may not return such Repurchase
Vehicle without penalty (the "Maximum Term")); provided, however, if for any
reason, a Lessee fails to deliver a Repurchase Vehicle to the applicable
Manufacturer or designated auction site during the time period between the
expiration of the Minimum Term and the expiration of the Maximum Term, such
Lessee shall be obligated to purchase such Repurchase Vehicle from the Lessor
on the first Due Date after the expiration of the Maximum Term for an amount
equal to the Vehicle Purchase Price with respect to such Repurchase Vehicle.
Each Lessee will pay the equivalent of the Rent for the Minimum Term for
Repurchase Vehicles returned before the Minimum Term, regardless of actual
usage, unless a Vehicle is a Casualty which will be handled in accordance with
Section 6 hereof.

3.2. Vehicle Term: Non-Repurchase Vehicles. The "Vehicle Lease
Commencement Date" for each Non-Repurchase Vehicle shall mean the day
referenced as such in the Series 1996-1 Vehicle Acquisition Schedule with
respect to such Non-Repurchase Vehicle but in no event beyond the date that
funds are expended by the Lessor to acquire such Non- Repurchase Vehicle. The
"Vehicle Term" with respect to each Non-Repurchase Vehicle shall extend from
the Vehicle Lease Commencement Date through the earliest of (i) if the
Non-Repurchase Vehicle is sold to a third party, the date such Vehicle is sold
to such third party and funds in respect of such sale are received by the
Trustee (from such third party or from any member of the Lessee Group on behalf
of such third party) and such funds equal or exceed the Non-Repurchase Vehicle
Value of such Non-Repurchase Vehicle, (ii) if the Non-Repurchase Vehicle
becomes a Casualty, the date funds in the amount of the Non-Repurchase Vehicle
Value thereof are received by the Trustee from the applicable Lessee, or (iii)
the date that the Non-Repurchase Vehicle is purchased by the applicable Lessee
pursuant to Section 2.5 hereof and the Non-Repurchase Vehicle Value with
respect to such purchase (and any unpaid Monthly Base Rent and Monthly Variable
Rent with respect to such Non-Repurchase Vehicle) is received by the Trustee
(the earliest of such four dates being referred to as the "Vehicle Lease
Expiration Date"); provided, however, that the Lessees shall use commercially
reasonable efforts to dispose of each Non-Repurchase Vehicle within twenty-four
(24) months after the date of the original new dealer invoice for such Vehicle
or where no such

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<PAGE> 18

invoice exists, the date such Vehicle was first put into service, or such
longer period as may be approved by the Rating Agencies.

3.3. The "Lease Commencement Date" shall mean the earlier of (i) the
date of the issuance of the Series 1996-1 Notes or (ii) the date of the Vehicle
Lease Commencement Date for the first Vehicle leased by a Lessee hereunder.
The "Lease Expiration Date" shall mean the later of (i) the date of the payment
in full of all Series 1996-1 Notes and all outstanding Carrying Charges and
(ii) the Vehicle Lease Expiration Date for the last Vehicle leased by a Lessee
hereunder. The "Term" of this Agreement shall mean the period commencing on
the Lease Commencement Date and ending on the Lease Expiration Date.

4. RENT AND CHARGES. Each Lessee will pay Rent on a monthly basis as
set forth in this Section 4:

4.1. Certain Definitions. As used herein the following terms have
the following meanings:

"Additional Base Rent" with respect to the Non-Repurchase
Vehicles leased hereunder, with respect to each Due Date shall equal
the amount, if any, by which (a) 100% of the aggregate Net Book Value
of such Non- Repurchase Vehicles owned by the Lessor exceeds (b) the
three (3) month rolling average of the Fair Market Value of such
Non-Repurchase Vehicles for the preceding three (3) calendar months.

"Monthly Base Rent" with respect to each Due Date and each
Vehicle subject to this Agreement shall equal the sum, without double
counting, of (a) the Depreciation Charge for the Related Month for
such Vehicle plus (b) the Net Book Value of such Vehicle, with respect
to each Repurchase Vehicle, or the Non-Repurchase Vehicle Value of
such Vehicle, with respect to each Non-Repurchase Vehicle, in the
event such Vehicle either (x) in the case of a Repurchase Vehicle, was
returned to the applicable Manufacturer and such Manufacturer paid the
Repurchase Price during the Related Month, (y) became a Casualty
during the Related Month or (z) was sold to any Person (other than to
a Manufacturer pursuant to such Manufacturer's Repurchase Program or
to a third party pursuant to an auction conducted through a
Manufacturer's Repurchase Program) during the Related Month plus (c)
the aggregate amount of any Guaranteed Payments received pursuant to a
Repurchase Program during the Related Month, plus (d) the aggregate
amount of any Disposition Proceeds received during the Related Month,
plus (e) in the case of any Vehicle, the aggregate amount of
Termination Payments that became due during the Related Month with
respect to such Vehicle, plus

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<PAGE> 19

(f) in the case of a Repurchase Vehicle, the aggregate amount of
Repurchase Price Interest that became due during the Related Month
with respect to such Vehicle, minus (g) any amount received by the
Lessor or the Trustee, and deposited into the Collection Account
during the Related Month from the applicable Manufacturer as the
Repurchase Price or Guaranteed Payment for such Repurchase Vehicle or
from a third party other than a Manufacturer for the purchase of such
Vehicle plus (h) any Repurchase Price Interest which may be owed under
Section 13.4.

"Monthly Supplemental Rent" with respect to each Due Date
shall equal (x) the accrued interest on all Series 1996-1 Notes for
the Related Month, plus (y) the Carrying Charges for the Related
Month, minus (z) the aggregate of all Monthly Variable Rent accrued
with respect to the Related Month for all Vehicles leased hereunder.

"Monthly Variable Rent" with respect to each Due Date and each
Vehicle subject to this Agreement shall equal the sum of (a) an amount
equal to the Net Book Value of such Vehicle, with respect to each
Repurchase Vehicle, or the Non-Repurchase Vehicle Value of such
Vehicle, with respect to each Non-Repurchase Vehicle, during the
Related Month multiplied by the VFR for a one year interest period,
multiplied by a fraction, the numerator of which shall be 30 and the
denominator of which shall be 360 and (b) the product of (i) an
amount equal to (x) all Carrying Charges for the Related Month less
(y) any accrued earnings on Permitted Investments in the Series 1996-1
Collection Account which are accrued through the last Business Day of
the Related Month and maturing by the next Distribution Date and (ii)
a fraction, the numerator of which is the Net Book Value of such
Vehicle, with respect to each Repurchase Vehicle, or the
Non-Repurchase Vehicle Value of such Vehicle, with respect to each
Non-Repurchase Vehicle, and the denominator of which is the sum of the
Net Book Values and Non-Repurchase Vehicle Values of all Vehicles. In
the event the Vehicle Lease Commencement Date occurs with respect to
such Vehicle on a day other than the last day of a Related Month, the
Monthly Variable Rent for such Vehicle shall be equal to the product
of (a) the Monthly Variable Rent otherwise payable with respect to
such Vehicle, multiplied by (b) a fraction the numerator of which is
12 and the denominator of which is 360, multiplied by (c) the number
of days in such Related Month from, after and including such Vehicle
Lease Commencement Date through and including the last day of such
Related Month. In the event the Vehicle Lease Expiration Date occurs
with respect to such Vehicle on a day other than the last day of the
Related Month, the Monthly Variable Rent for such Vehicle shall be

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<PAGE> 20

equal to the product of (a) the Monthly Variable Rent otherwise
payable with respect to such Vehicle for the Related Month, multiplied
by (b) a fraction the numerator of which is 12 and the denominator of
which is 360, multiplied by (c) the number of days in such Related
Month from, after and including the first day of such Related Month
through and including the Vehicle Lease Expiration Date.

"Non-Repurchase Fleet Market Value" means, with respect to all
Non-Repurchase Vehicles, as of any date of determination, the sum of
the respective Fair Market Values of each Non-Repurchase Vehicle
subject to this Agreement.

"Rent" means Monthly Base Rent, Monthly Variable Rent, Monthly
Supplemental Rent and Additional Base Rent.

"VFR" for any period, is an interest rate equal to (i) the
amount of interest accrued during such period with respect to all
Series 1996-1 Notes divided by (ii) the average daily Invested Amounts
of all Series 1996-1 Notes during such period.

4.2. Payment of Rent. On each Due Date:

4.2.1. Monthly Base Rent. Each Lessee shall pay to the Lessor all
Monthly Base Rent that has accrued during the Related Month with respect to
each Vehicle leased hereunder by such Lessee;

4.2.2. Monthly Variable Rent. Each Lessee shall pay to the Lessor
all Monthly Variable Rent that has accrued during the Related Month with
respect to each Vehicle leased hereunder by such Lessee;

4.2.3. Monthly Supplemental Rent. Each Lessee shall pay such
Lessee's Share of an amount equal to the Monthly Supplemental Rent that has
accrued during the Related Month less any earnings on Permitted Investments not
taken into account in the calculation of Monthly Variable Rent; and

4.2.4. Additional Base Rent. Each Lessee shall pay to the Lessor
such Lessee's Share of an amount equal to the monthly Additional Base Rent that
has accrued during the Related Month with respect to the Non-Repurchase
Vehicles leased hereunder by such Lessee.

4.3. Late Payment. In the event the relevant Lessee fails to remit
payment of any amount due on or before the Due Date, the amount not paid will
be considered delinquent and such Lessee

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<PAGE> 21

will pay a late charge equal to the VFR plus 1%, times the delinquent amount
for the period from the Due Date until such delinquent amount is received by
the Trustee.

4.4. Net Lease. THIS AGREEMENT SHALL BE A NET LEASE, AND EACH
LESSEE'S OBLIGATION TO PAY ALL RENT AND OTHER SUMS HEREUNDER SHALL BE ABSOLUTE
AND UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY ABATEMENT OR REDUCTION FOR
ANY REASON WHATSOEVER. The obligations and liabilities of each 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
each Lessee to reject vehicles pursuant to Section 2.2 hereof) for any reason,
including without limitation: (i) any defect in the condition,
merchantability, quality or fitness for use of the Vehicles or any part
thereof; (ii) any damage to, removal, abandonment, salvage, loss, scrapping or
destruction of or any requisition or taking of the Vehicles or any part
thereof; (iii) any restriction, prevention or curtailment of or interference
with any use of the Vehicles or any part thereof; (iv) any defect in or any
Lien on title to the Vehicles or any part thereof; (v) any change, waiver,
extension, indulgence or other action or omission in respect of any obligation
or liability of the relevant Lessee or the Lessor; (vi) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation
or other like proceeding relating to the relevant Lessee, the Lessor or any
other Person, or any action taken with respect to this Agreement by any trustee
or receiver of any Person mentioned above, or by any court; (vii) any claim
that the relevant Lessee has or might have against any Person, including
without limitation the Lessor; (viii) any failure on the part of the Lessor to
perform or comply with any of the terms hereof or of any other agreement; (ix)
any invalidity or unenforceability or disaffirmance of this Agreement 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 relevant Lessee or otherwise;
(x) any insurance premiums payable by the relevant Lessee with respect to the
Vehicles; or (xi) any other occurrence whatsoever, whether similar or
dissimilar to the foregoing, whether or not the relevant Lessee shall have
notice or knowledge of any of the foregoing and whether or not foreseen or
foreseeable. This Agreement shall be noncancelable by the Lessees and, except
as expressly provided herein, each Lessee, to the extent permitted by law,
waives all rights now or hereafter conferred by statute or otherwise to quit,
terminate or surrender this Agreement, or to any diminution or reduction of
Rent payable by each Lessee hereunder. All payments by each Lessee made
hereunder shall be final (except to the extent of adjustments provided for
herein), absent manifest error and, except as otherwise provided herein, each
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 this

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<PAGE> 22

Agreement shall be terminated in whole or in part by operation of law or
otherwise except as expressly provided herein, each Lessee shall nonetheless
pay an amount equal to each Rent payment at the time and in the manner that
such payment would have become due and payable under the terms of this
Agreement as if it had not been terminated in whole or in part. All covenants
and agreements of each Lessee herein shall be performed at its cost, expense
and risk unless expressly otherwise stated.

5. INSURANCE. Team represents that it shall at all times maintain
insurance coverage for each Team Lessee in accordance with the appropriate
states' requirements and other requirements as set forth below. Each Non-Team
Lessee represents that it shall at all times maintain insurance coverage for
itself in full force and effect in accordance with the appropriate states'
requirements and other requirements as set forth below.

5.1. Personal Injury and Damage. Subject to applicable state and
other requirements, Team and/or each Non- Team Lessee may self-insure against
personal injury and damage claims arising from the use of the Vehicles. In
addition, Team, or the Non-Team Lessees, as appropriate, will maintain with
respect to each Lessee's properties and businesses insurance against loss or
damage of the kind customarily insured against by corporations engaged in the
same or similar businesses, of such types and in such amounts as are
customarily carried by such similarly situated corporations.

5.2. Delivery of Certificate of Insurance. Within 10 days after the
date the Series 1996-1 Notes are issued (or, with respect to any additional
party becoming a "Lessee" hereunder pursuant to the provisions of Section 24
hereof, within 10 days after such party becomes a "Lessee," hereunder), Team,
on behalf of the Team Lessees, and each Non-Team Lessee shall deliver to the
Lessor a certificate(s) of insurance naming the Lessor and the Trustee as
additional insureds as to the items required by Section 5.1 hereinabove. Such
insurance shall not be changed or canceled except as provided below in Section
5.3.

(i) Team and/or the Non-Team Lessee or Lessees, as applicable,
shall deliver not less than 30 days' prior written notice of any
proposed change in such insurance to the Trustee, which notice shall
contain a certification of a

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<PAGE> 23

reputable insurance broker that is not affiliated with any member of
the Lessee Group that the insurance program maintained by Team, on
behalf of the Team Lessees, and by each Non-Team Lessee (after the
taking effect of such proposed change) comports with industry
standards for persons engaged in the rental car business and having
net worth and operating income similar to that of such member of the
Lessee Group; and

(ii) Team and/or the Non-Team Lessee or Lessees, as
applicable, shall furnish to the Trustee a letter from each Rating
Agency with respect to the outstanding Series 1996-1 Notes to the
effect that such proposed change will not cause a reduction in or a
withdrawal of such rating.

6. RISK OF LOSS AND CASUALTY OBLIGATION.

6.2. Casualty. If a Vehicle becomes a Casualty, then the Lessee that
is leasing such Vehicle will (i) promptly notify the Lessor thereof and (ii)
promptly, but in no event more than fifteen (15) days after such Vehicle
becomes a Casualty, pay to the Lessor the Net Book Value of each such Vehicle
that is a Repurchase Vehicle or the Non- Repurchase Vehicle Value of each such
Vehicle that is a Non-Repurchase Vehicle. Upon payment by the Lessee to the
Lessor of the Net Book Value or the Non-Repurchase Vehicle Value, as
applicable, of any Vehicle that has become a Casualty (i) the Lessor shall
cause title to such Vehicle to be transferred to the relevant Lessee to
facilitate liquidation of such Vehicle by the Lessee, (ii) such Lessee shall be
entitled to any physical damage insurance proceeds applicable to such vehicle,
and (iii) the Lien of the Trustee on such Vehicle shall be released by the
Servicer.

7. VEHICLE USE. So long as no Lease Event of Default, Liquidation
Event or Limited Liquidation Event of Default has occurred and so long as no
Lessee Partial Wind-Down Event has occurred with respect to the relevant Lessee
(subject, however, to Section 2.6 hereof), such Lessee may use Vehicles leased

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<PAGE> 24

hereunder in the regular course of business of such Lessee. Such use shall be
confined primarily to the United States, with limited use in Canada and Mexico;
provided, however, that the principal place of business or rental office of
such Lessee with respect to the Vehicles is located in the United States. The
relevant 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 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 Vehicles and the Certificates of Title as against
such Lessee or any third party in any applicable jurisdiction and to establish,
perfect and maintain the Trustee's lien on the Vehicles and the Certificates of
Title as a perfected first lien in any applicable jurisdiction. Each Lessee
may, at the relevant Lessee's sole expense, change the place of principal
location of any Vehicles. Notwithstanding the foregoing, no change of location
shall be undertaken unless and until (i) all actions necessary to maintain the
Lien of the Trustee on such Vehicles and the Certificates of Title with respect
to such Vehicles shall have been taken and (ii) all legal requirements
applicable to such Vehicles shall have been met or obtained. Following a Lease
Event of Default, Lessee Partial Wind-Down Event, or, with respect to the
Repurchase Vehicles, a Manufacturer Event of Default, and upon the Lessor's
request, the relevant Lessee shall advise 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. Each Lessee shall use reasonable precautions to
prevent loss or damage to Vehicles. Each Lessee shall comply with all
applicable statutes, decrees, ordinances and regulations regarding acquiring,
titling, registering, leasing, insuring and disposing of Vehicles and shall
take reasonable steps to ensure that operators are licensed. Each Lessee and
the Lessor agree that each Lessee shall perform, at its own expense, such
Vehicle preparation and conditioning services with respect to Vehicles
purchased by the Lessor from the Manufacturers as are customary. The Lessor or
the Trustee or any authorized representative of the Lessor or the Trustee may
during reasonable business hours from time to time, without disruption of each
Lessee's business, subject to applicable law, inspect Vehicles and registration
certificates, Certificates of Title and related documents covering Vehicles
wherever the same shall be located. Each Lessee shall not sublease any
Vehicles, nor shall such Lessee assign any right or interest herein or in any
Vehicles; provided, however, that the foregoing shall not be deemed to prohibit
the Lessees from renting Vehicles to third party customers in the ordinary
course of their car rental businesses.

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<PAGE> 25

8. LIENS. Except for Permitted Liens, each Lessee shall keep all
Vehicles leased by it free of all Liens arising during the Term. Upon the
Vehicle Lease Termination Date for each Vehicle leased hereunder should any
such Lien exist the Lessor may, in its discretion, remove 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 relevant Lessee; provided, however, that if any such Liens would
interfere with the rights of such Lessee under this Agreement, the Lessor must
obtain the prior written consent of such Lessee. Each Lessee acknowledges that
the granting of Liens and the taking of other actions pursuant to the Indenture
and the Related Documents does not interfere with the rights of such Lessee
under this Agreement.

9. NON-DISTURBANCE. So long as each Lessee satisfies its obligations
hereunder and no Lease Event of Default, Liquidation Event or of Limited
Liquidation Event of Default has occurred and is continuing, its quiet
enjoyment, possession and use of the Vehicles will not be disturbed during the
Term subject, however, to Section 2.6 hereof and except that the Lessor and the
Trustee each retains the right, but not the duty, to inspect the Vehicles
without disturbing the ordinary conduct of such Lessee's business. Upon the
request of the Lessor or the Trustee from time to time, each Lessee will make
reasonable efforts to confirm to the Lessor and the Trustee the location,
mileage and condition of each Vehicle and to make available for the Lessor's or
the Trustee's inspection within a reasonable time period, not to exceed 45
days, the Vehicles at the location where the Vehicles are normally domiciled.
Further, each Lessee will, during normal business hours and with a notice of 3
Business Days, make its records pertaining to the Vehicles available to the
Lessor or the Trustee for inspection at the location where the Lessee's records
are normally domiciled.

10. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES.
The Lessee Group, at its expense, shall be responsible for proper registration
and licensing of Vehicles, and titling of Vehicles in the name of the Lessor
(with the Lien of the Trustee noted thereon) and, where required, shall have
Vehicles inspected by any appropriate Governmental Authority; provided,
however, that notwithstanding the foregoing, all Certificates of Title shall at
all times remain in the custody of the Servicer in accordance with the
provisions of the Indenture. The Lessee leasing such Vehicle shall be
responsible for the payment of 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

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<PAGE> 26

Authority or any court of law or equity with respect to Vehicles in connection
with the relevant Lessee's operation of Vehicles, and any such amounts paid by
the Lessor, in its discretion, on the relevant Lessee's behalf will be
reimbursed within 30 days of the Lessor notifying such Lessee of such payment.
The Lessor agrees to execute a power of attorney in the form of Attachment B
hereto (each, a "Power of Attorney"), and such other documents as may be
necessary in order to allow the Lessees to title, register and dispose of the
Vehicles; provided, however, that possession of all Certificates of Title shall
at all times remain with the Servicer in accordance with the provisions of the
Indenture and each Lessee acknowledges and agrees that it has no right, title
or interest in or with respect to any Certificate of Title. Notwithstanding
anything herein to the contrary, the Lessor may terminate such Power of
Attorney as provided in Section 18 hereof.

11. MAINTENANCE AND REPAIRS. Each Lessee shall pay for all
maintenance and repairs to keep Vehicles in good working order and condition,
and will maintain Vehicles as required in order to keep the Manufacturer's
warranty in force, and in the case of Repurchase Vehicles, shall comply with
all requirements of the related Repurchase Program to the extent necessary to
maintain the eligibility of such Vehicles. Each Lessee will return Vehicles to
an authorized Manufacturer facility or the relevant Lessee's Manufacturer
authorized warranty station for warranty work. Each Lessee will comply with
any Manufacturer's recall of any Vehicle. Each Lessee will 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. Any
such expenses not paid by, or on behalf of, the relevant Lessee may, after 30
days notice to such Lessee, be paid by the Lessor and any expenses incurred by
the Lessor on such Lessee's behalf for maintenance, repair, operation or use of
Vehicles by such Lessee will be promptly reimbursed (in any event no later than
the next monthly Due Date following such notice) by such Lessee to the Lessor
in the amount paid by the Lessor. Each Lessee shall not make any material
alterations to any vehicles without the prior consent of the Lessor. Any
improvements or additions to any Vehicles shall become and remain the property
of the Lessor, except that any addition to Vehicles made by the relevant Lessee
shall remain the property of such Lessee if it can be disconnected from
Vehicles without impairing the functioning of such Vehicles or its resale
value, excluding such addition.

12. VEHICLE WARRANTIES.

12.1. No Lessor Warranties. EACH LESSEE ACKNOWLEDGES THAT THE LESSOR
IS NOT THE MANUFACTURER, THE AGENT OF THE MANUFACTURER, OR THE DISTRIBUTOR OF
THE VEHICLES LEASED

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<PAGE> 27

HEREUNDER. THE LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED,
AS TO THE FITNESS, SAFENESS, DESIGN, MERCHANTABILITY, CONDITION, QUALITY,
CAPACITY OR WORKMANSHIP OF THE LEASED VEHICLES NOR ANY WARRANTY THAT THE LEASED
VEHICLES WILL SATISFY THE REQUIREMENTS OF ANY LAW OR ANY CONTRACT
SPECIFICATION, AND AS BETWEEN THE LESSOR AND EACH LESSEE, EACH LESSEE AGREES TO
BEAR ALL SUCH RISKS AT ITS SOLE COST AND EXPENSE. EACH LESSEE SPECIFICALLY
WAIVES ALL RIGHTS TO MAKE CLAIMS AGAINST THE LESSOR AND ANY LEASED VEHICLE FOR
BREACH OF ANY WARRANTY OF ANY KIND WHATSOEVER AND, AS TO THE LESSOR, EACH
LESSEE LEASES THE LEASED VEHICLES "AS IS." IN NO EVENT SHALL THE LESSOR BE
LIABLE FOR SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, WHATSOEVER OR
HOWSOEVER CAUSED.

13. REPURCHASE VEHICLE USAGE GUIDELINES AND RETURN.

13.1. Usage. As used herein "vehicle turn-in condition" with respect
to each Repurchase Vehicle will be determined in accordance with the related
Repurchase Program. Repurchase Vehicles not meeting the applicable Repurchase
Program's vehicle turn-in condition guidelines will be purchased by the
relevant Lessee in accordance with the Casualty procedure set forth in Section
6.2.

13.2. Return. Each Lessee will return each Repurchase Vehicle (other
than a Casualty) to the nearest related Manufacturer official auction or other
facility designated by such Manufacturer at the relevant Lessee's sole expense.
Each Lessee agrees that the Repurchase Vehicles will be in vehicle turn-in
condition as specified in the applicable Repurchase Program. Any rebates or
credits applicable to the unexpired term of any license plates for a Repurchase
Vehicle shall inure to the benefit of the relevant Lessee.

13.3. Termination Payments. (i) Upon receipt of payment of the
Repurchase Price of each Repurchase Vehicle from the Manufacturer (or the
receipt of payment of the Repurchase Price of each Repurchase Vehicle through
an auction conducted by or through a Manufacturer), the Lessor will charge the
relevant Lessee for any Excess Damage Charges, Excess Mileage Charges or early
turnback surcharges as determined by the Manufacturer or its agent in
accordance with the applicable Repurchase Program or (ii) upon receipt of the
net proceeds from the sale of any Non-Repurchase Vehicle, the Lessor will
charge the relevant Lessee for any damage charges or mileage charges as
determined by the Lessor in its reasonable judgment (any such charges in (i) or

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<PAGE> 28

(ii) are referred to as a "Termination Payment"). The provisions of this
Section 13.3 will survive the expiration or earlier termination of the Term.

13.4. Repurchase Price Interest. The applicable Lessee shall pay to
the Lessor, as part of the Monthly Base Rent, interest accrued at a rate equal
to the VFR on the Repurchase Price of each Repurchase Vehicle for the period
between the Turnback Date for such Vehicle and receipt of such Repurchase Price
by the Lessor from the Manufacturer ("Repurchase Price Interest"). The
provisions of this Section 13.4 will survive the expiration or earlier
termination of the Term.

14. DISPOSITION PROCEDURE. Each Lessee will comply with the
requirements of law and the requirements of the Repurchase Programs, with
respect to Repurchase Vehicles, in connection with, among other things, the
delivery of Certificates of Title and documents of transfer signed as necessary
in connection with the sale of any Vehicle to a third party or return of such
Vehicle in accordance with an Eligible Repurchase Program. In addition, with
respect to the return of Repurchase Vehicles to a Manufacturer or the delivery
of a Repurchase Vehicle to an authorized auction site, each Lessee shall also
deliver a signed Condition Report and signed odometer statement to be submitted
with the Repurchase Vehicles and accepted by the Manufacturer or its agent at
the time of Repurchase Vehicle return or delivery, as applicable. If a
Repurchase Vehicle is not returned to the Manufacturer and accepted by the
Manufacturer, or delivered to an authorized auction site, prior to the Maximum
Term with respect to such Repurchase Vehicle, the relevant Lessee shall
purchase such Repurchase Vehicle for the appropriate Vehicle Purchase Price and
pay the Lessor such amount within fifteen (15) days after the end of the
Maximum Term (together with any Repurchase Price Interest accrued from the last
day of the Maximum Term to the date that such payment is received by the
Lessor).

15. ODOMETER DISCLOSURE REQUIREMENT. Each Lessee agrees to comply
with all requirements of law and, with respect to Repurchase Vehicles, all
Repurchase Program requirements in connection with the transfer of ownership of
any Vehicle by the Lessor, including, without limitation, the submission of any
required odometer disclosure statement at the time of any such transfer of
ownership.

16. GENERAL INDEMNITY.

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<PAGE> 29

and all claims, demands and liabilities of whatsoever nature and all costs and
expenses relating to or in any way arising out of:

16.1.2. 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
and local income taxes (including any taxes which are payable by the
Lessor as a result of it being a member of the consolidated Lessee
Group), 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, rental, use, operation,
control, ownership or disposition of any Vehicle or measured in any
way by the value thereof or by the business of, investment in, or
ownership by the Lessor with respect thereto and (ii) documentary,
stamp, filing, recording, mortgage or other taxes, if any, which may
be payable by the Lessor in connection with this Agreement or the
other Related Documents;

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

16.1.4. all-out-of-pocket costs of the Lessor (including the
fees and out-of-pocket expenses of counsel

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<PAGE> 30

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, 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;

16.1.6. all costs, fees, expenses, damages and liabilities
(including, without limitation, the fees and out-of-pocket expenses of
counsel) in connection with, or arising out of, any claim made by any
third party against the Lessor for any reason (including, without
limitation, with respect to Repurchase Vehicles in connection with any
audit or investigation conducted by a Manufacturer under its
Repurchase Program).

16.2. Reimbursement Obligation by the Lessee Group. Each member of
the Lessee Group shall forthwith upon demand reimburse the Lessor for any sum
or sums expended with respect to any of the foregoing, or shall pay such
amounts directly upon request from the Lessor; provided, however, that, if so
requested by the relevant member of the Lessee Group, the Lessor shall submit
to such member of the Lessee Group a statement documenting any such demand for
reimbursement or prepayment. To the extent that the relevant member of the
Lessee Group in fact indemnifies the Lessor under the indemnity provisions of
this Agreement, such member of the Lessee Group shall be subrogated to the
Lessor's rights in the affected transaction and shall have a right to determine
the settlement of claims therein. The foregoing indemnity as contained in this
Section 16 shall survive the expiration or earlier termination of this
Agreement or any lease of any Vehicle hereunder.

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<PAGE> 31

participate in any such defense at its own expense provided such participation
does not interfere with the relevant member of the Lessee Group's assertion of
such claim or defense. The relevant member of the Lessee Group agrees that no
Indemnified Person will be liable to such member of the Lessee Group for any
claim caused directly or indirectly by the inadequacy of any Vehicle for any
purpose or any deficiency or defect therein or the use or maintenance thereof
or any repairs, servicing or adjustments thereto or any delay in providing or
failure to provide such or any interruption or loss of service or use thereof
or any loss of business, all of which shall be the risk and responsibility of
such member of the Lessee Group. 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 either no longer a party to (or entitled to receive the
benefits of) this Agreement, or was not a party to (or entitled to receive the
benefits of) this Agreement at its outset. Except as otherwise set forth
herein, nothing herein shall be deemed to require the relevant member of the
Lessee Group to indemnify the Lessor for any of the Lessor's acts or omissions
which constitute gross negligence or willful misconduct. This general
indemnity shall not affect any claims of the type discussed above which the
relevant member of the Lessee Group may have against the Manufacturer.

17. ASSIGNMENT

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<PAGE> 32

18. DEFAULT AND REMEDIES THEREFOR.

18.1. 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:

18.1.1. there occurs (i) a default in the payment of any
Monthly Base Rent and the continuance thereof for a period of five
days, (ii) a default in the payment of any Monthly Variable Rent,
Monthly Supplemental Rent or, with respect to Non-Repurchase Vehicles,
Additional Base Rent and the continuance thereof for five days or
(iii) a default and continuance thereof for five Business Days after
notice thereof by the Lessor or the Trustee to the Lessee Group in the
payment of any amount payable under this Agreement (other than amounts
described in clause (i) or (ii) above);

18.1.2. any unauthorized assignment or transfer of this
Agreement by any member of the Lessee Group occurs;

18.1.3. the failure, in any material respect, of the Lessee
Group to maintain, or cause to be maintained, insurance as required in
Section 5 or Section 31.3;

18.1.4. subject to the provisions of Section 20 hereof
regarding Lessee Partial Wind-Down Events, the failure of the Lessee
Group to observe or perform any other material covenant, condition,
agreement or provision hereof, including, but not limited to, usage
and maintenance, and such default continues for more than thirty (30)
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 or the Trustee to
such Lessee; provided, however, that if such failure cannot reasonably
be cured within such thirty (30) day period, no Lease Event of Default
shall result therefrom so long as, within such thirty (30) day period,
such Lessee (i) commences to cure same, (ii) delivers written notice
to the Lessor and the Trustee notifying the Lessor and the Trustee of
such default and setting forth the steps such Lessee intends to take
in order to cure such default and (iii) thereafter diligently
prosecutes such cure to completion and completely cures such default
on or before the fiftieth (50th) day after the earlier of the dates
set forth in clause (a) and clause (b) above;

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<PAGE> 33

after notice thereof from the Lessor or the Trustee to the Lessee
Group;

18.1.6. subject to the provisions of Section 20 hereof
regarding Lessee Partial Wind-Down Events, an Event of Bankruptcy
occurs with respect to any member of the Lessee Group; or

18.1.7. a Lease Event of Default occurs under the Amended and
Restated Motor Vehicle Lease Agreement, dated as of December 1, 1996,
or any other Non-Repurchase Vehicle Lease.

18.2. Effect of Lease Event of Default. If (i) a Lease Event of
Default described in Section 18.1.1, 18.1.2 or 18.1.6 shall occur, then the
Monthly Base Rent (calculated as if all Vehicles had become a Casualty for the
Related Month), the Monthly Variable Rent (calculated as if the full amount of
interest, principal and other charges under the outstanding Series 1996-1 Notes
were then due and payable in full), the Monthly Supplemental Rent (calculated
as if the full amount of interest, principal and other charges under the
outstanding Series 1996-1 Notes were then due and payable in full) and, with
respect to Non-Repurchase Vehicles, the Additional Base Rent, if any, shall,
automatically, without further action by the Lessor or the Trustee, become
immediately due and payable or (ii) any other Lease Event of Default or any
Liquidation Event of Default shall occur, the Lessor or the Trustee may declare
the Rent (calculated as described in clause (i) above) to be due and payable,
whereupon such Rent (as so calculated) shall, subject to Section 18.5, become
immediately due and payable.

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<PAGE> 34

thereof) and/or the right of possession hereunder of the Lessee Group
(or the applicable member(s) thereof) as to the Vehicles, and the
Lessor may direct delivery by the Lessee Group (or the applicable
member(s) thereof) of documents of title to the Vehicles, whereupon
all rights and interests of the Lessee Group (or the applicable
member(s) thereof) to the Vehicles will cease and terminate (but the
Lessee Group (or the applicable member(s) thereof) will remain liable
hereunder as herein; provided, however, the Lessee Group's liability
will be calculated in accordance with Section 18.5); and thereupon,
the Lessor or its agents may peaceably enter upon the premises of the
applicable Lessee(s) 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 Group (or the
applicable member(s) thereof), or their successors or assigns, to use
the Vehicles for any purpose whatsoever, and the Lessor will,
nevertheless, have a right to recover from the Lessee Group (or the
applicable member(s) thereof) any and all amounts which under the
terms of Section 18.2 (as limited by Section 18.5) of this Agreement
may be then due. The Lessor will provide the Lessee Group (or the
applicable member(s) thereof) with written notice of the place and
time of the sale at least five days prior to the proposed sale, which
shall be deemed commercially reasonable, and any 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
Lessees will in any case be calculated in accordance with Section
18.5. All such powers and remedies will be cumulative, and the
exercise of one will not be deemed a waiver of the right to exercise
any other or others. No delay or omission of the Lessor in the
exercise of any such power or remedy and no renewal or extension of
any payments due hereunder will impair any such power or remedy or
will be construed to be a waiver of any default or any acquiescence
therein. Any extension of time for payment hereunder or other
indulgence duly granted to the Lessee Group (or the applicable
member(s) thereof) will not otherwise alter or affect the Lessor's
rights or the obligations hereunder of the Lessee Group (or the
applicable member(s) thereof). 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 herein; or

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<PAGE> 35

(iii) By notice in writing to the Lessee Group (or such
member(s) thereof against which the Lessor determines to exercise its
remedies hereunder), terminate the Power of Attorney.

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

(i) If a Liquidation Event of Default or a Limited
Liquidation Event of Default or, with respect to Repurchase Vehicles,
a Manufacturer Event of Default, shall have occurred and be
continuing, the Lessor and the Trustee, to the extent provided in the
Indenture, shall have the rights against the Guarantor, each Lessee,
each Manufacturer in connection with any Manufacturer Event of Default
and the Collateral provided in the Indenture (including, without
limitation, in connection with a Manufacturer Event of Default, the
rights granted under Section 9.3 of the Indenture) upon a Liquidation
Event of Default or Limited Liquidation Event of Default, including
the right to take possession of all Vehicles immediately from the
Lessees.

(ii) With respect to Repurchase Vehicles, if the Guarantor or
any Lessee shall default in the due performance and observance of any
of its obligations under Section 31.3, 31.4, 31.5(iv), 31.8, 32.3 or
32.4 hereof, and such default shall continue unremedied for a period
of 30 days after notice thereof shall have been given to the Guarantor
by the Lessor, the Lessor or the Trustee, as assignee of the Lessor's
rights hereunder, shall have the ability to exercise all rights,
remedies, powers, privileges and claims of the Guarantor or any Lessee
against the Manufacturers under or in connection with the Repurchase
Programs with respect to (i) Repurchase Vehicles the Guarantor or any
Lessee has determined to turn back to the Manufacturers under such
Repurchase Programs and (ii) whether or not the Guarantor or any
Lessee shall then have determined to turn back such Repurchase
Vehicles, any Repurchase Vehicles for which the applicable Repurchase
Period will end within one week or less.

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<PAGE> 36

completion of Vehicle Perfection and Documentation Requirements on
behalf of the Guarantor or the Lessee as applicable.

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

(v) Upon the occurrence of a Liquidation Event of Default or
Limited Liquidation Event of Default, the Lessor shall have the right
to dispose of (x) those Repurchase Vehicles not accepted by the
related Manufacturer under the applicable Repurchase Program pursuant
to clause (iv) above and (y) the Non-Repurchase Vehicles and to direct
the Guarantor or the applicable Lessee to dispose of such Vehicles in
accordance with its instructions. In addition, the Lessor shall have
all of the rights, remedies, powers, privileges and claims vis-a-vis
the Guarantor or any Lessee, necessary or desirable to allow the
Trustee to exercise the rights, remedies, powers, privileges and
claims given to the Trustee pursuant to Section 9.2 and, with respect
to Repurchase Vehicles, Section 9.3 of the Base Indenture and the
Guarantor and each Lessee acknowledges that it has hereby granted to
the Lessor all of the rights, remedies, powers, privileges and claims
granted to the Trustee pursuant to Article 9 of the Base Indenture and
that, under certain circumstances set forth in the Base Indenture, the
Trustee may act in lieu of the Lessor in the exercise of such rights,
remedies, powers, privileges and claims.

18.5. Measure of Damages. If a Lease Event of Default, Liquidation
Event of Default or Limited Liquidation Event of Default occurs and the Lessor
or the Trustee exercises the remedies granted to the Lessor or the Trustee
under this Article 18, the amount that the Lessor shall be permitted to recover
shall be equal to:

(i) all Rent under this Agreement (calculated as provided in
Section 18.2); plus

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<PAGE> 37

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

(v) an amount equal to all sums realized by the Lessor or the
Trustee from the liquidation of the Vehicles leased hereunder (either
by receipt of payment from the Manufacturers under Repurchase
Programs, from sales of Vehicles to third parties, or otherwise);
provided, however, if an Eligible Repurchase Vehicle is turned back to
the Manufacturer under the applicable Repurchase Program and accepted
for repurchase by such Manufacturer (as evidenced by a Condition
Report indicating that such Repurchase Vehicle conforms to the
requirements for repurchase under such Repurchase Program) the Lessor
and the Trustee shall be deemed to have received on account of this
clause (y) an amount equal to the Net Book Value of such Repurchase
Vehicle (less (a) any Termination Payments and (b) Repurchase Price
Interest (calculated assuming that payment of the Repurchase Price
will be received on the 60th day after the Turnback Date)) payable in
respect of such Repurchase Vehicle).

18.6. Application of Proceeds. The proceeds of any sale or other
disposition pursuant to Section 18.3 or 18.4 shall be applied in the following
order: (i) to the reasonable costs and expenses incurred by the Lessor in
connection with such sale or disposition, including any reasonable costs
associated with repairing any Vehicles, and reasonable attorneys' fees in
connection with the enforcement of this Agreement, (ii) to the payment of
outstanding Rent (such payments to be applied first to outstanding Monthly
Variable Rent, then to outstanding Monthly Supplemental Rent, then to
outstanding Monthly Base Rent, and then, with respect to proceeds related to
any Non-Repurchase Vehicles, to outstanding Additional Base Rent), (iii) to the
payment of all other amounts due hereunder, and (iv) any remaining amounts to
the Lessor, or such Person(s) as may be lawfully entitled thereto.

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<PAGE> 38

19. MANUFACTURER EVENTS OF DEFAULT. Upon the occurrence of any of
the following events (each, a "Manufacturer Event of Default") with respect to
any Manufacturer (subject to the provisions of Section 21 hereof regarding
Eligibility Waiver Events), the relevant Lessee on behalf of the Lessor (a)
shall no longer place Vehicle Orders for (x) any additional Vehicles in the
event of any Manufacturer Event of Default arising under Section 19.1, 19.3 or
19.4 or (y) any additional Repurchase Vehicles in the event of any Manufacturer
Event of Default arising under Section 19.2 or 19.5, from such Manufacturer
(each, a "Defaulting Manufacturer") and (b) shall cancel any Vehicle Order with
such Defaulting Manufacturer to which a VIN has not been assigned as of the
date such Manufacturer Event of Default occurs:

19.1. The failure of such Manufacturer to pay any amount when due
pursuant to the related Repurchase Program with respect to a Repurchase Vehicle
turned in to such Manufacturer or delivered to an authorized auction site
pursuant to the related Repurchase Program; provided, however, that such
failure continues for more than ninety (90) days following the Turnback Date
such that the aggregate of any such amounts not paid for more than 90 days are
in the aggregate in excess of $2,000,000 net of amounts that are the subject of
a good faith dispute as evidenced in writing by either a member of the Lessee
Group or the Manufacturer questioning the accuracy of the amounts paid or
payable in respect of certain Repurchase Vehicles tendered for repurchase, or
delivered to an authorized auction site, under a Repurchase Program.

19.2. The termination of such Manufacturer's Repurchase Program
(subject to the provisions of Section 21 hereof regarding Eligibility Waiver
Events).

19.3. The occurrence of an Event of Bankruptcy with respect to such
Manufacturer.

19.4. Such Manufacturer is no longer an Eligible Manufacturer in the
case of Repurchase Vehicles, or Eligible Non-Repurchase Manufacturer, in the
case of Non-Repurchase Vehicles.

19.5. The Repurchase Program of a Manufacturer shall no longer be an
Eligible Repurchase Program (subject, in each case, to the provisions of
Section 21 hereof regarding Eligibility Waiver Events).

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<PAGE> 39

no longer place Series 1996-1 Vehicle Orders for additional Vehicles and (b)
shall cancel Series 1996-1 Vehicle Orders for Vehicles; provided, however, that
if a Series 1996-1 Vehicle Order has been placed for a Manufacturer Acquired
Vehicle and the related Manufacturer has assigned a VIN as of the date such
Lessee Partial Wind-Down Event occurs, then such Series 1996-1 Vehicle Order
will not be canceled. In the case of a Lessee Partial Wind-Down Event, the
Lessor may (i) exercise any right or remedy in respect only of such Defaulting
Lessee provided for pursuant to the provisions of Section 18.3 or 18.4 hereof
and (ii) terminate the Power of Attorney with respect to such Defaulting
Lessee.

21. ELIGIBILITY WAIVER EVENTS. In the event that a Manufacturer
Event of Default occurs by reason of an event stated in Section 19.2 or 19.5 (a
"Manufacturer Wind-Down Event"), then if (i) the Series Supplement for any
Series of Notes outstanding under the Indenture provides for the right of all
or less than all of the Noteholders to waive such Manufacturer Wind-Down Event
and (ii) the Requisite Noteholders in respect of any Series of Notes waives
such Manufacturer Wind-Down Event, the Lessees may continue to place Vehicle
Orders for the purchase of Repurchase Vehicles or Non-Repurchase Vehicles from
such Defaulting Manufacturer through this Agreement; provided, however, the
total Net Book Value of all Repurchase Vehicles or Non-Repurchase Vehicles
leased hereunder through any Defaulting Manufacturer shall not exceed the
Maximum Defaulting Manufacturer Percentage of the Net Book Value of all
Repurchase Vehicles or Non- Repurchase Vehicles leased under this Agreement;
and, provided, further, that in the event a Lessee seeks any such waiver of a
Manufacturer Wind-Down Event such Lessee shall in connection therewith propose
a Maximum Defaulting Manufacturer Percentage for such Defaulting Manufacturer
and the resulting Maximum Defaulting Manufacturer Percentage shall equal that
percentage of the proposed Maximum Defaulting Manufacturer Percentage which
corresponds to the percentage of Noteholders which consent to such waiver. Any
such waiver by any such Requisite Noteholders shall be referred to as an
"Eligibility Waiver Event".

23. SURVIVAL. In the event that, during the term of this Agreement,
any member of the Lessee Group becomes liable for the payment or reimbursement
of any obligations, claims or taxes

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<PAGE> 40

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 such Lessee.

24. ADDITIONAL LESSEES.

24.1. Additional Affiliate and Subsidiary Lessees. Any Affiliate of
or direct or indirect Subsidiary of the Guarantor (each, a "Guarantor
Subsidiary") shall have the right to become a "Lessee" under and pursuant to
the terms of this Agreement by complying with the provisions of this Section
24.1. In the event a Guarantor Subsidiary desires to become a "Lessee" under
this Agreement, then the Guarantor and such Guarantor Subsidiary shall execute
(if appropriate) and deliver to the Lessor and the Trustee:

(i) a Joinder in Lease Agreement in the form attached hereto
as Attachment C-1 (each, an "Affiliate Joinder in Lease");

(ii) the certificate of incorporation for such Guarantor
Subsidiary, duly certified by the Secretary of State of the
jurisdiction of such Guarantor Subsidiary's incorporation, together
with a copy of the by-laws of such Guarantor Subsidiary, duly
certified by a Secretary or Assistant Secretary of such Guarantor
Subsidiary;

(iv) a certificate of the Secretary or Assistant Secretary of
such Guarantor Subsidiary certifying the names of the individual or
individuals authorized to sign the Affiliate Joinder in Lease
Agreement and the other Related Documents to be executed by it,
together with samples of the true signatures of each such individual;

(v) a good standing certificate for such Guarantor Subsidiary
in the jurisdiction of its incorporation and the jurisdiction of its
principal place of business;

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<PAGE> 41

statements, and tax and judgment lien search reports from a Person
satisfactory to the Lessor and the Trustee showing no evidence of
liens filed against such Guarantor Subsidiary that purport to affect
any Vehicles leased hereunder or any Collateral under the Indenture;

(viii) an Officers' Certificate and an opinion of counsel
each stating that such joinder by such Guarantor Subsidiary complies
with this Section 24.1 and that all conditions precedent herein
provided for relating to such transaction have been complied with;

(ix) a statement from each of the Rating Agencies that such
Guarantor Subsidiary becoming a "Lessee" under this Agreement will not
cause a failure to meet the Rating Agency Condition; and

(x) any additional documentation that the Lessor or the
Trustee may require to evidence the assumption by such Guarantor
Subsidiary of the obligations and liabilities set forth in this
Agreement.

Upon satisfaction of the foregoing conditions and receipt by such Guarantor
Subsidiary of the applicable Affiliate Joinder in Lease executed by the Lessor,
such Guarantor Subsidiary shall for all purposes be deemed to be a "Lessee" for
purposes of this Agreement and shall be entitled to the benefits and subject to
the liabilities and obligations of a Lessee hereunder.

24.2. Additional Non-Affiliate Lessees. Any party which is not an
Affiliate of the Guarantor (each, a "Non- Affiliate") shall have the right to
become a "Lessee" under and pursuant to the terms of this Agreement by
complying with the provisions of this Section 24.2. In the event a
Non-Affiliate desires to become a "Lessee" under this Agreement, then the
Guarantor and such Non-Affiliate shall execute (if appropriate) and deliver to
the Lessor and the Trustee:

(i) a Joinder in Lease Agreement in the form attached hereto
as Attachment C-2 (each, a "Non-Affiliate Joinder in Lease");

(ii) the certificate of incorporation for such Non-Affiliate,
duly certified by the Secretary of State of the jurisdiction of such
Non-Affiliate's incorporation, together with a copy of the by-laws of
such Non- Affiliate, duly

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<PAGE> 42

certified by a Secretary or Assistant Secretary of such Non-Affiliate;

(iii) copies of resolutions of the Board of Directors of such
Non-Affiliate authorizing or ratifying the execution, delivery and
performance, respectively, of those documents and matters required of
it with respect to this Agreement, duly certified by the Secretary or
Assistant Secretary of such Non-Affiliate;

(iv) a certificate of the Secretary or Assistant Secretary of
such Non-Affiliate certifying the names of the individual or
individuals authorized to sign the Non-Affiliate Joinder in Lease and
the other Related Documents to be executed by it, together with
samples of the true signatures of each such individual;

(v) a good standing certificate for such Non-Affiliate in the
jurisdiction of its incorporation and the jurisdiction of its
principal place of business;

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

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

(viii) an Officers' Certificate and an opinion of counsel
each stating that such joinder by such Non- Affiliate complies with
this Section 24.2 and that all conditions precedent herein provided
for relating to such transaction have been complied with;

(ix) a statement from each of the Rating Agencies that such
Non-Affiliate becoming a "Lessee" under this Agreement will not cause
a failure to meet the Rating Agency Condition; and

(x) any additional documentation that the Lessor or the
Trustee may require to evidence the assumption by such

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<PAGE> 43

Non-Affiliate of the obligations and liabilities set forth in this
Agreement.

Upon satisfaction of the foregoing conditions and receipt by such Non-Affiliate
of the applicable Non-Affiliate Joinder in Lease executed by the Lessor, such
Non-Affiliate shall for all purposes be deemed to be a "Lessee" for purposes of
this Agreement and shall be entitled to the benefits and subject to the
liabilities and obligations of a Lessee hereunder.

26. GUARANTY.

26.1. Guaranty. In order to induce the Lessor to execute and deliver
this Agreement and to lease Vehicles to the Lessees, and in consideration
thereof, the Guarantor hereby (i) unconditionally and irrevocably guarantees to
the Lessor the obligations of the Lessees to make any payments required to be
made by them under this Agreement, (ii) agrees to cause the Lessees to duly and
punctually perform and observe all of the terms, conditions, covenants,
agreements and indemnities of the Lessees under this Agreement, and (iii)
agrees that, if for any reason whatsoever, any Lessee fails to so perform and
observe such terms, conditions, covenants, agreements and indemnities, the
Guarantor will duly and punctually perform and observe the same (the
obligations referred to in clauses (i) through (iii) above are collectively
referred to as the "Guaranteed Obligations"). The liabilities and obligations
of the Guarantor under the guaranty contained in this Section 26 (this
"Guaranty") will be absolute and unconditional under all circumstances. This
Guaranty shall be a guaranty of payment and not of collection, and the
Guarantor hereby agrees that it shall not be required that the Lessor or the
Trustee assert or enforce any rights against any of the Lessees or any other
person before or as a condition to the obligations of the Guarantor pursuant to
this Guaranty.

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<PAGE> 44

or any other Person, or any security held by the Lessor, and regardless of
whether the Lessees or any other guarantor or any other Person is joined in any
such action. The Guarantor's liability hereunder shall at all times remain
effective with respect to the full amount due from the Lessees hereunder,
notwithstanding any limitations on the liability of the Lessees to the Lessor
contained in any of the Related Documents or elsewhere. The Lessor's rights
hereunder shall not be exhausted by any action taken by the Lessor until all
Guaranteed obligations have been fully paid and performed. The liability of
the Guarantor hereunder shall be reinstated and revived, and the rights of the
Lessor shall continue, with respect to any amount at any time paid on account
of the Guaranteed Obligations which shall thereafter be required to be restored
or returned by the Lessor upon the bankruptcy, insolvency or reorganization of
any of the Lessees, any other guarantor or any other Person, or otherwise, all
as though such amount had not been paid.

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

(a) all statutes of limitation as a defense to any action
brought by the Lessor against the Guarantor;

(b) any defense based upon:

(i) the unenforceability or invalidity of all or
any part of the Guaranteed Obligations or any security or
other guaranty for the Guaranteed Obligations or the

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<PAGE> 45

lack of perfection or failure of priority of any security for
the Guaranteed Obligations; or

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

(i) accelerate the Guaranteed Obligations;

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

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

(d) all rights of subrogation, all rights to enforce any
remedy that the Lessor now or hereafter has against any Lessee or any
other Person, and any benefit of, and right to participate in, any
security now or hereafter held by the Lessor with respect to the
Guaranteed Obligations;

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

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

(g) all other rights and defenses the assertion or exercise
of which would in any way diminish the liability of the Guarantor
hereunder.

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<PAGE> 46

Lessees to the Guarantor or the Guarantor to any of the Lessees (hereinafter
collectively referred to as "Subordinated Debt") shall be and hereby are
expressly subordinated to the Guaranteed Obligations on the terms set forth in
clauses (a) through (e) below, and the payment thereof is expressly deferred in
right of payment to the prior payment in full of the Guaranteed Obligations.
For purposes of this Section 26.5, to the extent the Guaranteed Obligations
consist of the obligation to pay money, the Guaranteed Obligations shall not be
deemed paid in full unless and until paid in full in cash.

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

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

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<PAGE> 47

(d) Nothing express or implied herein shall give any Person
other than the Lessees, the Lessor, the Trustee and the Guarantor any
benefit or any legal or equitable right, remedy or claim hereunder.

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<PAGE> 48

respective property, or otherwise, all as though such payment had not been
made.

(i) Subject to the terms of the Indenture, the Trustee shall
have all the rights, powers, privileges and remedies of the Lessor
hereunder and the Guarantor's and the relevant Lessee's obligations
hereunder shall not be subject to any claim or defense which the
Guarantor or such Lessee may have against the Lessor (other than the
defense of payment actually made). Specifically, each member of the
Lessee Group agrees that, upon the occurrence of an Amortization Event
or, subject to the provisions of Section 20 hereof, a Lessee Partial
Wind-Down Event or, with respect to Repurchase Vehicles, subject to
the provisions of Section 19, a Manufacturer Event of Default, the
Trustee may exercise (for and on behalf of the Lessor) any right or
remedy against any member of the Lessee Group provided for herein and
no member of the Lessee Group will interpose as a defense that such
claim should have been asserted by the Lessor;

(ii) Upon the delivery by the Trustee of any notice to any
member of the Lessee Group stating that a Manufacturer Event of
Default, an Amortization Event or Lessee Partial Wind-Down Event with
respect to such Lessee has occurred, then such member of the Lessee
Group, will, if so requested by the Trustee, treat the Trustee or the
Trustee's designee for all purposes as the Lessor hereunder and in all
respects comply with all obligations under this Agreement that are
asserted by the Trustee as the successor to the Lessor hereunder,
irrespective of whether such member of the Lessee Group has received
any such notice from the Lessor; provided, however, the Trustee, shall
in no event be liable to any Lessee for any action taken by it in its
capacity as successor to the Lessor other than actions that constitute
negligence or willful misconduct;

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<PAGE> 49

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<PAGE> 50

30.1. Due Organization, Authorization, Etc. The Guarantor and each
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 such Lessee or the Guarantor, as applicable. The
execution, delivery and performance by the Guarantor and each 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, without limitation, shareholder approval, if
required), have received all necessary governmental and other consents and
approvals (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 Guarantor or
such Lessee, as applicable. This Agreement and each other Related Document to
be executed and delivered by it are (or when executed and delivered will be)
the legal, valid, and binding obligations of the Guarantor or such Lessee,
enforceable against the Guarantor or such Lessee, as the case may be, in
accordance with their respective terms, subject to bankruptcy, insolvency and
other laws affecting the enforcement of creditors' rights. Each Lessee is a
direct or indirect Subsidiary of the Guarantor.

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<PAGE> 51

(a) the audited consolidated balance sheets of "Team Rental
Group" and each Non-Team Lessee as of December 31, 1995 and the
related statements of operations, stockholders' deficit and cash flows
for the fiscal year ending on such date; and

(b) (i) the unaudited pro forma consolidated balance sheets
of the Guarantor and the Team Lessees and statement of operations,
accompanied by an Officers' Certificate verifying the accuracy and
completeness thereof signed by an Authorized Officer of the Guarantor,
for the nine-month period ending September 30, 1996, and (ii) the
unaudited pro forma consolidated balance sheets of each Non-Team
Lessee and statement of operations, accompanied by an Officers'
Certificate verifying the accuracy and completeness thereof signed by
an Authorized Officer of such Non-Team Lessee, for the nine-month
period ending September 30, 1996.

30.3. Litigation. Except for claims which are fully covered by
insurance provided by a Person who is not an Affiliate of Team, no claims,
litigation (including, without limitation, derivative actions), arbitration,
governmental investigation or proceeding or inquiry is pending or, to the best
of the Guarantor's or such Lessee's knowledge, threatened against the Guarantor
or any Lessee which would, if adversely determined, have a Material Adverse
Effect on the Guarantor or such Lessee, as applicable.

30.4. Liens. The Vehicles leased under this Agreement are free and
clear of all Liens other than (i) Permitted Liens and (ii) Liens in favor of
the Trustee. The Trustee has obtained, and will continue to obtain, as
security for the liabilities under the Indenture and the Notes, a first
priority perfected Lien on all Vehicles leased under this Agreement. Except as
otherwise permitted under the Indenture, all Vehicle Perfection and
Documentation Requirements with respect to all Vehicles leased under this
Agreement on or after the date hereof have and will continue to be satisfied.

30.5. Employee Benefit Plans. (a) During the twelve consecutive
month period prior to such Closing Date: (i) except for any termination of a
Pension Plan in connection with an acquisition or merger by the Guarantor,
which termination is made in conjunction with the offering by the Guarantor of
a successor Pension Plan, no steps have been taken by the Guarantor or any
Lessee 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 Guarantor or any

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<PAGE> 52

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 Guarantor or such Lessee, as applicable, and (c) neither the Guarantor nor
any Lessee has any material contingent liability with respect to any
post-retirement benefits under a Welfare Plan, other than liability for
continuation coverage described in Subtitle B of Part 6 of Title I of ERISA and
liabilities which would not have a Material Adverse Effect upon the Guarantor
or such Lessee, as applicable.

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

30.8. Business Locations; Trade Names; Principal Places of Business
Locations. Schedule 30.8 lists each of the locations where each Lessee and the
Guarantor maintains a chief executive office, principal place of business, or
any records; and Schedule 30.8 also lists each Lessee's and the Guarantor's
legal name, each name under or by which each Lessee and the Guarantor conducts
its business, each state in which each Lessee and the Guarantor conducts
business and each state in which each Lessee and the Guarantor has its
principal place of business.

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<PAGE> 53

30.10. Governmental Authorization. The Guarantor and each 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
authorizations would not have a Material Adverse Effect on the Guarantor or
such Lessee, as applicable.

30.11. Compliance with Laws. The Guarantor and each Lessee: (i) is
not in violation of any Requirement of Law, which violation would have a
Material Adverse Effect on the Guarantor or such Lessee, as applicable, and to
the best knowledge of the Guarantor and the Lessees, 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 true, correct and complete in
all material respects), except where failure to make such filings would not
have a Material Adverse Effect on the Guarantor or such 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 Guarantor or such Lessee, as
applicable.

30.12. Eligible Vehicles. Each Repurchase Vehicle is or will be, as
the case may be, on the Vehicle Lease Commencement Date with respect to such
Repurchase Vehicle, an Eligible Repurchase Vehicle. Each Non-Repurchase
Vehicle is or will be, as the case may be, on the Vehicle Lease Commencement
Date with respect to such Vehicle, an Eligible Non- Repurchase Vehicle.

30.13. Supplemental Documents True and Correct. All information
contained in any Series 1996-1 Vehicle Order or other Supplemental Document
which has been submitted, or which may hereafter be submitted by a 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 the Series 1996-1 Notes.

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<PAGE> 54

31.1. 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 Guarantor and each Lessee (it being understood that
subject to Section 32.1(i) each Team Lessee shall remain a direct or indirect
wholly-owned Subsidiary of the Guarantor); (ii) be, and ensure that each Lessee
is, 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 Guarantor or such Lessee, as applicable; 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 Guarantor or such Lessee, as applicable.

31.2. Books, Records and Inspections. (i) Maintain complete and
accurate books and records with respect to the Vehicles leased by it under this
Agreement; (ii) at any time and from time to time during regular business
hours, and with reasonable prior notice from the Lessor or the Trustee, permit
the Lessor or the Trustee (or such other person who may be designated from time
to time by the Lessor 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 Guarantor or such Lessee relating to the Vehicles
leased under this Agreement including, without limitation, with respect to
Repurchase Vehicles leased hereunder, in connection with the Trustee's
satisfaction of any requests of a Manufacturer performing an audit under its
Repurchase Program; and (iii) permit the Lessor or the Trustee (or such other
person who may be designated from time to time by the Lessor or the Trustee),
or its agents or representatives to visit the office and properties of the
Guarantor or such Lessee for the purpose of examining such materials, and to
discuss matters relating to the Vehicles leased hereunder or the Guarantor's or
such Lessee's performance under this Agreement with any of the officers or
employees of the Guarantor or such Lessee having knowledge of such matters.

31.3. Insurance. In addition to the obligations set forth in Section
5 hereof, the Guarantor, on behalf of each Team Lessee, and each Non-Team
Lessee, on its own behalf, shall maintain or cause to be maintained, with
financially sound and reputable insurers satisfactory to the Lessor, insurance
with respect to their respective properties and businesses 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, and the Guarantor, on behalf of each
Team Lessee, and each Non-Team Lessee, on its own

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behalf, shall, from time to time upon the Lessor's or the Trustee's reasonable
request, deliver to the Lessor and Trustee, copies of certificates describing
all insurance then in effect. All self-insurance maintained by any member of
the Lessee Group shall be maintained in a financially prudent manner.

31.4. Repurchase Programs. With respect to each Repurchase Vehicle
leased by each Lessee (a) unless previously purchased by such Lessee pursuant
to this Agreement, turn in such Repurchase Vehicle to the relevant Manufacturer
within the Repurchase Period therefor, (b) dispose of such Repurchase Vehicle
under the applicable Repurchase Program according to its historical practice
and in accordance with the requirements of such Repurchase Program, and (c)
comply with all of its (and the Lessor's) obligations under the applicable
Repurchase Program.

31.5. Reporting Requirements. Furnish, or cause to be furnished to
the Lessor:

(i) Audit Report. (a) As soon as available and in any event
within one hundred ten days after the end of each fiscal year of the
Guarantor, a copy of the consolidated balance sheet of the Guarantor
and its Subsidiaries as at the end of such fiscal year, together with
the related statements of earnings, stockholders' equity and cash
flows for such fiscal year, prepared in reasonable detail and in
accordance with GAAP certified by independent certified public
accountants of recognized national standing as shall be selected by
the Guarantor; and (b) as soon as available and in any event within
one hundred ten days after the end of each fiscal year of any Non-Team
Lessee, a copy of the consolidated balance sheet of such Non-Team
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 certified by independent certified public
accountants of recognized national standing as shall be selected by
such Non- Team Lessee.

(ii) Quarterly Statements. (a) As soon as available, but in
any event within 45 days after the end of each fiscal quarter (except
the fourth fiscal quarter) of the Guarantor, copies of the unaudited
consolidated balance sheet of the Guarantor 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

- 51 -
<PAGE> 56

in reasonable detail and in accordance with GAAP applied consistently
throughout the periods reflected therein and certified by the chief
financial or accounting officer of the Guarantor as presenting fairly
the financial condition and results of operations of the Guarantor and
its Subsidiaries (subject to normal year-end adjustments); and (b) as
soon as available, but in any event within 45 days after the end of
each fiscal quarter (except the fourth fiscal quarter) of any Non-Team
Lessee, copies of the unaudited consolidated balance sheet of such
Non-Team 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 such Non-Team Lessee as presenting
fairly the financial condition and results of operations of such
Non-Team Lessee and its Subsidiaries (subject to normal year-end
adjustments).

- 52 -
<PAGE> 57

Vehicles that have been turned back to Manufacturers pursuant to the
applicable Repurchase Program during the Related Month and the
Repurchase Prices therefor and those Vehicles that have been delivered
to a designated auction site pursuant to the applicable Repurchase
Program and the Guaranteed Payments therefor, or that have been
otherwise sold during the Related Month, (vi) those Vehicles that have
become Casualties during the Related Month and their respective Net
Book Values or Non-Repurchase Vehicle Values, as applicable (as
calculated immediately prior to the event causing such Vehicles to
become Casualties), (vii) the amount of Disposition Proceeds in
respect of Repurchase Vehicles or Non-Repurchase Vehicles sold during
the Related Month, (viii) the Repurchase Prices received during the
Related Month and any Guaranteed Payments received pursuant to a
Repurchase Program during the Related Month, (ix) the aggregate
Depreciation Charges for all Vehicles continuing in the possession of
the Lessee, (x) the total amount of Monthly Base Rent, Monthly
Variable Rent, Monthly Supplemental Rent, Additional Base Rent and
Termination Payments being paid on such date, (xi) information with
respect to such Lessee necessary for the Servicer to compute the
Aggregate Non- Repurchase Asset Amount, the Aggregate Asset Amount and
the Aggregate Segregated Repurchase Asset Amount with respect to the
Series 1996-1 Notes as of the end of the Related Month, (xii)
information with respect to such Lessee necessary for the Servicer to
compute the Monthly Supplemental Rent for such Lessee with respect to
the Related Month, (xiii) any other charges owing from, and credits
due to, the Lessee submitting such Statement under this Agreement, and
(xiv) all prepayments of Rent received during the Related Month from
Guaranteed Payments, Repurchase Prices and Disposition Proceeds
received by the Lessor during the Related Month from the
Manufacturers, auctions and other Persons, as the case may be;

(v) 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, 1997, 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 to the Lessor, the Trustee and the Rating Agencies
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-Repurchase Vehicles (other
than Casualties) sold or otherwise disposed of during each Related
Month in such period and compared such calculations

- 53 -
<PAGE> 58

of Disposition Proceeds with the corresponding amounts set forth in
the Daily Reports prepared by the Servicer pursuant to Section 4.4(a)
of the Indenture 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; and

(vi) Other. Promptly, from time to time, such other
information, documents, or reports respecting the Vehicles leased
under this Agreement or the condition or operations, financial or
otherwise, of the Guarantor or the Lessees as the Lessor or the
Trustee may from time to time reasonably request in order to protect
the interests of the Lessor or the Trustee under or as contemplated by
this Agreement or any other Related Document.

31.8. Maintenance of Separate Existence. The Guarantor and each
Lessee acknowledges its receipt of a copy of that certain opinion letter issued
by Dechert Price & Rhoads, dated December __, 1996 and addressing the issue of
substantive consolidation as it may relate to the Guarantor, each Lessee and
the Lessor. The Guarantor and each Lessee hereby agrees to maintain in place
all policies and procedures, and take and continue to take all action,
described in the factual assumptions set forth in such opinion letter and
relating to such Person.

- 54 -
<PAGE> 59

31.10. Retitling. In connection with the acquisition by the Lessor
of Vehicles pursuant to Sections 2.1(b) and 2.1(d), the Lessee requesting the
acquisition of such Vehicle shall, within thirty (30) days of such acquisition,
complete the retitling process with respect to such Vehicle, naming the Lessor
as the owner of such Vehicle on the related Certificate of Title and noting
thereon the Trustee's security interest in such Vehicle; provided, however,
that such Lessee shall provide the Trustee with written notice of the
completion of such retitling process.

32.1. Mergers, Consolidations. Be a party to any merger or
consolidation, other than: (i) a merger or consolidation of any Subsidiary of
the Guarantor into or with the Guarantor (provided, however, that the Guarantor
is the surviving corporation) or any merger or consolidation of any Subsidiary
of the Guarantor with or into another Subsidiary of the Guarantor, and (ii) a
merger or consolidation of the Guarantor or any Subsidiary into or with another
entity if:

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

(b) the Guarantor or such Subsidiary 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 32.1 and that all conditions
precedent herein provided for relating to such transaction have been
complied with; and

32.2. Other Agreements. Enter into any agreement containing any
provision which would be violated or breached by

- 55 -
<PAGE> 60

the performance of its obligations hereunder or under any instrument or
document delivered or to be delivered by it hereunder or in connection
herewith.

32.3. 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 or the Trustee or the Secured Parties and the following
Liens to the extent such liens in the aggregate would not materially adversely
affect the interests of the Lessor or the Trustee or the Secured Parties under
this Agreement or the Indenture or the likelihood of payment of Rent hereunder
or the Notes thereunder (herein collectively called the "Permitted Liens"):
(i) Liens for current taxes not delinquent or for taxes being contested in good
faith and by appropriate proceedings, and with respect to which adequate
reserves have been established, and are being maintained, in accordance with
GAAP, (ii) Liens, including judgment liens, arising in the ordinary course of
business being contested in good faith and by appropriate proceedings, and with
respect to which adequate reserves have been established, and are being
maintained, in accordance with GAAP, (iii) Liens incurred in the ordinary
course of business in connection with worker's compensation, unemployment
insurance or other forms of governmental insurance or benefits, and (iv)
mechanics', materialmen's, landlords', warehousemen's and carriers' 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.

32.4. Use of Vehicles. Knowingly use or allow the Vehicles to be
used in any manner that would (i) make any Repurchase Vehicle ineligible for
repurchase, or for the guarantee by the related Manufacturer of the resale
price thereof, under an Eligible Repurchase Program (subject to the provisions
of Section 21 regarding Eligibility Waiver Events) or (ii) subject Vehicles to
confiscation.

33. BANKRUPTCY PETITION AGAINST LESSOR. The Guarantor and each
Lessee hereby covenants and agrees that, prior to the date which is one year
and one day after the payment in full of the Series 1996-1 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 Guarantor or any Lessee
takes action in violation of this Section 33, 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

- 56 -
<PAGE> 61

by the Guarantor or any such Lessee against the Lessor or the commencement of
such action and raise the defense that the Guarantor or any such 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 counsel advises that it may
assert. The provisions of this Section 33 shall survive the termination of
this Agreement.

34. SUBMISSION TO JURISDICTION. The Lessor 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. For the purpose of any action
or proceeding instituted with respect to any such claim, the Guarantor and each
Lessee hereby irrevocably submits to the jurisdiction of such courts. Each
Lessee hereby irrevocably designates the Guarantor to receive for and on behalf
of such Lessee service of process in New York. The Guarantor and each 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 Guarantor
or such Lessee, as the case may be, 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 Trustee and the
Lessor to serve process in any other manner permitted by law or preclude the
Lessor 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
Guarantor and each Lessee hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may have 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 and any claim that any such suit, action
or proceeding brought in such a court has been brought in an inconvenient
forum.

- 57 -
<PAGE> 62

shall be in addition to and not in limitation of those provided by applicable
law or in any other written instrument or agreement.

TRUSTEE: Bankers Trust Company
4 Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency
Group/Structured Finance
Telephone: (212) 250-6533
Fax: (212) 250-6439

LESSOR: Team Fleet Financing Corporation
5851 Lewis Road
Sandston, Virginia 23150
Attention: Donald J. Norwalk
Telephone: (804) 222-5310
Fax: (804) 222-8998

- 58 -
<PAGE> 63

38. LIABILITY. Each member of the Lessee Group shall be held jointly
and severally liable for all of the obligations of each other member of the
Lessee Group hereunder.

40. HEADINGS. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.

42. EFFECTIVENESS. This Agreement shall become effective
concurrently with the issuance of the Series 1996-1 Notes.

- 59 -
<PAGE> 64

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:

TEAM FLEET FINANCING CORPORATION

By: Sanford Miller
----------------------------------
Name: Sanford Miller
Title: Chairman and Chief
Executive Officer

Address: 5851 Lewis Road
Sandston, Virginia 23150
Attention: Donald J. Norwalk
Telephone: (804) 222-5310
Telefax: (804) 222-8998

LESSEES:

TRANEX RENTALS OF NEW YORK, INC.

By: Donald J. Norwalk
---------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: 875 Albany Shaker Road
Latham, New York 12110

Attention: Mr. Richard Sapia
Telephone: (518) 785-4716
Telefax: (518) 784-5872

CAPITAL CITY LEASING, INC.

By: Donald J. Norwalk
----------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: 5851 Lewis Road
Sandston, Virginia 23150

Attention: Mr. Ken Carpenter
Telephone: (804) 222-5310
Telefax: (804) 222-8998

- 60 -
<PAGE> 65

LEE-AL, INC.

By: Donald J. Norwalk
--------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: 2585 Pacific Highway
San Diego, CA 92101

Attention: Mr. Steve Vaughn
Telephone: (619) 235-8313
Telefax: (619) 235-8734

WESTEAM ENTERPRISES, INC.

By: Donald J. Norwalk
--------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: 2554 California Street
San Diego, CA 92103

Attention: Mr. Steve Vaughn
Telephone: (619) 235-8313
Telefax: (619) 235-8734

TEAM RENTAL OF PHILADELPHIA, INC.

By: Donald J. Norwalk
--------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: Arrivals Road
Philadelphia Int'l Airport
Philadelphia, PA 19153
Pittsburgh, PA 15231

Attention: Mr. John Umina
Telephone: (215) 492-9442
Telefax: (215) 492-8401

- 61 -
<PAGE> 66

TEAM RENTAL OF PITTSBURGH, INC.

By: Donald J. Norwalk
--------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: Car rental Access Road
Lot #6
Pittsburgh, PA 15231

Attention: Mr. Ashok Khambhla
Telephone: (412) 472-5083
Telefax: (412) 472-5084

TEAM RENTAL OF CINCINNATI, INC.

By: Donald J. Norwalk
--------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: 2667 Donaldson Road
Hebron, Kentucky 41048

Attention: Mr. Joseph Collins
Telephone: (606) 767-3100
Telefax: (606) 282-1828

MacKAY CAR & TRUCK RENTAL, INC.

By: Donald J. Norwalk
--------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: 4210 Rental Car Road
Charlotte/Douglas APO
Charlotte, NC 28214

Attention:
Telephone:
Telefax:

- 62 -
<PAGE> 67

DON KREMER, INC.

By: Donald J. Norwalk
--------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: 3300 Valet Road
Vandalia, OH 45377

Attention:
Telephone:
Telefax:

TEAM RENTAL OF FT. WAYNE, INC.

By: Donald J. Norwalk
--------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: 2525 Fergusen Road
Ft. Wayne, IN 46809

Attention:
Telephone:
Telefax:

RENTAL CAR RESOURCES, INC

By: Donald J. Norwalk
--------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: Bradley Int'l APO
Windsor Locks, CT 06096

Attention:
Telephone:
Telefax:

- 63 -
<PAGE> 68

BRAC-OPCO, INC.

By: Donald J. Norwalk
--------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: 130 W. Central Avenue
Santa Ana, CA 92707

Attention:
Telephone:
Telefax:

ARIZONA RENT-a-CAR SYSTEMS, INC.

By: Donald J. Norwalk
--------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: 2114 East Mohave
Sky Harbor Int'l. APO
Phoenix, AZ 85034

Attention:
Telephone:
Telefax:

TEAM RENTAL OF ROCHESTER

By: Donald J. Norwalk
--------------------------------
Name: Donald J. Norwalk
Title: Vice President

Address: 308 Buell Road
Rochester, NY 14624

Attention:
Telephone:
Telefax:

- 64 -
<PAGE> 69

GUARANTOR:

TEAM RENTAL GROUP, INC.

By: Jeffrey D. Congdon
---------------------------------
Jeffrey D. Congdon
Chief Financial Officer

Address: 125 Basin Street, Suite 210
Daytona Beach, Florida 32114

Attention: Mr. Sanford Miller
Telephone: (904) 238-7035
Telefax: (904) 238-7461

- 65 -

<PAGE> 1

EXHIBIT 5.1
March 28, 1997

Team Rental Group, Inc.
125 Basin Street
Suite 210
Daytona Beach, Florida 32114

Re: Registration Statement on Form S-1 (File No. 333-21691)

Ladies and Gentlemen:

We have acted as counsel for Team Rental Group, Inc., a Delaware
corporation (the "Company") in connection with the preparation of a
Registration Statement on Form S-1 filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Registration
Statement"), relating to up to 7,575,000 shares of Class A Common Stock of the
Company, par value $.01 per share ("Common Stock") to be sold by the Company
and certain of the Company's stockholders to the underwriters named in the
Registration Statement pursuant to the Underwriting Agreement, the form of
which will be filed as an Exhibit to the Registration Statement (the
"Underwriting Agreement").

Such 7,475,000 shares include 975,000 shares that may be purchased by
the underwriters upon the exercise of an over-allotment option granted to the
underwriters by the Company.

As counsel, we have examined and relied upon such records, documents,
certificates and other instruments as in our judgment are necessary or
appropriate to form the basis of the opinions hereinafter set forth. In all
such examinations, we have assumed the genuineness of signatures on original
documents and the conformity to such original documents of all copies submitted
to us as certified, conformed or photographic copies, and as to certificates of
public officials, we have assumed the same to have been properly given and to
be accurate.

Based on the foregoing, we are of the opinion that the shares of
Common Stock to be issued and sold by the Company pursuant to the Underwriting
Agreement have been duly authorized and, when issued in accordance with the
terms set forth in the Underwriting Agreement, will be validly issued, fully
paid and nonassessable.

We consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the Prospectus that forms a part of the Registration Statement.

Very truly yours,

KING & SPALDING

<PAGE> 1
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A
REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

EXHIBIT 10.6

SUPPLY AGREEMENT

This Agreement is made on this _____ day of ____, 1997, by and among
Ford Motor Company, a Delaware corporation ("Ford"), and Team Rental Group,
Inc., a Delaware Corporation ("Team"), and Budget Rent A Car Corporation, A
Delaware corporation ("Budget").

WHEREAS the parties hereto desire to set forth the terms and conditions
where under Budget and its affiliates will acquire Ford vehicles for use in or
in support of businesses conducted by Budget and its affiliates at various
locations in the United States and outside of the United States.

Ford and Budget agree as follows:

1. Term of Agreement. This agreement shall be effective for the period
beginning as of September 1, 1997, and ending August 31, 2007.

2. Definitions. The terms set forth below shall have the following
meanings:

Acquire -- to obtain, by purchase or lease, Vehicles for use in or in
support of operations at Budget Locations.

Acquisition -- the act of Acquiring Vehicles.

Acquisition Year -- each period of 12 months from and including
September 1 to and including the next following August 31 during the term of
this Agreement (or such other customary period in countries outside the United
States). Each such Acquisition Year shall be referred to by the calendar year
next following the commencement of the Acquisition Year. For example, the 1998
Acquisition Year shall commence on September 1, 1997, and end on August 31,
1998.

Annual Acquisition Plan -- defined in Paragraph 5.1 of this Agreement.

Budget Affiliate -- with respect to Budget, any other corporation or
legal entity directly or indirectly controlling, controlled by, or under common
control with Budget, including, without limitation, Team and its subsidiaries,
but specifically excluding any Budget Licensee. For purposes of this definition
and Paragraphs 4.6 and 4.7, "control" (including "controlling," "controlled
by," and "under common control with") shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a corporation or other legal entity, whether through the ownership
of voting securities, by contract, or otherwise.
<PAGE> 2
2

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A
REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

Budget Corporate Location -- a Budget Location that is owned and
operated by Budget or a Budget Affiliate.

Budget Licensee -- any legal entity not controlled by Budget or a
Budget Affiliate that is authorized by Budget, a Budget Affiliate or another
Budget Licensee to conduct a business under any trademark of Budget.

Budget Location -- a place or geographic area except in the European
Union ("EU") where Budget, a Budget Affiliate, or a Budget Licensee now or
hereafter conducts a business under any trademark of Budget.

Canadian Ford Vehicles -- defined in Paragraph 4.4.

Confidential Material -- defined in Paragraph 19.

Ford Affiliate -- with respect to Ford, any other corporation or legal
entity directly or indirectly controlling, controlled by, or under common
control with Ford. For purposes of this definition "control" (including
"controlling," "controlled by," and "under common control with") shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a corporation or other legal entity,
whether through the ownership of voting securities, by contract, or otherwise.

Ford Dealer -- a legal entity authorized by Ford or a Ford Affiliate to
sell Ford Vehicles under one or more sales and service or dealer agreements.

Ford Fleet Programs -- price discount, guaranteed resale or repurchase
incentives or similar programs offered by Ford and Ford Affiliates whose primary
business is the sale or manufacture and sale of Vehicles.

Ford Vehicles -- any new and unused Vehicles as from time to time are
offered for sale by Ford or any Ford Affiliate to its Ford Dealers for resale,
but specifically Vehicles excluding sold under the "Mazda" or "Jaguar" name.

Ford Vehicle Share -- the percentage that Ford Vehicle Acquisitions
represents of total Vehicle Acquisitions by Budget and Budget Affiliates within
each of the following considered separately: the United States, Canada, the EU
and all other locations.

Licensee Ford Vehicle Share -- defined in Paragraph 11.

Vehicle -- any new and unused passenger car, van or truck.

3. Ford's Fleet Programs. In accordance with past practices, Ford and
Ford Affiliates will offer to Budget, Budget
<PAGE> 3
3

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A
REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

Affiliates and Budget Licensees, as soon as practicable prior to the
commencement of the Acquisition Year, the Ford Fleet Programs then being
offered to daily rental companies for the upcoming Acquisition Year. Such Ford
Fleet Programs may be amended, supplemented, or modified by Ford or Ford
Affiliates, from time to time, prior to or after commencement of such
Acquisition Year.

4. Ford Vehicle Share of Acquisitions.

4.1. In years prior to the effective date of this Agreement, Budget,
Budget Affiliates and Budget Licensees have purchased, in the aggregate, Ford
Vehicles in substantial quantities in the United States, Canada, Australia and
EU. In that connection, Budget acknowledges that Ford Vehicles and Ford Fleet
Programs made available to Budget, Budget Affiliates and Budget Licensees in
such years have been competitive, considered in the aggregate, when compared
with the Vehicles and fleet programs offered by other automobile manufacturers
as to price, delivery dates, quality, durability, design, reputation,
suitability for the Budget business, model availability, guaranteed
depreciation, resale value, turn back costs and other repurchase terms. In
accordance with past practices, Ford agrees that Ford Vehicles and Ford Fleet
Programs to be offered to Budget, Budget Affiliates and Budget Licensees
generally shall be competitive with the Vehicles and fleet programs of other
automotive manufacturers to an extent similar to that of past years. Further,
Budget acknowledges that from time to time in such past years the demand for
Ford Vehicles for retail and fleet sales in the United States, Canada, Australia
and the EU has been at levels that require Ford and Ford Affiliates to limit the
allocation of such Vehicles available to fleet buyers such as Budget, Budget
Affiliates and Budget Licensees. Accordingly, Budget agrees that it is in the
long-term interest of Budget and Budget Affiliates for Budget to make the
undertakings set forth in this Paragraph 4.

4.2. In each Acquisition Year, Budget shall Acquire or cause the
Acquisition by Budget Affiliates of Ford Vehicles in such quantity (a) in the
United States, (b) Canada and (c) all other locations outside the EU that the
Ford Vehicle Share in each country shall be at least 70 percent; provided,
however, that in no event shall the total of Acquisitions of Ford Vehicles by
Budget, Budget Affiliates and Budget Licensees in the United States be less than
80,000 Ford Vehicles ("Base U.S. Volume") in each Acquisition Year, subject to
the qualifications of Paragraphs 6.1 and 6.4 hereof.

4.3. To attain the respective Ford Vehicle Shares in each country and
the Base U.S. Volume required by Paragraph 4.2 in each Acquisition Year, Ford
and Budget agree to cooperate in developing Ford Vehicle delivery schedules by
Ford Vehicle line.

4.4. Ford Vehicles which have been sold by Ford Motor Company of Canada
Limited to its Ford Dealers ("Canadian Ford
<PAGE> 4
4

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A
REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

Vehicles") and Acquired by Budget and Budget Affiliates in Canada shall be
counted toward achievement of the Ford Vehicle Share (or the Licensee Ford
Vehicle Share) in Canada, but no Canadian Ford Vehicles, no matter how Acquired
by Budget, Budget Affiliates or Budget Licensees for use in the United States,
shall be counted toward achievement of the Ford Vehicle Share (or the Licensee
Ford Vehicle Share) in the United States or the Base U.S. Volume.

4.5. Any failure to achieve the respective Ford Vehicle Share in any
country or the Base U.S. Volume required by Paragraph 4.2 by the end of any
Acquisition Year shall be presumed to be a default by Budget under this
Agreement, subject to challenge by Budget.

4.6. If Budget or any Budget Affiliate should, directly or indirectly,
convey, sell, assign, franchise, license, transfer or otherwise dispose of
(collectively "Transfer") all or any portion of any Budget Corporate Location,
that had an average fleet size of 150 vehicles or more for the twelve-month
period prior to the Transfer, or any fixed assets, real properties, or other
property or assets a reasonably necessary for the conduct of the Budget Rent A
Car or Budget Rent A Truck business at such Budget Corporate Location
(collectively "Assets") to any party ("Transferee"), Budget or such Budget
Affiliate shall use reasonable best efforts to ensure that the Transferee (i) in
each Acquisition Year will Acquire Ford Vehicles in such quantity that the Ford
Vehicle Share of Acquisitions for such Budget Location shall remain at least 70
percent for the remainder of the term of this Agreement; and (ii) will require
any subsequent Transferee of such Assets or a substantial portion thereof to
agree to terms identical to those in this clause.

4.7. If, despite the reasonable best efforts of Budget or a Budget
Affiliate, as applicable, as required under Paragraph 4.6 above, the Transferee
does not Acquire Ford Vehicles in such quantity that the Ford Vehicle Share of
Acquisition for such Budget Location shall remain at least 70 percent for the
remainder of the term of this Agreement, then, during the term of this
Agreement, the total number of Vehicles Acquired and the number of Ford Vehicles
Acquired by Transferee for use at such Budget Location shall continue to be
included in the calculation of the Ford Vehicle Share required under Paragraph
4.2. Accordingly, Budget shall increase the number of Ford Vehicles Acquired by
Budget to the extent necessary to cover any shortfall below a Ford Vehicle
Share, as calculated hereunder, of 70 percent caused by Transferee's failure to
Acquire Ford Vehicles. Within a reasonable period of time before any proposed
Transfer of a Budget Corporate Location (but no later than 10 business days
prior thereto), Budget shall notify Ford in writing of such proposed Transfer.
Budget shall, from time to time, provide Ford with such information regarding
any Transfer of a Budget Corporate Location as Ford may reasonably request to
facilitate calculation of the Ford Vehicle Share hereunder.
<PAGE> 5
5

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A
REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

4.8. Except as otherwise provided in Paragraphs 4.6 and 4.7, and
subject to the provisions thereof, if a change of control occurs with respect to
Budget or any Budget Affiliate and such change of control would affect the
applicability of this Agreement to any then existing Budget Location, then
Budget shall require the person or entity acquiring control of Budget or such
Budget Affiliate to enter into an agreement with Ford containing substantially
the same terms and conditions as are contained in this Agreement with respect to
all Budget Locations affected by such change of control.

5. Annual Acquisition Plan, etc.

5.1. On or before July 1 of each Acquisition Year, Budget shall prepare
and submit to Ford a plan for Acquisitions by Budget and Budget Affiliates in
the United States, including Ford Vehicles, for the following Acquisition Year
(the "Annual Acquisition Plan"). Such Plan shall specify, in reasonable
detail, the volume, models, and delivery dates of Ford Vehicles, and shall show
how the Ford Vehicle Share and Base U.S. Volume shall be achieved as required by
Paragraph 4.2. In addition, such Plan shall include a good faith estimate of the
volume, models and delivery dates of Ford Vehicles to be Acquired by Budget
Licensees.

5.2. Monthly, Budget shall prepare and submit to Ford a revision of the
Annual Acquisition Plan showing total Acquisitions (including Ford Vehicles) in
the United States for the Acquisition Year to date as of 30 or fewer days prior
to the due date of such revised Annual Acquisition Plan, and proposed Vehicle
Acquisition in the United States (including Ford Vehicles) for the remainder of
the Acquisition Year.

5.3. Budget shall also prepare or cause to be prepared and submit to
Ford, or the appropriate Ford Affiliate, Annual Acquisition Plans for Canada and
all other countries outside the EU in the manner set forth above for
Acquisitions within the United States.

6. Ford Vehicle Acquisitions.

6.1. In consideration of the obligations undertaken by Budget, Ford
shall, and shall cause Ford Affiliates to, cooperate with Ford Dealers with
which Budget or Budget Affiliates or Budget Licensees negotiate the Acquisition
of Ford Vehicles, consistent with the sales and service or dealer agreements
between Ford or Ford Affiliates, on the one hand, and its or their respective
Ford Dealers, on the other hand, to make reasonable allocations of Ford Vehicles
for resale to Budget or Budget Affiliates or Budget Licensees and to process
Ford Vehicle orders and to arrange delivery of Ford Vehicles as agreed by Budget
or Budget Affiliates or Budget Licensees and such Dealers. Subject to any
production disruption described in Paragraph 6.4(a)-(d) below, such reasonable
allocation of Ford Vehicles
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made available by Ford for Acquisition under the Ford Fleet Programs by Budget,
Budget Affiliates and Budget Licensees (in the aggregate) in the United States
in any Acquisition Year shall not be fewer than 80,000 Ford Vehicles in such
allocations by vehicle class and Fleet Program as Ford may, in consultation with
Budget, establish; provided, however, that Ford may allocate fewer than 80,000
Ford Vehicles in an Acquisition Year if Ford and Budget reasonably agree that
the terms of the applicable Fleet Programs are such that the lower allocation
provides the equivalent rental usage of 80,000 Ford Vehicles under prior year
Fleet Programs.

6.2. In countries other than the U.S. to which this Agreement applies,
Ford shall make reasonable efforts to encourage Ford Affiliates to make Ford
Vehicles available to Budget and Budget Affiliates in sufficient quantities to
permit Budget and Budget Affiliates to achieve the Ford Vehicle Share by country
specified herein.

6.3. The following provisions shall apply with respect to any
allocation above the Base U.S. Volume of 80,000 Ford Vehicles: (a) Ford and Ford
Affiliates shall make reasonable efforts to fill orders for Ford Vehicles to be
Acquired by Budget or Budget Affiliates or Budget Licensees, it being understood
that Ford and Ford Affiliates also are subject to concurrent commitments to
provide Ford Vehicles to Ford Dealers for other purposes. In the event such
commitments cannot be satisfied from existing Ford Vehicle production capacity,
Ford and Ford Affiliates shall have the right to allocate available Ford Vehicle
production to balance these commitments in the manner they deem most appropriate
in their reasonable business judgment.

(b) Ford and Ford Affiliates similarly may allocate production between
retail and fleet sales for any reason including, without limitation, demand for
Ford Vehicles for retail sales.

6.4. If, because of (a) shortage or curtailment of material, labor,
transportation, or utility service; (b) any labor or production difficulty; (c)
any governmental action; or (d) any cause beyond the reasonable control of Ford
or Ford Affiliates, Ford Vehicle production is disrupted and material deliveries
of Ford Vehicles to be Acquired by Budget, Budget Affiliates or Budget Licensees
are delayed as a result, then Budget and/or appropriate Budget Affiliates and
Ford and/or appropriate Ford Affiliates shall make good faith, reasonable
efforts to revise the affected Annual Acquisition Plan or Plans, as modified
under Paragraph 5.2, so that the respective Ford Vehicle Share and Base U.S.
Volume shall be attained as required by Paragraph 4.2; provided, however, that
Budget shall not be required to increase its Ford vehicle Share in the U.S. in
excess of 80% with respect to any Vehicle Acquisitions to be made for the
remainder of any Acquisition Year to which this Paragraph 6.4 applies in order
to achieve the Ford Vehicle Share or the Base
<PAGE> 7
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CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A
REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

U.S. Volume. If the respective Ford Vehicle Share or Base U.S. Volume is not
attained despite the good faith, reasonable efforts of Budget and/or the
appropriate Budget Affiliates to revise the Annual Acquisition Plan, then the
liquidated damages of Paragraph 9 shall not apply to the extent that Budget's
failure to attain the Ford Vehicle Share or Base U.S. Volume is solely
attributable to a production disruption described in this Paragraph.

7. Royalty. Team will pay, or cause Budget to pay, Ford a Royalty in
accordance with the provisions of Exhibit A attached hereto.

8. Budget Certificates on Acquisitions. As soon as practicable after
each Acquisition Year, but not later than four months after such Acquisition
Year, Budget shall deliver to Ford or the Ford Affiliate designated by Ford a
certificate signed by an executive officer of Budget certifying for such
Acquisition Year total Vehicle Acquisitions and total Ford Vehicle Acquisitions
at Budget Locations and the resulting Ford Vehicle Share and, to the best
knowledge of such officer, the resulting Licensee Ford Vehicle Share.

9. Remedy for Ford Vehicle Share Shortfall.

9.1. Except as otherwise provided in this Agreement, in the event
Budget shall fail to attain in any country the Ford Vehicle Share or Base U.S.
Volume specified in Paragraph 4.2 for any Acquisition Year, Budget and Ford
agree that Ford would be harmed by the consequent loss of profit, production and
exposure of Ford Vehicles to rental customers of Budget and Budget Affiliates
who are potential purchasers of Ford Vehicles, and that the damages to Ford
would be difficult to ascertain. Accordingly, Budget and Ford adopt the
following provision for payment of liquidated damages in lieu of all other
rights and remedies:

For each Acquisition Year in which Budget shall fail to attain in any
country the Ford Vehicle Share or the Base U.S. Volume required by this
Agreement, Budget or a Budget Affiliate shall pay to Ford or the damaged Ford
Affiliate, as applicable, a sum equal to (a) $XXX (or the equivalent in local
currency), multiplied by (b) the number of additional Ford Vehicles that would
be necessary to attain the required Ford Vehicle Share in such country or Base
U.S. Volume for the Acquisition year in question. In calculating the shortfall
of Ford Vehicle Acquisitions for an Acquisition Year in such country for the
purpose of computing the liquidated damages payable by Budget, Ford will give
Budget credit for the additional number of Ford Vehicles Acquired by Budget and
Budget Affiliates in such country in the prior Acquisition Year (over and above
the number of Ford Vehicles necessary to achieve the respective Ford Vehicle
Share of 70 percent in such country in such prior Acquisition Year), except
that no credit shall be given in the U.S. unless the Ford Vehicle Share of 70
percent exceeds 80,000 Ford Vehicles, and
<PAGE> 8
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then the credit shall be only as to the excess over 80,000 Ford Vehicles.

9.2. Such payment shall become due 15 days after the delivery of the
officer's certificate required by paragraph 8 of this Agreement. Upon 30 days'
notice, Ford may offset the amount of any such damages against any payments then
due or thereafter becoming due from Ford to Budget or Budget Affiliates, without
limiting any right or remedy Ford may have to collect such liquidated
damages from Budget.

9.3. The foregoing provisions shall not apply to the extent Budget's
failure to achieve the Ford Vehicle Share in any country as required under
Paragraph 4.2 is solely attributable to Ford's failure to allocate quantities of
Ford Vehicles for Acquisition by Budget sufficient to achieve such Ford Vehicle
Share in such country.

10. Remedy for Base U.S. Volume Shortfall.

10.1. Except as otherwise provided in this Agreement, in the event Ford
shall fail to allocate at least 80,000 Ford Vehicles for Acquisition by Budget,
Budget Affiliates and Budget Licensees (in the aggregate) in the U.S. for any
Acquisition Year for any reason other than a production disruption described in
Paragraph 6.4, and Budget and Budget Affiliates would have Acquired such number
of Ford Vehicles but for Ford's failure to provide them, and the parties have
not otherwise agreed that any lower allocation would provide equivalent rental
usage as provided in Paragraph 6.1, then Budget and Ford agree that Budget would
be harmed by the consequent loss of business and profit attributable to such
reduced allocation and that the damages to Budget would be difficult to
ascertain. Accordingly, Budget and Ford adopt the following provision for
payment of liquidated damages in lieu of all other rights and remedies:

For each Acquisition Year in which the foregoing described failure to
allocate the Base U.S. Volume should occur, Ford or a Ford Affiliate shall pay
to Budget or the damaged Budget Affiliate, as applicable, a sum equal to (a)
$XXX, multiplied by (b) the number of additional Ford Vehicles that would be
necessary to attain the Base U.S. Volume for the Acquisition Year in question.
In calculating the shortfall of the Base U.S. Volume for an Acquisition Year for
the purpose of computing the liquidated damages payable by Ford, Budget will
give Ford credit for the additional number of Ford Vehicles allocated by Ford or
Ford Affiliates to Budget, Budget Affiliates and Budget Licensees in the U.S. in
the prior Acquisition Year (over and above the 80,000 Ford Vehicles necessary to
achieve the respective Base U.S. Volume in such prior Acquisition Year).

10.2. Such Payment shall become due 15 days after the delivery of the
officer's certificate required by Paragraph 8 of this Agreement. Upon 30 days'
notice, Budget may offset the

<PAGE> 9
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REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
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amount of any such damages against any payments then due or thereafter becoming
due from Budget or Budget Affiliates, without limiting any right or remedy
Budget may have to collect such liquidated damages from Ford.

11. Licensee Ford Vehicle Share. With respect to Acquisitions by Budget
Licensees, Budget agrees that in each Acquisition Year it will promote the
acquisition and use of Ford Vehicles by Budget Licensees, in substantially the
same manner and to the same extent that Budget has historically promoted the
acquisition and use of Ford Vehicles by Budget Licensees (it being understood
that Budget does not control the type of vehicles Budget Licensees acquire and
use in their rental fleets) with a target of 70% of Ford Vehicles ("Licensee
Ford Vehicle Share"). Budget shall, with input and cooperation from Ford,
develop programs designed to increase the percentage of Ford Vehicles Acquired
by Budget Licensees with the objective of implementing the first of such
programs by the 1998 Acquisition Year.

12. Operations in Other Countries. To the extent that Budget shall
offer franchisee services to Budget Licensees in countries in which Budget
presently does not provide franchisee services, Budget and Ford will negotiate
arrangements similar to those set forth in Paragraph 11, including appropriate
targets.

13. Budget European Operations. With respect to Acquisitions by Budget
Affiliates and Budget Licensees within the EU, Budget shall recommend to such
Budget Affiliates and Budget Licensees that they acquire Ford Vehicles from Ford
Dealers or Ford Affiliates in their respective countries, with a target of
numbers sufficient to attain a Ford Vehicle Share or Licensee Ford Vehicle Share
of 70 percent.

14. Option Allocation Agreements. Budget agrees that so long as it
purchases Vehicles from Ford that are subject to Ford's Daily Rental Repurchase
Program (one of the Fleet Programs referenced in Paragraph 3 of this Agreement),
Budget will enter into an Option Allocation Agreement in substantially
similar form to those appended hereto as Exhibit B, in which the amount
allocated to the repurchase option shall equal the estimate, reasonably
determined by Ford, of any loss on the resale of such Vehicles. Each such
agreement will provide that the parties will reflect the allocations set forth
therein in all federal, state and local income tax returns.

15. Illegality of Agreement. If any provision of this Agreement is
rendered invalid, illegal or unenforceable by enactment of a statute or a final
decision by a court or governmental agency of competent jurisdiction, the
validity, legality and enforceability of the remaining provisions shall in no
way be affected or impaired.
<PAGE> 10
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REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

16. Inspection of Budget Records. Ford and Ford Affiliates engaged in
the manufacture or distribution of Ford Vehicles shall have the right, through
its or their duly authorized agents or representatives, to examine all pertinent
records of Budget or Budget Affiliates at any time and from time to time during
normal business hours and upon two days' prior written notice, to the extent
necessary to determine the accuracy of all statements that may be furnished by
Budget to Ford pursuant to Paragraph 8 hereof. Such records will include all
documents pertaining to the number of Ford Vehicles and other Vehicles included
in Budget's Vehicle Acquisitions.

17. Entire Agreement. This Agreement supersedes any prior agreements
and understandings, written and oral, between Team, Budget and Ford with respect
to the subject matter hereof; provided, however, that the agreement effective as
of November 1, 1988 ( the "1988 Agreement"), shall remain in full force and
effect to and including August 31, 1997, whereupon the 1988 Agreement shall
terminate as though August 31, 1997, were the date for the expiration thereof.
This Agreement may not be changed in any way except by an instrument signed and
delivered by the duly authorized representatives of Ford and Budget.

18. Notices. Any notice, consent, approval or other communication
required or permitted hereunder shall be in writing, shall be given by
registered or certified United States mail and shall be deemed given when
deposited in the mail, postage paid and addressed as follows:

(a) if to Ford:

Ford Motor Company
300 Renaissance Center
P.O. Box 43362
Detroit, Michigan 48243
Attention: Executive Director
Rental, Lease and Remarketing
Operations

with a copy to:

Ford Motor Company
Office of the Secretary
The American Road
Dearborn, Michigan 48121; and

(b) if to Budget:

Budget Rent A Car Corporation
4225 Naperville Road
Lisle, Illinois 60532
Attention: Chief Executive Officer
<PAGE> 11
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REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

Team Rental Group, Inc.
125 Basin Street, Suite 210
Daytona Beach, FL 32114

Such addresses may be changed by notice given in like manner.

19. Confidentiality. This Agreement, or any part of the contents
hereof, and all records, statements and matters relating hereto including
information obtained or provided pursuant to Paragraph 16 (collectively
"Confidential Material") shall be treated as confidential and each of the
parties shall take or cause to be taken the same degree of care in preventing
disclosure of the Confidential Material as it does with its own confidential
trade or business information. Further, except as may otherwise be required by
law or by subpoena or civil investigative demand, neither party shall provide
the Confidential Material, or any part thereof, to any other person or legal
entity, without the prior written consent of the other, which consent shall not
be withheld unreasonably. In disclosing the Confidential Material to any person
or legal entity, the disclosing party will impose on the receiving party the
same degree of confidentially and care that the parties have undertaken in the
first sentence of this paragraph or, in the case of Confidential Material
supplied to any person or governmental agency pursuant to subpoena or civil
investigative demand, requirement of the Securities and Exchange Commission or
similar request, the disclosing party will seek an appropriate protective order
or confidential treatment, and will use its best efforts to assure that the
receiving party or entity returns all copies of all the Confidential Material
that shall have been furnished to it, promptly after the receiving party or
entity shall have completed its required analysis or review of such Confidential
Material.

20. Governing Law. This Agreement shall in all respects be governed by
and be construed in accordance with the laws of the State of Michigan without
giving effect to the principles of conflicts of laws thereof.

21. Dispute Resolution. If a dispute arises between the parties
relating to this Agreement, the following procedure shall be implemented, and
none of the parties shall pursue other available remedies, except that any party
may seek injunctive relief from a court where appropriate in order to maintain
the status quo while this procedure is being followed:

(a) Ford, Team and Budget shall hold a meeting promptly, attended
by persons with decision-making authority regarding the
dispute, to attempt in good faith to negotiate a resolution of
the dispute; provided, however, that no such meeting
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shall be deemed to vitiate or reduce the obligations and
liabilities of the parties hereunder or be deemed a waiver by
a party hereto of any remedies to which such party would
otherwise be entitled hereunder.

(b) If, within 30 days after such meeting, the parties have not
succeeded in negotiating a resolution of the dispute, they
shall submit the dispute to mediation in accordance with the
then-current Model Procedure for Mediation of Business
Disputes of the Center for Public Resources and bear equally
the costs of mediation.

(c) The parties will jointly appoint a mutually acceptable
mediator, seeking assistance in such regard from the Center
for Public Resources if they have been unable to agree upon
such appointment within 20 days from the conclusion of the
negotiation period.

(d) The parties shall participate in good faith in the mediation
and negotiations related thereto for a period of 30 days. If
the parties are not successful in resolving the dispute
through the mediation, then the parties agree to submit the
matter to binding arbitration in accordance with the Center
for Public Resources Rules for Non-Administered Arbitration
of Business Disputes, by a sole arbitrator.

(e) Mediation or arbitration shall take place in Detroit,
Michigan, unless otherwise agreed by the parties. The
substantive and procedural law of the State of Michigan shall
apply to the proceedings. Equitable remedies shall be
available in any arbitration. Punitive damages shall not be
awarded. This Paragraph 21 is subject to the Federal
Arbitration Act, 9 U.S.C.A. Section 1 et. seq. and judgment
upon the award rendered by the arbitrator, if any, may be
entered by any court having jurisdiction thereof.

22. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of Team, Budget and Ford and their respective successors
and assigns; provided, however, no assignment of the obligations of Team, Budget
or Ford hereunder shall release Team, Budget or Ford, as assignor, from
the performance of its obligations thereunder for the remainder of the term
hereof after any such assignment.

23. Headings. The paragraph headings herein are included for
convenience of reference only and shall not be deemed a part of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
effective as of the day and year first above written.

FORD MOTOR COMPANY BUDGET RENT A CAR CORPORATION

By: By:
--------------------------------- -------------------------------------
Its: Its:
-------------------------------- ------------------------------------

TEAM RENTAL GROUP, INC.

By:
---------------------------------
Its:
--------------------------------
<PAGE> 14
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REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

EXHIBIT A

ROYALTY PAYMENT

1. Royalty. (a) On or before September 1, 1998 and on each anniversary
thereof through September 1, 2004, Team shall pay or shall cause Budget to pay
to Ford an amount (the "Royalty") equal to the greater of (i) one percent of Net
Vehicle Revenue of Budget for the prior Acquisition Year; or (ii) the Minimum
Amount as defined in subparagraph 1(c). The Royalty payable with respect to an
Acquisition Year shall be reduced by $XXX for each Ford Vehicle purchased by
Budget, Budget Affiliates and Budget Licensees in such Acquisition Year in
excess of 123,000 Ford Vehicles. In no event shall the aggregate Royalty paid
hereunder exceed $100,000,000 (the "Cap").

(b) As used herein, the term "Net Vehicle Revenue" for an Acquisition
Year shall mean:

(i) gross revenue from mileage and time, LDW and vehicle class
upsells; less

(ii) revenue discounts, satisfaction guarantee allowance and intercity
rental revenue split.

(i) For the 1998 Acquisition Year, payable September 1, 1998,
$9,900,000 (the "1998 Minimum Amount");

(ii) In the 1999 Acquisition Year, payable September 1, 1999, an
amount equal to the 1998 Minimum Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 1999 and the denominator of
which shall be the CPI for April 1998, or (B) XXX, whichever is smaller
(the "1999 Minimum Amount");

(iii) In the 2000 Acquisition Year, payable September 1, 2000, an
amount equal to the 1999 Minimum Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 2000 and the denominator of
which shall be the CPI for April 1999, or (B) XXX, whichever is smaller
(the "2000 Minimum Amount");

(iv) For the 2001 Acquisition Year, payable September 1, 2001, an
amount equal to the 2000 Minimum Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 2001 and the denominator of
which shall be the CPI for April 2000, or (B) XXX, whichever is smaller
(the "2001 Minimum Amount");

(v) For the 2002 Acquisition Year, payable September 1, 2002, an
amount equal to the 2001 Minimum

<PAGE> 15
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Amount multiplied by: (A) a fraction, the numerator of which shall be the
CPI for April 2002 and the denominator of which shall be the CPI for April
2001, or (B) XXX, whichever is smaller (the "2002 Minimum Amount");

(vi) In the 2003 Acquisition Year, payable September 1, 2003, an
amount equal to the 2002 Minimum Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 2003 and the denominator of
which shall be the CPI for April 2002, or (B) XXX, whichever is smaller
(the "2003 Minimum Amount"); and

(vii) In the 2004 Acquisition Year, payable September 1, 2004, an
amount equal to the 2003 Minimum Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 2004 and the denominator of
which shall be the CPI for April 2003, or (B) XXX, whichever is smaller
(the "2004 Minimum Amount").

(d) As used herein, the term "CPI" shall mean the United States
Department of Labor Statistics Revised Consumer Price Index for All Urban
Consumers, or the successor of such Index.

(e) The parties agree that calculation of the Royalty shall be
governed by the following principles:

(i) Net Vehicle Revenue of Budget shall be calculated consistently
with the calculation of Net Vehicle Revenue for Acquisition Year 1996.

(ii) The Royalty is intended to reflect revenue generated from
Budget's corporate vehicle rental business as it existed as of the date of
acquisition by Team. To the extent that Budget's corporate structure changes
or its method of doing business changes so that Net Vehicle Revenue is
reduced, then Team shall prepare, or shall cause Budget to prepare, a
calculation of Net Vehicle Revenue that most accurately reflects the Net
Vehicle Revenue that would have been generated from Budget's vehicle rental
business had such changes not occurred.

2. Audit Rights; Royalty Adjustment. (a) At the time that Team is
obliged to make payment of the Royalty under Section 1, Team shall deliver to
Ford documentation in support of its calculation of Net Vehicle Revenue. Such
documentation shall consist of relevant excerpts from Budget's trial balance or
similar accounting records, and any other accounting material which Ford may
reasonably request to substantiate Team's calculation of Net Vehicle Revenue.
The truth and accuracy of any information provided by Team to Ford pursuant to
this Section shall be certified by the chief financial officer of Team.

(b) Ford and Ford's accountants shall, within 180 days after payment
of the Royalty pursuant to Section 1, complete

A-2
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their review of the calculation of Net Vehicle Revenue and the Royalty. During
such 180 day period, Team shall furnish, or cause Budget to furnish, to Ford all
information reasonably requested by Ford for its review of such calculation. In
the event that Ford determines that the Royalty or Net Vehicle Revenue has not
been determined in accordance with Section 1, Ford shall notify Team in writing
(the "Ford Objection"), setting forth the basis of the Ford Objection in
reasonable detail and to the extent practicable the adjustments to the Royalty
or Net Vehicle Revenue which Ford believes should be made, on or before the last
day of such 180 day period. Team shall have 30 days after its receipt of the
Ford Objection to review the Ford Objection, and shall notify Ford in writing
immediately upon completion of such review. If Ford and Team are unable to
resolve all of their disagreements with respect to the determination of the
disputed items within 30 days following receipt by Ford of the notice given by
Team in accordance with the preceding sentence, they shall refer their remaining
differences to an internationally recognized firm of independent public
accountants (as to whose identity Ford and Team shall agree after good faith
negotiation (the "CPA Firm")), which shall, acting as experts in accounting and
not as arbitrators, determine on the basis of the standards set forth in Section
1, and only with respect to the specific remaining accounting related
differences so submitted (the "Disputed Items"), whether and to what extent, if
any, the Royalty or Net Vehicle Revenue requires adjustment. Ford and Team shall
direct the CPA Firm to use its best efforts to render its determination within
45 days after its engagement. The CPA Firm's determination concerning the
Disputed Items shall be conclusive and binding upon Ford and Team. The fees and
disbursements of the CPA Firm shall be borne equally by the parties. Ford and
Team shall make readily available to the CPA Firm all relevant books and records
and any work papers (including those of the parties' respective accountants)
relating to resolution of the Disputed Items which are reasonably requested by
the CPA Firm. The "Adjusted Royalty" shall be (i) the Royalty in the event that
(x) no Ford Objection is delivered to Team during the applicable 180 day period,
or (y) Ford and Team agree as to the amount of the Royalty, (ii) the Royalty,
adjusted in accordance with the Ford Objection in the event that Team does not
respond to the Ford Objection within the 30-day period following receipt by Team
of the Ford Objection, or (iii) the Royalty, as adjusted by either (x) the
agreement of Ford and Team, or (y) the CPA Firm.

(c) Within 10 business days following determination of the Adjusted
Royalty, Team shall make, or cause Budget to make, a payment equal to (i) the
difference, if any (the "Adjustment Amount"), between (A) the greater of the
Royalty and the Adjusted Royalty and (B) the Royalty, plus (ii) interest on the
Adjustment Amount, for the period from and including the date payment of the
Royalty is required to be made under Section 1 to but excluding the date on
which payment of the Adjustment Amount is made (calculated on the basis of the
actual number of days elapsed in such period over 360 days), at a per annum rate
equal to the

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"base rate" publicly announced by Citibank, N.A. or any successor thereto in New
York, New York on the date payment is required to be made under Section 1. The
Adjustment Amount payable pursuant to this Section shall be paid by wire
transfer of immediately available funds to an account designated in writing by
Ford.

3. Unconditional Obligation. The obligation to pay the Royalty shall be
unconditional. Team shall have no right of set-off or deduction against the
Royalty.

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REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

EXHIBIT 10.7

ADVERTISING AGREEMENT

This Agreement is made this _____day of _____, 1997 by and between Ford
Motor Company, a Delaware corporation ("Ford"), and Budget Rent A Car
Corporation and its wholly owned subsidiary Budget Rent A Car Systems, Inc.,
each of which is a Delaware corporation (collectively "Budget").

WHEREAS Ford and Budget desire to set forth the terms and conditions
whereby Budget shall carry out Promotional Programs designed to promote the use
and rental of Ford Vehicles at Budget Locations.

Ford and Budget agree as follows:

1. Term of Agreement. The term of this Agreement will commence on
September 1, 1997, and, subject to earlier termination as hereinafter provided,
will continue until August 31, 2007.

2. Definitions. The terms set forth below shall have the following
meanings:

Acquire -- to obtain, by purchase or lease, new and unused Vehicles for
daily rental service, support of daily rental service operations, or Budget
corporate vehicles at Budget Locations.

Acquisition -- the act of acquiring new and unused Vehicles.

Affiliate -- with respect to any corporation, any other corporation,
directly or indirectly, controlling, controlled by, or under common control with
such corporation. With respect to Budget, "Affiliate" includes, without
limitation, Team Rental Group, Inc., and its subsidiaries, but specifically
excludes Budget Licensees. For purposes of this definition and Paragraph 10(b),
"control" (including "controlling," "controlled by," and "under common control
with") shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a corporation, whether
through the ownership of voting securities, by contract or otherwise.

Budget Corporate Location -- a Budget Location that is owned,
controlled or operated by Budget or a Budget Affiliate.

Budget Licensee -- any legal entity not controlled by Budget or a
Budget Affiliate that is authorized by Budget or a Budget Affiliate or another
Budget Licensee to conduct a business under any trademark of Budget in the
United States.

Budget Location -- a place or geographic area in the United States
where Budget, a Budget Affiliate or a Budget Licensee now or hereafter conducts
a Vehicle daily rental business under any trademark owned or used by Budget.

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REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

CPI -- the United States Department of Labor's Bureau of Labor
Statistics Revised Consumer Price Index for All Urban Consumers, or the
successor of such Index.

Ford Vehicles -- in any Model Year, those new and unused current Model
Year Vehicles (e.g., 1998 models placed in daily rental service at Budget
Locations during the 1998 Model Year), prior Model Year Vehicles (e.g., 1997
models placed in daily rental service at Budget Locations during the 1997 Model
Year), and subsequent Model Year Vehicles (e.g., 1999 models placed in daily
rental service at Budget Locations during the 1999 Model Year), sold by Ford to
its franchised dealers or Ford Motor Credit Company and in turn sold or leased
for use at Budge Locations during the Model Year, but specifically excluding
vehicle sold under the "Mazda" name or "Jaguar" name.

Ford Vehicle Share -- the percentage, considered at the end of each
Model Year, that new and unused Ford Vehicles represent of all Vehicle
Acquisitions during such Model Year.

Model Year - - each period of 12 Months from and including September 1
to and including the next following August 31. Each Model Year shall be referred
to by the calendar year next following the commencement of the Model Year. For
example, the 1998 Model Year shall commence on September 1, 1997, and end on
August 31, 1998.

Promotional Programs -- programs carried out by Budget or its
Affiliates, subject to the terms and conditions of this Agreement, that feature
Ford Vehicles and promote the rental thereof at Budget Locations. Such programs
shall include, without limitation, major media or other advertising, direct mail
solicitations, catalogue covers, point of rental materials, recorded telephone
responses to calls from prospective vehicle renters, and such other activities
as Budget may perform to promote Ford products in the Budget system and such
other programs as Ford and Budget shall agree upon from time to time.

Vehicle -- any new an unused passenger car or van or truck.

Vehicle Acquisitions -- in any Model Year, all current Model Year
Vehicles, prior Model Year Vehicles, and subsequent Model Year Vehicles Acquired
by Budget, a Budget Affiliate or a Budget Licensee.

3. Promotional Programs.

(a) Subject to the terms and conditions hereof, Budget shall,
and shall cause its Affiliates, during each Model Year,

(i) to carry out Promotional Programs;

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(ii) to perform surveys and services as may be
mutually agreed to from time to time by Ford
and Budget;

(iii) Meet with Ford's Budget Account Manager at
least once each quarter, and more often if
deemed mutually desirable, to communicate
Budget's plans for Promotional Programs
for the following quarter; and

(iv) Send to Ford in January and July of each
year beginning in January 1998, a detailed
report of the Promotional Programs
implemented by Budget during the preceding
six month period so that Ford may determine
whether it has received promotional value
commensurate with the consideration payable
hereunder. Such reports shall be signed by a
Senior Vice President or above of Budget and
shall state the amount spent by Budget in
the preceding six month period. If such
Promotional Programs are reasonably deemed
by Ford to be unsatisfactory and Ford so
notifies Budget, Budget shall make such
changes in future Promotional Programs as
are mutually agreeable to both Ford and
Budget.

(b) With respect to Budget Licensees, during each
Model Year Budget shall communicate its promotional activities
pursuant to this Paragraph with such Licensees and shall
distribute information about such activities to them. Budget
shall promote such activities to Budget Licensees in
substantially the same manner and to the same extent that
Budget has historically promoted such promotional activities
with Budget Licensees. The parties understand that Budget
and Budget Affiliates do not control the types of promotional
activities at Budget Locations not owned or operated by Budget
or its Affiliates.

4. Criteria for Promotional Programs. Promotional Programs shall meet
the following the criteria:

(a) they shall be published, placed or controlled by
Budget or a Budget Affiliate; and

(b) they shall use or contain the name of a Ford Vehicle
or refer by name to Ford Motor Company at least once
with an influence value

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and with a prominence that is reasonably satisfactory to Ford;
and

(c) they shall, where feasible, use or contain a pictorial
representation of a Ford Vehicle (furnished by Ford from time
to time in accordance with Paragraph 9 hereof) with an
influence value and with a prominence reasonably satisfactory
to Ford; and

(d) they shall not, except as Ford may consent in advance, contain
any pictorial representation, trade name or endorsement of, or
testimonial to, any Vehicle other than a Ford Vehicle, or any
reference by name to any Vehicle manufacturer other than Ford
or one of its Affiliates, provided that Vehicles other than
Ford Vehicles may be mentioned or pictured in a Promotional
Program with Ford's consent if the non-Ford Vehicle is of a
kind for which, at the time, there is no comparable Ford
Vehicle.

5. Base Payments for Promotional Programs.

(a) Except as provided in Paragraph 5(c) below, in
consideration of the Promotional Programs and the other services
provided by Budget, Ford will pay to Budget, in equal quarterly
installments on the first day of September, December, March and June
of each Model Year, a "Base Amount" for each of the 1998, 1999, 2000,
2001 and 2002 Model Years as follows: $ XXX in the 1998 Model
Year; and, an amount in subsequent Model Years computed as follows (and
rounded to the nearest $100,000);

(i) for the 1999 Model Year, an amount equal to
$XXX multiplied by: (A) a fraction, the numerator of
which shall be the CPI for April of 1998 and the denominator
of which shall be the CPI for April 1997, or (B) XXX,
whichever is smaller;

(ii) for the 2000 Model Year, an amount equal to the
1999 Model Year Base Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 1999 and the
denominator of which shall be the CPI for April 1998, or
(B) XXX whichever is smaller;

(iii) for the 2001 Model Year, an amount equal to
2000 Model Year Base Amount multiplied by (A) a fraction, the
numerator

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or which shall be the CPI for April 2000 and the denominator
of which shall be the CPI for April 1999, or (B) XXX,
whichever is smaller; and

(iv) for the 2002 Model Year, an amount equal to the
2001 Model Year Base Amount multiplied by: (A) a fraction,
the numerator of which shall be the CPI for April 2001 and
the denominator of which shall be the CPI for April 2000, or
(B) XXX, whichever is smaller.

Using the formulas above, Ford shall calculate the amounts of the
quarterly and total annual Base Amounts due under this Paragraph for
the 1998 Model Year and each subsequent Model Year to and including the
2002 Model Year. This calculation shall be communicated to Budget by
June 1 of each applicable Model Year or within 30 days of the
publication of the CPI for April of the appropriate year, whichever is
later.

(b) Before March 1, 2002, Ford and Budget shall negotiate in
good faith to determine the Base Amounts or Base Amount calculations
for the 2003, 2004, 2005, 2006 and 2007 Model Years, including whether
such 2003-2007 Base Amounts should be greater than, less than or equal
to prior Model Year Base amounts taking into account all relevant
factors, including then prevailing economic and competitive conditions,
costs of Promotional Programs, the existence of other promotional
program agreements between Ford and other daily rental companies and
the prior payments made hereunder. If, by June 1, 2002, and after good
faith negotiations, the parties cannot agree upon a mutually acceptable
Base Amount for the subject Model Years, then the Base Amount for the
2003-2007 Model Years shall be the amounts calculated as follows:

(i) for the 2003 Model Year, an amount equal to the
2002 Model Year Base Amount plus XXX of the 2002 Model Year
Base Amount multiplied by: (A) a fraction, the numerator of
which shall be the CPI for April 2002 and the denominator of
which shall be the CPI for April 2001, or (B) XXX, whichever
is smaller;

(ii) for the 2004 Model Year, an amount equal to the
2003 Model Year Base Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 2003 and

5
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the denominator of which shall be the CPI for April 2002, or
(B) XXX, whichever is smaller;

(iii)for the 2005 Model Year, an amount equal to 2004
Model Year Base Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 2004 and the
denominator of which shall be the CPI for April 2003, or
(B) XXX, whichever is smaller;

(iv) for the 2006 Model Year, an amount equal to the
2005 Model Year Base Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 2005 and the
denominator of which shall be the CPI for April 2004, or
(B) XXX, whichever is smaller, and

(v) for the 2007 Model Year, an amount equal to the
2006 Model Year Base Amount multiplied by: (A) a fraction, the
numerator of which shall be the CPI for April 2006 and the
denominator of which shall be the CPI for April 2005, or (B)
XXX, whichever is smaller;

(c) As it is the express purpose and intent of this Agreement
to promote the use of Ford Vehicles at Budget Locations and to feature
Ford Vehicles in Budget's U.S. fleet, it is the understanding of the
parties hereto that, during each Model Year, Ford will not be required
to pay Budget the Base Amount described in Paragraph 5(a) above if the
Ford Vehicle Share in such Model year is not at least 55%: provided,
however, that Ford will be required to pay the Base Amount in the event
that the failure to achieve a Ford Vehicle Share of 55% was solely
attributable to Ford's failure to make Ford Vehicles available for
Acquisition in sufficient quantities to achieve a Ford Vehicle Share of
55%. Notwithstanding the preceding sentence, if Ford's failure to
allocate sufficient quantities of Ford Vehicles is caused by a
production disruption of more than one year due to (a) a shortage or
curtailment of material, labor, transportation, or utility service; (b)
any labor or production difficulty; (c) any governmental action; or (d)
any cause beyond the reasonable control of Ford, then the parties will
negotiate in good faith to reduce the Base Amount by amounts reflective
of the nature and extent of the production disruption and the Ford
Vehicle Share actually achieved.

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FILED SEPARATELY WITH THE COMMISSION.

6. Increased Payments for Promotional Programs.

(a) In support of Budget's efforts to promote the use of Ford
Vehicles at Budget Locations and in support of the Promotional
Programs to increase rental demand for Ford Vehicles, Ford
will pay Budget the amounts listed in the following schedule,
based upon increases in the Ford Vehicle Share (in addition
to the Base Amount for each Model Year, as specified in
Paragraph 5 hereof):
<TABLE>
<CAPTION>

The Applicable Payment
The Ford Vehicle Increase Over the
Share Should Reach Base Amount Shall Be
------------------ --------------------
(Millions)
<S> <C>
XXX $ XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
XXX XXX
</TABLE>

(b) Additional payments due Budget under the above schedules shall
be paid to Budget as soon as the numbers necessary for the
required calculations are determined by the parties, but in no
event later than December 31 following the conclusion of the
applicable Model Year.

7. Budget Certificates on Acquisition.

(a) As soon as practicable after each Model Year, but not later
than December 31 of the following Model Year, Budget shall
deliver to Ford a certificate by an executive officer of
Budget certifying the following information for the preceding
Model Year: (i) the total number of Vehicles Acquired for use
at all Budget Locations for such Model Year; and (ii) the
total number of Ford Vehicles Acquired for use at all Budget
Locations for such Model Year; and (iii) the Ford Vehicle
Share for such Model Year.

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REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

(b) To assist reporting pursuant to this Paragraph,
Budget undertakes to establish an Acquisition
reporting system consistent with the Vehicle
reporting requirements of this Agreement for all
Budget Locations for each Model Year. This reporting
system shall specify Ford Vehicles Acquired by model
line and Vehicles Acquired from other manufacturers
or importers. Ford may periodically examine
such reporting data upon reasonable notice to Budget.

(c) No increased payments for Promotional Programs due to
Budget each Model Year from Ford under Paragraph 6
above shall be paid until after Ford shall have had
30 days to examine the reporting data described in
(b) above. If Ford shall request, in writing,
clarification of such data, Budget shall furnish the
requested information to Ford's satisfaction before
any increased payment shall be due.

8. No Use of Ford in Script, Etc. Budget will not use or permit any
Budget Affiliate to use, and will use all reasonable efforts to prevent the use
at any Budget Location not owned by Budget or a Budget Affiliate, any
advertising or promotional materials that contain: the Ford script-in-oval
trademark; the word "Ford" in script; or any statement that is detrimental to
Ford or any of Ford's Affiliates, or to the good name of Ford or any of its
Affiliates, or to any product made or sold by Ford or its Affiliates.

9. Pictures of Ford Vehicles.

(a) Ford will furnish to Budget, from time to time,
pictorial representations of Ford Vehicles for use by
Budget in its advertising and promotion.

(b) Each pictorial representation of a Ford Vehicle used
in a Promotional Program originally released more
than one month after the public introduction of a new
model of such Ford Vehicle will, if practicable, be a
pictorial representation of such new model.

10. Disposition of Budget Corporate Locations.

(a) Budget represents that it can ensure implementation
of the Promotional Programs only at Budget Corporate
Locations. Accordingly, the benefit to Ford of the
Promotional Programs would be substantially reduced
if Budget or Budget Affiliates ceased

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to exercise operational control over any Budget
Corporate Location that had an average fleet size of
150 vehicles or more during the prior twelve months.
The benefit of such Promotional Programs would be
further reduced if a Budget Corporate Location came
under the control of an unaffiliated Budget Licensee
that declined to participate in the Promotional
Programs.

(b) Therefore, if a change of control or Transfer
affecting a Budget Corporate Location that had an
average fleet size of 150 Vehicles or more during the
prior twelve months should occur during the term of
this Agreement, Budget or the appropriate Budget
Affiliate shall make best efforts to ensure that the
affected former Corporate Location will continue to
participate in the Promotional Programs to the same
extent it participated in such Promotional Programs
while controlled or operated by Budget or a Budget
Affiliate, notwithstanding any change of control or
Transfer affecting such Budget Corporate Location. As
used herein, the term "Transfer" means the sale,
lease, assignment, franchise, license, transfer or
other disposition of all or any portion of any Budget
Corporate Location or any fixed assets, real
properties, or other property or assets reasonably
necessary for the conduct of the Budget Rent A Car or
Budget Rent A Truck business at such Location.

(c) If the total purchases of Ford Vehicles by Budget in
any Model Year shall drop below the total of the
purchases of Ford Vehicles in the Model Year of 1997,
whether as a result of a change of control or
Transfer of one or more Budget Corporate Locations,
as a result of any change in control of Budget or any
Budget Affiliate, or otherwise, then Ford may take
one of the following actions at its sole discretion:

(i) reduce the base payment for promotional
programs set forth in Paragraph 5 for that
Model Year by the percentage by which the
purchases of Ford Vehicles for that Model
Year dropped below the Model Year of 1997;
or

(ii) reduce the increased payments for
promotional programs set forth in

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Paragraph 6 for that Model Year by the
percentage by which the purchases of Ford
Vehicles for that Model Year dropped below
the Model Year of 1997.

11. Confidentiality.

(a) This Agreement, or any part of the contents hereof,
and all records, statements and matters relating
hereto and all information and data disclosed by the
parties to each other hereunder except information
that is also publicly disclosed or information
obtained from third parties (collectively
"Confidential Material") shall be treated as
confidential and Ford and Budget each shall take or
cause to be taken the same degree of care in
preventing disclosure to third parties of the
Confidential Material as it does with its own
confidential trade or business information. Further,
except as may otherwise be required by law or by
subpoena or civil investigative demand, neither party
shall provide the Confidential Material, or any part
thereto, to any other person or legal entity, without
the prior written consent of the other (which consent
shall not be withheld unreasonably), other than to
the following persons or legal entities having a need
to know: (i) its accountants, attorneys and
investment bankers; or (ii) any financial institution
that it a creditor of or is making or negotiating
loans to, or equity investments in, Budget or Ford,
as the case may be. In disclosing the Confidential
Material to any of the persons or legal entities
referred to in clauses (i) and (ii) above, the
disclosing party will impose on the receiving party
the same degree of confidentiality and care that Ford
and Budget have undertaken in the first sentence of
this Paragraph or, in the case of Confidential
Material supplied to any person or governmental
agency pursuant to subpoena or civil investigative
demand, request of the Securities and Exchange
Commission or similar request, the disclosing party
will seek an appropriate protective order or
confidential treatment, and will use its best efforts
to assure that the receiving persons or entities
return all copies of all the Confidential Material
that shall have been furnished to it, promptly after
the receiving party shall

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have completed its required analysis or review of
such Material.

(b) Ford and Budget each shall use its best efforts to
keep, and shall cause its respective Affiliates to
keep, confidential the terms and conditions of this
Agreement and, without the express prior written
consent of the other, shall not in any manner or for
any reason disclose any part or the whole of this
Agreement except to its officers, directors, and key
employees on a need-to-know basis.

12. Furnishing Copies of Promotional Programs. Budget will furnish to
Ford, upon request made at any time not more than twice a year, copies or
examples of all Promotional Program materials (including, without limitation,
print advertisements, collateral material, mat services, telecommunication
material and outdoor displays) prepared for Budget or on Budget's behalf and
placed by or through its advertising agencies during the month preceding such
request.

13. Budget to Control Promotional Programs. Budget will have sole
discretion and control over all copy, art work, editorial matter, media and
release dates for all Promotional Programs.

14. No Copyright Violation. Budget warrants that no Promotional Program
or other information or material released by Budget or under its control
that contains any pictorial representation of a Ford Vehicle or any reference to
Ford or its Affiliates will violate the copyright or right of privacy of, or
constitute a libel or slander or actionable derogation of, or violate any legal
or equitable right of, any person or entity; and in all other respects Budget
agrees, in the performance of its services hereunder, to comply with all laws,
rules and regulations and other legal requirements applicable to the performance
of such services.

15. Budget's Indemnity of Ford. Budget will indemnify and hold harmless
Ford, its dealers, its Affiliates and their dealers from and against all claims,
damages, liabilities, losses, costs and expenses (including, without limitation,
reasonable attorneys fees) arising out of or connected with any advertising,
promotion or publicity released by Budget or under Budget's control and with any
failure by Budget to perform its obligations hereunder.

16. Ford's Indemnity of Budget. Ford will indemnify and hold harmless
Budget, its Affiliates and Budget Licensees from and against all claims,
damages, liabilities, losses, costs and expenses (including, without limitation,
reasonable attorneys fees) arising out of or connected with the proper use of
any pictorial representation, information or data furnished by Ford

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hereunder and with any failure by Ford to perform its obligations hereunder.

17. Agreement Not in Connection with Vehicle Sales. This Agreement is
not made in connection with or as a part of any transaction related to the sale
of any Ford Vehicle or Vehicles, and nothing contained herein will be construed
as imposing, directly or indirectly, any obligation on anyone to purchase or
supply any Ford Vehicles.

18. No Advertising of Competitive Products. Budget shall not, except as
otherwise specifically provided, publish, place or pay for any advertising or
promotion of any make of Vehicle other than a Ford Vehicle which Ford, in its
sole discretion, believes has reduced or may reduce the value to Ford or its
Affiliates of the Promotional Programs or other services to be provided by
Budget. Budget shall, to the extent practicable, prevent Affiliates and any
Budget Licensee from conducting such promotions or publishing any of such
advertising as referred to in this Paragraph.

19. Termination by Either Party. If either Budget or Ford fails to
fulfill its obligations under this Agreement, the other may terminate this
Agreement as of the last day of any succeeding month by giving at least 30
days, prior notice of termination to the party in breach unless such breach be
cured in such notice period, or, if not capable of being cured in such notice
period, the curing thereof is commenced and proceeds with all due diligence
during such notice unless such breach be cured in such notice period, or, if not
capable of being cured in such notice period, the curing thereof is commenced
and proceeds with all due diligence during such notice period and is cured with
60 days; provided, however, in case of such termination, Ford agrees to pay
Budget on a monthly pro rata basis for all commitments for Promotional Programs
discussed at the quarterly meetings described in Paragraph 3, provided that such
commitments shall be carried out in full by Budget.

20. Termination for Illegality. If, in the opinion of Ford's legal
counsel, this Agreement or any substantial part is rendered illegal by enactment
of a statute or a final decision by a court of competent jurisdiction or would
require Ford to make similar payments to or for the benefit of Ford franchised
dealers or others, either party may terminate this Agreement, effective
immediately, by giving notice to the other party, whereupon neither party shall
have further obligation to the other except as to such obligations that are due
and payable as of the date of termination.

21. Examination of Budget Records. Budget agrees that Ford will have
the right, through its duly authorized agents or representatives, to examine all
pertinent records of Budget and its Affiliates, including, without limitation,
records as to any Budget Location, at reasonable times for the purposes of
determining, and to the extent necessary for the determination

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FILED SEPARATELY WITH THE COMMISSION.

of, the accuracy of all information that may be furnished by Budget to Ford
hereunder. Such records will include all documents of Budget and its Affiliates
and such Licensee information as Budget may have in their custody and control
pertaining to the Promotional Programs or to Acquisitions or the number of
Vehicles at Budget Locations.

22. Changes. This Agreement may not be changed in any way except by an
instrument in writing signed and delivered by the duly authorized
representatives of Ford and Budget.

23. Notices. Any notice or other communication required or permitted
hereunder shall be in writing, will be given by registered or certified United
States mail, and shall be deemed given when deposited in the mail, postage paid
and addressed as follows:

As to Ford:

Ford Motor Company
300 Renaissance Center
P.O. Box 43362
Detroit, Michigan 48243
Attention: Executive Director,
Rental, Lease and Remarketing Operations

with a copy to:

Ford Motor Company
The American Road
Dearborn, Michigan 48121
Attention: Secretary

As to Budget:

Budget Rent A Car Corporation
4225 Naperville Road
Lisle, Illinois 60532
Attention: Chief Executive Officer

Such addresses and persons may be changed by notice given in like
manner.

24. Michigan Agreement. This Agreement shall be construed in accordance
with and governed by the laws of the State of Michigan without giving effect to
the principles of conflicts of law thereof.

25. Dispute Resolution. If a dispute arises between Ford and Budget
relating to this Agreement, the following procedure shall be implemented, and
neither party shall pursue other available remedies, except that either party
may seek injunctive relief from a court where appropriate in order to maintain
the status quo while this procedure is being followed:

13
<PAGE> 14
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A
REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

(a) Ford and Budget shall hold a meeting promptly, attended by
persons with decision-making authority regarding the dispute,
to attempt in good faith to negotiate a resolution of the
dispute; provided, however, that no such meeting shall be
deemed to vitiate or reduce the obligations and liabilities of
the parties hereunder or be deemed a waiver by a party hereto
of any remedies to which such party would otherwise be
entitled hereunder.

(b) If, within 30 days after such meeting, Ford and Budget have
not succeeded in negotiating a resolution of the dispute, they
shall submit the dispute to mediation in accordance with the
then current Model Procedure for Mediation of Business
Disputes of the Center for Public Resources and to bear
equally the costs of mediation.

(c) Ford and Budget will jointly appoint a mutually acceptable
mediator, seeking assistance in such regard from the Center
for Public Resources if they have been unable to agree upon
such appointment within 20 days from the conclusion of the
negotiation period.

(d) Ford and Budget shall participate in good faith in the
mediation and negotiations related thereto for a period of 30
days. If the parties are not successful in resolving the
dispute through mediation, then the parties agree to submit
the matter to binding arbitration in accordance with the
Center for Public Resources Rules for Non-Administered
Arbitration of Business Disputes, by a sole arbitrator.

(e) Mediation or arbitration shall take place in Detroit,
Michigan, unless otherwise agreed by the parties. The
substantive and procedural law of the State of Michigan shall
apply to the proceedings. Equitable remedies shall be
available in any arbitration. Punitive damages shall not be
awarded. This Section 19 is subject to the Federal Arbitration
Act, 9 U.S.C.A. Section 1 et. seq. and judgment upon the award
rendered by the arbitrator, if any, may be entered by any
court having jurisdiction thereof.

26. Entire Agreement. This Agreement supersedes any prior agreements
and understandings, written and oral, between Budget and Ford with respect to
the subject matter hereof; provided, however, the Agreement dated as of July 31,
1990, as amended, shall remain in full force and effect to and including August
31, 1997.

14
<PAGE> 15
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A
REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

27. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of Budget and Ford and their respective successors and
assigns; provided, however, no assignment of the obligations of Budget or Ford
hereunder shall release Budget or Ford, as assignor, from the performance of its
obligations hereunder.

28. Headings. The paragraph headings herein are included for
convenience of reference only and shall not be deemed a part of this Agreement.

15
<PAGE> 16
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED UPON A
REQUEST FOR CONFIDENTIAL TREATMENT AND SUCH PORTIONS HAVE BEEN
FILED SEPARATELY WITH THE COMMISSION.

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

FORD MOTOR COMPANY

By:
--------------------------
Its:
--------------------------

BUDGET RENT A CAR CORPORATION

By:
--------------------------
Its:
--------------------------

<PAGE> 1
EXHIBIT 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

As independent certified public accountants, we hereby consent to the use of
our report (and to all references to our Firm) included in or made a part of
Registration Statement File No. 333-21691.

ARTHUR ANDERSEN LLP

Orlando, Florida
March 27, 1997

<PAGE> 1
[LOGO] KPMG Peat Marwick LLP

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors of
Budget Rent a Car Corporation:

We consent to the inclusion of our report herein and to the reference to our
firm under the heading "Experts" in the prospectus of Team Rental Group, Inc.
dated February 12, 1997.

KPMG Peat Marwick LLP

February 11, 1997
Chicago, Illinois

<PAGE> 1
EXHIBIT 23.3

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors of
Budget Rent a Car Corporation:

We consent to the inclusion of our report herein and to the reference to our
firm under the heading "Experts" in the prospectus of Team Rental Group, Inc.
dated March 27, 1997.

KPMG Peat Marwick LLP

March 28, 1997
Chicago, Illinois

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