-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CocwAetkp8Ai3bnXbFJHKO0idYlO0x/L2JTFGEIpNdTBF+dNi7bM8T2vQL3t1ua/ ME6yHHuCp9HExgjBH7xVAA== 0000950123-97-010374.txt : 19971217 0000950123-97-010374.hdr.sgml : 19971217 ACCESSION NUMBER: 0000950123-97-010374 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 19971216 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOLLAR THRIFTY AUTOMOTIVE GROUP INC CENTRAL INDEX KEY: 0001049108 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AUTO RENTAL & LEASING (NO DRIVERS) [7510] IRS NUMBER: 731356520 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-39661 FILM NUMBER: 97738779 BUSINESS ADDRESS: STREET 1: 5330 EAST 31ST STREET CITY: TULSA STATE: OK ZIP: 74135 BUSINESS PHONE: 9186607700 MAIL ADDRESS: STREET 1: 5330 EAST 31ST STREET CITY: TULSA STATE: OK ZIP: 74135 S-1/A 1 AMENDMENT NO. 2 TO FORM S-1 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 1997 REGISTRATION NO. 333-39661 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 2 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 7514 73-1356520 (STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
5330 EAST 31ST STREET TULSA, OKLAHOMA 74135 (918) 660-7700 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ------------------------ STEVEN B. HILDEBRAND VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. 5330 EAST 31ST STREET TULSA, OKLAHOMA 74135 (918) 660-7700 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ------------------------ WITH COPIES TO: PAUL H. WILSON, JR., ESQ. STEPHEN W. RAY, ESQ. STEPHEN H. SHALEN, ESQ. DEBEVOISE & PLIMPTON HALL, ESTILL, HARDWICK, GABLE, CLEARY, GOTTLIEB, STEEN & 875 THIRD AVENUE GOLDEN & NELSON HAMILTON NEW YORK, NEW YORK 10022 320 SOUTH BOSTON AVENUE ONE LIBERTY PLAZA (212) 909-6000 SUITE 400 NEW YORK, NEW YORK 10006 TULSA, OKLAHOMA 74103 (212) 225-2000 (918) 594-0400
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. ------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ================================================================================ 2 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the expenses expected to be incurred in connection with the issuance and distribution of the common stock registered hereby, all of which expenses, except for the Commission registration fee, the New York Stock Exchange listing fee and the NASD filing fee, are estimates:
DESCRIPTION AMOUNT - -------------------------------------------------------------------------------- ---------- SEC registration fee............................................................ $ 172,500 New York Stock Exchange listing fee and expenses................................ 157,653 NASD filing fee................................................................. 30,500 Blue Sky fees and expenses (including legal fees)............................... 5,000 Printing and engraving expenses................................................. 275,000 Legal fees and expenses (other than Blue Sky)................................... 850,000 Accounting fees and expenses.................................................... 800,000 Transfer Agent and Registrar's fee.............................................. 20,000 Miscellaneous................................................................... 189,347 ---------- Total...................................................................... $2,500,000 =========
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the General Corporation Law of the State of Delaware ("GCL") provides that a corporation has the power to indemnify any director or officer, or former director or officer, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) against expenses (including attorney's fees), judgments, fines or amounts paid in settlement actually and reasonably incurred by them in connection with the defense of any action by reason of being or having been directors or officers, if such person shall have acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceedings, provided that such person had no reasonable cause to believe his conduct was unlawful, except that, if such action shall be in the right of the corporation, no such indemnification shall be provided as to any claim, issue or matter as to which such person shall have been judged to have been liable to the corporation unless and to the extent that the Court of Chancery of the State of Delaware, or any court in which such suit or action was brought, shall determine upon application that, in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as such court shall deem proper. As permitted by Section 102(b)(7) of the GCL, the Certificate of Incorporation of the Company (filed herewith as Exhibit 3.1) (the "Certificate of Incorporation") contains a provision to limit the personal liability of directors of the Company for violations of their fiduciary duty. This provision eliminates each director's liability for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted by the GCL as in effect from time to time. The Certificate of Incorporation requires the Company to indemnify its directors and officers to the fullest extent permitted by the GCL, and requires the Company, in the case of officers and directors, to advance or reimburse litigation expenses upon submission by the director or officer of an undertaking to repay such advances or reimbursements if it is ultimately determined that indemnification is not available to such director or officer pursuant to the Certificate of Incorporation. The Company also has insurance policies against certain liabilities asserted against its directors and officers in their capacities as such. ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES. None. II-1 3 ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) Exhibits. See Exhibit Index following the Appendix to this registration statement. (b) Financial Statement Schedules. See Schedule II, Valuation and Qualifying Accounts, and related Independent Auditors' Report, following the Exhibit Index. All other schedules are omitted because the information is not required or because the information is included in the Consolidated Financial Statements or Notes thereto. ITEM 17. UNDERTAKINGS. The undersigned registrant hereby undertakes: (a) To provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser. (b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions described under Item 14 above, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (c) For purposes of determining any liability under the Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Act shall be deemed to be part of this registration statement as of the time it was declared effective. (d) For the purpose of determining any liability under the Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused Amendment No. 2 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, New York, on December 15, 1997. DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. By: /s/ STEVEN B. HILDEBRAND ------------------------------------ Name: Steven B. Hildebrand Title: Vice President, Chief Financial Officer and Treasurer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
NAME TITLE DATE - ----------------------------------- ------------------------------------- ------------------ /s/ JOSEPH E. CAPPY Chairman of the Board, Chief December 15, 1997 - ----------------------------------- Executive Officer, President and Joseph E. Cappy Director (Principal Executive Officer) /s/ DONALD M. HIMELFARB Executive Vice President and Director December 15, 1997 - ----------------------------------- Donald M. Himelfarb /s/ GARY L. PAXTON Executive Vice President and Director December 15, 1997 - ----------------------------------- Gary L. Paxton /s/ STEVEN B. HILDEBRAND Vice President, Chief Financial December 15, 1997 - ----------------------------------- Officer and Treasurer (Principal Steven B. Hildebrand Financial Officer and Principal Accounting Officer) /s/ THOMAS P. CAPO Director December 15, 1997 - ----------------------------------- Thomas P. Capo /s/ EDWARD J. HOGAN Director December 15, 1997 - ----------------------------------- Edward J. Hogan /s/ EDWARD C. LUMLEY Director December 15, 1997 - ----------------------------------- Edward C. Lumley /s/ JOHN C. POPE Director December 15, 1997 - ----------------------------------- John C. Pope /s/ JOHN P. TIENEY Director December 15, 1997 - ----------------------------------- John P. Tieney /s/ EDWARD L. WAX Director December 15, 1997 - ----------------------------------- Edward L. Wax *By: /s/ STEVEN B. HILDEBRAND Attorney-In-Fact - ----------------------------------- Steven B. Hildebrand
5 APPENDIX DESCRIBING GRAPHIC MATERIAL PURSUANT TO RULE 304 OF REGULATION S-T INSIDE FRONT COVER Photo at top: Dollar advertisement depicting actor Chevy Chase. Photo at bottom left: Thrifty advertisement depicting vacation destinations and Thrifty location. Photo at bottom right: Thrifty advertisement depicting Chrysler vehicles. INSIDE BACK COVER Photo at top left: Dollar counter at Orlando Sanford International Airport. Photo at top right: Dollar location at Newark International Airport. Photo at bottom left: Thrifty counter at Tulsa International Airport. Photo at bottom right: Thrifty location at Memphis International Airport. II-4 6 EXHIBIT INDEX The Company agrees to furnish a copy of all agreements relating to long-term debt upon request of the Commission.
EXHIBIT NO. DESCRIPTION - ----------- ------------------------------------------------------------------------------- 1.1 Form of U.S. Underwriting Agreement* 1.2 Form of Subscription Agreement* 3.1 Certificate of Incorporation of the Company*** 3.2 By-Laws of the Company*** 4.1 Form of Certificate of Common Stock* 4.2 Base Indenture dated as of December 13, 1995 between Thrifty Car Rental Finance Corporation and Bankers Trust Company*** 4.3 Series 1995-1 Supplement to Base Indenture dated as of December 13, 1995 between Thrifty Car Rental Finance Corporation and Bankers Trust Company*** 4.4 Master Motor Vehicle Lease and Servicing Agreement dated as of December 13, 1995 between Thrifty Car Rental Finance Corporation and Thrifty*** 4.5 Master Collateral Agency Agreement dated as of December 13, 1995 between Thrifty Car Rental Finance Corporation and Bankers Trust Company*** 4.6 Form of Revolving Credit Agreement among the Company, Dollar, Thrifty and the Institutions named therein** 4.7 Form of Series 1997-1 Supplement to Base Indenture between Rental Car Finance Corp. and Bankers Trust Company** 4.8 Form of Master Motor Vehicle Lease and Servicing Agreement among the Company, Dollar, Thrifty and Rental Car Finance Corp.** 4.9 Commitment Letter, dated November 19, 1997, among Credit Suisse First Boston, The Chase Manhattan Bank, Chase Securities Inc., Dollar, Thrifty and the Company, regarding a $230,000,000 Revolving Credit Facility and a $545,000,000 Commercial Paper Liquidity Facility and related Term Sheet** 4.10 Form of Chrysler Support Letter of Credit and Reimbursement Agreement, among Chrysler, Dollar, Thrifty, and the Company* 5 Opinion of Debevoise & Plimpton regarding legality of the Common Stock* 10.1 Vehicle Supply Agreement between Chrysler and Dollar***+ 10.2 Amended and Restated Vehicle Supply Agreement between Chrysler and Thrifty***+ 10.3 [Reserved] 10.4 [Reserved] 10.5 [Reserved] 10.6 [Reserved] 10.7 [Reserved] 10.8 Pentastar Transportation Group, Inc. Deferred Compensation Plan*** 10.9 Pentastar Transportation Group, Inc. Executive Retention Plan*** 10.10 Dollar Thrifty Automotive Group, Inc. Long-Term Incentive Plan** 10.11 Tax Sharing and Disaffiliation Agreement between Chrysler Corporation and Dollar Thrifty Automotive Group, Inc.*** 10.12 Form of Indemnification Agreement between the Company and Chrysler* 21 Subsidiaries of the Company** 23.1 Consent of Deloitte & Touche LLP, Independent Auditors of the Company** 23.2 Consent of Debevoise & Plimpton (included in Exhibit 5)* 23.3 Consent of Donovan Leisure Newton & Irvine LLP*** 24 Powers of Attorney*** 27.1 Financial Data Schedule***
- ------------------------- * To be filed by amendment ** Filed herewith *** Previously filed + The Company has applied for confidential treatment of portions of this Exhibit. Accordingly, portions thereof have been omitted and filed separately. II-5 EX-4.6 2 REVOLVING CREDIT AGREEMENT 1 EXHIBIT 4.6 U.S. $215,000,000 CREDIT AGREEMENT, dated as of December __, 1997, among DOLLAR THRIFTY AUTOMOTIVE GROUP, INC., DOLLAR RENT A CAR SYSTEMS, INC. and THRIFTY RENT-A-CAR SYSTEM, INC., as the Borrowers, and VARIOUS FINANCIAL INSTITUTIONS, as the Lenders, CREDIT SUISSE FIRST BOSTON, as the Administrative Agent, and THE CHASE MANHATTAN BANK, as the Syndication Agent. Arranged By CREDIT SUISSE FIRST BOSTON CHASE SECURITIES INC. 2 TABLE OF CONTENTS Section Page - ------- ---- ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1.1. Defined Terms.......................................................3 1.2. Use of Defined Terms...............................................35 1.3. Cross-References...................................................36 1.4. Accounting and Financial Determinations............................36 ARTICLE II COMMITMENTS, BORROWING PROCEDURES AND NOTES 2.1. Commitments........................................................36 2.1.1. Loan Commitment....................................................36 2.1.2. Commitment to Issue Letters of Credit..............................36 2.1.3. Lenders Not Permitted or Required to Make Loans or Issue Letters of Credit Under Certain Circumstances....................36 2.2. Reduction of Commitment Amounts....................................37 2.2.1. Optional...........................................................37 2.2.2. Mandatory..........................................................37 2.2.3. Corresponding Reductions...........................................38 2.3. Borrowing Procedure................................................38 2.4. Continuation and Conversion Elections..............................39 2.5. Funding............................................................39 2.6. Loan Accounts......................................................40 ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES 3.1. Repayments and Prepayments.........................................40 3.2. Interest Provisions................................................42 3.2.1. Rates..............................................................42 3.2.2. Post-Maturity Rates................................................42 3.2.3. Payment Dates......................................................42 3.3. Fees...............................................................43 3.3.1. Commitment Fees....................................................43 3.3.2. Arrangement Fees...................................................43 3.3.3. Administrative Agent's Fee.........................................43 3.3.4. Letter of Credit Face Amount Fee...................................44 3 Section Page - ------- ---- 3.3.5. Letter of Credit Issuing Fee.......................................44 3.3.6. Letter of Credit Administrative Fee................................44 ARTICLE IV LETTERS OF CREDIT 4.1. Issuance Requests..................................................44 4.2. Issuances and Extensions...........................................46 4.3. Expenses...........................................................46 4.4. Other Lenders' Participation.......................................46 4.5. Disbursements......................................................47 4.6. Reimbursement......................................................48 4.7. Deemed Disbursements...............................................48 4.8. Nature of Reimbursement Obligations................................49 4.9. Indemnity..........................................................50 4.10. Borrowers' Guaranty of Reimbursement Obligations of its Subsidiaries.................................................50 4.10.1. Guaranty...........................................................50 4.10.2. Acceleration of Guaranty...........................................51 4.10.3. Guaranty Absolute, etc.............................................51 4.10.4. Reinstatement, etc.................................................52 4.10.5. Waiver, etc........................................................52 4.10.6. Postponement of Subrogation, etc...................................53 4.10.7. Right of Contribution..............................................53 4.10.8. Successors, Transferees and Assigns; Transfers of Notes, etc.......54 4.11. No Bankruptcy Petition Against RCFC or Dollar Thrifty Funding......54 ARTICLE V CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS 5.1. Eurodollar Rate Lending Unlawful...................................55 5.2. Deposits Unavailable...............................................55 5.3. Increased Eurodollar Loan Costs, etc...............................55 5.4. Funding Losses.....................................................56 5.5. Increased Capital Costs............................................56 5.6. Taxes..............................................................57 5.7. Payments, Computations, etc........................................60 5.8. Sharing of Payments................................................60 5.9. Setoff.............................................................61 5.10. Replacement of Lender..............................................61 -ii- 4 Section Page - ------- ---- ARTICLE VI CONDITIONS PRECEDENT 6.1. Initial Credit Extension...........................................62 6.1.1. Resolutions, etc...................................................63 6.1.2. Delivery of Notes..................................................63 6.1.3. Transaction Consummated............................................63 6.1.4. Payment of Outstanding Indebtedness, etc...........................64 6.1.5. Delivery of Financial Statements...................................64 6.1.6. Consents, etc......................................................64 6.1.7. No Material Adverse Change.........................................65 6.1.8. Availability Under Credit Facility.................................65 6.1.9. Business Plan......................................................65 6.1.10. Closing Date Certificate...........................................65 6.1.11. Guaranty...........................................................65 6.1.12. Pledge Agreement...................................................65 6.1.13. Security Agreement.................................................66 6.1.14. Mortgages..........................................................66 6.1.15. Intercreditor Agreement............................................67 6.1.16. Insurance..........................................................67 6.1.17. Issuance Request...................................................67 6.1.18. Opinions of Counsel................................................67 6.1.19. Closing Fees, Expenses, etc........................................68 6.2. All Credit Extensions..............................................68 6.2.1. Compliance with Warranties, No Default, etc........................68 6.2.2. Credit Request.....................................................69 6.2.3. Enhancement Letters of Credit......................................69 6.2.4. Satisfactory Legal Form............................................69 ARTICLE VII REPRESENTATIONS AND WARRANTIES 7.1. Organization, etc..................................................70 7.2. Due Authorization, Non-Contravention, etc..........................70 7.3. Government Approval, Regulation, etc...............................71 7.4. Validity, etc......................................................71 7.5. Financial Information; Absence of Undisclosed Liabilities..........71 7.6. No Material Adverse Change.........................................72 7.7. Litigation, Labor Controversies, etc...............................72 7.8. Subsidiaries.......................................................72 -iii- 5 Section Page - ------- ---- 7.9. Ownership of Properties............................................72 7.10. Taxes..............................................................73 7.11. Pension and Welfare Plans..........................................73 7.12. Environmental Warranties...........................................73 7.13. Intellectual Property..............................................75 7.14. Regulations G, U and X.............................................75 7.15. Accuracy of Information............................................75 7.16. Transaction Documents..............................................76 7.17. Non-Guarantor Subsidiaries.........................................76 ARTICLE VIII COVENANTS 8.1. Affirmative Covenants..............................................77 8.1.1. Financial Information, Reports, Notices, etc.......................77 8.1.2. Compliance with Laws, Material Agreements, etc.....................80 8.1.3. Maintenance of Properties..........................................80 8.1.4. Insurance..........................................................80 8.1.5. Books and Records..................................................81 8.1.6. Environmental Covenant.............................................81 8.1.7. Use of Proceeds....................................................82 8.1.8. Additional Real Property...........................................82 8.1.9. Future Subsidiaries................................................83 8.2. Negative Covenants.................................................86 8.2.1. Business Activities................................................86 8.2.2. Indebtedness.......................................................86 8.2.3. Liens..............................................................89 8.2.4. Financial Condition................................................91 8.2.5. Investments........................................................94 8.2.6. Restricted Payments, etc...........................................96 8.2.7. Capital Expenditures, etc..........................................98 8.2.8. Take or Pay Contracts..............................................98 8.2.9. Consolidation, Merger, etc.........................................98 8.2.10. Asset Dispositions, etc............................................98 8.2.11. Modification of Certain Agreements.................................99 8.2.12. Transactions with Affiliates......................................100 8.2.13. Negative Pledges, Restrictive Agreements, etc.....................100 8.2.14. Ability to Amend; Restrictive ....................................101 8.2.15. Accounting Changes................................................101 8.2.16. Activities of the Parent..........................................101 -iv- 6 Section Page - ------- ---- ARTICLE IX EVENTS OF DEFAULT 9.1. Listing of Events of Default......................................102 9.1.1. Non-Payment of Obligations........................................102 9.1.2. Breach of Warranty................................................102 9.1.3. Non-Performance of Certain Covenants and Obligations..............102 9.1.4. Non-Performance of Other Covenants and Obligations................102 9.1.5. Default on Other Indebtedness.....................................102 9.1.6. Judgments.........................................................103 9.1.7. Pension Plans.....................................................103 9.1.8. Change in Control.................................................103 9.1.9. Bankruptcy, Insolvency, etc.......................................103 9.1.10. Impairment of Security, ..........................................104 9.2. Action if Bankruptcy..............................................104 9.3. Action if Other Event of Default..................................104 ARTICLE X BORROWERS GUARANTY 10.1. Guaranty..........................................................105 10.2. Acceleration of Borrowers Guaranty................................105 10.3. Guaranty Absolute, etc............................................106 10.4. Reinstatement, etc................................................107 10.5. Waiver, etc.......................................................107 10.6. Postponement of Subrogation, etc..................................107 10.8. Successors, Transferees and Assigns; Transfers of Notes, etc......108 ARTICLE XI THE AGENTS 11.1. Actions...........................................................109 11.2. Funding Reliance, etc.............................................109 11.3. Exculpation.......................................................110 11.4. Successor.........................................................110 11.5. Credit Extensions by Agents.......................................111 11.6. Credit Decisions..................................................111 11.7. Collateral Agent..................................................111 11.8. Copies, etc.......................................................111 -v- 7 Section Page - ------- ---- ARTICLE XII MISCELLANEOUS PROVISIONS 12.1. Waivers, Amendments, etc..........................................111 12.2. Notices...........................................................113 12.3. Payment of Costs and Expenses.....................................113 12.4. Indemnification...................................................114 12.5. Survival..........................................................115 12.6. Severability......................................................115 12.7. Headings..........................................................115 12.8. Execution in Counterparts, Effectiveness, etc.....................115 12.9. Governing Law; Entire Agreement...................................115 12.10. Successors and Assigns............................................115 12.11. Sale and Transfer of Loans and Notes; Participations in Loans and Notes..............................................116 12.11.1. Assignments.......................................................116 12.11.2. Participations....................................................118 12.12. Other Transactions................................................119 12.13. Independence of Covenants.........................................119 12.14. Confidentiality...................................................119 12.15. Forum Selection and Consent to Jurisdiction.......................120 12.16. Waiver of Jury Trial..............................................121 -vi- 8 SCHEDULE I - Lender Information SCHEDULE II - Subordinated Intercompany Note Terms SCHEDULE III - Existing Material Property SCHEDULE IV - Excluded Property SCHEDULE V - Certain Existing Rental Sites EXHIBIT A - Form of Revolving Note EXHIBIT B-1 - Form of Borrowing Request EXHIBIT B-2 - Form of Issuance Request EXHIBIT C - Form of Continuation/Conversion Notice EXHIBIT D - Form of Compliance Certificate EXHIBIT E - Form of Pledge Agreement EXHIBIT F - Form of Security Agreement EXHIBIT G - Form of Subsidiary Guaranty EXHIBIT H-1 - Form of Mortgage EXHIBIT H-2 - Form of Deed of Trust EXHIBIT I - Form of Intercreditor Agreement [EXHIBIT J - Form of CP Enhancement Letter of Credit] EXHIBIT K - Form of Closing Date Certificate EXHIBIT L - Form of Lender Assignment Agreement EXHIBIT M - Form of U.S. Tax Compliance Certificate -vii- 9 CREDIT AGREEMENT THIS CREDIT AGREEMENT, dated as of December __, 1997, among DOLLAR THRIFTY AUTOMOTIVE GROUP, INC., a Delaware corporation (the "Parent"), DOLLAR RENT A CAR SYSTEMS, INC., an Oklahoma corporation ("Dollar"), THRIFTY RENT-A-CAR SYSTEM, INC., an Oklahoma corporation ("Thrifty," and, together with Dollar, the "Subsidiary Borrowers"; the Parent and the Subsidiary Borrowers being collectively referred to herein as the "Borrowers"), various financial institutions as are or may become parties hereto (collectively, the "Lenders"), CREDIT SUISSE FIRST BOSTON ("Credit Suisse First Boston"), as the administrative agent (in such capacity, the "Administrative Agent") for the Lenders, THE CHASE MANHATTAN BANK ("Chase"), as the syndication agent (in such capacity, the "Syndication Agent") and, together with the Administrative Agent, the "Agents") for the Lenders and CREDIT SUISSE FIRST BOSTON and CHASE SECURITIES INC. as the co-arrangers (in such capacities, the "Arrangers"). W I T N E S S E T H: WHEREAS, the Subsidiary Borrowers are engaged directly and through their various Subsidiaries (capitalized terms used in these recitals to have the meanings set forth in Section 1.1 below) in the business of (a) renting worldwide for general use passenger automobiles, light and medium duty trucks and vans, (b) selling in the United States and Canada late model automobiles, (c) franchising the foregoing business to other Persons and (d) providing support and services to franchisees, including fleet leasing of vehicles; WHEREAS (a) the Parent intends to issue shares of its common stock, par value $0.01 per share (the "Common Stock"), pursuant to a registered public offering for net cash proceeds of at least $45,000,000, which proceeds will be used to provide collateral for the financing of vehicles by the Parent and its subsidiaries (the "Primary Equity Offering"), and (b) Chrysler Corporation, a Delaware corporation ("Chrysler"), intends to sell 20,000,000 shares of the Common Stock of the Parent owned by it pursuant to a registered public offering which, following the consummation thereof, will result in the Parent no longer being a subsidiary of Chrysler (the "Secondary Equity Offering," and, together with the Primary Equity Offering, the "Equity Offerings"); WHEREAS, concurrently with the initial extension of credit hereunder, the Parent (a) intends to implement through a special purpose, bankruptcy remote, Wholly Owned Subsidiary, Rental Car Finance Corp., formerly known as Thrifty Car Rental Finance Corporation ("RCFC"), a $900,000,000 medium-term note program secured by vehicles and related assets to replace existing financing arrangements with Chrysler Financial Corporation and provide funds for the purchase of additional vehicles (the "MTN Program"); WHEREAS, after the initial extension of credit hereunder, (a) the Parent intends to implement through a to-be-formed special purpose, bankruptcy remote, Wholly Owned Subsidiary ("Dollar Thrifty Funding"), a commercial paper program of up to $615,000,000 10 secured by vehicles and related assets, the proceeds of which will be used to finance vehicle fleet growth and to refinance existing vehicle fleet indebtedness (the "CP Program"), and (b) in connection with the CP Program, Dollar Thrifty Funding would enter into a 364-day revolving liquidity facility in an amount of up to $545,000,000 to provide backup liquidity for the commercial paper issued pursuant to the CP Program (the "Liquidity Facility"); WHEREAS, in connection with the foregoing, the Parent and its Subsidiaries will enter into certain agreements with Chrysler and its subsidiaries relating to the separation of the Parent from Chrysler, including (i) credit support arrangements for the MTN Program (and, possibly, the CP Program) and (ii) other matters with respect to taxes and insurance (collectively, the "Continuing Chrysler Arrangements," and, together with the Equity Offerings, the MTN Program and the CP Program, the "Transaction"); WHEREAS, in connection with the Transaction, the Borrowers desire to obtain Commitments from the Lenders pursuant to which (a) Loans will be made to the Borrowers from time to time prior to the Commitment Termination Date; and (b) Letters of Credit will be issued by the Issuer for the account of the Borrowers and under the several responsibilities of the Lenders from time to time prior to the Commitment Termination Date; in maximum aggregate principal amount for Loans at any one time outstanding not to exceed in the aggregate $70,000,000 and in a maximum aggregate Stated Amount for Letters of Credit outstanding at any one time not to exceed in the aggregate $190,000,000; WHEREAS, the Lenders and the Issuer are willing, on the terms and subject to the conditions hereinafter set forth (including Article VI), to extend such Commitments, make such Loans to the Borrowers and issue, and participate in, such Letters of Credit; and WHEREAS, (a) the proceeds of such Loans will be used for general corporate purposes of Dollar, Thrifty and the other operating Subsidiaries of the Parent; and (b) such Letters of Credit will be used by the Borrowers and their respective operating Subsidiaries (i) as credit and/or liquidity enhancement for the CP Program and the MTN Program (the "Enhancement Letters of Credit"), and (ii) for other general corporate purposes (including performance and insurance bonds) (the "General Letters of Credit"); -2- 11 NOW, THEREFORE, the parties hereto agree as follows: ARTICLE I DEFINITIONS AND ACCOUNTING TERMS SECTION 1.1. Defined Terms. The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof): "ABR Loan" means a Loan bearing interest at a fluctuating rate determined by reference to the Alternate Base Rate. "Account Party" means (a) any Borrower, (b) in any case of the CP Enhancement Letter of Credit, Dollar Thrifty Funding, (c) any Subsidiary Guarantor or SPC for the account of which a Letter of Credit is issued in accordance with Article IV and (d) to the extent permitted by clause (k) of Section 8.2.5, any franchisee of a Subsidiary Borrower for the account of which a Letter of Credit is issued in accordance with Article IV. "Additional Material Property" means any property with respect to which a Mortgage is required to be delivered pursuant to Section 8.1.8 hereof. "Adjusted Debt" means, at any time, the sum of (a) Non-Vehicle Debt at such time plus (b) the maximum amount available for drawing under each letter of credit, bond or similar obligation (including Letters of Credit and Surety Bonds, but excluding any Letter of Credit to the extent it may be drawn upon to reimburse a payment made by the issuer of a Surety Bond under such Surety Bond), whether or not drawn and whether or not any conditions to drawing can then be met at such time. "Adjusted EBITDA" means, for any applicable period, the excess of (a) EBITDA for such period over (b) to the extent added in arriving at such EBITDA, the sum of (i) the aggregate amount of depreciation in respect of Vehicles during such period plus (ii) Vehicle Interest Expense during such period. "Administrative Agent" is defined in the preamble and includes each other Person as shall have subsequently been appointed as the successor Administrative Agent pursuant to Section 11.4. -3- 12 "Affiliate" of any Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person (excluding any trustee under, or any committee with responsibility for administering, any Plan). A Person shall be deemed to be "controlled by" any other Person if such other Person possesses, directly or indirectly, power (a) to vote 10% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors or managing general partners; or (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. Neither Chrysler nor any of its Subsidiaries shall be deemed to be an Affiliate of the Parent solely as a result of its execution and delivery of the Chrysler-Dollar Supply Agreement, the Chrysler-Thrifty Supply Agreement or any agreement evidencing a Continuing Chrysler Arrangement or solely because of its rights thereunder. "Agents" is defined in the preamble. "Aggregate Interest Expense" is defined in clause (a) of the definition of "Non-Vehicle Interest Expense". "Agreement" means, on any date, this Credit Agreement as originally in effect on the Effective Date and as thereafter from time to time amended, supplemented, amended and restated, or otherwise modified and in effect on such date. "Alternate Base Rate" means, on any date and with respect to all ABR Loans, a fluctuating rate of interest per annum equal to the higher of (a) the rate of interest most recently established by Credit Suisse First Boston at its principal office in New York, New York as its base or prime rate for U.S. Dollar loans; and (b) the Federal Funds Rate most recently determined by the Administrative Agent plus 50 basis points. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Rate for any reason, including the inability of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition of "Federal Funds Rate", the Alternate Base Rate shall be determined without regard to clause (b) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. The Alternate Base Rate is not necessarily intended to be the lowest rate of interest determined by Credit Suisse First Boston in connection with extensions of credit. Changes in the rate of interest on that portion of any Loans maintained as ABR Loans will take effect simultaneously with each change in the Alternate Base -4- 13 Rate. The Administrative Agent will give notice promptly to the Borrowers and the Lenders of changes in the Alternate Base Rate. "Applicable Commitment Fee" means, as of any date, a per annum fee on the average daily unused portion of the Commitment Amount determined pursuant to the following pricing grid (expressed in basis points), subject to the provisions of this definition set forth below: PRICING GRID Applicable Leverage Ratio Commitment Fee -------------- -------------- X > 2.0 37.5 - X > 1.0, but < 2.0 30.0 - X < 1.0 25.0 The Applicable Commitment Fee on the average daily unused portion of the Commitment Amount, at any time from and including the Effective Date to (but not including) the date which is 180 days after the Effective Date, shall be 37.5 basis points per annum at such time. The Applicable Commitment Fee, at any time from and after the date which is 180 days after the Effective Date, on the average daily unused portion of the Commitment Amount, shall be determined pursuant to the Pricing Grid above at such time. At all times that the Applicable Commitment Fee is determined by reference to the Pricing Grid, "X" refers to the Leverage Ratio, which ratio shall be determined based upon the Compliance Certificate delivered pursuant to clause (c) of Section 8.1.1 and shall remain in effect until such time as the next Compliance Certificate shall be delivered (and, at such time, the Applicable Commitment Fee shall change based on such next Compliance Certificate); provided, however, that, if any such Compliance Certificate is not delivered to the Administrative Agent on or prior to the date required pursuant to clause (c) of Section 8.1.1, the Applicable Commitment Fee from and including the date on which such Compliance Certificate was required to be delivered to but not including the actual date of delivery of such Compliance Certificate shall conclusively equal the highest Applicable Commitment Fee. "Applicable Margin" means, with respect to any Loan of any type, as of any date, the rate per annum determined pursuant to the following pricing grid (expressed in basis points), subject to the provisions of this definition set forth below: -5- 14 PRICING GRID Eurodollar Loan ABR Loan Leverage Ratio Applicable Margin Applicable Margin -------------- ----------------- ----------------- X > 3.5 250 150 - X > 3.0, but < 3.5 225 125 - X > 2.0, but < 3.0 200 100 - X > 1.0, but < 2.0 175 75 - X < 1.0 150 50 The Applicable Margin, at any time from and including the Effective Date until the date which is 180 days after the Effective Date, for the Loans shall be 250 basis points as to Eurodollar Loans and 150 basis points as to ABR Loans at such time. The Applicable Margin, at any time from and after the date which is 180 days after the Effective Date, for Loans, shall be determined pursuant to the Pricing Grid above at such time. At all times that the Applicable Margin is determined by reference to the Pricing Grid, "X" refers to the Leverage Ratio, which ratio shall be determined based upon the Compliance Certificate delivered pursuant to clause (c) of Section 8.1.1 and shall remain in effect until such time as the next Compliance Certificate shall be delivered (and, at such time, the Applicable Margin shall change based on such next Compliance Certificate); provided, however, that, if any such Compliance Certificate is not delivered to the Administrative Agent on or prior to the date required pursuant to clause (c) of Section 8.1.1, the Applicable Margin for Loans from and including the date on which such Compliance Certificate was required to be delivered to but not including the actual date of delivery of such Compliance Certificate shall conclusively equal the highest Applicable Margin for Loans set forth above. "Arrangers" is defined in the preamble. "Assignee Lender" is defined in Section 12.11.1. "Authorized Officer" means, relative to any Borrower and any other Obligor, those of its officers or managing members (in the case of a limited liability company) whose signatures and incumbency shall have been certified to the Administrative Agent and the Lenders pursuant to Section 6.1.1. "Base Indenture" means the Base Indenture, dated as of December 13, 1995, between RCFC and Bankers Trust Company, as Trustee, as in effect on the date hereof, together with the Base Indenture Supplements thereto, as amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms hereof and thereof. -6- 15 "Base Indenture Supplement" means any supplement to the Base Indenture, including (i) the Series 1997-1 Supplement dated as of December __, 1997 (which supplement was entered into in connection with the MTN Program) and (ii) the supplement to the Base Indenture to be entered into in connection with the CP Program. "Borrower Debtor" is defined in clause (a) of Section 10.1. "Borrower Guarantor" is defined in clause (a) of Section 10.1. "Borrowers" is defined in the preamble. "Borrower Guaranty" means the Obligations of a Borrower Guarantor undertaken pursuant to Article X. "Borrowing" means the Loans of the same type and, in the case of Eurodollar Loans, having the same Interest Period made by all Lenders on the same Business Day and pursuant to the same Borrowing Request in accordance with Section 2.1. "Borrowing Request" means a Loan request and certificate duly executed by an Authorized Officer of any Borrower, substantially in the form of Exhibit B-1 hereto. "Business Acquisition" means the acquisition, by purchase or otherwise, of all or substantially all of the assets and, if applicable, assumption of all or substantially all of the liabilities (or any part of the assets and, if applicable, the liabilities, constituting all or substantially all of a business or line of business) of any Person, whether such acquisition is direct or indirect, including through the acquisition of the business of, or Capital Stock of, such Person. "Business Day" means (a) any day which is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in New York, New York; and (b) relative to the making, continuing, converting, prepaying or repaying of any Eurodollar Loan, any day described in clause (a) above on which dealings in U.S. Dollars are carried on in the London interbank market. "Capital Expenditures" means, for any period, the sum of (a) the aggregate amount of all expenditures of the Parent and its Subsidiaries for fixed or capital assets made during such period which, in accordance with GAAP, would be classified as capital expenditures; and -7- 16 (b) the aggregate amount of all Capitalized Lease Liabilities incurred during such period. "Capital Stock" means with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of such Person's capital stock or equity, whether now outstanding or issued after the date hereof, including all common stock, preferred stock, partnership interests and member interests. "Capitalized Lease Liabilities" means all monetary obligations of the Parent or any of its Subsidiaries under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases, and, for purposes of this Agreement and each other Loan Document, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP, and, with respect to any such leasing or similar arrangement, the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a premium or a penalty. "Cash Equivalent Investments" means (a) U.S. Government Obligations maturing in not more than 270 days; (b) participation certificates (excluding strip mortgage securities that are purchased at prices exceeding their principal amounts) and senior debt obligations of the Federal Home Loan Mortgage Corporation, consolidated system wide bonds and notes of the Farm Credit System, senior debt obligations and mortgage-backed securities (excluding stripped mortgage securities which are purchased at prices exceeding their principal amounts) of the Federal Mortgage Association which, in the case of mortgage-backed securities, are rated at least AA by S&P and Aa by Moody's, senior debt obligations (excluding securities that have no fixed value and/or whose terms do not promise a fixed dollar amount at maturity or call date) of the Student Loan Marketing Association and debt obligations of the Resolution Funding Corp., in each case, maturing not more than 270 days (collectively, "Agency Obligations"); (c) direct obligations of any state of the United States or any subdivision or agency thereof whose short-term unsecured general obligation debt has ratings from S&P of at least A-1 and Moody's of at least P-1 or any obligation that has ratings from S&P and Moody's at least equivalent to A-1 and P-1, respectively, and which is fully and unconditionally guaranteed by any state, subdivision or agency whose short term, unsecured general obligation debt has ratings from S&P and Moody's at least equivalent to A-1 and P-1, respectively; (d) commercial paper maturing in not more than 270 days which is issued by a corporation (other than an Affiliate of any Obligor) and having ratings from S&P and Moody's at least equivalent to A-1 and P-1, respectively; -8- 17 (e) deposits (including Eurodollar time deposits), federal funds or bankers acceptances (maturing in not more than 365 days) of any domestic bank (including a branch office of a foreign bank which branch office is located in the United States), which: (i) has an unsecured, uninsured and unguaranteed obligation which has ratings from S&P and Moody's at least equivalent to A-1 and P-1, respectively, or (ii) is the lead bank of a parent bank holding company with an uninsured, unsecured and unguaranteed obligation meeting the rating requirements in the preceding clause (i); (f) deposits of any bank or savings and loan association which has combined capital, surplus and undivided profits of not less than $100 million and deposits, not to exceed $100,000, at any bank or savings and loan association that serves the local and non-centralized corporate operations of a Subsidiary Borrower, provided such deposits are in each case fully insured by the Federal Deposit Insurance Corporation, the Banking Insurance Fund or the Savings Association Insurance Fund; (g) investments in a money-market fund which may be a 12b-1 fund as registered under the Investment Company Act of 1940 and is rated at least the equivalent of AAm or AAm-G by S&P and P-1 by Moody's; (h) repurchase agreements with a term of six months or less with any institution having short-term, unsecured debt rated at least the equivalent of A-1 by S&P and P-1 by Moody's; and (i) repurchase agreements collateralized by U.S. Government Obligations or Agency Obligations (the "Collateral Securities") with any registered broker-dealer which is under the jurisdiction of the Securities Investors Protection Corp. or any commercial bank, if such broker-dealer or bank has uninsured, unsecured and unguaranteed debt rated at least the equivalent of A-1 by S&P and P-1 by Moody's, provided that: (A) a master repurchase agreement or other specific written repurchase agreement governs the transaction; (B) the Collateral Securities are held free and clear of any other Lien by the Administrative Agent or an independent third party acting solely as agent for the Administrative Agent, provided that any such third party (1) is (x) a Federal Reserve bank, (y) a bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less that $250 million, or (z) a bank approved in writing for such purpose by the Required Lenders, and (2) certifies in writing to the Administrative Agent (or delivers to the Administrative Agent a written opinion of counsel to such third -9- 18 party) that such third party holds the Collateral Securities free and clear of any Lien, as agent for the Administrative Agent; (C) a perfected first security interest under the Uniform Commercial Code is created in, or book entry procedures prescribed at 31 C.F.R. 306.1 et seq. or 31 C.F.R. 350.0 et seq. are followed with respect to, the Collateral Securities for the benefit of the Administrative Agent; (D) such repurchase agreement has a term of 30 days or less; (E) such repurchase agreement matures (or permits the Administrative Agent to withdraw all or any portion of the invested funds) at least ten (10) days (or other appropriate liquidation period) prior to each Quarterly Payment Date; (F) the fair market value of the Collateral Securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least one hundred and three percent (103%) (as determined by the Parent and certified by the chief financial Authorized Officer of the Parent to the Administrative Agent in a certificate in form and substance satisfactory to the Administrative Agent); and (G) the Administrative Agent obtains an opinion of counsel to such broker-dealer or bank to the effect that such repurchase agreement is a legal, valid, binding and enforceable agreement of such broker-dealer or bank (and, in the case of a bank which is a branch of a foreign bank, of such foreign bank) in accordance with its terms. "Cash Rental Expense" is defined in the definition of "Fixed Charge Coverage Ratio". "Casualty Event" means the damage, destruction or condemnation, as the case may be, of property of the Parent or any of its Subsidiaries. "Casualty Proceeds" means, with respect to any Casualty Event, the amount of any insurance proceeds or condemnation awards received by or on behalf of the Parent or any of its Subsidiaries in connection with such Casualty Event (provided that, in the event the aggregate amount of such proceeds or awards resulting from such Casualty Event do not exceed $100,000, such proceeds or awards shall not constitute Casualty Proceeds), but excluding (i) any proceeds or awards required to be paid to a creditor (other than the Lenders) which holds a first-priority Lien permitted by Section 8.2.3 on the property which is the subject of such Casualty Event (including Vehicles securing Vehicle Debt) and (ii) reasonable and customary expenses incurred in obtaining such proceeds or awards. "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. -10- 19 "CERCLIS" means the Comprehensive Environmental Response Compensation Liability Information System List. "Change in Control" means (a) any Person other than the Parent shall own any Capital Stock of either of Dollar or Thrifty or otherwise have the ability to elect any members of the board of directors of Dollar or Thrifty; (b) a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) (i) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more than 30% of the total then outstanding voting power of the Voting Stock of the Parent or (ii) has the right or the ability by voting right, contract or otherwise to elect or designate for election a majority of the board of directors of the Parent; (c) during any period of twenty-four months, individuals who at the beginning of such period constituted the board of directors of the Parent (together with any new directors whose election by such board of directors, or whose nomination for election by the shareholders of the Parent, as the case may be, was approved by a vote of 66 2/3% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute 50% or more of the board of directors then in office; or (d) any Person or two or more Persons acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to direct or control, directly or indirectly, the management or policies of any Borrower. "Chase" is defined in the preamble. "Chrysler" is defined in the second recital. "Chrysler Credit Support Agreement" means the Agreement, dated as of December , 1997, among Chrysler and the Borrowers, as amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms hereof and thereof. "Chrysler Credit Support Documents" means the Chrysler Credit Support Agreement and each agreement, instrument or document delivered in connection therewith. "Chrysler-Dollar Supply Agreement" means the Vehicle Supply Agreement, dated as of July, 1, 1996, between Chrysler and Dollar, as amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms hereof and thereof. -11- 20 "Chrysler Letter of Credit" means a letter of credit issued pursuant to the Chrysler Credit Support Agreement. "Chrysler-Thrifty Supply Agreement" means the Amended and Restated Vehicle Supply Agreement dated as of July 1, 1997, between Chrysler and Thrifty, as amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms hereof and thereof. "Closing Date" means the date on which Credit Extensions are first made hereunder. "Closing Date Certificate" means the closing date certificate executed and delivered by the Borrowers pursuant to Section 6.1.10, substantially in the form of Exhibit K hereto. "Code" means the Internal Revenue Code of 1986, and the regulations thereunder, in each case as amended, reformed or otherwise modified from time to time. "Commitment" means, as the context may require, a Lender's Loan Commitment and/or Letter of Credit Commitment. "Commitment Amount" means, on any date, $215,000,000, as such amount may be reduced from time to time pursuant to Section 2.2. "Commitment Termination Date" means the earliest of (a) January 30, 1998 (if the initial Credit Extension has not occurred on or prior to such date); (b) the Business Day immediately preceding the Stated Maturity Date; (c) the date on which the Loan Commitment Amount is terminated in full or reduced to zero pursuant to Section 2.2; and (d) the date on which any Commitment Termination Event occurs. Upon the occurrence of any event described in clause (c) or (d) above, the Commitments shall terminate automatically and without any further action. "Commitment Termination Event" means (a) the occurrence of any Event of Default described in clauses (a) through (d) of Section 9.1.9; or -12- 21 (b) the occurrence and continuance of any other Event of Default and either (i) the declaration of all or any portion of the Loans to be due and payable pursuant to Section 9.3, or (ii) the giving of notice by the Administrative Agent, acting at the direction of the Required Lenders, to the Borrowers that the Commitments have been terminated. "Common Stock" is defined in the second recital. "Compliance Certificate" means a certificate duly completed and executed by the chief financial Authorized Officer of the Parent, substantially in the form of Exhibit D hereto, together with such changes thereto as the Administrative Agent may from time to time reasonably request in writing for the purpose of monitoring the Parent's compliance with the financial covenants contained herein. "Consolidated Working Capital" means, with respect to the Parent, at any date, the excess (or the deficit) of (a) the sum of the amounts that, in accordance with GAAP, are set forth opposite the captions "accounts and notes receivable, net", "prepaid expenses and other assets" and "income taxes receivable", or any like captions, at such date over (b) the sum of the amounts that, in accordance with GAAP, are set forth opposite the captions "accounts payable", "accrued liabilities" and "income taxes payable", or any like captions, at such date. "Contingent Liability" means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, obligation or any other liability of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any other Person. The amount of any Person's obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount (or maximum principal amount, if larger) of the debt, obligation or other liability guaranteed thereby. "Continuation/Conversion Notice" means a notice of continuation or conversion and certificate duly executed by an Authorized Officer of the applicable Borrower, substantially in the form of Exhibit C hereto. "Continuing Chrysler Arrangements" is defined in the fifth recital. "Controlled Group" means all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under common control which, together with any Borrower, are treated as a single employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA. -13- 22 "CP Enhancement Letter of Credit" means a Letter of Credit issued pursuant to the terms hereof and of a CP Enhancement Letter of Credit Application and Agreement. "CP Enhancement Letter of Credit Application and Agreement" is defined in Section 4.1. "CP Program" is defined in the fourth recital. "CP Program Documents" means the Base Indenture, the supplement thereto relating to the CP Program, the Master Collateral Agency Agreement, the master lease and servicing agreement relating to the CP Program, any note purchase agreement between RCFC and Dollar Thrifty Funding, the Liquidity Facility and any collateral agency agreement pursuant to which Dollar Thrifty Funding grants a security interest in its assets to, among others, the lenders under the Liquidity Facility and each other material agreement, instrument and document delivered in connection with the CP Program, in each case as amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms hereof and thereof. "Credit Extension" means and includes (a) the advancing of any Loans by the Lenders in connection with a Borrowing, and (b) any issuance or extension by the Issuer of a Letter of Credit. "Credit Extension Request" means, as the context may require, any Borrowing Request or Issuance Request. "Credit Suisse First Boston" is defined in the preamble. "Default" means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default. "Demand Capitalization Notes" means promissory notes, issued by the Parent to RCFC for the purpose of capitalizing RCFC in connection with the MTN Program and the CP Program. "Disbursement Date" is defined in Section 4.5. "Disclosure Schedule" means the Disclosure Schedule dated the date hereof and delivered by the Borrowers to the Agents and the Lenders on or prior to the date hereof in form and substance satisfactory to the Agents and the Lenders, as amended, supplemented or otherwise modified from time to time by the Borrowers with the written consent of the Administrative Agent and the Required Lenders. "Distribution" means, with respect to any Person, any dividend or distribution (in cash, property or obligations) on any shares of any class of Capital Stock (now or hereafter outstanding) of such Person or on any warrants, options or other rights with respect to any shares -14- 23 of any class of Capital Stock (now or hereafter outstanding) of such Person, other than dividends or distributions payable in the common stock (other than Redeemable Capital Stock) of such Person or warrants or options to purchase such common stock or split-ups or reclassifications of its Capital Stock into additional or other shares of such common stock. "Dollar" is defined in the preamble. "Dollar Thrifty Funding" is defined in the fourth recital. "Domestic Office" means, relative to any Lender, the office of such Lender designated as such opposite its name in Schedule II hereto or designated in the Lender Assignment Agreement or such other office of a Lender (or any successor or assign of such Lender) within the United States as may be designated from time to time by written notice from such Lender, as the case may be, to each other Person party hereto. A Lender may have separate Domestic Offices for purposes of making, maintaining or continuing ABR Loans. "Domestic Subsidiary" means any Subsidiary of the Parent which is not a Foreign Subsidiary. "EBITDA" means, for any applicable period, the sum for such period of (a) Net Income (excluding therefrom (i) the effect of any extraordinary or other non-recurring gain outside the ordinary course of business, (ii) any write-up (or write-down) in the value of any asset, (iii) the earnings (or loss) of any Person (other than the Parent or any other Subsidiary of the Parent) in which the Parent or any of its Subsidiaries has an ownership interest, except to the extent of the amount of dividends or other distributions actually paid in cash to the Parent or any of its Subsidiaries by such Person during such period, (iv) except where the provisions hereof expressly require a pro forma determination, the earnings (or loss) of any Person accrued prior to the date it becomes a Subsidiary of the Parent or is merged into or consolidated with any of its Subsidiaries or the date that such other Person's assets are acquired by any Subsidiary of the Parent and (v) the earnings of any Subsidiary of the Parent that is neither a Subsidiary Borrower nor a Subsidiary Guarantor to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of such earnings is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary) plus (b) to the extent deducted in arriving at such Net Income, the sum, without duplication, of (i) Aggregate Interest Expense, plus (ii) taxes computed on the basis of income plus (iii) the aggregate amount of depreciation and amortization of tangible and intangible assets, plus (iv) non-cash charges in respect of non-cash awards under the Parent's incentive compensation programs. -15- 24 "Effective Date" means the date this Agreement becomes effective pursuant to Section 12.8. "Eligible Assignee" means a lending institution at the time of any proposed assignment having total assets in excess of $1,000,000,000 which is organized under the laws of the United States, or any state thereof or any other country which is a member of the OECD, or a political subdivision of any such country (provided that such bank is acting through a branch or agency located in the country in which it is organized, another country which is also a member of the OECD or in the Cayman Islands) and has long-term unsecured debt ratings of BBB- (or better) from S&P and Baa3 (or better) from Moody's; provided, however, that neither the Parent nor any of its Affiliates shall qualify as an Eligible Assignee. "Enhancement Letter of Credit Application and Agreement" means, with respect to each Enhancement Letter of Credit, the application and agreement therefor completed by the account party or parties in respect of such Enhancement Letter of Credit and accepted by the Issuer. "Enhancement Letters of Credit" is defined in clause (b)(i) of the eighth recital. "Environmental Laws" means all applicable federal, foreign, state or local statutes, laws, ordinances, codes, rules, regulations and guidelines (including consent decrees and administrative orders) relating to public health and safety and protection of the environment. "Equity Offerings" is defined in the second recital. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto of similar import, together with the regulations thereunder, in each case as in effect from time to time. References to sections of ERISA also refer to any successor sections thereto. "Eurodollar Loan" means a Loan bearing interest, at all times during an Interest Period applicable to such Loan, at a fixed rate of interest determined by reference to the Eurodollar Rate (Reserve Adjusted). "Eurodollar Office" means, relative to any Lender, the office of such Lender designated as such opposite its name in Schedule II hereto or designated in the Lender Assignment Agreement or such other office of a Lender (or any successor or assign of such Lender) as designated from time to time by written notice from such Lender to the Borrowers and the Administrative Agent, whether or not outside the United States, which shall be making or maintaining Eurodollar Loans of such Lender hereunder. "Eurodollar Rate" means, relative to any Interest Period, with respect to Eurodollar Loans, an interest rate per annum equal to the average (rounded upward to the nearest whole multiple of 1/100 of 1% per annum, if such average is not such a multiple) of the rates per annum at which deposits in U.S. Dollars in immediately available funds are offered by the Eurodollar Office of Credit Suisse First Boston in London, England to prime banks in the -16- 25 London interbank market at or about 11:00 a.m. (London, England time) two Business Days before the first day of such Interest Period in an amount substantially equal to Credit Suisse First Boston's Eurodollar Loan comprising part of such Borrowing to be outstanding during such Interest Period and for a period equal to such Interest Period. "Eurodollar Rate (Reserve Adjusted)" means, relative to any Loan to be made, continued or maintained as, or converted into, a Eurodollar Loan for any Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined pursuant to the following formula: Eurodollar Rate = Eurodollar Rate (Reserve Adjusted) ------------------------------------ 1.00 - Eurodollar Reserve Percentage The Eurodollar Rate (Reserve Adjusted) for any Interest Period for Eurodollar Loans will be determined by the Administrative Agent on the basis of the Eurodollar Reserve Percentage in effect two Business Days before the first day of such Interest Period. "Eurodollar Reserve Percentage" means, relative to any Interest Period for Eurodollar Loans, the reserve percentage (expressed as a decimal) equal to the maximum aggregate reserve requirements (including all basic, emergency, supplemental, marginal and other reserves and taking into account any transitional adjustments or other scheduled changes in reserve requirements) specified under regulations issued from time to time by the F.R.S. Board and then applicable to assets or liabilities consisting of and including "Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S. Board, having a term approximately equal or comparable to such Interest Period. "Event of Default" is defined in Section 9.1. "Excess Cash Flow" means, for any Fiscal Year of the Parent, an amount equal to the excess of (a) the sum, without duplication, of (i) EBITDA for such Fiscal Year and (ii) decreases in Consolidated Working Capital for such Fiscal Year over (b) the sum, without duplication, of (i) the aggregate amount paid by the Parent and its Subsidiaries in cash during such Fiscal Year on account of taxes computed on the basis of income, (ii) the portion of Aggregate Interest Expense for such Fiscal Year paid by the Parent and its Subsidiaries in cash during such Fiscal Year, (iii) the aggregate amount paid by the Parent and its Subsidiaries in cash during such Fiscal Year on account of Capital Expenditures (excluding the principal amount of Indebtedness incurred in connection with such Capital Expenditures, whether incurred in such Fiscal Year or in a subsequent Fiscal Year), (iv) the aggregate amount of all prepayments of any amounts outstanding under any revolving credit facility or agreement (including this Agreement) to which the Parent or any of its Subsidiaries is a borrower to the extent accompanied by permanent reductions of the commitments to extend credit thereunder, (v) the aggregate amount of all principal payments of Indebtedness of the Parent or its Subsidiaries (including any term loans and the principal component of payments in respect of capitalized lease liabilities) made during such Fiscal Year (other than in respect of any revolving credit facility or agreement (including this Agreement) to the extent there is not an equivalent permanent reduction in commitments to -17- 26 extend credit thereunder), (vi) increases in Consolidated Working Capital for such Fiscal Year, (vii) the amount of cash payments by the Parent and its Subsidiaries during such Fiscal Year in respect of long-term liabilities of the Parent and its Subsidiaries other than Indebtedness, (viii) the amount of Investments made during such Fiscal Year in cash to the extent that such Investments were financed with internally generated cash flow of the Parent and its Subsidiaries, (ix) the amount of Distributions made during such Fiscal Year by the Parent in cash and (x) the aggregate amount of expenditures made by the Parent and its Subsidiaries in cash during such Fiscal Year (including expenditures for the payment of financing fees) to the extent that such expenditures are not expensed during such Fiscal Year. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Excluded Property" means the real property described in Schedule IV, except to the extent such real property is owned by a Borrower or any of its Subsidiaries after June 30, 1998. "Excluded Receivable" means any receivable or other right of the Parent, a Subsidiary Borrower or any Subsidiary of a Subsidiary Borrower that is (a) subject to a Lien which is not a Lien in favor of the Administrative Agent for the benefit of the Lenders and (b) (i) an obligation payable to RCFC in respect of Vehicles leased or financed pursuant to the Lease or the Master Lease (as defined in the Base Indenture), (ii) an obligation of a manufacturer of a Vehicle securing Vehicle Debt pursuant to a Vehicle Disposition Program (as defined in the Base Indenture) including any right to receive incentive payments in respect of any transportation allowance, return allowance, retention bonus or otherwise, (iii) an obligation of an insurer or governmental entity with respect to a Casualty Event in respect of a Vehicle securing Vehicle Debt, (iv) an obligation of a Person in respect of the purchase price of a Vehicle securing Vehicle Debt, (v) an obligation of a Person, as sublessee, to a Subsidiary Borrower, as sublessor, in respect of any sublease of a Vehicle securing Vehicle Debt or (vi) an obligation of any Person under an insurance contract in respect of any Vehicle securing Vehicle Debt. "Existing Material Property" means each property listed on Schedule III attached hereto. "Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to (a) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York; or (b) if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Credit Suisse First Boston from three federal funds brokers of recognized standing selected by it. "Fee Letter" is defined in Section 3.3.2. -18- 27 "Fiscal Quarter" means any quarter of a Fiscal Year. "Fiscal Year" means any period of twelve consecutive calendar months ending on December 31 or such other date permitted pursuant to Section 8.2.15; references to a Fiscal Year with a number corresponding to any calendar year (e.g., the "1997 Fiscal Year") refer to the Fiscal Year ending on the December 31 (or such other date permitted pursuant to Section 8.2.15) occurring during such calendar year. "Fixed Charge Coverage Ratio" means, at the end of any Fiscal Quarter, the ratio of (a) the sum of (i) Adjusted EBITDA for the four consecutive Fiscal Quarters ending on the last day of such Fiscal Quarter plus (ii) rental expense of the Parent and its Subsidiaries during such period under all leases of real property exclusive of any portion of such expense determined on the basis of the revenues generated by the operations conducted on the real property subject to such leases ("Rental Expense") to (b) the sum of (i) Non-Vehicle Interest Expense for the four consecutive Fiscal Quarters ending on the last day of such Fiscal Quarter (subject to the proviso set forth in clause (a) of the definition of "Non-Vehicle Interest Expense"), plus (ii) taxes computed on the basis of income and paid in cash during such period (net of cash received during such period in respect of such taxes), plus (iii) scheduled repayments of principal made by the Parent and its Subsidiaries during such period of Indebtedness (other than Vehicle Debt) of the type described in clause (a), (c), (f) or (g) of the definition of "Indebtedness" or, to the extent in respect of such type of Indebtedness, clause (h) of the definition of "Indebtedness," plus (iv) Capital Expenditures made by the Parent and its Subsidiaries during such period in cash (excluding Capital Expenditures for the acquisition of Vehicles), plus (v) Rental Expense during such period, plus (vi) Distributions made by the Parent during such period. "Foreign Pledge Agreement" means any supplemental pledge agreement governed by the laws of a jurisdiction other than the United States or a state thereof executed and delivered by the Parent or any of its Subsidiaries pursuant to the terms of this Agreement, in form and substance reasonably satisfactory to the Administrative Agent, as may be necessary or desirable under the laws of organization or incorporation of a Subsidiary to further protect or perfect the Lien on and security interest in any Pledged Shares and/or Pledged Notes (as such terms are defined in the Pledge Agreement). "Foreign Subsidiary" means any Subsidiary of the Parent (a) which is organized under the laws of any jurisdiction outside of the United States of America, (b) which conducts the major portion of its business outside of the United States of America and (c) all or substantially all of the property and assets of which are located outside of the United States of America. -19- 28 "F.R.S. Board" means the Board of Governors of the Federal Reserve System or any successor thereto. "GAAP" is defined in Section 1.4. "General Letters of Credit" is defined in clause (b)(ii) of the eighth recital. "Guarantor" means, collectively, each Borrower and each Subsidiary Guarantor. "Guaranty" means, as the context may require, the Borrower Guaranty or the Subsidiary Guaranty. "Guaranteed Obligations" is defined in Section 4.10.1. "Hazardous Material" means (a) any "hazardous substance", as defined by CERCLA; (b) any "hazardous waste", as defined by the Resource Conservation and Recovery Act, as amended; or (c) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material or substance (including any petroleum product) within the meaning of any other applicable federal, foreign, state or local law, regulation, ordinance or requirement (including consent decrees and administrative orders) relating to or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material, all as amended. "Hedging Agreements" means, collectively, currency exchange agreements, interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, and all other agreements or arrangements designed to protect a Person against fluctuations in interest rates or currency exchange rates. "Hedging Obligations" means, with respect to any Person, all liabilities of such Person under Hedging Agreements. "herein," "hereof," "hereto," "hereunder" and similar terms contained in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular Section, paragraph or provision of this Agreement or such other Loan Document. "Impermissible Qualification" means, relative to the opinion or certification of any independent public accountant as to any financial statement of the Parent or any other Obligor, any qualification or exception to such opinion or certification -20- 29 (a) which is of a "going concern" or similar nature; (b) which relates to the limited scope of examination of matters relevant to such financial statement; or (c) which relates to the treatment or classification of any item in such financial statement and which, as a condition to its removal, would require an adjustment to such item the effect of which would be to cause the Parent or such other Obligor to be in default of any of its obligations under Section 8.2.4. "including" and "include" means including without limiting the generality of any description preceding such term, and, for purposes of this Agreement and each other Loan Document, the parties hereto agree that the rule of ejusdem generis shall not be applicable to limit a general statement, which is followed by or referable to an enumeration of specific matters, to matters similar to the matters specifically mentioned. "Indebtedness" of any Person means, without duplication: (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (b) all obligations, contingent or otherwise, relative to the face amount of all letters of credit, bonds (including Surety Bonds) and similar obligations, whether or not drawn, and banker's acceptances issued for the account of such Person; (c) all obligations of such Person as lessee under leases which have been or should be, in accordance with GAAP, recorded as Capitalized Lease Liabilities; (d) all obligations of such Person in the nature of overdrafts; (e) net liabilities of such Person under all Hedging Obligations; (f) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services (excluding open accounts extended by suppliers on normal trade terms in connection with purchases of goods and services), and indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; (g) Redeemable Capital Stock; and (h) all Contingent Liabilities of such Person in respect of any of the foregoing. -21- 30 For all purposes of this Agreement, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. "Indemnified Liabilities" is defined in Section 12.4. "Indemnified Parties" is defined in Section 12.4. "Intercompany Note" means, with respect to the Parent or any of its Subsidiaries, as the maker thereof, a promissory note substantially in the form of Exhibit A to the Pledge Agreement (with such modifications as the Administrative Agent may consent to, such consent not to be unreasonably withheld), which promissory note shall evidence all intercompany loans which may be made from time to time by the payee thereunder to such maker and shall be duly endorsed and pledged by the payee in favor of the Administrative Agent. "Intercreditor Agreement" means the Intercreditor Agreement executed and delivered by the Borrowers, Chrysler and the Administrative Agent pursuant to Section 6.1.15, substantially in the form of Exhibit I, as amended, supplemented, amended and restated or otherwise modified from time to time. "Interest Coverage Ratio" means, at the end of any Fiscal Quarter, the ratio of (a) EBITDA for the four consecutive Fiscal Quarters ending on the last day of such Fiscal Quarter to (b) Aggregate Interest Expense for the four consecutive Fiscal Quarters ending on the last day of such Fiscal Quarter (subject to the proviso set forth in clause (a) of the definition of "Non-Vehicle Interest Expense"), net of interest income for such four-Fiscal-Quarter period. "Interest Period" means, relative to any Eurodollar Loan, the period beginning on (and including) the date on which such Eurodollar Loan is made or continued as, or converted into, a Eurodollar Loan pursuant to Section 2.3 or 2.4 and ending on (but excluding) the day which numerically corresponds to such date one, two, three or six months thereafter (or, if such month has no numerically corresponding day, on the last Business Day of such month) as any Borrower may select in its relevant written notice pursuant to Section 2.3 or 2.4; provided, however, that (a) such Borrower shall not be permitted to select Interest Periods to be in effect at any one time which have expiration dates occurring on more than five different dates; (b) Interest Periods commencing on the same date for Loans comprising part of the same Borrowing shall be of the same duration; -22- 31 (c) if such Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next following Business Day (unless such next following Business Day is the first Business Day of a calendar month, in which case such Interest Period shall end on the Business Day next preceding such numerically corresponding day); and (d) no Interest Period may end later than the Stated Maturity Date. "Investment" means, relative to any Person, (a) any loan or advance made by such Person to any other Person (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business); (b) any Contingent Liability of such Person; and (c) any ownership or similar interest held by such Person in any other Person. The amount of any Investment shall be the original principal or capital amount thereof less all returns of principal or equity thereon (and without adjustment by reason of the financial condition of such other Person) and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property. "Issuance Request" means a request and certificate duly executed by the chief executive, accounting or financial Authorized Officer of any Borrower, in substantially the form of Exhibit B-2 attached hereto (with such changes thereto as may be agreed upon from time to time by the Administrative Agent and such Borrower). "Issuer" means Credit Suisse First Boston or any of its affiliates, and/or any other Lender having short-term credit ratings of A-1 (or better) from S&P and P-1 from Moody's which has agreed to issue one or more Letters of Credit at the request of the Administrative Agent with the consent of each Borrower (which consents shall not be unreasonably withheld or delayed). "Lender Assignment Agreement" means a Lender Assignment Agreement substantially in the form of Exhibit L hereto. "Lenders" is defined in the preamble and, in addition, shall include any commercial bank or other financial institution that becomes a Lender pursuant to Section 12.11.1. "Letter of Credit" means, collectively, Enhancement Letters of Credit and General Letters of Credit, which letters of credit, in each case, shall be irrevocable standby letters of credit in such form as may be requested by any Borrower and approved by the Issuer. -23- 32 "Letter of Credit Commitment" means, relative to any Lender, such Lender's obligation to issue (in the case of the Issuer) or participate in (in the case of all Lenders) Letters of Credit pursuant to Section 2.1.2. "Letter of Credit Commitment Amount" means, on any date, $190,000,000, as such amount may be reduced from time to time pursuant to Section 2.2.3. "Letter of Credit Outstandings" means, at any time, an amount equal to the sum of (a) the aggregate Stated Amount at such time of all Letters of Credit then outstanding and undrawn (as such aggregate Stated Amount shall be adjusted, from time to time, as a result of drawings, the issuance of Letters of Credit, or otherwise); plus (b) the then aggregate amount of all unpaid and outstanding Reimbursement Obligations. "Leverage Ratio" means, at any time, the ratio of (a) Adjusted Debt at such time; to (b) Adjusted EBITDA for the four consecutive Fiscal Quarters ending on the last day of the Fiscal Quarter most recently completed prior to or at such time. "Lien" means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property, or other priority or preferential arrangement of any kind or nature whatsoever, to secure payment of a debt or performance of an obligation. "Liquidity Facility" is defined in the fourth recital. "Liquidity Obligation" is defined in Section 4.5. "Loans" is defined in Section 2.1.1. "Loan Commitment" means, relative to any Lender, such Lender's obligation to make Loans pursuant to Section 2.1.1. "Loan Commitment Amount" means, on any date, $70,000,000, as such amount may be reduced from time to time pursuant to Section 2.2.3. -24- 33 "Loan Document" means this Agreement, the Notes, the Security Documents, the Subsidiary Guaranty, the Letters of Credit, the Enhancement Letter of Credit Application and Agreements, and each other agreement, certificate, document or instrument delivered in connection with this Agreement and such other agreements, whether or not specifically mentioned herein or therein. "LOC Liquidity Disbursement" means, with respect to any Enhancement Letter of Credit, (i) any drawing thereunder to the extent such drawing is for the purpose of providing liquidity support to Dollar Thrifty Funding or another SPC which has issued highly rated commercial paper in connection with the financing of Vehicles, including any LOC Liquidity Disbursement (as defined in a CP Enhancement Letter of Credit Application and Agreement) under a CP Enhancement Letter of Credit and (ii) the portion of any LOC Termination Disbursement (as defined in a CP Enhancement Letter of Credit Application and Agreement) allocable to Dollar Thrifty Funding as a result of a ratings downgrade of the Issuer of such CP Enhancement Letter of Credit, the failure to extend such CP Enhancement Letter of Credit or otherwise. "Master Collateral Agency Agreement" means the Amended and Restated Master Collateral Agency Agreement dated as of _________ __, ____, among RCFC, Dollar and Thrifty, as grantors, the various financing sources and beneficiaries parties thereto, and Bankers Trust Company, as master collateral agent, as amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms hereof and thereof. "Moody's" means Moody's Investors Service Inc. "Mortgage" means each mortgage or deed of trust, as the case may be, executed and delivered pursuant to Section 6.1.14 and Section 8.1.8, substantially in the form of Exhibits H-1 and H-2 respectively, attached hereto, as amended, supplemented, restated or otherwise modified from time to time. "MTN Program" is defined in the third recital. "MTN Program Documents" means the Base Indenture, the Series 1997-1 Supplement thereto, the Master Collateral Agency Agreement, the master lease and servicing agreement relating to the MTN Program, and each other material agreement, instrument and document delivered in connection with the MTN Program, in each case as amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms hereof and thereof. "Net Disposition Proceeds" means the excess of (a) the gross cash proceeds received by the Parent or any of its Subsidiaries from any sale, transfer or conveyance of assets permitted pursuant to clause (c) of Section 8.2.10 (collectively referred to herein for purposes of this definition as a "permitted disposition"), including and together with any amounts collected by the vendor of such assets in respect of the taxes described in clause (b)(ii) below, and any cash payments -25- 34 received in respect of promissory notes or other non-cash consideration delivered to the Parent or such Subsidiary in respect of any permitted disposition (provided that, in the event the aggregate amount of such proceeds resulting from such permitted disposition do not exceed $100,000, such proceeds shall not constitute Net Disposition Proceeds),. over (b) the sum of (i) all fees and expenses with respect to legal, investment banking, brokerage and accounting and other professional fees, sales commissions and disbursements actually incurred in connection with such permitted disposition which have not been paid (other than in the case of reasonable out-of-pocket expenses) to Affiliates of the Parent; plus (ii) all taxes and other governmental costs and expenses actually paid or estimated by the Parent or such Subsidiary (in good faith) to be payable in cash in connection with such permitted disposition; plus (iii) payments made by the Parent or such Subsidiary to retire Indebtedness (other than the Loans) of the Parent or such Subsidiary where payment of such Indebtedness is required in connection with such permitted disposition; provided, however, that if, after the payment of all taxes with respect to such permitted disposition, the amount of estimated taxes, if any, pursuant to clause (b)(ii) above exceeded the tax amount actually paid in respect of such permitted disposition, the aggregate amount of such excess shall, at such time, constitute Net Disposition Proceeds. "Net Equity Proceeds" means, with respect to the sale or issuance by the Parent or any of its Subsidiaries to any Person (other than the Parent, any Subsidiary Borrower or any of its Subsidiaries) of any Capital Stock, other than pursuant to the Equity Offerings, or any warrants or options with respect to such Capital Stock or the exercise of any such warrants or options, the excess of: (a) the gross cash proceeds received by the Parent or such Subsidiary from such sale, exercise or issuance (other than proceeds received with respect to (i) employee incentive compensation plans (including incentive stock options), (ii) employee stock purchase plans (including deferred stock purchase plans) and (iii) direct purchase plans (other than the plans described in the preceding clauses (i) and (ii)) to the extent such proceeds do not exceed $1,000,000 in any Fiscal Year), -26- 35 over (b) all fees and expenses with respect to underwriting commissions and legal, investment banking, brokerage and accounting and other professional fees, sales commissions and disbursements actually incurred in connection with such sale or issuance or exercise which have not (other than in the case of reasonable out-of-pocket expenses) been paid to Affiliates of the Parent in connection therewith. "Net Income" means, for any applicable period, the aggregate of all amounts which, in accordance with GAAP, would be included as net earnings (or net loss) on a consolidated statement of operations of the Parent and its Subsidiaries for such period. "Net Issuance Proceeds" means, as to any issuance of indebtedness for borrowed money by the Parent or any of its Subsidiaries (other than Indebtedness permitted by Section 8.2.2 (except clause (u) thereof)), the excess of: (a) the gross cash proceeds received by the Parent or such Subsidiary from such issuance, over (b) all fees and expenses with respect to underwriting commissions and legal, investment banking, brokerage and accounting and other professional fees, sales commissions and disbursements actually incurred in connection with such issuance and any prepayment premiums or penalties paid in respect of any indebtedness refinanced with such proceeds in accordance with the terms of this Agreement, which in each case have not (other than in the case of reasonable out-of-pocket expenses) been paid to Affiliates of the Parent in connection therewith. "Net Worth" means, with respect to any Person at any date, on a consolidated basis for such Person and its Subsidiaries, the excess of: (a) the sum of capital stock (other than Redeemable Capital Stock) taken at par value, capital surplus (other than in respect of Redeemable Capital Stock) and retained earnings (or accumulated deficit) of such Person at such date; over (b) treasury stock of such Person and, to the extent included in the preceding clause (a), minority interests in Subsidiaries of such Person at such date. -27- 36 "Non-Material Subsidiary" means any Subsidiary of the Parent that (a) accounted for no more than 1 1/2% of consolidated revenues of the Parent and its Subsidiaries or 1 1/2% of consolidated net earnings of the Parent and its Subsidiaries, in each case for the four consecutive Fiscal Quarters of the Parent ending on September 30, 1997, or if later, the last day of the most recently completed Fiscal Quarter with respect to which, pursuant to Section 8.1.1, financial statements have been, or are required to have been, delivered by the Parent to the Administrative Agent, and (b) has assets which represent no more than 1 1/2% of the consolidated assets of the Parent and its Subsidiaries as of September 30, 1997, or if later, the last day of the last Fiscal Quarter of the most recently completed Fiscal Quarter with respect to which, pursuant to Section 8.1.1, financial statements have been, or are required to have been, delivered by the Parent to the Administrative Agent, to the extent that Non-Material Subsidiaries do not (i) account in the aggregate for more than 2 1/2% of consolidated revenues of the Parent and its Subsidiaries or 2 1/2% of consolidated net earnings of the Parent and its Subsidiaries in each case for the four consecutive Fiscal Quarters of the Parent ending on September 30, 1997, or if later, the last day of the most recently completed Fiscal Quarter with respect to which, pursuant to Section 8.1.1, financial statements have been, or are required to have been, delivered by the Parent, to the Administrative Agent, or (ii) have assets which represent more than 2 1/2% of the consolidated assets of the Parent and its Subsidiaries as of September 30, 1997, or if later, the last day of the last Fiscal Quarter of the most recently completed Fiscal Quarter with respect to which, pursuant to Section 8.1.1, financial statements have been, or are required to have been, delivered by the Parent to the Administrative Agent. "Non-Vehicle Debt" means (a) Total Debt minus (b) to the extent included in such Total Debt, Vehicle Debt plus (c) any obligation of a Subsidiary Borrower or any Subsidiary of such Subsidiary Borrower (other than RCFC or another SPC) with respect to Vehicles owned by such Subsidiary Borrower or such Subsidiary (i) which exceeds the excess of (x) the aggregate Capitalized Cost (as defined in the Base Indenture) of such Vehicles over (y) the greater of the sum of the aggregate Depreciation Charges (as defined in the Base Indenture) -28- 37 accrued with respect to such Vehicles and the difference between such aggregate Capitalized Cost and the fair market value of such Vehicles and (ii) which has become due and payable and remains unpaid as of the end of any calendar month. "Non-Vehicle Interest Expense" means, for any applicable period, the excess of (a) the aggregate consolidated gross interest expense of the Parent and its Subsidiaries for such period, as determined in accordance with GAAP ("Aggregate Interest Expense"), including (i) commitment fees paid or owed with respect to the then unutilized portion of the Commitment Amount, (ii) all other fees paid or owed with respect to the issuance or maintenance of Contingent Liabilities (including letters of credit), which, in accordance with GAAP, would be included as interest expense, (iii) net costs or benefits under Hedging Arrangements and (iv) the portion of any payments made in respect of Capitalized Lease Liabilities of the Parent and its Subsidiaries allocable to interest expense, but excluding the amortization of debt issuance costs and other financing expenses incurred in connection with the Transaction (provided that in the event such gross interest expense (or any component thereof) is being determined (x) for the four consecutive Fiscal Quarters ending on the last day of the first Fiscal Quarter of the 1998 Fiscal Year, gross interest expense (or the applicable component thereof) for such period shall equal the gross interest expense (or the applicable component thereof) for the first Fiscal Quarter of the 1998 Fiscal Year multiplied by 4.0, (y) for the four consecutive Fiscal Quarters ending on the last day of the second Fiscal Quarter of the 1998 Fiscal Year, gross interest expense (or the applicable component thereof) for such period shall equal the gross interest expense (or the applicable component thereof) for the two consecutive Fiscal Quarters of the 1998 Fiscal Year ending on such last day multiplied by 2.0 and (z) for the four consecutive Fiscal Quarters ending on the last day of the third Fiscal Quarter of the 1998 Fiscal Year, gross interest expense (or the applicable component thereof) for such period shall equal the gross interest expense (or the applicable component thereof) for the three consecutive Fiscal Quarters of the 1998 Fiscal Year ending on such last day multiplied by 1.33) over (b) to the extent included in the preceding clause (a), gross interest expense in respect of Vehicle Debt ("Vehicle Interest Expense"). "Note" means a promissory note of any Borrower payable to the order of any Lender, in the form of Exhibit A hereto (as such promissory note may be amended, endorsed or otherwise modified from time to time), evidencing the aggregate Indebtedness of such Borrower to such Lender resulting from outstanding Loans, and also means all other promissory notes accepted from time to time in substitution therefor or renewal thereof. "Obligations" means all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured, direct or indirect, choate or inchoate, sole, joint, several or joint and several, due or to become due, heretofore or hereafter contracted or acquired) of each -29- 38 Borrower and each other Obligor arising under or in connection with this Agreement, the Notes, the Letters of Credit and each other Loan Document. "Obligor" means, as the context may require, any Borrower and any other Person (other than any Agent, the Issuer or any Lender) to the extent such Person is obligated under, or otherwise a party to, this Agreement or any other Loan Document. "OECD" means the Organization for Economic Cooperation and Development. "Organic Document" means, relative to any Obligor, as applicable, its certificate of incorporation, by-laws, certificate of partnership, partnership agreement, certificate of formation, limited liability agreement and all shareholder agreements, voting trusts and similar arrangements applicable to any of such Obligor's partnership interests, limited liability company interests or authorized shares of capital stock. "Outstanding Enhancement Letter of Credit" is defined in Section 4.2. "Parent" is defined in the preamble. "Participant" is defined in Section 12.11.2. "PBGC" means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA. "Pension Plan" means a "pension plan", as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which a Borrower or any corporation, trade or business that is, along with any Borrower, a member of a Controlled Group, may have liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA. "Percentage" means, relative to any Lender, the percentage set forth opposite its name in Schedule I hereto or set forth in the Lender Assignment Agreement, as such percentage may be adjusted from time to time pursuant to Lender Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered pursuant to Section 12.11.1. "Permitted Business Acquisition" means any Business Acquisition, so long as (a) (i) such Business Acquisition is a Permitted Stock Acquisition; or (ii) in the case of a Business Acquisition other than a Permitted Stock Acquisition, the aggregate amount of expenditures of the Parent and its Subsidiaries (excluding Vehicle Debt but including the aggregate amount of any and all other Indebtedness assumed in connection therewith and including the fair market value of any -30- 39 shares of Capital Stock of the Parent issued in connection therewith) in respect of such Business Acquisition (such amount, the "Subject Amount"), when added to the aggregate amount of all such expenditures of the Parent and its Subsidiaries in respect of Business Acquisitions (other than Permitted Stock Acquisitions) during the Fiscal Year in which such Subject Amount would be expended and from the Effective Date, does not exceed $15,000,000 (provided that the portion thereof payable in cash does not exceed $5,000,000) and $40,000,000, respectively, and (b) in the event the Subject Amount (which amount shall include, in the event such Business Acquisition is to be consummated in a series of related transactions, the aggregate amount of all such expenditures of the Parent and its Subsidiaries in respect of such related transactions) would exceed $5,000,000 or in the event any portion of the consideration in respect of such Business Acquisition is in Capital Stock of the Parent, the Administrative Agent shall have received a Compliance Certificate executed by the chief financial Authorized Officer of the Parent certifying and, if reasonably requested by the Administrative Agent, showing (in reasonable detail and with appropriate calculations and computations in all respects reasonably satisfactory to the Administrative Agent) that on a historical pro forma basis (after giving effect to such Business Acquisition and all transactions related thereto (including all Indebtedness that would be assumed or incurred as a result of such acquisition) and all Business Acquisitions consummated prior thereto during the applicable periods thereunder) as of the last day of the most recently completed Fiscal Quarter with respect to which, pursuant to Section 8.1.1, financial statements have been, or are required to have been, delivered by the Parent and the Parent would be in compliance with Section 8.2.4 as of the last day of such Fiscal Quarter. "Permitted Stock Acquisition" means any Business Acquisition in respect of a Person that was a franchisee of Dollar or Thrifty or any of their respective Subsidiaries or that is actively engaged in the business of renting for general use passenger automobiles, light and medium duty trucks and vans, so long as the consideration paid in connection with such Business Acquisition consists solely of Capital Stock of the Parent issued in connection therewith and the assumption of Vehicle Debt (if any). "Person" means any natural person, corporation, limited liability company, partnership, joint venture, joint stock company, firm, association, trust or unincorporated organization, government, governmental agency, court or any other legal entity, whether acting in an individual, fiduciary or other capacity. "Plan" means any Pension Plan or Welfare Plan. "Pledge Agreement" means the Pledge Agreement executed and delivered by the Borrowers pursuant to Section 6.1.13, substantially in the form of Exhibit E hereto, as amended, supplemented, amended and restated or otherwise modified from time to time. "Primary Equity Offering" is defined in the second recital. -31- 40 "Quarterly Payment Date" means the last Business Day of each March, June, September, and December. "Rating Agencies" means S&P and Moody's. "RCFC" is defined in the third recital. "Redeemable Capital Stock" means Capital Stock of the Parent or any of its Subsidiaries that, either by its terms, by the terms of any security into which it is convertible or exchangeable or otherwise, (i) is or upon the happening of an event or passage of time would be required to be redeemed (for consideration other than shares of common stock of the Parent) on or prior to December 31, 2003, (ii) is redeemable at the option of the holder thereof (for consideration other than shares of common stock of the Parent) at any time prior to such date or (iii) is convertible into or exchangeable for debt securities of the Parent or any of its Subsidiaries at any time prior to such anniversary. "Register" is defined in Section 12.11.1. "Regulation S-X" means the rules promulgated by the SEC and codified under 17 CFR ss.ss.210, et. seq. "Reimbursement Due Date" is defined in Section 4.5. "Reimbursement Obligation" is defined in Section 4.6. "Release" means a "release," as such term is defined in CERCLA. "Rental Expense" is defined in the definition of "Fixed Coverage Ratio". "Replacement Letter of Credit" is defined in Section 4.2. "Required Lenders" means, at any time, Lenders holding more than 50% of the sum of the aggregate principal amount of the Loans then outstanding plus the Letter of Credit Outstandings, or if no Loans and Letters of Credit are then outstanding, Lenders having more than 50% of the Commitment Amount. "Resource Conservation and Recovery Act" means the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended. "S&P" means Standard & Poor's Rating Services. "SEC" means the Securities and Exchange Commission. "Secondary Equity Offering" is defined in the second recital. "Secured Parties" means the Lenders, the Issuer, the Agents and each of their respective successors, transferees and assigns. -32- 41 "Securities Act" means the Securities Act of 1933, as amended. "Security Agreement" means the Security Agreement executed and delivered by the Borrowers and the Subsidiary Guarantors pursuant to Section 6.1.13, substantially in the form of Exhibit F hereto, as amended, supplemented, amended and restated or otherwise modified from time to time. "Security Documents" means (i) each Mortgage, (ii) the Security Agreement, (iii) the Pledge Agreement, (iv) the Foreign Pledge Agreements (if any), (v) the Intercreditor Agreement and (vi) all security agreements, mortgages, deeds of trust, pledges, collateral assignments or any other instrument evidencing or creating any security interest in favor of the Administrative Agent in any asset or property of the Parent or any of its Subsidiaries, in each case as amended, supplemented or otherwise modified from time to time. "SPC" means RCFC, Dollar Thrifty Funding, Thrifty Trust, a trust organized under the laws of Canada, each successor entity thereto, and any other special purpose entity formed for the sole purpose of financing the acquisition of Vehicles. "Stated Amount" of any letter of credit (including each Letter of Credit) means the maximum amount available for drawing thereunder (whether or not any conditions to drawing can then be met). "Stated Expiry Date" is defined in Section 4.1. "Stated Maturity Date" means December 23, 2002. "Subordinated Debt" means all unsecured Indebtedness of the Parent, any Subsidiary Borrower or any Subsidiary Guarantor for money borrowed which is subordinated, upon terms satisfactory to the Administrative Agent, in right of payment to the payment in full in cash of all Obligations of the Parent, such Subsidiary Borrower or such Subsidiary Guarantor, as the case may be. "Subordinated Intercompany Debt" means unsecured Indebtedness (a) subordinated to the Obligations by provisions substantially in the form set forth in Schedule III hereto and (b) the terms of which (including interest rate) are not more burdensome to the obligor or obligors thereunder than those terms generally available from independent third parties to obligors similarly situated as such obligor or obligors. "Subsidiary" means, with respect to any Person, any corporation, partnership or other business entity of which more than 50% of the outstanding capital stock (or other ownership interest) having ordinary voting power to elect a majority of the board of directors, managers or other voting members of the governing body of such entity (irrespective of whether at the time capital stock (or other ownership interest) of any other class or classes of such entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or -33- 42 indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person. "Subsidiary Borrowers" is defined in the preamble. "Subsidiary Guarantor" means any Subsidiary of the Parent that is a party to the Subsidiary Guaranty. "Subsidiary Guaranty" means the Guaranty executed and delivered by each Subsidiary of the Parent that is a party thereto pursuant to Section 6.1.11, substantially in the form of Exhibit G hereto, as amended, supplemented, restated or otherwise modified from time to time. "Surety Bond" means any instrument pursuant to which the issuer thereof agrees to pay on behalf of a Borrower or any of its Subsidiaries an amount then due and payable by such Borrower or such Subsidiary to another Person (including an insurer of such Borrower or such Subsidiary). "Syndication Agent" is defined in the preamble. "Tax Sharing Agreement" means the Tax Sharing and Disaffiliation Agreement dated as of November 24, 1997, between Chrysler and the Parent, as amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms hereof and thereof. "Taxes" is defined in Section 5.6. "Thrifty" is defined in the preamble. "Total Debt" means, without duplication, the aggregate amount of all Indebtedness of the Parent and its Subsidiaries, other than Indebtedness of the type described in clause (d) or (e) of the definition of "Indebtedness" or, to the extent in respect of such type of Indebtedness, clause (h) of the definition of "Indebtedness." "Transaction" is defined in the fifth recital. "type" means, relative to any Loan, the portion thereof, if any, being maintained as an ABR Loan or a Eurodollar Loan. "U.C.C." means the Uniform Commercial Code as from time to time in effect in the State of New York. "United States" or "U.S." means the United States of America, its fifty states and the District of Columbia. "U.S. Dollar" and the symbol "$" mean the lawful currency of the United States. -34- 43 "U.S. Government Obligations" means direct obligations of, or obligations the timely payment of principal of and interest on which is fully and unconditionally guaranteed by, the United States. "U.S. Tax Compliance Certificate" is defined in clause (b)(Y) of Section 5.6. "Vehicle Debt" means Indebtedness relating solely to the financing or leasing of any Vehicle and secured thereby (and by related collateral); provided that any obligation included as Non-Vehicle Debt pursuant to clause (c) of the definition thereof shall not be deemed to be Vehicle Debt. "Vehicle Interest Expense" is defined in clause (b) of the definition of "Non-Vehicle Interest Expense." "Vehicles" means all existing and hereafter acquired motor vehicle inventory of either Dollar or Thrifty and their respective Subsidiaries (including such inventory owned by other Subsidiaries of the Parent, including RCFC, that is leased to Dollar or Thrifty or their respective Subsidiaries), consisting of passenger automobiles, vans and light and medium duty trucks, whether owned or leased and whether held for purposes of sale, lease, rental or internal management use. "Voting Stock" means, with respect to any Person, Capital Stock in respect of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers, trustees or other similar governing body of such Person (irrespective of whether or not at the time the Capital Stock of any other class or classes shall have or might have voting power by reason of the occurrence of any contingency). "Walden Agreement" means the ______________ dated as of _____________, 1997, between Walden Fleet Services, Inc. and Dollar, with respect to approximately 3,000 1998 model year vehicles manufactured by Kia Motors Corporation. "Welfare Plan" means a "welfare plan", as such term is defined in Section 3(1) of ERISA. "Wholly Owned Subsidiary" means, with respect to any Person, a Subsidiary all the Capital Stock (other than directors' qualifying shares that are required under applicable law) of which is owned by such Person or another Wholly Owned Subsidiary of such Person. SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall have such meanings when used in the Disclosure Schedule and in each Note, Borrowing Request, Continuation/Conversion Notice, Issuance Request, Loan Document, notice and other communication delivered from time to time in connection with this Agreement or any other Loan Document. -35- 44 SECTION 1.3. Cross-References. Unless otherwise specified, references in this Agreement and in each other Loan Document to any Article or Section are references to such Article or Section of this Agreement or such other Loan 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 1.4. Accounting and Financial Determinations. Unless otherwise specified, all accounting terms used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder (including under Section 8.2.4) shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared in accordance with, those generally accepted accounting principles ("GAAP") applied in the preparation of the financial statements referred to in Section 7.5. Unless otherwise expressly provided, all financial covenants and defined financial terms shall be computed on a consolidated basis for the Parent and its Subsidiaries, in each case without duplication. ARTICLE II COMMITMENTS, BORROWING PROCEDURES AND NOTES SECTION 2.1. Commitments. On the terms and subject to the conditions of this Agreement (including Article VI), each Lender severally agrees as follows: SECTION 2.1.1. Loan Commitment. From time to time on any Business Day occurring prior to the Commitment Termination Date, each Lender will make Loans (relative to such Lender, its "Loans") to the Borrower so requesting such Loans equal to such Lender's Percentage of the aggregate amount of the Borrowing of Loans requested by such Borrower to be made on such day. On the terms and subject to the conditions hereof, each Borrower may from time to time borrow, prepay and reborrow Loans. SECTION 2.1.2. Commitment to Issue Letters of Credit. From time to time on any Business Day prior to the Stated Maturity Date, the Issuer will issue, and each Lender will participate in, the Letters of Credit, in accordance with Article IV. SECTION 2.1.3. Lenders Not Permitted or Required to Make Loans or Issue Letters of Credit Under Certain Circumstances. No Lender shall be permitted or required to (a) make any Loan if, after giving effect thereto, the aggregate outstanding principal amount of all Loans (i) of all Lenders would exceed the Loan Commitment Amount, (ii) of all Lenders, together with all Letter of Credit Outstandings, would exceed the Commitment Amount, -36- 45 (iii) of such Lender would exceed such Lender's Percentage of the Loan Commitment Amount, or (iv) of such Lender, together with its Percentage of all Letter of Credit Outstandings, would exceed such Lender's Percentage of the Commitment Amount; or (b) issue (in the case of the Issuer) any Letter of Credit if, after giving effect thereto (i) all Letter of Credit Outstandings would exceed the Letter of Credit Commitment Amount, (ii) all Letter of Credit Outstandings, together with the aggregate outstanding principal amount of all Loans of all Lenders would exceed the Commitment Amount, (iii) such Lender's Percentage of all Letter of Credit Outstandings (after giving effect to Section 4.4) would exceed such Lender's Percentage of the Letter of Credit Commitment Amount, or (iv) such Lender's Percentage of all Letter of Credit Outstandings (after giving effect to Section 4.4), together with the aggregate outstanding principal amount of all Loans of such Lender would exceed such Lender's Percentage of the Commitment Amount. SECTION 2.2. Reduction of Commitment Amounts. The Commitment Amount, the Letter of Credit Commitment Amount and the Loan Commitment Amount are subject to reduction from time to time pursuant to this Section 2.2. SECTION 2.2.1. Optional. The Borrowers may, from time to time on any Business Day occurring after the Closing Date, voluntarily reduce the unused amount of the Commitment Amount; provided, however, that all such reductions shall require at least three Business Days' prior written notice to the Administrative Agent and be permanent, and any partial reduction of the Commitment Amount shall be in a minimum amount of $5,000,000 and in an integral multiple of $1,000,000. SECTION 2.2.2. Mandatory. The Commitment Amount shall, on the second Business Day following the receipt by the Parent or any of its Subsidiaries of any Net Disposition Proceeds, Net Equity Proceeds, Net Issuance Proceeds or Casualty Proceeds, as the case may be, be reduced by an aggregate amount equal to 100% of such Net Disposition Proceeds, 50% of such Net Equity Proceeds, 100% of such Net Issuance Proceeds or 100% of such Casualty Proceeds, as the case may be; provided, however, that, so long as a Default has not occurred and is not then continuing, the Commitment Amount shall not be reduced by -37- 46 (a) the amount of Net Disposition Proceeds received by the Parent or such Subsidiary in any Fiscal Year (commencing with the 1998 Fiscal Year) that does not exceed $5,000,000 to the extent such proceeds are applied to the acquisition or construction of property or assets to be used in the business of the Borrowers and their Subsidiaries within 180 days following the receipt thereof; provided further, however, that Net Disposition Proceeds exceeding $2,500,000 from a single transaction shall not be required to be applied to the reduction of the Commitment Amount if (i) the Parent notifies the Administrative Agent in writing no later than the thirtieth day following the receipt of such Net Disposition Proceeds of the Parent's or such Subsidiary's good faith intention to apply such Net Disposition Proceeds to such replacement, acquisition or construction (and describes in reasonable written detail such proposed application no later than the sixtieth day following the receipt of such Net Disposition Proceeds) within 360 days following the receipt of such Net Disposition Proceeds and (ii) the Parent or such Subsidiary in fact uses such Net Disposition Proceeds as specified in such notice to the Administrative Agent within 360 days following the receipt of such Net Disposition Proceeds; and (b) the amount of any Casualty Proceeds received by the Parent or such Subsidiary that are applied to the rebuilding or replacement of the property or assets which were the source of such Casualty Proceeds within 180 days following the occurrence of such Casualty Event or such longer period as may otherwise be provided in any Mortgage with respect to such property or assets. Each such reduction in the Commitment Amount shall be permanent and automatic. SECTION 2.2.3. Corresponding Reductions. Any reduction of the Commitment Amount which reduces the Commitment Amount below the then current amount of the Letter of Credit Commitment Amount or the Loan Commitment Amount, as the case may be, shall result in an automatic and corresponding reduction of the Letter of Credit Commitment Amount or the Loan Commitment Amount, as the case may be, to the amount of the Commitment Amount, as so reduced, without any further action on the part of the Administrative Agent, the Lenders or otherwise. SECTION 2.3. Borrowing Procedure. By delivering a Borrowing Request to the Administrative Agent on or before 11:00 a.m. (New York City, New York time) on a Business Day, any Borrower may from time to time irrevocably request, (a) on such Business Day (but in any event not more than five Business Days' notice) in the case of ABR Loans, or (b) on not less than three (but in any event not more than five) Business Days' notice in the case of Eurodollar Loans, -38- 47 (c) that a Borrowing be made, in the case of ABR Loans, in a minimum amount of $1,000,000 and an integral multiple of $100,000, in the case of Eurodollar Loans, in a minimum amount of $5,000,000 and an integral multiple of $100,000 or, in either case, in the unused amount of the Commitment. On the terms and subject to the conditions of this Agreement, each Borrowing shall be comprised of the type of Loans, and shall be made on the Business Day specified in such Borrowing Request. On or before 1:00 p.m. (New York City, New York time) on such Business Day, each Lender shall deposit with the Administrative Agent same day funds in an amount equal to such Lender's Percentage of the requested Borrowing. Such deposit will be made to an account which the Administrative Agent shall specify from time to time by notice to the Lenders. To the extent funds are received from the Lenders, the Administrative Agent shall make such funds available to such Borrower by wire transfer to the accounts such Borrower shall have specified in its Borrowing Request. No Lender's obligation to make any Loan shall be affected by any other Lender's failure to make any Loan. SECTION 2.4. Continuation and Conversion Elections. By delivering a Continuation/Conversion Notice to the Administrative Agent on or before 11:00 a.m. (New York City, New York time) on a Business Day, any Borrower may from time to time irrevocably elect with respect to Loans borrowed by it, (a) on such Business Day in the case of ABR Loans, or (b) on not less than three (but in any event not more than five) Business Days' notice in the case of Eurodollar Loans, that all, or any portion in an aggregate minimum amount of $5,000,000 and an integral multiple of $100,000, in the case of any Eurodollar Loan, be converted into an ABR Loan, or an aggregate minimum amount of $5,000,000 and an integral multiple of $100,000, in the case of any ABR Loan or Eurodollar Loan, as the case may be, be converted into or continued as, as the case may be, a Eurodollar Loan (in the absence of delivery of a Continuation/ Conversion Notice with respect to any Eurodollar Loan at least three Business Days (but not more than five Business Days) before the last day of the then current Interest Period with respect thereto, such Eurodollar Loan shall, on such last day, automatically convert to an ABR Loan); provided, however, that (i) each such conversion or continuation shall be pro rated among the applicable outstanding Loans of all Lenders and (ii) no portion of the outstanding principal amount of any Loans may be continued as, or be converted into, Eurodollar Loans when any Default has occurred and is continuing. SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its obligation to make, continue or convert Eurodollar Loans hereunder by causing one of its foreign branches or Affiliates (or an international banking facility created by such Lender) to make or maintain such Eurodollar Loan; provided, however, that such Eurodollar Loan shall nonetheless be deemed to have been made and to be held by such Lender, and the obligation of the applicable Borrower to repay such Eurodollar Loan shall nevertheless be to such Lender for the account of such foreign branch, Affiliate or international banking facility. In addition, each Borrower hereby consents -39- 48 and agrees that, for purposes of any determination to be made for purposes of Section 5.1, 5.2, 5.3 or 5.4, it shall be conclusively assumed that each Lender elected to fund all Eurodollar Loans by purchasing deposits in U.S. Dollars in its Eurodollar Office's interbank eurodollar market. SECTION 2.6. Loan Accounts. (a) The Loans and participations in the Letter of Credit Outstandings made by each Lender and the Letters of Credit issued by the Issuer shall be evidenced by one or more loan accounts or records maintained by such Lender or the Issuer, as the case may be, in the ordinary course of business. The loan accounts or records maintained by the Administrative Agent, the Issuer and each Lender shall be conclusive absent manifest error of the amount of the Loans, the participations in Letter of Credit Outstandings and the Letters of Credit made by the Lenders and the Issuer, as the case may be, and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of any Borrower hereunder to pay any amount owing with respect to the Loans and Letters of Credit, as the case may be, or of the Lenders with respect to participations in Letter of Credit Outstandings. (b) If requested by any Lender, such Lender's Loans under the Loan Commitment shall be evidenced by a Note payable to the order of such Lender in a maximum principal amount equal to such Lender's Percentage of the original Loan Commitment Amount. Each Borrower hereby irrevocably authorizes each Lender having a Note to make (or cause to be made) appropriate notations on the grid attached to such Lender's Note (or on any continuation of such grid), which notations, if made, shall evidence, inter alia, the date of, the outstanding principal of, and the interest rate and Interest Period applicable to the Loans evidenced thereby. Such notations shall be conclusive and binding on applicable Borrower absent manifest error; provided, however, that the failure of any Lender having a Note to make any such notations shall not limit or otherwise affect any Obligations of any Borrower or any other Obligor. ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES SECTION 3.1. Repayments and Prepayments. Each Borrower shall repay in full the unpaid principal amount of each of its Loans upon the Stated Maturity Date. Prior thereto, such Borrower (a) may, from time to time on any Business Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of any Loans borrowed by it; provided, however, that (i) any such prepayment shall be made pro rata among Loans of the same type, and, if applicable, having the same Interest Period of all Lenders; -40- 49 (ii) all such voluntary prepayments shall require prior irrevocable written notice to the Administrative Agent received by the Administrative Agent no later than 11:00 a.m. (New York City, New York) (A) on such Business Day in the case of ABR Loans, or (B) on not less than three (but in any event not more than five) Business Days' notice in the case of Eurodollar Loans, and (iii) all such voluntary partial prepayments shall be, in the case of ABR Loans, in an aggregate minimum amount of $1,000,000 and an integral multiple of $100,000 and, in the case of Eurodollar Loans, in an aggregate minimum amount of $5,000,000 and an integral multiple of $100,000; (b) shall, on each date when any reduction in the Commitment Amount shall become effective (including pursuant to Section 2.2), make a mandatory prepayment equal to the excess, if any, of the aggregate, outstanding principal amount of all Loans and Letter of Credit Outstandings over the Commitment Amount in effect on such date (following such reduction), which mandatory prepayment shall be applied (or held for application, as the case may be) by the Lenders (i) first, to the payment of the aggregate unpaid principal amount of those Loans then outstanding equal to the excess, if any, of the aggregate, outstanding principal amount of all Loans over the Loan Commitment Amount in effect on such date (following such reduction, if applicable); (ii) second, to the payment and/or cash collateralization of the then outstanding Letter of Credit Outstandings equal to the excess, if any, of the Letter of Credit Outstandings over the Letter of Credit Commitment Amount in effect on such date (following such reduction, if applicable); and (iii) third, to the payment of the aggregate unpaid principal amount of the Loans, and then to the payment and/or cash collateralization of the then outstanding Letter of Credit Outstandings equal to the excess, if any, of the aggregate, outstanding principal amount of all Loans and Letter of Credit Outstandings over the Commitment Amount in effect on such date; and (c) shall, immediately upon any acceleration of the Stated Maturity Date of any Loans pursuant to Section 9.2 or Section 9.3, repay all Loans, unless, pursuant to Section 9.3, only a portion of all Loans is so accelerated. Each prepayment of any Loans made pursuant to this Section shall be without premium or penalty (except as may be required by Section 5.4). -41- 50 SECTION 3.2. Interest Provisions. Interest on the outstanding principal amount of Loans shall accrue and be payable in accordance with this Section 3.2. SECTION 3.2.1. Rates. Pursuant to an appropriately delivered Borrowing Request or Continuation/Conversion Notice, any Borrower may elect that Loans comprising a Borrowing accrue interest at a rate per annum: (a) on that portion maintained from time to time as an ABR Loan, equal to the sum of the Alternate Base Rate from time to time in effect plus the Applicable Margin for such Loan; and (b) on that portion maintained as a Eurodollar Loan, during each Interest Period applicable thereto, equal to the sum of the Eurodollar Rate (Reserve Adjusted) for such Interest Period plus the Applicable Margin for such Loan. All Eurodollar Loans shall bear interest from and including the first day of the applicable Interest Period to (but not including) the last day of such Interest Period at the interest rate determined as applicable to such Eurodollar Loan. SECTION 3.2.2. Post-Maturity Rates. After the date any principal amount of any Loan is due and payable (whether on the Stated Maturity Date, upon acceleration or otherwise) and not paid on such date, or after any other monetary Obligation of any Borrower or any other Obligor, as the case may be, shall have become due and payable and not be paid on such date, such Borrower or such other Obligor, as the case may be, shall pay, but only to the extent permitted by law and not otherwise provided for in any Enhancement Letter of Credit in respect of a Liquidity Obligation, interest (after as well as before judgment) on the aggregate principal amount of all Loans then outstanding and on such other monetary Obligations at a rate per annum equal (a) in the case of the aggregate principal amount of all Loans then outstanding, to the interest rate otherwise applicable thereto plus an additional margin of 200 basis points; and (b) in the case of such other monetary Obligations of such Borrower or such other Obligor (other than such obligations comprised of the principal amount of any Loan), to the Alternate Base Rate from time to time in effect plus a margin of 200 basis points. SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be payable, without duplication: (a) on the Stated Maturity Date therefor; -42- 51 (b) on the date of any optional or required payment or prepayment, in whole or in part, of principal outstanding on such Loan (to the extent of the amount prepaid or required to be prepaid); (c) with respect to ABR Loans, on each Quarterly Payment Date occurring on or after March 31, 1998; (d) with respect to Eurodollar Loans, on the last day of each applicable Interest Period (and, if such Interest Period shall exceed three months, on the same calendar day of every third month of such Interest Period as the day on which such Interest Period commenced); (e) with respect to any ABR Loans converted into Eurodollar Loans on a day when interest would not otherwise have been payable pursuant to clause (c), on the date of such conversion; and (f) on that portion of any Loans the Stated Maturity Date of which is accelerated pursuant to Section 9.2 or Section 9.3, immediately upon such acceleration. Interest accrued on Loans or other monetary Obligations arising under this Agreement or any other Loan Document after the date such amount is due and payable (whether on the Stated Maturity Date, upon acceleration or otherwise) shall be payable upon demand. SECTION 3.3. Fees. The Borrowers, jointly and severally, agree to pay the fees set forth in this Section 3.3. All such fees shall be non-refundable. SECTION 3.3.1. Commitment Fees. The Borrowers, jointly and severally, agree to pay to the Administrative Agent for the account of each Lender, for the period (including any portion thereof when any of its Commitment is suspended by reason of any Borrower's inability to satisfy any condition of Article VI) commencing on the Effective Date and continuing through the Commitment Termination Date, a commitment fee equal to the Applicable Commitment Fee on such Lender's Percentage of the sum of the average daily unused portion of the Commitment Amount. Such commitment fee shall be payable by the Borrowers, jointly and severally, in arrears on each Quarterly Payment Date, on or after March 31, 1998, and on the Commitment Termination Date. SECTION 3.3.2. Arrangement Fees. In accordance with the letter agreement (the "Fee Letter") among the Borrowers, Credit Suisse First Boston, Chase and Chase Securities Inc. dated November 19, 1997, the Borrowers, jointly and severally, shall pay on the Closing Date an arrangement fee to the Arrangers for the account of the Lenders in such proportion as the Arrangers shall determine in their sole discretion. SECTION 3.3.3. Administrative Agent's Fee. The Borrowers, jointly and severally, agree to pay to the Administrative Agent for its own account, a non-refundable initial fee in the amount set forth in the Fee Letter, payable on the Closing Date and, thereafter, a non-refundable -43- 52 annual fee in the amount set forth in the Fee Letter, payable in advance on each anniversary of the Closing Date. SECTION 3.3.4. Letter of Credit Face Amount Fee. The Borrower or Borrowers requesting a Letter of Credit agree to pay to the Administrative Agent, for the account of the Lenders, a fee for such Letter of Credit for the period from and including the date of the issuance of such Letter of Credit to (but not including) the date upon which such Letter of Credit expires or is terminated, calculated at a per annum rate equal to the Applicable Margin with respect to Eurodollar Loans on the Stated Amount of such Letter of Credit. Such fee shall be payable by such Borrower or Borrowers in arrears each Quarterly Payment Date, on or after March 31, 1998, commencing on the first such date after the issuance of such Letter of Credit. SECTION 3.3.5. Letter of Credit Issuing Fee. The Borrower or Borrowers requesting a Letter of Credit agree to pay to the Administrative Agent, for the account of the Issuer, an issuing fee for such Letter of Credit for the period from and including the date of issuance of such Letter of Credit to (but not including) the date upon which such Letter of Credit expires or is terminated of 1/8% per annum on the Stated Amount of such Letter of Credit. Such fee shall be payable by such Borrower or Borrowers in arrears on each Quarterly Payment Date on or after March 31, 1998, and on the Commitment Termination Date for any period then ending for which such fee shall not theretofore have been paid, commencing on the first such date after the issuance of such Letter of Credit. SECTION 3.3.6. Letter of Credit Administrative Fee. Each Borrower agrees to pay to the Administrative Agent, for the account of the Issuer, the amounts set forth in Section 4.3. ARTICLE IV LETTERS OF CREDIT SECTION 4.1. Issuance Requests. By delivering to the Administrative Agent and the Issuer an Issuance Request, together with an Enhancement Letter of Credit Application and Agreement if such Issuance Request is in respect of an Enhancement Letter of Credit on or before 11:00 a.m. (New York City, New York time), a Subsidiary Borrower may request, from time to time prior to the Commitment Termination Date and on not less than three nor more than 30 Business Days' notice, in the case of General Letters of Credit, and on not less than 15 nor more than 30 Business Days' notice, in the case of Enhancement Letters of Credit, that the Issuer issue Letters of Credit in support of financial obligations of such Subsidiary Borrower or any other Account Party incurred (in the case of General Letters of Credit) in the ordinary course of business of such Borrower or such Account Party, as the case may be, and which are described in such Issuance Request; provided that, in the case of an Issuance Request that requests an increase in the Stated Amount of an Enhancement Letter of Credit then outstanding, such Issuance Request shall be so delivered on not less than five nor more than fifteen Business Days notice. Upon receipt of an Issuance Request and, if applicable, an Enhancement Letter of Credit -44- 53 Application and Agreement, the Administrative Agent shall promptly notify the Lenders thereof. Each Letter of Credit shall by its terms: (a) be issued in a Stated Amount denominated in U.S. Dollars which (i) is at least $25,000; (ii) does not exceed (or would not exceed) (A) an amount equal to the excess, if any, of (x) the Commitment Amount over (y) the sum of all Letter of Credit Outstandings plus the aggregate outstanding principal amount of all Loans, or (B) an amount equal to the excess, if any, of the Letter of Credit Commitment Amount over all Letter of Credit Outstandings; and (b) be stated to expire on a date (its "Stated Expiry Date") no later than the earlier of (i) (A) one year from its date of issuance, in the case of a General Letter of Credit, and (B) three years from its date of issuance, in the case of an Enhancement Letter of Credit, and (ii) the Commitment Termination Date in effect at the time of such issuance. So long as no Default has occurred and is continuing, by delivery to the Issuer and the Administrative Agent of an Issuance Request, at least three but not more than ten Business Days prior to the Stated Expiry Date of any issued General Letter of Credit or prior to the date any issued General Letter of Credit containing an "evergreen" or similar automatic extension feature is scheduled to automatically be extended (unless the beneficiary thereof shall have received notice to the contrary from the Issuer), the applicable Subsidiary Borrower may request the Issuer to extend the Stated Expiry Date of such issued General Letter of Credit for an additional period not to exceed the earlier of (A) one year from its date of extension and (B) the Commitment Termination Date in effect at the time of such extension. So long as no Default has occurred and is continuing, the applicable Subsidiary Borrower (or the applicable Account Party) may request the Issuer to extend the Stated Expiry Date of any issued Enhancement Letter of Credit for an additional period not to exceed the earlier of (A) two years from its date of extension and (B) the Commitment Termination Date in effect at the time of such extension; provided such request is made in accordance with the terms of the Enhancement Letter of Credit Application and Agreement relating thereto and is accompanied by delivery to the Issuer and the Administrative Agent of an Issuance Request. Each Enhancement Letter of Credit that provides for LOC Liquidity Disbursements shall be issued pursuant to an Enhancement Letter of Credit Application and Agreement substantially in the form of Exhibit J, with such modifications thereto as the Administrative Agent and the Issuer may consent (a "CP Enhancement Letter of Credit Application and Agreement"). Notwithstanding any provision contained in the foregoing to the contrary, no Borrower may request the issuance of, and the Issuer shall not have any obligation to issue, any Letter of Credit at any time when, and so long as, there shall be -45- 54 outstanding in the aggregate 50 Letters of Credit, unless otherwise consented to by the Issuer and the Administrative Agent. SECTION 4.2. Issuances and Extensions. On the terms and subject to the conditions of this Agreement (including Article VI), the Issuer shall issue Letters of Credit, and extend the Stated Expiry Dates of outstanding Letters of Credit, in accordance with the Issuance Requests made therefor and, if applicable, the Enhancement Letter of Credit Application and Agreement relating thereto; provided, however, that the issuance of an Enhancement Letter of Credit (a "Replacement Enhancement Letter of Credit") to replace another outstanding Enhancement Letter of Credit (an "Outstanding Enhancement Letter of Credit") shall not require the satisfaction of the terms and conditions set forth in Section 6.2.1 so long as (a) the issuance of the Replacement Enhancement Letter of Credit is required under the Enhancement Letter of Credit Application and Agreement relating to the Outstanding Enhancement Letter of Credit, (b) the Replacement Letter of Credit has terms substantially identical to those of the Outstanding Enhancement Letter of Credit, and (c) the Outstanding Enhancement Letter of Credit is terminated contemporaneously with the issuance of the Replacement Enhancement Letter of Credit. The Issuer shall promptly confirm any such issuance or extension (including the date of such issuance or extension), as the case may be, to the Administrative Agent. The Issuer will make available the original of each Letter of Credit which it issues in accordance with the Issuance Request and the Enhancement Letter of Credit Application and Agreement, if applicable, therefor to the beneficiary thereof (and will promptly provide each of the Lenders with a copy of such Letter of Credit) and will notify the beneficiary under any Letter of Credit of any extension of the Stated Expiry Date thereof. SECTION 4.3. Expenses. Each Borrower agrees to pay to the Administrative Agent for the account of the Issuer all reasonable and customary administrative expenses of the Issuer in connection with the issuance, maintenance, modification (if any) and administration of each Letter of Credit requested by such Borrower promptly upon demand from time to time. SECTION 4.4. Other Lenders' Participation. Each Letter of Credit issued pursuant to Section 4.2 shall, effective upon its issuance and without further action, be issued on behalf of all Lenders (including the Issuer thereof) pro rata according to their respective Percentages. Each Lender shall, to the extent of its Percentage, be deemed irrevocably to have participated in the issuance of such Letter of Credit and (x) shall be responsible to reimburse promptly the Issuer thereof for Reimbursement Obligations which have not been reimbursed by the applicable Borrower in accordance with Section 4.5, or which have been reimbursed by such Borrower but must be returned, restored or disgorged by the Issuer for any reason, or (y) in the case of an LOC Liquidity Disbursement, shall participate in such LOC Liquidity Disbursement in accordance with the terms of the Enhancement Letter of Credit Application and Agreement relating thereto. Each Lender shall, to the extent of its Percentage, be entitled to receive from the Administrative Agent a ratable portion of the letter of credit fees received by the Administrative Agent pursuant to Section 3.3.4 with respect to each Letter of Credit. In the event that (a) the applicable Borrower or Borrowers shall fail to reimburse the Issuer, or if for any reason Loans shall not be made to fund any Reimbursement Obligation, all as provided in Section 4.5 and in an amount equal to the amount of any drawing honored by the Issuer under a Letter of Credit issued by it, -46- 55 (b) the Issuer must for any reason return or disgorge such reimbursement or (c) an LOC Liquidity Disbursement has occurred, the Issuer shall promptly notify the Administrative Agent of the unreimbursed amount of such drawing and of such Lender's respective participation therein. Each Lender shall make available to the Administrative Agent for the account of the Issuer, whether or not any Default shall have occurred and be continuing, an amount equal to its respective participation in same day or immediately available funds at the office of the Issuer specified in such notice not later than 11:00 a.m. (New York City, New York time) on the Business Day (under the laws of the jurisdiction of the Issuer) after the date notified by the Issuer. In the event that any Lender fails to make available to the Administrative Agent for the account of the Issuer the amount of such Lender's participation in such Letter of Credit as provided herein, the Issuer shall be entitled to recover such amount on demand from such Lender together with interest at the daily average Federal Funds Rate for three Business Days (together with such other compensatory amounts as may be required to be paid by such Lender to the Administrative Agent and/or the Issuer, as the case may be, pursuant to the Rules for Interbank Compensation of the Council on International Banking or the Clearinghouse Compensation Committee, as the case may be, as in effect from time to time) and thereafter at the Alternate Base Rate plus 200 basis points. Nothing in this Section shall be deemed to prejudice the right of any Lender to recover from the Issuer any amounts made available by such Lender to the Issuer pursuant to this Section in the event that it is determined by a court of competent jurisdiction that the payment with respect to a Letter of Credit by the Issuer in respect of which payment was made by such Lender constituted gross negligence or wilful misconduct on the part of the Issuer. The Issuer shall distribute to the Administrative Agent for the account of each other Lender which has paid all amounts payable by it under this Section with respect to any Letter of Credit issued by the Issuer such other Lender's Percentage of all payments received by the Issuer from any Borrower in reimbursement of drawings honored by the Issuer under such Letter of Credit when such payments are received. SECTION 4.5. Disbursements. The Issuer will notify the applicable Borrower or Borrowers and the Administrative Agent promptly of the presentment for payment of any Letter of Credit, together with notice of the date (a "Disbursement Date") such payment shall be made. Subject to the terms and provisions of such Letter of Credit, the Issuer shall make such payment to the beneficiary (or its designee) of such Letter of Credit. The applicable Borrower or Borrowers will reimburse the Issuer for all amounts which it has disbursed under such Letter of Credit, except to the extent such amounts are in respect of an LOC Liquidity Disbursement (in which case such amounts shall be reimbursed to the Issuer or the Lenders by the applicable SPC in accordance with the provisions of the Enhancement Letter of Credit Application and Agreement relating thereto (the obligation of such SPC to reimburse the Issuer or the Lenders for such amounts in accordance with such terms being herein referred to as a "Liquidity Obligation")), on the Disbursement Date, if such Borrower or Borrowers are notified of such disbursement prior to 12:00 noon (New York, New York, time) on the Disbursement Date, or on the Business Day immediately succeeding the Disbursement Date, if such Borrower or Borrowers are not so notified (the "Reimbursement Due Date"). To the extent the Issuer is not reimbursed in full in respect of any Reimbursement Obligation payable by such Borrower or Borrowers on the Disbursement Date, such Reimbursement Obligation shall accrue interest from (and including) the Disbursement Date at a fluctuating rate per annum equal to the sum of the -47- 56 Alternate Base Rate from time to time in effect, plus the Applicable Margin for ABR Loans from time to time in effect, plus from (and including) the Reimbursement Due Date, a margin of 200 basis points, payable on demand. In the event the Issuer is not reimbursed by such Borrower or Borrowers on the Disbursement Date for any Reimbursement Obligation in respect of any Letter of Credit due and owing on such Disbursement Date, or if the Issuer must for any reason return or disgorge such reimbursement, the Lenders (including the Issuer) shall, on the terms and subject to the conditions of this Agreement (including the conditions set forth in Article VI), fund such Reimbursement Obligation by making, on the next Business Day, Loans which are ABR Loans as provided in Section 2.3 (such Borrower or Borrowers being deemed to have given a timely Borrowing Request therefor for such amount); provided, however, for the purpose of determining the availability of the Commitments to make Loans immediately prior to giving effect to the application of the proceeds of such Loans, such Reimbursement Obligation shall be deemed not to be outstanding at such time. SECTION 4.6. Reimbursement. The obligation (a "Reimbursement Obligation") of an Obligor under Section 4.5 or under the applicable Enhancement Letter of Credit Application and Agreement to reimburse the Issuer with respect to each disbursement (including interest thereon), and each Lender's obligation to make participation payments in each drawing which has not been reimbursed by the applicable Borrower or Borrowers or the applicable Account Party, shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim, or defense to payment which such Borrower or Borrowers may have or have had against any Lender or any beneficiary of a Letter of Credit, including any defense based upon the occurrence of any Default, any draft, demand or certificate or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient, the failure of any disbursement to conform to the terms of the applicable Letter of Credit (if, in the Issuer's good faith opinion, such disbursement is determined to be appropriate) or any non-application or misapplication by the beneficiary of the proceeds of such disbursement, or the legality, validity, form, regularity, or enforceability of such Letter of Credit; provided, however, that nothing herein shall adversely affect the right of such Borrower or Borrowers to commence any proceeding against the Issuer for any wrongful disbursement made by the Issuer under a Letter of Credit as a result of acts or omissions constituting gross negligence or willful misconduct on the part of the Issuer. SECTION 4.7. Deemed Disbursements. Upon the occurrence and during the continuation of any Event of Default or the occurrence of the Commitment Termination Date, an amount equal to that portion of Letter of Credit Outstandings attributable to outstanding and undrawn Letters of Credit shall, at the election of the Issuer acting on instructions from the Required Lenders, and without demand upon or notice to any Borrower, be deemed to have been paid or disbursed by the Issuer under such Letters of Credit (notwithstanding that such amount may not in fact have been so paid or disbursed), and, upon notification by the Issuer to the Administrative Agent and the applicable Borrower or Borrowers of its obligations under this Section, such Borrower or Borrowers shall be immediately obligated to reimburse the Issuer the amount deemed to have been so paid or disbursed by the Issuer. Any amounts so received by the Issuer from such Borrower or Borrowers pursuant to this Section shall be held as collateral security for the repayment of such Borrower's or Borrowers' obligations in connection with the -48- 57 Letters of Credit issued by the Issuer. At any time when such Letters of Credit shall terminate and all Obligations of the Issuer are either terminated or paid or reimbursed to the Issuer in full, the Obligations of such Borrower or Borrowers under this Section shall be reduced accordingly (subject, however, to reinstatement in the event any payment in respect of such Letters of Credit is recovered in any manner from the Issuer), and the Issuer will return to such Borrower or Borrowers the excess, if any, of (a) the aggregate amount deposited by such Borrower or Borrowers with the Issuer and not theretofore applied by the Issuer to any Reimbursement Obligation over (b) the aggregate amount of all Reimbursement Obligations to the Issuer pursuant to this Section, as so adjusted. At such time when all Events of Default shall have been cured or waived, the Issuer shall return to such Borrower or Borrowers all amounts then on deposit with the Issuer pursuant to this Section. All amounts on deposit pursuant to this Section shall, until their application to any Reimbursement Obligation or their return to such Borrower or Borrowers, as the case may be, bear interest at the daily average Federal Funds Rate from time to time in effect (net of the costs of any reserve requirements, in respect of amounts on deposit pursuant to this Section, pursuant to F.R.S. Board Regulation D), which interest shall be held by the Issuer as additional collateral security for the repayment of such Borrower's or Borrowers' Obligations in connection with the Letters of Credit issued by the Issuer. SECTION 4.8. Nature of Reimbursement Obligations. Each Borrower shall assume all risks of the acts, omissions, or misuse of any Letter of Credit requested by it by the beneficiary thereof. Neither the Issuer nor any Lender shall be responsible for: (a) the form, validity, sufficiency, accuracy, genuineness, or legal effect of any Letter of Credit or any document submitted by any party in connection with the application for and issuance of a Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent, or forged; (b) the form, validity, sufficiency, accuracy, genuineness, or legal effect of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof in whole or in part, which may prove to be invalid or ineffective for any reason; (c) failure of the beneficiary to comply fully with conditions required in order to demand payment under a Letter of Credit; (d) errors, omissions, interruptions, or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, or otherwise; or -49- 58 (e) any loss or delay in the transmission or otherwise of any document or draft required in order to make a disbursement under a Letter of Credit or of the proceeds thereof. None of the foregoing shall affect, impair, or prevent the vesting of any of the rights or powers granted the Issuer or any Lender hereunder. In furtherance and extension, and not in limitation or derogation, of any of the foregoing, any action taken or omitted to be taken by the Issuer in good faith shall be binding upon each Borrower and, in the absence of gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction, shall not put the Issuer under any resulting liability to such Borrower. SECTION 4.9. Indemnity. In addition to amounts payable as elsewhere provided herein, the Borrowers hereby, jointly and severally, agree to protect, indemnify, pay and save the Issuer harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys' fees and allocated costs of internal counsel) which the Issuer may incur or be subject to as a consequence, direct or indirect, of (a) the issuance of any Letter of Credit, other than as a result of the gross negligence or willful misconduct of the Issuer or a breach by the Issuer (or its agents or employees or any other Person under its control) of any obligation of the Issuer under such Letter of Credit to the Borrower which is the account party thereof, as determined by a final judgment of a court of competent jurisdiction, or (b) the failure of the Issuer to honor a drawing under any Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or governmental authority. SECTION 4.10. Borrowers' Guaranty of Reimbursement Obligations of its Subsidiaries. Each Borrower agrees as follows in respect of the Reimbursement Obligations of their respective Subsidiaries (other than SPCs): SECTION 4.10.1. Guaranty. Each Borrower hereby, absolutely, unconditionally and irrevocably (a) guarantees the full and punctual payment when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise, of all Reimbursement Obligations (other than Liquidity Obligations) now or hereafter existing, of each Subsidiary Guarantor that is an Account Party which arise out of, or are incurred in connection with, such Letters of Credit, whether for principal, interest, fees, expenses or otherwise (including all such amounts which would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. ss.362(a), and the operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506(b)), and -50- 59 (b) indemnifies and holds harmless each Secured Party and each holder of a Note for any and all costs and expenses (including reasonable attorneys' fees and expenses) incurred by such Secured Party or such holder, as the case may be, in enforcing any rights under the guaranty contained in this Section 4.10; provided, however, that in the case of the guaranty made by each of Dollar and Thrifty in respect of a Subsidiary Guarantor that is not its Subsidiary, Dollar or Thrifty, as the case may be, shall be liable under the guaranty set forth in this Section 4.10 for the maximum amount of such liability that can be hereby incurred without rendering the guaranty set forth in this Section 4.10, as it relates to Dollar or Thrifty, as the case may be, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount. The guaranty contained in this Section 4.10 constitutes a guaranty of payment when due and not of collection, and each Borrower specifically agrees that it shall not be necessary or required that any Secured Party exercise any right, assert any claim or demand or enforce any remedy whatsoever against any Account Party or any other Obligor (or any other Person) before or as a condition to the obligations of such Borrower under the guaranty contained in this Section 4.10 (such obligations hereinafter referred to as the "Guaranteed Obligations"). SECTION 4.10.2. Acceleration of Guaranty. Each Borrower agrees that, if an Event of Default of the nature set forth in Section 9.1.9 shall occur at a time when any of the Guaranteed Obligations of any Account Party may not then be due and payable, such Borrower agrees that it will pay to the Administrative Agent for the account of the Secured Parties forthwith the full amount which would be payable under the guaranty contained in this Section 4.10 by such Borrower if all such Guaranteed Obligations were then due and payable. SECTION 4.10.3. Guaranty Absolute, etc. The guaranty contained in this Section 4.10 shall in all respects be a continuing, absolute, unconditional and irrevocable guaranty of payment, and shall remain in full force and effect until all Guaranteed Obligations of the Account Parties have been paid in full in cash, all Obligations of each Borrower and each other Obligor hereunder have been paid in full in cash, all Letters of Credit have been terminated or expired and all Commitments shall have terminated. Each Borrower guarantees that the Guaranteed Obligations of the Account Parties will be paid strictly in accordance with the terms of this Agreement and each other Loan Document under which they arise, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Secured Party or any holder of any Note with respect thereto. The liability of each Borrower under the guaranty contained in this Section 4.10 shall be absolute, unconditional and irrevocable irrespective of: (a) any lack of validity, legality or enforceability of this Agreement, any Note or any other Loan Document; -51- 60 (b) the failure of any Secured Party or any holder of any Note (i) to assert any claim or demand or to enforce any right or remedy against any Account Party, any other Obligor or any other Person (including any other guarantor (including such Borrower)) under the provisions of this Agreement, any Note, any other Loan Document or otherwise, or (ii) to exercise any right or remedy against any other guarantor (including such Borrower) of, or collateral securing, any Guaranteed Obligations of any Account Party; (c) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations of any Account Party, or any other extension, compromise or renewal of any Guaranteed Obligation of any Account Party; (d) any reduction, limitation, impairment or termination of any Guaranteed Obligations of any Account Party for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and such Borrower hereby waives any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Guaranteed Obligations of any Account Party or otherwise; (e) any amendment to, rescission, waiver, or other modification of, or any consent to departure from, any of the terms of this Agreement, any Note or any other Loan Document; (f) any addition, exchange, release, surrender or non-perfection of any collateral, or any amendment to or waiver or release or addition of, or consent to departure from, any other guaranty, held by any Secured Party or any holder of any Note securing any of the Guaranteed Obligations of any Account Party; or (g) any other circumstance which might otherwise constitute a defense available to, or a legal or equitable discharge of, any Account Party any surety or any guarantor. SECTION 4.10.4. Reinstatement, etc. Each Borrower agrees that the guaranty contained in this Section 4.10 shall continue to be effective or be reinstated, as the case may be, if at any time any payment (in whole or in part) of any of the Guaranteed Obligations is rescinded or must otherwise be restored by any Secured Party or any holder of any Note, upon the insolvency, bankruptcy or reorganization of any Account Party or otherwise, all as though such payment had not been made. SECTION 4.10.5. Waiver, etc. Each Borrower hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations of any Account Party or any other Obligor and the guaranty contained in this Section 4.10 and any -52- 61 requirement that the Administrative Agent, any other Secured Party or any holder of any Note protect, secure, perfect or insure any security interest or Lien, or any property subject thereto, or exhaust any right or take any action against any Account Party, any other Obligor or any other Person (including any other guarantor) or entity or any collateral securing the Guaranteed Obligations of any Account Party. SECTION 4.10.6. Postponement of Subrogation, etc. Each Borrower agrees that it will not exercise any rights which it may acquire by way of rights of subrogation under the guaranty contained in this Section 4.10, by any payment made under the guaranty contained in this Section 4.10 or otherwise, until the prior payment in full in cash of all Guaranteed Obligations of each Account Party, the prior payment in full in cash of all Obligations of each Borrower, the termination or expiration of all Letters of Credit and the termination of all Commitments. Any amount paid to any Borrower on account of any such subrogation rights prior to the payment in full in cash of all Guaranteed Obligations of each Account Party shall be held in trust for the benefit of the Secured Parties and each holder of a Note and shall immediately be paid to the Administrative Agent for the benefit of the Secured Parties and each holder of a Note and credited and applied against the Guaranteed Obligations of each Account Party, whether matured or unmatured, in accordance with the terms of this Agreement; provided, however, that if (a) such Borrower has made payment to the Secured Parties and each holder of a Note of all or any part of the Guaranteed Obligations of any Account Party, and (b) all Guaranteed Obligations of each Account Party have been paid in full in cash, all Obligations of each Borrower have been paid in full in cash, all Letters of Credit have been terminated or expired and all Commitments have been permanently terminated, each Secured Party and each holder of a Note agrees that, at such Borrower's request, the Administrative Agent, on behalf of the Secured Parties and the holders of the Notes, will execute and deliver to such Borrower appropriate documents (without recourse and without representation or warranty) necessary to evidence the transfer by subrogation to such Borrower of an interest in the Guaranteed Obligations of each Account Party resulting from such payment by such Borrower. In furtherance of the foregoing, for so long as any Obligations (including Guaranteed Obligations) or Commitments remain outstanding, each Borrower shall refrain from taking any action or commencing any proceeding against any Account Party (or its successors or assigns, whether in connection with a bankruptcy proceeding or otherwise) to recover any amounts in the respect of payments made under the guaranty contained in this Section 4.10 to any Secured Party or any holder of a Note. SECTION 4.10.7. Right of Contribution. Each Borrower hereby agrees that to the extent that a Borrower shall have paid more than its proportionate share of any payment made hereunder, such Borrower shall be entitled to seek and receive contribution from and against any other Borrower hereunder who has not paid its proportionate share of such payment. Each Borrower's right of contribution shall be subject to the terms and conditions of Section 4.10.6. The provisions of this Section 4.10.7 shall in no respect limit the obligations and liabilities of -53- 62 any Borrower to the Administrative Agent and each other Secured Party, and each Borrower shall remain liable to the Administrative Agent and each other Secured Party for the full amount guaranteed by such Borrower hereunder. SECTION 4.10.8. Successors, Transferees and Assigns; Transfers of Notes, etc. The guaranty contained in this Section 4.10 shall: (a) be binding upon each Borrower, and its successors, transferees and assigns; and (b) inure to the benefit of and be enforceable by the Administrative Agent and each other Secured Party. Without limiting the generality of the foregoing clause (b), any Lender may assign or otherwise transfer (in whole or in part) any Note or Credit Extension held by it to any other Person or entity, and such other Person or entity shall thereupon become vested with all rights and benefits in respect thereof granted to such Lender under any Loan Document (including the guaranty contained in this Section 4.10) or otherwise, subject, however, to any contrary provisions in such assignment or transfer, and to the provisions of Section 12.11 and Article XI. SECTION 4.11. No Bankruptcy Petition Against RCFC or Dollar Thrifty Funding. With respect to each Enhancement Letter of Credit issued hereunder relating to RCFC or Dollar Thrifty Funding, each of the Lenders hereby covenants and agrees that, (a) prior to the date which is one year and one day after the payment in full of the latest maturing note issued under the Base Indenture, it will not institute against, or join with any other Person in instituting against, RCFC, and (b) prior to the date which is one year and one day after the payment in full of the latest maturing commercial paper note issued by Dollar Thrifty Funding, it will not institute against, or join with any other Person in instituting against Dollar Thrifty Funding, 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 4.11 shall constitute a waiver of any right to indemnification, reimbursement or other payment from any Obligor pursuant to this Agreement or any other Loan Document. In the event that any Lender takes action in violation of this Section 4.11, each Borrower agrees, for the benefit of the holders of the notes issued under the Base Indenture and the commercial paper notes issued by Dollar Thrifty Funding, that it shall cause RCFC or Dollar Thrifty Funding, as the case may be, to file an answer with the bankruptcy court or otherwise properly contest the filing of such a petition by such Lender against RCFC or Dollar Thrifty Funding, as the case may be, or the commencement of such action and raise the defense that such Lender 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; and such -54- 63 Lender shall be liable for and pay any costs and expenses incurred by RCFC or Dollar Thrifty Funding, as the case may be, in connection therewith. The provisions of this Section 4.11 shall survive the termination of the Agreement. ARTICLE V CERTAIN EURODOLLAR RATE AND OTHER PROVISIONS SECTION 5.1. Eurodollar Rate Lending Unlawful. If any Lender shall determine (which determination shall, upon notice thereof to the Borrowers, the Administrative Agent and the Lenders, be conclusive and binding on each Borrower) that the introduction of or any change in or in the interpretation of any law makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for such Lender to make, continue or maintain any Loan as, or to convert any Loan into, a Eurodollar Loan of a certain type, the obligations of such Lender to make, continue, maintain or convert into any such Loans shall, upon such determination, forthwith be suspended until such Lender shall notify the Administrative Agent that the circumstances causing such suspension no longer exist, and all outstanding Eurodollar Loans of such type of such Lender shall automatically convert into ABR Loans at the end of the then current Interest Periods with respect thereto or sooner, if required by such law or assertion, and all Loans of such Lender that would otherwise have been made or continued as, or converted into, Eurodollar Loans shall instead be made as or converted into, or continued as, ABR Loans upon which interest shall be payable at the same time as the related Eurodollar Loans. SECTION 5.2. Deposits Unavailable. If the Administrative Agent shall have determined that by reason of circumstances affecting the London interbank market, adequate means do not exist for ascertaining the interest rate applicable hereunder to Eurodollar Loans of any type, then, upon notice from the Administrative Agent to the Borrowers and the Lenders, the obligations of all Lenders under Section 2.3 and Section 2.4 to make or continue any Loans as, or to convert any Loans into, Eurodollar Loans of such type shall forthwith be suspended until the Administrative Agent shall notify the Borrowers and the Lenders that the circumstances causing such suspension no longer exist. SECTION 5.3. Increased Eurodollar Loan Costs, etc. The Borrowers, jointly and severally, agree to reimburse each Lender for any increase in the cost to such Lender of, or any reduction in the amount of any sum receivable by such Lender in respect of, making, continuing or maintaining (or of its obligation to make, continue or maintain) any Loans as, or of converting (or of its obligation to convert) any Loans into, Eurodollar Loans that arise in connection with any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in after the date hereof of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority, except for such changes with respect to (i) increased capital costs which are governed by Section 5.5 and (ii) taxes which are described and governed by Section 5.6 (including taxes imposed by reason of any failure of such Lender to comply with its obligations under clause (b) of Section 5.6, including taxes imposed by a taxing authority on or measured by -55- 64 the net income, overall receipts or capital of such Lender or any lending office, branch or any affiliate thereof and any franchise taxes or branch taxes imposed by a taxing authority on such Lender or any lending office, branch or any affiliate thereof); provided, however, that no Borrower shall have any obligation to pay any such additional amount under this Section 5.3 with respect to any such change unless such Lender shall have notified the applicable Borrower of its demand within 90 days after the date upon which such Lender has obtained audited financial statements with respect to the fiscal year of such Lender in which such change occurred. Such Lender shall promptly notify the Administrative Agent and the Borrowers in writing of the occurrence of any such reduction or increase (but in no event later than the date by which such Lender may demand reimbursement therefor pursuant to the immediately preceding sentence), such notice to state, in reasonable detail, the reasons therefor and the additional amount required fully to compensate such Lender on an after-tax basis for such increased cost or reduced amount. Such additional amounts shall be payable by the Borrowers directly to such Lender within five Business Days of its receipt of such notice, and such notice shall, in the absence of manifest error, be conclusive and binding on each Borrower. SECTION 5.4. Funding Losses. In the event any Lender shall incur any loss or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to make, continue or maintain any portion of the principal amount of any Loan as, or to convert any portion of the principal amount of any Loan into, a Eurodollar Loan) as a result of (a) any conversion or repayment or prepayment of the principal amount of any Eurodollar Loans on a date other than the scheduled last day of the Interest Period applicable thereto, whether pursuant to Section 3.1 or otherwise; (b) any Loans not being made as Eurodollar Loans in accordance with the Borrowing Request therefor; or (c) any Loans not being continued as, or converted into, Eurodollar Loans in accordance with the Continuation/ Conversion Notice therefor, then, upon the written notice of such Lender to the Borrowers (with a copy to the Administrative Agent), the Borrowers shall, within five Business Days of their receipt thereof, jointly and severally, pay directly to such Lender such amount as will (in the reasonable determination of such Lender) reimburse such Lender for such loss or expense. Such written notice (which shall include calculations in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on each Borrower. SECTION 5.5. Increased Capital Costs. If any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority after the Effective Date affects or would affect the amount of capital required or expected to be maintained by any Lender or any Person controlling such Lender, and such Lender determines (in its sole and absolute discretion) that the rate of -56- 65 return on its or such controlling Person's capital as a consequence of its Commitments, issuance of or participation in Letters of Credit or the Loans made by such Lender is reduced to a level below that which such Lender or such controlling Person could have achieved but for the occurrence of any such circumstance, then, in any such case upon notice from time to time by such Lender to the Borrowers, the Borrowers shall, jointly and severally, pay directly to such Lender within five Business Days additional amounts sufficient to compensate such Lender or such controlling Person on an after-tax basis for such reduction in rate of return; provided, however, that no Borrower shall have any obligation to pay any such additional amount under this Section 5.5 with respect to any such change unless such Lender shall have notified the applicable Borrower of its demand within 90 days after the date upon which such Lender or such controlling Person has obtained audited financial statements with respect to the fiscal year of such Lender or such controlling Person in which such change occurred. Such Lender or controlling Person shall promptly notify the Administrative Agent and the Borrowers in writing of the occurrence of any such reduction (but in no event later than the date by which such Lender or controlling Person may demand payment therefor pursuant to the immediately preceding sentence). A statement of such Lender as to any such additional amount or amounts (including calculations thereof in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on each Borrower. In determining such amount, such Lender may use any method of averaging and attribution that it (in its sole and absolute discretion) shall deem applicable. SECTION 5.6. Taxes. (a) Except to the extent otherwise provided in the proviso to clause (iii) of this Section 5.6(a) and the proviso to the sentence immediately succeeding such clause (iii), all payments by any Borrower of principal of, and interest on, the Credit Extensions and all other amounts payable hereunder (including fees) shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding (A) in the case of each Lender and the Administrative Agent, taxes imposed on or measured by the net income, overall receipts or capital of such Lender (or any Lending office, branch or affiliate of such Lender) or the Administrative Agent and franchise taxes or branch taxes imposed on such Lender (or any lending office, branch or affiliate of such Lender) or the Administrative Agent, as the case may be, (x) by the jurisdiction under the laws of which it is organized or any political subdivision thereof or (y) by reason of any connection between the jurisdiction imposing such tax and such Lender (or any lending office, branch or affiliate thereof) or the Administrative Agent, as the case may be, other than a connection arising solely from such Lender (or such lending office, branch or affiliate) or the Administrative Agent, as the case may be, having executed, delivered, or performed its obligations under, or received payment under or enforced, this Agreement, any Note or any other Loan Document and, (B) in the case of each Lender, taxes imposed on or measured by the net income, overall receipts or capital of such Lender (or any lending office, branch or affiliate of such Lender) and franchise taxes or branch taxes imposed on such Lender (or any lending office, branch or affiliate of such Lender) by the jurisdiction in which such Lender's Domestic Office or Eurodollar Office, as the case may be, is located or any political subdivision thereof (such non-excluded items being called "Taxes"). In the event that any withholding or deduction from any payment to be made by any Borrower hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then such Borrower will -57- 66 (i) pay directly to the relevant authority the full amount required to be so withheld or deducted; (ii) promptly forward to the Administrative Agent an official receipt or other documentation satisfactory to the Administrative Agent evidencing such payment to such authority; and (iii) pay to the Administrative Agent for the account of the Lenders (or, if applicable, for its own account) such additional amount or amounts as is necessary to ensure that the net amount actually received by each Lender and the Administrative Agent will equal the full amount such Lender or the Administrative Agent, as the case may be would have received had no such withholding or deduction been required; provided, however, that the Borrowers shall be entitled to deduct and withhold any Taxes and shall not be required to increase any such amounts payable pursuant to this clause (iii) to the Administrative Agent for the account of any Lender that is not incorporated under the laws of the United States (or any State thereof or the District of Columbia) to the extent such Taxes are imposed as a result of the failure of such Lender to comply with the requirements of clause (b) of this Section 5.6. Moreover, if any Taxes are directly asserted against the Administrative Agent or any Lender with respect to any payment received by the Administrative Agent or such Lender hereunder, the Administrative Agent or such Lender may pay such Taxes and promptly notify the Borrower of the nature and amount of such payment and such Borrower will promptly pay such additional amounts (including any penalties, interest or expenses) as is necessary in order that the net amount received by such person after the payment of such Taxes (including any Taxes on such additional amount) shall equal the amount such person would have received had no such Taxes been asserted, provided, however, that the Borrowers shall not be required to pay any additional amounts pursuant to this sentence to the Administrative Agent for the account of any Lender or to any Lender that is not incorporated under the laws of the United States (or any State thereof or the District of Columbia) to the extent such Taxes are imposed as a result of the failure of such Lender to comply with the requirements of clause (b) of this Section 5.6. If any Borrower fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent, for the account of the respective Lenders, the required receipts or other required documentary evidence, such Borrower shall indemnify the Lenders for any incremental Taxes, interest or penalties that may become payable by any Lender as a result of any such failure. For purposes of this Section 5.6, a distribution hereunder by the Administrative Agent or any Lender to or for the account of any Lender shall be deemed a payment by such Borrower. (b) Each Lender that is not incorporated under the laws of the United States (or any State thereof or the District of Columbia) shall: (X)(i) on or before the date of any payment by any Borrower under this Agreement, any Notes or any other Loan Document for the account of such Lender, -58- 67 deliver to the Borrowers and the Administrative Agent (A) two duly completed copies of United States Internal Revenue Service Form 1001 or 4224, or successor applicable form, as the case may be, and such other forms and certifications as may reasonably be required under applicable law, in order to establish that as of the date thereof such Lender is entitled to receive all payments under this Agreement, any Notes or any other Loan Document without deduction or withholding of any United States federal income taxes and (B) an Internal Revenue Service Form W-8 or W-9, or successor applicable form, as the case may be, certifying that such Lender is entitled to an exemption from United States backup withholding taxes; (ii) deliver to the Borrowers and the Administrative Agent two further copies of any such form on or before the date that any such form expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Borrowers and Administrative Agent; and (iii) if necessary, obtain, at the expense of the Borrowers, such extensions of time for delivery of such forms as may reasonably be requested by the Borrowers; or (Y) in the case of any such Lender that is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (i) furnish to the Borrowers on or before the date of any payment by any Borrower, with a copy to the Administrative Agent, (A) a certificate substantially in the form of Exhibit M (any such certificate a "U.S. Tax Compliance Certificate"), and (B) two accurate and complete original signed copies of Internal Revenue Service Form W-8, or successor applicable form certifying to such Lender's entitlement as of the date of such form to the exemption under Section 881(c) of the Code from U.S. withholding tax on payments of interest (and deliver to the Borrowers and the Administrative Agent two further copies of such form on or before the date the most recently delivered form expires or becomes obsolete and after the occurrence of any event requiring a change in the most recently delivered form and, if necessary, obtain, at the expense of the Borrowers, any extensions of time reasonably requested by the Borrowers for the delivery of such forms); and (ii) agree upon reasonable request of the Borrowers, to provide to the Borrowers and the Administrative Agent (for the benefit of the Borrowers and the Administrative Agent), such other forms as may be reasonably required under applicable law in order to establish the legal entitlement of such Lender to an exemption from withholding of Taxes with respect to any payments under this Agreement, any Notes and any other Loan Document; unless in any such case any change in treaty, law or regulation or any change in any previously published ruling, notice or other similar official Internal Revenue Service interpretation of a treaty, law or regulation has occurred after the date such Person becomes a Lender hereunder which renders all such forms inapplicable to such Lender or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender promptly so advises the Borrower and the Administrative Agent in writing. Each Person that shall become a Lender or a Participant pursuant to Section 12.11 shall, upon the effectiveness of the related transfer, be required to provide all of the forms, certifications and statements required pursuant to this Section, provided that in the case of a Participant the obligations of such Participant, pursuant to this clause (b) shall be determined as if such Participant were a Lender except that such Participant shall furnish all such required forms, certifications and statements to the Lender from which the related participation shall have been purchased. -59- 68 SECTION 5.7. Payments, Computations, etc. Unless otherwise expressly provided, all payments by each Borrower pursuant to this Agreement, the Notes, each Letter of Credit or any other Loan Document shall be made by such Borrower to the Administrative Agent for the pro rata account of the Lenders entitled to receive such payment. All such payments required to be made to the Administrative Agent shall be made, without setoff, deduction or counterclaim, not later than 1:00 p.m. (New York City, New York time) on the date due, in same day or immediately available funds, to such account as the Administrative Agent shall specify from time to time by notice to the Borrowers. Funds received after that time shall be deemed to have been received by the Administrative Agent on the next succeeding Business Day. The Administrative Agent shall promptly remit in same day funds to each Lender its share, if any, of such payments received by the Administrative Agent for the account of such Lender. All interest (including interest on Eurodollar Loans) and fees shall be computed on the basis of the actual number of days (including the first day but excluding the last day) occurring during the period for which such interest or fee is payable over a year comprised of 360 days (or, in the case of interest on an ABR Loan (other than when calculated with respect to the Federal Funds Rate), 365 days or, if appropriate, 366 days). Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall (except as otherwise required by clause (c) of the definition of the term "Interest Period" with respect to Eurodollar Loans) be made on the next succeeding Business Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment. SECTION 5.8. Sharing of Payments. If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of setoff or otherwise) on account of any Loan (other than pursuant to the terms of Sections 5.3, 5.4, 5.5 and 5.6) or Letter of Credit in excess of its pro rata share of payments then or therewith obtained by all Lenders, such Lender shall purchase from the other Lenders such participations in Loans made by them and/or Letters of Credit as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them; provided, however, that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender, the purchase shall be rescinded and each Lender which has sold a participation to the purchasing Lender shall repay to the purchasing Lender the purchase price to the ratable extent of such recovery together with an amount equal to such selling Lender's ratable share (according to the proportion of (a) the amount of such selling Lender's required repayment to the purchasing Lender to (b) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. Each Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by law, exercise all its rights of payment (including pursuant to Section 5.9) with respect to such participation as -60- 69 fully as if such Lender were the direct creditor of such Borrower in the amount of such participation. If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this Section applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section to share in the benefits of any recovery on such secured claim. SECTION 5.9. Setoff. Each Lender shall, upon the occurrence of any Event of Default described in clauses (a) through (d) of Section 9.1.9 or, with the consent of the Required Lenders, upon the occurrence of any other Event of Default, have the right to appropriate and apply to the payment of the Obligations (other than Liquidity Obligations) owing to it (whether or not then due), and (as security for such Obligations) each Borrower hereby grants to each Lender a continuing security interest in, any and all balances, credits, deposits, accounts or moneys of such Borrower then or thereafter maintained with or otherwise held by such Lender; provided, however, that any such appropriation and application shall be subject to the provisions of Section 5.8. Each Lender agrees promptly to notify such Borrower and the Administrative Agent after any such setoff and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff under applicable law or otherwise) which such Lender may have. SECTION 5.10. Replacement of Lender. Each Lender agrees that, upon the occurrence of any event set forth in Section 5.1, 5.3, or 5.5, or in the event any Borrower is required to pay additional amounts in respect of amounts payable hereunder to such Lender pursuant to Section 5.6, such Lender will use reasonable efforts to book and maintain its Loans through a different lending office or to transfer its Loans to an Affiliate which is an Eligible Assignee with the objective of avoiding or minimizing the consequences of such event; provided that such booking or transfer is not otherwise disadvantageous to such Lender as determined by such Lender in its sole and absolute discretion. If any Lender (a) notifies the Borrowers pursuant to Section 5.1 that it is unable to make, continue or maintain Eurodollar Loans or convert any Base Rate Loan into a Eurodollar Loan when a majority of the other Lenders have not given any such notice, (b) has demanded to be paid additional amounts pursuant to Section 5.3, 5.5 or 5.6 and the payment of such additional amounts are, and are likely to continue to be, more onerous in the reasonable judgment of the Borrowers than with respect to the other Lenders, or (c) has wrongfully failed to fund any Loan on the date specified for the making thereof and all of the other Lenders funded their portion of such Loan on such date, then the Borrowers shall have the right at any time when no Default shall have occurred and be continuing to seek one or more Eligible Assignees (each, a "Replacement Lender") to purchase -61- 70 the outstanding Loans of such Lender (the "Affected Lender"), and if the Borrowers locate a Replacement Lender, the Affected Lender shall, upon (i) prior written notice to the Administrative Agent, (ii) (A) payment to the Affected Lender of the purchase price agreed between it and the Replacement Lender (or, failing such agreement, a purchase price in the amount of the outstanding principal amount of the Affected Lender's Loans and accrued interest thereon to the date of payment) by the Replacement Lender plus (B) payment by the Borrowers of all amounts (other than principal and interest) then due to the Affected Lender or accrued for its account hereunder or under any other Loan Document, (iii) satisfaction of the provisions set forth in Section 12.11.1, and (iv) payment by the Borrower to the Affected Lender and the Administrative Agent of all reasonable out-of-pocket expenses in connection with such assignment and assumption (including the processing fees described in Section 12.11.1), assign and delegate all its rights and obligations under this Agreement and any other Loan Document to which it is a party (including its outstanding Loans and participations in Letter of Credit Outstandings) to the Replacement Lender, and the Replacement Lender shall assume such rights and obligations, whereupon the Replacement Lender shall in accordance with Section 12.11.1 become a party to each Loan Document to which the Affected Lender is a party and shall have the rights and obligations of a Lender thereunder and the Affected Lender shall be released from its obligations hereunder and each other Loan Document to the extent of such assignment and delegation. ARTICLE VI CONDITIONS PRECEDENT SECTION 6.1. Initial Credit Extension. The obligations of the Lenders and the Issuer to make the initial Credit Extension shall be subject to the prior or concurrent satisfaction of each of the conditions precedent set forth in this Section 6.1. SECTION 6.1.1. Resolutions, etc. The Administrative Agent shall have received from each Borrower and each other Obligor a certificate, dated the Closing Date, of the Secretary or Assistant Secretary of such Person as to (a) resolutions of its Board of Directors then in full force and effect authorizing the execution, delivery and performance of this Agreement, the Notes and each other Loan Document to be executed by it; -62- 71 (b) the incumbency and signatures of those of its officers authorized to act with respect to this Agreement, the Notes and each other Loan Document executed by it; and (c) the full force and validity of each Organic Document of such Person and true and complete copies thereof, upon which certificate each Lender, the Issuer and the Administrative Agent may conclusively rely until it shall have received a further certificate of the Secretary of such Borrower or such other Obligor canceling or amending such prior certificate. SECTION 6.1.2. Delivery of Notes. The Administrative Agent shall have received, for the account of each Lender that requests in writing three Business Days prior to the Closing Date that its Loans be evidenced by Notes, its Notes duly executed and delivered by each Borrower. SECTION 6.1.3. Transaction Consummated. (a) The Equity Offerings shall have resulted in gross cash proceeds of at least $350,000,000, and the Parent shall have received net cash proceeds of at least $45,000,000 pursuant to the Equity Offerings, such proceeds (up to $50,000,000) shall have been used to collateralize the MTN Program and in the event such proceeds exceed $55,000,000, such proceeds in excess of $55,000,000 (up to $50,000,000 of such excess proceeds) shall also have been used to collateralize the MTN Program. (b) The MTN Program shall have been established and medium term notes shall have been issued thereunder in an aggregate face amount of not less than $900,000,000, the proceeds of which shall have been applied to repay the existing Vehicle financing arrangements between the Parent and its Subsidiaries, on the one hand, and Chrysler and its Subsidiaries, on the other hand, and to provide funds for the purchasing of additional Vehicles. (c) The Chrysler-Dollar Supply Agreement, the Chrysler-Thrifty Supply Agreement and the Continuing Chrysler Arrangements (including the Chrysler Credit Support Documents and the Tax Sharing Agreement) shall have been entered into by the parties thereto on terms and conditions reasonably satisfactory in all respects to the Agents (including the terms and conditions relating to the furnishing by Chrysler to the Borrowers of advertising and promotional support). The Walden Agreement shall have been entered into by the parties thereto on terms and conditions reasonably satisfactory in all respects to the Agents. (d) All intercompany accounts in respect of intercompany advances (other than with respect to vehicle supply arrangements or any shuttle bus financing set forth in Item 8.2.2(c) ("Ongoing Indebtedness") of the Disclosure Schedule) between the Parent and its Subsidiaries, on the one hand, and Chrysler and its Subsidiaries (excluding the Parent and its Subsidiaries), on the other hand, shall have been settled, and the Borrowers shall have received any balance payable to them or their Subsidiaries in cash. All Surety Bonds necessary for the Borrowers to conduct their businesses in accordance with the terms of this Agreement (including Section 8.1.4) and otherwise consistent with past practice shall have been issued on terms and conditions reasonably satisfactory in all respects to the Agents [, including the absence of any requirement that the Parent and its Subsidiaries provide any collateral security therefor (other than Letters of Credit in an aggregate Stated Amount not exceeding $[19,000,000])]. All other aspects of the -63- 72 capital structure of each Borrower and Subsidiary Guarantor shall be reasonably satisfactory in all respects to the Agents. SECTION 6.1.4. Payment of Outstanding Indebtedness, etc. All Indebtedness, if any, identified in Item 8.2.2(b) ("Indebtedness to be Paid") of the Disclosure Schedule, together with all interest, all prepayment premiums and other amounts due and payable with respect thereto, shall have been paid in full (including, to the extent necessary, from proceeds of the initial Credit Extensions); and all Liens securing payment of any such Indebtedness shall have been released and the Administrative Agent shall have received all Uniform Commercial Code Form UCC-3 termination statements or other instruments as may be suitable or appropriate in connection therewith. SECTION 6.1.5. Delivery of Financial Statements. The Administrative Agent shall have received (a) audited consolidated financial statements for each of the three Fiscal Years in the three-Fiscal-Year period ending December 31, 1996 of each of (i) the Parent and its Subsidiaries, (ii) Dollar and its Subsidiaries and (iii) Thrifty and its Subsidiaries; (b) unaudited interim consolidated financial statements for the three-Fiscal-Quarter period ending September 30, 1997 of each of the Parent and its Subsidiaries; and (c) unaudited pro forma consolidated balance sheet of the Parent and its Subsidiaries as at the date of the most recent consolidated balance sheet delivered pursuant to clause (b) above (the "Pro Forma Balance Sheet"), certified by the chief financial Authorized Officer of the Parent, giving effect to the consummation of the Transaction (including the initial Credit Extension) and reflecting the proposed capital structure of the Parent and its Subsidiaries as at the Closing Date. SECTION 6.1.6. Consents, etc. All governmental and third party approvals and consents necessary in connection with the Transaction (including the execution and delivery of this Agreement and each other Loan Document by each Obligor or party hereto and thereto and their performance of their respective Obligations hereunder and thereunder) and continuing operations of the Parent and its Subsidiaries (after giving effect to the consummation of the Transaction) shall have been obtained and be in full force and effect (and, to the extent requested by the Administrative Agent, the Administrative Agent shall have received true and correct copies of such approvals and consents) and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose adverse conditions on any aspect of the Transaction. SECTION 6.1.7. No Material Adverse Change. There shall not have occurred a material adverse change in the business, operations, property, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole, since September 30, 1997. -64- 73 SECTION 6.1.8. Availability Under Credit Facility. After the making of all Credit Extensions under this Agreement on the Closing Date, (i) at least $125,000,000 of the Commitment Amount shall remain unused and available and (ii) at least $40,000,000 of the Loan Commitment Amount shall remain unused and available. SECTION 6.1.9. Business Plan. The Administrative Agent and the Lenders shall have received (a) a business plan for the 1998 Fiscal Year for the Parent and its Subsidiaries in form and scope reasonably satisfactory to the Agents and (b) financial projections for the period from January 1, 1998 to the Stated Maturity Date for the Parent and its Subsidiaries in form and scope reasonably satisfactory to the Agents. SECTION 6.1.10. Closing Date Certificate. The Administrative Agent shall have received, with counterparts for each Lender, the Closing Date Certificate, dated the date of the Closing Date and duly executed and delivered by an Authorized Officer of each Borrower, in which certificate each Borrower shall agree and acknowledge that the statements made therein shall be deemed to be true and correct representations and warranties of such Borrower made as of such date, and, at the time such certificate is delivered, such statements shall in fact be true and correct. All documents and agreements required to be appended to the Closing Date Certificate shall be in form and substance reasonably satisfactory to the Agents. SECTION 6.1.11. Guaranty. The Administrative Agent shall have received the Subsidiary Guaranty, dated the Closing Date, duly executed by each Subsidiary of each of the Borrowers that is a party thereto. SECTION 6.1.12. Pledge Agreement. The Administrative Agent shall have received executed counterparts of the Pledge Agreement, dated as of the Closing Date and duly executed and delivered by each Borrower and each of their respective Subsidiaries that is a party thereto together with the Pledged Notes (as defined therein), if any, and the certificates evidencing all of the issued and outstanding shares of Capital Stock pledged pursuant thereto, which certificates shall in each case be accompanied by undated stock powers duly executed in blank, or, if any securities pledged pursuant to the Pledge Agreement are uncertificated securities, confirmation and evidence satisfactory to the Administrative Agent that the security interest in such uncertificated securities has been transferred to and perfected by the Administrative Agent for the benefit of the Lenders in accordance with the U.C.C. or any similar or local law which may be applicable. SECTION 6.1.13. Security Agreement. The Administrative Agent shall have received executed counterparts of the Security Agreement, dated as of the Closing Date and duly executed and delivered by each Borrower and each of their respective Subsidiaries that is a party thereto, together with (a) properly completed Uniform Commercial Code financing statements (Form UCC-1) suitable for filing, naming in each case such Borrower or such Subsidiary, as the case may be, as the debtor and the Administrative Agent as the secured party, or other similar instruments or documents, suitable for filing under the applicable laws of all -65- 74 jurisdictions as may be necessary or, in the opinion of the Administrative Agent, desirable to perfect the security interest of the Administrative Agent pursuant to the Security Agreement; (b) executed copies of proper Uniform Commercial Code Form UCC-3 termination statements, if any, necessary to release all Liens and other rights of any Person (other than Liens permitted under Section 8.2.3) (i) in any collateral described in the Security Agreement and (ii) securing any of the Indebtedness identified in Item 8.2.2(b) ("Indebtedness to be Paid") of the Disclosure Schedule, together with such other Uniform Commercial Code Form UCC-3 termination statements as the Administrative Agent may reasonably request from such Obligors; and (c) certified copies of Uniform Commercial Code Requests for Information or Copies (Form UCC-11), or a similar search report certified by a party acceptable to the Administrative Agent, dated a date reasonably near to the Closing Date, listing all effective financing statements, tax liens and judgment liens which name such Borrower and such Subsidiaries, as the case may be (under their respective present names and any previous names thereof), as the debtor and which are filed in the jurisdictions in which filings were made pursuant to clause (a) above, together with copies of such financing statements (none of which shall cover any collateral described in each Security Agreement, except to the extent permitted by Section 8.2.3). SECTION 6.1.14. Mortgages. The Administrative Agent shall have received counterparts of a Mortgage for each Existing Material Property, dated as of the Closing Date, duly executed by the Borrower (or applicable Subsidiary) having rights in the property described therein, together with (a) evidence of the completion (or satisfactory arrangements for the completion) of all recordings and filings of each such Mortgage as may be necessary or, in the reasonable opinion of the Administrative Agent, desirable to create a valid, perfected first priority Lien against the land and improvements purported to be covered thereby; (b) mortgagee's title insurance policies in favor of the Administrative Agent and the Lenders issued by insurers reasonably satisfactory to the Administrative Agent, in amounts and in form and substance reasonably satisfactory to the Administrative Agent, with respect to each Existing Material Property purported to be covered by each such Mortgage, insuring that title to such property is marketable and that the interests created by the Mortgage constitute valid first Liens thereon free and clear of all defects and encumbrances other than as approved by the Administrative Agent, and including a revolving credit endorsement and such other endorsements as the Administrative Agent shall reasonably request and shall be accompanied by evidence of the payment in full of all premiums thereon; (c) to the extent requested by the Administrative Agent, surveys for each Existing Material Property made in accordance with the Minimum Standard Detail Requirements -66- 75 for Land Title Surveys jointly established and adopted by the American Land Title Association and the American Congress of Surveying and Mapping in 1992, which surveys shall be certified to the Administrative Agent and in form and substance reasonably satisfactory to the Administrative Agent; (d) Uniform Commercial Code financing statements related to the security interests created by each Mortgage, together with evidence of the completion (or satisfactory arrangements for the completion) of all recordings and filings of such financing statements in the appropriate offices and records as may be necessary or, in the reasonable opinion of the Administrative Agent, desirable to create valid, perfected first priority Liens against the improvements purported to be covered thereby; and (e) such other certifications (including flood hazard certifications), certificates (including insurance certificates), approvals, opinions or documents as the Administrative Agent may reasonably request. SECTION 6.1.15. Intercreditor Agreement. The Administrative Agent shall have received executed counterparts of the Intercreditor Agreement, dated as of the Closing Date, duly executed and delivered by Chrysler, each Borrower and each Subsidiary of a Borrower that is a party to the Pledge Agreement, the Security Agreement or a Mortgage. SECTION 6.1.16. Insurance. The Administrative Agent shall have received evidence reasonably satisfactory to it (which evidence shall include a certificate from an authorized insurance representative of the Borrowers) that all insurance required by Section 8.1.4 is in full force and effect with no default by any Borrower or any of their respective Subsidiaries, is fully paid and is not subject to cancellation without 30 days' prior written notice to the Administrative Agent. SECTION 6.1.17. Issuance Request. The Administrative Agent and the Issuer shall have received an Issuance Request for each Letter of Credit to be issued on the Closing Date and an Enhancement Letter of Credit Application and Agreement for each Enhancement Letter of Credit to be issued on the Closing Date (if any). SECTION 6.1.18. Opinions of Counsel. (a) The Administrative Agent shall have received opinions, dated the Closing Date and addressed to the Agents, the Issuer and the Lenders, from (i) Debevoise & Plimpton, New York counsel for the Obligors and Chrysler, in form and substance reasonably satisfactory to the Administrative Agent; (ii) Hall, Estill, Hardwick, Gable, Golden & Nelson, Oklahoma counsel for the Obligors, in form and substance reasonably satisfactory to the Administrative Agent; -67- 76 (iii) ___________________________, special California counsel for ____________, in form and substance reasonably satisfactory to the Administrative Agent; (iv) ___________________________, special Arizona counsel for _____________, in form and substance reasonably satisfactory to the Administrative Agent; (v) ___________________________, special Florida counsel for _____________, in form and substance reasonably satisfactory to the Administrative Agent; (vi) __________________________, special Texas counsel for _____________, in form and substance reasonably satisfactory to the Administrative Agent; [and] (vii) __________________________, special Utah counsel for ______________, in form and substance reasonably satisfactory to the Administrative Agent. (b) The Administrative Agent shall have received such reliance letters as it may reasonably request with respect to opinions delivered in connection with the Transaction, in each case dated the Closing Date and addressed to the Agents, the Issuer and all of the Lenders. SECTION 6.1.19. Closing Fees, Expenses, etc. The Administrative Agent shall have received for its own account or for the account of each Arranger or each Lender, as the case may be, all fees, costs and expenses due and payable pursuant to Sections 3.3 and 12.3, if then invoiced. SECTION 6.2. All Credit Extensions. The obligation of each Lender and the Issuer to make any Credit Extension (including the initial Credit Extension) shall be subject to the satisfaction of each of the conditions precedent set forth in this Section 6.2. SECTION 6.2.1. Compliance with Warranties, No Default, etc. Both before and after giving effect to any Credit Extension (but, if any Default of the nature referred to in Section 9.1.5 shall have occurred with respect to any other Indebtedness, without giving effect to the application, directly or indirectly, of the proceeds of any Credit Extension), the following statements shall be true and correct (a) the representations and warranties set forth in Article VII (excluding, however, those contained in Section 7.7) and in each other Loan Document shall, in each case, be true and correct with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date); -68- 77 (b) except as disclosed by any Borrower to the Administrative Agent, the Issuer and the Lenders pursuant to Section 7.7 (i) no labor controversy, litigation, arbitration or governmental investigation or proceeding shall be pending or threatened against such Borrower or any of its Subsidiaries which could reasonably be expected to materially adversely affect the consolidated business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries taken as a whole or which purports to affect the legality, validity or enforceability of this Agreement, the Notes or any other Loan Document; and (ii) no development shall have occurred in any labor controversy, litigation, arbitration or governmental investigation or proceeding disclosed pursuant to Section 7.7 which could reasonably be expected to materially adversely affect the consolidated business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries taken as a whole; and (c) no Default shall have then occurred and be continuing. SECTION 6.2.2. Credit Request. The Administrative Agent shall have received a Borrowing Request or Issuance Request, as the case may be, for such Credit Extension. Each of the delivery of a Borrowing Request or an Issuance Request and the acceptance by any Borrower of the proceeds of the Borrowing or the issuance of the Letter of Credit, as applicable, shall constitute a representation and warranty by such Borrower that on the date of such Borrowing (both immediately before and after giving effect to such Borrowing and the application of the proceeds thereof) or the issuance of the Letter of Credit, as applicable, the statements made in Section 6.2.1 are true and correct. SECTION 6.2.3. Enhancement Letters of Credit. In the event such Credit Extension is in respect of an Enhancement Letter of Credit, the conditions to such Credit Extension set forth in the Enhancement Letter of Credit Application and Agreement with respect to such Enhancement Letter of Credit shall have been satisfied. SECTION 6.2.4. Satisfactory Legal Form. All documents executed or submitted pursuant hereto by or on behalf of any Borrower or any of its Subsidiaries or any other Obligor shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel; the Administrative Agent and its counsel shall have received all information, approvals, opinions, documents or instruments as the Administrative Agent or its counsel may reasonably request. -69- 78 ARTICLE VII REPRESENTATIONS AND WARRANTIES In order to induce the Lenders, the Issuer and the Administrative Agent to enter into this Agreement and to make Loans and issue Letters of Credit hereunder, each Borrower represents and warrants unto the Administrative Agent, the Issuer and each Lender as set forth in this Article VII. SECTION 7.1. Organization, etc. Each Borrower and each of its Subsidiaries (a) is a corporation validly organized and existing and in good standing under the laws of the jurisdiction of its incorporation, (b) is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the nature of its business requires such qualification, except to the extent that the failure to so qualify has not had, and could not reasonably be expected to have, a material adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries taken as a whole, (c) has full power and authority and holds all requisite governmental licenses, permits and other approvals to enter into and perform its Obligations under this Agreement, the Notes and each other Loan Document to which it is a party and to own and hold under lease its property and to conduct its business substantially as currently conducted by it, and (d) subject to Section 7.12, has complied in all material respects with all material laws, rules, regulations and orders applicable to it. SECTION 7.2. Due Authorization, Non-Contravention, etc. The execution, delivery and performance by each Borrower of this Agreement, the Notes and each other Loan Document executed or to be executed by it, and the execution, delivery and performance by each other Obligor of each Loan Document executed or to be executed by it and each such Borrower's and each such other Obligor's participation in the consummation of the Transaction are or, in the case of the CP Program, will be within each such Borrower's and each such Obligor's corporate powers, have been or, in the case of the CP Program, will be duly authorized by all necessary corporate action, and do not (a) contravene such Borrower's or such other Obligor's Organic Documents; (b) contravene any material contractual restriction, law or governmental regulation or court decree or order binding on or affecting such Borrower or such other Obligor; or -70- 79 (c) result in, or require the creation or imposition of, any Lien (other than the Liens created under the Loan Documents in favor of the Administrative Agent for the benefit of the Secured Parties and the Liens created under the Chrysler Credit Support Documents for the benefit of Chrysler) on any of such Borrower or such other Obligor's properties. SECTION 7.3. Government Approval, Regulation, etc. Other than those authorizations, approvals or other actions by, and notices to or filings with, any governmental authority or regulatory body, if any, which have been or, in the case of the CP Program, will be duly obtained or made and are in full force and effect, no additional authorization or approval or other action by, and no additional notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance by any Borrower or any other Obligor of this Agreement, the Notes or any other Loan Document to which it is a party, or, except to the extent such failure to so obtain or make such authorizations, approvals or other actions could not reasonably be expected to have an adverse effect on the interests of the Lenders hereunder and under the other Loan Documents or a material adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole, for such Borrower's and each such other Obligor's participation in the consummation of the Transaction. No Borrower nor any of its Subsidiaries is an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. SECTION 7.4. Validity, etc. This Agreement constitutes, and the Notes and each other Loan Document executed by each Borrower will, on the due execution and delivery thereof, constitute, the legal, valid and binding obligations of such Borrower, enforceable against such Borrower in accordance with their respective terms; and each Loan Document executed pursuant hereto by each other Obligor will, on the due execution and delivery thereof by such Obligor, be the legal, valid and binding obligation of such Obligor be the legal, valid and binding obligation of such Obligor, as the case may be, enforceable in accordance with its terms. Each of the Loan Documents which purports to create a security interest creates a valid first priority security interest in the Collateral (as defined in such Loan Document) subject thereto, subject only to Liens permitted by Section 8.2.3, securing the payment of the Obligations described therein. SECTION 7.5. Financial Information; Absence of Undisclosed Liabilities. The financial statements of each Borrower and its Subsidiaries furnished to each Agent and each Lender pursuant to clauses (a) and (b) of Section 6.1.5 have been prepared in accordance with GAAP consistently applied, and present fairly, in all material respects, the consolidated financial condition of the entities covered thereby as at the dates thereof and the results of their operations for the periods then ended. Neither the Parent nor any of its Subsidiaries had any material liabilities (matured or unmatured, fixed or contingent) that were not fully reflected or provided for on the financial statements delivered pursuant to clause (a) and (b) of Section 6.1.5, whether or not required by GAAP to be shown in such financial statements, except as set forth in Item 7.5 ("Liabilities") of the Disclosure Schedule. The Pro Forma Balance Sheet delivered pursuant to clause (c) of Section 6.1.5 has been prepared in accordance with the -71- 80 requirements of Regulation S-X and utilizing accounting principles that when applied to the Transaction provide a reasonable basis on which to present unaudited pro forma financial data. All balance sheets, all statements of operations, shareholders' equity and cash flow and all other financial information of each of the Parent and its Subsidiaries furnished pursuant to Section 8.1.1 have been and will for periods following the Effective Date be prepared in accordance with GAAP consistently applied, and do or will present fairly, in all material respects, the consolidated financial condition of the entities covered thereby as at the dates thereof and the results of their operations for the periods then ended. SECTION 7.6. No Material Adverse Change. There has been no material adverse change in the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole, since September 30, 1997. SECTION 7.7. Litigation, Labor Controversies, etc. There is no pending or, to the best knowledge of any Borrower, threatened litigation, action, proceeding, or labor controversy affecting any Borrower or any of its Subsidiaries, or any of their respective properties, businesses, assets or revenues, which may materially adversely affect the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole, or which purports to affect the legality, validity or enforceability of this Agreement, the Notes or any other Loan Document, except as disclosed in Item 7.7 ("Litigation") of the Disclosure Schedule. The consummation of the Transaction will not give rise to a right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which any Obligor (or any predecessor) is a party or by which the Parent or any of its Subsidiaries (or any predecessor) is bound. SECTION 7.8. Subsidiaries. (a) The Parent has no direct Subsidiaries, except as set forth in Item 7.8(a) ("Existing Subsidiaries of the Parent") of the Disclosure Schedule. (b) Dollar has no Subsidiaries, except those Subsidiaries (i) which are identified in Item 7.8(b) ("Existing Subsidiaries of Dollar") of the Disclosure Schedule by their correct legal name, their jurisdiction of organization and the holders (and their respective percentage ownership) of the Capital Stock thereof or (ii) which are permitted to have been acquired in accordance with Section 8.2.5 or 8.2.10. (c) Thrifty has no Subsidiaries, except those Subsidiaries (i) which are identified in Item 7.8(c) ("Existing Subsidiaries of Thrifty") of the Disclosure Schedule by their correct legal name, their jurisdiction of organization and the holders (and their respective percentage ownership of) the Capital Stock thereof or (ii) which are permitted to have been acquired in accordance with Section 8.2.5 or 8.2.10. SECTION 7.9. Ownership of Properties. Except as permitted pursuant to Section 7.13 or Section 8.2.3, each Borrower and each of its Subsidiaries owns (i) in the case of owned real property, good and marketable fee title to, and (ii) in the case of owned personal property, good -72- 81 and valid title to, or, in the case of leased real or personal property, valid and enforceable leasehold interests (as the case may be) in, all of its properties and assets, real and personal, tangible and intangible, of any nature whatsoever, to the extent reflected on the financial statements dated as of September 30, 1997, or if later, the last day of the most recently completed Fiscal Quarter with respect to which, pursuant to Section 8.1.1, financial statements have been, or are required to have been, delivered by the Parent to the Administrative Agent, free and clear in each case of all Liens or claims, except for Liens permitted pursuant to Section 8.2.3. The real property described in Schedule IV constitutes each of the real estate owned in fee by a Borrower or any of its Subsidiaries on the date hereof (other than the Excluded Property) having a net book value of at least $500,000. All other real property owned in fee by a Borrower or any of its Subsidiaries on the date hereof (other than the Excluded Property) which is not set forth on such Schedule IV does not in the aggregate have a net book value exceeding $2,500,000. SECTION 7.10. Taxes. Each Borrower and each of its Subsidiaries has filed all material tax returns and reports required by law to have been filed by it and has paid all taxes and governmental charges thereby shown to be due and owing, except any such taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. SECTION 7.11. Pension and Welfare Plans. During the twelve-consecutive-month period prior to the date of the execution and delivery of this Agreement and prior to the date of any Credit Extension hereunder, (i) no steps have been taken to terminate any Pension Plan, and (ii) no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under section 302(f) of ERISA, which in the case of any of the events described in clause (i) or (ii) above could reasonably be expected to result in a liability of the Parent and its Subsidiaries in excess of $1,000,000. No condition exists or event or transaction has occurred with respect to any Pension Plan which might result in the incurrence by any Borrower or any member of the Controlled Group of any liability, fine or penalty that, in the aggregate, exceeds $1,000,000. Except as disclosed in Item 7.11 ("Employee Benefit Plans") of the Disclosure Schedule, no Borrower nor any member of the Controlled Group has any contingent liability with respect to any post-retirement benefit under a Welfare Plan, other than liability for continuation coverage described in Part 6 of Title I of ERISA. SECTION 7.12. Environmental Warranties. Except as set forth in Item 7.12 ("Environmental Matters") of the Disclosure Schedule (none of which items disclosed therein, singly or in the aggregate, have, or may reasonably be expected to have, a material adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole), (a) all facilities and property (including underlying groundwater) owned or leased by any Borrower or any of its Subsidiaries have been, and continue to be, owned or leased by such Borrower and such Subsidiary, as the case may be, in material compliance with all Environmental Laws and in accordance with industry practices; -73- 82 (b) there have been no past, and there are no pending or threatened (i) claims, complaints, notices or requests for information received by any Borrower or any of its Subsidiaries with respect to any alleged violation of any Environmental Law, which, if true would, singly or in the aggregate, result in a liability of more than $2,500,000 to the Parent and/or any of its Subsidiaries, or (ii) complaints, notices or inquiries to any Borrower or any of its respective Subsidiaries regarding potential liability under any Environmental Law, which, if true would, singly or in the aggregate, result in a liability of more than $2,500,000 to the Parent and/or any of its Subsidiaries; (c) there have been no Releases of Hazardous Materials at, on or under any property now or previously owned or leased by any Borrower or any of its Subsidiaries that, singly or in the aggregate, have, or may reasonably be expected to have, a material adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole; (d) each Borrower and each of its Subsidiaries have been issued and are in material compliance with all permits, certificates, approvals, licenses and other authorizations relating to environmental matters and necessary or desirable for their businesses; (e) no property now or previously owned or leased by any Borrower or any of its Subsidiaries is listed or proposed for listing (with respect to owned property only) on the National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state list of sites requiring investigation or clean-up; (f) there are no underground storage tanks, active or abandoned, including petroleum storage tanks, on or under any property now or previously owned or leased by any Borrower or any of its Subsidiaries that, singly or in the aggregate, have, or may reasonably be expected to have, a material adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole; (g) Borrower nor any of its Subsidiaries has directly transported or directly arranged for the transportation of any Hazardous Material to any location which is listed or proposed for listing on the National Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state list or which is the subject of federal, state or local enforcement actions or other investigations which may lead to material claims against such Borrower or such Subsidiary thereof for any remedial work, damage to natural resources or personal injury, including claims under CERCLA; (h) no Borrower nor any of its Subsidiaries has entered into any agreements or engaged in any activities that, singly or in the aggregate, would give rise to liability under -74- 83 any Environmental Law with regard to acts, omissions or conditions of property of any third party, including any franchisee of any Borrower or any of its Subsidiaries or that, singly or in the aggregate, have, or may reasonably be expected to have, a material adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole; (i) there are no polychlorinated biphenyls or friable asbestos present at any property now or previously owned or leased by any Borrower or any of its Subsidiaries that, singly or in the aggregate, have, or may reasonably be expected to have, a material adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole; and (j) no conditions exist at, on or under any property now or previously owned or leased by the Parent or any of its Subsidiaries, which, with the passage of time, or the giving of notice or both, would give rise to liability under any Environmental Law that, singly or in the aggregate, has, or may reasonably be expected to have, a material adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole. SECTION 7.13. Intellectual Property. Each Borrower and each of its Subsidiaries owns and possesses or licenses (as the case may be) all such patents, patent rights, trademarks, trademark rights, trade names, trade name rights, service marks, service mark rights and copyrights as such Borrower considers necessary for the conduct of the businesses of such Borrower and its Subsidiaries as now conducted without, individually or in the aggregate, any infringement upon rights of other Persons, in each case except as could not reasonably be expected to result in a material adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole, and there is no individual patent, patent right, trademark, trademark right, trade name, trade name right, service mark, service mark right or copyright the loss of which could reasonably be expected to result in a material adverse change in the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole, except as may be disclosed in Item 7.13 ("Intellectual Property") of the Disclosure Schedule. SECTION 7.14. Regulations G, U and X. No Borrower nor any of its Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock, and no proceeds of any Credit Extensions will be used to purchase or carry margin stock or otherwise for a purpose which violates, or would be inconsistent with, F.R.S. Board Regulation G, U or X. Terms for which meanings are provided in F.R.S. Board Regulation G, U or X or any regulations substituted therefor, as from time to time in effect, are used in this Section with such meanings. SECTION 7.15. Accuracy of Information. All information (other than financial statements and financial and business projections and forecasts) heretofore or contemporaneously furnished by or on behalf of any Borrower or any of their respective -75- 84 Subsidiaries in writing to any Agent, the Issuer or any Lender for purposes of or in connection with this Agreement or any transaction contemplated hereby (including the Transaction), is, and all of other such information hereafter furnished by or on behalf of any Borrower or any of their respective Subsidiaries to any Agent, the Issuer or any Lender will be, true and accurate in every material respect on the date as of which such information is dated or certified and as of the date of execution and delivery of this Agreement by such Agent, the Issuer and such Lender, and such information is not, or shall not be, as the case may be, incomplete by omitting to state any material fact necessary to make such information not materially misleading in light of the circumstances under which such information was furnished. All financial and business projections and forecasts heretofore or contemporaneously furnished by or on behalf of any Borrower or any of its Subsidiaries in writing to any Agent, the Issuer or any Lender for purposes of or in connection with this Agreement or any transaction contemplated hereby (including the Transaction) have been, and all of the financial and business projections and forecasts hereafter furnished by or on behalf of any Borrower or any of its Subsidiaries in writing to any Agent, the Issuer or any Lender will be prepared in good faith based upon assumptions which the Borrowers believe to be reasonable. SECTION 7.16. Transaction Documents. As of the Closing Date, each of the Chrysler-Dollar Supply Agreement, the Chrysler-Thrifty Supply Agreement, the Continuing Chrysler Arrangements (including the Chrysler Credit Support Agreement and the Tax Sharing Agreement) and the Walden Agreement has been duly executed and delivered by each of the parties thereto and is in full force and effect without the existence of any material default thereunder. SECTION 7.17. Non-Guarantor Subsidiaries. (a) Each Domestic Subsidiary of the Parent (other than Dollar, Thrifty and any SPC) that (i) accounted for more than 1 1/2% of consolidated revenues of the Parent and its Subsidiaries or 1 1/2% of consolidated net earnings of the Parent and its Subsidiaries, in each case for the four consecutive Fiscal Quarters of the Parent ending on September 30, 1997, or, if later, the last day of the most recently completed Fiscal Quarter with respect to which, pursuant to Section 8.1.1, financial statements have been, or are required to have been, delivered by the Parent to the Administrative Agent, or (ii) has assets which represent more than 1 1/2% of the consolidated assets of the Parent and its Subsidiaries as of September 30, 1997, or, if later, the last day of the last Fiscal Quarter of the most recently completed Fiscal Quarter with respect to which, pursuant to Section 8.1.1, financial statements have been, or are required to have been, delivered by the Parent to the Administrative Agent, is a party to the Subsidiary Guaranty. (b) There are no Domestic Subsidiaries of the Parent that are not Subsidiary Borrowers or Subsidiary Guarantors and that, when taken together with all other Subsidiaries of the Parent that are not Subsidiary Borrowers or Subsidiary Guarantors, -76- 85 (i) account in the aggregate for more than 2 1/2% of consolidated revenues of the Parent and its Subsidiaries or 2 1/2% of consolidated net earnings of the Parent and its Subsidiaries, in each case for the four consecutive Fiscal Quarters of the Parent ending on September 30, 1997, or, if later, the last day of the most recently completed Fiscal Quarter with respect to which, pursuant to Section 8.1.1, financial statements have been, or are required to have been, delivered by the Parent to the Administrative Agent, or (ii) have assets which represent more than 2 1/2% of the consolidated assets of the Parent and its Subsidiaries as of September 30, 1997, or, if later, the last day of the last Fiscal Quarter of the most recently completed Fiscal Quarter with respect to which, pursuant to Section 8.1.1, financial statements have been, or are required to have been, delivered by the Parent to the Administrative Agent. ARTICLE VIII COVENANTS SECTION 8.1. Affirmative Covenants. Each Borrower agrees with each Agent, the Issuer and each Lender that, until all Commitments have terminated, all Letters of Credit shall have terminated or expired and all Obligations have been paid and performed in full, such Borrower will perform the obligations set forth in this Section 8.1. SECTION 8.1.1. Financial Information, Reports, Notices, etc. Each Borrower will furnish, or will cause to be furnished, to each Lender, the Issuer and the Administrative Agent copies of the following financial statements, reports, notices and information: (a) as soon as available and in any event within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Parent, (i) a consolidated balance sheet of the Parent and its Subsidiaries and a consolidating balance sheet of the Parent and its direct Subsidiaries, in each case, as of the end of such Fiscal Quarter and (ii) consolidated statements of operations and cash flow of the Parent and its Subsidiaries and consolidating statements of operations and cash flow of the Parent and its direct Subsidiaries, in each case for such Fiscal Quarter and for the period commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal Quarter, and, in each case, certified by the chief financial Authorized Officer of the Parent; (b) as soon as available and in any event within 90 days after the end of each Fiscal Year of the Parent, (i) a copy of the annual audit report for such Fiscal Year for the Parent and its Subsidiaries, including therein a consolidated balance sheet of the Parent and its Subsidiaries and a consolidating balance sheet of the Parent and its direct Subsidiaries, in each case as of the end of such Fiscal Year and consolidated statements of operations and cash flow of the Parent and its Subsidiaries and consolidating statements of operations and cash flow of the Parent and its direct Subsidiaries, in each -77- 86 case for such Fiscal Year, in each case certified (without any Impermissible Qualification) in a manner acceptable to the Administrative Agent and the Required Lenders by Deloitte & Touche or other nationally recognized independent public accountants acceptable to the Administrative Agent and the Required Lenders, together with a report from such accountants containing a computation of each of the financial ratios and restrictions contained in Section 8.2.4 and to the effect that, in making the examination necessary for the signing of such annual report by such accountants, they have not become aware of any Default that has occurred and is continuing, or, if they have become aware of such Default, describing such Default and the steps, if any, being taken to cure it; and (ii) to the extent prepared for any other Person, (A) a copy of the annual audit report for such Fiscal Year for Dollar and its Subsidiaries, including therein a consolidated balance sheet of Dollar and its Subsidiaries, as of the end of such Fiscal Year and consolidated statements of operations and cash flow of Dollar and its Subsidiaries for such Fiscal Year, and (B) a copy of the annual audit report for such Fiscal Year for Thrifty and its Subsidiaries including therein a consolidated balance sheet of Thrifty and its Subsidiaries as of the end of such Fiscal Year and consolidated statements of operations and cash flow of Thrifty and its Subsidiaries for such Fiscal Year, in each case certified (without any Impermissible Qualification) in a manner acceptable to the Administrative Agent and the Required Lenders by Deloitte & Touche or other nationally recognized independent public accountants acceptable to the Administrative Agent and the Required Lenders; (c) as soon as available and in any event within 45 days after the end of each Fiscal Quarter, a Compliance Certificate, executed by the chief financial Authorized Officer of the Parent, showing, among other things, (in reasonable detail and with appropriate calculations and computations in all respects satisfactory to the Administrative Agent) compliance with the financial covenants set forth in Section 8.2.4; (d) as soon as possible and in any event within three Business Days after the occurrence of each Default, a statement of the chief financial Authorized Officer of the Parent setting forth details of such Default and the action which the Parent or any other Borrower has taken and proposes to take with respect thereto; (e) as soon as possible and in any event within three Business Days after (x) the occurrence of any adverse development with respect to any litigation, action, proceeding or labor controversy of the type that would be required to be described in Item 7.7 of the Disclosure Schedule or (y) the commencement of any labor controversy, litigation, action or proceeding of the type required to be described in Section 7.7, notice thereof and copies of all documentation relating thereto; (f) promptly after the sending or filing thereof, copies of all reports which the Parent sends to any of its securityholders, and all reports and registration statements which the Parent or any of its Subsidiaries files with the SEC or any national securities exchange; -78- 87 (g) as soon as possible and in any event within three Business Days after becoming aware of the institution of any steps by a Borrower or any other Person to terminate any Pension Plan, or the failure to make a required contribution to any Pension Plan if such failure is sufficient to give rise to a Lien under section 302(f) of ERISA, or the taking of any action with respect to a Pension Plan which could reasonably be expected to result in the requirement that such Borrower or any of their respective Subsidiaries furnish a bond or other security to the PBGC or such Pension Plan, or the occurrence of any event with respect to any Pension Plan which could reasonably be expected to result in the incurrence by a Borrower of any material liability, fine or penalty, or any material increase in the contingent liability of such Borrower with respect to any post-retirement Welfare Plan benefit, notice thereof and copies of all documentation relating thereto; (h) as soon as available and in any event no later than 30 days after the first day of each Fiscal Year of the Parent, an annual budget, prepared on a monthly basis for such Fiscal Year of the Parent containing (i)(A) a consolidated projected balance sheet of each of the Parent and its Subsidiaries, Dollar and its Subsidiaries, and Thrifty and its Subsidiaries, and (B) a consolidating projected balance sheet of the Parent and its direct Subsidiaries and (ii)(A) consolidated statements of operations and cash flow of each of the Parent and its Subsidiaries, Dollar and its Subsidiaries and Thrifty and its Subsidiaries, and (B) consolidating statements of operations and cash flow of the Parent and its direct Subsidiaries; (i) concurrently with the delivery of the financial statements described in clause (b) of this Section 8.1.1, a narrative explanation, in the form customarily provided to the Board of Directors of the Parent, of any material variance from the budget of the Parent for such Fiscal Year that is reflected in such financial statements, unless the Parent has timely filed with the SEC an annual report on Form 10-K, in which case delivery of such annual report to each Lender, the Issuer and the Administrative Agent shall satisfy the requirements of this clause (i); (j) as soon as possible and in any event within ten days after the delivery thereof, copies of all notices, agreements or documents delivered pursuant to any agreement for borrowed money to which the Parent or any Subsidiary of the Parent is a party and with a commitment or outstandings exceeding $2,500,000, except for such notices, agreements or documents (i) delivered pursuant to the terms hereof or (ii) which are delivered in the ordinary course of each such agreement (such as borrowing requests, letter of credit requests and the like); and (k) such other information respecting the condition or operations, financial or otherwise, of any Borrower or any of their respective Subsidiaries as any Lender through the Administrative Agent may from time to time reasonably request. -79- 88 SECTION 8.1.2. Compliance with Laws, Material Agreements, etc. Each Borrower will, and will cause each of its Subsidiaries to, comply in all material respects with all material laws, rules, regulations, orders and agreements applicable to it, such compliance to include: (a) the maintenance and preservation of its corporate existence and qualification as a foreign corporation; (b) the maintenance and preservation of all governmental licenses, permits and other approvals necessary for it to perform its obligations under this Agreement, the Notes and each other Loan Document to which it is a party and to own and hold under lease its property and to conduct its business substantially as currently conducted by it; (c) the maintenance, preservation and renewal of all material agreements necessary to conduct its business substantially as currently conducted by it (or the substitution for any such material agreement with a similar agreement), including the Chrysler-Dollar Supply Agreement and the Chrysler-Thrifty Supply Agreement; and (d) the payment, before the same become delinquent, of all taxes, assessments and governmental charges imposed upon it or upon its property except to the extent being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. SECTION 8.1.3. Maintenance of Properties. Each Borrower will, and will cause each of its Subsidiaries to, maintain, preserve, protect and keep its properties in good repair, working order and condition, and make necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times unless the such Person determines in good faith that the continued maintenance of any of its properties is no longer economically desirable. SECTION 8.1.4. Insurance. Each Borrower will, and will cause each of its Subsidiaries to, maintain or cause to be maintained with responsible insurance companies (a) insurance with respect to its properties and business (including business interruption insurance), against loss or damage by casualties and contingencies, in amounts not less than the then full replacement value of such properties, (b) general public liability insurance (including umbrella excess liability insurance) against liability on account of damage to persons and property in an amount not less than $7,500,000 per occurrence and $75,000,000 in the aggregate (provided that (i) Thrifty may self-insure up to $1,000,000 per occurrence through a combination of self-insurance, deductibles and/or quota-sharing arrangements and may maintain a quota sharing arrangement with an unaffiliated carrier under which it pays up to 15% of the portion of any such loss between $1,000,000 and $2,000,000, and (ii) Dollar may self-insure up to $1,000,000 per occurrence through a combination of self-insurance, deductibles and/or quota-sharing arrangements), (c) insurance required under all applicable workers' compensation laws in amounts which comply with relevant statutory requirements, (d) environmental impairment liability insurance of such types and in such amounts as may now or hereafter be required by applicable law and (e) each other type of insurance in such amount as is customary in the case of -80- 89 similar businesses of established reputation. All insurance policies described under this Section shall be in form reasonably satisfactory to the Administrative Agent. Upon request of the Administrative Agent, each Borrower will, and will cause each of its Subsidiaries to, furnish (or cause to be furnished) to each Lender at reasonable intervals a certificate of an Authorized Officer of such Borrower setting forth the nature and extent of all insurance maintenance by such Borrower and its Subsidiaries in accordance with this Section. SECTION 8.1.5. Books and Records. Each Borrower will, and will cause each of its Subsidiaries to, keep books and records which accurately reflect all of their respective business affairs and transactions and permit the Administrative Agent and each Lender or any of their respective representatives, at reasonable times and intervals, to visit all of their respective offices, to discuss their respective financial matters with their respective officers and independent public accountant (and each Borrower hereby authorizes such independent public accountants to discuss such financial matters with each Lender or its representatives whether or not any representative of such Borrower or such Subsidiary is present, provided such Borrower has been given prior notice of such discussion and an opportunity to be present during such discussion through one or more of its representatives) and to examine (and, at the expense of such Borrower, photocopy extracts from) any of their respective books or other corporate records. The Borrowers shall, jointly and severally, pay any fees of such independent public accountant incurred in connection with the Administrative Agent's or any Lender's exercise of its rights pursuant to this Section. SECTION 8.1.6. Environmental Covenant. Each Borrower will, and will cause each of its Subsidiaries to, (a) use and operate all of their respective facilities and properties in material compliance with all Environmental Laws, keep all necessary permits, approvals, certificates, licenses and other authorizations relating to environmental matters in effect and remain in material compliance therewith, and handle all Hazardous Materials in material compliance with all applicable Environmental Laws; (b) follow practices that are at least as effective as industry practices to minimize and respond to spills and overfills of petroleum products; (c) respond to past and ongoing releases of petroleum-containing materials in a manner that minimizes potential liability to third parties for off-site contamination from facilities owned or leased or otherwise operated by such Borrower or any of its Subsidiaries; (d) respond to past and ongoing releases of petroleum-containing materials in a manner that minimizes any likelihood that such Borrower or any of its Subsidiaries would incur costs or damages that, singly or in the aggregate, have, or may reasonably be expected to have, a material adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole; -81- 90 (e) manage the disposition of residuals such as spent petroleum-containing material in a manner that minimizes any likelihood that such Borrower or any of its Subsidiaries would incur costs or damages that, singly or in the aggregate, have, or may reasonably be expected to have, a material adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries, taken as a whole; (f) immediately notify the Administrative Agent and provide copies upon receipt of all written claims, complaints, notices or inquiries relating to the condition of their facilities and properties or compliance with Environmental Laws, other than any claim, complaint, notice or inquiry that alleges or makes reference to a violation of any Environmental Law which, if true, could result in payments not in excess of $2,500,000; and (g) provide such information and certifications which the Administrative Agent may reasonably request from time to time to evidence compliance with this Section 8.1.6. SECTION 8.1.7. Use of Proceeds. Each Borrower shall apply the proceeds of each Credit Extension in accordance with the eighth recital; without limiting the foregoing, no proceeds of any Loan will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Exchange Act or any "margin stock", as defined in F.R.S. Board Regulation U. SECTION 8.1.8. Additional Real Property. Each Borrower shall, and shall cause each of its Subsidiaries to, cause the Administrative Agent and the Lenders to have at all times a first priority perfected security interest (subject only to Liens and encumbrances permitted under Section 8.2.3) in all of the real property owned from time to time by such Borrower and its Subsidiaries (other than any such real property that has a net book value of less than $500,000 and that, when added to the net book value of all other real property owned by the Borrowers and their Subsidiaries that is not subject to a first priority perfected security interest in favor of the Administrative Agent and the Lenders, does not exceed $2,500,000, in either case). Without limiting the generality of the foregoing, each such Borrower shall, and shall cause each such Subsidiary to, execute and deliver or cause to be executed and delivered Mortgages, that may be necessary or, in the opinion of the Administrative Agent, desirable to create a valid, perfected Lien against such real property, together with (a) evidence of the completion (or satisfactory arrangements for the completion) of all recordings and filings of each such Mortgage; (b) mortgagee's title insurance policies in favor of the Administrative Agent and the Lenders and issued by insurers reasonably satisfactory to the Administrative Agent, in amounts and in form and substance reasonably satisfactory to the Administrative Agent, with respect to each Additional Material Property purported to be covered by each such Mortgage, insuring that title to such property is marketable and that the interests created by the Mortgage constitute valid first Liens thereon free and clear of all defects -82- 91 and encumbrances other than as approved by the Administrative Agent, such policies shall also include a revolving credit endorsement and such other endorsements as the Administrative Agent shall request and shall be accompanied by evidence of the payment in full of all premiums thereon; (c) surveys for each Additional Material Property made in accordance with the Minimum Standard Detail Requirements for Land Title Surveys jointly established and adopted by the American Land Title Association and the American Congress of Surveying and Mapping in 1992, which surveys shall be certified to the Administrative Agent and in form and substance reasonably satisfactory to the Administrative Agent; (d) Uniform Commercial Code financing statements related to the security interests created by each Mortgage, together with evidence of the completion (or satisfactory arrangements for the completion) of all recordings and filings of such financing statements in the appropriate offices and records as may be necessary or, in the reasonable opinion of the Administrative Agent, desirable to create valid, perfected first priority Liens against the improvements purported to be covered thereby; and (e) such other certifications (including flood hazard certifications), approvals, opinions or documents as the Administrative Agent may reasonably request. SECTION 8.1.9. Future Subsidiaries. Without limiting the effect of any provision contained herein (including Section 8.2.5), upon any Person becoming either a direct or indirect Subsidiary of the Parent (other than an SPC or a Non-Material Subsidiary), (a) in the event such Person is a Subsidiary which is not a Foreign Subsidiary, such Person (i) if not theretofore a party to the Security Agreement, shall execute and deliver to the Administrative Agent a supplement to the Security Agreement for the purpose of becoming a grantor thereunder, which supplement shall be substantially in the form attached to the Security Agreement and (ii) to the extent required under Section 8.2.2, shall execute and deliver to the Parent or any of its applicable Subsidiaries an Intercompany Note in a principal amount not less than the aggregate amount such Person may borrow from the Parent or such Subsidiary (which Intercompany Note shall be endorsed and pledged to the Administrative Agent pursuant to the Pledge Agreement (in accordance with the succeeding paragraph)); (b) the Parent or, if not the Parent, the Subsidiary of the Parent (provided such Subsidiary is not a Foreign Subsidiary exempted from the requirement of becoming a Subsidiary Guarantor as a result of the proviso to the succeeding clause (c)) that will own shares of the Capital Stock of such Person (which Subsidiary, if not theretofore a party to the Pledge Agreement, shall execute and deliver to the Administrative Agent a supplement to the Pledge Agreement for the purpose of becoming a pledgor thereunder, which supplement shall be substantially in the form attached to the Pledge Agreement) shall, pursuant to the Pledge Agreement (as further supplemented, if necessary, by a Foreign Pledge Agreement), pledge to the Administrative Agent (i) all of the outstanding -83- 92 shares of the Capital Stock of such Person owned by the Parent or such Subsidiary, together with (A) undated stock powers or equivalent instruments of transfer satisfactory to the Administrative Agent for such certificates or such other evidence of beneficial ownership, executed in blank (or, if any such shares of Capital Stock are uncertificated, confirmation and evidence satisfactory to the Administrative Agent that the security interest in such uncertificated securities has been perfected by the Administrative Agent in accordance with the U.C.C. or any similar or local law which may be applicable) and (B) executed copies of Uniform Commercial Code financing statements naming the Parent or such Subsidiary as the debtor and the Administrative Agent as the secured party, suitable for filing under the Uniform Commercial Code of all jurisdictions as may be necessary or, in the reasonable opinion of the Administrative Agent, desirable to perfect the security interest of the Administrative Agent in the interests of the Parent or such Subsidiary in such Person pledged pursuant to such Pledge Agreement (and such Foreign Pledge Agreement, if applicable); provided, however, that the Parent or such Subsidiary shall not be required to pledge the shares of Capital Stock of a Foreign Subsidiary required to be pledged hereunder (1) if the Required Lenders have otherwise agreed or (2) to the extent such pledge could reasonably be expected to constitute at any time an investment of earnings in United States property under Section 956 (or any successor provision thereto) of the Code that would increase by a material amount the amount of United States federal income tax that would otherwise be payable by the Parent and the other members of the affiliated group of corporations filing a consolidated federal income tax return with the Parent in the absence of such pledge, as determined by the Parent based on existing financial statements and on financial projections prepared in good faith based upon assumptions which the Parent believes to be reasonable and as evidenced by a certificate of the chief financial Authorized Officer of the Parent that is accepted in writing by the Administrative Agent (such acceptance not to be unreasonably withheld and which acceptance shall be deemed to have occurred in the absence of a written notice from the Administrative Agent that is given to the Parent within five Business Days of the Administrative Agent's receipt of such certificate, indicating the reasons for not accepting such certificate); provided further, however, that, in the event of any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive or guideline of any governmental authority (a "Law Change") that could reasonably be expected to alter the conclusion set forth in such certificate, the Administrative Agent or the Required Lenders may request the Parent to deliver another such certificate in light of such event and, in the absence of the delivery and acceptance of such certificate as provided above, require the pledge of such shares of Capital Stock but provided further, however, that, in the event that any Law Change occurs subsequent to the date that any such pledge of such shares of Capital Stock and is granted, and as a result thereof, such pledge could then reasonably be expected to increase by a material amount the amount of United States federal income tax that would otherwise be payable by the Parent and the other members of the affiliated group of corporations filing a consolidated federal income tax return with the Parent in the absence of such pledge, then, such pledge shall be released upon the written acceptance by the Administrative Agent of a certificate of the chief financial Authorized Officer of the Parent detailing the adverse effect of such subsequent Law Change (such -84- 93 acceptance not to be unreasonably withheld and which acceptance shall be deemed to have occurred in the absence of a written notice from the Administrative Agent that is given to the Parent within five Business Days of the Administrative Agent's receipt of such certificate, indicating the reasons for not accepting such certificate). (c) if not theretofore a party to the Subsidiary Guaranty, such Person shall execute and deliver to the Administrative Agent a supplement to the Subsidiary Guaranty for the purpose of becoming a guarantor thereunder, which supplement shall be substantially in the form attached to the Subsidiary Guaranty; provided, however, that, in the event such Subsidiary is a Foreign Subsidiary, such Subsidiary shall not be required to become a guarantor under the Subsidiary Guaranty (1) if the Required Lenders have otherwise agreed or (2) to the extent such guaranty could reasonably be expected increase the amount of United States federal income tax that would otherwise be payable by the Parent and the other members of the affiliated group of corporations filing a consolidated federal income tax return with the Parent in the absence of such guaranty, as determined by the Parent based on existing financial statements and on financial projections prepared in good faith based upon assumptions which the Parent believes to be reasonable and as evidenced by a certificate of the chief financial Authorized Officer of the Parent that is accepted in writing by the Administrative Agent (such acceptance not to be unreasonably withheld and which acceptance shall be deemed to have occurred in the absence of a written notice from the Administrative Agent that is given to the Parent within five Business Days of the Administrative Agent's receipt of such certificate, indicating the reasons for not accepting such certificate); provided further, however, that, in the event of any Law Change that could reasonably be expected to alter the conclusion set forth in such certificate, the Administrative Agent or the Required Lenders may request the Parent to deliver another such certificate in light of such event and, in the absence of the delivery and acceptance of such certificate as provided above, require the execution and delivery by such Person of such supplement to the Subsidiary Guaranty; but provided further, however, that, in the event that any Law Change occurs subsequent to the date that any such supplement to the Subsidiary Guaranty becomes effective, and as a result thereof, such guaranty could then reasonably be expected to increase by a material amount the amount of United States federal income tax that would otherwise be payable by the Parent and the other members of the affiliated group of corporations filing a consolidated federal income tax return with the Parent in the absence of such guaranty, then, such guarantee shall cease to be effective following the written acceptance by the Administrative Agent of a certificate of the chief financial Authorized Officer of the Parent detailing the adverse effect of such subsequent Law Change (such acceptance not to be unreasonably withheld and which acceptance shall be deemed to have occurred in the absence of a written notice from the Administrative Agent that is given to the Parent within five Business Days of the Administrative Agent's receipt of such certificate, indicating the reasons for not accepting such certificate); (d) the Administrative Agent shall have received from each such Person certified copies of Uniform Commercial Code Requests for Information or Copies (Form UCC-11), or a similar search report certified by a party acceptable to the -85- 94 Administrative Agent, dated a date reasonably near (but prior to) the date of any such Person becoming a direct or indirect Subsidiary of the Person, listing all effective financing statements, tax liens and judgment liens which name such Person as the debtor and which are filed in the jurisdictions in which filings are to be made pursuant to this Agreement and the other Loan Documents, and in such other jurisdictions as the Administrative Agent may reasonably request, together with copies of such financing statements (none of which (other than financing statements (i) filed pursuant to the terms hereof in favor of the Administrative Agent, if such Form UCC-11 or search report, as the case may be, is current enough to list such financing statements, (ii) being terminated pursuant to termination statements that are to be delivered on or prior to the date such Person becomes such Subsidiary or (iii) in respect of Liens permitted under Section 8.2.3) shall cover any of the collateral described in the Security Agreement); and (e) the Administrative Agent shall have received from each such Person executed copies of U.C.C. financing statements naming each such Person as the debtor and the Administrative Agent as the secured party, suitable for filing under the U.C.C. of all jurisdictions as may be necessary or, in the reasonable opinion of the Administrative Agent, desirable to perfect the security interest of the Administrative Agent pursuant to the Security Agreement entered into by such Person, together, in each case, with such opinions of legal counsel as the Administrative Agent may reasonably request, which legal opinions shall be in form and substance reasonably satisfactory to the Administrative Agent. SECTION 8.2. Negative Covenants. Each Borrower agrees with the Administrative Agent, the Issuer and each Lender that, until all Commitments have terminated, all Letters of Credit shall have terminated or expired and all Obligations have been paid and performed in full, each Borrower will perform the obligations set forth in this Section 8.2. SECTION 8.2.1. Business Activities. Each Borrower will not, and will not permit any of its Subsidiaries to, engage in any business activity, except (i) those described in the first recital (and such activities as may be incidental or related thereto) and (ii) the providing of telemarketing services. SECTION 8.2.2. Indebtedness. Each Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist or otherwise become or be liable in respect of any Indebtedness, other than, without duplication, the following: (a) Indebtedness in respect of this Agreement, including the Loans and other Obligations; (b) until the Closing Date, Indebtedness identified in Item 8.2.2(b) ("Indebtedness to be Paid") of the Disclosure Schedule; -86- 95 (c) Indebtedness existing as of the Effective Date which is identified in Item 8.2.2(c) ("Ongoing Indebtedness") of the Disclosure Schedule; (d) Indebtedness in respect of Surety Bonds in an aggregate amount not to exceed (i) from the date hereof to (and including) the last day of the 1998 Fiscal Year, $130,000,000, (ii) during the 1999 Fiscal Year, $140,000,000, (iii) during the 2000 Fiscal Year, $150,000,000, (iv) during the 2001 Fiscal Year, $160,000,000 and (v) during the 2002 Fiscal Year, $170,000,000; (e) Indebtedness of the Borrowers in respect of the Chrysler Letters of Credit in an aggregate amount not to exceed $50,000,000; (f) Indebtedness of the Subsidiary Borrowers and their respective Subsidiaries in an aggregate principal amount not to exceed $15,000,000 at any time outstanding which is incurred to finance buses that shuttle vehicle rental customers to and from Dollar and Thrifty vehicle rental sites; (g) Vehicle Debt; (h) Indebtedness in respect of Demand Capitalization Notes to the extent the obligations of the Parent thereunder (whether contingent or otherwise) do not exceed at any time $__________; (i) Indebtedness of Foreign Subsidiaries incurred for working capital purposes to the extent the aggregate principal amount thereof does not exceed at any time outstanding $1,000,000; (j) Indebtedness in an aggregate principal amount not to exceed $2,500,000 at any time outstanding which is incurred by any Borrower or any of its Subsidiaries to a vendor of any assets permitted to be acquired pursuant to Section 8.2.7 to finance its acquisition of such assets; (k) unsecured Indebtedness incurred in the ordinary course of business (excluding Indebtedness incurred through the borrowing of money or Contingent Liabilities); (l) Indebtedness in respect of Capitalized Lease Liabilities to the extent permitted by Section 8.2.7; (m) Hedging Obligations of the Parent or any of its Subsidiaries pursuant to agreements designed to protect the Parent or any of its Subsidiaries against fluctuations in interest rates in respect of Indebtedness of the Parent or such Subsidiary and not entered into for purposes of speculation; -87- 96 (n) Hedging Obligations of a Subsidiary Borrower or any of its Subsidiaries pursuant to agreements designed to protect such Subsidiary Borrower or any of its Subsidiaries against fluctuations in currency values and entered into in the ordinary course of business and not for purposes of speculation; (o) Indebtedness of the Parent owing to a Subsidiary Borrower or a Subsidiary Guarantor pursuant to an Investment of such Subsidiary Borrower or such Subsidiary Guarantor permitted pursuant to clause (e) of Section 8.2.5 or to any other Subsidiary of the Parent pursuant to clause (i) of Section 8.2.5; (p) Indebtedness of any Subsidiary Borrower or any Subsidiary Guarantor owing to the Parent; provided that such Indebtedness is evidenced by an Intercompany Note pledged to the Administrative Agent pursuant to the terms of the Pledge Agreement; (q) Indebtedness of a Borrower or any Subsidiary of a Borrower owing to a Subsidiary of a Borrower that is not a Subsidiary Borrower or a Subsidiary Guarantor; provided that such Indebtedness (other than Indebtedness of a Subsidiary Borrower owing to RCFC in respect of amounts advanced by RCFC to a Subsidiary Borrower) constitutes Subordinated Intercompany Debt; (r) Indebtedness of Subsidiary Borrowers or Subsidiary Guarantors that are Wholly Owned Subsidiaries of the Parent owing to a Subsidiary Borrower or a Subsidiary Guarantor; provided, however, that, in the event the obligor in respect of such Indebtedness is a Subsidiary of the Parent that is neither a Subsidiary Borrower nor a Subsidiary of a Subsidiary Borrower, such Indebtedness shall not be subordinated to any other liabilities of such obligor and shall be evidenced by an Intercompany Note pledged to the Administrative Agent pursuant to the terms of the Pledge Agreement; (s) Indebtedness of Subsidiaries of the Parent owing to a Borrower or a Subsidiary Guarantor to the extent permitted by clause (g) of Section 8.2.5; (t) Indebtedness of a Person that becomes a Subsidiary of a Subsidiary Borrower pursuant to a Permitted Business Acquisition or Indebtedness that is assumed pursuant to an acquisition of assets constituting a Permitted Business Acquisition by the acquiror of such assets, to the extent (i) such Indebtedness existed at the time of such Permitted Business Acquisition and was not created in contemplation thereof, (ii) such Indebtedness is not guaranteed by any other Obligor and (iii) the aggregate principal amount of all such Indebtedness outstanding at any time does not exceed $5,000,000; (u) Subordinated Debt of the Parent, to the extent (i) the terms of such Indebtedness are consented to by the Administrative Agent (provided such terms shall not include any scheduled principal payment (including any sinking fund requirement) prior to December 31, 2003, any financial covenants and any cross-default (other than cross-acceleration) to other Indebtedness) and (ii) the aggregate principal amount of all such Indebtedness outstanding at any time does not exceed $10,000,000; -88- 97 (v) Indebtedness which refinances Indebtedness permitted by clauses (d), (e), (f), (g) and (u) above; provided, however, that after giving effect to such refinancing, (i) the principal amount of outstanding Indebtedness is not increased, (ii) neither the tenor nor the average life thereof is reduced, (iii) the respective obligor or obligors shall be the same on the refinancing Indebtedness as on the Indebtedness being refinanced, (iv) the security, if any, for the refinancing Indebtedness shall be the same as that for the Indebtedness being refinanced (except to the extent that less security is granted to holders of refinancing Indebtedness), (v) the holders of refinancing Indebtedness are not afforded covenants, defaults, rights or remedies more burdensome to the obligor or obligors than those contained in the Indebtedness being refinanced and (vi) the refinancing Indebtedness is subordinated to the same degree, if any, as the Indebtedness being refinanced; and (w) other Indebtedness of the Subsidiary Borrowers and their respective Subsidiaries in an aggregate amount not to exceed (i) during the 1997 Fiscal Year, the 1998 Fiscal Year or the 1999 Fiscal Year, $5,000,000 and (ii) during the 2000 Fiscal Year or any Fiscal Year thereafter, $10,000,000; provided, however, that no Indebtedness otherwise permitted by clauses (i), (j), (l), (m), (n), (s), (t), (u) or (w) shall be permitted if, after giving effect to the incurrence thereof, any Default shall have occurred and be continuing. SECTION 8.2.3. Liens. Each Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets, whether now owned or hereafter acquired, except: (a) Liens securing payment of the Obligations, granted pursuant to any Loan Document; (b) Liens securing payment of Indebtedness of the type permitted and described in clause (b) of Section 8.2.2; (c) Liens granted prior to the Effective Date to secure payment of Indebtedness of the type permitted and described in clause (c) of Section 8.2.2; (d) Liens granted to secure payment of Vehicle Debt and covering only Vehicles financed by such Vehicle Debt, Excluded Receivables relating to such Vehicles, rights under the Demand Capitalization Notes, cash (and investments thereof in Cash Equivalent Investments) of an SPC arising from the operations of such SPC, deposit accounts with respect to such cash and Cash Equivalent Investments and all proceeds of the foregoing; (e) Liens securing payment of reimbursement obligations of the Borrowers in respect of the Chrysler Letters of Credit, granted pursuant to the Chrysler Credit Support Documents and subject to the terms of the Intercreditor Agreement; -89- 98 (f) Liens granted to secure payment of Indebtedness of the type permitted and described in clause (f) of Section 8.2.2 and covering only those buses financed with the proceeds of such Indebtedness; (g) Liens granted to secure payment of Indebtedness of the type permitted and described in clause (i) of Section 8.2.2 and covering only assets of the Foreign Subsidiary obligated under such Indebtedness; (h) Liens granted to secure payment of Indebtedness of the type permitted and described in clause (j) of Section 8.2.2 and covering only those assets acquired with the proceeds of such Indebtedness; (i) Liens granted to secure payment of Indebtedness (other than Subordinated Intercompany Debt) of the type permitted and described in clause (o) (to the extent payable to a Subsidiary Borrower), (q), (r) or (s) of Section 8.2.2; (j) Liens existing on specific assets at the time acquired by a Subsidiary Borrower or any of its Subsidiaries pursuant to a Permitted Business Acquisition, to the extent (i) such Liens existed at the time of such acquisition and were not created in contemplation thereof, (ii) such Liens do not encumber any other asset of any Borrower or any of its Subsidiaries and (iii) the Indebtedness secured thereby is of the type permitted and described in clause (t) of Section 8.2.2; (k) Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books; (l) Liens of carriers, warehousemen, mechanics, materialmen and landlords incurred in the ordinary course of business for sums not overdue or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books; (m) Liens incurred in the ordinary course of business in connection with workmen's compensation, unemployment insurance or other forms of governmental insurance or benefits, or to secure performance of tenders, statutory obligations, leases and contracts (other than for borrowed money) entered into in the ordinary course of business or to secure obligations on surety or appeal bonds; (n) judgment Liens in existence less than 30 days after the entry thereof or with respect to which execution has been stayed or the payment of which is covered in full (subject to a customary deductible) by insurance maintained with responsible insurance companies; and -90- 99 (o) Liens with respect to minor imperfections of title and easements, rights-of-way, restrictions, reservations, permits, servitudes and other similar encumbrances on real property and fixtures which do not detract in any material respect from the value thereof or impair in any material respect the use thereof by the Parent and its Subsidiaries in the ordinary course of their operation; (p) Liens consisting of any encumbrance or restriction on any Capital Stock of a joint venture that is not a Subsidiary of any Borrower (including any Subsidiary of any Borrower), to the extent (i) such Lien is in favor of, or for the benefit of, such joint venture or any Person or Persons owning more than 25% of the Capital Stock of such joint venture and (ii) such Lien secures obligations to such joint venture of the Subsidiary Borrower or the Subsidiary of a Subsidiary Borrower owning Capital Stock of such joint venture; (q) other Liens securing Indebtedness in an aggregate amount not to exceed $1,000,000 at any time outstanding (it being acknowledged that any such Liens shall not cover any property, revenues or assets constituting Collateral (as such term is defined in the Pledge Agreement) or Intellectual Property Collateral (as such term is defined in the Security Agreement)). SECTION 8.2.4. Financial Condition. No Borrower will permit: (a) the Net Worth of the Parent to be at any time less than the sum, at such time, of (i) $225,000,000, plus (ii) 100% of the net cash proceeds received by the Parent in excess of $45,000,000 pursuant to the Equity Offerings, plus (iii) 50% of the Net Income of the Parent for each Fiscal Year, commencing with the 1998 Fiscal Year, as shall have been completed on or prior to such time (in each case with no reduction for net losses), plus (iv) 100% of Net Equity Proceeds; (b) Adjusted EBITDA for the four consecutive Fiscal Quarters ending on the last day of each Fiscal Quarter, commencing with the second Fiscal Quarter of the 1998 Fiscal Year, to be less than the amount set forth opposite such Fiscal Quarter below: Fiscal Quarter Amount -------------- ------ The second Fiscal Quarter of the 1998 Fiscal Year $50,000,000 The third Fiscal Quarter of the 1998 Fiscal Year $50,000,000 The fourth Fiscal Quarter of the 1998 Fiscal Year $70,000,000 -91- 100 Fiscal Quarter Amount -------------- ------ The first, second and third Fiscal Quarters of the 1999 Fiscal Year $70,000,000 The fourth Fiscal Quarter of the 1999 Fiscal Year $75,000,000 The first, second and third Fiscal Quarters of the 2000 Fiscal Year $75,000,000 The fourth Fiscal Quarter of the 2000 Fiscal Year $85,000,000 The first, second and third Fiscal Quarters of the 2001 Fiscal Year $85,000,000 The fourth Fiscal Quarter of the 2001 Fiscal Year and each Fiscal Quarter thereafter $90,000,000 (c) the Leverage Ratio, at any time, to be greater than the ratio set forth opposite the applicable period set forth below: Fiscal Quarter Ratio -------------- ----- From (and including) the Closing Date to (but excluding) the last day of the fourth Fiscal Quarter of the 1998 Fiscal Year 4.95:1.00 From (and including) the last day of the fourth Fiscal Quarter of the 1998 Fiscal Year to (but excluding) the last day of the fourth Fiscal Quarter of the 1999 Fiscal Year 4.50:1.00 -92- 101 Fiscal Quarter Ratio -------------- ----- From (and including) the last day of the fourth Fiscal Quarter of the 1999 Fiscal Year to (but excluding) the last day of the fourth Fiscal Quarter of the 2000 Fiscal Year 4.25:1.00 From (and including) the last day of the fourth Fiscal Quarter of the 2000 Fiscal Year (but excluding) the last day of the fourth Fiscal Quarter of the 2001 Fiscal Year 4.00:1.00 From (and including) the last day of the fourth Fiscal Quarter of the 2001 Fiscal year (and at all times thereafter) 3.50:1.00 (d) the Interest Coverage Ratio, as of the last day of each Fiscal Quarter, commencing with the second Fiscal Quarter of the 1998 Fiscal Year, to be less than the ratio set forth opposite such Fiscal Quarter below: Fiscal Quarter Ratio -------------- ----- The second Fiscal Quarter of the 1998 Fiscal Year 3.75:1.00 The third Fiscal Quarter of the 1998 Fiscal Year 3.75:1.00 The fourth Fiscal Quarter of the 1998 Fiscal Year and each Fiscal Quarter thereafter 4.00:1.00 (e) the Fixed Charge Coverage Ratio, as of the last day of each Fiscal Quarter, commencing with the fourth Fiscal Quarter of the 1998 Fiscal Year, to be less than the ratio set forth opposite such Fiscal Quarter below: -93- 102 Fiscal Quarter Ratio -------------- ----- The second Fiscal Quarter of the 1998 Fiscal Year 1.00:1.00 The third Fiscal Quarter of the 1998 Fiscal Year 1.00:1.00 The fourth Fiscal Quarter of the 1998 Fiscal Year 1.00:1.00 The first Fiscal Quarter of the 1999 Fiscal Year and each Fiscal Quarter thereafter 1.10:1.00 SECTION 8.2.5. Investments. Each Borrower will not, and will not permit any of its Subsidiaries to, make, incur, assume or suffer to exist any Investment in any other Person, except: (a) Investments existing on the Effective Date and identified in Item 8.2.5(a) ("Ongoing Investments") of the Disclosure Schedule; (b) Cash Equivalent Investments; (c) Investments which are Permitted Business Acquisitions; (d) without duplication, Investments permitted as Capital Expenditures pursuant to Section 8.2.7; (e) (i) Investments by a Subsidiary Borrower in the Parent (A) by way of contributions to capital or the making of loans or advances, to the extent the amount of such Investment would be permitted as a dividend pursuant to clause (a) of Section 8.2.6 at the time of such Investment and (B) by way of advances that are pursuant to the Parent's cash management system for it and its Subsidiaries and (ii) Investments by a direct Subsidiary of the Parent (other than a Subsidiary Borrower) in the Parent; (f) Investments by a Subsidiary Borrower or a Subsidiary Guarantor in Subsidiary Borrowers and Subsidiary Guarantors that are Wholly Owned Subsidiaries of a Subsidiary Borrower or, to the extent permitted by clause (r) of Section 8.2.2, in a Subsidiary Guarantor that is neither a Subsidiary Borrower nor a Subsidiary of a Subsidiary Borrower; -94- 103 (g) Investments by a Borrower or a Subsidiary Guarantor in Subsidiaries of the Parent that are not permitted by the preceding clause (f) or succeeding clause (h), by way of contributions to capital, the making of loans or advances or the incurrence of Contingent Liabilities, to the extent the aggregate amount of such Investments that are made in any Fiscal Year (commencing with the 1998 Fiscal Year) does not exceed $5,000,000 and the aggregate amount of such Investments at any time outstanding does not exceed $15,000,000 (exclusive of such Investment existing as of the date hereof and identified in Item 8.2.5(a) ("Ongoing Investments") of the Disclosure Schedule); (h) Investments by the Parent in a Subsidiary Borrower or any Subsidiary Guarantor; (i) Investments by a Subsidiary of the Parent that is neither a Subsidiary Borrower (nor a Subsidiary Guarantor in the Parent or any Subsidiary of the Parent; (j) Investments evidenced by the Demand Capitalization Notes; (k) Investments in franchisees of Dollar or Thrifty (i) by way of guaranties of obligations of such franchisees in respect of the leasing by such franchisees of real or personal property under arrangements which would not, under GAAP, be classified as capitalized leases, to the extent such obligations (other than any portion of rental payments that are determined on the basis of revenues generated by the property subject to such leases or by the operations conducted on the property subject to such leases) do not exceed $1,000,000 during any Fiscal Year, and (ii) by way of the making of loans or advances to such franchisees or otherwise (including by obtaining a letter of credit for the benefit of a beneficiary selected by any such franchisee and with respect to which such franchisee is the account party and the Parent or any of its Subsidiaries is obligated to reimburse the issuer thereof for drawings thereunder), to the extent such Investments (which, in the case of any such letter of credit, would be accounted for at the Stated Amount thereof) do not exceed in the aggregate at any time $10,000,000; provided, however, that the aggregate amount of such Investments that were funded in cash and that are outstanding at any time does not exceed $3,000,000; (l) other Investments in an aggregate amount at any time not to exceed $3,500,000; provided, however, that (i) any Investment which when made complies with the requirements of the definition of the term "Cash Equivalent Investment" may continue to be held notwithstanding that such Investment if made thereafter would not comply with such requirements; and -95- 104 (ii) no Investment otherwise permitted by clause (c), (e), (g), (k) or (l) shall be permitted to be made if, immediately before or after giving effect thereto, any Default shall have occurred and be continuing. SECTION 8.2.6. Restricted Payments, etc. On and at all times after the Effective Date: (a) neither Subsidiary Borrower will declare, pay or make any Distribution with respect to any shares of its Capital Stock (now or hereafter outstanding) or on any warrants, options or other rights with respect to any such shares of Capital Stock (now or hereafter outstanding) or apply, or permit any of its Subsidiaries to apply, any of its funds, property or assets to the purchase, redemption, sinking fund or other retirement of, or agree or permit any of its Subsidiaries to purchase or redeem, any shares of any class of Capital Stock (now or hereafter outstanding) of such Subsidiary Borrower, or warrants, options or other rights with respect to any such shares of Capital Stock (now or hereafter outstanding) of such Subsidiary Borrower; provided, however, that the Subsidiary Borrowers may (i) make Distributions to the Parent to the extent that it is necessary to permit the Parent to pay taxes based on income and franchise taxes and other similar licensure expenses and other actual and reasonable general administrative costs and expenses attributable to the operations of the Parent (including indemnity obligations payable to directors and officers of the Parent who have acted in good faith), (ii) make Distributions to the Parent to the extent it is necessary to permit the Parent to satisfy a payment demand in respect of a Demand Capitalization Note and (iii) make a Distribution to the Parent to the extent necessary to make a Distribution declared by the Parent (but in no event exceeding the amount of such Distribution permitted to be made by the Parent pursuant to the succeeding clause (b)), so long as, immediately before and after giving effect thereto, no Default shall have occurred and be continuing and the Distribution by the Parent is made at the time the Subsidiary Borrowers make their Distribution; (b) the Parent will not declare, pay or make any Distribution with respect to any shares of its Capital Stock (now or hereafter outstanding) or on any warrants, options or other rights with respect to any such shares of Capital Stock (now or hereafter outstanding) or apply, or permit any of its Subsidiaries to apply, any of its funds, property or assets to the purchase, redemption, sinking fund or other retirement of, or agree or permit any of its Subsidiaries to purchase or redeem, any shares of any class of Capital Stock (now or hereafter outstanding) of the Parent, or warrants, options or other rights with respect to any such shares of Capital Stock (now or hereafter outstanding) of the Parent; provided, however, that the Parent may declare, pay and make cash Distributions to its stockholders in any Fiscal Year, so long as (i) both before and after giving effect to any such payment, no Default shall have occurred and be continuing, (ii) the Parent shall have delivered to the Administrative Agent (A) financial statements prepared on a pro forma basis to give effect to such -96- 105 Distribution for the period of four consecutive Fiscal Quarters ending with the Fiscal Quarter then last ended for which financial statements and the Compliance Certificate relating thereto have been delivered to the Administrative Agent pursuant to Sections 8.1.1 and (B) a certificate of the Parent executed by its chief financial Authorized Officer demonstrating that the financial results reflected in such financial statements would comply with the requirements of Section 8.2.4 for the Fiscal Quarter in which such Distribution is to be made, and (iii) the aggregate amount of such Distribution to be made by the Parent pursuant to this clause (b), when added to the aggregate amount of all such Distributions during the Fiscal Year in which such Distribution would be made, does not exceed the amount set forth below opposite such Fiscal Year Fiscal Year Amount ----------- ------ 1998 Fiscal Year $1,000,000 1999 Fiscal Year and each The lesser of (i) 25% of Fiscal Year thereafter Excess Cash Flow for the 1998 Fiscal Year and (ii) $2,000,000 2000 Fiscal Year The lesser of (i) 25% of Excess Cash Flow for the 1999 Fiscal Year and (ii) $4,000,000 2001 Fiscal Year The lesser of (i) 25% of Excess Cash Flow for the 2000 Fiscal Year and (ii) $6,000,000 2002 Fiscal Year The lesser of (i) 25% of Excess Cash Flow for the 2001 Fiscal Year and (ii) $8,000,000 (c) neither Subsidiary Borrower will permit any of its Subsidiaries to declare, pay or make any Distribution with respect to any shares of Capital Stock (now or hereafter outstanding) of any such Subsidiary (other than (x) with respect to any such shares held by such Subsidiary Borrower or any of its Wholly Owned Subsidiaries and (y) with respect to such shares which are shares of common stock, so long as such Distribution is made on a pro rata basis, consistent with the ownership interests in such shares of common stock, to the owners of such shares of common stock) or apply any of its funds, property or assets to the purchase, redemption, sinking fund or other retirement of, or agree to purchase or redeem, any shares of any class of Capital Stock (now or hereafter outstanding) of any such Subsidiary, or warrants, options or other rights with respect to any such shares of Capital Stock (now or hereafter outstanding) of any such Subsidiary (other than any such shares, warrants, options or other rights held by such Subsidiary Borrower or any of its Wholly Owned Subsidiaries); (d) each Borrower will not, and will not permit any of its Subsidiaries to (i) make any payment or prepayment of principal of any Subordinated Debt (including any reimbursement obligation in respect of a letter of credit) or make any payment of interest on any Subordinated Debt on any day other than the stated, scheduled date for such payment or prepayment set forth in the documents and instruments memorializing such Subordinated Debt, or which would violate the subordination provisions applicable such Subordinated Debt; or -97- 106 (ii) redeem, purchase or defease, any Subordinated Debt; and (e) each Borrower will not, and will not permit any of its Subsidiaries to, make any deposit for any of the foregoing purposes. SECTION 8.2.7. Capital Expenditures, etc. Each Borrower will not, and will not permit any of its Subsidiaries to, make or commit to make Capital Expenditures in any Fiscal Year, except (a) Capital Expenditures for the acquisition of Vehicles and (b) other Capital Expenditures which do not aggregate in excess of $35,000,000 for such Fiscal Year. SECTION 8.2.8. Take or Pay Contracts. Each Borrower will not, and will not permit any of its Subsidiaries to, enter into or be a party to any arrangement for the purchase of materials, supplies, other property or services if such arrangement by its express terms requires that payment be made by such Borrower or such Subsidiary regardless of whether such materials, supplies, other property or services are delivered or furnished to it. SECTION 8.2.9. Consolidation, Merger, etc. Each Borrower will not, and will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge into or with, any other Person, or otherwise enter into or consummate any Business Acquisition not constituting an Investment, except (a) any Subsidiary of the Parent may liquidate or dissolve voluntarily into, and may merge with and into, the Parent or any Wholly Owned Subsidiary of the Parent, and the assets or stock of any Subsidiary of the Parent may be purchased or otherwise acquired by the Parent or any Wholly Owned Subsidiary of the Parent; and (b) so long as no Default has occurred and is continuing or would occur after giving effect thereto, a Subsidiary Borrower or any of its Subsidiaries may enter into or consummate any Permitted Business Acquisition. SECTION 8.2.10. Asset Dispositions, etc. Each Borrower will not, and will not permit any of its Subsidiaries to, sell, issue, transfer, lease, contribute or otherwise convey, or grant options, warrants or other rights with respect to, any property, business or assets of the Parent, any Subsidiary Borrower or any of their respective Subsidiaries (including accounts receivable and Capital Stock) to any Person, unless (a) any such sale, transfer, lease, contribution or conveyance is in the ordinary course of its business (including sales of used Vehicles and the customary franchising activities of the Borrowers) or is permitted by Section 8.2.9; (b) any such issuance is an issuance of Capital Stock of the Parent or of options or warrants in respect of such Capital Stock; (c) (i) (A) any such sale, transfer or conveyance is for not less than the fair market value of the assets so sold, transferred or conveyed (as determined in good faith -98- 107 by the Board of Directors of the Parent or a committee thereof) and (B) in the event the fair market value of such assets exceeds $2,500,000, the determination of such Board or committee is evidenced by a certified written resolution of such Board or committee) and, except in the case of Non-Counted Assets, the consideration received by the relevant Subsidiary Borrower or the relevant Subsidiary of such Subsidiary Borrower in respect thereof consists of at least 80% cash or Cash Equivalent Investments, (ii) any such consideration not consisting of cash or Cash Equivalent Investments (including consideration received in the sale, transfer or conveyance of Non-Counted Assets) shall be an Investment permitted by Section 8.2.5 and (iii) the fair market value of such assets (other than Non-Counted Assets), together with the aggregate fair market value of all other assets (other than Non-Counted Assets) sold, transferred or conveyed pursuant to this clause (c) in the Fiscal Year such assets are sold, transferred or conveyed, does not exceed $5,000,000; provided, however, that no such sale, transfer or conveyance shall be permitted to be made if immediately before or after giving effect thereto, any Default shall have occurred and be continuing; or (d) without limiting the effect in any manner of the provisions of Article IX, any such sale, transfer or conveyance of Vehicles is as a result of an Amortization Event (as defined in the Base Indenture). For purposes hereof, "Non-Counted Assets" means assets sold, transferred or conveyed as part of the sale of the operations conducted on the sites set forth on Schedule V hereto or as part of the sale of the operations conducted at a site previously operated by a franchisee of Dollar or Thrifty or any of their respective Subsidiaries and acquired by any of them pursuant to a Permitted Business Acquisition after the date hereof. SECTION 8.2.11. Modification of Certain Agreements. Each Borrower will not, and will not permit any of its Subsidiaries to, consent to any amendment, supplement or other modification of (a) any of the terms or provisions contained in, or applicable to, the Chrysler Credit Support Documents, other than any amendment, supplement or other modification which would not have an adverse effect on the interests of the Lenders hereunder and under the other Loan Documents (unless otherwise consented to by the Required Lenders) or the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries taken as a whole (unless otherwise consented to by the Required Lenders) or (b) any of the terms or provisions contained in, or applicable to, the Chrysler-Dollar Supply Agreement, the Chrysler-Thrifty Supply Agreement, the Tax Sharing Agreement, the MTN Program Documents and, upon the execution and delivery thereof, the CP Program Documents, or any document or instrument evidencing or applicable to any Subordinated Debt, other than any amendment, supplement or other modification which would not have an adverse effect on the Lenders (unless otherwise consented to by the Administrative Agent), a material adverse effect on the interests of the Lenders hereunder and under the other Loan Documents (unless otherwise consented to by the Required Lenders) or a material adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Parent and its Subsidiaries taken as whole (unless otherwise consented to by the Required Lenders). -99- 108 SECTION 8.2.12. Transactions with Affiliates. Each Borrower will not, and will not permit any of its Subsidiaries to, enter into, or cause, suffer or permit to exist any arrangement or contract with any of its other Affiliates unless such arrangement or contract is fair and equitable to such Borrower or such Subsidiary and is an arrangement or contract of the kind which would be entered into by a prudent Person in the position of such Borrower or such Subsidiary with a Person which is not one of its Affiliates; provided, however, that the foregoing restriction shall not apply to (i) any agreement or arrangement between or among a Borrower and a Wholly Owned Subsidiary of a Borrower that is not otherwise prohibited hereunder and (ii) any agreement or arrangement that provides for the sale of Vehicles from RCFC to a Subsidiary Borrower or any Subsidiary of a Subsidiary Borrower at the higher of the fair market value thereof and the net book value thereof, to the extent such agreement or arrangement is entered into in connection with a structured financing or securitization program. SECTION 8.2.13. Negative Pledges, Restrictive Agreements, etc. Each Borrower will not, and will not permit any of its Subsidiaries to, enter into any agreement (excluding this Agreement and any other Loan Document) prohibiting (a) the creation or assumption of any Lien upon its properties, revenues or assets, whether now owned or hereafter acquired; or (b) the ability of any Subsidiary of any Borrower to make any payments, directly or indirectly, to such Borrower by way of dividends, advances, repayments of loans or advances, reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments, or any other agreement or arrangement which restricts the ability of any such Subsidiary to make any payment, directly or indirectly, to such Borrower; except (i) any indenture or agreement governing Indebtedness permitted by clause (c) of Section 8.2.2 as in effect on the Closing Date and any refinancings thereof permitted by clause (w) of Section 8.2.2; (ii) any agreement governing any Indebtedness permitted by clause (f) (g), (j), (l) or (t) of Section 8.2.2 as to the assets financed with the proceeds of such Indebtedness; (iii) as to any SPC, usual and customary restrictions pursuant to the Organic Documents of such SPC or pursuant to the MTN Program Documents or CP Program Documents; or (iv) usual and customary restrictions pursuant to any agreement relating to any Indebtedness of any Foreign Subsidiary permitted pursuant to clause (i) of Section 8.2.2, such as maintenance of net worth or other balance sheet conditions, provided that such restrictions are agreed to in good faith and, where applicable, based upon reasonable assumptions. -100- 109 SECTION 8.2.14. Ability to Amend; Restrictive Agreements. Each Borrower will not, and will not permit any of its Subsidiaries to, enter into, or accept obligations under, any agreement (a) prohibiting (including subjecting to any condition) the ability of such Borrower or any of its Subsidiaries to amend, supplement or otherwise modify this Agreement or any other Loan Document or (b) containing any provision that would contravene any provision of this Agreement or any other Loan Document. SECTION 8.2.15. Accounting Changes. The Parent will not, and will not permit any of its Subsidiaries to, change its Fiscal Year from twelve consecutive calendar months ending on December 31, except with the consent of the Administrative Agent (which consent shall not be unreasonably withheld, but which consent may be conditioned upon the effectuation of such amendments and other modifications to this Agreement, the other Loan Documents and the Chrysler Credit Support Documents as the Administrative Agent may reasonably request. SECTION 8.2.16. Activities of the Parent. Without limiting the effect of any provision contained in this Article VIII and notwithstanding any implication to the contrary hereunder, the Parent will not engage in any business activity other than (i) its ownership of all the shares of Capital Stock of the Subsidiary Borrowers, RCFC, Dollar Thrifty Funding and any other Person that may become a direct Subsidiary of the Parent in accordance with the provisions hereof to the extent such Person does not conduct a business activity which is one of the principal business activities conducted by Dollar or Thrifty on the date hereof, (ii) its compliance with the obligations applicable to it under the Loan Documents, the Chrysler Credit Support Documents, the MTN Program Documents and the CP Program Documents and (iii) the execution and delivery of guaranties of (A) obligations of Subsidiary Borrowers or Subsidiary Guarantors in respect of the leasing by such Obligors of real or personal property under arrangements which would not, under GAAP, be classified as capitalized leases and (B) other obligations of such Obligors in an aggregate amount not exceeding $20,000,000 at any time. Without limiting the generality of the immediately preceding sentence, the Parent will not (a) create, incur, assume or suffer to exist any Indebtedness (other than Indebtedness under this Agreement or any other Loan Document, any Chrysler Credit Support Document, any such guaranty any Demand Capitalization Note, any intercompany Indebtedness pursuant to clause (o) of Section 8.2.2 or any Subordinated Debt pursuant to clause (u) of Section 8.2.2), (b) create, assume, or suffer to exist any Lien upon, or grant any options or other rights with respect to, any of its revenues, property or other assets, whether now owned or hereafter acquired (other than pursuant to the Loan Documents, the Chrysler Credit Support Documents or any intercompany Indebtedness described in clause (i) of Section 8.2.3), (c) wind-up, liquidate or dissolve itself (or suffer to exist any of the foregoing), or consolidate or amalgamate with or merge into or with any other Person, or convey, sell, transfer, lease or otherwise dispose of all or any part of its assets, in one transaction or a series of transactions, to any Person or Persons, (d) create, incur, assume or suffer to exist any Investment in any Person other than (i) as provided in clause (a), (b), (g) or (j) of Section 8.2.5 and (ii) in respect of any additional equity Investments in a Subsidiary Borrower or any Subsidiary Guarantor or (e) permit to be taken any action that would result in a Change in Control. The Parent agrees not to commence or cause the commencement of any of the actions described in clause (b), (c) or (d) of Section 9.1.9 of this Agreement with respect to any of its Subsidiaries. -101- 110 ARTICLE IX EVENTS OF DEFAULT SECTION 9.1. Listing of Events of Default. Each of the following events or occurrences described in this Section 9.1 shall constitute an "Event of Default". SECTION 9.1.1. Non-Payment of Obligations. Any Borrower or any other Obligor shall (a) default in the payment or prepayment when due of any principal of any Loan, (b) default in the payment when due of any Reimbursement Obligation, or (c) default (and such default shall continue unremedied for a period of three Business Days) in the payment when due of any interest on any Loan, any fee or of any other Obligation. SECTION 9.1.2. Breach of Warranty. Any representation or warranty of any Borrower or any other Obligor made or deemed to be made hereunder or in any other Loan Document executed by it or any other writing or certificate furnished by or on behalf of any Borrower or any other Obligor to either Agent or any Lender for the purposes of or in connection with this Agreement or any such other Loan Document (including any certificates delivered pursuant to Article VI) is or shall be incorrect when made in any material respect. SECTION 9.1.3. Non-Performance of Certain Covenants and Obligations. (a) Any Borrower shall default in the due performance and observance of any of its obligations under Section 8.2, clause (d), (e) or (g) of Section 8.1.1, or Section 8.1.2, 8.1.8 or 8.1.9. (b) Any Borrower shall default in the due performance and observance of any of its obligations under clause (a), (b), (c), (h) or (i) of Section 8.1.1, and such default shall continue unremedied for a period of ten days. SECTION 9.1.4. Non-Performance of Other Covenants and Obligations. Any Obligor shall default in the due performance and observance of any other agreement contained herein or in any other Loan Document executed by it, and such default shall continue unremedied for a period of 30 days after notice thereof shall have been given to the Borrowers by the Administrative Agent or any Lender. SECTION 9.1.5. Default on Other Indebtedness. (a) A default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of any Indebtedness (other than Indebtedness described in Section 9.1.1) of the Parent or any of its Subsidiaries having a principal amount, individually or in the aggregate, in excess of $2,500,000, or a default shall occur in the performance or observance of any obligation or condition with respect to such Indebtedness if the effect of such default is to accelerate the maturity of any such Indebtedness or such default shall continue unremedied for any applicable period of time sufficient to permit the holder or holders of such Indebtedness, or any trustee or agent for such holders, to cause such Indebtedness to become due and payable prior to its expressed maturity (including pursuant to any right of such holder, holders, trustee or agent to -102- 111 require the redemption, repurchase or other acquisition of such Indebtedness prior to its expressed maturity). (b) An Amortization Event (as defined in the Base Indenture) shall have occurred or, following the closing of the CP Program, RCFC shall become unable to finance the purchase of Vehicles pursuant to the CP Program or any similar event shall have occurred with respect to RCFC or any other SPC that would result in such Person being unable to finance the purchase of Vehicles and the Borrowers shall have failed to replace the MTN Program or CP Program, as the case may be, with an alternative source of financing having terms acceptable to the Required Lenders within 30 days of such occurrence. SECTION 9.1.6. Judgments. Any judgment or order for the payment of money in excess of $2,500,000 (to the extent not covered by insurance provided by a carrier that has not disputed coverage) shall be rendered against the Parent or any of its Subsidiaries and either (a) enforcement proceedings shall have been commenced by any creditor upon such judgment or order; or (b) there shall be any period of 20 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect. SECTION 9.1.7. Pension Plans. Any of the following events shall occur with respect to any Pension Plan (a) the institution of any steps by any Borrower, any member of its Controlled Group or any other Person to terminate a Pension Plan if, as a result of such termination, any Borrower or any such member could be required to make a contribution to such Pension Plan, or could reasonably expect to incur a liability or obligation to such Pension Plan, in excess of $1,000,000; or (b) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. SECTION 9.1.8. Change in Control. Any Change in Control shall occur. SECTION 9.1.9. Bankruptcy, Insolvency, etc. The Parent or any of its Subsidiaries or any other Obligor shall (a) become insolvent or generally fail to pay, or admit in writing its inability or unwillingness to pay, debts as they become due; (b) apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for the Parent or any of its Subsidiaries or any other -103- 112 Obligor or any property of any thereof, or make a general assignment for the benefit of creditors; (c) in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for the Parent or any of its Subsidiaries or any other Obligor or for a substantial part of the property of any thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 60 days, provided that each of its Subsidiaries and each other Obligor hereby expressly authorizes the Administrative Agent and each Lender to appear in any court conducting any relevant proceeding during such 60-day period to preserve, protect and defend their rights under the Loan Documents; (d) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Parent or any of its Subsidiaries or any other Obligor, and, if any such case or proceeding is not commenced by the Parent or such Subsidiary or such other Obligor, such case or proceeding shall be consented to or acquiesced in by the Parent or such Subsidiary or such other Obligor or shall result in the entry of an order for relief or shall remain for 60 days undismissed, provided that the Parent, such Subsidiary and each other Obligor hereby expressly authorizes each Agent and each Lender to appear in any court conducting any such case or proceeding during such 60-day period to preserve, protect and defend their rights under the Loan Documents; or (e) take any action authorizing, or in furtherance of, any of the foregoing. SECTION 9.1.10. Impairment of Security, etc. Any Loan Document, or any Lien granted thereunder, shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of any Obligor party thereto; any Borrower or any other Obligor shall, directly or indirectly, contest in any manner such effectiveness, validity, binding nature or enforceability; or any Lien securing any Obligation shall, in whole or in part, cease to be a perfected first priority Lien, subject only to those exceptions expressly permitted by such Loan Document. SECTION 9.2. Action if Bankruptcy. If any Event of Default described in clauses (a) through (d) of Section 9.1.9 shall occur, the Commitments (if not theretofore terminated) shall automatically terminate and the outstanding principal amount of all outstanding Loans and all other Obligations shall automatically be and become immediately due and payable and each Borrower shall immediately comply with its obligations under Section 4.7, in each case, without notice or demand. SECTION 9.3. Action if Other Event of Default. If any Event of Default (other than any Event of Default described in clauses (a) through (d) of Section 9.1.9) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Administrative Agent, upon the direction of the Required Lenders, shall by notice to the Borrowers declare all or any portion of -104- 113 the outstanding principal amount of the Loans and other Obligations to be due and payable and/or the Commitments (if not theretofore terminated) to be terminated and/or demand immediate compliance of each Borrower with its obligations under Section 4.7, whereupon the full unpaid amount of such Loans and other Obligations which shall be so declared due and payable shall be and become immediately due and payable, without further notice, demand or presentment, the Commitments shall terminate and/or, as the case may be, each Borrower shall be obligated to comply immediately with its obligations under Section 4.7. ARTICLE X BORROWERS GUARANTY SECTION 10.1. Guaranty. Each Borrower hereby absolutely, unconditionally and irrevocably (a) guarantees (in such capacity, a "Borrower Guarantor") the full and punctual payment when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise, of all Obligations of each other Borrower (in such capacity, a "Borrower Debtor") now or hereafter existing, whether for principal, interest, fees, expenses or otherwise (including all such amounts which would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. ss.362(a), and the operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506(b)), and (b) indemnifies and holds harmless each Secured Party and each holder of a Note for any and all costs and expenses (including reasonable attorneys' fees and expenses) incurred by such Secured Party or such holder, as the case may be, in enforcing any rights under the guaranty set forth in this Article X; provided, however, that in the case of the guaranty made by each of Dollar and Thrifty, Dollar or Thrifty, as the case may be, shall be liable under the guaranty set forth in this Article X for the maximum amount of such liability that can be hereby incurred without rendering the guaranty set forth in this Article X, as it relates to Dollar or Thrifty, as the case may be, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount. The guaranty set forth in this Article X constitutes a guaranty of payment when due and not of collection, and each Borrower Guarantor specifically agrees that it shall not be necessary or required that any Secured Party or any holder of any Note exercise any right, assert any claim or demand or enforce any remedy whatsoever against any Borrower Debtor or any other Obligor (or any other Person) before or as a condition to the obligations of such Borrower Guarantor under the guaranty set forth in this Article X. SECTION 10.2. Acceleration of Borrowers Guaranty. Each Borrower Guarantor agrees that, if an Event of Default of the nature set forth in Section 9.1.9 shall occur at a time when any of the Obligations of a Borrower Debtor may not then be due and payable, such Borrower -105- 114 Guarantor agrees that it will pay to the Administrative Agent for the account of the Secured Parties forthwith the full amount which would be payable under the guaranty set forth in this Article X by such Borrower Guarantor if all such Obligations were then due and payable. SECTION 10.3. Guaranty Absolute, etc. The guaranty set forth in this Article X shall in all respects be a continuing, absolute, unconditional and irrevocable guaranty of payment, and shall remain in full force and effect until all Obligations of each Borrower and each other Obligor have been paid in full in cash, all obligations of each Borrower Guarantor under the guaranty set forth in this Article X shall have been paid in full in cash, all Letters of Credit have been terminated or expired and all Commitments shall have terminated. Each Borrower Guarantor guarantees that the Obligations of each Borrower Debtor will be paid strictly in accordance with the terms of this Agreement and each other Loan Document under which they arise, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Secured Party or any holder of any Note with respect thereto. The liability of each Borrower Guarantor under the guaranty set forth in this Article X shall be absolute, unconditional and irrevocable irrespective of: (a) any lack of validity, legality or enforceability of this Agreement, any Note or any other Loan Document; (b) the failure of any Secured Party or any holder of any Note (i) to assert any claim or demand or to enforce any right or remedy against any Borrower Debtor, any other Obligor or any other Person (including any other guarantor (including such Borrower Guarantor)) under the provisions of this Agreement, any Note, any other Loan Document or otherwise, or (ii) to exercise any right or remedy against any other guarantor (including such Borrower Guarantor) of, or collateral securing, any Obligations of any Borrower Debtor; (c) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations of any Borrower Debtor, or any other extension, compromise or renewal of any Obligation of the any Borrower Debtor; (d) any reduction, limitation, impairment or termination of any Obligations of any Borrower Debtor for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and such Borrower Guarantor hereby waives any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Obligations of any Borrower Debtor or otherwise; -106- 115 (e) any amendment to, rescission, waiver, or other modification of, or any consent to departure from, any of the terms of this Agreement, any Note or any other Loan Document; (f) any addition, exchange, release, surrender or non-perfection of any collateral, or any amendment to or waiver or release or addition of, or consent to departure from, any other guaranty, held by any Secured Party or any holder of any Note securing any of the Obligations of any Borrower Debtor; or (g) any other circumstance which might otherwise constitute a defense available to, or a legal or equitable discharge of, any Borrower Debtor, any surety or any guarantor. SECTION 10.4. Reinstatement, etc. Each Borrower Guarantor agrees that the guaranty set forth in this Article X shall continue to be effective or be reinstated, as the case may be, if at any time any payment (in whole or in part) of any of the Obligations is rescinded or must otherwise be restored by any Secured Party or any holder of any Note, upon the insolvency, bankruptcy or reorganization of any Borrower Debtor or otherwise, all as though such payment had not been made. SECTION 10.5. Waiver, etc. Each Borrower Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations of any Borrower Debtor and the guaranty set forth in this Article X and any requirement that the Administrative Agent, any other Secured Party or any holder of any Note protect, secure, perfect or insure any security interest or Lien, or any property subject thereto, or exhaust any right or take any action against any Borrower Debtor, any other Obligor or any other Person (including any other guarantor) or entity or any collateral securing the Obligations of any Borrower Debtor. SECTION 10.6. Postponement of Subrogation, etc. Each Borrower Guarantor agrees that it will not exercise any rights which it may acquire by way of rights of subrogation under the guaranty set forth in this Article X, by any payment made under the guaranty set forth in this Article X or otherwise, until the prior payment in full in cash of all Obligations of each Borrower Debtor and each other Obligor, the termination or expiration of all Letters of Credit and the termination of all Commitments. Any amount paid to any Borrower Guarantor on account of any such subrogation rights prior to the payment in full in cash of all Obligations of each Borrower Debtor and each other Obligor shall be held in trust for the benefit of the Secured Parties and each holder of a Note and shall immediately be paid to the Administrative Agent for the benefit of the Secured Parties and each holder of a Note and credited and applied against the Obligations of each Borrower Debtor and each other Obligor, whether matured or unmatured, in accordance with the terms of this Agreement; provided, however, that if (a) such Borrower Guarantor has made payment to the Secured Parties and each holder of a Note of all or any part of the Obligations of each Borrower Debtor, and -107- 116 (b) all Obligations of each Borrower and each other Obligor have been paid in full in cash, all Letters of Credit have been terminated or expired and all Commitments have been permanently terminated, each Secured Party and each holder of a Note agrees that, at such Borrower Guarantor's request, the Administrative Agent, on behalf of the Secured Parties and the holders of the Notes, will execute and deliver to the Parent appropriate documents (without recourse and without representation or warranty) necessary to evidence the transfer by subrogation to such Borrower Guarantor of an interest in the Obligations of the applicable Borrower Debtor resulting from such payment by such Borrower Guarantor. In furtherance of the foregoing, for so long as any Obligations or Commitments remain outstanding, such Borrower Guarantor shall refrain from taking any action or commencing any proceeding against such Borrow Debtor (or its successors or assigns, whether in connection with a bankruptcy proceeding or otherwise) to recover any amounts in the respect of payments made under the guaranty set forth in this Article X to any Secured Party or any holder of a Note. SECTION 10.7. Right of Contribution. Each Borrower Guarantor hereby agrees that to the extent that a Borrower Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Borrower Guarantor shall be entitled to seek and receive contribution from and against any other Borrower Guarantor hereunder who has not paid its proportionate share of such payment. Each Borrower Guarantor's right of contribution shall be subject to the terms and conditions of Section 10.6. The provisions of this Section 10.7 shall in no respect limit the obligations and liabilities of any Borrower Guarantor to the Administrative Agent and each other Secured Party, and each Borrower Guarantor shall remain liable to the Administrative Agent and each other Secured Party for the full amount guaranteed by such Borrower Guarantor hereunder. SECTION 10.8. Successors, Transferees and Assigns; Transfers of Notes, etc. The guaranty set forth in this Article X shall: (a) be binding upon each Borrower Guarantor, and its successors, transferees and assigns; and (b) inure to the benefit of and be enforceable by the Administrative Agent and each other Secured Party. Without limiting the generality of the foregoing clause (b), any Lender may assign or otherwise transfer (in whole or in part) any Note or Credit Extension held by it to any other Person or entity, and such other Person or entity shall thereupon become vested with all rights and benefits in respect thereof granted to such Lender under any Loan Document (including the guaranty set forth in this Article X) or otherwise, subject, however, to any contrary provisions in such assignment or transfer, and to the provisions of Section 12.11 and Article XI. -108- 117 ARTICLE XI THE AGENTS SECTION 11.1. Actions. Each Lender hereby appoints Credit Suisse First Boston as its Administrative Agent under and for purposes of this Agreement, the Notes and each other Loan Document. Each Lender authorizes the Administrative Agent to act on behalf of such Lender under this Agreement, the Notes and each other Loan Document and, in the absence of other written instructions from the Required Lenders received from time to time by the Administrative Agent (with respect to which the Administrative Agent agrees that it will comply, except as otherwise provided in this Section or as otherwise advised by counsel in order to avoid contravention of applicable law), to exercise such powers hereunder and thereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof, together with such powers as may be reasonably incidental thereto. Each Lender hereby indemnifies (which indemnity shall survive any termination of this Agreement) each Agent pro rata according to such Lender's Percentage, from and against any and all liabilities, obligations, losses, damages, claims, costs or expenses of any kind or nature whatsoever which may at any time be imposed on, incurred by, or asserted against, such Agent in any way relating to or arising out of this Agreement, the Notes and any other Loan Document, including reasonable attorneys' fees, and as to which such Agent is not reimbursed by the Borrowers; provided, however, that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, claims, costs or expenses which are determined by a court of competent jurisdiction in a final proceeding to have resulted solely from such Agent's gross negligence or willful misconduct. No Agent shall be required to take any action hereunder, under the Notes or under any other Loan Document, or to prosecute or defend any suit in respect of this Agreement, the Notes or any other Loan Document, unless such Agent is indemnified hereunder to its satisfaction. If any indemnity in favor of either Agent shall be or become, in such Agent's determination, inadequate, such Agent may call for additional indemnification from the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given. SECTION 11.2. Funding Reliance, etc. Unless the Administrative Agent shall have been notified by telephone, confirmed in writing, by any Lender by 12:00 noon (New York City, New York time) on the Business Day of a Borrowing, with respect to ABR Loans, and by 5:00 p.m. (New York City, New York time) on the Business Day prior to a Borrowing, with respect to Eurodollar Loans, that such Lender will not make available the amount which would constitute its Percentage of such Borrowing on the date specified therefor, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent and, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount. If and to the extent that such Lender shall not have made such amount available to the Administrative Agent, such Lender and the applicable Borrower severally agree to repay the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date the Administrative Agent made such amount available to such Borrower to the date such amount is repaid to the Administrative Agent, at the interest rate applicable at the time to Loans comprising such Borrowing (in the case of such Borrower) and (in the case of the Lender), at the Federal Funds Rate for the first two Business -109- 118 Days after which such amount has not been repaid, and thereafter at the interest rate applicable to Loans comprising such Borrowing. SECTION 11.3. Exculpation. Neither Agent nor any of their respective directors, officers, employees or agents shall be liable to any Lender for any action taken or omitted to be taken by it under this Agreement or any other Loan Document, or in connection herewith or therewith, except for its own willful misconduct or gross negligence, nor responsible for any recitals or warranties herein or therein, nor for the effectiveness, enforceability, validity or due execution of this Agreement or any other Loan Document, nor for the creation, perfection or priority of any Liens purported to be created by any of the Loan Documents, or the validity, genuineness, enforceability, existence, value or sufficiency of any collateral security, nor to make any inquiry respecting the performance by any Borrower of its obligations hereunder or under any other Loan Document. Any such inquiry which may be made by either Agent shall not obligate it to make any further inquiry or to take any action. Each Agent shall be entitled to rely upon advice of counsel concerning legal matters and upon any notice, consent, certificate, statement or writing which such Agent believes to be genuine and to have been presented by a proper Person. SECTION 11.4. Successor. The Administrative Agent may resign as such at any time upon at least 30 days' prior written notice to the Borrowers and all Lenders. If the Administrative Agent at any time shall resign, the Required Lenders may (with the consent of the Borrowers so long as a Default has not occurred and is not then continuing, such consent not to be unreasonably withheld or delayed) appoint another Lender as a successor Administrative Agent which shall thereupon become the Administrative Agent hereunder. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent's giving written notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be one of the Lenders or a commercial banking institution organized under the laws of the U.S. (or any State thereof) or a U.S. branch or agency of a commercial banking institution, and having a combined capital and surplus of at least $500,000,000. Upon the acceptance of any appointment as the Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall be entitled to receive from the retiring Administrative Agent such documents of transfer and assignment as such successor Administrative Agent may reasonably request, and shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Administrative Agent's resignation hereunder as the Administrative Agent, the provisions of (a) this Article XI shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent under this Agreement; and (b) Section 11.3 and Section 11.4 shall continue to inure to its benefit. -110- 119 SECTION 11.5. Credit Extensions by Agents. Each Agent shall have the same rights and powers with respect to (x) the Loans made by it in its capacity as a Lender or any of its Affiliates, (y) the Notes held by it or any of its Affiliates, and (z) its participating interests in the Letters of Credit as any other Lender and may exercise the same as if it were not an Agent. Each Agent and its Affiliates may accept deposits from, lend money to, and generally engage in any kind of business with any Borrower or any Subsidiary or Affiliate of any Borrower as if Credit Suisse First Boston and Chase were not Agents hereunder. SECTION 11.6. Credit Decisions. Each Lender acknowledges that it has, independently of each Agent and each other Lender, and based on such Lender's review of the financial information of the Borrowers, this Agreement, the other Loan Documents (the terms and provisions of which being satisfactory to such Lender) and such other documents, information and investigations as such Lender has deemed appropriate, made its own credit decision to extend its Commitments. Each Lender also acknowledges that it will, independently of each Agent and each other Lender, and based on such other documents, information and investigations as it shall deem appropriate at any time, continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available to it under this Agreement or any other Loan Document. SECTION 11.7. Collateral Agent. Each Lender consents and agrees to all of the terms and provisions of the Intercreditor Agreement and the other Security Documents, as the same may be in effect from time to time or may be amended, supplemented or otherwise modified from time to time in accordance with the provisions of the Security Documents and this Agreement, and authorizes and directs the Collateral Agent (as defined in the Intercreditor Agreement) to act as collateral agent pursuant to the Intercreditor Agreement (including pursuant to the appointment thereof under Section ___ of the Intercreditor Agreement). SECTION 11.8. Copies, etc. The Administrative Agent shall give prompt notice to each Lender of each notice or request required or permitted to be given to the Administrative Agent by any Borrower pursuant to the terms of this Agreement (unless concurrently delivered to the Lenders by such Borrower). The Administrative Agent will distribute to each Lender each document or instrument received for its account and copies of all other communications received by the Administrative Agent from any Borrower for distribution to the Lenders by the Administrative Agent in accordance with the terms of this Agreement or any other Loan Document. ARTICLE XII MISCELLANEOUS PROVISIONS SECTION 12.1. Waivers, Amendments, etc. The provisions of this Agreement and of each other Loan Document may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by each Borrower and the -111- 120 Required Lenders; provided, however, that no such amendment, modification or waiver which would: (a) modify any requirement hereunder that any particular action be taken by all the Lenders or by the Required Lenders shall be effective unless consented to by each Lender; (b) modify this Section 12.1, change the definition of "Required Lenders", increase the Commitment Amount or the Percentage of any Lender, reduce any fees described in Article III (other than any fee payable to the Administrative Agent solely for its own account or the Issuer solely for its own account), release all or substantially all of the collateral, except as otherwise specifically provided in any Loan Document, release any Guarantor from its obligations under its Guaranty, or extend the Commitment Termination Date shall be made without the consent of each Lender; (c) extend the due date for, or reduce the amount of, (i) any scheduled repayment or prepayment of principal of or interest on any Loan (or reduce the principal amount of or rate of interest on any Loan) or (ii) any repayment of a Reimbursement Obligation (or reduce the amount of or rate of interest on any Reimbursement Obligation) shall be made without the consent of each Lender; (d) affect adversely the rights or obligations of the Issuer qua the Issuer shall be made without the consent of the Issuer; or (e) affect adversely the rights or obligations of the Administrative Agent qua the Administrative Agent shall be made without the consent of the Administrative Agent. Notwithstanding the foregoing provisions of this Section 12.1, the Administrative Agent and the Borrowers may, in connection with implementation of the CP Program, without the consent of any Lender, enter into any amendment, supplement or other modification to this Agreement or any other Loan Document, in form and substance satisfactory to the Administrative Agent, to cure any ambiguity or to correct or supplement any provision in this Agreement or any other Loan Document that may be inconsistent with any provision applicable to the CP Program as described in that certain Confidential Memorandum dated November 1997 of the Borrowers; provided, however, that (i) any such action shall not have an adverse effect on the interests of the Lenders and (ii) a copy of any such amendment, supplement or other modification shall be furnished to the Lenders or the Issuer in accordance with the notice provisions hereof not later than five days prior to the execution thereof by the Administrative Agent. No failure or delay on the part of either Agent, the Issuer, any Lender or the holder of any Note in exercising any power or right under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on any Borrower in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by either Agent, the Issuer, any Lender or the holder of any Note under this Agreement or any other Loan Document shall, except as may be otherwise -112- 121 stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder. SECTION 12.2. Notices. All notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing or by facsimile and addressed, delivered or transmitted to such party at its address or facsimile number set forth in the case of any Borrower or any Agent, below its signature hereto or in the case of any Lender, in Schedule II hereto or in a Lender Assignment Agreement or at such other address or facsimile number as may be designated by such party in a notice to the other parties. Each notice shall be deemed to have been duly given or made when delivered, or five Business Days after being deposited in the mail, postage prepaid and return receipt requested, or, in the case of facsimile notice, when electronic confirmation thereof is received by the transmitter, except that notices pursuant to Article II, III, IV or XI to the Administrative Agent shall not be effective until actually received by the Administrative Agent, and notices pursuant to Article IV to the Issuer shall not be effective until actually received by the Issuer. SECTION 12.3. Payment of Costs and Expenses. The Borrowers, jointly and severally, agree to pay on demand all expenses of each Agent and each Arranger (including the reasonable fees and out-of-pocket expenses of counsel to the Agents and of local counsel, if any, who may be retained by counsel to the Agents) in connection with (a) the negotiation, preparation, execution and delivery of this Agreement and of each other Loan Document, including schedules and exhibits, and any amendments, waivers, consents, supplements or other modifications to this Agreement or any other Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated; (b) the filing, recording, refiling or rerecording of any Loan Document and/or any Uniform Commercial Code financing statements relating thereto and all amendments, supplements, amendments and restatements and other modifications to any thereof and any and all other documents or instruments of further assurance required to be filed or recorded or refiled or rerecorded by the terms hereof or the terms of any Loan Document; and (c) the preparation and review of the form of any document or instrument relevant to this Agreement or any other Loan Document. The Borrowers further, jointly and severally, agree to pay, and to save the Agents, the Arrangers, the Issuer and the Lenders harmless from all liability for, any stamp, issuance, excise or other similar taxes which may be payable in connection with the execution or delivery of this Agreement, the Credit Extensions hereunder, the issuance of the Notes, Letters of Credit or any other Loan Documents. The Borrowers also, jointly and severally, agree to reimburse each Agent, the Issuer and each Lender upon demand for all reasonable out-of-pocket expenses (including reasonable attorneys' fees and legal expenses) incurred by such Agent or such Lender -113- 122 in connection with (x) the negotiation of any restructuring or "work-out", whether or not consummated, of any Obligations and (y) the enforcement of any Obligations. SECTION 12.4. Indemnification. In consideration of the execution and delivery of this Agreement by each Agent, each Arranger, the Issuer and each Lender and the extension of the Commitments, the Borrowers hereby, jointly and severally, indemnify, exonerate and hold each Agent, each Arranger, the Issuer and each Lender and each of their respective officers, directors, employees and agents (collectively, the "Indemnified Parties") free and harmless from and against any and all actions, causes of action, suits, losses, costs, liabilities and damages, and expenses incurred in connection therewith (irrespective of whether any such Indemnified Party is a party to the action for which indemnification hereunder is sought), including reasonable attorneys' fees and disbursements whether incurred in connection with actions between or among the parties hereto or the parties hereto and third parties (collectively, the "Indemnified Liabilities"), incurred by the Indemnified Parties or any of them as a result of, or arising out of, or relating to (a) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Credit Extension, including all Indemnified Liabilities arising in connection with the Transaction or the use of any Letter of Credit; (b) the entering into and performance of this Agreement and any other Loan Document by any of the Indemnified Parties (including any action brought by or on behalf of any Borrower as the result of any determination by the Required Lenders pursuant to Article VI not to fund any Credit Extension; provided that any such action is resolved by final judgment of a court of competent jurisdiction in favor of such Indemnified Party); (c) any investigation, litigation or proceeding related to any acquisition or proposed acquisition by the Parent or any of its Subsidiaries of all or any portion of the stock or assets of any Person, whether or not such Agent, such Arranger, the Issuer or such Lender is party thereto; (d) any investigation, litigation or proceeding related to any environmental cleanup, audit, compliance or other matter relating to the protection of the environment or the Release by the Parent or any of its Subsidiaries of any Hazardous Material; or (e) the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, discharging or releases from, any real property owned or operated by the Parent or any Subsidiary thereof of any Hazardous Material (including any losses, liabilities, damages, injuries, costs, expenses or claims asserted or arising under any Environmental Law), regardless of whether caused by, or within the control of, the Parent or such Subsidiary, except for any such Indemnified Liabilities arising for the account of a particular Indemnified Party by reason of the relevant Indemnified Party's gross negligence or willful misconduct or a -114- 123 breach by such Indemnified Party (or its agents or employees or any other Person under its control) of any of its obligations under this Agreement, as determined by a final judgment of a court of competent jurisdiction. If and to the extent that the foregoing undertaking may be unenforceable for any reason, each Borrower hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. SECTION 12.5. Survival. The obligations of each Borrower under Sections 4.9, 5.3, 5.4, 5.5, 5.6, 12.3 and 12.4, and the obligations of the Lenders under Section 11.1, shall in each case survive any assignment from one Lender to another and any termination of this Agreement, the payment in full of all Obligations and the termination of all Commitments. The representations and warranties made by each Obligor in this Agreement and in each other Loan Document shall survive the execution and delivery of this Agreement and each such other Loan Document. SECTION 12.6. Severability. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction. SECTION 12.7. Headings. The various headings of this Agreement and of each other Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or such other Loan Document or any provisions hereof or thereof. SECTION 12.8. Execution in Counterparts, Effectiveness, etc. This Agreement may be executed by the parties hereto in several counterparts, each of which shall constitute together but one and the same agreement. This Agreement shall become effective when counterparts hereof executed on behalf of each Borrower, each Lender and the Administrative Agent (or notice thereof satisfactory to the Administrative Agent) shall have been received by the Administrative Agent. SECTION 12.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. This Agreement, the Fee Letter, the Notes and the other Loan Documents constitute the entire understanding among the parties hereto with respect to the subject matter hereof and supersede any prior agreements, written or oral, with respect thereto. SECTION 12.10. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that: -115- 124 (a) no Borrower may assign or transfer either of their respective rights or obligations hereunder without the prior written consent of the Administrative Agent and all of the Lenders, except permitted pursuant to clause (a) of Section 8.2.9 provided that, in the event of any such transaction, the Administrative Agent shall have received such supplements or other modifications to this Agreement and the other Loan Documents as it may reasonably request to confirm the Obligations of such Borrower and the other Obligors); and (b) the rights of sale, assignment and transfer of the Lenders are subject to Section 12.11. SECTION 12.11. Sale and Transfer of Loans and Notes; Participations in Loans and Notes. Each Lender may assign, or sell participations in, its Loans, Letters of Credit and Commitments to one or more other Persons in accordance with this Section 12.11. SECTION 12.11.1. Assignments. Any Lender, (a) with the written consents of each Borrower, the Issuer and the Administrative Agent (which consents shall not be unreasonably delayed or withheld and which consent, in the case of such Borrower, (i) shall be deemed to have been given in the absence of a written notice delivered by such Borrower to the Administrative Agent, on or before the fifth Business Day after receipt by such Borrower of such Lender's request for consent, stating, in reasonable detail, the reasons why such Borrower proposes to withhold such consent and (ii) shall not be required if an Event of Default has occurred and is then continuing) may at any time assign and delegate to one or more Eligible Assignees, and (b) with notice to the Borrowers, the Issuer and the Administrative Agent, but without the consent of any Borrower, the Issuer or the Administrative Agent, may assign and delegate to any of its Affiliates which is an Eligible Assignee or to any other Lender (each assignee to whom such assignment and delegation is to be made, being hereinafter referred to as an "Assignee Lender"), all or any fraction of such Lender's total Loans, participations in Letter of Credit Outstandings and Commitments (which assignment and delegation shall be of a constant, and not a varying, percentage of all the assigning Lender's Loans and Commitments) in a minimum aggregate amount equal to the lesser of $5,000,000 and the aggregate amount of such assigning Lender's Loans, participation in Letter of Credit Outstanding and Commitments; provided, however, that, after giving effect to such assignment, the assigning Lender shall have Commitments, participations in Letter of Credit Outstandings and Loans aggregating at least $5,000,000 or no such Commitments, participations and Loans; provided further, however, that any such Assignee Lender will comply, if applicable, with the provisions contained in the last sentence of Section 5.6; provided further, however, that, each Borrower, the Issuer and the Administrative Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned and delegated to an Assignee Lender until -116- 125 (i) written notice of such assignment and delegation, together with payment instructions, addresses and related information with respect to such Assignee Lender, shall have been given to the Borrowers, the Issuer and the Administrative Agent by such assigning Lender and such Assignee Lender, (ii) such Assignee Lender shall have executed and delivered to the Borrowers, the Issuer and the Administrative Agent a Lender Assignment Agreement, accepted by the Administrative Agent, and (iii) the processing fees described below shall have been paid. From and after the date that the Administrative Agent accepts such Lender Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to have become a party hereto and to the extent that rights and obligations hereunder have been assigned and delegated to such Assignee Lender in connection with such Lender Assignment Agreement, shall have the rights and obligations of a Lender hereunder and under the other Loan Documents, and (y) the assigning Lender, to the extent that rights and obligations hereunder have been assigned and delegated by it in connection with such Lender Assignment Agreement, shall be released from its obligations hereunder and under the other Loan Documents. Within five Business Days after its receipt of notice that the Administrative Agent has received an executed Lender Assignment Agreement, each Borrower shall, to the extent requested, execute and deliver to the Administrative Agent (for delivery to the relevant Assignee Lender) new Notes evidencing such Assignee Lender's assigned Loans and Commitments and, if the assigning Lender has retained Loans and Commitments hereunder which are evidenced by any Notes, replacement Notes in the principal amount of the Loans and Commitments retained by the assignor Lender hereunder (such Notes to be in exchange for, but not in payment of, those Notes then held by such assignor Lender). Each such Note shall be dated the date of the predecessor Notes. The assignor Lender shall mark the predecessor Notes "exchanged" and deliver them to each applicable Borrower. Accrued interest on that part of the principal comprising any assigned Loans, and accrued fees, shall be paid as provided in the Lender Assignment Agreement. Accrued interest on that part of the principal of any Loans not assigned shall be paid to the assignor Lender. Accrued interest and accrued fees shall be paid at the same time or times provided in this Agreement. Such assigning Lender must also pay a processing fee to the Administrative Agent upon delivery of any Lender Assignment Agreement in the amount of $3,500. Any attempted assignment and delegation not made in accordance with this Section 12.11.1 shall be null and void. Notwithstanding any other provision set forth in this Agreement, any Lender may at any time create a security interest in all or any portion of its rights under this Agreement (including the Loans owing to it and the Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the F.R.S. Board; provided, however, the obligations of such Lender under this Agreement or under any other Loan Document shall not be delegated or assigned pursuant to any foreclosure under such pledge without the consents of each Borrower, the Administrative Agent and the Issuer. -117- 126 The Borrowers hereby designate the Administrative Agent to serve as the Borrowers' agent, solely for the purpose of this paragraph, to maintain a register (the "Register") on which the Administrative Agent will record each Lender's Loan Commitment, the Loans made by each Lender, and each repayment in respect of the principal amount of the Loans of each Lender and annexed to which the Administrative Agent shall retain a copy of each Lender Assignment Agreement delivered to the Administrative Agent pursuant to this Section 12.11.1. Failure to make any recordation, or any error in such recordation, shall not affect the Borrowers obligations in respect of such Loans. The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrowers, the Administrative Agent and the Lenders shall treat each Person in whose name a Loan is registered as the owner thereof for all purposes of this Agreement, notwithstanding notice or any provision herein to the contrary. A Lender's Loan Commitment and the Loans made pursuant thereto may be assigned or otherwise transferred in whole or in part only by registration of such assignment or transfer in the Register. Any assignment or transfer of a Lender's Loan Commitment or the Loans made pursuant thereto shall be registered in the Register only upon delivery to the Administrative Agent of a Lender Assignment Agreement duly executed by the assignor thereof. No assignment or transfer of a Lender's Loan Commitment or the Loans made pursuant thereto shall be effective unless such assignment or transfer shall have been recorded in the Register by the Administrative Agent as provided in this Section. SECTION 12.11.2. Participations. Any Lender may at any time sell to one or more commercial banks or other financial institutions (each of such commercial banks and other financial institutions being herein called a "Participant") participating interests (or a sub-participating interest, in the case of a Lender's participating interest in a Letter of Credit) in any of the Loans, Commitments, or other interests of such Lender hereunder; provided, however, that (a) no participation or sub-participation contemplated in this Section 12.11 shall relieve such Lender from its Commitments or its other obligations hereunder or under any other Loan Document, (b) such Lender shall remain solely responsible for the performance of its Commitments and such other obligations, (c) each Borrower and each other Obligor and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and each of the other Loan Documents, (d) no Participant, unless such Participant is an Affiliate of such Lender, or is itself a Lender, shall be entitled to require such Lender to take or refrain from taking any action hereunder or under any other Loan Document, except that such Lender may agree with any Participant that such Lender will not, without such Participant's consent, take any actions of the type described in clause (b) or (c) of Section 12.1, -118- 127 (e) no Borrower shall be required to pay any amount under Section 5.6 that is greater than the amount which it would have been required to pay had no participating interest been sold, and (f) such Lender shall comply with any obligation to withhold taxes or any filing or reporting requirements imposed under applicable law relating to such Participant and the Borrowers and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such matters. Each Borrower acknowledges and agrees that each Participant, for purposes of Sections 5.3, 5.4, 5.5, 5.6 (subject to clause (e) above) 5.8, 5.9, 12.3 and 12.4, shall be considered a Lender; provided, that no Participant shall be entitled to receive any greater payment under Section 5.3, 5.4 or 5.5 than the Lender that transferred such rights to such Participant would have been entitled to receive with respect to such rights, unless such transfer is made with a Borrower's prior written consent. SECTION 12.12. Other Transactions. Nothing contained herein shall preclude either Agent or any other Lender from engaging in any transaction, in addition to those contemplated by this Agreement or any other Loan Document, with any Borrower or any of its Affiliates in which such Borrower or such Affiliate is not restricted hereby from engaging with any other Person. SECTION 12.13. Independence of Covenants. All covenants contained in this Agreement and each other Loan Document shall be given independent effect such that, in the event a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or be otherwise within the limitations of, another covenant shall not, unless expressly so provided in such first covenant, avoid the occurrence of a Default or an Event of Default if such action is taken or such condition exists. SECTION 12.14. Confidentiality. The Agents, the Issuer and the Lenders shall hold all non-public information provided to them by the Parent or any of its Subsidiaries pursuant to or in connection with this Agreement in accordance with their customary procedures for handling confidential information of this nature, but may make disclosure to any of their examiners, regulators (including the National Association of Insurance Commissioners), Affiliates, outside auditors, counsel and other professional advisors in connection with this Agreement or any other Loan Document or as reasonably required by any potential bona fide transferee, participant or assignee, or in connection with the exercise of remedies under a Loan Document, or as requested by any governmental agency or representative thereof or pursuant to legal process; provided, however, that (a) unless specifically prohibited by applicable law or court order, each Agent, the Issuer and each Lender shall promptly notify the Borrowers of any request by any governmental agency or representative thereof (other than any such request in connection with an examination of the financial condition of such Agent, the Issuer or such Lender by such governmental agency) for disclosure of any such non-public information and, where practicable, prior to disclosure of such information; (b) prior to any such disclosure pursuant to this Section 12.14, each Agent, the Issuer and each Lender shall require any such bona fide transferee, participant and assignee receiving a disclosure of non-public information to agree, for the benefit of the Parent and its Subsidiaries, in writing (i) to be bound by this Section 12.14; and (ii) to require such Person to require any other Person to whom such Person discloses such non-public information to be similarly bound by this Section 12.14; and (c) except as may be required by an -119- 128 order of a court of competent jurisdiction and to the extent set forth therein, no Lender shall be obligated or required to return any materials furnished by the Parent or any of its Subsidiary. SECTION 12.15. Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS OR ANY BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH SUCH PERSON MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO SUCH PERSON OR THE PROPERTY OF SUCH PERSON, EACH BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF THE OBLIGATIONS OF SUCH PERSON UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. SECTION 12.16. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT, THE LENDERS AND EACH BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE -120- 129 ADMINISTRATIVE AGENT, THE LENDERS OR ANY BORROWER. EACH BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT. [REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK] -121- 130 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written. DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. By: --------------------------------- Name: Title: Address: 5330 East 31st Street Tulsa, OK 74135 Facsimile No.: (918) 669-2934 Attention: DOLLAR RENT A CAR SYSTEMS, INC. By: --------------------------------- Name: Title: Address: 5330 East 31st Street Tulsa, OK 74135 Facsimile No.: (918) 669-3001 Attention: -122- 131 THRIFTY RENT-A-CAR SYSTEM, INC. By: --------------------------------- Name: Title: Address: 5330 East 31st Street Tulsa, OK 74135 Facsimile No.: (918) 669-2596 Attention: CREDIT SUISSE FIRST BOSTON, as the Administrative Agent and as an Arranger By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: Address: Eleven Madison Avenue 20th Floor New York, NY 10010-3629 Facsimile No.: Attention: -123- 132 CREDIT SUISSE FIRST BOSTON, as Issuer By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: THE CHASE MANHATTAN BANK, as the Syndication Agent By: --------------------------------- Name: Title: Address: Facsimile No.: Attention: CHASE SECURITIES INC., as an Arranger By: --------------------------------- Name: Title: Address: Facsimile No.: Attention: -124- 133 LENDERS: -------- CREDIT SUISSE FIRST BOSTON By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: THE CHASE MANHATTAN BANK By: --------------------------------- Name: Title: [NAME OF LENDER] By: --------------------------------- Name: Title: [NAME OF LENDER] By: --------------------------------- Name: Title: -125- 134 SCHEDULE I LENDER INFORMATION ------------------
LENDER PERCENTAGE DOMESTIC OFFICE EUROCURRENCY OFFICE - ------ ---------- --------------- ------------------- Credit Suisse First Boston _______% ________________________ ________________________ ________________________ ________________________ ________________________ ________________________ Telecopier: ____________ Telecopier: ____________ Attn: ________________ Attn: ________________ The Chase Manhattan Bank _______% ________________________ ________________________ ________________________ ________________________ ________________________ ________________________ Telecopier: ____________ Telecopier: ____________ Attn: ________________ Attn: ________________ [Name of Lender] _______% ________________________ ________________________ ________________________ ________________________ ________________________ ________________________ Telecopier: ____________ Telecopier: ____________ Attn: ________________ Attn: ________________
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LENDER PERCENTAGE DOMESTIC OFFICE EUROCURRENCY OFFICE - ------ ---------- --------------- ------------------- [Name of Lender] _______% ________________________ ________________________ ________________________ ________________________ ________________________ ________________________ Telecopier: ____________ Telecopier: ____________ Attn: ________________ Attn: ________________
-2- 136 SCHEDULE II SUBORDINATED INTERCOMPANY NOTE TERMS 137 SCHEDULE III EXISTING MATERIAL PROPERTY - -------------------------------------------------------------------------------- Owner Site - ----- ---- - -------------------------------------------------------------------------------- Pentastar Services Headquarters, Tulsa, Oklahoma - -------------------------------------------------------------------------------- Dollar 1120 Laurel Street West San Diego, California - -------------------------------------------------------------------------------- Dollar 4720 W. Spruce Street Tampa Bay, Florida - -------------------------------------------------------------------------------- Thrifty 4114 E. Washington Phoenix, Arizona - -------------------------------------------------------------------------------- Thrifty 2400 SE Miami Road Ft. Lauderdale, Florida - -------------------------------------------------------------------------------- Thrifty 5757 S. Samoran Boulevard Orlando, Florida - -------------------------------------------------------------------------------- Thrifty 4405 Reese Drive 7700 Esters Blvd. Dallas, Texas - -------------------------------------------------------------------------------- Thrifty 15845 JFK Boulevard Houston, Texas - -------------------------------------------------------------------------------- Thrifty 15 South 2400 West Salt Lake City, Utah - -------------------------------------------------------------------------------- 138 SCHEDULE IV EXCLUDED PROPERTY - -------------------------------------------------------------------------------- Owner Site - ----- ---- - -------------------------------------------------------------------------------- Dollar 4775 S. Swenson Road Las Vegas, Nevada - -------------------------------------------------------------------------------- Thrifty 4708 Riverdale Road Atlanta, Georgia - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- -5- EX-4.7 3 SERIES 1997-1 SUPPLEMENT TO BASE INDENTURE 1 EXHIBIT 4.7 ================================================================================ RENTAL CAR FINANCE CORP., as Issuer and BANKERS TRUST COMPANY, as Trustee ---------------------- SERIES 1997 1/N1 SUPPLEMENT dated as of December __, 1997 to BASE INDENTURE dated as of December 13, 1995, as amended by AMENDMENT TO BASE INDENTURE, dated as of December __, 1997 Rental Car Asset Backed Notes ================================================================================ 2 TABLE OF CONTENTS Page ---- ARTICLE 1 DESIGNATION ARTICLE 2 DEFINITIONS AND CONSTRUCTION ARTICLE 3 [RESERVED] ARTICLE 4 ALLOCATION AND APPLICATION OF COLLECTIONS Section 4.6 Establishment of Group I Collection Account, Series 1997 1/N1 Collection Account, Series 1997 1/N1 Excess Funding Account, and Series 1997 1/N1 Accrued Interest Account...................... 49 Section 4.7 Allocations with Respect to the Series 1997 1/N1 Notes................................................... 50 Section 4.8 Monthly Payments.......................................... 63 Section 4.9 Payment of Note Interest.................................. 67 Section 4.10 Payment of Note Principal................................. 70 Section 4.11 Retained Distribution Account............................. 92 Section 4.12 Class A Distribution Account.............................. 92 Section 4.13 Class B Distribution Account.............................. 94 Section 4.14 Class B Notes Subordinate to Class A Notes................ 95 Section 4.15 Class C Distribution Account.............................. 96 Section 4.16 Class C Notes Subordinate to Class A Notes and Class B Notes....................................... 97 Section 4.17 The Servicer's Failure to Instruct the Trustee to Make a Deposit or Payment.................... 98 Section 4.18 Lease Payment Deficit Draw on Series 1997 1/N1 Letter of Credit........................................ 98 Section 4.19 Claim Under on the Demand Note............................ 99 Section 4.20 Series 1997 1/N1 Letter of Credit Termination Demand.................................................. 100 Section 4.21 The Series 1997 1/N1 Cash Collateral Account.............. 101 3 ARTICLE 5 AMORTIZATION EVENTS Section 5.1 Series 1997 1/N1 Amortization Events..................... 104 Section 5.2 Waiver of Past Events.................................... 106 ARTICLE 6 [RESERVED] ARTICLE 7 FORM OF SERIES 1997 1/N1 NOTES Section 7.1 Class A Notes............................................ 107 Section 7.2 Class B Notes............................................ 108 Section 7.3 Class C Notes............................................ 108 ARTICLE 8 GENERAL Section 8.1 Repurchase of Notes...................................... 109 Section 8.2 Payment of Rating Agencies' Fees......................... 111 Section 8.3 Exhibits................................................. 111 Section 8.4 Ratification of Base Indenture........................... 112 Section 8.5 Counterparts............................................. 112 Section 8.6 Governing Law............................................ 112 Section 8.7 Amendments............................................... 112 Schedule 1 - Maximum Manufacturer Percentages Exhibit A-1 - Form of Restricted Global Class A 1/N1 Note Exhibit A-2 - Form of Restricted Global Class A 1/N2 Note Exhibit A-3 - Form of Restricted Global Class A 1/N3 Note Exhibit A-4 - Form of Temporary Global Class A 1/N1 Note Exhibit A-5 - Form of Temporary Global Class A 1/N2 Note Exhibit A-6 - Form of Temporary Global Class A 1/N3 Note Exhibit A-7 - Form of PermaNeNt Global Class A 1/N1 Note Exhibit A-8 - Form of PermaNeNt Global Class A 1/N2 Note Exhibit A-9 - Form of PermaNeNt Global Class A 1/N3 Note Exhibit B-1 - Form of Restricted Global Class B 1/N1 Note Exhibit B-2 - Form of Restricted Global Class B 1/N2 Note Exhibit B-3 - Form of Restricted Global Class B 1/N3 Note Exhibit B-4 - Form of Temporary Global Class B 1/N1 Note Exhibit B-5 - Form of Temporary Global Class B 1/N2 Note Exhibit B-6 - Form of Temporary Global Class B 1/N3 Note Exhibit B-7 - Form of PermaNeNt Global Class B 1/N1 Note Exhibit B-8 - Form of PermaNeNt Global Class B 1/N2 Note Exhibit B-9 - Form of PermaNeNt Global Class B 1/N3 Note ii 4 Exhibit C 1/N1 Form of Restricted Global Class C 1/N1 Note Exhibit C 1/N2 Form of Restricted Global Class C 1/N2 Note Exhibit C 1/N3 Form of Restricted Global Class C 1/N3 Note Exhibit C 1/N4 Form of Temporary Global Class C 1/N1 Note Exhibit C 1/N5 Form of Temporary Global Class C 1/N2 Note Exhibit C 1/N6 Form of Temporary Global Class C 1/N3 Note Exhibit C 1/N7 Form of Permanent Global Class C 1/N1 Note Exhibit C 1/N8 Form of Permanent Global Class C 1/N2 Note Exhibit C 1/N9 Form of Permanent Global Class C 1/N3 Note Exhibit D Form of Consent Exhibit E Form of Demand Note iii 5 THIS SERIES 1997 1/N1 SUPPLEMENT, dated as of December [__], 1997 (as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof and of the Base Indenture referred to below, this "Supplement") between RENTAL CAR FINANCE CORP., formerly known as Thrifty Car Rental Finance Corporation, a special purpose Oklahoma corporation ("RCFC" or the "Issuer"), and BANKERS TRUST COMPANY, a New York banking corporation (together with its successors in trust thereunder as provided in the Base Indenture referred to below, the "Trustee"), to the Base Indenture, dated as of December 13, 1995, between RCFC and the Trustee, as amended by an amendment of even date herewith (as amended by such amendment and as the same may be further amended, supplemented, restated or otherwise modified from time to time in accordance with its terms, exclusive of Supplements creating a new Series of Notes, the "Base Indenture"). W I T N E S S E T H: WHEREAS, Sections 2.2, 2.3, 11.1 and 11.3 of the Base Indenture provide, among other things, that RCFC and the Trustee may at any time and from time to time enter into a supplement to the Base Indenture for the purpose of authorizing the issuance of one or more Series of Notes; NOW, THEREFORE, the parties hereto agree as follows: ARTICLE 1 DESIGNATION (a) There is hereby created a Series of Notes to be issued pursuant to the Base Indenture and this Supplement and such Series of Notes shall be designated generally as Rental Car Asset Backed Notes, Series 1997 1/N1. The Series 1997 1/N1 Notes shall be issued in three classes of Class A Notes, the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, three classes of Class B Notes, the Class B-1 Notes, the Class B-2 Notes and the Class B-3 Notes, and three classes of Class C Notes, the Class C-1 Notes, the Class C-2 Notes and the Class C-3 Notes. The Class A-1 Rental Car Asset Backed Notes, the Class A-2 Rental Car Asset Backed Notes and the Class A-3 Rental Car Asset Backed Notes are designated generally herein as the "Class A Notes", the Class B-1 Rental Car Asset Backed Notes, the Class B-2 Rental Car Asset Backed Notes and the Class B-3 Rental Car Asset Backed Notes are designated generally herein as the "Class B Notes", and the Class C-1 Rental Car Asset Backed Notes, the Class C-2 Rental Car Asset Backed Notes and the Class C-3 Rental Car Asset Backed Notes are designated generally herein as the "Class C Notes". The Class A Notes, the Class B Notes and the Class C Notes are referred to collectively as the "Series 1997 1/N1 Notes". 6 (b) The Class C Notes are subordinated in right of payment to the Class A Notes and Class B Notes as set forth herein. The Class B Notes are subordinated in right of payment to the Class A Notes as set forth herein. (c) The net proceeds from the sale of the Series 1997 1/N1 Notes shall be deposited into the Collection Account, and shall be used (i) on the Series 1997 1/N1 Closing Date, to refinance the Existing Fleet, (ii) on and after the Series 1997 1/N1 Closing Date, to finance the acquisition by Thrifty and Dollar of Texas Vehicles for leasing in the State of Texas, (iii) on and after the Series 1997 1/N1 Closing Date, to acquire Acquired Vehicles from certain Eligible Manufacturers, and (iv) in certain circumstances, to pay principal of and interest on the Series 1997 1/N1 Notes or principal on amortizing Group I Series of Notes other than the Series 1997 1/N1 Notes. (d) The Series 1997 1/N1 Notes are a Segregated Series of Notes (as more fully described in the Base Indenture) and are hereby designated as a "Group I" Series of Notes. The Issuer may from time to time issue additional Segregated Series of Notes that the related Series Supplements will indicate are entitled to share, together with the Series 1997 1/N1 Notes, the Group I Collateral and any other Collateral and Master Collateral designated as security for the Series 1997 1/N1 Notes under this Supplement and the Master Collateral Agency Agreement (the Series 1997 1/N1 Notes and any such additional Segregated Series, each, a "Group I Series of Notes" and, collectively, the "Group I Series of Notes"). Accordingly, 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 Group I Series of Notes. ARTICLE 2 DEFINITIONS AND CONSTRUCTION (a) All capitalized terms not otherwise defined in this Supplement are defined in the Definitions List attached to the Base Indenture as Schedule 1 thereto, as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms of the Base Indenture. All capitalized terms defined in this Supplement that are also defined in the Definitions List to the Base Indenture shall, unless context otherwise requires, have the meanings set forth in this Supplement. All references to "Articles", "Sections" or "Subsections" 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 -2- 7 Indenture, each capitalized term used or defined herein shall relate only to the Series 1997 1/N1 Notes and not to any other Series of Notes issued by RCFC. In addition, with respect to the Series 1997 1/N1 Notes, references in the Base Indenture to (i) the "Lease" shall be deemed to refer to the Master Lease, (ii) "Thrifty Finance" shall be deemed to refer to RCFC, (iii) "Lessee" shall be deemed to refer to either or both of the Lessees, as the context requires, and (iv) "Servicer" shall be deemed to refer to the Master Servicer, except in each case as otherwise specified in this Supplement or as the context may otherwise require. (b) The following words and phrases shall have the following meanings with respect to the Series 1997 1/N1 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: "Accrued Amounts" means, with respect to any Group I Series of Notes (or any class (or portion thereof)), on any date of determination, the sum of (i) accrued and unpaid interest on the Notes of such Series (or the applicable class thereof) as of such date, (ii) the portion of the accrued and unpaid Monthly Servicing Fee and any Supplemental Monthly Servicing Fee allocated to such Series of Notes (or the applicable class thereof) pursuant to the related lease or leases (which with respect to the Series 1997 1/N1 Notes is pursuant to Section 26.1 of the Master Lease), and (iii) the product of (A) all other accrued and unpaid fees and expenses of RCFC on such date, times (B) a fraction, the numerator of which is the Invested Amount of such Group I Series of Notes (or the applicable class thereof) on such date and the denominator of which is the Aggregate Invested Amount for all outstanding Series of Notes on such date. "Acquired Vehicles" means any Eligible Vehicles acquired by RCFC, Dollar or Thrifty, as the case may be, on and after the Series 1997 1/N1 Closing Date and leased by RCFC to any of the Lessees under the Master Lease. "Additional Depreciation Charge" means, with respect to each Non-Program Vehicle leased under the Master Lease on any Due Date, the quotient of (a) the amount, if any, by which (i) the aggregate Net Book Value of all such Non-Program Vehicles exceeds (ii) the three (3) month rolling average of the aggregate Fair Market Value of such Non-Program Vehicles determined as of the first day of the month in which such Due Date occurs and the first day of each of the two (2) calendar months preceding such Due Date, divided by (b) the number of Non-Program Vehicles leased under the Master Lease on such Due Date. -3- 8 "Additional Lessee" has the meaning specified in Section 28 of the Master Lease. "Additional Overcollateralization Amount" means, as of any date of determination, an amount equal to (a) the Overcollateralization Portion on such date divided by the Series 1997 1/N1 Enhancement Factor as of such date minus (b) the Overcollateralization Portion as of such date. "Aggregate Asset Amount" means, on any date of determination, without duplication, the sum of (i) the Net Book Value of all Group I Vehicles with respect to which the applicable Vehicle Lease Expiration Date has not occurred, plus (ii) all amounts receivable, as of such date, by RCFC, Thrifty or Dollar from Eligible Manufacturers under and in accordance with their respective Eligible Vehicle Disposition Programs, or from Eligible Manufacturers as incentive payments, allowances, premiums, supplemental payments or otherwise, in each case with respect to Group I Vehicles at any time owned, financed or refinanced by RCFC, plus (iii) all amounts (other than amounts specified in clause (ii) above) receivable, as of such date, by RCFC, Thrifty or Dollar from any Person in connection with the auction, sale or other disposition of Eligible Vehicles at any time leased under the Master Lease, plus (iv) all accrued and unpaid Monthly Base Rent and Monthly Supplemental Payments (other than amounts specified in clauses (ii) and (iii) above) payable in respect of the Group I Vehicles, plus (v) cash and Permitted Investments on deposit in the Collection Account allocable to the Group I Series of Notes and, to the extent cash and Permitted Investments in the Master Collateral Account are allocable to the Trustee as Beneficiary pursuant to the Master Collateral Agency Agreement and are not distributable to or at the direction of DTAG, Thrifty or Dollar, as the case may be, in their respective capacities as Master Servicer or Servicers pursuant thereto, cash and Permitted Investments in the Master Collateral Account (less any portion thereof allocated to the Retained Interestholder) allocable to the Group I Series of Notes. "Aggregate Invested Amount" means the sum of the Invested Amounts with respect to all Group I Series of Notes then outstanding. "Annual Certificate" is defined in Section 24.4(g) of the Master Lease. "Asset Amount Deficiency" means, as of any date of determination, the amount, if any, by which the Required Asset Amount exceeds the Aggregate Asset Amount, as of such date of determination. -4- 9 "Assignment Agreement" means a Vehicle Disposition Program Assignment Agreement, in the form attached as Exhibit E to the Master Collateral Agency Agreement, or in such other form as is acceptable to each Rating Agency, between a Lessee and/or RCFC as the case may be, as assignor, and the Master Collateral Agent, as assignee, and acknowledged by the applicable Manufacturer, pursuant to which such Lessee and/or RCFC, as the case may be, assigns as collateral to the Master Collateral Agent all of such Lessee's and/or RCFC's, as the case may be, right, title and interest in, to and under a Vehicle Disposition Program. "Authorized Officer" means (a) as to RCFC, any of its President, any Vice President, the Secretary or any Assistant Secretary and (b) as to DTAG (including in its capacity as the Master Servicer), Thrifty (including in its capacities as a Lessee and as a Servicer), Dollar (including in its capacities as a Lessee and a Servicer), any Additional Lessee or additional Servicer, those officers, employees and agents of DTAG, Thrifty, Dollar, such other Lessee or such other Servicer, as the case may be, in each case whose signatures and incumbency shall have been certified as the authentic signatures of duly qualified and elected persons authorized to act on behalf of such entities. "Availability Payment" is defined in Section 5.2 of the Master Lease. "Base Indenture" has the meaning set forth in the preamble hereto. "Board of Directors" means the Board of Directors of DTAG, RCFC, Thrifty or Dollar, as applicable, or any authorized committee of the Board of Directors. "Carrying Charges" means, as of any day, without duplication, the aggregate of all Trustee fees, servicing fees (other than supplemental servicing fees) and other fees and expenses and indemnity amounts, if any, payable by the Lessor, the Master Servicer or any Servicer under the Indenture or the other Related Documents which have accrued during the Related Month. "Carryover Controlled Amortization Amount" (as such term is used in Section 24.4(b) of the Lease) means each of the Class A-1 Carryover Controlled Amortization Amount, the Class A-2 Carryover Controlled Amortization Amount, the Class A-3 Carryover Controlled Amortization Amount, the Class B-1 Carryover Controlled Amortization Amount, the Class B-2 Carryover Controlled Amortization Amount, the Class B-3 Carryover Controlled Amortization Amount, the Class C-1 Carryover Controlled Amortization, the Class C-2 Carryover Amortization -5- 10 Controlled Amount and the Class C-3 Carryover Amortization Amount. "Casualty" means, with respect to any Vehicle, that (i) such Vehicle is lost, stolen (and not recovered within 60 days of being reported stolen), destroyed, seized or otherwise rendered permanently unfit or unavailable for use, (including vehicles that are rejected pursuant to Section 2.2 of the Master Lease), or (ii) such Vehicle is not accepted for Auction or repurchase for any reason within thirty (30) days of initial submission and is not designated a Non-Program Vehicle pursuant to Section 14 of the Master Lease (other than, in the case of clause (ii) above, the applicable Manufacturer's willful refusal or inability to comply with its obligations under its Vehicle Disposition Program) "Casualty Payment" is defined in Section 7 of the Master Lease. "Certificate of Credit Demand" means a certificate in the form of Annex A to the Series 1997 1/N1 Letter of Credit. "Certificate of Termination Demand" means a certificate in the form of Annex B to the Series 1997 1/N1 Letter of Credit. "Chrysler" means Chrysler Corporation, a [ ] corporation. "Chrysler Vehicle Lien Nominee Agreement" means that certain Vehicle Lien Nominee Agreement, dated as of December [___], 1997, between Chrysler and RCFC. "Class A Controlled Distribution Amount Deficiency" has the meaning specified in Section 4.10(a)(i) of this Supplement. "Class A Deficiency Amount" has the meaning specified in Section 4.8(a) of this Supplement. "Class A Distribution Account" has the meaning specified in Section 4.12(a) of this Supplement. "Class A Distribution Account Collateral" has the meaning specified in Section 4.12(d) of this Supplement. "Class A Enhancement Amount" means the sum of (a) the Class C Invested Amount, plus (b) the Class B Invested Amount plus (c) the Series 1997 1/N1 Available Subordinated Amount, plus (d) the Series 1997 1/N1 Letter of Credit Amount. "Class A Interest Amount" has the meaning specified in Section 4.8(a) of this Supplement. -6- 11 "Class A Invested Amount" means, on any date of determination, the sum of the Class A-1 Invested Amount, the Class A-2 Invested Amount and the Class A-3 Invested Amount for such date of determination. "Class A Monthly Interest Shortfall" means as of any Payment Date and with respect to any or all of the classes of Class A Notes, as the context requires, the excess, if any, of the Class A Interest Amount for the Class A-1 Notes, the Class A-2 Notes or the Class A-3 Notes (as applicable) and any unpaid Class A Deficiency Amounts for the Class A-1 Notes, the Class A-2 Notes or the Class A-3 Notes(as applicable) (together with accrued interest on such unpaid Class A Deficiency Amounts) over the amount withdrawn from the Series 1997 1/N1 Accrued Interest Account and deposited in the Class A Distribution Account on such Payment Date pursuant to Section 4.7(a) of this Supplement. "Class A Non-Program Enhancement Percentage" means, with respect to any date of determination, the greatest of (a) an amount equal to (i) 32% minus (ii) the sum of the Class B Percentage and the Class C Percentage as of such date, (b) an amount equal to (i) 100% minus (ii) an amount equal to (x) the Market Value Adjustment Percentage, minus (y) 32%, minus (iii) the sum of the Class B Percentage and the Class C Percentage as of such date, and (c) 15.25%. "Class A Note Rate" means, for any Series 1997 1/N1 Interest Period, the Class A-1 Rate, the Class A-2 Rate or the Class A-3 Rate, as applicable. "Class A Noteholder" means the Person in whose name a Class A Note is registered in the Note Register. "Class A Notes" means the Class A-1 Notes, the Class A- 2 Notes and the Class A-3 Notes. "Class A Program Enhancement Percentage" means, with respect to any date of determination, the greater of (a) an amount equal to (i) 32% minus (ii) the sum of the Class B Percentage and the Class C Percentage as of such date, and (b) 10.0%. "Class A-1 Carryover Controlled Amortization Amount" means, with respect to the Class A-1 Notes for any Related Month during the Class A-1 Controlled Amortization Period, (i) the excess, if any, of the Class A-1 Controlled Distribution Amount payable on the Payment Date occurring in the Related Month over the principal amount distributed on such Payment Date with respect to the Class A-1 Notes pursuant to Section 4.10(a) of this Supplement, plus (ii) the unpaid amount, if any, of the Class A-1 Carryover Controlled Amortization Amount for the -7- 12 previous Related Month; provided, however, that for the first Related Month in the Class A-1 Controlled Amortization Period, the Class A-1 Carryover Controlled Amortization Amount shall be zero. "Class A-1 Controlled Amortization Amount" means an amount equal to $38,336,834. "Class A-1 Controlled Amortization Period" means the period commencing on July 31, 2000(or, if such day is not a Business Day, the Business Day last preceding such day), and continuing to the earliest of (i) the commencement of the Series 1997 1/N1 Rapid Amortization Period, (ii) the date on which the Class A-1 Notes are fully paid, (iii) the Series 1997 1/N1 Termination Date, and (iv) the termination of the Indenture. "Class A-1 Controlled Distribution Amount" means, with respect to any Related Month during the Class A-1 Controlled Amortization Period, an amount equal to the sum of the Class A-1 Controlled Amortization Amount and any Class A-1 Carryover Controlled Amortization Amount for such Related Month. "Class A-1 Controlled Distribution Amount Deficiency" has the meaning specified in Section 4.10(a)(i) of this Supplement. "Class A-1 Expected Final Payment Date" means the February 2001 Payment Date. "Class A-1 Initial Invested Amount" means the aggregate initial principal amount of Class A-1 Notes, which is $230,021,000. "Class A-1 Invested Amount" means, on any date of determination, an amount equal to (a) the Class A-1 Initial Invested Amount, minus (b) the amount of principal payments made to Class A-1 Noteholders on or prior to such date, minus (c) all Losses and Lease Payment Losses allocated to the Class A-1 Noteholders on or prior to such date, plus (d) all Recoveries and Lease Payment Recoveries allocated to the Class A-1 Noteholders on or prior to such date. "Class A-1 Noteholder" means the Person in whose name a Class A-1 Note is registered in the Note Register. "Class A-1 Notes" means any one of the [_____]% Rental Car Asset Backed Notes, Class A-1, executed by RCFC and authenticated and delivered by or on behalf of the Trustee, substantially in the form of Exhibit A-1, Exhibit A-4 or Exhibit A-7. Definitive Class A-1 Notes shall have such insertions and -8- 13 deletions as are necessary to give effect to the provisions of Section 2.18 of the Base Indenture. "Class A-1 Rate" means, for any Series 1997 1/N1 Interest Period, [__]% per annum; provided, however, that the Class A-1 Rate shall in no event be higher than the maximum rate permitted by applicable law. "Class A-2 Carryover Controlled Amortization Amount" means, with respect to the Class A-2 Notes for any Related Month during the Class A-2 Controlled Amortization Period, (i) the excess, if any, of the Class A-2 Controlled Distribution Amount payable on the Payment Date occurring in the Related Month over the principal amount distributed on such Payment Date with respect to the Class A-2 Notes pursuant to Section 4.10(a) of this Supplement, plus (ii) the unpaid amount, if any, of the Class A-2 Carryover Controlled Amortization Amount for the previous Related Month; provided, however, that for the first Related Month in the Class A-2 Controlled Amortization Period, the Class A-2 Carryover Controlled Amortization Amount shall be zero. "Class A-2 Controlled Amortization Amount" means an amount equal to $34,077,222. "Class A-2 Controlled Amortization Period" means the period commencing on June 30, 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 1997 1/N1 Rapid Amortization Period, (ii) the date on which the Class A-2 Notes are fully paid, (iii) the Series 1997 1/N1 Termination Date, and (iv) the termination of the Indenture. "Class A-2 Controlled Distribution Amount" means, with respect to any Related Month during the Class A-2 Controlled Amortization Period, an amount equal to the sum of the Class A-2 Controlled Amortization Amount and any Class A-2 Carryover Controlled Amortization Amount for such Related Month. "Class A-2 Controlled Distribution Amount Deficiency" has the meaning specified in Section 4.10(a)(i) of this Supplement. "Class A-2 Expected Final Payment Date" means the April 2003 Payment Date. "Class A-2 Initial Invested Amount" means the aggregate initial principal amount of Class A-2 Notes, which is $306,695,000. -9- 14 "Class A-2 Invested Amount" means, when used with respect to any date of determination, an amount equal to (a) the Class A-2 Initial Invested Amount, minus (b) the amount of principal payments made to Class A-2 Noteholders on or prior to such date, minus (c) all Losses and Lease Payment Losses allocated to the Class A-2 Noteholders on or prior to such date, plus (d) all Recoveries and Lease Payment Recoveries allocated to the Class A-2 Noteholders on or prior to such date. "Class A-2 Noteholder" means the Person in whose name a Class A-2 Note is registered in the Note Register. "Class A-2 Notes" means any one of the [____]% Rental Car Asset Backed Notes, Class A-2, executed by RCFC and authenticated and delivered by or on behalf of the Trustee, substantially in the form of Exhibit A-2, Exhibit A-5 or Exhibit A-8. Definitive Class A-2 Notes shall have such insertions and deletions as are necessary to give effect to the provisions of Section 2.18 of the Base Indenture. "Class A-2 Rate" means, for any Series 1997 1/N1 Interest Period, [____]% per annum; provided, however, that the Class A-2 Rate shall in no event be higher than the maximum rate permitted by applicable law. "Class A-3 Carryover Controlled Amortization Amount" means, with respect to the Class A-3 Notes for any Related Month during the Class A-3 Controlled Amortization Period, (i) the excess, if any, of the Class A-3 Controlled Distribution Amount payable on the Payment Date occurring in the Related Month over the principal amount distributed on such Payment Date with respect to the Class A-3 Notes pursuant to Section 4.10(a) of this Supplement, plus (ii) the unpaid amount, if any, of the Class A-3 Carryover Controlled Amortization Amount for the previous Related Month; provided, however, that for the first Related Month in the Class A-3 Controlled Amortization Period, the Class A-3 Carryover Controlled Amortization Amount shall be zero. "Class A-3 Controlled Amortization Amount" means an amount equal to $12,778,917. "Class A-3 Controlled Amortization Period" means the period commencing on April 30, 2004, (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 1997 1/N1 Rapid Amortization Period, (ii) the date on which the Class A-3 Notes are fully paid, (iii) the Series 1997 1/N1 Termination Date, and (iv) the termination of the Indenture. "Class A-3 Controlled Distribution Amount" means, with respect to any Related Month during the Class A-3 Controlled Amortization Period, an amount equal to the sum of the Class A-3 -10- 15 Controlled Amortization Amount and any Class A-3 Carryover Controlled Amortization Amount for such Related Month. "Class A-3 Controlled Distribution Amount Deficiency" has the meaning specified in Section 4.10(a)(i) of this Supplement. "Class A-3 Expected Final Payment Date" means the May, 2005 Payment Date. "Class A-3 Initial Invested Amount" means the aggregate initial principal amount of Class A-3 Notes, which is $153,347,000. "Class A-3 Invested Amount" means, on any date of determination, an amount equal to (a) the Class A-3 Initial Invested Amount, minus (b) the amount of principal payments made to Class A-3 Noteholders on or prior to such date, minus (c) all Losses and Lease Payment Losses allocated to the Class A-3 Noteholders on or prior to such date, plus (d) all Recoveries and Lease Payment Recoveries allocated to the Class A-3 Noteholders on or prior to such date. "Class A-3 Noteholder" means the Person in whose name a Class A-3 Note is registered in the Note Register. "Class A-3 Notes" means any one of the [____]% Rental Car Asset Backed Notes, Class A-3, executed by RCFC and authenticated and delivered by or on behalf of the Trustee, substantially in the form of Exhibit A-3, Exhibit A-6 or Exhibit A-9. Definitive Class A-3 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-3 Rate" means, for any Series 1997 1/N1 Interest Period, [___]% per annum; provided, however, that the Class A-3 Rate shall in no event be higher than the maximum rate permitted by applicable law. "Class B Controlled Distribution Amount Deficiency" has the meaning specified in Section 4.10(b)(i) of this Supplement. "Class B Deficiency Amount" has the meaning specified in Section 4.8 of this Supplement. "Class B Distribution Account" has the meaning specified in Section 4.13(a) of this Supplement. "Class B Distribution Account Collateral" has the meaning specified in Section 4.13(d) of this Supplement. -11- 16 "Class B Enhancement Amount" means the sum of (a) the Series 1997 1/N1 Available Subordinated Amount, plus (b) the Class C Invested Amount, plus (c) Series 1997 1/N1 Letter of Credit Amount. "Class B Interest Amount" has the meaning specified in Section 4.8(b) of this Supplement. "Class B Invested Amount" means, on any date of determination, the sum of the Class B-1 Invested Amount, the Class B-2 Invested Amount and the Class B-3 Invested Amount for such date of determination. "Class B Monthly Interest Shortfall" means as of any Payment Date and with respect to any or all of the classes of Class B Notes, as the context requires, the excess, if any, of the Class B Interest Amount for the Class B-1 Notes, the Class B-2 Notes or the Class B-3 Notes (as applicable) and any unpaid Class B Deficiency Amounts for the Class B-1 Notes, the Class B-2 Notes or the Class B-3 Notes (as applicable) (together with accrued interest on such unpaid Class B Deficiency Amounts) over the amount withdrawn from the Series 1997 1/N1 Accrued Interest Account and deposited in the Class B Distribution Account on such Payment Date pursuant to Section 4.7(b) of this Supplement. "Class B Non-Program Enhancement Percentage" means, with respect to any date of determination, the greatest of (a) an amount equal to (i) 21.5% minus (ii) the Class C Percentage as of such date, (b) an amount equal to (i) 100% minus (ii) an amount equal to (x) the Market Value Adjustment Percentage minus (y) 21.5%, minus (iii) the Class C Percentage as of such date, and (c) 15.25%. "Class B Note Rate" means, for any Series 1997 1/N1 Interest Period, the Class B-1 Rate, the Class B-2 Rate or the Class B-3 Rate, as applicable. "Class B Noteholder" means the Person in whose name a Class B Note is registered in the Note Register. "Class B Notes" means the Class B-1 Notes, the Class B-2 Notes and the Class B-3 Notes. "Class B Percentage" means, with respect to any date of determination, the percentage equivalent of a fraction, the numerator of which is (1) the Class B Invested Amount on such date and the denominator of which is (2) an amount equal to the sum of (x) the Invested Amount for the Series 1997 1/N1 Notes on such date (y) the Series 1997 1/N1 Available Subordinated Amount on such date. "Class B Program Enhancement Percentage" means, with respect to any date of determination, the greater of (a) an -12- 17 amount equal to (i) 14.5% minus (ii) the Class C Percentage as of such date, and (b) 10.0%. "Class B-1 Carryover Controlled Amortization Amount" means, with respect to the Class B-1 Notes for any Related Month during the Class B-1 Controlled Amortization Period, (i) the excess, if any, of the Class B-1 Controlled Distribution Amount payable on the Payment Date occurring in the Related Month over the principal amount distributed on such Payment Date with respect to the Class B-1 Notes pursuant to Section 4.10(b) of this Supplement plus (ii) the unpaid amount, if any, of the Class B-1 Carryover Controlled Amortization Amount for the previous Related Month; provided, however, that for the first Related Month in the Class B-1 Controlled Amortization Period, the Class B-1 Carryover Controlled Amortization Amount shall be zero. "Class B-1 Controlled Amortization Amount" means an amount equal to $17,759,000. "Class B-1 Controlled Amortization Period" means the period commencing on January 31, 2001 (or, if such day is not a Business Day, the Business Day last preceding such day) and continuing to the earliest of (i) the commencement of the Series 1997 1/N1 Rapid Amortization Period, (ii) the date on which the Class B-1 Notes are fully paid, (iii) the Series 1997 1/N1 Termination Date, and (iv) the termination of the Indenture. "Class B-1 Controlled Distribution Amount" means, with respect to any Related Month during the B-1 Controlled Amortization Period, an amount equal to the sum of the Class B-1 Controlled Amortization Amount and any Class B-1 Carryover Controlled Amortization Amount for such Related Month. "Class B-1 Controlled Distribution Amount Deficiency" has the meaning specified in Section 4.10(b)(i) of this Supplement. "Class B-1 Expected Final Payment Date" means the May 2001 Payment Date. "Class B-1 Initial Invested Amount" means the aggregate initial principal amount of the Class B-1 Notes, which is $53,277,000. "Class B-1 Invested Amount" means, when used with respect to any date of determination, an amount equal to (a) the Class B-1 Initial Invested Amount minus (b) the amount of principal payments made to Class B-1 Noteholders on or prior to such date, minus (c) all Losses and Lease Payment Losses allocated to the Class B-1 Noteholders on or prior to such date, plus (d) all Recoveries and Lease Payment Recoveries allocated to the Class B-1 Noteholders on or prior to such date. -13- 18 "Class B-1 Noteholder" means the Person in whose name a Class B-1 Note is registered in the Note Register. "Class B-1 Notes" means any one of the [_____]% Rental Car Asset Backed Notes, Class B-1, executed by RCFC and authenticated and delivered by or on behalf of the Trustee, substantially in the form of Exhibit B-1, Exhibit B-4 or Exhibit B-7. Definitive Class B-1 Notes shall have such insertions and deletions as are necessary to give effect to the provisions of Section 2.18 of the Base Indenture. "Class B-1 Rate" means, for any Series 1997 1/N1 Interest Period, ____% per annum; provided, however, that the Class B-1 Rate shall in no event be higher than the maximum rate permitted by applicable law. "Class B-2 Carryover Controlled Amortization Amount" means, with respect to the Class B-2 Notes for any Related Month during the Class B-2 Controlled Amortization Period, (i) the excess, if any, of the Class B-2 Controlled Distribution Amount payable on the Payment Date occurring in the Related Month over the principal amount distributed on such Payment Date with respect to the Class B-2 Notes pursuant to the Indenture plus (ii) the unpaid amount, if any, of the Class B-2 Carryover Controlled Amortization Amount for the previous Related Month; provided, however, that for the first Related Month in the Class B-2 Controlled Amortization Period, the Class B-2 Carryover Controlled Amortization Amount shall be zero. "Class B-2 Controlled Amortization Amount" means an amount equal $23,678,667. "Class B-2 Controlled Amortization Period" means the period commencing on March 31, 2003 (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 1997 1/N1 Rapid Amortization Period, (ii) the date on which the Class B-2 Notes are fully paid, (iii) the Series 1997 1/N1 Termination Date, and (iv) the termination of the Indenture. "Class B-2 Controlled Distribution Amount" means, with respect to any Related Month during the B-2 Controlled Amortization Period, an amount equal to the sum of the Class B-2 Controlled Amortization Amount and any Class B-2 Carryover Controlled Amortization Amount for such Related Month. "Class B-2 Controlled Distribution Amount Deficiency" has the meaning specified on Section 4.10(b)(i) of this Supplement. "Class B-2 Expected Final Payment Date" means the July 2003 Payment Date. -14- 19 "Class B-2 Initial Invested Amount" means the aggregate initial principal amount of the Class B-2 Notes, which is $71,036,000. "Class B-2 Invested Amount" means, when used with respect to any date of determination, an amount equal to (a) the Class B-2 Initial Invested Amount minus (b) the amount of principal payments made to Class B-2 Noteholders on or prior to such date, minus (c) all Losses and Lease Payment Losses allocated to the Class B-2 Noteholders on or prior to such date, plus (d) all Recoveries and Lease Payment Recoveries allocated to the Class B-2 Noteholders on or prior to such date. "Class B-2 Noteholder" means the Person on whose name a Class B-2 Note is registered in the Note Register. "Class B-2 Notes" means any one of the [___]% Rental Car Asset Backed Notes, Class B-2, executed by RCFC and authenticated and delivered by or on behalf of the Trustee, substantially in the form of Exhibit B-2, Exhibit B-5 or Exhibit B-8. Definitive Class B-2 Notes shall have such insertions and deletions as are necessary to give effect to the provisions of Section 2.18 of the Base Indenture. "Class B-2 Rate" means, for any Series 1997 1/N1 Interest Period, ____% per annum; provided, however, that the Class B-2 Rate shall in no event be higher than the maximum rate permitted by applicable law. "Class B-3 Carryover Controlled Amortization Amount" means, with respect to the Class B-3 Notes for any Related Month during the Class B-3 Controlled Amortization Period, (i) the excess, if any, of the Class B-3 Controlled Distribution Amount payable on the Payment Date occurring in the Related Month over the principal amount distributed on such Payment Date with respect to the Class B-3 Notes pursuant to this Supplement plus (ii) the unpaid amount, if any, of the Class B-3 Carryover Controlled Amortization Amount for the previous Related Month; provided, however, that for the first Related Month in the Class B-3 Controlled Amortization Period, the Class B-3 Carryover Controlled Amortization Amount shall be zero. "Class B-3 Controlled Amortization Amount" means an amount equal $11,839,333. "Class B-3 Controlled Amortization Period" means the period commencing on April 30, 2005 (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 1997 1/N1 Rapid Amortization Period, (ii) the date on which the Class B-3 Notes are fully paid, (iii) the Series 1997 1/N1 Termination Date, and (iv) the termination of the Indenture. -15- 20 "Class B-3 Controlled Distribution Amount" means, with respect to any Related Month during the B-3 Controlled Amortization Period, an amount equal to the sum of the Class B-3 Controlled Amortization Amount and any Class B-3 Carryover Controlled Amortization Amount for such Related Month. "Class B-3 Controlled Distribution Amount Deficiency" has the meaning specified on Section 4.10(b)(i) of this Supplement. "Class B-3 Expected Final Payment Date" means the August 2005 Payment Date. "Class B-3 Initial Invested Amount" means the aggregate initial principal amount of the Class B-3 Notes, which is $35,518,000. "Class B-3 Invested Amount" means, when used with respect to any date of determination, an amount equal to (a) the Class B-3 Initial Invested Amount minus (b) the amount of principal payments made to Class B-3 Noteholders on or prior to such date, minus (c) all Losses and Lease Payment Losses allocated to the Class B-3 Noteholders on or prior to such date, plus (d) all Recoveries and Lease Payment Recoveries allocated to the Class B-3 Noteholders on or prior to such date. "Class B-3 Noteholder" means the Person in whose name a Class B-3 Note as registered on the Note Register. "Class B-3 Notes" means any one of the [_____]% Rental Car Asset Backed Notes, Class B-3, executed by RCFC and authenticated and delivered by or on behalf of the Trustee, substantially in the form of Exhibit B-3, Exhibit B-6 or Exhibit B-9. Definitive Class B-3 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-3 Rate" means, for any Series 1997 1/N1 Interest Period, ____% per annum; provided, however, that the Class B-2 Rate shall in no event be higher than the maximum rate permitted by applicable law. "Class C Controlled Distribution Amount Deficiency" has the meaning specified in Section 4.10(c)(i) of this Supplement. "Class C Deficiency Amount" has the meaning specified in Section 4.8 of this Supplement. "Class C Distribution Account" has the meaning specified in Section 4.15(a) of this Supplement. "Class C Distribution Account Collateral" has the meaning specified in Section 4.15(d) of this Supplement. -16- 21 "Class C Enhancement Amount" means the sum of (a) the Series 1997 1/N1 Available Subordinated Amount plus (b) Series 1997 1/N1 Letter of Credit Amount. "Class C Interest Amount" has the meaning specified in Section 4.8(c) of this Supplement. "Class C Invested Amount" means, on any date of determination, the sum of the Class C-1 Invested Amount, the Class C-2 Invested Amount and the Class C-3 Invested Amount for such date of determination. "Class C Monthly Interest Shortfall" means as of any Payment Date and with respect to any or all of the classes of Class C Notes, as the context requires, the excess, if any, of the Class C Interest Amount for the Class C-1 Notes, the Class C-2 Notes or the Class C-3 Notes (as applicable) and any unpaid Class C Deficiency Amounts for the Class C-1 Notes, the Class C-2 Notes or the Class C-3 Notes (as applicable) (together with accrued interest on such unpaid Class C Deficiency Amounts) over the amount withdrawn from the Series 1997 1/N1 Accrued Interest Account and deposited in the Class C Distribution Account on such Payment Date pursuant to Section 4.7(b) of this Supplement. "Class C Non-Program Enhancement Percentage" means, with respect to any date of determination, the greater of (a) 15.25% and (b) an amount equal to (i) 100% minus (ii) the Market Value Adjustment Percentage as of such date of determination minus 15.25%. "Class C Note Rate" means, for any Series 1997 1/N1 Interest Period, the Class C-1 Rate, the Class C-2 Rate or the Class C-3 Rate, as applicable. "Class C Noteholder" means the Person in whose name a Class C Note is registered in the Note Register. "Class C Notes" means the Class C-1 Notes, the Class C-2 Notes and the Class C-3 Notes. "Class C Percentage" means, with respect to any date of determination, the percentage equivalent of a fraction, the numerator of which is (1) the Class C Invested Amount on such date and the denominator of which is (2) the Invested Amount for the Series 1997 1/N1 Notes on such date plus the Series 1997 1/N1 Available Subordinated Amount on such date. "Class C Program Enhancement Percentage" means 10.0%. "Class C-1 Carryover Controlled Amortization Amount" means, with respect to the Class C-1 Notes for any Related Month during the Class C-1 Controlled Amortization Period, (i) the -17- 22 excess, if any, of the Class C-1 Controlled Distribution Amount payable on the Payment Date occurring in the Related Month over the principal amount distributed on such Payment Date with respect to the Class C-1 Notes pursuant to Section 4.10(c) of this Supplement plus (ii) the unpaid amount, if any, of the Class C-1 Carryover Controlled Amortization Amount for the previous Related Month; provided, however, that for the first Related Month in the Class C-1 Controlled Amortization Period, the Class C-1 Carryover Controlled Amortization Amount shall be zero. "Class C-1 Controlled Amortization Amount" means an amount equal to $16,702,000. "Class C-1 Controlled Amortization Period" means the period commencing on April 30, 2001 (or, if such day is not a Business Day, the Business Day last preceding such day) and continuing to the earliest of (i) the commencement of the Series 1997 1/N1 Rapid Amortization Period, (ii) the date on which the Class C-1 Notes are fully paid, (iii) the Series 1997 1/N1 Termination Date, and (iv) the termination of the Indenture. "Class C-1 Controlled Distribution Amount" means, with respect to any Related Month during the C-1 Controlled Amortization Period, an amount equal to the sum of the Class C-1 Controlled Amortization Amount and any Class C-1 Carryover Controlled Amortization Amount for such Related Month. "Class C-1 Controlled Distribution Amount Deficiency" has the meaning specified in Section 4.10(c)(i) of this Supplement. "Class C-1 Expected Final Payment Date" means the June 2001 Payment Date. "Class C-1 Initial Invested Amount" means the aggregate initial principal amount of the Class C-1 Notes, which is $16,702,000. "Class C-1 Invested Amount" means, when used with respect to any date of determination, an amount equal to (a) the Class C-1 Initial Invested Amount minus (b) the amount of principal payments made to Class C-1 Noteholders on or prior to such date, minus (c) all Losses and Lease Payment Losses allocated to the Class C-1 Noteholders on or prior to such date, plus (d) all Recoveries and Lease Payment Recoveries allocated to the Class C-1 Noteholders on or prior to such date. "Class C-1 Noteholder" means the Person in whose name a Class C-1 Note is registered in the Note Register. "Class C-1 Notes" means any one of the [_____]% Rental Car Asset Backed Notes, Class C-1, executed by RCFC and authenticated and delivered by or on behalf of the Trustee, -18- 23 substantially in the form of Exhibit C-1, Exhibit C-4 or Exhibit C-7. Definitive Class C-1 Notes shall have such insertions and deletions as are necessary to give effect to the provisions of Section 2.18 of the Base Indenture. "Class C-1 Rate" means, for any Series 1997 1/N1 Interest Period, ____% per annum; provided, however, that the Class C-1 Rate shall in no event be higher than the maximum rate permitted by applicable law. "Class C-2 Carryover Controlled Amortization Amount" means, with respect to the Class C-2 Notes for any Related Month during the Class C-2 Controlled Amortization Period, (i) the excess, if any, of the Class C-2 Controlled Distribution Amount payable on the Payment Date occurring in the Related Month over the principal amount distributed on such Payment Date with respect to the Class C-2 Notes pursuant to the Indenture plus (ii) the unpaid amount, if any, of the Class C-2 Carryover Controlled Amortization Amount for the previous Related Month; provided, however, that for the first Related Month in the Class C-2 Controlled Amortization Period, the Class C-2 Carryover Controlled Amortization Amount shall be zero. "Class C-2 Controlled Amortization Amount" means an amount equal $22,269,000. "Class C-2 Controlled Amortization Period" means the period commencing on June 30, 2003 (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 1997 1/N1 Rapid Amortization Period, (ii) the date on which the Class C-2 Notes are fully paid, (iii) the Series 1997 1/N1 Termination Date, and (iv) the termination of the Indenture. "Class C-2 Controlled Distribution Amount" means, with respect to any Related Month during the C-2 Controlled Amortization Period, an amount equal to the sum of the Class C-2 Controlled Amortization Amount and any Class C-2 Carryover Controlled Amortization Amount for such Related Month. "Class C-2 Controlled Distribution Amount Deficiency" has the meaning specified on Section 4.10(c)(i) of this Supplement. "Class C-2 Expected Final Payment Date" means the August 2003 Payment Date. "Class C-2 Initial Invested Amount" means the aggregate initial principal amount of the Class C-2 Notes, which is $22,269,000. "Class C-2 Invested Amount" means, when used with respect to any date of determination, an amount equal to (a) the -19- 24 Class C-2 Initial Invested Amount minus (b) the amount of principal payments made to Class C-2 Noteholders on or prior to such date, minus (c) all Losses and Lease Payment Losses allocated to the Class C-2 Noteholders on or prior to such date, plus (d) all Recoveries and Lease Payment Recoveries allocated to the Class C-2 Noteholders on or prior to such date. "Class C-2 Noteholder" means the Person in whose name a Class C-2 Note is registered in the Note Register. "Class C-2 Notes" means any one of the [___]% Rental Car Asset Backed Notes, Class C-2, executed by RCFC and authenticated and delivered by or on behalf of the Trustee, substantially in the form of Exhibit C-2, Exhibit C-5 or Exhibit C-8. Definitive Class C-2 Notes shall have such insertions and deletions as are necessary to give effect to the provisions of Section 2.18 of the Base Indenture. "Class C-2 Rate" means, for any Series 1997 1/N1 Interest Period, ____% per annum; provided, however, that the Class B-2 Rate shall in no event be higher than the maximum rate permitted by applicable law. "Class C-3 Carryover Controlled Amortization Amount" means, with respect to the Class C-3 Notes for any Related Month during the Class C-3 Controlled Amortization Period, (i) the excess, if any, of the Class C-3 Controlled Distribution Amount payable on the Payment Date occurring in the Related Month over the principal amount distributed on such Payment Date with respect to the Class C-3 Notes pursuant to the Indenture plus (ii) the unpaid amount, if any, of the Class C-3 Carryover Controlled Amortization Amount for the previous Related Month; provided, however, that for the first Related Month in the Class B-3 Controlled Amortization Period, the Class C-3 Carryover Controlled Amortization Amount shall be zero. "Class C-3 Controlled Amortization Amount" means an amount equal $11,135,000. "Class C-3 Controlled Amortization Period" means the period commencing on July 31, 2005 (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 1997 1/N1 Rapid Amortization Period, (ii) the date on which the Class C-3 Notes are fully paid, (iii) the Series 1997 1/N1 Termination Date, and (iv) the termination of the Indenture. "Class C-3 Controlled Distribution Amount" means, with respect to any Related Month during the Series 1997 1/N1 Controlled Amortization Period, an amount equal to the sum of the Class C-3 Controlled Amortization Amount and any Class C-3 Carryover Controlled Amortization Amount for such Related Month. -20- 25 "Class C-3 Controlled Distribution Amount Deficiency" has the meaning specified on Section 4.10(c)(i) of this Supplement. "Class C-3 Expected Final Payment Date" means the September 2005 Payment Date. "Class C-3 Initial Invested Amount" means the aggregate initial principal amount of the Class C-3 Notes, which is $11,135,000. "Class C-3 Invested Amount" means, when used with respect to any date of determination, an amount equal to (a) the Class C-3 Initial Invested Amount minus (b) the amount of principal payments made to Class C-3 Noteholders on or prior to such date, minus (c) all Losses and Lease Payment Losses allocated to the Class C-3 Noteholders on or prior to such date, plus (d) all Recoveries and Lease Payment Recoveries allocated to the Class C-3 Noteholders on or prior to such date. "Class C-3 Noteholder" means the Person in whose name a Class C-3 Note is registered in the Note Register. "Class C-3 Notes" means any one of the [_____]% Rental Car Asset Backed Notes, Class C-3, executed by RCFC and authenticated and delivered by or on behalf of the Trustee, substantially in the form of Exhibit C-3, Exhibit C-6 or Exhibit C-9. Definitive Class C-3 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 C-3 Rate" means, for any Series 1997 1/N1 Interest Period, ____% per annum; provided, however, that the Class C-2 Rate shall in no event be higher than the maximum rate permitted by applicable law. "Collections" means all payments including, without limitation, all Recoveries and Lease Payment Recoveries, by, or on behalf of (i) a Lessee under the Master Lease, (ii) any Manufacturer, under its Vehicle Disposition Program or any incentive program, with respect to any Group I Vehicles, (iii) any other Person as proceeds from the sale of Group I Vehicles, payment of insurance proceeds, whether such payments are in the form of cash, checks, wire transfers or other form of payment and whether in respect of principal, interest, repurchase price, fees, expenses or otherwise and (iv) all amounts earned on Permitted Investments arising out of funds in the Group I Collection Account and in the Master Collateral Account (to the extent allocable to the Trustee on behalf of the holders of the Group I Series of Notes as Beneficiary thereunder). "Condition Report" means a condition report with respect to a Group I Vehicle, signed and dated by a Lessee or a -21- 26 Franchisee and any Manufacturer or its agent in accordance with the applicable Vehicle Disposition Program. "Controlled Distribution Amount" means the Class A-1 Controlled Distribution Amount, the Class A-2 Controlled Distribution Amount, the Class A-3 Controlled Distribution Amount, the Class B-1 Controlled Distribution Amount, the Class B-2 Controlled Distribution Amount, the Class B-3 Controlled Distribution Amount, the Class C-1 Controlled Distribution Amount, the Class C-2 Controlled Distribution Amount and the Class C-3 Controlled Distribution Amount, collectively. "Daily Report" is defined in Section 24.4(a) of the Master Lease. "DCR" means Duff & Phelps Credit Rating Co. "Defaulting Manufacturer" is defined in Section 18 of the Master Lease. "Demand Note" means that certain Demand Note, dated as of December __, 1997, made by DTAG to RCFC in substantially the attached as Exhibit E to this Supplement. "Depreciation Charge" means, for any date of determination, (a) with respect to any Program Vehicle leased under the Master Lease, the scheduled daily depreciation charge for such Vehicle set forth by the Manufacturer in its Vehicle Disposition Program for such Vehicle, and (b) with respect to any Non-Program Vehicle leased under the Master Lease, (i) the scheduled daily depreciation charge for such Vehicle set forth by the Servicer in the Depreciation Schedule for such Vehicle plus (ii) as of each Due Date, the Additional Depreciation Charge allocable to such Non-Program Vehicle on such Due Date (which Additional Depreciation Charge shall, for purposes of determining the Monthly Base Rent payable on such Due Date, be deemed to have accrued during the Related Month). If such charge is expressed as a percentage, the Depreciation Charge for such Vehicle for such day shall be such percentage multiplied by the Capitalized Cost for such Vehicle. "Depreciation Schedule" means a schedule of estimated daily depreciation prepared by the applicable Servicer [Master Servicer], and revised from time to time in the applicable Servicer's [Master Servicer's] sole discretion, with respect to each type of Non-Program Vehicle that is an Eligible Vehicle and that is purchased, financed or refinanced by RCFC. "Dollar" means Dollar Rent A Car Systems, Inc., successor by merger to Dollar Systems Inc., a Delaware corporation. -22- 27 "DTAG" means Dollar Thrifty Automotive Group, Inc., a Delaware corporation. "Eligible Franchisee" means, with respect to a Lessee, a Franchisee (all of whose rental offices are located in the United States) which meets the normal credit and other approval criteria of such Lessee, as applicable, and which may be an affiliate of such Lessee. "Eligible Manufacturer" means, with respect to Program Vehicles, Chrysler, General Motors, Ford, Honda and Toyota, and with respect to Non-Program Vehicles, Chrysler, General Motors, Ford, Honda, Mazda, Nissan and Toyota, and, in each case, any other Manufacturer that (a) has been approved by each of the Rating Agencies then rating the Group I Series of Notes or has an Eligible Vehicle Disposition Program that has been reviewed by the Rating Agencies and the Rating Agencies have indicated that the inclusion of such Manufacturer's Vehicles under the Master Lease will not adversely affect the then current rating of any Group I Series of Notes, and (b) has been approved by each Enhancement Provider, if any; provided, however, that upon the occurrence of a Manufacturer Event of Default with respect to such Manufacturer, such Manufacturer shall no longer qualify as an Eligible Manufacturer. "Eligible Vehicle" means, on any date of determination, a Group I Vehicle manufactured by an Eligible Manufacturer (determined at the time of the acquisition, financing or refinancing thereof) and satisfying any further eligibility requirements specified by the Rating Agencies or in any Group I Series Supplement (other than with respect to the Maximum Non-Program Percentage and the Maximum Manufacturer Percentage), or with respect to which all such eligibility requirements not otherwise satisfied have been duly waived by the Required Noteholders in accordance with the terms of the applicable Series Supplement; provided, however, that in no event may a Group I Vehicle be an Eligible Vehicle after (x) in the case of a Program Vehicle, the expiration of the applicable Maximum Term (unless such Vehicle has been designated as a Non-Program Vehicle pursuant to Section 14 of the Master Lease), or (y) the date which is twenty four (24) months after the date of the original new vehicle dealer invoice for such Vehicle. "Excess Damage Charges" means, with respect to any Program Vehicle, the amount charged to RCFC (or the applicable Lessee), or deducted from the Repurchase Price or Guaranteed Payment, by the Manufacturer of such Vehicle due to damage over a prescribed limit to the Vehicle at the time that the Vehicle is disposed of at Auction or turned in to such Manufacturer or its agent for repurchase, in either case pursuant to the applicable Vehicle Disposition Program. -23- 28 "Excess Funding Accounts" means, collectively, as of any date, the Series 1997 1/N1 Excess Funding Account and the corresponding account or accounts designated as such with respect to each additional Group I Series of Notes as of such date. "Excess Mileage Charges" means, with respect to any Program Vehicle, the amount charged to RCFC (or the applicable Lessee), or deducted from the Repurchase Price, by the Manufacturer of such Vehicle due to the fact that such Vehicle has mileage over a prescribed limit at the time that such Vehicle is disposed of at Auction or turned in to such Manufacturer or its agent for repurchase, in either case pursuant to the applicable Vehicle Disposition Program. "Existing Fleet" means with respect to Vehicles leased under the Master Lease, the Eligible Vehicles owned by and titled in the name of Dollar on the Lease Commencement Date and refinanced by RCFC under the Master Lease pursuant to the initial Vehicle Order of Dollar. "Financed Vehicle" means an Eligible Vehicle that is (a) part of the Existing Fleet or (b) a Texas Vehicle. "Financing Lease" means the Master Lease supplemented by Annex B to the Master Lease. "Ford" means Ford Motor Company, a [ ]. "Franchisee" means a franchisee of a Lessee. "General Motors" means General Motors Corporation, a [ ] corporation. "Group I Collateral" means the Master Lease and all payments made thereunder, the Group I Vehicles, the rights under Manufacturer Programs in respect of Group I Vehicles, any other Master Collateral related to Group I Vehicles, the Group I Collection Account and all proceeds of the foregoing. "Group I Collection Account" will have the meaning set forth therefore in Section 4.6(a) hereof. "Group I Monthly Servicing Fee" means, on any date of determination, 1/12 of 1% of the Aggregate Invested Amount as of the preceding Payment Date, after giving effect to any payments or allocations made on such date; provided, however, that if a Rapid Amortization Period shall occur and be continuing and if DTAG is no longer the Master Servicer, the Group I Monthly Servicing Fee shall equal the greater of (x) the product of (i) $[ ] and (ii) the number of Group I Vehicles as of the last day of the Related Month, and (y) the amount described in the first clause of this definition. -24- 29 "Group I Series of Notes" has the meaning specified in Section 1(d) hereof. "Group I Supplemental Servicing Fee" is defined in Section 26.1 of the Master Lease. "Group I Vehicle" means, as of any date, a passenger automobile or truck leased by RCFC to a Lessee under the Master Lease as of such date and pledged by RCFC under the Master Collateral Agency Agreement for the benefit of the Trustee (on behalf of the Noteholders), but solely during the Vehicle Term for such Vehicle. "Honda" means Honda Motor Company, a [ ] corporation. "Indemnified Persons" is defined in Section 15.1 of the Master Lease. "Initial Acquisition Cost" is defined in Section 2.3 of the Master Lease. "Initial Purchaser" means Credit Suisse First Boston Corporation. "Interest Reset Date" means the first day of the applicable Series 1997 1/N1 Interest Period. "Invested Amount" means, on any date of determination, the sum of the Class A Invested Amount, the Class B Invested Amount and the Class C Invested Amount for such date of determination. "Issuer" has the meaning specified in the preamble hereto. "Late Return Payments" is defined in Section 13 of the Master Lease. "Lease Annex" means Annex A or Annex B to the Master Lease, as applicable, as such annex may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms of the Master Lease. "Lease Commencement Date" has the meaning specified in Section 3.2 of the Master Lease. "Lease Event of Default" is defined in Section 17.1 of the Master Lease. "Lease Expiration Date" is defined in Section 3.2 of the Master Lease. -25- 30 "Lease Payment Losses" means as of any Payment Date, the amount of payments due under the Master Lease with respect to the Related Month which were not paid when due. "Lease Payment Recoveries" means, as of any Determination Date, an amount equal to all payments made under the Master Lease since the preceding Determination Date on account of past due payments under the Master Lease. "Lessee" means either Thrifty or Dollar, as applicable, in its capacity as a Lessee under the Master Lease, any Additional Lessee, or any successor by merger to Thrifty, Dollar or any Additional Lessee, as applicable, in accordance with Section 25.1 of the Master Lease, or any other permitted successor or assignee of Thrifty or Dollar, as applicable, in its capacity as Lessee, or any Additional Lessee, pursuant to Section 16 of the Master Lease. "Lessee Agreements" means any and all Subleases entered into by any of the Lessees the subject of which includes any Vehicle leased by the Lessor to such Lessee under the Master Lease, and any and all other contracts, agreements, guarantees, insurance, warranties, instruments or certificates entered into or delivered to such Lessee in connection therewith. "Lessor" means RCFC, its capacity as the lessor under the Master Lease, and its successors and assigns in such capacity. "Liquidation Event of Default" means, so long as such event or condition continues, any of the following: (a) any event or condition with respect to RCFC or a Lessee of the type described in Section 8.1(d) of the Base Indenture, (b) a payment default by RCFC under the Base Indenture as specified in Sections 8.1(a) and 8.1(b) thereof, or (c) a Lease Event of Default as specified in Section 8.1(e) thereof (with respect solely to the occurrence of the Lease Events of Default described in Sections 17.1.1(i), 17.1.2 and 17.1.5 under the Master Lease). "Losses" means, with respect to any Related Month, the sum (without duplication) of the following: with respect to Acquired Vehicles (i) all Manufacturer Late Payment Losses, Manufacturer Event of Default Losses and Purchaser Late Payment Losses for such Related Month, plus (ii) with respect to Disposition Proceeds received during the Related Month from the sale or other disposition of Acquired Vehicles (other than pursuant to a Vehicle Disposition Program), the excess, if any, of (x) the Net Book Values of such Acquired Vehicles calculated on the dates of the respective sales or final dispositions thereof, over (y) (1) the aggregate amount of such Disposition Proceeds received during the Related Month in respect of Acquired Vehicles by RCFC, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master -26- 31 Collateral Account) plus (2) any Termination Payments that have accrued with respect to such Acquired Vehicles. "Manufacturer Event of Default" is defined in Section 18 of the Master Lease. "Manufacturer Event of Default Losses" means, with respect to any Related Month, in the event that a Manufacturer Event of Default occurs with respect to any Manufacturer, all payments that are required to be made (and not yet made) by such Manufacturer to RCFC with respect to Acquired Vehicles that are either (i) sold at Auction or returned to such Manufacturer under such Manufacturer's Vehicle Disposition Program, or (ii) subject to an incentive program of such Manufacturer; provided that the grace or other similar period for the determination of such Manufacturer Event of Default expires during such Related Month. "Manufacturer Late Payment Losses" with respect to any Related Month, means all payments required to be made by Manufacturers under such Manufacturers' Vehicle Disposition Programs and incentive programs with respect to Acquired Vehicles, which are not made within ninety (90) days after the related Disposition Dates of such Acquired Vehicles and remain unpaid at the end of such Related Month, but only to the extent that such 90 day periods expire during such Related Month; provided that any payments considered hereunder shall be net of amounts that are the subject of a good faith dispute as evidenced in writing by the Manufacturer questioning the accuracy of the amounts paid or payable in respect of any such Acquired Vehicles. "Market Value" means, with respect to any Non-Program Vehicle as of any date of determination, the market value of such Non-Program Vehicle's model class and model year as specified in the Related Month's published National Automobile Dealers Association, Official Used Car Guide, Central Edition (the "NADA Guide") for the model class and model year of such Vehicle based on the average equipment and the average mileage of each Vehicle of such model class and model year. If such Non-Program Vehicle's model class and model year are not listed in the NADA Guide published in the Related Month preceding such date of determination, then the Black Book Official Finance/Lease Guide (the "Lease Guide") shall be used to estimate the wholesale price of the Non-Program Vehicle, based on the Non-Program Vehicle's model class and model year or the closest model class and model year thereto, for purposes of such months for which the wholesale price for such Vehicle's model class and model year is not so published in the NADA Guide; provided, however, if the NADA Guide was not published in the Related Month, then the Lease Guide shall be relied upon in its place, and if the Lease Guide is unavailable, the Market Value of such Vehicle shall be based upon such other reasonable methodology as determined by the Issuer. -27- 32 "Market Value Adjustment Percentage" means, as of any date on or after the third Determination Date following the Series 1997 1/N1 Closing Date, the lower of (i) the lowest Measurement Month Average of any full Measurement Month within the preceding 12 calendar months and (ii) a fraction expressed as a percentage, the numerator of which equals the average of the aggregate Market Value of Non-Program Vehicles leased under the Master Lease as of the last day of the Related Month and as of the last day of the two Related Months precedent thereto and the denominator of which equals the aggregate Net Book Value of such Non-Program Vehicles as of the immediately preceding Determination Date (or, if the date of determination is a Determination Date, such date). "Master Collateral Agency Agreement" means the Amended and Restated Master Collateral Agency Agreement, dated as of December [__], 1997, among DTAG, as Master Servicer, RCFC, as grantor, Thrifty and Dollar, as grantors and servicers, such other grantors as may become parties thereto, various Financing Sources parties thereto, various Beneficiaries parties thereto and the Master Collateral Agent, as such agreement may be amended, supplemented, restated or otherwise modified from time to time in accordance with its terms. "Master Collateral Agent" means Bankers Trust Company, a New York banking corporation, in its capacity as master collateral agent under the Master Collateral Agency Agreement, unless a successor Person shall have become the master collateral agent pursuant to the applicable provisions of the Master Collateral Agency Agreement, and thereafter "Master Collateral Agent" shall mean such successor Person. "Master Lease" means that certain Master Motor Vehicle Lease and Servicing Agreement, dated as of December __, 1997, among RCFC, as Lessor, Thrifty, as a Lessee and Servicer, Dollar, as a Lessee and Servicer, those additional Subsidiaries and Affiliates of DTAG from time to time becoming Lessees and Servicers thereunder and DTAG, as guarantor and Master Servicer, as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with its terms. "Master Servicer" means DTAG, in its capacity as the Master Servicer under the Master Lease, and its successors and assigns in such capacity in accordance with the terms of the Master Lease. "Material Adverse Effect" means, with respect to any occurrence, event or condition, and any Person, a material adverse effect with respect to: (a) the business, financial condition, operations or assets of such Person; -28- 33 (b) the ability of the such Person to perform its obligations under the Master Lease or any other Related Document; (c) the validity, enforceability or collectibility of amounts payable to the Master Collateral Agent, the Trustee or the Lessor under the Master Lease or the other Related Documents; (d) the status, existence, perfection or first priority of the interests of the Master Collateral Agent and the Trustee, as applicable, in a material portion of the Master Collateral or the Collateral, free of any Liens (other than Permitted Liens); (e) the ability of the Master Collateral Agent, the Trustee or the Lessor to liquidate or foreclose against the Collateral and the Master Collateral; or (f) the practical realization by the Master Collateral Agent, the Trustee or the Lessor of any of the material benefits or security afforded by the Master Lease or any other Related Document. "Maximum Lease Commitment" means, on any date of determination, the sum of (i) the Aggregate Principal Balances on such date for all Group I Series of Notes, plus (ii) with respect to all Group I Series of Notes that provide for Enhancement in the form of overcollateralization, the sum of the available subordinated amounts on such date for each such Group I Series of Notes, plus (iii) the aggregate Net Book Values of all Group I Vehicles leased under the Master Lease on such date that were acquired, financed or refinanced with funds other than proceeds of Group I Series of Notes or related available subordinated amounts, plus (iv) any amounts held in the Retained Distribution Account that the Lessor commits on or prior such date to invest in new Group I Vehicles for Leasing under the Master Lease (as evidenced by a Company Order) in accordance with the terms of the Master Lease and the Indenture. "Maximum Manufacturer Percentage" means, with respect to any Eligible Manufacturer, the percentage amount set forth in Schedule 1 hereto (as such schedule, subject to Rating Agency confirmation, may be amended, supplemented, restated or otherwise modified from time to time) specified for each Eligible Manufacturer with respect to Non-Program Vehicles and Program Vehicles, as applicable, which percentage amount represents the maximum percentage of Eligible Vehicles which are permitted under the Master Lease to be Non-Program Vehicles or Program Vehicles, as the case may be, manufactured by such Manufacturer. "Maximum Non-Program Percentage" means, with respect to Non-Program Vehicles, (a) if the average of the Measured Month Averages for any three Measurement Months during the twelve month period preceding any date of determination shall be less than -29- 34 eighty five percent (85%), 0% or such other percentage amount agreed upon by the Lessor and each of the Lessees, subject to Rating Agency confirmation, which percentage amount represents the maximum percentage of the Aggregate Asset Amount which is permitted under the Master Lease to be invested in Non-Program Vehicles; and (b) at all other times, 100%. "Mazda" means Mazda Motor of America, Inc., a [ ] 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 [500] Non-Program Vehicles were sold at auction or otherwise and (b) at least one-twelfth of the aggregate Net Book Value of the Non-Program Vehicles as of the last day of such calendar month or consecutive calendar months were sold at auction or otherwise; provided that no calendar month included in a Measurement Month shall be included in any other Measurement Month. "Measurement Month Average" means, with respect to any Measurement Month, the percentage equivalent of a fraction, the numerator of which is the aggregate amount of Disposition Proceeds of all Non-Program Vehicles sold at auction or otherwise during such Measurement Month and the denominator of which is the aggregate Net Book Value of such Non-Program Vehicles on the dates of their respective sales. "Minimum Class A Enhancement Amount" means, with respect to any date of determination, the sum of (a) the product of (i) the Class A Program Enhancement Percentage, times (ii) an amount in U.S. Dollars equal to the aggregate Invested Amount for the Series 1997 1/N1 Notes minus the product of (A) the aggregate amount of cash and Permitted Investments in the Group I Collection Account and, to the extent cash and Permitted Investments in the Master Collateral Account are allocable to the Trustee on behalf of the holders of the Group I Series of Notes as Beneficiary pursuant to the Master Collateral Agency Agreement and are not distributable to or at the direction of a Lessee pursuant thereto, such cash and Permitted Investments in the Master Collateral Account as of such date, in each case to the extent allocable to the Group I Series of Notes, times (B) a fraction, the numerator of which shall be the sum of the Invested Amounts for the Series 1997 1/N1 Notes as of such date and the Series 1997 1/N1 Available Subordinated Amount for such date and the denominator of which shall be the greater of (I) the Aggregate Asset Amount as of such date and (II) the sum of the Invested Amounts for all Group I Series of Notes as of such date, times (iii) a fraction, the numerator of which shall be the aggregate Net Book Value of all Program Vehicles as of such date and the denominator of which shall be the aggregate Net Book Value of all Program Vehicles and Non-Program Vehicles as of such date, plus (b) the product of (i) the Class A Non-Program Enhancement -30- 35 Percentage times (ii) an amount in U.S. Dollars equal to the aggregate Invested Amount for the Series 1997 1/N1 Notes as of such date, minus the product of (A) the aggregate amount of cash and Permitted Investments in the Group I Collection Account as of such date and, to the extent cash and Permitted Investments in the Master Collateral Account are allocable to the Trustee on behalf of holders of Group I Series of Notes as Beneficiary pursuant to the Master Collateral Agency Agreement and are not distributable to or at the direction of the Master Servicer pursuant thereto, cash and Permitted Investments in the Master Collateral Account in each case to the extent allocable to the Series 1997 1/N1 Notes, times (B) a fraction, the numerator of which shall be the sum of the Invested Amount for the Series 1997 1/N1 Notes as of such date and the Series 1997 1/N1 Available Subordinated Amount for such date and the denominator of which shall be the greater of (I) the Aggregate Asset Amount as of such date and (II) the sum of the Invested Amounts for all Group I Series of Notes as of such date, times (iii) a fraction, the numerator of which shall be the aggregate Net Book Value of all Non-Program Vehicles as of such date and the denominator of which shall be the aggregate Net Book Value of all Program Vehicles and Non-Program Vehicles as of such date, plus (c) the Additional Overcollateralization Amount as of such date. "Minimum Class B Enhancement Amount" means, with respect to any date of determination, the sum of (a) the product of (i) the Class B Program Enhancement Percentage, times (ii) an amount in U.S. Dollars equal to the aggregate Invested Amount for the Series 1997 1/N1 Notes minus the product of (A) the aggregate amount of cash and Permitted Investments in the Group I Collection Account and, to the extent cash and Permitted Investments in the Master Collateral Account are allocable to the Trustee on behalf of holders of the Group I Series of Notes as Beneficiary pursuant to the Master Collateral Agency Agreement and are not distributable to or at the direction of any Lessee pursuant thereto, cash and Permitted Investments in the Master Collateral Account as of such date, in each case to the extent allocable to any Group I Series of Notes, times (B) a fraction, the numerator of which shall be the sum of the Invested Amount for the Series 1997 1/N1 Notes as of such date and the Series 1997 1/N1 Available Subordinated Amount for such date and the denominator of which shall be the greater of (I) the Aggregate Asset Amount as of such date and (II) the sum of the Invested Amounts for all Group I Series of Notes as of such date, times (iii) a fraction, the numerator of which shall be the aggregate Net Book Value of all Program Vehicles as of such date and the denominator of which shall be the aggregate Net Book Value of all Program Vehicles and Non-Program Vehicles as of such date, plus (b) the product of (i) the Class B Non-Program Enhancement Percentage times (ii) an amount in U.S. Dollars equal to the aggregate Invested Amount for the Series 1997 1/N1 Notes as of such date, minus the product of (A) the aggregate amount of cash and Permitted Investments in the Group I Collection Account as of such date and, to the extent -31- 36 cash and Permitted Investments in the Master Collateral Account are allocable to the Trustee on behalf of holders of the Group I Series of Notes as Beneficiary pursuant to the Master Collateral Agency Agreement and are not distributable to or at the direction of any Lessee pursuant thereto, such cash and Permitted Investments in the Master Collateral Account, in each case to the extent allocable to the Group I Series of Notes, times (B) a fraction, the numerator of which shall be the sum of the Invested Amounts for the Group I Series of Notes as of such date and the Series 1997 1/N1 Available Subordinated Amount for such date and the denominator of which shall be the greater of (I) the Aggregate Asset Amount as of such date and (II) the sum of the Invested Amounts for all Group I Series of Notes as of such date, times (iii) a fraction, the numerator of which shall be the aggregate Net Book Value of all Non-Program Vehicles as of such date and the denominator of which shall be the aggregate Net Book Value of all Program Vehicles and Non-Program Vehicles as of such date, plus (c) the Additional Overcollateralization Amount as of such date. "Minimum Class C Enhancement Amount" means, with respect to any date of determination, the sum of (a) the product of (i) the Class C Program Enhancement Percentage, times (ii) an amount in U.S. Dollars equal to the aggregate Invested Amount for the Series 1997 1/N1 Notes minus the product of (A) the aggregate amount of cash and Permitted Investments in the Group I Collection Account and, to the extent cash and Permitted Investments in the Master Collateral Account are allocable to the Trustee on behalf of the holders of the Group I Series of Notes as Beneficiary pursuant to the Master Collateral Agency Agreement and are not distributable to or at the direction of any Lessee pursuant thereto, cash and Permitted Investments in the Master Collateral Account as of such date, in each case to the extent allocable to any Group I Series of Notes, times (B) a fraction, the numerator of which shall be the sum of the Invested Amount for the Series 1997 1/N1 Notes as of such date and the Series 1997 1/N1 Available Subordinated Amount for such date and the denominator of which shall be the greater of (I) the Aggregate Asset Amount as of such date and (II) the sum of the Invested Amounts for all Group I Series of Notes as of such date, times (iii) a fraction, the numerator of which shall be the aggregate Net Book Value of all Program Vehicles as of such date and the denominator of which shall be the aggregate Net Book Value of all Program Vehicles and Non-Program Vehicles as of such date, plus (b) the product of (i) the Class C Non-Program Enhancement Percentage times (ii) an amount in U.S. Dollars equal to the aggregate Invested Amount for the Series 1997 1/N1 Notes as of such date, minus the product of (A) the aggregate amount of cash and Permitted Investments in the Group I Collection Account as of such date and, to the extent cash and Permitted Investments in the Master Collateral Account are allocable to the Trustee on behalf of the holders of the Group I Series of Notes as Beneficiary pursuant to the Master Collateral Agency Agreement and are not distributable to or at -32- 37 the direction of any Lessee pursuant thereto, such cash and Permitted Investments in the Master Collateral Account, in each case to the extent allocable to the Group I Series of Notes, times (B) a fraction, the numerator of which shall be the sum of the Invested Amounts for the Group I Series of Notes as of such date and the Series 1997 1/N1 Available Subordinated Amount for such date and the denominator of which shall be the greater of (I) the Aggregate Asset Amount as of such date and (II) the sum of the Invested Amounts for all Group I Series of Notes as of such date, times (iii) a fraction, the numerator of which shall be the aggregate Net Book Value of all Non-Program Vehicles as of such date and the denominator of which shall be the aggregate Net Book Value of all Program Vehicles and Non-Program Vehicles as of such date, plus (c) the Additional Overcollateralization Amount as of such date. "Minimum Series 1997 1/N1 Letter of Credit Amount" means, with respect to any date of determination, the greater of (a) an amount equal to (i) 2.0% of the Invested Amount of the Series 1997 1/N1 Notes outstanding on such date, less (ii) any cash on deposit in the Series 1997 1/N1 Cash Collateral Account on such date and (b) an amount equal to (i) the greatest of (x) the Minimum Class A Enhancement Account, (y) the Minimum Class B Enhancement Amount, and (z) the Minimum Class C Enhancement Amount, minus (ii) the Series 1997 1/N1 Available Subordinated Amount. "Minimum Subordinated Amount" means, with respect to any date of determination, the greater of (a) 0.5% of the Invested Amount of the Series 1997 1/N1 Notes outstanding on such date and (b) an amount equal to (i) the greatest of (x) the Minimum Class A Enhancement Account, (y) the Minimum Class B Enhancement Amount, and (z) the Minimum Class C Enhancement Amount, minus (ii) the Series 1997 1/N1 Letter of Credit Amount. "Monthly Base Rent is defined in paragraph 9 of Annex A and paragraph 6 of Annex B to the Master Lease. "Monthly Certificate" is defined in Section 24.4(b) of the Master Lease. "Monthly Finance Rent" is defined in paragraph 6 of Annex B to the Master Lease. "Monthly Supplemental Payment" is defined in paragraph 6 of Annex B to the Master Lease. "Monthly Variable Rent" is defined in paragraph 9 of Annex A to the Master Lease. "Monthly Vehicle Statement" is defined in Section 24.4(f) of the Master Lease. -33- 38 "Nissan" means Nissan Motor Corporation U.S.A., a [ ] corporation. "Non-Program Vehicle" means a Group I Vehicle that, when acquired by RCFC, Thrifty or Dollar, as the case may be, from an Eligible Manufacturer, or when so designated by the Master Servicer, in each case subject to the limitations described herein, is not eligible for inclusion in any Eligible Vehicle Disposition Program. "Note Purchase Agreement" means the Note Purchase Agreement, dated as of December [__], 1997 among RCFC, DTAG and the Initial Purchaser, pursuant to which the Initial Purchaser agrees to purchase the Notes from RCFC, subject to the terms and conditions set forth therein. "Officers' Certificate" means a certificate signed by an Authorized Officer of DTAG, RCFC or a Lessee, as applicable. "Operating Lease" means the Master Lease as supplemented by Annex A to the Master Lease. "Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to DTAG, RCFC or a Lessee, as the case may be, unless the Required Beneficiaries shall notify the Trustee of objection thereto. "Overcollateralization Portion" means, as of any date of determination, (i) the sum of the amounts determined pursuant to clauses(a) and (b) of the definition of Minimum Class A Enhancement Amount as of such date minus (ii) the Series 1997 1/N1 Letter of Credit Amount as of such date. "Payment Date" means the 25th day of each calendar month, or, if such day is not a Business Day, the next succeeding Business Day, commencing February 25, 1998. "Payoff Letter" means a letter addressed to the Lessor and the Trustee from each lender holding a security interest in any Vehicles in the Existing Fleet stating the amount required to be paid to such lender to release such lender's lien or security interest in such Vehicles and agreeing that such lien or security interest shall be released upon payment of such amount to the account specified in such letter. "Permanent Global Class A Notes" has the meaning specified in Section 7.1(b) of this Supplement. "Permanent Global Class A-1 Note" has the meaning specified in Section 7.1(b) of this Supplement. -34- 39 "Permanent Global Class A-2 Note" has the meaning specified in Section 7.1(b) of this Supplement. "Permanent Global Class A-3 Note" has the meaning specified in Section 7.1(b) of this Supplement. "Permanent Global Class B Notes" has the meaning specified in Section 7.2(b) of this Supplement. "Permanent Global Class B-1 Note" has the meaning specified in Section 7.2(b) of this Supplement. "Permanent Global Class B-2 Note" has the meaning specified in Section 7.2(b) of this Supplement. "Permanent Global Class B-3 Note" has the meaning specified in Section 7.2(b) of this Supplement. "Permanent Global Class C Note" has the meaning specified on Section 7.3(b) of this Supplement. "Permanent Global Class C-1 Note" has the meaning specified in Section 7.3(b) of this Supplement. "Permanent Global Class C-2 Note" has the meaning specified in Section 7.3(b) of this Supplement. "Permanent Global Class C-3 Note" has the meaning specified in Section 7.3(b) of this Supplement. "Permitted Investments" means negotiable instruments or securities maturing on or before the Payment Date next occurring after the investment therein, represented by instruments in bearer, registered or book-entry form which evidence (i) obligations the full and timely payment of which are to be made by or is fully guaranteed by the United States of America; (ii) demand deposits of, time deposits in, or certificates of deposit issued by, any depositary institution or trust company incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by Federal or state banking or depositary institution authorities; provided, however, that at the earlier of (x) the time of the investment and (y) the time of the contractual commitment to invest therein, the certificates of deposit or short-term deposits, if any, or long-term unsecured debt obligations (other than such obligation whose rating is based on collateral or on 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 Rating Services, a division of The McGraw-Hill Companies, Inc. ("Standard & Poor's") of "A-1+" and from DCR of at least "D-1+" (if rated by DCR), in the case of certificates of deposit or short-term deposits, or a rating from Standard & Poor's of at least "AA" and from DCR of at -35- 40 least "AA" (if rated by DCR), in the case of long-term unsecured debt obligations; (iii) commercial paper having, at the earlier of (x) the time of the investment and (y) the time of contractual commitment to invest therein, a rating from Standard & Poor's of "A-1+" and from DCR of at least "D-1+" (if rated by DCR); (iv) demand deposits or time deposits which are fully insured by the Federal Deposit Insurance Company; (v) bankers' acceptances issued by any depositary institution or trust company described in clause (ii) above; (vi) investments in money market funds rated at least "AAm" by Standard & Poor's or otherwise approved in writing by Standard & Poor's and rated at least "AA" by DCR (if rated 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+" (if rated by DCR); (viii) repurchase agreements involving any of the Permitted Investments described in clauses (i) and (vii) and the certificates of deposit described in clause (ii) which are entered into with a depository institution or trust company, having a commercial paper or short-term certificate of deposit rating of "A-1+" by Standard & Poor's and of at least "D-1+" from DCR (if rated 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 will not adversely affect any ratings with respect to any series. "Permitted Liens" is defined in Section 25.3 of the Master Lease. "Pool Factor" means, on any Determination Date, (a) with respect to the Class A-1 Notes, a number carried out to eight decimals representing the ratio of the Class A-1 Invested Amount as of such date (determined after taking into account any decreases in the Class A-1 Invested Amount which will occur on the following Payment Date) to the Class A-1 Initial Invested Amount,(b) with respect to the Class A-2 Notes, a number carried out to eight decimals representing the ratio of the Class A-2 Invested Amount as of such date (determined after taking into account any decreases in the Class A-2 Invested Amount which will occur on the following Payment Date) to the Class A-2 Initial Invested Amount, (c) with respect to the Class A-3 Notes, a number carried out to eight decimals representing the ratio of the Class A-3 Invested Amount as of such date (determined after taking into account any decreases in the Class A-3 Invested Amount which will occur on the following Payment Date) to the Class A-3 Initial Invested Amount,(d) with respect to the Class B-1 Notes, a number carried out to eight decimals representing the ratio of the Class B-1 Invested Amount as of such date (determined after taking into account any decreases in the Class B-1 Invested Amount which will occur on the following Payment Date) to the Class B-1 Initial Invested Amount, (e) with respect to the Class B-2 Notes, a number carried out to eight decimals representing the ratio of the Class B-2 Invested Amount as of such date (determined after taking into account any -36- 41 decreases in the Class B-2 Invested Amount which will occur on the following Payment Date) to the Class B-2 Initial Invested Amount, (f) with respect to the Class B-3 Notes, a number carried out to eight decimals representing the ratio of the Class B-3 Invested Amount as of such date (determined after taking into account any decreases in the Class B-3 Invested Amount which will occur on the following Payment Date) to the Class B-3 Initial Invested Amount, (g) with respect to the Class C-1 Notes, a number carried out to eight decimals representing the ratio of the Class C-1 Invested Amount as of such date (determined after taking into account any decreases in the Class C-1 Invested Amount which will occur on the following Payment Date) to the Class C-1 Initial Invested Amount, (h) with respect to the Class C-2 Notes, a number carried out to eight decimals representing the ratio of the Class C-2 Invested Amount as of such date (determined after taking into account any decreases in the Class C-2 Invested Amount which will occur on the following Payment Date) to the Class C-2 Initial Invested Amount, and (i) with respect to the Class C-3 Notes, a number carried out to eight decimals representing the ratio of the Class C-3 Invested Amount as of such date (determined after taking into account any decreases in the Class C-3 Invested Amount which will occur on the following Payment Date) to the Class C-3 Initial Invested Amount. "Power of Attorney" is defined in Section 9 of the Master Lease. "Principal Collections" means Collections other than Series 1997 1/N1 Interest Collections Recoveries and Lease Payment Recoveries. "Private Placement Memorandum" means the Private Placement Memorandum dated December __, 1997, relating to the Series 1997 1/N1 Notes, including the Supplement to Private Placement Memorandum dated December __, 1997, as such Private Placement Memorandum and such Supplement to Private Placement Memorandum may be amended, supplemented, restated or otherwise modified from time to time. "Program Vehicle" means any Group I Vehicle which at the time of purchase or financing by RCFC or a Lessee, as the case may be, is eligible under a Eligible Vehicle Disposition Program. "Qualified Institution" means a depositary institution or trust company (which may include the Trustee) organized under the laws of the United States of America or any one of the states thereof or the District of Columbia; provided, however, that at all times such depositary institution or trust company is a member of the FDIC and has (i) has a long-term indebtedness rating from Standard & Poor's of not lower than "AA" and from DCR of not lower than "[ ]" and a short-term indebtedness of rating -37- 42 from Standard & Poor's not lower than "A-1+" and from DCR of not lower than "[ ]", or (ii) has such other rating which has been approved by the Rating Agencies. "Rating Agencies" means, with respect to the Series 1997 1/N1 Notes, Standard & Poor's and DCR. "Rating Agency Condition" means, with respect to any action, that each Rating Agency shall have notified RCFC, DTAG, the Series 1997 1/N1 Letter of Credit Provider and the Trustee in writing that such action will not result in a reduction or withdrawal of the rating (in effect immediately before the taking of such action) of any outstanding Group I Series of Notes with respect to which it is a Rating Agency and, with respect to the issuance of a new Group I Series of Notes, the "Rating Agency Condition" also means that each rating agency that is referred to in the related Placement Memorandum Supplement as being required to deliver its rating with respect to such Series of Notes shall have notified RCFC, DTAG, the Series 1997 1/N1 Letter of Credit Provider and the Trustee in writing that such rating has been issued by such rating agency. "RCFC" has the meaning set forth in the preamble. "RCFC Obligations" means all principal and interest, at any time and from time to time, owing by RCFC on the Notes and all costs, fees and expenses payable by, or obligations of, RCFC under the Indenture and the Related Documents. "Recoveries" means, with respect to any Related Month, the sum (without duplication) of (i) all amounts received by RCFC, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account) from any Person during such Related Month in respect of Losses, plus (ii) the excess, if any, of (x) the aggregate amount of Disposition Proceeds received during such Related Month by RCFC, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account) and resulting from the sale or other final disposition of Acquired Vehicles (other than pursuant to Vehicle Disposition Programs) plus any Termination Payments that have accrued with respect to such Acquired Vehicles, over (y) the Net Book Values of such Acquired Vehicles, calculated on the dates of the respective sales or dispositions thereof. "Related Documents" means, collectively, the Indenture, the Notes, any Enhancement Agreement, the Master Lease, the Master Collateral Agency Agreement and any grantor supplements and financing source and beneficiary supplements thereto involving the Trustee as Beneficiary, the Chrysler Vehicle Lien Nominee Agreement, the Assignment Agreements and the Note Purchase Agreement. -38- 43 "Rent", with respect to each Acquired Vehicle and each Financed Vehicle, is defined in paragraph 9 of Annex A to the Master Lease and in paragraph 6 of Annex B to the Master Lease. "Repurchase Amount" means, with respect to any Series of Notes, the amount specified in the applicable Supplement. "Repurchase Date" has the meaning specified in Section 8.1(a) of this Supplement. "Repurchase Price" has the meaning specified in Section 8.1(b) of this Supplement. "Required Asset Amount" means with respect to the Series 1997 1/N1 Notes, at any date of determination, the sum of (i) the Invested Amounts for all Group I Series of Notes that do not provide for Enhancement in the form of overcollateralization plus (ii) with respect to all Group I Series of Notes that provide for Enhancement in the form of overcollateralization, the sum of (a) the Invested Amounts for all such Series of Notes, plus (b) the available subordinated amounts required to be maintained as part of the minimum enhancement amount for all such Series of Notes. "Required Beneficiaries" means Noteholders holding in excess of 50% of the aggregate Invested Amount of all outstanding Group I Series of Notes (excluding, for the purposes of making the foregoing calculation, any notes held by DTAG or any Affiliate of DTAG). "Required Noteholders" means Noteholders holding in excess of 50% of the aggregate Invested Amount of the applicable Group I Series of Notes (excluding, for the purposes of making the foregoing calculation, any Notes held by DTAG or any Affiliate of DTAG). "Responsible Officer" means, with respect to DTAG, RCFC, Thrifty, Dollar or any Additional Lessee, any President, Vice President, Assistant Vice President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer, or any officer performing functions similar to those customarily performed by the person who at the time shall be such officer. "Restricted Global Class A Notes" has the meaning specified in Section 7.1(a) of this Supplement. "Restricted Global Class A-1 Note" has the meaning specified in Section 7.1(a) of this Supplement. "Restricted Global Class A-2 Note" has the meaning specified in Section 7.1(a) of this Supplement. "Restricted Global Class A-3 Note" has the meaning specified in Section 7.1(a) of this Supplement. -39- 44 "Restricted Global Class B Notes" has the meaning specified in Section 7.2(a) of this Supplement. "Restricted Global Class B-1 Note" has the meaning specified in Section 7.2(a) of this Supplement. "Restricted Global Class B-2 Note" has the meaning specified in Section 7.2(a) of this Supplement. "Restricted Global Class B-3 Note" has the meaning specified on Section 7.2(a) of this Supplement. "Restricted Global Class C Notes" has the meaning specified in Section 7.3(a) of this Supplement. "Restricted Global Class C-1 Note" has the meaning specified in Section 7.3(a) of this Supplement. "Restricted Global Class C-2 Note" has the meaning specified in Section 7.3(a) of this Supplement. "Restricted Global Class C-3 Note" has the meaning specified in Section 7.3(a) of this Supplement. "Retained Amount" means, on any date of determination, the amount, if any, by which the Aggregate Asset Amount at the end of the day immediately prior to such date of determination, exceeds the Required Asset Amount at the end of such day. "Retained Interest" means the transferable indirect interest in RCFC's assets held by the Retained Interestholder to the extent relating to the Group I Collateral, including the right to receive payments with respect to such collateral in respect of the Retained Amount. "Retained Interest Percentage" means, on any date of determination, when used with respect to Collections that are Principal Collections, Recoveries, Lease Payment Recoveries, Losses, Lease Payment Losses and other amounts, an amount equal to one hundred percent (100%) minus the sum of (i) the invested percentages for all outstanding Group I Series of Notes including all classes of such Series of Notes and (ii) the available subordinated amount percentages for all Group I 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 Collections that are Principal Collections, Recoveries, Lease Payment Recoveries, Losses, Lease Payment Losses and other amounts, as applicable. "Retained Interestholder" means DTAG or any permitted successor or assign. -40- 45 "Series 1997 1/N1 Accrued Interest Account" has the meaning specified in Section 4.6(b) of this Supplement. "Series 1997 1/N1 Available Subordinated Amount" means, for any date of determination, an amount equal to (a) the Series 1997 1/N1 Available Subordinated Amount for the preceding Determination Date, minus (b) the Series 1997 1/N1 Available Subordinated Amount Incremental Losses for the Related Month, plus (c) the Series 1997 1/N1 Available Subordinated Amount Incremental Recoveries for the Related Month, minus (d) the Series 1997 1/N1 Lease Payment Losses allocable to the Series 1997 1/N1 Available Subordinated Amount pursuant to Section ___________________ of this Supplement since the preceding Determination Date, plus (e) the Series 1997 1/N1 Lease Payment Recoveries allocable to the Series 1997 1/N1 Available Subordinated Amount pursuant to Section ______________ of this Supplement since the preceding Determination Date, plus (f) additional amounts, if any, contributed by RCFC since the preceding Determination Date (or in the case of the first Determination Date, since the Series 1997 1/N1 Closing Date) to the Series 1997 1/N1 Excess Funding Account for allocation to the Series 1997 1/N1 Available Subordinated Amount, plus (g) the aggregate Net Book Value of additional Eligible Vehicles contributed by DTAG since the preceding Determination Date (or in the case of the first Determination Date, since the Closing Date) as Master Collateral for allocation to the Series 1997 1/N1 Available Subordinated Amount pursuant to the Indenture, minus (h) any amounts withdrawn from the Series 1997 1/N1 Excess Funding Account since the preceding Determination Date (or in the case of the first Determination Date, since the Series 1997 1/N1 Closing Date) for allocation to the Retained Distribution Account. The "Series 1997 1/N1 Available Subordinated Amount" for the Series 1997 1/N1 Closing Date through the first Determination Date shall mean $___________. "Series 1997 1/N1 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 1997 1/N1 Available Subordinated Amount pursuant to Section ________________ of this Supplement. "Series 1997 1/N1 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 1997 1/N1 Available Subordinated Amount pursuant to Section _______________ of this Supplement. "Series 1997 1/N1 Available Subordinated Amount Maximum Increase" means 1.1% of the sum of the Series 1997 1/N1 Initial Invested Amount and the Series 1997 1/N1 Available Subordinated Amount provided, however, that if (i) a Series 1997 1/N1 Enhancement Deficiency arises out of any Losses or Lease Payment Losses and (ii) the Rating Agencies shall have notified RCFC and the Trustee in writing that, after cure of such Series 1997 1/N1 Enhancement -41- 46 Deficiency is provided for, the Class A Notes, the Class B Notes and the Class C Notes will each receive the same rating from the Rating Agencies as they received prior to the occurrence of such Series 1997 1/N1 Enhancement Deficiency, then the Series 1997 1/N1 Available Subordinated Amount Maximum Increase applicable to the cure of such Series 1997 1/N1 Enhancement Deficiency shall not be limited in amount. "Series 1997 1/N1 Cash Collateral Account" has the meaning specified in Sections 4.20 and 4.21 of this Supplement. "Series 1997 1/N1 Cash Collateral Account Surplus" means, as of any date of determination subsequent to the establishment and funding of the Series 1997 1/N1 Cash Collateral Account pursuant to Section 4.21(a) of this Supplement, the amount, if any, by which (a) the Series 1997 1/N1 Letter of Credit Amount exceeds (b) the Minimum Series 1997 1/N1 Letter of Credit Amount. "Series 1997 1/N1 Closing Date" means December __, 1997. "Series 1997 1/N1 Collection Account" has the meaning specified in Section 4.6(a) of this Supplement. "Series 1997 1/N1 Controlled Amortization Period" means any or all of the Class A-1 Controlled Amortization Period, the Class A-2 Controlled Amortization Period, the Class A-3 Controlled Amortization Period, the Class B-1 Controlled Amortization Period, the Class B-2 Controlled Amortization Period the Class B-3 Controlled Amortization Period, the Class C-1 Controlled Amortization Period, the Class C-2 Controlled Amortization Period and the Class C-3 Controlled Amortization Period, as the context requires. "Series 1997 1/N1 Deposit Date" has the meaning specified in Section 4.7 of this Supplement. "Series 1997 1/N1 Enhancement Deficiency" means, with respect to any date of determination, the amount, if any, by which (a) the Class A Enhancement Amount is less than the Minimum Class A Enhancement Amount for such day, (b) the Class B Enhancement Amount is less than the Minimum Class B Enhancement Amount for such day, or (c) the Class C Enhancement Amount is less than the Minimum Class C Enhancement Amount for such day, as the context requires. "Series 1997 1/N1 Enhancement Factor" means, as of any date of determination, an amount equal to (i) 100% minus (ii) the percentage equivalent of a fraction, the numerator of which is the sum of the amounts determined pursuant to clauses (a) and (b) of the definition of Minimum Class C Enhancement Amount as of such date and the denominator of which is the Invested Amount for the Series 1997 1/N1 Notes as of such date. -42- 47 "Series 1997 1/N1 Excess Funding Account" has the meaning specified in "Section 4.6(a) of this Supplement. "Series 1997 1/N1 Initial Invested Amount" means $900,000,000. "Series 1997 1/N1 Interest Collections" means on any date of determination, all Collections which represent Monthly Variable Rent, Monthly Finance Rent or the Availability Payment accrued with respect to the Series 1997 1/N1 Notes, plus the Series 1997 1/N1 Invested Percentage of any amounts earned on Permitted Investments in the Collection Account which constitute Group I Collateral and which are available for distribution on such date. "Series 1997 1/N1 Interest Period" means a period from and including a Payment Date to but excluding the next succeeding Payment Date; provided, however, that the initial Series 1997 1/N1 Interest Period shall be from the Series 1997 1/N1 Closing Date to the initial Payment Date. "Series 1997 1/N1 Invested Percentage" means, on any date of determination: (i) when used with respect to Principal Collections, Losses, Lease Payment Losses, Recoveries, Lease Payment Recoveries and other amounts during the Series 1997 1/N1 Revolving Period, the percentage equivalent of a fraction, the numerator of which shall be an amount equal to the sum of (x) the Invested Amount and (y) the Series 1997 1/N1 Available Subordinated Amount, in each case as of the end of the second preceding Related Month or, until the end of the second Related Month, as of the Series 1997 1/N1 Closing Date, and the denominator of which shall be the greater of (A) the Aggregate Asset Amount as of the end of the second preceding Related Month or, until the end of the second Related Month, as of the Series 1997 1/N1 Closing Date, and (B) as of the same date as in clause (A), the sum of the numerators used to determine (i) invested percentages for allocations with respect to Principal Collections (for all Group I Series of Notes including all classes of such Series of Notes) and (ii) available subordinated amount percentages for allocations with respect to Principal Collections (for all Group I Series of Notes that provide for credit enhancement in the form of overcollateralization); and (ii) when used with respect to Principal Collections, Losses, Lease Payment Losses, Recoveries, Lease Payment Recoveries and other amounts during the Series 1997 1/N1 Controlled Amortization Period and the Series 1997 1/N1 Rapid Amortization Period, the percentage equivalent of a fraction, the numerator of which shall be an amount equal to the sum of (x) the Invested Amount and (y) the Series 1997 1/N1 Available Subordinated Amount, in each case as of the end of -43- 48 the related Series 1997 1/N1 Revolving Period, and the denominator of which shall be the greater of (A) the Aggregate Asset Amount as of the end of the second preceding Related Month and (B) as of the same date as in clause (A), the sum of the numerators used to determine (i) invested percentages for allocations with respect to Principal Collections (for all Group I Series of Notes including all classes of such Series of Notes) and (ii) available subordinated amount percentages for allocations with respect to Principal Collections (for all Group I Series of Notes that provide for credit enhancement in the form of overcollateralization). "Series 1997 1/N1 Investor Monthly Servicing Fee" means the Series 1997 1/N1 Invested Percentage of the Group I Monthly Servicing Fee. "Series 1997 1/N1 Lease Payment Losses" means, as of any Determination Date and the Related Payment Date, an amount equal to the Series 1997 1/N1 Invested Percentage of Lease Payment Losses as of such date. "Series 1997 1/N1 Lease Payment Recoveries" means, for any Determination Date and the Related Payment Date, the Series 1997 1/N1 Invested Percentage of all Lease Payment Recoveries received during the Related Month. "Series 1997 1/N1 Letter of Credit" means the irrevocable letter of credit issued by the Series 1997 1/N1 Letter of Credit Provider in favor of the Trustee for the benefit of the Series 1997 1/N1 Noteholders pursuant to the Series 1997 1/N1 Letter of Credit Reimbursement Agreement. "Series 1997 1/N1 Letter of Credit Amount" means, as of any date of determination, the amount (a) available to be drawn on such date under the Series 1997 1/N1 Letter of Credit, as specified therein or (b) if the Series 1997 1/N1 Cash Collateral Account has been established and funded pursuant to Section 4.21, the amount on deposit in the Series 1997 1/N1 Cash Collateral Account on such date. "Series 1997 1/N1 Letter of Credit Expiration Date" means the date the Series 1997 1/N1 Letter of Credit expires as specified in the Series 1997 1/N1 Letter of Credit. "Series 1997 1/N1 Letter of Credit Provider" means Credit Suisse First Boston, a Swiss banking corporation, or such other Person in accordance with the terms of the Series 1997 1/N1 Letter of Credit Reimbursement Agreement. "Series 1997 1/N1 Letter of Credit Reimbursement Agreement" means the Series 1997 1/N1 Letter of Credit Reimbursement Agreement, dated as of 1997, between RCFC and the Series 1997 1/N1 -44- 49 Letter of Credit Provider as such agreement may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof. "Series 1997 1/N1 Limited Liquidation Event of Default" means, so long as such event or condition continues, any event or condition of the type specified in Section 5.1 of this Supplement that continues for thirty (30) days (without double counting the five (5) Business Day cure period provided for in said Section 5.1); provided, however, that such event or condition shall not constitute a Series 1997 1/N1 Limited Liquidation Event of Default if (i) within such thirty (30) day period, DTAG shall have contributed a portion of the Retained Interest or reallocated Eligible Vehicles from the Retained Interest to the Series 1997 1/N1 Available Subordinated Amount in accordance with Section 4.7(d)(E) sufficient to cure the Series 1997 1/N1 Enhancement Deficiency and (ii) the Rating Agencies shall have notified RCFC, DTAG and the Trustee in writing that after such cure of such Series 1997 1/N1 Enhancement Deficiency is provided for, the Class A Notes, the Class B Notes and the Class C Notes will each receive the same rating from the Rating Agencies as they received prior to the occurrence of such Series 1997 1/N1 Enhancement Deficiency. "Series 1997 1/N1 Monthly Servicing Fee" means the Series 1997 1/N1 Invested Percentage of the sum of (a) the Group I Monthly Servicing Fee and (b) the Group I Supplemental Servicing Fee. "Series 1997 1/N1 Monthly Supplemental Servicing Fee" means the Series 1997 1/N1 Invested Percentage of the Group I Supplemental Servicing Fee. "Series 1997 1/N1 Note Prepayment Premium" has the meaning specified in Section 8.1(c) of this Supplement. "Series 1997 1/N1 Noteholders" means, collectively, the Class A Noteholders, the Class B Noteholders and the Class C Noteholders. "Series 1997 1/N1 Notes" has the meaning specified in the first paragraph of Article 1 of this Supplement. "Series 1997 1/N1 Principal Allocation" has the meaning specified in Section 4.7(a)(x)(ii) of this Supplement. "Series 1997 1/N1 Rapid Amortization Period" means the period beginning at the close of business on the Business Day immediately preceding the day on which an Amortization Event is deemed to have occurred with respect to the Series 1997 1/N1 Notes and ending upon the earliest to occur of (i) the date on which the Series 1997 1/N1 Notes are paid in full, (ii) the Series 1997 1/N1 Termination Date and (iii) the termination of the Indenture in accordance with its terms. -45- 50 "Series 1997 1/N1 Revolving Period" means, with respect to any class of the Series 1997 1/N1 Notes, the period from and including the Series 1997 1/N1 Closing Date to the earlier of (i) the commencement of the Series 1997 1/N1 Controlled Amortization Period related to such class of Notes and (ii) the commencement (if any) of the Series 1997 1/N1 Rapid Amortization Period. "Series 1997 1/N1 Termination Date" means, (a) with respect to the Class A-1 Notes, Class B-1 Notes and Class C-1 Notes, the September 2002 Payment Date, (b) with respect to the Class A-2 Notes, the Class B-2 Notes and the Class C-2 Notes, the August 2004 Payment Date and (c) with respect to the Class A-3 Notes, the Class B-3 Notes and the Class C-3 Notes, the June 2006 Payment Date. "Servicer" means Thrifty, Dollar or any Additional Lessee, as applicable, in its capacity as a servicer under the Master Lease and any successor servicer thereunder. "Shared Principal Collections" means, as of any Payment Date, Principal Collections allocable to a Group I Series of Notes as of such Payment Date that are not required to make principal payments with respect to such Group I Series of Notes as of such Payment Date under the related Series Supplement and are allocable in accordance with the terms of such Series Supplement to make payments on other Group I Series of Notes. "Sublease" means a standardized lease agreement, for the leasing of Vehicles, between a Lessee, as lessor, and an Eligible Franchisee, as lessee. "Supplemental Documents" is defined in Section 2.1 of the Master Lease. "Temporary Global Class A Notes" has the meaning specified in Section 7.1(b) of this Supplement. "Temporary Global Class A-1 Note" has the meaning specified in Section 7.1(b) of this Supplement. "Temporary Global Class A-2 Note" has the meaning specified in Section 7.1(b) of this Supplement. "Temporary Global Class A-3 Note" has the meaning specified in Section 7.1(b) of this Supplement. "Temporary Global Class B Notes" has the meaning specified in Section 7.2(b) of this Supplement. "Temporary Global Class B-1 Note" has the meaning specified in Section 7.2(b) of this Supplement. -46- 51 "Temporary Global Class B-2 Note" has the meaning specified in Section 7.2(b) of this Supplement. "Temporary Global Class B-3 Note" has the meaning specified in Section 7.2(b) of this Supplement. "Temporary Global Class C Note" has the meaning specified in Section 7.3(b) of this Supplement. "Temporary Global Class C-1 Note" has the meaning specified in Section 7.3(b) of this Supplement. "Temporary Global Class C-2 Note" has the meaning specified in Section 7.3(b) of this Supplement. "Temporary Global Class C-3 Note" has the meaning specified in Section 7.3(b) of this Supplement. "Term" is defined in Section 3.2 of the Master Lease. "Termination Payment" is defined in Section 12.3 of the Master Lease. "Texas Vehicles" means Eligible Vehicles acquired by Dollar or Thrifty on or after the Lease Commencement Date for lease in the State of Texas. "Toyota" means Toyota Motor Sales, U.S.A., Inc., a [ ] corporation "U.S. Dollar" means the lawful currency of the United States of America. "Vehicle Acquisition Schedule" is defined in Section 2.1 of the Master Lease. "Vehicle Lease Commencement Date" is defined in Section 3.1 of the Master Lease. "Vehicle Lease Expiration Date", with respect to each Group I Vehicle, means the earliest of (i) the Disposition Date for such Group I Vehicle, (ii) if such Group I Vehicle becomes a Casualty, the date funds in the amount of the Net Book Value thereof are received by the Lessor, the Master Collateral Agent or the Trustee (including deposit into the Collection Account or the Master Collateral Account) from any of the Lessees in accordance with the Master Lease, and (iii) the Maximum Vehicle Lease Term of the Operating Lease and the Financing Lease, as applicable, as specified in, respectively, paragraph 5 of each of Annex A and Annex B to the Master Lease. "Vehicle Order" is defined in Section 2.1 of the Master Lease. -47- 52 "Vehicle Term" is defined in Section 3.1 of the Master Lease. "VIN" is defined in Section 18 of the Master Lease. ARTICLE 3 [RESERVED] ARTICLE 4 ALLOCATION AND APPLICATION OF COLLECTIONS Any provisions of Article 4 of the Base Indenture which allocate and apply Collections shall continue to apply irrespective of the issuance of the Series 1997 1/N1 Notes. Sections 4.1 through 4.5 of the Base Indenture shall be read in their entirety as provided in the Base Indenture, provided that for purposes of the Series 1997 1/N1 Notes clauses (c), (d) and (e) of Section 4.2 of the Base Indenture shall read as follows: (c) Right of Master 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 (x) the Master Servicer is DTAG or an Affiliate of DTAG and (y) the Retained Interest Amount equals or exceeds zero, the Master Servicer (i) may make or cause to be made deposits of Collections to the Group I Collection Account net of any amounts which are allocable to the Retained Distribution Account and represent amounts due and owing to it in its capacity as Master Servicer and (ii) need not deposit or cause to be deposited any amounts to be paid to the Master Servicer pursuant to this Section 4.2 and such amounts will be deemed paid to the Master Servicer, as the case may be, pursuant to this Section 4.2. (d) Sharing Collections. To the extent that Principal Collections that are allocated to the Series 1997 1/N1 Notes on a Payment Date are not needed to make payments of principal to Series 1997 1/N1 Noteholders or required to be deposited in the Series 1997 1/N1 Distribution Account on such Payment Date, such Principal Collections may, at the direction of the Master Servicer, be applied to cover principal payments due to or for the benefit of Noteholders of other Group I Series of Notes. Any such reallocation will not result in a reduction of the Aggregate Principal Balance or in the Invested Amount of the Series 1997 1/N1 Notes. (e) Unallocated Principal Collections. If, after giving effect to Section 4.2(d), Principal Collections allocated to the Series 1997 1/N1 Notes on any Payment Date are in excess of -48- 53 the amount required to pay amounts due in respect of the Series 1997 1/N1 Notes on such Payment Date in full, then any such excess Principal Collections shall be allocated to the Retained Distribution Account (to the extent that the Retained Interest Amount equals or exceeds zero) and provided Series 1997 1/N1 Enhancement Deficiency or Asset Amount Deficiency exists or would result from such allocation. In addition, for purposes of Section 4.2(a) of the Base Indenture, the Master Servicer in its capacity as such under the Master Lease shall cause all Collections allocable to Group I Collateral in accordance with the Indenture and the Master Collateral Agency Agreement, as applicable, to be paid directly into the Group I Collection Account or the Master Collateral Account, as applicable. Article 4 of the Base Indenture (except for Sections 4.1 through 4.5 thereof subject to the proviso in the first paragraphs of this Article 4 and the immediately preceding sentence) shall read in its entirety as follows and shall be applicable only to the Series 1997 1/N1 Notes: Section 4.6 Establishment of Group I Collection Account, Series 1997 1/N1 Collection Account, Series 1997 1/N1 Excess Funding Account, and Series 1997 1/N1 Accrued Interest Account. (a) The Trustee will create three administrative sub-accounts within the Collection Account. One sub-account will be established for the benefit of holders of Notes from a Group I Series of Notes (such sub-account, the "Group I Collection Account"). Another sub-account will be established for the benefit of the Series 1997 1/N1 Noteholders (such sub-account, the "Series 1997 1/N1 Collection Account"). A third sub-account will be established for the benefit of the Series 1997 1/N1 Noteholders (such sub-account, the "Series 1997 1/N1 Excess Funding Account"). (b) The Trustee will further divide the Series 1997 1/N1 Collection Account by creating an additional administrative sub-account for the Series 1997 1/N1 Noteholders (such sub-account, the "Series 1997 1/N1 Accrued Interest Account"). (c) All Collections in respect of the Group I Collateral and allocable to the Group I Series of Notes shall be allocated to the Group I Collection Account. All Collections in the Group I Collection Account allocable to the Series 1997 1/N1 Notes and the Series 1997 1/N1 Available Subordinated Amount shall be -49- 54 allocated to the Series 1997 1/N1 Collection Account as provided hereinbelow. Section 4.7 Allocations with Respect to the Series 1997 1/N1 Notes. The proceeds from the sale of the Series 1997 1/N1 Notes, together with any funds deposited with RCFC by DTAG, will, on the Series 1997 1/N1 Closing Date, be deposited by the Trustee into the Collection Account and, concurrently with such initial deposit, allocated by the Trustee to the Series 1997 1/N1 Excess Funding Account. On each Business Day on which Collections are deposited into the Series 1997 1/N1 Collection Account (each such date, a "Series 1997 1/N1 Deposit Date"), the Mater Servicer will direct the Trustee in writing to allocate all amounts deposited into the Series 1997 1/N1 Collection Account in accordance with the provisions of this Section 4.7: (a) Allocations During the Revolving Period. During the Series 1997 1/N1 Revolving Period, the Master Servicer will direct the Trustee to allocate, prior to 1:00 p.m. (New York City time) on each Series 1997 1/N1 Deposit Date, all amounts deposited into the Group I Collection Account as set forth below: (i) with respect to all Collections (including Recoveries): (1) allocate to the Series 1997 1/N1 Collection Account an amount equal to the Series 1997 1/N1 Interest Collections received on such day. All such amounts allocated to the Series 1997 1/N1 Collection Account shall be further allocated to the Series 1997 1/N1 Accrued Interest Account; provided, however, that if with respect to any Related Month the aggregate of all such amounts allocated to the Series 1997 1/N1 Accrued Interest Account during such Related Month exceeds the amount of interest and fees due and payable in respect of the Series 1997 1/N1 Notes on the Payment Date next succeeding such Related Month pursuant to Sections 4.8(a), (b), and (c), then the amount of such excess shall be allocated to the Series 1997 1/N1 Excess Funding Account; (2) allocate to the Series 1997 1/N1 Excess Funding Account an amount equal to the Series 1997 1/N1 Invested Percentage (as of such day) of the aggregate amount of Collections -50- 55 that are Principal Collections on such day (for any such day, such amount, the "Series 1997 1/N1 Principal Allocation"); and (3) allocate to the Retained Distribution Account an amount equal to (x) the applicable Retained Interest Percentage (as of such day) of the aggregate amount of Collections that are Principal Collections on such date, minus (y) any amounts, other than Servicing Fees, which have been withheld by the Master Servicer pursuant to Section 4.2(c) of the Base Indenture to the extent such amounts withheld under Section 4.2(c) of the Base Indenture represent all or part of the Retained Amount; (ii) with respect to all Recoveries: (1) allocate an amount equal to the Series 1997 1/N1 Invested Percentage (as of such day) of the aggregate amount of Recoveries on such day, first, to replenish the Class A Invested Amount, pro rata among the sub-classes comprising the Class A Invested Amount, to the extent that the Class A Invested Amount has theretofore been reduced as a result of any Losses allocated thereto pursuant to clause (iii) below and not replenished pursuant to this clause (ii); second, to replenish the Class B Invested Amount, pro rata among the sub-classes comprising the Class B Invested Amount, to the extent that the Class B Invested Amount has theretofore been reduced as a result of any Losses allocated thereto pursuant to clause (iii) below and not replenished pursuant to this clause (ii)); third, to replenish the Class C Invested Amount, pro rata among the sub-classes comprising the Class C Invested Amount, to the extent that the Class C Invested Amount has theretofore been reduced as a result of any Losses allocated thereto pursuant to clause (iii) below and not replenished pursuant to this clause (ii)); fourth, to replenish the Series 1997 1/N1 Cash Collateral Account to the extent withdrawals have theretofore been made pursuant to Section 4.19(b) as a result of any Losses allocated to the Demand Note pursuant to clause (iii) below that have not been paid under such Demand Note and not replenished pursuant to this clause (ii); -51- 56 fifth, to replenish the Series 1997 1/N1 Available Subordinated Amount to the extent that the Series 1997 1/N1 Available Subordinated Amount has theretofore been reduced as a result of any Losses allocated thereto pursuant to clause (iii) below and not replenished pursuant to this clause (ii); and sixth, any remaining Recoveries not so allocated shall be released to the Issuer and available, at the Issuer's option, to be loaned to DTAG under the Demand Note or used for other corporate purposes; and (2) allocate to the Retained Amount an amount equal to the Retained Interest Percentage (as of such day) of the aggregate amount of Recoveries on such date to the extent that the Retained Amount has theretofore been reduced as a result of any Losses allocated thereto pursuant to clause (iii) below and not replenished pursuant to this clause (ii); (iii) with respect to all Losses: (1) allocate an amount equal to the Series 1997 1/N1 Invested Percentage (as of such day) of the aggregate amount of Losses on such day, first, to reduce the Series 1997 1/N1 Available Subordinated Amount until the Series 1997 1/N1 Available Subordinated Amount has been reduced to zero; second, allocate remaining losses to making a claim under the Demand Note until such claim would reduce the Demand Note to zero; third, allocate remaining losses to reduce the Class C Invested Amount on a pro rata basis among the sub-classes comprising the Class C Invested Amount, until the Class C Invested Amount has been reduced to zero; fourth, allocate remaining Losses to reduce the Class B Invested Amount on a pro rata basis among the sub-classes comprising the Class B Invested Amount until the Class B Invested Amount has been reduced to zero; and fifth, allocate remaining Losses to reduce the Class A Invested Amount on a pro rata basis among the sub-classes comprising the Class A Invested Amount until the Class A Invested Amount has been reduced to zero; and (2) allocate to the Retained Amount an amount equal to the Retained Interest -52- 57 Percentage (as of such day) of the aggregate amount of such Losses on such day, which amount shall reduce the Retained Amount. (iv) with respect to all Lease Payment Recoveries: (1) allocate an amount equal to the Series 1997 1/N1 Invested Percentage (as of such day) of the aggregate amount of Lease Payment Recoveries on such day, first, to replenish the Class A Invested Amount, pro rata among the sub-classes comprising the Class A Invested Amount, to the extent that the Class A Invested Amount has theretofore been reduced as a result of any Lease Payment Losses allocated thereto pursuant to clause (v) below and not replenished pursuant to this clause (iv); second, to replenish the Class B Invested Amount, pro rata among the sub-classes comprising the Class B Invested Amount, to the extent that the Class B Invested Amount has theretofore been reduced as a result of any Lease Payment Losses allocated thereto pursuant to clause (v) below and not replenished pursuant to this clause (iv)); third, to replenish the Class C Invested Amount, pro rata among the subclasses comprising the Class C Invested Amount, to the extent that the Class C Invested Amount has theretofore been reduced as a result of any Lease Payment Losses allocated thereto pursuant to clause (v) below and not replenished pursuant to this clause (iv)); fourth, to replenish the Series 1997 1/N1 Cash Collateral Account to the extent withdrawals have theretofore been made pursuant to Section 4.18(b) as a result of any Lease Payment Losses allocated to the Series 1997 1/N1 Letter of Credit pursuant to clause (v) below that have not been paid under such Demand Note and not replenished pursuant to this clause (iv); fifth, to replenish the Series 1997 1/N1 Available Subordinated Amount to the extent that the Series 1997 1/N1 Available Subordinated Amount has theretofore been reduced as a result of any Lease Payment Losses allocated thereto pursuant to clause (v) below and not replenished pursuant to this clause (iv); and sixth, any remaining Recoveries not so allocated shall be released to the Issuer and available, at the Issuer's option, to be -53- 58 loaned to DTAG under the Demand Note or used for other corporate purposes; and (2) allocate to the Retained Amount an amount equal to the Retained Interest Percentage (as of such day) of the aggregate amount of Recoveries on such date to the extent that the Retained Amount has theretofore been reduced as a result of any Losses allocated thereto pursuant to clause (v) below and not replenished pursuant to this clause (ii)); (v) with respect to all Lease Payment Losses: (1) allocate an amount equal to the Series 1997 1/N1 Invested Percentage (as of such day) of the aggregate amount of Lease Payment Losses on such day, first, to reduce the Series 1997 1/N1 Available Subordinated Amount until the Series 1997 1/N1 Available Subordinated Amount has been reduced to zero; second, allocate remaining Lease Payment Losses to making a drawing under the Series 1997 1/N1 Letter of Credit until such drawing would reduce the Series 1997 1/N1 Letter of Credit Amount to zero; third, allocate remaining Lease Payment Losses to reduce the Class C Invested Amount on a pro rata basis among the sub-classes comprising the Class C Invested Amount, until the Class C Invested Amount has been reduced to zero; fourth, allocate remaining Lease Payment Losses to reduce the Class B Invested Amount on a pro rata basis among the sub-classes comprising the Class B Invested Amount until the Class B Invested Amount has been reduced to zero; and fifth, allocate remaining Lease Payment Losses to reduce the Class A Invested Amount on a pro rata basis among the sub-classes comprising the Class A Invested Amount until the Class A Invested Amount has been reduced to zero; and (2) allocate to the Retained Amount an amount equal to the Retained Interest Percentage (as of such day) of the aggregate amount of such Lease Payment Losses on such day, which amount shall reduce the Retained Amount. -54- 59 (b) Allocations During the Series 1997 1/N1 Controlled Amortization Period. During the Series 1997 1/N1 Controlled Amortization Period, the Master Servicer will direct the Trustee to allocate, prior to 1:00 p.m. (New York City time) on each Series 1997 1/N1 Deposit Date, all amounts deposited into the Group I Collection Account as set forth below: (i) with respect to all Collections (including Recoveries): (1) allocate to the Series 1997 1/N1 Collection Account an amount determined as set forth in Section 4.7(a)(i)(1) above for such day, which amount shall be deposited in the Series 1997 1/N1 Accrued Interest Account and, as to the extent provided in Section 4.7(a)(i)(1) above, allocated to the Series 1997 1/N1 Excess Funding Account; (2) (A) during the Class A-1 Controlled Amortization Period, allocate to the Series 1997 1/N1 Collection Account an amount equal to the Series 1997 1/N1 Principal Allocation for such day, which amount shall be used to make principal payments in respect of the Class A-1 Notes; provided, however, that if the Series 1997 1/N1 Principal Allocation exceeds the Class A-1 Controlled Distribution Amount for the Related Month such excess shall be allocated to the Series 1997 1/N1 Excess Funding Account; (B) during the Class A-2 Controlled Amortization Period, allocate to the Series 1997 1/N1 Collection Account an amount equal to the Series 1997 1/N1 Principal Allocation for such day, which amount shall be used to make principal payments in respect of the Class A-2 Notes; provided, however, that if the Series 1997 1/N1 Principal Allocation exceeds the Class A-2 Controlled Distribution Amount for the Related Month, then such excess shall be allocated to the Series 1997 1/N1 Excess Funding Account; (C) during the Class A-3 Controlled Amortization Period, allocate to the Series 1997 1/N1 Collection Account an amount equal to the Series 1997 1/N1 Principal Allocation for such day, which amount shall be used to make principal payments in respect of the Class A-3 Notes; provided, however, that if the Series 1997 1/N1 Principal Allocation exceeds the Class A-3 Controlled Distribution Amount for the Related Month, then such excess shall -55- 60 be allocated to the Series 1997 1/N1 Excess Funding Account; (D) during the Class B-1 Controlled Amortization Period, allocate to the Series 1997 1/N1 Collection Account an amount equal to the Series 1997 1/N1 Principal Allocation for such day, which amount shall be used to make principal payments in respect to the Class B-1 Notes; provided, however, that if the Series 1997 1/N1 Principal Allocation exceeds the Class B-1 Controlled Distribution Amount, then such excess shall be allocated to the Series 1997 1/N1 Excess Funding Account for the Related Month; (E) during the Class B-2 Controlled Amortization Period, allocate to the Series 1997 1/N1 Collection Account an amount equal to the Series 1997 1/N1 Principal Allocation for such day, which amount shall be used to make principal payments in respect of the Class B-2 Notes; provided, however, that if the Series 1997 1/N1 Principal Allocation exceeds the Class B-2 Controlled Distribution Amount for the Related Month, then such excess will be allocated to the Series 1997 1/N1 Excess Funding Account for the Related Month; (F) during the Class B-3 Controlled Amortization Period, allocate to the Series 1997 1/N1 Collection Account an amount equal to the Series 1997 1/N1 Principal Allocation for such day, which amount shall be used to make principal payments in respect of the Class B- 3 Notes; provided, however, that if the Series 1997 1/N1 Principal Allocation exceeds the Class B-3 Controlled Distribution Amount for the Related Month, then such excess shall be allocated to the Series 1997 1/N1 Excess Funding Account for the Related Month; (G) during the Class C-1 Controlled Amortization Period, allocate to the Series 1997 1/N1 Collection Account an amount equal to the Series 1997 1/N1 Principal Allocation for such day, which amount shall be used to make principal payments in respect of the Class C-1 Notes; provided, however, that if the Series 1997 1/N1 Principal Allocation exceeds the Class C-1 Controlled Distribution Amount for the Related Month, then such excess shall be allocated to the Series 1997 1/N1 Excess Funding Account; (H) during the Class C-2 Controlled Amortization Period, allocate to the Series 1997 1/N1 Collection Account an amount equal to the Series 1997 1/N1 Principal Allocation for such day, which amount shall -56- 61 be used to make principal payments in respect of the Class C-2 Notes; provided, however, that if the Series 1997 1/N1 Principal Allocation exceeds the Class C-2 Controlled Distribution Amount for the Related Month, then such excess shall be allocated to the Series 1997 1/N1 Excess Funding Account; and (I) during the Class C-3 Controlled Amortization Period, allocate to the Series 1997 1/N1 Collection Account an amount equal to the Series 1997 1/N1 Principal Allocation for such day, which amount shall be used to make principal payments in respect of the Class C-3 Notes; provided, however, that if the Series 1997 1/N1 Principal Allocation exceeds the Class C-3 Controlled Distribution Amount for the Related Month, then such excess shall be allocated to the Series 1997 1/N1 Excess Funding Account; and (3) allocate to the Retained Distribution Account an amount determined as set forth in Section 4.7(a)(i)(3) above for such day; (ii) with respect to all Recoveries: (1) increase the Class A Invested Amount, increase the Class B Invested Amount, increase the Class C Invested Amount, replenish the Series 1997 1/N1 Cash Collateral Account to the extent withdrawals have theretofore been made pursuant to Section 4.19(b) as a result of any Losses allocated to the Demand Note pursuant to clause (iii) below that have not been paid under such Demand Note and not replenished under this clause (ii), increase the Series 1997 1/N1 Available Subordinated Amount, and release any remaining Recoveries to the Issuer, as and to the extent provided in Section 4.7(a)(ii)(1) above for such day; and (2) allocate to the Retained Amount an amount determined as set forth in Section 4.7(a)(ii)(2) above for such day; (iii) with respect to all Losses: (1) decrease the Series 1997 1/N1 Available Subordinated Amount, make a claim under the Demand Note, decrease the Class C Invested Amount, decrease the Class B -57- 62 Invested Amount and decrease the Class A Invested Amount as and to the extent provided in Section 4.7(a)(iii)(1) above for such day; and (2) allocate to the Retained Amount an amount determined as set forth in Section 4.7(a)(iii)(2) above for such day, which amount shall reduce the Retained Amount. (iv) with respect to all Lease Payment Recoveries: (1) increase the Class A Invested Amount, increase the Class B Invested Amount, increase the Class C Invested Amount, replenish the Series 1997 1/N1 Cash Collateral Account to the extent withdrawals have theretofore been made pursuant to Section 4.18(b) as a result of any Lease Payment Losses allocated to the Series 1997 1/N1 Letter of Credit pursuant to clause (v) below and not replenished under this clause (iv); and increase the Series 1997 1/N1 Available Subordinated Amount as and to the extent provided in Section 4.7(a)(iv)(1) above for such day; and (2) allocate to the Retained Amount an amount determined as set forth in Section 4.7(a)(iv)(2) above for such day; (v) with respect to all Lease Payment Losses: (1) decrease the Series 1997 1/N1 Available Subordinated Amount, make a claim under the Series 1997 1/N1 Letter of Credit, decrease the Class C Invested Amount, decrease the Class B Invested Amount and decrease the Class A Invested Amount as and to the extent provided in Section 4.7(a)(v)(1) above for such day; and (2) allocate to the Retained Amount an amount determined as set forth in Section 4.7(a)(v)(2) above for such day, which amount shall reduce the Retained Amount. (c) Allocations During the Series 1997 1/N1 Rapid Amortization Period. During the Series 1997 1/N1 Rapid -58- 63 Amortization Period, the Master Servicer will direct the Trustee to allocate, prior to 1:00 p.m. (New York City time) on each Series 1997 1/N1 Deposit Date, all amounts deposited into the Group I Collection Account as set forth below: (i) with respect to all Collections (including Recoveries): (1) allocate to the Series 1997 1/N1 Collection Account an amount determined as set forth in Section 4.7(a)(i)(1) above for such day, which amount shall be deposited in the Series 1997 1/N1 Accrued Interest Account and, as and to the extent provided in Section 4.7(a)(i)(1) above, allocated to the Series 1997 1/N1 Excess Funding Account; (2) allocate to the Series 1997 1/N1 Collection Account an amount equal to the Series 1997 1/N1 Principal Allocation for such day, which amounts shall be used to make principal payments on a pro rata basis in respect of the Class A Notes and, after the Class A Notes have been paid in full, shall be used to make principal payments in respect of the Class B Notes and, after the Class B Notes have been paid in full, shall be used to make principal payments in respect of the Class C Notes; and (3) allocate to the Retained Distribution Account an amount determined as set forth in Section 4.7(a)(i)(3) above for such day; (ii) with respect to all Recoveries: (1) increase the Class A Invested Amount, increase the Class B Invested Amount, increase the Class C Invested Amount, replenish the Series 1997 1/N1 Cash Collateral Account to the extent withdrawals have theretofore been made pursuant to Section 4.19(b) as a result of any Losses allocated to the Demand Note pursuant to clause (iii) below that have not been paid under such Demand Note and not replenished under this clause (ii) increase the Series 1997 1/N1 Available Subordinated Amount, and release any remaining Recoveries to the Issuer, as and to the extent provided in Section 4.7(a)(ii)(1) above for such day; and -59- 64 (2) allocate to the Retained Amount an amount determined as set forth in Section 4.7(a)(ii)(2) above for such day; (iii) with respect to all Losses: (1) decrease the Series 1997 1/N1 Available Subordinated Amount, make a claim under the Demand Note, decrease the Class C Invested Amount, decrease the Class B Invested Amount and decrease the Class A Invested Amount as and to the extent provided in Section 4.7(a)(iii)(1) above for such day; and (2) allocate to the Retained Amount an amount determined as set forth in Section 4.7(a)(iii)(2) above for such day, which amount shall reduce the Retained Amount. (iv) with respect to all Lease Payment Recoveries: (1) increase the Class A Invested Amount, increase the Class B Invested Amount, increase the Class C Invested Amount, replenish the Series 1997 1/N1 Cash Collateral Account to the extent withdrawals have theretofore been made pursuant to Section 4.18(b) as a result of any Lease Payment Losses allocated to the Series 1997 1/N1 Letter of Credit pursuant to clause (v) below and not replenished under this clause (iv); and increase the Series 1997 1/N1 Available Subordinated Amount as and to the extent provided in Section 4.7(a)(iv)(1) above for such day; and (2) allocate to the Retained Amount an amount determined as set forth in Section 4.7(a)(iv)(2) above for such day; (v) with respect to all Lease Payment Losses: (1) decrease the Series 1997 1/N1 Available Subordinated Amount, make a claim under the Series 1997 1/N1 Letter of Credit, decrease the Class C Invested Amount, decrease the Class B Invested Amount and decrease the Class A Invested Amount as and -60- 65 to the extent provided in Section 4.7(a)(v)(1) above for such day; and (2) allocate to the Retained Amount an amount determined as set forth in Section 4.7(a)(v)(2) above for such day, which amount shall reduce the Retained Amount. (d) Additional Allocations. Notwithstanding the foregoing provisions of this Section 4.7, (i) provided the Series 1997 1/N1 Rapid Amortization Period has not commenced, amounts allocated to the Series 1997 1/N1 Excess Funding Account that are not required to make payments under the Series 1997 1/N1 Notes pursuant hereto may, as and to the extent permitted in the related Supplements, be used to pay the principal amount of other Group I Series of Notes that are then in amortization and, after such payment, any remaining funds may, at RCFC's option, be (i) used to finance or acquire Vehicles, to the extent Eligible Vehicles have been requested by any of the Lessees under the Master Lease or (ii) transferred, on any Payment Date, to the Retained Distribution Account, to the extent that the Retained Amount equals or exceeds zero after giving effect to such payment and so long as no Series 1997 1/N1 Enhancement Deficiency or Asset Amount Deficiency exists or would result therefrom; provided, however, that funds remaining after the application of such funds to the payment of the principal amount of other Group I Series of Notes that are in amortization and to the financing or acquisition of Group I Vehicles may be transferred to the Retained Distribution Account on a day other than a Payment Date if the Master Servicer furnishes to the Trustee an Officer's Certificate to the effect that such transfer will not cause any of the foregoing deficiencies to occur either on the date that such transfer is made or, in the reasonable anticipation of the Master Servicer, on the next Payment Date. Funds in the Retained Distribution Account shall, at the option of RCFC, be available to finance or acquire Vehicles, to the extent Eligible Vehicles have been requested by any of the Lessees under the Master Lease, or for distribution to the Retained Interestholder (including any advances made under the Demand Note); (ii) in the event that the Master Servicer is not DTAG or an Affiliate of DTAG, the Master Servicer shall not be entitled to withhold any amounts pursuant to Section 4.2(c) and the Trustee shall deposit amounts payable to DTAG in its capacity as the Master Servicer -61- 66 in the Collection Account pursuant to the provisions of Section 4.2 on each Series 1997 1/N1 Deposit Date; (iii) any amounts withheld by the Master Servicer and not deposited in the Collection Account pursuant to Section 4.2(c) shall be deemed to be deposited in the Collection Account on the date such amounts are withheld for purposes of determining the amounts to be allocated pursuant to this Section 4.7; (iv) if there is more than one Series of Group I Series of Notes outstanding, then Sections 4.7(a)(i)(3), 4.7(b)(i)(3) and 4.7(c)(i)(3) above shall not be duplicative with any similar provisions contained in any other Supplement and the Retained Interestholder shall only be paid such amount once with respect to any Payment Date; and (v) RCFC may, from time to time in its sole discretion, increase the Series 1997 1/N1 Available Subordinated Amount by (a) (i) allocating to the Series 1997 1/N1 Available Subordinated Amount Eligible Vehicles theretofore allocated to the Retained Interest and (ii) delivering to the Trustee an Officer's Certificate affirming with respect to such Vehicles the representations and warranties set forth in Section 6.14 (and an Opinion of Counsel to the same effect) or (b) (i) depositing funds into the Series 1997 1/N1 Excess Funding Account by transfer from the Retained Distribution Account or otherwise, and (ii) delivering to the Master Servicer and the Trustee an Officers' Certificate setting forth the amount of such funds and stating that such funds shall be allocated to the Series 1997 1/N1 Available Subordinated Amount; provided, however, that (x) RCFC shall have no obligation to so increase the Series 1997 1/N1 Available Subordinated Amount at any time and (y) RCFC may not increase the Series 1997 1/N1 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 1997 1/N1 Available Subordinated Amount would exceed the applicable Series 1997 1/N1 Available Subordinated Amount Maximum Increase, excluding from such calculation any increase in the Series 1997 1/N1 Available Subordinated Amount (1) through Recoveries or from funds constituting repayments of principal under the Demand Note, or (2) relating to an increase in the Minimum Class A Enhancement Amount that results from (a) an increase in the ratio of Group I Vehicles that are Non-Program Vehicles to all Group I Vehicles, (b) a reduction in the aggregate amount of cash and Permitted Investments in the Collection Account and the Master Collateral Account that are allocable to the Group I -62- 67 Series of Notes, or (c) a decrease in Market Value Adjustment Percentage. Section 4.8 Monthly Payments. On each Determination Date, as provided below, the Master Servicer shall instruct the Paying Agent to withdraw, and on the following Payment Date the Paying Agent, acting in accordance with such instructions, shall withdraw the amounts required to be withdrawn from the Group I Collection Account pursuant to Sections 4.8(a) through (d) below in respect of all funds available from Series 1997 1/N1 Interest Collections processed since the preceding Payment Date and allocated to the holders of the Series 1997 1/N1 Notes. (a) Note Interest with respect to the Class A Notes. On each Determination Date, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw on the next succeeding Payment Date from the Series 1997 1/N1 Accrued Interest Account the lesser of (i) the amount on deposit in the Series 1997 1/N1 Accrued Interest Account and (ii) an amount (the "Class A Interest Amount") equal to the sum of (x) an amount equal to the interest accrued on the Class A Notes for the related Series 1997 1/N1 Interest Period which will be equal to the sum of (A) the product of (1) the Class A-1 Rate for the related Series 1997 1/N1 Interest Period and (2) the Aggregate Principal Balance of the Class A-1 Notes as of the previous Payment Date after giving effect to any principal payments made on such Payment Date (or in the case of the initial Payment Date, the Class A-1 Initial Invested Amount), divided by twelve, plus (B) the product of (1) the Class A-2 Rate for the related Series 1997 1/N1 Interest Period and (2) the Aggregate Principal Balance of the Class A-2 Notes as of the previous Payment Date after giving effect to any principal payments made on such Payment Date (or in the case of the initial Payment Date, the Class A-2 Initial Invested Amount), divided by twelve, plus (C) the product of (1) the Class A-3 Rate for the related Series 1997 1/N1 Interest Period and (2) the Aggregate Principal Balance of the Class A-3 Notes as of the previous Payment Date after giving effect to any principal payments made on such Payment Date (or in the case of the initial Payment Date, the Class A-3 Initial Invested Amount), divided by twelve, plus (y) an amount equal to the amount of any unpaid Class A Deficiency Amount (as defined below) as of the preceding Payment Date (together with any accrued interest on such Class A Deficiency Amount). On such Determination Date, the Servicer shall further instruct the Trustee or the Paying Agent to withdraw on the next succeeding Payment Date from the Series 1997 1/N1 Excess Funding Account the lesser of (i) the amount on deposit in the Series 1997 1/N1 Excess Funding Account and (ii) the excess, if any, of the Class A Interest Amount over the amount withdrawn from the Series -63- 68 1997 1/N1 Accrued Interest Account pursuant to the preceding sentence. If the amounts described in this Section 4.8(a) are insufficient, after taking into account any funds available in the Series 1997 1/N1 Excess Funding Account and any portion of the Series 1997 1/N1 Letter of Credit Amount applied as described in Section 4.9(a) of this Supplement, to pay the Class A Interest Amount on any Payment Date, payments of interest to the Class A Noteholders will be reduced by the amount of such shortfall. The amount, if any, of such shortfall on any Payment Date shall be referred to as the "Class A Deficiency Amount." Interest shall accrue on the Class A Deficiency Amount at the applicable Class A Note Rate. On the following Payment Date, the Trustee shall withdraw the Class A Interest Amount from the Series 1997 1/N1 Accrued Interest Account and, to the extent provided in Section 4.9(a) of this Supplement, amounts withdrawn from the Series 1997 1/N1 Excess Funding Account and any applied portion of the Series 1997 1/N1 Letter of Credit Amount, and shall deposit such amount in the Class A Distribution Account; provided that the sum of the amounts to be withdrawn from the Series 1997 1/N1 Excess Funding Account pursuant to this Section 4.8(a) and Sections 4.8(b) and (c) of this Supplement shall not exceed for any Determination Date the Series 1997 1/N1 Available Subordinated Amount at such time. (b) Note Interest with respect to the Class B Notes. On each Determination Date, provided that all payments on account of interest that are required to be made to the Class A Noteholders are available in the Class A Distribution Account, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw on the next succeeding Payment Date from the Series 1997 1/N1 Accrued Interest Account (subject to the provisions of Section 4.14 of this Supplement) the lesser of (i) the amount remaining on deposit in the Series 1997 1/N1 Accrued Interest Account after withdrawal of the amounts specified in clause (a) above and (ii) an amount (the "Class B Interest Amount") equal to the sum of (x) an amount equal to the interest accrued for the related Series 1997 1/N1 Interest Period which will be equal to the sum of (A) the product of (1) the Class B-1 Rate for the related Series 1997 1/N1 Interest Period and (2) the Aggregate Principal Balance of the Class B-1 Notes as of the previous Payment Date after giving effect to any principal payments made on such Payment Date (or in the case of the initial Payment Date, the Class B-1 Initial Invested Amount), divided by twelve, plus (B) the product of (1) the Class B-2 Rate for the related Series 1997 1/N1 Interest Period and (2) the Aggregate Principal Balance of the Class B-2 Notes as of the previous Payment Date after giving effect to any principal payments made on such Payment Date (or in the case of the initial Payment Date, the Class B-2 Initial Invested Amount), divided by twelve, plus (C) -64- 69 the product of (1) the Class B-3 Rate for the related Series 1997 1/N1 Interest Period and (2) the Aggregate Principal Balance of the Class B-3 Notes as of the previous Payment Date after giving effect to any principal payments made on such Payment Date (or in the case of the initial Payment Date, the Class B-3 Initial Invested Amount), divided by twelve, plus (y) an amount equal to the amount of any unpaid Class B Deficiency Amount (as defined below) as of the preceding Payment Date (together with any accrued interest on such Class B Deficiency Amount). If the amounts described in this Section 4.8(b) are insufficient, after taking into account any funds available in the Series 1997 1/N1 Excess Funding Account and any portion of the Series 1997 1/N1 Letter of Credit Amount applied as described in Section 4.9(b) of this Supplement subject to the provisions of Section 4.14 of this Supplement, to pay the Class B Interest Amount on any Payment Date, payments of interest to the Class B Noteholders will be reduced by the amount of such shortfall. The amount, if any, of such shortfall on any Payment Date shall be referred to as the "Class B Deficiency Amount". Interest shall accrue on the Class B Deficiency Amount at the Class B Note Rate. On the following Payment Date, provided that all payments on account of interest that are required to be made to the Class A Noteholders are available in the Class A Distribution Account (including, without limitation, all accrued interest, the Class A Deficiency Amount, and all interest accrued on such Class A Deficiency Amount), the Trustee shall withdraw the Class B Interest Amount from the Series 1997 1/N1 Accrued Interest Account, amounts withdrawn from the Series 1997 1/N1 Excess Funding Account and any applied portion of the Series 1997 1/N1 Letter of Credit Amount, and shall deposit such amount in the Class B Distribution Account; provided that the sum of the amounts to be withdrawn from the Series 1997 1/N1 Excess Funding Account pursuant to this Section 4.8(b) and Sections 4.8(a) and (c) of this Supplement shall not exceed for any Determination Date the Series 1997 1/N1 Available Subordinated Amount at such time. (c) Note Interest with respect to the Class C Notes. On each Determination Date, provided that all payments on account of interest that are required to be made to the Class A Noteholders are available in the Class A Distribution Account and all payments on account of interest that are required to be made to the Class B Noteholders are available in the Class B Distribution Account, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw on the next succeeding Payment Date from the Series 1997 1/N1 Accrued Interest Account (subject to the provisions of Section 4.16 of this Supplement) the lesser of (i) the amount remaining on deposit in the Series 1997 1/N1 Accrued Interest Account after withdrawal of the amounts specified in clauses (a) and (b) above and (ii) an amount (the -65- 70 "Class C Interest Amount") equal to the sum of (x) an amount equal to the interest accrued for the related Series 1997 1/N1 Interest Period which will be equal to the sum of (A) the product of (1) the Class C-1 Rate for the related Series 1997 1/N1 Interest Period and (2) the Aggregate Principal Balance of the Class C-1 Notes as of the previous Payment Date after giving effect to any principal payments made on such Payment Date (or in the case of the initial Payment Date, the Class C-1 Initial Invested Amount), divided by twelve, plus (B) the product of (1) the Class C-2 Rate for the related Series 1997 1/N1 Interest Period and (2) the Aggregate Principal Balance of the Class C-2 Notes as of the previous Payment Date after giving effect to any principal payments made on such Payment Date (or in the case of the initial Payment Date, the Class B-2 Initial Invested Amount), divided by twelve, plus (C) the product of (1) the Class C-3 Rate for the related Series 1997 1/N1 Interest Period and (2) the Aggregate Principal Balance of the Class C-3 Notes as of the previous Payment Date after giving effect to any principal payments made on such Payment Date (or in the case of the initial Payment Date, the Class C-3 Initial Invested Amount), divided by twelve, plus (y) an amount equal to the amount of any unpaid Class C Deficiency Amount (as defined below) as of the preceding Payment Date (together with any accrued interest on such Class C Deficiency Amount). If the amounts described in this Section 4.8(c) are insufficient, after taking into account any funds available in the Series 1997 1/N1 Excess Funding Account and any portion of the Series 1997 1/N1 Letter of Credit Amount applied as described in Section 4.9(c) of this Supplement and subject to the provisions of Section 4.16 of this Supplement, to pay the Class C Interest Amount on any Payment Date, payments of interest to the Class C Noteholders will be reduced by the amount of such shortfall. The amount, if any, of such shortfall on any Payment Date shall be referred to as the "Class C Deficiency Amount". Interest shall accrue on the Class C Deficiency Amount at the Class C Note Rate. On the following Payment Date, provided that all payments on account of interest that are required to be made to the Class A Noteholders are available in the Class A Distribution Account (including, without limitation, all accrued interest, the Class A Deficiency Amount, and all interest accrued on such Class A Deficiency Amount) and all payments on account of interest that are required to be made to the Class B Noteholders are available in the Class B Distribution Account (including, without limitation, all accrued interest, the Class B Deficiency Amount, and all interest accrued on such Class B Deficiency Amount), the Trustee shall withdraw the Class C Interest Amount from the Series 1997 1/N1 Accrued Interest Account, amounts withdrawn from the Series 1997 1/N1 Excess Funding Account and any applied portion of the Series 1997 1/N1 Letter of Credit Amount, and shall deposit such amount in the -66- 71 Class C Distribution Account; provided that the sum of the amounts to be withdrawn from the Series 1997 1/N1 Excess Funding Account pursuant to Sections 4.8(a) and (b) of this Supplement and this Section 4.8(c) shall not exceed for any Determination Date the Series 1997 1/N1 Available Subordinated Amount at such time. (d) Servicing Fee. On each Payment Date, the Master Servicer shall, after making all distributions required to be made pursuant to Sections 4.8(a) through (c) of this Supplement or in the event that on the related Determination Date DTAG or any Affiliate thereof shall no longer be the Master Servicer, prior to such deposits being made, instruct each of the Trustee and the Paying Agent to withdraw from the Series 1997 1/N1 Accrued Interest Account, for payment to the Master Servicer, an amount equal to (a) the Series 1997 1/N1 Investor Monthly Servicing Fee and any Series 1997 1/N1 Monthly Supplemental Servicing Fee accrued during the preceding Series 1997 1/N1 Interest Period, plus (b) all accrued and unpaid Series 1997 1/N1 Investor Monthly Servicing Fees and any accrued and unpaid Series 1997 1/N1 Monthly Supplemental Servicing Fees, minus (c) the amount of any Series 1997 1/N1 Investor Monthly Servicing Fees and Series 1997 1/N1 Monthly Supplemental Servicing Fees withheld by the Master Servicer pursuant to the Base Indenture. On such Payment Date, the Trustee or the Paying Agent, as applicable, shall withdraw such amount from the Series 1997 1/N1 Accrued Interest Account and remit such amount to the Master Servicer. Section 4.9 Payment of Note Interest. (a) Class A Notes. On each Payment Date, (i) to the extent any Class A Monthly Interest Shortfall exists after the deposit required pursuant to Section 4.7 of this Supplement has been made, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from funds on deposit in the Series 1997 1/N1 Excess Funding Account, an amount equal to the lesser of (A) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time, and (B) the remaining amount of the Class A Monthly Interest Shortfall, and deposit such amount in the Class A Distribution Account to pay the Class A Monthly Interest and any unpaid Class A Deficiency Amounts with respect to such Class A Monthly Interest (together with accrued interest on all such unpaid Class A Deficiency Amounts)and (ii) to the extent any such Class A Monthly Interest Shortfall remains after the deposit required pursuant to Section 4.9(a)(i) of this Supplement has been made, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this -67- 72 Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (A) the amount on deposit in the Series 1997 1/N1 Collection Account representing such amount drawn on the Series 1997 1/N1 Letter of Credit and (B) the amount of the remaining Class A Monthly Interest Shortfall and deposit such amount in the Class A Distribution Account to pay the Class A Monthly Interest and any unpaid Class A Deficiency Amounts with respect to such Class A Monthly Interest (together with accrued interest on all such unpaid Class A Deficiency Amounts). On each Payment Date the Paying Agent shall, in accordance with Section 5.1 of the Base Indenture and the Master Servicer's most recent Monthly Certificate, pay to the Class A Noteholders from the Class A Distribution Account the amount deposited in the Class A Distribution Account for the payment of the Class A Interest Amount pursuant to Section 4.8(a) of this Supplement and clauses (i) and (ii) of this Section 4.9(a). (b) Class B Notes. On each Payment Date, (i) to the extent any Class B Monthly Interest Shortfall exists after the deposit required pursuant to Section 4.7 of this Supplement has been made, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from funds on deposit in the Series 1997 1/N1 Excess Funding Account an amount equal to the lesser of (A) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Section 4.9(a) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time (after application of any amounts pursuant to Section 4.9(a) of this Supplement), and (B) the remaining amount of the Class B Monthly Interest Shortfall, and deposit such amount in the Class B Distribution Account to pay the Class B Monthly Interest and any unpaid Class B Deficiency Amounts with respect to such Class B Monthly Interest (together with accrued interest on all such unpaid Class B Deficiency Amounts) and (ii) to the extent any such Class B Monthly Interest Shortfall remains after the deposit required pursuant to Section 4.9(b)(i) of this Supplement has been made, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (A) the amount on deposit in the Series 1997 1/N1 Collection Account representing such amount drawn on the Series 1997 1/N1 Letter of Credit (after application of any amounts pursuant to Section 4.9(a) of this Supplement) and (B) the amount of the remaining Class B Monthly Interest Shortfall and deposit such amount in the Class B Distribution Account to pay the Class B Monthly -68- 73 Interest and any unpaid Class B Deficiency Amounts with respect to such Class B Monthly Interest (together with accrued interest on all such unpaid Class B Deficiency Amounts). On each Payment Date the Paying Agent shall, in accordance with Section 5.1 of the Base Indenture and the Master Servicer's most recent Monthly Certificate, but subject to Section 4.14 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 the Class B Interest Amount pursuant to Section 4.8(b) of this Supplement and clauses (i) and (ii) of this Section 4.9(b). (c) Class C Notes. On each Payment Date, (i) to the extent any Class C Monthly Interest Shortfall exists after the deposit required pursuant to Section 4.7 of this Supplement has been made, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from funds on deposit in the Series 1997 1/N1 Excess Funding Account an amount equal to the lesser of (A) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Sections 4.9(a) and (b) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time (after application of any amounts pursuant to Sections 4.9(a) and (b) of this Supplement), and (B) the remaining amount of the Class C Monthly Interest Shortfall, and deposit such amount in the Class C Distribution Account to pay the Class C Monthly Interest and any unpaid Class C Deficiency Amounts with respect to such Class C Monthly Interest (together with accrued interest on all such unpaid Class C Deficiency Amounts) and (ii) to the extent any such Class C Monthly Interest Shortfall remains after the deposit required pursuant to Section 4.9(c)(i) of this Supplement has been made, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (A) the amount on deposit in the Series 1997 1/N1 Collection Account representing such amount drawn on the Series 1997 1/N1 Letter of Credit (after application of any amounts pursuant to Sections 4.9(a) and 4.9(b) of this Supplement) and (B) the amount of the remaining Class C Monthly Interest Shortfall and deposit such amount in the Class C Distribution Account to pay the Class C Monthly Interest and any unpaid Class C Deficiency Amounts with respect to such Class C Monthly Interest (together with accrued interest on all such unpaid Class C Deficiency Amounts). On each Payment Date the Paying Agent shall, in accordance with Section 5.1 of the Base Indenture and the Master Servicer's most recent Monthly Certificate, but subject to Section 4.17 -69- 74 of this Supplement, pay to the Class C Noteholders from the Class C Distribution Account the amount deposited in the Class C Distribution Account for the payment of the Class C Interest Amount pursuant to Section 4.8(c) of this Supplement and clauses (i) and (ii) of this Section 4.9(c). Section 4.10 Payment of Note Principal. (a) Class A Notes. (i) Commencing on the second Determination Date after the commencement of the Class A-1 Controlled Amortization Period, the Class A-2 Controlled Amortization Period or the Class A-3 Controlled Amortization Period (as the case may be) or the first Determination Date after the commencement of the Series 1997 1/N1 Rapid Amortization Period, the Master Servicer shall instruct the Trustee or the Paying Agent as to the following: (A)(1) the Class A-1 Controlled Distribution Amount for the Related Month, (2) the amount allocated to the Class A-1 Notes during the Related Month pursuant to Section 4.7(b)(i)(2) or 4.7(c)(i)(2) of this Supplement, as applicable, and (3) the amount, if any, by which the amount in clause (A)(1) above exceeds the amount in clause (A)(2) above (the amount of such excess the "Class A-1 Controlled Distribution Amount Deficiency"); and (B)(1) the Class A-2 Controlled Distribution Amount for the Related Month, (2) the amount allocated to the Class A-2 Notes during the Related Month pursuant to Section 4.7(b)(i)(2) or 4.7(c)(i)(2) of this Supplement, as applicable, and (3) the amount, if any, by which the amount in clause (B)(1) above exceeds the amount in clause (B)(2) above (the amount of such excess the "Class A-2 Controlled Distribution Amount Deficiency"); (C)(1) the Class A-3 Controlled Distribution Amount for the Related Month, (2) the amount allocated to the Class A-3 Notes during the Related Month pursuant to Section 4.7(b)(i)(2) or 4.7(c)(i)(2) of this Supplement, as applicable, and (3) the amount, if any, by which the amount in clause (C)(1) above exceeds the amount in clause -70- 75 (C)(2) above (the amount of such excess the "Class A-3 Controlled Distribution Amount Deficiency" and, together with the Class A-1 Controlled Distribution Amount Deficiency and the Class A-2 Controlled Distribution Amount Deficiency the "Class A Controlled Distribution Amount Deficiency"); and (ii) (A) Commencing on the second Payment Date after the commencement of the Class A-1 Controlled Amortization Period, the Trustee shall, in respect of the Class A-1 Notes, (1) withdraw from the Series 1997 1/N1 Collection Account an amount equal to the lesser of the amounts specified in clauses (A)(1) and (A)(2) of Section 4.10(a)(i) of this Supplement, (2) to the extent any Class A-1 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clause (1) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Excess Funding Accounts for the other Group I Series of Notes, if any, an amount equal to the lesser of (x) the aggregate amount on deposit in such Excess Funding Accounts on such Payment Date (after application of any such amounts pursuant to Section 4.9 of the related Series Supplements)in an amount not to exceed the related Available Subordinated Amounts at such time, and (y) the remaining amount of the Class A-1 Controlled Distribution Amount Deficiency, and deposit such amount in the Class A Distribution Account to be paid, pro rata, to the Class A-1 Noteholders on account of the Class A-1 Controlled Distribution Amount, provided that any such amounts withdrawn from the Excess Funding Accounts for the other Group I Series of Notes shall be applied on a pro rata basis with respect to each Group I Series of Notes with respect to which a Class A-1 Controlled Distribution Amount Deficiency exists after application of the amounts specified in the corresponding sections of the related Series Supplements,(3) to the extent any Class A-1 Controlled Distribution Amount Deficiency exists after application of the amount specified in clauses (1) and (2) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Series 1997 1/N1 Excess Funding Account, an amount equal to the lesser of (v) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Sections -71- 76 4.9(a),(b) and (c) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time and (w) the remaining amount of the Class A-1 Controlled Distribution Amount Deficiency and deposit such amount in the Class A Distribution Account to be paid, pro rata, to the Class A-1 Noteholders on account of the Class A-1 Controlled Distribution Amount, and (4) to the extent any Class A-1 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clauses (1) through (3) of this subsection, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement, or amounts have been claimed under the Demand Note or drawn under the Series 1997 1/N1 Letter of Credit in respect thereof and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.19 of this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (x) the amount on deposit in the Series 1997 1/N1 Collection Account representing such draw on the Series 1997 1/N1 Letter of Credit or payment under the Demand Note (after application of any portion thereof pursuant to Sections 4.9(a), (b) and (c) of this Supplement) and (y) the remaining amount of the Class A-1 Controlled Distribution Amount Deficiency (if any), and deposit such amount in the Class A Distribution Account to be paid, pro rata, to the Class A-1 Noteholders on account of the Class A-1 Controlled Distribution Amount; provided, however, that on the final Payment Date for the Class A-1 Notes, the Trustee shall withdraw from such accounts, as provided above, an amount which is no greater than the Class A-1 Invested Amount as of such date. The Invested Amount of all outstanding Class A-1 Notes shall be due and payable on the Series 1997 1/N1 Termination Date; and (B) Commencing on the second Payment Date after the commencement of the Class A-2 Controlled Amortization Period, the Trustee shall, in respect of the Class A-2 Notes, (1) withdraw from the Series 1997 1/N1 Collection Account an amount equal to the lesser of the amounts specified in clauses (B)(1) and (B)(2) of Section 4.10(a)(i) of this Supplement, (2) to the extent any Class A-2 Controlled Distribution Amount Deficiency remains after application of the amounts specified in -72- 77 clause (1) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Excess Funding Accounts, for the other Group I Series of Notes, if any, an amount equal to the lesser of (x) the aggregate amount on deposit in such Excess Funding Accounts on such Payment Date (after application of any such amounts pursuant to Section 4.9 of the related Series Supplements)in an amount not to exceed the related Available Subordinated Amounts at such time, and (y) the remaining amount of the Class A-2 Controlled Distribution Amount Deficiency, and deposit such amount in the Class A Distribution Account to be paid, pro rata, to the Class A-2 Noteholders on account of the Class A-2 Controlled Distribution Amount, provided that any such amounts withdrawn from the Excess Funding Accounts for the other Group I Series of Notes shall be applied on a pro rata basis with respect to each Group I Series of Notes with respect to which a Class A-2 Controlled Distribution Amount Deficiency exists after application of the amounts specified in the corresponding sections of the related Series Supplements, (3) to the extent any Class A-2 Controlled Distribution Amount Deficiency exists after application of the amounts specified in clauses (1) and (2) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Series 1997 1/N1 Excess Funding Account, an amount equal to the lesser of (v) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Sections 4.9(a), (b) and (c) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time and (w) the amount of the Class A-2 Controlled Distribution Amount Deficiency and deposit such amount in the Class A Distribution Account to be paid, pro rata, to the Class A-2 Noteholders on account of the Class A-2 Controlled Distribution Amount, and (4) to the extent any Class A-2 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clauses (1) through (3) of this subsection, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement or amounts have been claimed under the Demand Note or drawn under the Series 1997 1/N1 Letter of Credit in respect thereof and deposited into the Series 1997 1/N1 -73- 78 Collection Account pursuant to Section 4.19 of this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (x) the amount on deposit in the Series 1997 1/N1 Collection Account representing such draw on the Series 1997 1/N1 Letter of Credit or payment under the Demand Note (after application of any portion thereof pursuant to Sections 4.9(a), (b) and (c) of this Supplement) and (y) the remaining amount of the Class A-2 Controlled Distribution Amount Deficiency (if any), and deposit such amount in the Class A Distribution Account to be paid, pro rata, to the Class A-2 Noteholders on account of the Class A-2 Controlled Distribution Amount; provided, however, that on the final Payment Date for the Class A-2 Notes, the Trustee shall withdraw from such accounts, as provided above, an amount which is no greater than the Class A-2 Invested Amount as of such date. The Invested Amount of all outstanding Class A-2 Notes shall be due and payable on the Series 1997 1/N1 Termination Date. (C) Commencing on the second Payment Date after the commencement of the Class A-3 Controlled Amortization Period, the Trustee shall, in respect of the Class A-3 Notes, (1) withdraw from the Series 1997 1/N1 Collection Account an amount equal to the lesser of the amounts specified in clauses (C)(1) and (C)(2) of Section 4.10(a)(i) of this Supplement, (2) to the extent any Class A-3 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clause (1) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Excess Funding Accounts, if any, for the other Group I Series of Notes, if any, an amount equal to the lesser of (x) the aggregate amount on deposit in such Excess Funding Accounts on such Payment Date (after application of any such amounts pursuant to Section 4.9 of the related Series Supplements)in an amount not to exceed the related Available Subordinated Amounts at such time, and (y) the remaining amount of the Class A-3 Controlled Distribution Amount Deficiency, and deposit such amount in the Class A Distribution Account to be paid, pro rata, to the Class A-3 Noteholders on account of the Class A-3 Controlled Distribution Amount, provided that any such amounts withdrawn from the Excess Funding Accounts for the other Group I Series of Notes shall be applied on a pro -74- 79 rata basis with respect to each Group I Series of Notes with respect to which a Class A-3 Controlled Distribution Amount Deficiency exists after application of the amounts specified in the corresponding sections of the related Series Supplements,(3) to the extent any Class A-3 Controlled Distribution Amount Deficiency exists after application of the amounts specified in clauses (1) and (2) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Series 1997-3 Excess Funding Account, an amount equal to the lesser of (v) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Sections 4.9(a), (b) and (c) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time and (w) the amount of the Class A-3 Controlled Distribution Amount Deficiency and deposit such amount in the Class A Distribution Account to be paid, pro rata, to the Class A-3 Noteholders on account of the Class A-3 Controlled Distribution Amount, and (4) to the extent any Class A-3 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clauses (1) through (3) of this subsection, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement or amounts have been claimed under the Demand Note or drawn under the Series 1997 1/N1 Letter of Credit in respect thereof and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.19 of this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (x) the amount on deposit in the Series 1997 1/N1 Collection Account representing such draw on the Series 1997 1/N1 Letter of Credit or payment under the Demand Note (after application of any portion thereof pursuant to Sections 4.9(a), (b) and (c) of this Supplement) and (y) the remaining amount of the Class A-3 Controlled Distribution Amount Deficiency (if any), and deposit such amount in the Class A Distribution Account to be paid, pro rata, to the Class A-3 Noteholders on account of the Class A-3 Controlled Distribution Amount; provided, however, that on the final Payment Date for the Class A-3 Notes, the Trustee shall withdraw from such accounts, as provided above, an amount which is no -75- 80 greater than the Class A-3 Invested Amount as of such date. The Invested Amount of all outstanding Class A-3 Notes shall be due and payable on the Series 1997 1/N1 Termination Date. (iii) Commencing on the first Payment Date after the commencement of the Series 1997 1/N1 Rapid Amortization Period, the Trustee shall (1) withdraw from the Series 1997 1/N1 Collection Account the amount allocated thereto pursuant to Section 4.7(c)(i)(2) of this Supplement, (2) to the extent any portion of the Class A Invested Amount still remains unpaid after application of the amounts specified in clause (1) above, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the related Excess Funding Accounts of any additional Group I Series of Notes, if any, an amount equal to the lesser of (x) the aggregate amount on deposit in such Excess Funding Accounts on such Payment Date (after application of any such amounts pursuant to Section 4.9 of the related Series Supplements) in an amount not to exceed the related Available Subordinated Amounts at such time and (y) the unpaid portion of the Class A Invested Amount and deposit such amount in the Class A Distribution Account to be paid, pro rata, to the Class A Noteholders, provided that any such amounts withdrawn from the Excess Funding Accounts for the other Group I Series of Notes shall be applied on a pro rata basis with respect to each Group I Series of Notes with respect to which a deficiency exists, (3) to the extent any portion of the Class A Invested Amount remains unpaid after application of the amount specified in clauses (1) and (2), the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Series 1997 1/N1 Excess Funding Account, an amount equal to the lesser of (v) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Sections 4.9(a), (b) and (c) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time and (w) the unpaid portion of the Class A Invested Amount and deposit such amount in the Class A Distribution Account to be paid, pro rata, to the Class A Noteholders, and (4) to the extent any portion of the Class A Invested Amount still remains unpaid after application of the amounts specified in clauses (1) through (3) above, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit -76- 81 and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement or amounts have been claimed under the Demand Note or drawn under the Series 1997 1/N1 Letter of Credit in respect thereof and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.19 of this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (x) the amount on deposit in the Series 1997 1/N1 Collection Account representing such draw on the Series 1997 1/N1 Letter of Credit or payment under the Demand Note (after application of any portion thereof pursuant to Sections 4.9(a) and (b) and (c) of this Supplement) and (y) the excess of the Class A Invested Amount over the amounts described in clauses (1) through (3) above and deposit such amount in the Class A Distribution Account to be paid, pro rata, to the Class A Noteholders; provided, however, that on the final Payment Date for the Class A Notes, the Trustee shall withdraw from the Series 1997 1/N1 Collection Account, as provided above, an aggregate amount which is no greater than the Class A Invested Amount as of such date. The Invested Amount of each outstanding Class of Class A Notes shall be due and payable on the Series 1997 1/N1 Termination Date for such Class. (iv) On each Payment Date occurring on or after the date a withdrawal is made pursuant to Sections 4.10(a)(ii) and (iii) of this Supplement, the Paying Agent shall, in accordance with Section 5.1 of the Base Indenture and the Master Servicer's most recent Monthly Certificate pay to the applicable Class A Noteholders specified in Section 4.10(a)(ii) or (iii), as applicable, pro rata, the amount deposited in the Class A Distribution Account for the payment of principal pursuant to Sections 4.10(a)(ii) and (iii), as applicable, of this Supplement. (b) Class B Notes. (i) Commencing on the second Determination Date after the commencement of the Class B-1 Controlled Amortization Period, the Class B-2 Controlled Amortization Period or the Class B-3 Controlled Amortization Period (as the case may be), or the first Determination Date after the commencement of the Series 1997 1/N1 Rapid Amortization Period, provided that the Class A -77- 82 Notes shall have then been paid in full, the Servicer shall instruct the Trustee or the Paying Agent as to the following: (A)(1) the Class B-1 Controlled Distribution Amount for the Related Month, (2) the amount allocated to the Class B-1 Notes during the Related Month pursuant to Section 4.7(b)(i)(2) or 4.7(c)(i)(2) of this Supplement, as applicable, and (3) the amount, if any, by which the amount in clause (A)(1) above exceeds the amount in clause (A)(2) above (the amount of such excess, the "Class B-1 Controlled Distribution Amount Deficiency"); and (B)(1) the Class B-2 Controlled Distribution Amount for the Related Month, (2) the amount allocated to the Class B-2 Notes during the Related Month pursuant to Section 4.7(b)(i)(2) or 4.7(c)(i)(2), as applicable, and (3) the amount, if any, by which the amount in clause (B)(1) above exceeds the amount in clause (B)(2) above (the amount of such excess, the "Class B-2 Controlled Distribution Amount Deficiency"). (C)(1) the Class B-3 Controlled Distribution Amount for the Related Month, (2) the amount allocated to the Class B-3 Notes during the Related Month pursuant to Section 4.7(b)(i)(2) or 4.7(c)(i)(2) of this Supplement, as applicable, and (3) the amount, if any, by which the amount in clause (B)(1) above exceeds the amount in clause (B)(2) above (the amount of such excess, the "Class B-2 Controlled Distribution Amount Deficiency" and, together with the Class B-2 Controlled Distribution Amount Deficiency and the Class B-3 Controlled Distribution Amount Deficiency, the "Class B Controlled Distribution Amount Deficiency"). (ii) (A) Commencing on the second Payment Date after the commencement of the Class B-1 Controlled Amortization Period, the Trustee shall, subject to Section 4.14 of this Supplement, (1) withdraw from the Series 1997 1/N1 Collection Account an amount equal to the lesser of the amounts specified in clauses (A)(1) and (A)(2) of Section 4.10(b)(i) of this Supplement, (2) to the extent any Class B-1 Controlled Distribution Amount Deficiency remains after application of the -78- 83 amounts specified in clause (1) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Excess Funding Accounts, for the other Group I Series of Notes, if any, an amount equal to the lesser of (x) the aggregate amount on deposit in such Excess Funding Accounts on such Payment Date (after application of any such amounts pursuant to Section 4.9 of the related Series Supplements)in an amount not to exceed the related Available Subordinated Amounts at such time, and (y) the remaining amount of the Class B-1 Controlled Distribution Amount Deficiency, and deposit such amount in the Class B Distribution Account to be paid, pro rata, to the Class B-1 Noteholders on account of the Class B-1 Controlled Distribution Amount, provided that any such amounts withdrawn from the Excess Funding Accounts for the other Group I Series of Notes shall be applied on a pro rata basis with respect to each Group I Series of Notes with respect to which a Class B-1 Controlled Distribution Amount Deficiency exists after application of the amounts specified in the corresponding sections of the related Series Supplements, (3) to the extent any Class B-1 Controlled Distribution Amount Deficiency exists after application of the amount specified in clauses (1) and (2) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Series 1997 1/N1 Excess Funding Account, an amount equal to the lesser of (v) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Sections 4.9(a),(b) and (c) and Section 4.10(a) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time and (w) the remaining amount of the Class B-1 Controlled Distribution Amount Deficiency and deposit such amount in the Class B Distribution Account to be paid, pro rata, to the Class B-1 Noteholders on account of the Class B-1 Controlled Distribution Amount, and (4) to the extent any Class B-1 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clauses (1) through (3) of this subsection, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement or amounts have been claimed under the Demand Note or drawn under the Series 1997 1/N1 Letter of Credit in respect -79- 84 thereof and deposited into the Series 1997 1/N1 Collection Account pursuant to Sections 4.20 and 4.21 of this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (x) the amount on deposit in the Series 1997 1/N1 Collection Account representing such draw on the Series 1997 1/N1 Letter of Credit or payment under the Demand Note (after application of any portion thereof pursuant to Sections 4.9(a), (b) and (c) and Section 4.10(a) of this Supplement) and (y) the remaining amount of the Class B-1 Controlled Distribution Amount Deficiency (if any), and deposit such amount in the Class B Distribution Account to be paid, pro rata, to the Class B-1 Noteholders on account of the Class B-1 Controlled Distribution Amount; and (B) Commencing on the second Payment Date after the commencement of the Class B-2 Controlled Amortization Period, the Trustee shall, in respect of the Class B-2 Notes, subject to Section 4.14 of this Supplement, (1) withdraw from the Series 1997 1/N1 Collection Account an amount equal to the lesser of the amounts specified in clauses (B)(1) and (B)(2) of Section 4.10(b)(i) of this Supplement, (2) to the extent any Class B-2 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clause (1) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the related Excess Funding Accounts, if any, for the other Group I Series of Notes, if any, an amount equal to the lesser of (x) the aggregate amount on deposit in such Excess Funding Accounts on such Payment Date (after application of any such amounts pursuant to Sections 4.9 and 4.10 of the related Supplements) in an amount not to exceed the related Available Subordinated Amounts at such time and (y) the remaining amount of the Class B-2 Controlled Distribution Amount Deficiency, and deposit such amount in the Class B Distribution Account to be paid, pro rata, to the Class B-2 Noteholders on account of the Class B-2 Controlled Distribution Amount, provided that any such amounts withdrawn from the Excess Funding Accounts for the other Group I Series of Notes shall be applied on a pro rata basis with respect to each Group I Series of Notes with respect to which a Class B-2 Controlled Distribution Amount Deficiency exists after application of the amounts specified in the corresponding sections of the -80- 85 related Series Supplements, (3) to the extent any Class B-2 Controlled Distribution Amount Deficiency exists after application of the amounts specified in clauses (1) and (2) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Series 1997 1/N1 Excess Funding Account, an amount equal to the lesser of (v) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Sections 4.9(a), (b) and (c) and Section 4.10(a) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time and (w) the remaining amount of the Class B-2 Controlled Distribution Amount Deficiency and deposit such amount in the Class B Distribution Account to be paid, pro rata, to the Class B-2 Noteholders on account of the Class B-2 Controlled Distribution Amount, and (4) to the extent any Class B-2 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clauses (1) through (3) of this subsection, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement or amounts have been claimed under the Demand Note or drawn under the Series 1997 1/N1 Letter of Credit in respect thereof and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.19 of this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (x) the amount on deposit in the Series 1997 1/N1 Collection Account representing such draw on the Series 1997 1/N1 Letter of Credit or payment under the Demand Note (after application of any portion thereof pursuant to Sections 4.9(a), (b) and (c) and Section 4.10(a) of this Supplement) and (y) the remaining amount of the Class B-2 Controlled Distribution Amount Deficiency (if any), and deposit such amount in the Class B Distribution Account to be paid, pro rata, to the Class B-2 Noteholders on account of the Class B-2 Controlled Distribution Amount. (C) Commencing on the second Payment Date after the commencement of the Class B-3 Controlled Amortization Period, the Trustee shall, in respect of the Class B-3 Notes, subject to Section 4.14 of this Supplement, (1) withdraw from the Series 1997 1/N1 Collection Account an amount equal -81- 86 to the lesser of the amounts specified in clauses (C)(1) and (C)(2) of Section 4.10(b)(i) of this Supplement, (2) to the extent any Class B-3 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clause (1) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the related Excess Funding Accounts for the other Group I Series of Notes, if any, an amount equal to the lesser of (x) the aggregate amount on deposit in such Excess Funding Accounts on such Payment Date (after application of any such amounts pursuant to Sections 4.9 and 4.10 of the related Supplements) in an amount not to exceed the related Available Subordinated Amounts at such time and (y) the remaining amount of the Class B-3 Controlled Distribution Amount Deficiency, and deposit such amount in the Class B Distribution Account to be paid, pro rata, to the Class B-3 Noteholders on account of the Class B-3 Controlled Distribution Amount, provided that any such amounts withdrawn from the Excess Funding Accounts for the other Group I Series of Notes shall be applied on a pro rata basis with respect to each Group I Series of Notes with respect to which a Class B-3 Controlled Distribution Amount Deficiency exists after application of the amounts specified in the corresponding sections of the related Series Supplements, (3) to the extent any Class B-3 Controlled Distribution Amount Deficiency exists after application of the amounts specified in clauses (1) and (2) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Series 1997 1/N1 Excess Funding Account, an amount equal to the lesser of (v) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Sections 4.9(a), (b) and (c), and Section 4.10(a) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time and (w) the remaining amount of the Class B-3 Controlled Distribution Amount Deficiency and deposit such amount in the Class B Distribution Account to be paid, pro rata, to the Class B-3 Noteholders on account of the Class B-3 Controlled Distribution Amount, and (4) to the extent any Class B-3 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clauses (1) through (3) of this subsection, if amounts have been drawn on the Series 1997 1/N1 -82- 87 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement or amounts have been claimed under the Demand Note or drawn under the Series 1997 1/N1 Letter of Credit in respect thereof and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.19 of this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (x) the amount on deposit in the Series 1997 1/N1 Collection Account representing such draw on the Series 1997 1/N1 Letter of Credit or payment under the Demand Note (after application of any portion thereof pursuant to Sections 4.9(a), (b) and (c) and Section 4.10(a) of this Supplement) and (y) the remaining amount of the Class B-3 Controlled Distribution Amount Deficiency (if any), and deposit such amount in the Class B Distribution Account to be paid, pro rata, to the Class B-3 Noteholders on account of the Class B-2 Controlled Distribution Amount. (iii) (A) Commencing on the first Payment Date after the commencement of the Series 1997 1/N1 Rapid Amortization Period, provided that the Class A Notes shall have then been paid in full, the Trustee shall (1) withdraw from the Series 1997 1/N1 Collection Account the amount allocated thereto pursuant to Section 4.7(c)(i)(2) of this Supplement, (2) to the extent any portion of the Class B Invested Amount still remains unpaid after application of the amounts specified in clause (1) above, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the related Excess Funding Accounts of any additional Group I Series of Notes, if any, an amount equal to the lesser of (x) the aggregate amount on deposit in such Excess Funding Accounts on such Payment Date (after application of any such amounts pursuant to Sections 4.9 and 4.10 of the related Series Supplement) and (y) the unpaid portion of the Class B Invested Amount and deposit such amount in the Class B Distribution Account to be paid, pro rata, to the Class B Noteholders, provided that any such amounts withdrawn from the Excess Funding Accounts for the other Group I Series of Notes shall be applied on a pro rata basis with respect to each Group I Series of Notes with respect to which a deficiency exists, (3) to the extent any portion of the Class B Invested Amount still remains unpaid after application of the amount -83- 88 specified in clauses (1) and (2) above, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Series 1997 1/N1 Excess Funding Account, an amount equal to the lesser of (v) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Sections 4.9(a), (b) and (c) and Section 4.10(a) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time and (w) the unpaid portion of the Class B Invested Amount and deposit such amount in the Class B Distribution Account to be paid, pro rata, to the Class B Noteholders, and (4) to the extent any portion of the Class B Invested Amount still remains unpaid after application of the amounts specified in clauses (1) through (3) above, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement or amounts have been claimed under the Demand Note or drawn under the Series 1997 1/N1 Letter of Credit in respect thereof and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.19 of this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (x) the amount on deposit in the Series 1997 1/N1 Collection Account representing such draw on the Series 1997 1/N1 Letter of Credit or payment under the Demand Note (after application of any portion thereof pursuant to Sections 4.9(a), (b) and (c) and Section 4.10(a) of this Supplement)and (y) the excess of the Class B Invested Amount over the amounts described in clauses (1) through (3) above and deposit such amount in the Class B Distribution Account to be paid, pro rata, to the Class B Noteholders; provided, however, that on the final Payment Date for the Class B Notes, the Trustee shall withdraw from the Series 1997 1/N1 Collection Account, as provided above, an aggregate amount which is no greater than the Class B Invested Amount as of such date. Subject to Section 4.14 of this Supplement, the Invested Amount of each outstanding Class of Class B Notes shall be due and payable on the Series 1997 1/N1 Termination Date for such Class. (iv) On each Payment Date occurring on or after the date a withdrawal is made pursuant to Section 4.10(b)(ii) and (iii) of this Supplement, -84- 89 the Paying Agent shall, in accordance with Section 5.1 of the Base Indenture and the Servicer's most recent Monthly Certificate pay to the applicable Class B Noteholders specified in Section 4.10(b)(ii) or (iii) of this Supplement, as applicable, pro rata, the amount deposited in the Class B Distribution Account for the payment of principal pursuant to Section 4.10(b)(ii) and (iii), as applicable, of this Supplement. (c) Class C Notes. (i) Commencing on the second Determination Date after the commencement of the Class C-1 Controlled Amortization Period, the Class C-2 Controlled Amortization Period or the Class C-3 Controlled Amortization Period (as the case may be), or the first Determination Date after the commencement of the Series 1997 1/N1 Rapid Amortization Period, provided that the Class A Notes and the Class B Notes shall have then been paid in full, the Servicer shall instruct the Trustee or the Paying Agent as to the following: (A)(1) the Class C-1 Controlled Distribution Amount for the Related Month, (2) the amount allocated to the Class C-1 Notes during the Related Month pursuant to Section 4.7(b)(i)(3) or 4.7(c)(i)(3) of this Supplement, as applicable, and (3) the amount, if any, by which the amount in clause (A)(1) above exceeds the amount in clause (A)(2) above (the amount of such excess, the "Class C-1 Controlled Distribution Amount Deficiency"); and (B)(1) the Class C-2 Controlled Distribution Amount for the Related Month, (2) the amount allocated to the Class C-2 Notes during the Related Month pursuant to Section 4.7(b)(i)(3) or 4.7(c)(i)(3) of this Supplement, as applicable, and (3) the amount, if any, by which the amount in clause (B)(1) above exceeds the amount in clause (B)(2) above (the amount of such excess, the "Class C-2 Controlled Distribution Amount Deficiency"). (C)(1) the Class C-3 Controlled Distribution Amount for the Related Month, (2) the amount allocated to the Class C-3 Notes during the Related Month pursuant to Section 4.7(b)(i)(2) or 4.7(c)(i)(2) of this -85- 90 Supplement, as applicable, and (3) the amount, if any, by which the amount in clause (B)(1) above exceeds the amount in clause (B)(2) above (the amount of such excess, the "Class C-2 Controlled Distribution Amount Deficiency" and, together with the Class C-2 Controlled Distribution Amount Deficiency and the Class C-3 Controlled Distribution Amount Deficiency, the "Class C Controlled Distribution Amount Deficiency"). (ii) (A) Commencing on the second Payment Date after the commencement of the Class C-1 Controlled Amortization Period, the Trustee shall, [subject to Section 4.14 of this Supplement,] (1) withdraw from the Series 1997 1/N1 Collection Account an amount equal to the lesser of the amounts specified in clauses (A)(1) and (A)(2) of Section 4.10(c)(i) of this Supplement, (2) to the extent any Class C-1 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clause (1) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Excess Funding Accounts, for the other Group I Series of Notes, if any, an amount equal to the lesser of (x) the aggregate amount on deposit in such Excess Funding Accounts on such Payment Date (after application of any such amounts pursuant to Section 4.9 of the related Series Supplements)in an amount not to exceed the related Available Subordinated Amounts at such time, and (y) the remaining amount of the Class C-1 Controlled Distribution Amount Deficiency, and deposit such amount in the Class C Distribution Account to be paid, pro rata, to the Class C-1 Noteholders on account of the Class C-1 Controlled Distribution Amount, provided that any such amounts withdrawn from the Excess Funding Accounts for the other Group I Series of Notes shall be applied on a pro rata basis with respect to each Group I Series of Notes with respect to which a Class C-1 Controlled Distribution Amount Deficiency exists after application of the amounts specified in the corresponding sections of the related Series Supplements, (3) to the extent any Class C-1 Controlled Distribution Amount Deficiency exists after application of the amount specified in clauses (1) and (2) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Series 1997 1/N1 Excess Funding Account, an amount equal to the lesser of -86- 91 (v) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Sections 4.9(a), (b) and (c) and Sections 4.10(a) and 4.10 (b) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time and (w) the remaining amount of the Class C-1 Controlled Distribution Amount Deficiency and deposit such amount in the Class C Distribution Account to be paid, pro rata, to the Class C-1 Noteholders on account of the Class C-1 Controlled Distribution Amount, and (4) to the extent any Class C-1 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clauses (1) through (3) of this subsection, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement or amounts have been claimed under the Demand Note or drawn under the Series 1997 1/N1 Letter of Credit in respect thereof and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.19 of this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (x) the amount on deposit in the Series 1997 1/N1 Collection Account representing such draw on the Series 1997 1/N1 Letter of Credit or payment under the Demand Note (after application of any portion thereof pursuant to Sections 4.9(a), (b) and (c) and Sections 4.10(a) and 4.10(b) of this Supplement) and (y) the remaining amount of the Class B-1 Controlled Distribution Amount Deficiency (if any), and deposit such amount in the Class C Distribution Account to be paid, pro rata, to the Class C-1 Noteholders on account of the Class C-1 Controlled Distribution Amount; and (B) Commencing on the second Payment Date after the commencement of the Class C-2 Controlled Amortization Period, the Trustee shall, in respect of the Class C-2 Notes, subject to Section 4.14 of this Supplement, (1) withdraw from the Series 1997 1/N1 Collection Account an amount equal to the lesser of the amounts specified in clauses (B)(1) and (B)(2) of Section 4.10(c)(i) of this Supplement, (2) to the extent any Class C-2 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clause (1) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to -87- 92 withdraw, from funds on deposit in the related Excess Funding Accounts, if any, for the other Group I Series of Notes, if any, an amount equal to the lesser of (x) the aggregate amount on deposit in such Excess Funding Accounts on such Payment Date (after application of any such amounts pursuant to Sections 4.9 and 4.10 of the related Supplements) in an amount not to exceed the related Available Subordinated Amounts at such time and (y) the remaining amount of the Class C-2 Controlled Distribution Amount Deficiency, and deposit such amount in the Class C Distribution Account to be paid, pro rata, to the Class C-2 Noteholders on account of the Class C-2 Controlled Distribution Amount, provided that any such amounts withdrawn from the Excess Funding Accounts for the other Group I Series of Notes shall be applied on a pro rata basis with respect to each Group I Series of Notes with respect to which a Class C-2 Controlled Distribution Amount Deficiency exists after application of the amounts specified in the corresponding sections of the related Series Supplements, (3) to the extent any Class C-2 Controlled Distribution Amount Deficiency exists after application of the amounts specified in clause (1) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Series 1997 1/N1 Excess Funding Account, an amount equal to the lesser of (v) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Sections 4.9(a),(b) and 4.9(c) and Sections 4.10(a) and (b) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time and (w) the remaining amount of the Class C-2 Controlled Distribution Amount Deficiency and deposit such amount in the Class C Distribution Account to be paid, pro rata, to the Class C-2 Noteholders on account of the Class C-2 Controlled Distribution Amount, and (4) to the extent any Class B-2 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clauses (1) through (3) of this subsection, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement or amounts have been claimed under the Demand Note or drawn under the Series 1997 1/N1 Letter of Credit in respect thereof and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.19 of -88- 93 this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (x) the amount on deposit in the Series 1997 1/N1 Collection Account representing such draw on the Series 1997 1/N1 Letter of Credit or payment under the Demand Note (after application of any portion thereof pursuant to Sections 4.9(a), (b) and (c) and Section 4.10(a)and 4.10 (b)) and (y) the remaining amount of the Class C-2 Controlled Distribution Amount Deficiency (if any), and deposit such amount in the Class C Distribution Account to be paid, pro rata, to the Class C-2 Noteholders on account of the Class C-2 Controlled Distribution Amount. (C) Commencing on the second Payment Date after the commencement of the Class C-3 Controlled Amortization Period, the Trustee shall, in respect of the Class C-3 Notes, subject to Section 4.14 of this Supplement, (1) withdraw from the Series 1997 1/N1 Collection Account an amount equal to the lesser of the amounts specified in clauses (C)(1) and (C)(2) of Section 4.10(c)(i) of this Supplement, (2) to the extent any Class C-3 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clause (1) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the related Excess Funding Accounts for the other Group I Series of Notes, if any, an amount equal to the lesser of (x) the aggregate amount on deposit in such Excess Funding Accounts on such Payment Date (after application of any such amounts pursuant to Sections 4.9 and 4.10 of the related Supplements) in an amount not to exceed the related Available Subordinated Amounts at such time and (y) the remaining amount of the Class C-3 Controlled Distribution Amount Deficiency, and deposit such amount in the Class C Distribution Account to be paid, pro rata, to the Class C-3 Noteholders on account of the Class C-3 Controlled Distribution Amount, provided that any such amounts withdrawn from the Excess Funding Accounts for the other Group I Series of Notes shall be applied on a pro rata basis with respect to each Group I Series of Notes with respect to which a Class C-3 Controlled Distribution Amount Deficiency exists after application of the amounts specified in the corresponding sections of the related Series Supplements, and (y) the remaining amount of the Class C-3 Controlled Distribution Amount -89- 94 Deficiency and deposit such amount in the Class C Distribution Account to be paid, pro rata, to the Class C-3 Noteholders on account of the Class C-3 Controlled Distribution Amount, (3) to the extent any Class C-3 Controlled Distribution Amount Deficiency exists after application of the amounts specified in clause (1) of this subsection, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Series 1997 1/N1 Excess Funding Account, an amount equal to the lesser of (v) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Sections 4.9(a), (b) and (c), and Sections 4.10(a) and 4.10(b) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time and (w) the remaining amount of the Class C-3 Controlled Distribution Amount Deficiency and deposit such amount in the Class C Distribution Account to be paid, pro rata, to the Class C-3 Noteholders on account of the Class C-3 Controlled Distribution Amount, and (4) to the extent any Class C-3 Controlled Distribution Amount Deficiency remains after application of the amounts specified in clauses (1) through (3) of this subsection, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement or amounts have been claimed under the Demand Note or drawn under the Series 1997 1/N1 Letter of Credit in respect thereof and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.19 of this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (x) the amount on deposit in the Series 1997 1/N1 Collection Account representing such draw on the Series 1997 1/N1 Letter of Credit or payment under the Demand Note (after application of any portion thereof pursuant to Sections 4.9(a), (b) and (c) and Sections 4.10(a) and 4.10(b)) and (y) the remaining amount of the Class C-3 Controlled Distribution Amount Deficiency (if any), and deposit such amount in the Class C Distribution Account to be paid, pro rata, to the Class C-3 Noteholders on account of the Class C-2 Controlled Distribution Amount. (iii) (A) Commencing on the first Payment Date after the commencement of the Series 1997 1/N1 Rapid Amortization Period, provided that the -90- 95 Class A Notes and the Class B Notes shall have then been paid in full, the Trustee shall (1) withdraw from the Series 1997 1/N1 Collection Account the amount allocated thereto pursuant to Section 4.7(c)(x)(ii) of this Supplement, (2) to the extent any portion of the Class C Invested Amount still remains unpaid after application of the amounts specified in clause (1) above, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the related Excess Funding Accounts of any additional Group I Series of Notes, if any, an amount equal to the lesser of (x) the aggregate amount on deposit in such Excess Funding Accounts on such Payment Date (after application of any such amounts pursuant to Sections 4.9 and 4.10 of the related Series Supplement) and (y) the unpaid portion of the Class C Invested Amount and deposit such amount in the Class C Distribution Account to be paid, pro rata, to the Class C Noteholders, provided that any such amounts withdrawn from the Excess Funding Accounts for the other Group I Series of Notes shall be applied on a pro rata basis with respect to each Group I Series of Notes with respect to which a deficiency exists, (3) to the extent any portion of the Class C Invested Amount still remains unpaid after application of the amount specified in clauses (1) and (2) above, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw, from funds on deposit in the Series 1997 1/N1 Excess Funding Account, an amount equal to the lesser of (v) the amount on deposit in the Series 1997 1/N1 Excess Funding Account on such Payment Date (after application of any amounts pursuant to Sections 4.9(a), (b) and (c) and Sections 4.10(a) and (b) of this Supplement) in an amount not to exceed the Series 1997 1/N1 Available Subordinated Amount at such time and (w) the unpaid portion of the Class C Invested Amount and deposit such amount in the Class C Distribution Account to be paid, pro rata, to the Class C Noteholders, and (4) to the extent any portion of the Class C Invested Amount still remains unpaid after application of the amounts specified in clauses (1) through (3) above, if amounts have been drawn on the Series 1997 1/N1 Letter of Credit and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.18 of this Supplement or amounts have been claimed under the Demand Note or drawn under the Series 1997 1/N1 Letter of Credit in respect thereof and deposited into the Series 1997 1/N1 Collection Account pursuant to Section 4.19 of -91- 96 this Supplement, the Master Servicer shall instruct the Trustee or the Paying Agent to withdraw from the Series 1997 1/N1 Collection Account on such Payment Date the lesser of (x) the amount on deposit in the Series 1997 1/N1 Collection Account representing such draw on the Series 1997 1/N1 Letter of Credit or payment under the Demand Note (after application of any portion thereof pursuant to Sections 4.9(a), (b) and (c) and Sections 4.10(a) and (b) of this Supplement) and (y) the excess of the Class C Invested Amount over the amounts described in clauses (1) through (3) above and deposit such amount in the Class C Distribution Account to be paid, pro rata, to the Class C Noteholders; provided, however, that on the final Payment Date for the Class C Notes, the Trustee shall withdraw from the Series 1997 1/N1 Collection Account, as provided above, an aggregate amount which is no greater than the Class C Invested Amount as of such date. Subject to Section 4.14, the Invested Amount of each outstanding Class of Class C Notes shall be due and payable on the Series 1997 1/N1 Termination Date for such Class. (iv) On each Payment Date occurring on or after the date a withdrawal is made pursuant to Section 4.10(c)(ii) and (iii) of this Supplement, the Paying Agent shall, in accordance with Section 5.1 of the Base Indenture and the Servicer's most recent Monthly Certificate pay to the applicable Class C Noteholders specified in Section 4.10(c)(ii) or (iii) of this Supplement, as applicable, pro rata, the amount deposited in the Class C Distribution Account for the payment of principal pursuant to Section 4.10(c)(ii) and (iii), as applicable, of this Supplement. Section 4.11 Retained Distribution Account. On each Payment Date, the Master Servicer shall instruct the Trustee to instruct the Paying Agent to transfer to the Retained Distribution Account (established pursuant to Section 4.1(b) of the Base Indenture) (i) all funds which are in the Collection Account that have been allocated to the Retained Distribution Account as of such Payment Date and (ii) all funds that were previously allocated to the Retained Distribution Account but not transferred to the Retained Distribution Account. Section 4.12 Class A Distribution Account. (a) Establishment of Class A Distribution Account. The Trustee shall establish and maintain in the -92- 97 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 Master 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 shall instruct the Trustee to 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 Master Servicer shall instruct the institution maintaining the Class A Distribution Account to invest funds on deposit in the Class A Distribution Account at all times in Permitted Investments; provided, however, that any such investment shall mature not later than the Business Day prior to the Payment Date following the date on which such funds were received, unless any Permitted Investment held in the Class A Distribution Account is held with the Paying Agent, in which case such investment may mature on such Payment Date provided that such funds shall be available for withdrawal on or prior to such Payment Date. The Trustee shall hold, for the benefit of the Class A Noteholders, possession of any negotiable instruments or securities evidencing the Permitted Investments from the time of purchase thereof until the time of maturity. (c) Earnings from Class A Distribution Account. Subject to the restrictions set forth above, the Master 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 on deposit and available for distribution. (d) Class A Distribution Account Constitutes Additional Collateral for Class A Notes. In order to secure and provide for the payment of the RCFC Obligations with respect to the Class A Notes (but not the other Notes), RCFC hereby assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Class A Noteholders, all -93- 98 of RCFC'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 monies in the Class A Distribution Account; and (v) all proceeds of any and all of the foregoing, including, without limitation, cash (the items in the foregoing clauses (i) through (v) are referred to, collectively, as the "Class A Distribution Account Collateral"). The Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Class A Distribution Account and in all proceeds thereof. The Class A Distribution Account Collateral shall be under the sole dominion and control of the Trustee, and the Paying Agent at the direction of the Trustee, in each case for the benefit of the Class A Noteholders. Section 4.13 Class B Distribution Account. (a) Establishment of Class B Distribution Account. The Trustee shall establish and maintain in the name of the Trustee for the benefit of the Class B Noteholders, or cause to be established and maintained, an account (the "Class B Distribution Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Class B Noteholders. The Class B Distribution Account shall be maintained (i) with a Qualified Institution, or (ii) as a segregated trust account with the corporate trust department of a depository institution or trust company having corporate trust powers and acting as trustee for funds deposited in the Class B Distribution Account. If the Class B Distribution Account is not maintained in accordance with the previous sentence, the Master 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 shall instruct the Trustee to 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 Master Servicer shall instruct the institution maintaining the Class B Distribution Account to invest funds on deposit in the Class B Distribution Account at all times in Permitted Investments; provided, however, that any such investment shall mature not later than the Business Day prior to the Payment Date following the date on which such -94- 99 funds were received, unless any Permitted Investment held in the Class B Distribution Account is held with the Paying Agent, in which case such investment may mature on such Payment Date provided that such funds shall be available for withdrawal on or prior to such Payment Date. The Trustee shall hold, for the benefit of the Class B Noteholders, possession of any negotiable instruments or securities evidencing the Permitted Investments from the time of purchase thereof until the time of maturity. (c) Earnings from Class B Distribution Account. Subject to the restrictions set forth above, the Master 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 on deposit and available 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 RCFC Obligations with respect to the Class B Notes (but not the other Notes), RCFC hereby assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Class B Noteholders, all of RCFC'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 monies in the Class B Distribution Account; and (v) all proceeds of any and all of the foregoing, including, without limitation, cash (the items in the foregoing clauses (i) through (v) are referred to, collectively, as the "Class B Distribution Account Collateral"). The Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Class B Distribution Account and in all proceeds thereof. The Class B Distribution Account Collateral shall be under the sole dominion and control of the Trustee, and the Paying Agent at the direction of the Trustee, in each case for the benefit of the Class B Noteholders. Section 4.14 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. Except as provided in Article 6 of the Supplement, no payments on account of interest shall be made with respect -95- 100 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 made in full. The Class B-1 Notes will be subordinated to the Class A-1 Notes, such that no payments on account of principal shall be made with respect to the Class B-1 Notes until the Class A-1 Notes have been paid in full, the Class B-2 Notes will be subordinated to the Class A-2 Notes, such that no payments on account of principal shall be made with respect to the Class B-2 Notes until the Class A-2 Notes have been paid in full and the Class B-3 Notes will be subordinated to the Class A-3 Notes, such that no payments on account of principal shall be made with respect to the Class B-3 Notes until the Class A-3 Notes have been paid in full; provided, however, that with respect to (x) allocations and payments on account of principal during a Series 1997 1/N1 Rapid Amortization Period, (y) allocation of Losses and Recoveries at any time, and (z) any repurchase of Notes pursuant to Section 8.1 of the Supplement, all of the Class B Notes will be subordinated to the Class A Notes. Section 4.15 Class C Distribution Account. (a) Establishment of Class C Distribution Account. The Trustee shall establish and maintain in the name of the Trustee for the benefit of the Class C Noteholders, or cause to be established and maintained, an account (the "Class C Distribution Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Class C Noteholders. The Class C 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 C Distribution Account. If the Class C Distribution Account is not maintained in accordance with the previous sentence, the Master Servicer shall establish a new Class C Distribution Account, within ten (10) Business Days after obtaining knowledge of such fact, which complies with such sentence, and shall instruct the Trustee to transfer all cash and investments from the non-qualifying Class C Distribution Account into the new Class C Distribution Account. Initially, the Class C Distribution Account will be established with the Trustee. (b) Administration of the Class C Distribution Account. The Master Servicer shall instruct the institution maintaining the Class C Distribution Account to invest funds on deposit in the Class C Distribution Account at all times in Permitted Investments; provided, however, that any such -96- 101 investment shall mature not later than the Business Day prior to the Payment Date following the date on which such funds were received, unless any Permitted Investment held in the Class C Distribution Account is held with the Paying Agent, in which case such investment may mature on such Payment Date provided that such funds shall be available for withdrawal on or prior to such Payment Date. The Trustee shall hold, for the benefit of the Class C Noteholders, possession of any negotiable instruments or securities evidencing the Permitted Investments from the time of purchase thereof until the time of maturity. (c) Earnings from Class C Distribution Account. Subject to the restrictions set forth above, the Master Servicer shall have the authority to instruct the Trustee with respect to the investment of funds on deposit in the Class C Distribution Account. All interest and earnings (net of losses and investment expenses) on funds on deposit in the Class C Distribution Account shall be deemed to be on deposit and available for distribution. (d) Class C Distribution Account Constitutes Additional Collateral for Class C Notes. In order to secure and provide for the payment of the RCFC Obligations with respect to the Class C Notes (but not the other Notes), RCFC hereby assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Class C Noteholders, all of RCFC'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 C 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 C 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 monies in the Class C 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 C Distribution Account Collateral"). The Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Class C Distribution Account and in all proceeds thereof. The Class C Distribution Account Collateral shall be under the sole dominion and control of the Trustee, and the Paying Agent at the direction of the Trustee, in each case for the benefit of the Class C Noteholders. Section 4.16 Class C Notes Subordinate to Class A Notes and Class B Notes. Notwithstanding anything to the contrary contained herein or in any other Related Document, the Class C Notes will be subordinate in all respects to the Class A Notes and the Class B Notes. No payments on account -97- 102 of interest shall be made with respect to the Class C Notes until all payments of interest then due and payable with respect to the Class A Notes and the Class B Notes (including, without limitation, all accrued interest, all interest accrued on such accrued interest, and all Class A Deficiency Amounts and Class B Deficiency Amounts) have been made in full. The Class C-1 Notes will be subordinated to the Class A-1 Notes and the Class B-1 Notes, such that no payments on account of principal shall be made with respect to the Class C-1 Notes until the Class A-1 Notes and the Class B-1 Notes have been paid in full the Class C-2 Notes will be subordinated to the Class A-2 Notes and the Class B-2 Notes, such that no payments on account of principal shall be made with respect to the Class C-2 Notes until the Class A-2 Notes and the Class B-2 Notes have been paid in full and the Class C-3 Notes will be subordinate to the Class A-3 Notes and the Class B-3 Notes such that no payments on account of principal shall be made with respect to the Class C-3 Notes until the Class A-3 Notes and the Class B-3 Notes are paid in full; provided, however, that with respect to (x) allocations and payments on account of principal during a Series 1997 1/N1 Rapid Amortization Period, (y) allocation of Losses and Recoveries at any time, and (z) any repurchase of Notes pursuant to Section 8.1 of the Supplement, all of the Class B Notes will be subordinated to the Class A Notes. Section 4.17 The Servicer's Failure to Instruct the Trustee to Make a Deposit or Payment. If the Master Servicer fails to give notice or instructions to make any payment from or deposit into the Collection Account required to be given by the Master Servicer, at the time specified in the Master Lease or any other Related Document (including applicable grace periods), and such failure is known by the Trustee, the Trustee shall make such payment or deposit into or from the Collection Account without such notice or instruction from the Master Servicer. Pursuant to the Master Lease, the Master Servicer has agreed that it shall, upon request of the Trustee, promptly provide the Trustee with all information necessary to allow the Trustee to make such a payment or deposit. Section 4.18 Lease Payment Deficit Draw on Series 1997 1/N1 Letter of Credit. (a) At or before [10:00 a.m.] (New York City time) on each Payment Date, the Master Servicer shall notify the Trustee pursuant to the Master Lease of the amount of the Series 1997 1/N1 Lease Payment Losses, such notification to be in the form of Exhibit E to the Master Lease. (b) So long as the Series 1997 1/N1 Letter of Credit shall not have been terminated, on any Business Day that there are Series 1997 1/N1 Lease Payment Losses, the Trustee -98- 103 shall, by [3:00 p.m.] (New York City time) on the same Business Day, draw on the Series 1997 1/N1 Letter of Credit by presenting a draft in an amount equal to the lesser of (i) the Series 1997 1/N1 Lease Payment Losses allocated to making a drawing under the Series 1997 1/N1 Letter of Credit pursuant to Sections 4.7(a)(v)(1), (b)(v)(1) or (c)(v)(1), as applicable, of this Supplement, Deficit and (ii) the amount available to be drawn on the Series 1997 1/N1 Letter of Credit on such Business Day accompanied by a Certificate of Credit Demand in the form of Annex A to the Series 1997 1/N1 Letter of Credit. The proceeds of such draw shall be immediately deposited in the Series 1997 1/N1 Collection Account for further allocation to the Class A Distribution Account and/or the Class B Distribution Account and/or the Class C Distribution Account in accordance with the instructions of the Master Servicer. Section 4.19 Claim Under on the Demand Note. (a) On each Determination Date, the Master Servicer shall determine the aggregate amount, if any, of Losses that have occurred during the Related Month. In the event that any such Losses occurring during such Related Month exceed the amount of Recoveries received during such Related Month, the Master Servicer shall set forth the aggregate amount of such net Losses in the Monthly Report, and the Trustee shall make the allocations as set forth in Sections 4.7(a)(iii)(1), (b)(iii)(1) and (c)(iii)(1), as applicable, of this Supplement. If any amounts are allocated to a claim under the Demand Note pursuant to such Sections (any such amounts, "Demand Note Claim Amounts"), the Trustee shall transmit to the issuer of the Demand Note a demand for repayment (each, a "Demand Notice") under the Demand Note in the amount of the lesser of (x) the outstanding amount of such Demand Note and (y) the Demand Note Claim Amounts, in each case such payment to be made on or prior to the next succeeding Payment Date by deposit of funds into the Series 1997 1/N1 Collection Amount in the specified amount. (b) In the event that on or prior to 10:00 a.m. (New York City time) on the Payment Date next succeeding any Determination Date on which a Demand Notice has been transmitted to the issuer of the Demand Note pursuant to Section 4.19(a) above, the Demand Note issuer shall have failed to deposit into the Series 1997 1/N1 Collection Account the amount specified in such Demand Notice, so long as the Series 1997 1/N1 Letter of Credit shall not have been terminated, the Trustee shall, by 2:00 p.m. (New York City time) on the same Business Day, draw on the Series 1997 1/N1 Letter of Credit by presenting a draft in an amount equal to that portion of the amount demanded under the Demand Note as specified in (a) above that has not been deposited into the Series 1997 1/N1 Collection Account as of 10:00 a.m. (New York City time), accompanied by a Certificate of Credit Demand in the form of Annex A to the Series 1997 1/N1 Letter of Credit. The proceeds -99- 104 of such draw shall be deposited in the Series 1997 1/N1 Collection Account for application pursuant to Section 4.10(a)(ii), (b)(ii) or (c)(ii) of this Supplement, as applicable. (c) Demand Note Constitutes Additional Collateral for Series 1997 1/N1 Notes. In order to secure and provide for the payment of the RCFC Obligations with respect to the Series 1997 1/N1 Notes (but not the other Notes), RCFC hereby assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Series 1997 1/N1 Noteholders, all of RCFC's right, title and interest in and to the Demand Note and all proceeds thereof. The Trustee shall possess all right, title and interest in the Demand Note, all rights to make claims thereunder and all payments thereon and all proceeds thereof. Section 4.20 Series 1997 1/N1 Letter of Credit Termination Demand. (a) If prior to the date which is 30 days prior to the then scheduled Series 1997 1/N1 Letter of Credit Expiration Date, (i) there shall not have been appointed a successor institution to act as Series 1997 1/N1 Letter of Credit Provider, or (ii) the payments to be made by the Lessees under the Master Lease shall not have otherwise been credit enhanced with (A) the funding of the Series 1997 1/N1 Cash Collateral Account with cash in the amount of the Series 1997 1/N1 Letter of Credit Amount, (B) other cash collateral accounts, overcollateralization or subordinated securities or (C) with the consent of the Required Noteholders, a surety bond or other similar arrangements; provided, however, that (1) any such successor institution or other form of substitute credit enhancement referred to in the foregoing clauses (i) and (ii) shall be approved by each Rating Agency; and (2) any such successor institution or other form of substitute credit enhancement referred to in the foregoing clauses (i) or (ii)(C) shall, if the ratings with respect to such substitute credit enhancement, if applicable, are less than A-1 or the equivalent from Standard & Poor's (and if DCR is then a Rating Agency, a comparable rating by DCR, if any), be approved by the Required Noteholders; then the Master Servicer shall notify the Trustee pursuant to the Master Lease no later than one Business Day prior to -100- 105 the Series 1997 1/N1 Letter of Credit Expiration Date of (i) the principal balance of all Outstanding Series 1997 1/N1 Notes on such date, and (ii) the amount available to be drawn on the Series 1997 1/N1 Letter of Credit on such date. Upon receipt of such notice by the Trustee on or prior to [10:00 a.m.] (New York City time) on any Business Day, the Trustee shall, by [3:00 p.m.] (New York City time) on such Business Day (or, in the case of any notice given to the Trustee after [10:00 a.m.] (New York City time), by [3:00 p.m.] (New York City time) on the next following Business Day), draw the lesser of the amounts set forth in clauses (i) and (ii) above on the Series 1997 1/N1 Letter of Credit by presenting a draft accompanied by a Certificate of Termination Demand in the form of Annex B to the Series 1997 1/N1 Letter of Credit and shall deposit the proceeds of the disbursement resulting therefrom in a special deposit account (the "Series 1997 1/N1 Cash Collateral Account"). (b) The Master Servicer shall notify the Trustee pursuant to the Master Lease within one Business Day of becoming aware that the long-term debt credit rating of the Series 1997 1/N1 Letter of Credit Provider has fallen below "[__]" as determined by Standard & Poor's [or "[____]" as determined by DCR, if rated by DCR]. At such time the Master Servicer shall also notify the Trustee of (i) the principal balance of all Outstanding Series 1997 1/N1 Notes on such date, and (ii) the Series 1997 1/N1 Letter of Credit Amount on such date. Upon receipt of such notice by the Trustee on or prior to [10:00 a.m.] (New York City time) on any Business Day, the Trustee shall, by [3:00 p.m.] (New York City time) on such Business Day (or, in the case of any notice given to the Trustee after [10:00 a.m.] (New York City time), by [3:00 p.m.] (New York City time) on the next following Business Day), draw on the Series 1997 1/N1 Letter of Credit in an amount equal to the lesser of the principal balance of all Outstanding Series 1997 1/N1 Notes on such Business Day and the amount available to be drawn on the Series 1997 1/N1 Letter of Credit on such Business Day by presenting a draft accompanied by a Certificate of Termination Demand in the form of Annex B to the Series 1997 1/N1 Letter of Credit and shall deposit the proceeds of the disbursement resulting therefrom in the Series 1997 1/N1 Cash Collateral Account. Section 4.21 The Series 1997 1/N1 Cash Collateral Account. (a) Upon receipt of notice of a draw on the Series 1997 1/N1 Letter of Credit pursuant to Section 4.20, the Trustee shall establish and maintain in the name of the Trustee for the benefit of the Series 1997 1/N1 Noteholders, or cause to be established and maintained, the Series 1997 1/N1 Cash Collateral Account bearing a designation clearly -101- 106 indicating that the funds deposited therein are held for the Series 1997 1/N1 Noteholders. The Series 1997 1/N1 Cash Collateral 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 Series 1997 1/N1 Cash Collateral Account. If the Series 1997 1/N1 Cash Collateral Account is not maintained in accordance with the prior sentence, then within 10 Business Days after obtaining knowledge of such fact, the Master Servicer has agreed pursuant to the Master Lease that it shall establish a new Series 1997 1/N1 Cash Collateral Account which complies with such sentence and shall instruct the Trustee to transfer into the new Series 1997 1/N1 Cash Collateral Account all cash and investments from the non-qualifying Series 1997 1/N1 Cash Collateral Account. When established, the Series 1997 1/N1 Cash Collateral Account is intended to function in all respects as the replacement for, and the equivalent of, the Series 1997 1/N1 Letter of Credit. Accordingly, following its creation, each reference to a draw on the Series 1997 1/N1 Letter of Credit shall refer to withdrawals from the Series 1997 1/N1 Cash Collateral Account and references to similar terms shall mean and be a reference to actions taken with respect to the Series 1997 1/N1 Cash Collateral Account that correspond to actions that otherwise would have been taken with respect to the Series 1997 1/N1 Letter of Credit. Without limiting the generality of the foregoing, upon funding of the Series 1997 1/N1 Cash Collateral Account, the Trustee shall, at all times when otherwise required to make a draw under the Series 1997 1/N1 Letter of Credit pursuant to Section 4.18 or 4.19 of this Supplement, make a draw from the Series 1997 1/N1 Cash Collateral Account in the amount and at such time as a draw would be made under the Series 1997 1/N1 Letter of Credit pursuant to Section 4.18 or 4.19 of this Supplement. The Trustee shall provide written notice to Dollar of any draw from the Series 1997 1/N1 Cash Collateral Account pursuant to Section 4.18 or 4.19 of this Supplement. (b) In order to secure and provide for the repayment and payment of the obligations of RFC with respect to the Series 1997 1/N1 Notes (but not the other Notes), RCFC hereby assigns, pledges, grants, transfers and sets over to the Trustee, for the benefit of the Series 1997 1/N1 Noteholders, all of RCFC's right, title and interest in and to the following (whether now or hereafter existing and whether now owned or hereafter acquired): (i) the Series 1997 1/N1 Cash Collateral 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 Series 1997 1/N1 Cash Collateral 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 the -102- 107 monies in the Series 1997 1/N1 Cash Collateral Account; and (v) all proceeds of any and all of the foregoing, including, without limitation, cash. The Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Series 1997 1/N1 Cash Collateral Account and in all proceeds thereof. The Series 1997 1/N1 Cash Collateral Account shall be under the sole dominion and control of the Trustee for the benefit of the Series 1997 1/N1 Noteholders and the Series 1997 1/N1 Letter of Credit Provider, as their interests appear herein, which interest in the case of the Series 1997 1/N1 Letter of Credit Provider shall be subject to the interests of the holders of Series 1997 1/N1 Notes as provided herein. (c) Funds on deposit in the Series 1997 1/N1 Cash Collateral Account shall, at the direction of the Master Servicer given pursuant to the Master Lease, be invested by the Trustee in Permitted Investments. Funds on deposit in the Series 1997 1/N1 Cash Collateral Account on any Payment Date, after giving effect to any deposits to or withdrawals from the Series 1997 1/N1 Cash Collateral Account on such Payment Date, shall be invested in Permitted Investments that will mature at such time that such funds will be available for withdrawal on or prior to the following Payment Date. The proceeds of any such investment, to the extent not distributed on such Payment Date, shall be invested in Permitted Investments that will mature at such time that such funds will be available for withdrawal on or prior to the Payment Date immediately following the date of such investment. The Trustee shall maintain for the benefit of the Series 1997 1/N1 Noteholders and the Series 1997 1/N1 Letter of Credit Provider as their interests appear herein, which interest in the case of the Series 1997 1/N1 Letter of Credit Provider shall be subject to the interests of the holders of the Series 1997 1/N1 Notes as provided herein, possession of the negotiable instruments or securities evidencing the Permitted Investments from the time of purchase thereof until the time of sale or maturity. On each Payment Date, all interest and earnings (net of losses and investment expenses) accrued since the preceding Payment Date on funds on deposit in the Series 1997 1/N1 Cash Collateral Account shall be paid to the Series 1997 1/N1 Letter of Credit Provider to the extent of any unreimbursed draws on the Series 1997 1/N1 Letter of Credit. Subject to the restrictions set forth above, the Master Servicer, or a Person designated in writing by the Master Servicer with written notification thereof to the Trustee, shall have the authority to instruct the Trustee with respect to the investment of funds on deposit in the Series 1997 1/N1 Cash Collateral Account. For purposes of determining the availability of funds or the balances in the Series 1997 1/N1 Cash Collateral Account for any reason under the Indenture, -103- 108 all investment earnings on such funds shall be deemed not to be available or on deposit. (d) Series 1997 1/N1 Cash Collateral Account Surplus. In the event that the Series 1997 1/N1 Cash Collateral Account Surplus on any Payment Date, after giving effect to all withdrawals from the Series 1997 1/N1 Cash Collateral Account, is greater than zero, the Trustee, acting in accordance with the instructions of the Servicer, shall withdraw from the Series 1997 1/N1 Cash Collateral Account an amount equal to the Cash Collateral Amount Surplus and shall pay from such amount to the Series 1997 1/N1 Letter of Credit Provider, an amount equal to the amount of unreimbursed draws under the Series 1997 1/N1 Letter of Credit. (e) Termination of Series 1997 1/N1 Cash Collateral Account. Upon the later to occur of (i) the termination of the Indenture pursuant to Section 10.1 of the Base Indenture and (ii) the Business Day immediately following the Series 1997 1/N1 Letter of Credit Expiration Date, the Trustee, acting in accordance with the instructions of the Servicer, after the prior payment of all amounts owing to the Series 1997 1/N1 Noteholders and payable from the Series 1997 1/N1 Cash Collateral Account as provided herein, shall withdraw from the Series 1997 1/N1 Cash Collateral Account all amounts on deposit therein for payment to the Series 1997 1/N1 Letter of Credit Provider to the extent of unreimbursed draws on the Series 1997 1/N1 Letter of Credit. ARTICLE 5 AMORTIZATION EVENTS Section 5.1 Series 1997 1/N1 Amortization Events. In addition to the Amortization Events set forth in Section 8.1 of the Base Indenture, the following shall be Amortization Events with respect to the Series 1997 1/N1 Notes (without notice or other action on the part of the Trustee or any Series 1997 1/N1 Noteholders): (a) a Series 1997 1/N1 Enhancement Deficiency shall occur and continue for at least five (5) Business Days after the Master Servicer obtains actual knowledge thereof; provided, however, that such event or condition shall not be an Amortization Event if (i) during such five (5) Business Day period DTAG shall have increased the Series 1997 1/N1 Letter of Credit Amount or RCFC shall have increased the Series 1997 1/N1 Available Subordinated Amount by allocating to the Series 1997 1/N1 Available Subordinated Amount, Eligible Vehicles theretofore allocated to the Retained Interest or by depositing funds into the Series 1997 1/N1 Cash Collateral Account or the Series 1997 1/N1 Excess Funding Account, in -104- 109 either case so that the Series 1997 1/N1 Enhancement Deficiency no longer exists, and (ii) any increase in the Series 1997 1/N1 Available Subordinated Amount pursuant to clause (i) of this Section 5.1(a) shall be in accordance with the terms of Section 4.7(d)(E) of this Supplement; (b) the Series 1997 1/N1 Letter of Credit shall not be in full force and effect and no substitute credit enhancement shall have been obtained pursuant to the Series 1997 1/N1 Letter of Credit Reimbursement Agreement unless (i) (A) the inclusion of the Series 1997 1/N1 Letter of Credit Amount in the Class A Enhancement Amount is not necessary for the Class A Enhancement Amount to equal or exceed the Minimum Class A Enhancement Amount, (B) the inclusion of the Series 1997 1/N1 Letter of Credit Amount in the Class B Enhancement Amount is not necessary for the Class B Enhancement Amount to equal or exceed the Minimum Class B Enhancement Amount and (C) the inclusion of the Series 1997 1/N1 Letter of Credit Amount in the Class C Enhancement Amount is not necessary for the Class C Enhancement Amount to equal or exceed the Minimum Class C Enhancement Amount, or (ii) the Series 1997 1/N1 Cash Collateral Account shall theretofore have been funded to the full extent required; (c) from and after the funding of the Series 1997 1/N1 Cash Collateral Account pursuant to Section 4.20 or 4.21 of this Supplement, the Series 1997 1/N1 Cash Collateral Account shall be subject to an injunction, estoppel or other stay or a Lien (other than the Lien of the Trustee under the Indenture); (d) an Event of Bankruptcy shall have occurred with respect to the Series 1997 1/N1 Letter of Credit Provider or the Series 1997 1/N1 Letter of Credit Provider repudiates the Series 1997 1/N1 Letter of Credit or refuses to honor a proper draw thereon in accordance with the terms thereof, unless (i) (A) the inclusion of the Series 1997 1/N1 Letter of Credit Amount in the Class A Enhancement Amount is not necessary for the Class A Enhancement Amount to equal or exceed the Minimum Class A Enhancement Amount, (B) the inclusion of the Series 1997 1/N1 Letter of Credit Amount in the Class B Enhancement Amount is not necessary for the Class B Enhancement Amount to equal or exceed the Minimum Class B Enhancement Amount and (C) the inclusion of the Series 1997 1/N1 Letter of Credit Amount in the Class C Enhancement Amount is not necessary for the Class C Enhancement Amount to equal or exceed the Minimum Class C Enhancement Amount, or (ii) the Series 1997 1/N1 Cash Collateral Account shall theretofore have been funded to the full extent required hereunder and under the Series 1997 1/N1 Letter of Credit Reimbursement Agreement; -105- 110 (e) any of the Related Documents or any portion thereof shall not be in full force and effect or enforceable in accordance with its terms or RCFC, DTAG (including in its capacity as Master Servicer), Thrifty (including in its capacity as a Servicer) or Dollar (including in its capacity as a Servicer) or any successor to Thrifty or Dollar in their respective capacities as Servicers shall so assert in writing; (f) all principal and accrued interest of the Class A-1 Notes shall not be paid in full on or before the Class A-1 Expected Final Payment Date, all principal and accrued interest of the Class A-2 Notes shall not be paid in full on or before the Class A-2 Expected Final Payment Date, all principal and accrued interest of the Class A-3 Notes shall not be paid in full on or before the Class A-3 Expected Final Payment Date, all principal and accrued interest in respect of the Class B-1 Notes shall not be paid in full on or before the Class B-1 Expected Final Payment Date, all principal and accrued interest in respect of the Class B-2 Notes shall not be paid in full on or before the Class B-2 Expected Final Payment Date, all principal and accrued interest in respect of the Class B-3 Notes shall not be paid in full on or before the Class B-3 Expected Final Payment Date, all principal and accrued interest in respect of the Class C-1 Notes shall not be paid in full on or before the Class C-1 Expected Final Payment Date, all principal and accrued interest in respect of the Class C-2 Notes shall not be paid in full on or before the Class C-2 Expected Final Payment Date, or all principal and accrued interest in respect of the Class C-3 Notes shall not be paid in full on or before the Class C-3 Expected Final Payment Date; or (g) an event of default shall have occurred and be continuing under the Master Lease. In the case of any event described in clauses (b) through (g) above, an Amortization Event will be deemed to have occurred with respect to the Series 1997 1/N1 Notes only if, after any applicable grace period described in such clauses, either the Trustee, by written notice to the Issuer, or the Required Noteholders, by written notice to the Issuer and the Trustee, declare that, as of the date of such notice, an Amortization Event has occurred. Section 5.2 Waiver of Past Events. Subject to Section 11.2 of the Base Indenture, Series 1997 1/N1 Noteholders holding 100% of the aggregate Invested Amount, by notice to the Trustee, may waive any existing Potential Amortization Event or Amortization Event related to clause (a) of this Section 5.1 of this Supplement. -106- 111 ARTICLE 6 [RESERVED] ARTICLE 7 FORM OF SERIES 1997 1/N1 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 and represented by a Restricted Global Class A Note, substantially in the form of Exhibit A-1, Exhibit A-2 or Exhibit A-3 (as applicable) appended 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 RCFC 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, substantially in the form of Exhibit A-4, Exhibit A-5 or Exhibit A-6 (as applicable) appended hereto, 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 RCFC 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, substantially in the form of Exhibit A-7, Exhibit A-8 or Exhibit A-9 hereto, 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 a definitive Class A Note in accordance with the provisions of such Permanent Global Class A Note and the Base Indenture (as modified by this Supplement). -107- 112 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 Restricted Global Class B Note, substantially in the form of Exhibit B-1, Exhibit B-2 or Exhibit B-3 (as applicable) appended 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 B Notes represented thereby, with a custodian for DTC, and registered in the name of Cede as DTC's nominee, duly executed by RCFC 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 Securities Act, as provided in the applicable placement agreement, and shall initially be issued in a form of Temporary Global Class B Note, substantially in the form of Exhibit B-4, Exhibit B-5 or Exhibit B-6 (as applicable) appended hereto, which shall be deposited on behalf of the purchasers of the Class B Notes represented thereby with a custodian for, and registered in the name of a nominee of, DTC, for the accounts of Morgan Guaranty Trust Company of New York, Brussels office, as operator of Euroclear and for Cedel, duly executed by RCFC and authenticated by the Trustee in the manner set forth in Section 2.4 of the Base Indenture. Interests in a Temporary Global Class B Note will be exchangeable, in whole or in part, for interests in a Permanent Global Class B Note substantially in the form of Exhibit B-7, Exhibit B-8 or Exhibit B-9 hereto, in accordance with the provisions of such Temporary Global Class B Note and the Base Indenture (as modified by this Supplement). Interests in a Permanent Global Class B Note will be exchangeable for a definitive Class B Note in accordance with the provisions of such Permanent Global Class B Note and the Base Indenture (as modified by this Supplement). Section 7.3 Class C Notes. (a) Restricted Global Class C Note. Class C Notes to be issued in the United States will be issued in book-entry form of and represented by a Restricted Global Class C Note, substantially in the form of Exhibit C-1, Exhibit C-2 or Exhibit C-3 (as applicable) appended 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 -108- 113 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 C Notes represented thereby, with a custodian for DTC, and registered in the name of Cede as DTC's nominee, duly executed by RCFC and authenticated by the Trustee in the manner set forth in Section 2.4 of the Base Indenture. (b) Temporary Global Class C Note; Permanent Global Class C Note. Class C 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 a form of Temporary Global Class C Note, substantially in the form of Exhibit C-4, Exhibit C-5 or Exhibit C-6 (as applicable) appended hereto, which shall be deposited on behalf of the purchasers of the Class C 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 RCFC and authenticated by the Trustee in the manner set forth in Section 2.4 of the Base Indenture. Interests in a Temporary Global Class C Note will be exchangeable, in whole or in part, for interests in a Permanent Global Class C Note substantially in the form of Exhibit C-7, Exhibit C-8 or Exhibit C-9 hereto, in accordance with the provisions of such Temporary Global Class C Note and the Base Indenture (as modified by this Supplement). Interests in a Permanent Global Class C Note will be exchangeable for a definitive Class C Note in accordance with the provisions of such Permanent Global Class C Note and the Base Indenture (as modified by this Supplement). ARTICLE 8 GENERAL Section 8.1 Repurchase of Notes. The Class A Notes, Class B Notes and Class C Notes shall be subject to repurchase in whole, but not in part, by RCFC at its option in accordance with Section 5.3 of the Base Indenture, as follows: (a) the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes are subject to repurchase by RCFC in whole, but not in part, on any Payment Date, the Class B-1 Notes, the Class B-2 Notes and the Class B-3 Notes are subject to repurchase by RCFC in whole, but not in part, on any Payment Date after the Class A Notes have been paid in full, and the Class C-1 Notes, the Class C-2 Notes and the Class C-3 Notes are subject to repurchase by RCFC in whole, but not in part, on any Payment Date after the Class A Notes and the Class B -109- 114 Notes have been paid in full(each such Payment Date, a "Repurchase Date"); (b) the purchase price for any such repurchase of Series 1997 1/N1 Notes shall equal the Aggregate Principal Balance of such Notes (determined after giving effect to any payment of principal on such Payment Date), plus accrued and unpaid interest on such Aggregate Principal Balance (the "Repurchase Price"); and (c) in addition, a prepayment premium (the "Series 1997 1/N1 Note Prepayment Premium") will be payable to the holders of a class of the Series 1997 1/N1 Notes upon any repurchase of such class of Notes by RCFC when the Aggregate Principal Balance of such class is greater than (i) $____________, with respect to the Class A-1 Notes, (ii) $____________, with respect to the Class A-2 Notes, (iii) $____________, with respect to the Class A-3 Notes, (iv) $____________, with respect to the Class B-1 Notes, (v) $____________, with respect to the Class B-2 Notes, (vi) $______________, with respect to the Class B-3 Notes, (vii) $______________, with respect to the Class C-1 Notes, (viii) $_______________, with respect to the Class C-2 Notes, and (ix) $_____________, with respect to the Class C- 3 Notes. [The Series 1997 1/N1 Note Prepayment Premium in respect of the Series 1997 1/N1 Notes will equal the excess, if any, of (i) the amount of interest that would have accrued on the Aggregate Principal Balance of the applicable class of Notes for the period commencing with the Repurchase Date and ending on the Class A-1 Notes Expected Final Payment Date, the Class A-2 Notes Expected Final Payment Date, the Class A-3 Notes Expected Final Payment Date, the Class B-1 Notes Expected Final Payment Date, the Class B-2 Notes Expected Final Payment Date, the Class B-3 Notes Expected Final Payment Date, the Class C-1 Notes Expected Final Payment Date, the Class C-2 Notes Expected Final Payment Date or the Class C-3 Notes Expected Final Payment Date, as applicable, at a rate equal to ____% with respect to the Class A-1 Notes, ____% with respect to the Class A-2 Notes, ____% with respect to the Class A-3 Notes, ____% with respect to the Class B-1 Notes, ____% with respect to the Class B-2 Notes, ____% with respect to the Class B-3 Notes, ____% with respect to the Class C-1 Notes, ____% with respect to the Class C-2 Notes and ____% with respect to the Class C-3 Notes, over (ii) the corporate bond equivalent yield to maturity on the Determination Date preceding such Repurchase Date on the [____]% United States Treasury Note maturing ____________, discounted to present value to such Repurchase Date at such corporate bond equivalent yield plus [___]%, with respect to the Class A-1 Notes; the corporate bond equivalent yield to maturity on the Determination Date preceding such Payment Date on the ____% United States Treasury Note maturing ___________, discounted to present -110- 115 value to such Payment Date at such corporate bond equivalent yield plus ____%, with respect to the Class A-2 Notes; the corporate bond equivalent yield to maturity on the Determination Date preceding such Payment Date on the ____% United States Treasury Note maturing ___________, discounted to present value to such Payment Date at such corporate bond equivalent yield plus ____%, with respect to the Class A-3 Notes; the corporate bond equivalent yield to maturity on the Determination Date preceding such Payment Date on the ____% United States Treasury Note maturing ___________, discounted to present value to such Payment Date at such corporate bond equivalent yield plus ____%, with respect to the Class B-1 Notes; the corporate bond equivalent yield to maturity on the Determination Date preceding such Payment Date on the ____% United States Treasury Note maturing ___________, discounted to present value to such Payment Date at such corporate bond equivalent yield plus ____%, with respect to the Class B-2 Notes; the corporate bond equivalent yield to maturity on the Determination Date preceding such Payment Date on the ____% United States Treasury Note maturing ___________, discounted to present value to such Payment Date at such corporate bond equivalent yield plus ____%, with respect to the Class B-3 Notes; the corporate bond equivalent yield to maturity on the Determination Date preceding such Payment Date on the ____% United States Treasury Note maturing ___________, discounted to present value to such Payment Date at such corporate bond equivalent yield plus ____%, with respect to the Class C-1 Notes; the corporate bond equivalent yield to maturity on the Determination Date preceding such Payment Date on the ____% United States Treasury Note maturing ___________, discounted to present value to such Payment Date at such corporate bond equivalent yield plus ____%, with respect to the Class C-2 Notes; and the corporate bond equivalent yield to maturity on the Determination Date preceding such Payment Date on the ____% United States Treasury Note maturing ___________, discounted to present value to such Payment Date at such corporate bond equivalent yield plus ____%, with respect to the Class C-3 Notes.]. Section 8.2 Payment of Rating Agencies' Fees. RCFC agrees and covenants with the Master Servicer and the Trustee 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. Section 8.3 Exhibits. The following exhibits attached hereto supplement the exhibits included in the Indenture. Exhibit A-1: Form of Restricted Global Class A-1 Note Exhibit A-2: Form of Restricted Global Class A-2 Note Exhibit A-3: Form of Restricted Global Class A-3 Note Exhibit A-4: Form of Temporary Global Class A-1 Note -111- 116 Exhibit A-5: Form of Temporary Global Class A-2 Note Exhibit A-6: Form of Temporary Global Class A-3 Note Exhibit A-7: Form of Permanent Global Class A-1 Note Exhibit A-8: Form of Permanent Global Class A-2 Note Exhibit A-9: Form of Permanent Global Class A-3 Note Exhibit B-1: Form of Restricted Global Class B-1 Note Exhibit B-2: Form of Restricted Global Class B-2 Note Exhibit B-3: Form of Restricted Global Class B-3 Note Exhibit B-4: Form of Temporary Global Class B-1 Note Exhibit B-5: Form of Temporary Global Class B-2 Note Exhibit B-6: Form of Temporary Global Class B-3 Note Exhibit B-7: Form of Permanent Global Class B-1 Note Exhibit B-8: Form of Permanent Global Class B-2 Note Exhibit B-9: Form of Permanent Global Class B-3 Note Exhibit C-1: Form of Restricted Global Class C-1 Note Exhibit C-2: Form of Restricted Global Class C-2 Note Exhibit C-3: Form of Restricted Global Class C-3 Note Exhibit C-4: Form of Temporary Global Class C-1 Note Exhibit C-5: Form of Temporary Global Class C-2 Note Exhibit C-6: Form of Temporary Global Class C-3 Note Exhibit C-7: Form of Permanent Global Class C-1 Note Exhibit C-8: Form of Permanent Global Class C-2 Note Exhibit C-9: Form of Permanent Global Class C-3 Note Exhibit D: Form of Consent Exhibit E: Form of Demand Note Section 8.4 Ratification of Base Indenture. As supplemented by this Supplement and except as specified in 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. In this regard, for the purposes of the terms and conditions governing the Series 1997 1/N1 Notes and the Group I Collateral, Section 7.28 of the Base Indenture shall not apply. Section 8.5 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. Section 8.6 Governing Law. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW (INCLUDING, WITHOUT LIMITATION, THE UCC) OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PROVISIONS THEREOF REGARDING CONFLICTS OF LAWS), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAW. Section 8.7 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 -112- 117 consent of the Required Noteholders is required for an amendment or modification of this Supplement, such requirement shall be satisfied if such amendment or modification is consented to by Noteholders representing more than 50% of the Aggregate Principal Balance of the Series 1997 1/N1 Notes affected thereby (including for purposes of determining such aggregate outstanding principal amount, the Aggregate Principal Balance of the Class A Notes, the Class B Notes and the Class C Notes); provided, further, that if the consent of the Required Noteholders is required for a proposed amendment or modification of this Supplement that (i) affects only the Class A-1 Notes (and does not affect in any material respect the Class A-2 Notes, the Class A-3 Notes, the Class B Notes or the Class C Notes, as evidenced by an Opinion of Counsel to such effect), then such requirement shall be satisfied if such amendment or modification is consented to by Class A-1 Noteholders representing more than 50% of the aggregate outstanding principal amount of the Class A-1 Notes (without the necessity of obtaining the consent of the Required Noteholders in respect of the Class A-2 Notes, the Class A-3 Notes, the Class B Notes or the Class C Notes), (ii) affects only the Class A-2 Notes (and does not affect in any material respect the Class A-1 Notes, the Class A-3 Notes, the Class B Notes or the Class C Notes, as evidenced by an Opinion of Counsel to such effect), then such requirement shall be satisfied if such amendment or modification is consented to by Class A-2 Noteholders representing more than 50% of the aggregate outstanding principal amount of the Class A-2 Notes (without the necessity of obtaining the consent of the Required Noteholders in respect of the Class A-1 Notes. the Class A-3 Notes, the Class B Notes or the Class C Notes), (iii) affects only the Class A-3 Notes (and does not affect in any material respect the Class A-1 Notes, the Class A-2 Notes, the Class B Notes or the Class C Notes, as evidenced by an Opinion of Counsel to such effect), then such requirement shall be satisfied if such amendment or modification is consented to by Class A-3 Noteholders representing more than 50% of the aggregate outstanding principal amount of the Class A-3 Notes (without the necessity of obtaining the consent of the Required Noteholders in respect of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes or the Class C Notes), (iv) affects only the Class A Notes (and does not affect in any material respect the Class B Notes or the Class C Notes, as evidenced by an Opinion of Counsel to such effect), then such requirement shall be satisfied if such amendment or modification is consented to by Class A Noteholders representing more than 50% of the aggregate outstanding principal amount of the Class A Notes (without the necessity of obtaining the consent of the Required Noteholders in respect of the Class B Notes or the Class C Notes), (v) affects only the Class B-1 Notes (and does not affect in any material respect the Class B-2 Notes, the Class B-3 Notes, the Class A Notes or the Class C Notes, as evidenced by an Opinion of Counsel to such effect), then such requirement shall be satisfied if such amendment or modification is consented to by Class B-1 Noteholders representing more than 50% of the aggregate outstanding principal amount of the -113- 118 Class B-1 Notes (without the necessity of obtaining the consent of the Required Noteholders in respect of the Class B-2 Notes, the Class B-3 Notes, the Class A Notes or the Class Notes), (vi) affects only the Class B-2 Notes (and does not affect in any material respect the Class B-1 Notes, the Class B-3 Notes, the Class A Notes or the Class C Notes, as evidenced by an Opinion of Counsel to such effect), then such requirement shall be satisfied if such amendment or modification is consented to by Class B-2 Noteholders representing more than 50% of the aggregate outstanding principal amount of the Class B-2 Notes (without the necessity of obtaining the consent of the Required Noteholders in respect of the Class B-1 Notes, the Class B-3 Notes, the Class A Notes or the Class C Notes), (vii) affects only the Class B-3 Notes (and does not affect in any material respect the Class A Notes, the Class B-1 Notes, the Class B-2 Notes or the Class C Notes, as evidenced by an Opinion of Counsel to such effect), then such requirement shall be satisfied if such amendment or modification is consented to by Class B-3 Noteholders representing more than 50% of the aggregate outstanding principal amount of the Class B-3 Notes (without the necessity of obtaining the consent of the Required Noteholders in respect of the Class A Notes, the Class B-1 Notes, the Class B-2 Notes or the Class C Notes), (viii) affects only the Class B Notes (and does not affect in any material respect the Class A Notes or the Class C Notes, as evidenced by an Opinion of Counsel to such effect), then such requirement shall be satisfied if such amendment or modification is consented to by Class B Noteholders representing more than 50% of the aggregate outstanding amount of the Class B Notes (without the necessity of obtaining the consent of the Required Noteholders in respect of the Class A Notes or the Class C Notes) (ix) affects only the Class C-1 Notes (and does not affect in any material respect the Class A Notes, the Class B Notes, the Class C-2 Notes or the Class C-3 Notes, as evidenced by an Opinion of Counsel to such effect), then such requirement shall be satisfied if such amendment or modification is consented to by Class C-1 Noteholders representing more than 50% of the aggregate outstanding principal amount of the Class C-1 Notes (without the necessity of obtaining the consent of the Required Noteholders in respect of the Class A Notes, the Class B Notes, the Class C-2 Notes or the Class C-3 Notes), (x) affects only the Class C-2 Notes (and does not affect in any material respect the Class A Notes, the Class B Notes, the Class C-1 Notes or the Class C-3 Notes, as evidenced by an Opinion of Counsel to such effect), then such requirement shall be satisfied if such amendment or modification is consented to by Class C-2 Noteholders representing more than 50% of the aggregate outstanding principal amount of the Class C-2 Notes (without the necessity of obtaining the consent of the Required Noteholders in respect of the Class A Notes, the Class B Notes, the Class C-1 Notes or the Class C-3 Notes),(xi) affects only the Class C-3 Notes (and does not affect in any material respect the Class A Notes, the Class B Notes, the Class C-1 Notes or the Class C-2 Notes, as evidenced by an Opinion of Counsel to such effect), -114- 119 then such requirement shall be satisfied if such amendment or modification is consented to by Class C-3 Noteholders representing more than 50% of the aggregate outstanding principal amount of the Class C-3 Notes (without the necessity of obtaining the consent of the Required Noteholders in respect of the Class A Notes, the Class B Notes, the Class C-1 Notes or the Class C-2 Notes), or (xii) affects only the Class C Notes (and does not affect in any material respect the Class A Notes or the Class B Notes, as evidenced by an Opinion of Counsel to such effect), then such requirement shall be satisfied if such amendment or modification is consented to by Class C Noteholders representing more than 50% of the aggregate outstanding principal amount of the Class C Notes (without the necessity of obtaining the consent of the Required Noteholders in respect of the Class A Notes or the Class B Notes). In addition, this Supplement may be amended or modified from time to time, without the consent of any Noteholder but with the consent of the Rating Agencies, RCFC, DTAG and the Trustee to amend the following definitions: "Maximum Manufacturer Percentage", "Measurement Month", "Measurement Month Average" and "Market Value Adjustment Percentage" and to make changes related to such amendments. [Remainder of Page Intentionally Blank] -115- 120 IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written. RENTAL CAR FINANCE CORP. By:______________________________________ Name: Title: BANKERS TRUST COMPANY, as Trustee By:______________________________________ Name: Title: -116- 121 SCHEDULE 1 Schedule of Maximum Manufacturer Percentages Manufacturer Program Vehicles Non-Program Vehicles - ------------ ---------------- -------------------- Chrysler Up to [___]% Up to [___]% Ford Up to [___]% Up to [___]% General Motors Up to [___]% Up to [___]% Honda Up to [___]% Up to [___]% Mazda N/A Up to [___]% Nissan N/A Up to [___]% Toyota Up to [___]% Up to [___]% Non-Chrysler Vehicles, Combined Up to [___]%* Up to [___]% - ---------- * Chrysler, Ford, General Motors, Honda and Toyota only. EX-4.8 4 MASTER MOTOR VEHICLE LEASE & SERVICING AGREEMENT 1 EXHIBIT 4.8 MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT dated as of December __, 1997, among RENTAL CAR FINANCE CORP. as Lessor, THRIFTY RENT-A-CAR-SYSTEM, INC., as Lessee and Servicer, DOLLAR RENT A CAR SYSTEMS, INC., as Lessee and Servicer, and those subsidiaries and affiliates of Dollar Thrifty Automotive Group, Inc. from time to time becoming Lessees and Servicers hereunder and DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. as Guarantor and Master Servicer AS SET FORTH IN SECTION 21 HEREOF, LESSOR HAS ASSIGNED TO THE TRUSTEE (AS DEFINED HEREIN) ALL OF LESSOR'S RIGHT, TITLE AND INTEREST IN AND TO THIS LEASE. TO THE EXTENT, IF ANY, THAT THIS LEASE CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART NO. 1, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY THE TRUSTEE ON THE SIGNATURE PAGE THEREOF. [THIS IS NOT THE ORIGINAL EXECUTED COUNTERPART NO. 1] [THIS IS THE ORIGINAL EXECUTED COUNTERPART NO. 1 (IF BEARING ORIGINAL SIGNATURES)] 2 MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT This Master Motor Vehicle Lease and Servicing Agreement (the "Base Lease" and, as supplemented by the Lease Annexes, this "Agreement" or "Lease"), dated as of December __, 1997, is by and among RENTAL CAR FINANCE CORP., a special purpose Oklahoma corporation (the "Lessor" or "RCFC"), as lessee and servicer, and DOLLAR RENT A CAR SYSTEMS, INC., an Oklahoma corporation ("Dollar"), THRIFTY RENT-A-CAR SYSTEM, INC., an Oklahoma corporation ("Thrifty"), as lessee and servicer, and those subsidiaries of Dollar Thrifty Automotive Group, Inc. from time to time becoming Lessees hereunder pursuant to Section 28 hereof (each, an "Additional Lessee"), as a lessee and a servicer (each of Thrifty and Dollar, and each of the Additional Lessees, in their respective capacities as lessees, a "Lessee" and, collectively, the "Lessees", and, in their respective capacities as servicers, a "Servicer" and, collectively, the "Servicers") and DOLLAR THRIFTY AUTOMOTIVE GROUP, INC., a Delaware corporation ("DTAG"), as Master Servicer (in such capacity, the "Master Servicer") and as Guarantor (in such capacity, the "Guarantor"). W I T N E S S E T H: WHEREAS, the Lessor (such capitalized term, together with all other capitalized terms used herein, shall have the meaning assigned thereto in Section 1) intends to refinance the Existing Fleet and to purchase, and finance the purchase of, additional Eligible Vehicles from one or more Manufacturers with the proceeds obtained by the issuance of its Rental Car Asset Backed Notes included in Group I and with certain other funds; and WHEREAS, the Lessor desires to lease to the Lessees, and the Lessees desire to lease from the Lessor, Vehicles for use in the Lessees' respective businesses, including subleasing Vehicles to Eligible Franchisees; NOW, THEREFORE, in consideration of the foregoing premises, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: SECTION 1. CERTAIN DEFINITIONS. Section 1.1. Certain Definitions. As used in this Agreement and unless the context requires a different meaning, capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in (a) the Definitions List, attached as Schedule 1 to the Base Indenture, dated as of December 13, 1995 (as amended on the date hereof and as such agreement may be further amended, supplemented, restated or otherwise modified from time to time in accordance with its terms, the "Base Indenture"), between RCFC and Bankers Trust Company, as trustee, as in effect on the date hereof and as such Schedule 1 may be amended, supplemented or modified from time to time in accordance with the terms of the Base Indenture (the "Definitions List"), or (b) each Supplement to the Base Indenture relating to a 3 Series of Shared Series Notes identified in such Supplement as being part of Group I. Unless the context otherwise requires, terms defined in both the Base Indenture and one or more of such Series Supplements shall have the meanings assigned to such terms in the applicable Series Supplements. Section 1.2. Accounting and Financial Determinations. Where the character or amount of any asset or liability or item of income or expense is required to be determined, or any accounting computation is required to be made, for the purpose of this Agreement, such determination or calculation shall be made, to the extent applicable and except as otherwise specified in this Agreement, in accordance with GAAP. When used herein, the term "financial statement" shall include the notes and schedules thereto. Section 1.3. Cross References; Headings. The words "hereof", "herein" and "hereunder" and words of a similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Annex, Section, Schedule and Exhibit references contained in this Agreement are references to Annexes, Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified. Any reference in any Section or definition to any clause is, unless otherwise specified, to such clause of such Section or definition. The various headings in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any provision hereof. Section 1.4. Interpretation. In this Agreement, unless the context otherwise requires: (a) the singular includes the plural and vice versa; (b) reference to any Person includes such Person's successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and reference to any Person in a particular capacity refers only to such Person in such capacity; (c) reference to any gender includes the other gender; (d) reference to any Requirement of Law means such Requirement of Law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time; (e) "including" (and, with correlative meaning, "include") means including without limiting the generality of any description preceding such term; (f) "or" is not exclusive; (g) provisions apply to successive events and transactions; and -2- 4 (h) with respect to the determination of any period of time, "from" means "from and including" and "to" and "through" mean "to but excluding". SECTION 2. GENERAL AGREEMENT. (a) As specified in the Lease Annexes, the Lessees and the Lessor intend that this Agreement be (i) an operating lease with respect to the Acquired Vehicles and (ii) a financing arrangement with respect to the Financed Vehicles. (b) If, notwithstanding the intent of the parties to this Agreement, this Agreement is deemed by any court, tribunal, arbitrator or other adjudicative authority in any proceeding (each, a "Court") to constitute a financing arrangement or otherwise not to constitute a "true lease" with respect to the Acquired Vehicles, then it is the intention of the parties that this Agreement together with the Master Collateral Agency Agreement, as such agreements apply to the Acquired Vehicles, shall constitute a security agreement under applicable law, and it is the intention of the parties that this Agreement together with the Master Collateral Agency Agreement, as such agreements apply to the Financed Vehicles, shall in all events constitute a security agreement under applicable law. Each Lessee hereby acknowledges that it has granted to the Master Collateral Agent, pursuant to the Master Collateral Agency Agreement, for the benefit of the Trustee, a first priority security interest in all of such Lessee's right, title and interest in and to the Lessee Master Collateral (as defined therein) as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of all of the obligations and liabilities of such Lessee to the Lessor and the Trustee, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred (including interest accruing after the Lease Expiration Date and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding), which may arise under, out of, or in connection with, this Agreement and any other document made, delivered or given in connection herewith, whether on account of rent, principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees and disbursements of counsel to the Lessor or the Trustee that are required to be paid by the Lessee pursuant to the terms hereof). Section 2.1. Leasing of Vehicles. Subject to the terms and conditions hereof, the Lessor agrees to lease to each Lessee and each Lessee agrees to lease from the Lessor (i) on the initial Closing Date, the Existing Fleet of Dollar, (ii) on the initial Vehicle Funding Date for an Additional Lessee, the Existing Fleet of such Lessee and (iii) on the initial Closing Date and from time to time thereafter, each additional Acquired Vehicle or Financed Vehicle identified in Vehicle order summaries (each, a "Vehicle Order") produced from time to time by such Lessee, listing Vehicles ordered from Eligible Manufacturers by the Lessee for itself or as agent for the Lessor, pursuant to the terms of any applicable Eligible Vehicle Disposition Programs or otherwise. The Lessor shall, subject to Section 4 and to compliance with the terms of the Indenture, make available to the Lessees under this Lease financing for Financed Vehicles (other than Texas Vehicles) in an aggregate amount, and Acquired Vehicles and Texas Vehicles for lease to the Lessees hereunder in an aggregate Net Book Value, which collectively shall not exceed the Maximum Lease Commitment. The applicable Lessee shall -3- 5 make available to the Lessor (a) in the case of any lease of Vehicles in the Existing Fleet, a schedule as set forth in Attachment A-1 hereto containing information concerning the Existing Fleet of such Lessee of a scope agreed upon by the Lessor and such Lessee, and (b) if requested by the Lessor, each Vehicle Order, together with a schedule containing the information with respect to the Vehicles included within such Vehicle Order as is set forth in Attachment A-2 hereto, or in such form as is otherwise requested by the Lessor (each, a "Vehicle Acquisition Schedule"). In addition, each Lessee shall provide such other information regarding such Vehicles as the Lessor may reasonably require from time to time. The Lessor shall lease to the Lessees, and the Lessees shall lease from the Lessor, only Vehicles that are Eligible Vehicles. This Agreement, together with the Vehicle Disposition Programs and other incentive programs relating to the Vehicles and any other related documents attached to this Agreement or submitted with a Vehicle Order (collectively, the "Supplemental Documents"), will constitute the entire agreement regarding the leasing of Vehicles by the Lessor to the Lessees. Section 2.2. Right of Lessees to Act as Lessor's Agent. The Lessor agrees that each Lessee may act as the Lessor's agent in placing Vehicle Orders on behalf of the Lessor, as well as filing claims on behalf of the Lessor for damage in transit, and other delivery related claims with respect to the Vehicles leased hereunder; provided, however, that the Lessor may hold the applicable Lessee liable for losses due to such Lessee's actions in performing as the Lessor's agent hereunder. In addition, the Lessor agrees that each Lessee may make arrangements for delivery of Vehicles to a location selected by such Lessee at such Lessee's expense. Each Lessee or any Sublessee, as applicable, may accept or reject Eligible Vehicles upon delivery in accordance with such Lessee's customary business practices, and any Eligible Vehicle, if rejected, will be deemed a Casualty hereunder. The applicable Lessee, acting as agent for the Lessor, shall be responsible for pursuing any rights of the Lessor with respect to the return of any Eligible Vehicle to the Manufacturer thereof, or the applicable auction or dealer, as applicable, pursuant to the preceding sentence. Each Lessee agrees that all vehicles ordered as provided herein shall be Eligible Vehicles and shall be ordered utilizing the procedures consistent with the applicable Vehicle Disposition Program or any guidelines of the Manufacturer, auction or dealer, as applicable, for the ordering or purchasing of Non-Program Vehicles, in each case as and to the extent applicable. Section 2.3. Payment of Purchase Price by Lessor. Upon receipt of the Manufacturer's invoice and certificate of origin in respect of any new Vehicle, or such other customary documentation in respect of any used Vehicle, the Lessor or its agent shall pay or cause to be paid to the auction, the dealer or the related Manufacturer, as applicable, the costs and expenses incurred in connection with the acquisition of such Vehicle under the applicable Vehicle Disposition Program (in the case of a Program Vehicle) or otherwise (in the case of a Non-Program Vehicle) as established by the invoice of the auction, the dealer or the Manufacturer, as the case may be (the "Initial Acquisition Cost"), for such Vehicle and the applicable Lessee shall pay all applicable costs and expenses of freight, packing, handling, storage, shipment and delivery of such Vehicle to the extent that the same have not been included within the Initial Acquisition Cost; provided that solely in the case of the Existing -4- 6 Fleet of a Lessee, the Lessor shall pay to such party as is specified in the related Payoff Letter an amount equal to the aggregate Net Book Value as of the Vehicle Funding Date with respect to the Existing Fleet of such Lessee. Section 2.4. Non-liability of Lessor. The Lessor shall not be liable to a Lessee for any failure or delay in obtaining Vehicles or making delivery thereof. AS BETWEEN THE LESSOR AND THE LESSEES, ACCEPTANCE FOR LEASE OF THE VEHICLES SHALL CONSTITUTE THE APPLICABLE LESSEE'S ACKNOWLEDGMENT AND AGREEMENT THAT THE APPLICABLE LESSEE HAS FULLY INSPECTED SUCH VEHICLES, THAT THE VEHICLES ARE IN GOOD ORDER AND CONDITION AND ARE OF THE MANUFACTURE, DESIGN, SPECIFICATIONS AND CAPACITY SELECTED BY SUCH LESSEE, THAT SUCH LESSEE IS SATISFIED THAT THE SAME ARE SUITABLE FOR ITS USE AND THAT THE LESSOR IS NOT A MANUFACTURER, AN AGENT OF THE MANUFACTURER OR OTHERWISE ENGAGED IN THE SALE OR DISTRIBUTION OF VEHICLES, AND HAS NOT MADE AND DOES NOT HEREBY MAKE ANY REPRESENTATION, WARRANTY OR COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO MERCHANTABILITY, CONDITION, QUALITY, CAPABILITY, WORKMANSHIP, DURABILITY OR SUITABILITY OF SUCH VEHICLES IN ANY RESPECT OR IN CONNECTION WITH OR FOR THE PURPOSES OR USES OF SUCH LESSEE, OR ANY WARRANTY THAT THE LEASED VEHICLES WILL SATISFY THE REQUIREMENTS OF ANY LAW OR ANY CONTRACT SPECIFICATION, OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT THERETO, AND AS BETWEEN THE LESSOR AND SUCH LESSEE, SUCH LESSEE AGREES TO BEAR ALL SUCH RISKS AT ITS SOLE COST AND EXPENSE. EACH LESSEE SPECIFICALLY WAIVES ALL RIGHTS TO MAKE CLAIMS AGAINST THE LESSOR AND ANY LEASED VEHICLE FOR BREACH OF ANY WARRANTY OF ANY KIND WHATSOEVER AND, AS TO THE LESSOR, EACH LESSEE LEASES THE LEASED VEHICLES "AS IS." The Lessor shall not be liable for any failure or delay in delivering any Vehicle ordered for lease pursuant to this Agreement, or for any failure to perform any provision hereof, resulting from fire or other casualty, natural disaster, riot, strike or other labor difficulty, governmental regulation or restriction, or any cause beyond the Lessor's direct control. IN NO EVENT SHALL THE LESSOR BE LIABLE FOR ANY INCONVENIENCES, LOSS OF PROFITS OR ANY OTHER CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES, WHATSOEVER OR HOWSOEVER CAUSED, WHETHER RESULTING FROM ANY DEFECT IN OR ANY THEFT, DAMAGE, LOSS OR FAILURE OF ANY VEHICLE, OR OTHERWISE, AND THERE SHALL BE NO ABATEMENT OF RENT BECAUSE OF THE SAME. SECTION 3. TERM. Section 3.1. Vehicle Lease Commencement Date. The "Vehicle Lease Commencement Date" shall mean, for each Vehicle, the earlier of (a) the date referenced in the Vehicle Acquisition Schedule with respect to such Vehicle, and (b) the date that funds are -5- 7 expended by the Lessor to acquire or finance the acquisition of such Vehicle (such date that funds are expended by the Lessor with respect to a Vehicle, the "Vehicle Funding Date" for such Vehicle). A vehicle shall be deemed hereunder to be a Vehicle leased under this Lease on each day during the period (the "Vehicle Term") from and including the Vehicle Lease Commencement Date to but excluding the Vehicle Lease Expiration Date. Section 3.2. Lease Commencement Date. The "Lease Commencement Date" shall mean the Closing Date for the first Series of Shared Series Notes issued under the Indenture. The "Lease Expiration Date" shall mean the later of (i) the date of the payment in full of all Series of Shared Series Notes included in Group I and all outstanding Carrying Charges related thereto, and (ii) the Vehicle Lease Expiration Date for the last Vehicle subject to lease by a Lessee hereunder. The "Term" of this Agreement shall mean the period commencing on the Lease Commencement Date and ending on the Lease Expiration Date. SECTION 4. CONDITIONS PRECEDENT. The agreement of the Lessor to make available any Acquired Vehicle for lease to the applicable Lessee, and to make available Texas Vehicles or financing for the acquisition of any other Financed Vehicle for lease to such Lessee upon such Lessee's placement of a Vehicle Order, for itself or as agent of the Lessor, is subject to the terms and conditions of the Indenture and subject to the satisfaction of the following conditions precedent as of the Vehicle Lease Commencement Date for such Vehicle: Section 4.1. No Default. No Lease Event of Default or Amortization Event shall have occurred and be continuing on such date. Section 4.2. Limitations of the Acquisition of Certain Vehicles. After giving effect to the inclusion of such Vehicle under the Lease, there shall not be a failure or violation of any conditions, requirements, or restrictions with respect to the leasing of Eligible Vehicles under this Lease as is specified in any related Series Supplement. SECTION 5. RENT AND CHARGES. Each Lessee will pay Rent and certain other charges on a monthly basis as set forth in this Section 5: Section 5.1. Payment of Rent. On each Due Date, each Lessee shall pay to the Lessor the aggregate of all Rent that has accrued during the Related Month with respect to the Vehicles leased by such Lessee, as provided in the related Lease Annexes. Section 5.2. Payment of Availability Payment. On each Due Date, each Lessee shall pay to the Lessor such Lessee's Pro Rata Share of an amount (the "Availability Payment") in respect of the unutilized portion of the Maximum Lease Commitment. "Availability Payment" with respect to each Due Date shall equal the excess, if any, of (I) the sum of (a) the aggregate interest due on all Outstanding Shared Series Notes included in Group I as of the Payment Date next succeeding such Due Date, plus (b) an amount equal to all Carrying Charges for the Related Month allocable to the Shared Series Notes included in Group I, over -6- 8 (II) the sum of (a) any Monthly Variable Rent due on such Due Date, (b) any Monthly Finance Rent due on such Due Date, and (c) any earnings on Permitted Investments allocated to the Shared Series of Notes (less any portion thereof allocated to the Retained Interestholder) accruing through the Determination Date occurring prior to such Due Date and not included in the calculation of Availability Payments with respect to any prior Due Date. Section 5.3. Payment of Monthly Supplemental Payments. On each Due Date, each Lessee shall pay to the Lessor the Monthly Supplemental Payments that have accrued during the Related Month with respect to the Financed Vehicles leased hereunder by such Lessee, as provided in Sections 6 and 7 of Annex B. Section 5.4. Payment of Termination Payments, Casualty Payments, and Late Return Payments. On each Due Date, each Lessee shall pay to the Lessor all Termination Payments, Casualty Payments and Late Return Payments that have accrued with respect to the Acquired Vehicles leased hereunder by such Lessee, as provided in Sections 7, 12.3 and 13, respectively. Section 5.5. Late Payment. In the event a Lessee fails to remit payment of any amount due under this Lease on or before the Due Date, the amount not paid will be considered delinquent and such Lessee will pay a late charge equal to the product of (a) the VFR plus 1%, times (b) the delinquent amount for the period from the Due Date to the date on which such delinquent amount is received by the Trustee, times (c) the actual number of days elapsed during such period divided by 360. SECTION 6. INSURANCE. Section 6.1. Fleet Insurance. Each Lessee shall at all times maintain or cause to be maintained, with financially sound and reputable insurers, (a) personal injury and damage insurance with respect to the Vehicles leased by such Lessee hereunder, and (b) insurance with respect to properties and business against loss or damage of the kinds customarily insured against by corporations 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. Each Lessee may, in lieu of maintaining such insurance with insurers, self-insure. Section 6.2. Information. Each Lessee shall, from time to time upon the Lessor's or the Trustee's reasonable request, deliver to the Lessor and the Trustee copies of certificates describing all insurance required by Section 6.1 which is then in effect. SECTION 7. CASUALTY OBLIGATION. If a Vehicle becomes a Casualty, then the applicable Lessee shall (a) promptly notify the Lessor of such occurrence, and (b) in the case of an Acquired Vehicle, on the Due Date next succeeding the last day of the Related Month in which the Lessee obtains actual knowledge that such Vehicle has become a Casualty, pay to the Lessor an amount (a "Casualty Payment") equal to the Net Book Value of such -7- 9 Vehicle, calculated as of the earlier of the last day of such Related Month and the date such vehicle is disposed of or becomes a Casualty, as applicable. Upon payment by the applicable Lessee to the Lessor in accordance herewith of the Casualty Payment for any Acquired Vehicle that has become a Casualty, (i) the Lessor shall cause title to such Vehicle to be transferred to such Lessee to facilitate liquidation of such Vehicle by the Lessee, (ii) the Lessee shall be entitled to any physical damage insurance proceeds applicable to such Acquired Vehicle (if at such time the Lessee carries such insurance coverage), and (iii) the Lien of the Master Collateral Agent on such Vehicle shall be released thereby. SECTION 8. VEHICLE USE. So long as no Lease Event of Default has occurred, the Lessees may use Vehicles leased hereunder in the regular course of their respective businesses, including subleasing such Vehicles to Eligible Franchisees pursuant to Lessee Agreements, including Subleases, used in the ordinary course of Lessee's business. Notwithstanding any such Lessee Agreement, the applicable Lessee shall remain fully liable for its obligations under this Agreement and the other Related Documents (including any obligation hereunder or thereunder that it may cause any Franchisee to perform or fulfill). Each Lessee shall cause all payments under the Lessee Agreements, to the extent such payments relate to vehicles comprising the Master Collateral, to be deposited directly into the Master Collateral Account, and upon the occurrence and during the continuance of a Lease Event of Default, Liquidation Event of Default or Limited Liquidation Event of Default, the Master Servicer shall promptly specify to the Master Collateral Agent the allocation of such payments among Financing Sources. Vehicle use shall be confined primarily to the United States, with limited use outside the United States; provided, however, that the principal place of business or rental office of the Eligible Franchisee with respect to any Vehicles used outside the United States shall be located in the United States. Each Lessee shall promptly and duly execute, deliver, file and record all such documents, statements, filings and registrations, and take such further actions as the Lessor, the Master Collateral Agent, the Master Servicer or the Trustee shall from time to time reasonably request in order to establish, perfect and maintain the Lessor's title to and interest in the Acquired Vehicles and the related Certificates of Title as against such Lessee or any third party in any applicable jurisdiction and to establish, perfect and maintain the Master Collateral Agent's Lien on the Vehicles and the related Certificates of Title (other than recordation of liens with respect to the Existing Fleet) as a perfected lien in any applicable jurisdiction. Each Lessee may, at such Lessee's sole expense, change the place of principal location of any Vehicles. After any such change of location, the applicable Lessee shall take all actions necessary (i) to maintain the Lien of the Master Collateral Agent on such Vehicles and the Certificates of Title with respect to such Vehicles (other than recordation of liens with respect to the Existing Fleet), and (ii) to meet or obtain all material legal requirements applicable to such Vehicles. Following a Lease Event of Default or Manufacturer Event of Default, and upon the Lessor's request, each Lessee shall advise the Lessor in writing where all Vehicles leased by such Lessee hereunder as of such date are principally located. The Lessees shall not knowingly use any Vehicles, or knowingly permit the same to be used, for any unlawful purpose. The Lessees shall and shall require the related Franchisees to use reasonable precautions to prevent loss or damage to Vehicles. The Lessees shall or shall cause the related Franchisees to comply with all -8- 10 applicable statutes, decrees, ordinances and regulations regarding acquiring, titling, registering, leasing, insuring and disposing of Vehicles and shall or shall require such related Franchisees to take reasonable steps to ensure that operators are licensed. The Lessees shall or shall cause the related Franchisees to perform, at its or their own expense, such vehicle preparation and conditioning services with respect to Vehicles as are customary. The Lessor, the Master Collateral Agent or the Trustee or any authorized representative of the Lessor, the Master Collateral Agent or the Trustee may during reasonable business hours from time to time, without disruption of the applicable Lessee's or the related Franchisee's business, subject to applicable law, inspect Vehicles and registration certificates, Certificates of Title and related documents covering Vehicles wherever the same be located. SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES. Each Lessee, at its expense, shall be responsible for proper registration and licensing of the Vehicles leased by it hereunder, and the titling of such Vehicles in the name of the Lessor (in the case of Acquired Vehicles and Texas Vehicles) or such Lessee (in the case of Vehicles in the Existing Fleet), in each case (other than with respect to the Existing Fleet) with the Lien of the Master Collateral Agent noted thereon, and where required, each Lessee shall or shall cause the related Franchisees to have Vehicles inspected by any appropriate governmental authority; provided, however, that notwithstanding the foregoing, unless a Liquidation Event of Default shall have occurred and be continuing, possession of all Certificates of Title shall remain with the Servicer of the related Vehicles or the Master Servicer. Each Lessee shall pay or cause to be paid all registration fees, title fees, license fees, traffic summonses, penalties, judgments and fines incurred with respect to any Vehicle leased hereunder by such Lessee during the Vehicle Term for such Vehicle or imposed during the Vehicle Term for such Vehicle by any governmental authority or any court of law or equity with respect to Vehicles in connection with the Lessee's operation of Vehicles, and any such amounts paid by the Lessor, in its discretion, on such Lessee's behalf will be reimbursed within thirty (30) days of the Lessor notifying the Lessee of such payment. The Lessor agrees to execute a power of attorney substantially in the form of Attachment B hereto (a "Power of Attorney"), and such other documents as may be necessary in order to allow each Lessee to title, register and dispose of the Acquired Vehicles and Texas Vehicles leased by such Lessee hereunder; and each Lessee acknowledges and agrees that with respect to the Acquired Vehicles, it has no right, title or interest in or with respect to any Certificate of Title. Notwithstanding anything herein to the contrary, the Lessor may terminate such Power of Attorney as provided in Section 17.3. SECTION 10. MAINTENANCE AND REPAIRS. Each Lessee shall or shall cause the related Franchisees to pay for all maintenance and repairs to keep the Vehicles leased by such Lessee hereunder in good working order and condition, and shall or shall cause the related Franchisees to maintain such Vehicles as required in order to keep the Manufacturer's warranty in force. Each Lessee shall or shall cause the related Franchisees to return each Vehicle to an authorized Manufacturer facility or the applicable Manufacturer's authorized warranty station for warranty work. Each Lessee shall or shall cause the related Franchisees to comply with any Manufacturer's recall of any Vehicle. Each Lessee shall or shall cause -9- 11 the related Franchisees to pay, or cause to be paid, all usual and routine expenses incurred in the use and operation of Vehicles including, but not limited to, fuel, lubricants, and coolants. The Lessor, upon thirty (30) days' prior written notice to the applicable Lessee, may pay any such expenses that have not otherwise been paid by, or on behalf of, the Lessee (including any failure by a related Franchisee to pay any such expenses), and any expenses incurred by the Lessor on such Lessee's behalf for maintenance, repair, operation or use by the Lessee of Vehicles will promptly be reimbursed (in any event no later than the next monthly Due Date following such payment) by the Lessee to the Lessor in the amount paid by the Lessor. The Lessees shall not make any material alterations to any Vehicles without the prior consent of the Lessor. Any improvements or additions to an Acquired Vehicle shall become and remain the property of the Lessor, except that any addition or improvement to such a Vehicle made by a Lessee shall remain the property of the Lessee if it can be disconnected or removed from the Vehicle without impairing the functioning of or resale value thereof, other than any function or value provided by such addition or improvement. SECTION 11. VEHICLE WARRANTIES. If a Vehicle is covered by a Manufacturer's warranty, the applicable Lessee and each related Franchisee, during the Vehicle Term, shall have the right to make any claims under such warranty which the Lessor could make. As provided in Section 2.4, the Lessor makes no warranty or representation whatsoever, express or implied, with respect to any Vehicle. SECTION 12. PROGRAM VEHICLE USAGE REQUIREMENTS AND DISPOSITION. Section 12.1. Usage. As used herein, the term "vehicle turn-in condition" with respect to each Program Vehicle leased hereunder by a Lessee means a set of criteria for evaluating Program Vehicles upon their delivery at the end of the applicable Vehicle Terms, which criteria will be determined in accordance with the related Vehicle Disposition Program. Each Program Vehicle leased hereunder by a Lessee not meeting the applicable Vehicle Disposition Program's vehicle turn-in condition requirements will, unless redesignated as a Non-Program Vehicle in accordance with Section 14, be purchased by such Lessee in accordance with the Casualty procedure set forth in Section 7 or otherwise disposed of in accordance with the late delivery procedure set forth in Section 13, as applicable. Section 12.2. Disposition Procedure. Prior to the end of the Vehicle Term, each Lessee will or will cause the related Franchisee to deliver each Program Vehicle leased hereunder by such Lessee (other than a Casualty) to the nearest related Manufacturer official auction or other facility designated by such Manufacturer at such Lessee's sole expense and in accordance with the terms of the applicable Vehicle Disposition Program. Any transportation allowance (for delivery costs) and any rebates or credits applicable to the unexpired term of any license plates for a Vehicle shall inure to the benefit of and, upon receipt thereof by the Lessor, the Trustee or the Master Collateral Agent, shall promptly be paid over to the applicable Lessee. Each Lessee will comply with the requirements of law and the requirements of the Vehicle Disposition Programs in connection with, among other things, the -10- 12 delivery of Certificates of Title, documents of transfer signed as necessary, signed Condition Reports, and signed odometer statements for the Program Vehicles. Section 12.3. Termination Payments. On the Due Date next succeeding the earlier of (a) the last day of the Related Month in which the Repurchase Payment or the Guaranteed Payment, as the case may be, from a Manufacturer pursuant to its Vehicle Disposition Program with respect to any Acquired Vehicle that is a Program Vehicle, is received by the Lessor, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account), and (b) the thirtieth (30th) day after the expiration of the Maximum Term for such Vehicle, the applicable Lessee shall pay to the Lessor in respect of such Vehicle any Excess Damage Charges, Excess Mileage Charges, early turnback surcharges and any other similar charges and penalties (collectively, a "Program Vehicle Termination Payment") as determined by the Manufacturer or its agent in accordance with the applicable Vehicle Disposition Program; and on the Due Date next succeeding the earlier of (i) the last day of the Related Month in which Disposition Proceeds from the sale or other disposition of an Acquired Vehicle that is a Non-Program Vehicle, but is not a Casualty, are received by the Lessor, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account), and (ii) the thirtieth (30th) day after the date which is twenty-four (24) months after the date of the original new dealer invoice for such Vehicle, the applicable Lessee shall pay to the Lessor in respect of such Vehicle an amount (a "Non-Program Vehicle Termination Payment") equal to the quotient of (x) the sum of all Program Vehicle Termination Payments for the Related Month in respect of Vehicles leased by such Lessee, divided by (y) the number of Acquired Vehicles leased by such Lessee in respect of which such Program Vehicle Termination Payments are payable (Program Vehicle Termination Payments and Non-Program Vehicle Termination Payments being, collectively, "Termination Payments"). The provisions of this Section 12.3 will survive the expiration or earlier termination of the Term. SECTION 13. LATE RETURN PAYMENTS. If an Acquired Vehicle which is a Program Vehicle is not returned to the Manufacturer or accepted by the Manufacturer in accordance with the related Vehicle Disposition Program prior to the expiration of the Maximum Term for such Vehicle in accordance with Section 12.2, the Lessee of such Vehicle hereunder shall, unless such Vehicle has been redesignated as a Non-Program Vehicle in accordance with Section 14, (a) promptly notify the Lessor of its failure to return such Vehicle to the Manufacturer or to sell such Vehicle in accordance with the applicable Auction Procedures during the Vehicle Term, (b) use commercially reasonable efforts to sell or otherwise dispose of such Vehicle in a manner reasonably likely to maximize proceeds from such disposition and consistent with industry practice, (c) cause the Disposition Proceeds, if any, from any such sale or disposition to be paid to the Master Collateral Agent, in accordance with paragraph 10(d) of Annex A, as applicable, and (d) on the Due Date next succeeding the earlier of (i) the last day of the Related Month in which such Disposition Proceeds are received by the Lessor, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account), and (ii) the thirtieth (30th) day after the expiration of the Maximum Term for such Vehicle, pay to the Lessor an -11- 13 amount (a "Late Return Payment") equal to the excess of (x) the Net Book Value of such Vehicle, calculated as of the first day of the calendar month in which such Maximum Term expired reduced by the Depreciation Charges accrued with respect to such Vehicle through the date such Maximum Term expired, over (y) the dollar amount of such Disposition Proceeds (which Late Return Payment amount may be equal to, but not less than, zero dollars). The foregoing shall not affect the applicable Lessee's obligation to pay on the related Due Date all Monthly Base Rent accrued with respect to a Vehicle through the date the Maximum Term for such vehicle expires. SECTION 14. REDESIGNATION OF VEHICLES. (a) Upon a Program Vehicle's becoming ineligible for repurchase by its Manufacturer or for sale in accordance with applicable Auction Procedures, due to physical damage, repair charges or accrued mileage, in each case in excess of that permitted under the related Vehicle Disposition Program, or due to any failure or inability to return the Vehicle to the Manufacturer or the designated auction site prior to the expiration of the Maximum Term, or due to any other event or circumstance, the applicable Servicer may designate the related Vehicle as a Non-Program Vehicle if such Vehicle, as a Non-Program Vehicle, will be an Eligible Vehicle and if either (a) such designation meets the conditions of Section 4.2 or (b) the Noteholders holding the requisite Invested Amount of each applicable Series of Notes waive, in each case as and to the extent permitted under the related Series Supplement, the requirements of Section 4.2 as applied to this Section 14 and all such other conditions, requirements or restrictions with respect to which a failure or violation has occurred; provided, in each case, that (x) any additional Monthly Base Rent due with respect to each such Vehicle, relating to the decrease, if any, of the Net Book Value of such Vehicle under the newly applicable Depreciation Schedule, shall be paid on the next succeeding Due Date, and (y) the minimum level of Enhancement required under the applicable Series Supplement, after giving effect to such designation, shall be satisfied on the date of designation. (b) The applicable Servicer may designate a Non-Program Vehicle as a Program Vehicle; provided, however, that (i) upon such redesignation and through and including the applicable Vehicle Lease Expiration Date, such Vehicle shall be an Eligible Vehicle, (ii) such Vehicle qualifies as an Eligible Vehicle under the applicable Eligible Vehicle Disposition Program and (iii) that the Capitalized Cost, Net Book Value and Depreciation Charges with respect to such Vehicle shall be recalculated as of the date of such redesignation as if such Vehicle was a Program Vehicle at the time of the initial related Vehicle Lease Commencement Date. Upon any redesignation of a Vehicle pursuant to this Section 14(b), (x) the Lessor shall advance to the applicable Manufacturer the difference (if any) between the original Capitalized Cost of such Vehicle and the Capitalized Cost of such Vehicle upon redesignation, which amount shall be deemed to be part of the Initial Acquisition Cost of such Vehicle and (y) the applicable Lessee shall be entitled to a credit against the Monthly Base Rent due on the next succeeding Due Date in an amount equal to the excess (if any) of the Net Book Value of such Vehicle upon such redesignation over the original Net Book Value of such Vehicle as of such date. -12- 14 SECTION 15. GENERAL INDEMNITY. Section 15.1. Indemnity of the Lessor. Each Lessee agrees to indemnify and hold harmless the Lessor and the Lessor's directors, officers, agents and employees (collectively, together with the Persons subject to indemnity under Section 15.2, the "Indemnified Persons") against any and all claims, demands and liabilities of whatsoever nature, and all costs and expenses, relating to or in any way arising out of: Section 15.1.1. the ordering, delivery, acquisition, title on acquisition, rejection, installation, possession, titling, retitling, registration, re-registration, custody by such Lessee of title and registration documents, use, non-use, misuse, operation, deficiency, defect, transportation, repair, control or disposition of any Vehicle leased hereunder or to be leased hereunder by such Lessee, including, without limitation, any such Vehicle subleased to a Franchisee of such Lessee and any of the foregoing actions, events or circumstances occurring or arising in connection with such subleasing, any related Lessee Agreement, any related Franchisee or any customer of any such related Franchisee. The foregoing shall include, without limitation, any 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); Section 15.1.2. all (i) federal, state, county, municipal, foreign or other fees and taxes of whatsoever nature, including but not limited to license, qualification, registration, franchise, sales, use, gross receipts, ad valorem, business, property (real or personal), excise, motor vehicle, and occupation fees and taxes, and all federal, state, local and foreign income taxes (including any taxes payable by the Lessor as a result of its being a member of any group of corporations including such Lessee that file any tax returns on a consolidated or combined basis), and penalties and interest thereon, whether assessed, levied against or payable by the Lessor or otherwise, with respect to any Vehicle leased by such Lessee hereunder or the acquisition, purchase, sale, lease, sublease, rental, use, operation, control, ownership or disposition of any such Vehicle by any Person or measured in any way by the value thereof or by the business of, investment by, or ownership by the Lessor or such Lessee with respect thereto, and (ii) documentary, stamp, filing, recording, mortgage or other taxes, if any, which may be payable by the Lessor or such Lessee in connection with this Agreement or the other Related Documents or the related Lessee Agreements and any penalties or interest with respect thereto; Section 15.1.3. any violation by such Lessee of this Agreement or of any Related Documents or Lessee Agreements to which such Lessee is a party or by which it is bound or any laws, rules, regulations, orders, writs, injunctions, decrees, consents, approvals, exemptions, authorizations, licenses and withholdings of objecting of any governmental or public body or authority and all other requirements having the force -13- 15 of law applicable at any time to any Vehicle or any action or transaction by such Lessee with respect thereto or pursuant to this Agreement; Section 15.1.4. all out of pocket costs of the Lessor (including, to the extent not satisfied by the Initial Purchasers, the reasonable fees and out-of-pocket expenses of counsel for the Lessor) in connection with the execution, delivery and performance of this Agreement and the other Related Documents, including, without limitation, overhead expenses and any and all fees of the Trustee, Paying Agent, Clearing Agencies and Master Collateral Agent, all fees payable in connection with any Enhancement, any and all fees of the Servicer under the Indenture, fees payable to the Rating Agencies and any underwriting or placement agency fees incurred in connection with the sale of the Notes; and Section 15.1.5. all out of pocket costs and expenses (including reasonable attorneys' fees and legal expenses) incurred by the Lessor, the Master Collateral Agent, the 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. Notwithstanding the foregoing, no Lessee shall have any duty to indemnify any Indemnified Person for any consequential or punitive damages or claims, demands, liabilities, costs, or expenses to the extent such claim, demand, liability, cost or expense arises out of or is due to such Indemnified Person's gross negligence or willful misconduct [and a Lessee's indemnification obligation under Sections 15.1.4 and 15.1.5 shall be limited to such Lessee's Pro Rata Share of the aggregate amount required to be paid by the Lessees thereunder]. Section 15.2. Indemnification of the Trustee. Each Lessee agrees to indemnify and hold harmless the Trustee and the Trustee's officers, directors, agents and employees against any and all claims, demands and liabilities of whatsoever nature, and all costs and expenses, relating to or in any way arising out of: (i) any acts or omissions of such Lessee pursuant to this Agreement and (ii) the Trustee's appointment under the Indenture and the Trustee's performance of its obligations thereunder, or any document pertaining to any of the foregoing to which the Trustee is a signatory, including, but not limited to any judgment, award, settlement, reasonable attorneys' fees and other costs or expenses incurred in connection with the defense of any actual or threatened action, proceeding or claim; provided, however, the Lessees shall have no duty to indemnify the Trustee, or any other Indemnified Person pursuant to this Section 15.2, to the extent such claim, demand, liability, cost or expense arises out of or is due to the Trustee's or such Indemnified Person's gross negligence or willful misconduct [and a Lessee's indemnification obligation under clause (ii) above shall be limited to such Lessee's Pro Rata Share of the aggregate amount required to be paid by the Lessee's thereunder]. Any such indemnification shall not be payable from the assets of RCFC. The provisions of this indemnity shall run directly to and be enforceable by the Trustee or any other Indemnified Person subject to the limitations hereof. The -14- 16 indemnification provided for in this Section 15.2 shall be in addition to any other indemnities available to the Trustee and shall survive the termination of the duties of the Lessees hereunder and the termination of this Agreement or a document to which the Trustee is a signatory or the resignation or removal of the Trustee. Section 15.3. Reimbursement Obligation by the Lessees. The applicable Lessee shall forthwith upon demand reimburse the Lessor or the Trustee, as the case may be, for any sum or sums expended with respect to any of the foregoing, or shall pay such amounts directly upon request from the Lessor or the Trustee; provided, however, that, if so requested by such Lessee, the Lessor or the Trustee shall submit to such Lessee a statement documenting any such demand for reimbursement or prepayment. To the extent that such Lessee in fact indemnifies the Lessor or the Trustee under the indemnity provisions of this Agreement, such Lessee shall be subrogated to the rights of the Lessor or the Trustee, as the case may be, in the affected transaction and shall have a right to determine the settlement of claims therein. The foregoing indemnity as contained in this Section 15 shall survive the expiration or earlier termination of this Agreement or any lease of any Vehicle hereunder; provided, however, that the factual or legal circumstances giving rise to the Lessor's exposure to liability occur during the period that the Lease is in effect as to the Vehicle for which such exposure to liability arose. Section 15.4. Notice to Lessee of Claims. The Lessor or the Trustee, as the case may be, shall notify the applicable Lessee in writing (a "Notice of Claim") of the pendency of any such claim, action or facts referred to in this Section 15 for which indemnity may be required. Section 15.5. Defense of Claims. Defense of any claim referred to in this Section 15 for which indemnity may be required shall, at the option and request of the applicable Lessee, be conducted by such Lessee. Following receipt of any Notice of Claim, such applicable Lessee will inform the Indemnified Person of its election to defend such claim. Such Indemnified Person may participate in any such defense at its own expense, provided such participation does not interfere with such Lessee's defense. Each Lessee agrees that no Indemnified Person will be liable to such Lessee for any claim caused directly or indirectly by the inadequacy of any Vehicle for any purpose or any deficiency or defect therein or the use or maintenance thereof or any repairs, servicing or adjustments thereto or any delay in providing or failure to provide such or any interruption or loss of service or use thereof or any loss of business, all of which shall be the risk and responsibility of such Lessee, except to the extent that any of the foregoing is caused by the gross negligence or willful misconduct of such Indemnified Person. The rights and indemnities of each Indemnified Person hereunder are expressly made for the benefit of, and will be enforceable by, each Indemnified Person notwithstanding the fact that such Indemnified Person is not or is no longer a party to (or entitled to receive the benefits of) this Agreement. This general indemnity shall not affect any claims of the type discussed above which a Lessee may have against the Manufacturer. SECTION 16. ASSIGNMENT. No Lessee shall, except as provided in the Indenture, without prior written consent of the Lessor and the Trustee, assign this Agreement or any of -15- 17 its rights hereunder to any other party; provided, however, a Lessee may sublease or rent Vehicles leased by it under the terms of such Lessee's normal Sublease agreements to Eligible Franchisees, and such Lessee and such Eligible Franchisees may rent such Vehicles to consumers in the ordinary course of their daily rental business. Any purported assignment in violation of this Section 16 shall be void and of no force or effect. Nothing contained herein shall be deemed to restrict the right of a Lessee to acquire or dispose of, by purchase, lease, financing, or otherwise, motor vehicles that are not subject to the provisions of this Agreement. SECTION 17. DEFAULT AND REMEDIES THEREFOR. Section 17.1. Events of Default. Any one or more of the following will constitute an event of default (a "Lease Event of Default") as that term is used herein: Section 17.1.1. there occurs (i) a default in the payment of any Monthly Base Rent, Monthly Variable Rent, Monthly Finance Rent, Termination Payment, Casualty Payment, Late Return Payment, Monthly Supplemental Payment or Availability Payment, and the continuance thereof for five (5) Business Days after notice thereof by the Lessor, the Master Collateral Agent or the Trustee to the applicable Lessee, or (ii) a default in the payment of any amount payable under this Agreement (other than amounts described in clause (i) above) and the continuance thereof for five (5) Business Days after notice thereof by the Lessor, the Master Collateral Agent or the Trustee to the applicable Lessee and the Guarantor; Section 17.1.2. any unauthorized assignment or transfer of this Agreement by a Lessee or the Guarantor occurs; Section 17.1.3. the failure of a Lessee or the Guarantor to observe or perform any other covenant, condition, agreement or provision hereof, which failure has a Material Adverse Effect on the Lessor, and such default continues for more than sixty (60) days after the earlier to occur of (a) the date a Responsible Officer of such Lessee obtains knowledge of such default or (b) the date written notice thereof is delivered by the Lessor, the Master Collateral Agent or the Trustee to such Lessee; provided, however, that if such failure cannot reasonably be cured within such sixty (60) day period, no Lease Event of Default shall result therefrom so long as, within such sixty (60) day period, such Lessee (i) commences to cure same, (ii) delivers written notice to the Lessor, the Master Collateral Agent and the Trustee notifying the Lessor, the Master Collateral Agent and the Trustee of such default and setting forth the steps such Lessee intends to take in order to cure such default and (iii) thereafter diligently prosecutes such cure to completion and completely cures such default on or before the ninetieth (90th) day after the earlier of the dates set forth in clause (a) and clause (b) above; -16- 18 Section 17.1.4. if any representation or warranty made by a Lessee or the Guarantor proves untrue in any respect as of the date of the issuance or making thereof, which inaccuracy or falsehood has a Material Adverse Effect on the Lessor, and such inaccuracy or falsehood is not cured within sixty (60) days after notice thereof from the Lessor, the Master Collateral Agent or the Trustee to such Lessee; or Section 17.1.5. an Event of Bankruptcy occurs with respect to a Lessee or the Guarantor. Section 17.2. Effect of Lease Event of Default. If (i) a Lease Event of Default described in Section 17.1.1(i), 17.1.2 or 17.1.5 shall occur, then the Monthly Base Rent, the Monthly Supplemental Payment and Casualty Payments (in each case calculated as if all Vehicles had become a Casualty for the Related Month), the Monthly Variable Rent, the Availability Payment and the Monthly Finance Rent (in each case calculated as if the full amount of interest, principal and other charges under all outstanding Series of Notes included in Group I were then due and payable in full), Monthly Base Rent, Termination Payments and Late Return Payments shall, automatically, without further action by the Lessor or the Trustee, become immediately due and payable or (ii) any other Lease Event of Default shall occur, the Lessor or the Trustee may declare the Rent and all other charges and payments (calculated as described in clause (i) above) to be due and payable, whereupon such Rent and such other charges and payments (as so calculated) shall, subject to Section 17.4, become immediately due and payable. Section 17.3. Rights of Lessor Upon Lease Event of Default. If a Lease Event of Default shall occur, then the Lessor at its option may: (i) Proceed by appropriate court action or actions, either at law or in equity, to enforce performance by the Lessees of the applicable covenants and terms of this Agreement or to recover damages for the breach hereof calculated in accordance with Section 17.4; or (ii) Subject to the rights of the Franchisees under the Subleases, by notice in writing to each Lessee, terminate this Agreement in its entirety and/or the right of possession hereunder of the Lessees as to the Vehicles, and the Lessor may direct delivery by the Lessees of documents of title to the Vehicles, whereupon all rights and interests of the Lessees to the Vehicles (except as otherwise provided herein) will cease and terminate (but the Lessees will remain liable hereunder as herein provided, calculated in accordance with Section 17.4); and thereupon, the Lessor or its agents may, subject in each case to the rights of the Franchisees under the applicable Subleases, peaceably enter upon the premises of the Lessees or other premises where the Vehicles may be located and take possession of them and thenceforth hold, possess and enjoy the same free from any right of the Lessees, or their successors or assigns (other than the Franchisees), to employ the Vehicles for any purpose whatsoever consistent with the mitigation of losses and damages, and the Lessor will, nevertheless, -17- 19 have a right to recover from the Lessees any and all amounts which under the terms of Section 17.2 (as limited by Section 17.4) of this Agreement may be then due. The Lessor will provide the applicable Lessee with written notice of the place and time of any sale of Financed Vehicles pursuant to this Section 17.3 at least five (5) days prior to the proposed sale, which shall be deemed commercially reasonable, and such Lessee may purchase the Vehicle(s) at the sale. Each and every power and remedy hereby specifically given to the Lessor will be in addition to every other power and remedy hereby specifically given or now or hereafter existing at law, in equity or in bankruptcy and each and every power and remedy may be exercised from time to time and simultaneously and as often and in such order as may be deemed expedient by the Lessor; provided, however, that the measure of damages recoverable against a Lessee will in any case be calculated in accordance with Section 17.4. All such powers and remedies will be cumulative, and the exercise of one will not be deemed a waiver of the right to exercise any other or others. No delay or omission of the Lessor in the exercise of any such power or remedy and no renewal or extension of any payments due hereunder will impair any such power or remedy or will be construed to be a waiver of any default or any acquiescence therein. Any extension of time for payment hereunder or other indulgence duly granted to a Lessee will not otherwise alter or affect the Lessor's rights or the obligations hereunder of such Lessee. The Lessor's acceptance of any payment after it will have become due hereunder will not be deemed to alter or affect the Lessor's rights hereunder with respect to any subsequent payments or defaults therein; or (iii) By notice in writing to a Lessee, terminate the Power of Attorney of such Lessee. Section 17.4. Measure of Damages. If a Lease Event of Default occurs and the Lessor, the Master Collateral Agent or the Trustee exercises the remedies granted to the Lessor, the Master Collateral Agent or the Trustee under this Section 17 or under Section 8.2 of the Base Indenture, the amount that the Lessor shall be permitted to recover [from the defaulting Lessee] shall be equal to: (i) all Rent and payments [due from the defaulting Lessee] under this Agreement (calculated as provided in Section 17.2); plus (ii) any damages and expenses (other than punitive and consequential damages), which the Lessor, the Master Collateral Agent or the Trustee will have sustained by reason of the Lease Event of Default, together with reasonable sums for such attorneys' fees and such expenses as will be expended or incurred in the seizure, storage, rental or sale of the Vehicles or in the enforcement of any right or privilege hereunder or in any consultation or action in such connection; plus (iii) all other amounts due and payable [by the defaulting Lessee] under this Agreement; plus -18- 20 (iv) interest from time to time on amounts due and unpaid under this Agreement at the VFR plus 1%, computed from the date of the Lease Event of Default or the date payments were originally due the Lessor under this Agreement or from the date of each expenditure by the Lessor which is recoverable from a Lessee pursuant to this Section 17, as applicable, to and including the date payments are made by the Lessee; minus (v) an amount equal to all sums realized by the Lessor, the Master Collateral Agent and the Trustee from the liquidation of the Financed Vehicles [(other than a Texas Vehicle)] leased hereunder (either by receipt of payment from the Manufacturers under Vehicle Disposition Programs, from sales of Vehicles to third parties, or otherwise), provided, however, that if a Financed Vehicle [(other than a Texas Vehicle)] is delivered to the Manufacturer or the designated auction site for repurchase by the Manufacturer under the applicable Vehicle Disposition Program for sale in accordance with the applicable Auction Procedures, respectively, and such Vehicle is accepted for repurchase or sale by such Manufacturer (as evidenced by a Condition Report indicating that such Vehicle conforms to the requirements for repurchase or sale under such Vehicle Disposition Program), the Lessor and the Trustee shall be deemed to have received thirty (30) days after the date of such acceptance or sale on account of this clause (v) an amount equal to the Net Book Value of such Vehicle, calculated as of its Disposition Date (less any Termination Payments payable in respect of such Vehicle). Section 17.5. Application of Proceeds. The proceeds of any sale or other disposition of any Financed Vehicles pursuant to Section 17.3 shall be applied in the following order: (i) to the reasonable costs and expenses incurred by the Lessor in connection with such sale or disposition, including any reasonable costs associated with repairing such Vehicles, and reasonable attorneys' fees in connection with the enforcement of this Agreement, (ii) to the payment of outstanding Rent owing from the applicable Lessee and payments under the Lease owing from the applicable Lessee (such proceeds to be applied first, to outstanding Monthly Variable Rent and Monthly Finance Rent pro rata, second, to outstanding Availability Payments, third, to outstanding Base Rent and Monthly Supplemental Payments pro rata, fourth, to outstanding Termination Payments, Casualty Payments and Late Return Payments pro rata and fifth, to outstanding late charges pursuant to Sections 5.5 and 17.4(iv)), (iii) to the payment of all other amounts due hereunder from such Lessee, (iv) to the payment of any amounts to the Lessor, or such Person(s) as may be lawfully entitled thereto, and (v) any remaining proceeds to such Lessee. SECTION 18. MANUFACTURER EVENTS OF DEFAULT. Upon the occurrence of any of the following events (each, a "Manufacturer Event of Default") with respect to a Manufacturer, the Lessees on behalf of the Lessor (a) shall no longer place Vehicle Orders for additional Program Vehicles from such Manufacturer (each, a "Defaulting Manufacturer") and (b) shall cancel any Vehicle Order with such Defaulting Manufacturer to which a vehicle -19- 21 identification number (a "VIN") has not been assigned as of the date such Manufacturer Event of Default occurs: Section 18.1. The failure of such Manufacturer to pay Guaranteed Payments, Repurchase Payments and/or Incentive Payments due under, respectively, such Manufacturer's Vehicle Disposition Programs and its incentive programs, in an aggregate amount in excess of [$ ] (net of amounts that are the subject of a good faith dispute, as evidenced in writing by either the applicable Lessee or the Manufacturer questioning the accuracy of the amounts paid or payable in respect of any such Vehicle Disposition Programs or incentive programs), which failure, in the case of each such Guaranteed Payment, Repurchase Payment and/or Incentive Payment included in such amount in excess of [$ ] continues for more than ninety (90) days following the Disposition Date for the related Vehicle. Section 18.2. The occurrence of an Event of Bankruptcy with respect to such Manufacturer. SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE. Pursuant to Section 7701 of the Code and as set forth in Attachment C hereto, each Lessee will warrant and certify that (1) such Lessee intends to use the Acquired Vehicles in a trade or business of such Lessee, and (2) such Lessee has been advised that it will not be treated as the owner of the Acquired Vehicles for federal income tax purposes. SECTION 20. SURVIVAL. In the event that, during the term of this Agreement, a Lessee becomes liable for the payment or reimbursement of any obligations, claims or taxes pursuant to any provision hereof, such liability will continue, notwithstanding the expiration or termination of this Agreement, until all such amounts are paid or reimbursed by such Lessee. SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL AGENT AND TRUSTEE. Notwithstanding anything to the contrary contained in this Agreement, each Lessee and the Guarantor acknowledges that each of the Lessees and the Lessor, pursuant to the Master Collateral Agency Agreement, has granted a security interest to the Master Collateral Agent, for the benefit of the Trustee, in all of its right, title and interest in, to and under the Vehicles, the related Vehicle Disposition Programs, the Master Collateral Account and all other Master Collateral specified in the Master Collateral Agency Agreement as being pledged by Thrifty, Dollar and RCFC, and each Lessee and the Guarantor further acknowledges that the Lessor, pursuant to the Indenture, has granted a security interest to the Trustee in all of its right, title and interest in, to and under the RCFC Agreements, the Collection Account and the other Collateral described in the Indenture. Accordingly, each Lessee and the Guarantor agrees that: -20- 22 (i) Subject to the terms of the Indenture, the Trustee shall have all the rights, powers, privileges and remedies of the Lessor hereunder. Specifically, each Lessee and the Guarantor agrees that, upon the occurrence of an Amortization Event, the Trustee or, with respect to any Master Collateral, the Master Collateral Agent (for and on behalf of the Trustee) may exercise any right or remedy against each Lessee or the Guarantor provided for herein or in the Indenture or the Master Collateral Agency Agreement and none of the Lessees or the Guarantor will interpose as a defense that such claim should have been asserted by the Lessor; (ii) Upon the delivery by the Master Collateral Agent or the Trustee of any notice to a Lessee or the Guarantor stating that a Lease Event of Default or an Amortization Event with respect to such Lessee has occurred, then such Lessee or the Guarantor will, if so requested by the Master Collateral Agent (with respect to the Master Collateral) or the Trustee (with respect to the Collateral), treat the Master Collateral Agent or the Trustee or the Master Collateral Agent's or the Trustee's designee, as the case may be, for all purposes as the Lessor hereunder and in all respects comply with all obligations under this Agreement that are asserted by the Master Collateral Agent or the Trustee as the successor to the Lessor hereunder, irrespective of whether such Lessee or the Guarantor has received any such notice from the Lessor; (iii) Pursuant to the Indenture, the Lessor hereby irrevocably authorizes and directs each Lessee to, and each Lessee shall, make payments of Rent hereunder directly to the Trustee for deposit in the Group I Collection Account established by the Trustee for receipt of such payments pursuant to the Indenture, and such payments shall discharge the obligation of such Lessee to the Lessor hereunder with respect to Rent to the extent of such payments. Each Lessee further acknowledges that pursuant to the Master Collateral Agency Agreement, the Lessor has irrevocably authorized and directed such Lessee to, and such Lessee shall, cause all payments under the related Lessee Agreements, each Vehicle Disposition Programs, and all other Master Collateral pledged by such Lessee to the Master Collateral Agent for the benefit of the Trustee (as Beneficiary on behalf of the holders of each Series of Notes included in Group I), to be made directly to the Master Collateral Agent for deposit in the Master Collateral Account established by the Lessor for receipt of such payments pursuant to the Master Collateral Agency Agreement, and each such payment (other than any payment that is subject to distribution to such Lessee or its designee pursuant to Section 2.5(b) of the Master Collateral Agency Agreement and that is not transferred to the Collection Account) shall constitute a prepayment in respect of the obligation of such Lessee to pay the Rent due hereunder on the next succeeding Due Date. Upon written notice to a Lessee of a sale or assignment by the Trustee or Master Collateral Agent of its right, title and interest in moneys due under this Agreement or the Master Collateral Agency Agreement to a successor Trustee or Master Collateral Agent, such Lessee shall thereafter make payments of Rent hereunder or payments in respect of the Master Collateral, as applicable, to the party specified in such notice; -21- 23 (iv) Upon request made by the Master Collateral Agent at any time, each Lessee will take such actions (other than recordation of liens with respect to the Existing Fleet) as are requested by the Master Collateral Agent to assist the Master Collateral Agent in maintaining the Master Collateral Agent's perfected security interest in the Vehicles leased by such Lessee under this Agreement, the Certificates of Title with respect thereto and the related Master Collateral pursuant to the Master Collateral Agency Agreement; and (v) A security interest in the Lessor's rights under this Agreement has been granted by the Lessor to the Trustee pursuant to the Indenture as collateral security only for all Series of Notes included in Group I and, accordingly, all references herein to "all" Series of Notes shall refer only to all Series of Notes included in Group I. SECTION 22. MODIFICATION AND SEVERABILITY. The terms of this Agreement will not be waived, altered, modified, amended, supplemented or terminated in any manner whatsoever except by a written instrument signed by the Lessor, each Lessee and (except as to matters referred to in Section 27.3) the Guarantor, and consented to in writing by the Master Collateral Agent and the Trustee, the Required Group I Noteholders and each Enhancement Provider with respect to each Series of Notes included in Group I. 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. Notwithstanding the foregoing provisions of this Section 22, the Lessor, the Lessees and the Guarantor may, at any time and from time to time, without the consent of the Trustee or any Noteholders, enter into any amendment, supplement or other modification to this Lease to cure any apparent ambiguity or to correct or supplement any provision in this Lease that may be inconsistent with any other provision herein; provided, however, that (i) any such action shall not have a materially adverse effect on the interests of any Enhancement Provider for a Series of Notes included in Group I, based upon, at the request of the Trustee, an Opinion of Counsel and an officers' certificate of the Lessor and each Lessee addressed to the Trustee and (ii) a copy of such amendment, supplement or other modification is furnished to the Trustee, each Enhancement Provider with respect to any Series of Notes included in Group I and each Rating Agency in accordance with the notice provisions hereof not later than ten days prior to the execution thereof by the Lessor, the Lessees and the Guarantor. SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES. Each Lessee and Servicer represents and warrants to the Lessor, as to itself and the Vehicles leased by it hereunder, and the Guarantor represents and warrants to the Lessor, as to itself and as to each Lessee and Servicer, that as of the Closing Date with respect to the first Series of Shared Series Notes: Section 23.1. Due Organization, Authorization, No Conflicts, Etc. Each of the Lessees and the Guarantor is a corporation duly organized and validly existing and in good -22- 24 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. The execution, delivery and performance by each Lessee and the Guarantor of this Agreement and the other Related Documents to be executed and delivered by it are within its corporate powers, have been duly authorized by all necessary corporate action (including shareholder approval, if required), have received all necessary governmental and other consents, approvals (in each case if any shall be required), and do not and will not contravene or conflict with, or create a default, breach, Lien or right of termination or acceleration under, any Requirement of Law or Contractual Obligation binding upon it, other than such default, breach, Lien or right of termination or acceleration which does not have a Material Adverse Effect on such Lessee or the Guarantor, as applicable. This Agreement and each other Related Document to be executed and delivered by a Lessee or the Guarantor are (or when executed and delivered will be) the legal, valid, and binding obligations of such Person, enforceable against such Person in accordance with their respective terms, subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors' rights. Section 23.2. Financial Information; Financial Condition. All balance sheets, all statements of operations, of shareholders' equity and of cash flow, and other financial data which have been or shall hereafter be furnished to the Lessor or the Trustee for the purposes of or in connection with this Agreement or the Related Documents have been and will be prepared in accordance with GAAP and do and will present fairly the financial condition of the entities involved as of the dates thereof and the results of their operations for the periods covered thereby and that there has been no material change in the financial condition or results of operation since the respective dates of such balance sheets, statements and other financial data. Such financial data include the following financial statements and reports which have been furnished to the Lessor and the Trustee on or prior to such Closing Date: (a) the audited balance sheet of the Guarantor and each Lessee as of December 31, 1996 and the related statements of operations, stockholders' equity and cash flows for the fiscal year ending on such date; and (b) the unaudited balance sheets of the Guarantor and each Lessee and statement of operations, accompanied by an Officer's Certificate verifying the accuracy and completeness thereof signed by an Authorized Officer of the Guarantor and the Lessee, for the _______ month period ending _____________, 1997. Section 23.3. Litigation. Except for (i) claims set forth in Schedule 1 and (ii) claims which are fully covered by insurance, no claims, litigation (including, without limitation, derivative actions), arbitration, governmental investigation or proceeding or inquiry is pending or, to the best of the Lessees' and the Guarantor's knowledge, threatened against a Lessee or the Guarantor which would, if adversely determined, have a Material Adverse Effect on a Lessee or the Guarantor. -23- 25 Section 23.4. Liens. As of the date hereof, there is no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Vehicles leased hereunder (other than (x) those created in connection with the indebtedness of Dollar to Chrysler Financial Corporation (with respect to which the security interest perfected thereby has been assigned to the Lessor on or prior to this date), (y) those set forth in Schedule 4, and (z) other Permitted Liens). Section 23.5. Necessary Actions. Upon a Servicer causing the Lien of the Master Collateral Agent to be noted on the Certificates of Title with respect to the related Vehicles (other than the Vehicles in the Existing Fleet) or as otherwise provided for by the Master Collateral Agency Agreement or the Indenture, all filings, registrations and recordings necessary or appropriate to create, preserve, protect and perfect the security interest granted to the Master Collateral Agent in respect of the Master Collateral (other than the Vehicles in the Existing Fleet) have been accomplished and, assuming the delivery to, and continuing possession by, the Lessor or its agents or assignees of all instruments and documents (in each case as defined in the UCC as in effect in New York) a security interest in which is perfected by possession (except with regard to property constituting fixtures, any reserved rights of the United States government as required by law, Liens upon patents, patent licenses, trademarks, service marks and trademark licenses, to the extent that such Liens cannot be perfected by the filing of financing statements under the Uniform Commercial Code as in effect in the applicable jurisdiction, Liens on uncertified securities and security entitlements, Liens on Master Collateral the perfection of which requires filings in or other actions under the laws of jurisdictions outside of the United States of America, any State, territory or dependency thereof or the District of Columbia, and Liens on general intangibles or accounts (in each case as defined in the UCC as in effect in New York) on which the United States of America or any department, agency, or instrumentality thereof is the obligor), and assuming that the applicable Lessee has rights in the Master Collateral within the meaning of the UCC as in effect in New York, the security interest granted to the Master Collateral Agent pursuant to the Master Collateral Agency Agreement in and to the Master Collateral (other than the Vehicles in the Existing Fleet) constitutes a perfected security interest therein (but as to the copyrights and copyright licenses and accounts arising therefrom, only to the extent the UCC of the relevant jurisdiction, from time to time in effect, is applicable), prior to the rights of all other Persons (except, with respect to goods (as defined in the UCC), buyers in the ordinary course of business to the extent provided in Section 9-307(1) of the UCC as from time to time in effect in the applicable jurisdiction) therein and subject to no other Liens other than Permitted Liens (and the interests of such buyers in the ordinary course of business) and is entitled to all rights, priorities and benefits afforded to perfected security interests by the UCC or other relevant law as enacted in any relevant jurisdiction. -24- 26 Section 23.6. Employee Benefit Plans. (a) During the twelve consecutive month period prior to the date hereof (or, with respect to each Series of Notes included in Group I after Series 1997-1, the Closing Date with respect to such Series of Notes): (i) no steps have been taken to terminate any Pension Plan and (ii) no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f)(1) of ERISA in connection with such Pension Plan; (b) no condition exists or event or transaction has occurred with respect to any Pension Plan which could result in the incurrence by a Lessee, the Guarantor or any member of the Controlled Group of fines, penalties or liabilities for ERISA violations, which in the case of any of the events referred to in clause (a) above or this clause (b) would have a Material Adverse Effect upon such Lessee or the Guarantor, and (c) such Lessee has no material contingent liability with respect to any post-retirement benefits under a Welfare Plan, other than liability for continuation coverage described in Subtitle B of Part 6 of Title I of ERISA and liabilities which would not have a Material Adverse Effect upon any Lessee or the Guarantor. Section 23.7. Investment Company Act. Neither the Guarantor nor any Lessee is an "investment company" or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended. Section 23.8. 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). Section 23.9. Business Locations; Trade Names; Principal Places of Business Locations. Schedule 3 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 3 also lists such Person's legal name, each name under or by which it conducts its business, each state in which it conducts business and the state in which the it has its principal place of business. Section 23.10. Taxes. Each Lessee and the Guarantor has filed all material tax returns that are required to be filed by it, and has paid or provided adequate reserves for the payment of all taxes, including, without limitation, all payroll taxes and federal and state withholding taxes, and all assessments payable by it that have become due, other than those that are not yet delinquent or are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been established, and are being maintained, in accordance with GAAP. As of such Closing Date, there is no ongoing material audit (other than routine sales tax audits and other routine audits) or, to each Lessee's and the Guarantor's knowledge, material tax liability for any period for which returns have been filed or were due, other than those contested in good faith by appropriate proceedings and with respect to which (x) adequate reserves have been established and are being maintained in accordance with GAAP and (y) the failure to pay such taxes would not, individually or in the aggregate, have -25- 27 a Material Adverse Effect on such Lessee or the Guarantor or a material adverse effect on the Noteholders. Section 23.11. Governmental Authorization. Each of the Lessees and the Guarantor has all licenses, franchises, permits and other governmental authorizations necessary for all businesses presently carried on by it (including owning and leasing the real and personal property owned and leased by it), except where failure to obtain such licenses, franchises, permits and other governmental authorizations would not have a Material Adverse Effect on such Person. Section 23.12. Compliance with Laws. Each Lessee and the Guarantor: (i) is not in violation of any Requirement of Law, which violation would have a Material Adverse Effect on such Person, and to the best knowledge of each Lessee and the Guarantor, no such violation has been alleged; (ii) has filed in a timely manner all reports, documents and other materials required to be filed by it with any Governmental 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 such Person; and (iii) has retained all records and documents required to be retained by it pursuant to any Requirement of Law, except where failure to retain such records would not have a Material Adverse Effect on such Person. Section 23.13. Eligible Vehicles; Eligible Franchisees. Each Vehicle is or will be, as the case may be, on the Vehicle Lease Commencement Date with respect to such Vehicle, an Eligible Vehicle, and each Franchisee subleasing an Eligible Vehicle from a Lessee is or will be, as the case may be, on the sublease commencement date with respect to such Eligible Vehicle, an Eligible Franchisee. Section 23.14. Supplemental Documents True and Correct. All information contained in any Vehicle Order or other Supplemental Document which has been submitted, or which may hereafter be submitted by a Lessee or the Guarantor 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 included in Group I. SECTION 24. CERTAIN AFFIRMATIVE COVENANTS. Each Lessee and, as applicable, each Servicer and the Master Servicer each covenants and agrees that, until the expiration or termination of this Agreement, and thereafter until the obligations of such Lessee, such Servicer or the Master Servicer, as applicable, 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: Section 24.1. Corporate Existence; Foreign Qualification. Do and cause to be done at all times all things necessary to (i) maintain and preserve its corporate existence (except as -26- 28 permitted under Section 25.1); (ii) be duly qualified to do business and in good standing as a foreign corporation in each jurisdiction where the nature of its business makes such qualification necessary and the failure to so qualify would have a Material Adverse Effect on it; and (iii) comply with all Contractual Obligations and Requirements of Law binding upon it, except to the extent that its failure to comply therewith would not, in the aggregate, have a Material Adverse Effect on it. Section 24.2. Books, Records and Inspections. (i) Maintain books and records that are complete and accurate in all material respects with respect to the Vehicles leased by it under this Agreement; and (ii) at any time and from time to time during regular business hours, and with reasonable prior notice from the Lessor, the Master Collateral Agent or the Trustee, permit the Lessor, the Master Collateral Agent or the Trustee (or such other person who may be designated from time to time by the Lessor, the Master Collateral Agent or the Trustee), or its agents or representatives to examine and make copies of all books, records and documents in the possession or under the control of such Person relating to the Vehicles leased under this Agreement, including without limitation, in connection with the Master Collateral Agent's or the Trustee's satisfaction of any requests of a Manufacturer performing an audit under its Vehicle Disposition Program. Section 24.3. Vehicle Disposition Programs. With respect to each Program Vehicle leased by a Lessee, comply, or cause the related Franchisee to comply, as appropriate, with all of its obligations under the applicable Vehicle Disposition Program relating to such Vehicle. Section 24.4. Reporting Requirements. Furnish, or cause to be furnished to the Lessor (or to such other Persons as are specified below): (a) Daily Reports. Daily reports of the Master Servicer as follows: On each Business Day commencing on the Lease Commencement Date, the Master Servicer shall prepare and maintain at the office of the Master Servicer, a record (each, a "Daily Report") setting forth the aggregate amount of (i) Guaranteed Payments, Repurchase Payments, Disposition Proceeds and Incentive Payments received from Manufacturers under Vehicle Disposition Programs or incentive programs, or from other Persons in connection with the sale or disposition of Vehicles leased under this Lease, (ii) insurance proceeds in respect of Vehicles leased under this Lease, (iii) payments in respect of Lessee Agreements, and (iv) any other Collections in respect of the Master Collateral allocable to the Trustee as Beneficiary (on behalf of the holders of Notes included in Group I) and in each case deposited in the Master Collateral Account and reported to the Master Servicer by the Master Collateral Agent, in accordance with Section 2.5(b) of the Master Collateral Agreement, not more than the second Business Day preceding such Daily Report, and setting forth (x) the aggregate dollar amount of the Collections identified in the foregoing clauses (i) through (iv), (y) during the continuance of a Lease Event of Default or a Liquidation Event of Default, and as needed under Section 2.5(c) or (d) of the Master Collateral Agency Agreement or, in the sole judgment of the Master Collateral Agent, as -27- 29 otherwise needed, the portion of such Collections representing proceeds of the Master Collateral pledged by the Lessor and the portion pledged by each Lessee, and (z) the aggregate dollar amount of Sublease payments, insurance payments, warranty payments (if any), and other payments which, so long as no Lease Event of Default or Liquidation Event of Default has occurred and is continuing, may be withdrawn from the Master Collateral Account and distributed to the applicable Lessee, as set forth in Section 2.5(b) of the Master Collateral Agency Agreement. Before 3:00 p.m. (New York City time) on each such Business Day, the Master Servicer shall deliver a copy of the Daily Report to the Master Collateral Agent and the Trustee. (b) Monthly Certificate. Monthly certificates of the Master Servicer as follows: On each Reporting Date, the Master Servicer shall forward to the Lessee, the Lessor, the Trustee, the Paying Agent, the Rating Agencies and any applicable Enhancement Provider, an Officers' Certificate of the Master Servicer substantially in the form of Exhibit A (each, a "Monthly Certificate") setting forth, inter alia, the following information (which, in the cases of clauses (iii), (iv) and (v) below, will be expressed as a dollar amount per $1,000 of the original principal amount of such Notes and as a percentage of the outstanding principal balance of the Notes as of such date): (i) the aggregate amount of payments received from the Manufacturers under Vehicle Disposition Programs and deposited in the Master Collateral Account and the aggregate amount of other Group I Collections processed for the Related Month with respect to such Reporting Date; (ii) the Invested Percentage on the last day of the second preceding Related Month of each Series of Notes included in Group I (or, until the end of the second Related Month for such Series of Notes, as of the Closing Date for such Series); (iii) for each Series included in Group I, the total amount to be distributed to Noteholders on the next succeeding Payment Date; (iv) for each Series included in Group I, the amount of such distribution allocable to principal on the Notes of such Series; (v) for each Series included in Group I, the amount of such distribution allocable to interest on the Notes; (vi) for each Series included in Group I, the amount of Enhancement used or drawn (or to be used or drawn) in connection with the distribution to Noteholders of such Series on the next succeeding Payment Date, together with the aggregate amount of remaining Enhancement not theretofore used or drawn; (vii) for each Series included in Group I, the Series Monthly Servicing Fee for the next succeeding Payment Date; (viii) for each Series included in Group I, the existing Carryover Controlled Amortization Amount, if any; (ix) for each Series included in Group I or Class of Notes, the applicable Pool Factors with respect to such Related Month; (x) the Group I Aggregate Asset Amount and the amount of the Group I Asset Amount Deficiency, if any, at the close of business on the last day of the Related Month; (xi) if Enhancement is provided for any Series of Notes included in Group I by means of overcollateralization, the amount of recoveries and losses for the Related Month and the amount of any excess funds available for such overcollateralization; and (xii) whether, to the knowledge of the Master Servicer, any Lien exists on any of the Collateral for any Series of Notes included in Group I (other -28- 30 than Permitted Liens). The Trustee shall be under no duty to recalculate, verify or recompute the information supplied to it under this Section 24.4(b). (c) Audit Report. As soon as available and in any event within one hundred ten (110) days after the end of each fiscal year of the Guarantor, a copy of the consolidated balance sheet of the Guarantor and its Subsidiaries as at the end of such fiscal year, together with the related statements of earnings, stockholders' equity and cash flows for such fiscal year, prepared in reasonable detail and in accordance with GAAP, and certified by Deloitte & Touche, LLP (or such other independent certified public accountants of recognized national standing as shall be selected by the Guarantor) as presenting fairly the financial condition and results of operations of the Guarantor and its Subsidiaries, with such exceptions as may be noted in such accountants' report; (d) Quarterly Statements. As soon as available, but in any event within forty-five (45) days after the end of each fiscal quarter (except the fourth fiscal quarter) of the 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 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); (e) Lease Events of Defaults. Promptly after a Lessee or the Guarantor has actual knowledge of the occurrence of any Lease Event of Default, Potential Lease Event of Default, Manufacturer Event of Default, Potential Manufacturer Event of Default, a written statement of an Authorized Officer of such Person describing such event and the action that such Lessee or the Guarantor proposes to take with respect thereto; (f) Monthly Vehicle Statements. On or before the [third] Reporting Date following the date hereof, and on each Reporting Date thereafter, a monthly vehicle statement (each, a "Monthly Vehicle Statement") in a form acceptable to the Lessor, which shall specify (i) the last eight digits of the VIN for the Vehicles leased hereunder during the Related Month by each Lessee, (ii) whether each such Vehicle is leased under Annex A or Annex B hereto; (iii) the Capitalized Cost for such Vehicles, (iv) the aggregate Net Book Value of such Vehicles as of the end of the Related Month, (v) the VINs for those Vehicles leased hereunder during the Related Month that have been delivered to Manufacturers or designated auction sites pursuant to the applicable Vehicle Disposition Program, or that have been otherwise sold, during the -29- 31 Related Month, (vi) those Vehicles leased hereunder during the Related Month that have become a Casualty during the Related Month and their respective Net Book Values (as of the earlier of the last day of such Related Month and or the date such vehicle is disposed of or becomes a Casualty, as applicable), (vii) the total amount of Monthly Base Rents, Monthly Variable Rents, Monthly Finance Rents, Monthly Supplemental Payments, Availability Payment, Termination Payments and Late Return Payments due for the Related Month on such Due Date, (viii) all prepayments of Rent received during the Related Month from Guaranteed Payments, Repurchase Payments, Disposition Proceeds and Incentive Payments received by the Lessor during the Related Month from the Manufacturers, auctions and other Persons, as the case may be, (ix) the aggregate Depreciation Charges for all Vehicles leased hereunder during the Related Month continuing in the possession of each Lessee, (x) information with respect to each Lessee necessary for the Master Servicer to compute the Group I Aggregate Asset Amount as of the end of the Related Month, (xi) information with respect to each Lessee necessary for the Master Servicer to compute the Availability Payment for each Lessee with respect to the Related Month, and (xii) any other charges owing from, and credits due to, each Lessee under this Agreement; (g) Annual Certificate. Annual Officers' Certificates of the Lessees as follows: Each Lessee will deliver to RCFC, the Trustee, any applicable Enhancement Provider under the Indenture, and the Rating Agencies rating any outstanding Series of Notes, on or before April 15 of each calendar year, beginning with April 15, 1998, an Officers' Certificate substantially in the form of Exhibit [ ] (each, an "Annual Certificate") (a) stating that a review of the activities of the Lessee during the preceding calendar year (or during the initial period from the initial Closing Date until April 15, 1998) and of its performance under this Agreement and the other Related Documents to which each Lessee is a party was made under the supervision of the officers signing such certificate, (b) stating that to the best of such officers' knowledge, based on such review, either there has occurred no event which, with the giving of notice or passage of time or both, would constitute a Lease Event of Default or Amortization Event and that such Lessee has fully performed all its obligations under this Agreement and such other Related Documents throughout such year, or, if there has occurred such event or a Lease Event of Default or Amortization Event, specifying each such event known to such officers and the nature and status thereof, and (c) stating (and containing an Opinion of Counsel to the effect) that all necessary Uniform Commercial Code continuation statements and other Uniform Commercial Code filings have been completed (including, without limitation, any "precautionary filings" made by each of the Lessees in favor of the Lessor), all necessary Assignment Agreements have been executed and delivered pursuant to Section 2.1 of the Master Collateral Agency Agreement, and all other actions, if any, required to maintain the perfected security interest of the Trustee or the Master Collateral Agent on behalf of the Trustee in the Collateral and in the Master Collateral (except for noting the Lien of the Master Collateral Agent on the Certificates of Title for the Existing Fleet), have -30- 32 been taken and that the Trustee or the Master Collateral Agent continues to have a perfected security interest in the Collateral and Master Collateral; (h) Annual Report. Annual reports of independent public accountants as follows: On or before April 15 of each calendar year, beginning with April 15, [1999], the Master Servicer shall cause a firm of nationally recognized independent public accountants (who may also render other services to the Master Servicer) to furnish a report to RCFC, the Trustee, the Rating Agencies and any Enhancement Provider to the effect that (i) they have compared the mathematical calculations of each amount set forth in the monthly certificates forwarded by the Master Servicer pursuant to this Agreement and the Master Collateral Agency Agreement during the period covered by such report (which shall be the period from January 1 to and including December 31 of the prior calendar year) with the Master 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 leased by such Lessee under this Agreement and the other Related Documents to which the Master 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 all of the terms and conditions set forth in the Indenture, any Supplement, this Agreement and the Master Collateral Agency Agreement, except for (a) such exceptions as such accountants believe to be immaterial and (b) such other exceptions as shall be set forth in such report; (i) Quarterly Non-Program Vehicle Report. Quarterly reports of independent public accountants as follows: On or before the second Determination Date immediately following each March 31, June 30, September 30, and December 31, of each year, beginning with March 31, 1998, the Master Servicer shall cause a firm of nationally recognized independent public accountants (who may also render other services to the Master Servicer and who is acceptable to the Rating Agencies) to furnish a report (the "Quarterly Non-Program Vehicle Report") to the Lessor, the Trustee, the Rating Agencies, and the Master Collateral Agent to the effect that they have performed certain agreed upon procedures with respect to the calculation of Disposition Proceeds obtained from the sale or other disposition of all Non-Program Vehicles (other than Casualties) sold or otherwise disposed of during each Related Month in such period and compared such calculations of Disposition Proceeds with the corresponding amounts set forth in the Daily Reports prepared by the Master Servicer pursuant to clause (a) above and that on the basis of such comparison such accountants are of the opinion that such amounts are in agreement, except for such exceptions as they believe to be immaterial and such other exceptions as shall be set forth in such report; and -31- 33 (j) Other. From time to time, such other information, documents, or reports regarding the Vehicles or the financial position, the results of operations or business of the Lessees as the Lessor, the Master Collateral Agent or the Trustee may from time to time reasonably request in order to protect the interests of the Lessor, the Master Collateral Agent or the Trustee under or as contemplated by this Agreement or any other Related Document. Section 24.5. Taxes and Liabilities. Pay when due all taxes, assessments and other material (determined on a consolidated basis) liabilities (including, without limitation, taxes, titling fees and registration fees payable with respect to Vehicles), except as contested in good faith and by appropriate proceedings (but only if and so long as forfeiture of any material part of the Vehicles leased under this Agreement will not result from the failure to pay any such taxes, assessments or other material liabilities during the period of any such contest) and with respect to which (a) adequate reserves have been established, and are being maintained, in accordance with GAAP, and (b) the failure to make such payments and the maintaining of such reserves would not have a Material Adverse Effect on such Person or a material adverse effect on the Noteholders. Section 24.6. Compliance with Laws. Comply with all Requirements of Law related to its businesses if the failure so to comply would have a Material Adverse Effect on such Person. Section 24.7. Maintenance of Separate Existence. Maintain certain policies and procedures relating to its existence as a separate corporation as follows: Each Lessee acknowledges its receipt of a copy of that certain opinion letter issued by Mayer, Brown & Platt, dated as of the Closing Date for the initial Series of Notes included in Group I and addressing the issue of substantive consolidation as it may relate to the Lessees and the Lessor. Each Lessee hereby agrees to maintain in place all policies and procedures, and take and continue to take all actions, described in the factual assumptions set forth in such opinion letter and relating to such Lessee; provided, however, that such Lessee may cease to maintain any policy or procedure if and to the extent that such Lessee delivers to the Lessor and the Trustee an Opinion of Counsel providing that such policy or procedure is no longer necessary, due to a change in law or otherwise, for the rendering of such earlier opinion relating to the issue of substantive consolidation. Section 24.8. Master Collateral Agent as Lienholder. Maintain certain computer records as follows: Concurrently with each leasing of a Vehicle under this Agreement, the Master Servicer and the related Servicer each shall indicate on its computer records that the Master Collateral Agent as assignee of the Lessor or the Lessees, as the case may be, is the holder of a Lien on such Vehicle for the benefit of the Trustee pursuant to the terms of the Master Collateral Agency Agreement. Section 24.9. Maintenance of Property. Keep, or cause to be kept, all property useful and necessary in its business in good working order and condition, ordinary wear and tear -32- 34 excepted; provided, that nothing in this Section 24.9 shall require it to maintain, or to make any renewals, replacements, additions, betterment or improvements of or to, any tangible property if such property, in its reasonable opinion, is obsolete or surplus or unfit for use or cannot be used advantageously in the conduct of its business. Section 24.10. Access to Certain Documentation and Information Regarding the Collateral. Provide to the Trustee and the Master Collateral Agent reasonable access to the documentation regarding the Collateral and the Master Collateral, such access being afforded without charge but only (i) upon reasonable request, (ii) during normal business hours, (iii) subject to the normal security and confidentiality procedures of the applicable Lessee, the applicable Servicer or the Master Servicer, as the case may be, and (iv) at offices in the continental United States designated by such Lessee, such Servicer or the Master Servicer, as the case may be, which, if they are not the offices where such documentation normally is kept, shall be accessible without unreasonable effort or expense. In addition, commencing on the date ten (10) days after the date that a Lessee or the Master Servicer receives from the Trustee or any Note Owner a written request therefor, which request shall (x) contain a certification of such Note Owner that such person is a Note Owner and (y) provide an address for delivery, then and thereafter, unless and until such Lessee or the Master Servicer receives from such Note Owner a request to discontinue same, the Lessee or the Master Servicer, as applicable, shall deliver the information specified below directly to such Note Owner (and, if requested, to one other person as may be specified in such Note Owner's written request) substantially concurrently with the delivery by such Lessee or the Master Servicer, as applicable, of such information to any of the Trustee, any Noteholder or RCFC, provided, however, if such Lessee or the Master Servicer, as applicable, is not otherwise obligated hereunder to deliver such information to the Trustee, any Noteholder or RCFC on a periodic basis, then, unless otherwise specified below, such Lessee or the Master Servicer, as applicable, shall deliver the following information to such Note Owner on a monthly basis on the same date as the date on which the Monthly Certificate delivered pursuant to Section 24.4(b) is delivered: (i) the Monthly Certificate delivered pursuant to Section 24.4(b); (ii) the average age of RCFC's fleet; (iii) copies of any new Vehicle Disposition Programs entered into by RCFC 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 this Lease; (vi) the Annual Certificate delivered hereunder; -33- 35 (vii) the Annual Report delivered hereunder; (viii) the Quarterly Non-Program Vehicle Report; and (ix) within ten (10) days after written request, such other information as is reasonably requested by such Note Owner in order to satisfy any regulatory requirements of such Note Owner. SECTION 24.11. Maintenance of Credit Enhancement. The Guarantor agrees to maintain with respect to each Series of Notes included in Group I (a) a letter of credit supporting the obligations of the Lessees under this Lease in a stated amount that, as of any date of determination, together with all cash and Permitted Investments on deposit in the Excess Funding Account for such Series of Notes on such date, is at least equal to the Liquidity Amount for such Series of Notes; (b) Enhancement in the form of overcollateralization in such amount that the Available Subordinated Amount for such Series of Notes is at all times at least equal to 0.50% of the then current Invested Amount of such Series of Notes; and (c) Enhancement in such form as is provided for in the applicable Supplement in a stated amount at least equal to the Required Enhancement Amount for such Series of Notes. SECTION 25. CERTAIN NEGATIVE COVENANTS. Until the expiration or termination of this Agreement and thereafter until the obligations of the Lessees are paid in full, each Lessee agrees that, unless at any time the Lessor, the Master Collateral Agent and the Trustee shall otherwise expressly consent in writing, it will not: Section 25.1. Mergers, Consolidations. Be a party to any merger or consolidation, other than a merger or consolidation of such Lessee into or with another entity if: (a) the Person formed by such consolidation or into or with which such Lessee is merged shall be a Person organized and existing under the laws of the United States of America or any State or the District of Columbia, and, if such Lessee is not the surviving entity, shall expressly assume, by an agreement supplemental hereto executed and delivered to the Trustee, the performance of every covenant and obligation of such Lessee hereunder and under all other Related Documents; (b) such Lessee has delivered to the Trustee an officer's certificate and an opinion of counsel each stating that such consolidation or merger and such supplemental agreement comply with this Section 25.1 and that all conditions precedent herein provided for relating to such transaction have been complied with; and (c) the Rating Agency Condition shall be met with respect to such assignment and succession. -34- 36 Section 25.2. Other Agreements. Enter into any agreement containing any provision which would be violated or breached by the performance of its obligations hereunder or under any instrument or document delivered or to be delivered by it hereunder or in connection herewith. Section 25.3. Liens. Create or permit to exist any Lien with respect to any Vehicle leased hereunder now or hereafter existing or acquired, except Liens in favor of the Lessor, the Master Collateral Agent or the Trustee, the lien on the Existing Fleet in favor of Chrysler Financial Corporation, and the Liens set forth in Schedule 4, and the following Liens to the extent such liens in the aggregate would not have a Material Adverse Effect on the Lessor, the Master Collateral Agent or the Trustee or the Noteholders under this Agreement or the Indenture (all the foregoing Liens collectively, the "Permitted Liens"): (i) Liens for current taxes not delinquent or for taxes being contested in good faith and by appropriate proceedings, and with respect to which adequate reserves have been established, and are being maintained, in accordance with GAAP, (ii) Liens, including judgment liens, arising in the ordinary course of business being contested in good faith and by appropriate proceedings, and with respect to which adequate reserves have been established, and are being maintained, in accordance with GAAP, (iii) Liens incurred in the ordinary course of business in connection with worker's compensation, unemployment insurance or other forms of governmental insurance or benefits, and (iv) mechanics' materialmen's, landlords', warehousemen's and carrier's Liens, and other Liens imposed by law, securing obligations arising in the ordinary course of business that are being contested in good faith and by appropriate proceedings and with respect to which adequate reserves have been established, and are being maintained, in accordance with GAAP. Section 25.4. Use of Vehicles. Knowingly use or allow the Program Vehicles to be used in any manner that would (i) make any such Program Vehicles ineligible for repurchase by their respective Manufacturers or for sale in accordance with applicable Auction Procedures, except with respect to the permitted redesignation of Program Vehicles as Non-Program Vehicles, pursuant to Section 14, or (ii) subject the Vehicles to confiscation. Section 25.5. Acquisition and Financing of Vehicles. Use funds on deposit in or required to be deposited into the Excess Funding Account (as defined in the related Supplement) for any Series of Notes included in Group I or the Retained Distribution Account to acquire or finance Vehicles under this Lease during any calendar month or series of consecutive calendar months if the Vehicle Ratio for such month or series of months exceeds the following amounts: For any month 30% For any two consecutive months 50% For any three consecutive months 70% For any four consecutive months 80% For any five consecutive months 90% -35- 37 SECTION 26. SERVICING COMPENSATION. Section 26.1. As compensation for its servicing activities hereunder and reimbursement for its expenses as set forth in Section 26.2, each Servicer shall be entitled to receive from the Lessor a monthly servicing fee (the "Monthly Servicing Fee"), payable in arrears on each Payment Date prior to the termination of this Lease, the Indenture and the Master Collateral Agency Agreement in an amount equal to the sum of the monthly servicing fees for such Servicer for all Series of Notes included in Group I. Except as otherwise specified in the related Supplement, the Monthly Servicing Fee for each Servicer for each Series of Notes included in Group I (each, a "Series Monthly Servicing Fee") on each Payment Date shall be equal to (i) the portion of the Supplemental Servicing Fee allocated to such Group I Series in respect of such Servicer pursuant to the related Supplement, plus (ii) one-twelfth of the product of (A) such Servicer's Pro Rata Share of the Servicing Fee Percentage for such Series and (B) the Invested Amount of such Series as of the preceding Payment Date (after giving effect to any payments of principal on such date). The Series Monthly Servicing Fee for each Servicer for each Series of Notes included in Group I shall be paid to such Servicer pursuant to the procedures set forth in the applicable Supplement. The supplemental servicing fee (the "Supplemental Servicing Fee") for any period shall be equal to all Carrying Charges comprising payments due from the applicable Servicer under Section 26.2 hereof. Section 26.2. The expenses of each Servicer include, and each Servicer agrees to pay, its Pro Rata Share of the amounts due to the Trustee pursuant to Section 9.5 of the Indenture, plus its Pro Rata Share of the reasonable fees and disbursements of independent accountants in connection with reports furnished pursuant to Sections 24.4(h) and (i), plus its allocable share of all other fees, expenses and indemnities incurred by such Servicer or the Lessor in connection with the Servicer's activities hereunder or under the Related Documents. The Servicers, however, shall not be liable for any liabilities, costs or expenses of the Lessor, the Trustee or the Noteholders arising under any tax law, including without limitation any Federal, state or local income or franchise taxes or any other tax imposed on or measured by income (or any interest or penalties with respect thereto or arising from a failure to comply therewith), except to the extent incurred as a result of a Servicer's violation of the provisions of this Lease or of the Related Documents; provided, however, the foregoing provisions of this sentence shall not affect the indemnification obligations of the Lessees under Section 15 of this Lease. In the event that a Servicer fails to pay any amount due to the Trustee pursuant to Section 9.5 of the Base Indenture, the Trustee will be entitled to receive such amounts due from the Monthly Servicing Fee prior to payment thereof to such Servicer. SECTION 27. GUARANTY. Section 27.1. Guaranty. In order to induce the Lessor to execute and deliver this Lease and to lease Vehicles hereunder to the Lessees, and in consideration thereof, the Guarantor hereby (i) unconditionally and irrevocably guarantees to the Lessor the obligations of the Lessees to make any payments required to be made by them under this Lease, (ii) -36- 38 agrees to cause the Lessees to duly and punctually perform and observe all of the terms, conditions, covenants, agreements and indemnities of the Lessees (whether in their respective capacities as Lessees or as Servicers) under this Lease, and (iii) agrees that, if for any reason whatsoever, any Lessee (whether in its capacity as a Lessee or as a Servicer) fails to so perform and observe such terms, conditions, covenants, agreements and indemnities, the Guarantor will duly and punctually perform and observe the same (the obligations referred to in clauses (i) through (iii) above are collectively referred to as the "Guaranteed Obligations"). The liabilities and obligations of the Guarantor under the guaranty contained in this Section 27 (this "Guaranty") will be absolute and unconditional under all circumstances. This Guaranty shall be a guaranty of payment and not of collection, and the Guarantor hereby agrees that it shall not be required that the Lessor or the Trustee assert or enforce any rights against any of the Lessees, the Servicers or any other person before or as a condition to the obligations of the Guarantor pursuant to this Guaranty. Section 27.2. Scope of Guarantor's Liability. The Guarantor's obligations hereunder are independent of the obligations of the Lessees (whether as Lessee or as Servicer), any other guarantor or any other Person, and the Lessor may enforce any of its rights hereunder independently of any other right or remedy that the Lessor may at any time hold with respect to this Lease or any security or other guaranty therefor. Without limiting the generality of the foregoing, the Lessor may bring a separate action against the Guarantor 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. 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. Section 27.3. Lessor's Right to Amend this Lease. The Guarantor authorizes the Lessor, at any time and from time to time without notice and without affecting the liability of the Guarantor 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 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. Section 27.4. Waiver of Certain Rights by Guarantor. The Guarantor hereby waives each of the following to the fullest extent allowed by law: -37- 39 (a) any defense based upon: (i) the unenforceability or invalidity of any security or other guaranty for the Guaranteed Obligations or the lack of perfection or failure of priority of any security for the Guaranteed Obligations; 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; provided that the Guarantor's liability in respect of this Guaranty shall be released to the extent the Lessor expressly releases such Lessee or other Person, in a writing conforming to the requirements of Section 22, from any Guaranteed Obligations; or (iii) any disability or any other defense of any Lessee or any other Person with respect to the Guaranteed Obligations, whether consensual or arising by operation of law or any bankruptcy, insolvency or debtor-relief proceeding, or from any other cause; (b) any right (whether now or hereafter existing) to require the Lessor, as a condition to the enforcement of this Guaranty, to: (i) accelerate the Guaranteed Obligations; (ii) give notice to the Guarantor of the terms, time and place of any public or private sale of any security for the Guaranteed Obligations; or (iii) proceed against any Lessee, any other guarantor or any other Person, or proceed against or exhaust any security for the Guaranteed Obligations; (c) presentment, demand, protest and notice of any kind, including without limitation notices of default and notice of acceptance of this Guaranty; (d) all suretyship defenses and rights of every nature otherwise available under New York law and the laws of any other jurisdiction; (e) any right that the Guarantor has or may have to set-off with respect to any right to payment from any Lessee; and (f) all other rights and defenses the assertion or exercise of which would in any way diminish the liability of the Guarantor hereunder. Section 27.5. Lessees' Obligations to Guarantor and Guarantor's Obligations to Lessees Subordinated. Until all of the Guaranteed Obligations have been paid in full, the -38- 40 Guarantor agrees that all existing and future unsecured debts, obligations and liabilities of the Lessees to the Guarantor or the Guarantor to any of the Lessees (hereinafter collectively referred to as "Subordinated Debt") shall be and hereby are expressly subordinated to the prior payment in full of the Guaranteed Obligations, on the terms set forth in clauses (a) through (e) below, and the payment thereof is expressly deferred in right of payment to the prior payment in full of the Guaranteed Obligations. For purposes of this Section 27.5, to the extent the Guaranteed Obligations consist of the obligation to pay money, the Guaranteed Obligations shall not be deemed paid in full unless and until paid in full in cash. (a) Upon any distribution of assets of the Guarantor or any Lessee upon any dissolution, winding up, liquidation or reorganization of the Guarantor or such Lessee, whether in bankruptcy, insolvency, reorganization or receivership proceedings, or upon an assignment for the benefit of creditors or any other marshaling of the assets and liabilities of the Guarantor or such Lessee, or otherwise: (i) the holders of the Guaranteed Obligations shall be entitled to receive payment in full of the Guaranteed Obligations before the Guarantor or any Lessee, as the case may be, is entitled to receive any payment on account of the Subordinated Debt; (ii) any payment by, or distribution of assets of, the Guarantor or such Lessee of any kind or character, whether in cash, property or securities, to which such Lessee or the Guarantor would be entitled except for this subordination shall be paid or delivered by the Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee, or otherwise, directly to the Trustee, for the benefit of the holders of the Guaranteed Obligations to be held as additional security for the Guaranteed Obligations in an interest bearing account until the Guaranteed Obligations have been paid in full; and (iii) if, notwithstanding the foregoing, any payment by, or distribution of assets of, the Guarantor or such Lessee of any kind or character, whether in cash, property or securities, in respect of any Subordinated Debt shall be received by such Lessee or the Guarantor before the Guaranteed Obligations are paid in full, such payment or distribution shall be held in trust in an interest bearing account of the Guarantor or such Lessee, as appropriate, and immediately paid over in kind to the holders of the Guaranteed Obligations until the Guaranteed Obligations have been paid in full. (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. -39- 41 (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) Except as provided in Section 27.9, 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 the name of such Lessee or the Guarantor, as the case may be. Section 27.6. Guarantor to Pay Lessor's Expenses. The Guarantor agrees to pay to the Lessor (or the Trustee), on demand, all costs and expenses, including reasonable attorneys' and other professional and paraprofessional fees, incurred by the Lessor (or the Trustee) in exercising any right, power or remedy conferred by this Guaranty, or in the enforcement of this Guaranty, whether or not any action is filed in connection therewith. Until paid to the Lessor, such amounts shall bear interest, commencing with the Lessor's demand therefor, for each Interest Period during the period from the date of such demand until paid, at the VFR for such Interest Period plus 1% (calculated on the basis of a 360-day year). Section 27.7. Reinstatement. This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time payment of any of the amounts payable by any Lessee under this Lease is rescinded or must otherwise be restored or returned by the Lessor, upon an event of bankruptcy, dissolution, liquidation or reorganization of any Lessee or the Guarantor or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any Lessee, the Guarantor, any other Guarantor or any other Person, or any substantial part of their respective property, or otherwise, all as though such payment had not been made. Section 27.8. Pari Passu Indebtedness. The Guarantor (i) represents and warrants that, as of the date hereof, the obligations of the Guarantor under this Guaranty will rank pari passu with any existing unsecured indebtedness of the Guarantor and (ii) covenants and agrees that from and after the date hereof the obligations of the Guarantor under this Guaranty will rank pari passu with any unsecured indebtedness of the Guarantor incurred after the date hereof. -40- 42 Section 27.9. Third-Party Beneficiaries. The Guarantor acknowledges that the Trustee (on behalf of the holders of Group I Shared Series Notes) has accepted the assignment of the Lessor's rights under this Lease as collateral for such Notes in reliance on the Guaranty and that the Trustee (for the benefit of the holders of such Shared Series Notes) shall be a third-party beneficiary hereunder. SECTION 28. ADDITIONAL LESSEES. Section 28.1. Additional Affiliate and Subsidiary 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 28.1. 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: (a) a Joinder in Lease Agreement in the form attached hereto as Attachment D (each, an "Affiliate Joinder in Lease"); (b) the certificate of incorporation 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; (c) 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; (d) 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 and the other Related Documents to be executed by it, together with samples of the true signatures of each such individual; (e) a good standing certificate for such Guarantor Subsidiary in the jurisdiction of its incorporation and the jurisdiction of its principal place of business; (f) a written search report from a Person satisfactory to the Lessor and the Trustee listing all effective financing statements that name such Guarantor Subsidiary as debtor or assignor, and that are filed in the jurisdictions in which filings were made pursuant to clause (g) below, together with copies of such financing statements, and tax and judgment lien search reports from a Person satisfactory to the Lessor and the Trustee showing no evidence of liens filed against such Guarantor Subsidiary that purport to affect any Vehicles leased hereunder or any Collateral under the Indenture; -41- 43 (g) 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; (h) an Officers' Certificate and an opinion of counsel each stating that such joinder by such Guarantor Subsidiary complies with this Section 29.1 and that all conditions precedent herein provided for relating to such transaction have been complied with; (i) 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 (j) any additional documentation that the Lessor or the Trustee may reasonably 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 (including, without limitation, the Guaranty which is a part of this Agreement) and shall be entitled to the benefits and subject to the liabilities and obligations of a Lessee hereunder. SECTION 29. BANKRUPTCY PETITION AGAINST LESSOR. Each Lessee and the Guarantor hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of all Series of Notes issued by the Lessor, it will not institute against, or join any other Person in instituting against, the Lessor any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States. In the event that a Lessee (or any sublessee thereof) or the Guarantor takes action in violation of this Section 29, the Lessor agrees, for the benefit of the Noteholders, that it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such a petition by such Lessee or the Guarantor against the Lessor or the commencement of such action and raise the defense that such Lessee or the Guarantor, as applicable, has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as its counsel advises that it may assert. The provisions of this Section 29 shall survive the termination of this Agreement. SECTION 30. SUBMISSION TO JURISDICTION. THE LESSOR, THE MASTER COLLATERAL AGENT AND THE TRUSTEE MAY ENFORCE ANY CLAIM ARISING OUT OF THIS AGREEMENT IN ANY STATE OR FEDERAL COURT HAVING SUBJECT MATTER JURISDICTION, INCLUDING, WITHOUT LIMITATION, ANY STATE OR FEDERAL COURT LOCATED IN THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY. FOR THE PURPOSE OF ANY -42- 44 ACTION OR PROCEEDING INSTITUTED WITH RESPECT TO ANY SUCH CLAIM, EACH LESSEE AND THE GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS. EACH LESSEE AND THE GUARANTOR HEREBY IRREVOCABLY DESIGNATES CT CORPORATION SYSTEM, INC., 1633 BROADWAY, NEW YORK, NEW YORK 10019, TO RECEIVE FOR AND ON BEHALF OF SUCH LESSEE AND GUARANTOR SERVICE OF PROCESS IN NEW YORK. EACH LESSEE AND THE GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF SAID COURTS BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE PREPAID, TO SUCH LESSEE OR THE GUARANTOR, AS APPLICABLE, AND AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY LAW, (I) SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT, ACTION OR PROCEEDING AND (II) SHALL BE TAKEN AND HELD TO BE VALID PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO IT. Nothing herein contained shall affect the right of the Lessor to serve process in any other manner permitted by law or preclude the Lessor, the Master Collateral Agent or the Trustee from bringing an action or proceeding in respect hereof in any other country, state or place having jurisdiction over such action. EACH LESSEE AND THE GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT LOCATED IN THE STATE OF NEW YORK IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. SECTION 31. 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 Lessees and the Guarantor and all rights of the Lessor, the Master Collateral Agent or the Trustee expressed herein shall be in addition to and not in limitation of those provided by applicable law or in any other written instrument or agreement. SECTION 32. JURY TRIAL. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS 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 -43- 45 RELATED TRANSACTION, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. SECTION 33. NOTICES. All notices, requests and other communications to any party or signatory hereunder shall be in writing (including facsimile transmission or similar writing) and shall be given to such party or signatory, addressed to it, at its address or facsimile number set forth on the signature pages below, or at such other address or facsimile number as such party may hereafter specify for such purpose by notice (in accordance with this Section 33) to the other parties and signatories hereto. In each case, a copy of all notices, requests and other communications (other than any such notices, requests and other communications in the ordinary course of business) that are sent by any party or signatory hereunder shall be sent to the Trustee. Copies of notices, requests and other communications delivered to the Trustee pursuant to the foregoing sentence shall be sent to the following address: Bankers Trust Company 4 Albany Street New York, New York 10006 Attention: Corporate Trust and Agency Group/Structured Finance Telephone: (212) 250-6533 Facsimile: (212) 250-6439 Each such notice, request or communication shall be effective when received at the address specified below. Copies of all facsimile notices must be sent by first class mail promptly after such transmission by facsimile. SECTION 34. HEADINGS. Section headings used in this Agreement are for convenience of reference only and shall not affect the construction of this Agreement. SECTION 35. 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. SECTION 36. EFFECTIVENESS. This Agreement shall become effective on the Lease Commencement Date (subject to (i) the requirement that the representations and warranties contained in Section 23 shall be true and correct in all respects (except to the extent any such representation and warranty does not incorporate a materiality limitation in its terms and the failure of such representation and warranty to be true and correct in all respects does not materially adversely affect the interest of the Lessor, the Trustee or the Secured Parties) and (ii) the prior or concurrent delivery of each of the following documents to the Lessor (in form and substance satisfactory to the Lessor): -44- 46 (a) Certificate of Incorporation. The certificate of incorporation of each Lessee and the Guarantor, duly certified by the Secretary of State of the jurisdiction of its incorporation, together with a copy of its by-laws, duly certified by the Secretary or an Assistant Secretary of such Lessee or the Guarantor, as applicable; (b) Resolutions. Copies of resolutions of the Board of Directors of each Lessee and the Guarantor authorizing or ratifying the execution, delivery and performance of those documents and matters required of it with respect to this Agreement, duly certified by the Secretary or Assistant Secretary of such Lessee or the Guarantor, as applicable; (c) Consents, etc. Certified copies of all documents evidencing any necessary corporate action, consents and governmental approvals (if any) with respect to this Agreement; (d) Incumbency and Signatures. A certificate of the Secretary or an Assistant Secretary of each Lessee and the Guarantor certifying the names of the individual or individuals authorized to sign this Agreement and the other Related Documents to be executed by it (in such capacity or otherwise), together with a sample of the true signature of each such individual (the Lessor, the Master Collateral Agent and the Trustee may conclusively rely on each such certificate until formally advised by a like certificate of any changes therein); (e) Opinions of Counsel. (i) The opinion of Debevoise & Plimpton, counsel for the Lessees, the Servicers and the Master Servicer, addressed to the Lessor, the Trustee, the Master Collateral Agent, the Enhancement Providers, the Initial Purchaser and the Rating Agencies; (ii) the opinion of Mayer, Brown & Platt, addressed to the Lessees, the Lessor, the Trustee, the Master Collateral Agent, the Enhancement Providers, the Initial Purchaser and the Rating Agencies; (iii) the opinion of each Manufacturer addressed to the Lessees, the Lessor, the Trustee, the Master Collateral Agent, the Enhancement Providers and the Rating Agencies; (iv) the opinion of counsel to each Enhancement Provider, addressed to the Lessees, the Lessor, the Trustee, the Master Collateral Agent, the Initial Purchaser and the Rating Agencies; (v) the opinion of ____________, counsel to the Trustee, addressed to the Lessees, the Lessor, the Initial Purchaser, the Master Collateral Agent and each Enhancement Provider; and (vi) the opinion of Hall, Estill, Hardwick, Gable, Golden & Nelson, Oklahoma counsel to the Lessees, addressed to the Lessor, the Trustee, the Enhancement Providers, the Initial Purchaser and the Rating Agencies, in each case, satisfactory in form and substance to the addressees thereof; (f) Good Standing Certificates. Certificates of good standing for each Lessee and the Guarantor in the jurisdiction of its organization and the jurisdiction of its principal place of business; -45- 47 (g) Search Reports. A written search report dated as of [ ] from a Person satisfactory to the Lessor and the Trustee listing all effective financing statements that name a Lessee as debtor or assignor and that are filed in the jurisdictions in which filings were made pursuant to subsection (h) below, together with copies of such financing statements, and tax and judgment lien search reports from a Person satisfactory to the Lessor and the Trustee showing no evidence of such liens filed against such Lessee; (h) Evidence. Evidence of the filing of proper financing statements on Form UCC-1, (i) naming each Lessee as debtor and the Master Collateral Agent as secured party or other, similar instruments or documents, as may be necessary or desirable under the UCC of all applicable jurisdictions to perfect the Master Collateral Agent's interest in the Master Collateral with respect to which the Trustee is designated as the Beneficiary and (ii) naming each Lessee as debtor, the Lessor as secured party and the Master Collateral Agent as assignee, as may be necessary or desirable under the UCC of all applicable jurisdictions to perfect the precautionary security interest of the Lessor hereunder and the assignment of the same to the Master Collateral Agent; (i) Master Collateral Agency Agreement. An executed copy of the Master Collateral Agency Agreement; (j) Lease. Original counterpart No. 1 of this Lease shall be delivered to the Trustee with receipt acknowledged thereby; (k) Vehicle Title Nominee Agreement. An executed copy of the Vehicle Title Nominee Agreement; (l) Assignment Agreement. An executed copy of the Assignment Agreement of each Manufacturer; (m) Certified Copy of Manufacturer Program. A copy of each Manufacturer Program relating to Vehicles which will be leased hereunder and an Officer's Certificate, dated the Closing Date, and duly executed by an Authorized Officer of the Lessee, certifying that each such copy is true, correct and complete as of the Closing Date; (n) Assignment of Chrysler Lien; Evidence of Filing of UCC Termination Statements. (i) An executed copy of an assignment agreement, pursuant to which Chrysler has assigned its interest in the Certificates of Title with respect to the Existing Fleet to the Master Collateral Agent; and -46- 48 (ii) Evidence of the filing of proper financing statements (form UCC-3) necessary to release all security interests and other rights of Chrysler Financial Corporation in the Existing Fleet previously granted by Dollar to Chrysler Financial Corporation; (o) The Indenture, dated the Closing Date for the first Series of Notes, duly executed by the Lessor and the Trustee, and all conditions to the effectiveness thereof and the issuance of the Notes thereunder shall have been satisfied or waived in all respects; (p) A letter of credit, issued by ______________, with an initial stated amount of $__________; and (q) Other. Such other documents as the Trustee or the Lessor may reasonably request. [Signatures on following pages.] -47- 49 IN WITNESS WHEREOF, the parties have executed this Agreement or caused it to be executed by their respective officers thereunto duly authorized as of the day and year first above written. LESSOR: RENTAL CAR FINANCE CORP. By:_______________________________ Name: Title: Address: 5330 East 31st Street Tulsa, Oklahoma 74135 Attention: Telephone: (918) ______________ Facsimile: (918) ______________ LESSEES AND SERVICERS: THRIFTY RENT-A-CAR SYSTEM, INC. By:_______________________________ Name: Title: Address: 5330 East 31st Street Tulsa, Oklahoma 74135 Attention: Telephone: (918) ______________ Facsimile: (918) ______________ -48- 50 DOLLAR RENT A CAR SYSTEMS, INC. By:______________________________ Name: Title: Address: 5330 East 31st Street Tulsa, Oklahoma 74135 Attention: Telephone: (918) ______________ Facsimile: (918) ______________ GUARANTOR DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. By:_______________________________ Name: Title: Address: [5330 East 31st Street Tulsa, Oklahoma 74135] Attention: Telephone: (918) __________ Facsimile: (918) __________ COUNTERPART NO. ___ OF TEN (10) SERIALLY NUMBERED MANUALLY EXECUTED COUNTERPARTS. TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART NO. 1. -49- 51 [The Trustee does hereby acknowledge, by its signature below, receipt of this Counterpart No. 1. TRUSTEE: [ ] By:_______________________________ Name: Title: Address: Acknowledged by: MASTER COLLATERAL AGENT Bankers Trust Company By:_______________________________ Name: Title: Address: 4 Albany Street, 10th Floor New York, New York 10006 Attention: Corporate Trust and Agency Group/Structured Finance Telephone: (212) 250-6553 Facsimile: (212) 250-6439 -50- 52 ANNEX A ANNEX to the MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT Dated as of December [ ], 1997 among RENTAL CAR FINANCE CORP. as Lessor, THRIFTY RENT-A-CAR-SYSTEM, INC., as Lessee and Servicer, DOLLAR RENT A CAR SYSTEMS, INC., as Lessee and Servicer, and those subsidiaries and affiliates of Dollar Thrifty Automotive Group, Inc. from time to time becoming Lessees and Servicers hereunder and DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. as Guarantor and Master Servicer 53 1. Scope of Annex. This Annex A shall apply only to the acquisition, leasing and servicing of the Acquired Vehicles by RCFC pursuant to the Base Lease, as supplemented by this Lease Annex (collectively, the "Operating Lease"). 2. General Agreement. With respect to the Acquired Vehicles, each Lessee and the Lessor each intend that the Base Lease, as supplemented by this Lease Annex, is an operating lease and that the relationship between the Lessor and the Lessees pursuant thereto and hereto shall always be only that of lessor and lessee, and each Lessee hereby declares, acknowledges and agrees that the Lessor has title to and is the owner of the Acquired Vehicles. The Lessees shall not acquire by virtue of the Lease any right, equity, title or interest in or to any Acquired Vehicles, except the right to use the same under the terms of the Operating Lease hereof. The parties agree that the Operating Lease is a "true lease" for all legal, accounting, tax and other purposes and agree to treat the Operating Lease, as it applies to the Acquired Vehicles, as an operating lease for all purposes, including tax, accounting and otherwise. The parties will file all federal, state and local tax returns and reports in a manner consistent with the preceding sentence. 3. Operating Lease Commitment. (a) Upon the execution and delivery of this Operating Lease, the Lessor shall, subject to the terms and conditions of the Agreement, purchase from time to time on or after the Lease Commencement Date and prior to the Lease Expiration Date, all Acquired Vehicles identified in Vehicle Orders placed by a Lessee for a purchase price equal to the Initial Acquisition Cost thereof, and simultaneously therewith, the Lessor shall under the Operating Lease enter into operating leases with such Lessee with respect to such Vehicles; provided, that the aggregate Net Book Value of Acquired Vehicles leased hereunder on any date shall not exceed (a) the Maximum Lease Commitment, less (b) the Base Amount as of such date with respect to the Financing Lease. 4. Lease Procedures. In connection with the Lease of any Acquired Vehicles to be leased on or after the Lease Commencement Date, to evidence the acquisition of such Acquired Vehicles by the Lessor, the applicable Lessee shall deliver to the Lessor the following: (a) a Vehicle Order (including a Vehicle Acquisition Schedule) with respect to all Acquired Vehicles to be leased by such Lessee on the Lease Commencement Date; (b) UCC termination statements terminating, or UCC partial releases releasing, any security interests and other liens (other than Permitted Liens) in favor of any Person with respect to each Acquired Vehicle leased on the Lease Commencement Date and identified in such Vehicle Order, and any related Vehicle Disposition Programs; (c) with respect to the initial lease of Acquired Vehicles by such Lessee, a fully executed Assignment Agreement covering each Program Vehicle leased under this Annex A on the Lease Commencement Date or to be leased under this Annex A -2- 54 on any date thereafter, the related Vehicle Disposition Programs, and any other Master Collateral relating to such Vehicles. Each Lessee hereby agrees that each such delivery of a Vehicle Order shall be deemed hereunder to constitute a representation and warranty by the Lessee, to and in favor of the Lessor and the Trustee, that all the conditions precedent to the acquisition and leasing of the Vehicles identified in such Vehicle Order have been satisfied as of the date of such Vehicle Order. 5. Maximum Vehicle Lease Term. The maximum Vehicle lease term of the Operating Lease as it relates to each Acquired Vehicle leased hereunder shall be from the Vehicle Lease Commencement Date to the date that is 24 months from the date of the original new vehicle dealer invoice for such Acquired Vehicle. On the occurrence of such date for a Vehicle not previously disposed of, the applicable Lessee shall, (a) on behalf of the Lessor, promptly dispose of such Vehicle in accordance with the terms hereof and in accordance with any instructions of the Lessor for such disposition, (b) in each case, provide that Disposition Proceeds be paid directly to the Master Collateral Account for the benefit of the Trustee and (c) pay to the Master Collateral Agent or the Trustee, in accordance with this Operating Lease, any other amounts unpaid and owing from such Lessee under the Lease in respect of such Vehicle. 6. Lessee's Rights to Purchase Vehicles. Each Lessee will have the option, exercisable with respect to any Acquired Vehicle during the Vehicle Term with respect to such Acquired Vehicle, to purchase any Vehicles leased by it under this Agreement at the Vehicle Purchase Price, in which event such Lessee will pay the Vehicle Purchase Price to the Master Collateral Agent on or before the Due Date next succeeding such purchase by the Lessee plus all accrued and unpaid Monthly Base Rent and Monthly Variable Rent with respect to such Vehicle through the date of such purchase. The Lessor shall cause title to any such Vehicle to be transferred to the applicable Lessee, and the Servicer shall cause the Master Collateral Agent to cause its lien to be removed from the certificate of title for such Vehicle, concurrently with or promptly after the Vehicle Purchase Price for such Vehicle (and any unpaid Monthly Base Rent and unpaid Monthly Variable Rent) is paid by such Lessee to the Master Collateral Agent. 7. Vehicle Disposition. The Lessor and each Lessee agree that, with respect to Acquired Vehicles, the applicable Lessee shall use its commercially reasonable efforts to deliver each related Program Vehicle for sale in accordance with the applicable Auction Procedures or to return such related Program Vehicle to the related Manufacturer (a) not prior to the end of the Minimum Term for such Vehicle, and (b) not later than the end of the Maximum Term for such Vehicle; provided, however, if for any reason, such Lessee fails to deliver such a Program Vehicle to the applicable Manufacturer for repurchase by the Manufacturer or in accordance with the applicable Auction Procedures, in each case in accordance with the applicable Vehicle Disposition Program during the time period between the expiration of the Minimum Term and the expiration of the Maximum Term, such Lessee -3- 55 shall be obligated to sell or otherwise dispose of such Program Vehicle and pay a Late Return Payment with respect thereto, in each case as provided in Section 13 of the Base Lease. Each Lessee shall, with respect to Acquired Vehicles leased by it under this Operating Lease, pay the equivalent of the Rent for the Minimum Term for Program Vehicles returned before the Minimum Term, regardless of actual usage, unless such a Program Vehicle is a Casualty, which will be handled in accordance with Section 7 of the Base Lease. All Disposition Proceeds, Repurchase Payments and Guaranteed Payments due from the disposition of Program Vehicles pursuant to this Section shall be due and payable to the Lessor. The Lessor and each Lessee agree, with respect to Acquired Vehicles, that such Lessee shall use its commercially reasonable efforts to dispose of each Non-Program Vehicle leased to it under this Operating Lease (a) in a manner most likely to maximize proceeds from such disposition and consistent with industry practice and (b) within twenty-four (24) months after the date of the original new vehicle dealer invoice for such Vehicle. All Disposition Proceeds due from the disposition of Non-Program Vehicles pursuant to this Section shall be due and payable to the Lessor. 8. Lessor's Right to Cause Vehicles to be Sold. Notwithstanding anything to the contrary contained in the Agreement, the Lessor shall have the right, at any time after the date thirty (30) days prior to the expiration of the Maximum Term for any Program Vehicle leased under this Annex A, to require that the Lessee in respect of such Program Vehicle deliver such Program Vehicle to the Manufacturer for repurchase or, as applicable, to the designated auction site, or exercise commercially reasonable efforts to arrange for the sale of such Program Vehicle to a third party for a price greater than the Net Book Value thereof, in which event the Lessee shall, prior to the expiration of such Maximum Term, deliver such Vehicle to its Manufacturer or the designated auction site or arrange for the sale of such Program Vehicle to a third party for a price greater than the Net Book Value (or purchase the Program Vehicle itself from the Lessor for the Vehicle Purchase Price). If a sale of the Program Vehicle is arranged by a Lessee prior to the expiration of such Maximum Term, then such Lessee shall deliver the Program Vehicle to the purchaser thereof, the Lien of the Master Collateral Agent on the Certificate of Title of such Program Vehicle shall be released, and such Lessee shall cause to be delivered to the Lessor the funds paid for such Program Vehicle by the purchaser. If a Lessee is unable to arrange for a sale of the Program Vehicle prior to the expiration of such Maximum Term, then such Lessee shall cease attempting to arrange for such a sale and shall return such Program Vehicle to the applicable Manufacturer or tender such Program Vehicle in accordance with applicable Auction Procedures or purchase such Vehicle as herein provided. In no event may any Program Vehicle be sold pursuant to this paragraph 8 (other than pursuant to a Vehicle Disposition Program) unless the funds to be paid to the Lessor arising out of such sale exceed the Net Book Value of such Vehicle less reasonably predictable Excess Mileage charges, Excess Damage Charges and other similar charges imposed by the Manufacturer. -4- 56 9. Calculation of Rent. Rent shall be due and payable on a monthly basis as set forth in this paragraph 9: "Monthly Base Rent", with respect to each Due Date and each Acquired Vehicle leased under the Lease on any day during the Related Month, shall be the sum of all Depreciation Charges that have accrued with respect to such Vehicle during the Related Month. "Monthly Variable Rent", with respect to each Due Date and each Acquired Vehicle leased under the Lease on any day during the Related Month, shall equal the sum, without double counting, of (a) the product of (i) an amount equal to the Net Book Value of such Acquired Vehicle on the first day contained within both the Related Month and the Vehicle Term with respect to such Vehicle multiplied by the VFR for the Interest Period ending on the next succeeding Payment Date and (ii) the quotient obtained by dividing (A) the number of days contained within both the Related Month and the Vehicle Term with respect to such Acquired Vehicle by (B) the total number of days in the Related Month plus (b) the product of (i) an amount equal to all Carrying Charges for the Related Month, and (ii) the quotient obtained by dividing the Net Book Value of such Acquired Vehicle as of the first day of the Related Month by the Net Book Value of all Vehicles leased under the Lease as of the first day of the Related Month. "Rent" means Monthly Base Rent plus Monthly Variable Rent. 10. Payment of Rent and Other Payments. (a) Monthly Base Rent. On each Due Date, each Lessee shall pay to the Lessor the Monthly Base Rents that have accrued during the Related Month with respect to all Vehicles that were leased by such Lessee under the Operating Lease on any day during the Related Month; (b) Monthly Variable Rent. On each Due Date, each Lessee shall pay to the Lessor the Monthly Variable Rents that have accrued during the Related Month with respect to all Vehicles that were leased by such Lessee under the Operating Lease on any day during the Related Month; (c) Termination Payments, Casualty Payments and Late Return Payments. On each Due Date, each Lessee shall pay to the Lessor all Termination Payments, Casualty Payments and Late Return Payments with respect to Vehicles leased by such Lessee under the Operating Lease as provided in Section 5.4 of the Base Lease; and (d) Certain Other Payments. Each Lessee shall cause all Disposition Proceeds, Repurchase Payments, Guaranteed Payments and Incentive Payments payable in respect of Acquired Vehicles leased by it under the Operating Lease, to be paid -5- 57 directly to the Master Collateral Agent for the benefit of the Trustee. The Servicer and the Lessees each agree that in the event that the Servicer or a Lessee shall receive directly any such payment, including cash, securities, obligations or other property, the Servicer or such Lessee, as the case may be, shall accept the same as the Master Collateral Agent's agent and shall hold the same in trust on behalf of and for the benefit of the Master Collateral Agent, and shall deposit the same, within two (2) Business Days after receipt thereof, into the Master Collateral Account in the same form received, with the endorsement of the Servicer or such Lessee, as the case may be, when necessary or appropriate. 11. Net Lease. THE OPERATING LEASE SHALL BE A NET LEASE, AND EACH LESSEE'S OBLIGATION TO PAY ALL RENT AND OTHER SUMS HEREUNDER SHALL BE ABSOLUTE AND UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY ABATEMENT OR REDUCTION FOR ANY REASON WHATSOEVER. The obligations and liabilities of the Lessees hereunder shall in no way be released, discharged or otherwise affected (except as may be expressly provided herein including, without limitation, the right of a Lessee to reject Vehicles pursuant to Section 2.2 of the Base Lease) for any reason, including without limitation: (i) any defect in the condition, merchantability, quality or fitness for use of the Vehicles or any part thereof; (ii) any damage to, removal, abandonment, salvage, loss, scrapping or destruction of or any requisition or taking of the Vehicles or any part thereof; (iii) any restriction, prevention or curtailment of or interference with any use of the Vehicles or any part thereof; (iv) any defect in or any Lien on title to the Vehicles or any part thereof; (v) any change, waiver, extension, indulgence or other action or omission in respect of any obligation or liability of a Lessee or the Lessor; (vi) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to such Lessee, the Lessor or any other Person, or any action taken with respect to this Operating Lease by any trustee or receiver of any Person mentioned above, or by any court; (vii) any claim that such Lessee has or might have against any Person, including without limitation the Lessor; (viii) any failure on the part of the Lessor to perform or comply with any of the terms hereof or of any other agreement; (ix) any invalidity or unenforceability or disaffirmance of the Operating Lease or any provision hereof or any of the other Related Documents or any provision of any thereof, in each case whether against or by such Lessee or otherwise; (x) any insurance premiums payable by such Lessee with respect to the Vehicles; or (xi) any other occurrence whatsoever, whether similar or dissimilar to the foregoing, whether or not such Lessee shall have notice or knowledge of any of the foregoing and whether or not foreseen or foreseeable. The Operating Lease shall be noncancelable by any Lessee and, except as expressly provided herein, each Lessee, to the extent permitted by law, waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender the Operating Lease, or to any diminution or reduction of Rent payable by the Lessee hereunder. All payments by a Lessee made hereunder shall be final (except to the extent of adjustments provided for herein), absent manifest error and, except as otherwise provided herein, no Lessee shall seek to recover any such payment or any part thereof for any reason whatsoever, absent manifest error. If for any reason whatsoever the Operating Lease shall be terminated in whole or in part by operation of law or otherwise except as expressly -6- 58 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 the Operating Lease as if it had not been terminated in whole or in part. All covenants and agreements of the Lessees herein shall be performed at its cost, expense and risk unless expressly otherwise stated. 12. 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 Expiration Date for each Vehicle leased hereunder, the Lessor may, in its discretion, remove any such Lien and any sum of money that may be paid by the Lessor in release or discharge thereof, including reasonable attorneys' fees and costs, will be paid by the applicable Lessee upon demand by the Lessor. The Lessor may grant security interests in the Vehicles without consent of the applicable Lessee; provided, however, that if any such Liens would interfere with the rights of such Lessee under the Operating Lease or any sublessee of the Lessee, the Lessor must obtain the prior written consent of the 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 the Operating Lease. 13. Non-Disturbance. So long as a Lessee satisfies its obligations hereunder, its quiet enjoyment, possession and use of the Vehicles will not be disturbed during the Term subject, however, to paragraph 8 of this Annex A and except that the Lessor, the Master Collateral Agent and the Trustee each retains the right, but not the duty, to inspect the Vehicles without disturbing the ordinary conduct of such Lessee's business. Upon the request of the Lessor, the Master Collateral Agent or the Trustee, from time to time, each Lessee will make reasonable efforts to confirm to the Lessor, the Master Collateral Agent and the Trustee the location, mileage and condition of each Vehicle and to make available for the Lessor's, the Master Collateral Agent's or the Trustee's inspection within a reasonable time period, not to exceed forty-five (45) days, the Vehicles leased by such Lessee at the location where the Vehicles are normally domiciled. Further, each Lessee (and each related Franchisee) will, during normal business hours and with a notice of three (3) Business Days, make its records pertaining to the Vehicles available to the Lessor, the Master Collateral Agent or the Trustee for inspection at the location where such Lessee's (and each such related Franchisee's) records are normally domiciled. 14. Certain Risks of Loss Borne by Lessees. Upon delivery of each Vehicle to a Lessee, as between the Lessor and such Lessee, such Lessee assumes and bears the risk of loss, damage, theft, taking, destruction, attachment, seizure, confiscation or requisition and all other risks and liabilities with respect to such Vehicle, including personal injury or death and property damage, arising with respect to any Vehicle due to the manufacturer, purchase, acceptance, rejection, delivery, leasing, subleasing, possession, use, inspection, registration, operation, condition, maintenance, repair or storage of such Vehicle, howsoever arising. 15. Title. This is an agreement to lease only, and title to the Acquired Vehicles will at all times remain in the Lessor's name. The Lessees will not have any rights or interest in -7- 59 such Vehicles whatsoever other than the rights of possession and use and the right to sublease such Vehicles as provided by this Agreement. In addition, each Lessee, by its execution hereof, acknowledges and agrees that (i) the Lessor is the sole owner and holder of all right, title and interest in and to the Vehicle Disposition Programs as they relate to the Vehicles leased hereunder and (ii) such Lessee has no right, title or interest in any Vehicle Disposition Program as it relates to any Vehicle leased hereunder. To confirm the foregoing, each Lessee, by its execution of the Base Lease of which this Annex A is a part, hereby assigns and transfers to the Lessor any rights that such Lessee may have in respect of any Vehicle Disposition Programs as they relate to the Vehicles leased hereunder. * * * -8- 60 ANNEX B ANNEX to the MASTER MOTOR VEHICLE LEASE AND SERVICING AGREEMENT Dated as of December [ ], 1997 between RENTAL CAR FINANCE CORP. as Lessor, THRIFTY RENT-A-CAR-SYSTEM, INC., as Lessee and Servicer, DOLLAR RENT A CAR SYSTEMS, INC., as Lessee and Servicer, and those subsidiaries and affiliates of Dollar Thrifty Automotive Group, Inc. from time to time becoming Lessees and Servicers hereunder and DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. as Guarantor and Master Servicer 61 1. Scope of Annex. This Annex B shall apply only to the acquisition or financing, leasing and servicing of the Financed Vehicles by RCFC pursuant to the Base Lease, as supplemented by this Lease Annex (collectively, the "Financing Lease"). 2. General Agreement. With respect to the Financed Vehicles, each Lessee and the Lessor each intend that the Base Lease, as supplemented by this Lease Annex, constitute a financing arrangement and the Lessor hereby declares, acknowledges and agrees that the ownership of the Financed Vehicles rests solely with such Lessee subject to the security interest granted hereunder to the Lessor. 3. Financing Lease Commitment. Subject to the terms and conditions of the Financing Lease, upon execution and delivery of the Financing Lease, the Lessor shall (i) on the Lease Commencement Date purchase from Dollar the Existing Fleet for a purchase price equal to the aggregate Net Book Value thereof, and (ii) from time to time on or after the Lease Commencement Date and prior to the Lease Expiration Date purchase all other Financed Vehicles identified in Vehicle Orders placed by the Lessee for a purchase price equal to the Initial Acquisition Cost thereof, and in each case simultaneously therewith enter into this Financing Lease with such Lessee with respect to the Existing Fleet and other Financed Vehicles, as the case may be; provided, that the aggregate outstanding Base Amount of the Financing Lease shall not on any date exceed (a) the Maximum Lease Commitment, less (b) the sum of (x) the sum of the Net Book Values of Acquired Vehicles leased under the Operating Lease on such date, each such Net Book Value calculated as of the first day contained within both the calendar month in which such date of determination occurs and the Vehicle Term for the related Acquired Vehicle, plus (y) accrued and unpaid Monthly Base Rent under the Operating Lease as of such date. 4. Lease Procedures. (a) Initial Lease. In connection with the Lease of the Existing Fleet and any other Financed Vehicles to be leased on the Lease Commencement Date, to evidence the refinancing of the Vehicles in the Existing Fleet and the acquisition and financing of such other Financed Vehicles by such Lessee on the Lease Commencement Date and the conveyance on such date of a security interest in such Financed Vehicles to the Master Collateral Agent, the Lessees shall deliver to the Lessor on or prior to the Lease Commencement Date in respect of the initial Vehicle Order of each Additional Lessee the following: (i) a schedule concerning the Existing Fleet as specified in Section 2.1 of the Base Lease, in the case of all Vehicles in the Existing Fleet, or a Vehicle Order (including a Vehicle Acquisition Schedule) with respect to all other Financed Vehicles to be leased by such Lessee on the Lease Commencement Date or date of the initial Vehicle Order of an Additional Lessee, as applicable; -2- 62 (ii) a report of the results of a search of the appropriate records of the county and state in which the Existing Fleet are located and the county and state in which such Lessee's principal office is located, which shall show no liens or other security interests (other than Permitted Liens and the lien of Chrysler Financial Corporation or such other party as has delivered a Payoff Letter in the Existing Fleet) with respect to such Vehicles or, in the event that such search reveals any such non-permitted Lien or security interest, there shall be delivered to the Trustee a termination of such Lien or security interest as provided below; (iii) confirmation from any lender holding a security interest in any Vehicle in the Existing Fleet stating unconditionally (A) that, if any sums are to be paid to such lender in connection with the lease of the Existing Fleet, such lender has been paid the full amount due to it in connection with such refinancing and (B) that any lien or security interest of such lender in such Vehicle has been released; (iv) UCC termination statements terminating, or UCC partial releases releasing, any security interests and other liens (other than Permitted Liens and the lien of Chrysler Financial Corporation in the Existing Fleet) in favor of any Person with respect to each Vehicle in the Existing Fleet identified in such schedule and any related Vehicle Disposition Programs; (v) fully executed Assignment Agreements from such Lessee covering, as applicable, each Vehicle in the Existing Fleet and each other Financed Vehicle leased by such Lessee on the Lease Commencement Date or leased on any date thereafter under the Lease, the related Vehicle Disposition Programs, and any other Master Collateral relating to such Vehicles; and (vi) an Officer's Certificate for such Lessee stating that all the conditions precedent under the Lease to the leasing by such Lessee of such Vehicles on the Lease Commencement Date have been satisfied. (b) Subsequent Leases. In connection with each Lease of a Financed Vehicle after the Lease Commencement Date, to evidence the acquisition or financing of such Financed Vehicle by the Lessor and the conveyance of a security interest in such Financed Vehicles to the Master Collateral Agent, each Lessee shall deliver to the Lessor a Vehicle Order (including a Vehicle Acquisition Schedule) with respect to all Financed Vehicles to be leased by such Lessee on the date specified therein. Each Lessee hereby agrees that each such delivery of a Vehicle Order shall be deemed hereunder to constitute a representation and warranty by such Lessee, to and in favor of the Lessor and the Trustee, that all the conditions precedent to the acquisition or financing and leasing of the Vehicles identified in such Vehicle Order have been satisfied as of the date of such Vehicle Order. -3- 63 5. Maximum Vehicle Lease Term. The maximum Vehicle lease term of the Financing Lease as it relates to each Financed Vehicle leased hereunder shall be from the Vehicle Lease Commencement Date to the date that is 60 months from the Vehicle Lease Commencement Date. On the occurrence of such date, the applicable Lessee shall pay to the Master Collateral Agent or the Trustee, in accordance with this Financing Lease, any amounts unpaid and owing under the Lease in respect of such Vehicle. 6. Calculation of Rent and Monthly Supplemental Payment. Rent and the Monthly Supplemental Payment shall be due and payable on a monthly basis as set forth in this paragraph 6: "Monthly Base Rent", with respect to each Due Date and each Financed Vehicle leased under the Lease on any day during the Related Month, shall be the sum of all Depreciation Charges that have accrued with respect to such Vehicle during the Related Month. "Monthly Finance Rent", with respect to each Due Date and each Financed Vehicle leased under the Lease on any day during the Related Month, shall equal the sum, without double counting, of (a) the product of (i) an amount equal to the Net Book Value of such Financed Vehicle on the first day contained within both the Related Month and the Vehicle Term with respect to such Vehicle multiplied by the VFR for the Interest Period ending on the next succeeding Payment date and (ii) the quotient obtained by dividing (A) the number of days contained within both the Related Month and the Vehicle Term with respect to such Financed Vehicle by (B) the total number of days in the Related Month, plus (b) the product of (i) an amount equal to all Carrying Charges for the Related Month, and (ii) the quotient obtained by dividing the Net Book Value of such Financed Vehicle as of the first day of the Related Month by the Net Book Value of all Vehicles leased under the Lease as of the first day of the Related Month. "Monthly Supplemental Payment" with respect to each Due Date and each Financed Vehicle shall be an amount equal to (a) the sum of, as applicable, (i) the aggregate amount of any Guaranteed Payment, Repurchase Payment, Disposition Proceeds and Incentive Payments received by the Lessor, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account) during the Related Month with respect to such Vehicle, (ii) the amount of any unpaid Guaranteed Payment or unpaid Repurchase Payment with respect to such Vehicle becoming a Delinquent Guaranteed Payment or Delinquent Repurchase Payment, as the case may be, during the Related Month, (iii) the amount of any Disposition Proceeds with respect to such Vehicle becoming Delinquent Disposition Proceeds during the Related Month, (iv) the amount of any unpaid Incentive Payments with respect to such Vehicle becoming Delinquent Incentive Payments during the Related Month, (v) if such Vehicle becomes a Casualty or ceases to be an Eligible Vehicle (other than as a result of the sale or other disposition -4- 64 thereof), in each case during the Related Month, the Net Book Value of such Vehicle calculated as of the earlier of the first day of such Related Month and the date such vehicle is disposed of or becomes a Casualty, as applicable, and (vi) if such Vehicle was returned to its Manufacturer for repurchase or sold to any Person or otherwise disposed of, in each case during the Related Month, the excess, if any, of (A) the Net Book Value of such Vehicle, calculated as of the applicable Vehicle Lease Expiration Date, over (B) the sum of all amounts (other than Incentive Payments) payable in respect of such Vehicle pursuant to clause (i) above, less (b) the excess, if any, of (i) the aggregate amount of Disposition Proceeds, Guaranteed Payments or Repurchase Payments, as applicable, from the sale or other disposition of such Vehicle received by the Lessor, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account) during such Related Month over (ii) the Net Book Value of such Vehicle, calculated as of the applicable Vehicle Lease Expiration Date. "Rent" means Monthly Base Rent plus Monthly Finance Rent. 7. Payment of Rent and Other Payments. (a) On each Due Date: (i) Monthly Base Rent. Each Lessee shall pay to the Lessor the Monthly Base Rents that have accrued during the Related Month with respect to all Vehicles that were leased by such Lessee under the Finance Lease on any day during the Related Month; provided, however, that in the event that delinquent payments of Guaranteed Payments, Repurchase Payments, Disposition Proceeds and/or Incentive Payments are received by the Lessor, the Master Collateral Agent or the Trustee (including by deposit into the Collection Account or the Master Collateral Account) during the Related Month, such payments may be netted against the Monthly Base Rents to be paid on such Due Date to the extent (but only to the extent) that Monthly Base Rent has already been received by any of such Persons in respect of such delinquent payment obligations pursuant to any or all of clauses (a)(ii), (iii) and (iv) of the definition of Monthly Supplemental Payment set forth in this Annex B; (ii) Monthly Finance Rent. Each Lessee shall pay to the Lessor the Monthly Finance Rents that have accrued during the Related Month with respect to all Vehicles that were leased by such Lessee under the Finance Lease on any day during the Related Month. (iii) Monthly Supplemental Payments. Each Lessee shall pay to the Lessor the Monthly Supplemental Payments that have accrued during the Related Month with respect to all Vehicles that were leased by such Lessee under the Finance Lease on any day during the Related Month; provided, however, that in the event that the Monthly Supplemental Payment accrued during a Related Month is a negative dollar amount, such amount may be netted against other payments to be paid on such Due Date pursuant to this paragraph 7. -5- 65 (b) On the expiration of the term of the Lease with respect to a Financed Vehicle, any remaining Base Amount, plus all other amounts payable by each Lessee under the Financing Lease with respect to such Vehicle shall be immediately due and payable. (c) Each Lessee may from time to time prepay the Base Amount of the Financing Lease with respect to a Financed Vehicle, in whole or in part, on any date, provided that such Lessee shall give the Lessor and the Trustee not less than one (1) Business Day's prior notice of any prepayment, specifying the date and amount of such prepayment, and the Financed Vehicles to which such prepayment relates. 8. Risk of Loss Borne by Lessees. Upon delivery of each Vehicle to a Lessee, as between the Lessor and such Lessee, such Lessee assumes and bears the risk of loss, damage, theft, taking, destruction, attachment, seizure, confiscation or requisition with respect to such Vehicle, however caused or occasioned, and all other risks and liabilities, including personal injury or death and property damage, arising with respect to 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. 9. Mandatory Repurchase of Texas Vehicles. Prior to the Vehicle Lease Expiration Date with respect to each Texas Vehicle leased by a Lessee under the Finance Lease (other than a Vehicle Lease Expiration Date arising in connection with the purchase of such Texas Vehicle pursuant to this paragraph 9) and, in the case of each such Texas Vehicle which is a Program Vehicle, prior to the expiration of the Maximum Term applicable thereto (unless such Vehicle has been redesignated as a Non-Program Vehicle in accordance with Section 14 of the Base Lease), such Lessee shall purchase such Texas Vehicle (including any such Vehicle which has become a Casualty) at a purchase price equal to the Net Book Value of such Vehicle calculated as of the date of purchase (or, in the case of a Casualty, at a purchase price equal to the Monthly Supplemental Payments accruing in respect of such Casualty during the Related Month in which such Vehicle became a Casualty), which shall be payable to the Master Collateral Agent (together with all accrued and unpaid Rent and other payments due and payable on such Due Date with respect to such Texas Vehicle through the date of such purchase) on or prior to the Due Date next succeeding such purchase by such Lessee. The Lessor shall cause title to each Texas Vehicle to be transferred to the applicable Lessee, and the Servicer shall cause the Master Collateral Agent to cause its lien to be removed from the Certificate of Title for such Vehicle, concurrently with or promptly after such purchase price for such Texas Vehicle (and any such unpaid Rent and payments) is paid by such Lessee to the Master Collateral Agent. Notwithstanding anything to the contrary in this Agreement, no Texas Vehicle may be sold or otherwise disposed of (other than pursuant to Section 17.3 of the Base Lease), including at Auction or by return to its Manufacturer pursuant to a Vehicle Disposition Program, prior to its purchase by a Lessee pursuant to and in accordance with this paragraph 9. -6- 66 Schedule 1 Litigation Claims 67 Schedule 2 Pension Plans 68 Schedule 3 Business Locations
============================================================================================================== States in which it Chief Executive Office State of Principal Conducts Business or Legal Name and Trade Name Business Location Place of Business Maintains Records - -------------------------------------------------------------------------------------------------------------- Thrifty Rent-A-Car System, Inc. Trade Name: Thrifty Rent-A-Car System, Inc. - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- Dollar Rent A Car Systems, Inc. Trade Name: Dollar Rent A Car Systems, Inc. - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------- Dollar Thrifty Automotive Group, Inc. Trade Names: Dollar Thrifty Automotive Group, Inc.; [DTAG] ==============================================================================================================
69 Schedule 4 Liens (1) - ---------- (1) Verify old Citicorp lien. 70 ATTACHMENT A-1 Information on Existing Fleet 71 ATTACHMENT A-2 Vehicle Acquisition Schedule 1 Vehicle Group Number (Vehicle Model) 2 Vehicle Identification Number (last eight digits) (VIN) 3 Vehicle Lease Commencement Date 4 Initial Acquisition Cost 5 Monthly Base Rent 6 Garaging State 72 ATTACHMENT B* FORM OF POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that Rental Car Finance Corp. does hereby make, constitute and appoint its true and lawful Attorney(s)-in-Fact for it and in its name, stead and behalf, to execute any and all documents pertaining to the titling of motor vehicles in the name of Rental Car Finance Corp., the noting of the lien of Bankers Trust Company, as Master Collateral Agent, as the first lienholder on certificates of title, the licensing and registration of motor vehicles and the transfer of title of motor vehicles. This power is limited to the foregoing and specifically does not authorize the creation of any other liens or encumbrances on any of said motor vehicles, other than Permitted Liens (as defined in Schedule 1 to the Base Indenture, dated as of December 13, 1995 (as such agreement may be amended, supplemented or modified from time to time in accordance with its terms)). The powers and authority granted hereunder shall, unless sooner terminated, revoked or extended, cease five years from the date of execution as set forth below. IN WITNESS WHEREOF, Rental Car Finance Corp. has caused this instrument to be executed on its behalf by its _____________ this ____ day of _______, 19__. RENTAL CAR FINANCE CORP. By: _______________________________ Name: Title: - ---------- * To be updated. 73 State of ___________________ ) : s.s.: 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: __________ -2- 74 ATTACHMENT C FORM OF CERTIFICATION OF TRADE OR BUSINESS USE The undersigned, ___________ of Rental Car Finance Corp., an Oklahoma corporation, hereby warrants and certifies, under penalties of perjury, that (1) each Lessee intends to use the Acquired Vehicles in a trade or business of each Lessee, and (2) each Lessee has been advised that it will not be treated as the owner of the Acquired Vehicles for federal income tax purposes. Defined terms otherwise not defined herein shall have the meanings assigned to such terms in Schedule 1 to the Base Indenture, dated as of December 13, 1995 (as such agreement may be amended, supplemented or modified from time to time in accordance with its terms). IN WITNESS WHEREOF, the undersigned has caused this certificate to be executed this ____ day of _________, 199__. RENTAL CAR FINANCE CORP. By: __________________________ Name: Title: 75 ATTACHMENT D FORM OF AFFILIATE JOINDER IN LEASE THIS AFFILIATE JOINDER IN LEASE AGREEMENT (this "Joinder") is executed as of _______________ ___, 19___, by _______________, a ____________________________ ("Joining Party"), and delivered to Rental Car Finance Corp., an Oklahoma corporation ("RCFC"), as lessor pursuant to the Master Motor Vehicle Lease and Servicing Agreement dated as of December [ ], 1997 (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof, the "Group I Lease"), among RCFC, as Lessor, Thrifty Rent-A-Car-System, Inc., as Lessee and Servicer, Dollar Rent A Car Systems, Inc., as Lessee and Servicer, and those subsidiaries and affiliates of Dollar Thrifty Automotive Group, Inc.("DTAG") from time to time becoming Lessees thereunder (individually, a "Lessee" and, collectively, the "Lessees"), and DTAG, as guarantor. Capitalized terms used herein but not defined herein shall have the meanings provided for in the Group I Lease. R E C I T A L S: WHEREAS, the Joining Party is a direct or indirect Subsidiary or other Affiliate of DTAG; and WHEREAS, the Joining Party desires to become a "Lessee" under and pursuant to the Group I Lease. NOW, THEREFORE, the Joining Party agrees as follows: A G R E E M E N T: 1. The Joining Party hereby represents and warrants to and in favor of RCFC and the Trustee that (i) the Joining Party is a direct or indirect Subsidiary of DTAG, (ii) all of the conditions required to be satisfied pursuant to Section 28 of the Group I Lease in respect of the Joining Party becoming a Lessee thereunder have been satisfied, and (iii) all of the representations and warranties contained in Section 23 of the Group I Lease with respect to the Lessees are true and correct as applied to the Joining Party as of the date hereof. 2. The Joining Party hereby agrees to assume all of the obligations of a "Lessee" under the Group I Lease and agrees to be bound by all of the terms, covenants and conditions therein. 76 3. By its execution and delivery of this Joinder, the Joining Party hereby becomes a Lessee for all purposes under the Group I Lease. By its execution and delivery of this Joinder, RCFC acknowledges that the Joining Party is a Lessee for all purposes under the Group I Lease. IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be duly executed as of the day and year first above written. [Name of Joining Party] By: ________________________________ Name: Title: Accepted and Acknowledged by: RENTAL CAR FINANCE CORP. By: __________________________________________ Name: Title: -2- 77 TABLE OF CONTENTS Page ---- SECTION 1. CERTAIN DEFINITIONS..............................................1 Section 1.1. Certain Definitions......................................1 Section 1.2. Accounting and Financial Determinations..................2 Section 1.3. Cross References; Headings...............................2 Section 1.4. Interpretation...........................................2 SECTION 2. GENERAL AGREEMENT................................................3 Section 2.1. Leasing of Vehicles......................................3 Section 2.2. Right of Lessees to Act as Lessor's Agent................4 Section 2.3. Payment of Purchase Price by Lessor......................4 Section 2.4. Non-liability of Lessor..................................5 SECTION 3. TERM.............................................................5 Section 3.1. Vehicle Lease Commencement Date..........................5 Section 3.2. Lease Commencement Date..................................6 SECTION 4. CONDITIONS PRECEDENT.............................................6 Section 4.1. No Default...............................................6 Section 4.2. Limitations of the Acquisition of Certain Vehicles.......6 SECTION 5. RENT AND CHARGES.................................................6 Section 5.1. Payment of Rent..........................................6 Section 5.2. Payment of Availability Payment..........................6 Section 5.3. Payment of Monthly Supplemental Payments.................7 Section 5.4. Payment of Termination Payments, Casualty Payments, and Late Return Payments.................................7 Section 5.5. Late Payment.............................................7 SECTION 6. INSURANCE........................................................7 Section 6.1. Fleet Insurance..........................................7 Section 6.2. Information..............................................7 SECTION 7. CASUALTY OBLIGATION..............................................7 SECTION 8. VEHICLE USE......................................................8 SECTION 9. REGISTRATION; LICENSE; TRAFFIC SUMMONSES; PENALTIES AND FINES........................................................9 SECTION 10. MAINTENANCE AND REPAIRS..........................................9 -i- 78 Page ---- SECTION 11. VEHICLE WARRANTIES..............................................10 SECTION 12. PROGRAM VEHICLE USAGE REQUIREMENTS AND DISPOSITION.....................................................10 Section 12.1. Usage..................................................10 Section 12.2. Disposition Procedure..................................10 Section 12.3. Termination Payments...................................11 SECTION 13. LATE RETURN PAYMENTS............................................11 SECTION 14. REDESIGNATION OF VEHICLES.......................................12 SECTION 15. GENERAL INDEMNITY...............................................13 Section 15.1. Indemnity of the Lessor................................13 Section 15.2. Indemnification of the Trustee.........................14 Section 15.3. Reimbursement Obligation by the Lessees................15 Section 15.4. Notice to Lessee of Claims.............................15 Section 15.5. Defense of Claims......................................15 SECTION 16. ASSIGNMENT......................................................15 SECTION 17. DEFAULT AND REMEDIES THEREFOR...................................16 Section 17.1. Events of Default......................................16 Section 17.2. Effect of Lease Event of Default.......................17 Section 17.3. Rights of Lessor Upon Lease Event of Default...........17 Section 17.4. Measure of Damages.....................................18 Section 17.5. Application of Proceeds................................19 SECTION 18. MANUFACTURER EVENTS OF DEFAULT..................................19 SECTION 19. CERTIFICATION OF TRADE OR BUSINESS USE..........................20 SECTION 20. SURVIVAL........................................................20 SECTION 21. RIGHTS OF LESSOR PLEDGED TO MASTER COLLATERAL AGENT AND TRUSTEE.....................................................20 SECTION 22. MODIFICATION AND SEVERABILITY...................................22 SECTION 23. CERTAIN REPRESENTATIONS AND WARRANTIES..........................22 Section 23.1. Due Organization, Authorization, No Conflicts, Etc.....22 -ii- 79 Page ---- Section 23.2. Financial Information; Financial Condition.............23 Section 23.3. Litigation.............................................23 Section 23.4. Liens..................................................23 Section 23.5. Necessary Actions......................................24 Section 23.6. Employee Benefit Plans.................................24 Section 23.7. Investment Company Act.................................25 Section 23.8. Regulations G, T, U and X..............................25 Section 23.9. Business Locations; Trade Names; Principal Places of Business Locations..................................25 Section 23.10. Taxes..................................................25 Section 23.11. Governmental Authorization.............................25 Section 23.12. Compliance with Laws...................................25 Section 23.13. Eligible Vehicles; Eligible Franchisees................26 Section 23.14. Supplemental Documents True and Correct................26 SECTION 24. CERTAIN AFFIRMATIVE COVENANTS...................................26 Section 24.1. Corporate Existence; Foreign Qualification.............26 Section 24.2. Books, Records and Inspections.........................26 Section 24.3. Vehicle Disposition Programs...........................27 Section 24.4. Reporting Requirements.................................27 Section 24.5. Taxes and Liabilities..................................31 Section 24.6. Compliance with Laws...................................32 Section 24.7. Maintenance of Separate Existence......................32 Section 24.8. Master Collateral Agent as Lienholder..................32 Section 24.9. Maintenance of Property................................32 Section 24.10. Access to Certain Documentation and Information Regarding the Collateral...............................32 Section 24.11. Maintenance of Credit Enhancement......................33 SECTION 25. CERTAIN NEGATIVE COVENANTS......................................34 Section 25.1. Mergers, Consolidations................................34 Section 25.2. Other Agreements.......................................34 Section 25.3. Liens..................................................34 Section 25.4. Use of Vehicles........................................35 Section 25.5. Acquisition and Financing of Vehicles..................35 SECTION 26. SERVICING COMPENSATION..........................................35 SECTION 27. GUARANTY........................................................36 Section 27.1. Guaranty...............................................36 Section 27.2. Scope of Guarantor's Liability.........................37 Section 27.3. Lessor's Right to Amend this Lease.....................37 -iii- 80 Page ---- Section 27.4. Waiver of Certain Rights by Guarantor..................37 Section 27.5. Lessees' Obligations to Guarantor and Guarantor's Obligations to Lessees Subordinated....................38 Section 27.6. Guarantor to Pay Lessor's Expenses.....................40 Section 27.7. Reinstatement..........................................40 Section 27.8. Pari Passu Indebtedness................................40 Section 27.9. Third-Party Beneficiaries..............................40 SECTION 28. ADDITIONAL LESSEES..............................................40 Section 28.1. Additional Affiliate and Subsidiary Lessees............40 SECTION 29. BANKRUPTCY PETITION AGAINST LESSOR..............................42 SECTION 30. SUBMISSION TO JURISDICTION......................................42 SECTION 31. GOVERNING LAW...................................................43 SECTION 32. JURY TRIAL......................................................43 SECTION 33. NOTICES.........................................................43 SECTION 34. HEADINGS........................................................44 SECTION 35. EXECUTION IN COUNTERPARTS.......................................44 SECTION 36. EFFECTIVENESS...................................................44 SCHEDULES AND ATTACHMENTS Annex A Operating Lease Annex B Financing Lease Schedule 1 Litigation Claims Schedule 2 Pension Plans Schedule 3 Business Locations Schedule 4 Liens ATTACHMENT A-1 Information on Existing Fleet ATTACHMENT A-2 Vehicle Acquisition Schedule ATTACHMENT B Form of Power of Attorney ATTACHMENT C Form of Certification of Trade or Business Use ATTACHMENT D Form of Affiliate Joinder in Lease -iv- EX-4.9 5 COMMITMENT LETTER 1 EXHIBIT 4.9 CREDIT SUISSE FIRST BOSTON THE CHASE MANHATTAN BANK ELEVEN MADISON AVENUE 270 PARK AVENUE NEW YORK, NEW YORK 10010 NEW YORK, NEW YORK 10017 November 19, 1997 Dollar Rent A Car Systems, Inc. Thrifty Rent-A-Car System, Inc. Dollar Thrifty Automotive Group, Inc. 5330 East 31st Street Tulsa, Oklahoma 74135 Attention: Joseph E. Cappy Chief Executive Officer Re: $230,000,000 Revolving Credit Facility $545,000,000 Commercial Paper Liquidity Facility Commitment Letter ------------------------------------------------ Ladies and Gentlemen: Dollar Thrifty Automotive Group, Inc., a Delaware corporation ("DTAG"), has advised Credit Suisse First Boston ("Credit Suisse First Boston"), The Chase Manhattan Bank ("Chase") and Chase Securities Inc. ("CSI") that it intends to issue approximately 2,500,000 shares of its common stock, par value $.01 per share (the "Common Stock"), pursuant to a registered public offering for net cash proceeds of at least $45,000,000, which proceeds will be used to provide collateral for the financing of vehicles by DTAG and its subsidiaries (the "Primary Equity Offering"), and that Chrysler Corporation ("Chrysler") intends to sell approximately 20,000,000 shares of the Common Stock of DTAG owned by it pursuant to a registered public offering which, following the consummation thereof, will result in DTAG no longer being a subsidiary of Chrysler (the "Secondary Equity Offering", and, together with the Primary Equity Offering, the "Equity Offerings"). DTAG has further advised Credit Suisse First Boston that (a) it operates its vehicle rental businesses through two direct wholly-owned subsidiaries, Dollar Rent A Car Systems, Inc., an Oklahoma corporation ("Dollar"), and Thrifty Rent-A-Car System, Inc., an Oklahoma corporation ("Thrifty"), (b) it intends to implement through a special purpose, bankruptcy remote, 2 wholly-owned subsidiary of DTAG, Thrifty Car Rental Finance Corporation (which may change its name to Rental Car Finance Corp.) ("RCFC"), a $900,000,000 medium term note program secured by vehicles and related assets to replace existing financing arrangements with Chrysler Financial Corporation (the "MTN Program"), (c) it intends to implement through a special purpose, bankruptcy remote, wholly-owned subsidiary, Dollar Thrifty Funding Corporation ("Dollar Thrifty Funding"), a $615,000,000 commercial paper program secured by vehicles and related assets, the proceeds of which will be used, in part, to refinance existing vehicle fleet indebtedness (the "CP Program"), (d) it has entered into vehicle supply arrangements pursuant to which Chrysler has agreed to supply vehicles to DTAG's subsidiaries and (e) in connection with the foregoing, it will enter into certain agreements with Chrysler and its subsidiaries relating to the separation of DTAG from Chrysler, including (i) credit support arrangements (the "Chrysler Support Arrangements") whereby Chrysler agrees to provide letter of credit support to the MTN Program and the CP Program in an aggregate initial amount (the "Initial Support Amount") equal to $60,000,000 less, in the event DTAG receives net cash proceeds in excess of $10,000,000 pursuant to the exercise by the underwriters and managers of the Equity Offerings of their options to purchase additional shares of Common Stock to cover over-allotments (the "Over-allotment Options"), the amount of net cash proceeds in excess of $10,000,000 (to the extent Chrysler and its subsidiaries have provided or arranged Purchased Franchise Vehicles Support (as defined below) and have not requested DTAG to use any such excess proceeds to finance the acquisition of Purchased Franchise Vehicles), subject thereafter to annual reductions commencing September 30, 1999 equal to the greater of 20% of the Initial Support Amount and 50% of the consolidated excess cash flow (to be defined) of DTAG and subject (without duplication) to further reductions based on the net cash proceeds (plus related depreciation) received by DTAG and its subsidiaries from the disposition of Purchased Franchise Vehicles (as defined below) that were acquired with proceeds from the exercise of the Over-allotment Options that were in excess of $10,000,000 to the extent such proceeds did not result in a reduction of the Initial Support Amount pursuant to the initial determination thereof and (ii) other matters with respect to taxes and insurance (collectively, the "Continuing Chrysler Arrangements", and, together with the Equity Offerings, the MTN Program and the CP Program, the "Transaction"). "Purchased Franchise Vehicles Support" means credit support for the financing of certain vehicles to be acquired by Dollar in connection with the planned acquisition by it of the Dollar franchisee currently operating in Orange County, California (such vehicles, the "Purchased Franchise Vehicles") on terms and conditions reasonably satisfactory to Credit Suisse First Boston and Chase; provided that such support may be conditioned on the utilization by DTAG of proceeds received by it from the exercise of the Over-allotment Options in the financing of such acquisition of Purchased Franchise Vehicles. You have further informed us that (a) DTAG, Dollar and Thrifty will require, collectively, up to $230,000,000 in a senior, secured five-year revolving bank credit facility (the "Credit Facility"), which facility would be used for (i) the issuance of letters of credit that would support the MTN Program and the CP Program as well as other obligations, including performance and insurance bonds, and (ii) the working capital needs of Dollar, Thrifty and their operating subsidiaries and (b) Dollar Thrifty Funding will require up to -2- 3 $545,000,000 in a senior, secured 364-day revolving bank liquidity facility (the "Liquidity Facility", and, together with the Credit Facility, the "Facilities"), the proceeds of which would be used to repay maturing commercial paper issued pursuant to the CP Program and repay matured loans under the Liquidity Facility. In connection with the foregoing, (a) Credit Suisse First Boston is pleased to advise you that it hereby commits to provide $138,000,000 of the Credit Facility and $327,000,000 of the Liquidity Facility and (b) Chase is pleased to advise you that it hereby commits to provide $92,000,000 of the Credit Facility and $218,000,000 of the Liquidity Facility. Although Credit Suisse First Boston and Chase are committing severally to provide on a fully underwritten basis all of the Credit Facility on the terms set forth in the Credit Facility Term Sheet (as defined below), Credit Suisse First Boston and CSI will endeavor to arrange (in such capacity (and in the similar capacity described in the succeeding sentence), the "Co-Arrangers") a syndicate of financial institutions reasonably acceptable to you (together with Credit Suisse First Boston and Chase, the "Credit Facility Lenders") that would commit to provide all or a portion of the Credit Facility. In addition, although Credit Suisse First Boston and Chase are committing severally to provide on a fully underwritten basis all of the Liquidity Facility on the terms set forth in the Liquidity Facility Term Sheet (as defined below), Credit Suisse First Boston and CSI will endeavor to arrange a syndicate of financial institutions reasonably acceptable to you (together with Credit Suisse First Boston and Chase, the "Liquidity Facility Lenders", and, together with the Credit Facility Lenders, the "Lenders") that would commit to provide all or a portion of the Liquidity Facility. Attached as Exhibit A to this letter is a Summary of Terms and Conditions (the "Credit Facility Term Sheet") setting forth a summary outline of the principal terms and conditions on and subject to which Credit Suisse First Boston and Chase are committing severally to provide the Credit Facility. Attached as Exhibit B to this letter is a Summary of Terms and Conditions (the "Liquidity Facility Term Sheet", and, together with the Credit Facility Term Sheet, the "Term Sheets") setting forth a summary outline of the principal terms and conditions on and subject to which Credit Suisse First Boston and Chase are committing severally to provide the Liquidity Facility. The material terms and conditions of the commitments of Credit Suisse First Boston and Chase hereunder and under the Facilities are set forth herein and in the Term Sheets, and any additional matters that are not covered by the provisions hereof and of the Term Sheets shall be subject to our mutual agreement. It is agreed that Credit Suisse First Boston will act as the sole administrative agent for each of the Facilities (the "Administrative Agent") and that Chase will be referred to as the syndication agent for each of the Facilities (the "Syndication Agent", and, together with the Administrative Agent, the "Agents"). No additional agents or co-agents or arrangers will be appointed by you or any of us without the prior written consent of the other signatories hereto. In addition, Credit Suisse First Boston and Chase reserve the right to employ the services of Credit Suisse First Boston Corporation ("CSFB") and CSI, respectively, in providing the services contemplated by this letter and to make the financings contemplated hereby through one or more of its affiliates, and you agree that, in connection with the -3- 4 provision of such services or financings, Credit Suisse First Boston, CSFB, Chase, CSI and such other respective affiliates may share with each other such confidential or other information relating to DTAG, Dollar, Thrifty and their respective affiliates as from time to time may be in their possession. You agree to assist the Co-Arrangers in forming each such syndicate and to provide Credit Suisse First Boston, Chase and the other Lenders, promptly upon request, with all information reasonably requested by them to complete successfully the syndication, including, but not limited to, (a) an information package for delivery to potential syndicate members and participants and (b) information and projections prepared by you or your advisers relating to the transactions described herein (exclusive of communications between you and your counsel that you are advised by such counsel are subject to the attorney client privilege to the extent the general nature of such communications are disclosed to us and do not contain information that a financial institution would consider material in deciding whether to extend commitments of the type described herein, including information that it would consider materially adverse to you or your affiliates). You also agree to use your best effort to ensure that the syndication efforts of the Co-Arrangers benefit from your existing lending relationships. You further agree to make appropriate senior officers and representatives of DTAG, Dollar and Thrifty available to participate in information meetings for potential syndicate members and participants at such times and places as the Co-Arrangers may reasonably request. You represent and warrant and covenant that: (a) all information (other than (i) financial statements and (ii) financial and business projections and forecasts) which has been or is hereafter made available to us by you or any of your representatives in connection with the transactions contemplated hereby is or, when furnished, will be complete and correct in all material respects and does not or, when furnished, will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made; (b) the financial statements that have been or will be made available to us by you or any of your representatives have been or will be prepared in accordance with generally accepted accounting principles applied on a consistent basis and will present fairly, in all material respects, the financial condition and results of operation of the entities covered thereby; and (c) all financial and business projections and forecasts that have been or are hereafter prepared by you or on your behalf and made available to us or any other participant in a Facility have been or will be prepared in good faith based upon assumptions you believe to be reasonable. -4- 5 You agree to supplement the information, financial statements, projections and forecasts referred to in clauses (a), (b) and (c) above from time to time until completion of each syndication so that the representations and warranties in the preceding sentence remain correct. In arranging and syndicating each Facility, the Co-Arrangers will use and rely on such information and projections without independent verification thereof. In connection with the syndication of the Facilities, each of Credit Suisse First Boston and Chase may, in its discretion, allocate to other Lenders portions of any fees payable to it in connection with the Facilities. You agree that no Lender will receive any compensation of any kind for its participation in a Facility, except as expressly provided for in this letter or in the Fee Letter referred to below. The commitments of Credit Suisse First Boston and Chase hereunder are subject to (a) there not occurring or becoming known to us any material adverse condition or material adverse change in or affecting the business, operations, property, condition (financial or otherwise) or prospects of DTAG, Dollar, Thrifty and their respective subsidiaries taken as a whole from that described in the financial statements and financial projections reviewed by us prior to the date hereof, (b) our counsel confirming our due diligence analysis and review of the tax, environmental and legal matters relating to DTAG, Dollar, Thrifty and their respective subsidiaries (it being agreed that the condition in this clause (b) shall expire unless Credit Suisse First Boston and Chase shall have notified you on or prior to November 25, 1997 that such condition has not been satisfied), (c) our not being aware after the date hereof of any information or other matter which is inconsistent in a material and adverse manner with any information or other material disclosed to us prior to the date hereof, (d) there not having occurred a material disruption of or material adverse change in financial, banking or capital market conditions that, in our reasonable judgment, could materially impair the syndication of either Facility, (e) there not being any competing offering, placement or arrangement of any debt securities or bank financing by or on behalf of DTAG, Dollar, Thrifty or any of their respective subsidiaries (other than in respect of the MTN Program, the CP Program and any other financing of vehicles that is not contemplated to be included in the MTN Program or the CP Program to the extent such financing is on terms and conditions reasonably satisfactory to Credit Suisse First Boston and Chase), unless otherwise agreed to by Credit Suisse First Boston and Chase, (f) our review and reasonable satisfaction with the terms of the documentation governing the Transaction (other than, in the case of the Credit Facility commitment, documentation in respect of the Liquidity Facility or the CP Program, to the extent not yet in place), (g) the negotiation, execution and delivery on or before January 30, 1998 of definitive documentation with respect to the Credit Facility reasonably satisfactory to Credit Suisse First Boston and Chase and their counsel, (h) with respect to the Liquidity Facility, the negotiation, execution and delivery on or before March 31, 1998 of definitive documentation with respect to the Liquidity Facility reasonably satisfactory to Credit Suisse First Boston and Chase and their counsel and (i) the other conditions set forth in the Term Sheets. Once the Equity Offerings have been completed and the Credit Facility has been provided to you, our commitment to provide the Liquidity Facility shall be subject only to completion of the definitive documentation for such Facility -5- 6 reasonably satisfactory to Credit Suisse First Boston and Chase and their counsel and our reasonable satisfaction with the terms of the documentation for the CP Program. The reasonable costs and expenses (including, without limitation, the fees and expenses of Mayer, Brown & Platt, counsel to Credit Suisse First Boston and Chase, and Credit Suisse First Boston's and Chase's due diligence, syndication and other out-of-pocket expenses) arising in connection with the preparation, execution and delivery of this letter and the definitive financing agreements shall be for your account. You further agree, jointly and severally, to indemnify and hold harmless each Co-Arranger, Agent and Lender (including Credit Suisse First Boston and Chase) and each director, officer, employee, affiliate (including, without limitation, CSFB and CSI) and agent thereof (each, an "indemnified person") against, and to reimburse each indemnified person, upon its demand, for, any losses, claims, damages, liabilities or other expenses ("Losses") to which such indemnified person may become subject insofar as such Losses arise out of or in any way relate to or result from the Transaction or any aspect thereof, this letter or the financings contemplated hereby, including, without limitation, Losses consisting of reasonable legal or other reasonable expenses incurred in connection with investigating, defending or participating in any legal proceeding relating to any of the foregoing (whether or not such indemnified person is a party thereto); provided that the foregoing will not apply to any Losses of an indemnified person to the extent they are found by a final decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such indemnified person (or its agents or employees or any other indemnified person under its control) or the breach by such indemnified person of any obligation hereunder of such person to you in respect of the commitments set forth herein. Your obligations under this paragraph shall remain effective whether or not definitive financing documentation is executed and notwithstanding any termination or expiration of this letter or the offer contained herein; provided that, upon the execution and delivery of definitive documentation governing the Facilities, the indemnification provisions set forth in such definitive documentation shall be deemed, on a prospective basis, to supersede your indemnification obligations hereunder to the extent such indemnification provisions govern any Loss described herein. Neither Credit Suisse First Boston, Chase or CSI nor any other indemnified person shall be responsible or liable to any other person or entity for consequential damages which may be alleged as a result of this letter or the financings contemplated hereby and neither Credit Suisse First Boston or Chase nor any other indemnified person shall be responsible or liable for any damages which may be alleged as a result of its failure, if in accordance with the terms of this letter, to provide or participate in any Facility. The provisions of this letter are supplemented as set forth in, and are conditioned upon, a separate fee letter dated the date hereof from us to you (the "Fee Letter") and are subject to the terms of such Fee Letter. By executing this letter, you acknowledge that this letter and the Fee Letter are the only agreements between you and us with respect to the Facilities and set forth the entire understanding of the parties with respect thereto. This letter and the Fee Letter and the respective obligations and rights hereunder and thereunder shall not be delegated or assigned by you without our prior written consent. This letter may -6- 7 not be amended or otherwise modified except pursuant to a writing signed by each of the parties hereto. This letter may be executed by the signatories hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together one and the same letter. THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH OF THE UNDERSIGNED PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF OR IN CONNECTION WITH, THIS COMMITMENT LETTER AND THE FEE LETTER, AND ANY OTHER COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY OF THE UNDERSIGNED PARTIES IN CONNECTION HEREWITH OR THEREWITH. By your acceptance hereof, you agree that neither this letter, the Fee Letter, nor any of their terms or substance, shall be disclosed, directly or indirectly, to any other person except to your employees, agents and advisers who are directly involved in the consideration of this matter or as disclosure may be compelled in a judicial or administrative proceeding or as otherwise required by law (and in each such event of permitted disclosure you agree promptly to inform us and to provide us with a reasonable opportunity to review and comment upon the contents of such disclosure); provided that, after your acceptance of the terms hereof and of the Fee Letter, you may disclose this letter and the terms set forth in the Term Sheets in any public filings or other disclosure under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that are required in connection with the Equity Offerings or the closing of the CP Program to the extent you have provided us a reasonable opportunity to review and comment upon the contents of such disclosure. Your obligations under this paragraph shall remain effective whether or not definitive financing documentation is executed and notwithstanding any termination or expiration of this letter or the offer contained herein. If you are in agreement with the foregoing, please sign and return to Credit Suisse First Boston and Chase the enclosed copies of this letter and the Fee Letter no later than 5:00 p.m., New York time, on November 20, 1997, at which time this offer shall terminate unless prior thereto we shall have received signed copies of such letters. Following your execution and delivery of this letter and the Fee Letter in accordance with the preceding sentence, our commitments hereunder shall terminate at 5:00 p.m., New York time, on January 30, 1998, unless on or prior to such time, definitive documentation with respect to the Credit Facility reasonably satisfactory to us and our counsel has been executed and delivered by you, us and, to the extent the Credit Facility has been syndicated, the applicable Credit Facility Lenders, and our commitments hereunder with respect to the Liquidity Facility shall terminate at 5:00 p.m., New York time, on March 31, 1998, unless on or prior to such time, definitive documentation with respect to the Liquidity Facility reasonably satisfactory to us and our counsel has been executed and delivered by Dollar Thrifty Funding, us and, to the extent the Liquidity Facility has been syndicated, the applicable Liquidity Facility Lenders. -7- 8 We look forward to working with you on this transaction. Very truly yours, CREDIT SUISSE FIRST BOSTON By: /s/ Robert N. Finney ----------------------------- Title: Managing Director By: /s/ Thomas Muoio ----------------------------- Title: Vice President THE CHASE MANHATTAN BANK By: /s/ BJ Lillis ------------------------------ Title: Managing Director CHASE SECURITIES INC. By: /s/ Donald R. Benson ------------------------------ Title: Managing Director Accepted and agreed to as of the date first above written: DOLLAR RENT A CAR SYSTEMS, INC. By:/s/ Robert J. Drvostep ----------------------------- Title: Vice President and Chief Financial Officer -8- 9 THRIFTY RENT-A-CAR SYSTEM, INC. By: /s/ Steven B. Hildebrand ------------------------------ Title: Vice President, Chief Financial Officer and Treasurer DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. By: /s/ Steven B. Hildebrand ------------------------------- Title: Vice President, Chief Financial Officer and Treasurer -9- 10 Syndication Agent: The Chase Manhattan Bank (in such capacity, the "Syndication Agent", and, together with the Liquidity Agent and the Collateral Agent, the "Agents"). Liquidity Facility Lenders: Domestic and foreign commercial banks and other financial institutions maintaining short-term unsecured debt ratings of at least "A-1" from S&P and "P-1" from Moody's. Commitment Maturity Date: The earliest of (i) 364 days from the date of such commitment, (ii) the date on which all commercial paper has been paid in full and cannot be re-issued and (iii) the date on which Dollar Thrifty Funding terminates the Liquidity Facility. Facility Amount: The aggregate commitments under the Liquidity Facility will initially total $545,000,000. Commitment Fees: The Issuer shall pay to the Liquidity Agent, for the ratable benefit of the Liquidity Facility Lenders, a commitment fee on the average daily unused portion of the Liquidity Facility, payable monthly in arrears, at 18.75 basis points per annum, calculated on the basis of a year of 360 days for actual days elapsed. Facility Availability: Subject to having met the liquidity conditions set forth below, each Liquidity Facility Lender may be obligated to make advances to the Issuer at any time during the term of its commitment in an amount up to the lesser of (i) the available portion of its commitment amount and (ii) its pro rata share of the face amount of outstanding commercial paper maturing on or after such date. The aggregate amount that may be drawn under the Liquidity Facility on any date will equal the lesser of (i) the CP Borrowing Base (as defined below) less the available Letter of Credit amount and (ii) the undrawn amount of the Liquidity Facility. The "CP Borrowing Base" will be (a) the outstanding principal amount, net of any write downs (which write downs will be based upon losses in respect of collateral), of the Variable Funding Note (defined below), plus (b) all accrued and unpaid interest thereon, plus (c) any cash held by the Issuer in a designated commercial paper account. The "Variable Funding Note" will be a note representing a new series -2- 11 issued under the master indenture between Rental Car Finance Corp. ("RCFC"), formerly Thrifty Car Rental Finance Corporation, a bankruptcy remote special purpose corporation and wholly-owned subsidiary of DTAG, and Bankers Trust Company, as Trustee (the "RCFC Indenture"). The security pledged under the RCFC Indenture to secure the Variable Funding Note will be as set forth below under the caption "Security". The Liquidity Facility may be drawn in the event the Issuer has determined, after consultation with the commercial paper dealers, that commercial paper cannot be sold, unless: (a) the Issuer has experienced an insolvency event, or (b) the amount available under the Letter of Credit has been reduced to zero due to credit draws. Interest Periods and Rates: At the option of the Issuer: (i) Base Rate, or (ii) the one, two, three or six-month Eurodollar Rate plus 75.0 basis points. For purposes hereof: "Base Rate" means the higher of (i) the rate of interest established by the Liquidity Agent as its base or prime rate in effect at its principal office in New York City (the "Prime Rate") and (ii) the federal funds effective rate from time to time plus 50 basis points; and "Eurodollar Rate" means the rate (grossed-up for maximum statutory reserve requirements for eurocurrency liabilities) at which eurodollar deposits for one, two, three or six months (as selected by the Issuer) are offered by the Liquidity Agent in the relevant interbank eurodollar market. Such per annum rates shall be calculated on the basis of a year of 360 days (or 365/366 days, in the case of Base -3- 12 Rate loans the interest rate payable on which is then based on the base or prime rate) for actual days elapsed. Security: The Issuer will pledge all its right, title and interest in the Variable Funding Note and all security for the Variable Funding Note under the RCFC Indenture, including, but not limited to, the related master lease and servicing agreement (the "Lease Agreement"), the vehicles leased thereunder (the "Vehicles"), proceeds from the manufacturer programs related to the Vehicles, all sale and insurance proceeds from the Vehicles, the Letter of Credit supporting the payments due under the Lease Agreement and the capitalization demand note capitalizing RCFC and any security therefor. Vehicles eligible to be leased under the Lease Agreement ("Eligible Vehicles") will be cars and light duty trucks that are subject to a manufacturer disposition program (a "Manufacturer Program") provided by an eligible manufacturer (a "Manufacturer") (such Vehicles, "Program Vehicles") and cars and light duty trucks not subject to a Manufacturer Program ("Non-Program Vehicles"), provided that the aggregate net book value of all Non-Program Vehicles under the Lease Agreement will be subject to a limit of 20% of the size of the CP Program. Reduction or Termination of Liquidity Facility: The Issuer may, upon three business days' notice, reduce in part or terminate in whole the amount of the Liquidity Facility without penalty. Any partial reduction of the Liquidity Facility will be pro rata across the Liquidity Facility and in minimum amounts of $5,000,000 and increments of $1,000,000 thereafter. No reductions may be made in an amount such that, after giving effect to such reduction, the aggregate amounts available under the Liquidity Facility and the Letter of Credit would be less than the amount required by the Rating Agencies. Credit Enhancement: A. Letter of Credit. In order to assure the timeliness of payment by the lessees under the Lease Agreement, credit enhancement will be provided, in part, pursuant to a letter of credit issued under the Credit Facility and/or a letter of credit issued by Chrysler Credit Corporation (and, if -4- 13 Chrysler Credit Corporation is such an issuer, its letter of credit, together with any letter of credit issued under the Credit Facility, shall be fronted by a letter of credit (the "Fronting L/C") issued by a single institution (the "Fronting Bank") which maintains short-term credit ratings of "A-1" (or better) from S&P and "P-1" from Moody's (collectively, the "Letter of Credit")). It is expected that the Letter of Credit will be in an aggregate amount equal to the sum of approximately 10% of the net book value of eligible Program Vehicles financed by the proceeds of the issuance of the Variable Funding Note and approximately 15% of the net book value of eligible Non-Program Vehicles financed by the proceeds of the issuance of the Variable Funding Note. Final sizing of the exact enhancement levels (the "Required Enhancement Amount") will be determined by the Rating Agencies, and will generally be sized in accordance with the foregoing percentages and will cover, among other items, the following: (a) the discount on the commercial paper notes (yield to investors) based on the maturity of the commercial paper notes; (b) payments due from a lessee for any casualty, late return, excess mileage or damage charges; (c) payments due from RCFC for the difference between the net book value of Non-Program Vehicles and the proceeds to be received upon the sale of such Non-Program Vehicles to a third party; (d) the aggregate amount of depreciation that would be expected to accrue in respect of Vehicles during a 60-day period; (e) commitment fees due to letter of credit providers, the Fronting Bank (if any) and the Liquidity Facility Lenders; and (f) any other expenses associated with the disposition of the Vehicles (i.e., secondary servicer expenses). -5- 14 B. Overcollateralization. On the closing date of the CP Program, RCFC will obtain additional capital (by capital contribution or otherwise), the proceeds of which will be used to purchase Eligible Vehicles for lease under the Lease Agreement. The lease payments under the Lease Agreement and all disposition proceeds from these Eligible Vehicles will provide additional credit enhancement for the Variable Funding Note. The overcollateralization may be increased in the future to provide additional credit enhancement as required under the terms of the CP Program. Conditions to Effectiveness: The availability of the Liquidity Facility shall be conditioned, except to the extent waived, upon satisfaction of, among other things, the following conditions precedent on or before March 31, 1998: 1. Execution and delivery of reasonably satisfactory credit, security and other related documentation embodying the structure, terms and conditions of the Liquidity Facility contained herein (collectively, the "Liquidity Documentation"). 2. The $230,000,000 Credit Facility shall be in full force and effect and no default shall then exist thereunder. 3. The Issuer's commercial paper shall have received ratings of "A-1" (or better) from S&P and "P-1" from Moody's. 4. Due authorization, execution and delivery of the Letter of Credit in form and substance reasonably satisfactory to the Agents. 5. The absence of an Event of Amortization, Limited Event of Amortization or Lease Event of Default. -6- 15 6. All representations and warranties of the Issuer and RCFC contained in each of the CP Program documents to which the Issuer or RCFC is a party shall be true and correct (including, as of the Closing Date, no material litigation or similar proceeding which would have a material adverse effect on the ability of Issuer or RCFC to perform its obligations under such documents). 7. RCFC shall not have sold, assigned, or otherwise encumbered any of the Vehicles financed under the Variable Funding Note issued to Dollar Thrifty Funding except as permitted under the applicable agreements. 8. A collateral account, a master collateral account and a commercial paper account in respect of the CP Program shall have been established. 9. The Liquidity Agent shall have received the results of a recent lien search in each of the jurisdictions and offices where assets constituting collateral for the Liquidity Facility and the Variable Funding Note are located or recorded and such search shall reveal no liens on any such assets except to the extent contemplated in the paragraph captioned "Security" above or released on the Closing Date or otherwise consented to by the Liquidity Agent. 10. The Liquidity Agent shall be satisfied that all Vehicles have been properly titled and that the security interests therein described in the paragraph captioned "Security" above have been notated and the Liquidity Agent shall have received evidence that all UCC-1 financing statements and other instruments and documents as may be necessary or desirable to perfect the other security interests described in the paragraph captioned "Security" above have been forwarded for filing or, in its discretion, are in its possession in a form suitable for filing. -7- 16 11. The Liquidity Facility Lenders shall have received such opinions, instruments, certificates and other documents as are customary for transactions of this type or as they may reasonably request, including (i) legal opinions regarding exemption from registration of the commercial paper notes under the Securities Act of 1933 and exemption of the Issuer from the provisions of the Investment Company Act and (ii) enforceability opinions for all CP Program documents (including the Letter of Credit and the Variable Funding Note), a non-consolidation opinion, perfection opinions and, if required by the Rating Agencies, opinions addressing the enforceability of the Manufacturer Programs against the Manufacturers. Representations and Warranties: The representations and warranties of the Issuer shall include customary provisions for transactions of a similar nature, including the following: 1. Standard representations as to corporate existence, compliance with law and authority to enter the contemplated transaction (including enforceability, no proceedings, no conflicts). 2. Representations that all commercial paper notes are exempt from registration under Section 4(2) of the Securities Act of 1933. 3. Representations that the Issuer is not an "investment company" within the meaning of the Investment Company Act of 1940. 4. Representations as to compliance with margin regulations. 5. Representations that the Issuer is not insolvent or bankrupt and is not the subject of any similar proceedings. 6. Representations as to ownership of assets and creation and perfection of security interest. -8- 17 Covenants of the Issuer and RCFC: Customary for transactions of a similar nature, including the following: 1. The Issuer and RCFC will provide or, where applicable, cause DTAG, as master servicer (the "Master Servicer"), to provide the Collateral Agent and the Liquidity Facility Lenders with such information with respect to the transaction as the Liquidity Facility Lenders may reasonably require, including, but not limited, to, financial statements of RCFC and the Issuer. 2. The Issuer and RCFC will take all actions necessary to ensure that all taxes and other governmental claims in respect of RCFC's and the Issuer's operations and assets are properly paid. 3. The Issuer and RCFC will comply in all material respects with its obligations under the documents to which it is a party and will not take any action which would permit DTAG or the lessees to have the right to refuse to perform any of their obligations under the Lease Agreement. 4. The Issuer and RCFC will give the Liquidity Facility Lenders notice of any default under any agreements between the Issuer, RCFC and any of DTAG or the lessees, the Liquidity Facility Lenders or the Collateral Agent. 5. The Issuer will take all actions necessary to ensure that the lessees or such other affiliate of DTAG as is responsible therefor has filed and recorded all documents and statements required to maintain title to the Vehicles. 6. The Issuer and RCFC will not create, incur, assume, or cause to exist any lien or security interest on any of its property other than as provided under the Liquidity Documentation. -9- 18 7. The Issuer will not create, incur, assume, or cause to exist any indebtedness or any other liability except (i) indebtedness evidenced by the commercial paper, (ii) advances under the Liquidity Facility, (iii) normal operating expenses and (iv) liquidity advances under the Letter of Credit. 8. Limitation on merger, consolidation, joint venture, or other association of the Issuer and RCFC. 9. Neither the Issuer nor RCFC will amend its organizational documents without the written consent of the Majority Secured Parties (to be defined) and the Rating Agencies. 10. Neither the Issuer nor RCFC will change its business or enter into new businesses or enter into any agreements other than as contemplated by the Liquidity Documentation. 11. The Issuer and RCFC will satisfy their obligations under the Employee Retirement Income Security Act of 1974, as amended, and all other legal requirements. 12. The Issuer will not sell or purchase any collateral except as contemplated in the Liquidity Documentation. 13. RCFC and the Issuer will maintain their respective separate legal existence and will maintain their respective corporate identities (separate from DTAG and any other affiliates) and will not enter into transactions with DTAG and its affiliates except on an arm's length basis. 14. Neither RCFC nor the Issuer will change the location of its principal office without prior notice to the Liquidity Agent and the Collateral Agent. Covenants of DTAG: The Lease Agreement will contain customary covenants made by DTAG and the lessees for transactions of a similar nature, including the following: -10- 19 1. The maintenance of a minimum Interest Coverage Ratio (to be defined) of 1.1:1.0. 2. The maintenance of a minimum Fixed Charge Coverage Ratio (to be defined) of 1.0:1.0. 3. DTAG will not be permitted to make distributions (including dividends and return of capital) to its stockholders except amounts up to cumulative net income from the Closing Date. Events of Amortization: The Events of Amortization under the Liquidity Facility will include, among other events, the following. 1. Failure of the Issuer to repay maturing commercial paper when due. 2. Failure of the Issuer to pay principal on advances to Liquidity Facility Lenders under the Liquidity Facility when due or failure to pay interest on advances or Commitment Fees within three business days after such amounts become due. 3. Breach of a representation or warranty of the Issuer set forth in the Liquidity Agreement or other program documents after any applicable grace period. 4. Failure to observe or perform certain covenants of the Issuer contained in the Liquidity Agreement or other program documents and the continuance of such failure after any applicable grace period. 5. Involuntary bankruptcy proceedings are commenced against the Issuer, RCFC or the Servicer and not dismissed within 60 days or a decree or order for relief is entered against the Issuer, RCFC or the Servicer, certain insolvency events occur or voluntary bankruptcy or similar proceedings are commenced with respect to the Issuer, RCFC or the Servicer. 6. Final judgment in excess of $100,000 against RCFC or the Issuer is unsatisfied and unstayed for 60 days. -11- 20 7. The available amount of credit enhancement is for a one business day period less than the Required Enhancement Amount. 8. The rating on the Issuer's commercial paper notes is downgraded to "A-2" or less by S&P or "P-2" or less by Moody's, or withdrawn, and all of the Liquidity Facility Lenders have a rating of A-1 or better by S&P and P-1 by Moody's. 9. The occurrence of an Event of Default under the Lease Agreement or the RCFC Indenture after any applicable grace period. 10. The declaration by the Credit Facility Lenders of an event of default under the $230,000,000 Credit Agreement or by Chrysler Credit Corporation under the reimbursement agreement relating to the letter of credit issued by it in connection with the CP Program. Upon the occurrence of an Event of Amortization, the Liquidity Facility Lenders shall remain obligated to make advances to the Issuer to repay outstanding commercial paper up to the amount of their respective commitments, unless the voluntary or involuntary bankruptcy or insolvency of the Issuer shall have occurred or the available amount of credit enhancement shall be reduced to zero due to credit draws. Limited Events of Amortization: The Limited Events of Amortization will result in, and will include, among other events, the following: 1. Dollar Thrifty Funding will not be permitted to make any further purchases of the Variable Funding Note the proceeds of which will be used by RCFC to finance Vehicles from a particular Manufacturer if: (a) such Manufacturer fails to pay amounts owed to the lessees or RCFC under the applicable Manufacturer Program, subject to any applicable grace period; -12- 21 (b) such Manufacturer becomes the subject of an insolvency, bankruptcy or similar preceding; or (c) such Manufacturer or such Manufacturer's Manufacturer Program shall cease to be an eligible Manufacturer or eligible Manufacturer Program, respectively. 2. Dollar Thrifty Funding will not be permitted to make any further purchases of the Variable Funding Note if the liquidity loan commitment of any Liquidity Facility Lender shall have been terminated, Dollar Thrifty Funding shall have failed to replace such Liquidity Facility Lender and the outstanding principal amount of the Variable Funding Note would exceed the remaining aggregate liquidity loan commitments. 3. Dollar Thrifty Funding will not be permitted to make any further purchases of the Variable Funding Note if the short-term credit ratings of a Liquidity Facility Lender are reduced to below "A-2" by S&P or "P-2" by Moody's, such Liquidity Facility Lender is not replaced by another Liquidity Facility Lender within 60 days (or such other period of time as may be determined by the Rating Agencies) and the outstanding principal amount of the Variable Funding Note would exceed the remaining aggregate liquidity loan commitments. Dollar Thrifty Funding will again be permitted to make purchases when the size of the CP Program is reduced by the amount of the commitment(s) of such Liquidity Facility Lender. Lease Events of Default: The Lease Events of Default shall include, among other events, the following: 1. Failure of a lessee and the guarantor to pay any portion of rent allocable to base rent due under the Lease Agreement within three business days of such due date or the failure to pay the portion of rent under the Lease Agreement allocable to variable rent or any other amount due in respect thereof within five business days after such amounts become due. -13- 22 2. Involuntary bankruptcy proceedings are commenced against RCFC, DTAG or any of its affiliates and not dismissed within 60 days or a decree or order for relief is entered, certain insolvency events occur or voluntary bankruptcy or similar proceedings are commenced. 3. Failure by a lessee or the guarantor to comply with or perform any provision of the Lease Agreement and the continuance of such failure after any applicable grace period. 4. Material breach of a representation or warranty of a lessee or the guarantor set forth in the Lease Agreement after any applicable grace period. 5. Failure of the lessees and the guarantor to maintain the available credit enhancement amount at the Required Enhancement Amount for more than one Business Day. Upon the occurrence of a Lease Event of Default, RCFC will not be permitted to make any further advances under the Lease Agreement. Events of Liquidation: Lease Events of Default set forth under clauses 2 and 5 above will also constitute Events of Liquidation. Upon the occurrence of an Event of Liquidation, RCFC will be required to exercise its right to return Program Vehicles to the Manufacturers or otherwise dispose of them under the respective Manufacturer Programs upon the expiration of the minimum vehicle holding period (if applicable) and dispose of all Non-Program Vehicles in a commercially reasonable manner. Events of Liquidation can be waived upon consent from (i) two-thirds of the Liquidity Facility Lenders and (ii) the Fronting Bank. Assignments and Participations: Each Liquidity Facility Lender may assign all or a portion of its commitment to an eligible assignee subject to certain specified conditions, including Rating Agency confirmation, consent (not to be unreasonably withheld) of the Liquidity Agent and the Issuer (except with respect -14- 23 to assignments to another Liquidity Facility Lender) and a minimum commitment for each Liquidity Facility Lender of $5,000,000. Liquidity Facility Lenders may participate their commitments without consent. Participants shall have the same benefits as the Liquidity Facility Lenders with respect to yield protection and increased cost provisions. Voting rights of participants shall be limited to certain customary issues. Pledges of loans in accordance with applicable law shall be permitted without restriction; provided that the obligations under the Liquidity Documentation of the Liquidity Facility Lender pledging any such loan may not be delegated or assigned pursuant to any foreclosure under such pledge without the consent of the Issuer (as provided above). Other Provisions: Provisions as to voting, yield protection and expenses and indemnification that are substantially similar to those described in the Credit Facility Term Sheet. The Issuer will have the right to replace any Liquidity Facility Lender (i) that demands payment of amounts in respect of increased costs which the Issuer, in its reasonable judgment, believes is reasonably likely to be demanded again in the future so long as an event of amortization shall not have occurred and be continuing or (ii) whose short-term unsecured debt rating is downgraded by a Rating Agency to a level below the then current credit rating assigned to the Issuer's commercial paper notes by such Rating Agency, in each case, with an Eligible Liquidity Facility Lender (to be defined) acceptable to the Liquidity Agent. Governing Law and Forum: State of New York. Counsel to the Co-Arrangers and the Agents: Mayer, Brown & Platt. Commitment Termination Date: The Liquidity Documentation must have been entered into on or before March 31, 1998. -15- EX-4.10 6 CHRYSLER SUPPORT LETTER 1 EXHIBIT 4.10 CHRYSLER SUPPORT LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT Dated as of December __, 1997 among CHRYSLER CORPORATION, DOLLAR RENT A CAR SYSTEMS, INC., as a Lessee, THRIFTY RENT-A-CAR SYSTEM, INC., as a Lessee, and DOLLAR THRIFTY AUTOMOTIVE GROUP, INC., as the Guarantor. 2 TABLE OF CONTENTS ARTICLE I DEFINITIONS Section 1.1. Definitions................................................................................4 ARTICLE II ISSUANCE OF CHRYSLER SUPPORT LETTERS OF CREDIT; REIMBURSEMENT OBLIGATION Section 2.1. Issuance of Chrysler Letters of Credit; Reduction Amounts..................................4 Section 2.3. Reimbursement..............................................................................8 Section 2.4. No Liability of Chrysler..................................................................10 Section 2.5. Conditions Precedent to Issuance..........................................................10 Section 2.6. Obligation Absolute.......................................................................12 Section 2.7. Guaranty..................................................................................13 ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS Section 3.1. Representations and Warranties of the Lessees and DTAG....................................15 Section 3.2. Covenants of the Lessees and DTAG.........................................................17 Section 3.3. Chrysler Covenants........................................................................19 ARTICLE IV MISCELLANEOUS Section 4.1. Payments..................................................................................20 Section 4.2. Notices...................................................................................20 Section 4.3. Amendments, etc...........................................................................21 Section 4.4. Consent to Jurisdiction...................................................................21 Section 4.5. Waiver of Jury Trial......................................................................22
i 3 Section 4.6. Governing Law............................................................................22 Section 4.7. Severability.............................................................................22 Section 4.8. Term.....................................................................................22 Section 4.9. Successors and Assigns...................................................................23 Section 4.10. Counterparts.............................................................................23 Section 4.11. Further Assurances.......................................................................23 Section 4.12. Survival of Obligations..................................................................23 Section 4.13. Obligation...............................................................................23 Section 4.14. Headings.................................................................................24 Section 4.15. Application of Funds.....................................................................24 Section 4.16. Subordination of Obligations Pursuant to Intercreditor and Subordination Agreement..................................................................24
ii 4 CHRYSLER SUPPORT LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT THIS CHRYSLER SUPPORT LETTER OF CREDIT AND REIMBURSE MENT AGREEMENT, dated as of December __, 1997 (as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms hereof, this "Agreement"), is entered into by and among CHRYSLER CORPORA TION, a Delaware corporation ("Chrysler"), DOLLAR RENT A CAR SYSTEMS, INC., an Oklahoma corporation ("Dollar"), THRIFTY RENT-A-CAR SYSTEM, INC., an Oklahoma corporation ("Thrifty"), each of Dollar and Thrifty a "Lessee" and, collective ly, the "Lessees"), and DOLLAR THRIFTY AUTOMOTIVE GROUP, INC., a Delaware corporation ("DTAG" or the "Guarantor"). R E C I T A L S WHEREAS, contemporaneously with the execution and delivery of this Agree ment, Rental Car Finance Corp., a special purpose Oklahoma corporation, formerly known as Thrifty Car Rental Finance Corporation ("RCFC"), as issuer (in such capacity, the "Issuer"), and Bankers Trust Company, a New York banking corporation, as Trustee (in such capacity, the "Trustee"), are entering into the Series 1997-1 Supplement, dated as of even date herewith (as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof, the "Series 1997-1 Supplement"), to the Base Indenture, dated as of December 13, 1995, between RCFC and the Trustee, as amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof, the "Base Indenture"), pursuant to which RCFC will issue its Series 1997-1 Notes (such capitalized term, together with all other capitalized terms used and not defined herein, shall have the meanings assigned thereto pursuant to Section 1.1); WHEREAS, contemporaneously with the execution and delivery of this Agree ment, RCFC, the Lessees and DTAG are entering into the Master Motor Vehicle Lease and Servicing Agreement dated as of even date herewith (the "Master Lease"), pursuant to which RCFC will lease vehicles to Lessees in their respective domestic daily rental business; WHEREAS, contemporaneously with the execution and delivery of this Agree ment, DTAG, the Issuer, the Trustee, Thrifty, Dollar, certain other parties thereto, and Bankers Trust Company, as Master Collateral Agent, are entering into an Amended and Restated Master Collateral Agency Agreement (the "Master Collateral Agency Agree- 5 ment"), which amends and restates the Master Collateral Agency Agreement, dated as of December 13, 1995, among the Issuer, Thrifty, certain other parties thereto, and the Master Collateral Agent; WHEREAS, contemporaneously with the execution and delivery of this Agreement, the Series 1997-1 Letter of Credit Provider is issuing its Series 1997-1 Letter of Credit to the Trustee to provide (i) with respect to the Lessees, partial credit support for the obligations of the Lessees to make payments under the Master Lease and (ii) with respect to DTAG, credit support for any amounts owed by DTAG under Section [4.19] of the Series 1997-1 Supplement; WHEREAS, contemporaneously with the execution and delivery of this Agree ment, Chrysler is executing and delivering to the Series 1997-1 Letter of Credit Provider a letter of credit (such letter of credit, as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof and any successor letter of credit thereto as provided for in this Agreement and thereunder, the "Chrysler Series 1997-1 Support Letter of Credit") in substantially the form of Exhibit to the Series 1997-1 Letter of Credit Agreement (as hereinafter defined), to reimburse the Series 1997-1 Letter of Credit Provider for any amounts drawn under the Series 1997-1 Letter of Credit subject to the terms and conditions set forth therein in an amount up to the Available Chrysler Support Amount (as such term is de fined in Chrysler Series 1997-1 Support Letter of Credit) and on the terms set forth in the Chrysler Series 1997-1 Support Letter of Credit; WHEREAS, substantially contemporaneously with the execution and delivery of this Agreement, (a) DTAG intends to issue shares of its common stock, par value $0.01 per share (the "Common Stock"), in a registered public offering for net cash proceeds of at least $45,000,000, which proceeds will be used to provide collateral for the financing of vehicles by DTAG and its subsidiaries (the "Primary Equity Offering"), and (b) Chrysler intends to sell approximately 20,000,000 shares of the Common stock of DTAG owned by it in a registered public offering which, following the consummation thereof, will result in DTAG no longer being a subsidiary of Chrysler (the "Second Equity Offering" and, together with the Primary Equity Offering, the "Equity Offerings"); WHEREAS, it is contemplated that following the execution and delivery of this Agreement, (a) DTAG will implement through a to-be-formed special purpose, wholly-owned subsidiary ("Dollar Thrifty Funding"), a commercial paper program of up to $615,000,000 secured by vehicles and related assets, the proceeds of which will be used to finance vehicle fleet growth and to refinance existing vehicle fleet indebtedness (the "CP Program"), and (b) in connection with the CP Program, a letter of credit would be 2 6 provided (the "CP Program Letter of Credit") by a financial institution having a short-term credit rating of "A-1" (or better) from S&P and "P-1" from Moody's (the "CP Program Letter of Credit Provider"); WHEREAS, [pursuant to the Series 1997-1 Letter of Credit Agreement (as hereinafter defined)] additional institutions (each, an "Additional Series 1997-1 Support Letter of Credit Provider") may be issuing to the Series 1997-1 Letter of Credit Provider a letter of credit (each such letter of credit, a "Series 1997-1 Support Letter of Credit") to reimburse the Series 1997-1 Letter of Credit Provider for any amounts drawn under the Series 1997-1 Letter of Credit on a pro rata basis with respect to each other and with respect to Chrysler's reimbursement of such amounts pursuant to Chrysler Series 1997-1 Support Letter of Credit; WHEREAS, contemporaneously with the execution and delivery of this Agree ment, the Lessees, DTAG and the Series 1997-1 Letter of Credit Provider are entering into the Series 1997-1 Letter of Credit Agreement, dated as of even date herewith (as the same may be amended, supplemented or otherwise modified from time to time in ac cordance with the terms thereof, the "Series 1997-1 Letter of Credit Agreement"), to provide for the issuance of Series 1997-1 Support Letters of Credit from time to time to reduce the credit support provided by the Chrysler Series 1997-1 Support Letter of Credit and for the payment and repayment of certain fees and expenses and other obligations of the Lessees and DTAG to the Series 1997-1 Letter of Credit Provider in connection with the execution and delivery by the Series 1997-1 Letter of Credit Provider of the Series 1997-1 Letter of Credit; WHEREAS, the Lessees, DTAG and Chrysler are entering into this Agreement to provide for, among other things, (i) the reimbursement by the Lessees (or in certain cases, DTAG) of draws upon the Chrysler Series 1997-1 Support Letter of Credit that are made by the Series 1997-1 Letter of Credit Provider and (ii) the guaranty by DTAG of the reimbursement obligations of each of the Lessees. NOW, THEREFORE, in consideration of the recitals and of the agreements herein contained, and for due and adequate consideration, which the parties hereto hereby acknowledge, the parties hereto agree as follows: 3 7 ARTICLE I DEFINITIONS Section 1.1. Definitions. As used in this Agreement and unless the context re quires a different meaning, capitalized terms used but not defined herein (including in the preamble and the recitals hereto) shall have the meanings assigned to such terms in (i) the Series 1997-1 Supplement, as amended, supplemented, restated or otherwise modified from time to time in accordance with the terms of the Series 1997-1 Supplement, (ii) the Definitions List attached as Schedule 1 to the Base Indenture, as in effect on the date hereof, as such Definitions List may be further amended, supplemented, restated or otherwise modified from time to time in accordance with the terms of the Base Indenture, provided that to the extent, if any, that any capitalized term used but not defined herein has a meaning assigned in both the Series 1997-1 Supplement and the Definitions List to the Base Indenture, then the meaning assigned to such term in the Series 1997-1 Supple ment shall apply herein, (iii) the Revolving Credit Agreement, dated as of December , 1997 (the "Revolving Credit Agreement"), among DTAG, Dollar, Thrifty, various finan cial institutions, Credit Suisse First Boston, as Administrative Agent, and The Chase Manhattan Bank, as Syndication Agent, as in effect on the date hereof, and (iv) the form of Chrysler Support Letter of Credit attached as Exhibit __ to the Series 1997-1 Letter of Credit Agreement. The term "Material Adverse Effect" shall be used as defined in the Series 1997-1 Supplement and shall also mean a material adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of DTAG and its subsidiaries taken as a whole. ARTICLE II ISSUANCE OF CHRYSLER SUPPORT LETTERS OF CREDIT; REIMBURSEMENT OBLIGATION Section 2.1. Issuance of Chrysler Letters of Credit; Reduction Amounts. (a) Chrysler hereby agrees, on the terms and subject to the conditions hereinafter set forth, to execute and deliver (i) to the Series 1997-1 Letter of Credit Provider the Chrysler Series 1997-1 Support Letter of Credit in an initial amount not exceeding $50,000,000 (such amount less the reduction (if any) set forth in the final sentence of this Section 2.1(a), the 4 8 "Initial Chrysler Support Amount") for a term expiring on December __, 20021 (the "Chrysler Support Expiration Date") and (ii) in the event the Initial Chrysler Support Amount is greater than the stated amount of the Chrysler Series 1997-1 Support Letter of Credit (such excess, the "Remaining Amount"), to the CP Program Letter of Credit Provider a letter of credit in form and substance substantially similar to the Chrysler Series 1997-1 Support Letter of Credit (the "CP Program Support Letter of Credit" and, together with the Chrysler Series 1997-1 Support Letter of Credit, the "Chrysler Support Letters of Credit") (except that such letter of credit shall also provide for reimbursement of the CP Program Letter of Credit Provider for "liquidity drawings" made upon the CP Program Letter of Credit Provider) in a stated amount equal to the Remaining Amount, which letter of credit shall be reasonably acceptable to the CP Program Letter of Credit Provider. In the event the letter of credit described in the preceding clause (ii) is to be delivered to the CP Program Letter of Credit Provider by Chrysler, the parties hereto agree to use their best efforts to negotiate a supplement to this Agreement that would contain terms and conditions governing such letter of credit that are in form and sub stance substantially similar to the terms and conditions set forth herein governing the Chrysler Series 1997-1 Support Letter of Credit (except that such supplement shall contain terms providing for reimbursement of "liquidity" draws by Dollar Thrifty Fund ing over a period of up to 18 months, the selection of interest periods and rates with re spect to such drawings, the apportionment of termination draws between "liquidity" draws and "credit" draws, and the ability of the trustee with respect to the CP Program (or its agent) to convert "liquidity" drawings to "credit" drawings all of which terms shall be substantially similar to those governing any Enhancement Letter of Credit), which supplement shall be reasonably acceptable to the CP Program Letter of Credit Provider. In the event the net cash proceeds received by DTAG pursuant to the exercise by the underwriters and managers of the Equity Offerings of their options pursuant to Section 3 of the Underwriting Agreement, dated [ ] 1997, among DTAG, Chrysler, Credit Suisse First Boston Corp., Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Solomon Brothers Inc. to purchase additional shares of Common Stock to cover over-allotments exceeds $10,000,000, the commitment of Chrysler hereunder to provide a letter of credit or letters of credit in an aggregate stated amount of $50,000,000 (the "Chrysler Support Commitment") shall be reduced, not later than 10 business days after receipt of such over-allotment proceeds, by the amount by which such proceeds (less any underwriters discount) exceeds $10,000,000 and, in the event the stated amount of the Chrysler Series 1997-1 Support Letter of Credit exceeds such reduced commitment, Dollar and Thrifty shall by providing the Series 1997-1 Letter of Credit Provider with additional collateral or an Additional Series 1997-1 Support Letter of Credit cause the __________ 1. Is that the correct date? 5 9 Series 1997-1 Letter of Credit Provider to [accept a substitute] [deliver to Chrysler a reduction certificate to reduce the] Chrysler Series 1997-1 Support Letter of Credit [in/to] a stated amount equal to such reduced commitment or otherwise release Chrysler from its obligations under the Chrysler Series 1997-1 Support Letter of Credit, all as provided in the Series 1997-1 Letter of Credit Agreement. Not later than 10 days after receipt of any over-allotment proceeds by DTAG, DTAG shall deliver to Chrysler a certificate executed by its chief financial officer certifying to Chrysler the amount of any such over-allotment proceeds and related underwriters' discount. (b) If a successor Series 1997-1 Letter of Credit Provider is appointed, promptly following the appointment of such successor Series 1997-1 Letter of Credit Provider, and upon receipt of an Instruction to Transfer substantially in the form of Annex [G] to the Chrysler Series 1997-1 Support Letter of Credit, Chrysler shall deliver for the benefit of such successor and the current Series 1997-1 Letter of Credit Provider, in exchange for its outstanding Chrysler Series 1997-1 Support Letter of Credit, a substitute letter of credit substantially in the form of Exhibit A hereto having terms substantially identical to its then outstanding Chrysler Series 1997-1 Support Letter of Credit, but in favor of such successor. (c) (i) On September 30, 1999, and on each successive one year anniversary thereof until the Chrysler Support Expiration Date (each, a "Reduction Date"), the Chrysler Support Commitment shall be reduced by an amount equal to the greater of (A) 20% of the Initial Chrysler Support Amount and (B) 50% of Excess Cash Flow (as de fined below) for the calendar year ending December 31 most recently completed prior to such Reduction Date (the "Support Reduction Amount"). On or before the date that is 60 days prior to each Reduction Date, DTAG shall deliver to Chrysler a certificate executed by its chief financial officer certifying the Support Reduction Amount with respect to such Reduction Date, which certificate shall include a reasonably detailed calculation of Excess Cash Flow for the calendar year most recently completed prior to such Reduction Date. "Excess Cash Flow"2 means, for any such calendar year of DTAG, an amount equal to the excess of (a) the sum, without duplication, of (i) consolidated net income of DTAG and its subsidiaries for such fiscal year, (ii) an amount equal to the amount of all non-cash charges deducted in arriving at such consolidated net income and (iii) decreases in Consolidated Working Capital for such year over (b) the sum, without duplication, of (i) the amount of all non-cash credits included in arriving at such consolidated net in come, (ii) the aggregate amount actually paid by DTAG and its subsidiaries in cash during such year on account of capital expenditures (excluding the principal amount of ______________ 2. Chrysler and DTAG to confirm acceptability of this definition. 6 10 indebtedness incurred in connection with such capital expenditures, whether incurred in such year or in another year), (iii) the aggregate amount of all prepayments of any amounts outstanding under any revolving credit facility to which DTAG or any of its subsidiaries to the extent accompanied by permanent reductions thereto, (iv) the aggre gate amount of all principal payments of indebtedness of DTAG or its subsidiaries (including any term loans and the principal component of payments in respect of capi talized lease liabilities) made during such year (other than in respect of any revolving credit facility to the extent there is not an equivalent permanent reduction in commit ments thereunder), (v) increases in Consolidated Working Capital for such year, and (vi) the aggregate net non-cash gain on the sale, conveyance or disposition of any prop erty or asset by DTAG and its subsidiaries during such year (other than sales in the ordinary course of business) to the extent included in arriving at such consolidated net income. As used in this definition, "Consolidated Working Capital" means, with respect to DTAG, at any date, the excess of (a) the sum of all amounts (other than cash, cash equivalents and marketable securities) that would, in conformity with generally accepted accounting principles, be set forth opposite the caption "total current assets" (or any like caption) on a consolidated balance sheet of DTAG and its subsidiaries at such date over (b) the sum of all amounts that would, in conformity with generally accepted accounting principles, be set forth opposite the caption "total current liabilities" (or any like caption) on a consolidated balance sheet of DTAG and its subsidiaries on such date, but excluding the current portion of any indebtedness for borrowed money of DTAG and its subsidiar ies that matures more than one year from the date of its creation or matures within one year from such date and is renewable or extendable, at the option of DTAG or one of its subsidiaries, to a date more than one year from such date or arises under a revolving credit or similar agreement that obligates the lender or lenders thereunder to extend credit during a period of more than one year from such date. All accounting terms used in this definition shall be interpreted, and all accounting determinations and computations set forth in this definition shall be made, in accordance with, those generally accepted ac counting principles applied in the preparation of the audited financial statements of DTAG and its subsidiaries as of December 31, 1996. (ii) On or before the date that is 60 days prior to each Reduction Date, pursuant to the terms of the Series 1997-1 Letter of Credit Agreement, the Lessees shall either (A) cause the delivery to the Series 1997-1 Letter of Credit Provider of an Addi tional Series 1997-1 Support Letter of Credit in an amount equal to the Support Reduc tion Amount with respect to such Reduction Date or (B) obtain credit support for the reimbursement of the Series 1997-1 Letter of Credit Provider with (1) the funding of a cash collateral account for the benefit of the Series 1997-1 Letter of Credit Provider with cash or (2) a surety bond or other similar arrangements (such other credit support, "Re- 7 11 duction Amount Credit Support"), in each case in an amount equal to the Support Reduc tion Amount for the related Reduction Date. Section 2.2. Fees. (a) Lessees shall pay a usage fee to Chrysler in an amount equal to [ ]% of the stated amount of any issued and outstanding Chrysler Letter of Credit. (b) Lessees shall pay to Chrysler a commitment fee equal to [ ]% of the excess, if any, of the available amount of the Chrysler Support Commitment over the stated amount of all outstanding Chrysler Support Letters of Credit. (c) The fees set forth in Section 2.2(a) and (b) shall be increased by 200 basis points during any period in which the Lessees have failed to provide the Series 1997-1 Letter of Credit Provider with any additional collateral or Additional Series 1997-1 Support Letter of Credit when required by Section 2.1(a) or any Reduction Amount Credit Support when required by Section 2.1(c)(ii). (d) all fees shall be payable to Chrysler quarterly in arrears on the last business day of each calendar quarter. Section 2.3. Reimbursement. (a) Each Lessee agrees to pay to Chrysler on de mand (which demand may be made upon DTAG) with respect to any Support Credit Disbursement, any Support Termination Disbursement or any Support Reduction Dis bursement, or any withdrawal from the Chrysler Support Cash Collateral Account re lating to a Series 1997-1 LOC Credit Disbursement, a Series 1997-1 LOC Termination Disbursement or a reduction in the Chrysler Support Commitment, in each case, on the date thereof (provided, that with respect to any Support Credit Disbursement that is with respect to a Series 1997-1 LOC Credit Disbursement for amounts owed by DTAG under Section [4.19] of the Series 1997-1 Supplement, such agreement is made solely by DTAG), (i) (A) with respect to any Support Credit Disbursement (including any with drawal from the Chrysler Support Cash Collateral Account relating to a Series 1997-1 LOC Credit Disbursement), an amount equal to the portion of such Support Credit Disbursement allocable to amounts due and payable by such Lessee under the Master Lease as determined by [the Trustee] upon any such demand by the Series 1997-1 Letter of Credit Provider or, in the event such Support Credit Disbursement is in respect of amounts owed by DTAG under Section [4.19] of the Series 1997-1 Supplement, an amount equal to such amount owed by DTAG, and (B) with respect to any Support Termination Disbursement or Support Reduction Disbursement (including any with drawal from the Chrysler Support Cash Collateral Account relating to a Series 1997-1 LOC Termination Disbursement or a reduction in the Chrysler Support Commitment), 8 12 jointly and severally, the full amount thereof upon any such demand by the Series 1997-1 Letter of Credit Provider, plus (ii) interest on any amount remaining unpaid by such Lessee or otherwise, as the case may be, to Chrysler under clause (i) above, from (and including) the date of such Support Credit Disbursement, Support Termination Dis bursement, Support Reduction Disbursement or withdrawal, as the case may be, until payment in full thereof (after as well as before judgment), at a rate equal to the Base Rate (as defined below) from time to time in effect, including paragraph (e) thereof) plus 200 basis points , such interest to payable on demand (which demand may be made upon DTAG with respect to any Lessee) or, if prior to such demand, on the third (3rd) Business Day of each calendar quarter. Interest accruing based on the Base Rate shall be computed on the basis of the actual number of days elapsed and a 365 (or, if applicable, 366) day year. "Base Rate" means, on any date, a fluctuating rate of interest per annum equal to the rate of interest published in the "Wall Street Journal" on such date as the prime rate for U.S. Dollar loans by major money center banks. [(b) Earnings from investments in the Series 1997-1 Cash Collateral Account shall be paid to Chrysler and the Additional Series 1997-1 Support Letter of Credit Providers on a pro rata basis based upon their respective contributions to such account (as determined by the Series 1997-1 Letter of Credit Provider) to the extent accruing on the amount of a Support Termination Disbursement by Chrysler or a similar disburse ment by an Additional Series 1997-1 Support Letter of Credit Provider in respect of a Series 1997-1 LOC Termination Disbursement. Once Chrysler has been reimbursed in full by the Lessees, it shall assign the right to receive such amounts to the Lessees. Any amounts (other than earnings on investments) released from the Series 1997-1 Cash Collateral Account in accordance with Section [4.21(d) or (e)] of the Series 1997-1 Supplement shall be paid to Chrysler and the Additional Series 1997-1 Support Letter of Credit Providers on a pro rata basis (as determined by the Series 1997-1 Letter of Credit Provider). Once Chrysler has been fully reimbursed by the Lessees for any Support Credit Disbursements or a Support Termination Disbursement or any Support Reduction Disbursement or Support Event of Default Disbursement by the Lessees, it shall assign the right to receive such amounts to the Lessees. Upon reimbursement in full to Chrysler and the Additional Series 1997-1 Support Letter of Credit Providers of any such dis bursement, amounts released from the Series 1997-1 Cash Collateral Account in ac cordance with Section [4.21(d) or (e)] of the Series 1997-1 Supplement shall be paid to the Lessees on a pro rata basis up to the amounts paid by the Lessees as reimbursement for such disbursements.] [Doesn't this go in the Series 1997-1 Letter of Credit Agreement which is binding on LOC provider or in Indenture?] [(c) After a Support Termination Disbursement or Support Event of Default Disbursement has been made, any withdrawals made by the Trustee from the Series 9 13 1997-1 Cash Collateral Account in respect of a Series 1997-1 Lease Payment Deficit shall be reimbursed to the Series 1997-1 Cash Collateral Account in accordance with Section [ ] of the Series 1997-1 Supplement.] [Doesn't this go in the Series 1997-1 Letter of Credit Agreement which is binding on LOC provider or in Indenture?] Section 2.4. No Liability of Chrysler. The Lessees and DTAG each acknowledge that Chrysler is not responsible for any risks of acts or omissions of the Series 1997-1 Letter of Credit Provider or any other beneficiary or transferee of the Chrysler Series 1997-1 Support Letter of Credit with respect to its use of the Chrysler Series 1997-1 Support Letter of Credit. In furtherance and not in limitation of the foregoing, Chrysler may accept documents that appear on their face, to be in order, without responsibility for further investigation. Section 2.5. Conditions Precedent to Issuance. (a) The following constitute conditions precedent to the obligation of Chrysler to execute and deliver to the Series 1997-1 Letter of Credit Provider the Chrysler Series 1997-1 Support Letter of Credit (provided, that such conditions will be deemed to be satisfied upon the execution and delivery of the Chrysler Series 1997-1 Support Letter of Credit): (i) On the date of the execution and delivery of the Chrysler Series 1997-1 Support Letter of Credit, all representations and warranties of the Lessees and DTAG contained in this Agreement, the Revolving Credit Agreement and in each other Related Document to which the Lessees or DTAG are a party (other than representations and warranties relating to Chrysler) shall be true and correct. (ii) Chrysler shall have received from each of the Lessees and DTAG (i) a copy of the resolutions of its Board of Directors or other governing body, certified as of the Series 1997-1 Closing Date by the secretary or assistant secretary thereof, authorizing the execution, delivery and performance of this Agreement (if applicable), the Loan Documents and the other Related Documents to which it is a party and (ii) an incumbency certificate thereof with respect to its officers, agents or other representatives authorized to execute this Agreement (if applicable). (iii) On the date of the execution and delivery of the Chrysler Series 1997-1 Support Letter of Credit, there shall be no action, suit, investigation, litigation or pro ceeding pending against or, to the knowledge of the Lessees or DTAG, threatened against any of the Lessees or DTAG before any court or arbitrator or any Governmental Autho rity which in any manner draws into question the legality, validity or enforceability of this Agreement or any other Related Document, or the ability of any Lessee or DTAG to 10 14 comply with any of the respective terms thereunder except to the extent that any such condition is reasonably unlikely to have a Material Adverse Effect. (iv) All consents and approvals necessary in connection with this Agree ment or the transactions contemplated hereby or thereby shall have been obtained and shall remain in effect except to the extent that the failure to do so is not reasonably likely to have a Material Adverse Effect. (v) On the date of the execution and delivery of the Chrysler Series 1997-1 Support Letter of Credit, there shall be no Event of Default under the Revolving Credit Agreement (as defined therein). (vi) Chrysler shall have received an opinion, dated the date hereof, from counsel for DTAG and the Lessees, addressing the due authorization, execution and de livery of this Agreement and the enforceability thereof against DTAG and the Lessees. (vii) The execution and delivery of documents (the "Chrysler Collateral Support Security Documents") in a form reasonably satisfactory to Chrysler which shall give Chrysler (a) a first-priority perfected lien on any "retained interest" of DTAG and its Subsidiaries in RCFC, which lien shall be pari passu with the lien of the Lenders thereon, (b) a "silent" subordinated perfected lien in all other assets of DTAG, the Lessees and their respective subsidiaries in which the Lenders have a senior perfected lien, and (c) a subordinated perfected lien in the assets pledged as security in respect of the MTN Pro gram or the CP Program, which lien shall be pari passu with the lien of the Lenders thereon. (b) The following constitute conditions precedent to the obligation of Chrysler to execute and deliver to the CP Program Letter of Credit Provider the Chrysler CP Program Support Letter of Credit (provided, that such conditions will be deemed to be satisfied upon the execution and delivery of the Chrysler CP Program Support Letter of Credit): (i) Execution by all parties hereto of a supplement to this agreement as set forth in Section 2.1(a) hereto. (ii) [ ] days notice from the CP Program Letter of Credit Provider to Chrysler, including the amount and terms of the requested Chrysler CP Program Support Letter of Credit. 11 15 (iii) such conditions set forth in paragraph (a) of this Section as made appli cable mutatis mutandis to the Chrysler CP Program Support Letter of Credit. (iv) The execution and delivery of such other opinions and documents as may reasonably be requested by Chrysler. Section 2.6. Obligation Absolute. The payment obligations of each Lessee and DTAG under this Agreement and any other agreement or instrument relating to the Chrysler Support Letters of Credit shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement and such other agreement or instrument notwithstanding any of the following: (a) any lack of validity or enforceability of this Agreement, any Chrysler Support Letters of Credit or any other Related Document; (b) any change in the time, manner or place of payment of, or in any other terms of, all or any of the obligations of any Lessee or DTAG in respect of any Chrysler Support Letters of Credit or any other amendment or waiver of, or any consent to departure from, all or any of the Related Documents; (c) the existence of any claim, set-off, defense or other right which any Lessee may have at any time against the Trustee, the Series 1997-1 Letter of Credit Provider or any other beneficiary or any transferee of a Chrysler Support Letter of Credit (or any persons or entities for whom the Trustee, the Series 1997-1 Letter of Credit Provider, any such beneficiary or any such transferee may be acting) or any other person or entity (other than Chrysler or any affiliate of Chrysler), whether in connection with this Agreement, the transactions contem plated hereby or by the Related Documents or any unrelated transaction; (d) any statement or any other document presented under a Chrysler Sup port Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (e) any statement or any other document presented under a Chrysler Sup port Letter of Credit proving to be insufficient in any respect; (f) payment by Chrysler under a Chrysler Support Letter of Credit against presentation of a draft or certificate which does not comply with the terms of a Chrysler Support Letter of Credit; or 12 16 (g) any exchange, release or non-perfection of any collateral, or any release or amendment or waiver of or consent to departure from any guarantee, for all or any of the obligations of a Lessee or DTAG in respect of a Chrysler Support Letter of Credit. Section 2.7. Guaranty. (a) Guaranty. In order to induce Chrysler to execute and deliver this Agreement and to issue the Chrysler Support Letters of Credit, and in consideration thereof, DTAG, in its capacity as the guarantor of the obligations of the Lessees hereunder (the "Guaran tor"), hereby (i) unconditionally and irrevocably guarantees to Chrysler 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 re ferred 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 con tained in this Section 2.7 (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 Chrysler, the Series 1997-1 Letter of Credit Provider or the Trustee assert or enforce any rights against any Lessee or any other person before or as a condition to the obligations of the Guarantor pursuant to this Guaranty. (b) 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 Chrysler may enforce any of its rights hereunder independently of any other right or remedy that Chrysler may at any time hold with respect to this Agreement or any security or other guaranty therefor. Without limiting the generality of the foregoing, Chrysler 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 Chrysler, 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. Chrysler's rights hereunder shall not be exhausted by any action taken by Chrysler until all Guaran teed Obligations have been fully paid and performed. 13 17 (c) Right to Amend this Agreement. The Guarantor authorizes Chrysler 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 Obliga tions 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 Obliga tions and any security or guaranties therefor, and apply any such security and direct the order or manner of sale thereof (and bid and purchase at any such sale), subject to the terms of the Intercreditor Agreement dated December __, 1997, between, DTAG, Dollar, Thrifty, Chrysler and Credit Suisse First Boston, as administrative agent and collateral agent; (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. (d) Waiver of Certain Rights by Guarantor. The Guarantor hereby waives each of the following to the fullest extent allowed by law: (i) any defense based upon: (A) the unenforceability or invalidity of any security or other guaranty for the Guaranteed Obligations or the lack of perfection or failure of priority of any security for the Guaranteed Obligations; or (B) any act or omission of Chrysler 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 (C) 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; (ii)any right (whether now or hereafter existing) to require Chrysler, as a condition to the enforcement of this Guaranty, to: (A) accelerate the Guaranteed Obligations; 14 18 (B) 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 (C) proceed against any Lessee, any other guarantor or any other Person, or proceed against or exhaust any security for the Guaranteed Obligations; (iii) presentment, demand, protest and notice of any kind, including without limitation notices of default and notice of acceptance of this Guaranty; (iv) all suretyship defenses and rights of every nature otherwise available under New York law and the laws of any other jurisdiction; and (v) all other rights and defenses the assertion or exercise of which would in any way diminish the liability of the Guarantor hereunder. (e) Guarantor to Pay Chrysler's Expenses. The Guarantor agrees to pay to Chrysler , on demand, all costs and expenses, including reasonable attorneys' and other professional and paraprofessional fees, incurred by Chrysler 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. (f) 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 Chrysler , upon an event of bankruptcy, dissolution, liquidation or reorganization of any Lessee or the Guarantor or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, any Lessee, the Guarantor, any other guarantor or any other Person, or any substantial part of their respective property, or otherwise, all as though such payment had not been made. ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS Section 3.1. Representations and Warranties of the Lessees and DTAG. Each of the Lessees hereby represents and warrants (which representations and warranties shall be deemed made on the Series 1997-1 Closing Date) to Chrysler, as to itself, and DTAG 15 19 represents and warrants (which representations and warranties shall be deemed made on the Series 1997-1 Closing Date) to Chrysler, as to itself and each of the Lessees, that: (a) Organization; Ownership; Power; Qualification. The Lessees and DTAG are each (i) a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and (ii) has the corporate power and authority to own its properties and to carry on its business as now being and hereafter proposed to be conducted. (b) Authorization; Enforceability. The Lessees and DTAG each has the corporate power and has taken all necessary corporate action to authorize it to execute, deliver and perform this Agreement and each of the Chrysler Credit Support Security Documents in accordance with its terms, and to consummate the transactions contemplated hereby. This Agreement and each of the Chrysler Credit Support Security Documents has been duly executed and delivered by each of such Lessees and DTAG and is a legal, valid and binding obligation of each of such Lessees and DTAG, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization and similar laws affecting creditors generally and by the availability of equitable remedies. (c) Compliance. (i) The execution, delivery and performance by each of such Lessees and DTAG of this Agreement and each of the Chrysler Credit Support Security Documents, and the consummation of the transactions contemplated hereby, do not and will not (A) require any consent, approval, authorization or registration not already obtained or effected, except where the failure to obtain any such consent, approval or authorization or to register is not reasonably likely to have a Material Adverse Effect, (B) violate any applicable law with respect to each of such Lessees which violation is reasonably likely to have a Material Adverse Effect, (C) conflict with, result in a breach of, or constitute a default under the certificate of incorporation or by-laws of any of the Lessees or DTAG, or under any indenture, agreement, or other instrument to which any of such Lessees or DTAG is a party or by which its properties may be bound, which conflict, breach or default is reasonably likely to have a Material Adverse Effect, or (d) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by any of such Lessees or DTAG except Permitted Liens. (d) Revolving Credit Agreement. Each of the representations and warranties under the Revolving Credit Agreement and the other Loan Documents are true and correct. 16 20 Section 3.2. Covenants of the Lessees and DTAG. So long as the Chrysler Support Commitment is still in full force and effect or any amount is owing to Chrysler hereunder, each of the Lessees and DTAG agrees that, unless at any time Chrysler shall otherwise expressly consent in writing, it will, and in the case of DTAG it will cause the Lessees to: (a) Preservation of Existence; Foreign qualification. Do and cause to be done at all times all things necessary to (i) maintain and preserve its corporate existence and (ii) be duly qualified to do business and in good standing as a foreign entity in each jurisdiction where the nature of its business makes such qualification necessary and the failure to so qualify is reasonably likely to have a Material Adverse Effect. (b) Accounting Methods; Financial Records. Maintain, and cause its material Subsidiaries to maintain, a system of accounting established and administered in accordance with GAAP, keep, and cause its material Subsidiaries to keep, adequate records and books of account in which complete entries will be made in accordance with such accounting principles and reflecting all transactions required to be reflected by such accounting principles and keep, and cause its material Subsidiaries to keep, accurate and complete records of the Lessees's properties and assets. (c) Financial Information, Reports, Notices, etc. Furnish or cause to be furnished to Chrysler financial statements, reports, notices and information as set forth in Section 8.1.1 of the Revolving Credit Agreement. (d) Performance and Compliance with Covenants Incorporated by Reference. Perform and comply with each of the covenants contained in the Revolving Credit Agreement (or any other financing arrangement which may replace the Revolving Credit Agreement) and the Master Leases (collectively, the "DTAG Financing Agreements") (e) No Amendment. Obtain the consent or approval of Chrysler (which shall not be unreasonably withheld) to (i) the terms of the initial CP Program Documents and (ii) the amendment of any of the Related Documents or any of the CP Program Documents. 17 21 (f) Board Representation. (i) Subject to its fiduciary duties, DTAG's Board of Directors will nominate any person designated by Chrysler for election at each meeting (or in each action by written consent in lieu of a meeting) of stockholders of DTAG for the election of directors; provided that such person (A) has recognized standing in the business community, (B) is not a former director, officer or employee of DTAG but may be an officer of Chrysler and its subsidiaries and (C) does not have a conflict of interest with DTAG; it being understood that DTAG agrees that Thomas Capo would be an acceptable Chrysler designee. The [Governance Committee] will fill any vacancy created on the Board of Directors as a result of the resignation or removal of a director designated by Chrysler with any person designated by Chrysler who satisfies the criteria set forth herein. (ii) Use its best efforts to cause the person nominated as provided in this Section 3.2(f) to be elected by the stockholders of DTAG, will solicit proxies in favor of such individual or any such successor and cause [its Governance Committee] to vote all proxies in which it has discretionary authority to exercise on behalf of such person at each meeting (or in each action by written consent in lieu of a meeting) of stockholders of DTAG. (g) Credit Support Event of Default; Remedies Upon Occurrence of Credit Support Event of Default. (i) A breach of any obligation hereunder, any Event of Default under the DTAG Financing Agreements or an Amortization Event shall constitute a Credit Support Event of Default. (ii) Upon the occurrence of a Credit Support Event of Default: (A) an amount equal to any undrawn portion of any Chrysler Support Letter of Credit outstanding shall, at the election of Chrysler without demand upon or notice to DTAG or any Lessee, be deemed to have been paid or disbursed (notwithstanding that such amount may not in fact have been so paid or disbursed), and, upon notification by Chrysler to DTAG, DTAG and the Lessees shall be immediately obligated to reimburse Chrysler the amount deemed to have been so paid or disbursed by Chrysler as if a demand had been made by Chrysler to DTAG under Section 2.2 hereof. 18 22 Any amounts so received by Chrysler from DTAG or the Lessees pursuant to this Section shall be held as collateral security for the repayment of DTAG's or the Lessees' obliga tions in connection with the Chrysler Support Letters of Credit (provided, that with respect to any Support Credit Disbursement that is with respect to a Series 1997-1 LOC Credit Disbursement for amounts owed by DTAG under Section [4.19] of the Series 1997-1 Supplement, such obligation is solely the obligation of DTAG). At any time when all Chrysler Support Letters of Credit shall terminate and all its obligations thereunder are either terminated or paid or reimbursed in full, (subject, however, to reinstatement in the event any payment in respect of such Letters of Credit is recovered in any manner from Chrysler), Chrysler will return to DTAG or the Lessees the aggregate amount deposited with Chrysler and not theretofore applied by Chrysler to any reimbursement obligation hereunder. At such time when all Credit Support Events of Default shall have been cured or waived, Chrysler shall return to DTAG and the Lessees all amounts then on deposit with Chrysler pursuant to this Section. Earnings on all amounts on deposit pursuant to this Section shall, until their application to any reimbursement obligation or their return to DTAG or the Lessees, as the case may be, shall be held by Chrysler as additional collateral security for the repayment of DTAG's or each Lessee's obligations in connection with the Letters of Credit issued by Chrysler. [(B) The Chrysler Support Commitment shall terminate;] (C) Subject to the terms of the Intercreditor Agreement Chrysler shall be entitled to exercise all of its remedies under the Credit Support Security Docu ments; and (D) Chrysler may exercise all other remedies available to it under law. Section 3.3. Chrysler Covenants. Chrysler covenants and agrees with the Lessees and DTAG that, on the Series 1997-1 Closing Date, it will provide to the Trus tee, DTAG, each of the Lessees, and the Series 1997-1 Letter of Credit Provider, the favorable written opinion of counsel to Chrysler, addressing the due authorization, execution and delivery of the Chrysler Series 1997-1 Support Letter of Credit and the enforceability thereof against Chrysler. 19 23 ARTICLE IV MISCELLANEOUS Section 4.1. Payments. (a) Unless otherwise specified herein, all payments to Chrysler hereunder shall be made in lawful currency of the United States and in immediately available funds prior to 11:00 a.m. (New York City time) on the date such payment is due by wire transfer to Chrysler, Account No. ________ at _____________, or to such other office or account maintained by Chrysler as Chrysler may direct. (b) Whenever any payment under this Agreement shall be stated to be due on a day which is not a Business Day, unless otherwise stated herein, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in computing interest, if any, in connection with such payment. Section 4.2. Notices. All notices, amendments, waivers, consents and other communications provided to any party hereto under this Agreement or any other Related Document shall be in writing and addressed, delivered or transmitted to such party at its address or facsimile number set forth below or at such other address or facsimile number as may be designated by such party in a notice to the other parties. Any notice, if mailed and property addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any notice, if transmitted by facsimile, shall be deemed given when transmitted upon receipt of electronic confirmation of transmission. If to Chrysler: Attention: Telephone: Telecopier: 20 24 If to the Series 1997-1 Letter of Credit Provider: Credit Suisse First Boston Eleven Madison Avenue New York, New York 10010 Attention: Telephone: Telecopier: If to DTAG: Attention: Telephone: Telecopier: If to any of the Lessees: To the address of such Lessee set forth in Schedule 1 hereof. Section 4.3. Amendments, etc. This Agreement and the rights and obligations of the parties hereunder may not be changed orally but only by an instrument in writing signed by each party hereto and shall be construed in accordance with and governed by the laws of the State of New York. In the event of any conflict between the provisions of this Agreement and the Chrysler Series 1997-1 Support Letter of Credit, the provisions of the Chrysler Series 1997-1 Support Letter of Credit shall control. Section 4.4. Consent to Jurisdiction. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST CHRYSLER , DTAG OR ANY LESSEE WITH RESPECT TO THIS AGREEMENT SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN ANY STATE OR (TO THE EXTENT PERMITTED BY LAW) FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT CHRYSLER , DTAG, AND THE LESSEES EACH ACCEPT FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND 21 25 UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH OF THE LESSEES AND DTAG AGREES THAT SERVICE UPON IT BY REGISTERED MAIL SHALL CONSTITUTE SERVICE OF PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY DTAG AND EACH OF THE LESSEES TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF CHRYSLER TO BRING PROCEEDINGS AGAINST THE LESSEES OR DTAG IN THE COURTS OF ANY OTHER JURISDICTION. Section 4.5. Waiver of Jury Trial. CHRYSLER , DTAG AND THE LESSEES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF CHRYSLER , DTAG OR THE LESSEES IN CONNECTION HEREWITH OR THEREWITH. CHRYSLER , THE LESSEES AND DTAG EACH ACKNOWLEDGE AND AGREE THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR CHRYSLER ENTERING INTO THIS AGREEMENT. Section 4.6. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE AN AGREEMENT MADE UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Section 4.7. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 4.8. Term. This Agreement shall remain in full force and effect until the reimbursement of all Support Credit Disbursements, Support Termination Disbursements, Support Reduction Disbursements and Support Event of Default 22 26 Disbursements, and the payment by DTAG and the Lessees of all other amounts payable hereunder, notwithstanding the earlier termination of the Chrysler Series 1997-1 Support Letter of Credit or any other form of credit support provided by Chrysler hereunder. Section 4.9. Successors and Assigns. This Agreement shall be binding upon Chrysler and its successors and assigns, DTAG and its successors and assignees and the Lessees and their successors and assigns; provided, however, that none of DTAG or the Lessees may transfer or assign any of its obligations, rights, or interests hereunder without the prior written consent of Chrysler. Section 4.10. Counterparts. This Agreement may be executed in any number of counterparts, and by the different parties hereto on the same or separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute one and the same agreement. Section 4.11. Further Assurances. DTAG and the Lessees each agree to do such further acts and things and to execute and deliver to Chrysler such additional assignments, agreements, powers and instruments as are reasonably required by Chrysler to carry into effect the purposes of this Agreement or to better assure and confirm to Chrysler its rights, powers and remedies hereunder. Section 4.12. Survival of Obligations. The obligations of DTAG and the Lessees under Sections 2.2, 2.6, 2.7, 4.1 and 4.2 shall in each case survive any termination of this Agreement, the payment in full of all obligations hereunder and the termination of the Chrysler Series 1997-1 Support Letter of Credit or any other form of credit support provided by Chrysler hereunder. Section 4.13. Obligation. Chrysler, DTAG and each of the Lessees each under stands and agrees that the Chrysler Support Letters of Credit is irrevocable and the obli gations of Chrysler thereunder shall be unaffected by any default hereunder. None of the failure of DTAG or any of the Lessees (or any person or organization acting on behalf of either) or the Trustee or the Series 1997-1 Letter of Credit Provider to take any action (whether required hereunder or under any other Related Document otherwise), nor any action taken by DTAG or any of the Lessees shall be asserted by Chrysler as a defense to payment under a Chrysler Support Letter of Credit (except for the failure of any docu ments presented thereunder to comply with the terms of a Chrysler Support Letter of Credit) or as the basis of a right of set off by Chrysler against its obligations to make any such payment. 23 27 Section 4.14. Headings. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. Section 4.15. Application of Funds. Upon receipt of the deposited funds from the Series 1997-1 Cash Collateral Account pursuant to Section [4.21] of the Series 1997- 1 Supplement, Chrysler shall apply such amounts to the payment in full of any and all obligations of the Lessees under or in respect of the Chrysler Series 1997-1 Support Letter of Credit hereunder; any amounts remaining thereafter shall be returned to the Lessees or to whomever is legally entitled thereto. Section 4.16. Subordination of Obligations Pursuant to Intercreditor and Subordination Agreement. The parties hereto hereby acknowledge and agree that the obligations of DTAG and each of the Lessees represented hereby are subject to the terms and provisions of the Intercreditor and Subordination Agreement which, among other things, contains provisions subordinating to the prior payment in full, in cash, of the obligations hereunder of DTAG and each of the Lessees to the obligations of DTAG and each of the Lessees to the holders of Senior Debt (as defined in the Intercreditor and Subordination Agreement) in the manner provided in the Intercreditor and Subordination Agreement, to which provisions each of the parties hereunder agrees. [Remainder of Page Intentionally Blank] 24 28 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized officers, as of the day and year first above written. CHRYSLER CORPORATION By:__________________________ Name: Title: DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. By: _________________________ Name: Title: S-1 29 LESSEES: DOLLAR RENT A CAR SYSTEMS, INC. By: _____________________________ Name: Title: THRIFTY RENT-A-CAR SYSTEM, INC. By: _____________________________ Name: Title: S-2 30 Exhibit A [Included for illustrative purposes; to be moved to 1997-1 Support of Letter of Credit Agreement] FORM OF CHRYSLER SERIES 1997-1 SUPPORT LETTER OF CREDIT [Disbursements. (a) Upon presentation by the Series 1997-1 Letter of Credit Provider to Chrysler of a certificate in the form of Annex A hereto (a "Support Credit Demand"), Chrysler shall make a disbursement (such disbursement, a "Support Credit Disbursement") in an amount equal to its Pro Rata Share (as defined below) of the amount drawn upon the Series 1997-1 Letter of Credit (as determined by the Series 1997-1 Letter of Credit Provider) as a Series 1997-1 LOC Credit Disbursement at the time, in the manner and to the account specified herein. "Pro Rata Share" means, for purposes of this Letter of Credit, with respect to Chrysler as of any date, a fraction (expressed as a percentage) obtained by dividing the Available Chrysler Support Amount as of such date by an amount equal to the sum of (i) the Available Chrysler Support Amount as of such date and (ii) the aggregate amount of the Support Letter of Credit Amounts of all the Additional Series 1997-1 Support Letter of Credit Providers under all Series 1997-1 Support Letters of Credit as of such date, provided that for purposes of calculating the Pro Rata Share with respect to Chrysler as of any date, the [Support Letter of Credit Amount (as defined in the related Series 1997-1 Support Letter of Credit) as of such date of any Additional Series 1997-1 Support Letter of Credit Provider who has not paid any Support Credit Demand, Support Termination Demand or Support Termination Demand for Nonextension (in each case as defined in the related Series 1997-1 Support Letter of Credit as of such date)]3 payable as of such date (and the Available Chrysler Support Amount as of such date if Chrysler has not paid any Support Credit Demand, Support Termination Demand or Support Reduction Demand (in each case as defined in Chrysler Series 1997-1 Support Letter of Credit) payable as of such date) shall be treated as reduced (for calculation purposes only) by the amount of such unpaid [Support Credit Demand, Support Termination Demand, Support Termination Demand for Nonextension or Support Reduction Demand], as the case may be, in making such calculation and shall not be treated as reinstated for purposes of such calculation unless and until the date as of which such Series 1997-1 Support Letter of Credit Provider or Chrysler, as the case may be, has paid such amount to the Series 1997-1 Letter of Credit Provider and has been _______________ 3. May need to provide alternative in the event no other Series 1997-1 Support Letters of Credit are in place on the effective date of this Agreement. (comment of Sal Guerrera) S-3 31 reimbursed by the Lessees or DTAG, as the case may be, for such amount (provided, that the foregoing calculation shall not in any manner reduce the undersigned's actual liability in respect of any failure to pay any such Support Credit Demand, Support Termination Demand or Support Reduction Demand, as the case may be). (b) Upon presentation by the Series 1997-1 Letter of Credit Provider to Chrysler of a certificate in the form of Annex B hereto (a "Support Termination Demand"), Chrysler shall make a disbursement in an amount equal to the Available Chrysler Support Amount on the date of such certificate (such disbursement, a "Support Termination Disbursement") in an amount equal to its Pro Rata Share of the amount drawn upon the Series 1997-1 Letter of Credit (as determined by the Series 1997-1 Letter of Credit Provider) as a Series 1997-1 LOC Termination Disbursement at the time, in the manner and to the account specified herein. [(c) Upon presentation by the Series 1997-1 Letter of Credit Provider to Chrysler of a certificate in the form of Annex C hereto (a "Support Reduction Demand"), Chrysler shall make a disbursement (such disbursement, a "Support Reduction Disbursement") at the time, in the manner and to the account specified herein.]4 (d) Upon presentation by the Series 1997-1 Letter of Credit Provider to Chrysler of a certificate in the form of Annex D hereto (a "Support Event of Default Demand"), Chrysler shall make a disbursement (such disbursement, a "Support Event of Default Disbursement") equal to then Available Chrysler Support Amount, which disbursement shall be deposited in a cash collateral account with the Series 1997-1 Letter of Credit Provider (the "Chrysler Support Cash Collateral Account"). When established, the Chrysler Support Cash Collateral Account shall function in all respects as the replacement for, and the equivalent of, the Chrysler Series 1997-1 Support Letter of Credit. Accordingly, following its creation, each reference to a draw on the Chrysler Series 1997-1 Support Letter of Credit shall refer to withdrawals from the Chrysler Support Cash Collateral Account and reference to similar terms shall mean and be a reference to actions taken with respect to the Chrysler Support Cash Collateral Account that corresponds to actions that otherwise would have been taken with respect to the Chrysler Series 1997-1 Support Letter of Credit.] ______________ 4. Chrysler should have the option to defer reduction in support of LOC to avoid this draw. S-4 EX-5 7 OPINION OF DEBEVOISE & PLIMPTON 1 EXHIBIT 5 [Debevoise & Plimpton Letterhead] December 15, 1997 Dollar Thrifty Automotive Group, Inc. 5330 East 31st Street Tulsa, Oklahoma 74135 Registration Statement on Form S-1 (Registration No. 333-39661) Ladies and Gentlemen: We have acted as counsel to Dollar Thrifty Automotive Group, Inc., a Delaware corporation (the "Company"), in connection with the preparation and filing with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "1933 Act"), of a Registration Statement on Form S-1 (Registration No. 333-39661) (the "Registration Statement"), relating to 22,500,000 shares of the Company's Common Stock, par value $.01 per share (the "Common Stock"), being offered by the Company, and an additional 3,375,000 shares solely to cover over-allotments (collectively, the "Shares"). In so acting, we have examined and relied upon the originals, or copies certified or otherwise identified to our satisfaction, of such records, documents, certificates and other instruments as in our judgment are necessary or appropriate to enable us to render the opinion expressed below. 2 Dollar Thrifty Automotive 2 December 15, 1997 Group, Inc. Based upon the foregoing, we are of the opinion that, upon issuance and delivery of the Shares and payment therefor in the manner described in the Registration Statement and in accordance with the terms of the underwriting agreements (the forms of which are being filed as Exhibits 1.1 and 1.2 to the Registration Statement), the Shares will be duly authorized, validly issued and outstanding, and fully paid and non-assessable. Our opinion expressed above is limited to the laws of the State of New York, the corporate laws of the State of Delaware and the Federal laws of the United States of America. We hereby consent to the filing of this opinion as an Exhibit to the Registration Statement and to the use of our name under the caption "LEGAL MATTERS" in the Prospectus. In giving such consent, we do not thereby concede that we are within the category of persons whose consent is required under Section 7 of the 1933 Act or the Rules and Regulations of the Commission thereunder. Very truly yours, /s/ Debevoise & Plimpton ----------------------------- EX-10.10 8 DOLLAR THRIFTY LONG-TERM INCENTIVE PLAN 1 EXHIBIT 10.10 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN 2 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN INDEX SECTION DESCRIPTION ------- ----------- 1 Purpose of the Plan 2 Definitions 3 Types of Awards Covered 4 Administration 5 Eligibility 6 Shares of Stock Subject to the Plan 7 Stock Options 8 Stock Appreciation Rights 9 Restricted Stock 10 Performance Awards 11 Other Stock-Based Incentive Awards 12 Exercise of Options 13 Rights in Event of Death or Disability 14 Award Agreements 15 Tax Withholding 16 Change of Control 17 Dilution or Other Adjustment 18 Transferability 19 Amendment or Termination 20 General Provisions 21 Plan Effective Date 22 Plan Termination 3 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN SECTION 1 PURPOSE OF THE PLAN 1.1 The Long-Term Incentive Plan, maintained by Dollar Thrifty Automotive Group, Inc., is intended to motivate key employees to enhance shareholder value by offering incentives to its key employees who are primarily responsible for the growth of the Company and to attract and retain qualified employees. SECTION 2 DEFINITIONS 2.1 Unless the context indicates otherwise, the following terms, when used in this Plan, shall have the meanings set forth below: a) "AWARD" shall mean grants or awards under this Plan in the form of Options, SARs, Restricted Stock, Performance Awards or other stock-based incentive awards. b) "BOARD" or "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company. c) "CHANGE OF CONTROL" shall be deemed to have taken place on an occurrence of an event as defined in Section 16 of this Plan. d) "CODE" shall mean the Internal Revenue Code of 1986 as it may be amended from time to time and related Treasury Regulations. e) "COMMITTEE" shall mean the Board, or any Committee comprised of two or more Outside Directors, that may be designated by the Board to administer the Plan, in accordance with Section 4 hereof. f) "COMMON STOCK" shall mean the common stock, par value $.01 per share, of the Company. g) "COMPANY" shall mean Dollar Thrifty Automotive Group, Inc. 4 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ h) "DEFERRED SHARES" shall mean an award made pursuant to Section 11 of the Plan of the right to receive Common Stock in lieu of cash thereof at the end of a specified time period. i) "DIRECTOR" shall mean any member of the Board. j) "DISABILITY" shall mean permanent and total disability within the meaning of Section 22(e)(3) of the Code. k) "EMPLOYEE" shall mean any full-time employee of the Company or its Subsidiaries (including Directors who are otherwise employed on a full-time basis by the Company or its Subsidiaries). l) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 as it may be amended from time to time. m) "FAIR MARKET VALUE" of the Common Stock on a given date shall be based upon either (i) if the Common Stock is listed on a national securities exchange or quoted in an interdealer quotation system, the last sales price or, if unavailable, the average of the closing bid and asked prices per share of the Common Stock on such date (or, if there was no trading or quotation in the Common Stock on such date, on the next preceding date on which there was trading or quotation) as provided by one of such organizations or (ii) if the Common Stock is not listed on a national securities exchange or quoted in an interdealer quotation system, the price will be equal to the Company's fair market value, as determined by the Committee in good faith based upon the best available facts and circumstances at the time. n) "GRANTEE" shall mean a person granted an Award under the Plan. o) "IMMEDIATE FAMILY" shall mean with respect to a given Grantee that Grantee's spouse, children, or grandchildren (including adopted children or grandchildren). p) "IPO DATE" shall mean the date of closing of the initial public offering of the Common Stock. q) "ISO" shall mean an Award granted pursuant to the Plan to purchase shares of Common Stock and is intended to qualify as an incentive stock option under Section 422 of the Code, as now or hereafter constituted. 2 5 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ r) "NON-EMPLOYEE DIRECTOR" shall mean a Director of the Company who is not an Employee nor has been an Employee at any time during the prior one-year period. s) "NQSO" shall mean an Award granted pursuant to the Plan to purchase shares of Common Stock and is not intended to qualify as an incentive stock option under Section 422 of the Code, as now or hereafter constituted. t) "OPTIONS" shall refer collectively to NQSOs and ISOs issued under and subject to the Plan. u) "OUTSIDE DIRECTOR" shall mean an outside director within the meaning of Section 162(m) of the Code and the regulations thereunder. v) "PERFORMANCE AWARDS" shall mean Awards under the Plan, payable in cash, Common Stock, other securities or other awards and shall confer on the holder thereof the right to receive payments, upon the achievement of such performance goals during such performance periods as the Committee shall establish. w) "PERMITTED TRANSFEREE" shall mean any individual or entity as defined in Section 18.2 of this Plan. x) "PLAN" shall mean this Dollar Thrifty Automotive Group, Inc. Long-Term Incentive Plan as set forth herein and as amended from time to time. y) "RESTRICTED STOCK" shall mean an Award of Common Stock subject to restrictions on transfer and/or such other restrictions on incidents of ownership as the Committee may determine. z) "RULES" shall mean Rule 16(b)(3) and any successor provisions promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act. aa) "SAR" shall mean an Award constituting the right to receive an amount payable in cash under Section 8 of this Plan. bb) "SUBSIDIARY OR SUBSIDIARIES" shall mean any entity or entities in which the Company owns a majority of the voting power. 3 6 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ cc) "TEN PERCENT SHAREHOLDER" shall mean any Grantee who owns more than 10% of the combined voting power of all classes of stock of the Company, within the meaning of Section 422 of the Code. SECTION 3 TYPES OF AWARDS COVERED 3.1 Awards granted, under the Plan may be: a) stock options ("Options") which may be designated as: (i) nonqualified stock options ("NQSOs"); or (ii) incentive stock options ("ISOs"); b) stock appreciation rights ("SARs"); c) restricted stock awards ("Restricted Stock"); d) performance awards ("Performance Awards"); or e) other forms of stock-based incentive awards. SECTION 4 ADMINISTRATION 4.1 The Plan shall be administered by the Committee. Subject to the provisions of the Plan and applicable law, the Committee shall have full discretion and the exclusive power to: a) select the Employees who will participate in the Plan and to make Awards to such Employees; b) determine the time at which such Awards shall be granted and any terms and conditions with respect to such Awards as shall not be inconsistent with the provisions of the Plan; and c) resolve all questions relating to the administration of the Plan, and applicable law. 4 7 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ 4.2 The interpretation of and application by the Committee of any provision of the Plan shall be final and conclusive. The Committee, in its sole discretion, may establish such rules and guidelines relating to the Plan as it may deem appropriate. 4.3 The Committee may employ such legal counsel, consultants, and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant and any computation received from any such consultant or agent. The Committee shall keep minutes of its actions under the Plan. 4.4 No member of the Board of Directors or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Awards granted hereunder. All members of the Committee shall be fully protected by the Company with respect to any such action, determination or interpretation. SECTION 5 ELIGIBILITY 5.1 The individuals who shall be eligible to participate in the Plan shall be Directors, officers, management, and such other key Employees of the Company and Subsidiaries as the Committee may from time to time determine. 5.2 An Employee or Director who has been granted an Award in one year shall not necessarily be entitled to be granted Awards in subsequent years. SECTION 6 SHARES OF STOCK SUBJECT TO THE PLAN 6.1 Awards may be granted with respect to the Common Stock of the Company. 6.2 Shares delivered upon exercise of the Awards, at the election of the Board of Directors or the Committee, may be Common Stock that is authorized but previously unissued, or stock reacquired by the Company, or both. 6.3 Subject to the provisions of Section 17, the maximum number of shares available for issuance under the Plan shall be ten percent (10%) of the total number of 5 8 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ shares of Common Stock outstanding as of the IPO Date. As such shares outstanding increase subsequent to the IPO Date (which limit shall be determined without considering as outstanding any shares that are the subject of any unexercised options under the Plan or any other option plan of the Company or any Shares owned by the Company or any of its subsidiaries) such shares available for issuance under the Plan shall increase proportionately; provided, however, that the maximum number of Shares for which ISOs may be granted under the Plan shall not exceed five percent (5%) of the Company's outstanding Shares (which number is subject to adjustment as provided in Section 17). The number of shares of Common Stock reserved under the Plan shall not be less than the total number of shares granted, whether exercised or unexercised, for all Awards under the Plan. 6.4 Notwithstanding any other provision of the Plan to the contrary, in no event may any Grantee in any calendar year receive more than 200,000 Options whether they be ISOs or NQSOs, subject to adjustments as provided in Section 17 of the Plan. 6.5 Notwithstanding any other provision of the Plan to the contrary, in no event may any Grantee in any calendar year receive more than 500,000 SARs, subject to adjustments as provided in Section 17 of the Plan. 6.6 Notwithstanding any other provision of the Plan to the contrary, in no event may any Grantee in any calendar year receive an award of Performance Awards having an aggregate maximum value as of their respective dates of grant in excess of $1,000,000. 6.7 Any shares of Common Stock awarded under the Plan, which Award for any reason expires or is terminated unexercised as to such shares, shall again be available for the grant of other Awards under the Plan; provided, however, that forfeited shares or other securities shall not be available for further Awards if the Grantee has realized any benefits of ownership from such shares. SECTION 7 STOCK OPTIONS 7.1 The Committee may grant Options, as follows, which shall be evidenced by a stock option agreement and may be designated as (i) NQSOs or (ii) ISOs: 6 9 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ a) NQSOS (i) An NQSO is a right to purchase a specified number of shares of Common Stock during such time as the Committee may determine, not to exceed ten years, at a price determined by the Committee that is not less than the Fair Market Value of the Common Stock on the date the option is granted; except that the price of an option granted upon completion of the initial public offering of the Common Stock may be the initial public offering price. (ii) The purchase price of the Common Stock subject to the NQSO may be paid in cash. At the discretion of the Committee, the purchase price may also be paid by the tender of Common Stock or through a combination of Common Stock and cash or through such other means as the Committee determines are consistent with the Plan's purpose and applicable law. No fractional shares of Common Stock will be issued or accepted. (iii) No NQSO may be exercised more than ten years after the date the NQSO is granted. (iv) Without limiting the foregoing, to the extent permitted by law (including relevant state law): A) the Committee may agree to accept, as full or partial payment of the purchase price of Common Stock issued upon the exercise of the NQSO, a promissory note of the person exercising the NQSO evidencing the person's obligation to make future cash payments to the Company, which promissory note shall be payable as determined by the Company (but in no event later than five years after the date thereof), shall be secured by a pledge of the shares of Common Stock purchased and shall bear interest at a rate established by the Committee; and B) the Committee may permit the person exercising the NQSO, either on a selective or aggregate basis, to simultaneously exercise the NQSO and sell the shares of Common Stock acquired, pursuant to a brokerage or similar arrangement approved in advance by the Committee, and use the proceeds 7 10 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ from sale as payment of the exercise price of the NQSO. b) ISOS ---- (i) No ISO may be granted under the Plan to a Non-Employee Director. (ii) The aggregate Fair Market Value (determined at the time of the grant of the Award) of the shares of Common Stock subject to ISOs which are exercisable by a Grantee for the first time during a particular calendar year shall not exceed $100,000. To the extent that ISOs granted to a Grantee exceed the limitation set forth in the preceding sentence, ISOs granted last shall be treated as NQSOs. (iii) No ISO may be exercisable more than: A) in the case of a Grantee who is not a Ten Percent Shareholder, on the date the ISO is granted, ten years after the date the ISO is granted; and B) in the case of a Grantee who is a Ten Percent Shareholder, on the date the ISO is granted, five years after the date the ISO is granted. (iv) The exercise price of any ISO shall be determined by the Committee and shall not be less than: A) in the case of a Grantee who is not a Ten Percent Shareholder on the date the ISO is granted, the Fair Market Value of the Common Stock subject to the ISO on such date; and B) in the case of a Grantee who is a Ten Percent Shareholder on the date the ISO is granted, 110 percent of the Fair Market Value of the Common Stock subject to the ISO on such date. (v) The Committee may provide that the option price under an ISO may be paid by one or more of the methods available for paying the option price of an NQSO per Section 7.1(a)(iv). (vi) No ISO may be granted under the Plan without the approval of the Plan by holders of a majority of the outstanding voting shares of the 8 11 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ Company within twelve (12) months after the date of the Plan's adoption by the Board of Directors. 7.2 Unless specified otherwise by the Committee in the stock option agreement, and subject to Section 16.2, Options shall (i) become exercisable on the first anniversary date of the grant as to 20% of the number of shares covered by such Options, and as to an additional 20% of the number of shares covered by such Options on each of the next four anniversaries of the date of grant; provided, however that the Grantee, continues to be employed by the Company or one of its subsidiaries on such anniversary date, (ii) expire at the end of the maximum time frame allowable under Sections 7.1(a)(iii) or 7.1(b)(iii), as applicable, and (iii) be granted with an exercise price equal to the Fair Market Value, subject to Sections 7.1(a)(i) and 7.1(b)(iv). 7.3 The aggregate number of shares of Common Stock to be issued pursuant to ISOs shall not exceed five percent (5%) of the Company's outstanding shares as of the IPO Date except in the event of a change in capitalization as described in Section 17.2. SECTION 8 STOCK APPRECIATION RIGHTS 8.1 The amount payable with respect to each SAR shall be equal in value to the applicable percentage of the excess, if any, of the Fair Market Value of a share of Common Stock on the exercise date over the exercise price of the SAR. The exercise price of the SAR shall be determined by the Committee and shall not be less than the Fair Market Value of a share of Common Stock on the date the SAR is granted. SARs may be granted in tandem with an Option in which event the Grantee has the right to elect to exercise either the SAR or the Option. Upon a Grantee's election to exercise the Option or the SAR, the other Award is immediately terminated. SARs may also be granted as an independent Award. 8.2 In the case of an SAR granted in tandem with an ISO to an employee who is a Ten Percent Shareholder on the date of such grant, the amount payable with respect to each SAR shall be equal in value to the applicable percentage of the excess, if any, of the Fair Market Value of a share of Common Stock on the exercise date over the exercise price of the SAR, which exercise price shall not be less than 110 percent of the Fair Market Value of a share of Common Stock on the date the SAR is granted. 8.3 The applicable percentage and exercise price shall be established by the Committee at the time the SAR is granted. 9 12 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ SECTION 9 RESTRICTED STOCK 9.1 Restricted Stock is Common Stock of the Company that is issued to a Grantee at a price determined by the Committee, which price may be zero, and is subject to restrictions on transfer and/or such other restrictions on incidents of ownership as the Committee may determine. 9.2 Unless specified otherwise by the Committee in the award agreement, such shares of Common Stock granted to a Grantee as an Award shall vest on the first anniversary date of the grant as to 20% of the number of shares covered by such Restricted Stock, and as to an additional 20% of the number of shares covered by such Restricted Stock on each of the next four anniversaries of the date of grant; provided, however that the Grantee continues to be employed by the Company on such date. 9.3 The Committee may, in its discretion, provide for accelerated vesting of Restricted Stock upon the achievement of specified performance goals to be determined by the Committee. 9.4 Grantee may make the election under Section 83(b) of the Code with respect to any Award of Restricted Stock. SECTION 10 PERFORMANCE AWARDS 10.1 A Performance Award granted under the Plan: a) may be denominated or payable in cash, Common Stock, Restricted Stock, other securities, or other Awards; and b) shall confer on the holder thereof the right to receive payments, in whole or in part, upon the achievement of such performance goals during such performance periods as the Committee shall establish. 10.2 Subject to the terms of the Plan and any applicable Award agreement, the performance goals to be achieved during any performance period, the length of any performance period, the amount of any Performance Award granted and the amount of any payment or transfer to be made pursuant to any Performance Award shall be 10 13 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ determined by the Committee. Such performance goals that the Committee may select are earnings before interest and taxes, net income, gross sales, earnings per share, return on equity, return on investment, economic value added, performance against business plan and stock price appreciation. SECTION 11 OTHER STOCK-BASED INCENTIVE AWARDS 11.1 The Committee may from time to time grant Awards under this Plan that provide a Grantee the right to purchase Common Stock or units that are valued by reference to the Fair Market Value of the Common Stock (including, but not limited to, phantom securities or dividend equivalents) or to receive Deferred Shares which are stock-based incentive grants in lieu of a cash deferral of bonuses. Such Awards shall be in a form determined by the Committee (and may include terms contingent upon a change of control of the Company); provided that such Awards shall not be inconsistent with the terms and purposes of the Plan. 11.2 The Committee shall determine the price of any Award and may accept any lawful consideration. SECTION 12 EXERCISE OF OPTIONS 12.1 The Committee may provide for the exercise of Options in installments and upon such terms, conditions and restrictions as it may determine subject to applicable law and the other requirements of this Plan. 12.2 The Committee may provide for termination of an Option in the case of termination of employment or directorship or any other reason. 12.3 An Option granted hereunder shall be exercisable, in whole or in part, only by written notice delivered in person or by mail to the Secretary of the Company at its principal office, specifying the number of shares of Common Stock to be purchased and accompanied by payment thereof and otherwise in accordance with the stock option agreement pursuant to which the Option was granted. 11 14 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ SECTION 13 RIGHTS IN EVENT OF DEATH OR DISABILITY 13.1 A stock option or other award agreement may provide that, if a Grantee dies or becomes subject to a Disability prior to termination of his or her right to exercise an Option or SAR in accordance with the provisions of his or her stock option or award agreement, as applicable, without having totally exercised the Option or SAR, the Option or SAR may be exercised, to the extent that the shares with respect to the Option or SAR could have been exercised by the Grantee on the date of his or her death or Disability, by (i), in the event of the Grantee's death, the Grantee's estate or by the person who acquired the right to exercise the Option or SAR by bequest or inheritance or (ii), in the event of the Grantee's Disability, the Grantee or his or her personal representative. 13.2 In the event of the Grantee's death or Disability, the Option shall not be exercisable after the date of its expiration or more than six months from the date of the Grantee's death or Disability, whichever first occurs. 13.3 The date of Disability of a Grantee shall be determined by the Committee. SECTION 14 AWARD AGREEMENTS 14.1 Each Award granted under the Plan shall be evidenced by an award agreement between the Grantee to whom the Award is granted and the Company, setting forth the number of shares of Common Stock, SARs, or units subject to the Award and such other terms and conditions applicable to the Award not inconsistent with the Plan as the Committee may deem appropriate. 14.2 The award agreement for an Option shall also be referred to as a stock option agreement. SECTION 15 TAX WITHHOLDING 15.1 The Committee may establish such rules and procedures as it considers desirable in order to satisfy any obligation of the Company to withhold federal income taxes or other taxes with respect to any Award made under the Plan. Such rules and 12 15 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ procedures may provide: a) in the case of Awards paid in shares of Common Stock, the Company may withhold shares of Common Stock otherwise issuable upon exercise of such Award in order to satisfy withholding obligations, unless otherwise instructed by the Grantee or unless the Committee determines otherwise at the time of Grant; and b) in the case of an Award paid in cash, that the withholding obligation shall be satisfied by withholding the applicable amount and paying the net amount in cash to the Grantee; provided that the requirements of the Rules, to the extent applicable, must be satisfied with regard to any withholding pursuant to clause (a). SECTION 16 CHANGE OF CONTROL 16.1 For the purpose of the Plan, a "Change of Control" shall be deemed to have occurred if: a) the Company is merged or consolidated with another corporation and as a result of such merger or consolidation less than 50% of the outstanding voting securities of the surviving or resulting corporation are owned in the aggregate by the former shareholders of the Company; b) the Company sells, leases or exchanges all or substantially all of its assets to another corporation, which is not a wholly- owned Subsidiary of the Company; c) any person or "group" within the meaning of Section 13(d)(3) of the Exchange Act acquires (together with voting securities of the Company held by such person or "group") 50% or more of the outstanding voting securities of the Company (whether directly, indirectly, beneficially or of record) pursuant to any transaction or combination of transactions; d) there is a change of control of the Company of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act, whether or not the Company is then subject to such reporting requirements; or 13 16 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ e) the individuals who, at the beginning of any period of twelve consecutive months, constituted the Board of Directors cease, for any reason, to constitute at least a majority thereof, unless the nomination for election or election by the Company's shareholders of each new Director of the Company was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of such period or whose election or nomination for election was previously so approved. 16.2 In the event of a Change of Control affecting the Company, then, notwithstanding any provision of the Plan or of any provisions of any Award agreements entered into between the Company and any Grantee to the contrary, all Awards that have not expired and which are then held by any Grantee (or the person or persons to whom any deceased Grantee's rights have been transferred) shall, as of such Change of Control, become fully and immediately vested and exercisable and may be exercised for the remaining term of such Awards. SECTION 17 DILUTION OR OTHER ADJUSTMENT 17.1 If the Company is a party to any merger or consolidation, or undergoes any merger, consolidation, separation, reorganization, liquidation or the like, the Committee shall have the power to make arrangements, which shall be binding upon the holders of unexpired Awards, for the substitution of new Awards for, or the assumption by another corporation of, any unexpired Awards then outstanding hereunder. 17.2 In the event of a reclassification, stock split, combination of shares, separation (including a spin-off), dividend on shares of the Common Stock payable in stock or other similar change in capitalization or in the corporate structure of shares of the Common Stock, the Committee shall conclusively determine the appropriate adjustment in the option prices of outstanding Options, and the number and kind of shares or other securities as to which outstanding Awards shall be exercisable, and in the aggregate number of shares with respect to which Awards may be granted. 17.3 The number of shares reserved under the Plan shall adjust as the number of shares of Common Stock increase as provided in Section 6.3 of this Plan. 14 17 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ SECTION 18 TRANSFERABILITY 18.1 No Award, other than an NQSO, shall be sold, pledged, assigned, transferred, or encumbered by a Grantee other than by will or by the laws of descent and distribution. 18.2 Only an NQSO may be pledged, assigned, transferred, or gifted by a Grantee to another individual provided that the NQSO is pledged, assigned, transferred or gifted without consideration by a Grantee, subject to such rules as the Committee may adopt, to (i) a member of the Grantee's immediate family, (ii) a trust solely for the benefit of the Grantee and his or her immediate family or (iii) a partnership or limited liability company whose only partners or members are the Grantee and his or her Immediate Family (hereinafter referred to as the Permitted Transferee); provided that the Committee is notified in advance in writing of the terms and conditions of any proposed pledge, assignment, transfer, or gift and the Committee determines that such pledge, assignment, transfer or gift complies with the requirements of the Plan and the applicable Award agreement. 18.3 Any pledge, assignment or gift of an Award that does not comply with the provisions of the Plan and the applicable Award agreement shall be void and unenforceable against the Company. 18.4 All terms and conditions of a pledged, assigned, transferred or gifted Award shall apply to the beneficiary, executor, administrator, and Permitted Transferee, whether one or more, of the Grantee (including the beneficiary, executor and administrator of a permitted transferee), including the right to amend the applicable Award agreement; provided that the permitted transferee shall not pledge, assign, transfer, or gift an Award other than by will or by the laws of descent and distribution. SECTION 19 AMENDMENT OR TERMINATION 19.1 The Committee may at any time modify, amend, suspend or terminate the Plan; provided, that: a) such modification, amendment, suspension or termination shall not affect adversely any Awards previously granted without the consent of the holder thereof; and 15 18 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ b) no amendment, other than an amendment authorized by Section 17 or Section 6.3, may be made increasing the aggregate number of shares of the Common Stock with respect to which ISOs may be granted, or changing the class of employees eligible to receive ISOs hereunder, without the approval of the holders of a majority of the outstanding voting shares of the Company. SECTION 20 GENERAL PROVISIONS 20.1 No Awards may be exercised by a Grantee if such exercise, and the receipt of cash or stock thereunder, would be, in the opinion of counsel selected by the Company, contrary to law or the regulations of any duly constituted authority having jurisdiction over the Plan. 20.2 A bona fide leave of absence approved by a duly constituted officer of the Company shall not be considered interruption or termination of service of any Grantee for any purposes of the Plan or Awards granted thereunder, except that no Awards may be granted to an Employee while he or she is on a bona fide leave of absence. 20.3 No Grantee shall have any rights as a shareholder with respect to any shares subject to Awards granted to him or her under the Plan prior to the date as of which he or she is actually recorded as the holder of such shares upon the stock records of the Company. 20.4 Nothing contained in the Plan or in an Award agreement granted thereunder shall confer upon any Grantee any right to (i) continue in the employ of the Company or any of its Subsidiaries or continue serving on the Board of Directors of the Company or (ii) interfere in any way with the right of the Company or any of its Subsidiaries to terminate the Grantee's employment at any time or service on the Board. 20.5 Any Award agreement may provide that stock issued upon exercise of any Awards may be subject to such restrictions, including, without limitation, restrictions as to transferability and restrictions constituting substantial risks of forfeiture as the Committee may determine at the time such Award is granted. 20.6 The Committee may, in its discretion, grant registration rights (piggyback rights) as to Common Stock issued upon the grant or exercise of any Awards. 16 19 DOLLAR THRIFTY AUTOMOTIVE GROUP, INC. LONG-TERM INCENTIVE PLAN - ------------------------------------ SECTION 21 PLAN EFFECTIVE DATE 21.1 Subject to Section 7.1(b)(vi), the Plan shall become effective on the date of its adoption by the Board of Directors. SECTION 22 PLAN TERMINATION 22.1 No Award may be granted under the Plan on or after the date which is ten years following the effective date specified in Section 21, but Awards previously granted may be exercised in accordance with their terms. 17 EX-21 9 SUBSIDIARIES 1 EXHIBIT 21 The following are significant subsidiaries of the Company:
Name Jurisdiction Also "doing business as" Dollar Rent A Car Oklahoma Systems, Inc. Rental Car Finance Corporation Oklahoma Thrifty Rent-A-Car Oklahoma One franchise in Louisville, System, Inc. KY is doing business as "Drivewise" Thrifty Rental Finance Oklahoma Corporation
EX-23.1 10 CONSENT OF DELOITTE & TOUCHE LLP 1 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the use in this Amendment No. 2 to Registration Statement No. 333-39661 of Dollar Thrifty Automotive Group, Inc. and subsidiaries (successor to Pentastar Transportation Group, Inc. and subsidiaries) on Form S-1 of our report dated November 6, 1997, appearing in the Prospectus, which is part of this Registration Statement, and of our report dated November 6, 1997 relating to the financial statement schedule appearing elsewhere in this Registration Statement. We also consent to the reference to us under the heading "Experts" in such Prospectus. /s/ Deloitte & Touche LLP December __, 1997 Tulsa, Oklahoma EX-24 11 POWERS OF ATTORNEY 1 EXHIBIT 24 POWERS OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Dollar Thrifty Automotive Group, Inc. hereby constitutes and appoints Steven B. Hildebrand and Stephen W. Ray, or any one or more of them, to be his agent, proxy, and attorney-in-fact, or sign and execute in his name, place, and stead and on his behalf, and to file with the Securities and Exchange Commission, a Registration Statement on Form S-1 under the Securities Act of 1933, as amended, with respect to shares of Common Stock of Dollar Thrifty Automotive Group, Inc. that may be offered for sale from time to time, and any and all amendments to such Registration Statement that may be necessary or desirable, hereby approving, ratifying and confirming all acts that the aforesaid agents, proxies and attorneys-in-fact or any one of them do on his behalf pursuant to this power. IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this 15th day of December, 1997. /s/ Edward C. Lumley ---------------------------- Edward C. Lumley 2 EXHIBIT 24 POWERS OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Dollar Thrifty Automotive Group, Inc. hereby constitutes and appoints Steven B. Hildebrand and Stephen W. Ray, or any one or more of them, to be his agent, proxy, and attorney-in-fact, or sign and execute in his name, place, and stead and on his behalf, and to file with the Securities and Exchange Commission, a Registration Statement on Form S-1 under the Securities Act of 1933, as amended, with respect to shares of Common Stock of Dollar Thrifty Automotive Group, Inc. that may be offered for sale from time to time, and any and all amendments to such Registration Statement that may be necessary or desirable, hereby approving, ratifying and confirming all acts that the aforesaid agents, proxies and attorneys-in-fact or any one of them do on his behalf pursuant to this power. IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this 15th day of December, 1997. /s/ Edward J. Hogan ---------------------------- Edward J. Hogan 3 EXHIBIT 24 POWERS OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Dollar Thrifty Automotive Group, Inc. hereby constitutes and appoints Steven B. Hildebrand and Stephen W. Ray, or any one or more of them, to be his agent, proxy, and attorney-in-fact, or sign and execute in his name, place, and stead and on his behalf, and to file with the Securities and Exchange Commission, a Registration Statement on Form S-1 under the Securities Act of 1933, as amended, with respect to shares of Common Stock of Dollar Thrifty Automotive Group, Inc. that may be offered for sale from time to time, and any and all amendments to such Registration Statement that may be necessary or desirable, hereby approving, ratifying and confirming all acts that the aforesaid agents, proxies and attorneys-in-fact or any one of them do on his behalf pursuant to this power. IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this 15th day of December, 1997. /s/ John C. Pope ---------------------------- John C. Pope 4 EXHIBIT 24 POWERS OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Dollar Thrifty Automotive Group, Inc. hereby constitutes and appoints Steven B. Hildebrand and Stephen W. Ray, or any one or more of them, to be his agent, proxy, and attorney-in-fact, or sign and execute in his name, place, and stead and on his behalf, and to file with the Securities and Exchange Commission, a Registration Statement on Form S-1 under the Securities Act of 1933, as amended, with respect to shares of Common Stock of Dollar Thrifty Automotive Group, Inc. that may be offered for sale from time to time, and any and all amendments to such Registration Statement that may be necessary or desirable, hereby approving, ratifying and confirming all acts that the aforesaid agents, proxies and attorneys-in-fact or any one of them do on his behalf pursuant to this power. IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this 15th day of December, 1997. /s/ John P. Tierney ---------------------------- John P. Tierney 5 EXHIBIT 24 POWERS OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Dollar Thrifty Automotive Group, Inc. hereby constitutes and appoints Steven B. Hildebrand and Stephen W. Ray, or any one or more of them, to be his agent, proxy, and attorney-in-fact, or sign and execute in his name, place, and stead and on his behalf, and to file with the Securities and Exchange Commission, a Registration Statement on Form S-1 under the Securities Act of 1933, as amended, with respect to shares of Common Stock of Dollar Thrifty Automotive Group, Inc. that may be offered for sale from time to time, and any and all amendments to such Registration Statement that may be necessary or desirable, hereby approving, ratifying and confirming all acts that the aforesaid agents, proxies and attorneys-in-fact or any one of them do on his behalf pursuant to this power. IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this 15th day of December, 1997. /s/ Edward L. Wax ---------------------------- Edward L. Wax -----END PRIVACY-ENHANCED MESSAGE-----