PARENT GUARANTEE
Exhibit
10.4
TO: BNY
TRUST
COMPANY OF CANADA, IN ITS CAPACITY AS TRUSTEE OF STARS TRUST (the "STARS
Limited Partner")
AND
TO: MONTREAL
TRUST COMPANY OF CANADA, IN ITS CAPACITY AS TRUSTEE OF BAY STREET FUNDING TRUST
(the "Bay
Street Limited Partner",
and
collectively with the STARS Limited Partner, the "Limited
Partners")
WHEREAS
the Limited Partners, Aviscar Inc. ("Avis")
and
Budgetcar Inc. ("Budget")
have
entered into a fourth amended and restated limited partnership agreement made
as
of the 20th
day of
April, 2005, as amended by amending agreements between the parties dated October
11, 2005, July 7, 2006 and December 11, 2006 (collectively, and, as further
amended, supplemented, modified, restated or replaced from time to time, the
"LP
Agreement")
relating to WTH Funding Limited Partnership (the "Partnership");
AND
WHEREAS, pursuant to the LP Agreement, Avis and Budget (collectively, the
"General Partners") have been appointed, and have agreed to act, as general
partners of the Partnership under, and in accordance with, the LP
Agreement;
AND
WHEREAS 1708437 Ontario Inc. has been appointed, and has agreed to act, as
a
standby general partner of the Partnership under, and in accordance with, the
LP
Agreement;
AND
WHEREAS Avis Budget Car Rental, LLC (the "Guarantor")
has
agreed to guarantee certain obligations of the General Partners on the terms
and
conditions set out herein;
NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the Limited Partners
entering into the LP Agreement and for other consideration (the receipt and
sufficiency of which are acknowledged), the Guarantor agrees with each Limited
Partner as follows:
1. Definitions.
(a) In
this
Guarantee:
"CCRG
Undertaking"
means
the undertaking of Avis Budget Car Rental Canada ULC (formerly CCRC Canada
ULC)
dated April 20, 2005 in favour of the Limited Partners and the
Partnership;
"Event
of Default"
shall
have the meaning ascribed thereto in Section 14;
"Guarantee"
means
this guarantee as amended, supplemented, modified, restated or replaced from
time to time;
"Guarantor
Financial Statements"
means
the audited balance sheet of the Guarantor as at September
30, 2006
and the
statements of income, retained earnings and sources and application of funds
for
the year ended December
31, 2005
and the
unaudited balance sheet of the Guarantor as at October
31, 2006 and
the
statements of income, retained earnings and sources and application of funds
for
the three-month period ending September
30, 2005
as
reported on Form 10-K and Form 10-Q, respectively, and, if applicable, Form
8-K,
filed with the Securities Exchange Commission;
"Guarantor's
Obligations"
means
all, and any part, of the guarantees, indemnities and obligations of the
Guarantor to each Limited Partner under this Guarantee;
"Indemnifiable
Tax"
means
any tax other than a tax that would not be imposed in respect of any payment
under this Guarantee but for a present or former connection between the
jurisdiction of the government or taxation authority imposing such tax and
the
relevant Limited Partner or a person related to such Limited Partner (including,
without limitation, a connection arising from such Limited Partner or related
person being or having been organized, present or engaged in a trade or business
in such jurisdiction, but excluding a connection arising solely from such
Limited Partner or related person having executed or delivered documents in
respect of, performed its obligations in respect of, or received payment of,
or
enforced, the Servicer Obligations);
"Servicer
Obligations"
means
the existing and future obligations of any kind of any of the General Partners
to each Limited Partner under those sections of the LP Agreement listed in
Schedule A annexed hereto and the obligations of Avis Budget Car Rental Canada
ULC to each Limited Partner pursuant to the CCRG Undertaking, whether direct
or
indirect, absolute or contingent, matured or not; and
"Subsidiary"
has the
meaning ascribed to such term in Section 2(5) of the Canada
Business Corporations Act,
as
amended.
(b) Unless
otherwise defined in subsection 1.1(a) (or elsewhere in this Guarantee), all
capitalized terms used in this Guarantee shall have the same meanings ascribed
thereto in, or incorporated by reference in, the LP Agreement.
2. Guarantee.
Subject
to the provisions hereof, the Guarantor unconditionally and irrevocably
guarantees in favour of each Limited Partner the punctual performance of all
of
the Servicer Obligations. The Guarantor also agrees to pay all reasonable costs
and expenses incurred by each Limited Partner in enforcing its rights under
this
Guarantee, including the reasonable fees and disbursements of counsel for such
Limited Partner incurred in connection with such enforcement (for greater
certainty, nothing in this Guarantee shall create or constitute (i) a monetary
payment, reimbursement or financial obligation of any kind on the Guarantor
unless the Guarantor fails to perform the aforementioned obligations pursuant
to
the terms hereof, in which case each Limited Partner shall be entitled to xxx
for monetary damages or (ii) an obligation of the Guarantor to perform any
future obligations which any Additional General Partner may owe to the Limited
Partner from time to time). If the expenses of any action, suit or proceeding
in
enforcing rights
under
this Guarantee are to be paid by the Guarantor, the Limited Partners shall
conduct such action, suit or proceeding through the same legal counsel
acceptable to both Limited Partners, provided that a Limited Partner may employ
separate legal counsel if representation by the same legal counsel would be
inappropriate due to actual or potential differing interests between the Limited
Partners.
3. Guarantee
Absolute.
Subject
to the provisions hereof, the liability of the Guarantor hereunder shall be
absolute and unconditional irrespective of:
| (a) |
any
amendment, release, discharge or waiver of, or any consent to departure
from or any extension of time, indulgence, compromise or dealing
in
respect of the LP Agreement or the CCRG
Undertaking;
|
| (b) |
any
change in the name, objects, capital, constating documents or by-laws
of a
General Partner or Avis Budget Car Rental Canada
ULC;
|
| (c) |
the
invalidity, unenforceability, irregularity, informality or illegality,
in
whole or in part, of the LP Agreement or the CCRG
Undertaking;
|
| (d) |
any
amalgamation, merger or reorganization of a General Partner or Avis
Budget
Car Rental Canada ULC;
|
| (e) |
the
bankruptcy, winding-up, liquidation or dissolution of a General Partner
or
Avis Budget Car Rental Canada ULC;
or
|
| (f) |
any
other circumstance whatsoever, whether similar or not to the foregoing,
which might in any manner or to any extent (A) vary the risk of the
Guarantor, (B) constitute a legal or equitable release or discharge
of the
Guarantor, or (C) otherwise diminish the liability of the Guarantor
hereunder.
|
The
Servicer Obligations are hereby guaranteed notwithstanding that it may have
been
in excess of the powers of a General Partner to enter into the LP Agreement
or
to perform its obligations thereunder or of Avis Budget Car Rental Canada ULC
to
enter into the CCRG Undertaking or to perform its obligations thereunder or
that
a General Partner or Avis Budget Car Rental Canada ULC shall be the subject of
any incapacity, disability or lack or limitation of status in respect thereof.
The Servicer Obligations are hereby guaranteed notwithstanding any incapacity,
disability or lack or limitation of status or power of a General Partner to
enter into the LP Agreement or to perform its obligations thereunder or of
Avis
Budget Car Rental Canada ULC to enter into the CCRG Undertaking or to perform
its obligations thereunder.
4. Dealings
with a General Partner and Others.
(a) Each
Limited Partner may, without giving notice (other than any notice required
to be
given to the Guarantor pursuant to the LP Agreement) to or obtaining the consent
of the Guarantor if no Trigger Event has occurred and each Limited Partner
may
upon written notice to the Guarantor if a Trigger Event has occurred and is
continuing:
| (i) |
grant
extensions of time and other
indulgences;
|
| (ii) |
take
and give up security interests;
|
| (iii) |
accept
compositions;
|
| (iv) |
grant
releases and discharges, whether full, partial, conditional or
otherwise;
|
| (v) |
perfect,
fail to perfect or fail to maintain the perfection of any security
interests;
|
| (vi) |
release
any undertaking, property or assets charged by any security interests
to
third parties;
|
| (vii) |
hold
any monies received from a General Partner or
others;
|
| (viii) |
apply
such monies against such part of the Servicer Obligations and change
any
such application in whole or in part at any time and from time to
time;
|
and,
(b) each
Limited Partner may upon written notice to the Guarantor:
| (i) |
consent
to or otherwise permit any assignment of a General Partner's rights
or
obligations under the LP Agreement in compliance with the LP
Agreement;
|
| (ii) |
assign
its own rights or obligations under the LP Agreement and the CCRG
Undertaking in compliance with the LP Agreement;
or
|
| (iii) |
delay
in taking any action or otherwise deal or fail to deal with a General
Partner, Avis Budget Car Rental Canada ULC or others (including the
Guarantor),
|
all
as
such Limited Partner may see fit, without prejudice to or in any way discharging
or diminishing the Guarantor's Obligations, and no loss of or in respect of
any
other guarantees, indemnities or security interests received by such Limited
Partner from any other persons in respect of the Servicer Obligations, whether
occasioned through the fault of such Limited Partner or otherwise, shall in
any
way discharge or diminish the Guarantor's Obligations.
5. Subrogation.
The
Guarantor shall have no right to be subrogated to the rights of a Limited
Partner under the LP Agreement or the CCRG Undertaking in respect of the
Guarantor's performance under this Guarantee in respect of the Servicer
Obligations until such time as all of the Servicer Obligations have been fully
performed or satisfied. In case of the liquidation,
dissolution,
winding-up, insolvency or bankruptcy of a General Partner or Avis Budget Car
Rental Canada ULC (whether voluntary or involuntary) or in the event that a
General Partner or Avis Budget Car Rental Canada ULC shall make an arrangement
or composition with its creditors, each Limited Partner shall have the right
to
rank in priority to the Guarantor for such Limited Partner's full claims in
respect of the Guarantor's Obligations not then satisfied, and if any amount
shall be paid to the Guarantor in such circumstances when all of the Guarantor's
Obligations have not been paid or satisfied in full, such amounts shall be
held
in trust for the benefit of such Limited Partner and shall be forthwith paid
to
such Limited Partner on account of such unpaid Guarantor's Obligations. If
the
Guarantor shall perform or satisfy any or all of the Servicer Obligations and
all of the Guarantor's Obligations shall have been performed or satisfied in
full, each Limited Partner will, at the Guarantor's request and expense,
forthwith execute and deliver to the Guarantor appropriate documents, without
recourse and without representation and warranty, necessary to evidence the
transfer by subrogation to the Guarantor of any of such Limited Partner's rights
under the LP Agreement or the CCRG Undertaking in respect of the Servicer
Obligations performed or satisfied by the Guarantor. If any amount shall be
paid
to the Guarantor on account of any subrogation rights at any time when all
of
the Guarantor's Obligations have not been paid or satisfied in full, such
amounts shall be held in trust for the benefit of each Limited Partner and
shall
be forthwith paid to such Limited Partner on account of such unpaid Guarantor's
Obligations.
6. Continuing
Guarantee.
This
Guarantee is a continuing guarantee and shall apply to and secure the
performance of any and all of the Servicer Obligations. This Guarantee may
not
be terminated or determined by the Guarantor at any time.
7. Performance
by the Guarantor.
Notwithstanding
Section 3, in honouring this Guarantee, the Guarantor shall be entitled to
perform or satisfy any Servicer Obligation on the same terms and conditions
and
subject to the same rights and limitations as would have been applicable to
the
carrying out of such obligations by a General Partner under the LP Agreement
or
by Avis Budget Car Rental Canada ULC under the CCRG Undertaking.
8. Notice
of Default.
If
a
General Partner or Avis Budget Car Rental Canada ULC defaults in the performance
of any of the Servicer Obligations and such default is continuing, each Limited
Partner is entitled to require the Guarantor to honour this Guarantee by
personally performing such Servicer Obligations forthwith. A Limited Partner
shall not be bound or obliged to pursue any remedy or exhaust its recourse
against a General Partner or Avis Budget Car Rental Canada ULC or any other
person or any securities in respect of such default before being entitled to
require the Guarantor to honour this Guarantee in respect of such Servicer
Obligation.
9. Additional
Guarantees.
This
Guarantee is in addition and without prejudice to any guarantees or securities
of any kind (including guarantees whether or not in the same form as this
Guarantee) now or hereafter held by a Limited Partner in respect of the Servicer
Obligations.
10. No
Waiver; Remedies.
No
Limited Partner shall by any act, delay, omission or otherwise be deemed to
have
waived any of its rights or remedies under this Guarantee and no waiver shall
be
valid unless it is in writing and signed by each Limited Partner, and then
only
to the extent therein set forth. A waiver by the Limited Partners of any right
or remedy under this Guarantee on any one occasion shall not be construed as
a
bar to any right or remedy which the Limited Partners would otherwise have
on
any future occasion. No failure to exercise nor any delay in exercising on
the
part of a Limited Partner any right, power or privilege under this Guarantee,
shall operate as a waiver thereof; nor shall any single or partial exercise
of
any right, power or privilege under this Guarantee preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies provided under this Guarantee are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by Applicable Law.
11. Release
and Discharge.
Once
all
of the Guarantor's Obligations have been performed or satisfied, this Guarantee
and the rights granted in it shall cease and be null and void, and each of
the
Limited Partners shall, at the request and at the expense of the Guarantor,
execute and deliver to the Guarantor the documents required to release and
discharge this Guarantee.
12. Representations
and Warranties of the Guarantor.
The
Guarantor represents and warrants to each Limited Partner on the date hereof
that:
| (a) |
Organization.
The Guarantor is a limited liability company validly existing under
the
laws of the State of Delaware and
has the power to own or lease its property, to carry on its business
as
now being conducted by it and to enter into this Guarantee and to
perform
its obligations hereunder;
|
| (b) |
Authorization.
This Guarantee has been duly authorized, executed and delivered by
the
Guarantor and is a legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor by each Limited Partner in accordance
with its terms, except to the extent that enforcement may be limited
by
bankruptcy, insolvency and other laws affecting the rights of creditors
generally and except that equitable remedies may be granted only
in the
discretion of a court of competent
jurisdiction;
|
| (c) |
No
Violation.
The execution and delivery of this Guarantee by the Guarantor and
the
consummation of the transactions herein provided for will not result
in
the
|
|
material
breach or material violation of any of the provisions of, or constitute
a
material default under, or conflict with or cause the acceleration
of any
obligation of the Guarantor under (i) any Contract to which the Guarantor
is a party or by which it is or its properties are bound, (ii) any
provision of the constating documents or by-laws or resolutions of
the
board of directors (or any committee thereof) or shareholders of
the
Guarantor, (iii) any judgment, decree, order or award of any court,
governmental body or arbitrator having jurisdiction over the Guarantor,
(iv) any licence, permit, approval, consent or authorization held
by the
Guarantor necessary to the operation of the Guarantor's business,
or (v)
any Applicable Law, which breach, violation, default, conflict or
acceleration could reasonably be expected to have a material adverse
effect on the Guarantor;
|
| (d) |
No
Litigation, Etc.
Other than as disclosed in the most recent Form 10-K, Form 10-Q and,
if
applicable, Form 8-K, filed by the Guarantor with the Securities
Exchange
Commission, there are no material actions, suits, proceedings or
investigations commenced or, to the knowledge of the Guarantor,
contemplated or threatened against or affecting the Guarantor at
law or in
equity before or by any governmental department, commission, board,
bureau, court, agency, arbitrator or instrumentality, domestic or
foreign,
of any kind, which in any case would prevent or hinder the consummation
of
the transactions contemplated by this Guarantee or which could reasonably
be expected to have a material adverse effect on the
Guarantor;
|
| (e) |
Guarantor
Financial Statements.
The Guarantor Financial Statements have been prepared in accordance
with
U.S. GAAP and present fairly and disclose in all material respects
the
financial condition, assets and liabilities of the Guarantor as at
the
respective dates of the Guarantor Financial Statements and the sales,
earnings and results of operations for the Guarantor for the respective
periods covered by the Guarantor Financial Statements. There has
been no
material adverse change in the results of operations, financial position
or condition of the Guarantor since the date of the most recent balance
sheet forming part of the Guarantor Financial
Statements;
|
| (f) |
Compliance
with Applicable Laws.
The Guarantor has conducted and is conducting its business in compliance
with all Applicable Laws of each jurisdiction in which any material
portion of its business is carried on and has all required licences,
permits, registrations and qualifications under the laws of each
such
jurisdiction to carry on its business, except to the extent that
failure
to so conduct its business or to have such licences, permits,
registrations or qualifications could not reasonably be expected
to have a
material adverse effect on the
Guarantor;
|
| (g) |
Consents
and Approvals.
There is no requirement to make any filing with, give any notice
to or to
obtain a licence, permit, certificate, registration, authorization,
consent or approval of, any governmental or regulatory authority
as a
condition to the lawful consummation of the transactions contemplated
by
this Guarantee the failure of which would have a material adverse
effect
on the Guarantor;
|
| (h) |
Solvency,
Etc.
The Guarantor is not insolvent and has not (i) admitted its inability
to
pay its debts generally as they become due or failed to pay its debts
generally as they become due, (ii) proposed a compromise or arrangement
to
its creditors, (iii) had any petition for a receiving order or bankruptcy
filed against it, (iv) consented to have itself declared bankrupt
or wound
up, (v) consented to have a receiver, liquidator or trustee appointed
over
any part of its assets, (vi) had any encumbrancer take possession
of any
of its property, (vii) had any execution or distress become enforceable
or
become levied upon any of its property which could reasonably be
expected
to have a material adverse effect on the ability of the Guarantor
to carry
out its obligations hereunder, or (viii) had any unsatisfied judgment
outstanding against it for more than 15 days which could reasonably
be
expected to have a material adverse effect on the ability of the
Guarantor
to carry out its obligations
hereunder;
|
| (i) |
Ownership
of General Partners and Avis Budget Car Rental Canada
ULC.
The Guarantor directly or indirectly owns all of the issued and
outstanding shares of each General Partner and Avis Budget Car Rental
Canada ULC; and
|
| (j) |
Full
Disclosure.
Neither this Guarantee nor any document to be delivered by the Guarantor
nor any certificate, report, statement or other document furnished
by the
Guarantor to the Limited Partners, the Securitization Agents or the
Rating
Agency in connection with the negotiation of this Guarantee contains
or
will contain any untrue statement of a material fact or omits or
will omit
to state a material fact necessary to make the statements contained
herein
or therein not misleading.
|
13. Covenants
of the Guarantor.
The
Guarantor covenants and agrees with each Limited Partner that:
| (a) |
The
Guarantor shall preserve and maintain its existence (except in the
case of
a merger, consolidation, dissolution or liquidation if the surviving
entity assumes all of the Guarantor's obligations hereunder), rights,
franchises and privileges and shall qualify and remain qualified
to carry
on business in each jurisdiction in which the failure to do so would
have
a material adverse effect on the Guarantor; provided, however, nothing
in
this clause shall prohibit or limit in any respect transactions in
the
ordinary course of business of the Guarantor or any of its
Subsidiaries.
|
| (b) |
Ownership
of General Partners and Avis Budget Car Rental Canada
ULC.
The Guarantor shall own, directly or indirectly, all of the shares
of each
General Partner and Avis Budget Car Rental Canada
ULC.
|
| (c) |
No
Defaults.
The Guarantor shall promptly notify the Rating Agency and each
Securitization Agent of any events of default of which it is aware
under
this Guarantee and any Trigger Events of which it is aware under
the LP
Agreement.
|
| (d) |
Guarantor
Financial Statements.
The Guarantor shall deliver to each Limited Partner within 60 days
of the
end of the first three fiscal quarters of each fiscal period of the
Guarantor a copy of the unaudited income and cash flow statements
and the
unaudited balance sheet of the Guarantor as at and for the period
then
ended and, as soon as available but no later than 120 days after
the end
of each fiscal year of the Guarantor a copy of the audited income
and cash
flow statements and the audited balance sheet of the Guarantor as
at and
for the period then ended.
|
14. Events
of Default.
The
occurrence or existence of any one or more of the following events or facts
which is continuing (each an "Event
of Default"),
shall
constitute an Event of Default under this Guarantee:
| (a) |
the
failure by the Guarantor to perform or observe any Guarantor Obligation,
provided that if such failure is capable of being remedied, such
failure
shall not constitute an Event of Default unless it remains unremedied
for
five Business Days after written notice from a Limited
Partner;
|
| (b) |
the
inaccuracy when made of a representation or warranty of the Guarantor
hereunder in any material respect, provided that if such inaccuracy
is
capable of being remedied, then it shall not constitute an Event
of
Default unless it remains unremedied for ten Business Days after
written
notice from a Limited Partner;
|
| (c) |
the
Guarantor failing to pay when due any obligation (the "underlying
obligation")
for a sum certain in excess of U.S.$25,000,000 and such failure continuing
for three Business Days after (i) written notice to the Guarantor
from the
party to whom the underlying obligation is owed if there is no grace
period applicable to the underlying obligation or (ii) the expiry
of any
grace period applicable to the underlying
obligation;
|
| (d) |
the
Guarantor failing generally to pay its debts as they become due or
admitting its inability to do so or making a general assignment for
the
benefit of creditors or being adjudicated a bankrupt or insolvent
or
seeking the protection of Insolvency Legislation;
or
|
| (e) |
proceedings
being taken by a third party against the Guarantor under Insolvency
Legislation or a receiver being appointed over, or execution being
levied
against, any material portion of the assets of the Guarantor, unless
such
proceedings are withdrawn or terminated with prejudice to the applicant
within 60 days of having been
commenced.
|
| 15. |
Guarantor
to Investigate Financial Condition of General Partners and Avis Budget Car
Rental Canada ULC.
|
The
Guarantor acknowledges that it has fully informed itself about the financial
condition of the General Partners. The Guarantor assumes full responsibility
for
keeping fully
informed
of the financial condition of the General Partners and Avis Budget Car Rental
Canada ULC and all other circumstances affecting each General Partner's or
Avis
Budget Car Rental Canada ULC's ability to perform the Servicer Obligations
and
the Guarantor's ability to perform its obligations hereunder, and agrees that
no
Limited Partner has a duty to report to the Guarantor any information which
such
Limited Partner has or receives about the financial condition of the General
Partners or Avis Budget Car Rental Canada ULC or any circumstances bearing
on
each General Partner's or Avis Budget Car Rental Canada ULC's ability to perform
the Servicer Obligations.
16. Termination.
This
Guarantee and the Guarantor's Obligations are irrevocable. The Guarantor may
not
determine its liability in respect of any of Servicer Obligations, including
Servicer Obligations incurred in the future.
17. Tax
Indemnity.
All
sums
payable by the Guarantor to each Limited Partner under this Guarantee shall
be
made free and clear of, and without deduction for, any taxes or duties of
whatsoever nature imposed, levied, collected, withheld or assessed by any
authority having power to tax, unless the withholding or deduction of such
taxes
or duties is required by Applicable Law. If the Guarantor is so required to
deduct, then it shall promptly notify the relevant Limited Partner of such
requirement and pay to the relevant taxing authority the full amount required
to
be deducted (including the amount required to be deducted from any additional
payment made pursuant to the immediately following clause) and, provided that
such taxes or duties are Indemnifiable Taxes, pay such additional amount as
will
result in the receipt by such Limited Partner of such amounts as would have
been
received by it had no such taxes or duties been required to be deducted. The
Guarantor will indemnify and hold harmless each Limited Partner from and against
any and all claims, damages and liabilities to which such Limited Partner may
become subject due to the failure of the Guarantor to deduct such taxes or
duties and remit same to any relevant taxing authority. The obligations under
this Section 17 shall survive the termination of this Guarantee.
18. Notices.
Any
notice, report, demand or other communication required or permitted to be given
or made hereunder shall be in writing and shall be sufficiently given or made
for all purposes if delivered personally or transmitted by fax to the party
or
to an officer of the party to whom the same is directed, addressed as
follows:
(a) if
to the
Guarantor, addressed to it at:
Avis
Budget Car Rental, LLC
0
Xxxxxx
Xxx
Xxxxxxxxxx,
X.X.
XXX
00000
Attention:
Treasurer
Fax
No.: (000)
000-0000
and
Attention: Legal
Department
Fax
No.: (000)
000-0000
with
a
copy to:
0
Xxxxxx
Xxx
Xxxxxxxxxx,
X.X.
XXX
00000
Attention:
Treasurer
Fax
No.: (000)
000-0000
(b) if
to the
STARS Limited Partner, addressed to it at:
STARS
Trust
c/o
BNY
Trust Company of Canada
0
Xxxx
Xxxxxx Xxxx
Xxxxx
0000
Xxxxxxx,
XX X0X 0X0
Attention: Xxxxxx
Xxxxx,
President
and Chief Executive Officer
Fax
No.: (000)
000-0000
and
Attention: Xxxxxxxx
Xxxxxxxx
Assistant
Treasurer and Trust Officer
Fax
No.: (000)
000-0000
with
a
copy to the STARS Securitization Agent, addressed to it at:
BMO
Xxxxxxx Xxxxx Inc.
1
First
Canadian Place
3rd
Floor
Podium
Toronto,
ON M5X 1H3
Attention: Executive
Managing Director,
Securitization
and Structured Finance
Fax
No.: (000)
000-0000
| (c) |
if
to the Bay Street Limited Partner, addressed to it
at:
|
Bay
Street Funding Trust
c/o
Montreal Trust Company of Canada
000
Xxxxxxxxxx Xxxxxx
00xx
Xxxxx
Xxxxxxx,
XX X0X 0X0
Attention: Account
Administrator
Fax
No.: (000)
000-0000
with
a
copy to the Bay Street Securitization Agent, addressed to it at:
Scotia
Capital Inc.
00xx
Xxxxx,
Xxxxxx Xxxxx
00
Xxxx
Xxxxxx Xxxx
P.O.
Box
4085, Station "A"
Toronto,
ON M5W 2X6
Attention: Director,
Securitization
Fax
No.: (000)
000-0000
(d) and
if to
the Rating Agency, addressed to it at:
Dominion
Bond Rating Service Limited
000
Xxxx
Xxxxxx Xxxx
Xxxxx
0000
Sun
Life
Centre, Xxxx Xxxxx
X.X.
Xxx
00
Xxxxxxx,
XX X0X 0X0
Attention: Executive
Vice President - Structured Finance
Fax
No.: (000)
000-0000
Any
such
notice that is given by personal delivery shall be deemed to have been received
on the day of actual delivery thereof and any notice given by fax shall be
deemed to have been received on the first Business Day after the transmittal
thereof. A Limited Partner may change its address or fax number by giving
written notice of such change to the Guarantor or the Guarantor may change
its
address or fax number by giving such notice thereof to each Limited
Partner.
19. Governing
Law; Submission to Jurisdiction; Waiver of Immunities.
This
Guarantee shall be governed by and construed in accordance with the laws of
the
Province of Ontario and of Canada applicable therein and shall be treated in
all
respects as an Ontario contract. The Guarantor hereby irrevocably submits to
the
non-exclusive jurisdiction of any court sitting in the Province of Ontario
in
any action or proceeding arising out of or relating to this Guarantee and the
Guarantor irrevocably agrees that all claims in respect of any such
action
or
proceeding may be heard and determined in such Ontario court. The Guarantor
hereby irrevocably waives, to the extent permitted by Applicable Law, the
forum
non conveniens
defence
to the maintenance of any such action or proceeding. The Guarantor agrees that
a
final judgment in any action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by Applicable Law. Nothing in this Section 19 shall affect the right
of
a Limited Partner to serve legal process in any other manner permitted by
Applicable Law or affect its right to bring any action or proceeding against
the
Guarantor or its property and assets in the courts of any other
jurisdiction.
20. Further
Assurances.
The
Guarantor shall at all times do, execute, acknowledge and deliver or cause
to be
done, executed, acknowledged or delivered all such further acts, deeds,
transfers, assignments and assurances as a Limited Partner may reasonably
require in order to give effect to the provisions of this
Guarantee.
21. Amendment
in Writing.
This
Guarantee may only be amended or supplemented by a written agreement signed
by
the Guarantor and each Limited Partner and agreed to in writing by the Rating
Agency.
22. Benefit
and Binding Nature; Assignment.
This
Guarantee shall bind the Guarantor, its successors and permitted assigns and
enure to the benefit of and be enforceable by each Limited Partner and its
respective successors and permitted assigns. None of the Limited Partners or
the
Guarantor may assign any of its rights or obligations under this Guarantee
without the prior written consent of the others.
23. Entire
Agreement.
This
Guarantee constitutes the entire agreement between the parties with respect
to
the subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether written or oral. There are no
representations, warranties, conditions, other agreements or acknowledgements,
whether direct or collateral, express or implied, that form part of or affect
this Guarantee except as specifically set forth herein. The execution of this
Guarantee has not been induced by, nor does the Guarantor rely upon or regard
as
material, any representations, warranties, conditions, other agreements or
acknowledgements expressly made in this Guarantee, or the agreements and other
documents to be delivered pursuant hereto.
24. Waiver
of Notice of Acceptance.
The
Guarantor waives notice of acceptance of this instrument.
IN
WITNESS WHEREOF the Guarantor has executed this Guarantee this 11th
day of
December, 2006.
|
AVIS
BUDGET CAR RENTAL, LLC
|
||||
|
by:
|
/s/
Xxxxx X. Xxxxxxx
|
|||
|
Name:
Xxxxx X. Xxxxxxx
Title:
Executive Vice President, Chief Financial Officer and Treasurer
|
SCHEDULE
A
SERVICER
OBLIGATIONS
2.8 Covenants
of General Partners
(a) Each
General Partner shall at all times during the term of the LP Agreement be a
direct or indirect wholly-owned subsidiary of, and be controlled in fact by,
the
Guarantor.
(b) Each
General Partner shall not, without the prior written consent of each Limited
Partner and the Rating Agency, have incurred or incur any liabilities or enter
into any obligations for or on behalf of the Partnership, otherwise than those
arising under or contemplated by the LP Agreement, the Assignment and Assumption
Agreement, any Licensee Vehicle Assignment Agreements and/or any other Contract
contemplated thereby or those arising in the normal course of the business
of
the Partnership.
(c) Each
General Partner shall promptly notify the Rating Agency and each Securitization
Agent of any defaults of which it is aware under the LP Agreement, the
Assignment and Assumption Agreement, any Licensee Vehicle Assignment Agreements,
this Guarantee or any Repurchase Agreement.
(d) The
General Partners shall cause the Partnership to be registered as a "vehicle
dealer" under any applicable motor vehicle dealer, highway traffic or other
legislation where such registration is reasonably determined by the General
Partners to be necessary or desirable. Such registrations are to be made
promptly and, in any event, within 90 days of the date of the LP Agreement
in
respect of the jurisdictions in which the Partnership carries on business as
of
such date, and within 60 days from the date on which the Partnership commences
to carry on business in respect of any other jurisdiction.
4.1 Estimation
Report
Not
later
than 12:00 noon (Toronto time) on each Estimation Date, the General Partners
shall provide to each Limited Partner an Estimation Report containing the items
set out in Section 4.1 of the LP Agreement.
4.2 Payout
Report
Not
later
than 12:00 noon (Toronto time) on each Payout Reporting Date, the General
Partners shall provide to each Limited Partner a Payout Report containing the
items set out in Section 4.2 of the LP Agreement.
4.3 Settlement
Report
Not
later
than 12:00 noon (Toronto time) on each Settlement Date, the General Partners
shall provide to each Limited Partner a Settlement Report containing the items
set out in Section 4.3 of the LP Agreement.
4.4 Collections
of Rental Revenues
Subject
to the following sentence, the General Partners shall deposit all Rental
Revenues into the Rental Account as promptly as possible upon receipt, and,
in
any event, no later than the first Business Day following receipt. So long
as no
Trigger Event has occurred and is continuing, notwithstanding the foregoing
sentence, the General Partners may make a single deposit of Rental Revenues
into
the Rental Account no later than 12:00 noon (Toronto time) on each Remittance
Date. All deposits of Rental Revenues into the Rental Account shall be made
in
immediately available funds.
4.5 Prepayments
So
long
as the General Partners are entitled to remit Rental Revenues on a monthly
basis, as opposed to a daily basis, pursuant to Section 4.4 of the LP Agreement,
the General Partners shall deposit into the Rental Account and the Vehicle
Account the respective amounts set out in Section 4.5 of the LP
Agreement.
4.6 Rental
Account
(a) The
General Partners shall manage for and in the name of Partnership the Rental
Account. The General Partners shall deposit all Rental Revenues as received
to
the Rental Account in accordance with Section 4.4 of the LP Agreement. The
General Partners shall deposit all Hedge Receipts as received to the Rental
Account.
(b) Subject
to Section 8.5 of the LP Agreement, on each Remittance Date, the General
Partners shall distribute cash from the Rental Account as set out in subsection
4.6(c) of the LP Agreement.
(c) Notwithstanding
subsection 4.6(c) of the LP Agreement, insofar as Expenses consist of VAT
payable upon the purchase of Partnership Vehicles, the General Partners shall
pay such Expenses directly from the VAT Account when the VAT Account is not
commingled with the Rental Account or from the Rental Account when the Rental
Account and the VAT Account are commingled, or may first transfer the necessary
amounts from the Rental Account or the VAT Account, as the case may be, to
the
Vehicle Account to be remitted with the purchase of new Vehicles.
4.7 Vehicle
Account
(a) The
General Partners shall manage for and in the name of Partnership, the Vehicle
Account.
(b) Subject
to Section 8.5 of the LP Agreement, the General Partners shall distribute cash
from the Vehicle Account as set out in subsection 4.7(b) of the LP
Agreement.
4.8 VAT
Account
The
General Partners shall manage for and in the name of the Partnership the VAT
Account. The General Partners shall deposit to the VAT Account all amounts
collected by
the
Partnership on behalf of a governmental authority in respect of VAT as a result
of the rental or sale of Vehicles by the Partnership or the provision of any
other goods or services by the Partnership and any amount received by the
Partnership from a governmental authority as a refund of VAT.
For
greater certainty, the obligations of the General Partners to make capital
contributions in the event of a shortfall as described in the Section 4.8 of
the
LP Agreement is not a Servicer Obligation.
4.9 Eligible
Investments
Pending
the distribution required or allowed in the LP Agreement, the General Partners
may use funds in the Rental Account, the Vehicle Account and the VAT Account
to
purchase Eligible Investments for the Partnership. The General Partners agree
to
ensure the amounts on deposit in such account shall be available in same day
funds on the Business Day immediately preceding such Remittance Date (except
that any amounts used to purchase Eligible Investments issued by BMO shall
be
made available in same day funds on the Remittance Date).
5.2 Powers
and Duties of General Partners
(a) In
managing the business and affairs of the Partnership, the General Partners
shall
utilize their own employees, business premises, owned or leased, and
communications and computer systems and these shall not be, and shall not be
held out to be, the employees, premises or systems of the
Partnership.
(b) The
General Partners shall exercise their powers and discharge their duties under
the LP Agreement, honestly, in good faith and in the best interest of the
Partnership and in connection therewith shall exercise the degree of care,
diligence and skill that a reasonably prudent Person would exercise in
comparable circumstances, but subject to the foregoing shall not be liable
to
the Limited Partners for any act, omission or error in judgment made in good
faith.
(c) Neither
the General Partners nor any Affiliate of the General Partners shall carry
on
any activities outside the Partnership in a manner detrimental to the interests
of the Partnership, including without limitation that neither the General
Partners nor any Affiliate of the General Partners shall directly or indirectly
own, invest in or operate a rental car business or businesses in Canada which
competes with the car rental business of the Partnership provided that the
Budget General Partner may have an interest in the Budget Vancouver licensee
or
such other entities that each Limited Partner approves, acting
reasonably.
(d) Unless
a
different standard is required by the terms of the LP Agreement, the General
Partners shall manage the business and affairs of the Partnership in a manner
consistent with the management by the Avis General Partner of its vehicle rental
business prior to June 1, 2004.
(e) Without
limiting the generality of Section 5.1 of the LP Agreement, the General Partners
shall have the full power and authority to, and shall, on behalf and in the
name
of the Partnership:
| (i) |
acquire,
insure and sell Vehicles;
|
| (ii) |
operate
the Rental Account, the Vehicle Account and the VAT
Account;
|
| (iii) |
pay
the Expenses;
|
| (iv) |
commence
or defend any action or proceeding in connection with the
Partnership;
|
| (v) |
file
on behalf of the Partnership returns required by any governmental
or like
authority and make all related remittances and receive all related
refunds
and credits;
|
| (vi) |
maintain
as valid and effective all registrations, qualifications, licences
and
permits necessary or desirable for the Partnership in the conduct
of its
business; and
|
| (vii) |
do
such other things as are in furtherance of or incidental to the business
of the Partnership or that are provided for in the LP
Agreement.
|
(f) The
General Partners shall take all actions required to qualify, continue and keep
in good standing the Partnership as a limited partnership and to maintain the
limited liability of each Limited Partner in each jurisdiction where the
Partnership may carry on business or own property and to cause the Partnership
to register as a "motor vehicle dealer" in those provinces of Canada where
it is
necessary or advisable for the Partnership to be so registered.
(g) The
General Partners shall enter into Vehicle Rental Agreements in their own names
on behalf of the Partnership as undisclosed principal.
(h) The
General Partners will, (i) in the conduct of the affairs of the Partnership,
put
all Approved Dealers, Manufacturers and other Persons with whom the Partnership
does business in its own name on notice that each Limited Partner is not liable
for the obligations the Partnership, and (ii) include in all Contracts entered
into in the name of the Partnership a notice or the provision to the effect
that
the Partnership is a limited partnership (each of which conditions may be
satisfied by contracting in the name of the Partnership as a limited
partnership).
(i) The
General Partners shall ensure at all times that the mix of Partnership Vehicles
are as set out in subsection 5.2(i) of the LP Agreement.
(j) In
buying
Vehicles for the Partnerships, other than pursuant to the Assignment and
Assumption Agreement, the General Partners shall buy such Vehicles in accordance
with subsection 5.2(j) of the LP Agreement.
(k) The
General Partners agree that in operating the business of the Partnership they
shall at all times in all material respects comply with and perform each term,
condition, representation, warranty and covenant required to be complied with
or
performed by the lessor under each Vehicle Rental Agreement and will not take
or
omit to take any action that would
cause
any
failure by the Partnership to so comply with and perform in all material
respects each such term, condition, representation, warranty and covenant
required to be complied with or performed by the lessor under each Vehicle
Rental Agreement.
(l) The
General Partners shall do or cause to be done all such acts and things as a
reasonable and prudent operator of a Vehicle rental business would do in order
to maintain, use, operate and manage the property, assets and undertaking of
such business which are necessary or of advantage to the proper conduct of
the
business including all such acts and things referred to in subsection 5.2(l)
of
the LP Agreement.
(m) The
General Partners shall at their own expense maintain the Partnership Vehicles
in
good repair, working order and condition and, in the case of a Vehicle subject
to a Repurchase Agreement, to the standard required by the relevant Repurchase
Agreement.
(n) The
General Partners shall indemnify and hold harmless the Partnership against
any
obligation of the Partnership to reimburse a Manufacturer for any allowance
or
rebate paid by a Manufacturer to a General Partner in connection with the sale
of Partnership Vehicles to the Partnership.
(o) The
General Partners shall at their own expense provide insurance for the business
of the Partnership and for the Partnership Vehicles, as set out in subsection
5.2(o) of the LP Agreement. The General Partners shall indemnify and hold
harmless the Partnership against all claims, losses and expenses within the
deductible amounts under such insurance policies.
(p) Each
General Partner shall continue to self insure and maintain adequate reserves
in
respect of such self insurance as set out in subsection 5.2(p) of the LP
Agreement.
5.3 Restrictions
on Operations and Activities
The
General Partners will manage and conduct all aspects of the day-to-day
operations and other activities of the Partnership, subject, however, to the
restrictions that are in Section 5.3 of the LP Agreement; and the Partnership's
sole assets being as set out in subsection 5.3(f) of the LP
Agreement.
5.4 Program
Negotiation Vehicles
The
General Partners shall deliver a signed copy of any letter of undertaking
referred to in subsection 5.4(a) of the LP Agreement to each Securitization
Agent and the Rating Agency as soon as reasonably practicable and, in any event,
prior to the Partnership purchasing Program Negotiation Vehicles from the
relevant Eligible Manufacturer.
5.5 Commingling
of Partnership Assets
Subject
to any monthly remittance of Rental Revenues pursuant to Section 4.4 of the
LP
Agreement, the funds and assets of the Partnership shall not be commingled
with
the funds or assets of any other Person (including those of the General
Partners).
6.1 Books
of Account
The
General Partners will keep and maintain full, complete and accurate books of
account and records of the business of the Partnership. The Partnership books
shall be kept at the principal office from time to time of the Avis General
Partner. During the existence of the Partnership and for a period of three
years
thereafter, such books of account and records shall be made available for
inspection by each Limited Partner or by its duly authorized representatives
during normal business hours at the principal office of the Avis General
Partner.
6.2 Annual
Report and Income Tax Information
(a) In
addition to the reports required by Article 4 of the LP Agreement, within 60
days after the end of each Fiscal Period, the General Partners shall deliver
to
each Limited Partner (i) an annual report in respect of such Fiscal Period
prepared in accordance with and containing the items set out in paragraph
6.2(a)(i) of the LP Agreement and (ii) information concerning the amount of
Taxable Income or Taxable Loss and credits and charges to capital accounts
allocated to each Limited Partner and such other information as is necessary
to
enable such Limited Partner to file income tax returns and partnership returns
with respect to such Limited Partner's income or loss from the Partnership
in
respect of such Fiscal Period.
(b) Within
120 days of the end of each Fiscal Period, the General Partners shall deliver
to
each Limited Partner the statements referred to in subparagraphs 6.2(a)(i)(A)
and (B) of the LP Agreement with the report of the Auditors
thereon.
6.3 Fleet
Reports
On
each
Settlement Date, the General Partners will make available a Fleet Report to
each
Limited Partner.
6.4 Financial
Reports of the Partnership
The
General Partners shall deliver to each Limited Partner within 60 days of the
end
of each of the first three fiscal quarters of each Fiscal Period a copy of
the
unaudited income and cash flow statements and the unaudited balance sheet of
the
Partnership as at and for the period then ended.
6.5 Financial
Report of the General Partners and Avis Budget Car Rental Canada
ULC
Each
General Partner shall deliver to each Limited Partner within 60 days of the
end
of each of the first three fiscal quarters of each fiscal period of such General
Partner a copy of the unaudited income and cash flow statements and the
unaudited balance sheet of such General Partner as at and for the period then
ended and, as soon as available but not later than 120 days after the end of
each fiscal period of such General Partner, a copy of the unaudited income
and
cash flow statements and the unaudited balance sheet of such General Partner
as
at and for the period then ended. Each General Partner shall cause Avis Budget
Car Rental Canada ULC to deliver to each Limited Partner within 60 days of
the
end of each of the first three fiscal quarters of each fiscal period of Avis
Budget Car Rental Canada ULC a copy of the unaudited income and cash flow
statements and the unaudited balance sheet of Avis Budget Car Rental
Canada
ULC as at and for the period then ended and, as soon as available but not later
than 120 days after the end of each fiscal period of Avis Budget Car Rental
Canada ULC, a copy of the audited income and cash flow statements and the
audited balance sheet of Avis Budget Car Rental Canada ULC as at and for the
period then ended.
6.6 Repurchase
Agreements
The
General Partners shall provide to each Securitization Agent and the Rating
Agency copies of all Repurchase Agreements entered into by the Partnership
promptly after they have been entered into by the Partnership and, in any event,
within 30 days after they have been entered into by the
Partnership.
8.5 Distribution
of Amounts in Accounts Upon Trigger Event
After
the
occurrence of a Trigger Event, the General Partners shall distribute cash from
the Rental Account and from the Vehicle Account as set out in Section 8.5 of
the
LP Agreement.
8.9 Liquidation
of the Partnership's Assets
In
connection with the dissolution of the Partnership, the General Partners shall
act as a receiver and liquidator of the assets of the Partnership and shall
settle the accounts of the Partnership and liquidate its assets, if
any.
9.1 Indemnification
by the General Partners
Without
limiting any other rights which the Limited Partners may have under the LP
Agreement or under Applicable Law, each General Partner agrees to indemnify
each
Limited Partner and its respective trustees, employees, officers, directors,
agents and assigns (collectively, the "Indemnified Parties") from and against
any and all damages, losses, claims, liabilities and related costs and expenses,
including reasonable legal fees and disbursements (all the foregoing being
collectively referred to as "Indemnified Amounts") awarded against or reasonably
incurred by any of the Indemnified Parties arising out of or as a result of
(a)
the liability of such Limited Partner not being limited in the manner provided
in Section 2.14 of the LP Agreement (unless the liability of such Limited
Partner is not so limited as a result of any act or omission of such Limited
Partner) or (b) a breach or violation of those sections of the LP Agreement
set
out in this Schedule A by a General Partner, excluding, however, damages,
losses, claims, liabilities, costs and expenses resulting from gross negligence
or wilful misconduct on the part of such Limited Partner. The obligations of
each General Partner in Section 9.1 of the LP Agreement shall survive any
termination thereof. Without limiting the generality of the foregoing but
subject to the exclusions referenced in (a) and (b), each General Partner shall
indemnify the Indemnified Parties for Indemnified Amounts awarded or incurred
as
aforesaid relating to or resulting from:
| (i) |
by
the General Partners pursuant thereto, which shall have been false,
incorrect or inaccurate in any material respect when
made;
|
|
by
the General Partners pursuant thereto, which shall have been false,
incorrect or inaccurate in any material respect when
made;
|
| (ii) |
the
failure of a General Partner to comply with any Applicable Law with
respect to any Partnership Vehicle or Vehicle Rental Agreement or
the
non-conformity of any Vehicle Rental Agreement with any Applicable
Law;
|
| (iii) |
any
claim for personal injury, death, property damage or product liability
which may arise by reason of, result from or be caused by, or relate
to
the use, operation, maintenance or ownership of, the Partnership
Vehicles;
and
|
| (iv) |
any
material failure of a General Partner to perform its covenants or
obligations set out in this Schedule A in accordance with the provisions
of the LP Agreement.
|
9.2 Notification
of Potential Liabilities
Each
of
the Partners will, upon learning of potential situations involving possible
liability under Article 9 of the LP Agreement, promptly notify the other
Partners thereof.
9.3 Litigation
At
the
request of a Limited Partner, each General Partner shall, at its expense,
co-operate with such Limited Partner in any action, suit or proceeding brought
by or against such Limited Partner relating to any of the transactions
contemplated by the LP Agreement, any Partnership Vehicles or Vehicle Rental
Agreements (other than an action, suit or proceeding by one Partner against
another Partner). In addition, each General Partner agrees to notify each
Limited Partner, at the General Partners' expense, promptly upon learning of
any
pending or threatened action, suit or proceeding, if the judgment or expenses
of
defending such action, suit or proceeding would be covered by Section 9.1 of
the
LP Agreement and (except for an action, suit or proceeding by one Partner
against another Partner) to consult with such Limited Partner, concerning the
defence and prior to settlement.
9.4 Tax
Indemnity
Each
General Partner agrees to defend and save the Indemnified Parties harmless
from
and against any and all liabilities arising out of the transactions contemplated
by the LP Agreement with respect to or resulting from any delay in paying or
any
omission to pay any Taxes otherwise required under the LP Agreement to be paid
or withheld and remitted by or on behalf of such General Partner on its own
behalf, on behalf of a Limited Partner, on behalf of the Partnership or on
behalf of any Vehicle rental customers. If such General Partner shall be
required by Applicable Law to deduct or withhold any Taxes from or in respect
of
any sum payable by or on behalf of the Partnership to a Limited Partner under
the LP Agreement or in connection with the execution, delivery, filing or
recording of the LP Agreement and of the other documents to be delivered under
the LP Agreement and the consummation of the transactions contemplated by the
LP
Agreement, or if a Limited Partner shall be required to pay any Taxes in respect
of any sums received by the LP from the Partnership under the LP
Agreement:
| (a) |
such
General Partner shall make such deductions or withholdings;
and
|
| (b) |
such
General Partner shall pay forthwith the full amount deducted or withheld
to the relevant taxation authority or other authority in accordance
with
Applicable Law and will provide to such Limited Partner copies of
such
forms as are required to be provided to such authority evidencing
the
payment by such General Partner.
|
9.7 Change
in Circumstances
If
any of
the circumstances set out in Section 9.7 of the LP Agreement occurs, the
Partnership shall, from time to time upon demand by the relevant Limited
Partner, pay to such Limited Partner or the applicable Affected Person,
simultaneously with the payment of the Funding Discount Amount or the Bond
Interest Amount, as the case may be, the amount of any such increased cost
incurred, expenses or liabilities incurred, reduction in amounts received or
receivable, reduction in rate of return or required payment made or to be
made.
