Exhibit
10.4
PARENT
GUARANTEE
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 20
th 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:
" 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.
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 sue 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.
Subject to the provisions hereof, the liability
of the Guarantor hereunder shall be absolute and unconditional
irrespective of:
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(a)
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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;
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(b)
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any change in
the name, objects, capital, constating documents or by-laws of a
General Partner or Avis Budget Car Rental Canada ULC;
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(c)
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the invalidity,
unenforceability, irregularity, informality or illegality, in whole
or in part, of the LP Agreement or the CCRG Undertaking;
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(d)
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any
amalgamation, merger or reorganization of a General Partner or Avis
Budget Car Rental Canada ULC;
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(e)
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the bankruptcy,
winding-up, liquidation or dissolution of a General Partner or Avis
Budget Car Rental Canada ULC; or
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(f)
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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.
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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:
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(i)
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grant
extensions of time and other indulgences;
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(ii)
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take and give
up security interests;
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(iv)
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grant releases
and discharges, whether full, partial, conditional or
otherwise;
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(v)
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perfect, fail
to perfect or fail to maintain the perfection of any security
interests;
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(vi)
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release any
undertaking, property or assets charged by any security interests
to third parties;
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(vii)
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hold any monies
received from a General Partner or others;
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(viii)
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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;
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(b) each Limited Partner may upon written notice to
the Guarantor:
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(i)
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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;
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(ii)
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assign its own
rights or obligations under the LP Agreement and the CCRG
Undertaking in compliance with the LP Agreement; or
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(iii)
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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),
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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.
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.
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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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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;
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(d)
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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;
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(e)
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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;
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(f)
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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;
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(g)
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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;
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(h)
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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;
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(i)
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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
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(j)
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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.
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13.
Covenants of the
Guarantor .
The Guarantor covenants and agrees with each
Limited Partner that:
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(a)
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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.
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(b)
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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.
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(c)
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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.
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(d)
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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 unaudite
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