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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:
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 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.
3. Guarantee
Absolute .
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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(iii)
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accept compositions;
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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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and,
(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.
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:
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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
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