EXHIBIT 10.1
 
EXECUTION VERSION
 
AE ESCROW CORPORATION
(a Delaware corporation)
AVIS BUDGET GROUP, INC.
(a Delaware corporation)

 
$250,000,000 9.75% Senior Notes due 2020
 
 
Purchase Agreement
 
 
As of September 21, 2011
 
Morgan Stanley & Co. LLC 
 
As Representative of the
several Initial Purchasers listed
in Schedule 1 hereto
 
c/o Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
 
 
Ladies and Gentlemen:
 
 
AE Escrow Corporation, a Delaware corporation (the “Escrow Issuer”) and a
direct, wholly owned subsidiary of Avis Budget Car Rental, LLC, a Delaware
limited liability company ("ABCR"), proposes to issue and sell to the several
initial purchasers listed in Schedule 1 hereto (the "Initial Purchasers"), for
whom you are acting as representative (the "Representative"), $250,000,000
principal amount of its 9.75% Senior Notes due 2020 (the "Securities").  The
Securities will be issued pursuant to an Indenture to be dated as of October 3,
2011 (the "Indenture") between the Escrow Issuer and The Bank of Nova Scotia
Trust Company of New York, as trustee (the "Trustee").

 
The Securities are being issued and sold in connection with the acquisition (the
“Acquisition”) by ABCR of Avis Europe plc, a company organized and existing
under the laws of England and Wales (“Avis Europe”), pursuant to the
Implementation Agreement between Avis Europe and AE Consolidation Limited, a
company organized and existing under the laws of England and Wales and a
wholly-owned subsidiary of ABCR, dated as of June 14, 2011 (the “Implementation
Agreement”).  The net proceeds of the offering of the Securities will be used to
fund a portion of the purchase price for the Acquisition and related
transactions. Consideration for the Acquisition is expected to be posted to the
shareholders of Avis Europe on the Completion Date (as defined below).
 
 
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Prior to the Completion Date, the gross proceeds of the offering of the
Securities will be held in escrow pending the satisfaction of the conditions to
release the funds from the Escrow Account (as defined below) as set forth in the
Escrow Agreement (as defined below) (the date of the satisfaction of such
conditions, the “Completion Date”). On or prior to the Closing Date (as defined
in Section 2 below), Avis Budget Group, Inc. (the “Indirect Parent”) and the
Escrow Issuer will execute an escrow agreement, in the form and substance to be
agreed among the Indirect Parent, the Escrow Issuer, you, the Trustee and The
Bank of Nova Scotia Trust Company of New York, as escrow agent (the “Escrow
Agent”), which shall conform in all material respects with the description
thereof included in the Time of Sale Information and the Offering Memorandum
(the “Escrow Agreement”), and the Indirect Parent and/or the Escrow Issuer will
deposit or cause to be deposited with the Escrow Agent, in the account specified
in the Escrow Agreement (the “Escrow Account”) the gross proceeds of the
offering of the Securities (including an amount equal to the Initial Purchasers’
Discount (as defined below)), together with an additional $4,875,000, such that
the funds so deposited in the Escrow Account (the “Escrowed Funds”) are in an
amount sufficient to redeem the Securities in cash at a redemption price of 100%
of the gross proceeds of the Securities, plus accrued and unpaid interest on the
Securities from the Closing Date through (but not including) December 15,
2011.  The Securities will be redeemed pursuant to a special mandatory
redemption at a redemption price equal to 100% of the issue price of the
Securities, plus accrued and unpaid interest on the Securities from the Closing
Date through the date of redemption in the event that (a) the Escrow Agent has
not received, at or prior to 11:00 a.m. (New York City time) on December 13,
2011, an Officer’s Certificate from the Escrow Issuer and Indirect Parent
confirming that the conditions to the release of the Escrowed Funds have been
satisfied or if (b) prior to such date, the Escrow Agent has received an
Officer’s Certificate from each of the Escrow Issuer and Indirect Parent that
the Implementation Agreement has been terminated or that the conditions to the
release of the Escrowed Funds will not be satisfied.  The Escrow Agreement shall
provide that the Escrowed Funds shall only be released pursuant to the terms of
the Escrow Agreement.
 
On the Completion Date, each of ABCR and Avis Budget Finance, Inc., a Delaware
corporation and a wholly-owned subsidiary of ABCR ("Avis Finance" and
collectively with ABCR, the "Company"), Avis Budget Holdings, LLC, a Delaware
limited liability company (the “Direct Parent”) and each of the entities listed
in Schedule 2 hereto (collectively with the Indirect Parent and Direct Parent,
the “Guarantors”) shall execute and deliver a joinder agreement (the “Joinder
Agreement”) substantially in the form attached hereto as Exhibit D, whereby the
Company and each such Guarantor will agree to observe and fully perform all of
the rights, obligations and liabilities contemplated herein as if it were an
original signatory hereto.  The representations, warranties, authorizations,
acknowledgements, covenants and agreements under this Agreement of each Note
Party that enters into the Joinder Agreement shall not become effective until
the execution by each of them of the Joinder Agreement, at which time such
representations, warranties, authorizations, acknowledgments, covenants and
agreements shall become effective as if made on the date hereof pursuant to the
terms of the Joinder Agreement, and the Securities and the obligations under the
Indenture shall be assumed by the Company and the Securities shall be fully and
unconditionally guaranteed on an unsecured senior basis by each of the
Guarantors (the “Guarantees”); it being understood that the representations,
warranties, authorizations, acknowledgements, covenants and agreements of
Indirect Parent (including, without limitation, when using the terms “Guarantor”
or “Guarantors”) shall be effective on the date hereof.
 
 
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References to the “Issuer” refer (x) before the execution and delivery of the
Joinder Agreement by the Company, solely to Escrow Issuer and (y) following the
execution and delivery of the Joinder Agreement by the Company, to the
Company.  References to the “Note Parties” shall at all times refer collectively
to the Escrow Issuer, the Company and the Guarantors.
 
The Securities will be sold to the Initial Purchasers without being registered
under the Securities Act of 1933, as amended (the "Securities Act"), in reliance
upon an exemption therefrom.  The Escrow Issuer and the Indirect Parent have
prepared a preliminary offering memorandum dated September 14, 2011 (the
"Preliminary Offering Memorandum") and will prepare an offering memorandum dated
the date hereof (the "Offering Memorandum") setting forth information concerning
the Company, the Escrow Issuer, the Guarantors and the Securities.  Copies of
the Preliminary Offering Memorandum have been, and copies of the Offering
Memorandum will be, delivered by the Escrow Issuer to the Initial Purchasers
pursuant to the terms of this Agreement.  The Indirect Parent and the Issuer
hereby confirm that they have authorized the use of the Preliminary Offering
Memorandum, the other Time of Sale Information (as defined below) and the
Offering Memorandum in connection with the offering and resale of the Securities
by the Initial Purchasers in the manner contemplated by this
Agreement.  Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Preliminary Offering Memorandum.  References
herein to the "Preliminary Offering Memorandum," the "Time of Sale Information"
and the "Offering Memorandum" (each as defined below) shall be deemed to refer
to and include any document incorporated by reference therein.

At or prior to the time when sales of the Securities were first made (the “Time
of Sale”), the following information shall have been prepared (collectively, the
“Time of Sale Information”): the Preliminary Offering Memorandum as supplemented
and amended by the written communications listed on Annex A hereto.

Holders of the Securities (including the Initial Purchasers and their direct and
indirect transferees) will be entitled to the benefits of a Registration Rights
Agreement, to be dated the Closing Date (as defined below) and substantially in
the form to be agreed to by the Representative, Issuer and Indirect Parent,
which shall conform in all material respects with the description thereof
included in the Time of Sale Information and the Offering Memorandum (the
"Registration Rights Agreement"), pursuant to which the Issuer and the
Guarantors will agree to file one or more registration statements with the
Securities and Exchange Commission (the "Commission") providing for the
registration under the Securities Act of the Securities or the Exchange
Securities referred to (and as defined) in the Registration Rights Agreement.

On the Completion Date, (x) the Company and each Guarantor shall enter into a
supplemental indenture to the Indenture, a form of which is attached to the
Indenture (the “Supplemental Indenture”), pursuant to which it will become a
party to the Indenture and the Company will assume all obligations of the Escrow
Issuer under the Securities and (y) the Company and each Guarantor other than
Indirect Parent shall enter into a joinder to the Registration Rights Agreement,
a form of which is attached to the Registration Rights Agreement (the
“Registration Rights Agreement Joinder”).

 
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The Issuer and the Guarantors hereby confirm their agreement with the several
Initial Purchasers concerning the purchase and resale of the Securities, as
follows:
 
1. Purchase and Resale of the Securities.  (a)  The Issuer agrees to issue and
sell the Securities to the several Initial Purchasers as provided in this
Agreement, and each Initial Purchaser, on the basis of the representations,
warranties and agreements set forth herein and subject to the conditions set
forth herein, agrees, severally and not jointly, to purchase from the Issuer the
respective principal amount of Securities set forth opposite such Initial
Purchaser's name in Schedule 1 hereto at a price equal to 100% of the aggregate
principal amount of the Securities minus 2.25% (the “Initial Purchasers’
Discount”) of the aggregate principal amount of the Securities; provided that
the Initial Purchasers’ Discount shall not be deducted from the payment for the
Securities on the Closing Date and the amount thereof shall instead be deposited
in the Escrow Account  and be paid as provided in Section 2(c).  The Issuer will
not be obligated to deliver any of the Securities except upon payment for all
the Securities to be purchased as provided herein.
 
(b) The Issuer understands that the Initial Purchasers intend to offer the
Securities for resale on the terms set forth in the Time of Sale
Information.  Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
 
(i) it is a qualified institutional buyer within the meaning of Rule 144A under
the Securities Act (a "QIB") and an accredited investor within the meaning of
Rule 501(a) under the Securities Act;
 
(ii) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D under the Securities Act ("Regulation D") or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act; and
 
(iii) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Securities as part of its initial offering
except:
 
(A) within the United States to persons whom it reasonably believes to be QIBs
in transactions pursuant to Rule 144A under the Securities Act ("Rule 144A") and
in connection with each such sale, it has taken or will take reasonable steps to
ensure that the purchaser of the Securities is aware that such sale is being
made in reliance on Rule 144A; or
 
(B) in accordance with the restrictions set forth in Annex C hereto.
 
(c) Each Initial Purchaser acknowledges and agrees that the Issuer and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Sections 6(f)(i) and 6(g), counsel for the Issuer and counsel for the Initial
Purchasers, respectively, may rely upon the accuracy of the representations and
warranties of the Initial Purchasers, and compliance by the Initial Purchasers
with their agreements, contained in paragraph (b) above (including Annex C
hereto), and each Initial Purchaser hereby consents to such reliance.
 
 
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(d) The Issuer and Indirect Parent acknowledge and agree that the Initial
Purchasers may offer and sell Securities to or through any affiliate of an
Initial Purchaser and that any such affiliate may offer and sell Securities
purchased by it to or through any Initial Purchaser.
 
 
(e) The Issuer and the Guarantors acknowledge and agree that the Initial
Purchasers are acting solely in the capacity of an arm's length contractual
counterparty to the Issuer and the Guarantors with respect to the offering of
Securities contemplated hereby (including in connection with determining the
terms of the offering) and not as financial advisors or fiduciaries to, or
agents of, the Issuer, the Guarantors or any other person.  Additionally,
neither the Representative nor any other Initial Purchaser is advising the
Issuer, the Guarantors or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction.  The Issuer and the
Guarantors shall consult with their own advisors concerning such matters and
shall be responsible for making their own independent investigation and
appraisal of the transactions contemplated hereby, and neither the
Representative nor any other Initial Purchaser shall have any responsibility or
liability to the Issuer or the Guarantors with respect thereto. Any review by
the Representative or any Initial Purchaser of the Issuer, the Guarantors, and
the transactions contemplated hereby or other matters relating to such
transactions will be performed solely for the benefit of the Representative or
such Initial Purchaser, as the case may be, and shall not be on behalf of the
Issuer, the Guarantors or any other person.
 
2. Payment and Delivery.  (a)  Payment for and delivery of the Securities will
be made at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue,
New York, New York 10017 at 10:00 A.M., New York City time, on October 3, 2011,
or at such other time or place on the same or such other date, not later than
the fifth business day thereafter, as the Representative and the Issuer may
agree upon in writing.  The time and date of such payment and delivery is
referred to herein as the "Closing Date".
 
(b) Payment for the Securities shall be made by wire transfer in immediately
available funds to the Escrow Account against delivery to the nominee of The
Depository Trust Company, for the respective accounts of the several Initial
Purchasers, of one or more global notes representing the Securities
(collectively, the "Global Note"), with any transfer taxes payable in connection
with the sale of the Securities duly paid by the Issuer. The Global Note will be
made available for inspection by the Representative not later than 1:00 P.M.,
New York City time, on the business day prior to the Closing Date.
 
(c) The Escrow Agreement shall provide that, on the Completion Date, an amount
equal to the Initial Purchasers’ Discount shall be paid by wire transfer of
immediately available funds to the Initial Purchasers from the Escrow Account.
 
(d) If the Securities are subject to the Special Mandatory Redemption, on the
date of the Special Mandatory Redemption the Escrowed Funds shall be applied to
pay for the Special Mandatory Redemption and shall not be applied to pay the
Initial Purchasers the Initial Purchasers’ Discount.
 
3. Representations and Warranties of the Issuer and the Guarantors.  The Issuer
and the Guarantors jointly and severally represent and warrant to each Initial
Purchaser that:
 
 
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(a) Preliminary Offering Memorandum, Time of Sale Information and Offering
Memorandum.  The Preliminary Offering Memorandum, as of its date, did not, the
Time of Sale Information, at the Time of Sale, did not, and at the Closing Date,
will not, and the Offering Memorandum, in the form first used by the Initial
Purchasers to confirm sales of the Securities and as of the Closing Date, will
not, contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Issuer and the Guarantors  make no representation or warranty with respect to
any statements or omissions made in reliance upon and in conformity with
information relating to any Initial Purchaser furnished to the Issuer in writing
by such Initial Purchaser through the Representative expressly for use in the
Preliminary Offering Memorandum, the Time of Sale Information or the Offering
Memorandum, it being understood and agreed that the only such information
furnished by any Initial Purchaser consists of the information described as such
in Section 7(b) hereof.
 
(b) Additional Written Communications.  Other than the Preliminary Offering
Memorandum and the Offering Memorandum, the Note Parties (including their
respective agents and representatives, other than the Initial Purchasers in
their capacity as such) has not made, used, prepared, authorized, approved or
referred to and will not prepare, make, use, authorize, approve or refer to any
"written communication" (as defined in Rule 405 under the Securities Act) that
constitutes an offer to sell or solicitation of an offer to buy the Securities
(each such communication by the Note Parties or their respective agents and
representatives (other than a communication referred to in clauses (i), (ii),
(iii) and (iv) below), an "Issuer Written Communication") other than (i) the
Preliminary Offering Memorandum, (ii) the Offering Memorandum, (iii) the
documents listed on Annex A hereto, including a pricing supplement substantially
in the form of Annex B hereto, which constitute part of the Time of Sale
Information, (iv) each electronic road show and (v) any other written
communication approved in writing in advance by the Representative.  Each such
Issuer Written Communication, when taken together with all other Issuer Written
Communications used on or prior to the date of first use of such Issuer Written
Communication and the Time of Sale Information, did not, and at the Closing Date
will not, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided that the
Issuer and the Guarantors make no representation or warranty with respect to any
statements or omissions made in reliance upon and in conformity with information
relating to any Initial Purchaser furnished to the Issuer in writing by such
Initial Purchaser through the Representative expressly for use in any Issuer
Written Communication.
 
(c) Incorporated Documents.  The documents incorporated by reference in the
Offering Memorandum or the Time of Sale Information, to the extent filed with
the Commission conformed or will conform, as the case may be, in all material
respects to the requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder (collectively, the
"Exchange Act") and such documents did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
 
 
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(d) Financial Statements.  The financial statements and the related notes
thereto of the Indirect Parent, the Company and their respective subsidiaries
included or incorporated by reference in each of the Time of Sale Information
and the Offering Memorandum present fairly in all material respects the
consolidated financial position of the Indirect Parent, the Company and their
respective subsidiaries as of the dates indicated and the results of their
operations and the changes in their cash flows for the periods specified; such
financial statements have been prepared in conformity with U.S. generally
accepted accounting principles ("GAAP"), applied on a consistent basis
throughout the periods covered thereby; and the other financial information
relating to Indirect Parent, the Company and their respective subsidiaries
included or incorporated by reference in each of the Time of Sale Information
and the Offering Memorandum has been derived from the accounting records of the
Indirect Parent, the Company and their respective subsidiaries and presents
fairly in all material respects the information shown thereby; and the
assumptions underlying the pro forma financial statements and the related notes
thereto included in each of the Time of Sale Information and the Offering
Memorandum are reasonable, have been properly applied to the historical amounts
in the compilation of those statements and are set forth in each of the Time of
Sale Information and the Offering Memorandum .
 
(e) Financial Statements of Avis Europe.  To the knowledge of the Issuer and the
Guarantors, the financial statements and the related notes thereto of Avis
Europe and its subsidiaries included or incorporated by reference in each of the
Time of Sale Information and the Offering Memorandum present fairly in all
material respects the consolidated financial position of Avis Europe and its
respective subsidiaries as of the dates indicated and the results of their
operations and the changes in their cash flows for the periods specified; such
financial statements have been prepared in conformity with International
Financial Reporting Standards (“IFRS”), applied on a consistent basis throughout
the periods covered thereby; and the other financial information relating to
Avis Europe and its subsidiaries included or incorporated by reference in each
of the Time of Sale Information and the Offering Memorandum has been derived
from the accounting records of Avis Europe and its subsidiaries and presents
fairly in all material respects the information shown thereby.
 
(f) No Material Adverse Change.  Since June 30, 2011, (i) there has not been any
material change in the capital stock or long-term debt of the Indirect Parent,
the Company, Avis Europe or any of their respective subsidiaries, or any
dividend or distribution of any kind declared, set aside for payment, paid or
made by the Indirect Parent, the Company or Avis Europe on any class of capital
stock, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business, properties,
management, financial position, results of operations or business prospects of
the Indirect Parent, the Company, Avis Europe and their subsidiaries taken as a
whole; (ii) none of the Indirect Parent, the Company, Avis Europe or any of
their subsidiaries has entered into any transaction or agreement that is
material to the Indirect Parent, the Company, Avis Europe and their respective
subsidiaries taken as a whole, or incurred any liability or obligation, direct
or contingent, that is material to the Indirect Parent, the Company, Avis Europe
and their respective subsidiaries taken as a whole; and (iii) none of the
Indirect Parent, the Company, Avis Europe or any of their subsidiaries has
sustained any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor disturbance or dispute or any action, order or decree of any court or
arbitrator or governmental or regulatory
 
 
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authority, except in each case as otherwise disclosed in each of the Time of
Sale Information and the Offering Memorandum.
 
(g) Organization and Good Standing.  The Issuer, the Guarantors, Avis Europe and
each of their respective subsidiaries have been duly organized and are validly
existing and in good standing under the laws of their respective jurisdictions
of organization (to the extent such terms have meaning in such jurisdictions),
are duly qualified to do business and are in good standing in each jurisdiction
in which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified, be in good standing or have such power or authority could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, properties, management, financial position,
results of operations or business prospects of the Indirect Parent, the Issuer,
Avis Europe and their subsidiaries taken as a whole or on the performance by the
Issuer and the Guarantors of their respective obligations under the Transaction
Documents (as defined below) (a "Material Adverse Effect").  The Company does
not own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Schedule 3-A to this
Agreement. Avis Europe does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed on
Schedule 3-B to this Agreement.
 
(h) Capitalization.  Indirect Parent had an authorized capitalization as of June
30, 2011, as set forth in each of the Time of Sale Information and the Offering
Memorandum under the heading "Capitalization" in the "Actual" column; and all
the outstanding shares of capital stock or other equity interests of each
subsidiary of Indirect Parent and of Avis Europe have been duly authorized and
validly issued, and, with respect to subsidiaries of Indirect Parent only, are
fully paid and non-assessable (except as otherwise described in each of the Time
of Sale Information and the Offering Memorandum) and are owned directly or
indirectly by Indirect Parent or Avis Europe, as applicable, free and clear of
any lien, charge, encumbrance, security interest, restriction on voting or
transfer (other than transfer restrictions under applicable securities laws) or
any other claim of any third party, except as described in the Time of Sale
Information and the Offering Memorandum, and, with respect to Avis Europe,
except as are not, in each case, material to the consummation of the
Acquisition, the holders of the Securities or Avis Europe’s business.
 
(i) Due Authorization.  The Escrow Issuer and Indirect Parent have full right,
power and authority to execute and deliver this Agreement, the Securities and
the Indenture (in the case of the Escrow Issuer), the Exchange Securities (in
the case of the Escrow Issuer), the Registration Rights Agreement and the Escrow
Agreement, as applicable (collectively, the "Initial Documents") to which they
are a party and to perform their respective obligations hereunder and
thereunder; Indirect Parent has full right, power and authority to execute and
deliver the Supplemental Indenture (including the Guarantee and Exchange
Securities Guarantee set forth therein) and to perform its obligations
thereunder; and all action required to be taken for the due and proper
authorization, execution and delivery of each of the Transaction Documents and
the consummation of the transactions contemplated thereby or by the Time of Sale
Information and the Offering Memorandum has been duly and validly taken. The
Company and the Guarantors other than Indirect Parent have full right, power and
authority to execute and
 
 
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deliver the Joinder Agreement, the Securities (in the case of the Company), the
Supplemental Indenture (including, with respect to the Guarantors, each
Guarantee and Exchange Securities Guarantee set forth therein), the Exchange
Securities (in the case of the Company) and the Registration Rights Agreement
Joinder, as applicable (collectively, the “Joinder Documents” and, together with
the Initial Documents and the Implementation Agreement, the “Transaction
Documents”) to which they are a party and to perform their respective
obligations thereunder; and all action required to be taken for the due and
proper authorization, execution and delivery of each of the Joinder Documents
and the consummation of the transactions contemplated thereby or by the Time of
Sale Information and the Offering Memorandum has been duly and validly taken.
 
(j) AE Consolidation Limited. AE Consolidation Limited is a wholly-owned
subsidiary of ABCR, is a company duly incorporated and in good standing under
the laws of  England and Wales and has the corporate power to enter into and
perform its obligations under the Transaction Documents to which it is a party
and to consummate the transactions contemplated thereby.
 
(k) Avis Europe. Avis Europe is a company duly incorporated and existing under
the laws of England and Wales.  Upon consummation of the Acquisition in
accordance with the Implementation Agreement, AE Consolidation will own 100% of
the issued and outstanding capital stock of Avis Europe.
 
(l) The Indenture.  The Indenture has been duly authorized by the Escrow Issuer
and the Supplemental Indenture has been duly authorized by the Company and each
of the Guarantors and, when duly executed and delivered in accordance with its
terms by each of the parties thereto, the Indenture (and from the Completion
Date, the Indenture as supplemented by the Supplemental Indenture) will
constitute a valid and legally binding agreement of the Escrow Issuer (and, from
the Completion Date, of the Company and each of the Guarantors) enforceable
against the Escrow Issuer (and, from the Completion Date, against the Company
and each of the Guarantors) in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or other similar
laws relating to or affecting the enforcement of creditors' rights generally or
by general equitable principles (whether considered in a proceeding in equity or
law) relating to enforceability (collectively, the "Enforceability Exceptions");
and on the Closing Date, the Indenture (and, on the Completion Date, the
Indenture as supplemented by the Supplemental Indenture) will conform in all
material respects to the requirements of the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of the
Commission applicable to an indenture that is qualified thereunder, except as
described in the Time of Sale Information and the Offering Memorandum.
 
(m) The Securities and the Guarantees.  The Securities have been duly authorized
by the Escrow Issuer and the Company and, when duly executed, authenticated,
issued and delivered as provided in the Indenture and paid for as provided
herein, will be duly and validly issued and outstanding and will constitute
valid and legally binding obligations of the Escrow Issuer (and, from the
Completion Date, of the Company) enforceable against the Escrow Issuer  (and,
from the Completion Date, against the Company) in accordance with their terms,
subject to the Enforceability Exceptions, and will be entitled to the benefits
of the Indenture; and the
 
 
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Guarantees have been duly authorized by each of the Guarantors and, when the
Securities have been duly executed, authenticated, issued and delivered as
provided in the Indenture and paid for as provided herein and when the
Supplemental Indenture has been duly executed and delivered, will be valid and
legally binding obligations of, and enforceable against, each of the Guarantors
in accordance with their terms, subject to the Enforceability Exceptions, and
will be entitled to the benefits of the Indenture.
 
(n) The Exchange Securities.  On the Closing Date, the Exchange Securities
(including the related guarantees (the "Exchange Securities Guarantees")) will
have been duly authorized for issuance by the Escrow Issuer, the Company, each
of the Guarantors and, when duly executed, authenticated, issued and delivered
as contemplated by the Indenture and the Registration Rights Agreement, the
Exchange Securities will be duly and validly issued and outstanding and will
constitute valid and legally binding obligations of the Issuer, as issuer, and
each of the Guarantors, as guarantor, enforceable against the Issuer in
accordance with their terms, subject to the Enforceability Exceptions, and will
be entitled to the benefits of the Indenture.
 
(o) Purchase Agreement and Joinder Agreement. This Agreement has been duly
authorized, executed and delivered by the Escrow Issuer and the Indirect Parent.
The Joinder Agreement has been duly authorized by the Company and each of the
Guarantors other than Indirect Parent and, on the Completion Date, will be duly
executed and delivered by the Company and the Guarantors other than Indirect
Parent.  When the Purchase Agreement has been duly executed and delivered in
accordance with its terms by each of the other parties thereto, this Agreement
(and when the Joinder Agreement has been duly executed and delivered by the
parties thereto on the Completion Date, this Agreement as supplemented by the
Joinder Agreement) will constitute a valid and legally binding agreement of the
Escrow Issuer and the Indirect Parent (and, on the Completion Date, of the
Company and each of the Guarantors) enforceable against the Escrow Issuer and
the Indirect Parent (and, on the Completion Date, against the Company and each
of the Guarantors) in accordance with its terms, subject to the Enforceability
Exceptions, and except that rights to indemnity and contribution thereunder may
be limited by applicable law and public policy.
 
(p) Registration Rights Agreement. The Registration Rights Agreement has been
duly authorized by the Escrow Issuer, the Company, each of the Guarantors and,
on the Closing Date, will be duly executed and delivered by the Escrow Issuer
and Indirect Parent (and, on the Completion Date, the Registration Rights
Agreement Joinder will be duly executed and delivered by the Company and each of
the Guarantors other than Indirect Parent) and, when duly executed and delivered
in accordance with its terms by each of the other parties thereto, the
Registration Rights Agreement (and, on the Completion Date, the Registration
Rights Agreement as supplemented by the Registration Rights Agreement Joinder)
will constitute a valid and legally binding agreement of the Escrow Issuer and
Indirect Parent (and, on the Completion Date, of the Company and each of the
Guarantors) enforceable against the Escrow Issuer and Indirect Parent (and, on
the Completion Date, against the Company and each of the Guarantors) in
accordance with its terms, subject to the Enforceability Exceptions, and except
that rights to indemnity and contribution thereunder may be limited by
applicable law and public policy.
 
 
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(q) Escrow Agreement; Ownership of Escrowed Funds.  The Escrow Agreement has
been duly authorized by the Escrow Issuer and the Indirect Parent and, when duly
executed and delivered in accordance with its terms by each of the parties
thereto, will constitute a valid and legally binding agreement of the Escrow
Issuer and the Indirect Parent enforceable against the Escrow Issuer and the
Indirect Parent in accordance with its terms, subject to the Enforceability
Exceptions.  On the Closing Date, the Escrow Agreement will be effective to
grant a valid and enforceable first priority security interest, in favor of the
Escrow Agent for the benefit of the Trustee and the holders of the Securities,
in the Escrow Issuer’s right, title and interest in the Escrowed Funds.
 
(r) Implementation Agreement.  The Implementation Agreement has been duly
authorized, executed and delivered by each of Avis Europe and AE Consolidation
Limited and constitutes a valid and legally binding agreement of each of Avis
Europe and AE Consolidation Limited, enforceable against each of Avis Europe and
AE Consolidation Limited in accordance with its terms, subject to the
Enforceability Exceptions.
 
(s) Descriptions of the Transaction Documents.  Each Transaction Document
conforms or will conform as of the Closing Date in all material respects to the
description thereof contained in each of the Time of Sale Information and the
Offering Memorandum.
 
(t) No Violation or Default.  None of the Note Parties, Avis Europe nor any of
their respective subsidiaries is (i) in violation of its charter or by-laws or
similar organizational documents; (ii) in default, and no event has occurred
that, with notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Indirect Parent, the Company, Avis Europe or any of
their respective subsidiaries is a party or by which the Indirect Parent, the
Company, Avis Europe or any of their respective subsidiaries is bound or to
which any of the property or assets of the Indirect Parent, the Company, Avis
Europe or any of their respective subsidiaries is subject; or (iii) in violation
of any applicable law or statute or any judgment, order, rule or regulation of
any court or arbitrator or governmental or regulatory authority, except, in the
case of clauses (ii) and (iii) above, for any such default or violation that
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
 
(u) No Conflicts.  The execution, delivery and performance by the Note Parties
of each of the Transaction Documents, as applicable, to which each is a party,
the issuance and sale of the Securities (including the Guarantees) and the
compliance by the Note Parties with the terms thereof and the consummation of
the transactions contemplated by the Transaction Documents or the Time of Sale
Information and the Offering Memorandum will not (i) conflict with or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Indirect Parent, the Company,
Avis Europe or any of their subsidiaries (other than any lien, charge or
encumbrance created, imposed or intended to be created or imposed by the
Transaction Documents) pursuant to, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Indirect Parent, the
Company, Avis Europe or any of their respective subsidiaries is a party or by
which the Indirect Parent, the Company, Avis Europe or any of their respective
subsidiaries is bound or to which any of the
 
 
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property or assets of the Indirect Parent, the Company, Avis Europe or any of
their subsidiaries is subject; (ii) result in any violation of the provisions of
the charter or by-laws or similar organizational documents of the Indirect
Parent, the Company, Avis Europe or any of their respective subsidiaries or any
of the Guarantors; or (iii) assuming the accuracy of, and the Initial
Purchasers' compliance with, the representations, warranties and agreements of
the Initial Purchasers herein, and the compliance by the holders of the
Securities with the offering and transfer restrictions set forth in the Offering
Memorandum, result in the violation of any applicable law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority, except, in the case of clauses (i) and (iii) above, for
any such conflict, breach, violation, lien, charge, encumbrance or default that
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
 
(v) No Consents Required.  Assuming the accuracy of, and the Initial Purchasers'
compliance with, the representations, warranties and agreements of the Initial
Purchasers herein, and the compliance by the holders of the Securities with the
offering and transfer restrictions set forth in the Offering Memorandum, no
consent, approval, authorization, order, registration or qualification of or
with any court or arbitrator or governmental or regulatory authority is required
for the execution, delivery and performance by the Note Parties of each of the
Transaction Documents, as applicable, to which each is a party, the issuance and
sale of the Securities (including the Guarantees) and compliance by the Note
Parties with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents, except for such consents, approvals,
authorizations, orders and registrations or qualifications as have been obtained
or as may be required (i) to consummate the Acquisition, as contemplated by the
Implementation Agreement and as listed in Schedule 4 hereto, (ii) under
applicable state securities laws in connection with the purchase and resale of
the Securities by the Initial Purchasers, (iii) with respect to the Exchange
Securities (including the Exchange Securities Guarantees) under the Securities
Act, the Trust Indenture Act and applicable state securities laws as
contemplated by the Registration Rights Agreement or (iv) that if not obtained
or made could not reasonably be expected to have a Material Adverse Effect.
 
(w) Legal Proceedings.  Except as described in each of the Time of Sale
Information and the Offering Memorandum, there are no legal, governmental or
regulatory investigations, actions, suits or proceedings pending to which the
Indirect Parent, the Issuer, Avis Europe or any of their respective subsidiaries
is or may be a party or to which any property of the Indirect Parent, the
Issuer, Avis Europe or any of their subsidiaries is or may be the subject that,
individually or in the aggregate, if determined adversely to the Indirect
Parent, the Issuer, Avis Europe or any of their respective subsidiaries, could
reasonably be expected to have a Material Adverse Effect; and no such
investigations, actions, suits or proceedings are, to the best knowledge of the
Issuer and each of the Guarantors, threatened or, to the best knowledge of the
Issuer and each of the Guarantors (without having undertaken any independent
inquiry outside of the Issuer and each of the Guarantors), contemplated by any
governmental or regulatory authority or by others.
 
(x) Independent Accountants.  Deloitte & Touche LLP, who have certified certain
financial statements of the Indirect Parent, the Company and their subsidiaries,
is an independent registered public accounting firm with respect to the Indirect
Parent, the Company and their subsidiaries within the applicable rules and
regulations adopted by the Commission and the
 
 
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Public Company Accounting Oversight Board (United States) and as required by the
Securities Act.
 
(y) Title to Real and Personal Property.  The Indirect Parent, the Company, Avis
Europe and their respective subsidiaries have good and marketable title in fee
simple to, or have valid rights to lease or otherwise use, all items of real and
personal property that are material to the respective businesses of the Indirect
Parent, the Company, Avis Europe and their respective subsidiaries, in each case
free and clear of all liens, encumbrances, claims and defects and imperfections
of title except those that (i) are permitted under the Company's senior credit
agreement with JPMorgan Chase Bank, N.A. and the other parties thereto, dated as
of April 19, 2006, as amended; (ii) do not materially interfere with the use
made and proposed to be made of such property by the Indirect Parent, the
Company, Avis Europe and their respective subsidiaries; or (iii) could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
 
(z) Title to Intellectual Property.  The Indirect Parent, the Company, Avis
Europe and their respective subsidiaries own or possess adequate rights to use
all material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights, licenses
and know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) reasonably
necessary for the conduct of their respective businesses except where the
failure to own or possess such rights could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; and the
conduct of their respective businesses does not, and will not, conflict in any
respect with any such rights of others except which conflict could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and the Indirect Parent, the Company, Avis Europe and their
respective subsidiaries have not received any notice of any claim of
infringement of or conflict with any such rights of others which infringement or
conflict, if the subject of an unfavorable decision, ruling or finding, could
reasonably be expected to have a Material Adverse Effect.
 
(aa) No Undisclosed Relationships.  No relationship, direct or indirect, exists
between or among the Indirect Parent, the Company, Avis Europe or any of their
respective subsidiaries, on the one hand, and the directors, officers,
stockholders or other affiliates of the Indirect Parent, the Company, Avis
Europe or any of their subsidiaries (to the knowledge of Issuer and Indirect
Parent with respect to Avis Europe and its subsidiaries), on the other, that
would be required by the Securities Act to be described in a registration
statement to be filed with the Commission and that is not so described in each
of the Time of Sale Information and the Offering Memorandum.
 
(bb) Investment Company Act.  None of the Note Parties, Avis Europe nor any of
their subsidiaries is, and solely after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as described in
each of the Time of Sale Information and the Offering Memorandum none of them
will be, an "investment company" or an entity "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission thereunder (collectively, the
"Investment Company Act").
 
 
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(cc) Taxes.  Except as could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, (i) the Indirect Parent, the
Company, Avis Europe and their respective subsidiaries have paid all federal,
state, local and foreign taxes, other than those being contested in good faith
and by appropriate proceedings so long as there are adequate reserves for such
taxes, and have filed all tax returns required to be paid or filed through the
date hereof; and (ii) except as otherwise disclosed in each of the Time of Sale
Information and the Offering Memorandum, there is no tax deficiency that has
been, or could reasonably be expected to be, asserted against the Indirect
Parent, the Company, Avis Europe or any of their respective subsidiaries or any
of their respective properties or assets.
 
(dd) Licenses and Permits.  The Indirect Parent, the Company, Avis Europe and
their respective subsidiaries possess such licenses, certificates, permits and
other authorizations issued by, and have made such declarations and filings
with, the appropriate federal, state, local or foreign governmental or
regulatory authorities that are necessary for the ownership or lease of their
respective properties or the conduct of their respective businesses as described
in each of the Time of Sale Information and the Offering Memorandum, except
where the failure to possess or make the same could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; and except
as described in each of the Time of Sale Information and the Offering
Memorandum, none of the Indirect Parent, the Company, Avis Europe or any of
their respective subsidiaries has received notice of any revocation or
modification of any such license, certificate, permit or authorization or has
any reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course, which, if the subject
of an unfavorable decision, ruling or finding, could reasonably be expected to
have a Material Adverse Effect.
 
(ee) No Labor Disputes.  No labor disturbance by or dispute with employees of
the Indirect Parent, the Company, Avis Europe or any of their subsidiaries
exists or, to the best knowledge (without having undertaken any independent
inquiry outside of the Company and Indirect Parent) of the Issuer and each of
the Guarantors, is contemplated or threatened and neither the Issuer nor any
Guarantor is aware of any existing or imminent labor disturbance by, or dispute
with, the employees of any of the Indirect Parent's, the Company 's, Avis
Europe’s or any of their respective subsidiaries' principal suppliers,
contractors or customers, except as would not reasonably be expected to have a
Material Adverse Effect.
 
(ff) Compliance With Environmental Laws.  (i) The Indirect Parent, the Company,
Avis Europe and their respective subsidiaries (x) are, and at all prior times
were, in compliance with any and all applicable federal, state, local and
foreign laws, rules, regulations, requirements, decisions and orders relating to
the protection of human health or safety, the environment, natural resources,
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "Environmental Laws"), (y) have received and are in compliance
with all permits, licenses, certificates or other authorizations or approvals
required of them under applicable Environmental Laws to conduct their respective
businesses, and (z) have not received notice of any actual or potential
liability under or relating to any Environmental Laws, including for the
investigation or remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, and have no knowledge of any
event or condition that would reasonably be expected to result in any such
notice; (ii) there are no costs or liabilities associated with Environmental
Laws of or relating to the Indirect Parent, the Company, Avis Europe or
 
 
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their respective subsidiaries, except in the case of each of (i) and (ii) above,
for any such failure to comply, or failure to receive required permits, licenses
or approvals, or cost or liability, as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; and (iii)
except as described in each of the Time of Sale Information and the Offering
Memorandum, (x) there are no proceedings that are pending (with respect to Avis
Europe, to the knowledge of the Issuer and Indirect Parent), or that are known
to be contemplated, against the Indirect Parent, the Company, Avis Europe or any
of their respective subsidiaries under any Environmental Laws in which a
governmental entity is also a party, other than such proceedings regarding which
it is reasonably believed no monetary sanctions of $100,000 or more will be
imposed, (y) the Indirect Parent, the Company, Avis Europe and their respective
subsidiaries are not aware of any issues regarding compliance with Environmental
Laws, or liabilities or other obligations under Environmental Laws or concerning
hazardous or toxic substances or wastes, pollutants or contaminants, that could
reasonably be expected to have a Material Adverse Effect, and (z) none of the
Indirect Parent, the Company, Avis Europe or any of their respective
subsidiaries anticipates material capital expenditures relating to any
Environmental Laws.
 
(gg) Compliance With ERISA.  Except as described in each of the Time of Sale
Information and the Offering Memorandum, (i) each employee benefit plan, within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") that is subject to ERISA, for which the Indirect
Parent, the Company or any member of their "Controlled Groups" (defined as any
organization which is a member of a controlled group of corporations within the
meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the
"Code")) would have any liability (each, a "Plan") has been maintained in
compliance in all material respects with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited to
ERISA and the Code; (ii) no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to
any Plan excluding transactions effected pursuant to a statutory or
administrative exemption; (iii) for each Plan that is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, no "accumulated
funding deficiency" as defined in Section 412 of the Code, whether or not
waived, has occurred or is reasonably expected to occur; and (iv) for each Plan
that is subject to the funding rules of ERISA or the Code, the fair market value
of the assets of each such Plan is not less than the present value of all
benefits accrued under such Plan (determined based on those assumptions used to
fund such Plan).
 
(hh) Disclosure Controls.  The Indirect Parent and its subsidiaries maintain an
effective system of "disclosure controls and procedures" (as defined in Rule
13a-15(e) of the Exchange Act) that is designed to ensure that information
required to be disclosed by the Indirect Parent in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Commission's rules and forms, including
controls and procedures designed to ensure that such information is accumulated
and communicated to the Indirect Parent's management as appropriate to allow
timely decisions regarding required disclosure.  The Indirect Parent and its
subsidiaries have carried out evaluations of the effectiveness of their
disclosure controls and procedures as and when required by Rule 13a-15 of the
Exchange Act.
 
(ii) Accounting Controls.  The Indirect Parent and its subsidiaries maintain
systems of "internal control over financial reporting" (as defined in Rule
13a-15(f) of the Exchange Act)
 
 
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that comply with the requirements of the Exchange Act and have been designed by,
or under the supervision of, their respective principal executive and principal
financial officers, or persons performing similar functions, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
GAAP, including but not limited to internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP, and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.  Except as disclosed the Time of Sale Information
and the Offering Memorandum, there are no material weaknesses or significant
deficiencies in the Indirect Parent's and its respective subsidiaries' internal
controls.
 
(jj) No Unlawful Payments.  None of the Indirect Parent, the Company any of
their respective subsidiaries or, to the knowledge of the Issuer and each of the
Guarantors, any director, officer, agent, employee or other person associated
with or acting on behalf of the Indirect Parent, the Company or any of their
respective subsidiaries has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977, the OECD convention on Combating Bribery of Foreign Public
Officials in International Business Transactions or any similar law of any other
relevant jurisdictions; or (iv) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
 
(kk) Insurance.  The Indirect Parent, the Company, Avis Europe and their
respective subsidiaries have insurance covering their respective properties,
operations, personnel and businesses, including business interruption insurance,
which insurance is in amounts and insures against such losses and risks as the
Indirect Parent’s management reasonably believes are adequate to protect the
Indirect Parent, the Company, Avis Europe and their respective subsidiaries and
their respective businesses; and none of the Indirect Parent, Company, Avis
Europe or any of their respective subsidiaries has (with respect to Avis Europe
and its subsidiaries, to the knowledge of the Issuer and Indirect Parent) (i)
received notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made in order
to continue such insurance or (ii) any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage at reasonable cost from similar insurers as may be
necessary to continue its business at a cost that could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
 
(ll) Compliance with Money Laundering Laws.  The operations of the Indirect
Parent, the Company and their respective subsidiaries are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions, the rules
and regulations thereunder and any related or similar rules, regulations
 
 
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or guidelines, issued, administered or enforced by any governmental agency
(collectively, the "Money Laundering Laws") and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Indirect Parent, the Issuer or any of their respective
subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company and the Indirect Parent, threatened.
 
(mm) Compliance with OFAC and Sanctions.  None of the Indirect Parent, the
Company, any of their respective subsidiaries or, to the knowledge of the Issuer
and each of the Guarantors, any director, officer, agent, employee, affiliate or
other person associated with or acting on behalf of the Indirect Parent, the
Company or any of their respective subsidiaries is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury ("OFAC"); and the Issuer will not directly or
indirectly use the proceeds of the offering of the Securities hereunder, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
 
(nn) Solvency.  On and immediately after each of the Closing Date and the
Completion Date, the Note Parties (on a consolidated basis after giving effect
to the Acquisition, the issuance of the Securities and the other transactions
related thereto as described in each of the Time of Sale Information and the
Offering Memorandum) will be Solvent.  As used in this paragraph, the term
"Solvent" means, with respect to a particular date, that on such date (i) the
present fair market value (or present fair saleable value) of the assets of such
person is not less than the total amount required to pay the liabilities of such
person on its total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured; (ii) such person is able to
realize upon its assets and pay its debts and other liabilities, contingent
obligations and commitments as they mature and become due in the normal course
of business; (iii) assuming consummation of the issuance of the Securities as
contemplated by this Agreement, the Time of Sale Information and the Offering
Memorandum, such person is not incurring debts or liabilities beyond its ability
to pay as such debts and liabilities mature; (iv) such person is not engaged in
any business or transaction, and does not propose to engage in any business or
transaction, for which its property would constitute unreasonably small capital
after giving due consideration to the prevailing practice in the industry in
which such person is engaged; and (v) such person is not a defendant in any
civil action that would result in a judgment that such person is or would become
unable to satisfy.
 
(oo) No Restrictions on Subsidiaries.  No subsidiary of the Indirect Parent,
Avis Europe or the Company is currently subject to any material prohibition,
directly or indirectly, under any agreement or other instrument to which it is a
party or is subject, from paying any dividends to the Indirect Parent, Avis
Europe or the Company, as applicable, from making any other distribution on such
subsidiary's capital stock or membership interests, as applicable, from repaying
to the Indirect Parent, Avis Europe or the Company any loans or advances to such
subsidiary from the Indirect Parent, Avis Europe or the Company as applicable,
or from transferring any of such subsidiary's properties or assets to the
Indirect Parent, Avis Europe, the Company or any of their subsidiaries, as
applicable, other than as disclosed in the Time of Sale Information and the
Offering Memorandum. After giving effect to the Acquisition and repayment of the
indebtedness of Avis Europe and its subsidiaries in connection with the
 
 
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consummation of the Acquisition, Avis Europe and its subsidiaries will not be
subject to any such prohibitions or restrictions as subsidiaries of ABCR.
 
(pp) No Broker's Fees.  None of the Indirect Parent, the Company, Avis Europe or
any of their respective subsidiaries is a party to any contract, agreement or
understanding with any person (other than this Agreement) that would give rise
to a valid claim against the Indirect Parent, the Company, Avis Europe or any of
their subsidiaries or any Initial Purchaser for a brokerage commission, finder's
fee or like payment in connection with the offering and sale of the Securities.
 
(qq) Rule 144A Eligibility.  On the Closing Date, the Securities will not be of
the same class as securities listed on a national securities exchange registered
under Section 6 of the Exchange Act or quoted in an automated inter-dealer
quotation system; and each of the Time of Sale Information and the Offering
Memorandum, as of its respective date, contains or will contain all the
information that, if requested by a prospective purchaser of the Securities,
would be required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act.
 
(rr) No Integration.  Neither the Issuer nor any of its affiliates (as defined
in Rule 501(b) of Regulation D) has, directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the Securities Act), that is or will be integrated
with the sale of the Securities in a manner that would require registration of
the Securities under the Securities Act.
 
(ss) No General Solicitation or Directed Selling Efforts.  None of the Issuer or
any of its affiliates or any other person acting on its or their behalf (other
than the Initial Purchasers, as to which no representation is made) has (i)
directly or indirectly, solicited offers for, or offered or sold, the Securities
by means of any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act or (ii) with
respect to those Securities offered or sold in reliance upon Regulation S under
the Securities Act ("Regulation S"), engaged in any directed selling efforts
within the meaning of Regulation S, and assuming the accuracy of the
representations and warranties of the Initial Purchasers herein, all such
persons have complied with the offering restrictions requirement of Regulation
S.
 
(tt) Securities Law Exemptions.  Assuming the accuracy of the representations
and warranties of the Initial Purchasers contained herein (including Annex C
hereto) and their compliance with their agreements set forth therein, and the
compliance by the holders of the Securities with the offering and transfer
restrictions set forth in the Offering Memorandum, it is not necessary, in
connection with the issuance and sale of the Securities to the Initial
Purchasers and the offer, resale and delivery of the Securities by the Initial
Purchasers in the manner contemplated by this Agreement, the Time of Sale
Information and the Offering Memorandum, to register the Securities under the
Securities Act or, until such time as the Exchange Securities are issued
pursuant to an effective registration statement, to qualify the Indenture under
the Trust Indenture Act.
 
 
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(uu) No Stabilization.  Neither the Issuer nor any of the Guarantors has taken,
directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities.
 
(vv) Margin Rules.  Neither the issuance, sale and delivery of the Securities
nor the application of the proceeds thereof by the Issuer as described in the
Time of Sale Information and the Offering Memorandum will violate Regulation T,
U or X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board of Governors.
 
(ww) Forward-Looking Statements.  No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) contained or incorporated by reference in any of the Time of Sale
Information or the Offering Memorandum has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
 
(xx) Statistical and Market Data.  Nothing has come to the attention of the
Issuer or any Guarantor that has caused the Issuer or any Guarantor to believe
that the statistical and market-related data included or incorporated by
reference in each of the Time of Sale Information and the Offering Memorandum is
not based on or derived from sources that are reliable and accurate in all
material respects.
 
4. Further Agreements of the Issuer and the Guarantors.  The Issuer and the
Guarantors jointly and severally covenant and agree with each Initial Purchaser
that:
 
(a) Delivery of Copies.  The Issuer will deliver, without charge, to the Initial
Purchasers as many copies of the Preliminary Offering Memorandum, any other Time
of Sale Information, any Issuer Written Communication and the Offering
Memorandum (including all amendments and supplements thereto) as the
Representative may reasonably request.
 
(b) Offering Memorandum, Amendments or Supplements.  Before finalizing the
Offering Memorandum or making or distributing any amendment or supplement to any
of the Time of Sale Information or the Offering Memorandum or the filing with
the Commission any document that will be incorporated by reference therein, the
Issuer or Indirect Parent will furnish to the Representative and counsel for the
Initial Purchasers a copy of the proposed Offering Memorandum or such amendment
or supplement or document to be incorporated by reference therein for review,
and will not distribute any such proposed Offering Memorandum, amendment or
supplement or allow to be filed any such document with the Commission to which
the Representative reasonably objects; provided that, if in the opinion of the
outside counsel of Indirect Parent and the Issuer, such proposed amendment or
supplement is required by law, the Indirect Parent and the Issuer can make such
amendment or supplement, notwithstanding any such reasonable objection.
 
(c) Additional Written Communications.  Before using, authorizing, approving or
referring to any Issuer Written Communication, the Indirect Parent and the
Issuer will furnish to the Representative and counsel for the Initial Purchasers
a copy of such written communication for review and will not use, authorize,
approve or refer to any such written communication to which the Representative
reasonably objects.
 
 
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(d) Notice to the Representative.  The Indirect Parent and the Issuer will
advise the Representative promptly, and confirm such advice in writing, (i) of
the issuance by any governmental or regulatory authority of any order preventing
or suspending the use of any of the Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum or the initiation or threatening of any
proceeding for that purpose; (ii) of the occurrence of any event at any time
prior to the completion of the initial offering of the Securities as a result of
which any of the Time of Sale Information, any Issuer Written Communication or
the Offering Memorandum as then amended or supplemented would include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances existing when
such Time of Sale Information, such Issuer Written Communication or the Offering
Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt
by the Escrow Issuer or by the Company of any notice with respect to any
suspension of the qualification of the Securities for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and the Indirect Parent and the Issuer will use its reasonable best
efforts to prevent the issuance of any such order preventing or suspending the
use of any of the Time of Sale Information, any Issuer Written Communication or
the Offering Memorandum or suspending any such qualification of the Securities
and, if any such order is issued, will obtain as soon as possible the withdrawal
thereof.
 
(e) Ongoing Compliance of the Time of Sale Information and the Offering
Memorandum.  (1) If at any time prior to the completion of the initial offering
of the Securities by the Initial Purchasers (i) any event shall occur or
condition shall exist as a result of which the Offering Memorandum as then
amended or supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances existing when the Offering Memorandum
is delivered to a purchaser, not misleading or (ii) it is necessary to amend or
supplement the Offering Memorandum to comply with law, the Indirect Parent and
the Issuer will promptly notify the Initial Purchasers thereof and forthwith
prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers
such amendments or supplements to the Offering Memorandum as may be necessary so
that the statements in the Offering Memorandum as so amended or supplemented
will not, in the light of the circumstances existing when the Offering
Memorandum is delivered to a purchaser, be misleading or so that the Offering
Memorandum will comply with law; and (2) if at any time prior to the Closing
Date (i) any event shall occur or condition shall exist as a result of which any
of the Time of Sale Information as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (ii) it is necessary
to amend or supplement any of the Time of Sale Information so that any of the
Time of Sale Information will not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the Indirect Parent and the Issuer will promptly notify the
Initial Purchasers thereof and forthwith prepare and, subject to paragraph (b)
above, furnish to the Initial Purchasers such amendments or supplements to any
of the Time of Sale Information as may be necessary so that the statements in
any of the Time of Sale Information as so amended or supplemented will not, in
light of the circumstances under which they were made, be misleading.
 
 
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(f) Blue Sky Compliance.  The Issuer will cooperate with the Initial Purchasers
and counsel for the Initial Purchasers to qualify or register (or to obtain
exemption from qualifying or registering) the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the
Representative shall reasonably request and will continue such qualifications,
registrations and exemptions in effect so long as required for the offering and
resale of the Securities; provided that neither the Issuer nor any of the
Guarantors shall be required to (i) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify; (ii) file any general consent to service of
process in any such jurisdiction; or (iii) subject itself to taxation in any
such jurisdiction if it is not otherwise so subject.
 
(g) Clear Market.  During the period from the date hereof through and including
the date that is 90 days after the date hereof, none of the Note Parties will,
without the prior written consent of Morgan Stanley & Co. LLC and Citigroup
Global Markets Inc., offer, sell, contract to sell or otherwise dispose of any
debt securities (other than loans pursuant to credit facilities described in the
Time of Sale Information and the Offering Memorandum or loans paid off by the
Company or any of its subsidiaries in the ordinary course of business) issued or
guaranteed by the Company or any of the Guarantors and having a tenor of more
than one year.
 
(h) Use of Proceeds.  The Company and the Escrow Issuer will apply the net
proceeds from the sale of the Securities as described in each of the Time of
Sale Information and the Offering Memorandum under the heading "Use of
proceeds".
 
(i) Supplying Information.  While the Securities remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Issuer and each of the Guarantors will, during any period in
which the Issuer is not subject to and in compliance with Section 13 or 15(d) of
the Exchange Act, furnish to holders of the Securities and prospective
purchasers of the Securities designated by such holders, upon the request of
such holders or such prospective purchasers, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
 
(j) DTC.   The Issuer will assist the Initial Purchasers in arranging for the
Securities to be eligible for clearance and settlement through The Depository
Trust Company ("DTC").
 
(k) No Resales by the Company.  The Issuer will not, and will not permit any of
its affiliates (as defined in Rule 144 under the Securities Act) to, resell any
of the Securities that have been acquired by any of them, except for Securities
purchased by the Issuer or any of its affiliates and resold in a transaction
registered under the Securities Act.
 
(l) No Integration.  Neither the Issuer nor any of its affiliates (as defined in
Rule 501(b) of Regulation D) will, directly or through any agent, sell, offer
for sale, solicit offers to buy or otherwise negotiate in respect of, any
security (as defined in the Securities Act), that is or will be integrated with
the sale of the Securities in a manner that would require registration of the
Securities under the Securities Act.
 
(m) No General Solicitation or Directed Selling Efforts.  None of the Issuer or
any of its affiliates or any other person acting on its or their behalf (other
than the Initial Purchasers, as
 
 
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to which no covenant is given) will (i) solicit offers for, or offer or sell,
the Securities by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act or (ii) with respect to those Securities offered or sold in reliance upon
Regulation S, engage in any directed selling efforts within the meaning of
Regulation S, and all such persons will comply with the offering restrictions
requirement of Regulation S.
 
(n) No Stabilization.  Neither the Issuer nor any of its affiliates will take,
directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities.
 
(o) Legended Securities.  Each certificate for a Security will bear the
applicable legend(s) contained in "Notice to investors" in the Preliminary
Offering Memorandum for the time period and upon the other terms stated in the
Preliminary Offering Memorandum.
 
(p) Joinders and Supplemental Indenture.  On the Completion Date, (i) the
Company and each of the Guarantors other than Indirect Parent will (A) become
party to this Agreement by executing and delivering the Joinder Agreement and
(B) become party to the Registration Rights Agreement by executing and
delivering the Registration Rights Agreement Joinder and (ii) the Company and
each of the Guarantors will become party to the Indenture by executing and
delivering the Supplemental Indenture, in each case, assuming the due execution
and delivery of such agreement by the other parties thereto.
 
5. Certain Agreements of the Initial Purchasers.  Each Initial Purchaser hereby
represents and agrees that it has not and will not use, authorize use of, refer
to, or participate in the planning for use of, any written communication that
constitutes an offer to sell or the solicitation of an offer to buy the
Securities other than (i) the Preliminary Offering Memorandum and the Offering
Memorandum; (ii) a written communication that contains no "issuer information"
(as defined in Rule 433(h)(2) under the Securities Act) that was not included
(including through incorporation by reference) in the Preliminary Offering
Memorandum or the Offering Memorandum; (iii) any written communication listed on
Annex A or prepared pursuant to Section 4(c) above (including any electronic
road show); (iv) any written communication prepared by such Initial Purchaser
and approved by the Company in advance in writing; or (iv) any written
communication relating to or that contains the terms of the Securities and/or
other information that was included (including through incorporation by
reference) in the Preliminary Offering Memorandum or the Offering Memorandum.
 
6. Conditions of Initial Purchasers' Obligations.  The obligation of each
Initial Purchaser to purchase Securities on the Closing Date as provided herein
is subject to the performance by the Issuer and each of the Guarantors of their
respective covenants and other obligations hereunder and to the following
additional conditions:
 
(a) Representations and Warranties.  The representations and warranties of the
Issuer and the Guarantors contained herein shall be true and correct on the date
hereof and on and as of the Closing Date; and the statements of the Note Parties
and their respective officers made in any certificates delivered pursuant to
this Agreement shall be true and correct on and as of the Closing Date.
 
 
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(b) No Downgrade.  From and after the Time of Sale and prior to the Closing Date
no downgrading shall have occurred in the rating accorded the Securities or any
other debt securities or preferred stock issued or guaranteed by the Indirect
Parent, the Company or any of their subsidiaries by any nationally recognized
statistical rating organization.
 
(c) No Material Adverse Change.  For the period from and after the signing of
this Agreement and prior to the Closing Date, no event or condition of a type
described in Section 3(f) hereof shall have occurred or shall exist, which event
or condition is not described in each of the Time of Sale Information (excluding
any amendment or supplement thereto) and the Offering Memorandum (excluding any
amendment or supplement thereto), the effect of which in the judgment of the
Representative makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the terms and in the manner
contemplated by this Agreement, the Time of Sale Information and the Offering
Memorandum.
 
(d) Officer's Certificate.  The Representative shall have received on and as of
the Closing Date a certificate of an executive officer of each of the Note
Parties who has specific knowledge of such party's financial matters and is
satisfactory to the Representative (i) confirming that such officer has
carefully reviewed the Time of Sale Information and the Offering Memorandum and,
to the best knowledge of such officer, the representations set forth in Sections
3(a) and 3(b) hereof are true and correct; (ii) confirming that the other
representations and warranties of the Issuer and the Guarantors in this
Agreement are true and correct and that the Issuer and the Guarantors have
complied with all agreements and satisfied all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date; (iii) to the
effect set forth in paragraphs (b) and (c) above; and (iv) confirming which
Guarantors, organized or incorporated outside the state of Delaware, are
"significant subsidiaries," if any, of the Issuer as such term is defined under
Rule 1-02(w) of Regulation S-X promulgated under the Securities Act.
 
(e) Comfort Letters.  On the date of this Agreement and on the Closing Date,
each of Deloitte & Touche LLP and PricewaterhouseCoopers LLP shall have
furnished to the Representative, at the request of the Company, letters, dated
the respective dates of delivery thereof and addressed to the Initial
Purchasers, in form and substance reasonably satisfactory to the Representative,
containing statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained or incorporate by
reference in each of the Time of Sale Information and the Offering Memorandum;
provided that the letter delivered on the Closing Date shall use a "cut-off"
date no more than three business days prior to the Closing Date.
 
(f) Opinion and 10b-5 Statement of Counsel for the Company and the
Guarantors.  (i) Kirkland & Ellis LLP, counsel for the Note Parties, shall have
furnished to the Representative, at the request of the Issuer, their written
opinion and 10b-5 statement, dated the Closing Date and addressed to the Initial
Purchasers, in the form attached hereto as Exhibit B (the "Kirkland
Opinions"),and (ii) Jean M. Sera, Senior Vice President and Secretary of the
Company, shall have furnished to the Representative, at the request of the
Issuer, her written opinion, dated the Closing Date and addressed to the Initial
Purchasers, in the form attached hereto as Exhibit C (the "Company Opinion").
 
 
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(g) Additional Opinions with respect to the Guarantors.  The Initial Purchasers
shall receive opinions covering the laws of organization or incorporation of
those Guarantors organized or incorporated outside the State of Delaware if any
such Guarantor is a "significant subsidiary" as such term is defined under Rule
1-02(w) of Regulation S-X promulgated under the Securities Act, either
individually or taken together with other such Guarantors, in form and substance
reasonably satisfactory to the Representative.
 
(h) Opinion and 10b-5 Statement of Counsel for the Initial Purchasers.  The
Representative shall have received on and as of the Closing Date an opinion and
10b-5 statement of Simpson Thacher & Bartlett LLP, counsel for the Initial
Purchasers, with respect to such matters as the Representative may reasonably
request, and such counsel shall have received such documents and information as
they may reasonably request to enable them to pass upon such matters.
 
(i) No Legal Impediment.  No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any federal,
state or foreign governmental or regulatory authority that would, as of the
Closing Date, prevent the issuance or sale of the Securities or the issuance of
the Guarantees or the Acquisition; and no injunction or order of any federal,
state or foreign court shall have been issued that would, as of the Closing
Date, prevent the issuance or sale of the Securities or the issuance of the
Guarantees or the Acquisition.
 
(j) Good Standing.  The Representative shall have received on and as of the
Closing Date satisfactory evidence of the good standing of each Note Party in
their respective jurisdictions of organization and their good standing in such
other jurisdictions as the Representative may reasonably request, in each case
in writing or any standard form of telecommunication, from the appropriate
governmental authorities of such jurisdictions.
 
(k) Registration Rights Agreement.  The Initial Purchasers shall have received a
counterpart of the Registration Rights Agreement that shall have been executed
and delivered by a duly authorized officer of the Issuer and each of the
Guarantors.
 
(l) DTC.  The Securities shall be eligible for clearance and settlement through
DTC.
 
(m) No Termination of Implementation Agreement. Neither AE Consolidation
Limited, on the one hand, nor Avis Europe, on the other hand, shall have
terminated the Implementation Agreement or delivered a notice to the other party
stating their intent to terminate the Implementation Agreement, nor shall the
Implementation Agreement have been amended or modified in any respect that, in
the good faith determination of the Indirect Parent, is materially adverse to
the Indirect Parent and its subsidiaries (after giving effect to the
Acquisition), taken as a whole, or to the holders of the Securities.
 
(n) Escrow Agreement.  The Initial Purchasers shall have received a copy of the
Escrow Agreement which shall have been executed and delivered by a duly
authorized officer of the Escrow Issuer, the Indirect Parent and the Escrow
Agent.
 
 
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(o) Deposit of Escrow Funds.  $4,875,000 (in addition to the proceeds from the
sale of the Securities) shall have been deposited in the escrow account
established pursuant to the Escrow Agreement by the Escrow Issuer or one of its
affiliates.
 
(p) Additional Documents.  On or prior to the Closing Date, the Issuer and the
Guarantors shall have furnished to the Representative such further certificates
and documents as the Representative may reasonably request.
 
All opinions, letters, certificates and evidence mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.
 
7. Indemnification and Contribution.
 
(a) Indemnification of the Initial Purchasers.  The Issuer and each of the
Guarantors jointly and severally agree to indemnify and hold harmless each
Initial Purchaser, its affiliates, directors and officers and each person, if
any, who controls such Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, legal
fees and other expenses reasonably incurred in connection with any suit, action
or proceeding or any claim asserted, as such fees and expenses are incurred),
joint or several, that arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum, any of the other Time of Sale Information, any Issuer
Written Communication or the Offering Memorandum (or any amendment or supplement
thereto) or any omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case except
insofar as such losses, claims, damages or liabilities arise out of, or are
based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating
to any Initial Purchaser furnished to the Issuer in writing by such Initial
Purchaser through the Representative expressly for use therein
 
(b) Indemnification of the Issuer and the Guarantors.  Each Initial Purchaser
agrees, severally and not jointly, to indemnify and hold harmless the Issuer,
each of the Guarantors, each of their respective directors and officers and each
person, if any, who controls the Issuer or any of the Guarantors within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the indemnity set forth in paragraph (a) above, but only with
respect to any losses, claims, damages or liabilities that arise out of, or are
based upon, any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any information relating
to such Initial Purchaser furnished to the Issuer in writing by such Initial
Purchaser through the Representative expressly for use in the Preliminary
Offering Memorandum, any of the other Time of Sale Information, any Issuer
Written Communication or the Offering Memorandum (or any amendment or supplement
thereto), it being understood and agreed that the only such information
furnished by any Initial Purchaser consists of the following: the information
contained in (i) the first sentence in the third paragraph, (ii) the fourth and
fifth sentences under the eighth paragraph, (iii) the tenth paragraph (which
shall be deemed to include the three bullet point sentences immediately
thereunder), and (iv) the
 
 
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third and fourth sentences of the eleventh paragraph under the heading "Plan of
Distribution" in the Preliminary Offering Memorandum and the Offering
Memorandum.
 
(c) Notice and Procedures.  If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnification may
be sought (the "Indemnifying Person") in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under paragraph (a) or (b) above except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided, further, that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have to
an Indemnified Person otherwise than under paragraph (a) or (b) above.  If any
such proceeding shall be brought or asserted against an Indemnified Person and
it shall have notified the Indemnifying Person thereof, the Indemnifying Person
shall retain counsel reasonably satisfactory to the Indemnified Person (who
shall not, without the consent of the Indemnified Person, be counsel to the
Indemnifying Person) to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 7 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such
proceeding and shall pay the reasonable fees and expenses of such counsel
related to such proceeding, as incurred.  In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary; (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person; (iii) the Indemnified Person shall have reasonably concluded that there
may be legal defenses available to it that are different from or in addition to
those available to the Indemnifying Person; or (iv) the named parties in any
such proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them.  It is understood and agreed that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm (in addition to any local counsel) for all Indemnified Persons,
and that all such reasonable fees and expenses shall be reimbursed as they are
incurred.  Any such separate firm for any Initial Purchaser, its affiliates,
directors and officers and any control persons of such Initial Purchaser shall
be designated in writing by the Representative and any such separate firm for
the Issuer, the Guarantors, their respective directors and officers and any
control persons of the Issuer and the Guarantors shall be designated in writing
by ABCR.  The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment.  Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for reasonable fees
and expenses of counsel as contemplated by this paragraph, the Indemnifying
Person shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by the Indemnifying Person of such request, (ii) the Indemnifying Person
shall not have reimbursed the
 
 
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Indemnified Person in accordance with such request prior to the date of such
settlement unless such fees and expenses are being disputed in good faith, and
(iii) the Indemnified Person shall have given at least 30 days written notice of
its intention to settle.  No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification is or could have been sought hereunder by
such Indemnified Person, unless such settlement (x) includes an unconditional
release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (y) does not include any statement as
to or any admission of fault, culpability or a failure to act by or on behalf of
any Indemnified Person.
 
(d) Contribution.  If the indemnification provided for in paragraphs (a) and (b)
above is unavailable to or insufficient to hold harmless an Indemnified Person
or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraph, in lieu
of indemnifying such Indemnified Person thereunder, shall contribute to the
aggregate amount paid or payable by such Indemnified Person, as incurred, as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Issuer and the
Guarantors on the one hand and the Initial Purchasers on the other from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) but also the relative fault of the Issuer and the Guarantors on the one hand
and the Initial Purchasers on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations.  The relative benefits received
by the Issuer and the Guarantors on the one hand and the Initial Purchasers on
the other shall be deemed to be in the same respective proportions as the net
proceeds (before deducting expenses) received by the Issuer from the sale of the
Securities pursuant to this Agreement and the total discounts and commissions
received by the Initial Purchasers in connection therewith, as provided in this
Agreement, bear to the aggregate initial offering price of the Securities.  The
relative fault of the Issuer and the Guarantors on the one hand and the Initial
Purchasers on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Issuer or any Guarantor or by the Initial Purchasers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
 
(e) Limitation on Liability.  The Issuer, the Guarantors and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above.  The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Person in connection with investigating, defending or preparing
to defend any such action or claim.  Notwithstanding the provisions of this
Section 7, in no event shall an Initial Purchaser be required to contribute any
amount in excess of the amount by which the total discounts and commissions
received by such
 
 
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Initial Purchaser with respect to the offering of the Securities exceeds the
amount of any damages that such Initial Purchaser has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission.  No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.  The Initial
Purchasers' obligations to contribute pursuant to this Section 7 are several in
proportion to their respective purchase obligations hereunder and not joint.
 
(f) Non-Exclusive Remedies.  The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies that may otherwise be
available to any Indemnified Person at law or in equity.
 
8. Effectiveness of Agreement.  This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
 
9. Termination.  This Agreement may be terminated in the absolute discretion of
the Representative, by notice to the Issuer, if after the execution and delivery
of this Agreement and on or prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on the New York Stock Exchange
or Nasdaq Stock Market; (ii) trading of any securities issued or guaranteed by
the Company or any of the Guarantors shall have been suspended on any exchange
or in any over-the-counter market; (iii) a general moratorium on commercial
banking activities shall have been declared by federal or New York State
authorities; (iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis, either
within or outside the United States, that, in the judgment of the
Representative, is material and adverse to, and makes it impracticable or
inadvisable to proceed with, the offering, sale or delivery, of the Securities
on the terms and in the manner contemplated by this Agreement, the Time of Sale
Information and the Offering Memorandum; or (v) the representation in Section
3(a) is incorrect in any respect.
 
10. Defaulting Initial Purchaser.  (a)  If, on the Closing Date, any Initial
Purchaser defaults on its obligation to purchase the Securities that it has
agreed to purchase hereunder, the non-defaulting Initial Purchasers may in their
discretion arrange for the purchase of such Securities by other persons
satisfactory to the Issuer on the terms contained in this Agreement.  If, within
36 hours after any such default by any Initial Purchaser, the non-defaulting
Initial Purchasers do not arrange for the purchase of such Securities, then the
Issuer shall be entitled to a further period of 36 hours within which to procure
other persons satisfactory to the non-defaulting Initial Purchasers to purchase
such Securities on such terms.  If other persons become obligated or agree to
purchase the Securities of a defaulting Initial Purchaser, either the
non-defaulting Initial Purchasers or the Issuer may postpone the Closing Date
for up to five full business days in order to effect any changes that in the
opinion of counsel for the Issuer or counsel for the Initial Purchasers may be
necessary in the Time of Sale Information, the Offering Memorandum or in any
other document or arrangement, and the Indirect Parent and the Issuer agrees to
promptly prepare any amendment or supplement to the Time of Sale Information or
the Offering Memorandum that effects any such changes.  As used in this
Agreement, the term "Initial Purchaser" includes, for all purposes of this
Agreement unless the context otherwise requires, any person not listed in
Schedule 1 hereto that, pursuant to this Section 10, purchases Securities that a
defaulting Initial Purchaser agreed but failed to purchase.
 
 
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(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Issuer as provided in paragraph (a)
above, the aggregate principal amount of such Securities that remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
all the Securities, then the Issuer shall have the right to require each
non-defaulting Initial Purchaser to purchase the principal amount of Securities
that such Initial Purchaser agreed to purchase hereunder plus such Initial
Purchaser's pro rata share (based on the principal amount of Securities that
such Initial Purchaser agreed to purchase hereunder) of the Securities of such
defaulting Initial Purchaser or Initial Purchasers for which such arrangements
have not been made.
 
 
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Issuer as provided in paragraph (a)
above, the aggregate principal amount of such Securities that remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all the
Securities, or if the Issuer shall not exercise the right described in paragraph
(b) above, then this Agreement shall terminate without liability on the part of
the non-defaulting Initial Purchasers.  Any termination of this Agreement
pursuant to this Section 10 shall be without liability on the part of the Issuer
or the Guarantors, except that the Issuer and each of the Guarantors will
continue to be liable for the payment of expenses as set forth in Section 11
hereof and except that the provisions of Section 7 hereof shall not terminate
and shall remain in effect.
 
 
(d) Nothing contained herein shall relieve a defaulting Initial Purchaser of any
liability it may have to the Issuer, the Guarantors or any non-defaulting
Initial Purchaser for damages caused by its default.
 
 
11. Payment of Expenses.  (a)  Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the Issuer and
each of the Guarantors jointly and severally agree to pay or cause to be paid
all costs and expenses incident to the performance of their respective
obligations hereunder, including, without limitation, (i) the costs incident to
the authorization, issuance, sale, preparation and delivery of the Securities
and any taxes payable in that connection; (ii) the costs incident to the
preparation and printing of the Preliminary Offering Memorandum, any other Time
of Sale Information, any Issuer Written Communication and the Offering
Memorandum (including any amendments or supplements thereto) and the
distribution thereof; (iii) the costs of reproducing and distributing each of
the Transaction Documents; (iv) the fees and expenses of the Issuer's and the
Guarantors' counsel and independent accountants; (v) the fees and expenses
incurred in connection with the registration or qualification and determination
of eligibility for investment of the Securities under the laws of such
jurisdictions as the Representative may designate and the preparation, printing
and distribution of a Blue Sky Memorandum (including the related fees and
expenses of counsel for the Initial Purchasers); (vi) any fees charged by rating
agencies for rating the Securities; (vii) the fees and expenses of the Trustee
and any paying agent (including related fees and expenses of any counsel to such
parties); (viii) all expenses and application fees incurred in connection with
the approval of the Securities for book-entry transfer by DTC; and (ix) 50% of
all expenses incurred by the Company in connection with any "road show"
presentation to potential investors.
 
 
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(b) If (i) this Agreement is terminated pursuant to Section 9 (other than
pursuant to clause (v) of Section 9 if the Issuer and the Initial Purchasers
subsequently enter into another agreement for the Initial Purchasers to purchase
the same or substantially similar securities of the Issuer), (ii) the Issuer for
any reason fails to tender the Securities for delivery to the Initial Purchasers
or (iii) the Initial Purchasers decline to purchase the Securities for any
reason permitted under this Agreement, the Issuer and each of the Guarantors
jointly and severally agree to reimburse the Initial Purchasers for all
out-of-pocket costs and expenses (including the fees and expenses of their
counsel) reasonably incurred by the Initial Purchasers in connection with this
Agreement and the offering contemplated hereby.
 
12. Persons Entitled to Benefit of Agreement.  This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and any controlling persons referred to herein, and the affiliates,
officers and directors of each Initial Purchaser referred to in Section 7
hereof.  Nothing in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein.  No purchaser of Securities
from any Initial Purchaser shall be deemed to be a successor merely by reason of
such purchase.
 
13. Survival.  The respective indemnities, rights of contribution,
representations, warranties and agreements of the Issuer, the Guarantors and the
Initial Purchasers contained in this Agreement or made by or on behalf of the
Issuer, the Guarantors or the Initial Purchasers pursuant to this Agreement or
any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any termination of this Agreement or any investigation made by or on behalf
of the Issuer, the Guarantors or the Initial Purchasers.
 
14. Certain Defined Terms.  For purposes of this Agreement, (a) except where
otherwise expressly provided, the term "affiliate" has the meaning set forth in
Rule 405 under the Securities Act; (b) the term "business day" means any day
other than a day on which banks are permitted or required to be closed in New
York City; and (c) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act.
 
15. Governing Law Provisions.  (a)  Governing Law.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
 
(b) Consent to Jurisdiction.  Any legal suit, action or proceeding arising out
of or based upon this Agreement or the transactions contemplated hereby
("Related Proceedings") may be instituted in the federal courts of the United
States of America located in the City and County of New York or the courts of
the State of New York in each case located in the City and County of New York
(collectively, the "Specified Courts"), and each party irrevocably submits to
the exclusive jurisdiction (except for suits, actions, or proceedings instituted
in regard to the enforcement of a judgment of any Specified Court in a Related
Proceeding, as to which such jurisdiction is non-exclusive) of the Specified
Courts in any Related Proceeding.  Service of any process, summons, notice or
document by mail to such party's address set forth above shall be effective
service of process for any Related Proceeding brought in any Specified
Court.  The parties irrevocably and unconditionally waive any objection to the
laying of venue of any
 
 
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Specified Proceeding in the Specified Courts and irrevocably and unconditionally
waive and agree not to plead or claim in any Specified Court that any Related
Proceeding brought in any Specified Court has been brought in an inconvenient
forum.
 
16. Miscellaneous.  (a)  Authority of the Representative.  Any action by the
Initial Purchasers hereunder may be taken by the Representative on behalf of the
Initial Purchasers, and any such action taken by the Representative shall be
binding upon the Initial Purchasers.
 
(b) Notices.  All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication.  Notices to the Initial
Purchasers shall be given to the Representative c/o Morgan Stanley & Co. LLC,
1585 Broadway, New York, New York 10036 (Email: prospectus@morganstanley.com);
Attention: Dominick Ruscitti.  Notices to the Company and the Guarantors shall
be given to them at One Campus Drive, Parsippany, NJ 07054 (fax: 973-496-5080);
Attention: Treasurer.
 
(c) Entire Agreement.  This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof.
 
(d) Counterparts.  This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.  Delivery of an executed counterpart of a signature page to
this Agreement by telecopier, facsimile or other electronic transmission (i.e.,
a "pdf" or "tif") shall be effective as delivery of a manually executed
counterpart thereof.
 
(e) Amendments or Waivers.  No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
 
(f) Headings.  The headings herein are included for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
 
(g) Partial Unenforceability.  The invalidity or unenforceability of any
section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other section, paragraph or provision hereof.  If any
section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
 
 
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If the foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided below.

Very truly yours,

 
 
 
By
AE ESCROW CORPORATION
 
 /s/ David T. Calabria
     
Name: David T. Calabria
Title:   Vice President and Assistant Treasurer
 

 

 
 
 
By
AVIS BUDGET GROUP, INC.
 
/s/ David B. Wyshner
     
Name: David B. Wyshner
Title:   Executive Vice President and Chief Financial Officer
 

 
 
 

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The foregoing Agreement is hereby confirmed and accepted by the Initial
Purchasers as of the date first written above.
 
 
 
 
 
 
 
By
MORGAN STANLEY & CO. LLC
 
For itself and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.
 
 Justin Kotzin
 
 
   
Authorized Signatory