Exhibit 10.22


 


BNY Trust Company of Canada,

as trustee of Canadian Master Trust

c/o BMO Nesbitt Burns Inc.

3rd Floor Podium

1 First Canadian Place

Toronto, ON M5X 1H3


 


and


 


NT Limited Partnership

c/o National Car Rental
(Canada) Inc.
280 Atwell Drive
Etobicoke, Ontario M9W 5B2


 


	
   

  	
  October 14, 2003

  



 


Dear Sirs:


 


NT Limited Partnership (the “Partnership”)


 


Reference
is made to the Fourth Amended and Restated Limited Partnership Agreement made
as of March 13, 1997 and executed October 14, 2003 between our wholly-owned
subsidiary, National Car Rental (Canada) Inc. (“National”)
as general partner, 1487792 Ontario Inc. (“AGP”) as
additional general partner and BNY Trust Company of Canada, as trustee of
Canadian Master Trust (in such capacity, “CMT”) as
limited partner, as amended from time to time (the “Limited
Partnership Agreement”), and the Lease made as of May 22, 1998
between NT Limited Partnership (the “Partnership”)
and Alamo Rent-A-Car (Canada) Inc. (“Alamo”), as
amended from time to time (the “Alamo Lease”).
Terms capitalized but not defined herein or in Schedule A hereto shall have the
meanings ascribed to them in the Limited Partnership Agreement.


 


In
order to induce CMT and the Partnership to agree to enter into the Limited
Partnership Agreement and the Alamo Lease, respectively, and in consideration
of the sum of $1.00 received from each of CMT and the Partnership, Vanguard Car
Rental USA Holdings Inc. (“Vanguard”)
hereby covenants and agrees with and in favour of CMT and the Partnership as
follows for so long as the Limited Partnership Agreement or the Alamo Lease
remains in force:


 


1.             Vanguard will own beneficially, directly or indirectly,
all of the outstanding shares in the capital of National and Alamo.


 


2.             Vanguard irrevocably and
unconditionally guarantees the performance by National of its obligations under
the Limited Partnership Agreement, including, without limitation, its obligation
to pay the insurance premiums referred to in subsection 5.2(o) of the Limited Partnership
Agreement, and neither the Partnership nor CMT shall be required to exhaust any
remedies against National as a pre-condition to calling for performance of the guarantee.


 

















 


3.                                       (a)                                  Vanguard hereby covenants and agrees that it
will keep in place insurance coverage for the benefit of the Partnership with
financially sound and reputable insurers in respect of the assets and business
of the Partnership against loss or damage of the kinds customarily insured
against by firms of established reputation engaged in the same or similar businesses
and similarly situated as the Partnership, of such types and in such amounts as
are customarily carried under similar circumstances by such other firms; provided, however, that Vanguard shall at
all times maintain for the benefit of the Partnership excess automobile
liability insurance coverage in an amount at least U.S. $50.000,000 greater
than the amount of self-insurance retained pursuant to this paragraph for any
claims of liability against the Partnership relating to its ownership or use of
Vehicles.


 


(b)                                 Certain of the Vanguard U.S. subsidiaries are
currently parties to a fronting arrangement with American International Group and
its subsidiaries for automobile liability insurance for certain United States
exposures in certain of the states of the United States. This fronting
arrangement is and will continue to be secured by collateral (in form and
amount acceptable to the carrier) on deposit with the carrier.


 


(c)                                  Vanguard will cause each insurance policy or
policies referred to in paragraphs 3(a) and (b) above to provide for at least
thirty (30) days prior written notice to the Securitization Agent of any
termination of or proposed cancellation or non-renewal of such policy and that
each insurance policy insuring Partnership Vehicles names the Partnership as an
additional insured or loss payee, as appropriate, pursuant to certificates in
form and substance reasonably satisfactory to the Securitization Agent.


 


4.                                       Vanguard represents and warrants that this
agreement has been duly authorized and executed by Vanguard and is enforceable
against Vanguard in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization and moratorium laws.


 


5.                                       Vanguard hereby covenants and agrees that it
shall not take any action or direct National to take any action that would have
the effect of reducing the Tangible Net Worth of National below the amount
referred to in subsection 2.8(e) of the Limited Partnership Agreement.


 


6.                                       Vanguard hereby covenants and agrees that
Vanguard Car Rental USA, Inc. (“Vanguard USA”)
shall at all times maintain a consolidated net worth (as such term is defined
in the Loan Agreements) equal to at least US$180,000,000.


 


7.                                       Vanguard represents and warrants that
financial covenants granted in favour of CMT herein, including, for greater
certainty, the amount of consolidated net worth required to be maintained
pursuant to paragraph 6 above, are and at all times shall be no less favourable
than those financial covenants granted to any lender by either Vanguard USA


 


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or Vanguard, such lenders to include, for
greater certainty, the lenders under each Loan Agreement.


 


8.                                       Vanguard hereby covenants and agrees that it
shall deliver to CMT and the Rating Agency the following:


 


(a)                                  a copy of the income and cash flow statements
and balance sheet of Vanguard, within 60 days of the end of each fiscal
quarter, and


 


(b)                                 a copy of the audited income and cash flow
statements and balance sheet of Vanguard, within 120 days of the end of each
fiscal year.


 


9.                                       Vanguard represents and warrants that the
transactions contemplated by the Asset Purchase Agreement have closed and that
the Loan Agreements have been entered into by the parties thereto and remain in
good standing without default as of the date hereof.


 


10.                                 Vanguard hereby covenants and agrees,
forthwith upon becoming aware of any “Default” or “Event of Default”, as
defined in and under any of the Loan Agreements, to deliver a certificate of an
officer of Vanguard or Vanguard USA, as the case may be, to CMT and the Rating
Agency specifying such Default or Event of Default, as the case may be, together
with a statement of such certifying officer setting forth details of such
Default or Event of Default and the action which has been, or is proposed to
be, taken with respect thereto.


 


This
agreement shall be governed by and construed in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable therein.


 


Yours truly,


 


	
  Vanguard Car Rental USA Holdings Inc.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Leland Wilson

  
	
  Name:

  	
  Leland
  Wilson

  
	
  Title:

  	
  Senior Vice President

  



 


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  Agreed this 14th day of October, 2003

  
	
   

  
	
   

  
	
  National
  Car Rental (Canada) Inc.,

  
	
   

  
	
  by:

  	
  /s/ Peter Chung

  
	
   

  	
   

  
	
  Name:

  	
  Peter Chung

  
	
  Title:

  	
  Vice-President and Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  BNY Trust
  Company of Canada,

  
	
  as trustee of Canadian
  Master Trust

  
	
  (with liability limited to
  the assets of the Trust)

  
	
  by its Securitization
  Agent, BMO NESBITT BURNS INC.

  
	
   

  
	
   

  
	
  by:

  	
  /s/ Paul Smeeton

  
	
   

  	
   

  
	
  Name:

  	
  Paul Smeeton

  
	
  Title:

  	
  Executive Managing
  Director

  Securitization and Structured Finance

  
	
   

  
	
   

  
	
  by:

  	
  /s/ Jerry Marriott

  
	
   

  	
   

  
	
  Name:

  	
  Jerry Marriott

  
	
  Title:

  	
  Vice President,

  Securitization and Structured Finance

  
	
   

  
	
   

  
	
  1487792 Ontario
  Inc.,

  
	
   

  
	
   

  
	
  by:

  	
  /s/ Ian Bandeen

  
	
   

  	
   

  
	
  Name:

  	
  Ian Bandeen

  
	
  Title:

  	
  President

  



 


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SCHEDULE A

Defined Terms


 


“Asset Purchase Agreement” means
the asset purchase agreement between ANC Rental Corporation, Car Acquisition
Company LLC, Cerberus Capital Management, L.P. and those parties listed on the
signature pages thereof as debtors in possession, dated as of June 12, 2003 and
approved by the United States Bankruptcy Court for the district of Delaware on
August 21, 2003;


 


“Cerberus Facilities” mean,
collectively, (1) the Financing Agreement, dated as of October 14, 2003, by and
among Vanguard, Vanguard Car Rental USA Inc., and certain of their
subsidiaries, Congress Financial Corporation (Florida), and Madeleine LLC, (2)
the Note Purchase Agreement, dated as of October 14, 2003, for the 15% Secured
Junior Subordinated Notes due 2008; (3) the Note Purchase Agreement, dated as
of October 14, 2003, for the 15% Secured Junior Subordinated Notes due 2008
(Vanguard Holdings); and (4) the Note Purchase Agreement, dated as of October
14, 2003, for the 14.5% Secured Senior Subordinated Notes due 2008;


 


“DaimlerChrysIer Services Facility”
means the Financing Agreement dated as of October
      , 2003,
between National Rental Group Financing Inc. and DaimlerChrysler Services North
America LLC, and the other Transaction Documents referred to therein;


 


“GMAC Financing”
means the Series 2003-2 Note Purchase Agreement, dated as of October 14, 2003
among General Motors Acceptance Corporation, Vanguard Car Rental USA Inc. and
Vanguard SPE I Inc., and the Related Documents referred to therein;


 


“Loan Agreements” means, collectively, the Cerberus Facilities, the DaimlerChrysler
Services Facility, the GMAC Financing and the MBIA Insured Financing; and


 


“MBIA Insured Financing” means the Series 1999-1 6.02% Rental Car Asset Backed Notes, Class
A-3; the Series 1999-3 Floating Rate Car Asset Backed Notes and the Series
2001-2 Floating Rate Rental Car Asset Backed Notes, and the documents relating
thereto.