Exhibit 10.14


 


Execution Version


 


GENERAL
SECURITY AGREEMENT


 


THIS AGREEMENT is
made as of June 14, 2006.


 


	
  TO:

  	
   

  	
  BANK OF
  MONTREAL, as
  Canadian Agent for itself and the other

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lenders

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (the “Lender”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  100 King Street West, 21st
  floor, First Canadian Place

  
	
   

  	
   

  	
  Toronto, Ontario, MSX 1A1

  
	
   

  	
   

  	
   

  
	
  GRANTED
  BY:

  	
   

  	
  ALAMO
  RENT-A-CAR (CANADA), INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (the “Grantor”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  having its principal
  office or place of business at:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  280 Attwell Drive,
  Etobicoke, Ontario, Canada M9W 5B2

  



 


RECITALS


 


A.            National Car Rental (Canada) Inc. and the Lender are,
with other persons, parties to the Credit Agreement (as defined below).


 


B.            The Grantor has entered into a Guarantee and Collateral
Agreement (as defined below) in favour of Goldman Sachs Credit Partners L.P.,
as Administrative Agent under the Credit Agreement.


 


C.            The Grantor is entering into this Agreement as security for
the payment and performance of the Obligations (as defined below).


 


ARTICLE 1


 


DEFINITIONS


 


1.1          Defined Terms


 


Unless the context otherwise
requires or unless otherwise specified, all the terms used in this Agreement
without initial capitals which are defined in the Personal Property Security Act (Ontario) (the “PPSA”), have
the same meanings in this Agreement as in the PPSA.


 


1.2          Definitions


 


Wherever used in this
Agreement, the following words and terms have the meanings set out below:


 


ALAMO RENT-A-CAR (CANADA), INC. GSA


 

















 


“Account Debtor” means any Person who becomes obligated to the Grantor under, with
respect to, or on account of, an Account Receivable;


 


“Accounts Receivable” means all “accounts”, as such term is defined
in the PPSA, now or in the future owned by the Grantor, and includes without
limitation, all accounts receivable, other receivables, book debts, claims and
other forms of monetary obligation now or in the future owned, received or
acquired by, or belonging or owing to, the Grantor, whether arising out of
goods sold or services rendered by it, or from any other transaction, and “Account
Receivable” means any one of them;


 


“Business Day” means any day, other than a Saturday or Sunday, on which the Bank of
Montreal in Toronto is open for commercial banking business during normal
banking hours;


 


“Chattel Paper” means all or any part of any present or future interest of the Grantor
in chattel paper;


 


“Contracts” means any contracts, agreements, indentures, licences, commitments,
entitlements, engagements or other arrangements, whether written or unwritten,
to which the Grantor is now or subsequently a party or has a benefit, right, or
in which the Grantor now or subsequently has an interest;


 


“Credit Agreement” means the agreement dated as of June 14, 2006 among, inter alia, National Car Rental (Canada) Inc., as Canadian Borrower,
various lenders, J.P. Morgan Securities Inc., and Lehman Brothers Inc., as
Joint Lead Arrangers and Joint Bookrunners, Goldman Sachs Credit Partners L.P. and JPMorgan Chase Bank, N.A., as
Co-Syndication Agents, Lehman Commercial Paper Inc., Bank of Montreal and
Wachovia Bank, N.A., as Co-Documentation Agents, and Goldman Sachs Credit
Partners L.P., as Administrative Agent, as amended, supplemented or otherwise
modified from time to time.


 


“Documents of Title” means all or any part of any documents of
title, whether negotiable or non-negotiable, including, without limitation, all
warehouse receipts and bills of lading, in which the Grantor now or
subsequently has an interest;


 


“Equipment” means all goods in which the Grantor now or subsequently has an
interest other than Inventory or consumer goods and any part of such Inventory
or consumer goods, including, without limitation, all tools, apparatus,
fixtures, plant, machinery and furniture;


 


“Guarantee and Collateral Agreement” means the agreement dated as of June 14, 2006
given by Vanguard Car Rental USA Holdings Inc., as US Borrower, and each
Guarantor (as such term is defined in the Credit Agreement), as amended,
supplemented or otherwise modified from time to time.


 


“Instruments” means all or any part of any letters of
credit, advices of credit, electronic notation held at CDS and other
instruments in which the Grantor now or subsequently has an interest;


 


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“Intangibles” means all intangible property of whatever kind in which the Grantor now
or subsequently has an interest, including, without limitation, all of the
Grantor’s rights under Contracts, Intellectual Property Rights, Technical
Information, permits, quotas;


 


“Intellectual Property Rights” means all trade-marks, trade-names, brands,
trade dress, business names, uniform resource locators (“URL”), domain names,
tag lines, designs, graphics, logos and other commercial symbols and indicia of
origin, goodwill, patents and inventions, copyrights, industrial designs, and
other intellectual property rights, whether registered or not or the subject of
a pending application for registration, owned by or licensed to the Grantor;


 


“Inventory” means all inventory (as defined in the
PPSA), including without limitation, raw materials, works-in-progress, finished
goods and by-products, spare parts, operating supplies, packing, shipping and
packaging materials of or relating to the business of the Grantor;


 


“Liens” means mortgages, pledges, liens, hypothecs, charges, security
agreements or other encumbrances or other arrangements that in substance secure
payment or performance of an obligation, statutory and other non-consensual
liens or encumbrances and includes lease, title retention agreements,
restrictions, development or similar agreements, rights-of-way, title defect,
adverse claims or interests, trusts or deemed trusts, options to acquire or the
interests of a vendor or lessor under any conditional sale agreement or capital
lease, and “Lien” means any one of such Liens;


 


“Money” means all or any part of any money in which
the Grantor now or subsequently has an interest;


 


“Obligations” has the meaning specified in Section 3.1;


 


“Permitted Liens” means those liens which are permitted in accordance with s.7.3 of the Credit Agreement;


 


“Person” means any individual, sole proprietorship, partnership, firm, entity,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, body corporate, government, government regulatory
authority, governmental department, agency, commission, board, tribunal,
dispute settlement panel or body, bureau, court, and where the context
requires, any of them when they are acting as trustee, executor, administrator
or other legal representative;


 


“Proceeds” means all proceeds and personal property in any form derived directly
or indirectly from any dealing with all or any part of the Secured Property and
any insurance or payment that indemnifies or compensates for such property
lost, damaged or destroyed, and proceeds of proceeds and any part of any such
proceeds;


 


“Secured Property” means all of the Grantor’s undertaking, property and assets, now owned
or subsequently acquired, including, without limitation, all personal property,
Accounts, Chattel Paper, Contracts, Documents of Title, Equipment, Intangibles,
Instruments, Inventory, Money, Securities and Proceeds, together with all
increases,


 


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additions
and accessions to any of them, and all substitutions or any replacements of any
of them;


 


“Securities” means all or any part of any shares, limited partnership units, trust
units, stock, warrants, bonds, debentures, debenture stock and other security
in which the Grantor now or subsequently has an interest;


 


“Security Interest” means the security interest granted under Section 2.1;


 


“Technical Information” means all know-how and information owned by
or licensed to the Grantor, confidential or otherwise, including, without
limitation, and any information of a scientific, technical, financial or
business nature regardless of its form.


 


1.3          Certain Rules of Interpretation


 


In this Agreement:


 


(a)                                  Governing Law - This Agreement is a contract made under
and shall be governed by and construed in accordance with the law of the
Province of Ontario and the federal laws of Canada applicable in the Province
of Ontario.


 


(b)                                 Headings - Headings of Articles and Sections are
inserted for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.


 


(c)                                  Including - Where the word “including” or “includes”
is used in this Agreement, it means “including (or includes) without limitation”.


 


(d)                                 No Strict Construction - The language used in this Agreement is the
language chosen by the parties to express their mutual intent, and no rule of
strict construction shall be applied against any party.


 


(e)                                  Number and Gender - Unless the context otherwise requires,
words importing the singular include the plural and vice versa and words
importing gender include all genders.


 


(f)                                    Severability - If, in any jurisdiction, any provision of
this Agreement or its application to any party or circumstance is restricted,
prohibited or unenforceable, such provision shall, as to such jurisdiction, be
ineffective only to the extent of such restriction, prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement and without affecting the validity or enforceability of such
provision in any other jurisdiction or without affecting its application to
other parties or circumstances.


 


(g)                                 Statutory references - A reference to a statute includes all
regulations made pursuant to such statute and, unless otherwise specified, the
provisions of any statute or regulation which amends, supplements, supersedes
or succeeds any such statute or any such regulation.


 


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(h)                                 Time - Time is of the essence in the performance
of the parties’ respective obligations.


 


(i)                                     References to Agreements - The term “this Agreement” refers to this
agreement including all schedules, amendments, supplements, extensions,
renewals, replacements, novations or restatements from time to time, in each
case as permitted, and references to “Articles” or “Sections” means the
specified Articles or Sections of this Agreement.


 


(j)                                     Paramountcy - If there is a conflict, inconsistency,
ambiguity or difference between any provision of this Agreement and the Credit
Agreement, the provisions of the Credit Agreement shall prevail, and such
provision of this Agreement be amended to the extent only to eliminate any such
conflict, inconsistency, ambiguity or difference. Any right or remedy in this
Agreement which may be in addition to the rights and remedies contained in the
Credit Agreement shall not constitute a conflict, inconsistency, ambiguity or
difference.


 


1.4          Entire Agreement


 


This Agreement and the Credit Agreement and
the agreements and other documents required to be delivered pursuant to this
Agreement and the Credit Agreement, constitute the entire agreement between the
parties and set out all the covenants, promises, warranties, representations,
conditions, understandings and agreements between the parties pertaining to the
subject matter of this Agreement and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written. There
are no covenants, promises, warranties, representations, conditions,
understandings or other agreements, oral or written, express, implied or
collateral between the parties in connection with the subject matter of this Agreement
except as specifically set forth in this Agreement and the Credit Agreement and
any document required to be delivered pursuant to this Agreement.


 


ARTICLE 2


SECURITY INTERESTS


 


2.1          Security Interest


 


As continuing security for
the repayment and the performance of each of the Obligations of the Grantor to
the Lender, the Grantor grants to the Lender a continuing, specific and fixed
security interest in all of the Grantor’s property, assets, rights and
undertaking of every nature and kind, now owned or subsequently acquired and at
any time and from time to time existing or in which the Grantor has or acquires
an interest, wherever situate, including, without limitation, all of the
Secured Property.


 


2.2          Fixed Nature of Security Interests


 


The Security Interest is
intended to operate as a fixed and specific charge of all of the Secured
Property presently existing, and with respect to all future Secured Property,
to operate as a fixed and specific charge of such future Secured Property.


 


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2.3          Attachment


 


The Grantor acknowledges
that value has been given. The Security Interest is intended to attach, as to
all of the Secured Property, upon the execution by the Grantor of this
Agreement.


 


2.4          Leases


 


The last day of any term
reserved by any lease, written or unwritten, or any agreement to lease, now
held or subsequently acquired by the Grantor is excepted out of the Security
Interests. As further security for the payment of the Obligations, the Grantor
agrees that it will stand possessed of the reversion of such last day of the
term and shall hold it in trust for the Lender for the purpose of this
Agreement. The Grantor shall assign and dispose of the same in such manner as
the Lender may from time to time direct in writing without cost or expense to
the Lender. Upon any sale, assignment, sublease or other disposition of such
lease or agreement to lease, the Lender shall, for the purpose of vesting the
residue of any such term in any purchaser, sublessee or such other acquiror of
the lease, agreement to lease or any interest in any of them, be entitled by
deed or other written instrument to assign to such other person, the residue of
any such term in place of the Grantor and to vest the residue freed and discharged
from any obligation whatsoever respecting the same.


 


2.5          Consent


 


Nothing in this Agreement
shall constitute an assignment or attempted assignment of any contract or
agreement which by its provisions or by law is not assignable or which requires
the consent of a third party to its assignment unless such consent has been
obtained. In each such case, the Grantor shall, unless the Lender otherwise
agrees in writing, promptly, upon written request by the Lender, attempt to
obtain the consent of any necessary third party to its assignment under this
Agreement and to its further assignment by the lender to any third party as a
result of the exercise by the Lender of remedies after demand. Upon such
consent being obtained or waived, this Agreement shall apply to the applicable
contract or agreement without regard to this section and without the necessity
of any further assurance to effect such assignment. Unless and until the
consent to assignment is obtained as provided above, the Grantor shall, to the
extent it may do so at law or pursuant to the provisions of the contract or
interest in question hold all benefit to be derived from such contracts or
agreements in trust for the Lender (including, without limitation, the Grantor’s
beneficial interest in any contract or agreement which may be held in trust for
the Grantor by a third party), as additional security for payment of
Obligations and shall deliver up all such benefit to the Lender, promptly upon
demand by the Lender.


 


ARTICLE 3 


OBLIGATIONS SECURED


 


3.1          Obligations


 


The Secured Property
constitutes and will constitute continuing security for the following
obligations (the “Obligations”) of the Grantor to the Lender:


 


(a)                                  Indebtedness - The prompt payment, as and when due and
payable, of all amounts now or subsequently owing by the Grantor to the Lender,
including by


 


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way
of guarantee or indemnity, matured or unmatured, direct, indirect or
contingent, including any amendments, restatements, supplements, extensions,
renewals and replacements of any such obligations; and


 


(b)                                 Performance of Agreements - The strict performance and observance by
the Grantor of all agreements, warranties, representations, covenants and
conditions of the Grantor made pursuant to this Agreement or any other
agreement between the Grantor and the Lender, in each case as now in effect or
as subsequently entered into, amended, restated, supplemented, renewed,
extended or replaced from time to time.


 


ARTICLE 4


GRANTOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS


 


4.1          Representations and Warranties


 


The Grantor represents and
warrants to the Lender the matters set out below:


 


(a)                                  Registrations and Licenses - Neither the nature of its business nor the
location or character of the assets owned or leased by it relating to its
business requires it to be registered, licensed or otherwise qualified as an
extra-provincial or foreign corporation in any jurisdiction in Canada other
than in the Provinces of Ontario, Quebec, Manitoba, Saskatchewan, British
Columbia, Alberta, New Brunswick, Nova Scotia, Prince Edward Island,
Newfoundland & Labrador, the Yukon Territory, Nunavut Territory and the
Northwest Territories, where it is duly registered, licensed or otherwise
qualified for such purpose and other than jurisdictions where the failure to be
so registered licensed or otherwise qualified would not have a Material Adverse
Effect on its business.


 


(b)                                 Ownership of Secured Property
Free of Charges – The
Grantor is the owner of or has rights in the Secured Property free and clear of
all Liens whatsoever other than the Permitted Liens.


 


(c)                                  Maintain Perfected Security
Interest - The Grantor will
maintain the security interest created by this Agreement as a perfected
security interest having a first priority security interest (with the exception
of any Permitted Liens in accordance with the Credit Agreement) and shall
defend such security interest against the claims and demands of all Persons
whatsoever.


 


(d)                                 Account Debtor and Third Parties - each of the Accounts Receivable, Chattel Paper,
Contracts and Instruments constituting Secured Property is genuine and enforceable
in accordance with its terms against the applicable Account Debtor.


 


(e)                                  Amounts Due From Account Debtor - The amount represented by the Grantor to
the Lender from time to time as owing by each Account Debtor or by all Account
Debtors, to the best of the Grantor’s knowledge, is the correct amount actually
and unconditionally owing by such Account Debtor or Account Debtors, save and
except for normal cash discounts where applicable and a reasonable reserve for
bad debts.


 


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(f)            Place
of Business of Grantor - The Grantor’s chief executive office is
located at:


 


280
Attwell Drive 


Etobicoke,
ON M9W 5B2 


CANADA


 


(g)                                 Reliance and Survival - All representations and warranties of the
Grantor made in this Agreement or in any certificate or other document
delivered by or on behalf of the Grantor to or for the benefit of the Lender
are material, shall survive and shall not merge upon the execution and delivery
of this Agreement and shall continue in full force and effect. The Lender shall
be deemed to have relied upon such representations and warranties
notwithstanding any investigation made by or on behalf of the Lender at any
time.


 


4.2          Covenants


 


Unless compliance with the
following covenants is waived by the Lender in writing or unless non-compliance
with any such covenants is otherwise consented to by the Lender in writing, the
Grantor covenants and agrees that:


 


(a)                                  Notification to Lender -The
Grantor shall promptly notify the Lender of:


 


(i)                                     Claims and Liens - any claim or Lien, other than Permitted
Liens, made or asserted against any of the Secured Property; and


 


(ii)                                  Proceedings - any suit, action or proceeding affecting
any of the Secured Property or which could materially affect the Grantor;


 


(iii)                               Loss or Damage - all loss or damage to or loss of
possession of all or any part of the Secured Property other than by disposition
in accordance with the terms of this Agreement or the Credit Agreement; and


 


(iv)                              Account Debtor
Non-Performance - any failure of any Account Debtor in payment or performance of obligations due to the Grantor which may materially affect the Secured Property;


 


and
the Grantor shall, at its own expense,
defend the Secured Property against any and all such claims, liens, charges,
security interests or other encumbrances and against any and all such suits,
actions or proceedings;


 


(b)                                 No Accessions or Fixtures - The Grantor shall prevent the Secured
Property from becoming an accession to any property other than the Secured
Property or from becoming a fixture unless the Security Interests rank prior to
the interests of all other persons in the real property;


 


(c)                                  Changes and Other Names - The Grantor shall not (i) change its name
as it appears in official filings in the jurisdiction of its organization; (ii)
change its chief executive office, principal place of business, domicile
(within the meaning of the Civil Code of
Quebec), or corporate
offices at which Secured Property is


 


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held
or stored, or the location of its Books and Records, (iii) change the type of
entity that it is; (v) change its jurisdiction of incorporation or
organization;


 


(d)                                 No Consolidation/Amalgamation,
etc. - The Grantor shall not
enter into any corporate transaction (or series of transactions) whether by way
of reconstruction, arrangement, reorganization, consolidation, amalgamation,
wind-up, liquidation, dissolution, merger or otherwise, whereby all or
substantially all of its undertaking and assets would become the Property of
any other Person (such other Person or continuing corporation, “Successor Corporation”), and the Grantor shall not do any
act or thing that would materially adversely affect its business, property,
prospects or financial condition and shall not permit any corporation of which
it is the majority shareholder to do any of the foregoing; and


 


(e)                                  Further Documentation - The Grantor will furnish to the
Administrative Agent from time to time statements and schedules further
identifying and describing its assets and property and such other reports in
connection with the Collateral as the Canadian Agent may reasonably request, in
reasonable detail.


 


(f)                                    No Affecting the Security - It shall not do, permit or suffer to be
done anything to adversely affect the ranking or validity of the Security.


 


ARTICLE 5


RIGHT TO DEAL


 


5.1          Grantor’s Rights before Default


 


Until the occurrence of an
Event of Default and subject to the terms of this Agreement, the Grantor is
entitled to deal with the Secured Property in the ordinary course of business, provided
that, that no such action shall be taken which would impair the
effectiveness of the Security Interests created by this Agreement or the value
of the Secured Property or which would be inconsistent with or violate the
provisions of this Agreement or any other written agreement between the Lender
and the Grantor.


 


ARTICLE 6


DEFAULT


 


6.1          Default


 


The Grantor shall be in default
under this Agreement upon the occurrence and continuance of any of the
following events (each, an “Event of Default”):


 


(a)                                  Performance of Obligations - The Grantor defaults or fails to observe,
in payment or performance of any of the Obligations;


 


(b)                            Covenant Default -
The Grantor commits a breach of, or fails or neglects to observe, perform, or
comply with any covenant, representation, warranty or any other provision in
favour of the Lender;


 


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(c)                                  Event of Default - If an Event of Default occurs and is
continuing under the Credit Agreement.


 


6.2         Demand
Obligations


 


The fact that this Agreement
provides for Events of Default and rights of acceleration shall not derogate
from the nature of any Obligation which is payable on demand.


 


ARTICLE 7


REMEDIES


 


7.1          Lender’s Rights and Remedies


 


If any Event of Default
shall occur, all of the Obligations shall, at the Lender’s option, become
immediately due and payable and the Lender may, in its discretion, proceed to enforce payment and performance of
the Obligations and to exercise any or all of the rights and remedies contained
in this Agreement, (including, without limitation, the signification and
collection of the Grantor’s Accounts Receivable), or otherwise afforded by law,
in equity or otherwise. The Lender shall have the right to enforce one or more
remedies successively or concurrently in accordance with applicable law and the
Lender expressly retains all rights and remedies not inconsistent with the provisions
in this Agreement including all the rights it may have under the PPSA. Without
limitation, the Lender may, upon the occurrence of any Event of Default that is
continuing and to the extent permitted by applicable law:


 


(a)                                  Appointment of Receiver - Appoint by instrument in writing a
receiver (which term shall include a receiver and manager or agent) of the
Grantor and of all or any part of the Secured Property and remove or replace
such receiver from time to time or may Institute proceedings in any court of
competent jurisdiction for the appointment of a receiver. Any such receiver
appointed by the Lender, with respect to responsibility for its acts, shall, to
the extent permitted by applicable law, be deemed the agent of the Grantor and
not of the Lender. Where the “Lender” is
referred to in this Article the reference includes, where the context permits,
any receiver so appointed and the officers, employees, servants or agents of
such receiver;


 


(b)                                 Enter and Repossess - Immediately and without notice enter the
Grantor’s premises and repossess, disable or remove the Secured Property;


 


(c)                                  Retain the Collateral - Retain and administer the Secured Property
in the Lender’s sole and unfettered discretion, which discretion the Grantor acknowledges
is commercially reasonable;


 


(d)                                 Dispose of the Collateral - Dispose of any Secured Property by public
auction, private tender or private contract with or without notice, advertising
or any other formality, all of which are waived by the Grantor to the extent
permitted by law. The Lender may, to the extent permitted by law, at its
discretion, establish the terms of such disposition, including, without
limitation, terms and conditions as to credit, upset, reserve bid or price. All
payments made pursuant to such dispositions shall be credited against the
Obligations only as they are actually


 


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received.
The Lender may, to the extent permitted by law, enter into, rescind or vary any
contract for the disposition of any Secured Property and may dispose of any
Secured Property again without being answerable for any related loss. Any such
disposition may take place whether or not the Lender has taken possession of
the Secured Property;


 


(e)                                  Foreclosure - Foreclose upon the Secured Property;


 


(f)                                    Power of Attorney - Upon the occurrence, and during the
continuance of, an Event of Default, the Grantor constitutes and appoints the
Lender from time to time, or any receiver appointed of the Grantor as provided
for in this Agreement, the true and lawful attorney of the Grantor irrevocably
with full power of substitution to do, make and execute all such documents,
acts, matters or things with the right to use the name of the Grantor whenever
and wherever it may be deemed necessary or expedient in connection with the
exercise of its rights and remedies set forth in this Agreement. Without
limitation, the Lender or its agent is authorized to sign any financing
statements and similar forms which may be necessary or desirable to perfect the
Security Interest in any jurisdiction on behalf of the Grantor. The Grantor
declares that the irrevocable power of attorney granted in this Agreement,
being coupled with an interest, is given for valuable consideration;


 


(g)                                 Securities -


 


(i)                                     Disposal - Without limiting the generality of Section
7.1(d), the Grantor acknowledges that when disposing of any Securities, the
Lender may be unable to effect a public sale of any or all of the Securities,
or to sell any or all of the securities as a control block sale at more than a
stated premium to the “market price” of any shares, stock, instruments,
warrants, bonds, debenture stock and other securities forming part of the
Securities, by reason of certain prohibitions contained in the Securities Act (Ontario) and applicable laws of other jurisdictions, but may
be compelled to resort to one or more private sales to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire such
Securities as principal and to comply with other resale restrictions provided
for in the Securities Act (Ontario) and other applicable laws.
The Grantor acknowledges and agrees that any such private sale may result in
prices and other terms less favourable to the seller than if such sale were a
public sale or a control block sale and, notwithstanding such circumstances,
agrees that any such private sale shall not be deemed to have been made in a
commercially unreasonable manner solely by reason of its being a private sale.
The Lender shall be under no obligation to delay a sale of any of the
Securities for the period of time necessary to permit the issuer of such
securities to qualify such Securities for public sale under the Securities Act (Ontario) or under applicable securities laws of other
jurisdictions, even if the issuer would agree to do so, or to permit a
prospective purchaser to make a formal offer to all or substantially all
holders of any class of securities forming any part of the Securities;


 


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(ii)                                  Exercise of Rights - Upon the occurrence, and during the
continuance of, an Event of Default the Lender may elect by written notice to
the Grantor and to an officer of the issuer of the Securities, that all or part
of the rights of the Grantor in the Securities including, without limitation,
the right to vote, give consents, waivers or ratifications and take other
actions and receive dividends or other distributions, shall cease, and upon
such election all such rights shall become vested in the Lender or as it may
direct;


 


(iii)                               Registration - Require that the Securities be registered
in the name of the Lender or as it may direct and the Lender may then, without
notice, exercise any and all voting and corporate rights at any meeting of the
issuers thereof and exercise any and all rights, privileges or options
pertaining to the Securities as if it were the absolute owner, including
without limitation, the right to exchange at its discretion, any and all of the
Securities upon the issuer’s amalgamation, merger, consolidation,
reorganization, recapitalization or other readjustment or upon the issuer’s
exercise of any right, privilege or option pertaining to any of the Securities
and to deposit and deliver any and all of the Secured Property with any
committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as it may determine;


 


(h)                                 Collection of Accounts Receivable - Upon the occurrence, and during the
continuance of, an Event of Default the Lender on its own account or through a
receiver, receiver-manager or agent and whether alone or in conjunction with
the exercise of all or any other remedies contemplated by this Agreement, shall
have the right, at any time, to notify and direct Account Debtors to make all payments
whatever to the Lender and the Lender shall have the right, at any time, to
hold all amounts acquired from any Account Debtors and any Proceeds as part of
the Secured Property. Upon such occurrence and during such continuance, any
payments received by the Grantor shall be held by the Grantor in trust for the
Lender in the same medium in which received, shall not be commingled with any
assets of the Grantor and shall, at the request of the Lender be turned over to
the Lender not later than the next business day following the day of their
receipt;


 


(i)                                     Carry on Business - Carry
on or concur in the carrying on of all or any part of the business of the
Grantor and may, in any event, to the exclusion of all others, including the
Grantor, enter upon, occupy and use all premises of or occupied or used by the
Grantor and use any of the personal property (which shall include fixtures) of
the Grantor for such time and such purposes as the Lender sees fit. The Lender
shall not be liable to the Grantor for any neglect in so doing or in respect of
any related rent, costs, charges, depreciation or damages;


 


(j)                                     Payment of Encumbrances - Pay any encumbrance, lien, claim or charge
that may exist or be threatened against the Secured Property, and any amount so
paid together with costs, charges and expenses incurred shall be added to the
Obligations;


 


12

















 


(k)                                  Payment of Deficiency - If the proceeds of realization are
insufficient to pay all monetary Obligations, the Grantor shall forthwith pay
or cause to be paid to the Lender any deficiency and the Lender may sue the
Grantor to collect the amount of such deficiency; and


 


(l)                                     Dealing with Secured Property - Subject to applicable law, seize, collect,
realize, borrow money on the security of, release to third parties, sell (by
way of public or private sale), lease or otherwise deal with the Secured
Property in such manner, upon such terms and conditions, at such time or times
and place or places and for such consideration as may seem to the Lender
advisable and without notice to the Grantor. The Lender may charge on its own
behalf and pay to others sums for expenses incurred and for services rendered
(expressly including without limitation, legal, consulting, broker, management,
receivership and accounting fees) in or in connection with seizing, collecting,
realizing, borrowing on the security of, selling or obtaining payment of the
Secured Property and may add all such sums to the Obligations.


 


7.2          Assemble the Secured Property


 


To assist the Lender in the
implementation of such rights and remedies, the Grantor will, at its own risk
and expense and immediately upon the Lender’s request, assemble and prepare for
removal such items of the Secured Property as are selected by the Lender as
shall, in the Lender’s sole judgment, have a value sufficient to cover all the
Obligations.


 


7.3          Allocation of proceeds


 


All monies collected or
received by the Lender in respect of the Secured Property may be held by the
Lender and may be applied on account of such parts of the Obligations at the
sole discretion of the Lender.


 


7.4          Waivers and Extensions


 


The Lender may waive default
or any breach by the Grantor of any of the provisions contained in this
Agreement. No waiver shall extend to a subsequent breach or default, whether or
not the same as or similar to the breach or default waived and no act or
omission of the Lender shall extend to or be taken in any manner whatsoever to
affect any subsequent breach or default of the Grantor or the rights of the
Lender resulting therefrom. Any such waiver must be in writing and signed by
the Lender to be effective.


 


The Lender may also grant
extensions of time and other indulgences, take and give up securities, accept
compositions, grant releases and discharges, release the Secured Property to
third parties and otherwise deal with the Grantor’s guarantors or sureties and
others and with the Secured Property and other securities as the Lender may see
fit without prejudice to the liability of the Grantor to the Lender, or the
Lender’s rights, remedies and powers under this Agreement. No extension of
time, forbearance, indulgence or other accommodation now, heretofore or
hereafter given by the Lender to the Grantor shall operate as a waiver,
alteration or amendment of the rights of the Lender or otherwise preclude the
Lender from enforcing such rights.


 


13

















 


7.5          Remedies Cumulative and Waivers


 


For greater certainty, it is
expressly understood and agreed that the rights and remedies of the Lender
under this Agreement are cumulative and are in addition to and not in
substitution for any rights or remedies provided by law or equity; and any
single or partial exercise by the Lender of any right or remedy for a default or
breach of any term, covenant, condition or agreement contained in this
Agreement shall not be deemed to be a waiver of, or to alter, affect or
prejudice, any other right or remedy to which any one or more of the Lenders
may be lawfully entitled for such default or breach. Any waiver by the Lender
of the strict observance, performance or compliance with any term, covenant,
condition or other matter contained in this Agreement and any indulgence
granted, either expressly or by course of conduct by the Lender shall be
effective only in the specific instance and for the purpose for which it was
given and shall be deemed not to be a waiver of any right or remedy of the
Lender under this Agreement as a result of any other default or breach under
this Agreement.


 


7.6          Effect of Possession or Receiver


 


As soon as the Lender takes
possession of any Secured Property or appoints a receiver, all powers,
functions, rights and privileges of the Grantor and the directors and officers
of the Grantor with respect to the Secured Property shall cease, unless
specifically continued by the written consent of the Lender or the receiver.


 


7.7          Set-off or Compensation


 


In addition to and not in
limitation of any rights granted now or after the date of this Agreement at
law, upon the occurrence and during the continuance of an Event of Default, the
Lender may at any time and from time to time without notice to the Grantor (it
being expressly waived by the Grantor) to set-off and compensate and apply any
and all deposits, general or special, term or demand, provisional or final,
matured or unmatured, and any other indebtedness at any time owing by the
Lender, or to appropriate any other properties or assets at any time held by
the Lender, to or for the credit of or the account of the Grantor, against and
on account of the Obligations, even if any of them are contingent or unmatured.


 


7.8          Limitation of Liability


 


The Lender shall not be
liable or accountable:


 


(a)                                  by reason of any entry into or taking
possession of all or any of the Secured Property, to account as mortgagee in
possession or for anything except actual receipts, or for any loss on
realization or any act or omission for which a secured party in possession
might be liable; or


 


(b)                                 for any failure to exercise its remedies,
take possession of, seize, collect, realize, sell, lease or otherwise dispose
of or obtain payment for the Secured Property and shall not be bound to
institute proceedings for such purposes or for the purpose of preserving any
rights, remedies or powers of the Lender, the Grantor or any other person in
respect of same.


 


14

















 


The Lender shall not by
virtue of these presents be deemed to be a mortgagee in possession of the
Secured Property. The Grantor releases and discharges the Lender and the
receiver from every claim of every nature, whether sounding in damages or not,
which may arise or be caused to the Grantor or any person claiming through or
under the Grantor by reason or as a result of anything done by the Lender or
any successor or assign claiming through or under the Lender or the receiver
under the provisions of this Agreement unless such claim be the result of
dishonesty or gross neglect.


 


ARTICLE 8


GENERAL


 


8.1          Notices


 


Any notice, consent or
approval required or permitted to be given in connection with this Agreement
(in this Section referred to as a “Notice”) shall be in writing and shall be
sufficiently given if delivered (whether in person, by courier service or other
personal method of delivery), or if transmitted by facsimile:


 


	
  (a)

  	
  in the case of a Notice to
  the Grantor at:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  280 Attwell Drive,
  Etobicoke, Ontario

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  David Luinenburg, Vice
  President Finance 

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  416-798-8687

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (b)

  	
  in the case of a Notice to
  the Lender at:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  100 King Street West, 21st
  floor, First Canadian Place 

  Toronto, Ontario MSX 1A1

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Barbara J. Cox, Senior
  Counsel 

  	
   

  	
   

  
	
   

  	
   

  	
  Fax:

  	
  (416) 867-7191

  	
   

  	
   

  
							



 


Any
Notice delivered or transmitted to a party as provided above shall be deemed to
have been given and received on the day it is delivered or transmitted,
provided that it is delivered or transmitted on a Business Day prior to 5:00
p.m. local time in the place of delivery or receipt. However, if the Notice is
delivered or transmitted after 5:00 p.m. local time or if such day is not a
Business Day then the Notice shall be deemed to have been given and received on
the next Business Day.


 


Any party may, from time to
time, change its address by giving Notice to the other party in accordance with
the provisions of this Section.


 


15

















 


8.2          Amendment


 


No amendment, supplement,
modification or waiver or termination of this Agreement and, unless otherwise
specified, no consent or approval by any party, shall be binding unless
executed in writing by the party to be bound.


 


8.3          Enurement


 


This Agreement shall be
binding on the Grantor, and its successors (including any successor by reason
of amalgamation), and permitted assigns and enure to the benefit of the Lender
and its successors (including any successor by reason of amalgamation) and
assigns.


 


8.4          Further Assurances


 


The Grantor shall at all
times do all such things and provide all such reasonable assurances as may be
required to consummate the transactions contemplated by this Agreement, and
shall provide such further documents or instruments required by the Lender as
may be reasonably necessary or desirable to effect the purpose of this
Agreement and carry out its provisions, and for the better granting,
transferring, assigning, charging, setting over, assuring, confirming or
perfecting the Security Interest and the priority accorded to them by law or
under this Agreement.


 


8.5          Execution and Delivery


 


This Agreement may be
executed by the parties in counterparts and may be executed and delivered by
facsimile and all such counterparts and facsimiles shall together constitute
one and the same agreement.


 


The Grantor acknowledges
receiving a copy of this Agreement, and further agrees that a carbon, photographic,
photostatic or other reproduction of this Agreement or of a financing statement
is sufficient as a financing
statement.


 


8.6          Security Interests Effective Immediately


 


Neither the execution of,
nor any filing with respect to, this Agreement shall obligate the Lender to
make any advance or loan or further advance, or bind the Lender to grant or
extend any credit to the Grantor, but the Security Interests shall take effect
forthwith upon the execution of this Agreement by the Grantor.


 


8.7          Statutory Waivers


 


To the fullest extent
permitted by law, the Grantor waives all of the rights, benefits and
protections given by the provisions of any existing or future statute which
imposes limitations upon the powers, rights or remedies of a Lender or upon the
methods of realization of security, including any seize or sue or
anti-deficiency statute or any similar provisions of any other statute.


 


8.8          Reasonableness


 


The Grantor acknowledges
that the provisions of this Agreement and, in particular, those respecting
rights, remedies and powers of the Lender and any receiver against the Grantor,
its


 


16

















 


business and any Secured
Property upon the occurrence of an Event of Default, are commercially
reasonable and not manifestly unreasonable.


 


8.9          Discharge


 


Upon payment and performance
by the Grantor of the Obligations, the Lender shall upon request in writing by
the Grantor deliver up this Agreement to the Grantor and shall at the expense
of the Grantor cancel and discharge the Security Interests and execute and
deliver to the Grantor such documents as shall be requisite to discharge the
Security Interests.


 


17

















 


IN WITNESS
OF WHICH the Grantor
has duly executed this Agreement.


 


	
   

  	
  ALAMO
  RENT-A-CAR (CANADA), INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas C. Kennedy

  	
   

  
	
   

  	
   Name:

  	
  Thomas C. Kennedy

  
	
   

  	
   Title:

  	
  Executive
  Vice President
  and 

  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   I have authority to bind the Corporation.